2013 - 2014 Season
Transcription
2013 - 2014 Season
Citrosuco doing good SUSTAINABILITY REPORT 2013 - 2014 TABLE OF CONTENTS .01 .02 ABOUT THE REPORT ........................................................ 7 Message from the CEO...........................................................................................................................9 Highlights of the period........................................................................................................................ 10 Market context......................................................................................................................................... 10 ORGANIZATIONAL PROFILE..........................................11 Citrosuco..................................................................................................................................................... 12 Our history................................................................................................................................................. 16 BUSINESS OVERVIEW.....................................................19 .03 Production process and value chain................................................................................................ 20 Corporate governance ........................................................................................................................ 24 Management approach......................................................................................................................... 26 Strategic guidelines ............................................................................................................................. 26 Risk management................................................................................................................................... 27 Research and innovation .................................................................................................................... 29 Voluntary commitments ...................................................................................................................... 30 SUSTAINABILITY MANAGEMENT.................................31 .04 Economic and financial performance.................................................................................................. 33 Stakeholder relations .............................................................................................................................. 34 Employee relations............................................................................................................................... 34 Customer relations................................................................................................................................ 40 Supplier relations ................................................................................................................................ 42 Community relations and development where we operate ................................................. 42 Environmental responsibility ................................................................................................................. 46 Greenhouse gas emissions................................................................................................................. 46 Other air emissions............................................................................................................................... 47 Responsible use of land ..................................................................................................................... 48 Energy mix and efficiency................................................................................................................... 48 Waste management ............................................................................................................................ 50 Water and effluent management.................................................................................................... 50 .05 HEALTHINESS..................................................................53 Certifications ........................................................................................................................................... 55 .06 AUDIT OPINION................................................................59 .07 .08 GRI CONTENT INDEX ....................................................63 ACKNOWLEDGMENTS....................................................69 .01 ABOUT THE REPORT G4-18 G4-19 G4-28 G4-32 .01 ABOUT THE REPORT This Sustainability Report 2013-2014 has been prepared according to the G4 version of the Global Reporting Initiative(GRI) guidelines and presents the company’s key organizational aspects and business initiatives for the period from July 1st, 2013 to June 30th, 2014. Material issues The definition of the structure and selection of the indicators in the report are in line with the company’s guidelines, as follows: Climate change Increase the overall efficiency of operations, aiming to reduce greenhouse gas (GHG) emissions. Eco-efficiency and the responsible use of resources Ensure the availability and proper use of production facilities. Responsible and sustainable supply chain Encourage the adoption of sustainable practices (compliance + best practices) throughout the supply chain, thus reducing risks. Support the development of the communities where we operate Contribute to the development of the people in the local communities and the protection of the environment, creating shared value. Healthiness of products Provide the market with healthy raw materials and products, optimizing the social and environmental impacts. Governance for sustainable development Incorporate sustainability aspects in the company’s strategic positioning. The GRI aspects and indicators in the report were selected to be in line with the material issues that are most relevant to sustaining the company’s business. The report meets the ‘In accordance’ - Core level of the GRI G4 guidelines. The indicators and associated responses or page references are listed in the GRI Contents Index - page 55. 8 Message from the CEO G4-1 For the first time we are publishing our sustainability report in order to disclose, in a transparent manner, our performance and main initiatives and their impacts on the environment and the communities where we operate. We recognize that Citrosuco’s long-term business continuity depends on a business model that makes sense to our shareholders, employees, customers, suppliers and society in general. Therefore, we are convinced that management, our emphasis employee on development governance, and the integration of sustainability aspects into our operations are critical factors in ensuring our future. Orange juice is our main product. It is a nutritious food, contributing to human health and well-being, which we supply to customers in over 100 countries. Our production is the result of the efforts of a team comprised of over 5 thousand people, all of whom are dedicated to ensuring that our customers have access to a product which is both of high quality and produced in a socially-just and environmentally-correct manner. We cultivate a working atmosphere that is receptive to innovation, where we seek to introduce production methods that are simple and sustainable, to develop each individual’s potential, to identify customer needs and to improve products and services. We are aware of our responsibility as a catalyst for change in society and seek to support the development of the local communities where we are present and to preserve natural resources. Mário Bavaresco Junior Citrosuco’s CEO Our sustainability material issues are addressed directly by senior management and incorporated into the company’s strategic planning and budgeting cycles, ensuring the integration of sustainability issues into Citrosuco’s business strategy. The strength and forward-looking nature of this approach has allowed us to achieve favorable results even in the recent adverse economic and market environments, worsened further by the low fruit yields due to the effects of the inclement weather during the harvest period. Our focus on cost reduction and increased efficiency was an important counterpoint to these external impacts, and, coupled with the hard work, experience, creativity and dedication of the Citrosuco team, enabled us to overcome the challenges arising during the period and to reach even higher levels of excellence. Citrosuco carries out its daily activities with a constant eye on the future. Our business model gives great importance to relations with suppliers and customers, value creation and business continuity and also expresses the company’s ambition to contribute to the construction of a fair and inclusive society. Therefore, we believe that we have established all the necessary conditions to realize our goal of making Citrosuco a benchmark for the generation of sustainable value. Orange juice is good for you... and for society! We hope you find the report a good read! SUSTAINABILITY REPORT 2013 - 2014 9 .01 ABOUT O SOBRE THE REPORT RELATÓRIO Highlights of period Destaques do the período Consolidation our Consolidação do of modelo GOVERNANCE structure de GOVERNANÇA R$10.5 million spent on SOCIAL R$ 10,5 milhões em AND ENVIRONMENTAL INVESTMENTS INVESTIMENTO SOCIOAMBIENTAL CO-GENERATION of 99,820 MWh COGERAÇÃO de 99.820 MWh, equivalente a of energy, equivalent to 39% of 39% da demanda industrial de energia elétrica industrial electrical energy demand RENEWABLE ENERGY SOURCES FONTES RENOVÁVEIS correspondem represented 60% of the energy a 60% da matriz energética (2013) mix (2013) 5,563 permanent employees 5.563 empregados fixos and e 7,002 seasonal employees 7.002 empregados sazonais 1.5milhão millionde m mof3 de RE-USED WATER 1,5 ÁGUA REUTILIZADA ≈ 28%≈of the industrial consumption 28% do consumo industrial 3 AGRICULTURAL PRACTICES, greening infestation rate PRÁTICAS AGRÍCOLAS, infestação de Greening inferior was less than 1%, well below the global industry average a 1%, muito abaixo da média da indústria global WASTE MANAGEMENT, less 5% resíduos of the waste generated was sent landfills GESTÃO DE RESÍDUOS, menos dethan 5% dos gerados são enviados paratoaterros sanitários Market context Contexto de mercado During 13/14 season, the Brazilian macroDurante the a safra 13/14, o cenário macroeconômico economic scenariomaior registered increase in brasileiro registrou regulaçãoangovernamental, government regulation, high inflation, devaluation alta de inflação, desvalorização do dólar frente ao real of the Real against the US Dollar and a declining e desaceleração do crescimento do PIB. level of GDP growth. No contexto global, a Europa apresentou continuidaIn the global context, GDP growth in Europe de no quadro estagnação do PIB continued to de stagnate and do thecrescimento Asian region as ae a Ásia apresentou na in economia, o que whole experienceddesaceleração a deceleration its economic growth rate, which adversely expansion desestimulou a ampliação do affected fluxo de the mercado. Em of trade flows. On the other hand, the United States paralelo, os Estados Unidos mostraram intensificação registered ande intensification of the trend to a return da retomada crescimento econômico. to economic growth. No período, a indústria de suco de laranja observou a queda the de produtividade global, impactada pelo During period, the orange juice industry Greening, principalmente naglobal Flóridaproductivity (EUA), e pelas experienced a decrease in due to the impacts of greening, particularly Florida condições comerciais limitadas ao cenárioinmacroe(USA), andmundial. the depressed market conditions due to conômico the adverse global macro-economic scenario. A área citrícola brasileira - São Paulo e a porção In the - located sul de main MinasBrazilian Gerais –citrus-growing teve produção region de laranja 26% in the interior of the State of São Paulo and the menor em relação à safra anterior, segundo dados southern part ofsetorial the State of Minas Gerais - orange da associação CitrusBr, totalizando 284,9 production was 26% lower compared to the previous milhões de caixas de 40,8 kg. 10 Com isso, a produção de suco de laranja indúsharvest, amounting to 284.9 million boxes da (40.8 kg/ box), according to figures published by CitrusBR, the tria em 13/14 somou cerca de 850 mil toneladas, sector’s main trade association. queda de 20% em relação à safra anterior, afetada pelos fatoresorange apresentados acima e pelo baixo renAs a result, juice production in the 13/14 season for the industry as a whole totaled about dimento industrial da safra. 850 thousand metric tons, a decrease of 20% compared to the previous harvest, due to the factors A queda doabove rendimento é explicada pelo mentioned and theindustrial low industrial productivity of the harvest. aumento do tamanho das laranjas e pela grande concentração de água e baixa quantidade de sólidos soThe reduction in industrial productivity was due to lúveis, consequência dos regimes intensos de chuvas the increased size of the oranges, the high water no início da content andsafra. low amount of soluble solids. This resulted from the intense rainfall pattern occurring in the early part of the aharvest. A estimativa, segundo CitrusBr, é que a safra de laranja dehas 2014/15 cresçathat em relação à safra CitrusBR estimated the volume of pasthe sada, alcançando produção de 308,8 milhões harvest in the 14/15 season total will increase in relation to the previous harvest, rising to a total production de caixas em função do aumento da produtividade of 308.8 million boxes as a result of the increase dosgrove pomares. As projeções dos níveis de in productivity. The projections for rendimenthe levels to industrial productivity se mostram are também muito favoráveis of also very favorable for the 14/15 season. para a safra 2014/2015. .02 ORGANIZATIONAL PROFILE SUSTAINABILITY REPORT 2013 - 2014 11 .02 ORGANIZATIONAL PROFILE Citrosuco Citrosuco is a 100% Brazilian-owned closed-capital company, with an installed capacity that is sufficient to produce over 40% of the total volume of orange juice exported from Brazil, or to meet over 20% of the global orange juice demand. Citrosuco’s head office is located in the municipality of Matão (SP). The company operates along the entire orange juice production chain, from the cultivation of seedlings to the distribution of its products to customers through company-owned port terminals that are located strategically around the world. The company focuses primarily on overseas markets and its sales activities are based on a business-to-business model. Citrosuco exports 95% of its juice production to customers in more than 100 countries, with the largest markets being Europe, which represents about 60% of total sales, and the United States, which accounts for about 10% of total sales. In 2012 the Fischer Group, a pioneer in the orange juice business in Brazil, and the Votorantim Group, one of the largest industrial conglomerates in Latin America, joined forces to create Citrosuco, one of the leading companies in the global orange juice market, with the objectives of: • strengthening the competitiveness of Brazilian juice in the global market; • balancing value creation along the production chain; • enhancing the potential for sustainable business margins; • stabilizing and strengthening the portfolio of products; and • consolidating its market position (partnership with customers). 