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44 About Strategy and Governance Our People Our Business Our Outcome AppendixWhen calculating our Scope 2 emissions, we collect electricity consumption data from utility invoices for almost all of our markets. We do not report data for our small UK and Netherlands offices, since electricity consumption is charged there through a building services fee. For location-based emission factors, we have applied the most recent figures available from the International Energy Agency (IEA) since 2021. The data shows the carbon intensity of the national electricity mix in all necessary markets.We apply the following hierarchy for market-based emission factors:%u2023 1) Emission factors from the specific energy provider%u2023 2) If 1) is not available: emission factors published on government websites%u2023 3) If 1) and 2) are not available: same as location-based factors When purchasing I-RECs, we match their sourcing to the market of consumption and the production year to the consumption year, wherever possible. Our provider recommends the most appropriate substitute in cases where this is not possible. Furthermore, we focus on I-RECs associated with solar, wind, geothermal, or biomass sources, thereby excluding hydropower from tropical regions.We further strengthen quality and credibility by using our provider%u2019s quality seal to demonstrate third-party verification of our compliance with the Greenhouse Gas Protocol Scope 2 Guidance on purchasing, handling, and canceling RECs (e.g. 100% renewable origin, annual matching of production and consumption, adherence to established market boundaries, no double claiming of RECs). The use of the quality seal is reviewed and certified on an annual basis by the German independent certification body T%u00dcV Rheinland.Biogenic emissions only relate to the biofuel content of transport fuels and are considered negligible.We consider emissions from air travel and our external fleet when calculating our Scope 3 emissions. Our air travel emissions are based on expenses for flights. Since 2023, the spend-based emissions factor %u2018Scheduled Passenger Air Transportation%u2019 from the EPA (2021) (including consideration of the Radiative Forcing Index) has been applied to convert expenses into CO2e. Our external fleet uses fuels including compressed natural gas (CNG), diesel, and gasoline for delivery vehicles from our transport suppliers. When gathering information on outsourced logistics services, our major suppliers have specified their diesel and gasoline consumption data in liters based on billing data. For consistency purposes, all fuel properties and emission factors were sourced from the Greenhouse Gas Protocol (2017).%u2023 GRI 302-1, GRI 305-1, GRI 305-2, GRI 305-3, GRI 305-4We also prepare a carbon disclosure in line with the CDP climate change disclosure system. CDP is an international non-profit organization that aims to establish business standards for environmental reporting and risk management. DKSH has published CDP disclosures since 2016, bearing in mind the organization%u2019s importance to both business partners and investors. For information on our latest carbon disclosure, please visit the CDP website.Pollution PreventionManagement Approach Our Health, Safety and Environment (HSE) Policy encompasses all environmental and climate issues and underlines our commitment to conducting business in an environmentally responsible manner. In keeping with this policy, local HSE Managers are responsible for maintaining a register of national environmental laws and regulations and for ensuring compliance across all our operations.Our enhanced HSE Management System operates as an extension of DKSH%u2019s HSE Policy, representing an umbrella framework under which other HSE-related guidelines and standard operating procedures interact and help govern individual HSE risks, such as dangerous goods and hazardous substances, contractor safety management, and waste management. It applies to all DKSH entities, and references ISO 14001. Local HSE Steering Committees are responsible for ensuring its effective deployment within their respective markets, while local HSE Managers support the practical implementation of management systems and processes. In DKSH, we continuously strive to strengthen our environment management system. In 2022, we received the ISO 14001 certification for Business Unit Performance Materials%u2019 distribution center in Indonesia.In 2022, we also worked with an external consulting firm to perform an environmental risk and impact assessment (ERIA) as part of our due diligence procedure. Its primary objective was to identify and assess risks arising from the operation of our facilities and, when necessary, to implement suitable mitigation measures to reduce risks to acceptable levels. The ERIA focused on selected sites in six of our markets, namely Australia, China, Indonesia, Malaysia, the Philippines, and Thailand. The sample size was relatively small, especially compared to the number of distribution centers in operation. However, we considered the sites selected to be representative and adequate to gain a comprehensive risk profile of our operating sites across our four Business Units engaged in various business activities in manufacturing, distribution, or other. The overwhelming majority of our sites, however, are distribution centers and warehouses.