Natura 2016
Annual Report
Contents
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Introduction
Message from the founders
Message from the Executive Committee
We are Natura
Developments and Challenges
Map of Operations
Strategy
Integrated performance assessment
Business Model
International Operations
AESOP
Personnel Management
Corporate Governance
Risk management
Ethics and transparency
Our products and concepts
Innovation
Consumer safety
Natura multi-channel
Relationship selling
Digital channels
Natura in Retail
Our processes
Commitments to the future
The Amazon Program
Management of GHG emissions
Environmental accounting
Water management
Waste management
Relationship with suppliers
Developments in logistics
Local communities
The Natura Institute
Institutional marketing
About this report
GRI Content Index
2050 Sustainability Vision
Appendices
Supplementary indicators
Letter of Assurance
2
2016 ANNUAL REPORT INTRODUCTION
Communication
focused on sharing
The volume of information and data disclosed every year by Natura embodies
our commitment to transparency. In this report alone, there are more than 150
indicators providing insight into the influence exerted by the different areas
of our business. The 2016 Annual Report is part of Natura’s reporting process,
which also includes a printed magazine, presenting the main highlights of the
period covered, and the Management Report, published on February 23rd in
the business newspaper Valor Econômico. Our Quarterly Performance Reports
also serve to update the performance of the company’s main social and envi-
ronmental indicators.
The Natura 2016 Annual Report follows the GRI (Global Reporting Initiative)
Standards for reporting sustainability performance, issued in 2016. Natura is a
pioneer in the issuing of GRI-aligned reports – it was the first company in Latin
America to adopt this practice, back in the year 2000. We also seek to be in line
with the integrated reporting principles set out by the IIRC (International Inte-
grated Reporting Council).
With each new issue, we strive to disclose our results in the clearest and most
integrated way possible. For this reason, we have consolidated all indicators in
this report. You should also pick up a copy of the 2016 Natura Report magazine.
Written in true journalistic style, it highlights the main events of the year, illus-
trating them with reports featuring some of the consultants that comprise our
relationship network.
Read more about this year’s developments in the next pages!
Marcelo Bicalho Behar
Corporate Affairs Director
Learn more about the making of this report here.
3
2016 ANNUAL REPORT MESSAGE FROM THE FOUNDERS
Possibilities
in liquid times
Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal
and Pedro Luiz Barreiros Passos
102-14
Uncertainty, and the insecurities it
generates, are predominant features
of the world in our times. Liquid times
– as the recently deceased Polish
sociologist Zygmunt Bauman called
them – are characterized by a pro-
cess of fragmentation of civilization
and human life, which distances peo-
ple and countries. Universal fraternal
feelings are weakened as distrust,
individualism and egocentrism gain
weight.
The overriding sensation is one of
profound doubt about our individu-
al and collective destinations, which
provokes anxiety and anguish, a
sense of frustration with politics and
grave tensions between nations.
Bleak scenarios evoke the reawaken-
ing of nationalism, protectionist im-
pulses, intolerance towards diversity
and anything different, in addition to
the risk of serious setbacks in terms
of the environment and healthy, in-
clusive development. One of the is-
sues that generates uncertainty on a
global level is extreme social inequal-
ity, within countries and between
them, an alarming situation for us all.
Given this panorama, it is necessary
for us to seek the lights of our funda-
mental principles and our origins in
humanism and in respect for others.
Basic truths, such as awareness that
we are all part of the chain of life on
the planet should fuel our thoughts
and our resolve, and guide our ac-
tions in the struggle for further ad-
vances for mankind.
We remain convinced that is only by
feeling and thinking systemically that
we will be able to commit to all the
dimensions of life because of our love
and respect for it. And it is this com-
mitment that enables us to see the
beauty in uncertainty. It offers us op-
portunities for all kinds of innovation,
encompassing especially the social
realm.
Uncertainty also exercises a particu-
lar power: it demands that each and
every one of us – individuals and po-
litical, social, business, academic and
cultural leaders – do their part. That
we participate in public life and in the
discussion about the future we want
to build. Or that we be the change
we want to see happen, as Mahat-
ma Gandhi or, more recently, Barack
Obama put it.
Companies, in turn, in defense of their
own interests, are able to and are
responsible for assuming the role of
agents of social and environmental
transformation. They should under-
stand these two commitments as op-
portunities for disruptive innovation.
As discussed in the latest World Eco-
nomic Forum in Davos, it is neces-
sary to concretize the contribution
capitalism can make to reducing the
inequality.
pains caused by social
We are part of this movement which,
based on new paradigms, seeks to
generate development and prosper-
ity for all, especially those who have
been left behind.
A NATURA
Nourished by our experiences, beliefs
and knowledge, we are aware of the
scale of the challenges we are fac-
ing. But we also know our vocation,
competencies and qualities, which
have enabled us to build a company
that has played a key social role in
transforming the lives of hundreds of
thousands of people over time. Mainly
BOARD OF DIRECTORS
Antonio Luiz da Cunha Seabra
Guilherme Peirão Leal
Pedro Luiz Barreiros Passos
4
2016 ANNUAL REPORT by means of our Relationship Selling
network.
We experienced many transforma-
tions during the course of 2016. Re-
garding our main operation in Brazil,
the planning which will enable us to
improve our results from now on is
clearly defined. In parallel, we intend
to maintain the accelerated pace of
growth in our International Opera-
tions, identifying the best means of
taking our value proposition to oth-
er geographies. Here, particularly
worthy of note is the performance of
Aesop, the brand of Australian origin
which is now an integral part of Natu-
ra and is expanding globally.
It is important to remember that 2016
was a year of transition also for Na-
tura’s senior management: Roberto
Oliveira de Lima, whom we thank and
wish all the best, concluded his term
as CEO. The executive leadership of
the company has now passed to João
Paulo Ferreira, who initiates a new
phase of his highly successful seven
years with Natura. We are excited to
have an experienced, cohesive group
of high-performing leaders aligned
with a future vision that has been es-
tablished jointly. For our part, we con-
tinue to engage in driving ever stron-
ger governance for the company.
Permanently aligned with our origins,
at Natura we prioritize reverence for
relations and systemic thinking, the
foundations of our commitment to
sustainability. It is this fundamental
belief in the power of relations and
empathy, and the wealth of diversity,
that guides us, strengthens us and il-
luminates our journey into the future.
And what is the future, if not the fruit
of our actions today, in the present?
BOARD OF DIRECTORS
Giovanni Giovannelli
Silvia Freire Dente da Silva Dias Lagnado
Carla Schmitzberger
Roberto de Oliveira Marques
Marcos de Barros Lisboa
Plínio Villares Musetti
5
2016 ANNUAL REPORT MESSAGE FROM THE EXECUTIVE COMMITTEE
From left to right: Agenor, Flavio, Josie, João Paulo, Robert, Lettiere, Andrea and Erasmo; in the back, Natura Relationship Man-
agers gather during the 2017 Annual Meeting
Prosperity, belonging
and purpose
João Paulo Ferreira, Chief Executive Officer, Agenor Leão, Andrea Alvares, Erasmo Toledo,
Flavio Pesiguelo, José Roberto Lettiere, Josie Romero and Robert Chatwin
102-14
We are confident about the construc-
tion of the strategic foundations of
our new cycle of prosperity. A se-
ries of advances in 2016 sustain our
confidence that we will be success-
ful in turning our operation in Brazil
around. This will be done primarily
through the strategy of revitalizing
direct selling, our focus for 2017. We
are launching a new value proposi-
tion for our consultants which will en-
able their professional development,
modernize their way of working and
boost their earnings. If, on the one
hand, our consumers receive more
personalized service that reinforces
their experience with our products,
on the other, consultants will perceive
in Natura a growing environment
based on new forms of relationship
with the company.
We want to provide our 1.8 million
consultants with more and more op-
portunities for prosperity, sustained
by the feeling of belonging to a com-
munity united around the purpose
of individual and collective enhance-
ment and the ideal of generating
positive impacts in our society.
In 2016, the performance of our oper-
ation in Brazil and the exchange fluc-
tuations throughout Latin America
ended up affecting Natura’s results.
Our consolidated net revenues to-
taled R$ 7.9 billion, with Ebitda of R$
1.3 billion and net income of R$ 297
million. The political and economic
crisis in the country led to a reduction
in spending on various categories of
cosmetics, fragrances and person-
al care products and the impover-
ishment of the Brazilian consumers’
shopping basket.
Our
International Operations also
faced a more complex business envi-
6
2016 ANNUAL REPORT João Paulo was one of the hosts of Natura’s 2017 Annual Meeting, which took place in the city of Atibaia, in São Paulo
ronment. Changes in government and
transitions in economic policy posed
new challenges for Natura’s vigorous
expansion in Latin America. Even so,
we maintained our pace of growth in
local currency, we are the preferred
brand in three of the five countries in
which we operate and we passed the
mark of 500,000 consultants in the
region. In parallel, we have increas-
ingly strengthened our capabilities
for operating
in mature markets.
Since joining Natura, the Australian
brand Aesop has expanded in size by
four-fold. Our experience in the inter-
national retail trade is complemented
by the Natura stores in New York and
Paris, spaces that are helping us gar-
ner the knowledge which will enable
us to adjust our portfolio and design
a scalable model for future expansion.
Financially speaking, we were more
efficient in allocating resources. Sim-
ilarly, we drove productivity gains in
our production and logistics opera-
tions, without compromising service
quality for our consultants and con-
sumers – we deliver more than 50%
of all orders in Brazil and Latin Amer-
ica in up to 48 hours. Our structure is
prepared to support Natura’s growth
and this enables us to keep our in-
vestments focused on digital tech-
nology and marketing, generating
impact and faster returns. And our
teams are more engaged than ever,
as shown by the increased ratings in
the survey conducted in all areas of
the company and the geographies in
which it operates, a factor which bol-
sters our confidence.
It is our understanding that tech-
nology is a powerful enabler, driving
the businesses of our consultants by
providing the means and information
that permit even closer relations with
our consumers. Rede Natura, our dig-
ital plataform, doubled in size during
the year, became established in Chile
and has now arrived in Argentina. The
transfer of these advances to the oth-
er operations is happening at a fast-
er and faster rate. We have already
passed the stage of using technolo-
gy merely to facilitate transactions
and are on course to becoming a
data-oriented company, which pos-
itively affects decision-making, pro-
ductivity and the quality of relations
between Natura, consultants and
consumers.
We also progressed in our entry into
the retail trade with the inauguration
of five company-owned stores in São
Paulo. The return from consumers ex-
ceeded our expectations, as did the
way our consultants interacted with
these product trial outlets. This gain
in competencies encourages us to
extend this channel to other states in
Brazil in 2017. Moreover, we expanded
the reach of our operations in drug-
store chains. Our learning from the use
of these different channels enables us
to visualize an immense opportunity
for driving synergies. Most importantly,
we identified that, rather than sowing
conflict, we will be developing a space
for cooperation and complementary
activities, in which the consumer will
benefit from the multiple manifesta-
tions of Natura with a higher quality
buying experience.
In 2016, we also successfully re-
launched two of our icons, the Chro-
nos and Ekos lines, which have always
translated our spirit of innovation,
capable of generating a technolog-
ical response to the demands of our
times in a way that only Natura can.
Thus, we are pursuing further disrup-
tive innovations that ally the best of
global cosmetics science with the
wealth of our biodiversity assets.
We are engaged in driving a new cycle
of prosperity for our entire relation-
ship network. Our products and our
brand are the vehicles through which
we intend to generate the positive im-
pact we are aiming for in society. We
continue to be guided by our Reason
for Being, a genuine quest for each in-
dividual: well-being well, manifest in a
harmonious relationship with oneself,
with others and with the whole.
7
2016 ANNUAL REPORT We are Natura
We are a Brazilian multinational which
was founded in 1969, and operates in
the cosmetics, hygiene and beauty
sector. Bolstered by our beliefs, we are
committed to developing products
that transmit more sustainable values
and behaviors throughout our entire
relationship network. 102-1, 102-2
Under the Natura brand, we do busi-
ness not only in Brazil, but also in Ar-
gentina, Chile, Colombia, , France, Mex-
ico, Peru and the USA (while in Bolivia,
we operate through a local distribu-
tor). In the Brazilian market, we are the
top performers in direct selling and
are expanding our retail operations
through our own stores and partner-
ships with drugstore chains. We have
also invested in a fast growing digital
platform. 102-4
We have around 6,500 employees and
1.8 million consultants sell our products.
Our headquarters is located in the city
of São Paulo (São Paulo state) and we
have factories in Cajamar (São Paulo
state) and Benevides (Pará state), as
well as outsourced production in Argen-
tina, Colombia and Mexico. Our logistics
structure includes a hub in Itupeva (São
Paulo state) and nine distribution cen-
ters – the newest of which was opened
in Argentina in 2016. Our international
presence also includes the Australian
brand Aesop, which was acquired by
Natura at the end of 2016. We are a
public company, whose shares are listed
with the BM&Fbovespa stock exchange,
in the Novo Mercado segment, thus re-
quiring the implementation of the high-
est standards of corporate governance.
102-3, 102-5, 102-8
Our performance is guided by the phi-
losophy of positive well-being, which
reflects the harmonious relationship of
individuals with themselves, with others
and with the whole. Over the course of
our history, we have deepened our com-
mitment to sustainable development.
As a company, we have set ourselves
the challenge of having a positive finan-
cial, social, cultural and environmental
impact. These goals were consolidated
in our 2050 Sustainability Vision, pub-
lished in 2014. That same year, we were
the first publicly traded company to be-
come a B Corporation (or B Corp) and
join the global movement that is giving
equal attention to both economic and
socio-environmental results. At the be-
ginning of 2017, we completed the pro-
cess of renewing this certification for a
further two years.
Our product development efforts
combine sustainable design with
traditional and scientific knowledge,
making use of an open innovation
model that involves a network of na-
tional and global partners. We work
together with our suppliers to reduce
the impact of our products, expanding
the use of recycled materials, such as
PET and glass. Over 80% of our for-
mulas are plant-based – and there-
fore renewable – and we maintain a
close relationship with around 2,000
families from the Amazon region in or-
der to obtain the active ingredients we
require and are found only in Brazilian
ecosystems, while encouraging pro-
duction techniques that help preserve
256,000 hectares of standing forest.
Developments
Challenges
We continued our steady growth in International
Operations, which represented 32.4% of the compa-
ny’s consolidated net revenue in 2016.
We launched EP&L, or “environmental accounting”.
Natura is the world’s first company to conduct a
study of this kind for its entire portfolio, including the
product use phase.
The Rede Natura platform has doubled in size in two
years and is already one of Brazil’s leading digital
channels for beauty products.
In 2016, we celebrated the milestone of ten years of
no animal testing.
To recover the strength of direct selling, by introduc-
ing new value models to our consultants.
To strengthen Brazilian operations amid an unfa-
vorable economic environment.
To sustain the company’s International Operations’
growth rate.
To enhance the multichannel shopping experience
through synergy between Relationship Sales and
expansion of digital and retail channels.
Natura is in the Top 20 of the world’s most sustain-
able companies, according to the Corporate Knights
Global 100 ranking.
To make the organization increasingly agile and
innovative in order to respond in a timely manner to
the changes faced by the world today.
Crer para Ver (Believing is Seeing) set a new record,
bringing in more than R$ 38 million from Brazil and
International Operations.
To make progress in achieving the 2020 goals that
are part of our 2050 Sustainability Vision.
8
2016 ANNUAL REPORT The Natura World
Geographic distribution of our operations
102-6 y 102-7
Denmark
Sweden
Norway
United Kingdom
Françe
Paris
Canada
New York
USA
Switzerland
Germany
Italy
Brazil
São Paulo
Mexico
Colombia
Peru
Chile
Argentina
MANUFACTURING
PLANTS
Benevides (PA)
Cajamar (SP)
9 DISTRIBUTION
CENTERS
IN BRAZIL AND
5 IN LATIN
AMERICA
INTERNATIONAL
OPERATIONS
Argentina*,
Mexico* , Colombia*
Peru and Chile
*Manufacturing done through authorized third party suppliers.
9
2016 ANNUAL REPORT Countries in which Natura operates
Countries with Aesop stores
Cities with Natura stores
South Korea
Japan
Taiwan
Hong Kong
Macau
Malaysia
Singapore
Australia
New Zealand
176 STORES*
with a unique
DESIGN
64 CITIES IN
20 COUNTRIES
41 NEWS
STORES
IN 2016
* December 2016
10
2016 ANNUAL REPORT Strategy
Strategy
After two years strengthening the foundations for a new cycle of prosperity, in 2017, Natura’s focus will be on accelerating
the implementation of its strategy. We are guided by six drivers, with four of them dedicated to recapturing our market
share in Brazil.
1 Revitalizing direct selling Rela-
tionship Sales, which always have
been a Natura hallmark and the main
strength of our company, also will be
maximized to enhance consumers’
experience with our brand. Over the
course of 2016, we built a new val-
ue proposition for consultants. This
included valuing their development
(generating returns in income, bene-
fits, recognition and personal devel-
opment) and segmenting them into
various profiles.
2 Repositioning the Natura brand
The launch of the campaign Viva
Sua Beleza Viva, in 2016, was the first
major step in raising awareness of the
Natura as an expert in beauty and
working to rebuild relations with con-
sumers. We will continue to move in this
direction to build the perception of a
vibrant brand that is open to dialogue.
3 Strategic review of the brand
architecture We want Natura to
continue launching important inno-
vations in the market, such as the re-
launch of the Ekos and Chronos lines
in 2016. To achieve this, we integrated
the marketing, sustainability and in-
novation areas under the same exec-
utive department. We want to create
products that combine high technol-
ogy, the sustainable use of biodiversi-
ty and disruptive concepts.
4 Multi-channel shopping expe-
rience In 2016, we began to un-
derstand the synergies and comple-
mentarity between Relationship Sales
and our digital channels and retail.
This process is helping us to revise our
portfolio and commercial strategies.
As a result, we will be present in con-
sumers’ shopping experience, offering
the adequate level of assistance, con-
venience and experimentation.
Two drivers guide our international
operations:
5 Strengthening our position in
Latin America By sustaining
strong annual growth, we hope to fig-
ure, by 2021, among the top four pro-
ducers of cosmetics, fragrancies and
toiletries in all markets in which we
operate. To achieve this, we are accel-
erating the adaptation of the evolu-
tions developed in Brazil to our other
operations, such as digitalization and
segmenting Relationship Sales.
6 Expanding in developed and
developing markets We aspire
to take our brand and value proposi-
tion to mature markets in Europe, Asia
and North America. We transformed
our operations in France and the Unit-
ed States, and have successfully iden-
tified which lines are more attractive
for countries with this profile, such as
Ekos, Chronos and Mamãe e Bebê. We
also learned many important lessons
from our experience with the expan-
sion of Aesop.
Our strategies are also supported by
facilitating processes that ensure the
foundations for the evolution of busi-
ness. In 2016, we captured efficiency
gains in the allocation of our finan-
cial resources as well as in operations
and logistics. We continued the dig-
ital transformation by modernizing
our Relationship Sales and launching
e-commerce operations.
We also seek to intensify our innova-
tion efforts within a more agile and
flexible work environment. Our ac-
tions converge to achieve the 2050
Sustainability Vision, which translates
Natura’s long-term commitment to
exerting a positive impact on four
levels: economic, social, environmen-
tal and cultural.
12
2016 ANNUAL REPORT Integrated performance
assessment
103-2, 103-3
in Brazil
Declining revenues
influ-
enced Natura’s economic perfor-
mance in 2016, especially in the third
quarter. Exchange rate fluctuations
in Latin America also had a signifi-
cant impact, and ended up reducing
the positive impact brought about
by the growth experienced in our In-
ternational Operations. Despite the
challenging economic environment,
which caused a drop in income, and
led consumers to seek cheaper prod-
ucts, the fourth quarter saw an im-
provement, driven by our strategy for
the Christmas season. Consequent-
ly, the consolidated Net Revenue for
2016, at R$ 7.9 billion, remained stable
in comparison to the previous year.
The consolidated EBITDA fell by 10%,
to R$ 1.3 billion, even though it grew
by 46% in Latin America and by 28%
at Aesop.
Natura was faced with a scenario
that required considerable discipline
in the management of investments,
working capital and expenses, but
continued to generate value for its en-
tire relationship network. The gener-
ation of wealth (allocated payments)
for employees (R$ 1.3 billion), suppliers
(R$ 6.5 billion) and consultants (R$ 4.4
billion) was greater than in 2015. The
only reductions were in the amounts
allocated to government (R$ 2 bil-
lion), mostly related to tax payments,
and to shareholders (R$ 119 million),
through profit distribution.
The social impacts of our operations
also benefit from sales of the Crer
para Ver product line, whose prof-
its ate used for the improvement of
public education, through the Natura
Institute. The funding increased from
R$ 30 million in 2015 to R$ 38.2 mil-
lion in 2016, in Latin America (outside
Brazil, the resources are managed
by local offices acting in partnership
with the Natura Institute). These re-
sources enable activities such as the
development of a study assessing
integral education in Brazil and the
expansion of the number of schools
participating in the Comunidades de
Aprendizagem (Learning Communi-
ties) project in Argentina, Chile, Co-
lombia, Peru and Mexico.
Our strategic decision to support the
development of the Pan-Amazon re-
gion, through the Amazon Program, is
yielding integrated economic, social
and environmental impacts. We allo-
cated more than R$ 220 million to this
program in 2016, mainly to purchase
all-natural Brazilian
(64%),
and we are close to meeting, ahead of
schedule, the target of doing R$ 1 bil-
lion in business in the region between
2010 and 2020 – we had already
reached R$ 973 million by the end of
2016. The volume of inputs purchased
from the region already accounts for
nearly 20% of all the raw materials
used by Natura and benefits 2,358
families from the supplier communi-
inputs
ties. The development of local econ-
omies through production activities
that respect nature helps internalize
the concept that a standing forest
generates wealth. In return, these
partners provide us with some of the
main assets employed in production.
Still on the topic of environmental
performance, the reduction in pro-
duction volumes did not affect our
relative CO2 emissions performance,
which remained practically stable,
at 3.17 kgCO2e per kilogram of bill-
able product. This result was mainly
due to logistical improvements, such
as increased use of coastal shipping
to transport products in the north
and northeast of Brazil. The choice
of products in the portfolio also con-
tributed to this figure, through the
increased use of materials that have
a smaller environmental impact, such
as fragrances bottled
in recycled
glass and the Ekos line, which uses
100% recycled PET. The percentage
of recycled material used in packag-
ing rose from 2.90% in 2015 to 4.27%
last year.
However, the reduction in volume of
products sold did affect our relative
water consumption per unit pro-
duced, which increased by 8%. Nev-
ertheless, regarding our total water
consumption, there was a 5% reduc-
tion in the volume of water withdrawn
across all our operations, compared
to 2015.
All our financial statements are available here.
13
2016 ANNUAL REPORT Business Model
The power of relationships is the ba-
sis of our business model. We seek to
generate value and develop technolo-
gies so that, by 2050 and considering
all the stages of the production cycle,
our impact will be a positive one. We
start by sourcing our raw materials
according to ethical and fair trade
principles, while at the same time
transforming social and environmen-
tal challenges into more inclusive and
sustainable business opportunities.
We engage with local communities of
the Amazon region, encouraging the
development of production chains
that preserve the standing forest,
while generating resources for tra-
ditional communities. In our open in-
novation model, national and global
partners share traditional and scien-
tific knowledge and design expertise
for the development of new product
lines. We also work together with
suppliers to reduce the impact of our
production, implementing a chain for
the reuse of recycled materials such
as PET and glass. More than 80% of
our formulas are of vegetable origin
(and therefore renewable) and all the
alcohol we use is organic, produced
using methods that conserve ecosys-
tems and animal and plant life.
Our consultants provide power and
reach to our products and concepts.
Indeed, it is their belief in our value
proposition that propels this entire
ecosystem – their engagement helps
transform both individual and collec-
tive realities. Relationship Selling is
our means of conducting direct sales,
which is now gaining synergy with
new points of contact with consum-
ers, through the Rede Natura (our
digital platform) and Natura stores.
All of this aims at providing a unique
shopping experience and enabling
the expansion and prosperity of our
network. This virtuous cycle also ends
up fostering values and behaviors
that are more sustainable and pro-
moting positive being well through-
out the entire chain.
We are attuned to the global agen-
da, and have incorporated the Sus-
tainable Development Goals (SDG)
approach to the evaluation tools we
use to assess the transformative po-
tential of our activities. Furthermore,
in order to provide the scale required
by our transformational activities, our
brands and sub-brands must become
platforms that encourage new models
of production and consumption.
14
2016 ANNUAL REPORT Business model
We endeavor to generate value throughout our network
257,000
hectares of forest
conserved
SUPPLIERS
We stimulate the
production of
recycled glass and
PET and lower impact
materials
1
ETHICAL TRADE
IN INPUTS
We buy ingredients
from communities in
the Amazon, fomenting
chains that keep the
forest standing and
generate development
for 2,119 families.
Our products combine
traditional knowledge,
science and design.
4
CONSCIOUS
CONSUMER
We encourage
new consumption
standards, including
the use of refills and
the proper disposal of
packaging.
NATURA MOVEMENT
Platform that links
volunteers with social
and environmental
projects.
More than 50,000
people benefited in the health,
education, culture, sports and
other areas
20% of our packs
are eco-efficient1;
597,000
1-liter bottles
correspond to the
amount of recycled
glass used in our
perfumery
BRANDS AND CAUSES
Ekos Standing forest
SOU Intelligent consumption
Chronos Women’s empowerment
Mamãe e Bebê The bond between mother and child
Crer para Ver Quality education
22
1 EPackaging at least 50% lighter than regular/similar packaging;
or comprising 50% post-consumer and/or renewable non-cellulosic
materials that do not increase mass.
ORGANIC ALCOHOL
Our perfumery uses alcohol supplied by
the company Native. The cane comes from
plantations that regenerate the Atlantic Rainforest.
83%
of our ingredients
are of renewable
vegetable origin
340
animal species,
49 of them
under threat,
have returned
to their
habitats
30%
increase in
the volume
of water in
the rivers
and streams
in the region
20,000
hectares of
sustainable
cultivation
2
3
RELATIONSHIP
SELLING
As well as generating
income, we invest
in our consultants’
development.
We offer discounts
in education
1.8 million
consultants take our
products and our values to
the consumers
More than 8,000
consultants resumed their studies,
some at university level
SUSTAINABLE
MANUFACTURING
We have switched
to vegetables in our
formulas, and we use
recycled raw materials.
We have our own
factories in Brazil and
third-party plants in
Argentina, Colombia
and Mexico.
For 10 years
we have been Carbon
Neutral. We have reduced
and offset emissions
throughout the chain.
2.8 million
metric tons of CO2 offset
up until 2016, equivalent
to the emissions caused
by 480,000 car trips
around the world
CRER PARA VER (BELIEVING IS SEEING)
A non-cosmetic
product line the profit
from which is invested
in education.
R$ 38 million
raised in Brazil and the
operations in Latin America
during 2016.
Value added
Economic (R$ million)
2014
2015
Consolidated net revenue
7,408.4
7,899.0
2016
7,912.7
Consolidated EBITDA
1,554.5
1,495.9
1,343.6
Consolidated net income
Free cash flow
Average daily trading volume in the stock1
% revenue contribution from Intl, Ops,²
201-1
Distribution of wealth (R$ million)
Shareholders3
Retained earnings
Consultants
Employees
Suppliers
Government
Environmental
Relative GHG emissions (kg of CO2e/kg of product
manufactured)4 5
732.8
208.6
47.9
19.2
2014
709
24
4,122
1,075
5,925
1,724
2014
3.00
513.5
818.1
30.2
29.0
2015
360
154
4,421
1,245
6,374
2,149
2015
3.17
296.7
469.9
39.1
32.3
2016
119
178
4,430
1,327
6,512
2,009
2016
3.17
GHG emissions in the value chain (‘000 tons)5
332,326
321,267
303,424
Water consumption in Brazil (liters/unit manufactured)
0.45
% of post-consumer recycled materials in Brazil
% eco-efficient packaging in Brazil6
1.2
29
0.49
2,9
26
0.53
4,3
20
CAPTION:
NCs: Natura Consultants; NCAs: Natura Consultant Advisors
NOTES: 1. Source: Bloomberg. 2. Excludes local distribution in Bolivia. 3. Amounts refer to interest on capital and dividends for the fiscal years. 4. CO2e (or CO2
equivalent): measure used to express greenhouse gas emissions based on the global warming potential of each gas. 5. Includes scopes 1, 2 and 3 of the GHG
Protocol. 2016 inventory audited by KPMG. 6. Packaging at least 50% lighter than regular/similar packaging; or composed of 50% potentially post-consumer
and/or renewable non-cellulosic materials that do not increase mass.
17
2016 ANNUAL REPORT Quality of relationships
Employee engagement survey (Brazil and Intl. Ops.)7
Loyalty of suppliers in Brazil8
Loyalty of NCs in Brazil8
Loyalty of NCAs in Brazil8
Loyalty of Consumers in Brazil8
Loyalty of NCs International Operations
Loyalty of NCAs International Operations
Social
Overall rating in brand image survey in Brazil (%)9
Earnings Crer para Ver (R$ million)10
Cumulative business volume in the Amazon region
since 2011 (R$ million)
Families benefited in Supplier Communities
2014
3.80
24%
28%
30%
64%
39%
45%
2014
74
25.5
582
3,121
2015
n.d.
18%
30%
29.5%
60%
37%
52%
2015
73
30.0
752
2,251
2016
3.95
21%
31%
32%
56%
37%
53%
2016
72,5
38.2
973
2,841
7. As part of the realignment of the people management strategy, we began disclosing the Natura Engagement Survey, which more clearly portrays the
organization’s health (was not conducted in 2015). In 2016, we ceased to conduct the workplace climate survey. Source: Gallup. 8. Loyalty survey – Ipsos
Institute. Loyalty: percentage of people surveyed who gave the maximum score (“Top1Box”) on a 1 to 5 point scale of in three categories – satisfaction,
intention to continue the relationship with Natura and whether they would recommend Natura to others.
18
2016 ANNUAL REPORT Steady growth
in Latin America
from
Operations
to pursue
In 2016, our operations
in Latin
America (Argentina, Chile, Colombia,
Mexico and Peru) maintained their
30% growth rate, in local currency,
and yielded an extra 2 p.p. of EBITDA
growth, advancing
10% to
12.5%. With such consistent results,
International
now
account for 32% of our net revenue,
encouraging us
the
objective of being among the four
leading manufacturers of cosmetics,
fragrances and hygiene products in
all the Latin American countries in
which we operate by 2021.
We have continued to expand our
network of Natura consultants, which
grew by 7.5% in 2016, approaching
the mark of 550,000. Using
local
marketing, communication strategies
and portfolio adjustments, we have
achieved above average growth in the
for
perfume, make-up and body product
categories. We are the preferred
brand in three of the region’s five
countries where Natura operates:
Argentina, Chile and Peru.
Latin America still offers many
opportunities
the expansion
of Relationship Selling. The digital
plataform Rede Natura has been
available in Chile since 2015, yielding
good results, and in the first quarter of
2017, it went live in Argentina. We are
also carefully designing a strategy for
implementing multichannel options in
the region, based on the experience
gained in Brazil.
In four of the five countries, Natura is
among the top 20 companies with the
best reputation, according to Merco
(Corporate Reputation Business
Monitor). In Argentina, we are in 10th
place, and we are in the Top 20 in
EBITDA - LATIN AMERICA
(R$ million)
247,6
169,7
46%
growth rate
2015
2016
Chile, Mexico and Peru. We are also
a benchmark in Latin America for
personnel management, having often
been awarded industry recognition.
In Colombia, we were presented with
the Work & Life Balance certification,
which attests to the quality of the
practices adopted by Natura to
promote a more balanced lifestyle for
employees.