12 Operational structure G4-6 G4-8 G4-9 Europe 1 office in Austria (Vienna) 2 port terminals in Belgium United States 1 plant in Florida (Lake Wales) (Antwerp and Ghent) China 1 office (Shanghai) 1 port terminal (Wilmington) Japan 1 port terminal (Toyohashi) 1 office (Tokyo) Brazil 3 production plants in Matão, Catanduva and Araras (São Paulo state) Australia 1 port terminal (Newcastle) 26 farms in São Paulo and Minas Gerais states 3 storage units in Matão, Bebedouro and Limeira (São Paulo state) 2 port terminals in Santos (São Paulo state) Shipping Fleet 5 ships (4 purpose-built and 1 multi-cargo) 45 company-owned trucks and 75 trucks on contract SUSTAINABILITY REPORT 2013 - 2014 13 .02 ORGANIZATIONAL PROFILE Products G4-4 Citrosuco produces orange juice, for food and beverage manufacturers, and ingredients derived from oranges, which have applications in a number of different industries. The main products sold are: Orange juice Whole orange juice (NFC - Not From Concentrate) whole orange juice, 100% natural, pasteurized, chilled and ready to drink. It is produced from selected fruits and has the same characteristics as freshly-pressed juice. Frozen concentrated orange juice (FCOJ) - orange juice, 100% natural, concentrated and frozen, consumed in the form of reconstituted juice and used in the formulation of fruit nectar and other beverages. Ingredients Essential oil - obtained by cold pressing of orange peel after juice extraction and used in the chemical, food and perfume industries. Watery and oily phase orange essences - essences obtained from the capture of the volatile aromas produced in the evaporators during the orange juice concentration process. The watery phase essence has a wide range of applications in enhancing the flavors of foods and beverages and the oily phase essence is used in the flavor and fragrance industries. Citric terpene (D-Limonene) - a thin, colorless oil with a light citrus odor, obtained from the distillation of the citric liquor extracted from orange pulp. It is used in the perfume, chemical and pharmaceutical industries. 14 Citrus Pulp Bran (Citrus Pulp Pellets) - produced by pressing and drying the peel, seed and the orange pulp not used in the production of juice. It is used mainly as a supplement to animal feed. Wesos - concentrated orange soluble solids, produced by filtering the juice and used in the food and beverage industry. Frozen orange pulp (FOP) - obtained from healthy, ripe fruits through processes of extraction, decanting, filtration, pasteurization, cooling and storage. It is used in the production of juices with fruit bits. Alcohol - obtained by the fermentation of the sugars in the liquor produced in the pressing of orange bagasse. It is used as a fuel, in its hydrated form, or, after refinement and rectification, in the formulation of drinks and vinegar, in the form of neutral alcohol. Orange juice is the most consumed fruit juice in the world. Its flavor is the most well-known and one which is the most adaptable to a wide range of consumer tastes.” SUSTAINABILITY REPORT 2013 - 2014 15 .02 ORGANIZATIONAL PROFILE Our history The 1960’s (1963 – 1969) – Founding of Citrosuco and the construction of a fruit processing plant in Matão (SP). The 1970’s – Inauguration of a second processing plant, in Limeira (SP), in 1976. Installation of an activated sludge treatment system and cold-storage rooms for storing juice in bulk in the Matão (SP) plant. The 1980’s – Construction of cold-storage rooms in the Matão plant, expansion of the Santos port terminal and inauguration of the system of marine loading and transportation of bulk juice, thereby structuring the entire production and distribution system for bulk juice. Furthermore, in Matão, the processing plant was expanded, the energy mix was converted to biomass and a sludge treatment system was installed. The 1980’s – In 1988 the first orange tree seedling was planted at the Monte Verde Farm in Itapetininga (SP). Citrosuco Citrosuco (Fischer S.A. Comércio Indústria e Agricultura) Citrovita 16 The 1990’s – At the beginning of the decade, the Fischer Group acquired the shares of the company held by the Eckes Group, assuming full control of Citrosuco. Initiated operations at the port terminal in Japan. Acquired the Lake Wales unit in Florida and, in 1999, Citrosuco started to produce and export ready-to-drink juice (NFC), a further example of the company’s technological pioneering. The 2000’s – Two new ships came into operation, increasing the company’s juice transportation capacity. Acquired a processing plant in Bebedouro (SP) and established the Rio Pardo Farm for citrus cultivation in the municipality of Iaras (SP), with an area of over 9 thousand hectares of arable land for orange production. 2010 – Citrovita and Citrosuco signed an agreement to create the world’s largest orange juice production company. 2012 – Inauguration of the world’s leading company in the orange juice industry, maintaining the Citrosuco name. 2013 and 2014 – The company The 1990’s – Citrovita was founded and its first plant was inaugurated in Catanduva (SP). An office was opened in Germany and the first crop was harvested in Itapetininga. The 2000’s – Expanded the Itapetininga seedling nursery, and initiated the Agricultural Expansion Plan with the acquisition of several farms. Assumed control of 100% of the bulk juice logistics system in the In this decade, Citrovita carried out an intense expansion program and initiated operations at the port terminal in Antwerp, Europe. Acquired the Matão plant and the Água Branca, Ventura and Bonsucesso farms, in addition to doubling the processing capacity of the Catanduva plant. Santos port terminal and initiated operations at the port terminal in Australia. In addition, acquired and expanded the Araras plant, expanded the Catanduva plant, transferred the sales area to Brussels. Converted the hot gas generators and the boiler in the Catanduva plant to biomass with a capacity that both ensured self-sufficiency and provided surplus electrical energy for sale in the market. underwent an internal review to capture synergies, adjust production units, optimize the shipping fleet and invest in the quality of orange groves. The review was carried out in a thoughtful and responsible manner, with the objectives of increasing efficiency, competitiveness and operational excellence. G4-13 SUSTAINABILITY REPORT 2013 - 2014 17 .02 ORGANIZATIONAL PROFILE Doing good... for the body and for the world The regular consumption of orange juice provides a number of health benefits. It strengthens the immune system and increases the body’s protection against inflammatory and cardiovascular diseases and diabetes. In addition, the ingredients derived from orange are used as renewable raw materials by a number of industries for the production of: flavorings, fragrances, perfumes, insecticides, medicines, fertilizers, detergents, solvents, repellents, resins, chewing gums, glues and adhesives, tires, paints, candies, jellies and alcohol fuels. Furthermore, the company is constantly studying the development of potential new ingredients and applications. 100% of the orange is used Average destination uses of orange ('in natura') 1.5% 1.5% Juice 0.5% 1% Citrus Pellets 46.5% Oils Pulp Essences D’Limonene 49% Learn more in the Research and Innovation chapter. 18 .03 BUSINESS OVERVIEW G4-2 SUSTAINABILITY REPORT 2013 - 2014 19 .03 BUSINESS OVERVIEW Production process and value chain The company’s operations are highly capital intensive and require large-scale production in the agricultural, industrial and logistics areas. For this reason, the pursuit of excellence and operational efficiency is a constant concern for Citrosuco’s management. To achieve long-term business continuity and adequate financial results, Citrosuco strives to constantly improve, seeking to create consistent value for its shareholders, market partners and other stakeholder groups with which it maintains relations. The main stages of the company’s operations, activities and differentials contributing to its pursuit of excellence are described below. Fruit production • Seedlings production The production cycle begins with the germplasm bank of seeds from selected trees, in order to ensure the best available genetic material as regards productivity and juice quality. The seeds are kept in cold storage and then planted and cultivated until they reach the right time for grafting. The orange tree seedlings produced are bred for quality, productivity, longevity, phytosanitary adequacy and competitive production costs. • Soil preparation The formation of high quality groves requires expert knowledge in soil preparation and planting techniques, to provide the trees with conditions that are conducive to 20 The company’s own fruit production is concentrated in areas where the climate and soil are suitable for the development of the groves, which supply enough fruit to meet over 40% of industrial demand” constantly in phytosanitary controls, that is, a set of measures taken to ensure that the trees have low levels of infestation by pests and diseases. In this regard, the main measures taken are: their sound development, as well as employing practices that preserve the natural soil conditions. • Irrigation In this stage, the actions include the plowing of the compacted soil, the correction of soil acidity to enable the tree to achieve the ideal nutritional balance and the use of contouring and vegetation cover to prevent erosion. • Planting The seedlings are planted on company-owned farms and leased farmland in areas where the climate and soil are suitable for the cultivation of orange groves. • Control of pests and diseases The quality of the groves is of paramount importance to the business. For this reason the company invests - integrated management, ensuring efficient control of pests and diseases and the rational use of pesticides; and - the utilization of pesticides that have been properly registered with the relevant government authorities and that respect the regulatory requirements for both Brazil and the countries to which it exports. The company uses the drip irrigation system. This ensures both the maintenance of the necessary level of hydration for the trees and the rational use of water resources. The rigorous and efficient phytosanitary control of company-owned groves, and those in the adjacent areas, has resulted in a greening infestation rate of about 1%, which is very low compared to the average of 10% for the orange-growing region in the State of São Paulo as a whole.” SUSTAINABILITY REPORT 2013 - 2014 21 .03 BUSINESS OVERVIEW • Harvest The oranges are harvested according to the ripening of the fruit, which occurs at different times, depending on the orange variety. They are classified as follows: • Mid-season: Pera-Rio. • Late season: Valencia, Natal and Folha Murcha. The fruit development cycle, from flowering to ripening, depends on the variety and ranges between 10 and 16 months. • Early-season: Westin, Ruby and Hamlin. Westin, Rubi and Hamlin oranges (early-season) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Westin and Rubi oranges are quite spherical, with thin peels, an intense orange color and a very tasty juice. They are eaten in natura and used in the preparation of juices. The Hamlin orange is a small fruit with a thin peel and a yellowish color. It has a low juice content, a low concentration of sugars and its taste is slightly acidic. Harvest period: from May to August. Pera-Rio oranges (mid-season) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec They are smaller than the other varieties, more elongated, with a thin and smooth peel, a reddish-yellow color and a succulent pulp. This variety is often consumed ‘in natura’ and, because of its sweet taste, it is also used in the preparation of juices and jellies. Harvest period: from July to October. Valência, Natal and Folha Murcha oranges (late-season) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec They have an oval shape, a slightly thick peel, and produce a juice with a strong yellow color and a sweet taste. They are consumed ‘ in natura’ and used in the preparation of juices. Harvesting period: January and from October to December. 22 Doing good... by minimizing impacts The water extracted from the concentration of the juice is reused in the industrial processes, reducing the consumption of fresh water in the plants by up to 28%. Furthermore, this makes the transportation of the juice concentrate more efficient. • Farm-to-plant transportation The harvested oranges are initially stored in bins and then transported to the plants by truck. Manufacture of orange juice The orange is then processed by separating the juice, peel oil, peel and the bagasse. The juice is filtered and centrifuged to remove seeds and excess pulp. Bagasse, peel and seeds are used in the manufacture of orange-based ingredients. After extraction and filtration, the juice undergoes a • Raw material modern process of pasteurization, concentration and cooling, In addition to fruits grown on company-owned thereby preserving its freshness and vitamin C content. The farms, oranges from local suppliers are also processed. They are transported in bulk to the plants. On arrival at the plant the fruit is inspected and a sample is taken from each truckload to assess the fruit’s characteristics. The fruit is then stored in bins to maintain its quality up until the time the juice is extracted. NFC juice does not pass through the concentration process. • Storage The juice is stored in stainless steel tanks, which are maintained at the ideal temperature for conservation. The juice’s quality and freshness are monitored by sampling and specific laboratory tests. Logistics and distribution • Processing Initially, the oranges are washed and sorted by size so that the juice extraction can be carried out in an optimal manner. The logistics and the transportation and storage infrastructure are designed to facilitate the distribution of the harvest, ensuring both efficiency and the quality of the end product. SUSTAINABILITY REPORT 2013 - 2014 23 .03 BUSINESS OVERVIEW • Ground transportation • Ownership structure The juice is stored in the plants before being transported to the port terminal in refrigerated tanker trucks. The trucks transporting the juice are tracked and have a system to prevent unauthorized access. The control of Citrosuco is shared, on a 50:50 basis, between its two founding shareholders, the Fischer and Votorantim Groups. The company`s CEO reports to the Board of Directors, which is composed of members who are shareholders or their representatives. • Shipping/port terminal • Board of Directors At the port terminals, the juice is stored in refrigerated chambers that maintain it at the proper temperature until the arrival of the ship. The ships are bulk cargo vessels that are specifically designed and built for the transportation of the juice to the overseas port terminals. The Board of Directors is Citrosuco’s highest governance body. It evaluates and approves policies, guidelines and the business plan, monitors the company’s performance and provides guidance to senior management. These ships have cold-storage chambers and modern stainless-steel tanks ensuring that the product is transported safely, guaranteeing its quality and freshness up to delivery to the final customer. The juice can also be transported in drums, stored inside refrigerated containers. Finally, the juice is distributed from the port terminal to customers, which are companies that package and distribute the product to retail outlets, where the orange juice is purchased by end consumers. Corporate governance G4-56 Citrosuco has a governance structure that was developed based on the model proposed by the Brazilian Institute of Corporate Governance (IBGC) and the guidelines of the Brazilian Securities Commission (CVM). Citrosuco believes that good corporate governance practices contribute to strengthening its operations, reducing risks, directing the focus of the business activities and enhancing the management of the business. This model facilitates in-depth discussions, speed in decision-making and the provision of effective support to senior management in the pursuit of the planned results. The company is committed to a policy of continuous improvement and the use of best practices. The objectives are to generate less volatile, results, maximize value creation and balance the interests of all stakeholder groups. 