Since our establishment in 2011, we have maintained a formalized Shareholders' Agreement with the intention of ensuring social and environmental criteria in the origin of our raw material, consisting of approximately 50% of our own sugarcane on leased land and 50% of sugarcane from suppliers. Through medium-term contracts, these suppliers are responsible for all the cultivation stages up to disposal for processing.
For the 50% of our own sugarcane, we have made a public commitment to adopt the Bonsucro standard, an international voluntary certification dedicated to increasing the sustainability of the sugar, ethanol, and bioenergy sector. The standard consists of a rigorous external audit process to ensure compliance with the highest environmental, social, and economic criteria for the cultivation and processing of sugarcane and its by-products. We were the first company in the world to be certified according to the Bonsucro standard, and currently 22 of our 23 mills in operation are certified. Our goal is to increase this number by the 2021/2022 harvest. For the complete list of our operations’ certifications, click here. |GRI 102-12|
Work in these locations includes monitoring the planting area using drones. Specialists from the agricultural team map the best places for planting, seeking maximum soil conservation and the sustainability of our operations. Mineral and organic fertilizers are used to ensure the healthy growth of the seedling, and technological resources control growth, identifying potential problems and mitigating possible damage. Approximately one year after planting, the sugarcane is ready to be harvested and can be processed. As signatories to Protocolo Agroambiental Etanol Mais Verde and members of the Plano de Auxílio Mútuo Externo (PAME)—a cooperative system among companies for major emergency actions—nearly 99% of our harvest is mechanized. The remainder refers to manual harvesting on land where it is not feasible to use machines. We do not perform controlled burning. |GRI 102-12|
In addition, we have developed Environmental Management Plans (EMPs) for each of our 22 units holding the Bonsucro certification. The EMPs define measurable actions to minimize environmental impacts. Each EMP is made up of ten topics: biodiversity, ecosystem services, air, water, climate change, sugarcane burning, by-products, noise, soil, and the use of chemicals.
To share knowledge and best practices with the suppliers responsible for the other 50% of our raw material, who were still far from meeting the requirements of the Bonsucro standard, we developed the ELO Program. This program is unprecedented in the global sugarcane production chain.
ELO was created in the 2014/2015 harvest in partnership with Solidaridad—an organization specializing in the development of sustainable production chains— and the Institute of Agricultural and Forestry Management and Certification (Imaflora). ELO is a pioneering program in the sector that seeks to engage suppliers in the progressive adoption of measures that encourage and support the development of economic sustainability and respect for the environment and for human and labor rights.
ELO's practices are guided by the evolution of the performance of suppliers based on criteria that include the three pillars of sustainability—environmental, social, and economic—in addition to promoting the continuous improvement of participants, who are assisted through periodic technical visits. At each visit, our team makes recommendations and offers support in prioritizing and planning actions and investments in the properties. By providing technical guidance related to production, we seek to raise our partners to another level of performance. The program is in its seventh harvest. In the last four harvests, we invested around R$20.5 million in the initiative. Currently, the nearly 2,000 sugarcane suppliers assisted by ELO, located in the states of São Paulo, Goiás, Minas Gerais, Paraná, and Mato Grosso do Sul, account for 99% of the volume purchased from third parties.
Aiming to intensify value creation and integrate the sugarcane production chain, we also developed the Cultivar Program. The purpose of this initiative is to offer solutions to our partner producers throughout the entire business journey. In 2020, the more than 300 sugarcane producers that are part of the Cultivar value platform accounted for nearly 76% of the volume of sugarcane purchased in the 2020/2021 harvest. In a harvest that was marked by the beginning of the COVID-19 pandemic, Cultivar was prepared to support producers in essential aspects of their business, ensuring initiatives that would allow for the best handling and investments in sugarcane through credit and cost reduction solutions. The lines of credit have already operated more than R$450 million, and more than R$1 billion in inputs have been invoiced via purchasing pools since these tools were launched.
Another important aspect addressed by the program during the period was the promotion of initiatives that would allow for an increase in the productivity of suppliers. With solutions aimed at increasingly efficient management and dissemination of technical knowledge in the main sugarcane operations, Cultivar has delivered more than 145,000 hectares of agricultural projects with initiatives aimed at increasing productivity. In addition to increasing productivity, this front directly impacts the quality of the sugarcane that will be produced, since it supports efficient management to control serious pests, such as the sugarcane borer.
Cash solutions, cost reduction, and increased productivity alone are not enough to ensure business success. The efficient management of resources and operations is essential for sustainable business growth, and this was an important aspect addressed by Cultivar in the 2020/2021 harvest. With solutions that include administrative management software, machinery, and precision agriculture tools, the program supported producers in optimizing resources and managing risks.
