Climate Change Data

Environmental Metrics

ESG Focus Areas

• sustainable environmental performance
• social responsibility

Environmental Achievements

• reduced global average specific net CO2 emissions by 20% by 2010 (with 1990 as the reference year)
• increased use of mineral components in cement production to more than 70% in 2008
• increased use of alternative fuels to reduce dependence on fossil fuels

Social Achievements

• launched Holcim OH&S management system and the “Passion for Safety” action plan to improve occupational health and safety
• named industry leader in the Dow Jones Sustainability Index (DJSI) for the fourth consecutive year in 2008
• published its fourth sustainability report for the year 2007 in June 2008

Governance Achievements

• compliance program called “Value Creation in a Competitive Environment” (VCCE) including fair competition reviews

Climate Goals & Targets

Environmental Challenges

• cyclical nature of the construction industry
• increases in energy costs
• competition
• environmental regulations
• health and safety regulations
• emerging markets risks
• currency risks
• risks of business interruption
• impairment risks of non-financial assets
• risks related to the taxation in Bermuda of Holcim Capital Corporation Ltd.
• risks relating to the availability of raw materials

Mitigation Strategies

• geographic diversification
• ability to react quickly to changes in market conditions (e.g., closing plants, cost-cutting)
• diversification of fuel sources, use of alternative fuels, passing cost increases to customers, long-term supply contracts
• code of conduct including principles of fair competition, regular trainings and reviews
• significant investments in occupational health and safety measures
• adjusting production capacity to market requirements
• hedging currency exposures
• long-term supply contracts for raw materials
• reducing clinker content in cement production

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• long-term supply contracts for energy and raw materials

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• regulatory changes to curb greenhouse gas emissions

Opportunities

• development of energy-efficient products and processes

Reporting Standards

Frameworks Used: IFRS, Global Reporting Initiative guidelines

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• composite cements containing mineral components

Awards & Recognition

• industry leader in the Dow Jones Sustainability Index (DJSI) for four consecutive years

Environmental Metrics

ESG Focus Areas

• value creation
• sustainable environmental performance
• social responsibility

Environmental Achievements

• Named industry leader in the Dow Jones Sustainability Index (DJSI) for the fourth consecutive year
• Lowest CO2 emissions per tonne of cement produced among cement manufacturers
• Reduced global average specific net CO2 emissions by 20% by 2010 (with 1990 as the reference year)

Social Achievements

• Improved occupational health and safety performance, reducing injuries and fatalities
• Developed and launched the Holcim OH&S management system and the “Passion for Safety” action plan
• Community involvement and stakeholder dialogue

Governance Achievements

• Compliance with corporate governance regime under the laws of Luxembourg and Bermuda
• 11 of 12 Board members are independent

Climate Goals & Targets

Environmental Challenges

• Cyclical nature of the construction industry
• Increases in energy costs
• Competition
• Environmental regulations (CO2 emissions)
• Health and safety regulations
• Emerging markets risks
• Currency risks
• Capital expenditure program
• Acquisition of businesses
• Business interruption, production curtailment or loss of assets
• Seasonal nature of construction business
• Impairment risks of non-financial assets
• International terrorism
• Minority interests and minority participations
• Litigation risks
• Availability of raw materials
• Taxation in Bermuda of Holcim Capital Corporation Ltd.

Mitigation Strategies

• Geographic diversification
• Diversification of fuel sources, use of alternative fuels, passing cost increases to customers, long-term supply contracts
• Cost-cutting program, capacity adjustment to market requirements
• Increased use of alternative fuels and raw materials
• Holcim OH&S management system and “Passion for Safety” action plan
• Careful analysis of market opportunities
• Hedging currency exposures
• Review of expansion plans
• Integration strategies
• Preventative measures
• Management of seasonal fluctuations
• Regular assessment of non-financial assets
• Contingency planning
• Shareholders' and joint venture agreements
• Legal counsel
• Long-term supply contracts
• Minister of Finance assurance (until March 28, 2016)

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS, Global Reporting Initiative guidelines

