Sustainability
Transcription
Sustainability
Report Su stain a bility 2012 04 Introduction Suzano Papel e Celulose 06 Message from Management Passion 11 Profile 13 Mission, Vision and Values 14 Location map 16 Key indicators 18 Awards Global Vision 21 Strategy 24 Management model and tools Excellence 27 Corporate governance 31 Risk management Entrepreneurship 33 Operating performance 33 Forestry 36 Pulp 39 Paper 42 Biotechnology 44 Economic and financial performance 47 Capital markets Riverside vegetation in the transition area between the Amazon and Cerrado biomes 2 Employee Lucas Messa da Silva, at the Limeira Unit (São Paulo) Integrity and Safety 49 Commitment to employees Quality Relations 69 Commitment to society 74 Suppliers 76 Clients Social and Environmental Responsibility 79 Commitment to communities 86 Ecofuture Leadership 89 Environment 104 GRI Supplement 106 GRI Index 112 Corporate Information 3 Sustenta bilidade R e p o r t 2012 Introduction F o r t h e s e c o n d n o n - c o n s e c u t i v e y e a r, t h i s r e p o r t is based on our values of Passion, Leadership, Excellence, Entrepreneurship, Global Vision, I n t e g r i t y, S a f e t y, Q u a l i t y R e l a t i o n s h i p s a n d S o c i a l a n d E n v i r o n m e n t a l R e s p o n s i b i l i t y. T hrough this Sustainability Report – prepared for the seventh compliance with GRI – G3 guidelines. consecutive year in accordance with the Global Reporting Initiative (3.9, 3.13) (GRI), version G3 framework – we provide to all our stakeholders report, we used data from our operations, information about our accomplishments, achievements, challenges and industrial units, forest areas and companies the results obtained in 2012. (3.1, 3.3, 3.9). in Brazil, as well as our commercial offices As in the case of the previous document, which reported data and subsidiaries abroad. The scope of for 2011 and was published in May 2012, this report complies with this edition is the same as of the previous Application Level B and is organized into eight major chapters that report for 2011 that was published in mirror our Values: Passion (Profile, Mission, Vision and Values, Key May 2012. The economic and financial indicators and awards), Global Vision (Strategy and Management model information is described in accordance and tools), Excellence (Corporate governance and Risk management), with applicable Brazilian standards and was Entrepreneurship (Operating performance, Economic and financial audited by KPMG Auditores. performance and Capital markets), Integrity and Safety (Commitment 3.7, 3.8, 3.9, 3.10, 3.11, 3.13). to employees), Quality Relationships (Commitment to Society, Suppliers (2.9, 3.2, 3.3, 3.6, The content of this report is based on and Clients), Social and Environmental Responsibility (Commitment to responses to 15 of the 40 questionnaires communities) and Leadership (Environment). (3.2) we sent in 2011 to employees, clients, Similarly, the scope and method of preparation of the previous suppliers and people in the communities Sustainability Report were maintained, i.e. the information and surrounding our units, as well as the results figures reported here refer to our operations, industrial units, forest of the systematization of contacts and areas and offices in Brazil and abroad. requirements mentioned in the tools for (3.6, 3.7, 3.8, 3.10, 3.11) The economic and financial information presented herein is in 4 To define the content of this dialogue with our stakeholders. One of accordance with applicable Brazilian standards and was audited by these tools is the book “Suzano em Campo” KPMG Auditores Independentes. The report itself was audited by (Suzano in the Field), which includes the Bureau Veritas Certification, which issued the technical report on demands from communities surrounding our S u z a n o P u l p a n d Pa p e r forest units; customer satisfaction surveys; Instrument for Characterizing Traditional Communities (ICCT), through which we identify communities with traditional characteristics located in areas surrounding our operations; and the Social Dialogue, which comprises the discussion forums and actions in the communities of the cities of São Paulo state. This information will be complemented with the inclusion of new stakeholders and their main topics of interest with regard to our company, as well as an expansion of the themes proposed by the internal stakeholders: the company’s global vision and strategy. The result of all this effort was the following: (3.5, 4.14, 4.15, 4.16, 4.17) Stakeholder group Communities Clients Suppliers Themes of interest Our practices to preserve biodiversity • Environment Use of water by our forests and plants • Environment Eucalyptus planting/food safety at sites • Commitment to communities Our care for the environment and communities • Commitment to Society and the Environment Our certifications • Certifications Our growth strategy and impacts on the production chain • Strategy Our growth strategy and relationship with strategic stakeholders • Suppliers • Location map and Maranhão Unit Our practices to preserve biodiversity • Environment Use of water by our forests and plants • Environment Social projects implemented in the community • Commitment to Communities Nossa estratégia de crescimento e relacionamento com públicos estratégicos, especialmente colaboradores • Strategy, commitment to employees • Management model and tools • Commitment to employees • Commitment to Communities Our growth strategy and leverage Wood supply to the Imperatriz Unit (Maranhão) • Message from management • Key indicators • Strategy • Operating performance - Forestry • Economic and financial performance Our growth strategy and leverage Wood supply to the Imperatriz Unit (Maranhão) • Message from management • Key indicators • Strategy • Operating performance - Forestry • Economic and financial performance Employees Media (*) Market Analysts (*) Chapter in the Report addressing the theme (*) Information obtained at meetings to present the quarterly results of the company to market analysts and requests from media. In order to clarify any doubts resulting from this document, anyone interested may contact us through the Suzano Answers Hotline (0800-0959093 and [email protected]. br) or by sending an email to Corporate Communication: [email protected] or Investor Relations: [email protected] 5 Sustenta bilidade R e p o r t 6 2012 S u z a n o P u l p a n d Pa p e r Message from Management (1.1; 1.2;4.9) I Financial operational stability, which was reflected in the lower cash cost attained package n 2012, our industry faced major turbulence due to the global macroeconomic scenario, which slowed the pace of recovery in paper and pulp prices and forced us to concentrate our efforts on maintaining in the fourth quarter. In this regard, we intensified our efforts to reduce costs and continued our biotechnological research, which will bring us real productivity gains through FuturaGene. We also focused efforts on structuring an adequate financial protection package, which gave us a significant liquidity horizon. This package also included the R$3.5 billion loan from the Brazilian Development Bank (BNDES) and export credit agencies for the Maranhão project. We also received a firm offer for divesting non-core assets, such as the 17% interest in the Capim Branco Hydroelectric project for R$320 million. protection structured, providing a significant liquidity horizon. Through these measures, we ensured that all the investments planned for the Imperatriz Unit were made without the need for refinancing or new funding.Seguimos o processo de construção dessa fábrica, que adicionará 1,5 milhão de toneladas anual na nossa capacidade de produção de celulose, intensificando esforços para que a obra seja entregue no último trimestre de 2013, como anteriormente previsto. Construction status at Imperatriz (Maranhão), november 2012 7 Sustenta bilidade R e p o r t 2012 Construction is progressing on this plant, which will add 1.5 million tons a year to our pulp production capacity, and we are intensifying our efforts to ensure the project’s delivery by year-end 2013, as planned. We took other parallel actions during the year. We intensified our efforts in the Productivity Project to reduce costs, which has brought results on several administrative and production fronts and should be expanded in the industrial and forestry areas in 2013. We ended 2012 with pulp and paper sales of 3.2 million tons, 1.5% more than in the previous year. Net revenue amounted to R$5.2 billion while EBITDA was R$1.3 billion. We ended the year with a net loss of R$182 million due to the foreign exchange variation event was our participation in the Southern impact of R$462 million on our debt, but with a cash effect only Bahia Committee, led by the State’s Public upon the maturity or amortization of debt. We are aware that the Prosecutor, which effectively dismantled foundation of our sustainable growth goes beyond mere gains in the illegal charcoal trade and consequently competitiveness, but also involves the quality of our relations and our the pillaging and burning of timber in the social and environmental actions. On this front, another important region. This initiative, which was created by various local stakeholders, was also aligned with our commitment to implementing income-generation projects for communities throughout the region. In this regard, we positioned our commitment to sustainability at the essence of its foundation and our actions at the root cause, while strengthening people through opportunities for development. Imperatriz Unit: annual increase of 1.5 million tons of pulp. 8 S u z a n o P u l p a n d Pa p e r Strict capex discipline: growth with profitability and focus on structural competitiveness. Looking ahead to the major challenges in the upcoming year, we have defined our priorities for 2013, such as maintaining rigorous control of capital expenditure (i.e., growth with profitability) and always aligning our structural competitiveness with focused, transparent and of course competitive management, with the aim of extracting the maximum value from our existing investments and assets. We thank our clients, shareholders, suppliers, communities where we operate, partners in general and especially our employees, who day after day work with commitment and passion to help build on our history of 89 years of innovation and operational excellence. The Management Eucalyptus leaves in preparation for genetic transformation 9 Relatório de 10 Sustenta bilidade 2012 S u z a n o P u l p a n d Pa p e r Passion Profile Our forestry base spans nearly 819,000 hectares, with forests planted on 354,000 hectares. (2.9) With 89 years of operations characterized by innovation and pioneering initiatives, we are a forestry company dedicated to the pulp, paper and biotechnology segments. We are a publicly held company, controlled by Suzano Holding, headquartered in the city of São Paulo, with two industrial units in Suzano, one in Embu and one in Limeira, all in the state of São Paulo, and one in Mucuri, Bahia. By the end of 2013, we will inaugurate our new industrial unit in Imperatriz, Maranhão. We also have a printing products distributor, SPP-KSR. (2.4, 2.6) Our forestry base spans about 819,000 hectares, with 354,000 hectares of planted forests, distributed in the states of São Paulo, Bahia, Espírito Santo, Minas Gerais, Piauí, Tocantins and Maranhão. Outside Brazil we have commercial offices in China, the United States and Switzerland, research laboratories in Israel and China, and subsidiaries in England (Sun Paper) and Argentina (Stenfar). (2.3, 2.5) At the end of 2012, we had 6,800 own employees and around 9,600 outsourced employees. In the pulp and paper segment, our product portfolio consists of Suzano Pulp – marketed in 31 countries – and around 30 paper and paperboard brands, including the Suzano Report® line, which consists of the Suzano Report®360° and Suzano Reciclato® products sold in the domestic market, and the Report® Premium and Suzano Report® Carbon Neutral lines, which are exported. The paperboard line consists of the brands Tp White®, ArtPremium®, Supremo® and ArtPremium®PCR®. The paper products are classified into four categories – coated, uncoated, cutsize and paperboard – and are sold in over 60 countries. (2.2, 2.7) In terms of our business performance, net revenue was R$5.2 billion and EBITDA was R$1.3 billion We ended the year with a net loss of R$182 million, due to the foreign exchange variation impact of R$462 million on our debt, but with a cash effect only upon the maturity or amortization of debt. We sold 3.2 Our forestry competence is grounded in innovation, sustainability and operational excellence million tons of pulp and paper, for growth of 1.5% on the previous year, ranking as the world’s second largest producer of eucalyptus pulp and the market leader in the paper segment in South America. (2.8) 11 Sustenta bilidade R e p o r t 12 2012 S u z a n o P u l p a n d Pa p e r Mission, Vision and Values Mission (4.8) To offer renewable forestry products, pulp and paper, while excelling globally for the development of innovative solutions and the continuous pursuit of excellence and sustainability in our operations. Vision (4.8) Strong and Kind To be one of the world’s largest and most profitable forestry-based companies and be recognized for the practice of respect for people and the environment. Values (4.8) • Passion • Excellence • Entrepreneurship • Leadership • Global Vision João Victor Barbosa de Oliveira Formare former studant and corrent employee at woodyard in Mucuri Unit (Bahia) • Integrity and Safety • Quality Relationships • Social and Environmental Responsibility 13 Sustenta bilidade R e p o r t 2012 Location Map (2.4, 2.5, 2.7) England Switzerland USA China Israel Brasil Argentina Itaqui MA Imperatriz Cidelândia Imperatriz Porto Franco BA Mucuri Portocel Vitória SP Limeira Industrial units Embu São Paulo Suzano 14 Offices in Brazil and abroad Santos FuturaGene Eucalyptus plantations Ports S u z a n o P u l p a n d Pa p e r Imperatriz Unit Imperatriz at four different moments: May, June and September 2012, and February 2013. May 2012 June 2012 September de 2012 Around 700 suppliers involved in the Project, with approximately 40% from Maranhão state. February 2013 Status of works Parameter 4Q11 Earthwork 4Q12 Feb/13 Concluded Concluded Concluded 1,800 8,000 8,200 Physical progress of construction Engineering Supplies Infrastructure Construction Contracting of suppliers People engaged in the construction of the Maranhão Unit General numbers from the site Description Total Equivalent to Concrete 211,000 m³ 300 ten-story buildings Steel 42,200 tons 400 ten-story buildings Equipment and material Hours worked Fenced area 57,678 tons 2,000 empty Boeing 737-100s 21 million hours on plant construction - 150 hectares 180 soccer fields 15 Sustenta bilidade R e p o r t 2012 Key indicators Distribution of Value Added (DVA) in R$ thousand – Consolidated (EC1) Consolidated 31/12/2011 31/12/2012 Revenues Sale of goods, products and services 5,527,962 5,914,608 Other revenues 178,242 79,562 Income from construction of own assets 378,802 1,352,114 Allowance for doubtful accounts (3,794) 2,004 6,081,212 7,348,288 Cost of products, goods and services sold (2,512,629) (2,246,134) Supplies, electricity, outsourced services and others (1,655,594) (3,010,814) (86) – (4,168,309) (5,256,948) Gross value added 1,912,903 2,091,340 Depreciation, amortization and depletion (625,304) (727,270) Net added value produced by the Company 1,287,599 1,364,070 Inputs acquired from third parties Asset losses Financial income Dividends received from investment at cost Added value to distribute Personnel Direct compensation Benefits Government Severance Fund (FGTS) Taxes, fees and contributions Federal State Municipal Remuneration on loan capital – 350,943 522 – 525,219 350,943 1,812,818 1,715,013 552,238 655,172 467,804 532,177 57,424 93,805 27,010 29,190 (171,056) (104,676) (107,290) (59,773) (67,049) (48,179) 3,283 3,276 1,401,745 1,346,643 734,895 739,166 Rentals 101,863 99,285 Monetary variation losses 564,987 508,112 Other Interest on equity Loss in the year Distribution of value added 16 – 524,697 Interest Remuneration on equity 3% 12% Other papers Paperboard 42% Pulp 9% Added value from transfers Equity income Net Revenue Breakdown R$ million – 80 29,891 (182,126) 29,891 – – (182,126) 1,812,818 1,715,013 Coated 34% Uncoated Net Revenue R$ million 5,192 4,514 4,064 4,800 3,953 52 54 58 53 42 47 2010 2011 58 46 42 2008 2009 Export market (%) Domestic market (%) 48 2012 S u z a n o P u l p a n d Pa p e r EBITDA/Margin R$ million 38 36 Financial Indicators (2.8) 1,703 2010 2011 2012 Net revenue (R$ billion) 4,514 4,800 5,192 EBITDA (R$ million) 1,703 1,300 1,272 Net income (R$ million) 769 30 -182,1 Volume sold (‘000 tons) 2,763 3,100 3,200 38 27 25 EBITDA Margin (%) Capex (R$ million) Net debt (R$ million) Net debt/EBITDA 603 3,200 2,783 3,421 5,500 5,612 2.0 4.2 5.0 29 1,469 27 revenue reached R$5.2 billion, up 7.1% from 2011 1,272 2011 2012 1,161 2008 2009 2010 EBITDA Our net 25 1,300 EBITDA Margin (%) Evolution of production ('000 tons) (2.8) 2010 2011 2012 Total production 2,745 3,100 3,187 Market pulp 1,617 1,800 1,876 Total paper 1,128 1,300 1,311 Coated P&W paper 134 163 218 Paperboard 252 255 259 Uncoated P&W paper 742 869 834 P&W: Printing and writing Environmental Indicators – Industrial/Forestry (EN30) Investments related to production/operation of the company 2010 2011(*) 2012 24.704 59.219 29.739 Investments in programs and/or external programs or projects Total investment in environment 1.542 683 160 26.246 59.902 29.899 2011 (*) Intensified investments in Effluents – 26,591 (Investments related to production/operation of the company) Social and environmental investment 2012 (‘000) (EC1) 2012 Total external and internal social and environmental investment 83.271 Total internal social investment 40.302 Total external social investment * 13.070 Total internal environmental investment 29.739 Total external environmental investment 159.000 (*) Includes donations made in 2012 17 Sustenta bilidade R e p o r t Honors 2012 (2.10) In 2012, we received the following awards and mentions: • WWF – Environmental Paper Company (EPI) Index: • WWF – Environmental Paper Company (EPI) Index: through the Suzano Report® line of products, we were recognized as one of the paper producers with the best environmental practices in the world and the best in the Americas. • 2012 Agribusiness Year Book: featured as the largest company in the North and Northeast regions in this publication by Globo Rural magazine. • Pulp and Paper International Awards: finalists in the category “Innovative Product”. • Graphprint Award: first in the categories “Printing & Writing Paper – Coated”, “Printing & Writing Paper – Uncoated”, "Paperboard” and “Recycled paper”, and second in the “Specialty Papers” category. • 2011/12 ABER Excellence Award (Brazilian Association of Reprographic Companies): first place in the "Paper Industry" category. • Excellence Award (Brazilian Association of Reprographic Companies): recognized in the “Paper Industry” category. • Fernando Pini Award for Printing Excellence: recognized in the categories “Coated and uncoated board” and “Coated printing paper”. • Best Suppliers in the Communication Industry Award: recognized in various categories for the papers Pólen®, Reciclato®, Duo Design®, Cartão Supremo® and Supremo®. • 12th ABRE Brazilian Packaging Award: the award honored packaging produced from our paperboard in two categories: Technology in Packaging for Cosmetics, Personal Care, Health and Pharmaceuticals for the product Force 1 by Nutrilatina, and Packaging for Sweets for the 7-unit packaging for “Trident Fresh Menta e Hortelã” by Kraft Food. • Great Packaging Cases Award: winning package for the product “Barbie Loves Glitter” kit from Avon produced by us jointly with Gráfica Antilhas with triplex Art Premium paperboard. • 45th International Pulp and Paper Congress & Exhibition: awarded by ABTCP in two categories: “Forest Development” for the Genetic Improvement Program and "Social Responsibility" for the combination of the projects "Educar e Formar", "Agricultura Comunitária, "Piscicultura Sustentável" and "Inclusão Digital". • Você Professional of the Year: for the second consecutive year, Carlos Alberto Griner, our Human Resources Officer, was elected by Você RH magazine as the Best HR Professional in the Pulp and Paper industry. • Corporate Sustainability Index (ISE): for the eighth consecutive year we were included in this index, which measures the performance of companies listed on the BM&FBovespa in terms of sustainability, economic efficiency, environmental balance, social development and corporate governance. • Carbon Efficient Index (ICO2): we were included in this list of companies that adopt transparent practices regarding their greenhouse gas (GHG) emissions, based on the level of emissions efficiency and the free-float of each class of shares. 