19
2016 ANNUAL REPORT Aesop stores in Oscar Freire,
in São Paulo, and Kyoto
(below) in Japan
Aesop becomes 100% Natura
In
late 2016, we completed the
acquisition of 100% of the equity of
Aesop, the Australian brand bought
by Natura in 2013, which celebrates its
30th anniversary in 2017.
Since it was taken over by Natura,
rate of expansion has
Aesop’s
business
with
increased,
its
quadrupling
In 2016, 41
in size.
exclusive new stores were opened
around the world, bringing the total
to 176 in 20 countries across the
Americas, Asia, Europe and Oceania.
The products are also available in
85 different department stores. Last
year, net revenue grew by 34% and
the EBITDA by 27.5% (in Reais). With
a portfolio of 110 products with 80
different formulas, Aesop launches
an average of 10 new items per year.
Among the brand’s main distinctions
are the ongoing research into new
ingredients that can be
bioactive
used on skin and hair, the eye-
catching design of
its stores and
packaging and no animal testing of
any kind, in line with Natura’s own
philosophy.
Aesop is run independently, through its
own governance structure – with two
Natura representatives on its Board
of Directors. Nevertheless, the synergy
between Natura and Aesop has grown
year after year, with the Australian
brand’s team collaborating with us
to formulate a strategy to enter the
retail segment through the opening
of new Natura stores in Brazil and
New York (in addition to the existing
Paris outlet). On the other hand, we
have also sought to foster change in
Aesop’s operations, including raising
their awareness over sustainability
and the social and environmental
impacts of company activities even
further, as well as supporting the
setting up of a foundation similar
to the Natura Institute. Aesop also
plans to expand its own digitalization
process during 2017, transforming the
online shopping experience into an
extension of its exclusive stores.
20
2016 ANNUAL REPORT Michael O’Keeffe,
Aesop’s CEO
INTERVIEW: MICHAEL O’KEEFFE, AESOP’S CEO
“We have our own way of
looking at the world”
Learn more about Aesop in this interview with CEO Michael O’Keeffe
What are the main opportunities
you envisage for 2017, the year that
Aesop turns 30?
We are working hard on a new digital
platform. Currently, our sales through
this channel represent about 7% of
the total, but the consumer who buys
on our website does not yet enjoy the
same experience that we offer in our
Aesop stores. Our goal is for there to
be an increasing connectivity between
different channels, so that the shop-
ping experience is always satisfactory
and of the highest quality in both.
Like Natura, we seek to go beyond
merely selling quality products, as we
have our own way of seeing the world
and interacting with it. Our stores ex-
press our vision and concepts and the
digital environment is a great oppor-
tunity to enhance this. The new web-
site is under development and is due
to go live in the USA in 2017 and in ad-
ditional countries in 2018.
Is the number of stores going to keep
growing at the same rate as in the
last few years?
We plan on keeping up our recent ex-
pansion rate. We have mapped out 40
new countries we could enter, includ-
ing some in Latin America, a region
where we are able to count on Natu-
ra’s support and expertise.
that respect: Shoreditch in London,
England, and Fitzroy in Melbourne,
Australia. We opened our doors in
those two neighborhoods, creating
employment for the local community,
and the areas started coming alive.
Now, they are both important cultur-
al hubs, with art galleries, stores and
other local businesses.
Aesop chooses very carefully the cit-
ies and regions where it will set up
its exclusive stores. Which best rep-
resent the brand’s concept?
The retail trade has a very strong con-
nection with the surrounding com-
munities. In many places, downtown
has been abandoned and high street
stores have virtually disappeared. Re-
tail has the potential to restore life to
an area, with people once again circu-
lating within those places. Aesop has
two stores that are very significant in
Which is your favorite Aesop store?
We have two very distinctive stores,
especially from a design point of view.
The Kyoto store, in Japan, is one and
the other is located on Oscar Freire
Street, in São Paulo – which was our
first store in Brazil, designed by the
renowned architect Paulo Mendes da
Rocha. They are both incredible stores
that could not exist anywhere else in
the world, because they are very rep-
resentative of local cultures and the
countries where they are located.
21
2016 ANNUAL REPORT Personnel
Management
PERSONNEL MANAGEMENT
Changing people
to change the world
Over the course of 2016, we expanded
our analysis of personnel manage-
ment and organizational develop-
ment and laid the foundations for a
cultural transformation that will take
place over the coming years. We are
looking to link ourselves to the trends
and best practices in order to design
new programs and tools for all em-
ployee groups. The goal is to become
a simpler, more agile and innovative
company, while building upon Natu-
ra’s main passions: relationships and
products.
We closed out the year with 6,397
employees at Natura, including both
Brazil and International Operations.
The prevailing scenario caused us
to reassess our company structure,
seeking simplification and productivi-
ty, and led to a reduction of around 5%
in the number of employees in Brazil.
On the other hand, our teams expand-
ed in Argentina, Mexico and Colombia.
In France, the reduction in employee
numbers was influenced by changes
made to the local commercial strate-
gy. At Aesop, there are 1,468 employ-
ees across all the countries where the
brand operates.
102-8
Natura employees1
2014
2015
2016
Brazil
Argentina
Chile
Mexico
Peru
Colombia
France
Total
1. Does not include Aesop.
431
145
77
37
Fem.
Male
Total
Fem. Male
Total
Fem. Male
Total
3.091
2.141
5.232 2.988 2.163
5.151
2.842 2.065 4.907
508
465
85
550
508
89
597
75
46
121
182
141
70
44
185
139
47
117
75
213
22
235
202
28
230
199
227
40
267
272
50
322
287
34
12
46
28
8
36
11
46
49
28
52
7
185
124
227
339
18
4.216
2.375
6.591
4.166
2.425
6.591
4.061 2.336 6.397
102-8 Natura employees, by gender (%)1
2014
2015
2016
Male
Female
1. Does not include Aesop.
36
64
37
63
37
63
23
2016 ANNUAL REPORT PERSONNEL MANAGEMENT
Trained professionals
103-2, 103-3
Our leadership participated, for the
second year in a row, in the Mosaic
development program, which seeks
to introduce the company to the
best concepts and market practices,
adapted in light of Natura’s current
stage, as well as its strategic challeng-
es and principles. The program was
set up in 2015 to bring about more
agile decision-making and provide
structures and tools that promote
learning about the company and for
the company.
The first Mosaic panel, which is man-
datory for all members of the man-
agement team, enables managers to
experience the main stages of opera-
tions and sales and identify areas for
development, such as factory dynam-
ics, the routine separation of orders at
one of our distribution centers or the
delivery of boxes of products to con-
sultants at their homes. The program’s
elective modules deal with topics such
as empathetic communication, work-
ing practices and resilience.
PASSPORT TO THE FUTURE
We have a specific program for ac-
celerating the development of ana-
lysts and coordinators. Its aim is to
broaden their business perception,
furnish the tools necessary to per-
form satisfactorily in their roles and
enhance personal development. The
program focuses on facilitating ex-
periences that enable a deeper un-
derstanding of the topics discussed.
SOPHIA
The Sophia program seeks to train
Marketing and Business professionals
to make decisions that are in the best
interest of the business, while building
the brand in line with both its short-
and long-term visions. We cover con-
tent ranging from communications,
customer relationship management
(CRM) and digital. Nine projects were
conducted, three of which will be pre-
sented to the Executive Committee,
who will assess the possibility of im-
plementation and exposure of partic-
ipants.
404-2
Investment in skills management and
continuing education programs
(R$ thousand)¹
Brazil
Argentina
Chile
Mexico
Peru
Colombia
France
Total
2014
2015
2016
15,894
12,578
7,400
979
294
472
96
353
119
1,842
2,925
292
443
86
194
87
404
534
417
1,326
175
18,208
15,522
13,182
1. In 2016, investments made to train the Sales Force were included here. The HR and Relationship departments conduct these training sessions together.
24
2016 ANNUAL REPORT Web portal facilitates training access
We have consolidated all of our training and development
activities in the Development Portal, which was launched
in August 2016. Now, employees have access in one single
place to all the training courses available and their respec-
tive schedules. Through this portal, employees can plan
ahead in order to ensure participation in one of the many
activities being offered. We have also increased the frequen-
cy with which the activities are advertised to management
and disclose the calendar of events during all area meetings.
Investment in training and development in Brazil was re-
duced to a total of R$ 7.4 million, 59% less than in 2015.
However, in International Operations, the investment in
training increased in all countries to meet the demand of
the business – which is growing fast – reaching a total of
R$ 5.8 million.
In 2016, priority was given to training conducted by Natu-
ra’s own facilitators, thereby taking advantage of our em-
ployees’ great expertise in the topics being addressed. This
initiative reduced the amount spent in outsourcing train-
ing facilitation and enabled the various training courses
to be adapted more closely to the needs of our employees.
This change had a positive impact on overall participation
numbers, which reached 81%, the highest rate in the last
three years.
Changes in the assessment of personnel
development
103-2, 103-3
We spent 2016 studying and con-
ducting market research in order to
improve our employee performance
assessment process, with the goal of
giving individuals a more central role.
The model that is currently in use in-
cludes employee self-assessment, as
well as an evaluation by their superi-
ors, subordinates and colleagues (in-
cluding from other areas). Under this
so-called Performance and Recogni-
tion Program (PRP), the administra-
tive and business staff receive feed-
back on their performance and have
a structured Individual Development
Plan (IDP). The assessment results
are discussed in the Personnel Forum,
which includes the management staff
who work directly with the individual
under assessment, as well as repre-
sentatives of other areas who have
dealings with that employee.
Functional
Category
2014
2015
2016
404-3
Proportion of employees
that receive regular career
development and performance
feedback¹²
Male
Fem.
Male
Fem.
Male
Fem.
Operational
92%
85%
80%
75%
94%
80%
Administrative
88%
90%
89%
79%
98%
75%
Management
98%
95%
88%
90%
99%
99%
Senior
management
93%
88%
83%
93%
97%
100%
1. Percentages were calculated in relation to the total number of employees, including Brazil and International Operations. 2. In most cases, the employees
who were not evaluated were not eligible for assessment, due to their admission date or leave of absence.
25
2016 ANNUAL REPORT New survey to measure engagement
with the Gallup consulting firm and
registered an average score of 3.95,
on a scale of 1 to 5. In 2014, the result
was 3.8.
All vice-presidential areas, in all re-
gions,
results.
Approximately 93% of employees
completed the survey. The final total
represents the general average ob-
tained from 12 questions with a scale
between 1 and 5 points. The results
improved
showed
can be compared to those of the more
than 500 companies that conduct
the same survey. According to Gallup,
an improvement of 0.15 in the second
edition of the survey is very good and
above average.
Having adopted the new methodol-
ogy, we did not calculate the Loyalty
Index of our employees in 2016, since
the survey already included elements
from the climate survey.
2014
2016
In order to gain a better understand-
ing of the company’s health, we in-
troduced the employee Engagement
Survey, which now serves as the main
yardstick for corporate environment
analysis, and replaces the traditional
Organizational Climate Survey.
The Engagement Survey was carried
out for the second time in 2016 – the
first occasion having been in 2014.
The survey was conducted together
102-43/102-44
Engagement Survey
Brazil
Argentina¹
Peru
Chile
Mexico
France²
Colombia
-
-
-
-
-
-
-
3,88
4,15
4,33
4,08
4,16
n.a.
4,21
3,95
Average – Natura
3,8
1. The data does not include the International Business Department, which is headquartered in Buenos Aires and coordinates the activities of International
Operations. 2. As a result of the strategic decision to terminate the direct selling model in France, we decided not to conduct the Engagement Survey in the
country in 2016.
26
2016 ANNUAL REPORT Celebrating the beauty of diversity
We have a broad and inclusive un-
derstanding of diversity and support
equal rights and responsibilities for
all those who work with us. The theme
has evolved at Natura, with 2020 in-
clusion targets incorporated into the
2050 Sustainability Vision and the
launching of the Natura Policy for the
Appreciation of Diversity in 2016.
Arising from a comprehensive study,
endorsed by the company’s Execu-
tive Committee, the policy is based
on two major pillars. The first relates
to our corporate culture and how we
can best promote diversity among
employees. The second refers to a
policy aims at promoting equality
and multiculturalism, with the inclu-
sion of certain groups that, due to so-
cial or historical issues, have suffered
from prejudice because of disabilities,
gender or ethnicity. Following the
implementation of the Policy for the
Appreciation of Diversity, we are giv-
ing first priority to two areas: gender
equality and people with disabilities.
GENDER EQUALITY: HARMONIOUS
BLENDING OF FAMILY AND CAREER
Promoting gender equality has al-
ways been a priority for Natura. That
is perfectly understandable, consid-
ering that our network of consultants
has always been mainly comprised of
women. Internally, we strive to create
a favorable environment for our em-
ployees, so that they can make life
choices that allow for a good balance
between career and family.
At Natura, women benefit from an
extended maternity leave amounting
to six months. There is also a nursery
available on site, where children aged
between 4 months and three years
old can be left under professional su-
pervision, thus enabling breastfeed-
ing during working hours. Employees
at company units that do not have
this infrastructure are entitled to a
childcare allowance, a monthly pay-
ment to cover the expenses of an out-
side nursery or a nanny.
We also encourage fathers to play
their part in family life. In 2016, we in-
creased paternity leave to 40 days.
That is double the period proposed
in the new Early Childhood Legal
Framework, approved in March 2016.
The initiative extends to same-sex
couples and to adoption cases. The
prenatal course provided to our fe-
male employees and employees’
wives is also open to fathers.
We have also engaged in public dis-
cussions on the subject of women’s
empowerment. In February 2016, the
company signed up to the Women’s
Empowerment Principles, an initia-
tive of UN Women and the United Na-
tions Global Compact. Then, in April,
we joined the Program for Gender
and Racial Equality, launched by the
Brazilian Ministry for Women, Racial
Equality and Human Rights. Under
this
initiative, companies disclose
their plan of action to increase inclu-
sion in the work place. Performance
is monitored and, if deemed suitable
throughout the program, the com-
pany is awarded the Pro-Equality
seal.
In a pioneering move, we have made
public commitments
to promote
gender equality. Our goal is to have
women in 50% of our senior manage-
ment positions in Brazil and in Inter-
national Operations by 2020, as well
as 100% equal pay throughout the
company. We currently have 14 wom-
en in this position, nine of whom were
already career professionals at the
company. Two of them are vice-pres-
idents (out of a total of six) and 12 are
directors (out of a total of 31). In or-
der to boost these numbers, we have
decided that, in all internal selection
processes for leadership positions,
we must seek a balance between
male and female finalists, all of whom
must have equal potential and condi-
tions to take up the position for which
they have applied.
A FULLY ADAPTED DISTRIBUTION
CENTER
Our positioning expressly translates
our belief that the real shortcom-
ings are in the environment we are
living in and not in people them-
selves. That is why we seek to ensure
our own spaces are suitable to all.
For example, at our São Paulo Dis-
tribution Center (SPDC), we made a
point of designing a highly accessi-
ble work place. The SPDC’s separa-
tion lines, which reached full oper-
ational capacity in 2016, use pick to
light technology, which allows peo-
ple with disabilities to easily sepa-
rate products, with lights turning on
to indicate the tasks that are to be
performed intuitively. The inclusion
extends to people with intellectual
disabilities – who tend to be a chal-
lenge for many companies.
Employees who are hearing
im-
paired are allocated sponsors, col-
leagues who have been trained in
Libras (Brazilian Sign Language) to
help them communicate. The
im-
portance Natura places on hiring
disabled professionals is a training
topic for managers under the Mosaic
Program, but also extends to all em-
ployees company-wide. We have de-
veloped a hiring strategy specifically
to attract such candidates and in
2016 we created another initiative, in
partnership with APAE (Association
of Parents and Friends of People with
Disabilities), to hire young apprentic-
es with disabilities.
Presently, around 16% of all SPDC em-
ployees are people with disabilities –
and the goal is to reach 30%. Among
the entire Natura staff in Brazil, 5.8%
have disabilities – above the 5% de-
manded by Brazilian legislation. Our
goal is to reach 8% by 2020, as set
out in our Sustainability Vision.
27
2016 ANNUAL REPORT 405-1
Diversity
2014
2015
2016
Total number of employees - Brazil
5.232
5.151
4.907
Proportion of women in relation to total
employees (%)
Proportion of women in management positions (%)
Proportion of women in senior management posi-
tions – director and above (%)
Proportion of employees over the age of 45 (%)1
Proportion of employees over the age of 45 in
management positions (%)1
Proportion of employees over the age of 45 in
senior management positions – director and
above (%)1
Cultural diversity - Total management positions
occupied by foreigners or those with international
experience2
Cultural diversity - Proportion of management
positions occupied by foreigners or those with
international experience (%)
59
56
36
14
12
39
20
17
58
56
33
17
14
50
25
23
58
53
35
18
14
58
22
20
1. Over 45: 13% of our current staff turned 45 in 2016, thus contributing to the increase observed in this indicator. Furthermore, 3% of employees hired in 2016
were people over the age of 45, 13% of whom were hired for senior management positions. 2. Cultural diversity: In order to expand the company’s diversity
even further, the expatriation process has been revised, with new policies governing short-term international transfers to be implemented in 2017.
405-1
Hiring and training of People with
Disabilities – Brazil
Number of employees with disabilities1
Proportion in relation to total employees (%)
Number of employees with disabilities who
participated in Natura’s training programs2
2014
2015
2016
263
5
263
286
5,6
277
284
5,8
266
1. In 2016, this indicator included employees with any kind of “borderline” disability, as determined by the law regulating inclusion quotas. This is part of
Natura’s inclusion strategy, since such individuals are often doubly excluded from society, because they are limited by their disability and, at the same time,
are unable to enjoy the benefits provided by law to people with disabilities. In total, there was one person in that situation in 2015 and two in 2016. 2. Total
number of people with disabilities who participated in at least one Natura training course.
28
2016 ANNUAL REPORT 405-2 – Gender pay gap (by functional
category) (%) 2 3 4 5 6
2014
2015
20161
Production
Administrative
Management
Senior management
-24
13
-7
-16
-23
20
-4
-15
-22
10
-1
-10
1. In 2016, collective agreements brought a 9% increase for employees in the operational and administrative areas. Managers received a fixed amount, which
was incorporated into their basic pay. There were also spontaneous increases in promotion and merit programs, as well as new hirings, terminations and
transfers, which affected the reported figures. 2. The calculation did not include payment of short-term incentives (Profit Sharing). 3. This includes bonuses
paid to sales managers and relationship managers, plus Weekly Paid Leave (WPL). 4. Sales Force employees, which hold posts along the hierarchy, reinforce
the women’s pay average, due to their sales bonuses, which are not extended to operational posts. 5. For this indicator, the most representative operational
units, those in Brazil, were considered. 6. The differences in pay between men and women at Natura are entirely due to the remuneration distribution within
the company structure. When compared individually within each salary group (SG) or even between SG and area, the differences are insignificant.
Volunteering
In 2016, we resumed our Volunteer Program, to encourage
our employees to play a leading role in society and devel-
op their sense of citizenship. A total of 3% of the employees
in Brazil engaged in campaigns for donations, school and
NGO activities and community efforts. Furthermore, the
Acolher Colaborador (Employee Nurturing) category was
added to the Acolher Awards, showing recognition to con-
sultants who promote transformative activities. The award
was presented to three employees who volunteered in so-
cial work outside Natura.
29
2016 ANNUAL REPORT Corporate
Governance
CORPORATE GOVERNANCE
Renewing our
executive leadership
102-19, 102-20, 102-23, 102-29
After two years of stellar work as Na-
tura’s CEO, Roberto Lima left the post
in October 2016. During his term in
office, he was responsible for con-
solidating the company’s present
strategy and making a few important
changes, such as putting together a
strong Executive Committee (Comex),
implementing the digital, multi-chan-
nel and brand repositioning agendas.
João Paulo Ferreira was chosen by the
Board of Directors to take his place as
the new CEO. Ferreira is aligned to our
beliefs and has seven years’ worth of
experience heading key company pro-
cesses (such as logistics, sustainability
and the commercial area). He has the
skills required to speed up the imple-
mentation of our strategy over the
coming years. He joins a young and
talented Executive Committee that
mixes seasoned Natura employees
with deep knowledge of the company
with newer hires, who are introducing
new visions and ideas to the fold.
In order to strengthen the relation-
ship between the Board of Directors
and the Executive Committee, the
Director of Governance now partic-
ipates in both bodies. In addition to
drawing the two of them closer, the
move aims to improve the monitor-
ing of strategies and simplify pro-
cedures. Regarding the structure of
the Comex, the Marketing, Innova-
tion and Sustainability areas have
been brought together under a single
vice-president. This reorganization
seeks to strengthen brand and con-
sumer preferences, while reinforcing
the relationship between sub-brands
and innovation and social and envi-
ronmental causes, to further extend
the strategic advantage already
achieved in this area.
In early 2017, we completed the adjust-
ments to our executive framework. Five
new business units were created, or-
ganized according to geography and
sales channels, and reporting directly
to the CEO like all other departments.
The new units are Direct Selling - Bra-
zil, Online Business, Retail and Latin
America, while the vice-president of
International Operations reports di-
rectly to the Board of Directors. Once
again, the goal is to expedite the im-
plementation of strategy.
Find out about the Executive Com-
mittee structure and the back-
ground of each member here.
Board of Directors
102-18, 102-20, 102-21, 102-26, 102-27
The Board of Directors currently has
nine members, but the maximum num-
ber allowed is 11, according to its bylaws.
In 2016, two new members joined the
board: Carla Schmitzberger and Ro-
berto Marques. They bring with them
a wealth of knowledge of internationa-
lization, marketing, consumer goods,
sales and retailing strategies, among
other areas. During the same year, Luiz
Ernesto Gemignani left the board, after
nine years of valuable contributions to
Natura. Under this new configuration,
we continue to have a 55% majority of in-
dependent board members, which is hi-
gher than the requirements established
by the Novo Mercado listing regulations.
in 2015. Structural
The members of the Board of Direc-
tors serve a one-year term, with the
possibility of renewal through a vote
at the Annual General Meeting (AGM).
In 2016, the implementation of stra-
tegic projects dominated the board’s
agenda, following the strategy review
carried out
is-
sues relating to our business, such as
breathing new life into direct selling,
the opportunities presented by mul-
internationalization
ti-channel and
and consolidation of
International
Operations were the main topics dis-
cussed at the six meetings that took
place during the year. A working group
of board members and company exe-
cutives was set up to further explo-
re the subject of expanding into new
regions. Other topics on the Board’s
agenda for 2016 were executive lea-
dership, organizational structure and
personnel management.
Four theme-specific committees su-
pport he board - all of which are for-
mally comprised of board members
only since 2013– as follows: Strategy;
Personnel and Corporate Develop-
ment; Corporate Governance; and Au-
diting, Risk Management and Finance.
The Auditing Committee also includes
consultants who are not board mem-
bers. Learn more about the struc-
ture of each committee here. 102-19.
31
2016 ANNUAL REPORT BOARD OF DIRECTORS IN DETAIL
Age groups (%)
Gender (%)
Term
Up to 45 years old
Older than 45 years old
male
female
Up to one
year
Two to
three years
More than
three years
11%
22%
22%
89%
78%
56%
22%
SELF-ASSESSMENT
102-28
In 2016, the Board of Directors carried
out its biannual self-assessment anal-
ysis. The previous one had been carried
out in 2013. The overlong period be-
tween analyses was due to the recent
shake-ups in the board.
The main takeaways obtained from
this assessment were the need for
more integration between the board
and the Executive Committee, pursuit
of a structure that optimizes support
for the organization and determination
to achieve constant evolution in board
procedures.
BOARD OF DIRECTORS*
102-22
Antonio Luiz da Cunha Seabra
Guilherme Peirão Leal
Pedro Luiz Barreiros Passos
Co-Chairmen
Carla Schmitzberger
Giovanni Giovannelli
Marcos de Barros Lisboa
Plínio Villares Musetti
Roberto de Oliveira Marques
Silvia Freire Dente da Silva Dias
Lagnado
Board members
See the profiles of Board of Directors members here
*Valid as of December 2016.
Risk management
102-30, 102-31
A review of our corporate risk man-
agement model was initiated in the
fourth quarter of 2016. We have drawn
up a broad classification of the differ-
ent types of risk, dividing them into
four groups:
• “Strategic”, related to the business
model, governance and the environment
within which the company operates.
• “Operational”, linked to internal pro-
cesses and business continuity.
• “Financial”, market, credit and liquidity
risks.
• “Regulatory”, related to the applica-
ble sectoral regulations. Social, envi-
ronmental and economic factors are
included in this classification, with the
exception of operational risks.
Using this classification, we conduct-
ed a thorough analysis of the Natura
Strategic Plan, and its guidelines for
Brazil and for International Opera-
tions, as well as their enablers. As a
result, we were able to define the main
risks affecting the implementation of
short, medium and long-term busi-
ness strategies (see the table below).
It should be emphasized that Exec-
utive Committee and the Board of
Directors, through its Auditing, Risk
Management and Finance Commit-
tee oversee all risk management work
conducted at Natura.
32
2016 ANNUAL REPORT Main risks currently being monitored
102-15
Challenge
Actions
Management of the brand
and commercial model,
including their appeal to
consultants
Strategy implementation
Innovation capacity
Product research,
development, manufacturing
and quality
Disruption of our
Information Technology (IT)
systems
We are constantly monitoring the rest of the industry, including consumer
preferences and spending patterns. We focus on projects that help
develop our commercial model, and are aligned to our value proposition
and Strategic Plan, which are reviewed annually. That is the case with
the new sales formats, such as the digital relationship platform (Rede
Natura) and retail experiences, such as the marketing of the Sou (I Am)
line in pharmacies and Natura’s own stores. Furthermore, the company is
investing heavily in the revitalization of direct selling, in order to preserve its
high quality, close relationship with all its Natura consultants.
We conduct an annual review of our Strategic Plan and short, medium and
long-term goals, including investment decisions regarding acquisitions
and equity stakes, as well as entry into new markets. This activity involves
all business units. The strategies and revisions thereof are presented and
discussed during Executive Committee meetings and are subject to the
approval of the Board of Directors.
We continuously invest in innovation, through a variety of different fronts:
commercial strategy, digital platforms, product development, logistics,
distribution networks etc. We maintain strict control over registration of all
intellectual property, especially patents, industrial designs and trademarks.
These steps also help mitigate strong competition from Brazilian and
multinational manufacturers that offer product lines that are similar to ours
and sometimes compete within our direct selling channel.
Natura is permanently committed to the health and safety of its customers.
Therefore, we have established strict internal procedures, starting from a
product’s concept development all the way through to making it available in
the market. We also maintain a high-standard positioning, revolving around
our commitment to truth and transparency. The occupational risks inherent
to our operations are addressed by following the company’s Occupational
Health and Safety Policy and taking preventive measures. Furthermore,
Natura maintains an open line of communication with all trade union
bodies, recognizing them as legitimate representatives of employee
interests, regardless of rank or hierarchy, and always strives to reach a
solution that is beneficial to all parties involved.
Our major IT systems are managed by takings all steps necessary to
maintain operational stability. We have data and server redundancy, and
information backup routines. We also maintain total control over access
to our systems and are constantly monitoring them to detect security
vulnerabilities in databases and infrastructure components. Natura has put
in place a robust management strategy for Information Security, following
the guidelines set out in our Code of Conduct, and is always working to raise
employee awareness, and ensure adherence to ISO 27.002:2013 standards,
as well as map and deal with information security risks.
33
2016 ANNUAL REPORT Challenge
Actions
Attracting and retaining
executives and developing
leadership
In order to maintain a high level of engagement among our leadership
and encourage their development, we offer Mosaic, an Education and
Development program consisting of a mix of coaching/formal training and
self-development. We offer a remuneration package that is above market
level, as a way to provide recognition and retain staff, but also to share
the wealth we have generated with all employees. Moreover, we review
the succession chart every year, seeking to identify professionals with the
potential for executive positions.
Climate change 201-2
Our efforts aim at combining economic and socio-environmental gains.
Strategic projects concerning impact mitigation are now transversally
structured and have become formal procedures within the company. An
example is the Carbon Neutral Program, which gives priority to reducing
direct and indirect emissions throughout the chain, as well as offsetting
100% of all unavoidable emissions.
Socio-biodiversity
The use of socio-biodiversity inputs follows Natura’s policy for the
Sustainable Use of Socio-Biodiversity Products and Services, which ensures
the fair distribution of benefits to supplier communities and the sustainable
management of assets, in addition to complying with new legislation
governing access to the country’s genetic heritage. Under the Amazon
Program, Natura also seeks to boost the development of sustainable
businesses based on biodiversity and traditional and/or cultural knowledge.
Legal, sectoral regulation
and taxes
We closely follow all changes made to different aspects of the law, such as
civil, tax or labor laws, because of the considerable impact that any legal
changes can have on our financial situation, business model and operating
results. We constantly monitor federal and state taxes applicable, as well
as the activities from industry representative bodies such as ABIHPEC (for
Beauty Products) and ABEVD (for Direct Selling).
Other external risks (interest
rates, exchange rate
fluctuations, inflation, etc.)
Our senior management constantly monitors external risks deriving from
the economic scenario, and makes any necessary adjustments to our
strategic planning, should the need arise.
Business scenario (Brazil and
International Operations)
Constant monitoring of the political and economic situation in the countries
where Natura operates, with adjustments made to the operating strategy, if
necessary.
34
2016 ANNUAL REPORT Ethics and transparency
102-16, 102-17
In 2016, we were awarded the Pro-Eth-
ics seal, an initiative from the Office of
the Brazilian Comptroller General and
the Ethos Institute that recognizes or-
ganizations that are committed to es-
tablishing an ethical and transparent
business environment.
This public acknowledgement rein-
forces our efforts to promote trans-
parency and integrity. Over ten years
ago, we established the Ombudsman’s
Office, the company Code of Ethics and
the principles that guide our interac-
tions with the main groups with which
we interact. In 2015, we created the
Legal and Compliance Department
and the corruption whistleblowing
channel was reinforced. All complaints
received are evaluated and discussed
by the Ethics Committee, which assists
the Executive Committee. Suppliers,
partners, customers and consumers
can submit complaints by e-mail to
ouvidoria@natura.net.
The Natura Code of Conduct dates
back to 2006 and is reviewed peri-
odically. Its most recent revision took
place last year.
Its latest version can be accessed on
our Investor Relations webpage. Our
main policies – regarding securities
trading, related party transactions,
dividends and disclosure – are also
available on our website.
Furthermore, all our suppliers un-
dergo training related to the Natura
Code of Ethics. When they are hired,
they must complete the training pro-
gram through an online tool.
Over the years, Natura has imple-
mented all best
internal control
practices, with a view to obtaining
reasonable assurance that materi-
al (significant) errors in its financial
statements will be avoided and/or
detected early. In 2015, the scope
of these procedures was extended
to Argentina for the first time, and
in 2016, it was extended to all other
Latin American countries where the
company operates.
Commitment to integrity
Based on its beliefs and its long-standing commitment to
upholding ethical values and building a fairer, more egali-
tarian, participatory and democratic society, Natura val-
ues characteristics such as honesty, integrity and trans-
parency in all its activities and businesses.
We consider it essential for those same values to perme-
ate our company’s relationships with the government and
public bodies, whether they be a part of the executive,
legislative or judicial sphere, and always show respect for
the prevailing legislation.
Our conduct shall be fair, correct and open, and we will act
in an ethical and transparent manner in all our business-
es and commercial and institutional relationships.
We are committed to complying with national and inter-
national anti-corruption and bribery laws that are ap-
plicable wherever we operate, as well as to introducing
and applying monitoring and awareness building pro-
grams aimed at addressing the risk of bribery and cor-
ruption.
We were one of the first companies to join the Business
Pact For Integrity and Against Corruption (in July 2000),
developed by the Ethos Institute, in partnership with Patri
Government Relations and Public Policy, the United Na-
tions Development Program (UNDP), the United Nations
Office on Drugs and Crime (UNODC) and the Brazilian
Committee of the Global Compact.
