Natura &Co Holding S.A. Annual Report 2004

FY2004 Annual Report · Natura &Co Holding S.A.

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Natura Brasil

Indústria e Comércio
de Cosméticos Natura Ltda.
Rod. Anhanguera, km 30,5 - s/nº
CEP 07750 000 - Cajamar - SP
Tel. (55 11) 4446 2000
Fax (55 11) 4446 2093

Natura Cosméticos S.A.
Rod. Régis Bittencourt, km 293 - s/nº
CEP 06882 700 - Itapecerica da Serra - SP
Tel. (55 11) 4147 8300
Fax (55 11) 4147 8636

Centro de Distribuição - Matias Barbosa
Rodovia BR 040, km 800, Lote 5
Bairro Empresarial Parque Sul
CEP 36120 000 - Matias Barbosa - MG
Tel./Fax (55 32) 3273 2766

bemestarbemestarbem

Centro de Distribuição - Uberlândia
Rua Ignês Favato, 301, Distrito Industrial
CEP 38402 340 - Uberlândia - MG
Tel. (55 34) 3222 8202
Fax (55 34) 3232 2126

Natura Argentina

Av. del Libertador, 1295 - 1º piso
Vicente López (1638)
Capital Federal - Argentina
Tel. (54 11) 4837 6100
Fax (54 11) 4837 6005

Natura Chile

Ricardo Lyon, 222 of 201
Providencia - Santiago - Chile
Tel. (56 2) 620 9200
Fax (56 2) 620 9230

Natura Peru

Av. Del Ejército, 801
Miraflores - Lima 18 - Peru
Tel. (511) 440 1362
Fax (511) 440 1362 ex. 275

Natura Europa

2, carrefour de La Croix-Rouge
Saint Germain de Prés
75006 - Paris - France
Tel. 33 (0) 1 42 22 12 59
Fax 33 (0) 1 45 48 45 54

Teresa Testino

Maria Aparecida Sousa

Ladilas Robert

Verónica Saez

Cybele Amado

Delbanor Mello Viana

Fernanda Inouye Miura

bemestarbemestarbem bemestarbemestarbem

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bem estar bem

www.natura.net

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Message from the Board 2
Reason for Being 8
Vision and Beliefs 10
Company Profile 14
Methodology and Main Indicators 20
Corporate governance
and Capital Markets 28
Risk Management 34

Economic and Financial, Social and
Environmental Results 40
Quality of Relationships 50
Highlights of Investments
in Corporate Responsibility 66
Economic, Environmental
and Social Indicators – GRI 76
Index – GRI 106
Financial Statements 108

Teresa Testino

Maria Aparecida Sousa

Ladilas Robert

Verónica Saez

Cybele Amado

Delbanor Mello Viana

Fernanda Inouye Miura

Statement from Natura 2
Reason for Being 8
Vision and Beliefs 10
Company Profile 14
Methodology and Main Indicators 20
Corporate Governance
and Capital Markets 28
Risk Management 34

2004naturaannualreport

A company is a set of relationships.To develop it means to take
care of these relationships and to improve them – with respect,
transparency and by sharing values and passions.
During its 35 years of existence, Natura has sought to establish
quality relationships with those that are part of its network:
customers, employees, Sales Representatives, suppliers and
many other partners. It is in recognition of these people that
Natura has chosen relationships as a concept of the
2004 Annual Report.
In the following pages, there are statements from people who,
each in his or her own way, have helped and continue to help
establishing Natura’s path, in Brazil and abroad.The task of
hearing and portraying their stories was of the Museu da Pessoa
and the Brazilian photographer Eduardo Simões. For the graphic
design, the designer Wilson Spinardi Junior searched for scenes
of the daily lives of the people from the Natura community to
develop prints using the monotype technique.
With these people, we want to share the belief that we nurture
the web of life by taking care of relationships.

statement

from natura

The year of the 35th anniversary of Natura was rich in achievements that bring,
at this moment of retrospection, a most sincere feeling of joy.

One of these achievements, the company’s initial public offering on May 26th,
merits attention. With this, we completed a project that began around seven
years ago, with important measures for the institutionalization of Natura.The
success achieved with this initiative, evidenced not only by the participation
of over 5,000 investors but also by the subsequent evolution of the shares,
was altogether surprising.

The company’s initial public offering in a period of adverse international
circumstances started to be seen as a paradigm of a new moment on the
Brazilian capital markets. We have experienced this surprise with great joy
but also with a related sense of responsibility. We believe that this recognition
represents an unequivocal demonstration of trust in the company’s
management and its capability to continuously generate value. It also shows a
strong affinity by investors to the worldview, the beliefs and the values that
have been guiding us. And that will guide us in the development of our
company, our brand, our country and our world.

Pedro Luiz Barreiros Passos,
Guilherme Peirão Leal and
Antonio Luiz da Cunha Seabra

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From an operational point of view,
the reasons for enthusiasm were also
strong. In 2004, sales showed growth of
33%, totaling 117% over the past three
years. Net income, of R$ 300.3 million,
represented 17% of net revenues.
Operations in Latin America also
increased consistently with a growth, in
US dollars, of 52% in the year and 107%
over the past three years. One of the
reasons for this strength was the
increase of 15.6% in the number of
independent Sales Representatives,
totaling 407,000 in Brazil and
26,000 abroad.

With these particular stakeholders, who
are so vital for our operations, we seek
to increasingly strengthen our relationship
and offer comprehensive personal and
professional development opportunities.
To this community, an estimated income
of R$ 1 billion was generated
this year.

In 2004, 63% of the company’s billings
originated from products launched or
relaunched over the past two years.
We invested 2.7% of the net income
in research and development and, over
the coming years, we intend to maintain
this ratio higher than 3%. We will also
maintain our innovation strategy

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in its many dimensions: in the sustainable use of raw materials from Brazilian
biodiversity, in technological developments, in the communication of our
concepts and in the strengthening of our relationships.

In the ongoing process of incorporating the sustainable development principles
into the company’s daily routine, significant progress was made in the
environmental management and corporate responsibility principles. We defined
the strategic priorities of Natura based on the economic and financial, social
and environmental aspects, culminating with the structuring of action plans
for the whole company. Significant developments were the NBR ISO 14001
certification and the enhancement of the products’ lifecycle assessment.

Firm steps were also taken in the relationships with the communities that
supply raw materials from biodiversity and in the relationships with neighboring
communities, particularly the active participation of Natura, in partnership with
local government and civil society, in actions for the implementation of Agenda
21 in Cajamar.

The universality of our beliefs, values and Reason For Being is the basis for the
growing recognition that we have received in the development of the Natura brand,
both in Brazil and abroad.This recognition makes us confident about the possibility
of an accelerated international expansion over the coming years.We will seek new
markets in Latin America, where we have already established the direct sales model,
and we will study new formulas to take Natura’s value proposal to other regions.

In this direction, the main challenge we face is to develop entrepreneurial leaders
that can identify with our values. Internationalization also translates into a more
complex operation, showing the need to combine growth with the maintenance of
the strategic discipline, the culture and the management style that are characteristic
of Natura. Another important challenge is the one we will face to continuously
strengthen our relationship with traditional communities.

The decision to contribute to the creation of a development model that combines
economic prosperity, social justice and environmental preservation will continue to
demand a great learning and innovation effort. From this standpoint, we have the
strong conviction that the role of companies in the shaping of a better world will
be increasingly associated with the evidence that we are all – individuals, companies,
NGOs and governments – co-responsible for the quality of life, present and future,
on Earth. In this context, we reaffirm our support to the Global Compact and the
effort to promote the principles proposed by the United Nations.

We express our gratitude and recognition to all of those who have contributed to
the development of Natura.To our customers, who privilege us with their choices.
To our Sales Representatives, who share their beliefs, passions and causes with us.
To our employees, who are examples of the fact that continuous improvement
transforms both individuals and organizations.To our suppliers, with whom we share
the challenge of creating value for customers and society.To all our other partners
from civil society and government who are aware that our relationship networks
strengthen the network of life.To all, our deep gratitude for all we have achieved
and celebrate today, with the vigorous disposition to embrace, more and more,
our beliefs, passions and responsibilities.They are the seeds of Natura that is
growing and of the world of which we have always dreamt.

Antonio Luiz da Cunha Seabra
Cochairman of the Board –
Founder

Guilherme Peirão Leal
Cochairman of the Board

Pedro Luiz Barreiros Passos
Chief Executive Officer

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Flávia Azevedo,
a Natura customer

Espaço Natura
(Natura Space) Cajamar,
São Paulo

Marina Sanvicente,
a Natura customer,
and her daughter Luna

reason for
being

well-being
is the harmonious,
pleasant relationship of
a person with oneself,
with one’s body.

Our Reason for Being
is to create and sell
products and services
that promote
well-being/being well.

being well
is the empathetic, successful,
and gratifying relationship
of a person with others,
with Nature and
with the whole.

beliefs

Life is a chain of relationships.
Nothing in the universe exists alone.
Everything is interdependent.
It is our belief that the appreciation of the importance
of relationships is the foundation of an enormous
human revolution in the search for peace, solidarity and
life in all of its manifestations.

The continuous search for improvement promotes
the development of individuals,
organizations, and society.

Commitment to the truth is the route to perfecting
the quality of relationships.

The greater the diversity, the greater the wealth and
vitality of whole system.

The search for beauty, which is the genuine aspiration
of every human being, must be free of preconceived
ideas and manipulation.

The company, a living organism, is a dynamic
set of relationships.
Its value and longevity are connected to its ability
to contribute to the evolution of society
and its sustainable development.

vision

Because of its corporate behavior, the quality
of the relationships it establishes and the quality
of its products and services, Natura will be an
international brand, identified with the community
of people who are committed to the construction
of a better world, based on a better relationship
with themselves, with others, with nature
of which they are part, with the whole.

In the first Natura’s sales campaign in
which she took part in 1995, Peruvian
Sales Representative Teresa Testino was
the third best. Not bad for someone
who had never sold beauty products
and had spent a good part of her life
working in the office of an electricity
company in Lima. In the fourth
campaign, in August of the same year,
she came first in the ranking. “I joined
Natura to have some space in my life,”
she says. “I started selling, started to
enjoy it, joined the company and grew.”

Today, she has around 200 clients,
of all ages, who she attracted with
effort and dedication. “My working
routine consists of leaving every day
in the morning. At 8 o’clock in the
morning, I’m out in the streets.”
For Teresa, the work she does is nice,
feminine, and the secret is that she
believes in the products she is selling.
“I’m personally convinced that Natura’s
products are the best. This is what
I try to make my clients realize.”

Teresa is proud of the prizes she has
received. “I won them all: necklace,
bracelet... I had a ball.” And she came
to Brazil, in 1998, to receive the award
for Best Sales Representative in Peru.
A party for someone who claims to
love Brazil and, particularly,
Rio de Janeiro.

Teresa says that she has, over these past
ten years, learned to see Natura with
her heart. “What I love the most about
this job is working with people,
establishing relationships.”

Teresa

Testino,
a Natura Sales
Representative,
at the Pachacamac
sanctuary, Lima, Peru

Paula Camargo,
a Natura customer

company

profile

A listed company since May 2004, when
it turned 35 years old, Natura enjoys a
leadership position on the Brazilian CF&T
(cosmetics, fragrances and toiletries)
market. The company concentrates its
production, logistics and research in
Cajamar, State of São Paulo, in a complex
with 81,500 square meters of site area
and 643,000 square meters of land area.
In the Itapecerica da Serra unit, also in
the State of São Paulo, the commercial
and marketing activities are developed.
Controlled by Brazilian investors, Natura
had, at the end of 2004, 3,177 employees
in Brazil and 378 abroad – in Argentina,
Chile and Peru.

The embryo of what is today one of the
largest groups in Brazil, with gross sales
of R$ 2.5 billion in 2004, was once a small
shop and a laboratory created in 1969 on
Rua Oscar Freire in the city of São Paulo.
Born from two passions – for cosmetics,
as a means for promotion of self-
knowledge, and for human relations –
Natura opted, 30 years ago, for the direct
selling system supported by the work of
independent resellers, the Natura Sales
Representatives. The increasingly stronger
relationship with the Sales Representatives
has established a solid grounding for the
expansion of Natura’s business in Brazil
and Latin America.

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Over time, Natura has developed a strong
brand, which is today among the three
most highly valued brands in Brazil (see
Brand on page 47). It has also developed a
portfolio of quality products, which meet
the needs of a large group of customers.
Currently, this portfolio is made up of
around 600 products – in the areas of
make-up, fragrances, bathing, hair, facial
and body treatment, oral hygiene, sun
protection, among others. In 2004,
177 million units(1) were sold in
Brazil and abroad.

Profile of Employees

Age

Up to 25 (18%)

Between 26 and 39 (60%)

Over 40 (22%)

Sex
Male (38%)

Female (62%)

Length of Service with the Company
Up to 2 years (30%)
From 2 to 5 years (22%)
From 5 to 10 years (29%)

1. Units resold by Sales Representatives (does not include samples,

gifts and resale support material).

Over 10 years (18%)

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1

1979
New companies join
the group and form
the Natura System.

Business volume:
US$ 5 million.

1989
Merger of the
companies
that formed the
Natura System.

Business volume:
US$ 170 million.

1969
Natura is born
in São Paulo.

1992
Start of operations
in Argentina
and Peru.

2001
Integrated with the
company’s values,
the Espaço Natura
is inaugurated in
Cajamar, State of
São Paulo.

2003
Natura is elected
The Best Company
for Women to
Work for by
Exame magazine
and Great Place to
Work Institute.

1999
Business volume:
US$ 657 million.

2000
Natura starts to use
Brazilian biodiversity
as a technological
platform with the
launch of the Ekos
line. It is the first
Brazilian company
to adopt the
recommendations
of the GRI in its
Annual Report.

2004
Natura obtains the NBR
ISO 14001 certification.

Initial Public Offering on the
São Paulo Stock Exchange
(Bovespa).

Signing of the cooperation
agreement for the
implementation of Agenda
21 in Cajamar.

Natura is elected the Most
Highly Regarded Company
in Brazil by CartaCapital
magazine and InterScience.

Business volume:
US$ 1.2 billion.

1995
Natura creates the
Crer para Ver Program
in partnership with the
Fundação Abrinq.

1996
Inspired by the belief
that beauty must be
free of stereotypes,
the Truly Beautiful
Women concept
is established.

1998
Creation
of the Board
of Directors.

1993
Launch of the
Mamãe e Bebê
line, which
highlights the
importance of the
bond between
mother and child.

1974
Option for the
direct sales system.

1983
Natura is a pioneer
in the launch of
products with refills.

1990
Natura expresses
its Reason for
Being and beliefs.

our

history

The smell emanating from a wood stove
conjures up distant memories for Maria
Aparecida de Sousa, or Cida, as she is called.
When her family was gathered with her
mother telling stories, the young Cida was
overwhelmed by smell of popcorn and baked
corn. From the same house in Ruy Barbosa,
State of Bahia, she guards the memory of the
smell of the burnt sugar and cinnamon that
her grandmother, Bilia, used to cook pastries
with unforgettable taste.The same sweet
taste that reminds her of her father, who was
a truck driver, and of her happy childhood.
“He was the kind of father who would sit
me on his lap and always have his pockets
full of candies,” she says.

During her youth, in São Paulo, Cida
continued to live guided by smells. First,
in her job as a maid in the house of a
family whose father would give off Natura’s
“Sr. N” perfume. Afterwards, when she lived
near the L’Arc en Ciel factory – at the time,
one of Natura’s companies –, which would
cover the region with the smell of the
Musc perfume.

It seemed to be her fate. Cida, who wanted
a job at L’Arc en Ciel, went for an interview
and ended up at the very plant she dreamt
of. “Luck had traced a path for me,” she says.
She started in the perfume line.Today, she
is a leader in the make-up factory.

“I enjoy working in a place with so many
different people who get along so well,”
Cida says. “Natura is a company that
wants to see you well – with yourself
and with others. It’s a place where
I learn everyday.”

Maria Aparecida

Sousa,
Natura’s employee,
at the Espaço Natura,
Cajamar, São Paulo.

methodology and

main indicators

Natura’s Annual Report gathers the
economic, social and environmental
results of the company, so as to properly
reflect the search for balance in these three
dimensions of sustainability in the business
development.

To report its activities, Natura uses the
practices recommended by distinguished
specialized entities. In the case of the
economic performance, Natura follows the
guidelines of the Associação dos Analistas
e Profissionais de Investimento do Mercado
de Capitais (Association of Capital Markets
Investment Analysts and Professionals),
Apimec, and of the Associação Brasileira das
Companhias Abertas (Brazilian Association
of Publicly Traded Companies), Abrasca, and
includes information about risk management
and corporate governance. Abrasca, founded
in 1971, has its activities guided by the

enhancement of corporate policy and
management practices, with an emphasis
on mechanisms and processes that allow
for a constant and qualified expansion
of the capital markets.

For the information on social and
environmental performance, Natura
adopts the guidelines of the Instituto Ethos
de Empresas e Responsabilidade Social
(Ethos Institute of Companies and Social
Responsibility) and adopts the model of the
Global Reporting Initiative, GRI.The main
objective of the Instituto Ethos, founded in
1998, is to mobilize and support companies to
conduct their business in a socially responsible
manner, thus contributing to the dissemination
of corporate social responsibility practice.The
GRI, an organization created in 1997, is the
result of the effort of multilateral institutions
to develop a structure for voluntary reports

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on the economic, social and environmental
impact of a company’s activities.

As a member of the Associação
Brasileira de Comunicação Empresarial
(Brazilian Association of Corporate
Communication), Aberje, Natura adopts
practices of transparent communication
and is involved with the development of
indicators that measure these practices,
a process which started in 2004.

The 2002 Natura Annual Report was
nominated as the 16th best report by
SustainAbility, according to a survey
conducted by this international
consultancy together with the ratings
agency Standard & Poor’s and the United
Nations Environment Programme.
In the survey, 350 reports of companies
from several countries were analyzed.

Main economic indicators
(consolidated)

Evolution of Gross Sales (in millions of reais)

2002
2003
2004

1,411.2

1,910.1

2,539.7

Evolution of the Adjusted EBITDA(1)
(in millions of reais)

2002
2003
2004

199.2

295.7

431.7

Excludes the participation of subordinated debentures.

Evolution of Costs and Expenses
(% of net sales)

Cost of products sold
Selling expenses
Administrative and general expenses(1)
Other

2002
2003
2004

34.8

34.5

32.5

32.4

30.3

14.7

1.4

13.6

2.0

11.7

2.5

83.3
80.4
77.0

1. For 2004 only, the administrative and general expenses exclude

9.2 million of reais in expenses related to the IPO.

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2

Financial Performance(1) (in millions of reais)

Domestic gross sales
International gross sales(2)
Other sales

Gross operating revenues
Net operating revenues
EBITDA(3)

Operating income(4)

Net income
Investments
Financial income
Total assets
Shareholders’ equity and profit-sharing

debenture(5)
Net indebtedness(6)

2002
1,375.2
35.0
1.0
1,411.2
993.1
199.2
121.1
21.7
25.2
(44.3)
646.6

225.9
119.1

2003
1,860.3
47.9
2.0
1,910.1
1,328.9
295.7
230.4
63.9
23.9
(30.1)
723,9

354.2
(19.0)

2004
2,472.0
66.8
0.8
2,539.7
1,769.7
431.7
395.4
300.3
83.1
(2.8)
1.016,4

436.1
(91.1)

1. Operations in Brazil, Argentina, Chile and Peru, and exports to Bolivia.
2. Operations in Argentina, Chile and Peru and exports to Bolivia.
3. Earnings before financial income, profit-sharing debentures, income tax, depreciation and amortization.
4. Operating income after financial income.
5. Total shareholders’ equity and profit-sharing debentures.
6. Excludes profit-sharing debentures.

Business performance

Consolidated business volume(1) (in millions of reais)
Consolidated business volume per Sales Representative(2)

(in reais per Sales Representative/year)

Number of products launched

2002
1,951.7

8,875
91

2003
2,652.5

10,283
117

2004
3,531.1

11,277
182

% Change
04/03
32.9%
39.5%
(58.6)%
33.0%
33.2%
46.0%
71.6%
369.9%
247.7%
(90.7)%
40.4%

23.1%
379.5%

% Change
04/03
33.1%

9.7%
55.6%

1. Business volume is the estimated amount of total billing by the Natura Sales Representatives based on the estimated profit margin of these Sales
Representatives, excluding the revenues from the supporting material that is provided to them. It includes Argentina, Chile and Peru.The 2002 and
2003 amounts differ from those previously disclosed because they have been aligned with the criteria of the Associação Brasileira de Empresas de
Venda Direta (Brazilian Association of Direct Selling Companies) – ABEVD.

2. Considers the average number of active Sales Representatives – those who made at least one purchase order during a marketing cycle. Each
marketing cycle lasts three weeks. It includes Argentina, Chile and Peru.The 2003 report used the average number of available Sales Representatives
(those Sales Representatives who placed an order during the last four marketing cycles).This change was made in order to align this indicator with
the ABEVD criteria.

Main Environmental Indicators

Use of Natural Resources

Water Use per Unit Sold(1)
(liters/unit)

2002
2003
2004

1.22

0.87

0.67

1. Units resold by Sales Representatives (does not include samples,
gifts, resale support material, products from the Crer para Ver line,
among others).

Water Reuse
(% of total water treated at the
Effluent Treatment Station)

2002
2003
2004

39.5

Target for 2005 To
consumption of water.

reduce by 1%

the

relative

Target for 2005 Increase the percentage of treated
water reused from 39.5% to 49%.

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Energy Use

Total Energy Use (Energy Matrix)(1)
per Unit Sold (kjoules/unit sold)

2002
2003
2004

1,025.7

785.2

603.7

1. The energy matrix is made up of the total energy that Natura uses
that comes from various sources (electricity, diesel and LPG).

Generation of Waste per Unit Sold
(grams/units)

2002
2003
2004

2.99
2.92

2.56

Target for 2005 To reduce the generation of waste per
unit sold from 2.56 grams to 2.38 grams.

Target for 2005 To reduce by 5.5% the relative
consumption of energy.

Environmental Management

Life Cycle Assessment

NBR ISO 14.001 Certification
(% of implementation)

In 2004, Natura made a life cycle assessment, LCA, on
the packages of all products launched, systematically
taking into account environmental aspects in the
design of its packages. It also makes an LCA on all
products in its portfolio, including those launched in
previous years.

Target for 2005 a) Ensure that all products launched
have their packages analyzed by the life cycle
assessment (LCA) tool. b) Reduce by 2%, in relation to
2004, the weighted average of the environmental
impact of the packages of Natura products. c)
Determine environmental performance indicators for
the products and add information on these indicators
on the labels. d) As there is no available model for the
life cycle assessment of raw materials in the cosmetics
industry, Natura will develop a model in 2005. It will be
applied on the Ekos shampoo line and subject to
international analysis.

Waste

Generation of Waste – Destination (%)

2002

2003

2004

Incinerated

Disposed of in
landfill sites

Recycled

5.52
6.40
5.43

31.91

24.40

21.20

62.58

69.20

73.41

2002
2003
2004

100

Environmental Evaluation of Suppliers
(% of response to the environmental
evaluation questionnaire)

2003

2004

Delivered the
whole environmental
documentation
Delivered part of
the environmental
documentation
Did not deliver
the environmental
documentation

Environmental Evaluation of Suppliers (%)

Suppliers evaluated as A(1)
Suppliers evaluated as A/B(2)
Suppliers evaluated as B(3)

2004

1. Meet between 90% and 100% of requirements.
2. Meet between 80% and 89% of requirements.
3. Meet between 60% and 79% of requirements.

Target for 2005 a) Disclose and apply the quality system
procedures established with suppliers. b) Evaluate 100%
of the documentation of all environmentally critical
suppliers and new suppliers. c) Of the suppliers evaluated
in 2004, to increase by 30% those classified as A.

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Sector-specific Indicator

Animal Testing (number of tests)

Cosmetics
Phytotherapeutic products

2002
2003
2004

308

200

249

266

1,263

557

reduce by 25% the number of tests of raw materials on
animals for cosmetic products – was surpassed. This
reduction reached 78.5%. As required by the proper
authorities, such as the Agência Nacional de Vigilância
Sanitária (Brazilian Agency for Sanitary Inspection),
Anvisa, Natura performs tests on animals to verify the
safety and efficiency of phytotherapeutic products.

