REPORT

Glossary

APP: Permanent Preservation Area. As set forth by Law No. 12,651/2012, it means a protected area, covered or not by native vegetation, with the environmental role of preserving water resources, the landscape, geological stability and biodiversity, facilitating fauna and flora gene flow, protect the soil and ensure the well-being of human populations.

BEKP: Bleached Eucalyptus Kraft Pulp.   Used as raw material for several paper types.

BOD: Biochemical Oxygen Demand: standard test, performed at a constant temperature and during an incubation period of five days. It is measured by the difference of the amount of Dissolved Oxygen (DO) found before and after the incubation period.

Brazilian National Solid Waste Policy: brings together the set of principles, objectives, instruments, guidelines, goals and actions adopted by the Federal Government, either independently or in cooperation with states, the Federal District, cities or individuals, to promote integrated and environmentally sound solid waste management. 

CDP: An international non-profit organization that analyzes and recognizes the efforts of companies worldwide to manage the environmental impacts of their activities.

CERFLOR: Brazilian Forestry Certification Program. The CERFLOR forestry management certification attests that the enterprise conducts its forest management in accordance with environmental, social and economic requirements. Standards were developed within the scope of the Brazilian Association of Technical Standards (ABNT) and the application of the Certificate is managed by the National Metrology Institute (INMETRO).

COD: Chemical Oxygen Demand: an indispensable parameter for studies on sanitary sewage and industrial effluents. It assesses the amount of dissolved oxygen (DO) consumed in an acid medium that leads to the degradation of organic matter.

Common Shares (ON): shares that ensure whoever holds them the right to vote on matters during General Shareholders’ Meetings, provided all legal restrictions are complied.

CONAMA: National Environment Council. Advisory and deliberative body of the National Environment System composed of federal, state and municipal bodies, as well as business sector and civil society representatives. Among its duties is the definition of norms and criteria for the licensing of activities that are effectively or potentially polluting and criteria and standards related to the control and maintenance of the quality of the environment.

COSO: The Commitee of Sponsoring Organizations. Non-profit organization dedicated to improving financial reporting through ethics, effectiveness of internal controls and corporate governance.

Due Diligence:   Process of searching for information about another company to assess purchase risks or other transactions. The assessment includes financial, accounting, tax, labor, environmental, legal, intellectual property and even technological aspects.

EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization is a financial indicator that represents a company’s operating cash generation, disregarding financial and tax impacts. It corresponds to the net income before income and social contribution taxes, depreciation and amortization expenses and the financial result. 

ECO-92: United Nations Conference on Environment and Development, held from June 3 to 14, 1992, in the city of Rio de Janeiro, Brazil. The event took stock of the existing problems and the progress achieved and produced documents that are references for environmental discussions.

Energy intensity: the final energy intensity is an economy efficiency indicator that shows the relationship between the final energy consumed and the production of goods. A high energy intensity indicates low efficiency in converting energy into wealth.

EPCI: Environmental Paper Company Index 2019. Index created by the WWF (World Wide Fund for Nature), which assess over 50 indicators of environmental policies, commitments and environmental performance of companies in the production of paper, fabric, packaging and cellulose products.

ESG: Environmental, Social and Governance. Priority indicators for Klabin, in line with the Company’s growth plan, and establishing the values it committed to delivering to society.

FSC®: The Forest Stewardship Council® (FSC® ) is a global, not-for-profit organization dedicated to the promotion of responsible forest management worldwide. FSC defines standards based on agreed principles for responsible forest stewardship that are supported by environmental, social, and economic stakeholders.

Fossil fuels: non renewable resources whose burning provides the production of energy. They are formed by processes of organic material decomposition over thousands or millions of years. Examples of fossil fuels include oil, mineral coal and natural gas, largely responsible for impacts on the environment due to greenhouse gas emissions.

GHG: Greenhouse gases are those that absorb part of the sun’s rays and redistribute them in the form of radiation in the atmosphere, heating the planet in a phenomenon called the greenhouse effect.  Carbon Dioxide (CO2); Methane (CH4); hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs) used in aerosols and refrigerators are examples.

