Braskem S.A.
Annual Report 2019

Plain-text annual report

ANNUAL REPORT 2019 FOREWORD LETTER FROM THE BUSINESS LEADER FUTURE-ORIENTED RESPONSIBLE PERFORMANCE GOVERNANCE AND COMPLIANCE BUSINESS PERFORMANCE INNOVATIVE AND SUSTAINABLE SOLUTIONS VALUE CREATION RESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARY CORPORATE CREDITS < >2 3 FOREWORD 4 LETTER FROM THE BUSINESS LEADER 8 FUTURE-ORIENTED 20 RESPONSIBLE PERFORMANCE 24 GOVERNANCE AND COMPLIANCE 34 BUSINESS PERFORMANCE 49 INNOVATIVE AND SUSTAINABLE SOLUTIONS 62 VALUE CREATION 85 RESPONSIBLE PRODUCTION 110 GRI STANDARDS CONTENT SUMMARY 125 CORPORATE CREDITS Innovation move us ahead. In our search for pioneering, diversified and, mainly, sustainable solutions, we became the largest producer of thermo- plastic resins in the Americas, largest producer of polypropylene in the Unit- ed States and sixth largest producer of plastic resins in the world, in addition to being the global leader in the production of biopolymers. We know that the chemical and petrochemical industry is essential for the economic development of countless production chains. We also recog- nize the relevance of our business and its impacts on society, which is why we invest in a responsible growth strategy with a focus on the well-being of people and management of resources. On the following pages, we present the obstacles we faced and the ad- vances we had throughout 2019, a challenger year, but which also yielded excellent results, such as the consolidation of Circular Economy initiatives and the completion of the implementation of our Compliance program. Our path reflects our efforts to continue evolving as a conscious company committed to creating increasingly more innovative, sustainable and effi- cient products and solutions. Enjoy your reading! < >3 FOREWORDFUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDLETTER FROM THE BUSINESS LEADER _102-14_ < >4 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDWHERE THERE ARE CHALLENGES, WE SEE OPPORTUNITIES At Braskem, we believe that innovative ideas and attitudes are capable of trans- Commission). With the end of the independent monitoring period and the cer- forming the future. We worked to find answers and ways of overcoming an un- tification by the MPF, the DoJ and the SEC, the Company has complied with its favorable global economic scenario, which reached the lowest level of growth obligations established in the agreements signed with these authorities and has since the 2008/2009 financial crisis, with GDP growth of 2.9% according to the successfully concluded the three-year term under the Agreements. Together, we International Monetary Fund (IMF). presented in 2019 the filing of Forms 20-F for fiscal years ending in 2017 and 2018, Several events across the world contributed to this situation, such as the another positive result of the improvements in our internal controls. United States-China trade war, the slowdown of the Chinese economy, the Another issue that counted on our priority in 2019 was the geological phe- contraction of the European automobile industry, mainly in Germany, and the nomenon that caused the sinking of areas in four districts in the city of Maceió political instability in emerging markets, such as Brazil and Mexico. These fac- (AL). We acted responsibly on this issue, signing an agreement in January 2020 tors negatively impacted investments and demands in a wide variety of indus- to vacate the areas of risk identified by the Civil Defense and supporting stud- tries, including the petrochemical sector, which is still undergoing a down cy- ies to better understand the phenomenon and potential alternative solutions cle due to oversupply of thermoplastic resins in the world, except in the North for the resulting consequences, conducted by global institutions with expertise American PP market, where the opposite is true, with healthy spreads due to on this matter. This positioning took into account not only an eventual liability the country’s economic growth and the availability of raw materials. - not yet proven - of Braskem, but also the historical relationship we have with At Braskem, we continue to collaborate with the authorities in the Op- eration Lava Jato. In May 2019, we announced the signing of the leniency agreement with the Attorney General’s Office and the Controlership General society in Alagoas and our ethical principles. Thus, we took important measures such as supporting the resettlement of 17,000 people to safe areas and providing adequate compensation, ending the of Brazil in the amount of approximately R$ 2.9 billion, to be adjusted using extraction of rock salt in Maceió and closing our salt extraction wells in the city. < >5 the SELIC rate. We also integrated the corporate risk management and have completed 100% of the 161 initiatives in our Compliance program, establishing policies and procedures, anti-corruption controls and mechanisms to ensure integrity practices, preventing the occurrence of unlawful acts and promot- ing ethics and transparency. These advances were recognized by the Federal Prosecutor’s Office (MPF) through the certification of independent monitors that certified the fulfillment of all obligations assumed in the leniency agreement - entered into and between the MPF and Braskem in 2016 - and the implementation of all the additional ini- tiatives recommended. The external monitoring process was completed on May 2020 by the DoJ (Department of Justice) and the SEC (Securities and Exchange AT BRASKEM, WE BELIEVE THAT INNOVATIVE IDEAS AND ATTITUDES ARE CAPABLE OF TRANSFORMING THE FUTURE. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDIN 2019, WE CONSOLIDATED OUR COMMITMENT TO THE CIRCULAR ECONOMY FOCUS ON POSITIVE RESULTS Despite the obstacles we faced in relation to the global economic We also support the prevention of waste in the oceans situation, the challenging petrochemical scenario, and the con- through the ‘Plastics Sector Forum - For a Clean Ocean’ and in- sequences of the geological phenomenon in Maceió, our net cash vest in technologies such as mechanical and chemical recycling. generation was R$ 3 billion, offsetting the 46% drop in recurring In addition, we continue to advance in projects to increase the EBITDA in BRL, caused especially due to the smaller spreads in energy efficiency and reduce greenhouse gas emissions such the international market. as the modernization of our petrochemical plant located in São This was possible because we placed even more emphasis Paulo, ABC. After its startup, scheduled to 2021, this Project will on our diversification strategy: both in terms of geography, in- reduce the plant energy consumption in an amount equivalent creasing and strengthening our international presence, and in the variation of raw materials and suppliers. We also focused on to a city of 1 million habitants and avoid the emissions of approx- imately 100,000 t of CO2 per year. increasing the efficiency and competitiveness of our operations We understand that partnerships play an instrumental role in and improving the relationship with the various stakeholders. Braskem’s contribution to Sustainable Development. We actively In line with our Global Sustainable Development Policy - a participate in the Global Compact, an initiative associated with document that reinforces our commitment to international- the UN that has once again considered us as a leading company, ly recognized human rights and aligns our goals with the agen- highlighting the importance of our work, which focuses mainly da of the UN Sustainable Development Goals - we expand our on the topics of Climate and Water. contribution to finding answers to climate change and focus on We joined the Global Compact’s CEO Water Mandate, which adapting and managing risks and opportunities. Another area promotes sustainable use of water in the global business environ- in which Braskem continuously focuses, the Health and Safety ment through partnerships with governments, civil society organi- area, presented results below expectations in 2019. Nonetheless, zations and other stakeholders. we remained very close to the global benchmarks for this indus- Our engagement earned important recognition in 2019. For the try. In order to improve our performance, we decided to reinforce 15th time, Braskem was included in the Corporate Sustainability In- human reliability issues. dex of B3, Brazil’s Stock Exchange. In addition, we were included in Another milestone for Braskem in 2019 was the strength- RobecoSAM’s “The Sustainability Yearbook” as one of the most sus- ening of our commitment to the Circular Economy, consol- tainable companies in the world. idating our strategy of innovating in plastics to create an The achievement of these positive results was only possi- increasingly sustainable cycle, from production to post-con- ble because we rely on the commitment and contribution of our sumption. An example of this effort was the launch of solu- Team Members. In order to value our efforts, we have advanced tions with low carbon emissions, such as our first solvent in the implementation of our Value Proposition, BeUx, which im- made from a renewable source. We also revised and expanded proves the work environment and expands innovation and cre- the I’m green brand, which now includes products made from ation possibilities of our professionals, who are always diverse renewable and recycled content. and constantly evolving. < >6 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDREADY FOR THE FUTURE Given the challenges we face with resilience and focus, and amidst so Mid and long-term impacts are still difficult to measure. We under- many achievements and positive results, we feel prepared for the year stand that some trends will emerge, once social and economic activities 2020. Nevertheless, the reduction in the economic activity in Brazil and evolve to the “new normal”, while other previously identified might be ac- the other countries we operate, resulted in a significant decrease in the celerated or affected. During the last months it became clear that plastic demand for our products over most of the segments, mostly affecting image has been uplifted with the current claim for solutions that offers durable goods, such as transportation, and infrastructure & construction. versatility, flexibility, resistance and are fully hygienic and recyclable. We On the other hand, there are a few examples of positive impacts, such as also perceived that, apart from economic and financial difficulties, the hygiene and health care products, which are experiencing growth over de- sustainability agenda not only maintained its resilience, but will proba- mand due the trends related to Covid-19. bly continue to accelerate as an important issue. In this sense, Braskem Despite this scenario, the Company will maintain its focus on creating understands its role to continue committed on supporting the industry value, but without neglecting the well-being of our Team Members and evolve on Plastic Waste and Climate Change initiatives. other stakeholders. We had already implemented a home office routine Concerning the situation in Maceió, we will continue to advance for most professionals two years ago. At the production sites, we were through serious, responsible and concrete actions. We will face the down- able to review the work shifts of the production teams, so that only those turn petrochemical cycle by focusing on our competitiveness and finan- people necessary for plant maintenance are present. cial health, will strengthening our image and reputation, and working to We are also working with Customers and Suppliers to donate raw ma- enable the consolidation of the Company’s value. terials for the production of more than 60 million masks, aprons, liquid To get here and trail new steps towards the future, we relied on the ethanol, packaging for hand sanitizers, among other initiatives with several dedication of countless people. For this reason, I would like to thank our companies and that involve more than 61 actions to help combat Covid-19 Team Members, who work day after day with care, efficiency, consistency - a joint effort that will yield many lessons learned at this critical moment and passion. I also wish to thank our Suppliers, Partners, Shareholders and for the world. Another important initiative we have taken in South Ameri- Customers, who help us to excel in a challenging and globally competitive ca was to support the chain offering credit lines to Clients, since access to scenario. Finally, my thanks to Fernando Musa, who for the past 5 years credit has been monitored as a challenging impact in this moment. has led Braskem with transparency, responsibility, and with a focus on the < >7 A NEW ADMINISTRATION ROBERTO LOPES PONTES SIMÕES TOOK OVER AS BRASKEM’S CEO ON JANUARY 1ST, 2020. globalization of our brand. As the world changes and uncertainties increase, we will drive as much effort as we can to strengthen our planning, adaptability, resiliency capa- bilities, and make sure to structure our way through whatever challenge may come. I take over the business in 2020 with the confidence that we are ready to take this next step for our growth. Roberto Simões FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD< >8 FUTURE- ORIENTED _102-1, 102-2, 102-4, 102-6, 102-7_ FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDBRASKEM IN THE WORLD With 40 industrial units installed in four countries (Brazil, United States, Mexico and Germany), we are today the largest petrochemical company in the Americas and the sixth largest in the world. We have an annual production capacity of more than 8 million tons of thermoplastic resins (Polyethylene, Polypropylene and Polyvinyl Chloride) and more than 10 million tons of basic chemicals (Ethylene, Propylene, Butadiene, Benzene, among others). We are also proud to be an innovative com- pany that, since the beginning of our operations in 2002, seeks to act in accordance with the prin- ciples of sustainable development. As the world’s largest manufacturer of biopolymers, we rein- force our commitment to the consolidation of initiatives that address the Circular Economy by seeking solutions that form a sustainable cycle that begins in design, and includes production, re- cycling and ends in new uses for products. In ad- dition, in 2019, we expanded our I’m green™ brand, which was created in 2010 and today represents Braskem’s portfolio of more sustainable products. Learn more in section Innovative and Sustainable Solutions - Expanding the paths of the Circular Economy To learn more about our global presence, visit www.braskem.com.br>Braskem-no-mundo To see the location of our offices, visit 40INDUSTRIAL UNITS 7,9401 TEAM MEMBERS 16SALES OFFICES FREE CASH GENERATION OF R$ 3 BILLION OPERATIONS IN CUSTOMERS IN OVER 4COUNTRIES 100 COUNTRIES America, Europe and Asia - and in different markets and sectors, including food packaging, construction, industrial, retail, automotive, personal care and cleaning, agribusiness, health, among others www.braskem.com.br>unidades-braskem 1 Team Members only. Does not include interns < >9 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDINPUTS HUMAN INTELLECTUAL NATURAL SOCIAL AND RELATIONSHIP MANUFACTURED < > 10 OUR BUSINESS MODEL GLOBAL CHEMICAL COMPANY ORIENTED FOR THE HUMAN BEING AND WITH A LOOK AT THE FUTURE We want to be the world leader in sustainable chemistry versão preferencial positiva OUTCOMES STAKEHOLDERS Belief Plastic and chemistry make life better Purpose Improve people’s lives by creating sustainable chemical and plastic solutions Our way of being Our Team Members are the protagonists that move us Principles and Values We share respect, trust and mutual admiration Governance Protects the rights of all our shareholders while allowing us to serve the interests of other stakeholders Compliance is for Everyone We identify ethical behavior as a competitive advantage and do it right out of conviction OUTPUTS We produce a wide and diversified portfolio of chemicals, specialties and thermoplastic resins, which are transformed by our Clients into applications that meet human daily needs and make people’s lives better. HUMAN INTELLECTUAL NATURAL SOCIAL AND RELATIONSHIP MANUFACTURED • • Team Members • • Interns • • Apprentices • • Third Parts • • Board Members • • Researchers • • Technology partners • • Consultants • • Universities • • Research Centers • • Suppliers • • Government • • Non-governmental organizations • • Surrounding Communities • • Opinion Makers • • Final user • • Surrounding communities • • Public Power • • Non-governmental organizations • • Peer companies • • Class associations • • Opinion leaders • • Suppliers • • Service providers • • Clients • • Shareholders • • Financial Institutions • • Government • • Debt investors • • Rating agencies FINANCIAL organisms (GMOs) or products containing GMO ingredients, whether in Brazil or abroad. FINANCIAL It is worth mentioning that we do not produce or sell products made from genetically modified FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDSTRATEGY FOCUSED ON SUSTAINABLE DEVELOPMENT From the beginning of our operations in 2002, we have been committed to aligning our business strategy with the goal to improve people’s lives based on sustainable solutions from chemicals and plastics. To this end, we follow our Global Sus- tainable Development Policy, which assesses and meets the needs and demands of all stakeholders, in order to promote economic growth aligned with environmental preservation, work and process safety and social justice in all our business activities, services, investments, relationships and products. In addition, we are guided by our macro-goals (see more below), that include goals aligned with the Sustainable Devel- opment Goals (SDG) and the Principles of the Global Compact, both initiatives of the United Nations (UN). In 2019, we carried out different projects to integrate this strategy and reinforce this positioning, such as the creation and strengthening of ini- tiatives that involve, for example, the launch of more efficient and sustainable products. With a focus on further strengthening our initiatives for sus- tainable development, we have made public our position con- cerning the Circular Economy, a document where we define pri- ority actions to expand and promote recycling and the reuse of plastic waste. This commitment also covers further investments in new resins from renewable sources, a goal intended to expand the portfolio that today includes green plastic I’m greenTM and to support new technologies, business models, development of the recycling chain and consumer engagement actions. Click here to read the full Global Sustainable Development Policy < >11 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDMACRO GOALS FOR SUSTAINABLE DEVELOPMENT To align our growth plan with the development of products, processes and solutions tribution to sustainable development. In 2019, we achieved 72.3% of our goals, that minimize possible environmental and social impacts, we follow our Global Sus- compared to 70.6% in 2018. tainable Development Policy. Through this document, we set goals and aspirations also This work remains closely aligned with the 17 UN Sustainable Development Goals considering our Materiality Matrix, which guides the relevance of the topics of sustain- (SDG) - with a greater focus on those SDGs where our most significant impacts occur ability within our business strategy. - and with the Global Compact Principles. With the arrival of the target year for the The matrix was defined based on the sustainability reporting guidelines commitments established, we are setting the challenges for the new 2021-2030 cycle, of the Global Reporting Initiative (GRI) and lists 29 aspects, 17 of which were and updating our goals according to a new global reality. It should be pointed out that, classified as material because they are located in the critical or highly critical starting in 2021, these macro-goals will be reported from the perspective of impact quadrants. They were consolidated into 10 strategic macro-goals for our con- generation directly related to the goals of the SDGs prioritized. SAFETY ECONOMIC AND FINANCIAL RESULTS POST CONSUMPTION LOCAL DEVELOPMENT To be among the benchmarks in chemical, occu- pational, and process safety in the Global Chem- ical Industry. To be among the top three thermoplastic resin producers in the world and to ensure profitabili- ty that sustains businesses, while maintaining the Investment Grade rating in the three major inter- national agencies. To be one of the five largest traders of PE and PP with recycled content in the world, among the pet- rochemical companies producers of Polyolefins. Also, to become an important driver of recycling plastic in Brazil, which will help achieve the goals in the Sector Agreement on Packaging. To achieve an “excellent” reputation in the Citizen- ship Dimension of RepTrak® Pulse, recognition from society of the Company’s contribution to the im- provements of human development. % OF ACHIEVED GOALS % OF ACHIEVED GOALS % OF ACHIEVED GOALS % OF ACHIEVED GOALS < > 12 2017 2018 2019 2020 98% 98% 87% 2017 2018 2019 100% 2020 73% 73% 73% 92% 2017 2018 2019 2020 1% 2% 8.2% 2017 2018 2019 100% 2020 *without Maceió 81% 75% 76%* 100% FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDWATER EFFICIENCY CLIMATE CHANGE To be recognized in the global chemical industry per our usage of water resources in terms of water consumption and water reuse. To be among the world’s largest chemical companies in Greenhouse Gas (GHG) emissions intensity while maintaining the use of renewable raw materials. % OF ACHIEVED GOALS % OF ACHIEVED GOALS 2017 2018 2019 2020 100% 97% 97% 100% 2017 2018 2019 2020 100% 99% 96% 100% DEVELOPMENT OF SOLUTIONS STRENGTHENING PRACTICES To be recognized as a Company that supports its clients in the development of environmental and social solutions using Chemicals and Plas- tics, therefore reaching a “strong” reputation level through products & services. To be among the business benchmarks in Brazil for our contribution to Sustainable Development, as well as a global benchmark in the sector due to our contribution to Sustainable Development. % OF ACHIEVED GOALS % OF ACHIEVED GOALS 2017 2018 2019 2020 91% 97% 100% 100% 2017 2018 2019 2020 94% 92% 90% 100% RENEWABLE RESOURCES ENERGY EFFICIENCY To be among the leading producers of chemicals and thermoplastic resins from renewable raw ma- terials, and remain the world’s largest producer of thermoplastic resins from renewable sources. To be considered one of the best chemical indus- tries in the world in energy consumption and be an important renewable energy user. % OF ACHIEVED GOALS % OF ACHIEVED GOALS 2017 2018 2019 2020 82% 100% 100% 100% 2017 2018 2019 2020 85% 62% 75% 85% Click here to learn more about our Materiality Matrix < > 13 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDHIGHLIGHTS OF OUR MACRO-GOALS Safety Braskem listed in the 15th consecutive portfolio in the ISE B3 Sus- The last fatal accident at the workplace was recorded in 2016, at the Cu- tainability Index, being part of the select group of 7 companies that have batão unit (São Paulo). remained in the portfolio since its launch. Economic and financial results For the eighth consecutive year, we were recognized by the UN Glob- al Compact as a Leading Company in Sustainable Development, and we Delta Project: with an investment of US$ 675 million, the plant might start are the only Brazilian company among the 10,000 associates. up in 2020, positioning Braskem as the largest producer of PP in the Unit- We maintained our score on the Ecovadis platform and remained ed States (450,000 tons). Post consumption among the 9% best companies evaluated in the chemicals industry in 2019 (not categorized as gold, silver, bronze). The platform assesses top- ics associated with the environment, labor practices and human rights, We reviewed the I’m green brand, which now offers renewable, recy- sustainable procurement, and ethics. cled and renewable-recycled products. In 2019, a total of 1,651 tons of post-consumer resin were produced and sold, representing 8.2% Renewable resources of the target for 2020. We announced our first solvent made from a renewable source (sugar- The Chemical Recycling Squad carried out some trials with prod- cane), as a result of investments of R$ 1 million and Braskem’s constant uct from the chemical recycling of post-consumer plastics produced by search for sustainable solutions. technology companies partners. Water Efficiency Our MEG (monoethylene glycol) development project, together with Haldor Topsoe, a world leader in catalysts and technology for the chemical and refining industries, continues to advance, already Our water consumption index increased from 4.14 to 4.31 in the period be- with tests to confirm the technical and economic viability of MEG tween 2002 and 2019, representing an aggregate negative index of around production at scale. 4%. Even so, Braskem’s water consumption index is about six times better than the average for the global chemical industry (base: ICCA). Energy efficiency The percentage of water reused grew from 18.5 to 25.3 between 2011 The energy efficiency indicator decreased from 11.09 to 10.09 GJ/t in the and 2019, representing an aggregate improvement of about 37%. period between 2002 and 2019, representing an improvement of about 7%. The liquid effluent generation index decreased from 1.94 to 1.31 Braskem and Siemens stablished a partnership to increase en- in the period between 2002 and 2019, representing an aggregate im- ergy efficiency in São Paulo, ABC, through a cracker modernization provement of about 32%. project. This initiative will result in an improvement in Braskem´s We joined the CEO Water Mandate, a special initiative of the United sustainability indicators, in addition to higher efficiency in the pro- Nations and of the UN Global Compact in favor of the sustainable use of duction process. water in the world. Strengthening of practices Concluded the installation of 1 MWp out of 5MWp of the floating so- lar panels farm project, located in the Sobradinho´s hydroelectric plant, controlled by CHESF in Bahia. Project developed in partnership between We have completed 100% of the 161 initiatives set out in our integrity Sunlution and UNIPAC group. program and the integrated corporate risk management is already in Start of the solar power plant operation in Bahia, with a capacity of place across the company. 