TCFD

Metrics and targets

a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk managment process.

We assess risks and opportunities based on the impact on business and the likelihood of risks and opportunities occurring. Therefore, risks are classified by a combination of impact and likelihood, according to the matrix of risks and opportunities defined by the Company. The impact assessment uses quantitative (financial) and qualitative (image and reputation, health and safety, compliance and ESG) criteria. The impact of the risk/opportunity can be classified as “Very High”, “High”, “Average” and “Low”. The likelihood of occurrence presents the same classifications, considering the short-, medium- and long-term time horizons defined by the company.

b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks.

Risks related to GHG emissions include: i) physical risks: heat waves, river floods, vector proliferation, windstorms, landslides, sea level rise and fires; ii) transition risks: carbon pricing, cost of fossil fuels, exposure to climate litigation, non-compliance with climate-related financial disclosure requirements, non-compliance with requirements to disclose emissions and replace refrigerants with lower emission technologies, responsibility for actions taken by suppliers and/or service providers without climate and ESG targets, and pressure to adopt voluntary decarbonization targets.

c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

In 2023, we revisited our sustainability commitments for 2030 and updated our climate-related targets. We made the following commitments: i) reduce Scope 1 and Scope 2 GHG emissions in line with the 1.5°C scenario, using 2021 as the base year; and ii) engage suppliers responsible for emissions from purchased goods and services (Category 1) to have science-based targets by 2030 (Learn more on page 94). In addition to these commitments, in 2023 we also had as targets for the Company improving the performance in the CDP climate change questionnaire and remaining in the Corporate Sustainability Index (ISE B3) portfolio, both linked to the variable compensation of all corporate employees. Some areas also had specific targets, such as the Sustainability team, which had targets related to climate change mitigation and adaptation, and the Engineering team, with targets related to the acquisition of energy from renewable sources.