Suzano S A : Indicators Book 2023

INDICATORS

BOOK Suzano 2023

#COMMITMENT TO RENEWING LIFE

REMOVE 40 MILLION TONNES OF CARBON FROM THE ATMOSPHERE BY 2025

Material Topics: Climate change

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Frameworks

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Commitment: REMOVE 40 MILLION TONNES OF CARBON FROM THE ATMOSPHERE BY 2025

Our progress

67.8%

Context

Climate change is a major global challenge. The planet has been experiencing temperature increases, especially due to anthropogenic actions, which promote the emission of greenhouse gases (GHG), resulting in a series of impacts on natural ecosystems and communities and the development of economic activities.

The Intergovernmental Panel on Climate Change (IPCC), in its report Climate Change and Land1, describes that "all modeled pathways assessed that limit warming to 1.5°C or well below 2°C require land mitigation and land use change, with most including different combinations of reforestation, afforestation, reduced deforestation and bioenergy with high confidence."

Suzano has a significant forestry base, with a total area of approximately 2.8 million hectares, which includes eucalyptus plantations (afforestation) and one of the largest areas of privately protected native forests in Brazil (conservation and reforestation), with approximately 1.1 million hectares. We have strategies to expand into anthropized or degraded areas for the next few years, increasing the vegetation cover. Conservation areas and eucalyptus plantations together contribute directly to the removal and storage of carbon dioxide (CO₂).

We understand that combating climate change is a collective responsibility, and our integrated business operations - from forests to industrial units - position us as a key contributor to this effort. Acknowledging the urgency of action, Suzano has reaffirmed its commitment to carbon removal by advancing its target to remove 40 million tonnes of CO₂e from the atmosphere in five years, from 2030 to 2025. Our commitment goes beyond neutralizing emissions; we aim to actively remove significant carbon from the atmosphere. This approach, which complements emissions reductions, is essential to effectively address the climate crisis.

INFORMATIONS

Scope

The commitment considers the net carbon removal resulting from the balance between Scope 1 (direct), Scope 2 (electricity purchase) and Scope 3 (indirect emissions)² emissions of fossil origin and the removal of CO₂ through eucalyptus plantations and conservation areas (anthropogenic biogenic).

The greenhouse gases covered are carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4), sulphur hexafluoride (SF6), nitrogen trifluoride (NF3), hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs).

Baseline

0 (2020⁴).

Ambition

Remove 40 million tonnes of carbon - from zero to 40 million by 2025.

Results in 2023

In 2023, we achieved a balance of 5,124,448 tonnes of carbon removed over the year, resulting in an accumulation of 27.1 million tonnes of CO₂ equivalent removed since 20204, which represents a 68% advance on the target.

During the year, we continued to carry out significant eucalyptus plantations - whose removals will be recorded in the 2025 inventory, two years after planting, in line with the methodology - as well as acquiring new land and expanding our forestry base. Therefore, the 2023 result is due to the entry of new plantations in recent years, in addition to the maintenance of current forests, in line with the movement to expand the forestry base that will provide the company with greater resilience and wood supply in the long term.

Additional Information:

The balance includes plantations of two years or more, forest growth, harvesting, and management of the forest base in the current year, subject to variations influenced by emissions (Scope 1, 2, and 3) and the volume of removals. The commitment to remove 40 million tonnes of carbon takes this annual variation into account, without establishing intermediate milestones between 2020 and the 2025 target. The methodology itself was launched in 2020, anticipating decarbonization trends. However, we maintain continuous market monitoring to ensure that our approach complies with evolving official methodologies, such as the Science Based Targets Initiative's Forest, Land Use & Agriculture Guide (SBTi FLAG) - currently suspended for the forest products and paper sectors.

We used our own data and growth projections for our operations to define the commitment, as well as projects that have an impact on reducing emissions or increasing removals over time. The annual calculation is verified by third parties, and removals are not equivalent to carbon credits. For more details, see the indicators "GHG Emissions and Methodology"and «Balance (removals and emissions), removals and carbon stocks".

KPI Tracking

Our plans for 2024

We will continue to expand our forestry base, in line with our strategy of positioning ourselves in the pulp and bioproducts market. We will also continue with our conservation and ecological restoration programs, which will result in increased removals over the years.

