#1IHARA Agriculture is our life SUSTAINABILITY REPORT 2020#204 MESSAGE FROM THE CEO 06 ABOUT IHARA 18 CORPORATE GOVERNANCE 22 POSITIONING AGAINST THE COVID-19 PANDEMIC 26 IHARA PORTFOLIO ECONOMIC AND 32 FINANCIAL PERFORMANCE 36 ENVIRONMENTAL PERFORMANCE 44 SOCIAL PERFORMANCE 52 ABOUT THE REPORT 56 GRI CONTENT SUMMARY 62 CREDITS#3MESSAGE FROM THE CEO GRI 102-14, GRI 102-15 Dear all, We hereby share with you the 12th IHARA Sustainability Report, where we will be show- ing several innovations and accomplishments achieved in 2020. Particularly, due to the pandemic scenario, this was a year with many challenges and bar- riers, but again, always united by the noble mission of contributing to the progress and competitiveness of the Brazilian Agriculture, we continue to bring our solutions to farmers. Last year, the Real experienced a severe de- valuation compared to the Dollar, in addition to the highly volatile exchange market, mak- ing it even more essential to manage financial resources in order to safeguard our assets. Despite this great challenge, our company showed a growth in sales, which allowed us to move forward in our market position. Undoubtedly, much of this growth was due to the various investments in innovation, infra- structure and the development of our people. As part of these investments, we inaugurated two new research centers, one in Mato Gros- so and another one in Paraná, in addition to a new Distribution Center in Mato Grosso. Moreover, we started the packaging produc- tion in our own plant, an important milestone that will bring more competitiveness to our products. We also had significant improvement invest- ments in formulation plants and implement- ed the SAP system, to further enhance our management, control and productivity. Aligned with our vocation as a research and development company, we have brought in- novations to the market again, by launch- ing modern products that meet the growing needs of tropical agriculture for a more effi- cient control of pests, diseases and resistant weeds. We launched 9 new products, with emphasis on the launch of the Herbicides of the Future product family, also consolidat- ing the most promising and modern family of new insecticides, launched in 2019. From an environmental point of view, we remain committed to improving our indica- tors, seeking to reduce: (i) water consump- tion, with an 18% reduction ratio compared to 2019; (ii) energy consumption, with a 5% re- duction ratio compared to 2019; and, (iii) the destination of waste, with an 18% reduction ratio compared to 2019. In relation to our employees, even in such a delicate year, where several companies went bankrupt or had to reduce their staff, we invest- ed in hiring, creating vacancies and increasing our staff to more than 800 employees. With so many investments and innovations, we were once again recognized with several important industry awards. Again, we were 1st place in the Agricultural Defensive cat- egory in the Best of Agribusiness 2020 by the Globo Rural Magazine; 1st place in the Agribusiness-Inputs category in The Best of Dinheiro 2020 by the Isto É Dinheiro maga- zine; we figured among the companies rec- ognized as Amazing Places to Work by the Administration Institute Foundation (FIA) and we were also recognized for our focus and commitment towards good governance and compliance practices, with the renewal of the More Integrity Seal 2020, of the Ministry of Agriculture. We are sure that with all these innovations, investments and achievements, we have been accredited for a NEW AGE at IHARA, where we will be even stronger and better prepared to continue growing and generating value to farmers. After all, they are the reason why we exist. Enjoy your reading 4 JÚLIO BORGES PRESIDENT OF THE BOARD OF DIRECTORS AT IHARA JOSÉ GONÇALVES DO AMARAL PRESIDENT AT IHARA SUSTAINABILITY REPORT IHARA 2019 5#4ABOUT IHARA We have a reason to exist. Our Beliefs and Values have high dimensions: Our Planet, Our Country, Our Company and Our People, which express our desire to serve our customers with excellence. ORDEM E PR багаддо рROGRESSO IHARA#5IHARA'S MISSION, VISION, BELIEFS AND VALUES GRI 102-16 MISSION Contributing to the progress and competitiveness of Brazilian agriculture. We will have the maximum responsibility in the way of treating them. Feeding the world while preserving these goods is true sustainability. VISION With creativity and a pioneering spirit, we will make Brazil the largest agricultural country in the world. Always united and striving for the same goals, let us make IHARA a first-rate company. With confidence and cooperation, let us help each oth- er to improve and make everyone's life stable. BELIEFS AND VALUES¹ Our beliefs and values sustain our strategies and deci- sions, guiding our behavior. We are attentive and open to changes, and we will make the necessary changes, always with the noblest senses. We have a reason to exist. Our Beliefs and Values have high dimensions: Our Planet, Our Country, Our Company and Our People, which express our desire to serve our customers with excellence. OUR PLANET The world will increasingly need food. We will always respect natural resources in the search for productiv- ity. Everything is interconnected: Earth, Water and Air are the greatest assets of humanity. OUR COUNTRY We are "owners" of this country. We believe that Brazil is the most viable alternative to feed the world. We put all our energy into this noble mission. We foster creativity and innovation. We believe that science and technology can sort out Brazil's produc- tivity challenges. OUR COMPANY We believe that through ethical, humble and engaged conduct, we can exceed and surprise the expectations of interested parties. Great achievements do not take place overnight; they result from the sum of small achievements made con- sistently, with determination and courage. What mat- ters is to achieve sustainable results. We share and celebrate our achievements by strength- ening relationships and immediately seeking new challenges. We develop solutions for agriculture. We work to serve farmers, as they are the reason for our existence. We are a Research and Development company. Innovation and strategic alliances cooperate with these objectives. We are united as a family and we live each one for ev- eryone. Our strategic movements are concerned with the collective. We respect the knowledge acquired through experi- ence as well as the theoretical knowledge. In any matter, our decisions are based on: loyalty, jus- tice, courage, love and humility, in that order. We are responsible for our company, our brand and our im- age. We are proud of our 'IHARA Way of Being'.. OUR PEOPLE We are IHARA because we have chosen so! We cultivate the business owner spirit in each employee. We are re- sponsible for our choices. Our people are our greatest asset. Excellent people with great results and a desire to grow are recognized and rewarded accordingly. We dream big. We believe that human capacity is un- limited and we always challenge ourselves. We believe in leadership by example. We evaluate our leaders for the quality, altruism and engagement of their teams. We select and train people in order for them to be better than us. Trust is the foundation of our relationships. Our peo- ple deliver results by acting with integrity, loyalty and justice, respecting laws and moral principles. We have humbleness as a principle. We value the ability to listen, diverge and express ourselves respectfully. We value respect. We respect people, society, laws, the environment, diversity, that is, life in all its forms. We look for people with initiative and creativity and cultivate them as having a high value. We are enthusiastic. We dedicate ourselves to working with energy and passion, finding satisfaction and plea- sure. As we work with pleasure, responsibilities are naturally fulfilled. Our people have a passion for challenges. We have the spirit of business owners, which is reflected in our actions. We are committed to our goals and face challenges with joy and courage. A given mission is an accom- plished mission. 1. Mr. Inamori's success story and Kyocera's philosophy were the basis to elaborate IHARA's Beliefs and Values.. 