Sustainability

Value chain

In addition to complying with legal requirements, one of Klabin’s strategic points of supply is the proximity of our forests to the industrial units: an average radius of 71 km, since the costs of wood transport logistics are key to business competitiveness.

Most of the wood used to supply our plants comes from our own plantations. In addition, we purchase part of the production from members of the Programa de Fomento Florestal or from independent producers with whom we maintain contracts that cover criteria such as quality, delivery timeliness, compliance with the applicable laws and the adoption of measures to protect the environment, among others.

Learn more about relationship and development initiatives with rural producers in Local Development.

Technology in favor of forestry operations

 

We started using satellites to monitor forests in 2019. They facilitate the monitoring of forest growth and the identification of adverse situations, such as the occurrence of pests and diseases, and allow us to act in mitigating of risks.

Since 2014, we have been using drones in our operations to capture aerial images in real time, helping to prevent pests, diseases and possible fires. . We were granted an authorization from the National Civil Aviation Agency (Anac) in January 2020 to operate the equipment without the need for constant visual contact with a ground crew, allowing flights up to 120 meters.

Supply chain

 

GRI 103-1, 103-2, 103-3, 407-1, 408-1, 409-1

The hiring of suppliers at Klabin follows a number of criteria to ensure that legal and sustainability aspects are extended to the Company’s value chain.

In addition to requiring minimum levels of quality and timely delivery, tax compliance, compliance with applicable labor and environmental legislation, and standards and principles related to human rights are non-negotiable conditions.

Wood Suppliers

 

The certification, FSC® (FSC-C022516) – Forest Stewardship Council® has had since 1998, requires solid and transparent raw material tracking processes to ensure that there are no violations of environmental, labor and human rights legislation across the supply chain If an audit process identifies cases of non-compliance, supply is suspended until the issue is resolved and appropriate measures are taken.

The forestry units follow the Controlled Wood Program, in which suppliers are assessed by the Forestry area based on specific methodology related to the FSC® chain of custody certification. ®. In 2019, 650 visits were made to certified and uncertified wood suppliers in Paraná, and 501 visits were made in Santa Catarina.

We have maintained the Small Producers’ Forest Certification Program in Paraná, since 2015, and in Santa Catarina, since 2017, contributing to generate greater added value to the wood traded by these partners, through the adoption of best forest management practices In 2019, we attained the mark of 126,000 FSC ®certified hectares. ®. Of this total, 102,000 hectares in 42 cities – mostly in Paraná – are owned by producers that supply to Klabin’s unit in Paraná; another 24,000 hectares in over 15 cities belong to producers from Santa Catarina.

Klabin is also a signatory to the Global Compact complies with the provisions of the Universal Declaration of Human Rights, the guidelines of the Guiding Principles for Business on Human Rights and the declaration of the International Labor Organization (ILO). Thus, the safeguard of human rights in the supply chain is reinforced. In 2019, no real or potential risks of violation of were identified in Klabin’s or suppliers’ operations.

Express guidelines for purchasing practices

Code of Conduct: covers the relationship and behavior patterns expected in the bargaining processes

Code of Conduct: covers the relationship and behavior patterns expected in the bargaining processes

General Supply Conditions: disclosure of the requirements applicable to all suppliers

General Supply Conditions: disclosure of the requirements applicable to all suppliers

Anticorruption Manual: guides the fight against corruption

Anticorruption Manual: guides the fight against corruption

Social and Environmental Responsibility Policy for the Hiring of Suppliers

Social and Environmental Responsibility Policy for the Hiring of Suppliers

Learn more about the documents at this website.

Profile of our suppliers

 

GRI 102-9, 204-1

7,000

active suppliers,

spread throughout Brazil, integrate Klabin’s supply chain.

472

Of this total,

are considered as critical supplier in the Ecovadis program,  of which 3,4% were classified as sustainability high risk (see bellow).

Products and services provided.

o forestry inputs, commodities and chemical specialties for pulp and paper production;

o fuels, electricity and packaging for finished products;

o provision of logistics services, materials management, storage and rental of forklifts;

o supply of auxiliary materials for production;

o outfits e Personal Protective Equipment (PPE);

o bearings and pumps;

o provision of cleaning, security and maintenance services, among other tasks;

Percentage of budget spent with local suppliers

GRI-204-1

  2017 2018 2019
Amazonas 77.80% 38.70% 71.40%
Bahia 28.30% 56.60% 37.80%
Minas Gerais 39.20% 45.90% 55.50%
Paraná 79.50% 65.00% 66.80%
Pernambuco 48.70% 50.60% 37.40%
Santa Catarina 49.80% 56.00% 58.30%
São Paulo 85.00% 87.60% 78.10%
Rio Grande do Sul 14.50% 14.70% 60.00%
Average 60.90% 64.30% 64.70%
60,90% 64,30% 64,70%

Criticality and Sustainability Matrix

 

Since 2013, critical suppliers in the industrial area are assessed through a criticality matrix which enables the identification of the risks they pose to the Company, both financially and regarding sustainability.

