SGS 2022 Integrated Report en

Enabling a better,
safer and more

interconnected
world
SGS 2022 Integrated Report
Management report 1
Letter to stakeholders 8
CEO Q&A 10
Our company 12
Non-financial and financial results 14
Our TIC megatrends 16
Our business model 18
Our leadership team 22
Our corporate strategy 24
– a sustainability solutions framework 26
Our divisional strategy 28
– aligned to megatrends
Our investment strategy 30
– our platform for growth
Our investment strategy in action 32
Our investment strategy 34
– acquisitions and partnerships
Our focus on sustainability 36
Stakeholder engagement 40
Our material topics 42
Our risk intelligence 43
Our principal risks 46
Quantifying our value through six capitals 50
Financial capital 52
Financial capital by divisional 54
performance and outlook
Manufactured capital 58
Intellectual capital 62
Human capital 66
Social and relationship capital 72
Natural capital 76
Our contribution to the SDGs 80
SGS brings together global teams
Corporate governance 84
of highly qualified experts providing
Investor relations at SGS 101
specialized solutions across our
Remuneration report 102 industries. We enable a better, safer
and more interconnected world,
Financial statements 124
making business faster, simpler
Non-financial statements 190
and more efficient.
Our approach to sustainability reporting 191
Databank192
Our leading testing, inspection and
2022 GRI content index
Sustainable Accounting Standards
204
212
certification services add measurable
Board (SASB) framework alignment value to business and society.
Appendix215 They reduce risk, improve efficiency,
TCFD report 215 safety, quality, productivity and
Human rights report
Shareholder information
228
236 sustainability, accelerate speed
to market and create trust.
Our integrated reporting approach
The Integrated Reporting framework <IR> aims to create
transparency. For the first time we have integrated our
financial, operational and sustainability information into a single
fully integrated report – measuring, as we have for the last five
years, our financial and non-financial performance across the
six <IR> capitals. This report has been prepared in accordance
with the comprehensive option of the GRI Standards, the
Sustainability Accounting Standard for the Professional and
Commercial Services Industry (SASB), and it follows the
guidelines for the AA1000 AccountAbility Principles Standard.
This report also complies with the reporting requirements
set in articles 964a to 964c of the Swiss Code of Obligations.
www.sgs.com/en/integrated-report
Cover image: Randall Maduro, Netherlands
Management Corporate Remuneration Financial Non-financial Appendix
report governance report statements statements 1
We are passionate
about our purpose
César Denegri, Peru
“We are leading the teams

that supervise shipments of
hydrobiological products to
verify the quality is in compliance
with national and international
standards. This is how I contribute
to enabling a safer world.”
We are SGS
SGS | 2022 Integrated Report

2 Management
report
Nicolas Kyndt,
Switzerland
“We support energy efficiency

and optimization, integrating our
solutions with an organization’s
operational processes, and
identifying opportunities to
accelerate their energy transition
and society’s decarbonization.”
We are
providing our
customers with
better energy
solutions.

The challenge
for our customers
There is a growing need to
accelerate the world’s energy
transition and to achieve net-
zero. This has become more
urgent for corporations and
governments, with high fuel
prices, inflationary pressures,
supply chain bottlenecks and
geopolitical tensions. They are
seeking urgent improvements
in every aspect of their energy
management: from producers
to end users.
Supporting reductions We are shaping

in energy and emissions
Certifying to ISO 50001 standards can help
our thriving future
organizations, large or small, to save energy With the world facing significant
and costs, while actively demonstrating challenges to limit the impacts of
a commitment to sustainability. It can climate change, we believe our
also offer them a competitive advantage, sustainability solutions will help
encouraging the use of processes that are organizations manage their energy
more energy efficient and environmentally transition, reduce emissions and
friendly. Our audits against ISO 50001 assist with practical matters like the
can help an organization to stand out digitalization of their real estate.
from the crowd, as well as supporting
them to develop and further improve • We develop data-enabled services
their performance. aiming at supporting building
portfolio owners, developers
Better means
and users by collecting accurate
We enable a better world by helping
businesses everywhere to work
and extensive energy and
efficiently, to deliver with quality, carbon datasets
and to trade with integrity and trust.
• We provide technical data to our
customers to help identify the most
relevant energy efficiency measures
they can implement to make their
buildings smarter and greener
40%
Expected carbon reduction
• We are working with customers
to reduce energy costs and
greenhouse gas emissions to help
them become more independent
per building portfolio from energy market disruption
7 500
assets inspected to be transitioned Watch our case study film at
to our new digital platform www.sgs.com/en/integrated-report

4 Management
report
Jorge Bazo,
Peru
“We help our customers ensure

the safety, quality and sustainability
of their food products, and in
turn build consumer trust and
confidence. By expanding our
testing portfolio in the region,
we can fulfill local market needs
and serve the export market.”
We are
at the forefront
of testing for
food safety.

The challenge
for our customers
Despite our strong food testing
footprint across the Group,
we were unable to offer a
comprehensive testing solution
throughout Central and South
America. Sending samples for
testing across borders was also
slow due to customs issues
and turnaround time challenges.
With the food market growing
across the continent, our
customers needed help to meet
local demand and food safety
requirements for exporting.
Expanding our We are shaping

food laboratory
network in Central
our thriving future
and South America Our revitalized network provides
the answer to Central and South
Our teams across South America have America’s food safety requirements
worked hard to expand our capabilities and will allow us to offer quality and
in Peru, Chile, Ecuador, Colombia and safety testing services that meet
Argentina, as well as establishing new stringent European, American and
laboratories in Mexico and Brazil – from Asian requirements.
microbiology, molecular biology, and
allergens, to the detection of contaminants • We offer specialist testing services,
such as heavy metals, pesticides and e.g. seafood in Chile and Ecuador,
veterinary drugs. We can also support the and meat in Argentina
Safer means export of fruit, vegetables, seafood, meat
• Our laboratories in Chile, Peru and
We enable a safer world by ensuring and poultry, while ensuring local food
Brazil cover pesticides, molecular
that the food you eat is safe and safety and quality standards are met.
that the environment you work biology and more
in is secure and clean.
This complements our existing
primary food production solutions that
support producers in the field, using
new technology for precision farming.
This farm to fork approach ensures
better, safer and more sustainable
9
food laboratories across
food, locally and globally.
Central and South America
400+
attendees to our SGS Tour Agro Watch our case study film at
event in Peru and Colombia www.sgs.com/en/integrated-report

6 Management
report
Kai-Fan Chang,
Netherlands
“In a connected world, there

is no safety without security,
as devices have open interfaces
that you can connect to
from anywhere in the world.
We combine security testing
with safety testing to provide
a full-service package of
security solutions.”
We are
helping
manufacturers
of IoT devices to
ensure product
security.
The challenge
for our customers
Many Internet of Things (loT)
device manufacturers have
products that are connected
to a network or interact with
other devices, but they may
not always be aware of all the
regulations, or the security they
need to build into their devices.
As a result, consumers may buy
IoT devices that are not secure,
risking their cyber safety and as
a result, potentially damaging
the manufacturer’s brand.
Comprehensive We are shaping

cybersecurity
testing solutions
our thriving future
We provide our customers with Through our comprehensive testing
comprehensive cybersecurity solutions, offering for existing IoT devices
including training, risk assessments and and the earlier consideration for
testing for their IoT devices. We also help cybersecurity in their designs,
the industry to embed cybersecurity into consumers will have more trust
the design phase, so that security is a in the security of the IoT products
consideration for all IoT devices from day they purchase.
one. Our test solutions for IoT devices • IoT brands and manufacturers
cover a wide range of wireless networks, are increasing the safety of
devices, and technology, including Bluetooth, their products and building their
Wi-Fi and near field communication cybersecurity reputation, which
More interconnected means (NFC). The acquisition of Brightsight last will lead to repeat purchases and
We enable a more interconnected year expanded our solutions to cover an increase in new customers
world by helping new technology cybersecurity requirements for a range
to reach consumers quickly and
affordably, by ensuring the security of new devices. • Our cybersecurity product
of IT systems and data, and by certification mark, introduced
using artificial intelligence (AI) and this year, gives consumers a
IoT to help develop smart cities.
clear indication that their IoT
devices have been fully tested
and are cyber-safe
35+
years of experience in
security evaluations
55+
laboratory set ups Watch our case study film at
www.sgs.com/en/integrated-report

8 Management
report
Letter to
stakeholders
Calvin Grieder
Chair of the Board
of Directors
Enabling a better,
We have set very ambitious targets and
to meet them we must concentrate on
what is at the heart of our business – our
people. Better performance is not just about
safer and more

technology, it is led by our expertise. Together,
we are building a network of highly trained,
passionate and committed employees,
who operate in a work environment that
interconnected
emphasizes safety, efficiency and excellence.
Underpinning this is a philosophy of training
that prioritizes personal development to
deliver expertise across the network.
world
At the same time, we understand we do
not exist in isolation and so we are finding
new ways to help the most vulnerable
groups in our society. For example, SGS
Academy provided pro bono training to
over 400 people in Ghana, Pakistan, India,
Together we are Dear stakeholders,
Bangladesh and Turkey in 2022. This is
the kind of concrete support we provide to
building a thriving and Imagine a world without access to the
resources of today. How would this affect
the communities in which we operate and
which we aim to accelerate.
sustainable business. the way you live and work? Ensuring a safe
flow of goods is at the core of us all at SGS, I am proud to say that SGS is the first
every day. company in the TIC sector to have its
1.5º C and net-zero targets approved by
These are challenging times. Pandemics,
the Science-Based Target Initiative and
global supply chain decoupling, inflation
we are now committed to reach net-zero
and social disconnection have all become
greenhouse gas emissions across the value
part of the new normal but there is one
chain by 2050. To meet this goal and protect
challenge that, if left unchecked, will be
the planet every person must play their part.
catastrophic for everyone – our impact on
the environment and the climate crisis. I tried to work on understanding what
these targets mean to me and to put our
SGS is fully engaged in finding solutions to
company-wide actions into this context. It is
these problems, answering the challenges
difficult to work on an abstract CO2 emission
of the modern world while enhancing
number and set it in proportion to what we
sustainability and building prosperity. To be
do every day. If we consider that a single
truly successful, the changes we need to
round trip flight from Geneva to New York
make must impact every aspect of our daily
already accounts for 20% of the average CO2
lives, both at home and work. All across
emissions1 of a single person per year, we
the network, we are making decisive
have a good understanding of the magnitude
improvements by focusing on people,
of steps a company of our size must do
planet and performance.
to reduce its impact.
1. Source: IATA and World Bank.

We are
helping our customers
Another example we can all relate to is
our daily meals. Think about how much
we could reduce by consuming local
save energy and reduce

products rather than produce produced
and transported from abroad. We all can
make a big difference.
We have started numerous projects with
this mission in mind and are determined
to take the necessary steps. To name a
greenhouse gas
couple of examples, our energy efficiency
in buildings program targets our most
energy intensive buildings and applies
emissions through our
energy efficiency measures to optimize
their consumption. In addition, this year
we have increased by 500% our solar
sustainability solutions
energy onsite production. Our new vehicle
emissions policy targets our second major
source of emissions and sets new and
– and we do the same
ambitious goals to gradually reduce the
CO2 emissions of our fleet in the
coming years.
across our own sites.
All these actions will enhance our
performance. This is not only driven by the
innovative solutions we offer, but also by This focus on people, planet and Finally, I started by saying we are living
solid processes that enhance efficiencies performance lets us build a solid culture through challenging times but, by working
and robust guidelines that ensure safety. of sustainability. The innovative solutions together and with a common purpose,
Taking our lead from the automotive sector, we are developing will not only benefit we are making a difference. I would like to
we continue to build our global network of our business but also our customers as take this opportunity to thank the Board and
World Class Services (WCS) laboratories. they continue on their journey towards every employee working for SGS for their
This strategic program stimulates a culture a sustainable world. hard work and dedication. I would also like
of efficiency and excellence by developing If we want to succeed in our ambitions, to say a special thank you to our investors,
people and fostering a mindset that allows and I am convinced we will, then we who continue to support us as we move
change, engagement, empowerment and must understand the decisions we make towards a better, safer and more
the diffusion of knowledge. today will not only have a profound impact interconnected world.
In today’s connected world data has become on our business but also on the future As the world’s leading TIC company,
an important backbone for driving efficiency. of the planet. In 2022, we welcomed we are ready to answer whatever
Our program to implement a new seamless a new board member expanding our challenges the future may present.
IT structure has fostered our efficiency on regional representation and the necessary This is my passion, and it is at the
a large scale. Data is also an important asset skills to prosper. With the creation of our core of everything we do at SGS.
to our customers’ business. In response, sustainability committee, we are also
SGS is evolving into a fully data-driven accelerating the development of new
company by implementing more efficient services and solutions that allow us
systems and platforms. Operating in this and our customers to reduce environment
way allows us to offer a better customer impact while maximizing opportunities.
experience, with material improvements in Calvin Grieder
customization and the ability for customers Chair of the Board of Directors
to connect and integrate directly with our
data platforms.

10 Management
report
CEO Q&A
Frankie Ng
CEO
Bringing our
purpose to life
Our strong spirit Markets saw some recovery
in 2022 but the current
In my opinion, our greatest achievement is
our spirit of solidarity. This has had a positive
of solidarity is trading environment remains
challenging. How has SGS
impact throughout the network over the last
year, sometimes in extreme circumstances.
helping us support fared, and can you highlight
a few achievements?
For example, when we asked how we
could help displaced colleagues at the
our customers I’d like to start by expressing my gratitude
start of the war in Ukraine, we received an
overwhelming amount of support with our
to over 97 000 colleagues around the globe
and communities. who have contributed so much to the
people going to the border to transport our
colleagues and families to safe hotels to get
success of SGS in 2022. This is a journey food and rest. This support and kindness
we are on together and it is testament to gave our colleagues a chance to recuperate
your capabilities and fortitude that we have and consider the next stage of their journey.
achieved so much during the last 12 months.
We’ve seen similar things in Shanghai,
At the beginning of 2022 it looked like China, where what was predicted to be
we were nearing the end of the pandemic a short Covid lockdown ended up lasting
and then, almost immediately, the war two months. During this time we had
in Ukraine began. There have also been colleagues confined to their homes and
macro-economic factors that have impacted stuck at laboratories, but together we
all companies, like inflation and labor issues found ways to keep them supplied with
and some more specific to the TIC industry. food and other essentials.
I would say we’ve responded well, with
strong results in 2022 and we continue to In challenging times, this spirit of solidarity
challenge ourselves to make sure we meet brings us together and makes us stronger.
and exceed the goals we have set for 2023.

“I started this Q&A by expressing my gratitude to

everyone in the SGS network for their hard work
and resilience. In my travels to meet with affiliates,
what I see again and again is our people working
with passion, looking for innovative solutions that
support our customers and communities, finding
better ways to bring SGS’s purpose to life.”
Turning to SGS’s three main Other new ways to optimize our network The business climate is likely
strategic objectives for 2023 include the implementation of World to remain challenging in the
– investment to consolidate Class Services, with 26 laboratories now foreseeable future. How is
growth, becoming the largest employing World Class Management, and SGS positioned to respond?
digital company in the TIC we continue to gain efficiencies through
sector, and increasing revenue improved back-office systems such We are seeing multiple macro-economic
from sustainability solutions – as enterprise resource planning (ERP), challenges at the moment, such as high
what progress have you seen? customer relationship management (CRM), inflation and geopolitical disruption.
shared service centers and IT outsourcing. These cycles seem to be becoming more
Looking at the five divisions, a primary Finally, sustainability. With a clear vision, frequent and stronger, however, we remain
strategic objective was consolidation new targets and a framework for looking confident that we can continue to adapt
through investment to secure our leadership at sustainability in external services, we and be agile in our responses.
position. I am proud to say that this has been are confident of reaching our goal of 50% SGS is a resilient company, with highly
achieved in Natural Resources, Connectivity of revenue from sustainability solutions. diversified end-markets both industrially and
& Products and Knowledge, and we will We are also finding new ways to support geographically. Our focus is on maintaining
continue to reinforce these areas through our customers on their sustainability organic development in the areas where
the expansion of our technical consultancy journeys, regardless of their industry we are already strong. We are continuing to
network. We are also on target to complete sector or maturity. Together, we are even make acquisitions to exploit potential growth
more than CHF 1 billion of revenue (constant introducing new solutions which reduce areas, such as expansions in our footprint,
currency) in the Health & Nutrition sector and the impact of industries which traditionally skill set and technical capacities, adding
become the market leader in Environment have a bigger environmental impact. competences and accreditations. Finally,
for our Industries & Environment division. we are investing in innovative processes
Working in this innovative, forward-thinking
In terms of operational performance, way, we are discovering solutions that and solutions to optimize our systems
we have achieved mid- to high-single digit benefit our customers, our business and customer offering.
organic growth over the last two years and and our planet. Operating in this way, we have built a
continue to acquire expertise in key sectors resilient and sustainable structure that can
such as cybersecurity, cosmetics, biopharma weather all macro-economic challenges
and analytical services to expand our reach SGS has announced ambitious
targets with its Sustainability in the long term.
and capabilities.
Ambitions 2030. Where do we
Looking at becoming the most digital stand today with these targets? How else do you
company in the TIC sector, we are making see SGS guaranteeing
solid progress building our ‘platform for That is a long list but, based on what a thriving future?
growth’ through our Level Up initiatives we’ve seen so far, I would say we are on
being driven by our Chief Financial Officer target to meet both our 2023 and 2030 I started this Q&A by expressing my
and Chief Information Officer. We have targets, whether they are for safety, carbon gratitude to everyone in the SGS network
successfully implemented our digital emissions or diversity and inclusion. for their hard work and resilience. In my
labs strategy in our Natural Resources travels to meet with affiliates, what I see
However, it’s not all about hitting targets
laboratories by harmonizing our Laboratory again and again is our people working with
and what is more interesting to me is
Information Management Systems (LIMS) passion, looking for innovative solutions that
the evolution I see in SGS’s culture of
which standardizes workflows, improves support our customers and communities,
sustainability. Through investment in new
efficiencies and reduces turnaround times finding better ways to bring SGS’s purpose
schemes and concepts and effective
for our customers. As part of our digital to life. This is what is important to me and
communication with colleagues, we are
evolution, this progress will continue to be again it takes me back to SGS’s strong spirit
changing this culture both at home and in
made across the rest of the network over of solidarity.
the office. Improvements can be difficult
the next two years.
to quantify, but it is vital if we are to meet
our 2023-2030 Sustainability Ambitions
and I am pleased to say we are making
good progress.

12 Management
report
Our company We operate in 116 countries. This makes

us truly global and focused on the impact
we have on the planet.
Americas
20.5%
of total SGS revenue
North America
Latin America
Our five divisions
1 2 3
Connectivity & Products Health & Nutrition Industries & Environment
We are the experts who support brands, We assure quality, safety, sustainability and We enable safer, greener and smarter
manufacturers, retailers and governments security in the health, wellness and nutrition infrastructure, transportation and industries
across the supply chain with the performance, industries, helping our customers to meet through our innovative solutions, which is
safety, security and quality of their products stringent standards throughout their supply important as organizations transition towards
and services. We help make products better chain and, ultimately, improving the quality cleaner and sustainable energy solutions to
and safer for an increasingly connected world. of life in society. meet their environmental responsibilities.
Adjusted operating income Adjusted operating income Adjusted operating income
CHF 313 MIO CHF 119 MIO CHF 224 MIO

Adjusted operating income margin Adjusted operating income margin Adjusted operating income margin
23.9% 13.3% 10.4%

Read more on page 54 Read more on page 54 Read more on page 55

Revenue by division
Total
CHF 6 642 MIO

Connectivity
& Products
1 311 MIO
Asia Pacific Health
35.2%
& Nutrition

892 MIO
Europe, Africa, North East Asia
Middle East
South East Asia & Pacific
44.3%
Industries &
Environment
Africa & Western Europe

2 157 MIO
North & Central Europe
Eastern Europe & Middle East
4 5 Natural
Natural Resources Knowledge Resources
1 583 MIO
We are a global network of trusted, We have the expertise and knowledge,
independent and committed experts who and the people, processes and tools to help
deliver pivotal solutions to the agricultural, organizations improve their results, manage
mining, oil, gas and chemical industries, risk, comply with regulatory changes, adopt
supporting quality, safety, efficiency and best practice and meet increasingly stringent
sustainability goals across the supply chain. sustainability requirements.
Adjusted operating income Adjusted operating income
CHF 225 MIO CHF 142 MIO

Adjusted operating income margin Adjusted operating income margin
14.2% 20.3% Knowledge
699 MIO
Read more on page 55 Read more on page 55

14 Management
report
Non-financial and We made good progress in 2022 investing

financial results in our platform for growth and evolving SGS’s
culture of sustainability to help us meet our
2030 Ambitions.
SO Strategic Objective
Our corporate
sustainability leadership People Planet
Women in leadership positions Reduction in CO2 emissions
Member of DJSI World and Europe,

and leader of the professional services
industry in S&P Corporate Sustainability
Assessment (CSA) and well over double
the sector average
31.1%
+7%
-10.5%
against 2019 baseline
2022 31.1 2022 116 505
2021 29.0 2019 130 201
Prime distinction rating as recognition

for excellence in management of ESG SO Ensuring diversity SO Reducing our CO2 emissions
aspects among over 200 companies Nurture diversity and inclusion based Support the transition to a low-carbon world
in the same sector on merit by ensuring equal opportunity by meeting our science-based target.
to all employees and evolving our gender
diversity to 30% women in leadership
at CEO-3 positions and above.
Proportion of revenues generated
Low risk rating driven by our strong by sustainability solutions
management of material ESG issues SO World Class Services (WCS)
Promote a culture of operational safety,
efficiency and excellence through our
WCS program: 20% of our WCS labs
(2020 perimeter) reaching WCS Bronze
47.3%
+1.2%
award level.
AAA rating, the highest ESG 2022 47.3
rating awarded by MSCI, for
Lost Time Incident frequency Rate (LTIR)
the third consecutive year Number of lost time incidents per 2021 46.7
200 000 hours worked.
0.19 Sustainability solutions

SO
2022
Support our customers on their journey

to sustainability by increasing the proportion
Platinum medal, the highest -25% against 2018 of revenue generated by our sustainability
recognition awarded by EcoVadis, solutions to above 50%.
for the third consecutive year 2022 0.19
2021 0.22 SO Integrity principles

Reduce the impact that our supply chain
SO Guaranteeing a safe workplace has on society by committing our strategic
suppliers to support our integrity principles.
Inclusion in the FTSE4Good index for Reduce our Total Recordable Incident
the fifth consecutive year for our strong Rate (TRIR) by 20% and LTIR by 10%
commitment to sustainable practices against a 2018 baseline. SO Energy efficiency
Increase annually the number of energy
SO Positive impact on communities efficiency measures in our 100 most
energy intensive owned buildings.
Increase by 10% our positive impact
on our communities through employee
Leadership position achieved through volunteering, focusing on vulnerable
score of A- in CDP’s highly technical groups including those affected by
climate change management assessment pandemics against a 2019 baseline.
1. Constant currency (CCY)*.

Performance
Revenue Adjusted operating income* Adjusted operating income margin*
CHF 6.6 BN
+6.8%1 +5.8% organic*
1 023 MIO
+0.1%1
15.4%
(1.0)pp1,2
2022 6.6 2022 1 023 2022 15.4
20211 6.2 20211 1 022 20211 16.4
Profit for the period Basic earnings per share Proposed dividend
CHF
(3.8)%
630 MIO CHF
(3.7)%
78.86 CHF 80
2022 630 2022 78.86 2022 80
2021 655 2021 81.91 2021 80
Free cash flow* Return on invested capital* Acquisitions completed in 2022
CHF
(20.2)%
507 MIO 18.6%
(1.0)pp2
7
2022 507 2022 18.6 2022 7
2021 635 2021 19.6 2021 9
1. Constant currency (CCY)*.

2. Percentage points.
* Alternative Performance Measures (APM) – refer to the ‘2022 Full Year APM’ document.

16 Management
report
Our TIC megatrends The five interconnected megatrends are driving

regulation and outsourcing. We have positioned
SGS to meet these primary drivers of demand.
By addressing some of the planet and society’s
largest challenges, we are generating value from
structurally growing markets.
The five megatrends impacting society
Connectivity Nutrition, Health Sustainability & Climate

& Wellness
With access to the internet rising The nutrition, health and wellness Today, many are vulnerable to climate
rapidly and technologies such as 5G, industries are converging, responding change impacts such as droughts,
the IoT and AI, we are entering a new to consumer demands for healthier floods, heat waves, extreme weather
era where networks of machines lifestyles and well-being. A rise in both events and a rise in sea levels.
are digitally connected often without consumer interest and purchasing The earth’s finite natural resources
human involvement. A more connected power presents tremendous are disappearing fast, and of all the
world brings both opportunities and opportunities for companies, but minerals, fossil fuels, metals and
challenges for brands, manufacturers, consumers need to know that the biomass used each year, just 8.6%3 are
retailers and governments. We can food they eat and the products they cycled back into the circular economy.
help them to deliver safe, accessible, use are safe. We can help companies Organizations face growing scrutiny
high-quality products and services demonstrate the safety, security, in this area, but we can help them put
in stores and online, ensure secure quality, sustainability, authenticity sustainability at the center of their value
connectivity and reduce risks. and efficacy of food, healthcare proposition and business models.
and wellness products.
USD 6 tn
is the estimated global annual
USD 1.5 tn
is the estimated value of the global
3.3 bn
people’s daily lives are ‘highly vulnerable’
cost of cybercrime in 20211 wellness market, with annual growth to impacts of climate change4
of 5-10%2
Our industries
Our services cover 11 major
industries. We develop and
maintain world-class expertise Life Agriculture Mining Oil Energy Chemical
to support the evolving needs sciences and food and gas
of our customers. Thanks to our
capabilities we are able to provide We safeguard We develop Our expert Our innovative, We power We drive
solutions to the challenges the quality innovative safety, services improve sustainable processes in innovation,
they face across the globe. Our and efficacy quality and speed to market, solutions add renewables and optimization,
chosen markets are and will be of medicines. sustainability manage risks and up along the conventional efficiency and
determined by our ability to be solutions for maximize returns. value chain. energy. safety, from
the most competitive and to supply chains. feedstocks to
consistently deliver unequalled finished products.
service to our customers.

1. www.techxplore.com/news/2022- 4. www.ipcc.ch/report/ar6/wg2/about/
05-global-cybercrime-topped-trillion- factsheets/
defence.html 5. www.worldbank.org/en/topic/
2. www.mckinsey.com/industries/ urbandevelopment/overview
consumer-packaged-goods/our-insights/ 6. www.ey.com/en_qa/consumer-
feeling-good-the-future-of-the-1-5- products-retail/redesign-consumer-
trillion-wellness-market ecosystems-to-scale-sustainability
3. www.circularity-gap.world/2022
Divisional addressable
market
(CHF BN)
Connectivity
& Products
CHF 40 BN
Infrastructure Consumer
Empowerment
Health
& Nutrition
While the growing trend towards More and more, consumers are CHF 65 BN
urbanization enables increased flexing their purchasing power to
productivity, the additional need for encourage companies to take a
resources and space affects the stand on issues like sustainability,
economy, environment and quality transparency and fair employment
of life. Innovations in areas such practices. This has increased
as smart cities and smart mobility the demand for traceability and
contribute to economic growth, transparency across the supply chain,
but we can also help organizations as people are looking to eat less
adopt more sustainable approaches meat, source more organic food, fly
to infrastructure, transportation less and buy electric cars. We can Industries
and community services, while help organizations keep up to date & Environment
protecting workers, reducing with complex regulatory obligations
environmental footprints, managing to reduce their legal, financial and CHF 70 BN
risk, and enhancing efficiency reputational risks.
and brand reputation.
>80%
of global GDP is generated in cities5
72%
of consumers say companies should be
driving positive sustainability outcomes6
Natural
Resources
CHF 60 BN
Construction Industrial Transportation Public sector Consumer

manufacturing and retail
We ensure We make We drive a safer, We facilitate trade We enable
safety and manufacturing cleaner and more and sustainable manufacturers,
performance more productive efficient industry. development, exporters,
during the and profitable. while protecting importers and
construction society against retailers to
of buildings or fraud and generate trust Knowledge
infrastructure. economic crime. throughout the
supply chain. CHF 20 BN

18 Management
report
Our business model We are the leader in the TIC industry and
create value by enabling a better, safer and
more interconnected world. We measure
total value creation using the six capitals.
Our inputs Our business model
Total equity Profit (prior year) Our purpose
CHF 763 MIO CHF 655 MIO We are enabling

a better, safer and
Financial
capital Total assets
The funds
available to us
CHF 7 122 MIO more interconnected
Capital expenditure
world
CHF 329 MIO
Manufactured
capital
Infrastructure,
equipment
and tools
About our business model

Goodwill and other R&D
intangible assets expenditure Our businesses all operate under our globally
recognized name. We have a vast number of
Intellectual
CHF 2 105 MIO CHF 83 MIO operating licenses, accreditations and government
authorizations – a compelling offer which is difficult
capital to replicate. Our global footprint comprises
Organizational, 2 650 laboratories and offices and 97 000 experts.
knowledge-based
intangibles We leverage these capabilities and our expertise to
bid for large multiyear contracts and, as our network
expands, our customer offer also increases, creating
Employees a virtuous circle.
97 000 We have a broad range of customers, and a strong

record in retaining them. In certification areas, such
Human as health and safety and supply-chain management,
capital SGS Rules for Life changing providers may involve retiring an existing
The skills and
system and incurring significant costs, so we aim to
know-how of our
employees 15 build longer-term relationships. In other areas, such as
consumer product testing, the average contract length
is short, typically a year. However, switching carries a
Suppliers
1 voice risk of reputational damage and the financial benefits
+50 000 of the customer program

can be small, as manufacturers typically spend less
than 1% of the value of goods in control and testing.
Social and
relationship
capital SGS community program
Our relationships
with our
stakeholders
Electricity consumed Water consumed

What we do
487 GWh 2 MIO m 3
Natural
capital Fuel consumed
The natural
460 GWh
resources we
Testing Inspection Certification
need to operate
Our global drivers

Our outputs Our value

CHF 3 331 million paid in wages
Revenue Free cash flow* to our employees
CHF 6.6 BN CHF 507 MIO CHF 219 million taxes paid to governments
Financial CHF 590 million in dividends proposed

capital Adjusted operating income margin* to our shareholders
Long-term shareholder
value creation
15.4%
Offices Delivering safe medicine to patients
and labs Ensuring a safe, quality and sustainable
2 650
food supply chain
Manufactured Quickly adapting to regulatory changes

capital to provide efficient and safe products
Efficient and sustainable to consumers
services
Training Number of labs using Enhancing career opportunities

ratio1 World Class Services through training
3% 26
Improving knowledge through innovation
Intellectual Simplifying the customer journey

capital through innovation
Expertise and
innovative solutions
Women in leadership positions Lost time incident rate Protecting the health of employees
through operational integrity excellence
31.1% 0.19 and well-being programs

Reducing social risks by reinforcing
Human (occurrences per 200 000) human rights compliance
capital Employees trained
Diverse leaders in a safe to Code of Integrity Providing flexible working conditions
to our employees
99.9%
working environment
Community Satisfaction score in our Voice Supporting the communities in which

investment of the Customer surveys we operate
2 MIO 84.5%
Improving how we work with
Social and relationship

CHF our customers and suppliers
capital
Meaningful stakeholder Percentage of suppliers locally sourced
98%
engagement and strong
brand and reputation
Metric tons EEB program: number of Committed to net-zero by 2050

of CO2e2 buildings under the program Helping mitigate climate change
116 505 701

by reducing air pollution
Natural capital Minimizing resource depletion

Net-zero pathway, limited and protecting the environment
waste and wastewater
1. % of total employment cost spent on training.

2. Scope 1 and 2 market-based. * Alternative Performance Measures (APM) – refer to the ‘2022 Full Year APM’ document.
Our value to society

20 Management
report
Our business model The activities that underpin our world, ever more sophisticated products
need a high degree of testing expertise.
business model also underpin
continued the global economy.
ICT devices and systems need to be
certified against international security
For example, consumers can be confident standards to provide the highest levels
the products they buy have been tested of assurance and confidence.
and meet the required quality and safety
Testing reduces risks, shortens time to
standards and regulations. A proliferation
market and tests the quality, safety and
of global brands has increased the need
performance of products against relevant
for brand protection, leading to greater
health, safety and regulatory standards.
scrutiny of supply chains and quality, health
Inspection controls quantity and quality,
and safety and environmental systems.
and helps customers meet all relevant
Importers know the content of their
regulatory requirements across different
cargo has been inspected and meets
regions and markets. Certification ensures
quality control standards. The content
products, processes, systems or services
has been monitored across supply
meet national and international standards
chains and is the same as specified in
and regulations.
their contract. In an increasingly digital
Our process: Testing
1 Customer need 2 Process planning 3 Sampling

Job scope agreed with Define the correct Collected by SGS (including
customer encompassing methodology including safety digitally) or submitted
compliance or meeting a and ESG considerations by customers
quality specification and, in
some cases, establishing value
6 Analysis 5 Sample preparation 4 Sample registration

Digital registration of samples
in Laboratory Information
Management Systems
(LIMS) – this step can be
combined with sampling
7 Data generation 8 Customer outcome

approval and Assessment of sample is
reporting compliant/meets customer
requirements. Post-analysis
review with customer and
satisfaction assessment

Our process: Inspection
Customer
2 Process planning
1 Customer need Define the correct methodology
including safety and ESG
Job scope agreed with customer. considerations
Inspection of quantity, or
compliance to measurement,
or a build specification
3 Physical or remote inspection

Field measurements, visual inspection,
4 Customer outcome
timelines (taking into account the
Assessment of inspection findings allocation of logistical charges), incident
is compliant/meets customer reporting and sampling and associated
requirements. Post-analysis services if required
review with customer and
satisfaction assessment
Our process: Certification
1 Customer need 2 Process planning 3 Stage 1:

Agree with customer on Audit/assessment dates, preparedness review
the standard to be applied sites and processes to be Evaluation of client’s
sampled and agreed with preparedness for a
the customer stage 2 audit
4 Stage 2: audit
Evaluation of compliance
with certification
7 Maintaining 6 Customer standard requirements
certification Certification documents
Ongoing surveillance provided to the customer
and cyclical 5 Technical review &
recertification certificate decision
audit program
Independent evaluation of the
efficacy of the audit process to
determine if certification shall
be granted

22 Management
report
Our leadership Headed by our CEO, the Operations Council

team governs SGS’s future and comprises a total
of 17 members across five key business
areas, seven regions and four functions.
Regions Functions
Frankie Ng Fabrice Egloff Wim Van Loon Dominik de Daniel

CEO Africa & Western Europe North & Central Europe Finance, M&A, IT & Procurement
Teymur Abasov Steven Du Jessica Sun

Eastern Europe & Middle East North East Asia Human Resources
Luis Felipe Elias Malcolm Reid Toby Reeks

Latin America South East Asia & Pacific Investor Relations,
Corporate Communications
and Sustainability
Stephen Nolan Olivier Merkt

North America Legal, Compliance
& Corporate Security

Our Operations Council

Our Operations Council is made up of five executive We follow six key
vice presidents, seven Chief Operating Officers and
two functional Senior Vice Presidents, as well as
business principles:
our CEO, Chief Financial Officer and General Counsel.
The council meets regularly to decide on strategies Integrity
Integrity is at the heart of SGS. The trust that we
and priorities, and to review the Group’s performance. inspire in our customers and stakeholders is the key
to our success. As leaders in our industry we hold
ourselves to the highest standards of professional
behavior as embedded in our Code of Integrity.
Health, Safety & Environment

Divisions Our long-term success and sustainable business
depend on our ability to remain a recognized
leader and a reference for all Health, Safety
and Environmental (HSE) matters.
Quality & Professionalism

Making sure we act and communicate responsibly.
We embody the SGS brand and its independence
in our everyday behavior and attitude. We are customer-
centric and committed to excellence. We are always
Charles Ly Wa Hoi Olivier Coppey clear, concise and accurate. We strive to continually
Connectivity & Products Health & Nutrition improve quality and promote transparency. We respect
client confidentiality and individual privacy.
Respect
Making sure we treat all people fairly. We respect
human rights. We all take responsibility for creating
a working environment that is grounded in dignity,
equal opportunities and mutual respect. We promote
diversity in our workforce and do not tolerate
discrimination of any kind.
Sustainability
Alim Saidov Derick Govender Making sure we add long-term value to society.
Industries & Environment Natural Resources We use the scale and expertise of SGS to enable
a more sustainable future. We ensure our impact
on the environment is minimized throughout
the value chain. We are good corporate citizens,
investing in our communities and enabling a
better, safer and more interconnected world.
Leadership
Making sure we work together and think ahead.
We are passionate and innovative people with
a relentless desire for improvement. We work in
an open culture, where smart work is recognized and
Jeffrey McDonald
rewarded. We foster teamwork and commitment.
Knowledge
SGS business principles are the cornerstone on which

all of our activity rests. They are held to be fundamental,
overarching beliefs and behaviors that guide our decisions
and allow us to embody the SGS brand in everything we do.
www.sgs.com/en/our-company/about-sgs/
business-principles

24 Management
report
Our corporate We are driving our business forward with

strategy clear objectives for market leadership, digital
innovation and sustainability solutions.
Our strategy
1 2 3
Invest to consolidate Become the most Increase proportion
leadership position digital company of revenue from
in the TIC industry sustainability solutions
Our objectives by division

Invest to consolidate leadership position
Higher 21% 2% 2%
Connectivity
& Products
Goal: market leader
Status: achieved
Mid- 25% 7% 13%

single digit
Health
& Nutrition
Goal: CHF 1bn
Status: target 2023
Lower 8% 4% 18%
Growth
Industries <0.9 Challenger 0.9-1.1 Equal 1.1+ Leader

& Environment
Goal: market leader Relative market share
in Environment
Status: target 2025 Return profile
– Value destroying = Earning more + Earning more ++ Earning more +++ Earning more
than 1x Cost than 2x Cost than 3x Cost than 5x Cost
of Capital of Capital of Capital of Capital
Our divisions are closely aligned to the key TIC We are optimizing our field and lab resources
Natural Resources
Goal: market leader
megatrends and customer demand. The combined to generate network synergies, building on our
Status: achieved size of the TIC market is estimated to be worth cybersecurity expertise, and addressing the key
around CHF 255 billion on a global basis, though opportunities in the environmental, connectivity,
only 45% may be accessible, i.e. outsourced to mobility and natural resources industries.
a third-party business like SGS. We are also accelerating investment in biopharma
We are the global leader in three of our divisions: and analytical services to grow our Health &
Knowledge Knowledge, Natural Resources, and Connectivity Nutrition division.
Goal: market leader & Products. We aim to build on these leadership Our Environment, Health & Safety services will
Status: achieved positions through expanding our technical consulting become an important building block in our Industries
network, particularly in Europe and Asia, developing & Environment division through the integration of
new digital solutions. SGS Analytics.

Digitalizing
operations
>50%
applicable
>50%
FAIR* data-
A data-
ongoing inspections & leveraging driven
audits remote structured data
Our goals
company
Become the most digital
company in the TIC industry
Digitalizing
operations
Ongoing
2022 2023 2025

>20% revenue
delivered by
digital services Our vision is to become the most digital company that aims to design and develop technology-based
Target 2023
in the TIC industry through a customer-centric products to support our services with a short time to
approach. We have made further progress towards market and a real impact on business operations. We
>50% of SGS data our aim of linking at least 20% of our revenues already have three products in testing phases with
is FAIR by 2023 to digital services by 2023, with more than more coming in 2023. We are digitally transforming
Target 2023 50% of applicable inspections and audits our labs to simplify the way we work and the service
being done remotely. that we provide. As of 2022, 13% of our labs have
We are enhancing existing services to deliver them been transformed to labs of the future, delivering
A data-driven faster and better. Technologies, such as AI, are efficiencies and a better customer experience.
company helping us create new services and we continually Beyond 2025, we will become a fully data driven
Target 2025
assess emerging technology trends to explore company, connecting real-time data with people
the potential for entirely new markets. In 2022, and processes to build digital services that improve
we implemented a Digital Builders Organization the employee and customer journey.
* Fair, accessible, inoperable, reusable.
Digital lab targets Digital lab

30% sales by end of 2023
70% sales by end of 2025
Progress key 80% process standard
labs transformation % (2022)
CORE code vs 20%
0% local customizations
1-24%
25-49%
Digital lab 3
50-74 No barriers,
AI enabled
75-100%
Digital lab 2
Modelling, lab
replication,
analytics
Digital lab 1
Smart instruments
Integrated lab mobility enabled
Instruments to
Data-driven insights. full
automation
Paperless lab Aggregated data,
Connected lab Faster science
analytics
Instruments & fewer errors
data capture
1. Lay the foundation 2. Lab transformation 3. Lab automation

– today – 2023/24 – 2024 >
Simplify, comply & secure. Optimize, harmonize processes Automate & use AI to
capture & automate end-to-end. leverage analytics continue transformation

26 Management
report
Our corporate strategy

– a sustainability
solutions framework
Our target: reaching 50% of sustainable revenue by 2023

60%
Our goals 50%

Increase proportion of revenue from sustainability solutions
Launch
Sustainability 40%
Solutions
Framework
Achieved
30%
New sustainability
solutions in all 20%
divisions
Achieved
10%
>50% revenue under
our Sustainability
0%
Solutions
Framework 2020 2021 2022 2023
Target 2023
Connectivity & Products Industry & Environment Knowledge
Health & Nutrition Natural Resources
On our previous annual report, we set out an We are helping companies to implement
innovation curve showing that a large majority better and more efficient processes, address
of companies were followers with a less stakeholder concerns and reduce risks.
mature approach to sustainability. They take a The table on page 27 shows the revenue
compliance and risk approach to address regulatory breakdown by division and confirms that we
environmental, social and governance risks through now offer sustainability solutions across all
ISO and standards. We expect these companies to our divisions. In 2022, Health and Nutrition
move towards a holistic approach to sustainability accounted for the largest proportion, driven
that encompasses their entire supply chain. by our sustainable living pillar. We are on
Our Sustainability Solutions Framework supports track to achieve our 2023 target of generating
our customers as they move along this curve. than 50% of revenue from our Sustainability
No matter what their level of maturity is, we Solutions Framework.
can offer multiple integrated options to improve
environmental, social and governance performance
and reduce risk at every point of the supply
chain, from sourcing raw materials to using
the final product.
Our six sustainability solutions pillars
Sustainable Sustainable Sustainable Sustainable Sustainable Sustainable

use of natural energy production infrastructures living business
resources practices

Overall framework for our value to society
Sustainable Sustainable Sustainable Sustainable Sustainable

use of natural energy production infrastructures living
resources
• Agriculture & Fishing • Energy Efficiency • Circular Economy • Buildings • Health & Wellbeing
• Forestry • Renewable Energy • Responsible Supply • Transportation • Food & Nutrition
• Mining • Climate Chain & Traceability • Product Safety
• Fossil Fuels Change Mitigation • Environment,
• Water and Health & Safety
Soil Preservation • Quality Management
Sustainable
business practices
• Sustainable Finance • Ethics & Social
• ESG Data advisory & Practices
Assurance Services • Education
• Digital Services • Productivity
• Risk Management
Progress in 2022
In 2022 we achieved our goal of launching – Connectivity & Products: chemical – Industries & Environment: climate
new sustainability solutions in all divisions. risks and circular economy change and greenhouse gases
Having analyzed the market trends and – Health & Nutrition: responsible emissions; waste management
customer demands, we identified several sourcing and traceability; soil fertility – Natural Resources: energy and
focus areas: and water management water optimization
– Knowledge: reporting, assurance,
and impact valuation
Revenues by pillar and division C&P H&N I&E NR Kn
Sustainable living 9.5% 12.7% 2.8% 3.5% 28.5%
Sustainable use of natural resources 0.3% 2.6% 0.8% 0.5% 4.2%
Sustainable energy 1.2% 0.1% 0.1% 1.4%
Sustainable infrastructures 0.2% 0.1% 0.2% 0.5%
Sustainable production 0.2% 4.9% 1.8% 3.2% 10.1%
Sustainable business practices 2.6% 2.6%
9.9% 13.0% 11.6% 2.7% 10.1% 47.3%

28 Management
report
Our divisional Our five divisions are closely aligned to the key
strategy – aligned TIC megatrends, to better service our customers
to megatrends and to anticipate future demand.
Connectivity Health Industries Natural Knowledge

& Products & Nutrition & Environment Resources
Connectivity
& Products
We are focusing investment in Connectivity to increase our
competitive advantage.
1
Strategic objectives 2023 and beyond Progress during the year
• Consolidate our leading market position • Consolidated our leading market position in Softlines and
• Leverage market growth supported by the progressing ahead of target for Top 3 in Connectivity
proliferation of 5G technology and loT devices • Significant capex has been approved for East Asia
• Continue to build cybersecurity expertise and the USA
as an integral part of our ‘total solution’ • New cybersecurity laboratories have been opened
• Focus on automotive and semiconductor in East Asia
industries as key opportunities • Supply chain challenges temporarily slowed progress
• Continue to lead the expansion of the but expect the eMobility development and semiconductor
domestic Chinese market global demand to boost this end of the year
• New data services to generate first • Invested in a program called ‘China Import’ providing
Our growing portfolio of sustainability solutions
revenue by 2023 support to exporters from North America and
During 2022, we launched various SGS Western Europe who want to sell goods on China’s
product marks (sustainability, certification and
domestic markets
performance) addressing customer demand
• First European retailers have committed to use our
across all product categories.
new digital solution Truum™
Capex intensity Higher Net working capital intensity Lower Last 12 months return profile +++ M&A appetite High in Connectivity
Health
& Nutrition
We are expanding our global footprint through the organic development
of our network and acquisitions.
2
• Achieve CHF 1 billion of divisional revenue • H&N delivered solid organic growth of 4.1% in 2022,
by 2023 and, complemented by the acquisition of proderm,
• Health Science to become the largest business total growth of 7.6%
unit of Health & Nutrition, with investment • Continued investments in Biopharma including lab
focusing on biopharma and health services expansions in Belgium and Switzerland have Health
• Consolidate our leadership position in cosmetics Science well on track to become the largest H&N
supported by increasing regulatory requirements division in 2023
• Consolidate our market leadership position in • Acquisition of proderm cements our leadership position
food in Asia and expand our global network • On track with geographical and portfolio
and portfolio in the Americas and Europe expansions including:
• Enhance AI-enabled regulatory and compliance – Capacity and scope expansions in Thailand,
Services in our portfolio help to address our pillars solutions in key Health & Nutrition sectors Vietnam and China
of Sustainable Living as well as Sustainable Use – New lab capacity in Latin America, particularly Brazil,
of Resources. New initiatives are underway to
Mexico, Peru and a new laboratory in Puntas Arenas,
broaden our offerings around verification of product
Chile, supporting the local seafood market
and supply chain sustainability including product
marks and automated emerging risks monitoring – Acquisition of Industry Lab in Romania expanding
on our AI-assisted platform. our footprint in Eastern Europe
– Ramp up of our laboratory hub and spoke
model in Europe to gain economies of scale
and improve efficiency
• Launch of SGS Digicomply Nutriwise, an AI-powered
solution to perform composition assessment of food
supplements and guide companies on compliance
questions when entering new markets
• Expansion of SGS Digicomply Regulatory Watch
to the cosmetics business segment
Capex intensity Higher Net working capital intensity Average Last 12 months return profile = M&A appetite High

Industries
& Environment
Using our expertise to provide integrated solutions, while accelerating our transition
to a high-volume hub and spoke testing model in our Environmental testing business.
3
• Reach a market leadership position in • I&E Health and Safety strengthened its footprint providing
Environment Health & Safety in 2025 H&S Management Services in customer data centers with
• Reassess portfolio focusing on TIC megatrends several bluechip customers (Amazon, Microsoft etc.)
and complement our expertise related to • We continued to work with customers and build expertise
energy transition through M&A in renewables in the development of energy transition markets despite
and specialty fields delays due to geopolitical factors
• Increase footprint and competences in • I&E Auditing and Compliance has achieved double-digit
sustainability services through organic organic growth in 2022 focused on mandatory and
growth and acquisitions voluntary carbon verifications and other industry specific
• Leverage the acquisition of SGS Analytics to schemes, and waste management related products
transition to a hub and spoke laboratory model • Development of a common Target Operation Model
SGS is expanding its capacity globally in response • Leverage digital and data to enhance our (TOM) for environmental lab activities
to increased demand for emissions verification
existing and create new ones • New I&E Zengine product has been piloted in the USA
and accounting under multiple schemes.
for B2C and B2B markets and we continue to work
on improvements
Capex intensity Average Net working capital intensity Average Last 12 months return profile = M&A appetite Selective
Natural
Resources
We are building on our wide-ranging expertise across the mining industry and optimizing
our processes to help customers use fewer resources.
4
• Consolidate our leading market position • Further enhanced our biofuels testing capability.
• Trade activities to remain core, with a This includes providing services to the agri market
supportive outlook for mining and agriculture, as well for used cooking oil analyses
and oil and gas currently under pressure • Smart warehouse scaling underway: 18 warehouses
• Develop new sustainability services for in four countries
mid-term transformation of portfolio • Identified ESG diagnostic solution to scale across all NR
• Optimize field and lab resources to generate customers in collaboration with the Kn and I&E divisions
network synergies who will execute these services for our customers
• More than 50% of trade back-office activities • Economic and production-related sustainability services
to operate on digital platforms (i.e. blockchain) to the mining industry have been developed within the
by 2023 to enhance security and efficiency metallurgical consulting group and focusing on three
Our acquisition of Sulphur Experts in late 2021 has key areas: increased optimization in operating plants,
expanded our sustainability services in supporting
improved energy and water utilization and waste reduction
refineries and gas plants with reduced air pollution.
• SGS and VAKT (blockchain developer) have launched a
digital products database for the oil, gas and chemicals
market. This will allow all users of the VAKT block chain
platform to have a single database to conduct transactions
Capex intensity Lower Net working capital intensity Average Last 12 months return profile +++ M&A appetite Low
Knowledge We provide business assurance and operational efficiency solutions across supply chains that
deliver sustainable value for the organization, the environment, society and shareholders.
5
• Consolidate our leading market position • With organic growth at 8.7%, we are exceeding industry
• Certification remains core with new schemes performance across all business segments highlighted
driving demand by Certification, Responsible Business Services from
• Business enhancement to represent >50% social and environmental audits, and our consulting
of divisional revenue by 2023, including business, Maine Pointe in the USA
expanding our technical consulting network • Despite a challenging environment from a post transition
in Europe and Asia year, investment in the information security segment and
• ESG and sustainability services to increasingly medical device industry has allowed us to deliver above
become a material part of the portfolio industry organic growth in Certification
• Focus on digital solutions in supplier risk • Replication of consulting activities in Europe and in Asia,
management, with 20% revenue delivered combined with a very strong performance of Maine
Our new ESG and Sustainability Assurance by digital services and remote by 2023 Pointe, has further increased the proportion of revenue
solutions have enabled us to enter new markets,
generated outside our traditional certification activity
including the financial sector where we have seen
• The addition of new ESG and sustainability solutions
significant growth, particularly in Sustainability
Report Assurance. has enabled us to enter new markets, including the
financial services sector. We have also seen significant
growth in existing solutions, particularly Sustainability
Report Assurance
Capex intensity Lower Net working capital intensity Lower Last 12 months return profile +++ M&A appetite Selective

30 Management
report
Our investment We have accelerated the investment in our

strategy – our platform to improve and harmonize our processes
platform for growth and accelerate our digital transformation.
Initiatives Financial Shared Service Billing Customer Relationship

Centers (FSSCs) centralization Management (CRM)
Objective Centralization, harmonization and Centralized billing via standardized/ Deployment of Salesforce
standardization of key financial harmonized processes and as the global CRM solution
processes (B2C, P2P, R2R) in systems by country to drive
regional FSSCs to drive productivity productivity increase
and lower service cost
+5%
Benefits • Increase productivity by 20% Increased customer intimacy
for processes in scope and stronger sales focus
Productivity increase of 5% • Reduce days sales outstanding

per annum for the scope (DSO)
under consideration
75% 33%
Target 2023 Add remaining countries and
remaining businesses to the
CRM platform
Operate five regional FSSCs Accelerated rollout of centralized
covering 75% of revenues billing covering 33% of
via fully standardized/ group revenue
harmonized processes
80%
Target 2025 Full global coverage n/a
Centralized billing to cover 80%

of group revenues
60% 13%
Achievements Deployment of Salesforce as the
2022 global CRM solution in 70 countries
during 2022
of group revenues are covered of group revenues are covered
by FSSCs via fully standardized/ by billing centralization
harmonized processes

IT transformation Digital Labs Concept (DLC)/ World Class Services (WCS)

global platforms
IT modernization: adopting modern Evolution of current Laboratory Information Higher customer satisfaction/safer place
technologies and processes, improving Management Systems (LIMS) to create to work with enhanced productivity
time to market and quality as well as digital labs, with AI, machine learning and
efficiency in the delivery and operations full predictive analysis based in consolidated
data with fully standardized and harmonized
LIMS processes
Standardized target operation model/access Productivity increase of 10%+ per lab Increased customer satisfaction
to new technologies Better quality, cost optimization, innovation Safer place to work with
of new services, enhancement of customer enhanced productivity
experience and launching new services
to generate streams of revenues based
on data
+15% 30% 20%

productivity besides initial step-up savings of lab revenues are executed via DLC WCS labs (2020 perimeter) to reach
WCM Bronze Award level, expansion
to at least 10 new sites in WCS program
5% +70% 90%
incremental productivity increase of lab revenues are executed via DLC of current WCS perimeter to achieve WCM
awarded levels (bronze and above), reach at
least first WCM Gold awarded site by end
of 2030
Complete outsourcing of application

management, application development
and infrastructure to a third party
Nearly 20% 65%
New target operating model for Global of lab revenues are executed via DLC + of WCS labs (2020 perimeter) have
IT systems established full migration of the certification business been audited with best score of 42
to the global CertIQ platform

32 Management
report
Our investment
strategy in action
We are
Our digital labs
transformation program, transforming
launched in 2022, will
see us move to fully
digital laboratories with
our laboratories
new generation LIMS
by the end of 2025,
supporting our drive
for a digital future.
for more sustainable
practices across
the business.

We have
started our journey Our digital transformation
We provide our services to customers from
towards maximizing more than 1 000 laboratories across the
world. It’s a geographically spread network
automation in our that presents us with several operational
challenges. We recognized that without
laboratories. a standardized Laboratory Information
Management System (LIMS), we lacked
a uniform way of managing the workflows,
administration, finances and operations
at our laboratories. This made it harder
for us to leverage the complex data we
hold, and affected our ability to scale up
new technologies, boost productivity and
improve efficiency.
Aligning, optimizing and digitizing our
laboratory processes through our new digital
labs transformation program is enabling us
to increase efficiency, improve quality and
standardize our test methods. In turn, this
will allow us to introduce new data analytics
solutions, move towards integrated digital
laboratories with smart instrumentation,
mobility and analytics, then deliver secure,
supported and cost-effective LIMS
solutions (G6, STARLIMS and LabVantage)
and automated labs with AI-enabled insights
and modelling, and excellent scalability.
We will
meet customers’ Stronger governance
and greater visibility
expectations by The implementation of new generation
LIMS solutions within our digital labs
using advanced program is already delivering outstanding
benefits, offering best in the market lab
technology. specific capabilities, including customizable
reporting. Smooth integration with other
systems across our network means we
can provide direct operational support to
our laboratories, reducing the need for
manual tasks, and minimizing human error.
The new LIMS solutions also provide
stronger governance and greater visibility,
“STARLIMS is one of our making it possible to standardize naming
new generation LIMS. conventions, parameters and method
It has a flexible Application references for key international customers’
Programming Interface reporting, BI tools and data extractions.
(API), which makes it easy We have set clear objectives for our digital
to integrate with other lab transformation: 30% of total group
laboratories sales will be generated by
systems, ours or our
digital laboratories with new generation
customers’, accelerates the LIMS by the end of 2023, rising to more than
job registration process, 70% by the end of 2025. We will meet our
and means it can generate customers’ expectations by using technology
complex reports quickly that provides advanced reports, client and
regulatory specification management, a
and conveniently.”
customer portal, and enhanced due diligence
Adams Yu solutions. The transformation will also help
CN CCL Deputy Director and Owner our IT organization by reducing the risk of
of CN CCL STARLIMS Project system obsolescence.

34 Management
report
Our investment Acquisitions and partnerships help us grow

strategy – geographically, fill service gaps or expand our
acquisitions and skill set and technological capacities. In 2022,
partnerships we announced or completed seven acquisitions
and purchased the remaining 49% stake of
SGS Digicomply.
Gas Analysis Services (GAS) Ecotecnos
GAS provides gas instrumentation Ecotecnos serves multiple sectors in Chile,

measurement & calibration, on-site including aquaculture, energy, mining and
testing, technical services, instrumentation petrochemical, helping to ensure that
solutions and industrial hygiene testing to a any impact these industries have on the
range of sectors including pharmaceuticals, aquatic or marine ecosystem complies with
semi-conductors, food and beverages. national laws. The acquisition strengthens
The acquisition enhances our competence our sea monitoring and oceanography
to further support our customers along services and enables us to support the
their supply chains. governance of marine ecosystems in
the region.
Location United Kingdom Location Chile

Division Industries Division Industries
& Environment & Environment
AIEX Advanced Metrology Solutions

(Acquisition of the remaining 32% minority stake)
AIEX provides mainly technical and welding AMS specializes in 3D metrology precision
inspection services to the nuclear and services and high precision measurements
marine industries in France. The acquisition in the aerospace industry.
adds complementary inspection capabilities
to our existing testing expertise, supporting
sustainable nuclear energy production
in the country and helping to reduce
dependence on fossil fuels.
Location France Location Spain

Division Industries Division Industries
& Environment & Environment
Acquisition timeline 2022
January February May July August November
Advanced Gas Analysis Ecotecnos Silver State Penumbra Industry Lab

Metrology Services Analytical Security, Inc.
Solutions AIEX Laboratories, Inc.
SGS Digicomply and Excelchem
Laboratories, Inc.
proderm GmbH

SGS Digicomply Silver State Analytical Laboratories, Inc.

(Acquisition of remaining stake) and Excelchem Laboratories, Inc.
SGS Digicomply was created and developed Sister companies Silver State Analytical
by our joint venture C-Labs, and offers Laboratories and Excelchem Laboratories
a fully automated intelligence-gathering are regionally recognized environmental
solution that scans regulatory, media, testing laboratories serving companies
trading and environment information in and government agencies across the
real-time to support our food and cosmetics western USA for their water and soil
industry customers. Following the needs. The acquisitions not only expand
acquisition of the remaining 49% stake from our capabilities in the region, but they
the other shareholders of C-Labs, we now also become an important part of our
own 100% of SGS Digicomply. Sustainability Solutions Framework.
Location Switzerland Location United States

Division Health Division Industries
& Nutrition & Environment
proderm GmbH Penumbra Security, Inc
Headquartered in Hamburg, proderm is Penumbra Security is a recognized leader

the leading provider of advanced clinical providing various types of information
testing solutions for cosmetics, personal security conformance testing to
care and medical products in Germany. government standards and regulatory
The acquisition supports the strategic compliance. The acquisition expands our
alignment of our global network to the cybersecurity capabilities and footprint into
key TIC megatrends, adding innovative the USA. It further aligns SGS with the
capabilities and strong scientific expertise TIC connectivity megatrend and supports
to further enhance our strong reputation. our purpose of enabling a better, safer and
more interconnected world.
Location Germany Location United States

Division Health Division Connectivity
& Nutrition & Products
Industry Lab Drilling business in USA (Disposal)
Industry Lab offers a comprehensive

range of microbiological analysis services,
from enumeration of indicator organisms
to detection of foodborne pathogens.
The acquisition is in line with our strategic
focus of expanding our food services and
laboratory network in Europe. It fills a gap
in our service portfolio and will allow us to
generate efficiencies and better serve our
clients in this market.
Location Romania Location United States

Division Health Division Industries
& Nutrition & Environment

36 Management
report
Our focus on Our Sustainability Ambitions 2030 cover our

sustainability whole value chain and set targets to 2023 and
2030. Each year, we track our progress against
our targets and define specific action plans
to meet our goals in the three pillars: better
governance, better society and better planet.
Strong sustainability governance Sustainability awareness and training • The challenge also included activities
From the Board of Directors to our affiliates, Every employee has the opportunity to to promote recognition. More than 30
a strong governance structure ensures contribute to the Sustainability Ambitions affiliates organized activities to choose
that sustainability remains at the heart 2030 (SA2030) no matter their position or their best employees and/or best teams
of our activities. Our senior management location. To make them an active part of our • We also organized fundraising and
is actively involved in overseeing the commitment, we have worked on several volunteering activities in more than 25
delivery which is developed by the initiatives in 2022: affiliates to support local communities
corporate sustainability team. • We have developed and launched a new • Our human rights policy was updated in
The Sustainability Committee assists the sustainability training that is mandatory for 2022 to better reflect our commitment and
Board in evaluating and approving the group all new employees. The course explains align with the best practices of the market
policies and strategies regarding the impact our sustainability commitment and strategy,
of the group’s activities on the environment and provides tips about how everyone Supporting the network
and society. Then the SGS Operations can contribute to the group’s SA2030 The importance of purpose and sustainability
Council takes the overall strategy forward, • The current energy crisis being a major in B2B environments is increasing. In particular,
approving and implementing more detailed concern for all of us, we have launched our customers are placing greater importance
programs, policies and targets for all our an energy savings campaign, to help our on the environmental, social and governance
operations across the group. employees save energy both at home practices of their suppliers and business
Our regions and affiliates are responsible and at work, teaching them responsible partners. Also, the demand for specific
for implementing various initiatives behaviors and minimizing our environmental sustainability-related information is increasing.
that support the group’s sustainability impact. We also share good practices To ensure we continue making sustainability
targets. We have appointed sustainability between affiliates, for example ways to an essential part of SGS’s value proposition,
ambassadors in most of our regions who improve energy efficiency and renewable we have provided training and materials to
are responsible for implementing the energy projects at different sites across our sales teams. This will help them better
programs in their affiliates, cascading our our network understand and convey our sustainability
corporate programs and guidelines down • For the third consecutive year we organized commitment to our customers.
to every single SGS site. the SGS People – 15 Day Challenge, In addition, we are encouraging closer
with more than 60 countries participating collaboration between the sustainability
in activities that reinforce our sense of professionals in our network to help us share
community. We organized other activities knowledge, good practices and success
for our colleagues’ families, including a stories, and ultimately to provide a better
drawing contest for children that attracted service to our customers.
almost 2 000 entries

2022 progress
On track
In progress
Focus for improvement
Better governance Enabling long-term value through secure, fair,

transparent and responsible business practices.
Excellence Integrity
2023 targets 2022 performance 2023 targets 2022 performance
Promote a culture of During the 2022 our labs reached important Ensure 100% of 99.9% employees trained on
efficiency and excellence milestones with 3 Labs already at their 4th employees are trained on our Integrity Principles
through our WCS program, WCS external audit (with the best score of our Integrity Principles on
with 20% of WCS labs 42 against the 50 required for the Bronze an annual basis
reaching WCM Bronze Award level)
Sustainable procurement and supply chain

Expand the program Four new sites adopted WCS in 2022
to at least 10 new WCS implementation has progressed 2023 targets 2022 performance
sites (considering according to each lab WCS routemap.
2020 perimeter) Actively promote SGS 55% of our goods and services
In total, we have expanded the program
sustainability principles spend was achieved in 2022
to six new sites
and values in our
supply chain:
• At least 50% of our
goods and services
Brand spend will be supplied
by suppliers who have
2023 targets 2022 performance signed our code of
conduct or commit to
Achieve a customer 84.5% of customer satisfaction score comparable standards
satisfaction score of 85% In 2022, we expanded the program to cover to SGSs’ within their
27 affiliates across six regions, representing own policy
a massive improvement in geographical
coverage compared to prior years • 100% of the selected SAQ updated and launched to a pilot
SGS strategic suppliers group of suppliers covering all global
will have completed strategic suppliers and local strategic
our sustainability suppliers on four pilot countries, achieving
self-assessment 65% completion rate. Planning to expand
Digitalization, information questionnaire (SAQ) scope and to work with a partner to
protection and privacy increase completion rate to 100%
2023 targets 2022 performance

• 75% of requests for We are currently improving our monitoring
Enhance the SGS Security governance maturity has been
proposals to be online system to ensure that this target is met
Information Governance improved by establishing the various
and include the relevant by 2023
Framework, data security committees (tactical and strategic)
SGS sustainability
privacy framework as well as satellite committees with DPO,
criteria, enabling
and standardized Architecture and Security and RISOs
comparison and
information security The security structure has been expanded selection of suppliers
management systems by creating LISOs for security management
in the countries • Actively contribute to Continued to source energy efficiency
the reduction of our technology to feed our Energy Efficiency
SGS CO2 footprint in Buildings program, as well as
Harmonize processes The process of “Third party security by sourcing energy renewables certificates
for third-party vendors/ assessments” (TPSA) has been formalized. efficient solutions Started supplier relationship management
processors for risk Projects and suppliers are subjected to a from our suppliers program with strategic suppliers,
evaluation purposes security assessment to ensure that their to develop initiatives to reduce our
processes and information security measures CO2 footprint
are adequate to minimize possible risks
The assessments are analyzed by the
security technical office as part of the • Leverage SGS buying The SAQ now includes questions
GRC tasks and validated by the RISO power to request related to CO2 that will serve as a basis
strategic suppliers for understanding better our scope 3
to report their own and defining reduction actions with
CO2 footprint and our suppliers
subsequently target
carbon reduction in
their own operations

38 Management
report
Our focus on 2022 progress

On track
sustainability In progress
continued Focus for improvement
Better society Empowering equality,

well-being and prosperity.
Diversity and equal opportunity Human rights

2023 targets 2022 performance 2023 targets 2022 performance
Achieve 30% women 31.1% women at CEO-3 level, Continue performing Annual risk assessment completed
in senior leadership a 7% increase compared to 2021 annual risk assessments for 2022
positions (3 levels on human right across the Due diligence program continued
below CEO) Group, keep developing to develop
our human rights due
diligence program to Human rights eLearning completed by
78% employees. Plans are in place to
Health and safety avoid violations across
account for employees that completed the
our operations and train
100% of our employees training off line (currently excluded) and to
on our human rights further increase the completion ratio
Reduce our Total LTIR of 0.19 and TRIR of 0.35, a -25% principles annually
Recordable Incident and -16% variation respectively compared
Rate (TRIR) by 20% to 2018
and Lost Time Incident Community investment
Rate (LTIR) by 10%1
HSE certify the 229 sites, covering approximately
main operational 33 000 employees, have now achieved Increase by 10% our CHF 2 million of community investment
sites (integrated certification in ISO 45001 (previously, positive impact on our and 18 691 hours of volunteering,
ISO 45001 and ISO OSHAS 18001) and ISO 14001 communities through representing a 54% and 9% variation
14001 certification) employee volunteering, compared to 2019
with special focus
on vulnerable groups
affected by pandemics2
Knowledge and engagement
Increase by 10% the 4.2 million hours of training and 43.3

completion rate of job- hours of training per FTE, representing
related training (except a 11.9 % and 3.1% variation compared
compliance training and to 2020
against a 2020 baseline
Improve year on 69/100 employee engagement score

year our employee (-1% variation compared to 2020)
engagement and 72/100 manager effectiveness
manager effectiveness (no variation compared to 2020)
scores
1. Except compliance-related training. 2. Against a 2019 baseline.

