contexto

Different management measures are adopted to evaluate our suppliers. We used Suzano's Supply Chain Social and Environmental Risk Matrix to segment our total supplier base and identify risks by analyzing purchasing categories from a social and environmental perspective, which includes environmental and social requirements. 


Centralized suppliers

To assess our suppliers, we have reformulated the Supplier Performance Index (SPI) with new questions incorporated into the assessment method for critical suppliers, especially in the environmental and social assessment requirements. For those that fall below the desired index, action plans are defined. If the plan is not complied with, the companies are blocked/suspended, do not receive new orders and are subject to disqualification from Suzano's supply chain. Implemented in 2022, we continued the robust second-party ESG audit process for suppliers with very high sustainability risk in 2023, auditing 245 suppliers, representing 17% of the spend contracted by the Procurement area.


Wood suppliers

Committed to sustainability practices in its supply chain, Suzano has set itself the goal of monitoring and mitigating risks in 100% of the wood supply process, covering both its management and that of its suppliers, regarding environmental, social, economic and legal requirements. 

The wood supply process includes the stages of initializing the contract (analysis of the suitability of the property and the profile of the bidder), making the contract operational (harvesting and transportation) and closing the contract.

In this sense, they are considered wood suppliers: 

  • Tier 1 [direct] suppliers: each farm is considered an individual supply unit, regardless of how many owners that farm has or whether the same owner has several farms;
  • Service providers for harvesting and transporting wood:
    • Tier 1 suppliers [direct]: wood harvesting and transportation service providers contracted directly by Suzano.;
    • Non-tier 1 [indirect] suppliers: timber harvesting and transportation service providers contracted by farm owners.

Additionally, and to which all Suzano's wood supply is subject, we have adopted the Wood Supply Policy and the Commitment to Zero Deforestation, the development of which complies with the Brazilian Forest Code, the criteria of the FSC® Association Policy, the FSC® and PEFC Forest Stewardship and Chain of Custody standards, FSC® Controlled Wood, PEFC controlled sources. Also, the fundamental principles of the International Labor Organization (ILO) and compliance with international regulations on traceability and the legal origin of wood, such as the European Timber Regulation (EUTR), the United Kingdom Timber Regulation (UKTR) and the Australian Illegal Logging Prohibition Act: European Timber Regulation (EUTR), United Kingdom Timber Regulation (UKTR), Lacey Act (United States) and Australian Illegal Logging Prohibition Act.

The practices and guidelines presented are implemented through the Due Diligence System, a monitoring program that consists of assessing and mitigating risk in the supply chain. In this way, we aim to guarantee:

  • Compliance with applicable legislation, respect for the right to property, possession and use of land; 
  • Respecting and maintaining attributes in High Conservation Value Areas (HCVAs);
  • The non-conversion of native areas into commercial wood plantations, respect for human rights, and the rights of indigenous peoples and traditional communities;
  • Compliance with health and safety items, following the ILO Fundamental Principles;
  • Verification of anti-deforestation through maps and field visits;
  • The engagement of suppliers in environmental and social issues, such as the preservation of water resources, soil and vegetation.

We have qualified technicians who audit these principles through checklists and management applications, in which documentation and maps of land use and occupation are checked, as well as field visits before, at the start of and during harvesting and transportation activities. This process starts with the formalization of the contract, which requires the planting to be in order and includes the harvesting and transport of the wood.

The audits can be documentary and/or field audits and are applied according to the type of supply [company harvest, contracted by Suzano, contracted by the owner, certified or controlled]:

  • Documentary: occur on all supplier farms, regardless of the type and certification.
  • In the field: these are operations in which Suzano or the owner(s) of the farms contract harvesting and transportation services.

In 2023, 981 documentary and/or field audits were carried out, including wood supply and services for harvesting and transporting wood:

  • In 317 wood supply areas, harvesting and transportation services were contracted by the farm owners themselves [non-tier 1 suppliers], and 317 documentary checks and 317 field checks were carried out, totaling 634;
  • In 65 wood supply areas, harvesting and transportation services were contracted directly by Suzano (tier 1), and 65 documentary and 65 field checks were carried out, totaling 130;
  • In 196 wood supply areas, harvesting and transportation were carried out by Suzano's own operation, with documentary verification totaling 196;
  • In 21 areas where wood is supplied, the suppliers are certified for forest management, with documentary verification totaling 21.

For suppliers certified for forest management and suppliers where harvesting and transportation were carried out by Suzano's operation, forest management certification standards are followed, and practices are evaluated by third-party audits. 

External audits are carried out annually by the independent certifying body, in which the criteria of the standards mentioned in additional information are verified. In the external audit that took place in August 2023 on a sample basis, by an independent certifier, at the Imperatriz (MA), Suzano and Rio Verde (SP), and Três Lagoas (MS) Units, no non-conformities were identified related to the legality of the wood supply.

