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Sustainability at DKSH 2018

1
Think Asia. Think DKSH.
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 are
engrained 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 in-
formation 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 our
unavoidable emissions.

In the social area, we contribute to society by providing access to healthcare and important daily consumption items through our busi-
ness 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
Content

2 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 DKSH’s portfolio of services includes sourc- Publicly listed on the SIX Swiss Exchange,
Services provider with a focus on Asia. We ing, market insights, marketing and sales, the Group operates in 35 markets with
help our clients grow their business in the distribution and logistics as well as af- 33,000 specialists, generating net sales of
Consumer Goods, Healthcare, Performance ter-sales services. CHF 11.3 billion in 2018. With its Swiss her-
Materials and Technology markets we itage and long business tradition since 1865,
serve. DKSH is deeply rooted in Asia Pacific.

35
markets
825
business locations

33,000
specialists
11.3 billion
Net sales in CHF (2018)

4 Business Units

Consumer Healthcare
Goods

Performance Technology
Materials

4
Sustainability at DKSH

5
Environment

Energy savings of around


1,000 MWh per year due to
more efficient use of air
conditioning in Taiwan

Up to 10 percent fuel
savings with the new transport
network optimization system

Electricity consumption data


collected for 27 DKSH
operating markets

Siti Norazliyana Ali, Team Leader of Melaka Marine We are committed to conducting our busi- DKSH encourages employee engagement
Program, WWF Malaysia: ness in an environmentally sustainable man- in green issues. For example, a staff-led
ner. With our focus on the sale, marketing office waste taskforce launched at our
and distribution of products, a significant Swiss headquarters in 2018. And in China,
“Corporates can play a crucial part of our environmental impact results the company organized activities for
role in nature conservation by from warehousing, transport and logistics, World Environment Day.
and business-related travel.
having their key staff understand
how nature's services and the
economy are interrelated. The
generous donation received from
DKSH will be channeled
towards the continuation of
WWF Malaysia’s conservation
efforts.”

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 remote
areas. 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 to
make.

We are now implementing a transport planning tool which helps us select each day the
most 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 road
for the size of vehicle. It also ensures drivers are allocated the correct shift pattern, with
designated rest breaks, in compliance with local legislation. These measures help rein-
force 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 our
large distribution centre in northern Taiwan, we need to use a lot of cooling
to keep medicines and other temperature-sensitive healthcare products below 23˚C.
However, the existing air-conditioning system lacked an inverter mode, meaning
that whenever the system was activated it came on at full power, rather than
selecting 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 within
safe 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
Social

10,000 employees received 14


hours of training each through
the Fantree Academy

Zero workplace fatalities

13 years of continuous
partnership with Right to Play

Grace Cheng, Vice General Secretary & Director of We employ 33,000 specialists globally. Our One of our core initiatives in our major mar-
Public Relations, Chinese Christian Relief success largely depends on the availability ket Thailand is our decade-long partnership
Association, Taipei: of skilled and committed people who share with international organization Right to
our values. That is why we established the Play. This global organization uses the
DKSH Fantree Academy, our in-house learn- transformative power of play to educate and
“For the eighth year running, ing and development center. The Academy empower children facing adversity. DKSH
more than 500 DKSH employees uses customized programs to provide learn- continued its support in 2018 by providing
ing opportunities. It also serves as a plat- funding and use of our facilities. We also
supported our Christmas shoebox form for networking, sharing best practices support other charities that directly meet
initiative, providing gifts to and reinforcing our corporate culture. the needs of our local communities.

economically disadvantaged Besides furthering our own employees, For more examples of our local community
families in Taiwan. This is a a strong commitment to the local commu- initiatives, please see:
nities we operate in has always been an www.dksh.com/global-en/home/about-us/
strong commitment from DKSH integral part of our business. sustainability.
to its local community.”

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 from
the 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 and
the beautiful Shwe Pyi resort for 100 children from the Witharkhar Orphanage and
School. This nunnery school cares for orphans, providing them and other disadvantaged
local children with a monastic education. DKSH Myanmar has supported their work for
many years including donating a school building, supporting the teachers, and other
ongoing 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 chil-
dren, 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
Governance

Introduced 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 Our success is founded on collaborative, to ensure that the Code is followed. We
Manager South East A sia, GSK Consumer ethical and sustainable leadership. DKSH’s place great emphasis on hiring and retaining
Healthcare: Board of Directors and the Executive Com- people who share our values and who,
mittee are responsible for defining the busi- through their integrity, protect our business
ness strategy and assuring its execution, as well as that of our clients and customers.
“We have had a very strong including sustainability. They are committed (GRI 102-16)
partnership with DKSH for to upholding strong governance standards
representing the interests of DKSH and We operate as an intermediary between our
many years and really appreciate its stakeholders. A sustainability team, led clients and customers. For parts of our
their very clear and transparent by Group Governance Risk & Compliance service delivery, we also rely on third parties.
and Group Investor Relations, is supporting DKSH does not maintain relationships
ways of working based on trust. management in addressing material sus- with third parties that do not act in line with
The senior management operates tainability topics. our principles and standards of doing
business. To further emphasize this, we
in a very collaborative manner Our values and beliefs are enshrined in our introduced our Supplier Code of Conduct,
and makes a genuine attempt to Code of Conduct, adopted by our Board of which sets out clear expectations on issues
Directors and made available to all our em- such as labor rights and anti-corruption.
build a strong partnership.” ployees in English and local languages.
Employees need to formally adopt the Code
upon joining and receive periodic training

10
Successful ISO 27001:2013 certification for IT security management
“Our clients and other stakeholders want to feel confident that we are handling their
data responsibly and are addressing cybersecurity risks. Our global information security
management system underpins our approach to safeguarding our data. In 2017, Group
IT 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 TUV
Nord 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 in
collaboration with the Quality Assurance team. We are also planning to achieve
certification 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 For establishing our materiality matrix in Separately, expectations expressed by other
identify the most relevant topics for our 2017, a list of potential topics was assem- important stakeholder groups, such as
stakeholders. Our last materiality assess- bled from several sources, including various employees (via employee surveys), clients
ment was conducted in 2017. In 2018, we industry frameworks, sustainability reports and customers, were taken up via direct
performed a high-level review of the assess- by peers, clients and customers, as well as feedback. In fact, many of our top clients
ment. The review included the integration important factors identified by DKSH’s risk and customers have adopted sustainability
of updated information from business part- profile. Subsequent steps included an elim- principles and reporting standards, and they
ners, analysts, media, investors and sustain- ination of topics with limited relevance for expect DKSH to play its part in their up-
ability rating agencies. When defining re- our business, followed by an impact assess- stream or downstream supply chains.
port content, we have considered all ment conducted by survey, involving per-
significant aspects of our business along the sonnel located in various parts of the busi- These expectations also relate to stakehold-
value chain. Due care was taken for the ness and geographies. er groups that DKSH does not directly en-
preparation of this report through applica- gage with – such as consumers of health-
tion of the reporting principles of stakehold- care products and fast-moving consumer
er inclusiveness, sustainability context, ma- goods.
teriality and completeness to the best of our
ability. GRI 102-40, GRI 102-42 to 44,
GRI 102-46 and 47

Economic value
Anti-corruption
Labor standards
Environmental responsibility
Influence on assessment by stakeholders

Recruitment, retention and development


Procurement practices
Customer health and safety
Marketing and labeling
Occupational health and safety

Market presence
Local communities
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 to
a center for children with special
needs in India Yangon, Myanmar
DKSH demonstrates its engage-
ment for local communities with a
day trip for the Witharkhar
Orphanage

Phnom Penh, Cambodia


DKSH in Cambodia:
give blood – save lives

34 Dongala Palu, Indonesia


DKSH and Wicaksana help
supported projects in

34
2018
Donggala-Palu victims in Indonesia
supported
projects
projects in in 2018

15 in 15
differentdifferent
countriesmarkets
See more page 27
See more
(GRIpage X (GRI 413-1)
413-1)

Singapore
DKSH partners with Beyond Social
Services in spreading cheer to
disadvantaged families in Singapore

Melaka, Malaysia
DKSH joins WWF-Malaysia in
marine turtle conservation

13
Supporting the United Nations’
Sustainable Development Goals

DKSH strives to create sustainable value for Our business directly and indirectly contrib- Following a review of the SDGs in alignment
all our stakeholders. We are deeply rooted utes to the United Nations (UN) Sustainable with our materiality processes (see page 12),
in the communities we serve across Asia Development Goals (SDGs). These Goals, DKSH has prioritized five SDGs where we
and are committed to creating opportunities adopted by the UN in 2015 for delivery by can make a particular contribution.
for local development. 2030, seek to address the world’s biggest
challenges for the benefit of all, including
ending poverty, improving health and edu-
cation, and tackling climate change.

