ESRS S2 Workers in the value chain [S2] Workers in the value chain

Our impacts, risks, and opportunities [S2 SBM-3] Material impacts, risks, and opportunities and their interaction with strategy and business model

As a healthcare Group, we make a significant contribution to providing people with access to healthcare and producing the necessary medical technology and pharmaceuticals. In doing so, we rely on thousands of suppliers and business partners worldwide in our value chain. Respect for human rights is part of our corporate responsibility within the scope of our influence. We also state this in our human rights declaration.

The requirements we place on cooperation with our business partners aim to have a positive impact on working conditions along our value chain. These are defined, for example, in our Codes of Conduct for Business Partners and specific contractual agreements. As part of the risk-based human rights training to be introduced for our business partners from 2025, we not only want to raise awareness of respect for human rights, but also further strengthen common standards for ethical conduct along the entire value chain.

Our Group-wide ambition is to regularly analyze potential human rights impacts associated with our value creation, minimize risks, prevent violations, and, if necessary, take effective preventive and remedial actions. In doing so, we place a particular focus on those sections of the value chain that are located in countries and sectors with a potentially high human rights risk and the associated potentially negative impact on workers. This concerns, for example, discrimination against individuals or groups and a lack of occupational safety measures for workers in the upstream value chain. This includes employees who work at our sites but do not belong directly to our Group, as well as employees from direct suppliers and lower down in our upstream value chain. A particular challenge here can be that negative impacts arise deep in the value chain without direct or visible links to our business activities. We therefore strive to constantly increase the transparency of our value chains and identify the types of workers that may be significantly affected by our business activities. In doing so, we plan to focus on those workers who are vulnerable to negative impacts due to their inherent characteristics or special circumstances.

In addition to appropriate working conditions, we focus on compliance with the labor-related rights of workers in our value chain, taking into account our ability to exert influence. There may be negative effects in the value chain, e.g. through violations of working time laws or the withholding of an appropriate wage. Discrimination and unequal treatment of individuals or groups in our value chain can have a negative impact, as can disregard for freedom of association and the right to collective bargaining. Particularly in countries where these rights are not adequately protected, there is a risk that they will be disregarded in our direct or indirect value chain. If we become aware of incidents in the above-mentioned areas, we develop effective remedial measures and work towards their implementation. We strive to constantly increase transparency in our value chains in order to identify and counteract any actual negative effects.

Any violation of human rights, and in particular any serious violation, whether in our own business activities or along our value chain, contradicts our principles and values as a healthcare Group. In addition, such an incident can also be associated with potential reputational damage for our Group and may have an impact on ratings and access to markets or loans, as well as resulting in sanctions or penalties with a financial impact.

At the same time, there are also opportunities for Fresenius through the implementation of human rights due diligence and the transparent handling of potential risks. Our commitment to high human rights and social standards can have a positive impact not only on our business activities, but also on the assessment of our ESG performance in ratings and rankings.

Our approach [S2-1] Policies related to value chain workers

Respect for human rights

Medical care for patients and the well-being of our nearly 180,000 employees are among the most important engagement areas of our human rights due diligence. Our commitment to respecting human rights is set out in our Group-wide Human Rights Statement. In line with our human rights due diligence program (Human Rights Program), we also take human rights aspects into account when conducting risk-based assessments of our business partners. From our suppliers, we expect, among other requirements, respect for human rights in their value creation as well. It is our declared commitment to respecting human rights along the value chain and to complying with regulatory requirements, e.g. such as those of the German Supply Chain Due Diligence Act (LkSG).

The Group is constantly improving its risk analyses, e.g. through focus risk analyses along the value chains, and will include the findings in future sustainability reports. Further information on the disclosure requirements can be found in this topical standard in section S2-4 Our actions.

Fresenius published a revised version of the Human Rights Statement in the reporting year. The statement reflects the requirements of the LkSG. We update it on the basis of the human rights focus topics that we identify, e.g. as part of the environmental and human rights risk analyses. The Human Rights Statement is available online on our website www.fresenius.com.

