We promote economic development in the regions where we operate, including by engaging local suppliers to supply products and services for our forestry, mill, logistics (pulpwood, pulp and paper), and administrative operations.

Suppliers of inputs, equipment, and services that are directly involved in our operations are evaluated throughout a process that begins with supplier onboarding and ends upon contract completion.

Our approach to procurement and supplier management follows corporate policies and internal procedures within our Integrated Management System, which governs social (occupational health, workplace safety, labor rights, child and adolescent rights, Diversity & Inclusion, human rights, social risks and impacts), environmental (water, effluents, waste, energy, environmental licensing, forest management plans, environmental risks and impacts), and governance (compliance, ethics, unfair competition, conflicts of interest, and anti-corruption) matters. Internal standards are developed in compliance with legislation, forestry and industrial certification standards, international sustainability protocols, and other regulatory standards. Operating procedures within the Integrated Management System are internal, while our corporate policies are public and available at available on Bracell’s website (see more about the Integrated Management System under GRI 2-16 Communication of critical concerns).

Processes involved in supplier management:

• Third-party due diligence: before formal engagement, all suppliers undergo due diligence screening. This process is conducted in accordance with Bracell’s policies on Third-Party Due Diligence, Supplier Qualification and Evaluation, Sustainability, and Human Rights.
• Environmental compliance validation: as part of the onboarding and screening process, suppliers acknowledge and agree to follow Bracell’s Procurement Code of Ethics. In our operations, suppliers are evaluated regarding their management of environmental risks and impacts.
• Social compliance validation: social requirements and risks are assessed as part of our approach to managing contractors operating directly at our facilities. The contractor management process includes verifying compliance with labor rights such as compensation, collective bargaining agreements, training, occupational health and safety, among other mandatory requirements for managing social risks. This is done through the Contract Management System, where contractual documents are stored and compliance with legal requirements is verified.
• Supplier evaluation and qualification: we assess suppliers’ capability to deliver products and services in accordance with legal, certification, and technical standards.
• Audits: we perform audits on all operations employing contractors.

All suppliers are screened and must meet a minimum score to retain their supplier status. The findings from screening may prevent the relevant supplier from being awarded the contract or the negotiations from proceeding.

Bracell has not set specific sustainability targets for the supply chain and follows the management practices presented under GRI 414 – Supplier Social Assessment.

Human Rights

We monitor our suppliers to ensure human rights are upheld, based on document reviews, third-party contract management, and audits conducted in our operations.

Our Human Rights Policy formalizes our commitment to sustainable development and best social practices through which we seek to positively impact people and communities. This policy outlines guidelines for managing human rights impacts and mandates compliance with labor laws.

This Human Rights Policy applies to all Bracell operations and to our relationships with all stakeholders, including contractors and subcontractors, local communities, business partners, the Forestry Partnership Program, customers, financial institutions, government organizations, trade associations, suppliers, and other priority stakeholders. The principles outlined in this code are also disseminated throughout our value chain.

Our Code of Conduct, Code of Procurement Ethics, Sustainability Policy and Pulpwood and Fiber Sourcing Policy establish guidelines on mitigating human rights risks and impacts and govern our contracts with suppliers and contractors. These policies support us in mitigating risks related to child labor and forced and slave labor in our value chain, and ensuring compliance with labor, child and adolescent rights.

This set of Company policies is aligned with international certification requirements and Brazilian laws and regulations, in particular the Regulatory Standards (NRs) of the Ministry of Labor and Employment.

We also continuously monitor the areas surrounding our forestry operations to help safeguard the human rights of communities near our eucalyptus plantations. This is done as part of a pulpwood traceability process.

To reduce actual impacts on communities near our industrial operations, we identify potential impacts to mitigate identified risks. We also disseminate our official channels for lodging concerns, complaints, and reports (see more on our reporting channels and response process under GRI 2-16 Communication of critical concerns).

We conduct both internal and external audits to manage environmental, social, management, and quality requirements. These requirements are assessed against the ISO 9001:2015, ISO 14001:2015 and Programme for the Endorsement of Forest Certification (PEFC) requirements. We also undergo external audits based on the IFC (International Finance Corporation) Performance Standards at our Lençóis Paulista (SP) site, a requirement in connection with the finance secured for Project Star—two newbuild flexible pulp lines, in operation since 2021.

Managing potential and actual impacts 

As part of our supplier management processes, we identify and analyze potential and actual impacts related to them. Both positive and negative aspects are considered in this process.

• Potential negative impacts: we identified potential impacts on product quality (kraft pulp, dissolving pulp, specialty pulp, and tissue products) due to quality issues with suppliers. We have internal controls in place to mitigate these risks.
• Actual negative impacts: these include negative social or environmental impacts and/or information security issues involving companies supplying materials and providing services to Bracell, as well as impacts that may occur in our own operations. These impacts are broad in scope and low in intensity. They are also managed through internal processes.

Other actual impacts include violations of human rights, labor rights, and environmental regulations across the value chain. This impact is broad in scope and high in intensity, and is considered a critical issue. These impacts are managed through internal processes.