Goal 3 – Good health and well-being Goal 4 – Quality education Goal 8 – Decent work and economic
Ensuring access to healthcare is at the core As a services company, people are our growth
of our business and is aligned with one of greatest asset, and their dedication, attitude DKSH contributes to economic growth in
DKSH’s objectives to enable market access and passion drive the long-term success of many markets in Asia through our commit-
for healthcare products across Asia. our business. DKSH encourages employees ment to providing attractive jobs and en-
to own their professional development abling employment. We respect labor rights,
We also care about the health and safety of through proactive engagement. In learning such as non-discrimination and no forced
our employees and contractors, and we and development specifically, we subscribe or child labor, and recognize the role we can
participate in health-related community to the 70-20-10 learning model (see page play in our extensive supply chains in fur-
engagement activities, such as blood dona- 23 for details). thering these standards. In our own busi-
tion campaigns. ness, maintaining these standards particu-
The DKSH Fantree Academy, our in-house larly benefits lower skilled workers, such as
learning and development center, offers those employed in our distribution centers,
around 50 programs aimed at developing who can be more vulnerable to exploitation.
capabilities across all levels of the organiza- Many of the distribution partners we work
tion. We also recognize that an understand- with are small ‘mom-and-pop’ stores,
ing of sustainability issues is an important supporting local entrepreneurship and
skill for the future economy and seek to employment.
raise employee's awareness on these topics.

14
Goal 9 – Industry, innovation and Goal 13 – Climate action
infrastructure We seek to reduce the carbon impact of our
An important part of DKSH’s service offer- activities across the value chain. We recog-
ing is our market coverage via an estab- nize that our large, mainly outsourced, fleet
lished capillary distribution network, our and temperature-controlled facilities for
160 distribution centers and our 44 consumer goods and healthcare products
innovation centers across Asia. are sources of emissions. We have standard-
ized our global management approach for
Through our Business Unit Technology, greenhouse gas emissions and are looking
DKSH further offers complete solutions for at lower carbon paths in the markets in
specialized industrial applications to primar- which we operate, for our own operations
ily small and medium-sized enterprises in as well as in support of our clients’ climate
Asia. We provide access across the value change objectives.
chain, from sourcing, sales and marketing
to after-sales services.

15
Environment

16
Environmental responsibility

At DKSH, our environmental commitment In our own operations, with the adoption As an international Market Expansion
includes addressing our own impacts, sup- of our Health, Safety and Environment (HSE) Services provider with a focus on sales, mar-
porting our suppliers and clients in manag- policy in 2017, DKSH embarked on a journey keting and distribution, our main environ-
ing theirs, and raising our employees’ to strengthen and standardize our environ- mental impacts relate to our distribution
awareness of “green” issues. mental management across the business. In centers, fleet and business travel. We also
line with this policy, local HSE managers are do some manufacturing which entails a dif-
As a major employer, we have a role in ed- responsible for maintaining a register of ap- ferent set of environmental impacts, al-
ucating our employees about how they can plicable national environmental laws and though this activity is a minor part of our
reduce their environmental impact at home regulations and ensuring that all our oper- business.
as well as at work. For example, DKSH in ations are compliant through an adequate
China celebrated the World Environment management program. Distribution centers
Day 2018 with a “reduce-reuse-recycle” To distribute our clients’ and our own prod-
waste reduction campaign. In Malaysia, ucts, DKSH operates 160 distribution cen-
DKSH partnered with WWF to raise aware- No incidents of non-compliance with ters (DCs) across Asia. Our DCs and ware-
ness of wildlife conservation, including ma- environmental laws and regulations houses are typically leased, with a few of
rine turtle conservation, with various activ- were noted in 2018. them built-to-suit. For any investment into
ities for our employees in the rainforest and GRI 307-1 new facilities, environmental criteria will be
at the beach. considered in the planning phase.

17
Distribution centers account for a significant 1. Situating freezers inside cold rooms, Spills of hazardous substances can pose an
part of our carbon footprint. Energy is con- and cold rooms inside air-conditioned environmental risk, both in storage and in
sumed for lighting, cooling and operating rooms, to reduce the loss of chilled air transit. All such materials are handled in
forklifts and other handling equipment. We compliance with applicable Safety Data
aim to increase energy efficiency and 2. Segregating docking areas from stor- Sheets (SDS) and clear standard operating
choose lower carbon sources of energy age areas to maintain a stable storage procedures. In some cases, we outsource
where possible. Most of our handling equip- temperature the handling of certain substances to spe-
ment is battery-operated. Temperature- cialized service providers.
controlled facilities are adequately insulated 3. Where possible, choosing to build two
to reduce cooling requirements and air con- smaller cold rooms rather than one big Transport
ditioning systems are carefully calibrated. In one to increase cooling efficiency Our capillary distribution network serves
2018, our Healthcare DC in Taiwan switched several hundred thousand customers daily.
to a more efficient use of air conditioning– Preparing goods for delivery requires use of We have a small fleet of our own, but de-
thereby saving approximately 1,000 MWh packaging (mostly cardboard cartons and livery is mostly outsourced to specialized
per year. Energy-efficient lighting is also plastic for pallet wrapping) and packaging service providers, although we retain overall
used, including the installation of smart LED waste is generated from incoming ship- responsibility for delivery performance. One
systems. In 2018, DKSH switched to LED ments. Healthcare cold chain goods need of our most significant impacts relates to
lighting in two DCs in Thailand and New particularly extensive packaging to protect fuel consumption within these vehicles.
Zealand. We also design facilities to make the delicate items and we have set stan-
the best use of space, thereby minimizing dards for shipping healthcare products. Most of our service providers use die-
our storage footprint and associated need Where possible, we use returnable packag- sel-powered delivery vehicles, although
for air conditioning and handling equip- ing. This typically works well in urban areas some are natural gas-powered. In our
ment. The installation of moveable pallet where our distribution centers are located. high-volume, high-frequency business (e.g.
racks, a carousel system and a new mezza- For example, our “B-box” in Thailand is FMCG, Healthcare) with many delivery drop
nine floor in our Hong Kong DC enables used for shipping to key hospitals in points to be serviced, delivery route optimi-
denser storage. For new facilities, we are Bangkok. Selecting the most appropriate zation is key for operating efficiently. Fuel
optimizing our designs to achieve the packaging depends on the reuse markets savings lead to cost savings, representing a
greatest efficiency in picking, packing and and recycling facilities available in each mar- win-win situation. To tackle emissions for
storage. ket, and we look for the best option in each our small company-owned fleet and our
circumstance rather than adopting a single haulage suppliers, in 2018 we implemented
Fugitive emissions, generated by the use of approach. Although local management of a specialized software targeting transport
refrigerants, are another significant part of this issue is key, we will be looking further net work optimization in T hailand,
our carbon footprint. Temperature-sensitive at our packaging composition and waste Singapore, Hong Kong and Malaysia. This
products may require storage and transpor- management processes from a Group per- enables us to plan the most efficient usage
tation in air-conditioned vehicles or in spe- spective across our operations, to under- of trucks and the best routes to take. The
cial transportation boxes. In addition to stand the scale of the issue and identify system will result in efficiency gains and
monthly checks of cold rooms by mainte- possible synergies. savings of up to 10 percent as it reduces the
nance contractors, our operations team number of vehicles needed and the time
inspect the operating parameters and con- spent making deliveries as well as the dis-
duct thermal imaging scans to identify any tance driven. To ensure an effective use of
failures of the insulation or other sources of the new system, training on route planning
inefficiency. We also have implemented ‘de- has been provided alongside the software.
sign principles’ such as:

18
A further roll-out of the system is planned Reporting approach Kilometers flown data was supplied by our
for Taiwan and Vietnam in 2019 with addi- In our second year of reporting environmen- air travel providers for major markets includ-
tional energy savings anticipated. Please see tal data, we have expanded our reporting ing Hong Kong, Malaysia, Singapore,
page 7 for more details. scope significantly. Swit zerland and Thailand, and UK
Government (2018) carbon factors applied.
Business travel Data on refrigerants, fuels and downstream Data was extrapolated for the remaining
Despite our widespread use of communica- transportation is captured for markets with markets based on the available flight spend
tion technologies, traveling remains an im- the highest usage of refrigerated storage data.
portant factor in our service delivery and for and largest distribution networks. These
managing the company. Most of these jour- include Thailand, Malaysia, Singapore, We have restated data for 2017 based on
neys are made by vehicles not controlled by Vietnam, Cambodia, Myanmar and New improvements to our data methodology.
the company, such as business flights, trav- Zealand. For fuel, this includes usage of We will continue to refine our data process-
el by sales and service teams in their own CNG, LPG, diesel and gasoline for our inter- es to reduce extrapolation and may restate
cars, and public transport. Internal approval nal fleet of delivery vehicles and back-up previous years’ data to support like-for-like
systems are in place to prevent unnecessary electricity generators. For downstream comparison.
travel. In recent years, we have upgraded IT transportation, major suppliers provided
communication capabilities and promoted diesel consumption data in liters from bill We also disclose to CDP; please see our
conference and video calls to reduce the data. For consistency, all fuel property fac- latest carbon disclosure for more detailed
need for business travel. tors were sourced from UK Government information.
GHG Conversion Factors for Company
Office and IT infrastructure Reporting (2018 edition). The Global
Most of our offices are leased, often with Warming Potentials applied are from the
central control of air-conditioning and oth- Intergovernmental Panel on Climate Change
er fixtures by the building management, (IPCC) Fourth Assessment Report (AR4) over
poor visibility of our direct energy usage and a 100-year period.
limited scope to change the building fabric
and fittings. Options to reduce energy con- We collect data on electricity consumption
sumption in such cases include, for example, from bills received from utility suppliers for
upgrading lighting to LEDs and modifying 23 of our markets and have extrapolated
how we use the space, e.g. “turn off at energy data from cost data for a further
night” policies three markets. We have applied Location-
Based Factors according to the following
In 2018, employees in Switzerland began a hierarchy: (i) local government source
zero-waste initiative to target office waste. (as recent as possible, by state if available),
Progress so far includes reducing general (ii) IEA 2012, (iii) nearest neighboring coun-
waste bins at our headquarters in favor of try. For Market-Based Factors, we applied
minimizing waste and recycling ,wherever the following hierarchy: (i) electricity suppli-
possible, and collecting approximately 30 er factor, (ii) most recent credible residual
kilograms of coffee pods per month to re- factor source (e.g. RE-DISS for European
cycle. This initiative demonstrates our em- countries) and (iii) same as Location-Based
ployees’ engagement in green issues and Factor.
we aim to replicate this across the organi-
zation going forward.