A Pro-Ethics company
Find out more
Natura was awarded the Pro-Ethics seal,
presented by the Office of the Brazilian
Comptroller General and the Ethos
Institute.
This initiative provides recognition to
organizations that are committed to
establishing an ethical and transparent
business environment.
See our Code of Conduct and policies here.
Read more about indicators related to the
subject on page 122.
35
2016 ANNUAL REPORT Our products
and concepts
OUR PRODUCTS AND CONCEPTS
A new organization
focused on innovation
102-2
We see innovation as the path that
has brought us to where we are now
and as an essential factor in our con-
tinuing to be a company that is im-
portant to society, with a product
portfolio that meets the constantly
changing demands of our consumers.
Natura is concentrating its efforts on
increasing the speed with which it is
known ability to innovate in a sustain-
able manner generates value for the
brand and gives rise to products and
services. To make this possible, the
Marketing, Innovation and Sustain-
ability areas have been brought to-
gether under the leadership of a sin-
gle vice-president.
The restructuring aims to reinforce the
Natura way of promoting innovation:
identifying consumer demand and
emerging issues in society, develop-
ing a solution that meets those needs
and then delivering it, in the form of a
product or service, while emphasizing
the relationship of its sub-brands with
social and environmental causes.
The year 2016 saw the overhauling
of important brands in our portfolio.
The Ekos line was relaunched, with
new formulas that further validate the
benefits of each ingredient stemming
from the Brazilian socio-biodiversity.
The use of recycled PET in the line’s
plastic packaging rose from 50% to
100%, thereby contributing to the in-
creased use of material that is recy-
cled after consumption. Moreover, the
Ekos refills are 100% made of green
polyethylene.
A pioneer in questioning standards
of beauty and behavior, the Chro-
nos line has completed 30 years and
gained new formulas and packaging,
in a blend of natural ingredients and
science.
INVESTMENTS
Investment in innovation declined in
relation to the previous years and was
equivalent to 2.4% of our net revenue.
The innovation index, that shows the
sales of products launched within the
last two years as a proportion of total
sales, came to 54.3%, thus proving yet
again the importance of innovation to
our revenues. Despite it being a low-
er percentage than that achieved in
2015, the index remains at a high level
in comparison to the standards of the
cosmetics industry.
Indicators of innovation
Investment in innovation (R$ million)
2014
216
Proportion of net revenue invested in innovation (%)
3
Number of products launched 1
Innovation index (%) 2
239
67,9
2015
2016
221
3
220
58,9
187
2,4
255
54,3
1. The number of products launched includes only those products that represent a new value proposition for the consumer, with new formulas and packaging.
2. The innovation index represents the sales of products launched within the last 24 months as a proportion of the total gross revenue for that year (only in
Brazil).
Natura is the 3rd most innovative company in Brazil
Natura is considered the most innovative consumer goods
company in Brazil, according to the second edition of the
yearly publication Valor Inovação Brasil, edited by the
Strategy& consulting team at PwC, for the Valor Econômi-
co business newspaper. In the 2016 edition, we moved up
from second to first place in our industry, while maintaining
our overall position as the third most innovative company
in the country. Three pillars of the innovation chain were
analyzed: intention, efforts and results, using both qualita-
tive and quantitative indicators.
37
2016 ANNUAL REPORT Shared innovation
The commitment to innovation runs
across the board at Natura, going far
beyond the development of products
in short, medium and long-term proj-
ects. We have research centers at our
facilities in Cajamar (São Paulo state)
and Benevides (Pará state), as well as
an innovation hub in New York, which
aims to detect international trends.
A significant share of Natura’s projects
are developed under an open and col-
laborative innovation model, togeth-
er with renowned research institutes,
other private sector organizations,
universities, and laboratories, among
others. The company set up the Na-
tura Campus Program, in 2006, which
brings these different entities togeth-
er to innovate.
The main initiatives created in the past
year by them are: the development of
the Center for Applied Research of
Well-being and Human Behavior, in
partnership with Fapesp (Foundation
for Research Support of the State of
São Paulo) and three universities; the
launch of the Natura Startups pro-
gram, to get the company working
closer with innovative entrepreneurs;
and holding the second hackathon,
promoted by the Natura Campus.
THE SCIENCE OF WELL-BEING
Inaugurated in June, the Center for
Applied Research of Well-being and
Human Behavior is the result of a part-
nership with Fapesp. The Center is lo-
cated within the USP (University of São
Paulo) Psychology Institute. Its activi-
ties are boosted by the participation
of researchers from Unifesp (Federal
University of São Paulo) and Mackenzie
Presbyterian University, who hail from
different fields. Their goal is to conduct
research on well-being across different
fields. The 10-year investment totals to
R$ 20 million, and this amount is split
between Natura and Fapesp.
NATURA STARTUPS
In 2016, we decided to formalize our ex-
isting relationship with Brazilian start-
up companies. Our aim is to create busi-
ness opportunities in partnership with
innovative companies, thus promoting
an entrepreneurial environment and
connecting these startups to opportu-
nities within our company. Over 2,500
startups registered to participate and
22 are currently developing projects
together with Natura, while another ini-
tiative that brings together Natura and
Brazilian startups is being developed
under the Amazon Program. Find out
more (in portuguese) at http://www.
natura.com.br/a-natura/inovacao/
startups (see more on page 54).
CAPES-NATURA CAMPUS AWARD
This award is the outcome of the open
innovation program partnership be-
tween Natura Campus and Capes (Co-
ordination for the Development of Peo-
ple in Higher Education), which is linked
to the Brazilian Ministry of Education.
Its goal is to stimulate high-level and
high impact research in areas that are
of strategic importance to Brazil, such
as sustainability and biodiversity. The
best papers are published in interna-
tional scientific journals. In 2016, there
were 268 entries, six finalists and two
winners. The topics of the winning pa-
pers were ‘sustainability: new materials
and technologies’ and ‘Socio-biodiver-
sity and biological conservation’. Com-
petitions will be held every two years.
Other activities promoting innovation
COCRIANDO
In this program, we invite people from
our relationship network, mainly com-
prised of consultants and consumers,
to discuss different topics and co-cre-
ate with Natura. In 2016, there were
four sessions, under the titles: Viva
sua Beleza Viva (Live your true beau-
ty); Cocriação Ciranda (The wheel
of cocriation); Avalie meu Look (Rate
my look); and, towards the end of the
year, Jornada Homem (A man’s jour-
ney), the first one to focus solely on
men. To find out more, go to our web-
site at: www.cocriando.natura.net.
EKOS HACKATHON
The
innovation marathon Mão na
mata: traga a natureza para seu dia
a dia (Dip into the jungle: bring nature
into your daily routine) was organized
to drive projects that would bring the
Ekos line closer to its consumers. Its
main purpose was to enable consum-
ers’ engagement with Natura and the
Amazon region, as well as connect peo-
ple to projects in order to create a sig-
nificant impact. We reached more than
4.5 million users through social net-
works and 18 workshops for developing
prototypes were set up.
NATURA INNOVATION DAY
In May, Natura Innovation Day brought
together representatives of companies,
universities, startups, investment funds
and other stakeholders to share the
knowledge amassed through the Ekos
hackathon. The event also served to
launch the Natura Startups program.
INOVA TALENTOS
In 2016, we completed the first cycle
of Inova Talentos, an IEL/CNI (Euvaldo
Lodi Institute, linked to the National
Confederation of Industry) program
whose objective is to raise the number
of skilled professionals involved with
innovative activities within the Brazil-
ian business sector. Under this initia-
tive, scholarship holders work at the
company, and are guided by Natura
tutors. This enables the exchange of
experience and knowledge between
all those involved, while generating
gains for Natura itself. The work con-
ducted by the 33 scholarship holders
helped reduce the expected delivery
time on 16 priority projects and led to
the creation of seven new initiatives.
This collaboration also yielded four of
the seven state awards presented to
the program as a whole, including first
place in the Teams category. In 2017,
we will develop 13 new projects, as
part of phase 2 of Inova Talentos.
38
2016 ANNUAL REPORT CONSUMER SAFETY
10 years of no animal testing
In 2016, we celebrated one decade
without animal testing of any kind,
a decision rooted in our beliefs and
values that has placed us at the fore-
front of the cosmetics industry. Having
made that commitment, we faced up
to the challenge of finding innovative
technological solutions to provide
testing that would guarantee the
same level of safety for Natura prod-
ucts.
In 1998, we committed ourselves to
phasing out animal testing. In 2003,
we achieved the first milestone, by
halting the testing of finished prod-
ucts on animals. Three years later, we
took the definitive step of not carrying
out animal testing at any stage of our
product development process.
To make this possible, Natura posi-
tioned itself along the most innovative
ideas being put into practice in Eu-
rope, the region that was spearhead-
ing the search for alternatives to an-
imal testing. In 2006, we opened the
Advanced Technology Center in Paris,
France, a laboratory that brought our
researchers closer to major Europe-
an innovation hubs for the analysis of
alternative technologies that would
ensure testing quality for the safety of
our consumers. That is how we were
able to bring existing technologies to
Brazil and develop our own methodol-
ogies, in-house or in partnership with
Brazilian universities, as well as stim-
ulate a discussion regarding this sub-
ject in Brazil.
We now boast 67 alternative testing
methodologies, which, together, en-
sure the effectiveness and safety of
our products.
In Brazil, there are no regulations that
require companies to ban animal
testing altogether when developing
cosmetics. A partial ban – for specific
clinical trials – is expected to be put in
place in 2019 and will help the industry
to find solutions to the challenges that
Natura has been faced with for years.
One of the biggest challenges is train-
ing Brazilian suppliers to carry out
certain safety tests – many of which
are currently only available abroad,
thus making compliance with such
procedures a lot more expensive.
SAFETY WHEN USING NEW ACTIVE
INGREDIENTS
The pioneering adoption of multi-
ple socio-biodiversity inputs has in-
creased the challenge Natura faces
to ensure product safety. Whenever
a new plant is identified as a possible
raw material for a new product, the
extracts, oils or butters obtained from
it are studied in labs to identify its
components. The active ingredients
then undergo rigorous safety tests,
which assess the cytotoxicity (show-
ing whether the substance is toxic to
cells), phototoxicity (showing whether
it can become dangerous or damage
the skin when subjected to sunlight)
and mutagenicity (which evaluates
the probability of causing cancer after
prolonged use).
CONTROVERSIAL INGREDIENTS
103-2, 103-3
Natura’s product portfolio
includes
only ingredients that are well known
and proven to be safe, according to
international
scientific community
standards. Our team of researchers
monitors the international discussions
surrounding the growing use of each
one by different industries, keeping
a particularly watchful eye over the
so-called controversial
ingredients.
When there is evidence that a sub-
stance poses a risk to the environment
or human health, Natura chooses to
replace it in its formulas. 102-11, 416-1
That is the case, for example, of Tri-
closan, which is widely used in a variety
of segments, such as cosmetics, ther-
apeutic and veterinary products, and
many more. Its function is to prevent
or inhibit contamination by microor-
ganisms (bacteria, fungi and yeasts).
Its widespread use by many industries
can lead, over the long term, to poten-
tial environmental damage, due to its
poor degradability. Studies also indi-
cate that it has the potential to cause
hormonal changes in humans.
Acting proactively to ensure the safe-
ty of our formulas, we have banned
the use of Triclosan in the devel-
opment of new products since July
2008, and are continually striving to
replace it with new, less aggressive
ingredients that are
antibacterial
more environmentally friendly, while
preserving the safety and efficacy of
our products. We have made prog-
ress in this endeavor and in March
2016 we removed Triclosan altogeth-
er from our product portfolio. Never-
theless, it may still be possible to find
products on the market containing
this ingredient, since their expiration
date ranges from two to four years
from the manufacturing date.
Phthalate and paraben are other
controversial substances that have
already been banned by Natura.
Read more about our consumer safety
procedures on page 134.
39
2016 ANNUAL REPORT Natura
multi-channel
NATURA MULTI-CHANNEL
Relationship selling
103-2, 103-3
Injecting new life into the business of
selling our products through Natura
Consultants is one of our strategic ob-
jectives and, in 2016, we worked hard to
build the bases for our project focused
on overhauling Relationship Selling.
The project focuses on elevating the
activity of being a Natura Consultant
to a profession – starting with improv-
ing the earning potential of our con-
sultants and the development oppor-
tunities that are available to them, all
while providing an increasingly better
shopping experience to our consumers.
In order to expand the development
opportunities available to our network,
we will implement offer segmentation
strategies and make extensive use of
technology to enhance the power of our
network. The intensive use of business
intelligence and CRM tools and methods
developed by us in the last few years, will
enable us to provide highly customized
options for each type of consultant and
guide our offers in terms of incentives,
remuneration, training, relationships
and management.
Using this information, we designed the
new version of our network, which is be-
ing subdivided into groups: professionals
working in the beauty universe (Beau-
ty Specialist), microentrepreneurs with
a physical point of sale (Beauty Busi-
nesswoman) and all other consultants,
whether they have small, medium or
large sales volumes (Beauty Consultant).
The strategy provides distinctive options
for each of the sub-groups, regarding
personal development and opportuni-
ties for growing a consultant’s business.
By treating each relationship as unique,
we can provide consultants with the
best tools to increase their earnings
and give consumers options tailored to
their needs, whether it be experimen-
tation, convenience or assistance.
NUMBER OF CONSULTANTS
The troubles faced by the Brazilian
economy last year also led to a reduc-
tion in the number of active consultants
in the country, due to low sales volumes
and rising default rates. We are con-
fident that the new value proposition
being introduced to our consultants will
prove effective in turning this situation
around. However, there has not been
enough time for this plan to influence
our indicators, since it is being rolled out
in stages, the first of which occurred in
late 2016. The implementation of differ-
ent project elements is expected to con-
tinue throughout 2017 and includes new
sales force management practices that
are capable of identifying the need for
improvement in an ongoing basis.
Consultants – Brazil
2012
2013
2014
2015
2016
Natura Consultants in Brazil (thousands)
1,268,5
1,290
1,319
1,377
1,256
Natura Consultant Advisors
12,125
11,957
11,328
9,500
8,310
102-43/102-44
NC loyalty index (%) – Brazil
Satisfaction¹
Loyalty2
102-43/102-44
NCA loyalty index (%) – Brazil
Satisfaction¹
Loyalty2
2014
2015
2016
91.8
27.5
93.3
29.8
93.1
31.2
2014
2015
2016
91.1
29.6
92.8
29.5
94.6
31.7
1. Satisfaction shows the proportion of NCs and NCAs who are “totally satisfied” or “very satisfied” (Top2Box). 2. Loyalty: the proportion of individuals surveyed
who conferred the maximum grade (“Top1Box”), on a scale of 1 to 5, to three factors: satisfaction, intention to continue their relationship with Natura and
recommendation.
41
2016 ANNUAL REPORT 203-2
Average annual income generated (R$)
Natura Consultants – both female and male (NCs)1
Natura Consultant Advisors (NCAs)2
2014
2015
2016
4,2902
14,306
4,161
17,614
4,028
18,428
1. Average annual income earned by our NCs through product sale. 2. The NCAs earn a performance-based commission (number of NCs who place orders
and business volume).
INTERNATIONAL OPERATIONS
We continue to encourage a closer re-
lationship with Natura Consultants in
other Latin American countries. The
consolidated number of consultants
increased by 7.5% in 2016, to 543,000,
with notable increases of 15% in Ar-
gentina and 22% in Colombia. In the
countries where Natura’s operations
are more consolidated (Argentina,
Chile and Peru), our focus is on in-
creasing productivity, with moderate
channel growth. However, in our de-
veloping operations (Colombia and
Mexico), we seek to rapidly increase
the number of consultants and main-
tain productivity levels.
We decided to close our direct selling
operations in France, where we had
around one thousand consultants.
We are now concentrating our re-
sources on channels with more local
relevance, such as our Natura store
and e-commerce.
The results of the loyalty survey once
again reflect our efforts directed at
maintaining a high level of quality in
our relationship with our consultants.
The level of loyalty of local consul-
tants has remained stable at 37.4%
Consultants – International Operations, by country
Argentina
Chile
Mexico
Peru
Colombia
France
2016
161.2
74.3
125.8
94.0
87.8
0
Consultants – International Operations, by country
2015
2016
Total
505.1
543.0
Natura Consultant Advisors – International Operations, by country1
2016
Chile
Peru
Colombia
1. We do not employ the NCA relationship type in Argentina or Mexico.
Natura Consultant Advisors – International Operations
2015
2016
Total
2,270
2,273
681
901
691
42
2016 ANNUAL REPORT In 2016, the Rede Natura closed out
its first year of activity in Chile to great
success. In the first quarter of 2017,
we started implementing the digital
plataform in Argentina. Having iden-
tified a growing demand for the Rede
Natura, we can speed up the roll out to
our remaining international markets.
The expertise that Natura has gained
in retail is also starting to be consid-
ered for implementation in our other
operations in Latin America.
102-43 / 102-44
Natura Consultant loyalty index (%) – Interna-
tional Operations (%)123
2014
2015
2016
Loyalty – NCs in IOs
Loyalty – NCAs in IOs4
39
45
37
52
37
53
1. The indicator was revised in 2016. We decided to disclose only the consolidated figures for the countries that comprise our International Operations
(Argentina, Chile, Colombia, Mexico and Peru), as the breakdown was considered to be information of strategic value to Natura. 2. Source: Ipsos Institute. 3.
Loyalty: the proportion of individuals surveyed who conferred the maximum grade (“Top1Box”), on a scale of 1 to 5, to three factors: satisfaction, intention to
continue their relationship with Natura and recommendation. 4. Includes only those countries where this type of relationship is present (Colombia, Peru and
Chile). In Mexico, where we employ a unique multilevel strategy, the head consultants, equivalent to NCAs, are included in survey results.
43
2016 ANNUAL REPORT Do more for our consultants
103-2, 103-3
We want to make a difference in the
lives of consumers, by providing them
with innovative high quality products
that promote beauty and well-being.
Making a difference is also our main
goal when we think about our network
of consultants, which now comprises
more than 1.8 million Natura Consul-
tants (NCs). To that end, we have de-
vised the IDH-CN methodology, which
is used in Brazil, and monitors consul-
tants’ living conditions and measures
their annual development (read more
about this methodology below).
The first results obtained from using
this new index revealed the consul-
tants’ desire to further their education.
Because we are committed to having
a positive impact on the lives of our
consultants, and are also firm believers
that education can be a great driver
of personal and professional evolution,
we launched an education program
focused on NCs (and extended to their
family members) in August 2016. De-
signed in partnership with the Natura
Institute, the program offers a range of
learning experiences, such as both fa-
ce-to-face and distance learning gra-
duate and postgraduate programs,
language courses, and vocational tra-
ining courses, at a discount or with full
scholarships.
This program is unique among the
companies that operate using direct
selling in Brazil. In a short period – from
August to December 2016 – approxi-
mately 11,000 people went back to
school through one of the courses be-
ing offered by the program. Approxi-
mately 20% of all those who enrolled
were family members of consultants.
THESE ARE OUR PROGRAM
PARTNERS:
Estácio University – Consultants have
a minimum 30% discount in 80 gra-
duate or postgraduate courses (fa-
ce-to-face or online). In 2016, 20 full
scholarships sponsored by Crer Para
Ver were awarded to students of online
technology courses.
Geekie Games – An online learning
platform that helps high-school stu-
dents prepare for the Enem exam, with
discounts starting at 30%. In 2016, 200
full scholarships were awarded by Crer
Para Ver.
Prepara Courses – Chain offering pro-
fessional training courses, held at more
than 400 centers around the country.
Three courses are offered completely
free of charge (personal finance, time
management and negotiation techni-
ques), while discounts and full scholar-
ships are available for other programs.
Wizard by Pearson – Chain of langua-
ge schools that offers courses at a dis-
count to consultants and their family
members throughout Brazil. Presently,
more than 600 schools are included in
the partnership.
Khan Academy – Free online cour-
ses to boost mathematical skills. The
content available has been specially
tailored to help with consultants’ daily
activities.
In addition to partnerships, the pro-
gram also provides consultants with
access to the Crer Para Ver (Believing is
Seeing) Education Platform, a website
that offers varied content and possibi-
lities for engaging in the education of
their children, students and the local
community, through numerous activi-
ties. There is also an online Book Club,
developed exclusively for the consul-
tants, which in the last year alone dis-
tributed nearly 1,000 books. In 2016,
11,000 consultants also received text
messages containing educational tips
appropriate to the age group of their
children.
In 2017, the program will start offering
new options relating to culture, finan-
cial education and civil rights (with a
particular focus on women’s rights). We
will also expand the number of part-
nerships with educational institutions
and step up the delivery of educational
tips by text message.
IDH-CN
103-2, 103-3
Natura
introduced the world’s first
corporate human development indica-
tor, the HDI-NC, in 2014. Its design was
inspired by a methodology of the same
name currently employed by the United
Nations Development Program (UNDP).
It is used to monitor the situation of
Natura Consultants (NCs) in relation to
three aspects of their everyday lives:
health, knowledge and work. Results
are measured over a range from 0 to 1
(the latter being the maximum human
development standard attainable, so
the closer to 1 the numbers are, the be-
tter the group’s human development).
As in 2014 and 2015, more than 4,000
consultants were interviewed last year
and the overall HDI-NC continues to
improve, reaching 0.593 in 2016. Over
the three years the study has been con-
ducted, the indicator has increased by
7.81%, with a 0.5% rise in 2016. However,
we did notice some challenges regar-
ding the assessed aspects. Financia-
lly, the consultants also felt the impact
of overall reduced purchasing power
caused by the economic crisis in Brazil.
Nevertheless, the indicator shows that
consultants who have been working
with Natura for over a year have higher
HDI levels than those who are still get-
ting started, thus revealing the positive
impact the company has on the lives
and self-esteem of the interviewees
who have been with us the longest.
The HDI-NC will continue to be moni-
tored annually and will help us create
management tools and corporate so-
cial investments that are intrinsically
related to the business and can help
further improve the quality of life of our
consultants. Furthermore, the index
contributes to Natura’s desire to exert
positive economic, social and environ-
mental impacts.
44
2016 ANNUAL REPORT
Cleinilany Dornela, from
Rondônia, was the winner
of Prêmio Acolher in 2016 in
the popular vote
The Natura Movement
Since 2005, the Natura Movement
has been used as a platform to facil-
itate the creation of a collaborative
network to support initiatives that
promote the social development of
Natura Consultants and society as a
whole. In 2014, the platform went dig-
ital (www.movimentonatura.com.br)
and started allowing the participation
of any social entrepreneur – not just
Natura consultants. Since then, the
number of visits has steadily grown.
In 2016, there were almost 2.2 million
visits, a number a lot higher than ex-
pected.
For NCs who are also social entrepre-
neurs, we created the Acolher Awards,
which provide technical and financial
support to winning projects, thereby
increasing their reach. The year 2016
marked the awards’ fifth edition, and
for the first time, Natura’s employees
were able to submit transformative
initiatives where they work as volun-
teers or leaders for consideration.
Learn more about all the
initia-
tives supported by the 2016 Acolher
Awards at (in portguese): www.movi-
mentonatura.com.br/cs/movimento-
natura/premioacolher.
The Natura Movement
2014
2015
2016
Website audience¹2
Participation3
138,187
1,308,917
2,193,662
n.a.
32,724
55,355
1. Calculation of this indicator takes into consideration the number of visitors to the website. 2. In addition to consultants, there are also other groups, such
as consumers, who also access the platform, but it is not possible to single out site activities pertaining to each of the different groups. 3. This calculation
considers only qualified participation: registration of people or initiatives, sharing of content on social networks, interaction through the platform with
initiative owners and voting for the Acolher Awards.
45
2016 ANNUAL REPORT The Consultoria Natura
mobile application
Digital channels
In 2016, Rede Natura doubled in size
and is now one of the biggest digital
sales channels for beauty products
in Brazil. The number of Digital Na-
tura Consultants (DNCs) working on
this platform has surpassed 100,000.
They assist more than 1.7 million reg-
istered consumers.
Consultants who work online through
this platform achieved productivity
increases of 8% in direct selling and
14% in combined sales (traditional
sales model plus Rede Natura). The
frequency of purchases was also
higher. In order to encourage new
consultants to work with a hybrid
proposition, that is, using both for-
mats, we have adjusted our financial
structure, offering reduced franchise
fees for those who want to try out the
new hybrid model, on top of the single
format amount. Consultants’ profits
vary according to the format chosen.
We have also adjusted the incentives
offered to Relationship Managers and
Natura Consultant Advisors (NCAs),
so that their sales through the Rede
Natura have the same value as the
sales made face-to-face.
Since April last year, the Rede Natura
has also been selling directly to final
consumers. This hybrid online system
has boosted sales results, helping the
Rede Natura achieve its operational
break-even point. Visits to the web-
site grew by 78% in 2016 and the con-
version (a visit that becomes a pur-
chase) rate increased by 58%. Fine
tuning promotional activities and an
improved return on marketing invest-
ment also contributed to strong out-
comes.
The Rede Natura generates knowl-
edge that adds value to all our chan-
nels. Digital tools are important allies
in identifying consumer trends and
categories that are most suitable for
each medium, generating data that
is used to adjust marketing strategies
and promotional activities applicable
to all our different sales formats. The
frequency of purchases through dig-
ital channels is also greater. Starting
from 2016, all new consultants joining
Natura will have their own digital sales
space, thus helping train NCs to work
with our digital platform. In addition
to the positive impact it has on their
earnings, this will allow for a stronger
connection with our consultants, en-
abling access to better services and
more training opportunities. This in
turn will improve their performance,
generating benefits that will spill out
into their everyday lives.
Our consultants have other digital
tools at their disposal too, in addi-
tion to the Rede Natura. Launched in
2016, the Consultoria Natura (Natu-
ra Consulting) app for smartphones
and tablets enables users to order
products, check out sales, organize
deliveries to each customer and ob-
tain assistance. It incorporates other
apps with different features, such as
the Rede Natura Chat (which allows
consultants to answer consumers’
questions while they are online on our
sales platform). There are currently
more than 300,000 Natura Consul-
tants using these apps.
46
2016 ANNUAL REPORT Natura in retail
In order to cater to different consum-
er profiles and meet their varied de-
mands, Natura started successfully
selling its Sou line in drugstores in
2015, and, by 2016, it had entered the
Brazilian retail market with its own
stores. Our essence is still firmly based
on Relationship Selling, through the
work of our wonderful consultants,
but we also wanted to provide our
customers with a complementary ex-
perience, through points of sale that
enable experimentation, and drug-
store chains, which serve consumers
seeking convenience and practicality.
Natura store at the
Morumbi Shopping Center
Our first stores in Brazil
The first Natura store opened its
doors in April, at the Morumbi Shop-
ping Center, in the city of São Paulo.
Four other stores were subsequently
opened in the São Paulo state cap-
ital, all of them in large shopping
malls. This strategic decision was
made based on detailed research,
through which a repressed demand
was detected among A and B con-
sumer profiles, who stated that they
were familiar with and liked Natura
products, but were not used to buy-
ing it from consultants.
The first results surpassed our ex-
pectations, validating our decision,
and encouraging us to accelerate the
pace of expansion in 2017, including
to other cities throughout Brazil.
Our stores sell around 40% of the en-
tire Natura product portfolio, includ-
ing fragrance lines and the brands
Todo Dia, Ekos, Mamãe e Bebê, Una
and Chronos. In 2017, we will also
start developing products, gifts and
packaging exclusively for this sales
channel. All stores allow for exper-
imentation, meaning that all prod-
ucts can be tried out by consumers in
an environment that simulates their
day-to-day use – our stores are all
equipped with taps and basins for
soaps and bath products. Our con-
sultants are also using these new
stores: they bring in clients to exper-
iment with products before placing
an order with them.
The store staff is comprised of profes-
sionals hired by Natura and trained
to provide beauty advice and accu-
rate information about each of our
items.
47
2016 ANNUAL REPORT Our stores in New York and Paris
In December 2016, we held the pre-opening ceremony of
our first store in New York. We started our operation by sell-
ing the Ekos line, introducing this new market to the best in
terms of cosmetics made from natural Brazilian inputs. Our
portfolio will be expanded in the future, with the introduc-
tion of the Chronos and Mamãe e Bebê (Mother & Baby)
lines. Product packaging has been adapted to this market.
As way of emphasizing our origins, all products bear the
term “Natura Brasil” before the line name.
In Paris, we are located in the commercial district of Mara-
is, a bustling area of the French capital. Our sales portfolio
there is focused on the Ekos, Chronos and Mamãe e Bebê
lines. We are also experimenting with selling our products
in multi-brand stores specializing in cosmetics. Our e-com-
merce operation based in France is already selling to oth-
er countries in Europe. In order to direct our resources to
these new sales channels, we decided to terminate direct
selling activities in France, where there were about one
thousand consultants.
Our goal with this presence in two important global beau-
ty care hubs is to attain a scalable model for developed
markets. To that end, we spent 2016 working hard to tai-
lor our portfolio and packaging to these markets. We also
explored different commercial models, to try to identify the
attributes that would help set Natura products apart, so
as to attract an increasing number of consumers.
Convenience at drugstores
Following the successful roll out of
the Sou line to drugstores, in 2015,
we doubled the number of points of
sale within the Raia/Drogasil chain
– from 700 to more than 1,400 drug-
stores throughout Brazil. In Decem-
ber 2016, we also started offering the
Sou brand at branches of the Drog-
aria São Paulo chain, and in January
2017, we expanded our sales to the
Pacheco chain, in Rio de Janeiro, and
the Panvel chain, in Rio Grande do Sul,
totaling 2,955 pharmacies across the
country that are now selling Natura
products.
48
2016 ANNUAL REPORT Our processes
OUR PROCESSES
Commitments to the future
102-12
In 2014, we launched the 2050 Sus-
tainability Vision and committed our-
selves to making Natura a company
with an active, positive impact over
the environment and our society,
thus altering current expectations
of merely reducing and mitigating
our impact. With that in mind, we
have established goals that are to be
achieved by 2020, and which will help
us achieve the transformations we
seek by 2050.
As a member of the United Nations
Global Compact, we are fully commit-
ted to the 2030 Agenda for Sustain-
able Development, because we believe
this is a call to action for companies to
rethink their businesses in light of a
burgeoning form of capitalism. To this
end, we carried out an impact analysis
in 2016 to evaluate the transformative
potential of Natura’s activities in rela-
tion to the 17 global goals that are to
be achieved by 2030.
This study pointed out that, through
initiatives relating to issues such as
carbon, waste, women’s empower-
ment, education, water, biodiversity
and the Amazon, we are contribut-
ing, directly or indirectly, to 16 of the
17 SDGs, the exception being SDG 14
– Life Below Water – which has to do
with oceans.
We believe that, in order to help our
transformative activities achieve the
necessary scale to make a significant
impact, our main sub-brands must
become platforms that promote new
production and consumption models.
In 2016, we became the first Latin
American company to disclose the
results of its EP&L (Environmental
Profit and Loss) survey. The study tal-
lies the “environmental accounting” of
the company, calculating the positive
and negative impacts of all stages of
production, marketing and final dis-
posal of any waste generated (see
below).
We also made important progress
in the Amazon Program, reaching
the sum of R$ 972.6 million in busi-
ness turnover in the region during
2016, bringing us closer to the goal of
reaching R$ 1 billion by 2020 (see more
on page 54). The work of developing
sustainable production chains in the
region, stimulated under the Amazon
Program, has led to the conservation
of 257,000 hectares of standing for-
est, as well as enabling development,
generating income for 2,119 families in
the Amazon and affecting the quality
of life of more than 8,000 people in the
region.
Sustainable Development Goals
In September 2015, during the Sustainable Development Summit, all 193 member states of the United Nations adopted
the 17 Sustainable Development Goals (SDG). This new global agenda was created to provide continuity to the achieve-
ments obtained through the eight Millennium Development Goals, which had been in force for 15 years. In addition to
shared prosperity, health and well-being, the SDGs include the conscientious use of natural resources in the face of cli-
mate change and the threat it poses to all life forms. They are a call to action for companies to rethink their businesses
towards a new capitalism. With our initiatives, we have already contributed towards 16 of the 17 SDGs.
