2013 SUSTAINABILITY REPORT

Transcription

1 beauty is what we do 2013 SUSTAINABILITY REPORT beauty is building, together, a more sustainable world Relatório de Sustentabilidade 2013 INGLES.indd 1 20/08/14 18:12

2 Message from the Presidents institutional our history structure sustainability at the Boticário Group raw materials and packaging sales channels eco-efficiency shared responsibility Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:12

3 4 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report Beauty is what we do. With this concept, we express our true calling and translate our way of seeing and making beauty. A concept that reflects our performance in the cosmetics market and magnifies the beauty that is in aesthetics and suggests a broader interpretation, beyond the reach of the eye. Our sustainability strategy is embedded in our business management model and is a practical example of this concept of beauty, which is reflected throughout our value chain. It can be identified by our way of inspiring employees, suppliers, franchisees, direct sales representatives and consumers, with whom we have an open partnership and transparent dialogue, and also by how we express our respect for the environment. These are demonstrations of our way of making beauty, of seeking the sustainable growth of all those involved. By directing our efforts to the fronts of Raw Materials and Packaging, Sales Channels, and Eco-Efficiency, we express our focus on sustainability, as well as our predisposition to constantly review processes so as to identify opportunities to reduce impacts. A good example of our line of work can be seen in our expansion to Bahia. To make this project reality and maintain our growth, we have invested R$ 535 million in a new factory, which will be inaugurated in 2014, and in a distribution center, which is already in operation. These two new developments will further enhance the servicing of our business units through our points of sale and direct sales representatives in Brazil. We follow strict standards of sustainability in order to constantly improve our management and our processes. To this, we add the fact of generating employment and social and economic development in the region, as well as added value for the consumer and society by means of better and smarter consumption options. Our main efforts in sustainability, as well as our way of inspiring and getting things done, are presented in this report. I hope that its reading is enlightening and stimulates your attitudes. I thank all those who make beauty with us every day. Good reading. MESSAGE FROM THE PRESIDENTS We are entering an era of transformation. This perception reflects the internal achievements of the Boticário Group but above all, it reflects the large behavioral change in society that occurs concurrently with technological revolutions, and political, economic, social and environmental issues. The human being is changing. There is a restlessness in the air. A mix between the will to move forward, to conquer and succeed, balanced with a new awakening that demands common sense, division of responsibilities, building more ethical bonds and adopting positive attitudes towards quality of life and the well-being of all. Within this new reality, to say that sustainability is fashionable would be to underestimate the eloquence of its true role, which is to inspire and to anticipate trends. It is, in truth, leading this journey into the future. Based on this thought, and supported by our communication positioning that beauty is what we do, we, of the Boticário Group, have worked to incorporate this desire to do more and do better today, always with an eye on tomorrow. Moreover, we do this not only for ourselves but for all those who interact with us: for society; for Brazil; for a more beautiful world. Our actions and results, in this sense, may be conferred by reading this material. I take this opportunity to thank all those who participate in this incessant construction, encouraging us to move ahead and helping to inspire others to walk with us. Artur Grynbaum President of the Boticário Group Miguel Krigsner Chairman of the Board of Directors of the Boticário Group Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:12

4 6 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report INSTITUTIONAL APPROXIMAT 6 THOUSAND DIRECT COLLABORATORS IN 2013 RESEARCH AND DEVELOPMENT CENTER WITH INSTALLATIONS COVERING 8 thousand m² ACCOMMODATING 230 PROFESSIONALS NEW FACTORY IN SÃO JOSÉ DOS PINHAIS WITH AN AREA OF 9 thousand m² DEDICATED EXCLUSIVELY TO THE PRODUCTION OF MAKEUP FOR OUR BUSINESS UNITS The Boticário Group believes that with positive attitudes it is possible to make the world a more beautiful place for everyone. Formed by O Boticário, Eudora, quem disse, berenice? and The Beauty Box and maintaining the Boticário Group Foundation for the Protection of Nature, the company was born in 2010 with the objective of becoming a reference in the beauty market. Therefore, our vision is not limited to delivering innovative solutions to the consumers of our business units. It also contemplates a perspective that is beyond the reach of the eye, because our greatest pride is to be a Group that multiplies beauty in all its forms of expression. With approximately 6,000 direct collaborators, in 2013 we dedicated ourselves to our continuous growth in the market in which we operate, following the parameters of sustainability established in With this line of conduct, we have moved forward and the initiatives and results obtained in the period are reported in this Sustainability Report. Large projects, such as the opening of a new Research and Development Center in São José dos Pinhais (PR), with intelligent installations distributed throughout 8,000 m², accommodating approximately 230 professionals have been completed. Likewise, in the same industrial complex, a new factory covering almost 9,000 m², dedicated exclusively to the production of makeup for our business units, also entered into operation. Not to mention the inauguration of our new corporate offices in Curitiba, located in the Corporate Jardim Botânico Building, with an area of 7,910 m², which is now home to 452 collaborators in various administrative positions. All this added to our expansion works in Bahia, which evolved during the last year and include the new factory and new distribution center with initial operations scheduled for It is important to emphasize that the two projects are designed to meet the requirements for Leadership in Energy and Environmental Design (LEED) accreditation - see page 47 of this Report. Our sustainability strategy matured greatly during this period, in the wake of the company s growth and, consequently, also achieved important results throughout the year. All this may be easily found by reading the chapters Raw Materials and Packaging; Sales Channels; Eco-efficiency; and Shared Responsibility, the latter being geared to growth opportunities and activities that encourage sustainability among the various publics with which we relate. Our beauty is therefore guided by sustainability, making it economically viable and highlighting an inspiring behavior with regard to human relations and the environment. To learn more about our work in the beauty business and sustainability, please visit our website: Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

5 8 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report OUR HISTORY 1977 Learn more about our history (1977 to 2013) at in the Institutional menu The Molecular Biology Laboratory (Labim) enters into operation, currently named Biological Studies and Alternative Methods Group (NEBMA). The O Boticário compound ding pharmacy is opened in Curitiba (PR). O Boticário launches Acqua Fresca, the brand s first major perfume item, later known throughout Brazil and part of the portfolio until today Boticário completes 33 years of existence and creates the Boticário Group, aiming at becoming a reference in the beauty market by means of multi-businesses. The Boticário Group opens a distribution center in Registro (SP) The brand opens a store in the Afonso Pena International Airport in São José dos Pinhais (PR), Greater Curitiba, which contributed to O Boticário becoming nationally known Eudora is launched, the first business unit to be created after the formation of the Boticário Group. The group announces the expansion of its infrastructure to Bahia The first franchise is opened in Brasilia (DF). The Boticário Group adopts the beauty is what we do communication strategy. O Boticário crosses borders and opens its first store outside Brazil, in Portugal The Group s sustainability strategy is defined, with priority foci up until The Group launches two new business units: quem disse, berenice? and The Beauty Box. The new Research and Development Center building is inaugurated in São José dos Pinhais (PR) The Boticário Group Foundation for the Protection of Nature is born. The São José dos Pinhais (PR) industrial complex is expanded with the new makeup factory The works in Bahia continue. Operations are scheduled to start in Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

6 10 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report STRUCTURE 31% AMONG WHITE, BROWN, YELLOW, BLACK AND INDIGENOUS PEOPLE AVERAGE AGE 33 YEARS OLD 182 WOMEN IN LEADERSHIP POSITIONS 69% BOTICÁRIO GROUP FOUNDATION FOR THE PROTECTION OF NATURE The Boticário Group Foundation for the Protection of Nature, the main expression of our Group s social investment, was created in 1990 to contribute to the conservation of nature in Brazil. The institution maintains two nature reserves, protecting over 11,000 hectares of the two most threatened biomes in Brazil s Atlantic Rainforest (Salto Morato Nature Reserve in Guaraqueçaba, on the coast of Paraná) and Cerrado (Serra do Tombador Nature Reserve, in Cavalcante, in the interior of Goiás). Its actions also include the support of projects implemented by other organizations, investments in innovative conservation strategies, such as payment for environmental services and the dissemination of knowledge. RELATIONSHIP CHANNELS: Site: Facebook: Twitter: BEAUTY MADE BY PEOPLE We are a company that also values diversity in its organizational structure. Our collaborative network consists of people of different genders, ethnicities, cultures, educational levels, physical and intellectual conditions as well as age groups. All of us together, guided by the same values, shape our culture and identity, defining our way of being. The internal public of the Boticário Group consists of women (4,305) and men (1,925) among white, brown, yellow, black and indigenous people. The average age is 33 years old. In leadership positions, we present a balance between men and women, ensuring that opportunities are equally distributed by means of Performance Evaluation processes. Today, 100% of our collaborators are benefited by the collective labor agreements in each city where we are present with operational and / or administrative structures, as well as by participation in our Profit Sharing Program (PSP). Learn more about the Boticário Group online Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

7 12 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report quem disse, berenice? O Boticário For O Boticário, beauty transforms, charms, conquers and is conquered. The brand offers complete solutions in cosmetics, makeup, perfumery and accessories. It is the largest franchise network in Brazil and the world s largest in perfumery and cosmetics. It closed the year of 2013 with 3,690 stores in Brazil. And it is also present in six other countries. Since 1977, O Boticário offers inspiration, boldness, innovation and quality, winning over the market s respect, our partners confidence and the admiration of consumers. Launched in 2012, with the intention of breaking the rules in the world of makeup, quem disse, berenice? created a new way of engaging with consumers so that they feel free when buying and using makeup. This Boticário Group business unit offers more than 500 Items for skin, eye and mouth care, as well as nail polishes, perfumes and accessories in a large variety of colors, textures and fragrances. The business unit closed the year of 2013 with more than 100 stores throughout Brazil, in addition to a virtual store that caters to the entire country. RELATIONSHIP CHANNELS: Site: Facebook: Customer Relationship Center (CCR): Franchisee Relationship Center (CFR): (41) and/or # Franchise Network Extranet: RELATIONSHIP CHANNELS: Site: Facebook: Contact our customer service: or oie@quemdisseberenice.com.br Eudora The Boticário Group s second business unit, Eudora is the cosmetics brand designed for women who unite beauty and attitude, and who have the power for both small and large conquests. The products colors, textures and fragrances bring even more sensuality to the feminine, yet strong, woman of today. The brand combines quality, technology and sophistication with accessible prices. A brand designed for powerful women must be present everywhere. To accomplish this, Eudora is marketed using a multichannel sales strategy, focusing on direct sales as well proprietary stores and e-commerce. The brand has products that potentialize a woman s every intention: Power to Devastate and look stunning; Power to Dare and leave her mark; Power to Amaze and never go unnoticed; Power to Seduce and attract more looks and desires. The Beauty Box The Beauty Box, the Boticário Group s newest business unit, has brought a more intimate atmosphere to the world of multibrand stores. The store offers clients a new universe of possibilities. Over 100 national and international brands in 11 different categories, in addition to its own brand: Produtinhos da Beauty (Little Beauty Products). Men also have a guaranteed space at the Beauty Box with shaving, skin care and hair care products and perfumes. Today, the network has its online store, which is also available in a mobile version and is present in the city of São Paulo, in the interior of the state and in Belo Horizonte and Curitiba. RELATIONSHIP CHANNELS: Site: Facebook: Talk to Eudora: or falecomeudora@eudora.com.br Representatives: representante.eudora.com.br RELATIONSHIP CHANNELS:: Site: Facebook: Instagram: instagram.com/instadabeauty Fale to The Beauty Box: Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

8 14 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report ESSENCE OF THE BEAUTY WE MAKE SUSTAINABILITY AT THE BOTICÁRIO GROUP For us, beauty translates the essence of sustainability. After all, this is the concept that summarizes the balance between economic growth and respect for society and the environment. This is the attitude that guides our work at the Boticário Group, designed, developed and managed for this end. It is our way of looking at the world. It is what allows us to gradually transform reality, always for the better. And it is why we believe that sustainability can indeed be a business strategy. But it can also be - and why not? - our strategy to inspire stakeholders to adopt a style of life that is more responsible to themselves, others and the environment. And, in believing that the beauty of the future depends on how we face and deal with it in the present, sustainability permeates everything we do. For this reason, it is inserted in the essence of our business. It is these initiatives and the results that they provide that lead us to contribute to the construction of a more beautiful world. It is they that also encourage collaborators, suppliers, franchisees, customers and our entire network of relationships to tread this path with us. In this Sustainability Report, we present the actions taken and the results achieved in We share our experience in this matter with even better days in mind. It is with this motivation that we have invested resources, time and dedication to find the best and most beautiful way to do it. We want our ideals of sustainability to be perceived - and lived - across our entire value chain Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

9 16 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report INSERTING 3 SUSTAINABILITY IN THE BOTICÁRIO GROUP PROCESSES It begins with the idea of a product that valorizes beauty. It continues with the selection of the raw materials, the definition of the packaging, testing, the first batches, distribution, marketing and final disposal. All stages of our products life cycles follow sustainability guidelines so that, from start to finish, we can make the world a more beautiful place. Learn more in the following graph: STAGES OF A PRODUCT S LIFE CYCLE PROCUREMENT OF RAW MATERIALS AND INPUTS CREATION, RESEARCH AND PRODUCT DEVELOPMENT Our Biological Studies and Alternative Methods Group (NEBMA), which is part of our Research and Development Center, dedicates itself full time to study and identify the best techniques that help to ensure the development of new products. This center of expertise also certifies the safety and efficacy of the items following international standards and ethical standards. 1 The first step is to select the raw materials that will make a difference in producing quality products. We inspect the origin and method of extraction of these raw materials to make sure that the process meets the expectations of sustainable development for suppliers, for us and for our consumers. PRODUCT MANUFACTURING MANUFACTURING OF RAW MATERIALS AND PACKAGING MATERIALS (SUPPLIERS) 2By studying the best raw materials for our products, we seek ways to reduce waste, or eliminate it, in all stages, from extraction to final disposal. This leads us to strengthen our relationships with strategic partners such as suppliers, transport companies and franchisees. The items that are already on the shelves are also revised to become even more sustainable. The most recent example of this packaging update is the eau de parfum Lily Essence, which you will learn more about in this Report. During the last years, we have increased our production capacity with the expansion of our facilities in São José dos Pinhais (PR). The inauguration of a factory in Camaçari (BA) is also scheduled for These projects were designed following our commitment to sustainability. This means that, starting from the initial construction works up to the factory s full-scale operation, all steps comply with the principles of optimization of resources such as water and electricity, and follow the recommendations of the Leadership in Energy and Environmental Design (LEED) Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

10 18 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report O Boticário COMMERCIALIZATION quem disse, berenice? Our sales channels materialize the beauty of sustainability. The points of sale follow standardized layouts, including LED lighting, certified wood and MDF furniture. In the case of demobilization, franchisees receive guidance on the disposal of materials, either by donation or waste management. For representatives, the sustainability approach has a strong socioeconomic bias, providing a perennial source of income. APPROXIMATELY PRODUCTS O Boticário quem disse, berenice? The Beauty Box (own brand) Eudora FRANCHISES FRANCHISEES FRANCHISES FRANCHISEES PACKAGING DISPOSAL 8 We follow the guidelines of the National Policy on Solid Waste even before it became mandatory in our market and encourage the return of packaging of our products to the production chain. O Boticário stores are pioneers in packaging return programs and the volume deposited at the collection points is forwarded to cooperatives throughout the country. DISTRIBUTION 5Our partnership with transportation companies committed to sustainability ensures a process of reverse logistics recognized by the market. These suppliers receive on-going training and are evaluated by their actions and conduct. Currently, 60% of them are signatories to the On the Right Track Pact, created to inhibit practices of sexual exploitation of children and adolescents on highways. 7 CONSUMER USE Upon purchasing one of our products, the consumer does his part to make the world a more beautiful place. And the beauty in question is not only in the makeup, perfumery or in personal care items. It is in the form of valuing people and relationships; it is in the way we transform everyday attitudes with unpretentious beauty. For all types of consumers and for all forms of beauty, we offer products whose life cycle is an example of our commitment to sustainability. 9 RECYCLING Our approach to recycling goes beyond the collection of post-consumption packaging. In addition to the Packaging Recycling Program, we support, since 2004, the Lend a Hand to the Future program, for the training and financial encouragement of associations and cooperatives of trash pickers, developed by ABIHPEC, and we also promoted, in April 2014, the first packaging reverse logistics credit negotiation in the country, in partnership with BVRio Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