19
Greenhouse gas emissions

2017 2018 2017 per 2018 per Change per


In metric tons of In metric tons of employee employee employee
CO2e1 (restated) CO2e1 In kg CO2e1 In kg CO2e1 In %

Scope 1
10,175 8,2183 441 285 (35.4)
Fuel and refrigerants

Scope 2
56,202 57,416 1,758 1,740 (1.0)
Electricity (location-based)2

Scope 3
30,282 28,663 947 869 (8.2)
Air travel

Scope 3
69,492 78,9854 3,009 2,765 (8.1)
Downstream transportation

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 2017
3
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 regular
basis, and newer systems are associated with lower fugitive emissions, the scale of the decrease between 2017 and 2018 is influenced by the maintenance
schedule 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 2017 per 2018 per Change per


In MWh In MWh employee employee employee
(restated) In kWh In kWh In %

Direct Energy
10,430 17,4677 452 6071 34.31
Fuel

Indirect Energy2
99,861 100,842 3,123 3,056 (2.1)
Electricity

Total Energy3 110,291 118,309 3,575 3,663 2.5

1
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 cooling
3
Excludes heating (currently data not available) and steam (not applicable)
GRI 302-1

20
Social

21
Recruitment, retention and development

As a services provider with roughly 33,000 In addition to offering competitive remuner-


Our practices with respect to providing
employees, our success largely depends on ation and other benefits, we provide a com-
benefits to employees comply fully with
the availability of skilled people who share pelling Employer Value Proposition (EVP).
applicable legislation and in many cases
our values. As our reputation is built on The EVP is our promise to employees – what
exceed it. In four of our nine significant
trust, integrity and reliability, we seek to we offer them in exchange for their skills,
operating markets1, the benefits provided
retain talent to maintain stable relationships capabilities and experiences.
to part-time and temporary employees are
with our business partners.
identical to those of permanent full-time
The DKSH Employer Value Proposition
employees, and in three other markets
DKSH provides a variety of benefits to its 1. Enjoy a world of learning and develop-
there are only minor variations. In two
employees, based on applicable policies in ment. Thanks to DKSH’s great diversity of
markets, no voluntary benefits are provid-
the markets of operation. Standard benefits, services, industries, clients, products, re-
ed to part-time or temporary employees.
with some variation by market, include life gions and employees, you’ll enjoy a world
GRI 401-2
insurance, healthcare, disability and invalid- of on-the-job learning and development
ity coverage, statutory retirement provision that will drive your personal and profession-
and parental leave. Benefits related to stock 1
Refer to GRI 102-4 for definition al growth
ownership are limited to eligible key man-
agers of the company (Annual Report 2018,
page 32).

22
2. Own your career and take business re- Since 2015, the number of trained employ-
All our employees have a yearly appraisal.
sponsibility. DKSH offers you a dynamic ees and total number of course participants
16 percent of employees received a more
growth environment and unique culture increased every year. In 2015, 5,045 employ-
extensive performance review in 2018
where you can “write your own career tick- ees attended at least one Fantree Academy
(2017: 11 percent). This review applied
et” by taking business responsibility and course, whereas in 2018 it was 9,778 DKSH
mostly to management-level employees.
career ownership early on, seizing develop- employees (2017: 8,754). As employees can
All decision-making with respect to ap-
ment opportunities whenever they arise attend several courses, there were 17,461
praisals, development opportunities and
registrations to training courses in total in
promotions is required to uphold our equal
3. Have a positive impact that touches peo- 2018, up by more than a fifth against 2017
opportunities commitment.
ple’s lives. By helping DKSH and other com- (14,255) and more than twice as many as in
GRI 404-3
panies grow and bring their products, solu- 2015 (8,792).
tions and progress to markets, you’ll
experience your own personal growth and As part of our continuous efforts to engage
Nearly 10,000 DKSH employees participat-
the satisfaction of seeing the positive im- our specialists and create a dynamic and
ed in Fantree Academy in 2018, each re-
pact you have on the lives of others. high-performance work environment, we
ceiving an average of 14 hours of training.
regularly conduct employee surveys. These
GRI 404-1
Performance reviews surveys focus on the work environment,
At DKSH, we encourage employees to own leadership, organizational transformation,
their professional development through pro- company culture and other matters affect- Mobility, benefits and recognition
active engagement. ing workplace effectiveness. Resulting The diversity of our business enables our
action plans are drawn up, implemented employees to gain new experiences by pro-
An important feature is the six-monthly per- and monitored moting internal mobility across markets and
formance review where they can discuss organizational units. We regularly advertise
and agree on their personal development Learning and development job openings internally to foster career pro-
plan with their line manager. It is a require- In learning and development, we subscribe gression and only recruit externally if no
ment of our General Employment Policy that to a 70-20-10 learning approach. This ap- suitable internal applications are received.
all employees participate in a formal annual proach recognizes that the greatest impact Our Mobility Guidelines, part of our Group
appraisal of their performance with their of learning comes from job-related, hands- Compensation and Benefits, provide guid-
line manager. This is carried out through the on experience and occupational training (70 ance on supporting employees as they move
DKSH Talent Portal, an online performance percent). The remaining impact comes from through the company, such as subsidizing
and talent management solution. Regular learning through others (20 percent) and costs and providing cultural training to ex-
dialogues between managers and employ- through formal courses (10 percent), large- patriate workers and their families when
ees on development objectives, including ly provided internally via DKSH’s Fantree entering a new market.
constructive and focused feedback, are also Academy.
a part of the development journey at DKSH. Recognition is a key part of our approach to
The DKSH Fantree Academy, our in-house retaining talent. Each year, we celebrate the
learning and development center, offered employees who have most embodied our
49 programs in 2018 (2017: 39) to develop corporate values through the DKSH Fantree
capabilities across all levels o f t h e Awards.
organization. The training programs span
three pillars: essential skills, leadership
programs and functional skills. Training is
provided through various channels,
including classroom, instructor-led, on-the-
job training and training through the
company’s intranet.

23
Labor standards

In our service business, ethical conduct and Much of our workforce is employed in mar- The Human Resources (HR) and Supply
integrity of our workforce is crucial for our kets and industries which typically rank high Chain Management teams in each of our
reputation as a trusted service provider. on human rights risk indices. Additionally, key operating markets have responsibility
Pleasant and safe workplaces free of dis- we procure a sizeable range of supply chain- for all hiring and for ensuring employees
crimination and harassment and respecting related services and products across Asia, and contractors have the correct documen-
human rights are key elements in our em- such as outsourced transport and delivery tation. We operate management programs
ployment offering, as laid out in our Code services for our distribution network as well in line with applicable local laws and labor
of Conduct. We respect our workers’ rights as labor and equipment and materials for regulations to prevent the hiring of un-
for freedom of association and collective our logistics and marketing operations der-age persons or illegal workers, to ensure
bargaining. (warehouse workers, product promoters, decent and safe workplaces, fair and timely
component suppliers for our own-brand pay, and adequate rest periods. We expect
At the end of 2018, 27 percent of DKSH’s manufacturing). To mitigate the risk of hu- all our business partners to respect the ba-
employees were covered by collective bar- man rights violations, we focus our atten- sic principles of human rights, as mandated
gaining agreements (2017: 24 percent1). tion on contractors who directly help us by our Supplier Code of Conduct. Violation
GRI 102-41 deliver our service offering, including deliv- of these principles can lead to contract ter-
ery drivers and warehouse workers. mination.
1
Restated figure from 2017

