In 2024, Bracell reported a total of ten monetary fines and five non-monetary sanctions related to non-compliance with laws and regulations applicable to our forestry operations in São Paulo. The total amount of fines was R$ 3,919,277.14, including R$ 24,716.64 associated with violations allegedly committed in prior reporting periods.

We consider a case of non-compliance significant where it exceeds R$ 1 million or involves non-compliance with requirements or legislation that could impact the continuity of our activities, cause damage to our reputation or compromise consumer loyalty or customer and employee trust.

In our industrial operations in São Paulo, there were no fines or non-monetary sanctions for non-compliance with laws and regulations in 2024.

Despite having been party to violation notices and labor proceedings, Bracell presented defenses, appeals or judicial proceedings to annul the violation notices, as well as holding a Conduct Adjustment Agreement (TAC) with the public authorities concerning the non-fulfillment of working hours requirements.

In 2024, Bracell received no significant fines relating to non-compliance with laws or regulations.

To ensure compliance, Bracell fulfills federal, state and municipal legislation application to operations and has specialized internal departments addressing these matters, such as Legal, Environment and Certifications, Tax, Workplace Health & Safety, Social, Governance and Compliance. Legal requirements are managed by means of the Verde Ghaia SOGI system, which monitors and ensures compliance with standards applicable to Bracell Bahia.

In the reporting period, no fines or non-monetary sanctions concerning non-compliance with laws or regulations were reported for Bracell Papéis, either in São Paulo or in the Northeast. There were no significant cases of non-compliance during the reporting period.

All of our operations are assessed on corruption risk in accordance with the RGE Group Anti-Corruption Policy (internal document) and the Bracell Anti-Bribery and Anti-Corruption Policy (read more about Bracell’s operations structure under GRI 2-6).

The Internal Audit, Compliance and Risk Management teams lead assessments of risks related to ethics and corruption. Identified risks are described in internal procedures forming part of Bracell’s Integrated Management System (see more in GRI 2-13), which formalize procedures relating to corruption, prevention measures and impact mitigation.

Corruption risks, identified in the compliance risk matrix, are defined as corruption, bribery, fraud or similar acts committed by employees or third parties in Bracell’s name, by granting an unfair advantage or other acts defined as corruption in applicable legislation. The process of identifying and evaluating these risks was based on an assessment prepared by the Compliance department, following meetings with different departments and senior management. Interviews were carried out with the Audit, Human Resources, Enterprise Risk Management (ERM), Procurement and Communication teams, among others. The Compliance department also joined the process and risk design workshops led by the ERM together with technical departments, assessing integrity risks.

The main causes identified include relationships with licensing, regulatory and oversight bodies, the absence of policies setting out procedures for contacting government officials, relationships with political actors and interaction with public officials by third parties acting on behalf of Bracell. Risks were also highlighted relating to the hiring of employees historically linked to the public sector or to government-owned companies, inadequate controls for the award of funding, presents, hospitality, donations and sponsorship, as well as the engagement of suppliers with a negative compliance recommendation in due diligence, but whose engagement was approved by senior management. Other issues identified include the lack of moral effect from monitoring and sanctions measures for non-compliance and the bad faith of employees or third parties who attempt to commit unlawful acts. The process of evaluating and managing corruption risk is continually being improved to strengthen Bracell’s culture of integrity and compliance.

Bracell also has a Whistleblowing Policy for Financial Reporting Inaccuracies, aimed at all employees. This document sets out fundamental principles and procedures for reporting and investigating concerns. The policy presents the means whereby:

1. Employees raise concerns about possible inaccuracies in financial reports, internal controls or any other related matters.
2. A fair and independent investigation is carried out, with adequate follow-up to address each concern raised by employees.

Whistleblowers are advised to report possible inaccuracies to the Internal Audit departments in all operations. Reports can be made by telephone, email, snail mail, face-to-face meetings, and other means of communication.

Bracell has formal channels for submitting concerns and complaints (Fale Conosco and Bracell Escuta—see more in GRI 2-25). Bracell formalizes its commitment to ethics and sustainability by means of a Code of Conduct and corporate policies that are public and disclosed to all stakeholders. Our policies are available on our website at https://www.bracell.com/en/institutional/governance/ and https://www.bracell.com/en/sustainability/our-commitment/.

Bracell’s Compliance team, which is part of the Legal department, is responsible for the direct management of corruption-related matters, although this issue is evaluated in relation to risks across all Bracell operations, in real time (see more in GRI 205-1).

In 2024, the Compliance department launched an Integrity Program comprising a series of initiatives to reinforce related risk-management policies and procedures. These initiatives ensure that Bracell’s operations are carried out ethically and transparently, in accordance with the law and company values.

Integrity Program

Through our Integrity Program, we assess risks according to their likelihood and magnitude of impact, and:

– We create and/or update corporate policies and procedures to enhance control of operational processes in relation to these risks

– We carry out training and workshops with a focus on risk-management practices and control mechanisms

– We carry out communication initiatives and events that reinforce best practices in integrity, such as the disclosure of information bites on the subject and the launch of a guide with questions and answers about the Integrity Program and Code of Conduct.

All Bracell employees are informed and trained on anti-corruption policies and the Code of Conduct. The same applies to the six members of the Sustainability Steering Committee—83% of whom are based in São Paulo and 17% in Bahia (learn more about each member under GRI 2-9).