24 The Board of Directors, which is composed of representatives of the Fischer and Votorantim Groups, holds regular meetings and its deliberations take into consideration the interests of shareholders and the other stakeholder groups. • Senior Management The CEO is the link between the Board of Directors and senior management. Senior management is responsible for drafting, proposing and implementing all the operating and financial processes that are inherent to managing the business activities, according to guidelines approved by the Board of Directors. The Brazilian Institute for Corporate Governance (IBGC) has published a Code of Best Practices in Corporate Governance, which is available to society in general. The code sets out four basic principles for good corporate governance, all of which have been adopted by Citrosuco: Transparency: This is more than the mere obligation to inform. It is the desire to provide stakeholders with access to all the information of interest to them and not just that which is imposed by laws or regulations. Transparency, which is not restricted to financial performance, contributes to creating a climate of trust in the company’s relations with its stakeholders. Equity: This is the fair treatment of all the company’s shareholders and other stakeholder groups. Discriminatory attitudes or policies are unacceptable in any situation. Accountability: Members of governing bodies should provide information on their activities and fully assume the consequences of their acts and omissions. Corporate responsibility: Members of governing bodies must act to ensure the sustainability of the organization, aiming to preserve its long-term business continuity, and incorporating aspects of social and environmental issues in the strategy and conduct of its business and operations. Shareholders Board of Directors Audit Committee Advisory Committee Governance CEO Senior Management Management Functional and Operational Areas SUSTAINABILITY REPORT 2013 - 2014 25 .03 .03 BUSINESS COMPORTAMENTO OVERVIEW EMPRESARIAL Management approach Modelo de gestão Citrosuco’s structured O modelo management de gestão da approach Citrosucowas foi estruturado according to the principles set out by the European sob os princípios da Fundação Europeia para a Foundation for Quality Management (EFQM), Gestão pela Qualidade (EFQM – European Foundaand is based on enablers and results for tion for Quality Management), baseado em viabiliemployees, customers, suppliers, society and the zadores itself. e resultados para as pessoas, os clientes, business os fornecedores, a sociedade e o negócio. •• Leadership: the no preparation to Pessoas: o foco período seof deuemployees na integração das equipes, na equalização do sistema remuexercise leadership was reinforced by defining e na revisão dos processos internos. a neratório set of skills necessary to assume a leadership • position in Citrosuco, establishing a succession Liderança: foi definido o perfil de competência plan and holding leadership workshops. do líder Citrosuco, o plano sucessório e os fóruns de liderança, pavimentando o exercício da liderança na Citrosuco. Strategic guidelines Diretrizes estratégicas vision, value drivers and strategic During the 13/14 season, the company prioritized the development of three aspects offocou this model, as follows: Na safra 13/14, a Citrosuco sua ação no de- Citrosuco’s senvolvimento de três dimensões desse modelo, • Strategy: the vision, value drivers and strategic sendo elas: guidelines for the business were defined. de discussões toda a liderança, foofA partir discussions involvingenvolvendo senior management. These ramelements definidaswill as alavancas de valor e diretrizes estrakey be the basis for the development tégicas. Esses elementos guiam o desenvolvimento da of a Citrosuco culture, the implementation of a cultura Citrosuco, a implantação do modelo de gestão management approach and the establishment of e o estabelecimento do plano estratégico, identificana strategic plan. They will also enable the company do e priorizando ações que geram valor sustentável. to identify and prioritize actions that result in the • Estratégia: trabalha a construção da visão, das • Employees: the focus was on the integration de valor teams, e das diretrizes estratégicas ofalavancas the functional the standardization negócio. ofdothe compensation system and a review of internal processes. guidelines were defined based on the results of a series generation of sustainable value. BUSINESS NEGÓCIOS Elaboração e acompanhamento Preparation and monitoring da estratégia de negócio e dos of business strategy andresultados econômicos. economic results. MOBILIZAÇÃO EMOBILIZATION TRANSFORORGANIZATIONAL MAÇÃO ORGANIZACIONAL AND TRANSFORMATION Engajamento mobilização para Engagementeand mobilization alcance de resultados transforto achieve resultseand mação organizacional. organizational transformation. Leadership Fóruns de workshops liderança STAFF SENIOR MANAGEMENT Estabelecimento e implementação do Establishment and implementation of the modelo de gestão, políticas e diretrizes management approach and organizational organizacionais. Desenvolvimento policies and guidelines. Development of da an cultura organizacional disseminação organizational culture and edissemination of dos valores e princípios de gestão. management values and principles. PLANEJAMENTO OPERACIONAL & (S&OP) VENDAS SALES & OPERATIONS PLANNING Garantir o processo de planejamento integrado Ensure that the planning process is integrated withnas rodadas de S&OP de acordo com a estratégia do negócio, the S&OP discussions, in accordance with the business com foco nos pilares de geração valor do negócio. strategy, and focusing on thede main drivers of business value. 26 26 Doing good... by rethinking After consolidating the capture of synergies and implementing best practices, following the merger, Citrosuco has now started to focus on building a new culture and business plan for the future. This is supported by a broader strategic dialogue, which goes well beyond the business as it is today, aiming at new opportunities for value creation. Drivers and guidelines Social and environmental responsibility • Promote the sustainable performance of operations, Financial management • Ensure sustainable cash generation and business profitability. contributing to the development of the local communities near the plants. People management Growth and market relations • Strengthen • Maintain market share. Citrosuco’s employee integration process, by fostering a results-oriented culture, • Develop new products and markets with higher added value and growth potential. • Establish sustainable partnerships with suppliers and customers. commitment and a sense of ownership. • Attract, retain and develop talented employees in a challenging and merit-based atmosphere. Risk management Operational excellence • Optimize assets and inventories. G4-2 • Obtain the optimal fruit characteristics for the product mix. Citrosuco’s activities are exposed, mainly, to • Ensure consistency and excellence in performance of critical business processes. and managed in order to mitigate their possible the financial and operational risk. These are classified impacts on the business. SUSTAINABILITY REPORT 2013 - 2014 27 .03 BUSINESS OVERVIEW Commodity price risk: to manage the orange price risk, the company negotiates a proportion of its sales contracts at fixed prices, aiming to ensure an appropriate balance between short, medium and long-term contracts. The company also operates in the futures markets on the Intercontinental Exchange, in order to hedge the price of juice concentrate in the North-American market. Interest rate risk: the company’s policy for managing interest rate risk establishes guidelines and standards for controlling its exposure to interest rates on loan transactions, and other types of financing and investments, in order to reduce financial costs and achieve an acceptable level of cash flow volatility. Liquidity and indebtedness risks: the company’s policy for managing its liquidity and indebtedness risks seeks to ensure that its cash position, liquidity and leverage are maintained at adequate levels and appropriate to the business plan, enabling it to fulfill its financial obligations. Credit risk: in order to minimize financial losses on Financial risks Citrosuco’s financial risk management is guided by its business model and corporate governance processes, which are formalized in corporate policies. These policies are reviewed annually and submitted to the Board of Directors for approval. The company has established a Financial Risk sales with credit terms, the credit risk management policy establishes guidelines, standards and procedures for assessing the financial health of customers and defining appropriate credit limits. Operational risks The objectives of operational risk management are to ensure the protection of employees, members Management Program to monitor its exposure to of the general public, the environment and the the global financial markets and to take action to company’s assets, and avoid the need to interrupt minimize potential adverse effects on its economic industrial processes. Thus, aspects such as health performance. The main risks monitored are: and safety, labor relations, environmental impacts and damage to fixed assets are addressed under Exchange rate risk: the policy for managing operational risk management. foreign currency exposure establishes guidelines 28 and standards for protecting the company against Additionally, the company has rationalized its the exchange rate movements of the currencies to global insurance portfolio, identifying synergies which the company is exposed, in order to protect and reducing policy premiums while maintaining or its cash flow and reduce the volatility of EBITDA. improving the insured risk coverage conditions. Corporate image and reputation risks The risks related to Citrosuco’s corporate image and reputation are managed by the Legal Department with support from the Sustainability area. Research and innovation Citrosuco promotes the development of talented employees and encourages a climate of openness regarding new ideas. The company seeks to identify and respond to customer needs, continuously improve its processes, products and services, and implement simpler and more sustainable production alternatives, thus acting as an agent that contributes to the transformation of society as a whole. To this end, the company has developed research and innovation programs, in partnership with companies and educational and research institutions in Brazil and abroad. These partnerships are aimed, mainly, at exploiting the benefits of orange juice, developing new applications for orange-based ingredients, selection of fruit varieties, pest protection and the improvement of internal processes. Some highlights of important innovations already implemented are: the production of NFC; the use of articulated trucks with two semi-trailers for juice transportation; the use of a fluidized bed boiler for burning biomass with high moisture content; and new techniques to combat greening. GREENING Greening is one of the biggest risks for the global citrus industry. It originated in Asia, where it is also often referred to as Huanglongbing (HLB), and is a bacterial disease transmitted by an insect of the psyllid family called Diaphorina Citri. Currently there is no commercial variety of crown or rootstock that has proved to be resistant to the disease, which has affected over 60% of the groves in the state of São Paulo, Brazil, and nearly 100% of those in Florida, USA. Because it is difficult to control, greening is one of the factors that has contributed significantly to increasing the industry’s production costs over the last ten years. The bacteria spreads from the initially infected branch throughout the tree, affecting the crown, turning the leaves yellow, increasing the fruit drop rate and thus lowering its productivity. This process results in an increase in fruit acidity, altering the characteristics of the juice, however, without causing any harm to the consumer. Citrosuco has signed agreements with EMBRAPA in Brazil and research institutions in the United States, to contribute to the search for solutions in the fight against greening. Until a definitive solution is found, Citrosuco will continue to exercise the strict sanitary control of its groves and also monitor the conditions of neighboring groves, in order to minimize the risk of disease outbreaks. In company-owned groves the infected trees are uprooted and destroyed, slowing down the spread of the disease. These controls have contained the number of infected trees in company-owned groves at a level of less than 1%, which is well below the Brazilian and global averages. The main measures that Citrosuco takes to combat greening, are: - Inspection of trees with disease symptoms and marking of - Spraying to control infestation by psyllids. diseased trees. - Increasing the width of the border areas separating farms. - Capture and visual inspection of insects to identify the psyllids. - Removal of diseased trees within seven days of their identification. - Tree replacement. - Breeding and release of natural enemies. - Monitoring and biological control of neighboring groves. SUSTAINABILITY REPORT 2013 - 2014 29 .03 BUSINESS OVERVIEW The company is currently focusing its innovation and research efforts on the following areas: Voluntary commitments Orange-based ingredients: Research into finding new applications for wood, leaves, flowers, seeds and fruit peel. Some examples of completed projects are as follows: evaluation of ways to recover hesperidin from oranges, a substance used by the pharmaceutical industry; the production of bio-degradable plastic from orange-based derivatives; and the use of citrus pulp pellets in the manufacture of foodstuffs for dogs and cats. The latter project has already been implemented and this product is being supplied to the pet food industry. “Child’s Friend” Company Program - ABRINQ Foundation Genetic development: Studies and field trials are being undertaken to select orange tree varieties and rootstocks that provide greater resistance to pests, diseases and climatic factors, increase productivity and enhance juice quality. Harvest efficiency: Research into methods of increasing the efficiency of the manual harvesting process while also improving the quality of life and safety of the fruit-pickers. A prototype of a machine that raises the fruit-pickers up on platforms is being tested. This machine will replace the use of ladders. Irrigation: Irrigation techniques, which use the minimum amount of water necessary for the proper development of the tree, are under development. This will reduce water consumption, make production more efficient, and reduce costs. Renewable energy and energy efficiency: Development of research into the use of alternative sources of renewable energy. The research program includes the generation of bio-gas, planting of crops for energy purposes, increasing of co-generation capacity and the implementation of new technologies that lead to increased energy efficiency. 