Issues related to the following PSs were not identified during IFC’s review: PS5 Land Acquisition and Involuntary Resettlement, as the company leases the land for sugar cane plantations, no involuntary resettlement was identified during appraisal, and future land transactions (i.e. leases) for sugarcane plantations will be under market-based transactions on existing consolidated agriculture land. PS7: Indigenous Peoples (IP’s) and PS8: Cultural Heritage do not apply as no Indigenous People areas or cultural heritage were encountered during this appraisal as the company’s facilities and plantations are located on existing consolidated agricultural areas and it does not lease land which is part of the land reform settlements (“assentamentos”), which is land intended for a farmer or rural worker without the economic conditions to acquire a rural property. 

 This is a Category B project based on IFC’s 2012 Policy on E&S Sustainability. The E&S risks and impacts associated with this project are limited, site-specific and can be readily addressed through generally accepted Good International Industry Practices (GIIPs) and mitigation measures, as described in this document. Key E&S risks and impacts of Santa Adelia’s project are: i) lack of detailed emergency response plans for the industrial operations, ii) absence of  comprehensive EHS Key Performance Indicators (KPIs) to track EHS performance, iii) demonstration of adherence of own and third-party suppliers production to Brazilian regulatory and company’s sustainability requirements, including Bonsucro requirements, iv)  demonstration of efficient use of water in the mills in line with the sector benchmark, and, v) absence of formal and structural stakeholder engagement to possible affected stakeholders. 

 E&S Policy and Management Systems. As part of its Environmental, Social and Governance (ESG) strategy, Santa Adelia has defined four pillars: ethics, sustainability, workers’ safety and operational excellence. The company has a written overarching EHS policy, published on its website, stating its commitment to produce sugar, ethanol and electricity in a responsible and sustainable manner recognizing the importance of its employees and contributing to the social and economic development of the regions where it operates. On its website, the company presents its EHS policy and an overview of their environmental and social responsibility programs, Ethics Code and GRI Sustainability Report (https://site.usinasantaadelia.com.br/). Based on this policy review, IFC confirmed the alignment and consistency of Santa Adelia’s EHS Policy applying to its operations with the requirement of the IFC Performance Standards.

In 2018, Santa Adelia developed and implemented an integrated management system (IMS) covering environmental, health and safety and food aspects based on ISO standards for environment and occupational health and safety (ISO140001 and ISO45001) covering industrial and agricultural operations at both mills, and FSSC 22000 and Bonsucro certification requirements for the Jaboticabal mill. Review of the IMS manual demonstrated alignment with the IFC PSs requirements and the WBG EHS Guidelines, except for stakeholder engagement (see the Stakeholder Engagement section below). Its laboratory is certified in accordance with ISO/IEC 17025 – General Requirements for Competence of Testing and Calibration Laboratories. Santa Adelia holds the required regulatory operational and environmental permits (water abstraction, fire safety, wastes, vinasse application, etc.) for all its operations, as part of a consolidated legal registry, included in the IMS.

In 2021, as part of its operational excellence program and with a new EHS manager joining in the same year, the company started to upgrade its IMS by raising the internal values through developing sustainable attitudes (VIDAS). The VIDAS process, having a 5-year implementation plan, will be leading the company to a Culture of Excellence in EHS. In a 14-step process, Santa Adelia will review/revisit the role of leadership, EHS team, employees in EHS management function, its EHS policies and procedures, EHS risk assessments, goals/targets, and Key Performance Indicators (KPIs), associated behavioral and cultural development, accident analysis, emergency preparedness and response, and internal and external audits. It is a multidisciplinary approach involving all employees, who can participate by making suggestions and are consulted on a regular basis.

The scope of the initial Bonsucro certification (2011) includes the company’s own, partner and third-party sugarcane production at Jaboticabal. For its own, partner and third-party sugarcane production in Pereira Barreto, the company applies the principles of Bonsucro, but has not certified the operations as there is currently no sugar production. The adherence to the Bonsucro principles at this operation is checked by the EHS team as part of the internal audit program.

Santa Adelia is also part of a group of companies, in the State of Sao Paulo, that adheres to the Agro-Environmental Protocol (“Protocolo Agroambiental”) for the sugar and energy sector, which aims to promote sustainable production. Annually, it is assessed for its adherence to the environmental guidelines and a certification of compliance is issued by an independent third party: União da Agroindústria Canavieira do Estado de São Paulo (UNICA) and the environmental regulatory body Secretaria do Meio Ambiente do Estado de São Paulo. One of the main commitments was the elimination of use of fires during harvesting, a target which Santa Adélia reached in 2014 by introducing mechanical harvesting. Today, Santa Adelia harvests 99% of its sugarcane mechanically. Other commitments include: i) protection and restoration of riparian areas; ii) soil conservation; iii) water conservation and reuse; iv) use of sugarcane by-products; v) social and environmental responsibility and certifications; vi) good practices in the use of pesticides; vii) fauna protection measures; and viii) preventing and fighting forest fires. The company was recertified in 2021 based on the public register of the Sao Paulo State authorities.

Identification of E&S Risks and Impacts. EHS risks and impacts, with a focus on the prevention of chemical, physical and biological risks from Santa Adelia’s operations, are included in the annually completed Risk Prevention Plan (Plano de Prevenção de Riscos Ambientais – PPRA) required under Brazilian regulations. During the annual assessment, external OHS professionals thoroughly inspect the work environment through visual inspection, documentation analysis and quantitative assessment, relating to the roles and activities of workers in both the industrial and agricultural operations. Environmental parameters in the workplace are measured, including noise, lighting, temperature, and air quality and humidity. In addition, the company conducts environmental assessments of its sugarcane fields and excludes the mandatory riparian areas and legal biodiversity set-asides.