24
DKSH does not discriminate based on age, Discrimination and harassment Freedom of association and collective
religion, gender or any other category, and Our Group’s HR Function ensures that em- bargaining
this policy is enshrined in our Code of ployees are aware of proper reporting chan- We would never penalize anyone engaging
Conduct (“the Code”). As part of the Code nels for incidents of discrimination and ha- in workers’ groups in good faith. Where
and related trainings, we explain our stance rassment. In 2018, no such incidents were such arrangements exist, we respect the
on human rights and non-discrimination to reported to HR. terms and conditions in collective agree-
employees and ask any staff member who ments and we nurture relationships with
feels that they, or one of their colleagues, is DKSH recorded no incidents of discrimina- unions through constructive engagement.
subject to discrimination or harassment to tion or harassment in 2018. We are committed to ensuring that appro-
report it to the HR department. Organiza- GRI 406-1 priate mechanisms are in place to enable
tionally, we practice a business partnering employees and contractors to express their
approach, whereby representatives of the Induction training for new employees and views about their workplace through, for
HR department are stationed within opera- on-site contractors includes the importance example, open meetings for group discus-
tions for ease of access. of treating all people with respect. It specif- sion between employees and local manage-
ically states that any form of discrimination ment, or meetings with elected workers’
Our management approach on non- based on gender, race or any other protect- representatives. This includes markets where
discrimination and human rights practices ed characteristic, sexual harassment and collective bargaining is restricted by law or
has focused thus far on legal compliance; bullying are not acceptable. The training by custom.
governance processes, and evaluation of encourages people to report to the site
their effectiveness has mainly been at the manager or HR in case of misconduct and Child labor
local level. Although we are not aware of emphasizes that reports will be kept confi- The HR teams check that applicants are le-
significant issues arising from our current dential. gally able to work, and proof of identity is
approach, we are mindful that a compli- needed for all contractors working on our
ance-led approach could lead to varying Labor rights sites. However, we are aware that comply-
standards among markets. We are consid- GRI 407-1, GRI 408-1, GRI 409-1 ing with local requirements on minimum
ering centralized over sight of this Our Code of Conduct and Supplier Code of age could lead to different standards being
issue, with clear reporting lines to Group Conduct respect workers’ rights to freedom applied in different markets. As part of our
management. We are also planning a of association and collective bargaining and human rights assessment, we will evaluate
human rights impact assessment to better prohibit the use of forced or child labor. The the effectiveness of existing management
understand where our risks lie and how to induction training all employees and on-site systems and processes to mitigate any risk
mitigate them. This will focus on major contractors receive encourages any worker of child labor in our operations and among
operations and key contractor types, suspecting a violation of their colleague’s our contractors. We will also look at mea-
identified using a risk-based approach, and human rights to report it in confidence. sures to reinforce the provision against child
we will comment further on our progress in labor in our new Supplier Code of Conduct.
future reports. We will report more fully on this disclosure
in future reports.

25
Forced or compulsory labor Human rights assessment 74 percent of our employees received train-
As part of our human rights assessment, we Our Code of Conduct training includes hu- ing on our Code of Conduct in 2017, includ-
will evaluate the effectiveness of existing man rights issues. We ran a large-scale ing human rights issues.
management systems and processes to mit- Code of Conduct training campaign in GRI 412-2
igate the risk of forced or compulsory labor 2016, followed by a refresher training for
in our operations and among our contrac- employees in 2017 that could be accessed
tors. We will report more fully on this dis- electronically. New recruits also receive in-
closure in future reports. duction training. We aim to have a training
that reaches all employees, annually. We are
currently unable to quantify the number of
hours spent on Code of Conduct training in
2017 and how much of this time can be
attributed to human rights. We will repeat
the training across our operations during
2019.

26
Local communities

A strong commitment to the local commu- Directly linked to our business activities, our officials or candidates for public office, or in
nities we operate in has always been a key colleagues in Business Unit Healthcare in support of any political campaigns.
part of our business. 2018 organized blood donation campaigns
in Cambodia, Hong Kong, Malaysia, In terms of charities, one of our core initia-
We create positive impacts on society, par- Myanmar and the Philippines. Business Unit tives in our major Thai market has been to
ticularly in less developed regions, by pro- Consumer Goods regularly participates in support Right to Play for more than ten
viding stable jobs with fair employment food donation programs. In Singapore for years. This global organization uses the
terms and opportunities for personal devel- example, DKSH donated almost 300 food transformative power of play to educate and
opment, and by setting a clear standard for bundles to low-income neighborhoods in empower children facing adversity.
how business should be conducted. August 2018.
Furthermore, through our capillary distribu- We are also open to opportunities to offer
tion network, we enable market access for Alongside our business activities, we strive roles to local people who have struggled to
healthcare products and other necessary to create a positive impact by engaging in enter the workplace. For example, in
items across Asia, contributing to the qual- projects and selected sponsorship programs Malaysia, DKSH employs around ten deaf
ity of life in the communities we serve. In to develop and support local communities. people from the local community at the
addition, we provide ingredients and equip- However, as stated in our Code of Conduct, Famous Amos cookie outlets.
ment to build local industries and infrastruc- DKSH does not engage in political process-
tures with our Business Units Performance es and for that matter refrains from any
Materials and Technology. form of donation to political parties, elected

27
We support humanitarian relief through
In 2018, 100 percent our markets with
donations of money, products, food and
significant operations participated in char-
volunteering. In 2018 our efforts included
itable activities benefitting local commu-
donating to the victims of the Hualien earth-
nities (2017: 70 percent). In total, DKSH
quake in Taiwan in February 2018. In
supported 34 (2017: 16) projects.
October 2018, DKSH – through its subsidi-
GRI 413-1
ary Wicaksana – helped those affected by
the massive earthquake and tsunami in
Donggala in Indonesia.

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
Governance

29
Economic performance

DKSH drives a clear strategy for sustainable, DKSH’s strategy for economic value gener- DKSH has a Group Tax Policy in place and is
profitable growth that continuously increas- ation is based on our three strategic pillars: committed to paying its taxes in a timely
es our market share and helps our clients manner and in the markets where the rev-
expand their businesses. The economic val- • We focus on our existing Business Units enue was generated. Intra-group transac-
ue that we generate benefits our stakehold- and markets to leverage our leadership tions are carried out under market condi-
ers, such as providing returns and dividends position tions and are supported by transfer pricing
for our shareholders, salaries for our em- • We continuously strengthen and extend documentation.
ployees and tax payments to local govern- our service offerings to ensure long-term
ments. DKSH contributes to various chari- success for our customers and clients DKSH monitors its financial performance
table projects based in our local commu- • We progressively drive improvement in through a process steered by the CEO, the
nities. By supporting a diverse range of the efficiency and effectiveness of our CFO and the Board of Directors. The Group
smaller charities, we respond directly to the processes publishes its results twice a year. Please see
local need. our Annual Report for more information.

Our stakeholders have a keen interest in


DKSH as a long-term investment opportu-
nity, attractive employer, reliable business
partner, responsible taxpayer and good
corporate citizen. Therefore, the generation
and distribution of economic value is key for
us to meet our stakeholders’ needs.

30
DKSH 2016 DKSH 2017 DKSH 2018
Annual Report Annual Report Annual Report

Direct economic
Revenues 10,541 11,058 11,455
value generated

Economic value
Operating costs (9,641) (10,113) (10,444)
distributed

Employee wages and


(594) (639) (669)
benefits

Payments to providers of
(98) (311) (119)
capital

Payments to govern-
(80) (77) (71)
ments (taxation)
Direct economic value
Economic value
generated - economic 127** (82) 151**
retained*
value distributed

* 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’ Our mixed management teams represent
DKSH defines significant operations as all
products in local markets, particularly in various cultures and backgrounds. This
markets with more than 500 employees.
Asia. Our in-depth knowledge of the mar- aligns well with requirements of the busi-
This includes the nine markets of
kets we do business in is a key part of the ness and with DKSH serving as a bridge
Cambodia, Hong Kong, Indonesia,
value we bring to our clients, who often do between international clients and local mar-
Malaysia, Myanmar, Singapore, Taiwan,
not have a local presence. An important kets and customers. Our roughly 33,000
Thailand and Vietnam.
part of our service offering is our market DKSH employees cover 70 nationalities,
GRI 102-4
coverage via a capillary distribution net- meaning that we speak the language and
work, which means that we can serve our understand the culture of our business part-
customers wherever they are located. ners in the 35 markets we operate in. In
53 percent of local senior management is
2018, 53 percent of senior management
hired from local communities, whereas
Operating as part of the many diverse local (2017: 57 percent) in our markets with sig-
"local" throughout this report refers to the
communities we do business with is part of nificant operations was hired from the local
35 markets we operate in.
our corporate culture. We also believe shar- community, whereby “senior” refers to
GRI 202-2
ing business practices across cultures con- managers in corporate, regional or local
tributes to local skills and economic devel- management roles. Local management roles
opment. include first and second line full-time man-
agers.

