Braskem S.A.
Annual Report 2017

Plain-text annual report

ANNUAL REPORT 2017 < 2 > A YEAR OF TRANSFORMATION In 2017, Braskem completed 15 years of a history full of achievements and several challenges. Always with an eye on the future, we have begun a new cycle. A new stage that consolidates our innovative and peo- ple-oriented way of working. Although we are a young company, we have a sol- id growth strategy and corporate responsibility that allows us to continue to evolve as an important play- er in the global petrochemical industry. On the next pages, learn about our main projects and results throughout the year, and see how we work in a manner committed to sustainability, inno- vation, and people development. 102-1 Enjoy your reading MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSHIGHLIGHTS FOR THE YEAR Approval by the Board of Directors of investments of up to USD 675 million for the construction of the sixth Polypropylene (PP) production unit in La Porte, Texas. Consolidated EBITDA reached BRL 12.3 billion, up 7% over the previous year. Approval of our first human rights violations risk matrix, and its inclusion in the corporate risk matrix, monitored by our executives and the Board of Directors. Record production of Polyethylene, Polypropylene, Ethylene, Butadiene, and Gasoline. < 3 > Start of operations of the new Ultra-High-Molecular- Weight Polyethylene (UHMWPE) plant in the United States. Continuity of the process to improve Corporate Governance and to reinforce Compliance initiatives through training, internal and external audits, assessment and monitoring of risks and controls. The Industrial Complex in Mexico completed its first full calendar year of operation with an average occupation rate of 88%. Independent Management of the Ethics Line Channel. Braskem completes 15 years. Creation of three working groups focused on each of the fronts where we operate: Gender, LGBT (Lesbian, Gay, Bisexual and Transgender), Race, and Ethnicity. Implementation of the Sustainable Procurement Tool, which incorporates sustainability criteria into the selection of suppliers in procurement processes. Braskem Labs becomes a platform with three programs focused on innovative and sustainable business acceleration. Record net income of BRL 4 billion. For the first time, we are part of CDP WATER’s “A List” and for the second time, of the CDP CLIMATE’s A List, which recognizes the best publicly traded companies in the world regarding environmental management. Global Volunteer Program with the participation of over 359 Braskem professionals from Brazil, Mexico, and the United States, and 497 outside volunteers. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 4 > MESSAGE FROM THE BUSINESS LEADER 102-14 CREATE VALUE FOR ALL GOVERNANCE AND COMPLIANCE The year 2017 was a milestone for Braskem. Not only because We continue to improve our global Compliance system we completed 15 years of a history highlighted by many achieve- in a meaningful and structured way, through various ac- ments and learning opportunities, but also the beginning of a tions and initiatives that are ethical, integral, and trans- new growth cycle based on the desire to become an even more global and influential company in the petrochemical industry. We believe in the power of people and encourage en- trepreneurship to guide our actions. With our way of doing parent across the Company. In June 2017, our global agreement concerning the operation Operação Lava Jato, concluded in December, was finally approved, and we continue to collaborate with the authorities. things, we define our people-oriented, forward-looking posi- Likewise, our governance has undergone improve- tion, which cultivates solid relationships and creates value for ments. Our Board of Directors has increased the num- all, offering sustainable solutions from chemicals and plastic. ber of independent members, with renowned market These characteristics were shaped into a new visual identity, celebrated on the company’s 15th anniversary. experience and judgment capacity, to six out of a total of eleven members. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 5 > In a year marked by the overcoming of challenges, Braskem presented solid results, posting a record net income of BRL 4 billion RECORD RESULTS, EFFICIENCY, AND GLOBALIZATION DA reached BRL 12.3 billion last year, up compared with 2016, with record sales ported by ship arrived at the port of 7% over the previous year. In US dollars, of polyethylene. Braskem’s share in the Aratu at the end of November, enabling EBITDA reached a new historic level of Brazilian market was 69% in 2017. the first flex operation in Camaçari. USD 3.9 billion, a growth of 17%. In the North American and Euro- An important endorsement of our In 2017, Braskem repeated its excel- pean markets, sales reached 2.1 million strategy came from the Board of Di- lent industrial performance, present- tons of polypropylene, up 5% compared rectors, which, in June, approved the ing significant records in production with 2016. In Mexico, polyethylene sales construction of a new polypropylene for some of its main products. The uti- were 551,000 tons, and exports totaled (PP) plant at the La Porte complex in lization rate of the cat crackers in Brazil 418,000 tons, resulting in total sales of Texas. With an investment of up to USD The year 2017 demonstrated that we was 94%, two percentage points high- 969,000 tons, an increase of 124%. 675 million, the project will add 450,000 are on the right track implementing er than 2016, with record production of In this scenario, net consolidated tons per year of production, in line with our geographic diversification strategy, ethylene, butadiene, and gasoline. revenue was BRL 49.3 billion, up 3% over the search for a more diverse raw ma- greater balance on the scale of raw ma- Production of polyolefins in Brazil, 2016. Of this total, operations generat- terial matrix and geographical expan- terials, and the continuous search for both polyethylene and polypropylene, ed by international units and exports sion in the Americas. gains in operational efficiency. Our re- also hit its highest historical mark. In the from Brazil accounted for 47% of rev- silience and ability to face diverse sce- US and Europe, the utilization rate was enue. In terms of dollars, Braskem’s net narios have brought significant results 97%. In Mexico, the Industrial Complex revenue was USD 15.4 billion, up 12%. to all shareholders. completed its first full calendar year in From a strategic standpoint, the In a year highlighted by overcoming operation, and had an average occu- year was highlighted by the completion challenges, Braskem presented sound- pancy rate of 88% in 2017. of the raw material flexibility project for ness in its 2017 results, posting a record On the commercial side, sales of producing up to 15% of ethylene us- net income of BRL 4 billion, attributable Braskem resins totaled 3.5 million tons ing ethane as raw material at the pet- to all shareholders. Consolidated EBIT- in the Brazilian market, a 4% increase rochemical plant in Bahia. Ethane im- MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 6 > SOCIAL AND ENVIRONMENTAL RESPONSIBILITY OUTLOOK We believe in responsible management. companies in managing sustainable de- Global demand for petrochemical From the beginning, we have been com- velopment and gathers those with the products continues to grow in a very mitted to operating in accordance with best indicators in economic efficiency, healthy way, not only due to the com- principles of sustainable development environmental balance, social justice, petitive advantages of these products and, as a signatory to the United Nations and corporate governance. compared to other materials, but also Global Compact since 2007, we active- In 2017, we continued to evolve our thanks to the relevant flow of innova- ly participate in building the Sustainable Diversity practices, with the forma- tions that the industry has brought to Development Goals, principles that in- tion of three working groups focused the markets. In Brazil, in the medium volve compliance with human rights. on each of the fronts where we oper- and long term, the risk of the Brazilian Our strategy is based on the search for advances in productivity and competitiveness, with a focus on operational efficiency the global footprint and strengthening Braskem’s image and reputation among This commitment brought us sig- ate: Gender, LGBTQIA (Lesbian, Gay, economy’s performance remains due its Members, Clients, Suppliers, Soci- nificant internal achievements and ex- Bisexual, Transgender, Queer, Intersex, to the political uncertainties raising the ety, and Investors, through advances in ternal recognition in 2017. For the first and Asexual), Race, and Ethnicity. We country’s risk, especially given the lack compliance, sustainability, innovation, time, we are part of CDP WATER’s “A also defined our first risk matrix on vio- of structural reforms. In addition, the and people management. List”, which recognizes the best publicly lations of human rights, facilitating the global petrochemical market could be Finally, I would like to thank our Share- traded companies in the world regarding immediate inclusion of this aspect in impacted by the trade war waged be- holders for their trust in Braskem, as well management of the use of this natural the corporate risk matrix, monitored by tween the United States and China. as our Clients, since this partnership is resource (water)─we were the only Bra- our executives and the Board of Direc- In this context, our strategy is based one of the forces that motivates us to zilian and Latin American company to obtain the highest score in this ranking. In addition, we once again confirmed tors. Among the aspects addressed this on the search for advances in productiv- pursue the path of excellence. Mem- year, we highlight our work with the lo- ity and competitiveness, while focusing bers, Partners, and Suppliers, I thank you gistics, ethanol, and recycling chains for on operational efficiency and cost lead- for your dedication and competence, an our participation in the 13th portfolio of the protection and promotion of hu- ership; in diversification of raw materials, essential contribution to our achieve- B3’s Corporate Sustainability Index (ISE), man rights, as well as compliance and increasing participation of gas and main- ments and results, in favor of an ever which recognizes Brazil’s publicly traded corporate ethics in our relationships. taining flexibility of assets; in expanding more global Braskem. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSBRASKEM CHEMISTRY THAT TRANSFORMS. We are a global, people-oriented company with a passion for service and a clear vision for the future < 7 > MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSMESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 8 > 15 years of MAJOR TRANSFORMATION 2002 The largest petrochemical company in the Americas, today we are the fifth largest in the world in terms of production capac- ity of thermoplastic resins (Polyethylene, Polypropylene, and Polyvinyl Chloride) and basic petrochemicals (such as Ethylene, Propylene, Butadiene, and others). Born from the integration of Brazilian petrochemical assets, we have taken important steps toward internationalization, and we are steadily advanc- ing towards building a global company. This journey marked by achievements was only made possible thanks to the dedication and effort and the constant search for innovation through sus- tainable solutions along our 15-year history. 102-2 Braskem is formed by the merge of six Odebrecht Group companies and the Mariani Group, and began its activities as the largest petrochemical company in Latin America. In the same year, its shares were listed on the São Paulo Stock Exchange (currently B3) and New York (NYSE). 2006 2005 2004 2003 Braskem acquires Politeno (third largest producer of polyethylene in Brazil) and launches the first Brazilian thermoplastic resin with nanotechnology, confirming its position as a leader in innovation in the sector. 2007 The Company becomes part of the Corporate Sustainability Index (ISE) of the São Paulo Stock Exchange (currently B3). Implementation of the Braskem Innovation Program, which encourages the development of projects with new technologies and applications, and signing of the Declaration on Cleaner Production, part of the United Nations Environment Program (UNEP). Braskem lists its shares on the Madrid Stock Exchange and reaches the rank of Most Valued Company on the New York Stock Exchange. 2008 2009 Launch of the project to build a plant for the production of Green Polyethylene, Braskem’s exclusive product made from renewable sources produced from sugarcane. Inauguration of the Paulínia (SP) unit in partnership with Petrobras, the Company’s first greenfield project.1 1 Term to determine the investment in a company still in its early stages 2012 2011 2010 In 10 years, Braskem reaches 36 industrial units and 7,600 Members. A PVC plant in Marechal Deodoro (AL), and a new butadiene plant in Triunfo (RS) were inaugurated. Acquisition of two plants in the United States and two in Germany for the production of Polypropylene. 2013 2014 2015 Laying of the foundation stone of the Green Polyethylene plant in Triunfo (RS), and formation of the Braskem Idesa joint venture to produce Polyethylene in Mexico. Acquisition of Quattor, start of production of Green Polyethylene on an industrial scale, and launch of the I’m greenTM seal to be applied to products that use the raw material in its composition. The acquisition of the polypropylene assets from Sunoco Chemicals, in the United States, initiates the company’s internationalization process. Braskem becomes part of the first portfolio of the Dow Jones Sustainability Index for emerging countries. The Company is chosen by the American magazine Fast Company as one of the 50 most innovative in the world. Launch of Braskem Labs, a project to encourage entrepreneurs to develop innovative solutions for the plastics industry. First year as a sponsor of the Brazilian Paralympic track team. 2017 2016 To celebrate its 15th anniversary, Braskem launches its new visual identity. Reinforcing the continuity of the petrochemicals global expansion cycle, the new Ultra-High-Molecular-Weight Polyethylene (UHMWPE) plant is inaugurated in La Porte, Texas. Inauguration of the Braskem Idesa Petrochemical Complex in Mexico. In partnership with Made in Space, Braskem takes its Green Polyethylene to the International Space Station. In addition, the Company becomes the first Brazilian representative to join CDP Climates’ “A List”2. 2 CDP is an international organization that assesses best business practices against climate change < 9 > OUR WAY OF BEING BRASKEM BRAND MANIFESTO In 2017, Braskem completed 15 years of operation as an increasingly global company and recogni- What is the chemistry of change? For us, it’s the combination of people who are zed by clients in nearly 100 countries on all con- passionate for the new and the unexpected. It is about tinents. To reflect this new cycle, we adopted a new visual identity. This new identity expresses our values and creating bonds and working together to improve lives. We are Braskem, a human-oriented company with the passion to transform. We are a team of believers, who commitments to all our stakeholders. It repre- share our knowledge to empower the ones around us. sents a global, people-oriented company with a passion for service and a clear vision for the fu- ture. This is what allows us to create value with our Clients, in order to improve people’s lives. The design chosen contains important charac- teristics for Braskem, such as resilience, focus, and transparency. The symbol used resembles the letter “B” and forms an arrow, also indicating And we know that human connections are limitless. As individuals, we are encouraged to think, speak up and take action. As a team, we share a spirit of collaboration and optimism. We are committed to serve and to build strong ties with our clients and all stakeholders. Sustainability is at the core of our company. It’s our way of generating real and positive the Company strategy focused on the future. transformation. For us, this is only possible The colors blue and yellow represent aspects with a bold, brave and bonding attitude, where such as global scope, focus on sustainability, and the strength of human relations. Motivated to look toward the future with the conviction that we must serve our market with responsibility and competence, keeping our inspiration high and our hearts open to the challenges ahead. relentless forward thinking is valued, always. We understand our role in the world: To challenge our market with responsibility and competence, creating positive impacts for all. Most importantly, we take pride in what we do, keeping our inspiration up and our hearts open for the next challenges. After all, this is the chemistry of change. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSMESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 10 > MAP OF OPERATIONS GLOBAL PRESENCE 102-4, 102-6, 102-7 With an increasingly global performance, we have industri- we serve several markets, including food packaging, civ- al operations in four countries (Brazil, United States, Mexi- il construction, industrial, retail, automotive, hygiene and co, and Germany), as well as 16 regional offices in the main cleaning, agribusiness, health, among other segments. Fol- global economic centers that serve our Clients in over 100 lowing our commitment to sustainability and innovation, we countries. The largest producer of thermoplastic resins are also the main global manufacturer of biopolymers, with (Polyethylene, Polypropylene, and Polyvinyl Chloride) in the annual production capacity of 200,000 tons of I’m green™ Americas and producer of chemicals and basic petrochem- Green Plastic, a Polyethylene produced from sugar cane icals, such as ethylene, propene, butadiene, among others, ethanol, a source that is 100% renewable. 16 regional offices Industrial Units Basic Petrochemicals PVC and Chlorine Soda Polyethylene Polypropylene PE + PP GREEN PE UTEC Administrative Offices Administrative Headquarters Sales Offices Innovation and Technology 41 industrial units Operations in 4 countries 2 Holland Germany 1 1 Clients in nearly 100 countries 4 1 4 1 7 1 5 1 4 1 Singapore 1 1 United States Mexico 1 4 1 1 1 1 1 Venezuela Colombia Peru Brazil Chile Argentina 1 1 1 3 7,713 members Production of nearly 20 million tons Consolidated net income of BRL 4.133 billion www.braskem.com.br > Braskem-no-mundo www.braskem.com.br > unidades-braskem to view the addresses of our units worldwide Braskem does not produce or market products derived from genetically modified organisms (GMOs) or products containing GMO ingredients, whether in Brazil or abroad. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS CRÉDITOS < 11 > BUSINESS MODEL Our Resources Activities FINANCIAL NET EQUITY OF BRL 5.690 BILLION BRL 2.3 BILLION INVESTED GROSS DEBT OF USD 7.649 BILLION, 9% LESS THAN THE PREVIOUS YEAR NATURAL CONSUMPTION OF 3.98 m³/t OF WATER AND 10.56 GJ/T OF ENERGY PER TON PRODUCED BRL 13.1 MILLION INVESTED IN ENVIRONMENTAL PROJECTS HUMAN 7,713 MEMBERS, 78% MEN AND 22% WOMEN MORE THAN BRL 21.2 MILLION INVESTED IN TRAINING INVESTMENT OF BRL 99 MILLION IN 323 HEALTH AND SAFETY PROJECTS INTELLECTUAL INVESTMENT OF BRL 167.5 MILLION IN INNOVATION 355 PROJECTS TO DEVELOP NEW PRODUCTS AND PROCESSES 29 NEW PATENT REQUESTS AND 83 EXTENSIONS MANUFACTURED 41 INDUSTRIAL PLANTS, TOTALING AN ANNUAL PRODUCTION CAPACITY OF RESINS AND CHEMICALS OF 21.101 MILLION TONS 83% OF THE INDUSTRIAL UNITS IN STAGE 4 OF SEMPRE - ASSURED PERFORMANCE IN HSE SOCIAL INVESTMENT OF BRL 19.7 MILLION IN 83 PROJECTS IN THE COMMUNITIES MORE THAN 856 PARTICIPANTS IN THE PILOT PROJECT OF THE GLOBAL VOLUNTEER PROGRAM COSTS TOTAL COSTS OF BRL 36.4 BILLION, 4% OVER 2016, IN RAW MATERIALS, SALARIES AND BENEFITS, SERVICES AND OTHERS. NAPHTHA ETHANE/ PROPANE CHEMICALS AND VINYLS UNIT PVC CAUSTIC SODA ETHYLENE/PROPYLENE POLYOLEFINS UNITS GREEN ETHYLENE POLYETHYLENE (PE) POLYPROPYLENE (PP) SUGARCANE ETHANOL RENEWABLES UNIT GREEN POLYETHYLENE REVENUE NET REVENUE OF BRL 49.3 BILLION, A 3% GROWTH IN RELATION TO THE PREVIOUS YEAR NEGATIVE DIRECT EMISSIONS OF 10,182,558 tCO₂e (SCOPE 1) AND INDIRECT EMISSIONS OF 1,072,713 tCO₂e (SCOPE 2) - CARBON INTENSITY OF 0.573 tCO₂e/t GENERATION OF 2.13 KG OF SOLID, LIQUID AND PASTY WASTE PER TON PRODUCED GENERATION OF 1.06 m³/t OF LIQUID EFFLUENTS 43 REPORTABLE ACCIDENTS, 14 OF WHICH WITH LOST TIME AND 29 WITHOUT LOST TIME 6 TIER 1 AND 31 TIER 2 PROCESS ACCIDENTS RECORDED IMPACTS POSITIVE 138 SUPPLIERS ENGAGED IN THE CLIMATE AND WATER SUPPLY PROGRAMS MORE THAN 1,278 PICKERS BENEFITED, 35 ASSOCIATED COOPERATIVES AND 14,000 TONS OF WASTE RECYCLED THROUGH SER+REALIZADOR 14 LIFE CYCLE ASSESSMENT STUDIES 25.7% WATER REUSE 35% REDUCTION IN TIER 1 ACCIDENT RATE AND 18% IN TIER 2 ACCIDENT RATE Creation of value INVESTORS / SHAREHOLDERS RECORD EBITDA OF BRL 12.3 BI, 7% OVER 2016 RECORD NET INCOME OF BRL 4.1 BILLION PROFIT OF BRL 5.1 PER SHARE CLIENTS MEMBERS CIVIL SOCIETY GLOBAL SALES VOLUME OF 12.157 MILLION TONS, CONSIDERING EXPORTS AND INTERNAL MARKET 7,438 MEMBERS TRAINED 213 LEADERS TRAINED IN DEVELOPMENT PROGRAMS SHARE INCREASE IN THE BRAZILIAN MARKET TO 69% 1.7% VOLUNTARY TERMINATION RATE, THE SMALLEST IN THE LAST FOUR YEARS MORE THAN 144,000 PEOPLE BENEFITED BY COMMUNITY PROJECTS 1,222 ACTIONS AND 18,786 ITEMS COLLECTED THROUGH THE PILOT PROJECT OF THE GLOBAL VOLUNTEER PROGRAM CRÉDITOS Strategy for Sustainable Development We believe that sustainable development should be with the evolution of the goals on the next page) and a goal that is in line with business strategy. Therefore, projects aligned with the Sustainable Development we seek innovative solutions that interact with our Goals (ODS), defined by the United Nations (UN) in vision of growth, creating value for our operations, 2015. As a member of the Brazilian Network of the increasing the reputation of our brand and – most UN Global Compact, the Company made an active importantly – continuously minimizing any environ- contribution to the construction of Sustainable De- mental and social impacts caused by our activities. velopment Goals (ODS). Since 2002, when we started our activities, we Our sustainability principles, incorporated into have already invested approximately BRL 500 mil- the operational and manufacturing processes of lion in improving water, energy and operational effi- the Company’s products, also extend to projects ciency of our production units and strengthened our carried out outside the company. These initiatives commitment to economic growth, environmental are conducted as part of voluntary commitments preservation and social justice. established by the Company and materialized Within our vision of “improving people’s lives by through participation in forums and associations to creating sustainable solutions in chemistry and streamline the process to transition to a competi- plastic,” we work with challenging goals set out in our 10 sustainable development macro goals (see chart tive, responsible and inclusive low-carbon economy. 102-12, 102-13 < 12 > Human Rights Human rights are basic rights inherent to all human beings, regardless of their gender identity, sexual orientation, race, nationality, social strata, religion, physi- cal characteristics, or any other condition. According to the Universal Declaration of Human Rights, these rights include the right to life, liberty, freedom of speech and expression, the right to work and to education, the right to well-being, among many others. Consequently, they are not only social. Rights can be civil, political, economic, cultural, and even environmental. We adopt internationally recognized human rights as the base for our sustain- able development and we respect these rights in developing our business, includ- ing direct operations, joint ventures, and the value chain. This commitment is in line with the United Nations Guiding Principles on Businesses and Human Rights. Respect and advocacy for human rights are responsibilities of all our Mem- bers and business partners, who must identify, prevent, and proactively mitigate the exposure to risks of violating human rights, in addition to remediating current impacts resulting from our operations, products, or from our business relations, pursuant to the code of conduct and guidelines approved, respectively, by the Board of Directors and the Executive Board. Based on our risk matrix for violation of human rights, approved in 2017, our operations and those of our business partners can impact human rights. There- fore, Human Rights and their impacts will permeate the various sections of this report, in benefit of Compliance, Diversity, Health, Safety, Work Conditions, Envi- ronment, Post Consumption, Well-Being, and Local Traditions, among others. You can identify specific cases through the icon. To learn more about the initiatives in which we participate and about our voluntary commitments, visit www.braskem.com.br/voluntary-commitments For more information, visit www.braskem.com.br/human-rights MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 13 > Macro Goals for sustainable development SUSTAINABILITY ALIGNED WITH THE BUSINESS 102-12 Since our foundation, we have sought to align our growth strategy with processes and actions that minimize possible environmental and social impacts. With a focus on developing a sustainability strate- gy, we work with ten macro goals and targets set for 2020 - all linked to UN’s 17 Sustainable Development Goals (ODS). Based on a correlation process, 79 con- crete contributions were identified in five goals most positively impacted by Braskem: 6 9 11 2020 GOAL SAFETY ECONOMIC AND FINANCIAL RESULTS POST CONSUMPTION LOCAL DEVELOPMENT WATER EFFICIENCY To be among the benchmarks in chem- icals, occupational, and process safety in the Global chemical Industry. To be among the top three thermo- plastic resin producers in the world and ensure profitability that sustains busi- ness continuity while maintaining the Investment Grade rating in the three major international agencies. To be one of the five largest traders of PE and PP with recycled content in the world, among the petrochem- ical companies producing Polyolefins. And to become an important driver of growth of plastic recycling in Brazil, helping achieve the goals in the Sector Agreement on Packaging. To achieve the “excellent” reputation level in the Citizenship Dimension of RepTrak® Pulse, demonstrating that the Company is recognized by the community surrounding the facility and by society at large for its contri- bution to the improvement of human development. To be among the benchmarks in the use of water resources in the glob- al chemical industry in terms of water consumption and water reuse. % OF THE GOALS ACHIEVED % OF THE GOALS ACHIEVED % OF THE GOALS ACHIEVED % OF THE GOALS ACHIEVED % OF THE GOALS ACHIEVED 2015 2016 2017 2020 83% 99% 98% 100% 2015 2016 2017 2020 85% 73% 73% 100% 2015 2016 2017 2020 1% 1% 1% 100% 2015 2016 2017 2020 78% 86% 81% 100% 2015 2016 2017 2020 100% 96% 100% 100% CLIMATE CHANGE DEVELOPMENT OF SOLUTIONS STRENGTHENING PRACTICES RENEWABLE RESOURCES ENERGY EFFICIENCY Clean Water and Sanitation Industry, Innovation, and Infrastructure Sustainable Cities and Communities 12 13 To be among the world’s best large chemical companies in intensity of Greenhouse Gas (GHG) emissions while maintaining the use of renew- able raw materials. To be recognized as a company that supports its clients in the development of environmental and social solutions using Chemistry and Plastics, reaching a “strong” reputation level through its products & services. To be among the business bench- marks in Brazil for its contribution to Sustainable Development. And as one of the global benchmarks in the sec- tor for its contribution to Sustainable Development. To be among the leading producers of chemicals and thermoplastic resins from renewable raw materials. And remain the world’s largest producer of thermoplastic resins from renew- able sources. To be among the best large chemical industries in the world in intensity of energy consumption and to be a major user of renewable energy sources. Responsible Consumption and Production Climate Change www.braskem.com.br/sustainable-strategy % OF THE GOALS ACHIEVED % OF THE GOALS ACHIEVED % OF THE GOALS ACHIEVED % OF THE GOALS ACHIEVED % OF THE GOALS ACHIEVED 2015 2016 2017 2020 99% 93% 100% 100% 2015 2016 2017 2020 84% 85% 91% 100% 2015 2016 2017 2020 87% 91% 94% 100% 2015 2016 2017 2020 82% 82% 82% 100% 2015 2016 2017 2020 85% 84% 85% 100% MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 14 > GOVERNANCE AND COMPLIANCE TRANSPARENCY AND RESPONSIBILITY For us, integrity and safety are at the heart of a valued, competitive, and successful company. These are principles that guarantee the perpetuity of the business and our reputation in the market. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSFor Corporate Governance and Compliance, the year was highlight- For us, working in accordance with applicable laws, reg- ed by the consolidation of several initiatives focused on upgrading ulations, policies and best practices became a fundamental and improving processes. After the approval of the Compliance Pol- principle. For Braskem, effective compliance represents an icy by the Board of Directors, in 2016, we have been implementing a solid Compliance System, defining several policies and procedures, intangible asset in the protection and strengthening of the Business. 102-16 improvements in risk management, reinforcement of compliance, internal audits, adoption of internal controls, communication and training initiatives focused on continuous improvement that guide Our Code of Conduct is translated into all the languages of the our ethical, integral and transparent operation. countries where Braskem operates, and can be viewed on the Company’s intranet and website (www.braskem.com). COMMITMENT GLOBAL TRAINING ON THE CODE OF CONDUCT In just one year, we increased by 23% our performance in the In 2017, we strengthened our awareness of our Compliance integrity indicators defined and measured by Instituto Ethos, Policy and globally carried out our online training on the Code demonstrating our commitment to improving our practices and of Conduct. managing our business in a sustainable and responsible manner. < 15 > Independent Board of Directors In June 2017, three new independent Board Members were elected to join the Compa- ny’s Board of Directors. With this change, today the group consists of six independent members with renowned experience in the market out of a total of 11 Members. Since 2015, Braskem’s Board of Directors formed by professionals with renowned experi- ence in the market and in aspects related to strategy and corporate governance ex- ceeds 90%. To learn about the structure of our Board To learn more about our structure, principles, and and Departments, visit www.braskem-ri. Corporate Governance model, visit www.braskem.com.br/ com.br/councils-and-board corporate-governance or our Investor Relations website at www.braskem.com.br/corporate-governance 102-18, 102-23 MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 16 > STRENGTHENING 103-2, 103-3 Reporting directly to the Board of Directors since its cre- The commitment of the area is to disseminate the culture ation in the first half of 2016, our Compliance Department is of compliance across the company, whether through online formed by four areas ─ Internal Controls, Risk Management, or classroom training, workshops, engagement campaigns Compliance, and Internal Audit. Compared with the previ- among other initiatives. After training senior management ous year, the department reinforced its personnel structure. in 2016, the process to disseminate policies, guidelines, and In addition to relying on people responsible for Compliance other information across Braskem was the main focus of ac- for the United States, Europe, and Mexico, the department tivities in 2017. One of the highlights was the mandatory re- tripled the number of professionals in our team, going from quirement for 100% of the Members to retake the training eight (in 2016) to 27 members. course on the Code of Conduct. COMPLIANCE STRUCTURE 2016: 8 Members in Brazil also catering to the needs of local plants 2017: 27 people from 5 different nationalities, which favors diversity, reinforces this topic in each location where we operate, and gives it global dimension. SPECIFIC TRAINING 9 classroom training courses and 303 Members trained TRAINING ON ETHICS, INTEGRITY, AND TRANSPARENCY3 5 classroom training courses and 246 Members trained 3 This training began in 2016 and was completed in 2017. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS < 17 > COMPLIANCE MEASURES 103-2, 103-3 With ten structured measures in the Prevention, Detec- put the Program into practice and completed 81 of these tion, and Remediation pillars, in 2016 we developed a robust initiatives. In all, 119 initiatives have already finished. The Compliance Improvement Program, comprised of 162 ini- remaining medium- and low-priority projects will be ad- tiatives to improve the environment. Throughout 2017, we dressed throughout 2018. 2 4 Main deliveries in 2017 1 Compliance Governance • Hiring Compliance Officers for Mexico, United States, and Europe • Structuring the Compliance area in Mexico and the United States • Electing three new independent Members to the Board of Directors Policies and other guidelines • Global implementation of the Code of Conduct and Compliance Policy • Guideline and procedures for assessment and approval of suppliers and relationship with public agents in Brazil, Mexico, and the United States • Tool for recording interactions with public agents and receiving gifts in Brazil, Mexico, and the United States • Guideline and procedure for donations, sponsorships, gifts, and expenses, with representation in Brazil, Mexico, and the United States • Creation of the Global Internal Audit and Internal Control Guidelines 3 Risk Assessment and Controls • Enterprise Risk Assessment carried out Communication and Training • Training on the Code of Conduct in Brazil, the United States, and Mexico • Global Dissemination of the 10 commitments to Ethics, Integrity, and Transparency • Global Survey on Perception of Compliance • Classroom training of all areas with greater exposure to compliance risks MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS5 Third-party Compliance • Implementation of the Due Diligence Process with the assessment of over 2,000 Suppliers in Brazil, including aspects of integrity, with criteria such as political ties, adverse media, restrictive lists, litigation, and conflicts of interest, in the constant search for transparency in our relationships. 6 Engagement in Collective Actions • Alignment with key stakeholders for Engagement in Compliance Actions and Initiatives • Participation as a formal member in initiatives of the Global Compact and the Ethos Institute 7 Management of the Ethics Line Channel • Migration of the internal reporting channel to a new professionalized and outsourced tool • Complete analysis of the backlog of claims from 2015 and 2016 8 Monitoring of Risks and Controls • Implementation and monitoring of new Risk Indicators • Carrying out the work foreseen in the Global Internal Audit Plan • Implementation of tool for monitoring Corporate Credit Card expenses • Implementation of a regular audit process for donations and sponsorships 9 Addressing Risk and Strengthening Controls • Implementation of recommendations proposed by external auditors • Remediation of vulnerabilities identified in internal investigation • Creation of new internal controls and rationalization of existing ones < 18 > 10 Disciplinary Measures • Creation of a Global Guideline on Disciplinary Measures MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 19 > Commitment In addition to its internal policies, Braskem is a mem- In 2016, this work focused on assessing compliance risks, and effectiveness. Its main responsibilities are to ensure ber of the UN Global Compact, and participates in the and managed to globally identify priority areas with greater that activities and processes are in compliance with our Anti-Corruption Working Group of the Brazil Network exposure and, consequently, apply the necessary mitigation internal policies and external regulatory standards, inde- of the Global Compact, and is a member of the Ethos measures. In 2017, the work gained a new dimension by in- pendent verification of the effectiveness of the controls, Institute’s Corporate Pact for Integrity and Against corporating, in a more structured way, the strategic, financial, proposing improvements, support Braskem’s risk manage- Corruption, participating in the Integrity Working and operational risks, in addition to the regulatory risks evalu- ment, and identify the opportunity to reduce costs and Group. In these groups, Braskem follows bills regard- ated in the previous year. gain efficiency. ing the fight against corruption and other changes. In 2017, the Compliance area promoted 88 risk assess- Establishing internal audit processes is among the vari- RISK ASSESSMENT In our review of Compliance processes, efforts were made to ment workshops conducted globally, involving 234 leaders ous actions structured to strengthen our governance prac- in work to identify, analyze, and prioritize risks. In addition, we defined heat maps4 and ranking of priority risks for each business area, in each region, and a consolidated, global view tices. With the first global plan approved in December 2016, we turned our attention to improving controls through 13 projects in all locations. establish a robust Risk Management procedure to identify, of Braskem’s priority risks. understand, and respond to risks that could impact the Com- With these views, it is possible to work in a structured way pany’s strategic goals. This new process ensures that decision to prevent the materialization of risks, and help organize the REVISED DOCUMENTATION To bring even greater agility and transparency, and makers have timely access to sufficient information, increas- redirection of the Crisis Management process and build Busi- strengthen the reliability of our processes, we reformu- ing the likelihood of reaching their goals and reducing risks to ness Continuity Plans. acceptable levels. It also seeks to preserve the shareholders’ tangible and intangible assets, the safety of people, and the integrity of the environment and communities by improving INTERNAL AUDIT Our Internal Audit area is focused on increasing and pro- lated Braskem’s documentation structure. We began re- viewing approximately 150 documents, including Policies, Procedures, and Guidelines. This company-wide initiative, involving several areas, also includes an improvement proj- decision-making processes and properly handling risks and tecting organizational value, providing independent and ect for the online tool where all of the Company’s norma- negative impacts arising from their occurrence. objective assessment of processes, verifying compliance tive documentation is archived. 4 Representation of data in the form of a map or diagram where data values are shown as colors. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS < 20 > WHO IS RESPONSIBLE FOR ENSURING COMPLIANCE AT BRASKEM? RESPONSIBILITY OF ALL In order to understand the Members’ view regarding concepts of Compliance, as well as their understanding of the Company’s poli- cies, we conducted a global internal survey from March to May 2017, which was attended by over 2,800 Members from Brazil, the Unit- ed States, Mexico, and Germany. The survey also sought to give us a more realistic view of team expectations, building processes and communication channels based on the opportunities identified. In early 2018, we conducted a new survey to evaluate the results of the actions implemented in 2017, with data that will help us verify new needs for improvement. 2018* Base: 4,024 All Members All Leaders Area responsible for Compliance Business Leader (CEO) Board of Directors Other Don’t know/ Did not answer 95.2% 1.7% 1.6% 0.8% 0.4% 0,4% 0,1% * The results refer to the 2017 initiatives. WHAT ARE THE TOP THREE PRIORITIES OF THE COMPLIANCE AREA? Disseminate the culture of ethics, integrity and transparency Objectively evaluate compliance with Policies and Procedures Support in adjusting the company’s internal control environment Support in risk assessment and integrated monitoring Independently report to the Board Other Don’t know/ Did not answer 2018 Base: 4,024 85.3% 71.2% 61.4% 44.4% 19.6% 2.0% 0.5% MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 21 > NEW ETHICS LINE CHANNEL 102-17, 103-2, 103-3, 406-1 Going forward with the plans to advance the reporting chan- This modernization also allows us to contact the person ─ nel, we launched our Ethics Line Channel to provide all our anonymously ─ if further clarification is needed on the case. audiences with even more secure communication for re- In addition, a new procedure of handling complaints and test porting behaviors deemed unethical. With the outsourcing protocols by subject were developed in order to make the of this service, and a new independent team trained to re- ceive and assess reports received5, we have made the chan- nel more professional, effective, impartial, and credible. In- work more robust and more reliable. In 2017, the cases investigated were presented during the five meetings of the Ethics Committee. Specific cas- ternally, our Compliance team assumed the responsibility es of greater relevance were presented at the meetings of for investigating the reports registered on the channel. the Compliance Committee. Due to the internal commu- In operation since April 2017, all incoming calls are an- nication actions on the new Ethics Line Channel, we had a swered personally and with more personal treatment, with- out the use of recordings. In addition to the online channel, telephone service is available 24x7, and is conducted in each record number of cases filed, jumping from 107 in 2016 to 177 in 2017. In addition, of the investigations closed in 2017, 23% were considered to be unfounded, and 77% were con- country’s language (Brazil, USA, and Mexico), with the ex- sidered to be founded, of which 25 reparatory measures ception of Germany, where reports are received in English. were recommended by Compliance. Of the reports filed in All reports are given a call number so that the complainant 2017, 64% of the complainants were anonymous and 36% can follow the progress of the analysis until it is complete. identified themselves. 5 The ICTS partner company is now responsible for managing the first report from complainants. Learn more at www.icts.com.br (in Portuguese). MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSMain results of the Ethics Line Channel in 2017 Of the cases opened in periods prior to 2017, a total of 48 had their investigations closed in the year. These cases were presented during the 5 meetings of the Ethics Committee in 2017. 11 cases were considered to be founded (magnifying glass on Human Rights*: 2 mobbing cases in Brazil), which resulted in the following reparatory measures: - 2 terminations of Members. - 3 formal warnings. - 2 creations/adjustments of controls. 177 cases opened in 2017 Of these, 88 were analyzed in 2017, pointing out that all cases are always presented at meetings of the Ethics Committee. 20 cases were considered to be founded (magnifying glass on Human Rights*: 1 case of abuse of power, 1 of discrimination, 1 of sexual harassment and 2 of mobbing in Brazil, and 1 of mobbing in Mexico). As a result of the cases deemed to be founded, the follow- ing reparatory measures were indicated by Compliance: - 1 terminations of Members - 3 creations/adjustments of controls - 5 oral warnings/feedbacks - 3 Partner employees dismissed - 1 cancellation of contract with Partner 64 cases opened in 2017 began the year 2018 under investigation. Of the 64 cases from 2017 that began the year 2018 under investigation (magnifying glass on Human Rights*: 7 are cases of harassment in Brazil and Mexico). The last meet- ing in 2017 was held on 10/31/2017. All actions after that date will be disclosed in the 2018 Annual Report. Support to victims: Braskem has improved its performance in benefit of victims. In 2017, for example, we had a case of threat to a Member who received personal security services hired by the company until this person’s workplace was changed to another state in Brazil. * Focus on cases of discrimination, harassment, and abuse of power. < 22 > Braskem Ethics Line The reports may be made any day and time through a toll-free number or via the Internet, on the Ethics Line Channel: • www.linhadeeticabraskem.com • Brazil: 0800 377 8021 • Mexico: 01 800 681 6940 • USA: 1 800 950 9280 • Germany: 0800 183 0763 • Holland: 0800 022 7714 MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 23 > BUSINESS PERFORMANCE RECORD RESULT IN A CHALLENGING SCENARIO We demonstrated our resilience and ability to face diverse scenarios, bringing significant results to all shareholders. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 24 > In 2017, we repeated our excellent in- competitiveness, and Governance and sured by the Net Debt/EBITDA ratio by the three major risk classification dustrial performance, presenting sig- Compliance standards. in dollars was 1.91x at the end of 2017. agencies (S&P, Fitch, and Moody’s). nificant production records of some of This advancement can be explained Braskem retained its investment grade The reports are available on the Inves- our main products. mainly by the higher volume of sales by Standard & Poor’s (BBB) and by Fitch tor Relations website www.braskem-ri. Despite the many challenges, we in Mexico due to the higher spreads Ratings (BBB) and above sovereign risk com.br. 102-9, 201-1, 103-2, 103-3 ended 2017 with a record EBITDA both in the international chemicals mar- in terms of Brazilian reais and US dol- ket, expanded capacity, and increase lars: BRL 12.334 billion and USD 3.872 in sales volume from the units in the billion, representing, respectively, an United States and Europe, due to the increase of 7% and 17% compared with higher volume of sales in the Brazilian the previous year. A result that has market and the capital gain of USD 88 been achieved due to our strategy fo- million from the disposal of quantiQ. cused on international presence, di- In the year, the Company’s free cash versifying raw materials, constant im- generation was BRL 2.46 billion, up 9% provement of operational efficiency, from 2016. Corporate leverage mea- In 2017, Braskem recorded consolidated net income of BRL 4.133 billion. Reinforcing the Company’s global presence, 47% of our consolidated net revenue (ex- resale of naphtha and condensate) was generated in international markets. NET INCOME 2017* Mexico USA/Europe 7% 20% Exports Brazil 19% Brazilian Market 53% Vinyls Polyolefins 3% 61% Chemicals 37% Exports Brazil Other Mercosur 58% 42% Resin Exports *Does not consider revenue from resale of naphtha and condensate. Vinyls 11% Polyolefins 53% Chemicals 36% Brazilian Market MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 25 > VALUE ADDED STATEMENT (VAS) Our global performance allowed for, at the end of 2017, a total value-added distributed of over BRL 14.5 BRL million. This total, 38% higher than the previous year, reflects our contribution to the economy of the locations where we operate and our financial return to society. STATEMENT OF VALUE ADDED (all amounts in thousands of reais) CONSOLIDATED PARENT COMPANY Revenues Sales of goods, products and services Other (expenses) revenues, net Provisions for credits of doubtful debtors 2017 58,000,752 57,958,099 1,202 41,451 2016 ADJUSTED 52,429,423 55,930,688 (3,437,060) (64,205) Inputs acquired from third parties (41,147,077) (39,909,905) Costs of products, goods and services sold (38,845,377) (37,802,247) 2017 45,303,874 45,351,039 (82,722) 35,557 (34,116,843) (32,523,499) 2016 ADJUSTED 39,775,501 42,711,853 (2,867,482) (68,870) (31,662,604) (30,222,548) Materials, energy, third-party services, and other Loss of asset values Gross value added (2,237,835) (63,865) 16,853,675 (2,019,390) (1,539,920) (1,353,186) (88,268) 12,519,518 (53,424) 11,187,031 (86,870) 8,112,897 Depreciation, amortization, and depletion (2,928,855) (2,683,100) (1,880,065) (2,052,972) Net value added produced by the Company 13,924,820 9,836,418 9,306,966 6,059,925 Value added received in transfer Equity income Financial income Other 652,527 48,832 603,630 65 720,407 30,078 690,122 207 2,996,197 2,450,872 545,262 63 1,618,945 986,493 632,452 Total value added for distribution 14,577,347 10,556,825 12,303,163 7,678,870 Personnel Direct remuneration Benefits FGTS (government severance fund) Taxes, fees and contributions Federal State Municipal Remuneration of third-party capital Financial expenses (exchange rate variation) Leases Remuneration of own capital Retained earnings in the accounting period Dividends Non-controlling shareholding interest in subsidiaries Results from discontinued operations 1,421,214 1,147,158 212,815 61,241 4,232,072 2,214,611 1,995,068 22,393 4,790,740 4,545,979 244,761 4,133,321 3,074,114 1,000,000 50,331 8,876 1,267,513 986,940 218,110 62,463 3,018,046 1,288,179 1,703,249 26,618 7,000,463 6,755,962 244,501 (729,197) (438,331) (17,725) 26,859 1,018,832 801,083 154,876 62,873 3,511,778 1,569,651 1,928,530 13,597 3,689,563 3,487,287 202,276 4,082,990 3,074,114 1,000,000 765,684 564,067 140,879 60,738 2,246,826 732,051 1,502,420 12,355 5,077,832 4,888,738 189,094 (411,472) (442,430) 8,876 30,958 Total value added distributed 14,577,347 10,556,825 12,303,163 7,678,870 For more information about the financial statements presented, including the financial entities considered in the consolidated numbers, visit: www.braskem-ri.com.br/annual-reports 102-45 MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 26 > STEPS TO GLOBALIZATION As part of the evolution of Braskem’s position, and focused on operating as an increasing- ly global company, in 2017 we changed the no- menclature of our Business Units and adopted a language more consistent with the market. The purpose of this initiative is to facilitate the understanding of each of our segments of op- eration, informing about the products and geo- graphic reach of each Unit. • Basic Petrochemicals and Vinyls Unit: now called the Chemicals and Vinyls Unit (formed by the Small Chemicals and Vinyls Companies) • Polyolefins, Renewables, and Europe Unit: new Polyolefins Unit South America and Eu- rope (formed by the Small Companies of Poly- ethylene South America, Polypropylene South America, Renewables, Polyolefins Exports, and Polyolefins Europe). • North America Unit: becomes Polyolefins Unit North America (includes the Small Com- panies Polypropylene North America, UTEC, and Braskem Idesa). BRAZIL The gradual recovery of the economy and GDP growth in 2017 have already brought positive results for the industrial activ- ities in Brazil, and consumption recovery due to the increase in purchasing power of families. In line with this market ex- pansion, we had a total sales volume of 3.486 million tons in the year, with increase in market share of PE, PP, and PVC to 69% and an EBITDA of BRL 8.675 billion. Demand for resins in the Brazilian market reached 5.1 million tons, 4% higher than in 2016, due to the higher level of activity, mainly in the packaging, automotive, agriculture, retail, and electronics sectors. Our sales volume in the Bra- zilian market totaled 3.5 million tons, 4% more than in 2016. We highlight the sales of PE in Brazil, which increased by 5%, the Company’s record. Resins exports totaled 1.5 million tons, 11% below 2016, due to prioritizing the Brazilian mar- ket, given the higher demand. From a strategic standpoint, the year was marked by completion of the raw material flexibility project that al- MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 27 > CHEMICALS lows flexibility for the production of up to 15% Focused on adopting a language more consis- of ethylene using ethane as raw material at tent with its market, our Basic Petrochemicals the petrochemical plant in Bahia. Imported Segment had its name changed to Chemicals. Ethane arrived at the Company’s furnaces at the end of November, with Braskem’s first flex operation in Camaçari. The total annual production capacity of Eth- ylene of the industrial units is 3.952 million tons. Of the total ethylene produced by the Chemi- Our focus at the Brazilian units remained cals units, approximately 80% is transferred for Strategic management for the environment At the beginning of 2017, Braskem acquired on operational and commercial efficiency, on consumption in the Company’s Polyolefins and 63.7% of Cetrel, a strategic environmental serving the Brazilian market, on ensuring ex- Vinyls units. The segment’s annual production management company for the operation of ports of the volume not sold in this market, capacity of Propene totals 1.585 million tons, of the Camaçari Petrochemical Complex in Bahia. especially for Mercosur, and on finalizing the which 65%, on average, is transferred for con- With a relevant role in managing our environ- investment to provide greater flexibility to the sumption in the Company’s Polyolefins seg- mental processes in the region, the Compa- operation of the cat cracker in Bahia. ment. The unit’s main products, Ethylene, Pro- ny treats and disposes effluents and industrial pene, Cumene, Gasoline, Benzene, Toluene, and waste, conducts environmental monitoring Paraxylene accounted for nearly 80% of the net and supplies water for industrial use, meeting revenue for Chemicals in 2017. Our focus at the Brazilian units remained on operational and commercial efficiency not only Braskem’s needs but also the needs of nearly 100 clients at the industrial complex. The acquisition is intended to make our indus- trial operations even safer and more reliable, and is in line with our strategy of strengthen- ing the petrochemical operation. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSThe Chemicals segment owns and operates four petrochemical complexes ─ Camaçari (BA), Triunfo (RS), São Paulo (SP), and Rio de Janeiro (RJ), where olefins, aromatics, and utilities are produced. Financial Overview (BRL billion) 2017 (A) 2016 (B) VAR. (A) / (B) Net revenue COGS Gross profit Gross Margin SG&A Other Operating Revenue (Expenses) Ethane in production Our Chemicals Unit in Camaçari (Bahia) began the operations using imported to produce basic chemicals, which increases EBITDA EBITDA Margin our share of ethane-based production to 20% in Braskem’s Net Revenue (USD billion) raw material matrix in Brazil. BRL 380 million was invested in the technological adaptation of the unit, in the interconnec- tion pipeline, and in the adaptation of the logistics infrastruc- ture at the Aratu Port Terminal in Candeias, Bahia. EBITDA (USD billion) 25.179 25.063 (20.530) (20.248) 4.649 18% (773) (197) 4.809 19% 7.891 1.510 4.814 19% (680) (410) 4.910 20% 7.242 1.415 0% 1% -3% 0 p.p. 14% -52% -2% 1 p.p. 9% 7% < 28 > Alternative sources Our unit in Duque de Caxias, Rio de Janeiro (RJ), received its first ship- ment by sea from the United States, of 4,500 tons of ethane. The ship brought raw material from shale gas as part of the agreement with En- terprise Products, a North American company with which we entered into an agreement to supply ethane. The project is part of Braskem’s strategy to make its petrochemical production more flexible with alternative sources of raw materials. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 29 > POLYOLEFINS The Polyolefins segment consists of 18 Polyethylene São Paulo, Cubatão and Paulínia, with total production (PE) and Polypropylene (PP) plants in Brazil, includ- capacity of 3.055 million tons of PE, of which 200,000 ing the production of Green Polyethylene made from tons are of green PE, and 1.85 million tons are of PP. As renewable raw material. The industrial operations in- of the first quarter of 2017, the UTEC business that un- clude PE and PP plants located in the petrochemical til then was part of the Polyolefins segment, became complexes in Triunfo, Camaçari, Rio de Janeiro, Greater part of the United States and Europe segment. The segment consists of 18 Polyethylene (PE) and Polypropylene (PP) plants in Brazil, including the production of Green Polyethylene Financial Overview (BRL billion) 2017 (A) 2016 (B) VAR. (A) / (B) Net revenue COGS Gross profit Gross Margin SG&A Other Operating Revenue (Expenses) EBITDA EBITDA Margin Net Revenue (USD billion) EBITDA (USD billion) 19.650 20.307 (15.572) (15.981) 4.079 21% 4.326 21% (1.322) (1.285) (178) 3.001 15% 6.157 943 (199) 3.291 16% 5.850 935 -3% -3% -6% - 1 p.p. 3% -11% -9% - 1 p.p. 5% 1% MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 30 > VINYLS The Vinyls segment consists of the industrial Petrochemical Complex, and two chlorine soda and commercial operations of the PVC, chlo- plants, also located in the Camaçari and Alagoas rine, and caustic soda units, as well as other Petrochemical Complex. The Company’s annual products such as hydrogen and sodium hypo- production capacity of PVC is 710,000 tons and chlorite. The industrial operations involve three the annual production capacity of caustic soda PVC plants located in the Camaçari and Alagoas is 539,000 tons. Financial Overview (BRL billion) 2017 (A) 2016 (B) VAR. (A) / (B) Net revenue COGS Gross profit Gross Margin SG&A Other Operating Revenue (Expenses) EBITDA EBITDA Margin Net Revenue (USD billion) EBITDA (USD billion) 3.067 3.016 (2.606) (2.815) 461 15% (163) (163) 454 15% 962 143 201 7% (237) (72) 241 8% 870 69 2% -7% 129% 8 p.p. -31% 127% 88% 7 p.p. 11% 108% MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 31 > Financial Overview (USD billion) 2017 (A) 2016 (B) VAR. (A) / (B) UNITED STATES AND EUROPE The average price of propene in the American Gulf (USG) was USD 986/t, up 30% from the previous year, as a result of the increase in exports and the lower in- ventory levels of this product. In this scenario, the PP spread in the United States was USD 585/t, 17% lower than in 2016. Despite this scenario, our operations in the United States and Europe yielded significant results in 2017, with an EBITDA of USD 647 million (BRL 2.063 billion), 7% lower than the EBITDA recorded in the previous year. This result was mainly achieved by the Compa- ny’s strategy to ensure operational and commercial Net revenue COGS Gross profit Gross Margin efficiency, recording a 97% utilization rate of the units SG&A and taking advantage of market opportunities given the strong demand for PP in these markets. The utilization rate was 97%, which was 3 p.p. be- low 2016 due to a revised production capacity. Even so, production in the United States and Europe was 5% higher, the Company’s historical record. There Other Operating Revenue (Expenses) EBITDA EBITDA Margin were also record sales, with 5% growth, mainly due to Net Revenue (USD billion) the increase in capacity in United States plants in late 2016, Germany in early 2017, and strong demand for PP EBITDA (USD billion) in these regions. 3.087 (2.324) 763 25% (183) (7) 647 21% 9.854 2.063 2.548 (1.750) 798 31% (145) (21) 698 27% 8.896 2.474 21% 33% - 4% - 6 p.p. 26% - 68% - 7% - 6 p.p. 11% -17% MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 32 > Solidarity in times of crisis In August 2017, tropical storm Harvey made land- In January 2017, we began operating our new WP was developed and produced using the Growth with focus on Clients Ultra High Molecular Weight Polyethylene Company’s proprietary technologies. This poly- In June 2017, our Board of Directors approved the investment fall in Texas, causing major flooding and power (UHMWP) plant in La Porte, Texas. In addition to mer has excellent mechanical properties, such of as much as USD 675 million for the construction of a new outages in areas near the Braskem plant in the strengthening our position as one of the world’s as high abrasion resistance, impact resistance, Polypropylene (PP) production facility in the city of La Porte, city of La Porte. The first category 4 hurricane to largest UHMWP producers, the new plant rep- and low friction coefficient. It is eight times Texas. This investment will further strengthen our leadership in hit the state in 56 years, the event shut down two resents another milestone in Braskem’s growth lighter than steel and ten times more durable the production of this thermoplastic resin in the United States, of our five PP plants for lack of power, left service strategy in North America, enabling us to serve than High Density Polyethylene (HDPE), and where the company already owns five other PP industrial units. providers and logistics unable to perform their clients in North America and Europe with even is indicated for applications in the automotive As part of our internationalization strategy, the new plant will duties, and prevented dozens of Members’ fami- greater efficiency. and transportation, electronics, fiber and tex- contribute to meeting the growing demand of our Clients. The lies from returning to their homes. Marketed under the UTEC brand, the UHM- tile, and industrial sectors, among others. new Braskem plant will have a production capacity of 450,000 To learn more, visit www.braskem.com/utec. This unexpected event ─ as the hurricane was not expected to hit the region with so much force ─ led us to take emergency measures in order to assist the teams and their families and preserve the integrity of the plants. As a result, we kept a boat in operation in order to help rescue people who were trapped in their homes, assisted with hotel reservations for those who could not return to their homes, and provided power generators, water, and food to ensure the well-being of peo- ple. This was crisis management organized by the Members themselves, who decided to assist in critical activities to endure that moment. tons of polypropylene per year and will occupy part of the com- pany’s 800,000 sqm complex in the region. In this way, the new plant will use the existing support infrastructure, benefiting from the connection to receive raw material, the railroad network, the central control room, testing facilities, and others. The project should positively impact economic activity in the region, employing nearly 1,000 people during the development and construction phases, and creating another 50 job openings when the plant begins operating. The project is expected to be completed in the first quarter of 2020. To learn more, visit www.braskem.com.br/usa/delta MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 33 > MEXICO The year 2017 marked the first calendar year of complete operation of the Braskem Idesa Indus- trial Complex in Mexico, a period already highlight- ed by production and operational stability. From a commercial standpoint, there was very significant progress penetrating Mexico’s domestic market, with significant levels of market share. In exports, the major focus was on more strategic markets with better margins in the United States and Europe. In the year, the EBITDA recorded by the Mexi- can unit totaled USD 623 million, recording an 88% average operating rate for the PE plants. Our focus was on the production stability of the Petrochem- ical Complex, on the increase in sales in the Mexi- can market, consolidating the relationship with local clients, and on exports with synergy with Braskem’s operations in other regions. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 34 > Financial Overview (BRL billion) 2017 (A) 2016 (B) VAR. (A) / (B) Net revenue COGS 1.128 474 (657) (344) The operation of Braskem Idesa has been changing the Mexican market for thermoplastic resins. Since a significant portion of the Mexican market is supplied from abroad, Braskem Idesa has already sold 65% of its production to the domestic market, helping the country reduce its dependence from abroad. Given the greater product availability, total sales volume of PE was 124% higher than 2016. Exports, in turn, were 81% higher, with an increase in the share of more profitable markets such as Europe and the United States, due to the increased product portfolio and greater coordina- tion with US and European sales teams. Among the key points for our success in this first year Gross profit is the entire knowledge transfer process from Braskem Brazil to Mexico, carried out by a team focused on the Gross Margin project during the first months of operation. This was a decisive factor toward qualifying the local workforce, SG&A both for operations and maintenance. With this re- sult, we have already initiated the process to downsize the Brazilian team, which, of the 100 people in the first month of operation now has approximately 30. It is ex- Other Operating Revenue (Expenses) EBITDA pected that, in 2018, this number will drop to 14 Brazil- EBITDA Margin ians, out of a total of 790 local Members. 472 42% (90) 9 623 55% 131 28% (68) 0 163 Net Revenue (USD billion) 3.601 1.587 EBITDA (USD billion) 1.987 530 127% 275% 34% 21 p.p. 138% 91% 261% 14 p.p. 31% 11.948% 282% MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 35 > INNOVATION ALIGNMENT AND GLOBAL IDEAS Braskem was born with innovation as a part of its business strategy. For our Members, thinking beyond the basics and focusing on developing unique products and solutions for the market is now a transformation tool that helps the world ─ and the Company – evolve. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 36 > X-RAY OF INNOVATION In addition to strengthening existing bu- siness, today, innovation plays a key role in our current flow towards creating new chnology (MIT), through the Industrial Liaison Program6, and the opportunity to expand knowledge in advanced metabolic products, new solutions, and building the engineering processes, with a new team chemicals of the future, effectively su- pporting the sustainable development of structured in the United States, where research in this field is more advanced7. business, society, and the environment. In addition, in order to strengthen the As a global player in the sector and alignment between researchers and te- continuing the process to globalize the chnology engineers at all our units in the Company, in January 2017 the innovation world, every two years we hold a conferen- areas in Brazil and the United States mer- ce to share experiences, stimulate the ge- ged to form a single international team fo- neration of ideas, and more thoroughly le- cused on developing projects aligned with arn about ongoing projects and research. In Braskem’s growth strategy. The initiative 2017, the third edition was attended by 240 intensified the exchange of information people, and 120 studies were presented, in and experiences among countries, crea- addition to two international speakers. ting a synergy process that will be the ba- ckbone of the Company's internationali- zation strategy in the Americas. This new dynamics of global operation in innovation allows Braskem to leverage the 6 MIT Industrial Liaison Program (ILP): http://ilp.mit.edu best from each region. One such example 7 Consists of manipulating the metabolism of orga- is the Company's relationship with leading nisms in order to optimize genetic and regulatory universities in the United States, among processes in cells to increase production of a given them the Massachusetts Institute of Te- substance. 296 Members 1 Technical Center in Coatzacoalcos (Mexico) 1 Technological Center in Wessling (Germany) 2 Technology and Innovation Centers, in Triunfo (Brazil) and Pittsburgh (United States) 7 Pilot Plants 1 Process Technology Development Center, in Mauá (Brazil) 1 Renewable Chemicals Research Center in the city of Campinas (Brazil) 12.6% of the sales generated by the Polyolefin Unit South America and Europe were based on products developed by the Innovation area. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 37 > In 2017... Innovative solutions 355 projects to develop new products and processes BRL 167.5 million invested 29 new patent requests and 83 extensions. Currently, the Company has 501 active documents, of which 199 patents were granted. 440 Clients received support from the Technology and Innovation Center in Brazil (over 23,000 analyses carried out) and 65 in the United States (about 17,000 analyses) TECHNOLOGICAL COOPERATION In December 2017, we began a partnership with Haldor Topsoe opment of this technology ─ carried out in partnership with – a Danish company and a global leader in catalysts and sci- the North American University of Clemson and the Federal ence of surfaces – in order to develop a pioneering solution University of Rio Grande do Sul (UFRGS) will help detect of monoeethylene glycol (MEG) from sugar, i.e. from renew- the change in the environment inside the packaging, a sign able sources of raw material. MEG is one of the components that the food may be deteriorating. The forecast is that in in the production of PET, an important resin in the textile and about three years this product will already be available on packaging sectors and widely used to produce bottles. The the shelves for consumers. project will focus on converting sugar into resin at a single industrial unit, significantly reducing the cost of production. The partnership includes the construction of a demonstra- HIGH PERFORMANCE Specially developed to produce high performance foams, tion unit in Denmark, scheduled to begin operations in 2019. Braskem Amppleo is a polypropylene resin with High Melt THE FUTURE WITH SMART PACKAGING How about having a package at home that shows you if Strength properties, able to withstand temperatures up to 100°C without deforming. In addition to being fully recy- clable, the product allows for the production of versatile a product is still good for consumption? It may also help foams with the possibility of developing applications for identify dates in very small font, which often blur over the automotive, industrial, civil construction, packaging, time. Braskem is already developing a solution in packages and appliances markets. Research to develop this resin that, through a change in color, shows the quality and the was conducted at the Braskem Innovation and Technology state of conservation of various products, from food to Center at the Triunfo Petrochemical Complex in Brazil and cosmetics. The product is still being tested, but the devel- the Pittsburgh Innovation Center in the United States. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 38 > RESISTANCE AND FLEXIBILITY Extending limits With strong mechanical strength, transparency, and productivity, our solu- Always focused on offering innovative solutions that are tions using polyethylene (PE) resins to produce shrinkfilm, of the Braskem aligned with Client needs, we constantly invest in moderniz- Proxess family are mainly utilized in the food and beverage markets to protect ing our laboratories and the Technology and Innovation Cen- cargo, to guarantee integrity and safety in transport, storage, and distribu- ter (CTI). In 2017, the Triunfo unit (Brazil) inaugurated a com- tion. Braskem FlexusCling, specially developed for the extrusion of stretch plete rotomolding laboratory, which will be used to develop film, stands out for its high load retention and excellent performance, even new solutions, perform productivity analyses, technical com- at low temperatures, as well as impact and puncture resistance. Today, the parisons between materials, and portfolio grades. The invest- market for shrink and stretch films is responsible for consuming between ment was BRL 1.7 million. 20 and 25% of the volume of polyethylene in the flexibles segment in Brazil. In addition, Triunfo's CTI advanced its research on materi- GLOSS AND FINISHING Focusing on the cosmetics, hygiene, and cleaning and food markets, rigid als for 3D printing, creating solutions, especially for the proj- ect developed in partnership with Made in Space, a leading North American company in 3D printer development for op- polyethylene from the Braskem Rigeo Lumios family provides increased erating in zero gravity, and NASA supplier. surface gloss, offering better package finishing. With intense and vibrant In 2016, we expanded our borders and took Green Plas- colors, the resin gives the product greater visibility on the shelves. tic I'm greenTM to the International Space Station (ISS). Now, SOLAR POWER The partnership with Ciel et Terre Brasil allowed for the expansion of the with the new solutions developed by Braskem, beginning 2018 the astronauts will be able to use a machine to recycle pack- aging and plastic objects, capable of further expanding the Hydrelio® technology for floating solar power generation. Solar panels autonomy and sustainability of future missions. on floats may be applied on a wide variety of water surfaces. Among the Part of the "Printing the Future" project will be the first com- benefits of its use are freeing up land, reducing costs of connection to mercial plastic recycling operation in the history of space mis- the network by using existing electrical infrastructures, increasing solar sions. The machine consists of a plastic grinding and extrusion productivity due to the natural cooling of the system by the water sur- system, producing a filament suitable for the 3D printer, which face, simpler and less expensive maintenance, and others. may be used again to print tools and other plastic materials. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSEntrepreneurship platform More sustainable cycles Braskem Labs is an entrepreneurial platform with programs focused on accelerat- Evaluating the life cycle of a product has become an increasingly essential ing innovative and sustainable business and on meeting the challenges of society tool for monitoring and reducing the environmental impacts caused by our and of our businesses. LEARN MORE Braskem Labs Scale: acceleration program carried out in partnership with ACE, which, since 2015, has accelerated over 40 companies. It seeks more business. This assessment includes Braskem's entire value chain – from ex- tracting the raw material to disposing of the product – and evaluates all the benefits that our solutions may bring to developing a strategy – and world – that is increasingly sustainable. Since 2005, we have used the methodology known as Life Cycle Assess- mature entrepreneurs, whose solutions are innovative, contain plastic or ment (LCA), which now has over 57 studies completed and seven ongoing. chemicals, and have social and environmental impact. Of the 10 companies Recently, the process began to be tested in industrial areas, to better sup- selected in the 2017 edition, 60% received investment or are in advanced port decision-making in various actions, and in our Client chain, and the conversations. As a way to contribute to the advancement of the Sustain- discussion about raw material composition and product evaluation in the able Development Goals, as of 2018 all projects selected should make clear Procurement area. how they will cause positive impacts in the SDGs aligned with its proposal. In order to reinforce the importance of the LCA process, Braskem is part of the Brazilian Entrepreneurial Network for Life Cycle Assessment, a joint Braskem LabsChallenge: Braskem LabsChallenge: Braskem's challenge pro- gram, through which the company's areas may launch challenges for the start- initiative of companies and institutions that in 2017 became a Civil Society Organization of Public Interest (OSCIP), which includes the participation of up ecosystem. Those selected will be able to run a pilot project in Braskem’s over 40 companies from various sectors, such as Boticário, Natura, Duratex, industrial units or administrative areas. With challenges from the Logistics and Basf, ArcellorMittal, and others. Through this initiative, we seek to mobilize Services to Personnel areas, the first round included 130 registered startups companies, coordinate governments, and educate consumers to incorpo- and presented 15 proposals for pilot projects to be implemented. The program rate the LCA as a tool to determine the sustainability of a product. is carried out in partnership with the innovation consulting firm Innoscience. Among the highlights of 2017 is a study proving that plastic is a viable Braskem Labs Ignition: acceleration for startups in the validation phase of their business model. being more practical, easier, safer, lighter, and more resistant, plastic buck- ets make it easier to reuse and recycle packaging, reduce packaging mass and sustainable alternative for the paint packaging market. In addition to by 20% (allowing for more efficient transportation), and decreases environ- To learn more about the Braskem Labs Platform, visit www.braskemlabs.com/labs/home-en mental impact by 30%. < 39 > In 2017 alone, Braskem completed 14 new LCA studies. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 40 > LESS POLLUTION Results showed that replacing 5% of the annual market of traditional paint containers with plastic buckets would reduce CO2 emissions by the equivalent of removing all cars from the city of São Paulo for one hour. Externalities Another intense project during the year was an external- ities study focused on packaging of perishable products. Today, packaging accounts for nearly 40% of the con- Yogurt: The use of plastic in packaging sumption of plastics and 80% is discarded after a single generates a benefit by preventing waste use. On the other hand, about 1.3 billion tons of food go four times greater than the cost of pro- to waste each year and packaging is fundamental to its ducing the plastic and its final disposal. protection. In seeking to balance the positive and negative Rice: uses only two grams for each pack- impacts of this chain, the British company Trucost carried aged kilo, 43 times more efficient than sell- out a study to calculate the total cost of packaging (nor- ing in bulk. mal costs plus negative externalities) and compare it with Meat: The use of plastic is 148 times more the benefit they bring by reducing food waste. Three type economical than if the product were sold of food normally packaged in plastic were evaluated: yo- without wrapping. gurt, rice, and meat. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 41 > GREEN FASHION AND 3D Plastic can also be seen as a trend in the fashion world. And that's what the part- nership between Braskem and the brand À La Garçonne showed in the last edition of São Paulo Fashion Week. Bracelets and buttons used in the collection were pro- duced through 3D printing using Green Plastic ─ a proposal aligned to the con- cepts of environmental preservation, re- cycling, upcycling, and reuse. Innovation in design, runways, and walkways The search for solutions goes beyond the traditional market. Another initiative of great importance to Braskem was We want to value plastic and make the benefits of plastic the renewal of the sponsorship of the Brazilian Paralym- more visible to different areas, always aligned with modern, pic Track Team for four more years. Through this initia- innovative, and sustainable solutions. With the program De- tive, we will assist in developing and technically preparing sign Challenges ─ already in its fifth edition ─ we have given participants for the upcoming national and international students of architecture and design a chance to show their competitions, such as the South American Games in Ar- creativity and talent. In 2017, groups from seven universities gentina in 2018, and the Parapan American Games and in São Paulo were invited to create a collection, all in plastic, the World Championship in 2019, as well as the Tokyo of floors, floating walls, and coatings. Paralympics in 2020). After two months of training and mentoring, the best Since 2015, we have supported the Brazilian team, an ac- collection of products was from the Mauá Institute of Tech- tion that is strongly aligned with our belief that chemicals nology, winner of the 5th edition with a concept inspired by and plastic improve people's lives. For the parathletes, this biomimicry, a contemporary architecture current that seeks improvement goes even further, since plastic has a practi- sustainable solutions in nature, allowing for more organic cal application in prostheses, making them lighter and more forms. The project will be analyzed and detailed for com- comfortable. The sponsorship will benefit 31 athletes and 12 mercialization by the company Atex, Braskem's client and guiding athletes on the Brazilian team, divided between the partner in this edition. main and juvenile teams in the track and field events. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSMESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 42 > STAKEHOLDERS INSPIRING RELATIONSHIPS Members, Communities, and Business Part- ners. Every day, the people who make up our main stakeholders are responsible for the development and sustainable growth that we are seeking for the future of Braskem. < 43 > Members 103-2, 103-3 We are a Company focused on the human being and promoting the development of our Members, constantly seeking innova- tion to better meet the needs of all our stakeholders. To this end, we believe in the potential of all our professionals, and we work so that everyone remains motivated to overcome market chal- lenges with courage, ethics, and daring. MODERN AND READY FOR THE FUTURE For many, the chemical industry is still something unknown Most beloved company We rank fifth among the 50 companies most beloved by its Mem- bers according to the Love Mondays ranking, a platform that receives spontaneous and anonymous evaluations from employees about professional satisfaction with organizations. and far from the actual needs of people in their everyday lives. impacts on the work environment and, with this, invite all our But we believe in our Belief and Purpose, that we are focused Members to express their expectations and what they val- on creating solutions that will improve people’s lives. So why ue in our Company for the future. We conducted interviews not start at home? with Leaders in all locations, analyzed the results of over 5,000 After facing a period of major internal and external chal- spontaneous responses by Members all over the world, and lenges in recent years, we began the year 2017 with a positive held focus group sessions with over 300 Members and mar- restlessness, and a search for more modern people manage- ket professionals in the countries where we are present. The ment models to strengthen the engagement of Members result was beginning to build our Value Proposition, repre- and attract new people to the future of Braskem. senting our commitment to people. With this proposition, we To this end, we developed our Employee Value Proposition would like to promote the satisfaction and pride of belonging (EVP), with the idea of understanding changes in society, its to all Members, who are at the heart of our growth strategy. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSYou are the protagonist Relationships based on trust and au- Challenge and be challenged We are inspired to question common Co-create your ideas Innovation comes to life when working tonomy are the key to transformation. opinion and challenge each other. So as a team. Do you have an idea? Share. < 44 > The freedom to be who you are In November 2017, as part of this major cul- tural and organizational transformation proj- ect, we launched for all Members an initia- tive that had a major impact on people’s daily lives: the free dress code. That is, profession- als no longer need to follow the dress code to which the corporate world is accustomed ─ with suits, ties, high heels, and, social attire- allowing our Members to dress in the way that Here you are encouraged to make a we are always evolving and learning. Connect. Make it happen suits them best. OUR VALUE PROPOSITION Consisting of seven pillars, the Value Proposition can be experienced every day through relationships between pe- ople, our purpose, career and develo- pment opportunities, recognition and rewards practices, and other initiatives, and will work as a guideline for evolving our practices and processes. difference, every day. Build Your Own Path We believe there are many paths Grow with us Here the growth opportunities are Feel proud of what you do Participate in sustainable solutions You’re free to be yourself At Braskem, diversity and respect are to success. And you will always be great. Be part of an ethical, transparent, that improve people’s lives. With an essential. Here you are valued for being encouraged to walk your own. and prosperous company that always innovative attitude, your work benefits who you are and the opportunities are seeks to go further. society and the planet. the same for everyone. No exceptions. In industrial areas, it is still mandatory to follow specific HSE guidelines regarding uni- forms and protective equipment. However, in the plant offices and administrative areas, Members, visitors and third parties may wear any type of clothing ─ always keeping in mind that it is still important for attire to be appro- priate to job commitments and to use com- mon sense. Although simple, this action was an im- portant step to valuing individual expression as part of our workday, with a lighter work en- vironment, open to diversity and individuality. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 45 > WHO WE ARE? TOTAL NUMBER OF MEMBERS (WORLDWIDE) 405-1 2015 2016 2017 MEMBERS BY EMPLOYMENT TYPE AND WORK REGIME (2017) 102-8 BRAZIL UNITED STATES GERMANY MEXICO INTERNATIONAL OFFICES TOTAL 6,239 6,005 6,010 Employment type Permanent 5,981 699 167 785 1,756 1,651 1,703 TOTAL 7,995 7.656 7,713 Temporary 15 0 6 0 Work regime Full time 5,991 696 163 785 Part time 5 3 10 0 60 0 60 0 7,692 21 7,695 18 MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 46 > RATIO OF SENIOR MANAGEMENT HIRED WITHIN THE LOCAL COMMUNITY 202-2 RATIO BETWEEN THE LOWEST SALARY COMPARED WITH THE LOCAL MINIMUM WAGE* 202-1 2015 2016 2017 2015 2016 2017 Brazil USA Germany Mexico International offices Grand Total 52% N/D 63% 21% 38% 49% 53% N/D 67% 26% 0% 49% 56% N/A 67% 29% 0% 51% * Members of senior management are Members from grades 3 to 10 that have direct reports (managers, directors, vice presidents, and president). To calculate the number of leaders from the local community (born in the same state where they work), we used the number of leaders in senior management positions versus the place of birth, with the exception of the United States, which does not have this information (for Alagoas Bahia Brazil Rio de Janeiro Rio Grande do Sul São Paulo United States Germany Mexico 1.5 1.6 2.2 1.8 1.7 2.9 2.0 3.6 1.5 1.6 2.2 1.8 1.8 3.1 2.0 3.5 1.5 1.6 2.1 1.8 1.7 3.1 2.0 3.6 legal reasons). This indicator is monitored for all countries where Braskem operates, those with industrial * The calculation method used considers the lowest salary paid by Braskem using the Hay table (a table of sala- units and those with only commercial offices. ries and wages established by Braskem) valid until December using 85% of the range in Brazil and Mexico (lowest percentage of the range that varies between 85 and 115) and 80% of the range in the United States and Germany (smallest percentage of the range that varies between 80 and 120) of the smallest wage compared with the local minimum-wage that is established through local bargaining agreements, for Brazil, and the local minimum wage for non-unionized Members. At all locations, Braskem offers Members salaries above the minimum wage in the region. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS < 47 > HISTORICAL RATE 401-1 In 2017, we recorded a historical rate with the Company’s lowest voluntary turnover in the last four years. An index monitored since 2009, the voluntary termination rate was 1.7% globally and 1.1% in DIVERSITY 405-1 Brazil. We believe that the good working environment contributed strongly to this positive result, For us, respecting diversity means respecting people as they reinforced by the actions built based on the result of the Environmental Survey carried out in 2016. are, valuing differences to create an environment of collab- In addition, in 2017, the number of people hired (535) surpassed that of people dismissed (429). And, oration, coexistence, and development. For this reason, the following the rate of the last two years, the turnover ratio of women hired was again higher than that Company has been working to become increasingly inclusive of men ─ 9.6% versus 6.2%. VOLUNTARY TERMINATION RATE 2015 2016 2017 2.0% 1.4% 1.5% 3.6% 3.6% 2.2% OVERALL 2.4% 1.9% 1.7% and welcoming, guaranteeing everyone equal opportunities through the Diversity & Inclusion program. In addition to the actions developed cross-sectionally, in other words, addressing the aspect of diversity as a whole, we have actions structured over five work fronts focused on the inclusion and empower- ment of historically minority groups. The fronts are: Gender Equity, Race and Ethnicity, LGBTQIA (Lesbian, Gay, Bisexual, Transgender, Queer, Intersex, and Asexual), People with Dis- abilities, and Social and economic (socially vulnerable people), each with its own specific strategy and objectives. We revised our recruitment and selection directive in order to align the criteria and guidelines with promoting diversity at Braskem MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 48 > Our actions are guided by the initiatives to which we are ing and engaging Leaders and Members in the topic. We con- signatories, and that offer guiding work principles. On the duct training in the areas of People & Organization, Commu- front concerning gender, we are guided by the Women’s Em- nication, Marketing, and Sustainable Development. The topic powerment Principles of UN Women and the Global Com- was also included in leadership development programs and in pact; in Race and Ethnicity, we follow the Pro-Equity Program the programs for interns and recently graduated. Annually, we of Gender and Race of the Brazilian Federal Government; and hold the Braskem Forum on Diversity and Inclusion, an action in LGBTQIA, we are guided by the principles of the Business conducted in all regions and, in 2017, we presented the topics and LGBT Rights Forum, an initiative to which we were the of unconscious bias and the importance of promoting empa- first large Brazilian company to become a signatory. thy. We have in place a structured communication campaign When we talk about cross-sectional actions on diversity, and a logo that represents all our action fronts through colors, we focus mainly on communication and on promoting train- also portraying our intention toward continuous inclusion. In order to make the program more democratic and explore its potential through collaboration, we created the Diversity and Inclusion Working Groups on three different fronts: Race and Ethnicity, Gender, and LGBTQIA. With a total of ninety members, the role of group is to support the development of actions in the Diversity & Inclusion program, and to act as multipliers MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 49 > GENDER EQUITY RACE AND ETHNICITY The gender equity front aims to promote equal oppor- The Race and Ethnicity front aims to guarantee a tunities and empowerment of women. Our main fo- racism-free work environment, encouraging the cus is to increase the number of women in leadership inclusion and empowerment of the black popula- positions, in industrial positions, and in innovation and tion. Among the initiatives are a partnership with technology. One of the concerns on this front is think- the consulting firm Empregue Afro, which offers ing about how the gender issue intersects with race, support in attracting black candidates to full-time sexual orientation, gender identity, and social vulner- positions and internship programs, with Zumbi dos ability. We have in place actions structured in four Palmares College. pillars of action: Women’s Career, Maternity and Pa- ternity, Health and Safety, and Communities and Pro- curement. In addition to the structural issues, three LGBTQIA The LGBTQIA front aims to make Braskem an in- versions of the Braskem Women’s Forum were held creasingly inclusive place where each person may throughout Brazil, addressing topics that contribute to be who they really are. The elimination of any form empowering women and breaking gender stereotypes, of homophobia and transphobia is a major concern. and we offered career workshops focused exclusively Therefore, we always make our position clear and on women. Also in 2017, in partnership with UN Women, the topic is addressed in all cross-sectional actions teacher training in the Board of Education in Camaçari (Bahia) on the course entitled “O valente não é vio- lento” (in loose translation: “Being brave doesn’t mean being violent”) was given to support eliminating vio- on diversity. At Braskem, we offer equal benefits and recognize all forms of family structure. We also par- ticipated in “Out and Equal” with the LGBTQIA work- ing group, and we were the first Brazilian company lence against women and girls in the region. signatory to the Business and LGBT Rights Forum. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS < 50 > STRATEGIC INDICATORS Monitoring indicators is one of the strategies of the Diversity & Inclusion program. Brasil 22% women, of which 25% are in leadership positions 29% are black Members, of which 13% are in leadership positions. DEVELOPMENT BASED ON CHALLENGES AND THE LEADER-SUBORDINATE RELATIONSHIP 404-3 We believe that the development of Throughout the cycle, the evolution Pact, Monitoring, Evaluation, and our Members is fundamental to the of results is monitored and, if necessary, Judgment), the performance man- Company’s growth and perpetuity. new directions are defined. The evalua- agement cycle identifies opportuni- Therefore, all professionals participate tion considers the Member’s contribu- ties for development to be included annually in a performance manage- tion to the organization in quantitative when planning the challenges for the ment cycle in which their performance terms (Agreed Upon Results - Calcu- following year or in the Plan for Educa- is evaluated and monitored based on lated Portion), and the alignment to the tion for Work, which includes actions the goals of the Program of Action Culture (Assigned Portion), evaluated supporting Continuing Education and (PA) agreed upon with their Leader. All through the Culture Competencies. recommendations for corporate pro- Members follow an individual program, Performance and development grams. In addition, in this process, the a requirement to receive their variable processes for Members are strongly Leader also assesses the Member’s compensation linked to the achieve- based on challenges and the relation- next steps in a clear, fair, impartial ment of goals and alignment with the ship between Leader and Subordinate. manner, aligned with the Company’s In Mexico, the United States, and Germany, Company’s Culture. Composed of four stages (Planning/ goals and culture. the Diversity & Inclusion program is in the early stages of development. To learn more about our diversity processes, visit www.braskem.com.br/diversity MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 51 > JOINT GROWTH 404-3 Training and developing our professionals is part of our strat- Among the main actions are the Operator Training Pro- egy. We believe in the potential of our Members, and seek gram, which was attended by 92 Members, the Technical to invest in planned growth with educational and leadership Skills Development Program, which involved 96 Maintenance preparation projects. In 2017 alone, over BRL 21.2 million was Team Members and 60 engineers, and the Educator Leaders invested in training 7,438 Members worldwide. Development Program trained 84 leaders in Brazil, 72 in the Developing and attracting people to support Braskem’s United States, and 57 other people through distance educa- planned growth is at the heart of the People & Organization tion on the Leaders’ Self-Development Platform and the LMS strategy. Throughout 2017, the Company continued to imple- Platform. In addition, 691 Leaders in Brazil, Mexico, USA, and ment several programs focused on integrating, developing, Europe were evaluated in the People and Succession Planning and training Members and in preparing and educating leaders process, which ensures succession planning for the Compa- through various development actions. ny’s strategic positions. STARTING A CAREER 401-1 Braskem was the winner of the Top Ser Humano ABRH RS (Top Human Being - ABRH RS) award, with the case “Change Management at the PE5-Slurry plant ─ improved work environment and productivity” in the Organization category, and was recognized in the United States (Philadelphia and Pittsburgh) as one of the “Top Workplaces to Work For.” Developing the potential of those who choose Braskem as the place to take their first steps in the job market is also part of our belief in the future and in our capacity for innovation. When beginning at Braskem, young adults have intense con- tact with the everyday life of a global company, and get in- volved in projects and initiatives that ensure their professional maturity. In addition, we have in place several internal training programs, as well as programs developed with entities such as SENAI (National Industrial Learning Service), technical ed- ucation schools, and universities. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 52 > • Young Partner Programs: over 13,000 enrolled and 205 opportunities offered to university students. Committed to • Operator Training: to support the renewal of our team of operators, in 2017 we opened 96 positions for trainees who, promoting diversity, the initiatives carried out in 2017 resulted for six months, experienced in practice what they learned at in an increase of 15 p.p. in the number of interns hired from educational institutions. Of these, 59 (61%) were employed January to March who declared themselves as blacks and as trainee operators. In addition, SENAI opened 11 classes of pardos, and in the gender front, 54% of interns hired were the Technical Course in Petrochemicals in the Brazilian states women. Regarding recent graduates, the program included where Braskem has industrial plants. The program content 31 former interns as junior analysts and/or junior engineers. was built in partnership with the institution and meets in- Participants had the opportunity to dialogue with more ex- dustry demands, and now includes the appropriate techni- perienced leaders and to expand their knowledge of the busi- cal training to prepare new chemical and petrochemical pro- ness through three modules that addressed: organization, cess operators. Today, we already have 346 students enrolled business tasks, and Client. in SENAI, whose completion of the training is scheduled for • Technical Internship: focused on training future mem- bers of the technical areas of Maintenance, HSE, and Labo- ratory, the program lasts one year and offers students from 2018/2019. New classes should be opened annually. • Associates (USA): the 2015 group was concluded, and six young adults presented their final projects to the leaders technical courses a rich practical experience in their work and were hired as Members. The group that began in 2016 area, as well as a development trail, which supports day-to- started the second period of the program, nine young adults day operations. In 2017, we opened 97 new positions for tech- presented the first version of the project carried out during nical internships at all Brazilian locations where Braskem has the program and two of them were hired as Members. The industrial operations: Mauá (SP), Paulínia (SP), Duque de Cax- 2017 class started with five young adults who completed their ias (RJ), Triunfo (RS), Maceió (AL), and Camaçari (BA). training on first Six Sigma. We were recognized by the publication Guia Você S/A among “The Best Companies to Start a Career” voted by an audience of young adults (born after 1991). MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 53 > COMPETITIVE STRATEGY Braskem has in place a Remuneration Policy with a competi- ry, benefits such as: Health and Dental Plans, Private Pension, tive strategy compared to the market, based on the premises Life Insurance, Maternity and Paternity Leave, Meal Voucher; of: transparency for Members, internal relativism, ensuring and others. 401-2 the balance between Members regarding job maturity, the size of the challenge of the action program, and individual skills, external relativism, comparing salary surveys and glob- For the Members of units in Brazil who intend to retire, we offer the option of participating in the Horizontes program, which, for one year, prepares and supports professionals al benchmarks, and individual growth aimed at obtaining and and their families for the post-career transition process. The surpassing agreed upon results. Horizontes program consists of an e-learning module and a The Remuneration Strategy is guaranteed by the dai- three-day classroom module, totaling 24 hours of training. It ly management of the Leader-Subordinate relationship, has two fundamental pillars: where Members are rewarded based on meritocracy and the • Reflection on life and career: awareness process for achievement of results agreed upon annually, the latter re- this new upcoming phase in life. garding the Profit Sharing Program ─ Short-Term Incentive ─ whose differential is in measuring each Member’s evaluation and the Company’s performance. • Knowledge management: to ensure the continuity of the Company’s business, through a structured knowledge transfer As a complement to the Fixed and Variable Remuneration process acquired by the member throughout his or her career Strategy, we offer, to all Members regardless of job catego- that is important for Braskem’s succession process. 404-2 MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 54 > TRADE UNION RELATIONS 102-41, 403-4 Braskem recognizes labor unions as entities that legally rep- ducted annually or on specific dates in each region where the resent the Members. Based on this premise, dialogue and un- Company is present. derstanding are the preferred way to solve possible labor and The area supports the Company’s leaders, training them in union conflicts. In this way, we seek to maintain an open and labor and social security matters, so that they may better man- constant dialogue with the various trade union representa- age their teams, minimizing and quickly solving possible conflicts. tives in the regions and countries where we operate. In other countries, freedom of expression, workers’ option In Brazil, in particular, the Labor and Trade Union Relations for union association, and above all, the establishment of bi- area is responsible for conducting negotiations on Collec- partite commissions and committees (of worker and compa- tive Bargaining Agreements and Conventions, which address ny representatives) are also respected for training and moni- economic, social, health, safety, and environmental issues toring, especially on issues related to health, the environment, and working conditions. This collective bargaining is con- and other topics of interest. Members covered by collective agreements BRAZIL UNITED STATES 5,928 60 Total number of Members 5,996 699 Percentage of Members covered by collective agreements 99% 9% GERMANY MEXICO INTERNATIONAL OFFICES TOTAL 0 173 0% 327 785 42% 0 60 0% 6,315 7,713 82% MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSCommunities 203-1, 103-2, 103-3 We believe it is our duty to contribute to the regions where we operate, respecting the environment and creating value and well-being for ev- eryone. In this way, we work guided by pillars that direct our actions and initiatives with the communities and other stakeholders: human devel- opment as well as social and environmental development. We understand our role in the world and, with our Members, we seek to make a difference. In 2017, we reformulated all social responsibility projects so that we could act more effectively in the communities. Each has been individually revised to further address the social needs of the regions surrounding our operations. HOW WE STRUCTURE OUR CAUSES The purspose of our work with the Communities is to improve people’s lives by creating sustainable solutions through chemicals and plastic. In this way, we defined four strategic objectives that guide our projects: gener- ate social impact, strengthen our reputation, get closer to our stakehold- ers, and increase the visibility and familiarity of our actions. In addition, we seek to link our projects with topics that are increasingly strategic for Braskem ─ recycling, encouraging innovation, and environmental educa- tion ─ reinforcing existing initiatives and establishing new partnerships in the regions where we operate. Culture Strategic Objectives Social Impact Visibility, Familiarity Reputation Relations POSITION STATEMENT ON SOCIAL RESPONSIBILITY Foster Human Development Stimulating the development of people in our communities Foster social and environmental development through chemicals and plastic Strengthening the social and environmental contributions of our main products Communities of interest Surrounding communities Chemicals and plastic chain Plastic and chemi- cals as a solution Sport, culture, professional and human education Consumption, post consumption Innovative solutions, great solutions < 55 > GLOBAL SCENARIO Brazil 34 projects BRL 18.2 million8 USA 36 projects BRL 887,000 México 4 projects BRL 759,0009 Alemanha 5 projects BRL 16,000 8, 9 Amount considers projects, sponsorships and donations. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSassessing, and approving pro- ponents and their respective projects, and included a phase after completion of the project for rendering of accounts and verification. During the year, GENERATING POSITIVE IMPACTS 413-1 Through our projects, we seek to generate positive social impact and strengthen the relationship with the communities surrounding our opera- tions. In 2017, we benefitted over 144,000 people in different areas of activ- ity, at all our locations10, emphasizing education, culture, and sports. Some of the main projects were: Global Volunteering Program We believe that corporate volunteering simultaneously contributes to the 100% of the donation process- development of individuals, business, and society. For this reason, one of es were evaluated according to the highlights of the year was the pilot project of the Global Volunteering the new guideline. The control Program, which surprised us with the participation of a significant num- tools are being implemented in ber of Members. With the theme “Serving together to improve people’s other countries, and should be lives,” over 359 Braskem professionals from Brazil, Mexico, and the United consolidated in 2018. This new States, and 497 guest volunteers (family and friends of Members) partici- guideline specifies the relevant pated in a collaborative competition with limited duration, collecting over aspects for the Company: eco- 18,000 items. nomic and social development, The Volunteering Program formed 74 teams in Brazil, USA, and Mexico. environment, ethics and tech- Each team chose an institution near the Braskem operations to carry out ADVANCING COMPLIANCE PRACTICES IN DONATIONS 203-1 In 2017, we took an important step nical, and commercial. Through volunteer work. The activities conducted by the volunteers were based on with the launch and implemen- the Guideline, we have clear di- Braskem’s 10 Macro Goals for Sustainable Development. At the end of the tation of the Sponsorships and rection – in a global manner ─ of Program, the top three teams in each country won recognition and organi- Donations Procedure and Guide- the path we want to follow in our zations received a donation of goods and products. line in Brazil. With it, we revised social and environmental re- the entire process for selecting, sponsibility practices. 10 100% of countries with significant operations (industrial units). < 56 > 74 teams formed 856 participants in Mexico, USA, and Brazil 4.7% of Members engaged 1,222 volunteer actions carried out in NGOs in the communities surrounding Braskem units (operational and offices) 4,550 hours worked 18,786 items collected 91% would participate again in 2018 MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 57 > to improve daily life in schools and their community and in schools, which vot- community, allowing them recognize ed on the best idea to represent it in a themselves as agents of change. panel held at Braskem, including com- The program’s methodology seeks munity leaders and educators. The project Mega Ação Solidária (Mega Solidarity Action), conceived by stu- With a total investment of BRL 550,000, this pilot project showed that it is possible to carry out a global social responsibility program that suits the needs of each region. RELATIONSHIP OF TRUST Transformar Agora In a partnership with NGO Atina, in 2017 we started the project called Transformar Agora Now) in State Public Schools Profes- (Transforming In Mexico, Braskem Idesa continu- sora Maria Josefina Kuhlmann Flaquer, to value the social context of the com- ously works on the relationship with Luís Washington Vita, and José Dan- munity and stimulate a protagonist the three communities (Pollo de Oro, iel da Silveira in the ABC Paulista re- role and empowerment of young peo- dents from the Luís Washington Vita Nahualapa, and Lazaro Cárdenas) gion (Brazil). The initiative stimulates ple, so that they feel capable of trans- school to collect clothes, food, and PLASTIANGUIS around its industrial operation. Eighty the search for activities that benefit forming their reality. The students in- other items for donation, was the big visits are conducted every month the school community, providing high volved were divided into groups and winner. But several other projects had In Mexico, we launched the “Plastian- with the purpose of disseminating school youth with the opportunity to participated in workshops to develop great success in schools and will con- guis” project, volunteer work carried out and integrating residents into social conceive projects that may be applied projects that may be applied in the tinue in 2018. by over 50 Members that promoted the programs such as Community Health collection of recyclable plastic waste in and Safety, Social Investment and the city of Nanchital in exchange for bas- Stakeholder Relations. kets of food staples. The six tons collect- This constant presence was instru- ed during the event were sent to a local mental to strengthen our relationship recycling cooperative. The initiative ─ car- with the Lazaro Cárdenas Communi- ried out in partnership with the Nation- ty in November 2017 during suspected al Association of the Chemical Industry air contamination. Government and (ANIQ) ─ mobilized the local community, industrial entities such as Civil Pro- which contributed to the environment tection and CLAM (Local Committee and provided items of the basket of food of Mutual Assistance) confirmed nor- staples in exchange for waste collected. mality of the operation. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSSer+realizador 301-3 In line with one of our most strategic topics, re- cycling, Ser+realizador is a project in place in all regions where we have operations in Brazil, and ny has been Braskem’s partner for several years in the Todos Somos Porto Alegre project, and will now manage Braskem’s five regions of operation. works together with waste sorting cooperatives. Throughout the year, 1,278 pickers and 35 The goal of the project is to promote social inclu- cooperatives benefited from technical advice, sion and the social and economic development training, equipment, and infrastructure. The de- of waste pickers and cooperatives, by promoting crease in numbers compared with the previous the development of the national recycling chain. year is due to a process to reposition the pro- In addition, the project’s mission is to foster re- gram, which now operates in regions surround- cycling of post-consumer waste in the country. In 2017, we hired the cooperative called Mãos Verdes as the national manager of the program, seeking to unify management and ensure better ing Braskem. With a smaller scope, we managed to work closer to each picker, resulting in a deep- er and more lasting process of change. In 2017, the total invested in the project was interaction with the public sector. The compa- BRL 1,966,508.50. Pickers benefitted Pickers trained Pickers with increased income 2015 3,538 1,117 960 2016 3,444 858 787 2017 1,278 326 531 GOAL 1,255 497 789 < 58 > There are environmental and social impacts associated with post-consumer plas- tic waste. In order to mitigate these impacts, Braskem has in place the ser+reali- zador project and the WeCycle platform that conduct preventive audits in 100% of recyclers and supplier waste sorting cooperatives, guaranteeing recycled plastic raw material with quality, traceability, process regularity, and socially and environ- mentally responsible operations throughout the recycling cycle. DECENT WORK AND POST-CONSUMER Edukatu Since 2013, Edukatu ─ a project developed through a partnership between Braskem and the Akatu Institute ─ has helped disseminate concepts about conscious con- sumption and sustainability to teachers and students of elementary education in Brazil. The online platform has already reached over 100,000 people over the last five years, and 20,148 children and teachers have followed the learning tracks. In 2017, Edukatu improved its performance through cooperation agreements signed with the Municipal Boards of Education, reaching over 80 schools in Greater São Paulo, and 2,538 people engaged in the learning tracks. In addition, the project website surpassed the 2.6 million view mark and was cited in nearly 700 media arti- cles. The investment for the year was BRL 230,000.00. 2015 2016 2017 GOAL Total number of participants 20,795 28,441 38,773 40,700 Volume sorted (t) 25,703 30,824 14,352 27,116 Total number of students engaged Total number of teachers engaged 669 6,558 1,605 11,172 2,586 17,562 1,980 14,600 MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS < 59 > Instituto Fábrica de Florestas (IFF) The IFF (Forestry Factory Institute) works toward the expansion, re- covery, maintenance of green areas, and integrated environmental education in the states of São Paulo, Rio de Janeiro, and Bahia (Brazil). The project was developed with the surrounding communities. Today, the organization empowers residents to collect seeds, produce and plant native seedlings and maintain planted areas. The IFF is main- tained by Braskem, Cetrel – Odebrecht Ambiental and the Industrial Development Committee of Camaçari (Cofic), in Bahia (Brazil). In 2017, investment in the program reached BRL 730,000.00. In- cluded in this amount is the donation of BRL 250,000 to the creation of an institutional documentary video of the project in webseries for- mat for the Internet and smartphone, maintenance of the website, and the creation and maintenance of pages on YouTube and Face- book. These communication materials aim to increase the dissemi- nation of Ecoparque Sauípe and attract new visitors. TRADITIONAL PEOPLES The participatory fishing monitoring program, which has been tested and implemented in the communities on the island of Ilha de Maré since 2015 by the Global Maré Institute, with the sup- port of Braskem, is an innovative fishery management tool that annually em- Monitoring also provides satisfac- powers 100 fishermen to live their tra- tory data for emancipatory environ- 2015 2016 2017 GOAL ditional way of life. This innovative tool mental education, where social players Seedlings produced 116,572 88,407 55,009 70,000 has made it possible to create collec- are responsible for identifying prob- tive spaces for discussion that protect lems and recommending possible solu- Seedlings planted 39,206 46,628 47,428 33,100 and improve local knowledge on fish- tions. From this, the work in schools is People trained 1,064 1,036 1,421 750 ing, and promote synergy among local strengthened with the itinerant Envi- residents who depend on the quality of ronmental Tent, sharing with children People impacted 16,739 27,506 22,883 15,000 artisanal fishing. This synergy resulted knowledge from the traditional popu- To learn more about our actions with Communities, visit www.braskem.com.br/communities in the creation of the Institute of Artis- lation of which they are part. In 2017, a anal Fishing, whose headquarters were total of 125 children were educated by inaugurated in April 2018. 6 trained local agents. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSSuppliers 103-2, 103-3, 308-1, 414-1 Our suppliers are an essential part of our production chain, and are key to maintaining our ability to create value. Thus, through a decentralized management structure with areas responsible for analyzing expenses, assessing the quality of products and services and compliance with the Code of Conduct, we closely follow the work developed with these partners, seeking attitudes in line with our ethical, social, and safety principles. In addition to following our Corporate Policy, the Third Par- ty Code of Conduct is inspired by widely accepted documents ranging from the UN Universal Declaration of Human Rights to the procedures recommended by the International Labor Organization (ILO) and the laws and regulations of countries where Braskem operates. We also believe that we actively participate in facing the challenges regarding the labor practices of our part- ners, influencing this aspects by requiring specific docu- mentation, signing the Code of Conduct (which includes aspects such as business integrity, human rights, and labor practices), in addition to completing an evaluation form on sustainability practices. < 60 > Prioritizing actions We evaluate practices that protect and promote Human Rights in our operations and in the operations of our Suppliers chain in accordance with the UN Guiding Principles on Businesses and Human Rights. As a result, we prepared our first potential Human Rights violations matrix in 2017, facilitating the immediate inclu- sion of this aspect in the corporate risk matrix that is monitored by our executives and/or our Board of Directors. This matrix guided us to prioritize our actions, ensuring the construction of assertive action plans capable of readjusting four elevated risks to become moderate risks in 18 months. One of the aspects covered this year was our work in the logistics chain to protect children and adolescents from sexual exploitation. www.braskem.com.br/ethics-line The Third Party Code of Conduct is available for download at www.braskem.com.br > Suppliers MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 61 > MAIN SUPPLIERS CATEGORIES Ethanol: this product, as well as its Suppliers, has one of the most rigorous management processes at Braskem in order to guaran- tee a resin with quality and social and environmental responsibility throughout its production cycle. That is why, in 2016, we launched our Responsible Ethanol Purchasing Program, which has two pil- lars: Compliance and Excellence. Its goal is to guarantee compli- ance with mandatory requirements and to improve the desired parameters: slash and burn, biodiversity, and best environmental, human rights, and labor practices. Fossil raw materials: strategic for Braskem, suppliers of fossil raw materials account for our largest share of expenditures. Among the products in this category are naphtha, condensate, ethane, propane, and LRH in Brazil, ethylene and propene in the United States and Germany, and ethane in Mexico. PERCENTAGE OF PURCHASES BY SUPPLIERS BY COUNTRY* 204-1 2015 2016 64% 36% 99% 1% 96% 4% - - 76% 24% 99% 1% 94% 6% 84% 16% 2017 71% 29% 93% 7% 97% 3% 75% 25% Brazil United States Germany Mexico Domestic Foreign Domestic Foreign Domestic Foreign Domestic Foreign * To calculate this indicator, we considered as “local” domestic suppliers, and locations with significant operations are the coun- tries that have industrial units. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSEthanol Supplier Management Ethanol Supplier Management has two pillars: Compliance and Excellence. The former establishes the mandatory re- quirements and the latter indicates the desired parameters for continuous improvement. In 2017, Braskem purchased 99.5% of ethanol produced by suppliers formally committed to these requirements and parameters, and only 0.5% SPOT suppliers. SPOT purchases are limited to 20% of the total % COMPLIANCE 95.60% 97% 98.40% Of cases of non-compliance, none violate human la- bor rights (such as slave or child labor, lack of employment agreement, working hours, etc.) or ownership rights (all have proven ownership or right to use the land, unchallenged by third parties). This demonstrates that the negative image of agricultural activity involving slave labor and social injustice is not a reality for our qualified partners. purchased annually, a practice adopted in order to train new 2015/16 2016/17 2017/18 suppliers. Beginning 2018, SPOT suppliers will sign the Third Party Code of Conduct. To ensure compliance, 100% of committed suppliers, and a sample from their sugarcane suppliers are audited by third parties every two years. In 2017, Control Union audited 88% of its supplier plants, which demonstrated the continuous annual evolution of their partners. PROCUREMENT 102-9 The Procurement area is responsible for hiring ser- vices (industrial and corporate), purchasing direct materials (inputs), and indirect materials (MRO) and equipment, with the main objective of providing resources ─ competitively ─ to industrial plants and administrative areas to ensure continuity of opera- tions and perpetuity of the business. The main goals of the area are related to financial gains from nego- tiation, Supplier delivery deadlines, efficiency, and compliance of procurement processes. < 62 > In 2017, the Procurement area took an effec- tive step towards globalizing its processes, with all Procurement teams from Mexico and the United States reporting to the department located in the office in São Paulo, Brazil. In this way, we gain in efficiency through a more strategic view of oper- ations and of the needs for inputs, materials, and equipment. In the same year, we also implement- ed a Global Procurement Policy that will help align processes and integration, bringing more synergy to our business. PERCENTAGE OF SUPPLIERS BY TYPE OF SERVICE Machinery, equipment, and facilities Technical and complementary services Inputs 45.11% 45.50% 9.39% MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 63 > RESPONSIBLE MANAGEMENT 103-2, 103-3, 308-1, 414-1 Sustainable Procurement To ensure an increasingly robust, responsible, and and Compliance. The non-conformities identified Braskem is in the pilot phase of implement- reliable Supplier management process, we have are handled through an action plan involving users, ing the Sustainable Procurement Tool, which in place tools such as Supplier Radar. In 2017, giv- Suppliers and the Procurement area. enables the company to incorporate sustain- en the economic scenario, the use of the tool was In 2017, the Procurement area also continued to ability criteria in the selection of Suppliers in reinforced, helping to identify, in advance, com- support the CDP Supply Chain program, which re- procurement processes. The tool allows for panies that are more exposed to labor, economic, quests our Suppliers to report their greenhouse gas a comparative analysis of suppliers’ matu- and Health, Safety, and Environment risks. An ac- emissions, as well as the risks and opportunities re- rity according to established criteria, which tion plan was established for Suppliers classified lated to this aspect and the strategy to ensure im- include environmental and human rights as critical and high risk, in order to act preventively proved management. In 2016, Braskem Idesa (Mex- issues on water consumption, generation Another project, completed in December 2017 and minimize possible impacts. The Supplier Radar ico) joined the program, expanding its participation and disposal of waste and effluents, health and in line with the area’s Sustainable Development is published quarterly, evaluating nearly 80 Suppli- in 2017. Today, we are seeking to engage our part- and safety at work and in our surroundings, planning, was the production chain focused on im- ers each cycle. ners in the topics of Climate and Water, structur- as well as Governance, Guarantee of Proper proving Suppliers, in partnership with Sebrae in Rio Another tool is the Supplier evaluation process. ing a more thorough critical analysis of their perfor- Working Conditions, and other topics. de Janeiro. Fifteen micro- to medium-sized com- This evaluation generates the Supplier Performance mance. In the year 2017, we were recognized twice: Index (IDF), applied to all companies considered on the “A List” of the CDP Supply Chain Climate, and critical after evaluating the Sustainability criteria. when we ranked 29th among the companies with The index includes criteria for Quality, QM (histo- the best supplier engagement strategy in the world, ry of non-conformities), Punctuality, HSE, Finance, out of the 3,300 evaluated by the CDP. For more information, go to www.cdp.net, in Search Responses. panies were selected. Eight of them completed the entire process, and received specialist training in the Business Management, Finance, Quality, Doc- umentation, and Corporate Strategies modules. At the end of the project, with over 700 hours dedi- cated to training, there was evolution in the man- agement indicators of their business. In this way, Braskem contributes to increasing the universe of suppliers in the communities in which it operates. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 64 > LOGISTICS Working together with the Health, Safety and Envi- ued the structured program to study risks involving ronment (HSE) team, our Logistics area seeks to en- six new products whose operations are classified sure compliance with all social and environmental re- as medium risk, based on volume transported and ternational standards such as the CDI-t12 (Chemical Distribution Institute)13 to identify risks and estab- lish preventive control barriers. At our own termi- ty standards based on the vetting criteria and rec- ommendations determined by the Oil Companies International Marine Forum (OCIMF). In 2017, we quirements critical to operations when contracting their level of hazard. All products of medium and nals, through responsible performance and risk conducted 650 vetting assessments for 355 trips, transport, terminals, and other logistics services. We high risk were evaluated, totaling over 23 products analysis in operations, we maintained the SEMPRE hauling 4.6MM tons of liquids and gases. follow the evaluation methods based on Braskem’s performance assessment system, vetting11, and ABIQUIM’s System for the Evaluation of Safety, and involving the analysis of over 597 routes, 23 Stage 3 certification, implementing the actions for carriers, six loading and unloading areas, the con- improvement identified with the goal of achieving 11 Formal and thorough examination (usually conducted by a specialist) prior figurations of highway equipment, and 12 ships that Stage 4 certification in 2018. to granting approval or release. Health, Environment, and Quality (SASSMAQ). haul these products. We also conduct HSE-specific All hiring of import, export, coastal shipping, and 12 https://www.cdit.nl/psp/cdit.home In 2017, Safety of Processes in Logistics contin- inspections at nine marine terminals based on in- inland shipping vessels follows international safe- 13 http:/cdi.org.uk/ MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 65 > We maintain partnerships with major risk pursuant to relevant programs that promote road managers in Brazil and we hire most of our road safety, among which the following stand out: freight of non-hazardous products (resins) with electronic trackers. For hazardous products, • Olho Vivo na Estrada: created by ABIQUIM in partnership with ABICLOR, the purpose of this pro- 100% of the freight must be tracked, work with gram is to prevent, through driver awareness, unsafe a fully-owned fleet and drivers with a direct em- ployment relationship with the carriers. Specifi- cally in the case of propylene, in addition to track- behavior when transporting hazardous products. Olho Vivo na Estrada is part of a risk management system and its goal is to fully eliminate road acci- ing 100% of the freight, telemetry is required on dents involving chemicals. board the vehicles. To ensure safety, we also hold periodic meetings • Transportadora da Vida: program of the Trade Union of Carrier and Logistics Companies with our service providers, ensuring that everyone (SETCERGS), which certifies cargo transport com- is up-to-date with our internal Health, Safety, and panies that carry out actions with a greater em- Environment processes, and conduct annual audits phasis on safety. at carrier headquarters, which include assessment and planning of the corrective actions required for • Na-Mão-Certa: program developed by OS- CIP Childhood Brazil, which works to influence the those with a below-expected result in the Suppli- agenda for protecting children and adolescents in er Performance Index (IDF). It is worth mentioning that we also have a contract with Suatrans14, a lead- er in response to chemical and environmental road emergencies in Brazil. the country, whether in partnership with compa- nies, civil society, or the government. The role of the organization is to ensure that aspects related to sexual abuse and exploitation guide public and It is important to point out that the areas respon- private policies, offering information, solutions, and sible for managing Braskem’s logistics activities work strategies for different sectors of society. 14 www.suatrans.com MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSBraskem continues with its efforts to find creative ways to reduce this indicator, such as the use of closed circuits for transporting resins, sharing vehi- cles with other shippers, as well as promoting more sustainable modes of transportation. Finally, we seek to prevent our businesses from being affected by Brazil’s infrastructure bottlenecks, so we have been working on developing logistics alternatives, such as coastal shipping15 and rail transportation ─ modes still underdeveloped in the country, especially when compared to Mexico and the United States. Today, the area works on different projects that are part of “Logistics 2020,” which range from au- tomating various processes, to increasing storage efficiency and optimizing the logistics network of the resins business and the “Athena,” which focuses on restructuring chemical and vinyl logistics pro- cesses, progressing with increased efficiency, new logistics models, optimizing and maximizing assets, automating the logistics chain, and more. 15 Navigation between ports in the same country or at small distances on coastal waters. < 66 > Third-Party Work Conditions Braskem renovated the work environments available for third-party activities in its units’ logistics areas. Among the improvements are a women’s locker room, renovated pantry, redefined layout with new furniture, air conditioning, and win- dow tints. Such improvements have provided more visual, acoustic, and ther- mal comfort, eliminating occupational hazards, and ensuring greater motivation, well-being, and productivity for 14 fixed contractors and about 50 temporary workers who circulate daily through these spaces. Decent and socially responsible work Braskem supports Childhood Brazil in fighting child sexual abuse and exploitation in logistics operations. In 2017, we were recognized for the second consecutive year by actions carried out in the Na Mão Certa Program, a Childhood Brazil initiative that, in partnership with Braskem, coordinated the joining of ABIQUIM. In addition, we raised awareness of 778 truck drivers, 25 carriers, and 18 factories, fulfilling our strategy of contributing to building a solidarity protection network on the roads. In 2018, we will include the ports in this goal. It is also important to improve the truck driver’s working conditions and the quality of the stopping and rest areas, as well as reduce waiting time. Thus, they avoid entering communities and finding themselves in situations involving prosti- tution and the use of alcohol. Thus, in 2017, we launched the portal for scheduling road shipments, we influenced the improvement of the infrastructure of a Logistics Hub and two warehouses, and approved 12% of the fuel stations inspected by the risk management company Buonny during the year. These advances also improved the logistics operations, as well as safety and comfort for truck drivers. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 67 > Clients Our Clients deserve the best we have to offer. With ences related to innovation, creativity, and knowledge, always competitiveness, the search for new business, and man- this in mind, we seek to build unique and effective associated with the versatility and transformation potential agement focused on business improvement, in 2017, the solutions together, to create value and foster the of plastic. In the three years of the program, over 1,000 people program worked in partnership with 55 Clients, on over 80 development of our entire chain. We work in an in- participated in training and market development initiatives, initiatives implemented throughout the year. tegrated manner, always seeking to combine our in- BRL 160 million was invested in the export incentive program, novation initiatives with the development of solu- and over eight million people were impacted by the actions tions in partnership with our Clients. In this way, all promoted by the advantages of plastic. Members are encouraged to perceive these needs and make correct and responsible decisions, creat- ing a dynamic and engaging environment that gives Maxio® Seal: this seal serves one of our main growth pil- lars ─ innovation. With it, we identify and develop resins everyone a sense of belonging and pride. that result in several gains for clients, such as lower en- Among our main initiatives are: ergy consumption, greater productivity in the production process, and reduced weight of the final product, signifi- GOLD CLASS PICPlast: a Braskem initiative in partnership with the Brazilian Plastic Industry Association (ABIPLAST). cantly reducing production costs and environmental im- We maintained our gold class assessment in supplying to pacts. In 2017, the highlight was PG480 resin, available to clients on the Ecovadis evaluation platform. Today, we are the raffia market. The resin was designed to be applied in among the 3% top performers on the platform in the chem- The Plastic Chain Incentive Plan (PICPlast) has three very high speed equipment, guaranteeing greater stability ical industry. The goal of the platform is to develop practices fronts: promoting the export of manufactured prod- during production and an increase in raffia manufacturing of corporate social responsibility through its influence in the ucts, fostering competitiveness and industry innova- capacity, with gains of up to 15% in productivity. global supply chains. tion, and promoting the advantages of plastic. In 2017, the total invested surpassed BRL 30 million. Among the actions conducted in the year, we highlight Plas- Visio Program: through this initiative, we encourage shar- ing of knowledge and experiences with our Clients and the tCoLab, an open and free maker space set up in the development of exclusive projects and solutions that meet city of São Paulo that for two weeks offered experi- specific demands. With advantages such as promoting To learn more about the platform, visit www.ecovadis.com/us/ MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS< 68 > CIRCULAR ECONOMY In order to reaffirm our commitment to developing sustainable solutions in the VALUING WASTE A partnership with the GPA Group enables the recycling of approximately 60 tons plastic chain, in 2017 we created the Wecycle Recycling & Platform area. With this, of plastic per year for the production of new packaging of Qualitá stain remover, an we want to strengthen our strategic position and leverage initiatives, businesses, exclusive brand marketed in Extra and Pão de Açúcar supermarket chains. This ini- and sustainable solutions related to the circular economy of plastic. tiative, which is part of the Wecycle platform, will use the materials discarded at the This new area, part of the Polyolefins Unit in South America and Europe, is res- stations installed at Pão de Açúcar stores, which are donated to partner coopera- ponsible for the development of products with post-consumer recycled content, tives. Once sorted, the plastic is sent to a recycler that makes the resin, composed process qualification, and technical reliability, focusing on creating value for pos- of 70% recycled material and 30% virgin polyethylene. The resin is then sold to a t-consumer waste and on the recycling chain, strengthening partnerships with company that processes plastic, which will produce the product packaging and fill clients, recyclers, and brand owners. approximately ten thousand units of product per month. FIRST ON THE MARKET In 2017, we launched the first polypropylene and polyethylene resins made from PLASTIC ON THE MOVE In a partnership with the Brazilian bicycle manufacturer Muzzicycles, we enabled the use of post-consumer Wecycle resin, from cooperatives supported by the Platform, in Muzzi bicycle frames, an innovative technology developed in Bra- recycled post-consumer waste content, with production volumes that can reach zil by Juan Muzzi, its owner. Currently, Muzzicycles has the capacity to produce 50 tons per month. WCL H 1003 BBM polypropylene is produced from the annual 132,000 bicycle frames a year, representing the recycling of 150 tons of plastic recycling of nearly 120,000 big bags and WCL L004 SCV polyethylene is produced waste, keeping this material from being disposed. Each frame contains about after the annual recycling of 2.4 million used and discarded bags in our Distribu- three pounds of plastic, 30% of which is recycled. Some of the advantages of tion Centers. WCL R703 PCW is produced from domestic post-consumer waste plastic frames are resistance and impact absorption ─ characteristics of polyeth- from blown polyethylene packages. ylene – and the lifetime warranty for use. MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITS Responsibility, integrity, and transpar- all our activities in this sector. In addition, BRL thousands ency in relationships are aspects that in 2017 we developed a new guideline with permeate activities and initiatives with clear rules and procedures for any type all our stakeholders. We seek to actively of relationship with the government that promote dialogue to defend the com- came into effect in early 2018. petitiveness of our production chain and overcome challenges related to industri- al policy and infrastructure still affecting Among the issues that are part of our discussion agenda is Reintegra, a gov- ernment program that aims to return the growth of Brazil. to certain segments of exporters a per- In the last two years, due to the im- centage of the taxes levied on the pro- provements in our governance and duction chain of goods sold abroad. In Total tax incentives/credits* - PRODESIN - ICMS - REINTEGRA Grants for investments, research, and development, and other relevant types of concessions** compliance processes, we have rein- 2017, this percentage went from 0.1% to FINEP forced several practices in our opera- 2%, and for the year 2018, the 2% rate FINEP Award ECAs (financial aid from credit and export agencies)*** tional model with trade associations and was maintained. the Government. Today we have even Tax incentives on ICMS (VAT) grant- clearer and more widespread rules for all ed by the State of Alagoas through the Members regarding controls and proto- Program of Integrated Development of cols that must be followed whenever we the State (Prodesin), with the purpose of deal with these stakeholders. promoting the implementation and ex- Through a tool on our intranet, all inter- pansion of industries in Alagoas, changed actions with public agents are mandatorily its rules in 2016. The recovery of the mar- reported, creating a record-base for email ket in 2017 allowed the incentive, which is exchanges, meetings, and participants ─ a considered as a reducer of taxes on sales, simple way to add more transparency to to be optimized. Government 103-2, 103-3 , 201-4 * Tax incentives/credits: restitution of federal taxes by the Reintegra program and ICMS tax incentives, granted by the Government of Alagoas, through the Integrated Development Program of the State of Alagoas – Prodesin. ** Grants for investments, research, and development: awards and financing by FINEP for innovation projects. *** Financial assistance from ECAs [and export and credit agencies]: risk insurance operation with Nippon Export and Investment Insurance (NEXI- Japanese agency) for investment in maintenance and in the butadiene project. < 69 > 2015 173.9 71.6 102.3 2016 87.5 78.8 8.7 - - - - - - - - 2017 274.4 95.7 178.7 427.7 - - 427.7 MESSAGE FROM THE BUSINESS LEADERBRASKEMBUSINESS PERFORMANCEHEALTH, SAFETY, AND ENVIRONMENTSUMMARY OF GRI CONTENT STANDARDSINNOVATIONGOVERNANCE AND COMPLIANCE STAKEHOLDERSCREDITSMESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 70 > HEALTH, SAFETY, AND ENVIRONMENT POSITIVE TRANSFORMATIONS We believe that our commitment to sustainable development is essential for growth and business sustainability. That’s why we are challenged every day to make our operations more efficient, with less and less impact on people and the environment. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 71 > We are a company that looks to the future and to resents a significant evolution compared with 2016, sible Action Program), and Management of Pro- the opportunities that may be created through in- when the result was 40%. cess Safety Barriers. The units were submitted to novation and work that is increasingly more geared All audits were performed in an integrated man- a safety culture evaluation to help them strength- toward human beings. For this reason, taking care ner, including requirements of the Management en the Preventive Culture established by Braskem. of the well-being of our Members, the communities System, Programa Atuação Responsável® (Respon- 103-2, 103-3, 413-2 around our plants, and the environment is our way of generating positive, concrete transformations. We are also always looking for innovative and cre- ative ideas that enable us to develop and deliver in- telligent, unique solutions ─ and improving the reliable performance of our plants becomes a key factor for operational continuity. And that is how we developed SEMPRE in 2013, our Integrated Health, Safety, and Environment System that helps us reinforce a risk prevention culture based on discipline and respect for established safety processes and procedures. The process takes into account the unit’s profile and its main risks when setting annual goals for pro- gression. In 2017, one hundred percent of planned audits were carried out. Following our evolution history, 83% of the industrial units reached Stage EVOLUTION IN THE IMPLEMENTATION OF SEMPRE I G N D R O C C A S T N A L P F O E G A T N E C R E P I N O T U L O V E F O E G A T S R E H T O T I 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Diagnostic Stage 1 – Construction of HSE bases Stage 2 – Prevention of personal losses Stage 3 – Prevention of large losses Stage 4 – Assured performance in HSE Stage 5 - High HSE performance 2013 2014 2015 2016 2017 4 in SEMPRE ─ Assured Performance HSE. This rep- Note: In 2018, the focus is on implementing the Intelius Integrated Management System. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 72 > GLOBAL, SIMPLIFIED, AND ALIGNED 103-2 Focused on globalization and the sustainabil- ity of our business performance, we integrate our internal standards, incorporating and improving the requirements of SEMPRE, of Quality, and Industrial Excellence into a single management system: Intelius. A management model composed of a set of guidelines and international best prac- tices, Intelius is clearly correlated with our strategy of sustainability and continuous improvement. A development of the current management system, it will act as a stan- dard documentation, quality, productivity, health, safety, and environment model for all Braskem’s production units worldwide. At the same time, it will be able to incorporate new elements according to the needs and characteristics of the business. Today, the Intelius HSE pillar has 53 man- datory global standards. In addition, its orga- nizational dynamics allows for the modular incorporation of future needs, and facili- tates the addition of new work topics when- ever necessary. Management System Like SEMPRE, the success of this initiative is directly associated with our operators. We be- lieve in shared responsibility, so all teams in our production unit receive constant training and clear information regarding the goals through daily meetings with management. In this way, everyone becomes a protagonist, developing solutions for process safety and managing our ecoindicators. HSE Quality Industrial Efficiency Space for new topics Continuous Improvement & Sharing of Best Practices Performance Monitoring Space for new topics Strengthening practices 103-3 For the 13th consecutive time, Braskem has been part of the ISE portfolio (B3 Corporate Sustainability Index), which recognizes Brazil’s best publicly traded companies in management of sustainable development. Our per- manence in the index reflects our commitment to best practices in HSE, Corporate Governance, Social Respon- sibility, Economic and Financial Management, and Envi- ronmental Preservation. The new ISE portfolio if formed by 38 shares from 34 companies representing 15 sectors and totaling BRL 1.31 trillion in market cap. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 73 > Investments and gains in environmental protection 103-2 Our business strategy involves continuous im- damages. These amounts vary according to the Type of expense (BRL millions) provement planning in all environmental protec- needs of the Company’s plants and units, ac- tion processes relating to risk of accidents involv- cording to maintenance schedules, recertifi- ing processes or products. These investments are cation, business strategy, and other reasons. In variable and happen according to the goals of the 2016, as a result of improved quality of the diag- period, migrating from one dimension to another noses leading to a longer period of planning of according to the main needs detected ─ maintain- remediation processes, we increased disburse- ing relative balance in order to generate positive ments to treat contaminated areas, causing the impacts in all HSE aspects. need to adjust the amounts provisioned. In 2017, In 2017, the amounts invested in these initia- after adjustments in budget, the amounts re- tives were reduced compared with 2016, main- turned to levels of operating costs for remedia- ly due to reduced provision for environmental tion of liabilities. Workplace safety Process safety Investments in HSE Health Environment Total Expenditure for treatment of effluents and waste Treatment of liquid effluents Waste Management Total 50.5 42.7 93.2 2015 65.6 13.0 4.7 31.1 114.4 103.9 2016 2017 51.4 25.9 2.8 23.8 51.1 55.3 7.5 87.6 3.9 13.1 112.1 52.6 57.2 106.4 109.8 Highlights in bioeconomics Once again we were highlighted by ranking 36th among the “50 Hottest Com- panies in the Advanced Bioeconomy 2017,” the largest news website on biofuels. The ranking is formed based on the evaluation from international experts in the sector, and on votes from subscribers. In 2017, for the first time, it was possible to vote through social networks. Type of expense (BRL millions) 2015 2016 2017 Emission management Environmental licenses Depreciation Provision for recovery of environmental damages (environmental liabilities) Other environmental management costs 8.1 1.1 46.0 65.8 66.6 7.9 1.0 46.0 182.6 59.7 8.8 1.0 46.0 102.5 48.9 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 74 > gains remained at the same levels as in 2016, but it is import- Health Occupational Health Our management model for Health, Safety, and Environment issues also involves monitoring savings and costs avoided through the improvement projects developed by the area. The avoided costs recorded are basically the processes that do not need to be paid, which varies a lot year after year. These ant to note that the reduction in gains observed from GHG initiatives occurred because most of the amounts are already included in energy efficiency projects and initiatives. It is should be noted that our energy consumption is pre- dominantly thermoelectric, so projects involving improve- ments in energy efficiency also positively impact reduction of emissions and avoided costs. In 2017, this avoided cost was 61% higher than in the same period in 2016. In total, this work resulted in gains of BRL 247.5 million16 in operations in Brazil, the United States, Germany, and now Mexico. 103-3 16 Avoided costs through management of health, safety, and environment. AVOIDED COSTS – MANAGEMENT OF HEALTH, SAFETY, AND ENVIRONMENT 103-3 Dimension (BRL millions) 2015 2016 2017 Safety Workplace safety Process Safety Waste Generation Water consumption Environment Effluent Generation 0.6 -27.0 19.0 13.5 7.2 6.2 -3.4 17.1 23.3 6.7 4.6 2.1 2.5 4.6 7.1 2.4 8.8 4.4 Energy consumption 116.8 134.9 217.7 GHG Emissions Common Impact Management 0.0 0.0 0.5 67.0 0.0 0.1 0.6 0.0 0.0 136.8 252.4 247.5 HSE TOTAL MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 75 > Occupational Health and Safety 103-2, 103-3, 403-217 In 2017, there was no record of any new cases or grievance the severity rate is significant and reflects the continued of occupational disease. As part of continuous improve- emphasis on operational discipline for high risk activities ment, Braskem continued strengthening its global align- or activities that are life critical. ment and standardized identification and evaluation of occupational illness. To reinforce prevention of new occurrences ─ especially NUMBER OF ACCIDENTS X 1MM/MHW serious accidents that may lead to death, which occurred in 2016 ─ we developed a new safety plan that was cascaded worldwide, after studies that searched for opportunities for improvement in all our processes of loading and un- loading products. In addition, we are conducting a global Accident frequency rate (SAF + CAF) Accident frequency rate (CAF) awareness campaign so that our Members are always alert Severity rate and focused, in order to avoid potential accidents. In 2017, the frequency of accidents with and without lost time (CAF + SAF), considering Members and Third Par- ties per million hours worked, showed an increase of 27% Number of fatal accidents 2013 2014 2015 2016 2017 1.04 0.39 64.7 0 0.97 0.14 0.68 0.26 0.8 0.24 1.02 0.33 12.53 43.32 164.17 24.44 0 0 1 0 compared with the previous year, mainly due to contrac- A highlight in 2017 was the prevention of incidents include the Intelius global management system ─ Braskem tor performance and routine tasks. The same happened during loading and unloading of hazardous materials, and Human Reliability. Intelius will establish a global plat- with the Frequency Rate of Accidents with Lost Time, con- based on the monitoring of performance in 2016 (fatali- form for Braskem’s governance and HSE requirements. sidering Members and Partners per million hours worked, ty) and critical analysis. A global standard was developed The human reliability processes were compared internally with a 36% increase. The Severity Rate of Accidents with for loading and unloading hazardous materials. In addition, and externally in 2017 as part of the development of the Lost Time dropped considerably (85%). The decrease in several strategic HSE initiatives were developed in 2017 to Company’s human reliability strategy. 17 Absenteeism rate: in 2017, the concept and calculation of this indicator were revised, and an interface was created to capture the indicator via Dashboard. In 2018, we will begin the capture, and the target will only be defined after the capture has evolved and the results have been analyzed. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 76 > Process Safety 413-2, 103-2, 103-3 TIER 1 - NUMBER OF ACCIDENTS 29 4 11 9 6 A result of our teams’ and leadership’s commitment, Seeking continuous improvement in pro- in 2017 we once again reduced the occurrence of cess safety, we set global and per unit goals for TIER 1 and TIER 2 events (including process acci- the accident rates classified in TIER 1 and TIER dents). This demonstrates a visible and continuous 2. The goals are monitored monthly and are re- evolution of our actions toward previous assess- defined each year according to Company and ments that involve management and mitigation of market performance. In 2017, the global goal 2013 2014 2015 2016 2017 TIER 1 - RATE OF ACCIDENTS (NUMBER OF ACCIDENTS X 1MM/MHW) potential risks and awareness of all concerning the for TIER 1 frequency rate was 0.17, and 0.12 in importance of safety procedures to ensure increas- 2018. The global TIER 2 goal was 0.80 in 2017, 0.70 ingly efficient processes. 1 2 3 Incident with loss of containment and release of product above cut-off point Incident with loss of containment, but with release of product below cut-off point Incident with small loss of containment or system failure that could potentially lead to a process accident and 0.70 in 2018. For per unit goals, each loca- tion adopts the same value as the TIER 1 global goal, and calculates its TIER 2 goal by conside- ring the global goal value and its history. In 2017, we recorded six TIER 1 events (three less than the previous year), with a rate of 0.14 per million hours worked (36% less than 2016) – a number compatible with the best benchmarks in process safety form companies in the American chemicals sec- tor (0.34 as the average benchmark of Ame- rican companies in 2016). 0.32 0.22 0.14 0.09 2013 2014 2015 2016 2017 TIER 1 - SEVERITY RATE 3.24 3.41 0.25 0.68 0.77 2013 2014 2015 2016 2017 TIER MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 77 > Tier 2 events also follow a downward trend, down from 37 records in 2016 to 31 in 2017. The accident rate per million hours worked dropped Risk Rating Always focused on the continuous improvement of our processes and the safe- from 0.90 to 0.74, down 18%. TIER 2 - NUMBER OF ACCIDENTS 91 49 40 37 31 2013 2014 2015 2016 2017 TIER 2 - RATE OF ACCIDENTS (NUMBER OF ACCIDENTS X 1MM/MHW) 2.20 1.13 1.17 0.90 0.74 2013 2014 2015 2016 2017 Regarding Tier 3 events, considered small events or incidents, there has been an increase in the number of occurrences in recent years. How- ever, this increase is a result of an improvement in the registration sys- tem, a stronger process safety culture, and the Members’ commitment to reporting any type of diversion that causes a loss of primary contain- ment, seeking to reduce the number of small events through the critical analysis of small occurrences. ty of our plants and Members, in 2017 we continued to advance our Risk Rating results at the audited units. Of the 14 plants that were audited by the insurance company in 2017, all increased their scores compared to those obtained in 2016. Today, all plants meet the international standard at the “Standard” level, with half of them at “Above Standard.” It is worth noting that Braskem does not have a goal for this indicator. PLANTS THAT HAVE ACHIEVED THE INTERNATIONAL STANDARDS “STANDARDS” AND “ABOVE STANDARD” - RISK RATING 18 16 10 12 13 15 14 14 2014 2015 2016 2017 Standard Above Standard New risk matrix Throughout the year 2016, the organization promoted a thorough review of its risk matrix, with global alignment in all its business units worldwide, and based on a global benchmark in risk acceptability criteria. The new matrix was put into practice in 2017. This was Braskem’s first truly global work, which required all units to review their greatest risks in a more rigid, structured manner, associated with the new global risk matrix, allowing for greater integration with prin- ciples of health, safety, and the environment. This new ma- trix is also accompanied by a new risk assessment manage- ment system, which continuously monitors whether all risks are being duly mitigated. Today, the matrix also reflects sev- eral intangible, reputational risks that may have an impact on Braskem’s image before its Clients ─ work that positions Braskem as a global benchmark in the industry. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 78 > Product Safety 103-2, 103-3, 416-1, 416-2, 417-1, 417-2 Product safety is very much in line with Braskem’s continu- Another important point in 2017 was the structuring of ous evolution. That is why in 2017 we conducted a new in- two new systems: an online platform allowing the visualiza- ternational benchmark process in order to further reinforce tion of raw materials in real time, and an emergency com- the structure of resources and systems in the area. As a re- munication channel associated with global exports. Based in sult, we have expanded our team’s dedication to issues such as regulation of application and the review of all new FISPQ18 (Emergency Forms) for the chemicals inventory that were the United States, this system stores all information about our products and works as a primary service for our clients around the world. It is worth mentioning that every year we readjusted in Brazil. The products that will be evaluated re- carry out audits related to product, information services, and garding impact on health and safety are defined periodical- labeling non-compliance at our plants around the world, and ly. In 2017, the focus was on inputs used in dyes, food, and in 2017, as in previous years, there were no cases reported. healthcare, and there were no cases of non-compliance with regulations that resulted in a fine or penalty. 18 In the United States, the Company uses the Material Safety Data Sheet (MSDS) and Safety Data Sheet (SDS), as required by the Occupational Safety and Health Administra- tion (OSHA) and the relevant EU directive (REACH). In 2017 we conducted a new international benchmark process in order to further reinforce the structure of resources in the enforcement and revision of regulations. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 79 > Water Efficiency 103-2, 103-3, 303-1, 303-3, 306-1 With the supply crises increasingly fre- quent in the country, water is becoming a scarce resource. So, responsible water use and conservation is also increasing. Since 2002, we have invested BRL 280 million in water efficiency projects and to treat effluents for reuse in our oper- ations. We are aware that industry con- sumes about 20% of the water used Twice on the A List For the first time, Braskem is listed on CDP WATER’s “A List,” which recognizes the best publicly traded companies in the world regarding management of the use of the natural resource water. We were the only Brazilian company to obtain the highest score in the Climate (for the second consecutive time) and Water (this for the first time) rankings, an achievement that po- sitions us among the 25 companies, in the universe of 2,452 companies evaluated worldwide, to the get the A score in both rankings, simultaneously. Today we are part of the select group of 1% of the companies in the world that joined the “A-List” of CDP Climate and CDP Water in 2017. in the world and, with this in mind, we operations of the Mexico Complex, with map the operations that are in areas target of 25% set for 2020 and, for the work continuously to improve our pro- a reuse system inherent to the original with potential risk of water shortage first time, we are part of CDP WATER’s “A cesses with innovation and the search project design. In 2017, a total of 17% of today and until the year 2040. With List,” which recognizes the best publicly for sustainable development. Among the water consumed at the Complex this, it is possible to plan how to best traded companies in the world regarding our various initiatives, we highlight the was reused water. address risks and opportunities iden- management of the use of the natural Aquapolo Project, at ABC Paulista. In Over the last two years, we have tified, invest in risk areas, and extend resource water. partnership with Sabesp, the project studied the risk of water scarcity at this benefit to our value chain (Cli- broadened Braskem’s water reuse index eight watersheds, four of which were ents and Suppliers) in the search for in the region to 97% of the total. An- completed in 2016, and the other four alternative supply sources. The per- other example of success is the start of in 2017. These studies allowed us to centage of water reuse exceeded the For more information, go to www.cdp.net, in Search Responses. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 80 > SMALLER LOSS, MORE WATER MOVEMENT In order to encourage concrete actions toward reducing waste in the distribution system, the “Smaller Loss, More Water” Movement structured two areas of work: public policies and engagement. Initiative of the Brazil Network of the UN Global Com- pact, led by Braskem and Sanasa (Water Supply and San- itation Company in Campinas), the movement is aligned with the Sustainable Development Goals (SDG 6 and 17), and seeks the commitment of public agents to improve the water management and the urban distribution sys- tem in the country. The loss of treated water during distribution reaches an average index of 38%. In 2017, we promoted development of the study car- ried out by Instituto Trata Brasil on “Water loss during distribution as an aggravating factor to the vulnerabili- ty of watersheds.” The study highlights that the level of physical water losses in distribution systems – today and in the future – represents a risk to water access for all users of the watersheds. Published in the same year, the study was disclosed in the industry federations FIEB, FIESP, and FIRJAN. CONSUMPTION In 2017, water consumption (3.98 m³/t) in- recycles and, consequently, the greater the creased by 1.4% over the previous period, but water consumption. Water recirculation in still 2.5% below the goal set for the year. This cooling processes concentrates substances increase was due to Braskem Idesa being during this cycle. The purer the water used, included in the Braskem ecoindicators, and the more cycles can be performed and the the quality of the water captured for use in less water replacement will be required. In that unit causes greater consumption. Wa- addition, several factors contributed to im- ter quality impacts the number of times it proving the Company’s performance in wa- may be recirculated in cooling processes. The ter consumption, such as adjustments and worse the quality, the lower the number of improvements in cooling tower cycles, im- plementation of measures to reduce con- sumption due to the water crisis, minimiza- tion of losses, and elimination of leaks. WATER CONSUMPTION – m3/t 4.30 4.14 4.16 4.05 3.93 -4% 3.98 ... 2002 2013 2014 2015 2016 2017 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 81 > REUSE Today, we have in place a series of projects and goals linked to reducing wa- ter consumption, and we constantly carry out evaluations to avoid any impacts from a possible water shortage. Among the main initiatives are improvement processes for the reuse of water from the production units, a percentage that has been growing over the last three years. In 2017, a total of 25.8% of all water consumed in our operations came from reuse processes, 15.4% of which result- ed from process improvement (investment) and 10.4% from original plant oper- ation (born with the plant design). WATER REUSE 29.5% 28.2% 25.1% 23.4% 25.8% 11.0% 11.0% 9.5% 8.3% 10.4% 18.5% 17.2% 15.6% 15.1% 15.4% 2013 2014 2015 2016 2017 Inherent Reuse** Process Improvements* *Reuse in Process Improvements is all that comes from modifications at current units, including or improving processes. ** Inherent reuse is everything that was born with the industrial unit and is part of the original plant process. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 82 > EFFLUENTS Our eco-efficiency in generating liquid effluents (1.06 m³/t) improved by 4.2% compared with 2016, and was 7.9% better than the goal for 2017, our best histor- ical result for the third consecutive year, demonstrating the effectiveness of the actions taken to improve the Company’s water efficiency. The greatest impacts on this result were the low rainfall rates in some regions, reduced blowdown19 due to improvements in cooling tower concentration cycles, and scheduled shut- downs for maintenance and cleaning. More innovation. Less waste. Since September 2017, our factories have been using new technology that allows us to reduce the consumption of water by thousands of liters per month. Installed in bathrooms, the Piipee is a device that saves up to 75% of water in toilets bowls. The device uses a biodegradable additive, 19 Blowdown is the water intentionally wasted to avoid the concentration of impurities during the continuous evaporation. removing odor and color from urine, avoiding the GENERATION OF LIQUID EFFLUENTS – m³/t 1.94 1.22 ... need to flush the toilet. It is estimated that, on average, 7 to 20 liters of drinking water are wasted down the drain when toilet is flushed. The innovation implemented by the Company significantly reduces this consump- tion. In 2016, the project was part of our entrepre- neur acceleration program – Braskem Labs Scale. Piipee – the company responsible for developing the solution – estimates that the technology has the potential to save over 60 million liters of water and over BRL 722,000 per year in all of Braskem’s 2002 2013 2014 2015 2016 2017 plants in Brazil. 1.281.151.111.06-45%Variation MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 83 > Energy Efficiency 103-2, 103-3 , 302-1, 302-3, 302-4 The same way that we seek to reduce our impacts on water In Brazil, the initiative that presented the most gains was consumption, we work every day in search for innovative and implemented in PE 4 (Rio Grande do Sul), which, with reduced sustainable solutions (from an environmental and economic decompositions in tubular technology high-pressure poly- standpoint) that help improve efficiency and reduce the en- ethylene plants, had a gain of BRL 68.8 million. And, through ergy consumption of our production units. In 2017, our energy furnace optimization, UNIB 2 (Rio Grande do Sul) reduced its consumption (10.56 GJ/t) increased 3.0% compared with 2016, energy consumption by 938,591 GJ. but was 2.4% better than the goal for 2017. The increase in the indicator was due to Braskem Idesa (Mexico) being included in our ecoindicators, and intensity of energy consumption at the new plant is higher than the Braskem average. Initiatives toward process improvement Economic gain (BRL millions) ENERGY CONSUMPTION – GJ/t Improvements in production processes (except furnaces) and sales of electricity (in millions of reais) Furnace optimization Variation -11% 11.90 ... 10.67 10.74 10.49 10.25 10.56 2002 2013 2014 2015 2016 2017 Reduction in steam consumption Boiler and turbine improvements TOTAL 104.3 71.2 35.3 9.6 220.4 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 84 > ENERGY MATRIX In recent years, we have seen an increase in the share of natu- in particular, we saw a decrease in the share of other external fuels ral gas in our energy matrix due to the start and stabilization of in the energy matrix, also influenced by the increase in consump- Braskem Idesa operations, a major consumer of this fuel. In 2017 tion of natural gas at Brazilian units due to market opportunities. PERCENTAGE OF CONSUMPTION BY TYPE OF ENERGY IN TERMS OF TOTAL CONSUMPTION Electrical Natural gas 2013 2014 2015 2016 2017 9.9% 10.2% 9.0% 9.0% 9.9% 8.9% 13.0% 16.0% 20.0% 22.4% Other external fuels (mainly oil and coal) 4.8% 5.2% 5.5% 6.0% 4.7% Residual internal fuels from the petrochemical process 76.3% 71.6% 68.8% 65.0% 62.9% The percentage of renewable energy consumption in Braskem’s energy matrix is strongly influenced by the operation of the Brazilian electricity system. The increasing operation of thermoelectric plants in Brazil has reduced this indicator. PERCENTAGE OF RENEWABLE ENERGY CONSUMPTION IN TERMS OF TOTAL ENERGY CONSUMPTION 2013 2014 2015 2016 2017 9.39% 7.17% 8.26% 7.44% 7.60% MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 85 > Waste Management 103-2, 103-3, 301-1, 301-2, 306-2 We believe that continuous invest- adjusted annually for a period of five 2017. This good result was due to plant Waste Allocations (t) 2013 2014 2015 2016 2017 ment in renewable raw materials and years. In 2017, the generation of solid, initiatives toward discovering new correct management of all waste liquid and sludge waste (2.13 kg/t) was ways to reuse waste, changes in treat- generated in our production process reduced by 1.4% compared with 2016, ment, and improvements in cleaning is essential to the maintenance and and was 4.5% better than the goal for and maintenance processes. Recycling 19,858 7,930 4,628 7,371 6,830 Recovery (including energy) 3,169 5,424 3,975 7,247 6,370 Sanitary/industrial landfill 11,152 21,493 2,804 9,146 8,980 On-site storage 187 748 1,859 1,303 455 sustainable development of our busi- ness. That’s why we maximize reuse at all of our industrial plants through a process known as chain return ─ the equivalent to internal recycling. For the future, we are investing in energy and chemical recycling. Some of the main non-renewable direct materials used by Braskem are naphtha, condensate, ethane, pro- pane, LRH, and sodium chloride. We also use ethanol made from sugarcane to produce ethylene from a renewable source, thereby reducing our demand for non-renewable resources. We have strict goals for total waste generation (hazardous and non-haz- WASTE GENERATION – kg/t 5.78 Variation -63% Incineration Reuse Composting 17,263 20,408 1,713 8,423 8,199 290 306 238 662 739 274 482 475 505 299 2.30 2.20 ... 2.16 2.13 2.01 Underground waste injection 8,568 7,960 0 1,931 1,756 Other* TOTAL 9,650 5,000 3,700 17,022 5,258 70,443 69,863 19,692 53,400 38,652 * Other: autoclave, vacuum thermal demercuration, co-processing of waste in clinker rotary kilns for cement manufacture, soil decon- tamination by thermal desorption ardous waste) that are defined and 2002 2013 2014 2015 2016 2017 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 86 > Climate Change 103-2, 103-3, 201-2, 305-1, 305-2, 305-3, 305-4, 305-5, 305-6, 305-7 Studies conducted by scientists at the Intergov- ernmental Panel on Climate Change (IPCC) show that a “carbon neutral” society will be needed as early as this century in order to keep climate change at acceptable levels. We believe that the companies play an essential role in mitigating and adapting to the effects of climate change. There- fore, being among the best of the world’s major chemical industries in terms of greenhouse gas (GHG) emission intensity and an important GHG emissions sequester due to the use of renewable raw materials are initiatives that are part of our macro goals for sustainable development. In 2017, the macro goal for climate change had already evolved 100% compared to the goal set for 2020. For the 7th consecutive year, Braskem’s most recently published GHG emissions inventory was awarded the Gold category in the Brazilian GHG Protocol Program. For the second consecutive time, we are part of CDP CLIMATE’s “A List”. For the sixth consecutive time, Braskem has been selected to be part of the Efficient Carbon Index (ICO2) portfolio of B3 (Brazil). In line with our strategy to contribute to strength- ening this agenda in the business network, since 2008 we have integrated the Brazilian Network Commit- tee of the Global Compact and, since 2013, the LEAD group of the Global Compact, in addition to being part of the Green Industry Platform initiatives of UNIDO, and Caring for Climate of the Global Com- pact. We also actively participated in the Companies for Climate initiative, a business platform created by the Getúlio Vargas Foundation (FGV) Center for Sustainability Studies and, in 2017, we began to coor- dinate the Technical Group on Energy and Climate of the Brazilian Network of the UN Global Compact. Also in 2017, we began three pilot studies with GVces, the first to construct our MACC (Margin- al Cost Reduction Curve), searching for low carbon investment options, the second in the adaptation plan, testing the methodology of climate risk man- agement during the partnership and engagement stages; and the third for economic valuation of eco- system services, focusing on water resources. For more information, go to www.cdp.net, in Search Responses. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 87 > CARBON PRICING To manage risk and identify opportu- the price of carbon due to the fulfillment ADAPTING TO CLIMATE CHANGE After identifying and prioritizing po- nities regarding carbon pricing, in 2016 of the objective, which is to stimulate tential climate opportunities and risks we implemented an internal valuation new projects with positive impacts, that in all operations in Brazil, an adap- system (shadow price method) that is is, reduced emissions. tation plan was created with actions part of our investment decision-mak- After standardizing the investment to mitigate or reduce all potential ing process. Used for the second year in process in global operations, the tool climate risks classified as “high.” For operations in Brazil, these criteria sup- was configured for use in all units in the international operations in the Unit- ported the 2018 investment portfolio countries where the Company oper- ed States, Germany, and Mexico, the decision. In the current effectiveness ates ─ today the focus is on preparing the main potential scenarios and impacts monitoring phase, the results were an- teams in Mexico, USA, and Germany to were validated, as were the respec- alyzed, making it possible to verify the begin using the methodology utilizing tive mitigation actions for the most adequacy of the initial value defined for the lessons learned in Brazil. relevant risks. There are currently 33 EVENT/CLIMATE IMPACT Intense rain and electrical discharges Water shortage Hurricanes and extratropical cyclones Impact on energy generation 22 14 33 12 32 11 8 5 UNDERSTAND IMPACT CALCULATE CARBON FOOTPRINT REDUCE EMISSIONS CREATE PLATFORM DETERMINE INTERNAL PRICE APPLY PRICE MONITOR PERFORMANCE in Brazil, the main ones related to wa- ter scarcity, floods, impact on energy generation, and hurricanes and ex- tratropical cyclones. Braskem monitors the imple- mentation of this plan by means of indicators using the Getúlio Vargas 8 14 16 6 Number of planned actions for risk mitigation Number of industrial units with high potential risk – year 2040 defined actions or actions in progress Flooding Others It is worth mentioning that Braskem also participates in Emission Trading Simu- ability Studies Center methodology method for developing partnerships lation (SCE) initiatives in Brazil and Mexico, a constructive experiment in the carbon as a benchmark. We are currently de- and engaging several public and pri- market for debate and generation of knowledge, expanding the contribution of com- veloping a pilot program with FGV fo- vate stakeholders involved in adapta- panies to proposals directed toward the government. cused on the implementation phase tion actions. Foundation (FGV-SP, Brazil) Sustain- of the plan, seeking to consolidate the MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 88 > Our corporate inventory of emissions takes into account all categories in Scopes 1, 2, and 3 in 100% of operations. GHG EMISSIONS INVENTORY Our corporate inventory of GHG emissions takes into account all categories in Scopes 1, 2, and 3 in 100% of operations. In 2017, we reduced our Scope 1+2 emission intensi- ty indicator. This reduction was mainly due to initiatives to mitigate emissions, among which energy reduction/recovery projects and operational optimization were high- lighted. This is the best Scope 1+2 emissions intensity indicator in the historic series, achieving in advance Braskem’s 2020 GHG emissions intensity goal. CARBON INTENSITY (SCOPE 1) – tCO2e/t Variation 2008/2017 -21% 0.659 0.578 0.564 0.540 0.585 0.519 ... 2008 2013 2014 2015 2016* 2017 *Mexico’s emissions are included in this amount. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 89 > With the start of the new plants in Mexico in 2016, the re- sults of Scope 1 and Scope 2 emissions for 2017 showed a re- duction after stabilization of the Mexican operations. Braskem is evaluating the change in the base year and its medium and long-term goals. Total emissions related to Scope 120 was 10,182,558 tCO2e. Scope 221 emissions were altered due to the approximately 11% increase in the average national CO2 grid emission factor in 2017, reaching 1,072,713 tCO2e. With its electricity suppliers, Braskem seeks statements of the purchase of renewable en- ergy in order to reduce Scope 2 emissions from part of the energy obtained by bilateral contracts. 20 Direct GHG emissions 21 Indirect emissions through the purchase of electricity CARBON INTENSITY (SCOPES 1 AND 2) – tCO2e/t Variation 2008/2017 -21% 0.721 0.630 0.630 0.604 0.641 0.573 GHG EMISSIONS (SCOPE 1 AND 2) - ktCO2e Variation 2016/2017 -4% GHG EMISSIONS (SCOPE 3) - tCO2e 959 874 1,088 1,077 1,038 1,073 Variation 2016/2017 12% 20,928 18,721 15,804 12,000 11,534 11,351 9 9 1 , 0 1 ... 3 4 7 9 , 4 8 3 9 , 0 4 1 , 9 7 2 7 0 1 , 3 8 1 , 0 1 ... 10000 8000 6000 4000 2000 0% 2008 2013 2014 2015 2016* 2017 *Mexico’s emissions are included in this amount. Scope 1 Scope 2 *Mexico’s emissions are included in this amount. ... Scope 322 emissions were impacted mainly by the broad- ening of the chemical inputs reported in Category 1 – Goods and Services purchased, and by the expansion of data report- ed on the transportation of finished product paid by Braskem. 2008 2013 2014 2015 2016* 2017 *Mexico’s emissions are included in this amount. 22 Other indirect GHG emissions Initiatives to reduce emissions We work steadily on the search for solutions to reduce the var- ious impacts that our oper- ations may cause. Regarding greenhouse gas emissions, the main initiatives in 2017 were related to the reduction and/ or recovery of energy and op- erational optimization (such as reducing loss, modifying op- erating conditions, and clean- ing equipment). In Duque de Caxias, we highlight the devel- increase the reliability of indus- trial plants, in order to reduce GHG emissions associated with production shutdowns. inventories on Read the Braskem the Public Registry database of the Brazilian GHG Protocol Program: registropublicodeemissoes.com.br (in Portuguese). 2008 2013 2014 2015 2016* 2017 opment of an action plan to MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 90 > CARBON CREDITS IN THE CORPORATE VEHICLE FLEET EMISSIONS IN LOGISTICS We have been conducting our GHG material acquisition, and others. exceeds 95% in volume of the fleet In 2016, the Logistics area of the emissions inventory in Scope 3 (indi- In 2017, we began participating in supply mix. Polyolefins Business Unit, along with rect emissions) since 2011. Over the an initiative to generate carbon cred- Braskem became eligible for the the Sustainable Development area, years, we have significantly evolved its by replacing gasoline with ethanol monitoring stage of this initiative created a tool enabling practical and actions to engage our chain and iden- in our fleet of corporate vehicles. This when it reached ethanol supply over rapid measurement of Greenhouse tify initiatives to reduce these emis- action, conducted by the Sustainable the required percentage (95%) in Oc- Gas Emissions in the logistics trans- sions with the support of areas such Development and Personnel Services tober. This achievement opens up the port of finished products. as Procurement, Logistics, Personnel team, guarantees the generation of prospect of getting our first carbon In 2017, Braskem continued to Services, Information Technology, raw carbon credits if the ethanol supply credits in history as early as 2018. monitor emissions from the logis- EVOLUTION OF THE ETHANOL SUPPLY INDICATOR IN THE FLEET 97.59% 96.75% 95.46% 100% 99% 98% 97% 96% 95% 94% 93% 92% 91% 90% 93.60% Set 17 Out 17 Nov 17 Dez 17 tics transport of finished products. For the year, we highlight the imple- mentation of a monthly monitoring system for Greenhouse Gas (GHG) Emission indicators, carried out by the Sustainable Development area, in addition to the inclusion of the calculation of the increase and re- duction of emissions in logistics ini- tiatives. From now on, with the his- torical results from 2016 and 2017, actions will be taken towards a criti- cal analysis and future identification of actions to reduce emissions. 95% Ethanol Goal MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 91 > SUPPLIER ENGAGEMENT IN CLIMATE CHANGE For six years, we have developed, with suppliers, volunteer en- gagement initiatives focused on sustainability. In addition to helping us understand the impacts of our chain, this work is a way to positively influence our stakeholders on issues such as climate and water management. To this end, we develop some initiatives annually with the support of the CDP Supply Chain program, such as aware- ness actions, incentive to developing and reporting emis- sions inventory, and identifying risks and opportunities. We then use the data reported by our Suppliers in order to eval- uate their evolution and improve the management involving one or both companies, improve our relationship with these Suppliers, and increase the network of companies involved in sustainable actions. As a result, in 2017, there was an increase in the number of Suppliers invited and engaged in the Climate and Water Supply programs. Due to the expansion of Braskem’s Scope 3 report, it is noted that despite the increase in the percentage of Suppliers engaged through the program, the percentage of Scope 3 coverage remained stable. SUPPLIER ENGAGEMENT - CLIMATE CHANGE 250 200 150 100 50 0 60% 57% 182 46% 42% 31 13 2012 0% 39 18 1% 2013 42 25 9% 2014 104 11% 2015 66% 208 138 36% 177 54% 37% 96 2016 2017 70% 60% 50% 40% 30% 20% 10% 0% For more information, go to www.cdp.net, in Search Responses. Number of Suppliers invited Number of Suppliers engaged % of Supplier adherence % coverage of Scope 3 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 92 > OTHER EMISSIONS 305-6, 305-7 EVOLUTION OF OZONE DEPLETING SUBSTANCES (ODS) EMISSIONS In addition to greenhouse gases, we also ODS* manage the emission of other types of substances associated with our produc- Tons of CFC-11 Equivalent tion, such as nitrogen oxides (NOx) and sul- * Not reported in the period. 2013 180.5 2014 48.6 2015 55.3 2016 2017 3.0 1.7 fur oxides (SOx), Volatile Organic Compou- nds (VOCs), and others. In general, in 2017 they remained at the same levels. Special highlight for reduced SOx emissions, mainly impacted by coal burning below plan in Rio Grande do Sul. NOX SOX EVOLUTION OF EMISSIONS OF SOX, NOX, AND OTHER SIGNIFICANT SUBSTANCES Emission * 2016 2014 2013 2015 12,157 11,421 9,546 9,651 6,582 11,509 4,503 3,137 1,670 2017 9,216 Volatile Organic Compounds 2,707 3,881 3,808 6,139 6,858** Particulate Matter Toxic Air Pollutants*** Other**** 1,547 1,225 911 549 97 652** 860 531 868 677 6,108 6,190 14,495** 4,145 4,746 * The methodologies used are recommended by state environmental agencies. Where there is no measurement, estimates (emission factors) based on rec- ognized methods, such as AP-42 from USEPA, are used. ** The plants have been broadening their assessments. This explains the increase in these parameters. *** Includes Toxic Air Pollutants and HAP **** Includes total hydrocarbons and carbon monoxide. Even with the start of operation of Braskem Idesa in Mexico, and with the respective increase in produc- tion, there is stability and even a downward trend in the emission of some pollutants. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 93 > SUMMARY OF GRI CONTENT STANDARDS MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 94 > Summary of GRI content standards 102-55 GRI Standard Disclosure Page and/or disclosure GENERAL DISCLOSURES 102-1 - Name of the organization 102-2 - Activities, brands, products and services 102-3 - Location of headquarters 102-4 - Location of operations 2 8 102 10 102-5 - Ownership and legal form GRI 102: general Disclosures 102-6 - Markets served 102-7 - Scale of the organization 102-8 - Information on employees and other workers 102-9 - Supply chain 102-10 - Significant changes to the organization and its supply chain Braskem was formed in August 2002 by the merge of six Odebrecht Group companies and the Mariani Group. We are a publicly traded corporation with several industrial units in Brazil, the United States, Germany, and Mexico (through a joint venture with Idesa). Visit www.braskem-ri.com.br/ ownership-structure for more details. 10 10 45 62 6 There was no significant change during the period covered by the report. Principles of the Global Compact GRI Standard Disclosure Page and/or disclosure 102-11 - Precautionary Principle or approach GRI 102: general Disclosures 102-12 - External initiatives 102-13 - Participation in associations 102-14 - Statement from senior decision-maker 102-16 - Values, principles, standards, and norms of behavior 102-17 - Mechanisms for advice and concerns about ethics 102-18 - Governance structure 102-23 - Chair of the highest governance body As a principle and in accordance with the Health, Safety, Environment, Quality, and Productivity Policy, Braskem does not produce, handle, use, market, transport, or dispose of any product if unable to do so safely, with a minimum impact on the environment. 12, 13 12 4 a 6 15 21 15 15 Principles of the Global Compact 10 10 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS GRI Standard Disclosure Page and/or disclosure Principles of the Global Compact GRI Standard Disclosure Page and/or disclosure < 95 > Principles of the Global Compact 102-40 - List of stakeholder groups Members (including Company leaders), Funders, Clients, Suppliers, Academia, Local Stakeholders (NGOs, Community, Trade Entities), Opinion Formers (Government, Press), and the General Public. Visit www. braskem.com.br/material-issues- assessement for more details. 102-41 - Collective bargaining agreements 54 3 102-42 - Identifying and selecting stakeholders GRI 102: general Disclosures 102-43 - Approach to stakeholder engagement 102-44 - Key topics and concerns raised 102-45 - Entities included in the consolidated financial statements The identification and selection of our stakeholders for engagement was based on groups that play a role of influencers, enablers, impacting, and benefited by the relationship with the Company. Visit www.braskem.com.br/material- issues-assessement for more details. We periodically evaluate our relevant aspects in order to support our strategy to contribute to sustainable development. The most recent evaluation occurred in 2013, and will be renewed in 2018. Visit www.braskem. com.br/material-issues-assessement to learn about our materiality matrix. www.braskem.com.br/ material-issues-assessement 25 102-46 - Defining report content and topic Boundaries 102-47 - List of material aspects 102-48 - Restatements of information 102-49 - Changes in reporting 102-50 - Reporting period 102-51 - Date of most recent report 102-52 - Reporting cycle 102-53 - Contact point for questions regarding the report 102-54 - Claims of reporting in accordance with the GRI Standards 102-55 - GRI content index 102-56 - External assurance GRI 102: Disclosures gerais www.braskem.com.br/ material-issues-assessement www.braskem.com.br/ material-issues-assessement There was no significant change during the period covered by the report. There was no significant change during the period covered by the report. January 1 to December 31, 2017. 2016 Annual 102 This report was prepared in accordance with GRI Standards: Core option. 94 a 101 The external assurance, performed by KPMG, occurs at the request of the Leaders and is part of the set of annual goals of those responsible for preparing the report. MATERIAL TOPICS ECONOMIC PERFORMANCE Macro Goal: Economic and Financial Results GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries www.braskem.com.br/ material-issues-assessement 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 24 a 34 24 a 34 < 96 > Principles of the Global Compact MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS Principles of the Global Compact 7 6 6 GRI Standard Disclosure Page and/or disclosure 201-1 - Direct economic value generated and distributed GRI 201: Economic performance 201-2 - Financial implications and other risks and opportunities due to climate change 201-4 - Financial assistance received from government MARKET PRESENCE Macro Goal: Local development GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components GRI 202: Market Presence 103-3 - Evaluation of the management approach 202-1 - Ratios of standard entry level wage by gender compared to local minimum wage 202-2 - Proportion of senior management hired from the local community INDIRECT ECONOMIC IMPACTS Macro Goal: Local development GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach GRI 203: Indirect Economic Impacts 203-1 - Infrastructure investments and services supported 24 86 a 92 69 www.braskem.com.br/ material-issues-assessement 43 a 54 43 a 54 46 46 www.braskem.com.br/ material-issues-assessement 55 a 59 55 a 59 55 a 56 GRI Standard Disclosure Page and/or disclosure PROCUREMENT PRACTICES Macro Goal: Local development 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 204-1 - Proportion of spending on local suppliers GRI 103: Management Approach GRI 204: Procurement Practices ANTI-CORRUPTION Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach GRI 205: Anti- corruption 205-3 - Confirmed incidents of corruption and actions taken ANTI-COMPETITIVE BEHAVIOR Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach www.braskem.com.br/ material-issues-assessement 60 a 66 60 a 66 61 www.braskem.com.br/ material-issues-assessement 16 a 18 16 a 18 There were no confirmed cases of corruption during the period. 10 www.braskem.com.br/ material-issues-assessement 16 a 18 16 a 18 GRI 206: Anti- competitive Behavior 206-1 - Legal actions for anti-competitive behavior, anti-trust, and monopoly practices Nothing to report. Braskem does not have any such process. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS GRI Standard Disclosure Page and/or disclosure MATERIALS Macro Goal: Renewable resources GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components www.braskem.com.br/ material-issues-assessement 58, 71 a 74, 85 103-3 - Evaluation of the management approach 58, 71 a 74, 85 301-1 - Materials used by weight or volume 301-2 - Recycled input materials used 301-3 - Reclaimed products and their packaging materials GRI 301: Materials ENERGY Macro Goal: Energy efficiency GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 85 85 58 www.braskem.com.br/ material-issues-assessement 71 a 74, 83 a 84 103-3 - Evaluation of the management approach 71 a 74, 83 a 84 GRI 302: Energy 302-1 - Energy consumption within the organization 302-3 - Energy intensity 302-4 - Reduction of energy consumption 83 a 84 83 a 84 83 a 84 Principles of the Global Compact 7, 8 8 8 7, 8 8 8, 9 < 97 > Principles of the Global Compact GRI Standard Disclosure Page and/or disclosure WATER Macro Goal: Water efficiency GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 303-1 - Water withdrawal by source 303-3 - Water recycled and reused GRI 303: Water BIODIVERSITY Macro Goal: Strengthening of practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach GRI 304: Biodiversity 304-2 - Significant impacts of activities, products, and services on biodiversity 304-4 - IUCN Red List species and national conservation list species with habitats in areas affected by the organization's operations EMISSIONS Macro Goal: Energy efficiency GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components www.braskem.com.br/ material-issues-assessement 71 a 74, 79 a 82 71 a 74, 79 a 82 79 a 82 79 a 82 www.braskem.com.br/ material-issues-assessement 71 a 74 71 a 74 In 2017, there were no significant impacts on biodiversity (valid for Mexico, where this aspect is material). Two species (Ceratozamia miqueliana and Zamia loddigesii). www.braskem.com.br/ material-issues-assessement 71 a 74, 86 a 92 103-3 - Evaluation of the management approach 71 a 74, 86 a 92 7, 8 8 8 8 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 98 > GRI Standard Disclosure Page and/or disclosure 305-1 - Direct (Scope 1) GHG emissions 305-2 - Energy indirect (Scope 2) GHG emissions 305-3 - Other indirect (Scope 3) GHG emissions GRI 305: Emissions 305-4 - GHG emissions intensity 305-5 - Reduction of GHG emissions 305-6 - Emissions of ozone- depleting substances (ODS) 305-7 - Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions EFFLUENTS AND WASTE Macro Goal: Safety GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 86 a 92 86 a 92 86 a 92 86 a 92 86 a 92 86 a 92 86 a 92 www.braskem.com.br/ material-issues-assessement 71 a 74, 79 a 82, 85 103-3 - Evaluation of the management approach 71 a 74, 79 a 82, 85 GRI 306: Effluents and waste 306-1 - Water discharge by quality and destination 306-2 - Waste by type and disposal method 79 a 82 85 ENVIRONMENTAL COMPLIANCE Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components www.braskem.com.br/ material-issues-assessement 16 a 18, 71 a 74 103-3 - Evaluation of the management approach 16 a 18, 71 a 74 Principles of the Global Compact 7, 8 7, 8 7, 8 8 8, 9 7, 8 7, 8 8 8 Principles of the Global Compact 8 GRI Standard Disclosure Page and/or disclosure GRI 307: Environmental Compliance 307-1 - Non-compliance with environmental laws and regulations SUPPLIER ENVIRONMENTAL ASSESSMENT Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components Nothing to report. We had assessments during the period, both environmental and regulatory; however, the Company was not definitively ordered to pay fines or to comply with non-monetary sanctions during the period in question. For the purpose of this report, the same materiality criteria used in the Reference Form established by the Brazilian Securities and Exchange Commission ("CVM") was adopted, pursuant to CVM Instruction 480/2009 ─ BRL 60 million. For environmental issues, the amount of BRL 10 million was considered. www.braskem.com.br/ material-issues-assessement 71 a 74, 60 a 66 103-3 - Evaluation of the management approach 71 a 74, 60 a 66 308-1 - New suppliers that were screened using environmental criteria 60 a 66 8 GRI 308: Supplier Environmental Assessment EMPLOYMENT Macro Goal: Economic and Financial Results GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components www.braskem.com.br/ material-issues-assessement 43 a 54 < 99 > Principles of the Global Compact MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS Principles of the Global Compact 6 6 GRI Standard Disclosure Page and/or disclosure GRI 103: Management Approach GRI 401: Employment 103-3 - Evaluation of the management approach 43 a 54 401-1 - New employee hires and employee turnover 401-2 - Benefits provided to full-time employees that are not provided to temporary or part-time employees 47, 51 a 52 53 401-3 - Parental leave In Brazil, we track the number of maternity leaves and the percentage of termination up to one year after returning from the leave. In 2017, of the 69 Members who took maternity leave, 61 remained in the company after one year, a return rate of 88%. The paternity leave indicator is not monitored. In other countries where we have operations, this indicator is not yet monitored. OCCUPATIONAL HEALTH AND SAFETY Macro Goal: Safety GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach www.braskem.com.br/ material-issues-assessement 71 a 74, 75 71 a 74, 75 GRI Standard Disclosure Page and/or disclosure GRI 403: Occupational Health and Safety 403-2 - Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities 403-4 - Health and safety topics covered in formal agreements with trade unions 74 54 TRAINING AND EDUCATION Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components GRI 404: Training and Education 103-3 - Evaluation of the management approach 404-2 - Programs for upgrading employee skills and transition assistance programs 404-3 - Percentage of employees receiving regular performance and career development reviews DIVERSITY AND EQUAL OPPORTUNITY Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach www.braskem.com.br/ material-issues-assessement 43 a 54 43 a 54 53 50-52 6 www.braskem.com.br/ material-issues-assessement 43 a 54 43 a 54 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS GRI Standard Disclosure Page and/or disclosure GRI 405: Diversity and equal opportunity 405-1 - Diversity of governance bodies and employees NON-DISCRIMINATION Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach GRI 406: Non- discrimination 406-1 - Incidents of discrimination and corrective actions taken LOCAL COMMUNITIES Macro Goal: Local development GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 45, 47 a 50 www.braskem.com.br/ material-issues-assessement 21 a 22 21 a 22 21 a 22 www.braskem.com.br/ material-issues-assessement 55 a 59, 71 a 74, 76 a 77 103-3 - Evaluation of the management approach 55 a 59, 71 a 74, 76 a 77 GRI 413: Local Communities 413-1 - Operations with local community engagement, impact assessments, and development programs 413-2 - Operations with significant actual and potential negative impacts on local communities 56 a 59 71, 76 a 77 Principles of the Global Compact GRI Standard Disclosure Page and/or disclosure 6 6 1 1 SUPPLIER SOCIAL ASSESSMENT Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach GRI 414: Supplier Social Assessment 414-1 - New suppliers that were screened using social criteria PUBLIC POLICIES Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach GRI 415: Public Policy 415-1 - Political contributions CUSTOMER HEALTH AND SAFETY Macro Goal: Safety GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach www.braskem.com.br/ material-issues-assessement 60 a 66 60 a 66 60 a 66 www.braskem.com.br/ material-issues-assessement 69 69 Zero www.braskem.com.br/ material-issues-assessement 71 a 74, 78 71 a 74, 78 < 100 > Principles of the Global Compact 2 10 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS GRI Standard Disclosure Page and/or disclosure Principles of the Global Compact GRI Standard Disclosure Page and/or disclosure < 101 > Principles of the Global Compact GRI 416: Customer Health and Safety 416-1 - Assessment of the health and safety impacts of product and service categories 416-2 - Incidents of non-compliance concerning the health and safety impacts of products and services MARKETING AND LABELING Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 417-1 - Requirements for product and service information and labeling 417-2 - Incidents of non-compliance concerning product and service information and labeling 417-3 - Incidents of non-compliance concerning marketing communications GRI 417: Marketing and Labeling 78 78 SOCIOECONOMIC COMPLIANCE Macro Goal: Strengthening of Practices GRI 103: Management Approach 103-1 - Explanation of the material aspect and its Boundaries 103-2 - The management approach and its components 103-3 - Evaluation of the management approach www.braskem.com.br/ material-issues-assessement 78 78 78 78 Zero. The Company declares non- existence of non-compliance with regulations and voluntary codes regarding marketing communications, including advertising, promotion, and sponsorship. GRI 419: So- cioeconomic Compliance 419-1 - Non-compliance with laws and regulations in the social and economic area www.braskem.com.br/ material-issues-assessement 16 a 18 16 a 18 Braskem had assessments during the period, both environmental and regulatory; however, the Company was not definitively ordered to pay fines or to comply with non-monetary sanctions during the period in question. For the purpose of this report, the same materiality criterion used in the Reference Form established by the Brazilian Securities and Exchange Commission (“CVM”) was adopted, pursuant to CVM Instruction 480/2009 ─ BRL 60 million. For environmental issues, the amount of BRL 10 million was considered. MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 102 > CREDITS Vice President of People, Business Communication, Marketing, and Sustainable Development Marcelo Arantes Director of Corporate Communication André Vieira Director of Sustainable Development Jorge Soto Corporate Communication Supervision Amanda Moscardini Sustainable Development Supervision Mario Pino Luiz Carlos Xavier Analysis of Indicators, Project Development, and Content Production Keyassociados Graphic Design and Layout Magenta•Lab Assurance KPMG Photos Acervo Braskem Translation Gotcha! Idiomas For more information about this report, please contact imprensa@braskem.com 102-53 Headquarters - Office Odebrecht Building - Rua Lemos Monteiro, 120 Butantã - São Paulo (SP) ZIP CODE: 05501-050 102-3 MESSAGE FROM THE BUSINESS LEADER BRASKEM GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATION STAKEHOLDERS HEALTH, SAFETY, AND ENVIRONMENT SUMMARY OF GRI CONTENT STANDARDS CREDITS < 103 > 

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