8 ABOUT IHARA SUSTAINABILITY REPORT IHARA 2019 6#6GRI 102-1, GRI 102-2, GRI 102-3, GRI 102-4, GRI 102-5, GRI 102-10 IHARABRAS S/A Indústrias Químicas is a Brazilian privately held corporation, with its corporate structure com- posed mainly of Japanese companies, which has been operating for 55 years in the research, development, produc- tion and marketing of pesticides, seeking to serve farmers with solutions that protect crops against diseases, pests and weeds. The company's head office is located in the city of Sorocaba/SP, where our administrative offices, production plants, research center and distribution center are located. We still have five distribution centers, located in the states of Bahia, Goiás, Mato Grosso, Paraná and Rio Grande do Sul. In 2020 IHARA begins operations in the Research Centers in Primavera do Leste (MT) and Sarandi (PR). In 2019, IHARA opened a representative office in China and, due to business growth, invested in 2020 in increasing employees in order to enhance supplier relationships. In 2021, it is expected to open in India. The company permanently invests in research and development, with the objective of launching new products that address the productivity challenges of Brazilian tropical agriculture, increasing productivity, safety and its sustain- ability. By practicing the Japanese culture of quality management, IHARA maintains strict production standards and a highly technical sales team, offering more than 60 products, including fungicides, herbicides, insecticides and special products, which contribute to the protection of more than 100 different types of crops. IHARA Agricultura é a nossa vida COMPANY'S SIZE GRI 102-16 TOTAL ASSETS (R$ MILLION) COSTS (R$ MILLION) 2.786 3.282 2.123 NET SALES (R$ MILLION) 2.034 1.533 18 19 NUMBER OF PRODUCTS 10 20 2.449 2.103 18 19 20 20 NUMBER OF EMPLOYEES 1.429 1.070 18 19 20 20 TOTAL EQUITY (R$ MILLION) 65 758 1.874 61 60 697 1.664 655 1.461 18 19 20 20 ABOUT IHARA 18 19 20 20 18 19 20 20 CORPORATE COMPOSITION 28.5% Nippon Soda Origin: Japan 22.4% Kumiai Chemical Origin: Japan 22.4% Sumitomo Corporation Origin: Japan 12.1% Mitsui Chemicals Agro Origin: Japan 4.2% Sumitomo Chemical Origin: Japan 3.7% Mitsubishi Corporation Origin: Japan 3.1% Nissan Chemical Corporation Origin: Japan 3.56% Other Origin: Brazil SUSTAINABILITY REPORT IHARA 2019 11#712 ABOUT IHARA MARKETS SERVED GRI 102-6 Operating throughout the national territory, in the agrochemicals segment and taking products and services to rural producers, IHARA significantly contributes to the progress and competitiveness of the Brazilian agriculture. BY STATE* 20.91% - MT 18.43% - SP 12.44% - PR 9.70% - GO 8.33% RS 8.24%-MG 5.98% RS *The rest is divided among the other Brazilian states. BY REGION 36.16% MIDWEST 2020 27.70% SOUTHEAST 22.64% SOUTH 3.18% NORTH 10.32% NORTHEAST BY CROP 46.96% SOYBEAN 12.87% SUGARCANE 10.30% CORN 8.12% COTTON 8.71% HF 13.03% OTHER BY CLIENTS/ BENEFICIARIES DE 46.47% RETAILERS 28.91% FARMERS 24.62% COOPERATIVE SUSTAINABILITY REPORT IHARA 2019 13#8TIMELINE 1965 • IHARA is founded in São Paulo (SP), located in the Jaguaré district. 1991-1997 • Investment in facilities, expansion works, reforms and modernization. • Inauguration of the synthesis plant of the fungicide thiophanate methyl 2011 • Mitsui Chemicals Agro and Nissan Chemical Corporation join as the company's shareholders. 2015 • IHARA completes 50 years of history! To celebrate this milestone, the company is preparing several social and cultural actions, such as the installation of artesian wells in the northeastern semiarid and musical and theatrical projects. 2019 • Construction of the first flex plant for herbicides at IHARA and inauguration of a new synthesis plant. • The historical record of USD 500 million in sales was exceeded. • Acquisition of two agricultural lands to accommodate Research Centers in Paraná and Mato Grosso. 1970-1989 • The company's first plant is officially inaugurated in Osasco (SP). • In the early 1980s the office is opened in Sorocaba/SP. In mid-1982 the factory is transferred and the entire operation is unified in Sorocaba. In this period the Synthesis of the herbicide molecule Propanil is also inaugurated. • Opening of new facilities, synthesis of the propanyl herbicide molecule. 14 ABOUT IHARA 2004 . • Revenue reaches US$ 100 million. 2012-2014 • The company continues to invest in improvements, installing a new Effluent Treatment Station. New projects begin to be developed as new molecules arrive from Japan. • Construction of the Distribution Center and Segregation of the Herbicide plant. 2016-2018 • In 2016, IHARA begins to reap the rewards of investments with the approval of new products. • With the launch of approximately 20 products on the market between 2017 and 2018, IHARA undertakes a significant renewal of its portfolio, guided by the constant search for more effective and less hazardous products. 2020 • Implementation of a new management system (SAP) • IHARA innovates and brings new solutions to farmers with the launch of "Herbicides of the Future" • It earns the FIA Quality of Work Environment seal • It inaugurates the packaging factory SUSTAINABILITY REPORT IHARA 2019 15#916 ABOUT IHARA INSTITUTIONAL RELATIONSHIPS GRI 102-13 STRATEGIC PLANNING AWARDS D AS MELHORES DA DINHEIRO 2020 For the first time, IHARA won first place in the "The Best of Dinheiro" award by the IstoÉ Dinheiro magazine; ORES +2020* GOBORU AL For the seventh time, it won first place in the "The Best of Agribusiness" award, from the Globo Rural magazine; exame.20 MMELHORES MAIORES For the first time, it ranked third, in the "Best and Greatest 2020" award, by the Exame magazine; IHARA has institutional relationships with several or- ganizations, as follows: • Brazilian Association of Rural Marketing and Agri- business (ABMRA) • Brazilian Association of Technical Standards (ABNT) • Brazilian Human Resources Association (ABRH) • Sorocaba Human Resources Professionals Associa- tion (APRH) • Center of Industries in the State of São Paulo (CIESP-SP) • CropLife Brasil Fungicide Resistance Action Committee (FRAC) • Brazilian Group of Cotton Consultants (GBCA) •Herbicide Resistance Action Committee (HRAC) • International Life Science Institute (ILSI) ⚫ National Institute for Processing Empty Packaging (InpEV) • Insecticide Resistance Action Committee (IRAC) • Prohuma Institute for Scientific Studies (PROHUMA) • National Union of Plant Protection Products Industry (SINDIVEG) In our formulation and implementation process strat- egy, which is reviewed annually, IHARA evaluates the environment in which it operates, looking at economic, environmental and social perspectives, among others. Based on this analysis, measures are developed that are aligned to corporate initiatives based on our stra- tegic directions that guide the goals established for our results. These measures and initiatives are a work theme in all areas of the company. Among the directions worked annually in our strategic formulation and implementation process are the Cor- porate Governance, Corporate Risks, New Business and Market Development, Research and Development, Marketing and Portfolio, Communication, Financial Risks, Operations and Compliance, and Personnel De- velopment. Our guidelines also include the constant search for process improvements with the best quali- ty control, in order to guarantee high quality products with the best Japanese technology to meet the needs of the farmer. Furthermore, we are committed to the best operational efficiency, aiming to reduce costs and increase productivity, always in accordance with sus- tainability initiatives, reducing waste generation, wa- ter and power consumption and promoting the correct use of personal protective equipment, besides distrib- uting this equipment to our customers as a steward- ship action, because we believe that our products are special and require special care in their use. LUGARES INCRÍVEIS PARA TRABALHAR 2020 FM-UOL IHARA was also elected one of the Amazing Places to Work in the first edition of this award, carried out by UOL and the Administration Institute Foundation (FIA). SUSTAINABILITY REPORT IHARA 2019 17#10CORPORATE GOVERNANCE Ethics and integrity these are essential values that are reflected in IHARA's culture and relationships with Stakeholders. IHARA Agricultura é a nossa vida#11GRI 102-15 GRI 102-18, GRI 205-1 IHARA seeks a continuous evolution in its governance structure to sustainable growth through the implementation of a system and review of internal processes