18 S u z a n o P u l p a n d Pa p e r Certifications NOur certification processes are conducted as new units are incorporated and in accordance with the growth strategy and the need to adjust management practices to excellence models. Our industrial and forestry units (São Paulo and Bahia) are certified by the standards ISO 9001, ISO 14001, OHSAS 18001 and FSC (Forest Stewardship Council®). We helped 76 rural producers obtain certification in 2012. The São Paulo and Bahia forest units are also certified by CERFLOR. We also continued the management of our internal social responsibility processes in line with the scope of SA 8000. The Maranhão forestry base, which is in the initial stage of the 2013 harvest, already adopts the FSC scope in its management. We continued our project of encouraging our forest partners to obtain certification for small rural properties, which helped increase the number of eucalyptus producers in the Mucuri Unit with the FSC seal. Directed at members of the Forestry Partnership Program, the project has 76 certified rural producers and 41 recommended for certification. A total of 25,000 hectares of forests have been either certified or recommended for certification, of which more than 11,000 were certified in 2012. This industryleading initiative is in line with our objectives of strengthening our actions to increase income generation in the region, encouraging better labor relations in the field and promoting compliance with social and environmental legislation. Employee Sergio Mota at the São Paulo Office 19 Sustenta bilidade R e p o r t 20 2012 S u z a n o P u l p a n d Pa p e r Global Vision B y y e a r- e n d , c o n s t r u c t i o n o f i n f r a s t r u c t u re w o r k s f o r t h e Imperatriz Unit in Maranhão was 92% completed Strategy The pulp and paper industry has been undergoing a turbulent and reduce the need for refinancing. period over the last two years due to the global macroeconomic Another initiative included in this package scenario, which has slowed the pace of recovery in prices and was the R$1.5 billion share offering. forced us to adjust our strategy to these developments and trends. With this in mind, our goal has been to accelerate and guarantee Thanks to these initiatives, we ended the year with a solid cash position of R$4.3 construction of our Imperatriz Unit in the state of Maranhão. For billion. Moreover, we lengthened our debt this, in 2012 we structured our financial protection package, which profile through funding activities and by is a set of actions that has lengthened our cash flow horizon to renegotiating contracts, with the proportion 2016 and includes R$3.5 billion in financing for the Maranhão of short-term maturities, which stood at project. The aim of this financial plan is to strengthen our liquidity 25.8% in December 2011, declining to 15.1% by end-2012. We maintained our plans to divest non-core assets, with the sale of our 17% interest in the Capim Branco Energia Consortium and of other assets such as land parcels and forest areas. In 2012, we remained strongly focused on Our forestry base permeates all our businesses, offering innovative solutions and continuously pursuing excellence in our operations increasing pulp production by accelerating the construction of the Imperatriz Unit in Maranhão. By the end of the year, we had concluded 92% of the infrastructure construction works. Construction and 21 assembly of the electrical and mechanical equipment were also at an advanced stage, with fabrication of the equipment already 89% completed. In addition, 98% of suppliers were contracted, of which approximately 40% are local, i.e. from the state of Maranhão. We ensured the supply of wood to the new Unit through the Vale Florestar Program, with 58% from own forests and forest partnerships. Consumption is estimated at 6 million m³/year, or 28 million eucalyptus trees. Another important focus is to increase eucalyptus yields. And aiming to meet future trends through FuturaGene, we continue to research genetically modified species. We have already entered the stage of regulatory studies to identify the potential impacts of planting and growing seedlings for marketing them in the future. During experiments, fully grown trees have revealed the ability to achieve 20% higher volumes than conventional clones. At the end of the preparation of this report, in March 2013, we announced the suspension of the following projects: Pulp Production Unit in Piauí and Suzano Energia Renovável. These projects will be restarted once the macroeconomic scenario and our debt/EBITDA ratio reach comfortable levels for resuming the growth cycle Eucalyptus plantation in Bahia 22 S u z a n o P u l p a n d Pa p e r 23 Sustenta bilidade R e p o r t 2012 Management model and tools In 2012, we adopted strict cost management practices under the A long-term initiative, the Productivity Productivity Project, through which we reviewed our processes and Project focuses on capturing value on all their respective costs in order to become more productive in the management fronts, which includes changing pursuit of efficiency. The productivity project was applied to a number the mindset across all tiers of the company’s of our processes and based on best internal and market practices, hierarchy, effectively incorporating cost and was composed of five phases covering the forest and industrial management into every decision-making operations, logistics and product portfolio. During the year, we process. The impacts from this effort concluded the first module of introducing the concept of a matrix were already observed in 2012, and the budget to pursue excellence and assertiveness in the preparation of a methodology will be further intensified in the budget for fixed expenses. industrial and forest units next year. Employee Davi de Sousa Pereira and Carline Meneses, at the São Paulo Office 24 S u z a n o P u l p a n d Pa p e r Another initiative in the period was the “Jogo Aberto Program” (4.4), which was created to identify concerns and potential risks through a bottom-up methodology. The initiative aims to establish an organizational environment of greater trust, transparency and respect. With it, everyone is able to share their concerns and doubts, which reinforces preventive behavior and promotes the identification of improvements. A total of 3,700 issues were collected, divided into six groups: finance, reputation, legal, client, supplier and operational. Based on a survey of their critical importance, the questions can The Productivity Project played an important role in capturing value across various business fronts. be included in our Risk Map, as defined in the Coso (Committee of Sponsoring Organizations of the Treadway Commission) methodology, which is composed of 17 major risks for which action plans are established. (4.4, 4.11). We also worked on formalizing our processes through the Documentation Pyramid, a tool that makes integrating, searching and updating data, rules and procedures easier in all departments. The system allows documents to be made available and managed by a matrix that determines the persons responsible for the execution and knowledge of various bits of information in accordance with sector, of excellence, the Click Program, which function and unit. Along the same lines and focusing on the industrial encourages employees to send innovative, area, the Operational Excellence Program (routine management) was low-cost ideas that can increase productivity, strengthened in the period and helped to attain operational stability in received 480 suggestions for improvement the last quarter of the year as well as our operational results. In terms and achieved a return of R$12.49 for each of maintenance, we appointed mentors/guardians for certain pieces of R$1.00 invested. equipment that are essential to our operation, and implemented the Also in this regard, we made progress Supervisor Agenda, with activities planned day-by-day and hour-by- in Research and Development through the hour, which represents another step towards managing our internal Innovation Program, which promotes the knowledge. This year, the program began to be extended to the sharing of knowledge to boost our results by pulp area. To increase synergy and productivity during our general expanding the research and development of downtimes, a task force was created with representatives from all new products and applications. This year, we industrial units. Integrated planning of the general downtimes will engaged a total of 170 external researchers, enable cost reductions and integrated negotiations with suppliers, 60% of whom holds master's degrees and in addition to internal benchmarking of best practices, the results of doctorates. The efforts of these professionals which can be observed next year. Also in line with our constant pursuit led a revenue contribution by new 25 Sustenta bilidade R e p o r t 26 2012 S u z a n o P u l p a n d Pa p e r Excellence Corporate governance Our relationships are grounded in the p r i n c i p l e s o f e q u i t y, t r a n s p a r e n c y, c o r p o r a t e responsibility and a c c o u n t a b i l i t y. Our relationships with the capital markets, shareholders and investors are grounded in the principles of corporate governance: equity, transparency, corporate responsibility and accountability. Various tools support the application of these principles to our governance model, which include the Code of Conduct, which establishes the guidelines and behaviors we expect from our administrators, managers and employees. Upon admission, all employees receive a copy of the Code of Conduct, and later receive regular training on its provisions. The Code of Conduct contains a series of conducts and ethical values that must be observed by employees, such as the principles of integrity, equality, transparency, professional recognition, sustainable development and corporate governance. (4.8) To ensure compliance with the Code of Conduct, we have an External Ombudsman service provided by an independent company that receives reports of any ethical misconduct through the telephone 0800 770-5678 or e-mail [email protected]. The channel guarantees the secrecy of the information and the anonymity of the person making the complaint. (4.6) The tool is also a means of communication among employees and the Conduct Committee, since the reports made by employees are submitted for analysis by the FuturaGene tecnology will provide the eucalyptus grouth with more productivity committee. Significant issues reported to the Conduct Committee are forwarded to the members of the Board of Directors. (4.4) 27 Sustenta bilidade R e p o r t 2012 Employee Thiago Santan Costa at the Itabatã (Bahia) seedling nursery 28 S u z a n o P u l p a n d Pa p e r Board of Directors Board of Auditors Current Board of Directors The Board of Auditors is a standing body • David Feffer - Chairman composed of three acting and three alternate • Boris Tabacof - Vice-chairman members who are elected by the Shareholders’ • Daniel Feffer - Vice-chairman Meeting for a term of one year, with the • Antonio de Souza Corrêa Meyer – Director possibility of re-election. • Claudio Thomaz Lobo Sonder – Director Current Members and Alternate Members of • Jorge Feffer – Director the Board of Auditors • Oscar de Paula Bernardes Neto – Director •Luiz Augusto Marques Paes – Member • Marco Antonio Bologna – Director •Roberto Figueiredo Mello – Alternate member • Nildemar Secches – Director •Rubens Barletta – Member •Luiz Gonzaga Ramos Schubert – Alternate According to our Bylaws, the Board of Directors is advised by the member following support committees, whose duties are described in Article 21 of •Jaime Luiz Kalsing – Member the Bylaws: (a) Management Committee; (b) Sustainability and Strategy •Moacyr Arnaldo Farah – Alternate member Committee; and (c) Audit Committee. Independent Auditor Board of Executive Officers The Board of Executive Officers is composed of six members, who are Our results, accounting practices and financial statements are audited by KPMG. Our elected by the Board of Directors for a term of one year. Currently all independent auditors are rotated periodically, in members are Caucasian, with two over 50 years of age and four between accordance with governing law. 30 and 50 years of age. (LA13) Atuais membros da Diretoria •Walter Schalka - Chief Executive Officer (*) •Alberto Monteiro de Queiroz Netto – Chief Financial and Investor Relations Officer •Paulo Celso Bassetti – Executive Officer – Forest Business Unit •Carlos Aníbal Fernandes de Almeida Júnior - Executive Officer – Paper Business Unit •Ernesto Peres Pousada Júnior – Chief Operating Officer •Carlos Alberto Griner – Executive Officer – Human Resources (*) Walter Schalka was elected at the Meeting of the Board of Directors held on December 22, 2012, replacing Antonio dos Santos Maciel Neto as of January 1, 2013. 29 Sustenta bilidade R e p o r t 2012 Sustainability Advisory Board Our corporate governance structure includes the following levels: In addition to the above-mentioned Shareholders’ Meeting, Board of Directors, Board of Executive committees, we also created the Suzano Officers, Board of Auditors (standing), in addition to committees, sub- Sustainability Advisory Board, which has committees and working groups for specific issues. (4.1) been functioning since 2011. The board The shareholders’ meeting is the main channel of communication expands the dialogue on the theme applied between shareholders and directors. Investors may also use other to our business and supports our decisions channels: e-mail [email protected] and telephone +55 11 3503-9061 by employing broader reflection. In 2012, its to clarify doubts, obtain information on the performance of our shares six external members – mostly academics and and accompany the performance of our stock on BM&FBovespa, where representatives from the non-profit sector, all we are listed on the Level 1 corporate governance segment, the IbrX- of whom are remunerated – and 14 internal 50 index, the Bovespa Index and, for the eighth consecutive year, the guests met four times. The challenge during Corporate Sustainability Index (ISE). (4.4) the year was the various reflections made by The Board of Directors is composed of nine members, four of whom the group to support the development of a are independent. The members are elected by the Shareholders’ sustainable practices strategy for Suzano for Meeting for a term of three years, with the possibility of re-election. the potential macroeconomic scenarios. (4.9) All members are white and over 50 years of age. They ordinarily meet every three months and extraordinarily whenever necessary. In 2012, they held 30 meetings. The current members of the Board of Directors were elected at the 2010 Annual Shareholders’ Meeting, based on their qualification, experience, knowledge of the industry or other sectors and the principles that guide our business. The Annual Shareholders’ Meeting to be held in April 2013 will elect the new members to the Board of Directors. (4.3, LA13) Directors not exclusively dedicated to their position have 100% of their remuneration paid as fixed compensation and are not entitled to variable compensation, share-based compensation or post-employment benefits, similar to the members of the Board of Auditors. For members of the Board of Directors dedicated on a fulltime basis to their position, the mix ranges from 55% to 60% of fixed compensation and 40% to 45% of variable compensation, however they are also not entitled to share-based compensation or postemployment benefits. In 2012, the total compensation paid to our directors and officers was R$33 million. (4.5, 4.7) Our results, accounting practices and financial statements are audited by KPMG – Auditores Independentes. 30 S u z a n o P u l p a n d Pa p e r Risk management Our risks are managed on an integrated basis, with their The status of each action plan is reported treatment and mitigation determined by their impacts on the to the competent committees. In 2012, Company's strategy. Suzano’s 17 main strategic risks were listed The integrated risk management structure is composed of the internal control and internal audit areas, which use the COSO (Committee of Sponsoring Organizations of the Treadway and monitored, with mitigating actions implemented to reduce exposure. Our integrated risk management structure Commission) methodology and the NBR ISO 31000 standard of constantly monitors the endogenous Risk Management – Techniques for assessing risks as the basis for and exogenous risks in the financial, conducting operations. regulatory, strategic, operational and social Risk identification stems from the internal audit, internal controls and environmental areas, enabling them and a general analysis of strategic risks. These activities involve an to be easily identified and handled. We annual cycle, whose results are shared with top management. Each also maintain a specific risk management risk is classified in accordance with its impact and probability and, structure for the project to expand our based on this status, its priority is defined. Each strategic risk mapped operations in Brazil’s Northeast. The is allocated to one executive officer who becomes responsible for construction of the Imperatriz Unit in applying the action plan and its potential mitigation measures. Maranhão requires comprehensive and detailed mapping and monitoring of risks. This work front is headed up by the Project's management team, which supplies information and action plans to the integrated risk management structure. (4.11) (Details on risk management can be found in the Reference Form, available at www.suzano.com.br/ri). (1.2) Employee Rodrigo da Silva Sena, at the SPP-KSR (São Paulo) shipping area. 31 Sustenta bilidade R e p o r t 32 2012 S u z a n o P u l p a n d Pa p e r Entrepreneurship 354,000 hectares of forests distributed across the states of were reflected not just in production, but also in our relations with the communities and other local stakeholders, since the local São Paulo, Bahia, Espírito Santo, managers now had greater independence in M i n a s G e r a i s , P i a u í , To c a n t i n s operational controls through systems and and Maranhão. terms of decision making. We also intensified equipment using embedded technology. On the operational front, we carried out numerous actions related to the Productivity Project, which aims to reduce costs by Operating performance increasing efficiency, standardizing and optimizing processes, training employees and providing specialist training to service Forestry providers. We implemented actions to In 2012, we planted more than 53,000 hectares of forests, bringing consolidate the transfer of precision the total forest area to 819,000 hectares, of which 354,000 hectares agriculture technology for forestry, such were planted in the states of São Paulo, Bahia, Espírito Santo, Minas as: the intensified use of aerial and Gerais, Piauí, Maranhão and Tocantins. Our main initiatives in 2012 georeferenced information during planting were based on forest management, operational productivity and and management, which results in better forest yields. With regard to the first aspect, to meet the challenge management information that enables of efficiently managing units that are disparate in terms of economic, appropriate action and rational use of inputs social, cultural and weather aspects, we conducted a comprehensive such as herbicides, fertilizers and water. restructuring of the forestry area, which included strengthening the Investments were made in two programs: regional operations. The gains in autonomy brought by the measure Focus, which collects harvest data, and the Forest Management System (SGF), which Status of the construction at Imperatriz Unit (Maranhão), november 2012. focuses on forestry information. Actions to improve forestry yields were guided by the perpetuity of results by the Genetic Improvement Program in São Paulo, the recovery in yields at the Bahia site and 33 Sustenta bilidade R e p o r t 2012 Mosaic planting: preservation of native forests, Mucuri (Bahia) consolidation of the program at new sites through the development of highperformance clones for each micro-region, as well as research and development involving polyploids. As for expansion in the Northeast, at the end of 2012, all the forest harvesting machines had already been acquired. These will be delivered during the course of 2013, when we will conduct training for some 200 professionals who will operate the machines. We expect to start harvesting in the second quarter to ensure an adequate supply to the new Imperatriz Unit, which will start operations in 2013. Also in Maranhão, continuing the insourcing process, we began the harvest phase on both own and outsourced forests. Meanwhile, in Bahia, we insourced a part of the forestry activities. In the last two years, i.e. 2011 and 2012, our insourcing actions have already created 600 jobs. In São Paulo, the highlight was the conclusion of the process to mechanize the forest harvest operations on the remaining area of Conpacel, currently part of the Limeira Unit. Our Forest Partnership program remains operational. In São Paulo, it has reached the point that we call “consolidated”, i.e., it has a stable number of participants for complementing the supply of our units (Suzano and Limeira). In Bahia (which includes Espírito Santo and Minas Gerais), the program has grown 33% over the last two years. For the new Imperatriz industrial unit in Maranhão, whose startup is expected in the fourth quarter of this year, we are working on the process of promoting and strengthening the program. At the end of 2012, we started the first contracts, which include 2,800 hectares. The challenge for the next two years is to achieve an area of 20,000 hectares, or around 80 partnerships. 34 600 jobs insourced in Bahia and Maranhão. S u z a n o P u l p a n d Pa p e r Employee Patrícia Justino de Lima, service provider from JFI Sivicultura SC Ltda, at the seedling nursery in Itapetininga (São Paulo) 35 Sustenta bilidade R e p o r t 2012 Shipments ('000 tons) 1.780 Pulp 1.607 America (-0.1%), the market’s behavior in 2012 is explained by the stronger economic growth in other markets, especially China (+8.8%) 1.847 1.445 1.435 1.519 1.310 261 297 363 412 2009 2010 2011 2012 In 2012, market pulp shipments grew 2.5% compared to 2011. Despite the slight decline in demand from Europe (-0.9%) and North 1.808 Export Market (%) Domestic Market (%) and Latin America (+3%). In the year, eucalyptus pulp shipments increased 1.4% from 2011, Destination of Shipments 2012 22% driven by the demand in Latin America (+8.3%). The market formed Brazil by “other” countries has been playing an important role in leveraging eucalyptus sales, with an 11.6% increase in sales compared to 2011. 32% 8% Europe North America (thousand tons) 2012 2011 43,637 42,587 2.5% 7,353 7,361 -0.1% 15,197 15,311 -0.9% 3,145 3,054 3.0% China 10,090 9,274 8.8% Other 7,852 7,563 3.8% Shipments - Market Pulp North America Europe Latin America 2012 x 2011 2% Latin America 36% Asia In terms of segments, “sanitary purposes” (mil ton) Embarques – Celulose de Eucalipto represented 39% of total pulp sales in 2012 2011 2012 x 2011 14,896 14,687 1.4% 2012. The 3 p.p. growth in relation to 2011 América do Norte 1,658 1,659 -0.1% corroborates the trend that this segment has Europa 6,552 6,586 -0.5% been becoming one of the most important América Latina 1,757 1,623 8.3% China 2,922 3,020 -3.2% Outros 2,007 1,799 11.6% Source: Pulp and Paper Products Council (PPPC), World 20 Report Suzano’s pulp sales totaled 1.8 million tons, a 2.1% increase over the previous year. Pulp exports reached 1.4 million tons, corresponding to 78% of total sales in 2012. Asia accounted for 36%, followed by Europe, Latin America and North America with 32%, 24% and 8%, respectively. Domestic sales increased by 49,000 tons compared to the previous year. segments for the hardwood pulp industry. The “specialty” segment was another leading performer in 2012, with growth of 7 p.p. from the previous year. The “printing & writing” segment, on the other hand, decreased its share in Suzano’s sales by 8 p.p., which was offset by other segments, in line with our strategy. Sales by segment 2012 25% Printing and Writing 1% Other 39% 8% Sanitary Purposes Packaging 27% Specialty 36 S u z a n o P u l p a n d Pa p e r In a highly competitive and challenging market marked also by fluctuations in inventories and prices, we remained focused on our targets: before year-end, we had already contracted 80% of our production for 2012, increasing customer loyalty. Furthermore, despite the macroeconomic scenario, our prices remained at satisfactory levels. The healthy performance of 2012 is the result of successful efforts on the following fronts: • Strategic planning: The area has been building closer relationships with international analysts and consultants in various events and forums, such as the London Pulp Week in England, the Market Pulp Association (MPA) in Canada, and China Pulp and Paper in China, where pulp companies from all over the world discussed the marketing issues related to the industry. All these initiatives are aligned with the strategy of prioritizing clients that pursue a high value-added partnership with Suzano in sectors with excellent growth potential. • Strengthening integration: greater interaction between the international offices and the teams based in Brazil. • Focus on continuous improvement: the same attention is given to technological infrastructure, which leaves us more confident that we are prepared for the next leap in production at the Maranhão Unit. Suzano Pulp bales in the warehouse, at Mucuri Unit (Bahia) 37 Sustenta bilidade R e p o r t 2012 Employee Thiago Santos Moreira, at Mucuri Unit (Bahia) We also organized two Sales Meetings involving the offices in Brazil and abroad to draw up precise targets for the allocation of pulp production, including the additional volume from the new unit being built in Imperatriz. This extra production will virtually double Suzano’s market pulp available for sale – a challenge to be overcome by our pulp business unit. Due to these achievements, and based on The Sales Meetings presented exciting prospects: for 2014, most of our production, including that from Imperatriz, has already been contracted. relation to market developments. Given the Our strategy is to provide platforms of products using optimized pulp new paper plants coming online around the fibers for manufacturing various types of paper, which helps mitigate our world and those shutting down over the next risks as we distribute pulp across various markets and segments. two years, as well as the pulp plants that From an industrial perspective, the period was marked by a number will close down or migrate to soluble pulp of achievements, among which the annual quality record: 97% of the production, the market should stabilize. We market pulp produced at the Mucuri Unit classified as Extra Prime, which are closely watching this development and represents global recognition for a product that meets the established believe that the trend points to a balance dirt, humidity, viscosity and brightness control parameters. between supply and demand. Office Stenfar – Argentina Suzano Pulp and Paper America – USA Sun Paper England Suzano Pulp and Paper Europe - Switzerland Suzano Pulp and Paper Asia – China Total Database: PNRH – December 2012. 