Business ethics & governance Global business ethics Hearing Aids Within our Hearing Aids business area, we engage suppliers that are directly related to manufacturing but also indirectly to the goods and services that enable operation. The direct suppliers we collaborate with to manufacture and distribute hearing aids and the external parts for hear- ing implants are mainly manufacturers of electromechanics, electronics, mechanics, production consumables and material supporting packaging and marketing activities. During 2021, we dealt with 330 direct suppliers out of which 319 were signed under the Demant Group Third Party Compli- ance Code. Out of all 330 direct suppliers, 11 were not signed yet due to the current pressure on supply markets. We require of these to sign when possible, corresponding with our proce- dures. Supplier risk assessment and sustainability audit Our procedure does not imply that suppliers re-sign annually. Instead, we have a due-diligence process in place through which we frequently risk assess our direct suppliers based on their ability and willingness to comply with our Third-Party Compliance Code. The assessment considers business sector and certified management systems, as well as a geographical risk assessment created based on international standards, which takes factors, such as economy, bribery, unemployment, social factors and such into account. We also consider the lev- el to which a potential supplier can be mobilised in Demant’s sustainability agenda so that we direct our effort to where they have the largest impact. Year 2018 2019 2020 2021 Active Direct Suppliers 360 381 327 330 Signed Direct Suppliers 309 (86%) 313 (82%) 322 (98%) 319 (97%) In 2021, we signed eight new direct suppliers. Following our procedure, none of these required a risk-assessment. We did one re-assessment of an existing supplier, which led to a sustainability audit within which we found three critical non-compliances that were handled according to our protocol. Re-assessments are not a part of our standard procedure but is carried out when we identify a need to. 157 Demant ∙ Sustainability Report 2021
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