This is a Category B project according to IFC's 2012 Policy on Environment and Social (E&S) Sustainability. The proposed project will have limited adverse E&S impacts that are few, site specific, largely reversible and readily addressed through existing mitigation measures and good international industry practices (GIIP).

Key E&S risks and issues for this investment are (i) Alvoar’s capacity to implement its E&S and Supply Chain management systems across all its direct and raw milk sourcing operations; (ii) availability of technical capacity/competency of Alvoar’s EHS, HR and Supply Chain functions; (iii) adequacy of HR/OHS management systems for assurance of fair and safe working conditions for direct/seasonal workers and contractors, including Gender-based Violence (GBV) risks; (iv) food safety management system, (v) water/energy resource efficiency and pollution prevention; (vi) emergency preparedness and response, (vii) traffic safety, use of security forces, (viii) community engagement and community grievance mechanisms.                                                   

Environmental and Social Policies. Embare and Betania have adopted a Code of Conduct that outlines the principles that govern each companies’ operations. As a new company, Alvoar has yet to develop a corporate E&S policy defining its objectives and commitments. Alvoar will establish i) a corporate E&S Policy and ii) a corporate Fair Employment Policy to benchmark its E&S performance against IFC Performance Standards (PS) requirements for its industrial plants and distributions centers (ESAP#1). In addition, Alvoar will develop a Supply Chain Sustainability Policy, aligned with PS2 and PS6 supply chain requirements, guiding its raw milk sourcing with dairy cooperatives and individual farmers and other raw materials (ESAP#6). Further details can be found in the following sections.

Identification of E&S Risks and Impacts. E&S risks and impacts related to the Company’s processing and distribution operations are recorded in a regulatory compliance matrix. Alvoar also adopted a procedure for the identification and evaluation of E&S aspects and impacts. The identification of OHS risks follows procedures which have been established by local authorities and include a risk management program and ergonomics assessments. Chemical, biological, physical, ergonomic and mechanical risks are evaluated based on the type of work performed by employees and the environment in which they carry out their tasks. For food safety, Alvoar follows the Hazard Analysis and Critical Control Points (HACCP) system to identify risks of contamination and implement mitigation measures accordingly. Brownfield operations have valid environmental licenses issued by municipal authorities that establish monitoring requirements that should be met by the Company with regards to air emissions, effluents, solid waste and noise. Going forward, Alvoar will prepare an IFC PS compliant E&S Impact Assessment (ESIA) study (ESAP#2) prior to the construction of its new units for cheese production and for any greenfield operations during the lifetime of this IFC investment.

E&S Management System (ESMS) and Programs. Both Betania and Embare have E&S management systems based on voluntary standards for quality (ISO 9001), environment (ISO 14001) and food safety (FSSC 22000). As part of the on-going merger, Alvoar has developed a change management plan that includes the adequacy and consolidation of Standard Operating Procedures (SOPs) and management programs, which will then be rolled out to all industrial plants and distribution centers. Under this proposed investment, Alvoar will develop and implement an ESMS, aligned with IFC PSs, covering its industrial plants and distribution centers (including logistics). The ESMS will encompass the following elements: i) E&S policy; ii) identification of hazards and assessment of risks and impacts; iii) management plans; iv) organizational capacity and competency; v) training plan; vi) emergency preparedness and response; vii) stakeholder engagement plan and community grievance mechanism; and viii) monitoring and review (ESAP#3).

