2

Sustainability
Report 2021

Delivering Growth – in Asia and Beyond.

2

Welcome from the CEO

Welcome from the CEO“Joining the UN Global Compact
marks the next milestoneunderlining our ongoingcommitment to responsible
business practices.”

In 2021, we made good progress on our Sustainability journey. Our Framework “Our People – Our Partners – Our Planet”
has been further adopted across our organization and we increasingly translated our company value of “Sustainability” into
tangible actions.
Our commitment to “Our People” is exemplified by our purpose of enriching people’s lives. Reporting zero fatalities fromwork-related injuries demonstrates that a safe work environment is a key priority at DKSH. Enabling our people to grow is
one of our focuses and we expanded our training curricula to all employees, achieving a significant increase in training
reach. A key achievement in our diversity program was the increase of the share of women in senior leadership positions
from 27% in 2020 to 29% last year.
Under the “Our Partners” pillar, we continued to improve the resilience of our business to be able to serve our customers
and communities with essential supplies also under adverse conditions. Moreover, we have further strengthened our compliance organization to play our part in maintaining the highest ethical standards in the supply chain.
Under the “Our Planet” pillar, climate change continues to be one of the most important topics. Last year, we reduced ourown greenhouse gas emissions by 40%, achieving our initial reduction target of 35% by 2025 ahead of time. With this, we will
fast-track our ambition to be climate-neutral in our own operations by 2030. As a new interim-target, we aim to reduce ourown GHG emissions by 65% by 2025.
We are also leveraging new business opportunities that advance our Sustainability efforts. For example, in Hong Kong, we
installed charging stations for electric vehicles in a shopping mall as well as a proprietary parking guiding system which reduces fuel consumption and carbon emissions.
Our commitment to Sustainability is further strengthened by our joining the United Nations Global Compact in May 2022.
This is a strong demonstration of our belief that Sustainability is about collaboration – across industries and markets.
Going forward, we will continue to improve our Sustainability performance across all pillars of our Sustainability Framework,
including the focus areas of diversity, responsible procurement, waste management, and green energy.
Let’s keep delivering on our Sustainability value!

Stefan P. Butz
CEO

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Contents

Contents

2

Welcome from the CEO

4

About Us

8

Sustainability at DKSH

26
27

Environment
Environmental Responsibility

32
33
39
40
43

SocialOur People
Local Communities
Responsible Procurement
Occupational Health and Safety

47
48
49
50
54
56
58

Governance
Economic PerformanceMarket Presence
Anti-Corruption
Customer Health and Safety
Marketing and Labeling
Information Security

60

Appendix

66

GRI Standards & Disclosures

72

Assurance ReportAbout Us

11.1 billion48

net sales (2021)

innovation centers

160
distribution centers

Operations in36markets

870
business locations

2,100
clients

2,000
suppliers

530,000
customers

33,100employees

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About UsDKSH Identity

As an international company with over 33,000 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 ourservice offering, andincreasing operational
efficiency.

Our Promise

Delivering Growth –in Asia and Beyond.

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About UsDKSH in Brief

DKSH enriches people’s lives by providing access to goods, services, and insights. United by our vision to be the trusted
partner, we help companies grow.
Delivering life-saving drugs to hospitals, bringing high-quality products to remote villages, installing technology thatraises living and safety standards, and providing new formulations for pharmaceutical, personal care, or food productsthat make life more sustainable. These are just a few examples of how DKSH touches and enriches people’s lives aroundthe clock.
We do this while helping our clients grow by distributing, promoting, and servicing their products and helping ourcustomers grow by providing access to high-quality products, services, and insights.
Learn more at: dksh.com

Our Four Highly Specialized Business Units

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Chapter
About
UsNoto Sans Bold 9 pt

Services We Offer

Sourcing

Marketinsights

Marketingand sales

Distribution
andlogistics

Clients

After-sales
services
Customers

Omni-channel service portfolio
Backflow of information from customers to clients
Blanket market coverage across Asia Pacific

DKSH’s role is to provide companies
with access and expertise to grow inand with Asia. We call this Market Expansion Services.
Our Market Expansion Services are:Comprehensive
Our business partners can choose
from a complete range of specialized
services along the value chain – fromsourcing, market insights, marketingand sales to distribution and logistics
as well as after-sales services.
Customized
Our services are precisely tailored tomeet our clients’ and customers’ exact
needs.

Integrated
Our intelligently integrated and tailor-made services deliver seamless
end-to-end solutions – no matter how
large or small the requirements.
Our Service Philosophy
Our business is about more than simply the exchange and promotion of
goods, but rather taking on a profound responsibility for products andbrand. Our specialists proactively provide strategic advice based on theirexperience, know-how and networks,
gathering data from our hundreds ofthousands of customers and translating it into highly detailed and up-todate market information.

Learn more about the services weoffer at dksh.com/services

Sustainability at DKSH

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Sustainability at DKSH

Sustainability Highlights 2021

Distributed >80 million dosesof COVID-19 vaccines

Donated >CHF 1 million inessential supplies to medical
workers and communities

Donated >72,800 kg
of surplus to food banks

Achieved EcoVadis Platinum
rating in France

10

Sustainability at DKSH

Launched new Maurice Lacroix
AIKON #tide made fromrecovered ocean plastic

Won 14 awards at the Asia
eCommerce Awards

Relocated Taiwan distribution
center to a new building witha solar rooftop

Piloted electric vans andmotorcycles in Thailand

11

Sustainability at DKSH

Supported our employees
32 health programs and >127,000
training sessions

Conducted 104 healthcare
webinars, engaging 62,000
medical professionals

0 fatalities fromwork-related injuries

Collected >120 kg of plastic
bottles for upcycling

12

Sustainability at DKSH

2,024 children benefitted in
2021 through partnership with
Right to Play.
Improving life skills
with Right To Play and Liverpool F.C.
Foundation.

Provided COVID-19 testing
facilities in Thailand

Partnership for 26 electric vehicles
charging stations in Hong Kong

Conducted 35 local
community projects
in 13 markets

12

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Sustainability at DKSH

Our Sustainability Framework

We take responsibility for the environmental, social and economic impacts of our business activities and we are committed to helping to create a sustainable future through responsibly managing long-term, profitable growth.
In the 19th century, our founders built trading relationships between businesses in Asia and Europe, bridging culturesand bringing people together. Our business now employs around 33,100 people. What has not changed over the last 150
years, is our business purpose: enriching people’s lives.
For us, simply providing products is not enough. Of equal importance is how we conduct our business and the impact of
our activities on our stakeholders. Providing access to markets and products as well as generating jobs is core to what
we do, and by doing this in a reliable and responsible way, we are able to contribute to the development of markets andcommunities as well as to sustainable development.
“Sustainability” is one of our company values. We bring it to life through our Sustainability Framework, which focuseson three pillars:
Our People
As a people-driven company, we seek
to be an attractive employer known forour commitment to developing ourtalent. Built as an international business from the outset, we have always
embraced diversity as one of our success factors and we continue to believe
strongly in the benefits of collaborating with people from different backgrounds and with different ways ofthinking. We are committed to attracting and retaining our talent by offeringa safe and supportive work environment that respects human rights andenables our people to grow and fully
develop their potential.

Our Partners
Our business delivers growth for companies in new or existing markets. We
partner with clients who seek our services, such as distribution, marketingor sourcing, based on our aim of delivering service excellence. We nevercompromise on the quality and safetyof the products we are responsible for
and we go the extra mile to ensure
their availability for our customers andconsumers. Our business is built on
integrity, trust and reliability, which is
why we are committed to responsible
procurement. We expect the samehigh standards from our business
partners.

Our Planet
We acknowledge that businesses must
not only be mindful of their environmental and societal impacts but alsoseek to leave a positive social and environmental footprint. We are committed to managing our environmental
impacts through effective operationaland supply chain measures and to becoming a carbon neutral company inour own operations by 2030. Focusing
on the markets in which we operate,
we continue to be an active supporterof our local communities, by supporting economic growth through employment and local procurement opportunities and by engaging in programs
aimed at enriching livelihoods.

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Our People
Being an attractive employer
commited to developing our talent

Developing Our Talent
Expand training reach andevents with a focus on blended
learning

Reduce voluntary attrition rate

Increase managerial benchstrength

Online learning and training sessions
completed20%
15%

13,13982,828

127,974

2019

2020

2021

17%

18%
2019

2020

2021

2020

18%
2021

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Embracing Diversity
Increase the representation of
females in senior leadership

Increase the representationof locals in market leadership
teams

Train >90% of our managers on
diversity awarenessOn track
Launched e-learning
program “Belonging” in
October 2021.

27%
2020

29%
2021

73%
2020

In 2022, Belonging will be
included in the requiredlearning curriculumof managers andsupervisors at all levels.

79%
2021

Offering a Supportive Work Environment
Expand human rights guidelines and frameworks

On track
Human rights risk assessment in Malaysia
initiated

Establish an employee engagement survey andimprove engagement
On track
Target for 2022: 75

74%
2021

Engagement score = Engagement Index (aggregation of twoquestions: "How happy are you working at DKSH" and " I would
recommend DKSH as a great place to work")

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Our Partners
Providing access to markets, goods andservices with highest governance standards

Procuring Responsibly
Launch a responsible procurement policy andrelated training
On track
Aiming for implementation in 2022

Establish a roadmap to assess suppliers

On track
Roadmap established and under
implementation

Delivering Service Excellence
More than 95% of employees
completed business ethics
training

95%

87%
2021

100% of relevant sites have a
Business Continuity Plan inplace

Strengthen health and safety
approach to achieve zero-highconsequence injuries (HCI)

On track
Finalized preparations
for rollout in 2022

1

1

2019

2020

0

2021

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Our Planet
Taking responsibility for ourenvironmental and social impact

Managing Our Environmental Impact
Achieved climate target ahead oftime – reduced Scope 1 and Scope
2 emissions by 39.9% against2020 levels, ahead of reduction
target of 35% by 2025

Achieve climate neutrality in our own operations by 2030

Greenhouse Gas Emissions 2020
(Market-Based Accounting)in metric tons CO2 equivalent

New goal to reduce 65% of
Scope 1 and Scope 2 emissions
from 2020 levels by 2025

Create transparency on waste
and expand eco-friendly
packagingOn track
Pilot Guideline for Waste
Management in Thailand
this year; intended forroll-out to other markets.
Evaluate eco-friendly
packaging.

Greenhouse Gas Emissions 2021
(Market-Based Accounting)in metric tons CO2 equivalent

22%
Compensated
12,499 t

57,964 t
Scopes 1+2

36%Compensated
12,499 t

34,838 t
Scopes 1+2-39.9%

Greenhouse Gas Emissions (Market-Based Accounting)in metric tons CO2 equivalent-28%
20,238Being an Active
Community Member

4,015
82,777More than 90% of significant
locations engage in local
community activities

64,18055,31852,994

7,589

4,970

2019

100%

80%

90%

2019

2020

2021

3,119

79,899Fuel and refrigerants(Scope 1)

29,792
5,046

2020
Electricity(Scope 2)2021
Outsourced transport(Scope 3)

Air travel(Scope 3)

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Environment
39.9%

reduction in our own
emissions, achieving our 2025
target four years early

65%

New GHG emission reduction
target (Scope 1 and Scope 2 set
for 2025)

7

markets, including Switzerland
HQ, use 100% renewable energy“34,474 MWh of electricity
use across seven markets isbacked by International
Renewable Energy
Ce r t i f ic ate s (I- R EC s).”

The impact of climate change affects
us all and the scientific evidence isclear – urgent action is needed byeveryone to cut emissions to avoid theworst consequences of climate change.
As a multinational company, our firstpriority to the environment is to reduceor eliminate carbon emissions at
source.
In recent years, we have reduced ouremissions through implementing efficiency measures in our transport andenergy use. In 2021, we purchased
renewable electricity through our local
energy providers in the Philippines,
Italy and Switzerland. In other markets
including Cambodia, Hong Kong,
I n d o n e s ia , M a l a y s ia , M y a n ma r,
Singapore and Vietnam, we have begun
to purchase International Renewable
Energy Certificates (I-RECs).
We reduced our own GHG emissions by
39.9%, achieving our target four years
early (35% reduction across Scope 1
and Scope 2 against our 2020 baselineby 2025).

Thus we defined a new target aimingfor 65% reduction across Scope 1 andScope 2 emissions against our 2020
baseline by 2025.
In addition to energy efficient resourceuse, we are also reviewing our approach to waste management, buildingon the waste management guidelines
we developed in 2020. We initiated apilot for implementing new waste management procedures in Thailand. Afterconcluding the pilot, we will roll out therevised waste management concept tofurther markets.
Towards the end of 2021, we initiated a
project using paperless contracting andinvoicing systems with our customers.
This project, currently being trialed in
Malaysia and Singapore, should lead togreater efficiency and improved accuracy whilst eliminating paper usage.

