IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
Performance Standard 1
Environmental and Social Management Systems. The company follows Votorantim Cimentos corporate overarching environmental and OHS policies that are communicated to all employees and contractors and are integrated into the company’s management systems at the Salto Plant. The company’s environmental and social management system (ESMS) has been established in line with ISO 14001: 2018 requirements. As part of the ESMS, VC has documented (i) guidelines and procedures for the identification of E&S risk and impacts, management of air emissions, wastewater, waste, hazardous waste, noise, land use, and biodiversity; (ii) monitoring plans for air emissions, water use and wastewater, (iii) training plans, and (iv) plant level emergency preparedness and response plan. VC has also established internal audit procedures and has a system for reporting and addressing non-conformities. The ESMS is commensurate with the Project’s level of risk and is overall aligned with the IFC Performance Standards (PSs) requirements.
As per the ESMS, VC identifies E&S risks and impacts related to its operations through i) assessment of legal requirements, ii) procedure for the identification of environmental aspects and impacts, iii) preliminary risk assessment and critical risks protocols for OHS, and iv) procedure for analysis of risks and opportunities for engagement and social transformation. The major climate hazards identified for the project are extreme heat and wildfires but climate change risks are not systematically included in Votorantim’s E&S risk assessment process. Hence, per ESAP #1, the company will augment its ESMS by developing a climate risk assessment and management procedure. The results of the climate risk assessment will be considered to revise the facility-level Emergency Preparedness and Response Plan (EPRP) and the OHS risk management plan.
As part of the first investment, the company conducted a Focused Environmental and Social Assessment (FESA) outlining the main risks and impacts associated with the new MRF unit. As per the FESA, the Project’s directly affected area is limited to VC’s existing plant site. The direct area of influence includes nearby communities - Piraporinha, Jardim Teixeira and the Fazenda Alta Vista condominium - which may be affected by operational impacts such as noise, dust and increased traffic. The indirect area of influence encompasses the broader municipality of Salto de Pirapora where potential effects may include population migration, and increased demand for public services. According to the FESA, no significant adverse impacts on local communities - including quilombolas - or the environment are anticipated as a result of the installation and operation of the VC MRF unit.
Organizational Capacity and Competency. The company has dedicated EHS teams at the global, local, and plant levels. The global EHS Department is led by the EHS Manager, who reports to the corporate Global Director of Sustainability and oversees EHS performance across all business units, and works closely with local teams, including the EHS Manager for Brazil. In addition, the Salto Plant has a local EHS team that includes environmental and OHS engineers. The social team comprises a corporate manager supported by social coordinators for each region of VC operations. Currently, the coordinator carries out local engagement activities and risk identification and is supported by a focal point. As per ESAP #2, VC will hire a specialized professional to manage social risks and impacts at Salto Plant.
Emergency Preparedness and Response. The Salto Plant has an EPRP compliant with national law, covering possible emergencies, such as fires, explosions, environmental leaks, and accidents. The EPRP includes responsibilities, resources, and communication plans for the cement plant and quarries. The Plant has an emergency brigade composed of 86 brigade members from all areas and shifts trained to respond to emergencies, including forest and industrial fires and occupational accidents. The storage of waste used for co-processing is equipped with a fire detection, alarm, and suppression system. Passive and active firefighting systems are regularly maintained by specialized companies and inspected for certification by local authorities. As mentioned above (ref. ESAP #1), the ESRP will be updated based on the climate assessment.