Management Programs. Santa Adelia has mandatory EHS management procedures included in the IMS to avoid, control and mitigate identified risks and impacts from its operations, as defined in the environmental licenses and as per the Brazilian Regulatory Norms (NR) for OHS aspects. The procedures include monitoring and instructions for waste streams; air quality monitoring, effluent quality monitoring, vinasse application program, fauna monitoring, traffic safety and control, environmental monitoring of field/agricultural activities; monitoring of erosion process, among others. The company has adopted several policies and procedures to manage human resources and OHS matters related to its own activities and contracted works including, among others, OHS programs required under Brazilian law, such as the Risk Prevention Plan, an Occupational Health Monitoring Plan (Programa de Controle Medico da Saúde Ocupacional – PCMSO) and a Hearing Protection Program (Programa de Conservaçao Auditiva). For further information on OHS procedures, see PS2 – OHS section below.

Organizational Capacity and Competency. The EHS policy and procedure development and implementation is the responsibility of the EHS (“SSMA”) Manager, who reports to the Superintendent Director (“CEO”) of Santa Adelia. The EHS manager has a dedicated team consisting of an Environmental Supervisor for both mills supported by an environmental analyst at each mill. For OHS aspects, there is an OHS Supervisor supported by 6 technicians and an Administrator in Jaboticabal and 7 technicians and an administrator in Pereira Barreto. Each mill has two medical doctors and a nurse. In addition, the company has an IMS Manager responsible for maintaining the IMS and the sustainability certifications who reports to the Superintendent Director. There is an internal commission for Incident Prevention with employees and employer representatives on board: CIPA (Comissão Interna de Prevenção de Acidentes) at the mills and CIPATR (Comissão Interna de Prevenção de Acidentes do Trabalhador Rural) for the fields. The commission consists of employees who have received basic firefighting and first aid training. They provide onsite EHS support to the EHS team. Strict adherence to all E&S policies and procedures in the operations is the responsibility of line management in the industrial and agricultural operations. For all functions involved in EHS management, job descriptions have been developed.

EHS Training. Santa Adelia’s HR department develops and implements training programs that include an EHS induction for new employees and contractors (including third-party suppliers), as well as periodically repeated job-specific and regulatory trainings such as working at heights, working in confined spaces, electrical safety, work as machine or boiler operators, handling and use of pesticides as per the IMS. Specific procedures and the associated training program for hazardous work are part of the company's mandated procedure for approving hazardous work activities. For 2021, all EHS training was completed as per the planning. The implementation effectiveness of the EHS training program and EHS oversight by the EHS team, as well as other specific safety programs have led to decreasing and now low accident rate (See PS2 – OHS section for more detail).

Emergency Preparedness and Response. The company has mandatory emergency response plans (ERP) based on Brazilian law, covering possible emergency scenarios, such as fires, explosions and environmental leaks as well as evacuation and communication plans. However, these plans were not developed in detail and suitable for each facility. As part of the VIDAS process, the company will improve the emergency plans for the two mills, with a more complete description of risk scenarios (based on the operations) and with all the necessary supporting information, including policy, responsibilities, geographical location, lay-out of the mills, diagrams of the risk in the mills (i.e. risk maps), fire protection system description and diagrams, evacuation plans and completed in accordance with local regulatory standards and GIIP with basic information on process safety and risks including change management, maintenance and integrity of critical processes, operational procedures, training program, and periodic audits of the emergency plan (ESAP#1).

The ERP is presently accompanied by the respective emergency response team (or Fire Brigade) that is well trained to respond to emergency situations including field fires and fires in its industrial operations, natural events and occupational accidents. Santa Adelia’s mills are equipped with fire protection systems approved by local authorities, that are well maintained and operated. The emergency response teams are equipped with personnel protective equipment (PPE) and conduct regularly scheduled drills in coordination with the local fire department. Carrying out scheduled drills are aimed to train and technically improve the members of the Fire Brigade. A critical analysis is performed at the end of each drill to identify opportunities for ERP improvement.

COVID-19 Impact. In February 2020, Santa Adelia started discussing the implications of the first COVID cases in Brazil. This resulted in the establishment of a committee in March 2020, completing a risk assessment and developing a Contingency Protocol for COVID-19 at three levels: people, operations, and markets. Contingency measures regarding hygiene, social distancing, home office have been in place since then. High risk employees have been asked to stay at home while keeping their salary. Some temporary workers were dismissed, but still being paid partially on company funding and government funding. Santa Adelia has been actively supporting the national vaccination program. The majority of its employees has now been fully vaccinated. 

EHS Monitoring and Reporting. Santa Adelia monitors the main aspects and impacts from its operation included in the mandatory monitoring programs as part of issued licenses (e.g. water intake, fauna, air emissions, chemical storage, fire safety, hazardous and solid waste generation and disposal) and for internal OHS lagging indicators, such as work related injuries. Annually, the company develops an Environmental Management Plan (EMP) for the planning and implementation of measures to control and mitigate the environmental and social impacts inherent to its operations. At the beginning of the harvest, actions are established with goals and KPIs relating to ten main themes for the industrial and agricultural areas: biodiversity (CAR registration and fauna monitoring), ecosystems, soil quality, air quality, climate change, use of pesticides and fertilizers, field fires, solid waste and noise.

The company has developed an internal daily inspection checklist and periodical audit schedule for all its operations, including internal audits for certification by the EHS team with departmental auditors and interdepartmental auditors. Findings that can be closed immediately are recorded and share via WhatsApp in the department. All findings are consolidated and tracked to closure. Monthly reports are shared with line management in the industrial and agricultural operations. Once a year a general presentation is given to General Management, including an analysis of EHS performance presenting regulatory KPIs and presentation of CAPEX/OPEX needs. As a priority, Santa Adelia will develop a dashboard with a comprehensive set of lagging and leading KPIs to track EHS performance on a monthly and annual basis as part of the VIDAS process (ESAP#2).