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Greening parking facilities for landmark retail mall in Hong Kong
“Through our Business Unit Technology, we developed and installed a charging
infrastructure for electric vehicles (EVs) at a retail mall in Hong Kong. As Hong
Kong moves ahead with its road map on popularizing EVs to phase out combustion-engine vehicles by 2035, the adoption of emission-free vehicles and
EVs is set to increase. Our customer, anticipating shoppers’ needs, similarly
envisioned the future of retail malls to be electric.
DKSH conducted a comprehensive feasibility study of the mall’s capability tohouse EV chargers at its premises, planned the installation of EV chargers andcustomized the software with a user-interactive EV charger kiosk to house thesystem. Post-installation, we performed field studies to evaluate performance,
monitor potential risks and fine-tuned the system for optimal performance
under various operating conditions. We also provided user and system training
as well as after-sales services support.
The EV charging facility now operates reliably, accurately and efficiently.
Integration with the membership and retail management systems improved
EV users’ experience, ultimately helping to boost spending and increased visits from owners of EVs.”
Keith Ling, Senior Manager, Technical Sales & Project Engineering, IOT, DKSH Hong Kong

Harnessing clean, renewable energy through rooftop solar panels“Taiwan is one of our significant locations of operation, and accounts for approximately 22% of our global electricity consumption. To minimize our warehousing footprint, we made a conscious decision to prioritize environment
considerations in the building design when planning for a new distribution
center.
Our new healthcare distribution center in the Yangmei District in Taoyuan City
demonstrates many features of environmental design. The structure incorporates a solar rooftop, with 3,480 photovoltaic panels covering approximately
90% of the roof. The solar panels can generate a maximum capacity of about
1,100 kilowatts of renewable energy which feeds back into the national grid,
thereby contributing to the overall decarbonization of Taiwan’s energy supply.
The building has an energy-efficient power supply system which minimizes
overall usage whilst allowing for higher consumption during periods of peakdemand. It is also equipped with a smart Building Management System (BMS)
that provides round-the-clock surveillance of the building’s vital structures andsystems, automatically adjusting to changes in conditions.
With a purpose-built facility designed with the environment in mind, we canachieve optimal performance in our service delivery and minimize our environmental impacts.”
Erica Gilcrist, Director, Program Management – Distribution Center

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Innovating product design for sustainability“At Maurice Lacroix, our own Swiss watch brand, we are addressing
responsible sourcing of raw materials, which has become a pressing issue
within the international watch industry. Combining decades of traditional
watchmaking craftsmanship in Saignelegier, Switzerland, with modern innovation from Tide Ocean SA (#tide), we have reinvented our iconic watch series,
Aikon, which was first launched in 2016.
The new Aikon #tide, launched in March 2022, has incorporated sustainably
sourced #tide ocean material® – an award-winning resource which uses
upcycled plastic waste recovered from oceans in Thailand, Indonesia and thePhilippines – in its construction. The watch packaging is also made entirely outof #tide ocean material®, and is designed to be re-used as a mug. With every
Aikon #tide watch, we are helping to recover approximately 17 plastic bottles
from the ocean.
In December 2021, Maurice Lacroix embarked on an ambitious initiative to save
10 million plastic bottles by closing the cycle of plastic waste pollution with#tide. This year-long collaboration is aimed at protecting marine life in Thailand
through sponsorship of plastic collection activities that benefit the Ranong
Recycle for Environment program in Koh Chang and support workers in Surinand other islands. We are also supporting the Jan & Oscar Foundation, a Swiss
non-profit organization, to create educational programs to raise environmental awareness among local communities in Thailand.
“With transparency of our supply chain, we can expand sustainable productinnovation beyond its benefit to consumers to include meaningful environmental and social benefits.”
Stéphane Waser, Managing Director, Maurice Lacroix

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Social29%

of our senior management
are women>127,000

online learning and training sessions completed>80 million
COVID-19 vaccine doses
distributed“We operate in a socially
responsible manner withdue consideration to the requirements of our stakeholders.”

Living up to our purpose of enrichingpeople’s lives, DKSH continued to playa critical role in responding to theongoing global COVID-19 pandemic. We
delivered more than 80 million dosesof COVID-19 vaccines, and reliably
supplied pharmaceutical products anddaily essentials across Asia Pacific.
While ensuring an uninterrupted
supply chain even to the remotest
areas in some of our markets, thehealth and safety of our employees
remained our highest priority.

The Fantree Academy, our in-houselearning and development center, supports employee growth with more than
1,500 learning and development programs offered in every market. We believe that learning agility combinedwith trust, collaboration and feedback
are the keys to a successful future forour people and our company, and weare committed to creating a learning
culture that enables our people todevelop and grow, especially with theworld of work continuing to change.

As a services company, our nearly
33,100 employees bring our values tolife and their talent, commitment to ourcustomers and pride in DKSH are key
to our business success. We havestrengthened our approach topromoting diversity in our workforce,through implementing hiring andtalent development practices as well as
introducing a Belonging@DKSH initiative in 2020. In 2021, 55% of our employees and 51% of our managers were female. Our senior leadership increased
to 29% females, up from 27% in 2020,
and we are committed to fur ther
improving the representation of women in our leadership to more than 33%.

During 2021, as part of our commitment to the local communities we operate in, we supported 35 charitableprojects. For example, in the second
year of our three-year partnership with
R ight To Play and L i ver p ool F CFoundation, we engaged with local
communities that were most impacted
by the pandemic, by donating fooditems and other consumer goods products to more than 1,000 households
throughout Bangkok, Thailand.

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Sustainability at DKSH

Belonging@DKSH

What is Belonging@DKSH?
DKSH emphasizes diversity and inclusion in its workforce,to ensure a well-rounded workplace with a healthy mix ofvaried perspectives and characteristics. Belonging@DKSH
is an initiative to drive diversity, equity, and inclusion at
DKSH. It reflects our belief that we will achieve more when
our employees feel they can be fully themselves at work.
It is a natural extension of our culture, our purpose, andour values.

Key Initiatives for Belonging@DKSH• Launch engagement surveys and awareness trainings• Embed belonging-related practices into formal guidelines• Launch e-learnings about belonging and hiring practices• Establish new practices around recruitment and talent development

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Sustainability at DKSH

Governance
Board

Dedicatedmember for Sustainability
Quarterly Sustainability

Committee
meetings

Integrity Linefully operative“We strive to maintain thehighest standards andethical values in all ourbusiness activities with our
employees, stakeholders
and third parties.”

Our success is rooted in collaborative,
ethical and sustainable leadership. At
DKSH, governance of sustainability is
assumed by the Board of Directors of
DKSH Holding Ltd. through setting thestrategic direction for the DKSH Groupand overseeing strategy execution, as
guided by the Group’s values and its
sustainability policy and associatedcommitments.

The Executive Committee is tasked withexecuting the sustainability strategy,
assisted by a Sustainability Committee
made up of representatives of Business
Units and support functions, tasked
with the planning, coordination, monitoring, and reporting of sustainability
initiatives and actions.

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Sustainability at DKSH

Business conduct at the highest ethicalstandards represents the foundation
on which our business is built, as enshrined in our Code of Conduc t.
Training and education activities were
undertaken in 2021 to continually ensure understanding of expectations at
all levels of the organization and to promote speaking up over concerns of improper behavior. Integrity Line, ourconfidential reporting tool, saw its firstyear of full operation, with several
reports received and diligently followedup.
Sustainability Committee
In 2021, the Sustainability Committee
met quarterly to inform, discuss oralign on regulatory developments, objectives, key initiatives, projects, or actions, and to monitor corresponding
progress, and for knowledge exchange
and the sharing of success stories.
Subsequent to each Committee meeting, the Committee Chair jointly with
the Corporate Sustainability Team met
with the CEO and other members of the
Executive Committee, as well as twicea year with the Board member appointed for Sustainability, to report on thework of the Committee and to obtain
guidance.

To fur ther cascade sustainabilit ymatters within the organization, and by
mirroring the governance frameworkat Group level, several Business Units
and functions have begun to formalize
sustainability management at theirlevel. Sus t ainabili t y Champions
support implementation of sustainability measures at the local level andprovide important feedback to the
Sustainability Committee via theirBusiness Unit or function representative.

In March 2022, DKSH signed an agreement with the Global FoodBanking
N e t wo r k an d sub s e qu e n t l y t h e
Sustainability Champions began to establish relationships with local foodbanking partners in each of our markets. A Product Waste Reduction Tool
Kit was developed and deployed to create awareness on the issue of productwaste and to encourage the Business
Unit Consumer Goods to work collaboratively to reduce it.

Championing Sustainabilit y atBusiness Unit Consumer Goods
Business Unit Consumer Goods iscommitted to making sustainability
central to its business operations.
In 2021, the team set up a sustainability organization, comprising Sustainability Champions from each of theirmarkets to identify sustainability priorities and mobilize action through coordinated activities. Product waste
reduction has been identified as one of
the core topics to be addressed.
_ _ _ _ _ _ _ _ _ _ _“Each of the markets across Asia Pacific brings with it its own complexities and nuances, yet there are certain aspects of sustainability that they all share. The Sustainability
Champions are the experts in their own markets, they drive and support the agenda
with their peers locally and they contribute to our global vision and strategy by sharing
best practices and bringing forward ideas. It’s been an enriching experience working
with such a motivated and diverse group of people and it reinforces that sustainability
is as much about the people at DKSH as it is about the company. We’re starting withmodest objectives in 2022, but already I can sense that Business Unit Consumer Goods
has more to offer and I look forward to working on additional projects in the years tocome.”
Reece Croucher, Vice President Group Sales Operations, Digitization and Sustainability

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Sustainability at DKSH

What Really Matters:
Our Materiality Matrix
DKSH periodically conducts materiality
reassessments to ensure ongoing relevance of topics impacting our stakeholders. Our 2021 review included theintegration of updated informationfrom business partners, analysts, media, investors, and sustainability rating
agencies. When defining report content, we have considered all significant
aspects of our business along the value
chain. Due care was taken for the
preparation of this report through application of the reporting principles of
stakeholder inclusiveness, sustainability context, materiality, and completeness to the best of our ability.
Expectations expressed by important
stakeholder groups, such as employees(via employee surveys), clients and customers, were taken up via direct feed-

back. In fact, many of our top clientsand customers have adopted sustainability principles and reporting standards, and they expect DKSH to play its
part in their upstream or downstream
supply chains. These expectations also
relate to stakeholder groups that DKSH
does not directly engage with – such as
consumers of healthcare products andfast-moving consumer goods.
Overall, through stakeholder interactions, we assessed our material topics
to be current, with some shifts in theplacement on the matrix. Environment
and People related topics were further
broken down to ref lec t specif ic
stakeholder interests, foremost byclients, customers, investors andthrough emerging regulation, relating
to waste management and diversity.

Specific stakeholder interests in supply
chain matters triggered an evolution
from a more general and locally focused “Procurement practices” to“Responsible procurement” incorporating social aspects.
During 2022 we will be conducting a'double materiality' assessment to inform our future sustainability strategy
focus areas, stakeholder engagement
and reporting in line with evolving
stakeholder expectations, disclosure
frameworks and legislative requirements, including the EU Taxonomy.

GRI 102-40, GRI 102-42 to 44,
GRI 102-46 and 47

1.

Environmental Responsibility• Energy and Emissions• Waste Management2.

Responsible Procurement

3.

Our People•
Developing our Talent•
Embracing Diversity•
Supportive Work
Environment

4.

Occupational Health and Safety

5.

Local Communities

6.

Anti-Corruption

7.

Economic Performance8.

Customer Health and Safety

9.

Marketing and Labeling

10. Information Security
11. Market Presence

Environment

27

Environment

Environmental Responsibility

Climate change and the resulting adverse effects on nature and mankind isa huge global challenge and DKSH iscommitted to playing its part in averting disastrous global warming. Most of
our greenhouse gas emissions result
from our operations in our significant
locations in South East Asia and Greater
China, primarily from logistics (warehousing and transport).
Historically, our management approachhas primarily been compliance-led,with a particular focus on applicable
environmental rules and regulations in
the respective countries of operation,as mandated by our Health, Safety andEnvironment (HSE) policy.

The policy underlines DKSH’s commitment to conducting our business in anenvironmentally responsible mannerand local HSE managers are tasked
with maintaining a register of applicable national environmental laws andregulations and for ensuring
compliance across all our operations.
Today, we are taking a more proactive
approach to environmental responsibility, through significantly reducing
our reliance on fossil fuels, investing in
renewable elec tricit y and green
buildings, and compensating foremissions through purchasing Gold
Standard carbon offset certificates.

Our Commitment
Optimizing the effectiveness of ourdistribution system via continuous
improvement of our supply chain
processes while reducing energy
consumption, emissions, waste andother environmental impacts.

Our progress will be supported by anenhanced HSE Management System,
referencing ISO 14001, which wasdeveloped in 2020 and deployed in
2021. The local country HSE Steering
Committees are responsible for ensuring its effective deployment across all
markets, with local HSE Managers
supporting the practical implementation of management systems andprocesses.

