2. SUNDRUG Group Human Rights Policy

(1) Basic Approach
The SUNDRUG Group understands that all business activities have the potential to impact human rights, either directly or indirectly. We believe that one of our key responsibilities as a business operator is to uphold international norms of human rights such as the UN Guiding Principles on Business and Human Rights, cultivate deeper understanding of human rights problems, and conduct ourselves appropriately.

(2) Scope of Application
The SUNDRUG Group applies this Policy to all executive officers and employees of the SUNDRUG Group, including part-time, contract, and temporary hire employees. Moreover, the Group requires its suppliers to understand and comply with this Policy, and expects business partners to support it.

(3) Human Rights Due Diligence
The SUNDRUG Group builds human rights due diligence systems, identifies negative impacts on human rights related to the Group’s business, and pursues initiatives for the prevention and alleviation of these impacts.

(4) Relief
In the event that the SUNDRUG Group’s activities are found to have caused or exacerbated any negative impact on human rights, we endeavor to institute appropriate and effective relief measures. Moreover, in the event that the Group is connected with any negative impact on human rights as a result of its business relationships, we take steps toward correction or mitigation.

(5) Education and Training
The SUNDRUG Group conducts appropriate education and training programs for all its executive officers and employees, including part-time, contract, and temporary hire employees, to ensure that this Policy is incorporated and implemented effectively in all business activities.

(6) Dialogue and Consultation
In the course of implementing this Policy, we make use of the expert knowledge of independent external organizations, and engage in sincere dialogue and consultation with stakeholders.

(7) Information Disclosure
The SUNDRUG Group discloses the status of progress on its own initiatives toward respect for human rights via its website and other channels appropriately.

(8) Important Themes
Prevention of discrimination and harassment, friendly working environment, achievement of work-life balance, respect for and assurance of privacy

3. Initiatives toward Respect for Human Rights

The SUNDRUG Group appreciates that respecting human rights is an extremely important social responsibility in business activities. We are working to ensure that all customers, business partners, employees, and all others involved in our business activities conduct themselves responsibly to avoid causing any negative impact on human rights or being indirectly associated with such impact. To do so, we pursue awareness-raising and educational activities under a Human Rights Policy, Group Company Code of Conduct, and Code of Conduct for Business Partners.

(1) Human Rights Management System
Human rights are inherent rights to live one’s life as a human should, and their scope and content is broad-ranging. There are various types of human rights problems that can occur in business activities, ranging from sexual harassment, abuse of power, and other forms of harassment in the workplace, to discrimination and bias against people with disabilities, and labor accidents resulting from long working hours, just to name a few. In addition, As the SUNDRUG Group handles pharmaceutical products, we potentially face specific human rights problems stemming from the risk of mistakenly selling products that have an impact on the health and lives of our customers. We see human rights management as integral to corporate risk management, and believe it is crucial to develop systems for respecting human rights.

In the SUNDRUG Group, issues involving human rights such as feedback and complaints arising from inadequate consideration for customers, in-house harassment, and labor accidents are addressed by sharing information at monthly meetings of the Compliance and Risk Management Committee and Safety and Health Committe with the involvement of all departments, and instituting necessary countermeasures through the responsible departments. In the event of a serious incident, we notify related departments and individuals via the company intranet, and report to the Board of Directors. The development of systems for respecting human rights is also part of the agenda of the ESG Promotion Committee, which conducts analysis and evaluation of human rights due diligence systems such as human rights related awareness-raising and education programs, monitoring of human rights risks, and human rights relief measures. The ESG Promotion Committee ascertains that related departments are addressing areas where inadequacies and vulnerabilities are identified.

(2) Education on Respect for Human Rights
The SUNDRUG Group is working continually to ensure respect for diversity, elimination of all kinds of discrimination on the basis of race, nationality, sex, age, disability, and other attributes, prevention of harassment (including abuse of power, sexual harassment, harassment on the basis of maternity or caregiver duties, and other forms of victimization), promotion of gender equality, and enhancement of working environments and systems. We are taking pre-emptive steps to avert the occurrence of problems, through awareness-raising activities for employees including dissemination of the Compliance Guidebook and Harassment Prevention Guidelines, display of harassment prevention posters, internal email alerts, human rights training for different seniority levels, and e-learning programs.

