02

Materiality Assessment

Our sustainability reporting

is built on solid foundations, including strong engagement with our industry peers, internal and external stakeholders, and a robust double materiality assessment to determine the core areas of sustainability that our company should report and focus on.

This chapter goes into more detail on how we work with stakeholders to shape a holistic view of our impacts at Hager Group.

It is our responsibility to take a holistic view of our business operations and their impact on the world around us. The double materiality approach in our materiality assessment is essential in understanding the interconnectivity between the environment, society, and our business. We recognize the importance of both internal and external impacts and reflect on that in the methodology we have adopted in identifiying material topics for our Group going forward.

Franck Houdebert,
Chief Human Resources Officer and the Board of Director’s Sustainability Ambassador

Overview of sector stakeholders proposed by Gimélec and adopted by Hager Group

02.1

Stakeholder Mapping

With activities and operations that span such a breadth of areas, we bring in a wide range of stakeholders to inform our materiality assessment. This is an important step in understanding the sustainability areas that are most relevant to our business, so we can allocate the appropriate resources to improving our performance and tracking our progress.

Bringing in a range of external voices makes sure that we include a diverse range of views and expertise, and do not miss out anything that is relevant to those who interact with Hager Group or are impacted by our operations.

Our stakeholder mapping, based on the proposal of Gimélec, the French trade association for electrical equipment, automation, and related services, is essential to this process, clustering stakeholders into the main groups relevant to our business.

02.2

Stakeholder Engagement

Hager Group engages in open and continuous dialogue with each of its stakeholders, at every level throughout the company through its target group managers approach.

Mapping-out Hager Group stakeholders is an entry-point to gaining understanding of the system and problems at hand, and is further important to gather an overview of the relevant stakeholders in this context and their expectations.

Here it is extremely important that Hager – just like us at Sonepar – develops solid reports that incorporate double materiality in the future.

Arno Elz,
Sustainability Manager at SONEPAR Deutschland

To share Hager Group expertise and develop increasingly innovative and higher performance solutions, Hager Group builds partnerships with a wide range of global and local players. The group is continually strengthening its local connections and its partnerships in all countries to deliver the best customer experience, while integrating sustainability at every stage. Alongside this, the group is involved in various local or international associations and organisations supporting sustainability, working with key players from across society.

The table below presents a detailed stakeholder mapping in the group’s ecosystem. Stakeholder expectations are listed along with how the group responds to them and identifies them through different communication mechanisms.

Stakeholder Engagement regarding Sustainability Issues in Hager Group (list is not exhaustive)

Stakeholder Type	Stakeholder Group	Means of Communication	Expectations (key topics and concerns)	Group Response
Social	Employees, social partners, union organisations	Surveys on the quality of life at work (Tell Us Survey, OHI), Occupational medicine, Personnel and union representative bodies, Agreements signed or under negotiation, Hager Group live (Intranet), financial & non-financial reporting, Annual Report	Quality of life and Health & Safety at Work Social and union rights Training, Employability, Career development Diversity Recognition at work Pay and incentive schemes	Lifelong Learning: Hi! Corporate University Strategy Hager Total Reward Strategy Participants in social dialogue Internal Mobility Charter Ethics Charter
Institutional	Authorities and the UN Global Compact Legislators, European Commission OECD National Governments where Hager Group is active	Dedicated Corporate affairs team Membership in technical panels and associations	Legal compliance Cooperation Lobbying Contribution to legislative text development	Commitment to electrical equipment user safety Close links with the Standardisation Bodies and joint projects Joint research projects with research institutions
Technical	Standardisation Bodies and Product Certification Environmental Standardisation Bodies, Teaching and Research, Independent experts, etc			Provide technical feedback to new and existing standards Contribute and participate to norms/standards development committees
Financial	Owners Banks Insurers	Financial Report	Good governance Performance Relationship of trust and consideration	Adequate reporting mechanisms allowing for corrective action when required
Business Partners	Suppliers and Subcontractors Groups & professional unions Consortiums Joint Ventures	Assigned target group managers take care of facilitating dialogue per target group per country Account executives	Durable relationship and guidance Shared specifications Loyalty and fairness Respect for confidentiality of data and exchanges	Evaluation of supplier CSR performance (approval procedure, audits, inspections, etc.), Annual meetings (supplier evaluation)
Customers	Integrators Original Equipment Manufacturers (OEM) Wholesalers Architects Installers Engineering Offices			Quality, safety, and ease of installation of products Customer awareness Ethical practices and trust Innovation	Customer satisfaction Responsible communication Collaborative innovation Sustainability Certification schemes
Civil Society	Local Residents Territorial Collectivities NGOs Media	Local partnerships and Media Officers	Support to local economic growth Dialogue, transparency, and ethical behaviour Observance of regulations, employment law, human rights, occupational health Environmental protection Sustainable Partnerships	Patronage and support to local associations through the Peter und Luise Hager Foundation