EHS and food safety management system is also verified by audits of customers, such as Nestlé, Hershey's, Kellogg's, Mars, General Mills and Coca-Cola. In all recent audits, the company’s performance was assessed satisfactorily. The latest Bonsucro audit (2021) at the Jaboticabal mill identified five minor findings that were satisfactorily resolved within the six-month period. The company also reports environmental compliance information to the relevant authorities. Information provided to environmental authorities includes the completion of required actions under the conditions of respective environmental licenses to operate, such as air emissions monitoring from boilers and the transport fleet, wastewater quality and fertigation, water use permits, compliance with Brazilian biodiversity set asides, and solid and hazardous wastes management, among others.

In 2019, Santa Adelia published its fourth Sustainability Report (https://site.usinasantaadelia.com.br/relatorio-de-sustentabilidade/), covering the 2017/2018 and 2018/2019 harvest, based on the Global Reporting Initiative (GRI) standard. The report is published bi-annually and the next report, covering the 2019/2020 and 2020/2021 harvest, will be published in mid-2022. In the report, Santa Adelia reports HR, environmental, OHS and biodiversity performance, its commitments towards the Agro-Environmental Protocol certification, FSSC22000 and Bonsucro.

Supply Chain Risk Assessment and Management. As mentioned above, 75% of the sugarcane production comes from Santa Adelia’s own and partner plantations (approximately 55,000ha) on leased land. The remainder 25% of the total sugarcane processed comes third-party suppliers, located in the State of Sao Paulo. The average distance of sugarcane plantations to the mill is about 25km for Jaboticabal and 28km for Pereira Barreto. Santa Adelia does the planting and harvesting of the sugar cane with its own workforce on leased land owned by its partners. The company works with 123 partners and 258 third-party suppliers at Jaboticabal mill and with 207 partners and 22 third-party suppliers at Pereira Barreto mill. Some of the partners for Pereira Barreto mill are located near the town of Sud Mennucci, where Pioneiros mill is located. As Pioneiros mill closed in 2021, this number will reduce overtime as the company will move the partner production closer to Pereira Barreto where the soils are more productive. The sugarcane production around the two mills is located within consolidated agricultural areas (i.e., modified habitat with small patches of intact habitat to satisfy the requirements for Forest Reserves and Areas of Permanent Protection under Brazilian law and registered in the CAR). See for further details in PS6 section below.

According to the US Department of Labor List of Goods Produced by Child Labor or Forced Labor, sugarcane production in Brazil is linked to child and forced labor. The types of social risks and impacts contemplated by PS2 (child labor, forced labor, and significant safety issues) were not considered as material for Santa Adelia’s own, partner and third-supplier sugar cane production as sugar production is 99% mechanized. As such, the risk is marginal.

Santa Adelia does not have a Supplier Code of Conduct for its partner and third-party sugar cane suppliers but expects its suppliers to adhere to the company’s Ethics Code (see PS2 – HR section below). Prior to engaging with a third-party supplier, the company completes a checklist regarding labor and biodiversity issues (i.e. supply of PPE, respect for labor and environmental legislation (including Cadastro Ambiental Rural (CAR) registration) and prohibiting child labor and forced labor). Through its purchase contracts, Santa Adelia reinforces the awareness on these good practices with suppliers. Compliance is continuously checked by the Santa Adelia internal audit team and for the partners and third-party suppliers for Jaboticabal mill by the Bonsucro recertification audits. Going forward, Santa Adelia will develop a Supplier Code of Conduct which is aligned with its Ethics Code, IFC’s supply chain requirements defined in IFC PS 1, 2 and 6 and Bonsucro 2022 T&Cs (ESAP#3). To confirm adherence to the Bonsucro Principles, the Pereira Barreto own sugarcane production and third-party suppliers will be audited in 2022 by an independent recognized Bonsucro auditor. The scope will also include a review of Santa Adelia’s internal Bonsucro audit program implemented at Pereira Barreto. A corrective action plan (CAP) is part of the audit report, addressing Bonsucro requirement gaps and strengthening of the audit program where needed. Completion of the CAP and enhanced internal audit program will be independently audited in 2023, after which the company will continue conducting internal annual audits of both its own production and that of its third-party suppliers (ESAP#4). Going forward, the company will report annually on the findings of the internal audit and CAP to ensure adherence to the Bonsucro Principles.

Stakeholder Engagement and Community Grievance Mechanism. In 2017, Santa Adelia developed a management program with guidelines for voluntarily initiatives related to social responsibility. The concept is to create benefits of the collectivity for internal actors (employees and shareholders) and external actors (community, suppliers, partners and environment). Initiatives include i) environmental education; ii) relationship with the community and institutions through Open Doors visit program to the company's units; iii) relationship with Agricultural suppliers and partners, including technical meetings during the year/harvest. Santa Adelia holds regular meetings, inviting renowned experts who provide lectures on different topics such as sugarcane planting and harvesting, use of fertilizers, pest control, among others.

Using the management program as basis with stakeholders identified, Santa Adelia will develop and implement a formal Stakeholder Engagement Plan (SEP) to all its operations, which will include (i) stakeholder analysis, including focus on identifying groups affected by the Santa Adelia operations; and (ii) planning for dissemination of information (ongoing operations and new developments), consultation and participation based on an annual schedule (ESAP#5).

Grievance mechanism (GM). Santa Adelia’s grievance mechanism is included in the Ethics Code (see also PS2 section below) and applies to both external and internal parties. Complaints can be raised via one of the Ombudsman channels (Intranet (internal only), company website, e-mail, 0800 or PO Box or Ombudsman Hotline). The GM procedure is set out to protect the rights of the complainants. All channels allow for anonymous complaints. The external Ombudsperson will review, classify the complaints who are then handed to the company’s Ethics Committee. The Ethics Committee reviews the information of the external Ombudsman and will implement the advice timely with the complainant. The company keeps formal records and consolidated data from all complaints, including follow up actions and resolutions. Recent external complaints have been limited to dust creation and traffic movements of the Santa Adelia fleet (see PS4 section below for more detail).