Better planet Supporting the transition to a low-carbon and climate resilient world
through responsible resource use and effective waste management.
Climate change mitigation

Meet our science-based 10.5% reduction since 2019 in scope

target by: 1 and 2 absolute GHG emissions
8.2% increase since 2019 in scope 3
absolute GHG emissions
• Increasing annually The coverage of our energy efficiency

the number of energy measures in these buildings has now
efficiency measures reached 77% of our consumption,
in our 100 most representing a 7% increase compared to
energy intensive 2021. The number of energy efficiency
owned buildings measures has increased by 12%
• Reducing total car 9% reduction in car fleet GHG emissions

fleet GHG average since 2019
emissions by 10% New vehicle emissions policy implemented
across the Group
• Ensuring 10% of 11% of cars have low-carbon technologies

our cars have low-
carbon technologies
All residual GHG Our residual GHG emissions have

emissions will been compensated
be compensated
Further adopt Task In 2021, we became official supporters

Force on Climate-related of the TCFD and our second TCFD Report
Financial Disclosures is available in the appendix of this report,
(TCFD) recommendations including our first impact quantification
for key selected risks and opportunities
In 2022 we became the first TIC company to receive Long-term targets:

Our updated science-based targets
approval for our 1.5ºC and net-zero targets from the • We commit to reduce absolute scope 1, 2 and 3
Science Based Targets initiative (SBTi). GHG emissions 90% by 2050 from a 2019 base year
Science-based targets provide a clearly defined pathway
for companies to reduce greenhouse gas (GHG) emissions, Our direct emissions reductions will be prioritized, and
helping prevent the worst impacts of climate change and all residual emissions will be neutralized in line with SBTi
future-proof business growth. criteria before reaching net-zero emissions by 2050.
Aligned with the 1.5ºC objective from the Paris Agreement, This means another great milestone for SGS and
we have committed to reach net-zero greenhouse gas further proof of our commitment to make a positive and
emissions across the value chain by 2050. To achieve this long-lasting impact in society, and limit global temperature
objective, we have approved near- and long-term science- rise to 1.5ºC. Our Sustainability Ambitions 2030 set the
based emissions reduction targets with the SBTi: roadmap to reducing our emissions, including initiatives
Near-term targets: such as the reduction of energy consumption in our top
energy intensive owned buildings, our vehicle policy and
• We commit to reduce absolute scope 1 and scope 2
the use of renewable energy, among others.
GHG emissions 46.2% by 2030 from a 2019 base year
• We also commit to reduce absolute scope 3 GHG

emissions 28% by 2030 from a 2019 base year

40 Management
report
Stakeholder Maintaining continuous dialog with our stakeholders

engagement is critical to our long-term success. These valuable
insights inform our materiality assessment and
enable us to align our sustainability initiatives to
stakeholder requirements and ensure we deliver
value to society.
Why we engage Key topics discussed

Our customers are at the heart of • Quality of services
everything we do. It is important for us • SGS employees’ attitude,
to understand whether we achieve our expertise and responsiveness
goals to make their businesses more • Quick turnaround times
efficient, profitable and sustainable. • Sustainability solutions
How we engage • Data privacy and protection
• One-to-one meetings • Cybersecurity
• SGS hosted conferences, seminars • Ethical behavior
and webinars
• Customer surveys, e.g.
Customers Voice of the Customer
• White papers
• Customer portal

Our services ensure that consumers trust • Ethical behavior
the products they buy. Understanding our • Adaptation and mitigation
end-consumers tells us if our services of climate change
support SGS’s reputation for delivering • Respecting human rights
confidence and assurance. and ethical labor practices
How we engage
• Certification and product labeling
• Direct marketing and communication
with certain B2C products
Consumers

Our people are essential to our business. • Career development plan
Discussing performance and providing • Diversity and inclusion
training and opportunities helps to keep • Well-being and work-life balance
our people motivated and engaged. • Respecting human rights and
How we engage ethical labor practices
• Our global employee engagement program • Health and safety of employees
• SGS intranet portal and internal and contractors
social network • Talent attraction and retention
• SGS Inside newsletter • Sustainability awareness, good
• Training programs, videos and practices in labs and offices
Employees eLearning modules • Recognition
• SHINE onboarding
• Line manager direct engagement


Engaging with our suppliers is key to • Human rights and ethics
ensure a smooth supply chain, boost • Cybersecurity and data privacy
innovation and strengthen sustainability • Innovation
in our business. • Carbon footprint
How we engage
• Supplier relationship
management (SRM)
• Supplier self-assessment questionnaire
(SAQ)
• Supplier code of conduct
Suppliers

Our communities and the planet both • Respecting human rights and
affect our business and could be affected ethical labor practices
by our operations. We evaluate whether • Adaptation and mitigation
our sustainability endeavors are recognized of climate change
as being among the very best – both • Local community investment support
regionally and in the TIC industry.
How we engage
• Multiple community investment
projects across the network – the
impact of which we measure through
our annual community survey
Communities • White papers
and the planet • One-to-one meetings with NGOs
and responses to questionnaires

Governments and industries are often • Ethical behavior
moving in the same direction that we • Risk management and
are. We need a clear picture of how business continuity
we contribute to driving innovation, • Cybersecurity
promoting sustainable development • Data privacy and protection
and shaping markets.
How we engage
• SGS hosted conferences, seminars
and webinars
• Membership meetings and events
Governments • White papers
and industries

Our investors are vital to our ongoing • Climate-related risks and opportunities
success and growth. We constantly • Sustainability solutions, impact valuation
review market analysis, and aim to be of our activities
assessed as both a sound investment • Ethical behavior
and a sustainable business. • Risk management and
How we engage business continuity
• Annual General Meeting • Good practices in corporate governance
• SGS Investor Days • Cybersecurity
• Meetings with investors and analysts • ESG performance and reporting
• Responses to analyst questionnaires • Services that support our customers’
Investors sustainability ambitions

42 Management
report
Our material topics The SGS Business Materiality Matrix captures the
issues deemed by our stakeholders to be materially
important to our organization. It is the outcome of a
rigorous process, including stakeholder consultation,
megatrend and risk analysis, and benchmarking
against international principles, including the UN
Sustainable Development Goals (SDGs).
Materiality assessment
The nine topics that are most important to the organization
We conduct a formal materiality assessment
every two years. In 2022, we integrated the 1 Cybersecurity 6 Talent attraction and retention
results of our risk assessment and kept in 2 Data privacy and protection 7 Customer relationship management
close contact with our stakeholders through
our regular channels, such as meetings 3 Ethical behavior 8 Corporate governance
with investors, our investor days, voice 4 Health and safety 9 Sustainable supply chain
of the customer surveys, our employee 5 Risk management
engagement survey, and meetings with
local communities. This has further These are key topics which have helped to shape our group strategy. Although relatively
contributed to our deep understanding less material for SGS, all other topics remain an essential part of our sustainability
of the most material topics for the Group. management systems. We systematically re-evaluate them to determine whether
they have become more material to the organization.
Other material topics
10 Adaption and mitigation of climate change 18 Local community investment support
11 Biodiversity 19 Preventing air pollution
12 Diversity in the executive team 20 Reducing and managing waste
13 Diversity and inclusion 21 Responsible use of materials
14 Employee engagement 22 Tax strategy
15 Executive compensation linked to sustainability 23 Training and development
16 Freedom of association 24 Water footprint
17 Innovation in services and operations 25 Well-being and work-life balance
1
5
2 3
4
6
10
8
9
23
13
12
7
15
24
14
18 20
25
21
16 17
22
19
11

Our risk intelligence During 2022 we have continued to focus

on and address the main prevailing risks
facing the organization, to ensure we can
fulfill our purpose of making the world
better, safer and more interconnected.
Risk governance Risk management framework Risk oversight

Our Board of Directors reviews risks to During the year, SGS has worked to further To support our risk management framework,
ensure that the company has a solid strategic enhance and streamline its risk management the Group conducts risk assessment, using
approach to mitigating them (see page framework, to better address the main a bottom-up approach, with identification
94). However, the ultimate responsibility prevailing risks facing the organization. As a of potential risks, coupled with design and
for identifying risks and integrating their result, a number of risk categories have been implementation of mitigation actions in
management into key business planning redefined, including specific risks contained place at a local level, where appropriate.
processes sits with our Operations Council. in these categories, to emphasize where the Additionally, at group level, SGS applies a
The Group Risk Steering Committee focal points, and resources to address these top-down approach to identify and assess
oversees our Risk Management Framework, risks, should be placed. This was further global risks to the company that might
chaired by the CEO. The committee enhanced by providing additional guidelines potentially be overlooked in the bottom-
comprises executive members, including the to local affiliates on how to properly recognize up evaluation.
Chief Financial Officer and Chief Compliance and measure their local risks, and by sharing We recognize the need to identify changing
Officer, together with representatives from best practice examples of mitigation actions. risk, especially due to political instability and
departments including Risk Management, The scope and global coverage of the risk military conflicts, global energy crisis driving
Human Resources, Operational Integrity and management assessment now continues the inflationary pressures, further aggravated
Sustainability. As well as biannual meetings, to cover a full and limited scope affiliates, by trade sanctions, adversely impacting local
the Committee meets as necessary, and driven by the magnitude and risk profile and regional economies, especially sourcing
reports directly to the Board. on a country-by-country basis. and supply chain operations, coupled with
Accountability for managing risk rests with This allowed SGS to further increase the continued climate changes, to name a few.
our ‘Risk Champions’ who are charged with worldwide applicability of the framework, We continue to monitor the measures we
assessing risk in the jurisdictions for which ensuring key markets and businesses have in place to deal with all new emerging
they have responsibility. In addition, SGS were appropriately involved. The local risk eventualities, ranging from climate change
integrates a broad array of risk categories management assessment inputs provided and consequential extreme weather, natural
(see the charts below) directly into the further validation from a global management disasters and cyberattacks.
management process (under the oversight perspective, contributing to a comprehensive
of ‘Global Risk Category Owners’), resulting and insightful overview of risk perception
in a robust and comprehensive approach. which appears on the risk heat map,
presented on page 45.
Risk management process Enterprise Risk Management Framework

Places responsibility and accountability for managing risk
close to our operations
Board of Directors and CEO Group Level

Review risks and ensure that the company has a solid strategic Top-down approach with
approach to mitigating them the objective of identifying
and assessing global risks
Audit Committee
Supporting the Board in risk assessment
and monitoring Global Risk
Macro
& Compliance
risk assessment
(GRC) platform
Operations Council
Ultimately responsible for identifying company
risks and integrating the management of these
risks into key business planning processes
Risk champions
– Affiliates
– Local Divisions
Group Risk Steering Committee – Operations
Chaired by the CEO, the Committee gathers executive
members, including the CFO and CCO, together with Own risks in local jurisdictions
operational function representatives applying a bottom-up approach

44 Management
report
Our risk intelligence

continued
The Task Force on Climate-related As part of our assessment process, we Business continuity
Financial Disclosures also identify emerging risks that are likely These times have underlined the need for
The Task Force on Climate-related Financial to impact our business in the next three businesses to build resilience and to be
Disclosures (TCFD) is a guidance framework to five years. prepared for disruptive events. During the
that helps companies disclose climate An example of these risks is the increase of year, we have built on our robust business
related-financial risks to investors, lenders extreme weather events which already occur continuity resilience strategy that focuses on
and insurers. due to climate change and are expected to the critical processes of the business, and
continue increasing in frequency and severity minimizes the risks associated with them
Read more in our from a business continuity perspective.
over the coming years. The main impact
TCFD Report We validate our business continuity plans
of extreme weather on SGS is closure of
laboratories and offices and interference with by running scenario exercises, which cover
2022 risk assessment results proactive resilience, planning and incident
the logistics of our services, whose impact
In 2022, we carried out risk assessments response. Our business continuity officers,
is being assessed in order to be mitigated,
in 56 of our main markets, applying full who operate at the three levels – local,
(i) through business continuity plans, to
and limited scope approach. We assessed regional and global – are central to everything
ensure that we are fully prepared for any
147 specific risks within 44 risk categories we do. They are normally managers or senior
extreme weather eventuality, and (ii) through
defined globally. managers, who have positions where they
a global climate scenario analysis, to help
The assessment has confirmed a number us with future planning. Other significant can influence what happens. To support
of prevailing and emerging risks, particularly risks, mentioned already above, are political them, we have provided training sessions
in relation to cyber and data security, and military conflicts, global energy crisis, and webinars, and enhanced our knowledge
increasing dependence on technology, which adversely impact the supply chain hub launched in 2021 for all the business
including outsourced IT services and and sourcing activities, result in growing continuity officers to have access to best
disruptive technology, also the attention operational costs of our business. practice documentation.
to information governance, fraud and illicit/
unauthorized activities, continued pandemic
challenges, as well as the importance
of customer needs, service delivery and
pricing processes, and talent management.

External risks
Communication & Investor Relations Environment & climate change Pandemic
Customer needs Industry Political risk, war, crime, terrorism
Cyberattack Legal & regulatory Technological innovation
Economy & sovereign
Internal risks
Operational Non-operational
risks risks
Process Management Human capital Compliance Technology Treasury Strategic
information
Environment Accounting Compliance Contract commitment Access Credit Business model

(operations) Budget & forecast Reward & claim Availability Foreign exchange Business portfolio
Health & safety External reporting Talent acquisition Data privacy Data integrity Liquidity Mergers &
Pricing Internal reporting Talent management Fraud & illicit or Infrastructure acquisitions
Real estate unauthorized activities Social responsibility
Tax Reliability
Service delivery Information governance
Technological
Sourcing Unethical behavior, capacity
bribery & corruption
Supply chain
Heat map of highest scored residual risks

High 5.0
1 Political risk, war & terrorism

2 Cyberattack
3 Legal & regulatory
4 Supply chain
5 Access to IT applications
4.0
6 Pricing
7 Sourcing
8 Fraud & illicit or unauthorized activities
9 Talent management
10 Technological innovation
Impact
3.0
11 Economy & sovereign
12 Pandemic
12 10
13 Data privacy
11
9 6 5
13 8 1
2.0
7 4 2
3
Low 1.0
Low 1.0 2.0 3.0 4.0 High 5.0

Likelihood

46 Management
report
Our principal risks The identification and management of risks is

aligned to our materiality assessment to help us
manage the principal risks. We have measures in
place to mitigate those risks to an acceptable level.
Risk description Material topic Summary of impact Mitigation measures
Political risk, war

External
• Health and safety • Business disruption, asset loss or • Crisis management in place to monitor
and terrorism of employees harm to employees due to civil or the situation and take necessary
interstate war, political violence and actions with respect to the Russia/
• Sustainable terrorism and external criminality Ukraine conflict
supply chain
• Reputational risks, risk of penalties • No major concentration of
and loss of business due to investments in single countries
international trade sanctions to ensure adequate level
and embargoes of diversification
• Incorporate relevant mandatory

requirements for all levels of
management into the group security
risk management policy
• Introduction of an enhanced sanction
policy, identification of red-flags and
know your client (KYC) procedures for
clients, suppliers and other business
partners, review of existing activities
at risk areas
Cyberattack • Cybersecurity • Financial losses resulting from • Execution and monitoring of

business disruption or interruption cybersecurity roadmap, strengthened
due to cyberattacks by additional cybersecurity resources
within the organization
• Loss of certification accreditation
leading to significant reduction • Proactive monitoring of all security
of our certification business systems, Intelligence and digital
forensic and incident response
• Loss of cyber insurance cover as a (DFIR), services through the
result of cyberattacks, lack of internal Security Operations Center (SOC)
knowledge and adequate technology
and security controls and processes • Implementation of security
measures and solutions at different
• Reputational impact
organizational layers
• Execution and monitoring of advanced

endpoint detection and response
(EDR) anti-malware systems
• Further enhancement of security

awareness among employees,
through training campaigns
• Implementation of security
updates and patches in systems
and applications
• Vulnerability management plan
in place to detect and remediate
potential weaknesses

Economy &
External
• Risk • Loss of revenue (decrease in • Ongoing performance monitoring

sovereign management service demand/economy) of SGS operations by region and
and business country in comparison to local
• Risk of price pressure
continuity economic environment
• Proactive and more frequent pricing

measures to address cost increases
and to protect SGS growth
• Take measures to adapt SGS

capacity (and cost base) based
on market demand
• Balanced resources allocation
to ensure adequate business
and geographical diversification
Pandemic • Health and safety • Spread of infections (including • Ongoing use of business continuity
of employees outbreak, epidemics, pandemics, taxonomy and related implementation
etc.), disrupting business operations, of action plan (2 000 actions defined
• Sustainable interactions with suppliers and on a worldwide basis within the
supply chain customers, resource availability SGS operations)
Access to IT
Technology
• Cybersecurity • Risk of unauthorized access to • Reinforcement of user access

applications sensitive information and resources, procedures and control
• Ethical behavior existence of orphan accounts and
• Implementation of digital surveillance
• Good practices use of exfiltrated credentials
services to reinforce the process of
and corporate user activity monitoring
governance
Technological
External
• Innovation • Risk of investing in technological • Deployment of a customer-centric

innovation in services innovation with limited value and and rapid validation approach
and operations impact on customers
• Execution of innovation initiatives,
Customer • Customer • Risk of losing opportunities due to based on a thorough understanding
needs relationship lack of innovation agility in serving of the customer needs, problems
management current and new markets and context
• Continuous assessment and validation

of innovation initiatives and projects
to ensure their organizational viability
• Ongoing business digitalization
through strategic partnership on
technology development to identify
solutions to mitigate operational
risks, and to improve efficiency
and competitiveness

48 Management
report
Our principal risks

continued
Fraud & illicit or

Compliance
• Ethical behavior • Business disruption, asset loss • Strong code of conduct policy and
unauthorized or harm to employees due to philosophy with regular and recurrent
• Good practices fraud, theft and abuse of integrity training for SGS employees
activities and corporate of services
governance • Confidential and anonymous whistle-
• Illegitimate and unsupported revenue blower reporting system in place
recognition, mainly linked to unbilled
revenue and work-in-progress, • Reinforcement of business ethics
resulting in potential overstatement compliance function at corporate
of revenue and understatement and affiliates levels
of cost (P&L)
• Security integrity vulnerability
assessment incorporated into
business processes
• Ongoing rollout of the worldwide

Order-to-Bill (O2B) initiative to
standardize and centralize billing,
coupled with application of best
practices/O2B golden rules across
all key business activities
• Centrally driven oversight through
internal controls, balance sheet/P&L
reviews and internal audits at
country level
Data privacy • Data privacy • Failure to comply with data • Appointment of a full-time group
and protection protection laws and/or changes data privacy officer (DPO) and local
in privacy regulatory environment DPOs in major affiliates to drive and
and enforcement monitor compliance with policies
and legislation relating to protection
of personal data
• Global privacy policy and set of

working guidelines covering all
aspects of handling of personal
data, applicable to all affiliates
• Induction training to all new

employees ensuring a level of
awareness to personal data in line
with the group exposure in this field
• Third-party vendor due diligence and

supervision in matters concerning the
security and safe handling of personal
data, aimed at assessing their privacy
and data security policies, processes
and controls
• Systematic assessment/due
diligence conducted for projects
involving the purchase of global IT
solutions and global IT consultancy/
development services

Supply chain
Process
• Sustainable • Business slow-down and/or • Inflation, increased transportation

& sourcing supply chain increased operational costs due costs and energy price risks
to supply chain issues, inflation, integrated into the strategic risk
increased transportation costs action plan roadmap and a dedicated
and energy price spike procurement workforce, with
numerous initiatives undertaken,
especially in the areas of contract
management, tendering and
renegotiations, introduction of
standard specifications, consolidation
of services and implementation of
new technologies
• Regular monitoring of potential

supply chain risks, especially for
laboratory providers
• Leveraging market intelligence
to monitor market trends and
continuously address inflation
and energy-related risks
Pricing • Customer • Risk of incorrect pricing due • Completion of pricing self-assessment

relationship to inadequate pricing model leading to implementation of key
management pricing actions and corrective measures
• Risk of margin pressure and
processing inaccurate discounts • Implementation of our Pricing Golden
Rules and value-based pricing
• Risk of underutilized capacity
due to too high pricing • Execution of additional pricing actions
versus competition leveraging on available data (upgraded
internal dashboards, external market
intelligence, segmentation, in-
depth analysis)
Talent
Human capital
• Talent attraction • Ineffective or inadequate training • Introduction of employee value

management and retention and development programs proposition (EVP) and employer
for employees branding program which support
• Training our talent attraction and retention
and development • Lack of leadership alignment and
effectiveness, lack of qualified and • Talent review and succession planning
• Employee competent employees, lack of process across the organization
engagement succession planning of key personnel to enhance talent management
and consultation and development
• Risk of inefficient
• Diversity performance management • Talent assessment and movement
and inclusion will significantly improve
• Well-being and talent development
work-life balance • Structured leadership development
program will enhance leaders’
competencies
• Development of well-being program
to improve employee engagement
and retention

50 Management
report
Quantifying our Like all organizations we depend on various

value through capitals to be successful. We are one of a small
six capitals number of companies that measure value creation
by capital using our Impact Valuation Framework.
We continued to develop this in 2022 and it now
covers a wider range of services than last year.
The framework is based on six forms We created the majority of this value through
of capital, as defined by the International profit generation, the paying of taxes and
Integrated Reporting Council. We use it wages, and our investments in training
to help us to make better decisions, by programs and information security.
considering non-financial as well as financial The framework also shows that we
aspects of our business. We measure generated CHF 822 million of negative
our progress using 32 indicators that societal impacts, arising from the
support how we track our measurable environmental footprint of our supply chain.
positive impact.
www.sgs.com/en/our-company/
Applying our Impact Valuation Framework corporate-sustainability/value-to-
methodology, we have calculated that our society
total value to society calculated in 2022
for 2021 was +CHF 6 397 million, and
that the value of our positive benefit to
society was +CHF 7 220 million.
2021 SGS value to society (CHF MIO)1
Financial Manufactured Human Natural Intellectual Social and Value to

capital capital capital capital capital relationship society
capital
6 023 556 (181) (359) 274 84 6 397
Our manufactured
Our human capital Our intellectual This capital is The total value
Our financial capital value The most negative
value is directly capital value is positively impacted to society of
capital results measures the impact is related
influenced, among mostly driven by by the way we SGS direct
are impacted improvement to the footprint in
others, by our our training and improve our operations and
by profit, of capital assets the value chain,
risk of having development relationships with supply chain
revenue, (directly controlled especially in our
human rights programs local communities, activities
employment and those of our supply chain
non-compliances creating trust to
costs and supply chain)
in our value chain customers and also
taxes paid to and by our negatively impacted
governments suboptimal data due to the risk
on gender equality of suppliers’
financial stress
Positive impacts
Supply chain 1 919 Supply chain 463 Supply chain 0 Supply chain 0 Supply chain 0 Supply chain 0 Value to society
Direct operations 4 104 Direct operations 145 Direct operations 71 Direct operations 7 Direct operations 298 Direct operations 209 Total
Negative impacts
Supply chain 0 Supply chain 0 Supply chain (118) Supply chain (352) Supply chain 0 Supply chain 0
Direct operations 0 Direct operations (53) Direct operations (134) Direct operations (14) Direct operations (24) Direct operations (125)
1. Value to society is calculated using 2021 figures. Within each capital we have identified positive and negative impacts. The values presented in each capital are the result of adding the
positive impacts and subtracting the negative impacts.

Our value in action
Through our SGS Impact Valuation This exercise helps us better understand
Framework we can measure the impact the impact of our services in terms of how
of what happens in our operations and much value they add to the different capitals.
across our supply chain. We are committed We have covered almost all the revenue
to measuring the impact of the sustainability coming from our sustainability solutions so
solutions we offer. far, and our initial impact calculation shows a
To create a valuation methodology based significant positive impact in many different
on verifiable data and research we worked areas. Among the main impact indicators,
across all five of our divisions by identifying we have looked at so far are consumption
services and their impacts. Then, based on of energy and CO2 emissions avoided; water
a mix of research and input data, we are able consumption avoided; injuries avoided; and
to calculate the impact and monetize it. lost disability-adjusted life years avoided.
An example of the methodology applied
to energy and green building services
is shown below.
Main impact indicators1:

Avoided energy Avoided injuries Avoided water Avoided CO 2 Avoided DALYs
consumption (Mio) consumption emissions (million lost (thousands)2
(billion KWh) (billion liters) metric tons)
+28 +12 68 +14 +116
Example of how our valuation

methodology was applied to
forest services
1 Service or group 2 Input

of services selected indicators
• Energy & Green Buildings • Number of buildings audited
6 Impact monetization 3 Identification

of impacts
• Social cost of avoided
CO2 emissions • Reduced energy
consumption
• Increase in natural capital
• Avoided
CO2 emissions
5 Impact calculation 4 Valuation methodology

• CO2 avoided • U.S Energy Information Agency research regarding
the energy consumption of commercial buildings
• World Green Building Council research about average

energy savings associated with green buildings
• Social cost of carbon
1. Impact indicators resulting from applying the SGS Impact Valuation Framework and covering 90% of the revenue coming from our sustainability solutions.
2. Disability-adjusted life years (DALY). One DALY represents the loss of the equivalent of one year of full health.

52 Management
report
Financial capital Our financial capital includes the value we add

to society through paying taxes to governments,
dividends to investors and wages to employees.
Beyond this, the profits we generate allow us
to reinvest in growth, innovation and improving
our services to our customers.
1
How we develop our financial capital
Mid-term targets – High-single digit constant currency revenue compound annual growth rate (CAGR) driven
by mid-single digit organic* growth per annum and a focus on M&A
2020-2023
– >10% Adjusted operating income* CAGR(a)
– Strong economic value-added discipline (EVA)
– Maintain or grow the dividend per share
2
Our inputs
2022 2021 2020
Profit CHF MIO 630 655 505

Total equity CHF MIO 763 1 202 1 134
Total assets CHF MIO 7 122 7 007 6 908
3
Progress during the year
Financial discipline – The structural optimization plan, at a one-off cost of CHF 35 million, will deliver over CHF 50 million
recurring savings from 2023
and focused
– Continued strong investment into our network expansion with net capex as a percentage of
capital allocation group revenue of 4.8% and seven acquisitions. In particular, our acquisition of proderm GmbH
adds competence in cosmetics and personal care testing, significantly reinforcing our leading
global position
– We issued two bonds with a total value of CHF 500 million. All our long-term debt is fixed
at an average interest rate of 0.8%
– CHF 250 million share buyback for cancellation as part of our flexible capital allocation strategy
A resilient financial performance
– Total revenue reached CHF 6.6 billion, up 3.7% (6.8% at constant currency*), with mid to high-
single digit growth achieved across all divisions. Organic revenue* increased by 5.8%, supported
by pricing initiatives and volume increase throughout the SGS network
– Adjusted operating income*, on a constant currency basis, is broadly stable at CHF 1 023 million
in 2022 compared to CHF 1 022 million in prior year. Operational leverage was temporarily offset
by the impact of Covid in China, supply chain disruption and acceleration of inflationary pressure
– Adjusted operating income margin* of 15.4% compares to 16.5% in prior year (16.4% at
constant currency*)
– Operating income of CHF 898 million compares to CHF 977 million in prior year. It was also
impacted by restructuring measures, the decision to cease two key upstream projects in Libya
following absence of cash collection, and strengthening of the Swiss Franc
– Net financial expenses slightly decreased from CHF 53 million in prior year to CHF 51 million in 2022
– Effective tax rate (ETR) improved from 29% in prior year to 26% in 2022, reflecting a normalization
of non-deductible expenses
– Profit attributable to equity holders of CHF 588 million compares to CHF 613 million in prior year,
a reduction of (4.1)% over prior year
(a) While we expect an improved adjusted operating income* and margin* in 2023, this target is more challenging given progress in
2022 and our disciplined approach to M&A.
* Alternative Performance Measures (APM), refer to the ‘2022 Full Year APM’ document.

3
Progress during the year continued
Financial discipline – Basic earnings per share of CHF 78.86 compares to CHF 81.91 in prior year. On an adjusted*
basis, earnings per share increased by 3.4% to CHF 92.46
and focused
– Free cash flow (FCF)* of CHF 507 million compares to CHF 635 million in prior year. Cash flow
capital allocation was impacted by higher net working capital* to support the strong revenue growth. Consequently,
operating net working capital balance was close to 0% as a percentage of revenue compared
to (2.4)% in prior year. In addition, Cash flow from operating activities decreased from
CHF 1 169 million in prior year to CHF 1 030 million in 2022 for the same reason
– Investment activities: Net capital expenditure was CHF 321 million, compared to CHF 331 million
in prior year. The group completed seven acquisitions for a total consideration of CHF 64 million
– Financing activities: In 2022, the group paid a dividend of CHF 599 million and issued two new
bonds in August for an amount of CHF 500 million. A new share buyback program was completed
for a total of CHF 250 million
– Return on invested capital (ROIC)* of 18.6% compares to 19.6% in prior year, mainly due to the
higher net working capital requirement
– As at 31 December 2022, the group net debt* increased from CHF 1 691 million in December 2021
to CHF 2 219 million
4
Outcomes
2022 2021 2020
Revenue CHF BN 6.6 6.4 5.6

Free cash flow CHF MIO 507 635 758
Adjusted operating income margin* % 15.4 16.5 16.1
5
Outlook 2023
– Mid-single digit organic growth
– Improved adjusted operating income* and margin*
– Strong cash conversion
– Maintain best-in-class organic return on invested capital*
– Accelerate investment into our strategic focus areas with M&A as a key differentiator
– At least maintain the dividend

54 Management
report
Financial capital We strengthened our market position in

by divisional Connectivity & Products, and in certain
performance Knowledge markets through focused
and outlook resource and capital allocation.
Connectivity
& Products
A very strong performance given the impact from Covid in China
Overview Outlook
1
• Organic growth of 3.9%, a solid • Solid growth expected across all activities
performance given the lockdowns against a potentially challenging backdrop
in China and supply chain disruption
• Connectivity to remain major growth
• Connectivity growth was strong, driver benefiting from investment and
supported by our continuous investment cybersecurity market development
in new technologies
• Softlines to develop in new sourcing
• Softlines grew in high-single digits countries despite some short-term
Revenue (CHF million)
benefiting from market share gains market headwinds
CHF 1 311 MIO • Hardlines declined organically due to

the impact of supply chain disruption
• Hardlines to improve despite being
potentially most impacted by
economic conditions
Constant currency growth in 2022 • Strong growth in Trade Facilitation Services
4.5%
driven by Antifraud services in Africa
and eCustoms
Health
& Nutrition
Health Science to reaccelerate in 2023
Overview Outlook
2
• Organic growth of 4.1% • Structural growth drivers to remain strong
in 2023
• Food organic growth well above
divisional average • Americas Food network expansion
to support portfolio growth
• Vaccine volumes largely replaced,
however organic growth slightly • Investment in Biopharma will support
declined in Health Science reacceleration of growth in Health Science
Revenue (CHF million) • Cosmetics & Hygiene grew in line • The integration of our recent acquisitions
892 MIO
with the divisional organic average combined with efficiency initiatives will
CHF driven by clinical and panel activity support profitability
• Margin impacted by reduction of Covid

Constant currency growth in 2022 vaccine-related work and significant
7.6%
investment in the network

Industries
& Environment
Growth led by industrial businesses
Overview Outlook
3
• Organic growth of 4.8% from both • Growth momentum in Field Services
volume and price and Inspection with expansion into new
services and geographies
• Double-digit growth in Technical
Assessment & Advisory driven by an • Strong growth expected in safety,
improving market and new contract wins and the new areas of energy transition
and sustainability solutions
• Field Services and Inspection grew above
divisional average driven by environmental • Continue to develop new innovative
field and marine services solutions to enhance the service portfolio
CHF 2 157 MIO • Higher demand in safety services drove

above divisional average growth in
• Bolt-on acquisitions and proactive portfolio
management as a key part of our divisional
Industrial and Public Health & Safety growth strategy
Constant currency growth in 2022
5.4%
Natural
Resources
Strong momentum in minerals
Overview Outlook
4
• Organic growth at 8.7% reflects an overall • Continued momentum in the mining
strong commodity market, mainly in mining industry, while oil and gas and agriculture
markets continue to be dependent on
• Strong growth in Trade and Inspection macro factors
as a result of favorable market conditions
in all commodities • Laboratory Testing momentum continues
to be driven by ongoing exploration demand
• Double-digit growth in Laboratory Testing and outsourcing opportunities
due to strong momentum in geochemistry
and new outsourcing contracts in oil and gas • Investing in our biofuels testing capacity
CHF 1 583 MIO • Major project wins and service

diversification drove double-digit
to meet strong market demand
• Rolling out sustainability solutions to support

growth in Metallurgy and Consulting energy and mining customers’ ESG goals
9.3%
Knowledge
Certification growth ahead of market and very strong growth
in consulting
Overview Outlook
5
• Organic growth of 8.7% with good • Overall demand for Knowledge services
performance from all SBUs in to remain strong
all geographies
• Solid growth in Certification led by medical
• Certification organic growth was devices and information security, while our
strong, ahead of the market new and innovative CertIQ online portal
will also support growth
• Consulting grew well above the
divisional average primarily driven • Momentum in Consulting supported by
by SGS Maine Pointe network expansion
CHF 699 MIO • Customized Audits grew below divisional

average despite double-digit growth
• Social and environmental audits as well
as sustainability report assurance are
in Responsible Business Services and expected to deliver double-digit growth
ESG services
8.7%
56 Management
report
Financial capital
in action
Financial
capital
We are
The acquisition of
proderm, now SGS growing
proderm GmbH,
has brought us
complementary
organically and
capabilities and scientific
expertise in dermatology, through strategic
acquisitions.
ophthalmology, oral care,
women’s health and
intimate hygiene, as well
as ‘cosmeceutical’ and
medical-related products.

We have
expanded and Providing our customers
with optimal support
strengthened our The global cosmetics and hygiene market
continues to grow rapidly, fueled by an
clinical testing increased consumer focus on well-being.
To differentiate their products from the
capabilities. competition, brands and manufacturers
constantly need to develop new innovative
formulations that will fulfill consumer
expectations. They need to stay on the
leading edge of trends and developments
by offering sustainable, green products
and move away from fossil fuel-based
ingredients to bio-based ones.
These organizations operating within
the health, beauty and consumer goods
industries are also held to incredibly high
standards. Their products must be safe
and effective, meeting both consumer
expectations and regulatory requirements.
The acquisition of proderm, with a team of
nearly 140 study experts and more than 20
specialist doctors, allows us to better assist
our global customers as a one-stop testing
solutions shop. In particular, expanding and
strengthening our capabilities in clinical
testing for cosmetics and pharmaceuticals
means we can provide our customers with
optimal support during the clinical studies
required if they are to make successful
product launches into the market.
We will
drive revenue Unique offering in cosmetics & hygiene
The acquisition of proderm GmbH completes
synergies across our global footprint. Now we are able to
provide solutions across a network of 45
the organization. laboratories and clinical testing sites across
North America, Europe and Asia. It gives us
a unique cosmetics and hygiene footprint,
offering analytical, microbiological, stability
and in-vitro testing, as well as clinical studies
for safety and efficacy.
In 2023 we will look to drive revenue
synergies through our sales and marketing
activities, setting up joint cross-site working
groups and projects, enabling us to share
+59 000
“We want to use the proderm SGS’s and proderm’s capabilities and
team’s globally recognized expertise in clinical trials and testing of
expertise to expand cosmetics, dermatological products and
products tested since foundation medical devices. We have already started
our offer to customers.
these collaborative efforts at some of our
The team exceeded our sites, including SGS Analytics’ clinical
+250 000
expectations, both culturally testing and molecular biological laboratory
and strategically, adding in Germany. Further cross-site projects are
great value to SGS and planned to create efficiency gains – making
subjects enrolled since foundation more use of digitalization, and replicating
our customers.”
SGS proderm’s unique techniques in
Dr. Sheida Hönlinger areas such as panel management and
Director Health Science and Cosmetics the recruitment of study subjects.
& Hygiene Germany/Austria

58 Management
report
Manufactured capital Our property, plant, equipment and other

manufactured goods comprise our manufactured
capital, and it is the investments we make in all
of these, from our laboratories to the items our
people use every day, that enable us to provide
even better services to our customers.
1
How we develop our manufactured capital
We invest in – Our laboratory network is at the center of our business activities, making the equipment and
services we require to operate them one of our largest procurement categories. We not only
and maintain have to negotiate the right commercial terms for the business need, we must also ensure they
our testing are fit for purpose, high quality and delivered on time anywhere in the world
laboratories
We create great – We manage our large corporate real estate (CRE) portfolio proactively with the aim of 100%
accuracy of our database, with no expired contracts. This enables us to operate in full compliance
places to work with group policy and deliver workspaces that are fully sustainable, energy efficient and correctly
that support our priced. With 85% of our portfolio leased, it is important that we start (re)negotiating early, usually
business growth 18-24 months ahead of a lease expiry or the initiation of a new project, to guarantee the best
leverage for SGS
2
Our inputs
2022 2021 2020
Capital expenditure CHF MIO 329 336 259

Operating expenditure CHF MIO 1 493 1 364 1 206
3
We invest in – We expanded our food laboratory network in our South and Central American region, including
adding capabilities at our labs in Peru, Chile and Argentina, and establishing brand new labs in
and maintain Mexico and Brazil
our testing – In February, we acquired Gas Analysis Services, an Irish gas analysis testing and instrumentation
laboratories specialist group. This acquisition built further on our competence in high purity gas testing and
critical skills and knowledge
– May brought two new acquisitions: AIEX, which adds complementary inspection capabilities
to our existing testing expertise, supporting sustainable nuclear energy production in France;
and Ecotecnos, which provides sea monitoring and oceanography services to multiple sectors
in Chile including aquaculture, energy, mining and petrochemical. We also acquired the remaining
49% stake from the other shareholders of C-Labs, which means we now own 100% of SGS
Digicomply, its market-leading regulatory compliance solution
– We continued to expand our water and soil testing capabilities in North America with the acquisition
of Silver State Analytical Laboratories, Inc. and Excelchem Laboratories, Inc. in July. We also added
advanced clinical testing solutions for cosmetics, personal care and medical products with our
acquisition of proderm GmbH in Germany
– In August, we expanded our cybersecurity capabilities and footprint into the USA with the
acquisition of Penumbra Security, Inc. – supporting our global strategy to become the global
TIC leader in cybersecurity
– During the year, we also acquired Ecotecnos, which provides sea monitoring and oceanography
services to multiple sectors in Chile, and Industry Lab in Romania, which has expanded our food
services and laboratory network in Europe
– We invested further in our Advanced Metrology Solutions laboratories to help us increase our
presence in the fast growing 3D metrology and dimensional measurement inspection services
sector in Spain and across Europe
We create great – We have rolled out a standard set of guidelines, called the CRE Golden Rules, to guide our people
through the negotiation process. We have also consolidated our office space by implementing new
places to work work from home policies, which have improved our people’s work-life balance, as well as delivering
that support our cost reductions
business growth

4 5
Outcomes Outlook 2023
– Since 2020, we have achieved a CHF 66 million cost – Work with innovative suppliers like Microsoft to support
reduction over the length of lease agreements against our digital agenda and develop new innovative and
our target of CHF 40 million sustainable business opportunities
– Develop a plug and play model to integrate new
companies efficiently and leverage acquisitions
to further deliver synergies across the group
– Retain cost reductions over CRE portfolio at
CHF 40 million over life cycle of leases

60 Management
report
Manufactured capital
in action
Manufactured
capital
We are
Today’s office buildings
are more than just a reducing our
workspace. They need
to empower people
by boosting their
footprint and
productivity with access
to the right technology, working more
flexibly and
while addressing their
work-life balance, with
an emphasis on health
and well-being.
efficiently.

We are
creating modern, Making more efficient use of our space
In the Philippines, our teams were based
flexible and attractive at three large buildings that, due to new
working patterns that became more
workspaces to inspire common during the pandemic, had become
under-utilized. That’s why SGS Philippines
our people. consolidated two of its shared service
centers into a single more efficient space.
We were able to achieve an overall reduction
of 3 095 sqm of office space, halving the
space we occupy, while bringing a range
of benefits for both SGS and our people.
We started the consolidation project by
running an analysis that not only determined
the cost savings we could make, but also
how it would be possible to reduce the
overall size of our office space without
creating a problem for colleagues. In fact,
it quickly became apparent that by making
more efficient use of a smaller space, we
could offer significant benefits to our people,
introducing new IT platforms and innovations
that would make our offices an even better
place to work.
We will
improve the way we Working better together –
wherever we are
work together and Our new ways of working at these offices
in the Philippines have helped our teams
attract new talent. improve their productivity, while colleague
engagement has benefited from reliable
communication platforms, and the exciting
new collaboration and creative spaces we
have provided. This is not just good for our
existing employees, but is also important
when trying to attract talented new people to
the organization. Alongside our new working
from home policy, most colleagues attending
our offices feel they now have a better
2.25 MIO
“Our new co-work app work-life balance. We have also seen cost
means we can manage savings and other benefits in a range of areas
CHF our workspaces more – including less rent payable for the two
total cost reduction in five years buildings, and lower energy consumption.
effectively, from monitoring
One very useful innovation we have
employee traffic in the office, introduced is the SGS Co-Work app, which
3 095 sqm
to managing car parking employees can download to their mobile
spaces and our canteens.” device and use to book hot desks, shared
rooms and training rooms. This is a great
Paula Fuentebella benefit to colleagues and visitors alike, and is
reduction in office space (51%)
Communications Supervisor another example of how we are supporting
our people to thrive in whatever working
environment they choose.

62 Management
report
Intellectual capital Our intangible and knowledge-based assets make

up our intellectual capital. That is everything from
our people’s knowledge of protocols, procedures,
our divisions and our customers, to the innovations
we develop to meet customer needs, and improve
our processes and services to add value to society.
1
How we develop our intellectual capital
We build – Our strategic program includes a wide range of initiatives and programs that promote a
culture of efficiency and excellence not just through the development of our people, but
capabilities that by fostering a mindset change, driving engagement and empowerment that helps us
will enable us create and spread knowledge
to deliver on – We want to provide our customers with the most efficient and cost-effective solutions for
our strategy testing by implementing a World Class Services (WCS) program along with a hub and spoke
model where applicable
– We are implementing a zero trust security model that assumes that untrusted actors already
exist inside and outside the organization’s network. Our approach relies on identity management
and governance that supports the principle of least privilege, meaning that someone only has
those privileges needed to complete their task
– We are pivoting towards a more digital business to capture market growth with the objective
of providing our operations with technology-based products to improve business results
We innovate for – We promote innovative ideas among our employees through initiatives such as our moonshot
campaigns, and provide tools and coaching that will help us develop ideas and prioritize projects
our customers with the potential to scale up to significant new revenue streams for SGS
– Within our own operations we are applying digital technologies such as machine learning and IoT
in our labs to reduce manual touch points during testing. Applying remote applications and drone
technologies to existing services is keeping our inspectors out of harm’s way while giving us new
ways to monitor and manage objects in the physical world and providing new streams of data
We inspire and – The ability of our people to innovate is integral to our success. To support them, we promote
self-directed learning, and invest in digital tools for training and development. We also tailor our
encourage our talent development programs to fit local markets, business needs and employee expectations
people to innovate
and generate new
intellectual capital
We secure our – Our information security policy describes the principles we use to prevent information from
information and being lost, from becoming public knowledge, and from being unavailable
know-how – We maintain a state of constant vigilance – through our risk analyses, our constant analysis
of tools and market solutions, and by monitoring the cyber threat landscape. That ensures we
can provide preventive, detective and corrective solutions to reduce or mitigate possible future
security incidents, with the aim of transforming security from a risk to an enabler for the business
– Our information governance framework (IGF) establishes fundamental principles designed to
create a system of behavioral guidelines, physical and technical controls that protect information
in any format, whether digital, hard copy or spoken
2
Our inputs
2022 2021 2020
Goodwill and other intangible assets CHF MIO 2 105 2 160 1 984
3
We build – We have launched a permanent digital builders organization that will empower joint business and
IT teams to design and develop technology-based products to improve business results in the short
capabilities that to medium term through increased revenues or efficiency
will enable us – In 2022, four additional laboratories have embarked on their WCS journey – in India, Turkey, Peru
to deliver on and the USA. That’s one more than our initial target for the year and brings us up to a total of 26
our strategy sites in scope for the program
– We have enhanced our detection capabilities both internally and externally by extending the
capabilities and services of the security operations center. These include digital surveillance
services that provide us with early warnings of exfiltrated credentials, and cybercriminal
movements in corners of the dark web that could affect our assets

3
We innovate for – We completed our first two moonshot (innovation) campaigns in collaboration with our Natural
Resources and Industries & Environment divisions in 2022
our customers
– Microsoft has signed an agreement to invest in SGS digital innovations over the next three years.
Taking a customer-centric approach, we will jointly explore emerging technology trends in
collaboration with Microsoft, such as AI, IoT or the metaverse, to identify new business models
for SGS and joint go-to-market opportunities
We inspire and – We partnered with two of the world’s leading business schools to create a development program
for managers to support our business growth strategy and digital awareness, and equip our
encourage our managers with new skills and behaviors to help them and their teams deliver solutions around
people to innovate transformation and digital awareness
and generate new – The program provides strategic tools, concepts and perspectives that will allow us to develop a
intellectual capital strategic response to the new digital possibilities that will support us in becoming more proactive
in the digital domain, help us turn digital threats into opportunities, create a competitive advantage
and enhance our performance. It will support our ambition to build a culture of innovation and
create a language of digital innovation
– In parallel, we have developed a comprehensive digital and innovation database containing both
learning and marketing material to help us apply digital technologies and methodologies to create
new products and services. It will also improve the way we work and the services we provide
by augmenting our physical operations with AI and machine learning
– We also conducted digital and innovation workshops, led by innovation coaches, to encourage
innovation in our teams and to boost cross-functional communication and collaboration
We secure our – We have created a holistic information security management system by adapting our processes
and methodologies to the ISO/IEC 27001 standard
information and
– Our cybersecurity plan has helped us improve our incident detection and response capabilities
know-how
– Throughout the year, our security technical office has continued to work on the framework of
policies and procedures as part of the cycle of continuous improvement, with the aim of creating
a robust risk and compliance management framework
– The adoption of information classification has also helped us understand our data and its value
better, increasing its usage within the company
– Our new IGF effectively requires sensitivity and awareness of fitness for purpose.
Corporate Security has conducted 13 pilot projects involving more than 1 000 employees across
all levels of the company and received very positive feedback
– We have appointed a full-time group data privacy officer (DPO) and local DPOs in our major
affiliates to drive and monitor compliance with policies and legislation relating to the protection
of personal data
– We are also providing induction training to all new employees to ensure a level of awareness
in managing personal data in line with the group’s exposure in this vital area
4
Outcomes
2022 2021 2020
Training ratio % of total employment cost spent on training

(includes safety training hours) 3.0 2.6 2.5
Number of WCS laboratories 26 22 20
5
Outlook 2023
– Continue the WCS journey by adding four further – Continue to enhance current technologies by adopting a zero trust
laboratories, expanding the full number to 30 in model in combination with a powerful training and awareness program
scope of the program and leveraging more of our and the advanced monitoring support of the security operations center
internal resources – The new classification system will be launched in Q1 2023. It will
– Continue the external WCS audits to measure our be accompanied by an intense training and education program to
progress in driving growth explain the concepts of information security and classification, and
– Continue to develop the learning strategy to meet to empower managers and other leaders to interpret and apply the
the upskilling needs of our workforce system to their own areas of responsibility
– Introduce an integrated talent management model – Continue the focus on personal data protection – we will launch a new
to the organization, which will include how to identify, global data privacy eLearning module in 2023, while developing a new
assess, develop and retain our talented people education, awareness and communication program on data privacy.
This will feature specific activities targeted at work involving sensitive
– Continue to engage innovators across our divisions, data and marketing data
regions and countries through our moonshot campaigns
– Improve our organizational setup for data protection with more
– Maintain the cycle of continual improvement, formalized roles and responsibilities across the accountable
conducting internal audits to verify the implementation business areas
of security controls

64 Management
report
Intellectual capital
in action
Intellectual
capital
We are
Combining deep
product knowledge with leading the
proprietary algorithms
and AI models, Truum™
autonomously scans
way in managing
product pages, offering
retailers effortless
analysis of their catalog
data at scale.
health, saving them
time, and enabling
them to focus on
what matters most:
their customers.

We have
learned how to Identifying the real issues retailers
face with their online catalogs
speak our customers’ The rise of eCommerce has seen consumers
move from physical stores to online
language. shopping, and this shift has come with its
own set of challenges. Online shoppers no
longer interact with products – they interact
with product data and the sheer volume
of that data is staggering. There are now
millions of product data points for every
single eCommerce website.
Managing data at such a scale is close to
impossible and most retailers are unaware
of how much bad product data is polluting
their online catalogs. Not only does this
impact their eCommerce performance,
by lowering conversion rates, or increasing
returns and their regulatory exposure, but
it also significantly harms their brand image
and consumer trust.
Approaching this problem, we conducted
more than 150 interviews with online
retailers. This helped us identify the real
issues that existing systems are not solving
with their online catalog. We also learned
how to speak their language to ensure
we built a solution that truly resonates
with users and will have a positive impact
on a daily basis.
We will
help retailers develop Delivering data quality assurance
and a thriving future
their relationship with Truum is not a regular innovation, it reflects
the obsession upon which it was built
digital customers. – we start with the customer and keep
them at the center of everything we do.
Our first product, Digital Shelf Monitoring,
autonomously scans online catalogs
and inspects the product pages seen by
consumers. Our proprietary technology
automatically identifies missing, incoherent
or erroneous data points on every product
page. In a few clicks, our customers can
prioritize and share corrective actions
+20 MIO
“Combining our core product with all their data actors to get rid of bad
expertise and the latest product data, quickly and efficiently.
AI technologies, Truum Bad product data hurts online retailers’ top
product pages scanned/analyzed and bottom-lines, resulting in endless catalog
helps us pave the way for
reworks, high product returns, unexpectedly
trust in eCommerce and low conversions, dissatisfied customers and
>55%
invent solutions that not regulatory exposure. Truum delivers data
only make our customers’ quality assurance for products sold online,
lives better: it empowers allowing retailers to thrive and confidently
of product pages have issues progress in the eCommerce world. As more
their own customers.”
retailers take advantage of all that Truum has
Vincent Jeanne to offer, we believe they will regain trust in
Vice President of Global Innovation their operations and renew their relationships
with their digital customers, taking their
businesses from strength to strength.

66 Management
report
Human capital We promote a workplace that provides equal

opportunities to all employees and allows them
to reach their greatest potential. Working with
integrity and protecting the health and safety of our
employees are top priorities. We are committed
to respecting human rights and also addressing
human rights risks in our supply chain. Through
the services we provide, we help our customers
to address these same risks.
1
How we develop our human capital
We work – Being trusted is a prerequisite of everything we do as a business. Our people do not engage in
any form of bribery or corruption, and we adhere to the legal requirements of every country where
with integrity we operate. The SGS code of integrity applies to all employees, as well as affiliated companies,
contractors, subcontractors, joint venture partners and agents
– Our code of integrity is reinforced through mandatory annual integrity training, and we require
all new employees to complete the same training within three months of joining us
We respect – Our absolute commitment to human rights is grounded in our SGS code of integrity and our SGS
business principles. It is also reflected in our human rights policy, supplier code of conduct and
human rights other relevant policies. We follow the principles of the United Nations Global Compact and United
Nations Guiding Principles on Business and Human Rights. These incorporate by reference the
rights and principles expressed in the International Bill of Human Rights and in the International
Labour Organization Declaration on Fundamental Principles and Rights at Work with its eight
core conventions
– As part of our continuous effort to respect human rights, we have put in place numerous policies,
programs and plans to prevent and mitigate the risk of our business causing or contributing to
adverse impacts to human rights
We attract, – Our global Employer Value Proposition (EVP) of #Bethechange and #BeSGS guides us and helps
us to attract, engage and retain the best people in a very challenging labor market. The four pillars
develop and retain of our EVP define the essence of our employer brand and are complemented by our integrated
the best talent talent management and total reward strategy
We commit to – Our culture of diversity and inclusion makes us more competitive and creates value for our
customers, investors and employees. Our commitment to diversity and equal opportunities
diversity and equal is expressed in our business principles, our code of integrity, our human rights policy and
opportunities our anti-discrimination and dignity at work policy
– We do not tolerate any form of discrimination and are proud to be known as a diverse employer
– We value the skills, knowledge and cultural diversity that people bring to our organization and
actively seek to engage them within our teams
– We are committed to paying our employees equally for work of equal value and conduct regular
analyses to ensure this remains the case
We engage – We invest in benefits, programs and services to support each dimension of our employees’
well-being – physical, mental, social, professional and financial. We also value feedback
with and care and encourage employees to voice their opinions via our voluntary annual employee
for our people’s engagement survey
well-being
We provide a – To achieve our operational integrity (OI) mission, we develop safety initiatives around eight areas:
(i) visible leadership; (ii) performance management; (iii) resources and skills; (iv) training and
safe and healthy awareness; (v) communications; (vi) risk management; (vii) health, safety and environmental
environment (HSE) compliance; and (viii) digitalization, recognizing the important benefits technology can
bring to our work in OI
– We run a bi-annual Health & Safety (H&S) survey to check that safe operations and practices are
in place in workplaces and facilities. It is an opportunity to assess how employees and contractors
perceive the value of H&S initiatives and for us to identify improvements opportunities
2
Our inputs
– 97 000 (average number of employees) – 15 SGS Rules for Life

3
We work – We built a network of regional compliance managers across our regions. We also implemented
with integrity policies in relation to risk management of third parties and sanctions
We respect – In 2022, our human rights task force progressed in the development of our human rights due
human rights diligence program. We also updated our group policy on human rights in line with the United
Nations Guiding Principles on Business and Human Rights, clarifying our focus areas. We provided
a mandatory online training program for all our employees
– We also published our first SGS human rights report this year and an update report regarding our
2022 operations can be found in the appendix, page 228. The report consolidates the principles,
policies and initiatives that demonstrate our human rights commitment. Our aim is to improve
transparency to our stakeholders, and to report openly on our progress
We attract, – We continued to roll out our talent acquisition tool Smart Recruiters during the year. The tool is
develop and retain now used in 55 countries and covers about 90% of open positions globally. It helps our teams
streamline their recruitment processes, improves service levels and increases the speed of hiring.
the best talent We have also engaged with a reputable, global pre-employment screening provider to reinforce
our commitment to employing honest, trustworthy people
– We conducted a full talent review and succession planning exercise that included the review
of our top 100 critical jobs across the business, by geography and function. We also partnered
with a well-known global consulting firm to conduct a leadership assessment, to provide feedback
to our leaders, and help to determine our leadership development needs. An action plan is in
place and we are tracking its progress
– More than 100 leaders participated in different leadership programs, with 50% of our leaders
completing programs across a range of subjects
– 82 000 of our employees are registered in SGS Campus, our global e-Learning platform.
Each affiliate and division use this tool to provide targeted learning and training programs
to local employees and global teams
– Our UK affiliate opened the resource and learning center ’becoming a manager’, in SGS Campus.
It aims to help their employees to seamlessly transition to managerial roles
– Our global divisions use SGS Campus to upskill their global teams in a range of technical areas,
such as inspection procedures and sampling. Our affiliates also provide on-the-job training and
some of them kicked off mentoring and coaching programs like the UK, who opened a virtual
learning center to help their employees transition to managerial roles
We commit to – The diversity of our Board members continues to progress with 33% of positions being held
diversity and equal by women and eight out of nine board members are ethnically diverse
– Our workforce represents nationalities from 118 countries, territories and regions across
opportunities five generations demonstrating our competitive advantage. The unique backgrounds and
perspectives that each nationality and generation brings helps us thrive
– To address generational issues, SGS Germany created a ‘shadow board’, a group of 14
non-executive employees between the age of 25-35 years that work with senior executives
on strategic initiatives. The shadow board helps SGS Germany address young employees’
lack of sense of belonging within the company, and the company’s ability to adapt to rapidly
changing market needs. It also promotes dialog between generations, supporting new
perspectives and fresh ideas, as well as providing a platform for the younger generation
to increase their visibility and add the benefits of their insights
– We continue to impose a diversity target for gender representation of interviewed candidates
for all management/leadership positions. About 36.8% of our new hires are women worldwide
– More than 300 managers participated in an unconscious bias webcast training during the year.
The training explains that how a person thinks can be based on life experiences which may
lead to unfair beliefs and views of others
– SGS Switzerland progressed on its diversity goals obtaining equal salary certification,
a symbol of excellence in terms of equal pay for all its employees
– SGS France held events to coincide with the 26th annual European Week for the Employment
of People with Disabilities including inviting Paralympics medal winning table tennis player,
Thu Kamkasophou, to share her story and advice. They also conducted a webinar for people
managers on how to integrate disability into their day-to-day work, and conducted a DuoDay,
where they welcomed people with a disability to pair up with SGS employees to share experiences

68 Management
report
Human capital
continued
3
We engage – We formed a cross-functional well-being working group to further develop our global employee
and care for well-being program and launched a campaign to raise awareness and increase employee
participation in our well-being initiatives
our people’s – We launched the first group-wide well-being portal providing a single place to share global
well-being well-being initiatives and ideas. It promotes successes of local initiatives and offers numerous
online courses designed to increase happiness, build more productive habits, and develop
skills that help to increase resilience
– We continue to offer flexible working where the nature of the work allows. A hybrid workplace
model not only enables us to attract and retain talent but supports employee well-being
– We encourage each affiliate to develop an employee recognition program based on their local
needs and culture. This improves motivation, and helps individuals feel valued in their roles
– In South and Central America we have implemented numerous programs to recognize our
employees’ and teams’ accomplishments. An example is Colombia’s ‘Extra Mile’ program,
which seeks to promote a culture of recognition based on our employees demonstrating
SGS values in their achievements and behaviors. The program began in 2021, and this year,
SGS Colombia has recognized 360 employees who went the ‘Extra Mile’. They are proud
and happy to be part of this initiative, receiving recognition from colleagues, and sharing
prizes in their personal network
– Our annual employee engagement survey helps us understand how colleagues feel about
working for SGS. In May 2022, more than 28 000 colleagues from 37 affiliates were invited
to complete the catalyst survey. More than 79% provided feedback, our overall employee
engagement index was rated at 69/100 and our manager effectiveness index was rated
at 72/100
– These results demonstrate that our employees recognize our strengths in: role clarity
(employees clearly understand what is expected from them in their role), highlighting the
efforts our managers have made to clearly express team expectations, even when many
work remotely; and safety and ethics (employees feeling safe at their workplace and
employees being encouraged to behave ethically), both key areas for SGS
– Country action based on the survey plans have been developed and are being executed
by our affiliates
We provide a – Our global H&S survey delivered many positive outcomes, such as the confidence to stop any
safe and healthy work if unsafe, the willingness to report all H&S issues, and the overall satisfaction with H&S
training. Some clear opportunities for improvement were identified, including clarifying the
environment purpose of our H&S actions, increasing the quality of dialog between managers and employees,
and improving the H&S onboarding which have been beneficial to safety at SGS
– Globally, a number of pioneer countries, such as Spain, Bangladesh, Turkey, France, Algeria,
Morocco, South Africa and Peru, have been selected to work jointly with global and regional
H&S teams. Their aim is to develop and put in place solutions that involve managers,
employees and specific experts, that we hope will result in improvements
– At a global level we launched three main initiatives to address some of the challenges highlighted
by the global H&S survey. First, our new global H&S vision considers all of our stakeholders’
expectations, and is known as ‘Because We Care.’ Based on care, inclusion, listening and
increasing ownership, it is part of a more human centric approach to addressing H&S; the
second initiative was the launch of the Safety LeaderSHIFT program, equipping our leaders
with practical tools and insights to demonstrate care to their teams, while encouraging a culture
of accountability on H&S; and third was Safety Month 2022, dedicated to the shared vigilance
concept, promoting both self-care and care for others. Under our motto, ‘See Something,
Say Something’, employees were introduced to the ‘Intervention’ process with practical
workshops and live events, covering safety and neurosciences, and how we can work
together safely
– We have been developing complete fire safety assessments on 20 sites in different
countries to upgrade their fire protection systems in line with our insurance company’s
standards. These assessments are in addition to their visits to our key sites (where the
insured values are above CHF 10 million), and have led to more than 200 actions to
improve safety, including fire safety training and better control of inventory. We have
also implemented new fire protection equipment in business critical sites, where a fire
could have severe consequences for our people and our strategic assets

4
Outcomes
2022 2021 2020
Lost time incident rate (LTIR) 0.19 0.22 0.23

SGS code of integrity: % employees trained to SGS Code of Integrity 99.9 99.9 98.8
Human rights training: % employees trained on human rights 78 29 28
Women in Leadership: % 31.1 29.0 28.0
5
Outlook 2023
– Expand our network of regional compliance managers – Further develop our well-being strategy in collaboration with an
– Perform integrity audits throughout the SGS network external expert
– Strengthen our human rights due diligence, with special – Continue to provide well-being training programs to our managers
focus on further identifying and mitigating risks and employees – by further building our well-being culture we will
improve employee engagement and retain our talent
– Continue to embed and promote our employee value
proposition and employer brand and develop a better, – Continue analyzing the global H&S survey results to assess the
more efficient talent acquisition delivery model globally impact of the global efforts made by the countries to address their
challenges, especially the pioneer ones
– Continue to provide training and include digital
elements within our talent acquisition and talent – Explore further opportunities to improve onboarding and the
development strategy well-being of employees and evaluate our well-being baseline
and set improvement targets
– Maintain our focus on gender equality and
generational diversity

70 Management
report
Human capital
in action
Human
capital
We are
At SGS we share
responsibility for our promoting a
health and safety.
We are all empowered
and trusted to act
culture of caring
to improve our own
and others’ health
and safety, while
throughout SGS.
acting to preserve
the environment
through conscious and
responsible decisions.

