Total remuneration at Bracell is based on the employee’s role as well as their skills and competencies. We also apply variable compensation criteria linked to results, alignment with, and dissemination of our T.O.P.I.C.C. organizational values.

Our compensation structure is compliant with current labor laws and all collective bargaining agreements. We also benchmark our compensation practices so we remain competitive in attracting and retaining talent to support Bracell’s strategies and goals.

Internally, compensation is determined based on a role’s grading and/or its relative importance in the organizational structure, internal pay equity, the knowledge and competencies required for each role, the defined organizational structure, available budget, and both individual and company performance.

The salary table is updated annually based on market benchmarks. Benchmarking assessments cover variables such as competitor compensation, regional benchmarks, labor availability, unemployment rates, and turnover.

For executive-level positions, Bracell’s Compensation Policy includes fixed and variable pay, signing bonuses and hiring incentives, retirement benefits, and severance-related policies.

For leadership positions, variable compensation includes bonuses linked to achieving organizational goals, including commitments outlined in Bracell 2030 (read more under Bracell 2030).

Variable compensation consists of two components:

Performance Contract (PC): individual contracts outlining employee-specific performance targets, as part of a corporate bonus program. This model aligns individual with organizational objectives and drives high performance and talent retention.

Core Values Evaluation Form: in this component, payment is tied to performance assessed through our Profit-Sharing Program (PPR), which is agreed annually by the company, an employee committee, and the labor union to match compensation with overall business performance.

Contract terminations follow the guidelines established by Brazilian labor legislation.

In 2024, our supplier network included 1,914 registered partners with active contracts supporting operations at Bracell and Bracell Papéis Sudeste, working directly at the Lençóis Paulista (SP) site. In our Bahia and Pernambuco operations—Bracell and Bracell Papéis Nordeste—we had a total of 9,823 suppliers with active contracts.

We sourced 91% of our supplier spend locally in São Paulo—for both Bracell and Bracell Papéis Southeast operations—and 61% in Bahia, for Bracell operations. At Bracell Papéis Nordeste, 53.15% of supplier spend was with local suppliers—for operations in Feira de Santana (BA), São Gonçalo dos Campos (BA), and Pombos (PE).

Local suppliers are defined as those based in the states where our operational sites are located. The percentage of spending on local suppliers is calculated across all sites. For confidentiality reasons, Bracell does not disclose financial data (read more in GRI 204-1: Proportion of spending on locally-based suppliers).

Workers who are not employees but provide services to the company

Gender	2022			2023			2024*
	Bahia	São Paulo	Bracell	Bahia	São Paulo	Bracell	Bahia	São Paulo	Southeast Paper Operations	Northeast Paper Operations	Bracell
Men	3,025	–	12,434	2,671	12,056	14,727	3,877	11,397	502	–	15,776
Women	138	–	138	108	1,182	1,320	202	1,356	16	–	1,574
Total	3,544	12,434	15,597	2,809	13,238	16,047	4,079	12,753	518	5,744	17,350

Note 1: the number of workers refers to contractors employed in areas such as catering, cleaning, machine and equipment maintenance and repair, security, as well as suppliers operating in engineering, forestry services, and transportation.

Note 2: Bracell Papéis started operations in 2023 and is reporting its sustainability performance indicators for the first time, for year 2024.

Note 3: Bracell Papéis Nordeste operations are currently integrating their processes into Bracell’s management system. Worker data is only available as a total figure, without a breakdown by gender.

Bracell does not have an independent compensation committee responsible for overseeing the process for determining remuneration. Employee compensation comprises a base salary commensurate with the role, supplemented by various benefits. Each year, the terms of collective bargaining agreements are incorporated into compensation packages following negotiations with unions representing employee categories within the workforce.

The salary structure for our direct employees is based on legal requirements, market benchmarking, and biannual internal performance evaluations. Our compensation and variable compensation policies (which are tied to performance reviews) align with the compensation and evaluation policies of the RGE Group (read more in GRI 2-20).