11 20 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report AN EVEN MORE BEAUTIFUL TOMORROW In the personal hygiene, perfumery and cosmetics market, the maturing of customers in relation to sustainability is already perceivable. Today, the consumer continues to demand - always more - that the product have quality and deliver the expected result. Nevertheless, the consumer also shows to be more attentive, conscious and responsible for his/her purchases by observing the form of conception and seeking post-consumption disposal options with less impact on the environment. This new behavior has encouraged us to further improve our day-to-day processes, leading us to increasingly intensify, our performance in sustainability. For this reason, after the review of our sustainability strategy in 2012, we began to focus the greater part of our efforts on the topics Raw Materials and Packaging (life cycle and reverse logistics); Eco-efficiency; Sales Channel (points of sale and resellers), in addition to the multiplication of the strategy in these three fronts to all our stakeholders. We arrived at these topics after studying the future challenges that are directly related to our business and upon which we can act and contribute to achieve the best possible results. In addition, we listened to our stakeholders to know what their expectations are in relation to sustainability at the Boticário Group (see more in the Chapter Shared Responsibility on page 50). Concurrently, we met with the group s senior leadership to discuss what the key issues are for us to increase opportunities and lessen the risks in the management of our business. After analysing the two points of view (internal and external), we elected the topics that are part of our materiality and that, for this reason, were thereafter included in our annual Sustainability Report. This way of implementing sustainability foresees actions and concrete results until And we have taken the necessary measures to adopt it as part of our business management process. Thus, the defined strategy allows us to take a leading role in this changing scenario. BOARD OF DIRECTORS Provides directives and assesses the impact of the strategy s implementation RAW MATERIALS AND PACKAGING GOVERNANCE FOR SUSTAINABILITY PRIORITIES AND GUIDELINES EXECUTIVE BOARD Approves the goals of the strategic pillars / focuses Validates the short and long term action plan of the planning cycles Directs the strategic decisions LONG TERM PLANS CONSTRUCTION AND EXECUTION SUSTAINABILITY MANAGEMENT Proposes and implements strategies, initiatives and goals for the Group and business units Coordinates and reports on the progress of the plans Provides support and knowledge, ensures alignment with the defined positioning and strategy Encourages greater participation by other areas SALES CHANNEL ECOEFFICIENCY POSITIONING OF SUSTAINABILITY Stimulated by the Group s values and guided by profitability, we will constantly and increasingly implement the measures required to improve our social and environmental impacts in our businesses, in their respective value chains and in society Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

12 22 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report SUPPORT AND COMMITMENTS We are inserted in a collaborative context and believe that mobilization in favor of sustainability initiatives strengthens our vision of the future. And, with other companies and organizations, we achieve greater results, availing ourselves of the best experiences in the market. Currently, we are partners in the following initiatives: GLOBAL CAUSES Voluntary commitments declared in the Global Pact United Nations Millennium Development Goals SOCIAL AND ENVIRONMENTAL ISSUES The Copenhagen Communiqué The Prince of Wales s Corporate Leaders Group on Climate Change Climate Observatory PLANNING For the implementation and development of this strategy, several multidisciplinary teams met in The work was conducted by experts in the field of Sustainability, with the objective of identifying possible areas of action in each of the defined fronts, focusing on structured initiatives, with implementation planned up until From then on, the various areas have been executing this plan, seeking to achieve the expected results. All this, of course, with the full support of the group s senior management. The systemic view of this business model allows the concept of sustainability as a business strategy to take form and gain ground in all parts of the organization, influencing processes and the relationships with stakeholders. Before initiating any project to expand our business or infrastructure, we apply the principle of precaution. We identify, in advance, all possible risks that may somehow influence the ecosystem. We assess the existence of any environmental liabilities of our properties and analyze the potential impact of the activities to be undertaken at the site. In cases where an environmental risk is confirmed, we define an action plan in accordance with the Environmental Management Systems (ISO 14001). A few of our initiatives in this sense are detailed in the chapter Eco efficiency of this Sustainability Report (page 42). Child Friendly Company Program - Abrinq Business Pact to Combat Sexual Exploitation of Children and Adolescents - On the Right Track Principle of Respect for Diversity and Eradication of Child Labor - Ethos Institute Give a Hand for the Future Program - ABIHPEC Brazilian Corporate Network for Lifecycle Assessment Companies for the Climate - Fundação Getúlio Vargas Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

13 24 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report PERCEPTION OF OUR BEAUTY To inspire and leave a legacy for society, our starting point must take into account the perception that collaborators, partners, communities and sectorial agencies, among other audiences, have about the sustainability work we have already performed. Only then is it possible to benchmark our effectiveness and identify opportunities for improvements. With this in mind, in 2013 we heard over 990 people divided into 11 different groups of stakeholders. The research was carried out in partnership with Market Analysis and considered the assessment of these stakeholders in relation to our performance in the area of sustainability. 79,2% IN 2012 The most important themes for the activities of the Boticário Group, according to respondents, are related to the practices in Product Life Cycle and Eco-Efficiency These themes were considered important by eight out of the total 11 groups. 83,8% IN 2013 of respondents recognize sustainability in the management of the Boticário Group 93% of the consultants in the O Boticário store network (one of the Boticário Group business units) state that they share information on the Group s sustainability with consumers, which shows that the team has interest in the subject and wants to share it with the client. The recognition of our activities in sustainability, evidenced by national awards, is also a confirmation that we are on the right track. In 2013, we appeared in various lists and award nominations that evaluate companies under the criteria of sustainability, such as the prominent position achieved among consumer goods companies in the Exame Sustainability Guide. Below are a few of the recognitions we have received: Malu Nunes, Boticario Group Sustainability manager, received the title of Sustainable Leader granted by the 2013 Sustainability Highlight Award, sponsored by the Brazilian Franchising Association (ABF) and the Sustainable Franchise Association (AFRAS). The O Boticario business unit, in turn, was one of the finalists in the Master Franchisor category, with the case Sustainability Management in the Franchise Network. Two Boticario Group suppliers were also awarded in their categories: Posigraf (1st place, with the case Posigraf Environmental Management System ) and Patrus (2nd place, with the case Transporting Solidarity ). The Boticário Group was ranked among the 10 Best Sustainable Companies, according to the 2013 Corporate Sustainability Monitor study, conducted by Market Analysis. This was the first time that the organization appeared in the ranking, prepared after consulting with 800 respondents who were selected according to criteria that ensure representivity of the country s urban population. Participants were asked to name two examples when asked to inform the name a large company that you remember or that you think is an organization that fulfils its social and environmental responsibilities better than others, i.e., a sustainable company. The O Boticário business unit was the second most mentioned brand in the 2014 Carioca Brands ranking, in the category Companies that Respect the Environment. The ranking is published by the O Globo newspaper, based on a consumer survey in the State of Rio de Janeiro. The Boticário Group was the winner of the 2013 Estadão HR Top of Mind Award in the category Companies with Best Practices in Corporate Social Responsibility. The award seeks, through spontaneous brand awareness, to recognize companies and professionals who have successfully implemented their strategies for sustainability Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

14 26 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report BEAUTY FROM START TO FINISH RAW MATERIALS AND PACKAGING When we talk about sustainability, we face a universe of possibilities. Among them is to find alternatives to reduce the social and environmental impacts throughout the life-cycle of our products. We understand that the ideal model is not just the one that meets the consumer s expectations and contributes to the effectiveness of the product. It is also the one that generates less impact on the environment in the extraction process of raw materials, in the development and consumption of the product, as well as in the disposal of packaging. Furthermore, it is the one that respects the basic social principles, such as compliance with the labor norms and legislation as well as with occupational safety and health regulations. With this in mind, we strive to find ways to offer, more and more, products with these premises to our customers and consumers. The Boticário Group seeks to innovate in its research and development processes and, consequently, in its test evaluation methods to corroborate the safety and efficacy of its products. This positioning is reinforced by the Product Evaluation and Regulatory Affairs area, which is engaged in the research and evaluation of items such as proof of efficacy and safety, analytical development, sensory evaluation, development and use of alternative methods, use of molecular and cellular biology methodologies, as well as product registration. Therefore, always attentive to the discussions and international scenario, the Boticário Group does not conduct animal testing in its processes, from raw materials to finished products. This means that the corroboration of safety and efficacy of its items is made using an internationally accepted process that employs raw material data provided by suppliers, in vitro and clinical research studies with volunteers (clinical trials with humans) within the current ethical, quality and legal standards. These studies are applied according to the characteristics of each product, its intended use and target audience. In 2013, no complaints considered serious in regards to commercialized products were registered and therefore there was no need for recalling products and / or safety alerts. For the introduction process of raw materials conducted by the Boticário Group, information on the performance of tests are required, including year and methodology, to identify and encourage the adoption of alternative methods in the production chain. Thus, the Boticário Group encourages the use, research and development of alternative methods and the supply of non-animal testing products by its suppliers. Since 2008, specialists are focused on the search for alternative in vitro tests in the Biological Studies and Alternative Methods Group (NEBMA) of our organization. In addition to the efficacy and safety of the chemical components used as raw materials, the team also researches issues related to the development of innovative methods and platforms in the areas of cell and molecular biology for the understanding and application of various cosmetic products. With state-ofthe-art technology and various academic partnerships - Brazilian and foreign - this group performs its work in order to ensure that the consumer receives the promised result. From the beginning of its activities to date, the laboratory has registered five new patents and three scientific publications in the sector in which we operate Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

15 28 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report DISCOVERING NEW WAYS TO MAKE BEAUTY Since 2007, we follow and measure the impacts of packaging, from the procurement of raw materials to the disposal of waste, using the Life Cycle Assessment (LCA) tool. One of the most recent examples of the results of using this tool is the repacking of the Lily Essence eau de parfum, a product sold by the O Boticario business unit, developed in 2013 and scheduled for availability to the consumer in the following year. In addition to maintaining the characteristic luxury and sophistication of the product, the items involved in the redesign of its packaging took sustainability into account. The packaging shape and components were modified, generating a 21% reduction in the amount of material used and a 51% reduction in environmental impact compared to the previous packaging, commercialized since the product launch in An internal, multidisciplinary team researched the behavior of the fragrance s consumers and devised a new design that facilitates handling. The components were reduced from eight to six and the threaded valve was removed, leaving only the sprayer, which, in addition to being visually attractive, uses an on / off system that prevent leaks. To reduce the amount of paper, the Lily explanatory information, which was previously provided to the consumer on an insert, now appear printed on the packaging cartridge. The new packaging design also eliminated special finishing that hindered or prevented recycling. The result is a product with a significantly reduced environmental impact. REDUCTION 21% 51% LESS QUANTITY OF MATERIAL USED LESS ENVIRONMENTAL IMPACT COMPARED TO PACKAGING ON SALE SINCE 2006 ALTERNATIVE PACKAGING The supply of refills is also one of the measures that contribute to reducing the environmental impact related to packaging. This alternative is available for makeup items skin care products and deodorants sold by the O Boticário and Eudora business units. Refills launched in 2013 contributed to an average reduction in environmental impact of 66% in comparison with the regular packaging, also allowing significant savings for the consumer (price is 29% lower). In the case of quem disse, berenice? products, certain items such as mirrors and makeup applicators were removed from their cases / kits and can now be purchased separately at the stores. In addition to reducing the number of components and the product costs, this initiative helps to develop a new consumer behavior, because now she can use the same mirror and applicator with different items of the store s Portfolio Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

16 30 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report SKIN IN 3D Recent studies and tests have been developed and used to evaluate products. One of the results obtained by NEBMA was the in vitro reconstitution of human skin using skin cells and a collagen matrix. Using the tissue grown in the laboratory, it is possible to study how the different products, from anti-aging treatments to makeup act on human skin, and to evaluate possible skin irritations. This methodology is already used by companies in other countries, but in Brazil, NEBMA is one of the forerunners of this application and one of the few to use the technique. The internalization of research studies of this size optimizes resources by reducing the need to rely on third parties to conduct studies, particularly those required by law. Internalization of methods for the research of eye irritation Boticario Group researchers use scientific parameters to evaluate toxicity and certify product safety prior to clinical trials, without the need to outsource this responsibility. Alternative methods that guarantee product safety before clinical trials High-tech equipment allows a preliminary assessment of raw materials and finished products aiming to corroborate their safety, reduce risks and increase their effectiveness in subsequent clinical trials with humans. SUSTAINABLE CHOICES Certainly, we would not be able to propose a more sustainable lifecycle for our products if we did not receive the contributions of our suppliers and other partners. By means of shared responsibility, everybody wins: the Boticário Group, the companies that supply our raw materials, the consumer and society (learn more about our actions in the chapter Shared Responsibility on page 50). In 2013, we joined the Brazilian Corporate Network for Lifecycle Assessment. Officially launched in October 30 of the same year, the Network aims to establish actions for the promotion and popularization of the Lifecycle Assessment practice as a determinant in the social and environmental assessment of products and services in the Brazilian market, mobilizing businesses, educating consumers and encouraging the development of public policies. ADEQUATE DESTINATION Within the context of sustainability, reverse logistics deserves special attention. Prior to Law /2010 establishing the National Solid Waste Policy, we were already encouraging the return of our products packaging to the production chain. We also support the Lend a Hand for the Future Program, an initiative created in 2006 by the Brazilian Association of Toiletry, Perfume & Cosmetics Industries (ABIHPEC) to capacitate trash scavengers from cooperatives and offer options for the adequate management of solid waste. Our pioneering work in reverse logistics is embodied, in practice, by the Packaging Recycling Program, currently implemented in the O Boticario stores. The program includes the participation of consumers, with the return of our products empty (post-consumption) packaging. The packages are collected and forwarded to scavenger cooperatives and / or waste management companies that sort and forward the waste for recycling, so that it may be inserted into new production cycles. Currently, the initiative serves as a platform for the expansion of the program to other Boticário Group sales channels and business units. For the execution of this program, we rely on the partnership with our transportation companies, responsible for the distribution of our products in the sale channels of our business units throughout the country which, in turn contribute to raise awareness of the importance that reverse logistics has in relation to the environment and society Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

17 32 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report RELATIONSHIP WITH GROUPS OF INTEREST ACADEMIC INSTITUTIONS Partnerships for the research of methodologies and solutions to fill the gaps that still persist in the analysis of product life cycles, and for the development of alternatives to the challenges imposed by reverse logistics processes. SECTORIAL ASSOCIATIONS Joint solutions in product life cycles for the cosmetics, perfumery and toiletry industry, and strengthening of reverse logistics processes in the value chain. ANOTHER BEAUTIFUL INITIATIVE With the support of the Boticário Group, a new model designed to stimulate recycling is taking shape in Brazil. We are partners of the Rio de Janeiro Bolsa Verde (Rio BV), a nation-wide institution born in 2012 to create and operate environmental asset markets as a means of promoting the green economy in Brazil. The BV Rio negotiates solid waste credits in the market and intermediates transactions between cooperatives and the business sector. It is an alternative that companies have to encourage the use of recyclable materials, purchasing from associated cooperatives The credits equivalent to paper, glass, plastic and metal used in the production of consumer goods. The institution includes 80 scavenger cooperatives, present in 20 states. Thus, it contributes for this audience to acquire knowledge in finances, management and the environment, therefore making the market more professional and safer for all those involved. As of 2014, when the cooperatives start offering recycled material to the market using the BV Rio platform, the cooperatives will receive credits relative to the recovery of the material. CONSUMERS Development of products that meet their needs with improved environmental, social and economic performance. Designing strategies to make them aware of their role in the return of post-consumption packaging for recycling. FRANCHISEES Commitment to the exchange of expertise, engagement and awareness in relation to the relevance of sustainability. Create logistics for them to become facilitators in stimulating the return, by their clients, of post consumption packaging RAW MATERIALS AND PACKAGING COMMERCIAL REPRESENTATIVES Commitment to the exchange of expertise, engagement and awareness in relation to the relevance of sustainability. Partnership in communication with the end consumer. SUPPLIERS Long term activities as agents of best practices in the supply chain, in the supply of technologies and solutions. COLLABORATORS Creation and development of products with improved environmental, social and economic performance during their life cycle, in partnership with suppliers. NGOs Partnerships to enable solutions for the recycling chain and reverse logistics processes Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