We have
made solid progress, Engagement, leadership
and commitment
but we need to Over the last decade, we have acted
and implemented systems, programs and
go further. actions across our sites and reached a level
of health and safety that is close to our
goal. Disappointingly though, our Health,
Safety and Environment (HSE) results are
now ‘plateauing.’ We continue to work hard
to understand the reasons for this plateau.
First of all, we think it is important to set
the right priorities and look beyond the
immediate benefits, as this will help us
mitigate any risks. In order to achieve these
objectives on our health and safety journey
we need engagement, leadership and
commitment from everyone.
We all have a role to play in our
health and safety, whether we are at
management level or out in the field.
That means engaging in constant dialog
and learning of all HSE matters. We must
adopt the correct behaviors and aim
to be a role model for others.
We will
work to become Our new HSE vision – Because We Care
We are taking further actions that will improve
a company where our HSE performance. We made a lot of
progress setting up reactive and proactive
everyone goes systems and now we are moving towards
cultural aspects. 90% of accidents are
home safely. caused by unsafe behavior. Behavior is not
the problem but a symptom that needs to be
adjusted. To better understand the symptoms
that lead to an incident we are examining the
human psychological aspects to improve our
prevention programs. In 2021, we conducted
a global employee perception survey.
This survey helped us identify employees’
main concerns and delivered candid feedback
on their experiences with our HSE initiatives.
We are fully convinced that if we demonstrate
care to our workers, they will not only take
care of themselves, but also of others. This is
230+
“We truly believe that if we why we believe that promoting a culture of
demonstrate care to our caring will help us make SGS a safer and
healthier company.
workers, they will not only
operations managers have been trained take care of themselves, One of the key programs to support our
as safety leaders in five countries new HSE vision is the Safety LeaderSHIFT.
but also of others.” It’s a program designed for SGS leaders
19
Nassim Beneddine and provides an insight into what they can
Global OI Head – Learning, do to improve their people´s health and safety
Resources and Cultural Change thinking and behaviors.
The Safety LeaderSHIFT program was first
sessions organized in 2022 launched in Lima, Peru, in May, at an event
attended by 70 operational leaders and local OI
employees. Since then, further LeaderSHIFT
sessions have been held as the program
visited Spain, Benelux, France and Germany.
We aim to continue the deployment in these
existing countries and extend the program
globally, with the support of local champions,
until all managers are in scope.
72 Management
report
Social and The way we collaborate with our customers,

relationship capital suppliers, communities and other stakeholders can
be described as our social and relationship capital.
This is not just important to our success, it ensures
we add value for all of them and that, together,
we add value to society.
1
How we develop our social and relationship capital
We engage with – Our brand is a vital tool, both for our business and for all of the stakeholders that interact with us.
It helps consumers to recognize quality and safety; it helps employees and prospective employees
our customers to connect to our identity and values; and it helps prospects and customers to find us and do
business with us
– Our divisions each have a customer care department, connecting customers to the relevant parts
of SGS. Each of these departments works hard to adapt our communication channels to meet our
customers’ needs
– We tailor our web presence to local needs in more than 80 countries and over 20 languages.
These websites fulfill many functions, including business and corporate information, knowledge
sharing, online engagement (including chat services), certification and document verification
We collaborate – We collaborate with more than 50 000 global, regional and local suppliers worldwide, enabling us
to prioritize our sustainability and innovation goals. While maintaining solid partnerships with our
with suppliers key strategic suppliers to generate long-term growth, we also work closely with local suppliers.
This allows us to seek new opportunities for development and collaboration, which will support
and benefit the communities where we operate
We use – Procurement plays a key role in supporting our sustainability ambitions through effective
collaboration with our suppliers, which drives growth, innovation and productivity. Our supply
procurement to chain is an important part of our value chain and we are serious about our responsibility to embed
drive sustainability sustainability in our suppliers’ operations
– We include sustainability criteria in the selection of our suppliers, monitor their risk through our
Self-Assessment Questionnaire (SAQ), and work closely with them on the development of global
and local sustainability initiatives
We support our – We are committed to investing in the communities where we operate, and we do so across
three pillars: empowerment, education and environmental sustainability. Through our community
communities investment program, we help to tackle global challenges such as poverty, equal opportunities,
health, education, climate change and environmental degradation
2
Our inputs
– SGS Community Program – More than 50 000 suppliers – Voice of the Customer program
3
We engage with – We launched a new SGS online store strategy in 2022, providing a new digital sales channel for local
our customers affiliates to administer, helping them prioritize online sales and facilitate a faster go-to-market. We have a
new agile platform which was piloted in Germany, the Netherlands and New Zealand. This allows teams
to add new services to the platform quickly with reduced implementation costs. Launch of the platform
was achieved in just one week and it has already provided an improved customer journey
– We track customer sentiment annually through our global Voice of the Customer (VoC) program.
In 2022, we expanded the program to cover 27 affiliates across six regions, gathering the voice of
19 000 customers. This represents a massive improvement in geographical coverage compared to
prior years, as well as a robust improvement in customer diversity per affiliate, with surveys sent
to key accounts and a proportionately relevant sample from all divisions of other customers
– The global VoC program is now the source for our customer satisfaction (CSAT) results, replacing
the Laboratory Excellence program. Our CSAT results are shared with all relevant stakeholders
across the organization and corrective actions are developed to increase customer satisfaction.
CSAT results were 84.5% in 2022, very close to our 2023 target of 85%, although slightly lower
than prior years due to the expansion of location and type of customers surveyed
– In 2022, we migrated our corporate website to a new platform, and began consolidating all local
corporate websites on the new platform under a single domain. This is a secure and futureproof
environment, offering smarter and faster internal operations with reduced manual work, and
new, industry-leading ways to interact with our audiences and service their needs. It gives us a
competitive advantage by further strengthening our leadership position as the number one online
authority for the TIC industry. All remaining local corporate sites will be migrated and consolidated
during 2023

3
We collaborate – Business continuity remained a challenge in 2022 due to the pandemic, bottlenecks in supply
with suppliers chains and geopolitical conflicts. That’s why we have put such an emphasis on supplier
collaboration to ensure the supply chain in all the countries we operate, with constant reviews
of the market conditions, global backorders with high dependency products such as lab
consumables, chemical products and IT equipment. We have avoided long delays by working
with our suppliers on portfolio substitution and rationalization, which has mitigated the effects
of global supply chain issues
– Reducing the risk of price increases has been another business continuity challenge in 2022.
Many of the actions we have taken with our suppliers have been to anticipate risks, standardize
payment terms and compliance, set up mitigation plans or promote more effective tendering
– Managing CHF 2 billion third-party spend, we have reinforced the value of procurement by
strengthening the collaboration among global, regional and local procurement teams to find
synergies, optimize our savings and support our operations
– Procurement is a key enabler for capturing innovation from our partner ecosystem to the SGS
group, carrying out more than 200 sourcing events related to business innovation and digital
transformation in 2022. New agreements and partnerships will also bring efficiency and growth
in the SGS Digital Transformation Journey, improving the way we work in areas such as
information security, production and delivery services
– Our Supplier Relationship Management (SRM) program is a systematic approach to evaluating
and engaging with our suppliers. Through the SRM program we aim to develop and leverage the
way we work with suppliers based on their risk to the business and the potential of added value
solutions to our stakeholders. SRM is focused on developing long-term relationships with our most
strategic suppliers to create business, innovation and sustainability opportunities. The program
is also there to increase collaboration among our global, regional and local teams, enabling us
to manage suppliers and key categories in a more efficient manner
We use – We have started rolling out our new self-assessment questionnaire (SAQ) for strategic suppliers.
procurement to This includes the definition of a new process that considers supply chain risk management and
mitigation plans for high-risk vendors. The first phase, in Q4 2022, covered our strategic global
drive sustainability suppliers and strategic local suppliers from four countries. By the end of 2023, we plan to extend
the use of the SAQ to all countries in scope
– We deployed the new SGS Supplier Segmentation in more than 25 countries and with over 6 000
top suppliers. This segmentation will not only leverage our category management but will also
allow us to put in place more efficient sustainability-driven projects by supplier segment
– We continued to promote our commitment to best practices in sustainability and ESG by making
adherence to our code of conduct part of our tendering and contracting processes
We support our – The development of our new community strategy has been a priority in 2022, and this will be
communities launched in the early months of 2023
– During the year, we have also worked with our regional and local sustainability network to promote
community investment with a special focus on volunteering. We have now made it mandatory for
all affiliates to organize volunteering activities. This commitment to volunteering, in kind and cash
donations, helps us to contribute towards our global priority sustainable development goals. We
are also committed to finding and supporting more online community volunteering opportunities.
Our affiliates continue to participate in global initiatives that support local communities, like the
SGS People 15 Day Challenge and the SGS Academy for the Community
4
Outcomes
2022 2021 2020
Customer satisfaction score (CSAT)* 84.5 88.0 88.0

Investment in community CHF MIO on a constant currency basis 1.99 1.45 1.25
Percentage of suppliers locally sourced % 98 98 97
* This is a satisfaction score on a 0-100% scale. The data sources used are the global VoC program in 2022 and the Laboratory Excellence Program for previous years.
Following a change in the methodology, data of the actual year is now reported.
5
Outlook 2023
– Continue and strengthen the VoC program to reach – Start our procurement transformation project (‘Horizon’)
85% CSAT, while increasing the sample size to gather to support our business in a more impactful way, by further
statistically relevant results by affiliate and by division developing our agility, collaborative mindset and impact on
– Full rollout of SGS online stores for those countries SGS financial performance
which want to start the online selling journey – Extend supplier SAQ to all affiliates in scope
– Continue to focus on brand awareness – helping – Launch and deploy our new community strategy
consumers to recognize the SGS brand as an – Continue promoting volunteering activities throughout
authority on quality and safety, in turn benefiting the network
our market leadership

74 Management
report
Social and
relationship capital
in action
Social and
relationship capital
We are
Through our SGS
Academy for the committed
Community program,
we bring training to
disadvantaged people
to supporting
who do not have access
to the opportunities people in our
communities.
some of us take
for granted.

We have
helped people to Providing a helping hand
across the world
be more employable In many of our communities, we see a
vicious cycle whereby people cannot afford
and productive. an education, so they remain unqualified and
therefore cannot find well-paid employment.
Through the SGS Academy for the Community,
we continue to provide high-quality technical
training free of charge, to people earning
less than the average living wage in the
communities in which we operate.
During the year, SGS Academy for the
Community provided support and training
for people in Pakistan, Ghana, India,
Bangladesh, Turkey and the UK.
For example, in Pakistan we trained people
with disabilities who had completed their
graduation but had not been able to become
economically independent. By training these
people in ISO management systems, we gave
them an opportunity to enter the workplace.
We also provided support to professionals with
low skills, upskilling them and making them
more employable and productive.
In Turkey we trained 225 female unemployed
environmental engineers and students on
integrated management systems, which will
enhance their employability.
And in Ghana we trained women from four
shea butter cooperatives in low-income
neighborhoods. They learned about good
manufacturing practices and hazard control.
This enabled them to increase the quality of
the shea butter they make, a product that is
used in beauty products in western countries,
and most importantly it has helped them
guarantee their jobs in the longer term.
We will
continue to support Generating opportunities
for individuals to thrive
economic development The ongoing aim of the program is to
support economic development by
worldwide. enhancing individuals’ employability and
improving their qualifications, so they can
seek better paid positions. In deciding what
+600
“We are passionate, courses to offer, we consider the local
employment market in each country.
considerate and fully
The program shares our philosophy of
understand that there are continual improvement by reaching out
people trained by the SGS people in the world who need
Academy for the Community and educating individuals and communities,
a helping hand to get them which in turn supports an improvement
on the road to personal and in the quality of life for many others.
9 professional enrichment It generates opportunities for individuals to

grow personally, enhances their skills and
and success.” enables them to be more independently
countries SGS supported Laurent Corbaz productive and even to support others.
Global Head of Strategic Planning
& Business Support, Knowledge

76 Management
report
Natural capital Our climate change strategy sets a clear path

to reduce energy consumption at source, use
renewable energy whenever possible, and offset
residual emissions. We add value to society through
the services we provide to our customers and by
helping them transition to a low-carbon economy,
minimizing their impact on the environment.
1
How we manage our natural capital
Our Climate – Our climate change strategy focuses on three main pillars:
Change Strategy 1. Reducing energy consumption at source: our main sources of CO2 emissions come from
buildings and vehicles – we have specific programs such as the Energy Efficiency in Buildings
(EEB) program to address these sources of emissions
2. Using renewable energy whenever possible
3. Offsetting all residual emissions
– Our employees are an essential part of the journey we are on, and the environmental awareness
initiatives we develop are an important part of this. We encourage employee participation to
strengthen their and our commitment and we are keen to take their initiatives and suggestions
into account
We promote the – While we produce relatively little waste, we do need to carefully consider the way we handle chemicals,
circular economy test samples, paper, plastic and organic waste at our offices and laboratories in order to preserve
natural resources
2
Our inputs
2022 2021 2020
Electricity consumed GWh 487 480 441

Fuel consumed GWh 460 448 422
3
Leading In 2022 we became the first TIC company to receive approval for our 1.5ºC and net-zero targets
from the Science Based Target initiative (SBTi).
decarbonization
Aligned with the 1.5ºC objective from the Paris Agreement, we have committed to reach net-zero
path following greenhouse gas (GHG) emissions across the value chain by 2050. To achieve this objective, we
SBTi have approved near and long-term science-based emissions reduction targets with the SBTi:
Near-term targets:
– We commit to reduce absolute scope 1 and scope 2 GHG emissions 46.2% by 2030 from
a 2019 base year
– We also commit to reduce absolute scope 3 GHG emissions 28% by 2030 from a 2019 base year
Long-term target:
– We commit to reduce absolute scope 1, 2 and 3 GHG emissions 90% by 2050 from a 2019
base year
Our direct emissions reductions will be prioritized, and all residual emissions will be neutralized
in line with SBTi criteria before reaching net-zero emissions by 2050.
In addition, we have been carbon neutral since 2014, meaning that so far, while reducing our absolute
emissions year-on-year, we have compensated our residual emissions using avoidance off-sets.
In our sustainability journey, while prioritizing the reduction of absolute emissions, we aim to gradually
transition from using avoidance off-sets to exclusively removal off-sets.
Evaluating and managing the risks associated with climate change remains a priority for us, and
we are supporters of the Task Force on Climate-related Financial Disclosures (TCFD). We are
well ahead of the mandatory implementation of the TCFD recommendations, recently approved
in Switzerland, and we have adopted their recommendations around governance, strategy, risk
management, and metrics and targets. In 2022, we have worked to quantify the financial impact
of some of our key risks and opportunities. The result of this analysis is available in our TCFD
appendix to this report.

3
We reduce energy – Our Energy Efficiency in Buildings (EBB) program is our flagship program to target our major source
of energy consumption. In 2022, we enhanced our IT tool to help us manage and visualize data,
consumption as well as analyze and compare buildings from an energy-intensity prospective.
– By focusing our energy reduction efforts on our highest consumption buildings, we have
demonstrated that we can make a significant impact on our energy levels. The 701 buildings
we currently have in our EEB program account for 80% of our electricity and non-transport
fuel consumption. We have now approved a global capex fund to support EEB measures and
incentivize local investments. In specific, we’ve improved our electricity intensity per revenue
by 5% compared to last year. We’ve intensified our investment in on-site photovoltaic systems,
which led us to multiply by six the amount of renewable electricity directly generated in SGS
buildings compared to the previous year
– For new buildings, the SGS green building guidelines are applied, enabling us to rate facilities
based on KPIs spanning energy, water and pollution; to transport, building materials and
employee well-being
– In 2022, we approved our vehicle emissions policy. Our goal now is to continue innovating with
our 10 000 strong car fleet, so that by 2025 it emits 40% less carbon, and that by 2023 10% of
our cars make use of low-carbon technologies (increasing to 50% by 2030). These technologies
include, for example, full electric, plug-in hybrid, hybrid and ethanol
– After buildings and vehicles, energy use across our IT infrastructure and data centers is an important
priority for us. Our new sustainable IT activation plan promotes optimization in cloud migration,
hardware and e-waste management, and we now manage more than 80% of our workloads via
the cloud. We have downsized the data center at our Swiss headquarters, while migrating our
enterprise resource planning platform to a cloud data center in Europe
– We are also replacing devices with new ones that are more aligned with our sustainability
standards. This has meant updating our purchase catalog to include a range of new devices or
models from manufacturers like HP and Lenovo that adhere to stronger sustainable standards
– Our power reduction policy is helping us to move devices into a special mode that saves energy.
This policy is being implemented globally, and is based on the principle that a device should start
to consume less energy after four minutes of inactivity, and provide maximum energy saving after
just 15 minutes, compared to a three-hour period under our previous policy
– We are investing in both renewable energy certificates and onsite self-generation facilities (solar
panels). So far, 97% of the electricity consumed by SGS comes from renewable sources, and
we are working towards closing that gap as far as possible
We reduce waste – We have continued to develop our waste reduction initiatives, especially for plastic waste. We are
and conserve working towards embedding the circular economy into our operations – keeping resources in use
for as long as possible, extracting the maximum value from them, then recovering and regenerating
water products and materials at the end of their service life
– We engage in various initiatives that help us monitor the amount of water we use and minimize
consumption across all our operations. As a company, we are not a highly intense consumer of
water, so this is not such a material topic for us. However, we remain committed to ensuring we
have efficient water management strategies in place. Within our EEB program, which is primarily
focused on our energy reduction efforts, we also assess water consumption and installations,
so that we can make recommendations for site-specific water efficiency improvements
4
Outcomes
2022 2021 2020
CO2e thousand metric tons* 116 505 115 303 110 137
EEB program energy conservation measures identified (cumulative) 786 708 471
* Market-based figures. Excludes district heating and refrigerant gases emissions due to unavailability of data. 2021 and 2020 data are recalculated and no longer include
business travel category of scope 3 in line with our new SBTi targets.
5
Outlook 2023
– Develop a policy to include circular economy principles – Refine our green IT initiatives and promote them via regional
into our waste and water management and local IT
– Track compliance of our new vehicle emissions policy – Continue replacing local network equipment in all countries,
– Continue deploying our Energy Efficiency in consolidating in the cloud
Buildings program – Increase our environmental awareness initiatives to guide
– Reinforce our IT Activation Plan with communications our employees on how to contribute to decrease our impact
across the network as a company
– Re-evaluate the scope and criteria of our Green Building – Continue adopting the TCFD recommendations
Guidelines as continuous improvement process

78 Management
report
Natural capital
in action
Natural
capital
We are
We have supported
our customer in their developing
transition toward a
circular economy for the
mining sector to reuse
innovative
damaged leaching layflat
hose – transporting solutions for a
circular economy.
the layflat hose to our
workshop to repair and
make them reusable in
a sustainable way.

We have
reduced industrial Enabling our customers to reuse
vital equipment
waste and delivered Our customer BHP Escondida is the world’s
largest producer of copper concentrates
cost savings. and cathodes. They use layflat hoses as an
essential input for the assembly of leaching
ponds in their metal extraction process.
When leaching layflat hoses are damaged,
they are normally disposed of as standard
waste in garbage dumps and replaced,
as they cannot be recovered in any form.
This poses a challenge to BHP Escondida
in their supply chain – specifically, with
the availability of these replacement
layflat hoses.
As part of the solution we provided to
our customer, our team now inspects the
hoses for damage, and where needed we
take them to our workshop to be cleaned,
disassembled, reconditioned and tested,
before returning them to the site for reuse.
This not only lowers our customer’s impact
on the environment, it reduces the new
materials they need as well as their costs, as
well as increasing their operational efficiency.
We support
our customers to Protecting the environment
This solution is in line with our commitment
make mining more to promote sustainable mining and to
support our customers in meeting their
sustainable for commitments to the environment.
Now, BHP Escondida receives a product that
future generations. was previously a waste at their operation, yet
it offers the same performance and quality
standard as the original hose. This reduces
their industrial waste by 50% and achieves
savings of more than 20% compared to
sourcing brand new hoses.
For the wider mining sector we have
50%
demonstrated that certain materials that are
currently disposed of could potentially be
recovered. It shows that we can all move
towards a more sustainable mining industry,
material recovered and reused while ensuring efficiency of operations.
We will seek opportunities to replicate this
+20%
project in other industries, wherever we
can put our principles into action to achieve
a positive outcome. Working closely with
our customers, we believe we can leave a
costs saved prosperous legacy for future generations.

80 Management
report
Our contribution Through our client services and our own operations,
to the SDGs we make a measurable contribution to the Sustainable
Development Goals (SDGs). We are committed to
increasing this contribution year-on-year. To help track
and report our wider contribution to society and the
planet, SA30 is mapped to the 11 SDGs, out of 17,
that are most relevant to our business activities.
Zero Examples of our contribution
hunger Feed, farm and agriculture Gafta sustainability pledge

We have developed a Over 100 of our labs,
comprehensive range of fumigation and inspection
We offer a range of sustainability support services that address operations are now included
food and feed safety, animal in the Grain and Feed
solutions that support food production welfare and sustainability – Trade Association (Gafta)
systems around the world. from farm to food processing. sustainability pledge directory.
We work with farmers as This demonstrates our
they strive to develop more company-wide commitment
sustainable methods for to following – and promoting –
production, increasing yields, sustainable industry practices.
promoting greater efficiencies Read more online

and improving access to
new markets.
Read more online
Good health Examples of our contribution
and well-being Biopharmaceutical testing WELL performance testing

We offer innovative In 2022, we partnered with
biopharmaceutical testing, IWBI (International WELL
We offer sustainability solutions biosafety, bioanalytics Building Institute) joining the
that help our customers achieve and product quality control WELL Enterprise Provider (EP)
positive health and well-being solutions for every life cycle network. WELL certification
stage – from early phase cell is an eco-friendly initiative
outcomes for their organization bank safety assessment and that focuses on human health
and for wider society. product characterization to later and welfare enterprises by
phase method development, reinforcing design layout and
bioanalysis and final phase architectural infrastructure
product release. tailored around current green
building standards inside the
Read more online

workplace. We are supporting
the WELL community with
Air quality monitoring our laboratory network
Air pollution from across the world ensuring
transportation, power standard compliance of indoor
generation, industry and environmental parameters.
domestic sources can
cause a variety of health
problems, including
cancer and respiratory
and cardiac diseases.
Chemicals and particles
released by these activities
change the composition
of the ambient air, which
can also affect animal and
plant life. Our sampling and
monitoring services ensure
the environment and human
health is protected.

Quality Examples of our contribution
education SGS Academy Moreover, SGS Academy

for the Community provides
Our SGS training programs
cover a wide range of topics high-quality technical training
related to areas such as quality, to people earning less than
We enable access to the average living wage in
sustainability, performance and
education through our health and safety. We offer the communities where we
training programs. bespoke training from industry operate. The aim of this pro
experts, and our courses are bono initiative is to support
designed for different levels local economic development
of ability to address the needs by enhancing access to and
of any industry. quality of employment.
Read more online

Gender Examples of our contribution
equality Women in leadership Equal salary certification

We are progressing against our SGS has obtained EQUAL-
2023 goal of 30% women in SALARY certification in
Our commitment to senior leadership positions by Switzerland, a symbol of
taking proactive steps, from excellence in terms of equal
inclusion and diversity recruitment (our recruitment pay. After successfully passing
includes working towards academy helps avoid conscious the statistical analysis of its
gender equality throughout or unconscious biases), to salaries, we underwent an
our business. policies (for example on anti- internal audit entrusted to PwC
discrimination and dignity proving that we applied equal
at work) and reward (taking pay for women and men.
action on our gender pay gap).
Clean water Examples of our contribution
and sanitation Water services World Class Service

(WCS) laboratories
Onsite sampling and analysis
services for water quality Each year, more of our
We ensure that our assurance help ensure that laboratories adopt WCS
waste water discharge is not methodology to build a culture
own operations – contributing to environmental of operational excellence
and the services we contamination. We are also and resource efficiency –
offer customers – a signatory to the WASH optimizing use of raw
support responsible Pledge on safe water, materials such as water.
sanitation and hygiene
water stewardship. within our own business.
Read more online

Affordable and Examples of our contribution
clean energy Energy efficiency services EEB program and onsite

reduction projects
We offer audit and
assessment against national Our EEB program evaluates and
We help customers and international schemes reduces the energy consumption
for calculating, monitoring in new and existing buildings
save energy and reduce and mitigating the impacts across the group. The action
carbon through our of energy use, as well as plans developed for each affiliate
sustainability solutions advice and guidance on how provide specific guidance on
– and we do the same to make everyday business steps that can be taken to
more sustainable. become more energy efficient.
across our own sites. Each plan identifies the affiliate’s
Read more online

key facilities, the KPIs that
need to be monitored and the
opportunities to improve energy
efficiency performance.

82 Management
report
Our contribution
to the SDGs
continued
Decent work and Examples of our contribution
economic growth Human rights policy

and report
New ESG services
Our ESG health check
Human rights policy recently services efficiently measure
Through our sustainability solutions, updated to better reflect our the environmental, social and
and our own workplaces, we commitment. Our human governance performance
rights report (available in of an organization, supply
foster technological innovation the appendix) consolidates chain and investment
and sustainable economic growth. the principles, policies and portfolio. To complement
initiatives that demonstrate our it, our ESG gap analysis
commitment to human rights. evaluates actions needed
Process safety and risk to improve performance
management services across ESG criteria and
disclosure, providing an action
Our services cover the plan for how to address the
entire life cycle of risks,
identified gaps to improve
from advising clients on
disclosures. With these new
local safety regulations
and applying methods of ESG services and many more,
hazard identification and we’re supporting companies
risk estimation during the in the implementation of
design phase, through to the sustainable business practices
development of and training throughout their ESG journey.
on risk management systems Read more online

and emergency plans.
Industry, innovation Examples of our contribution
and infrastructure Collaboration with

Microsoft to develop
IoT testing
We provide our customers
new digital TIC services with comprehensive
Our sustainability solutions contribute The collaboration integrates cybersecurity solutions such
Microsoft’s cross-industry as training, risk assessments
to future-ready infrastructure, and testing for their IoT
expertise, advanced data
sustainable industrialization and a solutions and productivity devices. With the acquisition
more inclusive, interconnected world. platforms, and our global of Brightsight in 2021, we are
network and leading industry integrating our solutions and
competence to develop use our knowledge to create
innovative solutions for the new services for the industries
TIC industry’s customers. that we consider have to
have the most relevance
Read more online

to security in a connected
environment: automotive,
medical, consumer IoT and
industrial application.
Watch our video on

cybersecurity solutions
and IoT

Responsible Examples of our contribution
consumption Sustainable packaging bluesign® certification

SGS offers a one-stop solution Our environment, health and
and production to help manufacturers produce production safety approval
and supply sustainable system helps the textile
packaging to clients operating industry optimize processes
Our sustainability solutions, in markets around the world. to reduce raw material inputs
and our own supply chains, Services include sustainable and costs, while enhancing
promote production and fiber services for paper future competitiveness.
consumption systems and cardboard packaging, Read more online

that conserve resources determination of mixed tropical
hardwoods, biodegradability
for the future. and compostability testing and
sustainable packaging design
and prototyping.
Watch the video

Climate Examples of our contribution
action Portfolio scan TCFD consulting services

We support our customers We provide assistance to
in reducing their carbon our customers to implement
Our climate change emissions across their the TCFD recommendations
real estate portfolio. and better understand the
strategy sets a clear path Our scan provides a ‘road financial impact of climate
to reduce our climate to zero carbon operations’ change in their business.
impact. We are also with refurbishment
helping our customers actions and related
investment requirements.
embrace the net-zero
economy. Watch the video

Life Examples of our contribution
on land Forestry services Now part of the TNFD

We enable organizations We are now part of the
to demonstrate that their Taskforce on Nature-related
We offer a range of sustainability timber procurement is Financial Disclosures (TNFD).
verified sustainable and As a member of this forum,
solutions that support responsible traceable, including FSC™, we are helping global financial
stewardship of nature and ecosystems. PEFC™, CFCC and EU timber flows to achieve nature-
regulation solutions for both positive outcomes in a world
forest management and of evolving nature-related risk.
chain of custody.
Read more online
Read more online

Environmental-DNA
(E-DNA) solutions
From our Global Biosciences
Center, we are trialling E-DNA
solutions for biodiversity
assessments in the mining,
construction and waste
sectors. Solutions using
E-DNA will support rapid and
remote biodiversity surveying
for clients.
Read more online


84 Corporate
governance
We are
ensuring
good corporate
governance.
This Corporate Governance report informs
shareholders, prospective investors and
society on SGS’s policies in matters
of corporate governance, such as: the
structure of the Group, shareholders’ rights,
the composition, roles and duties of the
Board of Directors and its committees
and Management, and internal controls
and audits. This report has been prepared
in compliance with the Swiss Exchange
(SIX) Directive on Information relating to
Corporate Governance of 18 June 2021 and
with the Swiss Code of Best Practice for
Corporate Governance. The SGS Corporate
Governance framework aims to achieve an
efficient allocation of resources and clear
mechanisms for setting strategies and
targets, in order to maximize and protect
shareholder value. SGS strives to attain this
goal by defining clear and efficient decision-
making processes, fostering a climate of
performance and accountability among
managers and employees alike and aligning
employees’ remuneration with the long-term
interests of shareholders.

1. Group structure 86 4. Operations Council 97 7. Change of control 99

and shareholders and defense measures
4.1. Members of the 97
1.1. Group structure 86 Operations Council 7.1. Duty to make an offer 99
1.2. Significant shareholders 86 4.2. Other activities and 98 7.2. Clauses on change of control 99
1.3. Cross-shareholdings 86 vested interests
4.3. Changes in the 98
Operations Council
4.4. Limits on external mandates 98 8. Auditors100
2. Capital structure 87 4.5. Management contracts 99
8.1. Duration of the mandate and 100
2.1. Issued share capital 87 term of office of the lead auditor
2.2. Authorized and conditional 87 5. C
ompensation, 99 8.2. Audit fees 100
share capital 8.3. Additional fees 100
2.3. Changes in capital 87 shareholdings and loans 8.4. Information instruments 100
2.4. Shares and participation 87 pertaining to the external audit
certificates 5.1. Content and method of 99
2.5. Dividend-right certificates 87 determining the compensation
2.6. Limitations on transferability 87 and the shareholding programs
and admissibility of 5.2. Rules on approbation by the 99 9. Information policy 100
nominee registrations annual shareholders’ meeting
2.7. Convertible bonds and 87 of executive pay
warrants/options
5.2.1. Rules on performance- 99 10. Quiet periods 100
related pay and allocation of
equity-linked instruments
3. Board of Directors 88 5.2.2. Rules on loans, credit 99
facilities and post- Investor relations at SGS 101
employment benefits
3.1. Members of the 88
Board of Directors 5.2.3. Rules on vote on pay 99
3.2. Other activities and 93
vested interests
3.3. Limits on external mandates 93
6. S
hareholders’ 99
3.4. Elections and terms of office 93
3.5. Internal organizational structure 93 participation rights
3.5.1. Allocation of tasks within 93
6.1. Voting rights and representation 99
the Board of Directors
restrictions
3.5.2. Members’ list, tasks and 94
area of responsibility for 6.1.2. Rules on instructions to 99
each Committee of the the independent proxy
Board of Directors and electronic participation
3.5.3. Working methods 95 in the annual shareholders’
of the Board and meeting
its committees 6.2. Statutory quorums 99
3.6. Definition of areas 95 6.3. Convocation of General 99
of responsibility Meetings of Shareholders
3.7. Information and control 96 6.4. Inclusion of items on the agenda 99
instruments vis-à-vis 6.5. Registration in the share register 99
the management

86 Corporate
governance
1. Group structure The Group is structured into five divisions

with each responsible for the global
This definition of materiality excludes
dormant companies, pure sub-holding
and shareholders development of group activities within companies or entities used solely for the
its own sphere of specialization and detention of assets. Details of acquisitions
the execution of strategies with the and disposals made by the SGS Group
1.1. Group structure support of the Chief Operating Officers. during 2022 are provided in note 3 of the
1.1.1. Operational Group structure At 31 December 2022, the business consolidated financial statements included
SGS SA, registered in Geneva (CH), also divisions were organized as follows: on page 137 of this annual report.
referred to as the ‘Company’, controls • Connectivity & Products (C&P)
directly or indirectly all entities worldwide • Health & Nutrition (H&N) 1.2. Significant shareholders
belonging to the SGS Group, which provides • Industries & Environment (I&E) To the knowledge of the Company the
independent inspection, verification, testing, shareholders owning more than 5% of its
• Natural Resources (NR)
certification and quality assurance services. share capital as at 31 December 2022, or
• Knowledge (Kn)
The shares of SGS SA are listed on the as the date of their last notification as per
SIX Swiss Exchange and are traded on SIX Each division was led by an Executive Vice Article 20 of the Swiss Stock Exchange Act
Europe (Swiss Security Number: 249745; President. Chief Operating Officers and (SESTA) were Groupe Bruxelles Lambert
ISIN: CH0002497458). Executive Vice Presidents are members of (acting through Serena SARL and URDAC)
the Operations Council, the Group’s most with 19.11% (December 2021: 19.11%) of
On 31 December 2022, market capitalization senior management body.
was approximately CHF 16 114 million (2021: the share capital and voting rights of the
CHF 22 837 million). 1.1.2. Listed companies in the Group Company, and BlackRock Inc. with 5.18%,
None of the companies under the direct (December 2021, less than 5%). As at
The operations of the Group are divided
or indirect control of SGS SA have listed 31 December 2022, the SGS Group held
into seven regions, each led by a Chief
shares on any stock exchange. 1.68% of the share capital of the Company
Operating Officer responsible for the
(December 2021: 0.04%). During 2022, the
SGS businesses in that region and for the 1.1.3. Non-listed companies in the Group Company has published regularly on the
local implementation of group policies
The material legal entities consolidated electronic platform of the Disclosure Office
and strategies.
within the Group are listed on pages 187 of the SIX Swiss Exchange Ltd all disclosure
At 31 December 2022, geographic to 189 of the annual report, with details of notifications received from shareholders
operations were organized as follows: the share capital, the percentage of shares of transactions subject to the disclosure
• North America controlled directly or indirectly by SGS obligations of Article 20 SESTA.
• Latin America SA and the registered office or principal During 2022, the Company has published a
• Africa & Western Europe place of business. The list of legal entities total of 2 reports regarding the composition
is limited to entities whose contribution to of its significant shareholders to the
• North & Central Europe
the Group revenues in 2022 represent at Disclosure Office of the SIX Swiss Exchange
• Eastern Europe & Middle East least 1% of the consolidated revenues and Ltd at www.sgs.com/en/investor-relations
• North East Asia includes the main operating entity in the
• South East Asia & Pacific jurisdictions where the Group is active, even
when annual revenues do not reach 1% of
1.3. Cross-shareholdings
consolidated revenues. Neither SGS SA nor its direct and indirect
subsidiaries have any cross-shareholding in
any other entity, whether publicly traded or
privately held.
Group structure
Regions Functions Divisions
Chief Executive Africa & Western North & Central Finance, M&A, IT Connectivity Health &
Officer Europe Europe & Procurement & Products Nutrition
Eastern Europe & North East Asia Human Industries & Natural
Middle East Resources Environment Resources
Latin America South East Asia Investor Knowledge

& Pacific Relations,
Corporate
Communications
& Sustainability
North America Legal,

Compliance
& Corporate
Security

2. Capital structure The shareholders have conditionally

approved an increase of share capital by
2.4. Shares and participation
certificates
an amount of CHF 1 100 000 divided into
All shares, other than treasury shares held by
2.1. Issued share capital 1 100 000 registered shares with a par
SGS SA, have equal rights to the dividends
The share capital of SGS SA is CHF 7 495 value of CHF 1 each. This conditional share
declared by the Company and have equal
032 as of 31 December 2022 and comprises capital increase is intended to obtain the
voting rights. The Company has not issued
7 495 032 fully paid-in, registered shares shares necessary to meet the Company’s
any participation certificates (bons de
of a par value of CHF 1. On 31 December obligations with respect to employee equity-
participation/Partizipationsscheine).
2022, SGS SA held 125 978 treasury shares based remuneration plans and option or
through an affiliate company (2021: 3 360). conversion rights of convertible bonds or
similar equity-linked instruments that the 2.5. Dividend-right certificates
On 21 June 2022, the Group announced a
Board is authorized to issue. If increased The Company has not issued any dividend-
share buyback program for the purposes
by the maximum amount of the conditional right certificates.
of capital reduction, which ended on
share capital, the existing share capital
21 December 2022. Under the program, SGS
of 7 495 032 shares would increase by 2.6. Limitations on transferability
SA repurchased 113,499 shares on a second
approximately 14.7% to 8 595 032 shares.
trading line on SIX Swiss Exchange (equivalent and admissibility of nominee
The conditional capital is not limited in time.
to 1.51% of the current share capital of SGS registrations
SA), for a total amount of CHF 250 million, at The right to subscribe to such conditional
SGS SA does not limit the transferability
an average purchase price of CHF 2,202.66 capital is reserved to beneficiaries of
of its shares. The registration of shares
per share. employee share option plans and holders of
held by nominees is not permitted by the
convertible bonds or similar debt instruments
Company’s articles of association, except by
and therefore excludes shareholders’
2.2. Authorized and conditional preferential rights of subscription. The Board
special resolution of the Board of Directors.
share capital By decision of the Board, the Company’s
is authorized to determine the timing and
The Board of Directors has the authority to shares can be registered in the name of a
conditions of such issues, provided that they
increase the share capital of the Company nominee acting in a fiduciary capacity for an
reflect prevailing market conditions.
by a maximum of 500 000 registered undisclosed principal, provided however that
The term of exercise of the options or shares registered in the names of nominees
shares with a par value of CHF 1 each,
conversion rights may not exceed ten years or fiduciaries may not exercise voting rights
corresponding to a maximum increase of
from the date of issuance of the equity- above a limit of 5% of the aggregate share
CHF 500 000 in share capital. If increased by
linked instruments. capital of the Company. This rule was made
the maximum amount of the authorized share
capital, the existing share capital of 7 495 032 public on 23 March 2005. The Company has
shares would grow by approximately 6.7% 2.3. Changes in capital a single class of shares and no preferential
to 7 995 032 shares. The Board is authorized The share capital of the Company was rights have been granted to any shareholder.
to issue the new shares at the market reduced in 2021 to cancel shares purchased
conditions prevailing at the time of issue. by application of share buyback programs 2.7. Convertible bonds
In the event that the new shares are issued initiated by the Company. In 2021, the and warrants/options
for the purpose of an acquisition, the Board shareholders approved a reduction of the
No convertible bonds have been issued
is authorized to waive the shareholders’ share capital, by cancellation of 70 700
by the Company or by any entity under
preferential right of subscription or to allocate shares. No other changes in the share
its direct or indirect control. In 2022, no
such subscription rights to third parties. capital of the Company were made in
options or similar instruments have been
The authority delegated by the shareholders the course of the last three years.
issued by the Company or by any of the
SGS to increase the share capital is valid until Group’s subsidiaries.
23 March 2023.

88 Corporate
governance
3. Board of Directors The Board has set out criteria for the selection
of new directors and has conducted a
At the Annual Shareholders Meeting
of March 2022 Ms Phyllis Cheung was
The Board of Directors is the highest search which has resulted in changes to the appointed to the Board of Directors along
governing body within the Group. It is the composition of the Board of Directors in 2020, with the re-election of all incumbent
ultimate decision-making authority except 2021 and 2022. The aim of this exercise is members of the Board of Directors.
for those decisions reserved by law to the to ensure that the Board is continuously in Biographical information on former members
Annual General Meeting. a position to provide leadership, strategic of the Board of Directors is available in the
oversight and guidance and contribute to corporate governance reports of prior years.
3.1. Members of the Board setting ambitious targets for the Group and The members of the Board of Directors at
meeting long-term value creation objectives. 31 December 2022 were as follows:
of Directors
This section presents the Members of the The competencies sought by the Group for
Board of Directors of the Company with their its Board of Directors include experience of
functions in the Group, their professional senior executive leadership in international
backgrounds and all their material positions businesses, strategic planning, finance,
held outside the Group in governing and technology and innovation. When selecting
supervisory boards, management positions candidates to the Board of Directors, the
and consultancy functions, official tenures Company has due regards to the experience,
and political commitments, both in professional qualifications, areas of expertise,
Switzerland and abroad. age, gender and national background as
well as leadership style, so that at all times,
the Board and its committees have the
required skills.
Board members key industry experience based on the Global Industry Classification Standard (GICS):
Consumer Consumer Information Communication
Industrials Discretionary Staples Healthcare Financials Technology Services
Calvin Grieder
Sami Atiya
Paul Desmarais
Ian Gallienne
Tobias Hartmann
Shelby R. du Pasquier
Kory Sorenson
Janet Vergis
Phyllis Ka Yan Cheung
Board composition at the end of 2022
Geographical spread Gender Length of tenure
Americas 22% Male 67% 3 years and less 54%
Europe, Africa and Middle East 67% Female 33% Between 3 and 6 years 36%
Asia Pacific 11% Between 7 and 9 years 10%

Calvin Grieder Sami Atiya Phyllis Ka Yan Cheung

Nationality: Swiss Nationality: German Nationality: Chinese
Year of birth: 1955 Year of birth: 1964 Year of birth: 1970
Tenure: 3 years Tenure: 2 years Tenure: 1 year
Function in SGS Function in SGS Function in SGS

• Chair: Board of Directors • Board of Directors • Board of Directors
• Chair: Nomination Committee • Nomination Committee • Sustainability Committee
• Sustainability Committee • Chair: Remuneration Committee
Key experience
Key experience Key experience • Retail and consumption
• Automation and control technology (USA) • Robotics • Digitalization and data driven organization
• Telecom and digital services • Automation • Growth in Asian markets
• System engineering and services • Medical technology • Enterprise level risk management
• Food processing • Software and logistics • Change management and company culture
• Risk management • Transportation • Risk management
• Risk management
Professional history Professional history
2001 to 2016: Bühler (CH); CEO Professional history 2015 to present: McDonald’s China; CEO
1999 to 2000: Swisscom (CH & DE) 2016 to present: ABB Ltd (CH, SE) 2012 to 2014: McDonald’s Singapore
1994 to 1998: SIG (CH) 1997 to 2014: Siemens Group and Malaysia
1991 to 1994: Mikron (CH) 1995 to 1997: Harald Balzer & Partner 2000 to 2011: McDonald’s China
1984 to 1990: Bürkert (DE & USA) 1994 to 1995: Robert Bosch – Blaupunkt 1998 to 2000: Leo Burnett, Hong Kong
1980 to 1983: Georg Fischer (CH & USA) 1988 to 1993: Fraunhofer Institute Karlsruhe 1997 to 1998: Momentum Strategy
Institute of Technology Consultant, India
Education 1992 to 1997: Saatchi & Saatchi,
• Master of Science in Process Engineering, Education J Walter Thompsons, Hong Kong
ETH Zurich • Master of Business Administration (MBA),
• Advanced Management Program (AMP), Massachusetts Institute of Technology Education
Harvard University (MIT), USA • Bachelor of Arts, The University of
• Master’s degree in Electrical Engineering Hong Kong, China
Other activities and functions and Automation, Karlsruhe Institute of • Executive MBA, The Chinese University
Givaudan SA*, Vernier (CH), Chairman Technology, Germany of Hong Kong, China
of the Board • PhD in Electrical Engineering (Robotics,
Artificial Intelligence and Sensors), Other activities and functions
Bühler Group AG, Uzwil (CH), Chairman
University of Wuppertal/Karlsruhe Institute Fellow, Aspen China Fellowship
of the Board
for Technology, Germany
AWK Group AG, Zurich (CH), Chairman Member, Aspen Global Leadership
of the Board Network
Carivel7 AG, Zurich (CH), Owner
Avenir Suisse, Zurich-Oerlikon (CH),
Member of the Board of Trustees
Advisory Board ETH – Department of
Mechanical & Process Engineering
* Listed company.

90 Corporate
governance
Paul Desmarais, Jr. Ian Gallienne Tobias Hartmann

Nationality: Canadian Nationality: French, Belgian Nationality: German, American
Tenure: 9 years Tenure: 9 years Tenure: 2 years

• Board of Directors • Board of Directors • Board of Directors
• Remuneration Committee • Audit Committee
Key experience • Nomination Committee
• Insurance and risk management Key experience
• Strategy Key experience • Retail
• Private equity • Strategy • Technology
• Innovation • M&A • Logistics and operations
• Finance • eCommerce and marketplaces
Professional history • Consumer/retail management • IT
1982 to 2020: Pargesa Holding SA; Chairman • Risk management • Cybersecurity
1984 to 2020: Power Financial • Risk management
1981 to 2000: Power Corporation of Canada Professional history
2012 to present: Group Bruxelles Lambert; Professional history
Education CEO 2018 to present: Scout24 SE; CEO
• Bachelor of Commerce degree from 2005 to 2012: Ergon Capital Partners 2017 to 2018: Hellofresh SE
McGill University, Montreal 1998 to 2005: Rhône Capital LLC 2011 to 2015: eBay Enterprise
• MBA from the Institut Européen (part of eBay Inc.)
d’Administration des Affaires Education
(INSEAD), France • MBA from INSEAD, France Education
• Honorary doctorates from various • MBA, Clark University, USA
Canadian universities Other activities and functions • Bachelor of Arts (BA) degree, Clark
adidas* (DE), Vice Chairman of the Supervisory University, USA
Other activities and functions Board, Member of the General Committee
Groupe Bruxelles Lambert*, Brussels (BE),
Imerys*, Paris (FR), Member of the Board,
Chairman of the Board of Directors
Chairman of the Strategic Committee, Member
Great-West Lifeco Inc.*, Winnipeg (CA), of the Compensation Committee, Member of
Member of the Board (including those the Appointments Committee
of its major subsidiaries)
Pernod Ricard SA*, Paris (FR), Member of the
IGM Financial Inc.*, Winnipeg (CA), Board, Member of the Strategic Committee
Member of the Board (including those and Member of the Remuneration Committee
of its major subsidiaries)
Carpar SA (BE), Member of the Board
Member of the Advisory Council
Compagnie Nationale à Portefeuille SA (BE),
the European Institute of Business
Member of the Board
Administration (INSEAD)
Financière De La Sambre SA (BE),
Trustee of the Brookings Institution
Member of the Board
and a Co-Chair of the Brookings
International Advisory Council (USA) Société Civile du Château Cheval Blanc (FR),
Member of the Board
Past Chairman and a Member of the
Business Council of Canada (CA) Marnix French ParentCo (Webhelp group),
Paris (FR), Chairman of the Board
* Listed company.

Shelby R. du Pasquier Kory Sorenson Janet Vergis

Nationality: Swiss Nationality: British Nationality: American
Tenure: 17 years Tenure: 3 years Tenure: 1 year

• Board of Directors • Board of Directors • Board of Directors
• Remuneration Committee • Audit Committee
Key experience • Chair: Audit Committee
• Corporate law • Chair: Sustainability Committee Key experience
• Banking, stock exchange • Healthcare (pharmaceuticals, biotechnology
and financial regulation Key experience and device)
• Private equity • Capital and risk management • US leadership across large, complex,
• M&A • Audit and control and heavily regulated businesses
• Risk management • Capital markets • R&D background
• M&A • Board governance and CPG knowledge
Professional history • Remuneration (executive and • Risk management
1994 to present: Lenz and Staehelin; Partner wider workforce)
• Governance Professional history
Education • Sustainability 2013 to 2019: various private equity firms
• Geneva University Business School 2010 to 2012: OraPharma, Inc.; CEO
and School of Law Professional history 1988 to 2009: Johnson & Johnson
• Columbia University School of Law (LLM) 2005 to 2010: Barclays Capital;
Managing Director Education
Other activities and functions 2001 to 2005: Credit Suisse • Bachelor of Science in Biology, Pennsylvania
Swiss National Bank*, Member of the Board 1998 to 2001: Lehman Brothers State University, USA
since 2012, Chair of the Risk Committee 1997 to 1998: Morgan Stanley • Master of Science in Physiology,
Pictet and Cie Group SCA, Chairman 1995 to 1997: Commerz Financial Products Pennsylvania State University, USA
of the Supervisory Board since 2013 1992 to 1995: Total SA
Other activities and functions
Education Teva Pharmaceutical Industries*, Member of
the Board, Chair of Compliance Committee
• Post-graduate (DESS) degree in corporate
and Member of the Human Resources/
finance, l’Institut d’études politiques de
Compensation Committee
Paris, France
• Master’s in applied economics, University Dentsply Sirona*, Member of the Board, Chair
of Paris-Dauphine, France of the Science & Technology Committee
• Bachelor’s in econometrics and political Church and Dwight Company*, Member
science, American University, USA of the Board, Chair of Governance
• Governance programs from Harvard Committee, and Member of the Compensation
Executive Education, INSEAD and the and Human Capital Committee
Stanford Graduate School of Business The Pennsylvania State University,
• Professional certificate IBM Biotechnology Advisory Board Chair
Cybersecurity Fundamentals The Pennsylvania State University, Corporate
Engagement Advisory Board Vice-Chair
Other activities and functions
Phoenix Group Holdings PLC*, London
(UK), Member of the Board and Chair of the
Remuneration Committee, Member of the
Risk and Sustainability Committees
Pernod Ricard SA*, Paris (FR), Member of
the Board and Chair of the Remuneration
Committee, Member of the Audit Committee
Bank Gutmann, Vienna (AU), privately owned,
Member of the Supervisory Board
Comgest, Paris (FR), Member of the Board
of Partners
AA Limited, Jersey (UK), Member of the Board
and Chair of Audit and Risk Committee
Premium Credit Limited, Member of the Board
and Chair of Audit and Risk Committee
* Listed company.

92 Corporate
governance

Board Director
What made you decide We understand that you

to become an SGS have visited laboratories to
board member? learn more about SGS, how
effectively did your visits
I feel truly aligned with SGS’s purpose to prepare you for your role
enable a better, safer and more interconnected and responsibilities?
world, and I share the same values with the
teams I have met across SGS. I believe my Calvin and Frankie designed a very effective
expertise in the consumer industry and Asian induction program for me. I met with the
markets means that I can offer a constructive global business unit leaders and visited the
and different perspective to the Board. local Life Science and I&E laboratories in
Switzerland, as well as the cosmetic and
How will your past softline labs in Shanghai.
experiences help to drive These trips helped me to understand how
SGS to a thriving future? the global growth strategy is being translated
into each local market’s strategic focus, and
As a practicing CEO, I keep up to date how our local management teams execute
with consumer trends, food supply chain with entrepreneurship, disciplined scientific
networks, sustainability practices, and I process and technical rigor. The chance to
manage enterprise level risks that involve speak with employees has given me a better
digitalization and cybersecurity. I believe understanding of the talent and culture in
my hands-on experience and customers’ the organization.
viewpoint can add value to the SGS
All of this has helped me to understand the
growth strategy.
opportunities and challenges that lie ahead
for SGS, making me, as a board member,
more insightful in the prioritization of issues
and resources.
What are your first

impressions of
SGS culture?
I can see that SGS is purposeful, we set high

standards of integrity and professionalism,
and are open-minded and action-oriented
to achieve results.

The Directors bring a wide range of experience The Board has concluded that its members 3.4. Elections and terms of office
and skills to the Board. They participate fully are independent on the basis of these The articles of association of SGS SA
in decisions on key issues facing the Group. criteria, with the exception of Shelby du provide that each member of the Board
Their combined expertise in the areas of Pasquier (whose tenure exceeds 12 yearly of Directors, and among them the Chair of
finance, commercial law, digital, cybersecurity, terms), Ian Gallienne and Paul Desmarais the Board of Directors and the members of
innovation, strategy and sustainability, and (both being representatives of a significant the Remuneration Committee, is elected
their respective positions of leadership in shareholder owning more than 10% of the annually by the shareholders for a period
various industrial sectors are important shares of the Company). ending at the next Annual General Meeting.
contributing factors to the successful None of the members of the Board of Each member of the Board is individually
governance of an organization of the size Directors exercise nor have they exercised elected. There is no limit to the number of
of the SGS Group. an executive role or operational management terms a Director may serve. The initial date
The Board undertakes a periodic review tasks for the Company or any entity of the of appointment of each board member is
of the Directors’ interests in which all Group. None of them have any significant indicated in Section 3.1.
potential or perceived conflicts of interests business connection with the Company
and issues relevant to their independence or the Group. 3.5. Internal organizational structure
are considered. In line with this review, the The remuneration of the members of The duties of the Board of Directors and its
Board has set a target stating that at least the Board of Directors is detailed in the committees are defined in the Company’s
60% of its members and members of its Remuneration report. The Chair of the articles of association and in its internal
committees will be independent and to plan Board, jointly with members of the Board regulations, which are reviewed periodically.
the succession of members accordingly. of Directors, assesses periodically the They set out all matters for which a decision
The Board of Directors considers the performance of the Board as a whole, by the Board of Directors is required.
following criteria to assess the independence of its committees and of each of its
In addition to the decisions required by
of its members: individual members.
Swiss company law, the Board of Directors
1. The director must not have been On the basis of this periodic assessment, approves the Group’s strategies and key
employed by the Company in an executive changes to the composition of the board business policies, investments, acquisitions,
capacity within the last five years membership are regularly proposed to the disposals and commitments in excess of
2. No family member of the director is Company’s Annual General Meeting. delegated limits.
employed or was employed during the This periodic performance evaluation is
3.5.1. Allocation of tasks within
past three years by the Group in any designed to ensure that the Board is always
the Board of Directors
management capacity in a position to provide an effective oversight
and leadership role to the Group. The Chair of the Board is elected by the
3. Neither the director or a family member Annual General Meeting. He or she plans
has received any payments from the and chairs the board meetings, defines
Group other than board remuneration 3.2. Other activities the agenda of the meetings and conducts
approved by the Annual General Meeting and vested interests the deliberations of the Board of Directors.
4. The director is not acting (and must Other activities and vested interests of All members of the Board of Directors
not be affiliated with a Company that the members of the Board of Directors participate in deliberations of the Board
is acting in material manner) as an are indicated in Section 3.1. and participate equally in its decisions.
advisor or consultant to the Company Within the limits permitted by law or by
or a member of the Company’s the articles of association, the Board of
3.3. Limits on external mandates
Senior Management Directors can decide to delegate certain of
The Company’s articles of association limit
5. The director must not be affiliated the number of mandates permissible to its tasks to standing or ad-hoc committees.
with a significant customer or supplier board members. With the exception of the members of the
of the Company Remuneration Committee, who are elected
These rules limit the number of mandates by the shareholders, the members of other
6. The director must have no personal that board members can accept to no more
services contract(s) with the Company committees are appointed by the Board.
than 10 board memberships in entities
or a member of the Company’s outside the Group, of which a maximum
Senior Management of five memberships may be in boards of
7. The director must not be affiliated companies whose shares are traded on a
with a not-for-profit entity that receives stock exchange. Mandates assumed at the
significant contributions request of a controlling entity do not count
from the Company towards the maxima defined in the articles
8. The director must not have been a partner of association.
or employee of the Company’s external In addition, the articles of association limit to
auditor during the past three years 10, the permissible participations in boards of
9. The director must not have any other association and other nonprofit organizations.
conflict of interest that the Board All board members have confirmed that they
determines to mean they cannot comply with these rules.
be considered independent
10. Any director who has served for more
than 12 consecutive terms is no longer
considered as independent

94 Corporate
governance
3.5.2. Members’ list, tasks and area of responsibility for each committee of the Board of Directors
The following chart describes the committees and their membership as at 31 December 2022:
Remuneration Audit Sustainability Nomination
Calvin Grieder
Sami Atiya
Ian Gallienne
Tobias Hartmann
Shelby R. du Pasquier
Kory Sorenson
Janet Vergis
Chair Member
Calvin Grieder, Chair of the Board of Audit Committee Sustainability Committee

Directors, attends the meetings of the The Audit Committee supports the Board of A dedicated Sustainability Committee was
Remuneration, Sustainability and Audit Directors in discharging its duties in relation established in 2022 in response to the growing
Committees, with a consultative vote. to financial reporting and internal controls. importance of sustainability to the Company
He chairs the Nomination Committee. Such duties include consideration of the and its stakeholders. The Committee plays
Each committee acts within terms of appropriateness of accounting policies, an important role in supporting the Company
reference established by the Board of the adequacy of internal controls, risk to develop its sustainability plans and act
Directors and set out in the internal management and regulatory compliance. accordingly. The Committee oversees
regulations of the Company. The minutes It exercises oversight over the major sustainability-related issues that may affect
of their meetings are available to risks identified by the Board of Directors. the Group and its customers, including
all Directors. This includes specifically the risks of reputational and non-financial risks. It is also
cybersecurity. It receives regular reports responsible for reviewing and approving the
Remuneration Committee
on cybersecurity incidents and measures non-financial information included in the
Members of the Remuneration Committee taken by management to address this risk. Integrated Annual Report.
are elected individually during the Annual The Audit Committee is assisted in this task
General Meeting, with the Chair of the Nomination Committee
by the Board digital advisory committee
Committee designated among them by which provides advice on matters of digital The Nomination Committee assists the
the Board of Directors. The Remuneration technology. The Audit Committee is also Board in the succession planning, selection
Committee is focused on matters of responsible for the supervision of the internal and nomination of candidates to positions
executive remuneration. The Remuneration and external auditors of the Group, each to the Board of Directors and to the senior
Committee acts in part in an advisory of which provides regular reports to the management (Operations Council) of
capacity to the Board, and in part as a committee on findings arising from their the Group.
decision-making body on matters that the work. The Committee reports regularly The Board of Directors and its committees
Board has delegated to the committee. to the Board of Directors on its findings. hold physical meetings as well as meetings
The Committee advises the Board of by videoconference. The table below does
Directors on matters regarding the not make any distinction between physical
remuneration of the members of the Board and remote meetings of the Board and
of Directors and management, and on its committees.
general policies relating to remuneration
applicable to the Group. The Committee
defines the conditions of share-based Meetings of Frequency Average duration
remuneration plans or other plans for the Board of Directors 6 times 5 hours
allocation of shares, issued from time to
time by the Company. The Committee Remuneration Committee 3 times 2.5 hours
reviews and approves the contractual Audit Committee 5 times 3 hours
terms of the employment of the CEO and Sustainability Committee 3 times 2.5 hours
the other members of the Management.
The Committee reviews regularly, at Nomination Committee 2 times 2.5 hours
least once a year, the compensation
of each member of the Operations
Council. The Committee drafts the
SGS Remuneration report.

Attendance at board and committee meetings
The Board of Directors expects its members to attend and participate actively in its meetings and meetings of its committees and has set
a minimum target of attendance at 75% of meetings. The chart below summarizes the attendance by each board member in 2022 at the
meetings of the Board and the respective standing committees.
Member Board meetings Remuneration Audit Sustainability Nomination

Calvin Grieder 6/6 3/3 5/5 3/3 2/2
Sami Atiya 2
6/6 2/2 2/2
Paul Desmarais, Jr. 6/6
Ian Gallienne 6/6 3/3 2/2
Tobias Hartmann 6/6 5/5
Shelby R. du Pasquier3 6/6 1/1
Kory Sorenson 6/6 3/3 5/5 3/3
Janet Vergis 6/6 5/5
Phyllis Ka Yan Cheung1 4/4 3/3
1. Elected to the Board in March 2022.

2. Elected Chair of Remuneration Committee in March 2022.
3. Stepped down from Remuneration Committee in March 2022.
3.5.3. Working methods of the 3.6. Definition of areas In accordance with the Company’s internal
Board and its committees of responsibility regulations, operational management of
The Board of Directors and each committee the Group, a function which the Board of
The Board of Directors is responsible for the
convene regularly scheduled meetings Directors has delegated, is the responsibility
ultimate direction of the Group. The Board
with additional meetings held as and of the Operations Council. The Operations
discharges all duties and responsibilities
when required, in person or by phone Council has the authority and responsibility
that are attributed to it by law. In particular,
conference. The Board and the committees to decide on all issues that are not attributed
the Board:
may pass resolutions by written consent. to the Board of Directors. In the event of
Each board member has the right to request • Leads and oversees the conduct, uncertainty on a particular issue regarding
that a meeting be held or that an item for management and supervision of the separation of responsibility between the
discussion and decision be included in the the Group Board of Directors and the management,
agenda of a meeting. • Determines the organization of the final decision is taken by the Chair
the Group of the Board.
Board and committee members receive
supporting documentation in advance of the • Assesses risks facing the business The Chair of the Board is regularly informed
meetings and are entitled to request further and reviews risk management and of the activities of the Operations Council
information from the Management in order mitigation policies by the CEO, the Chief Financial Officer
to assist them to prepare for the meetings. • Appoints and removes the Group’s CEO and the General Counsel.
The Board and each of the committees and other members of management The Operations Council is chaired by the
can request the attendance of members of • Defines the Group’s accounting and CEO and consists of those individuals
the management of the Group. The Board control principles entrusted with the operational management
and each of the committees are authorized • Decides on major acquisitions, of the Group’s activities, as follows:
to hire external professional advisors to investments and disposals • The Chief Operating Officers (COOs) are
assist them in matters within their sphere • Discusses and approves the Group’s responsible for operations in the Group’s
of responsibility. strategy, financial statements and seven regions (see Section 1.1.)
To be adopted, resolutions need a majority annual budgets • The Executive Vice Presidents (EVPs)
vote of the members of the Board or • Prepares the General Meetings are entrusted with the management
committee, with the Chair having a of Shareholders and implements and development of the Group’s five
casting vote. shareholders’ resolutions business divisions (see Section 1.1.)
The Board and its committees convene • Notifies the judicial authorities in the • The Senior Vice Presidents (SVPs)
as often as required. In principle the event of insolvency of the Company, represent the principal group support
Board meets at least four times a year, as required by Swiss law functions (Finance, Human Resources,
i.e. once every quarter. The Audit Committee Corporate Communication, Sustainability
meets at least three times a year, i.e. & Investor Relations and Legal
once before the publication of the annual and Compliance)
and half-year results, and once outside these The composition, role and organization of the
periods, to review and approve the scope of Operations Council are detailed in section 4.
internal and external audit. The Sustainability
Committee and the Remuneration
Committee meet at least once a year.

96 Corporate
governance
3.7. Information and control During board meetings, the Board is updated E. Other
instruments vis-à-vis the on important issues facing the Group. In addition, the main divisions have
The CEO, the Chief Financial Officer and specialized technical governance units,
management the General Counsel and Chief Compliance which ensure compliance with internally
A. Responsibility of the Board Officer (hereafter ‘senior management’) set quality standards and industry best
The Board of Directors has ultimate attend all of the Board of Directors meetings, practices. Formal procedures are in place
responsibility for the system of internal while other Operations Council members for both internal and external auditors to
controls established and maintained by attend from time to time to discuss matters report their findings and recommendations
the Group and for periodically reviewing under their direct responsibility. The Board of independently to the Board’s
its effectiveness. Internal controls are Directors meets regularly with the members Audit Committee.
intended to provide reasonable assurance of the Operations Council.
against financial misstatement and/or loss, F. Risk assessment
During board meetings or committee
and include the safeguarding of assets, The Board conducts on a yearly basis an
meetings, board members can request any
the maintenance of proper accounting assessment of the risks facing the Group.
information concerning the Group. The Board
records, the reliability of financial information This process is conducted with the active
reviews and monitors regularly and formally
and compliance with relevant legislation, participation and input of the management.
previous acquisitions and large investments
regulation and industry practice. Once identified, risks are assessed according
as well as the implementation of related
to their likelihood, severity and mitigation.
B. Governance framework Group strategies.
The Board deliberates on the adequacy of
The Group has an established governance The Group has a dedicated Internal audit
measures in place to mitigate and manage
framework, which is designed to oversee function, reporting to the Chair of the Board
risks and assigns responsibility to designated
its operations and assist the Company in and the Audit Committee, which assesses
managers for implementation of such
achieving its objectives. The main principles the effectiveness and appropriateness
measures. As part of this process, the
of this framework include the definition of of the Group’s risk management, internal
ownership of and accountability for identified
the role of the Board and its committees, an controls and governance processes as well
risks are approved by the Board.
organizational structure with documented as the reliability of internal financial and
delegated authority from the Board to operational information, and ensures that The implementation of such actions is
management, and procedures for the the standards and policies of the Group audited by internal audit. These findings are
approval of major investments, acquisitions are respected. Internal audit reviews and communicated to the Board of Directors
and other capital allocations. identifies areas of potential risk associated so that progress and identified risks can be
with the key business activities performed monitored objectively and independently
The CEO and the Chief Financial Officer from management.
by a particular office, highlights opportunities
attend the meetings of the Board of
for improvement and proposes constructive The risks identified and monitored by the
Directors and the Audit Committee.
control solutions to reduce any exposures. Board fall broadly into three categories:
The group controller and the head of the
internal audit function attend the meetings All key observations are communicated to first, environment risk, which includes
of the Audit Committee. the Operations Council and the Chair of the circumstances outside the Group’s direct
Board through formal and informal reports. sphere of influence, such as competition
The SVP of Human Resources attends the and economic or political landscape; second,
meetings of the Remuneration Committee, The Audit Committee is regularly
process risks that include risks linked to the
and Nomination Committee, and the informed about audits performed and
operations of the business, the management
General Counsel and Chief Compliance important findings, as well as the progress
of the Group and the integrity of its
Officer attends all meetings of the Board in implementing the agreed actions
reputation in the marketplace; and third,
of Directors and its committees. by management.
risks associated with information and
The other members of the Operations D. General Counsel and Chief decision-making.
Council and other members of management Compliance Officer For each of the risk categories and within
only participate in the Board and committee Furthermore, the Group has a compliance these categories, for each significant
meetings by invitation. The Board and each function, headed by the General Counsel risk identified, the Board deliberates on
of its committees meet from time to time and Chief Compliance Officer, who reports proposed mitigation, risk avoidance or risk
in private sessions, outside of the presence to the Audit Committee and the Board transfer measures and approves action
of management. of Directors and has direct access to the plans designed to control such risks.
C. Information to the Board Chair of the Board. The Board receives regular updates on
The Board of Directors is constantly informed The compliance function supports the the implementation of risks mitigation
about the operational and financial results implementation of a compliance program measures and their effectiveness is tested
of the Group by way of detailed monthly based on the SGS code of integrity, available by Internal Audit which reports to the Board,
management reports, which describe the in 30 languages. The goal of the program respectively the Audit Committee.
performance of the Group and its divisions. is to ensure that the highest standards of
integrity are applied to all of the Group’s
During each board meeting, the CEO and
activities worldwide in accordance with
the Chief Financial Officer present a report
international best practices. The General
to the Board of Directors on the operations
Counsel and Chief Compliance Officer
and financial results, with an analysis of
reports violations of compliance rules every
deviations from prior year and from current
semester to the Sustainability Committee.
financial targets.
The Committee monitors disciplinary
actions taken and the implementation
of corrective actions.

