Reducing the emission of greenhouse gases.

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1 CLIMATE CHANGE Purpose Contributing to the mitigation of and adaptation to the climate change by implementing actions focused on reducing greenhouse gases, permanently searching for the highest energy efficiency, implementing clean technologies, efficiently using the raw materials in Grupo Nutresa s operations, and adapting the products to the demand of a market with a higher level of awareness. STRATEGY GRI 13-2 PROGRESS GRI 13-3 Reducing the emission of greenhouse gases. Ensuring the use of cleaner fuels in all the operations and venture into the use of green or renewable energy sources. Mitigating the impact of the products on the climate during their entire life cycle.» A reduction of 5,5% was achieved, with which an accrued decrease of 21% was totaled for the term.» The Organization will continue to use biomass, which represents 23,1% of the energy offer in Colombia, Costa Rica, Mexico, Peru and Chile, which is equivalent to neutral carbon emissions that amount to tons of CO 2 eq.» Progress was made in the update of the measurement and certification of the carbon footprint for several products from the Tosh brand.» The Carbon Neutral certification of Tresmontes Lucchetti s line of products Livean and Zuko was maintained in Chile, as well as the renewal of its neutralization. Consolidating the model for establishing the price of carbon to incorporate it into the project assessments in terms of eco-efficiency and greenhouse gases.» The Organization defined the methodology for calculating the price of carbon, determining it is COP 18./ton of CO 2 eq, in order to apply it in the financial valuation of the environmental investments. 168 Integrated Report 216

2 Reducing the environmental impact of the operations and products Risks and opportunities GRI 13-1 Grupo Nutresa s climate change policy identifies and estimates the effects that the physical, financial, regulatory, market-access and changing consumer preference risks could cause on the Organization and its value chain. The risks associated with climate change pose threats to the Organization s financial performance due to the rise in the planet s temperature, the constant climate variations and the meteorological phenomena that affect the availability of resources, which in turn motivates the governments to respond with laws that regulate emissions. In 216, the Colombian Ministry of Finance included in the tax reform a green tax or tax on carbon from fossil fuels, which additionally to promoting its efficient use, it promotes the use of low-carbon energy alternatives and the reduction of energy consumption and greenhouse gas emissions. This tax will come into force in 217. In the United States, there already are emission transaction models in development. Mexico has a governmental carbon-price initiative, and Chile expects to adopt a similar initiative between 217 and 218. The vulnerability conditions tied to the availability of sources of energy and raw materials have already been included in the risk management plan with the purpose of determining to what extent the changes in the climate, physical and social parameters require value chain adaptation actions. Outlook Grupo Nutresa will continue to work on reducing its greenhouse gas emissions by optimizing and improving the operations, implementing clean technologies and fuels, using renewable energy alternatives, investing in internal-efficiency initiatives and compensating the carbon emissions of the products. The update to the inventory and the measurement of greenhouse gases will be maintained for the industrial and logistical operations, which will allow to establish specific improvement actions for the mitigation of and adaptation to climate change by the Organization. The climate change risk analysis will be strengthened, as well as Yariguíes plantation. Santander, Colombia. the assessment of the financial risk and the implementation of measures, deadlines and estimated costs related to the actions that should be carried out in those zones that could suffer climate change effects and/or water shortage, which in turn could threaten the operations. The Organization will continue to develop brand projects and strategies focused on achieving Carbon Neutral products and/ or processes, such as those of the Tosh brand in Colombia and Costa Rica. Lastly, Grupo Nutresa will continue to explore energy supply initiatives that reduce climate-related impacts. Success stories and acknowledgments GRI 13-3 In the Ice Cream Business, an aspect worth highlighting is the progressive replacement of commercial refrigeration equipment that use R134a refrigerants with environmentally friendly equipment that use R29 refrigerants. This action has allowed an emission reduction of 861 tons of CO 2 eq/year (Scope 3). Goal for 22: reducing by 33% CO ² eq/per Ton. Another milestone worth highlighting, in the case of the Chocolates Business in Costa Rica, is the replacement of a cauldron that uses fossil fuels with a state-of-theart cauldron that uses biomass as fuel (wood pellets from sawmill waste that is considered to produce neutral emissions). This action allowed to achieve a reduction of 3 tons of CO 2 eq/year. 169

3 Progress achieved in 216 GRI 13-3 Grupo Nutresa considers climate change to be a material topic and a strategic priority to manage, which is why it focuses its efforts on the search for a greater energy efficiency and on the use of cleaner technologies that enable the reduction and compensation of the greenhouse gases in its productive processes. Climate Change Policy In 216, the Organization defined a Climate Change Policy with the objective of establishing corporate conduct guidelines regarding climate change management, which includes the following aspects: 1. Climate change governance: assigning the responsibility of the management at different organizational levels. 2. Risk quantification: identifying and assessing the risks imposed by climate change on the Organization. 3. Measurement: measuring the direct and indirect impacts caused throughout the life cycle of the operations, products and services. 4. Mitigation: establishing greenhouse gas emission reduction goals and developing mitigation programs that allow to achieve them. 5. Adaptation: starting up measures that alleviate the climate change risks with the purpose of reducing the impacts climate change causes on the direct operations and the sourcing processes. 6. Reporting: communicating to the stakeholders the activities undertaken to manage risks and opportunities related to climate change, considering the disclosure of greenhouse gas emissions, as well as the actions focused on mitigating and adapting to said risks. For the term, the Organization achieved an accumulated reduction in the indicator for emissions of greenhouse gases scopes 1 and 2 of 21%. Emissions control system in the soluble coffee process, Colcafé Medellín. Emission Reductions of greenhouse gases In 216, the Organization achieved a reduction in the emissions of GHG scopes 1 and 2 that totaled 937,8 tons of CO 2 eq/year, which correspond to,9% of the total emissions in Colombia. This achievement was attained by means of the implementation of operational eco-efficiency improvements in all Businesses. In one of its production plants, the Chocolates Business carried out the recovery of condensation and the installation of economizers or heat exchangers to the cauldrons, as well as the redesign of the heating system of one of the tanks, allowing to achieve a reduction in emissions equivalent to 275,2 tons of CO 2 eq/year. In the main Coffee Business operation, the roasting technology was changed and updated, reducing thus the emissions down to 154 tons of CO 2 eq/year. Finally, in the Biscuits Business operation in Colombia, the traditional lighting was replaced with LED lighting and the conventional engines were replaced with high-efficiency electric engines, allowing to reduce the emissions by 9,8 tons of CO 2 eq/year. 17 Integrated Report 216