 As of December 2021, Santa Adelia has 3,136 employees. Gender breakdown currently stands at 88% male and 12% female. Santa Adelia has women working in the different departments, such as: planting, agronomy, maintenance, shipping, warehousing sugar, administrative, leadership, quality and environment. All workers are hired locally in nearby towns. One of the HR programs for attracting employees focusses on bringing more women in the agricultural operations. Out of the total workforce, approximately 80% are full-time employees and 20% are seasonal workers hired during planting and harvesting operations. Santa Adelia mills have in place three shifts and during the four-months harvesting season works 24/7.

Human Resources (HR) Policy and Procedures. Through its human resources (HR) policies and practices, which are clearly articulated and readily available to its permanent and temporary workers, the company adheres to all Brazilian legal labor requirements regarding working conditions and management of the employer-worker relationship, promotion of a positive work environment, and retaining/motivating its workforce. Policies include workers’ rights and obligations, remuneration, working hours, disciplinary actions, career development, Travel Benefits Policy, Social Responsibility Policy, internal and external communications, including workers’ grievances, training and education, etc. Employees are hired based on clearly communicated contracts, undergo an induction and training process, and end-of-employment formalities are carried out in a transparent and orderly fashion. In 2020, Santa Adelia was certified under the Great Place to work program, a “employer-of-choice” recognition. Its recognition is based entirely on what employees report about their workplace experience specifically, how consistently they experience a high-trust workplace.

Retrenchment. After the harvest 2020/2021, Pioneiros sugar mill closed following a two-year process. The business rationale for the closure was the unification of the Pioneiros mill with the Pereira Barreto mill by transferring the industrial and agricultural operations to the latter providing a gain in efficiency, agricultural productivity and logistical simplification. Brazilian law includes a series of regulations to protect workers in case of retrenchment. This includes a national lump-sum program, one-month prior communication of the need to lay someone off, negotiation with unions, and state sponsored unemployment security. Santa Adelia prepared a social plan in 2019, involving consultations with the employees and unions. This plan included (i) relocation support if employees wanted to work in Jaboticabal or Pereira Barreto, (ii) support in finding other employment by actively searching for new employers, (iii) structuring of resume and a benefit package covering 6 months after closure. When the mill was finally closed in 2021, out of the 900 employees, only 100 were retrenched and most of them found other employment in the Sud Mennucci region. The Brazilian regulations were followed as a minimum and considering the additional measures taken by the company, the process complies with the PS2 retrenchment requirements. The closure was recognized as exemplary in the sector and as such the company received an award from MasterCana in 2021 given by industry peers. For the two remaining mills, the number of employees has been stable in recent harvest seasons.

Working Conditions and Terms of Employment. The work contract covers aspects, such as working period, rest period, overtime, annual, sick and maternity leave which are defined by law and under collective bargaining agreements (CBAs) with worker’s unions. Time clocks are electronic and readily accessible to the workforce, and overtime is calculated and paid. Santa Adelia reported paying all employer social security taxes and legally mandated benefits, as required. In addition, the company provides a series of benefits that go beyond Brazilian legal labor requirements, including additional health insurance, transportation arrangements or vouchers, complementary pension plan, life insurance, dental care, supplementary health benefits (reimbursement for classes, contact lenses, braces and prothesis), on-site cafeterias, grocery vouchers, meal vouchers, shopping cards/advances, drugstore cards or discounts, Christmas hampers, credit cooperatives, workplace exercise, extended parental leave in accordance with “Corporate Citizenship” regulations, shuttle buses for operations and transportation tickets, pension plans and flu vaccination. The standard working period is 44 hours per week and the daily working period cannot exceed 10 hours (overtime included). There are mandatory 1-hour breaks for meals (lunch or dinner) during the day and also 15 minutes breaks. Overtime paid is at a 50% premium and Sundays and holiday overtime is paid at a 100% premium. The company pays non-skilled workers a minimum wage that is above the regulatory minimum wage. Bonuses are paid based on the achievement of targets/indicators related to production, costs and projects.

Worker’s Organization. Labor rights in Brazil are enshrined in the constitution and the consolidated labor laws (known as Consolidação das Leis do Trabalho, or CLT, in Portuguese), and labor relations are highly regulated under the country's laws and labor practices, including the requirement for most categories of workers to belong to a union. At Santa Adelia, the workforce can belong to one of three unions depending where they work within the company (e.g. Food, Transport or Rural). Annually, the company negotiates CBAs with the unions, and this includes economic and social aspects. There are union representatives working at all sites, and they organize internal workers’ committees to participate in the annual collective bargaining process.

Non-discrimination & equal opportunity. Child labor, forced labor, harassment and discrimination are treated as crimes under Brazilian law. The company states its views and commitments against such practices in its Ethics Code, which was introduced in 2018. The Ethics Code defines the standards of behavior based on the company's values (Ethics or Integrity, Excellence, Workplace Safety and Sustainability) and Ethics principles, which must be adopted by all employees’ members of Santa Adelia, regardless of position or function they may occupy. In addition, all service providers, suppliers and partners must also respect the standards described in the Ethics Code. Both the hiring process and the approach to promotion follow well-established policies and procedures and are based on merit and competencies; no evidence of discrimination was found during appraisal. One of the HR strategies is to invest in gender diversity recruitment, based on meritocracy, ensuring employees are recruited independently of color, race, age and gender. All employees are eligible for vacancies according to its capabilities. Santa Adelia does not have a gender pay gap and pays male and female equally for the same job.

