At the end of 2017/2018, our team totaled 29,514 employees, 86% men and 14% women, the majority (93%) concentrated in the Southeast.

In 2017/2018, the highest turnover rates were recorded in April 2017 and January 2018, with a high number of hires; and March 2018, with a high number of terminations - which is due to the beginning and end of the harvest, respectively. In December 2017, there was a large number of terminations due to the hibernations of the units of Tamoio, in Araraquara (SP), and Dois Córregos, in Dois Córregos (SP). May 2017 was the month with the largest number of employees (active and on leave)

Percentage of employees by region

Sugarcane producers

Our Agricultural Business team is responsible for contracts with suppliers of sugarcane, and the Sustainable Development team is responsible for managing initiatives such as the ELO Program. In 2017/2018, a total of BRL 3,550,000 was invested in the relationship with this audience.

Carriers

In the harvest, expenses for fuel and sugar carriers totaled approximately BRL 1.35 billion. Spending on suppliers results from negotiations that establish a fixed amount, to be paid for the availability of each truck, and a variable amount, depending on the mileage traveled at our service. Carriers - responsible for pickup, transfer, and delivery of the products - are located in all regions in Brazil, with the highest concentration in the Southeastern and Southern regions.

Supply chain

Information provided here.

In 2017/2018, we completed a study that mapped the main risks and opportunities arising from climate change in each business and in the long-term (up to 2040). The results were added to our risk management process and to strategic planning.

Regarding the risks, we recorded those referring to changes in water dynamics (increase of drought periods and consequent competition for a scarcer resource) and the higher incidence of extreme weather events. On the other hand, in the field of opportunities, there is space for differentiated public policies and lines of credit - with increasing incentives for production and marketing of low-carbon energy solutions such as biofuels and electricity from alternative sources, products that are part of our portfolio. In addition, sugarcane is a crop that potentially benefits from the increase in average temperatures.

The risks and opportunities mapped out are of either a physical, regulatory, reputational or market nature. The impacts associated with these risks would mainly result in reduced productivity or damage to our physical structures, while the opportunities would result in greater market share, easier access to low-cost credit and larger areas for sugarcane cultivation.

The potential financial implications were not quantified on a consolidated basis, but they would certainly be substantial. We do not monitor expenditures to manage such risks and opportunities, even though we understand that they occur constantly whenever we invest in the efficient use of agro-industrial resources as we reduce our carbon intensity.

Our Salary Management Policy aims to maintain attractive salary ranges compared with other companies in the market. The goal is to ensure that even the lowest salary paid is equal to or higher than the floor of the Union category. In 2017/2018, the lowest salary paid to men was 112% and to women it was 116% of the Brazilian minimum wage, which ended 2017 at BRL 937.00. Thus, the lowest wage paid was 1.12 times higher than the national minimum wage. Regarding the minimum wage in São Paulo¹, the lowest amount paid to men and women was equivalent to 101% of the floor established for the State.

1 This excludes the Jataí unit in Goiás.

We do not monitor remuneration of contractors; however, we prioritize partnerships with reputable companies.

In 2017/2018, more than BRL 11 million was invested in various social projects.

Number of people benefiting from Raízen's social projects ¹

1 We considered the number of direct and indirect beneficiaries; the number of indirect beneficiaries was estimated.

Raízen’s social investments, in BRL thousands

1 Social projects with incentives from FUMCAD, PRONON, and IMF.
2 Operation under the following pillars: professionalizing, social-educational, and education and citizenship projects in the community (at no cost).

Impacts on surrounding areas were not evaluated.

In 2017/2018, approximately BRL 3.56 billion was spent on suppliers, of which 15% refers to contracts with local suppliers.

Percentage of spending on local suppliers, by regional complex (%)

1 Indices refer to SAP ECC (mills). As of 2017/2018, all purchases by the Procurement area are considered.

Considering purchases with suppliers registered in the same State where each mill is located, we have the following result:

Percentage of Procurement spend on local suppliers, by State (in %)¹

1 All other States account for less than 20% of purchases. Totals for AM in 2016/2017 are unavailable because, in the previous harvest, the State was included in the "other States" category.

