Sustainability at DKSH 2018

Think Asia. Think DKSH.

1

Welcome from the CEO

Dear reader,
Welcome to DKSH’s second sustainability reporting compiled in accordance with Global Reporting Initiative (GRI) Standards.
As a Swiss company deeply rooted in Asia for more than 150 years, being a responsible corporate citizen has always been part of the
DKSH mindset. Being a Market Expansion Services provider, our business is built on integrity, trust and reliability. These values areengrained in our culture and are an integral part of our unique selling proposition.
In this second edition of our GRI reporting, we are – for the first time – including our contribution to the United Nations’ Sustainable
Development Goals (SDG). We want to promote these goals through our business activities, with a focus on Asia. You can find more information on our prioritized goals on pages 14 to 15 of this report.
Regarding environmental topics in 2018, we have focused on increasing energy efficiency – with associated carbon and cost savings –in our distribution centers and fleet, as well as greatly expanding our carbon reporting. Our recently implemented transport management
system will further cut emissions and reinforces our safe driving policy. Additionally, we are looking into carbon offsetting options for ourunavoidable emissions.
In the social area, we contribute to society by providing access to healthcare and important daily consumption items through our business activities. Moreover, we supported 34 social projects - twice as many as in the year before.
An important milestone in governance was the introduction of our new Supplier Code of Conduct. This demonstrates our engagement
in continuously promoting higher standards for ethical business practices in our supply chain, now and in the future.

Stefan P. Butz
CEO
2

Content2

Welcome from the CEO

4

DKSH in summary

5

Sustainability at DKSH

16 Environment
17 Environmental responsibility
21 Social
22 Recruitment, retention and development
24 Labor standards
27 Local communities
29 Governance
30 Economic performance
32 Market presence
33 Procurement practices
35 Anti-corruption
38 Occupational health and safety
41 Customer health and safety
44 Marketing and labeling
46 Information security
48 Appendix
53 GRI Standards and Disclosures

3

DKSH in summary

DKSH is the leading Market Expansion
Services provider with a focus on Asia. We
help our clients grow their business in theConsumer Goods, Healthcare, Performance
Materials and Technology markets weserve.

DKSH’s portfolio of services includes sourcing, market insights, marketing and sales,
distribution and logistics as well as after-sales services.

Publicly listed on the SIX Swiss Exchange,
the Group operates in 35 markets with
33,000 specialists, generating net sales of
CHF 11.3 billion in 2018. With its Swiss heritage and long business tradition since 1865,
DKSH is deeply rooted in Asia Pacific.

35

825

33,00011.3

marketsbusiness locations

billionNet sales in CHF (2018)

specialists

4 Business Units

Consumer
Goods

Healthcare

Performance
Materials

Technology

4Sustainability at DKSH

5

Environment

Energy savings of around
1,000 MWh per year due tomore efficient use of air
conditioning in Taiwan

Up to 10 percent fuelsavings with the new transport
network optimization system
Electricity consumption datacollected for 27 DKSH
operating markets

Siti Norazliyana Ali, Team Leader of Melaka Marine
Program, WWF Malaysia:“Corporates can play a crucialrole in nature conservation byhaving their key staff understandhow nature's services and theeconomy are interrelated. The
generous donation received from
DKSH will be channeledtowards the continuation of
WWF Malaysia’s conservation
efforts.”

We are committed to conducting our business in an environmentally sustainable manner. With our focus on the sale, marketingand distribution of products, a significant
part of our environmental impact resultsfrom warehousing, transport and logistics,
and business-related travel.

DKSH encourages employee engagementin green issues. For example, a staff-led
office waste taskforce launched at our
Swiss headquarters in 2018. And in China,
the company organized activities forWorld Environment Day.

6

New logistics technology cuts freight emissions“Our distribution network makes thousands of deliveries every day, with customers
ranging from large hospitals in city centers to small mom-and-pop stores in remoteareas. Much of this distribution is outsourced to freight companies, who previously
also took responsibility for much of the route planning. However, an overly
simplistic approach was increasing journey times and fuel usage and sometimes
resulted in half-empty vehicles driving around on days when we had fewer deliveries tomake.
We are now implementing a transport planning tool which helps us select each day themost efficient plan from numerous possible combinations of vehicle loads, vehicle types,
order of deliveries, and alternative routes. This enables us to optimize vehicle loading,shorten journeys, cut costs, and reduce transport emissions. The planning tool also helps
us select the most appropriate size of truck for each journey, again reducing fuel use
and associated emissions.
Our transport supervisors have trained 450 drivers in the use of this technology.
The tool also alerts us to speeding, or if a driver has driven on the wrong type of roadfor the size of vehicle. It also ensures drivers are allocated the correct shift pattern, withdesignated rest breaks, in compliance with local legislation. These measures help reinforce our safe driving policy.
In 2018 we rolled the system out in Hong Kong, Malaysia, Singapore and Thailand.
We will introduce it in Vietnam and Taiwan in 2019.”
Brett Turner, Vice President, Group Transport Management, Thailand

Air conditioning adjustments reduce energy waste“The Facility Management Team in Taiwan nurtures a ‘Stay Hungry’ culture where
we are constantly seeking opportunities to save energy. For example, at ourlarge distribution centre in northern Taiwan, we need to use a lot of coolingto keep medicines and other temperature-sensitive healthcare products below 23˚C.
However, the existing air-conditioning system lacked an inverter mode, meaningthat whenever the system was activated it came on at full power, rather thanselecting a speed according to how much cooling was needed. In 2018 our Facility
Management Team modified the system so that the air conditioning system
only switched on at the required power level, reducing energy waste. We constantly
monitor and re-calibrate the system to ensure temperatures remain well withinsafe limits. This change will save 1GWh of electricity per year. We are now also working
on adopting a greener design for our new next generation distribution center, which is
expected to open in late 2020.”
Gordon Chen, General Manager, Supply Chain Management, Taiwan

7Social10,000 employees received 14
hours of training each throughthe Fantree Academy

Zero workplace fatalities
13 years of continuous
partnership with Right to Play

Grace Cheng, Vice General Secretary & Director of
Public Relations, Chinese Christian Relief
Association, Taipei:“For the eighth year running,
more than 500 DKSH employees
supported our Christmas shoebox
initiative, providing gifts toeconomically disadvantaged
families in Taiwan. This is astrong commitment from DKSH
to its local community.”

We employ 33,000 specialists globally. Our
success largely depends on the availabilityof skilled and committed people who share
our values. That is why we established the
DKSH Fantree Academy, our in-house learning and development center. The Academy
uses customized programs to provide learning opportunities. It also serves as a platform for networking, sharing best practices
and reinforcing our corporate culture.

One of our core initiatives in our major market Thailand is our decade-long partnershipwith international organization Right toPlay. This global organization uses thetransformative power of play to educate andempower children facing adversity. DKSH
continued its support in 2018 by providing
funding and use of our facilities. We also
support other charities that directly meetthe needs of our local communities.

Besides furthering our own employees,
a strong commitment to the local communities we operate in has always been an
integral part of our business.

For more examples of our local community
initiatives, please see:www.dksh.com/global-en/home/about-us/
sustainability.

8

Voices from Fantree Academy Participants“The Service Excellence program helped my team and me to be able to think
and feel from customers‘ shoes and to learn to be more empathetic so we can serve
our customers better.”
Eva Chan, Manager, Group SAP Security, DKSH Corporate Shared Services Center, Malaysia“The ’Building Winning Sales Partnerships’ course was a comprehensive and easily
actionable program for me, as it is designed specifically for Business Unit Technology
and linked to our CRM system. Using the selling tools and a common language fromthe program in my day-to-day job has had a very positive impact on both my sales
performance as well as me personally.”
Maggie Yang, Senior Sales Manager, Business Unit Technology, Taiwan

DKSH supports a local orphanage in Myanmar“In March 2018, we organized a day trip to the Shwe Thar Lyaung pagoda andthe beautiful Shwe Pyi resort for 100 children from the Witharkhar Orphanage andSchool. This nunnery school cares for orphans, providing them and other disadvantaged
local children with a monastic education. DKSH Myanmar has supported their work formany years including donating a school building, supporting the teachers, and otherongoing support. Every year, we organize exciting activities for the children together
with our employees. This fun day out in 2018 included playing games and learning
about the environment. At the end of the outing, I handed out presents to all the children, and the 40 DKSH volunteers went back home having experienced a very special
day serving the local community.”
Phillip Wray, Vice President, Healthcare, Myanmar

9GovernanceIntroduced a new

Supplier Code of Conduct
ISO certification 27001:2013
on information security
management achieved

Group Data Privacy Policy
developed

Debjit Rudra, Area Vice President and General
Manager South East A sia, GSK Consumer
Healthcare:“We have had a very strong
partnership with DKSH for
many years and really appreciate
their very clear and transparent
ways of working based on trust.
The senior management operates
in a very collaborative mannerand makes a genuine attempt tobuild a strong partnership.”Our success is founded on collaborative,
ethical and sustainable leadership. DKSH’s
Board of Directors and the Executive Committee are responsible for defining the business strategy and assuring its execution,
including sustainability. They are committed
to upholding strong governance standards
representing the interests of DKSH andits stakeholders. A sustainability team, led
by Group Governance Risk & Complianceand Group Investor Relations, is supporting
management in addressing material sustainability topics.
Our values and beliefs are enshrined in our
Code of Conduct, adopted by our Board of
Directors and made available to all our employees in English and local languages.
Employees need to formally adopt the Codeupon joining and receive periodic training

to ensure that the Code is followed. We
place great emphasis on hiring and retaining
people who share our values and who,
through their integrity, protect our businessas well as that of our clients and customers.
(GRI 102-16)
We operate as an intermediary between ourclients and customers. For parts of ourservice delivery, we also rely on third parties.
DKSH does not maintain relationships
with third parties that do not act in line with
our principles and standards of doing
business. To further emphasize this, we
introduced our Supplier Code of Conduct,
which sets out clear expectations on issues
such as labor rights and anti-corruption.