30 G4-15 Citrosuco participates in the “Child’s Friend” Company Program, developed by the not-for-profit organization, ABRINQ Foundation - Save the Children. Its mission is to defend the rights of children and adolescents and promote their exercise of citizenship. The program has already benefited more than seven million young people in Brazil. The “Child’s Friend” Company Program engages the business sector in this cause, by mobilizing and recognizing companies that carry out social actions to promote and protect the rights of children and adolescents. .04 SUSTAINABILITY MANAGEMENT G4-2 SUSTAINABILITY REPORT 2013 - 2014 31 .04 SUSTAINABILITY MANAGEMENT Sustainability themes have been incorporated in Citrosuco’s strategy, and permeate its corporate governance, management approach, investment decisions and training and education processes. This contributes to identifying and prioritizing initiatives that lead to the generation of sustainable value. To achieve this, senior management defined the material sustainability issues for the business activities, taking into consideration the issues important to the various stakeholder groups. They were then incorporated in the strategic planning cycle which resulted in the generation of a process of sustainability management and integrated learning in the whole organization. Sustainability management: generation of economic, social and environmental value, aligned to business strategy Strategic planning BUSINESS STRATEGY Identification of material issues Learning Consolidation of results and reporting 32 Budgeting Breakdown of targets Projects and routines BUSINESS PERFORMANCE Economic Social Environmental The sustainability management process has evolved each season. This learning curve has benefited from the experiences and results of the actions and initiatives carried out. Sustainability management is also supported by the company’s Operational Management System, reflecting its commitment to address sustainability material issues in its daily activities. Citrosuco has achieved strong and consistent results, In the following sections you will find more information on Citrosuco’s management approach and performance in relation to each sustainability material issue. The company achieved the planned results through Economic and financial performance G4-9 Since the beginning of operations in July 2012, despite the under-performance of the Brazilian economy, stagnation in the international demand for orange juice and lower product prices in the period. strict management discipline, increased efficiency and operational stability, the alignment and standardization of business practices, rigorous cost control and a well-defined sales strategy. These measures resulted in the realization of synergies and the optimization of structures and processes, which together generated savings of around R$ 300 million in the period. Citrosuco’s Operational Management System (SGO) is based on the company’s policies and commitments in relation to: - meeting customer expectations by manufacturing quality products that provide risk-free benefits to consumer health; -defining occupational health and safety and the environment as priorities. This includes the prevention of occupational injuries and illnesses and the protection of the environment by the responsible use of natural resources; -complying with legal requirements and the commitments in the voluntary agreements signed; -maintaining channels of communication with stakeholder groups; -continuously improving products and services and the management system, contributing to long-term business continuity; -promoting social development based on valuing our employees and relations with other stakeholder groups; and -encouraging customers and suppliers to adopt principles and practices that are in line with this policy. SUSTAINABILITY REPORT 2013 - 2014 33 .04 SUSTAINABILITY MANAGEMENT As a result, the company was able to reduce its fixed costs by 5%, between July 2012 and June 2014, mainly due to the increased contribution of the fruit itself, because of its lower cost, in the total processing cost and a reduction in its financial leverage, measured by the ratio of net debt/EBITDA, to below 2.5 times. The total net revenue for the 13/14 season was US$ 1.3 billion, 9.1% lower than for the previous 12/13 season. This reduction was offset by increased operating efficiency and reduced costs. Citrosuco invested R$ 1 million and R$ 9.5 million in social and environmental projects, respectively, giving continuity to its policy of sustainable practices. Stakeholder relations Employee relations G4-10 G4-LA1 Citrosuco recognizes that its employees represent the foundation of the company’s future success, and values their contributions. As such the company’s approach to people management places a high value on employee development and well-being and, at the same time, supports the company in achieving its business strategy. Our team of employees is highly experienced and knowledgeable about the business. At the end of the 13/14 season the company had more than five thousand permanent employees, with the total number employed rising to more than 12 thousand during the harvest period. In the following sections you will find more information on our employees* and key people management initiatives: *The figures include permanent and seasonal employees, but exclude apprentices. Seasonal employees include both those working in the industrial plants and those on the farms working as fruit-pickers. All employees sign a formal employment contract, in accordance with the applicable labor laws. 34 Permanent employees (Brazil) by gender 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1,501 Women Men 4,062 13/14 Season Permanent employees (Brazil) by age group 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 949 > 50 years 3,123 30 to 50 years < 30 years 1,491 13/14 Season Seasonal employees (Brazil) by gender 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2,372 Women Men 4,630 13/14 Season Seasonal employees (Brazil) by age group 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 779 > 50 years 3,764 30 to 50 years < 30 years 2,459 13/14 Season Doing good... by respecting our employees Brazilian workers are protected by labor laws, international commitments ratified by the Government and the associations and unions that represent the various professional categories. Labor rights in Brazil include: • a working day of eight hours and a maximum of 44 hours per week; • overtime pay and a mandatory weekly rest day; • minimum state or national monthly salary; • paid vacation of 30 days per year plus an additional 1/3 of a monthly salary, and a 13th salary payment; • Service Time Guarantee Fund (FGTS) amounting to 8% of the monthly salary; • paid notice of at least 30 days before the employment contract expires; • indemnification for unfair dismissal; • unemployment benefits paid by the government; • paid maternity leave of 120 days and paternity leave of five days; and • additional payments for specific circumstances, such as working the night shift. Citrosuco respects its employees and requires the same commitment of its suppliers. • Career development G4-LA9 G4-LA10 Leadership development: Citrosuco invested continuously in the development of its leaders and considers the exercise of competent leadership to be the basis of its strategy and one of the key aspects of its management approach. The desired profile of skills and competences to be a Citrosuco leader was defined through a structured process that considered the objectives and specific requirements of the business activities. On the basis of this information, the profile of each of the company’s leaders was evaluated. This information SUSTAINABILITY REPORT 2013 - 2014 35 .04 SUSTAINABILITY MANAGEMENT was then cross-checked and used to prepare a individual development plan for each senior manager and an initial draft of a succession plan was prepared. Employee development: during the 13/14 season, our ongoing training and development programs provided around 98 thousand hours of training for a variety of employee categories, including administrative, operational and leadership The program aims to offer opportunities to all our employees, based on criteria and procedures defined and communicated by the HOD area. Seasonal employees are evaluated near the end of their contracts in relation to their technical and behavioral performance. This serves as the basis for defining who will be contracted in the future when vacancies become available. • Compensation system positions. The training needs are identified and prioritized annually by managers and then a training In 2012, Citrosuco’s compensation policy was plan is developed, with support from the Human and redesigned to be in line with the new organizational Organizational Development (HOD) area. structure. The goal was to achieve a balance of salary, benefits and variable compensation We also strengthened the specific programs that would enable the organization to remain designed for the operational teams of the competitive in the labor market while ensuring its agricultural and industrial areas. In relation ongoing sustainability. to the processing plants, we restructured our Integration Program for seasonal employees, by investing in technical training to enable them to carry out their functions. They undergo a week’s training course to learn about the theory and practice of key issues such as safety, health, the environment, and quality. They also participate in group dynamics sessions to strengthen teamwork. In the agricultural area, we invested in the training of the employees who monitor the groves for greening and also the tractor drivers, since they are an essential part of our disease control strategy. Another important initiative was the training of the fruit pickers. When they arrive at the farm, they go through an integration training course for two days, where they are informed about our people management practices, operational procedures and safety and environmental standards. Internal recruitment program: when a job vacancy arises we prioritize internal recruitment, since we believe in the potential of our employees and invest in their development. 36 Doing good... means studying the market To ensure the competitiveness of our compensation package compared to market practices we carry out market surveys on total annual compensation. The surveys are carried out for management, administrative and operational positions, and cover national, regional and local markets, respectively. Citrosuco uses a panel of specific companies that have been selected to be similar in terms of business, size, geographical location, competition for employees, high level of competitiveness and which are leading players in their markets. Citrosuco has adopted a compensation system based on the level and function of each position. They provide the basis for comparison with other positions and determine compensation. Each position has been evaluated using the Hay methodology. Following the identification, description and functional evaluation of each position, a market survey was conducted as a basis for defining the compensation strategy. We have unified and standardized our fixed and variable compensation, benefits and contractual terms and conditions. As is normal for an agribusiness company, we have a workforce composed of a base of permanent employees which is supplemented during the harvest period by hiring seasonal employees to work in our industrial units and on the farms as fruit pickers. The salaries and benefits of the seasonal employees follow market practices and, although they work in a seasonal activity, they have formal employment contracts with an indefinite term. The seasonal industrial employees first pass through an integration program and then, during their daily work routine, they are closely monitored by a person with experience in the position. Where necessary, additional training is provided to fully integrate these employees and ensure the safety of operations. The fruit-pickers receive the respective state’s minimum salary (which is higher than the national minimum salary), even if their productivity does not reach that value, life insurance and a monthly package of staple foods. By the end of this season we succeeded in fully implementing a single, unified compensation policy for the whole company, thus demonstrating a sense of fairness in the way the company rewards and values its workforce. This policy helped to create an internal climate of trust, which positively impacted the results for this season. SUSTAINABILITY REPORT 2013 - 2014 37 .04 SUSTAINABILITY MANAGEMENT Variable compensation: This is one of the components of total compensation