Sustainability at SMG

SMG’s Sustainability Strategy

SMG’s sustainability strategy is designed to enable long-term value creation. Built on four key pillars and covering seven material topics identified through a double materiality assessment (DMA), the SMG approach to sustainability involves all business units and teams.

Pillar 1: Leading with Integrity

SMG embraces ethical conduct, fair competition, strong governance, and transparency in its decision-making and business practices. The Sustainability Team, supported by internal Sustainability Champions, drives the strategy, implements the roadmap, raises awareness, and secures employee engagement. The Sustainability Steering Committee (SteerCo), overseen by the Executive Leadership Team, monitors progress, to ensure ethics, trust, and accountability.

Pillar 2: Securing SMG’s Digital Future

SMG prioritises cybersecurity and data protection to build and maintain trust with customers and stakeholders.

A comprehensive security strategy, supported by resilient systems and processes, helps protect against threats. Data protection is embedded in operations to ensure compliance and safeguard sensitive information.

Employees play an important role in maintaining the Group’s high standards of security and trust. SMG trains employees to recognise cyber risks and adhere to data protection standards, and educates customers on fundamental online safety on its platforms and in the wider web. Collaboration with industry partners and Swiss authorities also supports efforts to boost Switzerland’s cyber resilience and digital security.

Pillar 3: Empowering Employees

SMG fosters an inclusive and supportive workplace where everyone is valued and encouraged to contribute. The flexible, people-first environment encourages ownership, autonomy, and personal growth. By providing tools, training, and leadership development, SMG encourages its employees to thrive. Regular feedback loops help reinforce behaviours that align with the Company’s values.

Pillar 4: Driving Positive Impact

SMG focuses on climate action, responsible consumption, and community support to drive lasting, positive change towards a more sustainable future. Its carbon dioxide (CO₂) monitoring framework shapes the decarbonisation strategy, enabling data-driven net-zero targets and ensuring progress and accountability.

Double Materiality Assessment

In 2025, SMG conducted its first DMA aligned with the European Sustainability Reporting Standards (ESRS), building on the 2023 assessment. This approach identifies material impacts, risks, and opportunities (IROs), positioning SMG ahead of emerging Swiss and EU disclosure requirements.

The process followed guidance from the European Financial Reporting Advisory Group (EFRAG), ensuring methodological rigour and comparability with international peers. It was led by the Sustainability Team and supported by an external consultancy.

The resulting material IROs were reorganised to reflect SMG’s internal governance and management structure, aligning with strategic priorities and enabling clear, GRI-referenced reporting. The findings provide a strong foundation for refining SMG’s sustainability strategy, strengthening governance, and integrating sustainability considerations into target setting and disclosure processes. Building on this, SMG is preparing targets to manage material IROs. Updates on these targets and progress will be shared in future reports.

Process

The DMA has two components: impact materiality assessment (inside-out perspective) and a financial materiality assessment (outside-in perspective). Impact materiality refers to the way SMG’s activities affect the economy, environment, and people, while financial materiality reflects how sustainability-related risks and opportunities could influence the Group’s financial performance and strategic position.

The process is iterative and collaborative, and involves numerous stakeholders. SMG conducted internal interviews and workshops with representatives from HR, Finance & Risk, Legal, Compliance & Data Protection, Procurement, Cybersecurity, Sustainability, and customer-facing functions from all business segments to gather operational and commercial insights. External perspectives from suppliers and business partners, authorities, and investors were also considered through ongoing engagement embedded in SMG’s business model and processes.

Identified IROs from SMG’s activities along the value chain were classified as positive or negative, and as actual or potential. Each IRO was also assigned a time horizon to indicate when its impact is expected to materialise: short term (within the next year), medium term (one–five years), and long term (more than five years).

Impact Materiality Assessment

A broad set of impacts was selected for further analysis through stakeholder engagement in the form of structured interviews, workshops, surveys, and targeted desk research. These inputs improved the accuracy of the assessment and informed the evaluation of each impact.

The severity of SMG’s impacts on people and nature was assessed according to four criteria: scale, scope, irremediability, and likelihood. Scale considers the degree of harm or benefit associated with an impact. Scope reflects how widespread the impact is. Irremediability assesses whether, and to what extent, negative impacts can be reversed after they occur, and likelihood refers to the probability that an impact may occur.

Financial Materiality Assessment

The financial effects of identified risks and opportunities were assessed according to the magnitude of their potential financial impact and the likelihood of their occurrence in accordance with SMG’s enterprise risk management (ERM) framework, ensuring consistency with the Group’s broader risk processes and financial planning approach.

The assessment incorporated insights from SMG’s 2024 Taskforce on TCFD assessment, which provided a structured view of climate-related financial risks and opportunities. This ensured systematic evaluation of both climate and non-climate factors across strategic, operational, and market dimensions.

Financial materiality was evaluated using the two core ERM dimensions of impact magnitude and likelihood. Impact served as a proxy for the potential financial effect of a risk or opportunity. Likelihood reflected the probability of occurrence, including consideration of time horizons in the short, medium, and long term.

For the purposes of the DMA, the ERM categories were further refined, with the upper thresholds for both impact and likelihood split to better capture long-term effects. This ensures that risks and opportunities with extended timeframes are represented with greater granularity and explains potential differences between DMA and ERM results.

Evaluation of Impacts, Risks, and Opportunities

The financial materiality results were evaluated by key SMG specialists in risk management as well as financial planning and analysis. Internal stakeholders involved in the interview stage also validated the impact materiality results.

Following validation, the terminology and framing of the material IROs were refined to ensure continuity with previous assessments and reflect SMG’s business context. ESRS sub-topics and IROs were consolidated within the existing sustainability framework, reinforcing links between material issues, business priorities, and stakeholder expectations.

The final selection was confirmed through workshops with the Sustainability Team and SteerCo, which includes representatives from all SMG business units and central functions. The results were then validated by the Executive Leadership Team and the Risk and Audit Committee (RAC). SMG’s Board of Directors approved the DMA in December 2025. In total, 21 impacts, one risk, and two opportunities were identified as material.

Material Topics

SMG is committed to addressing its seven material topics through its evolving sustainability strategy. This report summarises progress over the past year and outlines the associated risks and opportunities, as well as policies, actions, and performance measures in place for managing these topics responsibly.

Double Materiality Assessment

The Group is monitoring two emerging impacts to do with fair and inclusive digital platforms throughout 2026, in recognition of their potential future relevance. They relate to the positive impact of enhanced accessibility and inclusion for users, and the potential negative impact of unintended bias from algorithms driven by artificial intelligence (AI). While not material in the 2025 DMA, they remain on the sustainability roadmap for continued observation.

Human rights risks were assessed as less critical. However, SMG continues to report key concepts, measures, risks, and indicators in line with Article 964b CO, and will track developments in this area.

Alignment with Sustainable Development Goals

SMG’s materiality assessment provides the foundation for its sustainability strategy and helps it prioritise resources to create the greatest impact. In the interests of strategic coherence and global relevance, each material topic is mapped to the UN Sustainable Development Goals (SDGs) where SMG can exert the greatest direct influence through its actions, platforms, and value chain.

This alignment supports meaningful reporting, aids in decision-making, and provides a consistent view of how SMG contributes to societal and environmental outcomes. The table below summarises these connections. Further details are included in the sections for each material topic.