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Environment

Logistics Operations
To distribute our clients’ products andour own, DKSH operates 160 distribution centers (DCs). Our DCs and warehouses are typically leased, with a few
of them built-to-suit. They account fora significant part of our carbon footprint. Energy is consumed for lighting,cooling, heating and operating forklifts
and other handling equipment. Most of
our handling equipment is battery-operated. Temperature-sensitive products may require storage and transport
in air-conditioned vehicles or in specialtransportation boxes. Therefore, theuse of refrigerants and the resulting
fugitive emissions form part of our carbon footprint.
Our capillary distribution network
serves several thousand customers daily. Our own fleet of vehicles is comparatively small. Most of our outbounddeliveries are handled by transport
service providers that we select basedon quality, reliability and, increasingly,
fuel efficiency. One of our most significant impacts relates to vehicle fuelconsumption. More than 95% of ouroutsourced fleet is diesel-powered, although some vehicles run on compressed natural gas or gasoline, androute optimization is key for operating
efficiency. To increase efficiency andtackle emissions for our fleet and haulage carriers, we use a specialized software targeting transport. In 2021, we
focused on further implementation ofthat software in Thailand and Malaysia,
where, alongside our outsourced fleet,the software is now also being used forour chartered fleet. Chartered fleet refers to vehicles rented on a monthly
basis while outsourced fleet refers totransport services paid per trip/case.
During the year, we optimized the mixof trucks in our fleet to improve fuelefficiency and reduce fuel consumption, and we also reduced the numberof trucks. We aim to expand use of thesoftware to other markets.
We ensure the safe storage, handlingand transportation of dangerous goods
and hazardous chemicals that we
distribute. To standardize our approachacross our global business, we released
our Dangerous Goods and Hazardous

Chemicals Guidelines in early 2021 aspart of our environmental managem e n t s y s te m , w h i c h s e t s c l e a r
standards and provides guidance topersonnel in assigned roles andresponsibilities. Where appropriate, werely on the services of carefully selected specialized outsourcing services
providers whilst retaining oversight ofour supplier performance. During 2021,
we had one minor incident involving
non-compliance with environmental
regulations which resulted in a fine of
CNY 10,000 (approximately CHF 1,500).
The incident, in China, related to a violation of the Regulation on thePrevention and Control of Marine
Environmental Pollution by Ships due
to a failure to submit a "Dangerous
Goods Declaration” within the required
24 hours before goods arrived at port.
The safety of the shipment was notcompromised, and internal processes
were consequently reviewed ands trengthened to prevent similar
breaches occurring in the future.
GRI 307-1
Business Travel
Under normal circumstances, travel isa key part of our business, althoughinternal approval systems operate toprevent unnecessary travel. Most journeys are made via business flights, viaroad by sales and service teams in theirown cars, and via public transport.
We experienced a significant drop in
business travel in 2020 and 2021 as aresult of the COVID-19 pandemic. Whiledeliveries of goods were able to proceed, meetings with customers wererestricted, and most marketing activity
switched to online campaigns, new digit al marketplaces and webinars.
Meanwhile, our Business Unit
Performance Materials developed an
innovative webinar tour on Green,
Clean & Ethical Cosmetics for our customers, which involved our lab specialists creating several formulations prior
to the webinar and sending the samples to participants in advance, to allow
them to create a hybrid digital/physicalexperience.

While emissions from air travel continued to be low in 2021, we expect theseto gradually rise as we move out of thepandemic and international travel resumes. However, we do not anticipate
that travel will recover to pre-pandemic levels, as our customers and sales
teams are now able to take full advantage of the successful digital communication tools that are now in place.
Waste Management
With a comparatively small manufacturing footprint, both in our own operations and those we directly outsource,
the bulk of our waste is comprised ofpackaging materials from our logistics.
Preparing goods for delivery requires
mostly cardboard boxes and plastic
film for pallet wrapping, and packaging
waste is also generated from incoming
shipments. Healthcare cold chain
goods, in particular, need extensive
packaging to protect temperature-sensitive items.
Waste may also accumulate from goods
that become unsaleable due to expiry
or for other reasons, from administrative activities (office waste) and fromredundant IT equipment.
Following the introduction of the DKSH
Guidelines on Waste Management in
2020, during 2021 we initiated a pilot in
Thailand to establish higher transparency on waste and to standardize thecollection of waste data across markets. Currently, the Thailand distribution centers are completing monthly
reports quantifying the waste generated, disposed of and recovered. The data is categorized by material type andwhether or not the waste is hazardous.
After fine-tuning and stabilizing thedata collection, the initiative will be cascaded across the region to all DKSH’s
significant operations and will form thebasis for setting improvement objectives to reduce waste overall and increase the quantity of waste materials
that are recovered or recycled.

29

Environment

Graph shows gross emissions, where Scope 2 figures are calculated using
location-based factors for each market, relating to the carbon-intensity of thenational grid.

Graph shows net emissions, where Scope 2 figures are calculated using market-based factors relating to the carbon intensity of the electricity we are buying
from our energy providers plus our additional purchases of I-RECs.
While I-RECs show 0 g CO2/kWh, for transparency reasons, we mention the global averages for emissions related to hydropower here.
For Hong Kong and Myanmar we purchased China I-RECs. These I-RECs weregenerated by hydroelectric dams. The global averages for hydropower fromreservoirs/dams are:•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 and non-tropical regions
are: 6 g CO2e/kWh

For our consumption in Cambodia, Indonesia and Vietnam, the respective I-RECs
were 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 withreference to the Ecoinvent 3.8 emission factor database.

1.

38% of electricity used is either purchased under a green tarifffrom our supplier or is covered by centralized purchases ofu n b u n d l e d re n e w a b l e e n e r g y ce r t i f i c a te s (I - R EC s). . . . . . . .

2.

Fuel used in equipment such as forklif t trucks and back-up
electricity generators.

For more information, see Reporting Approach, pages 30-31.

30

Environment

Promoting Environmentally
Responsible Practices
In 2020, DKSH initiated a Group-wide
program called “faster-leaner-greener”(FLG). Living our value of collaboration,
all markets nominated a dedicated FLGrepresentative to share learnings andbest practices with the wider team.
DKSH has since implemented around
200 FLG initiatives inspired by employees and replicated across other markets. Examples range from ‘quick fixes’,
such as providing clear labeling at recycling stations, to wider operationalchanges, such as switching to digital
signatures and approval processes.
In 2021, a focus has been given to waste
reduction. This has included eliminating single-use plastics, ensuring thatelectronic waste is responsibly managed, reducing paper usage and improving recycling across our sites.
The official program ended at the endof 2021, yet the learnings and spirit endure within our organization as “FasterLeaner-Greener” has led to us changing
our habits and our mindset.
In late 2021, we intensified our digitalization journey by automating certain
stages of our customer transactions.
Through utilizing digital technologies,
we have created a paperless system for
greater efficiency and higher accuracy
while reducing our environmental footprint through eliminating paper usage
and printing. This project, which is currently being piloted in Malaysia andSingapore, will be implemented in other markets where paper-based processes are still practiced.

Our Targets
Energy Consumption and Carbon
Emissions
We have been reporting the carbon
emissions related to our operations
since 2018 and have launched several
initiatives to reduce our carbon footprint. In addition to reducing fuel consumption, DKSH started a program in2019 to offset progressively more of its
carbon emissions each year, with theaim of becoming climate neutral in ourown operations by 2030.
In 2021, as well as reducing our directfuel use, we increased our purchaseso f r e n e w a b l e e l e c t r i c i t y. O u r
food-blending plant in the Philippines
switched to 100% renewable electricity
in early 2021. We also purchase renewable electricity from our energy provider for our operations in Italy and the
DK SH operations in Swit zerland;
our Maurice L acroix business in
Switzerland purchased a further 10
MWh of renewable electricity. For other markets, we have begun to purchase
International Renewable Energy
Certificates (I-RECs) in order to achieve
our target of climate neutrality in ourown operations by 2030. For 2021, we
h a v e p u r c h a s e d 3 4 , 4 74 I - R E C
Certificates, equivalent to 100% of ourelectricity use in Cambodia, Hong
Kong, Indonesia, Myanmar, Singapore
and Vietnam, plus 67% of our electricity use in Malaysia.
We have achieved our carbon emissions reduction target four years early,
which was to reduce carbon emissions
from our direct operations by 35% by2025 against our 2020 baseline. In calculating the carbon emissions reduction, we have compared 2020 and 2021
data calculated using the market-based
approach for Scope 2. In 2021, we hadachieved 39.9% reduction in carbon
emissions (Scopes 1 and 2) in our own
operations through various initiatives:• reduce emissions at source by optimizing our transport routes and ensuring more efficient use of electricity across our sites• expand the purchase of renewableelectricity directly from energy providers across our main markets• purchase I-REC Certificates as a credible claim for renewable energy use,in compliance with the GHG Protocol
Scope 2 Guidance.
We further reduce our climate impact
by offsetting emissions through Gold
Standard carbon credits that also
support high-impact projects. Given
the early achievement of the above
mentioned target we also updated ourcarbon emissions reduction target. The
new target for 2025 is a 65% reduction
against our 2020 baseline.
Reporting Approach
Data on refrigerants, fuels and upstream transportation is captured formarkets with the highest usage of refrigerated storage and the largest distribution networks. These include
Cambodia, Hong Kong, Malaysia,
Myanmar, New Zealand, Singapore,
Thailand, Taiwan and Vietnam. Fuel usage includes CNG, LPG, diesel and gasoline for our internal fleet of delivery
vehicles and back-up electricity generators. For outsourced logistics services,major suppliers provided diesel consumption data in liters from bill data.
In 2021, the outsourcing provider in
New Zealand has provided us withemissions data directly. For consistency, all fuel properties and carbon intensity factors were sourced from UK
Government GHG Conversion Factors
for Company Reporting (2021 edition).
The Global Warming Potentials applied
are from the Intergovernmental Panelon Climate Change (IPCC) Four th
A ssessment Repor t (AR4) over a
100-year period.

31

Environment

We collect data on electricity consumption from bills received from utility suppliers for almost all of our markets. For
our US market, we have extrapolated
energy data from cost data, and for oursmall UK market we do not report data
since elec tricit y consumption ischarged through a building services
fee.
From 2021, the most recent figuresavailable from the International Energy
Agency on the carbon-intensity ofnational electricity supplies are applied
to all countries. In previous years, we
had applied Location-Based Factors
according to the following hierarchy:
1) government source (as recent as possible, by state if available); 2) IEA 2012;3) nearest neighbor (since neither 1 nor
2 was available for Guam, we used thegovernment factor for the nearest
country, the Philippines).
For Market-Based Factors, this year we
continued to apply the following hierarchy: 1) electricity supplier factor (orcentralized I-REC purchases); 2) credible residual factor source (e.g., RE-DISS
for European countries); 3) same as
Location Based Factor. For I-REC purchases, we match the sourcing country
to the country of consumption, and the
production year to the consumption
year, wherever possible. In cases where
this is not possible, for example
Myanmar has no such energy certification system, our provider recommends
the most appropriate substitute.
Biogenic emissions only relate to biofuel content of transport fuels and areconsidered negligible. All relevant
greenhouse gases are included in thecalculation, i.e., CO2, CH4, N2O, HFCs,
and the effects of radiative forcing forbusiness flights. The consolidation approach for emissions is operational
control.

All figures concerning energy use andrefrigerant use within buildings relate
to distribution centers and offices; thecompany also has a small retail footprint in some markets such as Thailand;these shops are mainly leased units
within larges complexes, with limited
or no access to energy data. All retaildata is excluded as considered to be
not material for the Group's footprint.
For business travel, kilometers flown
data was extrapolated based on flightspend data for all markets (with the
exception of Myanmar, for which we
could not obtain comparable spend data). UK Government GHG Conversion
Factors for Company Reporting (2021
edition) were applied to convert kilometers to CO2e (including RF). To
streamline reporting, we now apply the"international not to/from UK" factor,
with "average" seat class, to all flights;
previously for domestic flights, we applied the "domestic" factor, irrespectiveof country.
We also prepare a carbon disclosure inline with CDP Climate Change. CDP is
an international non-profit organization that aims to establish businessnorms for environmental reporting andrisk management. Given its relevanceto both business partners and investors, DKSH has published CDP disclosures since 2016. For information on
our latest carbon disclosure, please
visit the CDP website at:https://www.cdp.net/en/

TargetAchieve climate neutrality in our own
operations by 2030.
Achievement
We have reduced our own GHG
emissions (Scope 1 and Scope 2) by
39.9%, four years ahead of target.
Therefore, we have increased thetarget to 65% of own GHG emission
reduction by 2025. We purchased
34,474 I-REC Certificates, representing the consumption of 34,474 MWhrenewable electricity by our operations in Cambodia, Hong Kong,
Indonesia, Malaysia, Myanmar,
Singapore and Vietnam.

Social33

SocialOur People

Enriching people’s lives is part of ourcore purpose and this extends beyond
our goods, services and insights to ourglobal workforce. We offer safe, healthy
workplaces and we follow fair employment practices in line with the principles outlined in our Code of Conduct:
respecting human rights and offering
equal opportunities, investing in talentand supporting our people in their personal growth.
We focus on promoting diversity, equity, and inclusion to build a workplaceand create an employee experience
where every employee has the opportunity to learn and grow, to receive appreciation, recognition, and reward fortheir work, and to feel valued and supported for who they are.

In 2021, DKSH won a total of 17 HR
awards across various markets, includi n g H R A s i a’s a w a r d f o r ‘ B e s t
Companies to Work for in Asia 2021’ inCambodia and Vietnam.

Belonging@DKSH
Priorities• Increase representation of womenin middle and senior leadership(2021: 29%; 2020: 27%)
• Increase the share of local nationals in market leadership teams(2021: 79%; 2020: 73%)
• Strengthen employee engagement– launched global employee engagement survey in 2021 to gain
insights on employees’ perceptions about equality, opportunity,
caring, and belonging

In 2021, 55% of our workforce and 36%
of our market leadership teams were
women (see charts below). For ourapproximately 200 senior-most leaders,
the ratio was 29%. There are currently
no women on the Executive Committee,
however, the share of women in the
Board of Directors, DKSH's highest governance body, is currently 25%. This ispartially due to the current and historic underrepresentation of women in
the science, technology, and logistics
talent pools. We are committed todiversity at all levels in the organization. We have embedded diversity- andbelonging-related practices into formal
guidelines and have introduced education on diversity, equity, and inclusion
in both daily management and in hiring
practices. These efforts will help us
improve in all three priority areas.