EHS Monitoring and Reporting. In 2020, the company launched its 2030 commitments in a global perspective including its ESG material topics (https://vcna.com/the-7-pillars-that-guide-our-2030-sustainability-commitments-/). Monitoring and reporting follow the 2030 Commitments KPIs, which are reported to senior management and the Board of Directors, the highest governance body in the company and has ultimate responsibility for ESG issues. VC annually publishes a Sustainability Report based on the Global Reporting Initiative (GRI) standard. The 2024 report can be found at: https://www.votorantimcimentos.com/integrated-report/
Supply Chain Risk Assessment and Management. Key supplies include charcoal, pet coke, and alternative fuels. Alternative fuels include biomass - wood chips - used tires, residue derived fuel (RDF) and hazardous RDF (HRDF). Key potential E&S related to the supply chain include child and forced labor, OHS issues, and conversion of natural habitat. VC has a supplier procedure for screening and contracting all raw material supplies, which includes reviewing legal, OHS, and environmental requirements. High-risk suppliers are audited annually against regulations and contract clauses. Votorantim’s supply chain management practices are overall aligned with PS2 requirements but do not cover conversion of natural habitat. As per ESAP #3, in the eventuality biomass for the Salto Plant is sourced from native or non-native plantations, VC will buy only from suppliers with FSC certifications.
Performance Standard 2
Human Resources Procedures and Working Conditions. By October 2025, the Salto plant workforce comprised 395 direct workers (% 13 female, % 87 male), including 20 people with disabilities (which exceeds the mandatory quota of 5% from Ministry of Labor in Brazil). There are 645 permanent third-party workers providing services such as internal truck transportation, canteen, cleaning, security, and blasting, In addition, temporary workers engaged by contractors are involved in project-related activities. During the construction period of the grinding unit, the expected peak of contracted workers will be approximately 400 people.
Through its human resources (HR) policies and practices, which are articulated and readily available to its employees, the company adheres to national law and with IFC PS2 requirements regarding working conditions and terms of employment. HR policies include workers’ rights and obligations, remuneration, working hours, disciplinary actions, career development, internal and external communications, including workers’ grievances, training, and education, etc. The work contract covers aspects such as working period, rest period, overtime, annual, sick, and maternity leave defined by national law and under collective bargaining agreements (CBAs) with worker’s unions. The VC workforce does not include migrant workers as employees. Votorantim guarantees freedom of association to its employees as per national law and does not restrict those who wish to join or become a union representative. Currently, there are seven VC employees from the Salto Plant in the union's governing body representing the workers. Annually, VC negotiates CBAs with the union to define the annual salaries and other work conditions.
VC’s Code of Conduct (CoC) addresses aspects of forced and child labor per IFC PS2 requirements. Further, the CoC includes VC’s commitment to adhere to the United Nations Universal Declaration of Human Rights to eliminate all forms of forced or compulsory labor and eradicate all forms of child labor from VC’s production chain. The CoC also includes provisions against harassment, violence, and sexual exploitation. All breaches can be reported via the Ethics Line, also available for third-party workers and project contractors. Grievances can be submitted anonymously, and the line, which is managed by a third party, is available through a free toll phone, website, and phone application.
In 2023, VC published its General Diversity and Inclusion Policy, which includes its commitment against discrimination or prejudice of any kind, including based on race, religion, age group, gender, political belief, nationality, marital status, sexual identity physical/mental/intellectual condition or any other. In addition, Votorantim has developed an equality program to increase the participation of women in the workforce and has a goal of having 30% of women in leadership positions.
Workers engaged by third parties. VC has a contractor handbook and verification guidelines that establish the EHS principles and programs that all service providers should follow, regardless of the type of hiring and are extended to subcontractors. The guidelines include criteria for housing facilities following legal requirements (NR-18; NR-24) and are overall aligned with the requirements of PS2.
Supply Chain. The risks of forced and child labor are assessed during the approval process, through consultation of public lists. In addition, the national public child and slave labor list is consulted and periodically checked. If the supplier is listed for forced and/or child labor, VC will not approve or disengage itself from this supplier.
Occupational Health and Safety. For routine tasks, the company completes a Preliminary Risk Assessment (PRA) to evaluate the risks from machinery, chemicals, or work processes, and identify mitigation measures. For high-risk activities such as tasks involving confined spaces, Votorantim has critical control protocols that detail the measures needed to eliminate, minimize, or control the risks involved. Further, VC has developed a program called Life-Saving Rules which consists of seven principles that workers must follow on their daily tasks to prevent accidents, including use of personal protective equipment, lock-out/tag-out procedures and reporting of unsafe working conditions or behaviors.