4. Operations Council Olivier Merkt Fabrice Egloff

Nationality: Swiss Nationality: French
The Operations Council (as defined in Year of Birth: 1962 Year of Birth: 1969
Section 1.1.) meets on a regular basis,
in principle at least five times a year. Function in SGS Function in SGS
Between meetings, it holds regular phone • Chief Compliance Officer • COO, Africa & Western Europe
conferences and may make decisions Joined SGS in 2001 Joined SGS in 1995
on such calls or by electronic voting.
During part of 2022, travel restrictions and Education Education
limitations have limited the ability of the • Doctorate in Law, admitted to the bar • Master of Business Administration
Operations Council to meet physically. in Switzerland in International Business Affairs
Meetings were held in part with the
assistance of video conference. Previous responsibilities Previous responsibilities
2006-2008: VP, Corporate Development 2017-2019: COO Africa
4.1. Members of the 2001-2006: Senior Counsel 2009-2017: Managing Director, France
Operations Council 2004-2008: Managing Director,
Members of the Operations Council bring to Teymur Abasov Hong Kong
the Group years of experience and expertise Nationality: Azerbaijani
in their respective fields. They come from a Luis Felipe Elias
Year of Birth: 1972
wide range of backgrounds that reflects the Nationality: Peruvian
multiple aspects of the Group. The Group Function in SGS Year of Birth: 1959
strives to promote talent internally and
• COO, Eastern Europe & Middle East
encourages women to assume senior Joined SGS in 1994 Function in SGS
leadership positions. The members of the
• COO, Latin America
Operations Council at 31 December 2022 Education Joined SGS in 2004
were as follows: • Degree in Electrical Engineering
Education
Frankie Ng Previous responsibilities • Industrial Engineering Degree and MBA
Nationality: Swiss, Chinese 2006-2007: Managing Director, Kazakhstan
Year of Birth: 1966 and Caspian Sub-Region Previous responsibilities
2004-2006: Managing Director, Azerbaijan 2012-2018: Managing Director,
Function in SGS and Georgia Ecuador and Peru
• Chief Executive Officer 2003-2004: Managing Director, Georgia 2004-2012: Deputy Managing
Joined SGS in 1994 Director, Peru
Olivier Coppey
Education Derick Govender
Nationality: Swiss
• BA in Economics and Nationality: South African
Electronics Engineering Year of Birth: 1972
Year of Birth: 1970
Previous responsibilities Function in SGS
2011-2015: EVP, Industrial Services • EVP, Health & Nutrition Function in SGS
Joined SGS in 1994 • EVP, Natural Resources
2005-2011: EVP, Consumer Testing Services Joined SGS in 2002
2002-2004: Managing Director, US Testing Education
• MSc Economics Education
Other activities • Diploma in Analytical Chemistry
Board Member and member of the Remuneration Previous responsibilities • Postgraduate in Business Management
Committee at Logitech 2015-2020: EVP, Agriculture Food and Life
2013-2015: EVP, Agriculture Previous responsibilities
Dominik de Daniel 2015-2020: EVP Minerals Services
2009-2013: Vice President Seed and
Nationality: Swiss, German Crop, Agricultural Services 2014-2015: Minerals Manager, Chile
Year of Birth: 1975 2010-2014: VP Minerals, Africa
Steven Du
Function in SGS Nationality: Chinese
• Chief Financial Officer
Joined SGS in 2019
Year of Birth: 1972
Education Function in SGS

• COO North East Asia
• Degree in Banking
Joined SGS in 1999
• CEFA Investment Analyst
Education
Previous responsibilities
• MSc Logistics & Supply Chain Management
2015-2018: CFO and Chief Operating Officer, IWG
plc. UK, the global leader for flexible workspace
2006-2015: CFO Adecco Group, Switzerland
2019-Jul 2021: Managing Director
Mainland China and Hong Kong SAR
2016-2019: Managing Director Mainland China
2014-2016: Managing Director Vietnam

98 Corporate
governance
Jessica Sun Stephen Nolan Wim Van Loon

Nationality: American Nationality: American, Irish Nationality: Belgian
Year of Birth: 1960 Year of Birth: 1966
Function in SGS
• SVP, Human Resources Function in SGS Function in SGS
Joined SGS in January 2022 • COO North America, since January 2021 • COO Northern & Central Europe
Joined SGS in 2019 Joined SGS in 1989
Education
• Bachelor’s degree in Law from the China Education Education
University of Politics & Law Science • B.Comm in Finance • Engineering degree in Industrial Electro
• EMBA from the Chinese Europe International Mechanic and Master’s degree in
Business School (CEIBS) Previous responsibilities Business Management
2013-2018: Hudson Global, USA Chief Executive
Previous responsibilities Officer/Chief Financial Officer Previous responsibilities
2016-2021: Haier, USA, CHRO Global Appliances 2004-2012: Managing Director of Adecco 2018-2020: EVP, Industrial Services
2013-2016: Mallinckrodt Pharmaceuticals, VP of North America 2015-2018: Managing Director, Benelux
Human Resources, International Mallinckrodt 2011-2015: Executive Director, Industrial Services,
2012-2013: Eaton Corporation, USA, HR Director, Benelux
Toby Reeks
Global CET Business 2003-2015: Business Manager for
Nationality: British
Industrial, Minerals and Consumer
Year of Birth: 1976 Testing Services, Benelux
Charles Ly Wa Hoi
Nationality: French Function in SGS
Year of Birth: 1966 • SVP, Corporate Communications, 4.2. Other activities and
Sustainability & Investor Relations vested interests
Function in SGS Joined SGS in 2018 The following list presents all material
• EVP, Connectivity & Products activities in governing and supervisory
Initially joined SGS in 1992, rejoined Education boards, management positions and
in 2008 • BA in Economics consultancy functions, official tenures and
political positions held by each member of
Education Previous responsibilities the Operations Council outside the Group,
• Degree in Electronics Engineering 2013-2018: Executive Director, both in Switzerland and abroad.
from ENSEIRB-MATMECA Morgan Stanley
2011-2013: Director, Merrill Lynch
Previous responsibilities Derick Govender
2005-2011: Vice President, Merrill Lynch
2018-2020: EVP Consumer and Retail Services
2016-2018: Vice President of Retail Solutions and
Member of IPMI (International Precious
European Business Development, Consumer Malcolm Reid Metal Institute)
and Retail Nationality: British
2013-2016: Global Head of Materials Year of Birth: 1963 4.3. Changes in the
and Manufacturing, Industrial Services Operations Council
2009-2013: Vice President of Strategic Global Function in SGS During 2022 Siddi Wouters, SVP Digital
Accounts, Consumer Testing Services • COO, South East Asia & Pacific & Innovation left the Operations Council
Joined SGS in 1987
and the Group. Biographical information on
Jeffrey McDonald former members of the Operations Council
Education
Nationality: Australian, American may be found in prior years’ Corporate
• BSc Chemistry
Year of Birth: 1964 Governance reports.
Function in SGS 2012-2015: EVP, Consumer Testing Services 4.4. Limits on external mandates
• EVP, Knowledge The articles of association of the Company
2007-2011: EVP, Systems and
Joined SGS in 1995 limit the number of mandates permissible to
Services Certification
2005-2007: Managing Director, Australia
members of the Operations Council, to no
Education more than four board memberships in entities
• Postgraduate Diploma in Education outside the Group, of which a maximum
Alim Saidov of one membership may be in the board of
Previous responsibilities Nationality: Azerbaijani/Canadian companies whose shares are traded on a
2015-2020: EVP Certification Year of Birth: 1964 stock exchange. Mandates assumed at the
and Business Enhancement request of a controlling entity do not count
2007-2015: COO, North America Function in SGS towards the maxima defined in the articles
2004-2007: EVP, Systems and • EVP, Industries & Environment of association.
Services Certification Joined SGS in 1993
2003: Global Project Manager,
Systems and Services Certification Education
• PhD in Science
2013-2020: EVP, Oil, Gas and Chemicals
2007-2013: EVP, Oil, Gas and Chemicals Services
and Environmental Services
2005-2007: COO, Eastern Europe and Middle East
2004: COO, North America and
Managing Director, Canada
In addition, the articles of association set limits 5.2.2. Rules on loans, credit facilities Shareholders can give specific or generic
to participations in boards of association and and post-employment benefits voting instructions to the independent proxy
other not-for-profit organizations to no more Loans granted to members of the governing on all matters on the agenda of the General
than 10 such memberships. bodies of the Company may not exceed one Meeting of Shareholders. These instructions
year of remuneration and must be granted at can be issued in written form, or by
4.5. Management contracts market conditions. As at 31 December 2022 electronic transmission.
The Company is not party to any management (same as at 31 December 2021), no loan or The voting of resolutions by electronic votes
contract delegating management tasks to advance is granted by the Group to members is authorized by the articles of association,
companies or individuals outside the Group. of the Operations Council. within the modalities defined by the Board
of Directors.
5.2.3. Rules on vote on pay
5. Compensation, The Annual General Meeting approves the
6.2. Statutory quorums
following matters related to the compensation
shareholdings and loans of the Board and Operations Council: The General Meeting of Shareholders can
• It approves the fixed fees payable to the validly deliberate regardless of the number
5.1. Content and method of of shares represented at the meeting.
determining the compensation Board of Directors until the next Annual
General Meeting Resolutions are adopted by the absolute
and the shareholding programs majority of votes cast unless Swiss company
• It approves in advance a prospective
The Group’s overriding compensation law mandates a special majority.
maximum fixed remuneration to the
policies are defined by the Board of Directors.
Operations Council during the next
The objectives of these policies are twofold: 6.3. Convocation of General
financial year
1) to attract and retain the best talent available
• It approves the total aggregate amount Meetings of Shareholders
in the industry, and 2) to motivate employees
payable to the Operations Council for the The rules regarding the convocation of General
and managers to create and protect value
performance-related annual bonus related Meetings of Shareholders are in accordance
for shareholders by generating long-term
to the prior year with Swiss company law.
sustainable financial achievements.
• It approves the maximum amount payable
In line with these principles, board members
under Long-Term Incentive plans to be 6.4. Inclusion of items
are entitled to a fixed fee, which takes
introduced by the Company on the agenda
into account their level of responsibility.
• Resolutions of such matters are binding The agenda of the Annual General Meeting
Members of the Operations Council receive
to the Board of Directors. In addition, the is issued by the Board of Directors.
a fixed remuneration and are entitled to
Annual General Meeting is invited to cast a Shareholders representing shares with a
a performance-related annual bonus and
non-binding vote on the Remuneration report minimum par value of CHF 50 000 may
a Long-Term Incentive plan.
that describes the Company’s remunerations request the inclusion of an item on the agenda
The Annual General Meeting approves the policies. This allows shareholders to express
compensation payable to the Board and of the Annual General Meeting, provided that
a view on the overall policies of the Group such a request reaches the Company at least
the Operations Council. The rules on the in relation to remuneration
vote on pay applicable in the Group are 40 days prior to the meeting.
explained below.
The ultimate responsibility for defining
6. Shareholders’ 6.5. Registration in the
remuneration policies and deciding on all participation rights share register
matters relating to remuneration rests with The Company does not impose any deadline
the Board of Directors, subject to decisions All registered shareholders receive a copy
for registering shares prior to an Annual General
that require binding resolutions of the Annual of the half-year and full-year results upon the
Meeting. However, a technical notice of two
General Meeting. The Board of Directors publication of such results by the Company.
business days is required.
is assisted in its work by a Remuneration They can request a copy of the Company’s
Committee, which is elected by the Annual annual report and are personally invited to
General Meeting. attend the Annual General Meeting. 7. Change of control
and defense measures
5.2. Rules on approbation by the 6.1. Voting rights and
No restriction on changes of control is included
annual shareholders’ meeting of representation restrictions
in the Company’s articles of association.
All registered shareholders can attend the
executive pay
General Meetings of Shareholders and
5.2.1. Rules on performance-related pay exercise their right to vote. A shareholder may 7.1. Duty to make an offer
and allocation of equity-linked instruments also elect to grant power of attorney to an In the absence of any specific rules in the
The Company’s articles of association define independent proxy appointed by the Company Company’s articles of association, any investor
the principles of the variable remuneration or to any other registered shareholder. or group of investors acquiring more than
and the allocation of shares or equity- There are no voting restrictions, subject 33.3% of the shares and voting rights of
linked instruments to the members of the to the exclusion of nominee shareholders the Company has the duty to make a public
Operations Council. Please refer to the representing undisclosed principals, as offer in compliance with the applicable
Remuneration report pages 105 to 107 detailed in Section 2.6. Swiss takeover rules.
for a description of the Company’s rules
in the matter. 6.1.2. Rules on instructions to the 7.2. Clauses on change of control
independent proxy and electronic
In the event of changes in composition of There are no general plans or standard
participation in the annual
the Operations Council occurring after the agreements offering specific protection to
shareholders’ meeting
approval by the Annual General Meeting of board members, senior management or
the fixed remuneration of the executive team, Shareholders have the opportunity to give employees of the Group in the event of a
the Board is authorized to increase up to a general or specific voting instructions to the change of control, subject to the standard
maximum of 25% the amount authorized independent proxy, who is elected by the rules regarding termination of employment.
by the shareholders for that purpose. General Meeting of Shareholders.

100 Corporate
governance
8. Auditors When evaluating the performance of the

auditors, the Audit Committee assesses the
9. Information policy
8.1. Duration of the mandate and effectiveness of the audit based on Swiss The policy of the Group is to provide individual
term of office of the lead auditor Law, their understanding of the business and institutional investors, directly or through
PwC was elected as auditor of the Company of the Group and how matters of significant financial analysts, business journalists,
and the SGS Group. The auditors of the importance for the Group internal control and investment consultants (financial community)
Company are subject to re-election at the financial reporting are identified, reported and employees with financial and business
Annual General Meeting every year. PwC and resolved. The Audit Committee reviews information in a consistent, broad, timely and
with Guillaume Nayet as the lead auditor have also how the Group auditors interact with the transparent manner.
audited the 2022 Group financial statements. component audit firms in charge of auditing The Group website has a section fully
the main subsidiaries of the Group, and the dedicated to investor relations, where all
The Company requires the lead auditor to relevance and timeliness of issuance of
be changed at the latest after completion financial information and presentations are
statutory audits and management letters. available. This includes an updated version
of five annual audit cycles, whereas Swiss
company law imposes a maximum period The Audit Committee places a great emphasis of the articles of association, current
of seven years. on the independence of the external auditors, information on share buyback programs
and on the absence of conflict of interests, and minutes of shareholders’ meetings.
The Audit Committee reviews annually the both at the Group level and at the level of SGS meets regularly with institutional
desirability to renew the annual mandate of individual subsidiaries. investors, holds results presentations,
its external auditors before proposing to the roadshows and presentations at broker-
Board and the Annual General Meeting the It reviews carefully the type of other services
which are provided by the auditors, in sponsored country or industry conferences,
re-election of the auditors. and attends one-on-one meetings.
addition to the audit, to ensure that such
ancillary services could not endanger the The Group publishes consolidated half-year
8.2. Audit fees independence of the audits. The audit unaudited and yearly audited results in print
Total audit fees paid to the auditors for Committee has issued a policy on non- and online formats. The annual report is
the audit of the Company and the Group audit services which define restrictively the published in English and is available upon
financial statements in 2022 amounted type of admissible services excluding from order from the Group’s website. The current
to CHF 6.1 million (2021: CHF 6.2 million). the admissible scope most tax advisory list of publication dates is available on the
services and services related to prospective Group’s website. The Group acknowledges
8.3. Additional fees acquisitions and disposal. the directives on the independence of
An aggregate amount of CHF 1 million The policy also sets an approval process financial research issued by the Swiss Bankers
was paid to PWC (2021: CHF 1 million) for requiring prior approval of the Audit Association. In addition, the Group complies
other professional services, unrelated to the Committee for any assignment for non- with rules regarding information and reporting
statutory audit activity, mainly composed audit services above defined thresholds. of the Federal Act on stock exchange and
of tax compliance services, non-statutory securities trading, and the ordinance on stock
The audit fees are approved on the basis of exchanges and securities trading. The address
and other assurance services. a negotiated budget agreed with the Group of SGS’s main registered office and contact
auditors taking into account the complexity of details by phone and email can be found
8.4. Information instruments the audit, the structure of the Group and its on page 236 of the annual report.
pertaining to the external audit internal control systems and the responsibility
of the auditors. The duties of the Committee
The Audit Committee is responsible for
evaluating the external auditor on behalf of the
include consideration of the audit plan, regular 10. Quiet periods
assessment of the performance of the auditor
Board of Directors and conducts assessments Members of the Operations Council and
and approval of audit fees on the basis of the
of the audit services provided to the Group other employees having access to material
amount of work required in order to perform
during its regular meetings. non-public information are banned from
the audit.
It meets with the auditor at least three times trading in SGS shares during quiet periods,
The Audit Committee reviews with the Group preceding publication of yearly and half
per year, including private sessions without
auditors the significant financial statement yearly results.
the presence of management.
risk areas arising from the audit, including the
In 2022, the Audit Committee met 5 times These periods are set between December 31
key audit matters referred to in the statutory
with the external auditors. until and including the date of publication of
auditor’s report.
the full year results and between June 30
The Committee considers and approves the The auditor regularly presents its findings, until and including the date of the publication
proposed audit plan, conducts assessment of both during the deliberations of the Audit of the half year results.
the performance of the auditor and approves Committee and in written reports, to the
audit fees on the basis of the amount of work In addition to these fixed quiet periods, the
attention of the Board of Directors that
required in order to perform the audit. Company institutes additional trading bans
summarize key findings.
from time to time, prior to the release of
The Audit Committee reviews with the Group material non-public information, such as major
auditors the significant financial statement acquisitions or disposals, or trading updates.
risk areas arising from the audit, including the
key audit matters referred to in the statutory
auditor’s report.

Investor relations We ensure clear, transparent and consistent

at SGS information to support the financial community
to make informed decisions.
Investor engagements by region

Fostering transparency and trust
Our approach
Our team leads the communication with
current and prospective investors, analysts
and rating agencies. Our aim is to provide
clear and transparent information to the
financial community supporting investors
to make informed decisions.
We engage with analysts, existing and new
investors at our investor days, roadshows,
conferences globally and on an ad-hoc basis. We organized tours of Gunesli and Dilovasi
Over the course of 2022, we attended over laboratories enabling participants to visit
20 investor conferences and had a total of our facilities, spend time with our local
over 470 touchpoints (a +10% year on year). operational management teams and get
Americas 30% a deeper, more tangible understanding of
Investor days our business.
Europe, Africa and Middle East 59%
Our Investor Days gives analysts and The event was well-attended, with over 30
Rest of the World 11% investors the opportunity to visit our facilities analysts and investors staying for the entire
in the field, SGS and TIC industry themes duration of the trip and over 25% of our
and concerns, and facilitate access to the shareholder base was represented.
Institutional investors by geography local management team and members
of our Operations Council in an open and Our investors
transparent way. Our shareholder base largely consists
Following a pause during the pandemic, of long-term investors. Over 15% of our
when we held the virtual external institutional investors are based in the
presentation of our 2020-23 plan, we United Kingdom and in Switzerland while
hosted our annual investor days in Istanbul. approximately over 10% are based in the
During this two-day event, we updated the United States. Please see the chart below
audience on progress made towards our full the full breakdown of our investor base.
2023 plan and addressed the key themes How to connect with us
of deglobalization, sustainability solutions
More information is available on our Investor
and digitalization.
Relations webpage on sgs.com.
United Kingdom 32%
Switzerland 24%
United States 21%
Other 23%
IR results in annual investors survey FY22 investor engagement feedback
Top 3 Top 2 What was your overall impression of the meeting?

4.7
for best IR program
for the Business
& Employment
for best analyst/
investor event (in
both the buyside
Do you feel you understand our strategy?
4.5
Services sector in
both votes1
and combined vote) How confident are you that SGS’s strategy will
accelerate organic growth? 3.8
How clear are our capital allocation priorities?
4.1
Do you view sustainability as integral to our strategy
and culture? 4.1
1. There are two separate votes – one from investors
and one combined with analysts.
Average rating 1 – negative to 5 – very positive
102 Remuneration
report
We are
driving fair and
equitable remuneration
policies and practices
aligned with our
sustainability ambitions.
The SGS Remuneration report provides an
overview of the SGS remuneration model,
its principles and programs and the related
governance framework. The report also includes
details on the remuneration of the Board
of Directors and of the Operations Council
related to the 2022 business year. The SGS
Remuneration report has been prepared in
compliance with the ordinance against excessive
compensation (OaEC) at listed joint-stock
companies, in effect as of 1 January 2014, the
Swiss Code of Best Practice for Corporate
Governance of economiesuisse, revised on
29 February 2016, and the Swiss Exchange
(SIX) Directive on Information relating to
Corporate Governance, revised on 18 June
2021, and according to the articles of association
of SGS SA, as approved by the shareholders at
the Annual General Meeting in 2015.

1. Introduction by 104 4. Remuneration awarded 115

the Remuneration to the Board Of Directors
Committee
5. Remuneration awarded 117

2. Remuneration 105 to the Operations
policy and principles Council members
2.1. Remuneration general principles 105 5.1. Fixed remuneration 117

2.2. Remuneration policy for 105 5.2. Short-term variable remuneration 118
the executive management 5.3. Long-term variable remuneration 120
2.3. Remuneration governance 105 5.4. Total remuneration 121
5.5. Remuneration mix 122
2.3.1. Remuneration 106
5.6. Other compensation elements 122
committee
2.3.2. Shareholders’ 106 5.6.1. Severance payments 122
engagement 5.6.2. Other compensation 122
to members or former
members of governing
bodies
3. Remuneration model 107 5.6.3. Loans to members or 122
former members of
governing bodies
3.1. Structure of remuneration 107
of the Board of Directors
3.2. Structure of remuneration 108
of the Operations Council
Report of the 123
3.2.1. Fixed remuneration: 108 statutory auditor
annual base salary
3.2.2. Fixed remuneration: 108
benefits
3.2.3. Short-term variable 108
remuneration
3.2.4. Long-term variable 112
remuneration
3.2.5. Remuneration mix 114
3.2.6. Shareholding ownership 114
guidelines
3.2.7. Employment contracts 114
3.2.8. Timeline of remuneration 115

104 Remuneration
report
1. Introduction by the Since 2015, the Board of Directors has implemented the
consultative vote on the remuneration report and the binding
Remuneration Committee vote on compensation amounts at the Annual General Meeting.
The Committee received significant support in its activities and
On behalf of the Remuneration Committee, I am pleased to present direction through positive votes at the Annual General Meeting
the SGS Remuneration report for the year ended in December 2022. 2022, and will continue with the same ‘say-on-pay’ vote structure
I would like to start by thanking Shelby du Pasquier for his valuable at the forthcoming Annual General Meeting 2023:
contribution during his tenure as Chair of the Remuneration • Consultative vote on the remuneration report
Committee and express my sincere gratitude for his support and
advice since I took over the role. I would also like to thank my • Binding vote on the prospective maximum remuneration amount
colleagues for their engagement throughout the year; there were of the Board of Directors until the next Annual General Meeting
many challenges to overcome and accompanying opportunities • Binding vote on the retrospective short-term variable remuneration
to be seized. amount of the Operations Council members for the business
Our aim going forward is to further strengthen our attractiveness year 2022
and retention power towards our existing and future talents, driving • Binding vote on the prospective maximum fixed remuneration
fair and equitable remuneration policies and practices aligned with amount of the Operations Council members for 2024
our sustainability ambitions, our diversity, inclusion and well-being • Binding vote on the prospective maximum value of the grants
initiatives, and our purpose of enabling a better, safer and more awarded under the long-term incentive plan to the Operations
interconnected world. Council members in 2023
During 2022 the Committee reviewed the remuneration of the
On the following pages, you will find detailed information about
Board of Director members, with two main drivers: from one side,
our remuneration model, its principles and programs, and the
align their remuneration level to the prevalent market practices of
remuneration awarded to the Board of Directors and the Operations
the Swiss listed companies of similar size, and from the other side
Council related to the business year 2022. I hope that you find
deliver part of the remuneration in restricted shares, in support of the
this report informative. The Committee has sought to promote a
newly introduced shareholding requirement. Details on the Board
remuneration environment that is fully aligned with the purpose and
of Directors’ new remuneration levels and vehicle, and shareholding
the strategy of the group, its short-term and long-term performance,
requirement, are disclosed in section 3.1. and 4. of this report.
the interests of our shareholders, and relevant market practices
In 2022 the transition of the long-term incentive for Operations and trends.
Council members and selected senior managers, from one grant
I look forward to your support on the 2022 annual remuneration
every three years to a system with annual grants, was completed
report at the Annual General Meeting.
and, after the 2021 transition plan, the first annual plan was granted.
Details on the 2022 grant are disclosed in section 5.3. of this report.
The Committee reviewed and approved the contractual terms and Sami Atiya
conditions, including remuneration, of one new member of the Chair of the Remuneration Committee
Operations Council, appointed during 2022; the changes in the
composition of the Operations Council are disclosed in section 4.
of the Governance Report.
The table below summarizes the votes of the Annual General Meeting on the remuneration matters in the last five years.
(% of votes for) 2018 2019 2020 2021 2022
Consultative vote on the remuneration report 89.79 94.50 93.05 92.70 83.94
Binding vote on the prospective maximum remuneration amount
of the Board of Directors 98.72 98.09 98.13 95.51 97.81
Binding vote on the prospective maximum fixed remuneration amount
of the Operations Council members 75.61 80.28 95.58 94.37 96.11
Binding vote on the retrospective short-term variable remuneration amount
of the Operations Council members 95.97 97.17 97.39 96.95 97.02
Binding vote on the value of the grants awarded under the long-term
incentive plan to the Operations Council members1 96.63 – – 96.40 96.88
1. Until 2020, the SGS Long-Term Incentive plan provided a grant every three years.

2. Remuneration policy and principles In line with its anti-discrimination and dignity at work policy, SGS is
committed to promoting equal opportunity for all employees and
an environment in which all members of the workplace treat all
2.1. Remuneration general principles individuals both in the workplace and in other work-related settings
The general principles of remuneration of the members of the Board at all times with dignity, consideration and respect.
of Directors and the members of the Operations Council are defined All employment related decisions, including compensation, beneﬁts
in the articles of association (Art. 28, Art. 29, Art. 30, Art. 31 and Art. and promotions, will be solely made on the basis of an individual’s
32; link to the SGS articles of association: https://www.sgs.com/ qualifications, performance and behavior or other legitimate business
en/-/media/sgscorp/documents/corporate/sgs-legal-status-en-fr.cdn. considerations. SGS does not tolerate any discriminatory practices,
en.pdf). in particular based on age, civil partnership, disability, ethnicity, family
The remuneration of the members of the Board of Directors is status, gender, gender identity, ideological views, marital status,
defined with two main objectives: (i) to compensate their activities nationality, political affiliation, pregnancy, religion, sexual orientation,
and responsibilities as the highest governing body of the group and social origin or any other status that is protected as a matter of
their participation in the committees established within the Board local law.
of Directors, and (ii) to guarantee their independence in exercising Method of determination of remuneration levels – benchmarking
their supervisory duties towards the executive management.
SGS is a global company, operating in a broad range of sectors;
The remuneration of the members of the Operations Council is the determination of the remuneration levels of the Operations
defined with two main objectives: (i) to attract and retain the best Council members must consider both global and local practices.
talents available in the industry, and (ii) to motivate them to create We periodically compare our compensation practices with those
and protect long-term sustainable value for our shareholders of other similar global organizations:
and society.
• Competitors in the testing, inspection and certification industry:
The members of the Board of Directors receive a fixed ALS, Applus+, Bureau Veritas, Eurofins, Intertek, Mistras, Team
remuneration only. (the peer group of companies considered for the performance
The members of the Operations Council receive a fixed conditions of the long-term incentive plan, see section 3.2.4.)
remuneration and a variable remuneration linked to short-term • The SMI and SMIM-listed companies not belonging to the
and long-term results. capital markets, insurance and pharmaceuticals sectors of
Remuneration Board of Directors Operations Council
comparable size.
component (non-executive) (executive)
The elements of executive remuneration benchmarked include
Fixed remuneration annual base salary, other fixed remuneration elements, short-
term and long-term incentives, and benefits. To ensure proper
Short-term variable benchmarking, we use a proprietary job evaluation methodology.
remuneration Since half of our Operations Council members are based outside
Long-term variable Switzerland, we use information published by reputable data
remuneration providers, including Mercer and Willis Towers Watson, related
to both the Swiss market and the other markets where the
Operations Council members are based.
2.2. Remuneration policy for As a reference point, SGS targets the median compensation level
the executive management of the peer group.
The company’s remuneration policy applicable to the executive The company has not used external paid advisors to perform salary
management (Operations Council members) is defined by the Board benchmarks since 2015, relying instead on available market data.
of Directors in support of the company’s purpose of adding value No third-party services provider was engaged to perform such
to society by enabling a better, safer and more interconnected benchmark in 2022.
world, its business strategy of profitable growth, and in line with its
business principles: integrity, health, safety & environment, quality
2.3. Remuneration governance
& professionalism, respect, sustainability, leadership & innovation.
The Annual General Meeting approves every year the maximum
The remuneration system for the Operations Council members aggregate amount of remuneration of the Board of Directors.
operates according to four main principles: Within that limit, the Board of Directors is responsible for determining
• Market competitiveness the remuneration of the Chair and the directors. It also decides on
the remuneration and terms of employment of the CEO. In addition,
– Remuneration levels are in line with competitive
the Board of Directors defines general executive remuneration
market practices
policies, including the implementation and terms and conditions of
• Internal equity long-term incentive plans, as well as the financial targets relevant
to any incentive plan.
– Remuneration programs link remuneration to the level of
responsibility and the skillset required to perform the job
• Pay for performance
– A substantial portion of remuneration is directly linked to
business and individual performance
• Long-term value creation and alignment to shareholders’ interests
– Part of remuneration is delivered in equity subject to a multi-year
vesting period

106 Remuneration
report
2.3.1. Remuneration Committee The following chart summarizes the authorization levels for the main
The Board of Directors is assisted in its work by a Remuneration decisions relating to the compensation of the Board of Directors and
Committee (“the Committee”), which consists of non-executive the Operations Council members. When reviewing and deciding
Directors. The Committee acts in part in an advisory capacity on executive remuneration policies, the Committee and the Board
to the Board of Directors, and in part as a decision-making body of Directors have access to group human resources staff and may
on matters that the Board of Directors has delegated to the use third-party consultants that specialize in compensation matters.
Committee. The Committee reviews regularly, at least once In 2022, neither the committee nor the Board of Directors had
a year, the compensation of each member of the Operations recourse to such external advisors.
Council (including the CEO) and decides on all matters relating
to the remuneration of these executives.
Remuneration Board of Annual General

Subject matter CEO Committee Directors Meeting
Aggregate remuneration amount of the Board of Directors

Individual remuneration of the members of the Board of Directors
including the Chair of the Board
Aggregate fixed remuneration amount of the Operations Council
Aggregate short-term variable remuneration amount of the
Operations Council
Setting of annual financial targets for short-term variable
remuneration of Operations Council members
Establishment of long-term incentive plans
Aggregate value of the grants awarded under the long-term
incentive plan to Operations Council members
Individual remuneration of the CEO
Individual remuneration of the Operations Council members
Remuneration report
Recommendation Approval Binding Vote Consultative Vote
The following directors served on the committee during their 2.3.2. Shareholders’ engagement
mandate from Annual General Meeting 2022 to 2023: As has been the case since the 2015 Annual General Meeting,
• Sami Atiya (Chair) the company will continue to submit the remuneration report to
a consultative shareholders’ vote at the Annual General Meeting,
• Ian Gallienne
so that shareholders have an opportunity to express their opinion
• Kory Sorenson about our remuneration model.
In 2022, the Committee met three times, attended by all members, In addition, as required by the ordinance against excessive
and handled several matters pertaining to remuneration outside compensation (OaEC) for Swiss corporations, the aggregate
scheduled meetings. The Chair of the Remuneration Committee amounts of remuneration to be paid to members of the Board of
reports to the Board of Directors after each meeting on the activities Directors and the Operations Council are subject to the approval
of the Committee. The minutes of the committee meetings are of the shareholders in form of a binding vote on remuneration.
available to the members of the Board of Directors. Generally, The procedure on the vote is defined in the articles of association
the Chair of the Board attends the meetings of the Committee, and foresees separate votes on (i) the maximum remuneration of
except when matters pertaining to his own compensation are the Board of Directors for the period until the next Annual General
being discussed. Meeting, (ii) the maximum fixed remuneration of the Operations
Selected members of the Operations Council, the CEO, the senior Council for the next calendar year, (iii) the variable remuneration
vice president of human resources and the global head of total awarded to the Operations Council in respect of the previous
reward may be asked to attend the meetings in an advisory capacity. calendar year, and (iv) the maximum amount to be granted to the
They do not attend the meeting when their own compensation Operations Council under any long-term incentive plan during the
or performance are being discussed. current calendar year.

A summary of the shareholders’ votes on remuneration is described in the chart below:
Shareholders’ votes on remuneration summary
Shareholders’ vote
2022 2023 2024
at the 2023 AGM
Consultative vote on Remuneration

remuneration report report
Binding vote on maximum

remuneration of the Board Remuneration
of Directors

Fixed
fixed remuneration of
remuneration
the Operations Council
Binding vote on variable

Short-term variable
remuneration of the
remuneration
Operations Council

value of the grants awarded
Long-term
under any long-term incentive
incentive grant
plan to the Operations
Council
AGM – Annual General Meeting AGM 2023 AGM 2024

The binding votes on the aggregate compensation amounts combined with a consultative vote on the remuneration report reflect our true
commitment to provide our shareholders with a far-reaching ‘say-on-pay’.
3. Remuneration model For the mandate Annual General Meeting 2022 to 2023, the Board of
Directors reviewed the remuneration of its members, and defined the
following changes:
3.1. Structure of remuneration of the Board of Directors • An increase of the board retainer for the Chair and the board
Members of the Board of Directors receive a fixed remuneration only. members, to align with prevalent practices of Swiss publicly traded
They are entitled to a fixed annual board membership fee (annual board companies of similar size (see section 4. of this report for the
retainer) and additional annual fees for participation in board committees new amounts)
(committee fees). The annual board retainer of the Chair of the Board • A new remuneration settlement scheme, with a portion of
includes his or her attendance to any committee of the Board, whether remuneration to be settled in restricted shares
as a voting member or in an advisory capacity. By agreement with the
relevant tax authorities, part of the remuneration of the Chair of the • The introduction of shareholding requirements
Board may be settled as representation fees. Directors do not receive The aggregate amount of the new board remuneration was submitted
additional compensation for attending meetings and do not receive any to the Annual General Meeting for approval.
variable remuneration.
Each board member will receive 25% of the annual board retainer
The table below summarizes the remuneration elements of the in the form of shares restricted for a period of three years ending
members of the Board of Directors. on the third anniversary of their award. The restricted shares will be
Representation fees
awarded after the Annual General Meeting during which the board
(subject to agreement member is elected to their position. The number of restricted shares
Annual Committee fees with relevant tax awarded will be determined by dividing the cash value of 25% of the
Board retainer (per Committee) authorities) annual board retainer by the average closing share price during the
Chair 20-day period following the payment of the dividends after the Annual
General Meeting. Fractions will be rounded down to the nearest whole
Board number; the balance, if any, will be settled in cash, payable with the
members next installment of the fees. Such restricted shares may not be sold,
donated, pledged or otherwise disposed of to third parties during the
The remuneration to the members of the Board of Directors is subject three year restriction period. In case of change of control or liquidation,
to employer social charges according to Swiss legislation. or in case a member of the board ceases to exercise their mandate
following death or permanent disability, the restriction period of the
The amounts of the remuneration elements for the Chair and the shares lapses. The shares remain restricted in all other instances.
other board members are defined by the Board of Directors every
year. The maximum total amount is subject to the binding vote of The portion of remuneration settled in cash is paid in two installments,
the Annual General Meeting. in June and December of the calendar year.
In determining the amounts of the compensation elements, the Board Members of the Board of Directors do not hold service contracts
of Directors considers the prevailing practices of the Swiss publicly and are not entitled to any termination or severance payments.
traded companies belonging to the SMI or SMIM indexes, with market They do not participate in the company’s benefit schemes and the
capitalization of similar size, and not belonging to the capital markets, company does not make any contributions to any pension scheme
insurance and pharmaceuticals sectors. on their behalf.
Board members are required to accumulate during their tenure a
number of shares equivalent in value to two years of remuneration.
108 Remuneration
report
3.2. Structure of remuneration of the Operations Council

The members of the Operations Council receive a fixed remuneration allowances according to local practices in their country of employment,
and a variable remuneration linked to short-term and long-term results. and in the form of benefits in kind.
The fixed remuneration includes an annual base salary and benefits, The variable remuneration consists of a short-term incentive, settled
in the form of employer’s contributions into pension funds, health 50% in cash and 50% in equity, and a long-term incentive, settled
insurances, life and disability insurances, other contributions and in equity.
The table below summarizes the various components of the remuneration of the Operations Council members.
Remuneration Remuneration Performance
element vehicle Drivers measures Purpose Plan period
Fixed remuneration
Annual base salary Cash Position and experience, n/a Attract and retain Continuous
market practice key executives
(benchmarking)
Benefits Contributions Market practice n/a Protect executives Continuous
to pension plans against risks,
and insurances, attract and retain
other contributions,
allowances,
benefits in kind
Variable remuneration
Short-term incentive 50% cash Annual financial Group revenue, group Pay for 1-year
50% restricted performance, individual NPAT2, group ROIC3, performance performance
shares performance group free cash flow, period
against leadership regional and division 3-year deferral
competency model profit, regional and period
and ESG1 metrics division NWC4,
leadership multiplier
Long-term incentive Performance Long-term financial Relative TSR5, Reward for long-term 3-year
share units and non-financial ESG1 metrics performance, align performance
(PSUs) performance compensation with period
the interests of the
shareholders
1. ESG: environmental, social and governance. 2. NPAT: net profit after tax. 3. ROIC: return on invested capital. 4. NWC: net working capital. 5. TSR: total shareholder return.
The remuneration of the members of the Operations Council is subject to employer social charges, according to the legislation in force in
their country of employment.
3.2.1. Fixed remuneration: annual base salary 3.2.3. Short-term variable remuneration
The base salaries of the CEO and each Operations Council The CEO and the other members of the Operations Council are
member are reviewed annually based on market data for similar eligible for a performance-related annual incentive (the “short-term
positions in those companies and geographies against which the incentive”). The short-term incentive is designed to reward the
group benchmarks itself. In addition to individual performance CEO and the other members of the Operations Council for the
and contribution and business performance and results, the annual financial performance of the group and its businesses, and
deciding body considers the scope and complexity of the areas for the demonstration of leadership behaviors in line with the SGS
of responsibility of the position, skillsets, experience required to competency model and the group’s sustainability ambitions.
perform the job, and relevant market practice in the industry. The short-term incentive plan is reviewed annually to ensure its
3.2.2. Fixed remuneration: benefits alignment with the group’s business strategy and value to society
ambitions. For the performance year 2022, only a minor change in
Benefits include the employer’s contributions to pension plans, the
the KPIs compared to 2021 was implemented: for the executive vice
employer’s contributions to insurances for health, life, disability and
presidents, heads of divisions, 10% of the incentive opportunity is
other risks, other cash contributions and allowances, and benefits in
now linked to the division net working capital, replacing the division
kind. They are awarded in accordance with prevailing practices in the
operating free cash flow, to ensure better consistency between
country of employment of the members of the Operations Council.
divisions and regions in managing the net working capital.
Swiss-based Operations Council members participate, on the same
The table below summarizes the short-term incentive components
basis as other Swiss employees of the group, in the company’s
for the CEO and the other members of the Operations Council.
pension scheme. Each participant can choose between three levels
of employee contributions (“standard”, “plus 2” and “maxi”), defined Other Operations
based on the participant’s age; the company contributes an amount Short-term incentive component CEO Council members
equal to one and a half times the participant’s contribution at the
Annual financial performance
“standard” level. Flexibility is granted to employees who wish to
fund a potential retirement before the normal age, and to those Leadership behaviors
who wish to continue working after the age of 65.

The target incentive is expressed as a percentage of the annual base Annual financial performance
salary and varies depending on the role. For the CEO, the target Each year, an annual business plan is derived from the long-term
incentive amounts to 100% of annual base salary, while the target strategic plan and sets the business objectives to be achieved during
incentive for the other members of the Operations Council varies the year.
between 65% and 90% of annual base salary. The key performance indicators used in the short-term incentive
The table below summarizes the annual incentive opportunity for to measure the annual financial performance of the group and its
the CEO and the other members of the Operations Council. businesses include measurements of growth (top-line contribution),
profitability (bottom-line contribution), cash generation and efficient
Other Operations
CEO Council members use of capital, and thus reflect the financial performance of the
company in a balanced manner. Those financial metrics are cascaded
Incentive frequency Annual Annual
consistently throughout the organization to ensure collective
Minimum incentive opportunity alignment. The CEO and the heads of corporate functions (SVPs)
as % of base salary 0% 0% are measured on the financial performance of the group, while
as % of target incentive the other members of the Operations Council are measured on
opportunity 0% 0% the financial performance of the group and on the financial
performance of their own division (EVPs) or region (COOs).
Target incentive opportunity
as % of base salary 100% 65-90% At the beginning of each year, based on a recommendation by
the CEO, the Board of Directors sets the target values of the key
Maximum incentive opportunity
performance indicators used in the short-term incentive, in line
as % of target incentive
with the annual business objectives.
opportunity 250% 250%
as % of base salary 250% 162.5-225%
The table below summarizes the key performance indicators applicable to the CEO and the other members of the Operations Council.
Heads of Corporate Heads of Divisions Heads of Regions
CEO Functions (SVPs) (EVPs) (COOs)
Group Profitability Group NPAT Group NPAT Group NPAT Group NPAT
results (bottom-line) 25% 25% 25% 25%
Growth Group revenue Group revenue Group revenue Group revenue
(top-line) 25% 25% 25% 25%
Efficient use Group ROIC (Organic) Group ROIC (Organic)
of capital 25% 25%
Cash Group free cash Group free cash
generation flow (organic) flow (organic)
25% 25%
Division Profitability Division profit
results (bottom-line) 40%
Cash Division NWC
generation 10%
Regions Profitability Regional profit
results (bottom-line) 40%
Cash Regional NWC
generation 10%
For each key performance indicator, a pay-out curve is defined according to the following principles:
• A threshold (minimum level of performance to trigger a pay-out, and below which the pay-out is zero), a target (expected level of
performance that triggers a pay-out equivalent to the target incentive), and a maximum (level of performance that triggers the highest
pay-out, and above which the pay-out is capped) are defined
• The lowest pay-out (triggered by the threshold performance) and the highest pay-out (triggered by the maximum performance) are defined
• The pay-out for performances between threshold and target and between target and maximum are calculated by linear interpolation

110 Remuneration
report
The chart below shows the pay-out curves for the group net operating profit after taxes (NPAT), group revenue, group return on invested
capital (ROIC), group free cash flow (FCF), divisional profit, regional profit.
Bottom-line, top-line, ROIC and FCF performance (pay-out curve)

250%
200%
150%
Pay-out %
100%
50%
0%
80% 100% 133.3% 200%
Performance %
The pay-out curve for regional and divisional net working capital (NWC) is defined by the CEO at the beginning of the performance year
together with the objectives for each performance metric.
At the end of the performance period, the results for each key performance indicator are assessed against the pre-defined target and the
pay-out curve to determine a pay-out factor. The weighted average of the pay-out factors of each key performance indicator corresponds
to the overall financial performance pay-out factor.
An example of the calculation of the financial performance pay-out factor for an executive vice president is described in the chart below.
Financial performance pay-out factors for an executive vice president
Group NPAT Group revenue Division net Division profit Financial

weight 25% weight 25% working capital weight 40% performance
10% pay-out
Performance Performance Performance Performance

96% 120% 100% 110%
Pay-out Pay-out Pay-out Pay-out

80% 160% 100% 130%
80% 160% 100% 130%

122%
x 0.25 x 0.25 x 0.10 x 0.40
Leadership multiplier
The members of the Operations Council are also rewarded for the demonstration of leadership behaviors in line with the SGS competency
model and with the SGS sustainability ambitions. These criteria encompass a broader range of values than the three metrics used for the
determination of vesting of the long-term incentives (LTI). Their final incentive amount is calculated by multiplying the financial performance
pay-out factor by a leadership multiplier.
The leadership multiplier is determined for each executive based on an assessment of their behaviors against: i) the leadership competency
model of SGS in the areas of innovation, people management and change management, and ii) environmental, social and governance (ESG)
metrics aligned with the group’s sustainability ambitions. The assessment of the CEO is conducted at year end by the Board of Directors,
while the assessment of the other members of the Operations Council is conducted by the CEO and approved by the Remuneration
Committee. The assessment leads to a leadership multiplier that can range between 70% and 125%.

An example of the calculation of the final incentive amount for an OC member is described in the chart below.
Final incentive amount for an OC member
Target Financial performance Leadership Final incentive

incentive payout factor multiplier amount
CHF 100 000 122% 125% CHF 152 500
Settlement of the short-term incentive

Once the final incentive amount is determined, it is settled 50% in cash and 50% in restricted shares, to strengthen the link between the
compensation of executives and the interests of the shareholders.
The cash component is paid and the restricted shares are allocated after the shareholders’ approval at the Annual General Meeting of the
following year.
The number of restricted shares to be allocated is determined by dividing 50% of the final incentive amount by the average closing share
price during the 20-day period following the payment of the dividends after the Annual General Meeting, and the result is rounded up to the
nearest integer. They are restricted for a period of three years during which they may not be sold, transferred, or pledged. In case of change
of control or liquidation or termination of employment following retirement, death or disability, the restriction period of the shares lapses.
The shares remain restricted in all other instances.
The group does not issue new shares to be allocated to employees for equity-based compensation plans, but uses treasury shares instead,
acquired through share buyback programs. Detailed information on the overhang and burn rate are disclosed in note 29.
Termination of employment
In case of termination of employment for any reason except for cause, if the last day of employment is on or after December 31 of the
respective business year, the executive is eligible to the full annual incentive payment. The annual incentive is paid fully in cash after the
approval at the Annual General Meeting.
In case of termination for cause before the date of payment, irrespective of whether the last day of employment is before or after
December 31 of the respective business year, the executive has no entitlement to receive any annual incentive payment.
In case of resignation, and if the last day of employment is before December 31 of the respective business year, the participant has
no entitlement to receive any annual incentive payment.
If employment ceases due to death or disability before December 31 of the respective business year, the annual incentive payment is
calculated pro-rata (calendar days) based on the Board of Directors’ best estimate of the performance on the last day of employment.
The annual incentive is paid fully in cash shortly after the last day of employment, as soon as administratively possible.
In case of retirement or termination not for cause before December 31 of the respective business year, the annual incentive payment
is calculated pro-rata (calendar days) based on actual performance at the end of the performance year, and it is paid fully in cash after
the approval at the Annual General Meeting.
The table below summarizes the rules in case of termination of employment.
Last day of employment Last day of employment
before December 31 between December 31 and AGM
Incentive Incentive
opportunity opportunity
Termination (target Incentive Payment Payment (target Incentive Payment Payment
reason incentive) pay-out date vehicle incentive) pay-out date vehicle
Termination Zero Zero – – Zero Zero – –
for cause
Resignation Zero Zero – – Full Based After AGM 100%
on actual approval cash
performance
Death or Pro-rated Based Shortly after 100% Full Based Shortly after 100%
disability on calendar on estimated the termination cash on actual the termination cash
days performance date performance date
Retirement, Pro-rated Based After the AGM 100% Full Based After AGM 100%
termination on calendar on actual approval cash on actual approval cash
not for cause days performance performance
AGM – Annual General Meeting

112 Remuneration
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Clawback provisions The long-term incentive consists of a grant of performance share

A clawback policy applies to any variable remuneration awarded units (PSUs). As of 2021, PSUs grants are done every year, in line
to the members of the Operations Council. Under this policy, the with prevalent market practices.
company may reclaim the value of any variable incentives paid, in The value of the grants, defined as the number of PSUs granted
cash or shares, in the following cases: i) any fraud, negligence or multiplied by the average share price of the 20 trading days
intentional misconduct was a significant contributing factor to the preceding the grant date, is expressed as a percentage of the
company having to restate all or a portion of its financial statements; annual base salary and varies depending on the job.
ii) a serious violation of the SGS internal regulations and/or code of The value of the grant is 167% of the annual base salary for the
integrity; iii) any violation of law within the scope of employment CEO, and between 100% and 133% of the annual base salary
at the company. for the other members of the Operations Council.
3.2.4. Long-term variable remuneration The table below summarizes the value of the incentive opportunity
The CEO and the other members of the Operations Council are for the CEO and other OC members.
eligible to a performance-related long-term incentive (the “long-term
incentive”). The long-term incentive is designed to motivate the
leadership team to achieve the long-term objectives of the group and
to align their remuneration with the interests of the shareholders.
Other Operations
CEO Council members
Incentive frequency Annual Annual

Minimum incentive as % of base salary 0% 0%
opportunity value as % of target incentive opportunity 0% 0%
Target incentive as % of base salary 167% 100-133%
opportunity value
Maximum incentive opportunity value as % of target incentive opportunity 150% 150%
as % of base salary 250% 150-200%
The PSUs granted under the long-term incentive vest after The list of the peer group companies is illustrated in the table below.
a performance period of three years, conditionally upon the
achievement of pre-defined performance objectives and subject ALS Applus+ Bureau Veritas Eurofins
to continuity of employment of the beneficiaries during the Intertek Mistras Team
vesting period.
The long-term incentive plan is reviewed annually to ensure its The vesting level for the TSR is defined as follows: 150% vesting
alignment with the group’s business strategy and value to society if SGS is ranked first among the eight companies (including SGS)
ambitions. No change in the structure of the long-term incentive composing the peer group, 125% vesting if SGS is ranked second,
plan was implemented in 2022; the only difference compared to 100% vesting if SGS is ranked third, 50% vesting if SGS is ranked
the 2021 transition plan was in the size of the grants. Details on fourth, and zero vesting if SGS is ranked fifth or worse.
the value of the 2022 grants in comparison with the 2021 grants The ESG metrics have been selected by the Board of Directors in line
are disclosed in section 5.3. of this report. with the company’s sustainability ambitions, in the areas of diversity
and inclusion (women in leadership positions), health and safety
Performance conditions (lost time incident rate) and environment protection (greenhouse
The performance conditions of the long-term incentive consist gas (GHG) emissions).
of the following key performance indicators: The vesting level for the ESG metrics is defined based on the
• Relative total shareholder return (rTSR1) (relative SGS performance company’s achievements against pre-defined performance levels
compared with the peer group), accounting for 80% of the and can range between zero (in case the performance of two of
incentive opportunity the metrics is below target) and 150% (in case the performance
of all three metrics is at maximum or above).
• Environmental, social and governance (ESG) metrics, accounting
for 20% of the incentive opportunity
The TSR of the group will be compared to the TSR of a group of
seven peer companies, selected by the Board of Directors as the
main listed competitors on the testing, inspection and certification
industry. The intention of indexing performance against a peer group
of companies is to reward the relative performance of the company,
where market factors that are outside the control of the executives
are neutralized.
1. Total shareholder return: (Ending stock price – Beginning stock price) + Sum of all dividends received during the measurement period.

The graphics below summarize the key performance indicators of the long-term incentive and their vesting levels:
Relative TSR vesting formula
175%
150%
125%
Vesting %
100%
75%
50%
25%
0%
8th 7th 6th 5th 4th 3rd 2nd 1st

Relative TSR Ranking
ESG metrics vesting formula
175%
150%
125%
Vesting %
100%
75%
50%
25%
0%
2 or all 3 metrics 2 metrics at target all 3 metrics at target all 3 metrics at max
below target (or 2 metrics above target)
The overall vesting level of the PSUs granted will be calculated as a weighted average of each of the respective vesting levels for relative
TSR (80%) and ESG metrics (20%), and ranges between 0% and 150%.
Settlement of the long-term incentive

At the end of the vesting period, the PSUs vest, subject to the performance conditions and the continuity of employment condition, and
shares are allocated to the participants based on the overall vesting level.
The number of shares to be allocated at vesting is calculated by multiplying the number of PSUs granted by the overall vesting level, the
result being rounded up to the nearest integer.
Number of Overall vesting Number of shares

PSUs granted level (0-150%) allocated at vesting
The Group does not issue new shares to be allocated to employees for equity-based compensation plans, but uses treasury shares instead,
acquired through share buyback programs. Detailed information on the overhang and burn rate are disclosed in note 29.
Termination of employment
In case of termination of employment, all unvested PSUs are as a rule immediately forfeited without value and without any compensation,
except in the following cases:
• In case of termination of employment as a result of disability or retirement, unvested PSUs vest on a pro-rata basis, based on the number
of full months of the vesting period that have expired until the termination date. The shares are allocated after the regular vesting date
and the vesting level is determined based on the performance during the entire regular performance period. There is no early allocation
of the shares
• Upon termination of employment as a result of death, unvested PSUs will vest immediately on a pro-rata basis, based on the number of
full months of the vesting period that have expired until the termination date. The vesting level is based on an estimation of performance
by the Board of Directors
• In the event of a corporate transaction or liquidation, unvested PSUs vest immediately. The vesting level is based on an estimation
of performance by the Board of Directors

114 Remuneration
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The table below summarizes the vesting rules in case of termination of employment:
Termination reason Vesting rule Vesting time and shares allocation Vesting level
Retirement or disability Vesting on a pro-rata basis At regular vesting date Based on actual performance
Death Vesting on a pro-rata basis Immediate Based on an estimation of
performance by the Board
of Directors
Corporate transaction Full vesting Immediate Based on an estimation of
or liquidation performance by the Board
of Directors
Other reasons Forfeiture – –
Malus and clawback provisions 3.2.6. Shareholding ownership guidelines

A malus and clawback policy applies to any long-term incentive grant A shareholding ownership guideline (SOG) in force since 2015,
awarded to the members of the Operations Council. Under this requires the members of the Operations Council to own at least a
policy, the company may forfeit any unvested equity compensation certain multiple of their annual base salary in SGS shares, as follows:
and/or reclaim the value of any vested equity compensation granted • CEO: three times the annual base salary
under a long-term incentive plan, in the following cases: i) any fraud,
• Other members of the Operations Council: two times the
negligence or intentional misconduct was a significant contributing
annual base salary
factor to the company having to restate all or a portion of its financial
statements; ii) a serious violation of the SGS internal regulations In the event of a substantial drop in the share price, the Board
and/or code of integrity; iii) any violation of law within the scope of Directors has the discretion to modify the SOG.
of employment at the company. The determination of equity amounts against the SOG is defined to
3.2.5. Remuneration mix include vested shares allocated under the short-term and long-term
incentive plans and other shares that are owned by the Operations
The part of remuneration at risk (short-term incentive and long-
Council member directly or indirectly (by “closely related persons”).
term incentive) for the CEO represents, at target, 73% of their total
remuneration. The part of remuneration settled in equity instruments The Remuneration Committee reviews compliance with the SOG on
(restricted shares and PSUs) represents, at target, 59% of their an annual basis. Until the minimum requirement is met, 25% of the
total remuneration. shares allocated under the short-term incentive plan and all shares
allocated upon vesting of the PSUs under the long-term incentive
For the other members of the Operations Council, the part or
plan will be blocked.
remuneration at risk represents, on average, 64% of their total
remuneration. The part of remuneration settled in equity instruments 3.2.7. Employment contracts
represents, on average, 50% of their total remuneration. Employment contracts of the Operations Council members have
The long-term incentive is considered at its annualized value. no fixed term and can be terminated at any time by either party,
The part of the fixed remuneration linked to benefits is not provided a notice period of six months is respected. For the CEO,
considered in this analysis. the notice period is 12 months. The executive contracts do not
provide for any severance payments (beyond the minimum legally
The charts below show the remuneration mix for the CEO and
required in the country of employment) and are subject to applicable
the other members of the Operations Council in three cases: at
legislation in the country of employment.
minimum (both short-term and long-term incentives at zero pay-
out), at target (both short-term and long-term incentives at
100% pay-out) and at maximum (both short-term and long-term
incentives at maximum pay-out).
Remuneration mix for the CEO and other Operations Council members in three cases (%)
CEO Other Operations Council members (on average)
100 100
90 90
80 80
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0 0
Minimum Target Maximum Minimum Target Maximum
Base salary (Cash) Short-Term Incentive (Cash) Short-Term Incentive (Restricted Shares) Long-Term Incentive (PSUs)

3.2.8. Timeline of remuneration

The following chart outlines the timeline of payment of each remuneration element that was earned in 2022:
• The annual base salary is paid during 2022
• The cash portion of the short-term incentive is paid in March 2023, shortly after the Annual General Meeting
• The share portion of the short-term incentive is allocated in April 2023 and will be unblocked in April 2026
• The PSUs granted under the long-term incentive in 2022 will be earned over the performance period from 2022 to 2024 and will vest,
subject to performance conditions and continuity of employment, in February 2025
Timeline of remuneration
Timeline (performance period, time of payment) Performance KPIs
Long-term Vesting Relative TSR (80%)

incentive shares
2022 grant allocation ESG metrics (20%)
Group revenue (25%)

50% in Unblocking
restricted shares Group NPAT (25%)
Short-term
incentive Group ROIC (organic), Group FCF, Role
50% specific Profit, Role specific NWC (50%)
in cash
Multiplied by leadership multiplier
Annual
base
salary Fixed remuneration
and
benefits
2022 2023 2024 2025 2026
Shareholding Ownership Guideline
4. Remuneration awarded to the Board of Directors (audited)

As explained in section 3.1. of this report, The Board of Directors reviewed the remuneration of its members, to align with prevalent market
practices of Swiss publicly traded companies.
For the mandate from Annual General Meeting 2022 to 2023, the annual board retainer is CHF 665 000 for the Chair of the Board and
CHF 200 000 for the other Board of Directors members; this represents an increase of 33% compared to the prior mandate (board retainer
was CHF 500 000 for the Chair and CHF 150 000 for the other members). The Chair of the Audit Committee is entitled to an additional fee
of CHF 70 000; directors serving as Audit Committee members are entitled to an additional fee of CHF 50 000 (unchanged from the prior
mandate). The Chair of the Remuneration Committee is entitled to an additional fee of CHF 40 000; directors serving as Remuneration
Committee members are entitled to an additional fee of CHF 30 000 (unchanged from the prior mandate). The Chair of the Sustainability
Committee is entitled to an additional fee of CHF 30 000; directors serving as Sustainability Committee members and directors serving on
the Nomination Committee are entitled to an additional fee of CHF 30 000 (during the prior mandate, directors serving on the Governance
& Compliance Committee were entitled to an additional fee of CHF 30 000).
Board Audit Remuneration Nomination Sustainability

(CHF thousand, gross) Retainer Committee fee Committee fee Committee fee Committee fee
Chairmanship 665 70 40 – 30
Membership 200 50 30 30 30
The total remuneration of the Board of Directors for the mandate from Annual General Meeting 2022 to 2023 is equal to CHF 2 655 000,
within the amount approved by the Annual General Meeting 2022 (CHF 2 700 000).
Each board member receives 25% of the annual board retainer in the form of shares restricted for a period of three years ending on the
third anniversary of their award; the remaining portion is settled in cash. The cash part is paid partly in the current fiscal year and partly
in the next fiscal year, on a pro-rata temporis basis. The restricted shares are awarded in the current fiscal year, after the Annual General
Meeting during which the board member is elected to their position.
The total remuneration of the Board of Directors for the mandate from Annual General Meeting 2021 to 2022 was equal to CHF 1 880 000,
within the amount approved by the Annual General Meeting 2021 (CHF 2 300 000).
Each board member could choose to receive up to 50% of his/her remuneration settled in shares or restricted shares. Two board members
decided to receive a portion (25% and 50%) of their remuneration in restricted shares; the remaining portion was settled in cash. The cash
part was paid partly in 2021 fiscal year and partly in 2022 fiscal year, on a pro-rata temporis basis. The shares or restricted shares were
granted in 2022 fiscal year, after the publication of the 2021 Group results.

116 Remuneration
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The table below details the remuneration elements and the settlement vehicle of the directors for the mandate Annual General Meeting
2022 to 2023.
To be
Audit Remuneration Nomination Sustainability To be settled in
Board Committee Committee Committee Committee Total settled restricted
(CHF thousand, gross) Chairmanship membership membership membership membership membership remuneration in cash shares1
C. Grieder 665 – – – – – 665 500 165

S. Atiya – 200 – 40 30 – 270 220 50
Ph. Cheung – 200 – – – 30 230 180 50
P. Desmarais, Jr. – 200 – – – – 200 150 50
I. Gallienne – 200 – 30 30 – 260 210 50
T. Hartmann – 200 50 – – – 250 200 50
S. R. du Pasquier – 200 – – – – 200 150 50
K. Sorenson – 200 70 30 – 30 330 280 50
J. S. Vergis – 200 50 – – 250 200 50
Total 665 1 600 170 100 60 60 2 655 2 090 565
1. Restricted shares were granted during fiscal year 2022.
The table below details the remuneration elements and the settlement vehicle of the directors for the mandate Annual General Meeting
2021 to 2022.
Governance Proportion
Audit Remuneration & Compliance to be Settled in
Board Committee Committee Committee Total settled in restricted
(CHF thousand, gross) Chairmanship membership membership membership membership remuneration cash shares1
C. Grieder 500 – – – – 500 100% –

S. Atiya – 150 – – 30 180 100% –
P. Desmarais, Jr. – 150 – – – 150 100% –
I. Gallienne – 150 – 30 30 210 100% –
T. Hartmann – 150 50 – – 200 100% –
S. R. du Pasquier – 150 – 40 – 190 75% 25%
K. Sorenson – 150 70 30 – 250 50% 50%
J. S. Vergis – 150 50 – – 200 100% –
Total 500 1 050 170 100 60 1 880
1. Restricted shares were granted during fiscal year 2022.
The remuneration of the Board of Directors is subject to employer social charges according to Swiss legislation.
The following table details the remuneration elements granted to each of the directors for their tenure in fiscal year 2022. It includes both
pro-rata temporis elements of remuneration for the mandate Annual General Meeting 2021 to 2022 and pro-rata temporis elements or
remuneration for the mandate Annual General Meeting 2022 to 2023.
Employer
Board Representation Committee Total Restricted Restricted social
(CHF thousand, gross) retainer fees fees remuneration Cash shares value shares NB charges
C. Grieder 656 – – 656 493 163 65 10

S. Atiya 197 – 60 257 209 48 19 22
Ph. Cheung1 163 – 23 186 138 48 19 16
P. Desmarais, Jr. 197 – – 197 149 48 19 14
I. Gallienne 197 – 59 256 208 48 19 22
T. Hartmann 197 – 49 246 198 48 19 –
S. R. du Pasquier 212 – – 212 115 97 38 18
K. Sorenson 288 – 98 386 213 173 68 32
J. S. Vergis 197 – 49 246 198 48 19 21
Total 2 304 – 338 2 642 1 921 721 285 155
1. As of the Annual General Meeting 2022.

The following table details the remuneration elements granted to each of the directors for their tenure in fiscal year 2021. It includes both
pro-rata temporis elements of remuneration for the mandate Annual General Meeting 2020 to 2021 and pro-rata temporis elements or
remuneration for the mandate Annual General Meeting 2021 to 2022.
Employer
Board Representation Committee Total Restricted Restricted social
(CHF thousand, gross) retainer fees fees remuneration Cash shares value shares NB charges
C. Grieder 501 – – 501 501 – – –

S. Atiya 150 – 30 180 180 – – 16
P. Desmarais, Jr. 150 – – 150 150 – – 11
A. F. von Finck1 35 – 7 42 42 – – 4
I. Gallienne 150 – 61 211 211 – – 19
C. Grupp1 35 – – 35 35 – – 2
T. Hartmann 150 – 50 200 200 – – –
G. Lamarche 1
35 – 16 51 51 – – 5
S. R. du Pasquier 150 – 40 190 142 48 18 17
K. Sorenson 110 – 68 178 178 – – 16
J. S. Vergis 2
116 – 39 155 155 – – 14
Total 1 582 – 311 1 893 1 845 48 18 104
1. Until the Annual General Meeting 2021.

2. As of the Annual General Meeting 2021.
The overall remuneration paid to the Board of Directors in 2022 is higher than the overall remuneration paid in 2021; this reflects the
adjustment of the board fees to market conditions (as explained in section 3.1. of this report), the split of the Governance & Sustainability
Committee into two separate committees (the Nomination Committee and the Sustainability Committee), and the increase in the number
of board members (9 members in the mandate Annual General Meeting 2022 to 2023, 8 members in the prior mandate).
5. Remuneration awarded to the Operations Council members (audited)

This section sets out the remuneration that was paid to the Operations Council as a whole, to the three Operations Council members who
make up senior management and to the CEO in 2022. All amounts disclosed in this section include the short-term incentive cash amount
and restricted shares that will be granted in April 2023 with respect to performance in 2022 (disclosure according to the accrual principle).
5.1. Fixed remuneration

The table below summarizes the fixed remuneration paid to the Operations Council, senior management and the CEO in 2022.
Other
Contributions contributions
Base Other cash to pension and benefits Total fixed
(CHF thousand, gross) salary allowances plans in kind remuneration
Operations Council (including senior management)

Cash (including allowances) 7 499 867 – – 8 366
Contributions and benefits in kind – – 748 343 1 091
Equity – – – – –
Total 7 499 867 748 343 9 457
Senior management (including CEO)
Contributions and benefits in kind – – 271 21 292
Equity – – – – –
Total 2 325 142 271 21 2 759
Chief Executive Officer
Equity – – – – –
Total 1 200 64 112 8 1 384
The aggregate total fixed remuneration of the members of the Operations Council did not exceed the maximum amount approved by the
Annual General Meeting in 2021 (CHF 14 000 000). For 2023, the 2022 Annual General Meeting already approved a maximum aggregate
total fixed remuneration for the members of the Operations Council (CHF 12 500 000).

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The table below summarizes the fixed remuneration paid to the Operations Council, senior management and the CEO in 2021.
Contributions Other contributions
Base Other cash to pension and benefits Total fixed
(CHF thousand, gross) salary allowances plans in kind remuneration

Cash (including allowances) 7 599 1 019 – – 8 618
Contributions and benefits in kind – – 804 340 1 144
Equity – – – – –
Total 7 599 1 019 804 340 9 762
Equity – – – – –
Total 2 278 145 259 22 2 704
Equity – – – – –
Total 1 200 64 112 9 1 385
The decrease in fixed remuneration compared with 2021 reflects the change in the composition of the Operations Council.
5.2. Short-term variable remuneration

The short-term variable remuneration of the members of the Operations Council is determined by the achievement of financial targets
and by their leadership behaviors.
In 2022, the achievement of financial targets at group level, in the businesses and in the regions ranges from 74.8% to 123.6% (2021: 88.0%
to 133.3%).
The chart below summarizes the 2022 performance achievements against targets for the financial objectives (revenue, profitability, cash
generation and capital efficiency) used in the short-term incentive. No adjustment to the targets was made to account for the Covid-19
related lockdown in China and for the geopolitical crisis in Eastern Europe.
2022 performance achievements against targets
Performance KPI Pay-out % Threshold Target Maximum
Group revenue 100.8%

Group NPAT 66.6%
Group ROIC 63.4%
Group free cash flow 0.0%
Avg Min Max
Regional and business profit 57.6% 0.0% 115.7%

Regional and business cash generation 90.8% 48.5% 170.9%
Achievement Average achievement Performance range
The overall short-term incentive pay-out amounts to 63.5% of the target incentive opportunity for the CEO (2021: 121.9%) and ranges from
49.4% to 113.1% of the target incentive opportunity for the other members of the Operations Council (2021: 79.1% to 157.1%). For the
purpose of the short-term incentive, targets and performance achievement are measured at constant currency exchange rates. The table
below details the 2022 short-term incentive for the CEO.
CEO 2022 STI pay-out
Group financial KPIs Pay-out
KPI description Revenue (CHF million) NPAT (CHF million) ROIC (organic) (%) FCF (CHF million)
Target 6 623 630 20.5 677
Actual 6 642 588 19.0 507
Actual vs Target % 100.3% 93.3% 92.7% 74.8%
Pay-out % 100.8% 66.6% 63.4% 0.0%
Weight 25% 25% 25% 25%
Financial KPIs pay-out % 57.7%
Leadership multiplier 110%
Total pay-out % 63.5%
Pay-out (CHF thousand, gross) 762

In settlement of the equity portion of the short-term incentive 2022, SGS restricted shares will be allocated to the members of the
Operations Council in Q2 2023, after the approval of the total short-term incentive amount by the Annual General Meeting (in Q2 2022,
1 378 restricted shares were granted in settlement of the equity portion of the short-term incentive 2021). The number of restricted
shares to be allocated is calculated by dividing the equity portion of the short-term incentive by the average closing price of the share
during a 20-trading day period following the payment of the dividends after the Annual General Meeting, rounded up to the nearest
integer, and are restricted for a period of three years.
The table below summarizes the short-term variable remuneration awarded to the Operations Council, senior management and the CEO
for the 2022 performance year, and its comparison with the incentive opportunity.
Actual short-term
(CHF thousand, gross) Minimum Target Maximum variable remuneration

Cash (including allowances) – 3 106 7 765 2 216
Contributions and benefits in kind – – – –
Equity – 3 106 7 765 2 216
Total – 6 212 15 530 4 432
Cash (including allowances) – 1 080 2 700 662
Equity – 1 080 2 700 662
Total – 2 160 5 400 1 324
Cash (including allowances) – 600 1 500 381
Equity – 600 1 500 381
Total – 1 200 3 000 762
The total short-term remuneration amount will be submitted for approval to the Annual General Meeting of 2023, and the settlement for both
the cash and the equity part will be implemented shortly after.
The table below summarizes the short-term variable remuneration awarded to the Operations Council, senior management and the CEO
for the 2021 performance year, and its comparison with the incentive opportunity.
Actual short-term
(CHF thousand, gross) Minimum Target Maximum variable remuneration

Equity – 2 893 7 233 3 448
Total – 6 088 15 220 7 231
Equity – 1 059 2 648 1 296
Total – 2 118 5 295 2 592
Cash (including allowances) – 600 1 500 732
Equity – 600 1 500 732
Total – 1 200 3 000 1 464
The total 2021 short-term remuneration amount was approved by the Annual General Meeting of 2022, and the settlement for both the cash
and the equity part were implemented shortly after.
The decrease in short-term variable remuneration compared to 2021 reflects the lower achievements against the financial targets.

