Clicks : Sustainability report 2023

Environment, Social and Governance (ESG) transparency and disclosure

This report builds on the previous year's report and demonstrates the group's commitment to enhancing its disclosure against ESG indicators from a range of global ratings agencies and guidance documents. This includes improving the group's disclosure aligned with the JSE's 2022 Sustainability Disclosure Guidance. In alignment with this guidance, the group has adopted a double materiality approach to sustainability. This seeks to integrate ESG- related issues pertinent to the creation and protection of enterprise value highlighted in its integrated report. The group's improved data management processes have enabled it to report accurately against a wider scope of metrics, underscoring the group's commitment to implementing ESG practices in its sustainability focus areas.

This sustainability report, read with the integrated report, corporate governance report, the 2023 CDP Climate Change submission (available in early 2024) and the social and ethics committee report, contains the data which is currently available to

the group.

Further standards or guidance frameworks with which the group aligns and that continue to inform its disclosure include:

• King IV Report on Corporate Governance
• Global Reporting Initiative (GRI) standards
• Sustainable Development Goals (SDGs)
• United Nations Global Compact Principles
• Carbon Disclosure Project (CDP)

The group is assessed and rated against ESG indices, including the FTSE Russell (a subsidiary of the London Stock Exchange Group), Standard and Poor's (S&P) Dow Jones and Morgan Stanley Capital International (MSCI). It has maintained its listing on the FTSE4Good Index for the last seven years.

Accredited third party service providers have reviewed selected non-financial performance metrics, including the group's broad-based black economic empowerment (BBBEE) rating and its carbon footprint.

Group profile

The group is a leader in the South African health, beauty and wellness sector, with Clicks being the pre-eminent pharmacy, health and beauty retailer and UPD the leading full-range pharmaceutical wholesaler and distributor. The group has a combined footprint of 950 stores, including 53 in neighbouring Lesotho, Eswatini, Namibia and Botswana.

Group brands

The anchor brand, Clicks, offers value for money in convenient locations and attractive formats. The core product offering is enhanced through brands that are exclusively available in Clicks.

Over the past 55 years, the group has built a respected and sustainable

business. The group is listed in the Personal Care, Drug and Grocery Stores sector on the JSE and is included in the FTSE/JSE Top 40 Index and

the FTSE/JSE Responsible Investment Top 30 Index.

South Africa's leading health and beauty retailer, targets consumers mainly in the growing middle to upper- income markets (LSM 6 - 10).

• Namibia, Botswana, Eswatini and Lesotho
• Includes 190 franchised stores

An overview of the group's history is available at www.clicksgroup.co.za.

A wide range of mother and baby products.

Sells natural, ethically produced beauty products.

A leading professional beauty and grooming franchise chain with outlets across South Africa.

UPD fulfils the pharmaceutical needs of Clicks, major private hospital groups and

1 100 independent pharmacies. UPD also provides bulk distribution services on behalf of pharmaceutical manufacturers.

About Clicks Group (continued)

Salient features

Group turnover

+8.2%

to R41.6 billion (2022: R39.6 billion)

Total headcount

18 447

employees including 17 486 South African-based employees

95% black

and

63% female employees

R135 million

invested in training

Return on equity

43.6%

(2022: 48%)

BBBEE rating

Level 4

R26.7 million

invested in socioeconomic development programmes

Commitment to carbon neutrality

by 2050

External recognition

• Inclusion in the FTSE4Good Index for the seventh consecutive year (score of 4 out of 5 in 2023)
• Independently recognised as the top employer in the retail sector for the last seven years

Recognition from our customers

Clicks ClubCard is the leading loyalty programme in terms of membership in South Africa:

• Best loyalty programme from the South African Loyalty Awards
• Coolest Health and Beauty Brand from the Sunday Times GenNext Awards
• Top Brand Experience and Function from Kantar BrandZ Top 30 Most Valuable South African Brands

Memberships of associations

Aerosol Manufacturing Association

Consumer Goods Council of

South Africa (CGCSA)

Consumer Goods and Services Ombud

Cosmetic Toiletry and

Fragrance Association

Embedding Sustainability

EPR Waste Association South Africa (eWASA)

