Governance

Material Topics

Compliance, conduct, ethics, integrity and transparency (GRI disclosures: 2-27, 205-1, 205 2, 205-3, 206-1)

GRI 2-9 Governance structure and composition

Bracell is a member of the Royal Golden Eagle (RGE) group of companies. Headquartered in Singapore, RGE is a global, privately owned, diversified enterprise employing over 60,000 people.

RGE has a Board of Directors comprising executives, and each business group has its own executive leaders (heads of strategic operations departments), management teams and boards. RGE Board members are also assigned to individual businesses to provide oversight.

Bracell has independent management and controls. The heads of the Company’s strategic operations departments report on business performance and other corporate matters on a weekly basis to the RGE Board of Directors.

Bracell’s Steering Committee, comprising members of our senior leadership team, is responsible for making strategic business and operational decisions, evaluating potential investments, and tracking social and environmental performance.

Sustainability Committee and Crisis Committee

Bracell’s Steering Committee is advised by the Sustainability and Crisis Committees in identifying opportunities and actions to prevent and/or mitigate short-, medium- and long-term impacts.

In 2022, Bracell’s new Sustainability Committee was set up through a merger of Sustainability Committees at our São Paulo and Bahia sites. The Committee’s current composition includes members from key areas of the business, but no external, independent members. The Committee monitors and oversees the implementation of our Sustainability Strategy, managing social and environmental risks and opportunities across the value chain.

The Crisis Committee was set up to deal with unforeseen events with the potential to impact Bracell’s image, reputation, operations, stakeholders or value chain.

Bracell also has an Institutional Relations, Social Responsibility and Community Relations department, which is responsible for receiving and addressing concerns from underrepresented social groups. These concerns are reviewed with the involvement of the departments responsible for investigating each case (read more in disclosure GRI 2-26).

Our performance

Business-specific key performance indicators are compiled on an annual basis to inform operating and business decision-making.

Bracell’s corporate governance model encourages interdependent decision-making in line with our mission and vision, our T. O. P. I. C. C. core values (Complementary Teams, Ownership, People, Integrity, Customers, Continuous improvement) and our Code of Conduct. It also reinforces our Sustainability guidelines and our philosophy of creating value for the Community, Country, Climate, Customers, and the Company (5Cs).

All company policies are compliant with local, national and international legislation and international management standards, regulations and certification requirements (read more about Bracell’s policies and commitments in GRI 2-23).

Bracell has internal policies, processes and procedures to identify actual and potential impacts from its operations, and to prevent and/or mitigate them during operations.

Integration with the value chain

Bracell updates its materiality matrix about every two years to reflect stakeholders’ present needs and concerns.

Bracell senior leadership also participates in the updating and monitoring of its matrix of social and environmental risks. It also validates and approves the material topics prioritized in its materiality assessment, by consulting internal and external stakeholders. These priority topics are connected to Bracell’s Sustainability Strategy and are addressed in procedures and initiatives applied to daily operations.

In 2022, the Steering Committee approved guidelines for developing Bracell social-environmental long-term targets.

GRI 2-10 Nomination and selection of the highest governance body

RGE has a Board of Directors comprising key executives, while each group company has its own CEO, management teams and boards.

RGE Executive Board members are assigned to individual businesses to provide oversight. Top executives meet quarterly with RGE’s Executive Management Board to report on business performance and other corporate matters.

Members of Bracell’s senior leadership team are selected based on the extent to which their expertise, skills, competencies and technical knowledge can contribute to creating positive value for the business and for the regions where we operate.

All members of the senior leadership team act in an independent capacity. Concerns relating to actual and potential impacts from our business and operations are reviewed and addressed by our Steering Committee, Sustainability Committee and Crisis Committee, the latter created on an as-needed basis to deal with emergency situations.

Our performance

Bracell’s corporate governance model encourages interdependent decision-making in line with our mission and vision, our T. O. P. I. C. C. core values (Complementary teams, Ownership, People, Integrity, Customers, Continuous improvement) and our Code of Conduct. It also reinforces our Sustainability guidelines and our philosophy of creating value for the Community, Country, Climate, Customers and Company.

