Braskem S.A.
Annual Report 2020

Plain-text annual report

INTEGRATED REPORT 02 Contents A Message from the Business Leader Capital Performance Braskem Geographical Footprint Organizational Culture Corporate Governance Business Model Highlights 2020 Strategic Planning Risk Management Challenges of the Covid-19 Pandemic Focus on Sustainable Development Financial Capital Manufactured Capital Intellectual Capital Human Capital Social and Relationship Capital Natural Capital About the Report Materiality ESG Dashboard Credits Striving for transparency in our communication to investors, customers, suppliers, associates and the communities where we operate, this enhanced report combines our Annual Report, featuring the company's sustainability indicators, and the Integrated Report providing relevant information to investors and other parties in the financial market. This new model was designed to communicate our intentions and actions more clearly and concisely, showing how we generate value for the organization, our stakeholders and society. This report and its annexes present our main results in 2020 and the socio-environmental indicators associated with our production processes. Enjoy the read! INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSA MESSAGE FROM THE BUSINESS LEADER 03 A Message from the Business Leader GRI 102-14 Roberto Simões Braskem's Business Leader The year 2020 was marked by uncertainties and atyp- ical volatilities. The global spread of the Covid-19 and the consequent lower global demand for fuels impacted oil prices on the international market. While the huge drop in demand forced us to reduce the capacity of our factories during the first half of the year, in later months the global petrochemical industry bounced back stron- ger than expected, with strong demand for thermoplas- tic resins. The combination of higher consumption of plastic materials, supply constraints and falling naphtha prices led to healthier spreads. In this context, we ended the year with strong gener- ation of operating and financial results. Regarding our focus on people, we worked to combat the pandemic while seeking to support our entire value chain, and we have made significant progress related to the geological phenomenon in Alagoas. We also renewed our long-term goals, emphasizing sustainability as a strategic pillar for our business and maintained our support to the UN Global Compact and its principles. Throughout 2020, we continued to focus on our objec- tives: improving people's lives by creating sustainable chemical and plastic solutions, capturing opportunities and creating value for all stakeholders in our chain, and addressing concerns regarding the future of the planet and society. AGILITY AND COOPERATION IN FIGHTING THE PANDEMIC We have adopted a series of measures to safeguard people's health, protect the efficiency of our industri- al and commercial operations and preserve our cash. With the safety of employees and third parties in mind, we took measures to protect those who were at the greatest risk, operating with small teams and adopting strict security protocols to prevent Covid-19 transmis- sion. We soon had 100% of our corporate teams work- ing from home, since workplace flexibility practices have been in place for some years as part of our digital transformation. We worked even closer with our value chain, supporting them so they can not only survive but come out of this challenging period safe and strong. Despite the tempo- rary reduction in the use of our capacities, we met the needs of our customers and the markets in which we operate thanks to the synergies between our global units. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSA MESSAGE FROM THE BUSINESS LEADER 04 We also provided a R$ 1 billion line of credit with special conditions for our customers, analyzing their needs case by case. We donated approximately R$ 11 million to sur- rounding communities and society at large in products or financial support in global actions against Covid-19. Additionally, we adopted measures to preserve our cash, for example, by reducing investments and fixed expens- es and optimizing working capital with relevant suppliers. As shelter-in-place measures were gradually lifted after the first pandemic wave, the global economy responded with strong recovery and increased demand for thermo- plastic resins, mostly driven by the sectors of greatest consumption during the pandemic - packaging and med- ical applications. In addition, we postponed the start of operations of new capacities in the global petrochemical market, given the uncertainties associated with the evo- lution of the pandemic. These combined factors allowed us to resume normal manufacturing and commercial operations by the end of June, closing 2020 with a quar- terly record of resin sales in the Brazilian market and sales growth in the United States, Europe and Mexico, leading to an operating recurring result of approximately R$ 11.0 billion and R$ 1.3 billion in free cash generation. FOCUS ON BUSINESS STRATEGY productivity and competitiveness, we reduced the rate of accidents with and without leave by 27% compared to 2019, reaching the best result in the last four years and underscoring our non-negotiable commitment to ensuring safety for people. This improved safety record reflects the stronger commitment from all levels of leadership and the success of our Human Reliability Pro- gram, aimed at minimizing failures and losses in opera- tional processes through extensive awareness-raising and training for internal teams and third parties working in the plants. In addition, we renewed contracts for the supply of naphtha, ethane and propane to petrochemical plants in Brazil and implemented Transform for Value, a program designed to coordinate, accelerate and focus on the company's main process and productivity improvement initiatives, capturing an estimated cost savings of US$ 55 million per year in 2020. Regarding feedstock and supplier diversification we mitigated the effects of the shortage of raw materials for our operations in Mexico through the Fast-Track project for importing ethane from the United States, accounting for 9% of the plant utilization rate and sup- plying approximately 35,000 tons of imported ethane in the last quarter of 2020. utilization rate by the end of the year. This new capac- ity reinforces our leadership in the USA polypropylene market and makes us the largest producer in the Ameri- cas. The new plant enhances our balanced profile in raw materials, featuring propylene as the most relevant raw material for our global operations. Regarding the geological event in Alagoas, we reaf- firmed our commitment to the safety of people and communities in the areas in which we operate and we moved forward with the Financial Compensation and Relocation Support Program. By the end of 2020, we had relocated about 9,200 families in the neigh- borhoods affected by the geological phenomenon and presented approximately 3,500 compensation proposals, 99.7% of which were accepted. Reaching agreements with the authorities, we extinguished two public civil actions against Braskem and provisioned approximately R$ 9.2 billion to date for the relocation and compensation of families, as well as infrastructure works and the repair of environmental, urban and social impacts in the affected areas, among other actions. On the operational front, we resumed the production of our chlorine-soda plant in Maceió, and will return to integrated PVC and caustic soda production in the state of Alagoas in 2021, now using imported salt as a raw material. In corporate strategy, we made important advances in initiatives related to our defined strategic pillars. In We also advanced in geographic diversification, with the start of operations of the new polypropylene plant (Delta Project) in La Porte, Texas, ramping up to 90% Aligned with ethical and governance principles, we ob- tained the independent monitorship certificate issued by the Brazilian Federal Public Ministry, the United INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSA MESSAGE FROM THE BUSINESS LEADER 05 States Department of Justice (DoJ) and the Securi- ties and Exchange Commission (SEC), attesting that we have complied with the obligations of the global agreement signed with the authorities and confirming that we have implemented an effective and robust Compliance Program. In fact, the program has been recognized by Brazilian public institutions and will serve as a model for other leniency agreements to be signed in the country. In relation to financial health and discipline in the allo- cation of capital, we ended the year with positive cash generation thanks to our strong operating result and robust cash position (US$ 2.9 billion), with sufficient li- quidity to cover debt maturity over the next 84 months. In parallel, our deleveraging plan reduced corporate leverage from 4.71x in 2019 to 2.94x in 2020. A MORE SUSTAINABLE FUTURE, TODAY In 2020, we approved our Global Sustainable Develop- ment Strategy, which publicly consolidates our medium -and long-term objectives regarding the material topics for our business and aligned with the UN Sustainable Development Goals and the Paris Agreement. As part of this strategy, we expanded our efforts to intensify our contribution to a Circular Carbon Neutral Economy. Our goals are to achieve carbon neutrality by 2050, reduce scope 1 and 2 GHG emissions by 15% by 2030, and in- crease sales of our products with recycled content to 1 million tons/year by 2030. OUTLOOK FOR 2021 We will follow a clear action plan with clearly defined and monitored goals, based on a broad portfolio of in- vestment and research projects related to sustainabil- ity. We already made significant progress during 2020, mainly in combating climate change and eliminating plastic waste. We celebrated the 10th anniversary of our Green PE, internationally recognized for combining a renewable raw material with CO2 capture capacity, reaching a historical sales record of 170,000 tons. Reinforcing our commitment to combining sustainability with business, we announced the expansion of our production of green ethylene, the raw material made from sugarcane etha- nol used to produce Green PE. We also signed contracts for the purchase of competitive renewable energy, reaching an estimated 1.5 million avoided CO2 emissions, and we announced partnerships to enable studies on carbon capture technologies. On the plastic waste frot, we announced partnerships that will make it possible to sort and mechanically re- cycle such waste, and moved forward in a partnership for enhanced chemical recycling technology. In addi- tion, we expanded global sales of resins with recycled content, growing 284% compared to 2019 to a total of 7.3 ktons sold. Progress in treatments and vaccines against Covid-19 to control the number of cases and new variants will be a key factor for the effective global economic recov- ery. The likely petrochemical scenario includes health- ier resin spreads in 2021, with sustained strong global demand. Chemical and plastic solutions will remain essential in 2021 and beyond, and we at Braskem will move on to implement the initiatives of our strategic pillars. Our key areas of focus will be to ensure safe operations, advance in actions related to the geolog- ical phenomenon in Alagoas, find a definitive solution for the supply of ethane to our operations in Mexico, maintain our financial health, accelerate innovation and digital transformation and implement our com- mitments to sustainable development. We are firmly committed to delivering value to all our stakeholders, today and in the future. Roberto Simões Braskem’s Business Leader INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS BRASKEM 06 Braskem Geographical Footprint Organizational Culture Corporate Governance Business Model Highlights 2020 Braskem SA is a global company that aims to improve people’s lives by creating sustainable solutions through chemicals and plastic. Our company was founded in 2002, and today we are the sixth largest petrochemi- cal company worldwide, the leader in the Americas in the production of thermoplastic resins and the global leader in the production of biopolymers. GRI 102-1 Cracking large-molecule petroleum derivatives, natu- ral gas and ethanol, we produce basic chemical in- puts, such as ethylene, propene, butadiene, benzene, toluene, paraxylene, cumene, gasoline and caustic soda; and plastics, such as polyethylene (PE), polypro- pylene (PP) and polyvinyl chloride (PVC). Our products are sold to companies in different industries, and then transformed into a variety of solutions for health, mobility, food, infrastructure and consumer goods. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSBRASKEM 07 Our industry GRI 102-2, 103-2, 103-3 | 301 Chemicals and plastic are part of a great number of simple and complex daily activities, and indis- pensable for many other industries. That is why the petrochemical sector is considered essential for the global economy, and even more so during the pandemic as chemicals and plastic are indis- pensable elements in the production of hospital items, hygiene products and packing. Our sector is highly sensitive to global changes in supply and demand, and therefore cyclical - there are peaks when demand is greater than supply, leading to higher profit margins. Likewise, slack periods bring lower margins. Today our industry is experiencing lower polyethyle- ne prices due to the entry of new petrochemical plants in the US and Asia, with new capacities affec- ting the global supply and demand relationship. Our diversification strategy is designed to mitigate the effects of this cycle. Find out more about our work in this sector and the competitive scenario in this market in our Reference Form Annual Reports. PRODUCTS FLOWCHART Naphtha Ethanol Ethane Propane Propylene Ethene S L A I R E T A M W A R I S N F E L O Y L O P S L Y N V I I S L A C M E H C S T C U D O R P PE Green PE PP UTEC PCR Chlorine-soda PVC EDC Ethene Propylene Butadiene Paraxylene Benzene Toluene Solvents Gasoline Other chemicals* S N O I T A C I L P P A Adhesives Crop defensives Aluminum Rubber Footwear Automotive fuels Construction Home appliances Pharmaceutical and hospital items Lubricants Furniture and floors Packaging and bags Steel mills Covers Paint Pipes and fittings Household items *High Purity Propane, Orthoxylene, Isoprene, Butene1, Hydrogen, ETBE / MTBE, Aromatics, among others. Housing and infrastructure Performance improvement and cost reduction Availability of water and sanitation Higher efficiency at lower cost I S T N E M E R U Q E R Y E K Health Agriculture and food Mobility Greater durability and impact resistance, lower cost and rejection in the human body, less contamination and greater hygiene Increased productivity, with lower water costs and reduced food waste S T I F E N E B Greater passenger safety, corrosion protection, fuel economy and lower rate of pollutant emissions into the atmosphere INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS BRASKEM 08 Geographical Footprint GRI 102-4, 102-6, 102-7 We have a global presence, with 41 industrial units spread over Brazil, Mexico, the United States and Europe, and 14 business offices worldwide, including our Head Office in São Paulo. We achieve results through a committed team of 8,000 team members in 11 countries. Our annual capacity is 10.7 million tons of chemicals and 9.3 million tons of thermoplastic resins. This wide and diversified product portfolio is transformed by our clients in more than 87 countries. United States 2 offices • Philadelphia • Houston 6 industrial plants Latin America 5 offices • Lima (Peru) • Santiago (Chile) • Bogota (Colombia) • Cidade do Mexico (Mexico) • Buenos Aires (Argentina) Mexico 4 industrial plants Europe 1 office • Rotterdam (The Netherlands) 2 industrial plants (Germany) Brazil 4 offices • Salvador • São Paulo • Rio de Janeiro • Porto Alegre 29 industrial plants Asia 2 offices • Singapore • India INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSOrganizational Culture GRI 102-16 We are a human-oriented company, and we aim to be rec- ognized as one of the best companies to work for by 2025. Our culture is based on diversity, inclusion, equity, respect, trust and empathy. Since 2019, our values have been trans- lated into the seven BeUx pillars that represent our value proposition to associates: BRASKEM 09 1. You play the leading role Our relationships are based on trust, and this is the key to transformation. We encourage our team members to make a difference every day as they take actions and make decisions. 2. Challenge and be challenged We encourage our associates to question the way things are done and to challenge themselves and others to do better every day. We believe that we only grow and learn by interacting with each other. 4. Build your own path There is no single track for personal, professional and company growth. Our associates are encouraged to chart their own route and make challenging choices that will push them out of their comfort zone. 5. Grow with us There are many opportunities for growth. Our associa- tes are motivated to try and go further and as part of an ethical, transparent and prosperous company. 3. Co-create your ideas We must work as a team to reach our desired goal of innovation. If a team member has an idea, they should share it and then make it happen. 6. Take pride in what you do We are part of sustainable solutions that improve pe- ople's quality of life and help develop the communities where we operate. 7. Be free to be you Our key values include unconditional respect for indivi- duals and diversity. We value each associate and encou- rage them to be who they are, providing equal opportu- nities for all. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS BRASKEM 10 Corporate Governance GRI 102-18 Since our company was founded in 2002, we have been committed to aligning the interests and expectations of all stakeholders within our business through the ethical, responsible and transparent behavior of all Braskem associates and governance bodies aiming to ensure we generate value in the short, medium and long term. To this end, we follow the Brazilian Corporate Gover- nance Code (CBGC), seeking to acomplish with best practices in the field: we are listed in the Level 1 cor- porate segment at B3, also meeting some practices of Level 2 and Novo Mercado segments. as 100% tag along for all shareholders in the event of a transfer of control. Our bylaws also require that at least 20% of the mem- bers of the Board of Directors be independent directors. See the stock exchanges where Braskem is listed and learn more about our Corporate Governance practices. MAIN shareholders Our main shareholders are Novonor (formerly Odebrecht), which is the majority shareholder, with 50.1% of the voting capital shares, and Petrobrás, which holds 47% of the voting capital shares. The remaining 2.9% are distribu- ted on the stock market or in treasury. The company has a free float of 25.5% of total capital, which provides liquidi- ty for shareholders who wish to trade their shares in B3. Learn more about Braskem's corporate structure and shareholding structure on our Investors website. Access here. Governance structure GRI 102-18 The highest governance body is the Board of Directors, which ended 2020 with its largest number (11 mem- bers, including a president and a vice-president), four of whom are independent members. Our Governance structure is also composed of a Statutory Executive Board a Fiscal Council, besides Board of Directors sup- portive committes, including the Compliance Commit- tee, which is forseen in the Company's Bylaws and is composed by 3 independent members. Access here to learn more about the structure and attributions of each body, its regulations, training, members and their curric- ulum vitae and get to know more about our governance structure. The set of policies approved by our Board is also available online. GRI 102-19, 102-20, 102-22, 102-23, 102- 24, 102-25, 102-26, 102-27, 102-28 To learn more about our governance and compliance management, visit: Governance and Compliance Policies. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS BRASKEM 11 Ethics and Compliance GRI 102-17, 103-2, 103-3 | 205, 206, 406, 415, 419 We uphold high standards in Internal Controls, Risk Manage- ment, Internal Audit and Compliance and we have an Integ- rity Program aimed at preventing, detecting and remedying possible deviations. We continuously perform inter-area risk assessments and carry out internal and external audits under SOX and ABAC (Anti-Bribery and Anti-Corruption) rules: 100% of our Braskem operations were subjected to corruption-related risk assessments. GRI 205-1 Over the course of 2020, we adopted several socioeco- nomic compliance initiatives, including: • Conclusion of the external and independent moni- torship, after recognition of the effectiveness of the compliance program • Publication of follow-up reports on Braskem's Integrity Program, submitted to the Transparency and Cor- ruption Prevention Secretariat (STPC) of the Federal Comptroller General (CGU); • Started ISO 37001 certification process - Anti-Bribery Management System; • Compliance training; • Engagement in collective actions by institutions such as the ETHOS Institute, and the UN Global Compact, besides support to class associations. We have a robust and modern compliance system to support our associates. This system is part of our Global Compliance System Policy which sets out guidelines, duties and responsibilities for associates and opera- tions worldwide, and defines the governance instances responsible for their enforcement. Thus, our compliance practices are based on a set of measures to prevent, detect and remedy risks. Along these lines, 100% of the members of the governance bodies were notified and more than 93% received train- ing on anti-corruption policies and procedures. Our compliance practices are based on a set of measures to prevent, detect and remedy risks Find out more about the members who also received training in the GRI Annex. GRI 205-2 Our Compliance System applies to all associates, activ- ities and operations, and must be systematically mon- itored and enforced by the Board of Directors. We put in place a series of initiatives and tools to enhance our ethical commitment. Some key resources: • Code of Conduct • Governance and Compliance Policies that stablished the Ethics Line Channel • Global Anti-Corruption Policy GRI 205-1 To learn more, click here. PERSONAL Data Protection Program We consolidated the Personal Data Protec- tion program establishing the Privacy Com- mittee, strengthening our service channel, ensuring data from participants, suppliers and customers is processed on an adequate legal basis and following the principles esta- blished in Braskem's Privacy Policy; we also reinforced our standards in critical areas responsible for processing personal data. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSBRASKEM 12 Free competition We have internal and regulatory policies that address this topic, such as the Free Competition Policy, the Policy on Relationship with Trade Associations and Class Entities and the Investment and Divestment Policy. In 2020, we conducted competitive training in Brazil, Europe and the United States, including sessions for the Board of Directors. We also prepared the Competition Booklet for Members of the Commercial Areas in Brazil, describing how we monitor and assess unfair competition. We have a sophisticated Integrity Program that aims to detect and address possible deviations in conduct CONCLUSION OF independent monitorship GRI 205-1 In 2020, after a three-year independent monitorship program, the Federal Public Prosecutor's Office (MPF), the Department of Justice (DoJ) and capital market regulatory agency SEC confirmed that our compliance program fulfills all obligations defined in the agree- ments with the corresponding authorities. The authorities relied on the final report presented by the independent monitors, which confirmed that all recommendations related to the structure and operation of the compliance program were effecti- vely implemented and that the program fully meets the standards established in the agreements. The Prosecutor's Office (MPF) probed the program tho- roughly and found that our compliance program was efficient; it will in fact serve as a model for other leniency agreements to be signed in the country. Ha- ving proven our firm commitment to ethics we have now successfully concluded the monitoring period established in the agreements. Over the course of the independent monitorship au- dit, we have established even stricter anti-corruption control policies, putting in place mechanisms to ensure integrity and providing training on compliance issues. For more information, visit this link. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS BRASKEM 13 Business Model We are a global, human-centered, future-oriented petrochemical company that uses valuable cap- ital to produce an ample and diversified portfolio of chemical and plastic products transformed by our clients and applications that meet daily human needs and improve people’s lives. Firmly anchored in our strategy and culture, our business model creates and distributes value among all our stakeholders, in the short, medium and long term, maintaining the financial health of the com- pany and its investments. Always aware of trends, risks, innovations and op- portunities, we have incorporated the circular econ- omy into our business strategy, aiming to contribute to the proper disposal of plastic waste generated by society. This new business model was consolidated in 2020 with the launch of the I'm green ™ portfolio, which now includes Braskem solutions for a circu- lar carbon neutral economy, including recycled and renewable origin products. CAPITAL These are the diverse, multicultural and skilled people who run our business in a more inclusive and humane manner; who are committed to abiding by the applicable laws and industry norms on health and safety; who embrace the spirit of integrity and see ethical behavior as a competitive advantage; who do the right thing out of their personal conviction. HUMAN The body of knowledge (patents, technologies, systems, platforms, brands and copyrights) that allows us to innovate and seek the technological development of more competitive and sustainable products and processes. INTELLECTUAL We transform our main raw materials (naphtha, ethane, propane, propylene, ethanol), as well as water and electricity, supporting and cooperating with our customer chain to offer solutions for an increasingly sustainable society. NATURAL The bonds of trust with our stakeholders that allow us to conduct our business, expanding our positive socio-environmental impact and contributing to the sustainable development of the communities where we operate. SOCIAL AND RELATIONSHIP The fixed assets (industrial units, pilot plants, innovation and technology centers, technical laboratories, logistics warehouses, train cars and cargo terminals) we deploy in the development, production and distribution of our products. MANUFACTURED Cash generated by our operations, bank loans and financing, and funds raised in the capital market used to finance our business. FINANCIAL INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSBRASKEM 14 STAKEHOLDERS INPUTS OUTPUTS OUTCOMES HUMAN Team members Interns Third parties Board members INTELLECTUAL Researchers Tech partners Consultants Universities Research centers NATURAL SOCIAL AND RELATIONSHIP Suppliers Government Non-governmental organizations Surrounding communities Opinion leaders End users Surrounding communities Government Non-governmental organizations Peer companies Class associations Opinion leaders • Diversity • Multiculturalism • Competences • Ethics and Compliance • Patents • Technologies • Systems • Platforms • Brands • Copyrights • Processes • Naphtha • Ethane • Propane • Propylene • Etanol • Plastic waste • Water • Electricity • Bonds of trust with our stakeholders MANUFACTURED Suppliers Services providers Clients • Industrial Units • Pilot plants • Innovation and technology centers • Technical laboratories • Logistic warehouses • Train cars • Cargo terminals • PROFESSIONAL AND PERSONAL ACHIEVEMENT • TRAINING AND DEVELOPMENT • DIGITAL TRANSFORMATION • CLEAN TECHNOLOGIES • ECO-EFFICIENT PRODUCTS • OPERATIONAL EFFICIENCY Portfolio of innovative and sustainable chemical and plastic products transformed by our customers into applications that meet daily human needs and improve people's lives • WATER CONSUMPTION • WATER REUSE • ENERGY CONSUMPTION • CLEAN ENERGY • ENERGY EFFICIENCY • CO₂ EMISSION • EMISSION OF POLLUTANTS • WASTE GENERATION • EFFLUENT GENERATION • CO₂ CAPTURE • RECYCLING • COMMUNITY WELL-BEING • TRANSPARENT RELATIONS WITH GOVERNMENT • FREE COMPETITION • CLASS AGREEMENTS • DIALOGUE WITH SOCIETY • CUSTOMER LOYALTY • REPUTATION • RELATIONSHIPS WITH SUPPLIERS • EFFICIENCY OF INSTALLED CAPACITIES • EXTENDED USEFUL LIFE FINANCIAL Shareholders Financial institutions Governments Debt investors Rating agencies • Cash generated by our operations • Bank loans and financing • Funds raised in the capital market • DISCIPLINE IN CAPITAL ALLOCATION • DISTRIBUTION OF ADDED VALUE INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSBRASKEM 15 Highlights 2020 FINANCIAL CAPITAL INTELLECTUAL CAPITAL SOCIAL CAPITAL • R$ 58.5 billion Net Revenue. • R$ 11 billion recurring Operating Income. • R$ 1.3 billion Net Cash Generation. • R$ 600 million subordinated bonds issued, with 50% equity treatment by Standard & Poor's and Fitch Ratings. • 2.94x corporate leverage ratio. • Signatory of the CFO Principles of the United Nations Global Compact. • Enhanced technology for the production of renew- able PET (green MEG), with the first production of renewable MEG on a demonstration scale. • Action in the pandemic: R$ 1 billion credit line for plastics, solvents and specialty chains clien- tes in Brazil. • Maceio case: approximately R$ 409 million paid in financial compensation and other temporary aids to families. • 20 startups accelerated through Braskem Labs. • Launched in the Americas a new portfolio of prod- ucts for 3D printing as polypropylene (PP) filaments, powders and pellets. • Participation in the 100 Open Corps innovation rank- ing of companies that have the greatest engagement with startups in Brazil. • Pipeline of digital transformation projects set to capture up to R$ 665 million per year. • During the pandemic, we made more than 80 donations: more than 40 million masks and face-shields produced with our resins, 1.2 million packages for gel alcohol, 800 thou- sand aprons and lab coats for frontline health professionals and support for the construc- tion of a field hospital in Alagoas. • Social action during pandemic: R$11 million donated globally. • Global Volunteer Program mobilized 1,070 volunteers, benefiting about 21,000 people even during the pandemic. • Our Reputation improved in comparison to 2019, especially among our team members, where it showed a record increase. • R$ 32.7 million invested in 137 social initiatives (usual donations, pandemic-specific dona- tions, Private Social Investments (ISPs) and volunteering) and more than 236,000 people impacted directly. MANUFACTURED CAPITAL HUMAN CAPITAL NATURAL CAPITAL • 284% increase in global sales of recy- cled materials (resins and chemicals), reaching 9,000 tons sold. • 69% of team members participated in the well-being thermometer survey, used to design action plans for social distancing. • Start of operations of the Delta Proj- ect plant, in La Porte, Texas, making Braskem the largest producer of poly- propylene in the United States. • Flexible workplace with home office, review of shifts, purchase of personal protective equipment and ac- tions to provide emotional and psychological support during the pandemic. • Partnership with Valoren: R$ 67 million investment in the new recycling line and expansion of the post-consumer resin portfolio in Indaiatuba (SP). • Selection of interns adapted to ensure a more inclu- sive process, with 38% of the job openings filled by black candidates. • Reached 30% of women team members in leadership • Commitment: 15% reduction in emissions by 2030 and becoming carbon neutral by 2050. • Expansion of the I'm green ™ portfolio: reach 300,000 tons of thermoplastic resins and chemicals with recycled content by 2025 and 1 million tons by 2030. • 10 years of Green PE, recognized by ECLAC (UN) and Chemical Week. • Partnerships to expand the use of renewable energy with solar and wind farms in Bahia, Rio Grande do Norte and Minas Gerais. positions. ALL CAPITAL • Approval of the Global Sustainable Development Strategy focusing on a circular carbon neutral economy. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSBRASKEM 16 Awards & Recognition In 2020, we won important awards on sustainability, diversity, governance and innovation, recognizing our commitment to best market practices. HUMAN CAPITAL INTELLECTUAL CAPITAL • 100 Open Corps: for the third consecutive year, we are ranked among the international 100 Open Corps, and recognized as one of the companies that most engage with startups in Brazil. The ranking analyzed more than 1,600 companies to draw up the list of leaders in open innovation in Brazil. • United Nations: our production of I'm green ™ biobased polyethylene, plastic from renewable sources made from sugarcane, has been recognized by the UN Economic Commission for Latin America and the Ca- ribbean (ECLAC) and by the UN Global Pact Brazil Net- work as one of the most transformative innovations in sustainable development in Brazil, in the Industry & Energy category. • 11th CIEE Best Internship Programs Award: we were recognized as the third best company for interns, according to CIEE (Company-School Integration Cen- ter). This classification was based on a survey with our interns on important aspects of the program, such as career prospects, development and satisfaction. • Exame Diversity Guide: for the second time in a row we were recognized as the best company in the Chemical and Petrochemical industry for diversity promotion practices. We obtained above-average grades in all categories, which include gender, people with disabilities, ethnic-racial and LGBTI +. The award is one of the results of our Diversity & Inclusion Pro- gram, which aims to promote a discrimination-free work environment. • Bloomberg Gender Equality Index: Braskem was selected by this index that considers company actions to foster women leaders and talents, promoting equal pay and inclusion. The indicator assesses and recog- nizes companies for successful gender initiatives. In all, 380 companies from 44 different countries are featured in the index, of which only nine are Brazilian. • Compliance on Top 2020: executives from our team were awarded at Compliance on Top 2020, a major Brazilian event in the area. Our Chief Compliance Of- ficer, Everson Bassinello, and the Compliance Leader for South America, Akira Ano Junior, made the list of the 30 most admired compliance professionals. • Ethical Company (Braskem Idesa): Braskem Idesa was recognized by Amitai and Fortune Magazine as one of the “Most Ethical Companies 2020” in Mexico. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS  BRASKEM 17 NATURAL CAPITAL MANUFACTURED CAPITAL • CDP: we are the leader in three 2020 rankings: Water Management, Climate Change and Supplier Engage- ment (Climate and Water). For the fourth consecutive time, we made A List, the highest ranking in Water Management, and we were leaders in Climate Change Management for the sixth consecutive time (-A). For the fifth consecutive time, we were featured among leaders in Supplier Engagement (Climate and Water), and in 2020 we reached the maximum score A List. • Chemical Week: we won the first edition of the Sus- tainability Award from the Financial Week & Sus- tainability Forum promoted by Chemical Week USA. The award Best Sustainable Initiative went to our I'm green™ portfolio of products for the circular economy. • Carbon Efficient Index (ICO2): since 2011*, we have been part of the B3 Carbon Efficient Index portfolio, underscor- ing our commitment to transparency regarding emissions. • ABRE 2020 Award: we won the 20th edition of the ABRE Brazilian Packaging Award in the Popular Vote category, for the packaging of the Always Free absor- bent made with post-consumer resin. The product is part of the I'm green™ line and was produced in part- nership with Johnson & Johnson and Mega Embala- gens, using 33% post-consumer resin and reducing carbon emissions by 10.25%. • Plástico Sul Award 2020: we received awards in two categories of the first edition of the South Plastic Award for Innovation and Sustainability. This award is granted to innovative solutions for the environment. Our Reverse Logistics Project for Bags and Big Bags was selected in the Sustainability category and the Always Free Packaging pro- duced with post-consumer resin won the Innovation award in the Film Extrusion category. *with the exception of some quarters in which we did not integrate the portfolio due to the liquidity criterion during this period. FINANCIAL CAPITAL • Sustainability Yearbook: for the seventh consecutive time, we were featured in the Sustainability Yearbook for our environmental sustainability policies. At least 7,000 companies in the Dow Jones Sustainability Index were analyzed for this ranking, which is considered a reference for investors. • Corporate Governance Stock Trade Index (IGCT): we were again included in the IGCT portfolio of publicly held companies with differentiated corporate gov- ernance practices, with additional criteria to the IGC (Differentiated Corporate Governance Stock Index). INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS STRATEGIC PLANNING 18 Strategic Planning Risk Management Challenges of the COVID-19 pandemic Focus on Sustainable Development Our strategic vision features six fundamental pillars as we continue building a global company that is recog- nized as a leader in increasingly innovative and sustain- able chemical and plastic solutions, focused on human beings and positive results for all stakeholders. The innovation pillar is seen as a cross-organization enabler for the ambitions of other pillars. Sustainability was included as our sixth strategic pillar at the end of 2020 to help us monitor the implementation of projects, partnerships and investments in light of our commitment to the 2030 sustainable development goals, in response to current and future challenges for the planet and society. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 19 Strategic Pillars Pilares Objective Actions in 2020 Priorities 2021 1. Productivity and competitiveness • Braskem as a first quartile operator 2. Sustainability1 • Reference in the global chemical and petrochemi- cal sector for its sustainable development 3. Diversification Innovation enables all pillars • Increased diversification in raw materials, markets and products, with new ope- rations representing more than 50% of EBITDA • Be recognized as a com- pany that promotes local development and human rights 4. People, innovation, governance and reputation 5. Capital allocation/ financial rigidity • Best security performance in the past three years • Renewal of raw material contracts with Petrobras for petrochemical complexes in Brazil • Increased energy efficiency thanks to Digital Center tools • Implementation of the "Transform for Value" Program • Launched commitments for 2030 and 2050 • Signed long-term agreements for the purchase of renewable energy • Advanced in partnerships for mechanical and chemical recycling • Expanded production and commercialization of Green PE • Expanded sales of products with recycled content • Started commercial production of the new PP plant in the U.S. • Accelerated the project to import ethane in Mexico • 40% of the resin production capacity is now located outside Brazil • Reduced dependence on naphtha as a raw material, reinforcing leadership in PP in Brazil and in the Americas • Significant progress in the financial compensation program and support for the relocation of impacted families • Diversity and Inclusion in the Internship Program • Conclusion of external monitorship and certification of the Compliance Program • Increase reliability and efficiency of industrial operations • Ensure competitive supply of ethane to Braskem Idesa • Advanced in the implementation of ESG commitments • Intensified energy matrix diver- sification, especially in renewable energy and alternative fuels • Structure new growth models and reduce risks with cooperati- ve models • Expand product portfolio aligned with business strategy Increase efficiency in innovation and accelerate digital transformation • Advance with the Financial Compensation and Relocation Program in Alagoas • Strengthen Braskem's image among team members, custo- mers, suppliers, investors and society in general • Reduce leverage and preserve financial health Aggregate capital Manufactured Capital Human Capital Intellectual Capital Manufactured Capital Natural Capital Social and Relationship Capital Manufactured Capital Human Capital Social and Relationship Capital Financial Capital • Braskem as a financially he- althy company that creates shareholder value • Significant reduction in corporate leverage • Positive cash generation, with strong operating results • Robust financial liquidity, with mostly long-term debt ¹ The Sustainability pillar was included in our corporate strategy in 2021. Nonetheless, we already made several advances in this regard over the course of 2020, in particular regarding socio-environmental commitments for 2030 and 2050. **Intellectual Capital is a cross-organization resource for all strategic pillars. Safe action is a permanent focus for Braskem operations: it is a non-negotiable value within our strategy INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 20 Risk Management GRI 102-15, 103-2, 103-3 | 307, 412 Risk assessment is an essential process at Braskem: it points to opportunities and reduces negative impacts as we strive to achieve our strategic objectives. Our risk management methodology is based on international references. We classify risks into four categories - strategic, oper- ational, financial and regulatory - based on a corporate Risk Dictionary. Risks are periodically evaluated by the company's executives and undergo a Regional and Global consolidation process, that considers their probability and potential impact. The result of this analysis is presented graphically on a Heat Map of priorities that is assessed and approved by the Board of Directors. Once approved, priority risks are addressed and monitored for mitigation and preparedness