32
Procurement practices

The bulk of our procurement activities refer and retail operations, and distribution center Regarding supplier selection, our technical
to goods we source and distribute under operations (purchase or lease of material requirements typically will limit the number
marketing and distribution services agree- handling and racking equipment, logistics of qualifying suppliers. In Business Unit
ments with our clients. These goods are workers, packing materials and utilities). Healthcare, for example, redressing suppli-
procured directly from our clients’ supply Although we do not have a specific policy ers (for repacking or labeling of products)
sources based on market demand, in line of procuring locally, almost 100 percent of need to be able to operate under the re-
with contractual agreements. Supply sourc- our procurement by spend in 2018 was quirements of Good Manufacturing
es may be local in the markets of distribu- from local companies as it was mainly Practices (GMP). Supplier assessment is
tion or from other parts of the world, as service delivery. based mainly on factors such as the compa-
determined by our clients. ny’s financial robustness, capabilities, capac-
ities and standing in the market. The respec-
For the local execution of our business, our For the local execution of our business, tive Business Unit’s Quality Assurance (QA)
main expenditures are for marketing activ- 100% of our procurement by spend in team will monitor service delivery and the
ities (advertising, promotional services in 2018 in significant locations of operation need to retain or replace service providers.
consumer outlets), transport and delivery was from local companies as it was main- This activity is often also under scrutiny by
services for our local distribution network, ly service delivery. our clients’ own Quality Assurance (QA)
facilities rental for office, distribution center GRI 204-1 management.

33
Part of our unique selling proposition (USP) A comparatively small part of our business Our franchise business for Levi’s follows the
is how quickly and flexibly we can respond relates to the sourcing of materials and strict procurement guidelines by the Levi
to client and customer requirements, and components for the own brand items we Strauss Company. Levi Strauss either sup-
this is reflected in the lead time we can of- manufacture or distribute (OEM). These in- plies materials to us for manufacturing,
fer our suppliers. Our delivery services pro- clude watches and healthcare products, as appoints supply sources, or audits and
viders are expected to meet certain key well as our food manufacturing and Levi’s approves suppliers selected by DKSH
performance indicators, such as delivery franchising business in South East Asia. prior to us procuring materials from them.
accuracy and timeliness, which are moni- Whenever possible, we give preference to
tored over time and may lead to perfor- In our own brands healthcare business, local suppliers over imported goods.
mance improvement discussions (applicable supplier selection is primarily driven by qual-
mostly in our Fast-Moving Consumer Goods ity and capability considerations. In a signif- Our food processing activity in the
and Healthcare businesses). Since our clients icant part of this business, DKSH is the Philippines focuses on flexible solutions for
and customers value our reliability, we seek licensee, and the supply source is either the customers in the food services or consumer
long-term stable relationships with critical licensor or is determined/approved by the business (premixes and finished products).
suppliers. For our crucial delivery services, licensor. All supply sources must meet GMP About 60 percent of procured materials for
we operate from a few main providers in and WHO standards and be compliant with production (mixing and blending) are
each market. Corporate Supply Chain the Pharmaceutical Inspection Co-operation sourced from local suppliers, with the rest
Management (SCM) sets the standards for Scheme (PICS). Suppliers are audited accord- procured internationally from China, USA,
transport logistics suppliers and oversees ingly, by health authorities as well as by our ASEAN, Korea and Europe.
implementation of the standards in local own audit procedures.
operations.
In our watch business, to avoid the sourcing
Importantly, our policies require suppliers to of materials from conflict zones, we choose
be dealt with fairly and transparently, and local suppliers who respect standards of
for the results of tender or bidding process- responsible procurement (OECD Due
es to be communicated openly. DKSH is Diligence Guidance for Responsible Supply
also bound to investigate any complaints Chains of Minerals from Conflict-Affected
raised by suppliers of unfair or unethical and High-Risk Areas, Kimberley Process
practices conducted by any of our employ- Certification Scheme and Responsible
ees or by their competitors. At the same Jewellery Council).
time, we also expect our suppliers to act in
line with our principles and standards, as
expressed via our Supplier Code of Conduct
introduced towards the end of 2018.

34
Anti-corruption

As a Market Expansion Services provider, and who, through their integrity, protect DKSH expects lawful and ethical behavior
we play an important role in the supply our business and that of our clients and from all employees and business partners as
chain of the industries we serve, acting as a customers. laid down in our Code of Conduct, which
link between our clients and customers. also prohibits any form of bribery and cor-
Trust and integrity are of paramount impor- 100% of our employees are made aware ruption, including facilitation payments.
tance in our service business. We advocate of our anti-corruption policies upon join-
compliant and ethical behavior in all our ing, including periodic reminders during Non-compliance risks are addressed in a
business activities, and we do not tolerate their employment with us. comprehensive compliance program that
corruption. Most of our business is conduct- GRI 205-2 includes our Anti- Briber y and Anti-
ed in Asia where we operate in several mar- Corruption and other policies, risk assess-
kets and industries with perceived higher ment, processes and procedures, training
integrity risks. It is therefore imperative that We model our anti-corruption program on and education, monitoring and auditing, as
our employees understand our values and the requirements of the U.S. Foreign well as confidential reporting and investiga-
expected standards of business conduct and Corrupt Practices Act (FCPA) and the UK tions. Accountable to the General Counsel,
live up to and respect them in all their ac- Bribery Act (2010) and we adhere to the the Group’s Governance Risk Compliance
tivities. We place great emphasis on hiring same high standards irrespective of where (GRC) Function is responsible for operating
and retaining people who share our values we are operating. an effective compliance program based on
our compliance policy framework.

35
For the execution of the compliance pro- supervisors or to GRC (an email address is
gram, GRC works directly with DKSH’s op- provided in the published Code of Conduct In 2018, apart from onboarding proce-
erating markets. The management team for and various internal policies, for use by in- dures, 1,675 selected employees complet-
each market overseas compliance at a na- ternal and external stakeholders in confi- ed anti-corruption training, focusing on
tional level, led by a Head of Country dence). Substantiated cases are investigated, higher risk positions (sales, marketing,
Management who is appointed by the Chief ensuring confidentiality and protection of procurement Functions) and markets
Executive Officer (CEO). In markets with the reporters. An annual review of compli- (based on Transparency International’s
perceived higher compliance risks, the Head ance with our standards is made to the ex- Corruption Perception Index) as well as
of Country Management is supported by ecutive management, to identify trends and employees in control Functions.
dedicated local compliance managers who the areas to focus compliance efforts. GRI 205-2
operate under the guidance and control of
GRC. For compliance initiatives relating to Training and communication are important DKSH's governance bodies for sustainability
specific Business Units or Functions, GRC cornerstones of our compliance culture. are identical with those responsible for the
engages directly with the global Business New employees undergo thorough on- strategic and operational management at
Unit or Function Heads. boarding procedures upon joining our or- corporate and market level (Board Members
ganization. These include endorsing our in listed entities, corporate executive man-
As stated in the Code of Conduct and the policy framework and completing certified agement, country management teams). The
Anti-Bribery and Anti-Corruption policy, compliance training. Periodically, all employ- regional split in 2018 was as follows:
employees and intermediaries are required ees need to refresh their knowledge of
to immediately report any incidents of DKSH’s anti-corruption policies and its stan-
non-compliance – including demands for dards and expectations on proper behavior
bribes or facilitation payments – to their in business.

Region Total governance body members


In 2018, 100 percent of governance body
Thailand 12
members were aware of DKSH anti-
Greater China* 21 corruption policies. 94 percent of gover-
nance body members were selected for
Malaysia and Singapore 23
anti-corruption training (excl. non-execu-
Rest of Asia Pacific 82 tive board members), all of which complet-
ed the training in 2018 and 2019.
Rest of the World 39
GRI 205-2
Total 177

*China, Hong Kong, Macau and Taiwan

36
Integrity of the supply chain These business partners are engaged based Effectiveness of the compliance
As an outsourcing partner to our clients, we on contracts that contain anti-corruption program
are committed to upholding integrity in the compliance clauses, with our Code of Management is responsible and accountable
supply chain, which includes our down- Conduct and Anti-Bribery and Anti- for ensuring proper application of compli-
stream business partners whom we rely on Corruption policy serving as contractual ance standards in the business. The Group’s
for parts of our service delivery. DKSH does documents. Towards the end of 2018, we compliance function, GRC, supports man-
not maintain relationships with business introduced a more focused Supplier Code agement through providing advice, meth-
partners that do not share our values and of Conduct which will replace our Code of odologies, tools, etc. and performs reviews
meet our standards of doing business. Conduct as a contractual document for all to assess the level of awareness, under-
supplier agreements. This will be realized standing and application of standards and
In communicating our anti-corruption poli- over time as contracts are renewed or new compliance controls. Furthermore, the
cies, we focus on business partners assisting contracts are entered. Group’s Internal Audit (GIA) Function per-
us with the execution of our business forms compliance audits through audit as-
directly. These include sales intermediaries, signments derived from GIA’s risk assess-
Anti-corruption policies are communicated
such as sub-distributors, tender agents and ment.
to all our downstream business partners.
resellers, or vendors, such as commission
GRI 205-2
agents, consultants, forwarders, importers, Externally, DKSH’s compliance program is
customs brokers, fulfilment agents and assessed by prospective or active clients
event organizers. and/or external audit firms appointed by
them. The assessment includes thorough
due diligence procedures and pre- or
post-contract compliance audits and re-
views.