Bracell’s senior leadership participates in the updating and monitoring of the Company’s matrix of social and environmental risks and validates the material topics prioritized in its materiality assessment, by consulting key internal and external stakeholders. These topics are connected to Bracell’s Sustainability Strategy, strategic business decisions and the procedures and initiatives carried out by the Company in its daily operations.

GRI 2-11 Chair of the highest governance body

RGE Director and Executive Vice President of Bracell, Per Lindblom, was appointed as president of the Company in 2022, with no other executive role within the Company. As of January 2023, Bracell has a new president, Praveen Singhavi.

GRI 2-12 Role of the highest governance body in overseeing the management of impacts

Bracell’s senior leadership serves on its Steering Committee and is responsible for making strategic business and operational decisions, evaluating potential investments and tracking social and environmental performance (see more in GRI 2-9).

The senior leadership team reviews the findings from all independent audits, annual assessments on compliance with certification standards such as Cerflor/PEFC, ISO 9001 and ISO 14001, and six-monthly independent audits on compliance with IFC standards and the Equator Principles.

In addition, the senior leadership team follows up on the implementation of audit recommendations and measures to ensure compliance.

Social and environmental management is an integral part of strategic business and operational planning at Bracell. Top management is directly involved in the materiality assessment process, stakeholder consultation, and approving material social and environmental topics, which steer Bracell’s ESG (environmental, social and governance) efforts (read more under disclosure GRI 3-1).

Top management is also involved in risk assessments and building a matrix of priority social and environmental risks, as part of the strategic planning process.

The Company’s approach to, and outcomes from, social and environmental management processes are described in the Bracell Sustainability Report, which is developed with the direct involvement of top management.

GRI 2-13 Delegation of responsibility for managing impacts

Bracell’s operations are certified against Cerflor/PEFC, ISO 9001:2015 (for our mills in Bahia and São Paulo) and ISO 14001:2015 (for our mills in São Paulo and Bahia, and our forestry operations in Bahia).

The leadership team implements Bracell’s annual operational plan in accordance with the management guidelines contained in these certification standards. This includes developing plans to mitigate and prevent social and environmental risks and impacts. The approach to identifying and monitoring impacts is a topic addressed in Bracell’s Sustainability Policy (see GRI 2-16 for more details).

Bracell has a Sustainability Committee with representatives from strategic business and operations functions, with no independent members. This committee agrees with senior management on measures to address the priority environmental, social and governance topics in Bracell’s Sustainability Strategy, and is responsible for implementing those measures at the operational level.

The Sustainability Committee manages social and environmental risks and opportunities, monitors performance against environmental, social and governance criteria, and oversees execution of our Sustainability Strategy and progress on strategic goals.

GRI 2-14 Role of the highest governance body in sustainability reporting

The heads of strategic operations report on business performance and other corporate matters on a weekly basis to the RGE Executive Board of Directors, and are involved in the development and approval of Sustainability Reports.

GRI 2-15 Conflicts of interest

Preventing conflicts of interest is addressed in our Code of Conduct. All Bracell employees also complete Conflict of Interest Declarations in accordance with the RGE Group Code of Conduct. Click here to view the Code of Conduct.

GRI 2-16 Communication of critical concerns

The Sustainability Committee, with representatives from strategic business and operations functions, works alongside top management to address the environmental, social and governance topics prioritized in our Sustainability Strategy at the operational level.

We also have a Crisis Committee set up in response to emergencies to prevent and/or mitigate operational, reputational, social and environmental impacts on Bracell’s business and stakeholders. The Committee:

• uses management workflows consistent with the nature of the emergency and local needs;
• in Bahia it has two organizational levels depending on how a crisis escalates, as outlined in the Crisis Prevention and Management Manual;
• in São Paulo and Mato Grosso do Sul, it is composed of key leadership personnel relevant to the crisis situation.

GRI 2-17 Collective knowledge of the highest governance body

Members of the Sustainability Committee and executives participate in decision-making and assessments of risks and opportunities relating to social and environmental matters.

Bracell also engages specialized consultants to implement strategic sustainability projects. Examples include:

• an assessment of social and environmental operational risks affecting our Bahia and São Paulo operations over the last two years;
• development of the Bracell Sustainability Strategy, launched in 2021; and
• materiality assessments, the most recent edition in 2022.

