How we implement the LKSG

We have defined clear responsibilities for carrying out and complying with our human rights due diligence obligations. Overarching responsibility for human rights in our sphere of influence lies with our Executive Board. The Executive Board requires binding compliance from our Managing Directors. Our Human Rights Officer oversees our human rights risk management. She directly reports to the Executive Board.

We consider respect for human rights an interdisciplinary issue and so we collaborate systematically with various functions. The persons for these issues in the respective Group Functions, business sectors and local units implement the specific measures.

In line with our Human Rights Due Diligence Group Standard, we carry out a risk-based, systematic review on human rights and specific environmental risks at our Group companies and in our supply chains. We have a wide range of measures in place to prevent and, where possible, end or at least minimize adverse effects on human rights around the world in connection with our business activities. We continue to develop our processes on an ongoing basis.

To identify human rights and certain environmental risks, we carry out risk analyses for our own business and for our direct suppliers once a year and on an ad hoc basis e.g., in cases of mergers and acquisitions. Risks relating to indirect suppliers are generally assessed on an ad hoc basis. The results of the risk analysis and their impact are taken into account in our company decision-making processes, e.g. in terms of supplier selection. We use the results of the risk analysis to establish and adapt internal regulations, processes and trainings to keep up with changing requirements for our due diligence processes. The results of the risk analysis are communicated internally to the Executive Board and to the Sustainability Board of Merck KGaA, Darmstadt, Germany. The risk analysis is the basis for appropriate preventive or remedial action within our own operations as well as at our direct suppliers.

When risks have been identified, we take appropriate and effective preventive measures. Merck KGaA, Darmstadt, Germany has instigated various preventive measures in its own business operations and with regard to suppliers to avoid human rights and environmental risks. We review these for effectiveness and appropriateness on an ongoing basis and adjust them where required. This involves adjusting and improving existing measures and developing new approaches.

In the event that we identify any violation of a human rights or environmental obligation at Merck KGaA, Darmstadt, Germany or in our supply chain, we will immediately initiate appropriate measures to resolve these violations. In our own business operations, we immediately implement measures to resolve violations. For violations in the supply chain, we work closely with our suppliers and use our influence to help resolve the violation. A particularly severe violation at a supplier may result in the business relationship being temporarily suspended or immediately terminated.

We have a group-wide complaints system for reporting human rights and certain environmental risks and violations. Our employees and external stakeholders can anonymously report suspicions free of charge in their own language using this group-wide complaints system. If the investigation confirms human rights or certain environmental risks or violations at Merck KGaA, Darmstadt, Germany or at its suppliers, appropriate follow-up actions are initiated. At the same time, we take reports and complaints as an opportunity to scrutinize and improve our internal processes and structures. To the extent possible and within our control, we ensure that whistleblowers are protected from discrimination or penalties as a result of their justified complaints. Further details on our complaints procedure and other channels can be found in our Rules of Procedure.

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We report on the progress we have made in implementing our human rights and environmental risk management system and meeting our due diligence obligations in our annual sustainability report. Furthermore, we will publish an annual report on compliance with our due diligence obligations on our website.