18 34 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report SALES CHANNELS FROM ENTREPRENEURSHIP TO AFFORDABLE The points of sale (POS) - stores, kiosks and service centers - and the direct sales representatives of our business units are the showcase of our positioning in terms of sustainability before the general public. It is through these sales channels that we materialize our practices for a future with harmonious results for the environment and society, generating awareness and value for the stakeholders with whom we interact. To ensure the inclusion of sustainability in all POS processes, we work starting from design and space management stage up to their demobilization. We target our efforts to incorporate items related to the theme into the layout and towards the technical standardization of the POS, seeking new solutions, technologies and best practices with the support of our suppliers. We also provide guidance to franchisees for proper management of the waste generated in the updating process of stores and even for the closing of the POS (in case of end of business activities) in order to ensure proper disposal. ATTENTION TO DETAIL Learn more about some of the sustainability practices we adopt in the POS: The O Boticário, quem disse, berenice? and The Beauty Box business unit stores feature LED technology (Light Emitting Diode) for the lighting of store facades. It offers high-energy efficiency and longer lamp life, reducing the need for maintenance. The savings generated by the use of this technology on the store facades totals 80% compared to the use of regular light bulbs. Considering the total number of stores, the absolute savings is approximately 2,500,000 kw per year, which is equivalent to the energy consumption of 1,300 households*. * Source: average household consumption in Brazil, published by the Energy Research Company (EPE). EQUIVALENT TO THE CONSUMPTION OF HOUSEHOLDS ABSOLUTE SAVINGS kw PER YEAR SAVINGS COMPARED TO 80% REGULAR LAMPS Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

19 36 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report The Quem disse, berenice? stores were also designed to operate with LED lighting in their internal structure. We opted for the use of 9W LED lamps, which are 10 times more durable than the lamps traditionally used in the main lighting of stores. They also contribute to a reduction in the use of air conditioners, since they produce less heat. The mirrors, in turn, are backlit by 15W fluorescent tubes, capable of reproducing the same degree of lighting as a regular 75W light bulb. 9W LED LAMPS LAST 10x To ensure the energy efficiency of the equipment, stores prioritize the use of certified electroelectronics (Procel). MORE THAN REGULAR LAMPS MIRRORS BACKLIT BY 15W FLUORESCENT LIGHTS The exclusive Nativa SPA (O Boticário) stores also use LED technology for internal lighting (in the plaster ceiling lining) and in the form of LED strips on the furniture. This ensures reduction of heat emission close to the products, quality in decorative lighting and lower power consumption. As from 2014, the design of the facade for stores will be adapted for use of LED technology. The current model of the O Boticário stores is being adapted for the use of LED lamps. In addition, the brand recently launched a new store concept, which introduces an innovative proposal in terms of sensory experience and product experimentation. This new model, which will be implemented gradually, also contemplates the use of LED technology in the design of internal and facade lighting. The pieces produced by suppliers of the O Boticário, Nativa SPA, quem disse, berenice?, The Beauty Box and Eudora store furniture are made of FSC approved materials. The furniture is mostly made of MDF (Medium Density Fiber) produced from reforestation or renewable sources. The Eudora service centers use fluorescent lamps, which also feature low power consumption and high durability. Targeting the thermal comfort of customers and collaborators, air quality and the reduction of energy consumption in the POS, we structured sustainability guidelines for the efficiency of the refrigeration systems. We defined sustainability criteria for the selection of the materials that comprise the stores. Examples are the use of pre and post-consumption recyclable products in the materials, environmental certifications, level of volatile organic compounds in the composition of paints, adhesives, sealants, varnishes and others, the level of urea formaldehyde in wood components such as MDF, chipboard and veneered panels. Thus, we guarantee the internal air quality of our stores and reduce the environmental impact of the material disposal process. To ensure the responsible disposal of materials resulting from the the demobilization of POSs - encouraging recycling and reuse with the donation of materials in good condition - we have developed directives to guide the adequate disposal of waste (furniture, displays, lamps, etc..) and we seek to raise awareness and engage the franchisees in matters of sustainability. A d N T p F n Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

20 38 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report O BOTICÁRIO HOLOGRAPHIC BAGS Another example of our sustainable activities in the POS is the holographic O Boticário bags used during the 2012 Christmas sales period. The bags were developed in partnership with the Antilhas, a packaging solutions company. The project included requisites of sustainability such as the application of a holographic varnish, which eliminates lamination during the production process, resulting in the same shiny effect as the conventional holographic process. The success of the project generated a trend for the extended use of this type of bag for other limited brand editions. A FEW RESULTS: OF 100t REDUCTION IN RAW MATERIAL 12% REDUCTION IN VOC EMISSIONS 100% FSC CERTIFIED PAPER Holographic effect obtained using the rotary process to apply a UV varnish instead of conventional lamination. This process allows reuse of the holographic film up to 20 times. We saved approximately 100t (data from the 2012 Christmas campaign, computed in 2013) of raw materials including holographic films and adhesives. This reduction refers to a 10.3% reduction in production materials, resulting in a 12% reduction in the emissions of VOC (Volatile Organic Compound). This result comes from the reduction in weight that positively impacts the transportation of packaging material. Without the laminated film, the packaging is easily recycled since it becomes 100% made of paper. All paper used in the bag is FSC certified. Water-based inks were used in the production of the bags. The O Boticário holographic bag case won the WorldStar Award granted by the World Packaging Organization (WPO), considered one of the most important in the packaging sector. The project also won the silver trophy in the 2013 ABRE Award for Brazilian Packaging in the category Technology in Cosmetic, Personal Care, Health and Pharmaceutical Packaging. The award evaluates the innovation / technological distinction of the packaging, quality of raw materials, safety, strength, graphic quality / innovation, sustainability, among others. SHARING PRACTICES AND ENGAGING THE INTERFACE AUDIENCES To strengthen the partnership with the Boticario Group suppliers in the search for best practices and solutions in sustainability in the design of the stores, we promoted the Sustainability Program for Suppliers (see more in the chapter Shared Responsibility on page 50). Our concept of sustainability also gains an additional voice with our franchisees and in-store consultants. Aware of our practices and market and beauty insights, they propagate sustainability to consumers and to ensure the effectiveness of our message, we constantly invest in training and communication with this audience (read more in the chapter Shared Responsibility). In 2013, an abridged version of the Sustainability Report was delivered to the consumers of our business units through our sales channels in order to share with this audience the concept of sustainability that gives color to our actions for a more beautiful world Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

21 40 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report BEAUTY KNOCKS AT THE DOOR When we launched the Eudora brand, in 2011, we inaugurated not only a new company with an innovative positioning in the Brazilian market, but we also introduced a new way of relating to Brazilian consumers. This is because we established, by means of the new consumer brand, a multichannel model that includes ecommerce, stores and direct sales, the latter being the main channel for sales and brand disclosure, by means of the Eudora representatives. To establish strategies that capitalize the entrepreneurial potential of our representatives in Brazil, we seek information inside and outside the company. Internally, we diagnose and segment the Eudora sales representatives with greater entrepreneurial potential and externally, we went to the field to learn more about the Brazilian entrepreneur. Within this context, in 2013, we received the results of research study on entrepreneurship conducted the previous year by the Brazilian Institute for Quality and Productivity (IBPQ). We were partners in this survey, which interviewed 10,000 people across the country, with the inclusion of questions focused on the entrepreneur s profile in the direct sales market in the Brazilian cosmetics industry. It is important to mention that, following the trend of direct sales initiated with Eudora, in 2013 we also structured this channel, in the O Boticário business unit of so as to complement the operations already established by the franchisees in the stores. The insertion of the direct sales channel by the Boticario Group expands our growth potential in the domestic market and the sales teams involved are able to grow with us. At the same time, we analyze the external factors that can possibly influence sales productivity and, with this view, we seek to mitigate the risks. The Boticário Group believes that the activity of a representative offers opportunities for the development of an entrepreneurial profile. Therefore, our organization offers this audience projects and initiatives devised to leverage the business, based on our experience in the beauty market. We are dedicated to making representatives aware of the vast horizon of potential opportunities and prosperity that this type of activity offers. CONSUMERS SUPPLIERS They can enable technologies, materials and methods aligned to sustainability, multiplying them in the market. They may also adopt sustainable practices shared by the group, replicating the benefits. Inform this audience of the company s posture in terms of sustainability and motivate it to adopt good practices as well, transforming its behavior and preparing it to be an active agent for positive change in society. RELATIONSHIP WITH GROUPS OF INTEREST CLASS ASSOCIATIONS SALES CHANNELS COLLABORATORS Collaborators in areas related to Sales Channels and Training are key actors in the qualification of franchisees and sales representatives and in the development of structuring actions at the points of sale, which reflect the Group s positioning in terms of sustainability, the market and society. The strengthening of debates can boost the number of proposed solutions, increasing the scale, scope and visibility of best practices encouraged by the Group in the market. FRANCHISEES AND SALES TEAMS Their interaction with customers enables them to express the Group s position in terms of sustainability and to promote this audience s engagement. The Group aims to create conditions to increase the exposure of sustainability messages at the points of sale and during client service. REPRESENTANTES COMERCIAIS Their interaction with customers enables them to express the Group s position in terms of sustainability and to promote this audience s engagement. The group can contribute to the development of the category in the field of professional entrepreneurship Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

22 42 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report ECOEFFICIENCY LESS WASTE, MORE BEAUTY The development of increasingly intelligent production processes, enabling the growth of the organization, but always with the conscious use of natural resources in operations and across the value chain is one of the ways that the Boticario Group contributes to the reduction of impacts to the environment. And because we believe in the relevance of the results that Eco-efficiency can bring to our business operations, our company shares with its suppliers its best practices and also leads projects in partnerships, seeking mutual benefits. In addition to complying with all regulatory measures, we strive to identify new opportunities that improve the management of the indicators related to water, energy, waste and emissions. We have teams of skilled professionals in the area to lead these initiatives and we are attentive to the market to identify the best technologies as our allies. An example is the project for the modernization and expansion of the chillers, used to cool the water consumed in the company s manufacturing processes and also for air conditioning. In 2013, we replaced these plant equipment components in São José dos Pinhais (PR) for state of the art North American models and were able to reduce our energy consumption by 20% in comparison with This reduction corresponds to 216,000 kwh per year. The year of 2013 also marked the introduction of a new initiative aimed at sustainability: we expanded our reuse of water used in the cooling towers at the São José dos Pinhais factory (PR). By reusing the water treated by the industrial treatment station, we guarantee a reduction in the consumption of potable water of 448 cubic meters during the year. Currently, 30% of the water consumed in the four installed towers comes from our reuse system. In 2013, in Registro where our single distribution center (DC) was located, we adopted the practice of reusing rainwater. At the end of the year, 23% of total water used in the DC came from rainwater. In 2013, we replaced the factory chillers in São José dos Pinhais (PR) with new state of the art models, capable of reducing the 20% The São José dos Pinhais factory reuses the effluent by the industrial treatment station, ensuring the reduction of potable water consumption by 448m ³ per year 30% OF THE WATER CONSUMED COMES FROM OUR WATER REUSE SYSTEM The DC in Registro reuses rainwater, representing CONSUMPTION OF ELECTRICITY BY OF THE TOTAL WATER USED DURING THE 20%YEAR PIONEERISM In 2013, we reduced the emission of pollutant gases by 92% at the São José dos Pinhais (PR) plant, compared to Part of this reduction was achieved due to the installation of natural gas (NG) powered generators, replacing the diesel equipment used previously. According to the National Petroleum Agency (ANP), NG produces almost no emissions of particulate matter and sulfur compounds. Compared to the levels emitted by gasoline, diesel or ethanol motors, the reductions amount to 90%. Also according to the agency, NG is less carbon dioxide intensive when compared to diesel. We are the first company in Paraná to use NGpowered generators with three in operation in 2013, with the fourth scheduled for March Actions like these demonstrate our efforts to increasingly prioritize the use of energy sources with low environmental impact in our operations Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

23 44 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report CLIMATE OF TRANSFORMATION Since 2008, we have published an inventory reporting our emissions of greenhouse gases (GHGs). This is one of the ways we have found to communicate the effectiveness of our strategies to reduce GHG emissions in our operations. We are also co-founders of the Brazilian Green House Gas Protocol (GHG Protocol) program, an extension of the US initiative launched in 1998 to quantify and manage GHG emissions. The methodology was adapted to the Brazilian scenario and the Program organizes work groups for companies to adopt this tool. As part of the initiative to share best practices with suppliers, we conducted in 2013, together with the Fundação Getulio Vargas Cen- ter for Studies in Sustainability, a training program for our transportation companies on inventories of carbon emissions, according to the GHG Protocol methodology. We are also one of the founders of the Companies for the Climate (EPC Empresas Pelo Clima) Work Group, designed to create a platform for discussion between companies on opportunities to reduce emissions. In 2013, this group led discussions focused on the cap and trade system (which means limit and negotiation), used to establish limits on greenhouse gas emissions in different sectors of activity, with the objective of assisting the Brazilian government in the adoption of a similar system in the future. Redução das Emissões de Gases de Efeito Estufa provenientes de fontes fixas: PLANTA-SJP (FONTES FIXAS) REDUÇÃO DE 13% EM RELAÇÃO A 2012 E DE 20% EM RELAÇÃO A 2011 CD-REGISTRO (FONTES FIXAS) REDUÇÃO DE 15% EM RELAÇÃO A 2012 E DE 18% EM RELAÇÃO A : 3,64 tco2e/mm unidades produzidas 2012: 4,19 tco2e/mm unidades produzidas 2011: 4,56 tco2e/mm unidades produzidas 2013: 1,77 tco2e/mm unidades expedidas 2012: 2,09 tco2e/mm unidades expedidas 2011: 2,17 tco2e/mm unidades expedidas A redução na planta de São José dos Pinhais se deve à substituição dos combustíveis utilizados nas caldeiras, antes movidas a gás liquefeito de petróleo (GLP), e do gerador, então movido a diesel, para GN, além da modernização dos equipamentos. No CD de Registro, a diferença se dá pela redução da necessidade de operação do gerador em horários de pico de consumo, frente à melhor alimentação da concessionária de energia. GESTÃO DE RESÍDUOS Em nossa operação, reduzir os impactos relacionados aos resíduos sólidos é outra busca constante. Tratamento e reciclagem são práticas que fazem parte de nossa rotina e, com isso, registramos uma eficiência maior ano a ano. Nas atividades operacionais relacionadas à perfumaria, por exemplo, adotamos o processo de freepacking, que permite reutilizar de oito a dez vezes as caixas que transportam as embalagens. Além disso, em 2013 mantivemos em 95% a taxa global de reciclagem na planta de São José dos Pinhais, enquanto no CD de Registro ela foi de 99%. Esse percentual inclui reutilização, reciclagem e coprocessamento dos resíduos descartados RECYCLING RATE 96% t/mm (SAME AS 2012) 7,5 At the Registro DC, we maintaioned, in 2013, the rate of waste per units shipped (t / MM units shipped) equal to 2012, which totalled At the SJP plant, the total weight of waste per unit produced (t / MM units produced), in 2013, was 5.35% lower than : 34, : 36,09 units produced t/mm units produced t/mm units shipped Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

24 46 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report NATURAL LIGHT IN MAKEUP In operation since 2013, in São José dos Pinhais (PR), our new makeup plant had its physical structure designed so as to take maximum advantage of natural light. To accomplish this, we developed more efficient equipment specifications (fixtures, lamps and reactors) and redimensioned the lighting system to use less electricity. The use of natural light is performed by controls that reduce the consumption of energy by automatically adjusting the luminosity of the lightbulbs, depending on the amount of available natural light. The controls perform the reading of the level of natural light in the environment and reduce or increase the power of the lamps according to the programmed level of luminosity. SUSTAINABLE BEAUTY ALSO IN BAHIA The new factory which is under construction in Camaçari, Bahia, and the new, already in operation distribution center in São Gonçalo dos Campos, located in the same northeastern state, were designed considering sustainability attributes. In practice, this means that architectural, construction and operating systems that optimize the use of natural resources and enhance the quality of life of collaborators and the neighboring community were adopted. The works were implemented seeking to obtain Leadership in Energy and Environmental Design (LEED) certification. Here are some of the initiatives undertaken to achieve this: Benefit of chartered transportation and bike racks for local collaborators in order to reduce the use of individual vehicles and encourage the use of alternative transportation, thus reducing GHG emissions. Forwarding of the water used in showers and taps to the Wastewater Treatment Station (ETE) and subsequent reuse in toilets and urinals. Adoption of taps with aerators, allowing for a consumption of 10 liters of water / min, while regular taps consume 25 liters / minute. Water heating using solar panels in factory locker rooms. 5% of the factory and DC parking spaces are reserved for green vehicles (lower emissions). Another 5% are reserved for collaborators / drivers who adopt the practice of carpooling. Part of the materials used in the construction has recycled content in its composition and is necessarily acquired locally, or at a maximum distance of 800 km. Implementation of white roofs, with high reflectance rates, resulting in an up to 20% reduction of the internal temperature. This reduces the need or intensity of the air conditioning system, and consequently, the consumption of power. CHARTERED TRANSPORTATION IS OFFERED TO COLLABORATORS AS WELL BIKE RACKS FOR ALTERNATIVE TRANSPORTATION Locker rooms with water heated by solar panels Aerators on faucetsenable a reduction in consumption reduction of 10litros/min Factory and DC parking lots with 5% of the parking spaces reserved for green cars Buildings with white roofs, reducing the internal temperature by up to 20% Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

