Talent acquisition, development and retention—alongside Employee health, well-being, and safety—are strategic for the sustainability and long-term success of the business. These topics directly affect people’s experience, team performance, and Bracell’s ability to innovate and grow sustainably. For this reason, they are considered material to our approach to sustainability management (learn more about our double materiality assessment in GRI 3-2 List of material topics).

As a growing company, we view human capital as essential for achieving our Bracell 2030 targets and building a safe, healthy, and inclusive workplace. Internally, we have policies, processes, and standard operating procedures that guide our people management practices.

In 2025, we prioritized strengthening our Human Resources  department and standardizing talent acquisition, development and retention practices across sites, while respecting the local conditions of each business (learn more about our training and development initiatives under GRI 404 – Training and education). To support this effort, we implemented a unified system that integrates these processes, enhances cross-site synergies, and creates better conditions for sharing best practices.

Another highlight of the year was the first-time participation of our Northeast Paper operations in the RGE Group Global Engagement Survey, which provides a comprehensive view of organizational climate. This survey is a key tool in our people management approach. Alongside performance reviews, it helps to strengthen our T.O.P.I.C.C. culture and reinforces values such as Ownership and Complementary Teams (see more under GRI 2-6).

In talent acquisition, we carried out training initiatives for communities surrounding our operations. In 2025, we provided training for mechanics, drivers, harvesting operators and nursery workers in São Paulo. A total of 311 people attended training. In Bahia, in partnership with the National Industrial Training Service (SENAI) and the National Service for Rural Training (SENAR), we trained 37 students.

Germinar program

This new program is focused on attracting young researchers. Through Germinar, we have expanded engagement with local universities in the regions where we operate, aiming to encourage academic interest in Bracell’s fields of activity.

Diversity, equity and inclusion remain central to our talent development practices.

Bracell’s training and development strategy includes leadership development programs for all management levels. We also run initiatives designed to prepare operational employees with leadership potential for future management roles. In addition, our Cultivando Potenciais program for non-leadership employees has 50% of available spots reserved for women. This program includes a dedicated development track for women, focused on advancing gender equity at Bracell.

We ended 2025 with women representing 27.7% of leadership positions. This corresponds to 113 women out of 408 leaders. 

This group includes 69 coordinators, 38 managers and 6x senior managers. 

Note: the women in leadership target in our Bracell 2030 roadmap is based on the number of female leaders working directly in our pulp operations. The baseline for this target is 2020. Bracell Papéis operations began in 2023.

 Underrepresented groups

As part of our Diversity & Inclusion (D&I) targets, we also aim to foster a more inclusive work environment for our minority groups, with a target of achieving 90% positive feedback from these employees on respect and equity in the workplace by 2030.

In 2025, we made meaningful progress in awareness and engagement initiatives. We launched anti-racism and anti-ableism learning tracks for all employees.

We also enhanced the governance of these groups’ initiatives through structured action plans designed to make our organization more inclusive. We expanded existing initiatives, such as transforming Diversity and Inclusion Week into Diversity and Inclusion Month, broadening the discussion to cover themes relevant to underrepresented groups.

With key performance indicators defined through our 2024 Diversity & Inclusion Census, we began implementing the first structured initiatives for underrepresented groups across all operations—in Bahia, these initiatives have been in place since 2022.

Bracell’s diversity and inclusion practices (read more under GRI 405-1 Diversity of governance bodies and employees) include measurable targets, a Diversity & Inclusion Committee, and affinity groups focused on gender, race, people with disabilities, LGBTQIAPN+, and generations—the latter launched in 2024 in our Bahia operations. We are a signatory to the Women’s Empowerment Principles (WEPs), a UN Global Compact and UN Women initiative providing guidance on promoting gender equality and women’s empowerment in the workplace, marketplace, and community. Bracell is also actively involved in industry organizations aligned with this agenda.

Afro Fashion Day

For the third consecutive year, we participated in Afro Fashion Day, the largest event devoted to increasing visibility of black fashion in Brazil. At the Bracell-designed spaces, guests created looks using scarves produced by women from the Bracell-supported social project Fábrica de Fardamentos in Bahia. We also showcased a men’s outfit made with viscose fabric, a material derived from the dissolving pulp produced by Bracell.

