Dr Reddy Laboratories : ESG Data Reporting Criteria 2024 0

YEARS

OF SERVING PATIENTS

Dr. Reddy's Laboratories Limited

ESG Data Reporting Criteria 2024

Contents

01

Overview

03

Computation Methodology for

Patient Related Metrics

05	01 Overview
Computation Methodology for
Environment Related Metrics

09

Computation Methodology for

People Related Metrics

12

Computation Methodology for

Communities RelatedMetrics

14

Computation Methodology for	03 Computation
Governance Related Metrics	Methodology for Patient
	Related Metrics

Overview

This document on the Reporting Criteria provides the computation methodology, assumptions and exclusions made to measure the progress on ESG targets and other key metrics which are part of our Integrated Annual Report for FY 2024 and the ESG data supplementary book. The report covers the period

1 April 2023 to 31 March 2024, unless otherwise stated.

01

ESG Data Reporting Criteria

We have brought out the reporting criteria for the key sustainability performance indicators based on the below criteria:

1. Indicators where reporting standards and frameworks mentions that methodology needs to be called out,
2. Indicators which are key for our ESG goal performance,
3. Indicators which disclose the performance of our significant material issues.

Standards and frameworks for disclosures

Our Integrated Annual Report 2024 is prepared in alignment to the International Integrated Reporting () framework by the International Integrated Reporting Council (now part of IFRS foundation) for its structure.

Sustainability performance aligns with the Global Reporting Initiative (GRI) Universal Standards 2021 and the non-financial disclosures are mapped according to Securities and Exchange Board of India (SEBI) Circulars which outlinesthe format for the Business Responsibility and Sustainability Report(BRSR Core & Comprehensive), Conforms to the nine principles of the National Guidelines on Responsible Business Conduct, 2019 (NGRBC) of the Ministry ofCorporate Affairs, Government of India. Weare consistent with the United Nations Sustainable Development Goals (UN SDGs) and demonstrating our positive contributions through various initiatives which serves as a reference for the UN Global Compact Communication on Progress questionnaire.

GHG emissions inventory and related disclosures are prepared using GHG protocol and ISO 14064 standards.

Data Sources and Systems

Our objective is to design and

implement non-financial data reporting

processes, procedures, data, and

systems to report ESG data to the

same level of reliability and relevance

as for our financial data. OurESG data reporting processes, procedures and systems are evolving, and we

continue to work to align data recording

and reporting methods across our

reporting units and globalfunctions.

Data sources and systems for key ESG

performance indicator are outlined in

the report below. We will continue to

work on and invest in enhancing our ESG data processes, procedures and systems, as well as governance over ESG data, to continuously improve the qualityofour data and to meet the evolving regulatory requirements.

02

Computation Methodology for Patient Related Metrics

03

ESG Data Reporting Criteria

Metric. No

P1

ESG Metrices	Unit of Measurement

Number of Number Patients reached

through our products

Computation Methodology and Assumptions

We have calculated number of patients reached based on the below methodology:

• Number of Drug Treated Patient Equivalents (DTPE) have been computed on the volume of Formulation (Drugs) and Active Pharmaceutical Ingredient (API) products sold by us during the year, after considering the average daily dose, duration of therapy and compliance factor.
• DTPE as computed above have been adjusted considering the dispensing practice of the respective market.
• The above have been converted to Unique Patients reached assuming the below overlap percentages for patients receiving multiple products of Dr. Reddy's during the year:
• 1. Patients consuming 3 of our products during the year: 10%
  2. Patients consuming 2 of our products during the year: 20%
  3. Patients consuming 1 of our products during the year: 70%

P2

P3

P4

P5

Number of patients	Number	y We have considered the unique patients reached
reached through our		as per the above stated methodology for the
products in LMIC's		Formulation products in the Low and middle
		income (LMIC) countries. We have considered
		around 30 LMIC countries with a criterion of <
		USD 23,000 per capita GDP in PPP as defined in
		the latest available World Bank database at the
		time of reporting.
Healthcare workers	Number	y We maintain a record of the health care workers
trained through patient		trained for patient support programs.
support programs
Patients reached	Number	y We maintain a record of the patients reached
through patient		through patient support programs like SPARSH,
support programs		VEGA CLUB, MI-Free etc.
New launches that are	Percentage	y Formulation product launch done in a country
first to market (FTM)		where our product is the first one to be launched
		either solely by us or is a shared FTM along
		with other companies. We compute all the FTM
		launches at a product country combination level
		and divide it by total number of launches done in
		all countries during the year.

Reporting Boundary and Exclusions

• Patient computation is an estimate made on thebasisof assumptions tothe best of our knowledge at the time of computation.
• The metric P1 and P2 doesn't include patients reached through our services business.

04

Computation Methodology for Environment Related Metrics

05

Metric. No

E1

ESG Metrices	Unit of Measurement

Energy consumption Giga Joules within the organization

ESG Data Reporting Criteria

Computation Methodology and Assumptions

Our overall energy use includes renewable and non-renewable energy sources.