120 Remuneration
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5.3. Long-term variable remuneration

In 2022, the group implemented a long-term incentive plan for the performance period 2022-2024. Under the long-term incentive plan 2022-
2024, a total of 3 296 performance share units (PSUs) were granted to the members of the Operations Council; this includes 1 301 PSUs
granted to senior management, of which 769 granted to the CEO.
The PSUs awarded under the long-term incentive 2022-2024 vest after the three-year performance period 2022-2024, in early 2025,
subject to the performance conditions (relative total shareholder return and environmental, social and governance metrics; see section
3.2.4. of this report for detailed explanations on the performance conditions) and to continuity of employment of the beneficiaries during
the vesting period.
The number of PSUs granted is calculated by dividing the value of the grant, as disclosed in section 3.2.4. of this report, by the average
closing price of the share during a 20-trading day period preceding the grant date, rounded up to the nearest integer.
A cash long-term incentive plan was implemented in 2022 for one Operations Council member who was newly appointed, as part of his
total compensation. This incentive mirrors the long-term incentive PSUs plan 2021-2023, with the exact same vesting and performance
conditions, from the date of the appointment to 31 December 2023.
In 2021, the group implemented a long-term incentive plan for the performance period 2021-2023. Under the long-term incentive plan 2021-
2023, a total of 6 003 performance share units (PSUs) were granted to the members of the Operations Council; this includes 2 462 PSUs
granted to senior management, of which 1 481 granted to the CEO. The 2021-2023 long-term incentive plan was a transition plan, from
the past practice (until the 2018-2020 plan), with one grant every three years, to the new practice, with one grant every year.
A cash long-term incentive plan was implemented in 2021 for one Operations Council member who was newly appointed, as part of his
total compensation. This incentive mirrors the long-term incentive PSUs plan 2021-2023, with the exact same vesting and performance
conditions, from the date of the appointment to 31 December 2023.
The table below summarizes the value of the long-term variable remuneration awarded to the Operations Council, senior management
and the CEO in 2022.
Total value
of the grant1
Number of (CHF thousand,
PSUs granted gross)

Cash (including allowances) – 618
Contributions and benefits in kind – –
Equity 3 296 8 577
Total 3 296 9 195
Cash (including allowances) – –
Equity 1 301 3 386
Total 1 301 3 386
Equity 769 2 001
Total 769 2 001
1. The value of the grant for the equity part is defined as the number of PSUs granted multiplied by the average closing price of the share during a 20-trading day period preceding the grant date.

The table below summarizes the value of the long-term variable remuneration awarded to the Operations Council, senior management and
the CEO in 2021.
Total value
of the grant1,2
Number of (CHF thousand,
PSUs granted gross)

Cash (including allowances) – 382
Equity 6 003 16 216
Total 6 003 16 598
Equity 2 462 6 651
Total 2 462 6 651
Equity 1 481 4 001
Total 1 481 4 001
1. The value of the grant for the equity part is defined as the number of PSUs granted multiplied by the average closing price of the share during a 20-trading day period preceding the
grant date.
2. The 2021-2023 LTI plan is a transition plan between the past practice (one grant every three years) and the new practice (annual grant); the value of the grant is two thirds of the past plans,
while as of 2022 the value of the grant is one third of the past plans.
5.4. Total remuneration

The tables below present all components of the remuneration earned in 2022 and 2021 by the Operations Council, senior management and
the CEO. The employer social charges are reported separately in the last column of the table.
Total remuneration 2022

Total Total
short-term Total 2022 long-term Employer
Total fixed variable remuneration variable Total 2022 social
(CHF thousand, gross) remuneration remuneration before LTI remuneration remuneration charges
Operations Council (including senior management)1

Cash (including allowances) 8 366 2 216 10 582 618 11 200 –
Contributions and benefits in kind 1 091 – 1 091 – 1 091 1 390
Equity – 2 216 2 216 8 577 10 793 –
Total 9 457 4 432 13 889 9 195 23 084 1 390
Senior management (including CEO)2
Cash (including allowances) 2 467 662 3 129 – 3 129 –
Contributions and benefits in kind 292 – 292 – 292 418
Equity – 662 662 3 386 4 048 –
Total 2 759 1 324 4 083 3 386 7 469 418
Equity – 381 381 2 001 2 382 –
Total 1 384 762 2 146 2 001 4 147 220
1. 18 FTE (Full-Time Equivalent).

2. 3 FTE.

122 Remuneration
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Total remuneration 2021

Total short- Total 2021 Total long- Employer
Total fixed term variable remuneration term variable Total 2021 social
(CHF thousand, gross) remuneration remuneration before LTI remuneration1 remuneration charges
Operations Council (including senior management)2

Cash (including allowances) 8 618 3 783 12 401 382 12 783 –
Contributions and benefits in kind 1 144 – 1 144 – 1 144 2 637
Equity – 3 448 3 448 16 216 19 664 –
Total 9 762 7 231 16 993 16 598 33 591 2 637
Senior management (including CEO)3
Cash (including allowances) 2 423 1 296 3 719 – 3 719 –
Equity – 1 296 1 296 6 651 7 947 –
Total 2 704 2 592 5 296 6 651 11 947 878
Equity – 732 732 4 001 4 733 –
Total 1 385 1 464 2 849 4 001 6 850 518
1. The 2021-2023 LTI plan is a transition plan between the past practice (one grant every three years) and the new practice (annual grant); the value of the grant was two thirds of the past
plans, while as of 2022 the value of the grant will be one third of the past plans.
2. 19 FTE (Full-Time Equivalent).
3. 3 FTE.
5.5. Remuneration mix

In 2022, the part of remuneration at risk (short-term incentive and long-term incentive) for the CEO represents 70% of the total remuneration
(2021: 74%); the part of remuneration settled in equity instruments (restricted shares and PSUs) represents 60% of the total remuneration
(2021: 59%). For the other members of the Operations Council, the part of remuneration at risk represents, on average, 62% of the total
remuneration (2021: 65%); the part of remuneration settled in equity instruments represents, on average, 51% of the total remuneration
(2021: 48%). The long-term incentive of 2021 is considered at the individual’s annualized value.
The part of the fixed remuneration linked to benefits is not considered in this analysis.
The charts below show the remuneration mix for the CEO and for the other members of the Operations Council in 2022 and 2021.
Remuneration mix of the CEO and other Operations Council members (%)
CEO Other Operations Council members (on average)
100 100
90 90
80 80
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0 0
2021 2022 2021 2022
Base salary (Cash) Short-Term Incentive (Cash) Short-Term Incentive (Restricted Shares) Long-Term Incentive (PSUs)
5.6. Other compensation elements

5.6.1. Severance payments
No severance payments were made in 2022 to members of the Operations Council (unchanged from prior year).
5.6.2. Other compensation to members or former members of the governing bodies

In 2022 no other payment was made to any member or former member of the governing bodies (unchanged from prior year).
5.6.3. Loans to members or former members of the governing bodies

As at 31 December 2022, no loan, credit or outstanding advance was due to the Group from members or former members of its governing
bodies or related parties (unchanged from prior year).
Report of the statutory auditor

to the General Meeting of SGS SA
Geneva
We have audited the remuneration report of SGS SA for the year ended 31 December 2022. The audit was limited to the
information according to articles 14–16 of the Ordinance against Excessive Compensation in Stock Exchange Listed Com-
panies (Ordinance) contained in sections 4 and 5 (pages 115 to 122) of the report.
Board of Directors’ responsibility

The Board of Directors is responsible for the preparation and overall fair presentation of the remuneration report in accord-
ance with Swiss law and the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordi-
nance). The Board of Directors is also responsible for designing the remuneration system and defining individual remunera-
tion packages.
Auditor’s responsibility
Our responsibility is to express an opinion on the remuneration report. We conducted our audit in accordance with Swiss
Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the remuneration report complies with Swiss law and articles 14–16 of the Ordi-
nance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuneration report with
regard to compensation, loans and credits in accordance with articles 14–16 of the Ordinance. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the remuneration re-
port, whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value
components of remuneration, as well as assessing the overall presentation of the remuneration report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the remuneration report of SGS SA for the year ended 31 December 2022 complies with Swiss law and arti-
cles 14–16 of the Ordinance.
PricewaterhouseCoopers SA
Guillaume Nayet Louise Rolland

Audit expert
Auditor in charge
Geneva, 22 February 2023
PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, CH-1211 Genève 2, Switzerland
Téléphone: +41 58 792 91 00, www.pwc.ch
PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

124 Financial
statements
We are
delivering
resilient
results.

24. Loans and other 155

1. SGS Group 126 financial liabilities Report on the audit of the 179
25. Defined benefit obligations 156 financial statements
1.1. Consolidated Income Statement 126 26. Provisions 162
1.2. Consolidated Statement 126 27. Trade and other payables 162
of Comprehensive Income
28. Contingent liabilities 162
1.3. Consolidated Statement 127
of Financial Position 29. Equity compensation plans 163 3. Historical data 183
1.4. Consolidated Statement 128 30. Related-party transactions 164
of Cash Flows 31. Significant shareholders 165
1.5. Consolidated Statement 129 32. Approval of financial 165 3.1. SGS Group – Five-Year 183
of Changes in Equity statements and Statistical Data Consolidated
1.6. Notes to Consolidated 130 subsequent events Income Statements
Financial Statements 3.2. SGS Group – Five-Year 184
Statistical Data of
1. Activities of the Group 130
Report on the audit 166 Financial Position
2. Significant accounting 130 3.3. SGS Group – Five-Year 185
policies and exchange rates of the consolidated Statistical Share Data
3. Business combinations 137 financial statements 3.4. SGS Group share information 185
4. Information by business 138 3.5. Closing prices for SGS and 186
and geographical segment the SMI 2021-2022
5. Revenues from contracts 139
with customers
6. Government grants 140
2. SGS SA 173
7. Other operating expenses 140 4. Material operating 187
2.1. Income Statement 173
8. Financial income 140
2.2. Statement of Financial Position 174
companies and
9. Financial expenses 140
2.3. Notes 175 ultimate parent
10. Taxes 141
11. Earnings per share 142 1. Significant accounting 175
and dividend per share policies
12. Property, plant 143 2. Subsidiaries 175
and equipment 3. Corporate bonds 175
13. Right-of-use assets 144 4. Total equity 176
and lease liabilities 5. Share capital 176
14. Goodwill 145 6. Financial income and 177
15. Other intangible assets 147 financial expenses
16. Other non-current assets 148 7. Extraordinary losses 177
17. Trade receivables 148 8. Guarantees and 177
18. Other receivables 148 comfort letters
and prepayments 9. Remuneration 177
19. Cash and cash equivalents 148 10. Shares and options held by 177
20. Cash flow statement 149 members of governing bodies
21. Acquisitions 150 11. Significant shareholders 178
22. Financial risk management 150
23. Share capital and 154
treasury shares

126 Financial
statements
1. SGS Group
1.1. Consolidated Income Statement
For the years ended 31 December
(CHF million) Notes 2022 2021
Revenue 4 6 642 6 405

Salaries and wages (3 331) (3 180)
Subcontractors’ expenses (399) (385)
Depreciation, amortization and impairment 12 to 15 (521) (499)
Other operating expenses 7 (1 493) (1 364)
Operating income (EBIT)1 4 898 977
Financial income 8 20 16
Financial expenses 9 (71) (69)
Share of profit of associates and joint ventures 2 –
Profit before taxes 849 924
Taxes 10 (219) (269)
Profit for the period 630 655
Profit attributable to:
Equity holders of SGS SA 588 613
Non-controlling interests 42 42
Basic earnings per share (in CHF) 11 78.86 81.91
Diluted earnings per share (in CHF) 11 78.67 81.79
1. Refer to note 4 for analysis of non–recurring items.
1.2. Consolidated Statement of Comprehensive Income

Actuarial (losses)/gains on defined benefit plans 25 (20) 57

Income tax on actuarial (losses)/gains 10 5 (6)
Items that will not be subsequently reclassified to income
(15) 51
statement
Exchange differences (148) (32)
Items that may be subsequently reclassified to income
(148) (32)
statement
Other comprehensive (loss)/income for the period (163) 19
Total comprehensive income for the period 467 674
Attributable to:
Equity holders of SGS SA 430 629

1.3. Consolidated Statement of Financial Position

At 31 December
Assets
Non-current assets
Property, plant and equipment 12 907 925
Right-of-use assets 13 577 605
Goodwill 14 1 755 1 778
Other intangible assets 15 350 382
Investments in joint ventures, associates and other companies 20 26
Deferred tax assets 10 153 164
Other non-current assets 16 125 173
Total non-current assets 3 887 4 053
Current assets
Inventories 59 59
Unbilled revenues and work in progress 5 210 175
Trade receivables 17 988 928
Other receivables and prepayments 18 223 204
Current tax assets 132 108
Cash and cash equivalents 19 1 623 1 480
Total current assets 3 235 2 954
Total assets 7 122 7 007
Equity and liabilities

Capital and reserves
Share capital 23 7 7
Reserves 954 1 118
Treasury shares (279) (8)
Equity attributable to equity holders of SGS SA 682 1 117
Total equity 763 1 202
Non-current liabilities
Loans and other financial liabilities 24 2 833 2 889
Lease liabilities 13 442 481
Deferred tax liabilities 10 79 92
Defined benefit obligations 25 47 84
Provisions 26 96 90
Total non-current liabilities 3 497 3 636
Current liabilities
Trade and other payables 27 671 687
Contract liabilities 5 228 221
Current tax liabilities 165 169
Loans and other financial liabilities 24 1 009 282
Lease liabilities 13 162 155
Provisions 26 58 60
Other creditors and accruals 569 595
Total current liabilities 2 862 2 169
Total liabilities 6 359 5 805
Total equity and liabilities 7 122 7 007

128 Financial
statements
1.4. Consolidated Statement of Cash Flows


Non-cash and non-operating items 20.1 812 828
(Increase) in working capital 20.2 (162) (44)
Taxes paid (250) (270)
Cash flow from operating activities 1 030 1 169
Purchase of property, plant and equipment and other intangible assets (329) (336)
Disposal of property, plant and equipment and other intangible assets 8 5
Acquisition of businesses 21 (67) (214)
Proceeds from disposal of businesses 2 –
Cash paid on other non-current assets (3) (2)
Proceeds received from investments in joint ventures, associates and
1 1
other companies
Interest received 19 17
Proceeds from marketable securities – 9
Cash flow used by investing activities (369) (520)
Dividends paid to equity holders of SGS SA (599) (599)
Dividends paid to non-controlling interests (43) (41)
Transaction with non-controlling interests 20.3 (9) (12)
Cash paid on treasury shares (268) –
Proceeds from corporate bonds 20.3 500 824
Payment of corporate bonds 20.3 (251) (276)
Interest paid (64) (66)
Payment of lease liabilities 20.3 (183) (179)
Proceeds from borrowings 20.3 469 –
Payment of borrowings 20.3 – (555)
Cash flow used by financing activities (448) (904)
Currency translation (70) (31)
Increase/(decrease) in cash and cash equivalents 143 (286)
Cash and cash equivalents at beginning of year 1 480 1 766

Increase/(decrease) in cash and cash equivalents 143 (286)
Cash and cash equivalents at end of year 19 1 623 1 480

1.5. Consolidated Statement of Changes in Equity

Attributable to:
Cumulative Retained
(losses)/gains earnings
Cumulative on defined and Equity Non-
Share Treasury Capital translation benefit plans Group holders controlling Total
(CHF million) capital shares reserve adjustments net of tax reserves of SGS SA interests equity
Balance at 1 January 2021 8 (230) 160 (1 307) (241) 2 670 1 060 74 1 134
Profit for the period – – – – – 613 613 42 655
Other comprehensive income
– – – (35) 51 – 16 3 19
for the period
Total comprehensive income
– – – (35) 51 613 629 45 674
for the period
Dividends paid – – – – – (599) (599) (41) (640)
Share-based payments – – 12 – – – 12 – 12
Movement in
– – – – – 14 14 7 21
non-controlling interests
Movement on treasury shares (1) 222 (42) – – (178) 1 – 1
Balance at 31 December 2021 7 (8) 130 (1 342) (190) 2 520 1 117 85 1 202
Balance at 1 January 2022 7 (8) 130 (1 342) (190) 2 520 1 117 85 1 202
Profit for the period – – – – – 588 588 42 630
Other comprehensive income
– – – (143) (15) – (158) (5) (163)
for the period
Total comprehensive income
– – – (143) (15) 588 430 37 467
for the period
Dividends paid – – – – – (599) (599) (43) (642)
Share-based payments – – 18 – – – 18 – 18
Movement in
– – – – – (8) (8) 2 (6)
non-controlling interests
Movement on treasury shares – (271) (4) – – (1) (276) – (276)
Balance at 31 December 2022 7 (279) 144 (1 485) (205) 2 500 682 81 763

130 Financial
statements
1.6. Notes to Consolidated Financial Statements

1. Activities of the Group
SGS SA and its subsidiaries (the ‘Group’) operate around the world under the name SGS. The head office of the Group is located in Geneva,
Switzerland.
SGS is the global leader in inspection, verification, testing and certification services supporting international trade in agriculture, minerals,
petroleum and consumer products. It also provides these services to governments, international institutions and customers engaged
in the industrial, environmental and life science sectors.
2. Significant accounting policies and exchange rates

Basis of preparation of the financial statements
The consolidated financial statements of the Group are stated in millions of Swiss Francs (CHF million). They are prepared from the
financial statements of the individual companies within the Group with all significant companies having a year end of 31 December 2022.
The consolidated financial statements comply with the accounting and reporting requirements of the International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and Swiss law.
The accounting conventions and accounting policies are the same as those applied in the 2021 consolidated financial statements,
except for the Group’s adoption of new IFRSs effective 1 January 2022.
The financial statements are prepared on an accruals basis and under the historical cost convention, modified as required for the revaluation
of certain financial instruments.
COVID-19 pandemic and geopolitical instability
COVID-19 and recent geopolitical events have impacted the economy and financial markets. Many industries are facing challenges, including
supply-chain disruption, inflation, deteriorating credit and liquidity concerns. Most notably, the Group’s operational performance was
temporarily affected by Covid-related restrictions in China, while its exposure to Russia and Ukraine is limited.
Consequently, these 2022 consolidated financial statements were prepared with particular attention to the below specific areas:
• Impairment of non-current assets: the Group has recognized a CHF 18 million impairment loss (2021: nil)
• Goodwill impairment test: the Group ran the annual impairment test with no impairment required (2021: nil)
• Appropriateness of expected credit loss allowance for trade receivables, unbilled revenue and work in progress: applying the simplified
approach for IFRS 9 expected credit loss model, the Group reviewed its impairment matrix to ensure it continues to reflect current and
future credit risks and assessed it as adequate
• Accounting for government grants: at 31 December 2022, the Group recognized CHF 12 million as deduction of salaries and wage
expenses (2021: CHF 16 million)
Adoption of new and revised International Financial Reporting Standards and Interpretations
Several new amendments and interpretations were adopted effective 1 January 2022 but have no material impact on the Group’s
consolidated financial statements. There are no IFRS standards or interpretations which are not yet effective and which would be
expected to have a material impact on the Group.
Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Group.
Control is achieved when the Group:
• Has power over the investee
• Is exposed, or has the right, to variable return from its involvement with the investee; and
• Has the ability to use its power to affect its return
The Company reassesses whether or not the Group controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control
of the subsidiary.
The principal operating companies of the Group are listed on pages 187 to 189.

Non-controlling interests
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Initially they are measured at the non-
controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. Subsequently to the acquisition, the
carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share
of subsequent changes in equity.
Associates
Associates are entities over which the Group has significant influence but no control or joint control over the financial and operating policies.
The consolidated financial statements include the Group’s share of the earnings of associates on an equity accounting basis from the date
that significant influence commences until the date that significant influence ceases.
Joint ventures
A joint venture is a contractual arrangement over which the Group exercises joint control with partners and where the parties have rights
to the net assets of the arrangement. The consolidated financial statements include the Group’s share of the earnings and net assets on
an equity accounting basis of joint ventures that it does not control, effective from the date that joint control commences until the date
that joint control ceases.
Joint operations
A joint operation is an arrangement whereby the parties that have joint control have separable specific rights to the assets and the liabilities
within the arrangement. When a Group entity undertakes its activities under joint operations, the Group as a joint operator recognizes in
relation to its interest in a joint operation:
• Its assets, including its share of any assets held jointly
• Its liabilities, including its share of any liabilities incurred jointly
• Its revenue from the sale of its share of the output arising from the joint operation
• Its share of the revenue from the sale of the output by the joint operation; and
• Its expenses, including its share of any expenses incurred jointly
Investments in companies not accounted for as subsidiaries, associates or jointly controlled entities
Investments in companies not accounted for as subsidiaries, associates or jointly controlled entities (normally below 20% shareholding levels)
are stated at fair value through profit and loss. Dividends received from these investments are included in financial income.
Transactions eliminated on consolidation
All intra-Group balances and transactions, and any unrealized gains and losses arising from intra-Group transactions, are eliminated in
preparing the consolidated financial statements. Unrealized gains and losses arising from transactions with associates and jointly controlled
entities are eliminated to the extent of the Group’s interest in those entities.
Foreign currency transactions
Transactions in foreign currencies are recorded at the foreign exchange rate prevailing at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate prevailing at that date.
Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which
they were initially recorded during the period or in previous financial statements, are recognized in the income statement.
Consolidation of foreign companies
All assets and liabilities of foreign companies that are consolidated are translated using the exchange rates in effect at the balance sheet
date. Income and expenses are translated at the exchange rate at the average exchange rate for the year, or at the rate on the date of the
transaction for significant items. Translation differences resulting from the application of this method are recognized in other comprehensive
income and reclassified to profit or loss on disposal. Average exchange rates are used to translate the cash flows of foreign subsidiaries
in preparing the consolidated statement of cash flows.
Revenue recognition
IFRS 15 Revenue from Contracts with Customers establishes a five-step model to account for revenue arising from contracts with
customers. Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled
in exchange for transferring services to a customer. The standard requires entities to exercise judgment, taking into consideration all of
the relevant facts and circumstances when applying each step of the model to contracts with their customers.
The Group recognizes revenue based on two main models: services transferred at a point in time and services transferred over time.
• The majority of SGS’ revenue is transferred at a point in time and recognized upon completion of performance obligations and measured
according to the transaction price agreed in the contract. Once services are rendered, e.g. a report issued, the customer is invoiced and
payment is due
• Services transferred over time mainly concern long-term contracts, where revenue is recognized based on the measure of progress.
When the Group has a right to consideration from a customer at the amount corresponding directly to the customer’s value of the
performance completed to date, the Group recognizes revenue in the amount to which it has a right to invoice. In all other situations, the
measure of progress is either based on observable output methods (usually the number of tests or inspection performed) or based on
input methods such as the time incurred to date relative to the total expected hours to the satisfaction of the performance obligation.
These invoices are usually issued per contractually agreed installments and prices. Payments are due upon invoicing

132 Financial
statements
Segment information
The Group reports its operations by business segment, according to the nature of the services provided.
The Group operates in five business segments:
• Connectivity & Products (C&P): end-markets covered include Electrical and Electronic goods, Softlines, Hardlines and Trade Facilitation
• Health & Nutrition (H&N): end-markets covered include Food, Crop Science, Health Science and Cosmetics & Hygiene
• Industries & Environment (I&E): end-markets covered include Field Services and Inspection, Technical Assessment and Advisory,
Industrial and Public Health & Safety, Environmental Testing and Public Mandates
• Natural Resources (NR): end-markets covered include Trade and Inspection of minerals, oil and gas and agricultural commodities,
Laboratory Testing, Metallurgy and Consulting and Market Intelligence
• Knowledge (Kn): end-markets covered include Management System Certification, Customized Audits, Consulting and Academy
The chief operating decision maker evaluates segment performance and allocates resources based on several factors, of which revenue,
adjusted operating income and capital expenditures are the main criteria.
For the Group, the chief operating decision maker is the senior management, which is composed of the Chief Executive Officer,
the Chief Financial Officer and the General Counsel.
All segment revenues reported are from external customers. Segment revenue and operating income are attributed to countries based
on the location in which the services are rendered.
Capital additions represent the total cost incurred to acquire land, buildings and equipment as well as other intangible assets.
Property, plant and equipment
Land is stated at historical cost and is not depreciated. Buildings and equipment are stated at historical cost less accumulated depreciation.
Subsequent expenditures are capitalized only if they increase the future economic benefits embodied in the related item of property and
equipment. All other expenditures are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful
life of the assets as follows:
• Buildings 12–40 years
• Machinery and equipment 5–10 years
• Other tangible assets 5–10 years
Right-of-use assets
The Group recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses. They are adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognized, initial direct costs incurred and lease payments made at or before the commencement
date, less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the
lease term, recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease
term. Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made
over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend
on an index or a rate, and amounts expected to be paid under residual value guarantees. The Group elected to use the practical expedient
to account for each lease component and any non-lease components as a single lease component. The lease payments also include the
exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease,
if the lease term reflects the Group exercising the option to terminate.
In the case that the implicit rate cannot be readily determined, the Group uses an incremental borrowing rate considering the country and
the lease duration. The rate is estimated by the combination of the reference rate, the financing spread and any asset specific adjustment
when required.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interests and reduced for the lease
payments made. Subsequently, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term,
a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. The Group applies
the short-term lease and low-value recognition exemptions. Lease payments on short-term leases and leases of low-value assets are
recognized as expenses on a straight-line basis over the lease term.
Goodwill
In the case of acquisitions of businesses, the acquired identifiable assets, liabilities and contingent liabilities are recorded at fair value.
The difference between the purchase price and the fair value is classified as goodwill and recorded in the statement of financial position
as an intangible asset.
Goodwill arising from business combinations is measured at cost less any accumulated impairment losses.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the
Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the
measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances
that existed at the acquisition date that, if known, would have affected amounts recognized at that date.
Goodwill arising on the acquisition of a foreign entity is recorded in the relevant foreign currency and is translated using the end of period
exchange rate.
On disposal of part or all of a business that was previously acquired and which gave rise to the recording of acquisition goodwill,
the relevant amount of goodwill is included in the determination of the gain or loss on disposal.
Goodwill acquired as part of business combinations is tested for possible impairment annually and whenever events or changes
in circumstances indicate their value may not be fully recoverable.

For the purpose of impairment testing, the Group has adopted a uniform method for assessing goodwill recognized under the acquisition
method of accounting. These assets are allocated to a cash generating unit or a group of cash generating units (CGU) which are expected
to benefit from the business combination. The recoverable amount of a CGU or the group of CGUs is determined through a value-in-
use calculation.
If the value-in-use of the CGU or the group of CGUs is less than the carrying amount of its net operating assets, then a fair value less costs
to sell valuation is also performed with the recoverable amount of the CGU or the group of CGUs being the higher of its value-in-use and
the fair value less costs to sell.
The key assumptions for the value-in-use calculations are those regarding the discount rates, growth rates, operating margins and expected
changes to selling prices or direct costs during the period. Pre-tax discount rates used are based on the Group’s weighted average cost of
capital, adjusted for specific risks associated with the CGUs or the group of CGUs’ cash flow projections. The growth rates are based on
industry growth forecasts.
Expected changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.
For all CGUs or groups of CGUs, a value-in-use calculation is performed using cash flow projections covering the next five years and
including a terminal growth assumption. These cash flow projections take into account the most recent financial results and outlook
approved by management.
If the recoverable amount of the CGU or of the group of CGUs is less than the carrying amount of the unit’s net operating assets, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of
the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.
Even if the initial accounting for an intangible asset acquired in the reporting period is only provisional, this asset is tested for impairment
in the year of acquisition.
Other intangible assets
Intangible assets, including software, licenses, trademarks and customer relationships are capitalized and amortized on a straight-line basis
over their estimated useful lives, normally not exceeding 20 years. The following useful lives are used in the calculation of amortization:
• Trademarks 5–20 years
• Customer relationships 2–20 years
• Computer software 3–5 years
Other intangible assets acquired as part of an acquisition of a business are capitalized separately from goodwill if their fair value can be
measured reliably. Internally generated intangible assets are recognized if the asset created can be identified, it is probable that future
economic benefits will be generated from it, the related development costs can be measured reliably and sufficient financial resources
are available to complete the development. These assets are amortized on a straight-line basis over their useful lives, which usually do
not exceed five years. All other development costs are expensed as incurred.
Impairment of assets excluding goodwill
At each balance sheet date, or whenever there is an indication that an asset may be impaired, the Group reviews the carrying amounts of
its tangible and intangible assets to determine whether they have suffered an impairment loss. If indications of impairment are present, the
assets are tested for impairment. If impaired, the carrying value of the asset is reduced to its recoverable value. Where it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs.
The recoverable amount of an asset is the greater of the fair value less cost of sale and its value-in-use. In assessing its value-in-use,
the pre-tax estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time-value of money and the risks specific to the asset.
Reversal of impairment losses
Where an impairment loss on assets other than goodwill subsequently reverses, the carrying amount of the asset or CGU is increased to
the revised estimate of its recoverable amount, but not in excess of the carrying amount that would have been recorded had no impairment
loss been recognized. A reversal of an impairment loss is recognized as income immediately.
Government grants
IAS 20 sets out the principle for the recognition, measurement, presentation and disclosure of government grants. Government grants that
are not related to assets are credited to the income statement as a deduction of the related expenses. Government grants are recognized
when there is a reasonable assurance that the grant will be received and all attached conditions will be met.
Trade receivables
Trade receivables are recognized and carried at original invoice amount less an allowance for any non-collectible amounts. An expected
credit loss allowance is made in compliance with the simplified approach using a provision matrix (expected credit loss model). This provision
matrix has been developed to reflect the country risk, the credit risk profile, as well as available forward looking and historical data. The Group
considers a trade receivable to be credit impaired when one or more detrimental events have occurred such as:
• Significant financial difficulty of the customer; or
• It is becoming probable that the customer will enter bankruptcy or other financial reorganization
Unbilled revenues and work in progress

Unbilled revenues are recognized for services completed but not yet invoiced and are valued at net selling price.
Work in progress is recognized for the partially finished performance obligations under a contract. The measure of progress is either based
on observable output methods or based on input methods. A margin is recognized based on actual costs incurred, provided that the project
is expected to be profitable once completed. Similarly to receivables, an allowance for unbilled revenues and work in progress is made in
compliance with the simplified approach using a provision matrix (expected credit loss model).
Cash and cash equivalents
Cash and cash equivalents include cash and deposits held with banks with an original maturity of three months or less, and are subject
to an insignificant risk of changes in value. Bank overdrafts are included within current loans.

134 Financial
statements
Derivative financial instruments and hedging

The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational,
financing and investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments
for trading purposes. Derivatives are accounted for on a mark-to-market basis.
Derivative financial instruments are initially recognized at fair value and subsequently remeasured at fair value at each balance sheet date.
The gains and losses resulting from the fair value remeasurement are recognized in the income statement. The fair value of forward
exchange contracts is determined with reference to market prices at the balance sheet date.
Corporate bonds
The corporate bonds issued by the Group are measured at amortized cost using the effective interest method, with interest expense
recognized on an effective yield basis.
The effective interest method is a method of calculating the amortized cost of a financial liability and allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of
the financial liability to the net carrying amount on initial recognition.
The Group uses financial instruments to economically hedge interest rate risks relating to its corporate bonds. The changes in fair value
of finance instruments are recognized in the income statement.
Liabilities related to put options granted to holders of non-controlling interests
Written put options in favor of holders of non-controlling interests give rise to the recognition of a financial liability at the present value of the
expected cash outflow. The present value is determined by management’s best estimate of the cash outflow required to settle the obligation
on exercise of the option, discounted by the Group’s cost of debt. The financial liability is initially recorded with the corresponding entry within
equity and in the absence of specific guidance in IFRS, subsequent changes in the valuation of the liability shall be recognized directly in
equity attributable to owners, including the unwinding of the discount.
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
• Level 1 fair value measurements are those derived from the quoted price in active markets
• Level 2 fair value measurements are those derived from inputs other than quoted prices that are observable for the asset and liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices)
• Level 3 fair value measurements are those derived from valuation techniques as it cannot be derived from publicly available information.
The assumptions and inputs used in the model take into account externally verifiable inputs. However, such information is by nature
subject to uncertainty, particularly where comparable market-based transactions often do not exist. External valuers are involved for
valuation for significant assets and liabilities
Employee benefits
Pension plans
The Group maintains several defined benefit and defined contribution pension plans in accordance with local conditions and practices in the
countries in which it operates. Defined benefit pension plans are based on an employee’s years of service and remuneration earned during
a pre-determined period. Contributions to these plans are normally paid into funds, which are managed independently of the Group, except
in rare cases where there is no legal obligation to fund.
In such cases, the liability is recorded in the Group’s consolidated statement of financial position.
The Group’s obligations towards defined benefit pension plans and the annual cost recognized in the income statement are determined
by independent actuaries using the projected unit credit method. Remeasurement gains and losses are immediately recognized in
the consolidated statement of financial position with the corresponding movement being recorded in the consolidated statement of
comprehensive income.
Past service costs are immediately recognized as an expense. Net interest expense is calculated by applying the discount rate at the
beginning of the period to the net defined benefit liability or asset. The retirement benefit obligation recognized in the statement of financial
position represents the present value of the defined benefit obligation reduced by the fair value of plan assets. Any asset resulting from
this calculation is limited to the present value of available refunds and reductions in future contributions to the plan. Payments to defined
contribution plans are recognized as an expense in the income statement as incurred.
Post-employment plans other than pensions
The Group operates some non-pension post-employment defined benefit schemes, mainly healthcare plans. The method of accounting
and the frequency of valuations are similar to those used for defined benefit pension plans.
Equity compensation plans
The Group provides additional benefits to certain senior executives and employees through equity compensation plans. An expense is
recognized in the income statement for shares and equity-linked instruments granted to senior executives and employees under these plans.
Trade payables
Trade payables are recognized at amortized cost that approximates the fair value.
Provisions
The Group records provisions when: it has an obligation, legal or constructive, to satisfy a claim; it is probable that an outflow of Group
resources will be required to satisfy the obligation; and a reliable estimate of the amount can be made.
In the case of litigation and claims relating to services rendered, the amount that is ultimately recorded is the result of a complex process
of assessment of a number of variables, and relies on management’s informed judgment about the circumstances surrounding the past
provision of services. It also relies on expert legal advice and actuarial assessments.
Changes in provisions are reflected in the income statement in the period in which the change occurs.

Contract liabilities
Contract liabilities arise upon advance payments from clients and issuance of upfront invoices.
Restructuring costs
The Group recognizes costs of restructuring against operating income in the period in which management has committed to a formal plan,
the costs of which can be reliably estimated, and has raised a valid expectation in those affected that the plan will be implemented and the
related costs incurred. Where appropriate, restructuring costs include impairment charges arising from the implementation of the formal plan.
Capital management
Capital comprises equity attributable to equity holders, loans and other financial liabilities, lease liabilities and cash and cash equivalents.
The Board of Directors’ policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence, and to sustain
the future development of the business. The Board also recommends the level of dividends to be distributed to ordinary shareholders on an
annual basis. The Group maintains sufficient liquidity at the Group and subsidiary level to meet its working capital requirements, fund capital
purchases and small and medium-sized acquisitions.
Treasury shares are intended to be used to cover the Group’s employee equity participation plan, convertible bonds and/or cancellation
of shares. Decisions to buy or sell are made on an individual transaction basis by management.
There were no changes in the Group’s approach to capital management during the year.
The Group is not subject to any externally imposed capital requirements.
Taxes
Income taxes include all taxes based upon the taxable profits of the Group, including withholding taxes payable on the transfer of income
from Group companies and tax adjustments from prior years. Taxes on income are recognized in the income statement except to the extent
that they relate to items directly charged or credited to equity or other comprehensive income, in which case the related income tax effect
is recognized in equity or other comprehensive income. Provisions of income and withholding taxes that could arise on the remittance of
subsidiary retained earnings are only made where there is a current intention to remit such earnings. Other taxes not based on income,
such as property taxes and capital taxes, are included within operating expenses.
Deferred taxes are provided using the full liability method. They are calculated on all temporary differences that arise between the tax base
of an asset or liability and the carrying values in the consolidated financial statements except for non-tax-deductible goodwill and for those
differences related to investments in subsidiaries where their reversal will not take place in the foreseeable future. Deferred income tax
assets relating to the carry-forward of unused tax losses and tax credits are recognized to the extent that it is probable that future taxable
profits will be available against which they can be used.
Current income tax assets and liabilities are off-set where there is a legally enforceable right to off-set. Deferred tax assets and liabilities
are determined based on enacted or substantively enacted tax rates in the respective jurisdictions in which the Group operates that are
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Earnings per share
Basic earnings per share are calculated by dividing the Group’s profit by the weighted average number of shares outstanding during the
year, excluding treasury shares. For diluted earnings per share, the weighted average number of shares outstanding is adjusted assuming
conversion of all potential dilutive shares. Group profit is also adjusted to reflect the after-tax impact of conversion.
Dividends
Dividends are reported as a movement in equity in the period in which they are approved by the shareholders.
Treasury shares
Treasury shares are reported as a deduction to equity. The original cost of treasury shares and the proceeds of any subsequent sale are
recorded as movements in equity.
Significant accounting estimates and judgments
Use of estimates
The key assumptions concerning the future, and other key sources of estimation at the balance sheet date that may have a risk of causing
a material adjustment to the carrying amount of assets and liabilities within the next financial year.
Business combinations
In a business combination, the determination of the fair value of the identifiable assets acquired, particularly intangibles, requires estimations
which are based on all available information and in some cases on assumptions with respect to the timing and amount of future revenues and
expenses associated with an asset. The purchase price is allocated to the underlying acquired assets and liabilities based on their estimated
fair value at the time of acquisition. The excess is reported as goodwill. As a result, the purchase price allocation impacts reported assets and
liabilities, future net earnings due to the impact on future depreciation and amortization expense and impairment charges. The purchase price
allocation is subject to a maximum period of 12 months adjustment.
Valuation of trade receivables, unbilled revenue and work in progress
The balances are presented net of expected credit loss allowance. These allowances for potential uncollected amounts are estimated in
compliance with the simplified approach using a provision matrix (expected credit loss model), which has been developed to reflect the
country risk, the credit risk profile, as well as available historical data. In addition, an allowance is estimated based on individual client
analysis when the collection is no longer probable.
Impairment of goodwill
The Group determines whether goodwill is impaired at a minimum on an annual basis. This requires identification of CGUs and an estimation
of the value-in-use of the CGUs to which the goodwill is allocated. Estimating the value-in-use requires the Group to make an estimate of
expected future cash flows from the CGU or group of CGUs that holds the goodwill at a determined discount rate in order to calculate the
present value of those cash flows.

136 Financial
statements
Estimations of employee post-employment benefits obligations

The Group maintains several defined benefit pension plans in accordance with local conditions and practices in the countries in which
it operates. The related obligations recognized in the statement of financial position represent the present value of the defined benefit
obligations calculated annually by independent actuaries. These actuarial valuations include assumptions such as discount rates, salary
progression rates and mortality rates. These actuarial assumptions vary according to the local prevailing economic and social conditions.
Income taxes
The Group is subject to income taxes in numerous jurisdictions. There are many transactions and calculations for which the ultimate tax
determination is uncertain.
In assessing how an uncertain tax treatment may affect the determination of the taxable profit (tax loss), the Group assumes that a taxation
authority will examine amounts and have full knowledge of all related information.
If the Group concludes it is not probable that a taxation authority will accept a particular tax treatment, the Group reflects the effect of each
uncertainty in determining the taxable profit (tax loss) by using one of the following methods:
• The single most likely amount
• The sum of probability-weighted amount in a range of possible outcomes
The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due, including
estimated interest and penalties where appropriate. Where the final tax outcome of these matters is different from the amounts that
were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which
such determination is made.
Legal and warranty claims on services rendered
The Group is subject to litigation and other claims. Management bases its judgment on the circumstances relating to each specific
event, internal and external legal advice, knowledge of the industries and markets, prevailing commercial terms and legal precedent, and
evaluation of applicable insurance cover where appropriate. The process of estimation is complex, dealing with uncertainty, requiring the
use of informed estimates, actuarial assessment, evaluation of the insurance cover where appropriate and the judgment of management.
The timing of cash outflows from pending litigation and claims is uncertain since it depends, in the majority of cases, on the outcome of
administrative and legal proceedings. The Group’s legal and warranty claims are reviewed, at a minimum, on a quarterly basis by a cross-
functional representation of management. Any changes in these estimates are reflected in the income statement in the period in which
the estimates change.
Judgments
In the process of applying the entity’s accounting policies described above, management has made the following judgment that has a
significant effect on the amounts recognized in the financial statements.
Lease termination of contracts with renewal and exit options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend
the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not
to be exercised.
The Group has the option, for some of its leases to lease the assets for additional terms. The Group applies judgment in evaluating whether
it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to
exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew.
Exchange rates
The most significant currencies for the Group were translated at the following exchange rates into Swiss Francs:
Statement of financial position Income statement

period-end rates period average rates
2022 2021 2022 2021
Australia AUD 100 62.70 66.59 66.33 68.67

Canada CAD 100 68.20 71.65 73.40 72.93
Chile CLP 100 0.11 0.11 0.11 0.12
China CNY 100 13.29 14.40 14.20 14.17
Eurozone EUR 100 98.47 103.78 100.52 108.16
Korea KRW 100 0.07 0.08 0.07 0.08
United Kingdom GBP 100 111.47 123.57 118.01 125.72
Russia RUB 100 1.31 1.24 1.43 1.24
Taiwan TWD 100 3.01 3.32 3.21 3.27
USA USD 100 92.43 91.72 95.44 91.42

3. Business combinations
The following business combinations occurred during 2022 and 2021:
Business combinations 2022
In 2022, the Group completed 7 business combinations for a total purchase price of CHF 75 million (note 21).
• 100% of Gas Analysis Services (GAS), a company specialized in instrumentation and gas analysis testing in Ireland (effective
28 February 2022)
• 100% of Ecotecnos, a company providing sea monitoring and oceanography services in Chile (effective 6 May 2022)
• 100% of AIEX, a company providing technical and welding inspection services in the nuclear and marine industries in France (effective
9 May 2022)
• 100% of Silver State Analytical Laboratories and Excelchem Laboratories, companies providing quality analytical and microbiological
testing and support services for clients in the environmental, water, utility, engineering, construction, food processing, chemical, mining,
healthcare, resort and hospitality industries (effective 1 July 2022)
• 100% of proderm GmbH, a company conducting clinical studies from initial consultation to final reports in Germany (effective 7 July 2022)
• 100% of Penumbra Security, a recognized leader providing various types of information security conformance testing to government
standards and regulatory compliance for multinational companies in the USA (effective 31 August 2022)
• 100% of Industry Lab, a company offering a comprehensive range of microbiological analysis services, from enumeration of indicator
organisms to detection of foodborne pathogens, located in Romania (effective 3 November 2022)
These companies were acquired for an amount of CHF 75 million and the total goodwill generated on these transactions amounted to
CHF 52 million.
All the above transactions contributed a total of CHF 20 million in revenue and CHF 3 million in operating income in 2022. Had all acquisitions
been effective 1 January 2022, the revenue for the period from these acquisitions would have been CHF 32 million and the operating income
would have been CHF 5 million.
On 7 July 2022, the Group has acquired proderm GmbH, a clinical research organization, specialized in advanced solutions for cosmetics and
personal care as well as medical clinical studies. This acquisition further supports the Group strategic expansion in cosmetics and hygiene.
proderm GmbH has contributed CHF 6 million to Group’s revenue and CHF 1 million to operating income in 2022. Had the company been
acquired on 1 January 2022 the revenue for the year would have been CHF 12 million and the operating income would have been CHF
2 million.
None of the goodwill arising on these acquisitions is expected to be tax deductible.
Divestment 2022
In 2022, the Group disposed of its US Drilling operations in the USA for a total consideration of CHF 2 million.
Business combinations 2021
In 2021, the Group completed 9 business combinations for a total purchase price of CHF 237 million (note 21).
• 100% of Analytical & Development Services (ADS), a company providing food testing in the UK (effective 7 January 2021)
• 55.92% majority stake into BZH GmbH Deutsches Beratungszentrum für Hygiene, a German based subsidiary of SYNLAB Analytics
& Services (A&S) food testing laboratory (effective 29 January 2021)
• 100% of Autoscope/CTOK, a provider of vehicle testing services in France (effective 2 February 2021)
• 100% of International Service Laboratory (ISL), a company providing regulated analytical laboratory and stability testing services for
a broad variety of pharmaceutical products (effective 1 April 2021)
• 100% of Brightsight, a company operating in cybersecurity in the Netherlands (effective 4 May 2021)
• 100% of Metair Lab, a company providing air sampling and asbestos testing services in France (effective 1 June 2021)
• 100% of Groupe IDEA TESTS (IDEA), a provider of clinical, microbiological and in-vitro testing services in France (effective
1 December 2021)
• 66.67% of Sulphur Experts Inc. a company supporting customers in the amine treating and sulfur recovery industries in Canada (effective
1 December 2021)
• 100% of Quay Pharmaceuticals Ltd (Quay Pharma), a leading innovative Formulation Research and Development Organization with
a comprehensive and flexible range of services, in the UK (effective 6 December 2021)
These companies were acquired for an amount of CHF 237 million and the total goodwill generated on these transactions amounted to
CHF 163 million.
All the above transactions contributed a total of CHF 46 million in revenue and CHF 5 million in operating income in 2021. Had all acquisitions
been effective 1 January 2021, the revenue for the period from these acquisitions would have been CHF 93 million and the operating income
would have been CHF 12 million.
On 4 May 2021 SGS has acquired Brightsight. This acquisition will significantly strengthen Group’s presence in the cybersecurity sector.
Brightsight has contributed CHF 13 million to Group’s revenue and CHF 1 million operating income in 2021. Had the company been acquired
on 1 January 2021 the revenue for the year would have been CHF 20 million and the operating income would have been CHF 2 million.
On 6 December 2021 SGS has acquired Quay Pharmaceuticals Limited. This acquisition supports Group’s strategy of increasing the scope
of services to support our customers across the Health Science supply chain. Quay Pharmaceuticals Limited has contributed CHF 1 million
to Group’s revenue and nil to operating income in 2021. Had the company been acquired on 1 January 2021 the revenue for the year would
have been CHF 20 million and the operating income would have been CHF 4 million.
None of the goodwill arising on these acquisitions is expected to be tax deductible.
Divestment 2021
There were no significant disposals in 2021.

138 Financial
statements
4. Information by business and geographical segment

The information presented is disclosed by business line and focuses on revenue, operating income, capital expenditures and employee
numbers because these are the performance measures used by the Chief Operating Decision Maker to assess segment performance.
Analysis of operating income
(CHF million) 2022 2021
Adjusted operating income* 1 023 1 055

Amortization and impairment of acquired intangibles (37) (39)
Restructuring costs (46) (15)
Transaction and integration costs (13) (24)
Other non-recurring items (29) –
Operating income 898 977
Analysis of revenue and operating income

2022
Adjusted Amortization Restructuring Transaction Other Operating
operating of acquisition costs and integration non-recurring income
(CHF million) Revenue income* intangibles costs items by business
Connectivity & Products 1 311 313 (5) (12) (1) – 295

Health & Nutrition 892 119 (9) (6) (4) – 100
Industries & Environment 2 157 224 (19) (15) (6) (29) 155
Natural Resources 1 583 225 (1) (10) (1) – 213
Knowledge 699 142 (3) (3) (1) – 135
Total 6 642 1 023 (37) (46) (13) (29) 898
2021
Adjusted Amortization Restructuring Transaction Operating
operating of acquisition costs and integration income
(CHF million) Revenue income* intangibles costs by business
Connectivity & Products 1 288 316 (5) (2) (1) 308

Health & Nutrition 861 149 (7) (2) (9) 131
Industries & Environment 2 120 240 (21) (5) (11) 203
Natural Resources 1 473 210 – (6) (1) 203
Knowledge 663 140 (6) – (2) 132
Total 6 405 1 055 (39) (15) (24) 977
Restructuring costs
The Group incurred a pre-tax restructuring charge of CHF 46 million (2021: CHF 15 million). Total restructuring costs comprised personnel
reorganization of CHF 26 million (2021: CHF 13 million) as well as fixed asset impairment of CHF 2 million (2021: CHF nil million) and other
charges of CHF 18 million (2021: CHF 2 million).
Other non-recurring items
The Group reported as non-recurring items a charge of CHF 29 million in 2022, related to the decision to cease two key upstream projects
in Libya. This decision is driven by absence of cash collection for services rendered in 2022, resulting in an impairment of fixed assets of
CHF 16 million in addition to incurred personnel costs of CHF 3 million and other charges of CHF 10 million.
Revenue from external customers by geographical area
(CHF million) 2022 % 2021 %
Europe/Africa/Middle East 2 944 44.3 2 954 46.1

Americas 1 364 20.5 1 212 18.9
Asia Pacific 2 334 35.2 2 239 35.0
Total 6 642 100.0 6 405 100.0
Revenue in Switzerland from external customers for 2022 amounted to CHF 164 million (2021: CHF 160 million). No country represented
more than 20% of revenues from external customers in 2022 nor 2021.
Major customer information
In 2022 and 2021, no external customer represented 5% or more of the Group’s total revenue.

Specific non-current assets by geographical area

Specific non-current assets directly attributable to geographical segment mainly include property, land and equipment, right-of-use assets,
goodwill and other intangible assets:
(CHF million) 2022 % 2021 %
Europe/Africa/Middle East 2 224 60.6 2 317 61.3

Americas 824 22.4 819 21.7
Asia Pacific 623 17.0 643 17.0
Total specific non-current assets 3 671 100.0 3 779 100.0
Specific non-current assets in Switzerland for 2022 amounted to CHF 169 million (2021: CHF 162 million). No country represented more than
20% of non-current assets in 2022 nor 2021.
Reconciliation with total non-current assets
Specific non-current assets as above 3 671 3 779

Deferred tax assets 153 164
Retirement benefit assets 59 104
Non-current loans to third parties 4 6
Total 3 887 4 053
Capital additions¹ by business segment
(CHF million) 2022 % 2021 %
C&P 107 32.5 96 28.6

H&N 52 15.8 62 18.4
I&E 88 26.8 97 28.9
NR 75 22.8 75 22.3
Kn 7 2.1 6 1.8
Total 329 100.0 336 100.0
1. Capital additions represent the total cost incurred to acquire land, buildings and equipment as well as other intangible assets.
Average number of employees by geographical area

(Average number of employees) 2022 2021
Europe/Africa/Middle East 39 906 39 239

Americas 19 370 18 092
Asia Pacific 37 483 35 966
Total 96 759 93 297
Number of employees at year end 98 152 96 216
5. Revenues from contracts with customers

Group’s revenue from contracts with customers by timing of recognition
2022 2021
Services Services Services Services

transferred at transferred transferred at transferred
(CHF million) a point in time over time a point in time over time
Connectivity & Products 86% 14% 81% 19%

Health & Nutrition 84% 16% 84% 16%
Industries & Environment 71% 29% 70% 30%
Natural Resources 84% 16% 85% 15%
Knowledge 90% 10% 93% 7%
Total 81% 19% 80% 20%

140 Financial
statements
Assets and liabilities related to contracts with customers

Unbilled revenue and work in progress 210 175

Trade receivables 988 928
Contract liabilities 228 221
Revenue evolution, timing and project maturity are the main factors impacting assets and liabilities related to contracts with customers.
In 2022, SGS has recognized revenue of CHF 159 million related to contract liabilities at 31 December 2021. In 2021, the revenue recognized
from contract liabilities at 31 December 2020 amounted to CHF 125 million. Revenue recognized from performance obligations satisfied in
previous periods were immaterial in 2022 and 2021.
The remaining performance obligations (unsatisfied or partially satisfied) expected to be recognized for long-term contracts amount
to CHF 918 million at 31 December 2022, out of which CHF 488 million are expected to be recognized in revenue within one year,
CHF 241 million between one year and two years and CHF 189 million after the next two years.
SGS is applying the practical expedient IFRS 15.121 and does not disclose unsatisfied or partially unsatisfied performance obligations
from contracts with an original duration of one year or less or where SGS may recognize revenue from the satisfaction of the performance
obligation in accordance with IFRS 15.B16. This paragraph permits as a practical expedient to exclude contracts where SGS has a right to
payment for performance completed to date.
Assets recognized from costs to fulfill a contract in 2022 and 2021 were not significant, while amortization and impairment losses were nil.
6. Government grants
Government grants for the period amount to CHF 12 million (2021: CHF 16 million), presented as a deduction of salaries and wages
expenses. The outstanding balance recognized in the statement of financial position amounted to CHF 5 million (2021: CHF 4 million).
7. Other operating expenses
Consumables, repairs and maintenance 546 534

Travel costs 314 269
Rental expense, insurance, utilities and sundry supplies 168 146
External consultancy fees 115 119
IT expenses 116 103
Communication costs 53 64
Allowance for expected credit losses 22 (3)
Gain on disposal of property, plant and equipment (4) –
Miscellaneous operating expenses 163 132
Total 1 493 1 364
8. Financial income
Interest income 11 12
Foreign exchange gains/(losses) 5 4
Other financial income 3 –
Net financial income on defined benefit plans 1 –
Total 20 16
9. Financial expenses
Interest expense 43 46
Loss on derivatives at fair value 19 8
Other financial expenses 9 15
Total 71 69

10. Taxes
Major components of tax expense
Current taxes 227 258

Deferred tax (credit) relating to the origination and reversal
of temporary differences (8) 11
Total 219 269
The Group has operations in various countries that have different tax laws and rates. Consequently, the effective tax rate on consolidated
income varies from year to year. A reconciliation between the reported income tax expense and the amount that would arise using the
weighted average statutory tax rate of the Group is as follows:
Reconciliation of tax expense

Tax at statutory rates applicable to the profits earned in the country concerned 162 178
Tax effect of non-deductible or non-taxable items 10 17
Tax effect on losses not currently treated as being recoverable in future years 17 9
Tax effect on losses previously considered irrecoverable, now expected to be recoverable (3) (4)
Non-creditable foreign withholding taxes 37 42
Minimum taxes 5 6
Prior period adjustments (10) 12
Rate changes – 7
Other 1 2
Tax charge 219 269
Deferred tax after netting

Deferred tax assets 153 164

Deferred tax liabilities (79) (92)
Total 74 72
Components of deferred income tax balances

2022 2021
(CHF million) Assets Liabilities Assets Liabilities
Right of use assets – 122 – 126

Fixed assets 44 11 44 9
Trade receivable, unbilled revenues and work in progress 25 8 25 6
Defined benefit obligation 7 14 13 22
Provisions and other 56 11 59 12
Lease liabilities 126 – 132 –
Intangible assets 3 75 2 79
Tax losses carried forward 54 – 51 –
Deferred income taxes 315 241 326 254

142 Financial
statements
Net change in deferred tax assets/(liabilities)

(CHF million) Total
Net deferred income tax asset (liability) at 1 January 2021 108

Acquisition of subsidiaries (22)
(Charged)/credited to the income statement (11)
(Charged)/credited to other comprehensive income (6)
Exchange differences and other 3
Net deferred income tax asset (liability) at 31 December 2021 72
Acquisition of subsidiaries (4)
(Charged)/credited to the income statement 8
(Charged)/credited to other comprehensive income 5
Exchange differences and other (7)
Net deferred income tax asset (liability) at 31 December 2022 74
The Group has unrecognized tax losses carried forward amounting to CHF 194 million (2021: CHF 161 million).
Unrecognized tax losses carryforwards at 31 December 2022
(CHF million)
Expiring in the next 3 years 9

Expiring in 4-10 years 43
Available without limitation 142
Total unrecognized tax losses 194
At 31 December 2022, the unrecognized deferred tax assets amount to CHF 57 million (2021: CHF 48 million).
At 31 December 2022, the retained earnings of subsidiaries and foreign incorporated joint ventures consolidated by the Group include
approximately CHF 2 415 million (2021: CHF 2 805 million) of undistributed earnings that may be subject to tax if remitted to the parent
company. As set out in note 22, the nature of the Group’s business requires keeping a significant part of the cash reserves in the operating
units. The Group takes the view that a deferred tax liability is required when it is probable that unremitted earnings will be distributed in the
foreseeable future.
11. Earnings per share and dividend per share

Basic earnings per share are calculated as follows:
2022 2021
Profit attributable to equity holders of SGS SA (CHF million) 588 613

Weighted average number of shares (‘000) 7 452 7 488
Basic earnings per share (CHF) 78.86 81.91
Diluted earnings per share are calculated as basic earnings per share except that the weighted average number of shares only includes the
dilutive effect of the Group’s equity compensation plans detailed in note 29. For the year ended 31 December 2022, the Group calculated
17 540 dilutive potential shares (2021: 11 661):
2022 2021
Profit attributable to equity holders of SGS SA (CHF million) 588 613

Diluted weighted average number of shares (‘000) 7 470 7 500
Diluted earnings per share (CHF) 78.67 81.79
The Board of Directors will recommend to the Annual General Meeting (to be held on 28 March 2023) the approval of a dividend of CHF 80
per share (2021: CHF 80).

12. Property, plant and equipment

Land & Machinery Other tangible
(CHF million) buildings & equipment assets Total
2022
Cost
At 1 January 463 2 327 719 3 509
Additions 11 154 126 291
Acquisition of subsidiaries 4 2 4 10
Disposals (4) (98) (35) (137)
Exchange differences and other (14) (45) (112) (171)
At 31 December 460 2 340 702 3 502
Accumulated depreciation and impairment
At 1 January 267 1 826 491 2 584
Depreciation 17 184 52 253
Impairment – 17 1 18
Acquisition of subsidiaries – 1 2 3
Disposals (3) (97) (33) (133)
Exchange differences and other (12) (94) (24) (130)
At 31 December 269 1 837 489 2 595
Net book value at 31 December 2022 191 503 213 907

(CHF million) buildings & equipment assets Total
2021
Cost
At 1 January 464 2 142 715 3 321
Additions 17 151 130 298
Disposals (20) (72) (56) (148)
Exchange differences and other (4) 91 (78) 9
At 31 December 463 2 327 719 3 509
Accumulated depreciation and impairment
At 1 January 271 1 692 486 2 449
Depreciation 16 179 54 249
Impairment 1 – – 1
Disposals (19) (71) (53) (143)
Exchange differences and other (3) 19 (1) 15
At 31 December 267 1 826 491 2 584
Net book value at 31 December 2021 196 501 228 925
Included in the other tangible assets are leasehold improvements, office furniture and IT hardware, as well as construction-in-progress assets
amounting to CHF 52 million (2021: CHF 63 million).
At 31 December 2022, the Group had commitments of CHF 6 million (2021: CHF 8 million) for the acquisition of land, buildings
and equipment.

144 Financial
statements
13. Right-of-use assets and lease liabilities

Right-of-use assets Total Lease liabilities

(CHF million) buildings & equipment assets
At 1 January 528 71 6 605 636

Additions 136 44 3 183 174
Acquisition 3 – – 3 3
Depreciation expense (139) (42) (3) (184) –
Interest expense – – – – 21
Payment of lease liabilities and interests – – – – (199)
Exchange difference and other (26) (4) – (30) (31)
At 31 December 2022 502 69 6 577 604
Analyzed as: 2022
Current liabilities 162

Non-current liabilities 442
Total 604
Right-of-use assets Total Lease liabilities

(CHF million) buildings & equipment assets
At 1 January 516 68 6 590 621

Additions 141 50 4 195 190
Acquisition 8 1 – 9 9
Depreciation expense (135) (44) (4) (183) –
Interest expense – – – – 22
Payment of lease liabilities and interests – – – – (198)
Exchange difference and other (2) (4) – (6) (8)
At 31 December 2021 528 71 6 605 636
Analyzed as: 2021
Current liabilities 155

Non-current liabilities 481
Total 636
Included in machinery & equipment are mainly vehicles for CHF 68 million (2021: CHF 67 million).

The following table summarizes the main foreign currencies of the lease liabilities.
Euro (EUR) 241 257

US Dollar (USD) 93 99
Renminbi Yuan (CNY) 63 77
Taiwan Dollar (TWD) 24 30
Canadian Dollar (CAD) 18 21
Australian Dollar (AUD) 17 20
Indian Rupee (INR) 13 11
Korean Won (KRW) 12 11
British Pound Sterling (GBP) 8 7
Hong Kong Dollar (HKD) 7 3
Chilean Peso (CLP) 7 4
Singapore Dollar (SGD) 6 8
Russian Ruble (RUB) 6 7
New Zealand Dollar (NZD) 5 6
Other 84 75
Total 604 636
The Group leases mainly offices, laboratory spaces and vehicles. During the year ended 31 December 2022, an additional CHF 9 million
(2021: CHF 6 million) was recognized as an expense in the income statement.
IFRS 16 Other quantitative information

Expense relating to short-term leases 4 3
Expense relating to leases of low value assets 5 3
Total expense recognized in income statement 9 6
14. Goodwill
Cost
At 1 January 1 778 1 651
Additions 52 163
Consideration/fair value adjustments on prior years’ acquisitions 1 3
Exchange differences (76) (39)
At end of the period 1 755 1 778
The Cash Generating Units (CGU) and groups of CGUs allocation has been done in accordance with IAS 36, which defines a CGU as the
lowest level of a group of assets generating cash inflows that are largely independent from other assets and groups of assets.
In the case of the following two divisions, the CGU covers the entire worldwide operations since customer activities executed by the local
entities, the clients and customers that they serve and the drivers of cash inflows are largely interdependent on a worldwide basis across
each business line:
• Connectivity & Products (C&P)
• Natural Resources (NR)
The Health & Nutrition (H&N) division is split into two worldwide CGUs to reflect the global nature of customer activities and drivers
of cash inflows in each sub-division: Nutrition, Health Science and Cosmetics & Hygiene
The Industry & Environment (I&E) division includes Vehicle Compliance and Upstream activities. To best reflect the interdependency of the
cash inflows, Vehicle Compliance has been split into two distinct CGUs regrouping regulated services activities in Spain and in France since
customers in this sector are country specific. Upstream services is assessed as one separate CGU regrouping the worldwide Upstream
activities for which cash inflows are independent from the rest of the I&E activities
For the remaining I&E activities (excluding Vehicle Compliance and Upstream services), business is driven primarily by regional or local
customer activities, therefore cash inflows are largely independent from each other. Consequently, a CGU organization by region has
been maintained, split regionally into four CGUs in line with the Group’s regional reporting structure.
The Knowledge (Kn) division is split into two CGUs, one regrouping the Technical Consultancy business in the USA for which cash inflows
remain largely independent from the rest of the division’s activities and the other regrouping the remaining worldwide Knowledge activities
for which there are synergies across the Group’s network, generating interdependent cash inflows

146 Financial
statements
Allocation of goodwill to CGUs or group of CGUs

Goodwill allocated to the main CGUs or groups of CGUs, as of 31 December is broken down as follows:
Connectivity & Products 166 173

Health & Nutrition1 471 462
Industries & Environment2 904 924
Natural Resources 115 119
Knowledge 99 100
Total 1 755 1 778
1. Within H&N, goodwill allocated to Nutrition CGU was CHF 184 million (2021: CHF 192 million) and goodwill allocated to Health Science and Cosmetics & Hygiene CGU was CHF 287 million
(2021: CHF 270 million).
2. Within I&E, goodwill allocated to I&E Europe/Africa/Middle East CGU was CHF 462 million (2021: CHF 476 million).
Goodwill impairment reviews have been conducted for all goodwill balances allocated to the CGUs as described above.
The recoverable amount of each of the CGUs, determined based upon a value-in-use calculation, is higher than its carrying amount thus
resulting in no goodwill impairment in 2022. Cash flow projections were used in this calculation, discounted at a pre-tax rate depending
on the business activities and geographic profile of each of the respective CGUs.
Pre-tax discount rate used in 2022 for the main CGUs or group of CGUs impairment testing
2022 2021
Connectivity & Products 8.4% 10.5%

Health & Nutrition1 7.9%-8.0% 7.6%-8.5%
Industries & Environment2 7.6%-9.9% 6.2%-14.5%
Natural Resources 8.4% 10.2%
Knowledge 6.7%-8.2% 8.7%-10.8%
1. Nutrition pre-tax discount rate was 8.0% (2021: 8.5%), while Health Science and Cosmetics & Hygiene pre-tax discount rate was 7.9% (2021: 7.6%).
2. Within I&E, I&E Europe/Africa/Middle East pre-tax discount rate was 7.8% (2021: 7.8%).
The cash flow projections for the first five years were based upon financial plans, approved by the Group, for each CGU or group of CGUs.
The overall assumptions used in the cash flow projections are consistent with the expected average growth rates of the segments served
by the Group. For the subsequent years, the Group assumes a long-term growth rate in the range of 1%-2% (1% for CGUs where goodwill
allocated is significant), in line with market long-term inflation rates projections (2021: range of 0%-2%, 1% for CGUs where goodwill
allocated is significant), and stable operating margins depending on each CGU or group of CGUs.
Sensitivity to changes in assumption
Sensitivity analyses were conducted using the following key assumptions:
• Reducing the expected annual revenue growth rates for the first five years by 2 pp1
• Reducing the operating margin by 0.25 pp1
• Increasing the discount rate assumption by 1 pp1
For all impairment tests, changing the key assumptions retained in the scenario using the sensitivity analyses described above would not
result in any additional impairment, with the exception of our CGU Vehicle Compliance Spain, for which goodwill amounts to CHF 115 million.
For this CGU:
• Recoverable amount currently exceeds carrying amount by CHF 9 million
• Expected annual growth rate has been assumed at 3% for the projected period. A reduction by more than 40% (1.3 pp1) would cause the
recoverable amount to equal the carrying amount
• Pre-tax discount rate has been assumed at 9%. An increase by 0.5 pp1 would cause the recoverable amount to equal the carrying amount
Technical consultancy USA goodwill impairment test assumptions

In 2021, Technical consultancy USA delivered lower results than expected, due to a slower recovery from unfavorable economic environment
created by Covid-19.
In 2022, the CGU’s results bounced back as expected, delivering revenue growth above 50% (above prior year assumptions), as well as
delivering margin in line with prior year assumptions. The recoverable amount currently exceeds the carrying amount by CHF 117 million.
The following key assumptions have been used in the impairment test for this CGU:
• Pre-tax discount rate of 6.7% (2021: 10.8%, assuming a risk size premium of 3.49%)
• After a strong recovery in 2022, assumptions consider an average revenue growth of 12.6% for 2023-2027 (2021: revenue growth rate
above 50% for 2022, average revenue growth rate of 14% for 2023-2026)
• Average EBITDA margin to gradually reach its historical trend prior to the Covid-19 pandemic, but capped in the low 20s by 2026
• Long-term growth rate of 1% after 2027 (2021: long-term growth rate of 2%)
No reasonably possible change in any of the above key assumptions above would cause the recoverable amount to fall below the carrying
amount for this CGU, for which the Group’s share of goodwill is CHF 82 million.
1. Percentage points.