and controls. IHARA's governance structure is made up of the general shareholders' meeting, Board of Directors and Executive Board, which is supported by strategic committees, which always have the participation of the Chairman of the Board and the Chief Executive Officer, in addition to the selected Directors and Managers, according to each theme. The general shareholders' meeting is annually held, in an ordinary manner, to render accounts to shareholders and society. Elections are held every two years, during the meetings to compose the Board of Directors, with the Board of Directors being responsible for electing the Statutory Directors. GOVERNANCE STRUCTURE GENERAL SHAREHOLDERS MEETING (GSM) BOARD OF DIRECTORS PRESIDENT SENIOR VICE-PRESIDENT STRATEGIC COMMITTEES AND NRAC - NOMINATION & REMUNERATION ADVISORY COMMITTEE Compensation and Appointment Advisory Committee Portfolio and Innovation Committee Planning and Investment Committee Treasury and Credit Committee Sustainability Committee Audit, Compliance and Risk Committee Legal Affairs Committee SENIOR ADVISOR EXECUTIVE DIRECTOR HUMAN DEVELOPMENT SHAREHOLDER RELATIONS AND CORPORATE PLANNING ETHICS AND INTEGRITY Ethics and integrity these are essential values that are reflected in IHARA culture and relationships with stakeholders. To ensure that risks related to corruption are properly reduced and mitigated, IHARA has policies and addi- tionally, it implemented a new management system (SAP). All controls are monitored and directly attended by senior management and the compliance team. In 2020, no relevant risks were identified, and IHARA has controls and an audit process, supported by the Compliance and Corporate Risks Committees and the Ethics Committee. The company does not maintain relationships with disreputable companies and, by means of auditing, carries out verification work through information ob- tained through the "Transparency Portal" and periodic supplier analysis. IHARA has a Code of Conduct and Ethics, which is based on the company's Beliefs and Values, which for- malizes the IHARA culture, guided by law, ethics and respect for society. Presented and delivered to each employee at the time of their integration, its provi- sions are reinforced through training and e-learning sessions. Upon delivery of the document, the employ- ee reads and signs evidence of knowledge of the Code of Conduct and Ethics. IHARA encourages all employees to report through the available communication channels situations that are not in line with the organization's standards of behavior. IHARA prohibits retaliation against reports made in good faith, and the company also provides to- tems and pamphlets for anonymous description of the problem identified. This form can also be completed electronically and always anonymously. BUSINESS MARKETING 20 CORPORATE GOVERNANCE RESEARCH & DEVELOPMENT INDUSTRIAL FINANCE OPERATION 21 SUSTAINABILITY REPORT IHARA 2019#12POSITIONING AGAINST THE COVID-19 PANDEMIC IHARA has adopted all safety protocols to ensure the health of employees, customers and other related parties#13Faced with the Covid-19 pandemic dealt with around the world, IHARA has invested in several actions in fa- vor of the health of its employees and customers and in the continuity of its business. The main actions tak- en by the company were: • Reduction in the circulation of people (Remote Work or Bank of Hours); • • Anticipation of employee vacations; Reducing the number of people in the collective transport of employees; • Cancellation of face-to-face meetings, events, visits and trips; • DSD (Daily Security Dialogue) via WhatsApp; • Interrupted Labor Gymnastics and Quick Massage; • Limitation of 50% of the capacity for meeting rooms after the flexibility; • Increased meal times and change in the layout of restaurants; and • Increased hygiene in environments and employee awareness. The company has implemented outpatient monitoring that includes a Test, Prevention and Monitoring Proto- col Plan for people who have symptoms of the disease and suspected cases. Monitoring is also performed to measure the temperature of all employees, third par- ties and truck drivers, and a daily update of new cases is reported to the board of directors and management. Performed rapid tests on all employees who present- ed symptoms and made available to their family mem- bers, with payroll deduction. The company also developed a Communication Plan for submitting notifications on preventive measures, such as: Information on physical and mental well-being; •Covid-19 prevention information; Tips for working at home; • Temperature measurement; • Care in the use of restaurants, bathrooms and meet- ing rooms; Guidelines for drivers, truck drivers and third parties; Banners distributed throughout the company; and WhatsApp videos about preventive guidelines pre- pared by occupational physicians. DONATIONS In 2020, IHARA supported regional communities and national entities in the fight against coronavirus through do- nations in cash, food baskets, alcohol gel, and personal protective equipment (PPE), as shown in the table below. During the year, other actions were implemented to raise awareness among its partners, such as sending emails to channels and customers informing the measures adopted by IHARA to continue operating; launching the theme #Farming Will NotStop with actions on social networks, engagement of influencers and farmers to share good pre- vention practices in the field; the distribution of the booklet, a material consolidating all shared good practices; the launch of the IHARA video, with the recognition of company's employees and of the agribusiness as an essential segment; disinfecting the streets of Sorocaba cities; developing the IHARA Covid-19 application; and the Covid-19 blitz in the internal areas, so as to identify deviations that compromise the safety of employees. IHARA DONATIONS - COVID-19 INTITUTIONS DONATION OF FOOD TO ENTITIES DOCTORS WITHOUT BORDERS SOROCABA CHARITY HOSPITAL SINGLE CHARITY ITEM QUANTITY Valor (r$) FOOD STAPLES 13,800 un. 966,000.00 DONATION TO THE COVID-19 FUND 1 100,000.00 AUTOMATED BEDS FOR ICU BEDS COVID-19 5 un. 58,602.90 PUMPS FOR ALCOHOL FILLING 5,040 un. 43,980.80 24 POSITIONING AGAINST THE COVID-19 PANDEMIC HOSPITAL DE AMOR BARRETOS E GOOD FRIENDS BENEFICENT LIVE SESSIONS WITH DOUBLE ZC&L - FOOD STAPLES 1,124 un. 29,224.00 DONATION BY EMPLOYEES AND INSTITUTIONS SOROCABA SOCIAL SOLIDARITY FUND BRAZILIAN RED CROSS SP MASKS 7,850 un. 26,685.00 FOOD STAPLES 500 un. 13,000.00 HYGIENE AND CLEANING PRODUCTS 3,528 un. 4,995.58 000 SOROCABA CHARITY HOSPITAL FLOWERSHOPS IMPACTED BY COVID-19 FLOWERS FOR MOTHER'S DAY ACTION 635 un. 4,920.00 ALCOHOL IN GEL 300 Liters 4,350.00 CHRISTMAS WITH NO HUNGER SOROCABA HEALTH DEPARTMENT FOOD STAPLES 137 3,436.60 PPE APRONS 425 un. 3,277.10 CENTRO VINCENTINO NOSSA SENHORA DAS DORES ALCOHOL IN GEL 80 Liters 1,160.00 TOTAL 1,259,581.98 SUSTAINABILITY REPORT IHARA 2019 25#14IHARA PORTFOLIO In the development process of new products, IHARA seeks high standards of innovation and quality, con- sidering the risks and impacts on human health and the environment, selecting only those compounds that offer the greatest safety in use.