During the site visit, risks associated with machine safety and barriers that block access to moving parts were identified. Therefore, as requested on ESAP #4 and to further improve its OHS practices, Votorantim will submit a technical review of machinery safeguarding at the Salto Plant, in accordance with the requirements of the WBG General EHS Guidelines, WBG EHS Guidelines for Cement and Lime Manufacturing and Brazilian Standard NR-12 on Safety at Work on Machinery and Equipment.
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 cement production which include moving machinery, high temperatures, noise, falls from height, electrical hazards, and confined space. In 2025, the Company’s loss time injury frequency rate (LTIFR) per 200,000 worked hours stood at 0,28 compared to 0,21 in 2024 which is considered good and below international reference values (i.e. 1.1 for cement and concrete product manufacturing as per U.S. Bureau of Labor Statistics https://www.bls.gov/). The Salto Plant had eight lost time incidents in 2025. All incidents are recorded and investigated, and lessons learned are shared across the company. Several programs (e.g., SafeStart) have been introduced to increase employee safety awareness.
Votorantim conducts mandatory pre-hiring, periodic, and termination health assessments when all employees' contracts are terminated, including basic clinical assessment and additional tests depending on an individual’s job function and exposure to identified risks. VC monitors workers’ exposure to hazards in the workplace under its mandatory workplace risk prevention program every five years or each time working conditions are modified. The company has a Specialized Occupational Safety and Medicine Service team of occupational safety technicians, a nurse, and an occupational physician, who work during administrative hours or divided into shifts depending on the occasion.
Performance Standard 3
Resource Use. The primary fuel for the cement plant kilns is pet coke. Currently, VC uses 34% of alternative fuels including biomass used tires, RDF and HRDF. The coprocessing percentage is expected to reach up to 70% after the kiln upgrade. The Plant sources energy from the national grid, mainly hydropower. Water is sourced from the Pirapora River under a water abstraction permit granted by the authorities, and all sourcing points are equipped with flow meters. The cement manufacturing process is not water-intensive, and water is primarily used for cooling, grinding, high-pressure cleaning, dust suppression and fire network. Further, 80% of the industrial water consumed is reused in the process.
Air and Green House Gas (GHG) Emissions. Air emissions from the two kilns are monitored continuously (PM, NOx, SOx). The average 2024 stack air emissions monitoring parameters demonstrate compliance with the relevant Brazilian air emission limits, including the concentration of total metals. However, the results of NOx’s air emissions monitoring continue to exceed the air emission levels defined by the WBG EHS Guidelines for Cement and Lime Manufacturing limits (2022). The company did not complete the retrofit of the kiln, which was funded under the previous IFC’s investment. The first air emission burn test against the air emission levels of the WBG EHS Guidelines for Cement and Lime Manufacturing (2022) (Table 1) was conducted in November 2025. The results of this test are still being compiled and analyzed, and the company, if necessary, will implement technically and financially feasible improvements of the process and emission control measures to achieve compliance.
The company performed ambient air quality monitoring and results for 2023- 2024 indicate compliance with the national ambient air quality standards. As part of the permitting process for the kiln upgrade, VC completed an air dispersion modeling to determine the impact of retrofitted kilns on ambient air quality and modeling results, indicates that the projected ambient air quality is expected to comply national ambient air quality standards.
Several fugitive emissions sources were detected during inspections conducted by local authorities as part of the licensing process, which resulted in the development of a Particulate Matter Minimization and Control Plan and Votorantim is currently implementing corrective measures, including the replacement of filters.