In 2017/2018, we submitted 100% of our operations to risk assessments related to corruption. The risks refer to negotiation with counterparts under administrative or judicial investigation, in Brazil or abroad; trade negotiations with PEPs (Politically Exposed People); exposure of employees who interact with public agencies and autonomous public agencies, and quasi-public companies. More information regarding this topic can be found here

In 2017/2018, all members of Senior Management were informed about anti-corruption policies and received training on the subject. Communications addressed to business partners and employees or training provided to employees on the subject were not considered.

Training is provided whenever an employee joins our team and is refreshed every two years, except for employees with exposure to risks, who have a different frequency - possibly annual - and may require training from the Compliance area at any time about general topics or specific subjects.

In 2017/2018, our Ethics Channel recorded 35 reports associated with fraud, bribery, embezzlement/theft and antitrust - in 24 operations (15% of the total), of which eleven were confirmed (five cases of fraud, five of embezzlement, and one of bribery). As a consequence, nine cases resulted in termination of employees and one case resulted in termination of the agreement with a business partner.

There were no cases of unfair competition in the reporting period. To prevent occurrences, we offer antitrust online and classroom training, which will be relaunched in 2018/2019.

In 2017, our energy consumption was greater than 168 million GJ and 8,392,352.58 GJ were sold through government or spot market auctions.

We map the energy consumed in transportation of our products. In 2017, contracted carriers consumed 6,589,225.19 GJ¹ in fuels.

1. The conversion factor available in the National Energy Balance was used for the calculation. The information is collected for calculating emissions using the methodology of the GHG Protocol and has been taken from the Report on Greenhouse Gas Emissions (GHG).

In the 2017/2018 harvest, our energy intensity was 2.92 GJ consumed from scope 1 sources, per ton of sugarcane crushed; and 0.01 GJ from scope 2 sources, per ton of sugarcane crushed. The energy used to calculate the indicator included the energy consumed within the organization and the energy sold (from the burning of sugarcane bagasse).

In 2017/2018, we withdrew 58,023,538 m³ of surface waters and groundwater to be used in industrial and irrigation processes, among other uses. This is our most significant consumption. Thus, other activities were not considered in the calculation of this indicator. Data for the new units (Paraíso and Santa Cândida) will only be included as of the next report.

Total volume of water withdrawn, in m³

1. Total withdrawn from April 1 to December 31, 2017.
2. Total withdrawn from January 1 to March 31, 2018.

We operate industrial units and sugarcane cultivated areas leased from third parties in the States of São Paulo, Mato Grosso do Sul, Goiás and Paraná, totaling more than 800,000 hectares. One of the ways to ensure preservation of biodiversity is through the Bonsucro certification, which reached 20 units at the end of the 2017/2018 harvest. This is because, among the criteria used for certification, is that there cannot be sugarcane cultivation in protected areas or in areas of high conservation value. Although biodiversity is one of the topics addressed in Bonsucro’s Environmental Management Plan for certified units, we do not have a methodology to estimate the value of biodiversity for the locations where we operate.

The flow of trucks around production units and emissions of pollutants due to industrial activities can interfere with the dynamics of the region's wildlife, which we understand as the greatest potential impact of our activities on biodiversity. In addition, the use of substances to control pests and insects can have adverse impacts if not well managed. Therefore, we use biological pest control and optimize the application of fertilizers and pesticides. The potential impacts of this category would be related to the practices of intentional pre-harvest burning (slash and burn) of sugarcane fields. Considering that this practice is 100% extinct in our operations - in line with the commitment we voluntarily assumed in the Agro-Environmental Protocol - it is our understanding that the impacts on biodiversity have been significantly reduced. Other relevant potential impacts associated with agricultural practices and that should be fought are loss of riparian vegetation, curbed by mapping the existing preservation areas on properties we manage, and the road kill mortality rate of animals, which is mitigated through training initiatives for employees and appropriate signage. We do not monitor other impacts such as changes in ecological process and conversion of habitats. Also, regarding the impacts identified, we do not monitor the extension of impacted areas or duration and reversibility of impacts.