38 a qualified analysis, we remain confident in 2011 2012 Headcount total Expatriates (highlited) Headcount total Expatriates (highlited) 136 0 119 0 21 1 18 0 6 0 3 0 18 3 19 3 9 0 9 1 190 4 168 4 S u z a n o P u l p a n d Pa p e r Net revenue from paper sales totaled R$3 billion, 5.9% more than in the p r e v i o u s y e a r. Paper The year 2012 was one of important achievements for the Paper Business Unit. Production totaled 1.3 million tons, up 1.9% from 2011, led by growth in coated paper production of 34.2% (see table). Production (‘000 tons) 2012 2011 2012 x 2011 1,311 1,287 +1.9% Paperboard 259 255 +1.5% Coated 218 163 +34.2% Uncoated 834 869 -4.0% Paper Sales volume reached 1.3 million tons, stable in relation to the previous year (+0.9%). Domestic sales totaled 894,700 tons, while exports totaled 452,200 tons. Destination of Paper Shipments 2012 2011 2012 x 2011 Brazil 66.4% 60.2% +6.3 p.p. South/Central America 15.0% 16.6% -1.6 p.p. North America 9.9% 11.5% -1.6 p.p. Europe 5.8% 8.7% -2.8 p.p. Other 2.8% 3.1% -0.3 p.p. Net paper sales totaled R$3 billion, 5.9% more than in the previous year. Employee Gabriel Tieppo Rocco, Thaysa Dorllas, Greice Fernanda Vasques and Andressa Duarteda Silva at the SPP-KSR office (São Paulo) Of the total net revenue, 68.9% came from domestic sales and 31.1% from exports. The average net paper price in Brazilian real was R$2,230/ton, up 5.0% on 2011. 39 R e l Sustenta a t ó r i o bilidade d e Sustenta R e pbilidade o r t 2 0 1220 1 2 In 2012, we launched the duplex paperboard Super 6 Plus® in the Brazilian and Latin American markets with lower weights and greater stiffness. This product is recommended especially for the food and hygiene and cleaning segments and has the most homogeneous back in the market, as well as superior printing quality. We also launched a version of coated paper Kromma® with a different shade that meets the global color standard and offers higher fidelity of shades when printing. This change is to meet the demand from the printing market for a product with improved color quality. The highlight of 2012 was our Polén® paper, which was present in some of the most important publications, such as the “Fifty Shades of Grey” trilogy, which topped the sales charts in Brazil for At the end of 2012, we celebrated several months. 30 years of our Suzano Report® line. The campaign brought vintage elements that were icons during the 1980s, the decade when the product was launched. We launched a special edition of around 15,000 packets of the “resmão” (big ream). With 750 sheets, the product had a fliptop opening and design reminiscent of an icon of the 1980s: the cassette tape. The To celebrate 30 years of Suzano Report, we designed commemorative vintage design packaging with flip-top opening - a throwback to an icon of the ‘80s: the audio cassette tape objective of the packaging was for use as a decorative box to store documents, papers and small objects. We also participated in a number of events, which included the International Print and Media Fair (Drupa) in Germany, one of the leading global events for the printing industry, which is held every four years. At the fair we launched a game that provided a virtual tour of scenarios evoking our corporate universe: from forests to the factory to the final consumer. The aesthetic of the game was based on paper cutouts, underlining the importance of paper in the world and its sustainable relationship with the environment. 40 S u z a n o P u l p a n d Pa p e r In our operations, we adopted a new Process Management system in the five commercial divisions of UNP: the BizAgi® software, through which we reinforce our concern for improving customer service and offering dynamic delivery solutions. The purpose of the tool is to align the Distribution, Printing and Conversion, Packaging, Promotional and Consumption procedures, as well as indicating and monitoring In 2012, we strengthen our relationship custumers, expanded agilit and transparency the performance at each stage of the order. The new system, which reaches over 400,000 clients, enables complete tracking of orders and their release for delivery, which led to increased productivity. In 2012, we also launched the customer service channel. The service was developed to improve transparency and speed up service, which underlines the company’s commitment to deadlines. With this, Suzano centralizes in a single channel all information and monitoring of incidents logged relating to the logistics, technical and commercial areas. The service is available by telephone (11 3503-9500) or by e-mail ocorrê[email protected], which is protected against spambots. You must enable JavaScript to view the information. Employee Cintia Aparecida Silva dos Santos, at the SPP-KSR office (São Paulo) 41 Sustenta bilidade R e p o r t 2012 Biotechnology With research facilities in Brazil, China and Israel, FuturaGene focuses in four different regions across the country. on increasing the competitiveness of biomass produced from planted The company completed the planting of forests using modern biotechnology tools. The use of this technology to the regulatory field trials in 2012 and began increase yields and protect forests can bring significant gains for both biosafety evaluations. Upon completion of the environment and business sustainability. FuturaGene registered these evaluations, FuturaGene will submit an significant growth in 2012. application to CTNBio for commercial approval The company began developing new products and markets and made significant progress in obtaining the commercial license for its first of the product. Another important result obtained in product. With regard to the commercial use of its first product in Brazil, the year was the installation of four field the company conducted, in 2006 and 2007, field studies with genetically trials for the selection and improvement of modified eucalyptus clones in different locations across Sao Paulo state. drought resistant plant species in the Chinese The results of these tests showed the potential of biotechnology to province of Gansu. The trials will evaluate the contribute to our business: after six years, the genetically modified trees potential of woody crops and certain shrub returned 20% more yield than conventional eucalyptus clones. varieties to combat desertification, enable soil Based on these results, the company initiated regulatory laboratory regeneration and produce economic offtake and field studies. It obtained authorization from the National Technical for bioenergy and liquid biofuels. The main Commission on Biosafety (CTNBio) of Brazil’s Ministry of Science, goals of this desert control campaign are Technology and Innovation, which regulates and approves all activities to stimulate the active participation of rural related to Genetically Modified Organisms (GMOs) in Brazil, in order to producers by bringing them and their families conduct regulatory field studies using genetically modified eucalyptus direct economic benefits, to provide training in advanced forest management techniques and to find suitable plant species for different industrial applications on degraded land areas. Employee Noga Barimboim and Yaarit Waimberg at the FuturaGene lab in Israel 42 S u z a n o P u l p a n d Pa p e r Upon successful completion of the project, FuturaGene intends In 2012, FuturaGene played a significant to scale up its activities in Gansu and replicate the project in role in promoting the public debate on the similar environments around the world, providing solutions for acceptance of biotechnology as a vital tool for ecosystem restoration and regeneration, energy security and sustainability. Among the initiatives, the company rural development in regions affected by desertification and soil made a presentation at a side event sponsored degradation. FuturaGene also installed its first field experiments by the Food and Agriculture Organization (FAO) for cold-tolerant eucalyptus in Yunnan province and signed a and the Brazilian Pulp and Paper Association collaboration agreement with a state farm in Guangxi province (Bracelpa) during Rio+20, the United Nations to develop subtropical eucalyptus clones. In the research Conference on Sustainable Development, and arena, FuturaGene expanded its project portfolio by signing a at FAO headquarters in Rome during the 21st collaboration agreement with the Brazilian Agricultural Research Session of the Committee on Forestry (COFO Corporation (Embrapa). The first project aims to introduce 21). In line with its policy of transparency and an aluminum-tolerant gene from Embrapa into FuturaGene’s engagement, FuturaGene hosted a visit from eucalyptus germplasm to enhance yields in areas affected by the New Generation Plantations Project (NGP), aluminum toxicity in the soil. In addition, FuturaGene signed a a dialogue platform coordinated by the World license agreement with Arcadia Biosciences in the United States Wide Fund for Nature (WWF), at its Brazilian to develop eucalyptus and poplar plants with more efficient use of facilities to learn about and discuss the role of nitrogen and water. biotechnology in sustainability. The company In addition to these projects, FuturaGene is working closely with has also actively engaged forest certification our Forestry Business unit on conventional breeding programs and groups and other governmental and civil society other methodologies to increase eucalyptus yield. groups in dialogue. 43 Sustenta bilidade R e p o r t 2012 Economic and financial performance In 2012, our net revenue was R$ 5,192.3 million, 7.1% more than in 2011 (R$4,848.0 million). This result was due to the increase in the average net price (+5.4%) and the growth in pulp and paper sales volume (+1.6%). Paper and pulp sales volume in 2012 amounted to 3,193,800 tons, compared to 3,143,400 tons in 2011. period was 5.8%. This was mainly due to the increase in wood costs, EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) due to the higher share of third-party wood in the supply mix and the Cash generation, as measured by EBITDA, Cost of goods sold (COGS) in 2012 amounted to R$4,036.3 million, a 7.0% increase over R$3,771.9 million in 2011, while inflation in the higher unit price; the increase in costs with maintenance downtime totaled R$1,271.6 million, with EBITDA margin over the course of the year; the 16.7% depreciation in the Brazilian real of 24.5% in 2012. This result is mainly due to against the U.S. dollar; the higher sales volume (+1.6%), partially offset the depreciation in the Brazilian real against by the benefit from the Reintegra program in the paper segment. Unit the U.S. dollar; the growth in domestic pulp COGS in 2012 was R$1,263.8/ton, compared to R$1,200.0/ton in 2011, and paper sales; and the increase in unit for an increase of 5.3%. As a result of the above factors, gross profit COGS. In 2011, EBITDA was R$1,301.7 was R$1,156.0 million, 7.4% higher than the R$1,076.1 million in 2011. million, for EBITDA margin of 26.8%. Selling expenses amounted to R$247.9 million, remaining stable in In 2012, the Company registered net relation to R$247.7 million in 2011. Administrative expenses in the year financial expenses of R$393.6 million, totaled R$403.8 million, compared to R$333.8 million in 2011. The compared to R$318.5 million in 2011. The increase was mainly due to the higher spending on expansion projects; 23.6% increase in net financial expenses is the reclassification of provisions for labor claims in 2011; the increase mainly due to the 22.6% increase in gross in consulting and advisory expenses; and the expenses associated with debt and the negative result from hedge wage increases. operations of R$33.9 million, compared to the Other operating revenues amounted to R$40.1 million, positively impacted by the gain from the sale of fixed assets (non-recurring); from positive result of R$8.1 million in 2011. Monetary and foreign exchange variations wood and electricity sales; and negatively by the adjustment to fair value negatively affected the company’s result by of biological assets (R$9.4 million). R$461.7 million in 2012, due to the 8.9% devaluation of the real against the dollar (endof-period rate). In 2011, the impact was a negative R$456.2 million. 44 S u z a n o P u l p a n d Pa p e r Capital Expenditure Capex in 2012 totaled R$2,783.5 million. Capex for maintaining current production capacity totaled R$495.3 million, with R$156.0 million directed to the industrial area and R$339.3 million to the forestry area. A sum of R$2.3 billion was invested in expansion projects, mainly in the Imperatriz Unit. In 2011, capex totaled R$3,224.9 million, of which R$518.2 million went to maintenance, R$1.5 billion to the acquisition of Conpacel and R$1.2 billion to other expansion projects, especially the Imperatriz Unit. Debt Gross debt on December 31, 2012 amounted to R$10.7 billion, of which 54.8% was denominated in local currency and 45.2% in foreign currency. We contract debt in foreign currency as a natural hedge, since nearly 50% of our revenue comes from exports. This structural exposure allows us to contract export financing in U.S. dollar at more competitive costs than local financing lines and to match financing payments with receivable flows from sales. The net debt/EBITDA ratio is 5.0x, while the pro-forma rate, which includes funds from the sale of Suzano’s stake in the Capim Branco Energia Consortium, was 4.3x. The company continues to work on various fronts to improve its EBITDA, with projects to increase productivity and reduce costs, in addition to the initiatives already announced to reduce leverage and strengthen its capital structure. Arrival at the Port of Itaqui of the machinery to be used for harvesting wood that will be supplied to the Imperatriz Unit (MA) 45 Sustenta bilidade R e p o r t 2012 Employee Livaldo Barros, at Rio Verde Unit (São Paulo) 46 S u z a n o P u l p a n d Pa p e r Financial Protection Package 2012 was an important year for Suzano. The Company structured a financial protection package that provided the necessary cushion during the investment phase for construction of the plant in Maranhão. This financial plan was aimed at strengthening the company’s liquidity and reducing the need for refinancing. The R$1.5 billion share offering Employee Renato de Azevedo Vaz at Embu Unit São Paulo) concluded in 2012 was one of the components of the comprehensive Capital Markets financial protection package. Our capital stock consists of 371,128,064 We closed the year with a solid cash position of R$4.3 billion. We also carried out funding operations and renegotiated debt agreements, common shares (SUZB3) and 736,549,249 strengthening the cash position required for growth. These operations preferred shares (SUZB5 and SUZB6), totaling were highly important for lengthening the debt profile, with the 1,107,677,313 shares traded on the São proportion of short-term maturities, which stood at 25.8% in Paulo Stock Exchange (BM&FBovespa). Of the December 2011, decreasing to 15.1% at the end of 2012. 17,644,281 shares held in treasury, 6,786,194 are common shares and 10,858,087 are In 2012, we announced the divestment of our interest in the Capim Branco Energia Consortium. Note that the Company contracted import preferred shares. Our market capitalization in financing operations from export credit agencies for the acquisition of December 2012 was R$7.8 billion. The free- the imported equipment for the Imperatriz Unit. float corresponded to 42% of the total stock. At the end of December, the preferred shares SUZB5 were quoted at R$7.02. The Company’s stock is listed on the Level 1 corporate governance segment of the BM&FBovespa and was included as a component of the Bovespa Index, IBrX-50 and (for the eighth year in a row) Corporate Sustainability Index (ISE). Average daily trades numbered 6,600 and financial volume stood at R$25.0 million. Disperse Ownership – number of shareholders by holdings Holdings bracket 2010 Number of shareholders 2011 Number of shares Number of shareholders 2012 Number of shares Number of shareholders Number of shares Over 5.0 million shares 14 263,0 14 261,5 23 886,3 2.0 million to 4.99 million 13 39,1 16 48,4 17 49,4 1.0 million to 1.99 million 18 25,4 16 23,9 34 45,9 500,000 to 0.99 million 34 22,4 28 18,7 46 33,2 200,000 to 499,000 75 23,5 65 21,4 117 35,4 50,000 to 199,000 179 18,5 162 15,4 306 30,1 450 10,1 507 11,0 778 15,9 100 to 9,900 5.517 6,9 6.082 8,5 7.351 11,4 Fewer than 100 shares 1.168 0,0 1.095 0,0 1.084 0,0 Total 7.468 408,5 7.985 408,9 9.756 1.107,7 10,000 to 49,000 (*) Includes treasury shares 47 Relatório de 48 Sustenta bilidade 2012 S u z a n o P u l p a n d Pa p e r Integrity and Safety Commitment to employees We intensified the Capacitar program, training more than 6,000 people in Maranhão. The year 2012 was marked by the planning and execution of the plan for the recruitment and selection of workers for our Imperatriz Unit. The highlight was the Capacitar program, which trained around 6,880 people in the state of Maranhão to develop and qualify professionals from the local community to work on the construction and operation of the new pulp plant, instead of bringing already qualified people from other regions. As part of this process, we considered the expectations of society identified by the socio-environmental diagnostic study conducted soon after we defined the investments in the region, which focused on vocational training and job creation for the local population. We also innovated in the hiring of technical staff to meet the project’s requirements by adopting the Consortium concept for the training program. After analyzing the regional characteristics, we entered into partnerships with the government (Municipal Government of Imperatriz and State Government of Maranhão) and the National Industrial Training Service (SENAI), the National Employment System (SINE), the Federal Institute of Education, Science and Technology of Maranhão (IFMA), the Construction Workers’ Trade Union, the Construction Industry Union (Sinduscon-MA), the Trade Association of Imperatriz, as well as local companies and suppliers. This participatory process allowed us to ensure the perpetuity of the initiative. (LA11) Capacitar also expanded beyond its initial objective of training workers to become a social project by incorporating significant investments in the educational infrastructure. We innovated once again by allocating funds for Employee Rayane Xavier Ferreira, at Mucuri Unit (Bahia) expanding and improving existing spaces and entities. The cities covered by the training courses were: Açailândia, Porto Franco, Imperatriz, Governador Edison Lobão and João Lisboa. 49 Sustenta bilidade R e p o r t Near Imperatriz, the communities that benefited directly were Embiral, Matança, Olho d´Água and Coquelândia/São Felix. Even if 2012 Capacitate service project: Development of manpower at Maranhão. not all graduates have been or will be absorbed by the new unit, whose construction employed, at the end of the year, 8,500 workers (60% local) and will reach 10,000, the training will help these people find jobs on the other projects expected in the region, such as shopping malls and hotels. (EC7) Moreover, the Capacitar framework includes other training programs, such as courses on Paper and Pulp and Harvest and Maintenance Operations, which trained 240 people. At the end of the year, 176 youth in the Paper and Pulp course worked as interns at the Bahia Unit and in São Paulo as part of the Treinandos Project, who will later return to Imperatriz to begin their jobs. Our next step is to 50 In 2012, we also continued the practice develop training programs in the area of engineering. The Capacitar of training all recently hired professionals model was presented and analyzed during the National Congress on on our Code of Conduct, which includes Personnel Management, the biggest event of its kind in Latin America human rights and safety issues. We also made and the second most important in the world, which was held in 2012 progress on the pace of investigations of in São Paulo. This means that worker training and the social profile cases brought to the attention of the External are complemented by the project’s results and the strengthening Ombudsman (0800 771 4060) and met the of institutional relations, effectively completing the tripod that will 30-day deadline for responding to them, support our path to sustainability. which increased the channel’s credibility. S u z a n o P u l p a n d Pa p e r The Performance Management cycle, which translates our strategic objectives into targets and our values into behaviors, involved all our employees, including those in operational areas. The tool, whose timetable includes the stages of self-appraisal, appraisal by manager, feedback and development plan, is important for those who seek professional growth. The cycle employees to know the results and behaviors expected from them, which helps guide their development. The performance appraisal also involves support tools to promote employee self-awareness. One example is the content available in the Corporate Education Portal, such as e-learning programs and Career Guide, with tips on career planning and professional development. (LA12) Employee Maria Teresa Borges Bega and Patricia Joly Castro, at the São Paulo office. 