02.3

Materiality Analysis

Methodology

To ensure information provided in our sustainability report is relevant, meaningful and focused on the topics that matter most to our organisation and its stakeholders, we have conducted a double materiality assessment considering both the financial and non-financial impacts our activities on stakeholders, including social and environmental factors.

The analysis was conducted with the support of PwC Deutschland. The methodology can be summarised in the five following main steps:

1 identification of relevant topics
2 value chain mapping
3 impact materiality
4 financial materiality
5 validation of results with relevant external and internal stakeholders

1

Identification of relevant topics

To determine the relevant topics for Hager Group, a funnelling approach is used. To begin with, a long list of topics pulled from three different categories of sources – sector-agnostic, sector-specific, entity-specific was established.

The long list of topics leads to approximately 400 entries, which are then grouped into fifteen topic clusters to create a short list of topics. These topic clusters, which represent the relevant topics for Hager Group, are then matched with the three pillars of the group’s E3 strategy (environment, ethics, employees) and with the twelve European Sustainability Reporting Standards.

Sources used to establish the long list of Potential Material Topics

Sector-agnostic	Sector specific	Entity specific
ESRS European Sustainability Reporting Standards – Dec 2022	SASB Electrical & Electronic Equipment: 2018	Sonepar SAS 2021 CSR Report – published April 2022
GRI Global Reporting Standard 2021	Benchmark Analysis	Rexel SA Activity and Sustainable Development Report – published 12th July 2021
DNK Deutsche Nachhaltigkeitskodex 2022	Gimelec CSR guide for the electrical and digital equipment sector; latest version 06/2019 (in line with GRI)
World Economic Forum: The Global Risks Report 2022

2

Value chain mapping

Hager Group’s value chain, is mapped against the sustainability issues categories that correspond to the 15 material topic identified previously. The eight different steps of the value chain, from materials and components sourcing to installation, and the end of product life, are analysed according to the risks and opportunities they offer in terms of sustainability performance at shown in the table below.

2022 Hager Materiality Assessment / Value Chain Mapping

	Up- stream	Own		Downstream
	Materials and Components Sourcing	Development and Product Design	Production and Manufacturing	Retail	Distribution and Transport	Installation	Use Phase	End of Life
Climate change mitigation, adaptation, resilience and transition
General pollution: air, water and land pollution
Water & marine resources
Biodiversity & ecosystems
Resource use & circularity
Responsible sourcing
Product safety
Product sustainability
Employee satisfaction and labor rights
Talent attraction, training & development
Occupational health & safety
Diversity & inclusion
Digitalization
Corporate governance
Ethical business conduct

Estimated impact:
Very high
High
Low/Moderate

3

Impact materiality (inside-out)

Similar to the approach used to assess impact along the value chain, each dimension was attributed a score based on the assessment, results and findings from previous projects, and a consideration of Hager Group’s sector and also the group’s size and company structure. The sum of the score for each of the scope was then divided by three to obtain the overall assessment of the potential impact on a scale from 0 to 5. In turn, each topic cluster received an overall score between 0 and 5, which allowed to determine the impact materiality of each of the topic clusters. In addition to this, the topic clusters were rated between moderate and high.