118

1,381

Natura reaffirms its position against the performance of
laboratory animal testing but performs those that are
required by law. For over six years, the company has
been seeking alternatives to reduce these tests while
also ensuring the safety of the products. Since 2003,
Natura has totally abolished the use of animals in tests
of finished cosmetic products.The target for 2004 – to

Target for 2005 To keep the number of animals used in
tests of raw materials for cosmetic products below 170
(which represents a reduction of 32% in relation to the
target for 2004).This means an increase of 158% in the
number of tests performed in 2004.This increase is due
to the fact that some tests scheduled for 2004 were not
performed and will be performed in 2005.

Main social indicators

Added Value

Destination of Funds per Type of Stakeholder
(in millions of reais)
Shareholders
Natura Sales Representatives(1)
Government

Employees
Shareholders

2002

2003

2004

679.3

585.5

380.0

155.1

97.6

942.2

795.8

1,365.9

1,059.3

502.1

177.8
191.6

547.8

247.3

307.5

1. The 2002 and 2003 figures were changed for them to be aligned
with Associação Brasileira de Empresas de Venda Direta (Brazilian
Association of Direct Selling Companies), ABEVD criteria.

Creation of Jobs and
Generation of Income

Employees, Outsourced Employees
and Temporary Workers(1)

2003

769
802

1,051

2002
Outsourced
employees
assigned to the
company’s units
Temporary
workers

Employees

230
259

Includes Brazil and international operations.

2004

2,884
2,986

3,555

Natura Sales Representatives(1) (in thousands)

2002
2003
2004
1.

Includes Brazil and international operations.

322

375

433

Relationship

Satisfaction (favorability in %)

2002

2003

Supliers(1)(3)

Consumers(1)(3)

Sales
Representatives(1)(3)

Employees(2)

N.A.

95
96

88
87

2004

1. Surveys conducted by the Indicator GfK do Brasil Institute.
2. Organizational climate survey developed by the consultancy Hay

Group do Brasil.

3. The results of the customer, supplier and Sale Representative
satisfaction surveys were not available on the closing date of this
report, therefore the figures related to 2004 will be available in the
online version (www.natura.net).

Investments in Corporate Responsibility

During the last decade, Natura has been enhancing the
responsible social and environmental management of its
business, based on the establishment of quality
relationships with its many stakeholders and of
corporate targets that are increasingly compatible with
sustainable development. These ethical principles have
started to permeate the many initiatives of the company

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in all areas. The option for the sustainable use of raw
materials from Brazilian biodiversity as a technological
platform, the adoption of a social and environmental
supplier evaluation process and the development of
packages that have less of an environmental impact are
results of this movement. The objective of the Annual
Report is to present the whole of this strategy.
To focus its attention on the critical issues of this
strategy, Natura created a management support tool
that helps managers plan and visualize specific actions
aimed at each type of stakeholder: the Corporate
Responsibility Matrix, a management tool.This tool does
not reflect all the efforts of Natura regarding the
promotion of socially responsible management. It does
intend, however, to show the investments made in the
most critical aspects of this management.These are:

Corporate Responsibility Matrix
(amounts in thousands of reais)

• The monitoring of the quality of Natura’s relationship
with its stakeholders regarding ethics, transparency and
the efficiency of the dialogue channel, including themes
that are not directly related to the business
(“fundamentals” line).

• The promotion of sustainable development – whether
local,
in a specific region, or promoting diversity,
education, quality of life and culture (“social and
economic” line).

• Protection of the environment (“environmental” line).
The amounts stated are those invested in addition to
those required by law(1).

In addition to expenses related to the operation in Brazil, there are also
investments in social initiatives in the other countries in which Natura
operates. In these projects, 28,405.00 reais were invested in 2004 (see
indicator 73, page 100).

Natura’s Funds
Fundamentals
Economic and Social
Environmental
Subtotals

Management Expenses

Funds Generated by
Sales Representatives
Net Funds raised
by the Crer para Ver
Program

Natura’s Stakeholders

Employees,
families and
third parties
176.1
6,032.0
40.5
6,248.6

Sales
Represent-
atives
170.9
-
-
170.9

Supplier
Communities
-
745.0
-
745.0

Cajamar and
Itapecerica
da Serra
-
440.2
9.0
449.2

Suppliers
102.1
-
-
102.1

Customers
-
-
-
-

Government
and Society
1,466.4
445.2
536.6
2,448.2

Shareholders
-
-
-
-

TOTAL
1,915.6
7,662.4
586.1
10,164.1

All Stakeholders
2,277.0

Total Natura’s Funds
% of net sales

TOTAL
2,277.0
12,441.1
0.7

Employees,
families and
third parties

Sales
Represent-
atives

Supplier
Communities

Natura’s Stakeholders
Cajamar and
Itapecerica
da Serra

Suppliers

Customers

Government
and Society

Shareholders

TOTAL

N/A

2,971.8

N/A

2,971.8

Total Funds Generated
by Sales Representatives

2.971,8

Tax Funds
Tax Incentives(1)

Employees,
families and
third parties

Sales
Represent-
atives
-

Supplier
Communities
-

Natura’s Stakeholders
Cajamar and
Itapecerica
da Serra
347.0
Total Tax Incentives
GRAND TOTAL

Consumidores
-

Suppliers
-

Government
and Society
1,591.2

Shareholders
-

TOTAL
1,938.2
1,938.2
17,351,041

1. Tax incentives: destination of 1% of the income tax due to the municipal councils for the rights of the children and adolescents of Cajamar and

Itapecerica da Serra and projects supported by the Rouanet Law.

Note: N/A = Not applicable.

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2

A doctor in medicine and sciences, Ladilas
Robert was born in Budapest, Hungry, and
considers himself a survivor of the horrors
of World War II.Today, at 80 years of age, he
does not like to talk about the conflict that
could have taken his young life away, but he
does get excited when talking about his
decision to dedicate his studies and research
to increase people’s longevity. In thirty years
of work for the Paris V University
and in the hospital L’Hôtel-Dieu, in France,
Ladilas specialized in connective tissues.
He wrote six books on this topic
and two of them were translated
into Portuguese.

With aging, he said, the human skin
undergoes many changes: it loses from 7% to
10% of its thickness every ten years. “We
have identified the substances that delay this
reduction in thickness,” he said. “When a
person takes care of him or herself, this
aging of the skin is much slower.”

The researcher – who developed Elastinol,
used in the Chronos line – really enjoyed to
visit, in Brazil, Natura’s facilities.
He particularly liked the temperament
of Brazilians. “What moved me when
I visited Natura for the first time was that
people were serious like the Anglo-Saxons,

only they were always smiling.”

Natura’s new shop in Paris excites him. “The
French people know all about the beauty of
Brazilian women and that will be used as a
means for them to become interested in
Brazilian beauty products.” Ladilas also
believes in the quality of Natura’s products
to gain the European market. “Natura has a
very special cosmetic philosophy. In my
opinion, it will be a great success.”

Ladilas

Robert,
Researcher at the Paris V
University, and Natura’s
partner, in the hospital
L’Hôtel-Dieu, Paris, France.

corporate governance

and capital markets

Natura has been improving its corporate
governance since the mid 90s when it
included new executives in strategic
positions, privileging professional
management. This process evolved
with the creation of the Board of
Directors in 1998 – followed by the
Audit and Risk Management and Human
Resources committees – and peaked with
the company’s initial public offering
on May 26, 2004.

Companies in the Novo Mercado
can only issue voting common shares.
Additionally, at least 25% of these
shares must be outstanding. The companies
also undertake to extend to minority
shareholders the same conditions offered
to majority shareholders in the event of
a transfer of the controlling interest. And
they assume the obligation to accept the
mediation of the Market Arbitration
House to settle possible disputes.

When it went public, Natura opted for
listing its shares in the Novo Mercado
segment of the São Paulo Stock Exchange
(Bovespa) in which companies undertake
to adopt stricter corporate governance
practices than those required by law.

Board of Directors – It is made up of five
members, and two of which are external
members. The Board of Directors, which
convened 12 times in 2004, has two
auxiliary committees: Audit and Risk
Management, and Human Resources.

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Board of Directors in December of 2004:
1. Pedro Luiz Barreiros Passos, Member of the Board;
2. Guilherme Peirão Leal, Cochairman of the Board;
3. Antonio Luiz da Cunha Seabra, Cochairman of the Board

– Founder; 4. José Guimarães Monforte, Member
of the Board, Coordinator of the Audit Committee; y
5. Edson Vaz Musa, Member of the Board, Coordinator
of the Human Resources Committee

Audit and Risk Management
Committee – The Audit Committee
is made up of one external director
and one independent member.
This committee is responsible
for the review and recommendation
of the financial statements
and for the analysis and review
of the most important procedures
related to the business management.

Human Resources Committee –
It is responsible for the definition
of the employee development strategies.
It supports the Board of Directors
in evaluating the performance of the
officers, as well as in recommending
their remunerations.

Investor Relations

After it went public, Natura set up a department
specifically to serve investors, shareholders and
capital market analysts. In addition to holding
individual meetings with analysts and investors
and to participating in local and international
road shows and conferences, the Investor
Relations Department also holds quarterly
teleconferences and webcasts to inform the
market of the results for the period.The
calendar of events is available for all those
interested on the Natura’s investor relations
Website (www.naturanet/investor) and on the
São Paulo Stock Exchange (www.bovespa.com.br)
Website.

Contacts
Helmut Bossert
Ricardo Capella
Sandra Matsumoto

helmutbossert@natura.net
ricardocapella@natura.net
sandramatsumoto@natura.net

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Officers in December of 2004: 1. Pedro Luiz Barreiros
Passos, Chief Executive Officer; 6. Rodolfo Witzig Guttilla,
Executive Director – Corporate Affairs and Government
Relations; 7. Andrea Rodrigues Sanches, Executive Director
– Relationship Marketing; 8. Roberto Zardo, Executive
Director – Quality; 9. Itamar Correia da Silva, Senior

Executive – Operations and Logistics; 10. Antonio Carlos
Siqueira da Silva, Executive Director – Legal Affairs; 11.
Philippe Joseph Pommez, Senior Executive –
Internationalization; 12. Claudia Falcão da Motta, Executive
Director – Human Resources; 13. Eduardo Luppi Júnior,
Executive Director – Innovation;

14. Joël Ponte, Executive Director – Natura Europe; 15. José
David Vilela Uba, Senior Executive – Finance and Investor
Relations; 16.Alessandro Giuseppe Carlucci, Senior Executive –
Business Development; 17. Denise Lyra de Figueiredo,
Executive Director – Business Unit; 18.Vicente Pinho de
Mello, Executive Director – Flora Medicinal;

19. Mário de Oliveira, Executive Director – Industry;
20. Pedro Cruz Villares, Executive Director – Sales Brazil;
21. Italo Gennaro Flammia, Executive Director – Information
and Technology; 22. Márcio Ramy Mansur, Executive Director
– Integrated Logistics; y 23. Maurício Bellora, Executive
Director – Latin America

Capital Markets

Natura’s initial public offering was a success, demonstrating the market’s confidence
in the company’s economic and financial results and its capability to continuously generate
value.The demand for the shares at the initial offering was expressly higher than the offer.
Institutional investors represented around 80% of the final allocation and around 4,700
individuals invested in Natura. Between the offering and the end of 2004, the company’s
share value rose 117%, compared with a rise of 39% in the Bovespa Index (Ibovespa) over
the period.The average daily business volume was R$ 7 million, ensuring a significant liquidity
of the investment.

Natura Appreciation (Natu3) vs. Ibovespa – 2004
Base 100 (5/25/2004)

NATU3
IBOV

+117%

+39%

Remuneration to shareholders – During the year, the company distributed
R$ 143.5 million in dividends and interest on own capital, of which R$ 56.7 million referred
to 2003 and R$ 86.8 million to the first half of 2004. Regarding the results of the second
half of 2004, the Board of Directors approved the proposal for the distribution
of R$ 129.6 million as dividends and interest, totaling R$ 216.3 million referring to the full
year of 2004.The new shareholders, since the initial offering in May 2004, have fully
participated in the distribution of the dividends for the year.

Capital structure – Natura’s capital stock is made up of 84.8 million common shares –
in addition to 651,849 kept in treasury – of which 26.1% are outstanding.

Capital Structure

Shareholders
Majority Shareholders
Outstanding
Total shares*

Number
of shares
62,637,886
22,148,876
84,786,762

Percentage
73.9%
26.1%
100%

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

* Does not include 651,849 treasury shares.

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Verónica
Saez,
a Natura customer,
in Buenos Aires,
Argentina

When she first discovered Natura’s
products, Argentine advertising agent
Verónica Saez was not the kind of woman to
dress up too much – particularly because
she was used to working with inks and oils
that would stain her clothes in the school of
arts. She kept her contact with colors when
she became a teacher of arts in an
elementary school in Buenos Aires, where
she was born and still lives today.

But, at 36, when she was chosen to work
as a model in a Natura commercial, she was
thrilled with the possibilities offered by the
products of this Brazilian company.
“I decided to get to know the company
and to find out where I could buy
the products,” she says.Verónica contacted
a Sales Representative and, from then on,
she became a customer of Natura. “I like
the Chronos line and the Erva Doce line,
which has a texture and a perfume
that please me.”

Later, she discovered the Ekos line and
started to feel “natural” when she
realized that Natura uses raw materials
purchased from traditional Brazilian
communities. All this helped increase her
interest in visiting the country and even the
manufacturing process of the products she
uses. “I would really like to see how they
make the soaps, how they extract the raw
materials,” she says.

As a Natura customer,Verónica found out
more about the particularities of her skin
and learned, as she puts it, “to better
communicate with her own body”.Today,
she believes that a truly beautiful woman
is one who knows how to appreciate
and enjoy what she has.

risk

management

Natura’s risk management system
is specifically aimed at the following risks:
financial, product, information security
and technology, environment and
consistency between values and practice.
Some of the main objectives of this
system are to reinforce the infrastructure
of internal controls, facilitate the
identification and evaluation of risks
and implement procedures that enable
their control.The issues related to auditing
are managed by a specific committee,
following the adopted corporate
governance model.

At the end of 2004, Natura started a project
to consolidate risk management and expand
its scope with the monitoring of the results
of the company’s critical processes.

Financial – The company hedges the debts
contracted in foreign currency and, therefore,
the foreign exchange rate variations do not
have a significant impact on the financial
results. Regarding the influence of exchange
rates on operations, Natura uses raw
materials that are imported or whose prices
are pegged to a hard currency. In order to
minimize the effects of the variation of the
Brazilian real on costs, the company monitors
trends and, when necessary, contracts the
purchase of foreign currency on the Futures
and Commodities Exchange (BM&F). Natura
does not carry out transactions on the
BM&F for speculative purposes.

Products – The Product Safety Committee,
composed by the executive director for
research and development, scientists, doctors

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and specialized consultants, establishes
policies related to the security of products
for customers and supervises the
toxicological evaluation of all components
used in formulas in accordance with
international safety standards.The company
adopts the best cosmetovigilance practices.

Information security and technology –
In 2004, Natura made progress in the
implementation of projects to improve
quality and reduce risks in the critical business
processes in order to avoid the discontinuity
of its operations. Among the most significant
projects are the outsourcing of IT
infrastructure management and the beginning
of the implementation of a contingency data
processing center to ensure the availability of
all operating systems in case of accident.

Environment – The environmental risks are
followed up and monitored by the Natura
Environmental Management System, built
from the NBR ISO 14001 standards
certification obtained in 2004.

Consistency between values and practices –
The company’s commitment to ethical
behavior, transparency, to open and ongoing
dialogue with its many stakeholders and the
adoption of corporate targets that are
increasingly more compatible with sustainable
development, demands from Natura the
establishment of management systems that
consider the risks related to these issues.
To this end, the Corporate Responsibility
Management System has been created (see
Responsible Management, page 50, and Main
Indicators, page 25).

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Strategy

Natura’s strategy is grounded in the expression of its beliefs and values – whether
in the development of products and services, whether in the quality of the relationships
established with its many stakeholders – and in permanent innovation. At the center
of this strategy is the expansion of its leadership on the Brazilian market.

To this end, the company will continue to invest in infrastructure and quality of services, as
well as in the valorization of its brand and in the growth and qualification of its group of
Sales Representatives, in addition to seeking a greater balance in its product portfolio.The
continuity of investments in the sustainable use of raw materials from biodiversity, among
other things, and the increase of its investment in research and development as a whole
are an integral part of this strategy.

As a market leader, Natura continued, in 2004, to record a growth above the target
market average with an increase in its share in the sector’s total revenue. Factors such
as the capability of innovation, the demographic profile of the population and the growing
participation of women in the labor market have been positively contributing to the
development of the cosmetics, fragrances and personal hygiene industry in Brazil, proven
by an annual growth many times higher than that of Brazilian Gross Domestic Product.

An important aspect is the relevance of direct sales in the achievement of these results,
a segment that is also developing rapidly.

On an international level, the prospects are for expansion of the Natura brand in Latin
America.The successful strategy for penetrating the Argentinean, Peruvian and Chilean
markets, with the establishment of the direct sales model, led to the creation, in 2004,
of a corporate structure focused on the Latin American market, with headquarters in
Buenos Aires.This structure will be responsible for taking Natura’s value proposal to other
countries of the region. In 2005, Natura is expected to start operations in Mexico.

Regarding other regions, Natura will start an experience in France, with the inauguration
of the Maison Natura in Paris and will expand its studies on the business model that is
most suitable for other countries.

To invest in the training of leaders who may accelerate the internationalization process,
improve the programs to reduce environmental and social impacts, increase the knowledge
of customers and further strengthen the relationships with suppliers are also among the
company’s strategic objectives.

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3

Cybele Amado de Oliveira was born in
Salvador, State of Bahia, and was already
an adult when, during a Carnival, she visited
Vale do Capão, in Palmeiras, Chapada
Diamantina.When she returned to Salvador,
she could not stop crying. She realized
that she wanted to live there, as a teacher.
At 24, she returned there with her teaching
diploma to teach Portuguese in a public
school.The contact with the students
reminded Cybele of the sentence dealt
out to her in elementary school:
she was a dyslexic child who would never
learn how to read and write. “I know
exactly how a child feels when somebody
says that he or she will not learn to
read and write,” she says.

In the tests she gave in Vale do Capão, she
determined that two thirds of the children
could be labeled as dyslexic.They could
barely read and write but they impressed
Cybele because they were “poets” and
could very easily learn. It was just a
matter of method.

“I started to see that the problem was
not the child’s,” she says. She obtained
the support of Natura’s Crer para Ver
Program for her Projeto Chapada.“We
saw a reduction of 70% in truancy and 80%
in failure.” Today, 12 municipalities are part
of the read and write teaching network that
she put together.Another ten municipalities
will be included in 2005.“Crer para Ver is
really about believing, believing in your work.
The program is part of me and I am part of
its history.” Cybele dreams of a new era
for the students in Chapada and in Brazil.
“I dream of children learning to read the
world to write their own lives.”

Cybele Amado

de Oliveira,
Leader of the Projeto
Chapada, supported
by Natura, in Chapada
Diamantina, State of Bahia.

Laís Cruz, a Natura customer,
among her friends Ulliana
Ferrari and Andrea Calfat

economic

and financial, social and

environmental results

In 2004, Natura continued to present
strong results in the economic and financial
area, accompanied by concerns regarding
environmental preservation and
developments in the quality of its
relationship with its many stakeholders.

such as hair dyes, nail polishes and sanitary
pads – increased significantly from 17.1%
in 2003 to 18.9% in 2004. Net income,
of 300.3 million reais, represented 17%
of net revenues.

Business

Financial results – After consistent growth
in 2003, with record in production
and sales, Natura set new records in 2004.
Gross revenues increased 33% and totaled
2.5 billion reais. Natura’s expansion was,
once again, higher than that recorded by
the market.Therefore, the company’s share
in the market of cosmetics, fragrances
and personal hygiene products – excluding
those on which Natura does not operate,

Evolution of Gross Sales
(in millions of reais)

2002
2003
2004

1,411.2

1,910.1

2,539.7

Growing revenues together with controlled
expenses enabled the company to close
the year with an EBITDA of 431.7 million
reais, 46% higher than in 2003. Gross cash
generation totaled 385.6 million reais, 60.6%
higher than that recorded in the previous
year. Investments totaled 83.1 million reais,

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and the main highlight was the 21 million
reais invested in the construction of a new
warehouse. At the end of 2004, Natura
had net investments amounting
to 91.1 million reais.

a small reduction of the tax burden, arising
from legislation changes in the Employees’
Profit Participation Program (PIS) and Social
Contribution on Billings (Cofins), at a federal
level, and in the State VAT (ICMS).

Evolution of the Adjusted EBITDA(1)
(in millions of reais)

2002
2003
2004

199.2

295.7

431.7

1. Excludes the participation of subordinated debentures.

The share of the cost of products sold in
net sales dropped from 34.5% in 2003 to
32.5% in 2004.This result was driven by
gains in efficiency and scale, better margin
management, the appreciation of the
Brazilian real in relation to the US dollar and

Investment in research – One of the
main factors that drove sales up was the
investment of 47.4 million reais in research
and development. Among the highlights
are important technological innovations,
such as the introduction of an internationally
patented product – Elastinol+R –
in the Chronos line. In 2004, 63%
of the company’s revenues originated
from products launched or relaunched
over the previous two years. In 2003,
this rate was 48.8%.The number of products
launched grew from 117 in 2003 to 182
in 2004.

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Innovation Rate(1) (%)

2002
2003
2004

43,5

48,8

63,2

1. Portion of income arising from products launched or relaunched

over the previous 24 months.

Sales channel – Natura recorded an
increase of 15.6% in the number of Sales
Representatives. At the end of 2004, it had
407,000 Sales Representatives in Brazil and
26,000 abroad. Revenue per Sales
Representative, an important direct sales
indicator, grew 10.2% in Brazil, in reais, and
10.7% abroad, in US dollars. Productivity
benefited, among other factors, from the
investment made in support of the Sales
Representatives. In this context, the
distribution in 2004 of 13.7 million units of
Vitrine, a product catalogue published every
21 days, merits attention.

Number of Sales Representatives (in thousands)

Brazil
Latin America

2002

2003

2004

307

355

407

standard that allows for a more accelerated
expansion into other markets in the region.
The establishment of the operation model in
Latin America, focused on direct sales, led to
the creation of a corporate structure
exclusively for this region.

In its internationalization strategy, Natura will
test, as from 2005, a new operation model
in Europe, with the inauguration of its own
space in Paris. Located in Saint Germain des
Près, a privileged site in the French capital
city, the Maison Natura Brasil will be a place
where customers will find products
prepared from raw materials from Brazilian
biodiversity and have contact with aspects
of Brazilian culture and customs.

To extend the offer of its products, which
are currently available in the free-shops
of Brazilian domestic airports, to the
duty-free shops of international airports,
is also part of Natura’s strategy for
international expansion. Additionally,
Natura products can be purchased at
the www.natura.net Website.

Productivity of the Sales Representatives(1)
(in thousands of reais)

Production

Brazil
Latin America

2002

2003

2004

1.5

2.1

2.3

9.0

10.5

11.5

1. Business volume per average active Sales Representative.

International operations – With a growth of
52% in US dollars, Natura’s operations in
Latin America – Argentina, Chile and Peru –
established in 2004 a consistent model and a

Natura’s plant in Cajamar, State of São Paulo,
produced 175 million units in 2004, 28%
more than in the previous year.The
accelerated growth rate since the
inauguration of the facilities in Cajamar,
in 2001, demanded the intensification of
investments to increase capacity.
One of the most important investments
was the new warehouse, which will increase
the storage capacity by 120% and
is expected to be inaugurated in the first
quarter of 2005.

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Also in 2004, the company defined
the implementation of a third product
separation line, which will start to be built
in the first quarter of 2005. New and larger
investments in machinery and equipment
to increase production capacity are slated
for 2005.