Worker/Contractor Grievance Mechanism. As stated in PS1, Santa Adelia’s worker grievance system is described in the company’s Ethics Code and also included in the HR policy and applies to all employees and contractors. Under no circumstances will reporting of grievances and Ethics Code violations be grounds for retaliation or intimidation of any employee or contractor without investigation of all communications. Since the Ethics Code is in place, the company has received 210 reports, including anonymous reports, of which 49 (24 in Pereira Barreto and 25 in Jaboticabal) were submitted and closed in 2021. Of the 49, 13 were considered unfounded by the Ombudsman. The reports included among others OHS related issues (10), bullying (6), regulatory non-compliances (4), related to a third-party supplier (1) and sexual harassment (1). Based on the reports received, the Ethics Committee completed an annual review to determine if the Ethics Codes needs to be upgraded and whether the training needs to be revised.

Protecting the workforce. Santa Adelia follows Brazil's legislation regarding minimum age required for employment (18 years old). The company checks the worker's age at time of application, recruitment, and contracting. The company does engage trainees under the Brazilian government's Jovem Aprendiz training program, but it follows all requirements of the program, including limited work hours to allow for participants' schooling and prohibitions against exposing trainees to any forms of hazardous labor. In addition, the company has a program to train and retain people with disabilities seeking to meet mandatory quota of 5% from Ministry of Labor in Brazil. It is challenging for the company to meet the 5% given the nature of the work in the sugar industry and to find qualified people in the region. To increase the hiring of special needs employees, the company created a professional qualification project with a local education institution.

Workers engaged by third parties. Santa Adelia does not have permanent contractor’s employees working inside the mills, agricultural operations or administrative areas. Contractors are engaged for specific maintenance and repair services. Santa Adelia has an EHS/labor procedure in place addressing all EHS/labor requirements for contractors as well as the selection and contracting procedure. All contractor firms must demonstrate compliance with labor legislation and the regulatory safety norms (including training), meet Santa Adelia’s OHS requirements and renumeration to meet the minimum payment practice of Santa Adelia. All third-party workers will have completed the EHS induction training before starting to work. Contractors completing high risk task will be issued with a working permit.

Occupational Health and Safety. The company has OHS programs as per the Brazilian Legislation (Portaria 3214/78), defined by the Regulatory Norms (NR) of the Ministry of Labor NR 07, NR 09 and NR 31. NR compliance is annually reviewed in the aforementioned PPRA and PCMSO. For routine tasks, such as work at heights, hot work, excavations, demolitions, drilling, lifting of loads, working with chemicals and electricity, before starting, a preliminary risk analysis (APR) is performed. For non-routine work in confined environments, a risk assessment, monitoring and control of the existing risk is performed and assigned employees receive compulsorily. A Permit-to-Work system is in place to cover the high risks tasks performed at Santa Adelia operations (industrial and agricultural). The company complies with NR 06, which prescribes provision of Individual Personal Protection Equipment (PPE) only approved by the Ministry of Labor.

The company’s 2021 loss time injury frequency rate (LTIFR) is 0.42 accidents per million hours worked compared to 0.84 in 2020 and 1.26 in 2019, which is considered good and well below international reference values (i.e. 7 accidents for sugar manufacturing and 8 accidents for crop production in the U.S.). The company has introduced a number of programs (e.g STOP, and road safety) to increase safety awareness among employees, as well an effective training program that has resulted in these low LTIFRs. Average severity rates (lost days/injury) were respectively, 24 (2021), 74 (2020) and 16 (2019). In April 2021, during the harvest period, a fatality occurred at the Pereira Barreto mill after several years without one. During the night shift, a driver of a light vehicle went off the road and the drivers lost his life in the collision. Santa Adelia’s accident team and an independent third-party investigated the accident. The root cause was fatigue of the driver as he fell asleep. Measures have been taken to strengthening the driver’s safety training and to fit all vehicles with a fatigue warning device.

Santa Adelia introduced the Safety Training Observation Program (STOP), implemented in all operations, which is based on the idea that safety is everyone's responsibility. It was developed to help participants to see security with another vision, so they can help themselves and their colleagues to work in a safe way. The program makes the behavior safe (key element for accident prevention) and the conditions of appropriate work as part of your culture, thus preventing incidents, work-related injuries and illnesses. Furthermore, the company has a gymnastics program in place, completed at the start of the shift to promote the health of employees and preventing repetitive strain injuries and occupational diseases, especially in the agricultural operations.

The industrial processes are mostly automated, which results in a limited number of workers being inside the operational area thereby reducing the exposure of workers to inherent risks typically found in a sugar and ethanol mill operation. All confined spaces have been identified and labelled with warning signs and workers are trained in following safety rules for working inside confined spaces consistent with Brazilian safety requirements (Normas Regulamentadoras (NR), NR33) and WBG’s EHS general guidelines. Review of records showed that the company undertakes annual inspections of all pressure vessels ensuring compliance with national safety requirements (NR13) including preventative maintenance and training of employees. Fall prevention measures for working at heights such as guardrails, lifelines and platforms were found in place. Regarding the assessment of its electrical circuits (Relatório Técnico de Inspeção das Instalações Elétricas) according to Brazilian safety standard NR10, necessary investments are made for identified issues. When repair or maintenance is undertaken a Lock-out, Tag-out (LOTO) procedure is applied. The company has appropriate preventative safety measures in place, which were observed in video’s provided by the company and include machine guarding, emergency stops, handrails, emergency signing, etc. In addition, under Brazilian safety standard NR10, the industrial sites are classified according to their risk of explosion, and in those areas considered to be of high risk (e.g. distilleries, sugar storage and warehouses) have access control systems, explosion relief systems and intrinsically safe electrical equipment.