51 Sustenta bilidade R e p o r t 2012 Profile by job type and labor contract – Suzano Papel e Celulose (LA1) 2010 Full time Executive Officers* Managers Administrative staff Full time Total 2012 Part time Total Full time Part time Total 15 – 15 12 0 12 20 0 20 425 – 425 261 0 261 242 0 242 Other management positions** Specialists 2011 Part time – – – 312 0 312 315 0 315 784 1 785 1.019 1 1.020 1.023 2 1.025 485 – 485 785 0 785 633 0 633 Operational staff 2.642 – – 3.809 0 3.809 3.997 0 3.997 Subtotal*** 4.351 1 – 6.198 1 6.199 6.230 2 6.232 – – – 204 0 204 177 0 177 – – – 11.217 10.330 – – – 81 61 – – 17.620 16.739 Interns**** Contracted outsourced providers*** % outsourced/own employees -1 *** Total * Includes statutory and appointed members ** Category included in this Report, from the sub-division of the Managers category (includes coordinators and supervisors) *** In the Subtotal column, the results for 2009 and 2010 were reported as “Total” until the 2010 Sustainability Report **** Categories included in this Report. We no longer have trainees – hence the elimination of the column reporting their numbers. The number of trainees in the previous years is available in the 2010 Sustainability Report. ****Categorys incluídas neste Relatório. Não mantemos mais trainees – daí a eliminação da coluna que os reportava. O número de trainees dos anos anteriores pode ser consultado no Relatório de Sustentabilidade 2010. Profile by job type and labor contract – FuturaGene (LA1) Category 2011 2012 Full time Part time Total Full time Managers 4 0 4 6 0 6 Other management positions 3 0 3 4 0 4 Specialists 6 0 6 7 0 7 Administrative staff 3 0 3 4 0 4 Operational staff 3 0 3 10 0 10 19 0 19 31 0 31 Total Workforce by region (2012) 100,0% SPC FGBR 56,1% 42,7% 0,5% 0,0% 0,5% 0,0% South 52 Southeast Center-West 0,0% Northeast 0,2% 0,0% North Part time Total S u z a n o P u l p a n d Pa p e r Profile by region – Suzano Papel e Celulose (LA13) Category 2011 South Southeast Center-West Northeast North Executive Officers 0,0% 100,0% 0,0% 0,0% 0,0% Managers 0,4% 73,2% 0,0% 26,4% 0,0% Other management positions 1,0% 64,4% 1,3% 32,7% 0,6% Specialists 1,5% 75,0% 0,5% 22,5% 0,6% Administrative staff 1,5% 55,5% 2,3% 40,0% 0,6% Operational staff 0,3% 52,8% 0,2% 46,6% 0,1% Subtotal 0,7% 58,3% 0,6% 40,2% 0,3% Interns 0,0% 65,2% 0,0% 34,8% 0,0% Total 0,7% 58,5% 0,6% 38,9% 1,4% *Starting from this Sustainability Report, data are reported by job position in each region. The historical figures for total employees by region can be found in the 2010 Sustainability Report. Category 2012 South Southeast Center-West Northeast North Executive Officers 0,0% 85,0% 0,0% 15,0% 0,0% Managers 0,0% 69,0% 0,0% 31,0% 0,0% Other management positions 1,0% 63,0% 1,0% 35,0% 1,0% Specialists 1,0% 74,0% 1,0% 24,0% 0,0% Administrative staff 2,0% 49,0% 2,0% 47,0% 1,0% Operational staff 0,0% 51,0% 0,0% 49,0% 0,0% Total active employees SPC 1,0% 56,0% 0,0% 43,0% 0,0% Northeast North Profile by region – Futuragene (LA13) Category 2011 South Southeast Center-West Executive Officers 0,0% 100,0% 0,0% 0,0% 0,0% Managers 0,0% 80,0% 0,0% 20,0% 0,0% Specialists 0,0% 100,0% 0,0% 0,0% 0,0% Total 0,0% 94,1% 0,0% 5,9% 0,0% Note: We believe that the Profile by Region table for Futuragene is unnecessary, since 100% of the company’s employees are located in the Southeast Region. Category Managers 2012 South Southeast Center-West Northeast North 0,0% 100,0% 0,0% 0,0% 0,0% Other management positions 0,0% 100,0% 0,0% 0,0% 0,0% Specialists 0,0% 100,0% 0,0% 0,0% 0,0% Administrative staff 0,0% 100,0% 0,0% 0,0% 0,0% Operational staff 0,0% 100,0% 0,0% 0,0% 0,0% Total active employees FTG 0,0% 100,0% 0,0% 0,0% 0,0% Interns 0,0% 100,0% 0,0% 0,0% 0,0% Total 0,0% 100,0% 0,0% 0,0% 0,0% 53 Sustenta bilidade R e p o r t 2012 Workforce by gender 100,0% 13% 6% 9% 31% 34% 51% 87% 94% 91% 69% 66% 49% Executive Officers Managers Other management positions Specialists Operational staff Administrative staff Men Interns Women Profile by gender – Suzano Papel e Celulose (LA13) 2009 2010 2011 2012 Women Men Women Men Women Men Women Men Officers 0% 100% 0% 100% 0% 100% 0% 100% Managers 8% 92% 11,1% 98,9% 13% 87% 13% 87% 8% 92% 9% 91% Other management positions* Specialists 29% 71% 34,5% 65,5% 35% 65% 34% 66% Administrative staff 28% 72% 25,4% 74,6% 28% 72% 30% 70% Operational staff 2% 98% 3,9% 96,1% 7% 93% 6% 94% 10% 90% 12,5% 87,5% 14% 86% – – Interns *** – – – – 48% 52% 51% 49% Total – – – – 15% 85% – – Subtotal ** * Category included in this Report, from the sub-division of the Managers category ** In the Subtotal column, the results for 2009 and 2010 were reported as “Total” until the 2010 Sustainability Report *** Category included in this Report. We no longer have trainees – hence the elimination of the column reporting their numbers. The number of trainees for the previous two years can be found in the 2010 Sustainability Report. 54 S u z a n o P u l p a n d Pa p e r Profile by gender – Futuragene Category Profile by age – Futuragene (LA13) 2011 Category 2012 Women Men Women Men Managers 25% 75% 0% 100% Other management positions 33% 67% 50% 50% Specialists 67% 33% 71% 29% Administrative staff 67% 33% 50% 50% Operational staff 67% 33% 60% 40% Total 53% 47% – – Profile by age – Suzano Papel e Celulose Executive Officers Managers Other management positions* 2011 Less than 30 Between 30 and 50 More than 50 Managers 0% 75% 25% Other management positions 0% 100% 0% 0% 100% 0% Administrative staff Operational staff 67% 33% 0% 100% 0% 0% 26% 68% 5% Total (LA13) 2009 Below 30 (LA13) 2010 Between 30 and 50 2011 Between 30 and 50 Above 50 Below 30 Above 50 Below 30 Between 30 and 50 Above 50 0% 63,6% 37,4% 0% 80% 20% 0% 75% 25% 6,1% 74,9% 18,9% 8,2% 75,1% 16,7% 5% 77% 18% – – – – – – 5% 80% 15% Specialists 24,5% 62% 13,5% 28,9% 58,2% 12,9% 28% 60% 12% Administrative staff 35,1% 55,9% 8,9% 33% 56,9% 10,1% 29% 63% 8% Operational staff 33,3% 61,1% 5,6% 35,6% 58,6% 5,8% 33% 62% 6% Subtotal** 29,2% 62,1% 8,8% 31,3% 60% 8,7% 29% 63% 8% Interns*** – – – – – – 100% 0% 0% Total – – – – – – 31% 61% 8% * Category included in this Report, from the sub-division of the Managers category ** In the Subtotal column, the results for 2009 and 2010 were reported as “Total” until the 2010 Sustainability Report *** Category included in this Report. We no longer have trainees – hence the elimination of the column reporting their numbers. The number of trainees for the previous two years can be found in the 2010 Sustainability Report. Our company invests in the development of people. In the picture Formare former studants during (Training) Program at Mucuri Unit (Bahia) 55 Sustenta bilidade R e p o r t Profile by Age 2012 (LA13) Suzano Pulp and Paper Category Less than 30 Between 30 and 50 More than 50 % % % Officers 0% 65% 35% Managers 5% 74% 20% Other management positions Specialists 5% 76% 19% 25% 61% 13% Administrative staff 29% 61% 9% Operational staff 32% 60% 8% Subtotal 28% 62% 10% Interns 99% 1% 0% Temps 0% 0% 0% Total 30% 60% 10% Less than 30 Between 30 and 50 More than 50 FuturaGene Category Managers Other management positions % % 67% 17% 0% 100% 0% Specialists 14% 86% 0% Administrative staff 50% 50% 0% Operational staff 70% 30% 0% Total active employees FTG Interns Total employees + others FTG Servide provider from Irmãos Passaúra working on the construction of Imperatriz Unit (Maranhão) 56 % 17% 35% 61% 3% 100% 0% 0% 41% 56% 3% 2012 S u z a n o P u l p a n d Pa p e r Hiring of employees from regions for which they were hired – Suzano Pulp and Paper (EC7) 2011 Category South Southeast Center-West Northeast North % % % % % Executive Officers 0,0% 0,0% 0,0% 0,0% 0,0% Managers 0,0% 76,2% 0,0% 7,1% 0,0% Other management positions 0,0% 66,7% 0,0% 0,0% 0,0% Specialists 42,9% 83,9% 50,0% 40,8% 50,0% Administrative staff 100,0% 89,6% 0,0% 52,6% 0,0% Operational staff 100,0% 86,9% 100,0% 78,8% 0,0% 55,6% 85,3% 66,7% 70,5% 50,0% South Southeast Center-West Northeast North Total active employees SPC 2012 Category % % % % % Executive Officers 0,0% 0,0% 0,0% 0,0% 0,0% Managers 0,0% 80,0% 0,0% 11,1% 0,0% Other management positions 0,0% 75,0% 0,0% 22,2% 0,0% 0,0% 94,6% 0,0% 32,5% 0,0% 50,0% 95,1% 100,0% 57,6% 100,0% Specialists Administrative staff Operational staff Total active employees SPC 100,0% 85,8% 0,0% 64,7% 50,0% 66,7% 90,4% 66,7% 59,8% 66,7% Northeast North Hiring of employees from regions for which they were hired – FuturaGene (EC7) 2012 Category South Southeast Center-West % % % % % Managers 0,0% 100,0% 0,0% 0,0% 0,0% Other management positions 0,0% 0,0% 0,0% 0,0% 0,0% Specialists 0,0% 50,0% 0,0% 0,0% 0,0% Administrative staff 0,0% 0,0% 0,0% 0,0% 0,0% Operational staff 0,0% 87,5% 0,0% 0,0% 0,0% Total active employees FTG 0,0% 83,3% 0,0% 0,0% 0,0% Database: Personnel Record – December 2012 57 Sustenta bilidade R e p o r t 2012 Indicators of Turnover Rate (%) Turnover rate by region – Suzano Pulp and Paper (LA10) 2011 South Category Turn Over Resignations Total Active Employees SPC Interns Total Employees + Others SPC Category Total Active Employees SPC Interns Total Employees + Others SPC Southeast Center-West Northeast Northeast Turn Over Layoffs Turn Over Resignations Turn Over Layoffs Turn Over Resignations Turn Over Layoffs Turn Over Resignations Turn Over Layoffs Turn Over Resignations Turn Over Layoffs 37,7% 47% 12% 11% 36% 47% 19% 8% 32% 42% 0% 0% 4% 9% 0% 0% 4% 9% 0% 0% 38% 47% 12% 11% 36% 47% 18% 8% 32% 42% South Turn Over Turn Over Resignations Layoffs Southeast Turn Over Turn Over Resignations Layoffs 2012 Center-West Turn Over Turn Over Resignations Layoffs Northeast Turn Over Turn Over Resignations Layoffs Northeast Turn Over Turn Over Resignations Layoffs 15,4% 23,1% 10,1% 11,3% 17,1% 25,7% 16,1% 13,0% 29,4% 41,2% 0% 0,0% 100,4% 105,6% 0,0% 0,0% 95,5% 106,9% 0,0% 0,0% 15,4% 23,1% 12,9% 14,3% 17,1% 25,7% 17,9% 15,2% 29,4% 41,2% Turnover rate by region – FuturaGene (LA10) Category Total Active Employees FTG Interns Total Employees + Others FTG Category 58 South Turn Over Turn Over Resignations Layoffs Southeast Turn Over Turn Over Resignations Layoffs 2011 Center-West Turn Over Turn Over Resignations Layoffs Northeast Turn Over Turn Over Resignations Layoffs Northeast Turn Over Turn Over Resignations Layoffs 0% 0% 21% 12% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 21% 12% 0% 0% 0% 0% 0% 0% South Turn Over Turn Over Resignations Layoffs Southeast Turn Over Turn Over Resignations Layoffs 2012 Center-West Turn Over Turn Over Resignations Layoffs Northeast Turn Over Turn Over Resignations Layoffs Northeast Turn Over Turn Over Resignations Layoffs Total Active Employees FTG 0% 0% 27% 11% 0% 0% 0% 0% 0% 0% Interns 0% 0% 90% 0% 0% 0% 0% 0% 0% 0% Total Employees + Others FTG 0% 0% 31% 10% 0% 0% 0% 0% 0% 0% S u z a n o P u l p a n d Pa p e r Training Indicators (average h/employee/year) Training on Human Rights – Suzano Pulp and Paper (LA10) (LA10) Category Training on Human Rights – FuturaGene (LA10) 2011 2012 Average hours per employee Average hours per employee Executive Officers 8 3 5 Managers 7 0 4 0 2011 2012 Average hours per employee Average hours per employee Executive Officers 1 2 Managers 7 Category Other management positions 7 5 Other management positions Specialists 9 7 Specialists 3 1 2 0 Administrative staff 9 7 Administrative staff Operational staff 8 6 Operational staff 5 1 Subtotal 8 6 Subtotal 0 2 Interns 0 0 Total 5 1 Interns Total 22 17 9 7 Training – Hours and positions – Suzano Pulp and Paper (LA10) Category Training – Hours and positions – FuturaGene (LA10) Category 2011 2012 Average hours per employee Average hours per employee Managers 23 3 Other management positions 45 0 2011 2012 Average hours per employee Average hours per employee Executive Officers 18 28 Managers 29 55 Other management positions 39 53 Specialists 36 2 Administrative staff 26 2 Specialists 26 31 Administrative staff 18 18 Operational staff Subtotal Operational staff 53 93 Subtotal 42 69 Interns Total Interns 29 24 Total 41 67 4 0 30 2 0 0 30 2 59 Sustenta bilidade R e p o r t Learning We give special attention to the continuous development of new Volunteer Work (SO1) Project 2011 2012 131 101 professionals and future leaders. In addition to the Treinandos Program, Escola Formare Suzano which is part of the Capacitar Program, we also have the Suzano Escola Formare Embu 45 40 Internship Program which, in 2012, conducted a recruiting process for Escola Formare Mucuri 105 114 openings at the Embu (SP), Imperatriz (MA), Itapetininga (SP), Limeira Escola Formare Limeira 127 122 (SP), Mucuri (BA), São Paulo (SP), Suzano (SP) and Teresina (PI) units. Total Project Escola Formare 408 377 Suzano na Escola Mucuri 34 – vocational schools participated in the process, 145 of whom were Suzano na Escola ESPAÇO CONFINADO 28 27 approved for the internships of 20 and 30 hours per week. The selection Suzano na Escola Embu – 22 62 49 High school students in their junior and senior years and students in process was conducted in four stages: group dynamics, interviews with the human resources department and managers and a panel featuring the director of the area responsible for the opening. Those approved receive a stipend compatible with industry standards, meal vouchers or meals (for industrial units), transportation voucher or chartered bus (for industrial units), health plan and life insurance. In 2012, we strongly encouraged the expansion of the Youth Apprentice program. In partnership with the National Industrial Training Service (SENAI), the National Rural Learning Service (SENAR), the National Commercial Education Service (SENAC) and the Guarda-Mirim program of the Municipality of Suzano, the ranks of our units were expanded by 104 youth who are regularly attending junior or high school. Lasting one to two years and with a daily schedule of six to eight hours, the program is divided into two modules: a theoretical part that is common to all programs; and a specific part that focuses on the area where the apprentice works at our company. The main operational areas involved are: administration, industrial (production – pulp and paper and maintenance – electrical and mechanical) and forestry (forestry and maintenance of forestry machines). Volunteer program With a special focus on education, our Volunteer Program registered 2,895 volunteers in the year. The Escola Formare project alone, which was implemented at the Embu, Limeira and Mucuri units and prepares youth for the job market, registered 377 volunteers. Thanks to their efforts, 90 youth were trained by the project, including employees, service providers, interns and apprentices, were hired. 60 2012 Total Project Suzano na Escola S u z a n o P u l p a n d Pa p e r The Suzano na Escola (Suzano at School) Diversity Management – Handicapped employees (LA13) program, which was developed in partnership 2011 2012 with Junior Achievement in the cities of Embu Category and São Paulo, trained 51 volunteers to work Executive Officers 0 12 0% 0 20 0% in public schools in the regions. The project, Managers 0 261 0% 1 242 0% held for the third time in São Paulo and for the Other management positions 3 312 1% 1 315 0% 18 1.020 2% 20 1.025 2% first time in Embu, included two programs: As Vantagens de Permanecer na Escola (Advantages Nº Specialists % Nº HC % 58 785 7% 60 633 9% of Staying in School) and Introdução ao Mundo Operational staff 102 3.809 3% 101 3.997 3% dos Negócios (Introduction to the Business Total employees 181 6.199 3% 183 6.232 3% World). In all, we served 13 classes, benefiting Administrative staff HC Note: There are no handicapped people at FuturaGene. 460 youth. Diversity In 2012, the theme of diversity was widely disseminated internally. As part of our People with Disabilities Inclusion Program, we carried out a series of actions: • Training our HR team through a workshop on the Inclusion of Persons with Disabilities, in which 80 professionals from the Infrastructure, Health, Occupational Safety and Quality of Life teams participated; • Sign language course at the Mucuri Unit, which trained 25 employees; • Exhibition of paintings made by people with disabilities from partner institutions; • Internal Bulletins – Newsletters – Appreciating differences “Recommend a Friend” program for recruiting persons with disabilities – also continued to reflect our commitment to hiring professionals and offering them training in accordance with their area of operation. The theme of Persons with Disabilities is the subject of the agreement (Termo de Ajustamento de Conduta – TAC) maintained with the Labor Prosecutor’s Office of Eunápolis, Bahia. Members of the project “Jovem Aprendiz” at Limeira Unit (São Paulo). From back to front, left to right: Monique Pontello Lima; Edson Lucas de Souza Ramos de Souza; Sandro ricardo de Abreu; Salete Daiane de Godoy dos Santos; Aline Rodrigues dos Santos; Matheus Diniz Ventura; emerson Alves Felipe dos Santos; Amanda Ramalho; Jackson de Souza; Tânia Izabela SAlgado Lima; Fabio Fragatte Argioli and Nayara Fátima de Freitas Lucena. 61 Relatório de Sustenta bilidade 2012 Safety, health and quality of life Various advances were made during the year with regard to the safety, health and quality of life of our employees. One of the highlights was the Linha Mestra program, which is part of the Zero Accident Program and clearly defines the consequences of not complying with safety procedures. Various situations were characterized as serious misconduct, for which we adopt a zero tolerance policy. We constantly strive to train and raise awareness among employees on respect for all safety rules and prioritize retaining professionals who can adapt to the level of discipline we have established. 62 Nighttime photo of the digester of line two at the Mucuri Unit (BA) S u z a n o P u l p a n d Pa p e r Ratio of base salary to gender – Suzano Papel e Celulose (LA14) 2011 Category Percentage Men / Women Number of salaries Men / Women Women/Men ND ND ND ND ND ND Managers 106% 94% 1,1 0,9 0,1 -0,1 Other management positions 102% 98% 1,0 1,0 0,0 -0,0 Specialists 118% 85% 1,2 0,8 0,2 -0,2 Administrative staff 194% 52% 1,9 0,5 0,9 -0,5 Operational staff 218% 46% 2,2 0,5 1,2 -0,5 Total active employees 112% 89% 1,1 0,9 0,1 -0,1 Executive Officers Women/Men Difference in number of salaries Men / Women Women/Men 2012 Category Percentage Men / Women Executive Officers Number of salaries Women/Men Men / Women Women/Men Difference in number of salaries Men / Women Women/Men ND ND ND ND ND ND Managers 100% 100% 1,0 1,0 -0,0 0,0 Other management positions 189% 53% 1,9 0,5 0,9 -0,5 Specialists 119% 84% 1,2 0,8 0,2 -0,2 Administrative staff 173% 58% 1,7 0,6 0,7 -0,4 Operational staff 193% 52% 1,9 0,5 0,9 -0,5 Total active employees 120% 83% 1,2 0,8 0,2 -0,2 Ratio of base salary by gender – FuturaGene (LA14) 2011 Category Percentage Number of salaries Difference in number of salaries Men / Women Women/Men Men / Women Women/Men Men / Women Women/Men Managers 179% 56% 1,8 0,6 0,8 -0,4 Other management positions 110% 91% 1,1 0,9 0,1 -0,1 Specialists 176% 57% 1,8 0,6 0,8 -0,4 83% 120% 0,8 1,2 -0,2 0,2 Operational staff 100% 100% 1,0 1,0 0,0 0,0 Total active employees 149% 67% 1,5 0,7 0,5 -0,3 Administrative staff 2012 Category Percentage Men / Women Managers Other management positions Specialists Administrative staff Operational staff Total active employees ND Number of salaries Women/Men Men / Women Women/Men ND 0,0 0% Difference in number of salaries Men / Women Women/Men ND ND 131% 76% 1,3 0,8 0,3 -0,2 36% 276% 0,4 2,8 -0,6 1,8 123% 81% 1,2 0,8 0,2 -0,2 83% 121% 0,8 1,2 -0,2 0,2 210% 48% 2,1 0,5 1,1 -0,5 2012 – Concept used: Average Salaries, last month (Dec), only Active employees 63 Sustenta bilidade R e p o r t 2012 Other initiatives were continued, such as the Safety Dialogues Failure to comply with the rules results in and Road Safety programs, which reduced by 14% the number the adoption of accountability measures. This of accidents in the distribution and transport of pulp and paper includes not complying with the priority rules in the state of Bahia. Launched in 2011, the project covers freight of the Linha Mestra program. We also made carriers and drivers and brings together all safety guidelines and Zero important strides in relation to health and Accident Program guidelines in effect at all industrial and forestry quality of life. We strengthened the health units. In 2012, the project was extended to the logistics operation system in southern Bahia by professionalizing in São Paulo state, effectively involving another ten freight carriers. the management of Hospital Paineras in With a monthly average of 2.35 million kilometers traveled, we have Mucuri, and expanded our network in designed a comprehensive plan for the prevention, assistance and the state of Espírito Santo by building and investigation of highway accidents that cover not just our vehicles inaugurating a new clinic in São Mateus. and professionals, but also the outsourced freight carriers that Moreover, several actions were implemented provide services to the Mucuri Unit. Around 200 drivers circulate under the program Viver Bem (Live Well), daily to serve our logistics operations in the state of Bahia. The which includes the pillars of Health (preventive program considers the rules formulated based on the main risks medicine, ergonomics, workplace gymnastics, identified in the processes and on the history of incidents at units, as etc.) and Quality of Life (sports, leisure, self- well as the rules of Brazil’s Traffic Code. Apart from the behavioral knowledge, culture, nutrition, stress reduction, rules that guide the professional, training programs, printed material etc.). The program also provides social and containing guidelines for drivers, special events, lectures and psychological assistance for personal or family inspections are part of the prevention stage of the program. problems that could jeopardize the well-being of employees and their dependents, through the Disque Viver Bem hotline. The assistance is provided by specialized professionals and is maintained confidential. Viver Bem Program Action Region All own employees and service providers All units (*) Various campaigns (Dengue, Women’s and Men’s Health, Anti-smoking, Anti-stress) All own employees and service providers All units Flu shot* Own employees and dependents (4,668 vaccine doses) All units Courses for pregnant women Own employees and dependents (50 participants) All units Labor gymnastics All own employees and service providers Ergonomics process Own employees and service providers Limeira (Industrial), São Paulo (Forestry) and Mucuri (Forestry and Industrial) Units. Health mapping** All own employees and dependents All units Monitoring of chronic illnesses Own employees and dependents (190 cases monitored) Our units in São Paulo Viver Bem Hotline Own employees and dependents (645 on-site services) All units * March to July 2012 ** March to December 2012 64 Employees Involved/Results Quality of Life Week S u z a n o P u l p a n d Pa p e r Jessé dos Reis Paulino, servide provider from Urophilla, at the Alambari (São Paulo) seedling nursery. 65 Sustenta bilidade R e p o r t 2012 OHS – Occupation Health and Safety (LA6, LA7, LA8, LA9) Lost-time injury frequency rate o (LA7) The story was no different in the forestry area. We launched a radio service known as Rádio Florestal to improve our communication with employees working on eucalyptus harvesting. The 120 minutes of radio programming a month Unit Suzano Rio Verde 2010 2011 2012 1,3 1,84 1,40 2 7,94 0 Mucuri 0,56 2,02 1,18 Embu 1,76 1,76 2,05 is recorded on pen drives and broadcast in the harvesters, Limeira – 0,32 0,56 forwarders, cafeterias in the harvest modules and in the UNF SP 0,49 0,98 1,17 maintenance centers. The programming combines music and UNF Limeira – 1,68 *NA UNF BA/MG 0 1,48 0,68 UNF MA 0 0,3 0 0 0,39 0,73 5,2 2,23 0 information on our activities and on our employees outside of work. There were other significant initiatives. With the consolidation of the mechanization process in the state of São Paulo, the risks of accidents associated with manual harvesting were eliminated. At present, employees and service UNF PI SPP-KSR SP Office Total 0 0 0 0,52 1,30 0,82 providers operate high technology equipment fitted with air-conditioned cabins, ergonomic seats and four-point seat belts, all of which ensure the comfort and, above all, safety of our employees. Another measure is supplying hot meals at the work fronts, with all employees receiving meals prepared in restaurants duly licensed by Brazil’s national health surveillance agency (Anvisa) in food preparation and transport. Another measure was partially renewing the personnel transport fleet, bringing greater comfort and safety to employees. In 2012, we reinforced the regular monitoring of all W/o lost-time injury frequency rate (LA7) Unit 2010 2011 3,59 10,81 3,40 0 11,91 11,80 Mucuri 4,11 7,63 5,24 Embu 8,81 7,02 4,10 Suzano Rio Verde Limeira – 4,73 2,53 UNF SP 1,98 3,92 2,15 UNF Limeira – 2,24 *NA UNF BA/MG 0,81 2,71 2,49 1,8 1,19 2,46 3,36 2,34 0,49 2,6 6,69 1,19 UNF MA UNF PI companies, pointing out opportunities for improvement SPP-KSR through investment in new machines, living areas, signage, SP Office PPE and work procedures. This initiative increases the Total 0 0 4,56 2,84 2010 2011 2012 18 79 86 Lost days frequency rate (LA7) results in safety indicators. These practices, which are aligned Unit Suzano 200 167 0 Mucuri 49 45 58 as paying salaries compatible with the region, functions and Embu 26 9 29 market, as well as offering important benefits such as: health Limeira – 5 5 plan, life insurance and Suzano Prev, a defined-contribution UNF SP 2 12 91 pension plan. In 2012, we allocated R$6.12 million to the UNF Limeira – 36 *NA UNF BA/MG 0 114 32 UNF MA 0 40 0 UNF PI 0 23 41 28 11 0 by other forms of recognizing and appreciating work, such private pension plan Brasil Prev, providing coverage to 3,868 employees.