Information provided here. We include, in our inventory of emissions, 100% of the operations over which we have control or influence, even when control is shared.

Gases considered in the calculation were: CO₂, Methane (CH₄), nitrous oxide (N₂O), sulfur hexafluoride (SF6), nitrogen trifluoride (NF3) and the families of hydrofluorocarbon (HFC) and perfluorocarbons (PFC) gases. Emissions from SF6, NF3 and PFC gases are not applicable to our activities. In the case of indirect emissions from the purchase of energy, however, emissions consider only CO2, as per calculation conducted and made available by the Ministry of Science, Technology, Innovation and Communications (MCTIC).

This report also includes the operations of the two production units acquired in 2017: Santa Cândida and Paraíso – although they were not under our operation for the entire reporting period. Therefore, these emissions were estimated based on an extrapolation of data from nearby units. In addition, for the first time, we estimated the emissions of N2O referring to the incorporation of nitrogen from straw into the soil after sugarcane harvest. For these two reasons, the numbers referring to 2017 present a significant increase in relation to historical emissions.

We consider 2013 as the base year, since it better represents the scope of our activities. In that year, we incorporated into our inventory the emissions from vinasse and filter cake, which accounted for 14% and 18%, respectively, of total emissions from fertilizers.

Calculation refers to the 2017 calendar year and was performed according to the specifications of the Brazilian GHG Protocol Program - developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) -, managed in Brazil by the Center for Sustainability Studies (GVces) of the Business Administration School of the Getulio Vargas Foundation (FGV-Eaesp); and standards NBR ABNT ISO 14.064-1 – guidance to quantify and report emissions and removal of greenhouse gases. Where applicable, the methodology also followed the determinations for calculations set out in the 2006 IPCC Guidelines for National GHG Inventories of the United Nations and in the Reference report of the Second National Inventory. The main sources of the emission factors used were:

• IPCC, 2006;
• Ministry of Science, Technology, Innovation and Communications (MCTIC);
• 2017 Guidelines to Defra / DECC's GHG Conversion Factors for Company Reporting;
• Greenhouse gas emissions in production and use of ethanol from sugarcane in Brazil;
• Calculation tool of the GHG Protocol Agriculture Guidance;
• Third Inventory of Brazilian Anthropic Emissions of Greenhouse Gases: Reference Reports of Nitrous Oxide Emissions from Agricultural Soils;
• Internal studies.

The global warming potential rates adopted as reference used the PAGs presented by the IPCC Fourth Assessment Report: Climate Change – Errata (2007) for a time span of 100 years.

In 2017, the overall intensity rate of our GHG emissions was 0.0273 tCO2eq and was determined from the summation of scope 1 and 2 emissions, divided by the total sugarcane crushed. The GHGs included in the emission calculations are those controlled by the Kyoto Protocol: CO₂, CH₄, N₂O, SF6, NF3 and the families of HFC and PFC gases. Emissions from NF3, SF6 and PFCs are not applicable to our activities.

We recorded four controllable spills, of which: two in an uncontained area, with a spill of 9,316 liters of ethanol; and two in contained area, with 534 liters of diesel and 19,000 liters of kerosene - recovered. There were no significant spills¹ for the purpose of our financial statements.

We monitor all spills, in both contained and uncontained areas, regardless of whether or not they are significant. All events are recorded, their causes are investigated and actions are planned to mitigate impacts and prevent recurrences.

1 Greater than BRL 1 million.

In 2017/2018, we received five non-monetary sanctions - most of them related to contaminated areas, industrial effluents and fire-related incidents in sugarcane fields - that are being addressed at administrative and/or judicial levels. No significant environmental fines were recorded¹.

1 Total greater than BRL 500,000.

Sugarcane producers

The process to hire sugarcane suppliers is associated with the signing of a term of general clauses and conditions considered essential for conducting business ethically and responsibly. The sustainable practices of sugarcane suppliers are also analyzed as part of the ELO Program.