Energy use is accounted based on

E2

E3

a. Electrical energy in meter readings and invoices from the DISCOM's

b. Fuel is monitored based on SAP records (e.g., for diesel, Furnace oil, Biomass-Briquette/Rice husk, Coal, etc.)

c. To compute the energy in terms of "Giga Joules", we

multiply gross calorific value of respective fuel with

its quantity. Similarly for electrical energy, we use conversion factor from "kWh" to "Giga Joules"

		Data from individual locations reported through our
		internal data monitoring portal.
Renewable	Percentage	Percentage of renewable electricity used is computed as:
electricity use		Total renewable electricity consumed from below
		mentioned sources divided by the total electricity
		consumption by us.
		Our renewable electricity sources are:

1. Own generation: Generation bill/ report provided by the agency
2. Third party power purchase agreements: DISCOM monthly bills and agreements with generators.
3. Green power through open access: DISCOM bills

d. Purchase of renewable energy attributes (REC's and IREC's): Purchase certificates

1. Joint Ventures: DISCOM bills

		f.	Co-generation through biomass: Internal generation
			records and Meter records
Water management:	Kilo Liter (KL)	Water withdrawal is the sum of water intake for our
1. Water Withdrawal		operations from fresh water sources which include
	municipal, groundwater, surface water, third party and
2. Water recycle/		rainwater sources.
reuse		Water withdrawal, discharges and consumption are
3. Water discharge		measured using water meter data or invoices in the case
		of municipal and tankers and are tracked through the
		internal data monitoring tool.

At majority of sites Wastewater discharge is measured

through meters located at the discharge points and

forfew sites we calculate through an assumption of

percentage of wastewater discharged from overall intake of fresh water.

06

ESG Data Reporting Criteria

Metric. No ESG Metrices Unit of Measurement

E4	Water positivity	Percentage

Computation Methodology and Assumptions

We have computed water positivity basis of below estimation:

A - Fresh water withdrawal

B - Water conserved through rainwater harvesting and other initiatives

Waterpositivity= B/A

We also work towards reduction in fresh water use through usage of grey water, water efficient processes, etc. in contributing to water positivity. We ensure that

water conserved through rainwater harvesting and other initiatives is multiple times that of fresh water with-drawal in maintaining water positivity.

E5	Direct Scope 1	M tCo2e	For detailed methodology, refer to GHG quantification
emissions	Methodology document on the website GHG
(Metric tonnes of Carbon
		Quantification Methodology - Scope1,2& 3 and
		dioxide equivalent)	Uncertainty (drreddys.com))

E6	Indirect scope 2	M tCo2e
emissions

(Metric tonnes of Carbon dioxide equivalent)

For detailed methodology, refer to GHG quantification Methodology document on the website GHG Quantification Methodology - Scope1,2& 3 and Uncertainty (drreddys.com))

E7

E8

E9

Other indirect	M tCo2e	For detailed methodology, refer to GHG quantification
scope 3 emissions	Methodology document on the website GHG
(Metric tonnes of Carbon
	Quantification Methodology - Scope1,2& 3 and
	dioxide equivalent)	Uncertainty (drreddys.com))
Other Emissions	Metric Tonnes	We monitor SO2, NOX and particulate matter through
		stack monitoring at regular frequency by third party.
Carbon neutrality	Percentage	We have computed carbon neutrality through the
		following approach:
		a.	Carbon emissions from all sources (fossil, biomass,
			renewable) related to fuel and electricity
		b.	Carbon emissions from all renewable and biomass
			sources related to fuel and electricity

1. Percentage = (b/a)*100

07

			ESG Data Reporting Criteria
Metric. No	ESG Metrices	Unit of Measurement	Computation Methodology and Assumptions
E10	Total waste generated	Metric Tonnes (MT)	Our total waste generated is categorized into
		Non-hazardous, Hazardous, Biomedical, E-waste,
			construction & demolition waste etc.
			Waste is measured using weighing scales and/or
			invoice information.
E11	Total weight of	Metric Tonnes (MT)	Waste is measured using weighing scales and/or invoice
waste diverted from		information as per the various mode of disposal.

disposal (Hazardous and Non-Hazardous)

Reporting Boundary and Exclusions

1. We have considered specific data for all global manufacturing operations, global R&D facilities and India based

offices. E11 doesnot include data relatedto offices.

1. Metrics E1 and E3, for overseas offices we have computed, on assumption basis, considering the resources use at our corporate office and employee count:
   y Total overall employee count - A y Total India employee count - B
   y Total overseas employee count - C = A-B
   y Total overseas employee count in manufacturing- D y Total overseas offices employee count- E= C-D
   Overseas office resource use= (E*Corporate office resource use)/Employee count in corporate office
2. The environment related indicators do not include data related to JV operations.

08