Through digital forums and virtual events, Cultivar maintained a close relationship with its partner producers during the social distancing period, delivering quality information, trends, and projections for the input, sugar, ethanol, and financial markets and supporting suppliers in making strategic decisions for their businesses.
The preparation and training of future generations were covered by the program through online courses and discussions to address this fundamental aspect of the continuity of the partner producers' businesses.
Every year Cultivar brings together the important links in the sugarcane business chain: producers, companies in the sector, leaders of our team, and other business partners to share new technologies, solutions, trends, perspectives, and to disclose the program's positioning for the harvest. In 2020/2021, the meeting was held in a digital format.
In the search for operational excellence in transportation, our relationship with sugarcane and fuel truck drivers is based on safety principles. Our fleet is monitored remotely 24/7 in order to determine distances traveled, vehicle speeds, and sudden braking and acceleration, among other aspects.
Specifically in the sugarcane transport operation, more than 2,500 drivers compete in the Conduzir Program, which evaluates them based on safe driving and economic driving indicators. The top 15 are awarded every month and receive recognition at the end of each crop year.
The highlight on the fuel distribution front is the Truck Rodeo, an event that is already part of our corporate calendar. The goal is to encourage best road safety practices among drivers who travel throughout the country. The 10th edition of the event, which started in November 2020, needed to be adapted due to the COVID-19 pandemic. The tests were held in units of the Serviço Social do Transporte (SEST) and of the Serviço Nacional de Aprendizagem do Transporte (SENAT) near the branches of the participating carriers, observing sanitation, access, and monitoring rules with approval by public health agencies. The regional practical tests were conducted in simulators with a single circuit model configured to our safe driving guidelines. Theoretical tests were carried out via live sessions at the end of each stage. The grand finale will be held in the next harvest.
In 2020/2021 we began training fuel distribution drivers through virtual reality and gamification. Through an online game, approximately 500 contractors underwent immersive experiences, performing functions they normally perform on a daily basis, such as loading the trucks, taking to the road, and safely delivering the fuel to customers. The platform, developed by the startup Sábios from the state of Santa Catarina, maps gaps in culture, behavior, and skills to guide the teams to their best performance without compromising safety.
Another important initiative we have implemented for this audience is Clube de Compras (Purchasing Club), whose main objectives are to identify opportunities for cooperation in the transportation chain, to evaluate the possibility of cost reduction through joint purchases, and to prioritize the application of these opportunities in our operation. We are currently consolidating the negotiations of all fuel carriers for the rig (truck), tank implements, truck maintenance, cargo insurance, tires, and fatigue sensor categories. Over the past three years, transactions through Clube de Compras exceeded R$580,000. The idea is to expand the initiative with new categories and to consolidate the current ones, always ensuring the best purchasing conditions.
Our fuel distribution front involves more than 4,000 drivers from service companies responsible for fuel transportation that cover approximately 250 million kilometers a year, equivalent to 500,000 trips from Rio to São Paulo.
Also in our relationship with truck drivers—both of sugarcane and fuel—a number of actions are performed in the scope of the Laço Amarelo initiative, a campaign by the National Road Safety Observatory, of which we are sponsors; and of the Na Mão Certa Program, an initiative by Childhood Brazil that brings together several companies regarding their adherence to the Business Pact Against Sexual Exploitation of Children and Adolescents on Brazilian Roadways, to which we are signatories. |GRI 102-12|
We conduct annual inspections on contracted carriers with a focus on health, safety, and environment (HSE). Only those with good performance can operate on our team. Based on these assessments, action plans are prepared, monitored by our team of advisors, and reviewed in a managerial manner by the EHS Committee of the Logistics Department. Additionally, visits are made periodically to the carriers' branches to monitor progress in the management of the following topics: HSE, Service Level, and Productivity.
Before carrying the Shell brand, the more than 7,000 service stations in Brazil and Argentina are submitted to a careful selection process, which includes commercial viability studies and compliance with environmental aspects. Those approved receive our Service Station Operation Guide, which describes the procedures to be adopted in daily activities.
We seek to develop this audience through consulting and training under the Oferta Integrada (Integrated Offer) program. Joining is voluntary and grows with each harvest as a result of the continuous improvements in our value proposition, such as the new Shell Select store concept (see more here) and Shell Box (see more here).
We have taken measures to promote sustainability at Shell service stations. Shell Lubrificantes has a partnership with the Jogue Limpo Institute, which aims to ensure the careful disposal of packaging through reverse logistics that allows for repurchase and proper disposal. The waste from the service stations is also properly treated by licensed companies in order to ensure proper transportation and disposal. |GRI 102-12, 103-13|
More information about partnerships with suppliers and service providers can be accessed here.