25 48 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report RELATIONSHIP WITH GROUPS OF INTEREST COLLABORATORS Collaborators play a fundamental role in the long term, by reducing the rates indicated in Life Cycle Analysis (LCA) of products, by adopting less natural resource intensive production processes and by generating less waste and emissions. ACADEMIC INSTITUTIONS AND RESEARCH Partnerships in research studies focused on methodologies and solutions to reduce the rates indicated in the LCA. Innovation of production processes and elimination of technology gaps. SUPPLIERS Suppliers should be made aware of the importance of the theme and take advantage of the opportunity to share the best practices of the Boticário Group. Moreover, by applying this learning in their processes, they multiply the benefits for the industry as a whole ECOEFFICIENCY REGULATORS Interaction with government agencies that manage natural resources is critical to ensure the economic viability of eco-efficiency initiatives. CLASS ASSOCIATIONS Discussions on Eco-efficiency in industry and class associations are an important tool for the wide-spread adoption of solutions, accelerating the adoption of best practices by all the parties involved. CONSTANT IMPROVEMENT Considering the possibilities to minimize environmental impacts and increase our operating results, we implemented a series of initiatives in 2013, and have reaped the first results, especially at the São José dos Pinhais plant: We installed electric power meters in order to measure consumption by sector, allowing us to identify bottlenecks and opportunities for reduction. We expanded the sectorization of water consumption meters, and adopted the same strategy at the lotions factory. IN THE ADMINISTRATIVE AREA, WE IDENTIFIED OPPORTUNITIES TO REDUCE CONSUMPTION BY UP TO 2.500M³/YEAR Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

26 50 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report TOGETHER, FOR A MORE BEAUTIFUL WORLD When talking about sustainability, there is no doubt that it is a systemic force that is only capable of transformation when it brings together various stakeholders: companies, governments, NGOs and civil society. And as a business group committed to beauty in its various forms of expression, we see ourselves as protagonists in this collective construction. Therefore, in addition to managing the environmental and social risks that may impact our business and acting consistently in the pursuit of a differentiated form of management that includes sustainability in the processes and decisions, we also direct our management to the value chain, extending our practices and engaging the different audiences with whom we relate. It is with this view that we operate in pursuit of partnerships capable of multiplying practices and transforming them into positive actions for the business, contributing to the development of all audiences and, of course, of the Boticário Group. SHARED RESPONSABILITY Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

27 52 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report SUPPLIERS When we talk about supplier management, our aim is to contribute to the development and dissemination of sustainable practices. This is achieved by optimizing processes and generating new and more sustainable business opportunities that provide differentiation and / or mitigate risks to our business and our partners. Thus, we consolidate our sustainability strategy with the participation of our supply chain (described in the previous chapters), and adopt procedures for the periodic review of each supplier s activities, considering their compliance with respect to items such as labor relations, rights of children and adolescents, promotion of diversity, health, safety, environment, among others. FOSTERING CONTINUOUS IMPROVEMENT In addition to monitoring the performance of our strategic suppliers, we also provide knowledge for their businesses to grow sustainably. Annually, we administer a self-assessment sustainability questionnaire to this public. With the results, the supplier and the Boticário Group can verify how the practices are working, generate action plans and thus implement improvements in management and processes. The self-assessment is also one of the tools used to recognize the best performing suppliers of the year, since it is part of the Direct Supplier Performance Assessment Process (DSPAP) and Indirect Supplier Performance Assessment Process (ISPAP). These processes consider criteria including commercial performance, logistics, quality, services (expertise, innovation, responsiveness and proactivity) and sustainability, being that the latter item represents 6% of the final grade. Based on the Boticario Group s procurement strategy and on the results of self-assessments, we conduct regular visits to suppliers focusing on improvements in the area of sustainability. In 2013, direct suppliers of the paper, plastic, glass and raw materials sectors, and service providers such as logistics operators, marketing agencies and transportation companies were visited. In some cases, even the working conditions in the suppliers production chains were verified. The migration of the verification of labor compliance items, which were previously treated by visits to suppliers focused on sustainability, and that became part of the scope of the audits of the Integrated Management System (IMS), conducted by the Technical Management of Suppliers area (GTF), exemplifies the importance given to sustainability in processes of the Boticário Group as a whole. This verification takes into account questions such as supplier quality, health and safety, among other topics. In 2013, 77 visits were made to suppliers, being 55 SGI audits and 22 visits focused specifically on sustainability. IN 2013 WERE HELD 77 VISITS TO SUPPLIERS SUSTAINABILITY MANAGEMENT GUIDE FOR SUPPLIERS The Sustainability Management Guide for Suppliers guides the actions of our partners, sharing our vision and strategy in terms of sustainability, in addition to management and conduct guidelines. Prepared in 2011, the document was reviewed in 2013 so as to, in addition to strengthening the already contemplated supplier legal requirements and responsibilities towards its supply chain, present the detailing of each of the strategic focuses of sustainability and a few practices that can be incorporated into their processes. In this guide, we announced our Ombudsman channel, through which providers can report any deviation from the Group s Code of Conduct Available for download at our website, the guide applies to suppliers and their respective business units or expansion projects, subsidiaries and subcontractors. In addition to this material, the Boticário Group relies on the E-news, an online newsletter where institutional information, sustainability topics and market trends in this area are shared with suppliers ON THE RIGHT TRACK To reinforce our commitment to responsible practices in our productive chain, we continue to support On the Right Track Pact, organized by Childhood Brazil and initiated in Through it, we focus on generating awareness against the practice of sexual exploitation of children and adolescents on Brazilian roadways. In 2013, we encouraged our transportation companies to sign the Pact and we sponsored workshops and training sessions for multipliers for all our strategic transportation companies. 60% OF OUR STRATEGIC TRANSPORTATION COMPANIES HAVE JOINED THE PACT to whom, we distributed BOOKLETS and monitored the actions designed to generate awareness among the drivers Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

28 54 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report COLLABORATORS FOR THE CONSTRUCTION OF THE FACTORY AND DC IN BAHIA, PREFERENCE WAS GIVEN TO SUPPLIERS WITHIN A RADIUS OF 800KM LOCATION OF OUR SUPPLIERS In relation to the purchases of direct materials and services for the Boticário Group, 68% are concentrated in São Paulo, 17% in Paraná, 2% in Bahia and 13% in other states. As to indirect materials and services, 48% of all purchases are concentrated in São Paulo, 28% in Paraná, 7% in Bahia and 17% in other states. 17% 28% PARANÁ MATERIAIS E SERVIÇOS DIRETOS INDIRECT MATERIALS AND SERVICES FACTORY OFFICES DISTRIBUTION CENTER 68% 48% SÃO PAULO 13% OTHER STATES 17% OTHER STATES 2% 7% BAHIA For sustainability to effectively be part of our processes and/or for it to multiply itself among our stakeholders, the participation of our collaborators is essential. For this, we conduct communication activities and training programs that prioritize this audience, so as to engage and prepare them to contribute to the challenges of the Boticário Group, both in and out of our business. Our more than 6,000 collaborators are informed of the Group s strategies and practices by means of our internal communication channels (magazine, murals, intranet, newsletter and blog) and also receive a version of the Boticário Group Sustainability Report. By means of these channels, and also by means of our daily practices, we encourage the adoption of sustainable and positive attitudes among our collaborative network, as well as foster the sharing of these attitudes in social networks, be they virtual or not. We have also developed a training program on sustainability in the supply chain aimed at collaborators in the areas of Research and Development, Packaging Development, Quality Assurance, Procurement, among others, who Interface with suppliers. To accomplish this training, we count on the support of the Fundação Getulio Vargas Center for Studies in Sustainability. The event contributed to broaden the awareness and knowledge of collaborators as to their roles in ensuring sustainability in the Company s businesses and value chain. Collaborators who work in strategic areas of sustainability also participated in a series of internal and external training programs, which addressed the following issues: LEARNING HOW TO LIVE WITH DIFFERENCES Sustainable practices in project management Product Life Cycle Assessment Sustainability in Packaging Biodiversity Communication strategies and sustainability Control and economic use of steam energy Funding for research, development and industrial innovation The Boticário Group Code of Conduct is also intended for collaborators and informs, with transparency, the correct and respectful behavior expected in relationships both with colleagues and other stakeholders of the organization. For us, the Code only fulfills its role if its contents are reflected in attitudes. Its objectives are aligned to the vision, to the deeper purpose and cultural values of the organization, and reinforce the company s responsibility towards its internal and external audiences. The Boticário Group Ombudsman is structured so that attitudes of non-compliance with the Code of Conduct may be reported and evaluated, and so that suggestions for improvement or clarification of the document are centralized and optimally handled To keep the Code of Conduct guidelines alive within the organization, monthly communication actions are performed in the Essência Magazine - distributed to all collaborators - and quarterly in all Company channels of communication. Moreover, the Conduct Committee provides training on the Code of Conduct and conduct management process geared to the audiences considered strategic for its dissemination. In 2013, 75% of all of the Group s managers were trained in the theme Limits in Interpersonal Relationships. The Boticário Group develops an initiative intended for collaborators with special needs children. Through this initiative, which also serves the community, the organization narrows the relationship with educators and experts to offer advice on the children s pathologies and to share experiences with those who live similar situations. In 2013, 28 families participated in the initiative, being 25 collaborator families and three families identified in the community neighboring our São José dos Pinhais plant(pr) Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

29 56 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report FRANCHISE NETWORK A major partner in the development of our sustainability strategy over the years is the Boticário network franchisee and, more recently, the quem disse, berenice? franchisee. The Boticario Group s experience in sustainability is shared with franchisees by means of training programs, informative materials and monitoring tools, that seek to contribute to the integration of sustainability in the management process, aimed at developing the growth and profitability of franchises, always in line with our guiding principles. Seeking to increase adherence to the business, the performance of the franchise network in terms of the priority themes of sustainability is evaluated in conjunction with several items related to the management and results of the stores, using the Franchise Analysis Instrument (IAF). The full evaluation cycle is 18 months and includes the following steps: 1. FRANCHISEE SELF-ANALYSIS 2. EVALUATION OF THE COMMERCIAL CONSULTANT THAT ASSISTS THE FRANCHISE GROUP 3. DEVELOPMENT OF ACTION PLANS FOR ISSUES THAT REQUIRE IMPROVEMENT 4. REVIEW OF THE EVALUATION BASED ON THE RESULTS OF THE EXECUTED PLANS 5. FINAL VALIDATION 6. AUDITING 7. ACKNOWLEDGEMENT Thus, in addition to identifying areas for improvement in his/her management process, the franchisee has the opportunity to develop plans for improvement in the most critical areas. In order to subsidize the development of the network, the Boticário Group operates in three areas: training of collaborators who interface with the franchises; qualification of franchisees; and provision of content for research, including online guides and manuals for the inclusion of sustainability in the franchisee s processes. Therefore, the theme of sustainability in constantly on the agenda of the Group s communication channels with franchisees and the sales force (extranet, sustainability portal, communication portal with the franchise network, national convention, magazines and brochures), and with the commercial team, responsible for monitoring and assisting in the development of the network (team meetings, meetings and clarification of the IAF). For increased qualification of the franchise network, five workshops were offered during 2013, in which sustainability was an integral part of the new franchise operators integration training Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

30 58 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report With the legacy of these professionals, the perpetuity of their businesses, and the future of the Boticario Group in mind, sustainability is propagated by the Succession Planning Program The Future in Our Hands, directed to the children of franchisees. The goal is to make them familiar with the franchise management process and prepare them to obtain positive results upon taking on management positions, including sustainability. More than 40 participants were trained in The Booklets on Sustainability for the franchise network, another initiative to inspire the theme among franchisees, provide a walkthrough of successful practices to be implemented according to the topics considered critical to the business. TOPICS OF THE BOOKLETS ON SUSTAINABILITY ECOEFFICIENCY PACKAGING RECYCLING DIVERSITY HEALTH AND SAFETY RECOGNITION IS NECESSARY The franchises with the best national and regional evaluations undergo an audit conducted by the regional O Boticário managers, and the best managerial performances are recognized annually at the IAF awards, presented during the Annual Franchisee Convention. Among these franchises, the best evaluations and projects in sustainability management, identified primarily by means of the Practice Data Bank, are highlighted as benchmarks in terms of national and regional sustainability. In 2013, the Cedro Group, from São Paulo, was the national winner in the Sustainability category, due to its actions with a focus on sustainability and people and its good practices in terms of data monitoring and store inventory control. The Cedro Group invests in the volunteer work of its collaborators and also has an agreement with an association of trash scavengers that collects the recyclable material produced by the stores and forwards it to a selective collection recycling plant in the region. The work in sustainability is also conducted in the Cedro Group stores with the practice of energy reduction programs and the reuse of recyclable materials in all store processes. To encourage the franchise s internal staff, a sustainability ranking was created, with rewards for the Group s stores that stand out in a list of pre-established items in the area of energy reduction and recycling. HUMAN RELATIONS IN BUSINESS MANAGEMENT topics include: labor relations, combating slave labor, promoting the rights of children and adolescents and promoting women s rights On the Extranet, the franchise network can access the Sustainability Portal, which includes the contents of booklets, and guidance on procedures to be applied in the stores such as the ordering of materials, and reporting of information on the Packaging Recycling Program. The achievements in stores can be registered in the Practice Data Bank also available at the Sustainability Portal. With this tool, the Boticário Group seeks to encourage the exchange of experiences, the dissemination of best practices and the recognition of the best cases in sustainability throughout the franchise network Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

31 60 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report COMMUNITY The Boticário Group sees professional training as key to making people more competitive in the marketplace. Based on this perception, we conduct professional training programs for youths and adults in the communities where we operate. This is performed by means of partnerships with public and private institutions, in an initiative known as Vocational Training Program for the Community. The selection of courses is performed by means of interviews and group dynamics, and to attend classes, subsidies for transportation and meals for students are also offered by the organization. To mention just a few examples, in Camaçari (BA), where our second factory is under construction, the first class of the Production Management Assistant course graduated in September During this same month, the first class of the Logistics Operations Assistant course was completed in São Gonçalo dos Campos (BA), the municipality in which the new Boticario Group distribution center (DC) began operations in April In the total 148 hours of classes in both courses, students received guidance on employability with behavioral techniques and technical tips. In all, 158 people participated in the training programs offered by our organization in 2013, in partnership with the National Industrial Apprenticeship Service of Bahia (BA-Senai) and with support from the National Development Bank (BNDES). The groups were composed mostly by women (95%) seeking professional opportunities in the two municipalities. IN SÃO JOSÉ DOS PINHAIS (PR), TRAINING PROGRAMS IN INDUSTRIAL PROCESSES AND BASIC COMPUTER SCIENCE WERE ADMINISTERED IN 2013 TO OVER 250 STUDENTS OF THE LOCAL COMMUNITY IN REGISTRO (SP), IN ADDITION TO BASIC COMPUTER SCIENCE, THE CLASSES AL SO ADDRESSED THE OPERATION OF ELECTRIC FORKLIFTS FOR MORE THAN 170 RESIDENTS COURSES IN BAHIA 158 PEOPLE PARTICIPATED IN THE TRAINING PROGRAMS OFFERED BY THE BOTICÁRIO GROUP IN HOURS WITH GUIDANCE ON EMPLOYABILITY WITH BEHAVIORAL TECHNIQUES AND TECHNICAL TIPS CLASSES COMPRISING MOSTLY WOMEN 95% SEEKING PROFESSIONAL PLACEMENT IN THE MUNICIPALITIES In São José dos Pinhais (PR), the Boticário Group headquarters, where the company s first factory is located, vocational courses in Industrial Processes and Basic Computer Science for more than 250 students from the local community were administered in In Registro (SP), where our first DC is located, classes, in addition to Basic Computer Science, also addressed Electric Forklift Operations and were attended by more than 170 local residents. Although the courses offered by the Boticário Group do not guarantee placement of participants in the work market, they intend to maximize their chances of employability in the local market in general, and some students end up being selected to be part of our organization s staff. Another way we found to increase the beauty of what we do was to open the doors of our Group to the community by offering the opportunity for youths to have their first contact with the labor market. In 2013, with our Young Apprentice program, 101 boys and girls aged years old had their first job opportunity with the Boticário Group. The experience also includes themes such as career planning with the objective of making these young citizens committed to themselves and others. Even if they do not continue their professional careers with the Boticário Group, we dedicated ourselves so that these youths may have their first major professional and ethical experience with us, an experience which may reflect upon the labor market and society. Another way we found to increase the beauty of what we do was to open the doors of our Group to the community by providing youths with their first contact with the labor market Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

