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57 About Strategy and Governance Our People Our Business Our Outcome AppendixManaging Risks in Our Supply ChainAs part of our overall risk management processes, we regularly identify, assess, mitigate, and monitor risks in our supply chain, as specifically mandated by our Responsible Procurement Policy. These risk management processes have been developed with the direct involvement of the Group%u2019s Risk Management Function and are thus closely aligned with DKSH%u2019s broader risk management framework and procedures.In 2023, we identified the following risks considered relevant in the context of our current business relationships: Social and human rights risks: %u2023 Procuring of goods from manufacturers that do not respect social standards (for trading goods or materials for manufacturing)%u2023 Collaboration with business partners from the logistics industry and intermediaries in the distributive trade with poor working conditions and the risk of human rights violations%u2023 Health and safety risks in outsourced logistics %u2023 Violation of human rights standards with hiring and housing foreign/migrant workers (through external parties)%u2023 Extensive use of intermediaries with an inherent corruption riskEnvironmental risks: %u2023 Procuring of goods from manufacturers that do not respect environmental standards (for trading goods or materials for manufacturing)%u2023 Emissions generation/air quality deterioration and environmental risks from hazardous chemicals spilling in outsourced transport logisticsOur Responsible Procurement Policy is complemented by operating procedures that guide the organization on policy execution based on assigned roles, responsibilities, and accountabilities. It mandates the identification of relevant supplier categories with exposures to pertinent supply chain risks based on the nature of the business conducted with DKSH. It sets out risk management processes, including risk-based due diligence procedures, to ensure that suppliers adhere to our standards by assessing new suppliers and monitoring active suppliers for risks or concerns pertaining to ethical business conduct, environmental practices, labor conditions, and human rights. Human rights risks include not only child, forced, and compulsory labor (as explained in further detail below), but also the risk of violations of the right to freedom of association and collective bargaining. While we assign risk levels to our suppliers in keeping with general country- and industry-specific indexes and indicators (including UNICEF%u2019s Children%u2019s Rights in the Workplace Index), risk screening brings to light past or current concerns and issues, including exposure to child labor or forced labor, for further due diligence actions. We prioritize highrisk suppliers for extended due diligence procedures. In addition, we counteract some of the specific risks mentioned above by performing audits, inspecting migrant worker housing, examining employment procedures, and undertaking quality and safety audits for contracted manufacturing.%u2023 GRI 409-1Child LaborUnder Swiss law, DKSH is required to assess whether there are reasonable grounds to suspect child labor in its supply chain. If there are reasonable grounds to suspect child labor, it must comply with certain supply chain due diligence obligations and report on its compliance. There is no reporting obligation for products or services for which its suppliers have already published a report. While the prohibition of child labor has been DKSH%u2019s policy for many years, we strengthened our commitment in 2022 by adoption of a Responsible Procurement Policy and an associated Supplier Business Conduct Policy, including, inter alia, requirements under ILO Conventions 138 and 182. These two policies constitute our supply chain policy on child labor. They contain our commitment to comply with applicable laws. Our supply chain policy on child labor stipulates that we immediately escalate indications of child labor reported by business partners or resulting from regular risk screenings to Group Compliance (GRC) for further evaluation and action and that we diligently assess all indications of child labor and explore the potential need to devise appropriate action plans to resolve or mitigate the issues upon detecting any actual or potential issues. It further describes our complaint mechanism, our Integrity Line. Finally, our supply chain policy on child labor specifies the instruments we use to identify, assess, eliminate, or mitigate the risks of child labor. For our own operations, our Human Resources function acts as gatekeeper to ensure that all our employment relationships operate within the legal boundaries set by applicable labor laws and our universal standards of respect for human rights, including the prohibition of child labor. This assurance also extends to service providers and contractors operating on our sites.In our role as a market expansion services provider, we recognize that we may be linked to child labor issues through the distribution of our clients%u2019 products. To minimize this risk, we regularly assess the risks associated with clients and suppliers in our trading and manufacturing activities as part of our specific supplier risk management system, based on the origin of the products (country risk) and the type of products or services sourced (industry risk). We consult publicly available resources, including UNICEF%u2019s Chil-