4 Reducing the environmental impact of the operations and products Direct and indirect emissions (scopes 1 and 2) GRI 35-1, GRI 35-2, GRI 35-4 [SDG 3] [SDG 12] [SDG 13] [SDG 14] [SDG 15] Scope 1 emissions (tons of CO2e) Scope 2 emissions (tons of CO2e) Total emissions -scopes 1 and 2- (tons of CO 2 e) Total emissions -scopes 1 and 2- (kg CO 2 e/t.p.) Colombia , 132, , 123, ,2 131, ,9 123,76 Peru , 26, ,1 35, ,9 37, ,6 267, Costa Rica ,5 199, ,7 187, ,9 185, ,1 15, Mexico , 195, , 212, ,1 247,9 4.65,2 179, Chile ,9 11, ,2 184, ,9 182, ,1 226,63 Dominican Republic , 38, N/D N/D N/D Carbon pricing As part of the commitment to reduce GHG emissions, Grupo Nutresa determined that its internal price for carbon is COP 18./ton of CO 2 eq. For the calculation of this internal price, the Organization considered factors such as the inventory of emissions, the cost of the compensations and purchases of green or alternative energies (if applicable), reference values of the carbon ton in international markets and of the carbon tax in the countries where it exists. This internal price is used for the financial assessments of the eco-efficiency projects with the purpose of recognizing the benefit at the moment of making investment decisions. Compañía de Galletas Noel employee from the productive process department. 171

5 Employee incentives for reducing carbon emissions The Organization continues to measure the management by means of indicators and motivating the good results through incentives for executive managers and employees who directly intervene in the management of initiatives related to climate change. These performance indicators are part of the variable compensation of the top-level positions of the executive management, operations managers, production managers, chiefs of maintenance and chiefs of environmental management. Reduction of emissions of greenhouse gases GRI 35-5 [SDG 13] [SDG 14] [SDG 15] Net emissions reduction in tons of CO 2 e Thermal energy consumption reduction (scope 1) Electric power consumption reduction (scope 2) ,8 782,1 169,7 155,7 Financial consequences, diverse risks and opportunities for the Organization s activities due to the climate changegri 21-2 [SDG 13] Risks and effects of regulatory changes Financial implications of the risks related to changes in the regulations before making decisions Estimated risk materialization time Actions that have been taken or that will be taken to mitigate the risk Risks and effects of changes in climate parameters Estimated materialization time of the risk Actions that have been taken or that will be taken to mitigate the risk Opportunities and effects derived from climate change Estimated materialization time of the opportunities Actions that have been taken or that will be taken to take advantage of the opportunity In the corporate risk assessment exercise, Grupo Nutresa determined that climate change is a significantly important factor for the business, identifying short and medium-term scenarios for the creation of payments due to the GHG emission. In the long term, it anticipates that the product Environmental Footprint (PEF) labeling, based on the analysis of the life cycle, could be a legal impediment for coffee products, meat byproducts and pasta products. Between COP 1,78 billion and COP 8,44 billion. 5 to 7 years Check within this chapter the information related to: employee incentives for reducing carbon emissions, carbon price corporate model, innovation focused on a low-carbon development, and carbon footprint of products. Due to the increasingly intense climate variations and the volatility of the oil prices, the Organization identified a risk in the volatility of the price of raw materials that could reduce the profitability. More than 6 years. Check within this chapter the information related to: innovation focused on a low-carbon development and carbon footprint of products. The awareness of consumers regarding the environmental impacts of the products is increasingly growing. 1 to 5 years. Check within this chapter the information related to: mitigation of the environmental impact of the products and services. 172 Integrated Report 216

6 Reducing the environmental impact of the operations and products Innovation focused on a low-carbon development The Innovative Success Stories program, which is part of the Imagix model (refer to the Effective Innovation chapter), and in which the Company s employees and suppliers can participate by suggesting improvements for the processes and products. The program also contemplates the acknowledgment of the ideas that are aimed at preventing, controlling and mitigating the environmental impacts, including the ones related to climate change. Other indirect emissions of greenhouse gases (scope 3) GRI 35-3 [SDG 3] [SDG 12] [SDG 13] [SDG 14] [SDG 15] Content of the indicator Air travels of the employees (tco 2 e) Distribution (tco 2 e) Total emissions of greenhouse gases -scope 3- (tco 2 e) Carbon footprint of products The Organization maintains the calculation of the carbon footprint for six product categories: biscuits, chocolates, hot dogs, coffee, ice creams and pasta (more than 3 product references). Furthermore, the Colombian Institute of Technical Standards and Certification (Icontec) performed the calculation and verification of the product carbon footprint to 64 TOSH biscuit product references, as well as the processes of the Coffee and Chocolates Businesses in Colombia. Additionally, the Neutral Carbon certification of Tresmontes Lucchetti s line of products Livean and Zuko was maintained in Chile, as well as the renewal of its neutralization. Reforestation activity carried out by Nutresa Mexico employees. 173