50
2016 ANNUAL REPORT 2050 Sustainability Vision
Main goals
Brands and Products
Area
2020 Goal
2016 Performance
Percent of goal
achieved
Packaging
At least 10% of all Natura
Brazil packaging should be
made of post-consumer
recycled material.
A total of 4.3% of all packaging
made used post-consumer
recycled materials.
2013: 1.4%
2020: 10%
Achieved in 2016: 34%
Climate change
The Natura brand must
reduce its relative emissions
of greenhouse gases by
33% (Scope 1, 2 and 3).
A 0.5% reduction in relative
GHG emissions. This indicator
is directly related to business
performance, but the reduction
was -1.3% in comparison to
2012.
2012: 0%
2020: -33%
Achieved in 2016: 4%
Socio-
biodiversity
Reach a turnover of R$ 1
billion in business volume in
the Amazon region.
The accumulated volume of
business generated in the region
amounted to R$ 972 million.
2010: R$ 89 million
2020: R$ 1 billion
Achieved in 2016: 97%
Waste
Water
Supply chains
Collect and send for
recycling 50% of the waste
generated by Natura
product packaging in Brazil
(ton equivalent).
For the Natura brand in Brazil:
implement a strategy for the
reduction and neutralization
of impact, based on the water
footprint measurement and
considering the entire value
chain.
Ensure by 2015 that 100%
of materials produced
by direct manufacturers
are traceable (last link)
and by 2020 implement a
traceability program for the
other links of the Natura
brand’s value chain.
In 2016, we concluded the
experimental pilot program
introduced the year before to
promote reverse logistics in
the São Paulo metropolitan
area. This included different
sources for collecting post-
consumption waste, such as
collector cooperatives and
the involvement of Natura
Consultants. The experiment
was useful for gaining
knowledge and planning our
strategy, procedures and action.
Additionally, we participated in
the sectorial reverse logistics
project organized by Abihpec.
Using the created methodology,
we began conducting studies
to map projects that have the
potential to reduce our water
footprint.
In progress
Planning stage
Having identified 100% of the
manufacturers in the first link
of the chain, we are working to
extend the overall traceability of
critical chains.
Planning stage
51
2016 ANNUAL REPORT Our Network
Area
2020 Goal
2016 Performance
Customers
Define priority topics and
implement a strategy to
mobilize Natura brand
consumers.
Definition of priority claims for boosting
consumer’s perception of Natura as a
sustainable brand:
_Living Forest
_100% Organic Alcohol
_Commitment to Climate change
_Sustainable Packaging
_Smart Refills
_Quality Education
_No Animal Testing
_Beauty free of stereotyping
Percent of
goal achieved
In progress
Natura
Consultants
Generate interest in
continued education and
offer a broad range of
educational options that
meet their needs.
We have developed an educational program
for NCs and their families, offering partial
and full scholarships for learning experiences
such as: ENEM exam preparatory courses,
vocational training, higher education
programs, and languages courses, among
others. Within three months, over 11,000
people had gone back to school.
In progress
Employees
For the Natura
brand, have women
occupying 50% of senior
management positions
(Director and upwards).
Throughout the year, we achieved a rate of
29% of senior management positions being
occupied by women. Natura signed up to
the UN Women’s Empowerment Principles
and the Brazilian government’s Gender and
Racial Equality Program. We also launched
our own diversity policy in 2016, which gives
priority to four areas, including women’s
empowerment. Moreover, we reviewed our
procedures for selecting, attracting and
developing women with leadership potential.
2013: 29%
2020: 50%
Achieved in 2016:
0%
Local
communities
Develop strategies
for the areas of socio-
biodiversity in the
Amazon region and for
the communities living
near our main operation
hubs in Brazil together
with the local population
and its stakeholders
through open dialogue
and collaborative
construction.
In order to create change on a sizeable scale,
we are working with local governments,
communities and companies under
agreements and partnerships to come up
with development solutions in the Mid-
Juruá (Amazonas), Lower Tocantins (Pará)
and Transamazon (Pará) areas. Together
with local leaders and partners, we have
identified the development priorities of each
territory and agreed upon collaborative
plans setting out initiatives and goals. Local
leadership and institutions are strengthened
and empowered throughout the process.
In progress
52
2016 ANNUAL REPORT Management and Organization
Area
2020 Goal
2016 Performance
Percent of goal
achieved
Management model
For the Natura brand,
conduct an appraisal
of external social and
environmental factors,
taking into consideration
the positive and negative
impacts of the extended
value chain (from extraction
of raw materials to disposal
of products).
Ethics and
transparency
For the Natura brand,
implement total
transparency for providing
information on products
and the progress of the
Sustainability Vision.
An appraisal of external
environmental factors was
carried out for the first
time in 2015, converting
the effects of the business
on aspects such as GHG
emissions, water, waste and
land use and occupation
into financial resources.
The calculation involved
the entire Natura product
portfolio, throughout its
entire value chain. In 2016,
we will conduct the first ever
appraisal study of social
impacts.
We have collaboratively
developed the architecture
of our sustainability
communications, which
organize product
information according
to the interests of our
consumers when they are
looking for more detailed
information.
Under
implementation
Under
implementation
The full list of 2020 goals and commitments can be seen here.
53
2016 ANNUAL REPORT THE AMAZON PROGRAM
The value of the standing forest
103-2, 103-3
Since 2000, with the launch of its Ekos
line, Natura has sought to transform
social and environmental challenges
into business opportunities, having
the Brazilian biodiversity as one of the
main drivers of innovation. In 2011, this
commitment was renewed through the
launch of the Amazon Program, whose
goal is to promote a new, more inclusive
and sustainable development mod-
el for the region, based on the notion
that the forest could be more valuable
if it is standing than if it were cut down.
This initiative encourages the estab-
lishment of sustainable businesses as
an economic alternative for the region
and is currently enabling development
and generating income for 2,119 families
in the Amazon, while helping conserve
256,798 hectares of standing forest.
The Amazon is experiencing a great
paradox. Despite being diversity-rich,
teeming with species, cultures and
knowledge, containing 55% of the
world’s tropical forests and 20% of the
world’s fresh river water, and playing a
fundamental role in the regulation of
the planet’s climate, the region’s political
and economic agenda is driven by ac-
tivities that cause devastation and en-
vironmental and social pressure – such
as growing soybeans, raising livestock,
lumbering, mining and construction of
hydroelectric power plants. That is why
it is paramount to devise new, sustain-
able development models for the region.
In light of this, the Amazon Program
covers three major pillars of activity:
innovation;
science, technology and
development of sustainable chains;
and institutional empowerment.
Closing in on R$ 1 billion
In 2016, we allocated more than R$ 220 million to the Am-
azon region, mainly for purchasing natural inputs (64%), in
addition to investing in industrial facilities, research and
innovation, local development, education and projects for
offsetting carbon emissions. All this has brought the total
sum invested in the region since 2011 to R$ 972 million and
we are now very close to reaching our goal of R$ 1 billion in
turnover by 2020.
1. Science, Technology and Innovation (STI):
This pillar is an instrument of scientific
production, innovation and the gener-
ating of new business whose aim is to
activate and coordinate local, national
and international research and knowl-
edge networks to focus on biodiversity,
sustainable management and agricul-
ture and eco-design.
NATURA AMAZON INNOVATION
CENTER
In 2016, the Natura Amazon Innova-
tion Center (Nina - Núcleo de Inovação
Natura na Amazônia, in Portuguese)
was transferred from Manaus (Ama-
zonas) to Benevides (Pará), where the
Ecoparque is located. The purpose of
the move was to increase the synergy
between research and development
needs in terms of technology and in-
novation, applicable to our factory and
socio-biodiversity production chains.
Since its inauguration, Nina has been
an important hub for the development
of open innovation, both for Natura and
for the Amazon regio (read more about
innovation on page 37). In 2012, we
launched the Natura Amazon Campus,
which is comprised of 360 researchers,
10 local research centers and institutes
and partners for that offer courses on
entrepreneurship. Over 80 research
projects have been registered.
Furthermore, important local partner-
ships were established with organiza-
tions such as the Federal University of
Amazonas (Ufam), the National Insti-
tute for Amazonian Research (Inpa), the
Brazilian Agricultural Research Corpo-
ration (Embrapa) and the Amazonas
State Research Support Foundation
(Fapeam). The results also include the
funding of four scholarships for profes-
sional who will work at the company, as
well as the mobilization of resources for
32 grants allocated to innovation proj-
ects in the region.
INNOVATION AND SUSTAINABLE
CULTIVATION PRACTICES
Natura, just like other cosmetics com-
panies and those in the food, phar-
maceutical and cleaning and hygiene
industries, uses dendê oil, also known
as palm oil, in its products. Around
the world, palm cultivation generates
controversy, because it is historical-
ly associated with deforestation and
monoculture. In 2016, through an inter-
national alliance, Natura entered into
an agreement with the USAID (United
States Agency for International De-
velopment) to continue developing
projects that adopt the agroforestry
system for cultivation of the oil palm –
something it has already been doing
54
2016 ANNUAL REPORT for the past 10 years.
Natura was chosen as a partner of
the US agency because it has been in-
vesting in research to study alternative
methods of palm cultivation since 2007.
That year, in cooperation with Camta
(Tomé-Açu Mixed Farming Coopera-
tive), in the state of Pará, Embrapa and
Finep (Funding Agency for Studies and
Projects - a Brazilian public agency
promoting science, technology and in-
novation), we began a pilot project that
used 18 hectares to test the replace-
ment of palm monoculture with an
agroforestry system, whereby oil palm
cultivation is carried out alongside that
of other plant species. The pilot project
produced a significantly higher yield
of palm oil than under the traditional
monoculture system, and demonstrat-
ed its environmental benefits – such as
the natural barrier against pests cre-
ated by the diversity of plant species.
The alliance will support the develop-
ment and expansion of agroforestry
systems and business models that
combine good production perfor-
mance with the methods of subsis-
tence farmers and the generation of
ecosystem services. In addition to the
partnerships established in the pi-
lot project developed by Natura, we
will also be supported by the ICRAF
(International Centre for Research in
Agroforestry, also known as the World
Agroforestry Center) and the USAID it-
self. The investments made by alliance
members are expected to reach US$
4.8 million. In addition to the more effi-
cient production of palm oil, the system
allows for carbon sequestration and
prevents deforestation.
2. Socio-biodiversity Production Chains
The second pillar is aimed at structur-
ing, refining and extending sustainable
production chains in the Amazon, in-
vesting in the training, production effi-
ciency and technology that is essential
for cooperatives to thrive, generate
wealth locally and achieve social devel-
opment.
SUPPLIER COMMUNITIES
304-2, 103-2, 103-3, 413-2
Every year, we broaden and strength-
en our relationship with the commu-
nities that supply our natural inputs.
We maintain links with 33 local com-
munities, three of which were included
in 2016. Together, they represent 2,841
families. Around 75% of these business
partners are located in the Amazon
region, totaling 27 communities and
2,119 families. The other communities
we maintain relationships with are lo-
cated in different parts of Brazil (see
map showing the location of all suppli-
er communities here)
Two of the three new supplier commu-
nities are situated on Marajó island
(Pará state), a new area of operations
for Natura. These new partnerships
were required to expand the sourcing
of certain bioactive ingredients, such
as ucuuba, murumuru and andiroba
(all types of plant), enabling us to in-
crease the proportion of these inputs
in our soaps.
The income received by the commu-
nities during the year exceeded R$ 10
million. That is 55% higher than the
amount received in 2015 and, in ad-
dition to payment for supplies (R$ 5.8
million), it included the sharing of ben-
efits derived from access to traditional
knowledge (R$ 3.07 million), support for
community infrastructure, training and
payment for use of their image. 203-1
We have measured the positive im-
pacts created by our relationship with
local families, such as income gen-
eration through the purchase of in-
puts, investment in developing higher
value-added production chains and
transfer of technical skills through the
training we provide. Now that they are
much better organized, the communi-
ties are entering into partnerships with
other companies, as well as Natura, to
supply inputs obtained from the Brazil-
ian biodiversity. This development was
achieved using a sustainable produc-
tion and commercial model.
We have also invested in improving
the productivity of these communities
and adding value to their supplies, by
upgrading the infrastructure of two
extraction units (one in the Mid-Juruá
region and the other in the northeast
of Pará) and thereby improving the
quality to the oil and butter produced.
We have continued with our training
programs in the fields of health, safety,
good management practices and or-
ganization management, training 545
people in 2016.
Also in 2016, 100% of supplier commu-
nities were audited by our Socio-bio-
diversity Chain Verification System,
developed jointly with the UEBT (Union
for Ethical Biotrade). This procedure
looks into labor issues, organization
management and good production
practices, and ensures the tracking of
production chains, which is one of our
greatest challenges. This verification is
ongoing, since the families need to de-
velop a system to provide documenta-
tion confirming the origin of all inputs.
The audits are performed annually in
each of the communities, generating
action plans that are monitored until
the next audit.
Once a year, the communities partici-
pate in the Qlicar Award - which distin-
guishes Natura suppliers - in the Bio-
Qlicar category. The award goes to the
most noteworthy community, the one
that has shown the greatest evolution
in several categories revolving around
quality and good practices. The BioQli-
car ratings underwent some changes in
2016, and the calculation now takes into
consideration the ratings provided by
the Verification System, as well as an indi-
cator that measures the planned volume
of production and delivery deadline.
The communities achieved a 3.93 rat-
ing in 2016. This index, which used to
be a part of BioQlicar but is now an
element of the Verification System, ad-
vanced slightly in comparison to the
previous year’s figure, of 3.62. The rat-
ing is weighted, along with the OTIF (on
time in full) assessment rating of the
community. The improvement is due to
the communities’ improved audit rat-
ings, as well as greater compliance with
the action plans during 2016, which
also increases the community’s rating
throughout the year. There was also an
improvement in the OTIF rating, com-
pared to 2015, due to better delivery
planning, both by Natura and by the
communities, and greater investment
in chain infrastructure. 414-1
55
2016 ANNUAL REPORT Socio-biodiversity Conservation – Amazon
257,000 hectares of forest = 1.7 times the area of the city of São Paulo
We influence the preservation of standing forest in the Amazon by using inputs obtained from its biodiversity in a sustain-
able manner, in partnership with supplier communities, as well as boosting development and generating income for more
than 2,000 families in the region.
203-2
Communities and families benefitted (units)1
2014
2015
2016
Communities that Natura has a relationship with
Families benefitted within the communities
Families benefitted within the Amazon region2
33
3,121
2,106
30
2,251
1,529
33
2,841
2,119
1. We continued using the GPS method, which was introduced in 2015, for tracking our suppliers. The number of communities reported includes seven
associations and 26 cooperatives. 2. The number of families benefitted in 2015 has been corrected.
Resources allocated per family (R$ thousand)
2014
2015
2016
Direct resources
Supplies
2.3
1.1
2.3
1.3
3.1
2.0
203-1
Investments made in the communities (R$ thousand)1
2014
2015
2016
Supplies
3,040
2,837
Sharing of the benefits derived from access to genetic
heritage or related traditional knowledge
Support and infrastructure
Use of image
Training
Technical services
Studies
Total
3,982
300
21
946
184
414
2,411
443
14
245
139
490
5,771
3,070
669
36,3
77
255
245
8,887
6,579
10,123
1. Direct investments are amounts deposited directly to the communities in payment for the supply of raw materials, sharing of benefits and use of image.
The categories of support and infrastructure, training, studies and technical services represent resources invested by Natura in the form of services, hiring
of partners, research, equipment purchases, and infrastructure improvements, among other benefits. Such investments are made at Natura’s discretion to
add value to these production chains.
56
2016 ANNUAL REPORT Natura’s supplier
communities
Inputs supplied, by state
RR
PA
AM
Carauari
Murumuru butter
Andiroba oil
AC
Nova
Califórnia
Cupuaçu butter
Brazil nut oil
Açaí pulp
Andiroba oil
RO
Juruena
Brazil
nut oil
AP
Laranjal
do Jari
Brazil
nut oil
Gurupá
Brasil Novo
Medicilândia
Uruará
Afuá
Vitória
do Xingu
Anapu
Pacajá
Andiroba nuts
Cocoa beans
Murumuru nuts
Ucuuba nuts
Capitiú leaves
Storax leaves
Pataqueira leaves
Altamira
Cupuaçu butter
Murumuru butter
Ucuuba butter
Andiroba oil
Passionfruit oil
Piri Piri roots
TO
Brazilian
copal seeds
GO
DF
Campestre
de Goiás
MT
MS
SP
Guaçatonga
leaves
Barra do
Turvo
Curumbataí
do Sul
PR
Passionfruit
seeds
Turvo
SC
Pennyroyal
leaves
RS
Campestre
da Serra
Afuá
Belém
Abaetetuba
Santo
Antônio
do Tauá
Santa Luzia
do Pará
Moju
Irituia
u
Igarapé-Miri
Acará
Cametá
Tomé-Açu
napú
Pj
á
Babassu
flour
Esperantinópolis
MA
PI
CE
RN
PB
PE
AL
SE
Cocoa beans
Sapucainha nuts
BA
Camamu
Ilhéus
Montes Claros
Buriti oil
MG
ES
RJ
57
2016 ANNUAL REPORTCommunityLocationCodaemjCarauari (Amazonas)CofrutaAbaetetuba (Pará)ComaruLaranjal do Jari (Amapá)CoomarSanta Luzia do Pará (Pará)CoopafloraTurvo (Paraná)CoopavamJuruena (Mato Grosso)CoopçãoPacajá (Pará)CopaespEsperantinópolis (Maranhão)CopoamMedicilândia (Pará)CopobomAnapu (Pará)CopopsUruará (Pará)CommunityLocationAdincocmaAfuá (Pará)ApobvAcará (Pará)AprocampSanto Antônio do Tauá (Pará)AtaicGurupá (Pará)CaepimIgarapé - Miri (Pará)CabrucaIlhéus (Bahía)CamtaTomé Açu (Pará)CamtauaSanto Antônio do Tauá (Pará)CartCametá (Pará)CepotxAltamira (Pará)CoaprocorCorumbataí do Sul (Paraná)CommunityLocationCopotranVitória do Xingu (Pará)CopoxinBrasil Novo (Pará)GF GuaçatongaBarra do Turvo( San Pablo)GF JatobaCampestre de Goiás (Goiás)GF PoejoCampestre da Serra (Rio Grande do Sul)GF SapucainhaCamamu (Bahía)Grande SertãoMontes Claros (Minas Gerais)IrituiaIrituia (Pará)JauariMoju (Pará)MMIBBelém (Pará)RecaNova Califórnia (Rondônia)
ECOPARQUE
In order to bring together sustainable
production chains and companies
that want to do business related to so-
cio-biodiversity, in 2014 we inaugurat-
ed the Ecoparque, in Benevides (Pará
state). Developed based on the concept
of industrial symbiosis, this structure
aims at attracting other companies in-
terested in doing business locally. Cur-
rently, about 60% of Natura soaps sold
in Brazil and through our International
Operations is produced at the Eco-
parque. In 2015, Symrise, a German oils
and natural essences manufacturer, es-
tablished its operations next to Natura,
thus becoming the first partner to set
up shop in this new industrial park.
In order to manage the impact caused
by operations, the plant has adopted
some innovative sustainable solutions,
such as implementing filtration gar-
dens for the treatment of wastewater,
ensuring natural ventilation and light-
ing and installing a geothermal system
that improves the efficiency of the air
conditioning system.
3. Institutional empowerment
103-2, 103-3
The empowerment of local institutions
and establishment of partnerships for
the joint creation of proposals that
benefit all parties involved is critical
to the development of a standing for-
est economy. Starting from a priority
matrix, put together with the input of
the local population, we determined
the most important areas for trans-
forming the current situation of the
Amazon, focusing on forestry edu-
cation,
fostering entrepreneurship,
digital inclusion and carbon projects.
Furthermore, we are working togeth-
er with local governments, grassroots
communities and companies through
agreements and partnerships to cre-
ate territorial development solutions
in the Mid-Juruá (Amazonas state),
Lower Tocantins and Transamazon
(both Pará state) areas. (See our main
activities below).
EDUCATION ADAPTED TO THE
REALITY OF LIVING IN THE FOREST
Under the Alternating Schools project,
children and teenagers alternate be-
tween residing at school and learning
online at the family’s rural property.
Schools that offer this option play a vi-
tal role in tackling the exodus of young
people from forest areas. Due to a lack
of access to quality education, many
young people migrate to large urban
centers in search of better opportuni-
ties for personal development. Provid-
ing quality education that is adapted
to the reality of living in a forest is es-
sential to the creation of a prosperous
ecosystem in the Amazon, as well as to
the development of more sustainable
production techniques.
The Federal University of Western Pará
(Ufopa), in Santarém, together with the
Association of Rural Family Homes of
Pará State (Arcafar), Natura and the
Natura Institute, has set up the first
specialization course in “Pedagogy of
Alternation and Rural Development in
the Amazon”. It is aimed at teachers
from these rural schools who, despite
having a higher education degree, are
not trained in this methodology. The
course will run until August 2017 and all
available places were filled.
Natura also supports Arcafar, which
represents the 30 Rural Family Homes
(CFRs, in Brazil), as the alternating
schools are called, in Pará. Through
direct investment and incentives, such
as the allocation of funding to the Mu-
nicipal Committee for the Rights of
Children and Adolescents (CMDCA)
in Cametá (PA), we empower these
schools by helping them improve their
infrastructure, classrooms, digital cen-
ters and training. For instance, the
re-inauguration of the Cametá rural
family home, in 2016, enabled around
60 young people from rural areas of
four municipalities in Lower Tocantins
to attend high school classes with in-
built vocational training in crop and
livestock farming. The number of plac-
es available is expected to grow by
50% in 2017.
This way, we are able to contribute
with the training of professionals
and improve the quality of education
with a focus on forest living, affecting
around 1,800 young students from the
Rural Family Homes in Pará.
FOSTERING ENTREPRENEURSHIP
In order to support young entrepreneurs
who have sustainable business solu-
tions that embrace the standing forest,
we have developed a pre-acceleration
project for regional startups, working in
partnership with Artemísia, a non-prof-
it organization that has pioneered the
support of social impact businesses.
Launched in the second half of 2016, the
initiative already has 140 projects regis-
tered, 17 of which were chosen to be part
of the Natura Amazon Challenge: Busi-
nesses that are good for the Standing
Forest. In order to participate in the chal-
lenge startups must present solutions
that are in line with the United Nations
Sustainable Development Goals (SDGs).
During a one-week immersion course,
the entrepreneurs received in-person
training in business and skills develop-
ment and visited Natura supplier com-
munities in Lower Tocantins, as well as
the Ecoparque. The network of mentors
was critical to ensure optimal busi-
ness development. Mentors included
the Pará State Secretaries for Innova-
tion and Economic Development and
professors from the Federal University
of Pará and the Guamá Technological
Park, as well as important partners with
experience in fostering entrepreneur-
ship, such as the Telefônica Foundation,
Mov Investimentos and Impactix.
At the end of the immersion course,
four startups were chosen to receive
Artemísia mentoring for three months.
58
2016 ANNUAL REPORT
Here are the finalists:
• MEU Empreendedorismo Universi-
tário (Manaus, Amazonas state) – A
collaborative platform for entrepre-
neurial education, aimed at develop-
ing university students and urban and
rural entrepreneurs.
• Arcafar (Altamira, Pará state) – A lo-
cal agribusiness focused on teaching,
but which also sells products to gen-
erate income and support alternating
schools.
• Asproc – Pirarucu Production Chain
(Carauari, Amazonas state) – A pira-
rucu processing business from the
Mid-Juruá region.
• Da Tribu (Belém, Pará state) – Training
and job creation for women through
sustainable fashion and the produc-
tion of latex-based accessories.
Territorial Development
Given the complexity and challenges faced in the Amazon, we work through agreements and partnerships to create large-
scale transformations. We are active (working alongside local governments, grassroots communities and companies) in
the territorial development of the Mid-Juruá (Amazonas state), Lower Tocantins and Transamazon (both Pará state)
regions. Consequently, we understand the priorities of each region and have prepared joint plans containing initiatives
and goals for them. Local leaders and institutions are empowered throughout this process.
Here are the main initiatives developed in each territory up to 2016:
Legal Amazonia
Boa Vista
6.
6.
RR
AP
AM
Manaus
PA
Benevides
Belém
Lower Tocantins
MA
vc
Mid-Juruá
Transamazon
AC
Rio Branco
oRioRioRRRR oooRR oRioRi
PPP
PPPPPorto Velho
RO
Mid-Juruá
• First class of the vocational training
course on Forestry and Sustainable
Development, together with the
Sustainable Amazon Foundation
• Access to basic sanitation and safe
water for 500 riverside communities,
through a partnership between the
Chico Mendes Memorial Fund and the
Ministry for Social Development
• Overhauling of the oil mill, yielding 25%
more efficiency and production capacity
• Construction of more than 1 km of
waterfront warehouses, for delivering
products
• Opening of a UAB (Open University
of Brazil) campus near riverside
communities, through Capes
(Coordination for the Development of
People in Higher Education)
• Implementation of the Social Progress
Index – Mid-Juruá, a tool for measuring
the impact of our initiatives
Lower Tocantins
• Investments to improve the infrastructure
of the Rural Family Homes (CFRs) in
Abaetetuba and Cametá, increasing
access to quality education
MT
Cuiabá
• Installation of five computer labs in the
region, benefiting alternating schools and
partner cooperatives, in a joint endeavor
with TAM
• Training of 27 municipal secretaries to
aid in the preparation of their Municipal
Education Plans and distribution of 2,778
Trails kits, together with the Natura
Institute, to improve literacy in 2,340
schools in the region.
• In 2016, we launched the first
specialization course in sustainable
agriculture for the Lower Tocantins,
benefiting 35 technicians working in the
region
Palmas
TO
Transamazon
• We supported the recognition and
certification of seven Rural Family Homes
in the region, enabling them to apply for
public funding
• By means of an incentive, through
the Municipal Council for the Rights of
Children and Adolescents, we supported
the refurbishment of a CFR in the
municipality of Brasil Novo
• First specialization course in the
Pedagogy of Alternation, in the Amazon
region, for teachers from the 30
CFRs in the state of Pará, launched in
partnership with Arcafar and Ufopa
59
2016 ANNUAL REPORT
The Amazon Program and the SDGs
The Amazon Program’s emphasis is on
SDG 15:
SDG 15: Life On Land. We seek to promote the sustainable
use of terrestrial ecosystems, managing forests in a sustain-
able manner and reversing land degradation and loss of di-
versity. Through the Amazon Program, we have contributed
to the conservation of 256,798 hectares of standing forest,
which is equivalent to more than 277,000 football pitches.
However, since we make systemic
interventions in the Amazon region, our
activities have a direct impact on the
following 12 SDGs as well:
ASDG 1: NO POVERTY. We have been working for 17 years
in partnership with agroextractivist cooperatives from the
Amazon region, boosting development and generating in-
come for 2,000 families and having a direct impact on im-
proving the quality of life of 8,000 people.
SDG 2: ZERO HUNGER. We give priority to production
models that ensure the food security of the communi-
ties involved, such as agroforestry systems. Many refer
to them as food forests. They generate income for local
communities, while guaranteeing food security and forest
preservation.
SDG 3: GOOD HEALTH AND WELL-BEING. Social inclu-
sion and income generation improve the access of riverside
communities to health services and boost their quality of
life. That is the case in Mid-Juruá, in the state of Amazo-
nas, where access to safe water is directly contributing to
the reduction of infant mortality and improved health and
well-being of more than 500 riverside families.
SDG 4: QUALITY EDUCATION. We support the empower-
ment of 30 rural community schools in the state of Pará,
giving 2,000 young people access to quality education, in-
cluding technical training tailored to their local situation.
This raises their chances of leading a more dignified and
prosperous life in the forest.
SDG 5: GENDER EQUALITY. Working with species from the
local biodiversity enables important advances in the train-
ing of women as leaders and the creation of jobs and gen-
eration of income for women from the Amazon region. One
such example is the Belém Islands Women’s Movement, in
Cotijuba, and the empowerment of women through the
harvesting of andiroba in the Mid-Juruá and of tonka
beans by the AVIVE women’s association in the state of
Amazonas.
SDG 6: CLEAN WATER AND SANITATION. Through a part-
nership with the Ministry of Social and Agrarian Develop-
ment, established in early 2015, the Amazon Sanitation
Project has provided basic sanitation infrastructure and
access to drinking water to 500 riverside families in the
Mid-Juruá region of Amazonas state.
SDG 8: DECENT WORK AND ECONOMIC GROWTH. The
Amazon Program is geared towards inclusive and sustain-
able economic development, contributing to the develop-
ment of leadership, strengthening of cooperatives, and
creation of jobs and generation of income in 25 communi-
ties comprising 2,000 families in the region.
SDG 9: INDUSTRY, INNOVATION AND INFRASTRUCTURE.
We have invested in agricultural innovation, training and
infrastructure, in order to boost the competitiveness of
the 24 cooperatives from the Amazon region that are our
partners, seven of which have local micro-plants. This al-
lows them to improve the added value of their products.
Furthermore, we bring together sustainable production
chains and the demand from companies for natural inputs,
through our Ecoparque, an industrial park in Benevides
(Pará state) that focuses on a standing forest economy.
SDG 10: REDUCED INEQUALITIES. The Amazon is one of
the regions with lowest per capita income in the country
and social indicators that are below the Brazilian average.
The Amazon Program stimulates the standing forest econ-
omy as a development alternative for the region, thus con-
tributing to a new business perspective, wealth generation
and shared value in the region.
SDG 12: RESPONSIBLE CONSUMPTION AND PRODUCTION.
We invest in the empowerment of local leaders and co-
operatives, traceability, fair trade practices, the sharing
of benefits through access to genetic heritage and tradi-
tional knowledge, projects for social improvements, the
creation of value added to local communities by setting up
micro-plants, and in sustainable production and manage-
ment systems, such as organic agriculture, agroforestry
systems and forestry management.
SDG 13: CLIMATE ACTION. At present, 41% of Natura’s proj-
ect portfolio for offsetting carbon is composed of projects
in the Amazon that avoid the emission of 1.16 million tons of
CO2 into the atmosphere. These projects support the use
of clean energy, the restoration of deforested areas and
forest conservation (Redd+).
SDG 17: PARTNERSHIPS FOR THE GOALS. We act in part-
nership with grassroots communities, governments, NGOs
and local companies, under territorial development ar-
rangements, empowering leadership and institutions and
bringing together the efforts of the various stakeholders of
several different locations in order to foster development
and improve the region’s quality of life (see the map show-
ing the three territorial groups and the impact of our ac-
tivities).
60
2016 ANNUAL REPORT NEW BIODIVERSITY LAW
Last year we celebrated the comple-
tion of the revision process of the legal
framework for access to Brazilian bio-
diversity resources, which is regulated
by Law no 13,123/15 through a decree.
Different industries and local commu-
nities had been awaiting for more than
ten years for legislation that reduced
the hurdles surrounding the access
to Brazil’s genetic heritage. During
this time, regulation was guaranteed
through a provisional measure. Al-
though there is still room for improve-
ment, we believe this new law promotes
access for research purposes and the
sustainable use of assets, increases
the generation of value for companies
and local communities and favors the
sustainable use of those resources, by
ensuring their conservation.
As a result of the new legislation, the
registration of research on biodiver-
sity assets will be performed through
SisGen (National System for the Man-
agement of Genetic Heritage and
Associated Traditional Knowledge),
which is expected to go live in 2017.
Before the launch of this system, re-
searchers and companies needed
to obtain the approval of the Ge-
netic Heritage Management Council
(CGEN) in order to begin any type re-
search, even when the asset would not
be used commercially. This extremely
taxing process took years and made
many initiatives unfeasible. The new
legislation also makes changes to the
way traditional communities are re-
munerated for their knowledge of bio-
active ingredients.