Organizational Capacity and Competency. The responsibility for EHS issues at corporate level resides with the industrial director who is supported by the Quality/Environmental manager and OHS manager. Both managers are supported, at operation-level, by a team of quality, environmental and OHS coordinators and technicians that supervise day to day operations. Logistics operations, including transport and distribution, are overseen by the logistics director. The raw milk collection director manages operations with dairy farms and milk suppliers. HR issues are supervised by the HR director. All directors report directly to Alvoar’s CEO. Alvoar does not have dedicated staff to manage social aspects and community relations related to its operations and has a limited sourcing team to engage with raw milk producers and other suppliers. To strengthen its EHS, social and sourcing function to support the implementation of an ESMS aligned with IFC Performance Standards’ requirements (ref. ESAP#3), Alvoar will appoint i) one experienced EHS officer at the corporate level to develop the EHS and Sustainability Sourcing Policies and to roll out the corporate ESMS at all industrial plants and distributions centers (including logistics); ii) one social specialist to manage the development and implementation of the corporate worker’s grievance mechanism, stakeholder engagement strategy and external grievance mechanism and its roll-out at all operations; and, iii) five sourcing officers to roll out the Supplier Code of Conduct and to monitor supply chain E&S performance of the 5,500 raw mill suppliers. Moreover, Alvoar will designate a Sustainability Committee to lead the Company’s sustainability strategy, coordination and performance (ESAP#4).

E&S Training. All contractors, permanent and temporary employees receive induction training before they initiate their tasks at Alvoar’s facilities. Training covers a wide range of topics, including use of personal protective equipment, road safety within the Company’s premises, permit to work, hygiene and housekeeping and emergency response. Workers whose tasks include the operation of forklifts must undergo additional 40h training. In addition, Alvoar has an internal platform that contains mandatory training courses for all employees, such as pest control and waste segregation. The Company also conducts regular awareness-raising campaigns covering E&S topics. After the merger, the HR department started rolling out training on Alvoar’s new organizational culture.

Emergency Preparedness and Response Plan. Alvoar has a corporate level Emergency Preparedness and Response Plan (EPRP) to respond to fire events across all facilities and distribution centers. The EPRP outlines the responsibilities of the emergency response team and contacts of external parties and first responders, such as firefighters, hospitals, police, etc. Emergency equipment is available on site and regularly inspected by OHS technicians. In addition to the EPRP, there are specific SOPs to manage other emergencies, such as spills, rescue of victims in confined spaces or electrocuted workers. For distribution centers, Alvoar has an SOP in place to respond in case of collapse of drive-in racks. In compliance with Brazilian regulations, the industrial plants and distribution centers must have fire protection systems and emergency exits in place as approved by the Fire Authorities. Alvoar will (i) implement the remaining Life & Fire Safety (L&FS) projects to bring all its facilities into compliance with local regulations and (ii) commission a qualified L&FS professional to conduct a L&FS gap analysis and means of egress review of a sample of industrial plants and distribution centers to confirm compliance with applicable national and local requirements. Findings will be used to introduce a systematic and gradual improvement program of the emergency equipment and the emergency preparedness and response plan. As part of the improvement program, Alvoar will ensure that all its facilities and distribution centers have implemented their EPRPs (ESAP#5).

Monitoring and Review. Alvoar’s E&S monitoring activities are focused on environmental performance as defined by the environmental permits issued for each of the facilities. Environmental monitoring includes liquid effluents, air emissions, disposal of solid/hazardous waste and noise. In addition, the Company monitors consumption of water, energy, vapor and cleaning chemicals (caustic soda and nitric acid) monthly. Data is shared at the energy conservation committee’s monthly meeting to establish resource efficiency strategies. Further details related to environmental monitoring can be found in the PS3 section below. For OHS, Alvoar monitors and records safety observations, inspections and audits, accidents, and lost time frequency rate (LTIFR) and lost time severity rate (LTSR). Alvoar’s monitoring system includes regular internal audits based on ISO 14001 and ISO 22000 standards, and additional requirements established by FSSC 22000 certification scheme. Findings of the audits, including non-conformities and improvement opportunities are recorded on Alvoar’s internal system. A root cause analysis is conducted for all non-conformities, followed by the establishment of a corrective action plan (CAP). Team members responsible for the implementation of actions and date of completion are recorded on Alvoar’s system. The Company has appointed a non-conformities coordinator to follow up on the implementation of CAPs.