For employees in leadership positions (specialist and above), performance evaluations are conducted by a committee comprising Bracell leaders from relevant departments (learn more in disclosure GRI 2-19).

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.

Suppliers of equipment, products and services are screened using the approach described in GRI 3-3 Management of material topics: Supply chain management. All suppliers are required to be screened, including new suppliers.

Bracell continuously monitors supplier performance based on ISO 9001:2015, annually assessing suppliers of chemical inputs, transportation, and calibration services. These assessments determine whether they are onboarded, remain in the supply chain, or are terminated. Assessment results are communicated directly to suppliers in a transparent manner.

Audits are periodically carried out in contractors’ operations to ensure compliance with internal policies and environmental, safety, and ethics standards.

Since December 2024, we have used the Linkana platform in some operations to enhance supplier screening and monitoring on environmental management criteria, impact prevention, and fulfillment of commitments to sustainable practices. These assessments cover compliance with national and international environmental standards, public data from the Federal Revenue Service, clearance certificates, block lists, and sustainability indexes. After data validation, a confidence score informs risk recommendations and directs the process toward automatic or manual approval workflows.

We routinely assess risks and impacts related to our operations’ direct suppliers. Risk and impact assessments are conducted using Bracell’s environmental aspect and impact matrix, which conforms to the requirements of the certification standards applicable to our operations as well as applicable laws and regulations. In 2024, no suppliers in our mill operations were identified as causing negative environmental impacts.

Key environmental risks assessed in the supply chain include deforestation, biodiversity loss, pollution and water withdrawal, nonrenewable energy use, improper waste and effluent disposal, and greenhouse gas (GHG) emissions.

In managing these risks, we conduct internal and external environmental audits that assess compliance with certification standards, internal procedures, and legal requirements. These audits, carried out at least twice a year, cover 18 departments on a sampling basis. In addition, Bracell holds environmental certifications such as ISO 14001 (Environmental Management Systems), NBR 14789 (Sustainable Forest Management), and ISO 19001.

We also conduct regular audits on operations employing contractors. In these audits, we evaluate operational practices for compliance with certification standards, corporate policies, legislation, and regulatory standards on safety, ethics, and compliance.

These audits include supply chain and product life cycle assessments, ensuring operations are aligned with sustainable practices.

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 on the Bracell website.

Supplier management processes are described under GRI 3-3: Management of material topics: Supply chain management No suppliers operating directly in our facilities were identified as causing significant—actual or potential—negative environmental impacts.

Learn more about supplier social and environmental assessments under GRI 308-1 New suppliers that were screened using environmental criteria.

We have no operations or suppliers that pose risks of violating workers’ rights to exercise freedom of association or collective bargaining. We reaffirm our commitment to protecting labor rights by providing a safe, inclusive, and respectful work environment. Our internal Human Resources policy upholds diversity, equity, and fairness, ensuring full compliance with local and international laws and regulations. This ensures that freedom of association rights are always protected and upheld.

Bracell does not have, and has never had, operations involving child labor or young workers exposed to hazardous work.

We consider operations that carry potential risks of child labor or hazardous tasks involving young workers to include planting, road construction and maintenance, and the maintenance of forestry machinery and equipment. These operations are located in the regions where our industrial sites are based, namely in the states of São Paulo and Bahia, including areas operated by third parties.

We have strict preventive measures in place to mitigate any risk related to this issue. For contractor workers, we require documentation and conduct regular visits to forestry operations, carried out by our Internal Audit and Certification teams.

During onboarding for both employees and contractor, our Code of Conduct is presented and made available in printed and online versions, accessible via QR code, along with documents such as our Anti-Corruption and Anti-Bribery Policy and the Human Rights Policy, available on Bracell’s website. Our Human Rights Policy, which applies to employees, contractors, and subcontractors, emphasizes our zero-tolerance stance on child labor and forced or compulsory labor.

All contracts signed with third parties or subcontractors include standard clauses that ensure zero tolerance for child labor.

