Responsible production

Material Topics

Evaluation of suppliers based on socio-environmental aspects: (GRI disclosure: 308-1, 308-2; 408-1; 409-1; 414-1, 414-2)

Application of socio-environmental criteria for the evaluation and selection of suppliers (respect for environmental legislation, respect and guarantee of Human Rights, Labor Rights, the Rights of Children and Adolescents, combating work similar to slavery and child labor).

Water management: (GRI disclosure: 303-1, 303-2, 303-3, 303-4, 303-5)

water and effluents: Strategies, policies and programs to preserve water and watersheds, reduce consumption, increase reuse and avoid conflicts related to water, impact on water availability and/or scarcity (whether forestry or industrial), as well as the management of effluents resulting from the process.

Human rights in the value chain: (GRI disclosure: 2-25; 410-1; 412-1)

Monitoring and management of ensuring and respecting Human Rights in the Bracell value chain.

Extra topics – Waste and required: (GRI disclosure 2-25, 306-1, 306-2,306-3, 306-4)

GRI 2-25 Processes to remediate negative impacts

Bracell seeks to augment the positive effects of its operations and activities while mitigating negative impacts.

Commitments to provide or cooperate with the remediation of negative impacts

Bracell’s corporate governance model:

• encourages interdependent decision-making. The model is aligned with our Mission and Vision and our T. O. P. I. C. C. Core Values (Complementary Teams, Ownership, People, Integrity, Customers, Continuous Improvement) and our Code of Conduct; and
• it reinforces the Company’s sustainability guidelines and our philosophy of creating value for the Community, Country, Climate, Customers and Company.

Bracell’s operations are managed in line with:

• The standards set by the International Finance Corporation (IFC)—the largest global development institution focused on the private sector in developing countries;
• The Ten Principles of the United Nations (UN) Global Compact;
• The UN Women’s Empowerment Principles (WEPs);
• The standards published by the International Labor Organization (ILO); and
• ISO 9001, ISO 14001, Cerflor/PEFC, Halal, Kosher certifications and ISEGA Cert GmbH Aschaffenburg (certification of compliance for Bracell dissolving pulp, which attests Bracell product is a pulp grade used for the manufacture of papers and boards for food packaging, of cooking and hot filter papers as well as of baking papers and absorber pads).

Mechanisms for identifying and addressing complaints and reports

Bracell Escuta is a whistleblowing channel available to all stakeholders — both internal and external — for reporting misconduct and noncompliance with laws and regulations, or with the Bracell Code of Conduct or Company standards.

Reports are confidential, and whistleblower anonymity is guaranteed. These complaints are investigated by an internal audit team, which reports directly to senior management of Bracell and RGE.

Bracell also provides a Contact Us channel to submit questions, suggestions, compliments and complaints (see more in GRI 2-29). All demands are referred to the responsible departments according to the matter at hand.

After receiving the complaint or report, whether through Bracell Escuta or Contact Us, the Company keeps the whistleblower informed about the actions taken and the status of each case.

The entire process, including the measures taken to resolve the issues, when applicable, is managed through an internal system that, among the monitored indicators, tracks the time taken to resolve each occurrence – this KPI is monitored to make the entire process more efficient. The processing and outcomes of the cases are recorded (read more in GRI 413-1 and 413-2).

Through the Bracell Escuta and Contact Us channels, the Company also receives feedback from the whistleblowers about their experience in addressing the case.

To mitigate impacts, Bracell:

• maintains an updated survey of social and environmental matters and impacts, involving all our operations in order to identify, prevent and address any issues;
• determines and assesses social and environmental impacts before commencing operations;
• assesses its sold products in terms of safety, health and environmental risks; and
• performs impact monitoring frequently to guage the process’ progress and assess the need for strategic actions.

Also included in Bracell’s stakeholder engagement plans are:

• registration of communities and field visits to gather important data to manage potential impacts generated by operations, with the goal of preventing or mitigating them;
• plotting an impact zoning map, with Bracell areas for planting, conservation, and development, to identify impacts in these geographies;
• map and matrix of stakeholders, people or groups who are directly or indirectly impacted by a project and/or activity, and those who might have a stake in a project and/or are able to influence the outcome in a positive or negative way;
• regular meetings with communities and neighbors to foster initial and operating dialogues during and after planting, hauling and silviculture, in order to keep stakeholders informed about the company’s forest management activities; and
• informational materials, such as pamphlets and digital cards, are distributed to communities. During visits to stakeholders affected by forest management, an operational dialogue kit is delivered, consisting of a backpack, keychain, cap and a brochure about the eucalyptus lifecycle, plus information about Community Relations procedures and the promotion of the Bracell Contact Us channel.

GRI 3-3 Water stewardship: water and effluents

Bracell’s Sustainability Policy and Water Monitoring Program set out our water management guidelines. Bracell also complies with the covenants under licenses issued by environmental regulators.

Bracell has structured actions in partnership with stakeholders around the sustainable use of water, the recovery of springs, and other important matters related to water sustainability. The company’s action fronts are integrated into Bracell’s management practices, and projects are conducted with the local community, presented in this chapter.

Bracell maintains a system in Bahia for monitoring the water availability of the underground reservoirs in the Camaçari region (BA), in conjunction with a pool of companies in the Camaçari industrial hub.  Bracell also participates in multilateral forums for discussing water management in the Camaçari region, ensuring compliance with regulations and actions requested by environmental monitoring and control entities.

Bracell sources water from deep cased wells owned by the company, or from surface water bodies (rivers and streams) under permits from the appropriate regulators.

Our water demand is highest in the production of seedlings, road construction and road maintenance and forestry protection (pesticide application, irrigation, and firefighting). The management operations use water collected from authorized points in irrigation and silvicultural management processes. The potential impacts of water collection and use are described in the Company’s Environmental Issues and Impacts matrix, considering the respective mitigating measures.