to deal with their possible adverse effects. In 2020, we continued to implement measures for the prevention and mitigation of the risks assessed as pri- orities and integrated into the Corporate Risks matrix. In line with our commitment to promoting best practices, we highlight here some risks that are being addressed and monitored by management: Risk Risk Description Potential Impacts Responses Image of Plastic The growing global concern for the environment and growing trend to ban single-use plastic • Difficulties in adapting our produc- tion processes in time, leading to insufficient recycling levels, inability to meet demand and consequent loss of market share, with adver- se impact on company image and reputation Climate change Populations are showing increasing concern for the en- vironment, and governments are aligning with the Paris Agreement through public policies that encourage the reduction of greenhouse gas emissions • Stressed natural resources used in our production, such as water and stricter limits for emissions of carbon dioxide and equivalents Since 2018, we have openly supported the “Circular Economy” (reutilization and reuse of resources), with the following mitigation efforts: 1. Develop value chain, design of products and their applications 2. Engage with consumers 3. Assess life cycle and recycling rates to identify more sustainable options 4. Engage in partnerships to avoid plastic waste in the oceans Our Climate Adaptation and Mitigation Plan seeks to continually increase the safety of industrial activi- ties in response to extreme weather events and to mitigate the adverse impacts of our operations on the climate. In 2020 we announced our ambition to reduce GHG emissions by 15% by 2030 and to become carbon neutral by 2050, in line with the Paris Agreement. See more details in Water Security and Carbon Neu- tral discussions. Sector Cyclicity Historically, international petrochemical products markets have had periods of limited supply leading to higher prices and profit margins followed by an ex- pansion in production capacity resulting in excess su- pply, shrinking prices and slimmer profit margins. Our net sales revenue and gross margin are increasingly influenced by global industry conditions over which we have no control, and which may impact Braskem operating results and financial situation • Difficulties in adapting the business to petrochemical market volatility as we develop our corporate stra- tegies may lead to financial losses and/or impair our competitiveness: this remains a key concern for Braskem Several actions based on three pillars help us mitigate the risks associated with downturns: 1. Diversification of raw materials with a focus on sustainability 2. Diversification of suppliers 3. Geographic diversification Social and Environmental Issues Our company and operations are inherently exposed to environmental, health and safety hazards. As a result, our business is subject to strict environmental regulations, among others * See other risks factors in Form 20F 2020, Annual Reports • Despite our environmental, health and safety standards, policies and controls, our operations remain subject to incidents or accidents that may adversely affect our business or reputation and result in significant environmental and social impacts We continuously assess the potential impacts of our industrial operations and monitor potential scenarios that may affect the environment and surrounding communities together with our Board of Directors INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 21 Transform for Value Striving for constant evolution, we created in February 2020 the Transform for Value Program, aiming to coor- dinate, accelerate and foster agility and flexibility among our areas and flows, especially through process improve- ment. The program has four key objectives: • Consolidate visions and centralize initiatives to im- prove company processes, monitoring investments and results. • Prioritize resources, understanding that they can be shifted or reinvested to maximize returns. • Drive the implementation of key value-generating initiatives. • Improve the way we communicate our decisions and investments, so that all company members and the communities where we operate can understand our intentions and follow our progress. This global program is focused on identifying initiatives that can bring visible gains by the end of 2023. We will use phases or stages to better measure, manage and com- municate our progress in each initiative. In its first year, the TFV Program implemented six initiatives currently in stages four (ramp-up) and five (completed), with estimated savings of US$ 55 million/ year.* The goal for 2021 is to have 20 initiatives in stag- es 4 and 5, with estimated savings of approximately US$ 160 million/year. * Values related to initiatives in stage 4 (ramp-up), in which the values are recorded when realized and stage 5 (completed), after stabilization and/ or internal audit, according to the Transform for Value methodology for monitoring the maturity of program initiatives. For more information, ac- cess our 2020 Management Report: Annual Reports. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSMaceió Case GRI 103-2, 103-3 | 307, 413-2 Regarding the geological phenomenon in Maceió, we re- affirm our commitment to the safety and well-being of the communities, focusing on Braskem's full support to the affected families and on the technical assessment of the situation. For more information on the history of events and our performance, follow this link. Understanding the events In March 2018, there was a 2.4-degree earthquake on the Richter scale in certain neighborhoods in Maceió (AL), impacting the 35 rock salt wells we had explored there for at least 40 years. The salt wells belonged to Salgema, one of many companies incorporated into Braskem when it was founded in 2002.As a consequence of the earthquake, cracks appeared in buildings and streets. Soon after the event, we requested studies from independent specialized institutions to identify the causes of the geological phenomenon and indicate measures to be taken. We shut down the rock salt mining operation and cooperated with the necessary actions to evacuate risk areas and ensure the safety of the local population. STRATEGIC PLANNING 22 Braskem actions In 2020, we signed agreements and amendments with the competent authorities to support the evacuation and compensation of local residents and property owners in the areas at risk and to protect and monitor the affected neighborhoods through our Financial Compensation and Relocation Support Program (PCF). This Program is based on the map of risk areas of the Civil Defense of Maceió, published in december 2020 and independent technical studies contracted by the company. By the end of 2020, we had relocated about 9,200 families and made about 3,500 compensation propos- als, with an acceptance rate of 99.7%. This enabled us to meet the 100% vacancy requirement in the priority areas established by the agreement. The evacuation of the remaining areas in still in progress, until we finish relocating around 15,000 families covered by the pro- gram. Additional measures were implemented, such as the Local Resident Central providing services for inhabi- tants, and Animal Shelter Program. We also made progress with the Salt Well Closure and Monitoring Plan, with ongoing actions related to wells under the recommended measures approved by Na- tional Mining Agency (ANM) and other urban structure measures such as demolition, security and janitorial ser- vices in the vacated areas. In 2020, we made significant progress in installing equipment to monitor salt wells and surrounding neighborhoods, and we also began to fill the first salt well with solid material. Finally, we signed the Second Amendment to the Residents' Compensation Agreement and the So- cio-Environmental Reparations Agreement with the competent authorities in December 2020. Under the additional provisions, the Company undertakes to: adopt the necessary measures for the stabilization of the wells monitoring of the soil; repair, mitigate or compensate for potential environmental impacts and damages resulting from rock salt mining in the city of Maceió; and repair, mitigate or compensate for po- tential socio-urban impacts and damages resulting from rock salt mining in the city of Maceió, allocating the total amount of R$ 1,280 million to the adoption of actions and measures in the evacuated areas as well as actions and measures aimed at urban mobility and social compensation. Yet, within the agreement with Federal Prosecutor Officer, we will destine the adicional amount of R$ 300 million to idemnify collective social and moral damages and eventual contingencies relat- ed to acitions in the vacated areas and urban mobility actions. Both agreements made it possible to extinguish public civil actions against Braskem. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS STRATEGIC PLANNING 23 VINYL OPERATION FINANCIAL IMPACT During the chlorine-soda unit shutdown, we imported caustic soda and dichloroethane (EDC) to honor our commitments to customers. In order to resume our chlorine-soda operation, we focused on the acquisition of sea salt from third parties to be used as raw material for the chlorine-soda plant in Alagoas, replacing brine. The estimated cost of this acquisition project is approx- imately R$ 68 million, out of which R$ 64 million was spent in 2020. We announced plant start-up in February 2021. After completing the commissioning process ob- serving all applicable safety standards, we resumed pro- duction of chlorine-soda and EDC at the chlorine-soda plant in Alagoas, going back to our integrated vertical business model in Vinyl. We ended 2020 with a provision of R$ 9.2 billion to fulfill the commitments arising from the Maceió case Considering the agreements signed, our internal eval- uation and assessment by external consultants, and taking into account the short-and long-term effects of the technical studies, the existing information and the best estimate of the expenses for the im- plementation of the various measures related to the geological event in Alagoas, we closed the year with approximately R$ 9.2 billion provisioned to comply with the obligations resulting from the agreements, in contrast with the R$ 3.4 billion provisioned in 2019. Over the course of 2020, approximately R$ 1.2 billion was spent on PCF-related expenses, on the closure and monitoring of wells and social/urban measures, among other expenses. Approximately R$ 409 million out of the total was written off from the current ac- count balance intended only for the fulfillment of PCF obligations. Additionally, within the Residents' Compensa- tion Agreement, the Company, DPE, MPF, MPE and DPU agreed to transfer an additional R$ 1 billion to Braskem's bank account specifically for PCF Fund- ing in 10 monthly installments of R$ 100 million each, starting in January 2021. As of May 5, 2021, the Company had made four deposits of R$100 million each, with the other six remaining de- posits scheduled for the subsequent months. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 24 Our actions are based on technical studies carried out by independent specialists and comply with the recommendations submitted to competent authori- ties. The Company is implementing the actions so far approved by the ANM. The plans for closure of the wells submitted to ANM were prepared considering the best knowledge corpus available to Braskem specialists regarding appropriate measures to stabilize the geological phenomenon in the region. The plans will be monitored over time and may be adjusted according to the results obtained. Continuous monitoring is crucial to confirm the outcome of the current recommendations. In addi- tion, the completion of studies to confirm the natural filling of some cavities and sonar monitoring of cavity behavior may in the future indicate the need for addi- tional stabilization measures. IN 2020 we relocated 9,200 families from the neighborhoods affected by the phenomenon in Maceió - 100% of the priority areas have been vacated. Our provisions are based on current estimates and assumptions and may undergo future updates due to new facts and circumstances, including changes in the execution time and extension, effectiveness of action plans and completion of current and future studies with new recommendations from experts and other new developments. Braskem still faces and we may come to face several individual lawsuits filed by individuals or legal entities that are not served by the PCF or that disagree with the individual proposals for agreement, in addition to potential claims by public service concessionaires. As for the measures related to the mine closure plan, they are subject to AMN analysis and approval, mon- itoring of the results of the ongoing measures, as well as changes related to the dynamics of geological events. The Company is implementing the actions so far approved by the ANM. Under the Socio-Environmental Reparations Agree- ment, the actions to repair, mitigate or compensate for potential environmental impacts and damages to be financed by Braskem will be defined after the con- clusion of the Environmental Diagnosis to be carried out by a specialized and independent company. At the present time, we cannot predict the outcome of these Environmental Diagnostic studies or their potential implication in disbursements in addition to the ex- penses already provisioned by the Company. In addi- tion, the Socio-Environmental Reparations Agreement provides for the eventual adhesion of other entities, including the municipality of Maceió, which will be the subject of continued negotiations over the next few months. To date, we have not been able to predict the results of such negotiations or any associated costs. Thus, the Company cannot rule out future develop- ments related to the topic or its associated expens- es, and the costs to be incurred by Braskem may be different from its estimates. We are in discussions with insurers about the coverage of their insurance policies. The payment of indemnities will depend on the technical evaluation of the insur- ance coverage of these policies, given the complexity of the matter. Accordingly, no indemnity was recog- nized in Braskem's financial statements. For other details on the signed agreements, please access our 2020 Financial Statements, note 26, by clicking here. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 25 Timeline 2018 2019 2020 1. An earthquake is registered in some 1. Braskem commissions independent 1. We signed an agreement with the 3. Amendments to the agreement neighborhoods of Maceió. geological studies. 2. A local Crisis Committee is installed 2. Definitive closure of salt mining in Alagoas. activities. 3. Creation of a protection area based on a study by the Leipzig Geomechanics Institute (IFG) in Germany. 4. Terms of cooperation are signed with City Hall to develop a number of joint actions. We have alloted a total of R$ 9.2 billion to compensation and security actions in the Maceió case Public Defender's Office of Alagoas, the Public Defender's Office of the Federal Government, the Federal Prosecutor's Office and the Public Prosecutor's Office of Alagoas that establishes actions for the evacuation of the defined risk areas and the start of the Compensation and Support Program for the Relocation of affected residents. We have significantly advanced the implementation of the plan regarding residents and also regarding Large Equipment. 2. Progress in area monitoring mea- sures, mine closure plan started. signed with DPE, MPF, DPU and MPE based on the update of the Maceió Civil Defense Map, leading by the end of 2020 to the extinction of the ACP for indemnification of Residents. 4. Agreement signed with MPF and MPE for the extinction of the Social and Environmental ACP. 5. Agreement signed with MPT4 for the extinction of the Labor ACP. 6. The brick-and-mortar Resident Central was created and then migrated online due to COVID-19 restrictions. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 26 Challenges of the COVID-19 Pandemic GRI 403-2 SAFETY FOR PEOPLE The coronavirus pandemic brought an unprecedented challenge for people and companies around the world. At Braskem, we focused on building a robust contingen- cy plan to mitigate the effects of the pandemic while continuing to pursue our short-, medium- and long- term objectives. This plan had three main fronts: • Safety for people • Support for our value chain • Reliability and resilience for our operations The plan enabled us to adapt to the new concept work- ing safely and cooperatively ensuring fast response thanks to the engagement of our professionals in the new model. We soon resumed production and commer- cial activities, providing support to the plastic chain and communities and ensuring our financial health during this challenging period. To us, safety is a non-negotiable value. As the pandemic spread in the first months of 2020, different actions were taken to enforce social distancing at the company. Our existing remote work model called Flex Office enabled us to quickly implement home office for our employees. This made it possible for 100% of our office teams to work from their homes, reducing contacts and commutes. Regional support programs helped associates transition into the new model. In Brazil, online streaming events and courses provided assurance and support around five pillars: Mental Well-Being, Physical Well-Being, Social Well-Being, Support for Remote Work and Profes- sional Improvement. Our 26 live events were attended by 6,000 team members - 40% of all associates - and reached a satisfaction rate of 96%. In addition, ergo- nomic and technology kits were provided for associates in home office mode. We quickly adapted our routine to health protocols, ensuring participant safety and engagement INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 27 In Mexico, an exclusive website focused on associate well-being: “Sentirte Bien” provided relevant medical infor- mation and psychological support over the phone. Employ- ees migrating to home office mode received an allowance for the purchase of functional, ergonomic chairs. Work on the plants observed strict health protocols rec- ommended by health agencies in Brazil and worldwide to ensure a safe environment for employees and outsourced personnel. We kept people at risk in their homes, reduced our people in operations by 50%, revised shifts, imple- mented social distancing actions and purchased personal protective equipment. We were nominated for the CNN Heroes Award for an exemplary action by the members of Marcus Hook's poly- propylene plant, 20 miles from Philadelphia, Pennsylvania: during the first months of the pandemic, with an exponen- tial increase in the number of cases in the United States, the team pledged to remain isolated for 28 days at the factory to accelerate the production of polypropylene, the raw material used in the manufacture of N95 protective masks and other medical supplies. SUPPORT FOR THE VALUE CHAIN DONATIONS GRI 203, 413 In addition to preserving the health and reliability of our operations, we have also undertaken to support our stakeholders: we got together with our clients and with the communities where we operate to check which of our products could help fight the pandemic. We work cooperatively to combat the pandemic, di- viding our operations into two main fronts: supporting the communities surrounding our plants and sup- porting the fight against the pandemic along with our value chain. As part of the efforts, we granted R$ 1 billion in credit to solvent clients in Brazil. The loan could be used to pur- chase plastic resins (PE, PP, PVC), caustic soda, solvents and chemical specialties. The credits were made avail- able in a record 60 days, and were limited to R$ 600,000 per client, with interest rates established as 100% of the CDI yield. This initiative preserved our production and the financial stability of our partners, while also ensuring that there was no disruption in the production of medi- cal equipment for lack of raw materials. Our Supplier Support Program featured two actions with great positive impact. A special fund of R$ 58.9 million was used to advance payment of invoices for services performed, and another R$ 6.71 million was used to make partial advance payments to suppliers. On the first front, we donated hygiene and cleaning products to 50,000 families living around our plants in The plastic CHAIN helps to fight COVID-19 Plastic plays a fundamental role in combating Covid. Braskem brought together a task force with its value chain to make donations possible in all locations where we operate. More than 88 donations were made, with a total of more than 40 million masks and face-shields produced with our resins, besides 15 million disposable items such as packa- ging, cutlery, glasses and garbage bags distributed in hospi- tals and schools. Other health product donations included 1.2 million packages for gel alcohol, 800 thousand aprons and lab coats for frontline professionals, 50 thousand hy- giene kits, 16 thousand food baskets and 1 Field Hospital in Alagoas (Brazil). . INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 28 Brazil, provided basic food baskets for 1,200 families that work in recycling cooperatives and we supported the government of