Investor Presentaiton

STRATEGIC SUSTAINABILITY DIRECTIVE |G4-18| Building a sustainable future is one of Embraer's values (see page 15), and as such, it is part of the company's strat- egy. In order to identify high-priority issues of sustainability, Embraer carries out a specific consultation process with a formal review every three years. Thus, the Materiality Matrix graphically expresses the combined vision of the compa- ny's management and stakeholders regarding the relevance of a predefined set of sustainability issues. The current matrix is the result of consultations made in 2013. Throughout 2016, a new and amplified survey was conducted, generating the 2017-2019 materiality, which is presented in the Annexes section. Embraer Materiality Matrix (2014-2016)* |G4-27| Importance for interested parties ⚫ Noise • Management of natural resources and waste Atmospheric emissions • Human and labor rights • Health and safety • Ethics • Attraction, developing and retaining HR Product safety • Preventing improper use of product • Transparency and communication • Management of environmental life cycle • Local socio-economic development • Research, development and innovation Management of chemical substances Management of supply chain • Control of exports • Sustainable new business, products and services MASTER SUSTAINABILITY PLAN |G4-2 No. Aspect Indicator Percentage of adherence to compliance 1 Ethics policy and procedure.² Attraction, develop- 2 ment and retention of Favorability percentage in the climate survey. human resources Attraction, develop 2 ment and retention of Number of staff training hours per year. human resources 3 Product safety 3 Product safety 4 Management of chemical substances 5 Management of supply chain Dec. 2017 Goal 100% 80% 500,000 hours per year Maintenance of type-approval certificates (CHT, in Portu- guese) for commercial and executive aviation planes. Maintenance of company-approval certificates (CHE, in Portuguese) in all Embraer sites of interest as defined in conjunction with the business units. 100% of type certificates valid. 100% of all sites of interest certified. 2015¹ Managers: 100%* Non managers: 98.98%* *considering the trainings held on Anti-Corruption Code of Ethics and Conduct 89% 557,077 hours 100% 100% 2016 Managers: 96% Non managers: 98% *considering the trainings held on Anti-Corruption-Code of Ethics and Conduct. There was no survey in 2016; the company opted for a bi-annual engagement survey. En- gagement survey will take place in May 2017. 625,416 hours 100% 100% Development of the new chemical substance manage- ment system to ensure an adequate level of knowledge of the product's chemical composition for compliance with current and future environmental legislation. Phase I-definitions and structuring: until February 2015; Phase II-platform availability and data input: until December 2016; Phase III - full operation of the system: until December 2017. Finalized: the first phase of the modification of the registration of hazardous substances in SAP In progress: training of employees who register substances in the system. Start of data input into the system, aiming to comply with environmental legislation. As of December 2015, all registrations already incorporate the modifications made to the modified system. Finished the structuring and definitions pha- ses. Carried out training for all those involved in the registration of chemical substances in the SAP system. All inputs comply with current legislation. Percentage of suppliers classified as "high environmental risk" in risk evaluations. Percentage of adherence to export policy and procedure. 0% 100% adherence to the compliance evaluation survey. 0% 0% 6 Export control 7 Sustainable new business, products and services 8 Management of natural resources and waste 8 Management of natural resources and waste Management of natural 8 resources and waste Management of natural 8 resources and waste Management of natural 8 resources and waste 8 Management of natural resources and waste Number of new business, products and services incorpo- rating principles of Sustainability. Consumption of energy (MWh) per equivalent plane. Consumption of water (m³) per capita. Generation of solid waste/net revenue. Generation of dangerous solid waste/net revenue. Percentage of manufacturing plants and Embraer service centers with ISO 14,001 certification. Percentage of manufacturing plants and Embraer service centers with relation to environmental liabilities. 9 Atmospheric emissions Emission of greenhouse gases (scope 1+2)/net revenue." Annually launch project that demonstrates the inclusion of sustainability. Reduce by 3% consumption by equivalent plane, in relation to the base year 2014 (603.78 MWh/equivalent aircraft). Reduce by 4% per capita consumption of water, in relation to the base year 2014 (44.66 m³/per capita). Reduce by 3% the total generation of waste per million dollars of revenue, in relation to the base year 2013 (2.76 t/million dollars). Reduce by 3% the total generation of dangerous waste per million dollars of revenue, in relation to the base year 2013 (0.5 t/million dollars). 100% of manufacturing plants and service centers that existed in 2014 with ISO 14,001 certification. 100% of manufacturing plants and service centers that existed in 2014 with relation to environmen- tal liabilities (and their respective treatment plans). businesses, must New acquisitions of buildings, installations be preceded by evaluation of environmental liabilities (environ- mental due diligence), aiming to ensure access to necessary information for the company to make decisions. Reduce by 3% the emission of greenhouse gases (scope 1+2) per million dollars of revenue, in relation to the base year 2013. 77% Non-chrome leather available from tannery for use in aircraft interiors. 551.96 MWh/aircraft equivalent (reduction of 9%) 41.78 m²/per capita (reduction of 6%) 3,21 t/million dollars (increase of 16%) 0.57 t/million dollars (increase of 14%) 47.05% (FLM, EGM, ELEB, BOT, GPX, TTE and EVO)³ 97% Partnership with Boeing in the Eco demons trator program. Technology tests aimed at reducing fuel consumption, CO, emissions and noise. 