The impacts identified by the matrix are related to ecoefficiency initiatives, greenhouse gas inventories (GHG), operation sites, water consumption and effluent generation, labor relations, compliance with legislation, training on environmental standards and Occupational Health and Safety (OHS), control of injury rates, diseases, absenteeism, deaths, anti-discrimination and corruption prevention practices, legal and labor compliance, incidence of slave labor in the supply region, environmental licensing, type and hazard of supplied material, type of supplier and participation in discussions with communities for local development.

Although social and environmental criteria are not fundamental for the selection of new suppliers, failure to fully meet such criteria can be an impediment to approval.

As a signatory to the National Pact for the Eradication of Slave Labor, Klabin is committed to crossing its base of active and inactive Suppliers, multiple times a year, with the entries of the Employers’ Register that have submitted workers to slave-like labor (popularly known as the “Dirty List of Slave Labor”).

Thus, in the event of any mention, the following actions are taken by the Company: identification of the supplier and service provided (date, location, among other data) and formal notification to the party demanding clarification and declaration on the corrective measures implemented (and improvement suggestions, if necessary). From this stage, it is evaluated whether the supplier will be monitored or if the service will be interrupted. In 2019, there were no cases of suppliers in Klabin’s chain mentioned in such list.

In 2019, 147 suppliers that meet the criteria of the criticality matrix were hired based on social and environmental criteria. Over the period, there were no reports of complaints related to negative social and environmental impacts by suppliers

Sustainable practices in the supply chain

 

GRI 103-1, 103-2, 103-3, 308-2, 414-2

We took an important step in improving supply chain management in 2019 with the adoption of the EcoVadis methodology for supplier assessment, aimed at classifying sustainability in several aspects: financial, human rights, labor and social issues.

Based on a criticality screening criterion encompassing representativeness, size and activity, 472 companies from our portfolio (accounting for 54% of the financial transactions in the supply chain) were selected to participate in the assessment, which considers questions grouped into four topics: Environment, Labor and Human Rights, Ethics and Sustainable Procurement.

Sorted into three groups, 110 companies were selected for the first phase in 2019. Adherence reached 77% (89 companies), a result considered above average by EcoVadis itself. Participation is voluntary and requires an investment by suppliers. For this reason, Klabin financed the participation of smaller companies.

The process involved prior communication, preparation and, after the assessment, joint action plans were drawn up for the critical issues identified, whose implementation is monitored by Klabin, with indicators linked to the purchasing managers’ goals. A new evaluation cycle has already begun in 2020.

Strategic vision

 

In order to achieve a more strategic and integrated approach to business, the Procurement area underwent a reorganization process in 2019, which involved restructuring the departments and the management model, allowing more speed and operational efficiency, necessary for Klabin’s business growth.

A matrix management model, in which purchasing managers were responsible for certain accounts or processes across the Company, gave way to a vertical structure, with procurement “towers” focused on Klabin’s businesses. . Each tower has specialized teams responsible for specific purchases for each business, strategic purchases, material receipt and inventory. The new model brings the area closer to the units and adds further technical expertise to the process.

Closer to suppliers

 

Part of the work to reorganize the Procurement area sought to improve Klabin’s relationship with its suppliers. The matter was at the core of management focus in 2019, with the promotion of regional meetings, bringing together about 150 suppliers each. At the end of each event, the team was available to talk to the participants and also to approve new suppliers.

Another opportunity to further develop the contact with suppliers was the first supplier award event. A pilot event was carried out with national transport companies, bringing together over 30 suppliers, classified according to the assessment of service and safety levels, among others. Those who received the highest scores were awarded. O programa deve ser estendido a outros setores de atuação.

Logistics

To distribute our production volumes for export, we use road, rail and sea transportation. Through a 23.5 km long railway branch, the Puma Unit, in Paraná, connects to the Paraná Central railroad, covering 441 km until it reaches the Pulp and Paper Logistics Unit, in Paranaguá (PR), where over 900,000 tons of pulp are handled annually . The 5-km route between the Logistics Unit and the Port of Paranaguá is traveled by trucks.

 

Seeking new and more efficient technologies in the transport of wood with reduced consumption of fossil fuels, the use of triple semi-trailer trucks was adopted. This is a new modality within our operations in Paraná, which, , between July and December 2019, was adopted for the transport of 10% of all wood to supply the Monte Alegre Unit.