Sustainability­Report 2022

Delivering Growth – in Asia and Beyond.

2

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Welcome from the CEO“Our newly developed­Sustainability Strategy helps
us to create value by embedding­sustainability even further
into our organization.”

How can we build an even more sustainable business andfulfill our purpose of enriching people’s lives? These questions guided us in 2022 as we developed our new Sustainability Strategy and revised our Sustainability Framework.
Our Sustainability Strategy is rooted in the ambition thateach Business Unit takes a proactive and competitive approach to sustainability. It focuses on four key objectives: toenable our people to flourish, to make our value chains
more sustainable, to become climate-neutral by 2030,
and to create a positive impact for our local communities. The revised Sustainability Framework now reflects
these objectives and facilitates the implementation of ourstrategy.
In 2022, we already made good progress on all of these four
objectives:‣ We increased the percentage of employees receiving
training from 78 % in 2021 to 97 % in 2022 and our mostrecent employee engagement survey benchmarks
well against leading global multinationalsW‣ e progressed in setting up a responsible procurement program as well as in increasing transparency
on wasteW‣ e reduced our Scope 1 and 2 emissions by 42.0 %compared with our base year 2020 and by 3.5 % compared with 2021
‣ We initiated 76 local community projects

Our four sustainability objectives are designed to positively
contribute to sustainable development in the markets andcommunities where we operate. We are therefore proudthat our efforts are increasingly recognized externally, forexample, by being awarded the internationally renowned
EcoVadis Gold Rating. Furthermore, participating in the UN
Global Compact underlines our ongoing commitment to respecting human rights in all our activities, fostering sustainable development, and promoting the Ten Principles of the
UN Global Compact.
As we look to 2023 and beyond, we will continue to diligently
implement our Sustainability Strategy. And we will do so bycontinuously strengthening our sustainability organization,
creating more awareness among our people, and working
with our business partners to achieve our purpose of enriching people’s lives.

Stefan P. Butz
CEO‣ GRI 2-22

3

About

Strategy and Governance

Our People

Contents
2

About

2
4
5
6
7
9
10

Welcome from the CEO
About UsDKSH Identity
Our Purpose and Business Model
Sustainability Highlights 2022
Progress Highlight – Harnessing Renewable Energy
Progress Highlight – Reducing Water Consumption

11

Strategy and Governance

12
14
16
20

Stakeholder Engagement and Materiality Assessment
Sustainability Strategy
Advancing Our Sustainability Agenda
Sustainability Governance and Risk Management

23

Our People

24
27
31

Health, Safety, and Well-being
Employee Attraction, Satisfaction, and Retention
Labor Practices and Human Rights

33

Our Business

34
40
45
47

Environmental Responsibility
TCFD Report
Responsible Supply Chain
Ethics and Integrity

54

Our Outcome

55
57

Local Community Development
Product Quality and Safety

59

Appendix

60
68

GRI Content Index
Verification Statement

Our Business

Our Outcome

Appendix

4

About

Strategy and Governance

Our People

Our Business

Our Outcome

About UsCHF 11.3 billion

53

net sales (2022)

innovation centers200
distribution centers

Operations in37markets

2,200
clients

2,100
suppliers

32,600employees

Appendix

5

About

Strategy and Governance

Our People

Our Business

Our Outcome

DKSH Identity
As an international company with over 32,600 employees, our Identity brings us together
as one strong DKSH team working towards a shared goal.

Our Purpose

Our Values

Enriching people’s lives.

Integrity
Empowerment
Collaboration
Entrepreneurship
Sustainability

Our Vision

Being the trusted partner.
Our Strategy

Growing our four Business
Units, strengthening
our ­service ­offering, and­increasing ­operational­efficiency.

Our Promise

Delivering Growth –in Asia and Beyond.

Appendix

6

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Our Purpose and Business Model
Our Purpose

Business Model

DKSH Holding Ltd. (“DKSH”/”the Group”) provides reliable
access to high-quality and responsible products and services, creating sustainable value for our partners and contributing to raising the quality of life in the communities we
operate in by generating jobs, perspectives, and opportunities for people’s development and growth.
Delivering life-saving drugs to hospitals, bringing high-quality products to remote villages, installing technology thatraises living standards, and providing new formulations forpharma or food products that make life easier. These arejust a few examples of how DKSH touches and enriches people’s lives around the clock.
We do so by providing companies with access and expertiseto grow in Asia Pacific, Europe, and North America. We callthis Market Expansion Services.

We offer a complete range of specialized services along thevalue chain – from sourcing, market insights, sales and marketing, to distribution and logistics, as well as after-sales
services across four Business Units: Healthcare, Consumer
Goods, Performance Materials, and Technology. Learn more
about our Business Units in the DKSH at a Glance chapter inthe Annual Report 2022.
Learn more about the services we offer on our website.

 See more:
Learn more about our purpose in this video:

Sourcing

Clients

Marketinsights

At DKSH, our business partners are clients or customers depending on their position in the value chain and the services we provide. Our business model is centered on DKSH’s
role as the key link between clients and customers. We help
our clients grow by distributing, promoting, and servicing
their products and our customers by providing access tohigh-quality products, services, and insights.
‣ GRI 2-6

Marketing
and
sales

Distribution
andlogistics

Omni-channel service portfolio
Backflow of information from customers to clients

After-sales
services

Customers

7

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Sustainability Highlights 2022
DKSH Discover – an awardwinning eCommerce portal
Our Business Unit Performance Materials received
six industry awards for accelerating digital transformation
through our customer-facing portal, DKSH Discover.
DKSH Discover allows us to efficiently promote ­sustainable­specialty chemicals and food ingredients.

Joined the
UN Global Compact
In 2022, we became a participant of theUnited Nations Global Compact,
further strengthening our commitment to sustainability.

2022

Our rating: EcoVadis Gold
DKSH won the EcoVadis Gold rating for sustainable­business practices, ranking us among the
top 5 % of companies in our industry rated by EcoVadis.

Driving innovationin sustainability
DKSH’s Corporate Shared Services Centerwon the SAP Sustainability Award, a new prize highlighting
innovative ways to achieve sustainability targets.

Building strong communities
DKSH Thailand won the
Asia Corporate Excellence & Sustainability (ACES) Award
for Community Collaboration, recognizing
our commitment to making a positive local impact.

8

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Going green
in the APAC region
DKSH’s Business Unit Technology partnered with FlowGen,a leading provider of turnkey renewableenergy solutions, to market clean energy ­solutionsin the Asia Pacific (APAC) region.

A new distribution centerin Thailand
DKSH’s Business Unit Performance Materials openeda new distribution center in Thailand that is
expected to reduce CO2 emissions by 87.6 tons annually.

132 metric tons donated
DKSH partnered with the Global FoodBanking Networkand other similar organizations
to reduce product waste across the APAC region.

Certified in accordancewith ISO 9001 and 14001
DKSH’s Business Unit Performance Materials
received two major ­certifications
for its distribution center in Indonesia.

Lending a helping hand
DKSH organized 76 local­community projects;
all our s­ ignificant markets e­ ngaged in charitable a­ ctivities, suchas a ­nationwide beachclean-up activityin M­ alaysia in­conjunction with
­International
Coastal Clean-up Day.

Going digital with mPay
As its first market, in V
­ ietnam,
DKSH ­digitized its p­ ayment­options with mPay,a ­dedicated digital ­customer
payment s­ olution that ­replaces­conventional ­payment­processes. With mPay,
DKSH Vietnam s­ uccessfully­increased safety
as well a­ s ­efficiency ofits ­payment ­processes.

9

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Progress Highlight

Harnessing Renewable Energy
at Our Distribution Centers

DKSH Performance Materials’ new distribution center in Bang Plee, Thailand

In a Nutshell‣ Our two brand-new distribution‣ This project will help us reduce

In 2022, our Business Units Performance Materials andTechnology started operating two new distribution ­centers
in Bang Plee, Thailand, providing support with ­national­distribution in Thailand. It will take about six months fromthe ­project’s launch in late 2022 until the solar panels become fully operational in June 2023. These grid-connectedsolar s­ ystems will have a respective capacity of 110 kWh and77.5 kWh, together reducing our CO2 footprint by 120 tons
each year.

Reducing CO2
emissions by“Achieving our objective of ­becoming
climate-neutral by 2030 will require­action, from tapping green power sources
to opting for ­efficient lighting.”
Ian Bennett,
Director of Development and Sustainability, Thailand

centers in Thailand havebeen equipped with solar panels.

our impact on the climate
and meet our goal of becoming
climate-neutral by 2030.

120
each year

tons

Solar roofs are just one way that we are minimizing our impact. Both new distribution centers also feature LED lights
and wastewater treatment systems. All of these measures
serve as essential building blocks to achieving our Sustainability Strategy’s objectives of becoming climate-neutral by2030 and making our value chains more sustainable.
 See more:
Please refer to the Climate Change Mitigation chapter
and the ­Sustainability Strategy chapter to learn more about
our group-wide approach to mitigating climate change.

10

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Progress Highlight

Reducing Water Consumption
at Our Production Facilities

The water treatment system helps to recycle and reuse water (left). Ozone washing saves water in the finishing process.

In a Nutshell‣ Our denim finishing facility

in Ayutthaya, Thailand,
uses w­ ater-intensive processes
to ­produce textiles such as
jeans, T-shirts, and accessories.

‣ We strive to make our processes
as environmentally friendly as
possible to minimize negative­environmental impacts.

About

80 %

reduction in tap
water usage
from 2005 to 2022

We have taken special measures to save water at our denim
finishing facility in Ayutthaya, Thailand. This facility uses
recycled water rather than tap water and has introducedozone washing machines to fade jeans. Unlike conventional
methods, which dilute chemicals in water, ozone can beused on damp fabric – significantly lowering the amount ofwater needed for finishing.
“Water is an increasingly scarce resource,
so we need to do all we can toconserve every drop at our facilities.”
Peter Hornby,
Vice President, Retail
Once water has been used, it enters our treatment system,
where we filter out biosolids. Water is recycled and reused
before ultimately being returned to the water authority forfurther treatment.
These steps helped us reduce tap water usage from about
95,000 m3 in 2005 to an average of about 12,000 m3 per year
over the period from 2015 to 20221.
 See more:
To learn about our group-wide approach to protecting
the environment, please refer to the Environmental Responsibility
chapter and the Sustainability Strategy chapter.
1 Water consumption was lower than usual in 2020-2022 due to the COVID-19­p andemic and the related lower production capacity. To ensure comparability
with 2005 as far as possible, we refer to average water consumption here.

11

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Strategy and Governance

We want to continously increase the sustainability of our­business to help c­ onnect companies and communities and­enrich p­ eople’s lives for years to come. In addition to e
­ ngagingwith s­ takeholders and conducting a materiality a­ ssessment,
we have also developed a Sustainability ­Strategy and createdrobust g­ overnance and risk management ­processes.

12

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Stakeholder Engagement
and Materiality Assessment
We engage in constant dialogue with our stakeholders tostay abreast of material developments and impacts and tochart a strategic course in the right direction.
DKSH’s senior management team has identified the stakeholder groups we regularly engage with:‣ Clients‣ Suppliers/vendors‣ Employees‣ Customers‣ Shareholders/investors‣ Local communities‣ Authorities‣ Consumers
We take a variety of approaches to engaging in meaningful
dialogue with our stakeholders. Our most intense d­ ialogue ismaintained with our clients, including but not limited to due
diligence processes, business negotiations, and a­ udits. We
also regularly conduct client satisfaction surveys. ­Businessnegotiations with suppliers are another source of valuable
regular feedback on important issues and concerns.
As a reputable world-class service provider, our employees
are our most important asset. Structured periodic ­employee
engagement surveys and an open feedback culture allow
for insights into employee concerns, which in turn help us
improve our employment proposition.
‣ GRI 2-29
A materiality analysis helps us regularly check which topics are particularly important to our internal and external
stakeholders by considering both the impacts that DKSH
has on the world around us and the impacts that our surroundings have on our operations. The outcome of this assessment process informs our Sustainability Strategy, anddrives our reporting practices in line with evolving stakeholder expectations, disclosure frameworks, and regulatory
requirements.

Our process to determine impacts and identify material­topics included:‣ Step 1: Analysis of megatrends and sector-specific topics
relevant to DKSH‣ Step 2: Performing desk research to determine which topics have a substantial impact on key stakeholders and inwhich areas we are impacted by our stakeholders and theenvironment. Drawing on publicly available sources, thisanalysis has a global scope but a specific focus on markets in Southeast Asia, as most of DKSH’s business activities are conducted in this region.
‣ Step 3: Validation of the findings in interviews with senior
DKSH managers representing a cross-section of key DKSH
Business Units, Functions, and regions, and who are regularly interacting with stakeholders. These interviews provided additional insights into different stakeholder expectations.
‣ Step 4: Review and endorsement of the result of the assessment process by the Executive Committee and the
DKSH Board of Directors.
Going forward, we plan to enhance this process by conducting additional online surveys and interviews with across-section of stakeholders across multiple regions.
‣ GRI 3-1
This materiality assessment process resulted in the identification of 47 impacts which we regrouped into the following material topics:‣ Health, Safety, and Well-being‣ Employee Attraction, Satisfaction, and Retention‣ Labor Practices and Human Rights‣ Climate Change Mitigation‣ Pollution Prevention‣ Resource Efficiency‣ Climate Change Adaption (chapter TCFD Report)‣ Responsible Supply Chain‣ Ethical Business‣ Local Community Development‣ Access to Food, Medicines, and Healthcare‣ Product Quality and Safety

13

About

Strategy and Governance

Our People

Accountability to our stakeholders is important to us, hence
for each of the above topics we have dedicated a separate
chapter in this report, organized into three main chapters.
The Our People chapter features topics relating to our greatest asset forming the foundation of our value creation: ouremployees. The Our Business chapter sets out how we create value through our business model in the context of making our supply chain more sustainable. The Our Outcome
chapter focuses on accountability towards fulfilling ourcompany’s purpose of enriching people’s lives.
Please follow the above links to get to the corresponding
chapters.
In 2022, our materiality analysis process yielded fresh insights into the most important topics for DKSH while taking
account of changing stakeholder interests and the regulatory and political framework. While the analysis has shown
slight changes in some regards, the general picture of material topics for DKSH remains stable. For instance, to reflect
the growing importance of climate change, two new material topics on climate change adaption and climate change
mitigation were added. The fair labor practices and humanrights and responsible supply chain topics underscore theincreasing importance of human rights in our business andsupply chain. The updated material topics also highlightthe positive impact that we have on local communities byreflecting how we improve access to food, medicines, andhealthcare.
‣ GRI 3-2
We took due care when preparing this report by applying
the Global Reporting Initiative’s sustainability reporting
standards (GRI Standards). To ensure that we provide our
stakeholders with the most valuable information possible,
this report is based on GRI’s reporting principles of accuracy, balance, clarity, comparability, completeness, sustainability context, timeliness, and verifiability.

Our Business

Our Outcome

Appendix

14

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Sustainability Strategy
Sustainability is an Integral Part of Our Business
Sustainability is one of DKSH’s five values. We take responsibility for the environmental, social, and economic impactsof our business activities determined through our materiality assessment. Our commitment to creating a sustainable
future means that we want to achieve long-term, profitable
growth in a responsible manner.
We believe that sustainable value creation goes hand-inhand with responsible governance and managing the impacts that our activities have on society and the environment. Providing access to markets and products is at theheart of what we do. Creating employment opportunities isalso vital. After all, our activities are guided by our purpose
to enrich people’s lives through our contribution to sustainable development in the markets and communities in which
we operate.
Revised DKSH Sustainability Framework and
New Sustainability Strategy
During 2022, we revised our former Sustainability Framework “Our People – Our Partners – Our Planet” and developed a new Sustainability Strategy. As part of this process,we also made sustainability a focus area in our corporate
strategy, which is confirmed by our highest governancebody, the Board of Directors.

The revised Sustainability Framework now reflects the four
objectives of our Sustainability Strategy. It continues to give
guidance and helps us translate our strategic objectives into
concrete action and tangible results – across all Business
Units and Functions.
Our ambition is for each Business Unit to take a proactive
and competitive approach to sustainability. We want to become a more sustainable company by emphasizing a decentralized approach at the level of the Business Units andFunctions. By doing so, we can increase accountability, makestrategy execution more effective, and make communication more efficient. This approach is especially beneficial because it allows us to take local needs into account and pinpoint the best solutions for Business Units and Functions,which in turn enables us to deploy tailor-made solutions for
the Business Units’ specific products and business models.
The Revised DKSH Sustainability Framework
The former “Our Partners” pillar has become “Make Our
Value Chains More Sustainable”. We fleshed out the “Our
People” pillar to become “Enable Our People to F
­ lourish”.
From “Our Planet” we derived two objectives: to “Become Climate-neutral by 2030” and to “Make a Positive Local I­ mpact”.

Revision of the DKSH Sustainability Framework

En

Our
PeopleOur
Partnersrich

in g p e o p l e ’ s li v

esFlourishing
PeopleSustainable
Value Chains

ClimateNeutrality

Positive
Local Impact

Enrichingpeople’s lives

Our Planet

15

Strategy and Governance

About

Our People

Our Business

Our Outcome

Appendix

Make a Positive Local Impact
The DKSH Sustainability Framework now reflects the following four objectives of our Sustainability Strategy:
Enable Our People to Flourish
We aim to support our employees so that they can fully develop their talents and engagement. To this end, we create
various opportunities for our employees’ personal and professional advancement, such as training and an open feedback culture. We also respect human rights and promote
diversity and inclusion to create an enabling working environment for all our employees.
For more information on our activities, please refer to thechapters: Labor Practices and Human Rights and Employee
Attraction, Satisfaction, and Retention
Make Our Value Chains More Sustainable
We cooperate with our partners in the value chain to drive
sustainability. It means procuring products and services­responsibly, i.e. by respecting human rights and minimizing the impact on the environment. We are committed to­reducing waste.
For more information on our activities, please refer tothe chapters: Responsible Supply Chain and Pollution­Prevention
Becoming Climate-neutral by 2030
Our focus is on making our own operations (Scope 1+2) climate-neutral by 2030, creating transparency regarding
emissions and investing in solar panels. We continue to improve the efficiency of our operations – thereby decreasing
the energy and CO2 intensity of our business. This happens,for example, through optimizing transport routes and truck
loads. In addition, we focus on energy-saving equipment,
like LED lighting in our distribution centers.
For more information: Climate Change Mitigation

We aim to further promote our projects benefitting local
communities. At the heart of what we do – providing accessto markets, people, and products – we are guided by ourcommon purpose of enriching people’s lives. Our local community projects are focused on bringing positive impact tothe communities where we operate, from alleviating hunger
to improving life skills. Our local community projects are actively driven by our colleagues in the respective markets.
For more information on our activities, please refer to thechapter: Local Community Development
Process of Revising the DKSH Sustainability Frameworkand Developing the Sustainability Strategy
We revised our Sustainability Framework and developed our
Sustainability Strategy in four phases. Based on the ambition level confirmed in our corporate strategy, we started bydeveloping four high-level objectives. We broke down theseobjectives into more specific goals at a Business Unit andFunction level. These goals were then translated into a roadmap of specific targets and measures. From 2023 onwards,
we continue to implement these specific targets and review
our Sustainability Strategy annually.
We have identified three enabling factors that go handin-hand with successfully implementing our Sustainability
Strategy:‣ Governance and Organization: We will continue to buildand optimize governance structures for sustainability‣ Monitoring and Reporting: We will continue to improve
our monitoring and reporting system as the basis for reporting, decision-making, and actions‣ Culture: We will promote taking a proactive approach;
we will “walk the talk” to roll out sustainability initiatives
throughout our organization‣ GRI 2-24

Our ambition is for each Business Unit to take a proactive and competitive approach to sustainability.