499.79 MWh/equivalent aircraft (reduction of 17%) 42.49 m²/per capita (reduction of 5%) 2,95 t/million dollars (increase of 7%) 0.5 t/million dollars (maintenance) 47.05% (FLM, EGM, ELEB, BOT, GPX, TTE and EVO 76.47 % (13 of 17) 76.47% (13 of 17) 5.48 t/million dollars (increase of 8%) 4.09 t/million dollars (reduction of 19%) 9 Atmospheric emissions Bio-diversity Philanthropy and volunteering Engagement with public authorities • Crisis management 10 Human and labor rights Privacy and security • Dematerialization • Local production chain of information Employee health 11 and safety Influence for business strategy GOVERNANCE | ENVIRONMENT | STAFF | VALUE CHAIN | PRODUCTS, SERVICES AND CUSTOMERS The company's performance in relation to the priority themes of the Materiality Matrix is evaluated by the Master Sustainability Plan, which presents indicators and triennial targets. With a review every three years and annual revaluation, the first cycle of the plan came into force in January 2015, with horizon of December 2017. |G4-2| * The limit of the material aspect outside of Embraer can be found in the GRI indicators. |G4-21| 6 11 Employee health and safety 12 Transparency and communication 13 Management of the product's environmen- tal life cycle 13 Management of the product's environmen tal life cycle 13 Management of the product's environmen- tal life cycle 14 Local socio-economic development 14 Local socio-economic development. 14 Local socio-economic development. 15 Research, development and innovation Emission of VOC/net revenue. Percentage of individual suits and labor complaint procedures per employee.. Lost Time Injury Rate (LTIR) Reduce by 3% the emission of VOC per million dollars of revenue, in relation to the base year 2013 (0.0063 t/million dollars). Standard of excellence (to be a reference in the market), remain- ing below the national average for companies in the same sector, in accordance with each country's regulating organizations. To reduce the frequency rates of lost time accidents by 30%, in relation to 2014's accident frequency rate (1.74). 0.0034 t/million dollars (reduction of 46%) 0.391%* *corrected number 2.25 (increase of 29.31) 0.0011 t/million dollars (reduction of 82%) 0.306% 1.19 (reduction of 31.6%) Percentage of manufacturing plants and Embraer service centers with OHSAS 18,001 certification. 100% of manufacturing plants and service centers that existed in 2014 with OHSAS 18,001 certification. 47.05% (FLM, EGM, ELEB, BOT GPX, TTE and EVO) 47.05% (FLM, EGM, ELEB, BOT, GPX, TTE and EVO)³ Percentage of indicators responded to in the company's Global Reporting Initiative (GRI) report. Annual GRI Report Coverage Level. 89.65% 89.65% Environmental requirements for developing products.. Use of the simplified evaluation of the product life cycle ("DfE Matrix"). Customer orientation regarding the end of the product's life.. Incorporate environmental requirements, in addition to those for sound and emissions, for 100% of products launched. Use "DfE Matrix" to evaluate 100% of new products launched; for already existing products, evaluate the equivalent for at a minimum of 50% Embraer revenue. Define document containing Embraer product strategic guidelines with relation to its end of life. The incorporation of the product's environmen- tal requirements was implemented in the E2 program. The verification of satisfaction of these environmental requirements, in the E2 program, is in progress. For the next aircraft program to be launched by the company, all environmental requirements will be incorporated, using the DIP (Integrated Development of Products) process. New products in 2015: Legacy 450, which was evaluated using the DfE Matrix. Total portfolio: E-jets, Phenoms and Legacy 500/450 already evaluated, responsible for 86% of Embraer revenue. Concluded: the technical guide containing oper- ational guidelines for customers for the proper disposal of products at the end of their life. The incorporation of the product's environ- mental requirements was implemented in the E2 program. The verification of satisfaction of these environmental requirements, in the E2 program, is in progress. For the next aircraft program to be launched by the company, all environmental require- ments will be incorporated, using the DIP (In- tegrated Development of Products) process. There were no product launches in 2016. Total portfolio: E-jets, Phenoms and Legacy 500/450 already evaluated, responsible for 84.6 % of Embraer revenue. Concluded: the technical guide containing operational guidelines for customers for the proper disposal of products at the end of their life. Started: the forming of Corporate Policy for Products' End of Life. Evaluation average (Balance Score Card) for the results of annually supported projects in the scope of the Social Partnership Program. Number of Embraer volunteers engaged in Entrepreneur- ship programs, Social Partnership Program and other social projects recognized by the Embraer Institute. Grade 4, in an evaluation of 0 to 5 points. Increase 20% the number of volunteers. 2.45 +12% (565 volunteers) 3.44 +56.72% (793 volunteers) Approval of Embraer High School students in entrance exams. Percentage of annual investment in technological devel- opment applied to projects with environmental gains. Maintain the rate of approval above 80% for Embraer High School students for their entrance exams. Continual increase of the percentage of annual investment in technological development applied to projects with environmen- tal gains, up to the minimum of 50% for the base year 2017 (resource to be applied in 2018).. Embraer Juarez Wanderley High School: 84% of public university approval Embraer Casimiro Montenegro Filho High School: 83% of public university approval 78% Embraer Juarez Wanderley High School: 86% of public university approval Embraer Casimiro Montenegro Filho High School: 87% of public university approval 80% 1. Due to fall of revenue in 2015, some indicators have been significantly altered. 2. Considering the training carried out on Anti-corruption Code of Ethics and Conduct. 3. This goal has been revisited and to ensure its achievement its deadline has been extended to the next 2018-2020 cycle. 4. Considering Scope 1 emissions related to: fugitive emissions; fuel consumption other than kerosene (jet fuel); and jet fuel consumption from production flights (the current portfolio aircraft). Fuel consumption from development flights, new product certification, as well as the Defence and Security UN aircrafts, are not considered.