Carriers

100%

Supply chain

100%

Sugarcane producers

None.

Carriers

In 2017/2018, a carrier presented TRC/TRCF (reportable accident), two of which resulted in spills in uncontained areas and three were involved in accidents of controllable potential. Thus, six suppliers caused impacts, equivalent to 15% of the total number of suppliers in the area. In the same period, an operational agreement was terminated due to a performance level below required and potential for generating impacts. In addition, this supplier did not conform to the recommendations identified in inspections.

Supply chain

We consider negative social and environmental impacts: having contracts with companies that employ people under slave or compulsory labor or that do not collect taxes of their employees in a timely fashion; negotiating with suppliers involved in acts of corruption, suppliers that are not in good standings regarding taxes and that do not comply with the contractual conditions for term and quality.

In the harvest, 1,038 suppliers were assessed and registered, and additional 632 were retrained. In addition, 232 strategic suppliers participated in the performance monitoring (Supplier Training Index - IQF), of which 11 suppliers were blocked because they did not meet our minimum requirements for term and quality, and 91, with poor performance, participated in meetings to define action plans, and 21 of them showed improvements in the evaluation.

Twenty suppliers were blocked, since they were blacklisted for Slave Labor, 81 for involvement in the Lava Jato operation, and 384 because they were in the National Registry for disreputable and corrupt companies.

1 The average number of active employees is calculated based on the number of active employees in the month, less the employees hired in that month. The numbers do not include interns, but include young apprentices. In the 2016/2017 harvest, another calculation was used, which considered young apprentices and, thus, the numbers are comparable.

In 2017/2018, a total of 1,000 employees took maternity/paternity leave, as shown in the table below:

Use of maternity/paternity leave and rate of return¹

1 Since it is not possible to determine the number of employees who were entitled to take paternity leave in the period, considering that it is not possible to quantify the total number of male employees who actually had children in the period, the indicator considers the total number of employees who requested the benefit in the period covered by the report.

All our employees are represented in formal health and safety committees. Several employment levels are involved in each business unit, as described below:

Ethanol, Sugar, and Bioenergy (EAB):

• Corporate HSE Committee: President, Vice Presidents, Directors, Managers and other representatives of HSE and of the operational areas;
• Production Meeting: Vice President of EAB, Chief Operating Officers, Corporate Officers, and Managers of complex1;
• Meeting about Total Quality Raízen (QTR - Qualidade Total Raízen): Unit Administrative Coordinator, Operational Managers, at least one member of the Specialized Service in Safety Engineering and Occupational Medicine (SESMT) and other representatives of the areas according to the agenda of the meeting;
• Internal HSE Committee - per unit: Unit Industrial Manager, representatives of the Employees and representatives of the Employer.

Logistics, Distribution, and Trading (LD&T):

• Corporate HSE Committee: President, Vice Presidents, Directors, Managers and other representatives of HSE and of the operational areas;
• HSE Committee Operations: HSE Operations Manager, Operations Managers, HSE Advisors, Chief Operating Officer, Operations Managers, Operations Support Group and other representatives as needed;
• HSE Committee Transportation: Logistics Director, Transportation Manager, Transportation Advisors, HSE Transportation Coordinator and Advisors and other representatives as needed;
• Internal HSE Committee (CISSMA), per terminal: Manager, superintendent, employees, and terminal contractors.

Comercial

• Corporate HSE Committee: President, Vice Presidents, Directors, Managers and other representatives of HSE and operational areas;
• Commercial HSE Committee (MTC): Commercial VP, HSE Directors, Sales, Retail, B2B, Engineering, Finance and Aviation;
• Operational Committee of Commercial HSE : HSE Directors, HR and other appointed directors, HSE Manager;
• Light Fleet Committee: Representatives of administration (directors).