Validation of results with internal stakeholders

Once Hager Group’s potential negative impact on each topic had been established, the preliminary results of the material impact analysis were discussed with internal stakeholders to ensure that they properly reflected the current concerns and focuses of the company.

To determine Hager Group’s potential negative impact on each of the fifteen identified topic clusters, they were all given a score between 0 and 5 across three dimensions to assess the possible extent of the potential impact:

Scope how widespread the impact is
5 = global/total
4 = widespread
3 = medium
2 = concentrated
1 = limited
0 = none

Scale how serious/ strong the impact is
5 = absolute
4 = high
3 = medium
2 = low
1 = minimal
0 = none

Irremediable in character in case of negative impacts: how hard it is to counteract or correct harm done
5 = non-remediable/ irreversible
4 = very difficult to remedy or long-term
3 = very difficult to remedy or long-term
2 = remediable with effort (time & cost)
1 = relatively easy to remedy short term
0 = very easy to remedy

4

Financial materiality (outside-in)

After conducting the impact materiality to determine Hager Group’s potential impact on the fifteen topic clusters, an outside-in approach was used to assess how those fifteen topics may affect Hager Group and present a financial risk for the company. The first component for evaluating those risks was to consider the thirteen financial drivers used by the Sustainability Accounting Standards Board (SASB) across the six disclosure topics they identified for Electrical and Electronic Equipment. The second component of the financial materiality assessment was the expertise of internal Hager Group experts. In turn, this followed the process logic presented below.

Financial Materiality Assessment Logic Process

5

Validation of results with internal and external stakeholders

Once the preliminary results of the impact materiality and the financial materiality are finalised, results are discussed and validated internally by the sustainability council, markets, the Excecutive Board and strategy.

In parallel, interviews are organised with selected external stakeholders⁶ for validation.

During the interviews, the methodology used to conduct the materiality analysis and Hager Group’s sustainability strategy are briefly presented. The objective is to align materiality results and identify reasons of slight misalignments when it is the case. In a pure stakeholder engagement approach, this is a continual open dialogue that embarks us with our customers in the same journey towards sustainability.

Key Learnings

The topics identified as material by the preliminary analysis were validated by external stakeholders, thus indicating an alignment between Hager Group’s sustainability focuses/concerns and what key external stakeholders deem relevant.

We want to involve our partners in our sustainable development approach. It is a story that we write with you Hager, as one of our biggest suppliers. As you said, we all have to go very fast, all together.

Noémie Alcaraz,
Sustainability Manager at REXEL France

Overall, the assessment points towards material global trends be they environmental, social, political or economic. However, the group’s business context identifies new joiners like responsible sourcing and talent retention & attraction as very highly material topics:

Talent attraction, training, and development play a crucial role in attracting and retaining the best employees, enhancing their skills and capabilities, and ensuring their alignment with Hager Group’s mission and values. This, in turn, contributes to the group’s competitiveness, innovation, and ability to deliver on its commitments to stakeholders. By prioritising and addressing these issues, Hager Group demonstrates its commitment to creating a positive and supportive workplace, while also contributing to its long-term sustainability and success.

Product safety is a critical issue for Hager Group and is considered highly material to the company and its stakeholders. It is primordial in our business operations that our products meet relevant safety standards and regulations. Product safety is a key factor in building trust and confidence with our customers. Deficient product safety could lead to irreparable damage and significant financial losses.

Climate is the main trend identified externally and internally. It includes the trend for energy transition, and green catalogues, on which external stakeholders expect Hager Group to take more leadership.

Responsible sourcing is an essential component of a sustainable and resilient supply chain and plays a critical role in overcoming current supply chain disruptions.

Double Materiality Assessment Results

Double Materiality Assessment Matrix

SONEPAR Deutschland and REXEL France among other external stakeholders were interviewed for the double Materiality Assessment in 2023.