Alagoas in the construction of the field hospital urgently needed to save lives during the pandemic. Also in Alagoas, in April, in partnership with the state government, we opened a screening center to assist patients with flu symptoms and thus help relieve public hospitals during the pandemic peaks. The second action front focused on supporting society in general: we worked together with our chain to enable the production of masks, face shields and other hospi- tal and sanitary products. The thermoplastic resin we donated helped produce at least 60 million masks and at least 1 million aprons, helping to ensure the safety of health professionals and workers fighting COVID-19. In Europe, we donated 150,000 mask strips to more than 2,500 health institutes. Altogether, we implemented 88 donation projects to combat COVID-19. RELIABILITY OF OPERATIONS NORMALIZED OPERATIONS As lockdowns lifted in a number of countries and the global economy regained some strength, demand for chemicals and thermoplastic resins also recovered. Thus, the utili- zation levels of our petrochemical hubs in Brazil and our industrial units in the USA returned to normal levels in June 2020. Our global sales followed suit, with a quarterly record in Brazil in the third quarter. With operations and sales back to normal, we pre-paid our revolving credit facility in July 2020. Health and Safety remained a priority, and our members and third parties are still working from home and/or rotat- ing shifts in certain cases until the COVID-19 transmission rates show considerable improvement, at which point we will follow the return plan defined by the company. In terms of reliability of operations, the utilization rates of our plants in Brazil and the United States were tem- porarily reduced responding to slack demand given the slumping world economy and initiatives to reduce inventories along the petrochemical production chain. Production planning considered stock levels along the value chain, scheduled maintenance shutdowns, pri- ority products with greater demand in the pandemic and the allocation of co-products to specific markets and enabled us to honor our commitment to supply our customers with reliable operations, leveraging synergies between our global units to meet the needs of society. CASH PRESERVATION Aiming to protect our finances and the resilience of our business in a scenario of uncertainties, we adopted a series of measures to preserve our cash reserves. As a preventive measure, we withdrew US$ 1 billion from our Revolving Credit Facility in May 2020 so we could pro- vide financial support to our chain during the economic contraction. We also committed to reducing invest- ments and fixed costs, and optimized working capital with relevant suppliers. Find out more about our actions against COVID-19 here. Resin donated by Braskem in 2020 enabled the production of 60 million masks and 1 million aprons INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSFocus on Sustainable Development GRI 103-2, 103-3 | 305 Back in 2009 we launched our first 10 long-term social, environmental and economic goals for 2020. We met 85% of the objectives, especially regarding climate change. STRATEGIC PLANNING 29 We achieved 85% of our 2009-2020 Macro Objectives 10. Strengthening of Practices To be recognized in Brazil and worldwide as a chemical company that contributes to sustainable development. 9. Solution Development To be recognized as a company that sup- ports clients in the development of environ- mental and social solutions; to contribute to the perception of plastic as a solution for sustainable development with the potential to improve people's lives. 8. Local Development To be recognized by surrounding communities and society in general for our contribution to human development, demonstrated by the achievement of the “excellent” reputation level in the Citizenship Dimension of RepTrakTM Pulse. 99 75 75 7. Energy Efficiency To be among the best large chemical industries in the world in terms of energy consumption intensity and to be an important user of renewable energy. 1. Health and Safety To be recognized as a global chemical industry reference in safety (chemical, work and process) 84 94 94 2. Economic and Financial Results To be among the three largest producers of thermoplastic resins worldwide and to ensure sufficient profitability to sustain business perpetuity while maintaining Investment Grade. More details in Growth strategy/Strategic objectives. 37 3. Post-consumption To be recognized as an important agent that contributes to plastic recycling. 100 4. Renewable Resources To be recognized as a leader in the manufac- ture of chemicals and thermoplastic resins from renewable raw materials and to remain the world's largest producer of thermoplastic resins from renewable sources. 94 100 5. Water Efficiency To remain a reference in the use of water resources in the global chemical industry. 6. Climate Change To be among the best large chemical industries worldwide in greenhouse gas emissions and to be an important sequester of GHG emissions through the use of renewable raw materials. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 30 NEW challenges: Circular Carbon Neutral Economy The year 2020 was the last in the period previously de- fined for reaching our 10 sustainable development dimen- sions, so we set out to identify new challenges for the next decade (2020 to 2030), aligning our targets with new glob- al demands. The definition of new Macro Objectives was a lengthy, complex journey, involving more than 500 asso- ciates and leaders worldwide. This process materialized in September 2020, when our Global Sustainable Develop- ment Strategy was approved by the Board of Directors. The approved strategy was based on a comprehensive analysis that covered global challenges and trends, the GRI Materiality Matrix, Risk Management analysis for our busi- ness and our value chain, and also considered relevant issues for society. The new targets address all social, economic and environmental aspects of sustainable development and are aligned with the 17 Goals of the 2030 United Nations Agenda. Our priorities are the SDGs we can impact the most, and the commitments in the Paris Climate Change Agreement. As a result, we organized our long-term actions around seven dimensions, focusing on the Circular Carbon Neutral Econo- my, especially by combating climate change and eliminating plastic waste. OUR NEW COMMITMENTS ARE SHARED IN SEVEN DIMENSIONS HEALTH AND SAFETY SUSTAINABLE INNOVATION SOCIAL RESPONSIBILITY AND HUMAN RIGHTS Read our manifesto to learn more about our new dimensions at Braskem. A more sustainable future today. OPERATING ECOEFFICIENCY FINANCIAL AND ECONOMIC RESULTS ELIMINATION OF PLASTIC WASTE COMBATING CLIMATE CHANGE INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS STRATEGIC PLANNING 31 Our goals and commitments In line with our new commitments, we set targets for 2025, 2030 and 2050, mainly in combating climate change and eliminating plastic waste. by 2025 by 2030 by 2050 1. Expand our I’m green™ portfolio to include 300,000 tons of thermoplastic resins and chemical products with recycled content. 1. Expand our I’m green™ portfolio to include 1 million tons of thermoplastic resins and chemical products with recycled content. 2. Be one of the best companies to work for. 2. Prevent 1.5 million tons of plastic waste from being incinerated, taken to landfills or discarded in the environment. 3. Reduce scope 1 and 2 greenhouse gas emissions by 15% from our baseline 2019 levels. 1. Achieve carbon neutrality. 2. Deal with social, environmental and human rights, and diversity, equality and inclusion issues as they emerge in economic, social and governance situations, acting in an integrated and transparent manner. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 32 Governance A clear governance structure and our Global Sustain- ability Development Committee will help us live up to our commitments and ensure agile, assertive processes. We created 10 work groups: seven of them are dedicat- ed to the Macro Objectives and three are structuring groups focused respectively on Governance, Concepts & Tools and Communication. Each work group is typi- cally headed by a company vice-president who receives direct support from an executive officer. GLOBAL SUSTAINABILITY DEVELOPMENT COMMITTEE Advisory Board External members provide guidan- ce and bring new insights into our strategy PMO Transform for Value + Sustainable Development Provide support, flag opportunities and help mitigate risks Governance Concepts & Tools Communication 1. Health & safety 2. Financial and economic results 3. Eliminate plastic waste 4. Combating climate change 5. Operating ecoefficiency 6. Social responsibility and human rights 7. Sustainable innovation INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSSTRATEGIC PLANNING 33 Carbon neutral circular economy GRI 103-2, 103-3 | 306 We see Plastic Waste and Climate Change issues as the main challenges for our business and value chain, and our Global Sustainable Development Strategy is designed to make us part of the solution for a car- bon neutral circular economy. Read more about it in Natural Capital. CIRCULAR ECONOMY Plastic is present in most people’s daily lives and preserves the quality of products that come into our homes. The plastic industry is responsible for millions of jobs, and companies in other industries also use plastic to reduce production costs and save energy in their own production and distribution processes. Despite such benefits, the production of plastic is also associated with significant environmental impacts. We are keenly aware of our responsibility in this regard and have publicly committed to strengthening the circular economy. The circular economy proposes a systemic approach to ensure continuous flow of resources, regenerating, retain- ing or adding value while contributing to sustainable de- velopment. This is the direction we will follow in all actions. Our strategy for the transition to a circular economy is based on mechanical and chemical recycling solutions. We are partnering with the other players in our value chain to strengthen mechanical recycling and overcome technical and logistical barriers to ensure adequate volumes of high-quality recycled material. We are also working on enhanced technologies and solutions for chemical recycling. The ultimate objective is to trans- form plastic waste into chemical inputs, fuel or raw ma- terial for the manufacturing of new plastic products. CIRCULAR ECONOMY STRATEGY Mechanical and chemical recycling solutions guide our transition towards a circular economy PLASTIC WASTE 1 Mechanical Recycling 2 Chemical Recycling 3 Projects Continue to advance in its mechan- ical and chemical recycling projects. Support projects to avoid plastic waste. DESIGN for Environment Responding to society’s growing demands regarding sustainability and circularity entails much more than just using recycled materials. We need to rethink products from scratch, from raw materials and inputs to final consumer experience. Braskem proposes combining our expertise in polymers and transformation processes with brand owner insights into consumer behaviors and desires. Working hand in hand, we can deliver an incredible experience with the lowest possible environmental impact. Aiming for more sustainable and circular packaging, we have developed an environment-friendly design methodology that uses Product Life Cycle Analysis to identify environmental hotspots over time. Once a gap is identified based on a scientific analysis, the next step is to explore the consumer’s world and journey to maximize product attractiveness and usability. The ideation to prototyping/ testing loop is repeated until we succeed in combining sustainability, circularity and consumer experience in a single product. This methodology is already being used in our Braskem Design Challenge INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS STRATEGIC PLANNING 34 CARBON NEUTRAL GRI 103-2, 103-3 | 305 Climate change is one of the most urgent and import- ant challenges we must face in the not-so-distant future. Carbon neutrality is a core concept within the strategy to reverse or at least mitigate the problem. According to the IPCC (Intergovernmental Panel on Climate Change), carbon neutrality is obtained when the total amount of greenhouse gases emitted is equal to the total amount removed on a global scale. Re- ducing greenhouse gas (GHG) emissions can be done by changing energy sources and industry processes, compensating and/or capturing emissions. The chemical industry is one of the major sources of greenhouse gas emissions (GHE). On a global scale, energy-intensive chemical production processes release 1.5 billion tons of CO2 into the atmosphere, according to the International Energy Agency. We fully understand our impact in this respect and have implemented several actions to foster energy efficiency and expand the use of renewable energy sources in order to achieve our goal of carbon neu- trality by 2050. Our strategy to face climate change is divided into three fronts. STRATEGY TO ACHIEVE CARBON NEUTRALITY CARBON NEUTRALITY 1 Reduction 2 Compensation 3 Capture In terms of reducing emissions, we are working on ex- panding the use of renewable energy in our operations while constantly improving our energy efficiency. As a result, in the past 13 years, we have reduced the inten- sity of our GHG emissions by around 17%. This effort will help us achieve our intermediate target of reduc- ing direct emissions (scopes 1 and 2) by 15%, from 10.8 million in 2019 to 9.2 million tons of CO2e by 2030. GRI 305-5 | SASB RT-CH-110a.2. The second front is compensation, and it will go hand in hand with the expansion of our activities in the renew- able products market. We will increase our output of Green Polyethylene with an additional 60,000 tons and plan to diversify our portfolio with new solutions based on renewable raw materials Read more about Natural Capital. Our goal is to reduce total GHG emissions by 15% until 2030 ( from 10.8 million tons of CO in base year 2019 to 9.2 million) Reduce emissions with a focus on energy efficiency, as well as increasing the use of renewable energy in current operations, es- tablishing partnerships aimed at innovation and technology. Compensation of emissions with poten- tial investments in the production of chemi- cals and polymers from renewable sources. Capture of carbon emissions through research and devel- opment to use carbon emissions as a raw material. On the third front, our innovation teams are working tirelessly to develop creative technologies to embed carbon capture and use in our processes. Read more about it in Intellectual Capital. Read more about Intellectual Capital. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS CAPITAL’S PERFORMANCE 35 Capital performance Financial Capital Manufactured Capital Intellectual Capital Human Capital Social and Relationship Capital Natural Capital During this challenging year, we counted on the actions of the crisis committee to deliver integrated results. This section contains key information on our projects, initiatives, results and business performance, organized by capital and using accurate and reliable indicators. This is how we express our commitment to be transparent in our communication to society, our associates, clients, suppliers and investors, showing how we create and share value. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 36 Financial Capital GRI 103-2, 103-3 | 201 DIMENSION 2: Financial and economic results Our strict financial discipline, careful capital allo- cation and robust risk management are essential elements to ensure healthy Financial Capital. In 2020, our recurring Operating Result was R$ 10,975 million and our positive Net Cash Flow totaled R$ 1,276 million, with a leverage ratio of 2.94x, signifi- cantly lower than in 2019. Financial Performance of Operations RECURRING OPERATING RESULT US$ 2,082 million 38% higher than 2019 Variation justified by: • Better spreads for resins and main petrochemicals in Brazil, PP in Europe and PE in Mexico • Increased resin sales volumes in Brazil with record high in quarterly resin sales in the Brazilian market • Higher sales volumes in the United States, Europe and Mexico • In local currency, the Adjusted Operating Result was R$ 10.975 million, 85% higher compared to 2019 due to the devaluation of the Brazilian Real (BRL) against the US dollar Signature of the UN Global Compact’s CFO Principles In 2020, as a member of the CFO Task Force, an initiative promoted by the UN Global Compact, we commited to implementing the CFO Principles for integrating Sustainable Development Goals (SDGs) into our financial and investment management. This initiative will involve the definition of goals related to our commitments to the SDGs, and is in line with our global strategy and with the objective of contributing to improving people's lives through sustainable development. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS Origin of Financial Resources NET CASH FLOW GENERATION R$ 1,276 million 59% lower than in 2019 • Strong operating result • Monetized PIS/COFINS credits totaling R$ 1.786 million • Reduced planned investments by 23% • Impacts partially set off by the impact of working capital in the cash flow in the first half of the year due to lower purchased volumes of imported naphtha AVERAGE DEBT MATURITY 19 years • 50% of the debt due later than 2030 • Average weighted cost of debt impacted by exchange rate variation +5.3% CASH POSITION US$ 3,940 million • Assures timely payment for debt maturing in the next 84 months • Considers the revolving credit line of US$ 1 billion, available until 2023 Corporate leverage RATIO Despite the adverse scenario resulting from the downturn in the petrochemical industry and the uncertainties stemming from the Covid pandemic, we have been able to pre- serve and maintain our solid cash position and long debt profile. In line with our firm commitment to financial health and cost discipline, we implemented a number of measures to reduce our corporate leverage ratio, aiming to return to investment grade. Since the second quarter of 2020, we were able to deleverage significantly, down from 7.1x to 2.9x at the end of 2020. One of the measures taken was the issuan- ce of US$ 600 million in hybrid bonds (su- bordinated bonds) in July 2020, with 50% equity treatment by Standard & Poor's and Fitch Ratings. CAPITAL PERFORMANCE 37 Allocation of Resources Capital Market INVESTMENTS: US$ 555 million 8% below the US$ 600 million Including: • Construction of the new PP plant in the United States (Delta Project) tota- ling R$ 802 million (US$ 162 million) • Includes investments to restart chlorine- -soda production in Maceió through the acquisition of sea salt STATEMENT OF VALUE ADDED (DVA) R$ 9,599 million 38% higher than 2019 We aim to distribute our financial capital in a way that adds value to all our sta- keholders. To this end, all funds, whether provided by third parties or deriving from the company’s own cash flow, are inves- ted to generate added value for society. BRKM3 R$ 25.22 per share (- 20.04% compared to 2019) BRKM3 R$ 23.57 per share (- 21.04% compared to 2019) • Uncertainties resulting from the COVID-19 pandemic • Updates on the geological event in Alagoas • Loss of investment grade by rating agencies • Controlled company Braskem Idesa in Mexico affected by problems in the transportation of natural gas and ethane supply See complete DVA in the indicator center. For additional information on Financial Capital, visit our Management Report 2020. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 38 Manufactured Capital DIMENSION 2: Financial and economic results DIMENSION 3: Eliminate plastic waste Using our fixed assets of R$ 36 billion, in 2020 we pro- duced a wide and diversified portfolio of hundreds of products, with emphasis on thermoplastic resins, especially polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC), implementing initiatives aimed at increasing the productivity and competitiveness of our operations. Our global production capacity in 2020 was approximately 21.4 million tons of chemicals and thermoplastic resins. CAPACITY, PRODUCTION VOLUME AND USAGE RATES 2020 (KT/YEAR) Brazil (chemicals and specialties) Brazil (green ethylene) Brazil (PE) Brazil (PP) Brazil (PVC) Brazil (caustic soda) Brazil (chlorine) Brazil (EDC) U.S. (PP) Germany (PP) Mexico (ethene) Mexico (PE) Total 2020 9,468 7,636 81% 200 3,055 1,850 710 460 400 520 175 2,572 1,569 449 9 6 0 2,020 1,547 625 1,050 1,050 493 787 780 21,408 16,023 88% 84% 85% 63% 2% 2% 0% 77% 79% 75% 74% 75% See more at Braskem and Manufactured Capital. *Closing of the chlorine-soda plant activities in Bahia, due to the end of the useful life of this unit. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 39 Utilization Rates and Sales Renewal of Raw Material Contracts New PP Plant in the USA (Delta Project) Ethylene Supply in Mexico We aim to increase the utilization of our petrochemical plants to dilute fixed costs and make our operations more competi- tive. In 2020, our capacity utilization rates in general were affected by the temporary reduction in activities with the sluggish demand amidst the COVID pandemic; by scheduled shutdowns in the United States and Europe; and by the temporary inter- ruption of natural gas supply in Mexico. Yet the strong demand for thermoplastic resins led to increasing volume of sales in the Brazilian market, with a historical quarterly record of resins sold, as well as higher volume of sales in the United Sta- tes, Europe and Mexico. We renewed the raw material contracts in Brazil with Petrobras, with guaranteed supply of naphtha to the industrial units in São Paulo, Bahia and Rio Grande do Sul, and of ethane and propane to Rio de Janeiro. The prices in the five-year contracts are based on international references. Additionally, to ensure access to the na- phtha logistics system in Rio Grande do Sul, we have also renewed tanking contracts with Petrobras as well as handling and tanking contracts with Petrobras Transporte S.A. The Delta Project became the largest polypropylene plant in the United States, with 450,000 tons annual production capacity You can checkour 2020 operating result by region in our Management Report. Our polypropylene production was strengthened in 2020 with the opening of the new PP plant in La Porte, Texas. This is the largest polypropylene plant in the US (estimated annual production capa- city >450,000 tons per year), and makes us the largest PP producer in the Americas. As the first plant built by Braskem in the US, the Delta Project features the most advanced technology for polypropylene pro- duction. Aligned with the principles of sustainability and eco-ef- ficiency, the plant will have lower emission levels and generate less waste, operating with greater energy and water efficiency and fostering recycling activities. The total investment in the new facility was US$ 750 million, and the new unit will boost both exports and domestic sales in the US market. Operations started in September with significant ramp-up to 101,000 tons and 90% utilization rate by the end of 2020. Our modern innovation and technology center in Pittsburgh, Pennsylvania, enables us to deliver pioneering polymers to our customers. We have also announced the development of our global export center in Charleston, South Carolina, to better serve international clients. For more information about our new PP plant in the United States (Delta Project), click here. Braskem Idesa is a joint venture formed in 2010 in which Braskem holds 75% of the capital and Mexican Idesa holds the remaining 25% under a shareholder agreement. The company’s petrochemical complex uses ethane as a raw material and consumes utilities such as water, energy and natural gas. The operation has long-term input supply agreements: ethane is supplied directly by Pemex and natural gas mainly by the same state-owned company, in this case through Cenegas. Since 2017, Braskem Idesa has received lower volu- mes of ethane from Pemex than established in the supply contract. In 2019, in order to increase the use of the petrochemical plant, Braskem Idesa imple- mented an alternative logistics solution for impor- ting ethane from the United States through a priva- te terminal in Coatzacoalcos, and we are involved in ongoing discussions with the state company in the search for constructive solutions to address the lack of ethane in Mexico. At the end of 2020, Cenegas, the state agency responsible for the pipeline and natural gas trans- portation system in the region, unilaterally inter- rupted the flow of natural gas to our petrochemical complex, paralyzing our activities due to the lack of INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 40 energy inputs. We resumed activities partially in Ja- nuary 2021 under an experimental business model, following safety protocols and reducing the impact on our capacity to meet the demand of the Mexi- can plastic industry. Aiming to assure continuity of operations in Me- xico, in February 2021, we signed a memorandum of understanding with terms and conditions for discussing potential additives to the ethane supply contract with Pemex, as well as for the develop- ment of an import terminal for ethane. In addition, we signed an agreement for natural gas transpor- tation services with Cenegas, with a final term of 15 years. This term is subject to the signature of the definitive ethane supply agreement with Pemex. The ethane supply contract in Mexico is still valid and in force to date. For more information, see here Form 20-F. I’m GreenTM Portfolio GRI 103-2, 103-3 | 301, 306, 301-2 Sales of our I'm green TM biopolymers (PE Verde) and resins with recycled content grew respectively 5% and 284% compared to 2019, despite the weaker global de- mand in the first half of 2020 due to the COVID pande- mic. Recycled products reached 9,000 tons sold while Green PE reached 170,000 tons sold, both historical records. Regarding recycled products, we have expanded our partnerships and commercial activities to all regions where we operate. I'M GREENTM SALES (TONS.) Recycled Brazil Resins Chemicals U.S. and Europe Mexico 2020 9,067 4,490 2,765 1,725 1,810 2,766 2019 2,261 1,695 996 699 666 – Green PE 169,632 161,424 Utilization rate (green ethane) 87% 78% VAR 284% 165% 178% 147% 172% n.a. 5% 9% Performance in Recycling In all, our recycling efforts in 2020 con- tributed to more than 5,000 tons of plastic waste returning to the economy through resins with recycled content. In Brazil, we saw a 320% increase in the number of clients purchasing resins with recycled content compared to 2019. This growing number of clients reflects the stronger demand for plastic resins, especially in the retail sector. Another important factor is the expansion of our capacity to produce recycled products through new partnerships with recyclers, which leads to greater availability and a more robust portfolio. One key achievement was our partnership with Valoren to build a recycling line and expand our portfolio of post-consumer resins in Indaiatuba (SP). We will invest R$ 67 million in the construction of a recycling line with capacity to transform 250 million packages into 14,000 tons of high-quality post-consumption resin per year. Operations are expected to start in the fourth quarter of 2021. GRI 301 In the USA, Braskem entered a long-term relationship with Encina, a leading pro- vider of solutions for the production of renewable chemicals, for the production of circular recycled polypropylene (PP). Encina technology can produce renewab- le chemicals from post-consumer plas- TOTAL VOLUME OF POST-CONSUMPTION PLASTIC WASTE UTILIZED IN RECYCLED CONTENTS (TONS.) 20182018 20192019 20202020 Brazil Brazil U.S.U.S. MEXMEX EUREUR Brazil Brazil U.S.U.S. MEXMEX EUREUR Brazil Brazil U.S. U.S. MEXMEX EUREUR 107107 00 00 00 1,1131,113 666666 00 00 1,598 2,646 1,598 2,646 838838 212212 TOTAL: 107 TOTAL: 107 TOTAL: 1,779 TOTAL: 1,779 TOTAL: 5,294 TOTAL: 5,294 INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITStic, and the company plans to open a new facility in the second half of 2021. Additionally, we joined the Polypropylene Recycling Coalition, a group committed to increasing PP recycling, to ensure this material is widely recovered and reused in final markets, including food and beverage packaging, consumer goods and automotive parts. We also made our first sales of recycled resins in Mexico and Europe, and will soon announce partnerships to boost our operations in recycled products in those regions. Plastics in LANDFILLS In 2020, we closed an agreement with the environmental engineering company Tecipar through which we created a sorting plant for the separation of solid and organic waste collected by the municipalities of Barueri and Santana de Parnaíba. The screened plastic will be directed to a Braskem recycling partner, and the recycled resins they produce will then become raw material for new Braskem plastic products. The project is expected to prevent 2,000 tons of plastic waste from being dumped annually at the Santana de Parnaíba landfill. This total is equivalent to approximately 36 million plastic packaging items. CAPITAL PERFORMANCE 41 Some of our recycling projects • ABSORBENTS: A partnership between Braskem, Johnson & John- son and Mega Embalagens has strengthened our I’m green TM Recycled portfolio. The flexible packaging of the Always Free absorbents are now produced with 33% post-consumption resin obtained from flexible packaging reverse logistics. This is the first flexible thin film packaging in hygiene manufactured with 33% post-consumption resin. • “ANA DE AÇÚCAR”: A joint effort with footwear brand Anacapri ena- bled the launch of a slip-on called, "Ana de Açúcar", made from our biobased, I'm green™ EVA derived from sugarcane ethanol. Thanks to its renewable origin, this widely used material in the footwear industry captures 2.1 tons of CO2 for each ton produced. I’m green™ EVA is as flexible, light and resistant as conventional plastic resin, preserving product quality and design. • TRAMONTINA ECOLOGICAL LINE: Tramontina's ECO decoration line features products made with I'm green™ materials. The line was expanded in 2020 with a new model of the Aztec ECO Vase in their Basic line. Armchairs, chairs, vases, cachepots and watering cans are other items in the ECO line, which grew its market share by 54% in 2020 compared to 2019. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 42 INNOVATION STRUCTURE RESULTS 293 team members 2 Technical Centers focused on polymers 2 Technology and Innovation Centers, in Triunfo (Brazil) and Pittsburgh (U.S.) 19 new polyolefin grades added to the portfolio in 2020 128 projects for the development of new products, markets and processes 26 new patent applications and 127 1 Process Technology Development patent extensions Center, Mauá, (Brazil) 1 Renewable Chemicals Research Center in Campinas (Brazil) 7 pilot plants 2 labs for 3D printing in the cities of Triunfo (Brazil) and Pittsburgh (U.S.) 350+ customers served globally by our Technology Centers, with a total of more than 21,000 analyses INVESTMENTS IN INNOVATION 2020 AMOUNT IN R$ DETAILS R&D investment 242.5 million Amount related to fixed I&T expenses plus 2020 R&D Capex Percentage of fixed Innovation expenditures focused on sustainability Tax benefit for innovation 36% Percentage of Opex focused on sustainabi- lity in 2020 75.4 millon 62.5 million in Brazil 12.9 million in the United States Intellectual Capital DIMENSION 7: Sustainable innovation Innovation in products, processes and mindset are es- sential to achieve the objectives of our business strat- egy. On the innovation front, our efforts are aimed at Research and Development of new products and clean technologies, while fostering open innovation and ad- vancing our digital transformation program to improve processes and operations through data analysis and automation. We also encourage all our team members to think out- side the box and propose new alternatives for everyday challenges: we welcome, recognize and forward the ideas we receive. Our Digital Challenge, the Innovation Portal and the programs related to Transform for Value are all part of this effort. In 2020, our structure designed to foster innovation and technology, consisted of: INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS CAPITAL PERFORMANCE 43 Key Innovations Today Braskem holds a portfolio of 120 innovation proj- ects with a net present value (NPV) of approximately R$ 8 billion in different fronts: • Recycling: projects for both mechanical and chemical recycling. Objective: to accelerate the shift towards circular economy solutions, strengthening our reputation as a leader in sustainability. • Lightweight: seek solutions with less weight in the final product for the packaging industry and the automotive sector. Objective: to contribute to a more sustainable world, re- ducing waste generation and greenhouse gas emissions. • New design copolymers: production of a new family of copolymers with customized properties. Objective: to grow the business in markets having high- er added value. • Cleaner polyolefins: platform that increases the com- petitiveness of our polyolefin portfolio. Objective: to anticipate regulatory and chemical safety trends. • Activation and prepolymerization: process improve- ment projects. Objective: improve productivity or reduce costs. SUSTAINABILITY INDEX We developed and implemented the Sustainability Index for the entire portfolio of Innovation and Technology (I&T) projects, and this is now part of the standard plan- ning process and approval pipeline for I&T projects. The Index aims to ensure overall alignment with sustainabili- ty, and all projects are assessed in terms of sustainability from the early planning phase. A new project may have a positive, neutral or negative impact on each dimen- sion (water, energy, chemical safety, process/product, greenhouse gas emissions and circularity). In 2020, 80% of the I&T projects had a positive impact on the Sustain- ability Index. GREEN MEG We have enhanced our Green MEG (monoethylene glycol) production, a raw material for PET that moves about R$ 25 billion a year. In 2017, we signed a technological cooperation agreement to develop a pioneering path for the produc- tion of MEG from sugar, with a demonstration unit starting in 2019 to showcase the key design characteristics of the pioneering technology that transforms sugar into renew- able MEG. In 2020, we announced the first production of renewable MEG on a demonstration scale, and the next step includes making samples available for testing and validation by strategic partners. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 44 3D PRINTING Another innovation was the launch of a portfolio of exclu- sive products for 3D printing. Braskem's polypropylene (PP) solutions proved to be attractive and ideal for additive man- ufacturing for their recyclability, impact resistance, dimen- sional stability and lower density compared to other types of plastics, contributing to lighter parts printed in 3D. Keeping an EYE on Science Life Cycle Assessment (LCA) is a technique that allows quantifying and analyzing the environmental impacts of a good or service, from the extraction of the raw material to its final disposal. LCA is based on scientific criteria and the analysis provides accurate information to support business decisions aimed at reducing environmental impacts along the entire value chain. In addition to quantitative aspects, LCA considers carbon footprint, water footprint, toxicity and depletion of natural resources, among others. We use LCA to support strategic decisions in terms of their sustainability. In 2020, we launched the LCA Platform, a group of team members from all regions responsible for disseminating acquired knowledge and exploring new opportunities. A total of seven life cycle analysis studies were completed in 2020; another seven were started and are currently in development. In addition, we have developed a scientific article that is in the final stage of approval by the journal. Fostering Innovation BRASKEM LABS Braskem Labs was created in 2015 to expand and encou- rage innovations with a positive socio-environmental impact. The program is designed to accelerate startups that seek to make the world more sustainable through solutions that use chemicals and/or plastic, helping them move forward through the next stages of maturity. In the 2020 edition of the program, we invited compa- nies from our value chain to join us. Our clients Ambev, BRF, AkzoNobel and Grupo Boticário are now mentoring startups and exploring business opportunities with them. In the midst of social distancing requirements due to the pandemic, 20 startups selected for the Ignition and Scale programs went through three months of remote wor- kshops, dynamics and networking to accelerate and build up their business. The cycle ended with Demo Day, where startups made their pitch to investors, executives and business partners. In all, 25% of the accelerated star- tups entered relationships with Braskem or participating co-sponsors as customers, suppliers or partners. Our portfolio has grown to 74 accelerated startups so far, out of which 32% did business with Braskem. Learn more here. In all, 25% of the accelerated startups became Braskem customers, suppliers or partners INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSDESIGN CHALLENGE The Braskem Design Challenge connects professionals, students and companies in the search for innovative and more sustainable solutions to real packaging problems through creativity and design, using concepts such as De- sign for Environment, Life Cycle Assessment and Circular Economy. CAPITAL PERFORMANCE 45 Our Braskem Design Challenge was also taken online in 2020. The event gathered designers to solve packaging problems for our clients Grupo Boticário and BRF follo- wing the Design for Environment concept, which seeks to reduce environmental impacts over the entire product life cycle. The eighth edition of the Challenge brought toge- ther 24 recent graduates, and the best solution received a R$ 20,000 cash prize. The winning projects are currently in the planning phase for technical and industrial validation/ refinement, involving Braskem and clients in the prepara- tion for a future market launch. Find out more about Braskem Design Challenge The eighth edition of the Braskem Design Challenge attracted 24 just-graduated professionals; the prize for the winning solution was R$ 20,000 Digital Transformation In 2020 alone, we developed, tested and imple- mented digital strategies that unlocked recurring gains of more than R$ 54 million/year, representing a net present value (NPV) of more than R$ 150 mil- lion. Total gains may grow to reach R$ 665 million per year. • Industry 4.0 technology Aiming to maximize the efficiency of the plants, the project connects and optimizes plants in order to reduce costs, increase efficiency, improve the servi- ces provided, analyze data and automate repetitive or high-risk tasks; • Production and inventory planning The planning activities are based on an advanced data analysis system that assesses the drivers for product demand; • Purchasing procedure From end to end, we provide applications with in- tuitive language that streamline services from the moment the customer places an order until delivery and payment. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 46 Human Capital DIMENSION 1: Health and safety DIMENSION 6: Social responsibility and human rights Our team members play the leading role in achieving our results, growth and innovations. We aim to offer them a better professional experience, in an increasingly diverse and inclusive environment, guided by our non-negotiable value of safety for people. People Management In 2020, we put in place measures to ensure opportunities for growth, training and professional fulfillment, advancing initiatives that enhance BeUx, our value proposition to team members. For additional information, access our Management Report. Human Rights GRI 103-2, 103-3 | 412 We understand that our actions at Braskem have a positive or negative impact on human rights. Our sustainable development efforts are grounded in the internationally recognized rights expressed in the International Charter of Human Rights and in the Declaration of the International Labor Organization re- garding fundamental principles and rights in the wor- kplace. Our commitment to respecting human rights is aligned with the United Nations (UN) Guiding Principles on Business and Human Rights and covers our own operations, the surrounding communities, our value chains and even society as a whole. This commitment is expressed in the Global Sustainable Development Strategy approved by our Board of Directors and in Braskem's Codes of Conduct, both publicly available. The Global Sustainable Development Strategy esta- INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSblishes Braskem's responsibility to identify, assess and manage the risks of negative impacts on human rights, adopting preventive, mitigating or remedial actions. Our ambition is to be recognized as a company that promotes human rights and equity throughout our value chain. Our global 2030 goals are to manage 100% of the high and medium risks in human rights and to grow the share of women in leadership positions and of black people among our team members. HUMAN RIGHTS risk assessment and management In 2017, 100% of our operations were submitted to the first human rights impact assessment study, and we started introducing priority risks in the company's risk matrix. In 2020, we continued to implement measures for the prevention and mitigation of the priority human rights risks, which are now integrated in the Corporate Risk Matrix and followed up by the Board of Directors and senior management. These risks include Dignity and Diversity, Ethics and Transparency, Traditional Peoples, Decent work in the value chain and Post-consumption. Our human rights impact assessment will be updated in 2021 for all Braskem operations. CAPITAL PERFORMANCE 47 Diversity, Equity and Inclusion GRI 103-2, 103-3 | 405 Since 2014, our Diversity, Equity & Inclusion Program has developed actions to make our work environment increasingly diverse, inclusive and free from prejudice and discrimination. Besides wide-reaching initiatives across the organization, actions in five specific areas have specific strategy and objectives aiming to inclu- de and expand the participation of historical minori- ties at Braskem: GENDER EQUITY INDIVIDUALS WITH DISABILITIES RACE & ETHNICITY LGBTQIA+ SOCIALLY VULNERABLE Dignity and DIVERSITY In 2020, we finalized a diagnostic analysis and defined an action plan to strengthen the prevention and remediation of harassment and discrimination at Braskem, including better ways to protect and hear affected people, and measures to prevent new cases. Our Ethics Hotline received 473 reports and closed 578 cases (adding up cases received in 2021 and previous years). Out of the 37 harassment reports received in 2020, 36 were resolved, and 10 led to remedial actions. We received 5 reports of discrimination; 4 have been closed and 1 is still being analyzed. GRI 406-1 Learn more about our Human Rights risk mitigation actions here. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS Men Women Women in leadership Black Black in leadership CAPITAL PERFORMANCE 48 Our 2020 Diversity and Inclusion Week was the first global, online edition of the event. Lectures, panels and debates presented tools our team members can use to promote diversity in their daily lives. The 2020 edition of Braskem's Internship Program was also redesigned to enhance diversity and bring different types of knowledge into the company. All phases of the recruitment and selection process to fill 300 job ope- nings took place online, and the Logical Reasoning Test was replaced by the Decision-Making Test. Fluency in English is no longer mandatory for 40% of the openings and the selection of curricula is blind: recruiters have no access to information such as applicant age and college attended. This helps to ensure candidates are evaluated based on their alignment with our company culture, and not harmed by the possible need to invest in their training. Our Braskem Black University Student Week had five days of online debates highlighting the importance of diversity in the workplace. Different workshops pro- vided hints and tips on how to write up CVs, LinkedIn profiles, besides practical advice on how to prepare for selection processes. We also implemented actions to grow the number of women in leadership positions within Braskem. In Brazil, we were one of the signatories of the Equity is Priority movement launched by the Global Compact Brazil Network: we pledged to have 30% of women in senior leadership positions by 2025. Our Braskem organization in Europe also made progress in this regard, signing the “Charta of Diversity,” a German initiative that encou- rages local businesses to promote more diverse and inclusive work environments. RESULTS from our Internship Program In 2020, we also had significant figures in our Internship Program: + 25,000 participants RACE 38% of the openings filled by black candidates (11% higher than 2019) SOCIAL CLASS 45% of the interns came from families with a combined income of no more than R$ 4,000 (8% more than 2019) GENDER 54% of the openings were filled by women, in line with pre- vious years AGE we have a 43-year-old trainee for the first time Diversity Men 2018 2019 2020 Women 2018 2020 2019 2020 23% 23% 24% 77% 77% 76% Women in leadership 2018 2019 2020 27% 30% 30% Black 2018 2019 2019 2020 29% 30% 30% Black in leadership 2018 2019 2020 13% 13% 13% * leadership positions include coordinators, managers, directors, vice presidents and business leader. To find out the % of women for each hierarchical level, visit www.braskem.com/esgdashboard INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 49 Health and Safety at Work GRI 103-2, 103-3 | 403, 403-1, 403-2, 403-3, 403-4, 403-5, 403-6, 403-7 | SASB RT-CH-320a.2 DIMENSION 1: Health and safety Safety is not negotiable at Braskem. We care for our team members, and adopt practices to ensure their safety and health. We have occupational health and safety committees in every operation: the local com- mittees are responsible for local risk assessments and educational campaigns and they also participate in inci- dent investigations and other local actions. To learn more about our health and safety manage- ment, visit here. IMPACTS GRI 403-9 | SASB RT-CH-320a.1. In 2020, the three activities with major accidents were i. cargo handling, ii. accidental contact with hazardous che- micals and iii. falls. Accident prevention actions focused on reducing risks through technologies and equipment that can replace workers or minimize their exposure to risks, implementing improvements in engineering controls and adopting preventive maintenance programs. Admi- nistrative measures included enhanced risk analysis tools, improved planning for the execution of activities, training programs and more effective individual protection. Unfortunately, in 2020 we recorded a fatal acci- dent involving an outsourced party due to a leak of a flammable chemical followed by a fire in our operations in Alagoas. We have strengthened our safety practices after the accident, and started a series of studies and acquisitions of state-of-the-art equipment to further improve our processes. In spite of the regrettable fatality, we reduced the acci- dent rate with and without lost time by 27% compared to 2019, with the best performance in the last three years. Our goal is to achieve better results in Health and Safety by strengthening human reliability to reduce human errors. Other actions include careful planning and risk assessments, training sessions and process improvements. To this end, in 2020 we continued our Human Reliability Program, reviewed our SSMA mana- gement process for third parties and put the Mechani- cal Integrity Program into practice, with an emphasis on efficient management. Learn more in our ESG Dashboard. ACCIDENT RATE CAF + SAF (1MM/MHW) TIER 1 ACCIDENT RATE (1MM/MHW) 1.31 1.07 0.15 0.12 0.95 0.07 2018 2019 2020 2018 2019 2020 INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 50 Social and Relationship Capital GRI 102-12, 102-13, 103-2, 103-3 | 203, 413-1, 413-2 DIMENSION 6: Social responsibility and human rights In line with our Global Sustainable Development Strategy, we seek to promote actions that support social and eco- nomic development in the communities where we operate, with a focus on generating positive impacts and mitigating any negative impacts generated by the operation. We also maintain a consistent policy of Private Social Investments, Donations and Sponsorships to build long-lasting relation- ships with the communities that live near our facilities. We believe partnerships are essential for reaching our objectives. We join efforts and cooperate with different players, both within our value chain and in society at large. PRIVATE SOCIAL INVESTMENT Our priority is to manage plastic consumption and post-con- sumption practices and to foster innovation, entrepreneur- ship and local development in all regions where we operate. In 2020, we had an increase of approximately 40% in the amount invested in socio-environmental projects and donations, including those related to coping with COVID-19. With severely restricted face-to-face activities due to the pandemic, most of the socio-environmental projects supported by Braskem were completely paralyzed, so we reached fewer people than in 2019. For more information on our Private Social Investment projects, visit here. Indicator 2018 2019 2020 Number of people benefited¹ 199,281 533,447 236,944 Donated amount 11,214,187.61 8,886,492.61 25,440,555.98² Amount invested in PSI 9,570,478.67 14,570,068.26³ 7,278,548.78 Find out more about our partnerships here. 1. Includes PSI beneficiaries, donations and volunteering. 2. Includes donations related to coping with COVID-19. 3. Includes investments related to Maceió (TC1). INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS Aiming to ensure clear focus and consistency in our in- teractions, in 2020 we developed a Community Engage- ment Framework to guide the implementation of spe- cific engagement strategies for each community. The initiative is still in the pilot phase, and will soon unfold into actions based on the identified impacts. MADRE de Deus Thirty years ago, there was a chemical leak from a tank owned by Copanhia Carbonos Colloidais (CCC) in the city of Madre de Deus, Bahia. The leaked product belonged to Tecnor Tecnolumen Química do Nordeste (Tecnor) and might have been purchased by Compa- nhia Petroquímica de Camaçari, one of the companies that later formed the Braskem petrochemical conglomerate through a mer- ger in 2002. Braskem has never had any corporate relations with either CCC or Tecnor. Given our experience in the petrochemical products, Braskem was asked to help with analysis, studies and environmental repair of the affected region, which has been monitored since 2003 by the local authorities. Through and addendum to the agreement signed be- tween authorities and CCC in 2015, Braskem is supporting the relo- cation of families as necessary to proceed safely with repairs. CAPITAL PERFORMANCE 51 GLOBAL VOLUNTEER PROGRAM GOVERNMENTS AND ASSOCIATIONS While we had to adapt our actions to the remote format, solidarity remained a strong presence among our team members. At the end of 2020, we had 1,075 mobilized volunteers, of which 817 were team members and 257 were guests, benefiting about 21,000 people. At the beginning of the year, the Residents' Center in Maceió received two groups of volunteers who came from all over Brazil to support the people who lived in the neighborhoods affected by the geological phenom- enon. We also joined the World Cleanup Day with AEPW (Alliance to End Plastic Waste) with volunteers in six of the countries where we operate. Our interactions with government officials and asso- ciations must be based on transparency, ethics and dialogue; always initiated for a lawful reason, involving competent agents and conducted in an appropriate, professional manner. To ensure that our interactions with third parties, in par- ticular public bodies and associations, follow the criteria described above, we maintain a strong Government Relations team and have a robust Public Official Inter- action Tool. Our team members can record information about any type of interaction with public officials using this tool. Finally, we organized the second edition of the WeCARE Week, a global week of online activities on the circular economy, featuring lectures, conversation circles and practical activities for members and their families. Our interactions with government agencies and public banks involve a series of fiscal and tax obligations, tax incentives, special tax regimes and financing. This is especially relevant given the fact that we must necessarily engage in interactions with government agencies and public banks regarding fiscal matters, tax obligations, tax incentives, special tax regimes and fi- nancing. Loans from public banks and government agen- cies fund our growth projects, especially the National Bank for Economic and Social Development (BNDES) and the Northeast Bank of Brazil. We also operate with international Credit and Export Agencies (CEAs), such as Nippon Export and Investment Insurance (NEXI), Japan, Euler Hermes of Germany, and SACE, Italy. Get to know more about our Voluteer Program here. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 52 Supply Chain GRI 102-9, 103-2, 103-3 | 204, 205, 308, 412, 414 In line with our principles of quality and commitment to environmental responsibility, our supplier man- agement is decentralized, with actions distributed in different areas guided by our Code of Conduct for Third Parties. This internal guideline was built on in- ternational reference documents, such as the United Nations Universal Declaration of Human Rights, and a series of resolutions recommended by the Inter- national Labor Organization. Contractors must abide by the Code, which describes their rights and duties regarding labor and socio-environmental practices, and suppliers classified as having the highest potential risk are subject to a due dilligence process. Several other initiatives focus on increasing efficiency, mitigating risks, improving user experience and finan- cial return, such as the implementation of our digital global procurement platform (Coupa), with more than 40,000 online quotations received from approximately 10,000 suppliers leading to 91% of all service acquisi- tions. We also introduced a new inventory manage- ment tool to optimize material inventory parameters and storage. Regarding decent work in the value chain, our aware- ness-raising actions reached 402 truck drivers, 24 car- riers and 102 team members in logistics and transpor- tation companies. The main objective was to prevent the sexual exploitation of children and adolescents on highways under the Program Na Mão Certa, from Child- hood Brazil. Along the same line, we approved a man- agement process to assess and monitor critical suppli- ers under more comprehensive human rights criteria. Aiming to engage our supply chain in sustainability issues, in 2020 we reaffirmed our partnership with CDP Supply Chain, a program that helps companies identify environmental risks and opportunities in their supply chain. We achieved more than 86% engagement for Climate and 77% for Water, the highest historical index in nine years, reaching 119 critical suppliers in Water and 186 critical suppliers in Climate. Partnership with CDP Supply Chain helps to engage supply chain in sustainability matters We also reviewed supplier pre-qualification processes and supplier SSMA assessments to consider the bid- der's safety performance as an important criterium in the selection of service providers. ETHANOL SUPPLIERS Ethanol suppliers go through a very strict admission process: our Responsible Ethanol Purchase Program is based on Compliance (mandatory requirements) and Excellence (continuous improvement). By joining the program, the supplier pledges to uphold high standards in integrity, environment, human rights of workers and communities, management of sugarcane suppliers, quality and efficiency. When joining the program, suppliers commit to uphold- ing our code of conduct regarding integrity, environment, human rights for workers and communities, sugarcane supplier management, quality and efficiency. They must also agree to audit in their mills, including annual visits by sampling. Our close dialogue with ethanol suppliers continued in 2020; we carried out remote checks on Bon- sucro certification reports while independent monitors audited the implementation of their management pro- grams to ensure diligent management of ethanol suppli- ers, especially with regard to socio-environmental issues. 4 units were remotely verified, which represented 31.69% of the volume supplied in the year. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 53 Customer Chain Aiming to map and improve our Clients' overall ex- perience with us, Braskem started measuring CSAT (Customer Satisfaction Score) weekly to monitor satis- faction and identify opportunities for improving service quickly and effectively. Weekly CSAT follow-up was im- plemented in the second half of 2020 for all businesses in Brazil, complementing the biannual NPS (Net Promo- ter Score) survey. NPS has been in place since 2017, and its findings led to more than 20 improvement actions over the course of 2020. CSAT indicator measures satisfaction with customer service on a weekly basis, in addition to the biannual NPS measurement Reputation Management Our annual global reputation survey introduced in 2010 monitors how Braskem is perceived by its key audienc- es. We use the RepTrak® methodology, created by The RepTrak Company, to analyze stakeholder perception under emotional aspects (Pulse®) - degree of esteem, admiration, empathy and trust - and also as rational indicators in seven dimensions: Products and Services, Innovation, Work Environment, Governance, Citizen- ship, Leadership and Performance. In 2020, Braskem’s global Pulse® score ranged be- tween 60 and 69 points, with the largest global advance in history in the evaluation by participants. Considering the seven dimensions, governance is still the most relevant for companies in general, as well as for Braskem. Under strict observance of Brazilian Data Protection law LGPD, the survey heard 7,350 people worldwide in a great effort carried out by several internal areas of Braskem to glean the perceptions of our diverse audi- ences, both in relation to Braskem and regarding topics considered essential to our business, such as Circular Economy, ESG and Innovation. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 54 Natural Capital GRI 103-2, 103-3 | 302, 303, 305, 306 DIMENSION 3: Plastic waste DIMENSION 4: Climate change DIMENSION 5: Operational eco-efficiency We understand the relevance of sustainable development, and we seek to go beyond compliance with environmental legislation. We invest in technologies and initiatives to make our operations increasingly eco-efficient, optimizing the use of natural resources and reducing negative impacts on the environment. During the year, our GHG emission intensity indicators, energy consumption, water consump- tion, waste and effluent generation were impacted by the reduction in production caused by the drop in demand due to the Covid-19 pandemic. Emissions GRI 305 Our ambition is to lead the global petrochemical sector with the best indicators in GHG emissions, and to be a key player in capturing carbon through the production of renewable materials. Since 2008, when we first structured our internal management for this topic, we have implemented sev- eral Mitigation and Adaptation measures to minimize the impact of GHG emissions from our activities and anticipate potential risks and business opportunities related to climate change. Our corporate inventory of GHG emissions considers 100% of our global operations and in 2020 received -- for the 10th consecutive year -- the Gold classification of the Brazilian GHG Protocol Program (PBGHG) for its 2019 reported scopes 1, 2 and 3 emissions verified by an independent third party. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 55 DIRECT GREENHOUSE GAS EMISSIONS (SCOPE 1) (tCO2e) GRI 305-1 INDIRECT GREENHOUSE GAS EMISSIONS (SCOPE 2) (tCO2e) GRI 305-2 INTENSITY OF GREENHOUSE GAS EMISSIONS (TCO2E/T PRODUCTION) GRI 305-4 2018 20191 2020 10,214,251 10,032,221 10,035,761 2018 20191 2020 802,590 806,347 735,479 2018 20191 2020 0.609 0.640 0.669 In 2020, we continued reducing our absolute emissions (scopes 1 and 2), with a slight decline of 0.62% com- pared to the previous year, showing our sustained per- formance even in the face of the Covid-19 pandemic. We defined our new long-term goals in 2020, and we also updated the emissions of our base year, so the new figure now reflects scopes 1 and 2 results in 2019. Another highlight is that we continue to lead CDP Cli- mate, and we made their A-list. Scope 1 emissions totaled 10,035,761 tCO2e, about the same level as the previous year(+0.04%). Scope 2 emissions totaled 735,479 tCO2e, 8.79% lower than the previous year, as a result of the reduction in the emis- sion factors of the electricity grid. Approximately 75% of the electricity purchased by Braskem comes from renewable sources, especially considering the weight of hydroelectric power plants in the Brazilian Nation- al Interconnected System. In addition, since 2019 we have been obtaining proof of origin for electricity con- sumption at our units in Brazil (Market-based), repre- senting in 2020 18,969 tCO2e in self-declaration and 10,840 tCO2e with the retirement of renewable energy certificates, the so-called I-RECs. 1. The result published in the 2019 Report (scope 1, 9,756,560 tCO2e; scope 2, 801,634 tCO2e; and emission intensity, 0.624) was adjusted due to the revision of the data and premise and is in the certification phase by a third party, following the criteria of the accounting methodology of the GHG Protocol. GRI 102-48 INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 56 Our performance of the carbon intensity indicator (tCO2e/t produced) considers the impact of accumu- lated Scopes 1 and 2 emissions (Market-based; tCO2e) compared to the company's total production (tons produced). Despite our progress in absolute terms, Braskem's carbon intensity increased by 4.6% com- pared to 2019, reaching a value of 0.669 tCO2e / t. This increased intensity can be attributed mostly to the 5% smaller production volume, leading to lower ener- gy performance in the units, while the events of the pandemic of Covid-19 made it impossible to schedule maintenance stops in some industrial units. SIGNIFICANT ATMOSPHERIC EMISSIONS (TONS.) GRI 305-7, SASB RT-CH-120A.1. NOx SOx Volatile organic compounds (VOC) Toxic air pollutants¹ Particulate matter (MP) Others² 1. Includes Toxic Air Pollutants and HAP (Hazardous Air Pollutants). 2. Includes total hydrocarbons and carbon monoxide. 