1 Responsible for taking the information to Unit managers and supervisors.

Health and safety indicators follow the standards set out by NBR 14.280 and OSHA 3.245 09R, as well as internal procedures: Element 7 of the Operations Management System (SIGO) and PMR Specification Shell. Minor injuries (first aid) are not considered in the Lost Time Injury Frequency (LTIF) or Total Recordable Case Frequency (TRCF) indices, but are monitored and tracked. To record exposure and accidents, we have in place external systems (Work Accident Communication - CAT, NEXO System) and internal systems (Sustainability Indicators System - SIS, Emergency Response Center - CAE, and AlertaWeb).

The numbers of accidents and fatalities refer only to accidents classified as controllable/avoidable, i.e., those that are included in the HSE indicators due to characteristics of relevance for learning, actual consequences, potential risks or operational and reputational impacts.

The following information is available for each business unit:

Ethanol, Sugar, and Bioenergy (EAB)¹

Main results for occupational health and safety for EAB:

1 Does not include data from the Shared Services Center (SSC). However, no accidents were recorded in this unit in the crop year.

Lost time injury frequency for own employees and contractors, by region (LTIF/TF)

1 The information about this region started to be reported in 2017/2018, and as such, it is not available for previous years.

Total Recordable Case Frequency for own employees and contractors (TRCF/TAR)

1 The information about this region started to be reported in 2017/2018, and as such, it is not available for previous years.

Number of fatalities of own employees and contractors

1 The information about this region started to be reported in 2017/2018, and as such, it is not available for previous years.

Logistics, Distribution, and Trading (LD&T)

Main results for occupational health and safety for LD&T

1 One controllable accident without lost time in the northern region of the country, involving a male employee.

There were no fatalities in the period.

Commercial

Main results for occupational health and safety for the Commercial area

1 One controllable accident without lost time in Aviation Operations, in the northern region of the country, involving a male employee.

There were no fatalities in the period.

Health management

Indicadores de gestão da saúde discriminados por negócio

Health management indicators for EAB¹

1. Data not available for LD&T and Commercial, but they are already being recorded and will be reported starting next harvest.
2. The calculation methodology was modified in 2017/2018.
3. Calculation method: (number of diseases) / (MHW) *1,000,000
4. Considering lost days due to work-related accidents.
5. Calculation method (where MHA is the number of man-hours absent on medical leave - typical and commuting accidents and diseases less days on leave paid for by social security - INSS): (MHA) / (MHA + MHW) *100

Rate of occupational diseases¹ for own employees, by gender and region

1 Calculation method: (number of diseases) / (MHW) *1,000,000. Includes only Raízen Energia (EAB).

Total number of lost days¹ for own employees, by gender and region

1 Considering lost days due to work-related accidents. Includes only Raízen Energia (EAB).

Absenteeism rate¹ for own employees, by gender and region

1 Calculation method (where MHA is the number of man-hours absent on medical leave - typical and commuting accidents and diseases less days on leave paid for by social security - INSS): (MHA) / (MHA + MHW) *100

We did not monitor absenteeism rate, number of lost days and rate of occupational diseases related to contractors and employees of Commercial and LD&T.

We comply with the legislation that provides on occupational health and safety standards, although not all aspects are provided for in the collective bargaining agreements. We established clauses referring to this topic, such as the provision of Personal Protective Equipment (PPE), first aid, composition of the Specialized Service in Safety Engineering and Occupational Medicine (SESMT), conditions of vehicles that transport and provide assistance to the injured, reinforcing what is already provided for in current labor legislation.

In 2017/2018, we offered an average of 29.06 training hours for men and 14.06 for women. Training totaled more than 849,000 hours, offered through more than 18,757 classes in 22,152 training sessions.

The steps to determine the need for training, planning of activities, execution, recording and evaluating results are defined based on the requirements of standard ISO 9001:2015, in which we are certified.

This process is monitored through the Effectiveness Dashboard Assessment, based on feedback from an evaluation sent to the manager of participants, preferably 90 days after each training course. The goal for this indicator is greater than or equal to 90%. In 2017/2018, the result was 100% effectiveness of the activities evaluated.