97 Wp, installed in an area of 2500 m2, supplying 27% of our Salvador´s Considering the advancement of our internal controls, it is worth office demand. After the completion of the next phase, the project will mentioning the filing of Forms 20-F for fiscal years ending in 2017 and 2018 meet 35% of the demand for this installation. This is yet another invest- (“Form 20F 2018”) with the U.S. Securities Exchange Commission (“SEC”). ment for the diversification of our energy matrix. < > 14 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDACKNOWLEDGMENTS _102-12, 102-13_ For us, strengthening sustainable practices means be- ing a lead player in promoting actions and projects that increase positive environmental and social impacts and minimize any negative effects. For this reason, we are proud to be part, for the 15th consecutive year, of the Cor- porate Sustainability Index (ISE), a portfolio prepared by the Brazilian Stock Exchange (B3) with companies that adopt best practices and obtain the best results in cor- porate sustainability. We were also recognized as a Leading Company in Sus- tainable Development by the UN Global Compact, the larg- est corporate sustainability initiative in the world. This was the eighth consecutive year that Braskem has been ap- pointed to the highest level of engagement in the project and demonstrates our leadership in managing issues re- lated to climate change and water resources. Despite hav- ing more than 10,000 associates, only 36 companies were awarded a leadership role by the UN, with Braskem as the only Brazilian company to obtain this title. Once again, we are part of the latest edition of “The Sus- tainability Yearbook,” published by RobecoSAM, which evalu- ates corporate sustainability performance and is considered the most embracing and important publication in the world. In addition to being in the top 15%, this was the sixth consec- utive time that Braskem has been chosen as one of the most sustainable companies in the world. In addition, in October 2019, we received the award Anuário Época Negócios 360º, which chooses the 250 best Brazilian companies based on six aspects: financial health, corporate governance, innovative capacity, hu- man resources policies, social and environmental respon- sibility, and vision for the future . To learn about Braskem’s initiatives that led to its recognition as a Global LEAD by the UN click here Click here to see “The Sustainability Yearbook” JOINT EFFORT FOR THE ENVIRONMENT _102-12, 102-13_ In January 2019, we teamed up with a group of 30 ma- jor companies to help put an end to improper disposal of plastic waste into the environment. Called Alliance to End Plastic Waste, the purpose of the program is to invest up to US$ 1.5 billion (R$ 5.5 billion) over the next five years in projects and new technologies related to this topic. The organization is not for profit and gathers the en- tire plastics value chain: companies that produce, use, sell, process, collect and recycle this material. The Alliance has the strategic support of the World Business Council for Sustainable Development. The work started through partnerships with govern- ments of several cities to design integrated waste man- agement systems in large urban areas with little infra- structure, especially in locations where there are rivers that can transport plastic waste to the ocean. This joint effort also collaborates with intergovernmental orga- nizations, such as the United Nations and the incuba- tor Circulate Capital, to conceive actions that prioritize the prevention of plastics in the ocean as well as waste management and recycling. THIS INITIATIVE IS IN LINE WITH SDG 14, SUPPORTING GOAL 14.1 < > 15 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDWASTE IN THE OCEANS _102-12, 102-13_ Improper disposal and inadequate solid waste manage- ment are two of the main factors that influence the con- tamination of seas and oceans by plastics. We recognize the complexity of the problem and understand that finding solutions is only possible if the various sectors of society— government, society and companies—join efforts. For this reason, we invest not only in innovation and development of more sustainable products, but we also actively partic- ipate in the debate and the search for answers to combat the accumulation of plastic waste in the oceans. We are one of the signatories to the Plastics Sec- tor Forum - For a Clean Sea, an initiative created in 2016 by Plastivida and the University of São Paulo’s Oceano- graphic Institute. Its goal is to integrate companies and industry associations to mitigate pollution of the seas and oceans. This is achieved through activities in the ar- eas of environmental education, conscious consumption and proper waste disposal. Two initiatives in 2019 that should be mentioned were the participation in the “World Day for the Cleaning of Rivers and Beaches,” on the coast of São Paulo, which raised awareness on the importance of responsible consumption, plastic recycling and preser- vation of the marine environment, and the launch of the “National Plan for Combating Waste at Sea (PNCLM),” carried out by the Ministry of the Environment on March 22 -World Water Day. We also adhered to the “Alliance to End Plastic Waste,” which brings together companies producing thermoplastic resins, brand owners, transformers and waste treatment companies. To learn more about this initiative, go to: www.endplasticwaste.org < > 16 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDTHE ALLIANCE FOR THE END OF PLASTIC WASTE WORKS ON FOUR PILLARS: 1. Improvement of waste management infrastructure 2. Fostering education and engagement of governments, communities and businesses 3. Promotion of technological innovation to minimize waste and advance recycling and recovery of plastic waste 4. Support in cleaning areas with a higher concentration of waste Another action front was our adherence, in February 2019, to the environmental management program Op- eration Clean Sweep (OCS), developed by the partnership between Plastics Industry Association and the American Chemistry Council. The idea is to help reduce the presence of plastic in the seas by improving pellet handling opera- tions - microgranules of plastic resin that, when disposed of improperly, can contaminate the environment - from pro- duction to its use in processing and recycling companies. HUMAN RIGHTS _102-12_ At Braskem, we understand that our actions can have a positive or negative impact on human rights. We consider as fundamen- tal for sustainable development all internationally recognized rights expressed in the International Charter of Human Rights and in the Declaration of the International Labor Organization regarding fundamental principles and rights at work. Our commitment to respecting human rights is in line with the United Nations (UN) Guiding Principles on Business and Hu- man Rights and encompasses our own operations, surround- ing communities, our value chains or even society as a whole. This commitment is expressed in our Global Sustainable Devel- opment Policy, approved by Braskem’s Board of Directors and Codes of Conduct, all publicly available. < > 17 To learn more, visit www.opcleansweep.org FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDRISKS THAT OUR OPERATIONS MAY HAVE ON HUMAN RIGHTS ETHANOL CHAIN SUPPLIERS BRASKEM LOGISTICS PROCESSOR END USER CONSUMER RECYCLING CHAIN DIGNITY AND DIVERSITY PROPERTY SECURITY PRIVATE PROPERTY PROCESS SAFETY OCCUPATIONAL HEALTH AND SAFETY HEALTHY ENVIRONMENT SAFETY OF SURROUNDING COMMUNITIES TRADITIONAL PEOPLES TRADITIONAL PEOPLES < > 18 CONSUMER SAFETY CONSUMER SAFETY WORK AND CAREER CONDITIONS ETHICS AND TRANSPARENCY FAIR WORK IN VALUE CHAIN FAIR WORK IN VALUE CHAIN SAFE WORK IN VALUE CHAIN SAFE WORK IN VALUE CHAIN WORK AND CAREER CONDITIONS FAIR WORK IN VALUE CHAIN SAFE WORK IN VALUE CHAIN POST-CONSUMER POST-CONSUMER FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDIn 2019, we proceeded with the implementation of measures for preventing and mitigat- In 2019, we proceeded with the implementation of measures for preventing and mitigat- ing the human rights risks assessed as priorities and integrated into the Corporate Risk ing the human rights risks assessed as priorities and integrated into the Corporate Risk Matrix, monitored by the Board of Directors and senior management. [Learn more in Matrix, monitored by the Board of Directors and senior management. [Learn more in section Governance and Compliance] section Governance and Compliance] In relation to the risk to Dignity and Diversity, we started to develop a set of measures to In relation to the risk to Dignity and Diversity, we started to develop a set of measures to protect and care for victims of harassment and discrimination in the workplace. The purpose is protect and care for victims of harassment and discrimination in the workplace. The purpose is to strengthen our reparation mechanisms in the event of such violations. to strengthen our reparation mechanisms in the event of such violations. In order to respect the human rights of Traditional Peoples, in 2019 we renovated the In order to respect the human rights of Traditional Peoples, in 2019 we renovated the project Rede de Maré, carried out in traditional communities of fishermen and shellfish gath- project Rede de Maré, carried out in traditional communities of fishermen and shellfish gath- erers on Ilha da Maré, located in the vicinity of our operations in Salvador (BA). The project erers on Ilha da Maré, located in the vicinity of our operations in Salvador (BA). The project promotes the sustainable management of artisanal fisheries in the region, preserving tradi- promotes the sustainable management of artisanal fisheries in the region, preserving tradi- tional local cultures and their livelihoods, and the community’s environmental education with tional local cultures and their livelihoods, and the community’s environmental education with a focus on the marine ecosystem. [Learn more in section Value Creation - Communities] a focus on the marine ecosystem. [Learn more in section Value Creation - Communities] Within the scope of the Program Na Mão Certa, from Childhood Brasil, we managed to Within the scope of the Program Na Mão Certa, from Childhood Brasil, we managed to THIS INITIATIVE IS IN LINE WITH SDG1 (GOAL 1.5), SDG 4 (GOAL 4.7), SDG 5 (GOAL 5.2), SDG 10 (GOALS 10.2 AND 10.3), SDG 12 (GOAL 12.3) AND SDG 16 (GOAL 16.2) impact 1,644 truck drivers and 373 Team Members with awareness actions conducted with impact 1,644 truck drivers and 373 Team Members with awareness actions conducted with Click here and see our commitment to human rights logistics and transportation companies to prevent the sexual exploitation of children and ad- logistics and transportation companies to prevent the sexual exploitation of children and ad- olescents on highways. Overall engagement increased by 55% compared to 2018 olescents on highways. Overall engagement increased by 55% compared to 2018 For more information on voluntary projects and commitments, visit Advances in risk management related to Ethics and Integrity and to Post-Consumption Advances in risk management related to Ethics and Integrity and to Post-Consumption will be further detailed in specific sections of this report. [Learn more in sections Gover- will be further detailed in specific sections of this report. [Learn more in sections Gover- nance and Compliance and Innovative and Sustainable Solutions] nance and Compliance and Innovative and Sustainable Solutions] www.braskem.com.br/voluntary-commitments _102-12, 102-13_ < > 19 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD< > 20 RESPONSIBLE PERFORMANCE _103-2, 103-3, 307-1, 413-1, 413-2_ FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDIn the beginning of 2018, three districts in the city of Maceió - Pinheiro, Bebedouro and Mutange - registered cracks in buildings and sinking of public roads. In March of that same year, a magnitude 2.4 earthquake on the system, the recovery of the street pavement, the in- Richter scale was recorded in these districts where stallation of a meteorological station and of geological Braskem has 35 rock salt extraction wells and where the monitoring systems, and set up a control room to be company has been operating for over 40 years. used by the municipal Civil Defense. In respect to this long relationship in the region In the same period, the State Prosecutors Office and to our ethical principles, from the very begin- and the Public Defendor’s Office of the State of Ala- ning we adopted a responsible, transparent and goas requested the first preventive injunction against active stance, collaborating with the authorities to Braskem. There were a series of similar requests from understand the geological phenomenon and at- other bodies and judicial decisions at different levels, tempting to identify its causes. DETAILED STUDIES AND SAFETY Thus, Braskem commissioned a detailed study of the favorable to and against the company. The authori- ties sought to safeguard the rights of the communi- ty even before a conclusion was reached about the causes of the problem. salt wells. Using sonar technique, the study deter- In May, a study by the Geological Survey of Brazil mined the conditions of each well and of the stabili- (CPRM) concluded that the rock salt extraction pro- zation actions that are being addressed through the cess could have reactivated geological structures in Mine Closure Plan. The results were shared with the the region, causing cracks, and that the soil instability regulatory body - the National Mining Agency (ANM). in the district of Pinheiro was aggravated by the ero- In parallel, in April 2019, we signed the first Techni- sion resulting from the lack of an adequate stormwa- cal Cooperation Agreement with different public agen- ter drainage and basic sewage network. cies to implement a series of preventive and corrective Considering these results, as a precaution, we de- measures in the region. We carried out, for example, the cided to stop the extraction of rock salt in Maceió and inspection and correction of the stormwater drainage temporarily interrupt the operation of the chlor-alkali plant in Pontal da Barra. We have responsibly taken these measures and started a series of studies by in- dependent institutes in Brazil and abroad to deepen the knowledge about the situation. < >21 WE RESPECT OUR RELATIONSHIP WITH SOCIETY IN ALAGOAS AND FOLLOW ETHICAL PRINCIPLES, WHICH IS WHY WE HAVE ADOPTED A RESPONSIBLE, TRANSPARENT AND ACTIVE ATTITUDEFUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDOUR OPERATIONS INVOLVE MORE THAN 60 COMPANIES IN THE PLASTIC AND CHEMICALS CHAIN AND ACCOUNT FOR 3% OF THE GDP OF THE STATE OF ALAGOAS. INVESTMENT IN CONCRETE AND FAIR ACTIONS Our operations account for 3% of the GDP of the State map identified by the Civil Defense in the three districts of Alagoas and involve more than 60 companies in the (Pinheiro, Mutange and Bebedouro) and 62 additional plastic and chemicals chain in the state. For this reason, houses with structural problems in the district of Bom even with the interruption of important activities, we are Parto. The number of properties to be vacated is ap- committed to stakeholders and did not issue any layoffs. proximately 4,500, totaling 17,000 people. To honor our services to our Customers, we import The agreement also determines the return to the raw material from other states and abroad, focusing on company’s account of the R$ 3.7 billion blocked by court resuming operations at the Pontal da Barra plant in the fu- order, of which R$ 1.7 billion will be allocated to the Financial ture. We asked the National Mining Agency (ANM) for au- Compensation and Resettlement Support Program. New thorization to survey salt reserves in rural areas of Alagoas judicial impediments may not be requested as long as the to continue generating jobs and income in the region. company is fully compliant with the agreement. It is esti- In November 2019, we received the technical report mated that the measures will be completed in two years. from the Leipzig Institute of Geomechanics (IFG), Ger- In January 2020, we issued a material fact to inform many, a global reference in salt well studies, which recom- about the provision totaling R$ 1 billion for the actions nec- mended the creation of a buffer area around wells that essary to close the salt wells in Maceió, which have already showed certain changes. Based on this report, a buffer started and will follow ANM’s schedule and approvals. area was established for 15 of the 35 rock salt wells. Nev- In addition to the amounts already cited and ertheless, this report is not conclusive about the fact that mentioned in the Term of Agreement, there are other these changes are related to the geological phenomenon. measures that include the instruments of Technical Even so, we care for the safety of the residents and de- Cooperation signed with the Civil Defense, Term of cided for the definitive closure of all salt wells, in addition to Agreement with the Public Ministry of Labor, expens- proposing to the authorities the creation of a buffer area. To es with hiring external consultants and specialists to respond to the demands of the community, we reinforced prepare studies to understand the geological phe- the communication and clarification program and intensi- nomenon and support the execution of recommend- fied social dialogues and our presence in the neighborhoods. ed actions, structure and operational expenses of the We continue negotiating with public authorities to Central do Morador (Resident’s Center), consultan- seek solutions for the affected residents. Thus, in Jan- cies, expenses for service providers for the operation uary 2020, we signed the Term of Agreement with the of the Resettlement and Compensation Program, ex- State and Federal Public Defendor’s Offices and the penses for property closing, expenses for the com- Federal and State Prosecutors Offices. The document munication plan, among others, which are detailed in covers the areas classified under 00 criticality in the risk the 2019 Financial Statements disclosed. Protection area Zone A Zone B Zone C Zone D < >22 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDNEXT STEPS We point out that the obligations and actions we assumed in risk areas do not mean we accept responsibility for the crack- ing occurring in the districts, as set out in the agreement. So far, there are no conclusions about the causes of the geological phenomenon. Therefore, we continue to in- vest in studies and research that deal with its origin, con- ducted by renowned international organizations, such as the Leipizig Geomechanics Institute (IFG), Germany, Uni- versity of Houston (USA), BRGM - Bureau de Recherches Géologiques et Minières (France), Imperial College (En- gland) and ACCMS - Consultancy of Professors from USP. We will continue to fulfill our role as a responsible company that is committed to the safety of people, both of our Members and of the communities where we oper- ate, seeking definitive answers and taking sound and ob- jective actions to solve the problem and its impacts. To learn more about our actions in Alagoas, visit www.braskem.com.br/alagoas (portuguese only) WE CONVENED MEETINGS WITH THE COMMUNITY TO ANSWER QUESTIONS, CREATED THE FINANCIAL COMPENSATION PROGRAM (“PCF”) AND RESETTLEMENT SUPPORT AND SET UP A RESIDENT’S CENTER IN MACEIÓ COMMUNITY SUPPORT To guarantee the well-being of communi- • Creation of a toll-free Call Center ties and restore trust, we have developed since November 15, 2019 and a Ser- several actions in the region, including: vice and Information Desk in the dis- trict of Pinheiro to enable closer con- • Meetings are held to listen to residents tact with residents. and other stakeholders in the affect- ed areas, to answer questions and • Implementation of the Resident’s conduct social dialogue. This dialogue Center in Maceió, which offers bank- made it possible to identify the main ing service, notary services, real es- concerns of the community, to define tate companies, rooms for lawyers, focal points to continuously approach free transportation for residents, an and influence the actions for resettle- on-call service of the Court of Law of ment and compensation of families. the State of Alagoas and an itinerant office for the State and Federal Public • Creation of the Financial Compensation Defendor’s Offices. and Resettlement Support Program, which assists residents within the buf- • Psychological treatment for the res- fer area and includes compensation for idents of the affected districts (Psy- material and moral damages, payment chological Support Home) and ac- of expenses for moving and resettling tions to protect and support families families, in addition to helping in the under social vulnerability throughout search for a new property. the PCF program. < >23 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGOVERNANCE AND COMPLIANCE _102-16, 102-17, 102-18, 102-23, 406-1_ CONSOLIDATION OF PROCESSES RISK ASSESSMENT INTERNAL AUDIT BOARD OF DIRECTORS INCREASINGLY MORE ENGAGED ETHICS LINE CHANNEL < >24 REPUTATION MANAGEMENT DUE DILIGENCE FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDCONSOLIDATION OF PROCESSES We continuously strive to implement governance In March 2020, MPF recognized the improve- and compliance initiatives in line with our goals and ments achieved by the program by attesting to the market standards. The year 2019 represented the fulfillment of all obligations assumed in the Lenien- completion of two important projects in these areas. cy Agreement signed between MPF and Braskem in The first was the completion of the the Com- 2016, in addition to the implementation of all addi- pliance Program, which started in 2016 and in- tional recommended initiatives. The effectiveness cluded 161 initiatives to improve the compliance certification issued by external monitors and attest- environment. Among the projects was the estab- ed by the MPF demonstrates the effort and dedica- lishment of Braskem’s Compliance System, struc- tion of all Braskem Team Members to this topic, and tured through 10 measures in the three pillars: Pre- reinforces our commitment to ethics, integrity and vention, Detection and Remediation. The objective transparency in all of our actions. of the system, which is permanently monitored by The external monitoring process was complet- the Board of Directors, is to maintain an ethical, in- ed on May 2020 by the DoJ (Department of Justice) tegral and transparent performance in all the com- and the SEC (Securities and Exchange Commission). pany’s activities and operations. With the end of the independent monitoring peri- The second was the completion of the indepen- od and the certification by the MPF, the DoJ and the dent monitoring process carried out by the Federal SEC, the Company has complied with its obligations Prosecutors Office (MPF) that began in 2017 with established in the agreements signed with these au- the aim of evaluating the implementation and ef- thorities and has successfully concluded the three- fectiveness of our Compliance Program. year term under the Agreements. COMPLIANCE SYSTEM MEASURES 7 8 ETHICS LINE CHANNEL MANAGEMENT MONITORING OF RISKS AND CONTROLS Our governance and compliance actions are directly linked to the macro-goals of strengthening practic- es and of economic financial results, in addition to converging with all of our priority SDGs. Through strategic actions that focus on respecting values, such as ethics, integrity and transparency, we work to guarantee Braskem’s competitiveness and reputation, and ensure our contribution to eco- nomic growth, innovation, eradication of poverty, responsible consumption, among many other topics. DETECT STRENGTHENING PRACTICES 1 COMPLIANCE GOVERNANCE 2 POLICIES AND OTHER GUIDELINES < >25 3 RISK ASSESSMENT AND CONTROLS PREVENT LEADER 4 COMMUNICATION AND TRAINING 5 THIRD PARTY COMPLIANCE 6 ENGAGEMENT IN COLLECTIVE ACTIONS REMEDY 9 REMEDY RISKS AND STRENGTHEN CONTROLS 10 DISCIPLINARY MEASURES FINANCIAL RESULTS FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD2019 HIGHLIGHTS • Compliance team composed of 49 Team Members, divided into corporate and regional teams • Completion of the implementation of the Compliance Program with the implementation of 100% of the 161 scheduled actions. • Completion of the independent monitoring process carried out by the Federal Prosecutors Office (MPF), the US Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) • Evolution in the evaluation of the ETHOS* Institute’s health indicators, with a score of 9.3 in cycle 18/19 • Signature of leniency agreement with the Federal Attorney Office (AGU) and the Federal Comptroller Office (CGU) • Implementation of the Due Diligence process for Customers (KYC) • Approval of the Privacy Policy and Protection of Personal Data • Achieved the ABERJE Communication Award (regional and national) < >26 • New Courtesy Training * Civil society organization whose mission is to mobilize, raise awareness and help com- panies manage their business in a socially responsible manner FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDANTI-CORRUPTION INITIATIVES _103-2, 103-3, 102-16, 205-2_ In line with our commitment to ethical and responsible man- agement, we have adopted a global Code of Conduct that sets out principles, values and practices that guide the cor- porate conduct of our Team Members both in internal and external relations. All Team Members received training on the Code of Conduct, as did members of the Board of Directors. In addition to this document, which includes a section dedicated to fighting corruption, we have an Anti-Corrup- tion Policy in place and on which 100% of the Board of Direc- tors and 95% of the Team Members were trained. We are also part of the Anti-corruption Working Group of Global Com- pact Network Brazil and the Business Pact for Integrity and against Corruption of the Ethos Institute. And finally, in 2019 we offered training on corruption and the Third Party Code of Conduct, which guides the relationship between the compa- ny and its suppliers and partners. The Code of Conduct is translated into all languages of the countries where Braskem operates. Click here to learn more about our anti-corruption policy. _102-23_ You can access our Third Party Code of Conduct by clicking here. < >27 Understand how our Corporate Governance structure, principles and model works at https://www.braskem.com/Principal/corporate-governance and at https://www.braskem.com/Principal/compliance. _102-18_ Also visit our Investor Relations website FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDRISK ASSESSMENT _102-15_ The risk assessment process is essential, since it sets out the main factors that can impact the achievement of our goals and objectives, in financial, strategic, operational and regulatory terms. In all, 120 risks are as- sessed and, in 2019, we classified 18 items as priorities. The Board of Directors and the Advisory Committees are responsible are responsible for closely monitoring each risk regularly with the administration. In addition, action plans have been defined to reduce the likelihood and/or the impact of these risks should they occur. In 2019, the following risks were highlighted: • Industry Cycle: Possible difficulty adapting business to market volatility in the development of corpo- rate strategies, resulting in financial losses and/or loss of competitiveness. • Circular Economy: possible difficulty in adjusting production processes (from design to collection) to meet the globally required needs in terms of recycling, resulting in the reduction/rejection of the Com- pany’s products by society, inability to meet demand and consequent loss of markets, in addition to ad- verse effects on the Company’s image and reputation. • Competition: possibility of increased competition or loss of market share in the sector in which the Company operates and/or existence of incentives for competitors from other countries. < >28 DATA PRIVACY PROGRAM One of our concerns, as a global and connected company, is to adapt our activities to the privacy laws that guide the treatment of the personal data of our Customers, Suppliers and Team Members. With that in mind, we started the Global Privacy Program that covers the countries where we operate and maintain relevant commercial offices. The program, created from the enactment of Brazil’s General Data Protection Law, aims to preserve the rights and freedoms of Data Subjects. This includes processes such as mapping personal information used in different areas, updating contracts with service providers and expanding knowledge about the law. All processes involved in the program must be fully aligned by August 2020 and this is being led by the Compliance team alongside the Information Technology department and the Legal area. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDINTERNAL AUDIT Through an independent and objective evaluation pro- cess, Internal Audit consolidates and protects our insti- tutional value, checking compliance of operations and activities against internal policies and external rules and regulations. As a result, it is possible to improve risk man- agement and identify opportunities to increase efficien- cy, expanding and strengthening governance practices. In 2019, 24 projects were completed, including: Relat- ed Parties, Sales Intermediate, Access and Change Man- agement, Information Security, Pricing, Due Diligence, Business Courtesies, among others. These reports gen- erated 128 opportunities for improvement in the internal control environment of the audited processes and 354 action plans for the respective remediation. BOARD OF DIRECTORS At Braskem, we have an active Board of Directors that works according to the best corporate governance prac- tices. Since 2018, it has been comprised of a minimum of 20% independent members. As of December 31, 2019, the Board was composed of 11 members, 4 of whom are independent, and the Board’s activities and powers are regulated by the Bylaws and its Internal Regulations. We also have a Compliance Committee; whose role is to support the Board of Directors in their commitment to ethical and transparent administration. It is a Statu- tory Committee formed by at least three independent members of the Board of Directors. < >29 To learn about the structure of our Boards and Departments, visit: http://www.braskem-ri.com.br/councils-and-board and http://www.braskem-ri.com.br/board-of-directors-committees FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDINCREASINGLY MORE ENGAGED We believe that, in addition to adopting compliance actions, it is important to understand how our Team Members perceive these initiatives. For this reason, every year, we prepare a global survey that, in 2019, had a record participation: 4,811 respondents from units in Brazil, Europe, the United States and Mexico. The survey, which was answered on an online platform be- tween March 11 and April 5, 2019, inquired about the level of peo- ple’s understanding of compliance, their responsibilities in relation to the topic and how it is embedded in their day-to-day activities. In addition, the results help identify opportunities for improve- ment in processes, procedures and communication management. • 4,811 RESPONDENTS WORLDWIDE • 95% OF THE TEAM MEMBERS RECOGNIZE THAT IT IS A COMMITMENT TO ETHICAL, UPRIGHT AND TRANSPARENT PERFORMANCE • 97% OF OUR TEAM MEMBERS AGREE THAT ENSURING COMPLIANCE IS THE RESPONSIBILITY OF ALL. ETHICS LINE CHANNEL _103-2, 103-3, 102-17, 406-1_ The Ethics Line Channel was one of the measures created to keep our activities in line with our commitment to compliance. Estab- lished in April 2017, the service is an evolution of the whistleblow- ing channel and aims to provide all our audiences with a form of communication that ensures confidentiality, security and secrecy to send reports of illegal and unethical conduct, including possi- ble violations of the applicable Anti-Corruption Laws and / or the Company’s Guidance Materials The service is managed by an independent and outsourced company, which has professionals trained to impartially receive, evaluate and correctly direct reports in an impartial manner. Within Braskem, reports are received by a Compliance team spe- cialized in Investigation. In 2019 the channel received 527 reports, 53% more compared to 2018: 380 in South America, 122 in Mexico, 10 in the United States and 15 in Europe, with 65% of people preferring to remain anonymous. The top five categories: 45% behavior and conduct at work (harassment, abuse of power, retaliation, discrimination, etc.), 25% complaints, 11% conflicts of interest and 10% irregular- ities in contracts. In 2019, a report initially classified as relating to corruption was reported on the Ethics Line Channel and an independent in- vestigation by a law firm was conducted to establish the facts. The outcome of the investigation found conflicts of interest and embezzlement of company resources by a former Member, with no evidence of involvement of public officials. _205-3_ < > 30 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDResults of the Ethics Line Channel in 2019 _406-1_ GENERAL FIGURES 527 reports received in 2019 DISCRIMINATION In 2019, 476 closed reports 6 cases were received in Brazil and 2 in the United States All 6 cases in Brazil were properly investigated and concluded: 4 of them were considered substantiated or partially substantiated and 3 remedial actions were implemented. The two incidents in the US were properly in- vestigated and concluded to be unsubstantiated. MORAL AND SEXUAL HARASSMENT In 2019, 46 cases were received globally 42 in Brazil 1 in the United States 1 in Europe 2 in Mexico In Europe, the case was considered unsubstantiated. In the United States, the investigation is ongoing. In Mexico, the employee was dis- missed for the substantiated case and the second case did not have enough information for investigation. In Brazil, 34 investigations were conducted, 32 of which were closed and 2 still in progress. Of the 16 substantiated cases, 9 undergo behavioral moni- toring, 1 was restricted to feedback, 1 in written warning and 2 terminations. In 2019 there were no reports of disciplinary or corruption-related cases. All reports received in 2019 have been investigated or are under- going investigation. It should be noted that some reports are similar or identical to others already received by the channel and, therefore, are jointly investigated. For this reason, the number of investigations is small- er than the number of reports received. The status of the investigations refers to March 2020. ETHICS LINE CHANNEL Our Ethics Line Channel is available to all audiences: Team Members, Customers, Third Parties and the Company’s external audience. The service maintains full confidentiality about the content of the reports, which can be made on any day and at any time by means of a toll-free call or over the Internet, in the language of the country (Portuguese, En- glish, Spanish or German): BRAZIL: 0800 377 8021 (www.linhadeeticabraskem.com) GERMANY: 0800 183 0763 (www.lineethikbraskem.com) THE NETHERLANDS: 0800 022 7714 (www.ethieklinebraskem.com) MEXICO: 01 800 681 6940 (www.lineadeeticabraskemidesa.com) UNITED STATES: 1 800 950 9280 (www.ethicslinebraskem.com) ARGENTINA: 0800 222 0394 (www.lineadeeticabraskem.com) COLOMBIA: 01 800 518 4806 (www.lineadeeticabraskem.com) PERU: 0800 76757 (www.lineadeeticabraskem.com) CHILE: + 56-448909744 (www.lineadeeticabraskem.com) SINGAPORE: + 65-31585409 (www.ethicslinebraskem.com) < >31 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD REPUTATION MANAGEMENT Reputation is a valuable asset. Therefore, we invest in a management model that focuses on three important pillars: monitoring of a pan- el of rational and emotional indicators, governance processes in the areas responsible for relationships with the various stakeholders, and incorporation of analysis in decision making on aspects associated with image and reputation. We use the RepTrak® methodology, created by The RepTrack Company, to annually monitor all countries where we operate. Thus, we can analyze information such as the perception of our stakehold- ers from an emotional standpoint (Pulse®) - level of esteem, admi- ration, empathy and trust - as well as rational indicators in seven dimensions: Products and Services, Innovation, Work Environment, Governance, Citizenship, Leadership, and Performance. In 2019, Braskem’s global Pulse® was scored between 60 and 69 points. The year 2019 represented the largest effort ever made by Braskem to measure its reputation. In all, 7,130 interviews were conducted with Team Members, Customers, Suppliers, Surround- ing Communities, Society and Influencers. The international front was marked by the implementation of the data protection program (General Data Protection Regulation - GDPR), which renders the work more complex and challenging. According to survey results, our corporate reputation has evolved positively worldwide, with governance as the most relevant dimen- sion. Among the most important attributes are ethics, transparency, fair conduct, environmental responsibility, and good management. The seismic shock recorded in Maceió (AL) had a negative im- pact on the results monitored in Brazil, especially on issues related to Society and Communities. Nevertheless, we continue to be one of the companies with best reputational performance, with an excellent score in the global Pulse® index. 