Due to its concern with the quality
of its processes, Natura created the quality
office.The quality audit became more
comprehensive regarding environment,
security and sanitary inspection issues
in the operations in both Brazil
and abroad. Additionally, once the
implementation of the NBR ISO 14001
is completed, the company will
initiate the process to obtain
the ISO 9001 standard certificate
in 2005.

Innovation

Natura has been making efforts
to permanently invest in learning
and innovation in all aspects of its activities:
in technological development,
in the improvement of its production
processes, in the sustainable use of raw
materials from Brazilian biodiversity,
in the communication of its concepts
and values and in the improvement
of the quality of its relationships.

From a product innovation point
of view, Natura invests heavily in research
and development and in partnerships
with research centers in Brazil and abroad,
particularly in France, ensuring updated
knowledge of trends and technological
progresses in the pharmaceutical, chemical

and biochemical fields. In 2004, 182 new
products were launched.

Number of Product Launches
(units)

2002
2003
2004

117

182

The choice of Brazilian biodiversity
as a technological platform at the end
of the 90’s was a determining factor
for the results recently achieved by
Natura and in its commitment to
sustainable development.The Ekos line
products combine scientific knowledge
with popular knowledge, preservation of
Brazil’s natural heritage and opportunities
for traditional communities.

Other product lines such as Mamãe e Bebê
(Mother and Baby), which values the bond
between mother and child, and Chronos,
which introduced the Truly Beautiful Woman
concept, confirmed Natura’s ongoing
concern with innovation and the
conveyance of its values.

From a management point of view,
the company has been seeking,
increasingly more to include sustainable
development principles into its daily
business routine.The previous adoption
of the guidelines of the Global Reporting
Initiative, GRI, and the establishment
of the Corporate Responsibility
Management System in 2004 are steps
in that direction. A recent result of this
movement was the inclusion of the social
and environmental dimensions
in the strategic map and the company’s
balanced scorecard.

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Research and Development

In 2004, Natura’s investments in research and development recorded an increase of 33.6%
compared with the total funds invested in 2003. Of the launches in 2004, worthy of
attention are both the products resulting from developments in cosmetic technology and
raw materials from Brazilian biodiversity and the new formulas for more frequently used
products, which are capable of reaching other groups of customers.

Among the innovations is Elastinol+R, a raw material aimed at the treatment of aging marks in
the Chronos line.This is the third version of Elastinol and its differentiating characteristic is that
it produces results faster. Elastinol and its versions, patented in France, were developed
together with Professor Ladilas Robert, from the Paris V University (see biography on page 26).

Throughout 2004, Natura expanded the use of raw materials from Brazilian biodiversity.
The flatsedge and the oil of the Surinam cherry, among others, were included in the Ekos
line, and the passionflower oil was included in the Mamãe e Bebê line. Other raw materials,
such as the oils of green coffee and pariparoba were developed to serve the European
operation. Later, they will be included in the Brazil Ekos line.The replacement of animal
fat by palm oil in all soaps of the Ekos line also merits attention.

New make-up and hair products, the segments that grew the most in 2004, contributed to
balance Natura’s portfolio. In the make-up segment, the company launched a new line,

Aquarela (Watercolor). In the hair segment, Natura introduced new items and
established the Plants line.

As an indication of its efforts to develop and protect technologies, Natura applied,
in 2004, for 15 patents in Brazil. Additionally, it was awarded 26 patents for inventions
and industrial designs in Brazil and abroad. A portfolio of projects developed together
with universities and research centers, having as their main focus the use of knowledge
of the Brazilian flora in the cosmetic industry, was the origin of the innovations made
in the many product lines of the company.Within the Programa Natura Campus
(Natura Campus Program), developed in partnership with the Fundação de Amparo
à Pesquisa do Estado de São Paulo (Foundation for the Support to Research
of the State of São Paulo), Fapesp, for example, contracts with six universities
were signed.

Natura, in line with European legislation, is committed to fully abolishing tests on animals
by 2009. In 2003, Natura had already totally abolished the use of animals in tests of
finished cosmetic products (see Main Environmental Indicators, page 24).The company also
invests in alternative tests as part of the development of new raw materials and has an
in vitro laboratory to evaluate raw materials and products in human cells or in artificially
cultivated animal cells.

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Brand

The Natura brand reflects the company’s
Reason for Being, its beliefs and its vision
of the world. It is present in everything
Natura does – whether it is a product, a
communication material or a relationship
initiative – and in how it does it – with
awareness, beauty and commitment. It is also
expressed in the quality of the relationships
established with the many stakeholders, with
whom Natura shares its way of being.

A differentiated type of stakeholder in the
development of the brand is the Natura
Sales Representatives. Not only do they
share Natura’s way of being but they are
also a means for its dissemination. When
they disseminate Natura’s concepts by way
of direct contact with final customers, the
Sales Representatives strengthen the brand.
The strengthened brand, in turn, attracts a
growing number of new Sales
Representatives.To support and expand this
movement, Natura uses different means –
advertising, merchandizing, contacts with the
press and relationship programs. Among the
initiatives developed in 2004 are those that
reinforce Natura’s image as a company that
values the Brazilian biodiversity, culture,
music and fashion – such as its support for

Greenpeace in the Energia Positiva
(Positive Energy) project for Brazil and the
sponsorship of Brazilian singer Maria Rita
and of São Paulo Fashion Week.

In 2004, Natura formalized its brand
management internal system with tools
to determine and convey concepts to all
the company’s levels. One of these tools
was the workshops for training on the
brand.The management system will support
the development of the brand in the
company’s internationalization process.

Different awards and surveys reaffirmed
the growing strength and value of the Natura
brand. In 2004, the company was elected
Top of Mind, in the cosmetics category, in a
survey with customers conducted by the
Instituto de Pesquisas Datafolha (Datafolha
Research Institute). It was also considered the
Most Highly Regarded Company in Brazil in
accordance with CartaCapital magazine and
Instituto InterScience (InterScience Institute),
and the third most valuable brand in Brazil,
according to ISTOÉ Dinheiro magazine and
Interbrand consultancy. Additionally, for the
fifth consecutive year, it was considered
a benchmark in good civic responsibility by
Exame magazine and Instituto Ethos (see
Awards and Recognitions, page 63).

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Old man Arraia (Portuguese for stingray)
taught his son,Arrainha, the secrets of the
forest and extraction of the Brazil nut, in
Almeirim, State of Pará.The father’s nickname
came from his White chest, like the stingray,
a consequence of an accident with fire.The
son’s, because the boy would go into the forest
with his father. On the outside, the boy’s chest
looked nothing like a stingray’s. But inside, both
father and son felt love for what they did.“It
was just me and the old man,” said Delbanor
Mello Viana, nostalgic for those long gone days,
today a mature man and a Brazil nut harvester
and leader of the São Francisco do Iratapuru
community in the State of Amapá.

At that time, neither father nor son knew
what the nut they delivered to profiteers was
for. Now,Arraia, who visited Natura’s factory
in Cajamar, knows the process that transforms
the yield of his work into fine fragrances.
“The perfume is good,” says the leader, who
is proud to see his community becoming the
owner of its destiny.The cooperative they
have created and the partnership with Natura
have raised the awareness and improved the
organization and productivity of these nut
harvesters. In 2004, 8 metric tons of Brazil
nuts were sold to Natura.This year, according
to him, it will be 15 metric tons.

“Sustainable development is the way to
promote change in the community, bring
benefits to education, with what nature has
to offer,” says Arraia. He celebrates the fact
that the Brazil nut is now locally processed,
creating jobs and generating income even
outside harvest time.“Natura came over
and trusted in us.We also trusted in Natura.”
For him, now, the most important thing is to
continue to make a living without destroying
the forest.“What I want to do is work
with the forest standing up.”

Delbanor

Mello Viana,
also known as Arraia,
leader of Natura’s supplier
community in the Sustainable
Development Reserve
of the Iratapuru River,
State of Amapá

Flávia Azevedo,
a Natura customer,
with family

quality of

relationships

One of Natura’s beliefs is that life is a chain
of relationships. From this belief comes the
constant attention to and the concern with
the quality of its relationships with its
different stakeholders.

Responsible management

Since the end of the 90’s, Natura has
sought to place corporate social
responsibility in the center of its strategy
and management based on two pillars: the
ethical and transparent relationship with
its many stakeholders and the definition of
targets that are compatible with sustainable
development. Over the past few years,
the company has attempted to establish
processes and systems that ensure the
inclusion of these principles in the strategic

planning and the daily business routine.
In 2004, many important developments
were accomplished.

The company’s balanced scorecard started
to reflect the three dimensions of sustainability.
Today, Natura’s strategic map contemplates
economic and financial and social and
environmental targets. In the strategic plan,
this model is used throughout the company,
influencing the initiatives of all areas.

What supports this process is the
Corporate Responsibility Management
System, which was created approximately
two years ago and improved in 2004. By
way of this system, a detailed diagnosis of
Natura’s relationship with its stakeholders
was performed, which resulted in the survey
of topics to be included in the strategic plan.

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Therefore, all areas of Natura now
systematically follow up the issues related
to the quality of the relationships with
stakeholders based on aspects such as
ethics, transparency and efficiency of the
dialogue channels, including non-business
topics.The initiatives related to the critical
aspects of socially responsible management
are followed up by way of the Corporate
Responsibility Matrix (see Main Social
Indicators, page 24).

already started the process to obtain the
ISO 9001 certification.

The inclusion of social and environmental
practices in the company’s daily routine
was favored by the strengthening of the
Sustainability Committee, which was created
two years ago and prompted the intense
debate on the application of the responsible
management pillars for business planning
and performance.

In the case of the environmental targets and
indicators, the mobilization channel with the
strategic plan is the Natura Environmental
Management System developed from
the NBR ISO 14001 certification standards.
Once the implementation of these standards
is completed, Natura intends to include the
quality management processes and it has

Natura’s Corporate Responsibility
Management System caused an impression
among academics and in the press. It was
included, for example, in a group of analyses
of the matter in the Latin American edition
of December 2004 of the Harvard Business
Review, in addition to being presented at
many conferences.

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Relationship with Employees

The annual organizational climate survey
conducted in 2004 showed a slight variation
in the result compared with the previous
year.The favorability rate dropped from 76%
in 2003 to 73% in 2004.The maintenance of
a differentiated organizational climate is a
permanent challenge to Natura.The
company is recognized as a benchmark in
work environment in Brazil and, in 2004, its
was chosen as The Best Company for
Women to Work for, in accordance with the
survey published in the Exame Guide The
Best Companies to Work for, together with
the Great Place to Work Institute.

Number of Employees

Brazil

Latin America

2002

2003

2004

243

290

378

2,641

2,696

3,177

In 2004, nearly 300 internal promotions
opened opportunities to employees. As part
of the effort to meet the current expansion
stage of the company, the Corporate
Education department was restructured,
thus providing for a better alignment
of programs with the company’s strategy.
In 2004, employees received, on average,
70 hours of training, against 37 in 2003.

One of the initiatives to improve
management focusing on corporate
responsibility was the creation of specific
workshops for senior management
and employees, with the objective to
support decision-making based on the
three dimensions of sustainability. In 2004,

six manager groups participated in these
workshops.

The increase of investments and the
expansion of the initiatives of Natura
Educação (Natura Education), a program to
reimburse the monthly fees of basic training
and specialization courses also merits
attention. With investments of R$ 450,000,
66% higher than those in 2003, Natura
Educação was extended to the children of
employees and, in the case of elementary,
middle and high school, to outsourced
employees assigned to the company's units.

An important point in the establishment of
stronger ties with employees was the launch of
the Construindo o Futuro (Constructing the
Future) program, which is operated in three
dimensions: quality of life, career extension and
financial planning.The objective is to lend
opportunity and support to the construction
of a future at the end of a career with Natura
and encourage savings with the offer of a
pension plan, the Poupança Incentivada Natura
(Natura Incentived Savings).

As part of the recognition of the results
achieved by the company, the Profit-sharing
Program continued to prove to be a
differential in the remuneration of employees.
On a comparable basis, the amounts
provided for the payment of profits sharing
in 2004 grew 46.9% in relation to 2003.

Relationship with Sales
Representatives and Customers

The Sales Representatives – independent
professionals who buy and resell Natura
products – represent the main link of the
company with the final customer.The company
tries to establish with them a relationship of

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complicity and recognizes the important role
they have in the dissemination of the
company’s concepts and values. In 2004,
Natura increased the group of programs that
aims to recognize the value of the relationship
with the Sales Representatives, reinforcing
qualities that are expressed at different levels –
length of activity, number of customers, sales
volume, presence at events and attendance
at Natura Meetings, where the company’s
launches are presented.

The increasingly stronger relationship
and the strength of the Natura brand have
been stimulating interest of the Sales
Representatives.This number continues to
grow. In 2004, Natura closed the year with
407,000 Sales Representatives in Brazil, a
growth of 14.6% in relation to 2003. In the
other countries where the company is
present, the number of Sales Representatives
increased 30%, reaching 26,000.The
productivity of the Sales Representatives (sales
by active Sales Representatives) increased
10.2% in Brazil in reais and 10.7% in the
international operations, in US dollars.To this
important group of the Natura community,
the company generated an estimated income
of 1.06 billion reais. In training events,
Natura recorded, in 2004, 372,000 contacts
with the Sales Representatives, compared
to 319,000 in 2003.

Distribution of Wealth to the Sales
Representatives (in millions of reais)

2002
2003
2004

585.5

795.8

1,059.3

The link between Natura and the Sales
Representatives are the sales promoters
who, in turn, report to the sales managers.
With the increase of the teams, the ratio of

sales promoters served per manager
dropped from 35 to 20. In accordance with
relationship and attraction programs, Natura
filled with Sales Representatives, in 2004, 70%
of the sales promoters vacancies created as a
result of the increase of the teams.

The Sales Representatives have a relevant
participation in the Programa Crer para Ver
(Believing is Seeing Program) by voluntarily
selling products and raising funds that are
used in projects of the public school
system. In the Crer para Ver Educação
de Jovens e Adultos (Education of Young
People and Adults), launched in 2004,
the Sales Representatives can send
to school young people and adults who
have not completed middle school
(see Relationship with Government and
Society, page 58).

In 2004, the Sales Representatives and
customers were able to count on more
efficient ways of product delivery after
logistics operators with greater infrastructure
were contracted. Also, for these two
stakeholders, the internet remained as an
important relationship channel. During the
year, a monthly average of 75,500 Sales
Representatives used the internet to contact
Natura. Of this total, 80% sent more than
half of their orders via the Web.The number
of orders made by electronic means totaled
1.96 million over the year, or 30.5% of
the total orders made to the company –
allowing for savings of 6.2 million reais
in service via telephone.

Investments in marketing, product launches and
a strong presence in the press contributed, in
2004, to the strengthening of the relationship
with the final customer. During the year, Natura
filled 21.5% of the editorial space earmarked
for the cosmetic market, compared with 9.5%

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for the company in second place.The
company increased its presence in the media
by 42% in relation to 2003.

Relationship with Suppliers

A new approach in the relationship with key
suppliers of transports and raw materials
was strengthened by Natura in 2004. With
the aim to strengthen the ties with these
partners, the Qlicar concept was introduced.
This acronym stands for and summarizes the
aspects of quality, logistics, innovation,
contract, service and traceability.

In the transportation area, Natura decided to
focus the relationship on logistics operators
that are capable of taking care of the whole
distribution process, from collection of the
product at the plant to delivery to the Sales
Representative. With proper infrastructure,
transporting companies perform, in a more
efficient way, a complex distribution process
– Natura products reach over 5,000 Brazilian
municipalities.

A next step will be to assign to these
suppliers the task of collecting, from the
customers’ houses, the products that are the
subject of complaints. A pilot project in São
Paulo showed excellent results regarding
customer satisfaction – in a survey, 95% of
them said they were satisfied with the service.

Natura seeks suppliers that share its beliefs
and values. In the context regarding concern
for the environment, each supplier receives a
questionnaire on environmental topics in their
operations, in accordance with the NBR ISO
14001 standards.Whenever there are items
that are non-complied with, although
tolerable, an action plan to correct these flaws
is established.These suppliers are qualified to

have a commercial relationship with Natura
and, once the problems are corrected, they
may be certified.The certified suppliers are
those whose products and services are
preapproved and whose receipt does not
require checking.The first certifications, within
the Qlicar concept, were granted in 2004.

Relationship with the communities
that supply raw materials
from biodiversity

When it launched the Ekos line, in 2000,
Natura started to put into effect the
sustainable use of raw materials from Brazilian
biodiversity.The use of raw materials from the
Brazilian flora should be economically viable
and, at the same time, contemplate the
proper management of the extractivist
activity and sustainable development of the
producing communities. Since then, the
relationship with the communities that supply
the raw materials from biodiversity has
proven to be an important process of
learning.The developments seen in 2004
reflect the application of this learning on the
process to create a consistent model for the
use of the raw materials and the relationship.

During 2004, a multifunctional team worked
on the development of a model that can,
based on a pilot experience with the
community of Iratapuru, in the State of
Amapá, be used in other communities.The
community of Iratapuru is made up of 30
families that supply the Brazil nuts, copaíba
and breu branco.The experience was
followed up by Amigos da Terra, an NGO
that, together with the community, created a
business management plan. One significant
achievement was the certification of the three
raw materials produced by the community
by the Forest Stewardship Council.

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Sustainable Development
Reserve of the Iratapuru
River, State of Amapá,
and details of the passion
fruit and buriti

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Among the measures taken is the creation
of a reserve made up of a percentage of
the net revenues obtained from the sale of
products originating from the raw materials
supplied by the community.These funds
may be used both in immediate and future
needs. Additionally, a consultancy specialized
in sustainable development, Amapaz, will
make a diagnosis of the community in order
to prepare a plan for the future, which may
include other activities in addition to the
extractivist one.The diagnosis will include
physical, territorial and social and economic
aspects so as to help the community to
prepare a sustainable development plan.

Relationship with the neighboring
communities

With units in Cajamar and Itapecerica da
Serra, both in the State of São Paulo, Natura
has been strengthening its relationship with
the communities in these municipalities. In
this context, 2004 was a year of important
developments.

In Cajamar, the two relationship strategies
created in 2003 to improve the company’s
relationship with the city acted actively
(see indicator 73, page 100). Natura’s internal
group, made up of employees from different
areas to debate and propose solutions for
the needs of the municipality, supported
the preparation of a master plan for the
education of Cajamar and the establishment
of partnerships between local schools and
Natura for the organization of events such
as Environment Week.

The tripartite group, made up of
representatives of Natura, Mata Nativa
(Native Forest), an NGO, and the local
administration office, signed a cooperation

agreement for the implementation in
that city of Agenda 21, an action plan for
sustainable development established in the
First United Nations Conference on the
Environment and Development, the Eco-92.
Additionally, with the cooperation of local
leaders, it prepared a detailed analysis of
Cajamar, with many social and economic
and environmental indicators, conducted by
Oficina Municipal, an NGO.The Pro-Agenda
21 Forum of Cajamar, made up of
governmental and non-governmental
organizations, and companies and citizens
of the municipality, was also implemented to
follow up and guide the city’s public policies.

In Itapecerica da Serra, Natura decided to
focus its attention and efforts on the district
of Potuverá, where one of its units
is located. In 2004, employees of the
company voluntarily organized themselves
to create a workgroup and implement
projects for educational training,
technological training and other interests of
the community. In 2005, Natura will start
a process to implement Agenda 21
in Itapecerica da Serra.

In both Cajamar and Itapecerica da Serra,
Natura maintains a volunteer program
during work hours. In 2004, more than 100
employees participated in this program.
A toll-free 0800 line was placed at the disposal
of the community of Cajamar, in 2004,
for them to communicate with Natura.
In 2005, the same will be done for the
community in Itapecerica.

Relationship with the environment

Natura is committed to the establishment of
ways to promote sustainable development
and shares its commitment with its many

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stakeholders. In this context, for example,
its relations with its supplier communities
contemplate the preservation of the
environment and local development.
Additionally, the company tries to keep
control of its activities, products and services
in such a way that the environment can
absorb the impacts resulting from them.To
this end, it uses the Natura Environmental
Management System, Sigan, as a tool, which
is based on the ISO 14001 – the company
obtained the NBR ISO 14001 in May 2004.
The monitoring conducted by way of Sigan
identified flaws in the use of water and
energy and promoted the more efficient
use of these resources in a year in which
production grew 28%.

As it considers water a very valuable
resource that must be managed with care,
Natura projected the installations of the plant
in Cajamar in a way that allows for its reuse.
In the well built on the site, a system was
installed that allows the company to take only
as much water as the water table is capable
of replacing.To increasingly reduce the need
to take water from the well and to reduce
usage in general, the increase of the water
reuse rate is a permanent target. In 2004, the
company was able to reduce by 23% the use
of water per unit sold. Water reuse increased
from 29% in 2003 to 39.5% in 2004 (see
Main Environmental Indicators, page 22).The
water issue is a recurring theme in Natura’s
discussions with its many stakeholders.

Consumption of Water per Unit Sold(1)
(liters/unit)

2002
2003
2004

1.22

0.87

0.67

1. Units resold by Sales Representatives (does not include samples,
gifts, resale support material, products of the Crer para Ver line,
among others).

Reuse of Water (% of total water treated
at the Effluent Treatment Station)

2002
2003
2004

16%

29%

39.5%

Regarding energy, Natura tries to ensure
that industrial growth is not directly related
with the increase of absolute consumption.
To this end, it develops systems and
processes that allow for the rational use
of available energy. In 2004, the company
recorded gains of scale that resulted in
the decrease of fixed costs, prompting a
reduction of 23% in usage per unit sold.

Total Consumption of Energy (Energy Matrix)(1)
per Unit Sold (kjoules/unit)

2002
2003
2004

1,025.7

785.2

603.7

1. The energy matrix is made up of the total energy that Natura uses

that comes from various sources (electric, diesel and LPG).

Regarding the generation of waste,
the company achieved, in 2004,
a reduction of 12.3% per unit sold
in relation to 2003.The incineration
of waste dropped from 6.4% in 2003
to 5.4% in 2004, and the disposal in
landfill sites, from 24.4% to 21.2%.
The percentage of recycled waste
grew from 69.2% to 73.4%.

Natura also seeks to identify the
environmental impact of its products
and the possible consequences for society.
To this end, it uses the life cycle
assessment methodology. In 2004, all
packages of the portfolio were analyzed
in accordance with this methodology.
In 2005, Natura will develop and test a life
cycle assessment model for raw materials.

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Relationship with shareholders

As a public company since May 2004,
Natura tries to establish an exemplary
relationship with shareholders in the same
way it does with other stakeholders.The
company wants this relationship to be
characterized by transparent communication,
fair and equal treatment and constant
improvement of corporate governance
(see Corporate Governance, page 28).

Relationship with government
and society

Natura keeps dialogue channels with federal,
state and municipal governments, as well as
with members of congress. Additionally, as
it is aware that the company must be an
agent of social transformation, it seeks to
permanently enhance its initiatives aimed
at the development of society.

During 2004, Natura signed important
agreements with governments and
organizations from civil society. Among them
are the cooperation agreement signed with
the administration office of Cajamar and
Mata Nativa, an NGO, for the implementation
of Agenda 21 in Cajamar and the
partnership with Fundação Abrinq (Abrinq
Foundation) and the Ministry of Education
for the promotion of the Education of Young
People and Adults as part of the Crer para
Ver (Believing is Seeing) Program.

As a member of the Associação Brasileira
das Empresas de Venda Direta (Brazilian
Association of Direct Selling Companies) –
ABEVD, Natura was a signatory to the
instrument established by the association
with the Ministry of Social Security for
the promotion of education for the social
security of independent resellers.

Natura represented the Brazilian corporate
sector in the International Organization of
Standardization Conference on social
responsibility held in June 2004 when it
was decided to create, by 2008, guidelines
for standardizing the application of social
responsibility processes. It will also be part
of the committee responsible for the
definition of the guidelines of the standard.

Additionally, representatives of the company
were invited to participate in important
discussion forums that involve civil society,
such as the Forum of Cosmetics
Competitiveness, the Forum of Biotechnology
Competitiveness and the Brazilian
Conference on Environment, in addition to
working groups that discuss the access to the
genetic inheritance and remuneration of
the traditional knowledge, among others.