Below is the breakdown by gender and employment category:

Average number of training hours per employee, by gender

Average number of training hours per employee, by employment category

There were more than 39,000 hours of classroom training and more than 56,000 hours of online training for Logistics, Distribution and Trading (LD&T) employees - the unit does not monitor training for third parties. The Commercial unit offered a total class time of 7,983 hours for employees and 197,771 for contractors, as detailed below:

Training for the Commercial area

Other results of Raízen's learning programs

In 2017/2018, 15% of the male employees and 46% of the female employees received performance and career development reviews. Below is the breakdown by employment category:

Percentage of employees receiving regular performance and career development review, by gender (%)

Percentage of employees receiving regular performance and career development review, by employment category (%)

Percentage of employees by employment category, age group and gender, in the 2017/2018 harvest (%)

Percentage of People with Disabilities (PwD) by employment category and gender

Percentage of members of the governance bodies, by gender (%)

Percentage of members of the governance bodies by age group and gender (%), in the 2017/2018 harvest

We do not monitor other indicators of diversity.

Eight reports of discrimination were recorded by the Ethics Channel in the period. The cases were investigated by the relevant areas and, depending on the origin of the report, administrative measures were taken, such as verbal and written warning or even termination of the employee. We also received 47 labor lawsuits related to discrimination during the crop year, which were analyzed by the Legal Department. All cases were considered to be founded, 41 are under analysis and 6 were completed in the crop year.

None. Our managers are made aware of the role of Labor Unions, the dynamics of collective bargaining, and the labor legislation in effect. Furthermore, we train all managers and operation leaders in all business units.

Although the sugarcane chain is labor intensive, we have identified that there is no significant risk in the supply chain due to the actions carried out under the ELO Program. The actions involve technical follow-up, document checks, visits to suppliers, definitions of improvement plans, among other actions.

Although the sugarcane chain is labor intensive, we have identified that there is no significant risk in the supply chain due to the actions carried out under the ELO Program. The actions involve technical follow-up, document checks, visits to suppliers, definitions of improvement plans, among other actions.

In the supply chain, documents of the companies hired are checked and, in the case of irregularities, a block from new contracts is put in place until the issue is resolved. In the crop-year, 20 suppliers were suspended because they were blacklisted for slave labor.

In 2017/2018, there were no incidents of violations involving rights of indigenous peoples.

On average, 37% of our operations undertake programs for engaging surrounding communities and assessing impacts. Another 21% create programs for local development.

Scope of programs developed by Raízen, in percentage, by type of operation and program

Potential or actual negative impacts on communities surrounding the agricultural and industrial operations of our production units include:

• Noise from nighttime cutting and loading operations;
• Dust, vibration and noise generated by transportation of sugarcane;
• Odor and possible contamination of neighboring crops or soil resulting from the application of vinasse and agricultural pesticides;
• Noise and odor in areas surrounding industrial plants - generated by industrial operations.
• Shutting down of a production unit in municipalities with small population, since the units are labor-intensive and layoffs can negatively impact the local economy.

We do not make contributions to political parties or candidates nor provide assets (physical, human and/or financial) for election campaigns.

In 2017/2018, we recorded three infraction notices by Regulatory Agencies, which totaled BRL 380,100. In addition to the three fines indicated above, we point out the receipt of four notices of infraction for the sale of hydrous ethanol out of specifications concerning methanol content. We filed an appeal against the notice of infraction and the cases are awaiting judgment by the ANP.

1 We considered occurrences that represented significant and non-standard notices of infraction received

There were no non-monetary sanctions or proceedings brought by arbitration mechanism in the period.

The topic is managed by the legal areas² of the business units, which evaluate nonconformities and fines received in order to identify causes and address the problems. Regarding tax matters, the contingency related to significant fines, notices of infractions or sanctions drawn up by public agencies, object of administrative or legal proceedings, for alleged non-compliance with tax laws and regulations in the harvest period, is duly reported in the Financial Statements of Raízen Energia S.A. and Raízen Combustíveis S.A., available here.

2 Each area is responsible for setting the criteria for significant fines and sanctions.