Diversity within Bracell 2030

In 2025, following a review of the Diversity and Inclusion Census results, we expanded our action plan to further build an inclusive workplace for underrepresented groups—one of the commitments under our Bracell 2030 roadmap. During the year, we also reached 27.7% women in leadership positions, totaling 113 female leaders serving as coordinators, managers and senior managers.

Training & development

Bracell offers employees a corporate learning program with a structured training matrix that builds both soft and hard skills. Through our knowledge hub—the Bracell Learning Institute—we offer development tracks tailored to our forestry, mill, logistics, and supporting operations.

Our training programs are a key differentiator in attracting and retaining talent. Training initiatives are directly aligned with Bracell’s business challenges and support employees’ personal and professional growth, while also reflecting our T.O.P.I.C.C values (read more under GRI 2-6 About Bracell).

Training is offered both in person and online. Learn more about each initiative under GRI 404-2 – Programs for upgrading employee skills and transition assistance programs.

In 2025, we launched a new program, called Geração Futuro, in partnership with SENAI. Primarily designed for the children of our employees, the program provides technical education in the pulp and paper industry, along with scholarships to study English (read more under GRI 404-2).

During the year, we also expanded our Colheita de Talentos program to the municipalities of Garças and Marília, in the state of São Paulo, located near our forestry operations, in partnership with Senai. Originally launched in Bahia in 2021, the initiative has already trained 96 Harvester and Forwarder machine operators for forest operations across eight cohorts. In São Paulo, 77 new operators graduated and 20 were hired by Bracell. 

Impacts and risks

Bracell conducts comprehensive assessments of the potential and actual impacts related to the material topics in our materiality matrix. These assessments address both positive and negative aspects across the economy, environment, and people—including impacts on human rights.

For the topic Talent acquisition, development and retention, the aspects shown in the table below were identified. For each aspect, we work to prevent impacts from occurring and also have measures in place to reduce or mitigate impacts should they occur.

Potential impacts	Actual impacts
No negative potential impacts were identified.	Work-life imbalance: in remote operations located far from urban centers, absenteeism may increase as a result of limitations in chartered transportation, as well as dissatisfaction related to commuting time, overtime and the lack of flexible work arrangements.
	Decline in employee engagement levels: resulting from a potential reduction in favorability scores identified in the engagement survey.
	Higher turnover: due to the rising appeal of other jobs in the market offering better benefits, flexibility, and pay.

Bracell systematically identifies and classifies climate-related risks and opportunities. These are categorized as physical or regulatory, and their financial implications for the business are determined. We also detail the methods used to manage each risk.

Costs associated with climate change, including adaptation and mitigation initiatives, are evaluated internally as part of our enterprise risk management and strategic planning processes. While exact figures are not disclosed due to strategic confidentiality, these initiatives are prioritized within our budget and monitored through established risk and performance management frameworks, including ERM and the Bracell 2030 roadmap.

Source of Risk	Risk	Scope
Physical Risks and Opportunities	Extreme weather events (floods, windstorms, and forest fires)	These may result in significant losses of forest assets, production disruptions, raw material supply disruptions, increased insurance costs, and additional operational risks. Our approach to managing these risks includes weather-resistant building and industrial facility designs, effective industrial fire suppression systems, forest fire response plans, and insurance coverage for facilities and equipment.
Physical Risks and Opportunities	Changes in rainfall patterns	These may lead to reduced water availability, increased costs for sourcing and treatment, and limitations on production capacity. Our approach to managing these risks includes strict monitoring of water consumption in line with water permits, setting reduction targets and performance indicators, and implementing water recycling projects and renewable energy solutions to improve operational efficiency.
Physical Risks and Opportunities	Water shortage	This poses both physical and regulatory risks, directly affecting groundwater usage permits and potentially limiting production and future expansion. Our approach to managing these risks includes continuous monitoring of water consumption and setting clear performance indicators and targets for consumption reduction, aiming to optimize processes and reduce losses.
Physical Risks and Opportunities	Strong winds and heavy rainfall	These events can cause serious damage to assets, limiting or halting production operations. We manage these risks by designing structures to withstand severe weather and maintaining emergency and business continuity plans.
Regulatory Risk and Opportunity	More stringent legal and regulatory climate-related requirements	These requirements could result in additional compliance costs. Our approach to managing these risks involves close monitoring and control of water consumption and permits, carrying out research and projects around water reduction and reuse in industrial processes, and expanding renewable energy and use of electric equipment (such as electric forklifts) to significantly reduce fossil fuel consumption.