#15PRODUCT LIABILITY GRI 102-02 IHARA has inaugurated two new Research Centers in the states of Paraná and Mato Grosso. With the Re- search Center already installed in Sorocaba/SP, the company has different biomes to conduct its agronom- ic research trials. It expanded the capacity to generate demand and demonstrate our solutions in partnership with cooperative and resale customers. NEW PRODUCTS Throughout 2020, there were 8 launches: new prod- ucts; definition of new targets and cultures for prod- ucts already existing in the current portfolio and the development of new formulations. Thus, IHARA rein- forced its portfolio with novelties in fungicides, insec- ticides and herbicides. INVESTMENTS For 2021, IHARA will continue to strongly expand its investments in research and development, promotion and work with the scientific community. The company intends to continue bringing quality information and solutions to farmers, growing and investing heavily to foster, position and generate value, and launching new products to the market, which will make its portfolio even more robust and complete. GRI 416-1, GRI 416-2, GRI 417-1 In the development process of new products, IHARA seeks high standards of innovation and quality, con- sidering the risks and impacts on human health and the environment, selecting only those compounds that offer the greatest safety in use. In addition to the as- sessment made by the company, all products also un- dergo an approval process performed by the regulatory bodies, which have strict requirements. IHARA's sales team is highly qualified to answer the farmers' techni- cal questions and provide guidance on the correct and safe use of all products marketed by the company. IHA- RA measures for product safety are the following ones: • Investment in biological products; • Prioritization and strategy in the development of products with a lower environmental impact; • Training, awareness lectures, guidance and incen- tives for the adoption of good agricultural practices and for the correct and safe use of products, includ- ing the donation of PPE; and • Studies required by the government to submit regis- tration and marketing only of duly registered products. In 2020, IHARA made new submissions for product registration and package leaflet extensions to the regulatory agencies. Applications were submitted for 3 new herbicides, 2 new insecticides and 2 new fun- gicides. We emphasize that a registration application was also submitted for a new molecule that is a nov- el fungicide in Brazil. In addition, applications were submitted for the extension of the package leaflets of several products in various crops. Some of the for- mulations were developed and tested by IHARA's own technology team, aiming to obtain the lowest possible impact on human and environmental health. Addition- ally, in 2020, IHARA obtained registration approvals for 9 new products, 6 of which are formulated products, 2 equivalent technical products, and 1 new technical product (unprecedented molecule in Brazil), as well as 5 extensions to approved package leaflets. The new products received investments to reduce toxicity allied to technical efficiency, ensuring safety for the rural producer. IHARA sells special products that require care in use. In order to manage health and safety-related impacts and maintain full compliance in its processes, IHARA has the support of the SOGI tool, from the Integrat- ed Management System, which allows the analysis of the causes of any problems, the elaboration of ac- tion plans and check its effectiveness. Thus, in 2020, non-conformities with a warning or a fine deemed val- id were not found. In view of the risks related to the incorrect use of the products, the technical and com- mercial teams are trained to instruct farmers and ap- plicators to adopt good protection practices, including 28 IHARA PORTFOLIO SUSTAINABILITY REPORT IHARA 2019 29#16the use of the appropriate PPE for the preparation of the product and its correct form of application. These professionals are also trained to provide the neces- sary assistance, recommending the correct time of application and the necessary doses of each product. In addition to complying with legal requirements, the company carries out actions aimed at society, distrib- utors and the chemical industry. Examples of safety and good practices in the field, such as the Cultivida project, are detailed below. PRODUCT LABELING AND INFORMATION GRI 417-1 The labels and package inserts of all IHARA products are prepared in accordance with legal requirements, offering information on the correct use, composition and active ingredients, in addition to the indication of environmental hazard and toxicity to health, all in ac- cordance with Decree No. 4,074, of January 4, 2002, Article 49. 30 IHARA PORTFOLIO CULTIVIDA Launched in 2012, the Cultivida project aims to guide rural producers on the correct and safe use of pesti- cides, in addition to disseminating good practices and training public agents to identify and treat the health conditions of the rural population. This important ini- tiative by IHARA collaborates to reduce and mitigate cases of contamination, intoxication and occupational accidents related to pesticides in Brazil. Between 2012 and 2016, Cultivida visited 20 munici- palities in 13 Brazilian states, benefiting more than 8,000 people, including health agents and smallholder farmers and their families. These people received im- portant information through lectures and educational and recreational actions related to good agricultur- al practices, such as the use of personal protective equipment (PPE), application technology, disposal of empty packaging, use of pesticides and also other top- ics family and women's health. Through a partnership with the State University of Campinas (Unicamp), Cul- tivida also involved the training of health professionals in the Unified Health System (SUS) in the regions, with a total of 1,738 people trained in the five years of the project. As of 2017, the Cultivida project entered the distribution of PPE phase, with more than 600,000 PPE delivered by 2020. PPE DISTRIBUTED (THOUSAND) PACKAGES RECYCLING In line with its philosophy, principles and values, IHA- RA is responsible for all stages involved in its produc- tion chain, seeking sustainable solutions compatible with each of its activities. One concern concerns the environmentally correct disposal of post-consumer crop protection product packaging, which is why IHA- RA participates in the Campo Limpo System (SCL), which is mainly financed by crop protection products to enable reverse logistics of empty packaging or con- taining post-consumer leftovers and coordinated by inpEV (inpev.org.br). In addition to being associated with inpEV, IHARA is also part of the Institute's Board of Directors. The Campo Limpo System is an internationally rec- ognized model of success. Through this program, we give the correct destination for the packaging of agri- cultural pesticides, avoiding negative impacts on the environment due to inadequate disposal, which could compromise the soil, surface water and groundwater. With an environmentally appropriate destination of 94% of the commercialized plastic packaging, Brazil has become a world reference in this area, accumu- lating 600 thousand tons of recycled packaging since 2002, with 49.8 thousand tons, only in 2020. Through its Sustainability program, IHARA aims to engage its customers on environmental issues, through the elab- oration of projects that combine reduction of environ- mental impact, social and economic benefits. 160 130 110 217 17 18 19 20 20 SUSTAINABILITY REPORT IHARA 2019 31#17ECONOMIC AND FINANCIAL PERFORMANCE The wealth generated by IHARA is a result of the combined effort of all factors of production, directed to meet as demands and needs of Brazilian farmers.#18ብሔ 04 06 GRI 201-1, GRI 201-2 IHARA has effectively contributed to the generation of wealth in the economy in which the company operates, in a global view of performance. The wealth generated by IHARA had a positive impact not only for the shareholders, but also for its employees, customers and society. Result of the combined effort of all factors of production, aimed at meeting the demands and needs of Brazilian farmers. The increase in IHARA's sales in 2020 represents 36.8% in relation to 2019, which is related to the strengthening of the IHARA product portfolio as well as the growth in demand. The gross added value of 633.81M reais, represents an increase of 20.1% compared to 2019 and 51% compared to 2018. Shareholders IHARA appreciates the trust from Customers and the opportunity to serve them, through the suppliers, service providers and employees' support, which enable us to keep supporting and contributing towards society and Brazil. 34 ECONOMIC AND FINANCIAL PERFORMANCE 03 2018 2019 2020 ADDED VALUE STATEMENT (IN %) 16.21 15.53 13.25 Employees (compensation and benefits for employees) 25.57 25.07 23.20 Government 27.15 30.35 31.73 Net profit added 38.84 37.21 32.28 Interest and rent (operating costs) -7.77 -8.17 -0.46 ADDED VALUE STATEMENT - SUMMARIZED (IN MILLION R$) Gross revenue Inputs acquired from third parties 1,568.53 2,081.44 2,885.75 1,148.95 1,553.65 2,251.94 Gross margem value added Retentions Net added value produced by the organization Added value received on transfer 419.58 527.80 633.81 -11.23 -11.11 -14.89 408.35 516.68 618.92 53.03 34.40 33.45 Total added value to be distributed 461.38 551.09 652.37 SUSTAINABILITY REPORT IHARA 2019 35#19ENVIRONMENTAL PERFORMANCE To manage potential environmental impacts, the IHARA establishes controls and mitigation actions. The company works with the implementation of projects, always focusing on reducing consumption of water and energy, in addition to reducing the generation of industrial waste.