Environment, Social and Governance

Engagement and wellbeing is key to Audinate’s success. Employee feedback provided through our annual engagement survey and mid-year pulse survey informed Audinate’s people and culture initiatives.

Employee engagement and wellbeing is key to Audinate’s success. Employee feedback provided through the annual

engagement survey and mid-year pulse survey informed Audinate’s people and culture initiatives. Survey results, including all employee comments, were shared with the Remuneration and Nomination Committee and the Board. The engagement results are in line with the industry benchmark when compared with a global peer group of small technology companies.

Wellbeing initiatives include an Employee Assistance Program providing a range of services including cost-free counselling for employees and immediate family members, wellbeing theme communications, and mental health first aiders. Pleasingly there were no incidents during the FY22 and FY23 periods resulting in injury requiring WorkCover notification in Australia.

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Audinate’s Board and management are committed to high corporate governance standards and to actively managing and responding to risks and opportunities. We have a number of Board endorsed policies and statements which focus on company culture including Corporate Governance Statement, Code of Conduct and Diversity policies:

Corporate Governance Statement
Board Charter
Audit and Risk Management Committee Charter
Remuneration and Nomination Committee Charter
Continuous Disclosure Policy
Shareholder Communications Policy
Risk Management Policy
Securities Trading Policy
Code of Conduct
Diversity Policy
Privacy Policy
Whistleblower Policy
Audinate Visions & Values

All of these documents are regularly reviewed and updated as necessary.

Board Skills

The Board aims to comprise directors with a broad range of skills, expertise, and experience from a diverse range of backgrounds that is appropriate to the Company and its strategy. The Board, together with the Remuneration and Nomination Committee, regularly reviews the skills required by the business and represented by the Directors of the Board. Together they will determine whether the composition and mix of those skills remain appropriate for the Company’s strategy, subject to limits imposed by the constitution. The Board Skills Matrix includes the following:

Business Risks

Audinate has a sound and robust risk management framework to identify, assess and appropriately manage risks. It regularly reviews and updates a detailed risk register as the risk landscape evolves. A summary of significant risks is detailed in the table below. The table below is not exhaustive and reflects a specific point in time.

We do not purport to list every risk that may be associated with Audinate’s business or the industry in which Audinate operates – the severity of risks assessed is dynamic and may change quickly, new risks may arise and other risks may be addressed or mitigated. Any of these risks and other emerging risks or matters may have a material adverse effect on the business and its financial position and performance.

More detail is contained in Audinate’s Risk Management Policy.

In addition to the risks described in the table above, Audinate faces other business risks including (but not limited to) competition in audio networking, industry standardisation, ability to attract and retain staff, effectively managing trade secrets, ESG risks, short-selling, impact of tariffs and foreign currency exchange risks.

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When selecting suppliers and contract manufacturers, Audinate evaluates the quality of their products as well as related controls and processes. Audinate assesses any potential new suppliers through an onboarding process to ensure consistency with internal standards. Audinate has a long-standing practice of directly managing relationships with key component suppliers rather than relying on contract manufacturers to source all components for the following reasons:

•Direct evaluation of key component suppliers is part of the quality assurance process;

•Negotiating improved pricing or supply arrangements for both Audinate and OEM customers;

•Managing lead-times and supply chain risk directly; and

•Fostering direct relationships with key technology suppliers and partners.

During FY23, Audinate launched its Supplier Code of Conduct to improve supply chain transparency and to assist supplier understanding of the required standards.

The Group’s main contract manufacturer, VTech Holdings Limited (‘VTech’) is listed on the Hong Kong Stock Exchange and operates manufacturing facilities in mainland China and Malaysia. VTech publishes an annual Sustainability Report, which includes statements on ISO 9001 accreditation and compliance with Modern Slavery and Conflict Minerals regulation (https://www.vtech.com/en/sustainability).

Supply chain management controls continue to be regarded as satisfactory and in FY23 Audinate has not identified any substantial residual ESG risk in its supply chain. Supplier risk management procedures and controls are reviewed with reference to the following criteria:

•Quality assurance considerations relating to repair and maintenance, training and development and where relevant production, manufacturing and calibrations including quality assurance set out in industry standards such as ISO 9001;

•Compliance and ethical considerations including compliance with Modern Slavery Act requirements, prohibitions on child labour, compliance with conflict minerals regulations, worker health and safety, discrimination, compensation and renumeration;

•Commitment to minimising impact on the environment within their manufacturing operations, utilising management systems such as ISO 14001; and

•Governance, risk and control processes in place to manage operations, including supplier supervision, counterfeit avoidance measures, stakeholder engagement and disclosures.

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Audinate is committed to taking ongoing steps to address the environmental impacts of the business. In FY23 Audinate completed a Scope 1 and 2 emissions inventory with the assistance FairSupply, an independent ESG consultant. This was calculated in accordance with the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standards. As a software technology provider, Audinate’s environmental footprint based on Scope 1 and 2 emissions, is relatively small.

In summary, Audinate’s Scope 1 emissions are zero as it does not own any premises with boilers or furnaces or run a fleet of vehicles for business operations. Audinate’s Scope 2 emissions of 114.3 tCO2e came from electricity consumption in four office locations in Sydney, Australia, Portland, USA, Cambridge, UK and Louvain La Neuve, Belgium. Audinate continues to evaluate Scope 3 measurement methodologies and the level of upstream and downstream Scope 3 emissions associated with the production and distribution of Dante products.

Using emissions factors (kg CO2-e/kWh) the breakdown for Scope 1 and Scope 2 FY23 is:

Deployment of Audinate technology is expected to reduce the amount of on-premises AV equipment and facilitate a transition to AV services in cloud-based software form. Amongst other things, this will improve societal environmental outcomes by ensuring improved audio-visual experiences for people, enhanced virtual collaboration and hybrid working arrangements.

The Group recognises the importance of minimising the environmental impact on the business, as well as the opportunity for the Dante technology to help customers and end-users minimise the environmental impacts of their operations.

Audinate is subject to federal, state and local regulations and has procedures in place to comply with applicable regulations in the jurisdictions where the Group operates. During the reporting period, there were no incidents of non-compliance that resulted in regulatory or legal action or fines and penalties, with respect to legislation.

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We have used the principles of The Global Reporting Initiative (GRI) Sustainability Reporting Standards to broadly guide our disclosures. The Audinate GRI Index of our ESG disclosures against the GRI Reporting Standards should be read in conjunction with the rest of Audinate financial statements, including our FY23 Remuneration Report and the Audinate Corporate Governance Statement.

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