Our commitment set out in this statement is guided by the United Nations Guiding Principles on Business and Human Rights (UNGP) as well as the following internationally recognized human rights standards and frameworks:

• United Nations (UN) Universal Declaration of Human Rights
• UN International Covenant on Economic, Social and Cultural Rights
• UN International Covenant on Civil and Political Rights
• International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work
• Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct

We are committed to act in accordance with these standards and frameworks and to comply with applicable national laws. In cases where international human rights are restricted by local laws, we strive to respect the principles behind the international standards without conflicting with local laws.

We do not tolerate any exploitative practices and take a firm stand against forced labor and child labor, as well as any other form of exploitation – including human trafficking. We do not tolerate any use of force, threat of force, or other forms of coercion. These and other principles are set out in our Human Rights Statement.

Where applicable, the responsible business segments and departments address topics such as the handling of conflict minerals, developing technologies, or ethical issues in research, development, and clinical studies and take these into account in their respective operational activities. We do not purchase conflict minerals directly. However, it cannot be completely ruled out that they have been processed in components and semifinished products that we purchase and further process or use in our products. In this case, the relevant Group and business segment Codes of Conduct for dealing with suppliers and other business partners apply.

Human Rights Program

We rely on highly complex value chains to help ensure that people worldwide have access to healthcare and the medical technology and pharmaceuticals they need. Therefore, our commitment to respecting human rights extends beyond our company and also includes our value chain. We have established the Fresenius Human Rights Program to fulfill our responsibility and meet our due diligence obligations.

Group-wide Human Rights Program

The identification and assessment of human rights risks as part of the Group-wide program follows a risk-based approach, which is subsequently described in detail.

Following the risk-based approach, Fresenius has focused its efforts since the initiation of the human rights program primarily on value creation stages in the upstream value chain that have a potentially high human rights risk according to relevant country and industry indices and over which the company has a greater ability to exert influence due to direct contractual relationships.

The aim is to extend the human rights program to sections further down the value chain and to downstream processes as part of the ongoing development of activities to respect human rights.

The Human Rights Program also serves to identify related impacts, risks, and opportunities, to initiate appropriate measures and thus to embed respect for human rights in our global value chain. Based on current knowledge of possible negative impacts and risks of child or forced labour in the value chain, these are not applicable to Fresenius for certain geographical areas or raw materials. The Group is continuously developing its risk analyses, e.g. through focus risk analyses along the value chains, and will include the results in future sustainability reports.

The Human Rights Program consists of five components, which we explain in our Human Rights Statement. A Group-wide Standard Operating Procedure (gSOP) defines the underlying processes. The gSOP describes the responsibilities for implementing the program and contains instructions for conducting risk analyses, for handling identified human rights risks, and for documenting measures and reporting.

Group-wide governance and responsibilities

Operational implementation is ensured through Group-wide governance and clear responsibilities within the business segments and at Group level.

Group-wide Human Rights Governance

The Management Board oversees our Group-wide Human Rights Program. The Group function Risk & Integrity reports directly to the Board member Sustainability. Within this Group function, the Group Human Rights Office is responsible for the Group-wide human rights due diligence approach, such as the Human Rights Risk Assessment methodology. It supports the business segments in implementing requirements that serve to fulfill their human rights due diligence obligations. In addition, the Group Human Rights Office monitors relevant legal and regulatory developments.

Each business segment has appointed a Human Rights function that is responsible for managing human rights due diligence in the respective business segment.

We have appointed risk owners for relevant departments. As subject matter experts, the risk owners are responsible for appropriate risk management and the implementation of risk analyses in their area of responsibility – for example in Human Resources, Procurement, or Occupational Health and Safety. They report the results to the respective Human Rights function of their business segment.

We have set up a Human Rights Council to promote the exchange of information on current human-rights-related initiatives and topics within the Group. It meets quarterly and is made up of representatives from various functions, such as Compliance, Sustainability, Communication, and Procurement, as well as the Human Rights functions and the Group Human Rights Office.