Enable Our People to Flourish
HumanrightsDeveloping
our talent

Embracingdiversity

Employeeengagement

Become Climate-neutral by 2030
(Scope 1+2)

Climate-­neutraloperations

SolarpanelsEmissiontransparency

Make Our Value Chains More Sustainable
HumanrightsResponsible
Waste
procurement management

Make a Positive Local Impact
Local community andCSR strategy

16

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Advancing Our Sustainability Agenda
Alongside the revision of our Sustainability Framework, we also adapted our sustainability targets in
2022. We shall continuously report on our progress towards achieving these targets.
Enable Our People to Flourish
Human Rights

Expand human rights guidelines
and frameworks

Strengthen health and safety­approach to achieve zero high-­
consequence injuries (HCI)2

On track
In 2022, we completed the human rights risk assessmentin Malaysia, including a definition of action items which will
be implemented in 2023.
Target achieved
Number of high-consequence injuries (HCI)
1

0

0

2020

2021

2022

Developing Our Talent

Expand training reach and eventswith a focus on blended learning

On track
Number of online learning and training sessions completed
387,638

127,974
82,8282020

Increase managerial bench strength

2021

2022

On track
Percentage of employees in the category “Jump” 3

18 %

18 %

35 %

2020

2021

2022

2 Injury that results in a fatality or an injury from which the worker cannot, does not,or is not expected to recover fully to pre-injury health status within 6 months.
3 The category “Jump” includes employees identified in the readiness evaluation tomeet all requirements to advance to the next career level involving a critical rolewith significant complexity.

17

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Embracing Diversity

Increase the representation of­females in senior leadership

Train at least 90 % of managers on­diversity awarenessOn track
Percentage of females in senior leadership

27 %

29 %

31%

2020

2021

2022

On track
In 2022, we implemented a group-wide Belonging Policy,
covering diversity, equity, and inclusion. In the first yearof implementation, 74 % of our managers completed thecomprehensive Belonging e-learning program.

Employee Engagement

Reduce voluntary attrition rate
For further context and details pleaserefer to the chapter Employee ­Attraction,
Satisfaction, and Retention.

Continually improve employee­engagement

Setback recorded
Voluntary attrition rate

15 %

17 %

22 %

2020

2021

2022

74/
100

75/
100

2021

2022

On track
Engagement score4

4 The engagement score is calculated by aggregating the average score of the twoquestions “How happy are you working for DKSH” and “I would recommend DKSH asa great place to work” from the YourVoice@DKSH engagement survey.

18

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Make Our Value Chains More Sustainable
Responsible Procurement
On track
The Responsible Procurement Policy was adopted in 2022,with the implementation of the policy to be continued in2023.

Launch a responsible
procurement policy

Human Rights
Target achieved
The roadmap to assess suppliers has been
established under the framework of the Responsible­Procurement Policy.

Establish a roadmap toassess suppliers

Waste Management

Create transparency on waste

On track
In 2022, waste data was for the first time reportedby all distribution centers in relevant facilities.

Expand eco-friendly packaging

On track
We are continually exploring the potentialof eco-friendly packaging materials.

Become Climate-neutral by 2030 (Scope 1+2)
Climate-neutral Operations

Achieve a 65 % reduction of Scope 1
and Scope 2 emissions5 from 2020 ­levels by 2025

On track
Greenhouse gas emissions, split according to scope (­market-based accounting),
in metric tons CO2 equivalent
4,015

79,899Air travel(Scope 3)

3,119

12,35164,18064,262

29,792

27,877

Outsourced transport(Scope 3)52,906

Electricity(Scope 2)
Fuel and refrigerants(Scope 1)

4,970

5,742

5,046
2020

2022

2021

Greenhouse gas emissions Scope 1+2 (market-based accounting),
in metric tons CO2 equivalent
57,8765 Before 2021, market-based = location-based. With thepurchasing of Renewable Energy Certificates (I-RECs)
starting in 2021, we began to apply market-based
methodology to Scope 2.

Reductionof Scope 1 and 2­emissions
by 39.9 % against2020 base year.

2020

34,8382021

33,619Reductionof Scope 1 and 2­emissions
by 42.0 % against2020 base year.

2022

Target: Reductionof Scope 1 and 2­emissions
by 65.0 % against2020 base year.

2025

19

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Make a Positive Local Impact
Local Community and Corporate Social Responsibility (CSR) Strategy

Increase representation of locals6 inmarket leadership teams7

Increase percentage of s­ ignificant­operations8 engaging in local­community activities to morethan 90 %On track
Percentage of locals in market leadership teams

73 %

79 %

78%

2020

2021

2022

Target achieved
Percentage of significant operations engaged in local­community activities

80 %

90 %

100 %

2020

2021

2022

6 Local refers to employees either born or who have the legal right to reside­indefinitely (such as naturalized citizens or permanent visa holders) in the same­geographical market as the operation.
7 Market leadership teams refers to heads of each Business Unit and Function withina market.
8 DKSH defines significant operations as all markets with more than 500 e­ mployees.
This includes the 11 markets of Australia, Cambodia, Hong Kong, Indonesia,­Malaysia, Myanmar, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.

20

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Sustainability Governanceand Risk Management
At our company, the Board of Directors of DKSH governs
sustainability by charting the strategic direction for theGroup and overseeing strategy execution. In doing so, it
is guided by the Group’s values, as well as by our Sustainability Strategy including the Sustainability Framework. In
2021, the Chairman of the Board appointed a Member of theBoard to have the oversight role for sustainability matters.
This role includes overseeing DKSH’s processes to manage
risks and our impacts on the economy, environment, andpeople by reviewing plans, including climate change action.
The appointed Board Member also keeps the entire Board
appraised of sustainability and climate-related issues.
The Executive Committee is tasked with implementing the
Sustainability Strategy together with the Sustainability
Committee, chaired by Group Sustainability and made up
of representatives from the Business Units and Functions.
The Sustainability Committee plans, coordinates, monitors,
and reports on sustainability initiatives and actions. To create an incentive for members of the Executive Committee toachieve our sustainability targets, DKSH’s climate, environmental, social, and governance performance is one component of their annual variable pay.
The Group Sustainability team facilitates, coordinates, anddrives sustainability-related planning, actions, and initiatives. It is the nucleus of the Group’s sustainability reporting
activities. The team prepares for and conducts the annual
schedule of quarterly dedicated meetings with Executive
Committee members and the Sustainability Committee andtwo meetings with the aforementioned Board Member, with
the Chief Executive Officer (CEO) in attendance.
These scheduled meetings ensure that the Board is always
up to date on sustainability-related matters and, in turn, canprovide guidance. Key highlights in 2022 were the Board‘s
endorsement of the results of the refreshed materiality assessment and the corresponding impacts on the economy,
environment, and people. The Board further approved therevision of our Sustainability Framework as well as our new
Sustainability Strategy.
‣ GRI 2-14

To further enshrine sustainability at the highest level of ourcompany, we engage in regular communication with stakeholders such as analysts and investors and consider the recommendations of proxy advisors as well as external sustainability ratings when it comes to Board remuneration.
In addition, we use external benchmarking services to determine the remuneration of the Executive Committee andmanagement. The results of votes by shareholders on remuneration policies and proposals can be found in the minutes of the Annual General Meeting on the DKSH website.
‣ GRI 2-19, GRI 2-20
As in previous years, in 2022 the quarterly Sustainability Committee meetings provided an opportunity for updates and discussions and for reaching alignment on regulatory developments, objectives, key initiatives, projects,
and actions. We monitor progress and share knowledge
and success stories at these meetings. After each Committee meeting, the Committee Chair and Group Sustainability
team meet with the CEO and other members of the Executive Committee to report on the Committee’s work and obtain guidance.
Sustainability Committee members, working on behalf of
their organizational unit, take responsibility for achieving
their sustainability-related targets and managing their impacts on the economy, environment, and people. For example, the Chief Human Resources Officer oversees meetingsustainability targets related to our employees.
Several Business Units and Functions have also begun toformalize sustainability management at their respective
levels, including the appointment of dedicated resources
to create transparency, drive actions and initiatives, and facilitate reporting. Sustainability managers and Sustainability Champions support the implementation of sustainability
measures at the local level and provide meaningful feedback to the Sustainability Committee via their Business Unit
or Function representative.

Strategy and Governance

About

Our People

Our Business

Our Outcome

Appendix

Board of Directors
Oversight role for sustainability matters

Executive Committee

Reporting

Implementation

21

Sustainability Committee
Chair: Group Sustainability
Human
Resources

Supply Chain
Management

Governance, Risk
and Compliance

Investor &Media Relations

Business Unit
Healthcare

Business Unit
Consumer Goods

Business Unit
Performance Materials

Business Unit
Technology

Sustainability organization of Business Units and Functions

For more information on DKSH’s governance structures,
please see the Corporate Governance chapter in the Annual
Report 2022 (p. 10ff.).
‣ GRI 2-9, GRI 2-12, GRI 2-13, GRI 2-16
Risk Management
Risk management is an integral part of our management
process. Risks are identified, assessed, and mitigated at various levels in the organization by the respective risk owners, in alignment with the Group’s policy on Risk Management. Sustainability-related risks and impacts are identified
through a materiality assessment process and by prioritizing relevant topics for management and reporting, pursuant to the Global Reporting Initiative (GRI) Standards 2021.
This Sustainability Report sets out the results of the materiality assessment and provides transparency on the way wemanage the related risks. The three different sections – Our
People, Our Business, and Our Outcome – provide more details about our approach. Our reporting also includes disclosures on climate change-related risks in compliance withrecommendations by the Task Force on Climate-Related­Financial Disclosures (TCFD), meeting requirements even
before new Swiss legislation takes effect.
Championing Sustainability in Business Unit
­Performance Materials
In 2022, Business Unit Performance Materials started to design its own sustainability organization. The Business Unit
nominated Sustainability Champions and agreed on a sustainability roadmap including local initiatives driven by the
Sustainability Champions and in line with DKSH’s groupwide sustainability objectives. The initiatives span areas

such as sustainable portfolio, digitalization, and responsible suppliers. In addition, the Business Unit held two management workshops, including discussions on environmental sustainability and issues touching on diversity, equity,and inclusion. In October 2022, Business Unit Performance
Materials signed an agreement for EcoVadis to assess suppliers in terms of their sustainable procurement practices.
“At Performance Materials, we have establisheda collaborative network of 25 local ­Sustainability­Champions. I was amazed by the speed withwhich we were able to set up this i­ nitiative
and the p­ assion demonstrated by all of those­involved. While they are all ­implementing­significant measures to ­reduce e­ nergy­consumption and contribute to DKSH’s groupwide goals, many are also driving additional­inspiring practices. For example, DKSH Italy
has also ­created a group called Next Generation,­giving a voice to younger team members inlocal management d­ ecisions. I’m so proud of
our team and the progress we’ve made in sucha short time.”
Irene Dávalos,
Director, Digital & Sustainability,
Business Unit Performance Materials

22

About

Strategy and Governance

Our People

Membership of Associations
DKSH companies are members of several associations in
the markets in which we operate. Some examples include
the Pharmaceutical Association of Malaysia and the Malaysian Animal Health and Nutrition Industries in Malaysia; theFederation of the Swiss Watch Industry FH, the Association
Patronale de l’Horlogerie et de Microtechnique and the Association of Pharmaceutical Companies in Switzerland; theTaipei Machinery Traders’ Association in Taiwan; the Australian Food & Grocery Council in Australia; the French Cosmetics Association for SMEs in France; the Chemical Business
Association in the UK; and the Food and Grocery Council in
New Zealand.
Membership is generally considered from a strategic perspective, and in some instances, DKSH managers hold positions in governance bodies, participating in projects or committees. In Australia, DKSH is a member of the Australian
Sales & Marketing Companies Association, of which a member of our senior management is a Board member. In Singapore, DKSH has Board representation in the Singapore
Association of Pharmaceutical Industries and the Machine
Tool Club. In Thailand, DKSH has committee representationin the Pharmaceutical Research & Manufacturers Association as well as the Thai Medical Device Technology Industry Association.
DKSH companies also hold memberships in chambers ofcommerce in many markets, which include Cambodia, Hong
Kong, Indonesia, Japan, Korea, Laos, Malaysia, Singapore,
Taiwan, and Vietnam.
As guided by our Code of Conduct, DKSH does not engage
in political processes and does not provide funding to associations beyond routine membership dues, apart fromour membership of the Swiss Chamber of Commerce andIndustry in Japan, for historic reasons (this is where DKSH
was originally founded in the 19th century; we are the Swisscompany with the longest uninterrupted presence in Japan).
‣ GRI 2-28

Our Business

Our Outcome

Appendix

23

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Our People

At DKSH, our employees are the heart of our business. Their
health, safety, and well-being are essential to our s­ uccess.
Along with offering our people a safe, fair, and i­nclusive place
to work, we want to help them reach their full potential byproviding training and growth opportunities.

24

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Health, Safety, and Well-being
Our Impacts

As a company whose operations
have impacts on employees and­workers throughout the value chain,occupational health, safety, andwell-being are top priorities for DKSH.
Our positive impacts include the­provision of healthcare services andregular training for all employees.
However, our business also has
potential negative impacts and risks,because working at DKSH sometimes
requires staff to store and ­handle
dangerous goods and hazardous
chemicals and ­operate machinery.
We take these ­potential negative­impacts ­seriously. To ­minimize
related risks wherever p­ ossible,
DKSH has put in place the management systems d­ escribed below.

Managing and Monitoring Health and Safety
Our corporate Health, Safety & Environment (HSE) policy
sets out how we manage health and safety risks. Its scopeincludes all DKSH operations worldwide and all activities
and facilities. Local market management is responsible for
operating an HSE management system (HSE-MS) that ensures compliance with applicable regulations and gives due
consideration to the nature and risk profile of local operations. Qualified local HSE Managers support managers
tasked with implementing and monitoring the HSE-MS.
In 2021, we launched an enhanced corporate HSE-MS, whichreferences the current leading standards ISO 45001, OHSAS
18001, and ISO 14001. Local HSE Managers are tasked withensuring that local HSE-MS are aligned with the corporate
HSE-MS.
Most distribution centers now have HSE committees withrepresentatives from various Functions and work areas.
These committees convene on a quarterly to monthly basis
in our mature markets and at least annually in most othermarkets. HSE committees are responsible for reviewing
health and safety procedures, investigating incidents, andexamining new technologies and changes in personal protective equipment.
The HSE committees also perform regular safety walks to inspect the premises and spot any hygiene and safety issues.
On these and other occasions, we encourage our employees to take part and speak up if they notice unsafe conduct
or conditions. Involving non-management in this process
helps us reduce managerial hierarchies.
Our HSE-MS also encompasses the health and safety of contractors we appoint to support our service delivery. To reinforce our commitment to safe practices for contractors,
we released a Contractor Safety Management guideline
in 2021. Contractors involved in higher-risk activities, suchas operating forklifts, are evaluated based on their healthand safety performance and processes, including injury/
illness performance, special skills and training, effective
work procedures, instructions, or equivalent HSE-MS, andcompliance to applicable licensing, rules, and regulations.
Safeguards for contractors operating at our sites include
Working Instructions on Visitor Safety, Contractor Safety
and Permit to Work (which also covers safe driving), andContractor Guidelines.
Internal and external parties, including our key clients, regularly audit our HSE-MS’ performance. Market-level internal
self-assessments, audits and reviews are also conducted by
the local HSE Manager to support continuous improvement.
Our Business Unit Technology joined the Highwire platform
in 2022. This platform allows us to flag the most critical andrelevant risks to occupational health and safety at our contractors early on. We can help them develop and implement
risk mitigation plans by taking prompt action.
‣ GRI 403-1, GRI 403-7, GRI 403-8

25

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Hazard Management

Employee Engagement and Training

Timely and proper hazard identification and proactive management of health and safety risks are essential for a safe
working environment. Hazard identification and risk assessments are performed on both a routine (e.g. scheduled assessments, audits, and checks) and non-routine basis (e.g.
new legal requirements, changes to systems, equipment
or materials), and include abnormal and/or emergency situations (e.g. incidents and accidents, breakdown, maintenance, fire emergency, chemical spills, etc.). The assessments follow the applicable Standard Operating Procedureand Guidelines. This process is overseen by appropriately
qualified market HSE personnel in close collaboration withrisk owners and cross-functional stakeholders.
The overall objective is to ensure that hazards and risks are
implemented in a timely manner and that control and recovery measures are implemented to minimize health andsafety risks to levels that are as low as reasonably practicable (ALARP). Governed by our policy and HSE-MS, all employees and workers must quickly report any hazards orrisks they identify to their line management. All accidents,
incidents, and near misses must also be promptly reported
to line managers to ensure timely investigation and corrective action.
Employees and workers are obliged to stay alert to potential health and safety incidents in the workplace and areempowered to work with line management towards establishing and applying the hierarchy of controls based upon
“E-SEAP” (i.e. eliminating hazards, substituting hazardous
with less hazardous, engineering controls, administrative controls and personal protective equipment). Employees and workers are also empowered to avoid and remove
themselves from potentially harmful situations as necessary and to inform their line manager. It is against our Codeof Conduct to punish any employee or contractor who, acting in good faith, reports an issue or removes themselvesfrom a situation on HSE grounds.
In line with our commitment to continuously improve healthand safety management, it is essential that any incidents arereported and investigated, and that remedial action is taken
to prevent reoccurrence. All accidents, incidents, and nearmisses are investigated. A root-cause analysis is performed
for injuries, significant process safety events, and incidents
with high potential impact. Lessons learned are communicated across the relevant parts of the organization. To support effective enquiry, DKSH encourages open communication between employees, workers, and line management.
Our policy and HSE-MS require that findings are documented
and used to develop health and safety targets, plans, andappropriate risk control measures. HSE Managers in eachmarket are accountable for developing and documenting
health and safety targets before seeking review and approval from national HSE Steering Committees. We periodically review targets based on hazard identification and risk
assessments and communicate the outcomes to employees,
workers, and/or other stakeholders as applicable.
‣ GRI 403-2, GRI 403-3