and is aimed at rewarding employees for their performance at the end of each season, against pre-agreed objectives. The policy focuses on the organization’s short and long-term priorities; encourages results-oriented behavior; rewards people for results achieved (meritocracy); and contributes to the attraction and retention of talented people. There are two programs of variable remuneration, as follows: Profit-sharing Program (PPR): applies to administrative, technical and operational employees, based on collective goals, previously defined by the company and the PPR Committee. Performance indicators are monitored monthly and critically analyzed by teams at formal meetings. The results are posted on the Open Management bulletin boards. This program also covers employees working on the farms, which is one of Citrosuco’s differentials in the citrus industry. Short-term incentive: compensates employees at Restaurants: in those units with restaurant facilities, employees are provided with breakfast, lunch and dinner, based on menus prepared by nutritionists. In the units that don’t have restaurant facilities, employees are provided with meal vouchers. Food vouchers: granted to the operational and administrative employees of the industrial area (up to the level of supervisor), and the administrative employees in the agricultural area. The employees at the operational level in the agricultural area and the seasonal employees receive a monthly package of staple foods. Subsidized medicines: this benefit is granted to all employees, and their families, who work in the industrial area, through agreements with suppliers. managerial level based on their performance in relation The company subsidizes 50% of the cost of medicines to a set of targets, financial, functional, process and (with a prescription). individual that have been previously agreed between the employee and the manager. Salary supplement: granted to all employees in the industrial area and to the administrative employees Benefits (G4-LA2): the benefits package is a employed on the farms. The purpose of the benefit fundamental part of the total compensation. The is to supplement their salaries during the period of benefits package is composed of: absence when they receive unemployment benefits from the National Institute for Social Security (INSS). Medical and dental care: ensures a high level of quality The supplement is paid through the payroll, for up to in the healthcare services provided to employees and 180 days of absence, and the amount corresponds to their relatives, through partnerships with the leading the difference between the employee’s nominal salary companies in the sector, in the markets in which the and the INSS unemployment benefit. company operates. Christmas Hamper: this is distributed to all employees. Life insurance and funeral assistance: covers 100% of employees and his/her spouse and and children. Citrosuco’s approach to people management, Citrosuco pays 50% of the life insurance premium. presented in this chapter, aims to support the execution of our strategy and is aligned with the 38 Transportation: all employees either receive transport company’s objective of creating value for both vouchers or travel to/from work on buses chartered by shareholders and other stakeholders in a virtuous the company. cycle of sustained development. Doing good... by taking care of health, safety and the environment In recent years Citrosuco has been developing an HSE management system (Health, Safety, and the Environment), based on the principal methods of risk management and loss prevention inducing cultural change through leadership training and effective communication, supported by the exchange of experiences and best practices and the applicable legislation. • Occupational health and safety G4-LA6 The Value of Life program is one of the key initiatives Engagement and monitoring: All units have specialists in safety and occupational nursing to guide and engage managers and their teams in the creation of a culture of safe behavior and accident prevention. supporting our management of occupational health One of the methods used for this guidance process and safety. This program involves the implementation is the Safety Dialogue. This initiative promotes the of policies, procedures, controls and training courses, involvement of employees in the discussions about the and is aimed at instilling a culture of safety and health health, safety and environmental issues related to the in employee behavior. It is based on positive concepts safe execution of their daily activities. including, valuing life, proactive attitudes and the safe behavior of every employee. It is applied throughout the organization on a continuous basis. Each employee receives the appropriate personal protective equipment for the proper realization of his/ her activities. The company also undertakes actions During the 13/14 season, we initiated a process of to educate and raise awareness in relation to the progressive analysis, which aims to standardize our correct use of this equipment and the importance of occupational health and safety practices. The main complying with norms and procedures. Every month, a actions taken were the standardization of these specific safety topic is emphasized and fully discussed practices in the industrial, agricultural and logistics with employees. The main challenge is to address the operations and the implementation of a new health health and safety incidents that can occur in day-to and safety management system, designed to monitor day activities. So, when a deviation from procedures all the related topics with a higher degree of precision. or unsafe behavior is identified, the employee involved SUSTAINABILITY REPORT 2013 - 2014 39 .04 SUSTAINABILITY MANAGEMENT Indutores de SSMA SSMA enablers Indutores de SSMA LIDERANÇA LEADERSHIP • Ética Ethics LIDERANÇA • Valores Values •• Estrutura Organization Ética organizacional structure • Valores • Políticas Policies and e • Estrutura programs programas organizacional • Políticas e programas CAPACITAÇÃO TRAINING ensinar • Aprender Learning eand CAPACITAÇÃO teaching • Treinamento •• direcionado Targeted Aprender e ensinar training •• Aspectos Treinamento • comportamentais Behavioral direcionado aspects • Aspectos comportamentais PREVENÇÃO LOSS DE PERDAS PREVENTION COMUNICAÇÃO COMMUNICATION PREVENÇÃO DE PERDAS •COMUNICAÇÃO Effective strategy Estratégia eficaz • Divulgação Adequate communication adequada eficazconstante •• Estratégia Ongoing engagement Relacionamento • Divulgação adequada BEST BOASPRACTICES PRÁTICAS • Relacionamento constante BOAS PRÁTICAS LEGISLATION LEGISLAÇÃO LEGISLAÇÃO undergoes a period of retraining and is then closely and environmental rules and operational standards. In monitored by his/her manager. Additionally, regular addition, once a year the company organizes the Internal educational campaigns are carried out aimed at Week for Accident Prevention (SIPAT), which includes promoting employee health. training courses on safety, food safety, and quality. In the agricultural area, employees are provided with sunscreen and isotonic drinks for hydration, replenishment of mineral salts and energy. Accidents are classified by type and specific indicators are monitored at the leadership meetings. Accidents that result in lost days are promptly informed, analyzed and investigated. All those involved participate in Root cause analysis One of the initiatives implemented in the units is the use of Root Cause Analysis. This consists of an investigation into an incident and the adoption of measures to prevent a re-occurrence. Senior management participates in the action plans aimed at reducing risks. discussions to plan prevention measures These initiatives are accompanied by senior management. Customer relations Dissemination of a health and safety culture: on One of Citrosuco’s main characteristics is the value it places on long-term relations with its customers, many of which have existed for more than fifty years. The majority of these clients are well-known brands, arrival seasonal employees undergo an integration program in which they are informed about the company’s practices in relation to people management, safety 40 who concern themselves with the responsible Citrosuco, as part of it focus on the continuous performance of their supply chains. As such, the improvement of its operations, has maintenance of these long-term relations is based after-sales service area. This area maintains on a convergence of business values and practices constant contact with the customer’s departments between including: for development and quality assurance, exchanging proximity, transparency, ethics and respect for information and adapting products, in accordance employees, the environment and society. with the demand in each market segment. In These values also underlie the certifications is to establish strategic partnerships that can help obtained by Citrosuco. This responsible attitude is to identify opportunities that enable customers to Citrosuco and its clients, an active addition, part of the scope of this area’s activities also demonstrated by the company’s membership of the responsible sourcing platform, Supplier Ethical Data Exchange (SEDEX). The company’s remain competitive. Customer satisfaction plants and port terminals are audited by SEDEX labor Customer satisfaction is continuously monitored standards, health & safety, environment and based on information gathered by the sales team business company’s at trade shows, conferences and during technical orange groves and processing plants are regularly visits to customers, as well as by analyzing the audited by customers from a number of countries. complaints received. The Sales and Quality Control according to its ethics. four-pillar Furthermore, approach: the SUSTAINABILITY REPORT 2013 - 2014 41 .04 SUSTAINABILITY MANAGEMENT areas work together closely and in a coordinated material and courses to instruct the producer manner to ensure that the feedback received by the on the correct use of pesticides. During the next sales area is used to make improvements in all sectors. harvest period training courses will be provided on The main items monitored with customers are: environmental responsibility, combating greening and management practices in the citrus industry. • Customer technical support. • Delivery time. To formalize these arrangements, the fruit purchase/ • Documentation. sale contracts include clauses that require the supplier to commit to comply with Citrosuco’s rules, • Product availability. sector obligations and the regulations established by • Product quality. the Ministry of Agriculture, Livestock and Supply, and Supplier relations the Ministry of Labor. G4-12 G4-LA14 G4-LA15 Suppliers of inputs and services Citrosuco expects its suppliers to adhere to its own values and practices. They must act in an ethical and responsible manner, maintain an emphasis on safety, conform to the environmental requirements and respect human rights. suppliers approach to the management of the suppliers of inputs and services. The aim is to make the contracts more effective in terms of environmental, human rights, labor, social, quality and financial aspects, all of which represent risks for the business. As a Fruit suppliers Fruit The company is developing a more strategic result it will be possible to combine quality, risk are an extremely important stakeholder group in ensuring the supply of fruit to the industrial plants. Approximately 50% of all fruit processed is provided by third-party suppliers. The key priority in managing the relations with these stakeholders is to ensure a responsible and sustainable supply of fruit. For this reason, the company established a specific program for relations with fruit suppliers. This and cost, with possible synergies and economies of scale, and establish closer and more lasting relations with these suppliers. Community relations and development where the company operate G4-15 G4-EC7 G4-SO1 G4-SO2 program covers food safety, the sharing of best Citrosuco seeks to balance value generation practices, compliance with the legislation and the and community development in the localities promotion of sustainable activities to ensure the surrounding its operations. To this end, the company safety, quality and healthiness of the product and seeks to mitigate its impacts, and it also supports the generation of value throughout the supply chain. projects in the areas of education, sports and professional training. In the first two seasons, the program focused on food safety. The program’s initiatives included In the 13/14 season, the company invested R$ 1 the development of the Agrochemical Products million to support social projects, benefiting 241 Application people. The main projects are described in the program, 42 Manual which and was the Good supported by Spraying training following sections. Doing good... is taking care of quality The Agrochemical Products Application Monitoring Program aims to ensure that the pesticides authorized for citrus trees are correctly applied and that the pre-harvest intervals are respected. It is supported by the frequent monitoring of the use of pesticides. To achieve this, the program maintains a constant focus on increasing awareness and providing training for the producers, and on the transfer of technology to promote the safe use of agricultural pesticides, thereby maintaining fruit quality. We provided training to 100% of the fruit suppliers contracted - in all the producing regions - and the results have proved it to be effective. For example, the adoption of flow regulators in spraying, one of the most widely-used methods, reduced the cost of pesticides by 30%, in properties that were already in conformity with the limits established by Citrosuco and the applicable legislation. The producers input information on their use of pesticides into a dedicated internet website and each plot in an orange grove is only approved if the program’s requirements are met. When the fruit is received at the plant, samples are taken and analyzed to identify possible instances of non-compliance. SUSTAINABILITY REPORT 2013 - 2014 43 .04 SUSTAINABILITY MANAGEMENT Fishing Project (Projeto Pescar) This project provides support for the professional training of young people, from 16 to 21 years old, who are in socially vulnerable situations. It aims to promote their integration into the labor market and is based on three development pillars: Citizenship; Learning to Live; and Professional Expertise; reflecting the educational concept underlying the project. The training courses are offered in the municipalities of Catanduva, Matão, Iaras and Santos, in the state of São Paulo, and focus on the areas of administrative services, industrial operations, customer service and tractor maintenance and operation. The course consists of an average of 900 hours of lessons, of which 60% are directed to personal