10

Successful ISO 27001:2013 certification for IT security management“Our clients and other stakeholders want to feel confident that we are handling theirdata responsibly and are addressing cybersecurity risks. Our global information security
management system underpins our approach to safeguarding our data. In 2017, GroupIT Security embarked on a journey to get our systems certified to the ISO 27001:2013
standard. Beginning with our SAP Infrastructure, we consulted an external auditor who
provided professional guidance and readiness before accredited certification body TUVNord performed the certification audit. The DKSH Corporate Shared Services Center(CSSC) SAP Infrastructure was certified to 27001:2013 in 2018.
Going through this process has made us more aware of how we handle data, and how
we can safeguard business information. It also helps us demonstrate to our business
partners that we meet their requirements.
We will conduct quarterly internal reviews to maintain the SAP infrastructure system incollaboration with the Quality Assurance team. We are also planning to achievecertification for the remainder of the CSSC IT systems.”
Siva Vijayandran, Senior Manager Group IT Security, CSSC Malaysia

11What really matters: our materiality matrix

DKSH conducts materiality assessments to
identify the most relevant topics for our
stakeholders. Our last materiality assessment was conducted in 2017. In 2018, we
performed a high-level review of the assessment. The review included the integrationof updated information from business partners, analysts, media, investors and sustainability rating agencies. When defining report content, we have considered all
significant aspects of our business along thevalue 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 ourability.

For establishing our materiality matrix in
2017, a list of potential topics was assembled from several sources, including various
industry frameworks, sustainability reports
by peers, clients and customers, as well as
important factors identified by DKSH’s risk
profile. Subsequent steps included an elimination of topics with limited relevance forour business, followed by an impact assessment conducted by survey, involving personnel located in various parts of the business and geographies.

Separately, expectations expressed by otherimportant stakeholder groups, such as
employees (via employee surveys), clientsand customers, were taken up via direct
feedback. 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 and fast-moving consumer
goods.
GRI 102-40, GRI 102-42 to 44,
GRI 102-46 and 47

Economic value

Influence on assessment by stakeholders

Anti-corruption
Environmental responsibility
Procurement practices

Labor standards
Recruitment, retention and development
Customer health and safety
Marketing and labelingOccupational health and safety

Local communities

Market presence
Information security

Significance of the organization's economic, environmental and social impacts

12

Our engagement for local communities

Mumbai, India
DKSH donates a new school bus toa center for children with special
needs in India

Yangon, Myanmar
DKSH demonstrates its engagement for local communities with aday trip for the Witharkhar
Orphanage

Phnom Penh, Cambodia
DKSH in Cambodia:
give blood – save lives

34

supported projects in
2018

34

Dongala Palu, Indonesia
DKSH and Wicaksana help
Donggala-Palu victims in Indonesia

supported
projects
in 2018
projects in

15 in 15differentdifferent
countriesmarkets

See more page 27

See more
X (GRI 413-1)(GRIpage413-1)

Singapore
DKSH partners with Beyond Social
Services in spreading cheer todisadvantaged families in Singapore

Melaka, Malaysia
DKSH joins WWF-Malaysia inmarine turtle conservation

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Supporting the United Nations’Sustainable Development Goals
DKSH strives to create sustainable value forall our stakeholders. We are deeply rooted
in the communities we serve across Asiaand are committed to creating opportunities
for local development.

Our business directly and indirectly contributes to the United Nations (UN) Sustainable
Development Goals (SDGs). These Goals,
adopted by the UN in 2015 for delivery by2030, seek to address the world’s biggest
challenges for the benefit of all, including
ending poverty, improving health and education, and tackling climate change.

Following a review of the SDGs in alignment
with our materiality processes (see page 12),
DKSH has prioritized five SDGs where wecan make a particular contribution.

Goal 3 – Good health and well-being
Ensuring access to healthcare is at the coreof our business and is aligned with one of
DKSH’s objectives to enable market accessfor healthcare products across Asia.

Goal 4 – Quality education
As a services company, people are ourgreatest asset, and their dedication, attitude
and passion drive the long-term success ofour business. DKSH encourages employees
to own their professional development
through proactive engagement. In learningand development specifically, we subscribe
to the 70-20-10 learning model (see page
23 for details).

Goal 8 – Decent work and economic
growthDKSH contributes to economic growth inmany markets in Asia through our commitment to providing attractive jobs and enabling employment. We respect labor rights,
such as non-discrimination and no forced
or child labor, and recognize the role we canplay in our extensive supply chains in furthering these standards. In our own business, maintaining these standards particularly benefits lower skilled workers, such as
those employed in our distribution centers,
who can be more vulnerable to exploitation.
Many of the distribution partners we workwith are small ‘mom-and-pop’ stores,
supporting local entrepreneurship andemployment.

We also care about the health and safety of
our employees and contractors, and weparticipate in health-related community
engagement activities, such as blood donation campaigns.

The DKSH Fantree Academy, our in-houselearning and development center, offers
around 50 programs aimed at developing
capabilities across all levels of the organization. We also recognize that an understanding of sustainability issues is an importantskill for the future economy and seek toraise employee's awareness on these topics.

14

Goal 9 – Industry, innovation andinfrastructure
An important part of DKSH’s service offering is our market coverage via an established capillary distribution network, our
160 distribution centers and our 44
innovation centers across Asia.
Through our Business Unit Technology,
DKSH further offers complete solutions for
specialized industrial applications to primarily small and medium-sized enterprises in
Asia. We provide access across the value
chain, from sourcing, sales and marketing
to after-sales services.

Goal 13 – Climate action
We seek to reduce the carbon impact of ouractivities across the value chain. We recognize that our large, mainly outsourced, fleet
and temperature-controlled facilities for
consumer goods and healthcare products
are sources of emissions. We have standardized our global management approach forgreenhouse gas emissions and are looking
at lower carbon paths in the markets inwhich we operate, for our own operations
as well as in support of our clients’ climatechange objectives.

15

Environment

16

Environmental responsibility

At DKSH, our environmental commitment
includes addressing our own impacts, supporting our suppliers and clients in managing theirs, and raising our employees’
awareness of “green” issues.
As a major employer, we have a role in educating our employees about how they can
reduce their environmental impact at home
as well as at work. For example, DKSH in
China celebrated the World Environment
Day 2018 with a “reduce-reuse-recycle”
waste reduction campaign. In Malaysia,
DKSH partnered with WWF to raise awareness of wildlife conservation, including marine turtle conservation, with various activities for our employees in the rainforest andat the beach.

In our own operations, with the adoptionof our Health, Safety and Environment (HSE)policy in 2017, DKSH embarked on a journey
to strengthen and standardize our environmental management across the business. Inline with this policy, local HSE managers are
responsible for maintaining a register of applicable national environmental laws andregulations and ensuring that all our operations are compliant through an adequate
management program.

No incidents of non-compliance withenvironmental laws and regulations
were noted in 2018.
GRI 307-1

As an international Market Expansion
Services provider with a focus on sales, marketing and distribution, our main environmental impacts relate to our distribution
centers, fleet and business travel. We also
do some manufacturing which entails a different set of environmental impacts, although this activity is a minor part of ourbusiness.
Distribution centers
To distribute our clients’ and our own products, DKSH operates 160 distribution centers (DCs) across Asia. Our DCs and warehouses are typically leased, with a few ofthem built-to-suit. For any investment into
new facilities, environmental criteria will beconsidered in the planning phase.

17Distribution centers account for a significant
part of our carbon footprint. Energy is consumed for lighting, cooling and operating
forklifts and other handling equipment. We
aim to increase energy efficiency andchoose lower carbon sources of energy
where possible. Most of our handling equipment is battery-operated. Temperaturecontrolled facilities are adequately insulated
to reduce cooling requirements and air conditioning systems are carefully calibrated. In
2018, our Healthcare DC in Taiwan switched
to a more efficient use of air conditioning–
thereby saving approximately 1,000 MWh
per year. Energy-efficient lighting is also
used, including the installation of smart LED
systems. In 2018, DKSH switched to LED
lighting in two DCs in Thailand and New
Zealand. We also design facilities to makethe best use of space, thereby minimizing
our storage footprint and associated needfor air conditioning and handling equipment. The installation of moveable palletracks, a carousel system and a new mezzanine floor in our Hong Kong DC enables
denser storage. For new facilities, we are
optimizing our designs to achieve thegreatest efficiency in picking, packing andstorage.
Fugitive emissions, generated by the use ofrefrigerants, are another significant part ofour carbon footprint. Temperature-sensitive
products may require storage and transportation in air-conditioned vehicles or in special transportation boxes. In addition tomonthly checks of cold rooms by maintenance contractors, our operations teaminspect the operating parameters and conduct thermal imaging scans to identify any
failures of the insulation or other sources of
inefficiency. We also have implemented ‘design principles’ such as:

1.

Situating freezers inside cold rooms,
and cold rooms inside air-conditioned
rooms, to reduce the loss of chilled air

2.

Segregating docking areas from storage areas to maintain a stable storage
temperature

3.

Where possible, choosing to build two
smaller cold rooms rather than one big
one to increase cooling efficiency

Preparing goods for delivery requires use of
packaging (mostly cardboard cartons andplastic for pallet wrapping) and packaging
waste is generated from incoming shipments. Healthcare cold chain goods needparticularly extensive packaging to protect
the delicate items and we have set standards for shipping healthcare products.
Where possible, we use returnable packaging. This typically works well in urban areas
where our distribution centers are located.
For example, our “B-box” in Thailand isused for shipping to key hospitals in
Bangkok. Selecting the most appropriate
packaging depends on the reuse markets
and recycling facilities available in each market, and we look for the best option in eachcircumstance rather than adopting a single
approach. Although local management of
this issue is key, we will be looking further
at our packaging composition and waste
management processes from a Group perspective across our operations, to understand the scale of the issue and identify
possible synergies.

