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INTRODUCTION MVO NEDERLAND This report is the result of desk studies and field visits conducted by MVO Nederland, the Royal Embassy of the Netherlands in Brasilia and the Netherlands Business Support Office in Belo Horizonte. The goal of this report is threefold: 1) to study the area where compliance and risk mitigation meet sustainable business and sourcing opportunities: Corporate Social Responsibility; 2) to trigger Dutch companies in the agricultural sector to build on partnerships in Brazil; and 3) to make the companies' value chains more sustainable and futureproof. Brazil belongs to the world's largest producers and exporters for commodities such as soy, meat, sugar, maize, milk, coffee and orange juice. It currently produces enough to feed 1.2 billion people worldwide. Furthermore, Brazil is a large producer of agro-energy. An estimated 30% of the country's energy consumption is sourced from agriculture, including ethanol, biodiesel and biogas (RVO, 2018). 32 million people – more than 33% of the total working population are directly or indirectly employed in the agricultural sector. In the past years, even during the economic recession agriculture has shown steady growth. It contributes approximately 24% to the national GDP (RVO, 2018). - The trade agenda of Minister Kaag of Foreign Trade and Development Cooperation prioritises Brazil as one of the nine most important markets for the Netherlands. The total import volume from Brazil to the Netherlands in 2017 was 4.06 billion euros, while the total export reached a volume of 2.47 billion euros. The trade relationship between the Netherlands and Brazil is strong: in 2018. Brazil exported for over €11 billion of goods to the Netherlands, making it the fourth largest destination for Brazilian exports. Dutch exports to Brazil were significantly lower, worth €1,4 billion, but the Netherlands has consistently been one of the five largest foreign investors in Brazil. Agricultural products form an important part of the bilateral trade. The Netherlands is one of the largest importers in the world of Brazilian soy, cellulose, orange juice, among many other products. In 2018, the value of Brazilian agricultural exports to the Netherlands was US$4.5 billion. Agriculture is also a priority sector for the Dutch diplomatic network in Brazil, consisting of the Embassy in Brasilia, two Consulate-Generals in São Paulo and Rio de Janeiro, and two Netherlands Business Support Offices (NBSO) in Belo Horizonte and Porto Alegre. The network seeks new opportunities for Dutch companies to start doing business in Brazil or to extend their current activities, by matching Brazilians needs with Dutch knowledge, technology or products. Stimulating Brazilian exports to the Netherlands is obviously not a priority, especially given the commercial imbalance. However, being one of the main importers of Brazilian agricultural goods also comes with a responsibility. This research conducted by MVO Nederland, the Embassy and the NBSO in Belo Horizonte sprouted from the wish by the Embassy to explore the opportunities for doing more sustainable and responsible business in the agricultural sector. The preliminary work done for this report consists of desk studies and interviews with companies in the Netherlands and Brazil to come to a sector definition, and gain insights in the practical experience with sustainability themes such as labour issues, certification and environmental strains caused by production. 3

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