Fresenius Medical Care : Non-Financial Group Report 2021

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NON-FINANCIAL GROUP REPORT

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1. ABOUT THIS REPORT

1. BUSINESS MODEL
2. SUSTAINABILITY MANAGEMENT

1. Strategy

1. Global Targets
2. Material Topics
3. Sustainability Governance

1. Risk Management
2. EU Taxonomy
3. Stakeholder Inclusion
4. PATIENTS

1. Quality of Care
2. Access to Health Care

1. Collaborating to Improve Health Care

1. Digitalization and Innovation
2. Product Safety and Quality

96 EMPLOYEES

96 Employees Worldwide

1. Attracting and Developing Talent
2. Employee Engagement
3. Occupational Health and Safety

100 COMPLIANCE

102 DATA PROTECTION AND CYBERSECURITY

1. SUPPLIER MANAGEMENT
2. HUMAN RIGHTS

106 ENVIRONMENT

1. Environmental Management
2. Water

1. Energy and Climate Protection
2. Waste
3. Eco-Performanceof Products and Services
4. INDEPENDENT PRACTITIONER'S REPORT

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Sustainability Management	Data Protection and Cybersecurity
Patients	Supplier Management
Employees	Human Rights, Environment
Compliance	Independent Practitioner's Report

ABOUT THIS REPORT

This report documents the sustainability performance of Fresenius Medical Care in 2021. It contains relevant information relating to social, employee, and environmental matters, combatting bribery and corruption, and respect for human rights. We demonstrate how we integrate sustainability in our busi- ness, and how our activities contribute to our success and create value for our stakeholders.

The report fulfills the requirements of Section 315c in conjunction with Sections 289c to 289e of the German Commercial Code and the EU Taxonomy Regulation. It covers the reporting period from January 1 to December 31, 2021. Unless

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stated otherwise, the information provided refers to fully consolidated subsidiaries.

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesell- schaft (PwC) has assessed this report against the relevant legal requirements of the German Commercial Code and the EU Taxonomy Regulation. It has performed a limited assurance engagement according to ISAE 3000 (Revised). For the Independent Practitioner's Report, please SEE PAGE 110.

Our reporting approach is based on Global Reporting Initiative (GRI) international sustainability standards. Applied GRI standards are Disclosure 102-46 from GRI 102: General Disclosures 2016, and Disclosures 103-1,103-2, and 103-3 from GRI 103:

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Management Approach 2016. We use these standards as a framework in accordance with Section 289d of the German Commercial Code. We also consider the ten principles of the UN Global Compact in our reporting.

References other than those to the Group Management Report and Fresenius Medical Care's consolidated financial statements are for information only. They are not subject to the assurance engagement.

Due to rounding, individual numbers and percentages presented in this report may not precisely reflect the absolute figures.

BUSINESS MODEL

C 3.1 SUSTAINABILITY IMPACT

ENVIRONMENT

SOCIAL

GOVERNANCE

Through our Green & Lean initiative, each year we expect to:

• prevent almost 5,500 tons of CO2 equivalent emissions
• save 20,000 MWh of energy
• save 220,000 m3 of water
• recycle or reuse about 700 tons of waste

More than 1,000 tons of plastic waste were diverted from landfill because of a reusable container program at our U.S. dialysis clinics

Approximately half of the dialysis machines we produced belong to an eco-friendly machine generation

78 % of our patients would highly recommend our services

71 % of our employees feel a sense of belonging at work

17 new global ESG policies and other standards approved

Almost 90 % of employees completed compliance training

More than 50 aspects of our Global Sustainability Program were evaluated to measure its success

Fresenius Medical Care is the world's leading provider of products and services for individuals with renal diseases, based on publicly reported revenue and the number of patients treated. We provide dialysis and related services, as well as other health care services. We also develop, manufacture, and distribute a wide variety of health care products, which we sell to customers in around 150 countries in addition to using them in our own health care service operations.

In our more than 4,000 proprietary dialysis clinics in around 50 countries worldwide, we provide care for over 345,000 dialysis patients. We are continuously expanding this network of clinics to accommodate the ever-rising number of patients. In addition, we operate 42 production sites in around 20 countries.

Further information on our business model is provided in the Group Management Report starting on PAGE 19.

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Sustainability Management	Data Protection and Cybersecurity
Patients	Supplier Management
Employees	Human Rights, Environment
Compliance	Independent Practitioner's Report

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SUSTAINABILITY

MANAGEMENT

We took further steps to embed sustainability in our operations, business development, and finances as part of our Global Sustainability Pro- gram. For example, a sustainability component was included in our recent loan agreement, and we developed new global targets and policies across the program's eight focus areas.

STRATEGY

At Fresenius Medical Care, our focus is on serving patients. This shapes how we integrate sustainability into our business and tackle global health care challenges. Our commitment to sustainability is incorporated in our mission to provide the best possible care to a growing number of patients in diverse health care systems. It is also reflected in our strategy to deliver sustainable solutions with innovative products and services of the highest quality at a reliable cost. Our long-term focus is on activities that support this goal.