Surplus water from irrigation in forestry activities is reutilized in the nursery. After it seeps into the soil, it is conveyed by pipes to a tank for reuse in the final stage of seedling production.

In Bahia, over 70% of the water volume returns to the system immediately through evapotranspiration. Water collected from the roof gutters is directed to a reservoir (cistern) for the Fire Brigade team and for eucalyptus irrigation.  Water is also collected from wells, treated, and made available for use, with any surplus directed to the cistern. It is worth noting that all water used in nursery irrigation, released through underground irrigation systems, is drained back into the water table.

Periodic water monitoring is carried out in forestry operations to check qualitative and quantitative parameters of watercourses and the impact of management activities on these parameters. Possible water-related impacts are addressed in operational procedures and instilled internally through ongoing training.  To mitigate the impact, water collected by the operation takes into account the basin capacity and outflow permits.  Internal control is based on the limit granted at the respective points.

At our mills, water consumption targets are set based on best practices in the dissolving pulp industry. These targets consider the water consumed in the production process and in offices, with limits established based on equipment capability and ensuring compliance with water withdrawal volumes authorized by the responsible agency.

Environmental management indicators are tracked continually as part of the management routine at our mills, working to improve water resource efficiency.

Service providers and suppliers of Bracell comply with internal procedures that standardize the water topic, which address natural resource monitoring and conservation practices.

Note: Water consumption per ton of produced pulp is calculated as the difference between the total water intake of the Bahia and São Paulo operations, calculated separately (by operation), and the discharge of treated effluents, whose result is divided by the amount of pulp produced.

Participation in river basin committees

Bracell actively participates in forums and discussions on river basins with other companies in our geographies, strategic stakeholders and river basin committee members to contribute to management of this topic. These discussions also address risks and opportunities. The Company is a member of:

• Recôncavo Norte and Inhambupe River Basin Committees (Bahia)
• Lençóis River Basin Management Committee (CGBH-RL);
• River Basin Monitoring and Modeling Program (PROMAB/IPEF), a collaborative program of the Forestry Research Institute (IPEF), both in São Paulo state.
• PROMAB, a 25-year watershed monitoring program addressing one of its oldest river basins.

GRI 303-1 Interactions with water as a shared resource

GRI 303-2 Management of water discharge-related impacts

GRI 303-3 Water withdrawal

1. The surface water withdrawn for forestry operation in São Paulo (314,537,017 m³) and in Mato Grosso do Sul (295,305.94 m³) includes water sourced from 228 points authorized for use in forest management.
2. Water is also sourced from a well located at the Lençóis Paulista (SP) industrial site, which is used for seedling production in the operation’s nurseries (403,478.00 m³), and for human consumption in the headquarters of four farms, drawn from deep cased wells (1,807.84 m³).
3. All the captured volume for forestry operations is directly measured at the surface withdrawal points. The volume is recorded in an internal database, managed in accordance with current legislation and considering all the operational areas of the Company.
4. Bracell sources water from 37 surface water bodies under permits from the appropriate regulators. These points are distributed throughout the forest projects, comprising six main rivers: Pojuca, Subaúma, Itariri, Inhambupe, Sauípe and Imbassaí. These points are periodically controlled and monitored according to their licensing conditions. The forestry-operation environmental monitoring network covers 23 surface water quality analysis points (rivers in the region), eight groundwater quality analysis points (artesian wells), 13 fixed water potability analysis points (fit for human consumption), five mobile water potability analysis points in service fronts (also for human consumption), 37 river flow analysis points in locations authorized for surface water withdrawal, two effluent discharge outlets from forest nurseries, one effluent discharge outlet from an oil-water separator, and 15 effluent discharge outlets from septic tanks.
5. In relation to the Bahia operations, the total consumption/capture of 16,002,168.83 m³ takes into account the volume of 851,887 m³ consumed in the forestry operation.

Note 2: the data for Mato Grosso do Sul state includes the consumption of surface water sourced from 27 points authorized for use in forest management activities. Bracell does not have a plant in the state and in 2022 did not have nurseries.  Bracell started its operations in Mato Grosso do Sul state in 2022, which is why there is no data for the years 2020 and 2021. In this region, the Company only has a forestry operation and no milling operations.

Note 3: data for Bahia was calculated based on readings from flowmeters installed at each of the 11 groundwater wells. It covers the production period.

Note 4: no water was consumed in areas with water stress.

Note 5: For specific consumption, we historically consider only the volume of water consumed in the mills in Bahia and São Paulo. In Bahia, the specific consumption is 5.29 m³ and in São Paulo is 1.1 m³.

GRI 303-4 Water discharge

1. The surface water withdrawn for forestry operation in São Paulo (314,537,017 m³) and in Mato Grosso do Sul (295,305.94 m³) includes water sourced from 228 points authorized for use in forest management.
2. Water is also sourced from a well located at the Lençóis Paulista (SP) industrial site, which is used for seedling production in the operation’s nurseries (403,478.00 m³), and for human consumption in the headquarters of four farms, drawn from deep cased wells (1,807.84 m³).
3. All the captured volume for forestry operations is directly measured at the surface withdrawal points. The volume is recorded in an internal database, managed in accordance with current legislation and considering all the operational areas of the Company.
4. Bracell sources water from 37 surface water bodies under permits from the appropriate regulators. These points are distributed throughout the forest projects, comprising six main rivers: Pojuca, Subaúma, Itariri, Inhambupe, Sauípe and Imbassaí. These points are periodically controlled and monitored according to their licensing conditions. The forestry-operation environmental monitoring network covers 23 surface water quality analysis points (rivers in the region), eight groundwater quality analysis points (artesian wells), 13 fixed water potability analysis points (fit for human consumption), five mobile water potability analysis points in service fronts (also for human consumption), 37 river flow analysis points in locations authorized for surface water withdrawal, two effluent discharge outlets from forest nurseries, one effluent discharge outlet from an oil-water separator, and 15 effluent discharge outlets from septic tanks.
5. In relation to the Bahia operations, the total consumption/capture of 16,002,168.83 m³ takes into account the volume of 851,887 m³ consumed in the forestry operation.