We hold local workshops and engagement sessions on
occupational health and safety to ensure employee andworker participation, consultation, and communication activities. Employees and workers are encouraged to provide
input and feedback on constructive improvements to support health and safety standards in the workplace. Extraawareness sessions may be convened shortly after an incident or accident. Our employees and workers can also approach their line managers and local HSE teams at any time
to report dangers and risks.
DKSH is committed to providing the necessary health andsafety information, instructions, and training to everyone
working in our operations. Local HSE Managers are responsible for identifying occupational health and safety (OHS)
training needs and implementing the company-wide OHS
training program, supplemented by regulatory content for
the respective market. The local HSE team can also develop
its own customized training materials in specific cases, suchas following an incident or when a new piece of equipment
is introduced.
Building on the DKSH Learning Management System (LMS),
health and safety training includes traditional face-to-faceclasses and online courses and materials. New employees
receive comprehensive health and safety induction training on top of any job-specific training. All new recruits mustcomplete induction training (with signed attendance records) before commencing duties. To recognize and encourage safe working practices and behavior by our employees,
we use safety promotion awards in some markets.
‣ GRI 403-4, GRI 403-5
Addressing Impacts in the Supply Chain
We are committed not only to ensuring the health, safety,
and general well-being of people working at our sites but
also contractors in operations outside of our control, suchas transport or warehouse logistics providers. The management of hazardous chemicals is often outsourced to specialized providers who must have in place the standards and sys­
tems needed to qualify for outsourcing. This equally applies
to original equipment manufacturers (OEM). We expect all
our service providers to make clear commitments to proper
business conduct, including health and safety for their workers, as embodied in our Supplier Business Conduct Policy.
‣ GRI 403-7
2022 Performance
In 2022, key clients, customers, standards boards, and regulatory bodies, plus our internal Supply Chain Managementand HSE teams audited workplace safety in all distribution
centers. Key hazards mainly consisted of improper behavior
at operational level relating to operating forklifts and powered equipment, stacking loads and material storage, manual lifting and/or handling, unsafe driving on roads, and therisk of exposure to potentially dangerous goods and hazardous substances. Actions taken to manage these risks con-

26

About

Strategy and Governance

Our People

tinue to include engineering and administrative controls,
additional training, and the provision of personal protective
equipment.
In 2022, we furthered our efforts to promote road safetywith various campaigns across markets, such as Thailand
and Malaysia, and offered defensive driving training for employees and contractors alike.
Since the field marketing services in Australia were acquiredin 2020, more trainings have been introduced to equip workWork-related injuries
DKSH employees10

Our Business

Our Outcome

Appendix

ers with knowledge of safe working practices in areas suchas manual handling, working with ladders and slip andfall hazards as well as greater awareness of safe working
through use of infographics. These trainings have seen asignificant reduction in incidents. We are pleased to report
zero work-related fatalities and zero incidents of high-consequence work-related injuries in 2022. We will continue tostep up efforts to engage our workforce on the importanceof health and safety incident prevention and mitigation.

Number

Rate9

2021

2022

2021

2022

Fatalities from work-related injuries

0

0

0

0

High-consequence work-related ­injuries11

0

0

0

0

Recordable work-related injuries

70

49

1.04

0.74

Number of hours worked (in million)

67.3

66.2

–

–

Workers12

2021

2022

2021

2022

Fatalities from work-related injuries

0

0

0

0

High-consequence work-related ­injuries

0

0

0

0

Recordable work-related injuries

14

9

1.04

0.73

Number of hours worked (in million)

13.4

12.3

–

–

Main types of work-related injuries

DKSH employees

Workers

Types of injuries

2021

2022

2021

2022

No. of first aid injuries

69

24

3

40

No. of medical treatment beyond first aid

8

5

1

1

No. of job restrictions or transfers

0

4

0

0

No. of lost time injuries

62

40

13

8

No. of fatalities

0

0

0

0

Data was compiled via an internal reporting system guided
by Occupational Safety and Health Administration (OSHA)
reporting requirements. HSE Managers in countries are re-sponsible for recording incidents into incident registers andreporting these for consolidation at Group level.
‣ GRI 403-9

9 Per 1,000,000 hours worked.
10 All individuals in an employment relationship with DKSH ­according to national law
or its application.
11 Injury that results in a fatality or an injury from which the worker cannot, does not,or is not expected to recover fully to pre-injury health status within 6 months.
12 All individuals performing work for DKSH, such as DKSH employees, agency­workers, contractors, self-employed persons, sub-contractors, and volunteers.

27

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Employee Attraction, Satisfaction,
and Retention
Our Impacts

Our people make the differencein our service-based businessmodel. Training and developing
our ­employees help us deliver­outstanding performance and stayabreast of market developments.
They also create opportunities
for personal and professional­advancement, which positively
impact our employees’ careers.
As a company working in a diverse
and international environment,
we promote diversity, equity, and­inclusion and offer a workplace
where everyone can learn and grow.
Our Code of Conduct – which setsout how we respect human rights,
provide equal opportunities, and­support our people in their growth –further reinforces our positive
impact on people and society.

Belonging@DKSH
DKSH emphasizes the importance of diversity and inclusion in its workforce to ensure a well-rounded workplacewith a mix of varied perspectives and characteristics. Belonging@DKSH is an initiative to drive diversity, equity, andinclusion at DKSH. It reflects our belief that we can achieve
more when our employees feel they can be fully themselvesat work. It is a natural extension of our culture, our purpose,and our values.
Key Initiatives for Belonging@DKSH‣ Continue conducting engagement surveys and follow-up
activities to support a sense of belonging‣ Adopt recruitment and talent development practices that
help increase gender representation in management‣ Continue offering e-learning events and workshops toi­ncrease awareness with regard to diversity, equity, andinclusion habits and behavior
In 2022, DKSH continued to win accolades in various markets, including the exclusive Great Place to Work certification in China, India, Indonesia, Laos, and Vietnam.
Enabling Personal Growth and Recognition
To grow our business, we need to create the right conditions for our people to thrive. Our business and the industries we serve are diverse, offering significant opportunities
for our employees to learn and grow. We provide hands-on
experience, empowerment, and stretch assignments to develop employees. These opportunities, combined with feedback and learning from others and formal training from
our Fantree Academy, provide a balanced approach. In this70-20-10 model, 70 % is on-the-job learning, 20 % learning
through others and continuous feedback, and 10 % learning in formal courses.
At DKSH, we encourage our people to own their professional
development. We promote internal talents, whenever possible, instead of hiring externally. Open positions are advertised in an internal job market, and we foster internal mobility including international assignments. In 2022, about
21% of management-level employees were promoted or rotated into new assignments, and 54 % of our management
vacancies were filled internally. Both figures exceed our internal targets.
DKSH uses a Human Resources (HR) scorecard to enable
team leaders to better monitor and manage relevant KPIs
such as attrition, diversity, internal fill, and managerial
bench strength. This allows us to make data-informed people decisions.

28

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Fantree Academy: Staying Relevant
to Meet Future Needs
The Fantree Academy, our in-house learning and development center, supports employee growth with more than
1,800 learning and development programs offered in every
market. The Academy’s curriculum is based on three pillars:
Leadership, Functional Skills, and Essential Skills. Its courses
also cover ethics and compliance, employee onboarding,and health and safety.
Employees can access suitable learning sessions for themselves in terms of their roles, responsibilities, interests, andcareer ambitions. In 2022, over 97 % of employees received
training, up from 78 % the year before. They completed
387,638 learning events, resulting in 13.76 hours of learning
per employee, up from 5.30 hours in 2021. We are especially
Training hours(online and in-classroom-trainings)

proud that our staff employees received an average of morethan 12 hours of learning per person. In 2022, we successfully increased the number of completed learning eventsby putting an increased focus on employee development.
In the reporting period, more Business Units and markets
made use of learning technologies, especially e-learning,
to allow employees on-demand learning. At the same time,
Business Units invested in dedicated learning and development professionals. In addition, with COVID-19 restrictions
easing in many markets, in-person instruction returned in
2022. While 90 % of training was conducted online in 2021,
this number slipped below 65 % in some months of 2022.

% receiving
training

Average ­training
hours

DKSH employees13

97.3 %

13.76

Managers14

98.5 %

23.20

Staff1597.0 %

12.08

In addition to the online and in-classroom-trainings coveredby these figures, our employees receive on-the-job and external training, depending on their responsibilities. This can
include education for our employees done by our clients,
e.g. on the operation and repair of machinery or the properties of various specialty chemicals.
‣ GRI 404-1, GRI 404-2
Recognition is a key part of our approach to retaining talent. In addition to training, on-the-job opportunities for
growth, and internal mobility, DKSH celebrates those employees who have most embodied our company purpose,values, and People DNA through the DKSH Fantree Awards.
Individual employees or teams are encouraged to nominate
colleagues at the market level. At town hall meetings, werecognize and celebrate awards, which are handed over bymembers of senior management.
In addition to local awards, six corporate-level awards acknowledge extraordinary contributions. The winners present their success stories during a ceremony at a Board of Directors meeting. In 2022, we were able to honor the Global
Fantree Award winners in person again at our September
Board of Directors meeting in Bangkok, Thailand.
Performance and Feedback Culture
Employee performance is measured against mutuallyagreed quantitative and qualitative objectives and is linked
to remuneration. All employees participate in a formal annual appraisal with their manager.

In 2022, our comprehensive performance review process
was moved to SAP SuccessFactors. This platform makesplanning and discussions even easier. All DKSH employees
now use the same objective-setting platform, which also reflects our values, individual targets, and development plans.
Regular conversations between managers and employees
on development objectives, including constructive feedback, are also a part of their development journey at DKSH.
We emphasize the importance of creating and following up
on meaningful personal development plans, especially for
managerial employees. In 2022, over 68 % of managers created a development plan. The numbers were 69 % for female managers and 67 % for males.
In addition, we assess our managerial bench strength. We
hold regular talent panel discussions to evaluate which of
our employees meet the requirements to advance to thenext level of their managerial career and want to make amove. In 2022, the percentage of employees falling into thiscategory jumped to 35 % (up from 18 % in 2021). This jump
is a result of our increased efforts in 2022 in talent promotion and identification. All decision-making with respect toappraisals, development opportunities, and promotions uphold our commitment to equal opportunities.
‣ GRI 404-3

13 All individuals in an employment relationship with DKSH according to national law
or its application.
14 Members of the Executive Committee, corporate or local heads of Business Unitsor key Functions, and DKSH employees with P&L and/or budget responsibility,­direct reports, and function specialists/heads/managers.
15 All DKSH employees who are not m­ anagers.

29

About

Strategy and Governance

Our People

We are both developing our in-house talent and bringing
in new talent. This combination means that our HR employees can now better support our business leaders in building high-performing teams and setting meaningful performance objectives.
In 2022, DKSH continued conducting surveys to gather employee feedback on engagement, onboarding, and exit experience. This survey provides valuable insights to measure
our progress in building a high engagement and performance culture. In 2022, we expanded the audience of our
YourVoice@DKSH engagement survey, reaching all employees with company email addresses – more than 22,000 people or about two-thirds of DKSH’s total headcount.
Our engagement score16 has continued to increase since westarted the survey in 2021, reaching our benchmark engagement score of 75 out of 100. More importantly, our managers work with their teams to understand the results and prioritize and implement activities that will address any gaps inengagement. Our top organizational strengths are learningfrom our mistakes, accountability, and a sense of purpose.
‣ GRI 2-26
Creating a Supportive Work Environment
Providing a work environment that is conducive to people
performing at their best includes offering benefits to theworkforce. DKSH provides a variety of benefits to its employees based on applicable policies in the markets of operation. Standard benefits, with some variation by market,
include life insurance, healthcare, disability and invalidity
coverage, statutory retirement provision, and leave entitlement. In four out of 11 significant locations17, the benefits
provided to part-time and temporary employees are identical to those of permanent full-time employees, and in six
other markets some of the benefits are only provided to fulltime employees. In one market, no voluntary benefits areprovided to part-time or temporary employees. Benefits related to stock ownership are limited to eligible key managers of the company. Our benefit practices are continually reviewed and enhanced.
‣ GRI 401-2

Our Business

Our Outcome

Appendix

In this fast-changing world, technology allows us to work
differently and efficiently in a non-traditional work setting.
DKSH implemented a global Flexible Work Arrangement policy at the start of 2021, giving employees more ownershipof how and from where they work. As an employer, DKSH
empowers its employees by facilitating a flexible working
environment, wherever feasible, given the operational requirements of an employee’s role and job requirements.
While we believe that collaboration, creativity, teamwork,and connections are best nourished when interacting faceto-face in an office environment, alternative flexible work­arrangements – such as working from home or remotely –can offer viable solutions in achieving work/life balance for­employees­.
Sharing a Moment in LifeWe seek to offer an attractive work environment to makestaying with our company an attractive prospect, but weunderstand that some employees may seek new opportunities outside of DKSH.
In 2022, the overall attrition rate for the Group was 29 %; voluntary attrition stood at about 22 %. This is an increase compared with 2021, when the rates were 25 % and 17 % respectively. At management levels, the total attrition rate was justbelow 21%, with voluntary attrition at about 15 %. Although
our attrition rate may seem high, there are three factors toconsider.
First, Southeast Asia is an economic region experiencing
fast-paced change with generally higher attrition rates than,for example, European markets.
Second, the logistics sector, which makes up a large proportion of our workforce, is particularly dynamic comparedto other local industries, resulting in high attrition rates
among this employment segment. We will continue our efforts to reduce voluntary attrition further.
Third, the increase in attrition rates from 2021 are consistent with larger global trends seen as the COVID-19 pandemic has subsided.
‣ GRI 401-1

16 The engagement score is calculated by aggregating the average score of the twoquestions “How happy are you working for DKSH” and “I would recommend DKSH
as a great place to work” from the YourVoice@DKSH engagement survey.
17 DKSH defines significant operations as all markets with more than 500 e­ mployees.
This includes the 11 markets of Australia, Cambodia, Hong Kong, Indonesia,­Malaysia, Myanmar, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.

30

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Further Details about Our Employees18:
Total number of employees by employment contract(permanent and temporary), by gender
Gender

Permanent% of total

Temporary% of total

Total

Female15,90548.79 %

2,210

6.78 %

18,115Male

13,88742.60 %

490

1.50 %

14,377

Other

105

0.32 %

4

0.01%

109

Total

29,89791.71 %

2,704

8.29 %

32,601

Total number of employees by employment contract(permanent and temporary), by region
RegionPermanent% of total

Temporary% of total

Total

Thailand

9,905

30.38 %

108

0.33 %

10,013

Greater China19

2,671

8.19 %

79

0.24 %

2,750

Malaysia and­Singapore

5,546

17.01%

4

0.01%

5,550

Rest of Asia
­Pacific

11,10734.07 %

2,510

7.70 %

13,617

Rest of the world

668

2.05 %

3

0.01%

671

29,89791.71 %

2,704

8.29 %

32,601

Total

Total number of employees by employment type(full-time and part-time), by gender
GenderFull-time% of total

Part-time% of total

Total

Female16,32850.08 %

1,787

5.48 %

18,115Male

13,70742.04 %

670

2.06 %

14,377

Other

107

0.33 %

2

0.01%

109

Total

30,14292.46 %

2,459

7.54 %

32,601All disclosures in this Statement relating to employee numbers are based on headcount, rather than full-time equivalents, as we believe it is more appropriate for sustainability reporting purposes. All data was extracted from DKSH’s
SAP Human Resources Information System (HRIS) system.
‣ GRI 2-7, GRI 405-1
18 All individuals in an employment relationship with DKSH according to national law
or its application.
19 Includes mainland China, Hong Kong, Macau, and Taiwan.

31

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Labor Practices and Human Rights
Our Impacts

With more than 32,600 employees
and a very diverse workforce, DKSH
is making continuous progress towards greater equity and inclusion.
We strive to create a supportive
working environment and a diverse
workplace, knowing that decent
working conditions are essential at
all facilities and in the field.
At DKSH, we are aware that we may
have a potential negative impact
on local people and their rights by
operating in markets with ­enhanced
risk of human rights violations.
We also understand that fair, safe,and decent work is a key elementof responsible business practices
and of the human rights principles
set out by the United Nations and theInternational Labour Organization.

Fostering a Culture of Respect
At DKSH, we are committed to providing a work environment where people are treated with dignity and respect, arefree from discrimination or harassment, and work together
in a positive manner. We believe that this kind of culture isvital to helping people thrive and reach their full potential.
Upholding human rights is a key element in our employment
offering, as laid out in our Code of Conduct. DKSH does notdiscriminate based on age, religion, gender, or any other relevant category. We respect our workers’ rights to freedomof association and collective bargaining. Moreover, we do
not penalize anyone who engages in good faith in workers’
groups. At the end of 2022, 18 % of DKSH’s employees werecovered by collective bargaining agreements (2021: 18 %).
‣ GRI 2-30
Our management approach to non-discrimination andhuman rights practices has focused thus far on legal compliance and governance processes. We have mainly evaluated their effectiveness at the local level. Our intention is to
standardize our compliance-led approach to ensure consistent operating standards in all markets where DKSH operates. We are working towards centralized oversight on thisissue, with clear reporting to Group management.
As part of this, we conducted a human rights impact assessment in Malaysia in 2021. In 2022, we came up with a listof action items to be completed by the end of 2023 basedon this assessment. These action items reflect areas of improvement with regard to human rights risks for our foreign
workers. They include measures to ensure better-regulated
working conditions, such as establishing a grievance channel, conducting regular audits and due diligence, and administrative measures for the management of foreign workers’ employment contracts. A cross-functional team will also
be assembled in 2023 to define a centralized framework fora consistent and phased global review.
Our commitment to respecting human rights and non-discrimination is made clear to employees through our Code of
Conduct and related induction training that underscore theimportance of treating all people with respect. The training
materials specifically state that we do not tolerate any formof discrimination, harassment, or bullying. The courses also
encourage people to report any cases of misconduct to thesite manager or to the Human Resources (HR) team and emphasize that reports will be kept confidential. Our 2022 compliance training, which reached over 98 % of our employees,
included a Code of Conduct refresher with a particular focus
on human rights issues.