15. Other intangible assets

Computer software
and Other assets
Trademarks Customer Internally

(CHF million) and Other relationships generated Purchased Total
2022
Cost
At 1 January 92 454 202 200 948
Additions – – 17 21 38
Acquisition of subsidiaries – 17 – 1 18
Disposals – (2) – (6) (8)
Exchange differences and other (3) (23) 1 (11) (36)
At 31 December 89 446 220 205 960
Accumulated amortization
and impairment
At 1 January 66 176 159 165 566
Amortization 5 32 18 11 66
Acquisition of subsidiaries – – – 1 1
Disposals – (2) – (6) (8)
Exchange differences and other (3) (7) (1) (4) (15)
At 31 December 68 199 176 167 610
Net book value at 31 December 2022 21 247 44 38 350
Computer software
and Other assets
Trademarks Customer Internally

(CHF million) and Other relationships generated Purchased Total
2021
Cost
At 1 January 91 388 182 262 923
Additions – – 21 17 38
Acquisition of subsidiaries 9 63 – 2 74
Disposals – – (5) (85) (90)
Exchange differences and other (8) 3 4 4 3
At 31 December 92 454 202 200 948
Accumulated amortization
and impairment
At 1 January 65 144 147 234 590
Amortization 5 34 14 12 65
Impairment – – 1 – 1
Disposals – – (5) (85) (90)
Exchange differences and other (4) (2) 2 4 –
At 31 December 66 176 159 165 566
Net book value at 31 December 2021 26 278 43 35 382

148 Financial
statements
16. Other non-current assets

Non-current loans or amounts receivable from third parties 4 6

Retirement benefit asset 59 104
Other non-current assets 62 63
Total 125 173
Other non-current assets are measured at fair value through profit and loss except non-current loans or amounts receivable from third parties
that are measured at amortized cost.
Depending on the nature of the balances, currency and date of maturity, interest rates on long-term balances or loans to third parties range
between 0.0% and 8.0%.
In 2022, other non-current assets included deposits for guarantees and restricted cash of CHF 38 million (2021: CHF 37 million).
Typical examples of restricted cash are cash deposits for performance bonds, rentals and other operating obligations.
At 31 December 2022 and 2021, the fair value of the Group’s other non-current assets approximates their carrying value.
17. Trade receivables

Trade receivables 1 149 1 090

Allowance for expected credit losses (161) (162)
Total 988 928
The movement of allowance for expected credit losses is analyzed as follows:
At 1 January (162) (176)

Acquisition of subsidiaries (1) –
Decrease/(Increase) in allowance recognized in the income statement (16) 2
Utilizations 10 9
Exchange differences 8 3
Total at 31 December (161) (162)
18. Other receivables and prepayments

Accrued income, prepayments 86 78

Derivative assets 12 11
Other receivables 125 115
Total 223 204
The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties. Other receivables
consist mainly of sales taxes and other taxes recoverable as well as advances to suppliers.
19. Cash and cash equivalents

Cash and short-term deposits 1 623 1 479

Short-term loans – 1
Total 1 623 1 480

20. Cash flow statement

20.1. Non-cash and non-operating items
Depreciation of property, plant and equipment 12 253 249

Impairment of property, plant and equipment and other intangible assets 12 and 15 18 2
Depreciation/impairment right-of-use asset 13 184 183
Amortization of intangible assets 15 66 65
ECL1 on trade receivables, unbilled revenues and work in progress 22 (3)
Net financial expenses 8 and 9 51 53
(Decrease) in provisions and employee benefits (13) (2)
Share-based payment expenses 18 12
Gain on disposals of property, land and equipment (4) –
Share of results from associates and other entities (2) –
Taxes 10 219 269
Non-cash and non-operating items 812 828
1. Expected Credit Losses.
20.2. (Increase)/decrease in working capital

(Increase) in unbilled revenues and inventories (53) (14)

(Increase) in trade receivables (125) (74)
(Increase) in other receivables and prepayments (25) (27)
Increase in trade and other payables 7 37
Increase in other creditors and accruals 25 61
Increase/(decrease) in other provisions 9 (27)
(Increase)/decrease in working capital (162) (44)
20.3. Changes in liabilities arising from financing activities
Cash impact Non cash impact
Financing cash Equity Acquisition and Other

(CHF million) 1 January flows movement disposals New leases movements1 31 December
2022
Corporate bonds 3 100 249 – – – (39) 3 310
Bank loans 5 469 – 3 – (8) 469
Put option on acquisition 33 (4) 1 – – (1) 29
Lease liabilities 636 (183) – 3 174 (26) 604
Other financial liabilities 26 (5) – 5 – – 26
Total 3 800 526 1 11 174 (74) 4 438
1. Other movements include interest accruals and payments, amortization under effective rate method, currency effects and other contingent consideration movements.
Cash impact Non cash impact
Financing cash Equity Acquisition and Other

(CHF million) 1 January flows movement disposals New leases movements1 31 December
2021
Corporate bonds 2 600 548 – – – (48) 3 100
Bank loans 556 (555) – 4 – – 5
Put option on acquisition 62 – (27) – – (2) 33
Lease liabilities 621 (179) – 9 190 (5) 636
Other financial liabilities 23 (12) 13 – – 2 26
Total 3 862 (198) (14) 13 190 (53) 3 800
1. Other movements include interest accruals and payments, amortization under effective rate method, currency effects and other contingent consideration movements.

150 Financial
statements
21. Acquisitions
Assets and liabilities arising from acquisitions
Total fair value Total fair value
Fair value on Fair value on other on acquisitions on acquisitions
(CHF million) proderm GmbH acquisitions December 2022 December 2021
Property, plant and equipment 2 5 7 16

Right-of-use assets 2 1 3 9
Intangible assets 13 4 17 74
Other long-term assets – – – 2
Trade receivable 2 3 5 12
Other current assets 1 1 2 8
Cash and cash equivalents 3 3 6 20
Current liabilities (4) (5) (9) (35)
Non-current liabilities (6) (2) (8) (27)
Non-controlling interests – – – (5)
Net assets acquired 13 10 23 74
Goodwill 31 21 52 163
Total purchase price 44 31 75 237
Acquired cash and cash equivalents (3) (3) (6) (20)
Consideration payable – (5) (5) (3)
Payment on prior year acquisitions – 3 3 –
Net cash outflow on acquisitions 41 26 67 214
In compliance with IFRS 3, fair value on acquisition remains provisional for a 12-month period following the date of acquisition, during which
the Group can finalize the purchase price allocation.
The goodwill arising on these acquisitions relates mainly to the value of expected synergies and the value of the qualified workforce that do
not meet the criteria for recognition as separable intangible assets. Consideration payable relates mainly to environmental and commercial
warranty clauses and the fair value of contingent future earn-out payments.
The Group incurred transaction-related costs of CHF 5 million (2021: CHF 8 million) related to external legal fees, due diligence expenses and
the costs of maintaining an internal acquisition department. These expenses are reported within other operating expenses in the consolidated
income statement.
22. Financial risk management

Risk management policies and objectives
The Group’s activities expose it primarily to market, credit and liquidity risk. Market risk includes foreign exchange, interest rate and equity
price risks.
The risk management policies and objectives are governed by the Group’s policies approved by the Board of Directors.
The Group’s risk management policies are designed to identify and analyze these risks, to set appropriate risk limits and controls and to
monitor the risk and limits continually by means of reliable and up-to-date administrative and information systems.
The Audit Committee oversees how management monitors compliance with the Group’s risk management policies. The Audit Committee
is assisted in its oversight role by Internal Audit.
Risk management activities
The Group uses foreign exchange contracts to manage the Group’s exposure to fluctuations in foreign currency exchange rates.
These activities are carried out in accordance with the Group’s risk management policies and objectives in areas such as counterparty
exposure and economic hedging practices. Counterparties to these agreements are major international financial institutions with high
credit ratings and positions are monitored using market value and sensitivity analyses. The associated credit risk is therefore limited.
These agreements generally include the exchange of one currency for a second currency at a future date.
The following table summarizes foreign exchange contracts outstanding at year end. The notional amount of derivatives summarized below
represents the gross amount of the contracts and includes transactions, which have not yet matured. Therefore the figures do not reflect the
Group’s net exposure at year end. The market value approximates the costs to settle the outstanding contracts. These market values should
not be viewed in isolation but in relation to the market values of the underlying hedged transactions and the overall reduction in the Group’s
exposure to adverse fluctuations in foreign exchange rates.

Currently, the Group has certain exposure to interest and credit risks and no exposure to equity price risk.
Notional amount Market value
(CHF million) 2022 2021 2022 2021
Foreign exchange forward contracts

Currency:
Australian Dollar (AUD) (15) (8) – –
Brazilian Real (BRL) (5) (25) (1) 1
Canadian Dollar (CAD) (5) 11 – –
Chilean Peso (CLP) (34) (26) (3) 1
Chinese Renminbi (CNY) (22) (7) – –
Colombian Peso (COP) (4) (3) – –
Euro (EUR) 441 186 – –
British Pound Sterling (GBP) (119) (141) 2 (2)
Hong Kong Dollar (HKD) 18 (20) – –
Indian Rupee (INR) 1 2 – –
Japanese Yen (JPY) (3) (1) – –
Kenyan Shilling (KES) – (4) – –
Korean Won (KRW) 3 2 – –
New Zealand Dollar (NZD) (6) (11) – –
Philippines Peso (PHP) (13) (15) (1) –
Polish Zloty (PLN) 1 (4) – –
Russian Ruble (RUB) – 2 – –
Turkish New Lira (TRY) 1 3 – (1)
US Dollar (USD) (268) (237) 7 2
South African Rand (ZAR) (10) (17) – 1
Other (38) (24) (1) –
Total (77) (337) 3 2
Credit risk management

Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. It arises principally from the Group’s
commercial activities. Trade receivable, unbilled revenues and work in progress are subject to a policy of active risk management which
focuses on the assessment of country risk, credit limits and approval procedures. Due to its large geographic base and number of customers,
the Group is not exposed to material concentrations of credit risk on its trade receivable, unbilled revenue and work in progress.
As at 31 December 2022, the Group has unbilled revenue and work in progress of CHF 210 million (2021: CHF 175 million) which is net
of an allowance for expected credit losses of CHF 20 million (2021: CHF 15 million).
Receivables are recognized and carried at original invoice amount less an allowance for any non-collectible amounts. A credit loss allowance
is made in compliance with the simplified approach using a provision matrix (expected credit loss model). This provision matrix has been
developed to reflect the country risk, the credit risk profile and available historical data. Similarly to receivables an allowance for unbilled
revenues and work in progress is made using a provision matrix.
Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision matrix based on aging
of trade receivables as of invoice date at 31 December 2022:
Expected credit Gross Expected

(CHF million) loss range carrying amount credit loss
0 – 90 days 0%-5% 910 2

91 – 120 days 10%-25% 47 10
121 – 180 days 20%-50% 47 19
181 – 240 days 35%-75% 25 15
241 – 300 days 50%-75% 14 10
301 – 360 days 75%-100% 10 9
> 360 days 100% 96 96
Total 1 149 161

152 Financial
statements
Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision matrix based on ageing
of trade receivables as of invoice date at 31 December 2021:
Expected credit Gross Expected

(CHF million) loss range carrying amount credit loss
0 – 90 days 0%-5% 863 4

91 – 120 days 10%-25% 43 8
121 – 180 days 20%-50% 36 14
181 – 240 days 35%-75% 20 12
241 – 300 days 50%-75% 11 8
301 – 360 days 75%-100% 7 6
> 360 days 100% 110 110
Total 1 090 162
As part of financial management activities, the Group enters into various types of transaction with international banks, usually with a credit
rating of at least A. Exposure to these risks is closely monitored and kept within predetermined parameters. The Group does not expect any
non-performance by these counterparties. The maximum credit risk to which the Group is theoretically exposed at 31 December 2022 is the
carrying amount of financial assets including derivatives.
In addition, the Group has issued CHF 181 million (2021: CHF 178 million) financial guarantees to certain financial institutions that have
provided credit facilities and foreign exchange lines to its subsidiaries. Management believes the likelihood that a material payment will
be required under these guarantees is remote.
Analysis of financial assets by class and category at 31 December 2022:
Fair value
Amortized At fair value

cost At fair value through Equity through P&L Total
Carrying Carrying Carrying Carrying

(CHF million) amount Fair value amount Fair value amount Fair value amount Fair value
Cash and cash-equivalents 1 623 1 623 – – – – 1 623 1 623

Trade receivables 988 988 – – – – 988 988
Other receivables¹ 132 132 – – – – 132 132
Unbilled revenues and
210 210 – – – – 210 210
work in progress
Loans to third parties –
4 4 – – – – 4 4
non-current
Derivatives – – – – 12 12 12 12
Total financial assets 2 957 2 957 – – 12 12 2 969 2 969
1. Excluding VAT and other tax related items.
Analysis of financial assets by class and category at 31 December 2021:

Fair value
Amortized At fair value

cost At fair value through Equity through P&L Total

Cash and cash-equivalents 1 480 1 480 – – – – 1 480 1 480

Trade receivables 928 928 – – – – 928 928
Other receivables¹ 132 132 – – – – 132 132
Unbilled revenues and
175 175 – – – – 175 175
work in progress
Loans to third parties –
6 6 – – – – 6 6
non-current
Derivatives – – – – 11 11 11 11
Total financial assets 2 721 2 721 – – 11 11 2 732 2 732
In the fair value hierarchy, Level 1 measurements are those derived from the quoted price in active markets. Level 2 fair value measurements
are those derived from inputs other than quoted prices that are observable for the asset and liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices). Derivative assets (2022: CHF 12 million; 2021: CHF 11 million) qualify as Level 2 fair value measurement category
in accordance with the fair value hierarchy. Derivative assets consist of foreign currency forward contracts that are measured using quoted
forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contract.

Liquidity risk management

The objective of the Group’s liquidity and funding management is to ensure that all its foreseeable financial commitments can be met when
due. Liquidity and funding are primarily managed by Group Treasury in accordance with practices and limits set in the risk management
policies and objectives approved by the Board of Directors.
The nature of the Group’s business requires keeping a significant part of the cash reserves in the operating units.
Due to the significant cash position, liquidity risk is limited. The Group has various committed and uncommitted bilateral credit facilities
with its banks.
Analysis of financial liabilities by class and category at 31 December 2022:
Fair value
At fair value
Amortized cost At fair value through Equity through P&L Total

Trade payables 360 360 – – – – 360 360

Other payables¹ 130 130 – – – – 130 130
Loans and other financial
3 792 3 606 29 29 21 21 3 842 3 656
liabilities
Lease liabilities 604 604 – – – – 604 604
Total financial liabilities 4 886 4 700 29 29 21 21 4 936 4 750
The corporate bonds qualify as fair value Level 1, which amounts to CHF 3 124 million (2021: CHF 3 166 million).
Other financial liabilities include CHF 29 million qualifying as fair value Level 3 (2021: CHF 33 million), which represents the estimated
present value of the redemption amount to acquire the remaining non-controlling interests of acquisitions if the put/call option is exercised.
Subsequent changes in the valuation of the redemption amount to acquire the remaining non-controlling interests of acquisitions if the
put/call option is exercised shall be recognized directly in equity attributable to owners, including the unwinding of the discount.
The remaining financial liabilities qualify as Level 2 determined in accordance with generally accepted pricing models.
Analysis of financial liabilities by class and category at 31 December 2021:
Fair value
At fair value
Amortized cost At fair value through Equity through P&L Total

Trade payables 368 368 – – – – 368 368

Other payables¹ 152 152 – – – – 152 152
Loans and other financial
3 119 3 185 33 33 19 19 3 171 3 237
liabilities
Lease liabilities 636 636 – – – – 636 636
Total financial liabilities 4 275 4 341 33 33 19 19 4 327 4 393
Undiscounted contractual maturities of financial liabilities including interest payments at 31 December 2022:
Gross settled Gross settled

derivative derivative Loans
financial financial and Other
Trade Other instruments instruments financial Lease Total
(CHF million) payables payables¹ outflows inflows liabilities liabilities
On demand or within one year 360 130 1 301 (1 299) 1 014 173 1 679
Within the second year – – – – 283 125 408
Within the third year – – – – 409 89 498
Within the fourth year – – – – 716 64 780
Within the fifth year – – – – 747 45 792
After five years – – – – 771 135 906

154 Financial
statements
Undiscounted contractual maturities of financial liabilities including interest payments at 31 December 2021:
Gross settled Gross settled

derivative derivative Loans
financial financial and Other
Trade Other instruments instruments financial Lease
(CHF million) payables payables¹ outflows inflows liabilities liabilities Total
On demand or within one year 368 152 1 167 (1 165) 285 171 978
Within the second year – – – – 535 135 670
Within the third year – – – – 274 98 372
Within the fourth year – – – – 250 73 323
Within the fifth year – – – – 710 57 767
After five years – – – – 1 189 189 1 378
The Group economically hedges its foreign exchange exposure on a net basis. The net position of the gross settled derivative financial
instruments of CHF 2 million (2021: CHF 2 million) represents the net nominal value expressed in CHF of the Group’s foreign currency
contracts outstanding at 31 December 2022.
Sensitivity analyses
The estimated changes in the value of net foreign currency positions are based on an instantaneous 5% weakening of the Swiss Franc
against all other currencies from the level applicable at 31 December 2022 and 2021 with all other variables remaining constant.
Sensitivity analysis based on net hedged positions at 31 December 2022 and 2021:
2022 2021
Income Income
statement impact Equity impact statement impact Equity impact
(CHF million) income/(expense) increase/(decrease) income/(expense) increase/(decrease)
US Dollar (USD) 4 (2) 4 (2)

Euro (EUR) (2) – (2) –
CFA Franc BEAC (CFA) 2 – 2 –
Canadian Dollar (CAD) – 2 – 2
U.A.E. Dirham (AED) (1) – – –
Interest rate risk management

The Group is exposed to fair value interest rate risk because the Group borrows funds at fixed interest rates. Where appropriate, the risk
is managed by the Group using Interest Rate Swap contracts. Hedging activities are evaluated regularly to align with interest rate views
and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.
If interest rates were 50 basis points higher/lower, the profit for the year ended 31 December 2022 would increase/decrease by CHF 5 million
(2021: CHF nil million).
23. Share capital and treasury shares

Shares in Treasury Total shares Total share capital
circulation shares issued (CHF million)
Balance at 1 January 2021 7 469 238 96 494 7 565 732 8

Treasury shares released into circulation 22 434 (22 434) – –
Treasury shares cancelled – (70 700) (70 700) (1)
Balance at 31 December 2021 7 491 672 3 360 7 495 032 7
Treasury shares purchased for equity compensation plans (12 500) 12 500 – –
Treasury shares purchased for cancellation (113 499) 113 499 – –
Issued share capital

SGS SA has a share capital of CHF 7 495 032 (2021: CHF 7 495 032) fully paid in and divided into 7 495 032 (2021: 7 495 032) registered
shares of a par value of CHF 1. All shares, other than own shares, participate equally in the dividends declared by the Company and have
equal voting rights.

Treasury shares
On 31 December 2022, SGS SA held 125 978 treasury shares (2021: 3 360 shares). The shares purchased for cancellation are directly
held by SGS SA, while the shares to cover the equity compensation plans are held by a subsidiary company.
In 2022, 3 381 treasury shares were sold or given in relation with the equity compensation plans and 12 500 were repurchased.
On 21 June 2022, SGS SA announced a CHF 250 million share buyback program for the purpose of capital reduction. The program ended on
21 December 2022 and 113 499 shares were repurchased for a total amount of CHF 250 million at an average price of CHF 2 203 per share.
Authorized and Conditional issue of share capital
The Board has the authority to increase the share capital of SGS SA by a maximum of 500 000 registered shares of a par value of
CHF 1 each, corresponding to a maximum increase of CHF 500 000 in share capital. The Board is mandated to issue the new shares
at the market conditions at the time of issue. In the event that the new shares are issued for an acquisition, the Board is authorized
to waive the shareholders’ preferential right of subscription or to allocate such subscription right to third parties.
The authority delegated by the shareholders to the Board of Directors to increase the share capital is valid until 23 March 2023.
The shareholders have conditionally approved an increase of share capital in the amount of CHF 1 100 000, divided into 1 100 000 registered
shares of a par value of CHF 1 each. This conditional share capital increase is intended to procure the necessary shares to satisfy employee
equity participation plans and option or conversion rights to be incorporated in convertible bonds or similar equity-linked instruments that the
Board is authorized to issue. The right to subscribe to such conditional capital is reserved for beneficiaries of employee equity participation
plans and holders of convertible bonds or similar debt instruments and therefore excludes shareholders’ preferential rights of subscription.
The Board is authorized to determine the timing and conditions of such issues, provided that they reflect prevailing market conditions.
The term of exercise of the options or conversion rights may not exceed ten years from the date of issuance of the equity-linked instruments.
24. Loans and other financial liabilities
Bank loans and commercial paper 469 5

Corporate bonds 3 310 3 100
Put option on acquisition 29 33
Other financial liabilities 26 26
Derivatives 8 7
Total 3 842 3 171
Current 1 009 282
Non-current 2 833 2 889
In 2022, the Group started to issue commercial paper out of its EUR 1 billion Euro Commercial Paper (ECP) program, for an amount of
EUR 472 million (CHF 465 million) as at 31 December 2022.
Depending on the nature of the loan, currency and date of maturity, interest rates on long-term loans from third parties range between
0.125% and 13.22%, and on short-term loans from third parties range between 0.25% and 54.00%.
The loans from third parties exposed to fair value interest rate risk amounted to CHF 3 778 million (2021: CHF 3 104 million) and the loans
from third parties exposed to cash flow interest rate risk amounted to CHF less than 0.7 million (2021: CHF less than 0.5 million).
SGS SA issued the following corporate bonds listed on the SIX Swiss Exchange:
Face value in Year of Issue Redemption

Date of issue CHF Million Coupon in % Maturity price in % price in %
27.02.2014 250 1.750 2024 101.019 100.000

08.05.2015 325 0.250 2023 100.079 100.000
08.05.2015 225 0.875 2030 100.245 100.000
03.03.2017 375 0.550 2026 100.153 100.000
29.10.2018 225 0.750 2025 100.068 100.000
29.10.2018 175 1.250 2028 101.157 100.000
06.05.2020 175 0.450 2023 100.117 100.000
06.05.2020 325 0.950 2026 100.182 100.000
05.09.2022 150 1.250 2025 100.000 100.000
05.09.2022 350 1.700 2029 100.197 100.000
SGS Nederland Holding BV has issued the following corporate bond, which is guaranteed by SGS SA and which is listed on the Luxembourg
Stock Exchange:

Date of issue EUR million Coupon in % maturity price in % price in %
21.04.2021 750 0.125 2027 99.761 100.000

156 Financial
statements
The currency composition of bank loans, corporate bonds and other financial liabilities is as follows:
Bank loans and corporate bond Put option and other financial liabilities
(CHF million) 2022 2021 2022 2021
Swiss Franc (CHF) 2 574 2 325 12 15

Euro (EUR) 1 201 775 20 20
Singapore Dollar (SGD) 3 5 13 13
US Dollar (USD) – – 1 1
British Pound Sterling (GBP) – – 1 1
Canadian Dollar (CAD) – – 4 4
New Zealand Dollar (NZD) – – 3 3
Other 1 – 1 2
Total 3 779 3 105 55 59
25. Defined benefit obligations

The Group mainly operates defined benefit pension plans in Switzerland, the USA, the UK, the Netherlands, Germany, Italy, France, Belgium,
South Korea and Taiwan. Contributions to most plans are paid to pension funds that are legally separate entities.
The Group also operates post-employment benefit plans, principally healthcare plans, in the USA and Switzerland. They represent a defined
benefit obligation at 31 December 2022 of CHF 5 million (2021: CHF 11 million). The method of accounting and the frequency of valuation are
similar to those used for defined benefit pension plans. Healthcare cost trend assumptions do not have a significant effect on the amounts
recognized in the income statement.
There is a risk to the Group that adverse experience could lead to a requirement for the Group to make additional contributions to recover
any deficit that arises.
The Group’s material defined benefit plans are in Switzerland, the USA and the UK.
Switzerland
The Group jointly operates with the employees a retirement foundation in Switzerland. The assets and liabilities of the retirement foundation
are held separately from the Group. The foundation board is equally composed of representatives of the employees and representatives of
the employer. This foundation covers all the employees in Switzerland and provides benefits on a defined contribution basis.
Each employee has a retirement account to which the employee and the Group contribute at a rate set out in the foundation rules based
on a percentage of salary. Every year, the foundation decides the level of interest, if any, to apply to retirement accounts based on the
agreed policy. At retirement, employees can elect either to withdraw all or part of the balance of their retirement account or to convert
it into annuities at pre-defined conversion rates.
As the foundation board is expected to eventually pay out all of the foundation’s assets as benefits to employees and former employees,
no surplus is deemed to be recoverable by the Group. Similarly, unless the assets are insufficient to cover minimum benefits, the Group
does not expect to make any deficit contribution to the foundation.
According to IFRS, the foundation has to be classified as a defined benefit plan due to underlying benefit guarantees and has to be accounted
for on this basis.
The weighted average duration of the expected benefit payment is approximately 12 years (2021: 14 years).
The Group expects to contribute CHF 5 million to this plan in 2023.
The Group also operates an employer fund. The assets are held separately from the Group. This foundation has unilateral power to provide
benefits and consequently has no obligations. Therefore, this foundation has no pension liabilities.
United States of America
The Group operates a non-contributory defined benefit plan, which is subject to the provisions of the Employee Retirement Income Security
Act (ERISA).
The assets of the plan are held separately from the Group by the trustee-custodian and the plan’s third-party pension administrator who
disburses payments directly to retirees or beneficiaries under the plan. Both the trustee-custodian and the administrator ensure adherence
to ERISA rules.
Funding valuations are calculated on an actuarial basis and contributions are made as necessary. The funding target is to provide the plan with
sufficient assets to meet future plan obligations.
Effective 16 March 2004, non-exempt participants ceased accruing any additional benefits; only exempt employees of certain SGS business
units in the USA are eligible for annual benefit accrual. In addition, the pension benefit was changed and is defined as a percentage of the
current year’s pensionable compensation; the cost of additional benefit accrual is evaluated annually. The Group reserves the right to make
future changes to the benefit accrual structure of the plan.
Eligible employees become participants in the plan after the completion of one year of service and after reaching the age of 21.
Participants become fully vested in the plan after five years of service.
The weighted average duration of the expected benefit payment is approximately 10 years (2021: 13 years).
The Group expects to contribute CHF 6 million to this plan in 2023.

United Kingdom
The Group operates a defined benefit plan through a trust, with the assets of the plans held separately from the Group and trustees who
ensure the plan’s rules are strictly adhered to. This plan has been closed to new entrants since 2002, and effective 31 October 2020, all
remaining participants ceased accruing any additional benefits in the defined benefit plan. Employees are now offered membership in
defined contribution plans operated by the Group.
Funding valuations of the defined benefit plans are carried out and agreed between the Group and the plan trustees at least once every
three years. The funding target is for the plans to hold assets equal in value to the accrued benefits based on projected salaries. As part
of the valuation process, if there is a shortfall against this target, then the Group and trustees will agree on deficit contributions to meet
this deficit over a specified period.
The weighted average duration of the expected benefit payments from the combined plans is approximately 14 years (2021: 19 years).
The Group expects to contribute CHF nil million to this plan in 2023.
Other countries
The Group sponsors defined retirement benefits plans in other countries where the Group operates. No individual countries other than those
described above are considered material and need to be separately disclosed. The Group expects to contribute CHF 4 million to those plans
in 2023.
The assets and liabilities recognized in the statement of financial position at 31 December for defined benefit obligations and for
post-employment benefit plans are as follows:
(CHF million) CH UK USA Other Total
2022
Fair value of plan assets 494 134 156 77 861
Present value of funded defined benefit obligation (357) (115) (150) (79) (701)
Funded/(unfunded) status 137 19 6 (2) 160
Present value of unfunded defined benefit obligation (5) – (3) (41) (49)
Unrecognized asset due to asset ceiling (98) – – (1) (99)
Net asset/(liability) at 31 December 34 19 3 (44) 12
2021
Fair value of plan assets 485 255 201 85 1 026
Present value of funded defined benefit obligation (445) (194) (193) (100) (932)
Funded/(unfunded) status 40 61 8 (15) 94
Present value of unfunded defined benefit obligation (11) – (4) (57) (72)
Unrecognized asset due to asset ceiling – – – (2) (2)
The net asset of CHF 12 million (2021: net asset of CHF 20 million) includes CHF 59 million (2021: CHF 104 million) of pension fund assets
recognized in the item other non-current assets in note 16 and CHF 47 million (2021: CHF 84 million) of pension fund liability recognized in the
item Defined Benefit Obligation in statement of financial position.
Amounts recognized in the income statement:
2022
Service cost expense 8 – 1 6 15
Net interest income on defined benefit plan – (1) – – (1)
Administrative expenses – 1 1 – 2
Total expense due to defined benefit obligation at 31 December 8 – 2 6 16
Expense charged in:
Salaries and wages 8 1 2 6 17
Financial expenses – (1) – – (1)

158 Financial
statements
2021
Service cost expense 9 – 2 5 16
Net interest expense on defined benefit plan – (1) – 1 –
Administrative expenses – 1 1 – 2
Expense charged in:
Salaries and wages 9 1 3 5 18
Financial expenses – (1) – 1 –
Amounts recognized in the statement of other comprehensive income:
2022
Remeasurement on net defined benefit liability
Change in demographic assumptions – – – (1) (1)
Change in financial assumptions (87) (68) (43) (34) (232)
Experience adjustments on benefit obligations 3 7 (1) 3 12
Actual return on plan assets excluding net interest expense (21) 99 50 14 142
Asset ceiling 98 – – 1 99
Total recognized in the statement of other comprehensive income
(7) 38 6 (17) 20
at 31 December
2021
Remeasurement on net defined benefit liability
Change in demographic assumptions – (1) 1 (1) (1)
Change in financial assumptions (13) (9) (10) (3) (35)
Experience adjustments on benefit obligations 6 – (4) 34 36
Actual return on plan assets excluding net interest expense (30) 1 4 (33) (58)
Asset ceiling – – – 1 1
Total recognized in the statement of other comprehensive income
(37) (9) (9) (2) (57)
at 31 December
In 2022, the Group recognized a CHF 99 million asset ceiling (2021: CHF 1 million), mainly made of a CHF 98 million (2021: CHF nil million)
increase for the SGS Swiss Pension Plan. The maximum economic benefit available in the SGS Swiss Pension Plan was determined applying
the common approach prescribed by IFRIC 14, and reflects the present value of reductions in future contributions to the plan. In making
this estimate, assumptions used for future service costs are consistent with those used to determine the defined benefit obligation as at
31 December 2022.
Movements in the net asset/(liability) during the period:
2022
Net asset/(liability) at 1 January 29 61 4 (74) 20
Expense recognized in the income statement (8) – (2) (6) (16)
Remeasurements recognized in other comprehensive income 7 (38) (6) 17 (20)
Contributions paid by the Group 6 – 7 13 26
Employer benefit payments – – – 3 3
Exchange differences – (4) – 3 (1)

2021
Net asset/(liability) at 1 January (3) 50 (9) (84) (46)
Expense recognized in the income statement (9) – (3) (6) (18)
Remeasurements recognized in other comprehensive income 37 9 9 2 57
Effect of acquisitions/disposals (2) – – – (2)
Contributions paid by the Group 6 1 8 11 26
Employer benefit payments – – – 1 1
Exchange differences – 1 (1) 2 2
Change in the defined benefit obligation is as follows:
2022
Opening present value of the defined benefit obligation 456 194 197 159 1 006
Current service cost 8 – 1 6 15
Interest cost 1 4 6 2 13
Plan participants’ contributions 5 – – 1 6
Actual net benefit payments (24) (7) (10) (9) (50)
(Gains)/losses due to changes in demographic assumptions – – – (1) (1)
(Gains)/losses due to changes in financial assumptions (87) (68) (43) (34) (232)
Experience differences 3 7 (1) 3 12
Exchange rate (gains)/losses – (15) 3 (7) (19)
Defined benefit obligation at 31 December 362 115 153 120 750
2021
Opening present value of the defined benefit obligation 457 203 205 132 997
Current service cost 9 – 2 6 17
Interest cost – 3 5 1 9
Plan participants’ contributions 4 – – – 4
Past service cost – – – (1) (1)
Net increase/(decrease) in DBO from acquisitions/disposals 8 – – – 8
(Gains)/losses due to changes in demographic assumptions – (1) 1 (1) (1)
(Gains)/losses due to changes in financial assumptions (13) (9) (10) (3) (35)
Experience differences 6 – (4) 34 36
Exchange rate (gains)/losses – 8 8 (2) 14
Defined benefit obligation at 31 December 456 194 197 159 1 006

160 Financial
statements
Change in fair value of plan assets is as follows:
2022
Opening fair value of plan assets 485 255 201 85 1 026
Interest income on plan assets 1 5 6 2 14
Return on plan assets excluding amounts included in net
interest expense 21 (99) (50) (14) (142)
Actual employer contributions 6 – 7 16 29
Actual plan participants’ contributions 5 – – 1 6
Actual admin expenses paid – (1) (1) – (2)
Exchange differences – (19) 3 (4) (20)
Fair value of plan assets at 31 December 494 134 156 77 861
2021
Opening fair value of plan assets 454 253 196 48 951
Interest income on plan assets – 4 5 – 9
Return on plan assets excluding amounts included in net
interest expense 30 (1) (4) 33 58
Actual employer contributions 6 1 8 12 27
Actual plan participants’ contributions 4 – – – 4
Actual admin expenses paid – (1) (1) – (2)
Net increase/(decrease) in assets from acquisitions 6 – – – 6
Exchange differences – 9 7 (1) 15
Fair value of plan assets at 31 December 485 255 201 85 1 026
There are no reimbursement rights included in plan assets. The actual return on plan assets was a loss of CHF 128 million (2021: gain
of CHF 67 million).
The major categories of plan assets at the balance sheet date are as follows:
2022
Cash and cash equivalents 26 12 – 18 56
Equity securities 136 15 17 – 168
Debt securities 68 106 138 1 313
Assets held by insurance company 3 – – 21 24
Properties 217 – – – 217
Investment funds 44 – – – 44
Other – 1 1 37 39
Total plan assets at 31 December 494 134 156 77 861
2021
Cash and cash equivalents 26 19 1 18 64
Equity securities 176 36 25 – 237
Debt securities 56 200 175 1 432
Assets held by insurance company 3 – – 66 69
Properties 175 – – – 175
Investment funds 46 – – – 46
Other 3 – – – 3
Total plan assets at 31 December 485 255 201 85 1 026

In 2022 and 2021, the Group did not occupy any property that was included in the plan assets.
Properties are rented at fair market rental rates. There are no SGS SA shares or any other financial securities used by the Group included
in plan assets.
The plan assets are primarily held within instruments with quoted market prices in an active market, with the exception of the property
and insurance policy holdings.
The investment strategy in Switzerland is to invest, within the statutory and legal requirements, in a diversified portfolio with the aim of
generating long-term returns, which will enable the Board of the foundation to grow the accounts of the members of the pension fund,
whilst taking on the lowest possible risk in order to do so.
In the USA, the pension plan target policy is determined by both quantitatively and qualitatively assessing the risk tolerance level and return
requirements of the plan as determined by the Investment Committee. The investment portfolio asset allocation and structure are developed
based on the results of this process. In the UK, the Trustees review the investment strategy of the scheme and the plan on a regular basis
in order to ensure that they remain appropriate. The last review for both the scheme and plan was recently undertaken and is in the process
of being implemented.
Actuarial assumptions vary according to local prevailing economic and social conditions. The principal weighted average actuarial assumptions
used in determining the cost of benefits for both 2022 and 2021 are as follows:
(Weighted average %) CH UK USA Other
2022
Discount rate 2.1 4.7 5.2 3.9
Mortality assumption LPP 2020, CMI SNA03M104%/ PRI 2012 MP –
2019 1.25% F94% CMI 2021 2021
1.25%
Salary progression rate 1.7 2.5 3.3 3.1
Future increase for pension in payments – 3.0 – 0.4
Healthcare cost trend assumed for the next year – – 6.7 –
Ultimate trend rate – – 4.5 –
Year that the rate reaches the ultimate trend rate 2030
(Weighted average %) CH UK USA Other
2021
Discount rate 0.3 1.9 3.0 1.6
Mortality assumption LPP 2020 CMI SNA03M104%/ PRI 2012 MP –
2019 1.25% F94% CMI 2020 2021
1.25%
Salary progression rate 1.5 2.6 3.3 2.7
Future increase for pension in payments – 3.2 – 0.5
Healthcare cost trend assumed for the next year 3.0 – 7.0 –
Ultimate trend rate 3.0 – 4.5 –
Year that the rate reaches the ultimate trend rate 2030
The weighted average rate for each assumption used to measure the benefits obligation is also shown. The assumptions used to determine
the end-of-year benefits obligation are also used to calculate the following year’s cost.
In Switzerland, a decrease in the discount rate of 0.5% per annum would, all other things being equal, increase the obligation by
CHF 22 million; a 0.5% increase in assumed salary would increase the obligation by CHF 1 million; and a one-year increase in members’ life
expectancy would increase the obligation by approximately CHF 8 million.
In the USA, a decrease in the discount rate of 0.5% per annum would, all other things being equal, increase the obligation by CHF 8 million;
a 0.5% increase in assumed salary would not impact the obligation; and a one-year increase in members’ life expectancy would increase the
obligation by approximately CHF 3 million.
In the UK, a decrease in the discount rate of 0.5% per annum would, all other things being equal, increase the obligation by CHF 8 million;
a 0.5% increase in assumed salary would not impact the obligation; and a one-year increase in members’ life expectancy would increase the
obligation by approximately CHF 4 million.
These sensitivities have been calculated to show the movement in the defined benefit obligation in isolation and assume no other changes
in market conditions at the accounting date. This is unlikely in practice; for example, a change in discount rate is unlikely to occur without
any movement in the value of the assets held by the plans.
The amount recognized as an expense in respect of defined contribution plans during 2022 was CHF 81 million (2021: CHF 78 million).

162 Financial
statements
26. Provisions
Legal and
warranty claims on Demobilization and
(CHF million) services rendered reorganization Other provisions Total
At 1 January 2022 38 50 62 150

Charge to income statement 10 38 7 55
Release to income statement (3) (1) (5) (9)
Payments (9) (24) (8) (41)
Exchange differences 3 (3) (1) (1)
At 31 December 2022 39 60 55 154
Analyzed as: 2022 2021
Current liabilities 58 60
Non-current liabilities 96 90
Total 154 150
A number of Group companies are subject to litigation and other claims arising out of the normal conduct of their business that can be
best viewed as claims on services rendered. The claim provision represents the sum of estimates of amounts payable on identified claims
and of losses incurred but not yet reported. They therefore reflect estimates of the future payments required to settle both reported and
unreported claims. In the opinion of management, based on all currently available information, the provisions adequately reflect the Group’s
exposure to legal and warranty claims on services rendered. The ultimate outcome of these matters is not expected to materially affect the
Group’s financial position, results of operations or cash flows.
Demobilization and reorganization provisions relate to present legal or constructive obligations of the Group toward third parties, such
as termination payments to employees upon leaving the Group, which in some jurisdictions are a legal obligation. For specific long-term
contracts, typically with two to five years’ duration, the Group is required to dismantle infrastructure and terminate the services of personnel
upon completion of the contract. These demobilization costs are provided for during the life of the contract. Experience has shown that these
contracts may be either extended or terminated earlier than expected.
Other provisions include present legal or constructive obligations towards tax authorities for indirect tax exposure as well as other provisions
towards third parties.
27. Trade and other payables

Trade payables 360 368

Other payables 311 319
Total 671 687
Trade accounts and other payables principally comprise amounts outstanding for trade purchases and ongoing operating costs.
At 31 December 2022 and 2021, the fair value of the Group’s trade accounts and other payables approximates the carrying value.
28. Contingent liabilities

In the normal course of business, the Group and its subsidiaries are parties to various lawsuits and claims. Management does not expect that
the outcome of any of these legal proceedings will have a material adverse effect on the Group’s financial position, results of operations or
cash flows.
Guarantees and performance bonds
Guarantees 461 553

Performance bonds 189 205
Total 650 758
The Group has issued unconditional guarantees of CHF 461 million (2021: CHF 553 million), as well as performance bonds and bid bonds of
CHF 189 million (2021: CHF 205 million) to commercial customers on behalf of its subsidiaries. Management believes the likelihood that a
material payment will be required under these guarantees is remote.

29. Equity compensation plans

Selected employees of the SGS Group are eligible to participate in equity compensation plans.
i) Grants to members of the Board of Directors
In 2022, a total of 285 restricted shares were granted to members of the Board of Directors, in settlement of part of their remuneration
for the Annual General Meeting 2021 to 2022 mandate (68 restricted shares) and for the Annual General Meeting 2022 to 2023 mandate
(217 restricted shares). The restricted shares are blocked for a period of three years from the grant date, until January 2025 and May 2025
respectively. The value at grant date of the restricted shares granted was: i) for the 68 restricted shares related to the Annual General Meeting
2021 to 2022 mandate, CHF 174 352 (defined as the closing price of the share on the date of the publication of the annual results), and ii) for
the 217 restricted shares related to the Annual General Meeting 2022 to 2023 mandate, CHF 546 710 (defined as the average closing price
of the share during a 20-day period following the payment of the dividends after the Annual General Meeting 2022).
ii) Grants to members of the Operations Council
In 2022, a total of 3 296 performance share units (PSUs) under the long-term incentive plan 2022-2024 were granted to members of the
Operations Council. The PSUs vest after a three-year performance period 2022-2024, in February 2025, subject to performance conditions
and to continuity of employment of the beneficiaries during the vesting period. The value at grant date of the PSUs granted, being defined
as the average closing price of the share during a 20-day period preceding the grant date, was CHF 8 577 181.
More information on the long-term incentive plan for the members of the Operations Council is disclosed in the SGS Remuneration report.
In 2022, a total of 1 378 restricted shares were granted to members of the Operations Council, in settlement of 50% of the annual incentive
related to the 2021 performance. The restricted shares are blocked for a period of three years from the grant date, until April 2025. The value
at grant date of the restricted shares granted, being defined as the average closing price of the share during a 20-day period following the
payment of the dividends after the Annual General Meeting 2022, was CHF 3 471 733.
50% of the annual incentive related to the 2022 performance will be settled in restricted shares. The grant of the restricted shares will be
done after the Annual General Meeting 2023; the total number of restricted shares to be granted will be calculated dividing 50% of the annual
incentive amount by the average closing price of the share during a 20-day period following the payment of the dividends after the Annual
General Meeting 2023, rounded up to the nearest integer. The restricted shares will be blocked for a period of three years from the grant
date, until April 2026.
More information on the short-term incentive for the members of the Operations Council in disclosed in the SGS Remuneration report.
iii) Grants to other employees
In 2022, a total of 5 611 performance share units (PSUs) under the long-term incentive plan 2022-2024 were granted to selected senior
managers. The PSUs vest after a three-year performance period 2022-2024, in February 2025, subject to performance conditions and to
continuity of employment of the beneficiaries during the vesting period. The value at grant date of the PSUs granted, being defined as the
average closing price of the share during a 20-day period preceding the grant date, was CHF 14 601 505.
In 2022, a total of 2 915 restricted share units (RSUs) were granted to selected key employees under the restricted share units plan 2022.
The RSUs vest three years after the grant date. The value at grant date of the RSUs granted, being defined as the average closing price
of the share during a 20-day period preceding the grant date, was CHF 7 585 705.
Performance share unit (PSU) and restricted share unit (RSU) plans
Units Units
Vesting Outstanding at Outstanding at
period 31 December 31 December
Description from 2021 Granted Forfeited Vested 2022
SGS-PSU-21 Feb.24 15 992 – (880) (40) 15 072

SGS-PSU-22 Feb.25 – 8 907 (111) – 8 796
SGS-RSU-19 Apr.22 1 678 – – (1 678) –
SGS-RSU-20 Apr.23 2 148 – (200) – 1 948
SGS-RSU-21 Apr.24 1 865 (176) – 1 689
SGS-RSU-22 Apr.25 – 2 915 (85) – 2 830
Total 21 683 11 822 (1 452) (1 718) 30 335
The Group does not issue new shares to grant employees in relation to the equity-based compensation plans but uses treasury shares,
acquired through share buyback programs.
In total, as of 31 December 2022, the equity overhang, defined as the total number of unvested share units, (30 335 units) divided by the total
number of outstanding shares (7 495 032 shares) amounted to 0.40%.
The company’s burn rate, defined as the number of equities (shares, restricted shares and share units) granted in 2022 (13 485 units) divided
by the total number of outstanding shares, was 0.18%.
The Group recognized during the year a total expense of CHF 20 million (2021: CHF 14 million) in relation to equity compensation plans.

164 Financial
statements
Shares available (required) for future plans:
Total
At 1 January 2021 (4 579)

Repurchased shares –
Granted SGS-RSU-21-plan (1 935)
Granted SGS-PSU-21 plan (16 337)
Shares for PSU forfeited 4 693
Shares for RSU forfeited 383
Shares used for Restricted Shares plan as settlement of Short-Term Incentive (548)
At 31 December 2021 (18 323)
Repurchased shares 12 500
Granted SGS-RSU-22 plan (2 915)
Granted SGS-PSU-22 plan (8 907)
Shares for PSU forfeited 991
Shares for RSU forfeited 461
Shares used for Restricted Shares plan as settlement of Short-Term Incentive (1 663)
At 31 December 2022 (17 856)
At 31 December the Group had the following shares available to satisfy various programs:
2022 Total 2021 Total
Number of shares held 12 479 3 360

Shares allocated for 2019 RSU plan – (1 678)
Shares allocated for 2020 RSU plan (1 948) (2 148)
Shares allocated for 2021 RSU plan (1 689) (1 865)
Shares allocated for 2021 PSU plan (15 072) (15 992)
Shares allocated for 2022 RSU plan (2 830) –
Shares allocated for 2022 PSU plan (8 796) –
Shares required for future equity compensation plans at 31 December (17 856) (18 323)
30. Related-party transactions

Transactions between the Company and its subsidiaries, which are related parties of the Group, have been eliminated on consolidation and
are not disclosed.
Compensation to Directors and members of the Operations Council
The remuneration of Directors and members of the Operations Council during the year was as follows:
Short-term benefits 15 17
Post-employment benefits 1 1
Share-based payments1 12 20
Total 28 38
1. 2022 represents the value at grant of restricted share units and performance share units granted in 2022 while 2021 represents the value at grant of restricted share units granted in 2021.
The remuneration of Directors and members of the Operations Council is determined by the Nomination and Remuneration Committee.
Additional information is disclosed in the SGS Remuneration report.
During 2022 and 2021, no member of the Board of Directors or of the Operations Council had a personal interest in any business transactions
of the Group.
The Operations Council (including senior management) participates in the equity compensation plans as disclosed in note 29.
The total compensation, including social charges, received by the Board of Directors amounted to CHF 2 797 000 (2021: CHF 1 997 000).
The total compensation (cash and shares/options), including social charges, received by the Operations Council (including senior
management) amounted to CHF 24 474 000 (2021: CHF 36 228 000).

Loans to members of governing bodies

As at 31 December 2022, no loan, credit or outstanding advance was due to the Group from members or former members of its governing
bodies (unchanged from previous year).
Transactions with other related parties
In 2022 and in 2021, the Group did not perform any activity generating revenue for the other related parties.
During 2022 and 2021, neither related trade receivable balances unpaid nor expense in respect of any bad or doubtful debts due from these
related parties were recognized.
31. Significant shareholders

As at 31 December 2022, Groupe Bruxelles Lambert (acting through Serena SARL and URDAC) held 19.11% (December 2021: 19.11%) and
BlackRock Inc. held 5.18% (December 2021: below 5%) of the share capital and voting rights of the Company. At the same date, the Group
held 1.68% of the share capital of the Company (December 2021: 0.04%).
32. Approval of financial statements and subsequent events

The Board of Directors is responsible for the preparation and presentation of the financial statements. These financial statements were
authorized for issue by the Board of Directors on 22 February 2023, and will be submitted for approval on 28 March 2023 during the
Annual General Meeting. There are no subsequent events to be reported in these consolidated financial statements.

166 Financial
statements

Geneva
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of SGS SA and its subsidiaries (the Group), which comprise the
consolidated income statement and consolidated statement of comprehensive income for the year ended 31 December
2022, the consolidated statement of financial position as at 31 December 2022, the consolidated statement of cash flows
and consolidated statement of changes in equity for the year then ended, and notes to the consolidated financial state-
ments, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements (pages 126 to 165 and 187 to 189) give a true and fair view of the
consolidated financial position of the Group as at 31 December 2022 and its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with the International Financial Reporting Standards
(IFRS) and comply with Swiss law.
Basis for opinion

We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss Standards
on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor’s
responsibilities for the audit of the consolidated financial statements' section of our report. We are independent of the
Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, as well as the
International Code of Ethics for Professional Accountants (including International Independence Standards) of the Inter-
national Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our audit approach
Overview Overall Group materiality: CHF 42 million
We concluded full scope audit work at 22 reporting units and audits of specific
balances were performed on a further 17 reporting units. Our audit scope ad-
dressed over 68 % of the Group’s revenue.
As key audit matters the following areas of focus have been identified:
• Testing the Technical Consultancy USA CGU for impairment
• Testing the Vehicle Compliance Spain CGU for impairment
• Unbilled revenue and work in progress (WIP)
• Taxation
PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, 1211 Genève 2, Switzerland

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable
assurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due
to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influ-
ence the economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall
Group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated financial
statements as a whole.
Overall Group materiality CHF 42 million
Benchmark applied Profit before tax
Rationale for the materiality bench- We chose profit before tax as the benchmark because, in our view, it is the
mark applied benchmark against which the performance of the Group is most commonly
measured, and it is a generally accepted benchmark.
We agreed with the Audit Committee that we would report to them misstatements above CHF 2 million identified during
our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.
Audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consoli-
dated financial statements as a whole, taking into account the structure of the Group, the accounting processes and con-
trols, and the industry in which the Group operates.
Due to the nature of its business and its organisation, the Group has a decentralised structure and operates in 116 coun-
tries in three main regions (Asia Pacific, Europe/Africa/Middle East and Americas). We instructed audit teams in 18
countries to perform a full scope audit and audit teams in another 10 countries to perform an audit of specific balances
(principally revenue, accounts receivable, work in progress and unbilled revenue). These teams audit the respective ac-
count balances as well as classes of transactions and report to us on their audit results in response to the audit instruc-
tions we sent to them.
As Group auditor, we ensure the quality of the audit teams' work by means of planning presentations with all teams, con-
ducting a detailed review of their audit plans and final memorandums as well as holding closing calls with teams auditing
all significant entities. In addition, procedures performed by us at Group level include analytical procedures on entities
not covered by Group reporting requirements to ensure that material risks are identified and addressed. We also assess
the appropriateness of Group accounting policies and the accounting for material or unusual transactions that is pre-
pared centrally, and audit the consolidation. The latter includes, in particular, the central consolidation adjustments, the
treatment of share-based compensation, tax balances, equity and intercompany eliminations as well as business combi-
nation accounting. Finally, we assess the compliance of the consolidated financial statements with IFRS and Swiss law.
Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
3 SGS SA | Report of the statutory auditor to the General Meeting

168 Financial
statements
Testing the Technical Consultancy USA CGU for impairment
Key audit matter How our audit addressed the key audit matter
The Group’s share of goodwill allocated to the Technical We obtained the Group’s impairment test for the Technical
Consultancy USA CGU (cash generating unit) amounts to Consultancy USA CGU and, in particular:
CHF 82 million as at 31 December 2022.
• We assessed the appropriateness of the impairment
We identified the valuation and recoverability of goodwill testing methodology;
and other intangible assets allocated to the Technical Con-
sultancy USA CGU as a key audit matter because despite • We reconciled the five-year cash flow projections to the
reaching the final stage of the recovery phase of declining financial forecasts that were approved by management;
operations, the business has been historically sensitive to • We challenged management to substantiate the key as-
the economic conditions. sumptions used in the cash flow projections of the Tech-
The discounted cash flow model is based on the value- in- nical Consultancy USA CGU's business during the fore-
use methodology and on a five-year plan. casted period;
The assessment of the recoverability of the Technical Con- • We obtained comfort over the appropriateness of cash
sultancy USA CGU's goodwill balance is dependent on the flow assumptions by analysing and performing substan-
estimation of future cash flows. tive detail testing on a sample of the 2022 backlog and
on the 2023 opportunity pipeline;
Management’s judgement is required to determine the as-
sumptions relating to the future business results, the long- • We tested, with the support of PwC's valuation experts,
term growth rate after the forecast period and the discount the reasonableness of the long-term growth rate after
rate applied to the forecasted cash flows. the forecast period and the discount rate;
Refer to the corresponding accounting policy in note 2 – • We tested the mathematical accuracy of the model;
Significant accounting policies and exchange rates and • We assessed the quality of the cash flow projections by
note 14 – Goodwill in the notes to the consolidated finan- comparing the actual results of the CGU to the prior
cial statements. year's budget to identify in retrospect whether any of the
assumptions might have been too optimistic;
• We assessed the adequacy of the disclosures included
in note 14 related to goodwill.
On the basis of the procedures performed, we conclude
that management’s impairment test of the Technical Con-
sultancy USA CGU was acceptable.
Testing the Vehicle Compliance Spain CGU for impairment
The Group’s share of goodwill allocated to the Vehicle We obtained the Group’s impairment test for the Vehicle
Compliance Spain CGU (cash generating unit) amounts Spain Compliance CGU and, in particular:
to CHF 115 million as at 31 December 2022.
• We assessed the appropriateness of the impairment
We identified the valuation and recoverability of goodwill testing methodology;
and other intangible assets allocated to the Vehicle Com-
pliance Spain CGU as a key audit matter because tech- • We reconciled the five-year projections to the financial
nical assumptions used in the determination of the CGUs forecasts that were approved by management;
recoverable amount are highly sensitive to the current • We challenged management to substantiate the key as-
economic situation. At the same time, the business is sumptions used in the cash flow projections of the Vehi-
highly dependent on the renewal of concessions in the cle Compliance Spain CGU's business during the fore-
coming years. casted period;
The discounted cash flow model is based on the value- • We obtained comfort over the appropriateness of cash
in-use methodology and on a five-year plan. flow assumptions by corroborating them with external
market data;

Management’s judgement is required to determine the as- • We tested, with the support of PwC's valuation experts,
sumptions relating to the future business results, the long- the reasonableness of the long-term growth rate after
term growth rate after the forecast period and the dis- the forecast period and the discount rate;
count rate applied to the forecasted cash flows.
• We tested the mathematical accuracy of the model;
Refer to the corresponding accounting policy in note 2 –
Significant accounting policies and exchange rates and • We assessed the quality of the cash flow projections by
note 14 – Goodwill in the notes to the consolidated finan- comparing the actual results of the CGU to the prior
cial statements. year's budget to identify in retrospect whether any of the
assumptions might have been too optimistic;
• We evaluated the Group’s sensitivity analysis of key as-
sumptions to ascertain the effect of changes in those
assumptions on the value-in-use;
• We assessed the adequacy of the disclosures included
in note 14 related to goodwill.
that management’s impairment test of the Vehicle Compli-
ance Spain CGU was acceptable.
Unbilled revenue and work in progress (WIP)
The amounts on the balance sheet related to unbilled rev- We reviewed SGS's revenue recognition policy and ob-
enue and work in progress total CHF 210 million. tained an understanding of how unbilled revenue and
WIP are accounted for. Our audit approach consisted of
Unbilled revenue is recognised for services completed but
the following procedures, in particular:
not yet invoiced and is measured at the net selling price.
WIP is recognised for partially completed performance • We assessed the design and implementation of the key
obligations under a contract. The measure of progress is controls relating to the monitoring of unbilled revenue
based on observable output or input methods. A propor- and WIP balances.
tion of the expected margin on completion is recognised
based on the actual costs incurred in proportion to total • We selected samples of unbilled revenue and WIP bal-
expected costs, provided that the project is expected to ances and traced them to underlying contracts and in-
be profitable once completed. voices with customers.
The assessment of the degree of progress and the esti- • We obtained comfort over the degree of progress from
mated margin requires judgement by management. discussions with project managers and performed rec-
onciliations to actual numbers recognised in the finan-
Given the significance and relevance of their impact on cial statements in selected cases.
the consolidated financial statements and because the
progress and the expected margin on completion must be • We selected samples of unbilled revenue and WIP bal-
estimated at the end of each reporting period, we deemed ances recorded at the previous period-end and com-
the measurement of unbilled revenue and work in pro- pared them to subsequent invoices and cash received
gress to be a key audit matter. from clients in order to evaluate the reliability of man-
agement's estimation process.
Refer to the corresponding accounting policy in note 2 –
Significant accounting policies and exchange rates and to • We analysed the aging of the open balances and as-
note 5 – Revenues from contracts with customers in the sessed the appropriateness of provisions recognised in
notes to the consolidated financial statements. accordance with the Group’s provision grid.
• For entities with significant unbilled or WIP balances not
subject to our Group audit, we performed central audit
procedures.

170 Financial
statements
On the basis of the procedures performed, we consider

management’s estimates and disclosures regarding un-
billed revenue and work in progress balances to be rea-
sonable.
Taxation
The Group is subject to taxation in many jurisdictions and Our audit approach consisted of the following procedures,
management makes judgements about the incidence and in particular:
magnitude of tax liabilities that are subject to the future
outcome of assessments by the relevant tax authorities. • We assessed the existence of tax exposures by means
Accordingly, the calculation of tax expense and the re- of inquiry with local and Group management.
lated liability are subject to inherent uncertainty. • We discussed management’s process to assess the risk
To make these judgements, the Group has a structured of tax liabilities in the different jurisdictions as a result of
process whereby management systematically monitors potential challenges to the tax positions, and tested the
and assesses the existence, development and settlement measurement and timing of recognition of the provision
of tax risks in each of its jurisdictions. when applicable.
The Group’s main tax risks are i) that the tax authorities • With the support of PwC's internal tax experts, we ex-
might not accept the transfer prices applied and ii) poten- amined the documentation outlining the matters in dis-
tial adverse results of ongoing tax audits. pute or at risk and the benchmarks relied upon for trans-
fer pricing, and used our knowledge of the tax laws and
In accordance with its methodology, provisions for uncer- other similar taxation matters to assess the available ev-
tain tax positions are calculated and included within cur- idence, management’s judgmental processes and the
rent tax liabilities (CHF 165 million as at 31 December provisions.
2022).
Refer to the corresponding accounting policy in note 2 – that management’s tax estimates were reasonable.
Significant accounting policies and exchange rates and to
note 10 – Taxes in the notes to the consolidated financial
statements.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included
in the annual report, but does not include the financial statements, the consolidated financial statements, the remunera-
tion report and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial state-
ments or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Board of Directors' responsibilities for the consolidated financial statements

The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair
view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Board of Directors
determines is necessary to enable the preparation of consolidated financial statements that are free from material mis-
statement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern

basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Swiss law, ISAs and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influ-
ence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Swiss law, ISAs and SA-CH, we exercise professional judgment and maintain pro-
fessional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrep-
resentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropri-
ate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and re-
lated disclosures made.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty ex-
ists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evi-
dence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclo-
sures, and whether the consolidated financial statements represent the underlying transactions and events in a man-
ner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safe-
guards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

172 Financial
statements
Report on other legal and regulatory requirements
In accordance with article 728a paragraph 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists
which has been designed for the preparation of consolidated financial statements according to the instructions of the
Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
Guillaume Nayet Louise Rolland

Audit expert
Auditor in charge

2. SGS SA
2.1. Income Statement
Operating income
Dividends from subsidiaries 696 734
Total operating income 696 734
Operating expenses
Other operating expenses (4) (6)
Total operating expenses (4) (6)
Operating result 692 728
Financial income 6 48 46
Exchange gain, net 30 1
Financial expenses 6 (51) (41)
Liquidation of subsidiaries, net – (1)
Financial result 27 5
Extraordinary losses 7 (67) (8)
Taxes 3 (1)
Withholding taxes (6) (10)
Profit for the year 649 714

174 Financial
statements
2.2. Statement of Financial Position at 31 December

(Before appropriation of available retained earnings)
Assets
Current assets
Cash and cash equivalents 424 324
Derivative assets 12 2
Other financial assets – 7
Amounts due from subsidiaries 434 691
Other receivables and prepayments 4 2
Total current assets 874 1 026
Non-current assets
Loans to subsidiaries 1 666 1 279
Other financial assets 5 –
Other assets 2 3
Investments in subsidiaries 2 2 008 1 981
Total non-current assets 3 681 3 263
Total assets 4 555 4 289
Shareholder’s equity and liabilities

Current liabilities
Bank overdraft 9 9
Derivative liabilities 9 6
Trade and other payables 10 –
Amounts due to subsidiaries 590 209
Corporate bonds 3 500 250
Deferred income and accrued expenses 12 38
Provisions – 1
Total current liabilities 1 130 513
Non-current liabilities
Other financial liabilities – 2
Amounts due to subsidiaries 623 772
Corporate bonds 3 2 075 2 075
Total non-current liabilities 2 698 2 849
Shareholder’s equity
Share capital 4 to 5 7 7
Legal reserve 4 to 5 34 34
Retained earnings 4 to 5 907 878
Treasury shares for share buyback 4 to 5 (250) –
Reserve for treasury shares held by a subsidiary 4 to 5 29 8
Total shareholder’s equity 727 927
Total shareholder’s equity and liabilities 4 555 4 289

2.3. Notes
SGS SA (‘the Company’) is the ultimate parent company of the SGS Group which owns and finances, either directly or indirectly,
its subsidiaries and joint ventures throughout the world. The head office is located in Geneva, Switzerland.
The average number of employees is less than 10 people for this company (2021: less than 10).
1. Significant accounting policies

The financial statements are prepared in accordance with the accounting principles required by the provisions of commercial accounting
as set out in the Swiss Code of Obligations.
Investments in subsidiaries
Investments in subsidiaries are valued individually at acquisition cost less an adjustment for impairment where appropriate.
Foreign currencies
Balance sheet items denominated in foreign currencies are converted into Swiss francs at year end exchange rates with the exception
of investments in subsidiaries which are valued at the historical exchange rate.
Foreign currency transactions are translated using the actual exchange rates prevailing during the year. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at year end exchange rates of assets and liabilities denominated
in foreign currencies are recognized in profit or loss.
Derivatives
SGS SA uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational,
financing and investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments
for trading purposes. Derivatives are accounted for on a mark-to-market basis.
Derivative financial instruments are initially recognized at fair value and subsequently remeasured at fair value at each balance sheet date.
The gains and losses resulting from the fair value remeasurement are recognized in the income statement. The fair value of forward
exchange contracts is determined with reference to market prices at the balance sheet date.
Dividends from subsidiaries
Dividends are treated as an appropriation of profit in the year in which they are ratified at the Annual General Meeting and subsequently
paid, rather than as an appropriation of profit in the year to which they relate or for which they are proposed by the Board of Directors.
As a result, dividends are recognized in income in the year in which they are received, on a cash basis. Dividends are recorded in the
currency defined for each affiliate and converted at spot rate in the income statement.
Bonds
Bonds are recorded at nominal value.
2. Subsidiaries
The list of principal Group subsidiaries appears in the annual report on pages 187 to 189.
In 2020, SGS SA acquired 80% of the capital of Ryobi Geotechnique Pte Ltd in Singapore. The share purchase agreement includes an option
to acquire the remaining 20% of Ryobi Geotechnique Pte Ltd in 2025.
3. Corporate bonds
SGS SA made the following bond issuances:

Date of issue CHF million Coupon in % maturity price in % price in %
8 May 2015 325 0.250 2023 100.079 100.000

6 May 2020 175 0.450 2023 100.117 100.000
Short-term bonds 500
27 February 2014 250 1.750 2024 101.019 100.000
8 May 2015 225 0.875 2030 100.245 100.000
3 March 2017 375 0.550 2026 100.153 100.000
29 October 2018 225 0.750 2025 100.068 100.000
29 October 2018 175 1.250 2028 101.157 100.000
6 May 2020 325 0.950 2026 100.182 100.000
5 September 2022 150 1.250 2025 100.000 100.000
5 September 2022 350 1.700 2029 100.197 100.000
Long-term bonds 2 075
As at 31 December 2022, two bonds in the above table are classified as short-term liabilities as the due date is less than a year.
On 5 September 2022, SGS SA issued two bonds, one CHF 150 million with a 1.250% coupon and one CHF 350 million with a 1.700% coupon.
The Company has listed all bonds on the SIX Swiss Exchange.