One of Natura’s operating instruments in its
relationship with society has been the Crer
para Ver Program, maintained in partnership
with the Fundação Abrinq and through
which the Natura Sales Representatives
voluntarily sell products that are especially
created for the program, channeling the
funds raised to projects of the public school
system. In its nine year of existence, the
program has raised 17.9 million reais and
supported 148 projects in 3,638 schools. In
2004, the amount of funds raised was the
highest in the program’s history.

Among the projects supported in 2004
were the Cinema e Vídeo Brasileiro nas
Escolas (Brazilian Cinema and Video in
Schools), in the State of São Paulo, and
Projeto Chapada (Chapada Project), in the
State of Bahia.The objective of the Cinema
e Vídeo nas Escolas is to encourage the
creation of video libraries and the education
of students by way of audiovisual language,
based on the education of teachers.The

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8 WAYS TO
CHANGE THE WORLD

ERADICATE EXTREME
POVERTY AND HUNGER

ACHIEVE UNIVERSAL
PRIMARY EDUCATION

PROMOTE GENDER
EQUALITY AND
EMPOWER WOMEN

REDUCE CHILD
MORTALITY

IMPROVE
MATERNAL HEALTH

COMBAT HIV/AIDS,
MALARIA, AND OTHER
DISEASES

ENSURE ENVIRONMENTAL
SUSTAINABILITY

DEVELOP A GLOBAL
PARTNERSHIP FOR
DEVELOPMENT

Projeto Chapada is focused on the
development of a quality public school
network in the region of Chapada
Diamantina, State of Bahia, by way of the
proper training of pedagogical coordinators
and teachers, and the development of joint
actions with municipal education departments
to fight against child labor (see the statement
by the project’s coordinator on page 39).

Crer para Ver – Net Funds Raised
(in millions of reais)

2002
2003
2004

1.7

2.6

3.0

The scope of the Crer para Ver Program was
expanded in 2004 with the creation of the
Crer para Ver EJA (Educação de Jovens e
Adultos) (Education of Young People and
Adults) in partnership with the Ministry of
Education and Fundação Abrinq. In the
Crer para Ver EJA, Sales Representatives
are encouraged to identify people older
than 15 years of age who have not
completed middle school and send them
back to school (see details in Highlights
of Investments in Corporate Responsibility,
page 66).

In addition to the Crer para Ver Program,
Natura supports initiatives aimed at culture,
promotion of dialogue channels and
sustainable development, and at the
protection of the environment (see Total
Support and Sponsorship, page 71)

Commitments and Codes
of Conduct

One of the first Brazilian companies to
sign the Global Compact Natura reaffirmed,
in 2004, its commitment to the principles
proposed by the United Nations. In July,
it was represented by Guilherme Peirão
Leal, cochairman of the Board, at the Global
Compact Leader’s Forum in New York.
During the year, many actions were taken
with the aim of disseminating the principles
of the Global Compact and the Millennium
Development Goals to employees, Sales
Representatives and partners. For example,
the MDGs were printed on the covers of
over 860,000 boxes of products sent to Sales
Representatives all over Brazil. Additionally,
the targets were highlighted in many
communication materials, such as the Vitrine,
a catalogue of products. In this report,

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Natura presents its developments in the
promotion of the Global Compact principles
based on the indicators of the Global
Reporting Initiative (see page 76).

Natura is a signatory to the code of conduct
before consumers and code of conduct
before direct sellers and among companies
of the Associação Brasileira de Empresas de
Vendas Direta (Brazilian Association of
Direct Selling Companies), ABEVD, prepared
in accordance with the model proposed by
the World Federation of Direct Selling
Associations, WFDSA.

The company fully observes the Estatuto da
Criança e do Adolescente (Statute of Children
and Adolescents) and follows the Letter of

Principles of the Instituto Ethos de Empresas e
Responsabilidade Social (Ethos Institute of
Companies and Social Responsibility). In 2004,
it became an Organisational Stakeholder of the
Global Reporting Initiative, GRI. It is the first
Brazilian company to be part in this group.

Natura was also awarded the following titles:
Empresa Amiga da Criança (Child-friendly
Company), granted by the Fundação Abrinq
pelos Direitos da Criança (Abrinq Foundation
for the Rights of Children); Empresa Cidadã
(Civically-responsible Company), granted
by the Assembly of the City of São Paulo;
Empresa que Educa (Company that
Educates), granted by SENAC (Brazilian
Service for Commercial Learning) of
the State of São Paulo.

Principles of the Global Compact
Human Rights

Labor

Environment

Anti-Corruption

I: The support and
respect of the
protection of
international
human rights.

III: The support of

freedom of association
and the recognition
of the right to
collective bargaining.

VII: The implementation
of a precautionary
and effective program
to environmental
issues.

II: The refusal to

IV: The abolition

participate in or
condone human
rights abuses.

of compulsory labor.

V: The abolition
of child labor.

VI: The elimination
of discrimination
in employment
and occupation.

VIII:Initiatives that
demonstrate
environmental
responsibility.

IX: The promotion
of the diffusion
of environmentally
friendly
technologies.

X: The promotion
and adoption
of initiatives to
counter all forms
of corruption,
including extortion
and bribery.

Learning and Innovation:
Education for Sustainable
Development

Natura is engaged in speeding up its
learning on sustainable development
and sharing it inside and outside the
company. As part of this process, it
has been promoting debates in
Cajamar with many experts in this
field. In 2004, Fritjof Capra, Austrian
physicist, Rosalyn McKeown and
Charles Hopkins, coauthors of the Education for Sustainable Development Toolkit, Ernst
Ligteringen, from the Global Reporting Initiative, and John Elkington, from SustainAbility,
all visited the Espaço Natura (Natura Space). In addition to participating in meetings
with senior management, they gave lectures to a group of employees, partners and
representatives from civil society.We took note of some of their impressions of
sustainability and of Natura:

Ernst Ligteringen,
Fritjof Capra and
John Elkington

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“Natura is one of the leading companies when it comes to reporting economic, social and
environmental performances. It was important to hear its leaders explain why they act the way they
do and how this behavior represents the company’s business model. The value of this choice has
been recognized recently on the stock market.
Incidentally, I would say that the majority of today’s
investors accept that there is a need to pay more attention to the performance of companies, not
just their quarterly financial results.”

Ernst Ligteringen, Chief Executive of the Global Reporting Initiative

“If you want to be sustainable, you need to be honest and investigate technical details.You must ask
yourselves: What raw materials do we use? What do we do with our waste? You must show that it is
economically viable to do things from an ecological point of view. Show that using water or energy
efficiently can help saving money.”

Fritjof Capra, physicist and environmental activist and author of the books The Web of Life and
The Hidden Connections. Founder of the Center for Eco-Literacy in California, United States

We need to accept that, as companies make progress in the search for sustainable development, many
mistakes will be made.This is natural and we must learn quickly from them.What Natura is doing is
already state of the art. Its challenge wil l be to propagate its ideas outside the company’s premises.”

John Elkington, co-founder of the British business consultancy, SustainAbility

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Lucia Pasqualini, a Natura
Sales Representative, with
her customers Marina
Inoue and Gelsi de Souza

Awards and Recognitions

The transparent and ethical relationship with its many stakeholders, as well as the constant
concern with the development of these relationships, has been providing Natura with awards
and recognitions (see page 100). Some of those granted in 2004 are:

• Most Highly Regarded Company in Brazil – CartaCapital magazine and InterScience.

• The Best Company for Women to Work for – Exame magazine and Great Place to Work

Institute (second consecutive year).

• Model-company in social responsibility – Exame magazine and Instituto Ethos

de Empresas e Responsabilidade Social (Ethos Institute of Companies and Social
Responsibility) (fifth consecutive year).

• Third most valuable brand in Brazil – ISTOÉ Dinheiro magazine and Interbrand.

• 16th Best Annual Report – SustainAbility, Standard & Poor’s and United Nations

Environment Programme.

• Best Annual Report of a Closely-held held Company Award – Associação Brasileira

de Companhias Abertas (Brazilian Association of Publicly Traded Companies), Abrasca
(second consecutive year).

• Annual Social Report Award – Associação Brasileira de Comunicação Empresarial
(Brazilian Association of Corporate Communication);Associação dos Analistas de
Investimento do Mercado de Capitais (Association of Capital Markets Investment Analysts
and Professionals); Instituto Ethos de Empresas e Responsabilidade Social; Fundação
Instituto de Desenvolvimento Empresarial e Social (Corporate and Social Development
Institute Foundation); and Instituto Brasileiro de Análises Sociais e Econômicas (Brazilian
Institute of Social and Economic Analyses), Ibase (third consecutive year).

• Top of Mind Award in the Cosmetics category – Folha de S.Paulo newspaper.

• Environmental Merit Award – Federação das Indústrias do Estado de São Paulo

(Federation of Industries of the State of São Paulo), FIESP.

• Ecodesign Award – Federação e Centro das Indústrias do Estado de São Paulo/Instituto
de Pesquisas Tecnológicas (Federation and Center of Industries of the State of São
Paulo/Institute of Technological Research).

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Fernanda

Inouye Miura,

a Natura Sales
Representative,
in Vila Madalena,
São Paulo

It is in the hectic pace of her city that
Fernanda Lima, from São Paulo, moves.At
27, she is restless and does thousands of
things here and there.Wherever she goes,
she brings with her, in her car, a kit with
Natura’s products. Fernanda is a Sales
Representative and started out early in this
job, selling the products to her family and
friends.“It is the kind of work that you can
fit into your routine”, she says.

But the greatest advantage, according to her,
is that Natura’s products “sell themselves”.
“People feel attracted by the packages and
they also love what is inside.” If it wasn’t for
that, Fernanda would never have accepted
to work in this field. She is shy. More than
that: demanding. She wouldn’t brag about
something she didn’t believe in.

She believes in Natura.And she says that
she identifies with the company.“I like its
approach,” she said. Fernanda, like Natura,
wants to help building a better world. Crazy
about knowledge and human relations,
she entered the world of NGOs after
graduating in teaching. In one such NGO,
the Centro de Estudos e Pesquisas em
Educação, Cultura e Ação Comunitária
(Center of Studies and Research on
Education, Culture and Community Work),
Cenpec, she analyzes educational projects
with young people.The result of her
experiences and reflections are shown in
the articles she posts on the internet.
“When you tell your own story,
you become closer to others,” Fernanda
says.“Maybe because I come from an
oriental family, I always had this idea that
each one of us has a mission to accomplish.
For my part, everything I do is to help
improve the world.”

This chapter highlights some of the most important of Natura’s projects contemplated in the Corporate Responsibility Matrix
(presented with the related amounts in Main Indicators, page 20).
Below, there is a list presenting the projects in their different categories. For some, further details are provided (highlighted in
bold).The choice was made to exemplify the coverage and the nature of the initiatives.

Employees, families and
outsourced employees

Climate survey
(see Main Social
Indicators, page 24)

Sales
Representatives
Survey to
measure the
quality of the
relationship
with the Sales
Representatives

Natura’s funds
Fundamentals
Enhancement and
monitoring of
quality relationship
indicators

Promotion and
dialogue channels

Provision of
information /
transparent
communication

Economic and social
Promotion of
local sustainable
development

Information editorials for
the employees related to
corporate responsibility,
environment and
sustainability

Sustainability Week at
Natura

highlights
of Investments

in corporate responsibility

Supplier
Communities

Suppliers

Neighboring
communities

Government and society

Event with
suppliers to
discuss
environmental
issues

Program for the
Certification of
Natural Raw
Materials; Plântula
Project; Sustainable
Development Program
with Supplier
Communities;
Relationship with
supplier communities
of the Ekos line

United Nations
Development Programme
(UNDP)(1); International
Colloquium on Human
Rights(1) and other
projects supported
Publication of Annual
Report; Instrument of
Commitment to sustainability
– Rules and procedures for
access to biodiversity

Agenda 21 of
Cajamar; Natura
Working Group –
Cajamar; Natura
Working Group –
Itapecerica da Serra
(see indicator 73,
page 100)

New Ventures Brazil
Program – Forum of
Investors in Sustainable
Ventures(1); Promotion of
Voluntary Work Program
and other projects
supported

Many sponsored
projects

Training of
cultural agents

Education for Sustainability
Project

Many sponsored
projects
N/A

Many sponsored
projects

Initiatives to reduce energy
use (see indicator 17, page
82); Compositing Center in
Cajamar; Initiatives to reuse
water (see Main Environmental
Indicators, page 22)

Diversity Program;
Incentive Program for the
Admission of Physically
Impaired People (see
indicator 60, page 95)
Natura Education
Program;Training of
employees in sustainability;
Executive Education
Program (see indicator 58,
page 95)
Nursery; Natura Sports
and Social Club; Clinical
services (see indicator 48,
page 92); Quality of Life
Program (see indicator 60,
page 95); Mother’s Day
Event; Christmas’ toys and
baskets event

Actions to raise
environmental awareness

Promotion of
inclusion, equality
and diversity

Education and
Training

Quality of Life

Promotion of art
and culture
Environment
Protection of the
environment
Minimization of
material outflow
and inflow

Funds generated
by the Sales
Representatives
Net funds raised
by the Crer para
Ver Program

Tax funds
Tax incentives

Employees, families and
outsourced employees
N/A

Sales
Representatives
N/A

Supplier
Communities
N/A

Suppliers
N/A

Neighboring
communities
N/A

Government and society
Crer para Ver Program

Employees, families and
outsourced employees

Sales
Representatives

Supplier
Communities

Suppliers

Government and society
Biodiversity Brazil
Project(3)

Neighboring
communities
Support for the
Council for the Rights
of Children and
Adolescents of
Cajamar(2); Support
for the Council for
the Rights of Children
and Adolescents of
Itapecerica da Serra(2)

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1. Project sponsored or supported by Natura.
2. Project supported by Natura, by way of the allocation of 1% of the tax payable.
3. Project supported by the Rouanet Law.
Note: N/A = not applicable.

Employees, families and third parties

1. Programa Natura Educação
(Natura Education Program)
Objective: To expand access to formal education and
professional training.
Location: Cajamar and Itapecerica da Serra, both in the State
of São Paulo.
Target Public: Natura’s employees and their families, and
outsourced employees assigned to the company’s units.
Results: (cid:1) Around 1,600 employees benefited from Natura
Educação in its four years of existence. In 2004, the program
was extended to outsourced employees who are assigned to
the company’s units. Eighty scholarships for technical courses
were offered in accordance with the target established.
However, demand was lower and served only 35 people. For
the language courses and college studies, the targets were
equally achieved: 90 and 100 scholarships, respectively.
Target for 2005 To extend Natura Educação to the
outsourced employees who work in customer service and
include continuing education, post graduation and MBA
courses.

of the municipality in order to establish a basis for studies
and proposals for future development. From this process, in
which many sectors of society represented by around 30
people participated, some pillars for the expansion of the
movement in the town were founded.

c) Projeto Comunidade Ativa (Active Community Project)
☺ To mobilize the community behind the identification and
establishment of social and political participation channels,
interactive workshops were held in two districts of Cajamar
(Vila Mirassol and Jardim Florim) in partnership with Mata
Nativa. Consisting of conceptual and practical sections,
fieldwork and preparation of the project, the workshops
aimed at the implementation of democratic centers for
discussion on environmental and social topics and the
municipal budget. At the end, the 50 or so participants were
involved in the preparation of pilot projects for the
development of the districts.
Target for 2005 To expand the tripartite working group,
involving other local companies in this process.To publicize
the results of the analysis and make them accessible to the
community. To promote the implementation of the
Sustainable Development Forum in Cajamar. To carry out
workshops in another two districts of the city.

Neighboring Communities

Supplier Communities

1. Agenda 21 of Cajamar
Objective: To promote coordination between leaders from
civil society, the public sector and private sector to promote
sustainable development in the municipality of Cajamar, in
the State of São Paulo, planning and implementing,
in a
participative way.
Location: Cajamar, in the State of São Paulo.
Target Public: Community of Cajamar.
Partners: Administration Office of Cajamar and NGOs Mata
Nativa and Oficina Municipal.
Results: The target proposed for 2004 was to expand the
tripartite working group –
the
administration office of Cajamar and Mata Nativa , an NGO, and
start the process to involve local leaders in democratic forums
on municipal planning, including other companies.To analyze the
results, the three main work fronts will be described:

formed by Natura,

a) Tripartite working group
(cid:1) The group was established with the signing of a
cooperation agreement by which its members commit
themselves to stimulate the sustainable development of the
municipality.The First Pro-Agenda 21 Cajamar Meeting was
held with the participation of approximately 150 people
from many sectors of the local community. At the time, a
permanent commission for the mobilization and follow-up
of public policies was organized aimed at the structuring of
the Sustainable Development of Cajamar Forum in 2005.
The expansion of the tripartite working group,
in
accordance with the target set for 2004, started with the
First Pro-Agenda 21 Meeting. However very
few
representatives from the private sector were present.

b) Performance of a diagnosis of the municipality of
Cajamar
☺ Under the coordination of the tripartite group, an
analysis of the municipality of Cajamar was made with the
support of Oficina Municipal, an NGO, addressing the
political, administrative, fiscal, financial, social and economic,
and physical and territorial areas. This was a collective
process of knowledge and evaluation of the many aspects

1. Programa de Certificação de Ativos Naturais
ou Vegetais (Program for the Certification of
Natural Raw Materials)
Objective: To certify the raw materials from Brazilian flora
that are used in the Natura Ekos line, so as to ensure their
sustainable gathering (economically viable, ecologically
correct, and socially fair), contributing to the preservation of
biodiversity and local development.
Target Public: Civil society and the scientific community.
Partners: Imaflora and Instituto Biodinâmico.
Results: (cid:1) The proper use of non-wood forest resources
in Natura’s products is certified by the quality seal of the
Forest Stewardship Council, FSC, and the Instituto de
Manejo e Certificação Florestal e Agrícola (Institute for
Forestry and Agricultural Management and Certification),
Imaflora, is the responsible for this certification.The FSC seal
ensures that the customer contributes to the preservation
of forests and improvement of the social conditions of
workers and local communities.
In 2004, the forestry
certification for six raw materials was completed: Brazil nut
(Bertholletia excelsa), breu (Protium pallidum), copaiba
(Copaifera spp.),
fragans),
rosewood (Aniba
cacao
(Theobroma cacao) and guarana (Paullinia cupana).
The organic certification attributes quality to the natural raw
material, establishing a relationship of trust with the customer.
Organic agriculture favors the preservation of the
agrobiodiversity of the water and soil.The IBD Organic seal
is granted by the Instituto Biodinâmico (Biodynamic
Institute), IBD, guided by ecological and social guidelines that
involve the sustainability of agricultural production. In 2004,
the organic certification of the Surinam cherry (Eugenia
uniflora) was completed.
Therefore, seven sources of known origin and of sustainable
management were defined for plants used in the Ekos line
(the target set for 2004 was to certify 8 plants).

Target for 2005 To have five raw materials in the last
certification phase (phase III; see indicator 24), by the end of
2005.

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Government and Society

1. United Nations Development Programme
(UNDP)(1)
Coordination: United Nations Development Programme,
UNDP.
Objectives: To disseminate, by way of means of a DVD, the
Millennium Development Goals (MDG) and the principles
of the Global Compact. To sponsor the production of a
DVD that contains images of the Concert for Peace
organized by the UNDP at the headquarter of the United
Nations on September 19, 2003 in honor of Sérgio Vieira
de Mello and the other victims of the attack to the UN
office in Baghdad.
Target Public: Society.
Results: ☺ DVD launch expected for 2005.

challenges

2. Colóquio Internacional de Direitos Humanos
(International Colloquium on Human Rights)(1)
Coordination: Conectas Direitos Humanos and SUR Rede
Universitária de Direitos Humanos.
Objectives: To gather human rights activists from various
countries in Africa, Asia and Latin America to discuss the
topic “The millennium development declaration and
to human rights”. To promote
goals:
cooperation,
learning and action from relations in the
Southern Hemisphere.
Location: From São Paulo and broadcasted to all over Brazil,
the United States, Europe and Latin America.
Target Public: Academics, researchers, employees of the
United Nations,
international
representatives
foundations and human rights activists.
Results: ☺ The event gathered 60 human rights activists
from 23 countries in Africa, Asia and Latin America who
presented around 60 proposals of local initiatives for the
topic and five other proposals to increase cooperation in
the hemisphere. Other activities were also performed and
these included workshops for the public and field visits to
human rights organizations in São Paulo.

from

3. Programa New Ventures Brasil – Fórum de
Investidores em Negócios Sustentáveis (New
Ventures Brazil Program – Forum of Investors in
Sustainable Ventures)(1)
Coordination: Centro de Estudos em Sustentabilidade da
Fundação Getúlio Vargas (Centre of Studies on Sustainability
of the Getúlio Vargas Foundation), CES-FGV.
Objective: To support the development of sustainable
ventures and extend the potential of their performance
on the market, providing them with technical support in
the formulation of business plans and bringing them closer
to investors who are interested in profitable investments,
based on social and environmental responsibility criteria.
Location: Regions from all over Brazil.
Target Public: Entrepreneurs in sustainable ventures, risk
capital investors, financial institutions, private pension funds,
among other agents of the financial sector.
Resultados: ☺ During the “Call for Business”, over 100
consultations from entrepreneurs were received. Upon
termination of the process, 33 business plans were
presented, 14 of which were forwarded to the mentoring
phase – in which the venture receives technical support.

1. Projects sponsored or supported by Natura.

Finally, 12 ventures were taken to the Forum of Investors
in Business Ventures held in São Paulo. The forum was
attended by over 200 people, including, in its majority, risk
capital investors, financial institutions and entrepreneurs.

4. Crer para Ver Program (Believing is Seeing)
Objective: To contribute to the improvement of the quality
of the public education system offered in Brazil, by means
of technical and financial support to creative and innovative
educational projects, and the promotion of debates on this
topis in society.
As a partnership between Natura Cosméticos and the
Fundação Abrinq pelos Direitos da Criança e do
Adolescente (Abrinq Foundation for the Rights of Children
and Adolescents), the program counts on the support of
the Natura Sales Representatives who voluntarily sell the
products of the Crer para Ver line. In 2004, the program, in
partnership with the Ministry of Education of Brazil,
launched a campaign for the education of young people and
adults. According to the 2000 Census of the Instituto
Brasileiro de Geografia e Estatística (Brazilian Institute of
Geography and Statistics), IBGE, there are 70 million people
older than 15 in Brazil who did not complete middle school
and 16 million of these are young people between 15 and
24 years of age.
Location: twenty-one Brazilian states.
Target Public: A total of 901,000 students from 3,638
public elementary and middle schools.
Partners: Fundação Abrinq pelos Direitos da Criança e do
Adolescente (Abrinq Foundation for the Rights of Children
and Adolescents), non-governmental organizations working
with education, municipal and state departments and the
Ministry of Education.
Results: ☺ The targets of the Programa Crer para Ver for
2004 were, in addition to raising 2.5 million reais, to launch
the Crer para Ver campaign for the Education of Young
People and Adults, EJA, promoting an increase in the
number of enrollments, to disseminate the topic in the
media and to support initiatives to improve the quality of
education for this section of that public.

Results of the campaign for the Education
of Young People and Adults (EJA)
The campaign focused on three work fronts:
1) Selection, financing and technical follow-up of projects
geared towards the education of teachers of young people
and adults: in 2004, the project Organizando Experiências
e Organizando Propostas de Educação (Organizing
Experiences and Organizing Proposals for Education)/State
of São Paulo was supported, benefiting the EJA teachers of
the public school system of Cajamar.
2) Launch of the Innovating the Education of Young People
and Adults Award in partnership with the Ministry of
Education and Culture.
3) Mobilization of the Natura Sales Representatives so that
they can, voluntarily,
identify potential students and raise
their awareness about returning to school.

Results of projects for the regular elementary and middle
school education
The program ended 2004 with four supported projects: Es-
cola Indígena da Floresta (Indigenous School of the
Forest/State of Acre; Cinema e Vídeo nas Escolas (Cinema
and Video at Schools)/State of São Paulo; Janelas Cruzadas
(Crossed Windows)/State of Rio de Janeiro, and Chapada/
State of Bahia.

