ESRS S3 – Affected Communities

Consumer

Material Impacts, Risks, and Opportunities

As part of the materiality assessment, we identified a negative impact on indigenous communities in the Consumer Business Segment resulting from our business activities and the related supply chains.¹

As a cosmetics manufacturer, Beiersdorf uses substances based on palm (kernel) oil. As part of our sustainability strategy, palm (kernel) oil has been identified as a high risk raw material. This is due, among other reasons, to negative impacts on the environment and affected communities² in the main countries of origin, Indonesia and Malaysia. The expansion of palm oil plantations is frequently associated with displacement of certain communities and conflicts regarding land rights. The early detection and reduction of negative impacts on (indigenous) communities is therefore a fundamental part of our sustainability agenda.

Beiersdorf has implemented various firmly established structures relating to due diligence and human rights requirements along the supply chain. Details are provided in chapter “ESRS S2 – Workers in the value chain.” The strategy development includes and assesses risks and impacts on affected communities.

Policies Related to Affected Communities

We take strict precautions to ensure that our procurement is as responsible as possible and that the human rights of indigenous communities are upheld. Beiersdorf has defined minimum standards for the recognition, protection, and promotion of the rights of indigenous communities, which are set out in more detail in the policies presented below. These standards concern both individual and collective rights, as well as cultural rights and identity, the right to education, health, employment, language, equal rights, and effective participation in all matters affecting them.

In order to meet these obligations, we require all direct business partners to comply with our internal policies and their requirements in their own business activities and along their entire value chains.

Engagement with affected communities is an important lever to ensure that our human rights and environmental expectations reflect their collective interests along the supply chains. Moreover, the only reliable way to assess compliance with these requirements is via close dialogue with all actors involved. In this context, “all actors” refers to Beiersdorf and our direct business partners. The dialogue takes place between Beiersdorf and its direct suppliers. Through our policies, we communicate our requirements along the supply chain and obligate our suppliers to cascade these requirements further upstream within their own supply chains. Compliance is verified, for example, through external certifications such as RSPO, through verification measures, including support provided by the Action for Sustainable Derivatives (ASD) initiative, as well as through the identification of complaints and incidents. Details are provided in chapter “ESRS S2 — Workers in the value chain.”

Processes for Engaging with Affected Communities

Beiersdorf has an effect in particular on communities and indigenous peoples living and working in the most important countries of origin of palm-based raw materials – albeit indirectly. This is because of the multi-tier supply chain between Beiersdorf, direct suppliers, and the palm oil mills and plantations. In addition to the actions set out in chapter “ESRS S2 – Workers in the Value Chain,” we also conduct an annual supply chain transparency analysis in conjunction with the ASD initiative to record the sourcing regions all the way to the mills for our palm-based raw materials. The analysis showed that more than 90% of our palm-based raw materials come from Indonesia and Malaysia. Both countries are home to a relatively large number of indigenous communities (transparency analysis performed in 2025 with volumes from 2024).

Although Beiersdorf has not defined any strategic processes for engaging with affected communities, it worked with the WWF to support smallholder palm oil farmers in the identified main supply countries in the reporting year. A detailed description is provided in the actions section of this chapter.

Beiersdorf is involved in decisions about the measures that the WWF implements in the two countries in close cooperation with the communities in the project regions. All relevant stakeholders were consulted prior to the start of the project as part of an FPIC process. This included discussing and coordinating the project idea and planned measures with the smallholder farmers. During the project implementation, WWF Indonesia and WWF Malaysia are in regular contact with the communities in the project regions and other relevant stakeholders.

The WWF reports on the progress of the projects, any delays, and if necessary, adjustments to the activities. The effectiveness of the cooperation has been and continues to be measured using predefined indicators; for example, the number of smallholders certified in accordance with the Roundtable on Sustainable Palm Oil (RSPO) standard is monitored. The WWF’s Environmental and Social Safeguards Framework provides an institutional mechanism to address the environmental and social risks associated with the work of the WWF. Its objective is to achieve better nature conservation results and improve the social well-being of local communities where the WWF is active. The project’s progress is reported annually to the Vice President Sustainability, who is operationally responsible for including the findings of the projects in the corporate strategies.

Channels for Affected Communities to Raise Concerns

We are actively committed to preventing or minimizing breaches of our standards of conduct and negative influences along our supply chain. Further information is provided in chapters “ESRS S2 – Workers in the Value Chain” and “ESRS G1 – Business Conduct.” This grievance channel is also available in Bahasa Indonesia for Indonesia and Malaysia; this language is also understood in Malaysia. The affected communities were not directly consulted in the process of establishing the channels. In the event of any negative impact on affected communities, a defined procedure for documenting and reviewing incidents is applied by the Responsible Sourcing team and a collective complaints procedure is used in cooperation with the ASD.

Actions Related to Affected Communities

Beiersdorf takes various actions to meet the specified obligations for responsible sourcing. We aim to promote respect for human rights and consideration of the interests of all affected communities.

We worked on two projects in Indonesia and Malaysia with our supplier Evonik and the WWF in the reporting year. The two projects were formally approved by Beiersdorf and Evonik in advance and are being operationally implemented by the WWF. Beiersdorf provided financial support to the project in Indonesia until its conclusion in August 2025, and continues to support the project in Malaysia. In this way, we are addressing the material negative impact identified in the affected communities area. Negative effects associated with the FPIC principles can be counteracted specifically through official legalization and subsequent certification of smallholder farmers’ land in line with the RSPO standard.

No serious problems or incidents concerning human rights relating to the affected communities were reported in the reporting year. Nor were there any significant negative impacts on the project villages, meaning that no specific remedial actions were necessary. Instead, preventive measures were implemented and further developed. The effectiveness of these measures is reviewed through regular dialogue with the project managers.

Targets Related to Affected Communities

Although Beiersdorf has not defined strategic targets as regards affected communities, it measures the effectiveness and progress of its actions and projects using quantitative indicators.

One overarching target of Beiersdorf is to source 100% RSPO-certified palm-based raw materials in line with the “Mass Balance” approach. We already achieved this target at the end of 2020 and have maintained it ever since. Additional details are provided in chapter “ESRS E4 – Biodiversity and Ecosystems.”