Child labor is listed in our compliance matrix as a serious violation. Identified potential causes include: activities with long shifts and high demand for operational labor; high levels of outsourcing; and lack of monitoring at worksites managed by contractors, especially in rural areas.

Audits of operations

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.

Audits are periodically carried out in contractors’ operations to ensure compliance with internal policies and environmental, safety, and ethics standards.

During onboarding for both employees and contractor, our Code of Conduct is presented and made available in printed and online versions, accessible via QR code, along with documents such as our Anti-Corruption and Anti-Bribery Policy and the Human Rights Policy, available on Bracell’s website. Our Human Rights Policy, which applies to employees, contractors, and subcontractors, emphasizes our zero-tolerance stance on forced or compulsory labor.

All contracts signed with contractors or subcontractors include standard clauses ensuring zero tolerance for forced or compulsory labor (see more under GRI 3-3 Management of material topics: Supply chain management).

We have identified the following as operations with potential risk of forced or compulsory labor: planting, road construction and maintenance, maintenance of forestry machinery and equipment, and outsourced labor.  These operations are located in the regions where our industrial sites are based, namely in the states of São Paulo and Bahia, including areas operated by third parties.

We have strict preventive measures in place to mitigate any risk related to this issue. For contractor workers, we require documentation and conduct regular visits to forestry operations, carried out by our Internal Audit and Certification teams.

Audits of operations

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.

Audits are periodically carried out in contractors’ operations to ensure compliance with internal policies and environmental, safety, and ethics standards.

Bracell’s Internal Audit team has developed a specific plan for forestry areas where outsourced workers are present and risks are higher, ensuring compliance with company policies and protecting workers’ rights. Forced or compulsory labor is classified in Bracell’s compliance matrix as an extreme violation. Identified potential causes include: activities with long shifts and high demand for operational labor; high levels of outsourcing; and lack of monitoring at worksites managed by contractors, especially in rural areas.

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) matters.

Social criteria are evaluated as part of our approach to managing contractors working directly in our facilities. Through our Contract Management System, we review and monitor contractor documentation demonstrating compliance with legal requirements, including clauses from collective bargaining agreements, mandatory technical and operational training, occupational health criteria, and operating licenses. This applies to all suppliers, including new suppliers.

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.

Since December 2024, we have used the Linkana platform to enhance supplier screening and monitoring on environmental management criteria, impact prevention, and fulfillment of commitments to sustainable practices. These assessments cover compliance with national and international environmental standards, public data from the Federal Revenue Service, clearance certificates, block lists, and sustainability indexes. After data validation, a confidence score informs risk recommendations and directs the process toward automatic or manual approval workflows.

In 2024, no suppliers were identified as responsible or potentially responsible for negative social impacts.

We actively monitor social risks involving contractors working directly in our operations. In 2024, no suppliers were identified as responsible or potentially responsible for negative social impacts.

We conduct our forestry operations in compliance with the Forestry Certification Endorsement Program (PEFC) Standards, support environmentally compliant, socially beneficial and economically feasible operations. With the recertification of our plantation areas in 2024, a new five-year cycle begins, during which we commit to following certification standard requirements and commissioning annual third-party audits of our operations.

All pulpwood resource is verified against certification standards. In São Paulo, 70% comes from certified Bracell-managed plantations, and 30% from controlled sources. In Bahia, 90% of pulpwood is certified, while 10% comes from controlled sources.

We monitor 100% of the pulpwood resource. All shipments undergo due diligence to identify environmental and social risks and prevent the use of pulpwood from controversial sources, in line with Bracell’s commitment to not sourcing pulpwood of questionable origin.

In 2023, our São Paulo and Bahia mills sourced pulpwood from 73 suppliers. Document and field inspections are conducted to verify sustainable practices such as oil spill containment, proper waste disposal, non-use of burning for clearing, and compliance with protected area and legal reserve requirements. Additionally, our Bahia operation is certified to ISO 14001 – Environmental Management Systems.