Supply Chain Risks and Management. Alvoar sources raw milk from dairy cooperatives and individual farmers representing an estimated 5,500 suppliers, including middlemen. The profiles of milk suppliers vary from small family farms to medium sized enterprises with more participation of family farms in the northeastern region. Milk is temporarily stored in refrigeration tanks provided by Alvoar either on site at larger farms or located at central collection points shared by smaller producers. In addition to raw milk, Alvoar sources other raw materials, which includes sugar and soy as ingredients to manufacture its different products, as well as soy, corn and cotton as inputs to produce feed rations for milk suppliers. Wood products, such as eucalyptus chips, are also used as biomass for plant boilers. Alvoar has several strategies to support milk producers, including financial incentives so producers can obtain Good Agricultural Practices (QCONZ) certification, technical support to increase milk production, and acts as an intermediary to help producers obtain better feed ration prices.

Key E&S issues associated to Alvoar’s supply chain are harmful child and forced labor, significant OHS conditions and significant risk of natural habitat conversion. Alvoar has in place a basic verification and quality control program for third-party suppliers consisting of a self-assessment questionnaire to check operational licenses, child/forced labor, working conditions, and food safety. The Company does not have a formal traceability, risk screening and verification system in place to monitor the E&S performance of milk producers or other raw material suppliers. To manage risks related to its supply chain, Alvoar will develop a comprehensive supply chain management system composed of i) Supply Chain Sustainability Policy; ii) Sustainable Sourcing Road Map; iii) Supplier Code of Conduct; iv) risk screening and monitoring program supported by a remote sensing platform; v) internal training program; vi) social risk assessment; and vii) independent annual verification audit. The Supply Chain Sustainability Policy will establish the Company’s commitment to respect local communities and human rights and limit purchases solely from raw milk suppliers and commodity producers that are not involved in child or forced labor, unsafe working conditions, and conversion of natural habitat. The Policy will commit the Company to source deforestation- and conversion-free commodities such soy, corn, sugar eucalyptus, and cotton, as inputs for industrial production and feed rations. A timebound Sustainable Sourcing Road Map for target commodities commercially procured such as soy, sugar, corn, cotton and eucalyptus will be developed to transition to deforestation and conversion-free inputs across all sourcing operations. The Supplier Code of Conduct will describe Alvoar’s expectations for conditions of production from raw milk suppliers, mainly for child and forced labor, safe working conditions and non-conversion of natural habitat. Moreover, will commit milk producers to transition towards sourcing deforestation- and conversion-free soy, corn and cottonseed meal as inputs for feed rations. 

As part of the risk screening process and before engaging with raw milk producers, Alvoar will check i) that inputs from dairy farms where the property or the property owner (including other direct family members) does not appear on the a) Ministry of Economy (Secretariat of Labor) embargo for forced labor risk list (ref. “Lista Suja”) or  b) IBAMA’s (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis) embargo for illegal natural habitat conversion; ii) geographic coordinates for each farm, and its existing Legal Forest Reserve and Permanent Protected Areas as registered in CAR (“Cadastro Ambiental Rural”) to determine if: a) natural habitat is not intact within the Legal Forest Reserve and Permanent Protected Areas registered in CAR; b) farm infringement is occurring on Conservation Units; c) farm infringement is occurring on Indigenous Lands; d) farm infringement is occurring on Quilombola lands; e) farm infringement is occurring on land claims registered with INCRA. Alvoar will not purchase key inputs from dairy farms where Legal Forest Reserves and Permanent Protected Areas are not respected, or farm infringements occur on Quilombola territories, Indigenous Lands, Conservation Units, and INCRA-registered land claims. Where non-compliance with the law is detected, Alvoar will suspend the supplier’s eligibility to sell production from any of their farms to the Company while Alvoar’s Legal and Compliance team conducts a follow-up investigation. Where the infraction or embargo is active and confirmed, the supplier will become ineligible to sell to Alvoar. For the risk screening process, Alvoar will recruit a specialized service provider with the capability to map natural habitats using remote sensing (and ground-truthing where necessary), to verify limits on natural habitat conversion and spot check 10% of suppliers per year based on regions at highest risk.