32 62 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report BEAUTY IN DIVERSITY The Boticário Group supports the Free University for Human Efficiency (Unilehu), responsible for the professional training and qualification of people with disabilities in the labor market. The institution offers free courses in Curitiba (PR), São Paulo (SP) and Rio de Janeiro (RJ), which spread knowledge of languages, Advanced Excel courses and Negotiation Skills. With greater chances of employability, these professionals make diversity even more important, by adding sensitivity and their work force to the business universe. In partnership with Unilehu, we developed a specific course for people with disabilities who wish to work in the administrative area. Through this course, participants learn about the specific needs of these sectors and become eligible to compete for jobs. In the process, they received all the technical and behavioral information that these job positions require. THE BOTICÁRIO GROUP SUPPORTS UNILEHU, RESPONSIBLE FOR THE PROFESSIONAL TRAINING AND QUALIFICATION OF PEOPLE WITH DISABILITIES IN THE LABOR MARKET. FOR A MORE RELAXED PREGNANCY Among the various commitments that the Boticário Group undertakes with its internal audience, we highlight the Future Mother Program. Launched in 1999, the initiative brings together future mothers into two annual groups and, by means of lectures and meetings, provides them with information on pregnancy, birth and the first 12 months of the child s life. Collaborators, collaborators wives, in addition to pregnant women living in São José dos Pinhais (PR) and Registro (SP) can participate in the program. Since its inception, more than 1,100 pregnant women have been benefited by the program, with 434 collaborators from the Group s installations in São José dos Pinhais Group (PR) and Registro (SP), and 648 of the two communities Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

33 64 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report MATERIAL INDICATORS INDEX GENERAL STANDARD CONTENTS GENERAL STANDARD CONTENTS INDICADOR PAGE / RESPONSE EXTERNAL VERIFICATION GLOBAL PACT PRINCIPLE G4-9 Size of organization Page 7 G4-10 Total number of employees Spreadsheet attached G STRATEGY AND ANALYSIS G4-1 Statement by the most senior decision maker in the organization Pages 4 and 5 G4-11 Percentage of employees covered by collective bargaining agreements 100% of employees are covered by the collective bargaining agreements in force at each locality, and the same happens with the collective bargaining agreements relating to the result participation program. 3 G4-2 Description of key impacts, risks and opportunities ORGANIZATIONAL PROFILE G4-3 Name of organization Boticário Group Page 20 G4-12 Description of the organization s supply chain The Boticário Group buys products from different regions of Brazil and also from other continents, such as Europe, the Americas and Asia. The suppliers are divided into distinct families and sectors such as: Fragrances, Raw Materials, Metals / Valves, Paper, Glass, Plastics, Finished Products, Standardization, Marketing and Communication Agencies, IT, Facilities, Printing, Logistics Operators, Administrative, Uniforms and Transportation companies. G4-4 G4-5 Primary brands, products and services Location of the organization s headquarters Pages 12 and 13 Headquarters: Av. Rui Barbosa, 4.110, Parque da Fonte São José dos Pinhais - PR G4-13 Significant changes during the reporting period regarding size, structure, shareholding or supply chain of the organization In 2013 there was a corporate restructuring, and the company SKINGEN LABORATÓRIO E FARMÁCIA LTDA. incorporated the company LADECOM LABORATÓRIO DE PESQUISA E DESENVOLVIMENTO DE COSMÉTICOS LTDA.; and later had its name changed to CENCODERMA INSTITUIÇÃO DE PESQUISA E DESENVOLVIMENTO DE COSMÉTICOS LTDA. G4-6 Countries in which the organization operates, in which its main operations are located or that are specifically relevant to the topics addressed in the sustainability report The organization operates in seven countries: Brazil, Portugal, Spain, Venezuela, Paraguay, Japan, Angola. The Sustainability report is related to the operations of the Boticário Group in Brazil. G4-14 How the organization adopts the precautionary principle or approach Página 22 7 G4-7 G4-8 Nature of ownership and legal form of organization Mercados em que a organização atua The Boticário Group consists of limited corporate type corporations and privately held companies.. 1 Limited corporate companies: G&K Holding Ltda., Botica Comercial Farmacêutica Ltda., Haganá Fomento Mercantil Ltda., KGMA Empreendimentos Imobiliários Ltda., Interbelle Comércio de Produtos de Beleza Ltda., O Boticário Franchising Ltda. and Cencoderma Instituição de Pesquisa e Desenvolvimento de Cosméticos Ltda. 2. Privately held companies: Cálamo Distribuidora de Produtos de Beleza S/A. Markets served: Brazil, Portugal, Spain, Venezuela, Paraguay, Japan, Angola. Sectors served: perfumery, cosmetics and toiletries. Types of clients: Children, youths and adult females and males. G4-15 Charters, principles or other initiatives of economic, environmental and social character, which the organization subscribes or endorses. Global Causes: Declared voluntary commitments in the Global Pact Millennium Development Goals of the United Nations Social and environmental issues The Copenhagen Communiqué; The Prince of Wales s Corporate Leaders Group on Climate Change Climate Observatory Child Friendly Company Program - Abrinq On the Right Track - Business Pact to Combat Sexual Exploitation of Children and Adolescents Principle of Respect for Diversity and Eradication of Child Labor - Ethos Institute Give a Hand for the Future Program - ABIHPEC Brazilian Corporate Network for Lifecycle Assessment Companies for the Climate - Fundação Getúlio Vargas Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

34 66 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report Pilar Matérias Primas e Embalagens: Associação Brasileira de Indústrias de Higiene Pessoal, Perfumaria e Cosméticos (ABIHPEC), Rede Empresarial Brasileira de Avaliação de Ciclo de Vida Pilar Canais de Venda: Associação Brasileira de Franchising (ABF) Pilar Ecoeficiência Ampla: Empresas pelo Clima (FGV), GHG Protocol, Confederação Nacional da Indústria (CNI), Grupo de Profissionais de Meio Ambiente das Indústrias do Paraná (GPMAI) G4-19 Material aspects identified in the process of defining the report content The themes defined based omn the materiality study are: Product Life Cycle, Reverse Logistics, Point of Sale, Resellers, Ample Eco-Efficiency and Value Chain. The corresponding GRI aspects are: Materials, Energy, Water, Emissions, Effluents and Waste, Products and Services, Transportation, Environmental Supplier Evaluation, Supplier Evaluation in Human Rights, Health and Client Safety and Labelling of Products and Services G4-16 Participation in national and international associations and protection organizations IDENTIFIED MATERIAL ASPECTS AND LIMITATIONS G4-17 G4-18 Entities included in the consolidated financial statements or similar documents of the organization Processo adotado para definir o conteúdo do relatório e os limites dos Aspectos Outras participações em associações: Associação Brasileira de Anunciantes (ABA), Associação Brasileira de Comunicação Empresarial (ABERJE), Associação Brasileira de Propriedade Intelectual (ABPI), Associação Brasileira de Recursos Humanos (ABRH), Associação de Usuários de Informática e Telecomunicação do Paraná (Sucesu-PR), Câmara Americana de Comércio Para o Brasil (Amcham Brasil), Conselho Empresarial Brasileiro para o Desenvolvimento Sustentável (CEBDS), Conselho Paranaense de Cidadania Empresarial (FIEP), Endeavor Paraná, Grupo Informal de Empresas sobre Expatriação (GAE), Grupo de Institutos, Fundações e Empresas (GIFE), Instituto Akatu Instituto Brasileiro de Inteligência de Mercado (IBRAMERC), Instituto Ethos, Junior Achievement The only company that we have obligation to publicly report is the Cálamo Distribuidora de Produtos de Beleza S/A. The Sustainability Report covers the activities of this and other companies mentioned in indicator G4-7. In the personal hygiene, perfumery and cosmetics market, the maturing of customers in relation to sustainability is already perceivable. Today, the consumer continues to demand - always more - that the product have quality and deliver the expected result. Nevertheless, the consumer also shows to be more attentive, conscious and responsible for his/her purchases by observing the form of conception and seeking post-consumption disposal options with less impact on the environment. This new behavior has encouraged us to further improve our day-to-day processes, leading us to increasingly intensify, our performance in sustainability. For this reason, after the review of our sustainability strategy in 2012, we began to focus the greater part of our efforts on the topics Raw Materials and Packaging (life cycle and reverse logistics); Eco-efficiency; Sales Channel (points of sale and resellers), in addition to the multiplication of the strategy in these three fronts to all our stakeholders. We arrived at these topics after studying the future challenges that are directly related to our business and upon which we can act and contribute to achieve the best possible results. In addition, we listened to our stakeholders to know what their expectations are in relation to sustainability at the Boticário Group (see more in the Chapter Shared Responsibility on page 50). Concurrently, we met with the group s senior leadership to discuss what the key issues are for us to increase opportunities and lessen the risks in the management of our business. After analysing the two points of view (internal and external), we elected the topics that are part of our materiality and that, for this reason, were thereafter included in our annual Sustainability Report. This way of implementing sustainability foresees actions and concrete results until And we have taken the necessary measures to adopt it as part of our business management process. Thus, the defined strategy allows us to take a leading role in this changing scenario. G4-20 G4-21 G4-22 G4-23 For each material Aspect, report the Aspect Limit within the organization For each material Aspect, report the Aspect Limit outside the organization Restatements of information provided in earlier reports and the reasons for these reformulations Significant changes from the previous reporting periods covered in the Scope and Aspect Limits STAKEHOLDER ENGAGEMENT G4-24 G4-25 G4-26 Stakeholder groups engaged by the organization. Base used for the identification and selection of stakeholders for engagement. Approach adopted by the organization to engage stakeholders RAW MATERIALS AND PACKAGING: the issue is material for the processes of product Research, Development, Industrialization, Supply Chain, Product Distribution. Stakeholders related to the theme are on Page 31. SALES CHANNELS: the issue is material for the processes of Formatting, Operation and Decoration of all the points of sale of all of the Boticario Group units. Stakeholders related to the topic are on Page 39. ECOEFFICIENCY: the issue is material for the processes of Industrialization, Distribution and the entire supply chain. Stakeholders related to the theme are on Page 46. There were no re-statements of information provided in earlier reports in connection with mergers or acquisitions, change of base year or period and nature of business. Changes in measurement methods, owing to the improvement of internal controls, are indicated in the responses to the applicable indicators. In previous years, we followed the guidelines of the GRI G3.1, this year we changed to the new GRI G4 guidelines. There were no significant changes from previous years in relation to the scope and aspect limits. Suppliers, Collaborators, Franchisees, Community, Resellers and Customers / consumers. The identification and selection of stakeholders considers all the stakeholders involved directly and indirectly with the operations and commercial activities of the company as the base, including actors with whom the Boticário Group has a relationship of responsibility, shared responsibility and induction, specifically involved and detailed in the chapters that deal with the Group s strategic pillars, the audiences of Suppliers, Collaborators, Surrounding Communities, Franchisees, Retailers and Consumers. Page 95 Chapter Shared Responsibility: Page Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

35 68 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report G4-27 REPORT PROFILE G4-28 Key topics and concerns raised during stakeholder engagement and actions taken by the organization to address these issues and concerns, including the process of reporting them Reporting period for the presented information To inspire and leave a legacy for society, our starting point must take into account the perception that collaborators, partners, communities and sectorial agencies, among other audiences, have about the sustainability work we have already performed. Only then is it possible to benchmark our effectiveness and identify opportunities for improvements.. With this in mind, in 2013 we heard over 990 people divided into 11 different groups of stakeholders. The research was carried out in partnership with Market Analysis and considered the assessment of these stakeholders in relation to our performance in the area of sustainability.. Certain results are noteworthy: 79.2% in 2012 and 83.8% in 2013 of respondents recognize sustainability in the management the Boticário Group. The most important themes for the activities of the Boticário Group, according to respondents, are related to the practices in Product Life Cycle and Eco- Efficiency - These themes were considered important by eight out of the total 11 groups. 93% of the consultants in the O Boticário store network (one of the Boticário Group business units) state that they share information on the Group s sustainability with consumers, which shows that the team has interest in the subject and wants to share it with the client. Page 97 Page 97 GOVERNANCE G4-34 G4-36 G4-38 G4-39 G4-40 Governance structure of the organization Positions and functions of the executive level responsible for the economic, environmental and social topics Composition of the highest governance body and its committees Report whether the Chair of the highest governance body is also an executive officer Processes of selection and appointment to the highest governance body and its committees The companies of the Boticário Group have their management based on a platform of consolidated corporate governance. The Board of Directors and Executive Officers guide, direct and plan the activities of the companies composing the Boticário Group in accordance with the assignments in the Social Contract, Internal Rules and Applicable Law. The Boticário Group has structured a Sustainability Management, reporting to the Executive Director of Human Resources and Sustainability, linked to the Presidency. It is currently composed of six members, three of whom are independent and renowned in the market. 1 to 10 The Chairman of the Board is not an executive director. Only competencies and economic and financial performance are considered. G4-29 Date of most recent prior report Page 97 G4-30 Cycle of report publication Page 97 G4-31 G4-32 G4-33 Contact for questions regarding the report or its contents Option agreed chosen by the organization Policy and current practices adopted by the organization to submit the report to an external verification Page 97 Agreed - Essencial Aiming to confer integrity and credibility to the sustainability reports, the Boticário Group follows the GRI guidelines in relation to external verification conducted by groups or individuals not related to the reporting organization. The role of the external verifier is to confirm the declaration of the company, add value and improve the organization s operations. Through this verification, we hope to achieve our goals through a systematic, disciplined approach to evaluate and improve the effectiveness of procedures for risk management, control and governance. The letter of assurance is on Page 95 G4-41 G4-42 G4-43 Processes used by the highest governance body to ensure the prevention and management of conflicts of interest Roles of the highest governance body and senior executives in the development, approval and updating of the purpose, mission statement, vision and values, and developing strategies, policies and goals related to economic, environmental and social impacts of the organization Steps taken to develop and enhance the knowledge of the highest governance body on economic, environmental and social topics The issue of conflict of interest, with respect to actions that prevent or hinder the practice is regulated by the Code of Conduct and conflicts of interest of any nature will not be tolerated in the Group. Every situation that can be characterized as a conflict of interest should be clarified or sent for verification by the Conduct Committee. The handling of the matter within the search for a solution /correction, passes progressively through the Conduct Committee, the Personnel Committee and may even reach the Board of Directors. The Board of Directors of the Group is responsible for establishing all Directives, which should be reflected through the executive officers in the purpose, vision and mission, strategy, policies and goals of the Business Units. Continuing Education for Counselors through lectures seeking to enhance their skills Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

36 70 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report G4-45 Role of the highest governance body in the identification and management of impacts, risks and opportunities derived from economic, environmental and social issues and the implementation of due diligence processes The Board of Directors is the governing body for providing guidance and direction for the Company, also evaluating actions related to the sustainability governance model of the Boticário Group, and it has the role of providing directives and of approving the strategies for action, establishing the longterm vision for sustainability, and following the evolution of the integration of sustainability in the Group, its business units and its value chain. G4-55 Ratio between the percentage increase in total annual compensation of the highest paid individual in the organization, and the average percentage increase in annual total compensation of all employees (excluding the highest paid) in the same country We use as a means of adjustment the Collective Agreements (of the various unions representing employees) and Meritocracy intended only for professionals with very differentiated performances. Considering that the adjustment rates negotiated with the unions for the highest salary and lowest salary were the same (8.5%), we can see that the ratio is 1 to 1. G4-48 Role of the highest level that analyzes and formally approves the sustainability report and ensures that all material aspects are addressed The Sustainability Management is responsible for the content of the Sustainability Report and for ensuring that all material issues were addressed. The report is reviewed by all directors working on the themes of sustainability defined as material. ETHICS AND INTEGRITY DEEP PURPOSE To be recognized by the business world as a group that contributes to a more beautiful world through entrepreneurship and sustainability. G4-51 Remuneration policies applied to the highest governance body and executives The management of our business is divided into three business forums: Board of Directors, Executive Committee (President and Executive Directors) and Area Directorates (Area Directors and Managers). Our compensation policy uses the Hay methodology as a method of job evaluation (for points) and thus compensates each occupational group. To ensure external competitiveness, we conduct annual surveys considering the desired positions in the Competitor Market: Average Amount for Fixed Salary, Competitive Salary for Variable Salary and Differentiated for Specific Benefits, and for internal impartiality we apply the policy of meritocracy based on Performance and Organizational Values. It is important to note that the variable values (short and long term) are defined by means of the Professional Annual Agreement and 03 year Contract with Objectives and Aggressive / Challenging but achievable Targets. There is no variable remuneration without the consideration of results that support the organization s plans. G4-56 Values, principles, standards and rules of behavior of the organization Our Vision To be the reference vin the creation of value in the beauty business. Brand Pillars The Boticário Group is MORE. Our inspiring CONDUCT and performance in a COLLABORATIVE NETWORK are sustained by EXPERTISE THAT LEVERAGES and BOOSTS GROWTH. Our Values Commitment to Results, We are Honest, We value People and Relationships and have Passion for progress and challenges. Our CEO, Artur Grynbaum, is the sponsor of this theme within the organization. Our collaborators are impacted by cultural values from their very first day in the company during the integration program, and begin to experience them every day within the organization. 10 G4-52 Process adopted for determining the remuneration Evaluation process for each position: Hay methodology used to assess the position considering three variables: Know How, Problem Solving and Accountability for Results. This process is conducted by a Specialist of the Compensation Area in partnership with the owner of the consulting methodology. Throughout the evaluation process, company executives responsible for the structure of staff positions are involved in the process validation. For the most critical positions of the organization (executive levels: directors and managers), we always use the consulting company to carry out these assessments and, for non-executive levels, this assessment is centralized in the remuneration specialist team. G4-57 Internal and external mechanisms adopted to seek guidance on ethical behavior and compliance with legislation Page G4-53 How opinions of stakeholders are solicited and taken into account in relation to remuneration There is a Remuneration Council, which considers all Boticario Group remuneration policies. The committee is composed of the President of the Boticário Group and Executive Director of Human Resources and the decision is their responsibility. The Manager of Compensation and Quality of Life organizes this forum and is responsible for taking the lead on topics related to Total Remuneration. Periodically we are supported by Specialized Market Consultants for a more comprehensive look at the policy to ensure assertiveness in our decisions. G4-58 Internal and external mechanisms adopted to report concerns about unethical or incompatible behavior with the laws and issues related to organizational integrity Page Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