While the provisional measure was still
in effect, Natura prepared its Policy on
the Use of Biodiversity, which estab-
lishes the procedures for conducting
research and using natural inputs, as
well as rules governing its relationship
with traditional communities, holders
of the knowledge regarding the use of
these natural assets. Our standards are
based on the provisions of the Conven-
tion on Biological Diversity (CBD), a body
linked to the United Nations, which was
also used as the basis for Brazil’s new
regulatory framework. In 2017, we will
finish adjusting our policy so that it is in
accordance with the new Brazilian law.
MANAGEMENT OF GHG EMISSIONS
Carbon Neutral for 10 years
103-2, 103-3
We are fully aware of our responsibil-
ity regarding issues such as climate
change and greenhouse gas (GHG)
emissions. For this reason, we estab-
lished the Carbon Neutral Program in
2007. This program aims at reducing
the impact of emissions from all
stages of our operations – starting from
the extraction of raw materials through
our processes and those of our produc-
tion chain all the way to post-consumer
disposal of product packaging. The re-
sult is a combination of economic, social
and environmental gains.
The Carbon Neutral Program is divided
into three main areas: measurement,
reduction and offsetting of emissions.
Every year, we monitor the amount of
greenhouse gases released into the at-
mosphere using an audited inventory.
The relative analysis of the amount of
CO2 equivalent per kilogram of man-
ufactured product, revealed an index
of 3.17 kgCO2e/kg, a small reduction of
0.5% in relation to 2015.
This indicator was affected by reduced
production during this period. Nev-
ertheless, we were able to maintain
the level reached in the previous year,
due to various efficiency
initiatives,
which have since been reinforced (see
the table below). In line with our 2050
Sustainability Vision, we will continue
pursuing significant new carbon re-
ductions throughout our value chain
– by 2020, we are committed to re-
ducing our relative GHG emissions by
33%, compared to 2012 levels. That is a
challenge for Natura as a whole, since
we have already reduced them by 33%
between 2007 and 2012.
In terms of absolute emissions, the re-
sult for the year was 303,424 tCO2e, for
our value chain. This was down by 5.4%
in comparison with 2015, also due to
the lower production levels.
Emissions that cannot be avoided are
100% offset. Consequently, Natura has
been a carbon neutral company since
2007. The offsetting is done by purchas-
ing carbon credits from organizations
that have reduced their emissions. In
line with Our Essence, we have designed
the carbon offset program so that it will
generate further social and environ-
mental benefits. We only purchase cred-
its from projects associated with forest
regeneration and maintenance, energy
efficiency or the substitution of fossil fu-
els (read more it in the box below).
Since the beginning of the program,
we have issued five calls for projects
and signed contracts for 35 initiatives
in Brazil and other Latin American
countries where we operate (Argenti-
na, Chile, Colombia, Mexico and Peru).
This portfolio is currently composed
of 63% energy projects and 37% for-
est initiatives. Over 41% of the projects
come from regions in what is defined as
Amazônia Legal and the Pan-Amazon
Basin. According to a report from the
Carbon Disclosure Program (CDP), Na-
tura is the fourth largest global com-
pany taking part in the world’s volun-
tary carbon credit market.
In 2016, we achieved our goal of locally
compensating emissions in each of the
countries that are part of our Inter-
national Operations, through the pur-
chase of credits in Mexico and Chile. One
of our biggest highlights, Chile, benefit-
ted from the acquisition of 26,000 car-
bon credits from the Valdiviana Coastal
Reserve, a protected area managed by
The Nature Conservancy. In Peru, we
bought 62,420 carbon credits from the
country’s largest forest initiative, the
company Bosques Amazónicos, and
now have two projects running in that
country. It was the largest transaction
ever of its kind by a private company in
the country. Moreover, in Argentina, in
2015, 70,000 carbon credits were pur-
chased for US$ 4 million, from the Raw-
son wind farm. Again, it was the largest
transaction ever of its kind in the coun-
try and the first one carried out volun-
tarily. In Mexico, we signed a contract
for 4,367 credits pertaining to a project
for eco-efficient stoves. This alone will
generate 190,000 tCO2e in credits.
61
2016 ANNUAL REPORT 305-2 / 305-4
2014
2015
2016
Total CO2e
emissions (t)¹²
Relative emissions
(kg of CO2e/kg of billed
product)
Accumulated reduc-
tion in relative emis-
sions since 2012 (%)
332,208
321,267
303,424
3.00
3.17
3.17
6.9
1.4
1.3
1. CO2e (or CO2 equivalent): measurement used to represent emissions of greenhouse gases, based on the global warming potential of each one. 2. Includes
Scopes 1, 2 and 3 of the GHG Protocol.
THE PURSUIT OF ECO-EFFICIENCY
103-2, 103-3
For the past 10 years, Natura has been
transforming its processes in order to
reduce its greenhouse gas emissions.
Our initiatives permeate the selec-
tion of raw materials, manufacturing,
transport and other company pro-
cesses, but always overlooking the
whole production chain:
• Use of refills, including in fragrances,
in a pioneering initiative in the cos-
metics industry
• Greater use of post-consumer recy-
cled glass in fragrance bottles, anoth-
er pioneering initiative
• Increased use of post-consumer
recycled PET in product packaging
(some items already use 100% recy-
cled PET)
• Reduction of air shipment for exports
to other Latin American operations
• Use of coastal shipping to supply
distribution centers in the north and
northeast of Brazil, while reducing the
use of road transportation
• Improved transport performance for
consultants in Brazil, with the opening
of new distribution centers
• First company in Latin America to
use electric vehicles to deliver prod-
ucts to consultants and consumers.
They emit nine times less CO2 than
conventional vehicles. We are cur-
rently using five electric vehicles, in
four cities.
• Reduction of electricity consumption
at Natura sites
• Optimized production of the cata-
logs used by our consultants
• Increased sales of low relative emis-
sion items, notably in the soap and
body care categories
• In Vitória and Porto Alegre, we are
already using bicycles with baggage
compartment to deliver products to
consumers and Espaço Natura cata-
logs to consultants
• Use of plant-based inputs (current-
ly 83% of the total) instead of fos-
sil-based inputs
• Use of organic alcohol in 100% of
the fragrances category. This type
of alcohol is produced without using
any pesticides, chemical
fertilizers
or burning, and has brought 20,000
hectares of forest back to life – includ-
ing the return of 340 animal species
(including endangered species such
as jaguars) and a 30% increase in the
volume of water in nearby streams
• Supplier development program, fo-
cused on improving performance and
compliance with good social and en-
vironmental practices
• Use of a type of paper that results in
fewer emissions when printing the Es-
paço Natura catalog
Projects that yield social and environmental benefits
Through the offset program, we promote the maintenance,
and regeneration, of standing forests, as well as projects that
promote reforestation, energy efficiency and the substitution
of fossil fuels. The environmental benefits arising from the im-
plementation of these projects are measured and convert-
ed into carbon credits. These are sold to Natura, which uses
them to offset its own unavoidable emissions.
Many of these projects go beyond environmental benefits,
with a positive effect on the communities involved. One of
these initiatives, led by the Perene Institute in the Recôncavo
Baiano region, promotes the exchange of old wood-burning
stoves for more eco-efficient models. The new models use a
combustion chamber, which means it requires less firewood,
while the small volume of smoke generated is removed from
the home through a chimney. This results in lower green-
house gases emissions and eases the pressure that leads to
deforestation.
These stoves are considered a social technology, because
they are inexpensive and simple to use. To build its structure,
homeowners buy sand, cement and ceramic blocks, while
the Perene Institute provides all technical components and
labor.
Our relationship with the Perene Institute began in 2008,
through the second Natura Carbon Neutral call to tender.
Since then, through partnerships in two other tenders, we
have committed ourselves to building 7,880 eco-efficient
stoves, benefiting an equal number of families, in municipali-
ties such as Maragogipe and São Felipe. So far, 6,400 stoves
have been built and the carbon credits resulting from their
installation represents 6% of the total volume acquired by
Natura between 2008 and 2016. The sale of carbon credits
to Natura help the institute finance the construction of more
eco-efficient stoves.
We also support a similar program in Mexico, in partnership
with the Utsil Naj project, which is run by six organizations.
Over 4,367 stoves have already been installed, which will
generate a reduction of 190,000 tCO2e in emissions. In ad-
dition to the environmental benefits, each family saves 193
Mexican pesos per month (about R$ 30) because they are
using this technology.
62
2016 ANNUAL REPORT Additional benefits of carbon offsetting
Forest restoration
13 projects supported
Restored area: 2,155 hectares
(equivalent to more than 2,000 football pitches).
BIOMES
Amazônia Legal and Pan-Amazon: 1,212 hectares
Atlantic Forest: 427 hectares
Other Biomes: 516 hectares
Total GHG removed from the atmosphere: 639,933 tCO2e
Forest conservation
5 projects
Area of the projects seeking conservation: 12,135 hectares
(equivalent to more than 12,000 football pitches)
Amazônia Legal and Pan Amazon: 12,077 hectares
Other Biomes: 57 hectares
(We have no project in the Atlantic Forest)
Total GHG removed from the atmosphere: 382,602 tCO2e
305-1/305-2
Emissions of our value chain (t)1 2
2014
2015
2016
Extraction and transportation of raw materials and packaging
(processing and transporting it all the way through to direct
suppliers)
141,574
127,788
122,337
Direct suppliers (processing and transporting it to Natura)
35,154
31,731
30,378
Industrial and internal processes
29,325
18,557
15,633
Product sale (transportation and distribution)
49,593
66,749
63,465
Product use and packaging disposal
76,680
76,442
71,611
Overall total
332,326
321,267
303,424
1. All GHGs were included in the calculations. 2. To calculate our inventory, we included the total volume of our Scope 1, 2 and 3 emissions. Our inventory
adheres to the standards of the GHG Protocol and the principles of the ABNT NBR ISO 14064-1, which determine the rules for their design, development,
management, preparation and reporting. In 2016, the report was audited by KPMG.
63
2016 ANNUAL REPORT 305-1/305-2/305-3
Direct and indirect emissions of greenhouse
gases (t)¹²
2014
2015
2016
Direct GHG emissions (Scope 1)
1,635
4,156
4,975
Direct biogenic emissions (from the burning or biodegradation
of biomass)
8,826
9,347
8,870
Indirect emissions of GHG and Energy (Scope 2)
8,371
7,909
5,094
Other indirect GHG emissions (Scope 3)
322,319
309,202
293,355
Indirect biogenic emissions of CO2 (in metric tons of CO2)
8,921
10,746
9,366
Total
332,325
321,267
303,424
1. All GHGs were included in the calculations. 2. To calculate our inventory, we included the total volume of our Scope 1, 2 and 3 emissions. Our inventory
adheres to the standards of the GHG Protocol and the principles of the ABNT NBR ISO 14064-1, which determine the rules for their design, development,
management, preparation and reporting. In 2016, the report was audited by KPMG.
Environmental accounting
We were the first company in Latin
America (and the only one of the glob-
al cosmetics industry) to publish the
full findings of its EP&L (Environmental
Profit & Loss). It was released in July
2016, during the launch of the Natu-
ral Capital Protocol, in London. In the
calculation, which translates environ-
mental impact into financial values, we
included solid waste generation, land
use, and water consumption and pollu-
tion, as well as emissions of greenhouse
gases and other air pollutants. In this
first study, using data from 2013, the
estimated result came to R$ 132 million.
WATER MANAGEMENT
The challenge of the water footprint
103-2 / 103-3
Having chosen a methodology that
covers all impacts throughout our val-
ue chain, in 2016 we looked for initia-
tives to reduce our water footprint. We
assessed the potential of a few projects
and investigated the opportunities to
offset their impact, similarly to what we
do with greenhouse gas (GHG) emis-
sions under the Carbon Neutral Pro-
gram. Indeed, we see opportunities for
synergy with this program, especially
when it comes to the forest projects we
are currently supporting.
However, our greatest challenge still
lies with product consumption, which
is heavily influenced by consumer be-
havior. Actually, the greatest impact
is not the volume of water consumed
while taking a shower, but rather the
effects of generating energy to heat
the water, since the Brazilian electric-
ity matrix is largely based on hydro-
electric power. This responsibility is
shared between both company and
society.
Based on the detailed information ob-
tained from the analysis of our water
footprint, we will include the water as-
sessment indicator in our environmen-
tal impact calculation, which helps
us development new products. This
calculation evaluates inputs and raw
materials and estimates the effects
of a product before it has even been
manufactured. Waste generation and
GHG emissions are already included in
the calculation, and now will broaden
its scope to include water issues as
well. This will the innovation teams in
their decision-making.
The relative indicator that measures
water consumption in our industrial
processes rose by 9% in 2016, to 0.53
liters per unit produced. This result
was especially influenced by reduced
production volumes throughout the
year, which put pressure on our effi-
ciency indicators. For the same rea-
son, our total water consumption for
the year was down by 5%.
64
2016 ANNUAL REPORT 303-1
Water consumption (l/unit produced)
2014
2015
2016
0.45
0.49
0.53
Water consumption by location (m3)
2014
2015
2016
Natura sites1
Other locations2
174,045
177,866
191,277
60,356
52,826
50,224
Natura’s third-party suppliers3
60,299
63,027
37,453
Total water consumption
294,700
293,719
278,955
1. This includes the following industrial units: Cajamar and Ecoparque (Benevides). 2. Includes Nasp, Lapa, distribution centers and the Itupeva hub. 3. Main
suppliers who manufacture finished products for Natura. The leading third-party suppliers account for around 90% of this volume.
65
2016 ANNUAL REPORT WASTE MANAGEMENT
At the end of the cycle
103-2, 103-3
When we develop our products, we
think about their entire life cycle (from
the choice of raw materials to disposal
of the packaging) and we are commit-
ted to progressively reducing the en-
vironmental impact of our processes.
This is made possible by the use of raw
materials that are of plant-based in our
formulas, as well as the growing use of
recyclable and post-consumer recy-
cled materials and the development of
eco-efficient* packaging.
For the past ten years, we have been re-
searching and investing in the reuse of
glass in the production of our fragrance
lines, while taking care to maintain the
sophistication that is expected of pack-
aging of this kind. That is a challenge
we face every time we develop a new
product, because numerous tests are
required to get the glass mixture just
right, so that the quality and color of
the recycled material are not compro-
mised in any way.
In 2015, the packaging of our perfumes
from the Ekos Frescor, Humor, Kaiak
for men and Essencial for men lines
contained 20% post-consumer recy-
cled glass. Consequently, we avoided
emitting 539 tons of greenhouse gases
into the atmosphere. Production using
recycled glass has been ongoing since
the beginning of 2015, consuming the
equivalent of 600,000 1 liter soft drink
bottles. In 2015, we used glass recycled
from waste disposed of by the beverage
industry. By 2016, we had produced the
first batch of recycled glass that used
glass obtained from recycling cooper-
atives (which increases the technical
challenge of maintaining packaging
quality and standards that correspond
to our expectations). From the start, we
have worked with service providers in
the recycling chain, who are submitted
to a strict accreditation process that
assesses traceability, business legality
and compliance with industry regula-
tions.
In 2016, 4.3% of the materials used to
make our packaging were of post-con-
sumer recycled origin, a percentage
that has been steadily growing. The
goal is to have 10% of all packaging
made from post-consumer recycled
materials by 2020.
The Ekos line has contributed immensely
towards this goal. Its 2016 relaunch saw
a huge bump in the use of recycled ma-
terials, with all its packaging now using
100% post-consumer recycled materi-
als or 100% green polyethylene. We are
also continuously expanding our offer of
product refills and have pioneered the
introduction of refills in the category of
fragrances, with the Ekos Frescores line.
* Packaging with at least 50% of weight reduction in comparison to normal/similar packaging or that is composed of at least 50% of post-consumer recycled
materials and/or non-cellulose renewable materials, provided they do not increase its mass.
301-2
Post-consumer recycled material used in the
packaging of finished products¹ – Brazil (%)
2014
2015
2016
% of post-consumer recycled material used in the packaging
of finished products
1.2
2.9
4.3
Direct biogenic emissions (from biomass burning or
biodegradation)
8.826
9.347
8.870
1. The indicator takes into consideration the percentage of post-consumer recycled material mass in relation to total mass of packaging materials, weighted
according to the manufactured quantity.
301-2
Recyclable material in the packaging of finished
products¹ (%)
2014
2015
2016
% of recyclable material in the packaging of finished products2
57.5
50
51
1. Recyclability: this indicator looks into the percentage of recyclable material mass in relation to total mass of packaging materials, weighted according to
the manufactured quantity.
66
2016 ANNUAL REPORT Acquiring expertise in reverse logistics
103-2, 103-3
The National Policy on Solid Waste
posed a challenge to companies,
since it requires the establishment
of logistics chains for the return of
post-consumer packaging. Conse-
quently, companies have had to de-
velop ways of connecting with their
consumers, in order to ensure proper
disposal of all packaging after use. In
2016, Natura completed a one-year
experimental pilot program devised
to promote reverse logistics in the
São Paulo metropolitan area. Un-
der that program, different means
of collecting post-consumer waste
were organized, including a commer-
cial partnership with five collection
cooperatives. Natura Consultants
were also recruited to collect mate-
rials. After collection, the waste was
sent to recycling centers. The exper-
iment was useful to learn more about
this chain, as well as reverse logistics
operations, and helped us define a
strategy, procedures and actions to
help achieve our goal of applying re-
verse logistics to 50% of our products
by 2020.
We also support the Dê a Mão para
o Futuro (Give the Future a Hand)
program, which is an industry initia-
tive coordinated by the Brazilian As-
sociation for the Personal Hygiene,
Fragrances and Cosmetics Industry,
along with the Brazilian Association
of Cleaning Product Companies and
the Brazilian Association of Processed
Biscuit, Pasta, Bread and Cake Manu-
facturing Companies.
Eco-efficient packaging - Brazil (% of manufactured items) 1
2014
2015
2016
Brazil
Argentina
Chile
Colombia
Mexico
Peru
29
12.9
14.1
16.7
10.8
17.1
26
23.1
21.6
29.8
20.1
25.1
20
20.1
16.9
27.9
17.8
22.0
1. The 2014 International Operations figures refer only to the proportion of refills in relation to all manufactured items. The 2015 data from these countries
were recalculated to meet the definition of eco-efficient packaging adopted in Brazil. Figures for France are not available.
67
2016 ANNUAL REPORT RELATIONSHIP WITH SUPPLIERS
Developing commercial
partnerships
103-2, 103-3, 102-9
Suppliers are among Natura’s most
important stakeholders. In Brazil, we
have approximately 5,000 commer-
cial partners, 650 of which are cat-
egorized as recurrent suppliers and
represent 70% of our purchase vol-
umes. These are, therefore, most often
long-term relationships. Accordingly,
we are continually implementing new
initiatives to fine-tune our relation-
ship with these stakeholders.
An example is the QLICAR program,
whose objective is to boost chain
performance through supplier per-
formance management and activi-
ties focused on the joint development
of processes. The program’s acronym
in Portuguese stands for each of the
aspects that this initiative assesses –
(Q)uality, (L)ogistics, (I)nnovation, (C)
ompetitiveness; (A) for environmen-
tal and social; and (R)elationship. In
2016, 155 companies participated in
the QLICAR program (see the cate-
gories in the list below).
In 2016, we resumed our Annual Stra-
tegic Meeting with suppliers. It was
attended by 149 executives from 54
different companies, with whom we
shared our strategy and future re-
quirements. We also renegotiated
our partnerships to ensure produc-
tion quality and the competitiveness
of our product portfolio.
Another measure introduced during
2016 was the adoption of an elec-
tronic bidding system, which is wide-
ly used by companies of all industry.
This new system brings agility and
even more transparency to the hiring
process. To participate in tenders,
suppliers are screened, particular-
ly regarding technical capacity and
past performance. We now plan to
include credibility (relationship his-
tory) to the screening of companies
that are submitting new bids to Na-
tura and are participants of the QLI-
CAR program. We believe this is a
fair and objective way of highlighting
their partnership track record and
their efforts to improve procedures
and performance.
In 2016, total payments to our sup-
pliers came to R$ 4.2 billion, a stable
figure in comparison to the previous
year.
QLICAR CATEGORIES
• Production suppliers of raw mate-
rials, packaging and/or who manufac-
ture the final product)
• Bio (supplier communities)
• Brand (branding, design, copywri-
ters, communication agencies)
• Cycle (logistics and transport ope-
rators)
• Innovation (contribute new ideas for
product development)
• TD (suppliers of software, hardware,
IT services)
• Facilities (resident services, such
as cleaning, security, catering and
employee transportation)
414-1 Investment practices and purchasing processes - Brazil
Percentage of new suppliers that were screened using human
rights criteria1 (%)
2014
2015
2016
2.2
2.3
1.9
1. We continually evaluate suppliers from critical categories. The number of new suppliers in categories that are subject to assessment and monitoring for
environmental, labor, impact-on-society and human rights criteria is low in comparison to the total number of new suppliers, representing approximately 2%
of the total. However, suppliers from critical categories account for approximately 70% of the total volume of Natura’s purchases. The human rights aspects
considered are child labor and forced or compulsory labor practices, where Natura has a zero-tolerance policy that prohibits the hiring of any supplier found
to have engaged in such practices.
68
2016 ANNUAL REPORT SATISFACTION SURVEY
We carry out an annual evaluation
that measures supplier satisfaction,
which also allows us to identify where
there is room for improvement. De-
spite 2016 being a challenging year,
requiring some adjustments be made
to ensure Natura remained competi-
tive, the satisfaction indicator showed
an increase from the previous year,
going from 77% to 79%. This result
demonstrates the assertiveness of our
relationship with these stakeholders,
which prioritizes open dialogue and
transparency. We also track an indi-
cator that measures supplier loyalty,
which looks at supplier satisfaction
in working with the company, willing-
ness to continue doing business with
us, and whether they would recom-
mend Natura as a customer. In this
regard, we grew 3 percentage points
in Brazil, to 21%, following the decrease
registered in 2015. In our International
Operations, loyalty remained stable at
41% after a considerable rise from 2014
to 2015.
103-43/102-44
Loyalty Index (%)12
Suppliers (Brazil)
Suppliers (IOs)
Suppliers (Brazil & IOs)
Supplier communities3
103-43/102-44
Satisfaction Index (%)4
2014
2015
2016
24
33
26
-
18
41
25
28
21
41
27
-
2014
2015
2016
Suppliers
86
77
79
1. Loyalty: percentage of individuals consulted who gave the maximum score on a 1 to 5 point scale in three categories – satisfaction, intention to continue the
relationship with Natura and recommendation of Natura as a customer. 2. In 2016, we noted a 2.0 pp rise in the Natura Supplier Loyalty index, with a 3.0 pp
increase in Brazil. Dissatisfaction was seen as having been positively addressed in all aspects (except the meeting of deadlines), with emphasis on the work
carried out in negotiations, leading to improvements in operational processes and communication with suppliers. Ongoing relations and negotiations are
the main areas where there is room for improvement. 3. The loyalty survey conducted with supplier communities takes place on a biannual basis. The last
assessment was in 2015 and the next will be in 2017. 4. Satisfaction: percentage of satisfied and totally satisfied suppliers (or “top 2 box” – ratings of “4” or “5”).
69
2016 ANNUAL REPORT DEVELOPMENTS IN LOGISTICS
Faster deliveries to consultants
and consumers
We continue to reap the benefits of
the investments made over the last
five years to improve our logistics in-
frastructure and refine the process
of order separation and delivery. The
São Paulo Distribution Center (SP DC),
which first opened its doors in 2013,
ramped up to its full capacity in 2016,
making it the company’s largest DC in
activity. It handles the entire demand
from the state of São Paulo, which rep-
resents 20% of the total number of or-
ders received by Natura.
This has resulted in enormous efficien-
cy gains. At present, a Natura Consul-
tant residing in any city in the state of
São Paulo takes, on average, 2.8 days
to receive any order at home. The SP
DC also supplies all Natura stores and
the network of drugstore partners
that sell the Sou and Tez lines, while
also delivering orders from consum-
ers who purchase online through Rede
Natura.
In order to help consultants receive ever
more precise information, we launched
a new feature in 2016 that allows them
to verify, whenever they place an or-
der, whether products are available in
stock at the distribution center nearest
their residence – thus enabling them to
receive items more quickly – or whether
the desired items are still in transit.
In 2016, 45% of all Natura orders were
delivered within 48 hours in all regions
of Brazil. In 2015, the figure was 42%.
WELL RECEIVED
The company has been awarded the
Ebit Diamond seal, the highest certi-
fication given to companies that sell
online. This certification relates to de-
liveries made on time and the probabil-
ity of a user making further purchases
through the online platform.
Natura also received recognition one
more time for being one of the com-
panies with the best customer service
in Brazil, according to an annual study
conducted by Exame magazine,
in
partnership with the IBRC (Ibero-Bra-
zilian Institute for Customer Relations).
In 2016, we placed second in the rank-
ing, while in 2015 we were awarded the
top position.
Recognition in 2016
Época Reclame Aqui Award – Natura ranked
first in the Beauty, Aesthetics and Cosmetics category.
Ebit Award – Natura was the second “Loja mais
Querida (Best Liked Store)” for online retailing in the cos-
metics and fragrances category. The criteria evaluated
by consumers who participated in the selection process
included efficiency of the shopping experience, price and
meeting delivery deadlines.
Exame/IBRC ranking of customer services
In 2016, Natura ranked second, surpassed only by Google.
24/7 monitoring of logistics
In order to guarantee efficiency and
service quality, Natura has estab-
lished a Traffic Center that monitors
all company logistics operations in
Brazil,
including production units
and distribution centers. Real-time
monitoring makes logistics process-
es more agile and helps with deci-
sion-making when unexpected plan-
ning adjustments or other external
changes occur.
ADVANCES IN LATIN AMERICA
We also continued to invest heavily
in our International Operations, es-
pecially on logistics efficiency and in-
frastructure preparation for regional
growth. Currently, about 65% of all
orders are delivered within 48 hours,
and in some countries, it has reached
70%. These investments also reflect
the geographical extension of our de-
liveries – for example, our products are
delivered to consultants on Easter Is-
land, which is about 3,700 km off the
west coast of Chile.
In November, the company opened a
distribution center in Argentina, the
largest one Natura has outside Brazil.
The facility has automated separation
lines equipped with ‘pick to light’ tech-
nology.
We also saw gains in our Latin Amer-
ican local production index, through
improvements in Argentina, Colombia
and Mexico. These countries already
account for about 35% of all products
sold by International Operations, and
is especially strong in the fragrances
and body care categories. This strate-
gy strengthens our international pres-
ence, ensuring an increasingly effec-
tive level of service to consultants and
consumers. It also reduces our logistics
costs and our carbon footprint, while
allowing us to stimulate the develop-
ment of local supply chains, much as
we do in Brazil.
70
2016 ANNUAL REPORT LOCAL COMMUNITIES
Developing the areas surrounding
Natura’s operations
413-1, 413-2, 103-2, 103-3
Our commitment to having a positive
impact on the communities surround-
ing our operations is set out in our 2050
Sustainability Vision and we have cre-
ated a series of activities that benefit
local populations. The municipalities of
Cajamar (São Paulo state) and Bene-
vides (Pará state) have hosted Natura
production units since 2000 and 2014,
respectively. Our main distribution cen-
ter, the São Paulo Distribution Center
(SP DC), has been in the Jaguara dis-
trict of the state capital since 2012. That
is also where our headquarters are lo-
cated, which are currently undergoing
renovations.
Together with other companies, grass-
local
roots communities, NGOs and
populations, we have formed territorial
arrangements and prepared a Local De-
velopment Plan for each of these areas.
Important results have already been
achieved by social mobilization move-
ments such as “Comunidade Viva” (Living
Community), in Jaguara, “Inova Cajamar”
(Innovate Cajamar), in Cajamar, and UD-
BEN in Benevides. All these stakeholders
combined efforts to prepare a partici-
pative analysis, determine development
priorities and draw up a plan setting out
its main initiatives and their goals. Local
leaders and institutions are empow-
ered through this process. We also use
the Community Social Progress Index in
Cajamar and Jaguara. This diagnostic
and measurement tool helps us under-
stand both positive and negative social
and environmental impacts the initia-
tives have on the area.
In 2016, there were no recorded negative
impacts. Quite the opposite actually, as
current initiatives have had a demon-
strable positive influence over local com-
munities (see more below).
203-1
Local communities – Brazil (R$ thousand)
Investment in communities surrounding Natura’s units -
Natura resources1
Investment in communities surrounding Natura’s units -
Crer para Ver resources
2014
2015
2016
375
590
478
455
530
556
1. All investments are allocated to non-governmental organizations and partners that contribute towards the implementation and operation of projects in
each location.
CAJAMAR (SÃO PAULO STATE)
The Inova Cajamar (Innovate Cajamar)
Movement has formed new partner-
ships and seen growth in the number
of participants, including representa-
tives of public and private institutions,
civil society, municipal employees and
Natura’s employees and consultants.
Ten monthly meetings were held in
2016, along with three community
drives for the transformation of public
spaces and municipal culture, involving
more than a thousand participants.
During municipal elections, the move-
ment got 25 candidates (who were run-
ning for mayor and council member) to
commit to the adoption of the principles
of the Sustainable Cities Program.
Natura’s partnership with the SOS
Mata Atlântica Foundation also en-
abled the visit of 1,200 students and
teachers from 13 Cajamar schools to
the SOS Mata Atlântica Forestry Exper-
iments Center, in Itu (SP). In addition to a
guided visit, the visitors received around
3,000 seedlings of Brazilian native spe-
cies to plant in their school grounds and
neighborhoods. By the end of the proj-
ect, the schools participated in a draw
for a graffiti workshop, with the winning
institution having its walls decorated
with graffiti depicting the fauna and flo-
ra of the Atlantic Forest.
Learn more:
Follow the initiatives at www.inovacajamar.org.br (in portuguese) and facebook.com/inovacajamar
First municipal transformation community drive (in portuguese):
https://www.youtube.com/watch?v=GXZVlJ7rxz4&t=23s
71
2016 ANNUAL REPORT
JAGUARA (SÃO PAULO STATE)
In 2016, the Movimento Comunidade
Viva (Living Community Movement) from
Jaguara focused on expanding local
engagement, as well as publicizing im-
portant neighborhood councils and en-
couraging its members to join them.
There were also 12 monthly meetings
and two community drives aimed at
transforming public spaces and cul-
tivating local talent through culture,
sports, food, leisure and income gen-
eration. The response to the initiative
was significant, having attracted more
than 1,500 participants.
Moreover, a local CV database was
set up with the profiles of around 400
participants, so that companies in the
area can recruit locally, thus creating
jobs and generating income within the
community.
Learn more:
facebook.com/comvivajaguara
Video of one of the community drives (in portuguese): https://www.youtube.com/watch?v=h1QtJZCzYnA&t=13s
BENEVIDES (PA)
The Natura Local Development Pro-
gram - Benevides, in partnership with
UDBEN (Association for the Develop-
ment of Benevides), conducted two
community drives in the region: Giro
Cultural (Cultural Round) and Giro de
Negócios e Oportunidades (Business
and Opportunities Round), bringing
together around 610 participants, 33
partners, 23 attractions and 28 volun-
teers, in four different locations.
In order to stimulate professional
training, we signed a cooperation
agreement with Senai (National In-
dustrial Training Service), enabling the
creation of training courses in indus-
trial production processes. Between
2015 and 2016, there were four class-
es with 83 young people undergoing
training, 11 of whom have been hired
locally.
Another area of activity in Benevides is
the development of micro and small lo-
cal businesses. Together with Sebrae
(Brazilian Service to Support Micro
and Small Enterprises), 108 companies
were identified as having potential for
development and 18 of them received
training. Of those, five small compa-
nies have already become Ecoparque
suppliers, thus helping invigorate the
local economy.