Sustainable Products & Innovation

• Composite cements containing special mineral components

Awards & Recognition

• Dow Jones Sustainability Index (DJSI) industry leader

Environmental Metrics

ESG Focus Areas

• Sustainability
• Environmental Protection
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Received ISO 14001 certification at Mucuri Unit in 1996 (first pulp and paper company globally)
• FSC and PEFC certifications for planted forests
• 41% reduction in electricity purchase from the grid in 2015
• Reduced water and fuel oil consumption, organic loads in final effluents, and odor from production units
• 100% energy self-sufficiency at Mucuri and Imperatriz Units, selling excess energy to the grid
• 83% of energy from renewable sources in 2015

Social Achievements

• Profit sharing program for employees based on personal and corporate targets
• Employee benefits: life insurance, healthcare, daycare allowance, dental care, meals/vouchers, transportation vouchers, educational support
• Partnership with Instituto Ecofuturo for environmental and educational activities
• Member of TwoSides Brasil to promote sustainability in print, paper, and forestry industries

Governance Achievements

• Listed on BM&FBOVESPA Level 1 since 2004 (high corporate governance standards)
• Code of Conduct implemented in 2006 for all Suzano Group companies
• Three advisory committees to the board of directors (Sustainability & Strategy, Management, Audit)
• Four independent directors on the board of directors

Climate Goals & Targets

Environmental Challenges

• Fluctuations in pulp and paper prices due to global demand, production capacity, and competitor strategies
• Significant competition in domestic and export markets
• Operational risks (equipment failure, accidents, fires, strikes, weather events)
• Dependence on third-party suppliers for wood and certain raw materials
• Potential for more stringent environmental regulations
• Dependence on tax benefits that may be suspended or cancelled
• High level of indebtedness requiring significant cash flow for debt service
• Dependence on planted forests for wood supply, susceptible to natural threats
• Social movements and potential for expropriation of properties
• Potential for more stringent trade barriers in key export markets
• Risks related to acquisitions and strategic partnerships
• Potential reduction in credit ratings
• Unfavorable outcomes in litigation
• Impact of global economic conditions and events
• Deterioration of labor relations
• Risks related to the Notes and the Guarantee (e.g., lack of active trading market, subordination of Guarantee)

Mitigation Strategies

• Vertically integrated operations for flexibility and cost control
• Advanced cloning techniques and silviculture practices for efficient forestry
• Proximity of forests to mills for low transportation costs
• Energy self-sufficiency through kraft chemical recovery process
• Diversified products and markets
• High social and environmental standards for competitive advantage
• Experienced management team focused on value creation
• Financial policies to mitigate liquidity risks
• Liability management program
• Investment in Project 5.1 to reduce production costs
• Investments in adjacent businesses (biotechnology, lignin, fluff pulp, tissue)
• Risk management controls and hedging strategies for currency and interest rate risks
• Long-term supply agreements with suppliers
• Diversified customer base to manage credit risk
• Preventive measures to mitigate risks to planted forests

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Long-term supply agreements with wood suppliers
• Focus on sustainable sourcing of raw materials

Climate-Related Risks & Opportunities

Physical Risks

• Drought, fire, pests, and diseases affecting planted forests
• Extreme weather events impacting operations

Transition Risks

• Increased regulation related to greenhouse gases and climate change
• Changes in energy prices and availability

Opportunities

• Development of energy-efficient products and processes
• Investment in renewable energy sources

Reporting Standards

Frameworks Used: IFRS, BR GAAP, GHG Protocol

Certifications: ISO 14001, ISO 9001, OHSAS 18001, CERFLOR, FSC

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)
• Goal 15 (Life on Land)

Initiatives related to renewable energy, GHG emissions reduction, and forest management

Sustainable Products & Innovation

• Eucafluff (fluff pulp from hardwood)
• Kraft lignin
• Recycled paper (Reciclato)

Awards & Recognition

• ISO 14001 certification
• FSC and PEFC certifications
• Various awards for management, sustainability, and product quality