Annually, VC quantifies direct GHG emissions from the facilities within the cement plant's physical boundaries, considering the global cement and concrete association (GCCA) methodology for the cement sector and the GHG Protocol. For 2024, the Salto Plant's net GHG scope 1 emissions were 596 kg of CO2/tonne of cementitious. The average annual total emissions for the Project are estimated at 3,551 tCO2/year. In total, the estimated annual emissions reductions are 8,096 tCO2/year due to optimization of transportation to enable low GHG intensity contributing to the company’s overall SBTi target.
Liquid Effluents. Liquid effluents associated with the operation of the plant are limited to domestic wastewater and stormwater. Sanitary wastewater is collected for treatment in septic tanks and transported by certified operators for further treatment in municipal wastewater treatment plant. Storm water is directed to oil and sediment separators and then discharged to surface water.
Soil Pollution. During inspections conducted by local authorities, the presence of aromatic solvents and degraded compounds derived from petroleum was found in soil samples of the fuel supply area (AF-05), diesel storage tanks (AF-06) and waste storage unit of used oil (AF-28). As per ESAP #5, Votorantim will commission a Phase I environmental site assessment (ESA) as per ASTM E1527-21 for all areas in the Salto Plant and a Phase II for the above-mentioned areas (AF-05, AF-06, AF-28) as per ASTM E1903-19 standard and present a time-based action plan to implement the ESA findings (e.g., additional investigation, remediation, or risk management strategies).
Noise emissions and vibration. Noise is generated by plant equipment operation, quarrying activities, including infrequent blasting, and operations-related traffic. Votorantim measures ambient noise annually and monitoring results indicate compliance with Brazilian and WBG EHS Guideline limits. The primary source of vibration is blasting activities at the limestone quarries. VC has documented a blasting management plan, which defines 3 blasting per week in the Ponte Alta quarry and one blasting per week in the Salto quarry. Blasting is carried out by a specialized licensed company only during the daytime and at a fixed time. The company conducts seismic monitoring.
Waste and hazardous materials. VC has a documented waste management plan that guides the segregation, handling, and disposal of the main waste types generated (hazardous and non-hazardous). Waste is segregated on site, and most waste streams are used as fuel or recycled. Raw material residues, including waste clinker, kiln dust, and cement, are collected, and recycled in production. The main hazardous materials in production include energy sources (pet coke, alternative fuels), engine oils and lubricants, and laboratory materials. Explosives for blasting are kept in containers, and amounts are kept limited.
PS 4. Community Health, Safety and Security
Transport Safety. The public road that passes the community of Piraporinha is the main corridor for the transport of raw materials (except limestone from the mine which is transported by conveyor belts) and finished goods. The company has a Transport Safety Manual in place, which includes specific EHS guidelines and internal procurement procedures for the approval of transport companies, specifying regulatory compliance, training, driver safety, emergency response, accident investigation, maintenance of trucks, etc. As part of the first investment, the company developed a Traffic Management Plan for the construction phase to minimize disturbances to the community.
Security Personnel. The Salto Plant has contracted a private security company licensed to provide unarmed security services. The contracted security company provides all required training, which is certified by competent security bodies and monitored by VC. If incidents occur, the local police will be called. No incidents involving communities have occurred in the past years.
PS 6. Biodiversity Conservation and Sustainable Natural Resources Management
The Salto Plant project is in the transition zone between the Alto Paraná Atlantic Forests Ecoregion (WWF) and the Serra do Mar coastal forests Ecoregion (WWF). The landscape has been significantly altered, and remnants of native vegetation are threatened by further land clearing due to agriculture and urban development. No vegetation suppression is anticipated as part of the Project activities.
The Ponte Alta quarry, which supplies raw materials to the Plant, has remnants of Atlantic Forest, which is considered Natural Habitat. As part of the first investment, Votorantim has developed targeted biodiversity surveys to characterize priority biodiversity values associated with Natural Habitat together with a Biodiversity Action Plan (BAP) that includes the identification of offset measures to achieve No Net Loss and monitoring requirements to ensure its effectiveness.
Risks and impacts of natural/critical habitat conversion and deforestation in the supply chain are covered under PS1.