Note 2: the data for Mato Grosso do Sul state includes the consumption of surface water sourced from 27 points authorized for use in forest management activities. Bracell does not have a plant in the state and in 2022 did not have nurseries.  Bracell started its operations in Mato Grosso do Sul state in 2022, which is why there is no data for the years 2020 and 2021. In this region, the Company only has a forestry operation and no milling operations.

Note 3: data for Bahia was calculated based on readings from flowmeters installed at each of the 11 groundwater wells. It covers the production period.

Note 4: no water was consumed in areas with water stress.

Note 5: For specific consumption, we historically consider only the volume of water consumed in the mills in Bahia and São Paulo. In Bahia, the specific consumption is 5.29 m³ and in São Paulo is 1.1 m³.

GRI 303-5 Water consumption

1. The surface water withdrawn for forestry operation in São Paulo (314,537,017 m³) and in Mato Grosso do Sul (295,305.94 m³) includes water sourced from 228 points authorized for use in forest management.
2. Water is also sourced from a well located at the Lençóis Paulista (SP) industrial site, which is used for seedling production in the operation’s nurseries (403,478.00 m³), and for human consumption in the headquarters of four farms, drawn from deep cased wells (1,807.84 m³).
3. All the captured volume for forestry operations is directly measured at the surface withdrawal points. The volume is recorded in an internal database, managed in accordance with current legislation and considering all the operational areas of the Company.
4. Bracell sources water from 37 surface water bodies under permits from the appropriate regulators. These points are distributed throughout the forest projects, comprising six main rivers: Pojuca, Subaúma, Itariri, Inhambupe, Sauípe and Imbassaí. These points are periodically controlled and monitored according to their licensing conditions. The forestry-operation environmental monitoring network covers 23 surface water quality analysis points (rivers in the region), eight groundwater quality analysis points (artesian wells), 13 fixed water potability analysis points (fit for human consumption), five mobile water potability analysis points in service fronts (also for human consumption), 37 river flow analysis points in locations authorized for surface water withdrawal, two effluent discharge outlets from forest nurseries, one effluent discharge outlet from an oil-water separator, and 15 effluent discharge outlets from septic tanks.
5. In relation to the Bahia operations, the total consumption/capture of 16,002,168.83 m³ takes into account the volume of 851,887 m³ consumed in the forestry operation.

Note 2: the data for Mato Grosso do Sul state includes the consumption of surface water sourced from 27 points authorized for use in forest management activities. Bracell does not have a plant in the state and in 2022 did not have nurseries.  Bracell started its operations in Mato Grosso do Sul state in 2022, which is why there is no data for the years 2020 and 2021. In this region, the Company only has a forestry operation and no milling operations.

Note 3: data for Bahia was calculated based on readings from flowmeters installed at each of the 11 groundwater wells. It covers the production period.

Note 4: no water was consumed in areas with water stress.

Note 5: For specific consumption, we historically consider only the volume of water consumed in the mills in Bahia and São Paulo. In Bahia, the specific consumption is 5.29 m³ and in São Paulo is 1.1 m³.

GRI 3-3 Waste (non-material topic, but strategic)

The Bracell industrial waste management process focuses on:

• reducing the waste generated in the pulp manufacturing process;
• re-utilizing materials whenever possible; and
• seeking recycling alternatives with partner organizations when there is no possibility of reducing generation or reusing it.

Waste materials left over from this process are disposed of in an environmentally safe manner, according to their hazard class.

In our Bahia operation, the mill management model seeks the management of industrial waste aligned with the circular bioeconomy, focusing on maximizing the positive impacts on the chain. A total of 85% of the waste is recycled, and the remainder is sold or reprocessed. We also commercialize shells, wood chips madeira em pedaços and waste from chipping, which are incorporated by customers in the generation of renewable energy, replacing fossil fuels, and reducing emission of Greenhouse Gases (GHG). In 2022, the mill’s waste inventory was impacted by partner companies diminishing the removal frequency, as a consequence of higher fuel prices.

Due to increases in production generated by the two new flexible lines going online at the São Paulo milling operation, Bracell is conducting studies to add circularity and reduce waste generation in the operation.

The Company also carries out employee awareness raising and training initiatives to help avoid improper waste segregation at its sites, this includes the disposal of recyclable and organic material from offices and milling areas (materials that are not directly generated in pulp production).

The Selective Collection Indicator is one of the KPIs monitored by Bracell’s Integrated Management System (IMS), periodically disclosed to employees throughout the year for performance monitoring.

GRI 306-1 Waste generation and significant waste-related impacts

Most industrial waste is generated by Bracell’s own activities. In the pulp production process, non-hazardous waste is generated from the following activities:

Chipping

Preparing and chipping eucalyptus logs produces wood waste such as bark, fines, and short logs, which have no use in pulp production per se.

Brown pulp screening

For the production of pulp, the pulp is mechanically screened after cooking the woodchips, separating out sand and wood knots.

Chemical recovery

Dregs are generated during the causticizing process, in the filtration of the green liquor, and Grits are generated during the production of white liquor, after the green liquor reacts with burnt lime.

Lubrication Workshop

Used oil from industrial equipment is fully collected for shipment to a specialized company for treatment.

Medical waste

Includes waste materials generated by medical care, sent for specific treatment and disposal carried out by a specialized company.

GRI 306-2 Management of significant waste-related impacts

Bracell’s Waste to Value Policy sets reducing, reusing and recycling waste as a priority, in that order.

The company maps potential environmental risks in its operational risk matrix, for which it has prevention processes and impact mitigation measures. Through the Solid Waste Management Plan, the company identifies the waste it generates, the departments responsible for monitoring and managing these wastes, and the procedures for proper packaging, transportation and final disposal.