37
Occupational health and safety

Considering the nature of our business, Our Code of Conduct, which employees are records) before commencing duties. Periodic
health and safety in the workplace, includ- trained on regularly, stipulates our approach refreshers are also held, and attendance is
ing operational settings at distribution cen- to health and safety, the role we all must monitored.
ters and warehouses, remains one of our play in keeping our workplaces safe, and the
top priorities. In smaller parts of our busi- importance of reporting hazards promptly HSE policy and management system
ness, we deal with the storage, handling to the line manager or Health, Safety and Since 2017 we have been operating a new
and transportation of dangerous goods, Environment (HSE) officer. HSE policy and management system, which
(e.g. chemicals, aerosols) where there is the provides centralized support and global
potential for our employees in Supply Chain Our induction training for all new recruits standards to local HSE managers who
Management and other Functions to be includes a comprehensive HSE module, in implement the system in line with local
exposed to health and safety risks. Our cap- addition to any job-specific training they legislation. This includes as a minimum:
illary distribution network means a signifi- receive. This includes rules and guidelines vehicle and traffic safety management,
cant amount of travel for sales teams and within our key operations, such as usage of fatigue management, alcohol and drugs
delivery drivers (mostly contractors), making forklifts and other handling equipment, and prohibition, dangerous goods handling
safe driving a priority as well. the wearing of personal protective equip- and storage, waste and environmental
ment (PPE). All new recruits must complete management, and specific guidelines for
the training (with signed attendance manufacturing operations and those

38
operating, servicing or installing machinery. For the handling of hazardous goods, we Workplace audits by key clients, customers
In cases where DKSH internal standards ex- have a Standard Operating Procedure on and standards boards and regulatory bodies
ceed local regulatory requirements, the Hazard Identification and Risk Assessment all facilitate hazard identification, including
DKSH standard should be met. and Risk Control (HIRARC), HIRARC Training internal stakeholders (Group SCM, HSE
and Guidelines, and a HIRARC Inspection managers) across the organization. Key haz-
Roles, responsibilities and accountabilities Form. Following safety audits, corrective ards consist of, inter alia, improper forklift
are defined, documented and communicat- action plans are used to address any issues. activities, improper stacking of loads and
ed to enable all individuals to fulfill their role storage of materials, improper manual lift-
in improving health and safety performance. The new vehicle tracking solution we began ing and/or handling, operating powered
Steering Committees (SC) at Group and implementing in 2018 will be able to iden- equipment and potentially dangerous
market levels are responsible for setting the tify speeding among our own fleet and goods and hazardous substances exposure.
health and safety agenda, with policies and contracted delivery drivers. Actions taken to manage risks include en-
strategies to drive performance. HSE gineering and administrative controls, as
Managers drive implementation of the pro- We evaluate our health and safet y well as personal protective equipment.
gram at the market level. Local Business management approach through perfor- Examples are establishment of policies, pro-
Units, Functions, their respective line man- mance monitoring at site, market and Group cesses and procedures, setting up of warn-
agers and specific site managers act as risk levels. A health and safety scorecard is ing signs and equivalent mechanisms at the
owners, who are responsible and account- generated and reported to the Group working environment, use of protective
able for preventing and responding to inci- Steering Committee on a quarterly basis. equipment, ensuring operational competen-
dents in their areas. Management approaches are adapted cy and trainings of our workers. In some
accordingly. A global leadership team instances, the risk is transferred via out-
Contractors under Group Supply Chain Management sourcing of specific dangerous goods and
The new HSE policy includes roles and re- conducts regular monitoring and reviews hazardous substances to third party vendors
sponsibilities for Supply Chain Management activities under an internal assessment with capabilities and capacities for manage-
(SCM), and we have issued training to our program that includes safety. ment and storage.
relevant employees on how to communicate
our requirements to the suppliers they in- 2018 performance DKSH is pleased to report zero work-
teract with. This includes ensuring all con- In line with our health and safety objective related fatalities for 2018. One incident of
tractors working on our sites are aware of of continuous improvement, DKSH contin- high-consequence work-related injury was
emergency procedures, proper lifting tech- ued to align our health and safety manage- recorded in our China market involving a
niques and other safety procedures. HSE ment and practices with global standards in DKSH employee during product handling
managers are asked to ensure contractors 2018. Greater emphasis has been put on (broken finger due to mishandling of equip-
have a clear reporting line for any concerns preventative measures and enhancing em- ment). We will continue to step up efforts
they may have. ployee health and safety awareness in key to engage our workforce on the importance
areas of our business, including dangerous of health and safety incident prevention and
Specific HSE requirements relating to goods and hazardous substances manage- mitigation.
suppliers are also covered in SCM policies, ment. We have improved our health and
the Standard Operating Procedure on safety tracking, monitoring and reporting DKSH is closely monitoring our safety per-
Workplace Safety (which includes safe systems. DKSH’s Group and market level formance data to ascertain the impact of
driving), Working Instructions on Visitor health and safety committees, comprised of our health and safety initiatives. We believe
Safety, Contractor Safety and Permit to management and employee representatives, that our promotion of timely hazard identi-
Work (which also covers safe driving), periodically review health and safety activ- fication and mitigation, as well as legal and
and Contracator Guidelines. ities and performance to drive improvement. compliance self-assessment and manage-
ment at individual markets have improved
our operations’ and sites’ ability to identify
and address unsafe conditions or actions.

39
Work-related injuries 2018

Employees Number Rate1


Fatalities from work-related injuries 0 0
High-consequence work-related injuries 1 0
Recordable work-related injuries 52 0.9
Number of hours worked (in million) 57.5

Workers (all, no exclusions) Number Rate1


Fatalities from work-related injuries 0 0
High-consequence work-related injuries 0 0
Recordable work-related injuries 12 1.4
Number of hours worked (in million) 8.8

1
per 1,000,000 hours worked

Main types of work-related injuries

Types of injury Employees Other workers


No. of First Aid injuries 23 10
No. of Medical treatment beyond first aid 9 2
No. of Job restrictions or transfers 1 1
No. of Lost time injuries 42 9
No. of Fatalities 0 0

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

GRI 403-9

40
Customer health and safety

The requirements to operate our business Strong product stewardship mitigates industry, with Performance Materials pro-
may be different for each of our four against compliance risks and legal damages. viding specialty chemicals and food ingre-
Business Units, yet product safety is critical As a service provider with very limited man- dients, and Technology offering customized
to all business models and to DKSH’s brand ufacturing activities, our main role is to safe- solutions spanning a wide array of indus-
reputation. We serve two main categories guard the quality and safety of the products tries. Meanwhile, the Consumer Goods and
of business partners: clients to whom we in our care and custody, and to ensure the Healthcare Business Units operate closer to
provide Market Expansion Services, and cus- safe delivery of any services we provide that consumer markets, distributing food, non-
tomers who buy our products and services. are ancillary to our products. Traceability is food and healthcare products.
These two categories differ regarding the also a key factor; if any issue arises in our
legal position on liability, the reputational supply chain, we can pinpoint and address The variety of items, the number of markets
risk of an unsatisfactory product or service, it. and cross-border transfers, and the chang-
and the nature of the activities we need to ing regulatory landscapes all demand the
undertake to uphold customer health and Health and safety risks differ across our four highest levels of product stewardship for the
safety. Business Units, given their widely varying goods in our custody. Our ability to navigate
products. For example, the Performance such complexity is part of the reason clients
Materials and Technology Business Units choose to work with us.
predominantly serve the manufacturing