It is also a practice at Bracell to share related technical insights with executives and the leadership team ahead of internal meetings to discuss project outcomes and status.  

GRI 2-18 Evaluation of the performance of the highest governance body

Members of Bracell’s highest governance bodies are individually assessed on organizational values, leadership skills and compliance with annual plans for each position.

These assessments are carried out annually by the RGE Group, in accordance with Bracell’s performance review guidelines. Members of top management receive feedback as part of the process for continuous improvement.

GRI 2-19 Remuneration policies

For strategic reasons, Bracell does not disclose information about remuneration.

GRI 2-20 Process for determining remuneration

For strategic reasons, Bracell does not disclose information about remuneration.

GRI 2-21 Annual total compensation ratio

For strategic reasons, Bracell does not disclose information about remuneration.

GRI 2-27 Compliance with laws and regulations

Bracell is committed to managing environmental issues across our value chain in compliance with local, national and international laws and regulations and certification requirements, and in line with our environmental commitments.

Bracell is certified against Cerflor/PEFC for pulpwood operations in São Paulo and Bahia, ISO 9001 for mill operations in Bahia and São Paulo, and ISO 14001:2015 for mill operations in Bahia and São Paulo, and pulpwood operations in Bahia).

We publish management plan summaries annually with procedures to ensure compliance with the guidelines, principles, criteria and metrics for certification to Cerflor ABNT NBR 14.789 and ISO 14001 for our pulpwood plantations.

Read here the public management plan summary for Bahia.

Read here the public management plan summary for São Paulo.

Furthermore, to ensure compliance with applicable laws, rules and best practices in the social and economic area in our dealings with suppliers, all Bracell contracts contain provisions requiring due diligence on tax, social security and labor compliance. Any irregularities can result in payments being withheld until they are addressed.

In 2022, Bracell was not party to any judicial or administrative proceedings for unfair competition, corruption, anti-trust or monopoly practices. Furthermore, the company did not receive any significant fines for noncompliance with laws and regulations in the social and economic area. Throughout the year the company received fines but the amounts were negligible.

In our Bahia operations, Bracell received several infringement notices in 2022, but none resulted in significant fines or any other sanctions. These notices were related to changes to company details.

The company is currently party to several arbitration proceedings, but none of them relate to environmental matters or issues.

Errata: In the 2021 report we stated that Bracell “entered into a settlement and was subject to fines for non-compliance with working hours requirements regarding its São Paulo operations.” In reality, pursuant to a settlement entered into in 2018, the Company made a donation to a public institution in 2021, in lieu of paying the fine. No fine was paid in 2022. GRI 2-4

Identification and management of risks and impacts

Bracell seeks to augment the positive effects of its operations and activities while mitigating or minimizing negative impacts. To do this, we:

• Maintain an updated survey of social and environmental aspects and impacts, involving all our operations in order to identify, prevent and address any issues;
• Determine and assess social and environmental impacts before commencing operations; and
• Regularly monitor impacts to measure progress and the need to implement strategic action plans.

From eucalyptus seedling production to product shipment from our mills, all processes are mapped out and their potential impacts are identified to inform appropriate mitigation action.

Bracell has an Environmental Aspects and Impacts Matrix that identifies actual and potential impacts. For significant negative impacts, mitigation, control, and monitoring actions are established. For significant positive impacts, such as job creation, self-generated renewable electricity, soil conservation, actions are taken to maximize the benefits.

We also work to prevent risks by mapping out our assets to identify the root causes of existing risks. As part of this process, we regularly hold “Legal chats”—discussions with the departments involved to develop action plans to adjust procedures.

Bracell’s Sustainability Policy also contains guidelines on the following topics:

• Compliance with laws and regulations;
• Responsible workplace practices;
• Community development;
• Environmental protection and conservation;
• Transparency and responsibility;
• Identifying and monitoring impacts; and
• Continuous improvement and customer orientation.