The company conducts mandatory pre-hiring, periodic and contract termination health assessments of all employees that include basic clinical assessment and additional tests, such as audiometry, diabetes, high blood pressure, and blood tests’ cholinesterase and leucocytes counts, depending on an individual’s job function and exposure to identified risks. Santa Adelia monitors worker’s exposure to hazards in the workplace under its mandatory workplace risk prevention program (PPRA) and has conducted a formal hazard/risk assessment of its operations. Basic infrastructure is provided for workers in the fields including safe transportation, mobile trailers with toilets, appropriate space for meals and break rests, fresh water supply in accordance with Brazilian labor standard NR31. Sufficient water and meals are provided to all workers in the fields during harvesting and workers take regular breaks. Manual cane cutting is limited to 1% of the areas where mechanical harvesting is not possible. The company monitors the wellbeing of its fieldworkers related to potential heat stress, including provision of rehydration programs, considering the increase of temperatures in the past years. Santa Adelia reported that there are no recorded cases of chronic kidney disease (CKD) among its field workers. Where applicable, the company completes an ergonomic assessment of the workplace, according to the requirements of Brazil's and provides annual ergonomic training in line with NR17 worker safety standard and implemented requires corrective actions and a management program to prevent such injuries.

Gender and Gender Based Violence (GBV). In completing the IFC’s Gender Based Violence country assessment tool, no high risks were identified. All staff in leadership positions receive annual training on moral behavior and handling any form of harassment and all employees are annually trained on the Ethics Code. Based on IFC’s Contextual Gender and GBV risk tool, agribusiness risks in Brazil is considered as medium based on the company’s processes in place, i.e., Ethics Code and internal grievance mechanism, with the former not accepting any form of harassment and the latter to address any harassment report by members of the Ethics committee who have been trained for this purpose.

Supply Chain Risk Assessment. Labor risk in the supply chain have been reviewed under the PS1 Supply Chain section.

The sugar mills have a power generation capacity of 149MW, out of which 40 MWh are in Jaboticabal, 75 MW in Pereira Barreto, and 34MW in Pioneiros (non-operational). Of the total electricity generated by the energy units in 20/21, 70% was delivered to the grid. The company presented an overview of its energy efficiency rate of the mills: 98.9% for Jaboticabal mill and 96.5% for Pereira Barreto mill, compared to the Brazilian sector benchmark of 95.1%.

Concern for the conservation of non-renewable natural resources, such as water, is an important pillar of sustainability practiced by Santa Adelia. In 1992, Jaboticabal mill stopped using water in the cleaning process of sugarcane and put a closed water circuit in place thereby optimizing reuse of water in the industrial processes. From the start of operation at the Pereira Barreto mill in 2007, no water was used to wash sugarcane and a closed water circuit in the industrial process was included in the design.

The company holds permits for abstracting surface and groundwater issued by the State Water Authority (ANA). At Pereira Barreto, water is intended for industrial processes, human consumption (after chlorine treatment), boilers and cooling circuits. The permit allows for a 635 m³/h of surface water capture from the reservoir of the Ilha hydroelectric plant in the São José dos Dourados River arm. The average uptake is 525 m³/h. At Jaboticabal mill, surface water is collected from the Coco stream for industrial supply in cooling systems, cleaning systems, dilution of inputs, recovery and treatment of products and by-products. Groundwater is captured to supply the boilers. The permit for the capture from the Coco stream surface for industrial uses includes two points: Point 1 (377m³/h) and Point 2 (200m³/h), for a total of 577m3/h. The average total uptake is 509m³/h. Groundwater is used to supply the water for the boilers from two wells (40m³/h and 20m³/h each).

As part of the abstraction permits, ANA has set a maximum water usage of 1.0 m³/ton-cane. In Pereira Barreto this requirement is met (1.0 m³/ton-cane), but in Jaboticabal it is currently 1.2 m³/ton-cane (both usages are above the sector benchmark of 0.5 – 0.9 m³/ton-cane as outlined in the EHS Guidelines for Sugar Manufacturing). The usage is lower in Pereira Barreto as it only produces ethanol and installed a thermo-electrostatic boiler using less water. As part of its operational excellence program (ref. VIDAS), the company is continuously looking to further improve the water efficiency, including replacing equipment and introducing new technologies. The company is in process of completing a review of water efficiency improvement measures with CAPEX/OPEX aimed at reaching the sector benchmark, as part of a four-year plan, which is expected to be approved by the Board in September 2022. (ESAP#6). Going forward, Santa Adelia will report annually on the measures taken to reduce the water use further in line with the sector benchmark.

During the past 4-5 years, the Pereira Barreto fields have had less rains and higher temperatures compared to the Jaboticabal fields. To address these changes in climate conditions, the company increased its irrigation not only using the vinasse and wastewater from the mills, but by abstracting water from nearby São José dos Dourados, Tiete and Paraná rivers under ANA permits. Reviewing the area in the World Resources Institute Aqueduct Water and Food Analyzer (https://www.wri.org/applications/aqueduct/food/#/) reveals that there is a low risk of water stress today and a low to medium risk in 2030 in irrigated sugarcane production in Brazil. This so-called rescue irrigation, now using reels, is needed to ensure the sugarcane is sprouting after the harvest. This practice is not resource efficient. Going forward, the company will install pivot and drip irrigation to improve its productivity and yields. Santa Adelia has hired two consulting firms to assess the feasibility and develop a water management plan for the implementation of pivot and drip irrigation on at least 1,500 ha per year in the upcoming years to a total of 13,000 ha. To date, Santa Adelia has already implemented pivot irrigation in 212 ha.

Air and Green House Gas (GHG) Emissions. Air emissions: The bagasse fueled boilers are the largest source of air emissions from Santa Adelia’s operations; there are 4 boilers in total with a power capacity of respectively 120, 131 (2 boilers) and 165MWth. The boilers are distributed as follows: 1 in Jaboticabal, 2 units in Pereira Barreto and 1 unit in Pioneiros (not operational). The company monitors its air emissions on an annual basis, achieving compliance with Brazilian requirements under CONAMA Res. 382/06 and CONAMA 436/2011 (Particulate Matter 200mg/NM³ and NOX 350 mg/Nm³). Review of the 2019 - 2021 monitoring reports demonstrate that the boilers meet the regulatory requirements and the WBG EHS guidelines limits for Particulate Matter 50 mg/Nm³or up to 150 mg/Nm³, if justified by environmental assessment, and NOX 650 mg/Nm³.