2018 2019 2020 10,566 11,529 11,908 4,871 9,091 595 1,381 7,989 3,982 5,989 8,753 7,523 551 932 526 976 6,622 4,810 Reduced our greenhouse gas emissions by more than 17% between 2008 and 2020. Reached 94% of our 2020 long-term climate change goals. This means we avoided the emission of almost 30 million tons CO2e, equivalent to planting more than 200 million trees. The results came from the purchase and use of renewable energy sources, besides efficiency gains in our units INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 57 CARBON CAPTURE SASB RT-CH-110a.2 Based on our commitment to sustainable innovation, we entered a partnership with the University of Illinois, USA, to research alternatives for the development of ethylene from the capture and use of carbon dioxide (CO2) emitted in industrial processes, especially from the burning of fuels. The project is still in the early phase of development, and we will contribute with our know-how in the commercialization of raw materials and production of polymers. The final objective is to evaluate the possi- bility of capturing CO2 emitted in our operation and converting it into a raw material for the production of polymers. CARBON PRICING GRI 305-8 Since 2016, our Internal Carbon Pricing methodol- ogy "Shadow Price" supports our investment de- cision-making with a targeted approach to risk management that enables us to leverage attractive opportunities. In 2020, based on what we learned from this methodology in Brazil, a marginal abatement cost curve (MACC) was built with all potential mitigation initiatives or under implementation. The analysis led to an update of the carbon price and to the definition of a global pricing strategy based on "Implied Price" for 100% Braskem operations worldwide. The implemen- tation plan for this strategy includes assessing the ad- equacy of the existing tools, updating the documents guiding the process, training all members involved in the effort and defining KPIs for monitoring. 10 YEARS OF GRI 305 capacity for green ethylene in the Triunfo industrial unit in Rio Grande do Sul from 200,000 to 260,000 tons per year. The project aiming to keep Braskem at the forefront of the biopolymers market will start in 2021, with completion planned for the fourth quarter of 2022. In 2020, we celebrated a decade since operations started in our green ethylene plant, which uses sug- arcane ethanol as a raw material to produce poly- ethylene. Under the I'm green ™ brand, this resin was recognized in 2020 by ECLAC as one of the most transformative initiatives in sustainable development in Latin America. Over its 10 years of existence, I'm green ™ has avoid- ed the emission of at least 5.54 million tons of CO2, which is equivalent to more than a year of automotive emissions in the city of São Paulo. In addition, this resin captures up to 3.09 tons of carbon dioxide for each ton produced, contributing twice to reducing greenhouse gas emissions while maintaining the same quality per- formance as conventional resins. Climate CHANGE adaptation plan In 2014, we developed a study to identify opportunities and climate risks in 100% of our operations. Based on that study, we created an adaptation plan with actions to mitigate or reduce all the most significant potential climate risks. Our goal is for all actions to be implemented by 2023. In 2020, we achieved 72% compliance with our Adaptation Plan, with emphasis on the completion of actions related to the threat of severe storms/electrical discharges in all units, which was the greatest potential impact mapped (in terms of the number of operations impacted). We have invested US$ 61 million in expanding biopoly- mer production to meet the fast-growing demand from society and our partners for sustainable prod- ucts in recent years. We will expand our production The next steps are to reassess the residual risk of all potential threats for which 100% of the actions were completed, strengthening the company's resilience in the face of potential extreme events. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS CAPITAL PERFORMANCE 58 Energy GRI 103-2, 103-3 | 302, 302-3, 302-4 SASB RT-CH-130a.1, RT-CH-110a.2 ENERGY EFFICIENCY AND RENEWABLE ENERGY Reducing energy consumption and using renewable en- ergy are key to reducing our carbon emissions. We invest in energy efficiency projects in our plants, and we seek long-term partnerships in our purchase of clean energy. Currently, at least 74% of all electricity we purchase globally comes from renewable sources. We signed two contracts for the purchase of renewable energy in 2020: one for solar energy with Canadian Solar, and the other for wind power, in partnership with Casa dos Ventos. Since 2018, we have negotiated and signed four renewable energy purchase agreements that will avoid an estimated 1.5 million tons of CO2e. These agreements involve the construction of renewable energy generation farms, contributing not only to our own sustainable development strategy, but also improving Brazil's energy matrix, in addi- tion to bringing economic development to the regions where the solar farms are installed. Our Energy Efficiency Program was created in 2019 to acceler- ate energy initiatives and boost our competitiveness while re- ducing our CO2e emissions. The initiatives aim to make Braskem one of the best chemical industries in energy consumption worldwide, and even during the pandemic we moved forward implementing them in several plants. In Bahia, the implemen- tation brought annual recurring savings of 833 GWh in energy consumed, equivalent to the annual electricity consump- tion of the entire state of Roraima with its almost 600,000 inhabitants. In addition, the initiatives also reduced 247,000 tons of CO2e in the period, or 8% of the site's emissions. While the coronavirus pandemic and the interrup- tion at the Chlorine-soda unit in Alagoas reduced our operational capacity, energy efficiency initiatives also contributed to lower energy consumption. The indicator for energy efficiency at Braskem units is calculated as the ratio between unit energy consump- tion for production processes and total unit output. This indicator is called energy intensity. The sum of the energy consumption volumes informed for each unit and the energy consumption reported in spreadsheet 302-1 is not the same. There are differences in the control volume considered in the respective calculation, ENERGY CONSUMPTION (GJ/T) 2018 20191 2020 10.94 11.09 11.23 in addition to other factors such as PCI, etc. The pur- poses are also different: the first is used to measure the improvement in energy efficiency at unit level, while the second serves accounting and financial purposes, includ- ing possible negotiations with the unit energy provider. The following graphics show consumption, type and source of energy at Braskem. PERCENTAGE OF CONSUMPTION BY TYPE OF ENERGY IN RELATION TO TOTAL CONSUMPTION Residual Fuels Natural Gas Electricity Coal Other Fuels 0.1% 4.6% 8.3% 0.5% 4.2% 7.4% 6.9% 4.6% 6.8% 2018 2019 2020 61.8% 62.2% 65.5% 25.2% 25.7% 23% INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSPERCENTAGE OF RENEWABLE ENERGY IN THE BRASKEM ENERGY MATRIX TOTAL RENEWABLE ENERGY (%) RENEWABLE ENERGY PURCHASED (%) 2018 2019 2020 7.1 6.4 5.1 2018 2019 2020 RENEWABLE ENERGY PURCHASED (%) 15.1 12.7 12.2 2018 20191 2020 74 72 74 COMMITMENTS AND GOALS In line with our medium-and long-term commitments to reduce 15% of CO2e emissions by 2030 and achieve car- bon neutrality by 2050, our goal for the short term is to achieve a reduction of 250kt/year in 2022 by using energy efficiency solutions and renewable energy throughout 2021. In terms of our energy matrix, we are establishing partner- ships to raise the percentage of electricity purchased from renewable sources to more than 85% by 2030. CAPITAL PERFORMANCE 59 Water and Effluents GRI 303, 303-1, 303-2, 303-4, 303-5 Our annual eco-efficiency targets for water consumption and effluent generation per ton of products (m³ t) are monitored monthly by the company's top leadership. At unit level, effluent management observes local legislation and internal procedures related to the characteristics of the operation in the region, including substances of inter- est and composition of effluents. These substances and their respective limits are listed in specific national/re- gional legislation or established in the operating licenses. In recognition for our water management efforts, for the fourth consecutive time we made A List in CDP Water, ranking among the best publicly held companies in water governance. CEO Water Mandate 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 of more than 150 companies around the world committed to advancing water management. In 2020, we continued our efforts to identify and implement collective actions to reduce the water risk of the hydrographic basins where we are present, interacting with several actors, among which there were no contact with public agents. Indicator 2018 2019 2020 Total water consumption (m3) 75,715,960 72,389,471 69,341,060 water consumption (m3/t) 4.28 4.31 4.31 Total effluent generation (m3) 20,981,429 21,922,812 19,672,409 Effluent generation (m3/t) Water reuse (%) 1.19 26.9% 1.31 25.4% 1.22 25.8% INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSCAPITAL PERFORMANCE 60 Water Security Our long-term goal is to ensure that all the water used by Braskem comes from low-risk sources. In a challeng- ing global scenario, our water risk assessment identified severe droughts as the greatest potential risk in Brazil, for example. We carry out periodic checks to ensure we have enough quality water for the operation of our plants in every region. Diagnostic analyses guide Braskem's Adaptation Plans, aiming to mitigate availability risks and to allocate investments to safer water sources, such as reused or desalinated water. WATER SECURITY INDEX 2018 75% 2019 75% 2020 83% Compared to 2019, our units in Mexico and Germany maintained the same Water Security Index - 100%. The indicator for USA operations was reduced due to the completion of the Texas River Basin risk as- sessment pointing to higher long-term water risk (by 2040). In contrast, Brazil operations improved by around 12% thanks to progress in shifting from sur- face water abstraction to safer underground water abstraction, in addition to other internal initiatives to increase water reuse and recycling. Given the pro- portion of Brazilian operations within Braskem's total number of plants, their weight in the indicator is 80%, which explains why overall corporate results rose from 75% in 2019 to 82.9% in 2020, with a total of 18.86% of our water consumption coming from areas where water stress is high or very high. Waste GRI 103-2, 103-3 | 306, 306-1, 306-2, 306-3 A truly circular economy starts at home. That is why we have several initiatives to avoid internal waste generation. Our priorities are: 1. Avoid generation; 2. Reduce; 3. Reuse; 4. Waste treatment; 5. Final Dis- posal. Our efforts in the different categories aim to reduce waste treatment costs, increase eco-effi- ciency rates and prevent environmental liabilities. Since 2018, we are members of Operation Clean Sweep, and we are committed to adopting the best practices in the control of pellets, flakes and dust in all our industrial and logistics units. Our goal was to become a member of OCS Blue - the highest level of participation in the program - by 2020, and we cele- brate the fact that we are now in this category both in Brazil and in the United States. Our Pellet Zero Program combined with other pellet containment actions at unit level collected approximately 3,000 tons of pellets, flakes and powders, preventing them from reaching rivers and seas. We collected 3,000 tons of pellets, flakes and powders and reached the OCS Blue level of the Operation Clean Sweep program in 2020 Indicator Total waste generation (Kg) Indicator - Waste generation (Kg/t) 2018 2019 2020 37,669,700 37,002,579 35,892,667 2.13 2.20 2.23 INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITS ABOUT THE REPORT 61 Questions, feedback and suggestions about this report can be sent to braskem-ri@braskem.com.br GRI 102-53 About the Report The Braskem 2020 Integrated Report presents our financial and non-financial results from January 1 to December 31, 2020, including the legal entities Braskem has operational control of and/or entities that have their information con- solidated in Braskem financial statements. Released annu- ally, the report relies on data collected globally and engages different areas of the company, led by Investor Relations, Sustainable Development and Corporate Marketing. Aiming to ensure the report meets the needs of our diverse audiences, we follow the guidelines of the Global Reporting Initiative (GRI), Standards version, Essential agreement option; the guidelines of the Sustainabili- ty Accounting Standards Board (SASB), as well as the integrated reporting principles proposed by the Interna- tional Integrated Reporting Council (IIRC), also abiding by CVM Resolution No. 14/2020 and fulfilling all mandatory requirements of Technical Guideline CPC 09. We address our chosen ESGs in addition to presenting the economic and financial information provided externally by KPMG and reviewed by Braskem's governance bodies, including the Board of Directors. GRI 102-48, 102-49, 102-51 Materiality Braskem periodically assesses materiality (the relevance of sustainability topics) to define its long-term objectives and strategy for contributing to Sustainable Development. The topics contained in this report are material to the company's strategy in that they have a positive or nega- tive effect on our ability to generate long-term value, as defined by our materiality matrix. This structured process includes stakeholder consul- tation to ensure Braskem maintains a clear focus while pursuing its purpose of improving people's lives through plastic chemicals. As a petrochemical company and supplier of raw ma- terials for different plastic product chains, Braskem consistently focuses on the possible impacts caused by its businesses on areas such as health and safety, economic and financial results, development of mem- bers, local development, eco-efficiency of its opera- tions, post-consumer plastic, among others. For more information about our sustainable performance, see our Global Policy on Sustainable Development. The matrix originally defined in 2013 was reviewed in- ternally in 2020; the process and methodology used can be found here. GRI 102-21, 102-40, 102-42, 102-43, 102-44, 102-47, 103-1 The internal review considered the corporate risks iden- tified by our risk management procedure and pointed out the rationale for our 2030 Commitments, as well as their correlation with UN SDGs. INTEGRATED REPORT 2020A MESSAGE FROM THE BUSINESS LEADERBRASKEMSTRATEGIC PLANNINGCAPITAL PERFORMANCEABOUT THE REPORTCREDITSMaterial topic GRI content summary Summary of SASB content 62 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020MATERIAL TOPICS 63 Material topic Material topic Sustainability dimension (Braskem global sustai- nability strategy) GRI and SASB indicators REFERENCE BETWEEN THE COMPANY'S MATERIAL THEMES AND GRI AND SABS INDICATORS Non-renewable resources Dimension 3: Plastic Waste Dimension 4: Climate Change Health and safety Dimension 1: Health and Safety 301-1 Materials used by weight or volume 403-1 Health & Safety Management System 403-10 Work-related health problems 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 Training in health and occupational safety 403-6 Promoting workers' health 403-7 Prevention and mitigation of impacts on occupational health and safety directly linked to commercial relations 403-8 Workers covered by the occupational health and safety management system 403-9 Work-related injuries RT-CH-320a.1 - (1) Total recordable incident rate (TRIR) and (2) Fatality rate for (a) direct em- ployees and (b) contract employees RT-CH-320a.2 - Description of efforts to assess, monitor, and reduce exposure of employees and contract workers to long-term (chronic) health risks RT-CH-540a.1 - Process safety incidents count (PSIC), process safety total incident rate (PS- TIR) and process safety incident severity rate (PSISR) RT-CH-540a.2 - Number of transport incidents MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020MATERIAL TOPICS 64 Material topic Sustainability dimension (Braskem global sustai- nability strategy) GRI and SASB indicators Human Rights & Equity Dimension 6: Social Responsibility and Human Rights 405-1 Diversity in Governing Bodies and Employees 412-2 Employees trained in human rights policies and practices 405-2 Ratio of wages and remuneration between women and men 202-1 Proportion of lowest paid wages, by gender, compared to local minimum wage 202-2 Percentage of senior management hired from the local community Safe use of products Dimension 1: Health and Safety 412-3 Significant investment agreements and contracts that include human rights clauses or that have been subject to assessment regarding human rights 406-1 Incidents of discrimination and corrective actions taken 414-1 New suppliers selected based on social criteria 416-1 Evaluation of the health and safety impacts of product and service categories 417-1 Product and service information and labeling requirements RT-CH-410b.1 - (1) Percentage of products that contain Globally Harmonized System of Classification and Labeling of Chemicals (GHS) Category 1 and 2 Health and Environmental Hazardous Substances, (2) percentage of such products that have undergone a hazard as- sessment RT-CH-410b.2 - Discussion of strategy to (1) manage chemicals of concern and (2) develop alternatives with reduced human and/or environmental impact RT-CH-410c.1 - Percentage of products by revenue that contain genetically modified orga- nisms (GMOs) MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020MATERIAL TOPICS 65 Material topic Sustainability dimension (Braskem global sustai- nability strategy) GRI and SASB indicators Water Dimension 5: Operational Eco Efficiency Economic Performance Dimension 2: Economic & Financial Results Social Investments and Community Dimension 6: Social Responsibility and Human Rights 303-1 Interactions with water as a shared resource 303-2 Management of impacts related to water discharges 303-3 Water withdrawal 303-4 Water Disposal 303-5 Water consumption RT-CH-140a.1 - (1) Total water withdrawn (2) Total water consumed, percentage of each in regions with high or extremely high baseline water stress RT-CH-140a.2 - Number of incidents of non-compliance associated with water quality per- mits, standards, and regulations RT-CH-140a.3 - Description of water management risks and discussion of strategies and practices to mitigate those risks 201-1 Direct economic value generated and distributed 201-2 Financial implications and other risks and opportunities arising from climate change 201-4 Financial assistance received from the government RT-CH-000.A - Production by reportable segment 203-1 Development and impact of infrastructure investments and services offered 204-1 Proportion of spending with local suppliers 413-1 Operations with local community engagement, impact assessment and local develop- ment programs 413-2 Operations with actual and significant negative impacts on local communities RT-CH-210a.1 - Discussion of engagement processes to manage risks and opportunities as- sociated with community interests Free competition Dimension 2: Economic & Financial Results 206-1 Lawsuits for unfair competition, trust and monopoly practices MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020MATERIAL TOPICS 66 Material topic Sustainability dimension (Braskem global sustai- nability strategy) GRI and SASB indicators Corruption Dimensão 2: Economic & Financial Results 205-2 Communication and training on anticorruption policies and procedures 205-1 Operations subjected to risk assessments related to corruption Public policies N/A 205-3 Confirmed cases of corruption and measures taken 415-1 Political contributions RT-CH-530a.1 - Discussion of corporate positions related to government regulations and/or policy Local labor Dimension 6: Social Responsibility and Human Rights 412-1 Operations subject to human rights impact analyses or assessments Transparency & Integrity Dimension 2: Economic & Financial Results Dimension 4: Climate Change 307-1 Non-compliance with environmental laws and regulations 419-1 Non-compliance with social and economic laws and regulations 302-1 Energy consumption within the organization 302-3 Energy intensity 302-4 Reduction in energy consumption 305-1 Direct greenhouse gas emissions (Scope 1) 305-2 Indirect emissions from energy acquisition (Scope 2) 305-3 Other indirect greenhouse gas emissions (Scope 3) Climate Change and Energy Dimension 5: Operational Eco Efficiency 305-4 Intensity of greenhouse gas emissions 305-5 Reduction of greenhouse gas emissions RT-CH-110a.1 - Gross global Scope 1 emissions, percentage covered under emissions-limiting regulations RT-CH-110a.2 - Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets RT-CH-130a.1 – (1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable, (4) total self-generated energy MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020MATERIAL TOPICS 67 Material topic Sustainability dimension (Braskem global sustai- nability strategy) GRI and SASB indicators Air Dimension 5: Operational Eco Efficiency 305-6 Emissions of ozone-depleting substances (OSD) 305-7 NOx, SOx and other significant air emissions RT-CH-120a.1- Air emissions of the following pollutants: (1) NOX (excluding N2O), (2) SOX, (3) volatile organic compounds (VOCs), and (4) hazardous air pollutants (HAPs) 306-1 Generation of waste and significant impacts related to waste 306-2 Management of significant impacts related to waste Waste Dimension 5: Operational Eco Efficiency 306-3 Waste generated 306-4 Waste not for disposal 306-5 Waste for disposal Biodiversity N/A RT-CH-150a.1 - Amount of hazardous waste generated, percentage recycled 304-1 Owned, leased or managed operational units within or in the vicinity of protected areas and other areas of high biodiversity value located outside protected areas 304-2. Significant impacts of activities, products and services on biodiversity 304-3. Protected or restored habitats Post-consumption Dimension 3: Plastic Waste 301-2. Materials sourced from recycling Suppliers - Environmental Manage- ment N/A Product development - Environmen- tal Dimension 7: Sustainable Innovation * Material topic 15 was revised from "Equal Opportunities" to "Human Rights & Equaliity"* 308-1 New suppliers selected based on environmental criteria DMA Innovation RT-CH-410a.1 - Revenue from products designed for use-phase resource efficiency MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY 68 GRI content summary GRI 102-55 GRI Standard Disclosure Page/URL Omission SDGs Global Compact General disclosures Organizational Profile GRI 102: 2016 General Disclosures 102-1 Name of Organization 102-2 Activities, brands, products and services 6 7 102-3 Location of headquarters 102-4 Location of operations 102-5 Ownership and legal form 102-6 Markets served 102-7 Scale of the organization 120, Lemos Monteiro street - Butantã - São Paulo/SP. Zip code 05501-050 8 Publicly held corporation 8 8 102-8 Information on employees and other workers Available at www.braskem.com/esgdashboard 8 102-9 Supply chain 52 102-10 Significant changes in the organization and its supply chain No significant change during the period covered by the report. 