Managing sustainability successfully means creating lasting economic, ecological, and social value. For us, it also means driving the integration of sustainability in our business. Our Global Sustainability Program supports our efforts in this respect. Its overall objective is to establish global standards, processes, and measurements to help us continually improve. The program provides us with a basis for further analyzing our global impact and leveraging sustainability-related opportuni- ties. Our business activities touch upon various aspects of the UN Sustainable Development Goals (SDGs). In line with our corporate purpose, we particularly support SDG 3, which focuses on good health and well-being. In addition, we seek to make fur-

ther meaningful contributions to SDG 4 (Quality Education), SDG 8 (Decent Work and Economic Growth), and SDG 12 (Responsible Consumption and Production) in particular.

We aim to continuously incorporate sustainability in our business processes. This includes our operations, business develop- ment, and finances, as well as our internal controls. For exam- ple, in 2021 our Acquisitions and Investment Committee started to include defined sustainability criteria in its decision making, considering for instance the environmental impact of invest- ments, as well as access to health care and education. We are also in the process of analyzing our customers' sustainability requirements, including in tenders, and plan to integrate these in future tender offers. Furthermore, in 2021 we signed a new €2 BN credit agreement with an embedded sustainability com- ponent. As part of efforts to include sustainability in internal controls, more than 90 % of internal audits in 2021 included an environmental, social, and governance (ESG) aspect. Most audits focused on topics related to compliance.

We strive to spread awareness of our sustainability activities throughout the Company. For example, we have integrated further topics such as human rights and the environment into our mandatory Code of Ethics and Business Conduct training. This updated training was rolled out in the reporting year.

More information on our strategy can be found in the Group Management Report starting on PAGE 22. For further information on the sustainability-linked credit agreement, please see the Group Management Report starting on PAGE 43.

GLOBAL TARGETS

Our Global Sustainability Program reflects the increasing requirements for sustainability management, as well as our commitment to continuously improving our performance. It

defines global company targets for eight focus areas in the period between 2020 and 2022. We selected these areas based on the results of our materiality analysis, which identifies the most relevant sustainability topics for our business. Our focus areas are our responsibility towards our patients, as well as our employees, anti-bribery and anti-corruption, data protection and privacy, human and labor rights, sustainable supply, envi- ronment, and occupational health and safety. We highlight key targets for our focus areas in this report.

The success of our Global Sustainability Program depends on cooperation between all regions and global functions and the exchange of best practices. We strive to leverage our scale and expertise and take regional needs into account in our sustainability activities. In 2021, we established 17 new global policies and other standards, for example in the areas of environment, occupational health and safety, human and labor rights, and working conditions. We also defined new global performance indicators for various areas of the sustainability program, including the global hospitalization rate and the number of patient grievances. The success of our Global Sustainability Program is measured annually using an audited control and calculation model that evaluates more than 50 aspects. The program's progress is linked with Management Board compensation via a sustainability target.

In the year under review, we stepped-up internal communication on our sustainability activities and the sustainability pro- gram's targets to raise awareness among employees. In addi- tion, we communicated our progress and results externally to increase transparency for stakeholders. On our webpage, we disclose information in accordance with the GRI's core option, and the disclosure recommendations of the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate -related Financial Disclosures (TCFD) standards. These disclosures are part of our commitment to provide transparent

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Sustainability Management	Data Protection and Cybersecurity
Patients	Supplier Management
Employees	Human Rights, Environment
Compliance	Independent Practitioner's Report

and relevant information on our economic, environmental, and social performance to our stakeholders.

As part of our Global Sustainability Program, in January 2022 the Management Board established global climate targets.

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C 3.2 MATERIALITY ANALYSIS

LIST OF MORE THAN 100 POTENTIALLY RELEVANT TOPICS

based on our enterprise risk management framework, ESG ratings and rankings, benchmarks,

international sustainability reporting standards, trend analysis, media analysis

More information on sustainability in the compensation system can be found in the Compensation Report starting on PAGE 137. For further information on sustainability-related policies and commitments, please see our website. For more information on our global targets, please refer to the "Environment" section starting on PAGE 106.

MATERIAL TOPICS

We carry out a comprehensive materiality analysis every three years. This analysis identifies and prioritizes the sustainability topics that have the biggest impact on our business, and those that are affected most by our business. In the years between, we review the results of the analysis. In our most recent comprehensive materiality analysis in 2019, we selected and grouped topics from a list of more than 100. In building this list, we used various sources as a guide. These included our enterprise risk management framework, ESG ratings and rankings, and competitor benchmarks. Further sources were interna-

IMPACT OF

FRESENIUS MEDICAL CARE

We use three criteria to determine which sustainability topics are impacted by our organization:

• Likelihood that we will have
  a meaningful impact on the topic
• Our ability to influence how we impact the topic
• The extent to which we impact the topic

IMPACT ON		RELEVANCE
FRESENIUS MEDICAL CARE		FOR STAKEHOLDERS

We evaluate the extent to which
sustainability topics are relevant		We conduct interviews with external
to Fresenius Medical Care by looking		experts to confirm that our materiality
at their financial, strategic, regulatory,		assessment is complete and correct.
and reputational impact.

tional sustainability reporting standards like those of the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), and the results of our trend and media analysis. To help us define the materiality of and prioritize the different topics, we involved internal stakeholders from different regions and functions and reviewed the outcomes with external experts. Our latest review in 2021 confirmed that the topics identified in our analysis in 2019 were still the most relevant for our business. We continuously monitor and evaluate upcoming topics and areas of interest for our stakeholders (SEE ChART 3.2).

MATERIAL TOPICS