34

SocialGender and Nationality Split at DKSH

Enabling Personal Grow th andRecognition
To grow our business, we need to create the right conditions for our people
to thrive. The diversity of our businessand the industries we serve offer significant learning and development opportunities to our people. We provide
hands-on experience, empowerment
and stretch assignments to develop
employees. These, combined with feedback and learning from others as well
as formal training from our Fantree
Academy, provide a balanced development approach known as “70-20-10”
where 70% is based on learning on thejob, 20% from learning through others
and through continuous feedback, andthe last 10% from formal courses.
At DKSH, we encourage our people toown their professional development.
We promote internal talents wheneverpossible instead of hiring externally. All
open positions are advertised in an internal job market, and we enable internal mobility including international
assignments. For management level
positions, the ratio of internal promotions versus external hiring is a closely
monitored performance indicator.

In early 2021, DKSH launched an enhanced “HR scorecard” to enable teamleaders to better monitor and manage
relevant KPIs such as attrition, diversity, internal fill, and managerial benchstrength.
Since 2013, we have built our in-houselearning and development center,“Fantree Academy”, with curricula built
on the pillars of Leadership, Functional
Skills and Essential Skills. Our training
curricula are complemented by programs addressing other importantmatters, such as ethics and compliance,
employee onboarding and health andsafety.
Training is typically delivered throughonline, classroom, on-the-job or external assignments. COVID-19 has resulted
in a significant shift to online training
and postponements of in-person trainings. In 2019, more than 90% of training
sessions were conducted in classrooms,
whereas in 2021, 90% of training was
conducted online, facilitated by alearning management system introduced in 2019.

To increase training effectiveness, weare favoring shorter, more intense
learning sessions, with an emphasis on
on-demand digital learning.
Employees can access various online
and offline sessions according to theirindividual needs and interests. In 2021,
78% of employees received training,
completing almost 128,000 training sessions both online and offline. This resulted in an average of 5.3 training
hours annually per employee.
GRI 404-1
Overall, the launch of the new learning
management system resulted in a significant increase in training reach.
Whereas before, employees had accessat most to a few dozen programs, there
are now more than 1,500 unique learning items catalogued. Going forward,
we will increasingly use a blended approach to learning that combines selfpaced digital learning, in-person learning, on-the -job application, andpeer-to-peer sharing sessions.

35

SocialFantree Academy: Keeping Relevant to Meet Future Needs
A Shift Towards Development• In 2019, DKSH implemented a learning management system• This allowed us to move to an on-demand, digital-first learning approach• Instead of full-day classrooms, we developed shorter, more relevant self-paced learning• The result: in 2021 we reached 78% of our employees and have significantly increased the number of learning
hours per employee

Development of In-House Learning Pre- and Post-COVID-19

36

SocialRecognition 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 havemost embodied our corporate purpose,values, and People DNA through the
DKSH Fantree Awards. Individual employees or teams are encouraged tonominate colleagues at the market level. Awards are recognized and celebrated during town hall meetings and given
by members of senior management. In
addition to local awards, six corporate-level awards acknowledge extraordinary contributions, and the winners
present their success stories during a
ceremony at a Board of Directors meeting.
Performance and Feedback Culture
Employee performance is measured
against mutually agreed quantitativeand qualitative objectives and is linked
to remuneration. All employees participate in a formal annual appraisal with
their manager.

For management-level employees, thisis carried out via the DKSH TalentPortal, an online performance and talent management solution and includes
a personal development plan. Regulardialogues between managers and employees on development objectives,
including constructive feedback, arealso a part of their development journey at DKSH.
Plans were made for the objective setting process to be moved to
SuccessFactors in 2022, a new platformthat further eases the planning and dialogues that occur. Through a combination of developing and bringing in
new talent, we have further enhanced
the capability of our Human Resources
employees to better support our business leaders in building high-performance teams and setting meaningfulperformance objectives.

In 2021, DKSH introduced surveys togather employee feedback on various
topics, including engagement, onboarding, and exit surveys. This survey
provides a valuable baseline against
which we measure progress in building
a culture of high engagement and highperformance. Our YourVoice@DKSH
engagement survey was conducted in
May and November, reaching all employees with company email addresses
which consisted of more than half of
DKSH’s total headcount. We commit to
conducting this survey twice a year tounderstand employee experience at
DKSH, and in 2022, we will be expanding the survey population to include all
employees by increasing survey access
options.
We are progressively introducing amore comprehensive performance
review process to include a reflection on our values, individual targets, and development plans. Thiswas completed for 26% of employees
in 2021 (2020: 23%). All decision-making with respect to appraisals, development opportunities, and promotions uphold our equal opportunities
commitment.
GRI 404-3

37

SocialCreating a Supportive Work
Environment
Providing a work environment that is
conducive to people performing attheir best includes offering relevant
benefits to the workforce. DKSH provides a variety of benefits to its employees, based on applicable policies in the
countries of operation. Standard benefits, with some variation by market,
include life insurance, healthcare, disability and invalidity coverage, statutory retirement provision and parental
leave. Benefits related to stock ownership are limited to eligible key managers of the company (Annual Report
2021, page 44). Our practices with respect to providing benefits exceed applicable legislation in many cases. In
four out of 10 significant locations (ref.
GRI 102-4 for definition), the benefits
provided to part-time and temporary
employees are identical to those of permanent full-time employees, and in fiveother markets some of the benefits are
only provided to full-time employees.
In one market, no voluntary benefits
are provided to part-time or temporary
employees.
GRI 401-2
In this fast-changing world, technology
allows us to work differently and efficiently in a non-traditional work setting. At the s tar t of 2021, DK SH
launched a global Flexible Work
Arrangement policy, giving employees
more ownership on how and where
they work from. As an employer, DKSH
empowers its employees by facilitating
a flexible working environment, where
feasible, given the operational requirements of an employee’s role and job
requirements. While we believe thatcollaboration, creativity, teamwork, andconnections are best nourished wheninteracting face-to-face in an office environment, alternative flexible work

arrangements – one of which is to workfrom home or remotely – can offer viable solutions in achieving work/life balance for employees.
Most importantly, at DKSH, we are committed to providing a work environment where people are treated with
dignity and respect, are free from discrimination or harassment, and where
people positively collaborate with eachother, enabling them to thrive and fully
develop their potential. Respecting human rights is a key element in our employment offering, as laid out in our
Code of Conduct. DKSH does not discriminate based on age, religion, gender, or any other protected category.
We respect our workers’ rights to freedom of association and collective bargaining. We would never penalize anyone engaging in good faith in workers’
groups. In 2021, a lower proportion of
employees were covered by collective
bargaining agreements compared to2020 due to an organizational adaptation to regulatory changes in one of oursignificant markets of operation.
At the end of 2021, 18% of DKSH’s
employees were covered by collective bargaining agreements (2020:
20 percent).
GRI 102-41
Our commitment to respecting humanrights and non-discrimination is madeclear to employees through our Codeof Conduct and related induction training. This includes the importance oftreating all people with respect. The
training materials specifically state thatany form of discrimination, harassment
or bullying is not acceptable. The training also encourages people to reportany cases of misconduct to the sitemanager or to HR and emphasizes thatrepor ts will be kept conf idential.
Organizationally, we practice a business partnering approach whereby
representatives of the HR department
are stationed within operations, allowing employees to easily access theirsupport. Integrity Line, the online reporting tool we introduced in late 2020,
further enhances the avenues available
to employees for confidential reportingof human rights or other labor condition concerns. In 2021, 44 incidents
were reported to HR via the Integrity
Line, 12 of which related to personnel
matters.
In July 2020, we launched a Code of
Conduct refresher training targeted at
all employees, with a particular focus
on human rights and workplace issues.
Between 2020-2021, 33,635 employees
or 99.6% of our entire workforce hadcompleted the training.
DKSH recorded three incidents of
discrimination or harassment in
2021. A thorough investigation of
one incident revealed substantial
evidence of harassment, and awarning letter was served; there
was no further case following this.
However, the remaining two incidents were anonymous reports,
where the allegations could not be
substantiated due to a lack of details. Subsequently, an internal
awareness campaign on this topic
was launched in one affected market, following which no similar incidents were reported thereafter.
GRI 406-1

38

SocialTo ensure labor rights are fully upheld,
the HR and Supply Chain Management
teams in each of our key operating
markets have responsibility for all hiring and for ensuring that employees
and contractors have the correct documentation. We operate management
programs in line with applicable local
laws and labor regulations to preventchild or forced labor, or illegal workers,
and to ensure decent and safe workplaces, fair and timely pay, and adequate rest periods.

Sharing a Moment in LifeWe seek to offer an attractive work environment in support of our objectiveof retaining our people, but we understand that some employees may seek
new opportunities outside of DKSH.

Our management approach to non-discrimination and human rights practices
has focused thus far on legal compliance and governance processes, andevaluation of their effectiveness has
mainly been at the local level. Although
we are not aware of significant issues
arising in our operations, we intend to
standardize our compliance-led approach to ensure consistent operating
standards in all countries where DKSH
operates. We are working towards centralized oversight of this issue, withclear reporting lines to Group management. The steps towards this more coordinated approach are underway, witha human rights impact assessment
being conducted in one market in 2021,
with plans to complete this in othermarkets subsequently. We will reporton progress in our 2022 report.

Firstly, South-East Asia is a very dynamic economic region with generally higher attrition rates than, for example,
European markets.

In 2021, the overall attrition rate for theGroup was 25% with a voluntary attrition of 17%. At management levels, thetotal attrition rate was 16%. Although
our attrition rate may seem high, there
are two factors to consider.

Secondly, the logistics sector, whichmakes up a large proportion of ourworkforce, is particularly dynamic compared to other local industries, resulting in high attrition rates among this
employment segment. We will continue
our efforts to reduce voluntary attrition
further.

39

SocialLocal Communities

We are committed to promoting sustainable economic growth through providing stable jobs with fair employment
terms and opportunities for personal
development, and by upholding highstandards for conducting our business
responsibly.
Through our capillary distribution network, we enable market access forhealthcare products and other necessary items across Asia. In 2021, DKSH
has delivered more than 80 million doses of COVID-19 vaccines across Asia
Pacific.
Alongside our business activities, we
foster trust in local communities by engaging in projects and selected sponsorship programs. However, as statedin our Code of Conduct, DKSH does notengage in political processes and we
refrain from any form of donation topolitical causes.

We continue to deliver on our purposeof enriching people’s lives by contributing to relief ef for ts during the
COVID-19 pandemic. During 2021, we
donated over CHF 1 million in medical
supplies and daily essentials to hospitals and vulnerable communities in
Cambodia, Laos, Malaysia, Thailand andVietnam. In addition, our colleagues inThailand collected more than 120 kg ofplastic bottles for upcycling into personal protective equipment suits for
medical frontline workers.
In our major Thai market, we have supported Right To Play for more than 15
years. This global non-profit organization uses the transformative power ofplay to educate and empower children
facing adversity. In 2020, we expanded
our partnership by teaming up with theLiverpool FC Foundation for a threeyear program comprising sport andplay-based sessions to improve the life
skills of 2,000 children and youths aswell as to increase community and social engagement. In 2021, we collaborated with Right To Play on donating
food items and other consumer goods
products to more than 1,000 households in Bangkok and communities at
the Thai-Myanmar border.
We also offer employment opportunities to people with disabilities who havestruggled to enter the workplace. For
example, in Malaysia, DKSH employs 10
deaf people from the local community
at the Famous Amos cookie outlets.

DKSH supported 35 local community projects. Charitable activities
took place in 9 of our 10 significant
markets.
GRI 413-1

40SocialResponsible Procurement

More than 90% of our business activities relate to the procurement of goods
for resale. Our current procurement
practices generally follow a tailoredapproach adapted to individual business requirements, as described below.
However, going forward, we intend tomove towards higher uniformity in our
approach by enhancing and standardizing supplier evaluations and setting
standards and objectives for certain
procurement categories and will reporton progress in future reports.
Marketing and Distribution Services
DKSH’s core business model is to enable market access and businessgrowth for manufacturers of productsin the industries and markets we servethrough our four Business Units, witha focus on Asia Pacific. Our main activity is the provision of contract-based
marketing and distribution services,with procurement of trading goods directly from our clients, which accounts

for the bulk of our procurement activities. Our goods for resale and distribution originate from a global client baseheadquar tered in the A mericas,
Europe, and Asia Pacific. Contracts
specify shipping and delivery terms
and may vary depending on clients’locations and their fulfilment strategies. Based on agreed terms, we eitherorganize international shipments, takeover products at port, or we receive
deliveries directly at our distribution
centers, which can originate fromsources within a country. As enshrinedin our Code of Conduct, we only engage
with business partners who meet ourstandards of doing business. We
procure goods within well-defined
product categories, following ethicalstandards and stringent contract
management procedures. Our distribution of tobacco products is very small,accounting for less than one percent ofgroup sales and we do not trade inarms.

We respect all applicable international
and local laws and regulations pertaining to trade.
Customer Solutions
In addition to its marketing and distrib u t i o n s e r v i ce s , B u s i n e s s U n i t
Performance Materials provides sourcing services for customers in various
manufacturing industries. Sourcing
involves identifying the right productand supplier for a specific customer
requirement and is typically international, allowing customers to benefit
from our vast network of sourcing specialists. Innovation laboratories offer
innovative formulations for new product development and procurement ofassociated product supplies, for customers in the food and beverages, personal care, pharmaceutical, and speciality chemicals industries.