Alvoar employees working directly with raw milk producing farmers in technical assistance programs will be trained to look for unsafe working conditions and potential forced/child labor during site visits and impacts to Legal Reserves and Permanent Protected Areas. In addition, for milk suppliers, the Company will commission a social risk assessment of child, forced labor and OHS working conditions and propose mitigation measures based on the findings of the assessment. An independent auditor will be hired to verify the effectiveness of the supply chain risk screening platform and verification system after the first year of this investment (ESAP#6).                                                  

Human Resources Policies and Procedures. Alvoar is currently working to integrate Betania and Embare’s HR policies. Both companies have HR policies and procedures that are consistent with national labor regulations and PS2. HR policies cover topics, such as compensation, promotions, hiring and disciplinary measures.

Non-discrimination and Equal Opportunity. Alvoar’s HR policies include provisions against all forms of discrimination and outline the Company’s commitment to offer equal employment opportunities to all people, regardless of race, religion, color, national origin, age, sex, physical disability, sexual orientation or any other factor. The policies establish Alvoar’s responsibility for providing equal access to professional development opportunities based on skills and capacity of every individual rather than personal relationships.

Working Conditions and Terms of Employment. At the time of this appraisal, Alvoar directly employed around 4,000 direct workers, out of which 76% were men and 24% were women. More than 60% of employees work in the operations area. Direct workers are hired on a full-time basis and their salaries are  higher than the national minimum wage. For units operating for 24 hours, plant operators are organized in 4 teams who work 8-hour rotational shifts and have two days of rest for six days of work. 

Worker’s Organizations. Brazilian law provides for freedom of association and unionization rights. As established in Embare’s Social Compliance Policy and Code of Conduct, Alvoar respects freedom of association and collective bargaining. Collective Bargaining Agreements (CABs) are negotiated every year between the Company and the unions.

Protecting the workforce. The Social Compliance Policy and the Code of Conduct include provisions against child and forced labor, discrimination, harassment and sexual harassment and states the Company’s commitment to comply with local laws and regulations as well as to provide a safe working environment.

Worker’s Grievance Mechanism. Alvoar has a well-established grievance mechanism that is available to direct and contracted workers and allows for anonymous grievances. A formal procedure establishing the flow and management of grievances is still to be developed. Alvoar will integrate the grievance mechanism across all its operations and document the grievance procedure (ESAP#7). The procedure will indicate i) available channels to submit grievances (including confidential, anonymous and sexual harassment complaints); ii) roles and responsibilities for treating and responding to grievances; iii) timelines for taking action; and iv) a system to log, track and report grievances and their status. In addition, Alvoar will: i) enable a separate channel for grievances related to sexual harassment; ii) establish a dissemination strategy through inductions, trainings and refreshers; iii) implement support services for affected workers (e.g., medical services, counseling, legal assistance, job reassignment, etc.); and iv) appoint a committee to monitor, channel and resolve received grievances. The procedure will be documented, and staff involved in managing sexual harassment grievances will receive specialized training.

Worker’s Engaged by Third Parties. Alvoar engages with third party contractors and service providers for activities, such as pest control and maintenance. Contractors are required to meet all labor obligations established by local labor and OHS regulations. Temporary workers are provided by a labor agency to cover specific needs such as maternity or sick leave and receive the same benefits as permanent workers, such as meal tickets or transport allowances.