All newly hired employees receive a copy of the Code of Conduct during induction. They also receive training on integrity, anti-bribery and anti-corruption. Other practices include the following:

• All members of the senior leadership team attend regular training on ethics and integrity, including training on the Code of Conduct
• Employees in senior positions or who are responsible for conducting supplier due diligence receive additional, personalized training on RGE’s business partner due diligence process
• All Bracell suppliers receive copies of our Procurement Code of Conduct and undergo due diligence and a review of documentation and evidence demonstrating compliance with local, national and international laws and regulations, certification requirements, technical standards and regulatory standards

Anti-corruption training is mandatory for all employees and delivered via our online training platform. We communicate mandatory training for contractors working on site in our operations.

As of 2024, Bracell Papéis Nordeste is in the process of being fully integrated into Bracell’s corporate systems and procedures. Employees at this site did not attend the 2024 anti-corruption training, which is scheduled for 2025.

The percentage of employees trained is 37% for pulp operations in São Paulo, 55% for Bracell Papéis in the Southeast and 40% for pulp operations in Bahia.

Most untrained staff work in the field in forestry operations, without routine access to our training system. To cater for this work setting, we are developing specific training for this audience.

Total number and percentage of governance body members who have received communications and training on anti-corruption policies and procedures, by region

Bracell	Informed	Trained
Total number of members in the year	5	5
Total number of members who have received communications/training	5	5
Percentage of members who have received communications/training (%)	100	100

Total number and percentage of employees who were informed and trained in anti-corruption policies and procedures, by region

	Bahia		São Paulo		Papéis Sudeste		Total Bracell
	Informed	Trained	Informed	Trained	Informed	Trained	Informed	Trained
Total workforce	11,115		6,865		654		19,288
Total number of employees who have received communications/training	11,115	4,517	6,865	2,541	654	357	19,288	7,772
Percentage of employees who have received communications/training (%)	100	40.64	100	37.01	100	54.59	100	40.29

Number and percentage of employees who were informed and trained in anti-corruption policies and procedures, by employee category

	Informed	Trained
Executive Board
Total workforce	16	–
Total number of employees who have received communications/training	16	–
Percentage of employees who have received communications/training (%)	100%	–
Senior Manager
Total workforce	43	–
Total number of employees who have received communications/training	43	–
Percentage of employees who have received communications/training (%)	100%	–
Middle Management
Total workforce	161	–
Total number of employees who have received communications/training	161	–
Percentage of employees who have received communications/training (%)	100%	–
Coordinator
Total workforce	258	–
Total number of employees who have received communications/training	258	–
Percentage of employees who have received communications/training (%)	100%	–
Specialist
Total workforce	213	–
Total number of employees who have received communications/training	213	–
Percentage of employees who have received communications/training (%)	100	–
Technical/Supervisor
Total workforce	1,150	–
Total number of employees who have received communications/training	1,150	–
Percentage of employees who have received communications/training (%)	100%	–
Administrative
Total workforce	1,541	–
Total number of employees who have received communications/training	1,541	–
Percentage of employees who have received communications/training (%)	100%	–
Operational
Total workforce	6,815	–
Total number of employees who have received communications/training	6,815	–
Percentage of employees who have received communications/training (%)	100%	–
Trainee
Total workforce	23	–
Total number of employees who have received communications/training	23	–
Percentage of employees who have received communications/training (%)	100%	–
Total
Total workforce	10,220	–
Total number of employees who have received communications/training	10,220	–
Percentage of employees who have received communications/training (%)	100%	–

Note: the percentage of employees trained is 37% for pulp operations in São Paulo, 55% for Bracell Papéis in the Southeast and 40% for pulp operations in Bahia. Most untrained staff work in the field in forestry operations, without routine access to our training system. To cater for this work setting, we are developing specific training for this audience.

Number and percentage of business partners who have received communications and training on anti-corruption policies and procedures:

	Informed	Trained
Total number of business partners	1,914	1,914
Total number of business partners that have received communication/training	1,914	1,914
Percentage of business partners who received communication/training (%)	100	100

Note: Bracell Papéis Nordeste is currently undergoing integration into Bracell’s corporate compliance framework. As a result, its employees did not attend the company-wide anti-corruption training program in 2024. Training for this operation is scheduled for 2025.

Confirmed incidents of corruption and actions taken

	2022	20231	20242
Total number of confirmed incidents of corruption	0	2	4
Nature of reported incidents	0	Fraud	Bribery and kickbacks; fraud
Total number of confirmed incidents in which employees were dismissed or disciplined for corruption	0	1	4
Total number of confirmed incidents where contracts with business partners were terminated or not renewed due to violations related to corruption	0	1	0

¹ In 2022, a case of fraud was reported relating to a forestry module, which resulted in an internal audit. That audit culminated in the dismissal of the employees concerned. Although the incident took place in 2022, it was reported for 2023, the year in which there was also another case of fraud, this time relating to travel reimbursements, which led to the dismissal of one employee. In 2023, we recorded no cases of public corruption.

² For the four confirmed cases of corruption in 2024, the employees involved were duly disciplined or dismissed. The employee categories affected include supervision, coordination and operational. Altogether, 29 employees were either disciplined or dismissed. In one case concerning reimbursement of moving expenses, 26 employees were dismissed. In the other cases, there was only one dismissal per case.

Bracell does not have any pending or concluded legal actions in 2024 related to anti-competitive behavior, anti-trust, and monopoly practices.