19 STAKEHOLDERS 4 MARKETS (BRAZIL, UNITED STATES, MEXICO AND EUROPE - GERMANY AND THE NETHERLANDS) 7,130 INTERVIEWS < >32 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDDUE DILIGENCE In 2017, Braskem initiated an Integrity due diligence process for new suppliers, with the support of an outsourced team. In 2018, a new guideline was developed that established a new methodolo- gy for the process and, in the same year, the analysis of members with regard to candidates and advisors and also analyzes of a group of customers, such as distributors and intermediaries, be- gan. of sales. As of 2019, the customer due diligence process has been expanded, it has been done using a tool, providing greater security and traceability for it. IN 2019, BRASKEM WON THE REGIONAL AND NATIONAL ABERJE AWARD, GRANTED BY THE THE BRAZILIAN ASSOCIATION OF CORPORATE COMMUNICATION, IN THE ETHICS, INTEGRITY AND COMPLIANCE CATEGORY, FOR INTERNAL COMPLIANCE COMMUNICATION ACTIONS PERFORMANCE IN THE THEME GUIDE: INTEGRITY, PREVENTION AND FIGHT AGAINST CORRUPTION. < >33 RETURN TO THE NEW YORK STOCK EXCHANGE One of the most important news of 2019 was the filing of the 2018 20-F Form to the Securities and Exchange Commission (SEC), the entity that regulates the U.S. capital market. The document is re- quired of all foreign companies that trade securities on American stock exchanges. Given additional procedures and analysis regarding our internal processes and controls, there was a delay in the filing of the forms for the years 2017 and 2018, which led the New York Stock Exchange (NYSE) to suspend the trading of our American deposi- tary shares (ADRs) and initiate the dislisting procedures, although the company continued listed at NYSE. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD< >34 BUSINESS PERFORMANCE _102-9, 102-45, 103-2, 103-3_ BRAZIL UNITED STATES AND EUROPE MEXICO CONSOLIDATED INCOME GEOGRAPHIC AND RAW MATERIAL DIVERSITY FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD2019 was a challenging year for Braskem’s business. We ended the period with a free cash flow generation of R$ 3 billion, a result we achieved through actions such as inventories and accounts receivables optimization, the monetization of R$ 281 million of the PIS/COFINS balance, the lowest IR / CSLL payment, loyalty of customers with long-term contracts and discipline in operational and strate- gic investments. This helped to offset the 46% drop in EBITDA, which occurred mainly due to lower spreads in the international market, especially in polyeth- ylene. Our return on free cash flow was 13%. Throughout the year, we faced with courage, focus and resilience delicate situations, such as the geological phenomenon recorded in the city of Maceió (AL) [see more in section Responsible Performance]. Our decision to act pro- actively led us to shut down the chlor-alkali plant and to definitively close rock salt extraction wells in the region. In addition, we prepared a program for finan- cial compensation and relocation of residents in areas of risk (PCF), through an agreement with Brazilian authorities, with investments of R$ 1.7 billion related to the PCF - to be spent over the next few years -, and we estimate about R$ 1 billion to close and monitor the salt wells. Provisions in the amount of approximately R$ 3.4 billion were recognized in our accounting result, which contributed to the net loss for 2019. However, this agreement allowed the judicial release in the amount of R$ 3.7 billion of our box in 2020. The good performance of our businesses and oper- ations guarantees the sustainability of our actions. Based on a strategy of commitment to all stake- holders, we maintain our focus on creating value and developing the chain, with the implementation of projects that enable expanding production volume and global trading of recycled resins and chemicals. FINANCIAL RESULTS < >35 IN 2019, 0.03% OF OUR SALES IN BRAZIL WERE FROM OUR POST-CONSUMER PORTFOLIO (PCR). OF THIS TOTAL, 3% WERE FROM 70% PCR GRADES, WITH THE MAJORITY OF SALES RELATING TO 100% PCR GRADES. AS WE LAUNCHED THE RECYCLED PORTFOLIO IN 2019, OUR METRICS ALSO STARTED THIS YEAR. IN ADDITION, OUR SALES IN BRAZIL INCREASED ALMOST 7 TIMES COMPARED TO 2018. _301-2_ FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDNEW ORGANIZATIONAL STRUCTURE In October 2019, we presented our new ad- ministrative structure, which was redefined to be more in line with our long-term strate- gy that values globalization and synergy. The organization model now has ten vice presi- dencies and replaces the previous organiza- tion into business units. In search of greater agility, efficiency, sustainability and better customer service, we transformed our way of operating: before, we divided the businesses into Small Com- panies according to the segment in which they operated, each with its own Leader and independent administration. After the change, we merged the units, and the entire portfolio (resins from fossil, recycled and renewable sources) is now considered, han- dled and delivered under two perspectives, commercial and production management. Within this reorganization, we began to expand and strengthen our presence in Asia, a continent with an outlook of continued growth in demand and which has been incor- porated into the vice-presidency of Europe. To this end, we expanded the team working in the Singapore office and will open, in 2020, a new office in Mumbai, India. BRAZIL In 2019, operations in Brazil were impacted The drop of 8% compared to 2018 in PVC by a downward cycle for the petrochemical spreads was due to the weakening of PVC de- industry and by the shutdown of chlor-al- mand in Asia, due to the trade war between kali and dichloroethane plants in Alagoas, the United States and China and India’s an- in addition to the growth in local demand ti-dumping policy, due to the higher demand for resins, which totaled 5.3 million tons, up for EDC in the market, including Braskem, 2% over the previous year. This increase in and the lower demand for caustic soda in the demand was due to the fall in the country’s aluminum and paper and cellulose sectors. basic interest rate and the recovery of con- Finally, spreads for the main chemicals fidence by businessmen and consumers in dropped by 22% in 2019 due to the entry the Brazilian economy, leveraging the agri- into operation of ethane-based crackers business, food sectors and beginning the and the good performance of propane de- recovery of civil construction. hydrogenating plants in the United States, International resin spreads generally combined with the entry of new capacities declined. In relation to the polyethylene in Asia and with the reduction demand in spread, there was a 36% reduction com- the automobile sector. pared to 2018, which occurred due to The capacity utilization of the petro- the increase in capacities of integrated chemical plants was lower than in 2018 due crackers based on shale gas in the Unit- to the load reduction at the Bahia plant as ed States, a drop in demand related to a result of the shutdown of chlor-alkali and uncertainties about the context of the dichlorethane (EDC) plants in Alagoas; the world economy and regulatory pressure scheduled shutdown on one of the produc- on single-use plastics. With regard to the tion lines at the Bahia petrochemical plant polypropylene spread, the 13% drop in in the fourth quarter of 2019; logistics prob- relation to the same period is due to the lems with the receipt of raw materials at the slowdown in demand, mainly in the auto- Rio Grande do Sul plant and load reduction motive sector, combined with the entry from the plants with a drop in marginal prof- of new capacities from Asia. itability from resin exports. < >36 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD2019 BRAZIL COGS* 55% 14% 7% 5% 5% 5% 4% 3% 2% Ethane: 0.6% Propane: 1.4% Refinery off-gas: 1.1% < >37 Naphtha and Condensate Other variable costs Propylene Fixed Costs** Deprec / Amort *Considers accounting figures ** Includes salaries and benefits Sales Freight Natural Gas Gas Electricity FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDBRAZIL’S EBITDA IN 2019 WAS R$ 3.205 MILLION In 2019, resin sales in the country totaled 3.4 million tons, tional prices for the main raw materials, partially offset by the aligned volume recorded in 2018. Total sales of the main higher volume of total resin sales. Lower naphtha prices fol- chemicals, on the other hand, were 2.8 million tons, down lowed the drop in oil prices and increased use of natural gas 2% from the previous year. In the year, resin exports totaled in the flex-feed crackers in the U.S. The lower prices of ethane 1.4 million tons, and exports of the main chemicals, 628,000 and propane in the United States, on the other hand, are due tons, up 8% and 10% from 2018, respectively, which reflect- to the start of operations of new gas crackers and gas pipe- ed an increase in the market share of polypropylene in South lines in the region, in addition to the delay in the startup of eth- America and, for the main chemicals, the lower sales volume ane-based crackers. In 2019, COGS was positively impacted by in the Brazilian market. the PIS/COFINS credit of US$ 226 million (R$ 893 million) in the Cost of Goods Sold (COGS) reached a total of US$ 8,780 purchase of raw materials and by the Reintegra credit in the million, down 8% from 2018, caused by a reduction in interna- amount of US$ 2.3 million (R$ 9.2 million). EBITDA was US$ 821 million (R$ 3,205 million), 57% lower than 2018, representing 55% of the Company’s consolidated segments. FINANCIAL OVERVIEW (US$ MILLION)* 2019 (A) 2018 (B) VAR. (A) / (B) NET REVENUE COGS Gross Profit Gross Margin SG&A Other Operating Revenue (Expenses) EBITDA EBITDA Margin Net Revenue (R$ million) EBITDA (R$ million) *Does not consider expenses related to the geological event in Maceió, Alagoas 9,843 (8,780) 1,063 11% (599) (1,016) 821 8% 38,781 3,205 11,525 (9,530) 1,996 17% (698) 96 1,905 17% 42,205 6,985 -15% -8% -47% -6 p.p. -14% -1155% -57% -9 p.p. -8% -54% < >38 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDUNITED STATES AND EUROPE In 2019, our operations in the United States were influ- COGS was lower than the pre- 2019 U.S. AND EUROPE COGS* enced by the better operational performance of the vious year due to lower propylene country’s plants. In Europe, however, there was a re- prices in both the United States and striction on the receipt of raw materials at one of our Europe. In the United States, the re- plants in the continent due to operational problems duction in propylene prices was in- from a supplier, in addition to the poor performance of fluenced by greater availability of this the European auto industry on PP spreads in the region. raw material in the region. In Europe, Demand in the United States fell, due to the slow- the price decreased due to the reg- down in the auto market. In Europe, demand grew due ularization of river transport, which to the increased use of polypropylene in the consumer had caused logistics restrictions in goods and service sector. the region in the previous year. The average spread in the United States and Eu- EBITDA recorded by the units in rope fell by 1% compared to 2018. In the United States, the United States and Europe was the spread increased as a result of the high availabili- US$ 316 million (R$ 1.247 billion), ty of propylene in the region, given the high utilization down 48% from the previous year rates of DHP plants and the greater use of natural gas and representing 21% of the Com- liquids in crackers, which increases the supply of pro- pany’s consolidated segments. 45% 29% 11% Propylene US Propylene EU Other Variable Costs Fixed Costs** Sales Freight Deprec / Amort 2% 6% 7% *Considers accounting figures ** Includes salaries and benefits pylene. To compensate for this increase, the polypro- pylene spread in Europe decreased, due to the eco- nomic slowdown in the region, linked to the increase in the supply of propylene as a consequence of the regu- larization of river transport, which affected the region in the previous year. FINANCIAL OVERVIEW (US$ MILLION) 2019 (A) 2018 (B) VAR. (A) / (B) Capacity utilization of the plants registered an in- crease, mainly due to the better operational perfor- NET REVENUE mance of the North American plants, offsetting the COGS drop in capacity utilization in Europe, which occurred due to the logistics restriction in the receipt of propyl- ene as a result of operational problems of suppliers. Sales totaled 1.9 million tons, without significant variation from the previous year. Gross Profit Gross Margin SG&A Other Operating Revenue (Expenses) THE UNITS IN THE UNITED STATES AND EUROPE RECORDED AN EBITDA OF US$ 316 MILLION (R$ 1.247 BILLION). EBITDA EBITDA Margin Net Revenue (R$ million) EBITDA (R$ million) 2,591 (2,129) 462 18% (194) (6) 316 12% 10,044 1,247 3,211 (2,503) 708 22% (175) 18 608 19% 11,725 2,208 -19% -15% -35% -4 p.p. 11% -135% -48% -7 p.p. -14% -44% < >39 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDMEXICO Operations in Mexico were influenced, in 2019, by factors such as the downturn in the petrochemical industry - which ended up causing a drop in Mexican demand - by the maintenance of the supply of ethane below the contracted volume, by the weakening of the Mexican economy and by the strategy product redirection to regions with higher margins. The spread of polyethylene in North America, a reference for the operation in Mexico, decreased by 28% compared to 2018, as a result of the slowdown in the growth rate of demand for polyeth- US$ 361 MILLION IN 2019, THE MEXICO UNIT POSTED EBITDA (R$ 1,427 MILLION) ylene combined with the entry into operation of new capacities in The results of Mexican operations were impacted by the US$ 85.5 million revenue the region, partially offset by lower ethane prices. related to the delivery-or-pay provision of the ethane supply contract. The utilization rate of polyethylene plants was below that recorded Highlight for the issuance of bonds in the amount of US$ 900 million, largely in- in 2018 due to the lower supply of ethane throughout the year. Regard- tended to settle financing with the National Bank for Economic and Social Develop- ing sales, the total was 813 thousand tons, 2% higher than in 2018. ment (BNDES) and other Mexican development banks. Sales achieved a result of 2% over the previous year, due to the In 2019, the Mexican unit presented EBITDA of US$ 361 million (R$ 1,427 million), decrease in inventories and higher resales of polyethylene produced 41% lower than 2018, representing 24% of the Company’s consolidated segments. in Brazil. As part of the commercial strategy for product allocation in regions with higher profitability, exports to the United States in- creased 51% and to Europe 29%, both compared to 2018. FINANCIAL OVERVIEW (US$ MILLION)* 2019 (A) 2018 (B) VAR. (A) / (B) COGS remained in line, influenced by the higher sales volume and higher prices of natural gas in the Mexican market, offset by NET REVENUE the drop in ethane prices. MEXICO COGS 2019* 8% 8% 33% 14% 22% COGS Gross Profit Gross Margin Deprec / Amort SG&A Ethane Natural Gas Sales Freight Other Variable Costs Fixed Costs** Other Operating Revenue (Expenses) EBITDA Operating EBITDA Margin* Net Revenue (R$ million) EBITDA (R$ million) *Considers accounting figures ** Includes salaries and benefits * Does not consider the delivery-or-pay provision for feedstock contracts 775 (636) 139 18% (89) 82 361 34% 3,051 1,427 1,034 (636) 398 38% (86) 84 617 51% 3,771 2,251 -25% 0% -65% -20 p.p. 4% -3% -41% -17 p.p. -19% -37% < > 40 14% FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDCONSOLIDATED INCOME _102-7_ In the consolidated result for 2019, we recorded a recurring EBITDA of US$ 1,524 million. This represents a drop of 46% compared to 2018, which was mainly caused by lower spreads in the international market, especially for polyethylene. NET REVENUE (R$ MILLION) COGS 2019 CONSOLIDATED* 52,324 6% 19% 20% 54% 58,000 7% 20% 19% 55% Naphtha and Condensate Other variable costs 41% Propylene Fixed Costs** Deprec / Amort Sales Freight Natural Gas Gas Electricity 2019 2018 *Considers accounting figures ** Includes salaries and benefits 20% 13% 2% 4% 6% 4% 5% 6% Ethane: 1.7% Propane: 1.0% Refinery off-gas: 0.8% < >41 Brazil Exports United States and Europe Mexico FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD2019 FREE CASH FLOW GENERATION (R$ MILLION) 7,877 5,972 1,779 1,904 2,452 Free cash generation Our free cash flow generation was R$ 3.108 bil- lion, down 56% from 2018, due to the drop in EBITDA and to the payment of interest asso- ciated with the total/partial early settlement of some of the Company’s bonuses (breakfund costs), partially offset by: 2,238 412 16 3,108 903 • Reduction in accounts receivable as a result of lower sales volumes and price of goods sold. Ebitda 2019 Non-recurring effects* Recurring Ebitda Working capital and others Capex** Interest Paid IR/CSLL Collected Strategic investments Others 2019 free cash flow • Lower inventory levels of raw materials and fin- ished products. * Mainly considers: (i) PIS / Cofins recognition elimination of the ICMS calculation base ** Considers Braskem Idesa CAPEX and Cetrel / Does not consider associated fees that are allocated to working capital • Larger purchase of imported naphtha with longer payment term. Liquidity and Indebtedness During the year, we highlight the issuance of US$ 2.25 billion in debt securities in the • Monetization of R$ 281 million from the PIS/ international market, of which US$ 1.5 billion with a ten-year term and US$ 750 million COFINS balance (exclusion of the ICMS cal- with a thirty-year term and the issuance, in the Brazilian market, of R$ 550 million in culation base). promissory notes with a term of up to 5 years. These operations contributed to im- proving our financial health, extending our debt profile to 17 years. < >42 • Receipt of advances from customers related to Still in line with this strategy, we ended the year at a liquidity level of US$ 2,373 the future sale of chemical products in the Bra- million, without considering the international revolving credit line of US$ 1,000 zilian market and the future export of PE and PP. million that we have at our disposal. Thus, the coverage of the payment of our • Lower Income Tax and Social Contribution (IR/ Thus, we maintained our investment grade by Standard & Poor’s and Fitch Ratings, CSLL) payment in Brazil and the United States. however, our credit risk outlook went from stable to negative at both branches. debts is guaranteed for 71 months. To learn more about the results and our business strategy, visit www.braskem-ri.com.br/home-en FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDVALUE ADDED STATEMENT (VAS) _201-1_ 2017 2018 2019 Revenues (R$ thousand) Sales of goods, products and services (R$ thousand) Other (expenses) revenues, net (R$ thousand) Provisions for credits of doubtful debtors (R$ thousand) 58,000,752 57,958,099 1,202 41,451 68,923,212 68,255,566 567,793 99,853 Inputs acquired from third parties (R$ thousand) (41,147,077) (51,627,620) Costs of products, goods and services sold (R$ thousand) (38,845,377) (48,993,132) Materials, energy, third-party services, and other (R$ thousand) Loss/Recovery of asset values (R$ thousand) (2,237,835) (63,865) (2,574,232) (60,256) 60,034,002 62,059,664 (2,018,593) (7,069) (50,638,127) (47,587,989) (2,677,752) (372,386) Gross value added (R$ thousand) 16,853,675 17,295,592 9,395,875 Depreciation, amortization, and depletion (R$ thousand) (2,928,855) (2,990,577) (3,632,265) Net value added produced by the entity (R$ thousand) 13,924,820 14,305,015 5,763,610 < >43 Value added received in transfer (R$ thousand) Equity income (R$ thousand) Financial income (R$ thousand) Other (R$ thousand) 652,527 48,832 603,630 65 1,856,981 (888) 1,857,793 76 1,206,836 10,218 1,196,535 83 Total value added for distribution (R$ thousand) 14,577,347 16,161,996 6,970,446 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDVALUE ADDED STATEMENT (VAS) _201-1_ Personnel (R$ thousand) Direct remuneration (R$ thousand) Benefits (R$ thousand) FGTS (government severance fund) (R$ thousand) Taxes, fees and contributions (R$ thousand) Federal (R$ thousand) State (R$ thousand) Municipal (R$ thousand) Remuneration of third-party capital (R$ thousand) Financial expenses (includes exchange rate variation) (R$ thousand) Leases (R$ thousand) Remuneration of equity capital (R$ thousand) Net income (loss) for the year (R$ thousand) Dividends Non-controlling shareholding interest in subsidiaries (R$ thousand) Result from discontinued operations 2017 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 2018 1,565,468 1,239,606 263,294 62,568 4,925,801 2,235,453 2,639,015 51,333 6,763,517 6,495,041 268,476 2,907,210 2,866,675 - 40,535 - 2019 1,693,827 1,316,668 293,156 84,003 1,954,184 (402,790) 2,307,732 49,242 6,219,408 5,922,853 296,555 (2,896,973) (2,797,570) - (99,403) - Total value added distributed (R$ thousand) 14,577,347 16,161,996 6,970,446 < >44 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDEXPANSION OF OPERATIONS IN FUELS In view of the growing demand of the sector and Braskem’s evolution in this segment, Fuels became a business area in 2019. Thus, all fuels in our portfolio, such as Gasoline, Fuel Oil, ETBE (Ethyl Tert-Butyl Ether), MTBE (Methyl Tert-Butyl Ether), LPG, Diesel, Octane Boosters, among others, are under the same structure, allowing greater focus on customer ser- vice, as well as the generation of new solutions for the market. Our main product in Fuels is Gasoline A. Produced in petrochemical plants, it places us as an important player in the markets where we oper- ate. In Rio Grande do Sul, for example, we have a 20% market share, while in Bahia, we reached 30%. In recent years, Braskem has increased its share of the Brazilian Fuels market, with a consequent gradual reduction in the volume of Gasoline exports. Despite the difficulties in the economic scenario in 2019, which led to a reduction in the operating rate of the crackers, our teams man- aged to overcome bottlenecks, optimize industrial units and produce as much gasoline as possible. This allowed us to end the year with record pro- duction, as well as record sales volume, with more than 1 million tons sold. Considering a greater focus on customer demands, we had an im- portant initiative in the year which was the development of our Premium Gasoline, a segment with growth potential and limited availability in the market. After a survey conducted in our laboratories, involving the vari- ous technical and operational teams, it was possible to develop a viable new product and achieve sales volume of 1,961 tons in 2019 < >45 FOR THE SECOND CONSECUTIVE YEAR, WE RECEIVED THE SITIVESP AWARD IN THE SOLVENTS CATEGORY. ORGANIZED BY THE UNION OF PAINTS AND VARNISHES INDUSTRIES OF THE STATE OF SÃO PAULO. THE AWARD RECOGNIZES THE WORK OF SUPPLIERS OF RAW MATERIALS AND PACKAGING IN THE SECTOR. IN 2019, WE REACHED THE RECORD SALES VOLUME IN FUELS WITH MORE THAN 1 MILLION TONS SOLD GOOD NEWS IN SOLVENTS We have produced solvents since the beginning of our history. With its constant evolution, we decided to trans- form the area, in 2019, into a more consolidated business, just as we did with fuels. To overcome the adverse scenario in the petrochemical sector, we base our strategy on innovating our portfolio and diversifying the market. We expand business opportunities and advance market share through new commercial part- nerships, since the main market for solvents, the paint sec- tor, accounts for nearly 60% of our total sales volume and has historically grown linked to Brazilian GDP. We took advantage of the demand for more sustain- able solutions and launched new products, such as the HE- 70S, our first oxygenated solvent, partially renewable, and our first recycled hydrocarbon solvent, resulting in the reg- istration of two patents for application [learn more in sec- tion Innovative and Sustainable Solutions - Expanding the paths of the Circular Economy]. Thus, we achieved amazing results in 2019, both in terms of production volume and sales. Our market share exceed- ed 40% in Brazil in hydrocarbon solvents and we reached the mark of 190,000 tons of sales, up 18% from 2018, a re- cord for the segment. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDNAVIGATING THE DIGITAL TRANSFORMATION ERA We are a forward-looking company and, for this reason, we strongly believe in the value of innovation. This means going beyond developing new products in our lab- oratories. It’s about rethinking the way we operate in all strategic areas of the busi- ness. We use leading-edge technology to overcome this challenge and help us tell this story of evolution and growth. That is how, in 2017, we reorganized our Information Technology (IT) team, which be- gan to focus on a strategy more connected to the business. The main purpose of the pro- gram, called Braskem 5.0, was to align the main structural challenges of the company and legacy systems, always thinking about new sustainable and scalable technology solutions. Braskem 5.0 was created with seven operating pillars: Supply Chain and Logistics, Digital IT, New Business Models, People, Industry 4.0, Enterprise 2.0, and Customer Ex- perience. Among its main achievements, we can highlight: • We gave greater mobility and productivity to our Sales team through the imple- mentation of different tools, such as CRM, for example. • We enhanced our infrastructure to ensure that Team Members had remote access to the entire Braskem network, from anywhere in the world, with quality and security. • We increased productivity in our Supply Chain, automating transport functions, improving processes and providing valuable information about logistics data through visual panels. • We advanced our back-office operations using automated and intelligent processes. • We implemented the COBIT1 governance and change management model to sup- port the organization in the areas of regulatory compliance and audits. In the following year, we started an extensive digital transformation work that en- gaged dozens of Team Members around the world. Their task? To integrate digital tech- nologies into our operations and business processes to find new performance dimen- sions and generate sustainable competitive advantages. That’s when we created the Digital Center, whose objective is to accelerate this process by creating a cultural en- vironment that fosters even more innovation and new ways of working, combined with leading-edge technologies such as artificial intelligence, machine learning, Internet of Things and advanced analytics. We mapped over 50 initiatives that cover topics such as process optimization, preventive maintenance, quality control, product tracking, among others. In addition, the center works as a type of incubator for new business models. 