32

About

Strategy and Governance

Our People

From an organizational standpoint, our business partnering
approach allows employees to easily access support from
representatives of the Human Resources team stationed
within operations. The Integrity Line, the online reporting
tool operated by a third party, which we introduced in late2020, further enhances the avenues available to employees
for confidential reporting of human rights or other labor
condition concerns.
In 2022, we recorded 131 incidents reported via the Integrity Line, one of which related to discrimination. However,
the allegations could not be substantiated and the case wasclosed without further action.
‣ GRI 406-1
As another means of ensuring that labor rights are fully upheld, the HR and Supply Chain Management teams in eachof our key operating markets have responsibility for all hiring. Moreover, they must ensure that employees and contractors have the correct documentation. We operate management programs in line with applicable local laws andlabor regulations to prevent child or forced labor and illegal
work, and to ensure decent and safe workplaces, fair andtimely pay, and adequate rest periods.
‣ GRI 2-23, GRI 407-1, GRI 408-1, GRI 409-1
Supporting Diversity in the Workplace

Our Business

Our Outcome

Percentage ofmanagers,
by gender

Percentage of
employees,
by gender

44 %

56 %

48 %

52 %

Percentage ofmarket leadership teams,
by gender

Percentage ofsenior leaders,by gender

69 %Appendix

31%

Female

64 %

36 %

Male

‣ GRI 405-1

As a services company, our employees bring our values tolife. Their talent, commitment to our customers, and pridein DKSH are key to our business success. We strengthened
our approach to promoting diversity in our workforce by implementing a group-wide Belonging Policy in 2022, covering
diversity, equity, and inclusion.
Additionally, 75 % of our managers completed a comprehensive Belonging e-learning program, and our Performance
Materials Business Unit conducted “Sustainability x Belonging” workshops to increase awareness of the importance ofdiversity within the context of sustainability.
In 2022, 56 % of our employees and 52 % of our managers20 were female. Our senior21 leadership increased to 31%
women, up from 29 % in 2021. The representation of females in our market leadership team22 remains unchanged
as per last year’s percentage at 36 %. There are currently
no women on the Executive Committee, although women
held 25 % of the positions on the Board of Directors, DKSH’s
highest governance body, in 2022. This is partially due to thecurrent and historic underrepresentation of women in thescience, technology, and logistics talent pools. We are committed to diversity at all levels of the organization, including
increasing the representation of women in our senior leadership. These efforts will help us improve in all three priority areas.

20 Members of the Executive Committee, corporate or local heads of Business Unitsor key Functions, and DKSH employees as well as client staff with P&L and/or­budget responsibility, direct reports, and function specialists/heads/managers.
21 Senior refers to managers in corporate, regional, or local management roles.
22 Market leadership teams refers to heads of each Business Unit and Function withina market.

33

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Our Business

Our operations create value for communities all over the
globe. As a responsible company, we are working to reduce
our environmental footprint by mitigating climate change,
preventing pollution, and using resources more efficiently.
We are also constantly taking steps to make our supply chain
more sustainable.

34

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Environmental Responsibility
Our Impacts‣ Climate change mitigation

We know that our business activities have an impact on the climate.
Most of our greenhouse gas emissions result from logistics (warehousing and transport) and business travel. As a multinational
company, we want to reduce or
eliminate emissions at the source.

‣ Pollution prevention

We have potential impacts on theenvironment, people, and their
human rights, e.g. by consumingwater and disposing of effluents at
our manufacturing operations. As a
responsible business, we have implemented comprehensive measures to address these impacts.

‣ Resource efficiency

The importance of conserving natural resources makes waste management and prevention efforts a toppriority for DKSH. We are making
great efforts to reduce our impact
on natural resources, for instance,
when it comes to damaged products and packaging waste.

Climate Change Mitigation
Climate change affects us all. Scientific evidence suggeststhat concerted efforts are required to lower emissions andhelp fight human-induced adverse climate change. At DKSH,
we are aware that emissions from our operations may havean adverse effect on the climate. Most of our greenhousegas emissions are generated at our significant locations inSoutheast Asia and Greater China, primarily from warehousing, transport, and business travel activities. We are committed to playing our part in averting global warming bydecreasing or eliminating carbon emissions at their source.
Management Approach
Our Health, Safety and Environment (HSE) policy defines ourapproach to climate change mitigation. The policy underlines DKSH’s commitment to conducting business in an environmentally responsible manner. Local HSE Managers aretasked with maintaining a register of applicable national environmental laws and regulations and ensuring complianceacross all our operations. At the same time, we are taking aproactive approach to environmental responsibility by significantly reducing our reliance on fossil fuels and investingin renewable electricity and green buildings.
Our enhanced HSE Management System references ISO
14001. The local country HSE Steering Committees are responsible for ensuring its effective deployment across all
markets. In turn, local HSE Managers support the practical implementation of management systems and processes.
Targets and Progress
We have been reporting greenhouse gas emissions related
to our operations since 2018 and have launched several initiatives to reduce our carbon footprint. In addition to cutting fuel consumption, DKSH launched a program in 2019 touse more energy from renewable sources. Our goal: to become climate-neutral in our own operations by 2030.
We achieved our greenhouse gas emissions target – to­reduce greenhouse gas emissions from our own operations by 35 % by 2025 compared with a 2020 baseline – four
years early. Therefore, in 2021 we updated our greenhousegas emissions target. The new target for 2025 is a 65 %­reduction against our 2020 baseline.

35

About

Strategy and Governance

Our People

We calculated our decrease in greenhouse gas emissions
by comparing 2020, 2021 and 2022 data using the market-based approach for Scope 2. In 2022, we reduced ourgreenhouse gas emissions (Scope 1 + 2) in our own operations by 42.0 % compared with our base year 2020 and by
3.5 % compared with 2021 through various initiatives:

Our Business

Our Outcome

Appendix‣ Purchasing International Renewable Energy Certificates(I-RECs) as a credible claim for renewable energy use, incompliance with the GHG Protocol’s Scope 2 Guidance P‣ urchasing renewable electricity directly from energy
providers ‣ Reducing emissions at the source by optimizing transportroutes and ensuring more efficient use of electricity at
our sites

Greenhouse gas emissions (location-based accounting) in metric tons CO2 equivalent
The graph shows gross emissions,where Scope 2 figures are calculatedusing ­location-based factors for eachmarket, relating to the carbon intensityof the national grid.

4,015

12,351

3,119
79,89964,18064,26254,521

56,944

Air travel(Scope 3)
Outsourced transport(Scope 3)
Electricity(Scope 2)
Fuel and refrigerants(Scope 1)

52,906

5,742

5,046

4,970
2020

2022

2021

Greenhouse gas emissions (market-based accounting) in metric tons CO2 equivalent
The graph shows net emissions, where
Scope 2 figures23 are calculated using
market-based factors relating to thecarbon intensity of the electricity
we buy from our energy providers plus
our additional purchases of I-RECs.
For more information on I-RECs, see
Reporting Approach.

4,015

79,899Air travel(Scope 3)

3,119

12,35164,18064,262

29,792

27,877

Outsourced transport(Scope 3)
Electricity(Scope 2)
Fuel and refrigerants(Scope 1)

52,906
4,970

5,742

5,046
2020

2021

2022

‣ GRI 305-1, GRI 305-2, GRI 305-3

23 Before 2021, market-based = location-based. With the purchasing of Renewable
Energy Certificates (I-RECs) starting in 2021, we began to apply market-based
methodology to Scope 2.

36

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Energy usage in our operations, by activity, in MWh

8,733
5,066

Fuel usage
by our fleet

12,798
5,738

13,237
1,997

102,039

96,615

91,137

Fuel usage
in our facilities 24‣ GRI 302-1

Electricity
in our facilities 25

2020

2021

2022

2020

2021

2022

Scope 1+2 emission i­ntensity (market-based)
per million CHF sales

5.40

3.14

2.97

Scope 1+2 emission i­ntensity (location-based)
per million CHF sales

5.39

5.36

5.54

Energy consumption ­intensity per million CHF sales

9.77

10.07

10.65

Emission intensity and energy consumption intensity‣ Emissions intensity (market-based): Scope 1+2 CO e emis2

sions market-based in t per CHF million net sales E‣ missions intensity (location-based): Scope 1+2 CO2eemissions location-based in t per CHF million net sales E‣ nergy consumption intensity: Energy consumption26
in MWh per CHF million net sales ‣ GRI 302-3, GRI 305-4
Energy Consumption and Fossil Fuel Use
in Logistics Operations

DKSH operates around 200 distribution centers (DCs) to distribute the products made by our clients and our company.
Our DCs and warehouses are typically leased, with a few ofthem built-to-suit. They account for a significant part of ourcarbon footprint. We consume energy for lighting, cooling,heating, and operating forklifts and other handling equipment. Most of our handling equipment is battery-powered.
Temperature-sensitive products may have to be stored andtransported in air-conditioned vehicles or special transportation boxes. Therefore, the use of refrigerants and the resulting fugitive emissions form part of our carbon footprint.

Our capillary distribution network serves thousands of customers daily. We have a comparatively small fleet of our own
vehicles. In 2022, we ordered five electric vehicles for ourown fleet to replace diesel vehicles in Thailand. Under a newpolicy for the Thai market, any new proposal for transportation services should include a quote for an electric vehicle alternative, where possible. In general, our goal is to replaceas many diesel vehicles as possible with electric vehicles for
short routes and hydrogen vehicles for longer routes.
Most of our outbound deliveries are handled by transport
service providers that we select based on quality, reliability, and, increasingly, fuel efficiency criteria. One of ourmost significant impacts relates to vehicle fuel consumption. More than 95 % of our outsourced fleet is diesel-powered, although some vehicles run on compressed natural
gas or gasoline. Here, route optimization is key to improving ­operating efficiency. Our outsourced fleet refers totransport services that we pay for on a per-trip/case basis,
while our chartered fleet is made up of vehicles that werent monthly. We continuously strive to optimize the mix oftrucks in our fleet to improve fuel efficiency and decrease
fuel consumption.

24 Fuel used in equipment such as forklift trucks and back-up electricity generators.
25 More than 37 % of electricity used is either purchased under a green tariff from our
supplier or is covered by centralized purchases of unbundled renewable energy
certificates (I-RECs).
26 Energy consumption for our own operations only. For energy types see bar charts­“ Energy usage in our operations, by ­activity, in MWh”.

37

About

Strategy and Governance

Our People

Emissions from Business Travel
Travel is a key part of our people-driven business. We have
put in place internal approval systems to prevent unnecessary travel. Most journeys are made via business flights, bysales and service teams in their own cars, and public transportation.
We experienced a significant drop in business travel in 2020
and 2021 because of the COVID-19 pandemic. While deliveries of goods were able to proceed, meetings with customers were restricted and most marketing activities switchedto online campaigns, new digital marketplaces, and webinars. For example, our Business Unit Performance Materials developed an innovative webinar tour on green, clean,and ethical cosmetics for our customers. In advance of theevent, our lab specialists created several formulations andsent samples to customers to create a hybrid digital/physical experience.
Business travel picked up during the reporting period,
against the backdrop of easing travel restrictions in mostof our markets during 2022 and driven by the need to personally connect or reconnect with colleagues and business
partners. As a result, emissions from business flights again
increased in 2022 compared to 2021 but remained below
pre-pandemic levels as we continue to benefit from the useof digital communication tools widely adopted during the
pandemic. To keep our emissions as low as possible, we willcontinue to use online communication whenever feasible.
Renewable Energy
In 2022, we increased our renewable electricity purchases.
Our food-blending plant in the Philippines switched to 100 %renewable electricity in early 2021. We also purchase renewable electricity from our energy providers for our operations in Myanmar, Laos, Italy, Germany (partially), Spain(partially), and Switzerland (partially). For other markets,
we purchase International Renewable Energy Certificates(I-RECs) to reach our target of climate neutrality in our own
operations by 2030.
A total of 46,882 MWh of electricity use across the following
markets was backed by I-RECs in 2022 in compliance with
the GHG Protocol’s Scope 2 Guidelines: Cambodia, Hong
Kong, Indonesia, Malaysia, Myanmar, Singapore, Thailand,
and Vietnam.
In addition, we constantly explore potential ways to increase
the number of solar panels on our distribution centers. For
this purpose, in 2022, we conducted an analysis across all
distribution centers to identify those suitable for solar panels. In 2023, we will continue our efforts by equipping further distribution centers with solar panels. In addition, thepotential for solar panels now forms part of the regular evaluation process when deciding on new distribution centers.

Our Business

Our Outcome

Appendix

Reporting Approach
We capture data on refrigerants, fuel, and upstream transportation for markets with the highest use of refrigerated
storage and the largest distribution networks. These markets include Cambodia, Hong Kong, Malaysia, Myanmar,
New Zealand, Singapore, Thailand, Taiwan, and Vietnam.
Fuel usage includes compressed natural gas (CNG), liquefied petroleum gas (LPG), diesel, and gasoline for our internal fleet of delivery vehicles and backup electricity generators. When gathering information on outsourced logistics
services, major suppliers specified diesel consumption datain liters from billing data. For consistency purposes, all fuelproperties and carbon intensity factors were sourced fromthe UK Government GHG Conversion Factors for Company
Reporting (2021 edition). The Global Warming Potentials arefrom the Intergovernmental Panel on Climate Change (IPCC)
Fourth Assessment Report (AR4) over a 100-year period.
We collect data on electricity consumption from bills received from utility suppliers for almost all of our markets.
For the US market, we have extrapolated energy data fromcost data. We do not report data for our small UK market
since electricity consumption is charged through a building services fee.
Starting in 2021, we have applied the most recent figuresavailable from the International Energy Agency (IEA) on the
carbon intensity of national electricity supplies to all markets necessary.
We continue to apply the following hierarchy for marketbased factors this year: 1) electricity supplier factor (or centralized I-RECs purchases); 2) credible residual factor source(e.g. Reliable Disclosure Systems for Europe [RE-DISS] forEuropean countries); 3) same as a location-based factor.
For I-RECs purchases, we match the sourcing to the market
of consumption, and the production year to the consumption year, wherever possible. Our provider recommends themost appropriate substitute in cases where this is not possible.
While I-RECs show 0 g CO2 /kWh, for transparency reasons,
we mention the global averages for emissions related to­hydropower.
The global averages for hydropower from reservoirs/damsare:‣ Direct emissions (Scope 2) in tropical regions: 38.8 g CO2e/kWh. In non-tropical regions: 5.8 g CO2e/kWh‣ Indirect emissions (upstream Scope 3) in tropical andnon-tropical regions: 6 g CO2e/kWh
For I-RECs generated from run-of-river hydro the corresponding global average emission factors are:‣ Direct emissions (Scope 2): 0 g CO2e/kWh‣ Indirect emissions (upstream Scope 3): 4.1 g CO2e/kWhThis data has been provided by our service provider for purchasing RECs with reference to the Ecoinvent 3.8 emission
factor database.

38

About

Strategy and Governance

Our People

Biogenic emissions only relate to the biofuel content oftransport fuels and are considered negligible. All relevant
greenhouse gases are included in the calculation, i.e. CO2,
CH4, N2O, and hydrofluorocarbons (HFCs), along with the impacts of radiative forcing for business flights. We use operational control as the consolidation approach for emissions.
All figures concerning energy use and refrigerant use withinbuildings relate to distribution centers and offices. The company also has a small retail footprint in some markets, suchas Thailand. These shops are mainly leased units withinlarger complexes, with limited or no access to energy data.
All retail data is excluded as it is not considered material for
the Group’s footprint.
When looking at business travel, we extrapolated kilometers flown data based on flight spend data for all markets(with the exception of Myanmar for which we could not obtain comparable spend data). The UK Government GHG Conversion Factors for Company Reporting (2021 edition) wereapplied to convert kilometers into CO2e (including R.F.). To
streamline reporting, we now apply the “international not
to/from the U.K.” factor with “average” seat class to all
flights; we used to apply the “domestic” factor, irrespectiveof the market, for domestic flights.
‣ GRI 302-1, GRI 305-1, GRI 305-2, GRI 305-3
We also prepare a carbon disclosure in line with the CDP
climate change disclosure system. CDP is an international
non-profit organization that aims to establish business standards for environmental reporting and risk management.
DKSH has published CDP disclosures since 2016, given theorganization’s importance to both business partners andinvestors. For information on our latest carbon disclosure,please visit the CDP website.

Pollution Prevention
Management Approach
Our Health, Safety and Environment (HSE) policy encompasses all environmental and climate issues and underlines
our commitment to conducting business in an environmentally responsible manner. In keeping with this policy, local
HSE Managers are responsible for maintaining a register ofnational environmental laws and regulations and for ensuring compliance across all our operations.
Our enhanced HSE Management System references ISO
14001. Local HSE Steering Committees are responsible for
ensuring its effective deployment within their respective
markets, while local HSE Managers support the practical implementation of management systems and processes.
In 2022, we conducted an environmental risk assessment(ERA). Its primary objective was to identify and assess risks
arising from the operation of our facilities and, if necessary,
to implement suitable mitigation measures to reduce risks
to acceptable levels.

Our Business

Our Outcome

Appendix

We engaged an external environmental consultancy firm to
conduct the assessments for selected sites located in six
markets (Australia, China, Indonesia, Malaysia, Philippines,
and Thailand), representative for each of our four Business
Units. The objective was to gain a representative yet comprehensive picture of our various business activities in manufacturing, distribution or other, carrying potential environmental risks.
The assessment involved reviewing information and documentation provided by DKSH, online interviews with key
personnel, and site visits to selected facilities.
The assessment focused on four environmental aspects:‣ Energy efficiency‣ Emissions reduction‣ Waste management‣ Other environmental impacts (such as noise, air quality,
water quality, and material storage)
Environmental/climate risk profiles were created for eachfacility to generate a list of significant environmental/climate risks and potential gaps in the current system.
The ERA found that, in general, our environmental/climate
impacts are minimal or that the measures implemented at
our sites are already sufficient to manage existing risks, but
not without recommending several measures to further
strengthen our management approach. We will continue
to improve environmental protection at our sites by implementing the ERA’s recommendations.
‣ GRI 413-1, GRI 413-2
Water Conservation and Effluent Management
We minimize our impact on the environment by using waterin a responsible manner and treating our wastewater properly. Our approach to water and wastewater management
is decentralized, allowing our facilities to tailor measures totheir location and specific products.
For example, our United Drug (1996) facility in Thailand,
which manufactures pharmaceutical and medical products, takes stringent measures to protect people and theenvironment from risks associated with wastewater while
also meeting regulatory requirements. The existing wastewater treatment plant was upgraded and made more efficient. This new plant is slated to enter regular operations inthe second quarter of 2023.

