Orell Füssli : ESG Report 2022 with GRI Index (extract of the annual report)

ESG - Fundamentals of sustainability

Orell Füssli

ESG Report

This report is based on the requirements set out in the GRI Standards 2021. In line with GRI and the regulatory provisions for non-financial reporting, it contains introductory information on the Group's strategy and business model, followed by reporting on the material topics.

These are split into environmental, social and governance (ESG) topics.

Corporate responsibility

Orell Füssli can look back on a corporate history spanning more than 500 years. The company's roots go back to letterpress printing. Today, as an industrial company, security printer for banknotes and identity documents, bookseller and publishing house, the Group continues to operate in business areas of central importance to the economy, society and to each individual. This leads to an inherent sense of responsibility towards the economy and society at

Orell Füssli. This sense of responsibility extends beyond the business activities associated with the company's core business. Rather, the company is aware that it has to make an active contribution to the sustainable development of the economy, society and the environment.

Strategic commitment to sustainability

In 2021, the Board of Directors and the Executive Board decided to define a strategic framework for the company's entrepreneurial responsibility for society, the environment and the economy in order to manage the material topics in a targeted manner and identify potential for optimisation. The initial step taken in 2021 involved establishing a link to the United Nations Sustainable Development Goals (SDGs) relevant to Orell Füssli.

Orell Füssli strives to achieve strategic sustainability management in the long term. To this end, the Board of Directors instructed the Executive Board to draw up a multi-year plan. As a basis, the decision was made to disclose information on non-financial topics in an ESG report. Orell Füssli prepared its first report for the 2022 financial year in accordance with the standards set out by the Global Reporting Initiative (GRI). The report includes all companies consolidated in the Annual Report. The Board of Directors approves the ESG Report for publication as part of the Annual Report. The topics identified as material for the purposes of this first ESG Report form the basis for the future development of strategic sustainability management.

The roadmap drawn up by the Orell Füssli Executive Board for the definition and implementation of ambitious sustainability targets is shown in the graph below.

Orell Füssli

1. Business model, organisation and responsibilities

Orell Füssli's business activities are described in detail in the Annual Report in the chapters "Course of business" and "Growth strategy 2028".

The Articles of Association, Organisational Regulations, Risk Management and Internal Control System ICS, Code of Conduct, Rules for Entry of Registered Shares and Share Register Maintenance can be accessed online on the Orell Füssli AG website (https://www.orellfuessli.com/ en/investors).

Measures to strengthen the company's core business, which is organised in four business segments, Security Printing, Industrial Systems, Book Retailing and Other business areas, with the publishing houses and the digital business fields are being pursued systematically through focus, a great deal of initiative and targeted acquisitions. The figure below illustrates the business areas. The focus is on the megatrends of security and education.

Although the geographical focus in the education sector is clearly on Switzerland, Orell Füssli has global operations with its components, security products and services.

ESG - Fundamentals of sustainability

ESG - Fundamentals of sustainability

Orell Füssli

Joint venture Orell Füssli Thalia AG has a management team independent of Orell Füssli's management. The Orell Füssli Group exercises its influence via a seat on the Board of Directors and the exercise of shareholder rights. Orell Füssli Thalia AG draws up its own policies and regulations. However, the basic focus does not deviate from the group policies to any significant degree. Information is provided below to which documents a statement refers. Unless explicitly stated otherwise, the statements refer to Orell Füssli AG and its majority ­shareholdings. As in the Annual Report, the figures reported include the consolidated figures of the Group, with the figures for Orell Füssli Thalia AG proportionately consolidated; i. e. exactly half are taken into account. If the calculation method differs, an explicit note is included to this effect.

ESG management

In accordance with the roadmap for the design of systematic sustainability management, Orell Füssli developed a four-year plan with responsibilities allocated clearly to the Board of Directors and the Executive Board. The CFO is assigned responsibility for sustainability management and the corresponding reporting. The Audit Committee of the Board of Directors is responsible for supervision of ESG activities.

Three members of the Board of Directors have already completed sustainability training. Other members deal with sustainability topics as part of their mandates or operational activities.