(LA3, EC3) Rio Verde SPP-KSR SP Office Total 66 0 2,49 professionalization of our partners and leads to positive with one of our values (Integrity and Safety), are reinforced 2012 0 0 0 19,00 54,70 44,56 S u z a n o P u l p a n d Pa p e r Health and Safety Management – Suzano Papel e Celulose (LA7) Index 2010 2011 2012 Injury Frequency rate (1) 3,01 5,86 3,66 19,94 54,7 44,56 2,1 1,7 1,4 1 0 0 Lost-day rate (2) Absenteeism rate (3) Absolute death figures *Our records follow NBR 14280 standard (1) Injuries with and without lost time – own employees plus service providers. Data include small injuries. (2) Only injuries (does not include debited days) – own employees plus service providers. (3) Includes all absences in the year. The death recorded in 2009 relates to an accident involving an employee of a service provider at the distribution unit of SSP-Nemo in São Paulo. The death recorded in 2010 relates to an own employee at the Suzano Unit in São Paulo Assistance programs for chronic illnesses (LA8) 2010 A Education/Training ** B x Counseling x Prevention / Risk control x Treatment (Health Care) x 2011 C A B x x x x C A B C x x x x 2012 x x x x x x Legend: [A] – Workers [B] – Relatives of workers [C] – Members of the community Rio Verde Unit (São Paulo) 67 Sustenta bilidade R e p o r t 68 2012 S u z a n o P u l p a n d Pa p e r Quality Relationships We also seek to establish transparent and cooperative relations with the state and municipal governments where we operate. Commitment to society We seek to remain connected to Brazil’s major issues and in this the Paper, Pulp, Paperboard, Wood Pulp way contribute to the sustainable development of the nation by for Paper and Paper and Paperboard participating in government and non-governmental organizations Articles Manufacturers Union of the that identify with our values as well as in entities that defend the State of Bahia (Sindipacel), our Investor interests of our industry. Relations Officer organized the Inter-Union We also seek to establish transparent and cooperative relations Symposium on Collective Bargaining by with the state and municipal governments of the locations where Pulp, Paper, Paperboard and Paper Articles we operate. Manufacturers (Sinpel 2012), in which the In 2012, these propositions were manifested through various Bahia State Planning Secretary, among others, actions. Our executive board and the CEO of FuturaGene participated. We also led discussions on ISO participated in the United Nations Conference on Sustainable 26000, the international standard on social Development, also known as Rio+20, held in Rio de Janeiro. responsibility, which was addressed in 2012 Another highlight of the event was serving as the official supplier at an international congress held in Geneva, of paper manufactured with carbon offsets. As chairman of in which our Human Resources Officer shared the experiences gained from the ongoing Capacitar training project in the state of Maranhão. We also participated in the World Business Council for Sustainable Development, actively participating in debates on issues Sonete Augusto dos Santos, teacher from project, Golfinho Cultural Center, Mucuri (Bahia) related to forestry, ecosystems, carbon, water and climate change, among others. 69 Sustenta bilidade R e p o r t 2012 Some of the Suzano Report cut size product line At the Forest Stewardship Council (FSC), we are the world leader in the number of members. We have 12 participating members, which represent each of our business and operational units, which gives us substantial representative power when opining on the issues debated in the forums. One of these, approved in 2012 and for which we strive, was the establishment of a more appropriate standard for small forest producers, which will help in our efforts to certify the producers receiving incentives. We are also members of the Economic year, we partnered with the publishing Chamber of the FSC in Brazil, having chaired the body in 2012. We house Editora Trip to sponsor the Trip also preside over Florestar São Paulo – the São Paulo Association Transformadores Award, which is given to of Planted Forest Producers. During the year, we participated in the ten individuals who dedicate their time, 15th Brazilian Packaging Congress, held in São Paulo, to strengthen effort and talent to making a difference our relationship with segments focused on developing innovation in and inspiring positive changes in the world. the industry and with suppliers to industries such as food, cosmetics/ The event ceremony held in São Paulo perfumes, and pharmaceuticals. At the 22nd International Book Fair reinforced the discussion on the topics and held in São Paulo, we once again invested in forging partnerships initiatives adopted to restore a balance in the with publishers to further improve the experience of reading books environment and improve living conditions. published on Pólen® paper. This paper brand was also highlighted 70 In the same vein, for the fifth consecutive Both our facilities and products are also at some of Brazil’s most important literary events, such as the Paraty used to strengthen relations with stakeholders Book Festival and the alliance with the Livraria Cultura book retailer and to multiply positive messages. During chain on International Book Day (April 23), when reading lounges the year, a batch of 42 exchange students were erected at stores in the cities of São Paulo and Rio de Janeiro. from the master’s program in international Representatives from the Paper and Pulp Business units also held management of FGV-EAESP visited the Embu meetings with clients and suppliers and participated in domestic and Unit to learn about the recycling of the long- international events that discussed the challenges and prospects of life packaging used in the manufacture of their areas. One of these was the Forum for Integrated Solutions in paperboard and ecological roofing tiles. The São Paulo, which discusses trends in packaging for manufacturers and project, implemented in partnership with addressed the topic of “Sustainable Future”. TetraPak®, Ciclo® and Johnson & Johnson® S u z a n o P u l p a n d Pa p e r to create an innovative packaging solution with at least 30% of its Mata do Uru, a 131-hectare Private Natural composition containing post-consumer scrap for the Band-Aid product, Heritage Reserve (RPPN) in the Lapa region of originated a production line with the capacity to process one thousand the state of Paraná. ® tons of long-life packaging. Considering the controversies involving The initiative involves nearly 4,000 recyclable material collectors our industry, we also seek to express and from 80 recycling cooperatives and reduces pressure on landfills in contribute to the prevalence of legality, metropolitan areas, with the potential to remove more than 37 million always backed by industry associations and long-life packages from circulation. FuturaGene also received, at /or government agencies. This is the case Itapetininga (SP), the New Generation Plantation group from the WWF, of the deviation of tax-exempt paper from who were interested in learning about and discussing our new approach its intended purpose, i.e., the purchase in biotechnology. of a product under the false claim of its As a way of including sustainability concepts in the daily lives of use for educational purposes in order to children, we redesigned the packaging of the Suzano Report Senninha enjoy tax exemption. We partner with paper, including tips on preserving the planet in order to emphasize other companies in the industry under the importance of environmental conservation and conscientious the aegis of the Brazilian Pulp and Paper consumption. The product plays an important social role: when a Association (Bracelpa) to combat illegal customer buys it, 100% of the income from its licensing is allocated practices that result in tax evasion and other to the educational programs of the Ayrton Senna Institute, which losses. One of the year’s achievements was helps millions of kids and youth around Brazil. The same year, we the nationwide expansion of Recopi, the participated in the project organized by Posigraf/Grupo Positivo and the system created by the Finance Ministry of Society for Research in Wildlife and Environmental Education (SPVS) the state of São Paulo for the recognition, for the launch of the book “Mata do Uru”. We supplied the Alta by tax authorities, of the tax-exemption Alvura and Couché Suzano papers for printing 3,000 issues of the status of paper destined for printing books, book, which were distributed at no charge to libraries, companies and newspapers and periodicals. In the year, we opinion makers. The book documents the history and biodiversity of also commemorated the requirement that ® ® ® In May, we participated in Drupa, the largest fair in the printing industry, which is held in Germany every four years. In 2012, the fair was visited by about 314,000 people 71 Sustenta bilidade R e p o r t paper packages contain a label indicating tax exemption, a demand Council for Economic and Social Development we supported through Bracelpa. (Codes), we participated in the Plan for Another issue in which we are involved is the search for a solution the Sustainable Development of Costa das to the practice of theft and burning of native wood and eucalyptus to Baleias. Launched in May, the project lays fuel the illegal charcoal trade in Bahia, which, among other damages, down the strategies for 13 municipalities involved the crimes of child labor and tax evasion, which is estimated in the Costa das Baleias region, including by authorities at R$1 billion between 2009 and 2011. Through entities objectives, partnerships, targets and indicators representing the industry, we supported and brought the issue to related to economic growth, support to small the attention of the Public Prosecutor’s Office of Bahia, the state entrepreneurs, employment and income government, the police, (especially Caema, the police force entrusted generation, quality of life, social, ethnic and with protecting the Atlantic Forest), whose actions practically eliminated racial balance, social and territorial balance the problem: theft of wood in the state declined 98.8% in relation to and strengthening the region’s cultural previous years. We worked hard on this achievement by creating a Wood identities. (SO5) Theft Crisis Committee in early 2011, and conceiving and creating the We are also members of the Forestry Interactive Safety Council of Southern Bahia (Cisba). We also evaluated Dialogue, an independent movement that strategies to mitigate the effects of this action by expanding the projects promotes effective actions associated with focused on boosting income generation for local communities, which forestry production, expanding the scale led nearly 2,000 families that before were involved in the illegal charcoal of conservation efforts and environmental trade to shift to new livelihoods. (HR6) restoration in order to benefit its members and In partnership with the state government of Bahia, through the 72 2012 society. (4.12, 4.13) Global Compact www.pactoglobal.org.br Eight Millennium Goals www.objetivosdomilenio.org.br Business Compact for Integrity and Against Corruption www.ethos.org.br National Compact for Conservation and Sustainable Use of Biodiversity (MEB) www.ethos.org.br Sustainable Amazon Forum www.mebbrasil.org.br Ethos Institute for Business and Social Responsibility www.forumamazoniasustentavel.org.br Brazilian Business Council for Sustainable Development (CEBDS) www.ethos.org.br Brazilian Pulp and Paper Association (Bracelpa) www.cebeds.org.br Brazilian Pulp and Paper Technical Association (ABTCP) www.bracelpa.org.br Brazilian Planted Forest Producers Association (Abraf) www.abtcp.org.br Florestar São Paulo www.abraflor.org.br Forest Stewardship Council – FSC www.floresta.org.br World Business Council for Sustainable Development (WBCSD) www.fsc.org.br The Nature Conservancy (TNC) www.wbcsd.org World Wide Fund for Nature (WWF) http://portugues.tnc.org/tnc-no-mundo/americas/brasil/index.htm The 2oC Challenge Communiqué www.wwf.org.br The 2°C Challenge Communiqué www.2degreecommunique.com/The-Communique.aspx S u z a n o P u l p a n d Pa p e r Jéssica Fernanda R. O. de Vita, member of artifacts course at Mucuri Unit (Bahia) 73 Sustenta bilidade R e p o r t 2012 Suppliers At the end of 2012, there were 6,200 suppliers registered in our systems. In this group, we give priority to contracting local partners as a way of contributing to the development of the regions where we operate. So much so that around 40% of the suppliers involved in the construction of the Imperatriz Unit are from Maranhão. (EC6) To encourage sustainable practices, for the second consecutive year, in 2012 we held the Suzano Carbon Disclosure Project (CDP) Supply Chain Workshop, in which 52 people from 14 companies (strategic suppliers) discussed the theme of “Climate Change”. Our objective was to encourage them to report actions related to the management of greenhouse gas (GHG) emissions, as well as to identify the related risks and opportunities. “In 2012, we held the Suzano Carbon Disclosure Project Supply Chain Workshop, in which 52 people from 14 companies (strategic suppliers) discussed the theme of “Climate Change”. Employee Maria Telma da Silva and Joice Grave Barretto, at the Salvador office (Bahia) 74 SSuuz zaannoo PPa uplepl ae n Cd e Pl ua lpoesre Active suppliers by region (EC6) States 2009 2010 2011 UNIT % UNIT % UNIT 2012 % UNIT % SP 2019 85% 2425 66% 3609 58% 3692 59% BA 181 8% 308 8% 750 12% 746 12% ES 170 7% 232 6% 453 7% 450 7% MG – – 126 3% 225 4% 213 3% MA – – 149 4% 492 8% 501 8% PI – – 103 3% 213 3% 137 2% TO – – 7 0% 33 1% 25 0% Other – – 301 8% 485 8% 484 8% Total 2370 3651 6260 6248 One new development at the event was the global warming game called Celsius, in which each participant represents one company that must implement initiatives to reduce its carbon emissions and influence the government and lawmakers to enact laws to promote a green economy. (EC2) As a way of recognizing the top performing partners in the previous year, besides stimulating and sharing our practices, beliefs and values, we held the 6th Suzano Supplier Awards, whose evaluation process is based on criteria established by the National Quality Foundation (FNQ). EKA Chemicals do Brasil was elected the Supplier of the Year. The winners in the other categories were EKA Chemicals do Brasil (Raw Materials), Tide Prestação de Serviço Florestal (Services), Ecolab Química 6 Reward Suzano Suppliers 75 Sustenta bilidade R e p o r t Employee Mariana Zayat Chammas, at the São Paulo office Employee Cleber Fernando de Pieri, at the Limeira Unit (São Paulo) e Logística and AGV Logística (Innovation). We also registered important achievements in supplier management during the year. Based on the need to increase the number of partners to operate in Maranhão, we Employee Monica Regina Melloi, at the Rio Verde Unit (São Paulo) Amount spent per supplier – 2012 (EC6) State Amount % ES 3.436.755 43% conducted successful negotiations and signed a higher number of long- SP 2.386.987 30% term contracts with fewer, albeit large, suppliers. This is our strategy for BA 678.355 8% reducing costs, which is one of the objectives of the Productivity Project. MA 554.766 7% In this regard, we signed two important five-year logistics contracts, PR 349.658 4% MG 293.638 4% 84.433 1% 203.055 3% already envisioning the export of the pulp produced in Maranhão. Another important initiative in the period was expanding the formalization of our relations, i.e., the contracts signed, which is important from the viewpoint of compliance. We prepared a schedule and made significant progress in regulations, in line with the objectives of standardization of processes and professionalization. We also consolidated the management of third parties that provide fixed services at all units of Suzano, management related to compliance with labor obligations of the companies contracted and which involves the approval of the release of monthly access and control of labor obligations. All companies that provide fixed services at Suzano’s units are controlled on a monthly basis, which numbers around 10,000 persons from 300 companies. 76 2012 RJ Other Total 7.987.647 S u z a n o P u l p a n d Pa p e r Employee Jefferson Manoel da Silva Santos, at the SPP-KSR (São Paulo) Employee Sheila Borgato Rulim, at the Suzano Unit (São Paulo) Employee Ronaldo Jardim Dias, at the seedling nursery in Itabatã (Bahia) “ To a s s u r e o u r c l i e n t s e x c e l l e n t s e r v i c e , w e t r a i n a n d encourage the distribution network through initiatives such as the Distributor Excellence Program." Clients As with suppliers, we seek to encourage our clients to adopt good practices in the three dimensions of sustainability (economic, social and environmental) in the management of their companies. We also seek to meet the specific needs of clients on these themes. Integration with buyers, in turn, is strengthened through actions such as the SPP-KSR Olympics, a game organized by the One example of this practice in 2012 was the development and Paper Business Unit for corporate clients, in a supply to the airport services company Infraero of paper on which playful allusion to the London Olympic Games. the company’s Sustainability Report was printed. The recycled paper Every week, the ranking, drawn up based was produced from the processing of four tons of waste collected on purchase figures, was announced to the at Congonhas Airport in São Paulo. This action is aligned with our participants. The five winners received awards. sustainable development principles. To assure clients excellent service, Similarly, we extended our Visitor Program in 2012 we further strengthened the distribution network through to clients, who can learn about our Mucuri, initiatives such as the Distributor Excellence Program (PED). The Suzano and Limeira units, through monitored program will enable us to identify opportunities that help increase circuits. The program, which also targets our competitiveness in the production, sale and distribution of paper employees and their families and local and for improving relations with this important sales channel. Sixty communities, received 1,136 visitors in 2012, distributors and 17 sales executives dedicated exclusively to the who had the opportunity to learn about our initiative participate in the PED. production processes and our social and environmental initiatives. 77 Sustenta bilidade R e p o r t 78 2012 S u z a n o P u l p a n d Pa p e r Social and Environmental Responsibility “In the field of education, two initiatives deserve special mention: the Educar e Formar Program, in partnership with the Ayrton Senna Institute, and Escolas Formare.” Commitment to communities To identify and meet the needs and expectations of the communities with whom we interact and maintain participative and perennial relationships, we rely on several tools. This is the case of communities where our relationships date back several years (states of Bahia, Espírito Santo and São Paulo) or of cases where we are initiating a closer relationship due to the construction of our new industrial unit in Imperatriz, Maranhão. One of these is the Socio-Environmental Diagnosis, as manifested through the book “Suzano em Campo”, whereby we interact with communities and register and respond to requests, basing our future actions on the issues raised. Another initiative is the Stakeholder System (Sispart) software to register and monitor the issues raised by our stakeholders, which in 2012 registered 949 requests related to issues on the environment, education, culture, social assistance and income generation, among others. Of the total requests, 328 were met through funds amounting to some R$410,000, which were invested in meeting occasional requests from communities. (EC8) We also conducted the Characterization of Traditional Communities Inventory (ICTT) based on interviews by an anthropologist with the communities, who is responsible for identifying and characterizing groups with traditional traits, such as Species popularly known as Cipó de Escada, found in our preservation area in Açailândia (MA) babassu nut breakers, small rural producers and quilombo settlements. We maintain a respectful relationship with these communities, with no rights violations registered in the year, which is based on support for initiatives focused on the development of their activities. (HR9) 79 Sustenta bilidade R e p o r t Completing the mapping initiatives is the Social Inventory, which is adopted within a radius of up to three kilometers from all our operations scheduled for inauguration, whose objective is to identify the characteristics of the local communities and social assets in order to take appropriate action. In 2012, these initiatives, together with the Social Dialogues and Conversation Rounds, involved more than 16,000 people in the five main states where we operate. (SO1) 80 São Paulo 16 Social Dialogues on local development, income generation and improvement of roads involved 287 people in eight cities; 66 Conversation Rounds in cities where we have direct influence on plantation. Maranhão 160 Conversation Rounds in communities gathered some 2,600 people; 44 Social Inventories and 55 Social Impact Matrices were applied. Piauí 12,000 people from 71 rural communities close to our 26 farms were involved in the Social Inventory and Social Impact Matrix. Bahia 20 Internal Social and Environmental Reports (RISA), forest pre-operations, with dialogues in the communities and agreements for mitigation of operating impacts involved some 1,300 people; 170 meetings in the communities where we implement projects involved 380 people. 