413-1
Proportion of Natura operations that set up programs focused on the development,
engagement and impact assessment of local communities, and include:
Ongoing assessment of social and environmental, including gender1, impact due to
engagement of the local population
Public disclosure of assessment results1
Community development programs based on local needs
66.6%
66.6%
100%
Stakeholder engagement plan following the identification of the main stakeholders
100%
Community public advisory committees or groups based on local communities and
procedures that include groups at risk
Occupational health and safety councils or committees and other labor representative
bodies for dealing with impacts
Formal structure for lodging complaints or ombudsman2
100%
No
100%
1. The Social Progress Indicator (IPS, in Portuguese) is measured every two years. The most recent survey was conducted in Cajamar and the district of
Jaguara, in 2015. 2. In addition to an Ombudsman channel that is open to all stakeholders, Natura organizes engagement programs, conducts impact
assessment and is involved with local communities in and around Cajamar, Benevides and the district of Jaguara. We are also in constant contact with these
communities.
72
2016 ANNUAL REPORT
THE NATURA INSTITUTE IN
CAJAMAR AND BENEVIDES
Focused on the training of literacy
teachers, the Trilhas (Tracks) project
reached:
• 31 schools, 117 teachers and 3,038
students in Benevides.
• 22 schools, 132 teachers and 3,151
students in Cajamar.
from an
With an emphasis on educational
transformation
integrated
perspective, connecting teachers, stu-
dents, families and community, the Co-
munidade de Aprendizagem (Learning
Community) project has affected:
• 7 schools, 112 teachers and 2,145
students in Benevides.
• 10 schools, 314 teachers and 1,850
students in Cajamar.
Activities supporting education man-
agement, including, for example, assis-
tance from the Natura Institute in the
preparation of municipal education
plans (PMEs), were also conducted,
having an impact on:
• 49 schools, 450 teachers and 18,335
students in Benevides.
• 49 schools, 779 teachers and 19,118
students in Cajamar.
We initiated our efforts in Benevides in 2014. In the beginning, the municipality’s Basic Education Development Index
(IDEB) for the early years of elementary education was 4.4. In 2016, Benevides reached 5.4, surpassing the national target
of 4.6. In Cajamar, we helped the municipality raise the IDEB for the early years of elementary education to 5.8, well above
the 5.1 mark recorded in the previous assessment (2013).
THE NATURA INSTITUTE
Supporting quality education
203-1, 203-2, 103-2, 103-3
We founded the Natura Institute in
2010 to manage and apply the funds
generated by the sales of the Crer para
Ver (Believing is Seeing) line of non-cos-
metic products that was launched in
1995 and whose profits are used in full
to support projects aimed at improv-
ing the quality of public education.
Since then, profits have been steadily
rising, hitting a new record in 2016 with
a total of R$ 38.2 million. In Brazil, the
figure reached R$ 23.7 million, while the
volume amounted to R$ 14.5 million in
International Operations.
Our consultants are the real stars of
this movement in favor of education,
since they are the ones engaged in
selling products from this line while
waiving their own profits (as does Na-
tura). In 2016, there were more than 1.5
million registered consultants in Brazil
and in International Operations who
sold at least one Crer para Ver prod-
uct. It is important to stress that Bra-
zilians also started to benefit from a
structured project in support of edu-
cation (read more about this initiative
on page page 44).
As it entered its fifth year of activity in
2015, the institute updated its strategic
plan in an effort to make its initiatives
even more transformative, and with
long-term effects. In 2016, the positive
effects of this new positioning were al-
ready being felt.
Since 2011, the institute has support-
ed the efforts of state Departments
of Education to set up full-time school
programs. In 2015, in partnership with
other institutes, the Natura Institute
conducted a major study based on
the results obtained from schools in
Pernambuco state that pioneered the
full-time education model. This repre-
sented a positive contribution to the
debate on the subject and influenced
the development of public policies
in the field. The states of Maranhão,
Paraíba, Sergipe and Espírito Santo re-
ceived the support of the Institute and
its partners in 2016 to implement their
full-time school programs. Including
all Departments of Education that are
being supported, the program involves
approximately 770 full-time schools in
eight states.
In 2016, the Comunidade de Apren-
dizagem na Escola (School Learning
Community) project, which aims to
drive a social transformation process
that involves not only the school and
the students, but also their families and
the wider community, was jointly de-
veloped with 24 state Departments of
Education across Brazil, involving 594
schools. In International Operations,
where programs are led by local oper-
ations with support from the institute,
the project has already been imple-
mented in approximately 378 schools
in Argentina, Chile, Colombia, Mexico
and Peru. During 2016, we certified 102
trainers to work in the Comunidade de
Aprendizagem program in Brazil and
abroad. The model has been improved
upon and gained recognition from gov-
ernment education agencies. In Argen-
tina, for instance, two provinces made
Comunidade de Aprendizagem part
of their official education programs. In
addition, in Peru, it was included in the
most important government teach-
er-training program.
In Brazil, the Natura Institute has done
extensive work in partnership with the
municipal Departments of Education
of Cajamar (São Paulo state) and Ben-
evides (Pará state), where we have pro-
duction units. In both places, the RAE
(Educational Support Network) project
was implemented in 2013, in an effort to
improve education management and
boost students’
learning outcomes.
The Institute’s efforts are based on a
deep analysis of local needs that led to
the subsequent development of a four-
year action plan designed to strength-
en the pedagogical management at
those departments.
RAE’s activities, coupled with programs
aimed at stimulating educational im-
provements that are promoted by pub-
lic school networks in Benevides and
Cajamar, are already yielding positive
results, confirmed by the improvement
of scores in the Prova Brasil, the nation-
al school performance assessment, and
the IDEB (Basic Education Development
Index) rating achieved by these munic-
ipalities. In the latter, Benevides went
from 4.4 in 2013 to 5.4 in 2016, while in
Cajamar it rose from 5.4 to 5.8.
73
2016 ANNUAL REPORT
203-1/203-2
Investment in education for public benefit – Brazil
2014
2015
2016
Crer para Ver program funding1 (R$ million)
18.8
19.5
23.7
Crer para Ver penetration2 (% cycle)
20.2
22.9
22.6
Projects developed and supported3 (R$ thousand)
15,976
23,898
23,313
Participating municipalities
4,994
4,884
Participating schools
Participating teachers
Students involved
73,380
148,084
3,196,017
-
-
-
Participating municipal Departments of Education
4,594
4,884
State Departments of Education in partnership with the
Natura Institute
27
27
828
910
9,183
476,507
828
22
1. Refers to profit, before deducting income tax, from the Crer para Ver line’s sales. 2. Average of 18 indicator cycles showing the proportion of Natura
Consultants who bought an item from the Crer para Ver line, in relation to the total number of active Natura Consultants. 3. The amount the Natura Institute
invested in 2016 (in thousands of reais) is divided between projects (R$ 16,362), mobilization (R$1,566) and payroll costs and operating expenses directly
related to the projects (R$ 5,384). Read more at (in portuguese): www.institutonatura.org.br
203-1/203-2
Investment in education for public benefit –
International Operations
2014
2015
2016
Crer para Ver program funding1 (R$ thousand)
6,692
10,523
14,537
Crer para Ver penetration2 (% cycle)2
18.7%
17%
19.4%
Projects developed and supported3 (R$ thousand)
4,350
8,112
10,237
Schools/organizations assisted
306
337
475
Participating teachers, coordinators and directors
2,025
10,598
13,057
Students benefited
66,860
60,091
89,021
1. Refers to profit, before deducting income tax, from the Crer para Ver line’s sales. 2. Average of 18 indicator cycles showing the proportion of Natura
Consultants who bought an item from the Crer para Ver line, in relation to the total number of active Natura Consultants.
74
2016 ANNUAL REPORT INSTITUTIONAL MARKETING
Activities focused on support and
sponsorship
In 2016, we continued to invest in the
support and sponsorship of programs,
allocating funds for initiatives working
towards sustainable development and
the empowerment of civil society organi-
zations, as well as for historical platforms
linked to Natura’s corporate behavior.
We also funded cultural projects, throu-
gh Natura Musical, and fashion-oriented
projects that enhance the development
of our brand positioning.
In line with company-wide efforts to re-
duce costs, investment in support and
sponsorship was smaller in 2016 than in
previous years. Changes made to the tax
incentives available also affected the fi-
nancial amounts directed to these initia-
tives. Two regional calls for tenders were
not carried out in 2016 in the states of Mi-
nas Gerais and São Paulo. In the former,
this was as a direct consequence of the
changes made to the terms and proces-
ses of its incentive law, and in the latter,
this was the result of changes made to
the ICMS tax calculation procedure. As
for the funding of events with resources
from Natura itself, we did not hold the
Natura Musical Festival in 2016.
We have been supporting Brazilian music
for 11 years, continuing Natura Musical’s
activities in the areas of renovation and
preservation. Throughout the years, we
have contributed to the annual release of
around 20 albums, some of which made it
to a few best albums of the year lists, whi-
le others won national and international
awards. We also support projects for the
registration and dissemination of Brazi-
lian music genres and folk figures.
In 2016, more than 1,500 projects applied
through our selection processes. Of tho-
se, 25 initiatives were chosen to take part
in the 2017 edition of the Natura Musical
project, through one national and three
regional calls to tender (Bahia, Pará and
Rio Grande do Sul). Among the projects
selected are established artists like Her-
meto Pascoal, Anelis Assumpção and
Nina Becker and new talents like Rubel
from Rio de Janeiro and Sofia Freire from
Pernambuco, both selected by popular
vote on the Natura Musical website.
A total of around R$ 4.6 million were in-
vested in the four calls, combining Natu-
ra’s own funds with resources obtained
through incentive laws. At the national
level, the support is provided under the
Rouanet and Audiovisual laws, and at
the state level, through the ICMS tax le-
gislation. In 2016, there were approxima-
tely 50 projects already underway, ha-
ving been selected in previous years. As a
result of these, 37 cultural products whe-
re launched, including CDs, DVDs, LPs
and books and over 100 concerts were
held all over the country. Projects also
benefitted from the distribution of musi-
cal content through digital channels, na-
mely on the Natura Musical website and
its social networks, which together have
more than 1.5 million followers.
Another important initiative was the
resumption of Natura’s involvement in
fashion events, by sponsoring São Pau-
lo Fashion Week, the biggest and most
important fashion event in Latin Ame-
rica, with two editions taking place in
April and October 2016. Inspired by the
proposal of the Viva Sua Beleza Viva
(Live Your Living Beauty) campaign, we
organized a series of talks on topics re-
lated to the world of beauty care and
behavior, discussing issues such as “men
in transition,” “she’s too old for this” and
“makeup for everyone”. We also organi-
zed daily concerts featuring artists such
as Elza Soares, Filipe Catto, O Terno and
Emicida. Lastly, we were present at other
important Brazilian fashion events, such
as Casa de Criadores and Rio Moda Rio,
where we were able to make an impres-
sion on the more than 330,000 people
who attended these live events.
Support and sponsorships – Natura Funding
(R$ thousand)
2014
2015
2016²
Sustainable Development
Brazilian Music
Fashion¹
Empowerment of Civil Society Organizations
Municipalities
Total Natura funding
5,295
8,440
0
1,150
n.a.
154
9,010
0
1,020
314
337
1,879
2,610
603
0
14,885
10,498
5,429
1. In 2016, we resumed our investment in Fashion, previously reported under “Behavior and Attitude”. 2. In 2016, changes were made to the methodology used
for reporting Natura’s funding, meaning it is now different from the one used previously. Only investments using our own funds, which are directly allocated
to projects, were reported. Investments in program marketing and communication are not included.
75
2016 ANNUAL REPORT Support and sponsorships – Funds obtained
through tax incentives (R$ thousand)
2014
2015
2016
Brazilian Music
6,690
5,541
3,175
Total funds obtained through tax incentives
6,989
5,541
3,175
Combined Total (Natura + tax incentives)
21,874
16,039
8,604
76
2016 ANNUAL REPORT About this
Report
ABOUT THIS REPORT
Learn about the Standards
used in the preparation of
the 17th Natura GRI report
The Natura 2016 Annual Report pres-
ents the highlights of the year, our
business performance and the com-
mitments undertaken by the compa-
ny. Since the year 2000 edition, we
have published the annual informa-
tion in accordance with the Global Re-
porting Initiative (GRI) sustainability
reporting frameworks – the first com-
pany in Latin America to produce this
type of report. Furthermore, this infor-
mation has been disclosed along with
the Annual Report since 2002, bring-
ing together financial and non-finan-
cial data in one single report. 102-51,
102-52
This report has been prepared in ac-
cordance with the GRI Standards:
Comprehensive Option. Replacing the
G4 version of the sustainability indica-
tors, the Standards version proposes
a reorganization of information. This
is the first time we have adapted our
information to the new format. We
believe that there is more to be done
in terms of adapting it to the new
requirements and intend to be ful-
ly in alignment with it as of next year.
102-54, 102-55
Other references guiding the develop-
ment of this report were our Materiality
Matrix, which lists the six topics award-
ed the highest priority, in the opinion
of our stakeholders (see the relation
below) and the goals of our 2050 Sus-
tainability Vision. 102-46
As a result, we have a set of indicators
of the profile, governance and eco-
nomic, financial and social factors that
guided the production of this 2016
report. In the GRI Content Index, we
list only the most material indicators.
Because of our commitment to trans-
parency, we have chosen to continue
reporting on other indicators, both GRI
and those pertaining specifically to our
own business (see the Appendices for
more information).
The report also serves to communicate
our progress regarding the principles of
the Global Compact, of which Natura is a
member. The Global Compact is a UN ini-
tiative that calls brings together compa-
nies, workers and civil society to promote
sustainable growth and civil rights.
The information contained in the fi-
nancial statements covers all of our
operations, including Aesop, the Aus-
tralian company acquired in 2013. For
information, however,
non-financial
the scope of the indicators covers only
Natura’s activities in Brazil and our In-
ternational Operations, where most of
our operations are concentrated and,
consequently, the greater part of our
social and environmental impacts lies.
102-45
Significant changes in relation to data
reported in previous years, as well as
alterations made to the calculation
base or measurement techniques are
pointed out in the text and tables con-
tained in this report. 102-10, 102-48,
102-49
The data presented in this publication
refer to the period from January 1st to
December 31st of 2016 and the entire
disclosure process has been super-
vised by the Vice-President of Finance
and Institutional Relations. The annu-
al report has also received the outside
assurance of EY Auditores Indepen-
dentes S.S. 102-32, 102-50, 102-56
For more information about this re-
port, please contact the team respon-
sible for its preparation by email at
relatorioanual@natura.net. Stakehol-
ders can also express their opinions on
Natura’s performance, and its man-
agement and relationship practices
through social networks and in meet-
ings. 102-53
MATERIAL TOPICS
102-40, 102-42
As part of our communication process
with our relationships network, we
have consulted our main stakeholders
in order to determine the company’s
critical issues.
During the most recent procedure,
carried out in 2014, six material topics
were defined, namely water, education
for the development of employees and
NCs, climate change, waste, transpar-
ency, product origin and enhancing
the role of socio-biodiversity.
The process of determining the ma-
teriality took into consideration our
Sustainability Vision, outlining the
company’s strategy for 2050 and the
goals to be achieved by 2020. The
process began with the identification
of more than 20 sustainability topics,
pre-selected from the Sustainability
Vision and industry documents, which
were then presented in a series of con-
sultations in Brazil and where we have
International Operations.
The survey took into consideration the
perceptions of Natura’s most valued
stakeholders, such as Employees - in-
cluding management -, Natura Con-
sultants, customers and suppliers - in-
cluding supplier communities, as well as
the opinions of a few shareholders and
representatives of local communities. In
all, more than 4,200 online surveys were
completed and 40 face-to-face and
telephone interviews were conducted.
Additionally, we also held a panel dis-
cussion with 18 participants represent-
ing different stakeholder groups.
78
2016 ANNUAL REPORT Materiality - 102-43, 102-44, 102-46, 102-47, 103-1
Topic
Description
Where 103-1
Related factors and
GRI indicators
SDG
Correlation
Water
Education for
Employee and NC
development
Climate change
Waste
Relative reduc-
tion in water
consumption
and pollution
throughout the
value chain and
neutralization of
water impact
Development
of consultant
network and
of employees,
including actions
to promote the
improvement of
public education.
Reduction of
greenhouse
gas emissions
throughout the
value chain and
neutralization
through projects
that include social
benefits.
Development of
packaging that
has a smaller
environmental
impact and
promotes
conscientious
consumption.
• Water sources and
the environment
• Supplier
communities
• Operational units
• Society in general
• Consumers (use
and post-consumer
disposal)
• Natura Consultants
• Employees
• Natura Institute
• Society in general
• Suppliers
• Transportation
companies
• Operational units
• Environment
• Product creation
• Operational units
(zero waste)
• Transportation
cooperatives _
Recyclable materials
• Consumers (post-
consumer disposal)
• Environment
Transparency and
product origin
Increased visi-
bility of business
practices and the
origin of pro-
ducts.
• Supply chain
• Supplier
communities
• Operational units
• Corporate
management
• Consumers
• Water
• Effluent and waste
303-1, 303-1, 306-1,
306-5
SDG 6. Clean
Water and
Sanitation
• Indirect economic
impacts
• Education and training
SDG 4. Quality
Education
203-1, 203-2,
404-1, 404-3
• Economic
Performance
• Emissions
201-2, 305-1, 305-2, 305-
3, 305-4, 305-5, 305-6
• Materials
• Effluent and waste
• Products and services
301-2, 306-2, 301-3
• Environmental
assessment of suppliers
• Assessment of supplier
labor practices
• Assessment of supplier
human rights track
record
• Assessment of supplier
impacts on society
• Product and service
labeling
• Products and services
102-9, 308-1, 414-1, 417-1
SDG 13. Climate
Action
SDG 12.
Responsible
Consumption
and Production
SDG 12.
Responsible
Consumption
and Production
79
2016 ANNUAL REPORT Materiality - 102-43, 102-44, 102-46, 102-47, 103-1
Topic
Description
Where 103-1
Related factors and GRI
indicators
SDG
Correlation
Enhancing the role
of socio-biodiversity
• Product creation
• Supplier
communities
• Purchasing policies
• Consumers
• Amazon region
Promotion of
sustainable busi-
nesses by using
products and
services mainly
from the Amazon
region.
• Economic performance
• Indirect economic impacts
• Biodiversity
• Local communities
• Child labor
• Forced or compulsory
labor practices
• Assessment of supplier
human rights track record
• Channels for grievances
and complaints regarding
human rights
• Products and services
201-1, 201-2, 203-1, 203-2,
304-1, 304-2, 413-1, 408-1,
409-1, 414-1 y 103-2
SDG 15. Life
On Land
GRI Content Index
102-55
GRI Standard
Disclosure
Page/ response
Omission
SDG cor-
relation
with the
disclosures
GRI 102: General
disclosures 2016
102-1 Name of the
organization
102-2 Activities, brands,
products and services
102-3 Location
of organization's
headquarters
102-4 Location of
operations
102-5 Ownership and legal
form
8
8, 37
8
8
8
80
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response
Omission
102-6 Markets served
102-7 Scale of the
organization
102-8 Information on
employees and other
workers
102-9 Supply chain
102-10 Significant changes
to the organization and its
supply chain
102-11 Precautionary
Principle or approach
102-12 External initiatives
102-13 Membership of
associations
GRI 102: General
disclosures 2016
102-14 Statement from
senior decision-maker
102-15 Key impacts, risks,
and opportunities
102-16 Values, principles,
standards, and norms of
behavior
102-17 Mechanisms for
advice and concerns about
ethics
102-18 Governance
structure
102-19 Delegating authority
102-20 Executive-level
responsibility for economic,
environmental, and social
topics
102-21 Consulting
stakeholders on economic,
environmental, and social
topics
9, 10
9, 10
8, 23, 108
68
78
39
50
126
4, 6
33
35
35
31
31
31
31
SDG cor-
relation
with the
disclosures
8. Decent
employment
and
economic
growth
16. Peace,
justice and
strong
institutions
16. Peace,
justice and
strong
institutions
16. Peace,
justice and
strong
institutions
81
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response
Omission
102-22 Composition of the
highest governance body
and its committees
102-23 Chair of the highest
governance body
32
31
102-24 Nominating and
selecting the highest
governance body
GRI 102: General
disclosures 2016
102-25 Conflicts of interest
The definition of board
members considers
the qualifications,
complementarity of
executive experiences,
identification with the
operating principles of
Natura’s business and
the absence of conflicts
of interest. The term of
office is one year and can
be renewed at the end of
this period, if approved
during the General
Shareholders Meeting.
Read more on page 31
We seek to uphold
the best corporate
governance practices.
All decisions about
operations are submitted
to our management
team, in accordance
with the roles defined in
our Bylaws. In the event
of a possible conflict of
interest between the
subjects under review
and any member of our
deliberative bodies, we
follow the conditions laid
down in the Brazilian
Corporations Law, and
the respective member
must abstain from voting;
the final decision is up
to the other members
that do not have any
relationship with the
matter under review.
SDG cor-
relation
with the
disclosures
5. Gender
equality
16. Peace,
justice and
strong
institutions
16. Peace,
justice and
strong
institutions
5. Gender
equality
16. Peace,
justice and
strong
institutions
16. Peace,
justice and
strong
institutions
82
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response
Omission
SDG cor-
relation
with the
disclosures
It is a job of the Board
of Directors to decide
upon and monitor the
implementation of the
company’s strategy
and regularly assess
the performance of the
CEO and the Executive
Committee. Board
members analyze the
quarterly performance
and Natura’s annual
report, which include
the main environmental
indicators that are
important to the
company. Also examined
by the board are the
definition and review
of the strategic plan,
expansion projects and
investment programs,
risk management and the
definition of the amount
of profit to be shared with
Natura’s employees.
Read more on page 31
102-26 Role of highest
governance body in setting
purpose, values, and
strategy
GRI 102: General
disclosures 2016
102-27 Collective
knowledge of highest
governance body
102-28 Evaluating the
highest governance body’s
performance
102-29 Identifying and
managing economic,
environmental, and social
impacts
102-30 Effectiveness of risk
management processes
102-31 Review of economic,
environmental, and social
topics
102-32 Highest governance
body’s role in sustainability
reporting
31
32
31
32
32
78
4. Quality
education
16. Peace,
justice and
strong
institutions
83
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response
Omission
SDG cor-
relation
with the
disclosures
102-33 Communicating
critical concerns
GRI 102: General
disclosures 2016
102-34 Nature and total
number of critical concerns
102-35 Remuneration
policies
102-36 Process for
determining remuneration
Board members
analyze the quarterly
performance and
Natura’s annual report,
which include the main
environmental indicators
that are important to the
company. Also examined
by the board are the
definition and review
of the strategic plan,
expansion projects and
investment programs,
risk management and the
definition of the amount
of profit t0 be shared
with Natura’s employees.
Board members
analyze the quarterly
performance and
Natura’s annual report,
which include the main
environmental indicators
that are important to the
company. Also examined
by the board are the
definition and review
of the strategic plan,
expansion projects and
investment programs,
risk management and the
definition of the amount
of profit t0 be shared
with Natura’s employees.
All details of our
policy and practice of
remuneration of senior
management is explained
in our Reference Form,
which can be accessed
here.
All the details of our
policy and practice
of remuneration of
senior management
are explained in our
Reference Form, which
can be accessed here.
84
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response
Omission
SDG correlation
with the disclosures
GRI 102: General
disclosures 2016
102-37
Stakeholders’
involvement in
remuneration
102-38 Annual total
compensation ratio
102-39 Percentage
increase in annual
total compensation
ratio
102-40 List of
stakeholder groups
102-41 Collective
bargaining
agreements
Shareholders approve
the executive officers’
remuneration at the
General Shareholders
Meeting (GSM). During
the meeting, they can
comment favorably
or negatively on the
subject. Learn about
our remuneration
policy regarding senior
management on page
184 of this document.
110
111
78
Covering 100% of
employees, the
collective bargaining
negotiations are
coordinated by the
human resources
department and obey
the standards and
limitations determined
by local legislation.
102-42 Identify-
ing and selecting
stakeholders
78
16. Peace, justice and
strong institutions
The reassess-
ment of the
information for
2016 prohibited
the reporting of
this item due to
the confidential
nature of the
information.
8. Decent employ-
ment and economic
growth
85
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response
Omission
SDG correlation
with the disclosures
GRI 102: General
disclosures 2016
Natura maintains
open communication
at all times with its
stakeholders. One of its
initiatives brings together
consumers, consultants
and researchers, among
others, for a program
focused on the co-
creation and generation
of ideas in the field of
innovation.
We also annually
evaluate the quality
of these relationships
through satisfaction
and loyalty surveys
conducted with our
priority stakeholders:
employees, Natura
Consultants, suppliers,
supplier communities
and consumers.
Read more on pages 23,
41, 43, 69, 79, 123, 133
23, 41, 43, 69, 79, 123, 133
78
79
79
78
78
78
78
78
78
102-43 Approach
to stakeholder
engagement
102-44 Key topics
and concerns raised
102-45 Entities in-
cluded in the con-
solidated financial
statements
102-46 Defining
report content and
topic Boundaries
102-47 List of mate-
rial topics
102-48 Restate-
ments of information
102-49 Changes in
reporting
102-50 Reporting
period
102-51 Date of most
recent report
102-52 Reporting
Cycle
102-53 Contact
point for questions
regarding the report
86
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/
response
Omission
SDG correlation with
the disclosures
102-54 Claims of reporting
in accordance with the GRI
Standards
102-55 GRI Content Index
78
80
GRI 102: General
disclosures 2016
102-56 External assurance
78, 150, 151
103-1 Explanation of the
material topic and its
boundary
79
GRI 103: 2016
Management
approach
103-2 The management
approach and its components
13, 39, 107,
111
GRI 201: Economic
Performance 2016
103-3 Evaluation of the
management approach
13, 39, 107,
111
201-1 Direct economic value
generated and distributed
17
201-2 Financial implications
and other risks and
opportunities due to climate
change
201-3 Defined benefit plan
obligations and other
retirement plans
201-4 Financial assistance
received from government
34, 107
111
107
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
2. Zero hunger
5. Gender equality
7. Accessible and clean
energy
8. Decent employment
and economic growth
9. Industry, innovation
and infrastructure
13. Combating climate
change
87
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/
response
Omission
SDG correlation with
the disclosures
203-1 Investments in
infrastructure and services
55, 56, 71,
73, 74, 132
GRI 203: 2016
Indirect economic
impact
203-2 Indirect economic
impact
56, 73, 74
103-1 Explanation of the ma-
terial topic and its boundary
79
GRI 103: 2016 Man-
agement approach
103-2 The management
approach and its
components
66, 67, 141
103-3 Evaluation of the
management approach
66, 67, 141
301-1 Materials used by
weight or volume
GRI 301: Materials
2016
301-2 Recycled input
materials used
301-3 Reclaimed products
and their packaging
materials
103-1 Explanation of the ma-
terial topic and its boundary
141
66
142
79
GRI 103: 2016 Man-
agement approach
103-2 The management
approach and its
components
64, 143
103-3 Evaluation of the
management approach
64, 143
2. Zero hunger
5. Gender equality
7. Accessible and clean
energy
9. Industry, innovation
and infrastructure
11. Sustainable Cities and
Communities
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
8. Decent employment
and economic growth
12. Responsible consump-
tion and production
8. Decent employment
and economic growth
12. Responsible consump-
tion and production
8. Decent employment
and economic growth
12. Responsible consump-
tion and production
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
88
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response
Omission
SDG correlation
with the disclosures
303-1 Water withdrawal by
source
65, 143, 144
6. Clean water and
sanitation
303-2 Water sources
significantly affected by
withdrawal of water
144
6. Clean water and
sanitation
GRI 303: Water
2016
303-3 Water recycled and
reused
144
103-1 Explanation of the
material topic and its
boundary
79
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
54, 58
103-3 Evaluation of the
management approach
54, 58, 59
6. Clean water and
sanitation
8. Decent employment
and economic growth
12. Responsible con-
sumption and produc-
tion
1. Elimination of po-
verty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
89
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response Omission
SDG correlation
with the disclosures
GRI 304:
Biodiversity 2016
304-1 Operational sites
owned, leased, managed
in, or adjacent to, protected
areas and areas of high
biodiversity value outside
protected areas
304-2 Significant impacts
of activities, products, and
services on biodiversity
304-3 Habitats protected
or restored
304-4 IUCN Red List
species and national
conservation list
species with habitats in
areas affected by the
organization’s operations
103-1 Explanation of the
material topic and its
boundary
146
55
147
147
79
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
61, 62
103-3 Evaluation of the
management approach
61, 62
6. Clean water and
sanitation
14. Underwater life
15. Life on land
6. Clean water and
sanitation
14. Underwater life
15. Life on land
6. Clean water and
sanitation
14. Underwater life
15. Life on land
6. Clean water and
sanitation
14. Underwater life
15. Life on land
1. Elimination of po-
verty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
90
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response Omission
305-1 Direct greenhouse
gas (GHG) emissions
(Scope 1)
63, 64, 137
GRI 305: Emissions
2016
305-2 Indirect greenhouse
gas (GHG) emissions
(Scope 2)
62, 63, 64, 137
305-3 Indirect greenhouse
gas (GHG) emissions
(Scope 3)
64, 137
SDG correlation
with the disclosures
3. Good health and
welfare
12. Responsible con-
sumption and produc-
tion
13. Combating climate
change
14. Underwater life
15. Life on land
3. Good health and
welfare
12. Responsible con-
sumption and produc-
tion
13. Combating climate
change
14. Underwater life
15. Life on land
3. Good health and
welfare
12. Responsible con-
sumption and produc-
tion
13. Combating climate
change
14. Underwater life
15. Life on land
91
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/ response
Omission
305-4 Greenhouse gas
(GHG) emissions intensity
305-5 Reduction of
greenhouse gas (GHG)
emissions
GRI 305: Emissions
2016
305-6 Emissions
of ozone-depleting
substances (SDG)
305-7 Nitrogen oxides
(NOX), sulfur oxides (SOX),
and other significant air
emissions
62
138
138
138
SDG correlation
with the disclosures
13. Combating climate
change
14. Underwater life
15. Life on land
13. Combating climate
change
14. Underwater life
15. Life on land
3. Good health and
welfare
12. Responsible con-
sumption and produc-
tion
13. Combating climate
change
3. Good health and
welfare
12. Responsible con-
sumption and produc-
tion
13. Combating climate
change
14. Underwater life
15. Life on land
92
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/
response
Omission
SDG correlation
with the disclosures
103-1 Explanation of the
material topic and its
boundary
79
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
64, 66, 145
103-3 Evaluation of the
management approach
64, 66, 145
306-1 Total water discharge
by quality and destination
145, 146
306-2 Waste by type and
disposal method
142, 143
GRI 306: Effluents
and waste 2016
306-3 Significant spills
146
306-4 Transport of
hazardous waste
143
306-5 Water bodies
affected by water discharges
and/or runoff
145, 146
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
3. Good health and
welfare
6. Clean water and
sanitation
12. Responsible
consumption and
production
3. Good health and
welfare
6. Clean water and
sanitation
12. Responsible
consumption and
production
3. Good health and
welfare
6. Clean water and
sanitation
12. Responsible
consumption and
production
14. Underwater life
15. Life on land
3. Good health and
welfare
12. Responsible
consumption and
production
6. Clean water and
sanitation
15. Life on land
93
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/
response
Omission
SDG correlation with
the disclosures
103-1 Explanation of the
material topic and its
boundary
79
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
68, 130
GRI 308: Supplier
environmental
assessment 2016
103-3 Evaluation of the
management approach
308-1 New suppliers that
were screened using
environmental criteria
308-2 Significant negative
impacts, actual and
potential, in the supply chain
and measures taken
103-1 Explanation of the
material topic and its
boundary
68
129
130
79
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
24, 25
103-3 Evaluation of the
management approach
23, 24, 25
404-1 Average hours of
training per year per
employee
109
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
4. Quality education
5. Gender equality
8. Decent employment
and economic growth
GRI 404: Training
and education 2016
404-2 Continuous programs
for upgrading employee
learning and retirement
transition assistance
programs
404-3 Percentage of
employees receiving regular
performance and career
development reviews
24, 109, 110
8. Decent employment
and economic growth
25
5. Gender equality
8. Decent employment
and economic growth
94
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/
response
Omission
SDG correlation with
the disclosures
103-1 Explanation of the
material topic and its
boundary
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
103-3 Evaluation of the
management approach
GRI 408: Child labor
2016
408-1 Operations and
suppliers at significant risk
for incidents of child labor
103-1 Explanation of the
material topic and its
boundary
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
GRI 409: Forced or
Compulsory Labor
2016
103-3 Evaluation of the
management approach
409-1 Operations and
suppliers identified as at sig-
nificant risk for incidents of
forced or compulsory labor
103-1 Explanation of the
material topic and its
boundary
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
103-3 Evaluation of the
management approach
79
125
125
125
79
125
125
125
79
71
71
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
8. Decent employment
and economic growth
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
95
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/
response
Omission
SDG correlation with
the disclosures
GRI 413: Local
communities 2016
413-1 Operations with local
community engagement,
impact assessments, and
development programs
413-2 Operations with
significant actual and
potential negative impacts
on local communities
103-1 Explanation of the
material topic and its
boundary
71, 72
55, 71
79
GRI 103:
Management
approach 2016
103-2 The management
approach and its
components
68, 130, 131
GRI 414: Supplier
Social Assessment
2016
103-3 Evaluation of the
management approach
68, 130, 131
414-1 New suppliers that
were screened using social
criteria
55, 68,
130, 131
414-2 Negative social
impacts in the supply chain
and actions taken
125, 130, 131
103-1 Explanation of the
material topic and its
boundary
79
GRI 103: 2016
Management
approach
103-2 The management
approach and its
components
39, 134
103-3 Evaluation of the
management approach
39, 134
1. Eradicate poverty
2. Zero hunger
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
1. Eradicate poverty
5. Gender equality
8. Decent employment
and economic growth
16. Peace, justice and
strong institutions
96
2016 ANNUAL REPORT GRI Standard
Disclosure
Page/
response
Omission
SDG correlation with
the disclosures
GRI 417: Labeling
of products and
services 2016
417-1 Requirements for
product information and
labeling
417-2 Incidents of non-
compliance concerning
product and service
information and labeling
417-3 Incidents of non-
compliance concerning
marketing communication
regulations and codes
134
134
134
12. Responsible
consumption and
production
16. Peace, justice and
strong institutions
16. Peace, justice and
strong institutions
The Global Compact Principles
Page
1. Respect and protect human rights
28, 29, 68, 71, 72, 85, 124,
125, 128, 130, 131
2. Prevent violations of human rights
68, 124, 128, 130, 131
3. Support freedom of association at work
4. Abolish forced labor
5. Abolish child labor
6. Eliminate discrimination in employment
85, 121, 124
68, 130, 131
68, 125, 130, 131
28, 68, 110, 111, 124, 110730,
131, 135, 136,
7. Support a precautionary approach to environmental challenges
107
8. Promote environmental responsibility
55, 61, 62, 63, 64, 65, 66,
107, 129, 130, 131, 134, 137,
138, 139, 140, 142, 141, 143,
144, 145, 146, 147, 148
9. Encourage environmentally friendly technologies
66, 138, 41, 142, 144
10. Combat corruption in all its forms, including extortion and bribery
122, 123, 125
97
2016 ANNUAL REPORT 2050
Sustainability
Vision
2050 Sustainability Vision
Brands and Products
Area
2020 Goal
2016 Performance
Percent
of goal
achieved
SDG
Brands
Formulas
The environmental and
social footprints of all
Natura brand products
will be disclosed, along
with their respective
improvement
commitments.
