Suzano's supply chain is diverse and consists of suppliers segmented into macrocategories: operations, services, logistics, marketing and sales, and even support activities, such as infrastructure and technological development. In 2023, we had approximately 14,700 suppliers, of which 32,100 were in our database. We spent approximately BRL 42.5 billion paying suppliers. 
In 2023, the purchasing process achieved a Net Promoter Score (NPS) of 78 in a supplier satisfaction survey performed by a specialized global consulting firm.

1. CENTRALIZED SUPPLIERS
Processes and Policies Applied by the Responsible Supplier Management Program.

Governance
With the aim of closely managing our extensive supplier chain and globally integrating sustainability into purchasing processes, the Responsible Supplier Management Program (RSM) was created in 2021. This program has a dedicated team for monitoring and developing partners through policies, procedures, and controls to identify, evaluate, and mitigate their ESG risks.
The ESG Supplier Program is overseen by executive leaders from the Sustainability and Procurement areas, who deliberate quarterly on the implementation of ESG initiatives. Suzano's procurement guidelines, such as the Sustainable Purchasing Policy, are reviewed every 24 months to prevent possible violations of ESG requirements and ensure compliance with the Supplier Code of Conduct.

Approval and Registration process
The approval and registration process covers 100% of our suppliers, including mandatory documentation according to the contracting segment. We include sustainability requirements in this process, evaluating mechanisms and strategies related to social management and performance, corporate governance, quality management systems, integrity, due diligence and the environment.
To be hired, suppliers must go through a certification process that aims to ensure compliance with established legal, technical, and conformity requirements. They also participate in the Supply Supplier Management processes, which verify their regularity with the state, validate and manage mandatory licenses and documentation, perform preliminary assessments of minimum quality and ESG requirements, collect market information, and confirm adherence to the Supplier Code of Conduct.
To confirm compliance with minimum ESG requirements, supplies must complete a self-assessment including the following aspects:

• Social: Respect for human rights and diversity and regular labor practices, commitment to ending child, forced and compulsory labor.
• Governance: Anti-corruption practices.
• Environment: Conscious water consumption, regular waste management, monitoring and reporting of greenhouse gas emissions.
• Quality: Proper mandatory documentation, ISO and FSC certifications, quality management procedures and policies, adequate infrastructure.

The certification process also includes Background Checks (BKG) of eligible suppliers. This procedure verifies information of various natures (reputational, administrative, judicial, criminal and others) pertaining to individuals and legal entities registered in Suzano’s supplier database. Background check reports contain information from different sources, including media and legal analyses of different ESG topics, such as compliance with environmental, labor, corruption and criminal laws; ethics and integrity; financial, fiscal and reputational standing; and judicial and administrative lawsuits. The analyses are valid for 6 to 18 months, depending on the supplier’s score.
Suppliers are excluded from contracting when there is any irregularity and/or failure in any of the stages of the certification processes, including not obtaining the minimum required score (higher than 30%) in any of the self-assessment questionnaires (quality, social, governance or environmental). The entire process is described in our Sustainable Procurement Policy and Supplier Code of Conduct.
In 2023, 72% of suppliers were approved based on environmental criteria and 100% on social criteria. For further information, find more information on the indicator “Total number and percentage of new suppliers selected based on environmental and social criteria”. 

Selection of Critical Suppliers 
Below, we describe the methodology established for the selection of critical and priority suppliers for participation in the Supplier Risk Management and Performance Evaluation processes. We consider critical suppliers those who have commercial relevance and: 

• Provide items with the potential to generate significant impacts on the capacity or quality of products, process performance, equipment and employee safety, the health of our team, and the integrity of equipment or suppliers; or 
• Have a high sustainability risk. 

To classify suppliers according to their sustainability risk, Suzano uses the Supply Chain Social and Environmental Risk Matrix, which allows for the establishment of consistent ESG monitoring criteria, aligned with the company's Commitments to Life Renewal and the Sustainable Development Goals (SDGs).
For the construction of the Social and Environmental Risk Matrix, the company's entire supplier base is segmented according to the sector in which the companies operate, considering social, environmental, and governance aspects. Suppliers are classified as high sustainability risk if they belong to sectors with a high level of severity and probability of socio-environmental impact and a high level of Suzano's co-responsibility.
Suzano considers ESG a decisive factor in the supplier evaluation and selection matrix. This means that when suppliers are on equal terms, the one better positioned in terms of sustainability will be preferred by the company.

Risk assessment
We continued to conduct external social and environmental second-party audits of high-risk suppliers, a practice we started in 2022. The process considered suppliers that had been prioritized in the first cycle of the initiative. More than half (60%) of the audited suppliers were also monitored using the Reprisk platform. Reprisk also provides supplier ratings (RepRisk Rating – RRR), which considers company-specific ESG risks and industry-specific ESG risks at a national level.  
All suppliers that have been audited must present corrective action plans within 15 days of the publication of the results, addressing the issues identified. We require that corrective measures be implemented within 90 days by suppliers that have failed our assessment, within one year by suppliers that have been approved with restrictions, and within a year and a half by approved suppliers. Both the audit firm and Suzano continue to monitor and support the supplier throughout the implementation process.