POLYCO Producer Responsibility Organisation (PRO)

Fibre Circle (PRO)

Health Products Association of South Africa

Self-Medication Manufacturers Association of South Africa

National Business Institute (NBI)

South African Pharmacy Council (SAPC)

The Glass Recycling Company (PRO)

World Wide Fund for Nature South Africa (WWF South Africa)

The group is leading on several benchmarks both locally and internationally amongst its peers, which is a measure of the advances we continue to make on our sustainability pathway. The group's active management of its sustainability metrics and monitoring of its performance against global benchmarks ensures that it embraces leading practices on its sustainability roadmap. Some of the other initiatives include our commitment to the SA Plastics Pact and our active participation in two Producer Responsibility Organisations (Polyco and eWASA) for plastic and electronic waste respectively in South Africa.

Sourcing products that uphold the integrity of our brand

The group upholds ethical business standards when it comes to sourcing and selling products. To this end, suppliers are expected to adhere to a code of ethics which should govern their value chain practices. In addition, the group is a member of SEDEX which serves as the world's largest data platform for supply chain assessments. This is done to store, analyse, share, and report on sustainability practices which includes ethical sourcing. A significant number of our suppliers including multinationals are also members of SEDEX.

As part of its sustainability efforts, the group continues to invest in environmentally friendly products in its private label offering. This includes MyEarth, Sorbet and The Body Shop.

Empowering motivated, passionate people

Every single day, our people strive to make a difference across our value chain. All stakeholder engagements from our shareholders and lending institutions, community, suppliers, employees, policy makers and regulators are essential. Serving

10.4 million Clicks Clubcard members everyday with passion, enthusiasm and outstanding customer service is a mantra for the business.

The group has made strides in creating a motivated, diverse and inclusive workforce. Its commitment to the UN Global Compact, International Labour Organisation (ILO) protocols governing decent work and adherence to legislative frameworks in all the jurisdictions within which it operates

is important. The group supports ongoing employee training and development and works on fostering a culture of transparency and openness, respect, integrity and tolerance. The group conducted its employment engagement survey which had the highest levels of participation on record. This is done every two years to assess progress and opportunities to improve its employees' levels of engagement and connectedness to the group. Diversity and inclusion are strategic imperatives for the

group as it supports our competitive ability, and ongoing actions to improve our performance across the value chain.

Community development

Through our New Clicks Foundation and The Clicks Helping Hand Trust (CHHT), we strive to make an impact in the communities we serve. Our gratuitous bursary schemes supported 86 students in the financial year.

Since inception the New Clicks Foundation has supported 382 bursary recipients on a non-obligatory basis to the value of R21 million. This initiative supports the group's public health agenda as recipients are mainly tertiary students enrolled in pharmacy degrees.

The CHHT supported several initiatives to deepen its social impact. These included a recently launched partnership with the Transnet Phelophepa health trains which will broaden affordable health care access across communities in rural and peri-urban areas.

In addition, the University of Witwatersrand initiated a partnership under the banner of Students on the Go to provide sanitary towels to students from impoverished communities as part of enhancing their academic quality of life and dignity. This programme

is underpinned by the Clicks ClubCard for ease of redemption. The group embraced this opportunity as it aligns with its social mandates. CHHT continues to provide clinic services and screening health checks for mothers and babies and other patients.

The group supported the Ubuntu Academy which seeks to nurture boys from vulnerable communities who have demonstrated a talent for football and harness that endeavour with formal high school education up to matric level. CHHT also sponsors the Fikelela Aids Trust and Bethesda Fountain of Healing NPO which serves as a safe home for vulnerable children and it supports health care services to vulnerable communities.

Road ahead

As sustainability frameworks continue to evolve, the group will remain abreast of developments to ensure that our sustainability commitments are fully entrenched. Focus will continue on improving our photovoltaic (PV) platforms

for generation and storage to contribute towards reduced carbon emissions, recycling of electronic and plastic waste and improved water consumption. Community related initiatives which cover healthcare access and education will be enhanced to ensure ongoing positive impact in the communities within which we operate.

Bertina Engelbrecht

Chief executive officer