Socio-environmental assessment of suppliers is a material topic for Bracell, and its scope includes the application of socio-environmental criteria for the evaluation and selection of suppliers in its operational units. For service providers and suppliers of wood, the main raw material for the industry, criteria of environmental legislation, human rights, labor rights, and children’s and adolescents’ rights are applied, including the fight against slave labor and child labor. As for suppliers of inputs, they are assessed according to the legislation applicable to the segment, also considering environmental issues.

At Bracell, supplier onboarding and management are governed by corporate policies on sustainability and human rights management, which in turn draw guidance from applicable laws and regulations and international sustainability standards. Our related policies are publicly available on our website.

Specifically, Bracell commits to:

• Promote economic development in the regions where we operate, including by engaging local suppliers to supply products and services for our forestry, mill, logistics (wood and pulp), and administrative operations;
• As part of supplier due diligence, review documents demonstrating compliance with environmental laws and regulations, environmental and operational license requirements, and other requirements specific to the supplier’s segment. These requirements are monitored throughout the supplier’s contract, with periodic requests for updated documentation;
• Evaluate and score suppliers on performance. 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;
• Conduct supplier visits when necessary to assess performance. On-site supplier visits are properly conducted and documented in an assessment report measuring the supplier’s performance based on defined criteria;
• Has a performance improvement program for suppliers, providing recommendations for them to achieve better results. The decision to disqualify a supplier is made impartially by a committee that carefully evaluates the information provided, ensuring transparency and equal opportunity for all. A Supplier Performance Assessment Form is submitted to the supplier, clearly detailing the reasons for the underperformance. Suppliers are notified of the results of the legal compliance assessment, carried out in the supplier due dilligence process.

Read more in GRI 308-1, in the section Management of the material topic Human rights in the value chain, under Empowering Lives, and in GRI 3-3, in the section Management of the material topic Human rights in the value chain.

We define local as our operations in Bahia (Camaçari, Alagoinhas and the municipalities hosting our forestry operations) and São Paulo (Lençóis Paulista and municipalities hosting our forestry operations in São Paulo). We define significant locations of operation as our sites in São Paulo (Lençóis Paulista and forestry operations supplying pulpwood to our São Paulo site) and Bahia (Camaçari and forestry operations supplying pulpwood to the Bahia mill). For confidentiality reasons, Bracell does not report financial data.

In 2023, local suppliers accounted for 47.04% of supplier spend in our São Paulo operations, and 67.27% of supplier spend in our Bahia operations. Local suppliers are defined as those located within the states hosting the relevant operations.