41

Social

Our sourcing activities mainly bring
together Asian suppliers (mostly from
China and India) with European andAmerican customers, many of which
are multinational companies with stringent quality (e.g. ISO 9001, GMP) and
responsible sourcing requirements.
Manufacturing
DKSH’s third largest revenue stream,
albeit far smaller than Marketing andDistribution Services and Customer
Solutions, relates to our own manufacturing and branded activities. We havea portfolio of diversified businesses
predominantly in own brands, franchising, and in-licensing. Many of our own
brand activities rely on outsourcing to
specialized manufacturers, or sourcing
products directly from franchisors andlicensors.
Retail Franchises
Our Thailand and Malaysia-based
franchising operations (e.g., Levi’s,
Famous Amos) follow strict procurement guidelines set by the respective
franchisors (e.g., The Levi Strauss Co.,
Ferrero SpA). The franchisors supply
raw materials or intermediates to us for
manufacturing, either through suppliers appointed by the franchisor, or byauditing and approving suppliers selected by DKSH. Whenever possible, we
prefer to use local suppliers.
Healthcare Own Brands
In our Medinova own-brand healthcare
business, the selection of contract
manufacturers is primarily driven byquality and capability considerations.
Outsourcing partners undergo stringent due diligence procedures including environmental certifications andother requirements. Our main partner
production sites in 2021 were locatedin Germany and Thailand.

In our Favorex in-licensing pharmaceuticals business, where we act as thelicensee, our supply sources are either
the licensors themselves or they areappointed/approved by the licensors.
All supply sources must meet GMP and
WHO standards and be compliant with
the Pharmaceutical Inspection Cooperation Scheme (PICS).
Consumer Own Brands
An important pillar in our Luxury &Lifestyle businesses is our Maurice
Lacroix watch manufacture located in
Switzerland. Watches are assembled
from components sourced locally andinternationally from high-quality suppliers meeting stringent requirementsof the Swiss watch industry. Watches
containing gold are no longer part ofMaurice Lacroix’s range of products
and jewellery models exclusively makeuse of synthetic jewels only. Maurice
Lacroix’s drive towards sustainablebusiness practices throughout its supply chain is further manifested using
recycled watch components for newmodels launched in 2022 (ref. page 20
o n t h e la un c h o f A iko n # t i d e).
Responsible procurement practices also encompass marketing materials,
such as packaging and displays.
In Malaysia, through our Auric Pacificacquisition in 2019, we market own
brand goods produced internally andexternally, most of which are dairy
products. Third-party manufactured
products are sourced from high-quality responsible suppliers in Australia,
New Zealand, and Belgium. Ingredientsfor the production site are exclusively
sourced locally, except for a few ingredients not available in the local market,
with a primary focus on quality andfood safety.

A few smaller businesses include themarketing of household goods and appliances in Malaysia and Australia,
which are mainly sourced from China.
Food Processing
Part of Business Unit Performance
Materials, our food processing activity
in the Philippines focuses on flexible
solutions (both premixes and finishedproducts) for customers in food services or consumer-facing businesses.
About 60 percent of procured materials
for production (mixing and blending)are sourced from local suppliers, withthe rest procured internationally from
China, USA, ASEAN, Korea, and Europe.
Agrochemicals
Through acquisitions in Australia in
2019 and 2021, DKSH now also owns abranded business in agrochemicals
which are both manufactured in-house(mixing, blending) and inputs are procured from a local manufacturing plant.
Procurement for our Own Operationand Service Delivery
Logistics and distribution costs are
our biggest area of spend for our own
operations. We procure services forgoods handling, movement in or
between our locations, and deliveries
to customers, and purchase related
goods such as packaging materials.
Transportation is largely outsourced to
specialized local logistics companies.
For the operation of our distribution
centers, we procure the services of foreign workers engaged via specializedlabor service providers where there isa shortage of local labor. This includes
workers for the adaptation or customization of products to local market conformity (e.g. repacking or labeling).

42

Social

Our second largest area of procurement expenditure relates to selling
costs, of which adver tisingand promotional expenses represent
the largest categories. Theset ypically include in -s tore trade
marketing expenses and may also include specialized media agencies.
Some expenses are incurred in the engagement of promoters (for example
for product sampling) on a casual basis,
providing a source of income for people
with low educational background or for
those preferring flexible work arrangements.
Other procurement relates to generalbusiness items, such as rent, utilities,
stationery and office supplies, consultancy, IT licenses and service fees. With
the exception of some consultancy andIT license and service fees, these aremostly incurred locally.
For the local execution of our business (primarily service delivery),almost 100 percent of our procurement by spend in 2021 in significant locations of operation wasfrom local companies.
GRI 204-1
Overall, this part of our activity is guided by our Non-Trade Procurement(NTP) Policy and our Supplier Code of
Conduct. The NTP policy sets various
requirements for supplier selection andmanagement, including both commercial criteria and expectations of business conduct. It mandates that all supplier arrangements must be in writing,with reference to the Supplier Code of
Conduct forming an integral part of any
contract. Our Supplier Code of Conduct
addresses topics such as anti-corruption, health and safety, decent working
conditions, and respect for humanrights and the environment.

Our technical requirements tend to limit the number of qualifying suppliers.
In Business Unit Healthcare, for example, redressing suppliers (for repacking
or labeling of products) need to be able
to operate under the requirements ofGood Manufacturing Practices (GMP).
Supplier assessment is based mainly on
factors such as the company’s financial
robustness, capabilities, capacities andstanding in the market. The respective
Business Unit’s Quality Assurance (QA)
team will monitor service delivery andthe need to retain or replace service
providers. This activity is also typicallyscrutinized by our clients’ own Quality
Assurance (QA) management.
Part of our unique selling proposition(USP) is how quickly and flexibly we canrespond to client and customer requirements, and this is reflected in the leadtime we can offer our suppliers. Ourdelivery services providers are expected to meet certain key performanceindicators, such as delivery accuracy
and timeliness, which are monitored
over time and may lead to performance
improvement discussions (applicable
mostly in our Fast-Moving Consumer
Goods and Healthcare businesses).
Since our clients and customers value
our reliability, we seek long-term stable
relationships with critical suppliers. For
our crucial delivery services, we use a
few main providers in each market.
Corporate Supply Chain Management(SCM) sets the standards for transport
logistics suppliers and oversees implementation of the standards in local operations.
Importantly, our standards require
suppliers to be dealt with fairly andtransparently, and for the results oftender or bidding processes to becommunicated openly.

Our procurement teams form part of
the target audience for risk-based
training pertaining to anti-corruption
and conflicts of interest. DKSH is boundto investigate any complaints raised bysuppliers of unfair or unethical practices conducted by any of our employees
or by their competitors. At the sametime, we also expect our suppliers to
act in line with our principles and standards, as expressed via our Supplier
Code of Conduct and to report any
non-compliance as per reporting channels identified by the Code.
Third-party intermediaries are undergoing a risk-based integrity assessment, with focus on briber y andcorruption and other social criteria. A
stringent due diligence process isapplied for supplier assessment,
selection, and onboarding. Supplierassessments in 2021 had been limited
to t wo pilot countries (Vietnam,
Malaysia) as well as to Business Unit
Technology, and will henceforth be
deployed to other operations andmarkets. We furthermore intend toenhance our due diligence processes in
2022 to include social and environmental criteria and will inform aboutprogress in future reports.
In 2021, 100% of new suppliers in
Vietnam, Malaysia and Business Unit
Technology globally were screened forsocial criteria.
GRI 204-1

43

SocialOccupational Health and Safety

Occupational health and safety (OHS)
is a top priority for DKSH. The management of OHS risks is addressed throughour cor porate Heal th , S afe t y &Environment (HSE) policy. The scope of
the policy includes all DKSH operations
worldwide and encompasses all activities and facilities. Local country management is responsible for operating a
HSE management system (HSE-MS)
that ensures compliance with applicable regulations, with due consideration
to the nature and risk profile of local
operations. The management are supported by qualified local HSE managers, tasked with the implementation,and monitoring of the HSE-MS.
In 2021, we introduced and launched anenhanced corporate HSE-MS whichreferences the current leading ISO
45001, OHSAS 18001, and ISO 14001
standards. Local HSE managers aretasked with ensuring that local HSE-MS
are aligned to the corporate HSE-MS as
applicable. Our HSE-MS also encompasses the health and safet y ofcontractors we appoint to support ourservice delivery. To reinforce our commitment to safe practices for contractors, we released a new Contractor
Safety Management guideline this year.
Contractors involved in higher risk
activities, such as operating forklifts,
are evaluated based on their health andsafety performance and processes, including injury/illness performance,
special skills and training, effective
work procedures, instructions, or
equivalent HSE-MS, and compliance toapplicable licensing, rules and regulations. Safeguards for contractors operating on our sites include Working
I n s t r u c t i o n s o n V i s i t o r S a f e t y,Contractor Safety and Permit to Work
(which also covers safe driving), andContractor Guidelines. The performance of our HSE-MS is regularly audited by internal and external parties
including our key clients. Country-levelinternal self-assessment, audits andreviews are also conducted by the local
HSE Manager to support continuous
improvement.
Hazard Management
Timely and proper hazard identificationand proactive management of healthand safety risks is 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,

44

Socialchemical spills, etc.). The assessments
f o ll o w t h e a p p li c a b l e St a n da r dOperating Procedure and Guidelines,
and the process is overseen by appropriately qualified Country HSE personnel in close collaboration with risk owners and cross-functional stakeholders.
The overall objective is to ensure timely identification of hazards and risks
and implement control and recovery
measures to reduce health and safety
risks to as low as reasonably practicable (ALARP). Governed by our policyand HSE-MS, all employees and workers
are required to quickly report any hazards or risks they identify to their line
management. All accidents, incidents
and near misses must also be promptly reported to line management to ensure timely investigation and corrective
action. Employees and workers are
obliged to stay alert to potential healthand safety incidents in the workplace,and are empowered to work with line
management towards establishing andapplying the hierarchy of controls
based upon ‘E-SEAP’ (i.e. Eliminating
the hazard, Substituting the hazardous
with less-hazardous, Engineering controls, Administrative controls and PPE).
Employees and workers are also empowered to avoid and remove themselves from potentially harmful situations as necessary and to inform theirline manager. It is against our Code of
Conduct to punish any employee orcontractor who, acting in good faith,
reports an issue or removes themselves from a situation on HSE grounds.

In line with our commitment to continuous improvement of health and safety management, it is essential that any
incidents are reported and investigated, and that remedial action is taken toprevent reoccurrence. All accidents,
incidents, and near misses are investigated. For injuries, significant process
safety events, and incidents with highpotential impact, root cause analysis isper-formed, and the lessons learned
are communicated across the relevant
parts of the organization. To support
effective enquiry, DKSH encourages aculture of open communication between employees, workers, and line
management.
Our policy and HSE-MS require the output of these hazard identification andrisk assessment activities to be documented and used for the developmentof health and safety objectives, plans,
and appropriate risk control measures.
Country HSE Managers are accountable
for the development and documentation of health and safety objectives andtargets before seeking review and approval from Countr y HSE Steering
Committees. Objectives and targets
based on hazard identification and risk
assessments are periodically reviewed
and communicated to employees andworkers, and/or other stakeholders asapplicable.
Employee Engagement and Training
Employee and worker participation,
consultation, and communication activities are mostly conducted via local
workshops and engagement sessions
on occupational H&S.

Employees and workers are encouraged to provide input and feedback on
constructive improvements towards
supporting health and safety standards
in the workplace. Extra awareness sessions may be convened shortly after anincident or accident. Our employees
and workers can also approach theirline managers and local HSE team at
any time to report dangers and risks.
DKSH is committed to providing necessary health and safety information,
instructions, and training to everyone
working in our operations. Local country HSE Managers are responsible for
identifying OHS training needs and implementing the company wide OHS
training program, supplemented by
local country regulatory content. In
specific cases, such as following an incident or when a new piece of equipment is introduced, the local HSE teamcan develop their own tailored training
materials. Building on the DK SH
Learning Management System (LMS),
health and safety training includes traditional face-to-face classes as well as
online courses and materials. New employees receive comprehensive healthand safety induction training on top of
any job-specific training they require.
All new recruits must complete induction training (with signed attendance
records) before commencing duties.
Periodic refreshers are held, and attendance is monitored.

45

SocialDKSH countries run local campaigns
designed to promote health and safety
awareness among employees and other workers. In 2021, most DKSH countries continued to focus on COVID-19
awareness and prevention, as well as
general health and safety related toworking from home. We continued tohold dialogue events, information days,
courses and training for employees andother workers to regularly inform ouremployees about current health topics.
Addressing Impacts in the Supply
Chain
We are not only committed to ensuring
the health, safety, and general wellbeing of people working at our sites,
but also contractors in operations outside of our control, such as transport
or warehouse logistics providers. The
management of hazardous chemicals
is often outsourced to specialized providers who must have in place the necessary standards and systems to qualify for outsourcing. This equally applies
to original equipment manufacturers(OEM). From all our service providers
we expect clear commitments to proper business conduct, including healthand safety for their workers, embodiedin our Supplier Code of Conduct.
GRI 403-1 to GRI 403-7

2021 Performance
In 2021 our workplace safety was audited by key clients, customers, standards
boards, and regulatory bodies, plus ourinternal Supply Chain Management andHSE teams. Key hazards mainly consisted of improper behaviors at operational level relating to operating forklifts
and powered equipment, stacking ofloads and storage of materials, manual
lifting and/or handling, unsafe driving
on roads, and the risk of exposure topotentially dangerous goods and hazardous substances. Actions taken to
manage these risks continue to include
engineering and administrative controls, additional training, and the provision of personal protective equipment. Much effort has also been put
into a road safety improvement program in Thailand, incorporating measures to monitor and report speeding,as well as active stakeholder engagement and training.