37 72 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report SPECIFIC STANDARD CONTENTS MATERIAL ASPECTS INDICATOR MATERIAL ASPECT: MATERIALS PAGE / RESPONSE CATEGORY: ENVIRONMENTAL EXTERNAL VERIFICATION GLOBAL PACT PRINCIPLE G4-EN9 Water sources significantly affected by water harvesting SJP Plant: in the Industrial plant, water harvesting comes from the Aeroporto reservoir, supplied by the Miringuava System. The harvesting of water by the organization corresponds to 0.14% of the local supply capacity, so we understand consumption by the Boticario Group does not significantly affect the water source. For the calculation, 2.000L / s (supply capacity of the system) and 101,873 m³ / year (SJP plant consumption in 2013) were considered. DC Registro: At the DC, the capture of water is done through a deep well. The current consumption volume lies within the limits of the concession according to Ordinance DAEE 2415 of 24/10/12. 8 G4-DMA Page 26 G4-EN2 Percentage of material used from recycling Materiais reciclados são utilizados nas embalagens de produtos da unidade O Boticário, incorporados nos cartuchos de papel e na composição dos berços (componente utilizado para acomodar os produtos em estojos) e em itens para transporte: na composição das caixas utilizadas para o envio de todos os produtos do Grupo para seus canais de venda e nos berços utilizados para acomodar e proteger os produtos dentro das caixas. 8 G4-EN10 Percentage and total volume of water recycled and reused MATERIAL ASPECT: EMISSIONS Volume of reused water: Plant SJP: m³ / Registro: 1.735m³ Volume of reused water (%): Planta SJP: 14% / Registro: 23% 8 MATERIAL ASPECT: ENERGY G4-DMA Page 42 G4-DMA Page 42 G4-EN15 Direct emissions of greenhouse gases (GHG) (Scope 1) Due to differences in the timing required for assurance and publication of the data, information related to the total direct and indirect GHG emissions are reported in the corresponding inventory in the scope of the GHG Protocol 7;8 G4-EN3 G4-EN4 G4-EN5 Power consumption within the organization Power consumption outside the organization Energy intensity Detailing can be found following these indicators. 8 For energy consumed by the burning of fossil fuels and electricity from stores and franchises, travel, displacements and transportation, the information will be provided in the annual GHG Protocol inventory. Plant SJP: 0,146 GJ/ M units produced (+5% x 2012; -1.4% x 2011) DC Registro: 0,060 GJ/ M units shipped (-9% x 2012; -11.8% x 2011) Types of energy included in the ratio: Electricity, Fuel (Natural Gas and Diesel SJP in DC Registro). The ratio considers energy consumed internally. 8 8 G4-EN16 G4-EN17 G4-EN18 Indirect emissions of greenhouse gases (GHG) resulting from the purchase of energy (Scope 2) Other indirect emissions of greenhouse gases (GHG) emissions (Scope 3) Intensity of emissions of greenhouse gases (GHGs) Due to differences in the timing required for assurance and publication of the data, information related to the total direct and indirect GHG emissions are reported in the corresponding inventory in the scope of the GHG Protocol Due to differences in the timing required for assurance and publication of the data, information related to the total direct and indirect GHG emissions are reported in the corresponding inventory in the scope of the GHG Protocol 7;8 7;8 Page 44 8 G4-EN6 Reduction of energy consumption Page 42 8;9 G4-EN19 Reduction in emissions of greenhouse gases (GHG) Page 44 8;9 MATERIAL ASPECT: WATER G4-DMA Page 42 G4- EN20 Emissions of substances that deplete the ozone layer (ODS) 0,0 t: The Boticário Group operates in accordance with the Montreal Protocol by not using in its activities and products substances that cause the decrease in the ozone layer, as stated in the document. 7;8 G4-EN8 Total water withdrawal by source Detailing can be found following these indicators. 7;8 G4-EN21 NOx, SOx and other significant atmospheric emissions NOx (kg): 70 / SOx (kg): 0 7; Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

38 74 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report MATERIAL ASPECT: EFFLUENT AND WASTE G4-DMA Page 42 MATERIAL ASPECT: PRODUCTS AND SERVICES G4-DMA Page 26 G4-EN22 G4-EN23 Total water discharge, broken down by quality and destination Total weight of waste by type and disposal method SJP Total volume of water in m³ / year disposed in a planned or unplanned manner: Destination: Rio Pequeno Treatment Method: Activated Sludge ETE Reused Volume (m³): 16,966 Total volume of water in m³ / year disposed in a planned or unplanned manner: no flow meter at the entrance of the STP (there will be one in 2014). Destination: Tributary of Ribeirão Vermelho River. Treatment Method : Compact ETE: anaerobic reactors, aerobic filter with air diffusion by fine bubbles, and secondary sedimentation tank, with air lift system for reused sludge return Volume (m³): There is no reuse, but rather the use of rainwater. 8 Detailing can be found following these indicators. 8 G4- EN28 Percentage of products and packaging recovered in relation to total product sales broken down by product category Since 2006 the Boticário Group, through its O Boticário Packaging Recycling Program, performs the proper disposal of the main recyclable materials in the sales cycles (post-consumption packaging, visual merchandising and graphic materials). The materials collected at the stores are forwarded to the company s Distribution Centers using partner transportation companies that deliver our products and are subsequently forwarded to waste management companies and recycling cooperatives, which are responsible for screening, decharacterization, weighing and recycling of the materials. The development of the Boticário Group packaging seeks to : Analyze conditions that favor the recycling of the commercialized packaging, Study alternative materials with higher market attractiveness, Favor the dismantling of the packaging for increased flexibility in the screening process, Evaluate the environmental impact generated by the production, consumption and disposal of packaging, Encourage the use of refills Reduce the use of inputs such as plastic, however maintaining desired properties and functionalities 8;9 MATERIAL ASPECT: TRANSPORT G4- EN24 G4-EN25 Total number and volume of significant spills Weight of transported, imported, exported, or treated waste deemed hazardous under the Basel Convention 2, Annexes I, II, III and VIII, and percentage of waste shipped internationally Manufacturing plant and distribution center - there were no reports of significant spills of any nature that would generate negative environmental impacts, both on the premises and in the surrounding area of the Boticário Group facilities. For Spills, the Emergency Management Plan (EMP) covers all actions and responsibilities necessary to meet the occurrence. Flammable liquids SJP (t): 263 (-19.8% x 2012; +90% x 2011) Registro (t): (-82.2% x 2012; +31% x 2011) ERRATA: the value of SJP 2012 was 328 t. The reduction compared to the value of SJP 2012 is due to the 16% reduction in the production volume of hydroalcoholics. At the Registro DC, the reduction is due to the lower volume of products sent for destruction via faults and inventory write-offs. 8 8 G4-DMA Page 48 G4- EN30 Significant environmental impacts resulting from the transportation of products and other goods and materials used in the organization s operations, and transportation of its employees The main impacts resulting from transportation are diesel consumption, and the consequent emission of particulates and greenhouse gases, and the generation of waste from cardboard boxes used to package products and raw materials. How we mitigated the impacts: -Emission of particulates: Request for black smoke certificates (opacimeter) and awareness, training and monitoring of transportation providers in best practices for reducing emissions. -Emission of greenhouse gases: awareness, training and monitoring of transportation providers in best practices for reducing emissions. -Waste of cardboard boxes: reuse of master boxes (freepacking program). -Definition of significant impacts: using the analysis of significance in the worksheet AI / PD of the Integrated Management System - IMS Health, Safety and Environment. 7; 8; 9 MATERIAL ASPECT: ENVIRONMENTAL ASSESSMENT OF SUPPLIERS G4- EN26 Identification, size, protection status, and biodiversity value of water bodies and related habitats significantly affected by discharges and drainage of water undertaken by the organization All releases of water are properly granted, without the existence of terms of adjustment of conduct (TAC). The limits set for the grants are monitored and periodically reported to the appropriate agencies. In 2013, the discharges of Registro and São José dos Pinhais were within the limits established by the permits. 8 G4-DMA Page 52 G4-EN32 Percentage of new suppliers selected based on environmental criteria 100%: 27 suppliers. Approvals of new suppliers and new plants of existing suppliers were considered in this total. The environmental criteria assessed include: the existence of Environmental Operation License, Environmental Risk Prevention Program (RPP) and proper disposal of waste Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

39 76 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report G4-EN33 Actual and potential significant adverse environmental impacts in the supply chain and measures taken in this regard Annually the verification of environmental impacts (including energy and water consumption, emissions of Greenhouse Gases - GHG and waste management) is performed in the supply chain of the Boticário Group through self-assessment and / or visits and the sustainability questionnaire. This applies to strategic suppliers and some non-strategic suppliers considered critical. In 2013, the number of suppliers that underwent these assessments was 63 strategic suppliers, 4 suppliers in the approval process and 90 non-strategic suppliers. Suppliers that offer greater potential of environmental impacts are the major industries and transport companies. This is due to their emissions of greenhouse gases, waste generation, water consumption and electricity. CATEGORY: SOCIAL SUB-CATEGORY: HUMAN RIGHTS MATERIAL ASPECT: EVALUATION OF SUPPLIERS IN TERMS OF HUMAN RIGHTS G4-DMA Page 52 G4-HR10 Percentage of new suppliers selected based on human rights related criteria All 27 contracts closed during the year with suppliers have clauses that refer to general obligations such as occupational safety and medicine, absence of child labor and Code of Conduct. 8 1;2;3;4;5;6 MATERIAL ASPECT: LABELING OF PRODUCTS AND SERVICES G4-DMA Page 26 G4-PR3 G4-PR4 Type of information on products and services required by the organization's procedures relating to information and labeling of products and services and percentage of significant categories subject to these requirements Total number of cases of non-compliance with regulations and voluntary codes concerning information and labeling of products and services, by type of result All products follow labeling criteria, according to current laws, including the safe use of products. There is no requirement for environmental labeling for commercialization in the domestic market. However, for products exported to Portugal, there is the inclusion of the Green Seal, which is the symbol required by the agency responsible for packaging recycling in that country. This identification informs that the products have appropriate destination. In 2013, the Boticário Group and its business units did not report any relevant administrative sanctions related to product labeling. 8 8 SUB-CATEGORY: PRODUCT RESPONSIBILITY MATERIAL ASPECT: CUSTOMER HEALTH AND SAFETY G4-DMA Página 26 G4-PR1 Percentage of significant product and service categories for which the impacts on health and safety are assessed, seeking improvements The Boticário Group assesses the safety and efficacy of its products as from the receipt of the raw material, subjecting the products to the most advanced studies to corroborate safety and efficacy of use for the consumer, as advocated in international guidelines and legislation. These studies are applied according to the characteristics of each product, its intended use and target audience. In addition, the Group monitors the performance of its products in the market, through the Cosmetovigilance, ensuring a full cycle of product evaluation, with the historical use of products by our customers. 1 G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes related to the impacts of products and services on health and safety during their life cycle, by type of outcome In 2013 there were no complaints classified as severe of marketed products that could indicate the need for product recalls from the market and / or safety alerts Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

40 78 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report G4-10 TOTAL EMPLOYEES FEMALE MALE ,415 1, , (Including Directors and Executive Officers) (Aerofarma) EN3 TYPE LOCATION UNIT X X 2011 TOTAL GJ 76,618 59,557 68, % 11.3% Direct GJ 12, % -13.7% Non-renewable GJ 12, % -13.9% São José dos Pinhais GJ 1, % -14.4% (total) GLP Registro GJ % 10.0% Total GJ 1, % -9.3% COTRACT TYPE São José dos Pinhais GJ % -53.7% Full time Diesel Registro GJ % -0.5% Total GJ % -3.8% OUTSOURCED EMPLOYEES 1,500 GROUP - TOTAL Gasoline São José dos Pinhais Registro GJ GJ Via GHG Protocol Inventory Via GHG Protocol Inventory São José dos Pinhais GJ % -21.0% SITES FEMALE MALE Natural gas Registro GJ Total GJ % -21.0% Curitiba Renewable Renewable % -1.4% São José dos Pinhais Registro Ethanol São José dos Pinhais Registro GJ GJ Via GHG Protocol Inventory Via GHG Protocol Inventory São Paulo Other* Biodiesel São José dos Pinhais GJ % -52.6% Registro GJ % 1.9% Total GJ % -1.4% Total Indirect Indirect 63, % 18.1% TOTAL GERAL 6230 *Other: includes collaborators of our own stores located in the following states are included in other employees: Pernambuco, Sergipe, Minas Gerais, Rio de Janeiro, São Paulo (interior), Distrito Federal, Santa Catarina and Rio Grande do Sul Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

41 80 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report EN8 LOCATION WATER SOURCE UNIT X X 2011 SJP Plant At the Industrial plant, water harvesting is done by the public water supply in a planned manner. All liquid comes from the Aeroporto reservoir, supplied by Miringuava System. m³ 101,873 79,791 63, % 59.47% m³/ units produced % 19.43% NON MATERIAL INDICATORS Additional information (complementary indicators). We chose to report other indicators in addition to those related to the material aspects. CATEGORY: ECONÔMICAL DC Registro At the DC in Registro, water harvesting is done by a deep well as per concession DAEE , situated in the basin of the Ribeira do Iguape river Offices m³ 6,362 m³ % 10.44% m³/ collaborator % % DMA AND INDICATORS DESCRIPTION ASPECT: ECONOMIC PERFORMANCE PAGE / RESPONSE External Verification Global Pact Principle EN23 TYPE SJP REGISTRO SJP REGISTRO SJP REGISTRO Total Variation x previous year -12.7% 5.9% 37.2% 481% Non-Hazardous (t) Reuse G4-EC2 Financial implications and other risks and opportunities due to climate change The process of defining the new sustainability strategy included the analysis of the potential financial impacts resulting from climate change and the potential contribution of the Group to mitigate this phenomenon. While recognizing that the higher incidence of extreme weather events such as droughts and storms, can negatively impact its operations and that of its suppliers, the Group believes that its contribution to the matter lies in the continued adoption of processes and raw materials that are less Greenhouse Gas (GHG) intensive, as detailed in the pillars Raw Materials and Packaging and Ample Ecoefficiency. Thus, instead of developing specific controls to evaluate the financial implications related to climate change on its operations, the Boticário Group's strategy for the matter is to measure its emissions (through annual inventories), implement the of Life Cycle Analysis methodology and adopti less emission intensive processes. 7 Recycling ASPECT: MARKET PRESENCE Coprocessing Industrial Landfill Incineration Hazardous (t) Reuse Recycling Coprocessing G4-EC5 Variation of the proportion between the lowest salary compared to the local minimum wage, by gender Minimum Wage Paraná: R$ Minimum Wage São Paulo: R$ Lowest salary SJP/Curitiba - ADM: Female: R$ (103.7%) / Male R$ (113.1%) Lowest salary SJP/Curitiba - Operational: Female: R$ (103.7%) / Male R$998,00 (113.1%) Lowest salary Registro - ADM: Female: R$ (177.6%) / Male R$ (119.5%) Lowest salary Registro - Operational: Female: R$ (128%) / Male R$ (128%) Lowest salary São Paulo - ADM: Female: R$ (103%) / Male R$ (233.2%) 1 Industrial Landfill ASPECTO: PRÁTICAS DE COMPRA Incineration t/mm units produced Variation x previous year -5.35% 7.51% t/mm units shipped Variation x previous year % G4-EC9 Proportion of spending with locally based suppliers in significant operational units Regarding the procurement of direct materials / services for the Boticario Group, 68% are concentrated in São Paulo, 17% in Paraná, 2% in Bahia and 13% in other states. As to indirect materials / services, 48% of purchases are concentrated in São Paulo, Paraná 28%, 7% in Bahia and 17% in other states. * Number based on the amount of invoiced orders. Definition of local : Curitiba, São Jose dos Pinhais, São Paulo and its metropolitan areas, Camaçari and São Gonçalo dos Campos At the SJP plant, waste generation in general decreased due to the decrease in production volume (-8%). The variation of the generation at the DC in Registro is due to the recording of master box reuse (increase in reuse) and reduction in volumes sent for destruction due to inventory write-offs and product faults (coprocessing) Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