Santa Adelia participates in the RenovaBio program which issues tradeable carbon credits known as CBIOs granted to certified producers. RenovaBio program is a federal program to curb carbon emissions by 10% in 2028 in line with the UN Paris Agreement on climate change. The process is audited by independent auditors and approved by the ANP (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis). In 2020/21 crop year, the company generated 370,825 and traded/sold 237,070 certified CBIOs. Annually, Santa Adelia conducts an inventory of CO2 emissions of the two mills and associated sugarcane production. This was based on a total of 145,090 ton of CO2eq emissions (Scope 1 - 3) for the 2020/2021 harvest season. This figure by far exceeds IFC GHG threshold of 25,000 tons annually but considering that this is renewable energy from sugarcane plantations, most of the mills' GHG CO2 emissions are naturally offset as they are captured from the atmosphere by growing sugarcane mills. In addition, the ethanol that Santa Adelia produces is used as a renewable fuel in the national vehicle fleet. Therefore, although Santa Adelia generates high volumes of gross GHG emissions, net emissions from the company's operations can be considered negative (as they are sequestrated in the sugarcane plantations and off-set in the ethanol that replaces use of fossil fuels).

Pollution prevention. All wastewater produced in the two mills is destined for fertirrigation. Santa Adelia does not release any effluent into surface water. Wastewater production for fertirrigation (120 m³/h) resulted in the 2020/2021 harvest to a volume of 600,000m³. Vinasse production for fertirrigation (400 m³/h) resulted in the 2020/2021 harvest in a volume of 2,010,000m³. Vinasse is a liquid residue from the ethanol production and is composed of organic and mineral fillers, and rich in potassium. All produced vinasse is used as fertirrigation, contributing to soil quality needed for sugarcane production. For the application of vinasse in the fields, the company must submit annually a vinasse application plan to the environmental authorities to obtain approval. The company conducts monitoring of surface waters twice a year, based on a monitoring plan approved by the Environmental Authority and in line with the regulations (CONAMA 430 article16). Review of the 2021 monitoring reports demonstrated compliance for both mills.

The park of ethanol storage tanks in both mills is covered by a fire-fighting system, in addition to having the AVCB fire department inspection report (Auto De Vistoria Do Corpo De Bombeiros – in Portuguese), these classified areas have access control and are in compliance with standards and requirements. The storage tanks for hazardous products such as ethanol, acid and soda have a containment basin (able to contain 110% of the volume) and a system for recovery in case of leaks. Periodically, during the off-season, these tanks undergo inspection and maintenance by qualified teams.

Solid and hazardous wastes. The company has a solid waste management procedure that helps to minimize the generation of waste at source, promotes segregation, and controls and reduces risks to the environment. Sugar mills produce a significant amount of organic wastes (filter cake and ashes from boilers). The filter cake is used in fertirrigation and the ashes as fertilizer. Metal scrap is segregated and sold for recycling. The solid non-recyclable waste from offices and restaurants is collected and disposed of through licensed companies.

Hazardous Materials. Santa Adelia uses and stores significant amounts of chemicals, such as soda, sulfur acid, fertilizers, pesticides and ethanol. Liquid tank storages have secondary containment, risk identification, warning signs, access control and emergency kits and showers in place. This includes fire prevention measures: area fenced off, safety signs, instruction for truck filling and training for workers as well as firefighting equipment in place. The company collects all empty pesticide containers and delivers them to certified recycling companies. The storage facilities and tanks meet the Brazilian regulatory, IFC PS3, WBG EHS Guidelines requirements.

In the Jaboticabal mill, the company has its own fertilizer plant, where it prepares the standard fertilizer consisting of nitrogen, phosphorus, and potassium (NPK). This allows the company to prepare batches based on the available soil nutrients in the fields and sugarcane needs. A regulatory risk assessment has been completed for the plant and all safety measures are in place, including fire safety. The plant has a AVCB certificate in place. For nitrogen, the company does not use ammonia in its processes due to the explosion risk. This input was replaced by Uan fertilizer, a solution composed of 50% nitrate and 50% urea. The storage is limited to immediate need of preparing NPK batches.

Integrated Pest Management (IPM). IPM is a well-established practice in the sector and is applied in all plantations. Santa Adelia uses biological control techniques for example to control the sugarcane borer population with the Cotesia flavipes parasite. Only approved chemicals, which as per a review do not include WHO Class Ia and Ib pesticides, and fertilizers are used. All materials are labelled, and material safety data sheets (MSDS) are available in the storage Application rates and methods are adapted to minimize consumption and handling, storage and use of agricultural chemicals follow national regulations as part of IPM procedure and workers involved in pest control are trained annually.

Community Health and Safety. Potential impacts to this neighbor communities from the company’s operations could arise potentially air emissions from trucks (dust), field fires and drifts from aerial application of pesticides. The Santa Adelia mills and agricultural production areas are located in a rural area with no communities near to the mills, but there are some communities near to the agricultural fields further away from the mills as per a Google Earth Pro review. Buffer zones in the areas, between sugarcane fields and communities, are in some places between 50 to 100m.