Bracell has management practices and uses technologies that drive down waste generation. At the São Paulo site, with two flexible lines built according to the best available technologies (read more about the technology study conducted for the new flexible lines at the Lençóis Paulista (SP) mill on page 32 of the 2021 Sustainability Report). Bracell harnesses advanced technologies in its production process, allowing it to minimize waste production. In addition, employee awareness raising and training initiatives help to avoid improper waste segregation.

In São Paulo, Bracell has operational controls that prevent and mitigate potential environmental impacts, through the Solid Waste Management Plan that specifies the waste generated in the organization, the areas responsible for monitoring and management, the procedures for adequate storage and transport, and final disposal.

At the Bahia mill, information used to monitor solid waste generation is obtained from monitoring waste movement (number of trips), with sample weighing of the waste generated by type and sector of the milling process. For recycling data, all shipments are weighed for the issuance of an invoice, and the consolidated Scale Control report is used as a source of information for waste disposal.

The waste generated by Bracell is not managed by third parties. Only the collection and internal movement processes of industrial waste are carried out by a third-party company. The company is responsible for final disposal.

GRI 306-3 Waste generated

Note 1: In 2022, 1,207.37 ton of scrap timber in general were designated for energy recovery.

Note 2: the confined volume in landfills amounted to 191,839.20 tons – Class II General/Unusable (non-hazardous), 9.67 tons – Class II Landfill; Organic Waste (non-hazardous), 172.44 tons – Municipal Landfill; Fiberglass and Mineral Wool (non-hazardous), 107.5 tons – Class II Landfill. Refractories of the Furnace (non-hazardous), 515.19 tons – Class II landfill; Sludge (ETE/ETA) (non-hazardous), 166,031.56 tons – Class II landfill; Mixed Waste (Dregs, Grits, Knots, Sticks, Ash and Sand), non-hazardous, 25,002.84 tons – Class II landfill.

Note 3: other disposals totaled 44,262.74 tons – PPE/Various Recycled (non-hazardous): 30.19 tons – Recycling; General Packaging – Carboys and Containers (non-hazardous): 4.18 tons – Recycling; Selective Collection Recyclables (non-hazardous): 118.41 tons – Recycling; Copper Scrap, Wires, and Cables (non-hazardous): 2.12 tons – Recycling; Various Metallic Scrap (non-hazardous): 1,173.93 tons – Recycling; Discarded Big Bags (non-hazardous): 29.84 tons – Recycling. Rubber (tires and others) (non-hazardous): 53.77 tons – Recycling; Lime Sludge (non-hazardous): 42,850.3 tons – Recycling.

Note 4: Bracell does not store hazardous waste.

Note 5: In 2022, Bracell disposed of a total of 237,543.98 tons of waste outside the organization.

Note 6: Figures include the volumes of residues from the forestry and industrial operations in São Paulo. The residues from the forestry operation refer to contaminated Class I residues from the harvest module. The other residues from the forestry operation are collected separately (recyclable and non-recyclable), sent to the industrial site in São Paulo and then sent for disposal. The waste generated in the forestry operation by service providers is collected locally, separated into recyclable and non-recyclable and disposed of by EPS itself in the municipalities where the operation was carried out.

See the data on waste generation and disposal for 2020 and 2021  at this link.

GRI 306-4 Waste diverted from disposal

Note 1: In 2022, 1,207.37 ton of scrap timber in general were designated for energy recovery.

Note 2: the confined volume in landfills amounted to 191,839.20 tons – Class II General/Unusable (non-hazardous), 9.67 tons – Class II Landfill; Organic Waste (non-hazardous), 172.44 tons – Municipal Landfill; Fiberglass and Mineral Wool (non-hazardous), 107.5 tons – Class II Landfill. Refractories of the Furnace (non-hazardous), 515.19 tons – Class II landfill; Sludge (ETE/ETA) (non-hazardous), 166,031.56 tons – Class II landfill; Mixed Waste (Dregs, Grits, Knots, Sticks, Ash and Sand), non-hazardous, 25,002.84 tons – Class II landfill.

Note 3: other disposals totaled 44,262.74 tons – PPE/Various Recycled (non-hazardous): 30.19 tons – Recycling; General Packaging – Carboys and Containers (non-hazardous): 4.18 tons – Recycling; Selective Collection Recyclables (non-hazardous): 118.41 tons – Recycling; Copper Scrap, Wires, and Cables (non-hazardous): 2.12 tons – Recycling; Various Metallic Scrap (non-hazardous): 1,173.93 tons – Recycling; Discarded Big Bags (non-hazardous): 29.84 tons – Recycling. Rubber (tires and others) (non-hazardous): 53.77 tons – Recycling; Lime Sludge (non-hazardous): 42,850.3 tons – Recycling.

Note 4: Bracell does not store hazardous waste.

Note 5: In 2022, Bracell disposed of a total of 237,543.98 tons of waste outside the organization.

Note 6: Figures include the volumes of residues from the forestry and industrial operations in São Paulo. The residues from the forestry operation refer to contaminated Class I residues from the harvest module. The other residues from the forestry operation are collected separately (recyclable and non-recyclable), sent to the industrial site in São Paulo and then sent for disposal. The waste generated in the forestry operation by service providers is collected locally, separated into recyclable and non-recyclable and disposed of by EPS itself in the municipalities where the operation was carried out.

See the data on waste generation and disposal for 2020 and 2021  at this link.

GRI 306-5 Waste directed to disposal

Note 1: In 2022, 1,207.37 ton of scrap timber in general were designated for energy recovery.

Note 2: the confined volume in landfills amounted to 191,839.20 tons – Class II General/Unusable (non-hazardous), 9.67 tons – Class II Landfill; Organic Waste (non-hazardous), 172.44 tons – Municipal Landfill; Fiberglass and Mineral Wool (non-hazardous), 107.5 tons – Class II Landfill. Refractories of the Furnace (non-hazardous), 515.19 tons – Class II landfill; Sludge (ETE/ETA) (non-hazardous), 166,031.56 tons – Class II landfill; Mixed Waste (Dregs, Grits, Knots, Sticks, Ash and Sand), non-hazardous, 25,002.84 tons – Class II landfill.