Despite an increase in reportable incidents in 2021 – primarily due to the
onboarding of field marketing services
in Australia, which were acquired in
2020, we are pleased to report zerowork-related fatalities and zero incidents of high-consequence work-related injuries in 2021. We will continue tostep up efforts to engage our workforce on the importance of health andsafety incident prevention and mitigation.

46

SocialWork-Related Injuries
Number
Employees

Rate1

2020

2021

2020

2021

Fatalities from work-related injuries

1

0

0.01

0

High-consequence work-related injuries

0

0

0.0

0.0

Recordable work-related injuries

49

70

0.7

1.0

68.9

67.3

-

-

Number of hours worked (in million)

NumberWorkers (all, no exclusions)

Rate1

2020

2021

2020

2021

Fatalities from work-related injuries

0

0

0

0

High-consequence work-related injuries

0

0

0

0

Recordable work-related injuries

9

14

0.6

1.0

14.1

13.4

-

-

Number of hours worked (in million)1

per 1,000,000 hours worked

Main Types of Work-Related Injuries
Employees
Types of injury

Other Workers

2020

2021

2020

2021

No. of first aid injuries

45

69

10

3

No. of medical treatment beyond first aid

6

8

1

1

No. of job restrictions or transfers

2

0

0

0

No. of lost time injuries

40

62

8

13

No. of fatalities

1

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 responsible for recording incidents into incident registers and toreport these for consolidation at group level.
GRI 403-9

Governance48

Governance

Economic Performance

Economic performance refers to ourability to operate a profitable businessmodel while living up to our corporate
value of “Sustainability”, which means
taking responsibility for our environmental, social and economic impact.
DKSH drives a clear strategy for sustainable, profitable growth that continuously increases our market shareand helps our clients expand theirbusinesses. Both our business operations and charitable activities support
the 2030 Sustainable Development
Goals of the United Nations.
The economic value that we generate
promotes sustainable economic
growth and benefits our stakeholders,such as providing returns and dividends for our shareholders, salaries
for our employees and tax payments
to local governments.

DKSH also supports a diverse range ofsmaller community-based charities
which directly address local needs.
DKSH’s strategy for economic value
generation is based on our three strategic pillars:• We focus on our existing Business
Units and markets to leverage ourleadership position• We continuously strengthen and extend our service offerings to ensure
long-term success for our clients andcustomers• We progressively drive improvementin the efficiency and effectiveness of
our processes.
DKSH has a Group Tax Policy in place,which is reviewed annually by the CFO
and Head of Tax.

The policy is approved by the Board of
Directors and any proposed amendments are subject to the Board’s approval.
DKSH is committed to complying withtax law in all operating markets and to
paying taxes in the markets where therevenue was generated. Intra-grouptransactions are carried out undermarket conditions and are supported
by transfer pricing documentation.
DKSH monitors its financial performance through a process steered by
the CEO, the CFO and the Board of
Directors. The Group publishes its results twice a year. Please refer to our
Annual Report for more information.
GRI 201-1 data: see more on page 61
in Appendix

49

GovernanceMarket Presence

DKSH distributes clients’ products inlocal markets, particularly in Asia
Pacific. Our in-depth knowledge ofthese markets is a key part of the value
we bring to our clients, who often do
not have a local presence. An importantpart of our service offering is our market coverage via a capillary distribution
network, serving customers wherever
they are located. Acquisitions is a key
element of our strategy to maintain ourleading position and expand our presence in new markets. In 2021, DKSH
successfully executed seven acquisitions spanning the healthcare, consumer goods, performance materials andtechnology industries.
Operating as part of each community
we do business in is par t of ourcorporate culture. We also believe thatsharing business practices acrosscultures contributes to local skills andeconomic development. Our diverse
management teams represent various
cultures and backgrounds and help
DKSH to serve as a bridge between international clients and local customers.
DKSH employs around 33,100 employees, covering 87 nationalities, meaningthat we speak the language and understand the culture of our business partners in the 36 markets we operate in.
In 2021, 79% of our market leadershipteams were locally hired. Within ourmarkets with significant operations,
68% of all senior managers were hiredfrom the host country, with “senior”
referring to managers in corporate, regional, or local management roles.
Local management roles include firstand second-line managers (2020: 65%).

DKSH defines significant operations as all markets with more than
500 employees. This includes the
10 markets of Australia, Cambodia,
Hong Kong, Indonesia, Malaysia,
Myanmar, Singapore, Taiwan,
Thailand and Vietnam.
GRI 102-4

In 2021, 68 % of local senior managers in our markets with significant operations had been hiredfrom local communities.
GRI 202-2

50

GovernanceAnti-Corruption

At DKSH, we are committed to actingwith integrity and conducting our business in an ethical manner. This includes
not tolerating any form of bribery or
corruption – issues that have been formalized in our DKSH Code of Conductand our A nt i - B r ib e r y and A nt i Corruption (ABAC) policy.
Most of our business is conducted in
Asia where several of the markets andindustries we work in are generally
viewed as having higher exposure tocorruption risks. It is, therefore, imperative that our employees and business
partners both understand our values
and our expected standards of business conduct and uphold these principles in all their activities.
The Board of Directors of DKSH Holding
Ltd is responsible for adopting theGroup’s compliance standards andpolicies and supervises their application. In tandem with local governancebodies, the senior leadership plays apivotal role in communicating our values by word and by example. This includes DKSH’s Executive Committee atGroup level (ref. DKSH’s 2021 Annual
Report, page 25) as well as the Boardsof our publicly listed entities in Malaysia
and Indonesia, and all our local Country
Management Teams.
Compliance Program
Fraud and embezzlement are risks
faced by most organizations and arealso recognized by DKSH as risks to be
actively monitored and managed. As
an organization operating in markets
and industries where inducements inthe form of gifts, hospitality or otherformats are not uncommon, the active
management of bribery risks featureshigh on our corporate agenda.

Our management approach to mitigating these risks is addressed throughseveral group policies, including our:
• 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 Interac tion with
Healthcare Professionals (IHCP) for
our Pharmaceutical, Medical Devices
and Diagnostics product categories• Non-Trade Procurement (NTP) Policy

51

GovernanceCompliance with our standards on
ant i - br ib er y is addres se d v ia acomprehensive compliance management system and program, as informedby our ABAC policy and related policies
which reflect recognized international
regulations, such as the U.K. Bribery
Act 2010 or the U.S. Foreign Corrupt
Practices Act. Our governance processes include fraud risk assessments andfraud prevention covering the entire
DKSH organization via segregation ofduties and an internal control system(ICS), which is overseen by the Group’s
Finance function. such as the U.K.
Bribery Act 2010 or the U.S. Foreign
Corrupt Practices Act. Our governanceprocesses include fraud risk assessments and fraud prevention covering
the entire DKSH organization via segregation of duties and an internal control system (ICS), which is overseen by
the Group’s Finance function.

For example, the use of intermediaries
in business transactions potentially increases the risk of bribery; controls
include due diligence requirements for
either standard or enhanced procedures depending on the assigned risk
levels.

Risk Assessment
In 2018, we launched an enhanced bribery risk assessment process1 for deployment across all our markets, withprioritization based on country scoresin Transparenc y Inter national’s
Corruption Perception Index (CPI). By
the end of 2021, 17 of our markets (47%)
had adopted our risk assessment process, representing 100% of our significant operations as well as 95% of our
net sales, and 100% of operations located in territories exposed to higher risks
as per the CPI rating.
GRI 205-1a

Conflicts of Interest
In addition to risk assessments, theexecution of our compliance program
includes training, education, reviews,
and audits, as well as investigations
and corrective actions in the event ofincidents arising. Managing conflictsof interest is a critical part in any
compliance program. In our 2020
Sustainability Report, we announced
the impending launch of a new corporate policy and associated procedureson the disclosure and management ofconflicts of interest (COI). This policy
was introduced with the support of an
online training module which began in
the latter part of 2020.

Risks are identified based on detailed
process mapping. Risk levels are determined by applying the Group’s Risk
Management policy and procedures,
and appropriate controls are assigned.

All risks and their mitigating controls
are documented in detailed Bribery
Risks & Controls (BRC) templates.
Controls include documentation of control processes and procedures, howcontrols are communicated within theorganization and how the relevant personnel are instructed and trained toperform controls. BRC templates arereviewed and updated annually to ensure their currency, and they build thebasis for review and enforcement activities by the corporate complianceteam.
GRI 205-1b

Training activities continued in 2021
and concluded with all the 13,157 relevant employees (all management level
and those potentially exposed to COI
situations) completing COI training
during the year. Going forward, COI
refresher training will form part of theannual training curriculum.
Training and Education
Training and communication areimportant cornerstones of our compliance program and are instrumental indriving and maintaining a culture of
ethics and compliance. All new employees must undergo mandatory training,
including Code of Conduct and anticorruption training, as part of ourthorough onboarding procedures
within three months from joining ourorganization.
Periodically, all employees are required
to refresh their knowledge of DKSH’s
anti-corruption policies. Our 2021 training focus, alongside completion of the
COI launch training, was an Antibribery and Anti-corruption policy
refresher online training for a total of
16,096 employees, selected for theirrisk exposure of their role but also if
having risk control responsibilities, withthe following completion ratios:
Based on “Diagnosing Bribery Risk”,
Guidance for the Conduct of Effective
Bribery Risk Assessment, Transparency
International UK1

52

GovernanceAnti-Corruption Training Completion
RegionIn Scope

Completed

Ratio

Thailand

4,854

4,854

100.00%

Malaysia and Singapore

1,823

1,823

10 100.00%

Greater China*

1,234

1,234

100.00%Rest of Asia Pacific

7,855

7,396

94.2%

Rest of the World

330

327

99.1%

16,096

15,634

97.1%

Total

By region only, data by functional level is currently not available
GRI 205-2e

In 2021, 100 percent of governancebody members were aware of
DKSH’s anti-corruption policies andhad completed anti-corruption
training
GRI 205-2a,dRegionTotal Governance Body Members

Thailand13

Malaysia and Singapore

22Greater China*

19

Rest of Asia Pacific85

Rest of the World

49

Total

188

* Includes mainland China, Hong Kong, Macau and Taiwan

53

Governance

Ethics in the Medical Sector
DK SH’s Healthcare Business Unit
distributes pharmaceuticals and medical devices and regularly interacts withhealthcare professionals (HCP). DKSH,
through active membership in therespec tive industr y associations,
supports ethical business conduct via
endorsement of the relevant industry
codes of ethics (IFPMA, APACMed).
Comprehensive Manuals forInte rac t ions w i t h HCP s for o ur
Pharmaceutical, Medical Devices andDiagnostics product categories convert
these codes of ethics into internal
processes and procedures aimed atensuring compliance with the relevant
local codes whenever interacting with
HCPs and further enhancing DKSH’s
compliance program.
Integrity Along our Supply Chain
As an outsourcing partner to our clients, we are committed to upholding
integrity in the supply chain within oursphere of influence. This includes ourbusiness partners, for example customs brokers, event organizers andforwarding companies, whom we rely
on for parts of our service delivery.
DKSH does not maintain relationships
with business partners that do notshare our values or meet our standards
for doing business. Business partners
are engaged based on written service
contracts that include anti-corruption
compliance clauses, with both our
Supplier Code of Conduct and the ABAC
policy serving as contractual requirements. All service providers need toundergo risk-based due diligence procedures prior to being admit ted.
Screening processes are periodicallyrefreshed upon contract renewal orwithin one year of admission, or on an
ad hoc basis when specific warning
signs have been raised through ourmonitoring processes.

Anti-corruption policies and ourSupplier Code of Conduct are communicated to all business partners
acting for and on behalf of DKSH.
GRI 205-2c
Integrity Line
In 2020, we introduced our Integrity
Line, a secure online whistleblowing
platform providing employees andexternal parties with a 24/7 channel forreporting concerns in confidence and,at the reporter’s discretion, anonymously. The launch of the Integrity Linewas broadcast internally by the CEO,encouraging employees to speak up
whenever coming across a reportableconcern. This was reinforced by local
communications during 2021, which willcontinue, with the aim of giving
employees the confidence to speak up
and promptly report any incidents ofcorruption or other misbehaviours.
Under the guidance of the Group’s
Compliance or Internal Audit functions,cases are investigated, and errant parties are adequately sanctioned, with
DKSH having zero tolerance for retaliation against anyone who reports incidents in good faith. Corresponding
assurances are provided to employees
via clear commitments contained in the
ABAC and other policies, and to thosereporting via Integrity Line.
For 2021, we recorded a total of 44
reports via Integrity Line, of which 37
cases were sufficiently substantiatedto warrant further investigation. Mostof the reports related to fraud and embezzlement (39%), followed by reports
relating to personnel matters (27%) andseveral Code of Conduct breaches inother categories.