Risk management process

Our Corporate Risk Management and Business Continuity Policy provides guidelines on identifying, assessing, addressing, and monitoring corporate risks through a structured Enterprise Risk Management (ERM) process. This process follows international standards such as ISO 31000, BSI 31100, and COSO ERM, covering operational, social, environmental, governance, technological, strategic, political, and financial risks.

Climate-related risks with financial impacts are categorized and classified in accordance with Bracell’s Risk Classification Matrix.

The ERM framework was fully implemented across the 18 departments reported in the previous reporting cycle. In 2025, the scope was expanded to include 27 additional departments, covering the Bracell São Paulo, Bracell Bahia, and our Southeast and Northeast Paper operations. This expansion included pulp and tissue operations, as well as forestry, logistics and corporate functions. During the reporting period, implementation was completed in the pulp, forestry and logistics operations of Bracell Bahia, and in the pulp operations of Bracell São Paulo. Implementation remains ongoing in corporate functions, forestry and logistics operations at Bracell São Paulo, and the tissue operations of paper business units.

Methods Used to Manage Climate Change Risks or Opportunities

In our operations, we adopt management practices and invest in technologies aimed at preventing and mitigating climate change impacts, such as carbon capture and storage, fossil fuel replacement, the use of renewable and low-carbon energy, energy efficiency improvements, renewable energy certificates, among other methods (see GRI 3-3 Management of Material Topics  – Climate Resilience).

Below are some of the key initiatives in Bracell’s Climate Action agenda, spanning mitigation, energy efficiency, technological innovation, and building internal capabilities.

Energy self-sufficiency – We generate our own renewable electricity at Lençóis Paulista (São Paulo State), with 150 to 180 MW of surplus power supplied to Brazil’s national grid.

Solar energy – A 7.21 MW solar array (10,836 panels) at our Tissue plant supplies approximately 20% of the site’s electricity requirement.

Fuel transition – Replacing fossil fuels with renewable alternatives, including the use of eucalyptus biomass-derived syngas and the replacement of fuel oil with natural gas in lime kilns.

Replacement of fuel oil with natural gas in the lime kiln – using advanced engineering technologies and solutions, we have launched a project to replace 1B oil (a petroleum-derived fuel oil) with natural gas in the lime kiln of the site’s older production line in Lençóis Paulista (SP).

Electrification of material handling and logistics – Electric forklifts and trucks powered by our own renewable energy are now in operation. In 2025, this initiative avoided 16 tCO₂e in emissions.

Carbon and water flux research – Bracell is participating in the Eucflux-IPEF program, and has installed flux towers in eucalyptus plantations and native vegetation areas to monitor carbon and water dynamics.

GHG Inventory and GHG Protocol – Scope 1, 2 and 3 emissions are audited and publicly reported via the Brazilian GHG Protocol Program.

Bracell offers employees a defined contribution benefit plan, which is based on monthly contributions made equally by both employee and employer. This is a voluntary plan with nationwide coverage. The purpose of the benefit is to encourage employees to build financial reserves throughout their careers, providing greater financial security in retirement and supplementing the public pension system.

Under the current model, no liabilities are generated, as monthly contributions are immediately allocated to a dedicated fund for each enrolled participant. Our strategy fully ensures coverage of the plan through monthly deposits matching employee contributions. Because it is a defined contribution structure, the organization does not require or set a vesting period, as coverage is already guaranteed under the current model.

Pension plan contribution policies vary by operation:

• São Paulo (Pulp) and Southeast Paper operations Employees contribute 5.64%, calculated in accordance with the current salary policy, and the company matches 100% of the amount contributed by the employee.
• Bahia Pulp: Employees contribute between 1% and 9% of their salary. The company matches at least 100% of the employee’s contribution and may contribute up to 200%, depending on length of service.
• Northeast Paper Operations: At present, this benefit is not offered in this operation. 

For confidentiality reasons, Bracell does not disclose financial information.