GRI 3-3(205) Management of the material topic Compliance, ethical conduct, integrity and transparency

Bracell’s Code of Conduct is aligned with our Mission, Vision and our T.O.P.I.C.C Core Values; (Complementary teams, Ownership, People, Integrity, Customers, Continuous Improvement). It reflects our commitment to upholding globally recognized standards of ethics in our processes and practices, and to nurturing ethical mindsets among our employees and suppliers, and in our relations with stakeholders.

The Code of Conduct establishes guidelines for ethical conduct and embodies our commitment to maintaining ethical global business standards in daily processes and practices, as well as establishing the criteria for ethical behavior and integrity of employees, suppliers, customers and all our stakeholders.

Our Code of Conduct is shared with all of our employees at the moment of integration, soon after their admission. We also provide employees with self-training on RGE’s Code of Conduct to reinforce its guidelines.

Read here Bracell’s Code of Conduct.

Bracell operates in strict accordance with the RGE Group Global Anti-bribery and Anti-Corruption Policy and its principles and guidelines for ensuring compliance with applicable anti-bribery and anti-corruption laws, including Brazilian laws.

Bracell’s compliance culture stresses, among other things, that any failure to comply with these laws can result in civil and criminal liability both for the RGE Group and for the people involved, as well as significant reputational damage for RGE Group and Bracell.

To ensure transparency, we regularly report to our stakeholders and the broader market on the key outcomes from our management of material topics, as prioritized in consultations of internal and external stakeholders (Read more about the materiality process under GRI 3-2 and about Bracell’s material topics under GRI 3-3).

Value chain compliance

Bracell’s internal regulations and commitments extend to our suppliers. Bracell’s practices in this area include the following:

Supplier screening

All suppliers undergo screening on compliance. This includes submitting documents demonstrating compliance with environmental and labor legislation (including Human Rights, the prevention of child labor and forced labor), and compliance with environmental and operational license requirements, as well as those applicable to the supplier’s economic activity.

Supplier compliance monitoring

Compliance with applicable laws and license requirements is monitored throughout the contract. Suppliers are monitored by our Contracts Management System, a platform that stores and ensures legally required documents have been submitted, including documents demonstrating compliance with labor, environmental, and workplace health and safety laws.

Supplier assessments

All suppliers documents are screened and must meet a minimum score to retain their supplier status (minimum compliance with the parameters required by the certification standards and company procedures). The findings from screening may prevent the relevant supplier from being awarded the contract or the negotiations from proceeding.

Frequently updating documentation

Suppliers are periodically called upon to provide updated documents demonstrating compliance. Mill suppliers are evaluated in accordance with ISO 9001, while suppliers engaged for other purposes are evaluated on activity-specific technical requirements.

Contractor screening

Bracell has a dedicated team for screening contractors working for the company, in addition to managing third-party contracts. This team monitors and tracks compliance with labor legislation (including Human Rights and preventing child labor and forced labor) and environmental legislation. Contractors are also periodically called upon to provide updated documents demonstrating compliance with legal requirements and environmental and operational license requirements.

Guiding principles and standards

Bracell’s business and operations are managed in accordance with:

• our  T. O. P. I. C. C. core values¹ and our philosophy of creating value for the Community, Country, Climate, Customers and the Company;
• the International Finance Corporation (IFC) Performance Standards—the largest global development institution focused on the private sector in developing countries;
• the Ten Principles of the United Nations (UN) Global Compact²
• the UN Women’s Empowerment Principles;
• the Equator Principle as guidelines for managing social and environmental risks in our projects;
• the standards published by the International Labor Organization (ILO);
• certifications against Cerflor/PEFC, ISO 9001:2015³ and ISO 14001:2015⁴; and
• Halal⁵ and Kosher⁶ certifications in Bahia.

All commitments made by Bracell and those listed above are approved by senior leadership, and their guidelines are applied to operations through our Sustainability Policy, Code of Conduct, Procurement Code of Ethics and Whistleblowing Policy. Click here to learn more.

Bracell has governance bodies, including the Sustainability Committee and Crisis Committee—that are responsible for reporting critical concerns and recommending measures to top management (for more about our committees, see disclosure GRI 2-16).

¹Complementary teams, Ownership; People; Integrity; Customers and Continuous improvement.