Spills of hazardous substances can pose anenvironmental risk, both in storage and intransit. All such materials are handled incompliance with applicable Safety Data
Sheets (SDS) and clear standard operatingprocedures. In some cases, we outsource
the handling of certain substances to specialized service providers.
Transport
Our capillary distribution network serves
several hundred thousand customers daily.
We have a small fleet of our own, but delivery is mostly outsourced to specialized
service providers, although we retain overall
responsibility for delivery performance. Oneof our most significant impacts relates tofuel consumption within these vehicles.
Most of our service providers use diesel-powered delivery vehicles, althoughsome are natural gas-powered. In our
high-volume, high-frequency business (e.g.
FMCG, Healthcare) with many delivery drop
points to be serviced, delivery route optimization is key for operating efficiently. Fuelsavings lead to cost savings, representing a
win-win situation. To tackle emissions forour small company-owned fleet and ourhaulage suppliers, in 2018 we implemented
a specialized software targeting transport
net work optimization in T hailand,
Singapore, Hong Kong and Malaysia. This
enables us to plan the most efficient usageof trucks and the best routes to take. The
system will result in efficiency gains andsavings of up to 10 percent as it reduces thenumber of vehicles needed and the timespent making deliveries as well as the distance driven. To ensure an effective use of
the new system, training on route planninghas been provided alongside the software.

18

A further roll-out of the system is planned
for Taiwan and Vietnam in 2019 with additional energy savings anticipated. Please see
page 7 for more details.

Reporting approach
In our second year of reporting environmental data, we have expanded our reporting
scope significantly.

Business travel
Despite our widespread use of communication technologies, traveling remains an important factor in our service delivery and for
managing the company. Most of these journeys are made by vehicles not controlled by
the company, such as business flights, travel by sales and service teams in their own
cars, and public transport. Internal approvalsystems are in place to prevent unnecessary
travel. In recent years, we have upgraded IT
communication capabilities and promoted
conference and video calls to reduce theneed for business travel.

Data on refrigerants, fuels and downstream
transportation is captured for markets withthe highest usage of refrigerated storageand largest distribution networks. These
include Thailand, Malaysia, Singapore,
Vietnam, Cambodia, Myanmar and New
Zealand. For fuel, this includes usage of
CNG, LPG, diesel and gasoline for our internal fleet of delivery vehicles and back-up
electricity generators. For downstream
transportation, major suppliers provided
diesel consumption data in liters from billdata. For consistency, all fuel property factors were sourced from UK Government
GHG Conversion Factors for Company
Reporting (2018 edition). The Global
Warming Potentials applied are from theIntergovernmental Panel on Climate Change(IPCC) Fourth Assessment Report (AR4) over
a 100-year period.

Office and IT infrastructure
Most of our offices are leased, often withcentral control of air-conditioning and other fixtures by the building management,poor visibility of our direct energy usage andlimited scope to change the building fabricand fittings. Options to reduce energy consumption in such cases include, for example,
upgrading lighting to LEDs and modifying
how we use the space, e.g. “turn off atnight” policies
In 2018, employees in Switzerland began azero-waste initiative to target office waste.
Progress so far includes reducing generalwaste bins at our headquarters in favor ofminimizing waste and recycling ,wherever
possible, and collecting approximately 30
kilograms of coffee pods per month to recycle. This initiative demonstrates our employees’ engagement in green issues andwe aim to replicate this across the organization going forward.

Kilometers flown data was supplied by our
air travel providers for major markets including Hong Kong, Malaysia, Singapore,
Swit zerland and Thailand, and UK
Government (2018) carbon factors applied.
Data was extrapolated for the remaining
markets based on the available flight spenddata.
We have restated data for 2017 based on
improvements to our data methodology.
We will continue to refine our data processes to reduce extrapolation and may restateprevious years’ data to support like-for-likecomparison.
We also disclose to CDP; please see ourlatest carbon disclosure for more detailed
information.

We collect data on electricity consumption
from bills received from utility suppliers for
23 of our markets and have extrapolated
energy data from cost data for a further
three markets. We have applied LocationBased Factors according to the following
hierarchy: (i) local government source(as recent as possible, by state if available),(ii) IEA 2012, (iii) nearest neighboring country. For Market-Based Factors, we applied
the following hierarchy: (i) electricity supplier factor, (ii) most recent credible residual
factor source (e.g. RE-DISS for European
countries) and (iii) same as Location-Based
Factor.

19

Greenhouse gas emissions
2017

2018

In metric tons ofIn metric tons of2017 peremployee2018 peremployee

Change per
employeeCO2e1 (restated)

CO2e1

In kg CO2e1

In kg CO2e1

In %Scope 1
Fuel and refrigerants

10,175

8,2183441

285(35.4)

Scope 2
Electricity (location-based)2

56,202

57,416

1,758

1,740

(1.0)

Scope 3
Air travel

30,282

28,663

947

869

(8.2)

Scope 3
Downstream transportation

69,492

78,9854

3,009

2,765

(8.1)

Total GHG emissions

166,151

173,282

6,155

5,659

(8.0)

2017 serves as the base year
1
Gases included are CO2, CH4, N2O, HFCs
2
Scope 2 emissions under market-based approach are 57,480 in 2018 vs. 56,392 in 20173
We have further developed our reporting to cover all significant markets (excl. Indonesia) and expanded data coverage to include New Zealand, Myanmar
and Cambodia. Scope 1 emissions decreased because of lower emissions from refrigerants. Although we upgrade our air conditioning systems on a regularbasis, and newer systems are associated with lower fugitive emissions, the scale of the decrease between 2017 and 2018 is influenced by the maintenanceschedule of the equipment and several years of data is needed to confirm an overall downwards trend
4
We have further developed our reporting to cover all significant markets (excl. Indonesia) and expanded data coverage to include Myanmar and Cambodia

GRI 305-1 to 305-3
Energy consumption
2017

2018

In MWhIn MWh(restated)2017 peremployee2018 peremployee

Change per
employee

In kWhIn kWhIn %Direct Energy
Fuel

10,43017,4677

452

6071

34.31

Indirect Energy2
Electricity

99,861

100,842

3,123

3,056

(2.1)

Total Energy3

110,291

118,309

3,575

3,663

2.5

We have further developed our reporting to cover all significant markets (excl. Indonesia) and expanded data coverage to include New Zealand, Myanmar
and Cambodia. Additionally, we refined the reporting to differentiate between fuel consumed by our own fleet and fuel usage in back-up generators, which
combined with the larger Cambodian fleet, explains the increase in direct energy per employee
2
Includes electricity consumed for cooling3
Excludes heating (currently data not available) and steam (not applicable)
1

GRI 302-1
20

Social21

Recruitment, retention and development

As a services provider with roughly 33,000
employees, our success largely depends on
the availability of skilled people who share
our values. As our reputation is built on
trust, integrity and reliability, we seek toretain talent to maintain stable relationships
with our business partners.
DKSH provides a variety of benefits to its
employees, based on applicable policies in
the markets of operation. Standard benefits,with some variation by market, include life
insurance, healthcare, disability and invalidity coverage, statutory retirement provisionand parental leave. Benefits related to stock
ownership are limited to eligible key managers of the company (Annual Report 2018,
page 32).

Our practices with respect to providing
benefits to employees comply fully withapplicable legislation and in many cases
exceed it. In four of our nine significant
operating markets1, the benefits provided
to part-time and temporary employees are
identical to those of permanent full-time
employees, and in three other markets
there are only minor variations. In twomarkets, no voluntary benefits are provided to part-time or temporary employees.
GRI 401-2
1

Refer to GRI 102-4 for definition

In addition to offering competitive remuneration and other benefits, we provide a compelling Employer Value Proposition (EVP).
The EVP is our promise to employees – what
we offer them in exchange for their skills,
capabilities and experiences.
The DKSH Employer Value Proposition
1. Enjoy a world of learning and development. Thanks to DKSH’s great diversity ofservices, industries, clients, products, regions and employees, you’ll enjoy a worldof on-the-job learning and developmentthat will drive your personal and professional growth22

2. Own your career and take business responsibility. DKSH offers you a dynamic
growth environment and unique culture
where you can “write your own career ticket” by taking business responsibility andcareer ownership early on, seizing development opportunities whenever they arise
3. Have a positive impact that touches people’s lives. By helping DKSH and other companies grow and bring their products, solutions and progress to markets, you’ll
experience your own personal growth andthe satisfaction of seeing the positive impact you have on the lives of others.
Performance reviews
At DKSH, we encourage employees to own
their professional development through proactive engagement.
An important feature is the six-monthly performance review where they can discussand agree on their personal development
plan with their line manager. It is a requirement of our General Employment Policy that
all employees participate in a formal annual
appraisal of their performance with theirline manager. This is carried out through the
DKSH Talent Portal, an online performanceand talent management solution. Regulardialogues between managers and employees on development objectives, including
constructive and focused feedback, are alsoa part of the development journey at DKSH.

All our employees have a yearly appraisal.
16 percent of employees received a more
extensive performance review in 2018(2017: 11 percent). This review applied
mostly to management-level employees.
All decision-making with respect to appraisals, development opportunities andpromotions is required to uphold our equal
opportunities commitment.
GRI 404-3
As part of our continuous efforts to engage
our specialists and create a dynamic andhigh-performance work environment, weregularly conduct employee surveys. Thesesurveys focus on the work environment,
leadership, organizational transformation,company culture and other matters affecting workplace effectiveness. Resulting
action plans are drawn up, implemented
and monitored
Learning and development
In learning and development, we subscribe
to a 70-20-10 learning approach. This approach recognizes that the greatest impactof learning comes from job-related, handson experience and occupational training (70percent). The remaining impact comes fromlearning through others (20 percent) andthrough formal courses (10 percent), largely provided internally via DKSH’s Fantree
Academy.
The DKSH Fantree Academy, our in-houselearning and development center, offered
49 programs in 2018 (2017: 39) to develop
capabilities across all levels o f t h eorganization. The training programs span
three pillars: essential skills, leadershipprograms and functional skills. Training isprovided through various channels,
including classroom, instructor-led, on-thejob training and training through thecompany’s intranet.