Fires in sugarcane fields cannot always be prevented due to arson, accidentally or naturally fires resulting from the combination of hot and dry weather. Whatever the cause, Santa Adelia's priority for its business sustainability, neighbors and communities is the prevention and fighting of fires, with programs and campaigns, qualified and equipped Fire Brigades, acting in the Mutual Assistance Plan of its region, maps of criticality and the presence of water trucks in the fields and observation points. Santa Adelia conducts limited aerial spraying of crops by contracted companies using crop-spraying airplanes. A specific procedure is in place to avoid the risks and impacts to health and other crops associated with aerial spraying of chemicals. This entails monitoring weather conditions during aerial spraying and safety exclusion buffer zones to protect communities, and neighboring fields and a 24-hour warning to nearby communities and neighbors. To avoid dust creation on the internal road system, the roads are kept wet where needed to avoid dust creation during the harvest season.

Infrastructure and Equipment Design and Safety. The Supplementary Law nº 1.257 of 2015, establishes the São Paulo State Code against Fires and Emergencies and includes licensing procedures applicable to application for permits from the Military Fire Department of São Paulo (Fire Department). Santa Adelia has received the current Fire and Emergency Inspection Certificates (AVCB) for all its operations in both mills. As stated above, the mills are located in rural areas with no close by communities or busy roads, therefore there is no possibility communities being affected during emergency events at the mills. Based on the Brazilian safety standard NR10, industrial sites must be protected based on the risk of fire and explosion, and in those areas considered to be of high risk (e.g. distilleries, sugar storage warehouses or grain silos, flammable storage tanks). In past years, Santa Adelia has invested in improving the safety of pressure vessels, segregation of areas, cleaning procedures, compartmentation of areas, and the definition of electrically classified areas with the provision of explosion-proof circuits and equipment in the production buildings, sugar warehouses and in the ethanol storage tank fields.

For this, Santa Adelia has completed the implementation of the fire prevention and protection measures in the sugar warehouses and distilleries, employing intrinsically safe electrical circuits and motors, access control systems, explosion relief and prevention systems, proper grounding of equipment and structure, lighting protection, automated equipment and thermographic monitoring of equipment.

Santa Adelia’s mills have operational fire safety equipment such as fire detectors, alarm systems, fire pumps and water storage tanks, hydrants, portable extinguishers, firefighting foam solution that is applied in the ethanol tanks and over the dike areas, all in accordance with the São Paulo State's fire authority standard (IT 27/2004). All areas of the dike are protected with water and foam hydrants and hose reels. As described in PS3, tank storages in both mills have the required secondary containment system (independent containments for each tank), which has been correctly sized and constructed based on GIIP to also hold firefighting water.

Road Safety. The company relies on a large number of owned vehicles, including cars and trucks to transport the sugarcane from the field to the plant. All vehicles are maintained in the company’s own workshops and during the harvest season there is a so-call pitstop station for instant repairs of trucks. The company has implemented a driver safety program, including a biannual driver safety training and medical checks. Only trained drivers are allowed to drive in company vehicles. All vehicles are fitted with speed limit monitoring and the installation of fatigue warning devices is in process to be completed in 2022. The average distance of sugarcane plantations to the mill is about 25km for Jaboticabal and 28km for Pereira Barreto. Transport over public roads cannot be avoided and therefore Santa Adelia drivers’ safety training includes best practices and safe behaviour while on the public road to ensure public safety. This is supported by the development of risk maps and route planning for all Santa Adelia transports from the sugarcane fields to the mills.

Security Personnel. The security personnel of the company is provided by a private company. They are not armed. Rules for security personnel follows a Federal Law and are regulated by Brazilian Federal Policy. Security personnel are vetted for any past criminal activity or similar disqualifications from service, and according to Brazilian federal regulations governing private security agents, they are trained at accredited training centers and issued certificates by the Ministry of Justice and Federal Police allowing them to serve (the Carteira Nacional de Vigilante, or CNV). Santa Adelia has a procedure in place for reviewing the vetting and training process of the security provider as well as a crisis procedure for the whole company, including instructions for the security personnel on how to act in case of a crisis.

Biodiversity Conservation. The client produces (~75%) and purchases (~25%) of agricultural products essential to its core business from the Upper Parana Atlantic Forest and Cerrado ecoregions in the state of Sao Paulo, classified as Endangered and Vulnerable respectively by the WWF. The area is identified as having medium range rarity. Satellite imagery as seen through Global Forest Watch, Global Forest Change and Google Earth Pro shows that land within the sourcing area of the company’s two mills, Jaboticabal and Pereira Barreto, is within a consolidated agricultural region (i.e., modified habitat with small patches of intact habitat to satisfy the requirements for Forest Reserves and Areas of Permanent Protection under Brazilian law and registered in the Cadastro Ambiental Rural (CAR)).

Purchased sugarcane is traceable to sites of production. No significant additional loss of natural or critical habitat is expected in this region. It is expected that suppliers will continue to protect Forest Reserves and Areas of Permanent Protection as required by Brazilian law under the CAR registration and will manage land as required for Bonsucro certification for both mills.

The company has the following monitoring activities in place as per its EMP: i) the company carries out awareness campaigns and encourages the care and monitoring of fauna in the industrial and agricultural process areas, in order to obtain a history and identification of species; ii) voluntary planting and recovery of degraded areas and reforestation areas receive periodic maintenance to ensure good development of native species, contributing to the ecological balance; and iii) the company performs surveys to monitor the protection measures for riparian forests in areas owned and managed. The knowledge and approach of these monitoring activities are extended to third-party suppliers.

Sustainable Management of Living Natural Resources. The Jaboticabal industrial and agricultural operations (including partners) have been certified by Bonsucro since 2011. Although Bonsucro certification does not explicitly prohibit all conversion of natural habitat, there is very low risk of significant natural habitat conversion occurring in the sourcing area given its current degree of consolidation. Santa Adelia is expected to continue improving its sustainability practices through Bonsucro verification at its two operations and to comply with natural habitat protections under Brazilian law for its own operations and that of third-part suppliers (see ESAP#3 and #4).

Supply Chain Risk Assessment. Please refer to PS1, Supply Chain section above.