Note 3: other disposals totaled 44,262.74 tons – PPE/Various Recycled (non-hazardous): 30.19 tons – Recycling; General Packaging – Carboys and Containers (non-hazardous): 4.18 tons – Recycling; Selective Collection Recyclables (non-hazardous): 118.41 tons – Recycling; Copper Scrap, Wires, and Cables (non-hazardous): 2.12 tons – Recycling; Various Metallic Scrap (non-hazardous): 1,173.93 tons – Recycling; Discarded Big Bags (non-hazardous): 29.84 tons – Recycling. Rubber (tires and others) (non-hazardous): 53.77 tons – Recycling; Lime Sludge (non-hazardous): 42,850.3 tons – Recycling.

Note 4: Bracell does not store hazardous waste.

Note 5: In 2022, Bracell disposed of a total of 237,543.98 tons of waste outside the organization.

Note 6: Figures include the volumes of residues from the forestry and industrial operations in São Paulo. The residues from the forestry operation refer to contaminated Class I residues from the harvest module. The other residues from the forestry operation are collected separately (recyclable and non-recyclable), sent to the industrial site in São Paulo and then sent for disposal. The waste generated in the forestry operation by service providers is collected locally, separated into recyclable and non-recyclable and disposed of by EPS itself in the municipalities where the operation was carried out.

See the data on waste generation and disposal for 2020 and 2021  at this link.

GRI 3-3 (308) Screening suppliers using social and environmental criteria

Bracell’s Code of Procurement Ethics, under “Compliance with Sustainability Framework”, establishes that:

“RGE GROUP is committed to environmental sustainability in all locations and sectors in which we operate.  Our sustainability policies and practices are guided by our philosophy, which states that ‘good business is about what is good for the Community, Country, Climate, and Company, only then is it sustainable’.

To honor this commitment, we require that our suppliers comply with RGE GROUP’s Sustainability Framework and the relevant business unit’s sustainability policy (“BUs”) in the supply of goods and services to RGE GROUP.  Non-compliance with the sustainability framework and relevant policy will be grounds for a review of the relationship and any additional action that RGE GROUP deems appropriate or necessary”.

The RGE Forestry, Fibre, Pulp & Paper Sustainability Framework is available at https://www.rgei.com/sustainability/sustainability-framework.

Bracell selects suppliers according to the standards of the Code of Ethics of Purchasing and the Sustainability Policy, both in accordance with the legislation. This rule applies to new suppliers.

Our environmental monitoring and evaluation processes for suppliers include:

Validating environmental compliance in the screening process

In the screening and requisite verification process, all suppliers suppliers are aware of and commit to knowing, understanding and respecting Bracell’s Purchasing Code of Ethics. All of the suppliers must provide documents proving compliance with environmental legislation and environmental and operational licenses, as well as those required by the supplier’s economic activity.

Monitoring performance

The criteria validated in screening is monitored throughout the management of the suppliers’ contracts. They are periodically called upon to provide updated documents proving compliance.

Supplier assessment and qualification

The qualification procedure evaluates the supplier’s capacity to supply products and services in compliance with legal, certification and technical requirements. 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.

Contract Management Systems

Suppliers are monitored by our Contracts Management System, a platform that stores contractual documents and and verification of the documents required by law and those that prove compliance with labour and safety obligations. The procedures related to certifications monitor compliance with environmental legislation.

Standards, certifications and audits

Bracell’s milling operations are certified against ISO 9001 and ISO 14001, meaning that they comply with the quality and environmental requirements of the certification standards, including the mapping of environmental issues and risks posed by milling. The risk matrix includes prevention and mitigation measures.  Management procedures are available to all company employees.

The forestry operations are certified against Cerflor/PEFC, which also includes mapping environmental issues and risks. In Bahia, forestry operations are also ISO 14001 certified.

Forestry operations are certified and they verify controlled sources of area, operations and people. This means that they are monitored by internal and external audits, and anyone who works for Bracell is subject to contractual rules that require legal compliance, including with relevant environmental laws.

Bracell also undergoes customer audits on the use of controlled pulpwood. In this process, our forestry, industrial and commercial departments receive and assist independent auditors who assess our practices and procedures to ensure compliance with controlled wood (CW) standards.

Additionally, as part of Bracell’s pulpwood procurement process, suppliers undergo due diligence to ensure our pulpwood is responsibly sourced. Suppliers complete a due diligence form on compliance with local, national, and international laws, supported by documentation and other evidence. The form also evaluates their practices with regard to: environmental conservation and protection; endangered and protected species.

Cerflor Certification of Bahia:

https://www.bracell.com/wp-content/uploads/2020/07/Certificate-BR033189-_CERFLOR_CoC-Bracell-Bahia_Portugu%C3%AAs.pdf

https://www.bracell.com/wp-content/uploads/2022/09/Certificate-BR032382_CERFLOR_Manejo_2022_PT-BR.pdf

ISO 9001 Certification:

https://www.bracell.com/wp-content/uploads/2022/12/Certificate-BR039179-ISO-9001-Portugues.pdf

https://www.bracell.com/wp-content/uploads/2021/02/ISO-9001.pdf

ISO 14001 Certification:

https://www.bracell.com/wp-content/uploads/2021/02/ISO-14001.pdf

https://www.bracell.com/wp-content/uploads/2022/12/Certificate-BR039182-ISO-14001-Portugues.pdf

GRI 308-1 New suppliers that were screened using environmental criteria

Bracell screens suppliers in accordance with social and environmental criteria as per the standards in its Code of Procurement Ethics and Sustainability Policy, both in accordance with the legislation. This rule applies to new suppliers procured in 2022.