39

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Resource Efficiency
Waste Management
With a comparatively small manufacturing footprint in our
Own Brands, we generate product packaging plastic waste
only to a small extent. While we have no influence on the
packaging of our clients’ products, we aim to keep packaging waste in logistics to a minimum.
Preparing goods for delivery mostly requires cardboard
boxes and plastic film for pallet wrapping. Packaging waste
is also generated from incoming shipments. Healthcare
cold-chain goods need extensive packaging to protect temperature-sensitive items. We already use the recyclable
B-Box in Thailand and the Orca Box in Malaysia. To further
reduce packaging waste, Business Unit Healthcare launcheda pilot project testing an alternative to wood-pulp carton
boxes in 2022. This pilot project was initiated with a partner that uses agricultural waste from sugarcane and wheat
production to create the fibers for paper and carton boxes.
Whilst the ecological benefit from the pilot was satisfying,scalability in terms of supply remains a major obstacle forthe time being. We will continue our efforts for exploringsustainable packaging materials in 2023.
We also generate waste from unsold goods, administrative
activities (office waste), and IT. Following the introductionof the DKSH Guidelines on Waste Management in 2020, ourmajor distribution centers in the markets of Australia, Laos,
Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Taiwan, Thailand, and Vietnam reported waste data
in 2022. In total, these markets generated 38,223 tons ofwaste, including 5,391 tons of hazardous waste in 2022.
The data serves as the foundation for setting targets to improve our waste management. Going forward we will further enhance waste reporting and our waste management
approach by providing more granular data regarding different waste categories and recovery statuses. In turn, thiswill serve our goal of generating less waste, diverting morewaste away from disposal and towards recovery.
Our waste reporting approach is based on a pilot project
conducted in Thailand in 2021. During this pilot, Thai distribution centers completed monthly reports quantifying
waste generation, disposal, and recovery. The data was categorized by material type and whether the waste was hazardous. During 2022, we successfully fine-tuned and stabilized data collection, leading to the initiative being rolled out
in the markets mentioned above.
In recent years, we have also made strides forward in our
digitalization journey by automating certain stages of customer transactions. Using digital technologies, we have created a paperless system to enhance efficiency and accuracy
while reducing our environmental footprint by eliminating
paper usage and printing. This project, successfully piloted
in Malaysia and Singapore, will be implemented in our major
markets, with the first rollouts in 2023.
‣ GRI 306-1, GRI 306-2, GRI 306-3

Safe Storage, Handling, and Transportationof Dangerous Goods and Hazardous Chemicals
We ensure that the dangerous goods and hazardous chemicals we distribute are stored, handled, and transported
safely. To standardize our approach across our global business, we released our Dangerous Goods and Hazardous
Chemicals Guidelines in early 2021 as part of our environmental management system. This system sets clear standards and guides personnel with assigned roles and responsibilities. Where appropriate, we rely on the servicesof carefully selected specialized outsourcing service providers while retaining oversight of our suppliers’ performance.
Reducing Product Waste in Business Unit
Consumer Goods
Sustainability is an important issue for Business Unit Consumer Goods. In 2021, the team created a sustainability organization comprising Sustainability Champions from eachmarket to identify sustainability priorities and mobilize action through coordinated activities. Reducing product waste
was identified as the core topic to be addressed. A Product Waste Reduction Toolkit was developed and deployedin early 2022. This toolkit creates awareness and encourages the whole Business Unit to work collaboratively to reduce product waste.
In March 2022, DKSH signed an agreement with the Global
FoodBanking Network (GFN), a non-profit organization thatdevelops and supports food banks in more than 40 markets.
This partnership aims to scale up efforts to recover and distribute surplus food and non-food products throughout the
Asia Pacific region. To kick off this partnership, donations
were made to SOS Thailand and Feeding Hong Kong, the
GFN’s partners in Thailand and Hong Kong. These endeavors will continue and will be rolled out to other GFN local
food banks in more markets.
Business Unit Consumer Goods donated a total of 132 metric tons of products to food banks (or similar organizations)in 2022. This represents an 82 % increase in donations versus 2021.

40

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

TCFD Report
Our Impacts

Climate change is a critical c­ oncern
for DKSH. Considerable opportunities and risks lie ahead becauseof the changes in our environment
caused by global warming and thetransition to a low-carbon economy.­
Understanding and assessingthese implications is crucial, especially considering their growing
importance to investors and businesses. Our approach is alignedwith the Task Force on Climate-­
Related Financial Disclosures (TCFD)
recommendations. This chapterof our Sustainability Report is drawn
up in accordance with the recommended TCFD disclosures to show
how we are responding to climatechange through our risk management system and strategy.

Climate Governance
We have assigned climate-related responsibilities to various positions and committees throughout our organization– mainly our Board of Directors, the Executive Committee,
including the Chief Executive Officer (CEO), and the Sustainability Committee.
Our climate-related responsibilities are managed within oursustainability governance structure. Detailed information on
our sustainability governance structure can be found in the
Sustainability Governance and Risk Management chapter.
Further information on our climate governance can befound in our CDP Questionnaire 2022 (sections C1.1a, C1.1b,
C1.2a, and C1.3) available on the CDP website.
Strategy and Assessment of Climate-Related Risks
and Opportunities
DKSH recognizes that climate-related risks and opportunities have the potential to affect our business and supply
chain reliability. We identify and assess risks, including climate-related risks, in accordance with the DKSH Risk Management Policy. The Risk Management team conducts theformal risk identification and assessment for risks that could
have a substantive financial or strategic impact. Further information on our risk management can be found in the­Sustainability Governance and Risk Management chapter
and in our CDP Questionnaire 2022 (sections C2.1a, C2.1b,C2.2, C2.2a, C3.3, and C3.4) available on the CDP website.
In 2022, we also assessed transition and physical risks. The
use of different climate scenarios helped us identify climate-related issues, assess possible future risks and opportunities, and adapt to developments at an early stage.
The transition risk assessment drew on the Net-Zero Scenario (NZE) of the International Energy Agency (IEA). The
NZE defines a pathway to achieving net-zero CO2 emissions
by 2050 in keeping with the Paris Agreement’s goal to limit
the rise in global temperatures to 1.5°C relative to pre-industrial levels. The scenario assumes key parameters facilitating the transition to a low-carbon economy in the fields ofenergy, technological, political, and market developments.
It allows us to make scenario-based assumptions about the
impacts and risks associated with the transition to net-zero
CO2 emissions by 2050.

41

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

The physical risk assessment was grounded in scenarios
taken from the 6th Assessment Report of the Intergovernmental Panel on Climate Change (IPCC). Scenarios looking
at 2-degree global warming (SSP1-2.6) and 4-degree global
warming (SSP5-8.5) were examined by looking at three different horizons: near term (2040), medium term (2060) andlong term (2100). As recommended by the Task Force on­Climate-Related Financial Disclosures, our analysis focusedon the 4-degree scenario to map physical risks to our business associated with a changing climate according to the­scenarios.
As a first step in the physical risk assessment process, we
conducted an in-depth physical hazard assessment for
DKSH’s entire value chain (our upstream and downstream
value chain as well as our own sites) using the IPCC World
Atlas regional information tool. It found that physical hazards such as mean temperature increase, heavy precipitation, and drought (see tables below) pose a high risk tosome operations. We also expect rising sea levels to becomea hazard in the long term because DKSH is active in regionsthat will most likely be at risk of increasing sea levels and operates sites that are close to the coast. The assessment has
some limitations; for example, it does not allow for site-specific judgments.
Mean Temperature Increase(4-degree global warming scenario, IPCC SSP5 – 8.5)

Near term(2021–2040)
Medium term
(2041–2060)

An increase in mean temperature is one sign of changing­climatic conditions in a region where rising temperatures
are considered most likely. Higher temperatures can lead tolonger and more severe droughts impacting agriculture andhuman health, but also more frequent wildfires and more
intense tropical storms.

Upstream value chain
29 %Long term(2081–2100)

Very
low hazard

Own sites

Downstream value chain

18 %

86 %

In the near-term scenario,
only 29 % of the regions where we source
products face a medium risk ofa mean temperature i­ncrease.
This increases to 86 % of regions facing
a very high risk in the long-term scenario.

22 %

64 %

In the near-term scenario,
only 18 % of the regions where wehave our own sites face a medium riskof a mean temperature increase.
This jumps to a very high risk for 64 % of
the regions in the long-term scenario.

These figures refer to the share of regions taken into account, according to the variable “Mean Temperature” of the
IPCC World Atlas regional information tool.

Veryhigh hazard

78 %In the near-term scenario,
only 22 % of the regions where wesell products face a medium risk ofa mean temperature increase.
This climbs to 78 % of regions witha very high risk in the long term.

42

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Heavy Precipitation(4-degree global warming scenario, IPCC SSP5 – 8.5)
Climate change can affect the intensity and frequency of
precipitation. More frequent and heavier rain and snow
events can destroy infrastructure and buildings. On theother hand, less precipitation can result in a drought, which
impacts agriculture and human health.

Own sites

Upstream value chain
43 %Downstream value chain

45 %

33 %

14 %
43 %

43 % of all regions already face a ­medium
risk of changed precipitation in the­near-term scenario, which encompasses­regions in Asia and the U.S.A.
Between now and 2100, 57 % of all ­regions
will experience a very highor high risk that is strongest in South Asia.

27 %45 % of all regions already face a medium
risk of changed precipitation in thenear-term scenario. Between now
and 2100, 27 % will face a very high risk,
mainly regions in Northern Europe,
the Mediterranean and South Asia.

33 % of all regions already have a m­ ediumrisk of changed precipitation in thenear-term scenario, which intensifies tohigher hazard risks by 2100. South Asia
will be the most affected, followed by
East Asia, Southern Australia, andWestern and Eastern North America.

These figures refer to the share of regions taken into account, according to the variable “Standardized Precipitation
Index” of the IPCC World Atlas regional information tool.
Drought(4-degree global warming scenario, IPCC SSP5 – 8.5)
Drought is measured by the number of consecutive dry days
and has an impact on agriculture and human health.

Upstream value chain

71 %
29 %

29 %

In the near-term scenario,
71% of all regions face no risk, while in
the long-term 29 % are affected by­medium risk and another 29 % by high risk.

Own sites

Downstream value chain
11 %

36 %
9%

33 %
18 %

63 % of all r­ egions areaffected by a medium to high level riskin the long-term scenario.

These figures refer to the share of regions taken into account, according to variable “Consecutive Dry Days” of the
IPCC World Atlas regional information tool.

In the near-term scenario,
11% of regions, mainly in Western andCentral Europe, already have a medium
risk. By 2100 the risk will have increased
in all r­ egions except South Asia, whereby
33 % of regions will face a very high risk.

43

About

Strategy and Governance

Our People

After finalizing the hazard assessment, we held a workshop
with internal experts from all four Business Units as well as
representatives from our Business Units, Supply Chain Management, Business Development, Group Strategy & Analytics, Group Risk, as well as Group Sustainability to discuss theresults of the scenario analyses and prioritize climate-related risks, impacts, and opportunities.

Our Business

Our Outcome

Appendix

During the workshop, we analyzed and weighted scenariosand considered the physical impacts and consequences forour business activities and upstream and downstream climate change. As a result, we identified five opportunities,
five physical risks, and six transition risks and related impacts (please see table below for details) which may impact
our business operations and financial planning.

Opportunities
The following mitigation and adaptation measures create opportunities for DKSH.
MeasureOpportunity

More efficient distribution processes and vehicles

Cost reduction by making distribution processes
more efficient

Improvements to the Business Continuity Plan (BCP)

Timely and appropriate response to climate-related­challenges through an improved BCP

More efficient building infrastructure

Cost reduction by decreasing energy and water­consumption in buildings

Digitized services

Lower emissions by using more digital marketingand sales services

Sales of low-emission goods & services

Attracting and retaining clients who prefer low-emission
products and gaining a competitive advantage by developing tiered services to cater to demand for highly sustainable versus lower environmental products and services

Physical Risks
We identified the following acute and chronic physical ­impacts of climate change.
Risk

ImpactDamage to transportation infrastructure through rising
sea levels and heavy precipitation

Delivery disruption and higher costs as emergency­alternative solutions have to be found, difficulties
for e­ mployees to travel to work leading tohigh a­ bsenteeism and operational disruptions

Damage to energy infrastructure caused by extreme
weather events

Operational and supply chain disruptions, systems­breakdown

Reduced raw material availability to DKSH clients due todrought stress

Disruption of raw material availability to DKSH clients,­impacting availability of consumer goods

Lack of insurance due to extreme weather events

Natural hazards might not be insurable in the future,­leading to high cost of risk transfer

Health impact on workforce

Negative impacts on the health and safety of theworkforce, leading to absenteeism and a lack of talent

44

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Transition Risks
The following risks are associated with the transition to a low-carbon economy
Risk

ImpactGreater emission reporting obligations

Cost and required increase in human resources capacity

Greenwashing accusations

Reputational damage which impacts demand;
more effort to perform due diligence

Dependency on electricity supply

Increased dependency on electricity supply requires­consistent energy infrastructureHigh uncertainty about energy supply and prices

Increased costs associated with fluctuating energy prices
and unexpected shifts in energy prices

Reduced capital availability

Capital is increasingly tied to a company’s climate performance as sustainability policies become more common

Increased pricing of greenhouse gas emissions

Rising energy prices, energy or carbon taxes and­regulatory driven costs, regional inequality leading
to geographic redistribution

Further information on climate-related risks and opportunities can be found in our CDP Questionnaire 2022 (sections
C2.2, C2.2a, C2.1b, C2.3a, and C2.4a) available on the CDP
website.

our own operations by 42 % compared with our base year
2020 and by 3.5 % compared with 2021 through various initiatives. These activities help us fast-track our ambition to
be climate-neutral in our own operations by 2030.
To this end, we are reporting key core performance indicators, such as our own greenhouse gas emissions in accordance with Scope 1, 2, and 3 of the Greenhouse Gas (GHG)
Protocol. We also collect data and regularly review our performance in the area of waste. Our emissions-related reporting and data can be found in the Climate Change Mitigation chapter, while information on waste is located in the
Resource ­Efficiency chapter.
In addition, all Business Units and relevant Functions must
define measures contributing to DKSH’s overall target of becoming climate-neutral.

Climate-Related Metrics and Targets
DKSH is adapting its business model to reflect risks arising from climate change and to make an active contribution
to mitigating climate change. In keeping with these efforts,
DKSH has defined a path towards its climate neutrality goalfor 2030. This target is part of our Sustainability Framework
and works towards the Swiss Government’s climate targetsof reducing emissions by 50 percent by 2030 with a 1990
baseline, under the framework of the Paris Agreement.
We achieved our greenhouse gas emissions target – to reduce emissions from our own operations by 35 % by 2025
compared with a 2020 baseline – four years early. Therefore, in 2021 we updated our target. The new target for 2025
is a 65 % reduction against our 2020 baseline. In 2022, wereduced our greenhouse gas emissions (Scope 1 and 2) inFurther information on climate-related metrics and targets
can be found in our CDP Questionnaire 2022 (sections C1.3,
C4.1, C4.1a, C4.2b, C5, C6, C7, and C11.3a) available on the
CDP website.

45

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Responsible Supply Chain
Our Impacts

Since activities within our supply
chain may have a variety of environmental and/or social impacts, we takespecific measures to minimize theireffects. We acknowledge that challenges in upholding human rights
exist in some of our markets. DKSH
also faces risks associated withworking conditions and human rights
when using employment agencies
to hire foreign, temporary, andcasual workers and when subcontracting activities to local logistics
industry. We are committed toaddressing these risks in our supply
chains and positively impacting
the communities where we operate.

Procurement and Manufacturing Operations
DKSH’s main business is to provide market access andhighly specialized and tailored local marketing and distribution services within the framework of our four distinct Business Units. We operate a contract-based business model,
procuring trading goods directly from a global client base,with products either supplied locally or internationally, as
determined by our clients. Our other businesses include international sourcing of products for customers, marketingof Own Brands (self-manufactured or sourced) under trademark ownership or license, and on limited-scale retail franchising as well contract manufacturing for a local customerbase.
‣ GRI 2-6
Our procurement related to distribution, sourcing, and manufacturing activities accounts for more than 90 % of total
procurement. Whilst we strive to maximize local sources ofsupply, these are either determined by clients or are basedon availability of suitable materials and components in oursourcing and manufacturing businesses. A split between international vs. local sourcing or procurement is currently
not available.
Our business model is heavily geared towards local service
delivery, from importation down to sales, delivery, and after-sales service. This usually involves working with local
service providers to assist with marketing, logistics, or otheractivities. Logistics represents a significant portion of our
local spend, along with advertising and promotional expenses that we manage for our clients or for our own operations. For the in-market execution of our business, we estimate that procurement from local suppliers27 in significant
locations of operation28 accounted for almost 100 % of our
spending in 2022.
‣ GRI 204-1

27 Supplier that is based in the same geographic market as the reporting operation.
28 DKSH defines significant operations as all markets with more than 500 e­ mployees.
This includes the 11 markets of Australia, Cambodia, Hong Kong, Indonesia,­Malaysia, Myanmar, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.