development and citizenship and 40% to the specific area of professional expertise. This methodology was developed by the Fishing Project Foundation (Fundação Projeto Pescar), Citrosuco’s partner in the project, and meets the requirements of the legislation related to apprenticeships, issued by the Ministry of Labor. Fishing Project – testimonial “The Fishing Project has high ambitions, seeking not only to train young people but also to transform their lives, both professionally and personally. When I joined the project, there were challenges to be overcome, and people, teams and departments waiting for me and my fellow apprentices. In my case, at first, I was rather shy and introspective and began to work as an apprentice in the Human and Organizational Development area where I had to interact with employees and answer their questions. After a while, I suddenly realized that all my shyness had disappeared and my self-confidence had increased. To know that there are projects that invest in young people, and, by the way, change and transform their lives, is priceless.” Gabriela de Lima Pereira - graduate of the Fishing Project 2014 Apprentice in agricultural supplies | Citrosuco - Matão-SP PROFISSIONAL PROFISSIONAL PROFESSIONAL EXPERTISE PROFISSIONAL Questões técnico-profissionais Questões técnico-profissionais Technical and professional issues Questões técnico-profissionais LEARNING TO LIVE SABER CONVIVER SABER CONVIVER Social and emotional development SABER CONVIVER Conteúdos socioafetivos Conteúdos socioafetivos ee and inter and intrapersonal Conteúdos socioafetivos e comunicação intere eintrapessoal intrapessoal comunicação communication comunicação inter einter intrapessoal Atividades básicas e prioritárias para Atividades básicas prioritárias para Basic and priority activities for the specific Atividades básicas eeprioritárias para o exercício profissional futuro, aoas o exercício exercício profissional futuro, area ofprofissional professionalfuturo, expertise, working aoao nível de auxiliar, com o desempenho nível de dean auxiliar, com desempenho assistant, developing general skills that auxiliar, com o odesempenho de competências gerais, que permide competências competências gerais, que permienable thegerais, young person to understand que permijovem uma visão tam ao ao tam jovem uma visão que jovem visão dodo que édoé queiné whatao touma expect when participating vivenciado no mercado de trabalho vivenciado nomercado mercado trabalho vivenciado no dede trabalho the labor market Formação integral, comdesenvolvidesenvolviFormação integral, com Comprehensive training, to facilitate the Formação integral, com desenvolvimento de competências consideradas mento debasic competências consideradas development of competences that mento de competências consideradas indispensáveis para queoojovem jovem indispensáveis para que are essential topara enable the indispensáveis que oyoung jovem habilidades atitudes habilidades eeatitudes personconquiste toconquiste acquire skills and develop conquiste habilidades e atitudes próprias dentro mundo dotrabalho trabalho próprias dentro dodo mundo do próprias dentro do mundo do trabalho attitudes in the world of work and in e para exercício de sua cidadania e exercício para exercício de sua cidadania e para de sua cidadania exercising his/her citizenship CIDADÃO CIDADÃO CIDADÃO CITIZENSHIP Sociedade e cidadania Sociedade eand cidadania Sociedade ecitizenship cidadania Society O currículo doFishing Programa Social é desenvolvido temas OO currículo dodo Programa Social Pescar éPescar desenvolvido por currículo Social Pescar éon desenvolvido porpor temas The curriculum ofPrograma the Program is based a number of temas themes which trabalhados interdisciplinarmente, harmonizando teoria e prática, trabalhados interdisciplinarmente, harmonizando teoria e prática, trabalhados harmonizando teoria prática, are studied ininterdisciplinarmente, an interdisciplinary manner, combining theory and epractice, com de conhecimentos específicos que permitam jovem com domínio dede conhecimentos específicos que permitam aoperson jovem com domínio conhecimentos específicos que permitam aoao jovem mastery of domínio specific areas of knowledge, thus enabling the young to take agir, interpretar resultados e assumir impactos por causados agir, resultados e assumir impactos por ele causados agir, interpretar resultados e assumir impactos por ele causados theinterpretar initiative, interpret results and assume the consequences of ele his actions 44 Doing good... is taking care of the community In the 13/14 season, the company initiated a stakeholder engagement project. The project is based on the methodology and technology developed by the Votorantim Institute, which served as a consultant in its implementation. The project has been implemented at two farms, the Constância and São João farms, located in the municipalities of Nova Granada, Onda Verde and Altair, in the interior of the state of São Paulo. It aims to identify and prioritize the critical issues of the stakeholder groups in these municipalities, and then to establish action plans to assess, monitor and mitigate the impacts identified. The overall objective is to enable young people to overcome a difficult social and economic situation, by getting a job in the formal labor market. In the 13/14 season, 81 young people participated in the project, of whom around 80% succeeded in finding a job after completion of their training. Schools Sports Project (Bom de Bola, Bom na Escola) Promotes sport and teamwork and values the school and the family. The project is aimed at children and young people, from 10 to 16 years old, and provides the opportunity to participate in football training sessions five times a week, with the support of a coaching team and access to good facilities. Every year, there are one or two cultural trips, and every three months, an educational talk. .04 SUSTAINABILITY MANAGEMENT In return, the participants are required to attend school regularly and perform well, which they demonstrate by presenting their school reports. In other words, the Greenhouse gas emissions G4-EC2 G4-EN15 G4-EN16 G4-EN17 G4-EN30 project links sport to education, aiming to increase the level of schooling and reduce dropout rates. The project is carried out in Matão (SP) and since it began, in 2002, it has benefited about 110 children and young people each year. Cambuhy Agricultural School This initiative provides supplementary education, The main source of energy for the industrial area is generated by the burning of sugarcane bagasse, which results in a significant reduction in GHG emissions, compared to the use of petroleum-based fuel oil. to children enrolled in the rural schools in the Furthermore, at its plants in Catanduva (SP) and Matão region, in arts, sports, music and caring for (SP), the company has invested in co-generation facilities to provide electrical energy based on the burning of biomass. In the Araras (SP) plant, natural gas is used in the production processes. Although it generates lower GHG emissions compared to fuel oil, it is not a renewable fuel source like biomass. In the case of the farms and the operating units in Bebedouro (SP), Matão FARM (SP) and Limeira (SP), the electrical energy is purchased in the market. the environment. The project is sponsored by Citrosuco and takes place at Cambuhy Farm, which is located in a rural area in the municipality of Matão (SP). It benefits about 50 children. Environmental responsibility G4-EN27 Citrosuco is committed to developing its operations in a sustainable manner. The company invests continually in environmental management, based on guidelines that seek to minimize environmental impacts, and promote risk mitigation and adaptation to climate change. The environmental management system is integrated into the company’s Operational Management System and follows the environmental standard ISO 14001. 46 Citrosuco seeks to minimize the emission of greenhouse gases (GHG), which cause climate change, in its operations, mainly through the use of renewable energy and increases in efficiency. In the agricultural area, the company has implemented initiatives aimed at increasing the efficiency of its operations such as: route planning for tractor operations, employee transportation and truck deliveries in order to reduce fuel consumption; analysis of the soil and the orange tree leaves to formulate the most appropriate nutritional package that minimizes the amount of fertilizers, thus directly impacting GHG emissions. In addition, the use of sophisticated precision-farming Doing good... is taking care of the climate According to reports published by the Intergovernmental Panel on Climate Change (IPCC), agricultural systems sequester and store large reserves of carbon and have a high potential for mitigating greenhouse gas (GHG) emissions. In 2013, the growth of the trees in Citrosuco’s orange groves sequestered an additional 193 thousand metric tons of CO2. Thus, in addition to a management approach which seeks to minimize GHG emissions from the company’s operations, the nature of our business inherently contributes to the mitigation of climate change. techniques that aim to optimize the use of fertilizers and other agrochemicals, is being evaluated. In relation to logistics, the efficiency of the company’s land and sea transportation system has been improved. The tanker-truck fleet, previously consisting of vehicles with 25 thousand liter tanks, is gradually being renewed, replacing them with larger capacity vehicles, with 38 thousand liter tanks. This increases the efficiency of each road trip and has already reduced the total number of trips by approximately 30%. The redesign of the company’s shipping transportation system has resulted in better communications among its port terminals located in Brazil, the United States, Europe and Asia. This enables the ship to travel at a lower average speed, which reduces fuel consumption, and helps to minimize the waiting time for unloading at the destination port. Performance The monitoring and measurement of the GHG emissions in Citrosuco’s operations, from the production of seedlings to the delivery of juice to the port terminals in Europe, are based on the guidelines of the GHG Protocol and the ISO 14040, ISO 14044 and PAS 2050 standards. Other air emissions The emissions of Particulate Matter (PM), NOx and SOx are monitored and managed through the Air Emissions Monitoring Plan. Air samples are collected and analyzed in laboratories that have been accredited by the National Institute of Metrology, Quality and Technology (Inmetro). The results are sent to the environmental regulatory authority and are discussed internally in the Environmental Committee, which is responsible for establishing improvement plans. Performance Over the last few seasons, the company has invested more than US$4 million in upgrading the Matão processing plant and the improvement of SUSTAINABILITY REPORT 2013 - 2014 47 .04 SUSTAINABILITY GESTÃO DA MANAGEMENT SUSTENTABILIDADE Total greenhouse emissions Emissões totais degas Gases de Efeito Estufa (thousand metric tons of CO2eq) (mil tonCO2eq) 21 21 Scope 11 == 283 Escopo 283 Scope 22 == 21 Escopo 21 283 2013 air-emission control systems, with the e no aprimoramento dos sistemas de installation controle de of gas-washing equipment that reduces particulate emissões atmosféricas, com a instalação de lavaemissions by up to 20%. dor de gases, equipamento que permite a redução de até 20% das emissões de particulados. Rational use of land Uso racional da terra Citrosuco has taken steps to increase the yield per hectare of its groves and, consequently, has reduced A Citrosuco tem adotado medidas para elevar a the need to expand the planted area. In this way, produtividade por hectare dos pomares e, consethe company seeks to minimize its environmental quentemente, reduzir a necessidade de ampliar a impact, while increasing its production potential, área plantada. Assim, a Companhia busca minimiimproving efficiency and reducing costs. zar seu impacto ambiental, ampliar seu potencial produtivo e ganhar eficiência e redução de custos. Performance The company has maintained the size of the planted area Desempenho and increased productivity by adopting best agricultural Manutenção da área plantada e aumento da produpractices, increasing the tree density in the groves by tividade por adoção das melhores práticas agrícola planting additional seedlings. e adensamento dos pomares com novos plantios. 48 48 The new planted areas have a tree density of upaté to 40% Os novos plantios possuem adensamento 40% higher than the old groves. superior em relação aos pomares antigos. Energy and efficiency Matriz emix eficiência energética G4-EN3 G4-EN4 G4-EN3 G4-EN4 Citrosuco’s seeks to achieve a clean energy mix, based A Citrosuco persegue uma matriz energética limpa, on the use of renewable energy sources, and increased estruturada a partir do uso de fontes renováveis energy efficiency. The company has already made good de energia e aumento de sua eficiência energética progress in replacing fossil fuels by renewable sources. e tem avançado na substituição de combustíveis fósseis por fontes renováveis. During each planning cycle, the energy mix is reviewed in the search for viable ways to increase the proportion A cada ciclo de planejamento, a matriz energética of energy from renewable sources. The company é revisada, buscando viabilizar o aumento das fonevaluates the available alternatives, such as new sources tes renováveis. Alternativas como novas fontes de of biomass, new technologies and improvements to biomassa, novas tecnologias e melhorias nos proprocesses and adopts those which it considers viable cessos são avaliadas e adotadas conforme viabilifrom economic, social and environmental perspectives. dade econômica, social e ambiental. Entre as alterOne of these alternatives adopted recently is the burning. nativas adotadas recentemente está a queima de a. Preparation of cost and productivity reports, fruit quality analysis and adjustments to the processes. 1. Planting of groves Preparation and planting according to the soil characteristics, climate and the combination of variety and rootstock, aiming for a high yield potential. 4. Learning and improvement a. Harvest scheduled according to fruit ripening and customer specification. 