Moreover, for staff in charge of employee recruitment and appointment in the HR Department and store managers responsible for recruiting part-time workers, we have introduced an employment manual to ensure that appointments are made fairly and without reference to attributes such as race, sex, age, and gender identity. In marketing and promotional activities, we take care not to cause misunderstandings or misperceptions through the use of expressions that may exacerbate discrimination or human rights infringements, or those that may defame or denigrate other people.

(3) Respecting Customers’ Human Rights
As the Group is involved in the sale of pharmaceutical and cosmetic products, there is a risk of mistakenly selling products that have an impact on the health and lives of our customers. We recognize this as one of the Group’s major risks in the areas of sustainability and human rights. Our number one focus in order to mitigate this risk is human resource development: training employees involved in dispensing prescription pharmaceuticals and selling over-the-counter (OTC) pharmaceuticals and cosmetics to become professionals within their respective fields of work. They need to use their pharmaceutical and product knowledge, communication skills, and other attributes to the full when consulting with patients and customers and determining the appropriate use of pharmaceutical and cosmetic products. We have designed education and training curricula that are finely tuned to the career outlooks and proficiencies of each individual employee.

At the same time, on the basis that humans inevitably make mistakes now and then, we have adopted systematic, automated risk mitigation strategies in the form of a Barcode Dispensing Error Prevention System and Camera Monitoring Guidance System for dispensary staff, and a Quantity Limit System⁽¹⁾ in the sale of OTC pharmaceuticals and cosmetics. Employee education is an investment that protects the health and lives of customers and reduces human rights risks, at the same time as lessening sustainability risks and raising the Group’s capacity for continued growth. We will work to make further enhancements to the educational curricula into the future.

(1) Quantity Limit System: A system that triggers an alert at the checkout if the volume of OTC pharmaceuticals purchased exceeds a specified level

In our Drugstore Business, we handle sensitive information such as customers’ medication history and pharmaceutical purchase history. We situate proper administration and protection of personal information as a key issue in management and business, and an obligation to be discharged by executive officers and all employees as part of our social responsibility. With a view to safeguarding customers’ privacy and the security of personal information, the Group has established a Basic Policy on the Protection of Personal Information, along with measures such as access restrictions and access logs to ensure that personal information stored in our systems can only be obtained by those who require it in order to perform their work duties. Through measures such as these, we aim to manage our organization so that every employee upholds the Act on the Protection of Personal Information and other related statutory provisions and internal rules, and performs their work appropriately while protecting personal information.

(4) Respecting Employees’ Human Rights
We are pursuing human rights awareness-raising activities and developing internal regulations and guidelines in areas such as respect for diversity, prohibition of all forms of discrimination on the basis of attributes such as race, nationality, sex, age, and disability, and prevention of harassments. In addition, we have established dedicated in-house contact points in accordance with the Whistleblower Protection Act, and are working to ensure proper receipt of reports relating not only to sexual harassment but also all other forms of workplace harassment, early detection of problems, and their swift resolution. We also engage in ongoing and periodical consultations with labor unions, in order to tackle a broad range of issues through collaboration between labor and management.

As we are in distribution business, where operating hours are long, we have a responsibility to manage employees’ work hours properly and appropriately. We use mechanisms such as attendance systems, PC logs, security records of store entry and exit, and POS transaction records to monitor working hours and avoid having employees working long hours, thereby protecting workplace safety and health. We have also been able to reduce monthly average overtime hours using the Monthly Flexible Working Hours System, which was introduced with the aim of helping employees achieve a better balance between work and home life.

(5) Respecting Human Rights in the Supply Chain
The Group does not manufacture any of the products it sells in-house: even those products that are sold as SUNDRUG original brands are manufactured for us by business partners. For this reason, we consider it important to work together with our business partners to prevent human rights infringements in the supply chain. We discharge our social responsibility by strengthening structures for collaboration with business partners and a range of other stakeholders and putting respect for human rights into practice, guided by the Human Rights Policy and the Group Code of Conduct.