All suppliers (100%) are screened and must meet a minimum score to retain their supplier status. The findings from screening may prevent the relevant supplier from being awarded the contract or the negotiations from proceeding. (see details of the supplier management practice in GRI 3-3(308)).

Bracell’s Code of Procurement Ethics, under “Compliance with Sustainability Framework”, establishes that:

“RGE GROUP is committed to environmental sustainability in all locations and sectors in which we operate.  Our sustainability policies and practices are guided by our philosophy, which states that ‘good business is about what is good for the Community, Country, Climate, and Company, only then is it sustainable’.

To honor this commitment, we require that our suppliers comply with RGE GROUP’s Sustainability Framework and the relevant business unit’s sustainability policy (“BUs”) in the supply of goods and services to RGE GROUP.  Non-compliance with the sustainability framework and relevant policy will be grounds for a review of the relationship and any additional action that RGE GROUP deems appropriate or necessary”.

In addition, Bracell:

• In the São Paulo operation, has started the application of a social questionnaire for forestry partnerships. The questionnaire aims to obtain information about families residing or working on the farm to be included in the company’s forestry operations areas, with follow-up of these families by the Community Relations Department.  The procedure is part of the process conducted in compliance with IFC (International Finance Corporation) Performance Standard 5;
• Also undergoes a semiannual audit, em media, by an independent firm, which assesses the São Paulo operations against the IFC Performance Standards, as a part of the operations monitoring process set by the banks providing funding for Project Star—an expansion of our Lençóis Paulista site in São Paulo; and
• Monitors social matters (covering Human Rights, Labor Rights, and Children’s and Adolescents Rights) around forestry operations as part of the process of tracing the origin of 100% of the wood used in the factory.

In 2022, the Procurements team underwent a restructuring, unifying management for Bahia and São Paulo, and creating the position of Procurement Officer.

No social and/or environmental impact was reported in relation to suppliers of inputs and materials in 2022.

GRI 308-2 Negative environmental impacts in the supply chain and actions taken

Suppliers of forestry operations (services, wood and equipment) are evaluated in relation to their management practices and environmental and social procedures, which include analysis of compliance to environmental and labor legislation (covering collective agreements and occupational health and safety), in relation to the requirements of Cerflor/PEFC certification, the requirements of the chain of custody process (specific for wood suppliers) and the requirements of the audit process of customers conducted in Bracell’s operations (specific for wood suppliers). The suppliers of the industrial operation (of inputs, services and equipment) are specifically evaluated in the aspects of quality – requirements of the ISO 9001 standard. The quality evaluation is applied to 100% of the suppliers. The suppliers of services provided to support areas, such as administrative areas, are evaluated, before they are hired, in relation to the technical requirements of each activity, and for those applicable, such as consulting firms specializing in sustainability, proof of knowledge and experience in international protocols for the management of indicators and disclosure of results in sustainability, such as GRI 2021, SASB (Sustainability Accounting Standards Board), Sustainable Development Goals (SDGs) and Performance Standards of the International Finance Corporation (IFC) is required.

There was no case of social and/or environmental impact in Bracell’s operations in relation to suppliers of inputs, materials and services in 2022 (read more in GRI Content 414-2).

GRI 408-1 Operations and suppliers at significant risk for incidents of child labor

Bracell does not tolerate child labor, forced labor, or slavery-like practices, and monitors its suppliers for compliance with laws and regulations related to these issues (read more in GRI 308, 308-1 and 308-2).

The Company contracts suppliers for various operational and support services, as well as to supply materials, inputs and equipment. There are no suppliers in Bracell’s value chain posing a risk of child labor, forced labor or slavery-like practices in Bracell’s operational units.

All suppliers are screened and must meet a minimum score to retain their supplier status. The findings from screening may prevent the relevant supplier from being awarded the contract or the negotiations from proceeding. These mechanisms are applied in accordance with the best market practices and specific methodologies for each activity performed.

Suppliers are monitored by our Contract Management System, a platform that stores contractual documents and ensures legally required documents have been submitted, including documents demonstrating compliance with labor, environmental, and workplace health and safety laws. The procedures related to certifications monitor compliance with environmental legislation.

Annually, the Internal Audit department conducts a survey of the Company’s operations to be reviewed, prepares a coverage plan segmented by macro processes and submits for approval by the Company’s Board. Once approved, teams start the execution of the projects. The first step is a survey of preliminary data to define the scope. Next, a survey is conducted to capture relevant information, pertinent to the activity, and a risk matrix is prepared. From this point on, a test program is built and executed, evaluating the efficiency of the process, besides the compliance with the procedures and legislations. Finally, a report is issued with the results of the assessments made, which is shared with the local administration and with the RGE Group.

GRI 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor

Bracell does not tolerate child labor, forced labor, or slavery-like practices, and monitors its suppliers for compliance with laws and regulations related to these issues (read more in GRI 308, 308-1 and 308-2).

The Company contracts suppliers for various operational and support services, as well as to supply materials, inputs and equipment. There are no suppliers in Bracell’s value chain posing a risk of child labor, forced labor or slavery-like practices in Bracell’s operational units.

All suppliers are screened and must meet a minimum score to retain their supplier status. The findings from screenings may prevent the relevant supplier from being awarded the contract or the negotiations from proceeding. These mechanisms are applied in accordance with the best market practices and specific methodologies for each activity performed.

Suppliers are monitored by our Contract Management System, a platform that stores contractual documents and ensures legally required documents have been submitted, including documents demonstrating compliance with labor, environmental, and workplace health and safety laws. The procedures related to certifications monitor compliance with environmental legislation.

Annually, the Internal Audit department conducts a survey of the Company’s operations to be reviewed, prepares a coverage plan segmented by macro processes and submits for approval by the Company’s Board. Once approved, teams start the execution of the projects. The first step is a survey of preliminary data to define the scope. Next, a survey is conducted to capture relevant information, pertinent to the activity, and a risk matrix is prepared. From this point on, a test program is built and executed, evaluating the efficiency of the process, besides the compliance with the procedures and legislations. Finally, a report is issued with the results of the assessments made, which is shared with the local administration and with the RGE Group.