3. Harversting AGRICULTURAL PROCESSES 2. Tree management and treatment a. Leaf and soil analysis to formulate the nutrient and soil correction program for the planting and maintenance of the groves. d. Controlled application of pesticides. c. Monitoring of pest and disease levels. b. Application of fertilizers and soil correctives based on the analysis. of orange-tree wood chips. For the next season the sources varying according to the availability of sugarcane company is evaluating the installation of a new turbine bagasse. Over the recent seasons there has been a in the Matão plant, with a generating capacity of 2 shortage of sugarcane bagasse and so the consumption MW, based on a reduction in steam pressure. of natural gas has increased. The company’s energy consumption is expected to remain To reduce the company’s dependence on sugarcane stable. The renewable portion of the current energy mix bagasse, and ensure a regular supply of biomass, has a high degree of dependence on weather conditions, Citrosuco has invested in an experimental seedling which results in the portion from non-renewable energy nursery that is conducting field trials on sugar cane for power generation, with a view to the formation of an area dedicated to biomass production. The company plans to consume 120 thousand metric tons of this type of biomass during the 16/17 season. The company has also focused on programs to increase energy efficiency. One of the main achievements during the current season was the improvement of the gas-flaring system. Performance In 2013, the portion of renewable energy sources in Citrosuco’s energy mix was 61%. The non-renewable portion of the energy mix was due mainly to the SUSTAINABILITY REPORT 2013 - 2014 49 .04 SUSTAINABILITY MANAGEMENT burning of natural gas in the industrial processes, consumption of fuel in the logistic operations and on the farms and the consumption of purchased electrical energy. Performance Of the total amount of solid waste produced in the company’s operations, 64% is reused internally, for composting or other uses, and 35% is ash that is stored internally. The remaining 1%, which is mainly organic waste from restaurants and bathrooms, is disposed of Energy mix in several ways: in controlled landfills; by incineration for energy generation; and, in the case of plastic, glass, paper and metal, through recycling at cooperatives in 39% the regions where the company operates. Non-renewable 61% Renewable Of the total solid waste produced less than 1% is classified as hazardous. This is, in general, composed of oil-contaminated materials from 2013 the maintenance workshops for machinery and vehicles. This contaminated material and the empty Electrical energy (MWh) - 13/14 season in three stages before disposal, are directed to specialized companies which are accredited for the proper treatment of this type of waste. 300.000 281,256 200.000 100.000 packaging from the pesticides, which are washed 99,820 Energy from cogeneration Energy consumed - Water and effluent management G4-EN8 G4-EN10 The water consumption in the industrial production processes is monitored through the Water Use Reduction Program. The program focuses on improving processes to increase water efficiency and Waste management Waste management in the company’s operations is integrated with other aspects of environmental management. The industrial processes rationalize the use of water resources by reusing the water extracted from the fruit in the juice concentration process. This water, known as plant condensate, is used for The nature of the business means that waste steam generation, washing fruits and the cleaning generation is low since 100% of the solids from of equipment and plant facilities, thus reducing the the oranges themselves are used to produce withdrawal of fresh water. orange juice and orange-based ingredients. 50 reuse, thus reducing the industrial area’s consumption. At the Matão (SP) plant part of the water leaving The waste generated in the agricultural and the effluent treatment facility is reused for industrial processes is collected, separated by washing floors and watering gardens. The port type and then each type is treated according to terminals also exploit the potential to reduce water its classification. consumption and, at the Santos terminal (SP). in Doing good... by reusing waste The ash, from the burning of biomass, is mixed with the biological sludge from the effluent treatment plant and composted. The resulting compost is used in the groves as a form of organic fertilizer. In the 13/14 season around 44 thousand metric tons of organic fertilizer were produced and used on company-owned farms or donated to local farmers. addition to capturing rainwater, a water reuse collected for use in vehicle washing. system had been implemented. Together, these measures supply a volume of treated water that Liquid effluents is sufficient to meet 20% of the water demand The company properly handles 100% of its liquid during the season. effluents using two treatment systems, as follows: In the agricultural area, as concerns the productive Effluent Treatment Plant (ETP): the effluents activities, 29% of the groves are irrigated, and treated in the ETP are discharged into the public 99% of the water is supplied by surface sources, sewage system, or the adjacent water body, with a under licenses issued by the local authorities. The quality that is higher than than required by law or groves are irrigated using the drip system, which is that of the receiving water body. All the procedures considered to be one of the most efficient methods adopted in this process complies with the limits available because it reduces water and fertilizer pre-established by the relevant legislation, and the consumption by delivering them, in a diluted parameters specified by the environmental agency form, slowly and directly to the orange tree’s root of the state of São Paulo (Cetesb). system, such that the water enters the soil without evaporating or draining away. The rational use of Fertigation: this is an alternative treatment water is a basic premise of irrigation. The system system for the effluent generated in orange juice only uses the exact amount of water necessary to production. This effluent, which is 90% water, meet the tree’s needs during specific periods during originating mainly from the washing of the fruit, the year. Moreover, on some farms, rainwater is is free from contamination by heavy metals, and is SUSTAINABILITY REPORT 2013 - 2014 51 .04 GESTÃO DA SUSTAINABILITY SUSTENTABILIDADE MANAGEMENT used in the irrigation of other types of plants that, in a natural process, effectively treat the effluent de culturas alternativas que, em processo natural, by absorbing nutrients and returning the water to realizam o tratamento desse efluente, absorvendo the soil. os nutrientes de sua composição e devolvendo a Desempenho Performance água para o solo. de chuva eand tratamento de efluentes. collection effluent treatment. Total de retirada de água water withdrawn by por fonte (safra 13/14) source (13/14 season) Águas (rios e lagos) Surfacesuperficiais water (rivers and lakes) Água subterrânea industrial Industrial groundwater Água subterrânea para purposes outros fins Groundwater for other Água dewater reúso Reused Águas de empresas de abastecimento Water-supply companies 52 Na safra da demanda industrial de During the13/14, 13/1428% season, 28% of the industrial água foi for suprida porwas meio do by reúso águaofgerada demand water met the da reuse water a partir do from condensado vegetal, captaçãorainwater de água generated the plant condensate, 4% 5% 10% 80% 1% .05 HEALTHINESS SUSTAINABILITY REPORT 2013 - 2014 53 .05 HEALTHINESS Citrosuco is responsible for, and committed to, healthiness and well-being, that is, to provide the market with a high quality, healthy orange juice that has a low level of social and environmental impacts. For this reason, the company has entered into a partnership with the Department for Food and Nutrition of the Faculty of Pharmaceutical Sciences of the State University of São Paulo (UNESP). It is supporting the development of research to evaluate the nutritional and functional properties of the regular consumption of orange juice. Some of the main lines of research being developed are as follows: • Pharmacokinetics and bioavailability of the phytochemical compounds of orange juice. • Immunological and anti-oxidant properties of orange juice and its flavonoid compounds*. • Protective action of orange juice in relation to molecular and biochemical markers related to chronic diseases (Hepatitis C). *Flavonoids: These are chemical compounds that occur naturally and abundantly in the plant kingdom. They have anti-inflammatory, anti-hemorrhagic and anti-allergic properties, but it is their anti-oxidant property, which combats free radicals, that is their most important attribute. 54 • Effect of orange juice on the energy regulation metabolism and nutrient metabolism (satiety). with an increased level of satiety and the stimulation of the body’s anti-oxidant and anti-inflammatory activities, conditions which, when combined, act as a • Effect of orange juice on physical activity. Orange juice is an excellent source of fiber, vitamins, minerals and bio-active compounds, essential for a healthy diet. The research indicates that the regular consumption of orange juice does not contribute to protective factor against the onset of inflammatory and cardiovascular diseases and diabetes. Certifications weight gain and that it improves cholesterol levels The following section provides information on the and the glycemic profile, strengthens the consumer’s certifications obtained by the company, attesting immune system and reduces blood pressure and the to the quality and sustainable performance of resistance to insulin*. Its consumption is associated its operations. *Insulin: Insulin resistance is a precondition of the metabolic syndrome that can increase the risk of health problems such as: cardiovascular disease, hypertension, type 2 diabetes and an increased propensity for abdominal obesity. SUSTAINABILITY REPORT 2013 - 2014 55 .05 HEALTHINESS Certifications 56 Standard Description FSSC 22000 Food Safety System Certification Certification of food safety management systems, in the whole production chain, to ensure that the food is safe for human consumption. It was developed for industries that process or manufacture perishable products, from animal or vegetable origin, and where the product or its ingredients have a long shelf-life. Rainforest Alliance Certified Social and environmental certification that attests that producers respect biodiversity and the fruit-pickers involved in the process. In Brazil, it is audited by the Institute for Forest and Agricultural Management and Certification (Imaflora). GMP + Standards to ensure the safety of animal feed throughout the production chain. This certification is focused on the Citrus Pulp Pellets (CPP) product, destined for animal feed. SGF/IRMA Sure-Global-Fair / International Raw Material Assurance The SGF/IRMA label attests that, by means of a voluntary control system, the suppliers of raw materials for European industries meet the required conditions, especially in relation to hygiene and to processing. AIB International (American Institute of Baking) The consolidated standards of AIB International are key requirements that the company must meet for the safe processing of food. Halal The certificate attests that the process and the ingredients used in the manufacture of food are in accordance with the rules dictated by the Koran and, therefore, consumption of the product is allowed by Islam. Total units certified 8 Units certified Port terminals in Antwerp and Ghent, both in Belgium, the port terminal in Santos (SP), Warehouse 29 in the port terminal in Santos (SP), the processing plants in Matão (SP), Catanduva (SP), Araras (SP) and Florida (USA). Constância Farm. 1 5 4 4 4 The plants in Matão (SP), Catanduva (SP), Araras (SP), the port terminal in Santos (SP) and the plant in Florida (USA). The plants in Matão (SP), Catanduva (SP), Araras (SP) and Florida (USA). The plants in Matão (SP), Catanduva (SP), Araras (SP) and Florida (USA). The plants in Matão (SP), Catanduva (SP), Araras (SP) and Florida (USA). Certifications Standard Description Total units certified Units certified Kosher The certification attests that the process and the ingredients used in the manufacture of food are in accordance with the rules governing the orthodox Jewish diet. 4 The plants in Matão (SP), Catanduva (SP), Araras (SP) and Florida (USA). ISO 9001 Quality management. 1 Port terminal of Santos (SP). ISO 14001 Environmental management. 1 Port terminal of Santos (SP). OHSAS 18001 Occupational safety and health management. 1 Port terminal of Santos (SP). 57 .05 HEALTHINESS Doing good... by drinking orange juice The regular consumption of orange juice is an important ally for those seeking a healthy lifestyle, since it provides the body with important nutritional and functional properties, such as: Benefits for your health: • Feeling of satiety • No relations with weight gain or obesity • Reduces the risk of cardiovascular diseases Percentage daily values contained in 230 ml of whole orange juice* • 100% Vitamin C • Reduces the risk of diabetes • Improved anti-oxidant capacity • Anti-inflammatory p roperties • 18% Calcium • 13% Folic acid • 12% Carbohydrates • 10% Potassium • 6% Calories (*) % of daily reference values based on a 2,000k cal diet. Your daily values may be higher or lower depending on your calorie requirements. 58 Information sources: http://conference.ifas.ufl.edu/citrus13/presentations/Thursday/AM/0940%20Cesar.pdf http://www.revistanutrire.org.br/files/v36nSuplemento/v36suplemento.pdf .06 AUDIT OPINION .06 AUDIT OPINION .06 AUDITORS’ REPORT Independent auditors’ limited assurance report on the sustainability information included in the Sustainability Report for 2013-2014 To the Management Citrosuco S.A. Agroindústria Matão - SP Introduction We have been engaged by Citrosuco S.A. Agroindústria (“Company”) to present our limited assurance report on the compilation of the sustainability information included in the Sustainability Report for 2013-2014 of Citrosuco S.A. Agroindústria for the year ended December 31, 2014. Management’s responsibility The management of Citrosuco S.A. Agroindústria is responsible for the preparation and fair presentation of the information included in the Sustainability Report for 2013-2014 in accordance with the guidelines of the Global Reporting Initiative (GRI-G4) and for such internal control as management determines is necessary to enable the preparation of information free from material misstatement, whether due to fraud or error. 