Global Compact: initiative promoted by the United Nations (UN) to engage companies and organizations in the adoption of 10 universal principles in the fields of Human Rights, Labor, Environment and Anticorruption and to develop actions that contribute to addressing society’s challenges. 

Green bonds: so-called green bonds are used to raise funds for the purpose of implementing or refinancing projects and purchasing assets capable of generating environmental benefits. When acquiring these bonds, therefore, investors are lending money for a particular company to develop sustainable projects. The investor receives the return based on an interest rate defined at the time of issuance.

GRI Standards: standards developed by the international and non-profit organization GRI (Global Reporting Initiative) to guide companies, governments and other organizations to understand and communicate the impact of their businesses on critical sustainability topics, such as climate change, human rights and anti-corruption. In the Essential version, the information necessary to understand the nature of the organization, its material topics and impacts is disclosed. In the Comprehensive version, companies must disclose in a broader manner their impacts and all specific disclosure items for each material topic covered by the Standards.

IFC: International Finance Corporation.  Global development institution focused on the private sector in developing countries, a member of the World Bank Group.

Industry 4.0: also referred to as the fourth wave of the industrial revolution, in which digital technologies and the Internet of Things are applied to manufacturing. In such scenario, all machines, for instance, are digitally interconnected within a single system, allowing real-time monitoring of processes for a more appropriate decision making.  

IPCC: Intergovernmental Panel on Climate Change.  Created by the United Nations Environment Program (UN Environment) and the World Meteorological Organization (WMO), it aims to provide policy makers with regular scientific assessments of climate change, its implications and possible future risks, as well as propose adaptation and mitigation options. 

ISE: the Corporate Sustainability Index is a tool for the comparative assessment of the performance of companies listed on the Stock Exchange (B3) from the corporate sustainability perspective, based on economic efficiency, environmental balance, social justice and corporate governance. It also broadens the understanding on companies and groups committed to sustainability, distinguishing them in terms of quality, level of commitment to sustainable development, equity, transparency and accountability, nature of the product, in addition to business performance in the economic, financial, social, environmental and climate change dimensions.

ISO 14001: standard that specifies the requirements of Environmental Management Systems and allows organizations to develop a structure to protect the environment and quickly respond to changes in environmental conditions. It takes into account environmental aspects influenced by the organization and others that can be controlled by it.

ISO 31000: international standard that provides general guidelines for managing risks in any activities, including decision making at all levels.

ISO 50001:2018: standard that specifies the requirements for establishing, implementing, maintaining and improving energy management systems (EMS). The intended result is to allow organizations to follow a systematic approach to achieve continuous improvement in energy performance and the EMS.

KSDGs: short-, medium- and long term objectives set forth by Klabin to complement the company’s growth strategy, in line with UN’s 17 UN Sustainable Development Goals.

Lignin: complex organic polymer that binds cellulosic fibers, increasing stiffness of the plant cell wall, constituting, together with cellulose, most of the wood in trees and shrubs.

LPG: Liquefied Petroleum Gas. It is usually formed by the mixture of propane and butane gases and is widely used for cooking.

Material topics: topics that reflect the most significant economic, environmental or social impacts of the organization; or that substantially influence stakeholder assessments or decisions.

MFC: acronym for Microfibrilated Cellulose, a natural and renewable, uniform and highly crystalline raw material obtained by the mechanical and/or chemo-mechanical process of cellulose, which generates a disintegration of the cell wall of the wood and modifies its structural and surface properties, as well as its size. Used in papers, paints, cosmetics and fabrics.

Net indebtedness: difference between how much the company owes (loans and financing) and how much it currently has available for settlement (cash and cash equivalents).

NOx: Nitrogen oxides. These are hazardous gases to health and the environment. They are mainly formed from the burning of fossil fuels. Nitrogen dioxide (NO2) and Nitric Oxide (NO) are some examples.

Packaging School:   American post-secondary education institution that aims to bridge the gaps between academia and the industry through partnerships with companies, specialists and associations.