#20ENERGY GRI 302-1 ELECTRICITY CONSUMPTION IHARA's energy matrix is mainly made up of electricity, and IHARA has a goal of reducing annual consumption. The efficiency indicator is based on consumption in MWh / ton produced. In 2020, IHARA reduced the consumption MWh / ton produced by 5% compared to 2019, reaching the reduction tar- get through projects for this purpose. Despite the total consumption in MWh having grown by 6% compared to the previous year, the production volume rose 11.5%, demonstrating the increase in energy efficiency in the processes. ENERGY CONSUMPTION WITHIN THE ORGANIZATION - GRI 302-1 ELETRICIDADE MWH 9,969 9,432 8,132 PRODUCTION VOLUME (TON) ENERGY (MWH/TON) 80,106 0.16 71,826 0.13 0.12 RISKS ASSOCIATED WITH CLIMATE CHANGES In 2020, IHARA identified risks and opportunities arising from climate change. The risk arises from prolonged droughts or excessive rainfall in regions producing grain and Livestock, which can negatively affect the customers' business as well as their financial capacity. EMISSIONS GRI 305-1, GRI 305-2, GRI 305-3 For the eleventh time, IHARA elaborates its inventory of greenhouse gas emissions, based on the GHG Protocol methodologies. In 2020, the company emitted 16,736.1 tCO2, 2,015.4 of which refer to direct emissions (Scope 1) and 867.0 tCO2 e referring to indirect emissions (Scope 2). Scope 3 Emissions (other indirect emissions) were 13,853.7 tCO2 e, always considering CO₂, CH, N2O and HFC in the calculations. As for direct and indirect biogenic emissions, total emissions were 2,594.4 tCO2 e. 50,093 18 19 20 18 19 *The calculation is performed based on energy consumption (MWh) divided by the total volume of production. 20 ENERGY CONSUMPTION WITHIN THE ORGANIZATION - GRI 302-1 Electricity MWh ENERGY CONSUMPTION OF THE SYNTHESIS PROCESS Electricity MWh 18 19 20 20 GREENHOUSE GAS EMISSIONS Gross direct emissions of greenhouse gases - SCOPE 1 - GRI 305-1 Indirect greenhouse gas emissions - SCOPE 2 - GRI 305-2 Other indirect greenhouse gas emissions - SCOPE 3 - GRI 305-3 2018 2019 2020 Biogenic emissions - SCOPE 1 - GRI 305-2 Biogenic emissions - SCOPE 3 - GRI 305-3 8,1032 9,432 9,969 2018 2019 2020 0 0 654 GRI 102-11 ENVIRONMENTAL RISKS In order to manage potential environmental impacts, IHARA establishes mitigation controls and actions. IHARA works with the implementation of projects, always focusing on reducing the consumption of water and energy, in addition to reducing the generation of industrial waste, such as improving the efficiency of its processes by reducing the consumption of natural resources, thus making use of more efficient lighting systems, seeking for renewable energies and so forth. 38 ENVIRONMENTAL PERFORMANCE GREENHOUSE GAS EMISSIONS, BY SCOPE (%) 2018 2019 2020 2,159.12 2,083.30 2,015.40 650.61 753.10 867.00 11,945.40 15,582.70 13,853.70 2018 2019 2020 1,108.78 1,120.20 1,095.70 1,131.07 1,679.80 1,498.70 REDUCTION OF GHG EMISSIONS 18 19 20 20 12.0 SCOPE 1 - 621.77 5.2 SCOPE 2 - 684.88 82.8 SCOPE 3 - 735.32 * Reduction related to Scope 2 emissions. SUSTAINABILITY REPORT IHARA 2019 39#21WATER AND EFFLUENTS GRI 303-1, GRI 303-2, GRI 303-3, GRI 303-5 IHARA's absolute water consumption in 2020 was 149.66 m³. The company's water supply was mainly guaranteed by surface catchment (60.4%), followed by underground catchment (34%), with a small share of the municipal supply network (4.5%). The groundwater efficiency indicator is m³/ton pro- duced and the index excludes the volume of ground- water incorporated in the products. In 2020, IHARA reduced consumption by 18% compared to 2019, as a result of the improvement of the monitoring process and consumption reduction projects. WATER FOR INDUSTRIAL PURPOSES (M³) Undergroud water WATER WITHDRAWN, BY SOURCE (MEGALITERS) - GRI 303-3 Surface water Underground water Produced water Third-party water Municipal supply service or other services Total TOTAL WATER CONSUMPTION (MEGALITERS) - GRI 303-5 Total water reuse Total water disposal Total 40 ENVIRONMENTAL PERFORMANCE UNDERGROUND WATER (M³/TON PRODUCED) 0.30 0.27 0.22 18 19 20 20 MATERIALS AND WASTE GRI 301-1, GRI 306-3, GRI 306-5 IHARA controls and manages waste by origin, type and destination, always focusing on the 3 R's of sustain- ability. The waste management indicator is tons of waste gen- erated/ton produced and in 2020, IHARA reduced its waste generation by 18% compared to 2019, exceeding the annual reduction target of 5%. Waste is segregated, quantified and disposed of in ac- cordance with the standards and the best treatment technologies. WASTE GENERATED, BY COMPOSITION-GRI 306-3 2018 2019 2020 Waste composition 15,206 19,527 17,831 2018 2019 2020 106.15 79.36 90.43 31.96 40.80 50.97 2.29 1.62 1.54 Hazardous and Non-Hazardous Waste - Coprocessing/Treatment / Incineration WASTE (M³/TON PRODUCED) 0.14 0.14 0.12 18 19 20 20 Quantity (t) Waste description 2018 2019 2020 Contaminated packaging, ETE sludge, liquid waste, common urban waste, talc, rubble 1,447 2,910 1,905 Hazardous Waste Recycling Contaminated plastic and metallic packaging, batteries, light bulbs and electronic scrap 3,236 3,692 4,162 Non-Hazardous Waste Recycling Paper, plastic, wood, glass and metal 1,282 1,949 2,295 Non-Hazardous Liquid Waste - External Treatment Osmosis tailings, biological TEE sludge 560 1,134 715 Hazardous and Non-Hazardous Waste in Landfill Ordinary urban waste, talc and rubble 738 500 217 5.88 5.49 6.72 146.28 127.27 149.66 Total 7,263 10,186 9,294 WASTE GENERATED IN THE SYNTHESIS PROCESS 2018 2019 2020 Waste composition 146.28 127.27 149.66 3.24 3.69 4.16 Hazardous and Non-Hazardous Waste - Coprocessing/Treatment / Incineration 143.04 123.58 145.50 Waste description Quantity (t) 2018 2019 2020 Contaminated packaging, ETE sludge, liquid waste, common urban waste, talc, rubble 0 0 4,213 SUSTAINABILITY REPORT IHARA 2019 41#22ESSENCAL PLUS MATERIALS IHARA manages the purchase of raw materials and packaging via the system, following the production demand. In 2020, the company consumed 23,680t and 7,577,982 units of materials. These materials refer to the inputs used in the production process. In addition, these materials are divided into two categories: renewable and non-renewable, according to the tables below. RENEWABLE MATERIALS USED - GRI 301-1 2018 2019 2020 Material name Material type Volume/weight Volume/weight Volume/weight WASTE INTENDED FOR DISPOSAL, BY TYPE OF DISPOSAL OPERATION - GRI 306-5 Recycled plastic lids (unit) Recycled lids used to close finished product drums 3,979,700 4,772,200 7,570,950 Quantity (t) Hazardous Waste 2018 2019 2020 Recycled plastic drums (unit) Recycled packages/drums used in the packaging of finished products 240,512 227,184 0 Incineration (with energy recovery) Off-site 0 0 0 * In 2020 there was no purchase of recycled drums Incineration (without energy recovery) Off-site 371 98 73 Landfill Off-site 394 280 95 NON-RENEWABLE MATERIALS USED - GRI 301-1 Total 765 378 168 Non-Hazardous Waste 2018 2019 2020 Material name Material type Incineration (with energy recovery) Off-site 0 0 0 KOH solution - Herb (t) Neutralizing 2018 2019 2020 Volume/weight Volume/weight Volume/weight 5,730.59 9,116.34 11,097.82 Incineration (without energy recovery) Off-site 0 0 0 Landfill Off-site 344 221 122 Mineral oil (t) Raw material used in the compo- sition of finished product. 