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Total Support and Sponsorship in 2004

Natura’s Funds
Areas
Promotion of Sustainable Development
Protection of the Environment
Art and Culture
Promotion of Equality and Diversity
Strengthening of the Organizations from Civil Society and Governmental Organizations
Promotion of Dialogue
Total Support and Sponsorship – Natura Funds

Tax Funds
Areas
Promotion of Sustainable Development
Art and Culture
Total Support and Sponsorship – Tax Funds

2004 - in reais
85,000
237,668
66,963
66,000
442,423
454,657
1,352,711

2004 - in reais
1,047,000
891,157
1,938,157

Targets assumed in the Natura 2003 Annual Report

Initiative

Target assumed in 2003

Program for the Certification
of Natural Raw Materials

Define known source of origin and sustainable management for
another 8 plants used in the Ekos line≤.

Plântula Project

Identification of sustainable source for 17 plants.

Sustainable Development
Program with the Supplier
Communities

To start the investment of the fund for sustainable development in
the communities in Central Juruá, Iratapuru and the neighboring
area of Belém.

Crer para Ver Program

Training of Cultural Agents

To launch a national Crer para Ver/Education of Young People
and Adults campaign, increasing the demand for enrollment and
quality of the education, and drawing the attention of society to
this issue; to start a process for the inclusion of products arising
from projects that create jobs and generate income in the
portfolio of the Crer para Ver line in 2005.

At least 80% of the young people enrolled in 2003 will finish the
training course for cultural agents; involve the young people who
completed the course in cultural and educational activities of the
city and the company.

Agenda 21 in Cajamar

To expand the Tripartite Working Group and start the process for
the involvement of local leaders in democratic forums aimed at
planning the municipality.

Novos Olhares – Make-up
Workshops

Expansion of the project to another five locations in Brazil and
one in South America and implementation of make-up workshops
in the company’s neighboring communities – Cajamar and
Itapecerica da Serra; to strengthen small centers in each city and
increase the free participation of the Sales Representatives.

Gente Bonita de Verdade na
Comunidade Program

To set up, during the year, six groups of employees, totaling 140
employees, working in the neighboring communities; reach the
end of the year with maps of the structural needs of the social
entities so as to plan initiatives in 2005.

Natura Education Program

Expand the scope of the program to Natura Sales Representatives
and outsourced employees.To grant to employees 80
scholarships for technical courses, 90 for language courses, and
100 for college studies.

Results
(cid:1) Target partially achieved. Seven plants used in the Ekos line were certified
(see complete analysis of the target in the description of projects’ results, page 68).
☺ Target achieved.The potential areas for the supply of medicinal species
of interest were identified and the need for research that establishes a
continuing production process and contributes to the preservation of
these genetic resources was evidenced.
(cid:1) Target partially achieved. In 2004, the initiatives that support the
communities were developed by way of partnerships and a continuous
local monitoring. Natura’s investments in the program and the financial
return to the communities ensured important improvements in the
production chain and strengthening of local cooperatives. However, the
investment of the fund in the Belém area and in Central Juruá has not
yet been defined.
☺ Target achieved.The campaign was launched and the study for the
inclusion of products originating from job creation and income generation
projects in the portfolio was started (see complete analysis in the
description of the project’s results, page 69).

☺ Target achieved. 100% of the 52 young people involved in the
training course for cultural agents, in partnership with the Serviço
Nacional de Aprendizagem Comercial de São Paulo (Brazilian Service
for Commercial Learning), Senac, completed the course; 100% of the
young people participated, on a professional basis, in two projects in
partnership with the Education Board of the Municipality of Cajamar by
working in the state schools.These young people were remunerated by
the partners in the project.
(cid:1) Target partially achieved.The process for the expansion of the
tripartite working group started upon the 1st Pro Agenda 21 Meeting;
the analysis of the municipality of Cajamar was made and interactive
workshops in two districts of the city were carried out (see complete
analysis of the target in the description of the project’s results, page 68).
(cid:1) Target partially achieved. In 2004, the project was expanded to four
new market management offices in Brazil. One hundred and fourteen
workshops and 1.888 services to patients and their close companions
were provided at the ten institutions supported by the project.The
number of the project’s volunteers grew from 123 to 170.The target for
the implementation of the project in the international operations has not
been achieved. Make-up workshops were implemented in the company’s
neighboring communities, with the involvement of Natura’s employees.
The continuity of this project in 2005 is under analysis.
(cid:1) Target partially achieved. In 2004, six partner entities participated in
the project and received Natura’s volunteers.The volunteers carried out
activities related to Shantala massage, make-up workshops and games. In
total, 110 employees participated, in 166 visiting periods, divided into
four groups.The map of the structural needs of the social organizations,
a target that was also assumed for 2004, was not totally structured.
(cid:1) Target partially achieved. All the scholarships provided for were
offered.The scope of the program will be expanded in 2005 (see
complete analysis in the description of projects’ results, page 68).

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Economic results
Since its implementation in 1995, the program has supported
148 projects in 3,638 state schools in 21 states, involving
901,000 children. Between 1995 and 2004, 17.9 million
reais was raised. In 2004, the fund raising, of 3 million reais,
was the highest since the creation of the program and
exceeded the target set for the year by 20%.
Target for 2005 To maintain the fund raising for social
projects at the current levels and enroll 50,000 people all
over Brazil by way of the Natura Sales Representatives.

5. Projeto Biodiversidade Brasil (Biodiversity
Brazil Project)(1)
Objective: Stimulate discussion on topics related to
Brazilian biodiversity in partnership with the Fundação Padre
Anchieta – TV Cultura de São Paulo (Father Anchieta
Foundation – Cultura TV Channel of the State of São
Paulo). This partnership takes place by means of three
shows produced and broadcasted by this channel:
Biodiversidade Debate (Biodiversity Debate), a series of
documentaries called Biodiversidade Documento (Biodiversity
Document), and the broadcast Biodiversidade (Biodiversity),
which is part of the TV program Repórter Eco.
Location: From the city of São Paulo, it reaches all Brazilian
states where TV Cultura programming is broadcasted.
Target Public: Environmentalists, researchers, governments,
businessmen and people from civil society.
Partners: TV Cultura e Fundação Padre Anchieta.

1. Project supported with Rouanet Law.

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this

period,

produced.

Results: ☺ In 2004, 26 Biodiversidade broadcasts, one
documentary for Biodiversidade Documento and 7 Bio-
diversidade Debate programs were produced. From August
to December 2004, the programs were rerun.
Since the beginning of the project, 145 Biodiversidade
broadcasts, 34 Biodiversidade Debate programs and
8 documentaries for Biodiversidade Documento have
been
the
During
www.biodiversidadebrasil.com.br Website received and
replied to 7,000 messages from viewers of the shows or
people interested in the biodiversity topic.
the documentary Bioconexão A Vida em
In 2004,
Fragmentos (Bioconnection Life in Fragments) won the
Documentary Award on the Biodiversity of the Atlantic
Forest in the Television 2004 category. The award was
organized by the Aliança para a Conservação da Mata
Atlântica (Alliance for the Preservation of the Atlantic
Forest), a partnership between Conservação Internacional
Brasil (International Brazil Preservation) and the Fundação
SOS Mata Atlântica (SOS Atlantic Forest Foundation).The
International Center for Journalists and the International
Federation of Environmental Journalists also participated. In
2003, this documentary won the 1º Concurso Biodiver-
sidade Brasil (First Biodiversity Brazil Contest), which was
also carried out through the partnership and with the
Ministry of Environment.
Target for 2005 To produce 48 Biodiversidade broadcasts,
one documentary on a theme yet to be defined, prospect
of a partnership for the production of a second
documentary, prospect for the distribution of the shows to
the state-owned TV companies in Latin America.

Transparent Relations with Society and Dialogue with Stakeholders
Lectures about Corporate Responsibility given in 2004

Event

Environment Working Group

Lecture

Environmental
Indicators

Corporate Social Responsibility
Principles and Practices Course:
Selection, Evaluation of and
Partnership with Suppliers Section
Annual Meeting of the Pan
American Standards Commission
(COPANT)

Natura Social
Responsibility
Case Study

Organization/Inviter

Lecturer

Date

Location

Audience

ABIHPEC – The Brazilian
Association of the Personal
Hygiene, Perfume and
Cosmetics Industry
Getúlio Vargas Foundation –
São Paulo, Extension Course
in Social Responsibility

Eliane Anjos

2/18/2004

São Paulo, State
of São Paulo

Eliane Anjos

4/26/2004

São Paulo, State
of São Paulo

Around 20 participants, including
managers, environment assistants
and technicians from various
industries
Around 30 course students

The Brazilian Association of
Technical Standards

Rodolfo
Witzig
Guttilla

5/14/2004

Salvador,
State of Bahia

1º Forum for the Development of
Suppliers

Course for Managers

Mobiliza Amazônia 2004
(Mobilize the Amazon 2004) –
Seminar to Raise Funds For
Organizations from
Civil Society

Implementation of the
Natura Environmental
Management System

Natura and Corporate
Responsibility
Natura Annual Report

Moblization of
Relations and
Vocation – Natura’s
Experience

Fifth Cycle of Lectures of the
Federal University of São Carlos

Natura and Social
Responsibility

Transportadora Americana

Karina
Aguilar

5/20/2004

Americana,
State of
São Paulo

Superior School of
Advertising and Marketing
Getúlio Vargas Foundation –
State of São Paulo
Ashoka Empreendedores
Sociais and Sector
Chamber of Social
Responsibility of the
Commercial Association of
the State of Pará
Federal University of
São Carlos

Nelmara
Arbex
Nelmara
Arbex
Guilherme
Leal

5/20/2004

5/26/2004

5/28/2004

São Paulo, State
of São Paulo
São Paulo, State
of São Paulo
Belém,
State of Pará

Isabel
Ferreira

5/31/2004

São Carlos,
State of
São Paulo

Sixth Environment Week

Brazilian Water Reuse
Case Study

The Federation of Industries
of the State of São Paulo –
Environment Department

Eliane Anjos

6/1/2004

São Paulo, State
of São Paulo

Sixth Environment Week

Committee of Young Executives
of the Chamber of Commerce
of Campinas
Second Unimed Social
Responsibility Seminar
International Meeting on
Social Responsibility

Environmental
Performance
Indicators

Natura Social
Responsibility
Case Study
Natura and the
Environment
Corporate
Responsibility

Unimed

Bureau Veritas

The Federation of Industries
of the State of São Paulo –
Environment Department

Eliane Anjos

6/3/2004

São Paulo, State
of São Paulo

The American Chamber of
Commerce – Campinas

Giuliana
Ortega

6/8/2004

Karina
Aguilar
Itamar
Correia da
Silva
Pedro
Passos
Eliane Anjos

6/24/2004

7/7/2004

7/28/2004

8/10/2004

Campinas,
State of
São Paulo
Atibaia, State
of São Paulo
São Paulo, State
of São Paulo

São Paulo, State
of São Paulo
Ribeirão Preto,
State of
São Paulo

Monthly Meeting on
Social Responsibility
Seminar on Environmental
Education and Management

Social Responsibility –
Natura’s View
Natura and the
Environment

Association of Christian
Company Officers
School of Pharmaceutical
Sciences of Ribeirão Preto –
University of São Paulo

Around 220 participants, including
executives from the social
responsibility and quality areas
and representatives of the Pan
American Standards Commission
and regulatory bodies from
Latin America
Around 150 employees and
suppliers of Transportadora
Americana

Around 30 company managers

Around 300 participants, including
social entrepreneurs, small
businessmen, representatives
from organized civil society, third
sector specialists, the community
and the general public
Around 400 college students
in engineering, production,
psychology, social sciences,
among others
Around 300 representatives from
the industrial sector, government,
trade associations and entities
from the third sector
Around 300 representatives from
the industrial sector, government,
trade associations and entities
from the third sector
Around 35 young executives

Around 100 employees of
Unimed and guests
Around 400 executives, in
particular from the
quality area
Around 20 businessmen
from various sectors
Around 200 graduation and post
graduation students, professors and
employees of the school and other
units of the campus of the university
in Ribeirão Preto (medicine, nursing,
dentistry, philosophy, economy and
business administration)
Around 50 participants, including
officers, managers, environment
managers from industries, lawyers,
members of other chambers of
commerce, representatives from
the government, among others

Environment Committee

Seminar on Socially Responsible
Management

From Sustainability
Project to Practice –
Environmental
Technologies
Implemented in the
Construction of the
New Space
Adherence to Social
Responsibility by
Investors, Private
Pension and
Investment Funds

24th Brazilian Seminar on
Intellectual Property

Biodiversity and
Intellectual Property

São Paulo Apimec Meeting

Apimec Natura

The American Chamber of
Commerce – São Paulo

Eliane Anjos

8/11/2004

Cajamar,
State of
São Paulo

Federation of Industries of
the State of São Paulo,
Center of Industries of the
State of São Paulo and Ethos
Institute of Companies and
Social Responsibility
ABPI – Brazilian Association
of Intellectual Property

Association of Capital
Markets Investment Analysts
and Professionals of the State
of São Paulo and Natura

Rodolfo
Witzig
Guttilla

8/11/2004

São Paulo, State
of São Paulo

Around 100 participants, including
businessmen and professionals of
the social responsibility area

Antônio
Siqueira

Pedro
Passos,
David Uba
and Helmut
Bossert
Pedro
Passos

8/17/2004

8/18/2004

Brasília,
Federal
District
Cajamar,
State of
São Paulo

Around 250 people, including
lawyers and technicians from the
intellectual property area
160 participants, including capital
market analysts, investors
and others

8/18/2004

São Paulo, State
of São Paulo

18 directors of the Foundation for
the Brazilian Quality Award

Third Corporate Forum –
Fundamentals of Excellence

Excellence in
Management and Social
Responsibility

The Foundation for the
Brazilian Quality Award

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Rodolfo
Witzig
Guttilla

Giuliana
Ortega

Nelmara
Arbex

Rodolfo
Witzig
Guttilla

Giuliana
Ortega e
Cristina
Pastorello

Nelmara
Arbex

Helmut
Bossert

Event

Lecture

Organization/Inviter

Lecturer

Date

Location

Audience

Editora Caju

Eliane Anjos

8/23/2004

São Paulo, State
of São Paulo

First Forum on Environmental
Management in Industrial Plants

Sustainability Corporate Forum
and Corporate Responsibility

Fifth Week of Lectures of the
College of Social and Applied
Sciences of the University
of the Paraíba Valley

Life Cycle Assessment
as an Environmental
Management Tool

Sustainability
and Corporate
Responsibility

Centre of Studies on
Sustainability and The
Getúlio Vargas Foundation

The Importance of
Social Responsibility for
Companies

University of the
Paraíba Valley

Forum on gender affirmative
analysis and initiatives in companies

Gender Challenges at
Natura

ABN-Amro and
Itaipu-Binacional

Social Responsibility

Gaby Comunicação

Around 30 participants –
Environment officers, managers and
technicians from various industries

Around 120 participants, including
professionals from the private
sector and entities from civil society

Around 240 Social Sciences
college students

8/24/2004

São Paulo, State
of São Paulo

8/26/2004

São José dos
Campos, State
of São Paulo

9/3/2004

São Paulo, State
of São Paulo

Representatives from ten
companies related to the topic

9/11/2004

Belém,
State of Pará

Around 180 professionals from the
communication area

Second Corporate Communication,
Press Relations and Public Relations
Meeting of the State of Pará

Environment Committee

Business Administration Week
of the Superior School of
Advertising and Marketing

Meeting of the Civic
Responsibility Council of the
The Federation of Industries of
the State of Minas Gerais

Integrated Management Course

Sustainability from
Project to Practice –
Environmental
Technologies
Implemented in the
Construction of
the New Space

Natura Social
Responsibility
Case Study

The American Chamber of
Commerce – Campinas

Eliane Anjos

9/15/2004

Campinas,
State of
São Paulo

Around 50 participants, including
environment officers, managers
and technicians from industries,
lawyers, representatives from
the government, among others

Superior School of
Advertising and Marketing

Susy
Yoshimura

9/28/2004

São Paulo, State
of São Paulo

Around 30 business administration
college students

Social Responsibility –
Principles and Practices

Fiemg – The Federation
of Industries of the State
of Minas Gerais

Guilherme
Leal

10/4/2004

Natura Social
Responsibility
Case Study

Senac SP – Brazilian Service
for Commercial Learning
of the State of São Paulo

10/16/2004

Belo
Horizonte,
State of
Minas Gerais

Cajamar,
State of
São Paulo

Around 40 members of the
Corporate Civic Responsibility
Council of Fiemg

31 students from the Masters
course in Health, Security and
Environment

Around 500 participants,
including social entrepreneurs,
businessmen, representatives from
organized civil society multilateral
organizations, and governments
and third sector specialists

Around 200 participants, including
corporate leaders, community
and NGOs

Around 380 executives, including
company directors, chairmen
and officers

Third UNIFAI Multidisciplinary
Symposium

Course for Managers

Natura Lecture

Corporate Responsibility
– Challenge or
Commitment

Unifai – Assunção
University Center

Corporate Responsibility
Management System –
Natura’s Experience

FGV – Getúlio Vargas
Foundation –
State of São Paulo

Natura Institutional
Case Study

Unip – São Paulo
University

Global Summit on Social
Entrepreneurship – The Future of
Social Entrepreneurship – How
Big Can Small Get?

Participation in the
“Lessons from Scaling
from Various Models –
Organic Growth
Model” panel

The Schwab Foundation
for Social Entrepreneurship

Guilherme
Leal

10/25/2004

São Paulo, State
of São Paulo

Around 200 students from
different areas

11/4/2004

São Paulo, State
of São Paulo

Around 30 company managers and
managers from related areas

São Paulo, State
of São Paulo

Around 300 business administration
college students

11/4/2004

11/5/2004

São Paulo, State
of São Paulo

European Conference on
Corporate Social Responsability

Natura Ekos
Case Study

Ministry of Economic Affairs
of The Netherlands

Sonia
Tuccori

11/8/2004

Maastricht,The
Netherlands

Fifth Brazilian Congress of
Corporate Governance

Apimec RJ Meeting

Share Offering and
Corporate Governance
– Natura’s Experience

Natura Case Study

IBGC – Brazilian Institute
of Corporate Governance

Guilherme
Leal

11/8/2004

São Paulo, State
of São Paulo

Apimec RJ – Association of
Capital Markets Investment
Analysts and Professionals of
the State of Rio de Janeiro –
and Natura

Esalq – Luiz de Queiroz
Superior School of
Agriculture

International Association for
Continuing Education
Training

David Uba e
Moacir
Salzstein

11/11/2004

Rio de Janeiro,
State of
Rio de Janeiro

90 participants, including capital
market analysts, investors
and others

Fernanda
Ferraz

11/11/2004

Piracicaba,
State of
São Paulo

Around 180 graduation, masters
and doctors degree academics

Solange
Rubio

11/20/2004

São Paulo, State
of São Paulo

60 Business Administration
college students

Access to Biodiversity
and Sharing of Benefits

Natura Social
Responsibility Case
Study – Program of
Relationship with the
Neighboring
Community

Natura Annual Report
Case Study

Uniethos

Giuliana
Ortega

11/24/2004

São Paulo, State
of São Paulo

25 professionals of various
companies

Natura Corporate
Responsibility -
Environmental
Management

Brazilian Federation
of Banks

Nelmara
Arbex

11/25/2004

São Paulo, State
of São Paulo

Around 200 company managers
and professionals from
various areas

Social Responsibility
and Communication

Association of Advertising
Professionals

Participation in debate
and round table

Yale School of Forestry and
Environmental Studies

Rodolfo
Witzig
Guttilla

Sonia
Tuccori

12/1/2004

São Paulo, State
of São Paulo

Around 80 professionals from the
advertising area

12/1/2004

Yale,
Connecticut –
United States

Around 300 participants, including
professors, students, anthropologists
and researchers from Yale
University

Symposium on Traditional
Knowledge and Preservation
of Agrobiodiversity

Management of Knowledge –
Companies’ Experiences

Planning and Implementation
Course – Social Responsibility
Management for Sustainable
Development

First Seminar on Financial
Marketing

Tenth Forum of Debates of the
APP – São Paulo Association
of Advertising

Biodiversity and Business in the
Amazon: Partnerships between
Communities, Corporations and
Government

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ABC – The Brazilian Association of Cosmetology
Aberje – The Brazilian Association of Corporate Communication
ABEVD – The Brazilian Association of Direct Selling Companies
(www.abevd.org.br)

ABIA – The Brazilian Association of Food Industries
(www.abia.org.br)
ABIFITO – The Brazilian Association of the Phytotherapeutic
and Health Promotion Products Sector
(www.abifito.org.br)
ABIHPEC – The Brazilian Association of the Personal Hygiene,
Perfume and Cosmetics Industry
(www.abihpec.org.br)

ABNT – The Brazilian Association of Technical Standards
(www.abnt.org.br)
ABPI – The Brazilian Association of Intelectual Property
(www.abpi.org.br)

ABPVS – The Brazilian Association of Sanitation Control
Professionals (www.abpvs.com.br)
ABQV – The Brazilian Association of Quality of Life
(www.abqv.org.br)
Acelp – The Portuguese Language Corporate Communication
Association
The Itapecerica da Serra Development Agency

AIPPI – The International Association for the Protection of
Intelectual Property (www.aippi.org)
Alanac – The Association of the Brazilian Pharmaceutical
Companies (www.alanac.org.br)
AMCHAM – The American Chamber of Commerce of São
Paulo (www.amcham.com.br)

Amerco – The Association of Corporate Communication of
the Mercosur
Peruvian Civil Asociation of Companies Related to Brazil –
Brazil Group
Anpei – The Brazilian Association of RD&E of Innovative
Companies (www.anpei.org.br)
Asipi – The Interamerican Association of Industrial Property
(www.asipi.org)
Aspi – The São Paulo Association of Intelectual Property
(www.aspi.org.br)
Asug – The Association of the SAP Users in Brazil
(www.asug.com.br)
Audibra – Brazilian Institute of Internal Auditors
(www.audibra.org.br)
Argentinean Chamber of the Cosmetic and Perfurmery
Industry (Capa)
Chamber of Commerce of Lima

Argentinean Chamber of Direct Sales
Chilean Chamber of Direct Sales
Câmara Net – The Brazilian Chamber of Electronic Commerce
(www.camara-e.net)
Peruvian Chamber of Direct Sales
Ceal – The Council of Latin American Businessmen
(www.ceal-int.org)
Cempre – Corporate Commitment to Recycling
(www.cempre.org.br)
Ciesp – The Center of Industries of the State of São Paulo
(www.ciesp.org.br)

Commitment to Leadership and Social Influence
Representation in Trade Associations and Associations in General

Trade Association/Association

Natura Representative

Type of Representation

Eneida Berbare
Rodolfo Guttilla
1. Rodolfo Guttilla
2. Moacir Salzstein
3. Karen Cavalcanti
4. Lucilene Prado

5. Angel Medeiros
6. Lucila Taninaga
Ariadne Morais
Vicente de Mello
Ariadne Morais
Vicente de Mello

1. Pedro Luiz Passos
2. Rodolfo Guttilla
3. Moacir Salzstein
4. Lucilene Prado
5. Elizabete Vicentini
Renato Wakimoto

1. Eneida Berbare

2. Antonio Siqueira
Elizabete Vicentini

1. Plínio Yasbek
2. Luiza Cruz
Rodolfo Guttilla

1. Rodolfo Guttilla
2. Marcelo Soderi
Eneida Berbare

Representative
Chairman of the Decision-Making Council
1. Chairman
2. Coordinator of the Research Committee
3. Coordinator of the Communication Committee
4. Coordinator of the Taxation and Government Relations
Committee
5. Member of the Supply Chain Committee
6. Member of the Research Committee
Representatives

Representatives

1.Vice President
2. Director
3. Representative in the Foreign Trade Committee
4. Representative in the Taxation Committee
5. Representative in the Biodiversity Committee
Representative

1. Representative of the Copyrights, Patents, Brands,
and Technology
2. Representative
Representative

1. Associated Member - Founder
2. Executive Secretary
Chairman

1.Vice President
2. Representative
Representative

Ariadne Morais

Representative

1. Pedro Luiz Passos
2. Antônio Siqueira

3. Rodolfo Guttilla
4.Vicente de Mello

5. Eliane Anjos
6. Fábio Piastrelli Mengozi
7. Elizabete Vicentini
8. Eneida Berbare
Rodolfo Guttilla

1. Member of the Board
2. Member of the Strategic Group Legal of Directors and
Vice Presidents
3. Corporate Affairs Member
4. Member of the Competition Strategic Group Brazil and
Director of the Balanced Scorecard Brazil Working Group
5. Environment Committee Member
6. Relationship Management Committee Member
7. Member of the ANVISA Subgroup
8. Member of the Intellectual Property Technical Group
Chairman

Erasmo Toledo

Representative

Trade Association/Association

Natura Representative

Type of Representation

Mandate

2002 / 2005
1. 2003 / 2005

1 and 2. June 2004 /
June 2007

July 2004 / July 2008

1. 2004 / 2005

July 1999 / July 2005

Fiesp/NAS – The Federation of Industries of the State of São
Paulo/Social Action Center (www.fiesp.org.br)

FPNQ – The Foundation for the Brazilian Quality Award
(www.fpnq.org.br)

Funbio – The Brazilian Fund for Biodiversity
(www.funbio.org.br)
The Abrinq Foundation for the Rights of Children
(www.fundacaoabrinq.org.br)

The Getúlio Vargas Foundation/Centre of Studies on
Sustainability (www.ces.fgvsp.br)
G50 – The Group of 50 Carnegie Endowment for International
Peace
Gife – The Group of Institutions, Foundations and Companies
(www.gife.org.br)
GRI – Global Reporting Initiative (www.globalreporting.org)
Ibef – The Brazilian Institute of Finance Executives
(www.ibef.com.br)
IBGC – The Brazilian Institute of Corporate Governance
(www.ibgc.org.br)
Ibri – The Brazilian Institute of Investor Relations
(www.ibri.org.br)

Iedi – The Institute of Studies for Industrial Development
(www.iedi.org.br)
AKATU Institute (www.akatu.org.br)
The Fernand Braudel Institute of World Economy
(www.braudel.org.br)
The São Paulo Institute Against Violence (www.spcv.org.br)
MBC – Competitive Brazil Movement (www.mbc.org.br)

Sipatesp – Perfume and Beauty Products Industry Union in the
State of São Paulo

Uniethos (www.uniethos.org.br)
WFDSA – World Federation of Direct Selling Associations
(www.wfdsa.org)
WWF Brasil (www.wwf.org.br)

1. Pedro Luiz Passos
2. Rodolfo Guttilla
3. Eliane Anjos

1. Pedro Luiz Passos
2. Roberto Zardo

3. Sophia Segawa

4.Yara Rezende

Guilherme Peirão Leal

1. Guilherme Peirão Leal
2. Nelmara Arbex
3. Pedro Villares
4. Susy Yoshimura
Nelmara Arbex

1. Delegate Representative of SIPATESP
2. Director of the Social Action Center
3. Representative in the Environment Department

1. Member of the Trustee Council
2. Representative in the Benchmarking Thematic
and Management by Processes Committees
3. Representative in the Benchmarking Thematic and
Management by Processes Committees
4. Representative in the Intellectual Capital and
Innovation Committee
Deputy Member of the Decision-Making Council

1. Member of the Board
1, 2, 3 e 4. Member of the Steering Committee of the
Programa Crer para Ver (Believing is Seeing Program)

Member of the Advisory Council

Guilherme Peirão Leal

Member

Nelmara Arbex

Member

Mandate

1. June 2001 / June
2004
2. September 2003 /
September 2004
1. 2003 / 2005

November 2001 /
November 2005
1. Since 1992 and
since 1996
2 e 3. Since 2003
4. Since 2004

Nelmara Arbex
Jorge Casmerides

Member of the Stakeholders Council
Member

2002 / 2005

Lucilene Prado

Representative

Marcel Goya
Helmut Bossert
Eduardo Zornoff
Guilherme Peirão Leal

Representatives

Member of the Board

Guilherme Peirão Leal
Guilherme Peirão Leal

Member of the Steering Council
Member of the Institute

Rodolfo Guttilla
1. Maria Helena Zucchi
2. Roberto Zardo
3. Moacir Salzstein
4. Rodolfo Guttilla
1. Pedro Luiz Passos

2. Rodolfo Guttilla
Nelmara Arbex
Pedro Luiz Passos

Representative
1. Representative in the Innovation Thematic Committee
2, 3 e 4. Representatives

1.Vice President and Coordinator of the Industrial
Relations Working Group
2. Director
Member of the Technical Council
Member of the CEO Council

Guilherme Peirão Leal

Member of the Steering Council

September 2000 /
Undetermined

1 and 2. June 2004 /
June 2007

December 2001 /
March 2006

Elizabete Vicentini

Director

May 2002 / May 2005

Eneida Berbare

Representative

Eneida Berbare
Antonio Siqueira
Anna Sant'Anna

Representatives

Representative

Meire Stuchi

Representative

1. Mauricio Bellora
2. Jelena Nadinic
Erasmo Toledo
Elby Stromeyer
Mauricio Bellora
Mauricio Pinto
Fábio Mengozi

1. Member of the Steering Commission
2. Member of the Technical Commission
Representatives

Member of the Steering Commission
Director of the Chamber
Representative

Erasmo Toledo
Guilherme Peirão Leal

Representative
Member

Eliane Anjos

Representative

2004 / 2005

1. Guilherme Peirão Leal
2. Itamar Correia da Silva

1. Director
2. Holder of the title of Director of the Board of Ciesp
Jundiaí
Coordinator of the Environment Thematic Council
Office Holder of the Technical Chamber of Underground
Water – CTAS
Director of Industry and Commerce

1 and 2. September
2004 / September
2007

1. Guilherme Peirão Leal
2. Nelmara Arbex
3. Rodolfo Guttilla

1. Member of the Decision-Making Council
2. Office Holder
3. Substitute

1. May 2003 / May
2005

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CNI – The Brazilian Confederation of Industries (www.cni.org.br)
Committee of the Upper Tietê Hydrographic Basin

Eliane Anjos
Eliane Anjos

The Council for the Rights of Children and Adolescents of
Cajamar
Ethos – The Ethos Institute of Companies and Social
Responsibility (www.ethos.org.br)

Walkyria Dias

Contact Details of Natura’s Representatives to Trade Associations and Associations in General
Nome
Anna Sant'Anna
Antonio Siqueira
Ariadne Morais
Eduardo Zornoff
Elby Stromeyer
Eliane Anjos
Elizabete Vicentini
Eneida Berbare
Fernanda Ferraz
Guilherme Peirão Leal
Itamar Correia da Silva
Jelena Nadinic
Jorge Casmerides
Karen Cavalcanti
Lucilene Prado
Luiza Cruz
Marcel Goya
Marcelo Soderi
Maria Helena Zucchi
Mauricio Bellora
Mauricio Pinto
Meire Stuchi
Moacir Salzstein
Nelmara Arbex
Pedro Luiz Barreiros Passos
Pedro Villares
Plínio Yasbek
Roberto Zardo
Rodolfo Witzig Guttilla
Sophia Segawa
Susy Yoshimura
Vicente de Mello
Yara Rezende

Função
Information Technology Manager
Executive Director – Legal Affairs
Regulatory Affairs Analyst
Market Planning Manager
Technical Director – Peru
Environment Manager
Technical Manager
Brands and Patents Manager
Lawyer
Cochairman of the Board
Senior Executive – Operations and Logistics
Technical Director – Argentina
International Operations Controller
Institutional Communication Manager
Legal Manager
Human Resources Consultant
Economic Planning Manager
Marketing Manager
Commercial Manager
Executive Director – Latin America
Operations Manager – Chile
Controller Brazil
Strategic Plan Manager
Corporate Responsibility Manager
Chief Executive Officer
Executive Director – Sales Brazil
Health Promotion Coordinator
Executive Director – Quality
Executive Director – Corporate Affairs
Quality Coordinator
Crer para Ver Program Coordinator
Executive Director – Flora Medicinal
Information Technology Manager

Email
annasantanna@natura.net
antoniosiqueira@natura.net
ariadnemorais@natura.net
eduardozornoff@natura.net
elbystrohmeier@natura.net
elianeanjos@natura.net
elizabetevicentini@natura.net
eneidaberbare@natura.net
fernandaferraz@natura.net
guilhermeleal@natura.net
itamarsilva@natura.net
jelenanadinici@natura.net
jorgecasmerides@natura.net
karencavalcanti@natura.net
lucileneprado@natura.net
luizacruz@natura.net
marcelgoya@natura.net
marcelosoderi@natura.net
mariahelenazucchi@natura.net
mauriciobellora@natura.net
mauriciopinto@natura.net
meirestuchi@natura.net
moacirsalzstein@natura.net
nelmaraarbex@natura.net
pedropassos@natura.net
pedrovillares@natura.net
plinioyasbek@natura.net
robertozardo@natura.net
rodolfoguttilla@natura.net
sophiasegawa@natura.net
susyyoshimura@natura.net
vicentedemello@natura.net
yararezende@natura.net

Telefone
55 11 4446 2771
55 11 4446 2881
55 11 4446 2806
55 11 4147 8670
51 14 241 2230
55 11 4446 2485
55 11 4446 2850
55 11 4446 2860
55 11 4446 2866
55 11 4446 2203
55 11 4446 2401
54 11 4545 6059
55 11 4446 2911
55 11 4446 2530
55 11 4446 2840
55 11 4446 2192
55 11 4446 2713
55 11 4147 8456
55 11 4446 2590
54 11 4545 6665
56 2
620 9200
55 11 4446 2810
55 11 4446 2616
55 11 4446 2580
55 11 4446 2200
55 11 4147 8331
55 11 4446 2507
55 11 4446 2280
55 11 4446 2561
55 11 4446 2772
55 11 4147 8409
55 11 4446 2501
55 11 4446 2735

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Natura presents its economic, environmental and social performance indicators in accordance with the
recommendations of the Associação dos Analistas e Profissionais de Investimento do Mercado de
Capitais (Association of Capital Markets Investment Analysts and Professionals) – Apimec, Associação
Brasileiras das Companhias Abertas (Brazilian Association of Publicly-Traded Companies), Abrasca, and
the Global Reporting Initiative – GRI. Also, Natura follows the guidelines of the Instituto Ethos de
Empresas e Responsabilidade Social (Ethos Institute of Companies and Social Responsibility).
In this 2004 report, the indicators now include information on the international operations.These are,
it is worth noting, operations of an administrative nature. Due to this fact, and to the size of these
operations, their social and environmental impact is different from that in Brazil. Abroad, some of the
processes for gathering social and environmental information were under implementation at the end of
2004 and will be more complete in the years ahead.
The year of 2004 was also the first year in which the Environmental Management System and the
Corporate Responsibility Management System were fully implemented, leading to the consolidation of
internal processes. Due to these developments, this report presents more detailed data and a more
clear indication of the points to be improved. An example of the detailing of the data is the new
methodology for monitoring investments in the social and environmental areas.These investments are
organized by stakeholder and summarized in the corporate responsibility matrix (see page 25).
The table of correspondence between the principles of the Global Compact and the company’s
performance indicators shown below illustrates Natura’s contribution to the promotion of the principles
proposed by the United Nations.

The Principles of the Global Compact
Human Rights
I: The support and respect of the protection of international human rights.
II: The refusal to participate or condone human rights abuses.

Labor
III: The support of freedom of association and the recognition of the right to

collective bargaining.

IV: The abolition of compulsory labor.
V: The abolition of child labor.
VI: The elimination of discrimination in employment and occupation.

Environment
VII: The implementation of a precautionary and effective program to

environmental issues.

VIII:Initiatives that demonstrate environmental responsibility.

IX: The promotion of the diffusion of environmentally friendly technologies.

Indicadores GRI

62, 63, 64, 66
63, 64

49, 50, 67

69
68
60, 61, 66

13 a 35, 40, 43, 63, 64

13 a16, 19, 23, 24, 32
a 37, 41 a 43
17, 22, 35, 36

Anti-Corruption
X: The promotion and adoption of initiatives to counter all forms of corruption,

including extortion and bribery.

Further clarifications on this report may be obtained from:
José David Vilela Uba, Senior Executive – Finance and Investor Relations
Rodolfo Witzig Guttilla, Executive Director – Corporate Affairs and Government Relations
Natura’s Website

Other information can be requested via:
Natura Service Center
Environment Department
Strategic Planning Department
Investor Relations Department
Corporate Responsibility Department
Investor Relations Website

Note: N/A = Not applicable and NA = Not available

55 11 4446-2701
55 11 4446-2561
www.natura.net

0800-11 55 66
55 11 4446-2485
55 11 4446-2713
55 11 4446-2180
55 11 4446-2580
www.natura.net/investor

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7

economic, environmental
and social indicators

global reporting initiative

“We are a registered
Organisational Stakeholder
of the Global Reporting Initiative
(GRI) and support the mission of
the GRI to develop globally
accepted sustainability reporting
guidelines through a global,
multi-stakeholder process.”

“This Report has been prepared in
accordance with the GRI 2002 Guidelines.
It represents a balanced and reasonable
presentation of our organization’s
economic, environmental and
social performance.”
Pedro Luiz Barreiros Passos
Chief Executive Officer

Economic Performance Indicators
The indicators in this section comprehend the activities in Brazil and international operations (Argentina, Chile, Peru and
Bolivia), unless when otherwise mentioned.

Direct Economic Impacts
Customers

1. Net sales (in thousands of reais).

Net Sales

2. Regional market analysis.
Natura does not release this information.

Suppliers

2002
993,139

2003
1,328,910

2004
1,769,664

Brazil
Argentina
Chile
Peru
Total Natura

Increase/decrease in retained earnings at the end of period (in thousands of reais).

Net income

Public Sector

2002

21,741

2003

63,884

2004

300,294

8. Total sum of taxes of all types paid broken down by country (in thousands of reais).

2002

373,032
3,077
1,964
1,954
380,027

2003

490,316
6,631
2,173
2,964
502,084

2002

2003

2004

531,346
9,200
3,156
4,103
547,805

2004

3. Cost of all goods, materials, and services purchased (in thousands of reais).

Cost of all goods, materials and services purchased

2002
679,367

2003
942,240

2004
1,365,906

9. Subsidies received broken down by country or region.

Subsidies

4. Percentage of contracts that were paid in accordance with agreed terms, excluding agreed

penalty arrangements.

Percentage of contracts paid in accordance

Employees

2002
99.7%

2003
99.6%

2004
99.6%

5. Total payroll and benefits (including wages, pension, other benefits, and redundancy payments) broken down

by country or region (in thousands of reais).

Brazil
Argentina
Chile
Peru
Total Natura

Ratio of investments in training and operating costs

Ratio

2002
143,157
4,967
3,579
3,368
155,071

2002
1.16%

Investments in the education and training of employees (in thousands of reais)
2002
5,618

Investiments(2)

2003(1)
167,088
4,514
2,620
3,561
177,783

2003
1.16%

2003
7,053

2004
233,194
5,066
4,343
4,688
247,291

2004
0.99%

2004
7,875

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1. The 2003 payroll amounts, broken down per operation, were adjusted in this Report as the data previously released were preliminary. We point out the

fact that the total 2003 payroll amount did not change.

2. The criteria to account for investments in the education and training of employees were reviewed and became more comprehensive.To meet these new criteria,
the amounts related to the previous years, stated in this Report, were changed and do not correspond to the amounts released in the previous editions.

Investors

6. Distributions to providers of capital broken down by interest on debt and borrowings, and dividends on all classes

of shares, with any arrears of preferred dividends to be disclosed (in thousands of reais).

Interest on debts and borrowings
Dividends and interest on capital(1)
Total

2002
134,004
14,651
148,655

2003
64,439
60,331
124,770

2004
33,834
216,352
250,186

1. The 2002 and 2003 figures refer to dividends and interest on capital of Natura Participações.

10. Donations to community, civil society, and other groups broken down in terms of cash and in-kind per type

of group .

Natura is disclosing the amounts invested in corporate responsibility in 2004 in a different way from that adopted in
the previous years in order to present more complete data (see Corporate Responsibility Matrix – Main Indicators, page
25).

11. Total spent on non-core business infrastructure development.
In 2004, 860,000 reais was spent in initiatives such as: expansion of the capacity of treatment of effluents by the Effluent
Treatment Station in Cajamar; improvements in the treatment system to increase efficiency in the removal of the organic
load at the Effluent Treatment Station in Itapecerica da Serra; improvements in the drainage of rain water; installation of a
vacuum pump for the Núcleo de Aprendizagem Natura (Natura Learning Center) in order to reduce energy use; installation
of lighting sensors; drilling and installation of wells for monitoring the soil; forestry renewal project and implementation of a
composting center.

Indirect Economic Impacts

12. The organization’s indirect economic impacts.
One of the most relevant indirect economic impact generated by Natura is the wealth generated to the almost 433,000
independent Sales Representatives, as shown by the graph below. Accordingly, it is worth noting the significant distribution
of wealth to other stakeholders, such as employees, shareholders and the government (see Main Indicators, page 20).

Distribution of Wealth (1)(2) to Independent Sales Representatives (in millions of reais)

Brazil

International Operations (Argentina, Chile and Peru)

2002

2003

2004

14.3

19.7

27.6

571.2

776.0

1,031.8

1. Amount estimated based on recommended sales prices.

2. The 2002 and 2003 amounts were adjusted because they have been aligned with the criteria of the Associação Brasileira de Empresas de Venda Direta

(Brazilian Association of Direct Selling Companies), ABEVD.

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Environmental Performance Indicators
The answers to these indicators take into consideration the operations in Brazil and the international operations of Natura
(Argentina, Chile and Peru). It is worth noting that the company has a productive operation only in Brazil. Abroad, it operates
with product sale and distribution centers.This means that the operation in Brazil, due to its size and complexity, is still the
center of the company’s work. For the answers that do not explicitly state the operations to which they refer, the reader
should consider the content to be valid for all international operations.

Materials

13.Total materials use other than water, by type.

Brazil

Material use – kilograms
Material use – liters

2002
NA
NA

2003
NA
NA

2004
22,736,597
13,568,344

Note:The analysis of the 2004 amounts showed that the system that determines the figures presented in 2002 and 2003 was vulnerable.Therefore, the figures
for those years are not comparable with those for 2004. For this reason, the amounts from the previous years are not available.

International operations
Not applicable. As the operations abroad are commercial, the amount of materials used is not significant when compared
with those of the industrial operation in Brazil.

14. Percentage of materials used that are wastes (processed or unprocessed) from sources external

to the organization.

Brazil

Materials – metric tons

2002
1,590

2003
1,956

2004
2,547

Note: This number was calculated taking into consideration the average reuse of potential waste from our suppliers.

International operations
Not applicable, as the operations abroad are commercial.

Energy

15. Direct energy use segmented by primary source (joules).

Brazil

(joules)
Primary electricity source(1)
Self-generated electricity (diesel-powered generator)
Diesel oil used in generators
LPG use(2)

Total energy use of the energy matrix (joules)(3)
Energy use of the energy matrix
per unity sold (kjoules/unit)(3)(4)

2002
7.54 x 1013
6.55 x 1011
22.6 x 1011
19.4 x 1012

2002
9.70 x 1013

2003
7.47 x 1013
5.02 x 1011
17.3 x 1011
23.5 x 1012

2003
9.99 x 1013

2004
7.9 x 1013
2.88 x 1011
9.95 x 1011
24.65 x 1012

2004
10.47 x 1013

1,025.7

785.2

603.7

1. Even showing a growth of 28% in produced items in 2004, Natura showed efficiency in energy use, increasing by only 5.75% the consumption of electric energy

(primary electricity source) in relation to 2003.This result is due to the many energy use reduction initiatives that may be seen in indicator 17.

2. Calorific value: LPG = 11,500 Kcal/kg; gasoline = 11,277 Kcal/kg (1 Kcal/kg = 4,186.8 joules/kg).

3. The energy matrix is made up of the total energy that Natura uses that comes from various sources (electric, diesel and LPG).

In 2004, there was a reduction of 23% in the use of energy per unit sold, particularly due to the economy of scale and the implementation of alternatives for reducing
consumption.

Target for 2005 To reduce by 5.5% the relative consumption of energy.

International operations
These data have not been determined, as their amounts are not considered significant in relation to the production activity
carried out in Brazil.

16. Indirect energy use.
Not applicable. Natura does not purchase energy products for its production process.

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Natura Sales Representatives(1) (in thousands)

Brazil

Argentina

Chile

Peru

2002

2003

2004

3
4

5
8

307

355

407

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1. The figures refer to the available Sales Representatives – those who placed at least one order in the last four sales cycles.

Economic Targets assumed in the Natura 2003 Annual Report

indicator
10

Target assumed in 2003
To raise net funds amounting to R$ 2.5 million.

Results
☺ Target achieved.

In 2004, the fund
raising, of 3 million reais, was the
highest since the creation of the
program and exceeded the target set
for the year by 20%.

17. Initiatives to use renewable energy sources and to increase energy efficiency.

Brazil
Among the initiatives to rationally use energy, Natura:
• Mapped the benefits and the performance of the solar energy system installed in 2003 for the lighting of the parking lots
and bus stops on Rodovia Anhangüera. Additionally, it prepared a project to increase the use of solar energy to heat
water at the restaurants.

• Conducted a study on Green Building (quantitative evaluation that uses international concepts to compare the current
situation with a benchmark), based on four criteria: consumption of resources, environmental loads, quality of the internal
environment and quality of services).

• Replaced the cooling gas of the air conditioning system by Isceon gas, which is ecologically correct and reduces the use

of electric energy.

• Took measures to improve lighting and installed motion sensors in the administrative office rooms.
• Applied reflective paint on the service lane in Cajamar to reduce the electric energy use by the air conditioning system.
• Kept the Energy Reduction Brigade, a group of employees responsible for identifying possibilities for reducing energy

expenses.

International operations
There are not initiatives of Natura to increase energy use efficiency in Argentina. In 2005, all operations will establish targets
to this end.

18. Other indirect (upstream/downstream) uses of energy and their implications, such as organizational travel, product

lifecycle management and use of energy-intensive materials.

Not available. Natura has not been determining on a systematic basis the impact of meetings held and trips taken because
of its operations.

Water

19. Total water use.
Brazil

Total water use (cubic meters)(1)
Water use per unit sold (liters/unit)(2)

2002
115,741
1.22

2003
110,499
0.87

2004
116,367
0.67

1. Even with a growth of 28% in the number of units produced, the consumption of water increased only 5.3% in relation to 2003. This result is due to the
increase in the reuse of treated water for watering the gardens, cleaning metal structures, external walls and streets of the Cajamar facilities, as it can be
seen in indicator 22.
In 2004, there was a reduction of 23% in the consumption of water per unit sold, which shows the efficiency of the company’s production processes and
the search for excellence in managing natural resources.

Target for 2005 To reduce by 1% the relative consumption of water.

International operations
These data have not been determined, as their amounts are not considered significant in relation to the production activity
carried out in Brazil.

20. Water sources and related ecosystems and habitats significantly affected by use of water.
Brazil
As there is no public water supply system, all the water used in Cajamar and Itapecerica da Serra comes from local tube wells.
The annual withdrawal of water respects the water table replenishment criteria, observing the maximum and minimum outflow
determined during the drilling and testing and using the natural resources in a sustainable way. Additionally, in the Brazilian
operations, Natura has been developing many initiatives to reduce consumption and increase the reuse of water (on these
initiatives, see indicators 19, 21 and 22).
International operations
The offices use water from the public supply system.

21. Annual withdrawals of ground and surface water as a percentage of annual renewable quantity of water available

from the sources.

Brazil

Withdrawal

2002
65.7%

2003
58.2%

2004
70.1%

Note: The increase of 11.9 percentage points in the withdrawal of ground water is due, mainly, to the increase of 28% in Natura’s production and to the
presence of an additional 481 employees and 3,000 visitors in the Cajamar unit.This increase was partially offset by a higher use of treated water for watering
the gardens and cleaning metal structures and external walls of the Cajamar facilities.
International operations
Not applicable. As they are commercial operations, Natura does not withdraw ground or surface water and uses water from
the public supply system.