² Click here to read Bracell’s Communication on Progress to the UN Global Compact.

³ For mills in Bahia and São Paulo.

⁴ For mills in Bahia and São Paulo and our pulpwood operation in Bahia.

⁵ Providing assurance that our manufacturing process complies with Islamic ethics, moral and legal standards.

⁶ Providing assurance that our process quality control and safety comply with Orthodox Jewish dietary laws.

Audit and due diligence processes 

The Company is audited externally every six months against the performance standards of the International Finance Corporation (IFC). This is part of the due diligence as a condition of receiving project finance for the two new flexible lines in the Lençóis Paulista mill (SP). The due diligence process assesses our management of social and environmental topics, including risks and opportunities, and informs action plans for improvement as necessary.

Bracell also undergoes customer due diligence audits on the use of controlled pulpwood. The external auditors are supported by teams from our forestry, milling and commercial operations. They evaluate management practices and procedures in compliance with controlled wood (CW) standards.

In addition, Bracell conducts due diligence as part of the pulpwood sourcing process, with verification of PEFC standard controlled sources and application of a questionnaire to ensure control of origin. The questionnaire is supported by documents, field inspections and other evidence of compliance with local, national and international legislation.

We also monitor suppliers’ management practices with regard to environmental conservation and protection; endangered and protected species; land tenure and land use rights of indigenous peoples, local communities, or other affected stakeholders; health, labor and safety issues; and anti-corruption.

GRI 205-1 Operations assessed for risks related to corruption

All of our operations (100% of our forestry and mill operations in Bahia, São Paulo, Sergipe and Mato Grosso do Sul) are assessed on corruption risk in accordance with the RGE Group Anti-Corruption Policy (read more about Bracell’s operations structure in GRI 2-6).

Identified risks are addressed in internal policies containing procedures on identifying potential corruption risks and implementing prevention and mitigation measures.

Bracell also has a Whistleblowing Policy which is focused on internal processes and aimed at direct employees. This document sets out fundamental principles and procedures for reporting and investigating concerns. The Whistleblowing Policy, available in Portuguese only on the Bracell website, outlines:

1. how to raise concerns about possible inaccuracies in financial reports, internal controls or any other related matters; and
2. procedures for a fair and independent investigation with adequate follow-up to address each concern raised by employees.

Whistleblowers can report possible inaccuracies to the Internal Audit departments in all operations. Reports can be made by telephone, email, snail mail, face-to-face meetings, and other means of communication.

Other policies on ethical practices and conduct and ensuring compliance with laws and regulations are also available on Bracell’s website. These include our Code of Conduct, our Procurement Code of Ethics, and our Sustainability Policy. Click here to view our policies.

GRI 205-2 Communication and training about anti-corruption policies and procedures

Each year we provide training on anti-corruption guidelines, consistent with the Bracell Code of Conduct, as part of our annual training program.

All newly hired employees receive a copy of the Code of Conduct during induction. They also receive training on integrity, anti-bribery and anti-corruption.

Other initiatives include the following:

• All members of the senior leadership team attend regular training on ethics and integrity, including training on the Code of Conduct;
• Employees in senior positions or who are responsible for conducting business partner due diligence receive additional, personalized training on RGE’s Business Partner due diligence process; and
• All Bracell suppliers receive copies of our Procurement Code of Conduct and undergo due diligence and a review of documentation and evidence demonstrating compliance with local, national and international laws and regulations, certification requirements, technical standards and regulatory standards.

GRI 205-3 Confirmed incidents of corruption and actions taken

Bracell has control mechanisms and procedures in place to ensure compliance. We define corruption as obtaining an undue advantage for one’s own or a third party’s benefit. In 2022, there were no cases of corruption in Bracell.

Note: In 2021, the Company investigated a reported case of fraud. As a result, the suppliers involved were debarred from doing business with Bracell.

Note 2: Cases of corruption are those that have at least two people involved in the realization of abuse of power and private gains.

GRI 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

In 2022, Bracell was not party to any judicial or administrative proceedings, either nationally or internationally, for unfair competition, corruption, anti-trust or monopoly practices.

GRI 415-1 Political contributions

Bracell does not engage in any form of political contributions.