176 Financial
statements
4. Total equity
Reserve for
treasury shares Treasury
Share held by a shares for Retained
(CHF million) capital Legal reserve subsidiary share buyback earnings Total
Balance at 1 January 2021 8 34 62 (169) 878 813

Dividends paid – – – – (599) (599)
Decrease in the reserve for own shares – – (54) – 54 –
Cancellation of treasury shares – – – 169 (169) –
Treasury shares cancelled (1) – – – – (1)
Profit for the year – – – – 714 714
Balance at 31 December 2021 7 34 8 – 878 927
Dividends paid – – – – (599) (599)
Increase in the reserve for own shares – – 21 – (21) –
Share buyback program – – – (250) – (250)
Profit for the year – – – – 649 649
Balance at 31 December 2022 7 34 29 (250) 907 727
5. Share capital
Shares In Total shares Total share capital
circulation Treasury shares issued CHF (million)
Balance at 1 January 2021 7 469 238 96 494 7 565 732 8

Capital reduction by cancellation of treasury shares – (70 700) (70 700) (1)
Treasury shares purchased for equity
compensation plans (12 500) 12 500 – –
Treasury shares purchased for cancellation (113 499) 113 499 – –
Issued share capital

SGS SA has a share capital of CHF 7 495 032 (2021: CHF 7 495 032) fully paid-in and divided into 7 495 032 (2021: 7 495 032) registered
shares of a par value of CHF 1. All shares, other than treasury shares, participate equally in the dividends declared by the Company and
have equal voting rights.
Treasury shares
On 31 December 2022, SGS SA held 125 978 treasury shares, thereof 113 499 directly and 12 479 through an affiliate company.
On 21 June 2022, SGS SA announced a CHF 250 million share buyback program for the purpose of capital reduction. The program
ended on 21 December 2022 and 113 499 shares were repurchased for a total amount of CHF 250 million at an average purchase price
of CHF 2 203 per share.
Further, in 2022 12 500 shares have been repurchased through an affiliate company for covering future equity compensation plans,
whilst 3 381 shares were released into circulation.
On 31 December 2021, SGS SA held 3 360 treasury shares through an affiliate company.
In 2021, no shares have been repurchased whilst 22 434 shares were released into circulation following vesting of equity compensation
plans. In 2021, SGS SA proceeded to the cancellation of 70 700 treasury shares directly held by SGS SA, while the shares to cover the
equity compensation plans are held by a subsidiary company.

6. Financial income and financial expenses

Financial income
Interest income third party 1 –
Interest income Group 47 46
Financial income 48 46
Financial expenses
Interest expenses third party (21) (24)
Interest expenses Group (14) (8)
Other financial expenses (16) (9)
Financial expenses (51) (41)
7. Extraordinary losses
The extraordinary loss is composed of impairment respectively on investments in subsidiaries of CHF 52 million and on loan to subsidiaries of
CHF 15 million (2021: CHF 8 million).
8. Guarantees and comfort letters

(CHF million) 2022 issued 2022 utilized 2021 issued 2021 utilized
Guarantees 2 511 1 563 2 759 1 117

Performance bonds 55 55 71 53
Total 2 566 1 618 2 830 1 170
The Company has unconditionally guaranteed or provided comfort to financial institutions providing credit facilities (loans and guarantee
bonds) to its subsidiaries. In addition, it has issued performance bonds to commercial customers on behalf of its subsidiaries.
The Company is part of a VAT Group comprising itself and other Group companies in Switzerland.
9. Remuneration
9.1. Remuneration policy and principles
This section appears in the SGS Remuneration report paragraph 2 in the annual report on pages 105 to 107.
9.2. Remuneration model
9.3. Remuneration awarded to the Board of Directors
9.4. Remuneration awarded to the Operations Council members
10. Shares and options held by members of governing bodies

10.1. Shares and options held by Members of the Board of Directors
The following table shows the shares held by Members of the Board of Directors as at 31 December 2022:
Name Shares
C. Grieder 485
S.R. du Pasquier 66
P. Desmarais 56
P. Cheung 19
K. Sorenson 104
I. Gallienne 20
S. Atiya 111
T. Hartmann 19
J. Vergis 19

178 Financial
statements
The following table shows the shares held by Members of the Board of Directors as at 31 December 2021:
Name Shares
C. Grieder 90
S.R. du Pasquier 28
P. Desmarais 37
K. Sorenson 36
I. Gallienne 1
S. Atiya 92
T. Hartmann –
J. Vergis –
10.2. Shares and options held by senior management

The following table shows the shares and restricted shares held by senior management as at 31 December 2022:
Name Corporate responsibility Restricted shares Shares
F. NG Chief Executive Officer 648 3 556

D. de Daniel Chief Financial Officer 406 1 165
O. Merkt General Counsel and Chief Compliance Officer 144 287
The following table shows the shares and restricted shares held by senior management as at 31 December 2021:
Name Corporate responsibility Restricted shares Shares
F. NG Chief Executive Officer 528 3 385

D. de Daniel Chief Financial Officer 238 1 165
O. Merkt General Counsel and Chief Compliance Officer 124 250
Details of the various plans are explained in the SGS Remuneration Report.
11. Significant shareholders

To the knowledge of the Company the shareholders owning more than 5% of its share capital as at 31 December 2022, or at the date of their
last notification as per Article 20 of the Swiss Stock Exchange Act (SESTA) were Groupe Bruxelles Lambert (acting through Serena SARL and
URDAC) with 19.11% (December 2021: 19.11%) and BlackRock Inc. with 5.18% (December 2021: below 5%) of the share capital and voting
rights of the company.
As at 31 December 2022, the SGS Group held 1.68% of the share capital of the Company (2021: 0.04%).
Proposal of the Board of Directors for the appropriation of available retained earnings
(CHF) 2022 2021
Profit for the year 649 821 069 714 760 947
Balance brought forward from previous year 278 541 020 110 997 119
Dividend paid on treasury shares released into circulation in 2021 prior the Annual General Meeting
in March 2021 – (1 688 800)
Dividend paid on treasury shares released into circulation in 2022 prior the Annual General Meeting
in March 2022 (85 841) –
Capital reduction by cancellation of shares – 70 700
Share buyback program (250 000 741) –
(Transfer to)/Reversal from the reserve for treasury shares (20 841 198) 53 734 814
Total retained earnings available for appropriation 657 434 309 877 874 780
Proposal of the Board of Directors:
Dividends¹ (589 524 320) (599 333 760)
Balance carried forward 67 909 989 278 541 020
Ordinary gross dividend per registered share 80.00 80.00
1. No dividend is paid on own shares held directly or indirectly by SGS SA.
Approval of financial statements and subsequent events

The Board of Directors is responsible for the preparation and presentation of the financial statements. These financial statements were
authorized for issue by the Board of Directors on 22 February, 2023 and will be submitted for approval by the Annual General Meeting
to be held on 28 March 2023.


Geneva
Report on the audit of the financial statements
Opinion
We have audited the financial statements of SGS SA (the Company), which comprise the income statement for the year
ended 31 December 2022, and the statement of financial position as at 31 December 2022, and notes to the financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements, presented on pages 173 to 178, comply with Swiss law and the
company’s articles of incorporation.
Basis for opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities
under those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of the financial
statements' section of our report. We are independent of the Company in accordance with the provisions of Swiss law
and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance
with these requirements.
Our audit approach
Overview Overall materiality: CHF 42 million
We tailored the scope of our audit in order to perform sufficient work to

enable us to provide an opinion on the financial statements as a whole,
taking into account the structure of the Company, the accounting
processes and controls, and the industry in which the Company operates.
As key audit matter the following area of focus has been identified:
Valuation of investments in subsidiaries
Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable
assurance that the financial statements are free from material misstatement. Misstatements may arise due to fraud or
error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, 1211 Genève 2, Switzerland

180 Financial
statements
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall
materiality for the financial statements as a whole as set out in the table below. These, together with qualitative
considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole.
Overall materiality CHF 42 million
Benchmark applied Total assets
Rationale for the materiality We chose total assets as the benchmark, because, in our view, it is the
benchmark applied benchmark against which the performance of the Company, which has limited
operating activities and which mainly holds investments in subsidiaries and
intra-group loans, is most commonly measured, and it is a generally accepted
benchmark for holding companies.
We agreed with the Audit Committee that we would report to them misstatements above CHF 2 million identified during
our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.
Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial
statements. In particular, we considered where subjective judgements were made; for example, in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As
in all of our audits, we also addressed the risk of management override of internal controls, including among other
matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to
fraud.
Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of investments in subsidiaries
As at 31 December 2022, SGS SA's investments in We obtained the Company’s work on the valuation of
subsidiaries amount to CHF 2,008 million. investments in subsidiaries, and we performed
the following procedures:
Given the significance of this amount in the financial
statements and because of the judgement used by • We obtained an understanding of management's
management in determining its value, we consider the process and controls relating to the valuation of
valuation of investments in subsidiaries a key audit matter. investments in subsidiaries.
• We tested the mathematical accuracy of the calculations
The Company measures individually the investment in and reconciled the balances to the financial statements.
• We challenged the appropriateness of management’s
each subsidiary. The Company conducts an annual risk
process to identify impairment indicators by comparing
assessment based on several impairment indicators to
the triggers used to common indicators such as historical
identify investments with an impairment risk.
profitability and capacity to pay dividends.
• We also performed testing by calculating revenue and
For those investments in subsidiaries with a higher identified operating profit multipliers based on the market
risk of impairment, the recoverable amount is determined capitalisation of the Group and comparing those to the
based on a five-year discounted cashflow forecast. The main respective multiples of the individual investments in
judgements applied by management relate to revenue and subsidiaries.
margin growth throughout the period of the five-year plan,
the long-term growth rate beyond the detailed forecast
period and the discount rate.

An impairment is recognised if the recoverable amount of For those investments in subsidiaries with a higher identified
an individual investment is lower than the associated risk of impairment, we critically assessed the
carrying value. reasonableness of the underlying key assumptions and
judgements applied by performing the following procedures
The results of management’s impairment testing in particular:
indicated that some investments in subsidiaries were
impaired. As a result, management recognised an • We assessed the quality of the five-year cashflow
impairment in the amount of CHF 52 million. forecast projections by comparing forecasted revenue
and margin growth to historical and market trends as
Refer to note 1 - Accounting policies well as by holding discussions with group management
to assess their intention and ability to execute the
strategic initiatives.
• We evaluated, with the support of PwC's valuation
specialists, the reasonableness of the discount rate and
long-term growth rate applied to those future cash flows.
We consider management's approach as an acceptable

and reasonable basis for the valuation of the investments
in subsidiaries.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included
in the annual report, but does not include the financial statements, the consolidated financial statements, the
remuneration report and our auditor’s reports thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Board of Directors' responsibilities for the financial statements

The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of
Swiss law and the company’s articles of incorporation, and for such internal control as the Board of Directors determines
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.

182 Financial
statements
As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made.
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
Report on other legal and regulatory requirements
In accordance with article 728a paragraph 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists
which has been designed for the preparation of financial statements according to the instructions of the Board of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s
articles of incorporation. We recommend that the financial statements submitted to you be approved.
Guillaume Nayet Mario Berckmoes

Audit expert Audit expert
Auditor in charge

3. Historical data
3.1. SGS Group – Five-Year Statistical Data Consolidated Income Statements
(CHF million) 2022 2021 2020 2019 2018
Revenue 6 642 6 405 5 604 6 600 6 706

Salaries and wages (3 331) (3 180) (2 797) (3 357) (3 422)
Subcontractors’ expenses (399) (385) (352) (386) (387)
Depreciation, amortization and impairment (521) (499) (517) (548) (317)
Gain on business disposal – – 63 268 –
Other operating expenses (1 493) (1 364) (1 206) (1 495) (1 634)
Operating income (EBIT) 898 977 795 1 082 946
Financial income 20 16 12 18 20
Financial expenses (71) (69) (66) (79) (58)
Share of profit of associates and joint ventures 2 – 1 (4) –
Profit before taxes 849 924 742 1 017 908
Taxes (219) (269) (237) (315) (218)
Profit for the year 630 655 505 702 690
Profit attributable to:
Equity holders of SGS SA 588 613 480 660 643
Non-controlling interests 42 42 25 42 47
Operating income margins in % 13.5 15.3 14.2 16.4 14.1
Average number of employees 96 759 93 297 89 098 94 494 96 492

184 Financial
statements
3.2. SGS Group – Five-Year Statistical Data Consolidated Statements of Financial Position
At 31 December
(CHF million) 2022 2021 2020 2019 2018
Property, plant and equipment 907 925 872 926 969

Right-of-use assets 577 605 590 611 –
Goodwill 1 755 1 778 1 651 1 281 1 224
Other intangible assets 350 382 333 187 202
Investments in joint-ventures, associates and other 20 26 34 35 36
Deferred tax assets 153 164 161 174 203
Other non current-assets 125 173 154 149 133
Total non-current assets 3 887 4 053 3 795 3 363 2 767
Inventories 59 59 57 45 46
Unbilled revenues and work in progress 210 175 160 195 226
Trade receivables 988 928 856 953 969
Other receivables and prepayments 223 204 188 219 214
Current tax assets 132 108 77 77 94
Marketable securities – – 9 9 9
Cash and cash equivalents 1 623 1 480 1 766 1 466 1 743
Total current assets 3 235 2 954 3 113 2 964 3 301
Total assets 7 122 7 007 6 908 6 327 6 068
Share capital 7 7 8 8 8
Reserves 954 1 118 1 282 1 536 1 851
Treasury shares (279) (8) (230) (30) (191)
Equity attributable to equity holders of SGS SA 682 1 117 1 060 1 514 1 668
Non-controlling interests 81 85 74 81 75
Total equity 763 1 202 1 134 1 595 1 743
Loans and other financial liabilities 2 833 2 889 2 390 2 199 2 110
Lease liabilities 442 481 470 490 2
Deferred tax liabilities 79 92 53 23 30
Defined benefit obligations 47 84 136 151 119
Provisions 96 90 88 91 89
Total non-current liabilities 3 497 3 636 3 137 2 954 2 350
Trade and other payables 671 687 658 638 685
Contract liabilities 228 221 189 155 112
Current tax liabilities 165 169 140 145 127
Loans and other financial liabilities 1 009 282 863 38 412
Lease liabilities 162 155 151 154 –
Provisions 58 60 85 74 21
Other creditors and accruals 569 595 551 574 618
Total current liabilities 2 862 2 169 2 637 1 778 1 975
Total liabilities 6 359 5 805 5 774 4 732 4 325
Total equity and liabilities 7 122 7 007 6 908 6 327 6 068

3.3. SGS Group – Five-Year Statistical Share Data

(CHF unless indicated Otherwise) 2022 2021 2020 2019 2018
Share information
Registered shares
Number of shares issued 7 495 032 7 495 032 7 565 732 7 565 732 7 633 732
Number of shares with dividend rights 7 369 054 7 491 672 7 469 238 7 552 390 7 550 707
Price
High 3 076 3 059 2 843 2 689 2 683
Low 2 002 2 595 1 974 2 213 2 170
Year-end 2 150 3 047 2 670 2 651 2 210
Par value 1 1 1 1 1
Key figures by shares

Equity attributable to equity holders of SGS SA per
92.56 149.20 141.91 200.37 220.86
share in circulation at 31 December
Basic earnings per share1 78.86 81.91 64.05 87.45 84.54
Dividend per share ordinary 80.00 80.00 80.00 80.00 78.00
Total dividend per share 80.00 80.00 80.00 80.00 78.00
Dividends (CHF million)

Ordinary2 590 599 598 604 589
Total 590 599 598 604 589
1. Calculation of the basic earnings per share (weighted average for the year) is disclosed in note 10 of SGS Group Results.
2. As proposed by the Board of Directors.
3.4. SGS Group Share Information

Share transfer
SGS SA has no restrictions as to share ownership, except that registered shares acquired in a fiduciary capacity by third parties may not
be registered in the shareholders’ register, unless a special authorization has been granted by the Board of Directors.
Market capitalization
At the end of 2022 market capitalization was approximately CHF 16 114 million (2021:CHF 22 837 million). Shares are quoted on the
SIX Swiss Exchange.

186 Financial
statements
3.5. Closing prices for SGS & the Swiss market index (SMI) 2021-2022
SGS SA SMI
3 200 14 000
3 100 13 500
3 000 13 000
2 900 12 500
2 800 12 000
2 700 11 500
2 600 11 000
2 500 10 500
2 400 10 000
2 300 9 500
2 200 9 000
2 100 8 500
2 000 8 000
1 900 7 500
1 800 7 000
1 700 6 500
1 600 6 000
J F M A M J J A S O N D J F M A M J J A S O N D
2021 2022
High price
Closing Swiss market index (monthly close)
Low price

4. Material operating companies and ultimate parent

The disclosure of legal entities is limited to entities whose contribution to the Group revenues in 2022 represent at least 1% of the
consolidated revenues, but includes, in addition, the main operating legal entity in every country where the Group has permanent operations,
even when such legal entities represent less than 1% of the Group consolidated revenues. This definition of materiality excludes dormant
companies, pure sub-holding companies or entities used solely for the detention of assets.
Issued capital % held by Direct /

Country Name and domicile currency Issued capital amount Group indirect
Albania SGS Albania, Tirana ALL 15 100 000 100 D
Algeria SGS Qualitest Algérie SpA, Alger DZD 50 000 000 100 D
Angola SGS Serviços Angola SA, Luanda USD 30 000 49 I
Argentina SGS Argentina SA, Buenos Aires ARS 230 603 536 100 D
Australia SGS Australia Pty. Ltd., Bentley AUD 200 000 100 I
Austria SGS Austria Controll-Co. Ges.m.b.H., Vienna EUR 185 000 100 D
Azerbaijan Société Générale de Surveillance Azeri Ltd., USD 100 000 100 D
Baku
Bangladesh SGS Bangladesh Limited, Dhaka BDT 10 000 000 100 D
Belarus SGS Minsk Ltd., Minsk USD 20 000 100 D
Belgium SGS Belgium N.V., Antwerpen EUR 35 995 380 100 D
Botswana SGS Botswana (Proprietary) Limited, Gaborone BWP 1 000 100 D
Brazil SGS Do Brasil LTDA BRL 648 683 068 100 D
Bulgaria SGS Bulgaria Ltd., Sofia BGN 5 010 000 100 D
Burkina Faso SGS Burkina SA, Ouagadougou XOF 601 080 000 100 D
Cambodia SGS (Cambodia) Ltd., Phnom Penh KHR 4 000 000 000 100 D
Cameroon SGS Cameroun SA, Douala XAF 10 000 000 98.9 D
Canada SGS Canada Inc., Mississauga CAD 20 900 000 100 D
Central African Republic SGS Centrafrique SA, Bangui XAF 10 000 000 100 D
Chile SGS Minerals S.A., Santiago de Chile CLP 29 725 583 703 100 I
China SGS-CSTC Standards Technical USD 3 966 667 85 I
Services Co. Ltd., Beijing
China SGS-CSTC Standards Technical Services CNY 180 000 000 85 I
(Shanghai) Co., Ltd., Shanghaï
Colombia SGS Colombia SAS, Bogota COP 135 546 166 036 100 D
Congo SGS Congo SA, Pointe-Noire XAF 1 510 000 000 100 D
Croatia SGS Adriatica d.o.o., Zagreb HRK 1 300 000 100 I
Czech Republic SGS Czech Republic s.r.o., Praha CZK 7 707 000 100 I
Denmark SGS Analytics Denmark A/S, Nørresundby DKK 506 000 100 I
Democratic Republic SGS Minerals RDC SARL, Lubumbashi CDF 46 144 617 49 D
of Congo
Ecuador Consorcio SGS – Revisiones Técnicas USD 25 000 100 I
Egypt SGS Egypt Ltd., Cairo EGP 1 500 000 100 D
Estonia SGS Estonia Ltd., Tallinn EUR 42 174 100 I
Ethiopia SGS Ethiopia Private Limited ETB 15 000 100 D
Finland SGS Fimko Oy, Helsingfors EUR 260 000 100 I
France SGS France SAS, Arcueil EUR 3 172 613 100 I
Georgia SGS Georgia Ltd., Batumi USD 80 000 100 D
Germany SGS Germany GmbH, Hamburg EUR 1 210 000 100 I
Germany SGS Institut Fresenius GmbH, Taunusstein EUR 7 490 000 100 I
Ghana SGS Laboratory Services Ghana Limited, Accra GHS 13 501 602 100 D
Great Britain SGS United Kingdom Limited, Ellesmere Port GBP 8 000 000 100 I
Greece SGS Greece SA, Peristeri EUR 301 731 100 D
Guam SGS Guam Inc., Guam USD 25 000 100 D
Guatemala SGS Central America SA, Guatemala-City GTQ 14 568 000 100 D
Guinea-Conakry SGS Mineral Services (Guinée) Sàrl GNF 50 00 000 100 D
Unipersonnelle

188 Financial
statements

Hong Kong SGS Hong Kong Limited, Hong Kong HKD 200 000 100 D
Hungary SGS Hungária Kft., Budapest HUF 518 000 000 100 I
India SGS India Private Ltd., Mumbai INR 960 000 100 D
Indonesia P.T. SGS Indonesia, Jakarta USD 872 936 100 D
Iran SGS Iran (Private Joint Stock) Limited, Tehran IRR 50 000 000 99.99 D
Ireland SGS Ireland Limited EUR 5 000 100 I
Italy SGS Italia S.p.A., Milan EUR 2 500 000 100 D
Ivory Coast Société Ivoirienne de Contrôles Techniques XOF 200 000 000 95 D
Automobiles et Industriels SA, Abidjan
Japan SGS Japan Inc., Yokohama JPY 100 000 000 100 D
Jordan SGS (Jordan) Private Shareholding Company, JOD 100 000 50 D
Amman
Kazakhstan SGS Kazakhstan Limited, Almaty KZT 228 146 527 100 D
Kenya SGS Kenya Limited, Mombasa KES 3 000 000 100 D
Korea (Republic of) SGS Korea Co., Ltd., Seoul KRW 15 617 540 000 100 D
Kuwait SGS Kuwait W.L.L KWD 50 000 49 D
Kyrgyzstan SGS Bishkek LLC, Bishkek KGS 3 463 000 100 D
Lao (People’s SGS (Lao) Sole Co., Ltd., Vientiane LAK 2 444 700 000 100 D
Democratic Republic)
Latvia SGS Latvija Limited, Riga EUR 118 382 100 I
Lebanon SGS (Liban) S.A.L., Beirut LBP 30 000 000 99.97 D
Liberia SGS Liberia Inc, Monrovia LRD 100 100 D
Lithuania SGS Klaipeda Ltd., Klaipeda EUR 711 576 100 I
Luxembourg SGS Luxembourg, Windhof EUR 38 000 100 I
Madagascar Malagasy Community Network Services SA, MGA 10 000 000 70 D
Antananarivo
Malaysia Petrotechnical Inspection (Malaysia) Sdn. Bhd., MYR 750 000 100 D
Kuala Lumpur
Mali SGS Mali Sàrlu, Kayes XOF 300 000 000 100 D
Mauritius SGS (Mauritius) LTD, Phoenix MUR 100 000 100 D
Mexico SGS de Mexico, SA de C.V., Mexico MXN 281 068 828 100 D
Moldova SGS (Moldova) SA, Chisinau MDL 488 050 100 D
Mongolia SGS-IMME Mongolia LLC, Ulaanbaatar MNT 1 787 846 388 55 I
Morocco SGS Maroc SA, Casablanca MAD 17 982 000 100 D
Mozambique SGS MCNET Moçambique Limitada, Maputo MZN 343 716 458 100 I
Myanmar SGS (Myanmar) Limited, Yangon MMK 300 000 100 D
Netherlands SGS Nederland B.V., Spijkenisse EUR 250 000 100 I
New Zealand SGS New Zealand Limited, NZD 12 022 190 100 D
Auckland-Onehunga
Nigeria SGS Inspection Services Nigeria Limited, Lagos NGN 200 000 49 D
Norway SGS Analytics Norway AS, Hamar NOK 1 250 000 100 I
Oman SGS Inspection and Testing Services SPC OMR 800 000 100 D
Pakistan SGS Pakistan (Private) Limited, Karachi PKR 2 300 000 100 D
Panama SGS Panama Control Services Inc., Panama USD 7 899 339 100 D
Papua-New-Guinea SGS PNG Pty. Limited, Port Moresby PGK 2 100 I
Paraguay SGS Paraguay SA, Asunción PYG 1 962 000 000 100 D
Peru SGS del Perú S.A.C., Lima PEN 43 813 182 100 D
Philippines SGS Philippines, Inc., Manila PHP 24 620 000 100 D
Poland SGS Polska Sp.z o.o., Warsaw PLN 27 167 800 100 D
Portugal SGS Portugal – Sociedade Geral de EUR 500 000 100 I
Superintendência SA, Lisboa
Qatar SGS Qatar WLL, Doha QAR 200 000 49 D


Romania SGS Romania SA, Bucharest RON 100 002 100 I
Russia AO SGS Vostok Limited, Moscow RUB 18 000 000 100 D
Saudi Arabia SGS Inspection Services Saudi Arabia Ltd., SAR 1 000 000 75 D
Jeddah
Senegal SGS Sénégal SA, Dakar XAF 35 000 000 100 D
Serbia SGS Beograd d.o.o., Beograd EUR 66 161 100 I
Sierra Leone SGS (SL) Ltd., Freetown SLL 200 000 000 100 D
Singapore SGS Testing and Control Services SGD 15 100 000 100 D
Singapore Pte Ltd., Singapore
Slovakia SGS Slovakia spol.s.r.o., Kosice EUR 19 917 100 I
Slovenia SGS Slovenija d.o.o. – Podjetje za EUR 10 432 100 I
kontrol blaga, Ljubljana
South Africa SGS South Africa (Proprietary) Limited, ZAR 452 000 500 100 I
Johannesburg
Spain SGS Tecnos, SA, Sociedad Unipersonal, Madrid EUR 92 072 034 100 I
Sri Lanka SGS Lanka (Private) Limited, Colombo LKR 9 000 000 100 D
Sweden SGS Analytics Sweden AB, Linköping SEK 1 018 250 100 I
Switzerland SGS Société de Surveillance SA, Geneva CHF 100 000 100 D
Switzerland SGS SA, Geneva CHF 7 495 032 Ultimate
parent
company
Taiwan SGS Taiwan Limited, Taipei TWD 62 000 000 100 I
Tanzania African Assay Laboratories (Tanzania) Ltd, Dar TZS 2 000 100 I
Es Salaam
Thailand SGS (Thailand) Limited, Bangkok THB 20 000 000 99.99 D
Togo SGS Togo SA, Lomé XOF 10 000 000 100 D
Trinidad and Tobago SGS Trinidad Ltd, San Fernando USD 1 000 100 D
Tunisia SGS Tunisie SA, Tunis TND 50 000 50 D
Turkey SGS Supervise Gözetme Etud Kontrol Servisleri TRY 6 550 000 100 I
Anonim Sirketi, Istanbul
Turkmenistan SGS Turkmen Ltd., Ashgabat USD 50 000 100 D
Uganda SGS Uganda Limited, Kampala UGX 5 000 000 100 D
Ukraine SGS Ukraine, Foreign Enterprise, Odessa USD 400 000 100 D
United Arab Emirates SGS Gulf Limited Dubai Airport Free Zone – – – –
Branch
United States SGS North America Inc., Wilmington USD 73 701 996 100 I
Uruguay SGS Uruguay Limitada, Montevideo UYU 1 500 100 D
Uzbekistan SGS Tashkent Ltd., Tashkent USD 50 000 100 D
Vietnam SGS Vietnam Ltd., Ho Chi Minh City USD 288 000 100 D
Zambia SGS Inspections Services Ltd., Lusaka ZMK 16 944 000 100 I

190 Non-financial
statements
We are
reporting with
transparency.
Our approach to 191

sustainability reporting
Databank 192
Compliance and integrity 192

Customer relationship management 193
Public policy 193
Sustainable procurement and 194
supply chain
Human rights 195
Information security and data privacy 195
Workforce breakdown 195
Learning and development 197
Employee engagement 197
Talent attraction and retention 198
Remuneration199
Operational integrity 199
Community investment 200
Climate change – energy consumption 201
Climate change – energy efficiency 201
in buildings program
Climate change – greenhouse 202
gas emissions
Water and waste management 203
2022 GRI content index 204
Sustainable Accounting 212

Standards Board (SASB)
framework alignment
Independent Limited 213

Assurance Report

Annual Report
Our approach At SGS, we are committed to providing

to sustainability stakeholders with accurate and timely updates
reporting on our sustainability activities and performance,
and we strive to produce a report that is fair,
transparent and balanced, and meets the
needs of stakeholders.
Scope and boundaries Data collection process Assurance and basis of preparation
The scope of the sustainability information Robust data gathering is important to Each year, around 10% of our affiliates are
contained in this integrated annual report set targets and monitor performance. selected to be audited on all data reported
covers all regions and divisions of the SGS More than 60% of our data is collected and procedures in place to collect and
Group for the 2022 calendar year. A list of locally through centralized software consolidate data. Each audit is carried
SGS affiliates can be found on pages 187 to (SOLARIS), then reviewed and consolidated out by a qualified Sustainability Report
189 of this report. Unless stated otherwise, in a centralized manner. The remaining data Assurance (SRA) auditor.
our reported data scope covers the Group are gathered directly from global functions External assurance of the sustainability
business and targets for the period 1 January like the Global Legal & Compliance, performance indicators and the non-financial
to 31 December 2022. Global Procurement and Global Corporate performance indicators is an important
We have identified and prioritized the most Communications departments. part of our approach, and our sustainability
material impacts on our business and All sustainability data collected through reporting has been independently assured
on stakeholders across our value chain. SOLARIS is gathered on a half-year basis. since 2011.
This integrated annual report includes Remaining data is collected annually at In 2021, we appointed PricewaterhouseCoopers
performance data for our direct operations, the full year. SA (PwC) to provide independent assurance
as well as information on how we manage of our sustainability performance. PwC’s
the most material issues. External standards Assurance Report describes the work
We have published sustainability reports at
undertaken and their conclusion for the
For more information on how we SGS for more than ten years, and since 2015,
define our material issues, please reporting period to 31 December 2022.
we have integrated sustainability content
see page 42 of this report Documents relating to independent external
into our integrated annual report. We support
assurance in the years prior to 2022 are
the principle of integrated reporting, and
We report key performance indicators available in our Reporting Hub section on our
continue to move towards a fully integrated
(KPIs) from all of our facilities, subsidiaries, website: www.sgs.com/en/our-company/
reporting structure in line with the Integrated
and other business units, as determined corporate-sustainability/sustainability-at-sgs/
Reporting Framework. In 2019, we aligned
by our reporting boundaries. reporting-hub.
further to the Framework by using the six
Under the control approach, we endeavor capitals it defines as the structure of our Please see 2022 independent assurance
to account for 100% of the KPIs from integrated annual report. report on pages 213 and 214 of this
operations over which we have control. Since 2013, our non-financial information integrated annual report
We do not account for KPIs from operations has been developed using the guidelines
in which we own an interest but not a for the AA1000 Accountability Principles
control. Control is defined in financial terms. Standard and the Global Reporting Initiative’s
For joint ventures, we will use an equity Standards. We also align our reporting with
accounting basis. Where we do not have the Sustainability Accounting Standard for
accurate information for a given KPI we will the Professional & Commercial Services
exclude it from our accounting and reporting. Industry (SASB). Our reporting approach is
We will indicate this exclusion in the report. explained further in our Sustainability Basis
As an example, we currently do not account of Reporting.
for district heating and refrigerants in our Where GRI or SASB standards do not
total carbon dioxide (CO2) emissions. provide a methodology for a sustainability
We disclose our past and present performance indicator, or their methodology
performance over a five-year period in this is not appropriate, we apply the methodology
report. Sometimes historical data may differ provided in our Basis of reporting.
from that included in previous reports due For carbon emissions-related indicators,
to the availability of more accurate data or we follow the Greenhouse Gas Protocol
improved data gathering and/or reporting. (GHG Protocol) Corporate Standard
In such cases, variations in data of less than (financial control approach).
5% are generally considered immaterial. The London Benchmarking Group is used
However, significant changes to prior year as a guide to define indicators related to
data are disclosed where they first appear community investment.
in the report.

192 Non-financial
statements
Databank
Compliance and integrity

Integrity is one of our six business principles. Our code of integrity acts as a blueprint for our employees, affiliated companies, contractors,
subcontractors, joint venture partners and agents.
Any employee or third party can report violations through our Integrity Helpline. All the reports received are considered and evaluated.
Based on the data received we assess whether an investigation is needed or whether more information is needed. Reported issues might
be discarded only if the information provided was not sufficient or if the issue reported is not in the scope of the code of integrity.
2022 2021 2020
Total number of integrity issues reported through integrity helplines¹ 374 262 208
Total number of substantiated breaches of the code of integrity received through integrity helplines¹ 73 35 17
Broken down by type of breach:
Integrity of services 23 6 3
Integrity of financial records 3 4 1
Conflict of interest 12 – 2
Employee relations 10 9 9
Fair competition – – –
Compliance with laws 7 2 1
Gifts and entertainment – – –
Confidentiality 2 1 –
Use of company assets and resources 2 6 –
Environment, health & safety 7 – 1
Bribery and corruption 7 7 –
Intellectual property – – –
External communication – – –
Insider dealing – – –
Political donations and charitable contributions – – –
Consequences adopted during the reporting year, broken down by type : 2
Termination 38 11 3
Disciplinary action 29 18 6
Improvement in the processes 12 17 13
No action possible or needed 18 5 –
Under decision process – 7 8
Percentage of employees signing the code of integrity 100.0% 100.0% 100.0%
Percentage of employees trained on the code of integrity 99.9% 99.0% 99.0%
Percentage of operations analyzed for risks related to corruption 100.0% 100.0% 100.0%
Number and nature of confirmed incidents of corruption identified through corporate helplines1,3 7 7 –
Public legal cases regarding corruption brought against the organization/employees – – –
1. “Helplines” means channels used by employees and external parties to report suspected violations of the Code of integrity and submitted online, by phone call, sent via fax, email or post.
2. Consequences adopted during the reporting year. Some of these consequences may refer to breaches confirmed in previous years.
3. Measures taken for these 7 cases were the following: termination of employees (8), disciplinary action (1) and improvement in the processes (1).

Customer relationship management

How well we manage our customer relationships determines what we are able to achieve as a business, in the long term. That’s why
we aim to anticipate and respond to customer needs as they arise. We track customer sentiment annually through our global Voice of the
Customer (VoC) program. Customer satisfaction (CSAT) results were slightly lower than prior years due to the expansion of location and
type of customers surveyed, but very close to our 2023 target of 85%. Results are shared with all relevant stakeholders across the
organization and corrective actions are developed to increase customer satisfaction.
Following a change in the methodology, data of the actual year is now reported.
2022 2021 2020
Customer satisfaction score

(As a % score) 84.5% 88.0% 88.0%
Group’s revenue covered by Voice of the Customer surveys
(As a % of total revenue) 76.0% 34.0% 48.0%
Countries participating in Voice of the Customer survey
(# of countries) 27 12 15
Responses in Voice of the Customer surveys
(# of responses) 19 000 12 560 7 990
Public policy
We do not provide any financial or in-kind support, given directly or indirectly, to political parties, their elected representatives or persons
seeking political office. We support some industry associations, but the sum is not material, representing less than 0.01% of our revenue.
2022 2021 2020
Lobbying, interest representation or similar

(CHF) – – –
Contributions to local, regional or national political campaigns/organizations/candidates
(CHF) – – –
Trade associations or tax-exempt groups (e.g. think tanks) 1
(CHF) 1 121 161 716 652 523 622
Other (e.g. spending related to ballot measures or referendums)
(CHF) – – –
Total contributions and other spending
(CHF) 1 121 161 716 652 523 622
Contribution to industry associations as % of revenue Under Under Under
(As % of revenue) 0.01% 0.01% 0.01%
1. The main associations we contributed to in 2022 were: TIC Council: CHF 76 264.05; Energy Institute: CHF 61 870.11; World Travel and Tourism Council: CHF 50 228.75; Swissholding:
CHF 50 000; IMD International Institute for Management Development: CHF 50 000.

194 Non-financial
statements
Databank
continued
Our supply chain is diverse and covers over 100 countries from large industrial to small developing countries. These suppliers
are key stakeholders to SGS and we are committed to engage in an ongoing dialog to reach the highest social, economic and
environmental standards.
2022 2021 2020
Spend analyzed for sustainability risks1

(As a %) 100.0% 100.0% 100.0%
Tier 1 Suppliers analyzed for sustainability risks2
(As a % of total Tier 1 suppliers) 100.0% 100.0% 100.0%
Number of local suppliers
(As a % of total suppliers) 98.0% 98.0% 97.0%
Number of global suppliers
(As a % of total suppliers) 2.0% 2.0% 3.0%
Spend of local suppliers
(As a % of total spend) 84.0% 82.0% 80.0%
Spend of global suppliers
(As a % of total spend) 16.0% 18.0% 20.0%
1. Potential sustainability risks identified in the supply chain (as a % of spend): − Economic risk: Low: 59%; Medium: 40%; High: 1% − Social risk: Low: 65%; Medium: 35%; High: 0%
− Environmental risk: Low: 49%; Medium: 49%; High: 2%.
2. Tier 1 suppliers within the scope of the SAQ.
Spend by SGS supra-region Spend by SGS Category
Americas 20% CAPEX 14%
Europe, Africa and Middle East 46% External services 23%
Asia Pacific 34% Material and supplies 20%
General repairs
and maintenance 6%
Travel and vehicles 15%
Other OPEX 22%

Human rights
Our group human rights policy clearly sets out our commitment to treat everyone with whom we come into contact with fairness, dignity
and respect. It is in line with leading international human rights legislation and principles, and it applies to all those working for SGS or in our
supply chains.
2022 2021 2020
Number of operations identified as having a significant risk of incidences of child labor, forced
or compulsory labor, or where the right to exercise freedom of association may be violated – – –
Total number of proven incidents of discrimination3 4 – –
Number of grievances identified through helplines1 related to human rights3 4 – –
Total number of employees trained on our human rights principles 2
79 893 39 137 36 390
Percentage of employees trained on our human rights principles2 78.4% 39.4% 39.0%
Percentage of employees covered by collective bargaining 4
46% 44% 41%
1. “Helplines” means channels used by employees and external parties to report suspected violations of the Code of integrity and submitted online, by phone call.
2. Each year, the human rights training course is launched on December and all employees must have passed it by March. Employees that completed the training offline are not included,
which we are working to do next year.
3. Measures taken for these 4 cases were the following: 2 terminations and 2 disciplinary actions.
4. Employees covered by collective consultation/representation processes. The scope is limited to those affiliates where collective bargaining exists according to the International Labour
Organization database for coverage rate.
Information security and data privacy

Protection of personal data is key to every part of our business. It is at the heart of our commitment to our clients, our values, our principles,
our conduct and our success and is essential to maintaining trust. We are committed to conducting our business in accordance with all
relevant data protection and privacy laws of the countries in which we operate and in line with the highest standards of ethical conduct.
2022 2021 2020
Number of complaints received from outside parties and substantiated by the organization
(# of complaints) – – –
Substantiated complaints concerning breaches of data customer policy
(# of complaints) – 1 –
Number of complaints from regulatory bodies
(# of complaints) – – –
Completion rate of data protection and privacy e-learning
(As a % of people invited to the e-learning) 0%1 99.0% 98.8%
1. In 2022 there has been no global data privacy training for employees. New hires must take the Data Privacy Get Started e-learning course as part of the Shine program.
Workforce breakdown
Our workforce is characterized by diversity in generation, nationality and gender identity.
Type of contract 2022 2021 2020
Number of employees
(# of employees) 101 860 99 374 93 269
Permanent workers
(As a % of total employees) 92% 91% 91%
Casual workers
(As a % of total employees) 8% 9% 9%

196 Non-financial
statements
Databank
continued
Workforce breakdown continued
Gender, generation and other diversity indicators 2022 2021 2020
Employees by gender (female)

(As a % of total employees) 37.0% 36.5% 35.5%
Employees by gender (male)
(As a % of total employees) 63.0% 63.5% 64.5%
Employees by age – Under 30 years old (female)
(# of employees by ranges of age) 10 995 10 162 –
Employees by age – Under 30 years old (male)
Employees by age – 30 to 50 years old (female)
Employees by age – 30 to 50 years old (male)
Employees by age – Over 50 years old (female)
Employees by age – Over 50 years old (male)
Manager employees
(# of manager employees) 8 490 8 246 8 249
Manager by gender (female)
(As a % of managers) 33.9% 34.8% 33.1%
Manager by gender (male)
(As a % of managers) 66.1% 65.2% 66.9%
CEO-3 employees
# of CEO-3 employees 1 235 1 274 1 211
CEO-3 by gender (female) – ‘Women in Leadership’
(As a % of CEO-3 employees) 31.1% 29.0% 28.0%
CEO-3 by gender (male)
(As a % of CEO-3 employees) 68.9% 71.0% 72.0%
Women in management positions in revenue-generating functions
(As a % of women) 31.8% 34.4%
Women in STEM-related positions
(As a % of women) 33.8% 31.1%
Employees from vulnerable groups 2 287 1 299 1 275
With disabilities 795 660 657
Employees with disabilities – Female 369 290 274
Employees with disabilities – Male 426 370 383
With other vulnerabilities 1 489 639 618
Employees with other vulnerabilities – Female 547 269 264
Employees with other vulnerabilities – Male 945 370 354
Nationality 2022 2022
Employees by top 5 nationalities 1

Management workforce by top 5 nationalities
1
(As % of share in total workforce) (As % of share in total workforce)

Chinese 17.4% Chinese 13.5%
Indian 5.4% Indian 5.3%
Spanish 4.5% French 5.0%
German 4.0% German 4.6%
Peruvian 3.7% Brazilian 4.4%
1. This data covers 96% of our employees as USA employees are not included in this breakdown.

Learning and development

Each year we invest in the upskilling our employees’ capabilities in line with our business priorities and growth strategy. We promote self-
directed learning, tailor our talent development programs to fit local markets, business needs and employee expectations, and invest in digital
tools for training and development.
2022 2021 2020
Training ratio1
(As a % of total employment cost spent on training) 3.0% 2.6% 2.5%
Training hours per FTE
(# of hours per FTE) 54.7 45.8 48.8
Job related training hours per FTE
(# of hours per FTE) 43.3 38.9 42.0
Total training hours 2
(# million of hours) 5.3 4.3 4.3

Job related training hours
(# million of hours) 4.2 3.6 3.7
Performance reviews
(As a % of employees eligible to performance review) 85% 88% 86%
1. Training and hours spent cost per total employment cost, including safety training hours. On a constant currency basis.
2. Broken down by type of training: Management and leadership development: 2%; Apprentice & trainee training programs: 4%; Technical training: 16%; Non-Technical training: 2%;
Operational integrity training: 55%; Compliance training: 14%; Other: 7%.
Employee engagement
We value feedback and encourage employees to voice their opinions via our voluntary annual employee engagement survey. Our managers
then use this input to launch improvement actions with their teams. Each year we survey different geographies, and we benchmark ourself
against external norms; local management takes appropriate actions to improve our scores.
2022 2021 2020
Employees invited to participate in the employee engagement survey

(# of employees) 28 569 30 129 32 262
Response rate
(As a %) 79% 86% 74%
Engagement Index
(As score out of 100) 69 75 70
Actively engaged employees
(As a %) 64% 73% 65%
Manager effectiveness index
(As a score out of 100) 72 78 72

198 Non-financial
statements
Databank
continued
Talent attraction and retention
Our recruitment process is designed to enable us to select creative, innovative people who have passion, potential and integrity. We make
our selection based on a combination of candidates’ skills, competencies, experience and motivation. Through this approach and targeted
talent attraction strategies, we have welcomed 28 430 new hires (internal and external) in 2022.
2022 2021 2020
New hires
(# of employees) 28 430 29 486 18 546
Internal new hires
(As a % of total new hires) 15.1% 14.8% 19.7%
New hires (female)
(As a % of internal hires) 50.3% 50.3% 45.4%
New hires (male)
(As a % of internal hires) 49.7% 49.7% 54.6%
External new hires
(As a % of total new hires) 84.9% 85.2% 80.3%
New hires (female)
(As a % of external hires) 36.8% 35.2% 34.3%
New hires (male)
(As a % of external hires) 63.2% 64.8% 65.7%
Voluntary turnover
(As a % of permanent employees) 14.8% 14.7% 10.1%
Total turnover
(As a % of total permanent employees) 20.3% 20.5% 18.1%
Total turnover female
(% of total female) 19.6% 20.1% 16.0%
Total turnover male
(% of total male) 20.8% 20.7% 19.3%
Talent attraction and retention during the reporting year
Internal new hires External new hires Employees that left on their own will
Male 49.7% Male 63.2% Male 60.6%
Female 50.3% Female 36.8% Female 39.4%
<30 years old 31.0% <30 years old 47.0% <30 years old 38.3%
30-50 years old 63.9% 30-50 years old 46.2% 30-50 years old 54.6%
>50 years old 5.1% >50 years old 6.8% >50 years old 7.1%
Top Top Top

management 0.5% management 0.2% management 1.6%
Middle Middle Middle
Junior Junior Junior
Non-management Non-management Non-management
positions 62.5% positions 89.8% positions 85.7%

Remuneration
Our goal is to offer our existing and future talent a competitive compensation package, to attract, engage, motivate and retain them.
We systematically assess the competitiveness of our reward practices in all the markets in which we operate.
2022 2021 2020
Mean Gender Pay Gap 1
(As % of difference between men and women employees) 2.4% 3.0%

Median Gender Pay Gap 1
(As % of difference between men and women employees) (7.3%) (4.7%)

Mean Bonus Gap 1
(As % of difference between men and women employees) 21.0% 17.3%

Median Bonus Gap1
(As % of difference between men and women employees) (6.3%) (20.1%)
CEO and mean employee compensation ratio2 28.5 40.6 25.6
1. This data covers 98.1% of all SGS employees.

2. To make the ratio comparable, we have implemented cost of living adjustments using the Purchasing Power Parity conversion rates and it is calculated based only on base salary
and bonuses (excluding pension funds and extra hours).
Operational integrity
Employee health and safety along with environmental protection are a priority. As detailed in our business principles, protecting employees
and the environment from harm are fundamental behaviors at SGS. In 2022, we have continued to make progress towards our target and
have achieved a further reduction in our incident rates.
2022 2021 2020
Total Recordable Incident Rate (TRIR)¹

(occurrences per 200 000) 0.35 0.37 0.36
TRIR variation
(As a % against a 2018 baseline) (15.9%) (9.4%) (13.2%)
Number of recordable incidents²
(# of incidents) 346 357 334
Lost Time Incident frequency Rate (LTIR)³
(occurrences per 200 000) 0.19 0.22 0.23
LTIR variation
Number of near misses 4
(# of near misses) 2 180 2 273 1 959

Safety training hours
(# of hours) 2 937 914 2 692 702 2 483 305
Operational Integrity training per employee
(# of hours per FTE) 30.4 28.9 27.9
Total absence rate5
(As a % of days of sickness absence plus days lost per incidents with lost time per total days
worked) 2.22% 1.85% 1.61%
Sickness absence rate
(As a % of days of sickness absence per total days worked) 2.20% 1.82% 1.58%
Work-related absence rate
(As a % of days of days of lost time and restricted duty due to recordable incidents per total
days worked) 0.02% 0.03% 0.03%
1. Number of lost time, restricted duty, medical treatment incidents and fatalities per 200 000 hours worked.
2. Number of lost time, restricted duty, medical treatment incidents and fatalities.
3. Number of lost time incidents per 200 000 hours worked.
4. Event, situation or physical environment with the potential to cause injury, damage or loss to people, property and the environment, but which was avoided by circumstance.
5. Days of sickness absence and restricted duty per total days worked.

200 Non-financial
statements
Databank
continued
Community investment
We are committed to investing in the communities where we operate, and we do so across three pillars: empowerment, education and
environmental sustainability. In doing so, we are helping to tackle global challenges such as poverty, equal opportunities, health, education,
climate change and environmental degradation. In 2022, we have increased our investment in community and doubled the number of
volunteering hours.
2022 2021 2020
Investment in community (in cash, in kind and volunteering hours)

(CHF thousands on constant currency basis) 1 991 1 384 1 196
Investment in community variation
(As a % against a 2019 baseline) 54.3% 7.3% (7.3%)
Total community projects
(# of projects) 526 382 323
Community hours
(# of hours dedicated to community) 18 691 9 284 9 151
Community hours variation
(As a % against a 2019 baseline) 8.7% (46.0%) (46.8%)
Community investment
Investment per type Investment per nature of contribution Investment per pillar
Community investment 50.1% Cash contributions 71.3% Empowerment 46.6%
Occasional charitable donation 39.2% Volunteering contributions 17.8% Education 11.0%
Philanthropic sponsorship 10.7% In-kind contributions 7.3% Environmental sustainability 42.4%
Management contributions 3.6%

Climate change – energy consumption

As a sustainability leader that recognizes the threat posed by global climate change, we are setting the benchmark for reduced energy
consumption. Through initiatives such as our Energy Efficiency in Buildings (EEB) program, sustainable transport and Green IT, we are
actively reducing our own energy consumption at source. We are also moving away from fossil fuel based sources of energy by transitioning
to renewable energy.
2022 2021 2020
Total energy consumption by source

(MWh) 947 571 927 625 862 525
Vehicle fuels energy
(MWh) 310 792 300 594 288 856
Non-transport fuels energy 4
(MWh) 149 182 147 242 132 883

Total electricity
(MWh) 487 597 479 788 440 786
Standard electricity1
(MWh) 15 541 15 673 19 922
Renewable electricity2
(MWh) 472 056 464 116 420 864
Total renewable electricity
(As % of total electricity consumption) 97% 97% 95%
Energy intensity per revenue3
(MWh/CHF million) 142.7 149.1 158.0
Energy intensity per FTE
(MWh/FTE) 9.8 9.9 9.7
Electricity intensity per revenue 3
(KWh/CHF million) 73.4 77.1 80.8

Electricity intensity per FTE
(MWh/FTE) 5.0 5.1 4.9
1. Electricity bought from a non renewable tariff linked to Energy Attribute Certificates.
2. Electricity bought from local renewable sources of production and through energy attribute certificates. Emissions related to Distric heating are currently not included in this figure.
3. On a constant currency basis.
4. From non renewable sources.
Climate change – energy efficiency in buildings program

The energy used in our offices and laboratories worldwide accounts for 67% of our global energy consumption. It is therefore a key area of
focus for us to reduce energy use. In 2022, additional buildings were included in the program and further measures were identified across
the network.
2022 2021 2020
Buildings covered by the EEB program

(# of buildings) 701 694 678
Energy consumption from buildings covered by the EEB program
(As % of total electricity and non transport fuels consumed by SGS buildings) 80.0% 83.0% 83.0%
Energy conservation measures identified
(# of measures identified since beginning) 786 708 471

202 Non-financial
statements
Databank
continued
Climate change – greenhouse gas emissions
We have committed to reducing greenhouse gas emissions through the Science Based Targets initiative (SBTi), which advocates the setting
of targets and deadlines in line with climate science in order to future-proof growth. In 2022, we received approval for our 1.5ºC and net-zero
targets from the SBTi and we will continue our efforts towards these targets by focusing on our major source of scope 1 and 2 emissions
(vehicle emissions) and our scope 3 emissions associated to our supply chain.
2022 2021 2020
Total scope 1 + 2 emissions (market-based) 2,3
(CO 2e tonnes) 116 505 115 303 110 137

Scope 1 emissions from vehicles 77 261 74 491 71 629
Scope 1 emissions from buildings 30 785 30 084 26 644
Scope 2 electricity emissions (market-based)3 8 459 10 728 11 864
Voluntary carbon-offsetting CO 2 credits retired 4
(CO 2e tonnes) 116 504 131 542 122 952

Scope 2 electricity emissions (location-based) 220 398 223 190 207 009
Scope 3 emissions
(CO 2e tonnes) 850 621 820 776 689 902
Purchased goods and services 525 111 516 742 409 869
Capital goods 131 003 132 908 138 991
Fuel and energy related activities (not included in Scope 1 and Scope 2) 87 454 76 651 71 922
Waste generated in operations 19 128 15 389 13 793
Business travel 18 125 16 239 12 813
Employee commuting 69 800 62 847 42 514
Scope 1 + 2 emissions variation
Scope 3 emissions variation
(As a % against a 2019 baseline) 8.2% 4.4% (12.3%)
Scope 1+2 intensity per revenue market-based1,2,3
(CO 2e tonnes/CHF million) 17.5 18.5 20.2
Scope 1+2 intensity per FTE market-based 2,3
(CO 2e tonnes/FTE) 1.2 1.2 1.2

Scope 3 intensity 1
(CO 2e tonnes/CHF million) 128.1 131.9 126.4

Estimated district heating CO 2 emissions (excluded from scope 2)
(CO 2e tonnes) 6 867 6 577 5 697
Vehicle fleet average theoretical emissions
(gCO 2 /km) 128.3 134.6 136.2
1. On a constant currency basis.

2. Refrigerant gas emissions are not included in this figure.
3. District Heating emissions are not included in this figure.
4. We invest in verified off-setting projects that directly benefit communities where we have an impact, in 2022 we have off-set 58 303 tCO 2 with Uttarakhand run-of-the river project
and 58 303 tCO 2 with Gansu Jinta solar power generation project.

Water and waste management

While our water consumption and waste impact is relatively small compared to other industries, we monitor our impact and reduce our
resources’ footprint.
2022 2021 2020
Water purchased
(m3) 1 985 965 1 919 430 1 715 493
Water use/FTE
(m3/FTE) 20.5 20.6 19.3
Weight of waste generated
(metric tonnes) 78 560 65 199 55 536
Weight of hazardous waste generated
(metric tonnes) 16 217 14 688 11 121
SGS offices and labs 10 829 11 020 7 503
Client samples 5 388 3 667 3 618
Weight of non-hazardous waste generated
(metric tonnes) 62 343 50 511 44 415
Client samples 25 785 21 993 20 262
Weight of waste recovered
(metric tonnes) 24 783 20 888 15 293
Weight of hazardous waste recovered
(metric tonnes) 5 107 4 832 2 711
Client samples 2 764 1 087 936
Weight of non-hazardous waste recovered
(metric tonnes) 19 676 16 056 12 582
Client samples 10 733 7 993 7 026
Environmental incidents
(As # of environmental incidents including significant spills) 26 45 48

204 Reporting
standards
2022 GRI SGS has reported the information cited in this

content index GRI content index for the period 1 January
2022 to 31 December 2022 with reference
to the GRI Standards.
GRI standard and disclosure Reference Reported performance Assurance
GRI 2: General Disclosures 2021

2-1 Organizational details Page 130
2-2 Entities included in Pages 187-189
the organization’s
sustainability reporting
2-3 Reporting period, frequency Pages 191, 213-214, 236
and contact point
2-4 Restatements of information Page 191
2-5 External assurance Pages 213-214
2-6 Activities, value chain and Pages 18-21, 72-73, 194 – Spend by SGS Category*
other business relationships – Spend by SGS supra-region*
– Spend analyzed for sustainability
risks (As a %)*
– Tier 1 suppliers analyzed
for sustainability risks
(As a % of total Tier 1 suppliers)*
2-7 Employees Pages 195-196 – Number of employees
Information regarding the total number of non-guaranteed (# of employees)
hours employees, full-time employees and part-time – Permanent workers
employees including its breakdown by gender and by (as a % of total employees)
region is not disclosed. Information not broken down – Casual workers
by region as this is considered confidential information (as a % of total employees)
2-8 Workers who are Page 195 – Casual workers
not employees (as a % of total employees)
2-9 Governance structure Pages 86-96
and composition
2-10 Nomination and selection of Page 93
the highest governance body
2-11 Chair of the highest governance Page 89
body
2-12 Role of the highest governance Page 94
body in overseeing the
management of impacts
2-13 Delegation of responsibility Page 36 and 94
for managing impacts
2-14 Role of the highest governance Page 36 and 94
body in sustainability reporting
2-15 Conflicts of interest Page 93
2-16 Communication of Pages 192, 234 – Total number of substantiated breaches
critical concerns of the Code of Integrity received
through integrity helplines and broken
down by type of breach
– Total number of integrity issues
reported through integrity helplines
2-17 Collective knowledge of the Pages 36 and 93
highest governance body The newly created sustainability committee receives periodic
information about SGS sustainability programs and initiatives.
New regulations or requirements are analyzed during the
regular meetings to assess their potential impact in SGS
operations, supply chain and services. Specific analysis
sessions are organized on demand depending on the level
of complexity of a given topic and additional training needs
are constantly evaluated
2-18 Evaluation of the performance Page 93
of the highest governance body
2-19 Remuneration policies Pages 104-122
2-20 Process to determine Pages 104-122
remuneration
* Additional information to the GRI requirements.