If deviations are identified, there is a field guide/documentary that guides the deadlines and corrective actions to be takenMoreover, deviations are recorded in a management application to ensure the follow-up and closure of pending issues. In the event of violations of deadlines and policies, suppliers may be disqualified. In 2023, we terminated with only one supplier.

Below are four tables with the following data:

  • Total number of suppliers that have undergone environmental assessment;
  • Percentage of suppliers who have undergone an environmental assessment;
  • Total number of suppliers who have undergone social assessment;
  • Percentage of suppliers who have undergone social assessment.

Total number of suppliers that have undergone environmental assessment¹

2020202120222023
número total número total número total número total

Number of centralized suppliers evaluated

306

271

549

521

Number of wood suppliers assessed

n/d

853

1.090

981

Number of centralized suppliers identified as having significant actual and potential negative environmental impacts²

5

9

59

28

Number of wood suppliers identified as having significant actual and potential negative environmental impacts²

n/d

26

8

3

Number of centralized suppliers identified as having significant actual and potential negative environmental impacts with whom improvements have been agreed as a result of the assessment

5

9

59

28

Number of wood suppliers identified as having significant actual and potential negative environmental impacts with whom improvements have been agreed as a result of the assessment

n/d

26

8

3

  1. Centralized suppliers: For the indicator, suppliers who have undergone assessment in the Supplier Performance Index (SPI) process and a second-party ESG audit were considered. Once we have identified the significant, real and potential negative environmental impacts on these processes, in the case of suppliers who have fallen below the desired index, we define action plans. If the plan is not complied with, the companies are blocked/suspended, do not receive new orders and are subject to disqualification from Suzano's supply chain. Wood suppliers: data on wood suppliers began to be reported in 2021.
  2. For the purposes of detailing the metrics used, real and significant negative environmental impacts are considered:
  • Non-conformities about the "Environmental Management System" in the second-party ESG audit process for suppliers who failed or passed with restriction as the final result of the audit;
  • Low performance on questions in the "Environment" section of the Supplier Performance Assessment process by those who obtained a final classification as failing or passing with restriction in the same process.

Percentage of suppliers who have undergone an environmental assessment¹

2020202120222023
% % % %

Percentage of centralized suppliers identified as having negative environmental impacts

2,00%

3,00%

11,00%

5,00%

Percentage of wood suppliers identified as having negative environmental impacts

n/d

3,00%

1,00%

0,31%

Percentage of centralized suppliers identified as having significant actual and potential negative environmental impacts with whom improvements have been agreed as a result of the assessment

100,00%

100,00%

100,00%

100,00%

Percentage of wood suppliers identified as having significant actual and potential negative environmental impacts with whom improvements have been agreed as a result of the assessment

n/d

100,00%

100,00%

100,00%

Percentage of centralized suppliers identified as having significant actual and potential negative environmental impacts with whom relations were terminated as a result of the assessment

0,00%

0,00%

0,00%

0,00%

Percentage of wood suppliers identified as having significant actual and potential negative environmental impacts with whom relations were terminated as a result of the assessment

n/d

0,00%

0,00%

0,00%

  1. Number of suppliers with a negative environmental impact out of the total number of suppliers assessed in the requirement.

Total number of suppliers that have undergone social assessment¹

2020202120222023
número total número total número total número total

Number of centralized suppliers evaluated

306

283

558

519

Number of wood suppliers assessed

n/d

853

1.090

981

Number of centralized suppliers identified as having significant actual and potential negative social impacts²

4

11

71

38

Number of wood suppliers identified as having significant actual and potential negative social impacts²

n/d

53

33

7

Number of centralized suppliers identified as having significant actual and potential negative social impacts with whom improvements have been agreed as a result of the assessment

4

11

71

38

Number of wood suppliers identified as having significant actual and potential negative social impacts with whom improvements have been agreed as a result of the assessment

n/d

47

33

7

  1. Centralized suppliers: For the indicator, suppliers who have undergone assessment in the Supplier Performance Index (SPI) process and a second-party ESG audit were considered. We achieved our objective of implementing and executing a robust second-party ESG audit process, which allowed us to identify the risks and opportunities related to social issues. Action plans are defined for those suppliers who fall below the desired index. If the plan is not complied with, the companies are blocked/suspended, do not receive new orders, and are subject to disqualification from Suzano's supply chain. Wood suppliers: data on wood suppliers began to be reported in 2021.
  2. For real and significant negative social impacts, the following considerations apply:
  • Non-conformities in "Social responsibility" in the second-party ESG audit process for suppliers who were either disapproved or approved with restriction as a final result of the audit;
  • Low performance on questions in the "Social" section of the Supplier Performance Assessment process by those who obtained a final rating of failed or approved with restriction in the same process.