Since 2015, the number of trained employees and total number of course participants
increased every year. In 2015, 5,045 employees attended at least one Fantree Academy
course, whereas in 2018 it was 9,778 DKSH
employees (2017: 8,754). As employees canattend several courses, there were 17,461
registrations to training courses in total in
2018, up by more than a fifth against 2017(14,255) and more than twice as many as in2015 (8,792).
Nearly 10,000 DKSH employees participated in Fantree Academy in 2018, each receiving an average of 14 hours of training.
GRI 404-1
Mobility, benefits and recognition
The diversity of our business enables our
employees to gain new experiences by promoting internal mobility across markets andorganizational units. We regularly advertisejob openings internally to foster career progression and only recruit externally if nosuitable internal applications are received.
Our Mobility Guidelines, part of our Group
Compensation and Benefits, provide guidance on supporting employees as they movethrough the company, such as subsidizing
costs and providing cultural training to expatriate workers and their families whenentering a new market.
Recognition is a key part of our approach toretaining talent. Each year, we celebrate theemployees who have most embodied our
corporate values through the DKSH FantreeAwards.

23

Labor standards

In our service business, ethical conduct andintegrity of our workforce is crucial for our
reputation as a trusted service provider.
Pleasant and safe workplaces free of discrimination and harassment and respecting
human rights are key elements in our employment offering, as laid out in our Codeof Conduct. We respect our workers’ rights
for freedom of association and collective
bargaining.
At the end of 2018, 27 percent of DKSH’s
employees were covered by collective bargaining agreements (2017: 24 percent1).
GRI 102-41
1

Much of our workforce is employed in markets and industries which typically rank highon human rights risk indices. Additionally,
we procure a sizeable range of supply chainrelated services and products across Asia,
such as outsourced transport and delivery
services for our distribution network as wellas labor and equipment and materials for
our logistics and marketing operations(warehouse workers, product promoters,
component suppliers for our own-brandmanufacturing). To mitigate the risk of human rights violations, we focus our attention on contractors who directly help usdeliver our service offering, including delivery drivers and warehouse workers.

The Human Resources (HR) and Supply
Chain Management teams in each of our
key operating markets have responsibility
for all hiring and for ensuring employees
and contractors have the correct documentation. We operate management programsin line with applicable local laws and labor
regulations to prevent the hiring of under-age persons or illegal workers, to ensure
decent and safe workplaces, fair and timely
pay, and adequate rest periods. We expect
all our business partners to respect the basic principles of human rights, as mandated
by our Supplier Code of Conduct. Violationof these principles can lead to contract termination.

Restated figure from 201724

DKSH does not discriminate based on age,religion, gender or any other category, andthis policy is enshrined in our Code of
Conduct (“the Code”). As part of the Codeand related trainings, we explain our stanceon human rights and non-discrimination toemployees and ask any staff member who
feels that they, or one of their colleagues, issubject to discrimination or harassment toreport it to the HR department. Organizationally, we practice a business partnering
approach, whereby representatives of the
HR department are stationed within operations for ease of access.
Our management approach on nondiscrimination and human rights practices
has focused thus far on legal compliance;
governance processes, and evaluation of
their effectiveness has mainly been at the
local level. Although we are not aware ofsignificant issues arising from our current
approach, we are mindful that a compliance-led approach could lead to varying
standards among markets. We are considering centralized over sight of thisissue, with clear reporting lines to Groupmanagement. We are also planning ahuman rights impact assessment to better
understand where our risks lie and how to
mitigate them. This will focus on major
operations and key contractor types,
identified using a risk-based approach, andwe will comment further on our progress infuture reports.

Discrimination and harassment
Our Group’s HR Function ensures that employees are aware of proper reporting channels for incidents of discrimination and harassment. In 2018, no such incidents werereported to HR.
DKSH recorded no incidents of discrimination or harassment in 2018.
GRI 406-1
Induction training for new employees andon-site contractors includes the importanceof treating all people with respect. It specifically states that any form of discrimination
based on gender, race or any other protected characteristic, sexual harassment andbullying are not acceptable. The training
encourages people to report to the sitemanager or HR in case of misconduct andemphasizes that reports will be kept confidential.
Labor rights
GRI 407-1, GRI 408-1, GRI 409-1
Our Code of Conduct and Supplier Code of
Conduct respect workers’ rights to freedomof association and collective bargaining andprohibit the use of forced or child labor. The
induction training all employees and on-site
contractors receive encourages any worker
suspecting a violation of their colleague’s
human rights to report it in confidence.

Freedom of association and collective
bargaining
We would never penalize anyone engaging
in workers’ groups in good faith. Where
such arrangements exist, we respect theterms and conditions in collective agreements and we nurture relationships with
unions through constructive engagement.
We are committed to ensuring that appropriate mechanisms are in place to enable
employees and contractors to express theirviews about their workplace through, forexample, open meetings for group discussion between employees and local management, or meetings with elected workers’
representatives. This includes markets wherecollective bargaining is restricted by law orby custom.
Child labor
The HR teams check that applicants are legally able to work, and proof of identity isneeded for all contractors working on oursites. However, we are aware that complying with local requirements on minimum
age could lead to different standards being
applied in different markets. As part of ourhuman rights assessment, we will evaluate
the effectiveness of existing management
systems and processes to mitigate any riskof child labor in our operations and among
our contractors. We will also look at measures to reinforce the provision against childlabor in our new Supplier Code of Conduct.
We will report more fully on this disclosurein future reports.

25

Forced or compulsory labor
As part of our human rights assessment, we
will evaluate the effectiveness of existing
management systems and processes to mitigate the risk of forced or compulsory laborin our operations and among our contractors. We will report more fully on this disclosure in future reports.

Human rights assessment
Our Code of Conduct training includes human rights issues. We ran a large-scale
Code of Conduct training campaign in
2016, followed by a refresher training for
employees in 2017 that could be accessed
electronically. New recruits also receive induction training. We aim to have a trainingthat reaches all employees, annually. We are
currently unable to quantify the number ofhours spent on Code of Conduct training in2017 and how much of this time can be
attributed to human rights. We will repeat
the training across our operations during
2019.

74 percent of our employees received training on our Code of Conduct in 2017, including human rights issues.
GRI 412-2

26

Local communities

A strong commitment to the local communities we operate in has always been a key
part of our business.
We create positive impacts on society, particularly in less developed regions, by providing stable jobs with fair employment
terms and opportunities for personal development, and by setting a clear standard for
how business should be conducted.
Furthermore, through our capillary distribution network, we enable market access forhealthcare products and other necessary
items across Asia, contributing to the quality of life in the communities we serve. In
addition, we provide ingredients and equipment to build local industries and infrastructures with our Business Units Performance
Materials and Technology.

Directly linked to our business activities, ourcolleagues in Business Unit Healthcare in2018 organized blood donation campaignsin Cambodia, Hong Kong, Malaysia,
Myanmar and the Philippines. Business Unit
Consumer Goods regularly participates infood donation programs. In Singapore forexample, DKSH donated almost 300 foodbundles to low-income neighborhoods inAugust 2018.
Alongside our business activities, we strive
to create a positive impact by engaging in
projects and selected sponsorship programs
to develop and support local communities.
However, as stated in our Code of Conduct,
DKSH does not engage in political processes and for that matter refrains from any
form of donation to political parties, elected

officials or candidates for public office, or insupport of any political campaigns.
In terms of charities, one of our core initiatives in our major Thai market has been to
support Right to Play for more than ten
years. This global organization uses thetransformative power of play to educate andempower children facing adversity.
We are also open to opportunities to offer
roles to local people who have struggled toenter the workplace. For example, in
Malaysia, DKSH employs around ten deaf
people from the local community at theFamous Amos cookie outlets.

27

We support humanitarian relief throughdonations of money, products, food andvolunteering. In 2018 our efforts included
donating to the victims of the Hualien earthquake in Taiwan in February 2018. In
October 2018, DKSH – through its subsidiary Wicaksana – helped those affected by
the massive earthquake and tsunami in
Donggala in Indonesia.

In 2018, 100 percent our markets withsignificant operations participated in charitable activities benefitting local communities (2017: 70 percent). In total, DKSH
supported 34 (2017: 16) projects.
GRI 413-1

To raise awareness for wildlife conservation, DKSH employees spent a few days in the wilderness of the Ulu Muda forest in Northwestern
Malaysia together with WWF. They left Ulu Muda with a fresh respect for this beautiful rainforest and its native inhabitants as well as a
new vigor to spread awareness of the importance of wildlife and forest conservation.

28

Governance29

Economic performance

DKSH drives a clear strategy for sustainable,
profitable growth that continuously increases our market share and helps our clients
expand their businesses. The economic value that we generate benefits our stakeholders, such as providing returns and dividends
for our shareholders, salaries for our employees and tax payments to local governments. DKSH contributes to various charitable projects based in our local communities. By supporting a diverse range ofsmaller charities, we respond directly to the
local need.

DKSH’s strategy for economic value generation is based on our three strategic pillars:• We focus on our existing Business Unitsand markets to leverage our leadership
position• We continuously strengthen and extend
our service offerings to ensure long-term
success for our customers and clients• We progressively drive improvement in
the efficiency and effectiveness of ourprocesses

DKSH has a Group Tax Policy in place and iscommitted to paying its taxes in a timely
manner and in the markets where the revenue was generated. Intra-group transactions are carried out under market conditions and are supported by transfer pricing
documentation.
DKSH monitors its financial performancethrough a process steered by the CEO, the
CFO and the Board of Directors. The Grouppublishes its results twice a year. Please see
our Annual Report for more information.

Our stakeholders have a keen interest in
DKSH as a long-term investment opportunity, attractive employer, reliable business
partner, responsible taxpayer and good
corporate citizen. Therefore, the generationand distribution of economic value is key for
us to meet our stakeholders’ needs.
30

DKSH 2016
Annual Report

DKSH 2017
Annual Report

DKSH 2018
Annual Report

Direct economic
value generated

Revenues

10,541

11,05811,455

Economic value
distributed

Operating costs(9,641)(10,113)(10,444)

Employee wages andbenefits

(594)

(639)

(669)

Payments to providers ofcapital

(98)

(311)

(119)

Payments to governments (taxation)

(80)

(77)

(71)

Direct economic value
generated - economic
value distributed

127**

(82)

151**

Economic value
retained** Positive value = value added/retained to company
Negative value = economic value distributed higher than value generated due to special dividend paid in 2017** Figures do not add up because of rounding
GRI 201-1

31

Market presence

DKSH promotes and distributes our clients’products in local markets, particularly in
Asia. Our in-depth knowledge of the markets we do business in is a key part of thevalue 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, which means that we can serve ourcustomers wherever they are located.
Operating as part of the many diverse local
communities we do business with is part ofour corporate culture. We also believe sharing business practices across cultures contributes to local skills and economic development.