42 82 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report CATEGORIA: AMBIENTAL ASPECTO: BIODIVERSIDADE G4-EN11 Location and size of land owned, leased or managed in protected areas, or adjacent to, and areas of high biodiversity value outside protected areas Area 1: Salto Morato Natural Reserve - Private Reserve of Federal Natural Heritage (PRNP), established in 1996, part of the National System of Conservation Units, has 2,253 acres, of which 841 ha are recognized as PRNP; the remaining 1412 ha, although not recognized as a protected area, are treated the same way, i.e., the preservation of biodiversity. It is located in the municipality of Guaraqueçaba, on the northern coast of the state of Paraná, preserving part of the Atlantic forest, a highly threatened biome in Brazil. It was declared Natural Patrimony of Humanity by UNESCO in 1999 and is part of the Atlantic Forest Biosphere Reserve. It is inserted in the Guaraqueçaba Area of Environmental Protection. It is located in the polygon considered PROBIO (Project under the Ministry of Environment) as an area of extremely high priority for conservation. The coast of the state of Paraná, where the Salto Morato Natural Reserve is located, is part of the largest remaining block of Atlantic Forest in Brazil. In this region there is a mosaic of protected areas (PAs) called Lagamar Mosaic recognized by Federal MMA Ordinance No. 150 of 08/05/2006, which covers PAs from the southern coast of the state of São Paulo to the northern coast of Paraná. The region is also part of the Biosphere Reserve of the Atlantic; it is recognized by the Man and Biosphere Program / UNESCO Natural World Heritage Site and forms part of the Atlantic Forest hotspot, one of 34 global hotspots. Still, according to the Workshop Assessment and priority actions for the conservation of Biodiversity and Southern Grasslands (MMA, 2000), the area is considered a priority for conservation and research due to its abiotic and biotic characteristics, especially for mammals, birds, reptiles, amphibians and flora. The importance of biodiversity in the Salto Morato Natural Reserve is evidenced by the diversity found in the reserve. The surveys carried out at the site identified 673 vascular plant species. Regarding the fauna, the most significant figures point to 394 species of birds and 38 species of fish. Occurrences of mammals, reptiles and amphibians can reach 93, 36 and 98 respectively. So far, 53% of the endemic rate of Atlantic Forest birds were found in the Reserve. Area 2: Serra do Tombador Natural Reserve - Private Reserve of Federal Natural Heritage (PRNP), created in 2009, part of the National System of Conservation Units. Its 8,730 acres protect remnants of the Cerrado, the second most endangered biome in Brazil. It is located in the municipality of Cavalcante, northern part of the state of Goiás and is located in the polygon considered PROBIO (Project under the Ministry of Environment) as an area of extremely high priority for conservation. It is inserted in the Environmental Protection Area of the Pouso Alto region. In addition to being located in the central portion of the Cerrado Biome, the Serra do Tombador Natural Reserve is of vital importance upon being created in an area considered by PROBIO ( 2003) as a priority area for conservation. Specifically, the area selected for the implementation of the Reserve is identified by the CP code - 493, as an area of Extremely High priority for conservation. Additionaly, the Reserve lies inside the context of the Paranã-Pireneus Ecological Corridor, which has been declared strategic for the conservation of the Cerrado. In addition, the Serra dotombador Nature Reserve has a significant diversity of environments ranging from open fields, such as Hydromorphic fields, Rupestrian fields, Dirty Moist grasslands and Shrublands, passing through formations typical of the Cerrado sensu stricto and Cerrado Park, up to the formation represented in the forest reserve by dense rain forest and the semideciduous forest. The pioneer formations associated to drainage, represented by Veredas or Moriche palm grovesmust also be rememmbered. The significance of the vegetation of the Serra do Tombado Natural Reserve is because it presents a high diversity of species, a characteristic of the Cerrado, where 435 species belonging to 72 plant families were recorded. This diversity is composed of elements of high relevance for the conservation of Brazilian flora diversity as a whole. The significance of the reserve for wildlife is linked to the fact that this unit it is located in a center of endemism for terrestrial vertebrates called the Vão do Paranã. 8 G4-EN12 G4-EN13 Description of significant impacts of activities, products and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas Habitats protected or restored ASPECTO: CONFORMIDADE G4-EN29 ASPECTO GERAL G4-EN31 Monetary value of significant fines and total number of non-monetary sanctions due to non-compliance with environmental laws and regulations Total expenditure and investment in environmental protection by type The Boticário Group Foundation for Protection of Nature created and maintains two nature reserves. Both are part of the National System of Conservation Units and protect about 11 hectares (equivalent to 11,000 football fields) in areas of rich biodiversity that are threatened biomes located in Brazil: the Atlantic Forest and the Cerrado. 8 The information on this indicator is reported in the indicator G4- EN11 8 The Boticário Group received a notice of violation issued by the Municipal Green and Environmental Agency of São Paulo for alleged conduct in violation of Municipal Law /2002. The Boticário Group complies with the applicable legislation and submitted its defense in relation to the notice received to the Municipal Green and Environment alagency of São Paulo. The amount of the fine was R$ Detailing can be found following these indicators. 7;8;9 ASPECT: MECHANISMS OF COMPLAINTS AND CLAIMS RELATING TO ACTIVE ENVIRONMENTAL IMPACTS G4-EN34 ASPECT: EMPLOYMENT G4-LA1 Number of complaints on environmental impacts presented and resolved through formal mechanisms Total number and rate of employee turnover by age group, gender and region Formal complaints mechanisms and existing complaints: Webpage ( telephone. In 2013, there was 1 complaint relating to noise in the R&D lab and it has been addressed. CATEGORY: SOCIAL SUB-CATEGORY: LABOR PRACTICES AND DECENT WORK Detailing can be found following these indicators Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

43 84 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report G4-LA2 G4-LA3 Benefits provided to full-time collaborators that are not provided to temporary or part-time, broken down by main operations Rate of return to work after maternity/ paternity leave and retention by gender ASPECT: HEALTH AND SAFETY AT WORK G4-LA5 G4-LA6 Percentage of total workforce represented in formal health and safety committees that help monitor and advise on occupational health and safety programs Rates of injury, occupational diseases, lost days, absenteeism and workrelated fatalities by region and gender Food Voucher (supermarket) totaling R$ per month (except Units allocated in SP); Christmas meal ticket totaling R$ credited in December; Health care plan for all employees; dental care Plan with complete coverage of orthodontics; Aid for medications (50% to 60% subsidy); Executive Check-up and Coordination; Occupational and specialized medical care in São José dos Pinhais and Registro; Infant nutrition supplement (R $ for purchase of milk up to 2 years old); Care for special needs children; Private pension plan - Botiprev; Special Leave Program; Group life insurance; Executive Insurance; Funeral assistance; Payroll Loans; chartered transportation; Parking; Cars for executives; Fuel subsidy for Management and Coordination levels. Quality of Life Programs: Future Mothers, Drug and Alcohol / Tobacco Dependency, Chronical Illnesses, Service for Employees, Gymnastics, Education brings Future, Family Size Activities. Part-time permanent employees are eligible for all of the above programs. For temporary workers, only employer benefits apply. 100% of employees have a right to enjoy maternity / paternity leave. In 2013, 154 employees benefited from maternity leave, with a return of 146 (94.8%) at the end of the license. 133 (86.4%) employees returned to work at the end of the license and are still employed after 12 months Paternity leave was not considered since it is only for 5 days and there is no control of the same. Internal Commission for Accident Prevention: 86 employees = 2.15% Fire Brigade: 193 employees = 4.22% IMS - Integrated Management in Health, Safety and Environment: 42 employees = 1.15% The committees operate at the corporate level. Injury rate: 0.56 Rate of occupational disease: 0 Rate of days away: 14.2 Absenteeism rate: 2.19 Number of fatalities: 0 We consider lesions to be situations classified as an accident at work, with or without leave from work 1 1 G4-LA10 G4-LA11 Programs for the management of competencies and continued learning that support the continued employability of employees and programs to manage career endings Percentage of employees receiving regular performance and career development evaluations ASPECT: DIVERSITY AND EQUAL OPPORTUNITIES G4-LA12 Composition of groups responsible for governance and breakdown of employees per category according to gender, age group, minority and other diversity indicators ASPECT: EQUAL PAY FOR MEN AND WOMEN In 2013, the company implemented a pre-retirement development plan, which enables eligible employees to receive the necessary preparation for the planning of the new post-retirement phase. The process of performance management meets 97% of the Group s employees in all business units. Today, this process relies on tools for assessing the adherence of employees to the organization s values and allows a self-evaluation of their performance prior to the consolidation of its leadership, creating a space for the construction of the development plans and succession group. Young Apprentice and Trainees do not participate in the Performance Management Program. Administrative: 85% Coordination: 99% Executives: 98% Operational: 99% Specialized Technicians: 98% Technicians: 100% Total: 97% By gender: Male: 98% Female: 96% Detailing can be found following these indicators. ASPECT: TRAINING AND EDUCATION G4-LA9 Average hours of training per year per employee by employee category and gender Attached spreadsheet LA9 G4-LA13 Ratio of base salary of men to women by employee category Executives: % Coordination: % Specialized Technicians: % Technicians: % Administrative: 102.1% Operational: % Interns and apprentices are not considered Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

44 86 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report ASPECT: EVALUATION OF SUPPLIERS IN LABOR PRACTICES SUB-CATEGORY: HUMAN RIGHTS ASPECTO: INVESTIMENTOS G4-LA14 Percentage of new suppliers that were evaluated with criteria for their labor practices 100%: 27 suppliers: approvals of new suppliers and new plants from existing suppliers were considered in this count. These suppliers have been assessed for health and safety at work (occupational tests, managements of PPE, emergency plan, fire brigade). From January 2014, the area of Technical Management of Suppliers will audit social responsibility requirements involving the enforcement of labor standards with regard to young apprentices, minors, individuals with disabilities, working hours and collaborator employment registration. G4-HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone evaluation on human rights Contracts with service providers and purchase orders have provisions for compliance with legal requirements of sustainability, human rights and other defined by the Boticário Group. There were no significant investments that put the organization in a control position over another entity, or initiated a capital investment that materially impacted the organization. 1;2;3;4;5;6 G4-LA15 Current and potential negative impacts of labor practices on the supply chain and measures taken Up to the year 2013, the labor practices of suppliers were evaluated by selfassessment of suppliers, which was applied to 66 of the Group s strategic suppliers. During this year, the areas that perform audits and visits to suppliers underwent a training program on the subject of labor legislation to be applicable in the field as from Major categories evaluated in the year and that offer higher risk are the sectors of alcohol and civil construction, comprising 5 suppliers: 3 for alcohol and 2 for construction where not real but potential risks were found, inherent to the industry. Taking into consideration a sectorial perspective (not necessarily of the Group s suppliers), the potential risks identified were: excessive workload, paid weekly rest not obeyed, conditions related to ergonomics, wages below the established by law or collective agreement, child labor, sub-working conditions in agricultural fields. The audits conducted in 2013 were not for labor issues, such as what will happen in According to the perceptions of the field in 2013, there was no critical situation being reported. No supplier was terminated due to the Review. G4-HR2 Total hours of employee training on policies and procedures concerning aspects of human rights relevant to the operations ASPECT: NON-DISCRIMINATION G4-HR3 Total number of cases of discrimination and actions taken The managers had on average 02 hrs. of training; young apprentices had 3h28min; operational employees (focus on HR and communication in their production lines) received 2 hrs. of training, and the team of one Regional Manager, consisting of 12 business consultants, received 1 hr. of training. Managers and operational employees focused in HR and communications are considered strategic because they have the function of multiplying the training content to their teams. The young apprentices and business consultants, in turn, are considered a critical audience in light of their functions and work (commercial consultants have no fixed position, working in the field). The number of managers who attended the training represents 75% of the total group; young apprentices who participated in the training represented 98%; operational employees, 98%, and business consultants, 100% of those summoned. There were 04 events in 2013, all recent, so the analysis processes are still in progress. 1;2;6 ASPECT: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING ASPECT: MECHANISMS OF COMPLAINTS AND CLAIMS RELATING TO LABOR PRACTICES G4-LA16 Number of complaints related to labor practices presented and resolved through formal mechanisms There is no specific channel for receiving reports on this subject. The ombudsman receives manifestations of this content and offers proper solutions. There were 23 reports on this topic. Of these, 14 were addressed and completed, and 09 are under review. G4-HR4 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights Within the Boticário Group, we have a policy for union relationship that confers full membership rights to our employees. The meetings for collective bargaining by unions are held to on company premises and the person responsible for negotiating in the Group is a leader of an employer s union, and the most representative trade unions also participate in the negotiation. We have no control over the issue of union relations of our suppliers, except for labor relations that interfere with the rights of employees. 1;2; Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