Also, as part of our 2021 commitment to the Business Ambition for 1.5°C and SBTi initiatives, we have submitted new GHG emission reduction and CO2 removal targets for SBTi validation. The technical details of these targets will not be disclosed at this time due to possible changes during validation. In this way, while we await approval in 2024, we will continue to collaborate with the initiative to ratify the proposed targets and follow up on updates to the SBTi FLAG. We thus reaffirm our commitment to strengthening our ambitions through robust methodological approaches and accelerating our journey towards decarbonization and removing carbon from the atmosphere.

1. Source: Intergovernmental Panel on Climate Change (IPCC) -https://www.ipcc.ch/site/assets/uploads/sites/4/2020/02/SPM_Updated-Jan20.pdf.
2. Scope 3 categories measured: 1. Purchased goods and services; 4. Upstream transportation and distribution; 5. Waste generated in operations; 6. Business travel; 7. Employee commuting; 9. Downstream transportation and distribution.
3. Suzano removed carbon from the atmosphere previously, but for the target, removals will be accounted for from 2020.
4. This indicator value refers to the accumulated figures for 2020, 2021, 2022 and 2023.

REDUCE THE INTENSITY OF SCOPE 1 AND 2 GREENHOUSE GAS EMISSIONS BY 15% PER TONNE OF PRODUCTION BY 2030

Material Topics: Climate change

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Commitment: REDUCE THE INTENSITY OF SCOPE 1 AND 2 GREENHOUSE GAS EMISSIONS BY 15% PER TONNE OF PRODUCTION BY 2030

Our progress

23.8%

Context

Climate change is a major global challenge. According to the World Economic Forum's Annual Global Risks Report¹, the most likely risks over the next ten years are the failure of climate action (in 1st place) and weather extremes (in 2nd place). The planet has been experiencing temperature increases, especially due to anthropogenic actions, which promote the emission of greenhouse gases (GHG), resulting in a series of impacts² on natural ecosystems and communities and the development of economic activities.

Combined with the need to act to mitigate and adapt to climate change, the private sector is taking a leading role in this agenda and seeking to understand how these issues affect its economic and financial performance and what business strategies can respond to the predicted scenarios of rising temperatures. This includes both risks and opportunities associated with a climate-resilient,low-carbon economy - that is, one geared towards generating capital with lower GHG emissions intensity.

In its quest for process efficiency, Suzano has historically considerably reduced the emissions linked to its production. With a degree of renewability in the energy matrix³ of over 88% (scope 1), the company's GHG emissions intensity indicators per tonne of product produced are currently one of the best in the sector.

Suzano already has a low-intensity indicator when compared to its main market competitors.

We understand that acting to combat climate change⁴ is everyone's role, and the integrated operation of our business - which links our forests to our industrial units - places us as central players in advancing this agenda. That's why ensuring that we continue to work on decarbonizing our operations inspires us to develop better solutions.

INFORMATIONS

Scope

The sum of the emissions resulting from our production process (Scope 1) and the purchase of electricity (Scope 2), mapped annually in the Greenhouse Gas Inventory⁵ about the volume of finished products (pulp, paper and consumer goods).

Our emissions intensity target is in line with the Paris Agreement, established in 2015. Our emissions intensity is already one of the lowest in the sector, according to the Transition Pathway Initiative.

Baseline

0.2133 tCO₂e/t (year: 2015⁶).

Ambition

Reduce the intensity of Scope 1 and 2 greenhouse gas emissions by 15% - from 0.2133 tCO₂e/t to 0.1813 tCO₂e/t by 2030

Results in 2023

In 2023, the intensity of our emissions (Scopes 1 and 2) per tonne of production was 0.2057 tCO₂e/t⁷, which represents an increase of 4.8% over the previous year.

We had a year of reduced production, marked by several stoppages, affecting the operational efficiency of the mills. Direct emissions (Scope 1) increased slightly due to the influence of emissions from agricultural activities, as a result of the consolidation of the forestry base. At the same time, there was a slight increase in stationary emissions - i.e. from fixed sources - due to the reduction in the pace of production and the resumption of mills after general stoppages, requiring greater consumption of fossil fuels.

Emissions from energy procurement (Scope 2), which involves units that import electricity, remained stable. The addition of two new factories - Mogi das Cruzes (SP) and Ribas do Rio Pardo (MS), under construction since 2022 - increased consumption, but this was offset by an improvement in the average emission factor of the electricity supplied by the National Interconnected System. This factor decreased by 10% due to the increase in energy generation from renewable sources in 2023, balancing the impact of increased consumption.