Our mixed management teams represent
various cultures and backgrounds. Thisaligns well with requirements of the business and with DKSH serving as a bridge
between international clients and local markets and customers. Our roughly 33,000
DKSH employees cover 70 nationalities,
meaning that we speak the language andunderstand the culture of our business partners in the 35 markets we operate in. In
2018, 53 percent of senior management(2017: 57 percent) in our markets with significant operations was hired from the local
community, whereby “senior” refers tomanagers in corporate, regional or local
management roles. Local management roles
include first and second line full-time managers.

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

53 percent of local senior management ishired from local communities, whereas"local" throughout this report refers to the
35 markets we operate in.
GRI 202-2

32

Procurement practices

The bulk of our procurement activities referto goods we source and distribute undermarketing and distribution services agreements with our clients. These goods areprocured directly from our clients’ supply
sources based on market demand, in linewith contractual agreements. Supply sources may be local in the markets of distribution or from other parts of the world, as
determined by our clients.

and retail operations, and distribution center
operations (purchase or lease of material
handling and racking equipment, logistics
workers, packing materials and utilities).
Although we do not have a specific policyof procuring locally, almost 100 percent ofour procurement by spend in 2018 wasfrom local companies as it was mainly
service delivery.

For the local execution of our business, ourmain expenditures are for marketing activities (advertising, promotional services in
consumer outlets), transport and delivery
services for our local distribution network,
facilities rental for office, distribution center

For the local execution of our business,
100% of our procurement by spend in
2018 in significant locations of operation
was from local companies as it was mainly service delivery.
GRI 204-1

Regarding supplier selection, our technicalrequirements typically will limit the numberof 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 of Good Manufacturing
Practices (GMP). Supplier assessment isbased mainly on factors such as the company’s financial robustness, capabilities, capacities and standing in the market. The respective Business Unit’s Quality Assurance (QA)
team will monitor service delivery and theneed to retain or replace service providers.
This activity is often also under scrutiny byour clients’ own Quality Assurance (QA)
management.

33

Part of our unique selling proposition (USP)
is how quickly and flexibly we can respondto client and customer requirements, andthis is reflected in the lead time we can offer our suppliers. Our delivery services providers are expected to meet certain key
performance indicators, 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 clientsand customers value our reliability, we seek
long-term stable relationships with criticalsuppliers. For our crucial delivery services,
we operate from a few main providers ineach market. Corporate Supply Chain
Management (SCM) sets the standards fortransport logistics suppliers and oversees
implementation of the standards in local
operations.
Importantly, our policies require suppliers tobe dealt with fairly and transparently, andfor the results of tender or bidding processes to be communicated openly. DKSH isalso bound to investigate any complaints
raised by suppliers of unfair or unethicalpractices conducted by any of our employees or by their competitors. At the sametime, we also expect our suppliers to act inline with our principles and standards, as
expressed via our Supplier Code of Conduct
introduced towards the end of 2018.

A comparatively small part of our business
relates to the sourcing of materials andcomponents for the own brand items wemanufacture or distribute (OEM). These include watches and healthcare products, aswell as our food manufacturing and Levi’s
franchising business in South East Asia.
In our own brands healthcare business,
supplier selection is primarily driven by quality and capability considerations. In a significant part of this business, DKSH is thelicensee, and the supply source is either the
licensor or is determined/approved by thelicensor. All supply sources must meet GMP
and WHO standards and be compliant with
the Pharmaceutical Inspection Co-operation
Scheme (PICS). Suppliers are audited accordingly, by health authorities as well as by ourown audit procedures.

Our franchise business for Levi’s follows thestrict procurement guidelines by the Levi
Strauss Company. Levi Strauss either supplies materials to us for manufacturing,
appoints supply sources, or audits andapproves suppliers selected by DKSH
prior to us procuring materials from them.
Whenever possible, we give preference tolocal suppliers over imported goods.
Our food processing activity in thePhilippines focuses on flexible solutions forcustomers in the food services or consumer
business (premixes and finished products).
About 60 percent of procured materials for
production (mixing and blending) aresourced from local suppliers, with the rest
procured internationally from China, USA,ASEAN, Korea and Europe.

In our watch business, to avoid the sourcingof materials from conflict zones, we choose
local suppliers who respect standards of
responsible procurement (OECD Due
Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Affected
and High-Risk Areas, Kimberley Process
Certification Scheme and Responsible
Jewellery Council).

34

Anti-corruption

As a Market Expansion Services provider,
we play an important role in the supply
chain of the industries we serve, acting as alink between our clients and customers.
Trust and integrity are of paramount importance in our service business. We advocatecompliant and ethical behavior in all ourbusiness activities, and we do not tolerate
corruption. Most of our business is conducted in Asia where we operate in several markets and industries with perceived higher
integrity risks. It is therefore imperative that
our employees understand our values andexpected standards of business conduct andlive up to and respect them in all their activities. We place great emphasis on hiringand retaining people who share our values

and who, through their integrity, protect
our business and that of our clients andcustomers.
100% of our employees are made awareof our anti-corruption policies upon joining, including periodic reminders during
their employment with us.
GRI 205-2

We model our anti-corruption program on
the requirements of the U.S. Foreign
Corrupt Practices Act (FCPA) and the UK
Bribery Act (2010) and we adhere to thesame high standards irrespective of where
we are operating.

DKSH expects lawful and ethical behavior
from all employees and business partners aslaid down in our Code of Conduct, which
also prohibits any form of bribery and corruption, including facilitation payments.
Non-compliance risks are addressed in acomprehensive compliance program that
includes our Anti- Briber y and AntiCorruption and other policies, risk assessment, processes and procedures, training
and education, monitoring and auditing, as
well as confidential reporting and investigations. Accountable to the General Counsel,
the Group’s Governance Risk Compliance(GRC) Function is responsible for operating
an effective compliance program based on
our compliance policy framework.

35

For the execution of the compliance program, GRC works directly with DKSH’s operating markets. The management team foreach market overseas compliance at a national level, led by a Head of Country
Management who is appointed by the Chief
Executive Officer (CEO). In markets withperceived higher compliance risks, the Headof Country Management is supported bydedicated local compliance managers who
operate under the guidance and control of
GRC. For compliance initiatives relating to
specific Business Units or Functions, GRC
engages directly with the global Business
Unit or Function Heads.

supervisors or to GRC (an email address isprovided in the published Code of Conduct
and various internal policies, for use by internal and external stakeholders in confidence). Substantiated cases are investigated,ensuring confidentiality and protection of
the reporters. An annual review of compliance with our standards is made to the executive management, to identify trends andthe areas to focus compliance efforts.

As stated in the Code of Conduct and theAnti-Bribery and Anti-Corruption policy,
employees and intermediaries are required
to immediately report any incidents of
non-compliance – including demands forbribes or facilitation payments – to their

Training and communication are important
cornerstones of our compliance culture.
New employees undergo thorough onboarding procedures upon joining our organization. These include endorsing ourpolicy framework and completing certifiedcompliance training. Periodically, all employees need to refresh their knowledge of
DKSH’s anti-corruption policies and its standards and expectations on proper behavior
in business.

RegionTotal governance body members

Thailand

12

Greater China*

21

Malaysia and Singapore

23

Rest of Asia Pacific82

Rest of the World

39

Total

177

In 2018, apart from onboarding procedures, 1,675 selected employees completed anti-corruption training, focusing on
higher risk positions (sales, marketing,procurement Functions) and markets(based on Transparency International’s
Corruption Perception Index) as well as
employees in control Functions.
GRI 205-2
DKSH's governance bodies for sustainability
are identical with those responsible for the
strategic and operational management at
corporate and market level (Board Members
in listed entities, corporate executive management, country management teams). The
regional split in 2018 was as follows:

In 2018, 100 percent of governance bodymembers were aware of DKSH anticorruption policies. 94 percent of governance body members were selected foranti-corruption training (excl. non-executive board members), all of which completed the training in 2018 and 2019.
GRI 205-2*China, Hong Kong, Macau and Taiwan

36

Integrity of the supply chain
As an outsourcing partner to our clients, weare committed to upholding integrity in the
supply chain, which includes our downstream business partners whom we rely on
for parts of our service delivery. DKSH does
not maintain relationships with business
partners that do not share our values andmeet our standards of doing business.
In communicating our anti-corruption policies, we focus on business partners assisting
us with the execution of our businessdirectly. These include sales intermediaries,
such as sub-distributors, tender agents andresellers, or vendors, such as commission
agents, consultants, forwarders, importers,
customs brokers, fulfilment agents andevent organizers.

These business partners are engaged basedon contracts that contain anti-corruption
compliance clauses, with our Code of
Conduct and Anti-Bribery and AntiCorruption policy serving as contractual
documents. Towards the end of 2018, we
introduced a more focused Supplier Codeof Conduct which will replace our Code of
Conduct as a contractual document for all
supplier agreements. This will be realized
over time as contracts are renewed or new
contracts are entered.
Anti-corruption policies are communicatedto all our downstream business partners.
GRI 205-2

Effectiveness of the complianceprogramManagement is responsible and accountablefor ensuring proper application of compliance standards in the business. The Group’s
compliance function, GRC, supports management through providing advice, methodologies, tools, etc. and performs reviews
to assess the level of awareness, understanding and application of standards andcompliance controls. Furthermore, theGroup’s Internal Audit (GIA) Function performs compliance audits through audit assignments derived from GIA’s risk assessment.
Externally, DKSH’s compliance program isassessed by prospective or active clients
and/or external audit firms appointed bythem. The assessment includes thoroughdue diligence procedures and pre- or
post-contract compliance audits and reviews.