GRI 410-1 Security personnel trained in human rights policies or procedures

All security professionals of Bracell operations (100%) undergo Human Rights training every two years in accordance with Brazilian legislation. All employees (100%), upon joining the Company, participate in an integration process, when the Code of Conduct is addressed, which covers the scope of Human Rights.

Contractors hired to work in security must maintain a valid Brazilian Security Guard License, which means their training courses are up to date. In order to maintain operational excellence in the work, these agents undergo systematic training in forestry and mill areas.

Bracell’s Security department is committed to respecting and fostering Human Rights on Bracell operations. This commitment covers the conduct and relationships with stakeholders such as contractors, suppliers and neighboring communities.

GRI 3-3 (414) Screening suppliers using social and environmental criteria

Bracell has control mechanisms in place to mitigate the risk of child, forced or compulsory labor in its operational units whilst assuring compliance with Human Rights, the Rights of Children and Adolescents and Labor Rights. These topics are part of the Company’s Sustainability Policy and are supported by the signing of a term of commitment by contracted suppliers (read more in GRI 308).

Suppliers are monitored through the Contract Management System, a platform for registering contractual documents, checking the documents required by law and documents proving compliance with labour, environmental and occupational health and safety obligations.

The Company manages and oversees suppliers regarding social issues, with procedures to analyze compliance with the applicable regulations and legislation.

Bracell respects and includes the Universal Declaration of Human Rights across the entire value chain. As a signatory to the United Nations’ Global Compact, we annually report on the progress made in our management practices and results related to the 10 Universal Principles of the Global Compact. Bracell’s COP (Communication on Progress) can be viewed here.

The company acknowledges the importance of social issues, in terms of its sustainability commitments.  The management of social issues in the supply chain is part of the company’s Sustainability Strategy, under the Responsible Production pillar.

Supplier screening and procurement

Bracell’s supplier screening, procurement and management processes include:

Assessing conditions

In the screening process, all Bracell suppliers are audited for compliance with specific  conditions, which involves providing documents that prove compliance with labor laws (including human rights and the prevention of child labor, forced labor and slavery-like practices).  In addition, they must provide documents related to operational licenses and those required by their activity.

Monitoring performance

The criteria validated in screening is monitored throughout the management of the suppliers’ contracts. They are periodically called upon to provide updated documents proving compliance. Industrial operation suppliers are evaluated in accordance with ISO 9001, while suppliers contracted for other purposes are evaluated according to specific technical criteria related to their activities.

Compliance with our Code of Conduct and Code of Procurement Ethics

Our 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). The Code of Conduct sets out guidelines for ethical conduct and embodies our commitment to upholding ethical global business standards and daily practices, as well as setting criteria for ethical behaviour and integrity of employees, 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 behaviour and integrity of employees, suppliers, customers and all our stakeholders.

Contractor screening

Bracell also has a dedicated team for screening contractors that work for the company. This area also monitors compliance with contractor agreements and labor (including Human Rights and preventing child labor and forced labor) and environmental legislation. Contractors are also periodically called upon to provide updated documents proving compliance with legal requirements and environmental and operational licenses.

Supplier assessment and qualification

The supplier qualification procedure evaluates the supplier’s capacity to supply products and services in compliance with legal, certification and technical requirements demanded by Bracell. 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). These assessments may prevent contracting, allow the continuation of the relationship, or terminate a negotiation.

Checking compliance in tax, social security and labor matters

The company includes a clause in all contracts requiring the supplier to provide all necessary documents to verify compliance in tax, social security and labor matters. Any irregularities can result in payments being withheld until they are addressed. The Bracell Contracts Management team is in constant contact with the legal department, which provides guidance when necessary.

Contract Management Systems

Suppliers are monitored by our Contracts Management System, a platform that stores contractual documents required by law and those that prove compliance with labour and safety obligations. The procedures related to certifications monitor compliance with environmental legislation.

Due diligence for responsible sourcing

As part of Bracell’s pulpwood procurement process, suppliers undergo due diligence to ensure our pulpwood is responsibly sourced. The questionnaire examines documents and other evidence for compliance with local, national, and international laws, and monitors management practices with regard to land tenure and land use rights of indigenous peoples, local communities, or other affected stakeholders; health, labor and safety issues; and anti-corruption.

Due diligence on controlled pulpwood

Bracell also undergoes customer audits on the use of controlled pulpwood. In this process, the Company’s forestry, industrial and commercial departments receive and assist independent auditors who assess our practices and procedures to ensure compliance with controlled wood (CW) standards.

Internal forums with the legal department

The legal department participates in internal forums with the objective of providing guidance or identifying possible non-conformities.  Examples of forums include: the Crisis Committee, the Sustainability Committee; the Land Committee (risk assessment for business) and the Health and Safety Committee.

Investigation of complaints referred to the Internal Audit department

Bracell’s internal audit department is responsible for investigating complaints registered in the Bracell Escuta channel or in the Contact Us channel – available to clear up queries, to receive suggestions and compliments, and to register complaints (read more in GRI 2-29).

The department is also responsible for auditing processes, carried out according to the Standard Operating Procedures (SOP). In the process, compliance is analyzed with internal regulations – such as Bracell and RGE Group policies and procedures – legislation and regulatory standards, certifications and international protocols.

The Company uses the SOPs to map its processes and compile a risk and control matrix (risk assessment process). The identified risks are reported to senior leadership of Bracell and RGE Group, and a plan of necessary actions is put together. Monthly follow-ups are conducted for critical risks.

The team partners with the internal audit department, identifying root causes in complaints and providing legal guidance on how to handle cases.

Analyzing compliance with IFC Performance Standard 5 in forestry operations

In the areas that became part of the Company’s forest operation in 2021, the social responsibility team conducted on-site investigations to map the groups of people who live in and/or use the areas located near the eucalyptus forests.