1 More comprehensive framework of good corporate governance and IT management practices to enable a more holistic, integrated view and covering the organization from end to end. www.opservices.com.br/o- que-e-cobit-governanca-ti/ < >46 BRASKEM 5.0 One of the program highlights in 2019 was the strengthening of quality control. Us- ing new laser sensors and analytics tools, it was possible to capture and organize in- formation from the plants, allowing teams to find important standards and connec- tions to predict product quality based on previous production. The initiative also streamlines the necessary corrections in each plant, thereby reducing waste and overall costs and guarantees chemicals and plastics of the highest quality. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDIn 2019, our teams used different in- quires digital skills through training and tan- novative digital technologies to devel- gible practical experiences. In 2019, Braskem op and test the minimum feasibility of 13 trained more than 1,200 Team Members new digital products and two new busi- worldwide in new digital skills, such as Agile, ness models at Braskem. The results could Design Thinking and Data Science. not have been better: 10 initiatives proved Seeking to create value for the business their ability to create value, expanding our through technology, Braskem advanced in leadership position in the digital transfor- its multi-year plan for the implementation mation of the chemical industry. These 10 and support of Industrial Automation solu- initiatives may, starting in 2020, represent tions in 2019 with the use of electromechan- gains of more than R$ 40 million/year, a ical machines, software and specific equip- number that is expected to grow expo- ment to automate industrial processes. Two nentially as these solutions are scaled. Two programs stood out: solutions that stood out were: • Advanced Process Control (APC): use • Quality control: using laser sensors and of advanced control algorithms and advanced analytics, we collect and pro- equations of physical and chemical cess data from our plants that can help phenomena to simulate effects of in- predict product quality based on pre- dividual operations in our processes in vious production. This also helps when order to optimize the performance of making adjustments to plants, reduc- the industrial plants. Today, we have ing expenses and waste, in addition to APC systems installed in most of them, guaranteeing higher quality products. with annual benefits in excess of R$ 100 million. New investments are made • Predictive maintenance: using drones, each year and, in 2019, 12 new projects advanced analytics and mobile apps were implemented, highlighting the we have set a goal of using digital tools first application in Vinyls (MVC-BA) to monitor more than 7,000 pieces of and in the DCX cracker (Q4). equipment. With this, we managed to anticipate the likelihood of plant fail- • Energy Real Time Optimization (ERTO): ures and even avoid machine break- through mathematical models and re- downs, reducing unplanned downtime al-time simulation, we are optimizing and maintenance costs. the energy configuration of operations and reducing energy costs. The solution Although new technologies are an ex- was implemented in the Camaçari (Q1) citing topic, it is our Team Members who are crackers, with financial gains of about instrumental for the success of Braskem’s R$ 10 million per year, and in Triunfo digital transformation. Everyone has oppor- (Q2), where projections indicate that tunities to get involved in digital initiatives. we will have similar gains as of 2020. In In addition, our Digital Center is dedicated the coming years, the solution should to ensuring that everyone at Braskem ac- be expanded to other crackers in Brazil. < >47 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGEOGRAPHIC AND RAW MATERIAL DIVERSITY In order to expand our geographies and diversify the raw mate- rials we use in our operations, in 2019 we continued to build the new polypropylene plant in the United States - the sixth PP in- dustrial unit in the country. At the end of the year, nearly 85% of the plant - located in La Porte, Texas - had been completed and production is scheduled to start in 2020. With a total investment CONTINUOUS EVOLUTION To continuously capture new opportunities to use technology to advance our business and serve our Customers, the Digital of US$ 675 million, this will be the largest PP unit and the one with Center created a methodology called Push and Pull. greatest energy efficiency in North America, with an installed First, through the “Push” process, the team connects production capacity of 450,000 tons per year. Braskem to the most innovative technologies on the market In addition, we announced the completion of the Idesa Pet- and global megatrends, such as 3D printing, urban agriculture rochemical Plant, in Veracruz, Mexico. The US$ 5.2 billion project and clean energy. We do this through strategic partnerships increased our resin production by 1.05 million tons, reaching 8.7 with startup accelerators, venture capital and marketing intel- million tons of global production capacity. ligence companies, universities and more in order to drive inno- Another important point of the year was the increase in the vation from the outside. acquisition of naphtha via Braskem BV, proving our continuous Afterwards, the “Pull” process always starts off based on a effort to diversify our Supplier network, increasing the share of need - or pain - in the business. The goal is to drive innovation natural gas in our raw material matrix. from the inside out, using a tool called the “Innovation Sprint.” The Digital Center performs these sprints with different parts of the business to understand current pain points, examine how other industries approached similar challenges, establish priorities to overcome these challenges and create a roadmap for digital solutions. In 2019, the Digital Center conducted four sprints with dif- ferent areas, such as Polyolefins, Feedstock, Shared Services and Legal Department. During the more than 150 interviews with leaders and other important stakeholders, we identified 868 unique pain points, which resulted in 30 opportunities pri- oritized. These will now compose the digital transformation roadmap and guide future explorations. < >48 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDINNOVATIVE AND SUSTAINABLE SOLUTIONS KNOWLEDGE AT THE REACH OF EVERYONE EXPANDING THE PATHS OF THE CIRCULAR ECONOMY IDEAS AND PRODUCTS THAT CREATE VALUE < >49 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDWE FEATURED IN THE 2ND EDITION OF THE WHOW! DE INOVAÇÃO AWARD, WHICH RECOGNIZED BRASKEM AS THE MOST INNOVATIVE COMPANY IN THE CHEMICAL INDUSTRY To innovate is to search for new ways of operat- ing, to come up with bold solutions to everyday problems, to have the courage to dare and go beyond. This way of thinking and acting is in our essence. We are always willing to find different answers to the demands and expectations of our stakeholders, using technology to shape our business and improve people’s lives responsibly. Innovation is part of each of our Team Members. We insist on promoting the sharing of experiences, ideas and knowledge, because we believe that the combined efforts makes us a more agile, efficient, creative and competitive company, capable of making an important con- tribution to the development of a more con- scious and sustainable future. < > 50 IN JULY 2019, WE WERE RECOGNIZED AS ONE OF THE MOST INNOVATIVE COMPANIES IN THE OIL & GAS AND PETROCHEMICAL SECTOR IN THE 5TH EDITION OF THE VALOR INOVAÇÃO BRASIL AWARD, PROMOTED BY THE VALOR ECONÔMICO JOURNAL For us, innovation is directly associated with the de- velopment of solutions, products and processes that cause increasingly better environmental impacts and meet the needs of Customers and consumers. This ambition is connected with at least three of our macro-goals: development of solutions, renewable resources and post-consumption, and converges with our positioning within the circular economy and supports our initiatives in connection with the seven priority SDGs defined by the Company. DEVELOPING SOLUTIONS RENEWABLE RESOURCES POST-CONSUMER FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDTHE SCENARIO OF INNOVATION AT BRASKEM The focus on innovative solutions, products and processes is essen- tial to consolidate the business and guide our efforts towards building a chemical and petrochemical sector that looks to the future. For this reason, we constantly invest in training people, research, infrastructure and strategic partnerships. • 2 TECHNICAL CENTERS for polymers, one in Wesseling (Germany) and one in Coatzacoalcos (Mexico). • 2 TECHNOLOGY AND INNOVATION CENTERS, in Triunfo (Brazil) and Pittsburgh (USA) • 1 PROCESS TECHNOLOGY DEVELOPMENT CENTER, in Mauá (Brazil) • 1 RENEWABLE CHEMICALS RESEARCH CENTER in the city of Campinas (Brazil) • CHEMICAL AND MECHANICAL RECYCLING PLATFORM • 34 NEW PATENT APPLICATIONS AND 152 EXTENSIONS • 282 PATENTS GRANTED • 6 NEW GRADES OF RECYCLED PRODUCTS added to the portfolio in 2019 • 513 CLIENTS received support from the Technology and Innovation Center in Brazil (over 50,000 analyses carried out) • 57 CUSTOMERS received support from the Technology Center in the United States (close to 16,000 analyses) < >51 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDKNOWLEDGE AT THE REACH OF EVERYONE In January 2018, we started a project to develop a solution that would allow for efficient and comprehensive management and sharing of knowledge • Collaborative problem solving: we had low performance on a piece of equipment and, on a discussion on KHub, Team Members shared at Braskem. In addition to a new organizational structure dedicated to this experiences that validated the strategy built by the responsible team. subject, we created an online platform for knowledge sharing: the Knowl- edge Hub, which integrates documents available in different systems and knowledge sources currently used in the organization. • Generating connections: we had conversations between Team Members seeking information on the Oil & Gas market on KHub. The Through this platform, which allows us to be an even more agile, efficient, shared information and external connections made available by the collaborative and competitive organization, our Team Members can share professionals helped to better understand the scenario and to identi- and find content and colleagues with specific knowledge to guide them when fy new opportunities to develop applications. necessary. In addition, the tool drives great sharing of experiences and gen- erates opportunities for the co-creation of solutions in discussion forums, benefiting the internationalization of knowledge and addressing the gaps in • Information management: the Innovation and Technology Laboratory in Triunfo (RS) needed a control system with a history of requests for sam- order to increase individual and collective productivity of our Team Members. ple quality analysis. To this end, a digital dashboard with access via KHub Launched in March 2019, the platform has 2,277 active users, 99% of was developed. In total, since 2007, there have been around 464,000 re- whom are involved. On the platform, Team Members are the leading players quests for analysis to handle complaints and customer support, innova- and, in 2019, we recorded stories of success, among them: tion projects, product development and support for industrial plants. < >52 KNOWLEDGE HUB IN 2019* 2,227 ACTIVE USERS 29,930 NUMBER OF QUERIES 25 96% ORGANIZATIONAL UNITS INVOLVED NUMBER OF QUESTIONS ANSWERED: 306 2,253 USERS INVOLVED LOCATED IN 8 COUNTRIES (BRAZIL, ARGENTINA, PERU, MEXICO, UNITED STATES, GERMANY, THE NETHERLANDS AND SINGAPORE) * The reporting period runs from 2/25/2019 to 12/31/2019 195 NUMBER OF DEBATES INITIATED FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGLOBALIZATION OF PRACTICES Braskem has a structured management process for guiding doc- umentation, through which decisions, rules and fundamental guidelines are described, registered and disseminated to guide the work of Team Members in the Company. The Guiding Documentation Library (BDO) is a tool used by the Knowledge Management team to manage internal documentation. Robust and secure, it currently stores close to 20,000 documents to support business units in Brazil, USA and Europe, which can be ac- cessed at any time. Among them, 130 are global, which favors the strengthening and global standardization of our practices. In 2019, we also created and revised policies, guidelines, pro- cedures and work instructions. In all, almost 1,000 documents were published and 2,500 revised, ensuring that our practices are up to date and globally aligned. CRITICAL KNOWLEDGE: A RESPONSIBILITY OF ALL Critical knowledge is the most relevant knowledge to allow the or- ganizational process to successfully fulfill its ambitions in the com- ing years. Among them, there are those who are critical organiza- tional knowledge because they impact the company’s strategy. Each organizational process must manage its critical knowl- edge in order to identify them and map the respective knowledge holders, the type of content already encoded and their reposito- < >53 ries, in addition to preparing an action plan to address their gaps. To address this issue, we developed a single re- decisions. These Committees evaluate usability, In 2019, we managed the critical knowledge of 68% of the or- pository and a mobile app to facilitate the registra- overlap and quality of the content of the external ganizational processes based on a self-assessment of focal points tion of opportunities for improvements and best information acquired. and knowledge holders. Among the identified gaps, we highlight practices from Shutdowns, in addition to the initial The improvement in governance coupled with the lack of registration and sharing of tacit knowledge (acquired in use of the application of BIM 4D technology (Build- trade negotiations and the reduction of taxes practice), including during Maintenance Shutdowns. ing Information Modeling) in the project success- withheld allowed savings of approximately R$ 1.5 IN 2019, WE MANAGED THE CRITICAL KNOWLEDGE OF 68% OF THE ORGANIZATIONAL PROCESSES BASED ON A SELF- ASSESSMENT OF FOCAL POINTS AND KNOWLEDGE HOLDERS. fully executed to extend the period of future inter- million, a reduction of 9.87% in 2019 subscription ventions in the primary cracker tower (from 6 to 9 costs (compared to budget). years), an important milestone for the project to ex- For the exponential dissemination of external tend the campaign of the Crackers. information bases, we created the Virtual Library OPTIMIZATION OF EXTERNAL INFORMATION In 2019, we created Global Committees to Manage (repository of abstracts of subscription of external information acquired by Braskem) and disclosed it on KHub, reaching 152 Team Members who accessed it 624 times during the year. Based on these results, External Information to optimize the external infor- we understand the importance of including and in- mation acquired by Braskem to support strategic tegrating ever more information to KHub. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDEXPANDING THE PATHS OF THE CIRCULAR ECONOMY _103-2, 103-3_ Investing in innovation and sustainability has been an inte- gral part of our business strategy. But the desire to consis- tently contribute to sustainable development has led us to assume a public commitment to the topic: our positioning within the Circular Economy. Unlike the linear economy, a concept based on the disposal of products as waste without going through the recovery and the recycling process, the circular sys- tem proposes a continuous reuse and recycling pro- cess, transforming waste into raw material to create new products, in addition to a more efficient process with fewer negative impacts, using renewable raw materials and with greater energy efficiency. Following this precept, we have defined eight main goals to guide our actions, including partnerships with Customers to develop new products and investments in education and support for innovation - both in terms of technologies and products and of business models and systems for collection, sorting, recycling, recovery of ma- terials and consumer engagement. We also set a goal to reduce the loss of pellets (mil- limetric granules of raw material that can disperse and reach the environment) in our industrial units by 2020 and we have made industry commitments to reuse, re- cycle or recover 100% of plastic packaging by 2040. < >54 COMMITMENT TO CIRCULAR ECONOMY To support the development and achievement of our Circular Economy goals, we’ve developed eight key points: 1. Work with customers and the value chain to design new products to increase efficiency, re- cycling and reuse. 2. Invest in the development of new renew- able products in order to support the circular economy at the beginning of the value chain. 3. Develop new technologies, business mod- els and systems to improve the recycling and material recovery chain. 4. Encourage consumer engagement in recycling and recovery programs, using education to pro- mote the value of plastic waste to the economy. 5. Use scientific tools, such as LCA, to choose the option with the best economic, social and en- vironmental impact. 6. Measure and inform recycling and recovery rates for plastic packaging materials. 7. Support partnerships aimed at understand- ing, preventing and solving poor plastic waste management, especially the problem of trash in the oceans. Find out more about our Circular Economy Manifesto at www.braskem.com.br/ economiacircular. 8. Support public policies to improve waste management and the recycling chain, espe- cially plastic waste. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDRECYCLABLE INSOLE FOR TENNIS SHOES In August 2019, the one-year anniversary of our I’m greenTM Green EVA (eth- ylene-vinyl acetate copolymer made from sugarcane), we announced its use in the production of insoles for children’s sneakers by Brazilian footwear mak- er Tnin Shoes, a brand that uses recycled raw materials, such as textile trim- mings and PET bottles, in its production. With our renewable EVA, the compa- ny guarantees a reduction in the use of resources and its carbon footprint, in addition to greater safety, resistance, quality and product useful life. Further- ing its efforts in sustainability, the shoes use water-based glue. BOTTLES IN GREEN PLASTIC In March 2019, Dutch water company Join The Pipe started dis- FOCUS ON CIRCULARITY Our green ethylene plant, which will celebrate 10 years in operation in 2020, has helped us focus on a more dedicated and oriented manner towards creating a sustainable portfolio. Since then, our flagship product has been the green polyethylene produced from sugarcane ethanol, presented un- der the I’m greenTM brand and used worldwide. In 2019, we decided to expand our efforts and announced the expansion of the brand to cover tribution of sustainable and reusable water bottles in the United not only entirely renewable solutions, but the en- tire product line with a circular economy approach: products made from recycled content and the mix between renewable and recycled . The official launch was in October during the K Fair, the world’s largest event in the plastics and rubber sector, in Düssel- dorf, Germany. Consumers can identify products using Green Plastic through the I’m greenTM . In addition, during Feiplastic 2019, the largest Latin American plastics fair, we presented two new renewable grades of polypropylene: CG 600NA polypropylene, which has greater rigidity and can be used to produce more resistant buckets with thinner walls, maintaining the high stacking capaci- ty; and CG 220NA Polypropylene, also intended for application in impact-resistant industrial buckets. The new grades can also be used in food packaging that requires low transfer of odor and flavor. < >55 States and in countries in Africa and Europe. The bottles are made with Green Plastic I’m greenTM and the income generated from their sale will go to more than 300 social projects in developing countries - most of them in Africa and Asia - intended to address the prob- lem of plastic waste. PARTNERSHIP IN PACKAGING Expanding the list of the more than 150 companies that use our Green Plastic I’m greenTM, we established a partnership, in 2019, with Atlhetica Nutrition, which provides sports food supplements. The agreement provides for the application of renewable polyethylene in the packaging of the products of a new line, Best Vegan, a vegan protein marketed in Brazil and other Latin American countries such as Paraguay, Ecuador, Peru and Chile, in addition to Mexico and China. We also entered into a partnership to use recycled resin in Tramontina chairs, maintaining the same quality, design and beauty, using material origi- nating from post-consumption of Braskem’s big bags. Another partnership signed in 2019 was with the company Biowash, which develops natural and 100% biodegradable cleaning products. The agreement involves the production of packaging for 1 and 5-liter products from the mix- ture of renewable plastic I’m greenTM and post-consumer resins (PCR). FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDVALUING RECYCLING To drive projects related to recycling and circular economy of plas- HOW DOES CHEMICAL RECYCLING WORK? The chemical recycling process chemically transforms plastic waste into products of tic, in 2017 we created the Circular Economy area in South America, greater value added, such as fuels, raw materials and even final products from the which was expanded in 2019 in North America, Europe and Asia. chemical industry. The technologies are still being developed, but they represent an The area is responsible for developing businesses, products and important path for the circular economy and more sustainable production. processes that value post-consumer waste, involving all links in the plastic recycling chain, as well as actions to leverage the circularity of plastic materials. One of the focuses of this work is the search for new tech- nologies, going beyond mechanical recycling, such as chemical recycling, an important solution for plastic waste that is not me- chanically recycled, because it makes it possible to process and transform the waste that can then be used to generate to other chemicals, closing the cycle of the circular economy of plastics. The chemical recycling process is a project under develop- ment, but it is already showing important advances, with partner- ships signed with COPPE/UFRJ (Instituto Alberto Luiz Coimbra de Pós-Graduação e Pesquisa de Engenharia of the Rio de Janei- ro Federal University e SENAI’s institute of Biosynthetics Innova- tion (SENAI CETIQT). In addition, we expect to carry out industrial scale tests with post-consumer plastics at plant 2 of Q2, Chem- icals unit in Triunfo (RS), in 2020. The laboratory results show the feasibility of transforming recyclable plastic waste into raw ma- terial for the production of new chemicals and polymers. OIL AND GAS PETROCHEMICAL X% raw material Y% raw material X% conventional resins Y% recycled resins CHEMICAL RECYCLING TRANSFORMERS < >56 WASTE MANAGEMENT PLASTIC MATERIALS FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDRECYCLING IN SPACE In November 2019, a plastic recycler was launched into space as a result of our partnership with Made In Space - a U.S. company that develops, for NASA, technologies to operate in zero gravity. This initiative, the first commercial plastic recycling operation in the his- tory of space missions, is part of our Circular Economy strategy and rep- resents another stage of the “Printing the Future” project, which in 2016 took to the International Space Station a 3D printer using Braskem’s I’m greenTM Green Plastic for the production of parts in space. With the machine, astro- nauts could transform the plastic waste generated at the station into raw material with which new items can be created. PLASTICS UNDER TRANSFORMATION In order to contribute to the growth of plastic transformation, since 2013 we have been working in partnership with ABIPLAST (Brazilian Plastics Industry Association) in the development of PICPlast (Plastics Chain Incentive Plan). The initiative has two main fronts: 1. Competitiveness and Innovation: responsible for the training offered to transformation companies so that they can improve their products, pro- cesses and solutions. In 2019, actions were held focusing on Innovation (Rio Grande do Sul, with 14 companies), Productivity (São Paulo, with 10 companies) and 5S (Goiás and São Paulo, with 11 companies), in addition to technical seminars on topics such as Sales and Competitiveness, Com- pliance, LCA, among others. We also participated in the Agrishow fair, in Ribeirão Preto (SP), exhibiting 25 applications from 19 companies. 2. Plastic Transformation Movement: seeks to show the importance of plastics in the lives of people. Within this program, several projects were developed in 2019. The highlights were: • PlastCoLab: interactive space that presents, in a playful way, relevant information about plastics, its production chain, the different uses and how the responsible handling of this material combined with innova- tion and technology can transform the future. In 2019, PlastCoLab was held in Salvador (BA), São Paulo (SP) and Brasília (DF) and gathered more than 40,000 visitors. < >57 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD• KidZania: between January and December, the KidZania theme park, in São Paulo (SP), received the Plastico Transforma Station. In all, more than 17,000 children visited the installation. The main goal was to inform and educate, in a fun way, about the importance of correct disposal of plastics. • São Silvestre: in partnership with Yescom, Fundação Cásper Líbero and Gazeta Esportiva, we promoted the collection, recycling and transforma- tion of plastic cups of mineral water consumed by the runners of the 95th International São Silvestre Street Race. The 500,000 plastic cups con- sumed during the race will be turned into waste bins for selective sorting, which will be donated to different schools and institutions. BRASKEM PROJECTS FOR PLASTIC TRANSFORMATION In addition to partnership projects, we also develop solutions for the transformation of plastic with our own investment. • Recycled cups: Through a partnership with Heineken and Natura, we in- vested in yet another Circular Economy action - the recycling of plastic cups consumed during a major music festival in Rio de Janeiro. In total, the action in the event that lasted seven days and attracted an audience of 700,000 people, resulted in the collection of 10 tons of disposable cups, which will be transformed into resin to be used in the production of more than 650,000 caps of Deo Body Spray, Humor. • Reverse Logistics: The program guides and encourages companies to properly dispose of used plastic cups. The initiative is a partnership be- tween Braskem and Dinâmica Ambiental, with supporters such as Copo- bras, Altacoppo and Jaguar. The cups are collected and transformed into new products, such as caps for cosmetics and domestic utensils. A total of 3.6 tons of plastic have already been collected, corresponding to approxi- mately 2.2 million cups. • Reverse packaging logistics: the initiative encourages Customers to re- turn resin packaging for Braskem to reprocess and transform into recycled resins. Thus, we aim to foster the circular economy alongside Customers and society and support recyclers and the value chain. < >58 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDSUSTAINABLE PITCH AT THE OLYMPIC GAMES The grass hockey competitions in the Tokyo Olym- pic Games will be held on a sustainable lawn called Poligras Tokyo GT (Green Technology). The mate- rial has 60% of the filaments produced using our renewable polyethylene technology I’m greenTM, obtained from sugarcane ethanol. The product is part of the strategy of the organi- zation of the Tokyo Games, which will be the first car- bon neutral edition in history. The solution uses 66% less water than traditional fields and the choice of the I’m greenTM Green Plastic was made to add a sustaina- ble dimension to the synthetic grass field. 1 KG OF GREEN POLYETHYLENE PREVENTS THE EMISSION OF ALMOST 5 KG OF CO2 IDEAS AND PRODUCTS THAT CREATE VALUE Innovation, sustainability and challenges. Driven by these three keywords and motivated to meet different demands, in 2010 we started the Dormentes project, which becomes increasingly consolidated, expanding our borders and leading us to the creation of new businesses. The initiative was born out of a need in the railway market for ties - structural parts used on the track to ensure support for the train tracks - produced with more accessible raw materials than hardwood. We ac- cepted the challenge developing, from scratch, an efficient and reliable SUPPORT FOR PARA ATHLETICS We have been sponsors of the Brazilian Para Athletics team since 2015. In addition to support- solution using virgin plastic. ing athletes in their development and technical preparation for competitions, such as the Tokyo In 2019, we obtained technical approval of our product at MRS, which man- Paralympics, we invest in innovation: the prostheses used in sports activities are made of plas- ages and operates one of the main railway networks in Brazil that crosses the tic, an application that makes them lighter and more comfortable, allowing athletes to achieve states of Minas Gerais, Rio de Janeiro and São Paulo. Products are also being maximum performance. The sponsorship supports more than 40 athletes who are part of the tested at Rumo and VLI. Also in 2019, patents were granted in Japan and South Brazilian national Para Athletics team in track and field competitions. Africa. In 2020, efforts are already focused on validating the technology in or- der to scale production. For the coming years, the goal is to increase the use of the product as a solution that delivers the best value option for our customers. In order to diversify our specialty chemicals portfolio, in 2019 we launched BRASKEM AND AMERICAN FOOTBALL 2019 was our second year of a partnership with the Philadelphia Eagles football team. The two important solvents: HE-70S and Hexane RC. In line with the search for contract involves the collection and recycling of bottle caps and other plastic products con- sustainable solutions, HE-70S is our first oxygenated solvent, from renewable sumed both at the Lincoln Financial Field stadium and at the team’s training center, which is sources (produced from sugarcane ethanol) and with low carbon emission. located in the state of Pennsylvania, USA. In addition, we developed an educational project Its properties allow it to be used in segments such as paints, thinners and presented at all public schools in the region to promote career opportunities in science, tech- adhesives. In Europe and the United States, the solution has been expanding nology, engineering and mathematics. our market, being used in the pharmaceuticals industry. Hexane RC is our first recycled hydrocarbon solvent, a product that re- inforces our commitment to the circular economy. The solution was devel- oped from byproducts generated in the production of polyethylene and, be- 2019 RESULTS We also started a partnership with another North American soccer team: the Philadelphia fore being delivered to the market, undergoes a treatment process to acquire greater purity and guarantee quality, safety and good performance, closing Union, which is part of Major League Soccer (MLS). Due to the recycling program, all cups and lids sold at the Talen Energy Stadium in Chester, Pennsylvania, will be made exclusively of the production chain internally. polypropylene, which facilitates the segregation of materials. < >59 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDDESIGN CHALLENGE In partnership with Colgate-Palmolive and Kimber- ly-Clark, in 2019 we held the 7th edition of our Design Challenge, which instigated the creativity of Design, Architecture and Engineering students to develop solutions considering the Design concept for the Envi- LIFE CYCLE ASSESSMENT Monitoring and reducing environmental impacts conducted the Plastic Leak Project study in partner- ronment. Using an innovative format, there were three generated by our businesses is a fundamental part ship with the international consulting firm Quantis, different days of hackathons and more than 30 hours of our strategy. For this reason, we assess the life which led a coalition of 20 organizations to develop of work with students from four universities in São cycle of products considering the entire value chain, a methodology to determine the volume of poorly Paulo who needed to rethink the sustainability of the from the extraction of raw materials to disposal, managed plastic waste, which can impact land and, brands’ toothpaste and toilet paper packaging taking verifying the benefits that our solutions can bring to especially, marine ecosystems. In this project, a into account the product life cycle assessment. sustainable development. general methodological guide was developed, three The winning group presented a refill tube design Throughout 2019, we completed 20 life cycle industry methodological guides for packaging, tex- for toothpaste and a packaging based on our Green assessment studies. From 2006 to 2019, a total tiles and tires, and two case studies. Plastic. The idea presented by the students encour- of 146 studies were conducted, of which 84 were In addition, we continue with a strong participa- ages proper disposal, stimulating circular economy, in completed, 17 reviewed and 45 simplified. tion in the Brazilian Business Network for Life Cycle addition to using raw material from renewable sourc- One of the highlights of the year was the study Assessment, which in 2019 became a member of the es in production, which could reduce the environ- on anti-glare devices, published in the academic Life Cycle Initiative (UNEP/SETAC), an international mental impact of product packaging by up to 78%. magazine Journal of Cleaner Production. We also LCA organization. RESULTS OF THE DESIGN CHALLENGE IN 7 EDITIONS 440+ STUDENTS REGISTERED 150+ STUDENTS TRAINED < > 60 10 PARTNER UNIVERSITIES 20% OF PARTICIPATING STUDENTS LEAVE THE PROJECT DIRECTLY TO THE JOB MARKET FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDBRASKEM LABS Braskem Labs is an entrepreneurship platform developed by Braskem in 2015 to sup- port startups with innovative solutions that use chemicals and/or plastic to create a positive impact on society or the environment. The acceleration programs are focused on different stages of development as a way to promote the entrepreneurial ecosys- tem and strengthen the relevance of our value chain to sustainability through concrete solutions. In 2019, Braskem Labs continued to strengthen its relationship with entrepre- neurs whose projects bring positive social and environmental contributions with prod- ucts from the chemicals or plastics chain, accelerating 22 startups that operate in sec- tors such as water, recycling, health, agriculture and energy. There are two acceleration programs: Scale, which is dedicated to startups in the trac- tion and scale phase, in other words, operational, with customers and revenues; and Igni- tion, which aims to support business at an early stage, still developing its business model. RESULTS IN 2019 Scale 12 20+ ACCELERATED STARTUPS BUSINESS CONNECTIONS MADE Ignition 10 STARTUPS ACCELERATED < >61 25% OF STARTUPS ARE NEGOTIATING PARTNERSHIPS WITH BRASKEM 50+ BRASKEM LEADERS AND MEMBERS PARTICIPATED IN THE PROGRAM 40% OF THE STARTUPS MANAGED TO DEVELOP AN MVP THROUGH THE PROGRAM 30+ CONNECTIONS WITH POTENTIAL CUSTOMERS FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDVALUE CREATION TEAM MEMBERS COMMUNITIES CUSTOMERS SUPPLIERS GOVERNMENT < >62 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDTEAM MEMBERS _103-2, 103-3, 404-2, 405-1_ As a people-oriented company, we constantly seek to develop the potential of all Team Members, in addition to devising strategies to improve the work environment, creating op- portunities for people to grow professionally and personally. Throughout 2019, we put in place several Integration, Development and Training pro- grams, in addition to initiatives to prepare and train Leaders. Diversity & Inclusion issues were considered on all project fronts and we encourage the creation of a digital mindset in all deliverables in the People & Organization area. Within our Value Proposition called BeUx, which presents new possibilities for the de- velopment and learning of Team Members and their workplace experience, we finalized the new layout of the five floors of the corporate office in São Paulo (SP) and we opened a lounge area for Team Members at the Camaçari plant (BA). In 2019, we celebrated five years of our Diversity and Inclusion Program and, in cele- bration, we launched a video manifesto about our work purpose regarding this topic. The purpose of the program is to generate a more diverse, representative and inclusive work environment, to make Braskem recognized as an inclusive company and collaborate to building a society that respects and values diversity and inclusion. < >63 IN 2019, WE WERE FEATURED IN THE CHEMICAL AND PETROCHEMICAL CATEGORY OF THE GUIA EXAME DE DIVERSIDADE, THE MAGAZINE’S FIRST PUBLICATION CREATED TO RECOGNIZE COMPANIES THAT WORK FOR GENDER AND RACIAL EQUALITY, INCLUSION OF PEOPLE WITH DISABILITIES AND PROMOTION OF LGBTI+ RIGHTS Our strategy for sustainable development considers meeting the needs of all stakeholders today and in the future. We base all of our actions - from business activities, to operational and management process- es, services, investments, relationships and products - on this strategy, and in an integrated manner with the planning of the several areas of Braskem. HEALTH & SAFETY STRENGTHENING PRACTICES LOCAL DEVELOPMENT FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDIn Brazil, we reached 30% of women in leadership positions and made some changes to the University Internship Program, which included blind résumés and monitoring the percentage by race and ethnicity, gender identity and disability at each stage of the selec- tion process. We also worked to attract black university students to the University Internship Program, and promoted, in São Paulo and Salvador, the first edition of the Braskem Meeting of Black University Students and Career, in which students had the opportunity to talk to black Braskem Team Members about the different professions with- in the organization and career development challenges. Both events attracted more than 800 subscribers and 150 participants. We also completed the training of leaders on the topic, total- ing 627 leaders trained in classroom on diversity, inclusion, minority groups, privileges and on their role in the day-to-day work in order to have more diverse and inclusive teams. In the month of LGBTQIA+ Pride, we launched a video internally and externally to provide support and visibility to this population. We were also present at the 23rd LGBTQIA+ Pride Parade in São Paulo with Team Members of our LGBTQIA+ Affinity Network. In the United States, 80% of leaders and Team Members were trained and celebrated these important dates through communi- cations and events. In Mexico, 2019 was the first year of the Diver- sity and Inclusion Program in which a survey was conducted with all leaders and members on the topic that generated inputs for build- ing a strategy for the next steps. < >64 WE WON BRONZE IN THE UN WOMEN WEPS AWARD, WHICH RECOGNIZES BEST PRACTICES IN PROMOTING GENDER EQUALITY, AND WERE RECOGNIZED BY THE WILL (WOMEN IN LEADERSHIP LATIN AMERICA) AWARD AS THE BEST BRAZILIAN COMPANY IN THE DEVELOPMENT OF ACTIONS TO ENHANCE REPRESENTATIVENESS AND INCLUSION OF WOMEN IN LEADERSHIP POSITIONS. WHO WE ARE TOTAL NUMBER OF TEAM MEMBERS (WORLDWIDE) 2017 6,010 1,703 7,713 2018 6,176 1,832 8,008 2019 6,121 1,819 7,940 TOTAL TOTAL NUMBER OF TEAM MEMBERS (WORLDWIDE) 2017 2018 2019 22% 23% 23% in leadership positions 25% 27% 30% Blacks* 29% 30% 30% Blacks in leadership positions* 12% 13% 13% Note: Braskem does not yet have specific indicators for PwD and LGBTQIA+ * Indicator considered only in Brazil FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDPROFESSIONAL CATEGORY AGE GROUP TOTAL NUMBER OF TEAM MEMBERS (INCLUDES EXPATRIATES WORKING AT THE SITE AND EXCLUDES INTERNS) % OF TEAM MEMBERS MEN WOMEN TOTAL MEN WOMEN Operational/technical Administration Leaderships (Grades from 3 to 14 who have direct reports) TOTAL <=30 31-50 >=51 Total <=30 31-50 >=51 Total <=30 31-50 >=51 Total <=30 31-50 >=51 Total 817 2,747 1,093 4,657 223 493 156 872 12 429 151 592 1,052 3,669 1,400 6,121 209 359 38 606 296 571 94 961 16 209 27 252 521 1,139 159 1,819 1,026 3,106 1,131 5,263 519 1,064 250 1,833 28 638 178 844 1,573 4,808 1,559 7,940 80% 88% 97% 88% 43% 46% 62% 20% 12% 3% 12% 57% 54% 38% 47.6% 52.4% 43% 67% 85% 70% 67% 76% 90% 77% 57% 33% 15% 30% 33% 24% 10% 23% Note: Braskem does not yet have specific indicators for PwD and LGBTQIA+ * Indicator considered only in Brazil < >65 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD_102-8_ Brazil United States Germany Mexico COUNTRY EMPLOYMENT TYPE MEN 4,674 613 120 637 43 20 WOMEN PERMANENT MEN WOMEN TEMPORARY TOTAL 1,358 6,032 146 76 193 18 14 759 196 830 61 34 7,912 7 0 6 0 1 0 14 11 0 0 0 3 0 14 18 0 6 0 4 0 28 6,050 759 202 830 65 34 7,940 International Offices The Netherlands Other countries Total 6,107 1,805 < >66 _102-8_ COUNTRY Brazil United States Germany Mexico International Offices The Netherlands Other countries Total EMPLOYMENT TYPE MEN 4,676 613 121 637 44 20 6,111 WOMEN FULL TIME MEN WOMEN PART TIME TOTAL 1,365 6,041 144 70 193 21 14 757 191 830 65 34 1,807 7,918 5 0 5 0 0 0 10 4 2 6 0 0 0 12 9 2 11 0 0 0 22 6,050 759 202 830 65 34 7,940 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDRATIOS OF STANDARD ENTRY LEVEL WAGE BY GENDER COMPARED TO LOCAL MINIMUM WAGE * _ 202-1_ _103-2, 103-3_ The Team Members database is built from the corporate consolidation, in spreadsheet format, of the information extracted from each people man- agement system in the countries in which we operate - United States, Mexi- co, Brazil (data from Latin America) and Germany ( Europe data), emphasiz- ing that all data are validated during the generation process and subsequently Alagoas Bahia there is a final approval with all focal points of the localities involved for re- Brazil** Rio de Janeiro lease in the annual report. Braskem outsources some activities, services or part of them, which sup- port the essential activities of the Business, such as: information technology, product logistics, property security, food services, specific technical consul- tancy, some industrial maintenance activities, among others. Rio Grande do Sul São Paulo United States Germany Mexico 2017 2018 2019 1.5 1.6 2.1 1.8 1.7 3.1 2.0 3.6 1.5 1.6 2.1 1.8 1.7 3.5 2.1 3.3 1.6 1.6 2.2 1.8 1.7 3.5 2.0 3.4 PROPORTION OF SENIOR MANAGEMENT HIRED FROM THE LOCAL COMMUNITY _ 202-2_ 2017 2018 2019 Brazil United States Germany Mexico International offices Grand Total 56% N/A 67% 29% 0% 51% 58% N/A 75% 28% 10.5% 53% 57% N/A 64% 26% 9.1% 51% * The calculation method used considers the lowest salary paid by Braskem using the Hay table (a table of salaries and wages established by Braskem) valid until December/2019 using 85% of the range in Brazil and Mexico (lowest per- centage 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 to the local minimum wage established through local bargaining agreements, for Brazil, and the local minimum wage for non-unionized Team Mem- bers. At all locations, Braskem offers Team Members salaries above the minimum wage in the region. **Without interns VOLUNTARY TERMINATION RATE _103-2, 103-3, 401-1_ Some reasons for dismissal are related to opportunities for movement in the market or when there is a need for the Team Member to accompany their family, due to mobility. Regardless of gender, some dismissal requests are associated with the search for new challenges, career devel- opment, entrepreneurship, academic activities and others, with less impact, due to retirement. In some regions where we operate, economic growth was above the others, reinforcing the market warming and justifying some reasons presented. * Team Members of senior management are Team Members from grades 3 to 10 who have direct reports (Managers, Directors, Vice Presidents, and President). To calculate the number of lead- ers 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 legal reasons). This indicator is mon- itored for all countries where Braskem operates, for those with industrial units and those with commercial offices only. 2017 2018 2019 Men Women Overall Men Women Overall Men Women Overall 1.5% 2.2% 1.7% 1.8% 2.6% 2.0% 2.1% 3.9% 2.5% < >67 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDONCE AGAIN, WE WERE CHOSEN AS ONE OF THE BEST COMPANIES TO START A CAREER BY VOCÊ S/A DEVELOPING TALENT _103-2, 103-3, 404-2_ In 2019, we began to redesign our operational model of the People & Organization area to turn it into a content and training application factory, unifying the portfolio of courses, which provides budget gains and better experience for Team Members. In addition to training 627 leaders through classroom courses across the country, we defined actions intended to prepare and train Leaders and offered distance learn- ing programs in three environments: Self-Development Portal, LMS Platform, and Technical Development Platform. We also focused on BeUx initiatives, such as New Career Philosophy (BR/USA), Insight (Global), Boomerang (Global), New Layout (BR/MX) and Health/Wellness (MX/ USA). In addition, we created a program to explain the possibilities and challenges in career development and restructured the language teaching model. Another initiative part of BeUx was the new Recruitment and Selection tool, Gupy, giving more transparency to the selection processes, in compliance with the General Data Protection Law - all of this in a system that helps match the right person with the company. right spot. This platform considered the importance of increasing the diversity of Team Members and reducing the negative impact of unconscious bias in the selection of candidates. For new talent in Brazil, we launched a more modern and attractive campaign, fo- cused on promoting our University Internship Program and Technical Internship Pro- gram. It should be noted that, in order to make the selection process more inclusive, actions were taken to target black students, which generated 42% of registrations by candidates who self-reported being black/brown in the University Internship Program. MORE ATTRACTION University Internship Program: 25,084 applications Technical Internship Program: 8,937 applications < >68 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDFor our Operator Training program we hired 71 in- terns and 56 trainees, supporting our strategy of re- THE ROLE OF LEADERS AND PERFORMANCE MANAGEMENT AT BRASKEM newing the industrial team. We have also adopted a new evaluation tool in the selection process for operators: _404-3_ With the rapid changes in working models, we under- TRADE UNION RELATIONS _102-41_ Unions are the legal representatives of our Team Mem- bers. For this reason, we have a relationship of dialogue through artificial intelligence and machine learning, the stand the need to evolve our internal culture, reflect and understanding with them to solve any possible la- tool optimizes the process and ensures a hiring process on the role of leaders and review the performance bor and union conflicts. In Brazil, all collective bargain- in line with human safety and reliability standards. evaluation model. Thus, we put together seminars ing negotiations are conducted directly by Braskem In Mexico, we hired 75 interns, six of whom were for senior leaders intended to reflect and discuss the Brazil’s Labor Relations team or through Employers’ hired in 2019 for positions in industrial and support areas evolution of the role of leaders at Braskem, with the Unions, always with the support and participation of such as analysts and technicians. In the United States, development of a competence model based on the the company’s internal team. as part of the integration process with the company, Self-knowledge, People Management and Business In the case of expatriates working in Brazil, em- 113 new Team Members took part in Culture Integration Management dimensions. ployment contracts are also bound to collective labor Training and seven associates initiated their career at Among the BeUx actions intended to improve the agreements/conventions. Apprentices from São Paulo the company. As part of the planning for the kick-off of experience of Team Members at Braskem and as a re- (offices, ABC and Paulínia) have a salary linked to the the Delta project, 22 new operators were certified. sult of the dialogue with our Team Members, we re- CCT (Collective Labor Convention). In all, we invested R$ 29.9 million in training 7,652 viewed the performance evaluation model. As of 2020, In regard to Team Members abroad: in the United Team Members worldwide throughout 2019. we have more possibilities for collaboration, integration, States, only a few hourly Team Members from the Neal Technology training: our Team Members are an es- clarity and new ways of setting goals that are in line with factory are covered by collective agreements. In Ger- sential part of the success of the digital transformation the company’s strategy and the potential for individu- many, none of the plants have had an agreement since project. Therefore, the Digital Center strives to provide al and collective development. The model strengthens 2014, since the country does not offer this option for training so everyone can acquire digital skills. In 2019, meritocracy, encourages engagement between teams the chemicals and petrochemicals category. In relation more than 1,000 Team Members were trained around and the development of Team Members, reinforcing to Mexico, only unionized Team Members of the oper- the world in tools such as Agile Methodology, Design the connection between the search for results and the ation are covered by collective bargaining agreements. Thinking and Data Science. career aspirations of each one. BRAZIL USA GERMANY MEXICO INTERNATIONAL OFFICES TOTAL Team Members covered by collective bargaining agreements 5,995 60 0 346 < >69 Total number of Team Members1 6,050 759 202 830 0 99 6,401 7,940 % Team Members covered by collective bargaining agreements 1 Without interns 99.1% 7.9% 0.0% 41.7% 0.0% 80.6% It should be pointed out that, in all countries, mem- bership and the choice of entities is a free option for Team Members. IN 2019, WE WERE LISTED AMONG “THE 50 BEST PLACES TO WORK - CHOICE OF PROFESSIONALS” BY THE PORTAL GLASSDOOR, ONE OF THE MAIN RECRUITMENT SITES IN THE WORLD FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDCOMMUNITIES _103-2, 103-3, 203-1, 413-1_ All of our operations have actions to engage with the Community. Our Private Social Investment (ISP)2 strategy is driven by three pri- ority causes: consumption, sustainable post-consumption and cir- cular economy; sustainable innovation and entrepreneurship; and Direct Beneficiaries 2018 199,281 local development. In order to be included in our ISPs, projects must fulfill three important objectives: expand the positive social and en- vironmental impact, promote the company as a provider of sustain- able solutions and establish trusting relationships with communities and other stakeholders. Throughout 2019, more than 530,000 people were direct- ly benefited in the various areas where we operate. All local and global actions were conceived to positively impact the communi- ty and the environment. 2 Private Social Investment is the voluntary, planned, monitored and evaluated use of Braskem’s private resources to carry out public interest initiatives, guided by the company’s strategy and by a participatory action by the community, govern- ment and other companies. Number of ISP Projects 32 (28 BR, 4 MX) Number of Donation Projects 53 (1 EUR, 27 BR, 13 U.S. and 12 MX) 75 (3 EUR, 21 BR, 42 U.S. and 9 MX) Sorted waste (Kg) 31,968 (Ser + Realizador) Plastic waste collected and repurposed (ton) 28 (Plastianguis) Students benefited Teachers benefited Schools benefited Donated items 5,388 2,095 523 32,010 28,120 71.68 35,066 2,347 858 54,198 2019 533,447 101 < > 70 GLOBAL INVESTMENT SCENARIO (ISP + DONATIONS) REGION BRAZIL USA* MEXICO EUROPE TOTAL INVESTMENT 2018 INVESTMENT 2019 NUMBER OF PROJECTS 2018 NUMBER OF PROJECTS 2019 BENEFICIARIES 2018 BENEFICIARIES 2019 R$ 19,673,614 R$ 24,668,302.04 R$ 226,846 R$ 2,578,121.92 R$ 964,766 R$ 74,694.97 R$ 2,160 R$ 10,902.30 R$ 20,867,386 R$ 27,332,021.22 55 13 16 1 85 47 42 9 3 101 191,781 2,010 5,490 0 206,794 321,853 4,800 0 199,281 533,447 *Q4 2018 number not computed due to data inconsistency FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDOUR VOLUNTEERING INITIATIVES ARE DEVELOPED IN BRAZIL, THE UNITED STATES, MEXICO AND EUROPE ON TWO FRONTS: SCAVENGER HUNTS AND COMMUNAL WORK. HISTORY: PUBLIC AND SOCIAL INVESTMENT BRAZIL + GLOBAL VOLUNTEERING 27.8 27.5 14.7 15.2 0 0 0 , 1 8 0 0 0 6 9 , 22.5 15.1 0 0 0 6 8 , 19.6 24.7 23.5 18.1 7 2 1 , 4 4 1 16.6 12.9 1 8 7 , 1 9 1 , 2 5 2 6 0 2 2014 2015 2016 2017 2018 2019* Public reached $ BRK Investment $ Total SPI < >71 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDX-RAY OF PROJECTS Volunteering Program The purpose of our global volunteering program is to generate a positive social and environmental impact on the communities located around Braskem’s operations. In 2019, the engagement rate of our Team Members in the program grew, reaching 26%, more than a quarter of our Team Members in all countries where we have operations, and with about 90,000 people from the communities where we operate. The average of other corporate volunteering programs surveyed is close to 14%. Our volunteering initiatives are developed in Brazil, the United States, Mexico and Europe on WE CARE WEEK As a new feature in our Volunteering Program, between two fronts: Scavenger hunts and Communal work. In a Scavenger hunt, teams of two or more Team October 19 and 27, 2019, we held the We Care Week, a glob- Members are formed and choose a social organization close to their unit to work for a specific pe- al volunteering week focusing on circular economy and riod. The initiative works as a collaborative competition and lasted four months (May to August). In post-consumption. the end, the teams with the highest score received a prize to donate to the entities they supported. A total of 18 activities were carried out in five countries: In the Communal work, the groups convene to carry out specific initiatives in each of the lo- Brazil, Mexico, the United States, Germany and the Neth- cations where we operate. The program encourages initiatives with socially vulnerable community erlands). Our Team Members and their guests take part in and donation campaigns. 2017 2018 2019 Investment R$ 290,511.63 R$ 954,439.98 R$ 958,031.55 Direct beneficiaries 36,167 Participants Braskem employees External guests Donated hours Institutions benefited Cities involved Actions carried out One-off donations Communal work Engagement rate (% of total number of employees) 856 359 497 4,550 47 14 1,222 18,786 - 4.7% 70,954 2,759 1,271 1,488 15,964 64 15 2,226 32,010 15 16% 94,016 4,672 2,159 2,513 32,747 79 26 1,336 54,172 61 26% actions in the communities surrounding the company’s op- erations. Among the initiatives we cleaned four beaches and five parks, lectured on environmental education in six schools and helped three recycling cooperatives. WE CARE WEEK IN NUMBERS 559 VOLUNTEERS (232 VISITORS AND 327 TEAM MEMBERS) OVER 2,000 HOURS DONATED 7,500 PEOPLE BENEFITED 3.7 TONS OF WASTE COLLECTED < >72 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDSer+Realizador The project aims to promote social inclusion and socioeconomic develop- ment of people who work in the collection and sorting of recyclable materials and cooperated by fostering the development of the national recycling chain and circular economy. In 2019, through a partnership with Mãos Verdes, we invested and expand- ed the Sorting Units (UT) and approved 12 cooperatives to serve Braskem’s WeCycle program. There were 14 training seminars on management and gov- ernance and more than 5,000 hours of technical assistance to the UT. One of the most important results of the year was the 29% increase in the monthly income of the beneficiaries of the project. Of the total amount contributed, 35% went to the purchase of equipment, 33% to construction works, 13% to services, 10% to training and 9% to inputs in order to improve the condition and productivity of cooperatives and sorters. INVESTMENT R$ 1,966,508.50 R$ 1,698,489.70 R$ 898,970.97 * 2017 2018 2019 Sorting units / Cooperatives served Number of cooperatives apt to serve Wecycle Sorters benefited Sorters trained Volume of waste sorted (kg) Weight sold/month - T/UT Percentage of Sorters with Increased Income 35 - 1,278 326 14,352 - - Income Increase/Month 42% 37 2 1,057 472 25,022 72 52% 26% 43 12 1,264 692 28,101 67.9 40% 29% * Value lower than 2018, due to the reallocation of resources and restructuring of the project. < > 73 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDIN THE YEAR, THE PLATFORM RECEIVED 277,244 VIEWS. Edukatu Online learning network that addresses concepts of conscious consumption and sustainability among elementary school teachers and students in schools across Brazil. In 2019, Edukatu’s awareness-raising and mobilization activities were mostly concentrated in the states of Alagoas, São Paulo, Rio de Janeiro, Bahia and Rio Grande do Sul. In the year, the platform received 277,244 views. Three new partnerships were made official with the Boards of Education of Marechal Deodoro (AL), Candeias (BA) and Camaçari (BA), in addition to 52 in-person workshops and mobilization of the municipal education networks in the municipalities of Triunfo (RS), Montenegro (RS) and Dias d’Avila (BA). Work was also initiated on teaching topics focusing on the Sustainable De- velopment Goals (SDG) and Life Cycle Assessment (LCA). In 2020, Edukatu in- tends to continue focusing on gains in scale and greater coverage, fostering in-person mobilizations, dissemination to and training of teachers to use the platform and the content already produced with partner education networks. Total number of participants Teachers engaged Students engaged 2018* 2019 42,073 1,315 1,294 49,610 2,021 5,674 * The data for 2018 differs from what had been presented in previous reports because the method- ology for calculation has changed (from the average users to single users in the last twelve months) < >74 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDPlastitroque This project highlights the importance of selective sorting and prop- er disposal of waste, promoting post-consumption in schools in Ba- hia and Alagoas. The action consists of exchanging plastic waste for Plasticoins, the currency used to purchase gifts. In Bahia, we held lectures and workshops on conscious consumption and proper dis- posal of waste, mobilizing 450 children. A total of 376 kg of plastic waste were collected, sent to COOPMARC - Camaçari Recyclable Materials Cooperative, supported by the Ser+ Program. In Alagoas, the actions were carried out in Marechal Deodoro and had the sup- port of 16 volunteers (Team Members and guests), in addition to col- lecting nearly 500 kg of plastic, directly impacting 400 people. OUTRO OLHAR This project is developed in the community of Vila Mangueira, in Rio Grande (RS). The goal is to promote socialization and human development experiences, especially for children and adolescents. In 2019, the action directly impacted 178 students and indirectly approximately 350 residents. Ecobarreira Since 2017, we have supported this project, the Safeweb Institute in Porto Alegre, whose efforts are aimed at preventing solid waste from reaching the Guaíba Lake. We participate in Environmental Educa- tion initiatives, aimed especially at children and adolescents. Since its launch, the project has already avoided 671 tons of materials from reaching the lake, an average of 168 tons per year. 2017 2018 2019 Investment R$ 50,000 R$ 78,000 R$ 80,000 < >75 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDRede de Maré In 2019, we renewed the Rede de Maré project, which we have supported since 2015. The ini- tiative aims to promote sustainable management of artisanal fishing in communities of fish- ermen and shellfish gatherers on Ilha da Maré, which is close to our operations in Salvador (BA). We also work to maintain traditional local cultures and their livelihoods, in addition to advocating for environmental education in the community with a focus on marine ecosys- tems. From the beginning of the project up to December 2019, 154 fishermen/shellfish gath- erers were monitored in the participating communities. Pescadores de Mel In order to improve the income of fishermen in Alagoas during the annual fishing ban and promote social inclusion and technical training, we support this initiative in partnership with Uniprópolis. The project encourages the teaching of the craft of honey production and hy- droponic cultivation to fishermen from four regions: Maceió, Barra de São Miguel, Marechal Deodoro, and Coqueiro Seco. 2017 2018 2019 Investment R$ 50,000 R$ 50,000 R$ 300,000 People trained in beekeeping 91 178 56 < >76 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDPlastiferia Also in Mexico, we developed the Plastiferia project, an event in a game format aimed at children and young students that promotes the importance of recycling plastic waste and fosters environmental education. We have 50 volunteers for each game module and a total of 800 children were benefited in 2019. Plastianguis Held in Mexico, the purpose of this program is to encourage recycling and teach the community to sort plastic waste. The materials can be exchanged for currencies called PlastiPesos and, with them, it is possible to buy cleaning products and food for an amount subsidized by Braskem. 2017 2018 Families benefited Community participants Products delivered (food staples basket) Volunteers Hours of volunteer work Tons of plastic collected Tons of food staples basket distributed +400 1,000 6,000 66 600 7 - 800 3,200 19,824 130 2019 1,500 3,000 21 Tons 150 1,170 (average of 9 hours per person x 130 people) 1,170 (average of 9 hours per person x 130 people) 28,3 21,7 49,6 21 Tons < >77 Investment (MXN) 603,889.51 1,192,338.40 2,000,465.08 Investment (R$) R$ 102,243.37 R$ 227,563.28 Plastipesos distributed 79,534 Staples baskets distributed 494 201,967 1,239 2,000 Science Leadership Academy In the U.S., we support the Science Leadership Academy (SLA) in the science, technology, en- gineering and mathematics education program. The project allows freshmen- or sophomore SLA students to do an internship at our plant in Marcus Hook. In addition, through the Capstone Acceleration Program, our Team Members act as mentors to senior students in preparing their undergraduate thesis. Braskem Entrepreneurs In 2019, in partnership with Rede Mulher Em- preendedora (Entrepreneuring Women), we launched the program called “Empreendedoras Braskem” program, which trains residents in the region close to the Greater ABC region (SP) and Duque de Caxias (RJ) Petrochemical Plants to generate and increase income through employ- ability, in addition to encouraging the promotion of business led by women. The program is intended for women who wish to undertake or are already in the process, formally or informally, and who have not had access to any type of training and are looking for professional and personal growth. In 2019, two classes were held that trained 57 women and five new businesses were created. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDCUSTOMERS We work hand in hand with our Clients to build and foster a more sustain- able future for our entire value chain. Acting in an integrated manner, we are able to think and create efficient products and solutions, considering the commercial demands while we follow and strengthen the principles of the Circular Economy. Our outstanding initiatives are: Circular Economy: We have entered into partnerships with several cus- tomers to develop more sustainable products, such as renewable products, that expand and facilitate recycling and reuse of plastic packaging. In ad- dition, we develop actions and solutions to value post-consumer plastic waste and the recycling chain as a way to mitigate environmental and social risks. To this end, we entered into partnerships with Customers, recyclers, cooperatives and consumer brand companies. [Learn more in section In- novative and Sustainable Solutions] PICPlast: Through our partnership with the Brazilian Plastics Industry Association (ABIPLAST) we promote initiatives that encourage the ex- port of transformed products. [Learn more in section Innovative and Sustainable Solutions] MAXIO® SEAL: this family of products offers eco-efficient resins that help reduce energy consumption during the production process and the weight of final products, in addition to increasing productivity, which contributes to reducing production costs and environmental impacts. < >78 IN 2019, THE INDEX THAT ASSESSES THE GLOBAL REPUTATION BY CUSTOMERS IN THE DIMENSION PRODUCTS AND SERVICES REACHED 72.6%, EXCEEDING THE GOAL OF 70%. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGREEN PLASTIC IN AGRICULTURE In 2019, we entered into a partnership with the Israeli-Indian company Naan- DanJain, which supplies equipment and technologies in the area of localized irri- NEW BUSINESS MODELS To accelerate our digital transformation, we created a Digital Center, which com- gation, to develop a drip irrigation system for sugarcane. The initiative increases mands and integrates, at a global level, the more than 50 initiatives that we develop the productivity of sugarcane fields by 65% compared to the traditional method in this area. One of its goals is to improve our processes and increase productivity. (rainfed). In some cases, the gain can reach 200%. For this reason, we used new digital tools, such as those that employ Artificial In- The polyethylene tubes used in the process are manufactured with our re- telligence and Analytics. In addition, the Digital Center explores new business op- newable resins, aligning agribusiness to sustainability. Through drip irrigation, it is portunities and services for our Clients. Thus, in 2019 we promoted two internal possible to improve productivity while minimizing the consumption of fertilizers startups that, together, operated more than 1,000 transactions. and water per ton produced. SINGLE MATERIAL PACKAGING We teamed up with the Brazilian company Antilhas Flexíveis, renowned in the • Edge Portal This e-commerce platform allows customers to search and compare products, place orders and view their history - just like all other shopping sites. They can market for packaging innovations, to create a single material stand-up pouch, also track orders and access transaction documents. All of this can be done via launched during Feiplastic 2019, in São Paulo (SP). This type of single material a computer or mobile app. Close to 65% of Solvents are already sold through the product is made from a single raw material, benefiting the plastic recycling chain, platform, which is expected to soon be extended to Fuels and Vinyls. since it facilitates the process of separating the materials. The stand-up pouch packages - which stand upright regardless of the ma- terial used - were made with polyethylene without lamination using EB (Electron • LoadShark This logistics tool was designed to improve the way we schedule deliveries for Cus- Beam) technology, an innovative procedure for curing printing using an external tomers. In Brazil alone, nearly 1,500 trucks leave our plants every day. Programming beam of electrons, exclusively patented by Antilles. They can be used in applica- deliveries is a manual process that involves different people, papers and spread- tions in the cosmetics and food industries. sheets. With LoadShark, data such as orders, location of trucks, receiving windows, destinations and delivery times are evaluated by algorithms used by the app to cre- STATIONERY SOLUTIONS In partnership with the company Ledesma, a leader in natural agro-industrial ate a more efficient delivery schedule - positively impacting freight costs and fleet productivity. The solution can also be used to share trucks when Braskem partners products, we created the Ledesma+Bio line, with more sustainable notebooks with delivery companies on similar routes. A solution that reduces costs and con- produced from sugarcane. The products have front and back covers made with tributes to sustainability. our Green Plastic I’m greenTM, while the paper sheets are made of naturally col- ored sugarcane fiber, since chemical bleaches are not used in production. The launch was awarded the “Sustainable Product of the Year 2019” by the Business Intelligence Group, which, since 2012, has awarded companies and people with < > 79 innovative solutions. SUSTAINABILITY IN THE CLEANING SECTOR In May 2019, we entered into a partnership with Boulder Clean, a North American manufacturer of cleaning products that will use our Green Plastic I’m greenTM in the new packaging of their laundry detergent with a sustainable focus. As a result, the product packaging, for sale in some states, becomes fully recyclable. WE WORK HAND IN HAND WITH OUR CLIENTS TO BUILD AND FOSTER A MORE SUSTAINABLE FUTURE FOR OUR ENTIRE VALUE CHAIN. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDSUPPLIER CATEGORIES _102-9, 308-1_ Ethanol: to guarantee a quality resin and social and environmental respon- sibility throughout the production cycle, this product and its suppliers rely on one of Braskem’s most rigorous management processes. Since 2016, we have been guided by the Responsible Ethanol Purchase Program, which as- sesses compliance with mandatory requirements and excellence in param- eters, such as slash-and-burn processes, biodiversity, best environmental practices, human and labor rights. Fossil raw materials: Suppliers in this category are strategic for our busi- ness. Among these products we have naphtha, condensate, ethane, pro- pane, and LRH in Brazil, ethylene and propylene in the United States and Germany, and ethane in Mexico. THIS INITIATIVE IS IN LINE WITH SDG 8 - DECENT WORK AND ECONOMIC GROWTH (GOALS 8.7 AND 8.8) SUPPLIERS _103-2, 103-3, 308-1, 414-1_ We have in place a decentralized management structure, with different ar- eas working on spend analysis, evaluating the quality of products and ser- vices and adherence to the Third Party Code of Conduct. The Code is based on widely accepted documents ranging from the UN Universal Declaration of Human Rights to the procedures recommended by the International La- bor Organization (ILO) and the laws and regulations of countries where we operate. In the case of contracts for industrial areas, all Suppliers must re- spond and meet the minimum requirements for Health, Safety and Envi- ronment based on our HSE Policy. PERCENTAGE OF PURCHASES BY SUPPLIERS BY COUNTRY* _204-1_ 2017 2018 2019 Brazil USA Germany Mexico Domestic Foreign Domestic Foreign Domestic Foreign Domestic Foreign 71% 29% 93% 7% 93% 7% 75% 25% 59% 41% 96% 4% 98% 2% 71% 29% 56% 44% 97% 3% 97% 3% 49% 51% * To calculate this indicator, we considered as “local” domestic suppliers, and “locations with significant operations” are the countries where we have industrial units. < >80 See our Third Party Code of Conduct by clicking here. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDPROCUREMENT _102-9_ This is an essential area for our business. Its duties include the contracting of ser- vices (industrial and corporate) and the purchase of direct (input) and indirect (MRO) equipment and materials. Based on its negotiation strategies with Suppli- ers, the area provides the necessary resources both for the operation of industrial plants and for the administration sectors, always seeking greater competitiveness, financial gains, efficiency and compliance. The area operates globally and serves all Braskem locations, identifying synergies and optimizing operations. This is all done through transparent procurement processes and following the organization’s formal guidelines. We also use tools that help predict financial and managerial impacts of negotiations, such as the Suppliers Radar - which identifies companies with greater exposure to labor and economic risks - and due diligence processes, in addition to a bi-annual assessment of Suppliers, which produces the Supplier Performance Index (IDF). The tool is applied to all companies deemed crit- ical after an assessment of sustainability criteria. Any non-conformities identified are handled with an action plan involving users, Suppliers and Procurement areas. WE ALSO USE TOOLS THAT HELP PREDICT FINANCIAL AND MANAGERIAL IMPACTS OF NEGOTIATIONS < >81 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDTechnology and sustainability in the procurement area In 2019, we completed the validation process of the Sustainable Procurement Engagement In 2019, the Procurement area was once again recognized by the CDP Supply Chain Tool, which improves the process of assessing social and environmental risks program, which highlights the companies that most encourage their Suppliers to during the technical analysis of bids, helping the various procurement teams to adopt in their businesses issues related to sustainability, such as reporting green- embed sustainability issues in the selection of Suppliers. For now, the tool is used house gas emissions and water management. only in some categories of services, but the idea is to extend its application to We also kept the top score “A” in the CDP Water ranking, being recognized for other categories in 2020. our leadership in topics relating to Water and Climate for the third and fifth con- Also in 2019, we started implementation of the Coupa tool, a global and digital secutive years, respectively. In “Climate” we ranked among the best companies platform for the area of Procurement. In May, the tool began to be used in some in Latin America, and featured in the “A List Water Global” among the five Latin purchasing processes in Brazil, Mexico and the United States and Europe. The goal American companies listed. is to expand the use of the platform and to concentrate on the tool the entire sys- Furthermore, we are part of the CDP Brazil Index - Climate Resilience (ICD- tem for purchase and acquisition of products and services in all countries where PR-70), launched in March 2020, which assesses the performance of companies Braskem operates. As a result, these purchasing processes and the relationship with with best practices in these areas and in line with global trends and recommenda- Suppliers will become simpler, more agile, efficient and sustainable, in addition to tions of international agreement such as Task-Force for Climate-Related Financial making the process more reliable and in line with global compliance requirements. Disclosure (TCFD), created by the Financial Stability Board to facilitate the report- Another major change in 2019 was the creation of a new inventory and ware- ing of climate-related financial information by companies worldwide. house management system in Brazil. Called WMS, the digital tool will simplify and We were also recognized as a “Supplier Engagement Leader,” as a result of our modernize receipt, handling and delivery operations, maximizing productivity and efforts to minimize climate risks in our operations by supporting our Suppliers in stock accuracy. The idea is for the system to generate savings of up to R$ 6.2 million joining the Action Exchange, a free consultancy that identifies opportunities to re- per year with the increase in inventory accuracy. duce costs, emissions and energy consumption in our processes. < >82 RECOGNIZING BEST PRACTICES In April 2019, the Procurement area, supported by Braskem’s Sustainable Development area, held the first event to recognize suppliers with best performance in management of water resources and climate change issues. The event had 96 participants, including suppliers, speakers and Team Members. The initiative is relevant because, within our risk matrix, water and climate have a high potential for impact. Thus, we select only the most critical suppliers that can be impacted by the potential scenarios of severe droughts or extreme climate change events. The criterion for recognizing suppliers was the perfor- mance at the 2018 CDP: everyone was on the “A List,” i.e., they were all companies with excellence in man- aging greenhouse gas emissions, water consumption and use of forests. Suppliers that received recognition were: • Water resource management: BASF • Climate change management: Siemens, BASF, Invensys, Schneider Electric, Hitachi, Praxair (White Martins), Air Liquide, Arkema, and Ricoh FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDLOGISTICS The Logistics area works alongside the Health, Safety and Environment (HSE) team to ensure that all social and environmental requirements critical to operations are met through the hiring of transportation, terminals and other logistics services. The evaluation process is based on Braskem’s performance analysis system, vetting 11 and ABIQUIM’s Safety, Health, Environment and Quality Evaluation System. Hiring of vessels for import, export, coastal shipping, and inland ship- ping follows international safety standards based on the vetting criteria and recommendations set out by the Oil Companies International Ma- rine Forum (OCIMF). Focus on safety One of the concerns of the Logistics area is the safety of all stakeholders. For this reason, we partnered with the largest risk managers in Brazil and tracked freight. In addition, we hold regular meetings with service provid- ers to ensure compliance with internal Health, Safety and Environment processes, and annual audits at the carriers’ headquarters. We also promote important programs that address road safety. Among them, are: • Na-Mão-Certa Program: We have been part of this program since 2007. It was created by OSCIP Childhood Brasil and aims to influence the country’s agenda to protect children and adolescents, ensuring that issues associated with abuse and sexual exploitation are addressed by public and private policies. In 2019, awareness actions impacted 1,644 truck drivers and 373 Team Members. Overall engagement increased by 55% compared to 2018. • Olho Vivo na Estrada Program: created by ABIQUIM in partnership with ABICLOR, the purpose of this program is to prevent unsafe behavior when transporting hazardous products by raising awareness of drivers. • Transportadora da Vida: an initiative of the Trade Union of Carrier and Logistics Companies (SETCERGS) to certify cargo transport compa- nies that conduct actions with a great emphasis on safety. < >83 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGOVERNMENT _201-4_ In all of our processes and in all relationships with stakeholders, we adopt attitudes and strategies of responsibility, integrity and transparency. To this end, we promote open dia- logues and are guided by a commitment to ethical management. This is no different from our relationship with governments. We also have a tax incen- tive of ICMS (Tax on Circulation of Goods and Provision of Services) granted by the State of Alagoas through the State Integrated Development Program (PRODESIN) as a result of an investment of US$ 500 million in our PVC plant installed in 2012 in the Industrial Dis- trict of Marechal Deodoro. 2017 2018 2019 Total tax incentives/credits* PRODESIN - ICMS (R$ million) SUDENE - IR (R$ million) REINTEGRA (R$ million) Total Subsidies (R$ million) Subsidy - National Agents (R$ million) Total Financing (R$ million) Financing - National Government Agents Financing - Foreign Government Agents - ECAs (R$ / million)** 167.4 95.7 71.7 - - - 420 - 420.4 81.9 81.9 - - - - 1,732.1 0.45 1,731.7 77.0 67.8 - 9.2 - - 964.6 266.4 698.2 * BNDES - FINEM (Local Gov. Agent) - Contract signed in Dec/2018 to finance the company’s maintenance CAPEX (Total volume contracted R$ 476 million). Amount disbursed in January 2019. **Euler Hermes (ECA Germany). Contract signed in 2018. 4 withdrawals were made in 2019, totaling R$ 83.984 million. ** SACE (ECA Italy). Signed and disbursed in Dec/2019 - R$ 614,235 million. Like the 2018 report, for the ECAs, the conversion rate from USD to BRL was considered on the date of entry of the resource. < >84 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD< >85 RESPONSIBLE PRODUCTION_103-2, 103-3, 403-1_ HEALTH, ENVIRONMENT AND SAFETY OCCUPATIONAL HEALTH AND SAFETY PROCESS SAFETY PRODUCT SAFETY WATER EFFICIENCY SUSTAINABLE ENERGY WASTE MANAGEMENT CLIMATE CHANGE FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDHEALTH, ENVIRONMENT AND SAFETY We ended 2019, and once again, registered zero fatal accidents. This is the result of our efforts to find ever better ways and solutions in terms of safe- ty, efficiency and sustainability in our operations. Throughout the year, we work every day to create opportunities and positive results for Braskem employees, Communities near our plants and for the environment. One of the highlights was the final implemen- tation and training of Intelius, our new Integrated Management System. The system meets all the HES, Quality and Industrial Excellence require- ments, providing guidelines and reporting on best international practices on the necessary actions in the industrial areas. Despite its global nature, the tool considers local requirements and encourages Braskem employees to collaborate to reinforce the culture of risk prevention based on discipline and respect for safety processes and procedures. INTERNAL ASSESSMENT In 2019, we conducted the first internal audit in all our units worldwide to assess the impacts of the process called Gap Assessment, which was fi- nalized in 2018. At the time, all plants participated in a self-assessment to determine which points met the basic requirements and the evolution of performance indicators defined by Intelius and which aspects that could be improved. The purpose of the 2019 audit was to analyze the topics considered by the units to be in accordance with requirements. Thus, we verified the level of understanding of these requirements. For this, we set up a multi- disciplinary team, formed by Braskem employees from different plants, constituting a cross-audit. Since the mapping showed inconsistencies between the perception of some plants and what, in fact, they were doing, we established an action plan to address all gaps. We considered this work as a continuous effort, so in 2020, we are planning a new audit to verify the implementation of these corrections and carry out new sampling. < >86 100% OUR UNITS TOOK PART IN THE GAP ASSESSMENT One of the pillars of our strategy is the commitment to offer increasing- ly sustainable operations and services. We see ourselves as part of the solution and our focus is on expanding the positive impacts arising from Braskem’s operations, as well as controlling and/or mitigating negative im- pacts, especially in terms of major global challenges, which include topics such as water, Climate Change, sustainable production and consumption. WATER EFFICIENCY ENERGY EFFICIENCY HEALTH & SAFETY CLIMATE CHANGE FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDOCCUPATIONAL HEALTH AND SAFETY _103-2, 103-3, 403-2, 403-3, 403-4, 403-5, 403-9, 403-10 _ One of our macro-goals for Sustainable Development however, we are concerned with the growth of factors is to care for the health and safety of our Braskem em- such as distraction and lack of risk perception in rou- ployees and of third parties/contractors. We constant- tine activities. Therefore, our work had an even great- ly reinforce concepts, follow all requirements and work er focus on accident prevention. As a highlight, we rely towards prevention; however, despite our efforts, in on the actions and campaigns of our human reliability 2019 the Total Recordable Injury Rate (injuries with and program, implemented in all units, covering industrial without lost time), considering Braskem employees and professionals, from operation to administrative areas. Third Parties workers per million manhours, increased Among the initiatives, we developed videos and in- by 22% compared to the previous year. teractive games that, in a playful way, highlighted the In contrast, the Lost Time Injury Rate, con- importance of an accident prevention culture. sidering Braskem employees and Contractors and In terms of health, we continued our program to re- also calculated based on one million manhours, duce the impact on the handling of potentially carcino- decreased by 26%. The Severity Rate of Lost-Time genic agents. The highlight was the program aimed at Accidents dropped by 77%. reducing exposure, since, despite the correct use of Per- The events are of low severity, related to falling and sonal Protective Equipment (PPE), we intend to reduce stumbling while walking and going up or down stairs; the exposure of Braskem employees to such agents. NUMBER OF ACCIDENTS X 1MM/MHW Total Recordable Injury Rate (WLT + W/OLT)* Lost Time Injury Rate (WLT)* Severity rate* Number of fatal accidents* Occupational illnesses Frequency Rate** Number of Cases of occupational illnesses** *Braskem employees and Third Parties **Braskem employees 2015 2016 2017 2018 2019 0.68 0.26 47.38 0 0 0 0.8 0.24 1.02 0.33 179.58 35.33 1 0.06 1 0 0 0 1.07 0.53 183 0 0.12 2 1.31 0.39 42.32 0 0.18 3 THE TOTAL RECORDABLE INJURY RATE (WLT + W/OLT) WENT FROM 10.07 IN 2002 TO 1.31 IN 2019. THIS NUMBER REPRESENTS AN AGGREGATE IMPROVEMENT OF NEARLY 87% WITH AN AVOIDED COST OF OVER US$ 65 MILLION. < >87 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDINNOVATION IN SAFETY In the second quarter of 2019, we launched a challenge to students in the third year of the Mechatronics En- gineering school at FIAP School of Technology to find new ways to optimize production and increase the op- erational safety of our plants in São Paulo. For ten months, the groups had access to the units in São Paulo for an immersion in the petrochemical environment, in addition to having training and men- toring promoted by professionals from different ar- eas. At the end of the year, we selected an outstand- ing project - with a focus on worker safety - to test its technical and economic viability. The idea of the chosen group was to install iden- tification chips on the badges of Braskem employees, allowing the company’s safety team to quickly locate people in an emergency. The concept was used during the general maintenance shutdown in November and December 2019 at our Camaçari units. At Braskem, the Occupational Hygiene and Occupational Health disciplines are part of the same area with the same coordination. The ob- jective is integration, since the risks mapped and controlled by one area are monitored by the other through the worker’s health profile. Regarding the facilities, almost 100% of Braskem’s units have medical assistance in the workplace, facilitating access and health surveillance for workers. The exception is remote offices, where we have be- tween one and ten employees. The health services are equipped with cer- tified equipment and have legally qualified doc- tors and nurses, in addition to nursing techni- cians. Occupational health assessments are carried out mainly in the medical services, in the workplace. All health-related information, elec- tronic or printed, of employees is classified as confidential and only medical personnel can ac- cess it. The scope of the management system includes auditing of medical facilities, processes and information management. < >88 ONE OF OUR MACRO-GOALS FOR SUSTAINABLE DEVELOPMENT IS TO CARE FOR THE HEALTH AND SAFETY OF BRASKEM EMPLOYEES AND OF THIRD PARTIESFUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDPROCESS SAFETY _103-2, 103-3, 413-2_ In 2019, we continued to make progress in relation to the safety of our produc- In 2019, we recorded seven TIER 1 events (2 more than in the previous year), tion processes with indicators within the range of previous years. Our mapping with a rate of 0.15 per million manhours (25% higher than 2018) - a number and reporting methodology is used in all plants, globally, and we had a greater still compatible with the global benchmarks in process safety for companies engagement of Braskem employees in recording of incidents. in the chemical sector. In the United States, for example, the average value Nevertheless, we believe that our work has shown positive results and we of companies is 0.34. The TIER 1 event frequency rate evolved from 0.7 to 0.15 continue with the objective, for the coming years, to keep improving these in the period from 2013 to 2019, representing an aggregate improvement of indicators, focusing on human reliability and on the integrity of our assets. close to 79% and an avoided cost in excess of US$ 1.1 million. TIER 1 2 3 Incident with loss of containment and release of product above cut-off point TIER 1 – NUMBER OF ACCIDENTS Incident with loss of containment, but release of product below cut-off point 2015 2016 2017 2018 2019 11 9 6 5 7 Incident with small loss of containment or system failure that could potentially lead to a process accident TIER 1 – RATE OF ACCIDENTS 2015 2016 2017 2018 2019 0.32 0.22 0.14 0.12 0.15 2020 GOAL 0.10 < >89 TIER 1 - SEVERITY RATE 2015 2016 2017 2018 2019 3.41 0.68 0.77 0.30 0.71 OUR MAPPING AND REPORTINGMETHODOLOGY IS USED IN ALL PLANTS, GLOBALLY, AND WE HAD A GREATER ENGAGEMENT OF BRASKEM EMPLOYEESFUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDFor Tier 2 events, 28 events occurred in 2019 (2 more than in 2018; 3 less than in 2017). Despite the events mentioned above, the accident rate dropped to 0.58 per million manhours (3% lower than 2018), as a result of the higher vol- ume of hours worked in 2019. TIER 2 – NUMBER OF ACCIDENTS 2015 2016 2017 2018 2019 40 37 31 26 28 THE TIER 1 EVENT FREQUENCY RATE EVOLVED FROM 0.7 TO 0.15 BETWEEN 2013 AND 2019, REPRESENTING AN AGGREGATE IMPROVEMENT OF CLOSE TO 80% AND AN AVOIDED COST IN EXCESS OF US$ 2.6 MILLION. TIER 1 – RATE OF ACCIDENTS 2015 2016 2017 2018 2019 1.17 0.90 0.74 0.60 0.58 2020 GOAL 0.55 In relation to Tier 3, considered as minor incidents, throughout 2019 we noticed an upward trend in these occurrences. This is due to the strengthening of the safety culture of processes and to the commitment of Braskem employees to the tool that records and reports all deviations that impact on loss of primary containment. RISK RATING ALL OF OUR PLANTS CONTINUE TO ADHERE TO THE INTERNATIONAL RISK RATING STANDARD AT THE “STANDARD” LEVEL - HALF OF THEM ARE AT THE “ABOVE STANDARD” LEVEL. BRASKEM DOES NOT HAVE A GOAL FOR THIS INDICATOR. < > 90 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDPRODUCT SAFETY _103-2, 103-3, 416-1, 416-2, 417-1, 417-2, 417-3_ Our products are the core of our business, so we work to maintain health and safety not only in terms of production, but also in our services. In this sense, we have in place an ongoing international evaluation and benchmarking process to analyze our practices and consider possible improvements. We also partnered with key stakeholders (including the Brazil- ian Chemical Industry Association - ABIQUIM, American Chem- istry Council - ACC, the Plastics Industry Association and Plas- tics Europe) to recognize and mitigate the risks for people and the environment associated with using the products. Investments and gains in environmental protection _103-2_ Our strategic plan is permeated by ideas for sustainable products and solutions. Therefore, we invest in safety and in the continu- ous improvement of our processes to generate positive impacts in all aspects of HES. Every year, we establish goals and investment plans consid- ering variables such as the needs of each plant, region, mainte- nance shutdowns schedules, recertification and business strat- egy. In 2019, we invested almost 40% more in these initiatives compared to 2018. Total spend with HES increased by almost 16%. INVESTMENTS AND GAINS IN ENVIRONMENTAL PROTECTION TYPE OF EXPENSE (R$ MILLION) 2017 2018 Occupational Safety Process safety Investments in HES Health Environment Total Spend to treat effluents and waste Treatment of liquid effluents Waste management Total Management of emissions Environmental permits Depreciation Provision for recovery of environmental damages (environmental liabilities) Other environmental management costs 7.5 87.6 3.9 13.1 112.1 52.6 57.2 109.8 8.8 1.0 46.0 102.5 48.9 16.5 113.3 5.6 10.2 145.4 60.1 82.0 142.1 6.7 1.1 46.0 89.4 57.9 2019 48.0 139.4 8.7 7.3 203.5 57.1 48.0 105.0 7.8 1.4 46.0 141.5 60.6 < >91 40% MORE INVESTED IN 2019 WE INVEST IN SAFETY AND IN THE CONTINUOUSIMPROVEMENT OF OUR PROCESSES TO GENERATE POSITIVE IMPACTSFUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDHES management is also responsible for monitoring savings and avoided costs with improvement projects. In 2019, internal and external events had neg- ative impacts on our avoided costs, especially those related to eco-indicators: with the exception of waste generation, they did not reach the targets for the year, which led to additional expenses instead of savings. Among these external events, we had the chlor-alkali unit in Alagoas, which interrupted its operation, and commercial restrictions that led to load reduction, with direct impacts on the efficiency of the units. It is important to note that our energy consumption is predominantly ther- moelectric. Therefore projects involving improvements in energy efficiency also positively impact reduction of air emissions (regulated pollutants and GHG) and avoided costs. In total, this work resulted in gains of R$ 45 million4 in the opera- tions in Brazil, the United States, Germany, and Mexico. 4 Avoided costs through management of health, safety, and environment R$ 45 MILLION WAS THE GAIN WITH PROJECTS INVOLVING IMPROVEMENTS IN ENERGY EFFICIENCY AVOIDED COSTS –─ MANAGEMENT OF HEALTH, SAFETY, AND ENVIRONMENT DIMENSION (US$)* 2017 2018 2019* Safety Occupational Safety 5,850,000 5,640,000 6,985,443 Process safety 1,260,274 1,903,968 -1,018,186.42 Health Occupational Health 1,945,205.48 265,734.25 1,936,708.86 Waste Generation 27,951,463 25,184,154 33,675,538.79 Water Consumption 4,021,398 -3,180,674 - 4,597,463.71 Environment Effluent Generation 12,441,199 9,625,041 7,725,150.01 Energy Consumption 198,391,572 127,833,979 120,548,622.73 GEE Emission 116,243,528 69,467,138 65,174,129.28 TOTAL 366,159,433 236,473,607 230,429,943.58 * The exchange rate used was R$ 3.95 < >92 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDWATER EFFICIENCY _103-2, 103-3, 303-1, 303-2, 303-3, 303-4, 303-5_ Water is an essential element for the industry. That is why the management of processes that involve this topic is embedded in the risk management of our business, which is done through the Enterprise Risk Management (ERM) platform. It is also re- ported directly to the Board of Directors and is based on COSO, ISO 31000 and IBGC standards. Our largest demand for water comes from the produc- tion process at our 40 industrial facilities, mainly used in cooling and steam generation systems, processes and prod- ucts and disposal of effluents. We vary water sources, with surface, ground and third-party resources (including reuse). We comply with our legal obligations and, therefore, we monitor liquid discharges by measuring parameters such as pH, temperature, sediments, oils, floating materials, hydro- carbons, among others. In addition, since 2017 we have devel- oped action plans for all plants located in high risk basins (four Brazilian river basins), which deal with issues such as water re- use and desalination. We also assess 100% of our supply chain, offering aware- ness and training steps with the support of the CDP and, when- ever necessary, we help our Suppliers to identify opportunities for improvement and create solutions to face situations of risk. In 2019, 49% of the invited Suppliers responded to the CDP wa- ter security questionnaire sent by Braskem. < >93 RESPONSIBLE USE OF WATER FOR THE THIRD CONSECUTIVE YEAR, WE HAVE BEEN RECOGNIZED AS ONE OF THE COMPANIES LISTED ON THE “A LIST” ON WATER ISSUES AT CDP WATER, WHICH SELECTS THE BEST PUBLICLY TRADED COMPANIES IN THE WORLD IN RELATION TO MANAGEMENT OF WATER CONSUMPTION. GLOBAL ENGAGEMENT AS A RESULT OF OUR EFFORTS IN WATER EFFICIENCY, IN JULY 2019 WE JOINED THE CEO WATER MANDATE, A UN GLOBAL COMPACT PLATFORM THAT BRINGS TOGETHER A COMMUNITY FORMED BY MORE THAN 150 COMPANIES FROM AROUND THE WORLD COMMITTED TO ADVANCING WATER MANAGEMENT. WATER EFFICIENCY 2019 HIGHLIGHTS 45% OF ENGAGED SUPPLIERS REPORTED TARGETS 48% OF SUPPLIERS THAT HAVE A CORPORATE WATER POLICY 61% OF ENGAGED SUPPLIERS ASSESS WATER RISKS 27% OF SUPPLIERS ENGAGING THEIR SUPPLIERS 16% OF SUPPLIERS INTERNALIZE WATER SECURITY STRATEGIES IN LONG-TERM BUSINESS STRATEGIES 124 SUPPLIERS INVITED BY BRASKEM ANSWERED THE CLIMATE QUESTIONNAIRE IN 2019 (49% OF TOTAL GUESTS) SINCE 2017 WE ARE IN THE LEADERSHIP RANKING OF CDP WATER FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDWATER CONSUMPTION _103-2, 103-3, 303-3, 303-5_ Using specific eco-efficiency indicators, we monitor the levels of water consumption in our units every month, relating this consumption to the quantity of products developed and sold. In addition, we have a reuse indicator that correlates the vol- ume of water consumed from reuse with the total volume of water consumed by the organization. Throughout 2019, water consumption was 4.31 m³/t, up 0.7% from the previous year. In absolute numbers, consump- tion in production processes reached 72.4 billion liters of water. WATER CONSUMPTION (m3/t)* 2002 4.14 ... 2015 2016 2017 2018 2019 4.05 3.93 3.98 4.28 4.31 * Total production excludes internal transfers of finished product Some units receive or abstract water and distribute it to Braskem and other companies. In such cases, consumption, in general, is lower than the volume of abstraction. In 2019, the profile of water supply was: CAPTURE VOLUME (MILLION m3/YEAR) SURFACE GROUNDWATER SEA PRODUCED ACQUIRED (THIRD PARTY) 20.1 2.2 0 0 61.4 < >94 BRASKEM’S WATER CONSUMPTION INDEX IN ITS OPERATIONS IS ABOUT SIX TIMES BETTER THAN THE AVERAGE FOR THE GLOBAL CHEMICAL INDUSTRY (BASE: ICCA). FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDEFFLUENT GENERATION _103-2, 103-3, 306-1_ In all of our units, wastewater management is based on discharge standards de- fined in accordance with local legislation and internal procedures. Some plants also have laboratories capable of analyzing effluents and creating internal stan- dards for assessing environmental quality. We emphasize that each region where we operate is unique, therefore, we respect their operating characteristics, including in relation to the substances of interest and composition of the effluents. These substances are listed in spe- cific legislation or in operating permits. In 2019, our eco-efficiency in the generation of liquid effluents was 1.31 m³/t, a result 10.03% worse than in the previous year and 16.3% below the target set for the year. Total generation of effluents was 21.9 billion liters. EFFLUENT GENERATION (m3/t) 2002 1.94 ... 2015 2016 2017 2018 2019 1.15 1.11 1.06 1.19 1.31 * Total production excludes internal transfers of finished product In 2019, Braskem or the treatment plants that receive our effluents, discharged, after treatment, into the following receiving bodies (in millions of m3/ year): < >95 DISPOSAL (MILLION m3/YEAR) SURFACE GROUNDWATER OCEAN THIRD PARTY (FOR USE) OTHER(1) 8.3 0 8.7 0.1 4.8 (1) ‘ Other’ represents final discharge on the soil in units in Southern Brazil. GRI does not provide this option. The factors that most influenced these results were the shutdown of the chlor-alka- li plant in Maceió (AL), scheduled and unscheduled shutdowns, higher temperatures and more intense periods of rain in some regions, severe winter in Texas (United States), low supply of raw materials in Mexico and the worsening in the quality of the water acquired, which increased consumption of water and purges in the cooling towers. OUR LIQUID EFFLUENT GENERATION INDEX WENT FROM 1.94 TO 1.31 IN THE PERIOD BETWEEN 2002 AND 2019, REPRESENTING AN AGGREGATE IMPROVEMENT OF ABOUT 32% AND AN AVOIDED COST OF OVER US$ 107 MILLION. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDSUSTAINABLE INITIATIVES In addition to all the actions carried out of our joint actions with the Customer chain within our units, we advocate the responsi- and has the potential to benefit around 70% ble use of water and innovative conservation of the rural population. The first collection solutions. The main initiatives are: demonstrated that the project has already Sewage Treatment reached the expected treatment efficiency in relation to organic matter, and the treat- We support the Mogi+Água project, creat- ed effluent was considered suitable for dis- ed by Instituto Trata Brasil and the Munic- charge into a seepage pit. ipal Agriculture Department of Mogi das The compact sanitary sewage system Cruzes (SP), which works to install portable called Gota, originating from Braskem Labs, sewage treatment plants in rural properties has been approved in 4 collection cam- in the municipality. The technology used in paigns for the sewage pilot project for ru- the program was developed by one of the startups of the Braskem Labs program and ral areas in Mogi das Cruzes (SP). Braskem continues in alignment with its sustainable helps to reduce sewage and generate water development policy, seeking to consolidate to irrigate plants and wash floors. This is one its position as a provider of solutions in ba- sic sanitation, in joint actions with its cus- tomer chain with the potential to benefit almost 70% of the rural population, repre- senting close to 23 million Brazilians who do not have access to sanitary sewage. THIS INITIATIVE IS IN LINE WITH SDG 6 CLEAN WATER AND SANITATION (GOAL 6.4) < >96 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDREUSE In addition to investing in projects that focus on reducing water consumption, we have developed actions to enhance the reuse of this resource in our production units. In 2019, a total of 25.3% of all water consumed in our operations came from reuse processes, 15% of which resulted from process improvement and 10.3% from original plant operation. These initiatives have prevented us from abstracting 10.9 billion liters of water from water sources. These numbers have remained stable in recent years, but show growth poten- tial in the medium and long term due to water security projects in the Southeast and Northeast of Brazil. TYPE OF REUSE (%) 2015 2016 2017 2018 2019 Process Improvements1 15.6% Inherent Reuse2 9.5% 15.1% 8.3% 15.4% 16.0% 15.0% 10.4% 10.3% 10.3% Total Reuse 25.1% 23.4% 25.8% 26.3% 25.3% (1) Process Improvement Reuse is anything that comes from modifications to current units, adding or improving processes. (2) Inherent reuse is everything that was originally designed with the industrial unit and is part of the original process of the plant. The previous year’s value is used due to the com- plexity of generating this number. OUR PERCENTAGE OF WATER REUSED GREW FROM 18.5 TO 25.3 BETWEEN 2011 AND 2019, REPRESENTING AN AGGREGATE IMPROVEMENT OF 37%. THIS INITIATIVE IS IN LINE WITH SDG 6 CLEAN WATER AND SANITATION (GOAL 6.4) AQUAPOLO Project Aquapolo is the result of a partnership between SABE- SP (Basic Sanitation Company of the State of São Paulo) and BRK Ambiental, and aims at transforming treated wastewater into re- claimed water for industrial activities. Its production capacity is 1,000 liters of reclaimed water/second, making it the largest proj- ect of its kind in South America and the fifth largest in the world. Between 2014 and 2019, we used close to 45 million m³ of reclaimed water due to the Aquapolo Project. A volume equivalent to 18,000 Olympic swimming pools. In Braskem’s operations in the ABC re- gion in São Paulo, practically 100% of the water is reclaimed. In addition to ensuring operational continuity, the project pro- moted better water quality, reducing operating costs for mainte- nance, treatment of liquid effluents and energy. To learn more about the project, visit www.aquapolo.com.br. < >97 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDSUSTAINABLE ENERGY _103-2, 103-3, 302-1, 302-3, 302-4_ Energy efficiency is another of our material Our energy consumption in 2019 was 11.09 GJ/t, which means an increase of 1.4% compared topics. Thus, we conceive and put into prac- to the previous year. As with the results of water tice solutions that reduce and improve ener- consumption and effluent generation, the results gy consumption in our production units, both of energy efficiency indicators were impacted by from an environmental and economic stand- events related to the shutdown of the chlor-alkali point. In October 2019, we created a Program plant in Maceió (AL), planned and unplanned shut- to leverage priority energy efficiency initia- downs, issues related to Climate Change and low tives, based on existing synergies between supply of raw materials in Mexico. the various sites, identifying opportunities Throughout 2019, we developed several projects and enabling solutions, and therefore con- with a focus on reducing energy consumption in the tributing to the low carbon strategy. industrial units. See the main initiatives below. EFFICIENCY INITIATIVES ECONOMIC GAIN (R$ MILLION) REDUCTION IN ENERGY CONSUMPTION (GJ*) Improvements in production processes (except furnaces) and sale of electricity Furnace optimization Reduction in steam consumption Improvements in boilers and turbines TOTAL 34.5 9.5 9.6 6.7 60.2 885,467 329,165 154,574 141,571 1,510,777 * The calculation methodology considers the total consumed in GJ divided by the total tonnage produced. The reduction in en- ergy consumption is due to the improvement in the ratio between product GJ consumption in the historical series. < >98 ENERGY CONSUMPTION (GJ/t) * 2002 11.90 ... 2015 2016 2017 2018 2019 10.49 10.25 10.61 10.94 11.09 * Total production excludes internal transfers of processed products OUR ENERGY CONSUMPTION INDICATOR DECREASED FROM 11.9 GJ/T IN 2002 TO 11.09 GJ/T IN 2019. THIS REPRESENTS AN AGGREGATE IMPROVEMENT OF 7% AND AN AVOIDED COST OF OVER US$ 1.7 BILLION.FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD PERCENTAGE OF CONSUMPTION BY TYPE OF ENERGY IN RELATION TO TOTAL CONSUMPTION Electricity Natural gas Other external fuels Residual internal fuels from the petrochemical process 2014 10.2% 13.0% 5.2% 71.6% 2015 9.0% 16.0% 5.5% 2016 9.0% 20.0% 6.0% 2017 9.9% 22.4% 4.7% 2018 9.1% 24.0% 6.7% 2019 8.6% 25.0% 6.4% 68.8% 65.0% 62.9% 60.2% 59.9% In 2019, the significant reduction in electricity consumption compared to previous years is due to various factors. The PERCENTAGE OF RENEWABLE ENERGY CONSUMPTION IN RELATION TO TOTAL ENERGY CONSUMPTION more relevant events were: • Shutdown of the chlor alkali plant in Alagoas, a major con- sumer of electricity • Planned shutdowns (such as Q 1 BA) and unplanned shut- downs that contributed to lower consumption of electricity Such reduction, mainly in Brazil, increases the ratio of other energy sources. < >99 2014 2015 2016 2017 2018 2019 7.17% 8.26% 7.44% 7.60% 7.11% 6.40%* * As almost all of Braskem´s renewable energy consumption comes from electricity, the reduction in consumption of this income, especially in Brazil, where the percentage of renewable sources is high, reduced significantly this indicator. PERCENTAGE OF CONSUMPTION OF RENEWABLE ELECTRICITY BASED ON CONSUMPTION OF TOTAL PURCHASED ELECTRICITY 2015 2016 2017 2018 2019 % of Renewable Electric Energy 68% 73% 76% 74% 72% The percentage of renewable sources was calculated considering the burnt hydrogen pro- duced in the chlor alkali electrolysis process as renewable, and the renewable electricity energy of each country. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDIN THE WAY OF ENERGETIC DIVERSIFICATION In 2019, we went forward the energy agenda searching for initia- tives that could improve the efficiency of our processes to make our activities more efficient in terms of energy generation and consumption, reinforcing our commitment to sustainable de- velopment and expanding the use of clean and renewable ener- gy in our operations . In Bahia, the expansion of the project Folha Larga EDF Re- newable Windfarm Complex is under construction. Located in Campo Formoso, 350 km from Salvador, the plant, which is due to be completed in 2020 and start up in 2021, will sell wind energy to Braskem for 20 years. The action will contribute to the reduc- tion of the amount of CO2 emissions by 325,000 tons through- out the contract period. In 2019, the installation of 1MWp of the 5MWp of the floating solar panels complex project was completed through a partner- ship between Braskem, Sunlution and the UNIPAC group. The cov- ered area aims to maintain or increase the electricity generation capacity of the São Francisco Hydroelectric Company (Chesf), in Sobradinho (BA), during periods of extended drought. Also in 2019, as a result of investments in the diversifica- tion of our energy mix, we started the operation of the first dis- < > 100 tributed solar power generation plant in Bahia, on a land in the Camacari Industrial Complex. The station currently has 284 so- energy purchased will be sufficient to reduce CO2 emissions by 130,000 tons over the contract period. As a forecast this project lar panels installed in an area of 2,500 sqm, adding a capacity of startup will be in 2022. 97 Wp, resulting from the implementation of the project’s first In Sao Paulo, we started by 2019 the modernization of our phase, which started in 2018. This renewable energy production plant at the ABC Petrochemical Plant. With a total estimat- supplies 27% of our Salvador´s office demand which has ap- ed investment of R$ 600 million, the purpose of the project is proximately 400 Braskem employees. The plan is to expand the to update the system that serves the cracker, replacing steam capacity to 131 kWp with the completion of the second and last turbines with high-yield electric motors. The process will also in- stage of the plant, which is underway. clude a new energy cogeneration plant powered by residual gas Yet targeting the goal of promoting local industries and in- from petrochemical production. creasing our competitiveness, we developed an energy mix For the engineering, implementation, operation and main- project for the purchase of the natural gas from the Reconcavo tenance phase of the Cogeneration Plant, we have established baiano wells, starting up on the current year, by April. Through a strategic partnership with Siemens. The term of the contract this initiative, Braskem enable the increase of on shore oil and will be 15 years and was carried out under a Build, Own and Op- gas production in the State. erate (BOO) model. On December 2019, Braskem signed a contract with the Due to the project, which should be completed in the first french Company Voltalia for the purchase of solar energy that quarter of 2021, we estimate a reduction in energy consumption will be consumed in our industrial units in Brazil for a period of equivalent to that of a city with a population of one million. In 20 years. The contract will enable the expansion of the Solar Complex named Serra do Mel in Rio Grande do Norte. The solar addition it is expected in the Complex a reduction of about 11% in water consumption and more than 6% in CO2 emissions. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDWASTE MANAGEMENT _103-2, 103-3, 301-2, 301-3, 306-2_ Aside from investing in renewable raw materials, we monitor the operation of our waste management on a monthly basis through eco-efficiency indicators that relate the amount of waste gen- erated with the amount of products produced and sold. We believe that continuous investment in renewable raw materials and correct management of waste generated in our production process is essential to the continuity and sustainable development of our business, in addition to being in line with our commitment to Circular Economy. That’s why we maximize re- use at all industrial plants through a process known as chain re- turn─– the equivalent to internal recycling. For the future, we are investing in energy and chemical recycling. Some of the main non-renewable direct materials that we use are naphtha, condensate, ethane, propane, LRH, and sodi- um chloride. We also use ethanol made from sugarcane to pro- duce ethylene from a renewable source, reducing our demand for non-renewable resources. In addition, we have strict goals for total waste generation (hazardous and non-hazardous) defined and adjusted annually for five-year periods. Also in 2019, waste generation totaled 2.20 kg/t, an increase of 3.6% in relation to 2018; however, 2.4% below the target for the year. The main causes in the year were: generation of waste below plan resulting from the postponement or improvements in maintenance and cleaning activities and the internal use of waste streams as fuel. < > 101 WASTE GENERATION (kg/t)* 2002 7.78 ... 2015 2016 2017 2018 2019 2.01 2.16 2.13 2.13 2.20 * Total production excludes internal transfers of finished product. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDWASTE DESTINATION (t) Recycling Recovery (including energy) Sanitary/industrial landfill On-site storage Incineration Reuse Composting Underground waste injection Other¹ TOTAL 2015 2016 4,628 3,975 2,804 1,859 1,713 739 274 0 3,700 7,371 7,247 9,146 1,303 8,423 482 475 1,931 17,022 2017 6,830 6,370 8,980 455 8,199 505 299 1,756 5,258 2018 7,889 3,355 15,990 1,260 7,998 457 393 899 2019 27,955 3,486 14,173 1,227 7,168 364 524 2 4,829 5,550 19,692 53,400 38,652 43,069 60,450 (1) Other: autoclave, vacuum thermal demercuration, co-processing of waste in clinker rotary kilns for cement production, soil decontamination by thermal desorption. < > 102 DESTINATION BY TYPE OF WASTE (t/year) NON-HAZARDOUS WASTE HAZARDOUS WASTE Recycled Reuse (repurpose) Composting Recovery (including energy) Incineration Underground injection Sanitary and Industrial Landfills Temporary internal storage Other¹ TOTAL 26,362 195 524 1,284 1,603 2 11,497 287 166 41,920 1,594 169 0 2,202 5,565 0 2,677 940 5,384 18,530 (1) Other: autoclave, vacuum thermal demercuration, co-processing of waste in clinker rotary kilns for cement production, soil decontamination by thermal desorption. In 2019, the total destination of waste was negatively impacted by the destination of waste stocks from previous years, major maintenance shutdowns, area/equipment recovery services, operating conditions and processes for the remediation of contam- inated areas. The positive impacts were due to process adjustments that resulted in less waste generation and changes in its treat- ment to seek better alternatives, collaborat- ing with the Zerolandfil.l Project. The waste receives the appropriate treat- ments through the suppliers selected by the company. Braskem maintains control of the information through its own processes and / or supplementing with the information pro- vided by the contractors involved. FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDCLIMATE CHANGE _103-2, 103-3, 201-2_ Within Braskem, we have adopted a comprehensive and robust strategy, and issues related to Climate Change are part of our 10 macro business goals. One of the aspirations of our Global Sustainable Development Policy is to be recognized as a leading company in matters related to the topic. Since 2008, when we structured our internal management of the topic, we have taken Mitigation and Adaptation measures to proactively detect potential risks and business opportunities re- lated to Climate Change. Our actions demonstrate that it is possi- ble for the business sector to be positively involved with the issue, driving towards the development of efficient public policies. MITIGATION PLAN In the field of mitigation, since 2008 we have managed our greenhouse gas (GHG) emissions through an annual inventory. As a result, we managed to establish internal reduction goals, which help us in the quest to be the most efficient company in terms of GHG emissions in the sector by 2030. We have also im- plemented an internal GHG pricing mechanism, through which our projects are evaluated considering an internal carbon price - in this sense, we highlight our energy efficiency projects, as they become more attractive from a financial standpoint when we consider the cost of GHG emissions. In 2009, we also made a public commitment called “It needs to ripen to be green,” in which we commit to intensify the devel- opment of the market for products that reduce global GHG emis- sions. We made efforts to develop products that use renewable sources of raw materials - for example, green PE -, which con- tributes not only to carbon sequestration, but also to other social and environmental benefits aligned with the UN 2030 agenda. BIOPOLYMERS ARE ALSO ALIGNED WITH THE 2030 AGENDA Green PE has generated and still generates jobs throughout its chain, from the field to recycling. Green PE is a case of innovation and sustainable industrialization. Green PE, besides being a 100% recyclable, is made from renewable raw material. Green PE, in addition to being 100% recyclable, is made from renewable raw material, contributing to the mitigation of GHG emissions. Direct impact on the development of new technologies and all the necessary investments made through various partnerships. < > 103 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDManagement of emissions - GHG inventory _305-1,305-2,305-3,305-5_ Our corporate GHG emissions inventory considers 100% of our global operations and, in 2019, for the 9th consecutive year, received the Gold rating of the Brazilian GHG Protocol Program (PBGHG) due to coverage of Scope 1, 2 and 3 emissions with external assurance of its 2018 inventory from an independent third party. In 2019, our absolute Scope 1 emissions totaled 9,756,560 tCO2e, a 4.5% reduction over the previous year, mainly due to the shutdown of operations at the plants in Alagoas, in addition to a general reduction in production due to the downturn cycle of the petrochemical industry. Scope 25 emissions totaled 801,634 tCO2e, a reduction of less than 0.5% compared to the previous year. In this case, in addition to the factors mentioned above and despite Braskem Scope 3 emissions in 2019 totaled 26,426,302 tCO2e, an in- crease of 10% when compared to the previous year. Since 2018, Braskem has been advancing in management of this Scope and, in 2019, we reviewed all life cycle emission factors of the prod- ucts and inputs reported as well as the operational boundaries of the business, considering Braskem S.A.’s emissions as a whole and not the individual summation of Scope 3 emissions of each having acquired in 2019 on the free market approximately 1.5 million MWh of plant, avoiding double accounting of emissions for those cases electricity generated by renewable sources, the reduction in emissions com- where we have internal transfer of raw materials. pared to 2018 was not as significant due to the increase in grid emission fac- tors, mainly in the United States. Scope 1 + 2 emissions in 2019 totaled 10,558,193 tCO2e, a reduction of 4.2% when compared to the previous year6. GHG EMISSIONS (SCOPE 3) - KtCO2e GHG EMISSIONS (SCOPES 1 AND 2) - KtCO2e 2008 12,000 2008 11,674 2013 9,771 2014 9,385 2015 9,140 2016 10,727 < > 104 Scope 1 2017 10,183 Scope 2 Location-based (all years, until 2018) 2018 10,214 Scope 2 Market-based 2019 9.757 1,017 874 1,088 1,078 1,038 1,073 803 802 4.2% 5 e 6 These emissions are from the Market-Based approach, in other words, they consider our renewable energy purchase contracts in the free market from CHESF companies, which has hydroelectric and wind generation, and Santo Antônio, a company that manages the operations of the Santo Antônio Hydroelectric Plant, on the Madeira River, in Rondônia. Braskem’s Scope 2 emissions in 2019 consid- ering the Location-Based approach totaled 892,671 tCO2e and, on the date of issue of this report, only these had been assured by an independent third party. Market-Based emissions in 2019 could not be assured due to the setbacks caused by the COVID-19 pandemic. 2013 2014 2015 2016 2017 2018 2019 11,534 11,351 15,804 17,875 20,928 24,009 26,426 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGHG emissions mitigation performance _305-1, 305-4, 305-5_ We measure our GHG mitigation performance considering a relative Scope 1 + Scope 2 emissions indicator (Market-based) in relation to the compa- ny’s total production (tCO2e/t produced). In the period between 2008 and 2019, Braskem’s GHG emissions intensity decreased by 19%, reaching 0.624 tCO2e/t, very close to the target established for 2020, of 0.600 tCO2e/t. In absolute terms, the reduction in Scopes 1 and 2 emissions in the same peri- od was 2.1 million tCO2e, equivalent to the approximate emissions from the electricity consumed in one year in the State of Bahia (Brazil). Even with the reduction in absolute Scopes 1 + 2 emissions, our indica- tor increased by 2.4% compared to the previous year. The main reason, was the drop of just over 6% in our production, driven by the internal and exter- nal events mentioned above. Unlike most sectors, our energy consumption (Braskem’s biggest source of emissions) is not directly proportional to our production and the lower the production, the worse our efficiency will be. If we had not invested in energy efficiency actions in our plants and in the purchase of renewable electricity on the free market, this increase would have been more significant. With our renewable energy contracts alone, we avoid emissions in the order of 90 thousand tCO2e in 2019. For the coming years, together with the areas of Energy, Production Engineering at the plants, and Strategy and Innovation, our efforts will be focused on mapping an additional reduction potential of 1 million tCO2e to be included in our portfolio of mitigation projects and feed our MAC Curve (Marginal Abatement Cost), a tool we use to prioritize actions. EMISSIONS INTENSITY (tCO2e/t PRODUCT) 2 7 7 0 . 5 0 7 0 . 0 4 6 0 . 5 1 6 0 . 8 2 6 0 . 0 3 6 0 . 0 3 6 0 . 4 0 6 0 . 1 4 6 0 . 3 7 5 0 . 9 0 6 0 . 4 2 6 0 . 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Performed Reference Scenario 2008 intensity < > 105 FOR THE COMING YEARS, OUR EFFORTS WILL BE FOCUSED ON MAPPING AN ADDITIONAL REDUCTION POTENTIAL OF 1 MILLION tCO2eFUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD Other mitigation actions: 1. In 2017, together with Ticket Log, we started the project to generate carbon credits from the replacement of automotive gasoline with ethanol in the fleet of corpo- rate vehicles in the state of São Paulo. To be eligible for the credits, our ethanol consumption rate must be maintained at over 95%. In 2019, Braskem’s first carbon credit certificates were obtained for having proved the use of renewable fuel (eth- anol) in at least 95% of our fleet of vehicles in São Paulo between July 1, 2017 and June 30, 2018. The certificate for the period between July 1, 2018 and June 30, 2019 has already been approved by the audit and is being issued by the credit issuer. EVOLUTION OF ETHANOL SUPPLY INDICATOR FOR THE FLEET 100% 99% 98% 96% 94% 92% 97.8% 97.7% 95% 99.2% 97.0% SEP-19 OCT-19 NOV-19 DEC-19 Ethanol Goal 2. As a fundamental part of our Climate Change strategy, in 2016 we implement- ed an internal carbon pricing mechanism. This methodology covers all projects in the “Competitiveness and Productivity” basket in Brazil based on a virtual VPL that considers our internal carbon price. Between 2017 and 2019, a total of 51 proj- ects used the methodology and, of this total, 37 projects were benefited from the investment decision considering their virtual VPL. In 2019, a new internal pricing strategy was designed, considering a global carbon price for all Braskem’s Global operations based on the shadow price and on the results on our MAC Curve. < > 106 IN 2017, TOGETHER WITH TICKET LOG, WE STARTED THE PROJECT TO GENERATE CARBON CREDITS FROM THE REPLACEMENT OF AUTOMOTIVE GASOLINE WITH ETHANOL IN THE FLEET OF CORPORATE VEHICLESFUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDUS$ 55 MILLION POTENCIAL PHYSICAL IMPACTS AVOIDED ADAPTATION PLAN As for the field of adaptation, Climate Change and proper management of our impacts are matters of The Adaptation Plan, which aims to reduce to zero the climate risks classified as "high" by 2023 and business continuity. In 2016, we completed a study to maximize business opportunities, has evolved posi- identify risks and opportunities in 100% of our opera- tively and the projects implemented up to 2019 have tions. This study allowed us to develop an Adaptation reduced potential physical impacts quantified at ap- Plan with actions to mitigate or reduce the most sig- proximately US$ 55 million. nificant climate risks, classified as “high” in our matrix. Some examples of projects that have already Based on the climate risk scenarios and models been implemented and have contributed to reducing used, we identified 58 potential high-risk threats to our vulnerability to climate change are: evaluation and the business by 2040 with a potential financial im- improvements in lightning protection systems (SPDA); pact of approximately US$ 175 million, 36 in Brazil, 16 slope recovery to direct water flow and protect against in Mexico and 6 in the United States (numbers revised flooding; contracting of alternative renewable sourc- in 2019), for which 110 specific adaptation actions es of electricity in order to reduce the dependence on were outlined, both in management and engineering. hydroelectric sources in scenarios of water scarcity. POTENTIAL THREATS TO THE BUSINESS BY 2040 -1 -2 54 US$ 120 millions -1 US$ 175 millions Brazil: 36 USA: 6 Mexico: 16 Germany: 0 60 58 S K S I R H G H I 50 40 30 20 10 0 2017 < > 107 Extreme sea level events Hurricanes and extratropical cyclones Epidemics Water stress and drought Blizzard and heavy rain Cold/heat waves Water stress and electricity generation Heavy rain, lightning (thunder) Heavy rain, waver high 39 24 12 2019 2020 2021 2022 2023 0 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD OTHER HIGHLIGHTS 2019 HIGHLIGHTS 1. At the end of 2019, we were invited to take part in the Expert Advisory group responsible for developing the global method of the Science Based Target Iniciative for the Chemical sector (SBTi-Chemicals), which should be ready by early 2021, contributing to the establish- ment of goals for reducing GHG emissions, in line with the goals of the Paris Agreement, based on scientific evidence. 2. Since 2016, Braskem has been classified as a leading company in the CDP Climate, a questionnaire focused on managing the cli- mate crisis by companies, aimed at different types of investors (2016 to 2018: A List; 2019: A-). 3. Since 2008, we have integrated the Global Compact Network Bra- zil Committee and, since 2013, the Global Compact LEAD group, in addition to being part of UNIDO's Green Industry Platform ini- tiatives and of Global Compact Caring for Climate. In addition, we assumed the coordination of the Technical Group on Energy and Climate of the Global Compact Network Brazil in 2017. < > 108 SUPPLIER ENGAGEMENT Throughout 2019, we continue to motivate the engagement of our Suppli- ers critical to the issues of Climate Change. This joint effort increases the chain’s power through initiatives such as reporting targets to reduce emis- sions and the Suppliers themselves voluntarily pass on this commitment to their partners. We encourage our Suppliers to join the Action Exchange, of the CDP Supply Chain, a free consultancy that identifies opportunities to reduce costs, emissions and energy consumption in the processes. 60 % of engaged Suppliers reported initiatives to reduce emissions 39.53 % of engaged Suppliers reported targets 57 % of engaged suppliers identified risks 47 % of Suppliers engaging their suppliers 229 Suppliers invited by Braskem answered the Climate questionnaire in 2019 (55% of the total number of guests) FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDOTHER EMISSIONS _305-6, 305-7_ At Braskem, in addition to being concerned with greenhouse gas emissions, we monitor other air emissions, such as ozone depleters7 and pollutants from fuel burning, such as NOX, SOX, among others. Braskem has also been replacing ozone deplet- ing substances with other substances outside the Montreal Protocol lists. EVOLUTION OF OZONE DEPLETING SUBSTANCES (ODS) EMISSIONS ODS 2015 (t) 2016 (t) 2017 (t) 2018 (t) 2019 (t) Tons of CFC-11 Equivalent 55.3 3.0 1.7 2.9 2.6 EVOLUTION OF EMISSIONS OF SOX, NOX, AND OTHER SIGNIFICANT SUBSTANCES (TONS) EMISSIONS(1) 2015 (t) 2016 (t) 2017 (t) 2018 (t) 2019 (t) NOX SOX 9,909 4,496 Volatile Organic Compounds(2) 3,808 Particulate Matter Toxic Air Pollutants(3) Other(4) 911 652(2) 14,499 10,093 10,926 3,130 6,139 859 531 4,145 3,779 6,754 911 677 4,746 10,566 4,871 9,091(2) 1,381 595 7,989 11,529 3,982 8,753 932 551 6,622 < > 109 factors) based on recognized methods, such as AP-42 from USEPA, are used. (2) The plants have been broadening their assessments. This explains the increase in these parameters. (3) Includes Toxic Air Pollutants and HAP (4) Includes total hydrocarbons and carbon monoxide. (1) The methodologies used are recommended by local environmental agencies. For those place where there is no measurement, estimates (emission The reduction in emissions of SOX and Particulate Matter occurred due to the lower consumption of coal in Q2 RS’s energy mix as a result of the mainte- nance outages in coal-fired boilers and greater use of the natural gas boiler. On the other hand, the higher consumption of NG and the outages led to an increase in NOX emissions by thermal dissocia- tion. In any case, the emissions are with- in the legal standards applied to the unit. 7 Ozone depletion refers to a decline in the to- tal volume of ozone in the Earth’s stratosphere (the ozone layer) FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI STANDARDS CONTENT SUMMARY _102-55_ < > 110 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure GENERAL DISCLOSURES Page and/or answer Global Compact Principles 102-1 - Name of the organization 102-2 - Activities, brands, products, and services 102-3 - Location of headquarters 102-4 - Location of operations 102-5 - Ownership and legal form 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 102-11 - Precautionary Principle or approach 102-12 - External initiatives 102-13 - Membership of associations 102-14 - Statement from senior decision-maker 102-15 - Key impacts, risks, and opportunities 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 102-40 - List of stakeholder groups GRI 102: General Disclosures 8 8 125 8 Braskem was formed in August 2002 from the merger 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 http:www.braskem.com.br/material-issues-assessement for more details. 8 8, 41 66 34, 80, 81 There were no significant changes in the reporting period. 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 of the product on the environment. 15, 16, 17, 19 15, 16, 17 4 28 24, 27 24, 30 24, 27 Braskem’s Chairman of the Board of Directors is not a managing director at Braskem. According to Article 19, Sole Paragraph of the Company’s Bylaws “The position of Chief Executive Officer and Chairman of the Board of Directors may not be held by the same person, except in the cases and under the terms set forth in the Regulations.” Regulation = Level 1 Listing Regulation of BM&FBovespa. Pages: 24, 27 Members (including Company leaders), Funders, Customers, Suppliers, Academia, Local Stakeholders (NGOs, Community, Trade Associations), Opinion Formers (Government, Press), and the General Public. Visit www.braskem.com.br/materialidade-sustentabilidade for more details. 102-41 - Collective bargaining agreements 69 8 8 8 8 8 6 4 3 < > 111 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure Page and/or answer Global Compact Principles 102-42 - Identifying and selecting stakeholders Identification and selection of our stakeholders for engagement was based on groups of influencers and facilitators, on those who play an impacting role and those who benefit from the relationship with the Company. Visit http:// www.braskem.com.br/material-issues-assessement for more details. 102-43 - Approach to stakeholder engagement Visit http://www.braskem.com.br/material-issues-assessement 102-44 - Key topics and concerns raised Visit http://www.braskem.com.br/material-issues-assessement 102-45 - Entities included in the consolidated financial statements Visit http://www.braskem-ri.com.br/annual-reports | Page: 34 102-46 - Defining report content and topic Boundaries Visit http://www.braskem.com.br/material-issues-assessement 102-47 - List of material topics Visit http://www.braskem.com.br/material-issues-assessement 102-48 - Restatements of information There were no significant changes in the reporting period. GRI 102: General Disclosures 102-49 - Changes in reporting There were no significant changes in the reporting period. 102-50 - Reporting period 102-51 - Date of most recent report 102-52 - Reporting cycle January 1st to December 31st, 2019. 2018 The report is prepared annually. 102-53 - Contact point for questions regarding the report imprensa@braskem.com 102-54 - Claims of reporting in accordance with the GRI Standards 102-55 - GRI content index 102-56 - External assurance This report was prepared in accordance with GRI Standards: Core option. 110 External assurance is carried out by KPMG, an external and independent company, and is performed at the request of the Leaders and is part of the set of annual goals of those responsible for preparing the report. | Page: 122 MATERIAL TOPIC ECONOMIC PERFORMANCE Macro objectives: Economic-financial results < > 112 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach GRI 201: Economic Performance 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 201-1 - Direct economic valuegenerated and distributed 201-2 - Financial implications and other risks and opportunities due to climate change 201-4 - Financial assistance received from government 43 43 43 103 84 7 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGlobal Compact Principles 6 6 GRI Standard Disclosure MARKET PRESENCE Macro objetive: Local Development Page and/or answer 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach GRI 202: Market Presence 103-2 - The management approach and its components 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 objetive: Local Development 67 67 67 67 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach GRI 203: Indirect Economic Impacts 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 203-1 - Infrastructure investments and services supported PROCUREMENT PRACTICES Macro objetive: Local Development 70 70 70 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach GRI 204: Procurement Practices ANTI-CORRUPTION 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 204-1 - Proportion of spending on local suppliers Macro objetive: Strengthening practices 80 80 80 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 27 27 < > 113 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure Page and/or answer 205-2 - Communication and training about anti-corruption policies and procedures 27 GRI 205: Anti-corruption 205-3 - Confirmed incidents of corruption and actions taken ANTI-COMPETITIVE BEHAVIOR Macro objective: Strengthening practices In November 2019, José Carlos Grubisich, former President of Braskem, was arrested on charges of participating in a bribery scheme to secure government contracts. Braskem’s role in this regard has remained the same since 2016, when the company signed the leniency agreement with the Brazilian, Swiss and North American authorities. During this period, we fulfilled all obligations under the agreement, including the external monitoring that evaluated our Compliance Program, a process finalized in 2019 and certified by the Federal Prosecutors Office in March 2020. Page: 30 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach -- -- 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. MATERIALS Macro objective: Renewable Resources 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach GRI 301: Materials ENERGY 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 301-2 - Recycled input materials used 301-3 - Reclaimed products and their packaging materials Macro objective: Energy efficiency 101 101 35, 101 101 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 302-1 - Energy consumption within the organization GRI 302: Energy 302-3 - Energy intensity 302-4 - Reduction of energy consumption 98 98 98 98 98 Global Compact Principles 10 10 8 8 7 and 8 8 8 and 9 < > 114 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure Page and/or answer WATER Macro objective: Water efficiency 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 303-1 - Interactions with water as a shared resource 303-2 - Management of water discharge-related impacts GRI 303: Water 303-3 - Water withdrawal 303-4 - Water discharge 303-5 - Water consumption BIODIVERSITY Macro objective: Strengthening practices 93 93 93 93 93, 94 93 93, 94 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach -- -- 304-2 - Significant impacts of activities, products, and services on biodiversity GRI 304: Biodiversity 304-4 - IUCN Red List species and national conservation list species with habitats in areas affected by operations EMISSIONS Macro objective: Energy Efficiency In 2018, there were no significant impacts on biodiversity (valid for Mexico, where this aspect is material). Braskem performs activities on some of its sites that guarantee the preservation of species, such as the units in the South of Brazil that have in their area a stretch of riparian vegetation and, next to it, an environmental protection park monitored and controlled by the company. Results show that industrial activities do not affect the local ecosystem. The protection station also has environmental education programs in place that help to increase awareness about preservation. The complex in Mexico has two species that are listed on the IUCN red list: Ceratozamia miqueliana (Endangered) and Zamia loddigesii (Near Threatened). It is worth mentioning that these species were rescued by the company during the construction of the complex from 2012 to 2016 and are now in a conservation area. 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 104 104 Global Compact Principles 7 and 8 8 8 8 < > 115 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure Page and/or answer 305-1 - Direct (Scope 1) GHG emissions 305-2 - Energy indirect (Scope 2) GHG emissions 305-3 - Other indirect (Scope 3) GHG emissions 104, 105 104 104 Global Compact Principles 7 and 8 7 and 8 7 and 8 GRI 305: Emissions 305-4 - GHG emissions intensity All gases regulated by the Kyoto Protocol are considered when accounting for emissions. Page: 105 8 305-5 - Reduction of GHG emissions 305-6 - Emissions of ozone-depleting substances 305-7 - Nitrogen oxides (NOX), sulfur oxides (SOX), nd other significant air emissions 104, 105 109 109 EFFLUENTS AND WASTE Macro objective: Security 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach GRI 306: Effluents and Waste 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 306-1 - Water discharge by quality and destination 306-2 - Waste by type and disposal method ENVIRONMENTAL COMPLIANCE Macro objective: Strengthening practices 95 95 95 101 8 and 9 7 and 8 7 and 8 8 8 < > 116 GRI 103: Management Approach GRI 307: Environmental Compliance 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 20 20 307-1 Non-compliance with environmental laws and regulations In August 2019, a Public Civil Action was filed by the Federal Public Ministry in Alagoas (MPF / AL) against Braskem and other defendants. The plaintiff claims compensation for social and environmental damages caused by geological events in Alagoas and also payment of damages for the amount of R $ 28.7 billion. Non-monetary sanctions and processes brought about by arbitration mechanisms are monitored by each of the Company’s Business Units, so the indicators are regional and non-corporate and therefore are not addressed in the report. Page: 20 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure Page and/or answer Global Compact Principles SUPPLIER ENVIRONMENTAL ASSESSMENT Macro objective: Strengthening practices GRI 103: Management Approach GRI 308: Supplier Environmental Assessment EMPLOYMENT 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 80 80 308-1 - New suppliers that were screened using environmental criteria Less than 1%. In 2018, Braskem started a pilot project to implement the Sustainable Procurement Tool. This tool is applied to suppliers identified as critical in the Risk matrix and makes it possible to incorporate sustainability criteria into the bids. The tools allow comparing suppliers on environmental and social criteria. The result of the evaluation is one of the criteria for bidding decisions. For now, Procurement uses only a few categories of Services, and the intention is to extend its application to other categories in 2020. Page: 80 Macro objective: Economic-financial results 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 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 GRI 401: Employment 401-3 - Parental leave OCCUPATIONAL HEALTH AND SAFETY Macro objective: Secutity 67 67 67 Life insurance, health plan, disability and incapacity benefits, parental leave, pension/private pension fund, stock purchase plan, among others. There is no distinction between benefits offered to full-time, temporary and part- time employees, which are offered from the moment they are hired. In Brazil, we track the number of maternity leaves and the percentage of terminations up to one year after returning from the leave. Number referring to Members in Brazil who returned from maternity leave from January to December 2019: 67 returns and 1 termination post-return. Number referring to Members in Brazil who returned from maternity leave in the previous period (2018): 80 returns. Number of Members who stayed with Braskem at least 1 year after returning to work: 73. The retention rate was 91% (leaves for cases of abortion were not considered). This indicator is not measured in other countries. 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 85 85 8 6 6 < > 117 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure Page and/or answer Global Compact Principles 403-1 - Occupational health and safety management system 403-2 - Hazard identification, risk assessment, and incident investigation 403-3 - Occupational health services 403-4 - Worker participation, consultation, and communication on occupational health and safety 403-5 - Worker training on occupational health and safety 85 87 87 87 87 GRI 403: Occupational Health and Safety 403-6 - Promotion of worker health 403-7 - Prevention and mitigation of occupational health and safety impacts directly linked by business relationships To promote the employee’s non-occupational health, Braskem offers health plan, which covers general and dental services. Braskem requires its contractors, in the services agreements, to offer health insurance. In addition to health insurance, Braskem promotes other actions to support health, such as: vaccination campaigns, quality of life tests, occupational medical assistance, nutritional monitoring, gym, among others. To support the promotion of non-occupational health to employees, Braskem offers a health plan, which covers general and dental services. For contracted companies, Braskem requires health insurance under a service provision contract. Customers and downstream users can find information about substances that contain OEL (Occupational Exposure Limit) in the Braskem Safety Data Sheet. They also obtain the necessary engineering control measures and personal protective equipment from Braskem’s Safety Data Sheets. 403-8 - Workers covered by an occupational health and safety management system All Braskem Members and Contractors are covered by the occupational health and safety management system. 403-9 - Work-related injuries 403-10 - Work-related ill health TRAINING AND EDUCATION Macro objective: Strengthening practices 87 87 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement < > 118 GRI 103: Management Approach GRI 404: Training and Education 103-2 - The management approach and its components 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 63 63 63, 68 69 6 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGlobal Compact Principles 6 GRI Standard Disclosure Page and/or answer DIVERSITY AND EQUAL OPPORTUNITY Macro objective: Strengthening practices 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach GRI 405: Diversity and Equal Opportunity 405-1 - Diversity of governance bodies and employees NON-DISCRIMINATION Macro objective: Strengthening practices 63 63 63 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 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 RIGHTS OF INDIGENOUS PEOPLES Macro objective: Local Development 30 30 24, 30, 31 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach -- -- < > 119 GRI 411: Rights of Indigenous Peoples 411-1 - Incidents of violations involving rights of indigenous peoples No incidents were identified in the reporting period. Considering that traditional populations (fishermen and quilombolas) live in communities close to Braskem’s operations in the Port of Aratu, some initiatives have been taken to prevent damage, promote sustainability, and establish a relationship of dialogue and trust with these communities. LOCAL COMMUNITIES Macro objectives: Local Development 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 20, 70 20, 70 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure Page and/or answer 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 SUPPLIER SOCIAL ASSESSMENT Macro objective: Strengthening practices 20, 70 20, 89 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 80 80 GRI 414: Supplier Social Assessment 414-1 - New suppliers that were screened using social criteria PUBLIC POLICY Macro objective: Strengthening practices Less than 1%. In 2018, Braskem started a pilot project to implement the Sustainable Procurement Tool. This tool is applied to suppliers identified as critical in the Risk matrix and makes it possible to incorporate sustainability criteria into the bids. The tools allow comparing suppliers on environmental and social criteria. The result of the evaluation is one of the criteria for bidding decisions. For now, Procurement uses only a few categories of Services, and the intention is to extend its application to other categories in 2020. Page: 80 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 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 objective: Security -- -- Zero 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach GRI 416: Customer Health and Safety 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 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 91 91 100% of impacts are assessed. Page: 91 In 2019, Braskem had 2 cases of non-compliance with regulations resulting in a fine, with corrective actions completed. There was 1 incident of non-compliance with regulations that resulted in a notice, also with corrective actions completed. The company had no cases of non-compliance with voluntary codes. Page: 91 Global Compact Principles 2 10 < > 120 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDGRI Standard Disclosure Page and/or answer Global Compact Principles MARKETING AND LABELING Macro objective: Strengthening practices 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach 91 91 417-1 - Requirements for product and service information and labeling The labeling information corresponds to the SDS information (GHS format) and is handled by each site. The internal procedure used is ANX 6020-00840 - Information on chemical risks. 100% of the significant product categories are assessed according to Braskem’s standards and procedures. In addition, they are audited as part of the Braskem Integrated Management System. Page: 91 GRI 417: Marketing and Labeling 2016 417-2 - Incidents of non-compliance concerning product and service information and labeling 417-3 - Incidents of non-compliance concerning marketing communications SOCIOECONOMIC COMPLIANCE Macro objective: Strengthening practices Braskem had 1 incident of non-compliance with regulations that resulted in a notice, with corrective actions completed. The company did not have any events of non-compliance with regulations that resulted in fine nor did it record cases of non-compliance with regulations or voluntary codes in 2019. Page: 91 Zero. The Company declares non-existence of non-compliance with regulations and voluntary codes regarding marketing communications, including advertising, promotion, and sponsorship, broken down by type of results. Page: 91 103-1 - Explanation of the material topic and its Boundary www.braskem.com.br/material-issues-assessement GRI 103: Management Approach 103-2 - The management approach and its components 103-3 - Evaluation of the management approach -- -- GRI 419: Socioeconomic Compliance 419-1 - Non-compliance with laws and regulations in the social and economic area Braskem has lawsuits in the aforementioned period, whether environmental or regulatory, however, the Company does not have definitive decisions on significant fines during the period questioned. For this report, the same criteria used in the “Reference Form” instituted by the “Securities and Exchange Commission” (CVM) was adopted, pursuant to IN CVM 480/209 - R$ 50 million. Among the lawsuits in Alagoas, there are no cases concluded in 2019 that impose the payment of a fine above R$ 50 million. Non-monetary sanctions and processes brought about by arbitration mechanisms are monitored by each of the Company’s Business Units, so the indicators are regional and non-corporate and therefore are not addressed in the report. < > 121 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD< > 122 _102-56_ FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD< > 123 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD< > 124 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORDCORPORATE CREDITS _102-3_ Vice President of People, Marketing & Corporate Communications and Sustainable Development MARCELO ARANTES DE CARVALHO Director of Marketing & Corporate Communications ANA LAURA SIVIERI Director of Sustainable Development JORGE SOTO Marketing & Corporate Communications Supervision ANA LUIZA LEITE, CAROLINA PIGNATA AND PEDRO SOBRAL Sustainable Development Supervision MARIO PINO, LUIZ CARLOS XAVIER AND KARINA YUKARI NAKAMURA Analysis of Indicators, Project Development, and Content Production KEYASSOCIADOS Graphic Design and Layout MAGENTA LAB Assurance KPMG For more information about this report, please contact imprensa@braskem.com _102-53_ < > 125 Headquarters Rua Lemos Monteiro, 120 Butantã - Sao Paulo (Sao Paulo) ZIP Code: 05501-050 _102-3_ Photos BRASKEM ARCHIVE AND GETTYIMAGES Translation GOTCHA! IDIOMAS FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD< > 126 FUTURE-ORIENTEDBUSINESS PERFORMANCEVALUE CREATIONRESPONSIBLE PRODUCTION GRI STANDARDS CONTENT SUMMARYGOVERNANCE AND COMPLIANCE INNOVATIVE AND SUSTAINABLE SOLUTIONSRESPONSIBLE PERFORMANCECORPORATECREDITSLETTER FROM THE BUSINESS LEADERFOREWORD

Continue reading text version or see original annual report in PDF format above