A report on the further development of the Human Rights Program, as well as identified risks and corresponding measures, is submitted to the Management Board and other bodies at least once a year and on an ad hoc basis. A report is also submitted to the Management of the business segments.

Certain aspects of the Human Rights Statement are also integrated into relevant departments and processes through the compliance management systems and the internal control system.

Risk analysis and impacts

Human rights risks can change over time. We therefore conduct annual and event-related risk analyses.

Identifying and assessing human rights risks in our own company and in our value chain is a comprehensive process that consists of risk identification, risk analysis, and risk assessment. We follow a risk-based approach that can be divided into three phases.

In the first phase, Fresenius conducts a country- and industry-specific abstract risk analysis to identify potential human rights risks.

To evaluate which of the identified potential risks could also be actual risks, we conduct a gap analysis in the second phase. For this purpose, we use standardized questionnaires, for example, to record processes, responsibilities, and procedures for each potential risk area. This applies to our own business as well as to the value chain. The risk owners and experts from the affected departments are closely involved in these gap analyses.

In the third and final step of the risk analysis, the gaps and risks identified are analyzed and evaluated, taking into account the impact on those affected and the likelihood of occurrence. We then define remedial and preventive measures for prioritized risks. As part of the regular risk analysis, the Fresenius Group has identified human rights issues and areas of action in all business segments in accordance with the requirements of applicable international and national laws. Information on the results of the risk analysis carried out in the reporting year can be found in the this topical standard in section S2-4 Our actions.

Transparency in our value chains is important to us in order to counter the risk areas mentioned and to identify any further risks in our procurement processes and potential negative impacts on human rights. We expect our suppliers to comply with applicable laws and to meet the more extensive ethical standards set out in our Code of Conduct for Business Partners. These also include specific requirements for our business partners to respect human rights, such as prohibiting any kind of child labor, forced labor, or human trafficking in their company. You can find information on our Code of Conduct for Business Partners in the topical standard G1 Business conduct.

Prevention and remedial measures

To prevent, eliminate, or minimize human rights risks, both the Group and each business segment take appropriate preventive measures tailored to the individual case in our own business and in the value chain. In cases where our business activities have caused or contributed to human rights violations, we take appropriate and effective case-specific remedial action. Further information can be found in this topical standard, section Our actions.

Complaint procedure and processing

We value open communication and strive to create an environment in which patients, employees, members of local communities, business partners, or other potentially affected persons can report human rights violations or non-compliance with environmental regulations. To this end, we have set up whistleblower systems, which we report on in the section Due diligence procedures and reporting channels.

Documentation and reporting

In accordance with the requirements of the applicable laws, the Fresenius Group continuously documents its compliance with human rights and environmental obligations. A report on the Human Rights Program is provided at least annually and as needed to the Management Board and to other bodies such as the Audit Committee as part of the Supervisory Board, those responsible for risk management and internal control systems, and the works council. In 2024, this included the results of the risk analysis and the further development of the Human Rights Program. The associated board resolutions and decisions are recorded in the minutes of the meetings and then communicated to relevant departments via the Human Rights function. Further information on committees, responsibilities, and the responsibility of the Audit Committee can be found in standard ESRS 2, section GOV-1 Our sustainability organization.

We also regularly inform our employees using various communication formats, such as the intranet. We report annually in our Sustainability Report and other publications on the risks we have prioritized, the preventive and remedial measures we have taken, and any duly justified cases. Information on our Human Rights Program is publicly available on our website www.fresenius.com.

Inclusion of workers in the value chain [S2-2] Processes for engaging with value chain workers about impacts

Implementing respect for human rights in our business activities and value chain is an important and complex task. We always conduct both the risk analyses and the conception of measures from the perspective of those affected. We strive to initiate and expand the dialog with relevant internal and external stakeholders, but in particular with vulnerable stakeholder groups and their legitimate representatives, in order to take their interests into account appropriately – in part on the basis of the results of our risk analyses. At the time of reporting, a general procedure for cooperation with these interest groups is being developed and will be successively implemented and expanded in the future.