All investigations were conducted internally and resulted in several disciplinary actions including recommendations to dismiss (7), one warning letterand one financial measure.
GRI 205-3
Effectiveness of the Compliance
ProgramManagement at all levels is responsible
and accountable for ensuring proper
application of compliance standards inthe business. The Group’s compliancefunction supports management by
providing advice, methodologies andtools, and performs reviews to assess
the level of awareness, understanding
and application of standards and compliance controls through a structured
review and tailored enforcement
program. Furthermore, the Group’s
internal audit function is equipped toperform compliance audits throughaudit assignments based on their
independent risk assessments, and independently reports to the Board of
Direc tors on the results of suchassignments.
Externally, DKSH’s compliance programis assessed by prospective or active clients and/or external audit firms appointed by them. We give our full assistance to these assessments, which
include thorough due diligence procedures and pre- or post-contract compliance audits and reviews, and we
make use of the results of such assessments, if any, to further strengthen ourcompliance program.

54

Governance

Customer Health and Safety

DKSH’s business is built on trust andintegrity. Our clients entrust us withthe marketing and distribution of theirproducts and expect us to preserve thequality and safety of their goods whilst
u n d e r o u r c a r e a n d c u s t o d y.
Irrespective of the product categories
we are handling – which include items
as diverse as pharmaceuticals, food,specialty chemicals and machinery – weoperate quality management systems
to ensure we meet the high standards
necessary to safeguard the health andsafety of customers, consumers andpatients. This includes assurance that
all our products originate from authentic manufacturing processes, avoiding
potential safety issues from counterfeit
products.

Our management approach adapts to thedifferent business lines and productcategories we handle and the corresponding regulations governing them. Products in
the healthcare sector must focus on patients afet y and me et s tringent qualit ystandards specified by clients and regulatorsand comply with international guidelines(e.g. from the World Health Organization,
the International Council for Harmonizationo f Te c h n i c a l R e q u i r e m e n t s f o r
Pharmaceuticals for Human Use, and thePharmaceutical Inspection Co-operation
Scheme). All our Healthcare distribution facilities are approved by the respective local
health authorities with the appropriate
internationally re co gnize d Q ualit yManagement System certification (e.g. ISO
9001 and ISO 13485).

Any issues with product safety are handled
under stringent pharmacovigilance procedures by our regulatory affairs specialists.
Food safety is another significant concernthat we address through quality management procedures, whether for finishedgoods distributed by our Consumer Goods
business or food ingredients marketed by
our Performance Materials business. Our
quality assurance and regulatory affairs
teams ensure that our products and operations comply with applicable regulations set
by the respective food and drug administrations in the countries where we operate.

55

Governance

The handling of chemicals poses a different
set of challenges that we manage throughstringent safety procedures based on applicable standards including ISO 9000, theClassification, Labeling and Packaging (CLP)
regulation, and our own Standard Operating
Procedures (SOPs), as well as DKSH’s Health,
Safety and Environment (HSE) policy, enhanced through a new HSE management
system and a new guideline for the management of hazardous chemicals and dangerous goods, both developed in 2020 andenacted in 2021 .
In our Technology business, our focus is on
safety procedures for the operation of machinery and equipment by our customers.
Where applicable, our products are tested
before delivery and our service offering also
includes installation, commissioning andtraining to ensure proper and safe operation. All our service engineers are trained by
the original equipment manufacturers.

Our operations are frequently audited byour clients or their appointed auditors toensure that storage and handling of products meets their expected standards. Dueto the sensitivity of the products, most ofthese audits occur in the Healthcare business. In 2021, 87 such audits took placecompared to 82 audits in 2020.
Any deviations from applicable standards
detected through reviews, audits or complaints are promptly reported and addressed. Product recall procedures are inplace and DKSH constructively cooperates
with authorities, clients and suppliers should
recalls occur.

DKSH recorded zero incidents of
non-compliance concerning healthand safety impacts of products andservices in 2021
GRI 416-2

56

GovernanceMarketing and Labeling

Our company’s main activity is to market and distribute products sourced
from manufacturers. Many of our products are imported and require local
customization before being fit for sale.
Additionally, a core activity in our service delivery to clients and customers
is the advertising and promotion of the
products in the markets we serve.
The marketing of our products caninvolve various risks if not managed
properly or supported with the relevant
and necessary product information.
Rising public awareness and new policy
initiatives on transparenc y haveincreased demand for correct and complete product information, making this
topic highly relevant for DK SH’sbusiness model and brand reputation.

Product adaptation and customization
to meet regulatory requirements, including product labeling, is an important DKSH service offering. Our regulator y af fairs teams in the various
Business Units are responsible fore s t a b l i s h i n g r e l e v a n t St a n da r dOperating Procedures and for monitoring compliance, with assistance fromour quality assurance teams. In our
Business Unit Healthcare, where regulations are particularly stringent, we
perform customization work in accordance with Good Manufac turing
Practices (GMP). In Business Unit
Performance Materials, we implement
and audit against the strict requirements for classification, labeling andpackaging of the Globally Harmonized
System (GHS).

For the marketing of our own-brandproducts, our regulatory affairs teams
ensure compliance with applicablelaws. For all products distributed by theBusiness Units Consumer Goods and
Healthcare, we observe guidelines on
responsible marketing published by therelevant industry bodies. Policies, procedures and controls are in place andare supported by training activities toensure that the marketing of our products meets our standards and expectations. All our regulatory affairs specialists have the required professional
training and qualifications to performtheir work in accordance with applicable regulations and internal standards.

57

Governance

DKSH carefully monitors and validates
relevant product data from clients on
an ongoing basis and takes corrective
ac tions where appropriate. A ny
complaints about marketing and labeling are addressed by the relevant
Business Unit.

In 2021, DKSH recorded zero incidents regarding marketing andlabeling practices.
GRI 417-3

Indus tr y-Spe cif ic R isk s in the
Healthcare Business
Advertising and promotion of healthcare products in many jurisdictions arehighly regulated, often limited or evendi s all owe d . Many p ro du c t s areprescribed or dispensed by healthcare
professionals, or they require professional expertise for their application.
Various segments in the healthcare
industry (specifically for prescription
drugs and medical devices) and in thefood sector (e.g. infant nutrition) haveadopted codes of ethics advocating
responsible marketing of their products. DKSH adheres to these standards
through membership of the respective
industry associations (e.g. local IFPMA
associations; APACMed) and by operating management programs to ensurecompliance by employees and service
providers.

58

Governance

Information Security

In today’s digital and interconnectedworld, the risk of data theft or leakage
has risen, and information security
should be a key concern for all companies. Through our business operations,
we generate and have access to significant amounts of data relating to products and services as well as our custo m e r s an d b u sin e s s p ar t n e r s .
Unavoidably, we also serve clients whoare competitors. Ensuring confidentiality is therefore crucial. We also mayneed to collect personal data relating
to employees, contractors and others.
As stated in our Code of Conduct, weare fully committed to processing andprotecting personal data with due care,and to comply with applicable data protection laws as well as DKSH’s principle
of protecting confidentiality.

Our information security program andcyber security strategy is endorsed andsupported by the Executive Committee
and the Board of Directors, under the
responsibilit y of the Group Chief
Information Officer. Our strategy focuses on implementing cyber threat
preventive counter measures, developing an organization-wide information
security maturity model, and runninggroup-wide cyber security awarenessprograms.
In line with our strategy, we have an IT
Security Policy in place and a dedicatedglobal Information Security team,which is available via a 24/7 hotline forurgent security matters.

We train our staff on various topics relating to information security. In 2021,
more than 17,300 employees completed
the security awareness online program(2020: more than 8,000 employees).
DKSH’s main IT hub is in Malaysia.
However, each market has its own local
IT team responsible for regular additional IT security training. QuarterlyGroup-wide IT newsletters as well as
ad-hoc IT news flashes ensure thatawareness of sensitive topics is maintained across all markets.

59

GovernanceIn 2018, DKSH achieved ISO 27001:2013
certification of the Corporate Shared
Services Center SAP infrastructure on
information security management.
Following the cer tification, DKSH
conducted several surveillance audits
to ensure process adherence. A successful ISO 27001:2013 re-certification
took place in 2021. Our quality assurance team ensures that the required
standards are maintained on an ongoing basis.
Group Internal Audit conducts independent audits on access management. Additionally, the Group I T
Security team performs audits on all
country IT installations on a regularbasis. Our business continuity and contingency plans, as well as incident response procedures, are tested twice
yearly.

As in previous years, DKSH received
no complaints related to data
breaches of customer privacy andloss of customer data from outside
parties or regulatory bodies in
2021. Similarly, DKSH is not awareof any identified leaks, thefts, orlosses of customer data
GRI 418-1

Appendix

61

Appendix

Value Generation
2020
in CHF milions

2021
in CHF millions

Direct Economic
Value Generated

Revenues

10,789

11,170

Economic ValueDistributed

Operating Costs(9,825)(10,111)

Employee Wages and Benefits

(696)

(738)

Payments to Providers of Capital

(165)

(146)

Payments to Governments (Taxation)

(58)

(75)

Direct Economic Value Generated−
Economic Value Distributed

45

99

Economic Value
Retained
GRI 201-1

62

Appendix

Stakeholder Engagement
Identification of relevant stakeholder groups resulted from an assessment carried out by senior management.
Groups were selected based on their abilities to influence or impact (directly or indirectly) DKSH’s approach to business,or the potential for DKSH to have an impact on them.
DKSH engages with the identified stakeholder groups as follows:

Stakeholder GroupEngagement and Key Topics

Clients

As a partner in the downstream supply chain, our engagement with clients is themost intense of all stakeholder groups. Discussions on expectations are part ofdue diligence, business negotiations and sustainability audits. Other examples
of engagement are annual client satisfaction surveys and regular business reviews. Topics are focused on employment practices, responsibility in the supply
chain, product stewardship, health and safety, anti-corruption, information security and, lastly, our emissions.

Suppliers, Vendors

Our engagement with suppliers and vendors is mainly via business negotiations
and business reviews during the financial year. Vendor concerns are primarily
ethical business practices, including fair competition and anti-corruption. DKSH’s
expectations are enshrined in our Supplier Code of Conduct.

Employees

As a service provider, employees are our most important asset. Therefore, employee engagement and satisfaction are of highest importance. We conduct periodic structured employee engagement surveys and promote an open feedback
culture. Employee concerns mainly are good corporate citizenship, fair employment practices, development opportunities and associated training, safe andhealthy workplaces, our safeguarding of the environment, the integrity of our
products and services, as well as our engagement with local communities.

Customers

Our direct interaction with customers through our operations focuses mostly on
their expectations or areas of concern. Engagement with customers in the manufacturing industries in our Business Unit Performance Materials is most intense
and key topics include procurement practices.

Shareholders, Investors

DKSH directly engages with investors via roadshows and meetings as well as indirectly through interaction with sustainability rating agencies. Investors’ maininterests are economic performance, corporate governance, environmental topics, customer health and safety, and anti-corruption.

Local communities

Our local management directly engages with the communities in the markets weoperate to address topics such as labor practices and environmental responsibility.

Authorities

DKSH is in continued exchange with authorities as part of the licensing process
and other regulated activities to ensure legal requirements are met.

GRI 102-40, 102-42 to 102-44

63

Appendix

Further Details About Our Employees
All 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 HRIS
system.
The total headcount excluded 218 employees who joined following a merger and acquisition exercise in 2021; this data wasformally reflected in the SAP HRIS system from April 2022.
GRI 102-8
Total Number of Employees by Employment Contract (Permanent and Temporary), by Gender
Gender

Permanent% of total

Temporary% of total

Total

Female15,971

89.0%

1,953

11.0%

17,924Male

14,349

96.0%

605

4.0%

14,954

Other

-

-

3

100.0%

3

Total

30,320

92.2%

2,561

7.8%

32,881

Total Number of Employees by Employment Contract (Permanent and Temporary), by Region
RegionPermanent% of total

Temporary% of total

Total

Thailand

10,589

98.0%

222

2.0%

10,811

Malaysia andSingapore

5,393

99.9%

3

0.1%

5,396

Greater China*

2,652

97.4%

70

2.6%

2,722

Rest of Asia Pacific

11,219

83.2%

2,259

16.8%

13,478Rest of the World

467

98.5%

7

1.5%

474

30,320

92.2%

2,561

7.8%

32,881

Total

Total Number of Employees by Employment Type (Full-Time and Part-Time), by Gender
GenderFull-time% of total

Part-time% of total

Total

Female15,959

89.0%

1,965

11.0%

17,924Male

14,091

94.0%

863

6.0%

14,954

Other

–

–

3

100.0%

3

Total

30,050

91.4%

2,831

8.6%

32,881* Includes mainland China, Hong Kong, Macau and Taiwan

64

Appendix

Membership of Associations
DKSH companies are members of several associations in the markets we operate, with a focus on industry associations forthe chemical, pharmaceutical and food industries, as well as membership of chambers of commerce. Membership is generally considered from a strategic perspective, and in some instances, DKSH managers hold positions in governance bodies, participate in projects or committees.
DKSH does not provide funding to associations beyond routine membership dues, apart from our membership of the Swiss
Chamber of Commerce and Industry in Japan, for historic reasons (this is where DKSH was originally founded in the 19th
century; we are the Swiss company with the longest uninterrupted presence in Japan).
The list below provides an overview of membership of associations by market.
GRI 102-13