2-21 Annual total compensation ratio Pages 104-123, 199 – CEO and mean employee
compensation ratio
2-22 Statement on sustainable Pages 8-11
development strategy
2-23 Policy commitments Pages 23, 228-235
2-24 Embedding policy commitments Page 23
2-25 Processes to remediate Pages 46-49 , 228-235
negative impacts
2-26 Mechanisms for seeking Pages 228-235
advice and raising concerns
2-27 Compliance with laws As indicated in our Code of Integrity, SGS complies with
and regulations applicable laws in the countries where it does business.
During 2022 the SGS Group was not condemned to any
significant fines or penalties for non-compliance with
any kind of laws and regulations
2-28 Membership associations Page 193
2-29 Approach to stakeholder Pages 40-41, 193 – Customer satisfaction score
engagement (As a % score)
– Engagement index*
2-30 Collective bargaining agreements We respect our employees’ right to have collective – Percentage of employees covered
representation and to enter into collective bargaining by collective bargaining
agreements where this is accepted by local law
Page 195
GRI 3: Material Topics 2021
3-1 Process to determine Pages 42, 191
material topics
3-2 List of material topics Pages 42, 191
As a result of this year’s materiality review, the “corporate
governance” and “sustainable supply chain” are now included
as key material topics for the company
3-3 Management of material topics Pages 42, 191
GRI 201: Economic Performance 2016
3-3 Management of material topics Pages 52-57
201-1 Direct economic value – Total economic value generated: CHF 6 662 Mio (Revenue: – Total economic value generated
generated and distributed CHF 6 642 Mio; Financial and other income: CHF 20 Mio) – Total economic value distributed
– Total economic value distributed: CHF 6 666 Mio (Salaries – Total economic value retained
and wages: CHF 3 331 Mio; Subcontractors’ expenses:
CHF 399 Mio; Depreciation, amortization and impairment:
CHF 521 Mio; Other operating expenses: CHF 1 493 Mio
(including Other taxes: 37 Mio and Community contributions
and charitable donations: CHF 1 Mio); Financial expenses:
CHF 71 Mio; Expected dividends due to non-controlling
interests and to shareholders as proposed by the Board of
Directors: CHF 632 Mio; Income taxes CHF 219 Mio
– Total economic value retained: CHF -4 Mio
201-2 Financial implications and other Pages 215-227
risks and opportunities due to
climate change
201-3 Defined benefit plan obligations Page 134
and other retirement plans Only qualitative information is disclosed
201-4 Financial assistance received SGS does not receive any significant financial assistance from
from government governments, but we benefit from incentives in the form of
grants from certain government schemes, such as energy-
saving incentives. However, these benefits are of low value.
This information is based on our global information gathering
system. We are not aware of any significant incentives granted
by governments or any financial aid granted to political parties
at local level during 2022

206 Reporting
standards
2022 GRI
content index
continued
GRI 202: Market Presence 2016

3-3 Management of material topics Page 199
202-1 Ratios of standard entry level SGS is committed to comply with the applicable labor
wage by gender compared to regulations in the countries where we operate. Whenever
local minimum wage possible, we improve the minimum wages set by the local
legislation. The quantitative information breakdown is unavailable.
The deployment of our global HR data management tool is
under review. We are currently evaluating alternative reporting
options and expect to report in coming years
GRI 203: Indirect Economic Impacts 2016
3-3 Management of material topics Pages 50-51 and 80-83
203-2 Significant indirect Pages 50-51 and 80-83
economic impacts
GRI 204: Procurement Practices 2016
204-1 Proportion of spending Pages 187-189, 194 – Number of local suppliers
on local suppliers The percentage of global and local suppliers is calculated (As a % of total suppliers)
considering 85% of the global spend. – Number of global suppliers
(As a % of total suppliers)
We consider global suppliers those managed by Global
Procurement at corporate level and local suppliers those – Spend of local suppliers
managed by local procurement teams at affiliate/regional (As a % of total spend)
level, regardless of where the supplier is based or the number – Spend of global suppliers
of affiliates where it provides its services/deliver its products (As a % of total spend)
GRI 205: Anti-corruption 2016
3-3 Management of material topics Pages 48, 66
205-1 Operations assessed for risks Our non-financial macro risk assessment model analyzes
related to corruption economic, political, social and environmental risks across 220
geographies and includes our own employees, suppliers,
indigenous people, migrant labor and local communities.
The analysis of economic and political risks includes the
following categories: government instability, policy instability,
state failure, recession, inflation, currency depreciation,
capital transfer, sovereign default, under-development, tax
issues, corruption, infrastructural disruption, energy security,
cybersecurity commitment, data protection and regulatory.
The results of this economic and political risks analysis in
2022 resulted in the following risk exposure:
– Direct operations (as a % of revenue): Low 58%; Medium
40%; High 2%
– Supply chain (as a % of spend): Low 59%; Medium 40%;
High 1%
205-2 Communication and training Pages 66-69, 192 – Percentage of employees trained
about anti-corruption policies Breakdown by gender and employee category is not reported on the Code of Integrity
and procedures as 99.99% of the employees have been trained on the Code
of Integrity
205-3 Confirmed incidents of corruption Page 192 – Number and nature of confirmed
and actions taken In 2022, there were no public legal cases regarding corruption incidents of corruption identified
brought against the organization or its employees. through corporate helplines
2021 confirmed incidents of corruption was restated to reflect
the actual number confirmed during the year
GRI 206: Anti-competitive Behavior 2016
3-3 Management of material topics We are committed to using competitive and fair practices. As
such, we do not engage in any understandings or agreements
that may improperly influence markets, or discuss pricing,
competitive bid processes, contractual terms, division of
territories or customer and market allocations with competitors.
We do not make disparaging or untruthful allegations regarding
competitors, or endeavor to obtain confidential information about
them using illegal or unethical means. Finally, our services and
capabilities are never advertised in any way that could appear to
be deceptive or misleading. We provide customers with detailed
quotes and invoices so that they are informed about every aspect
of our service, including pricing. Our Global Pricing Initiative,
developed through expert review of pricing practices across the
Group, ensures robust pricing processes and governance

206-1 Legal actions for anti-competitive In 2022, we did not identify any legal actions related to – Number of legal actions pending
behavior, anti-trust, and monopoly anti-competitive behavior, antitrust and monopoly practices. or completed during the reporting
practices This information is based on our global information gathering period regarding anti-competitive
system based on incidents reported via the SGS integrity behavior and violations of anti-trust
helplines. We are not aware of any significant incidents of and monopoly legislation in which
this type at a local level during 2022 the organization has been identified
as a participant
GRI 207: Tax 2019
GRI 302: Energy 2016
302-1 Energy consumption within Pages 76-77, 201 – Total energy consumption
the organization The information reported is limited to the total fuel and the by source (MWh)
total electricity consumption broken down by renewable – Vehicle fuels energy (MWh)
and non-renewable electricity – Non-transport fuels energy (MWh)
– Total electricity (MWh)
– Standard electricity (MWh)
– Renewable electricity (MWh)
– Total renewable electricity (As %
of total electricity consumption)
302-3 Energy intensity Pages 76-77, 201 – Energy intensity per revenue
(MWh/CHF million)
– Energy intensity per FTE (MWh/FTE)
302-4 Reduction of energy consumption Page 201
Compared to 2019, our energy consumption has increased
by 1.4% in 2022
GRI 303: Water and Effluents 2018
303-1 Interactions with water Pages 76-77
as a shared resource
303-2 Management of water Pages 76-77
discharge-related impacts
303-5 Water consumption Page 203 – Water purchased (m3)
The information reported is limited to the total
water consumption
GRI 304: Biodiversity 2016
3-3 Management of material topics Not applicable. Being a service based company, SGS
does not have a significant impact on biodiversity
GRI 305: Emissions 2016
305-1 Direct (Scope 1) GHG emissions Pages 76-77, 202 – Scope 1 emissions from vehicles
We are currently improving our refrigerant gases collection – Scope 1 emissions from buildings
system to ensure the accuracy of the data. To date, reliable
data about refrigerant consumption is unavailable and
therefore they are excluded from the Group’s carbon footprint
305-2 Energy indirect (Scope 2) Pages 76-77, 202 – Scope 2 Electricity emissions
GHG emissions (location-based)
– Scope 2 Electricity emissions
(market-based)
305-3 Other indirect (Scope 3) Pages 76-77, 202 – Scope 3 emissions
GHG emissions (CO2e tonnes)
– Purchased goods and services
– Capital goods
– Fuel and energy related activities
(not included in Scope 1 and
Scope 2)
– Waste generated in operations
– Business travel
– Employee commuting

208 Reporting
standards
2022 GRI
content index
continued
305-4 GHG emissions intensity Pages 76-77, 202 – Scope 1+2 intensity per revenue
market-based (CO2e tonnes/
CHF million)
– Scope 1+2 intensity per FTE
market-based (CO2e tonnes/FTE)
– Scope 3 intensity
(CO2e tonnes/CHF million)
305-5 Reduction of GHG emissions Pages 76-77, 202 – Scope 1+2 emissions variation
(as a % against a 2019 baseline)
– Scope 3 emissions variation
(as a % against a 2019 baseline)
GRI 306: Waste 2020
306-1 Waste generation and significant Pages 76-77, 203
waste-related impacts
306-2 Management of significant Pages 76-77, 203
waste-related impacts
306-3 (2020) Waste generated Pages 203 – Weight of waste generated
(metric tonnes)
– Weight of hazardous waste
generated (metric tonnes)
– Weight of non-hazardous waste
generated (metric tonnes)
306-3 (2016) Significant spills Pages 203 – Environmental incidents (As # of
environmental incidents including
significant spills)
306-4 Waste diverted from disposal Pages 76-77, 203 – Weight of waste recovered
(metric tonnes)
– Weight of hazardous waste
recovered (metric tonnes)
– Non-hazardous waste recovered
(metric tonnes)
GRI 308: Supplier Environmental Assessment 2016
308-2 Negative environmental Page 194 – Tier 1 suppliers analyzed for
impacts in the supply chain The information reported is limited to the number of suppliers sustainability risks (as a %
and actions taken assessed for environmental impacts of total Tier 1 suppliers).
risks (as a %)
GRI 401: Employment 2016
401-1 New employee hires Page 198 – New hires (# of employees)
and employee turnover Information not broken down by region – Voluntary turnover (As a %
of permanent employees)
– Total turnover by gender (As a %
of total permanent employees)
401-2 Benefits provided to We offer benefits such as healthcare plans and occupational
full-time employees that pension plans to our employees considering their type of
are not provided to temporary contract, in accordance with local market practices
or part-time employees
401-3 Parental leave Many of our affiliates provide paid maternity and paternity
leave in excess of legally required minimum. For example,
SGS Switzerland offers 16 weeks of maternity leave paid at
100%. SGS Australia offers 8 weeks of paid maternity leave
in excess of the local legally required minimums and SGS
South Africa, offers 5 paid days while local regulation provides
3 paid days. We also provide different childcare facilities in
many of our affiliates. Some of our offices count with special
rooms equipped with armchairs and freezes dedicated to
breastfeeding. We also offer our employees the possibility
of flexible working arrangements such as flexible check-in
and checkout, remote or part-time working to promote
worklife balance
No quantitative information available

GRI 402: Labor/Management Relations 2016

3-3 Management of material topics We strictly adhere to tariff structures and arrangements
negotiated with trade unions, while we also inform and consult
employees on relevant business activities. We respect statutory
minimum notice periods and give reasonable notice of any
significant operational changes in line with local practices and
labor markets. Our affiliates’ communication and consultation
processes are tailored to local needs
402-1 Minimum notice periods
regarding operational changes
GRI 403: Occupational Health and Safety 2018
403-1 Occupational health and safety Pages 66-69
management system
403-2 Hazard identification, All site managers are expected to perform risk assessments
risk assessment, and and to develop associated action plans. Employees have
incident investigation the right to stop work at any time, without reprisal, if they
consider there to be a health, safety or environmental risk.
Any such instances are reported through our Crystal OI
system. Our OI management system defines the criteria to
be met to comply with our own requirements and with the
local laws and regulations. To ensure compliance, we audit
regions and countries centrally, while local OI managers audit
our laboratories, offices and facilities. The audit results go into
our performance reports, along with incidents and hazards
information captured in Crystal
403-3 Occupational health services Pages 66-69
403-4 Worker participation, consultation, Pages 66-69

and communication on
occupational health and safety
403-5 Worker training on occupational Each role at SGS requires specific OI knowledge to support
health and safety the safety and well-being of our employees. All employees
are given training on-site standard operating procedures,
along with regular training sessions on Group OI management
systems and Rules for Life. We also operate a behavior-based
safety peer-topeer observation program
403-6 Promotion of worker health In line with our culture of care, we promote initiatives to
enhance the physical and mental well-being of our employees
so as to ensure their fitness for work. This includes the
provision of preventative health measures, such as vaccinations,
mental and physical health programs focused on awareness,
support and resilience
403-7 Prevention and mitigation of Pages 66-69
occupational health and safety
impacts directly linked by
business relationships
403-8 Workers covered by an Page 38 – Workers covered by an occupational
occupational health and safety We only report on the number of sites certified health and safety management system
management system and the number of employees covered by certified (ISO 45001)
management systems – Number of sites with a ISO 45001
403-9 Work-related injuries Page 199 – The number of fatalities as a result
No fatalities occurred in 2022 of work-related injury.
– Total Recordable Incident Rate
(TRIR) (occurrences per 200 000)
– Lost Time Incident frequency Rate
(LTIR) (occurrences per 200 000)
– Sickness absence rate (As a %
of days of sickness absence
per total days worked)
– Total absence rate (As a % of days
of sickness absence plus days lost
per incidents with lost time per total
days worked)
403-10 Work-related ill health Page 199 – The number of fatalities as a result
Information not broken down by gender and employee of work-related ill health
category. No fatalities occurred in 2022

210 Reporting
standards
2022 GRI
content index
continued
GRI 404: Training and Education 2016

404-1 Average hours of training Page 197, 199 – Training ratio (As a % of total
per year per employee Information not broken down by gender employment cost spent on training)*
and employee category – Percentage of employees trained
on the Code of Integrity*
– Safety training hours*
– Completion rate of data protection and
privacy e-learning (As a % of people
invited to the e-learning)*
404-2 Programs for upgrading Pages 62-63
employee skills and transition
assistance programs
404-3 Percentage of employees Page 197 – Performance reviews (As a
receiving regular performance and % of employees eligible to
career development reviews performance review)
GRI 405: Diversity and Equal Opportunity 2016
405-1 Diversity of governance bodies Pages 89-98, 196 – Percentage of employees by gender
and employees The Board of Directors is composed by 9 members – Percentage of managers by gender
(6 men and 3 women) – CEO-3 employees by gender
The Operations’ Council is composed by 17 members (# of CEO-3 employees)
(16 men and 1 woman) – Diversity on the Board and Operations
Council by gender, nationality and age
405-2 Ratio of basic salary and Page 199
remuneration of women to men
GRI 406: Non-discrimination 2016
3-3 Management of material topics Pages 66-69, 228-235
406-1 Incidents of discrimination Page 195 – Total number of proven incidents
and corrective actions taken of discrimination
GRI 407: Freedom of Association and Collective Bargaining 2016
407-1 Operations and suppliers in Page 194, 228-235 – Number of operations identified as
which the right to freedom having a significant risk of incidences
of association and collective of child labor, forced or compulsory
bargaining may be at risk labor, or where the right to exercise
freedom of association may be
violated
GRI 408: Child Labor 2016
408-1 Operations and suppliers at Page 194, 228-235 – Number of operations identified as
significant risk for incidents having a significant risk of incidences
of child labor of child labor, forced or compulsory
labor, or where the right to exercise
freedom of association may be violated
GRI 409: Forced or Compulsory Labor 2016
409-1 Operations and suppliers at Page 194, 228-235 – Number of operations identified as
significant risk for incidents of having a significant risk of incidences
forced or compulsory labor of child labor, forced or compulsory
labor, or where the right to exercise
freedom of association may be violated

GRI 413: Local Communities 2016

413-1 Operations with local community Pages 72-73, 200 – Investment in community
engagement, impact assessments, We have implemented such programs in 56.3% (CHF thousands on constant
and development programs of our affiliates currency basis)
– Total community projects
(# of projects)
– Community hours (# of hours
dedicated to community)
413-2 Operations with significant actual Pages 50-51, 72-73
and potential negative impacts on
local communities
GRI 414: Supplier Social Assessment 2016
414-2 Negative social impacts in the Page 194 – Tier 1 suppliers analyzed for
supply chain and actions taken The information reported is limited to the number sustainability risks (as a % of total
of suppliers assessed for social impacts Tier 1 suppliers).
risks (as a %)
GRI 415: Public Policy 2016
3-3 Management of material topics Page 193
415-1 Political contributions Page 193 – Contributions to local, regional
or national political campaigns/
organizations/candidates (CHF)
GRI 417: Marketing and Labeling 2016
3-3 Management of material topics We provide customers with detailed quotes and invoices
so that they are informed about every aspect of our service,
including pricing. Our Global Pricing Initiative, developed
through expert review of pricing practices across the Group,
ensures robust pricing processes and governance
417-2 Incidents of non-compliance In 2022, we were not issued with any significant fines or – Total number of incidents of non-
concerning product and service penalties for non-compliance with regulations concerning compliance with regulations and/or
information and labeling product and service information and labelling voluntary codes concerning product
and service information and labeling
417-3 Incidents of non-compliance In 2022, we were not issued with any significant fines or – Total number of incidents of non-
concerning marketing penalties for non-compliance with regulations concerning compliance with regulations and/or
communications marketing communications. voluntary codes concerning marketing
communications, including advertising,
promotion, and sponsorship
GRI 418: Customer Privacy 2016
418-1 Substantiated complaints Pages 62-63, 195 – Number of substantiated complaints
concerning breaches of The total number of identified leaks, thefts, or losses concerning breaches of data
customer privacy and losses of customer data is not reported customer policy
of customer data – Number of complaints from
regulatory bodies
– Number of complaints received from
outside parties and substantiated by
the organization

212 Reporting
standards
Sustainable Accounting The following tables illustrate how the

Standards Board Company’s sustainability disclosures align
(SASB) framework with the SASB Disclosure Topics for the
alignment Professional & Commercial Services industry,
and where specific information may be found.
Sustainability disclosure topics & accounting metrics

Accounting Level of Page number(s)
Topic Code metric disclosure and/or URL(s)
Data SV-PS-230a.1 Description of approach to identifying and addressing data Disclosed Pages 46-48
Security security risks
SV-PS-230a.2 Description of policies and practices relating to collection, Disclosed Privacy at SGS
usage, and retention of customer information
Privacy policy
SV-PS-230a.3 (1) Number of data breaches Disclosed Page 195
(2) Percentage involving customers’ confidential business
information (CBI) or personally identifiable information (PII)
(3) Number of customers affected
Workforce SV-PS-330a.1 Percentage of gender and racial/ethnic group representation for Disclosed Pages 89-91, 97-98, 196
Diversity & (1) Executive management, and
Engagement
(2) All other employees
SV-PS-330a.2 (1) Voluntary, and Disclosed Page 198
(2) Involuntary turnover rate for employees
SV-PS-330a.3 Employee engagement as a percentage Disclosed Page 197
Professional SV-PS-510a.1 Description of approach to ensuring professional integrity Disclosed Pages 66-69
Integrity Code of integrity
Privacy policy
SV-PS-510a.2 Total amount of monetary losses as a result of legal Disclosed In 2022, we were not issued with
proceedings associated with professional integrity any significant fines or penalties
for non-compliance with regulations
associated with professional integrity
Activity metrics
Level of Page number(s)
Activity metric Code disclosure and/or URL(s)
Number of employees by: SV-PS-000.A Partial1 Page 196

(1) Full-time and part-time
(2) Temporary, and
(3) Contract
Employee hours worked; percentage billable SV-PS-000.B Not available2 –
1. FTEs, number of employees and percentage of casual and permanent workers are disclosed. We are working on reporting the requested breakdown in future reports.
2. The employee hours worked are only available at theoretical level. We are working on reporting these figures in future reports.

Independent Limited Assurance Report

on selected 2022 sustainability indicators included in the non-financial
performance reporting to the Board of Directors of SGS SA, Geneva
We have been engaged to perform assurance procedures to provide limited assurance on selected 2022 sustainability
indicators (including the GHG statement) of SGS SA and its consolidated subsidiaries (“SGS”) included in the Integrated
Report (“Report”) for the year ended 31 December 2022. Our limited assurance engagement focused on selected 2022
sustainability indicators as presented in the 2022 GRI Content Index of the Report of SGS SA on pages 204 to 211
marked with the check mark .
The reporting criteria used by SGS is described in the SGS Basis of Reporting document in the section “2. REPORTING
PRINCIPLES AND EXTERNAL STANDARDS” defining those procedures, by which the related sustainability indicators
are internally gathered, collated and aggregated. The SGS Basis of Reporting document is based on the GRI Sustaina-
bility Reporting Standards (GRI Standards) published by the Global Reporting Initiative (GRI) and the GHG Protocol
Corporate Accounting and Reporting Standard, Corporate Standard, Revised edition, among others. Our evaluation of
the selected 2022 sustainability indicators (including the GHG statement) is against applicable GRI-Criteria and the GHG
Protocol Corporate Standard (hereafter referred to as the “related GRI-Criteria”).
Inherent limitations
The accuracy and completeness of sustainability indicators (including the GHG statement) are subject to inherent limita-
tions given their nature and methods for determining, calculating and estimating such data. Our assurance report should
therefore be read in connection with SGS Basis of Reporting document, its definitions and procedures on sustainability
reporting therein. Further, the greenhouse gas quantification is subject to inherent uncertainty because of incomplete scientific
knowledge used to determine emissions factors and the values needed to combine emissions of different gases.
SGS responsibility
The Board of Directors of SGS is responsible for the Report as well as for selection, preparation and presentation of the
2022 sustainability indicators (including the GHG statement) in the Report in accordance with the SGS Basis of Prepara-
tion document. This responsibility includes the preparation of the SGS Basis of Reporting document and the design, im-
plementation, and maintenance of related internal control relevant to this reporting process that is free from material mis-
statement, whether due to fraud or error and the appropriate record keeping.
Independence and quality management

We are independent of the SGS SA in accordance with the International Code of Ethics for Professional Accountants
(including International Independence Standards) issued by the International Ethics Standards Board for Accountants
(IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code, which is founded
on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional
behaviour.
PricewaterhouseCoopers SA applies International Standard on Quality Management 1, which requires the firm to de-
sign, implement and operate a system of quality management including policies or procedures regarding compliance
with ethical requirements, professional standards and applicable legal and regulatory requirements.
Practitioner’s responsibility
Our responsibility is to express a limited assurance conclusion on selected 2022 sustainability indicators (including the
GHG statement) as presented in the 2022 GRI Content Index of the Report on pages 204 to 211 marked with the check
mark . We conducted our engagement in accordance with the International Standard on Assurance Engagements
(ISAE) 3000 (Revised) ‘Assurance engagements other than audits or reviews of historical financial information’ and the
International Standard on Assurance Engagements 3410, Assurance Engagements on Greenhouse Gas Statements
('ISAE 3410'), issued by the International Auditing and Assurance Standards Board. These standards require that we
plan and perform this engagement to obtain limited assurance about on whether anything has come to our attention that
causes us to believe that the selected 2022 sustainability indicators (including the GHG statement) presented in the
2022 GRI content index are not free from material misstatement evaluated against the related GRI-Criteria.
PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, 1211 Geneva 2, Switzerland

214 Reporting
standards
A limited assurance engagement undertaken in accordance with ISAE 3000 (revised) and ISAE 3410 (including the
Independent Limited Assurance Report

GHG statement) involves assessing the suitability in the circumstances of SGS’ use of applicable criteria as the basis for
the preparation of selected 2022 sustainability indicators (including the GHG statement), assessing the risks of material
misstatement of these sustainability indicators whether due to fraud or error, responding to the assessed risks as neces-
sary in the circumstances, and evaluating the overall presentation of these sustainability indicators. A limited assurance
on selected 2022 sustainability indicators included in the non-financial

engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assess-
ment procedures, including an understanding of internal control, and the procedures performed in response to the as-
performance reporting to the Board of Directors of SGS SA, Geneva

sessed risks. The procedures selected depend on the assurance practitioner’s judgement.
Summary of the work performed

Our limited assurance procedures included:
We have been engaged to perform
• Reviewing the SGS assurance procedures
Basis of Reporting documentto provide limited
and the SGS assurance
Group onManual
Sustainability selected 2022 sustainability
and observing the appli-
cation
indicators (including the GHG statement) of SGS SA and its consolidated subsidiaries (“SGS”) included in the Integrated
• Interviewing SGS representatives at Group and country level in Thailand, Japan, India, Argentina, Turkey, Vietnam
Report (“Report”) for and
the Cameroon
year ended 31 December
responsible 2022.
for the data Our and
collection limited assurance engagement focused on selected 2022
reporting
sustainability indicators as presented
• Inquiries of personnelininvolved
the 2022 GRI
in the Content
preparation of Index of the
the Report Report
regarding theof SGS SAprocess,
preparation on pages 204 tocontrol
the internal 211
system relating to this process and selected disclosures in the Report
marked with the check mark .
• Inspecting the relevant documentation on a sample basis
• Performing tests on a sample basis of evidence supporting the selected 2022 sustainability indicators concerning
The reporting criteriacompleteness,
used by SGS is described
accuracy, adequacy inand
theconsistency
SGS Basis of Reporting document in the section “2. REPORTING
PRINCIPLES AND EXTERNAL STANDARDS” defining those procedures, by which the related sustainability indicators
We have
are internally gathered, not carried
collated andout any work on The
aggregated. data other
SGSthan outlined
Basis in the scopedocument
of Reporting and subjectis
matter
basedsection defined
on the GRIabove. We
Sustaina-
believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our assurance conclusions.
bility Reporting Standards (GRI Standards) published by the Global Reporting Initiative (GRI) and the GHG Protocol
Corporate Accounting and Reporting Standard, Corporate Standard, Revised edition, among others. Our evaluation of
Conclusion
the selected 2022 sustainability indicators (including the GHG statement) is against applicable GRI-Criteria and the GHG
Based on the procedures we performed, nothing has come to our attention that causes us to believe that the selected
Protocol Corporate2022
Standard (hereafter
sustainability referred
indicators to as
(including the the
GHG“related
statement)GRI-Criteria”).
as presented in the 2022 GRI Content Index of the Report
marked with the check mark are not prepared and disclosed in all material respects in accordance with the related
GRI-criteria.
Inherent limitations
The accuracy and completeness
Restriction of useofand
sustainability
purpose of the indicators
report (including the GHG statement) are subject to inherent limita-
tions given their nature
This report is prepared for, and only for, thecalculating
and methods for determining, and estimating
Board of Directors such
of SGS SA, and data.
solely for Our assurance
the purpose report
of reporting to should
therefore be read inthem
connection with 2022
on the selected SGSsustainability
Basis of Reporting document,
indicators (including its definitions
the GHG and
statement) as procedures
presented on sustainability
in the 2022 GRI Content
reporting therein. Further,
Index ofthe
thegreenhouse
Report markedgas withquantification
the check markis subject to inherent
and no other uncertainty
purpose. because
We do not, in ofconclusion,
giving our incomplete scientific
accept or
assume responsibility (legal or otherwise) or accept liability for, or in connection with, any other purpose for which our
knowledge used to determine emissions factors and the values needed to combine emissions of different gases.
report including the conclusion may be used, or to any other person to whom our report is shown or into whose hands it
may come, and no other persons shall be entitled to rely on our conclusion.
SGS responsibility
We permit the disclosure of our report, in full only and in combination with the SGS Basis of Reporting document, to ena-
The Board of Directors ofBoard
ble the SGSofisDirectors
responsible for the Report
to demonstrate that they as
havewell as for selection,
discharged preparation
their governance and presentation
responsibilities by commissioningof the
2022 sustainability an
indicators (including
independent assurancethe GHG
report overstatement)
the selected in thesustainability
2022 Report in indicators
accordance with the
(including theGHG
SGS Basis ofasPrepara-
statement) pre-
tion document. Thissented
responsibility
in the 2022includes
GRI Content theIndex
preparation of marked
of the Report the SGS withBasis of Reporting
the check mark document
without assuming and the design,
or accepting any im-
plementation, and maintenance of related
responsibility or liability to anyinternal control
third parties on ourrelevant to this
part. To the reporting
fullest process
extent permitted thatwe
by law, is will
free notfrom material
accept or as- mis-
statement, whethersumedue responsibility
to fraud or to anyone
error andother
the than the Board of
appropriate Directors
record of SGS SA for our work or this report.
keeping.
Independence and quality management
We are independent of the SGS SA in accordance with the International Code of Ethics for Professional Accountants
(including International Independence Standards) issued by the International Ethics Standards Board for Accountants
(IESBA Code). WeGuillaume
have fulfilled
Nayet our other ethical responsibilities
Maegan in accordance with the IESBA Code, which is founded
Gokarn
on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional
behaviour.
PricewaterhouseCoopers SA applies
‘The maintenance andInternational Standard
integrity of SGS on Quality
SA’s website Management
and its content 1, which requires
are the responsibility the firm
of the Board to de-
of Direc-
sign, implement and tors; the work
operate carried out
a system by the assurance
of quality management provider does notpolicies
including involve consideration
or procedures of the maintenance
regarding and in-
compliance
tegrity of the SGS SA website and, accordingly, the assurance providers accept no responsibility for any
with ethical requirements,
changes professional
that may havestandards
occurred to and applicable
the reported legal andindicators
sustainability regulatory requirements.
or criteria since they were initially
presented on the website.
Practitioner’s responsibility
Our responsibility is to express a limited assurance conclusion on selected 2022 sustainability indicators (including the
2 SGS SA | Independent Limited Assurance Report
GHG statement) as presented in the 2022 GRI Content Index of the Report on pages 204 to 211 marked with the check
mark . We conducted our engagement in accordance with the International Standard on Assurance Engagements
(ISAE) 3000 (Revised) ‘Assurance engagements other than audits or reviews of historical financial information’ and the
International Standard on Assurance Engagements 3410, Assurance Engagements on Greenhouse Gas Statements
('ISAE 3410'), issued by the International Auditing and Assurance Standards Board. These standards require that we
plan and perform this engagement to obtain limited assurance about on whether anything has come to our attention that
We are
leading the
way on climate
change.
This report presents SGS’s TCFD Report 215

governance, strategy,
Introduction216
management practices and Governance217
Strategy219
metrics in relation to climate Risk management 226
change and its impact on the Metrics and targets 227
organization. This report follows

TCFD recommendations and
methodology, which we will
further adopt going forward.

216 Appendix:
TCFD Report
Introduction As a sustainability leader, SGS is committed to

a climate change strategy and to help our customers
transition to a low carbon economy. This supports
our purpose of enabling a better, safer and more
interconnected world.
Our stakeholders already require detailed This increases our transparency and will This whilst also continuing to compensate
and comprehensive information on our help our stakeholders make more informed our remaining carbon emissions, further
sustainability performance, including climate decisions when engaging with SGS. It will developing our Sustainable Solutions
change related analysis and discussion, also help us align with the Swiss regulation, Framework and maintaining our capital
much of which you can find in our 2022 according to which, from 2024, large Swiss allocation decisions and management
Integrated Report. To add to our industry firms will be legally bound to report on incentivization to sustainable criteria.
leading sustainability performance and climate issues including climate-related During 2022, we also continued to embed
reporting, and to meet future reporting risks and opportunities. climatic risks and opportunities in our
requirements, we are publishing our Helping in the fight against climate change company decision making, and quantified
TCFD report. through changing our company behavior and the financial impact of some of our key risks
The purpose of the TCFD is to promote the provision of services to our customers and opportunities.
international financial stability through is a key factor in our purpose of enabling a
consistent information provided to financial better, safer and more interconnected world.
market participants that assess and value This is reflected by the upgrade in 2022
climate-related risks and opportunities. of our science-based targets, from 2.0°C
The additional reporting in this document to 1.5°C by 2030, and our commitment to
includes: our strategy to address climate achieve Net Zero by 2050.
related risks and opportunities, the results
of our scenario analysis, and our main
climatic risks and opportunities and
related impact in our organization.

Governance
Board oversight Oversight Management’s role

The SGS Board of Directors is ultimately
Structural overview responsible for the direction of the Group. Structural overview
The competencies sought by the Group This includes assessing risks facing the Our Operations Council is made up of five
for its Board of Directors include the business and reviewing risk management executive vice presidents, seven Chief
experience of senior executive leadership in and mitigation policies. The Board is Operating Officers and two functional
international businesses, strategic planning, ultimately responsible for SGS’s group Senior Vice Presidents, as well as our CEO,
finance, technology, cybersecurity, digital, strategy, mission and values, including those CFO and General Counsel. The council
innovation and sustainability. When selecting related to climate change. formulates, approves and implements group
candidates for the Board of Directors, the In 2022, the Sustainability Committee met strategy, approving and implementing more
company has due regard to experience, three times. In addition, the members of the detailed strategies, policies and targets
professional qualifications, areas of Board regularly receive reports on progress through all operations across the Group and
expertise, age, gender, national background against our corporate targets. including those related to climate change.
and leadership style, so that at all times, The Operations Council, which is chaired by
Our 2030 Sustainability Ambitions were
the Board and its committees have the the CEO, typically meets every month.
approved by the Board and include specific
required skills.
climate targets for 2023 and 2030. Sustainability and climate change are an
The directors bring a wide range of agenda item and the corporate sustainability
These targets include our science-based
experience and skills to the Board. team often attends these meetings to
targets, that we upgraded in 2022, moving
They participate fully in decisions on key present and discuss sustainability and
from a 2ºC ambition to 1.5ºC. This made us
issues facing the Group including risks climate change topics.
the first TIC company to receive approval
from and services provided to customers
for our 1.5ºC and net-zero targets from the The Operations Council is comprised
to address climate change. Their combined
Science Based Target initiative (SBTi). of a wide range of senior management
expertise in the areas of finance, commercial
Our sustainability ambitions are embedded representing the full breadth of the
law, digital, innovation, strategy and
in our remuneration policy with 20% of SGS Group:
sustainability, and their respective positions
of leadership in various industrial sectors the long-term incentive based on the key • The chief operating officers provide insight
are important factors contributing to the priorities of decarbonization, health and in terms of our operations at a regional
successful governance of SGS. safety and diversity. level (e.g. the impact that a climate
The risk assessment and evaluation of mitigation program could have on the
In 2022, a Sustainability Committee of the
climate change risks is integrated within regions or how to best implement it)
Board was created to reflect the growing
importance of sustainability to all our the Group’s risk assessment model and • The executive vice presidents provide
stakeholders and build on the substantial follows the same paths and procedures of insight in relation to our services (e.g.
progress already made by the company evaluation. In this regard, as part of our risk how to maximize the opportunities that
and its employees. assessment strategy, we assess the climate climate change brings in relation to our
change risks for the entire organization service offer)
The Sustainability Committee assists the
twice a year, and corrective and follow-up • The senior vice presidents (including
Board in defining the group policies and
actions are planned to mitigate the climate- the SVP of Corporate Communications,
strategies relating to sustainability, including
related risks. Sustainability & Investor Relations) provide
matters relevant to the Group non-financial
The Board of Directors, the Sustainability insight in relation to our functions (for
reporting and targets of reduction of
Committee and the Audit Committee example, the chief compliance & legal
greenhouse gas emissions.
review, discuss and approve our climate officer advises on the legal implications of
Please refer to the Corporate change risk strategy and assess the climate change and associated regulation),
Governance section of our 2022 effectiveness and appropriateness of the processes and risks, including those
Integrated Report for more information Group’s risk management, internal controls related to climate change.
and governance processes as well as the • These are monitored on an ongoing basis
reliability of internal financial and operational by the Board of Directors with the approval
information. They also review and guide of the Operations Council.
our risk management policies and ensure
that the standards and policies of the Group
are respected. The cross-membership
organization of the board contributes to the
robustness of discussions and transparency.
By reviewing and guiding risk management
policies, the Board gains the information it
needs to follow up on climate change risk
issues and give direction to the organization,
as this information enables it to mitigate risks
and identify potential areas for improvement.

218 Appendix:
TCFD Report
Governance
continued
In addition, an annual risk assessment Incentive structure

process is conducted as follows: Environment, social and governance (ESG)
• Main divisions and functions at local, metrics are included in the long-term
regional and global levels proceed to incentive scheme for all executive members
identify potential risks. The risks are and local management teams across the
then classified and evaluated by their organization, accounting for 20% of the
criticality (magnitude of impact and incentive opportunity.
likelihood of occurrence), also reflecting These ESG metrics have been selected
SGS’s risk appetite and risk tolerance by the Board of Directors in line with the
levels. The respective lines of business Company’s sustainability ambitions, in the
and functions also define and implement areas of diversity and inclusion (women
required mitigation actions to address in leadership positions), health and safety
the existing risks. (Lost Time Incident Rate), and environment
• After risks are identified, the Group protection (CO2 emissions).
Risks Steering Committee, followed by The vesting level for the ESG metrics
Operations Council, chaired by our CEO, is defined based on the Company’s
validates the results. The results and achievements against pre-defined
conclusions are also shared with the Board performance levels, and can range between
of Directors and the Audit Committee zero (in case the performance of two of the
• The Board of Directors and the Audit metrics is below target) and 150% (in case
Committee review and discuss with the performance of all three metrics is at
management the outcome of the above maximum or above).
risk assessment and propose further In addition, the drivers of our short-term
actions. Special focus is placed on variable incentive include annual financial
ensuring that all main risks (whether performance, individual performance
internal or external) relevant to SGS against leadership competency model
organizations, are sufficiently covered, and sustainability metrics.
with proper action plans in place to
regularly monitor the impact and
mitigation of such risks.

Strategy
Time horizons
We have defined the following time horizons for climate-related risks and opportunities:
Time horizon Time horizon Time horizon

Short term Medium term Long term
Time period Time period Time period
Present to 2023 2023 to 2030 2030 to 2050
Rationale Rationale Rationale
Our Sustainability Ambitions Our Sustainability Ambitions We are committed to achieving
2030 set short-term targets 2030 set medium-term targets Net Zero by 2050
These horizons were chosen because they are aligned with our business and sustainability strategies.
Impact on business, strategy Managing impact These risks and opportunities are prioritized
and financial planning In addition to identifying and evaluating depending on this assessment. An example
potential risks, for all our operations and of how we are investing to capture these
Identifying and quantifying impacts functions at local, regional and global levels opportunities is our sustainability solutions.
Climatic risks and opportunities are identified are required to explain the associated Our Sustainability Solutions Framework has
through various channels: mitigation programs, in order to define the been designed to support our customers
residual risks. These residual risks are then as they respond and adapt to societal and
• Climatic scenario analysis: through climatic
evaluated against SGS risk appetite and risk environmental challenges by implementing
analysis models, market trends, upcoming
tolerance level. sustainable, safer and more efficient
regulations and megatrends
• Our operations: they are up to date with In addition to the process described in processes across their value chains.
market changes that can result in risks section 2.2, executive vice presidents of As well as enhancing service visibility for
and/or opportunities each of our divisions take climatic risks into customers, the new framework also enables
consideration when defining the strategy of us to quantify and track revenue from
• Business continuity team: they analyze,
the division and in their financial planning. sustainability activities and helps with our
anticipate and prepare the organization
In most cases, this includes diversifying process of measuring the value to society
for potential business disruption, which
into other services or geographies where a that these services provide.
includes extreme weather events
portion of the business could be disrupted
Identified climatic risks include upstream due to market or regulatory changes, and
and downstream activities across the investing where new opportunities are likely
supply chains for all our stakeholders, to appear or where there may be an increase
which are input into our risk intelligence in demand for an existing service.
tool for evaluation.

220 Appendix:
TCFD Report
Strategy
continued
Main risks and opportunities

Below are the main risks and opportunities that could have a financial impact on the organization:
Main climate-related risks
Risk category Impact Time

& risk description Mitigation horizon Geography
Increasing price
Regulatory
Due to an increase in the price of carbon off-sets Reducing our carbon emissions Medium Global
of carbon (to maintain our carbon neutrality) and to an and energy consumption through term
increase in carbon taxes from governments. our climate change mitigation
strategy. Implementing a
strategy to mitigate the increase
in carbon offsets and increasing
self-generation of renewables.
Increased Higher operational costs to comply with climate We take a proactive approach Short Global
compliance related legislation (e.g. EU Taxonomy, adoption and adopt best- in-class practices term
costs of TCFD recommendations, etc.). towards climate change
mitigation and adaptation.
Failing to adapt to
Technology
Not adopting low carbon technologies (such as Our climate change mitigation Medium Global
new low carbon low carbon vehicles, energy efficiency measures strategy ensures that we term
technologies for our buildings or renewable energy generation) continuously innovate, for
would reduce our competitiveness and affect example through our energy
our reputation. efficiency in buildings program
or our vehicle emissions policy.
Shifts in service
Market
Market changes due to climate change can have We are diversifying our market Medium Global
demand a significant impact on client demand for SGS segment, to increase revenues term
services, either directly or indirectly. Some of from markets that will be
the specific potential shifts we have identified developing as a result of climate
by division are: change. Cornerstone to this
• Natural Resources: risks associated with are our sustainability solutions,
coal phaseout and different types of crops a wide range of services
in several regions, and with climate change that help organizations to
regulation and market demands implement better and more
efficient processes, address
• Connectivity & Products: two potential risks
stakeholder concerns, address
associated with carbon pricing and changes
risks and accomplish their
in customer behavior
sustainability goals. The impact
• Industries & Environment and Knowledge:
of this mitigation measure is
risks associated with transition-related
displayed as an opportunity
new markets
below, under “main climate-
related opportunities.”
Climate
Reputation
Failing to address appropriately our impact Our sustainability team ensures Long Global
reputation on climate change or to comply with climate that our approach to addressing term
regulation would impact the value of our brand climate change is best-in-class
and imply the loss of clients. and credible. Our sustainability
and legal teams ensure that we
stay up to date with legislation
and comply with all regulations.

Risk category Impact Time

& risk description Mitigation horizon Geography
Extreme
Acute physical
Extreme weather conditions, such as cyclones, We have business continuity Short, Global
weather hurricanes or floods, can affect our business guidelines and a global medium,
performance and continuity, by forcing us to emergency management and long
close sites disrupting our logistics, etc. standard which our affiliates term
must implement at local level.
This ensures that 100% of our
revenues, as well as any new
operations, are protected against
extreme weather-conditions.
Business continuity programs
across SGS define roles and
responsibilities in case of crisis
and provide guidelines and
group procedures to organize a
coordinated response in case
of emergencies.
Increase
Chronic physical
Higher mean temperatures result in higher Through our energy efficiency in Short, Global
in mean energy consumption and usage of refrigerant buildings program we implement medium,
temperatures gases, which translate into CO2 emissions. measures to optimize energy and long
consumption in our facilities. term
Our energy efficiency in
buildings program covers our
entire operations, ensuring that
100% of our revenues, as well
as any new operations, are
protected against the increase
in mean temperatures.
We are also working on reducing
the fugitive emissions of
refrigerant gases.
Rising Our coastal facilities could be impacted, Given that rising sea levels Long Global
sea levels requiring relocation. is a slow phenomenon, we term
continually assess when it
will be necessary to move
affected facilities.
* The financial impact related to shifts in service demand covers SGS’s services related to renewable energies, electric vehicles and minerals required for clean energy transition.

222 Appendix:
TCFD Report
Strategy
continued
Main climate-related opportunities
Opportunity category Impact Strategy to maximize Time

& opportunity description opportunity horizon Geography
New and
Technology
An increased demand for low carbon Adopting these technologies will Medium Global
more affordable technologies is resulting in new technologies help us implement our climate term
low carbon appearing, being developed faster and being change mitigation strategy, also
made more affordable, in most cases. reducing costs associated with
technologies
energy and carbon.
Cost savings Reducing the energy that we consume in our Reducing our carbon emissions Short, Global
associated to buildings, as well as the amount of employee and energy consumption through medium,
climate strategy travel, will not only reduce our carbon emissions our climate change mitigation and long
but also the associated costs (such as the cost strategy (including amongst term
implementation
of energy, the trip and carbon offsets). others our energy efficiency
in buildings program and our
vehicle emissions policy).
Shifts in service
Market
Market changes due to climate change can have Through our sustainability Short and
demand a significant impact on client demand for SGS solutions we will be proactive medium
services, either directly or indirectly. about maximizing the term
Some of the specific potential shifts we have opportunities presented by
identified, by division, are: climate change, enhancing
existing services and creating
• Natural Resources: opportunities associated
new ones.
with energy and water efficiency, and several
opportunities associated with different types
of crops in Eastern Europe, the Mediterranean
region and North East Asia
• Connectivity & Products: several opportunities
associated with electric mobility, supply
chain certification and higher demand for
product testing
• Industries & Environment and Knowledge:
opportunities to increase our energy efficiency,
carbon pricing, green building and climate-
related reporting services clients

Quantification of financial impact Two climatic scenarios (2°C and 1.7°C) The estimated amounts presented in the
(explained in details in the following section) table below represent the total discounted
As transition risks and opportunities are as well as a 2050 time horizon were used, value of future revenues and costs driven
those expected to have the largest impact while two distinct operational scenarios have by transition risks and opportunities, for the
on the Group operations, we have quantified been assessed: period from 2023 to 2050, using a weighted
the estimated financial impact of : average discount rate of 7.4%.
• Business as usual, through which SGS
• Increasing price of carbon (risk) remains on its current level of climate The calculated financial impact on
• Cost savings associated to climate strategy (“gross financial impact”) SGS is denominated in Swiss francs.
strategy (opportunity) Where financial projections were
• Climate strategy, through which SGS
• Shifts in service demand (risk denominated in another currency,
fully reaches its climate targets (“net
and opportunity) these were converted to Swiss francs
financial impact”)
by using forward exchange rates from
Oxford Economics.
Where projections were made in real
terms, inflation expectations for
Switzerland were considered, taken
from Oxford Economics.
IEA STEPS 2050 IEA APS 2050
Risk category Gross Net Gross Net

& risk financial impact financial impact financial impact financial impact
(CHF million) (CHF million) (CHF million) (CHF million)
Regulatory
Increasing price (31) (24) (60) (25)
of carbon
Market
Shifts in service demand (6)* (6)* (140)* (140)*
IEA STEPS 2050 IEA APS 2050
Opportunity Gross Net Gross Net

category & financial impact financial impact financial impact financial impact
(CHF million) (CHF million) (CHF million) (CHF million)
opportunity
Technology
Cost savings associated 0 515 0 510
to climate strategy
implementation
Market
Shifts in service demand 419* 577* 656* 944*
* The financial impact related to shifts in service demand covers SGS’s services related to renewable energies, electric vehicles and minerals required for clean energy transition.

224 Appendix:
TCFD Report
Strategy
continued
Scenario analysis and resilience strategy

Scenario analysis In 2022, a second scenario analysis was The scenario analysis takes into
As part of our climatic risk and opportunity conducted, using 2.5ºC and 1.7ºC scenarios, consideration existing and emerging
management process, we conduct scenario that were more suitable for the purpose of regulatory requirements related to climate
analysis to improve our strategic resilience quantifying the financial impact of some of change as well as other relevant factors,
and explore climate vulnerabilities that these significant risks and opportunities. such as market trends.
might impact our business. Analyses are done following TCFD Regarding time horizons, our 2021 scenario
We conducted a first climate scenario recommendations, which indicate that analysis used 2030 since the models we
analysis in 2021, using 4ºC and 2ºC at least two scenarios should be used, used were defined for that specific year and
scenarios, which helped us identify including one scenario aligned with the Paris this horizon was aligned with the timings of
some of our most significant risks Agreement, while the other is based on our Sustainability Ambitions 2030. Our 2022
and opportunities. business as usual. scenario used 2050 as longer-term models
were available and this timing is aligned with
our Net Zero commitment.
Scenarios used during 2022 scenario analysis
IEA Announced Pledges Scenario IEA Stated Policies Scenario

(RCP 2.6/SSP 1-2.6) (RCP 4.5/SSP 1-2.6)
This scenario assumes that all climate commitments made This scenario provides a more conservative benchmark
by governments (as of September 2022) for 2030 targets for the future, because it does not take for granted that
and longer term net zero and other pledges will be met, governments will reach all announced goals, leading to
leading to a global warming of 1.7ºC. a global warming of 2.5ºC.
Carbon prices to Strong Value chain disruption on Asset impairments

significantly rise government policy an unprecedented scale increase as value of
sites decrease
Technology Increased investor Significant impacts on Insurance premiums

advancements in low and customer productivity via worker rise exponentially
carbon processes climate expectations health and safety (or coverage cannot
and behaviors be provided)
Fossil fuels become Strong buy-in for low Asset resilience Changes to
uncompetitive due to carbon products from requirements operating and/or
high price backlash customers and suppliers increase exponentially distribution seasons

Scenarios used during 2021 scenario analysis
~4°C world ~2°C world

Physical impacts Emissions continue to rise at current rates Emissions decline by 45% by 2030
of climate change Catastrophic climate-related impacts Managed climate-related impact
Based on scenario: FAO SSS (IPCC RCP8.5) Based on scenario: FAO TSS (IPCC RCP4.5)
Carbon price CO2 prices stagnate to USD 30/ton CO2 prices in OECD markets reach USD 340/ton
in 2030
Based on scenarios: IPCC SR1.5 and
RCP1.9-SSP5
Energy mix Mtoe Mtoe
20 000 20 000
15 000 15 000
10 000 10 000
5 000 5 000
0 0
2018 2030 2040 2018 2030 2040
Coal Oil Gas Nuclear Renewables Biomass Coal Oil Gas Nuclear Renewables Biomass
Regulation, Development of emissions trading systems Mandatory standards become stronger

Certifications (ETS) around the world in all sectors
More stringent standards and performance Accelerated retrofit in order to achieve
certifications are required in different sectors energy efficiency
(power, transport, industry) Strong regulatory constraints in transport sector
White certificate scheme and voluntary energy Wider hosting of international projects to offset
efficiency agreements are generalized in the EU CO2 emissions
Renewable purchase obligations are implemented
Resilience strategy In addition, our global business continuity Our resilience strategy also includes the
In order to enhance our resilience, SGS’s strategy aims to enable us to respond to any programs that we have in place to reduce
framework aims to minimize climatic risks disruption efficiently and effectively, while our CO2 emissions and our dependency
and maximize climatic opportunities. minimizing the impact on our operations in on energy. Some examples are our energy
To minimize risks, for each identified risk in terms of our sites, processes and service efficiency in buildings program and our
which the gross risk level is unacceptable delivery. See the risk intelligence section vehicle emissions policy.
(i.e. the risk can have a significant impact on page 43 of this report for more information.
business revenues, profit margin, business Finally, each division takes into consideration
continuity, reputation or operations), identified risks and the results of our scenario
mitigation programs are defined in order analysis to define our business strategies
to manage them and bring the residual and ensure that we anticipate any market or
risk level to an acceptable level. regulatory changes, and that we also exploit
any new opportunities. An example of this is
our Sustainability Solutions Framework.

226 Appendix:
TCFD Report
Risk management We manage climatic risks in our operations through

our risk management framework. The objectives
of which to ensure that risks faced by SGS are
managed properly, to reduce the impact of negative
risks while increasing the impact of opportunities,
and to provide a tool for reporting risk to key
stakeholders, senior management, the Board of
Directors and our external community.
To ensure that the system is more efficient and effective, we have improved the organizational structure and related roles and
responsibilities, and we have optimized the risk model and management process. As a result, a clear focus will be placed on key risks.
Climate change risks are included in this risk-management process.
The Company’s risk management process is conducted as follows:
1
All divisions and functions at local,
2
The risks are then evaluated
3
Additionally, we have defined
regional and global levels identify in terms of their impact and global risk category owners who
potential short-, medium- and long- likelihood, based on their financial, specialize in each type of risk and
term risks, including those related reputational and strategic impact, to review the evaluation provided
to climate change, and covering determine their gross risk levels. at local level. Each global risk
our entire value chain: supply chain, category owner is accountable for
own operations and services. the assessment, validation and
This is done via detailed workshops evaluation of the risk. The global
and our new risk intelligence tool. risk category owner must use
The assessment takes place a bottom-up approach for this
every six months. strategic risk assessment and
has the ability to override the
local assessment.
4
For each identified risk in which
5
Twice a year, the Group Risk
6
The Board of Directors and
the gross risk level is unacceptable Steering Committee and the the Audit Committee review
(i.e. the risk can have a significant Operations Council, chaired by and discuss with management
impact on the business revenues, the CEO, validates the results and the outcome of the above risk
profit margin, business continuity, shares them with the Board of assessment process. Special focus
reputation or operations), mitigation Directors and the Audit Committee is placed on ensuring that the risk
programs are defined, in order review, who review and approve profile covers all areas of concern
to manage climatic risks and the risks. identified by the Board and that
bring the residual risk level to an the Operations Council has put
acceptable level. Risk assessment in place mitigation measures to
and measurement is formally monitor the evolution of such risks
performed twice a year while the and mitigate their likely impact at
monitoring process is ongoing. an early stage. This includes those
related to climate change, which
are also reviewed and discussed in
the Sustainability Committee of the
Board of Directors.

Metrics and targets
The following information can be found In 2020, we linked the long-term incentive
in the “Non-financial statements” to ESG performance targets. These targets
section of this Integrated Annual Report: include CO2 emissions per unit of revenue.
• The key metrics used to measure While we are working to reduce CO2
and manage climate-related risks emissions from our operations as much as
and opportunities possible, we compensate for any residual
• Scope 1, Scope 2 and Scope 3 GHG emissions with our carbon off-setting
emissions and the related risks provided strategy. This enables us to bridge the gap
for historical periods to allow for between our current emissions levels and
trend analysis the more sustainable future which we are
• Key climate-related targets working hard to achieve.

228 Appendix:
Human rights report
We are
fully committed to
supporting human
rights and preventing
violations across our
global network.
At SGS, we are led by our Human rights report 228
purpose to enable a better,
Governance229
safer and more interconnected Embedding human rights in 230
our policies, principles and due
world. As a fundamental diligence processes
Delivering on our human 231
part of this, we commit to rights commitments
respecting human rights – not Fair labor practices 231
just an ethical obligation, but Supply chain
Data privacy
232
234
as an important part of our Additional progress reports 235
role in society. This report
consolidates the principles,
policies and initiatives that
demonstrate our commitment
to human rights. We aim to
improve transparency to our
stakeholders in everything
we do, and to report on our
progress around these efforts.

Governance At SGS, human rights permeate the highest levels

of management. The SGS Human Rights Executive
Committee, formed in early 2017 and chaired by
the CEO, is ultimately responsible for and oversees
the application of our human rights commitments
across the group.
The chief compliance officer is responsible Our human rights task force is in charge
for managing compliance with the SGS code of strengthening SGS’s human rights due
of integrity, while the SGS supplier code diligence program and ensuring it remains
of conduct is jointly managed by our global suitable to the company’s nature and
procurement and corporate sustainability operations. This taskforce is integrated
teams. Senior managers are expected to by high-ranking representatives and
demonstrate visible and explicit support for steered by corporate sustainability.
human rights as defined in the SGS code Lastly, a dedicated sustainability
of integrity, the SGS business principles, committee of the board has been
the SGS human rights policy and the appointed to reflect the growing importance
SGS supplier code of conduct. of sustainability, including human rights,
to all our stakeholders and build on the
substantial work already achieved.

230 Appendix:
Human rights report
Embedding human Our unwavering commitment to respecting human

rights in our policies, rights is grounded in our SGS code of integrity
principles and due and our SGS business principles, and reflected in
diligence processes our human rights policy, supplier code of conduct
and other relevant policies.
Additionally, we utilize a wide range of To further mitigate any adverse human

controls to assess, prevent and mitigate risks rights impact, SGS applies the four-
related to human rights and broader labor eyes principle in a rigorous manner to
rights violations across our operations. all employment-related decisions.
Relevant human rights risks are embedded All employment contracts and any changes
in our enterprise risk management in an employee’s general conditions require
framework, which places the responsibility at least two levels of approval and the
and accountability for managing risk close validation of a human resources professional.
to our operations. We continue our efforts to integrate
In addition, we have integrated controls, human rights into our group-wide policies
specifically targeting human rights related and control systems.
risks in our group-wide internal control
framework. These controls include, but See www.sgs.com/en/our-company/
are not limited to, compliance with minimum corporate-sustainability/our-
approach#C11 for more information
wage requirements, overtime rules, changes
to pay, collective agreements, etc.

Delivering on To bring our human rights commitment to life,

our human rights we embrace and follow the principles of the United
commitments Nations Global Compact and United Nations Guiding
Principles (UNGPs) on business and human rights.
The UNGPs incorporate by reference Furthermore, SGS designed a gender No cash policy
the rights and principles expressed in the bias toolkit to help us prevent using gender- SGS recognizes that cash-based wage
International Bill of Human Rights and in the biased wording in job adverts. Gender-biased payments are not only inefficient
International Labor Organization Declaration words can be viewed as discrimination for employers, but also risky and
on Fundamental Principles and Rights at toward male or female candidates and disempowering for workers.
Work with its eight core conventions, all could discourage people from applying We therefore follow the recommendations
of which we respect. to work for SGS. of the International Labor Organization and
As part of our continuous effort to respect the UN-based Better than Cash Alliance to
Fair and competitive remuneration shift wage payments from cash to digital, in
human rights, SGS has implemented
SGS provides fair and competitive order to promote respect of workers’ rights,
numerous policies, programs and plans
remuneration packages in all the broaden financial inclusion and to make
to prevent and mitigate the risk of causing
markets in which we operate. payments safer and more transparent.
adverse impacts to human rights.
We ensure a fair and competitive Our group policies require wages to be paid
Unless specified otherwise, all policies,
remuneration package by using a well- digitally and not through cash or cheques.
programs and plans aimed at preventing
known and broadly used global grading
and mitigating human rights risks, as
methodology throughout the SGS Group. Education and employability
described in this report, apply to all SGS
This methodology helps us evaluate SGS promotes the right to education by
employees and over 2 650 offices and
each job’s contribution to our business offering continuous learning opportunities
laboratories operated by SGS.
success and it allows us to benchmark our to all our employees. Our employee online
Fair labor practices remuneration packages against local market learning portal offers a large portfolio
As an employer, we impact the lives of practices. The benchmarking data we use is of learning opportunities, ranging from
over 97 000 employees and their families. collected through salary surveys performed technical knowledge to interpersonal and
We want our employees to be well and by reputable professional service providers. management skills. It enables our employees
thrive during their time with SGS. We embed The remuneration is defined according to fully customize their individual learning
human rights in our policies, principles to the grade of the job that employees path to their needs. We believe that helping
and due diligence processes and invest in will perform, their knowledge, qualification, our employees embrace a lifelong learning
programs and services to support human skills and experience. Salary increases are mindset, will empower them to increase
rights throughout the entire employee reflective of the employee’s contribution their employability and help them be more
life cycle. and impact on our business success, as well resilient to life challenges.
as external factors, such as local legislation
Embracing diversity in our and collective bargaining agreements. Anti-discrimination and dignity at work
recruitment process As a global company, we consider that it
SGS applies these methodologies
To ensure that we are increasing the is our responsibility to stand up for human
throughout the SGS Group to promote
diversity of our hiring, we train our rights and practice tolerance, inclusion, and
the principle of equal pay for work of
recruiters on recruitment best practices respect to enable a better, safer and more
equal value and to support diversity.
and talent acquisition, and our managers interconnected world.
in recruitment, interviewing and diversity In line with our anti-discrimination and
We achieve this goal through the promotion
best practices. We are also measuring dignity at work policy, we are committed
of greater debate and transparency, and the
the gender diversity of our applicants. to promoting a workplace that provides
exchange of different views, experiences
equal opportunity for all employees.
SGS has a standardized recruitment and perspectives.
All employment-related decisions, including
process. The process includes the use of compensation, benefits, recognition The general obligation of every employee
interview scorecards to standardize the and promotions will be made solely on to abide by the principles of anti-
evaluation of our candidates in the interview the basis of an individual’s qualification, discrimination is embedded in our SGS
process. The proper and consistent use of performance and behavior or other code of integrity and our group policy on
interview scorecards helps us to remove legitimate business considerations. anti-discrimination and dignity at work.
potential interview bias, create a quantitative
standard for candidate evaluation and to We respect minimum wages defined by
make better hiring decisions. the local regulations and comply with all the
mandatory requirements defined by local
legislation or binding collective bargaining
agreements with regards to wages and
their evolution.

232 Appendix:
Human rights report
Delivering on
our human rights
commitments
continued
The latter aims to raise awareness of our Health and safety We have taken this matter seriously and
zero tolerance of any form of discrimination At SGS, we recognize that our operations notified appropriate legal authorities in an
and provide guidance on how to deal can impact the health of our workforce. effort to stop such fraudulent schemes.
with it. It supports our commitment to Some of the harmful health risks and In addition, we have launched internal and
promoting an equal opportunity workplace agents in our workplaces include exposure external communication campaigns to
for all employees and an environment in to noise, dust, chemicals, thermal and prevent candidates from becoming victims.
which we treat everyone with dignity, musculoskeletal stressors.
We invite candidates to check the
consideration and respect. We monitor the health status of our legitimacy of a job offer or to report
We encourage our employees to act workforce through the conduct of potentially fraudulent job offers to our
immediately and speak up if they encounter preemployment and subsequent periodic corporate security department.
discrimination. At SGS, there is no place health surveillance, to ensure early detection
for any form of discrimination. of potential ill health, and assist in the Home working
management and recovery from illness To mitigate the risks related to employees
Facilitating the freedom of expression resulting from these exposures through working from home, a group policy is in
and opinion appropriate case management. place outlining applicable rules, regulations
At SGS, we value an open culture and are In line with our culture of care, we promote and norms governing home working.
committed to cultivating an environment initiatives to enhance the physical and mental The policy includes, but is not limited to,
where everyone feels comfortable about well-being of our employees to ensure their guidance on health and workspace safety
engaging in an open dialog, contributing fitness for work. This includes the provision at home, and rules to prevent potential
ideas, and expressing thoughts and opinions of preventative health measures, such as harassment or discrimination of employees
without any fear of retaliation. As expressed vaccinations, and mental and physical health working from home. It also clarifies that the
in our business principle on leadership, we programs focused on awareness, support requirements relating to absence, sickness
are committed to encouraging an honest and resilience. and recording of work time at home must be
and transparent relationship with our
SGS advocates for educating and raising observed in the same way by home workers
people to promote sharing, collaboration
awareness among its entire workforce as as by employees who work in the office.
and engagement.
a means of ensuring the health and safety To help our employees manage mental
To enable our employees to share their of all its employees and delivers around health while working from home, we offer
honest feedback anonymously and to 2.5 million training hours on health and safety employee assistance programs in different
help us understand how our employees per annum to our employees. locations. These include mindfulness
feel about working for SGS, we conduct
In addition, SGS has identified roles sessions, stress management training,
regular employee engagement surveys.
and responsibilities of the managers. virtual yoga, mental health virtual talks,
We use communication tools, such as By establishing a clear mechanism for and much more.
Yammer, as SGS’s private and social clarifying responsibilities, managers are
collaboration network to foster open dialog. encouraged to ensure the safest possible
All our employees can join the SGS private working conditions for their employees.
network on Yammer, ask questions, share
ideas, express their opinion, and create and Zero-recruitment-fee policy
join communities. Large recruitment fees can leave employees
in situations of debt bondage, a form of
Bonded labor, child labor and forced labor in which a person’s labor is
forced labor demanded as means of repaying a loan,
SGS does not engage in bonded labor, trapping the individual into working for
child labor or forced labor. little or no pay until the debt is repaid.
As an inspection, verification, testing and SGS applies a zero-recruitment-fee policy.
certification company, it is in the nature As part of this fair recruitment practice,
of our business to employ workers with a SGS never requires an administration fee
certain level of occupational qualifications for processing job applications and never
(e.g., inspectors, auditors, office workers, requests money or financial information from
laboratory personnel, etc.). In our own an applicant to secure a job as an employee,
operations, a large part of our activities is intern, or to provide services as a contractor.
therefore considered inherently low-to-
medium risk for bonded labor, child labor In recent years, it has come to our attention
or forced labor. that various individuals and organizations
have contacted people offering false
We believe the policies and procedures in employment opportunities with SGS.
place mitigate any risks related to bonded
labor, child labor or forced labor.

Supply chain
Vulnerable groups As an example of our efforts, in 2022,
With a CHF 2 billion annual supply chain
Individuals from certain groups or SGS Switzerland obtained Equal Salary
spend, we have a significant opportunity to
populations may be particularly vulnerable Certification, a symbol of excellence in
extend our sustainability principles to many
to impacts on their human rights, such as terms of equal pay for all its employees
more businesses and employees beyond our
children, women and migrant workers. in Switzerland. After successfully passing
own. As a responsible major purchaser, we
SGS takes responsibility for paying the statistical analysis of all salaries, SGS
ensure that goods and services are sourced
special attention to vulnerable groups Switzerland underwent an internal audit
sustainably and that our suppliers respect
and recognizing the specific challenges entrusted to an external audit company
human rights.
that they may face. proving equal pay for women and men.
Code of conduct for suppliers
Children Migrant workers
Our supplier code of conduct sets out the
SGS does not employ children under We realize the importance and extent of
basis of our responsible sourcing approach.
the age of completion of compulsory the migration phenomenon and recognize
It defines not only the nonnegotiable
schooling and, in any case, under 16 years. the vulnerable situation in which migrant
minimum standards that we ask our
To ensure this, we closely monitor the age workers frequently find themselves.
suppliers to respect when conducting
of our employees and confirm a potential We mitigate the risk of employing workers business with SGS, but also the values
candidate’s identity and right to work who are non-documented or in an irregular which are shared throughout SGS, its various
through our global standards on pre- situation through our global standards on businesses and affiliates. Every supplier that
employment screening. pre-employment screening. Our global wants to do business with SGS is required
standards include, but are not limited to, to sign the SGS code of conduct to ensure
Women the confirmation that the identity of our that they are aligned with our standards and
SGS strives to have proportional candidates is genuine and that they have a commitments, including those related to
representation of women in leadership valid visa and work permit for the country human rights.
positions throughout the group. of employment.
We have included Women in Leadership SGS has also conducted a global Supplier self-assessment questionnaire
(CEO-1, CEO-2 and CEO-3 management compliance review of cross-border We have started rolling out our new
positions) as a non-financial KPI into the employment relationships. Each identified Self-Assessment Questionnaire (SAQ)
long-term incentive plan of the SGS Group. cross-border case was reviewed, tailor- for strategic suppliers. This includes the
In addition, our gender-inclusive made guidance was provided, and definition of a new process that considers
recruitment process for leadership corrective actions were implemented supply chain risk management and mitigation
positions requires that there is at least where required. Following the compliance plans for high-risk vendors. The first phase,
one woman on every interview panel review and, to mitigate any risks related to in Q4 2022, covered our strategic global
and at least one female candidate on cross-border employment relationships, suppliers and strategic local suppliers from
every final shortlist for CEO-1, CEO-2 SGS set global standards. Through the four countries. By the end of 2023, we plan
and CEO-3 positions. avoidance of cross-border employment to extend the use of the SAQ to all countries
relationships, SGS ensures that employees in scope.
In 2021, SGS became signatory of the
working in the same location have access
Women Empowerment Principles – Supplier diversity program
to the same rights and working conditions.
a United Nations private sector initiative SGS knows that diverse supplier
that offers guidance to businesses on networks bring uniquely rich insights and
how to promote gender equality and experiences that are vital to our innovative
women’s empowerment in the workplace, edge. Therefore, we are working to
marketplace and community. promote diversity and inclusion across
our supply chain.
As a result of these efforts, SGS North
America is ensuring that minority-run
suppliers have fair opportunities in
procurement tenders. By doing so, SGS
is not only improving the well-being of
underrepresented groups, but also creating
a positive socioeconomic impact on society
as a whole, as it supports small firms.

234 Appendix:
Human rights report
Delivering on
our human rights
commitments
continued
Data privacy
Empowering human rights SGS ensures that nobody faces any form
SGS is committed to treating the right of
At SGS, we believe that people are of retaliation or adverse consequences
any individual to control their own personal
empowered when they understand their for having sought advice or reported
information and to decide about it. Privacy is
human rights, know how to raise concerns any violations or risks of human rights
a fundamental human right and SGS has
and are provided with remediation violations. Retaliation against a rights-
adopted an approach that protects the
consistent with local laws and the United holder who has reported a violation in
personal data of our customers, employees
Nations Guiding Principles (UNGPs) on good faith will result in disciplinary action.
and third parties from the moment we
business and human rights. More information on our grievance
collect it to the time we destroy it.
mechanism can be found in the SGS code
Data privacy is a key principle of our code Human rights related training of integrity and human rights policy as well
of integrity. SGS respects the privacy We strive to build a culture of respect for as our group policy on anti-discrimination
and confidential nature of the personal human rights at SGS. We offer training and dignity at work.
information of any individual we interact on human rights related topics, because
with to the extent required for the effective we believe that raising awareness and Remediation
operation of its business or for complying sharing values through training is crucial We recognize that even with the best
with legal requirements. to ensuring that our employees act policies and practices, SGS may cause
Our data privacy policy governs how we responsibly. Some examples of courses or contribute to an adverse human rights
collect, use, and manage the personal related to human rights, in addition to those impact that we have not foreseen or been
data of customers, employees and third described above, include: able to prevent.
parties. Moreover, we have developed a • Human rights When this occurs, SGS applies remediation
management framework to allow us to • SGS code of integrity actions to ensure that the people who
manage personal data in a manner that is • The integrity minute were negatively affected receive an
consistent with the data privacy policy across effective remedy.
• Health and safety
all affiliates.
• IT security and data privacy In line with the UNGPs, when an adverse
Aside from the policies, our data protection human rights impact is detected in our own
officers provide continuous advice, identify Grievance mechanism operations, SGS is committed to taking
privacy risks, develop policies on specific We communicate extensively throughout transparent action to remedy the situation
issues, and train employees on data privacy. the Group on the different channels in a fair and equitable manner. Should the
We also take data privacy into consideration through which employees, external adverse impact be found in the supply
from the outset when developing new rightsholders and stakeholders can bring chain, SGS will encourage its suppliers
services or processes. By following the any violations or risks of human rights to respect human rights, either through
privacy by design approach, we aim to violations to our attention. the development and implementation of
avoid a “collect first, ask questions later” Our SGS integrity helpline is available corrective action plans or governance.
approach to personal data. For those 24/7 in multiple languages online and We do not tolerate violations of the code
projects that entail data privacy concerns, by phone and is one way to report of integrity. Violations of the SGS code
our data protection officers work closely concerns confidentially and anonymously. will result in disciplinary action, including
with the relevant business and IT security The SGS integrity helpline is operated termination of employment and criminal
teams to undertake a data protection by an independent service provider prosecution for serious violations.
impact assessment, documenting both specialized in dealing with compliance and
the potential risks to individuals and the In 2022, there were no human grievances
ethics concerns. Communications made identified through the SGS integrity
measures being taken to minimize them. to this helpline are treated confidentially helpline. Four cases of discrimination
Finally, any individual who wants to exercise and are reported to the SGS compliance were identified all of which resulted in
their privacy rights can do so by simply team which protects the anonymity of the disciplinary actions and two terminations.
visiting our online privacy request form at informant, where required.
www.sgs.com. We will not discriminate
against individuals who choose to exercise
any of their rights. Specifically, SGS will not
deny goods or services, charge different
prices or rates, or provide a different level
of quality of services.

Additional progress
reports
SGS has set ambitious human rights targets as part of our Sustainability Ambitions 2030, which address our entire value chain.
These targets include 2023 targets and 2030 targets, as set out below:
2023 2030
Human rights targets Human rights targets
• Achieve 30% of women at CEO-3 • Strive towards an equitable representation
• Reduce our Total Recordable Incident Rate by 20% and of genders at CEO-3
Lost Time Incident Rate by 10% and HSE certify the • Reduce our Total Recordable Incident Rate by 30% and
main operational sites (integrated ISO 45001 and ISO Lost Time Incident Rate by 20% and HSE certify the
14001 certification) main operational sites (integrated ISO 45001 and ISO
• Continue performing annual risk assessments on human 14001 certification)
rights across the group, keep developing our human • Continue performing annual risk assessments on human
rights due diligence program to avoid violations across our rights across the Group, keep developing our human
operations and train 100% of our employees on our human rights due diligence program to avoid violations across our
rights principles annually operations and train 100% of our employees on our human
rights principles annually
Progress against these targets is available in our 2022 Integrated Report.

236 Shareholder
information
Shareholder
information
SGS SA Corporate office Annual General Meeting

1 place des Alpes Tuesday, 28 March 2023
P.O. Box 2152 Geneva, Switzerland
CH – 1211 Geneva 1
t +41 (0)22 739 91 11
2023 Half-Year results
Monday, 24 July 2023
f +41 (0)22 739 98 86
e [email protected] Dividend payment date
www.sgs.com Ex-date: Thursday, 30 March 2023
Record date: Friday, 31 March 2023
Stock Exchange listing Payment date: Monday, 3 April 2023
SIX Swiss Exchange, SGSN
Media relations
Stock Exchange trading Magali Dauwalder
SIX Swiss Exchange SGS SA
1 place des Alpes
Common stock symbols P.O. Box 2152
Bloomberg: Registered Share: SGSN.VX
Reuters: Registered Share: SGSN.VX
Telekurs: Registered Share: SGSN t +41 (0)22 739 95 51
ISIN: Registered Share: CH0002497458 m +41 (0)79 329 46 70
Swiss security number: 249745
Project management
Investor relations, corporate John Coolican
communications & sustainability Global Head of Communications
Toby Reeks Beatriz Cebrián López
SGS SA Global Sustainability Manager
1 place des Alpes
P.O. Box 2152
t +41 (0)22 739 99 87
m +44 (0)7899 800575
Investor relations manager
Livia Baratta
SGS SA
1 place des Alpes
P.O. Box 2152
t +41 (0)22 739 95 49

SGS is a registered trademark of
SGS Société Générale de Surveillance SA

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Enabling a better,

safer and more

“We are leading the teams

SGS | 2022 Integrated Report

“We support energy efficiency

SGS | 2022 Integrated Report

Supporting reductions We are shaping

SGS | 2022 Integrated Report

“We help our customers ensure

SGS | 2022 Integrated Report

Expanding our We are shaping

Central and South America

SGS | 2022 Integrated Report

“In a connected world, there

Comprehensive We are shaping

SGS | 2022 Integrated Report

safer and more

1. Source: IATA and World Bank.

SGS | 2022 Integrated Report

save energy and reduce

SGS | 2022 Integrated Report

SGS | 2022 Integrated Report

“I started this Q&A by expressing my gratitude to

SGS | 2022 Integrated Report

Our company We operate in 116 countries. This makes

Our five divisions

Adjusted operating income Adjusted operating income Adjusted operating income

CHF 313 MIO CHF 119 MIO CHF 224 MIO

23.9% 13.3% 10.4%

SGS | 2022 Integrated Report

CHF 6 642 MIO

Asia Pacific Health

of total SGS revenue

Africa & Western Europe

Eastern Europe & Middle East

Adjusted operating income Adjusted operating income

CHF 225 MIO CHF 142 MIO

14.2% 20.3% Knowledge

SGS | 2022 Integrated Report

Non-financial and We made good progress in 2022 investing

Member of DJSI World and Europe,

2021 29.0 2019 130 201

Prime distinction rating as recognition

0.19 Sustainability solutions

Support our customers on their journey

2021 0.22 SO Integrity principles

SGS | 2022 Integrated Report

20211 6.2 20211 1 022 20211 16.4

2021 655 2021 81.91 2021 80

Free cash flow* Return on invested capital* Acquisitions completed in 2022

2021 635 2021 19.6 2021 9

1. Constant currency (CCY)*.

SGS | 2022 Integrated Report

Our TIC megatrends The five interconnected megatrends are driving

The five megatrends impacting society

Connectivity Nutrition, Health Sustainability & Climate

SGS | 2022 Integrated Report

Construction Industrial Transportation Public sector Consumer

SGS | 2022 Integrated Report

“We are leading the teams

“We support energy efficiency

“We help our customers ensure

“In a connected world, there

“I started this Q&A by expressing my gratitude to

7 Data generation 8 Customer outcome

1 Customer need 2 Process planning 3 Stage 1: