Statement of continued support for the UN Global Compact and its ten principles

To our stakeholders:

I am pleased to confirm that Natura Cosméticos S/A reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

The Global Compact Principles
1. Respect and protect human rights
2. Prevent violations of human rights
3. Support freedom of association at work
4. Abolish forced labor
5. Abolish child labor
6. Eliminate discrimination at work
7. Support a precautionary approach to environmental challenges
8. Promote environmental responsibility
9. Encourage environmentally friendly technologies
10. Combat corruption in all its forms, including extortion and bribery

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations.

We are also committed to sharing this information with our stakeholders using our primary channels of communication.

Sincerely yours,

João Paulo Ferreira
Chief executive officer, on behalf of the Executive Committee

We know that the future prosperity of the business is linked with our capacity to generate a positive impact on the environment and on everyone who interacts with the company over time: coworkers, consultants, communities, consumers and, generally, society as a whole. In 2018, we reaffirmed our commitment to the agenda proposed in the United Nations Organisation’s (UNO) Sustainable Development Goals (SDGs), and we approved our new understanding around positive social impact. For Natura, positive social impact means promoting social inclusion and improving quality of life and well-being for our entire relationship network, fostering education, diversity, work and income generation. We believe we are capable of generating a positive social impact by means of our business model and the pursuit of exponential, innovative and collaborative solutions for the challenges facing the company’s relationship network. This is aligned with our overarching goal of contributing to human and social development and building a more democratic and more sustainable society.

CONSULTANTS
For our consultants, we continue to offer a set of instruments aimed at promoting a positive transformation in their lives and their families. These additional instruments were idealised based on the demands of the consultants themselves, identified by means of the listening process which gave rise to the Human Development Index (HDI) that was developed especially for this group.
- Education programme in expansion: In accordance with the findings of the HDI, which indicated the priority attributed by the consultants to their education, we developed a programme for this area.
- Health in focus: From 2017, we started taking a closer look at healthcare for our network. At the end of that year, we launched a programme offering healthcare services for the consultant and one family member.
- Women’s rights: Guaranteeing women’s rights and reducing violence was one of the causes Natura assumed both in Brazil and in the International Operations in 2018. For the Natura internal audience we launched an exclusive channel for reporting and providing advice on violence.

AMAZON AND SUPPLY COOMUNITIES
In addition, the Amazônia Programme encompass the generation of work and income, as well as social inclusion. To ensure this happens, Natura is committed to the consolidation of sustainable production chains in the region.
Regarding the communities Natura works with, the Social Biodiversity Chain Verification System ensures compliance with Ethical Biotrade criteria (including traceability of all the ingredients acquired from the communities) and also that the entire chain is submitted to annual audits. As a result, in 2018 Natura was awarded UEBT (Union for Ethical BioTrade) international certification for its Ekos line products. The seal attests to the sustainability of the supply chain for all the line’s natural ingredients (not only those supplied by the communities), reinforcing the company’s commitment to fair trade, the conservation of biodiversity and social development as a result of the relationships based on trust formed with the suppliers. Together with a European multinational, Natura was the first company to be granted this certification in the world.

We employ documents such as the Code of Conduct, which is reviewed annually, to ensure adherence to the reality of the business environment and to incorporate any relevant matters identified. We guarantee that co-workers and suppliers may report any suspicion of violations of the Code of Conduct securely, anonymously and confidentially through the Ombudsman channel. Reports are investigated by the Ethics Committee. Moreover, we conduct audits on specific payments and suppliers. To become a Natura supplier, it is necessary to share our ethical commitments, including formal adhesion to our Code of Conduct, as well as attesting to the would-be supplier’s financial health and the conformance of its registration data. Every year, part of Natura’s new suppliers – due to the nature of their activity or the risk they represent – are submitted to audit processes that verify environmental, labour and human rights criteria and potential impacts on society and the environment. In 2018, 13 (1%) of the company’s 1,306 new suppliers were eligible and were submitted to assessment.
Natura does not work with suppliers presenting risk of child, forced or slave labour. Our suppliers declare the working conditions they provide for their work force and are audited periodically. In all the supplier communities we conduct audits by means of the Social Biodiversity Chain Verification System, which encompasses indicators on the occurrence of child, forced or slave labour, formal labour relations, ergonomics, and worker health and safety. It should be noted, that our production chain management system is audited annually by an independent thirdparty, in addition to having UEBT (Union for Ethical BioTrade) certification

CONSULTANTS
- In Brazil, the most recent Human Development Index (HDI) developed especially for our consultants, from 2017, indicated an HDI of 0.593. In the course of 2018, Natura started to measure the indicator among the consultants in the operations in Latin America, while a new survey will be undertaken in Brazil in 2019.
- In 2018, we exceeded the mark of 100,000 consultants and family members enrolled in at least one of the education initiatives.
- In 2018, more than 43,600 people joined our programme offering healthcare services for the consultant and one family member
AMAZON AND SUPPLY CHAIN
- During the course of 2018, we conducted training courses on occupational safety, organisational development and best production practices for more than 370 people.
- More than 150 families also received training in environmental regularisation, which drove an increase in the number of rural environmental registrations (CAR in the Portuguese acronym) granted in the region and reduced the number of environmental non-conformances identified in our verification system.
- Our supplier development and recognition programme is also extended to the supplier communities by means of the BioQlicar award. The results of the audits under the Social Biodiversity Chain Verification System account for 80% of the score each community may obtain in the award. The remaining 20% corresponds to fulfilling the planned production volume and the delivery deadline. In 2018, we recognized two communities: the one achieving the highest score and the one that made the most progress in the period. On average, the communities’ scores increased to 4.05 (on a scale up to 5). In 2017 and 2016, the scores were respectively 3.97 and 3.93, showing a steady improvement in performance on the part of the company’s community partners.
- One of the company’s 2020 ambitions, which establishes that Natura should form relationships with 10,000 families in the region. In continuous evolution, in 2018 our network was extended to 4,636 families in the region, compared with 4,294 the previous year. A major part of these families live in the states of Acre, Amapá, Amazonas, Pará and Rondônia. The total number of families in the supplier communities, including other regions in Brazil, grew from 5,296 to 5,664.

in the course of 2018, we saw important progress in the work we have been doing for some years to foster diversity, inclusion and a multicultural environment in the Natura work force and in society as a whole. Since 2016, we have had the Natura Diversity Policy that supports our diversity initiatives, which are focused on women, the disabled, LGBTI+ and black people.
We continue to advance in our commitment to reach 50% women occupying leadership positions (director level and above) by 2020 in all the Natura operations in Latin America.
We focus on attracting disabled candidates, reinforcing our employer brand communication aimed at this group. In addition to these ambitions, we maintained four priority work fronts: gender equality, inclusion of disabled people, ethnic-racial equality and LGBTI+ rights. Affinity groups were formed with the participation of employees who wish to contribute actively in these areas. We also organised the first Diversity Week, with a series of campaigns and one day dedicated to each front.
Regarding gender equality, we also started to focus on the problem of violence against women. After performing a diagnosis with the Movimento Natura and UN Women, in Brazil we launched a toll-free 0800 channel for female employees who are the victims of violence. The channel provides support from lawyers, psychologists and social assistants and dispenses advice on how to report cases of violence, how to find shelters and to obtain other protective measures. In the International Operations, Natura Argentina broke new ground in this area. In the country, employees who suffer from violence may contact a partnering organisation and, in addition to receiving the necessary guidance, are able to request temporary leave from work and credit to cover extra expenses. This process has already been established in the other countries in Latin America, with the exception of Colombia, which should launch the protocol in 2019.
Natura also continuously encourages discussion about family ties, the role of men in the family and the division of household chores. A practical novelty in this sense was the opening of two Natura nurseries in Brazil for the children of male employees.
We value freedom of association to unions both for employees and suppliers’ employees, as set forth in our Code of Conduct.

Before disabled employees start work, they have a consultation with an ergonomics specialist to map any necessary adjustments to their work stations. For persons with hearing impairments, colleagues trained in Libras (Brazilian sign language) provide assistance with routine communications. During feedback processes with management and medical consultations in the company health centres, sign language interpreters are available to provide support via videoconferencing. In the São Paulo Distribution Centre, picking by light technology enables disabled workers, including the intellectually impaired, to work in the order picking process. In 2018, a wheelchair user joined the São Paulo Distribution Centre team. Previously people in wheel chairs could only work in the administrative area; however, now the centre has been fully adapted, and 16% of the work force comprises people with a physical or cognitive disability. The target is to reach 30% by 2020. During the year, we also contracted the first professionals with intellectual impairment to work in the Natura stores in São Paulo and Rio de Janeiro. At the beginning of 2019, a disabled person assumed a director level role in the company.
To promote ethnic-racial equality, our efforts are centred on the intern programme, the gateway to working at Natura. In the CorageN programme, which selects people with an entrepreneurial profile to help drive the company’s innovation culture (further information on page 27), 50% of the selected candidates are black. On the LGBTI+ front, progress was made in terms of awareness. Use of an individual’s chosen name is permitted, and since 2017 the nursery may be used by the small children of employees who take maternity leave, regardless of their gender identity and sexual orientation. Externally, a partnership with the non-governmental organisation Casa 1 offered a vocational course for transsexuals, for which the company donated Natura Faces brand kits.

We ended the year with 38.2% of women occupying these positions, compared with 32.7% in 2017. It should be mentioned that in all selection processes – regardless of the hierarchical level – Natura ensures that 50% of the finalists are women.
In 2018, we also had the highest ever percentage of disabled employees – our 2020 ambition is to have 8% disabled employees in Brazil. At the end of the year, the rate was 6.5%, half of whom were disabled women.
We were ranked among the most diverse and inclusive companies in the world on a global index elaborated by the company Thomson Reuters. We were placed in eighth position in the 2018 ranking, compared with 11th place in 2017 and 18th in 2016, proof of our continuous evolution in diversity.
In all the supplier communities we conduct audits by means of the Social Biodiversity Chain Verification System, which encompasses indicators on the occurrence of child, forced or slave labour, formal labour relations, ergonomics, and worker health and safety. No deviations were identified in 2018.

One of the topics of our 2050 Sustainability Vision addresses our commitment to reduce the environmental impact of the company’s activities. We have targets related to climate change, energy, water, waste and packaging for 2020 and are working in a concerted manner to enhance our performance.
1 To implement the valuation of socioenvironmental externalities, taking into account the positive and negative impacts of the extended value chain (from the extraction of raw materials to the disposal of products) for the Natura brand.
2 The environmental and social footprints of all Natura brand products will be disclosed, as will all the respective improvement commitments.
3 For the Natura brand, reduce relative GHG emissions (Scopes 1, 2 and 3) by 33%, against base year 2012.
4 Continue to offset all emissions that cannot be avoided, primarily in the Pan-Amazon region.
5 Implement a strategy to diversify sources of renewable energy for the Natura operations in Brazil.
6 Implement a strategy to reduce and neutralize impact, based on measurement of the water footprint in the value chain.
7 Ensure that 40% of the units billed by Natura in Brazil have eco-efficient packaging
8 Use at least 10% PCR in the total mass of Natura packaging in Brazil
9 Use at least 74% recyclable material in the total mass of Natura packaging in Brazil.
10 Collect and recycle 50% of the volume of waste generated by Natura product packaging in Brazil (in t equivalent).
11 To reach 10,000 families in the Pan-Amazon production chains.
12 Achieve a business volume of R$ 1 billion in the Pan-Amazon region
13 Guarantee that 30% in value of the total inputs consumed by Natura in Brazil comes from the Pan-Amazon region.
14 Guarantee the traceability of 100% of the inputs produced by the direct manufacturers (last link) by 2015. Implement a traceability programme for the remaining links in the Natura brand value chain by 2020.
15 Evolve the supplier selection and management process, further integrating socioenvironmental and financial parameters.
16 Develop a strategy for the social biodiversity territories in the Pan-Amazon region and the communities surrounding our main operations in Brazil, by means of dialogue and collaborative construction together with the local populations and actors.
17 Evolve the indicators for measuring human and social development in our communities and develop a plan to promote significant improvement

In order to reduce emissions, we must first be aware of the extent of our impact. For this reason, the first front in the Carbon Neutral Programme involves the ongoing monitoring of all emissions generated by Natura and its production chain, which includes emissions from freight haulage operators, as well as raw materials and packaging materials supplied by third-parties. We conduct our emissions inventory, which is audited by an independent company, on an annual basis. In 2018, the inventory results indicated a reduction in relative emissions of approximately 2% compared with 2017. Strategic actions to improve efficiency in our processes and product portfolio were essential in achieving this result. However, absolute emissions increased by 8%. Based on the monitoring exercise, we were able to draft GHG emission reduction initiatives for the entire chain, which is the second front in the programme. The actions include, whenever possible, the adoption of lower impact logistics systems (we have already expanded the use of cabotage and reduced the use of air freight); local production in some countries in Latin America, reducing the impacts generated by product exports; the use of ingredients of vegetable origin in our formulas and organic alcohol in the entire perfumery line; the use of materials of renewable origin (green PE) and post-consumer recycled material, such as PET and recycled glass; as well as the commercialisation of product refills. In 2018, we avoided 9,127 tonnes of CO2 equivalent (tCO2e) scope 3 emissions (other indirect emissions).
We offset all the emissions we are still unable to avoid by contracting projects that generate climatic and socioenvironmental benefits. These include projects aimed at the conservation of social biodiversity, substitution of fossil fuels and energy efficiency, based on public calls for proposals issued by the company. This is the programme’s third front, which ensures that Natura remains carbon neutral. Six calls for proposal were issued from 2007 to 2018, resulting in the contracting of 38 projects, of which 32 were in Brazil and six in the countries in which we operate in Latin America: Argentina, Chile, Colombia, Mexico and Peru. Two thirds of the projects were related to energy efficiency initiatives, while the remainder were forestry projects. 38% were located in the Pan-Amazon region.
Combining the Carbon Neutral and Amazônia programmes enabled Natura to develop its first internal project to pay for the compensation of carbon within the company’s own production chain (a practice known internationally as carbon insetting). Referred to inside the company as Circular Carbon, the project remunerates the families of smallholders not only for the purchase of ingredients and benefit sharing, but also for environmental conservation services. Up to the present moment the project has been conducted with the reforestation cooperative RECA (Cooperativa de Reflorestamento Econômico Consorciado e Adensado), located on the border between the states of Acre, Amazonas and Rondônia. Between 2013 and 2016, the deforestation rate on the 126 participating properties corresponded to 0.93% – less than half the average 1.9% rate on surrounding properties. The conserved area corresponds to approximately 190 football pitches and resulted in the avoidance of atmospheric emissions of 104,000 tonnes of carbon gas. The cooperative received the first payment in 2017, and from 2018 payment is on an annual basis. The transfer of funds is conditional on the preparation of an annual emissions inventory audited by a third-party. Part of the funds are distributed among the smallholders’ families, while the remainder goes into a cooperative fund.
Our Sustainability Vision also encompasses ambitions related to the increased use of eco-efficient packaging, post-consumer recycled material and recyclable packaging and to the reduced generation of post-consumer waste. It is our understanding that we are responsible for our products’ entire life cycle, including the post-consumer phase, which still represents the greatest challenge for Natura and other organisations. In 2018, we stepped up our commitment in this area by formally joining the Ellen MacArthur Foundation’s global New Plastics Economy commitment, which intends to apply circular economy principles to the plastics chain. The commitment establishes targets for plastic packaging to be reached by 2025. These are aligned with the Natura 2020 Sustainability Vision ambitions. In comparison with 2017, we made a little progress in the adoption of eco-efficient packaging (at least 50% lighter than similar packaging or comprising 50% post-consumer and/or renewable non-cellulosic materials): at the end of 2018, this represented 22% of our portfolio. The company’s ambition for 2020 is to have at least 40% of its packaging within these parameters. The improvement in the indicator was due to the robust commercial performance of refills, which we use for the main product lines in the portfolio, for the Plant and Tododia sub-brands (produced with material of renewable origin) and for the Natura Ekos body care products, whose packs are made from 100% recycled PET. The Sève line was also relaunched with packs made from 100% recycled PET. Progress was also made in the use of recycled glass in perfumery – now all the Natura perfume bottles have up to 30% recycled glass in their composition. Challenges in the supply chain hamper our efforts to increase the use of this material.
In 2018, we also progressed in our commitment to collect and recycle 50% of the waste generated by Natura product packaging in Brazil by 2020 in tonnes equivalent. The indicator that measures our performance increased from 29% to 32.8%, which is the result of the volumes recovered in the two programmes in which we participate: Elos and Dê a Mão para o Futuro. The Elos Programme is a shared responsibility initiative involving Natura and its packaging suppliers, which is aimed at ensuring traceability, ratification and reverse logistics in the post-consumer recycled material supply chains that we employ for our packaging. The Dê a Mão para o Futuro (Give the Future a Hand) programme is a multisector recycling initiative conducted by Abihpec (Brazilian personal hygiene, perfumery and cosmetics industry association), Abipla (Brazilian cleaning industry association) and Abimapi (Brazilian industrialised biscuit, doughs, bread and cakes industry association). Internally, we reduced the volume of waste generated by 11%, in spite of an increase in production during 2018. For example, we launched a campaign to eliminate the use of plastic cups in our offices and started reusing boxes and lids in our distribution centres. We also began to sell oil and alcohol leftovers, which can be used in the manufacture of cleaning products and biodiesel.
We remain committed to formulating a strategy to reduce and neutralise the impact of water use throughout our value chain, including the phase of product use by consumers. To this end, we continued studies on our water footprint. In Natura’s industrial processes, relative consumption remained practically stable compared with 2017. The slight reduction is important in view of the increase in the total Natura produced in 2018, confirming the efficiency of the company’s reduction efforts. On the other hand, absolute consumption increased because we stopped using reclaimed water in the gardens of the Cajamar, São Paulo and Itupeva units, in accordance with the rules established by the São Paulo state environmental authority Cetesb (Companhia Ambiental do Estado de São Paulo).
Natura’s relationship with Pan-Amazon social biodiversity (which includes all the countries whose territory encompasses the forest) is completing two decades. In 1999, one year before the launch of the Ekos product line, we started to develop ties with the Amazonian communities which later supplied us with ingredients. In 2011, to coordinate our activities in the region, we established the Amazônia Programme.
The programme strategy was updated in 2018. Its three pillars continue to be: (1) science, technology and innovation; (2) social biodiversity production chains; and (3) institutional reinforcement. Through the Amazônia Programme, we seek to promote environmental conservation and regeneration; social inclusion, diversity and generation of work and income; placing value on Amazonian culture, traditional communities and the indigenous peoples. We reaffirm our belief in the importance of keeping the forest standing because, as underscored in a report published at the beginning of 2018 by Brazil’s climate change watchdog Instituto Nacional de Ciência e Tecnologia para Mudanças Climáticas, if deforestation in the Amazon reaches between 20% and 25% – something which is close to happening –, it will be impossible to reverse the changes in the region’s hydrological cycle, which will provoke serious consequences for the climate. Through the Amazônia Programme, in partnership with government and non-governmental organisations and the communities, we contribute to the conservation of some 257,000 hectares of forest, approximately equivalent to the joint area occupied by the cities of São Paulo and Rio de Janeiro. Internally, Natura maintains two important ambitions for the Pan-Amazon region, which are part of the company’s 2050 Sustainability Vision. The first, which established that the company should generate R$ 1 billion in business volume in the region between 2010 and 2020, has already been exceeded by more than 50%. At the end of 2018, the cumulative volume was more than R$ 1.5 billion. The second ambition, also for 2020, is that 30% of the inputs consumed by Natura should come from the Pan-Amazon region. In 2018, the cumulative relative volume was 17.8%, slightly below the figure for the previous year, due to the company’s sales mix. Even so, during the year we bought an additional absolute volume of 14% of company

1 EP&L (Environmental Profit and Loss) was implemented in 2017 and, in 2018 we initiated adoption of SP&L (Social Profit and Loss). Valuation of the socioenvironmental impact of the carbon offsetting programme demonstrated a positive balance of R$ 1.6 billion.
2 The environmental table is presented on product packaging. Since 2017, we have provided the product footprint for purchases made via the internet. The product transparency strategy is being reviewed/implemented.
3 We ended 2018 with a 2% reduction against the base year (2012). Measures prioritized efficiency in processes and the product portfolio. The challenge to reduce our emissions significantly by 2020 continues.
4 We have offset 100% of our emissions since 2007. Additionally we have a partnership with Itaú Unibanco and Instituto Ekos Brasil whereby we have created the first offsetting project that remunerates supplier communities for environmental conservation and for combating deforestation. We have calculated the programme’s socioenvironmental impact over 10 years: R$ 1.6 billion equivalent in socioenvironmental services in the 38 projects supported, 3.4 million tonnes of CO2 offset, more than 7,000 hectares of forestland reclaimed or maintained and more than 15, 000 families impacted directly.
5 The energy matrix of the operations in Brazil comprises more than 95% power from renewable sources. The diversification strategy is being planned and will be ready by 2020.
6 We finalized the water footprint study and incorporated ecotoxicity assessment into product safety assessments. We have not yet begun to build the water footprint reduction and neutralisation strategy.
7 We reached 22%, the result of the sale of refills, packaging of renewable origin in the Plant and Tododia product lines and post-consumer recycled packaging for Ekos and Sève.
8 In 2018, we increased the use of post-consumer recycled glass for the entire perfumery category by 30%, reaching an overall rate of 5.4%. We have post-consumer recycled glass in all our perfumery, while the Ekos body and Sève lines use 100% PCR.
9 The rate reached 50%. The challenge we face is in the ecodesign or redesign of products and packs to increase recyclability, particularly in product categories that do not yet have a chain in place in Brazil.
10 Our rate is at 32.8%, as a result of two programs: Dê a Mão para o Futuro (Abihpec sector reverse logistics initiative) and Elos (a shared responsibility initiative between Natura and its packaging suppliers aimed at ensuring endorsement, traceability and reverse logistics in the post-consumer recycled material supply chains incorporated into our packaging).
11 The total is 4,636 families, the increase being due to the supply of the ingredients Patauá and Tucumã. Our challenge in achieving the 2020 commitment will depend on the strategy to expand use of Pan-Amazon vegetable ingredients proportionally to the company’s growth.
12 Business volume has already reached R$ 1.5 billion. Amazonian ingredients and funds allocated to the communities represent respectively 58% and 9% of investments. Worthy of note in 2018 were the allocation of proceeds from benefit sharing to the Iratapuru Fund and the environmental conservation and regeneration initiatives in sustainable supply chains.
13 The rate was 17.8%, with an increase in the use of these ingredients being developed in the main categories and product lines.
14 In 2018, we were awarded international UEBT (Union for Ethical BioTrade) certification, which attests to the ethical supply system for the natural ingredients used in the Ekos product line, guaranteeing traceability in the social biodiversity link. Traceability will be developed for the other critical chains in the coming years.
15 The supplier selection and management process is being reviewed.
16 To generate transformations at scale, we work in arrangements and partnerships with local governments, grass roots communities and companies to promote territorial development solutions. In the Pan-Amazon region, worthy of note werethe rural education actions and the training of young entrepreneurs in the Mid Juruá Territory (AM) and the Rede Jirau activities in the Lower Tocantins Territory (PA). We support the training of sustainable rural entrepreneurs focused on the forest and biodiversity. We maintained our activities with the UDBEN network in the Benevides (PA) region (exhibition of social projects in Benevides, and the ConVIVA (community reclamation) and Inova Cajamar (urban reclamation) networks.
17 In 2018, we created the Human Development and Social Impact Programme (PDHIS in the Portuguese acronym ). In 2016 and 2017 we experimented with some territorial development indicators such as the Social Progress Index (IPS), in the Mid Juruá (AM) region and in Cajamar (SP). We also support the Rede Nossa São Paulo Cidades Sustentáveis movement in Cajamar. With these analyses, we seek to build the indicator impact methodologies which will help us execute the strategy.

In Natura’s Global Code of Conduct there is reference to company’s zero tolerance regarding all kind of corruption (bribe, extortion, fraud, facilitating payments etc.), which is also reflected in the Supplier’s Global Code of Conduct. It also refers that Natura (and consequently its third parties) complies with anti-corruption laws in the places where it does business, including but not limited to the FCPA, the UK Bribery Act, and both Mexican and Brazilian laws and regulation.
Furthermore, Natura has a global Integrity Policy Against Corruption and Bribery to address the matter in detail, including definitions and the information of company’s toll-free hotline to report anonymously 24x7 any suspicious of misconduct (NEL, or Natura &Co Ethics Line). In addition, said policy also makes reference to company’s third party due diligence program, which consists in vetting vendors prior of their engagement to detect potential risks, including reputational risk. Natura is signatory of the UN Global Compact and of Ethos institute business movement for transparency, integrity and to fight against corruption. In 2020 we will continue providing in person training for the employees that may have any interactions with government officials or with third parties that may have this type of interactions on our behalf, online training to all employees; and to third parties in order to reaffirm Natura zero tolerance for any type of corruption. We’ll also implement an online approval process for donations, gifts and entertainement.

Throughout 2019 Natura has had several live sessions to address the matter to stakeholders, both internal and external (i.e. third parties that have close contact with government officials while performing services on behalf of Natura). For its associates, those sessions were conducted directly by Natura’s compliance offices and last at least 1h each (e.g. just for Brazil, 600+ associates were trained in 25 sessions). Also in 2019, the NEL (Natura &Co Ethics Line) was subject of an intense communication agenda, with posters, newsletters and messages displayed in the company’s TV internal circuit. Natura is signatory of the UN Global Compact and of Ethos institute business movement for transparency, integrity and to fight against corruption. We also support Alliance for Integrity – an initiative to help small/medium size business to implement a Compliance program.

Any suspicious of corruption is classified as PSV (potential significant violation) and investigated exclusively by company’s compliance officers – who can engage external legal counsels for support in case of need. The result/outcome of these investigations are shared with Natura’s audit committee for knowledge and address potential remediation actions. For being a beauty and cosmetic company, Natura does not do business with the public sector and therefore the risk of non-compliance with anti-corruption laws is limited - up to this date, to the best of company’s knowledge, there hasn’t been any report of suspicious of corruption. KPMG audits Compliance program, including the cases that are investigated.