Occupational Health and Safety. Main causes of injuries linked with dairy production facilities include manual handling and lifting, falls from heights, machine injuries, electrocution and exposure to harmful substances. Explosion risks are related to the production of powdered milk. Alvoar has performed an assessment to identify ergonomic risks for each job and to establish mitigation measures. In addition, tasks involving powered systems, excavations, confined spaces, hot works, work at heights and lifting operations have SOPs that include the need for an early risk identification process and a work permit. These activities and their associated work permits must be approved by relevant staff, depending on the level of risk. The Company monitors leading, and lagging OHS indicators, including safety observations, inspections and audits (leading) and lost time frequency rate and severity rate (lagging). For each of the industrial plants, KPIs are recorded monthly in Alvoar’s internal system. Alvoar registered 14 incidents and 247 lost days during the first half of 2022, reaching a Lost Time Injury Frequency Rate (LTIFR) per million hours worked of 10.59. The LTFR is slightly higher than the US benchmark for dairy industry value that stands at 9. No fatalities were recorded over the last three years. Responsibility for OHS issues resides with the OHS manager, who is supported by two coordinators, one for each region (northeast and southeast). Additionally, each plant has one or several OHS technicians depending on the size of operations. Technicians are responsible for monitoring daily activities and conduct inspections and audits. Moreover, Alvoar has an internal accident prevention commission composed by Company representatives and employees. To further improve its OHS related management practices and address activities with higher risks, Alvoar will commission a qualified independent consultant to develop an OHS risk assessment covering dust explosion hazards and the verification of suitable controls such as housekeeping, maintenance for ATEX equipment, grounding, bonding and the electrical continuity of the powdered milk process including the milk drying and conveying, and the dust collection systems, occupational exposure to chemical substances as well chemical handling and compatibility, and machine safety to comply with the industry good practices and the Brazilian regulation NR-12, at its industrial plants and distributions centers. Based on the results of the assessment, Alvoar will develop a Corrective Action Plan (CAP), with assigned technical resources, timelines and CAPEX/OPEX estimates. Alvoar will revise its accident investigation methodology to ensure root causes are being correctly identified. (ESAP#8)

Supply Chain. The risk profiles of the 5,500 milk suppliers vary from family to medium-sized enterprises with different sized workforces. Alvoar categorizes milk producers based on their production capacity but does not track the number of workers nor their working conditions, such as child and forced labor and OHS aspects. Therefore, to address labor risks related to its supply chain, Alvoar will develop a supply chain management system consistent with PS2 requirements. Further details in the PS1 supply chain section.                                                  

Resource Use. Alvoar obtains water for its industrial plants both from underground and surface sources and maintains water abstraction permits from the relevant authorities for each of its facilities. Alvoar’s industrial plants and distribution centers are not located within the restricted zones for underground aquifers reported by the National Water and Basic Sanitation Agency. Biomass is used to fuel boilers that supply steam to the different process units. Diesel is used for backup boilers, backup generators and transportation activities (particularly in the northeast). Electricity is sourced from the grid.

The Company monitors the monthly consumption of water, energy, vapor and cleaning chemicals at each of its facilities. However, despite having implemented different resource efficiency measures, such as the recovery of biogas from Lagoa de Prata’s Wastewater Treatment Plant (WWTP) to produce electricity and to fuel one of the boilers, the Company does not have a formal resource efficiency strategy. Alvoar will perform a cleaner production (CP) audit focused on reducing the consumption of resources (water and energy), increasing processing yields and reducing the volume and organic load of effluent discharges. Alvoar will develop a CAP based on the results of the CP assessment, including a corporate resource efficiency strategy to gradually implement measures for improving efficiency in its consumption of energy and water (ESAP#9). Alvoar will start monitoring its GHG emissions on an annual basis following an internationally recognized methodology, and local regulations.

Pollution Prevention

Liquid effluents and air emissions. Industrial and domestic effluents generated in milk processing activities are treated on site at wastewater treatment (WWT) plants that consist of physical and biological treatments in anaerobic and stabilization ponds. At some industrial plants, treated effluent is discharged to surface waters while being discharged for irrigation at other plants. Alvoar monitors the effluent quality at the entrance and exit of the WWTP regularly with a frequency which depends on requirements set forth by state regulations. Discharged effluents overall align with local regulations but, in some cases, do not comply with WBG EHS guidelines for dairy processing effluents. As part of the CP audit described above (ref. ESAP#9), Alvoar will evaluate its current management of industrial effluents and identify mitigation measures to achieve compliance with local law and applicable WBG EHS Guideline limits. A Corrective Action Plan (CAP), with CAPEX/OPEX and timeline for CAP implementation, will be developed based on the CP audits.