Supplier Performance Evaluation
The Supplier Performance Index (SPI) program, which evaluates critical suppliers, was reformulated to include new questions, primarily regarding environmental, social and safety requirements, with an average approval rating of 96%. For suppliers that fall below the desired index, Suzano’s contract managers develop corrective and improvement plans, and support and monitor them in the implementation of the actions. Failure to comply with the actions outlined in the action plans may result in the supplier being blocked, suspended or disqualified from our databased.

Supplier ESG Engagement and Development Programs
As part of our commitment to supporting and training our suppliers, we implement several projects to increase the commitment of our supply chain to ESG issues. The Semear project, conducted in partnership with SEBRAE, a private organization that promotes entrepreneurship in Brazil, is a support program that lasts between six and 12 months and focuses on building capacity and improving the ESG performance of Suzano’s micro and small suppliers. They learn about best practices in management and innovation, as well as about legal, social and environmental responsibility principles. We also created a version of the program focused on female entrepreneurship, including socially vulnerable women living in communities around Suzano sites in Brazil.
The programs "Climate Change" and "Caring for Water in the Value Chain" aim to encourage suppliers to commit to reducing greenhouse gas emissions and improving water resource management. To facilitate this, we have partnered with the Carbon Disclosure Project (CDP) to engage and support our suppliers in measurement, data transparency, goal setting, and risk and opportunity assessment related to climate change and water use. We also help expand knowledge on the subject throughout the value chain through training programs, workshops, and webinars conducted by CDP and Suzano. Through the CDP, cyclical meetings are held to share best practices, allowing our suppliers to have ESG benchmarks. The suppliers selected to participate in these programs are those of greater commercial relevance to Suzano, among those identified as high risk in the "Greenhouse Gas Emissions" and "Water and Effluents" hotspots by the Socio-environmental Risk Matrix.
Another ESG program offered by Suzano to its supplier is Inclusive Sourcing, which was designed to engage and motivate our supply chain to leverage diversity, equity and inclusion. To do so, we identify and facilitate diversity initiatives across our supply chain, which has included, for example, carrying out a Diversity and Inclusion Census among our suppliers. One of the highlights of this project is our partnership with JSL, a Brazilian logistics services company, in the Mulheres na Direção (“Female Drivers”)  initiative, which trains women to operate forklifts at Suzano sites in Brazil. Based on the results of this project, we held meetings to share best practices with suppliers from different procurement categories and developed new projects.  We also host supplier engagement events, such as Suzano Valoriza, a program created to recognize our suppliers based on their ESG performance and indexes, and Bioconexão, a biodiversity-focused meeting held in the Neblinas Park, an environmental reserve located in the Atlantic Forest and maintained by Suzano.

Implementation of technologies
Our automation and data analysis have evolved to improve risk prediction processes, ensure efficient audits in the supply chain and support decision-making, leading to more responsible purchases. In this regard, we have established and maintained important partnerships to support us on this transformation journey, including with the platforms Linkana and RepRisk.

2. WOOD SUPPLIERS  

The supply of wood, assessed from an environmental, social and economic perspective, is defined as critical and of high sustainability risk in the Social and Environmental Risk Matrix (Sustainable Purchasing Policy). As a further risk assessment methodology, we use internationally recognized certification standards and regulations, such as the FSC® standards, the National Risk Analysis for Brazil, the European Timber Regulation (EUTR) and the United Kingdom Timber Regulation (UKTR), which are covered in the Wood Supply Policy.

For wood suppliers, sustainability risks are defined considering five categories: illegally harvested wood; wood harvested in violation of traditional and civil rights; wood harvested from forests in which high conservation values are threatened by management activities; wood harvested in forests being converted to plantations or non-forest uses; and wood harvested from forests in which genetically modified trees are planted. For these suppliers, in addition to our Wood Supply Policy, we have a commitment to Zero Deforestation, which complies with the Brazilian Forest Code and forest management standards, chain of custody and controlled wood (FSC®, PEFC) and international regulations. The monitoring processes and risk mitigation are detailed in the indicator "Total number and percentage of suppliers that have undergone environmental and social assessment".

Committed to sustainable practices in the supply chain, Suzano encourages its wood suppliers to seek FSC® and/or PEFC Forest Management certification. To ensure responsible sourcing of wood from partners who do not participate in the forest management certification program, we apply a due diligence system based on the company's Wood Procurement Policy, international regulations and FSC® and PEFC Controlled Wood/Sources standards. Due diligence verifies compliance with environmental, social, legal and labor requirements in first and second party audits, as well as third party audits performed by independent entities. This involves both direct wood suppliers and indirect suppliers involved in harvesting and transportation.

The tables below provide the following information:

• Total number of critical suppliers;
• Percentage of critical suppliers;
• Supplier selection.