37

Occupational health and safety

Considering the nature of our business,health and safety in the workplace, including operational settings at distribution centers and warehouses, remains one of our
top priorities. In smaller parts of our business, we deal with the storage, handlingand transportation of dangerous goods,(e.g. chemicals, aerosols) where there is thepotential for our employees in Supply Chain
Management and other Functions to be
exposed to health and safety risks. Our capillary distribution network means a significant amount of travel for sales teams anddelivery drivers (mostly contractors), making
safe driving a priority as well.

Our Code of Conduct, which employees aretrained on regularly, stipulates our approachto health and safety, the role we all must
play in keeping our workplaces safe, and theimportance of reporting hazards promptly
to the line manager or Health, Safety andEnvironment (HSE) officer.
Our induction training for all new recruits
includes a comprehensive HSE module, in
addition to any job-specific training theyreceive. This includes rules and guidelines
within our key operations, such as usage of
forklifts and other handling equipment, andthe wearing of personal protective equipment (PPE). All new recruits must complete
the training (with signed attendance

records) before commencing duties. Periodic
refreshers are also held, and attendance ismonitored.
HSE policy and management system
Since 2017 we have been operating a new
HSE policy and management system, which
provides centralized support and global
standards to local HSE managers who
implement the system in line with local
legislation. This includes as a minimum:
vehicle and traffic safety management,
fatigue management, alcohol and drugs
prohibition, dangerous goods handlingand storage, waste and environmental
management, and specific guidelines for
manufacturing operations and those38

operating, servicing or installing machinery.
In cases where DKSH internal standards exceed local regulatory requirements, the
DKSH standard should be met.
Roles, responsibilities and accountabilities
are defined, documented and communicated to enable all individuals to fulfill their rolein improving health and safety performance.
Steering Committees (SC) at Group andmarket levels are responsible for setting thehealth and safety agenda, with policies andstrategies to drive performance. HSEManagers drive implementation of the program at the market level. Local Business
Units, Functions, their respective line managers and specific site managers act as riskowners, who are responsible and accountable for preventing and responding to incidents in their areas.
Contractors
The new HSE policy includes roles and responsibilities for Supply Chain Management(SCM), and we have issued training to ourrelevant employees on how to communicate
our requirements to the suppliers they interact with. This includes ensuring all contractors working on our sites are aware of
emergency procedures, proper lifting techniques and other safety procedures. HSE
managers are asked to ensure contractors
have a clear reporting line for any concerns
they may have.
Specific HSE requirements relating to
suppliers are also covered in SCM policies,
the Standard Operating Procedure on
Workplace Safety (which includes safe
driving), Working Instructions on Visitor
Safety, Contractor Safety and Permit toWork (which also covers safe driving),
and Contracator Guidelines.

For the handling of hazardous goods, wehave a Standard Operating Procedure on
Hazard Identification and Risk Assessment
and Risk Control (HIRARC), HIRARC Training
and Guidelines, and a HIRARC Inspection
Form. Following safety audits, corrective
action plans are used to address any issues.
The new vehicle tracking solution we began
implementing in 2018 will be able to identify speeding among our own fleet andcontracted delivery drivers.
We evaluate our health and safet y
management approach through performance monitoring at site, market and Grouplevels. A health and safety scorecard isgenerated and reported to the Group
Steering Committee on a quarterly basis.
Management approaches are adapted
accordingly. A global leadership teamunder Group Supply Chain Management
conducts regular monitoring and reviews
activities under an internal assessment
program that includes safety.
2018 performance
In line with our health and safety objectiveof continuous improvement, DKSH continued to align our health and safety management and practices with global standards in2018. Greater emphasis has been put on
preventative measures and enhancing employee health and safety awareness in key
areas of our business, including dangerous
goods and hazardous substances management. We have improved our health andsafety tracking, monitoring and reporting
systems. DKSH’s Group and market level
health and safety committees, comprised ofmanagement and employee representatives,
periodically review health and safety activities and performance to drive improvement.

Workplace audits by key clients, customers
and standards boards and regulatory bodies
all facilitate hazard identification, includinginternal stakeholders (Group SCM, HSE
managers) across the organization. Key hazards consist of, inter alia, improper forklift
activities, improper stacking of loads andstorage of materials, improper manual lifting and/or handling, operating powered
equipment and potentially dangerous
goods and hazardous substances exposure.
Actions taken to manage risks include engineering and administrative controls, aswell as personal protective equipment.
Examples are establishment of policies, processes and procedures, setting up of warning signs and equivalent mechanisms at theworking environment, use of protective
equipment, ensuring operational competency and trainings of our workers. In someinstances, the risk is transferred via outsourcing of specific dangerous goods andhazardous substances to third party vendors
with capabilities and capacities for management and storage.
DKSH is pleased to report zero workrelated fatalities for 2018. One incident ofhigh-consequence work-related injury wasrecorded in our China market involving a
DKSH employee during product handling(broken finger due to mishandling of equipment). We will continue to step up efforts
to engage our workforce on the importanceof health and safety incident prevention andmitigation.
DKSH is closely monitoring our safety performance data to ascertain the impact ofour health and safety initiatives. We believethat our promotion of timely hazard identification and mitigation, as well as legal andcompliance self-assessment and management at individual markets have improved
our operations’ and sites’ ability to identify
and address unsafe conditions or actions.

39

Work-related injuries 2018
Employees

NumberRate1

Fatalities from work-related injuries

00High-consequence work-related injuries

10

Recordable work-related injuries

52

0.9

Number of hours worked (in million)

Workers (all, no exclusions)
Fatalities from work-related injuries

57.5

Number

Rate1

0

0

High-consequence work-related injuries

00Recordable work-related injuries

12

1.4

Number of hours worked (in million)

8.81

per 1,000,000 hours worked

Main types of work-related injuries
Types of injury
No. of First Aid injuries

Employees

Other workers

2310

No. of Medical treatment beyond first aid

92

No. of Job restrictions or transfers

1

1

No. of Lost time injuries

42

9No. of Fatalities

00

Data was compiled via an internal reporting system guided by Occupational Safety and Health Administration (OSHA) reporting requirements. HSE managers in markets are responsible for recording incidents into incident registers and to report these for consolidation atGroup level.
GRI 403-9

40

Customer health and safety

The requirements to operate our businessmay be different for each of our fourBusiness Units, yet product safety is criticalto all business models and to DKSH’s brandreputation. We serve two main categories
of business partners: clients to whom weprovide Market Expansion Services, and customers who buy our products and services.
These two categories differ regarding thelegal position on liability, the reputationalrisk of an unsatisfactory product or service,and the nature of the activities we need toundertake to uphold customer health andsafety.

Strong product stewardship mitigatesagainst compliance risks and legal damages.
As a service provider with very limited manufacturing activities, our main role is to safeguard the quality and safety of the products
in our care and custody, and to ensure thesafe delivery of any services we provide thatare ancillary to our products. Traceability isalso a key factor; if any issue arises in our
supply chain, we can pinpoint and addressit.
Health and safety risks differ across our fourBusiness Units, given their widely varying
products. For example, the Performance
Materials and Technology Business Units
predominantly serve the manufacturingindustry, with Performance Materials providing specialty chemicals and food ingredients, and Technology offering customized
solutions spanning a wide array of industries. Meanwhile, the Consumer Goods and
Healthcare Business Units operate closer toconsumer markets, distributing food, nonfood and healthcare products.
The variety of items, the number of markets
and cross-border transfers, and the changing regulatory landscapes all demand thehighest levels of product stewardship for the
goods in our custody. Our ability to navigate
such complexity is part of the reason clientschoose to work with us.

41All employees and contractors working inour distribution centers receive training on
the proper handling of goods and the operation of related equipment (if applicable)
before they are allowed to start working.
Ensuring the safety of the final product isalso a key focus in the pre-qualification of
new suppliers to DKSH; corrective actionplans, additional auditing or contract termination may be required in the case of significant non-compliance with quality andsafety requirements. Beyond these controls,
our management approach varies significantly by Business Unit due to the distinctly
different products and legal requirements.
The Quality Assurance, Regulatory Affairs
and Supply Chain Management teams ineach Business Unit regularly perform quality audits and reviews to ensure ongoingcompliance with applicable standards.
Business Unit Performance Materials implemented a standard Internal Process Review(IPR) to assess health and safety risks anddefine mitigations.
Additionally, our operations are frequently
audited by our clients or their appointed
auditors. Due to the sensitivity of the products, most of these audits occur in theBusiness Unit Healthcare. In 2018, 143 suchaudits took place, which means that on average the Business Unit is subject to morethan one audit per month per market ofoperation (2017: 111 audits).

There were no incidents of non-compliance concerning health and safety impacts
of products and services in 2018.
GRI 416-2

Business Unit Consumer Goods
Our focus is on the proper handling andstoring of goods in line with good warehousing and distribution practices. Storage
and handling of products is executed as per
agreed specifications with our clients to ensure the integrity and safety of our products
throughout their life cycle. This can include
adaptation of products to local regulatory
requirements.

Pharmacovigilance (PV)Regulations on drug safety are continuously evolving and differ from market to market
and across regions. This poses a challenge
for all our healthcare clients. We have customer-facing compliance and regulatory
services teams providing specialist support
to get our clients’ products to market andto diligently manage drug safety expectations.

DKSH complies with applicable regulations
set by the food and drug administrations in
the markets where we operate. Freshness is
key for food and beverage products. Some
products must be stored under temperature-controlled conditions to preserve their
quality. Our IT systems support good storage practices that enable methods such as
FIFO (first in, first out) or FEFO (first expired,first out) to minimize product waste.

Counterfeit products
Counterfeit products are a significant concern in the healthcare industry. We haveestablished internal best practices related tothe management of suspected counterfeit
products and our SAP systems are validated
for batch traceability across the entire supply chain.

Business Unit Healthcare
Quality requirements and expectations arecompliant with international guidelines (e.g.
those from the World Health Organization,
the International Council for Harmonizationof Technical Requirements for Pharmaceuticals for Human Use and the Pharmaceutical Inspection Co-operation Scheme).
We maintain rigorous and up-to-date quality standards when handling, storing anddistributing healthcare products. All our
distribution facilities relating to pharmaceutical products and medical devices areapproved by the respective local healthauthorities with the appropriate internationally recognized Quality Management System
certification (e.g. ISO 9001 and ISO 13485).