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22. Total recycling and reuse of water.
Brazil

Water recycled and reused (cubic meters)(1)
Percentage of reuse in relation to the total water

treated by the Effluent Treatment Station

2002
5,172(2)

16%

2003
20,233

29%

2004
29,065

39.5%

1. Since 2002, Natura reuses treated water (originated in its effluent treatment system) for washing streets and external walls, in water mirrors and for watering

plants.
In 2002, the total amount of water recycled and reused was 5,172 cubic meters, as informed in this Report and not 6,509 cubic meters as shown in the 2003
Annual Report.

Target for 2005 Increase from 39.5% to 49% the percentage of treated water reused.
International operations
Not applicable. As they are commercial operations, Natura does not reuse water.

Biodiversity

23. Location and size of land owned, leased or managed in biodiversity-rich habitats.
Although local biodiversity-rich habitats have not been detected, Natura is located in two regions that have great
Itapecerica da Serra and Cajamar, respectively in a springs protection area and in an
environmental importance:
environmental protection area, both within the Atlantic Forest’s biome.

24. Description of the major impacts on biodiversity associated with the organization’s activities and/or products

and services in terrestrial, fresh-water, and marine environments.

Natura uses in its products raw materials originating from nature, such as extracts, oils and compounded materials.The areas
that supply raw materials developed with Brazilian or exotic species cultivated in Brazil are selected by Natura based on
traceability and sustainability in order to ensure a minimum environmental impact.

The preservation of biodiversity – genetic diversity, diversity of species, ecosystems and processes of natural forests – is
stimulated when it provides benefits and products that can generate economic resources, not depleting the environment and
strengthening local social relations.

The environmental impacts arising from forest management activities are analyzed in many aspects:
Biotic Mean(1) – Positive impact, taking into consideration that the harvest does not exceed the capacity to support the
area and it can also favor the renewal of species and, consequently, the forest succession dynamics(3); contribution to the
preservation of the genetic diversity maintained by traditional populations (on farm preservation(3)).
Physical Mean(4) – Positive impact on the soil as the maintenance of the forest coverage helps the preservation of this
resource.The removal of forest biomass (frequent harvests) has a negative impact on the recycling of nutrients(5).
Anthropic Mean(6) – Positive impact, especially related to the establishment of the rural worker, the creation of jobs and the
contribution to local development.The cultural aspect is strengthened as knowledge obtained via inherited tradition is valued.

Two processes are adopted to ensure the sustainable use of natural resources: the identification of the origin of raw materials
and the program for the certification of raw materials for two types of management, non-wood forestry and agricultural.

Non-wood forestry management – Its main objective is to ensure the continuous supply of raw material and minimize the
environmental impacts of this activity, maintaining the capacity of sustainable production.

A forestry certification is structured to evaluate the process for the extraction of raw materials and the type of management
used in accordance with the Principles and Criteria of the Forest Stewardship Council, FSC, which take into consideration
the social, economic and environmental aspects.

Agricultural management – It privileges good production practices, including agroecological concepts.

An agricultural certification is structured to evaluate the process for the agricultural production of the materials in
accordance with the Principles and Criteria of the Sustainable Agriculture Network, SAN and Instituto Biodinâmico
(Biodynamic Institute), IBD.

The Natura process for the certification of raw materials is divided into three phases:

Phase I: Internal process for the identification and selection of a potential supply area. This phase is characterized by the
typology of producers, the organization of the community and the existing type of management (agricultural or forestry).

Phase II: Preparation of socioenvironmental analyses, botanical inventories and a management plan.

Phase III: Implementation of the management plan and an external audit for certification.

1. Biotic mean: Flora (original vegetation, seed deposit on the soil, natural regeneration), fauna (vertebrates and insects), and microorganisms.
2. Forestry Succession:This is a process of progressive change in the proportion and composition of individuals from a vegetal community until this community

reaches a state of dynamic equilibrium with the environment.

3. On farm preservation: This is a strategy that complements ex situ preservation and is characterized as one of the forms of genetic preservation of
agrobiodiversity; its particularity is the fact that it involves genetic resources that are cultivated by the traditional populations, who have a great diversity of
phytogenetic resources and a broad knowledge of them.
4. Physical mean: Air, water resource and edaphic resource.
5. Cycling of nutrients: Movement of elements and inorganic compounds from the environment to the organisms and from these organisms back to the

environment, by way of biogeochemical cycles.

6. Anthropic mean: Settlement of the rural worker in the countryside, jobs, regional development, landscaping.

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Status of the raw materials

State
Amazonas

PHASE I
End
X

Beginning
X

Raw materials
Andiroba
Carapa guianensis
Buriti
Mauritia flexuosa
Cacao
Theobroma cacao
Lemongrass
Cymbopogon citratus
Chamomile
Chamomilla recutita
Brazil nut
Bertholletia excelsa
Copaiba
Copaifera spp
Breu
Protium pallidum
Cumaru
Dipteryx odorata
Cupuacu
Theobroma grandiflorum
Guarana
Paulllinia cupana
Rosewood
Aniba ferrea
Macela
Achyroclines satureoides
Passion fruit
Passiflora edulis
Yerba Maté
Ilex paraguariensis
Murumuru palm
Astrocaryum murumuru
Surinam cherry
Eugenia uniflora
Flatsedge
Cyperus articulatus

Piauí

Bahia

São Paulo

Paraná

Amapá

Em avaliação

Rondônia

Bahia

Amazonas

Paraná

Minas Gerais

Amazonas

São Paulo

Pará

Rio Grande do Sul

PHASE II
End

Beginning

PHASE III

Beginning

End Notes

Traditional management

X Agroforestry system

X Cultivation

Cultivation

X Traditional management

Traditional management

Agroforestry system

X Organic cultivation

Traditional management

Cultivation

X Traditional management

Traditional management

X Organic cultivation

Cultivation

Target for 2005 Of the total 35 native or exotic species obtained in Brazil, which produce the natural raw materials used by
Natura (essential oils, fixed oils and extracts), eight had their certification completed in 2004 (23% of the total). In 2005, the target
is to include another five in the phase III of the certification process, reaching a total of 13 certifications (37% of the total).

25. Total amount of land owned, leased, or managed for production activities, or extractive use.
The Natura Ekos line purchases its natural raw materials in areas leased, rented or managed by rural communities or
producers. Mindful to ensure that the area is exploited in a sustainable way, Natura tries, in addition to ensuring a sustainable
exploitation model, to characterize the environmental importance of these areas.
In 2004, the company did not purchase any additional area for its production activities.

26. Amount of impermeable surface as a percentage of land purchased or leased.

Brazil
In 2004, due to the construction of the new vertical warehouse, there was a small increase in the built area of the Espaço
Natura (Natura Space) in Cajamar, which is now 81,573 sq. m. Consequently, the impermeable surface now represents
approximately 12.6% of the total land. In the Itapecerica da Serra unit, there was no change in the size of the built area,
which remained at 14,366 sq. m (approximately 15% of the total land area).

International operations
Not applicable.

27. Impacts of activities and operations on protected and sensitive areas.
After analyzing the list of the six protected area categories of The World Conservation Union, IUCN, we identified two
Natura partner areas that have the characteristics of the sixth category, which is called “Managed resources in protected
areas: protected areas for the sustainable use of natural ecosystems”.These partners are the Extractivist Reserve of Central
Juruá (located in the State of Amazonas) and the Sustainable Development Reserve of Iratapuru (located in the State of
Amapá). They were both created by the federal and state governments to promote the sustainable exploitation of locally
available resources, generating wealth and jobs for the existing local populations.

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The activities related to the purchase of raw materials that are developed in the protected and sensitive areas mentioned in
indicator 25 are monitored by the responsible environmental agencies (Instituto Brasileiro do Meio Ambiente e Dos Recursos
Naturais Renováveis (Brazilian Institute of the Environment and Renewable Resources), Ibama, and the State Environment
Department) and are complemented by the certification program. In addition to the preparation of management plans, the
greatest benefit of the certification process is a monitoring of the impact of the management activities on an available resource.
These strategies help mitigate the negative impacts and potentiate the positive ones. In relation to its production activities,
Natura did not verify any environmental impact in protected and sensitive areas in 2004.

28. Changes to natural habitats resulting from the organization’s activities and operations and percentage of habitats

protected or restored.

According to the information reported in indicator 27, Natura did not verify any environmental impact arising from its
activities and operations in natural habitats in 2004.
Even so, it developed, in 2004, a forest renewal project at the Cajamar and Itapecerica da Serra units. The objective is to
start planting native tree species in 2005 in order to value up and renew the natural landscape in the areas where the
company operates (see further details in indicator 29).
The preparation and the accomplishment of the management plans of two protected areas – the Extractivist Reserve of
Central Juruá and the Sustainable Development Reserve of Iratapuru – in partnership with Natura promote the restoration
of the balance in these two ecosystems.

29. Objectives, programs, and targets for protecting and restoring native ecosystems and species in degraded areas.
Natura uses raw materials originating from degraded areas and recognizes the importance of restoration projects as an
essential factor for the preservation and management of the soil. One of the raw materials used by Natura, the cupuacu,
originates in the State of Rondônia, from the project of Reflorestamento Econômico Consorciado e Adensado (Economic,
Associated and Planted Reforestation), Reca, which is characterized as a production system (agroforestry) that provides for the
restoration of degraded areas and, at the same time, promotes the preservation of biodiversity.
Additionally, Natura prioritizes the work with traditional communities, recognizing the importance of these populations as
agents in the process to preserve biodiversity.

Brazil
In 2004, the company started a Project for Forestry Restoration at the Cajamar and Itapecerica da Serra units, where it operates,
in order to change the structure of the landscape, increase the diversity of the species and improve the ecological relations:
• In Cajamar, the objective is to establish an ecological-economic zoning (ecozoning)(1) of a green area, currently covered by
eucalyptus planted by the former owner of the land. Certain premises are considered: the preservation of natural resources,
the future use for the expansion of the operations and the use of green areas for environmental education activities. In
order to replace, beginning in 2005, part of the planted forest, some species of Brazilian flora will be used, in particular the
embauba (Cecropia pachystachya), Golden Trumpet Tree (Tabebuia chrysotricha) and pink peroba (Aspidosperma polyneuron).
• In Itapecerica da Serra, the aim is to enrich a green area that already boasts an exuberant diversity of native species. Among
the species to be planted beginning in 2005 are the cabreuva (Myroxylum peruiferum), guapuruvu (Schizolobium parahyba)
and the jatoba (Hymenaea courbaril var. Stilbocarpa).

• In addition to these projects, Natura promotes, by means of partnerships, the following projects: Expedição Energia Positiva
para o Brazil (Positive Energy Expedition for Brazil), Projeto de Educação e Recuperação Ambiental da Mata Atlântica no
Vale do Rio Doce (Project for Environmental Education and the Recovery of the Brazilian Atlantic Forest in the Rio Doce
Valley), Projeto Canguçu (Cangucu Project), Jardim Botânico do Rio de Janeiro (Botanical Gardens of Rio de Janeiro), and
Projeto Pomar (Orchard Project).

1. Ecological-economic zoning (ecozoning): aims to geographically delimit territorial areas for the purpose of establishing special use systems in order to

promote a harmonious integration between economic, environmental and social interests.

International operations
There are no similar initiatives in the other operations as the company does not own protected areas abroad. Additionally,
the policy of support and sponsorship for environmental preservation projects has not been defined.

30. Number of IUCN Red List species with habitats in areas affected by the organization’s operations.
The two species used by Natura that are part of The World Conservation Union (IUCN) Red List and the Official List of
Endangered Flora of the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (Brazilian Institute of the
Environment and Renewable Resources), Ibama, are the Yerba Maté (Ilex paraguariensis) and the Brazil nut (Bertholletia excelsa).
The areas that supply these raw materials are certified by the Forest Stewardship Council, FSC, ensuring a sustainable harvest.

31. Business units currently operating or planning operations in or around protected or sensitive areas.
In accordance with the information in indicator 23, Natura operates in two regions of environmental importance in the State
of São Paulo: Itapecerica da Serra and Cajamar located, respectively, in a springs protection area and in an environmental
protection area, both within the Atlantic Forest’s biome. However, their operations meet the applicable legal requirements
and seek sustainable development (see also indicators 25 and 27).

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Emissions, Effluents and Waste

32. Greenhouse gas emissions (CO2, CH4, NO2, HFCs, PFCs e SF6) (metric tons).
During the evaluation of the environmental aspects and impacts, the existence of significant sources of greenhouse gas emissions
during the production process was not identified. Regarding the business model (direct sales), we realize that the distribution of
products by road transportation is a source to be monitored.Therefore, in 2005, the process for determining these atmospheric
emissions will begin in order to find out the current stage and identify measures that may be taken to minimize these emissions.

33. Use and emissions of ozone-depleting substances.

Emission of ozone-depleting substances

2002

2003

2004

N/A

Note: HCFC, R12 and R22 gases (which, in 2003, represented 1% of the total gases used at Natura) were replaced by Isceon gas, which is non-ozone depleting.

34. NOx, SOx and other significant air emissions by type.
Brazil
As 75.5% of the energy use by Natura comes from a hydroelectric source and 23.6% from the use of LPG, the emission of
substances such as NOx and SOx was considered “non-significant”.

International operations
Not applicable. As the operations are of a commercial nature, the energy used in these places come from the public system
and the emission of gases is considered insignificant.

35. Total amount of waste by type and destination (metric tons).
Brazil

Type of waste

Class I waste
Class II-A waste
Class II-B waste

2002

1,022.08
1,626.18
532.98

2003

753.13
2,501.98
377.58

2004

909.09
3,225.53
832.98

Note: In accordance with the NBR 10004/2004 standard: class I waste is hazardous waste (obsolete cosmetic products, medical and laboratory waste and
alcohol); class II-A waste is non-inert waste (physicochemical and biological sediment from the effluent treatment station, paper, cardboard, waste from sweeping,
organic and domestic waste); and Class II-B waste is inert waste (glass, metals, plastic and debris).

Destination

Incinerated(1)
Disposed of in landfill sites(1)
Recycled(2)(3)

2002

5.52%
31.91%
62.58%

2003

6.40%
24.40%
69.20%

2004

5.43%
21.20%
73.41%

1. The reduced incineration of waste and disposal in landfill sites was the result of initiatives to prioritize recycling.
2. As from this Report, all data referring to reused and recycled waste are grouped and historical data are adjusted.
3. The increased recycling of waste in 2004 is due to the implementation of improvement initiatives – forwarding waste from the restaurant, garden pruning,

sweeping and biological sediment for composting – as well as to the separation of other recyclable waste at the Itapecerica da Serra unit.

Value of solid waste per item sold (g)

2002

2.99

2003

2.92

2004

2.56

Target for 2005 Reduce the generation of waste by unit sold from 2.56 g in 2004 to 2.38 g.

International operations
These data were not determined due to the fact that the amounts are not considered significant when compared with the
production activity, which is performed in Brazil only.

36. Significant discharges to water by type.

Brazil

Total volume of treated effluents (cubic meters)

2002
65,647

2003
79,580

2004
82,786

Note: The increase of 4.03% in the discharge of water in 2004 in relation to the previous year is due to the 28% increase in Natura’s production, particularly
in the shampoo and cream plants, which generate large amounts of effluents in their cleaning processes.
Target for 2005 To keep the monthly average efficiency rate in the removal of the organic load from the effluents in
Itapecerica da Serra above 90% whereas the minimum efficiency rate (removal rate required by the legislation) is 80%.

International operations
Not applicable. As the activities performed in these operations are of a commercial nature, the offices use the public system
for the treatment of effluents.

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37. Significant spills of chemicals, oils, and fuels in terms of total number and total volume.
In 2004, there were no occurrences of significant spillage of chemicals that could have compromised the quality of the soil
and surface and/or underground water at the company’s production site.
Note: The Natura Emergency Service Plan is operated at the site, providing, registering and monitoring information that promote corrective and preventive
measures.The plan has not been used to correct any occurrence of significant spillage.

38. Other relevant indirect greenhouse gas emissions (CO2, CH4, NO2, HFCs, PFCs e SF6) (metric tons)(1)(2)
Brazil

Emission of CO2 during distribution – gasoline
Emission of CO2 during distribution – diesel
Emission of CO2 during distribution – alcohol
Emission of other gases

2002
434.33
6,633.86
20.97
NA

2003
521.20
7,960.63
25.16
NA

2004(3)
NA
NA
NA
NA

1. The calculation of the emission of CO2 was based on: gasoline = 1.76 kg CO2 x liters of gasoline; diesel = 2.64 kg CO2 x liters of diesel; alcohol = 0.85 kg

CO2 x liters of alcohol.

2. Natura understands that relevant indirect gas emissions originate from its distribution.The company has an outsourced fleet.The data are obtained by way

of the consumption of fuel informed by the transporting companies for the distribution of products.

3. As we adopted a new transport strategy in 2004, some measurements of fuel use and emission of pollutants need to be restructured, an activity that will

be prioritized in 2005, already using the new established transportation model.

International operations
Natura did not conduct this survey on its transporting companies abroad.

39.Water sources and related ecosystems and habitats significantly affected by discharges of water and runoff.

Brazil
The Espaço Natura (Natura Space) in Cajamar discharges its effluents into the Juqueri river, which is the main affluent of
the right margin of the Tietê river in the State of São Paulo. In Cajamar, an Effluent Treatment Station is in operation.This
has a physicochemical and biological treatment system and fully meets the applicable legal requirements (Brazilian
Environment Council – Conama Resolution Nº 20, Article 21 and State Executive Order 8468/76, Articles 12 and 18).
As the Espaço Natura in Itapecerica da Serra is in a springs protection area and produces only sanitary sewage, it
infiltrates its effluents in the soil after a treatment, in a conventional station, that significantly reduces the organic load of
the effluent generated.

International operations
Not applicable. As the operations are of a commercial nature and carried out only in urban areas, there are no affected
sources of water.

Suppliers

40. Performance of suppliers relative to environmental components of programs and procedures described in

response to governance structure and management systems section.

Brazil
The evaluation of the performance of suppliers regarding strategic issues for sustainability has been carried out by way of a
relationship program that started in 2003. In 2004, this program started to be called QLICAR, encompassing aspects such as
Quality, Logistics, Innovation, Cost/Contract, Service and Traceability.The sustainability aspects, which include the environment
and corporate responsibility, are approached in the Quality aspect.
The objective of this program, which is also extended to transporting companies, is to establish a work process that gets
closer to suppliers. Natura also establishes with its suppliers commitments in contracts that contain clauses on compliance
with legal environmental requirements.
Additionally, the NBR ISO 14001 certification process, completed at the beginning of 2004 for operations at the Cajamar
and Itapecerica da Serra units, guided Natura in the determination of the environmental risk management system of the
company and its suppliers. As one of the results of this process, in the same year Natura started an environmental
evaluation of new suppliers and of the suppliers considered to be “environmentally critical” (suppliers of raw materials
and packaging, environmental service providers, transporting companies with diesel-powered fleets, among others). This
was done by way of an analysis of all of the documentation related to environmental licensing and to the questionnaires
filled out by them.
Of the total suppliers analyzed:
• 19% were evaluated as A (meet between 90% and 100% of the requirements).
• 24% were evaluated as AB (meet between 80% and 89% of the requirements).
• 29% were evaluated as B (meet between 60% and 79% of the requirements).
No supplier was evaluated as C (meet less than 60% of the requirements). There are also 28% of the suppliers that have
not been evaluated because they have not yet sent the required documentation. Natura will focus its efforts in 2005 on
obtaining the remaining documentation and completing the environmental evaluation. (See also: Main Environmental
Indicators, page 22, and target assumed in the 2003 Natura Annual Report, page 90.)

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Compliance

43. Incidents of and fines for non-compliance with all applicable international declarations/conventions/treaties, and

national, sub-national, regional, and local regulations associated with environmental issues.

Incidents or fines

2002
0

2003
0

2004
0

Note: Natura was not fined in 2004 for non-compliance with applicable legal environmental requirements. With the implementation of the Natura
Environmental Management System, Sigan, all legal requirements related to the significant environmental aspects and impacts are monitored in the operations
in Brazil. This enables a constant interaction between departments for the control of activities, protecting the company from any wrongdoing. Additionally,
Natura also monitors the progress of legislative bills with the creation of internal discussion forums, allowing for a proactive posture by the company regarding
future situations.

Transport

44. Significant environmental impacts of transportation used for logistical purposes.
Natura understands that one of the main environmental impacts of its activities arises from the atmospheric emission
originating from the distribution of its products.

Brazil
Natura continues to evolve its review of its transport model by hiring transportation companies with newer fleets (reducing
the level of atmospheric emissions), inspecting the level of black smoke of hired vehicles, establishing new routes, streamlining
shipments and, consequently, reducing the number of trips. The result is a greater efficiency in the use of fuels (the data
resulting from the emission of gases in the distribution of the company’s products may be seen in indicator 38).

International operations
From 2005 onwards, Natura will define, in these operations, the calculation of the environmental impact caused by the
distribution of its products.

Overall

45. Total environmental expenditures by type (in thousands of reais).
Natura is disclosing the amounts invested in corporate responsibility in Brazil, including the environmental investments
related to 2004, in a different way from that adopted in previous years.This is in order to present more complete data.The
amounts are presented on page 25 of this Report.

Target for 2005 a) Disclose and employ the procedures of the quality system established with suppliers. b) Evaluate 100%
of the documentation of all “environmentally critical” suppliers and new suppliers. c) Of the suppliers evaluated in 2004,
to increase by 30% those classified as A.

International operations
From 2005 onwards, Natura will analyze similar initiatives for these other operations.

Products and Services

41. Significant environmental impacts of the principal products and services.
To grow in a sustainable way implies changing production and consumption standards. Aware that its packages have a
significant impact on the lifecycle of its products, Natura completed in 2002 the first stage of the packaging environmental
inventory project by way of the use of the Life Cycle Assessment, LCA(1) methodology. In 2003, the LCA project was
included in the formal process for the launch of the company’s products. In 2004, following one of the Natura Environmental
Management System procedures, no packaging design decision for the launch of products was made without an assessment
of the comparative impact between the various alternatives.
Therefore, before it is launched, all new types of packaging undergo a preliminary environmental impact study using the LCA
methodology, in order to supply information for decision making.
In 2004, the Environmental Impact Model Manager’s Office was created within the Innovation Vice President’s Office. This
new office will be responsible for the running of projects related to the determination, evaluation and mitigation of the
greatest environmental impacts during the life cycle of Natura’s products.
The evolution of some environmental impact indicators is monitored on a monthly basis by the company.
In 2004, the controlled indicators were:
Percentage of products launched after the packaging LCA: The target for each month was 100%.The company achieved
the target in all periods.
Percentage of the portfolio of products whose packaging LCA has been calculated and documented: The target for 2004
was 100% of the portfolio and the company closed the year with 100%.
Total Natura impact: Natura uses in its LCA studies the Life Cycle Inventory of available databases treated in accordance
with the Eco-Indicator 99(2) methodology. Natura’s target for 2004 was to reduce the average environmental impact of
packaging by reducing the weighted average, measured by business unit, as well as the total figure, which must be lower than
or equivalent to that calculated in 2003.The 2004 x 2003 analysis shows that:
• The weighted average impact per invoiced unit grew 1%.
• The total impact (absolute number) increased 45%.
The increase in total impact is due to the growth in the number of items sold, of 36%.
1. Natura uses Life Cycle Thinking, which is based on the product Life Cycle Assessment, LCA, and on the Design for Environment, DfE concept. This is an
integrated approach of concepts, techniques and procedures to access the environmental, economic, technological and social aspects of products and
organizations with an aim to continuously improve the lifecycle prospect. DfE (ecodesign) provides guidance on the systematic integration of environmental
considerations in the project of products and processes.

2. Bibliography: GOEDKOOP, Mark; SPRIENSMA, Renilde;The Eco-Indicator 99 – A damage oriented method for Life Cycle Impact Assessment, 2nd edition. Pré

Consultants B.V., 2000.

Target for 2005 a) Ensure that all products launched have their packages analyzed by the life cycle assessment (LCA)
tool. b) Reduce by 2%, in relation to 2004, the weighted average of the environmental impact of Natura product
packages. c) Determine environmental performance indicators for the products and add information related to these
indicators on the labels. d) As there is no available model for the life cycle assessment of raw materials in the cosmetic
industry, Natura will develop a model in 2005. It will be applied on the Ekos shampoo line and subject to international
analysis.

