On : Report On Non-Financial Matters 2023

On's Business Model

On is engaged in designing, developing, marketing and distributing premium performance footwear, apparel and accessories for running, tennis, training and all-day activities.

On products are sold in more than 60 countries globally through its wholesale channel, which includes independent retailers and global distributors, and its direct-to-consumer channel, which includes On's own website, and high- end stores. All of On's products are manufactured by independent contract suppliers. On partners with carefully selected suppliers who share its commitment

to ethical business conduct, fair labor practices and proven environmental, health, and safety practices.

As of December 31, 2023, On, with its headquarters in Zurich, had 2,433 team members globally, including retail team members. On Holding AG is listed on the New York Stock Exchange (NYSE: ONON). Additional information about On's business model can be found in On's 2023 Annual Report.

On's Purpose

At On, we believe in the power of the human spirit and have made it our mission to ignite the human spirit through movement.

This guides not only how we design, innovate and craft the right gear, but the way we work every day. Our belief in the power of the human spirit is reflected in the five specific spirits that guide our culture and behavior at On:

• The Explorer Spirit
  Rethink and venture into the unknown
• The Athlete Spirit Build the better you
• The Team Spirit
  Start and finish as a team
• The Survivor Spirit
  Get smart to save the planet
• The Positive Spirit Deliver Wow

On was born in the Swiss Alps and it's still our playground and testing lab today. Our connection with nature means we're committed to protecting it for generations to come. For us, sustainability means taking into account the needs of people and the planet. We are committed to reducing our environmental impact, putting people's wellbeing at the heart of how we do things, and making sure our values and vision create an even broader impact through our partners.

ESG Structure

and Framework

In 2023, On evolved the structure of its ESG program to establish a clear governance framework for its sustainability initiatives and to encourage support and integration across the business.

On's ESG committee (the "Committee") was established to support the Board of Directors in its oversight and annual review and reporting of the Company's sustainability strategy and execution. The Committee meets quarterly and is accountable for the development and implementation of On's Sustainability Goals, strategy and execution plan.

The Committee is comprised of the following members from the Company's leadership:

• Board, Executive and Management Team Members: Caspar Copetti (Co-Founder and Executive Co-Chairman of the Board of Directors), Marc Mauer (Co-CEO and Chair of the ESG Committee), Jiahui Yin (Chief Operating Officer), Noa Perry-Reifer (Chief People Officer), and Alex Griffin (Chief Marketing Officer),
• Extended Leadership Team Members:
  Head of Corporate­ Communications, General Counsel,
  Head of Sustainability,­Head of Group Accounting and Reporting, and Head of Corporate Strategy

On's Global Sustainability department is led by our Head of Sustainability and currently consists of over 10 team members based in our global headquarters in Zurich and sourcing headquarters in Vietnam. Within the department are five functions: responsible manufacturing; sustainable products and materials; circularity and waste; strategy, education and communication; and data and systems. We continue to invest in growing this team up to 17 members in 2024 to support our sustainability initiatives.

While On's Global Sustainability, Talent and Legal teams are key to driving environmental, social impact and governance initiatives, we believe that everyone at On has a role to play in ESG, and the actual execution

and implementation of these initiatives happens across all areas of our business.

This is guided by the Survivor Spirit, which is our uncompromising approach to both performance and leaving the lowest possible footprint.

Materiality Assessment

Within On's annual Enterprise Risk Management (ERM) process, risks affecting the Company are assessed and ranked through a comprehensive analysis considering impact and likelihood based on financial consequences and potential damage to the Company's reputation.

In the identification of the climate-related risks, we utilize the Task Force on Climate-related Financial Disclosures (TCFD) categorization guidance to identify risks that could impact our business. The collective outcomes of the annual ERM process are then presented to the Board of Directors.

Our ERM process serves as a crucial foundation for shaping our ESG program. We also take action that contributes positively to our overall impact. As a footwear and apparel brand, we are conscious that the manufacturing, distribution, use, and end-of-life of our products can impact some of the ecological challenges the planet faces.

We utilize the Planetary Boundaries Framework to keep track of these challenges and look at ways we can reduce our impact.

Through our 2023 ERM process, the following ESG-related topics have been highlighted as priority risks for our business:

Environmental

Risks associated with transitioning our supply chain to be more sustainable (including materials, processes and operations).

• Our ability to execute our sustainability strategies and achieve our goals within the currently projected costs and the expected timeframes depend on many ­factors, including the availability and cost of raw ­materials and renewable energy; unforeseen production, design, operational and technological difficulties; the outcome of research efforts and future technology developments, including the ability to scale projects and technologies­
  on a commercially competitive basis such as ­carbon
  sequestration­and/or other related processes;
  compliance­ with, and changes or additions to, global and regional regulations, taxes, charges, mandates
  or requirements­relating to greenhouse gas emissions, carbon costs or climate-related goals; the ability or willingness of our suppliers to adopt more sustainable processes or the commercial availability of alternate suppliers; adapting products to customer preferences and customer acceptance of sustainable supply chain solutions; and the actions of competitors and competitive pressures. As a result, there are no
  assurances­ that we will be able to successfully execute our strategies and achieve our Sustainability Goals, which could damage our reputation and customer and other stakeholder relationships and have an adverse effect on our business, results of operations and financial condition.

Compliance with evolving climate-related regulations.

• Any failure, or perception, whether or not valid, that we have failed to achieve, or to act responsibly with respect to new or additional legal or regulatory requirements regarding climate change, could result in costs or liabilities under these requirements or adverse publicity and adversely affect our business and reputation.

Responding transparently to customer and investor ­expectations and scrutiny regarding sustainability practices.

• We may receive negative publicity as well as become the subject of legal claims if we do not meet expectations of transparency with respect to our business practices, which could harm our brand image. Additionally,
  if our independent contract manufacturers or other suppliers fail to implement socially and environmentally responsible business practices or fail to comply with applicable laws and regulations or our guidelines,
  we may be subject to fines, penalties or litigation and our brand image could also be harmed due to negative publicity.