41
All employees and contractors working in Business Unit Consumer Goods Pharmacovigilance (PV)
our distribution centers receive training on Our focus is on the proper handling and Regulations on drug safety are continuous-
the proper handling of goods and the op- storing of goods in line with good ware- ly evolving and differ from market to market
eration of related equipment (if applicable) housing and distribution practices. Storage and across regions. This poses a challenge
before they are allowed to start working. and handling of products is executed as per for all our healthcare clients. We have cus-
Ensuring the safety of the final product is agreed specifications with our clients to en- tomer-facing compliance and regulatory
also a key focus in the pre-qualification of sure the integrity and safety of our products services teams providing specialist support
new suppliers to DKSH; corrective action throughout their life cycle. This can include to get our clients’ products to market and
plans, additional auditing or contract termi- adaptation of products to local regulatory to diligently manage drug safety expecta-
nation may be required in the case of sig- requirements. tions.
nificant non-compliance with quality and
safety requirements. Beyond these controls, DKSH complies with applicable regulations Counterfeit products
our management approach varies signifi- set by the food and drug administrations in Counterfeit products are a significant con-
cantly by Business Unit due to the distinctly the markets where we operate. Freshness is cern in the healthcare industry. We have
different products and legal requirements. key for food and beverage products. Some established internal best practices related to
products must be stored under tempera- the management of suspected counterfeit
The Quality Assurance, Regulatory Affairs ture-controlled conditions to preserve their products and our SAP systems are validated
and Supply Chain Management teams in quality. Our IT systems support good stor- for batch traceability across the entire sup-
each Business Unit regularly perform quali- age practices that enable methods such as ply chain.
ty audits and reviews to ensure ongoing FIFO (first in, first out) or FEFO (first expired,
compliance with applicable standards. first out) to minimize product waste. Product recalls
Business Unit Performance Materials imple- If safety concerns trigger a product recall,
mented a standard Internal Process Review Business Unit Healthcare our SAP systems allow for the full traceabil-
(IPR) to assess health and safety risks and Quality requirements and expectations are ity of products and enable a fast and effi-
define mitigations. compliant with international guidelines (e.g. cient recall. We have established internal
those from the World Health Organization, best practice procedures in the event of a
Additionally, our operations are frequently the International Council for Harmonization recall, which include setting up a product
audited by our clients or their appointed of Technical Requirements for Pharma- recall committee to steer escalation and
auditors. Due to the sensitivity of the prod- ceuticals for Human Use and the Pharma- tracking and monitoring of the entire pro-
ucts, most of these audits occur in the ceutical Inspection Co-operation Scheme). cess in collaboration with our clients.
Business Unit Healthcare. In 2018, 143 such We maintain rigorous and up-to-date qual-
audits took place, which means that on av- ity standards when handling, storing and Business Unit Performance Materials
erage the Business Unit is subject to more distributing healthcare products. All our This Business Unit has a dedicated and in-
than one audit per month per market of distribution facilities relating to pharmaceu- dependent Regulatory Affairs (RA) team
operation (2017: 111 audits). tical products and medical devices are with specialists for Safety, Health and
approved by the respective local health Environment (SHE), Quality Assurance (QA)
authorities with the appropriate internation- and Registrations (REG) on local, regional
There were no incidents of non-compli- ally recognized Quality Management System and global levels. Critical safety, health and
ance concerning health and safety impacts certification (e.g. ISO 9001 and ISO 13485). environment processes and controls are har-
of products and services in 2018. monized and documented to fully comply
GRI 416-2 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 a To ensure safe handling and usage of the Business Unit Technology
stringent and standardized qualification and products, we guarantee fully compliant The Business Unit Technology distributes
certification program for supplier and ser- product documentation and classification various types of machinery or equipment,
vice providers based on relevant and appli- in all cases. For chemicals, Safety Data sourced from reputable manufacturers.
cable standards such as GxP (for pharma- Sheets (SDS) and CLP are provided with Depending on the type of product, units are
ceuticals), IFS, BRC and ISO 22000 (for all relevant products. For food and pharma- tested before delivery and our service offer-
food), ISO 9000, CLP (for chemicals), inter- ceuticals, health certificates and quality ing also includes installation, commissioning
nal Standard Operating Procedures (SOPs) documents are provided, if applicable. and training to ensure proper and safe op-
and the DKSH HSE Policy. The evaluation, Documentation and classification are sub- eration. Our service engineers are trained
qualification and certification of service pro- ject to safety audits. Full product and batch by the manufacturers.
viders (logistics, warehouses, labs) and sup- traceability is guaranteed along the entire
pliers involves safety document assess- supply chain.
ments, safety audits and corrective action
plans along the entire supply chain. Our A global deviation reporting and manage-
food production activity in the Philippines ment process ensures any health and safety
is FSSC 22000 (Food Safety System related issues are documented, followed by
Certification) certified. corrective actions and reviews.

43
Marketing and labeling

Our company’s main activity is to market Product adaptation and customization to For the marketing of our own-brand prod-
and distribute products sourced from man- meet regulatory requirements, including ucts, our regulatory affairs teams ensure
ufacturers. Many of our products are im- product labeling, is an important DKSH ser- compliance with applicable laws. For all the
ported and require local customization be- vice offering. Our regulatory affairs teams products distributed by the Business Units
fore being fit for sale. Additionally, a core in the various Business Units are responsible Consumer Goods and Healthcare, we ob-
activity in our service delivery to clients and for establishing relevant Standard Operating serve guidelines on responsible marketing
customers is the advertising and promotion Procedures and for monitoring compliance, published by the relevant industry bodies.
of our products in the markets we serve. with assistance from our quality assurance Policies, procedures and controls are in
teams. In our Business Unit Healthcare, place and are supported by training activi-
The marketing of our products can involve where regulations are particularly stringent, ties to ensure that the marketing of our
various risks if not managed properly and we perform customization work in accor- products meets our standards and expecta-
supported with the relevant and necessary dance with Good Manufacturing Practices tions.
product information. Rising public aware- (GMP). In Business Unit Performance
ness and new policy initiatives on transpar- Materials, we implement and audit against
ency have increased demand for correct and GHS (Globally Harmonized System), with its
complete product information, making this strict requirements for classification, labeling
topic highly relevant for DKSH’s business and packaging.
model and brand reputation.

44
DKSH carefully monitors and validates rele- Industry-specific risks in the healthcare
vant product data from clients on an ongo- business
ing basis and takes corrective actions where Advertising and promotion of healthcare
appropriate. Any complaints about market- products in many jurisdictions are highly
ing and labeling are addressed by the rele- regulated, often limited or even disallowed.
vant Business Unit. Given the magnitude of Many products are prescribed or dispensed
our business operation, incidents may occur by healthcare professionals, or they require
despite our significant efforts outlined professional expertise for their application.
above. In 2018, a total of nine incidents Various segments in the healthcare industry
were noted, some of which resulted in small (specifically for prescription drugs and med-
fines or warnings.  ical devices) and in the food sector (e.g.
infant nutrition) have adopted codes of eth-
ics advocating responsible marketing of
DKSH recorded nine incidents regarding
their products. DKSH adheres to these stan-
marketing and labeling practices in 2018.
dards through membership in the respective
GRI 417-3
industry associations and by operating man-
agement programs to ensure compliance by
employees and service providers.

45
Information security

The operation of our business results in a comply with applicable data protection laws We train our staff on various topics relating
significant accumulation of data relating to as well as DKSH’s principles of protecting to information security. In 2018, DKSH held
our products and services as well as to our confidentiality. Our information security an internal “IT security roadshow” with
cus tom er s and busine s s par tner s . program and cyber security strategy is en- more than 600 participating employees
Unavoidably in our business, we also serve dorsed and supported by the Executive from 19 markets, including all markets with
clients who are competitors in the market- Committee and the Board of Directors. The significant operations. In addition, all em-
place. Ensuring confidentiality is therefore overall program functions directly under the ployees who use IT in their work were re-
crucial. At times, personal data needs to be Group's Chief Information Officer. Our strat- quired to pass an online IT security aware-
collected relating to employees, contractors egy focuses on cyber threat preventive ness training. DKSH’s main IT hub is in
and others. In today’s digital and intercon- countermeasures, stepping up organization Malaysia, however, each market has its own
nected world, risks of data theft or leakage information security maturity and group local IT team responsible for regular addi-
have risen, and information security has wide cyber security awareness programs. tional IT security trainings.
become a key topic for any business.
In line with our strategy, we have an IT
In line with our Code of Conduct, we are Security Policy in place and a dedicated
fully committed to processing and protect- global Information Security team, which is
ing personal data with due care, and to available via a 24/7 hotline for urgent
security matters.

46
Quarterly Group-wide IT newsletters as well To further demonstrate our commitment to Group Internal Audit conducts independent
as ad-hoc IT news flashes ensure that protecting our clients’ and customers’ data, audits on access management. Furthermore,
awareness of sensitive topics is raised across we harmonized our operations with the EU the Group IT Security team performs audits
all markets. In 2017, we embarked on the General Data Protection Regulation (GDPR). on all market IT installations on a regular
implementation of ISO 27001:2013 standard To align our operations with the GDPR, in basis. Our business continuity and contin-
on information security management and May 2018 we implemented a new Group gency plans as well as incident response
achieved certification of the Corporate Data Privacy Policy, a new Website Policy procedures are tested twice yearly.
Shared Services Center SAP Infrastructure and a Global Privacy Governance Structure.
in 2018. Our quality assurance team ensures Under this new structure, our Global Privacy
In 2018, DKSH received no complaints re-
that the required standards are maintained Lead oversees the work of the Privacy
garding data breaches of customer privacy
on an ongoing basis. Coordinators in each of the main Global
and loss of customer data from outside
Functions and Business Units. There are also
parties or regulatory bodies. Similarly,
Privacy Coordinators in the key operating
DKSH is not aware of any identified leaks,
markets. Thus, every Business Unit and
thefts, or losses of customer data.
Function has a go-to person for data
GRI 418-1
security.

47
Appendix
Stakeholder engagement Groups were selected based on their abili- DKSH engages with the identified stake-
Identification of relevant stakeholder ty to influence or impact (directly or indi- holder groups as follows:
groups resulted from an assessment rectly) DKSH’s approach to business, or the
carried out by senior management. potential for DKSH to have an impact on
them.