In the reporting year, our focus was on gaining a better understanding of our actual and potential negative impacts on workers in our value chain and on minimizing or, if possible, eliminating them through appropriate measures. In addition, we want to deepen our knowledge of our potential positive influence on workers in the value chain. This should also help us to focus our activities on areas where we can contribute to improved working conditions, e.g. by working more closely with our business partners. These aspects were in the conception phase during the reporting year.

Due diligence procedures and reporting channels [S2-3] Processes to remediate negative impacts and channels for value chain workers to raise concerns

Dealing with negative impacts

The aim of any remedial action is to end or minimize and, if possible, reverse the human rights or environmental violation. To measure effectiveness, we review the implementation of the measures at a case-specific interval. If necessary, we initiate further measures. A process is only considered closed when all remediation measures have been fully implemented. To address negative impacts on workers in our value chain, we have developed a toolbox to provide practical support for remediation measures. This is aimed at colleagues involved in investigating human rights and environmental violations affecting employees of Fresenius as well as workers in the value chain and consists of various components. These include general guidance on remediation in accordance with the LkSG and international human-rights-related standards and principles. It also includes guidance on dealing with specific human rights violations and a handout for evaluating the effectiveness of remediation.

We are continuously working to develop and expand the processes and procedures of our Human Rights Program. In addition, we test existing procedures as well as new approaches and concepts together with various participants. These include, for example, official advice centers for the implementation of human rights due diligence and specialized consulting firms.

Complaint mechanisms and reporting channels

We offer internal and external reporting channels so that potentially affected parties can report violations of our standards and principles as easily as possible and communicate concerns and needs. Employees of the Fresenius Group as well as external stakeholders – including those in the supply chain – can use the existing reporting channels to submit their information to the Group or the business segments. Concerns related to human rights can also be submitted via a dedicated email address (humanrights@fresenius.com).

We report on the availability of our complaint mechanisms and the various reporting channels in the topical standard G1 Business conduct and in other publications, e.g. in the LkSG report, our Human Rights Statement, and the Code of Conduct for Business Partners, which are available on our website www.fresenius.com.

All reports are processed by specially trained employees within a specialist team. Depending on the circumstances, it may be necessary for us to involve other departments to clarify an incident. Fresenius is committed to ensuring that all employees involved in the process handle all information professionally, independently and impartially, carefully, and confidentially. The complaint mechanism is regulated in a separate gSOP and is also described in detail for external stakeholders on the Fresenius website www.fresenius.com.

It is important to us that our employees, business partners, and their employees know how and where they can report potential human rights violations. To further raise awareness of this reporting channel, we have included relevant information in the human rights training that we developed during the reporting year. We describe the training in detail in the following section.

Our actions [S2-4] Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions

Risk analysis and measures

The risk analysis focuses on the potentially negative effects on and risks for Fresenius employees and workers in the upstream value chain. We are continuously working to better understand the actual impact of abstract risks in order to develop further specific and effective measures in addition to the preventive measures already in place and to avoid negative impacts on Fresenius employees and workers in our value chain. In addition, we carefully monitor regulatory developments relating to human rights for our business processes and our value chain and review our processes accordingly.

• Procedure: The risk analysis carried out and further developed in the reporting year confirmed existing prioritized risk areas such as disregard for freedom of association, right to collective bargaining, and environmental contamination. By continuously deepening our risk analyses, these results were expanded in the reporting year to include a high abstract risk of possible discrimination and unequal treatment of workers in the value chain, as well as potentially inadequate occupational health and safety measures and the resulting work-related health hazards. The possibility that adequate wages might be withheld was also included as a prioritized risk area. We have identified these human rights risk areas as particularly relevant due to their potentially serious impact and our ability to influence them.
• Actions: In order to counter the potentially negative effects, we have initiated and implemented further preventive measures in addition to existing ones. With the risk-based implementation of human rights and environmental clauses in contracts, we also agree with suppliers on specific requirements for cooperation and information obligations in the event of human rights violations. Our Code of Conduct also sets out fundamental expectations regarding respect for human rights. In order to monitor compliance with these principles and use the results to provide industry-wide support, Fresenius Kabi, for example, prepared to join the Pharmaceutical Supply Chain Initiative (PSCI) in the reporting year. From 2025, the company will participate in the industry-wide audit pooling and thus contribute to greater transparency regarding working conditions and – where necessary – corresponding corrective or remedial measures in the pharmaceutical supply chain. In order to further increase transparency in our upstream and downstream processes, we also plan to further expand the existing descriptions and visualizations of our value chains and carry out focus risk analyses on this basis.