46

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Ensuring Responsible Procurement
Up until 2018, business relationships in the supply chain
were forged on the principles expressed and communicatedvia DKSH’s Code of Conduct. Moreover, all our procurement
activities have been governed all along through various
sets of specific policies, providing more detailed guidance
towards applicable standards in the business (such as our
Anti-Bribery and Anti-Corruption, or Conflict of Interest, or
Third-Party Intermediary policies). In 2018, for a more concise management of business relationships pertaining to
non-trade procurement (NTP), we launched our Supplier
Code of Conduct expressing expectations towards business
partners in a more focused manner.
In 2022, we took further steps towards a comprehensive
management of business relationships in the supply chain
by committing to the principles of the United Nations Global
Compact. This commitment was turned to action throughthe adoption of a Responsible Procurement Policy in mid2022, authorized by the Executive Committee with endorsement by the Board of Directors.
This Policy reflects national and international legislation andstandards for responsible business conduct, such as the Organization for Economic Co-operation and Development’s(OECD) Guidelines for Multinational Enterprises and the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. It specifies standards
and principles related to ethics, human rights, working conditions, and environmental stewardship that DKSH has committed to uphold. It stipulates, for instance, that we do nottolerate child labor in any form and do not procure conflictminerals.
The Policy sets out the following risk management processes, including due diligence procedures, to ensure that
suppliers adhere to our standards: We assess new suppliers
and monitor active suppliers for risks or concerns pertaining to ethical business conduct, environmental practices,labor conditions, and human rights. This process categorizes suppliers based on the nature of their business withus, with each category assessed and rated on likely environmental or social impacts and risks. Suppliers ranked with ahigher risk profile are prioritized for further screening andverification.
Furthermore, complementing our Responsible Procurement Policy, we adopted a new Supplier Business Conduct
Policy, replacing our Supplier Code of Conduct. We expect
our suppliers to acknowledge their commitment to, under-

standing of, and application of our standards and principles
in accordance with the Supplier Business Conduct Policy.
Any related concerns are directly taken up with suppliers
and brought to a satisfactory resolution. This procedure
also helps us comply with our responsibilities under new
Swiss legislation on transparency in non-financial mattersand associated due diligence requirements, effective as ofJanuary 2022.
The implementation of the Responsible Procurement Policy
and the Supplier Business Conduct Policy started in 2022
and is expected to be completed in the later part of 2023,
inter alia operating alongside the Third-Party Intermediaryand the NTP Policies.
The diversity of our business and products at times requires
flexibility in our management approach as opposed to a
one-size-fits-all model. Business Unit Performance Materials, operating further upstream in the supply chain closer
to origins of raw materials and ingredients, has taken steps
to submit suppliers of trading goods to a more elaborate
screening and assessment process by signing an agreement with EcoVadis as an assessor company, in line with
their s­ trategic priority of creating a more sustainable product portfolio.
‣ GRI 2-23, GRI 2-24, GRI 407-1, GRI 408-1, GRI 409-1,
GRI 414-1, GRI 414-2
Reducing the Impact of Palm Oil Cultivation
Beyond these general rules, we are paying particular attention to the issue of palm oil, a product which is used in
our trading business and our manufacturing activities to aminor extent. Although palm oil plays a marginal role in ourbusiness activities, we actively strive to manage the environmental and social risks associated with this product.
DKSH is a member of the Roundtable on Sustainable Palm Oil(RSPO), a global non-profit organization where we work withother stakeholders throughout the supply chain to make theglobal palm oil industry more sustainable. Currently we holdone RSPO certification (Indonesia), seven RSPO Distributor
Licenses (European and Asian countries) and are developing
additional DKSH country RSPO candidates, proving that wehave committed to and comply with the organization’s sustainability requirements. Moreover, we submit the required
Annual Communication on Progress (ACOP) at Group level
for all DKSH entities involved under RSPO.

47

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Ethics and Integrity
Our Impacts

Anti-Corruption‣ Anti-Corruption

Working to Combat Corruption

Most of our business is conductedin Asia, where several of themarkets and industries we workin are generally viewed as having
higher exposure to corruption
risks. This may negatively impact
society or the economy. In lightof this, we are taking steps tomitigate corruption-related risks.

‣ Responsible Marketing Practices

We engage in marketing andadvertising and relabeling activities
under our own brand, making
accurate and complete productinformation a highly relevant topic
for us.

‣ Responsible Tax Practices

We generate economic value that
stimulates economic growth. Inturn, this has positive impacts,
for instance through tax payments
to local governments that wemanage in a responsible manner.

‣ Data Privacy and Protection

We generate and access large
amounts of data related toour products and services andmay collect personal data.
Therefore, we take numerous
measures to prevent data loss
and ensure confidentiality.

Our company does business in several industries and markets where the risk of corruption is high and where negative
impacts on society are possible. We know that corruption
can result in fines, affect our ability to cultivate and nurturebusiness ties, and harm our relationships with investors. To
this end, we are actively working to lessen any risks associated with corruption.
Operating at the highest ethical standards is the foundation for our business, as enshrined in our Code of Conduct.
In 2022, we underlined our commitment to ethical conduct
by strengthening our compliance headcounts.
Our company performed training and education activities toensure that expectations are understood at all levels of theorganization and to encourage people to speak up if they
have concerns about improper behavior. In 2022, we completely revamped our compliance training to improve efficiency. Rolling out an interactive format helped us enhanceuser engagement and learning outcomes. In addition, aleading law firm validated our compliance training content
to ensure that it meets regulatory requirements. We also
introduced dashboards and data analytics tools to provide
insights and real-time data so that managers can oversee
completion of compliance training within their teams.
At DKSH, we are committed to acting with integrity and conducting business in an ethical manner. This includes not tolerating any form of bribery or corruption – issues formalized in our DKSH Code of Conduct and our Anti-Bribery andAnti-Corruption (ABAC) policy.
Most of our business is conducted in Asia, where several
markets and industries we work in are generally viewed ashaving higher exposure to corruption risks. Bearing this inmind, it is imperative that our employees and business partners understand our values and our expected standards ofbusiness conduct and uphold these principles in all their activities.
The Board of Directors of DKSH is responsible for adopting the Group’s compliance standards and policies and supervising their application. Working in tandem with local
governance bodies, senior leadership plays a pivotal role incommunicating our values in word and deed. This includes
DKSH’s Executive Committee at Group level, the Boards ofour publicly listed entities in Malaysia and Indonesia, and all
our local Country Management Teams.

48

About

Strategy and Governance

Our People

Our Business

Our Outcome

AppendixCompliance Program

Risk Assessment

Most organizations face the risk of fraud and embezzlement. At DKSH, we recognize these issues as risks to be actively monitored and managed. As an organization operating in markets and industries where inducements in theform of gifts, hospitality, or other formats are not uncommon, actively managing bribery risks features high on our
corporate agenda. Our management approach to mitigating these risks is addressed in several Group policies, including our:‣ Compliance Policy‣ Anti-Fraud Policy‣ Anti-Corruption and Anti-Bribery (ABAC) Policy‣ Gifts, Hospitality & Entertainment (GHE) Policy‣ Third-Party Intermediary (TPI) Policy‣ Conflict of Interest (COI) Policy‣ Manuals for Interaction with Healthcare Professionals(IHCP) for our Pharmaceutical, Medical Devices and Diagnostics product categories‣ Non-Trade Procurement (NTP) Policy
A comprehensive compliance management system and program address compliance with our anti-bribery standards.
These efforts are informed by our ABAC and related policies,
which reflect recognized international regulations, such as
the U.K. Bribery Act 2010 and the U.S. Foreign Corrupt Practices Act. Our governance processes include fraud risk assessments and fraud prevention covering the entire DKSH
organization via the segregation of duties and an internal
control system (ICS), which is overseen by the Group’s Finance Function.
Launched in January 2022, our Compliance Policy is the
backbone of our compliance program. It defines the fundamental principles of compliance, sets out responsibilities,
and specifies how this Function is organized within DKSH.
The Policy designates integrity and reputation as key assets
at DKSH. Under its provisions, management is in charge ofcompliance at DKSH, but all employees share responsibility
for its implementation. The Policy outlines these core principles to increase ownership of compliance risks.

In 2018, we launched an enhanced bribery risk assessment
process29 for deployment across all our markets, with prioritization based on national scores in Transparency International’s Corruption Perception Index (CPI). By the end of2022, 18 of our markets (48 %) had adopted our risk assessment process, representing 100 % of our significant operations, 95 % of net sales, and 100 % of operations locatedin territories exposed to higher risks as per the CPI rating.
We identify risks based on a detailed mapping process. The
level of risk is determined using the Group’s Risk Management policy and procedures, and appropriate controls are
assigned. For example, working with intermediaries in business transactions potentially increases the risk of bribery;
controls include due diligence requirements for standard orenhanced procedures depending on the assigned risk levels.
Interaction with healthcare professionals, which is highly
regulated at national and global levels, is another area
where we have identified and addressed a risk of non-compliance with the law. We also carefully monitor and manage
the handling of gifts and hospitality. Furthermore, we areaware of and mitigate corruption-related risks during procurement, when obtaining product and/or marketing approvals, and in the bidding process for public tenders.
All risks and their mitigating controls are documented in detailed Bribery Risks & Controls (BRC) templates. Controls include documenting control processes and procedures, howcontrols are communicated within the organization, andhow relevant personnel are instructed and trained to perform controls. BRC templates are reviewed and revised annually to ensure that they are up to date. These templatesalso serve as the basis for review and enforcement activities
by the corporate compliance team.
‣ GRI 205-1

29 Based on “Diagnosing Bribery Risk”, Guidance for the Conduct of Effective Bribery
Risk Assessment, Transparency International UK.

49

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Conflicts of Interest

Training and Education

In addition to performing risk assessments, our complianceprogram includes training, education, reviews, and audits,
as well as investigations and corrective actions if incidents
occur. Managing conflicts of interest (COI) is critical in any
compliance program.
We continued to train our employees on conflicts of interest in 2022, with 100 % of employees completing related
courses. Going forward, COI refresher training will be included in our revamped online compliance training modelthat was launched in late 2022.

Training and education are cornerstones of our complianceprogram and are instrumental in driving and maintaining
a culture of ethics and compliance. Within three months ofjoining our organization, all new employees must undergo
mandatory training, including on the Code of Conduct andavoiding corruption, as part of our thorough onboarding
procedures.
All employees are required to refresh their knowledge of
DKSH’s anti-corruption policies periodically. Our training
focus in 2022 was on creating organization-wide compliance training on all our compliance policies. In 2023, we intend to merge high-risk training (Cyber Security, Compliance, ­Anti-fraud, Anti-harassment) to form a single Integrity
Training package.

Compliance training30 completion, by employee category
Employee category

In scope

Completed

Ratio

Senior management 31

155

148

95.5 %

21,677

20,47894.5 %

Others33

359

279

77.7 %

Workers34

3,070

2,841

92.5 %

Total

25,261

23,74694.0 %In scope

Completed

Ratio

Greater China35

2,146

2,146

100.00 %Thailand

8,443

7,567

89.62 %

Malaysia and Singapore

4,224

3,969

93.96 %

Rest of Asia Pacific

10,057

9,673

96.18 %

Rest of the world

391

382

97.70 %

25,261

23,73793.97 %

Employees32

Compliance training completion, by region
RegionTotal

In 2022, 100 % of members of our two highest governancebodies, the Board of Directors and the Executive Committee(see Annual Report 2022, p. 14ff.), were aware of DKSH’s anti-corruption policies.
‣ GRI 205-2

30 Compliance training includes anti-corruption training and communication regarding anti-corruption policies and procedures.
31 Senior refers to managers in corporate, regional, or local management roles.
32 DKSH employees as well as client staff performing office work or semi-professional
office, administrative, and sales coordination tasks and individuals with supervising tasks.
33 Individuals expected to remain in an employment situation with DKSH or DKSH’s
clients only for a certain period of time such as temporary employees with a fixedterm contract, trainees, apprentices, or interns as well as contractors.
34 DKSH employees as well as client staff performing manual labor and being considered as skilled or unskilled workers.
35 Includes mainland China, Hong Kong, Macau, and Taiwan.

50

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Ethics in the Medical Sector
As a distributor of pharmaceutical and medical devices,
DKSH’s Healthcare Business Unit regularly interacts withhealthcare professionals (HCPs). We support ethical business conduct by endorsing relevant industry codes of ethics(International Federation of Pharmaceutical Manufacturers
and Associations [IEPMA], Asia Pacific Medical Technology
Association [APACMed]) and through active membership in
the respective industry associations.
Comprehensive Manuals for Interactions with HCPs in our
Pharmaceutical, Medical Devices and Diagnostics productcategories convert these codes of ethics into internal processes and procedures to ensure compliance with the relevant local codes when interacting with HCPs and enhancing
DKSH’s compliance program. In 2022, we launched a new
IT platform. This intuitive HCP engagement solution is designed to simplify expense monitoring processes related tointeractions with HCPs and includes business, compliance,
and finance monitoring.
Integrity along Our Supply Chain
As an outsourcing partner for our clients, we are committed
to upholding integrity in the supply chain within our sphereof influence. This includes our business partners, such as
customs brokers, event organizers, and forwarding companies, whom we rely on for parts of our service delivery.
DKSH does not maintain relationships with business partners that do not share our values or meet our standards fordoing business.
Business partners are engaged based on written service
contracts that include anti-corruption compliance clauses,with both our Supplier Business Conduct Policy and the
ABAC policy serving as contractual requirements. All service providers must undergo risk-based due diligence procedures before admission. Screening processes are periodically refreshed upon contract renewal, within one yearof admission, or on an ad hoc basis when specific warning
signs have been raised through our monitoring processes.
Anti-corruption policies and our Supplier Business Conduct
Policy are communicated to all business partners acting forand on behalf of DKSH.
‣ GRI 205-2
Integrity Line
Our Integrity Line is a secure online reporting platform providing employees and external parties with a 24/7 channel
to notify concerns in confidence and, at the reporter’s discretion, anonymously.
Employees and business partners can use the Integrity Lineto report any misconduct, especially violations of applicablelaw, and/or DKSH internal standards, rules, regulations orprocedures. Such concerns might relate to unethical business practices, bribery or corruption, harassment, conflictsof interest, inappropriate workplace behavior, or any otheractivity suspected of violating the Code of Conduct, ourcompany policies, or the law.

All reports are properly reviewed and kept confidential. Our
strict non-retaliation policy protects reporters who raise
concerns in good faith.
We publicize the existence of our Integrity Line internallyand externally, with the aim of empowering employees andexternal parties to speak up and promptly report any incidents of corruption or other misbehavior.
Under the guidance of the Group’s Compliance or Internal
Audit Functions, cases are investigated, and errant parties
are adequately sanctioned. DKSH has zero tolerance for retaliation against anyone who reports incidents in good faith.
Such assurances are provided to employees via clear commitments contained in the ABAC and other policies, and to
those reporting using Integrity Line.
In 2022, we recorded 131 reports via Integrity Line or otherchannels, with most reports relating to complaints in employee matters. Fifty-two reports (40 %) were sufficiently
substantiated to be investigated, with 30 reports relating tocorruption, predominantly relating to fraud and embezzle­
ment. Of these 30 corruption cases, 90 % resulted in termination or voluntary resignation, and the remaining 10 % in
warnings.
Updates on compliance concerns and our compliance program are reported to the Audit Committee quarterly and to
the Board of Directors annually.
‣ GRI 2-16, GRI 2-25, GRI 2-26, GRI 205-3
Effectiveness of the Compliance Program
Ensuring the proper application of compliance standards
comes under the remit of management at all levels. The
Group’s Compliance Function supports management by
providing advice, methodologies, and tools. Moreover, it
performs reviews to assess the level of awareness, understanding, and application of standards and compliance controls through a structured review and tailored enforcement
program.
We regularly review how effectively our compliance programis rolled out across our markets. We take immediate action
to resolve any shortcomings flagged by these reviews.
The results of such assignments are independently reported to the Board of Directors. Externally, DKSH’s compliance program is assessed by prospective or active clients
and/or external audit firms appointed by them. We give ourfull assistance to these assessments, which include thorough due diligence procedures and pre- or post-contract
compliance audits and reviews. Our Group also makes useof any results of such assessments to strengthen our compliance program. No instances of non-compliance with laws
and regulations occurred in 2022.
‣ GRI 2-27

51

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Responsible
Marketing Practices
Committed to Responsible Advertising

Industry-Specific Marketing in the Healthcare BusinessOur main business involves marketing and distributing products sourced from manufacturers. Many of our products areimported and require local customization before they are fit
for sale. We engage in significant marketing and advertisingand sizable relabeling activities under our own brand. Growing public awareness and new policy initiatives addressing
transparency have increased the demand for accurate andcomplete product information, so this topic is highly relevant to DKSH’s business model and brand reputation.
The marketing of our products can pose inherent risks without proper management or relevant and necessary productinformation. There is always a risk that marketing promises,
incomplete product information, and labelling may prevent
consumers from making informed decisions. At DKSH, wewant to avoid this potential negative impact on consumers,
so we have made responsible marketing a key practice.
Adapting and customizing products to meet regulatory
requirements, including product labeling, is an important DKSH service offering. Our regulatory affairs teams inthe various Business Units are responsible for establishing relevant standard operating procedures and for monitoring compliance, with assistance from our quality assurance teams. Business Unit Healthcare, which faces especiallystringent regulations, performs customization work in accordance with the Good Manufacturing Practice (GMP). Business Unit Performance Materials implements and audits
against the strict requirements for classification, labeling,
and packaging of the Globally Harmonized System (GHS).
When marketing our Own Brands products, our Regulatory
Affairs teams ensure that we adhere to applicable laws. We
observe guidelines on responsible marketing published by
the relevant industry bodies for all products distributed byBusiness Units Consumer Goods and Healthcare. Policies,
procedures, and controls are in place and supported bytraining activities to ensure that the marketing of our products meets our standards and expectations. All our regulatory affairs specialists have the required professional training and qualifications to perform their work in accordancewith applicable regulations and internal standards.
DKSH carefully monitors and validates relevant productdata from clients on an ongoing basis and takes corrective
actions where appropriate. Any complaints about marketingand labeling are addressed by the relevant Business Unit.
In 2022, DKSH recorded two incidents of non-compliancewith regulations concerning product and service information and labeling. Both incidents resulted in a warning.
With regard to regulations concerning marketing communications, DKSH recorded five incidents of non-compliance,
whereby two incidents resulted in a warning and three incidents resulted in a penalty of insignificant amount.
‣ GRI 417-2, GRI 417-3

In many jurisdictions, advertising and promoting healthcare products are highly regulated, often limited, or evendisallowed. Many products are prescribed or dispensed byhealthcare professionals, or require professional expertisefor their application. Various segments within the healthcare industry (specifically for prescription drugs and medical devices) and in the food sector (e.g. infant nutrition) haveadopted codes of ethics advocating responsible marketingof their products. DKSH adheres to these standards throughmembership of the respective industry associations (e.g.
local associations of the International Federation of Pharmaceutical Manufacturers and Associations [IEPMA], Asia
Pacific Medical Technology Association [APACMed]) and by
operating management programs to ensure compliance by
employees and service providers.
Preventing Anti-Competitive Behavior
Our Policy on Fair Competition explains the basic provisionsof anti-trust and competition law. This policy is designed to
improve managers’ and employees’ awareness of the basic
rules of competition law and the implications that theserules have for commercial decisions.
Contracts with business partners are thoroughly and diligently vetted by the legal department, including a review
of potential issues related to anti-trust and competition law.
Similarly, the legal department is in regular contact withbusiness teams to explain aspects related to these issues.
This step is needed to ensure that our day-to-day operations
comply with rules to prevent trusts and unfair competition.
In 2022, DKSH was not identified as a participant in legal actions related to anti-competitive behavior or violations ofanti-trust and monopoly legislation.
‣ GRI 2-27, GRI 206-1

52

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Responsible Tax Practices
Taking a Responsible Approach to Taxes
As a multinational company, we drive sustainable economic
growth in markets around the world through the economic
value we create. In turn, this has a positive impact on our
stakeholders, such as providing returns and dividends forour shareholders, salaries for our employees, and tax payments to local governments.
Our company is committed to complying with tax laws in all
markets where we operate and to paying taxes in the markets where the revenue is generated. Intra-group transactions are carried out under market conditions and are supported by transfer pricing documentation. All inter-grouptransactions are subject to the “arm’s length” principle described in the Organization for Economic Co-operation andDevelopment’s (OECD) Transfer Pricing Guidelines. We arecooperative and transparent in our interactions with local
tax authorities and strive to achieve a swift resolution totax matters.
DKSH has a Group Tax Policy in place, which is reviewed annually by the Chief Financial Officer (CFO) and Head of Tax.
The policy is approved by the Board of Directors. Any proposed amendments are subject to the Board’s approval. The
Group Tax Policy is aligned with the Group’s Code of Conduct and is applicable to all tax and finance professionals
who deal with tax matters within the Group.
The policy seeks to support our strategy and ensures that
we pay the right amount of taxes which are legally due in thejurisdictions where our business is conducted. In particular,
the Group Tax Policy sets out five core guidelines and ensures compliance by stipulating our tax compliance process
flow and the obligations of each entity within the Group. The
tax policy is available internally on our finance portal to ensure that all employees have access to it.
Tax Risks
We take tax risks very seriously, so we have put in place
processes to manage and monitor these risks. The GroupTax Policy is aligned with the Group’s wider risk and control
framework. Tax matters requiring significant judgements or
decisions are escalated to the Country Management Teams
and/or the Senior Executive Team.
Apart from engaging in regular communication with Country Finance Managers, Group Tax prepares a monthly tax report for the CFO and senior management. This report updates the recording and tracking of reported tax risks and allforms of tax fluxes and losses, payments, etc. The monthly
report prepared by Group Tax serves as a management tool
for oversight and control in regard to the Group’s tax affairs.
We have also created a tax dashboard, which tracks the corporate tax return submission compliance rate and tax audit
status. The dashboard also shares transfer pricing benchmarking data within the Group and is accessible 24/7.