Therefore, the target indicator was impacted by the 2% increase in absolute emissions (Scope 1 + 2), combined with the decrease in the amount of product generated, expressed in tonnes, which makes up its denominator.

Additional information:

The production indicator covers pulp, paper, and consumer goods, differing from the finished volumes disclosed in the financial statements. Our ambition, defined based on historical pre-merger data between Fibria and Suzano Papel e Celulose, reflects an increase in post-merger efficiency with the integration of industrial and forestry processes, resulting in operational gains and a reduction in emissions.

The target was set based on the Transition Pathway Initiative (TPI) approach to decarbonization in the pulp and paper sector, seeking to promote a low-carbon economy. We used our own data and growth projections, taking into account projects that reduce emissions and the TPI's trajectories for limiting global warming to 1.5°C. This ensures that our commitment is aligned with the 2015 Paris Agreement⁸.

The annual calculation of the commitment is verified by a third party, and we do not include the use of carbon credits to achieve it. For more details, see the "GHG Emissions and Methodology" indicator.

KPI Tracking

Our plans for 2024

In 2024, we will continue to implement initiatives to improve operational efficiency and reduce fossil fuel consumption. This includes increasing the use of biomass and black liquor in energy generation, as well as incorporating new technologies, such as gasification at the new plant in Ribas do Rio Pardo (MS), scheduled to begin operations in the same year, as well as the Master Plan at the Jacareí Unit (SP), a plan for operational improvements to achieve greater efficiency and yield at the unit.

Also, as part of our commitment made in 2021 to the Business Ambition for 1.5°C and Science Based Targets Initiative (SBTi) initiatives9 10 , we have submitted new GHG emission reduction and CO2 removal targets for SBTi validation. The technical details of these targets will not be disclosed at this time due to possible changes during validation. Therefore, while we await approval in 2024, we will continue to collaborate with the initiative to homologate the proposed targets and follow up on updates to the SBTi FLAG.

At the same time, we are conducting studies to define decarbonization scenarios in line with the Goals of the Paris Agreement. We thus reaffirm our commitment to strengthening our ambitions through robust methodological approaches and accelerating our journey towards decarbonization and removing carbon from the atmosphere.

1. Find out more at:http://www3.weforum.org/docs/WEF_The_Global_Risks_Report_2021.pdf
2. Source: Intergovernmental Panel on Climate Change (IPCC).
3. For more information on our energy management, go to Energy Management.
4. For more information on Suzano's context and relationship with Climate Change, go to Climate Change at Suzanolink.
5. The 2023 Greenhouse Gas Inventory was externally verified according to the standards of NBR ISO 14064 and the Brazilian GHG Protocol Program, and verified by an independent third party.
6. All the information needed to establish the target was taken from the Greenhouse Gas Inventories generated by the former companies (Suzano Papel e Celulose and Fibria).
7. The emissions reduction target has a specific objective linked to Sustainability-Linked Bonds (SLB) and Sustainability-Linked Loan (SLL) financial emissions. To find out more about our financial issues, visit our Investor Relations website.
8. For more details, see the methodology "Carbon Performance Assessment of Paper Producers:
   Note on Methodology".
9. https://www.unglobalcompact.org/take-action/events/climate-action-summit-2019/business-ambition/business-leaders-taking-action.
10. https://sciencebasedtargets.org/companies-taking-action.

REDUCE BY 15% THE WATER CAPTURED IN OUR INDUSTRIAL OPERATIONS BY 2030

Material Topics: Water

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Frameworks

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Commitment: REDUCE BY 15% THE WATER CAPTURED IN OUR INDUSTRIAL OPERATIONS BY 2030

Our progress

68.9%

Context

Ensuring the renewal cycle of water is essential for life on the planet and for Suzano's production process. In the industry, we operate within the best international water use practices, established by the Integrated Pollution Prevention and Control (IPPC) and the International Finance Corporation (IFC). We believe that increasingly reducing water consumption in our operations is fundamental to reducing the water footprint of our products and helping to reduce the risk of water scarcity in the regions where we operate.

INFORMATIONS

Scope

The commitment covers specific water withdrawal (m³/t) and total water withdrawal (m³) per ton of saleable pulp and paper from all Suzano industrial units.

Baseline

29.8 m³/t (year: 2018¹).