Product recalls
If safety concerns trigger a product recall,our SAP systems allow for the full traceability of products and enable a fast and efficient recall. We have established internal
best practice procedures in the event of arecall, which include setting up a productrecall committee to steer escalation andtracking and monitoring of the entire process in collaboration with our clients.
Business Unit Performance Materials
This Business Unit has a dedicated and independent Regulatory Affairs (RA) teamwith specialists for Safety, Health andEnvironment (SHE), Quality Assurance (QA)
and Registrations (REG) on local, regionaland global levels. Critical safety, health andenvironment processes and controls are harmonized and documented to fully comply
with the Globally Harmonized System (GHS),
requirements related to Classification,
Labelling and Packaging (CLP), and other
health and safety standards.

42Performance Materials has implemented astringent and standardized qualification andcertification program for supplier and service providers based on relevant and applicable standards such as GxP (for pharmaceuticals), IFS, BRC and ISO 22000 (forfood), ISO 9000, CLP (for chemicals), internal Standard Operating Procedures (SOPs)
and the DKSH HSE Policy. The evaluation,
qualification and certification of service providers (logistics, warehouses, labs) and suppliers involves safety document assessments, safety audits and corrective actionplans along the entire supply chain. Our
food production activity in the Philippines
is FSSC 22000 (Food Safety System
Certification) certified.

To ensure safe handling and usage of the
products, we guarantee fully compliant
product documentation and classificationin all cases. For chemicals, Safety Data
Sheets (SDS) and CLP are provided withall relevant products. For food and pharmaceuticals, health certificates and quality
documents are provided, if applicable.
Documentation and classification are subject to safety audits. Full product and batch
traceability is guaranteed along the entire
supply chain.

Business Unit Technology
The Business Unit Technology distributes
various types of machinery or equipment,
sourced from reputable manufacturers.
Depending on the type of product, units aretested before delivery and our service offering also includes installation, commissioning
and training to ensure proper and safe operation. Our service engineers are trainedby the manufacturers.

A global deviation reporting and management process ensures any health and safety
related issues are documented, followed bycorrective actions and reviews.

43Marketing 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 andcustomers is the advertising and promotionof our products in the markets we serve.
The marketing of our products can involve
various risks if not managed properly andsupported with the relevant and necessary
product information. Rising public awareness and new policy initiatives on transparency have increased demand for correct andcomplete product information, making this
topic highly relevant for DKSH’s businessmodel and brand reputation.

Product adaptation and customization tomeet regulatory requirements, including
product labeling, is an important DKSH service offering. Our regulatory affairs teamsin the various Business Units are responsible
for establishing relevant Standard Operating
Procedures and for monitoring compliance,with assistance from our quality assurance
teams. In our Business Unit Healthcare,
where regulations are particularly stringent,
we perform customization work in accordance with Good Manufacturing Practices(GMP). In Business Unit Performance
Materials, we implement and audit against
GHS (Globally Harmonized System), with its
strict requirements for classification, labelingand packaging.

For the marketing of our own-brand products, our regulatory affairs teams ensurecompliance with applicable laws. For all the
products distributed by the Business Units
Consumer Goods and Healthcare, we observe guidelines on responsible marketing
published by the relevant industry bodies.
Policies, procedures and controls are inplace and are supported by training activities to ensure that the marketing of our
products meets our standards and expectations.

44

DKSH carefully monitors and validates relevant product data from clients on an ongoing basis and takes corrective actions whereappropriate. Any complaints about marketing and labeling are addressed by the relevant Business Unit. Given the magnitude ofour business operation, incidents may occur
despite our significant efforts outlined
above. In 2018, a total of nine incidents
were noted, some of which resulted in small
fines or warnings.
DKSH recorded nine incidents regarding
marketing and labeling practices in 2018.
GRI 417-3

Industry-specific risks in the healthcare
business
Advertising and promotion of healthcare
products in many jurisdictions are highly
regulated, often limited or even disallowed.
Many products are prescribed 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 the food sector (e.g.
infant nutrition) have adopted codes of ethics advocating responsible marketing of
their products. DKSH adheres to these standards through membership in the respective
industry associations and by operating management programs to ensure compliance by
employees and service providers.

45

Information security

The operation of our business results in asignificant accumulation of data relating toour products and services as well as to ourcus tom er s and busine s s par tner s .
Unavoidably in our business, we also serve
clients who are competitors in the marketplace. Ensuring confidentiality is therefore
crucial. At times, personal data needs to becollected relating to employees, contractors
and others. In today’s digital and interconnected world, risks of data theft or leakage
have risen, and information security has
become a key topic for any business.
In line with our Code of Conduct, we are
fully committed to processing and protecting personal data with due care, and tocomply with applicable data protection laws
as well as DKSH’s principles of protecting
confidentiality. Our information security
program and cyber security strategy is endorsed and supported by the Executive
Committee and the Board of Directors. The
overall program functions directly under theGroup's Chief Information Officer. Our strategy focuses on cyber threat preventive
countermeasures, stepping up organization
information security maturity and groupwide cyber security awareness programs.

We train our staff on various topics relating
to information security. In 2018, DKSH held
an internal “IT security roadshow” withmore than 600 participating employees
from 19 markets, including all markets withsignificant operations. In addition, all employees who use IT in their work were required to pass an online IT security awareness training. DKSH’s main IT hub is in
Malaysia, however, each market has its own
local IT team responsible for regular additional IT security trainings.

In line with our strategy, we have an IT
Security Policy in place and a dedicatedglobal Information Security team, which isavailable via a 24/7 hotline for urgent
security matters.

46

Quarterly Group-wide IT newsletters as wellas ad-hoc IT news flashes ensure thatawareness of sensitive topics is raised acrossall markets. In 2017, we embarked on theimplementation of ISO 27001:2013 standard
on information security management andachieved certification of the Corporate
Shared Services Center SAP Infrastructure
in 2018. Our quality assurance team ensuresthat the required standards are maintainedon an ongoing basis.

To further demonstrate our commitment toprotecting our clients’ and customers’ data,
we harmonized our operations with the EU
General Data Protection Regulation (GDPR).
To align our operations with the GDPR, in
May 2018 we implemented a new Group
Data Privacy Policy, a new Website Policy
and a Global Privacy Governance Structure.
Under this new structure, our Global Privacy
Lead oversees the work of the Privacy
Coordinators in each of the main Global
Functions and Business Units. There are also
Privacy Coordinators in the key operating
markets. Thus, every Business Unit andFunction has a go-to person for data
security.

Group Internal Audit conducts independent
audits on access management. Furthermore,
the Group IT Security team performs audits
on all market IT installations on a regularbasis. Our business continuity and contingency plans as well as incident response
procedures are tested twice yearly.
In 2018, DKSH received no complaints regarding data breaches of customer privacy
and loss of customer data from outside
parties or regulatory bodies. Similarly,
DKSH is not aware of any identified leaks,
thefts, or losses of customer data.
GRI 418-1

47

Appendix

Stakeholder engagement
Identification of relevant stakeholder
groups resulted from an assessment
carried out by senior management.

Groups were selected based on their ability to influence or impact (directly or indirectly) DKSH’s approach to business, or the
potential for DKSH to have an impact on
them.

Stakeholder GroupEngagement and key topics

Clients

As a partner in the downstream supply chain, our engagement with clients is the mostintense of all stakeholder groups. Discussions on expectations are part of due diligence,business negotiations and sustainability audits. Other examples of engagement are annual client satisfaction surveys and regular business reviews. Topics focus 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 andbusiness reviews during the financial year. Vendor concerns are primarily ethical business practices, including fair competition and anti-corruption. DKSH’s expectations areenshrined 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 and healthy workplaces, our safeguarding of
the environment, the integrity of our products and services, as well as our engagementwith 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 BU 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. Investor’s main interests are
economic performance, customer health and safety and anti-corruption.

Local communities

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

Authorities

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

DKSH engages with the identified stakeholder groups as follows:

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

49

Further details about our employees
All disclosures in this Statement relating toemployee numbers are based on headcount, rather than full-time equivalents.

This contrasts with the data reported in our
Annual Reports, but we believe it is more
appropriate for Sustainability reporting purposes. All data was extracted from DKSH's
SAP HRIS system.
GRI 102-8

Total number of employees by employment contract (permanent and temporary), by gender
Gender

Permanent% of total

Temporary% of total

Total

Female16,058

96.0%

672

4.0%

16,730Male

15,668

98.7%

203

1.3%

15,871

Total

31,726875

32,601

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

Temporary% of total

Total

Thailand

11,175

95.0%

589

5.0%

11,764

Greater China*

2,899

97.3%

79

2.7%

2,978

Malaysia andSingapore

5,013

100.0%

1

0.0%

5,014

Rest of Asia Pacific

12,177

98.4%

196

1.6%

12,373

Rest of the World

462

97.9%

10

2.1%

472

Total

31,726875

32,601*China, Hong Kong, Macau and Taiwan
Total number of employees by employment type (full-time and part-time), by gender
GenderFull-time% of total

Part-time% of total

Total

Female16,340

97.7%

390

2.3%

16,730Male

15,801

99.6%

70

0.4%

15,871

Total

31,141

460

32,60150

Membership of associations
DKSH companies are members of several
associations in the markets we operate in,with a strong focus on industry associations
for the chemical, pharmaceutical and foodindustries, 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 inJapan, for historic reasons (this is where
DKSH was originally founded in the 19th
century; we are the Swiss company with thelongest uninterrupted presence in Japan).