2012 S u z a n o P u l p a n d Pa p e r Afrodimbe group from project, Golfinho Cultural Center, Mucuri (Bahia) 81 Sustenta bilidade R e p o r t Based on all these diagnostics, we created, adjusted, improved or 2012 Meanwhile, the Educar e Formar program, intensified our social actions, which are concentrated in the areas of which is developed in partnership with the education, environment, as well as job creation and income generation Ayrton Senna Institute and local governments, for local development. Furthermore, to guide these initiatives, we provides learning support to children in primary implemented the Sustainability Master Plan, which was reviewed in 2012 education, trains public school coordinators and by Suzano's Sustainability Advisory Committee to further align it with our teachers and promotes improvements at school business and reflect the macro and microeconomic scenarios, based on units. In 2012, 159,283 students and 11,419 which we adjust our operating strategy. teachers benefited from the program. Another In the field of education, two initiatives deserve special mention: Escola action on the same lines is Education for Formare and Educar e Formar. The objective of Escola Formare is to offer Sustainability, which served eight municipalities vocational training to youth from low-income families through one year in the interior of São Paulo state during the courses administered at our industrial units by volunteer employees year and trained 220 teachers who, through and service providers. Apart from vocational training, students receive onsite workshops and distance learning as stipend equivalent to half a minimum wage, outpatient service, life activities, received information on the theme for insurance, meals, transport, educational materials and uniforms. In seven disseminating among their students. years, 385 students have already received training in Suzano (SP), Embu To support the actions implemented (SP), Limeira (SP) and Mucuri (BA). In 2012, 1,685 hours of voluntary by the community’s own institutions, we service were dedicated to this initiative. (SO5) announced a public tender inviting proposals for sustainable projects. Of the 15 applicants, three were selected and will receive funds Project Biblioteca Comunitária Ler é Preciso at Açalândia (Maranhão) for projects. In the same municipalities, we also conducted Social Dialogue meetings to identify opportunities for actions focused on development and involving local leaders. 82 S u z a n o P u l p a n d Pa p e r We also entered into a partnership with the Federal University of Maranhão (UFMA) for the project Jovens com a Bola Toda, which focuses on education through sport and was launched nine years ago in partnership with the Ayrton Senna Institute. The initiative has already served nearly 2,000 children and youth from needy communities. In 2012, with our support, around 180 people participated in classes on soccer, volleyball, swimming, handball and track and field. Another project through which we offer opportunities for improvement and income generation for communities in rural areas Objects produced from certified eucalyptus timber through the Formas da Natureza Project, supported by our company in the Picadão Bahia region and remote locations is Digital Inclusion. The project increases access to information technology through workshops for training and maintaining recognition of projects and actions already Community Telecenters. At the end of 2012, ten units were operational in progress that are supported by partner in the Baixo Parnaíba Maranhense region, serving more than 7,000 entities. The project already benefited the people a year. One of our income generation projects is Community extraction reserves Extremo Norte in Tocantins Agriculture, under which we launched the Agro-sustainable phase in and Ciriaco in Cidelândia (MA), as well as 2012 in the region of Urbano Santos (MA). the Association of Babassu Nut Breakers in The initiative aims to contribute to the development of the communities in the Baixo Parnaíba Maranhense region. Since its launch, the project has Petrolina and Altamira in Imperatriz (MA). The organization is formed by 60 women benefited 350 families of small farmers, totaling around 1,750 people. who contribute to the household income The program consists of two phases. One of these is Campo Agrícola, through oil and pitch production. Apart which focuses on management, community organization, improvement of from the fact that the raw material is entirely production and mapping distribution channels. collected in our areas, we support the project In this regard, in 2012 alone, nearly 26 tons of food were collected. by holding meetings to define actions to The next phase, which occurs during the off season, encourages the increase production, such as donating the planting of vegetables and fruit trees, as well as the raising of small machines for grinding the coconut and animals, using irrigation and recycling byproducts. Meanwhile, the renovating and expanding the organization’s Sustainable Extractivism project aims to strengthen the development head office, where the community meets and of plant extraction and other production systems of family farming, participates in courses and training programs. providing the participating groups (especially traditional peoples and Another action targeted at local communities) with conditions for local development while strengthening development is Sustainable Fish Farming, rural production. Actions are taken based on dialogue and the which in 2012 increased the number of families served in Bahia and Espírito Santo from 23 to 70. The program launched in 2011 in Mucuri (BA) has since reached the communities of Rio do Sul and Oliveira Costa (BA), and Córrego do Macuco (ES). Initial estimates put sales, which started at the end of the year, at two tons a month. 83 Sustenta bilidade R e p o r t 2012 “The The initiative involves the breeding of tilapia fish in networks of tanks by fishermen on the Mucuri River who are members of the local Fishermen Colony. With 14 tanks installed, the 23 families covered by the initiative initially sold around four tons of fish a month, earning an average monthly income equivalent to one minimum wage. The Apiculture project reached the communities of Pau da Garrafa, Rancho Queimado, Juerana and Cravilina and the communities of Cruzelândia and Nova Brasília in Picadão in Bahia. The action also focuses on income generation through the production of pollen and honey from the beehives installed in our forests. Each family dedicates around one hour daily to this activity, earning around R$ 600.00 a month. The project was launched in 2011 among beekeeper groups in the We contributed R$50 million to extend a few of these and other social projects to communities around the Imperatriz Unit. As a result, some 71,000 people benefited from educational (libraries) and cultural (Bumba Meu Boi) actions, as well as from economic development through programs such as Community Agriculture and Sustainable Extractivism. (For more information on these and other projects implemented or sponsored by us please go to www.suzano.com.br). In addition to all the mechanisms we implemented to gauge the expectations of communities with regard to our operations, we have a communication channel (Suzano Responde) through which we clarify doubts and receive suggestions, comments and criticism, with this information used to improve our activities. The channel can be accessed by telephone (0800-095-9093) or e-mail (suzanoresponde@suzano. com.br). In 2012, 4,518 contacts were made by the community, with 1,230 by telephone and 3,288 by e-mail, of which complaints represented 1.2%. The main issues were maintenance of roads, dust, wood transport, among other issues. Suzano Answers Information about the company Information about products Nº of requests 2.081 46,1% 755 16,7% Request for information (other) 720 15,9% 551 12,2% Complaints 53 1,2% Suggestions 47 1,0% Compliments 6 0,1% 305 6,8% 4.518 84 % Request for assistance Other channel Suzano Responde clarifies doubts and receives suggestions, comments and communities of Igrejinha and Volta Miúda. Motivation communication criticism, with this information used to improve our activities.” S u z a n o P u l p a n d Pa p e r Eucalyptus seedlings at FuturaGene’s greenhouse in Itapetininga (SP) 85 Sustenta bilidade R e p o r t 2012 Ecofuturo A Public-Interest Organization of Civil Society (OSCIP), the Ecofuturo Another initiative is the Education for Institute, which we maintain, has operated since 1999 in the generation Sustainability Ecofuturo Award which, in and dissemination of knowledge and practices that contribute to jointly its third edition, encouraged teachers and building the culture of sustainability. It develops a series of initiatives social educators to discuss with their students focused on education and environmental conservation. One of these, Rio+20, whose clarion call was “Why should developed in partnership with the National Children and Youth Book I care?". The initiative reached 25 Brazilian Foundation (FNLIJ), is the Biblioteca Comunitária Ler é Preciso (Need states, with 306 applications received from to Read Community Library), which encourages and strengthens the educators from primary and secondary articulation of social players from the communities for installing and schools, universities and prisons. The award maintaining libraries as spaces for accessing knowledge that contribute to resulted in a database of good practices and the development of reading and writing skills. As part of the project, three will release a printed and digital publication community libraries were inaugurated and two were renovated in 2012. containing the ten winning ideas. Thus, 91 units are operational in 11 Brazilian states, 25 of them in public schools, and receive around 45,000 users every month. Since the launch of the initiative, ten libraries have also been renovated. The project includes the Management and Sustainability Workshop, whose objective is to provide guidance on the means to ensure the sustainability of spaces and which trained 200 people in the year. Project Primavera Ler é Preciso from Ecofuturo Institute. 86 S u z a n o P u l p a n d Pa p e r Thanks to an initiative of Ecofuturo, October 12 was declared National Reading Day through a law approved in 2009 by then Brazilian President Luiz Inácio Lula da Silva. Ecofuturo encourages reading education starting in early childhood. In 2012, it maintained the theme “Every day is a day for reading” in actions that reinforce the idea that reading includes, recreates, expands, teaches, transforms, builds and promotes citizenship and ecological awareness. In order to help make Law 12,244/10 effective, which determines that by December 2020 all educational institutions must have a library, Ecofuturo, in partnership with organizations that pave the way in education, reading and library works, launched the "I want my library" campaign. In three months, the initiative resulted in 15,000 people visiting the campaign website www. euquerominhabiblioteca.org.br. Parque das Neblinas is a 6,100 hectare reserve managed by the Ecofuturo Institute, which is located Itatinga river, at Parque das Neblinas park (São Paulo) on the border between the municipalities of Mogi das Cruzes and Bertioga in São Paulo. alliance with the local community and research. The highlights of The reserve, which is adjacent to the Serra do 2012 were the establishment of the first training center for park Mar State Park, is situated in a region declared rangers, who are essential for managing the conservation units, the a World Heritage Site by UNESCO and, since organization of wood harvesting under a low-impact regime and 2006, has been recognized as an Advanced community management of the Juçara palm trees, which involves Post of the Atlantic Forest Biosphere Reserve. 60 rural landowners surrounding the park and included 16 technical The Reserve is situated inside the Sertão dos workshops and the distribution of 4.5 million seeds. During the year, Freires Farm owned by Suzano Papel e Celulose. Parque das Neblinas received 2,400 students and teachers from the Its objective is to develop management public schools in Mogi das Cruzes (SP) covered by the Programa models that can serve as a reference for other Escolar program. The Reservas Ecofuturo program aims to diagnose, conservation units. In addition to actions implement and manage public and private areas with important aimed at restoring and conserving the Atlantic conservation value, thereby ensuring the protection and recovery of the Forest, the park implements programs focused natural environment together with the sustainable management and on environmental education, ecotourism, social development of the local communities. It ended the year with sustainable management of natural resources, projects in progress in six Brazilian states. 87 Sustenta bilidade R e p o r t 88 2012 S u z a n o P u l p a n d Pa p e r Leadership “We have allocated more than 317,000 hectares to Environmental Conservation (Permanent Preservation Areas, Legal Reserves and other areas).” Environment Our commitment to environmental conservation and the 2012 we invested more than R$19 million conscientious use of natural resources is reflected in various facts. in operational improvements that can We have 377,000 hectares certified by the Forest Stewardship reduce the impacts of our activities.(EN26). Council® (FSC) and offer the market a portfolio of products with At our Forestry unit, we have allocated their carbon footprints offset. over 317,000 hectares to Permanent Apart from FSC, our scope of certifications includes ISO 9001 Preservation Areas (APP), Legal Reserves (quality of management), ISO 14001 (quality of environmental (RL) and other areas, which signifies management), OHSAS 18001 (workplace health and safety), and that 39% of our areas are allocated Cerflor (Brazilian Forestry Certification Program), which certifies to environmental conservation. During forestry management and the custody chain. the year, we concluded a Biodiversity We are still among the 80 global signatories to The 2oC Challenge Conservation macro plan in partnership Communiqué, which undertakes to implement actions that reduce with the NGO The Nature Conservancy global warming and greenhouse gas (GHG) emissions. Through the (TNC), whose objective is to ensure Suzano Report® line of products, we were also recognized by WWF, that native areas on our properties are the largest global environmental network, as one of the printing and adequately managed and monitored from writing paper producers with the best environmental practices in the the viewpoint of biodiversity. The initiative world and the best in the Americas. To live up to this commitment, in covers the Atlantic Forest, Cerrado, Caatinga and Legal Amazonia biomes. Employee Lafayete Lopes dos Santos, in the area of eucalyptus plantation, Mucuri (Bahia) The actions taken as part of the alliance with TNC were extended to all our areas of operation. 89 Sustenta bilidade R e p o r t 2012 Management of liquid and solid waste (EN21, EN22, EN24 e EN25) Mucuri Unit 2009 Total water disposal by quality and destination Total weight of waste, by type and disposal method Weight of transported, imported, exported, or treated waste deemed hazardous under the Basel Convention. Discharge of liquid waste (Rio Mucuri)****** Organic load (DBO5) in final effluent (total) Chemical demand of oxygen (DQO) in final effluent (total) Absorbable Halogens (AOx) in final effluent (total) Hazardous waste Non-hazardous waste Recycling Recovery Incineration Landfill Storage at site Composting 5.278 m 2010 3 2011 4.892 m 3 2012 3 5.006 m 5.130 m3 1.684 t 1.295 t 986 t 2.322 t 19.795 t 19.668 t 22.727 t 22.343 t 85 t 125 t 133 t 138 t 52,8 t 262.397 t 7.671 t 37.838 t 12.361 t 70.748 t 133.779 t – 15,4 t 398.753 t 6.986 t – – 221.936 t 50.745 t – 13,9 t 428.177 t 3.209 t – – 251.727 t – – 43,2 t 486.726 t 6.973 t – – 195.331 t – 127.866 t Suzano Unit 2009 Total water disposal by quality and destination Total weight of waste, by type and disposal method Weight of transported, imported, exported, or treated waste deemed hazardous under the Basel Convention. Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by discharges of water and runoff 90 Discharge of liquid waste (Rio Mucuri)****** Organic load (DBO5) in final effluent (total) Chemical demand of oxygen (DQO) in final effluent (total) Absorbable Halogens (AOx) in final effluent (total) Hazardous waste Non-hazardous waste Reuse Recycling Composting Recovery Incineration Landfill Local storage Discharge of Rio Tietê Discharge of untreated liquid waste (Rio Tietê) 2010 2011 2012 2.850 m3 2.617 m3 2.722 m3 2.795 m3 649 t 640 t 643 t 629 t 4.377 t 4.021 t 4.204 t 4.445 t 24,31 t 18,00 t 23,85 t não analisado 27 t 86.672 t 59.586 t – NA – 7,64 t 27.119 t 30.000 t 91.067 m3/h 63 t 113.168 t 36.236 t 33.266 t NA 10.757 t 0,02 t 33.299 t 33.299 t 114.000 m3/h 74 t 125.061 t 18.744 t 89.621 t 1694,7 t 11.970 t 3,62 t 33.753 t 41.339 t 97.920 m3/h 79 t 134.512 t 47.501 t 2.850 m3/h 2.617 m3/h 2.722,8 m3/h 2.795 m3/h 50.490 t 0,05 t 15.406 t 41.339 t – S u z a n o P u l p a n d Pa p e r Rio Verde Unit 2009 Total water disposal by quality and destination Total weight of waste, by type and disposal method Weight of transported, imported, exported, or treated waste deemed hazardous under the Basel Convention. Total discharge of liquid waste (Rio Tietê) Organic load (DBO5) in final effluent (total) Chemical demand of oxygen (DQO) in final effluent (total) Hazardous waste Non-hazardous waste Reuse Recycling Recovery Incineration 2010 842.815 m Landfill 3 2011 796.360 m 3 2012 3 630.720 m 622.225 m3 118 t 64 t 63 t 60 t 301 t 144 t 142 t 122,5 t <1 t 2.086 t 1.334 t – – <1t 3,28 t * 9.571 t 0 8.288 t 744 t 0,01 <1 t 3.010 t 0 2.861 t 915 t – 1,2 t 7.949 t 0 7.594 t – – 390,8 t 427,48 t 295,6 t 44 t – – – 43,55 t Composting Embu Unit 2009 Total water discharge by quality and destination Total weight of waste, by type and disposal method Weight of transported, imported, exported, or treated waste deemed hazardous under the Basel Convention. Organic load (DBO5) in final effluent (total) Chemical demand of oxygen (DQO) in final effluent (total) Hazardous waste Non-hazardous waste Reuse Recycling Incineration Landfill Local Storage Composting 2010 2011 2012 2,5 t 1,9 t 2,7 t 9,7 t 37,6 t 33,3 t 31,4 t 44,4 t 3,0 t 2.057 t 519 t 809,5 t 0,0035 t 2.057 t 2,96 t – 85,5 t 3.035 t 233 t 954,2 t 1.84 t 1.979 t 0 – 2,4 t 1.990 t 251 t 1.125,0 t – 1.990 t 2,40 t – 1,9 t 6.390 t 206,3 t 3.817,4 t – 409 t 1,9 t 1.957 t Limeira Unit 2009 Total water disposal by quality and destination Total weight of waste, by type and disposal method Weight of transported, imported, exported, or treated waste deemed hazardous under the Basel Convention. Total discharge of liquid waste (Rio Tietê) Organic load (DBO5) in final effluent (total) Chemical demand of oxygen (DQO) in final effluent (total) Hazardous waste Non-hazardous waste Recycling Composting Landfill 2010 2011 2012 2.767 t 2.782 t 2.799 t 2.241 t 243,91 t 259,05 t 225,63 t 214,7 t 5.742,18 t 6.138,57 t 5.011,67 t 5.728 t 74,44 t 151.719,85 t 131,00 t 91.023,78 t 70,50 t 157.427,08 t 134,52 t 108.231,41 t 89,69 t 108.777,30 t 125,16 t 97.167 t 44,99 t 98.334 t 126,03 t 78.345 t 1.350,59 t 1.471,82 t 1.779,54 t 749,32 t * Change in quantity of hazardous waste in the Limeira Unit in relation to 2010 was reported in Kg. Unit of measurement was changed to tons. Effluent Treatment (ETE) Limeira Unit (São Paulo) 91 Sustenta bilidade R e p o r t 2012 Water Treatment plant (ETA) Mucuri Unit (Bahia) We are in the conclusion phase of the Management Plan for the Entre • Machinery and equipment maintenance is Rios Private Natural Heritage Reserve (RPPN) located in Bofete (SP) on an carried out far away from waterways. We area of 302.97 hectares on a farm owned by us. use containment trays and, in the event of a The conversion of the area into an RPPN, in 2010, was an important step towards ensuring the conservation of the Cerrado biome in the region, but the orderly planning of initiatives has been sent to the waste center; • Pesticides are applied only in normal fundamental for protecting natural resources and reaping the benefits weather conditions (when there is no wind). resulting from such measures. The preparation of the Management Pesticide application equipment is calibrated Plan, which lays down the strategic guidelines in this regard, involved frequently to ensure the application of the 25 specialists from six thematic areas. In partnership with the Ecology recommended dosage. and Forestry Restoration Laboratory of the Escola de Agricultura • The harvesting of trees is directed towards Luiz de Queiroz (Esalq/USP), we launched an experimental project the eucalyptus plantations, thereby avoiding to restore the areas of the Legal Reserve with species that can bring damage to the remaining native vegetation; economic benefits. For this, we allocated 10.37 hectares in Mucuri • We constantly provide guidelines to teams (BA), in which 40 species were planted in 12 restoration models on the impacts of their activities and the for the purpose of analysis. We also have adopted various forestry precautions needed; practices to reduce the impacts of our activities, such as ecological corridors and other practices: 92 spill, the material is collected, identified and (EN12, EN13, EN14) S u z a n o P u l p a n d Pa p e r Water management (EN 9) Mucuri Unit 2009 Total withdrawal by source Total volume withdrawn from Rio Mucuri Output of Rio Mucuri Water sources significantly affected by withdrawal of water Water consumption (output) 2010 2011 2012 53.584.020 m3 52.754.560 m³ 55.421.935 m3 55.566.815 m3 385.200 m3/h 214.920 m3/h 231.120 m3/h 162.720m3/h 6117 m3/h 6022 m3/h 6.327 m3/h 6.343 m3/h 1,6 2,8 2,7 3,9 % of withdrawal Suzano Industrial Unit 2009 Total withdrawal by source Total volume withdrawn from Rio Tietê* Output of Rio Tietê (total)* Water sources significantly affected by withdrawal of water Water consumption (output) 2010 2011 2012 24.108.936 m3 24.342.846 m3** 24.761.564 m3 24.098.760 m3 91.067 m3/h 114.000 m3/h 97.920 m3/h 23.912 m3/h 2.752 m3/h 2.770 m3/h 2713 m3/h 2.742 m3/h – 8,5 9,5 10 % of withdrawal Rio Verde Industria Unit 2009 Total withdrawal by source Water sources significantly affected by withdrawal of water Total volume withdrawn from Rio Tietê* Water consumption (output)** 2010 2011 2012 926.091 m3 882.454 m3 587.267 m3 734.453 m3 105 m3/h 100 m3/h 67 m3/h 84 m3/h Embu Industrial Unit 2009 Total withdrawal by source Total volume withdrawn from Rio Embu-Mirim Consumption of underground water (total) Water consumption (output) 2010 2011 2012 301.287 m3 285.395 m3 282.906 m3 272.444 m3 22.562 m3 23.403 m3 29.973 m3 32.175 m3 323.849 m3 308.798 m3 312.879 m3 304.619 m3 Limeira Industrial Unit 2009 Total withdrawal by source Water sources significantly affected by withdrawal of water Total volume withdrawn from Rio Piracicaba Output of Rio Piracicaba (total) Water consumption (output) 2010 2011 2012 26.020.420 m3 26.532.722 m3 26.699.447 m3 26.823.988 m3 324.308 m3/h 419.949 m3/h 246.418 m3/h 281.512 m3/h 309,77 m3/h 315,87 m3/h 317,85 m3/h 319,33 m3/h 0,92% 0,73 % 1,25 % 1,10 % % of withdrawal Forestry Unit*** Total withdrawal by source – São Paulo Total withdrawal by source – Bahia Specific consumption Artesian Well – Viveiro SP Alambari Specific consumption Dam – Viveiro SP Araraquara Specific consumption Artesian Well – Viveiro BA 2009 2010 2011 2012 2,19 m3/milheiro 3,31 m3/milheiro 3,10 m3/milheiro 2,49 m3/milheiro 7,00 m3/milheiro 6,00 m3/milheiro 6,70 m3/milheiro 3,59 m3/milheiro 4,13 m3/milheiro 4,30 m3/milheiro 4,40 m³/ milheiro 4,35 m3/milheiro 93 Sustenta bilidade R e p o r t 2012 Consumption of Materials (EN1, EN2) Mucuri Unt 2009 Consumption of wood (total) Renewable Materials used by weight and volume No Renewable 2011 2012 2.841.126 t 2.817.829 t 2.973.921 t - 11.142 t 11.640 t 11.033 t 281.129 t 299.063 t 345.695 t 284.252 t 2.836.901 t 3.151.331 t 3.175.164 t 3.269.206 t 90 91 89 91 Consumption of starch, postconsumption scrap, pre-consumption scrap, primary iodine and pulp Consumption of caustic soda, sodium sulfate, quicklime, calcium carbonate, optical bleach, chlorine dioxide, chlorate and sulfuric acid (total) Consumption of materials (total) 2010 2.544.449 t Percentage of renewable materials Suzano Unt 2009 Consumption of wood (total) Renewable Materials used by weight and volume No Renewable 2011 2012 1.305.704 t 1.345.171 t 2.066.379 