42. Percentage of the weight of products sold that is reclaimable at the end of the products’ useful life and percentage

that is actually reclaimed.

Brazil

Percentage of the weight of products sold

that is reclaimable at the end of the products’ life cycle

Percentage that is actually reclaimed(2)

2002

NA
NA

2003

NA
NA

2004

38%(1)
NA

1. Of the whole mass of packaging of products sold by Natura, 97.5% are recyclable and, therefore, could be reclaimed both in Brazil and abroad. This is
equivalent to 38% of the whole mass sold (content and package).The content of Natura products is washable or perfuming and cannot be reused at the
end of its useful life.

2. We do not have a program to quantify the percentage of what is actually recovered.

International operations
Information on the recovery of packaging was not consolidated.

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Targets assumed in the Natura 2003 Annual Report
Indicator

Target Assumed in 2003

To reduce by 15% the consumption of energy per item
separated upon shipment.

Increase from 29% to 39% the percentage for reusing
treated water.

To ensure sustainable sources for 14 plants and, for 8 of
these plants, to carry out field certification (phase III
concluded).

Replace or discontinue use of the illipe (Shorea stenoptera)
species.

Reduce by 5% the amount of solid waste per item
separated (in 2003, Natura generated 2.4 g of solid waste
per item separated).

The organic load (biochemical demand of oxygen) that is
present in the effluents discharged by industries accounts
for a large part of the pollution generated. In that respect,
Natura will increase by 10% the annual average efficiency
in the removal of organic load from the effluents
discharged in Itapecerica da Serra.

In order to meet the requirement of the Natura
Environmental Management System, Sigan, 100% of the
environmental documentation of suppliers whose
activities may cause impact on environment will be
evaluated.

a) To carry out a packaging Life Cycle Analysis (LCA) study
on 100% of the products launched and cover 100% of the
packaging of the product portfolio that will undergo LCA
studies. b) Expand the biodegradability program, trying to
develop an expertise center in evaluation methods for
other raw materials, in addition to those already existing
for the surface-active agents. c) To reduce the average
environmental impact of packaging by reducing the
weighted average of the environmental impact of
packaging measured by Business Unit, as well as the total
figure, which must be lower than or equivalent to that
calculated in 2003.

Results
☺ Target achieved. In 2004, Natura reduced by
21.3% the relative consumption of energy per
item separated upon shipment due to the
following reasons: economy of scale, less use of
air conditioning and the implementation of
alternatives for the reduction of consumption.
☺ Target achieved. 39.5% of recycled water was
used.The increase of 10.5 percentage points is
due, mainly, to the increased reuse of treated
water for watering the gardens, cleaning metal
structures, external walls and streets of the
Cajamar facilities.

☺ Target achieved. A sustainable source was
ensured for 14 plants (10 species of Flora
Medicinal and 4 of Natura) and 8 species were
certified in the field.

☺ Target achieved. Use of the illipe (Shorea
stenoptera) species was discontinued.

☺ Target achieved.

there was an
In 2004,
increase of 32% in the amount of separated
items and only 19% in the total generation of
waste, which meant a reduction of 10% in the
weight of waste per item separated.

☺ Target achieved. The efficiency in the removal
of organic load from the effluents discharged in
Itapecerica da Serra increased 11.5%, reaching,
in the last quarter of 2004, 92.2% efficiency.

(cid:2) Target partially achieved. Of all of the critical
suppliers, 60% delivered all necessary
documentation, which was analyzed, 29%
delivered only part of the documentation
and 8% are being cut out. In 2005, Natura
will focus its efforts on obtaining the
remaining documentation and consequent
environmental evaluation.

(cid:2) Target partially achieved. a) Of the total
products launched in 2004, 100% underwent
a packaging LCA study and 100% of the
products sold at the end of the year showed
a life cycle study on their packages; b) The
group was
it has been
formed and
coordinated by
the Raw Materials
Committee, in the research and development
area with the objective to coordinate all
matters of the company related to raw
materials. Studies related to the different
classes of raw materials are being conducted.
The main information on biodegradability has
been surveyed and it has been verified that
there are no standard methods for certain
classes. c) The weighted average impact per
unit sold dropped 1% and the total impact
(absolute value) increased 45%. The stronger
total impact is due mainly to the increase in
the volume of items sold, of 36%.

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Social Performance Indicators
The answers to these indicators take into consideration the operations in Brazil and the international operations of Natura
(Argentina, Chile and Peru). It is worth noting that the company has a productive operation only in Brazil. Abroad, it operates
with product sale and distribution centers.This means that the operation in Brazil, due to its size and complexity, is still the
center of the company’s work. For the answers that do not explicitly state the operations to which they refer, the reader
should consider the content to be valid for all international operations.

Labor Practices and Decent Work
Employment
46. Breakdown of workforce, where possible, by region/country, status (employee/non-employee), employment type

(full time/part time), and by employment contract (permanent/fixed term or temporary).

Brazil

Employees
Temporary
Outsourced employees(1)
Trainees

Peru

Employees
Outsourced employees(1)
Trainees

Chile

Employees
Outsourced employees(1)
Trainees
Argentina

Employees
Outsourced employees(1)
Trainees

2002

2,641
88
752
24

60
7
0

54
5
0

129
5
0

1. Outsourced employees who are assigned to the company’s units are taken into consideration.

47. Net employment creation and average turnover by region/country.

Jobs created – Brazil

Jobs created in Cajamar
Jobs created in Itapecerica da Serra
Total

2002
1,685
956
2,641

2003

2,696
230
780
13

72
5
0

61
13
0

157
4
1

2003
1,681
1,015
2,696

2004

3,177
259
1,000
37

103
25
2

70
24
0

205
2
0

2004
2,044
1,133
3,177

Note: The whole sales force (sales promoters, sales managers, market manager, sales supervisors and field assistants) is accounted for in Itapecerica da Serra.

Employment creation and retention of employees

Brazil

Jobs created in the period
Employee turnover rate

Peru

Jobs created in the period
Employee turnover rate

Chile

Jobs created in the period
Employee turnover rate

Argentina

Jobs created in the period
Employee turnover rate

Internal job opportunities

Percentage of vacancies offered that were taken by employees

2002

-400
6.04%

0
16%

-4
7.40%

-5
NA

2002
56%

2003

55
6.53%

12
16%

7
7.40%

28
7.1%

2003
54%

Creation of work opportunities – number of Natura Sales Representatives(1) (in thousands) (em milhares)

Brazil
Argentina
Chile
Peru

2002
307
8
3
4

2003
355
10
3
7

1. The figures refer to the available Sales Representatives – those who placed at least one order in the last four sales cycles.

2004

481
7.81%

31
15.53%

9
20.20%

48
16%

2004
38%

2004
407
13
5
8

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48. Employee benefits beyond those legally mandated.
Brazil
• Programa Natura Educação (Natura Education Program): subsidies for employees in the form of scholarships for college
studies, and technical and language courses; subsidies for the children of employees in the form of scholarships for college
studies and technical courses; subsidies in the form of transportation vouchers and school material to the outsourced
employees who wish to complete elementary and middle school.

• Programa Construindo o Futuro (Constructing the Future Program): guidance and preparation for retirement and
savings incentives.The company deposits on a monthly basis 60% of the amount determined by each employee, which
varies from 1% to 5% of his or her salary.

• Programa Prosperar (Prosper Program): financial education for employees.
• Support for employees in adoption processes.
• Daycare center for the children of female employees (up to 3 years and 11 months).
• Pediatric service for the children in the daycare center.
• Medical health plan.
• Dental health plan.
• Psychological therapy service.
• Checkup: laboratory, biochemical and hematological tests, preventive diagnosis of cardiovascular diseases, imaging diagnosis,
nutritional orientation, preventive tests for women and men, appointments with specialists and general practitioners.
• Medical services in the company’s facilities for the prevention of metabolic conditions (diabetes, cholesterol and

triglyceride) and cardiovascular conditions (hypertension).

• Services for the prevention of work-related medical conditions: orthopedics, physiotherapy, global posture reeducation,

short psychotherapy and audiometry in the company’s facilities.

• Self-help program for those who wish to stop smoking.
• Telemedicine (electrocardiogram by telephone in emergency cases).
• Women’s Health Program: gynecological service in the company’s facilities.
• Pregnant Women Relationship Program: prenatal follow up in the company’s policlinic and course for pregnant
employees, outsourced employees and wives of employees. Laboratory tests without costs to employees and wives of
employees are also performed.

• Physical evaluation: made before the beginning of a systematic physical exercise in the company’s gym.
• Alternative therapies: acupuncture in the company’s facilities.
• Speech therapy.
• Dermatology.
• Therapeutic massages.
• Programa de Reeducação Alimentar (Learning New Eating Habits Program): nutritional service in the company’s facilities.
• Occupational exercise.
• Exercise gymnasium in the company’s facilities for all employees who are members of the Natura Sports and Social Club

in Cajamar and Itapecerica da Serra.

• Beauty Center at the Natura Sports and Social Club (Cajamar and Itapecerica da Serra): manicure, hairdresser, massage

and waxing for employees and outsourced employees.

• Services and facilities: in the convenience area, services such as sewing, dry cleaners, shoe repair, eyewear shop, insurance,

post office, pharmacy, and video rental are offered.

• Funeral allowance.
International operations
The public conditions for medical, dental and therapeutic services vary greatly between the countries. Natura provides
additional services in accordance with the local conditions and the benefits are, therefore, different to those offered in Brazil.
• Argentina: corporate medical care and group life insurance.
• Chile: Natura does not offer benefits other than those provided for by law in this country.
• Peru: corporate medical care, dental health care and personal liability insurance.

Labor and Management Relations

49. Percentage of employees represented by independent trade union organizations or other bona fide employee
representatives broken down geographically or percentage of employees covered by collective bargaining
agreements broken down by region/country.

Brazil

Employees represented

2002
100%

2003
100%

2004
100%

Note: Brazil is a signatory to the conventions of the International Labour Organization (ILO) that determine the need for the existence of union organizations
that represent employees in negotiations of their interest with employers. Natura observes the pertinent legislation, which requires its employees to be unionized.

International operations
Natura observes what is provided for in the legislation of the countries where it operates.

50. Policy and procedures involving information, consultation, and negotiation with employees over changes in the

organization’s operations.

Brazil
Information: The changes in the company’s operations are always communicated to all employees by way of internal
means of communication: notice boards in different locations within the company, Intranet, monthly newspaper (Ser
Natura Colaborador) and e-mail. In the Intranet, there is a page that shows updated information about the company’s
organizational structure.

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Natura also discloses relevant information about changes in the organization in meetings between employees and the CEO’s
office, in which all managers participate, and in the Scheduled Meetings between the senior management and their teams.
Consultation: The possibility of a change is broadly discussed in the many formal decision-making committees and forums
(described in indicator 51).
Negotiation: Natura establishes a broad process of communication and involvement with its employees whenever there
are major changes in operations. Minor changes are negotiated within the department forums.

International operations
As the other operations are smaller, the information (notice boards and Intranet), consultation and negotiation forums are
very simplified.

51. Provision for formal worker representation in decision-making or management, including corporate governance.

Brazil
Employees are encouraged to give their opinions, make suggestions and freely criticize the company.This can be done at the
Scheduled Meetings or by way of other channels, such as the Fale com a Natura (Talk to Natura) (see indicators 50 and 70).
One of these groups is the Quality and Cost Reduction Group, which aims to reduce costs in processes, products and
services while maintaining quality. All employees may send suggestions, for discussion, to the Quality department.
There is the structure known as Management of the Internal Customer Satisfaction Level, GSCI, which is aimed at the
operating department and made up of employees legitimately chosen by their colleagues and by the Human Resources
Department, to which the employees can forward suggestions for improvements.
There are also the Commissions for the Negotiation of the Profit and Results Policy, which are made up of elected
employees from within the company.

International operations
As the operations are smaller, these forums are simplified and are held in small meetings.

Health and Safety

52. Practices on recording and notification of occupational accidents and diseases, and how they relate
to the ILO Code of Practice on Recording and Notification of Occupational Accidents and Diseases.

Brazil
All accidents, whether with leave of absence or not, are recorded, accounted for, and analyzed to determine their causes
and to implement corrective or preventive measures. Additionally, accidents are registered with the Social Security Ministry,
with the Labor and Employment Ministry and with the union of the related job category. The analysis of the accidents is
coordinated by the Labor Security department and performed by a group made up of: security technician or work security
engineer, occupational physician, heads of departments, victim (if possible), witnesses, maintenance staff and representatives
of the employees within the Comissão Interna de Prevenção de Acidentes de Trabalho (Internal Commission for the
Prevention of Work-related Accidents).The analysis report is publicized to the heads of departments and employees so that
they can be aware of it and promote the implementation of corrective or preventive measures, which are discussed in the
meetings of the commission. There is also the Programa Quase Acidente (Near Accident Program), which records events
that did not cause any injury to employees but did present a risk, and are, therefore, analyzed and corrective or preventive
measures are implemented.These events are also publicized and discussed by employees by means of the Comissão Interna
de Prevenção de Acidentes. In the Internal Week of Work-related Accidents, Sipat, many activities aimed both at awareness
and prevention are organized. The objective of this week is to change attitudes, encouraging preventive behavior in all
situations: at work, at home and when in traffic. These activities include lectures, theater, seminars, games and contests. The
Sipat involves the employees of Natura and outsourced companies.

International operations
In the international operations, the activities of employees are exclusively administrative. In these activities, health and security
issues are less critical than those in production sites.There is no record of leave due to occupational diseases.

53. Description of formal joint health and safety committees comprising management and worker representatives,

and proportion of workforce covered by any such committees.

Brazil
Each business unit of Natura has a Comissão Interna de Prevenção de Acidentes do Trabalho. These commissions follow all
legal requirements – Regulatory Rule Nº 5 of Directive 3.214/78 of the Labor and Employment Ministry and operate as follows:
• The members have a one-year mandate.
• The number of participants is proportional to the total number of the company’s employees related to the level of risk

of the activity.

• Half of its members are elected by the employees themselves and the unions of the related category are informed of
and invited to actively participate in the elective process.The other half of the members are appointed by the company.

• The members and substitutes elected have their jobs guaranteed for the mandate period, plus one year.
• The members of these commissions participate in the analysis of accidents, identify and propose improvements for the
elimination or neutralization of risks and help publicize the prevention and security concepts, aiming at a broader
awareness of employees.

• The reports and minutes of the ordinary or extraordinary meetings are forwarded to the heads of departments and

management and released to employees.

International operations
This indicator does not apply to the operations abroad as the activities are of a commercial nature.

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54. Standard injury, lost day, and absentee rates, and number of work-related fatalities (including subcontracted workers).
Brazil

International operations
Not available.

2002
3
Number of accidents with employees (with leave of absence)
8
Number of accidents with employees (without leave of absence)
Average work-related accidents/employee
0.004
Number of accidents with subcontracted workers (with leave of absence)(1) NA
Number of accidents with subcontracted workers (without leave of absence)(1) NA
2.83
Absenteism
38
Lost workdays
255.00
Investment in the prevention of diseases/employee (reais)
Investment in the prevention of accidents/employee (reais)
56.08
Number of reports to the Brazilian Institute of Social Security

on occupational diseases – Cajamar

Number of reports to the Brazilian Institute of Social Security

on occupational diseases – Itapecerica da Serra

Number of reports to the Brazilian Institute of Social Security

on occupational diseases – Santo Amaro(3)

3(2)

N/A

5(2)

2003
5
15
0.007
5
34
2.06(2)
16
285.00
121.05

2004
6
12
0.007
16
7
3.14
57
408.00
428.93

1. These figures refer to outsourced employees who are assigned to the company’s units.
2. The figures in the 2003 edition of this report, which were incorrect due to a failure in the department’s internal control, are now corrected.
3. The Santo Amaro unit was discontinued in December 2002.
International operations
This indicator does not apply to the operations abroad as the activities are of a commercial nature.

55. Description of policies or programs (for the workplace and beyond) for HIV/AIDS.

Brazil
Natura is part of the Conselho Empresarial Nacional de Prevenção ao HIV/AIDS (Brazilian Corporate Council for the
Prevention of HIV/AIDS), an invitational body made up of 24 corporate entities that was created in 1998 by the Health
Ministry.
The objective of the program for the prevention of and fight against AIDS is to provide information to fight discrimination
and segregation, and leads to changes in behavior.
Natura has adopted a policy that involves the service and treatment of HIV-positive employees and their dependants, in
addition to a partnership with government agencies. Prevention campaigns are conducted periodically, particularly during
Carnival, on Labor Day, on Valentine’s Day and on World AIDS Day (December 1st).
In 2004, Natura was recognized by the Joint United Nations Programme on HIV/Aids, Unaids, for its contribution to the
fight against this disease in Brazil.

International operations
Natura does not have initiatives that are similar to those described here in its international operations.

56. Description of formal agreements with trade unions or other bona fide employee representatives covering health

and safety at work, and the proportion of the workforce covered by any such agreements.

Brazil
Natura follows the guidelines relating to health and safety of the Consolidation of the Labor Laws and other collective
bargaining agreements with unions with which Natura relates. Some items included in these agreements and observed by
Natura are: remuneration during the first fifteen days of sick leave, additional social security contribution, provision of a Work-
related Accident Report and adoption of protective measures relating to working conditions and the safety of workers,
implementation of the rulings of the Internal Commission for the Prevention of Work-Related Accidents, and guarantees of
the medical and laboratory tests provided for in legislation, among others.

International operations
Natura respects the labor legislation of the countries where it operates.

Training and Education

57. Average hours of training per year per employee by category of employees.
Brazil

Employees in production positions
Employees in administrative positions
Employees in managerial positions
Employees in executive positions
Total (average hours/year/employee)

2002
41
19
53
32
34

2003
33
36
66
40
37

2004(1)
78
61
86
68
70

In 2004, this indicator also started to contemplate the training of sales promoters and the Programa Natura Educação (Natura Education Program), which
were not considered in 2002 and 2003.

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58. Description of programs to support the continued employability of employees and to manage career endings.
Brazil
Programa Natura Educação (Natura Education Program)
The objective of the program is to increase the access of employees and their families and of outsourced employees
assigned to the company’s units to formal education and professional training. In 2004, Natura granted 80 scholarships for
technical courses, 90 for language courses and 100 for college studies as a subsidy to the participants monthly tuition fee
(see chapter Highlights of Investments in Corporate Responsibility, page 66).

Programa de Educação Executiva (Executive Education Program)
This program subsidizes up to 80% of the cost of MBA and post graduation courses for employees and executive training
programs for executives.

Support Center
In the processes of organizational restructuring, Natura makes available support centers for employees who no longer work
for the company, offering, among other benefits: psychological support, resources to improve professional qualification and
employability prospects, such as PC information technology courses and lectures on how to prepare a curriculum vitae,
guidance on professional placement alternatives, analysis of personal prospects in view of retirement, provision of access to
new health plans, unemployment insurance and Fundo de Garantia por Tempo de Serviço (Government Severance
Indemnity Fund for Employees), guidance on financial planning for the family, career advice with personal and family guidance
and support, guidance for reentering the market and self-development initiatives.

Programa Construindo o Futuro (Constructing the Future Program) – preparation for retirement
The program was launched in July 2004 with the aim to prepare and guide employees in their life projects after retirement. It
is divided in three approaches: quality of life, financial planning and career extension.
The Programa Construindo o Futuro uses initiatives that already exist in the Programa Natura Qualidade de Vida (Quality of
Life Natura Program), which is aimed at all employees. Regarding financial planning, the company launched, for all employees,
the Savings Incentive, which encourages them to save from 1% to 5% of their salaries per month.To the saved amount, Natura
adds 60%.The activities aimed at career extension focus on employees who are older than 58 years of age.The objective is to
support them in their search for a second career, which may range from the opening of their own company to volunteer work,
for example. By the end of the year, 72% of employees had enrolled with the program.

International operations
Natura does not yet promote programs abroad that are similar to those carried out in Brazil. It is worth recalling that the
conditions of public services in relation to professional education and preparation for retirement differ between the countries.

59. Specific policies and programs for skills management or for lifelong learning.
Brazil
Natura’s policy consists of providing 100% of the technical training necessary for them to do their jobs, and support the
personal and professional development of all employees. A tool, which was developed in the Intranet, contains all the internal
or external education and training opportunities gathered in a Guia de Aprendizagem (Learning Guide).
In 2004, the focus on the dissemination of the sustainability concept was reinforced. The Programa Desenvolvimento
Sustentável – Visão Geral (Sustainable Development Program – General View) with the aim to make employees aware of
the importance of the topic, and the Programa Desenvolvimento Sustentável – Visão Geral II (Sustainable Development
Program – General View II), specific for managers, were offered.
Another important focus was the Programa de Meio Ambiente (Environment Program), which trained approximately 2,000
people, from employees and outsourced employees, to work in accordance with the requirements of the ISO 14001 standard.
Additionally, the environment-related themes continue to be highlighted in the many corporate education programs.They are
addressed from the integration of new employees, outsourced employees and temporary workers to the daily activities
organized by the participants of the Comissão Interna de Meio Ambiente (Environment Internal Commission).
There are also the Natura Educação (Natura Education) and Educação Executiva (Executive Education) programs that offer
learning opportunities for life (see indicator 58); the course for pregnant employees, which addresses themes such as
physiology of pregnancy, postural and emotional aspects of pregnancy, breastfeeding and care with the baby (see indicator
65); and the Prosperar – Educação Financeira Workshop (Prosper – Financial Education Workshop), whose main objective
is to facilitate and help in the management and planning of the personal and family budget of employees, for whom training
with an external consultancy is provided.

International operations
Natura does not yet promote abroad activities similar to those above. It is worth recalling that the conditions of public
services in relation to support for qualification and training differ between the countries.

Diversity and Opportunity

60. Description of equal opportunity policies or programs, as well as monitoring systems to ensure compliance

and results of monitoring.

Natura’s stand is clear in all its documents of intention and relations with society, regarding its respect for diversity and
equality of treatment.

Brazil
Programa de Qualidade de Vida (Quality of Life Program)
Natura adopts a differentiated policy for pregnant or breastfeeding women, giving them all the conditions necessary for them
to exercise motherhood and respecting their needs and the needs of their children.

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Programa de Incentivo à Contratação de Pessoas Portadoras de Deficiência (Incentive Program for the Admission of
Physically Impaired People)
The program consists of the following stages:
• Review of the jobs available in the many departments together with specialized organizations.
• During the hiring process, the Recruitment and Selection, Ergonomics and Social Welfare departments, together, evaluate

the type of impairment and the activity to be performed.

• The Social Welfare department promotes awareness initiatives with the employees of the department that will receive

the new employee, focusing on integration and the type of impairment in relation to autonomy and dependence.

• Some employees perform the important and voluntary role of “sponsors”, helping in the integration of physically

impaired employees and guiding them whenever necessary.

Training materials have been adapted to serve the physically impaired employees. Sign language is used in courses attended
by hearing impaired employees. For visually impaired employees, voice software is made available.
During the year, there were two sign language courses for leaders, “sponsors”, and policlinic, daycare center and human
resources personnel aiming at better communication. The company also made available a telephony program for visually
impaired employees and installed public telephones for those who are hearing impaired.
In August 2002, Natura signed a Conduct Adjustment with the Labor Ministry in order to achieve the percentage target for
the admission of physically impaired people, which is calculated based on the total number of company employees. In 2003,
Natura reported, semiannually, to the Government Attorney’s Office on the measures taken to achieve this target. Currently,
there are 114 physically impaired employees in the company (corresponding to 3.69% of the total number of employees).
The adjustment signed with the Labor Ministry determines that this proportion must be of 5% in 2005.

Internal Job Opportunities Exchange
All vacancies available in the company are advertised on the notice boards and Intranet, ensuring openness and transparency
for the processes of internal deployment of personnel.

International operations
Natura does not have similar initiatives in the other operations. From 2005 onwards, the Internal Job Opportunities
Exchange will be global, that is, for all operations.

Human Rights
Strategy and Management
61. Composition of senior management and corporate governance bodies (including the board of directors),

including female/male ratio and other indicators of diversity as culturally appropriate .

Brazil
Composition(1)

Total Employees
Physically impaired people(2)
Percentage in relation to the total number of employees
Percentage in managerial positions in relation

to total managerial positions