MarketName of association or advocacy organization

Switzerland

scienceindustries

The below list provides an overview ofmembership of associations by market.
GRI 102-13

Business Association Chemistry Pharma Life Sciences
vips - Association of Pharmaceutical Companies in Switzerland
Germany

VCH Verband Chemiehandel e.V.
OAV German Asia-Pacific Business Association

Denmark

Kemi and Lifescience
Danish Chamber of Commerce

Spain

Spanish Chemicals Distributors Association AECQ

Hong Kong

Hong Kong Association of Pharmaceutical Industry
Swiss Chamber of Commerce

51

MarketName of association or advocacy organization

Japan

European Business Council in Japan
European (EU) Chamber of Commerce in Japan
Austrian Business Council in Japan
Swiss Chamber of Commerce and Industry in Japan
German Chamber of Commerce and Industry in JapanThe Tokyo Chamber of Commerce and Industry

Cambodia

European Chamber of Commerce

Malaysia

Malaysia Retailers Association
Malaysia Retail Chain Association
Pharmaceutical Association of Malaysia
Malaysian Animal Health and Nutrition Industries Association
Malaysia International Chamber of Commerce and Industry
Swiss Malaysian Business Association
Malaysian Employers Federation
Federation of Malaysian Manufacturers

New Zealand

Food and Grocery Council

Philippines

Philippine Swiss Business Council

Singapore

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

52

MarketName of association or advocacy organization

ThailandPharmaceutical Reseach & Manufactures Association (PReMA)
Thai Medical Device Technology Industry Association (THAIMED)The Federation of Thai Industries (FTI)
Foods & Beverages, Food Industry ClubThe Federation of Thai Industries (FTI)
Food Supplements Club
Thai Cosmetic Manufacturers Association (TCMA)
Thai Retailers Association (TRA)
Cosmetics Industry Association
Thai Self-Medication Industry Association
The Federation of Thai Industries, Responsible Care Management Committee of Thailand (RCMCT), Chemical Industry Club
Hazardous Substances Logistics Association (HASLA)

TaiwanTaiwan Association of Logistics Management
International Research-Base Pharmaceutical Manufacturers Association (IRPMA)
Taipei Medical Instruments Commercial Association
Taipei Pharmaceutical Agents and Distributors Association
Taipei Pharmaceutical Business Association
Taipei Instruments Commercial Association
Taipei Kitchen Commerce Association
Taipei Machinery Traders’ Association
Taiwan Commercial Kitchen Equipment Development Association
Taoyuan Pharmacists Association

Vietnam

European Chamber of Commerce in Vietnam
Eurocham Pharma GroupEurocham FAASC
AmCham53

GRI Standards and Disclosures

54

GRI Content Index

About this report
DKSH’s second report, released in July 2019, 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 ofaction 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: www.dksh.com/global-en/home/about-us/sustainability/sustainability-reports

GRI standards and diclosures
GRI 101

Foundation (2016)

GRI 102

General Disclosures (2016),
Core option

References

GRI 102-1

Name of the organization

AR 2018, p. 7

GRI 102-2

Activities, brands, products and services

CB 2019, p. 13-16

GRI 102-3

Location of headquarters

AR 2018, p. 7

GRI 102-4

Location of operations

p. 32

GRI 102-5

Ownership and legal form

AR 2018, p. 7-8

GRI 102-6

Markets served

CB 2019, p. 12-16

GRI 102-7

Scale of operations

AR 2018, p. 4-5, 91-92
CB 2019, p. 36

GRI 102-8

Information on employees and otherworkers

p. 50

GRI 102-9

Supply chain

CB 2019, p. 12-16

GRI 102-10

Significant changes to the organizationand its supply chain

AR 2018, p. 38-40

GRI 102-11

Precautionary principle or approach

DKSH takes a risk-based approach to managing its
operations and supply chain. Although most of the
products we distribute have been developed by ourclients, we run a product stewardship program covering activities such as storage, labeling, packaging andarranging transportation, and our tracking systems
ensure that any issues can be quickly traced back tothe source. Regular auditing is in place to ensure
product safety and that operations are being run inaccordance with our environmental policies.

Omissions

55

GRI standards and disclosures

References

GRI 102-12

External initiatives

DKSH currently does not openly subscribe to or endorse any external initiatives, but through our clients'
expectations, we are indirectly exposed to such initiatives and strive to meet their requirements. An example for this is the Pharmaceutical Supply Chain Initiative (PSCI), which is endorsed by many of our multinational clients in our healthcare business and passed
down to us as a partner in their supply chain. Goingforward, we will be evaluating the most suitable initiatives to endorse, given the vast diversity of our enterprise.

GRI 102-13

Membership of associations

p. 51-53

GRI 102-14

Statement from senior decision-makerp. 2

GRI 102-16

Values, principles, standards and norms of
behavior

p. 10
CoC, p. 1-6

GRI 102-18

Governance structure

p.10
AR, p. 7-27

GRI 102-40

List of stakeholder groups

p. 12, 49

GRI 102-41

Collective bargaining agreements

p. 24

GRI 102-42

Identifying and selecting stakeholder

p. 12, 49

GRI 102-43

Approach to stakeholder engagement

p. 12, 49

GRI 102-44

Key topics and concerns raisedp. 12, 49

GRI 102-45

Entities included in the consolidated financial accounts

p. 101-102

GRI 102-46

Defining report content and topic boundaries

p. 12

GRI 102-47

List of material topics

p. 12

GRI 102-48

Restatement of information

In our second year of reporting environmental data,
we have restated some of our 2017 carbon emissions
and energy consumption figures to reflect our updates to our methodology and improved data sources
which have reduced the need for extrapolation. This
enables a clearer like-for-like comparison between
2017 and 2018 data. Please note 2018 fuel, refrigerants and transportation data for Myanmar, New Zealand and Cambodia, which were not in the scope ofthe 2017 reporting.

Omissions

56

GRI standards and disclosures

References

GRI 102-49

Changes in reporting

There have been no major changes in the material issues we report on between 2017 and 2018. In 2018
we have expanded environmental data reporting toinclude fuel, refrigerants and transportation data for
New Zealand, Myanmar and Cambodia.

GRI 102-50

Reporting period

Calendar year 2018

GRI 102-51

Date of most recent report

Published October 2018, relating to calendar year2017

GRI 102-52

Reporting cycle

We intend to update the report on a yearly basis.

GRI 102-53

Contact point for questions regarding thereportsustainability@dksh.com

GRI 102-54

Claims of reporting in accordance wit the
GRI Standards

This report has been prepared in accordance with
the GRI Standards: Core option

GRI 102-55

GRI content index

p. 55-59

GRI 102-56

External assurance

GRI Report 2018 has not been externally assured.

Omissions

Economic
GRI 201

Economic performance (2016)

GRI 103

Management approach (2016)

p. 30

GRI 201-1

Direct economic value generated and distributed

p. 31

GRI 202

Market presence (2016)

GRI 103

Management approach (2016)

p. 32

GRI 202-2

Proportion of senior management hiredfrom thelocal community

p. 32

GRI 204

Procurement practices (2016)

GRI 103

Management approach (2016)p. 33-34

GRI 204-1

Proportion of spending on local suppliers

p. 33

GRI 205

Anti-Corruption (2016)

GRI 103

Management approach (2016)p. 35-37

GRI 205-2

Communication and training aboutanti-corruption policies and proceduresp. 35-37

GRI 103

Management approach (2016)p. 17-19

GRI 302

Emissions (2016)

GRI 302-1

Energy consumption within the organization

Environment

p. 20

57

GRI standards and disclosures
GRI 305

References

Omissions

Energy (2016)

GRI 305-1

Direct (scope 1) GHG emissions

p. 20

GRI 305-2

Indirect (scope 2) emissions

p. 20

GRI 305-3

Other indirect (scope 3) emissions

p. 20

GRI 307

Environmental compliance (2016)

GRI 307-1

Non-compliance with environmental laws
and regulations

p. 17

SocialGRI 401

Recruitment and retention (2016)

GRI 103

Management approach (2016)p. 22-23

GRI 401-2

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

p. 22

GRI 403

Occupational health and safety (2018)

GRI 103

Management approach (2016)p. 38-39

GRI 403-9

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

p. 40

GRI 404

Training and education (2016)

GRI 103

Management approach (2016)p. 22-23

GRI 404-1

Average hours of training per year per
employee

p. 23

Information is currently unavailable
per employee category, but we will
be working towards refining this in
future reporting.

GRI 404-3

Percentage of employees receiving regularperformance and career development reviews

p. 23

Information is currently unavailable
according to employee categories.

GRI 406

Non-discrimination (2016)

GRI 103

Management approach (2016)p. 24-26

GRI 406-1

Incidents of discrimination and corrective
actions taken

p. 25

GRI 407

Freedom of association and collective
bargaining (2016)

GRI 103

Management approach (2016)p. 24-26

GRI 407-1

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

p. 25

GRI 408

Child labor (2016)

GRI 103

Management approach (2016)p. 24-26

GRI 408-1

Operations and suppliers at significant risk
for incidents of child labor

p. 25

Information is currently unavailable.
We will report more fully on this disclosure in future reports.

58

GRI standards and disclosures

References

GRI 409

Forced or compulsory labor (2016)

GRI 103

Management approach (2016)p. 24-26

GRI 409-1

Operations and suppliers at significant risk
for incidents of forced or compulsory
labor

p. 25-26

GRI 412

Human rights assessment (2016)

GRI 103

Management approach (2016)p. 24-26

GRI 412-2

Employee training on human rights
policies and proceduresp. 24-26

GRI 413

Local communities (2016)

GRI 103

Management approach (2016)p. 27-28

GRI 413-1

Operations with local community engagement, impact
assessment and development programs

p. 28

GRI 416

Customer health and safety (2016)

GRI 103

Management approach (2016)p. 41-43

GRI 416-2

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

p. 42

GRI 417

Marketing and labeling (2016)

GRI 103

Management approach (2016)p. 44-45

GRI 417-3

Incidents of non-compliance concerningmarketingcommunications

p. 45

GRI 418

Customer privacy (2016)

GRI 103

Management approach (2016)p. 46-47

GRI 418-1

Substantiated complaints concerning
breaches of customer
privacy and losses of customer data

p. 47

Omissions

Information is currently unavailable.
We will report more fully on this disclosure in future reports.

Information is currently unavailable.
We will repeat the training across ouroperations during 2019.

59

Sustainability at DKSH 2018
Publisher
DKSH Holding Ltd.
P.O. Box 888
Wiesenstrasse 88034 Zurich
Switzerland
Phone +41 44 386 7272
Fax +41 44 274 2034

Group Investor & Media Relations
Group Governance, Risk & Compliancesustainability@dksh.com

Edition: July 2019