The main point source of air emissions are steam boilers. Most boilers use biomass as fuel and there are backup diesel boilers and generators in case of emergencies. Monitoring of point source air emissions is performed following state regulations. Overall, monitored values are aligned with parameters established under local regulations and WBG EHS guidelines for small combustion facilities.

Noise. Alvoar monitors noise surrounding its industrial plants and distribution facilities as part of its environmental monitoring activities. Since facilities operate 24 hours a day, noise is measured in the morning and at night. Monitoring values are aligned with limits established by local authorities and WBG EHS guidelines.

Solid and Hazardous Waste Management. Solid and hazardous waste generated by Alvoar’s activities is segregated at source and classified following local regulations. Solid and hazardous wastes are temporarily stored in dedicated areas and recycled or disposed of by licensed third parties following local regulations. Most solid waste is recycled. Non-recyclable waste, such as milk-powder containers, is sent to cement kilns for incineration and non-conforming products are either composted or used to produce food for animals. 

Hazardous Materials Management. Hazardous materials that are handled and stored within Alvoar’s premises include acids and alkalis chemicals, mainly used for industrial cleaning and for laboratory tests; diesel, used to fuel the back-up boilers; and refrigerants, including ammonia and R22. Enhancements are needed in the storage areas to prevent and manage leaks and spills and to avoid contact between incompatible materials stored in tanks in the event of a release. Alvoar will: i) seek an accredited external institution to inspect all hazardous materials and fuel storage areas and verify alignment with the ABNT Brazilian Standards and WBG EHS Guidelines; ii) based on the results of the inspection, Alvoar will present a Storage Unit Adaptation Plan that includes the required CAPEX/OPEX for the implementation of adaptive actions; iii) develop a Hazardous Materials Management Plan; and iv) develop a Spill Management Plan. In addition, Alvoar will present a plan to replace or retrofit equipment that uses refrigerant R22. (ESAP#10).

Pesticide Use and Management. As part of Alvoar’s Food Safety Management System, Alvoar has a procedure for pest control describing good practices to prevent the presence of pests and requirements that should be followed for pest management. Pest control is performed by licensed service providers that have SOPs outlining the type of pests, control methods, schedules and chemicals that are approved for use. Only chemical products approved by the National Division of Sanitary Surveillance of Household Sanitary Products and the Ministry of Health can be used. However, products included in WHO’s Ia or Ib list were found to be used. Going forward, Alvoar will request all service providers to phase out any product on WHO’s Ia or Ib list. This requirement will be included in contractual agreements between Alvoar and its service providers. (ESAP#11).                                                  

Road Safety. Raw milk is transported from collection tanks to Alvoar’s industrial plants by refrigerated trucks owned by Alvoar. External service providers are hired to transport final products to distribution centers. Contracts with transport service providers established the transporters’ commitment to comply with local regulations, not to engage in forced or child labor and to perform regular maintenance on vehicles, among others. In addition, the contract includes a checklist with compliance requirements for every vehicle. Besides provisions included in the contracts, no further actions are taken to monitor road safety. Alvoar will develop a Road Safety Management Plan applicable to its own transport fleet and its transport contractors. The plan will address driver fitness, competence and training, speed limits, emergency response for road accidents, vehicle maintenance and safety standards (ESAP#12).

Security Personnel. At most of its industrial facilities, security guards are direct employees and do not carry arms. At other locations, Alvoar hires specialized security companies and in some distribution centers, armed security guards are present. Alvoar will develop a Security Management Plan consisting of a security risk assessment and a security training plan for both armed and unarmed security personnel in line with PS4 requirements (ESAP#13).