3,611.14 5,199.54 7,046.33 Total 344 221 122 5 and 20 l Mono and Coex drums; Plastic bottles and drums (unit) 250 ml and 1 l Mono and Coex flasks 3,706,643 6,771.03 7,031.95 In 2020, there was an increase in the generation of waste due to the deployment and operation of new production processes, mainly related to the Amicarbazone Synthesis Plant, which compromises comparability with data from previous years. The new processes differ from those that were already underway. Yet, they are also being monitored and make up the 2021 reduction goals. Mixture of decyl glycoside in 60% water sol. - Herb (t) Mixture of esters and ethoxylate fatty alcohol (t) Xylol (t) Surfactant Raw material 1,624.38 2,221.13 2,304.99 1,324.96 2,747.19 2,287.37 Solvent used in the manufacture of finished products 830.66 935.70 943.5 In May 2020, IHARA stopped disposing of waste hazardous and non-hazardous - for landfill, thus adopting co-processing, a more sustainable type of disposal. The company intends to apply this method throughout 2021, in order to zero the amount of waste destined for landfill. BIODIVERSITY GRI 304-2 As a way of reducing and or mitigating environmental impacts, IHARA fulfills all the requirements related to the en- vironmental licensing of new expansion projects, new equipment or new products, and the survey of environmental aspects and impacts is also carried out through LAIA (Ambiental Assessment Impact), in which the impact controls are inserted. All CETESB environmental requirements, included in the licenses, are controlled and implemented in order to reduce and mitigate potential risks of impacts by IHARA's activities. 42 ENVIRONMENTAL PERFORMANCE SUSTAINABILITY REPORT IHARA 2019 43#23SOCIAL PERFORMANCE Despite the Covid-19 pandemic, the continuity of business activities meant that hires continued at an accelerated pace in 2020, following the company's expansion and the dismissals were not encouraged during the most critical period.#24INTERNAL AUDIENCE GRI 102-41, GRI 202-1, GRI 202-2, GRI 401-1, GRI 401-2, GRI 404-1, GRI 404-2, GRI 404-3, GRI 405-1, GRI 405-2 EMPLOYEES BY TYPE OF JOURNEY AND GENDER-GRI 102-8 2018 2019 2020 PRÓPRIOS Full Time Part-Time Full Time Part-Time Full Time Part-Time Men 489 16 506 1 601 1 Women 118 4 140 0 156 0 Total 607 20 646 1 757 1 OUTSOURCED Full Time Part-Time Full Time Part-Time Full Time Part-Time Men 21 0 22 10 41 14 Women 7 0 7 11 28 18 2020 Total 28 0 29 21 69 32 32 In 2020, IHARA increased its workforce by 19%, compared to 2019, ending the year with 859 employees: 758 own and 101 outsourced. Own employees are divided into 79.5% men and 20.5% women, mainly concentrated in the Southeast region. EMPLOYEES BY TYPE OF CONTRACT AND GENDER - GRI 102-8 2018 2019 OWN Permanent Temporary Contract Contract Permanent Contract Temporary Contract Permanent Contract Temporary Contract EMPLOYEES BY TYPE OF CONTRACT AND REGION - GRI 102-8 Men 489 16 504 3 593 9 Region Women 118 4 119 21 150 6 South Total 607 20 623 24 743 15 Southeast OUTSOURCED Northeast Permanent Temporary Permanent Contract Contract Contract Temporary Contract Permanent Contract Temporary Contract Midwest North Men 21 0 22 10 30 25 China Women 7 0 7 11 9 37 Total Total 28 0 29 22 20 21 39 62 Region 46 SOCIAL PERFORMANCE South Southeast Northeast Midwest Total OWN Permanent contract Temporary contract Total 62 5 52 67 580 5 585 18 0 18 74 5 79 7 0 7 2 0 2 743 15 758 OUTSOURCED Permanent contract Temporary contract Total 0 3 3 39 བ་ 54 93 0 2 2 0 3 3 39 62 101 Despite the Covid-19 pandemic, the continuity of business activities meant that hires continued at an accelerated pace in 2020, following the company's expansion. IHARA's corporate guidelines for the Human Development area in 2020 were: to train leaders, prepare successors and retain talent; promote the strengthening and evolution of the IHARA culture and perpetuate organizational knowledge with a learning strategy based on E-learning. SUSTAINABILITY REPORT IHARA 2019 47#25In addition to technical training, IHARA offered em- ployees language courses, undergraduate and grad- uate courses, national and international congresses. TRAINING AND CAREER DEVELOPMENT Through its Annual Training Plan (ATP), IHARA pro- motes the technical training of employees in accor- dance with each professional' needs. In general, training is related to various topics, ranging from behavioral development and economic, financial and leadership education, to specific techniques by activ- ity, such as operational or sales. The training offered included the NR's for the operational public and train- ing for the commercial team to better understand the cultures we work with, such as corn, soybeans, cotton, tomatoes, potatoes, sugar cane, and coffee, among others. In the last year, IHARA carried out a total of 7,388 hours of training, involving different levels of training related to leadership, technical training, skills development, languages, and congresses, among others. PERCENTAGE OF EMPLOYEES BEING EVALUATED FOR THEIR PERFORMANCE - GRI 404-3 Board of Director Number of own employees evaluated Total own employees Percentage of employees evaluated (%) FUNCTIONAL CATEGORY 6 1 17% 10 10 100% 101 101 100% 234 256 91% Executive Board Managers and Leaders Operating employees Analysts, Consultants, Experts, 359 385 93% Technicians TOTAL 705 647 94% AVERAGE HOURS OF TRAINING, BY GENDER - GRI 404-1 GENDER Gender Men Women Total Number of employees Number of hours Average by employee Men 564 602 94% 602 6,464.00 10.74 Women 141 156 90% 156 924.00 5.92 TOTAL 705 758 93% 758 7,388.00 9.75 * IPE employees who entered in November and December and own employees who have a temporary contract do not participate. AVERAGE HOURS OF TRAINING, BY FUNCTIONAL CATEGORY - GRI 404-1 Functional category Executive Board Managers/Leaders Analysts, Consultants, Experts, Technicians Operational Total Number of employees Number of hours Average by employee 9.00 42.00 4.67 94.00 839.00 8.93 339.00 5,541.00 16.35 316.00 966.00 3.06 758.00 7,388.00 9.75 PERFORMANCE EVALUATIONS - At IHARA, all effective employees, who have been with the company for more than 3 (three) months, make the IPE Individual Performance Evaluation and receive their reports and feedback process structured by the re- spective managers. Within the IPE process, the essential and specific competencies of each position are assessed. After carrying out the evaluation and feedback process, monitoring by the HDD and managers to monitor the evolution of the employees' competencies through the IDP (Individual Development Plan) registered in the sys- tem continues. In 2020, 93% of IHARA's own employees participated in the performance evaluation. 48 SOCIAL PERFORMANCE COMPENSATION AND BENEFITS IHARA always seeks to provide a fair and compatible compensation and benefits package for all its employees. The company conducts constant survey and comparative analysis on compensation and benefits offered, so that the model meets employees' needs. Moreover, it offers a differentiated share plan, which allows employees to obtain variable income each year. IHARA's benefit policy seeks differentiated market practices, enabling the fulfillment of various needs and also the satisfaction of our employees. To attract and retain employees, IHARA seeks to invest in multidisciplinary training for competencies, developing talents, recognizing employees, offering growth opportunities, paying as per merit and so forth. BENEFITS OFFERED, BY TYPE OF CONTRACT Full Time Part-Time or Temporary regime IHARAPREV (Social Security) Medical and hospital assistance Dental assistance and aid Life insurance yes no yes yes yes no yes yes Food and Meal Vouchers yes yes Allowances (Birth, Day Care, Special Child and Marriage) School supplies aid yes no yes no SUSTAINABILITY REPORT IHARA 2019 49#26In 2020, IHARA had a salary floor in the amount of R$ 1,972.00 (own employees), which is 88.7% higher than the na- tional minimum wage, of R$ 1,045.00. Over the years, average wages have been above the market. The IHARA Profit and Results Sharing model is a market differentiator and a reference in the region. HEALTH AND SAFETY GRI 403-1, GRI 403-5, GRI 403-6, GRI 403-9 The health and safety of employees at IHARA are seen as priority issues and the company takes several ac- tions in this regard. IHARA has an ISO 45001 certified health and safety management system. During the year 2020, the monitoring of safety actions was carried out through the 1200 Miles Program, de- ployed in 2015, which seeks to establish a proactive and preventive culture, providing a great development in several aspects, especially in the reduction of SIR (Safety Inspection Report) emissions, an indicator that shows improvement in the maturity of the safety cul- ture. This program brings forth monthly indicators, aiming at a continuous improvement, and counts on the participation of employees in a formal manifesta- tion when encountering and recognizing a dangerous condition within the manufacturing environment or a deviation of behavior, facilitating the immediate iden- tification of risk situations. This program was also strengthened with the increase in the use of the 