This process is managed in compliance with International Finance Corporation (IFC) Performance Standard 5 – and therefore covers social matters such as working conditions and upholding Human Rights. Bracell manages and works to quickly prevent and/or mitigate the social risks to which workers and their families may be exposed.

Bracell undergoes a semiannual audit by an independent firm, which assesses São Paulo operations against the IFC Performance Standards, as a part of the operations monitoring process set by the banks providing funding for Project Star—an expansion of our Lençóis Paulista site in São Paulo.

Social matters (covering Human Rights, Labor Rights, and Children’s Rights and Adolescents) around forestry operations are also monitored as part of the process of tracing the origin of 100% of the wood used in pulp production.

We emphasize that the company’s forestry operations are certified and they verify controlled sources of area, operations and people. This means that they are monitored by internal and external auditors, and anyone who works for Bracell is subject to contractual rules that require legal compliance.

Bracell has harnessed all these processes that are a part of its daily management and operations to monitor potential socio-environmental risks in its value chain.

GRI 414-1 New suppliers that were screened using social criteria

Bracell selects suppliers according to the standards of the Code of Ethics of Purchasing and the Sustainability Policy, both in compliance with the legislation. This rule applies to new suppliers, hired in 2022.

All (100%) suppliers are evaluated and depend on a minimum score to remain in Bracell’s supply chain. Evaluations may prevent hiring, allow the relationship to continue or terminate a negotiation (see details of the supplier management practice in GRI 3-3(308)).

Suppliers are monitored through the Contract Management System, a platform for registration of contractual documents, verification of documents required by law and those that prove compliance with labor, environmental and occupational health and safety obligations (read more in GRI 3-3 (414)).

Bracell also stimulates economic activity in the states where its operations are located and seeks to source locally for its forestry, mill and administrative operations.

In the areas that became part of the company’s forest operations in 2021, the social responsibility team conducted on-site investigations to map the groups of people who live in and/or use the areas located near the eucalyptus forests.

This process is managed in compliance with International Finance Corporation (IFC) Performance Standard 5 – and therefore covers social matters such as working conditions and upholding Human Rights.

Bracell also manages and works to quickly prevent and/or mitigate the social risks to which workers and their families may be exposed. Every six months, Bracell undergoes an external audit process to evaluate compliance of the company’s practices with socio-environmental standards, including the IFC’s Performance Standards.

We emphasize that the Company’s forestry operations are certified and these certifications verify controlled sources of area, operations and people. This means that the operations are monitored by internal and external audits, and anyone who works for Bracell is subject to contractual rules that require legal compliance.

GRI 414-2 Negative social impacts in the supply chain and actions taken

Bracell selects suppliers according to the standards of the Code of Ethics of Purchasing and the Sustainability Policy, both in compliance with the legislation. This rule applies to new suppliers, hired in 2022.

All (100%) suppliers are evaluated and depend on a minimum score to remain in Bracell’s supply chain. Evaluations may prevent hiring, allow the relationship to continue or terminate a negotiation (see details of the supplier management practice in GRI 3-3(308)).

Suppliers are monitored through the Contract Management System, a platform for registration of contractual documents, verification of documents required by law and those that prove compliance with labor, environmental and occupational health and safety obligations (read more in GRI 3-3 (414)).

There was no case of social and/or environmental impact in relation to suppliers of inputs and materials in 2022.

Managing and monitoring impacts

In forest operations, the potential negative impact is the deployment of residents or/and employees of the farmers, where the landowner terminates or reduces the scope of their activity for Bracell’s silvicultural activities. In these cases, Bracell applies a social questionnaire.

The questionnaire aims to obtain information about families and people residing or working on the farm to be included in the Company’s forestry operations areas, with follow-up of these people by the Community Relations team. The process complies with IFC Performance Standard 5 and is monitored in cycles of external audits carried out every six months on average (read more in GRI 414-1).

Potential negative impacts of Bracell’s operations on the working conditions offered to contractor employees are also considered, in order to mitigate and/or prevent cases of non-compliance with labour legislation in the Company’s operations, our partners and third parties are audited, and their activities are monitored. Positive impacts are job and income generation, as well as ensuring good working conditions for contractor employees.

Bracell strives to forestall these risks by mapping the process portfolio, identifying root causes of risks that have already been implemented.  One of the initiatives is the “legal chat”, a discussion with strategic areas in the management of the topic, resulting in action plans for adjustments to procedures, when necessary.

Among the main actions carried out by Bracell to manage social risks are:

• Occupational Safety Inspections (monthly);
• Provision of an Ombudsman system;
• Evaluating vehicle, machinery and equipment conditions (monthly);
• Continuous monitoring of health and occupational safety programs (ASO, PCMSO, PGRTR) applied by service providers;
• Monthly monitoring of labor and social security responsibilities of service providers (payments, FGTS, INSS, collective agreement, vacations, etc.); and
• Monitoring of occupational accidents Frequency and Severity Rates.

See more in GRI 303 (409) and 303 (414).

Supplier assessment and monitoring

Bracell includes a clause in all contracts requiring the supplier to provide a list of documents to verify compliance in tax, social security and labor matters. Any irregularities can result in payments being withheld until they are addressed. Bracell Contracts Management Department is in constant contact with the legal department which provides guidance when necessary (read more in GRI 3-3(308)).

In cases of timber sourcing and purchasing, Bracell monitors social risks, in addition to environmental risks, such as non-compliance with legislation, social norms and management protocols.

As part of Bracell’s pulpwood procurement process, suppliers undergo due diligence to ensure our pulpwood is responsibly sourced. The company applies a questionnaire that examines documents and other evidence for compliance with local, national and international legislation.

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

Bracell evaluates suppliers in the supply chain of its forestry operations, which includes activities carried out prior to silviculture, in relation to potential and actual social impacts.  In cases of potential or actual impacts, the company requires suppliers to adjust their practices and processes in compliance with laws and regulations.