In the reporting year, we did not receive any reports of serious human rights incidents or issues in the upstream or downstream value chain that required remediation.

In order to strengthen our positive impact on workers in our value chain, we are working on implementing broader measures in addition to measures tailored to individual cases. This includes the creation of a Group-wide training program on human rights, the conception of which began in 2023. A central element of our Human Rights Program is educating our employees on this important topic – not only about their personal human rights, but also about the contribution that everyone can make in their daily work. The human rights training will be rolled out successively for our own employees from 2025 onwards. It imparts knowledge about individual rights and how to deal with possible human rights violations. In addition, we point out existing reporting options.

With thousands of suppliers worldwide, we can also make a positive contribution in the value chain by educating them about respecting human rights. We plan to use our newly developed human rights training for this purpose as a supporting measure in our cooperation with our suppliers from 2025 onwards. The selection of suppliers to be trained will be based on their risk profile. The training is designed to promote awareness of human rights while strengthening cooperation with stakeholders in our value chain in order to establish common standards for ethical behavior. In this way, we want to actively contribute to the further development of our corporate culture and a shared understanding in our value chain.

The training is part of an action plan to counter the impacts, risks, and opportunities outlined. This does not require significant operational expenditure (OpEx) or capital expenditure (CapEx). The necessary resources are defined on a case-by-case basis.

We plan to continuously monitor the effectiveness of the measures after implementation.

Our goals and ambitions [S2-5] Targets related to managing material negative impacts, advancing positive impacts, and managing material risks, and opportunities

In the 2024 reporting year, Fresenius did not define a Group-wide target for 2025 that is related to managing significant negative impacts, promoting positive impacts or dealing with significant risks and opportunities regarding workers in the value chain.

Nevertheless, the Group evaluates the effectiveness of the implemented concepts based on the approaches, procedures and measures presented in this topical standard. It is our Group-wide ambition to regularly analyze human rights impacts, prevent violations, minimize risks, take necessary remedial action in the event of violations, and seize opportunities. This applies in our value chain, in our own companies, and in connection with our products and services.

The comprehensive Human Rights Program established for this purpose is described in detail in this chapter. As part of this, we continuously identify and assess all material risks that arise in this context. We integrate findings into our planning in order to take advantage of opportunities and address potential risks at an early stage. As part of the further development of the Fresenius Human Rights Program, we plan to formulate quantifiable targets building on this.

Training on human rights will be gradually rolled out for Fresenius’ own workforce from 2025. It provides knowledge about individual rights and how to deal with possible human rights violations. In addition, reference is made to existing reporting options. The training must be repeated at regular intervals.

With thousands of suppliers worldwide, we can also make a positive contribution to the value chain by educating them about respect for human rights. We plan to use the newly developed human rights training from 2025 on an ongoing and targeted basis as a supporting measure in our collaboration with suppliers. The suppliers to be trained will be selected on the basis of their risk profile.

Based on the mapping of the value chains, the implementation of focus risk analyses will be prepared from 2025 onwards

Metrics

Reports received regarding human rights S2-Company-specific

The metrics describe the reports received through our reporting systems in the reporting year that were related to human rights – broken down into those affected in our own operations and those in our value chain. Of the 28 reports received, 4 were violations of working hours and rest breaks, remuneration and occupational health and safety.

No report was related to a severe human rights violation in the upstream or downstream value chain or in our own operations.

Information on incidents and remediation with a violation of human rights relevance can be found in the topical standard S1 Own workforce, section S1-17 Incidents, complaints, and severe human rights impacts.