45 88 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report ASPECT: CHILD LABOUR SUB-CATEGORY: SOCIETY ASPECT: LOCAL COMMUNITIES G4-HR5 Operations and suppliers identified as high risk for incidents of child labor, and measures taken to contribute effectively to its abolition The Boticário Group considers a significant risk of occurremnce of incidents of child labor and young workers exposed to hazardous work in sectors that involve product processing or a high level of outsourcing such as raw materials, metals / valves and uniform operations. Especially if provided by suppliers located in more vulnerable countries or national regions where labor law is still immature. There is also a particular concern with the operations of companies that supply our immediate suppliers over which our control is still limited. The Boticário Group has a supplier management program that includes, among others, the compliance of labor and social criteria in the hiring and / or retention of its suppliers. Moreover, it has a frequent channel of communication with suppliers that addresses topics such as respect for the practice of labor laws, holds annual meetings in which it discusses in depth the explicit prohibition of child labor in the production chain, site visits for the purpose of observing the practices of its suppliers in these various criteria and it has invested in conducting sectoral studies to better understand the extent of the chain as well as the main existing risks. The company also encourages its suppliers to commit to sustainability guidelines established in the Group s Sustainability Guide for Suppliers, material that is available to all suppliers of the Group, which contains general guidance on good work practices, including the prohibition of child labor in the production chain, except those legalized as the condition of Young Apprentices. 1;2;5 G4-SO1 G4-SO2 Percentage of operations with programs for local community engagement, impact assessment and development programs implemented Operations with significant potential or actual impacts on local communities The Boticário Group performed investments in 100% of the locations in which it operates, considering administrative sites and factories. São José dos Pinhais / PR: vocational training courses, digital inclusion, future mothers, investment by means of tax breaks; Registro / SP: vocational training program for pregnant women, investment via tax breaks; Curitiba / PR: investment via tax breaks; São Paulo / SP: investment via tax breaks; Camaçari / BA: vocational training; São Gonçalo dos Campos / BA: vocational training. There were no reports of significant impacts of the Boticário Group operations to the local community, due to preventive actions taken by the Group ASPECTO: COMBATE À CORRUPÇÃO ASPECT: FORCED OR COMPULSORY LABOR G4-HR6 Operations and suppliers identified as high risk for incidents of forced or compulsory labor, and measures taken to contribute effectively to its abolition The Boticário Group considers a significant risk of occurrence of incidents of forced, compulsory and / or slave labor in sectors that involve product processing or a high level of outsourcing such as raw materials, finished products, metals / valves and uniform operations. Especially if provided by suppliers located in more vulnerable countries or national regions where labor law is still still immature. There is also a particular concern with the operations of companies that supply our immediate suppliers over which our control is still limited. The Boticário Group has a supplier management program that includes, among others, the compliance of labor and social criteria in the hiring and / or retention of its suppliers. Moreover, it has a frequent channel of communication with suppliers that addresses topics such as respect for the practice of labor laws, holds annual meetings in which it discusses in depth the explicit prohibition of child labor in the production chain, site visits for the purpose of observing the practices of its suppliers in these various criteria and it has invested in conducting sectoral studies to better understand the extent of the chain as well as the main existing risks. The company also encourages its suppliers to commit to the sustainability guidelines established in the Group s Sustainability Guide for Suppliers, material that is available to all suppliers of the Group, which contains general guidance on good work practices, including the prohibition of forced, compulsory and / or slave labor in jail. 1;2;5 G4-SO4 G4-SO5 Communication and training on anti-corruption policies and procedures of the organization Confirmed incidents of corruption and actions taken in response Although no specific anti-corruption policy exists within the Boticário Group, the Code of Conduct explicitly describes the need for collaborators to present an ethical conduct, which hinders the granting of any advantage or privilege to public officials. All collaborators, including members of governance, have the Code of Conduct and signed a commitment when they joined the Boticário Group. The franchisees of the O Boticário and quem disse, berenice? networks received the code of conduct relating to their business unit. The guidance contained in both codes is that franchisees must not engage in any illegal, immoral relationships with public agents and authorities, cohibiting any situation that characterizes corruption, such as crimes against the economy and tax evasion, among others. Our suppliers also receive the Sustainability Guide for Suppliers. In 2013, all strategic suppliers received the material, and also some non-strategic suppliers, with a total delivery of 118 guides. The guidance contained in the document is that involvement in illegal and abusive practices represent an unacceptable conduct by the Boticário Group. This audience is also oriented to establish formal policies and procedures, widely disseminated among stakeholders, that cohibit the involvement of its employees and business partners in illicit acts and foster the observance of the Boticário Group Code of Conduct. There is no specific training on anti-corruption policies and procedures. 10 In 2013 there were no cases related to the indicator 10 ASPECT: PUBLIC POLICIES ASPECT: MECHANISMS FOR COMPLAINT AND CLAIMS RELATING TO HUMAN RIGHTS G4-HR12 Number of complaints related to the field of Human Rights, addressed and resolved through formal complaint mechanisms 104 reports were received: 81 reports by internal stakeholders and 23 from external stakeholders; 77 anonymous reports and 27 identified reports. 59 targeted accounts, awaiting response by the responsible areas and 45 reports processed and finalized. G4-SO6 Total value of contributions to political parties, politicians and related institutions by country and beneficiaries The political posture of the Boticário Group is to not contribute financially to political parties or related institutions. The Group s positioning is unbiased, particularly in times of election, and the distribution of any political party material is not permittedwith in the units of the Group Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

46 90 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report ASPECT: UNFAIR COMPETITION LA01 G4-SO7 Total number of legal actions due to anticompetitive behavior, anti-trust and monopoly practices and their outcomes The Boticário Group did not receive any legal actions for anticompetitive behavior, anti-trust and monopoly practices during the period. VARIABLES - GB Total number of hirings 1080 Women 593 Curitiba 95 Between 30 and 50 years old 260 Above 50 years old 3 Men 291 Curitiba 45 ASPECT: COMPLIANCE São José dos Pinhais 272 São José dos Pinhais 156 Registro 43 Registro 41 G4-SO8 Monetary value of significant fines and total number of non-monetary sanctions due to non-compliance with laws and regulations The Boticário Group did not receive any significant fines or penalties for noncompliance with laws and regulations during the period. São Paulo 79 Other 104 Age 593 São Paulo 33 Other 16 Age Under 30 years old 331 Under 30 years old 142 ASPECT: SUPPLIER ASSESSMENT IN TERMS OF IMPACTS ON SOCIETY Between 30 and 50 years old 257 Between 30 and 50 years old 144 G4-SO9 Percentage of new vendors evaluated under the criteria of impacts on society Impact on society is not a formal evaluation methodology. All suppliers are evaluated with respect to various social and environmental criteria and that eventually are reflected in society as a whole. All 27 suppliers were evaluated based on these criteria. Above 50 years old 5 Men 487 Curitiba 53 Above 50 years old 5 Movements x gender - Male 1136 Classification 292 São José dos Pinhais 288 Merit 182 ASPECT: MECHANISMS FOR COMPLAINTS AND CLAIMS RELATING TO IMPACT ON SOCIETY Registro 64 Promotion 94 G4-SO11 Number of complaints on labor practices presented and resolved through formal mechanisms There were no reports of this nature in 2013 to the ombudsman. São Paulo 26 Other 56 Age 487 Under 30 years old 240 Total 568 Movements x gender - Female 675 Classification 270 Merit 252 SUB-CATEGORY: RESPONSIBILITY FOR THE PRODUCT Between 30 and 50 years old 241 Promotion 153 ASPECT: CUSTOMER PRIVACY Above 50 years old 6 Total number of terminations 810 Variable- Aerofarma Total number of hirings 1186 G4-PR8 Monetary value of fines (significant) for noncompliance with laws and regulations concerning the provision and use of products and services The Boticário Group did not receive any significant fines resulting from noncompliance with laws and regulations during the period. Women 519 Curitiba 60 São José dos Pinhais 242 Registro 23 Age 1186 Under 30 years old 892 Between 30 and 50 years old 290 Above 50 years old 4 São Paulo 73 Total number of terminations 1320 Other 121 Under 30 years old 872 Age Between 30 and 50 years old 434 Under 30 years old 256 Above 50 years old Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

47 92 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report EN31 INVESTMENT SJP REGISTRO SJP REGISTRO SJP REGISTRO Packaging recycling program R$ 336, R$ 72, R$ 145, Eco efficiency R$ 171, R$ 177, Maintenance R$ 113, R$ 136, R$ 161, Audits, Integrated Management System (IMS), Environmental Education and Monitoring Waste Screening Center (CTR) and Effluent Treatment Plant (WWTP) R$ 42, R$ 3, R$ 123, R$ 36, R$ 76, R$ 5, R$ 1,796,190 R$ 418,416 R$ 988, R$ 449, R$ 836, R$ 187, Life Cycle Assessment R$ 50, R$ 39, TOTAL R$ 2,931, R$ 1,806, R$ 1,590, Variation x 2012: 62,3% x 2011: 84,3% x 2011: 13,6% LA09 TOTAL TTO HOURS BY CATEGORY AVERAGE TTO HOURS PER CATEGORY LA12 VARIABLES PCD s Hearing Impairment 61 Physical Disability 73 Visual Impairment 45 Mental disabilities 6 Rehabilitated 2 Ethnicity White 133 Yellow 4 Brown 29 Not informed 9 Black 12 Indigenous 0 Age Up to 19 years old 5 20 to to to Specialized technician 0 Coordinators 0 Young apprentices 0 Operational 1 Technicians 0 Interns 0 Ethnicity x Occupational Group - Brown Executives 0 Administrates 19 Specialized technician 1 Coordinators 0 Young apprentices 0 Operational 9 Technicians 0 Interns 0 Ethnicity x Occupational Group - Black Executives 0 Administrates 8 Specialized technician 1 Administrative ,17 Administrative 13,99 Over 50 years old 3 Coordinators 0 Apprentices 2.725,67 Apprentices 3,95 Ethnicity x Occupational Group White Executives 0 Young apprentices 0 Operational 3 Coordinators 9.974,75 Coordinators 9,22 Administrative 79 Technicians 0 Interns 2.920,25 Interns 5,70 Specialized technician 12 Coordinators 1 Interns 0 Ethnicity x Occupational Group - Indigenous Executive 3.255,00 Executive 7,71 Young apprentices 0 Executives 0 Specialized technician ,86 Specialized technician 10,87 Operational 38 Technicians 3 Administrative 0 Specialized technician 0 Technicians ,12 Technicians 28,53 Interns 0 Coordinators 0 Operational ,67 Operational 9,26 Ethnicity x Occupational Group - Yellow Executives 0 Young apprentices 0 Operational 0 Trainees 4.089,00 Trainees 10,79 Administrative 3 Technicians Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

48 94 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report Interns 0 Young apprentices 0 Total 5 Coordination 126 Ethnicity x Occupational Group - not Informed Operational 0 VARIABLES Specialized technician 633 Executives 0 Technicians 0 Executive Directors Administrative 126 Administrative 6 Interns 0 Women Technicians 145 Specialized technician 0 PCD s x Occupational Group -Visual Under 30 years old Operational 548 Coordinators 0 Executives 0 Between 30 and 50 years old 2 Young apprentices 45 Young apprentices 0 Administrative 36 Above 50 years old Interns 10 Operational 3 Specialized technician 3 Total 2 Total 1696 Technicians 0 Coordinators 1 Men Age Interns 0 Young apprentices 0 Under 30 years old Under 30 years old 640 PCD s x Occupational Group - Hearing Operational 5 Between 30 and 50 years old 4 Between 30 and 50 years old 1031 Executives 0 Technicians 0 Above 50 years old 1 Above 50 years old 25 Administrative 17 Interns 0 Total 5 Specialized technician 3 PCD s x Occupational Group - Rehabilitated Gender Coordinators 0 Executives 0 Group Young apprentices 0 Administrative 2 Women Operational 41 Specialized technician 0 Executives 39 Technicians 0 Coordinators 0 Coordination 143 Interns 0 Young apprentices 0 Specialized technician 1111 PCD s x Occupational Group - Physical Operational 0 Administrative 299 Executives 0 Technicians 0 Technicians 78 Administrative 54 Interns 0 Operational 638 Specialized technician 8 VARIABLE Young apprentices 56 Coordinators 0 Counselors Interns 49 Young apprentices 0 Women Total 2413 Operational 8 Under 30 years old Age Technicians 3 Between 30 and 50 years old 1 Under 30 years old 927 Interns 0 Above 50 years old Between 30 and 50 years old 1452 PCD s x Occupational Group - Mental Total 1 Above 50 years old 34 Executives 0 Men Total 2413 Administrative 6 Under 30 years old Group 272 Specialized technician 0 Between 30 and 50 years old 1 Men Coordinators 0 Above 50 years old 4 Executive Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

49 96 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report EXTERNAL VERIFICATION BOTICÁRIO GROUP CLARITY The body of the report presents clearly and easily accessible information to stakeholders, avoiding excessive detail that could be considered unnecessary and that would make reading the report more tiresome, as well as impair the obtaining of certain data. Moreover, the report does not abuse of technical terms or any vocabulary that hinders the interpretation and the obtaining of information. Regarding the GRI table, the information is detailed and easy to understand. However, it is suggested that the GRI indicators be referenced throughout the text when the responses to the same also appear in the text. The Boticário Group submitted its Sustainability Report for external verification upon recommendation of the Global Reporting Initiative (GRI) to provide more transparency to the process. The external verification was performed by Prof. Dr. Priscilla Borin Sure, PhD in Management, Environment and Development, Federal University of Lavras, Master of Social-Environmental Management from the University of Wageningen (WUR) in the Netherlands and Professor at Insper, Institute of Education and Research of São Paulo, where she is responsible for module Environmental Management and Corporate Social Responsibility. The verification was performed by taking into account the G4 guidelines, focusing on the final document and the documents submitted in excel with the controls on the reported material indicators. The evaluation process involved content analysis of what the indicator represented and what the Group reported. Moreover, balance, comparability, accuracy, timeliness, clarity, stakeholder participation, sustainability context, materiality and completeness of information were evaluated. The main findings were: Considering the indicators answered in the GRI table, 3 answers to 3 indicators proved to be incomplete, not complying with that demanded by the indicator: G4EN2, G4EN28, G4PR1. These 3 indicators refer to percentages and the responses do not provide this information. Regarding these indicators, if it is not possible to supplement the information, it is suggested that a column for each indicator be included in the index to explain whether it was answered completely or partially. Finally, the report and the GRI table are also available online, which facilitates access and use of the information provided by various stakeholders. ENGAGEMENT OF THE PROCESS OF MATERIALITY DEFINITION n relation to the previous report, a point for improvement in the Group s report and strategy this year, refers to the consultation with external stakeholders to identify and prioritize material issues. BALANCE, ACCURACY AND COMPLETENESS n general, the GRI table presents, by means of qualitative and quantitative indicators, the company s performance in environmental, social and economic dimensions in a detailed manner. In addition to the GRI table with material indicators, the Group will report other GRI indicators, which are not material, but are integrated into its management and strategy, demonstrating the systemic and extended concerns to the context of sustainability, presented in table format. Regarding the indicators of the general standard, the Group published 50 indicators, of which 19 are included in the body of the report and 31 in the GRI 31. For the specific indicators, 30 were used, of which 4 are contained in the document and 26 have been detailed in the GRI table. COMPARABILITY The report enables the reader to analyze the evolution of the group, over the previous year, largely on the published indicators. This helps to visualize the progress on certain indicators. FUTURE CHALLENGES The report presents qualitative and detailed positioning of the Boticário Group in relation to sustainability and the selected limits of action. It is suggested, as a way to further demonstrate this commitment and positioning of the Group, that the goals for each material issue be explained by means of goals that include the definition of values and deadlines for achievement of the results throughout the document. CONCLUSIONS The report and the GRI table comply with the level In Accordance of the G4 Essential Guidelines and demonstrate the Group s commitment to the challenges of sustainability Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13

50 98 Boticário Group Sustainability Report 2013 Boticário Group Sustainability Report EDITORIAL STAFF ANNUAL PUBLICATION OF THE BOTICÁRIO GROUP SUSTAINABILITY REPORT The Boticário Group consists of the business units O Boticário, Eudora, quem disse, berenice?, and The Beauty Box, represented by the group of companies formed by G&K Holding Ltda., Botica Comercial Farmacêutica Ltda., Cálamo Distribuidora de Produtos de Beleza S/A, O Boticário Franchising S/A, Haganá Fomento Mercantil Ltda., KGMA Empreendimentos Imobiliários Ltda., Ladecom - Laboratório de Pesquisa e Desenvolvimento de Cosméticos Ltda., and Interbelle Comércio de Produtos de Beleza Ltda. Based on this structure, the organization publishes its Sustainability Report The document has an annual cycle of consolidation and review and analysis of projects, initiatives and practices aimed at corporate sustainability. This edition covers the period ranging from January 1st 2013 to December 31st of the same year. In 2010, the year of formation of the Boticário Group, and in 2011, the Annual Sustainability Reports referring, respectively, to 2009 and 2010 were published, comprising only the companies G&K Holding Ltda., Botica Comercial Farmacêutica Ltda., Embralog Empresa Brasileira de Logística Ltda., Cálamo Distribuidora de Produtos de Beleza S/A and O Boticário Franchising S/A. During these two periods, the companies represented only the O Boticário business unit. From 2011 on, the remaining units were reflected in the Boticário Group Report. It is important to remember that the Boticário Group Foundation for the Protection of Nature, maintained by our organization, was included in all the reports from the 2009/2010 edition and it is also part of this edition. More information can be found at the Foundation website (www. fundacaogrupoboticario.org.br) PERIOD OF THE PREVIOUS REPORT: From January to December LIMITS OF THE REPORT: The information contained herein embodies the management and performance of the Boticário Group, its business units O Boticário, Eudora, quem disse, berenice?, The Beauty Box, and the Boticário Group Foundation for the Protection of Nature. CHANGES DURING THE PERIOD COVERED: There were no significant changes in comparison with previous years in regards to scope, limits or measurement methods. No restatement of information provided in previous reports, relating to mergers or acquisitions, change of base year or period and the nature of the business were promoted. Changes in measurement methods, owing to the improvement of internal controls, are identified in the responses of the applicable indicators. TEAMS RESPONSIBLE IN THE BOTICÁRIO GROUP: Offices of Sustainability and Corporate Affairs and Press. EDITORIAL STAFF: Ação Integrada IMAGES: Adrian Moss, Chico de Deus, GKG Fotografias Ltda., Guilherme Pupo, Boticário Group files and business units. GRAPHIC DESIGN: Doma Design RUN: copies. REPORTING TEAM : Directors of the Boticário Group, business unit and the Boticário Group Foundation for the Protection of Nature. PUBLICATION DATE: May The 2013 Boticário Group Sustainability Report was prepared in accordance with the GRI-4 Essential version and verified by an independent third party. The full version, which contains the table of indicators has been assessed by Materiality Matters Check, of GRI and is available at the website by accessing the Sustainability menu. Suggestions, criticisms and compliments may be sent to the sustentabilidade@grupoboticario.com.br Relatório de Sustentabilidade 2013 INGLES.indd /08/14 18:13