Food Safety. Alvoar’s Food Safety Management System (FSMS) is based on FSSC 22000 standards and incorporates HACCP principles to identify possible risks of contamination in the food chain, establishes rules to control these hazards and to minimize the chance of food poisoning. As part of the FSMS, the Company has twelve self-control programs that include predictive, preventive, and corrective maintenance plans, control and monitoring of water quality, temperature control, pest control management, industrial and operational hygiene, employees’ hygiene practices, controls and monitoring of suppliers’ inputs, sanitization, instrument calibration and product traceability and recall. Alvoar performs regular audits to ensure alignment between internal procedures and operations. Further details related to audits are provided in the PS1 section.                                                  

Alvoar is present in six Brazilian states across the Caatinga Dry Forest, Cerrado Woodland and Savannas, and Atlantic Forest ecoregions, areas which are undergoing or have undergone significant natural habitat conversion. Alvoar’s industrial plants were in operation prior to 2018 and its operational footprint is not expected to expand as a result of this investment.

Supply Chain. The Company sources raw milk from 5,500 producers and middlemen principally in consolidated agricultural landscapes within the states of Minas Gerais, Sergipe, Bahia, and Alagoas that present low risk of significant habitat conversion. However, it also includes areas of Ceara which present a higher risk of significant habitat conversion. Raw milk is traceable to collection points either directly on individual farms or to collectives located up to 300 km from each industrial plant, excepting milk procured from middlemen.

In addition to raw milk, Alvoar sources sugar and soy products (as ingredients for products, such as milk, powered milk, cheese, etc.). With respect to fuel for the bioreactor, in the south the client sources eucalyptus chips, and waste wood from furniture manufacturing in the north. Corn, soy, and cotton products are also purchased by Alvoar to produce feed rations for approximately 500 dairy producers. Implementation of Alvoar’s Supply Chain Management System will ensure these suppliers meet PS6 supply chain requirements (ESAP#6).                                                  

Alvoar engages with stakeholders mainly through Betania’s Luiz Girao Institute and Embare’s Assist program. Both programs support milk suppliers by providing technical assistance to increase milk production, through genetics, feed efficiency, and technology. In addition, Alvoar helps producers obtain cheaper animal feed by acting as an intermediary and negotiating better prices.

The Company receives grievances from customers through its customer service system managed by the marketing department who then redirects the complaint to the quality team. While anybody can access the customer service channels, the internal procedure only considers complaints coming from customers and does not contemplate grievances coming from additional stakeholders such as communities located next to operations.  The Company will develop a Corporate Stakeholder Engagement Policy and Procedure following PS1 requirements and based on a stakeholder analysis and mapping exercise to ensure engagement and participation of all sectors of the impacted communities. The Stakeholder Engagement Policy and Procedure will entail i) a description of key social and environmental risks and impacts of each facility; ii) identification and prioritization of stakeholders within the scope of the operations; iii) methods to provide information to and consult with each stakeholder group; iv) action plans to be updated annually describing specific stakeholder engagement activities to be conducted; v) timetable, resources, and responsibilities. The Stakeholder Engagement Policy and Procedure will also include a comprehensive grievance redress mechanism to: i) receive and register external communications and grievances from the public; ii) screen and assess the issues raised and determine how to address them; iii) provide, track, and document responses; iv) provide feedback to stakeholders on grievance mechanism results, and v) monitoring implementation and effectiveness through KPIs; vi) the mechanisms will provide measures for of handling complaints around GBVH in a survivor centric manner and allow for anonymous complaints and ensure confidentiality when requested by the person who raised the concern. Alvoar will ensure that staff responsible for the grievance redress mechanism are adequately trained on implementing the survivor centered approach to handling GBVH complaints. A stakeholder engagement plan and grievance management plan will be developed for each of the facilities and appropriately communicated to affected communities (ESAP#14).                                                   

Bruno Girao, brunogirao@alvoarlacteos.com.br

Rua Carlos Câmara, 1454 - Jardim América, Fortaleza - CE, 60425-810