t 1.992.151 t – 23.647 t 27457 t 32.135 t 249.268 t 160.125 t 159.103 t 249.291 t 1.554.972 t 1.577.718 t 2.252.939 t 2.273.577 t 84 89 96 89 Consumption of starch, pulp and post-consumption scrap Consumption of caustic soda, calcium carbonate, sodium sulfate, kaolin, optical bleach, chlorate, sulfuric acid and quicklime(total) Consumption of materials (total) 2010 Percentage of renewable materials Rio Verde Unt 2009 Renovável Materials used by weight and volume Não renovável Consumption of starch, primary iodine, post-consumption scrap, pre-consumption scrap and pulp Consumption of caustic soda, optical bleach and calcium carbonate (total) Consumption of materials (total) 2010 2011 2012 - 65.208 t 54.510 t 58.300 t 4.790 t 5.525 t 2.498 t 5.803,2 t 46.754 t 70.733 t 57.008 t 64.104 t 90 92 96 90 Percentage of renewable materials Embu Unt 2009 Renovável Materials used by weight and volume Não renovável Consumption of starch, postconsumption scrap, pulp and pre-consumption scrap (total) Consumption of kaolin, calcium carbonate, caustic soda and optical bleach (total) 2010 2011 2012 38.155 t*** 43.413 t 26.103 t 25.511 t ND 7.146 t 6.650 t 7.092 t Consumption of materials (total) ND 50559 t 32.753 t 32.604 t Percentage of renewable materials ND 86 80 78 Limeira Unt 2009 Consumption of wood (total) Renewable Materials used by weight and volume No Renewable Consumption of starch, iodine, pulp (total) Consumption of caustic soda, sodium sulfate, quicklime, calcium carbonate, optical bleach, chlorine dioxide chlorate and sulfuric acid (total) Consumption of materials (total) Percentage of renewable materials 94 2010 2011 2012 973.570,50 t 1.004.568,18 t 973.570,50 t 2.389.337 t 732.242,32 t 731.356,85 t 748.920,61 t 688.553 t 124.244,96 t 124.536,55 t 125.598,33 t 118.941 t 1.830.057,78 t 1.860.461,58 t 1.848.089,44 t 3.196.831 t 93 93 93 36 S u z a n o P u l p a n d Pa p e r Reuse of materials (EN2) 2010 Rio Verde Unit Materials used from recycling* Embu Unit Materials used from recycling* 2011 2012 Post-consumption paper scrap 6.438 t 6.146 t 4.946 t Pre-consumption paper scrap 23.904 t 22.724 t 22.138 t Percentage of raw materials recycled Post-consumption paper scrap Pre-consumption paper scrap Percentage of raw materials recycled 43 50 424 t 485 t 5.949 t 461 t 0 12,6 3,6 1,9 492 t * Amounts related to 2010 were revised In the same vein, in São Paulo, we Use of soil – own areas (EN11) recovered 1,024 hectares of native vegetation, Destination which required the planting, maintenance, Planting transport and removal of exotic species from Available for plantation the Permanent Preservation Area (APP), Preservation totaling 85,000 native seedlings. We also restored 400 hectares of remaining native Area (in ha) Area (in ha) Area (in ha) 310.000 346.201 353.544 87.000 118.170 112.771 256.000 297.000 317.674 Infrastructure Total 29.000 40.759 35.289 682.000 802.130 819.278 vegetation in the states of Espírito Santo, Bahia and Minas Gerais, which resulted in the planting of 352,000 native seedlings. We also face an important challenge in recovering natural areas in the states of Bahia, Investments and spending on Environmental Protection (Industrial and Forestry) (EN30) Area Energy Amount (R$) R$ 794.000,00 Espírito Santo, Minas Gerais and São Paulo. Water R$ 1.643.442,64 The initiative basically includes the planting Effluents R$ 5.183.187,02 of seedlings, maintaining existing areas and Emissions monitoring the development of areas already Solid Waste restored. During planting operations for the Other R$ 120.000,00 R$ 11.648.294,85 R$ 19.124,00 restoration of natural areas, we use more than Environmental studies and monitoring (water, flora and fauna) R$ 1.347.787,00 180 species of native trees. Recovery and protection of natural areas R$ 7.661.462,00 Environmental management UNF R$ 1.322.025,63 Environmental education R$ 159.655,89 Total environmental investments Total R$ 29.898.979,03 Internal R$ 159.655,89 External R$ 29.739.323,14 95 Sustenta bilidade R e p o r t 2012 “In 2012, we worked intensely on providing our teams with information on the aspects of the n e w F o re s t r y L a w. ” Through the Brazilian Business Movement for Biodiversity (MEBB), which we support and in which we are a member, we help Brazil’s Ministry of Environment to adapt the Aichi Biodiversity Targets, which reflect the country’s commitment to safeguarding biodiversity, to the reality on the ground in Brazil. Moreover, as members of the Brazilian Association of Pulp and Paper Producers (Bracelpa) and the Corporate Commitment to Recycling (Cempre), we actively participate in discussions on the plans for the industry under the National Solid Waste Plan instituted by the federal government. In 2012, we also worked intensely on providing information and training to our professionals involved on relevant aspects of the new forestry policy. Besides monitoring the progress on the law’s enactment, we prepared teams to diagnose opportunities and influence the chain, especially wood suppliers. 96 S u z a n o P u l p a n d Pa p e r Conservation Units adjacent to our areas There are adjacent areas totaling 32,194.87 ha (EN11) Maranhão: Chapada das Mesas National Park in Carolina (* Note: this property, with total area of 446.49 hectares, was entirely set aside as Legal Reserve). Cassurubá Extractive Reserve* Costa Dourada EPA* Córrego Grande Biological Reserve* Bahia: We maintained our environmental Córrego do Veado Biological Reserve FLONA – Rio Preto* Itaúnas State Park* education efforts through the Trilhas project, Conceição da Barra EPA* whose objective is to raise awareness among Sooretama Biological Reserve students and train teachers on environmental *We have areas that are partially situated within the Conservation Units. conservation, underlining the importance of biomes. The project includes lectures at Santa Maria Ecological Station (State), schools, environment interpretation activities, Vassununga State Park, Piracicaba-Juqueri-Mirim Environmental Protection Area (State)* Horto Florestal Natural Heritage Area and Edmundo Navarro de Andrade Museum (State), social and environmental actions and visits to ecological trails, all of which are used a practical laboratory. Since the launch of Itirapina Ecological Station (State), the Trilhas Project in the 1980s, more than Corumbataí-Botucatu-Tejupá Environmental Protection Area (State) 100,000 people have been served by this São Carlos Ecological Station (State), initiative. In 2012, we invested more than Sebastião Aleixo da Silva or Bauru Ecological Station (State), R$10 million in monitoring and conservation Araribá Indigenous Land Caetetus Ecological Station (State), of natural resources, as well as the restoration Carlos Botelho State Park and continuation of environmental education projects, among others. (EN30) São Paulo: Intervales State Park Environmental Protection Area of the Paraíba do Sul River Basin (Federal), Serra do Mar Environmental Protection Area (State),* Paranapanema Ecological Station (State), A wide biodiversity of flora and fauna can be found in the Amazon and Cerrado biomes of our planted forests Itapeva Ecological Station (State), Paranapiacaba Biological Reserve (State), Serra do Mar State Park;* Nascentes do Tietê Ecological Park (State)* Nascentes do Tietê Natural Heritage Area (State). Rio Batalha EPA Botucatu EPA* Angatuba Ecological Station *We have areas that are partially situated within the Conservation Units 97 Sustenta bilidade R e p o r t 2012 Climate Change Our leadership position on the issue and our constant pursuit of high standards of sustainability led us in 2012 to implement improvements in carbon management tools, especially in quantifying and offsetting greenhouse gas emissions. We appreciate knowing and understanding our GHG emissions, since these are fundamental steps for enabling us to identify opportunities for reducing emissions in our production chain. The carbon footprint (base: 2010) of our products was recertified by the British institution Carbon Trust, which demonstrates that the values related to emissions from the life cycle of the Suzano Pulp, Alta Alvura®, Symetrique®, Paperfect® and Report® products were reduced from the levels previously calculated during the certification process, with a base year of 2008. (EN18). To learn more please go to www.pegadadecarbonosuzano.com.br. For the Suzano Pulp pulp and the Paperfect® paper produced at the Mucuri Unit, waste management was the activity that most contributed to reducing greenhouse gas (GHG) emissions. More than 30% of the waste generated during pulp and paper production was reused (incorporated into power cogeneration), thus reducing the volume of waste sent to landfills. For the Report®, Symetrique® and Alta Alvura® papers produced at the Suzano Unit, the reductions mainly came from the change in the profile of the unit’s energy matrix, which reduced the consumption of fossil fuels for power generation through the increased use of biomass, especially wood chips. Limeira Unit (São Paulo) 98 S u z a n o P u l p a n d Pa p e r Considering a reduction of about 22% in which resulted in the creation of a tool that gives us greater control GHG emissions in the carbon footprint of and better tracking of the data reported. The GHG emissions data Suzano Pulp sold in China, its current value reported in this document are for the years 2009, 2010 and 2011 and represents 819 kg CO2e/ton of pulp. follow the GHG Protocol methodology. This one year lag in the data The Suzano Report (A4 – 75 g/m ) paper, ® 2 is due to the extensive process of preparing our Corporate Inventory whose carbon footprint is accounted for of Emissions, caused by the scope of calculation that considers all until its final disposal, registered a reduction activities from the production of seedlings to the delivery of products of 138.8 kg CO e/ton of paper when sold at our clients’ sites, considering both our own and third-party in Europe. In 2013, we designed a new activities. Chart 1 below shows the scope 1, 2 and 3 emissions of method of data collection for preparing the forestry and industrial operations at the Mucuri, Suzano, Limeira, the Corporate Inventory of GHG emissions, Embu and Rio Verde Units, as well as from SPP-KSR. 2 Total CO2 e emissions (tons) (EN16, EN17, EN29) Scope 1 – Direct GHG emissions Scope 2 – Indirect GHG emissions (purchase of electricity) Scope 3 – Other indirect GHG emissions 2009 2010 2011 704.159,8 731.181,6 932.883,8 12.726,5 26.137,6 26.841,0 159.235,2 350.047,6 351.668,8 1 CO2e ou CO2 equivalent are measures used to express GHG emissions based on the potential contribution of each gas for global warming. 2 Inventories for the years 2009 and 2010 were revised and the calculation model improved, which resulted in different values from those reported in previous Reports. The increase in scope 1 in 2011 was due to the inclusion of emissions associated with the operations of the Limeira Unit and the distributor Energy Matrix related to Scope 1 activities SPP-KSR. 20.07% Chart 2 below, which shows the energy matrix of Scope 1 (stationary sources), highlights the significant share of renewable fuels in the activities controlled by Suzano. 79.93% Renewable Fuel Fossil Fuel 99 Sustenta bilidade R e p o r t This significant share of renewable fuels shows that the company operates with a low carbon footprint (around 20% of the energy matrix originates from fossil sources). Since 2011, we have been offering the market a portfolio of papers with their carbon footprints offset. This means that all GHG emissions during their life cycles are offset through carbon credits acquired in the market. Since we understand that demand for this type of product is growing due to the positioning of companies with regard to the issue, 2012 “We recognize that climate change offers risks and opportunities for our business.” we believe that the creation of a tool to control carbon credits that guarantees the credibility of the offset process would be fundamental for our clients and consumers. As a result, we partnered with the consulting firms, ICF and Ernst & Young to develop a system that controls the consumption of carbon credits in accordance with the volume of offset paper sold. We are aware that strategic management of carbon includes the establishment of a plan for reducing emissions. We also understand Considering the formulation of international that to structure such a plan it is fundamental to have in-depth protocols for the development of corporate knowledge of our current GHG emissions. And it was to this aspect that GHG inventories, we were invited by the a part of our efforts was devoted in 2012, while next year, efforts should World Resources Institute (WRI) to jointly focus on carrying out an internal diagnosis to evaluate the opportunities develop a tool to measure emissions from for reducing emissions that increase efficiency and reduce costs. We the agricultural sector - the "Agricultural recognize that new public policies may represent risks and opportunities GHG Protocol" (http://www.ghgprotocol.org/ for our business and hence we constantly monitor and contribute to standards/agriculture-guidance). In the context discussions and formulations of frameworks on issues related to the of climate change, it must be remembered subject, especially the Industry Plan for Mitigating and Adapting to that planted forests play an important role as Climate Change, which is part of the National Policy on Climate Change. carbon sinks. If on the one hand, we emit greenhouse gases through our activities, especially at industrial units, on the other hand, this represents a carbon inventory composed of sustainably managed eucalyptus plantations and native forests in our diverse biomes and stages of conservation. Considering only the areas covered by planted forests in the states of São Paulo, Espírito Santo, Minas Gerais and Bahia, the accumulated carbon inventory at the end of 2011 represented nearly 41 million tons of carbon. 100 S u z a n o P u l p a n d Pa p e r Seedling nursery at Itabatã (Bahia) 101 Sustenta bilidade R e p o r t 2012 Energy management (EN3, EN4) Embu Unit Indicator component Natural gas Direct energy consumption by primary energy source Electricity purchased Specific consumption Unit of measurement GJ Indirect energy consumption Indirect energy consumption Direct energy consumption by primary energy source Indirect energy consumption 332.611 GJ 124.027 118.321 115.865 kWh/t. 751 719 684 Indirect energy consumption 102 2012 2.198.712 2.235.758 2.438.901 GJ 10.973.681 10.905.981 11.459.795 GJ 138.524 166.517 1.921.854 Electricity purchased GJ 1.165.132 1.158.307 1.164.716 Electricity produced GJ 981.726 997.579 985.734 kWh/t. 691 677 790 GJ 13.772 14.945 246.452 2010 2011 Electricity consumed LPP LPP LPG 2012 0 9.751.788 GJ 2.250.702 2.068.426 88.335 Black liquor GJ 29.515.388 30.316.548 29.982.150 Forest biomass GJ 2.730.301 3.077.013 2.825.089 Electricity purchased GJ 119.700 133.488 126.637 Electricity produced GJ 4.097.412 4.070.017 3.920.846 kWh/t. 691 677 2010 2011 2012 Natural gas GJ 476.763 459.188 422.766 Electricity purchased GJ 154.652 159.866 152.187 kWh/t. 833 857 839 Specific consumption Suzano Unit Unit of Indicator component measurement Natural gas GJ Direct energy consumption by primary energy source 2011 Black liquor Rio Verde Unit Unit of Indicator component measurement Direct / indirect energy consumption 2010 Forest biomass Specific consumption Direct energy consumption by primary energy source 2012 326.052 Mucuri Unit Unit of Indicator component measurement Natural gas GJ Direct energy consumption by primary energy source 2011 289.406 Limeira Unit Unit of Indicator component measurement Natural gas GJ Direct energy consumption by primary energy source 2010 2010 2011 2012 4.704.325 5.230.629 2.842.467.915 LPP LPG GJ 358.195 288.277 206.854.406 Black liquor GJ 3.302.364 2.194.024 9.467.248 Forest biomass GJ 3.302.364 2.194.024 550.070 Electricity purchased GJ 1.510.800 1.490.983 1.463.785 GJ 801.553 772.175 kWh/t. 882 879 Electricity produced Energy consumption Specific consumption Indirect energy consumption Head Office Unit of Indicator component measurement Electricity purchased GJ 2010 2.209 2011 1.955 870 2012 1.851 S u z a n o P u l p a n d Pa p e r Indirect energy consumption Direct energy consumption by primary energy source – own fleet Direct energy consumption by primary energy source – thirdparty fleet Indirect energy consumption by primary energy source SPPKSR Unit Unit of Indicator component measurement Electricity purchased GJ 2010 Forestry Unit Unit of Indicator component measurement Diesel consumption GJ 2010 1.887 2011 2012 1.683 2011 1.696 2012 157.456 243.620 1.87.910 Gasoline consumption GJ 10.240 32.275 6.090 Biodiesel consumption GJ 49.586 70 89.487 Ethanol consumption GJ 69.307 61 854 Diesel consumption GJ 682.799 16.418.367 258.062 Gasoline consumption GJ 4.734 451.309 14.850 Biodiesel consumption GJ 68.769 3.106.371 81.912 Ethanol consumption GJ 300.062 26.408 3.773 2417 N/A 5.521 Electricity purchased (administrative building) Management of emissions (tons) (EN 19 E 20) Mucuri Unit Emissions 2009 2010 2011 2012 Total SOX emissions 1.073,25 420,1 393,88 593,8 Total NOX emissions 888,56 1.193,9 1.018,37 2.355,9 3167 3,248 258,14 1374,7 67 28,9 121,1 163,7 Total emissions of particles Total TRS emissions Suzano Unit 2009 2010 2011 Total SOX emissions Emissions 159,62 161,46 121,76 109 Total NOX emissions 1.980,55 2.070,88 1.189,06 1.109,44 236,87 256,89 403,34 257,92 2,59 1,75 2,13 2,60 Total emissions of particles Total TRS emissions 2012 Limeira Unit Emissions 2009 2010 2011 2012 932,77 393,88 545,75 1.134,87 749,08 1.018,37 1.188,76 736,94 418,67 258,14 527,8 11,38 8,69 10,85 7,95 Total SOX emissions 1.239,61 Total NOX emissions Total emissions of particles Total TRS emissions Embu Unit Emissions Total NOX emissions 2009 7,54 2010 4,62 2011 15,05 2012 8,3 Unidade Rio Verde Emissions Total NOX emissions 2009 83 2010 123,7 2011 101,4 2012 20,10 103 Sustenta bilidade R e p o r t 2012 Complement – GRI Indicators 2012 4.2 4.10 Indicate whether the Chair of the highest governance body is also an executive officer The chairman of the Board of Directors, David Feffer, is not a member of the Board of Executive Officers. Processes for evaluating the highest governance body’s own performance. We do not have formal processes for members of the Board of Directors to evaluate their own performance. Significant financial assistance received from government. EC4 Our Investment projects are financially supported by BNDES, BNB and FINEP. Details on this respect are available in the 2012 Financial Statements. Total number and volume of significant spills. EN23 EN29 In 2012 there were no significant spills. Occurrences and emergencies were duly solved and did have adverse impacts on natural resources. In 2012, we did not receive significant fines or non-monetary sanctions. Significant environmental impacts of transporting products and other goods and materials. Percentage of employees covered by collective bargaining agreements LA4 LA5 100% of the direct employees are covered by collective bargaining agreements. Executive and functional officers and managers are not covered by two clauses of the agreement, related to salary adjustment and bonus. Minimum notice period(s) regarding operational changes. There are no minimum notice period(s) regarding operational changes. Total workforce represented in formal health and safety committees. LA6 100% of the employees are represented in the Working Group on Health and Safety installed in all operational units. Health and safety topics covered in formal agreements with trade unions LA9 The collective bargaining agreements with trade unions, valid for the entire workforce, ensure, among other things, the use of personal protection equipment and the right to refuse to work under unsafe conditions. Significant investment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone human rights screening. HR1 HR2 HR3 100% of our agreements. The standard-drafts for agreements adopted by Suzano have specific human rights clauses. With the corporate consolidation of Contract Management, the maintenance of such clauses has been increasingly effective, followed by the areas responsible for directly managing each contract and by internal audit. Significant suppliers, contractors and other business partners that have undergone human rights screening. In 2012, no audits were made on significant suppliers. Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations. In 2012, 10% of own employees took the e-learning program and on General Principles of Combating Fraud and Anti-Corruption and 33% took the e-learning and in-class training for the forest area on the Code of Conduct. Total number of incidents of discrimination and corrective actions taken HR4 In 2012, we had 2 cases classified as discrimination. They were related to the perception of difference in treatment between own employees and service providers. The situations were considered one-off and dealt with individually. Operations in which the right to exercise freedom of association and collective bargaining may be at risk HR5 104 In 2012, we did not identify any operation in which the right to exercise freedom of association and collective bargaining might be at risk. S u z a n o P u l p a n d Pa p e r HR 7 In 2012, we did not identify any operation in which the right to exercise freedom of association and collective bargaining might be at risk. Operations identified as having significant risk for incidents of forced or compulsory labor No such operations were identified in 2012. Audits of the FSC map these potential events. SO3 SO4 SO6 SO7 Employees trained in anti-corruption policies and procedures In 2012, 10% of own employees took the e-learning program General Principles of Combating Fraud and Anti-Corruption. Actions taken in response to incidents of corruption In 2012, no incidents were registered. Total value of financial and in-kind contributions to political parties. In 2012, we allocated funds to political parties, through a process based on transparency and accountability to the Superior Electoral Court, whose website (www.tse.gov.br) provides information on the donations made. Number of legal actions for anticompetitive behavior, anti-trust, and monopoly practices SO8 PR1 We were not mentioned in any actions of this nature in 2012. Assessment of impacts on health and safety of the life cycle of products. These are assessed throughout the life cycle of products, which includes research and development, certifications, production, marketing and promotion, storage, distribution and supply, use, disposal and reuse and recycling. Total number of incidents of non-compliance with health and safety regulations. PR2 PR3 PR4 In 2012, no incidents of non-compliance with health and safety regulations were recorded. Labeling procedures Packaging and safety instructions of our pulp contain all information on the aggregated products and services. The paper area strictly follows Brazilian laws on the subject. Total number of incidents of non-compliance with regulations and voluntary codes concerning information and labeling. This year we received 3 notices of non-compliance related to packaging. All of them were related to the A4 Paper, brand Report/Seninha, nominal content 210 mm, plastic packaging, due to the lack of data on measuring units, its multiples and sub-multiples. The value of these notices totals R$17,550.00 Practices related to customer satisfaction In 2012, we did not conduct customer satisfaction surveys – neither for pulp nor paper PR5 PR6 Adherence to laws, standards, and voluntary codes related to marketing, including advertising, promotion, and sponsorship. We strictly comply with the legislation in force in respect to the theme and do not adhere to any voluntary code related to marketing communications Incidents of non-compliance with regulations PR7 PR8 PR9 In 2012, we did not record incidents of non-compliance with regulations Substantiated complaints regarding breaches of customer privacy In 2012, we did not record complaints regarding violation of customer privacy Fines for non-compliance with laws and regulations concerning the provision and use of products and services In 2012, we were not fined for non-compliance with laws and regulations concerning the provision and use of products and services Em 2012 não recebemos nenhuma multa por não conformidade a leis e regulamentos relativos a produtos e serviços. 