60 Auditor’s responsibility to sustainability, taken as a whole, might present Our responsibility is to express a conclusion on the information related to sustainability included in The significant misstatements. procedures selected are based on our the Sustainability Report for 2013-2014, based on our limited assurance engagement carried out in accordance with Technical Communication CTO 01, “Issuance of an Assurance Report Related to Sustainability and Social Responsibility”, issued by the Brazilian Federal Accounting Council (CFC), based on the Brazilian standard NBC TO 3000, “Assurance Engagements Other than Audit and Review”, also issued by the CFC, which is equivalent to the international standard ISAE 3000, “Assurance engagements other than audits or reviews of historical financial information”, issued by the International Auditing and Assurance Standards Board (IAASB). Those standards require that we comply with ethical requirements, including independence requirements, and perform our engagement to obtain limited assurance that the social and environmental information included in understanding of the aspects related to the the Sustainability Report for 2013-2014, taken as a whole, is free from material misstatement. and the procedures adopted for the compilation of compilation and presentation of the information related to sustainability included in the Sustainability Report for 2013-2014, other circumstances of the engagement and our analysis of the areas in which significant misstatements might exist. The following procedures were adopted: (a) planning the work, taking into consideration the materiality and the volume of quantitative and qualitative information and the operating and internal control systems that were used to prepare the information related to sustainability included in the Sustainability Report for 2013-2014 of Citrosuco S.A. Agroindústria; (b) understanding the calculation methodology indicators through interviews with the managers responsible for the preparation of the information; A limited assurance engagement conducted in accordance with the Brazilian standard NBC TO 3000 and ISAE 3000 mainly consists in making inquiries of management and other professionals of the Company, involved in the preparation of the information, as well as applying analytical procedures to obtain evidence that allows us to issue a limited assurance conclusion on the information, taken as a whole. A limited assurance engagement also requires the performance of additional procedures when the independent auditor becomes aware of matters that lead him to believe that the information related (c) interviews with the managers responsible for the information of the corporate unit located in the city of Matão, State of São Paulo, and for the data control of the other units; (d) applying analytical procedures to quantitative information and making inquiries regarding the qualitative information and its correlation with the indicators disclosed in the information related to sustainability included in the Sustainability Report for 2013-2014; SUSTAINABILITY REPORT 2013 - 2014 61 .06 AUDIT OPINION (e) obtaining evidence about the most significant GRI-G4 indicators included in the Sustainability Report for 2013-2014 and presented in the “GRI Index”; and (f) comparing the financial indicators with the financial statements and/or accounting records. The limited assurance engagement also included tests to assess compliance with the guidelines and criteria of the structure applied in the preparation of the information related to sustainability, included in the Sustainability Report for 2013-2014. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our limited assurance conclusion. Scope and limitations The procedures applied in a limited assurance engagement are substantially less detailed than those applied in a reasonable assurance engagement, the objective of which is the issue of an opinion on the information related to sustainability included in the Sustainability Report for 2013-2014. Consequently, we are not able to obtain reasonable assurance that we would become aware of all significant matters that might be identified in an assurance engagement, the objective of which is the issue of an opinion. If we had performed an engagement with the objective of issuing an opinion, we might have identified other matters and possible misstatements in the information related to sustainability included in the Sustainability Report for 2013-2014. Therefore, we do not express an opinion on this information. 62 Non-financial data are subject to more inherent limitations than financial data, due to the nature and diversity of the methods used to determine, calculate and estimate these data. Qualitative interpretations of the relevance, materiality and accuracy of the data are subject to individual assumptions and judgments. Furthermore, we did not consider in our engagement the data reported for prior years, nor future projections and goals. Conclusion Based on the procedures performed, described herein, no matter has come to our attention that causes us to believe that the information related to sustainability included in the Sustainability Report for 2013-2014 of Citrosuco S.A. Agroindústria has not been compiled, in all material respects, in accordance with the guidelines of the Global Reporting Initiative (GRI-G4). São Paulo, October 23, 2015 PricewaterhouseCoopers Contadores Públicos Ltda. CRC 2SP023.173/O-4 André Pannunzio Candido Oliveira Contador CRC 1SP-196603/O-1 .07 GRI CONTENT INDEX SUSTAINABILITY REPORT 2013 - 2014 63 .07 GRI CONTENT INDEX .07 GRI INDEX GRI Indicators Direct Response Profile 64 1 Provide a statement from the most senior decision-maker of the organization about the relevance of sustainability to the Pg. 9 organization 2 Description of key impacts, risks and opportunities Pgs. 19 to 52 3 Name of the organization Citrosuco 4 Primary brands, products and/or services Pgs. 14 and 15 5 Location of the organization's headquarters Pg. 70 6 Number of countries where the organization operates Pg. 13 7 Nature of ownership and legal form Citrosuco is a 100% closed-capital organization 8 Markets served Pg. 13 9 Scale of the organization Pgs. 13 and 33 10 Employees by type of contract and gender Pg. 34 11 Percentage of employees covered by collective bargaining Not reported 12 Description of the company's supply chain Pg. 42 13 Significant changes in the company's structure during the Pg. 17 reporting period 14 Explanation of whether and how the organization applies The company has a strict risk management the precautionary principle system, which is described on page 27 15 Externally developed charters, principles or other initiatives, of an economic, environmental and social character, which Pgs. 30, and 42 to 46 the organization subscribes to or endorses 16 Participations in associations and/or national/international advocacy organizations in which the organization: holds a The company is a founding member of CitrusBR, positions in bodies responsible for corporate governance; the sector trade association, and participates participates in projects or committees; provides substantial in its activities funding beyond routine membership dues Brazilian-owned 17 List of entities included in the financial statements The financial statements are not included in this report 18 Process for defining report content and boundaries Pg. 8 19 List of material issues identified in the process to define the Pg. 8 report content 20 For each material aspect inform the boundary within the These aspects are relevant to the company's organization strategy for business continuity and growth 21 For each material aspect inform the boundary outside the An external consultation process has not yet organization been conducted but is scheduled to occur in future reports 22 Effects of restatements of information provided in previous There were no restatements reports 23 Significant changes compared to previous years regarding the There were no changes scope of the aspects presented 24 List of stakeholder groups engaged by the organization 25 Basis for identification and selection of stakeholders for The stakeholders presented were selected based engagement on their relevance and impact (suffered and exercised) for the company's management and performance 26 Approach to stakeholder engagement and frequency of The approach and the schedule of engagement engagement and relations are presented in the chapter on "Stakeholder Relations" 27 Key topics raised during 27 stakeholder engagement and The chapter on "Stakeholder Relations" aims measures adopted by the company to address them to present the topics of greatest interest to each stakeholder group, from the perspective of the company, and provide information on the business in relation to them 28 Reporting period July 1st, 2013 to June 30th, 2014 29 Date of most recent previous report July 1st, 2012 to June 30th, 2013 (the report was not published) The chapter on "Stakeholder relations" describes Citrosuco's engagement practices with its main stakeholders SUSTAINABILITY REPORT 2013 - 2014 65 .07 GRI CONTENT INDEX 30 Reporting cycle Annual 31 Contact point for questions regarding the report or its Pg. 70 content 32 Report the ‘in accordance’ option chosen by the organization Pg. 8 (core or comprehensive) 33 Report on the organization’s current policy and practices with The report has been externally assured. The regard to seeking external assurance auditor’s opinion and the scope of the assurance are in the chapter containing the “Audit Opinion” 56 Describe the organization’s values, principles, standards and Pg. 24 norms of behavior, such as codes of conduct or ethics Economic Performance Aspect Economic performance EC2 Financial implications and other risks and opportunities for Pg. 46 the organization’s activities due to climate change Aspect Market presence EC5 Ratios of standard entry level wage by gender compared to local minimum wage in significant location of operation Not reported Aspect Indirect economic impacts EC7 Development and impact of infrastructure investments and Pg. 42 services supported Aspect Purchase practices EC9 Proportion of spending on local suppliers at significant Not reported locations of operation Environmental Performance 66 Aspect Energy EN3 Energy consumption within the organization Pg. 48 EN4 Energy consumption outside the organization Pg. 48 Aspect Water EN8 Total water withdrawal by source EN9 Water sources significantly affected by withdrawal of Not reported water EN10 Percentage and total volume of water recycled and reused Aspect Emissions EN15 Direct greenhouse gas (GHG) emissions (Scope 1) Pg. 46 EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2) Pg. 46 EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3) Pg. 46 Aspect Effluents and waste EN22 Total water discharge by quality and destination Not reported EN23 Total weight of waste by type and disposal method Not reported Aspect Products and services EN27 Extent of impact mitigation of environmental impacts of Pg. 46 products and services Pg. 50 Pg. 50 Aspect Transport EN30 Significant environmental impacts of transporting goods and materials used for the organization’s operations, and Pg. 46 transporting members of the workforce Social Performance: Labor Practices and Decent Work Aspect Employment LA1 Total number and rates of new employee hires and employee Pg. 34 turnover by age group, gender and region LA2 Benefits provided to full-time employees that are not offered to seasonal or part-time employees, by significant locations Pg. 38 of operation Aspect Occupational health and safety LA6 Type of injury and rates of injury, Playstation diseases, lost days, and absenteeism and total number of work-related Pg. 39 fatalities by region and gender Aspect Training and education LA9 Average hours of training per year per employee, by gender Pg. 35 and employee category LA10 Program for skills management and life-long learning that support the continued employability of employees and assist Pg. 35 them in preparing for career endings LA11 Percentage of employees receiving regular performance and Not reported career development reviews, by gender and employee category Aspect Diversity and equal opportunity LA12 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority Not reported group and other indicators of diversity Aspect Supplier assessment for labor practices LA14 Percentage of new suppliers that were screened using labor Pg. 42 practices criteria LA15 Significant actual and potential negative impacts for labor Pg. 42 practices in the supply chain and actions taken Social Development: Human Rights Aspect Non-discrimination HR3 Total number of incidents of discrimination and corrective There were no cases of discrimination in the actions taken period Aspect Child labor HR5 Operations and suppliers identified as having significant No operations were identified as having a risk for child labor, and measures taken to contribute to the significant risk for the occurrence of child labor effective elimination of child labor Aspect Forced or compulsory labor HR6 Operations and suppliers identified as having a significant No operations were identified as having a risk for incidents of forced labor or compulsory labor, and significant risk for the occurrence of forced or measures to contribute to the elimination of forced or compulsory labor compulsory labor SUSTAINABILITY REPORT 2013 - 2014 67 .07 GRI CONTENT INDEX Aspect Assessment HR9 Total number and percentage of operations that have been 100% of our operations have undergone subject to human rights reviews or impacts assessments assessments based on human rights criteria, in line with the guidelines of SEDEX SMETA 4-Pillar, ISO 14001, Conama 308, Rainforest Alliance, and internal assessments Social Performance: Society Aspect Local community SO1 Percentage of operations with implemented local community engagement, impact assessments, and developments Pg. 42 programs SO2 Operations with actual or potential significant negative Pg. 42 impacts on local communities Aspect Corruption SO5 Confirmed incidents of corruption and actions taken Aspect Anti-competitive behavior SO7 Total number of legal actions for anti-competitive behavior, The company tales action to be in compliance anti-trust, and monopoly practices and their outcomes with the applicable legislation in order to avoid violations of these norms and incidents of misconduct that could result in anti-competitive, trust or monopoly practices. If the company identifies any such incident it will take all the necessary steps to remedy the violation in order to be in compliance with the legislation. In 2014 there were no incidents of this type No incidents of corruption were identified in the period Social Performance: Product Responsibility 68 Aspect Customer health and safety PR1 Percentage of significant product and service categories 100% of our products undergo this type for which health and safety impacts are assessed for of evaluation. Our initiatives to promote improvement healthiness are described in the chapter on “Healthiness” .08 ACKNOWLEDGMENTS SUSTAINABILITY REPORT 2013 - 2014 69 .08 ACKNOWLEDGMENTS .08 ACKNOWLEDGMENTS Head Office G4-5 Citrosuco S.A. Agroindústria Rua João Pessoa, 305 - Centro 15990 902 – Matão - SP – Brazil Visual creation, graphic design and layout RICCA RI Coordination Images Citrosuco Citrosuco archives www.citrosuco.com.br Depositphotos image database Editorial content, review and GRI consulting We would like to thank all Citrosuco employees for their contributions, dedication and teamwork in making this RICCA RI report possible. http://www.riccari.com English translation Contact for the report: [email protected] Richard Wightwick 70 G4-31 SUSTAINABILITY REPORT 2013 - 2014 71