5's program, in which, during the year, we were able to reach an average ratio of 98% of use. Thus, 135 ideas for improvements related to safety, environment and quality were presented, an increase of 7% compared to 2019. In 2020, as in previous years, IHARA carried out em- ployee health promotion campaigns. During the year, 04 health campaigns were developed focusing on themes such as: obesity, chronic diseases, smoking, muscle diseases, psychic fatigue, immunity etc. Health and safety campaigns were also carried out during the year, accompanying government cam- paigns, among them Maio Amarelo ("Yellow May"), Outubro Rosa ("Pink October") and Novembro Azul ("Blue November"), in addition to campaigns identified as necessary based on internal indicators, addressing topics such as the safe use of cell phones, family safe- ty and safe vacations. With the COVID-19 pandemic, approaches to health and well-being were strengthened. Aiming at the prompt and effective communication of matters related to the pan- demic, we released the IHARA application, through which we disclose epidemiological bulletins, notifications and videos with prevention guidelines. The tool also enables the daily completion management of the Covid-19 form, which aims to quickly point out signs and symptoms. A notice is automatically sent to employees' managers. The application also provides for the purchase of Covid-19 rapid tests by employees and their families. IHARA works to enhance the safety culture, aiming at the zero accidents goal, nevertheless, in 2020, there were 5 work-related accidents, with a rate of 3.81 to 1,313,745.94 hours worked by own employees. The main injuries were divided into hands and fists injuries and chemical burns. WORK-RELATED INJURIES - GRI 403-9 Number Rate Own employees CASUALTY RESULTING FROM WORK-RELATED INJURIES Third-party employees 0 0 0 0 WORK-RELATED INJURIES WITH SERIOUS CONSEQUENCES Number 5 0 Rate 3.81 0 RECORDABLE WORK-RELATED INJURIES Number 5 0 Rate 3.81 0 SUPPLIERS GRI 102-9, GRI 308-1, GRI 414-1, GRI 408-1, GRI 409-1 IHARA has a purchasing policy, which establishes rules of conduct and expectations, stating that the compa- ny has to do business with its suppliers. Among the rules are that IHARA restricts and does not purchase products or services from suppliers that are known to use child labor and/or who maintain workers in inhu- mane working conditions and/or under forced labor. As a form of risk mitigation, the company monitors it through audits and controls. The company immediately breaks its commercial re- lationship with any supplier when its involvement in these practices is evidenced, thus making a complaint to the Public Ministry. In 2020, 100% of the new suppliers were submitted to evaluations, which consists of an evaluation of the re- quired legal documents and an on-site audit. SOCIETY GRI 413-1 In 2019, IHARA, aware of its role in contributing to so- ciety, accomplished and supported several projects that benefit society, in areas of social assistance, cul- ture and health, among others. Donations were made that exceeded the R$ 4 million mark for institutions, focusing on assistance entities that have shown seri- ous work, recognized by society. The main contribu- tion took place through financial resources. Several regions were identified in addition to the local public at the company's headquarters, so employees who have headquarters in other states could also be involved in these social engagement programs. IHARA is fully aware of its social role and does its part so that human beings, with needs and dreams, can be fully reinserted in society. 50 SOCIAL PERFORMANCE SUSTAINABILITY REPORT IHARA 2019 51#27ABOUT THE REPORT#28GRI 102-50, GRI 102-51, GRI 102-52, GRI 102-53, GRI 102-54, GRI 102-56 IHARA annually discloses its economic, financial, so- cial and environmental results through the publication of its Annual Sustainability Report. The latest report, referring to the year 2019, as well as previous ver- sions, are available to be inquired at the organization's website (http://www.ihara.com.br/institucional). This report was prepared in accordance with the GRI Standards in the essential option and covers the period from January 1 to December 31, 2020. IHARA chose not to carry out an external verification of this document. In order to clarify doubts or answer questions on the in- formation contained in this report, IHARA offers the fol- lowing email address: [email protected] MATERIALITY GRI 102-40, GRI 102-42, GRI 102-43, GRI 102-44, GRI 102-46 In order to define the content of its Annual Sustainabil- ity Report and the respective GRI indicators, in 2015, IHARA conducted a stakeholder inquiry process, which culminated in the preparation of its Materiality Matrix. Through this process, the company learned about the most relevant issues for itself and its stakeholders. An online materiality questionnaire was applied, cov- ering three major themes - Environment, Value Chain and Economic/Products -, subdivided into seven sub- jects, to be ordered from the most relevant to the least relevant. Three strategic stakeholders were selected to participate in the process: internal public, suppli- ers and customers. This choice was made based on the impact of the company's activities, products and services, as well as its expectations, interests and ca- pabilities on these audiences. After preparing the Materiality Matrix, IHARA surveyed all GRI indicators related to material aspects, select- ing those that are most important to its business. In 2020, due to the updating of GRI Standards protocols, IHARA carried out a review of the new indicators, in order to identify which the company should report in its report. GRI 102-47, GRI 103-1, GRI 103-2, GRI 103-3 Material Topics Limit: where the impact takes place Material topic description GRI Standards correlation Management approach Strategy Material inside the organization. Professional development Material inside the organization. Strategy: GRI 102-14, Management approach assessment Knowing IHARA's growth strategy and its long-term vision. How IHARA values its employees, planning training sessions, strengthening competencies and offering a motivating work environment. GRI 102-15 Ethics and Integrity: GRI 102-16 Governance: GRI 102-18 Economic performance: GRI 201-1, GRI 201-2 Market presence: GRI 202-1, GRI 202-2 Training and education: GRI 404-1, GRI 404-2, GRI 404-3 Diversity and equal opportunities: GRI 405-1, GRI 405-2 IHARA's business strategy is to deliver solutions and invest in re- search and development to constantly launch products that meet the complex needs of agriculture, with productivity and sustainability. Its management tool is the Objectives and Goals Panel, which is the re- sponsibility of the financial area, monthly shown at a Board meeting. It includes all the indicators deployed in the corporate strategy for the other departments: Presidency, Business, Marketing, Technical, Industrial and Financial Boards. Such indicators are defined once a year, as per the contribution of each area to achieve the corporate guideline. The management of people development at IHARA is monitored through the Human Development area, which, in turn, has periodic meetings with the managers of each area. In this approach, the con- cept used is KSA (Knowledge, Skill and Attitude), and for questions of Knowledge and Skill, the intervention by the Human Development area is made by means of training. Issues related to Attitude must be treated and monitored by the respective managers. The strategic indicators are broken down by area, with a periodic monitoring by the senior management, so that monitoring and intervention are timely when necessary. This control is the driver for achieving the established goals. To develop the roles, the Human Development area works with each manager through the ATP (Annual Training Plan), identifying the training needs of each employee in the performance of their roles. Water: GRI 303-1, Water consumption management Material inside the organization. IHARA's water consumption monitoring actions. GRI 303-2, GRI 303-3, GRI 303-5 54 ABOUT THE REPORT Water consumption management is a topic widely discussed at IHARA. Consumption management is monitored and appraised on a weekly basis by the Environment department, which reports results every month to the senior management, with the definitions