102-11 Precautionary Principle or approach 102-12 External initiatives 102-13 Membership of associations Strategy GRI 102: 2016 General Disclosures 102-14 Statement from senior decision-maker 102-15 Key impacts, risks and opportunities 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. 50 50 3 20 8 8 8 8 8 8 6 4 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY GRI Standard Disclosure Page/URL Omission SDGs 69 Global Compact 16 Ethics and Integrity GRI 102: 2016 General Disclosures Governance 102-16 Values, principles, standards and norms of behavior 102-17 Mechanisms for advice and concerns about ethics 102-18 Governance structure 102-19 Delegating authority 102-20 Executive-level responsibility for economic, environmental and social issues 9 11 10 10 10 GRI 102: 2016 General Disclosures 102-21 Consulting stakeholders on economic, environmental and social topics Available at https:/www.braskem.com.br/material- issuesassessement 102-22 Composition of the highest governance body and its committees 10 102-23 Chair of the highest governance body Available at www.braskem.com.br/corporate-governance 102-24 Nominating and selecting the highest governance body 102-25 Conflicts of interest 102-26 Role of the highest governance body in setting purpose, values and strategy 102-27 Collective knowledge of the highest governance body 102-28 Evaluating the highest governance body’s per- formance 102-29 Identifying and managing economic, environ- mental, and social impacts Available at www.braskem.com.br/corporate-governance 10 10 10 10 Available at www.braskem.com.br/corporate-governance 102-30 Effectiveness of risk management processes 20 102-31 Review of economic, environmental, and social topics Available at www.braskem.com.br/corporate-governance MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY GRI Standard Disclosure Page/URL Omission SDGs 70 Global Compact Stakeholder Engagement 102-40 List of stakeholder groups Available at https://www.braskem.com.br/material-issues- assessement 102-41 Collective bargaining agreements Available at www.braskem.com/esgdashboard 8 3 GRI 102: 2016 General Disclosures 102-42 Identifying and selecting stakeholders 102-43 Approach to stakeholder engagement 102-44 Key topics and concerns raised Reporting Practice 102-45 Entities included in the consolidated financial statements 102-46 Defining report content and topic Boundaries GRI 102: 2016 General Disclosures 102-47 List of material topics 102-48 Restatements of information 102-49 Changes in the reporting 102-50 Reporting period 102-51 Date of most recent report 102-52 Reporting cycle 102-53 Contact point for questions regarding the report 102-54 Claims of reporting in accordance with the GRI Standards 102-55 GRI Content Index 102-56 External assurance Available at https://www.braskem.com.br/material-issues- assessement Available at https://www.braskem.com.br/material-issues- assessement Available at https://www.braskem.com.br/material-issues- assessement Available at www.braskem.com/esgdashboard Available at https://www.braskem.com.br/material-issues- assessement Available at https://www.braskem.com.br/material-issues- assessement 55 and 61 61 2 61 2 61 61 68 82 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY GRI Standard Materials GRI 201: Economic Performance Disclosure Page/URL Omission SDGs 71 Global Compact GRI 103: Management approach 2016 GRI 201: 2016 Economic Performance Market presence GRI 103: Management approach 2016 GRI 202: Market Presence 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach Available at https://www.braskem.com.br/material-issues- assessement 36 36 201-1 Direct economic value generated and distributed Available at www.braskem.com/esgdashboard 201-2 Financial implications and other risks and opportunities due to climate change Available at www.braskem.com/esgdashboard 201-4 Financial assistance received from government Available at www.braskem.com/esgdashboard 103-1 Explanation of material topic and its Boundary Available at https://www.braskem.com.br/material-issues- assessement 103-2 The management approach and its components Available at www.braskem.com/esgdashboard 103-3 Evaluation of the management approach Available at www.braskem.com/esgdashboard 202-1 Ratio of standard entry level wage by gender compared to local minimum wage 202-2- Proportion of senior management hired from the local community Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard Indirect Economic Impacts 8, 9 13 16 1, 5, 8 8 7, 8 6 6 GRI 103: Management approach 2016 GRI 203: Indirect Economic Impacts 2016 103-1 Explanation of material topic and its Boundary Available at https://www.braskem.com.br/material-issues- assessement 103-2 The management approach and its components Available at www.braskem.com/esgdashboard 103-3 Evaluation of the management approach Available at www.braskem.com/esgdashboard 203-1 Infrastructure investments and services supported Available at www.braskem.com/esgdashboard 5, 9, 11 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY GRI Standard Disclosure Page/URL Omission SDGs Procurement Practices GRI 103: Management approach 2016 GRI 204: Procurement Practices 2016 Anti-Corruption GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary Available at https://www.braskem.com.br/material-issues- assessement 103-2 The management approach and its components Available at www.braskem.com/esgdashboard 103-3 Evaluation of the management approach Available at www.braskem.com/esgdashboard 204-1 Proportion of spending on local suppliers Available at www.braskem.com/esgdashboard 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components Available at https://www.braskem.com.br/material-issues- assessement Available at https://www.braskem.com.br/material-issues- assessement 103-3 Evaluation of the management approach Available at www.braskem.com/esgdashboard 205-1 Operations assessed for risks related to corruption GRI 205: Anti- corruption 2016 205-2 Communication and training about anti- corruption policies and procedures 205-3 Confirmed cases of corruption and actions taken Anti-competitive behavior GRI 103: Management approach 2016 GRI 206: Anti- competitive Behavior 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach 206-1 Legal actions for anti-competitive behavior, anti-trust and monopoly practices 11 and 12 Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard Available at https://www.braskem.com.br/material-issues- assessement 11 11 Available at www.braskem.com/esgdashboard 8 16 16 16 16 72 Global Compact 10 10 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI Standard Materials GRI 103: Management approach 2016 GRI 301: Materials 2016 Energy GRI 103: Management approach 2016 GRI SUMMARY Disclosure Page/URL Omission SDGs 73 Global Compact 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach Available at https://www.braskem.com.br/material-issues- assessement 7 and 40 7 and 40 301-1 Materials used by weight or volume Available at www.braskem.com/esgdashboard 301-2 Recycled input materials used 40 8, 12 8, 12 8 8, 19 103-1 Explanation of material topic and its Boundary 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 2016 302-3 Energy intensity 302-4 Reduction of energy consumption Water and effluents GRI 103: Management approach 2016 GRI 303: Water and Effluents 2018 103-1 Explanation of material topic and its Boundary 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 303-3 Water withdrawal 303-4 Water discharge 303-5 Water consumption Available at https://www.braskem.com.br/material-issues- assessement 58 and 59 58 and 59 58 58 58 Available at https://www.braskem.com.br/material-issues- assessement 58 and 59 58 and 59 59 59 Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard 59 7, 8, 12, 13 7, 8, 12, 13 7, 8, 12, 13 8, 9 6, 12 7, 8 6 6 6 6 8 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY Disclosure Page/URL Omission SDGs 74 Global Compact GRI Standard Biodiversity GRI 103: Management approach 2016 GRI 304: Biodiversity 2016 Emissions GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary Available at https://www.braskem.com.br/material-issues- assessement 103-2 The management approach and its components Available at www.braskem.com/esgdashboard 103-3 Evaluation of the management approach Available at www.braskem.com/esgdashboard 304-1 Operational sites owned, leased or managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas 304-2 Significant impacts of activities, products and services on biodiversity Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard 304-3 Habitats protected or restored Available at www.braskem.com/esgdashboard 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach 305-1 Direct (Scope 1) GHG emissions 305-2 Energy indirect (Scope 2) GHG emissions Available at https://www.braskem.com.br/material-issues- assessement 29, 34, 54, 55, 56 and 57 29, 34, 54, 55, 56 and 57 55 55 305-3 Other indirect (Scope 3) GHG emissions Available at www.braskem.com/esgdashboard GRI 305: Emissions 2016 305-4 GHG emissions intensity 305-5 Reduction of GHG emissions 55 56 305-6 Emissions of ozone-depleting substances (ODS) Available at www.braskem.com/esgdashboard 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx) and other significant air emissions 56 6, 14, 15 6, 14, 15 6, 14, 15 3, 12, 13, 14, 15 3, 12, 13, 14, 15 13, 14, 15 13, 14, 15 13, 14, 15 13, 14, 15 13, 14, 15 8 8 8 8 8 8 8, 9 8, 9 8 8 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY Disclosure Page/URL Omission SDGs 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach 306-1 Generation of waste and significant impacts related to waste 306-2 Management of significant waste-related impacts 306-3 Waste generated 306-4 Waste diverted from disposal 306-5 Waste directed to disposal Available at https://www.braskem.com.br/material-issues- assessement 33, 40 and 60 33, 40 and 60 60 60 60 60 60 75 Global Compact 8 8 8 GRI Standard Waste GRI 103: Management approach 2016 GRI 306: Waste 2020 Environmental Compliance GRI 103: Management approach 2016 GRI 307: Environmental Compliance 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach 307-1 Non-compliance with environmental laws and regulations Supplier Environmental Assessment Available at https://www.braskem.com.br/material-issues- assessement 20 and 22 20 and 22 Available at www.braskem.com/esgdashboard 16 GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary Available at https://www.braskem.com.br/material-issues- assessement 103-2 The management approach and its components Available at www.braskem.com/esgdashboard 103-3 Evaluation of the management approach Available at www.braskem.com/esgdashboard MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY Disclosure Page/URL Omission SDGs 76 Global Compact GRI Standard GRI 308: Environmental Assessment of Suppliers 2016 308-1 New suppliers that were screened using environmental criteria Available at www.braskem.com/esgdashboard Occupational Health and Safety GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach 403-1 Occupational health and safety management system 403-2 Hazard identification, risk assessment and incident investigation Available at https://www.braskem.com.br/material-issues- assessement 49 49 Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard 403-3 Occupational health services Available at www.braskem.com/esgdashboard 403-4 Worker participation, consultation and communication on occupational health and safety 403-5 Worker training on occupational health and safety Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard 403-6 Promotion of worker health Available at www.braskem.com/esgdashboard GRI 403: Occupational Health and Safety 403-7 Prevention and mitigation of occupational health and safety impacts directly linked to business relationships 403-8 Workers covered by an occupational health and safety management system 403-9 Work-related injuries 403-10 Work-related illnesses Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard Diversity and Equal Opportunity GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach Available at https://www.braskem.com.br/material-issues- assessement 47 and 48 47 and 48 16 8 3, 8 3, 8 8 8 3 8 8 3, 8, 16 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY 77 GRI Standard Disclosure Page/URL Omission 405-1 Diversity of governance bodies and employees Available at www.braskem.com/esgdashboard 405-2 Ratio of basic salary and remuneration of women to men Available at www.braskem.com/esgdashboard GRI 405: Diversity and Equal Opportunity 2016 Non-Discrimination GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 406: Non- discrimination 2016 406-1 Incidents of discrimination and corrective actions taken Human Rights Assessment GRI 103: Management approach 2016 GRI 412: Human Rights Assessment 2016 Local Communities GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach 412-1 Operations that have been subject to human ri- ghts reviews or impact assessments 412-2 Employee training on human rights policies and practices 412-3 Significant investment agreements and contrac- ts that include human rights clauses or that underwent human rights screening 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach SDGs 5, 8 5, 8, 10 Global Compact 6 6 5, 8 4, 5 Available at https://www.braskem.com.br/material-issues- assessement 47 and 48 47 and 48 47 Available at https://www.braskem.com.br/material-issues- assessement 20, 46 and 52 20, 46 and 52 Available at www.braskem.com/esgdashboard 1 Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard 2, 6 1, 2, 6 Available at https://www.braskem.com.br/material-issues- assessement 50 50 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY GRI Standard Disclosure Page/URL Omission SDGs GRI 413: Local Communities 2016 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 Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard 5, 8, 10 78 Global Compact 10 GRI 103: Management approach 2016 GRI 414: Supplier Social Assessment 2016 Public Policy GRI 103: Management approach 2016 GRI 415: Public Policy 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach 414-1 New suppliers that were screened using social criteria 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach Available at https://www.braskem.com.br/material-issues- assessement 52 52 Available at www.braskem.com/esgdashboard 5, 8, 16 6 Available at https://www.braskem.com.br/material-issues- assessement 11 11 415-1 Political contributions Available at www.braskem.com/esgdashboard 16 10 Customer Health and Safety GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary Available at https://www.braskem.com.br/material-issues- assessement 103-2 The management approach and its components Available at www.braskem.com/esgdashboard 103-3 Evaluation of the management approach. Available at www.braskem.com/esgdashboard MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020GRI SUMMARY GRI Standard Disclosure Page/URL Omission SDGs GRI 416: Customer Health and Safety 2016 416-1 Assessment of the health and safety impacts of products and services Marketing and Labeling Available at www.braskem.com/esgdashboard GRI 103: Management approach 2016 103-1 Explanation of material topic and its Boundary Available at https://www.braskem.com.br/material-issues- assessement 103-2 The management approach and its components Available at www.braskem.com/esgdashboard 103-3 Evaluation of the management approach Available at www.braskem.com/esgdashboard GRI 417: Marketing and Labeling 2016 417-1 Requirements for product and service information and labeling Socioeconomic Compliance GRI 103: Management approach 2016 GRI 419: Socioeconomic Compliance 2016 103-1 Explanation of material topic and its Boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach 419-1 Non-compliance with social and economic laws and regulations Available at www.braskem.com/esgdashboard Available at https://www.braskem.com.br/material-issues- assessement 11 11 Available at www.braskem.com/esgdashboard 12 16 79 Global Compact MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020SASB SUMMARY 80 Summary of SASB content Topic SASB - Chemicals Greenhouse gas emissions Air Quality Power Management Metrics Page/ URL RT-CH-110a.1. Gross global Scope 1 emissions, percentage covered by emissions limit regulations 55 and available at https://www.braskem.com.br/material-issues- assessement RT-CH-110a.2. Discussion of the long and short-term strategy or plan for managing Scope 1 emissions, emission reduction targets and goal performance analysis RT-CH-120a.1. Emissions of the following pollutants: (1) NOx (excluding N2O), (2) SOx, (3) volatile organic compounds (VOCs) and (4) hazardous air pollutants (HAPs) RT-CH-130a.1. (1) Total energy consumed, (2) percentage of electricity from the grid, (3) percentage of renewables, (4) total self-generated energy RT-CH-140a.1. (1) Total water withdrawn, (2) total water consumed, percentage of each in regions with baseline high or extremely high water stress 34, 57 and 58 56 58 60 and available at https://www.braskem.com.br/material-issues- assessement Omission: we were unable to consolidate this data globally for this cycle and Report. We are commited to improving our global management of this topic and intend to report on it in our 2021 Report. Water management RT-CH-140a.2. Number of non-compliance incidents associated with licenses, standards and regulations for water quality RT-CH-140a.3. Description of water management risks and discussion of strategies and practices to mitigate such risks 60 Hazardous Waste Management RT-CH-150a.1. Amount of hazardous waste generated and percentage recycled Available at www.braskem.com/esgdashboard SDG 13 13 3, 12 7, 9 6, 9 6 6, 9 12 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020SASB SUMMARY 81 Metrics Page/ URL SDG Topic Community Relations Workers' health and safety Safety and Environmental Management for Chemicals RT-CH-210a.1. Discussion of engagement processes for managing risks and opportunities associated with community interests RT-CH-320a.1. (1) Total recordable incident rate (TRIR) and (2) fatality rate for (a) direct employees and (b) outsourced employees RT-CH-320a.2. Description of efforts to assess, monitor and reduce the exposure of employees and contracted workers to health issues (chronic disease) RT-CH-410b.1 (1) Percentage of products that contain the Harmonized System of Classification and Labeling of Chemicals (GHS) Category 1 and 2 Hazardous Substances for Health and Environment, (2) percentage of such products that have been subjected to risk assessment1) RT-CH-410b.2 - Discussion of strategy to (1) manage chemicals of concern and (2) develop alternatives with reduced human and/or environmental impact Genetically Modified Organisms RT-CH-410c.1 - Percentage of products by revenue that contain genetically modified organisms (GMOs) Management of the Legal & Regulatory Environment RT-CH-530a.1 - Discussion of corporate positions related to government regulations and/or policy proposals that address environmental and social factors affecting the industry Operational safety, emergency preparedness and response RT-CH-540a.1. Process Security Incident Count (PSIC), Total Process Security Incident Rate (PSTIR) and Security Incident Severity Rate for the Process (PSISR) 4 RT-CH-540a.2. Number of transport-related incidents managing risks and opportunities associated with community interests 50 49 49 Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard 21 Available at www.braskem.com/esgdashboard Available at www.braskem.com/esgdashboard Production RT-CH-000.A - Production by reportable segment 38 8 8 12 12 12 8 8 8 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 202082 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 202083 MATERIAL TOPICSGRI SUMMARYSASB SUMMARYINTEGRATED REPORT 2020Credits Braskem Carolina Rodrigues Pignata Gabriela Linhares Bacarin Isabela Basso Vittoria Pìcarelli rpt sustentabilidade Content: Sarah Fernandes Project management: Ricardo Duarte Graphic design and layout: Sergio Almeida GRI Consultant: Adriana Couto English Version Doris Buchmann Images Brand Center Braskem Gettyy Images Audit KPMG GRI 102-56 

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