Employees and external parties can report concerns about
unethical or unlawful tax-related behavior using the Integrity Line, our online reporting platform. More informationon this channel can be found in the Anti-Corruption chapter.
‣ GRI 207-1, GRI 207-2, GRI 207-3

Data Privacy and Protection
Keeping Everyone’s Data Safe
Data theft, leakage, and security have become genuine
concerns for all companies in today’s digital and interconnected world. Our business operations inevitably handle
large amounts of data related to products, services, customers, and business partners. Moreover, DKSH may needto collect personal data about employees, contractors, andothers. Since we serve clients who are also competitors, ensuring confidentiality is critical.
Bearing all of this in mind, we have taken action to prevent
data loss in order to reduce the potential negative impactthat this might have on companies and individuals and their
human rights. For instance, data privacy and protection arefirmly enshrined in our corporate strategy.
As stated in our Code of Conduct, we are fully committed toprocessing and protecting personal data with due care. We
pledge to comply with applicable data protection laws andto adhere to our principle of protecting confidentiality. Our
information security program and cyber security strategy
are endorsed and supported by the Executive Committee
and the Board of Directors, under the responsibility of theGroup’s Chief Information Officer.
We also appointed a Global Data Privacy Lead in December 2022. This role’s responsibilities include monitoring data
privacy compliance within DKSH entities and ensuring thatall data processing activities adhere to local laws and regulations. The Global Data Privacy Lead is also in charge ofdelivering training and following up on completion rates.
Conducting data privacy impact assessments for new products, services, and goods is another task under this person’s
remit.
Our strategy focuses on taking countermeasures to prevent
cyber threats, developing an organization-wide information
security maturity model, and running group-wide cyber security awareness programs.
Under this strategy, we have an IT Security Policy in place
and a dedicated global Information Security team available
via a 24/7 hotline to deal with urgent security matters.

53

About

Strategy and Governance

Our People

We train our staff on various topics relating to information security. In 2022, about 17,400 employees (2021: about
17,300 employees) completed the security awareness online program; this corresponds to a completion rate of 96 %.
DKSH’s main digital & IT hub is in Malaysia. Each market
has its own local IT team responsible for in-country technology needs and support. Regular group-wide cyber security awareness training, digital & IT newsletters, and ad hoc
digital & IT newsflashes help maintain awareness of sensitive topics across all markets.
Our Corporate Shared Services Center SAP infrastructure on information security management has been ISO
27001:2013-certified since 2018. Since gaining this certification, we have conducted several surveillance audits
to ensure process adherence. The latest successful ISO
27001:2013 surveillance audit took place in September 2022.
Our quality assurance team ensures that the required standards are met on an ongoing basis.
Our digital and IT systems undergo regular independent audits by external stakeholders and the Group Internal Audit
team. Additionally, the Group IT Security team performs
controls review on IT installations on a regular basis. Our
business continuity and contingency plans and incident response procedures are tested twice yearly.
As in previous years, DKSH received no complaints related
to data breaches of customer privacy and loss of customer
data from outside parties or regulatory bodies in 2022. Similarly, DKSH is not aware of any identified leaks, thefts, orlosses of customer data.
‣ GRI 2-27, GRI 418-1

Our Business

Our Outcome

Appendix

54

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Our Outcome

We deliver a wide variety of products and services that ­enrichpeople’s lives. Our company empowers people by­supplying them with goods that are safe and delivered with­integrity. Moreover, we strive to support local communities
in the m­ arkets we operate by providing employment­opportunities and engaging in charitable projects.

55

About

Strategy and Governance

Our People

Our Outcome

Our Business

Appendix

Local Community Development
Our Impacts

Our company has a positive impact
on local communities and empowers
people to exercise their humanrights by providing employment
and development opportunities
and supporting the underprivileged
through local charitable projects.
We also know that our business activities may have a negative ­impact on
local people, for instance in the formof impacts on human health andthe environment in local communities.

Local Hiring and Skills Development
One way that we help local communities is by employing
and empowering people. We believe that sharing businesspractices across cultures contributes to local skills and economic development. Our diverse teams represent various
cultures and backgrounds and help DKSH serve as a bridge
between international clients and local customers. To thisend, we also hire a considerable number of local sales representatives, merchandisers, and warehouse workers acrossthe markets where we operate.
In 2022, DKSH employed around 32,600 employees, covering 91 nationalities, meaning that we speak the language
and understand the culture of our business partners in the
37 markets where we operate. In 2022, 78 % of our market
leadership teams36 were hired locally37. Within our markets
with significant operations38, 74 % of all senior39 managers
were hired from the host market (2021: 68 %).

Percentage ofsenior managers hiredfrom host market

26 %

74 %

LocalsPercentage ofmarket leadership teams
hired locally

22 %

78 %

Non-locals‣ GRI 202-2
We also offer employment opportunities for people livingwith disabilities who struggle to enter the workplace. For
example, DKSH employs ten hearing-impaired people fromthe local community at the Famous Amos cookie outlets in
Malaysia.

36 Market leadership teams refers to heads of each Business Unit and Function
within a market.
37 Local refers to employees either born or who have the legal right to reside­indefinitely (such as naturalized citizens or permanent visa holders) in the samegeographic market as the operation.
38 DKSH defines significant operations as all markets with more than 500 ­employees.
This includes the 11 markets of Australia, Cambodia, Hong Kong, Indonesia,­Malaysia, Myanmar, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.
39 Senior refers to managers in corporate, regional, or local management roles.

56

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Access to Food, Medicines, and Healthcare
We are aware of our role in supply chains and our responsibility when supplying and providing products, such as
live-saving drugs, to local markets. Therefore, BusinessContinuity Planning (BCP) is an important part of our risk
management process. BCP helps us prepare for potential
risks of disruption and to ensure continuous maintenanceof our business activities. In 2022, we achieved our target of
100 % of our sites having a Business Continuity Plan. We willcontinue to improve the robustness of our Business Continuity Planning in 2023.
In keeping with our Sustainability Strategy’s objective to“Make a Positive Local Impact”, our teams in the markets engage in individual projects to improve access to medicinesand healthcare within their local area of reach. For example,
we choose to donate rather than destroy products and supply life-saving products to the best of our ability.
In 2022, Business Unit Consumer Goods reduced 132 metric tons of product waste by donating good-quality surplus
products to societies in need. In addition, we have not only
delivered millions of doses of COVID-19 vaccines across Asia
Pacific, but in 2021, we also donated medical test kits andraised awareness of essential medicines and food supplements in mitigating COVID-19 risks and related symptoms.
In Cambodia, Myanmar, and Vietnam, our local teams organized a blood donation drive and offered blood glucose testing at offices and distribution centers.
DKSH Patient Solutions
Along with providing access to food, medicines, and healthcare, we also offer patient support programs with both online and offline capabilities to further enhance the lives ofour patients. Today, we are solving issues surrounding access, adherence, and convenience while ensuring that thepatient is put at the center of care. Our solutions havehelped increase access to high-quality healthcare, educate
and guide patients through their care journey, and increase
reach through rural regions.
As of 2022, our solutions had impacted more than 30,000
specialty care patients across eight markets. Taking a holistic approach, we work with over 3,000 healthcare providers that include, but are not limited to, clinical oncologists,
nurses, pharmacists, and caregivers.
“Buy X Get Y Free” (BXGYF) component is one of the manysolutions we offer. We manage these programs that allow
patients to buy X boxes (of medication) and get Y free attheir next visit. This helps make treatment more affordable,
without compromising the level of care received.
Local Community Impacts
Along with improving health and well-being, we want to reduce any negative social and environmental impacts that wehave on local communities.

Environmental impacts can include pollution or emissions.
As a countermeasure, in 2022, we conducted an environmental risk assessment in six markets and at 11 sites to investigate their impacts on their immediate surroundings.
For more information on the environmental risk assessment, please see the Pollution Prevention chapter.
Equally, we strive to manage social impacts on communities. One important area here is safe driving, because weand our contractors travel a lot in local traffic as part of ourbusiness activities, e.g. when visiting customers or delivering orders. In 2022, we continued our efforts to promoteroad safety by rolling out campaigns across markets suchas Thailand and Malaysia.
Poor infrastructure makes road safety especially challenging in Thailand. With this in mind, DKSH has taken a variety
of measures to improve driver safety. We already map thenumber of accidents and identify why incidents occured in
the first place. In 2022, more than half of the 77 traffic accidents involving DKSH employees or contractors occured
outside our premises, with the remainder occurring on-site.
DKSH Thailand strives to further reduce this number by improving safety equipment in vehicles and driving skills andencouraging a culture of safe driving. Almost 900 people
took part in 22 defensive driving courses in 2022. These efforts are already bearing fruit: The number of fatalities andserious or major injuries was cut by 75 % to one in 2022. In
2023, DKSH Thailand aims to offer all drivers safety training and have a 100 % accident and incident reporting rate.
‣ GRI 203-1, GRI 203-2, GRI 413-1, GRI 413-2
Local Charitable Support
To give back and to create healthier and happier communities, we also engage in charitable projects and selectedsponsorship programs. However, as stated in our Code of
Conduct, DKSH does not engage in political processes or donate to political causes.
During 2022, we supported 76 charitable projects as partof our commitment to the local communities where we operate. Charitable activities took place in all our significant
markets.
We have supported Right To Play in our major Thai market
for more than 16 years. This global non-profit organization
uses the transformative power of play to educate and empower children facing adversity. In 2020, we expanded ourpartnership by teaming up with the Liverpool FC Foundation for a three-year program comprising sport and playbased sessions to improve the life skills of 2,000 children
and youths as well as to increase community and social engagement.
Our partnership with the Liverpool FC Foundation and Right
To Play continued with a football clinic for disadvantaged
youth held at an international school in Nonthaburi, Thailand. Together with Right To Play, we have also supported arehabilitation project to help juveniles re-enter society andmake a fresh start after they leave the juvenile vocational
training centers.

57

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

Product Quality and Safety
Our Impacts

Our business is built on trust andintegrity: Our clients entrust us withmarketing and distributing theirproducts and expect us to preserve
the quality and safety of their goods
while under our care and custody.
We know that product integrity andsupply issues have different positive
and negative impacts on people,
including their human rights, and on
society as a whole. We have positive
impacts by combatting the spreadof counterfeit products; thisprotects people and society against
harmful effects. However, ­potential
negative impacts may exist if wetrade in products with health risks
to consumers, such as medicines withdangerous side effects.

Attaining the Highest Standards
Across all product categories, we have quality management systems in place to ensure we meet the high standards necessary to safeguard the health and safety of customers, consumers, and patients. This includes assurancesthat all our products originate from authentic manufacturing processes, avoiding potential safety issues associatedwith counterfeit products.
Our management approach is tailored to the different Business Units and product categories we handle and the regulations governing them. Products in the healthcare sector
must prioritize patient safety, meet stringent quality standards specified by clients and regulators, and comply withinternational guidelines (e.g. from the World Health Organization, the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use,and the Pharmaceutical Inspection Co-operation Scheme).
When distributing and manufacturing our products, we observe the Good Manufacturing Practice (GMP) and Good
Distribution Practice (GDP) standards. All our Healthcare
distribution facilities are approved by respective local healthauthorities with the appropriate internationally recognized
quality management system certification (e.g. ISO 9001 andISO 13485). Our regulatory affairs specialists handle any issues related to product safety in accordance with stringent
pharmacovigilance procedures.
Food safety is another significant concern that we address
through quality management procedures, whether for finished goods distributed by our Consumer Goods businessor food ingredients marketed by our Performance Materials business. Our quality assurance and regulatory affairs
teams ensure that our products and operations comply withapplicable regulations set by the respective food and drug
administrations in our markets.
The handling of chemicals poses a different set of challenges
that we manage through stringent safety procedures basedon applicable standards, including ISO 9000, the Classification, Labeling and Packaging (CLP) Regulation, and our own
Standard Operating Procedures (SOPs), as well as DKSH’s
Health, Safety and Environment (HSE) policy. These procedures are enhanced by a new HSE management system andnew guidelines for managing hazardous chemicals and dangerous goods, developed in 2020 and enacted in 2021.

58

About

Strategy and Governance

Our People

Our Business Unit Technology focuses on safety proceduresfor the operation of machinery and equipment by our customers. Where applicable, our products are tested before
delivery. Our service offering also includes installation, commissioning, and training to ensure proper and safe operation. All our service engineers are trained by original equipment manufacturers. Our clients or their appointed auditors
frequently audit our operations to ensure that the storage
and handling of products meet their expected standards.
Due to the sensitivity of the products, audits are of particular importance in the healthcare business. In 2022, clients of
our Business Unit Healthcare carried out 61 audits throughthe Business Unit’s 13 affiliates (compared to 87 audits in2021). We recorded 180 mostly minor incidents of non-compliance and 0 critical incidents of non-compliance concerning the health and safety impacts of products and services.
In 2022, authorities, certifying bodies, customers, and ­clients
audited Business Unit Performance Materials (78 ­audits),
and this Business Unit in turn audited selected goods suppliers (32 audits). In 110 audits performed, three critical findings were identified in two audits in Indonesia (one Government audit with one finding and one customer audit with
two findings); deficiencies were successfully mitigated andclosed in 2022.
Any deviation from applicable standards flagged by reviews, audits, or complaints are promptly reported and addressed. We guarantee a robust Corrective and Preventive
Action (CAPA) process to mitigate any findings in accordancewith applicable standards. This process addresses any audit
findings and helps us to engage with our stakeholders in ameaningful way to resolve any issues. In addition, productrecall procedures are in place, and DKSH constructively cooperates with all stakeholders should recalls occur.
As well as meeting the requirements of our clients and customers, we also strive to comply with the legal requirements
relating to the health and safety of our products. In 2022,
DKSH recorded two incidents of non-compliance with regulations concerning the health and safety impacts of products and services, which resulted in a warning, and one incident of non-compliance with a voluntary code on healthand safety impacts.
‣ GRI 2-27, GRI 416-2

Our Business

Our Outcome

Appendix

59

About

Strategy and GovernanceAppendix

Our People

Our Business

Our Outcome

Appendix

60

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

GRI Content Index
DKSH has reported the information cited in this GRI ­content
index for the period 1 January 2022 – 3­ 1 December 2022with reference to the GRI Standards. The information in thisreport has been compiled using GRI 1: Foundation 2021.
If you have any feedback or need further information on oursustainability approach, please contact
sustainability@dksh.com
All documents are available at:www.dksh.com/global-en/home/about-us/sustainability

GRI standard

Disclosure

Location

General ­Disclosures
GRI 2: General
Disclosures 2021

2-1  Organizational details

Annual Report 2022, pp. 10 ff., 118 ff.

2-2  Entities included in the organization’s sustainability reporting

This Sustainability Report covers all entities included in
DKSH’s financial reporting (Annual Report 2022,
pp. 118-120). For entities acquired in 2022, the integrationof management approaches and collection of non-­financial
data points may not have progressed to completion on allaccounts, whereas gaps in the overall context of reportingare considered insignificant.

2-3  Reporting period, frequency andcontact point

The Sustainability Report and the A­ nnual Report refer tothe reporting period 1 January 2022 – 31 December 2022.
Our sustainability reporting is updated on a yearly basis.
Publication date of this Sustainability R­ eport: May 16, 2023
Point of contact: sustainability@dksh.com

2-4  Restatements of information

No restatement

2-5  E xternal assurance

Assurance report, pp. 68

2-6  Activities, value chain, and otherbusiness relationships

Our Purpose and Business Model, p. 6
Responsible Supply Chain, p. 45
Corporate Brochure 2023, pp. 14-26, 38

2-7  Employees

Employee Attraction, Satisfaction, and Retention, p. 30

2-9  Governance structure and­composition

Annual Report 2022, pp. 13-24
Sustainability Governance and Risk Management, p. 21

2-10 Nomination and selection of thehighest governance body

Annual Report 2022, p. 18

2-11 Chair of the highest governancebody

Annual Report 2022, p. 18

2-12 Role of the highest governance body in overseeing the­management of impacts

Sustainability Governance and Risk Management, p. 21
Annual Report 2022, p. 23

61

About

Strategy and Governance

GRI standard

Our People

Disclosure

Our Business

Our Outcome

Appendix

Location

General ­Disclosures
GRI 2: General
Disclosures 2021
(continued)

2-13 Delegation of responsibility for
managing impacts

Sustainability Governance and Risk Management, p. 21

2-14 Role of the highest governancebody in sustainability reporting

Sustainability Governance and Risk Management, p. 21

2-15 Conflicts of interest

Annual Report 2022, p. 18

2-16 Communication of critical­concerns

Sustainability Governance and Risk Management, p. 21
Ethics and Integrity: Anti-corruption, p. 50

2-19 Remuneration policies

Annual Report 2022, pp. 34 ff.
Sustainability Governance and Risk Management, p. 20

2-20 Process to determine­remuneration

Sustainability Governance and Risk Management, p. 20

2-22 Statement on sustainable­development strategy

Welcome from the CEO, p. 2

2-23 Policy commitments

Labor Practices and Human Rights, p. 31
Responsible Supply Chain, p. 46

2-24 Embedding policy commitments

Sustainability Strategy, p. 14
Responsible Supply Chain, p. 46

2-25 Processes to remediate negative
impacts

Ethics and Integrity: Anti-corruption, p. 50
We describe our impacts and the p­ rocesses to remediate our impacts for all our material topics. Topic-­specific­information can be found in the chapters Our People,
Our B­ usiness, and Our Outcome.