PCD: People with Disabilities.

Preferred Shares (PN): preferred shareholders have a greater claim to values. They have priority over common shareholders of the same company when it comes to receiving dividends and other compensation. At Klabin, those who own them can vote in the case of Company transformation, incorporation, merger or spin-off, approval of contracts between the Company and its controller or other entities, as long as they are matters regarding the General Meeting, valuation of assets that apply for capital increase and choice of a specialized firm to determine the Company’s economic value.

RAC: Acronym for Critical Activity Requirements. These include a group of requirements for the performance of activities that may poise a risk an employee’s physical integrity and health. The purpose is to preserve people’s lives. 

RL: Legal Reserve. Percentage portion of the property where native vegetation must be maintained, restricted to use. Its purpose is to ensure the sustainable economic use of the natural resources in rural properties, assist in the conservation and rehabilitation of ecological processes and promote the conservation of biodiversity, as well as the shelter and protection of wild fauna and native flora. 

Roadmap: visual and descriptive methodology that indicates what a specific product or project will look like in each period of its development. 

ROIC: acronym for Return on Invested Capital, which indicates how much the company generates in relation to all invested capital (shareholder capital plus third-party capital).

RPPN: Natural Heritage Private Reserve is a conservation unit (UC) private domain category, intended to conserve biological diversity. The creation of a UC does not affect the ownership of the property. In addition to contributing to the expansion of protected areas in the country, the Reserves help to protect the biodiversity of Brazilian biomes.

SBT: Science Based Target.  The initiative establishes methodologies to help companies design an emission reduction target in line with climate science and sustainable economic development. It is a collaboration between CDP, the United Nations Global Compact, the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). 

SDGs: Sustainable Development Goals. Listed by the United Nations (UN), the objectives are a universal call for action against poverty, protection of the planet and to ensure that all people have peace and prosperity. The 17 goals provide clear guidelines and targets for all countries to adopt in accordance with their environmental priorities and challenges across the planet. Reaching them requires the establishment of partnerships among governments, the private sector, civil society and ordinary citizens to ensure that we leave a better planet for future generations. Learn more at: https://www.br.undp.org/content/brazil/pt/home/sustainable-development-goals.html

SPI: Social Progress Index. Measures quality of life items in a given territory, independently of its economic development. Learn more about the indicator at www.progressosocial.org.br.

SOx: Sulfur oxides. Gases can react with other compounds present in the atmosphere, forming small particles that are harmful to human health. These substances are also found in acid rain. They are generated from burning fuel oil or coal, for example.

Sponsor: person or group that provides the resources and support for the project, program or portfolio and contributes for the positive results.

SPOTT Timber & Pulp: English international organization that assesses the best environmental, social and corporate governance practices of Companies in the wood and pulp industry.

Stakeholders: any individual or organization that impacts or is in any way impacted by the actions of a particular company. Klabin considers the following groups of stakeholders: employees, customers, suppliers, regulatory bodies, certifying agencies, public entities, educational institutions, the press, labor unions, civil entities, social organizations and communities surrounding its operations.

Team Building: set of techniques and activities designed to strengthen ties between members of a group, for the purpose of transforming it into a cohesive, collaborative team with common goals that shares information and knowledge. 

Tons of CO2 equivalent (tCO2eq): unit of measure used to compare the emissions of various greenhouse gases based on their global warming potential. For example, methane gas global warming potential is 21 times greater than the potential of carbon dioxide (CO2). So we say that methane CO2 equivalent equals 21.

Turnover: employee turnover rate in an organization over a period of time.

Units: assets comprising more than one class of securities traded jointly. These are Klabin’s most liquid assets in the stock market. Each of them is composed of one common share and four preferred shares.

VOC: Volatile organic compounds. Chemical components present in different types of synthetic or natural materials. They have a high vapor pressure, which causes them to change into gas upon contact with the atmosphere.

Water body: generic designation for any water source; watercourse, river stretch, artificial or natural reservoir, lake, pond or underground aquifer.