105 Sustenta bilidade R e p o r t 2012 Sumário GRI GRI (3.12) Profile Level Strategy and Analysis 1.1 Statement from the most senior decision-maker of the organization. Page 11 1.2 Description of key impacts, risks, and opportunities. 11, 41 and 73 Organizational Profile 2.1 Name of the organization 2.2 Primary brands, products, and/or services 2.3 Operational structure 2.4 Location of organization's headquarters 2.5 Number of countries where the organization operates, and names of countries specifically relevant to sustainability 2.6 Nature of ownership and legal form 2.7 Markets served 2.8 Scale of the organization 2.9 Significant changes during the reporting period 2.10 Awards received in the reporting period 15 11 15 11 and 14 14 11 11 and 14 17 11 and 14 18 Report Parameters Report Profile 3.1 Reporting period 3.2 Date of most recent previous report 3.3 Reporting cycle 3.4 Contact point for questions regarding the report or its contents 4 4 4 114 Report Scope and Boundary 3.5 Process for defining report content 3.6 Boundary of the report 3.7 Limitations on the scope or boundary of the report 3.8 Basis for reporting 3.9 Data measurement techniques and the bases of calculations 3.10 Effect of any re-statements of information 3.11 Significant changes from previous reporting periods 5 4 4 4 4 4 4 GRI Content Index 3.12 Table identifying the location of the Standard Disclosures in the report 96 Assurance 3.13 Policy and current practice with regard to seeking external assurance for the report 7 and 100 Governance, Commitments, and Engagement Governance 4.1 Governance structure of the organization 38 4.2 Indicate whether the Chair of the highest governance body is also an executive officer 106 4.3 State the number and gender of members of the highest governance body that are independent and/or non-executive members 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body 4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives, and the organization's performance 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided 4.7 Process for determining the composition, qualifications, and expertise of the members of the highest governance body in defining the organization’s strategy for economic, environmental and social themes. 4.8 Internally developed statements of mission or values, codes of conduct, and principles 4.9 Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental, and social performance 4.10 Processes for evaluating the highest governance body's own performance Responded 106 Partially responded 30 5, 25 and 27 30 37 30 13 27 106 Not responded Verified by third-party B B+ ✓ ✓ Verified by GRI A Profile A+ With external verification C+ Self-declared Mandator Opcional C With external verification 2002 in accordance with Level Commitment to External Initiatives 4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization 4.12 Social charters, principles, or other initiatives to which the organization subscribes 4.13 Memberships in associations and/or national/international advocacy organizations in which the organization participates. 25 and 31 49 49 Stakeholder engagement 4.14 Stakeholder engagement 4.15 Basis for identification and selection of stakeholders 4.16 Approaches to stakeholder engagement 4.17 Key topics and concerns that have been raised through stakeholder engagement Performance Indicators Economic Performance EC1 Direct economic value generated and distributed EC2 Financial implications and risks and opportunities for the organization's activities due to climate change EC3 Coverage of the organization's defined benefit plan obligations EC4 Significant financial assistance received from government EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation EC6 Policy, practices, and spending on locally-based suppliers EC7 Procedures for local hiring and proportion of senior management hired from the local community EC8 Infrastructure investments and services EC9 Description of indirect economic impacts Environmental Performance EN1 Materials used EN2 Percentage of materials used that are recycled raw materials EN3 Direct energy consumption EN4 Indirect energy consumption EN5 Energy saved due to conservation and efficiency improvements. EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives EN7 Initiatives to reduce indirect energy consumption and reductions achieved EN8 Total water withdrawal EN9 Water sources significantly affected by withdrawal of water EN10 Percentage and total volume of water recycled and reused EN11 Location in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas EN12 D escription of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas EN13 Habitats protected or restored EN14 Strategies, current actions, and future plans for managing impacts on biodiversity EN15 Red List species EN16 Total direct and indirect greenhouse gas emissions by weight EN17 Other relevant indirect greenhouse gas emissions by weight EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved EN19 Emissions of ozone-depleting substances EN20 NOx, SOx, and other significant air emissions Page 5 5 5 5 Level Page 16 and 17 26 and 89 60 106 64 74 and 75 50 and 57 25, 73, 75, 76 and 77 25 94 94 and 95 102 92 and 102 92 – 92 90 93 – 97 97 97 97 – 99 99 98 100 90,100 and 102 EN21 Total water discharge by quality and destination 90 EN22 Total weight of waste by type and disposal method 82 EN23 Total number and volume of significant spills EN24 Weight of transported waste deemed hazardous EN25 Water bodies and related habitats significantly affected by the reporting organization's discharges of water EN26 Initiatives to mitigate environmental impacts of products and services * * Financial Statements available at the website 94 90 and 106 90 26 and 80 107 Sustenta bilidade R e p o r t 2012 Performance Indicators EN27 Percentage of products sold and their packaging materials that are reclaimed EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations EN29 Significant environmental impacts of transporting products and other goods and materials EN30 Environmental protection expenditures and investments Social Performance – Labor Practices and Decent Work LA1 Total workforce by employment type, employment contract, and region LA2 Total number and rate of new employee hires and employee turnover LA3 Benefits provided to full-time employees vs. temporary or part-time employees LA4 Percentage of employees covered by collective bargaining agreements LA5 Minimum notice period(s) regarding significant operational changes LA6 Workforce represented in formal joint management-worker health and safety committees LA7 Rates of injury, occupational diseases, lost days, absenteeism and fatalities LA8 E ducation, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases LA9 Health and safety topics covered in formal agreements with trade unions LA10 Average hours of training LA11 Programs for continued employability LA12 Performance and career development reviews LA13 Composition of governance bodies and breakdown of employees per employee category LA14 Ratio of basic salary and remuneration of women to men Social Performance – Human Rights HR1 Significant investment agreements and contracts that include clauses incorporating human rights concerns HR2 Significant suppliers, contractors and other business partners that have undergone human rights screening HR3 Training on human rights HR4 Total number of incidents of discrimination HR5 Operations in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk HR6 Operations identified as having significant risk for incidents of child labor HR7 Operations identified as having significant risk for incidents of forced or compulsory labor HR8 Security personnel trained in aspects of human rights HR9 Incidents of violations involving rights of indigenous people Level Page 68 – 90 and 106 17 and 97 52 57 and 58 106 106 106 106 66 and 67 66 66 and 106 58 and 59 49 51 30, 53, 54, 55, 56 and 61 62 106 106 106 106 107 71 107 60 95 Desempenho Social – Sociedade SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs 60 SO2 Percentage and total number of business units analyzed for risks related to corruption SO3 Employees trained in anti-corruption policies and procedures SO4 Actions taken in response to incidents of corruption SO5 Participation in public policy development SO6 Total value of financial and in-kind contributions to political parties SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations 80 106 106 82 107 107 107 Social Performance – Product Responsibility PR1 Life cycle stages in which health and safety impacts of products and services are assessed PR2 Incidents of non-compliance with regulations concerning health and safety PR3 Labeling procedures PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling PR5 Practices related to customer satisfaction PR6 Adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship PR7 Incidents of non-compliance with regulations PR8 Substantiated complaints regarding breaches of customer privacy PR9 Fines for non-compliance with laws and regulations concerning the provision and use of products and services 108 107 107 107 107 77 and 107 107 107 107 107 S u z a n o P u l p a n d Pa p e r Global Compact The United Nations Global Compact relies on the engagement of the private sector to advance the practice of social responsibility in the pursuit of a more sustainable and inclusive global economy. The principles established by the Compact are in tune with the Suzano Code of Conduct and Ethical Principles. These include the commitments related to the protection of human rights, labor rights, environmental protection and combating corruption. Below is the index of our performance with regard to the ten Global Compact principles related to the main GRI indicators, which assure the quality of the report in accordance with GRI standards. Global Compact Principles Relation to GRI 1 Respect and protect human rights HR1, HR2 and HR3 2 Prevent human rights violations 3 support the freedom of association at work LA4 4 Eliminate forced labor HR7 5 Abolish child labor 6 Eliminate discrimination at work 7 Support a precautionary approach to environmental challenges 8 Promote environmental responsibility 9 10 Encourage environmentally friendly technologies Work against corruption in all its forms, including extortion and bribery. HR2 and HR3 HR6 LA10, LA11, LA13 and LA14 EN (all) EN1 to EN30 EN16 to EN25 SO2, SO3 and SO4 109 Sustenta bilidade R e p o r t 2012 Independent Assurance Statement Bureau Veritas Certification Introduction Bureau Veritas Certification Brazil (Bureau Veritas) has been contracted by Suzano Pulp and Paper S.A. (Suzano), to conduct an independent verification of its Annual Sustainability Report (hereinafter referred to as Report), including analysis of the content, quality and scope thereof referring to the year 2012. Information published in the report is the sole responsibility of Suzano’s administration. Our responsibility is limited to the independent assessment of its content according with the scope established below. METHODOLOGY Our work was conducted in accordance with the Bureau Veritas Protocol for the Independent Assurance of Sustainability Reports, based SCOPE OF WORK Suzano requested Bureau Veritas Certification to include the following in its assurance scope: on current best practices1 and covering the following activities: 1. Interviews with the personnel involved • Data and information included in the Report; (process owners) in the relevant materials • Adequacy and reliability of the underlying systems and processes used published; to collect, review and compile the information reported; • Evaluation of the Report according to the principles of Materiality, Stakeholder Inclusion, Sustainability, Comprehensiveness, Fairness, 2. Analysis of documentary evidence provided for the reporting period; 3. Verification of performance data in relation Comparability, Accuracy, Frequency, Clarity and Reliability, as defined to the principles that ensure the quality of in the Sustainability Reporting Guidelines - Global Reporting InitiativeTM information, pursuant to GRI G3; GRI-G3 (2006); • Confirmation of the level of application in accordance with GRI-G3 guidelines. 4. Site visits to the Mucurí (Minas Gerais), Imperatriz (Maranhão) and Suzano (São Paulo) units and the head office in São Paulo. 5. Analysis of Suzano’s stakeholder engagement Excluded from the scope of this work was assurance of any information relating to: 6. Evaluation of the method used to define • Activities outside the defined assurance period; material issues included in the Report, • Statements of position (expressions of opinion, belief, goals or future taking into account the context of intentions) by Suzano and statements of future commitments; • Accuracy of economic and financial information contained in this Report, extracted from financial statements that have been subjected to external audit by independent auditors; • Specific assurance on the methodology and consistency in the collection of data for the Greenhouse Gas (GHG) inventory. 110 activities; sustainability and the completeness of the information published. The activities were planned and carried out to provide reasonable, rather than absolute, assurance, providing a sound basis for our conclusions. S u z a n o P u l p a n d Pa p e r TECHNICAL REPORT • The material issues presented in the Report were partially extracted from an engagement process (using a questionnaire) conducted in 2011. Suzano also used continuous engagement tools to address issues of interest, especially with the stakeholders “Communities” and “Clients”. The Report informs that the definition of material issues will be extended to other stakeholders in future publications; • The Reports provides important information on the Suzano Group’s operating strategy, with the focus on changes in the bioenergy segment; • The Report provides consistent information on the insourcing initiatives that have already included 600 jobs over the last two years; • Suzano clearly reports the reduction of 14% in the number of • We found little information on the following themes considered material by Suzano: accidents in pulp and paper distribution and transport operations in Water consumption in forests and Wood Bahia, which is evidenced by a solid database to generate reliable supply to the Imperatriz Unit; statistics in its routine operations; • As for indicator EN16 (Total direct and indirect greenhouse gas • The Report also provides little information on how Suzano ensures that conflicts of interest emissions by weight), the Report shows the evolution in accounting are avoided. At the institutional level, the the emissions, including in 2012 the fleet of the distributor KSR, Report mentions the use of tools for control acquired by Suzano in 2011. The method used to calculate the carbon and internal audit, but there is no clear footprint was certified by Carbon Trust; information on actions regarding conflicts of • The Message from the Management highlights the reduction in biotechnology costs and research in order to increase productivity, as part of Suzano’s sustainability strategy; • The Report does not address issues such as safety, human resources, environmental aspects and impacts, as well as human rights at the construction site of the Maranhão plant. The sustainability interest; • We found little information on the strategy to implement the Sustainability Master Plan, which was revised in 2012 by Suzano’s Advisory Board; • With regard to opportunities for performance described in the Report covers Suzano’s production improvement presented in our 2012 operations only; Statement, we noticed that Suzano showed • We noticed a lack of information on the significant reduction in little progress in dealing with them, except environmental investments (indicator EN30) in 2012, compared to the for the insourcing initiatives, an issue on prior year; which Suzano worked throughout 2012, • In relation to indicator HR2, which deals with evaluation of outsourced service providers on human rights, we did not find information on the reporting significant changes; • During the course of the assurance process, measures taken for cases of noncompliance with the requirements we identified a few inconsistencies in the established and demanded by Suzano; data and information analyzed. Bureau • The Report brings little information on social and environmental objectives and targets; Veritas Certification maintains a record of the inconsistencies and corrections presented by Suzano. 111 Sustenta bilidade R e p o r t 2012 OPPORTUNITIES FOR IMPROVEMENT Below is a list of opportunities for improvement identified during the assurance process of this Report. We had mentioned some of them already in 2011 and 2012. • The objectives and targets could be presented in a more systematic and objective manner, showing the reader what Suzano’s priorities are in terms of sustainable development and the investments associated with; • Provide more information on the use and availability of water at the Forest Business Unit. In the MAPITO region, this issue is essential and should be addressed appropriately in future publications. • In the chapter on Risk Management, show how Suzano evaluates environmental and social issues during the expansion process in Northeast Brazil; • Present clearly the forest plan to supply wood to the Imperatriz Unit in the state of Maranhão; • Provide consistent information on initiatives to avoid conflicts of interest; • Provide information on the process of receipt, analysis and handling • The inconsistencies found during the assurance process were corrected during of opinions under the responsibility of the ethics committee and the the course of the process such that the company’s ombudsman. Indicators SO4 and HR4 are intrinsically information and data presented in the related with the communication channels managed by the committee Report were evaluated as free from and the ombudsman. Greater transparency in presenting this process significant errors or false statements, as well will increase the Report’s compliance with these indicators; as accessible and comprehensible for the • Develop an engagement method that causes reactions from stakeholders about the content of the Report, especially regarding diverse stakeholder groups; • The opportunities for improvement pointed compliance with the Principles of Fairness and Materiality. Greater out by our team should be analyzed interaction with Stakeholders who are considered opinion makers may critically in order to carry out systematic bring significant gains to future publications; improvements in future publications; • Provide a more complete report of the strategy on managing suppliers 112 CONCLUSION • Based on our assessment, we conclude that regarding human rights, since Suzano has not clarified quantitatively the Report was prepared in accordance the sanctions applied to suppliers who fail to comply with these with the content and quality criteria of requirements; GRI G-3 Guidelines, meets the Principles • Inform the stakeholders of how the Sustainability Master Plan will be established therein and adequately presents implemented, given its strong relation with various material issues the necessary indicators, which gives Suzano identified by Suzano. application level B+. S u z a n o P u l p a n d Pa p e r STATEMENT OF INDEPENDENCE AND IMPARTIALITY Bureau Veritas Certification is an independent professional services firm specializing in Quality, Health, Safety, Social and Environmental Management, with more than 180 years of experience in independent assurance. No member of the assurance team has any business relationship with Suzano. We conducted this assurance independently and understand that there was no conflict of interest. Bureau Veritas Certification has implemented a Code of Ethics across its business to maintain high ethical standards among its staff in the performance of their activities. CONTACT Bureau Veritas Certification is available to clarify any questions at its website www.bureauveritascertification.com.br/faleconosco.asp or by telephone (5511)2655-9000. São Paulo, June 2013 Alexander Vervuurt Auditor-leader Assurance Sustainability Reports (ASR) Bureau Veritas Certification – Brazil 113 Sustenta bilidade R e p o r t Corporate Information 2012 (3.4) SUZANO PAPEL E CELULOSE CUSTODIAN BANK Av. Brigadeiro Faria Lima, 1.355 – 8° andar Banco Itaú 01452-919 – São Paulo (SP) – Brazil Rua Ururaí, 111 Tel.: (55 11) 3503-9000 Prédio B – Térreo – Tatuapé www.suzano.com.br 03084-010 São Paulo SP INVESTOR RELATIONS DEPOSITARY BANK Tel.: (55 11) 3503-9061 The Bank of New York E-mail: [email protected] 101 Barclay Street – New York (NY) – 10286 – USA www.suzano.com.br/ri MARKET MAKER STOCK - BRAZIL Credit Suisse S.A. Corretora de Títulos e Valores Mobiliários BM&FBovespa – São Paulo Stock Exchange – Av. Brigadeiro Faria Lima, 3.064 – 14° andar São Paulo (SP) 01451-000 – São Paulo (SP) Ticker symbol of common shares: SUZB3 (traded in lots of 100) DEBENTURES Ticker symbols of preferred shares: SUZB5 and SUSZ6 Trustee: Pentágono S.A. DTVM Avenida das Américas, 4.200 – Bloco 4 STOCK – EUROPE Edifício Buenos Aires, sala 514 Latibex – Latin American Stock Exchange – Madrid (Spain) 22640-102 – Rio de Janeiro (RJ) Ticker symbol of “Class A” preferred shares: brsuzbacnpa3 STOCK – UNITED STATES ADR1 Program with receipts traded on the over-the-counter market and each ADR corresponding to three preferred shares. 114 Credits GENERAL COORDINATOR Cristiane Malfatti SUPERVISOR Luciana Bueno GRI INDICATORS Coordinator: Rebeca Barbosa Knijnik Working group: Adriana Aparecida Fernandes, Ana Paula Soares Silva, Bruna Bin, Bruna Rodrigues Cadan, Carlos Eduardo Salvador, Fabricio Neves de Sá, Gabrielle Daré, Jaemir Grasiel Kroetz, Jonas Vitti, Jose Eduardo Araujo, Lais Romão, Leonardo Pires, Luciana Ap Bueno, Luciana Batista Pereira, Marcelo de Mello Martins, Maria Cristina de Oliveira Wendling, Mariana Zayat Chammas, Marina Stefani Carlini, Marcos Antonio Cordeiro, Rebeca Barbosa Knijnik, Rodrigo Marchi Michelucci, Rodrigo Sobreiro, Rosely D’Alessandro Onizuca, Sabrina Nádia Cotta and Tiago Fontes Asprino. CONTENT KMZ Conteúdo REVISION KMZ Conteúdo GRAPHIC DESIGN D´Lippi Comunicação Integrada PHOTOGRAPHS Adriano Gambarini Agência MDesign Agência Next Comunicação David Garb Joel Cruz Jorge Macedo Instituto Ecofuturo Isamu Mitsueda Ricardo Telles Sérgio Zacchi Shutterstock ACKNOWLEDGEMENTS We thank all employees and partners who participated in the preparation of this report, especially those who lent their images for use in the publication. June 2013 For clarifications and suggestions about the contents of this publication, please use the following communication channels: Suzano Responde: 0800 0959093 or [email protected] Investor Relations: [email protected]
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