Stakeholder Group Engagement and key topics

Clients As a partner in the downstream supply chain, our engagement with clients is the most
intense of all stakeholder groups. Discussions on expectations are part of due diligence,
business negotiations and sustainability audits. Other examples of engagement are an-
nual client satisfaction surveys and regular business reviews. Topics focus on employ-
ment practices, responsibility in the supply chain, product stewardship, health and safe-
ty, anti-corruption, information security and, lastly, our emissions.
Suppliers, Vendors Our engagement with suppliers and vendors is mainly via business negotiations and
business reviews during the financial year. Vendor concerns are primarily ethical busi-
ness practices, including fair competition and anti-corruption. DKSH’s expectations are
enshrined in our Supplier Code of Conduct.
Employees As a service provider, employees are our most important asset. Therefore, employee en-
gagement and satisfaction are of highest importance. We conduct periodic structured
employee engagement surveys and promote an open feedback culture. Employee con-
cerns 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 engagement
with local communities.
Customers Our direct interaction with customers through our operations focuses mostly on their
expectations or areas of concern. Engagement with customers in the manufacturing in-
dustries in our BU Performance Materials is most intense and key topics include pro-
curement 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 oper-
ate 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 and
other regulated activities, to ensure legal requirements are met.

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

49
Further details about our employees This contrasts with the data reported in our
All disclosures in this Statement relating to Annual Reports, but we believe it is more
employee numbers are based on head- appropriate for Sustainability reporting pur-
count, rather than full-time equivalents. poses. 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

Female 16,058 96.0% 672 4.0% 16,730

Male 15,668 98.7% 203 1.3% 15,871

Total 31,726 875 32,601

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

Region Permanent % 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 and 5,013 100.0% 1 0.0% 5,014


Singapore

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 31,726 875 32,601

*China, Hong Kong, Macau and Taiwan

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

Gender Full-time % of total Part-time % of total Total

Female 16,340 97.7% 390 2.3% 16,730

Male 15,801 99.6% 70 0.4% 15,871

Total 31,141 460 32,601

50
Membership of associations DKSH does not provide funding to associa- The below list provides an overview of
DKSH companies are members of several tions beyond routine membership dues, membership of associations by market.
associations in the markets we operate in, apart from our membership of the Swiss GRI 102-13
with a strong focus on industry associations Chamber of Commerce and Industry in
for the chemical, pharmaceutical and food Japan, for historic reasons (this is where
industries, as well as membership of cham- DKSH was originally founded in the 19th
bers of commerce. Membership is general- century; we are the Swiss company with the
ly considered from a strategic perspective, longest uninterrupted presence in Japan).
and in some instances, DKSH managers
hold positions in governance bodies, partic-
ipate in projects or committees.

Market Name of association or advocacy organization

Switzerland scienceindustries
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
Market Name 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 Japan
The 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
Market Name of association or advocacy organization

Thailand Pharmaceutical Reseach & Manufactures Association (PReMA)


Thai Medical Device Technology Industry Association (THAIMED)
The Federation of Thai Industries (FTI)
Foods & Beverages, Food Industry Club
The 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 Thai-
land (RCMCT), Chemical Industry Club
Hazardous Substances Logistics Association (HASLA)
Taiwan Taiwan 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 Group
Eurocham FAASC
AmCham

53
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 of
action for the future.

If you have any feedback or need further information on our sustainability approach, please contact sustainability@dksh.com.

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

GRI standards and diclosures References Omissions


GRI 101 Foundation (2016)
GRI 102 General Disclosures (2016),
Core option
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 other p. 50
workers
GRI 102-9 Supply chain CB 2019, p. 12-16
GRI 102-10 Significant changes to the organization AR 2018, p. 38-40
and its supply chain
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 our
clients, we run a product stewardship program cover-
ing activities such as storage, labeling, packaging and
arranging transportation, and our tracking systems
ensure that any issues can be quickly traced back to
the source. Regular auditing is in place to ensure
product safety and that operations are being run in
accordance with our environmental policies.

55
GRI standards and disclosures References Omissions
GRI 102-12 External initiatives DKSH currently does not openly subscribe to or en-
dorse any external initiatives, but through our clients'
expectations, we are indirectly exposed to such initia-
tives and strive to meet their requirements. An exam-
ple for this is the Pharmaceutical Supply Chain Initia-
tive (PSCI), which is endorsed by many of our multina-
tional clients in our healthcare business and passed
down to us as a partner in their supply chain. Going
forward, we will be evaluating the most suitable ini-
tiatives to endorse, given the vast diversity of our en-
terprise.
GRI 102-13 Membership of associations p. 51-53
GRI 102-14 Statement from senior decision-maker p. 2
GRI 102-16 Values, principles, standards and norms of p. 10
behavior 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 raised p. 12, 49


GRI 102-45 Entities included in the consolidated fi- p. 101-102
nancial accounts
GRI 102-46 Defining report content and topic bound- p. 12
aries
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 up-
dates 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, refriger-
ants and transportation data for Myanmar, New Zea-
land and Cambodia, which were not in the scope of
the 2017 reporting.

56
GRI standards and disclosures References Omissions
GRI 102-49 Changes in reporting There have been no major changes in the material is-
sues we report on between 2017 and 2018. In 2018
we have expanded environmental data reporting to
include 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 year
2017
GRI 102-52 Reporting cycle We intend to update the report on a yearly basis.
GRI 102-53 Contact point for questions regarding the sustainability@dksh.com
report
GRI 102-54 Claims of reporting in accordance wit the This report has been prepared in accordance with
GRI Standards 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.
Economic
GRI 201 Economic performance (2016)
GRI 103 Management approach (2016) p. 30
GRI 201-1 Direct economic value generated and dis- p. 31
tributed
GRI 202 Market presence (2016)
GRI 103 Management approach (2016) p. 32
GRI 202-2 Proportion of senior management hired p. 32
from the
local community
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 about p. 35-37
anti-corruption policies and procedures
Environment
GRI 103 Management approach (2016) p. 17-19

GRI 302 Emissions (2016)


GRI 302-1 Energy consumption within the organiza- p. 20
tion

57
GRI standards and disclosures References Omissions
GRI 305 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 p. 17
and regulations
Social
GRI 401 Recruitment and retention (2016)
GRI 103 Management approach (2016) p. 22-23
GRI 401-2 Benefits provided to full-time employees p. 22
that are not provided to temporary or
part-time employees
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, occupa- p. 40
tional diseases, lost days, absenteeism and
number of work-related fatalities
GRI 404 Training and education (2016)
GRI 103 Management approach (2016) p. 22-23
GRI 404-1 Average hours of training per year per p. 23 Information is currently unavailable
employee per employee category, but we will
be working towards refining this in
future reporting.
GRI 404-3 Percentage of employees receiving regular p. 23 Information is currently unavailable
performance and career development re- according to employee categories.
views
GRI 406 Non-discrimination (2016)
GRI 103 Management approach (2016) p. 24-26
GRI 406-1 Incidents of discrimination and corrective p. 25
actions taken
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 the p. 25
right to freedom of association and collec-
tive bargaining may be at risk
GRI 408 Child labor (2016)
GRI 103 Management approach (2016) p. 24-26
GRI 408-1 Operations and suppliers at significant risk p. 25 Information is currently unavailable.
for incidents of child labor We will report more fully on this dis-
closure in future reports.

58
GRI standards and disclosures References Omissions
GRI 409 Forced or compulsory labor (2016)
GRI 103 Management approach (2016) p. 24-26
GRI 409-1 Operations and suppliers at significant risk p. 25-26 Information is currently unavailable.
for incidents of forced or compulsory We will report more fully on this dis-
labor closure in future reports.
GRI 412 Human rights assessment (2016)
GRI 103 Management approach (2016) p. 24-26
GRI 412-2 Employee training on human rights p. 24-26 Information is currently unavailable.
policies and procedures We will repeat the training across our
operations during 2019.
GRI 413 Local communities (2016)
GRI 103 Management approach (2016) p. 27-28
GRI 413-1 Operations with local community engage- p. 28
ment, impact
assessment and development programs
GRI 416 Customer health and safety (2016)
GRI 103 Management approach (2016) p. 41-43
GRI 416-2 Incidents of non-compliance concerning p. 42
the health and safety impacts of products
and services
GRI 417 Marketing and labeling (2016)
GRI 103 Management approach (2016) p. 44-45
GRI 417-3 Incidents of non-compliance concerning p. 45
marketing
communications
GRI 418 Customer privacy (2016)
GRI 103 Management approach (2016) p. 46-47
GRI 418-1 Substantiated complaints concerning p. 47
breaches of customer
privacy and losses of customer data

59
Sustainability at DKSH 2018

Publisher
DKSH Holding Ltd.
P.O. Box 888
Wiesenstrasse 8
8034 Zurich
Switzerland
Phone +41 44 386 7272
Fax +41 44 274 2034

Group Investor & Media Relations


Group Governance, Risk & Compliance
sustainability@dksh.com

Edition: July 2019