MarketName of Association or Advocacy Organization

Australia

Australian Food & Grocery Council (AFGC)
Australian Sales & Marketing Companies Association (ASMCA)
Australian Pesticides and Veterinary Medicine Authority
Medicines Australia

Cambodia

European Chamber of CommerceFranceCosmet'in Lyon (Association for Dermocosmetology)
France Chimie (French Chemicals Association)
French Cosmetics Association for SMEs (COSMED)
Union Française du Commerce Chimique (UFCC)

Germany

German Chemical Distribution Association (VCH)

Hong Kong

Hong Kong Association of Pharmaceutical Industry

Indonesia

GAKESLAB Indonesia DKI Jakarta
Gabungan Perusahaan Farmasi Indonesia
Persatuan Perusahaan Kosmetika Indonesia (PERKOSMI)Japan

German Chamber of Commerce and Industry in Japan
Swiss Chamber of Commerce and Industry in JapanTokyo Chamber of Commerce and Industry

Korea

Korea Medical Devices Industry Association

Laos

Lao National Chamber of Commerce and Industry

Malaysia

Federation of Malaysian Manufacturers (FMM)
Malaysia International Chamber of Commerce and industry (MICCI)Malaysia Medical Device Association
Malaysian Animal Health and Nutrition Industries Association
Malaysian Electrical Appliances Distributors Association (MEADA)
Malaysian Employers Federation (MEF)
Pharmaceutical Association of Malaysia (PhAMA)
Swiss Malaysian Business Association (SMBA)

65

Appendix

Myanmar

Myanmar Chamber of Commerce for Pharmaceutical and Medical Device
Myanmar Cosmetic Association
Union of Myanmar Federation of Chamber of Commerce & Industries

New Zealand

New Zealand Food and Grocery Council

Philippines

Philippine Swiss Business Council

Singapore

Machine Tool Club
Singapore Association of Pharmaceutical Industries (SAPI)
Singapore Business Federation
Singapore International Chamber of Commerce

Spain

Associación de Fabricantes y Comercializadores de Additivos y Complementos
Alimentarios (AFCA)
Sociedad Espaňola de Quimicos Cosméticos (SEQC)
Spanish Chemicals Distributors Association (AECQ)

Switzerland

Association of Pharmaceutical Companies in Switzerland (vips)
Association Patronale de l'Horlogerie et de Microtechnique (APHM)
Federation of the Swiss Watch Industry FH
Scienceindustries Switzerland – Business Association of Chemistry Pharma Life
Sciences

TaiwanInternational Research-Base Pharmaceutical Manufacturers Association(IRPMA)
Taipei Instruments Commercial Association
Taipei Machinery Traders’ Association
Taipei Medical Instruments Commercial Association
Taipei Pharmaceutical Agents and Distributors Association
Taipei Pharmaceutical Business Association
Taiwan Advanced Medical Technology Association
Taiwan Cold Chain Association
Taiwan Commercial Kitchen Equipment Development Association
Taiwan Pharmaceutical Marketing & Management Association
Taoyuan Pharmacists Association

ThailandCosmetics Industry Association
GS1 Thailand, The Federation of Thai Industries
Health Food Supplement Association (HSFA)
Pharmaceutical Research & Manufacturers Association (PReMA)
Regulatory Affairs Pharmacy Association, Thailand (RAPAT)
Thai Cosmetic Manufacturers Association (TCMA)
Thai Medical Device Technology Industry Association (THAIMED)Thai Retailers Association (TRA)

VietnamAmerican Chamber of Commerce
European Chamber of Commerce in Vietnam

GRI Standards & Disclosures

67

GRI Standards & Disclosures

GRI Content Index

About This Report
DKSH’s fifth report, released in July 2022, prepared in accordance with the Global Reporting Initiative (GRI) Standards "Core
option" offers a review of the Group’s sustainability efforts. It outlines our progress over the past year and shows important
areas of action for the future.
If you have any feedback or need further information on our sustainability approach, please contact
sustainability@dksh.com.

Abbreviations:
AR = Annual Report
CB = Corporate Brochure
CoC = Code of Conduct
All documents are available at: https://www.dksh.com/global-en/home/about-us/sustainability.

GRI Standards and Diclosures

References

GRI 101

Foundation (2016)

GRI 102

General Disclosures (2016),
Core option

GRI 102-1

Name of the organization

AR 2021, p. 10

GRI 102-2

Activities, brands, products and services

CB 2022, p. 14-16

GRI 102-3

Location of headquarters

AR 2021 p. 7

GRI 102-4

Location of operations

p. 49

GRI 102-5

Ownership and legal form

AR 2021, p. 10-11

GRI 102-6

Markets served

CB 2022, p. 14-26, 38

GRI 102-7

Scale of operations

AR 2021, p. 4-5, 118-120
CB 2022, p. 38

GRI 102-8

Information on employees and otherworkers

p. 63

GRI 102-9

Supply chain

CB 2022, p. 15-16

GRI 102-10

Significant changes to the organization and its supply chain

AR 2021, p. 47-50

Omissions

The total headcount reported excluded 218 employees who joined
following a merger and acquisition exercise in 2021 because thisdata was formally reflected in the
SAP HRIS system after our reporting period from April 2022.

68

GRI Standards & Disclosures

GRI standards and disclosures

References

GRI 102-11

Precautionary principle or approach

DKSH takes a risk-based approach to managing
its operations and supply chain. Although mostof the products we distribute have been developed by our clients, we run a product stewardship program cover¬ing activities such as storage, labeling, packaging and arranging transportation, and our tracking systems ensure that
any issues can be quickly traced back to thesource. Regular auditing is in place to ensure
product safety and that operations are being run
in accordance with our environmental policies.

GRI 102-12

External initiatives

p. 13, p. 64-65

GRI 102-13

Membership of associations

p. 64-65

GRI 102-14

Statement from senior decisionmakerp. 2

GRI 102-16

Values, principles, standards andnorms of behavior

p. 5, 15-22
CoC

GRI 102-18

Governance structure

p. 23-24
AR 2021, p. 10-34

GRI 102-40

List of stakeholder groups

p. 25, 62

GRI 102-41

Collective bargaining agreements

p. 37

GRI 102-42

Identifying and selecting stakeholder

p. 25, 62

GRI 102-43

Approach to stakeholder engagement

p. 25, 62

GRI 102-44

Key topics and concerns raisedp. 25, 62

GRI 102-45

Entities included in the consolidated
financial accounts

AR 2021, p. 118-120

GRI 102-46

Defining report content and topic
boundaries

p. 25

GRI 102-47

List of material topics

p. 25

GRI 102-48

Restatement of information

No restatement

GRI 102-49

Changes in reporting

There have been no major changes in the material issues we report on between 2020 and 2021.

GRI 102-50

Reporting period

Calendar year 2021

GRI 102-51

Date of most recent report

Published 2022, relating to calendar year 2021

GRI 102-52

Reporting cycle

We intend to update the report on a yearlybasis.

GRI 102-53

Contact point for questions regarding
the reportsustainability@dksh.com

GRI 102-54

Claims of reporting in accordance wit
the GRI Standards

This report has been prepared in accordancewith the GRI Standards: Core option.

GRI 102-55

GRI content index

p. 67-71

GRI 102-56

External assurance

p. 73-74

Omissions

69

GRI Standards & Disclosures

GRI standards and disclosures

References

Economic
GRI 201

Economic performance (2016)

GRI 103

Management approach (2016)

p. 48

GRI 201-1

Direct economic value generated anddistributed

p. 61

GRI 202

Market presence (2016)

GRI 103

Management approach (2016)

p. 49

GRI 202-2

Proportion of senior management
hired from the local community

p. 49

GRI 204

Procurement practices (2016)

GRI 103

Management approach (2016)p. 40-42

GRI 204-1

Proportion of spending on local suppliers

p. 42

GRI 205

Anti-Corruption (2016)

GRI 103

Management approach (2016)p. 50-51

GRI 205-2

Communication and training aboutanti-corruption policies and proceduresp. 51-52

GRI 103

Management approach (2016)p. 27-30

GRI 302

Emissions (2016)

GRI 302-1

Energy consumption within theorganization

GRI 305

Energy (2016)

GRI 305-1

Direct (scope 1) GHG emissions

p. 29

GRI 305-2

Indirect (scope 2) emissions

p. 29

GRI 305-3

Other indirect (scope 3) emissions

p. 29

GRI 307

Environmental compliance (2016)

GRI 307-1

Non-compliance with environmental
laws and regulations

Environment

p. 29

p. 28

Omissions

70

GRI Standards & Disclosures

GRI standards and disclosures

References

OmissionsSocialGRI 401

Recruitment and retention (2016)

GRI 103

Management approach (2016)p. 33-38

GRI 401-2

Benefits provided to full-time employees that are not provided to temporary or part-time employees

p. 37

GRI 403

Occupational health and safety(2018)GRI 103

Management approach (2016)p. 43-45

GRI 403-9

Types of injury and rates of injury, occupational diseases, lost days, absenteeism and number of work-related
fatalities

p. 46

GRI 404

Training and education (2016)

GRI 103

Management approach (2016)p. 34-36

GRI 404-1

Average hours of training per year per
employee

p. 34

GRI 404-3

Percentage of employees receiving
regular performance and careerdevelopment reviews

p. 36

GRI 406

Non-discrimination (2016)

GRI 103

Management approach (2016)p. 33, 37

GRI 406-1

Incidents of discrimination and corrective actions taken

p. 37

GRI 407

Freedom of association and collective bargaining (2016)

GRI 103

Management approach (2016)p. 37-38

GRI 407-1

Operations and suppliers in which theright to freedom of association andcollective bargaining may be at risk

p. 37

GRI 408

Child labor (2016)

GRI 103

Management approach (2016)

p. 38

GRI 408-1

Operations and suppliers at significant risk for incidents of child laborp. 37-38

We do not report this data separately by gender or employee category; however, our equal opportunity policies apply to the availability of training and development opportunities.

Although we operate in countries
which are frequently ranked ashaving a higher risk of humanrights issues on international ratings, we have not identified any
specific risks affecting our operations or supply chain in 2021. In
2021 we continued to roll out acompany-wide training on the
Code of Conduct, which includes
human rights and issues such as
forced labor and child labor, andwe will remind all staff to remain
vigilant and report any concerns
through the channels outlined in
our Code of Conduct.

71

GRI Standards & Disclosures

GRI standards and disclosures

References

GRI 409

Forced or compulsory labor (2016)

GRI 103

Management approach (2016)

p. 38

GRI 409-1

Operations and suppliers at significant risk for incidents of forced orcompulsory labor

p. 39

GRI 412

Human rights assessment (2016)

GRI 103

Management approach (2016)

p. 38

GRI 412-2

Employee training on human rights
policies and procedures

p. 39

GRI 413

Local communities (2016)

GRI 103

Management approach (2016)

p. 39

GRI 413-1

Operations with local community engagement, impact assessment anddevelopment programs

p. 39

GRI 416

Customer health and safety (2016)

GRI 103

Management approach (2016)

p. 54-55

GRI 416-2

Incidents of non-compliance concerning the health and safety impacts ofproducts and services

p. 55

GRI 417

Marketing and labeling (2016)

GRI 103

Management approach (2016)p. 56-57

GRI 417-3

Incidents of non-compliance concerning marketing communications

p. 57

GRI 418

Customer privacy (2016)

GRI 103

Management approach (2016)p. 58-59

GRI 418-1

Substantiated complaints concerning
breaches of customer privacy andlosses of customer data

p. 59

Omissions

Although we operate in countries
which are frequently ranked ashaving a higher risk of humanrights issues on international ratings, we have not identified any
specific risks affecting our operations or supply chain in 2021. In
2021 we continued to roll out acompany-wide training on the
Code of Conduct, which includes
human rights and issues such as
forced labor and child labor, andwe will remind all staff to remain
vigilant and report any concerns
through the channels outlined in
our Code of Conduct.

Assurance ReportVERIFICATION STATEMENTGreenhouse Gas Verification Statement

The inventory of Greenhouse Gas emissions in the period 01/01/2021 – 31/12/2021 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:

5,046 t CO2e (Scope 1 emissions)
54,521 t CO2e (Scope 2; gross location-based emissions for electricity)
67,299 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 Management Ldt (hereinafter referred to as “DKSH”) for the verification of direct andindirect carbon dioxide (CO2) equivalent emissions as provided by DKSH as displayed in their GHG Assertion in the form ofCorporate Responsibility Report 2021. (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 01/01/2021 – 31/12/2021.
SGS conducted a third-party verification following the requirements of ISAE 3000 of the provided CO2 equivalent assertion in
May to June 2022. 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

This engagement covers verification of emissions from anthropogenic sources of greenhouse gases included within theorganization’s boundary and meets the requirements of ISAE3000.
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: 01/01/2021 – 31/12/2021• 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 01/01/2021 – 31/12/2021 disclosing Scope 1 and 2 emissions of 59,567 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 67,299 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 01/01/2021 to 31/12/2021, and in addition to scope 2 emissions of 54,521
metric tonnes CO2 equivalent, is a disclosure of emissions of 29,792 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.
Signed for and on behalf of Société Générale de Surveillance SA, Technoparkstrasse 1, 8005 Zurich, Switzerland

Daniel Aegerter
Lead Auditor

Ingrid Finken
Product Manager Climate Change Services

Zurich, June 30th, 2022

WWW.SGS.COM

Sustainability Report 2021
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: July 2022