2-26 Mechanisms for seeking advice
and raising concerns

Employee Attraction, Satisfaction, and Retention, p. 27
Ethics and Integrity: Anti-corruption, p. 50

2-27 Compliance with laws and­regulations

Ethics and Integrity: Anti-corruption, p. 50
Ethics and Integrity: Responsible Marketing Practices, p. 51
Ethics and Integrity: Data Privacy and Protection, p. 53
Product Quality and Safety, p. 58

2-28 Membership associations

Sustainability Governance and Risk Management, p. 22

2-29 Approach to stakeholder­engagement

Stakeholder Engagement and Materiality Assessment, p. 122-30 Collective bargaining­agreements

Labor Practices and Human Rights, p. 31

62

About

Strategy and Governance

GRI standard

Our People

Our Business

Our Outcome

Appendix

Disclosure

Location

3-1   Process to determine material
topicsStakeholder Engagement and Materiality Assessment, p. 12

3-2   List of material topics

Stakeholder Engagement and Materiality Assessment, p. 13

GRI 3: Material
topics 2021

3-3   Management of material­topics

Local Community Development, pp. 55 ff.

GRI 202: Market
Presence (2016)

202-2 Proportion of senior­management hired from thelocal community

Local Community Development, p. 55

Material topics
GRI 3: Material
topicsMarket ­presence

Indirect economic impacts
GRI 3: Material
topics 2021

3-3   Management of material
topicsLocal Community Development, pp. 55 ff.

GRI 203: Indirect
economic
impacts (2016)

203-1 Infrastructure investments andservices supported

Local Community Development, p. 56

203-2 Significant indirect economic
impacts

Local Community Development, p. 56

Procurement practices
GRI 3: Material
topics 2021

3-3   Management of material­topics

Responsible Supply Chain, pp. 45 ff.

GRI 204:­Procurement
practices (2016)

204-1 Proportion of spending on
local suppliers

Responsible Supply Chain, p. 45

GRI 3: Material
topics 2021

3-3   Management of material­topics

Ethics and Integrity: Anti-corruption, pp. 47 ff.

GRI 205: Anticorruption (2016)

205-1 Operations assessed for risks
related to corruption

Ethics and Integrity: Anti-corruption, p. 48

205-2 Communication and training
about anti-corruption policies
and procedures

Ethics and Integrity: Anti-corruption, p. 49

205-3 Confirmed incidents of­corruption and actions taken

Ethics and Integrity: Anti-corruption, p. 50

Anti-corruption

63

About

Strategy and Governance

GRI standard

Our People

Disclosure

Our Business

Our Outcome

Appendix

Location

Anti-competitive behaviour
GRI 3: Material
topics 2021

3-3   Management of material­topics

Ethics and Integrity: Responsible Marketing Practices,
pp. 51 ff.

GRI 206: Anticompetitive­behaviour (2016)

206-1 Legal actions for anti-com­
petitive behavior, anti-trust,and monopoly practices

Ethics and Integrity: Responsible Marketing Practices, p. 51

GRI 3: Material
topics 2021

3-3   Management of material­topics

Ethics and Integrity: Responsible Tax Practices, pp. 52 ff.

GRI 207:
Tax (2019)

207-1 Approach to tax

Ethics and Integrity: Responsible Tax Practices, p. 52

207-2 Tax governance, control, andrisk management

Ethics and Integrity: Responsible Tax Practices, p. 52

207-3 S takeholder engagement
and management of concerns
related to tax

Ethics and Integrity: Responsible Tax Practices, p. 52

GRI 3: Material
topics 2021

3-3   Management of material­topics

Environmental Responsibility: Climate Change Mitigation,
pp. 34 ff.

GRI 302:
Energy (2016)

302-1 Energy consumption within theorganization

Environmental Responsibility: Climate Change Mitigation,
p. 36, p. 38

302-3 Energy intensity

Environmental Responsibility: Climate Change Mitigation,
p. 36

GRI 3: Material
topics 2021

3-3   Management of material­topics

Environmental Responsibility: Climate Change Mitigation,
pp. 34 ff.

GRI 305:­Emissions (2016)305-1 Direct (Scope 1)
GHG emissions

Environmental Responsibility: Climate Change Mitigation,
p. 35, p. 38

305-2 Energy indirect (Scope 2)
GHG emissions

Environmental Responsibility: Climate Change Mitigation,
p. 35, p. 38

305-3 Other indirect (Scope 3)
GHG emissions

Environmental Responsibility: Climate Change Mitigation,
p. 35, p. 38

305-4 GHG emissions intensity

Environmental Responsibility: Climate Change Mitigation,
p. 36

Tax

EnergyEmissions

64

About

Strategy and Governance

GRI standard

Our People

Our Business

Our Outcome

Appendix

Disclosure

Location

GRI 3: Material
topics 2021

3-3   Management of material­topics

Environmental Responsibility: Resource Efficiency, pp. 39 ff.

GRI 306:
Waste (2020)306-1 Waste generation and significant waste-related impacts

Environmental Responsibility: Resource Efficiency, p. 39

306-2 Management of significant
waste-related impacts

Environmental Responsibility: Resource Efficiency, p. 39

306-3 Waste generated

Environmental Responsibility: Resource Efficiency, p. 39

GRI 3: Material
topics 2021

3-3   Management of material­topics

Employee Attraction, Satisfaction, and Retention, pp. 27 ff.

GRI 401:­Employment(2016)

401-1 New employee hires and employee turnover

Employee Attraction, Satisfaction, and Retention, p. 29

401-2 Benefits provided to full-time
employees that are not provided to temporary or parttime employees

Employee Attraction, Satisfaction, and Retention, p. 29

Waste

Employment

Occupational health and safety
GRI 3: Material
topics 2021

3-3   Management of material­topics

Health, Safety, and Well-being, pp. 24 ff.

GRI 403:
Occupational
health and safety(2018)

403-1 Occupational health and safety
management system

Health, Safety, and Well-being, p. 24

403-2 Hazard identification, risk assessment, and incident investigation

Health, Safety, and Well-being, p. 25

403-3 Occupational health services

Health, Safety, and Well-being, p. 25

403-4 Worker participation, consultation, and communication on
occupational health and safety

Health, Safety, and Well-being, p. 25

403-5 Worker training on occupational health and safety

Health, Safety, and Well-being, p. 25

403-7 Prevention and mitigation ofoccupational health and safety
impacts directly linked by business relationships

Health, Safety, and Well-being, pp. 24-25

65

About

Strategy and Governance

Our People

Our Business

Our Outcome

GRI standard

Disclosure

Location

GRI 403:
Occupational
health and safety(2018)(continued)

403-8 Workers covered by an occupational health and safety management system

Health, Safety, and Well-being, p. 24

403-9 Work-related injuries

Health, Safety, and Well-being, p. 26

AppendixTraining and education
GRI 3: Material
topics 2021

3-3   Management of material­topics

Employee Attraction, Satisfaction, and Retention, pp. 27 ff.

GRI 404:
Training and­education (2016)404-1 Average hours of training peryear per employee

Employee Attraction, Satisfaction, and Retention, p. 28404-2 Programs for upgrading­employee skills and transition­assistance programs

Employee Attraction, Satisfaction, and Retention, p. 28

404-3 Percentage of employees­receiving regular performanceand career development­reviews

Employee Attraction, Satisfaction, and Retention, p. 28

Diversity and equal opportunity
GRI 3: Material
topics 2021

3-3   Management of material­topics

Labor Practices and Human Rights, pp. 31 ff.

GRI 405:­Diversity andequal opportunity (2016)405-1 Diversity of governance bodies
and employees

Annual Report 2022, pp. 14 ff.
Employee Attraction, Satisfaction, and Retention, p. 30
Labor Practices and Human Rights, p. 32

GRI 3: Material
topics 2021

3-3   Management of material­topics

Labor Practices and Human Rights, pp. 31 ff.

GRI 406:
Non-discrimi­
nation (2016)406-1 Incidents of discrimination andcorrective actions taken

Labor Practices and Human Rights, p. 32

Non-discrimination

66

About

Strategy and Governance

GRI standard

Our People

Disclosure

Our Business

Our Outcome

Appendix

Location

Freedom of association and collective bargaining
GRI 3: Material
topics 2021

3-3   Management of material­topics

Labor Practices and Human Rights, pp. 31 ff.
Responsible Supply Chain, pp. 45 ff.

GRI 407:­Freedom of­association andcollective bargaining (2016)407-1 Operations and suppliers inwhich the right to freedomof association and collective
bargaining may be at risk

Labor Practices and Human Rights, p. 32
Responsible Supply Chain, p. 46

GRI 3: Material
topics 2021

3-3   Management of material­topics

Labor Practices and Human Rights, pp. 31 ff.
Responsible Supply Chain, pp. 45 ff.

GRI 408:
Child labour(2016)

408-1 Operations and suppliers at
significant risk for incidents ofchild labor

Labor Practices and Human Rights, p. 32
Responsible Supply Chain, p. 46

Child labour

Forced or compulsory labour
GRI 3: Material
topics 2021

3-3   Management of material­topics

Labor Practices and Human Rights, pp. 31 ff.
Responsible Supply Chain, pp. 45 ff.

GRI 409: Forced
or compulsory­labour (2016)409-1 Operations and suppliers at
significant risk for incidents offorced or compulsory labor

Labor Practices and Human Rights, pp. 31 ff.
Responsible Supply Chain, p. 46

GRI 3: Material
topics 2021

3-3   Management of material­topics

Local Community Development, pp. 55 ff.

GRI 413: Local
communities(2016)

413-1 Operations with local community engagement, impact assessments, and development
programs

Environmental Responsibility: Pollution Prevention, p. 38
Local Community Development, p. 56

413-2 Operations with significant actual and potential negative impacts on local communities

Environmental Responsibility: Pollution Prevention, p. 38
Local Community Development, p. 56

Local communities

67

About

Strategy and Governance

GRI standard

Our People

Disclosure

Our Business

Our Outcome

Appendix

Location

Supplier Social Assessment
GRI 3: Material
topics 2021

3-3   Management of material­topics

Responsible Supply Chain, pp. 45 ff.

GRI 414: SupplierSocial Assessment 2016414-1 New suppliers that werescreened using social criteria

Responsible Supply Chain, p. 46

414-2 Negative social impacts in the
supply chain and actions taken

Responsible Supply Chain, p. 46

Customer health and safety
GRI 3: Material
topics 2021

3-3   Management of material­topics

Product Quality and Safety, pp. 57 ff.

GRI 416:­Customer healthand safety (2016)416-2 Incidents of non-complianceconcerning the health andsafety impacts of products andservices

Product Quality and Safety, p. 58

Marketing and labeling
GRI 3: Material
topics 2021

3-3   Management of material­topics

Ethics and Integrity: Responsible Marketing Practices,
pp. 51 ff.

GRI 417:
Marketing andlabeling (2016)417-2 Incidents of non-complianceconcerning product and service
information and labeling

Ethics and Integrity: Responsible Marketing Practices, p. 51

417-3 Incidents of non- ­complianceconcerning marketing­communications

Ethics and Integrity: Responsible Marketing Practices, p. 51

GRI 3: Material
topics 2021

3-3   Management of material­topics

Ethics and Integrity: Data Privacy and Protection, pp. 52 ff.

GRI 418:­Customer­privacy (2016)418-1 Substantiated complaints­concerning breaches of­customer privacy and lossesof customer data

Ethics and Integrity: Data Privacy and Protection, p. 53

Customer privacy

68

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

VERIFICATION STATEMENT
Verification Statement

The inventory of Greenhouse Gas emissions in the period 01/01/2022 – 31/12/2022 for

DKSH Holding AG

Wiesenstrasse 8, CH-8008 Zurich
has been verified in accordance with ISAE 3000 as meeting the requirements of

WRI/WBCSD GHG Protocol – A Corporate Accounting andReporting Standard
To represent a total amount of:

5,742 t CO2e (Scope 1 emissions)
56,944 t CO2e (Scope 2; location-based emissions for electricity)
27,877 t CO2e (Scope 2; market-based emissions for electricity)
62,686 t CO2e (Scope 1+2; Scope 2 location-based emissions for electricity)
33,619 t CO2e (Scope 1+2; Scope 2 market-based emissions for electricity)
76,613 t CO2e (Scope 3 emissions)
FOR THE FOLLOWING ACTVITIES
Logistic and office services of DKSH worldwide (Scope 1+2) and for some regions (Scope 3).
SCOPE
SGS has been contracted by DKSH Holding AG (hereinafter referred to as “DKSH”) for the verification of direct and indirect
carbon dioxide (CO2) equivalent emissions as provided by DKSH as displayed in their GHG Assertion in the form of
Sustainability Report 2022. (https://www.dksh.com/global-en/home/about-us/sustainability).
CONTENTThe management of DKSH is responsible for the organization’s GHG information system, the development and maintenance ofrecords and reporting procedures in accordance with that system, including the calculation and determination of GHG emissions
information and the reported GHG emissions.
It is SGS’ responsibility to express an independent GHG verification opinion on the emissions as provided in the DKSH GHG
assertion for the period 01/01/2022 – 31/12/2022.
SGS conducted a third-party verification following the requirements of ISAE 3000 of the provided CO2 equivalent assertion in
February to April 2023. The assessment included a desk review at the headquarter and remote interviews with key locations.
The verification was based on the verification scope, objectives and criteria as agreed between DKSH and SGS on 31/08/2021.
LEVEL OF ASSURANCE
The level of assurance agreed is that of limited assurance for Scope 1, 2 and 3 emissions.
SCOPE
DKSH has commissioned an independent verification by SGS of reported CO2 equivalent emissions arising from their activities,
to establish conformance with the requirements of the “GHG Protocol Company Accounting and Reporting Standard” within thescope of the verification as outlined below. Data and information supporting the CO2 equivalent assertion were historical innature and proven by evidence.
STATEMENT OF INDEPENDENCE
The SGS Group of companies is the world leader in inspection, testing and verification, operating in more than 140 countries
and providing services including management systems and service certification; quality, environmental, social and ethicalauditing and training; environmental, social and sustainability report assurance. Société Générale de Surveillance SA affirm our
independence from DKSH being free from bias and conflicts of interest with the organisation, its subsidiaries and stakeholders.

GP5008 Issue 1

69

About

Strategy and Governance

Our People

Our Business

Our Outcome

Appendix

This engagement covers verification of emissions from anthropogenic sources of greenhouse gases included within theorganization’s boundary and meets the requirements of ISAE 3000.
The assertion of DKSH emissions of greenhouse gases follows the methodological approach of the greenhouse gas protocol.
This approach includes the following:• organizational boundary was established following the operational control approach.
• Activities: Infrastructure for logistic services• Location/boundary of the activities: worldwide• Physical infrastructure, activities, technologies and processes of the organization: warehouse, office andadministration, transportation• GHG sources, sinks and/or reservoirs included:•
Scope 1 - stationary combustion from emergency generators, mobile combustion of own fleet, fugitive
emissions of cooling agents;•
Scope 2 – purchased electricity;•
Scope 3 – emissions related to fuel consumption in connection with logistics activities by outsourced externaltransportation service providers, for nine major markets, accounting for more than 85% of DKSH’s total
net sales; Emissions from air travel for business purposes by all employees worldwide• Types of GHGs included: CO2, N2O, CH4 and HFCs.
• GHG information for the following period was verified: 01/01/2022 – 31/12/2022• Intended user of the verification statement: Stakeholders such as national and international NGO’s, customers, generalpublic, regulators and rating agencies.
OBJECTIVE
The purposes of this verification exercise are, by review of objective evidence, to independently review:•
Whether the CO2 equivalent emissions are as declared by the organization’s CO2 equivalent assertion•
That the data reported are accurate, complete, consistent, transparent and free of material error or omission.
CRITERIA
Criteria against which the verification assessment is undertaken are the requirements of WRI/WBCSD GHG Protocol – A
Corporate Accounting and Reporting Standard.
MATERIALITY
The materiality required of the verification was considered by SGS to be below 10% for Scope 1 and Scope 2 emissions, basedon the needs of the intended user of the GHG Assertion.
CONCLUSIONThe GHG information of DKSH for the period 01/01/2022 – 31/12/2022 disclosing Scope 1 and 2 emissions of 62,686 metrictonnes CO2 equivalent (including gross location-based emissions for electricity) were verified by SGS to a limited level ofassurance, consistent with the agreed verification scope, objectives and criteria. A further 76,613 tonnes of CO2 equivalent fromScope 3 sources were verified by SGS to a limited level of assurance, consistent with the agreed verification scope, objectives
and criteria.
Included in the DKSH GHG assertion for the period 01/01/2022 to 31/12/2022, and in addition to scope 2 emissions of 56,944
metric tonnes CO2 equivalent, is a disclosure of emissions of 27’877 metric tonnes CO2 equivalent for scope 2 market-based
emissions. This figure includes purchase of renewable electricity certificates by DKSH. These emissions have been verified by
SGS based on WRI GHG Protocol Scope 2 Guidance.
SGS concludes with limited assurance that there is no evidence to suggest that the presented CO2 equivalent assertion is notmaterially correct and is not a fair representation of the CO2 equivalent data and information.
SUSTAINABILITY
In addition to the GHG information, SGS verified the following information provided in the sustainability report DKSH to a limited
assurance for the period from 01/01/2022 to 31/12/2022:• 31% women in senior leadership positions• 0 cases of fatalities and 0 cases of high-consequence work-related injury (exclude fatalities)
Signed for and on behalf of Société Générale de Surveillance SA, Technoparkstrasse 1, 8005 Zurich, Switzerland

Daniel Aegerter
Lead Auditor

Ingrid Finken
Product Manager Sustainability

Zurich, May 9th, 2023

WWW.SGS.COM

Sustainability Report 2022
Publisher
DKSH Holding Ltd.
P.O. Box 888
Wiesenstrasse 88034 Zurich
Switzerland
Phone +41 44 386 7272
Group Investor & Media Relations, SustainabilityGroup Governance, Risk & Compliancesustainability@dksh.com
Edition: May 2023