Percentage of suppliers who have undergone social assessment¹

2020202120222023
% % % %

Percentage of centralized suppliers identified as having negative social impacts

1,00%

4,00%

13,00%

7,00%

Percentage of wood suppliers identified as having negative social impacts

n/d

6,00%

3,00%

1,00%

Percentage of centralized suppliers identified as having significant actual and potential negative social impacts with whom improvements were agreed as a result of the assessment

100,00%

100,00%

100,00%

100,00%

Percentage of wood suppliers identified as having significant actual and potential negative social impacts with whom improvements have been agreed as a result of the assessment

n/d

5,00%

100,00%

100,00%

Percentage of centralized suppliers identified as having significant actual and potential negative social impacts with whom relations were terminated as a result of the assessment

0,00%

0,00%

0,00%

0,00%

Percentage of wood suppliers identified as having significant actual and potential negative social impacts with whom relations were terminated as a result of the assessment

n/d

1,00%

0,00%

0,00%

  1. Number of suppliers with a negative social impact out of the total number of suppliers assessed in the requirement.

Informações complementares

One of the objectives of the Supplier Performance Assessment programs and second-party ESG audits is to develop suppliers on issues that are relevant to the company. Therefore, for both initiatives, suppliers are asked to structure and comply with action plans to improve their performance, which may be one of the reasons for the reduction in the number of suppliers identified as having real and significant negative social and environmental impacts in 2023. It may also be an indication that, with the maturity of the programs, we are achieving the expected results in terms of the development of Suzano's supply chain.


Centralized suppliers

Due to Suzano's different businesses, we have implemented the Socio-Environmental Risk Matrix, which allows us to define consistent management measures in line with our Commitments to Renewing Life, guaranteeing risk mitigation from registration through to monitoring and evaluating supplier performance, in line with the Sustainable Purchasing Policy and the Supplier Code of Conduct.


Wood suppliers

The certification standards used for the analysis are described below.
 

FSC® Chain of Custody and PEFC:

  • FSC-STD-40-003 V2-1_EN - Multi_Site CoC Certification; 
  • FSC-STD-40-004 V3-1_EN - Chain of Custody Certification; FSC-STD-40-005 V3-1_EN - Requirements for the Consumption of FSC® Controlled Wood; 
  • FSC-STD-40-007 V2-0_EN - Recovered Material; 
  • FSC-STD-50-001 V2-0_EN - Requirements for the use of FSC® trademarks by certificate holders; 
  • PEFC ST 2002:2020 - Requirements for Chain of Custody of Forest Products;
  • PEFC ST 2001:2020 - PEFC trademark rules.


FSC license codes: 

  • Chain of Custody - Units in Brazil - FSC-C010014; 
  • Chain of Custody - Europe, United States and China - FSC-C012430; 
  • Chain of Custody - Distribution Center in Brazil and Argentina - FSC-C003231. 


PEFC license codes:

  • Chain of Custody - Units in Brazil - PEFC/28-32-63; 
  • Chain of Custody - Europe, United States and China - PEFC/28-32-62;
  • Chain of Custody - Distribution Center in Brazil, Argentina and Finland - PEFC/28-32-61.


Forest Stewardship: 

  • FSC® Standard: FSC-STD-BRA-01-2014 V1-1 EN - Assessment of Forest Plantations in the Federative Republic of Brazil: Harmonized Standard among Certifiers;
  • Cerflor Standard: ABNT NBR 14.789, version 2012 - Sustainable Forest Stewardship - Principles, Criteria and Indicators for Forest Plantations;
  • FSC Pesticides Policy - FSC-POL-30-001 V3-0 EN (applied to all forestry units); 
  • Ecosystem Services Procedure: Demonstration of Impacts and Market Tools - FSC-PRO-30-006 V1-2 (applied to the São Paulo Unit);
  • FSC license codes:
    • Forest Stewardship BA - FSC-C155943; 
    • Forest Stewardship ES - FSC-C110130; 
    • Forest Stewardship MS - FSC-C100704; 
    • Forest Stewardship MA - FSC-C118283; 
    • Forest Stewardship SP - FSC-C009927. 
  • Cerflor license codes: 
    • Forest Stewardship BA - SYS-FM/Cerflor-0013; 
    • Forest Stewardship ES - IMA-MF-0007; 
    • Forest Stewardship MS - IMA-MF-0005; 
    • Forest Stewardship MA - SYS-FM/Cerflor-0001;
    • Forest Stewardship SP - SYS-FM/Cerflor-0012.