of caus- es and actions for positive and/or negative results. The goal set for reducing water consumption is 5% less than the re- sult obtained in the previous year. This is measured in an index, that is, total water collected (for use in utilities - consumption subject to reduction actions), divided by the volume produced. According to the results/monitoring, the Environment department, together with the Sustainability Committee, sets improvement projects for driving, which are presented to senior management to submit earnings and authorization for deployment. The management of water consumption indicators is monthly assessed by the senior management, as well as monitored and dis- cussed on a quarterly basis with the Sustainability Committee. The size of the periodic measurements, causes and actions are de- fined to achieve the established goals and the continuous improve- ment in water consumption reduction at IHARA. SUSTAINABILITY REPORT IHARA 2019 55#29GRI CONTENT SUMMARY GRI 102-55 GRI Standard Content GRI 101: FUNDAMENTOS 2016 GENERAL CONTENTS ORGANIZATIONAL PROFILE GRI Standard Content ETHICS AND INTEGRITY GRI 102-16 Values, principles, standards and behavior codes. Remarks Report page Omission GOVERNANCE GRI 102-18 Governance structure. STAKEHOLDERS ENGAGEMENT GRI 102-41 List of stakeholder groups. Collective bargaining agreements. Remarks Report page Omission GRI 102-40 GRI 102-1 Organization name. 10 Activities, brands, products GRI 102-2 10 and services. GRI 102-42 GRI 102-43 Identification and selection of stakeholders. Approach to stakeholder engagement. 8, 10 20 20 54 46 46 54 54 54 4 GRI 102-3 Location of the organization's headquarters. 10 GRI 102-44 Main concerns and topics raised. 54 GRI 102-4 Operations site. REPORTING PRACTICE 10 GRI 102-5 Nature of ownership and legal form. GRI 102: GENERAL CONTENTS 2016 10 GRI 102-45 Entities included in the consolidated financial statements. GRI 102-6 Markets served. 13 GRI 102-7 Organization's size. GRI 102-8 Information on employees and other workers. 46,47 GRI 102: GENERAL CONTENTS 2016 GRI 102-9 Suppliers' chain. 51 GRI 102-10 Significant changes in the organization and its supply chain. 10 GRI 102-11 Precautionary principle or approach. 38 Not applicable. IHARA has no subsidiaries. In accounting, they are individual, and do not have consolidated Defining report content and GRI 102-46 54 topic limits. GRI 102-47 List of material topics. 54 GRI 102-48 Reformulations of information. None. GRI 102-49 Changes in the report. None. GRI 102-50 Period covered by the report. 54 GRI 102-51 Date of the most recent report. 54 GRI 102-52 Most recent reporting date. 54 Contact for questions about the report. Reporting statements investments. 54 54 GRI 102-54 in accordance with GRI Standards. 54 GRI 102-55 Summary of GRI content. 56 | GRI 102-56 External check. 54 Not applicable: IHARA has no GRI 102-53 GRI 102-12 External initiatives. initiatives in this regard and there are no adherence goals. GRI 102-13 Participating in associations. 17 STRATEGY GRI 102-14 Statement by the highest executive. 4 GRI 102-15 Main impacts, risks and opportunities. 4,20 56 GRI CONTENT SUMMARY SUSTAINABILITY REPORT IHARA 2019 57#30GRI Standard MATERIAL TOPICS STRATEGY Content Explanation of the material GRI 103-1 topic and its Limit. GRI 103: MANAGEMENT METHOD 2016 GRI 103-2 Management method and its components. GRI 103-3 Remarks Report page Omission GRI Standard Content Evaluation of the management method. 54 54 54 54 PROFESSIONAL DEVELOPMENT GRI 103: MANAGEMENT METHOD 2016 GRI 103-1 Explanation of the material topic and its Limit. GRI 103-2 Management method and its components. Remarks Report page Omission 54 54 54 GRI 103-3 Evaluation of the form of management. 54 Average number of hours GRI 404-1 GRI 102-14 Statement by the highest executive. 4 of training per year, per employee. 46,48 Programs for improving the skills GRI 404-2 GRI 404: TRAINING GRI 102-15 GRI 102: GENERAL Main impacts, risks and opportunities. of employees and assistance for career transition. 46 AND EDUCATION 2016 4, 20 CONTENTS 2016 GRI 102-16 Values, principles, standards and norms of conduct. 8,10 GRI 102-18 Governance structure. GRI 201-1 Direct economic value generated and distributed. GRI 201: 2016 ECONOMIC PERFORMANCE GRI 201-2 Financial implications and other risks and opportunities arising from climate change. GRI 202-1 GRI 202: MARKET PRESENCE 2016 GRI 202-2 Ratio between the lowest wage and the local minimum wage, broken down by gender. Proportion of board members hired from the local community. WATER CONSUMPTION MANAGEMENT GRI 103-1 Explanation of the material topic and its Limit. 20 GRI 404-3 Percentage of employees receiving regular performance and career development evaluations. 46,49 GRI 405-1 34 GRI 405: DIVERSITY AND EQUAL OPPORTUNITIES 2016 GRI 405-2 34 46 46 SPECIFIC INDICATORS ECONOMIC SERIES 46 46 GRI 205: FIGHT AGAINST CORRUPTION 2016 SÉRIE AMBIENTAL GRI 205-1 Diversity in governance bodies and employees. Ratio between base wage and compensation received by women and men. Operations evaluated for risks related to corruption. 54 54 GRI 301: MATERIALS 2016 Materials used, broken down GRI 301-1 by weight or volume. 46 46 46 20 20 41,43 GRI 302: ENERGY 2016 GRI 302-1 Energy consumption inside the organization. 38 54 GRI 304: BIODIVERSITY 2016 GRI 304-2 Significant impacts of activities, products and services on biodiversity. 43 GRI 103: MANAGEMENT METHOD 2016 GRI 103-2 Management method and its components. 54 GRI 103-3 Evaluation of the management method. GRI 303-1 Interactions with water as a shared resource 40 GRI 303: WATER AND Management of impacts GRI 303-2 EFFLUENTS 2018 related to water discharge. 58 GRI 303-3 Water catchment. GRI 303-5 Water consumption. GRI CONTENT SUMMARY 40 40 40 40 40 59 SUSTAINABILITY REPORT IHARA 2019#31GRI Standard Content Remarks Report page Omission GRI Standard Content Remarks Report page Omission GRI 305-1 GRI 305: EMISSIONS GRI 305-2 2016 Direct emissions (Scope 1) of greenhouse gases (GHG). Indirect emissions (Scope 2) of greenhouse gases (GHG) from 39 GRI 416-1 Evaluation of health and safety impacts caused by products and services categories. 29 39 GRI 416: CONSUMER HEALTH AND SAFETY 2016 the acquisition of energy. GRI 416-2 Cases of noncompliance regarding the impacts on health and safety caused by products and services. 29 Other indirect emissions GRI 305-3 (Scope 3) of greenhouse gases (GHG). 39 GRI 417: MARKETING AND LABELING 2016 GRI 417-1 GRI 306-3 Waste generated 41 Requirements for information and labeling of products and services. 29,30 GRI 306: WASTE 2020 GRI 306-5 Waste intended for final disposal. 41,42 GRI 419: SOCIOECONOMIC COMPLIANCE 2016 GRI 419-1 Noncompliance with laws and regulations in the socio- economic area. GRI 308: SUPPLIERS ENVIRONMENTAL EVALUATION 2016 New suppliers selected based GRI 308-1 51 on environmental criteria. SOCIAL SERIES GRI 401: EMPLOYEE 2016 GRI 401-1 New hires and employee turnover. GRI 401-2 Benefits offered to full-time employees that are not offered to temporary or part-time employees. 46 46 46 GRI 403-1 Occupational health and safety management system. 50 50 GRI 403: LABOR GRI 403-5 Training of workers in health and safety at work. 50 HEALTH AND SAFETY 2018 GRI 403-6 Promoted worker health. 50 GRI 403-9 Labor accidents. 50 GRI 408: CHILD Operations and suppliers with GRI 408-1 51 LABOR 2016 a significant risk of child labor. GRI 409: FORCED LABOR OR ANALOGUE GRI 409-1 TO SLAVERY 2016 Operations and suppliers with a significant risk of cases of forced or compulsory labor. 51 Engagement operations, GRI 413: LOCAL COMMUNITIES 2016 GRI 413-1 impact evaluations and development programs aimed at the local community. 51 GRI 414: SOCIAL EVALUATION OF SUPPLIERS 2016 New suppliers selected based GRI 414-1 51 on social criteria. 60 GRI CONTENT SUMMARY IHARA considers this data to be confidential information. SUSTAINABILITY REPORT IHARA 2019 61#32CREDITS RESPONSIBLE TEAM José Gonçalves do Amaral Wagner Angelim Hiroshi Fukumoto Gustavo Urdan Gabriel Saul lara Soriano Milena Martinez Proença PHOTOS BY IHARA Collection Pages 22, 23 and 24' - Freepik CORPORATE INFORMATION Av. Liberdade, nº 1.701 Cajuru do Sul, Sorocaba (SP) - Brazil Telephone: (15) 3235-7700 ihara.com.br For information, suggestions, criticisms or comments, please e-mail: [email protected].#33IHARA Agriculture is our life