Implementation
of a new proposal
for communication
and engagement
with consumers and
Natura consultants,
highlighting the social
and environmental
impacts that their
purchase/sale has on
society and the planet.
Under imple-
mentation
12. Responsible
Consumption
and Production
Ensure that 30% of all
inputs used by Natura
Brazil, in terms of value,
come from the Amazon
region.
19.1% of the inputs
used by Natura Brazil
were sourced from the
Amazon region.
2010: 10%
2020: 30%
Achieved in
2016: 46%
At least 10% of
all Natura Brazil
packaging should
be made from post-
consumer recycled
material.
A total of 4.3% of all
packaging made
used post-consumer
recycled materials.
2013: 1.4%
2020: 10%
Achieved in
2016: 34%
Packaging
At least 74% of
all Natura Brazil
packaging should be
made from recyclable
material
In 2016, 51% of
all Natura Brazil
packaging used
recyclable material.
2013: 56%
2020: 74%
Achieved in
2016: -28%
Ensure that 40% of
Natura Brazil’s billed
units are eco-efficient
packaging¹
20% of the units billed
in Brazil were eco-
efficient packaging¹
2013: 21.4%
2020: 40%
Achieved in
2016: -8%
12. Responsible
Consumption
and Production
3. Good Health
and Well-Being
12. Responsible
Consumption
and Production
12. Responsible
Consumption
and Production
11. Sustainable
Cities and
Communities
12. Responsible
Consumption
and Production
11. Sustainable
Cities and
Communities
99
2016 ANNUAL REPORT
2050 Sustainability Vision
Brands and Products
The Natura brand
must reduce its
relative emissions of
greenhouse gases by
33% (Scope 1, 2 and 3).
Continue offsetting
all emissions that
cannot be avoided, by
means of initiatives
that, in addition to
the reduction and/
or sequestration of
greenhouse gases, also
aim at providing social
and environmental
benefits, especially in
the Amazon region.
Implement a strategy
for the diversification
of renewable energy
sources used by Natura
Brazil’s operations.
Reach out to 10,000
families that are part of
the Amazon production
chains.
The indicator is directly
related to business
performance and the
forecast was for an increase
in relative GHG emissions.
However, they remained
stable, due to efficiency
gains in key processes. The
reduction in relation to 2012
is 1.3%.
Since the program was
started 10 years ago, we
have made five calls for
tenders for the purchase
of credits and engaged
35 initiatives. Over 40% of
projects supported come
from the Legal Amazon
and Pan-Amazon Basin
regions. In 2016, we included
projects in Mexico and Chile,
thereby achieving the goal
of offsetting emissions locally
in all countries where we
operate.
We have mapped out 11
opportunities to diversify
our renewable energy
sources and have already
begun implementing some
of those options.
We have boosted
development and
generated income for 2,119
families in the Amazon
region, affecting the quality
of life of around 8,000
people and contributing to
the conservation of 257,000
hectares of standing forest.
Turnover of R$ 1 billion
in volume of business in
the Amazon region.
The accumulated volume of
business generated in the
region amounts to R$ 972
million.
2012: base
year
2020: -33%
Achieved in
2016: 4%
13. Climate
Action
17. Partnerships
for the Goals
In progress
13. Climate
Action
Under imple-
mentation
13. Climate
Action
2010: 1,734
2020: 10,000
Achieved in
2016: 5%
15. Life On Land
1. No Poverty
10. Reduced
Inequalities
2010: R$ 89
million
2020: R$ 1
billion
Achieved in
2016: 97%
12. Responsible
Consumption
and Production
17. Partnerships
for the Goals
Climate
change
Energy
Socio-
biodiversity
100
2016 ANNUAL REPORT 2050 Sustainability Vision
Brands and Products
In 2016, we concluded
the experimental pilot
program introduced
the year before to
promote reverse
logistics in the São
Paulo metropolitan
area. This included
different sources
for collecting post-
consumption waste,
such as collector
cooperatives and
the involvement of
Natura Consultants.
The experiment was
useful for gaining
knowledge and
planning our strategy,
procedures and
action. Additionally,
we participated in
the sectorial reverse
logistics project
organized by Abihpec.
Using the created
methodology, we
began conducting
studies to map
projects that have the
potential to reduce
our water footprint.
In progress
12. Responsible
Consumption
and Production
11. Sustainable
Cities and
Communities
Planning
phase
6. Clean Water
and Sanitation
Having identified 100%
of the manufacturers
in the first link of the
chain, we are working
to extend the overall
traceability of critical
chains.
Planning
phase
8. Decent Work
and Economic
Growth
12. Responsible
Consumption
and Production
13. Climate
Action
Waste
Water
Supply chains
Collect and send for
recycling 50% of the
waste generated
by Natura product
packaging in Brazil (ton
equivalent).
For the Natura brand
in Brazil: implement
a strategy for the
reduction and
neutralization of
impact, based on
the water footprint
measurement and
considering the entire
value chain.
Ensure by 2015 that
100% of materials
produced by direct
manufacturers are
traceable (last link) and
by 2020 implement a
traceability program
for the other links of the
Natura brand’s value
chain.
101
2016 ANNUAL REPORT 2050 Sustainability Vision
Customers
Define priority topics
and implement a
strategy to mobilize
Natura brand
consumers.
Significantly increase
the real average income
of Natura Consultants
in Brazil.
Generate interest in
continued education
and offer a broad range
of educational options
that meet their needs.
Our Network
Definition of priority claims
for boosting consumer’s
perception of Natura as a
sustainable brand:
• Living Forest
• 100% Organic Alcohol
• Commitment to Climate
change
• Sustainable Packaging
• Smart Refills
• Quality Education
• No Animal Testing
• Beauty free of stereotyping
A program to boost direct
selling, including steps aimed
at increasing productivity and
income according to type of
consultant.
We have developed an
educational program for NCs
and their families, offering
partial and full scholarships
for learning experiences such
as: ENEM exam preparatory
courses, vocational training,
higher education programs,
and languages courses, among
others. Within three months,
over 11,000 people had gone
back to school.
In progress
12. Responsible
Consumption
and Production
In progress
5. Gender Equality
8. Decent Work
and Economic
Growth
In progress
4. Quality
Education
Natura
Consultants
Create an indicator
to evaluate the
human development
of this group and
define a strategy to
obtain significant
improvements.
In three years of tracking the
HDI-NC in Brazil, we have
recorded an improvement
of 7.81%, with 0.5% in 2016
alone. This indicator monitors
Natura’s impact on the quality
of life of its consultants.
In progress
5. Gender Equality
8. Decent Work
and Economic
Growth
4. Quality Edu-
cation
Expand the
collaboration network,
supporting social
and environmental
entrepreneurship
activities.
The Natura Movement is a
digital platform that connects
those who have social and
environmental projects with
those who want to help. During
2016, the site had close to 2.2
million visits, nearly double that of
the previous year. It is estimated
that more than 50,000 people
were benefited by supported
projects in the fields of health,
education, culture and sport,
among others.
In progress
8. Decent Work
and Economic
Growth
102
2016 ANNUAL REPORT 2050 Sustainability Vision
For the Natura
brand, have women
occupying 50% of
senior management
positions (senior
management and
above).
Employees
For the Natura brand
in Brazil, to have
people with disabilities
representing 8% of total
employees.
Implement a strategy
to boost employees’
potential through
engagement with
Natura’s culture.
Our Network
Throughout the year, we
achieved a rate of 29%
of senior management
positions being occupied
by women. Natura signed
up to the UN Women’s
Empowerment Principles
and the Brazilian
government’s Gender and
Racial Equality Program.
We also launched our
own diversity policy in
2016, which gives priority
to four areas, including
women’s empowerment.
Moreover, we reviewed our
procedures for selecting,
attracting and developing
women with leadership
potential.
People with disabilities
represent 5.8% of the total
number of employees at
Natura. In our diversity
policy, launched in 2016,
this group was defined as
one of our four priorities. In
a pioneering move, our São
Paulo distribution center
has been highly automated
and 16% of its employees
are people with some
kind of disability, mainly
cognitive.
Based on Natura’s Mission,
which was revised in 2015,
we have begun a process
of cultural transformation
that includes the alignment
of all Natura practices
and procedures. This work
will be intensified in 2017.
The implementation of the
Volunteer program, in 2016,
is one of the actions that
reinforce our commitment
to create a positive impact
by encouraging citizenship
among our employees and
motivating them to play a
leading role in society.
2013: 29%
2020: 50%
Achieved in
2016: 0%
5. Gender Equality
2013: 4.3%
2020: 8%
Achieved in
2016: 5.8%
8. Decent Work
and Economic
Growth
Under imple-
mentation
12. Responsible
Consumption and
Production
16. Peace, Justice
and Strong
Institutions
103
2016 ANNUAL REPORT 2050 Sustainability Vision
Our Network
We have put together
Local Development Plans
for Cajamar, Jaguara and
Benevides. The groups
involved conducted
participatory analyses,
identified development
priorities and agreed upon
initiatives and targets.
We also applied the
Community Social Progress
Index in Cajamar and
Jaguara, as an instrument
for the diagnosis and
measurement of the
positive and negative
social and environmental
impacts of implemented
activities.
In order to spur large-scale
transformation, we work
through arrangements
and partnerships with
local government,
grassroots communities
and companies to create
territorial development
solutions in the Mid-
Juruá (Amazonas state),
Lower Tocantins and
Transamazon (both
Pará state) regions.
Together with local
leaders and partners, we
seek to understand the
development priorities of
each territory and agree
upon shared initiatives and
targets. Local leadership
and institutions are
empowered throughout
the entire process.
The evaluation criteria for
social and environmental
performance, applicable to
all Qlicar Program supplier
categories, have been
defined.
Local
communities
Improve the indicators
for measuring the
human and social
development of local
communities and
develop a plan for
making significant
improvements.
Develop a strategy for
territories important
to socio-biodiversity
in the Amazon region
and to the communities
surrounding our main
operations in Brazil,
through open dialogue
and collaborative
engagement with
local populations and
stakeholders.
Suppliers
Improve the process
of supplier selection
and management,
while furthering
the integration
between social
and environmental
parameters with
financial ones.
In progress
8. Decent Work
and Economic
Growth
10. Reduced
Inequalities
In progress
8. Decent Work
and Economic
Growth
10. Reduced
Inequalities
In progress
12. Responsible
Consumption
and Production
8. Decent Work
and Economic
Growth
104
2016 ANNUAL REPORT 2050 Sustainability Vision
Management and Organization
Management
model
For the Natura brand,
conduct an appraisal
of external social and
environmental factors,
taking into consideration
the positive and
negative impacts of the
extended value chain
(from extraction of raw
materials to disposal of
products).
Government
and society
Stimulate a discussion
and public debate on
material topics, based
on the review of the
materiality matrix
conducted in 2014.
Engagement
with stake-
holders
Ethics and
transparency
Sustainabili-
ty governan-
ce
Institutionalize a
governance model
featuring external
engagement to
improve sustainability
management and
strategy.
For the Natura brand,
implement total
transparency for
providing information
on products and
the progress of the
Sustainability Vision.
Set up an Advisory
Committee, composed
of outside specialists,
who will assess the
company’s progress
and help improve our
strategy.
An appraisal of external
environmental factors was
carried out for the first time in
2015, converting the effects of the
business on aspects such as GHG
emissions, water, waste and land
use and occupation into financial
resources. The calculation
involved the entire Natura
product portfolio, throughout its
entire value chain. In 2016, we will
conduct the first ever appraisal
study of social impacts.
We have actively participated
in several forums and coalitions,
where we offered our experience
to enrich the discussion of the
topics in our materiality matrix.
One of the important forums
addressed the relationship
between our business initiatives
and the Sustainable Development
Goals set under the United
Nations Development Program, in
September 2015.
We are in the process
of identifying innovative
collaborative arrangements
with partners that are
capable of positively changing
the environment for the
implementation and development
of our Sustainability Vision.
We have collaboratively
developed the architecture of our
sustainability communications,
which organize product
information according to the
interests of our consumers when
they are looking for more detailed
information.
Strategic alignment with the Na-
tura Board of Directors to set up
an advisory network to support
the generation of creative and
innovative solutions and introdu-
ce guidelines for developing the
company’s strategy.
Under
implementation
12. Respon-
sible
Consumption
and
Production
Under
implementation
17. Partner-
ships for the
Goals
Planning phase
Under
implementation
Planning phase
12. Respon-
sible
Consumption
and
Production
12. Respon-
sible
Consumption
and
Production
12. Respon-
sible Con-
sumption
and Produc-
tion
105
2016 ANNUAL REPORT Appendices
SUPPLEMENTARY INDICATORS
Economic and financial
management
Economic Performance
103-2/103-3
201-2- Financial implications and other risks and opportunities arising from climate change
At Natura, we do not conduct specific analyses regarding
the effects related to climate change in our risk management
process. However, important mitigation projects focusing
on the impacts that the business may generate are now
organized transversely and have become formal sub-
processes at the company. Examples of this are the Carbon
Neutral Program and the practices for the sustainable use
of socio-biodiversity and related traditional knowledge.
Actions to offset CO2 emissions (Carbon Neutral Program)
is voluntary at Natura, not mandatory, and do not portray
the financial implications of climate change risks.
Currently, biodiversity is one of the main topics in the social
and environmental group that draws up the compendium
of company risks. In the second half of 2016, we began
a project to map out the risks presented by three other
topics: social responsibility, waste and climate change.
Once the mapping has been concluded, we will create a
matrix that considers all four risks related to sustainability.
As far as the climate change risk goes, our focus is to
understand, monitor and mitigate anything that can affect
our value chain.
Read more about our risk management procedures on
page 34.
201-4 – Government funding1 (R$ million)
2014
2015
2016
Tax incentives for support and sponsorship2
Innovation Law nº 11,196/2005 (deduction from income tax
and social contribution bases of up to double the spending on
Research and Technological Innovation)
Others3
Total
8
30
2
40
3
14
1
18
4
18
3
25
1. The government does not have a stake in the company’s shareholding structure. 2. Corporate income tax (IRPJ) incentives related to the Rouanet and
Sports laws, the Fund for the Rights of Children and Adolescents, the worker’s nutrition program and ICMS tax incentives in relation to Natura Musical
projects. 3. Incentives relating to the two-month extension of maternity leave, introduced under Decree nº 7,052/2009. The expense is not deductible from
the taxable income and social contribution (CSLL) calculation bases, but is fully deductible from the IRPJ.
107
2016 ANNUAL REPORT Personnel Management
Employee Profile
102-8
Number of Natura Employees
Brazil
Argentina
Chile
Mexico
Peru
Colombia
France
Total
2014
2015
2016
Fem.
Male
Total
Fem. Male
Total
Fem. Male
Total
3,091
2,141
5,232 2,988 2,163
5,151
2,842 2,065 4,907
431
77
508
465
85
550
508
89
597
145
75
213
37
46
22
182
121
141
70
44
185
139
47
117
75
235
202
28
230
199
227
40
267
272
50
322
287
34
12
46
28
8
36
11
46
49
28
52
7
185
124
227
339
18
4,216
2,375
6,591
4,166
2,425
6,591
4,061 2,336 6,397
102-8
Other types of contract
2014
2015
2016
Fem. Male
Total
Fem. Male
Total
Fem. Male
Total
Apprentices1
Interns2
70
124
47
48
117
108
49
157
106
172
84
31
115
61
47
29
153
90
Temporary staff3
325
548
873
118
1,025
1,143
26
473
499
In-house service providers4
771
1,065
1,836
721
1,444
2,165
642
1,582 2,224
Total
1,290
1,708
2,998
1,031
2,549 3,580
835
2,131
2,966
1. Young Apprentices are hired by a third-party company that manages them. 2. The difference between the number of interns reported (90) and the
program headcount (168) is due to contracts terminating in the month of December 2016. 3. Fixed-term contracts through an employment agency and
involving subordination are regarded as temporary under the Labor Law (CLT). This number covers Natura Brazil temporary staff. The number of temporary
staff has fallen, as a result of the company’s own decision to reduce the number of people on such contracts. A policy was drawn up specifying the conditions
for such contracts. Moreover, in previous years, there was a greater need for this type of employee, due to the move of the Cajamar Distribution Center to
São Paulo. 4. In-house service providers are those suppliers that provide services to Natura and who work at or access the company’s installations for a
period of more than 6 months, and may or may not have a fixed workstation at the company. This number covers the service providers allocated to Natura
Brazil operations.
108
2016 ANNUAL REPORT Training and Education
404-1 Average -hours of
training (hrs/employee)\
p.a.- Brazil123
2014
2015
2016
Total
Fem.
Male
Total
Fem.
Male
Total
Fem.
Male
Operational
109
Administrative
Management
Senior management
Average hours
Young apprentice4
Interns4
61
31
15
78
-
-
101
54
34
21
66
-
-
115
82
27
12
95
-
-
73
33
24
12
49
34
74
68
26
26
19
38
34
74
76
55
21
9
64
34
74
32
28
41
30
31
24
25
42
29
26
41.5
40.8
37
39
41
31
38
43
53.8
52.8
58.8
1. Does not include employees on unpaid leave without payroll expenses or those of the Natura Institute. 2. Natura does not divulge its education budget and
strategy to third parties. 3. Training hours refer to training given in 2016 but may also include training provided in previous years and only entered into the
log in 2016. 4. Natura invests in Development Programs for Interns and Young Apprentices, including behavioral and technical training, aimed at developing
and preparing youths to perform their activities, but due to a concept revision, these hours will not be included in the overall average.
Average - hours of training, per employee (hrs)
2014
2015
2016
International Operations
Natura1
76
77
61
51
59
38
1. Consolidated average of all Natura Brazil operations and International Operations.
404-1 - Hours of training, by gender – Brazil (%)¹
2014
2015
2016
Male
Female
49
50
55
45
52
48
1. There is no gender-specific training strategy. But we did approve an executive coaching initiative, in 2016, that takes women’s issues into consideration
throughout the process, if that is of interest to the employee.
404-2 - Programs for skills management and ongoing
education: Natura Education program - Brazil112
2014
2015
2016
Scholarships granted
Scholarships granted as a proportion of total
applications (%)3
Amount invested in the Natura Education program
(R$ thousand)
322
58
1,178
214
65
955
132
0
535
1. All employees with active scholarships during the year are considered as having participated in the program 2. In the event of termination resulting from internal
restructuring, Natura supports these employees in their career transition by offering a set of special conditions. 3. The Natura Education program is being reviewed
and will be relaunched in the first half of 2017, with new scholarships. Employees who are already participating in the program have had their scholarships renewed.
109
2016 ANNUAL REPORT 404-2 Courses taken by employees or their family
members that were fully or partially paid for by
Natura (Brazil)
2014
2015
2016
Technical/vocational
Languages
University
MBA or post-graduate
Total number of courses
Remuneration
33
1
175
113
322
21
0
105
88
214
8
0
70
54
132
202-1 – Ratio between the organization’s lowest pay grade and the local minimum wage, by gender (%)1
Country
Brazil
Argentina
Chile
Peru
Mexico
Colombia
France
2014
2015
2016
Total
Male
Fem.
Total
Male
Fem.
Total
Male
Fem.
1.5
1.5
1.9
3.1
5.7
1.0
1.2
1.5
3.1
2.4
3.9
6.5
1.0
1.8
1.5
1.5
1.9
3.1
5.7
1.0
1.2
1.4
1.6
1.9
3.3
5.9
1.0
1.1
1.4
3.1
2.4
4.8
7.4
1.0
1.8
1.4
1.6
1.9
3.3
5.9
1.0
1.1
1.6
1.5
1.9
2.7
6.5
1.0
1.1
1.6
3.0
4.0
4.7
7.8
1.0
1.3
1.6
1.5
1.9
2.7
6.5
1.0
1.0
1. Our pay levels take into account competitive remuneration packages offered in each local market. Small differences are due to the absence of both
genders in the same position in that country or to an employee having recently joined the company at the lowest level of the pay range for that position.
There are no gender-based pay differences.
102-38 - Ratio between the organization’s highest pay grade and the overall average, by country
Reassessment of the information for 2016 prevented the reporting of this item, due to information confidentiality.
110
2016 ANNUAL REPORT 102-39 - Ratio between pay rise for the highest pay grade and the organization’s average pay rise, by
country¹
Country
Unit
Overall
average
Highest
pay grade
Overall
average
Highest
pay grade
Overall
average
Highest
pay grade
Brazil
Argentina
Chile
Colombia
Mexico
Peru
2014
2015
2016
11.00
0.66
13.56
1.21
10.85
11.00
35.00
36.00
36.00
30.00
42.00
32.00
%
18.00
3.00
13.00
6.00
5.00
2.00
4.00
9.00
11.00
6.00
6.00
6.00
2.00
10.00
2.00
0.00
8.00
11.00
5.00
9.00
7.00
4.00
12.00
0.00
1. Considering the basis salary.
103-2/103-3
201-3 – Pension plan (R$ million)¹ 2
2014
4,087
2015
4,642
20163
3,753
1. Natura Savings Incentive is a defined contribution plan managed by an Open Plan Supplementary Pension entity. The guarantee of coverage or annuity
with actuarial risk is not mandatory for the company. Employees’ participation is voluntary and, currently, 42% of employees participate in the program. 2.
An employee can contribute anywhere from 1% to 5% of their salary, while the employer’s contribution is 60% on top of the employee’s contribution, up to
a salary level of R$ 19,140.00. 3. The decrease in the amount invested is due to the reduction in the number of employees, who withdrew their savings upon
termination, as well as lower number of employees joining the plan (participation is on a strictly voluntary basis).
Staff Turnover
401-1 - Total number and rate of new hirings and employee turnover
Total and rate of new hirings. by age group1 2
2014
Age group
Number – by gender Rate - by gender (%)
Overall
number
Overall
rate (%)
Under 30
30 to 50
Over 50
Male
Fem.
Male
Fem.
214
182
2
267
362
7
3.2%
4.1%
2.8%
5.5%
0.0%
0.1%
481
544
9
7.3%
8.3%
0.1%
Total. by gender
398
636
6.0%
9.6%
1.034
15.7%
111
2016 ANNUAL REPORT
Total and rate of new hirings. by age group1 2
2015
Age group
Number – by gender Rate - by gender (%)
Under 30
30 to 50
Over 50
Male
Fem.
Male
Fem.
201
189
3
229
289
3.0%
3.5%
2.9%
4.4%
6
0.0%
0.1%
Total. by gender
393
524
6.0%
8.0%
Overall
number
Overall
rate (%)
430
478
9
917
6.5%
7.3%
0.1%
13.9%
Total and rate of new hirings. by age group1 2
2016
Age group
Number – by gender Rate - by gender (%)
Male
Fem.
Male
Fem.
Under 30
30 to 50
Over 50
137
167
3
224
267
7
Total. by gender
307
498
4.8%
Overall
number
Overall
rate (%)
361
434
10
5.6%
6.8%
0.2%
805
12.6%
2.1%
3.5%
2.6%
4.2%
0.0%
0.1%
7.8%
Total and rate of new hirings.
by gender12
2014
2015
2016
Female
Male
Total
Total
Rate (%)
Total
Rate (%)
Total
Rate (%)
636
398
1,034
9.6
6.0
15.7
524
393
917
8.0
6.0
498
7.8%
307
4.8%
13.9
805
12.6%
1. Meaning of turnover: number of terminations, whether this decision is made by the company (with or without just cause) or the employee, and includes
the hiring of a replacement. Calculation method: terminations with a request for replacement / effective company headcount. 2. For the number and rate of
terminations at IOs, interns are included. In Brazil, interns and Natura Institute employees are not included.
112
2016 ANNUAL REPORT Total and rate of new hirings. by
region
2014
2015
2016
Total
Rate (%)
Total
Rate (%)
Total
Rate (%)
Brazil
Argentina
Chile
Mexico
Peru
France
Colombia
Total
719
10.9%
602
9.1%
1.8%
109
1.7%
121
23
19
41
5
106
0.3%
0.3%
0.6%
0.1%
1.6%
28
32
34
6
106
917
0.4%
0.5%
0.5%
0.1%
1.6%
511
122
34
34
34
4
66
8.0%
1.9%
0.5%
0.5%
0.5%
0.1%
1.0%
1,034
15.7%
13.9%
805
12.6%
Number of terminations. by country
2014
2015
2016
Brazil
Argentina
Chile
Mexico
Peru
France
Colombia
Total
Total
Rate (%)
Total
Rate (%)
Total
Rate (%)
755
11.5%
719
10.9%
765
12.0%
88
39
26
64
11
65
1.3%
0.6%
0.4%
1.0%
0.2%
1.0%
74
27
36
39
16
53
1.1%
0.4%
0.5%
0.6%
0.2%
0.8%
84
34
29
38
22
50
1.3%
0.5%
0.5%
0.6%
0.3%
0.8%
1,048
16%
964
14.6%
1,022
16.0%
113
2016 ANNUAL REPORT Number of terminations, by age
group
2014
2015
2016
Male
Fem.
Male
Fem.
Male
Fem.
Under 25
25 to 35
35 to 50
Over 50
30
100
235
13
40
146
421
63
28
71
245
15
18
143
401
43
27
187
176
19
Total, by gender
378
670
359
605
409
Total
1,048
964
1,022
15
247
276
75
613
2014
2015
2016
Turnover Brazil, by gender¹ (%)
Male
Fem.
Male
Fem.
Male
Fem.
11
9
9
8
13
9
Turnover. by age group - Brazil (%)¹
2014
2015
2016
Under 18
18 to 25
26 to 30
31 to 40
41 to 50
Over 50
0.0
12.0
9.0
10.1
9.3
9.1
0.0
12.1
8.8
8.5
9.0
7.4
0.0
13.1
11.9
10.2
10.3
10.5
1. Meaning of turnover: number of terminations, whether this decision is made by the company (with or without just cause) or the employee, and includes
the hiring of a replacement. Calculation method: terminations with a request for replacement / effective company headcount. 2. For the number and rate of
terminations at IOs, interns are included. In Brazil, interns and Natura Institute employees are not included.
114
2016 ANNUAL REPORT Turnover rate. by country (%)12
Brazil
Argentina
Chile
Mexico
Peru
France
Colombia
Total
2014
9.79
8.30
8.80
18.67
7.27
6.47
16.28
10.25
2015
8.83
11.69
10.78
20.94
10.31
5.16
13.12
9.57
2016
10.75
11.64
14.54
20.75
15.58
15.50
13.94
11.46
1. Meaning of turnover: number of terminations, whether this decision is made by the company (with or without just cause) or the employee, and includes
the hiring of a replacement. Calculation method: terminations with a request for replacement / effective company headcount. 2. For the number and rate of
terminations at IOs, interns are included. In Brazil, interns and Natura Institute employees are not included.
Vacancies filled with company employees (%)
2014
2015
2016
Brazil
International Operations
Total
62
55
60
57
42
54
61
47
57
Senior management vacancies filled by company
employees12 (%)
2014
2015
2016
Brazil
International Operations
Total
70
66
61
72
51
67
73
49
65
1. According to the strategy for the recognition and development of company employees, the number of vacancies filled internally was considered one of
the goals of the Personnel Management department. Moreover, some of the departments that had previously demanded intensive external hiring for the
acquisition of skills did not do so in 2016. 2. Considers Pay Grade 16 and above.
115
2016 ANNUAL REPORT Diversity
405-2 Pay profile – Average monthly pay in Brazil
Operations (R$)1 2 3 4 5 6
2014
2015
2016
Women - Total
Production
Administrative
Management
6,756
1,687
7,448
15,926
7,462
1,823
8,256
16,998
Senior Management
45,643
46,655
Men - Total
Production
Administrative
Management
Senior Management
Over 45 years old
Production
Administrative
Management
Senior Management
Up to 45 years old
Production
Administrative
Management
5,687
2,211
6,563
17,136
5,899
2,381
6,880
17,631
54,569
54,843
9,156
2,355
9,843
20,411
62,791
5,836
1,942
6,743
15,876
9,590
2,555
11,061
21,356
61,112
6,340
2,096
7,371
16,721
7,613
2,026
8,217
18,244
48,758
6,210
2,600
7,451
18,512
53,911
9,395
2,777
10,690
22,558
55,214
6,594
2,309
7,581
17,785
Senior Management
43,953
46,055
49,146
1. In 2016, collective bargaining agreements yielded a 9% increase for employees in the operational and administrative areas. The management area received
a fixed-amount increment that was incorporated within their basis pay. There were also spontaneous increases and promotion and merit programs, as well
as hirings, terminations and transfers, which affected the amounts reported. 2. The calculation does not include the payment of short-term incentives
(Profit Sharing). 3. Included the premiums paid to sales managers and relationship managers, plus the WRB (Weekly Remunerated Break). 4. Sales Force
employees, when distributed across their categories, with the exception of production posts, reinforce women’s average pay, because of the sales premium.