Overview of the roles of the Board of Directors and the Executive Board

Figure: Four-year plan, including responsibilities for ESG management

Orell Füssli

2. Dealing with stakeholders

Orell Füssli works with a large number of clients, suppliers and other stakeholders. These range from public authorities to central banks, machinery manufacturers, libraries and law firms to end users who buy a book in a bookshop or online. Both physical and digital channels are used to interact with stakeholders.

Individual and face-to-face contact is common practice with industrial clients or in the project business, and Orell Füssli maintains dialogue with clients in the Book Retailing sector, both at points of sale and via customer service. Client contact is also cultivated at trade fairs and professional events.

The supplier structure within Orell Füssli is very diverse due to the different business models of the group companies. Book Retailing obtains its books primarily through supply channels such as Schweizer Buchzentrum, and as a retailer cannot exert any influence over the book production process. The publishing houses offer a range of products tailored to suit different target groups, from learning media to legal publications and selected children's books. In the publication business, Orell Füssli is involved in book production and selects the paper suppliers and printers itself. In the Security Printing niche, Orell Füssli works with a small number of highly specialised suppliers. In addition, the colours, substrates and security features to be used are usually specified by the client. The Industrial Systems business segment gives more room for manoeuvre in terms of the choice of suppliers.

Irrespective of the sector and product group, Orell Füssli expects suppliers and employees to show integrity in accordance with the Orell Füssli Code of Conduct. At Orell Füssli AG, employees are required to submit an annual extract from the criminal record and debt enforcement­ register to the HR department. Suppliers relevant to security in the banknote printing segment have to sign an additional Code of Conduct. ISO 14001 certification can be used as a supplementary selection criterion. Every three years, supplier audits are carried out at key suppliers by the Quality Officer and the Head of Purchasing.

Orell Füssli has been listed on the Swiss Stock Exchange since 1897 (see Corporate Governance Report, page 50). Orell Füssli shareholders receive first-hand information at the Annual General Meeting, which is held as a face-to-face event whenever possible. Orell Füssli also communicates relevant information on the course of business and its strategy in press releases, the Annual Report and analysts' conferences. This ensures that all shareholders have the same level of information at all times.

Orell Füssli's employees work at a large number of locations and in different time zones. At the same time, each professional group has different interests and needs. In order to provide all employees with the necessary information at the same time and promptly, Orell Füssli uses various communication channels in parallel. The aim is to maintain the necessary proximity in order that employees can ask questions to help them better understand decisions. In addition to video messages from the CEO, video conferences and an internal communication platform (intranet), the company also uses personal information events organised by local management teams or direct written communication in the form of email and letters (e. g. amendment of regulations).

ESG - Fundamentals of sustainability

ESG - Fundamentals of sustainability

Orell Füssli

Commitment via memberships and involvement in political processes

Orell Füssli is actively involved in political processes. An example is the planned implementation of an e-ID in Switzerland. The commitment does not take the form of lobbying, but rather involves an active contribution of knowledge and experience in the consultation process. Orell Füssli maintains contact with the public administration via interest groups. Memberships of associations are valuable for Orell Füssli as they promote the mutual transfer of knowledge. However, Orell Füssli is not politically active and does not make any donations to political parties.

Valuable memberships include:

• Swiss Retail Federation
• Intergraf
• International Currency Association (ICA)
• Banknote Ethics Initiative (BnEI)
• Energy Agency of the Swiss Private Sector (EnAW)

3. Topics identified as material

Orell Füssli's business activities can have positive and negative impacts on the economy, society and the environment. At the same time, Orell Füssli is exposed to the opportunities and risks arising from global trends. The gradual establishment of environmental, social and governance aspects as a firm component of the company's strategy, objectives, organisation and processes is broad-based. The identification of material topics as the basis for Orell Füssli's systematic sustainability management helps to minimise negative impacts, strengthen positive effects and identify future trends and challenges at an early stage.

In the materiality analysis conducted in the summer of 2022, the CEO, CFO, quality and risk managers, and representatives from all relevant business segments and specialist units, assessed about 26 potentially material topics in terms of the significance of their impact on Orell Füssli and the effects on the business environment (concept of dual materiality). Based on this process, the prioritised topics were mapped in a matrix. The materiality assessment was validated by the Board of Directors in a workshop in order to determine the topics material for Orell Füssli.