5. For this indicator, we used the most representative operating units of Brazil. 6. Variations between Female and Male pay levels are exclusively due to
remuneration distribution according to Natura’s structure. An individual comparison of pay grade shows that there are no significant differences between
the pay of men and women.
116
2016 ANNUAL REPORT 401-3 – Rates of return to work following maternity/
paternity leave and retention, by gender1
2014
2015
2016
Employees who were entitled to take
maternity / paternity leave
Men
Women
Total
Men
Employees who took maternity / paternity
leave during this period
Women
Total
Men2
Employees who returned to work after
their maternity / paternity leave ended
Women
Employees who returned from maternity
/ paternity leave and were still employed
by the company 12 months after their
return
Rate of retention of employees who re-
turned to work after their leave ended
Total
Men
Women
Total
Men
Women
Total
2,141
3,091
5,232
56
157
213
55
160
215
53
137
190
85%
77%
79%
2,163
2,988
5,151
77
158
235
76
145
221
49
126
175
89%
79%
81%
2,065
2,842
4,907
87
139
226
88
151
239
71
107
178
93%
74%
81%
1. Calculation of the retention rate of employees who returned to work after their leave ended is based on the total number that stayed on for more than one
year, divided by the total number of individuals who were on leave in the previous year. 2. The 2015 result was corrected from 77 to 76, because one paternity
leave began in 2015 and ended in 2016.
Health and Safety
403-2 – Rates of injuries,
occupational illnesses and days
lost1
2014
2015
Absenteeism rate
3.33
2.64
1. Refers only to Natura’s own employees.
2016
Fem.
3.02
Male
1.81
Total
2.34
117
2016 ANNUAL REPORT 403-2 –Injuries and
days lost as a result of
work – Brazil1
2014
2015
2016
Employees
In-house
service
providers2
Employees
Employees
In-house
service
providers2
Occupational illness fre-
quency rate (%)
Days lost – accidents34
0
186
0
134
Rate of days lost – accidents
17.04
23.74
Injury rates (accidents with
or without time off )5
Fatalities
1.83
0
5.67
0
0.2
212
19.81
1.212
0
In-house
service
providers2
0
329
0.1
161
38.23
15.36
4.42
0
1.43
0
0
150
14.9
2.68
0
1. Considers the accidents involving employees registered at the units of Cajamar and Lapa, distribution centers, Itupeva hub, Nasp and Ecoparque. Minor
injuries that only required first aid were not included. 2. Includes our service providers allocated at the units of Cajamar and Lapa, distribution centers,
Itupeva hub, Ecoparque and Nasp. 3. A day lost is when the employee does not return to his or her job until the next work day after the incident, and includes
all subsequent days starting from that date. 4. Total hours scheduled: 8 hours/day x number of business days in the period. 5. Equivalent to the number of
accidents with or without time off work, per million person-hours worked.
Investments in health and safety
Prevention of accidents, per employee (R$)1
Prevention of illness (R$)2
2014
1,200
2,905
2015
1,068
2,661
2016
1,407
2,848
1. Training expenses are not included. 2. With regard to investments in disease prevention, at the end of 2016, Natura launched the Viva sua Saúde (Live your
Health) program, which takes an integrated approach to life and physical, emotional, financial and social health. The existing programs were distributed
among these pillars, in order to make them relevant and unify the language and communication channels used. Existing programs for chronic illnesses,
counseling, pre-natal care, vaccination campaigns, ergonomics and the program that organized the presence of medical professionals on site (physical
therapy, psychology, orthopedics and gynecology) were kept on.
403-3- Employees with high incidence or high risk of diseases related to their occupation
There are no workers involved in jobs with a high risk of
catching any sort disease, since there is no manipulation of
any type of raw material that could explain the incidence of
diseases contracted due to a particular job.
Employees diagnosed with an occupational illness receive
support, such as transportation and medication assis-
tance, so they can receive treatment. There are a variety of
specialists in our internal infirmaries, located at the com-
pany’s main units, to ensure treatment and close monitor-
ing of employees. We also provide a Professional Support
Program, through which it is possible to obtain psycholog-
ical, legal and social guidance.
In 2016, the health area focused on the analysis and mon-
itoring of employees with occupational illnesses and was
able to considerably reduce the percentage of employees
who need to go on leave due to this type of afliction.
118
2016 ANNUAL REPORT Benefitis
401-2 – Comparison between benefits of full-time and temporary employees
Stakeholder
group
All employees
in Brazil
Operations
Benefit
Description
Ergonomics program
Seeks to make every worker comfortable and productive in his or
her workstation and well-adjusted to their working conditions,
making changes if needed.
Social service
Espacio de discusión, comprensión y resolución de las
cuestiones de orden social de los colaboradores.
Calisthenics program
Promotes quality of life and health in the work environment and
helps reduce stress-related illnesses.
Chronic illness
management
program
Discounts on product
purchases
Viva Saúde program
Program for Women
For employees and family members of those with chronic illnesses.
A 40% discount in up to five Natura products per month.
Aimed at all employees, with the goal of stimulating a reflection
on quality of life and the importance of prevention and
promoting good health.
Regular pre-natal check-ups by a dedicated medical team,
medical insurance upgrade and postpartum psychological
monitoring.
Child care and
special help subsidies
Hosting of meet-ups for pregnant women and their partners
and/or other family members or friends.
Life insurance
To cover education costs of children with disabilities.
Transport
Vehicles and a fuel allowance for employees at senior
management level and above.
Parking
Available at Cajamar, Nasp and Alphaville.
Drugstore discount
program
Medicine discounts for all employees with payment deducted
directly from their salary.
Free chartered
transport
Runners project
140 bus lines chartered at no cost to employees.
Training for running races and walks in local parks (Villa-Lobos,
Ibirapuera, Alphaville e Cajamar), run by professionals.
Sale of school mate-
rials
With discounts and installments deductible from employee’s
salary.
Natura Club
Fitness training, swimming pool (extended to family members,
including on weekends), dancing classes, football tournaments
and multi-sports court (Cajamar).
Well-being center
Massages, hairdressing, waxing and manicures, at special
prices.
Services and conve-
niences
Seamstress services, laundry, shoe repair, optician, insurance
company, post office and book rental store and video store
(Cajamar).
Partnerships
Discounts and/or perks for employees (gym, home appliances,
travel agency, panetones - traditional Milanese fruit cake usually
consumed during Christmas time, - movie theaters and theme
parks).
119
2016 ANNUAL REPORT Stakeholder
group
All employees
in Brazil
Operations
Benefit
Description
Presents
Presents for employees’ mothers and fathers and toys at
Christmas for their children.
Recognition of length
of employment
Employees get a party and a present when they have been
working for Natura for five years, and then again every five years
after that.
Natura Education
Scholarships for employees and family members (the program is
being revised in 2017).
Nursery
Fully subsidized for children up to the age of 2 years and 11
months.
Adoption
Support offered during adoption processes.
Medical and dental
plans
Medical plan, with no fixed cost for the employee, and a dental
plan. We also offer check-ups for employees from management
level up.
Partial
reimbursement of
the cost of medicines
For treating cardiovascular diseases, diabetes, kidney failure,
cancer, liver diseases, neurological disorders, work-related
musculoskeletal disorders and psychiatric disorders.
Telemedicine
Eletrocardiogram by phone, in emergency cases.
Health on the move
Program that encourages physical activity, including nutritional,
and medical check-up and orientation, as well as advice from a
personal trainer.
Gym subsidy
For relationship managers and sales managers.
Free products
Christmas food
vouchers
Health center
Five free products per month for management level employees
and directors.
To all employees.
Emergency medical assistance, physical therapy, RPG, OB/GYN,
acupuncture, orthopedics, nutrition and psychology.
Personal support
program
Offers personal assistance in the areas of finance, psychology
and law, among others.
Restaurants on
site at Cajamar,
Ecoparque, Nasp
and the Itupeva hub
Tempo de Casa and
Momento Família
events
Each restaurant caters to the employees of that site and from
other locations that are there on business, as well as service
providers whose contract states that food services are Natura’s
responsibility.
Tempo de Casa (Length of Employment) and Momento Família
(Family Time) events are held in Cajamar.
End of the year
company party
Combined end of the year celebration for employees of the
operational and administrative categories.
120
2016 ANNUAL REPORT
Labor Relations
402-1 – Minimum notification period for operational changes
There is no minimum period for the notification of operational changes in the collective agreements, but Natura meets
the minimum deadlines specified in the current legislation and/or agreed with trade union.
103-2 Channels for airing grievances and lodging complaints related to labor practices
Brazil Operations1
Registered
Forwarded
Resolved3
2015
20162
348
297
271
348
297
271
348
297
271
1. Includes complaints by employees and in-house service providers about benefits, overtime, working hours, medical and dental care, and education and
training activities, among other personnel management issues. 2. There was a 9% decline in the volume of complaints regarding labor practices, a figure
that is still smaller than the general decline seen in the number of complaints lodged by internal stakeholders (14%). 3. The indicator makes no mention of the
nature of the complaints received and dealt with. Therefore, complaints that were not forwarded, for whatever reason, are considered to have been resolved.
121
2016 ANNUAL REPORT Ethics and human rights
Fighting Corruption
205-1 Units submitted to assessment of risks related to corruption
Natura is assisted by the Compliance, Internal Controls,
Risk Management, Ombudsman and Internal Audit areas
in the prevention of and fight against corruption. All com-
pany processes and areas are indirectly subjected to risk
assessment and mitigation. Natura currently has several
tools it uses for this purpose, such as the Code of Conduct,
which includes e-learning for all the employees in Brazil
and in International Operations; the Ombudsman chan-
nel, which guarantees safe, anonymous and confidential
reporting of any violation of the Natura Code of Conduct,
the activities of the Ethics Committee, the Policy of Integrity
against Bribery and Corruption, and specific codes of con-
duct for suppliers and the Natura sales force. Additionally,
we conduct regular audits regarding payments and a few
choice suppliers.
In 2016, the Internal Controls, Risks and Compliance areas
continued with the program designed to comply with the
Brazilian anticorruption law (Law no 12,846 / 2013) by means
of: (i) reviewing the mapping of all critical areas, resulting in
27 areas mapped out; (ii) testing of internal controls mapped
for the compliance program; and (iii) internal communica-
tions reinforcing the guidelines related to this subject.
205-2 -
Employees
trained in anti-
corruption
policies and
procedures
Senior
management
Management
Administrative
Operational
Total
2014
2015
20161
Informed
Trained
Informed
Trained
Informed
Trained
57
765
3,721
2,372
6,915
44
630
3621
2015
59
679
3,819
2,246
6,310
6,803
48
619
3,594
1,998
6,259
54
631
3,584
2,101
51
614
3,393
1,928
6,687
6,683
1. Total number of training sessions held in 2016 on the Code of Conduct with employees from Brazil operations and International Operations and the
proportion of the headcount base at the end of December 2016. Indirect operational staff were added to the administrative staff. Of the 6% of the headcount
who did not attend Code of Conduct training, 55% were on leave and 36% work in International Operations, where there was considerable reinforcement of
the training and improvement opportunities were identified.
122
2016 ANNUAL REPORT 205-2 – Commercial partners informed about anti-
corruption procedures – Brazil1
Total number
of partners
% of partners
South
Southeast
Midwest
Northeast
North
Total
33
480
5
21
16
555
10%
13%
5%
7%
5%
12%
1. In 2016, we revised the Code of Conduct for suppliers in Brazil and in International Operations. This update was communicated to 555 suppliers in Brazil.
Natura made payments to 4,720 Brazilian suppliers in 2016, so the communication rate represents 12% in terms of supplier numbers, but in terms of purchase
volume it is equivalent to 83%.
Confirmed cases of corruption and actions taken
In 2016, six cases of fraud were confirmed, none of which
involved a public body. This number represents half the
figure for the previous year. The six cases resulted in disci-
plinary actions for five employees (termination).
As for commercial partners, there were no cases in which
contracts were rescinded or not renewed due to an inci-
dent of this nature. 205-3
102-43 / 102-44 Satisfaction with the Ombudsman
– Brazil1
2014
2015
2016
Employees (%)
83
83
82
1. Ratings from 7 to 10 are considered as being satisfied with this channel. The survey response rate was 50%. We are still evolving in terms of conducting the
survey in such a way that we have a more substantial rate of response in relation to the total volume of complaints.
Disciplinary actions
In 2016, our complaint and analysis channels confirmed six
cases of fraud that resulted in disciplinary actions being
taken against five employees, who were dismissed by Na-
tura. There were no cases involving a public body. 205-3
The dissemination of clear and specific codes of conduct for
each stakeholder group (employees, suppliers and the sales
forces in Brazil and in International Operations) provides
clarity on instances of non-compliance and, combined with
the reinforcement of the whistleblowing channel, strength-
ens the company’s conduct in ethical issues.
419-1– Percentage of employees trained in
anti-corruption procedures
Management
Non-management
2014
82%
92%
2015
90%
92%
2016
97%
94%
123
2016 ANNUAL REPORT Human Rights
410-1 – Percentage of security staff trained in policies or procedures related to human rights
Our security practices cover human rights training, in-
cluding legal training, as required by the Federal Police,
and internal training. All employees of the surveillance
area undergo the training required by the Federal Po-
lice. Additionally, they are trained in special activities, for
which we do not have figures for the year of 2016.
406-1 – Total number of incidents of discrimination and corrective actions taken
All lodged complaints are handled by the Ombudsman.
Natura has never received a complaint about proven
discrimination, but if one arises, appropriate action
will be taken. It should be noted that all complaints re-
garding possible ethical deviations, as is the case with
discrimination, are reported to the Ethics Committee,
which is composed of Natura’s senior managers, among
others.
103-2 – Number of grievances and complaints that
have been registered, processed and resolved1
2014
2015
2016
Employees and in-house service providers - Brazil
1,256
Employees and in-house service providers -
International Operations
Suppliers - Brazil
Supplier communities
Total
1. Complaints received by the Ombudsman.
5
13
0
1,274
910
17
29
0
956
771
15
48
0
834
Complaints dealt with by the Ombudsman
2014
2015
20164
Total of complaints forwarded
Total of complaints dealt with1
% complaints dealt with23
1,170
1,170
92
888
888
93
794
794
95
1. Complaints dealt with by the Ombudsman’s Office, together with the managers responsible for the process/ manager mentioned. 2. The survey considered
the ratio between complaints lodged and dealt with regarding Internal Stakeholders (731), International Operations (15) and Suppliers (48). 3. Of the 40
complaints that were not forwarded, 9 were filed at the request of the complainant themselves and 31 were filed because of insufficient information. 4. In
2016, 32% of all complaints were anonymous. Regarding their subjects, 74% were related to technical criticism and 26% dealt with behavioral issues. The
main subjects of complaints were related to issues regarding chartered transportation, VIP stores, health center and medical plan, food and electronic
punch card. During 2016, of all comments received, 64% were criticism, 10% complaints, 7% suggestions and 4% praise.
407-1 – Degree of application of the right of free association and operations and suppliers identified as
risky
Natura did not identify any operations or suppliers
where the right to exercise freedom of association and
collective bargaining may be violated. The Ombudsman
is available to suppliers in Brazil and in International Op-
erations. The Suppliers Code of Conduct was launched
in Brazil in 2014 and in 2015 for International Operations.
Both address the issue of freedom of association and
collective bargaining.
124
2016 ANNUAL REPORT 408-1/409-1 – Operations and suppliers at risk for occurrences of child labor and actions taken. Opera-
tions and suppliers identified at risk for situations of forced or slave labor and actions taken.
103-2/ 103-3
We performed an analysis of supplier communities in 2013,
and implemented specific action plans that addressed the
involvement of children and adolescents in biodiversity
production chains. The plans, which have all been conclud-
ed, involved dissemination of our positioning (Natura does
not tolerate forced or slave or child labor in its production
chains), discussion of the points raised in the analysis and
investment in the traceability of the inputs supplied.
Incident monitoring is now carried out by the Socio-Biodi-
versity Chain Verification System, which was implemented
in all supplier communities in 2016, together with the UEBT
(Union for Ethical BioTrade). This system has an indicator
that monitors the risk of occurrence of child labor, slave la-
bor or forced labor.
There was no verified occurrence of child labor, forced la-
bor or slave labor in the communities that supply Natura’s
biodiversity inputs. However, in some Amazon communities
that sell biodiversity inputs, there are signs that there are
children and adolescents working in its production chains,
albeit in a family environment – a cultural tradition in some
communities. This does not necessarily mean they are not
complying with Natura’s principles (i.e.: children who help
their parents, but attend school, are not not complying
with the principles of ethical biotrade).
The Socio-Biodiversity Chain Verification System is accred-
ited annually by external auditors.
Read more about our relationship with supplier commu-
nities, on page 55.
408-1/414-2 - Significant real and potential negative impacts on human rights in the supply chain and
actions taken. Operations and suppliers at risk for occurrences of child labor and actions taken
In 2016, 338 suppliers were submitted to an assessment
regarding their impact on environmental, social, labor and
human rights (child labor and forced or slave labor) issues.
Since Natura has a zero tolerance policy for child and forced
labor, there are no suppliers that present this risk and, there-
fore, no improvement agreements have been signed.
We also reviewed the Code of Conduct for suppliers in Bra-
zil and in International Operations in 2016, reinforcing our
position of full compliance with human rights requirements
and zero tolerance for child and forced labor.
411-1 - Total number of incidents of violations involving rights of indigenous peoples and actions taken
In 2016, there was no record of any incident involving indigenous peoples in any of the locations where the company operates.
Unfair Competition / Compliance
206-1/419-1 - Total number of lawsuits for unfair competition. Monetary value of significant fines and
total number of non-monetary sanctions
There was no record, in 2016, of any lawsuit related to un-
fair competition, trust or monopoly practices or significant
fines or non-monetary sanctions resulting from non-com-
pliance with laws and regulations.
Public Policy
415-1 – Policies on financial contributions made to political parties, politicians or institutions
The company has not made any kind of contribution to po-
litical parties and/or candidates running for public office,
in any of its operations, during or outwith elections since
2006
125
2016 ANNUAL REPORT 102-13 - Institutional Relations
In 2016, Natura became involved in public affairs through
trade associations dealing with issues related to sustain-
ability, such as the preparation of the regulation frame-
work for access to biodiversity, the industry agreement on
packaging and the national policy on solid waste. We were
also present during discussions on taxation.
The company’s institutional representation in 2016 was as
follows: Roberto Lima, then Natura’s CEO, was on the CEO
Council of the WFDSA (World Federation of Direct Selling
Associations), an organization that brings together 60 di-
rect selling associations from all over the world. In Brazil,
Moacir Salzstein, Natura’s Director of Corporate Gover-
nance, took over the vice-presidency of the ABEVD (Bra-
zilian Association of Direct Selling Companies). Moreover,
Natura has active representation on this association’s
committees, such as the Committee for Legal and Tax Af-
fairs; the Institutional Relations Committee; and the Re-
search Committee, among others. These actions reinforce
our belief that relationships and the direct selling model
are the core of our business.
Also in 2016, Marcelo Behar, the Director of Corporate Af-
fairs, served as vice-president of Abihpec (Brazilian Associ-
ation for the Personal Hygiene, Fragrances and Cosmetics
Industry), an association where we are also very active in its
working groups, especially in: Environment, Taxation and
Regulatory, in addition to the respective subgroups.
As part of our industry activities, we also participated in
Getap (Applied Taxation Studies Group) and the Fiscal
Studies Center (NEF) at the Getúlio Vargas Foundation. At
the CNI (National Confederation of Industry), we partici-
pate in environmental, tax and foreign trade forums.
Daniel Gonzaga, Director of Product Development, is on
the executive board of Anpei (National Association for Re-
search, Development and Engineering of Innovative Com-
panies).
Our co-founders also serve on the board of various asso-
ciations. Pedro Passos is a member of the board of Iedi (In-
stitute for Industrial Development Studies). Guilherme Leal
is a member of the B Team, a global group of leaders for
social, environmental and economic transformation, and of
the Advisory Committee of the Ethos Institute (Ethos Insti-
tute for Business and Social Responsibility), where Marcelo
Behar sits on the Steering Committee, and we also partici-
pate in some working groups.
126
2016 ANNUAL REPORT Natura Consultants
Productivity
203-2 – Average annual income generated (R$)
2014
2015
2016
Consultants (NCs)1
Natura Consultant Advisors (NCAs)2
4,290
14,306
4,161
17,614
4,028
18,428
1. Average annual income earned by our NCs through Natura product sales. 2. The NCAs receive commissions according to their performance (number of
NCs placing orders and volume of business).
Training and Recognition
Participation of Natura Consultants in training –
Brazil (thousand)
2014
2015
Beginner Natura Consultants
Initial training
Total NCs trained on the topics1
Training activities
NCs trained (%)
496
378
372
2014
45
543
315
393
2015
41
Training courses carried out2 (thousand)
1,546
1,909
2016
554
230
397
2016
39
1,789
1. Participation of the same consultant in different training courses. Only training in the Face, Fragrances and Makeup categories, applied by Relationship
Managers, is included. 2. Total number of training courses held, whether delivered by Relationship Managers, through online training and/or other initiatives.
Training of Natura Consultants– International
Operations1 2
2014
2015
2016
Argentina
Chile
Colombia
Peru
Total
7,512
4,490
5,666
6,512
8,590
4,091
6,717
7,088
10,389
5,233
7,035
12,582
24,180
26,486
35,239
1. Average number of consultants trained per cycle, without repetition, in the three main categories: Face, Fragrances and Makeup. 2. In 2016, we launched
virtual courses in all categories, which are also included in this indicator.
127
2016 ANNUAL REPORT Recognition of NCs - Brazil
2014
2015
2016
NCs recognized as Natura standouts1
NCAs recognized as Natura standouts2
7,433
2,287
13,894
1,631
12,177
1,389
1. Natura Standouts: program that values and gives recognition to individuals in our network who excel each year in different ways. 2. The NCA Recognition
Program was developed to value and give recognition to those who show outstanding behavior in orientation activities. In Natura Standouts, the Advisors
gain recognition because of activity and volume. In Evolução do Momento (Evolution of the Moment), we celebrate the development of NCAs in orientation
activities.
Customer Services
103-2 - Complaints related to impacts on society registered, processed and resolved through a formal
mechanism
Brazil Operations12
Registered
Forwarded²
Resolved
2014
2015
2016
1,826
2,369
3,556
1,826
2,296
2,953
1,826
2,296
2,953
1. The scope considers the complaints of consumers and Natura Consultants lodged through the channels that serve these stakeholders. We do not include
suppliers here, because this group is contemplated in another indicator. 2. There was a significant increase in complaints made by consultants regarding
unsolicited orders and negative experiences reported by consumers. The increase in unresolved complaints is due to cases being closed for lack of response
from the complainant.
128
2016 ANNUAL REPORT Suppliers
Environmental Impact
Natura’s main suppliers of packaging and raw
materials1
2014
2015
2016
Total number of suppliers evaluated
94
118
83
Energy consumption
Primary source of eletricity – eletricity consumption (J)
1,1 x 1,014
9,9 x 1,013
8,3 x 1,013
Self-generated electricity – diesel generator (J)
1,6 x 1,013
1,9 x 1,013
4,9 x 1,013
LPG consumption (J)
1,3 x 1,013
3,9 x 1,012
3,1 x 1,012
Others – natural gas (J)
6,7 x 1,013
6,0 x 1,013
3,8 x 1,013
Total energy consumption (J)
2,1 x 1,014
1,8 x 1,014
1,7 x 1,014
Water consumption
Total water consumption (m³)
342,813
281,000
157,978
Waste generation
Total waste sent to landfills or incinerated (t)
Total waste sent to recycling (t)2
845
8,280
1,460
6,065
1,285
4,618
1. In 2016, the survey response rate was down 30% in comparison with the previous year. Despite the increase in diesel consumption, total energy consumption
decreased by 5% in relation to the previous year. Considering the relative consumption, there was a 16% drop in total energy consumption and by 44% in
water consumption. In the case of waste, we are starting to see more robust results following a change in the calculation method, in 2015 - we now separate
the different types of disposal and waste class (hazardous or non-hazardous). 2. The indicator started to be monitored in 2013. Social and environmental
evaluation of suppliers is based on respondents’. The monitoring of environmental data is part of the supplier development program (Qlicar) and, through
that program, we seek to increase the number of respondents and stimulate continuous improvement. Suppliers that do not participate in the Qlicar
program are also monitored. As expected, there were reductions in the consumption of water and electricity, as a reflection of the water shortage crisis and
the Brazilian energy scenario.
308-1 – New suppliers selected based on
environmental criteria1
Total number of suppliers screened
Total number of suppliers hired based on
environmental criteria
% of suppliers hired based on environmental criteria
2014
1,876
42
2.2
2015
2016
1,719
39
2.3
999
19
1.9
1. The number of new suppliers in the categories that are subject to evaluation and monitoring of environmental, labor, social impact and human rights
criteria is low when compared to the total number of new Natura suppliers, at around 1.9%. However, these categories account for 70% of Natura’s entire
purchase volume.
129
2016 ANNUAL REPORT 308-2 - Total
number of
critical suppliers
evaluated based
on environmental
factors1
Suppliers
submitted to
environmental
impact
assessment
Suppliers
identified as
the cause of
significant
environmental
impacts
Improvement
agreements
signed
Improvement
agreements
signed (%)
2014
2015
20162
414
409
338
142
128
120
134
73
53
94%
57%
44%
1. Environmental assessment is carried out through audits. Identified deviations are monitored monthly by the auditing department. We have already seen
improvements in 44% of cases. 2. In 2016, we changed the calculation criteria, considering all suppliers audited during the year and only suppliers that
completed the agreed upon improvement actions.
Impact Related to Labor Practices
103-2 / 103-3
414-1 – Percentage of new suppliers selected based
labor practices-related criteria12
2014
2015
2016
Total number of suppliers screened
Total number of suppliers hired based on labor
criteria
% of suppliers hired based on labor criteria
1,876
42
2.2
1,719
39
2.3
999
19
1.9
1. The volume of new suppliers in the categories that are subject to evaluation and monitoring of environmental, labor, social impact and human rights
criteria is low when compared to the total number of new Natura suppliers, at around 1.9%. However, these categories account for 70% of Natura’s entire
purchase volume. 2. The percentage variation is not relevant, but there is a significant reduction in the total number of suppliers, due to a change in the
methodology for calculating this indicator. Now, only companies that were registered and that handled purchase orders during the year in question are
considered new suppliers.
414-2 - Significant real and potential negative impacts on labor practices in the supply chain
Suppliers
submitted to
labor impact
assessment
Suppliers
identified as
the cause of
significant
negative impacts
Improvement
agreements
signed
Improvement
agreements
signed (%)
2014
2015
20161
414
409
338
123
120
113
117
65
50
95.12%
54.17%
44.25%
1. In 2016, we changed the calculation criteria, and now include all suppliers audited in that year and, for improvements, only the suppliers that completed
the agreed upon actions.
130
2016 ANNUAL REPORT Impact on Society
103-2 / 103-3
414-1 – Percentage of new suppliers selected based
on impact on society
2014
2015
2016
Total number of suppliers screened
Total number of suppliers based on criteria relating to
their impact on society1
% of suppliers hired based on criteria relating to their
impact on society2
1,876
42
2.2
1,719
39
2.3
999
19
1.9%
1. The percentage variation is not relevant, but there is a significant reduction in the total number of suppliers, due to a change in the methodology for
calculating this indicator. Now, only companies that were registered and that handled purchase orders during the year in question are considered new
suppliers. 2. The number of new suppliers in categories that are subject to evaluation and monitoring of environmental, labor, social impact and human
rights criteria is low when compared to the total number of new Natura suppliers, at around 1.9%. However, these categories account for 70% of Natura’s
total volume of purchases and refer to production inputs, third-party manufacturers, gifts, laboratories, research, transport, logistics operators, customer
services, marketing, services, local communities and cooperatives.
414-2 - Significant real and potential negative impacts of the supply chain on society and actions taken1 2
Suppliers
submitted to
assessment of their
impact on society
Suppliers identified
as the cause of
significant negative
impacts on society
Improvement
agreements signed
Improvement
agreements signed
(%)
2014
2015
2016
409
338
115
126
130
104
78
51
90%
62%
39%
1. In 2016, we changed the calculation criteria, and now include all suppliers audited in that year. In the percentage of agreements reached, we have included
only those suppliers that have completed the improvement actions agreed upon. 2. The most significant impacts relate to meeting the quotas of apprentices
or people with disabilities, lack of or adequate training in the Code of Ethics, unidentified local community development activities, disclosure or not of the
complaints channel. We stress that the identified deviations are monitored monthly by the auditing department and we have seen improvements in 39%
of cases.
414-1 - Percentage of new suppliers selected based
on human rights-related criteria (%) 1 2
2014
2015
2016
2.2%
2.3%
1.9%
1. The volume of new suppliers in the categories that are subject to evaluation and monitoring of is low when compared to the total number of new Natura
suppliers, at around 1.9%. However, these categories account for 70% of Natura’s entire purchase volume. 2. The percentage variation is not relevant, but
there is a significant reduction in the total number of suppliers, due to a change in the methodology for calculating this indicator. Now, only companies that
were registered and that handled purchase orders during the year in question are considered new suppliers.
131
2016 ANNUAL REPORT Supplier Communities
203-1 - Significant impact on supplier communities
103-2 / 103-3
The positive impacts arising from the relationship between
Natura and its supplier communities are income generated
from the purchase of inputs, investment in the development
of higher value-added production chains, and encourage-
ment to develop the technical capacities and skills of these
partners, through training, as well as knowledge exchange
with other producers and the development of partnerships
with other companies. All these actions aim at contributing
to the establishment of a sustainable commercial model
focused on the conservation of socio-biodiversity. No neg-
ative impacts have been identified so far in the supplier
communities with which Natura works.
Direct investments are made in the form of payments for
supplies, sharing of benefits and use of image, and are paid
directly to each local community. When it comes to providing
support and infrastructure for the development of produc-
tion chains, training, studies and technical services, financial
resources allocated through projects that support coopera-
tives, materials, equipment and courses directed at improv-
ing the production chain or providing technical support.
Among the indirect impacts of their relationship with Natu-
ra are the development of production chains and improve-
ment of skills of the populations involved, through training
in health and safety programs, good management prac-
tices and administrative and organizational management.
Additionally, there is potential to create new opportunities
and commercial partnerships, form a network of commu-
nities and knowledge exchange, focus on biodiversity con-
servation and establish a commercial model focused on
biodiversity that can influence stakeholders.
In 2016, there was an increase in investments, mainly due
to the abundant volume of inputs provided for soap pro-
duction, leading to a greater need for investments in infra-
structure and materials in the production chains; studies
and technical services.
Read more about our relationship with supplier commu-
nities on page 55.
132
2016 ANNUAL REPORT Consumers
Brand Image
102-43 / 102-44 Loyalty (%) 1 2
2014
2015
2016
Consumers - Brazil
Consumers - IOs3
64
65
58
67.3
56.2
68.7
1. Brand Essence research conducted by the Ipsos Institute in all countries, between November and December 2016. 2. Indicators generated through a
quantitative survey of 3,000 interviews in Brazil (30 municipalities across the country), and 2,000 interviews in the five Latin American countries (Argentina,
Chile, Peru, Colombia and Mexico). Loyalty is based on the percentage of people surveyed who gave the maximum score (Top1Box), on a scale of 1 to 5 points,
to three factors: satisfaction, intention to continue the relationship with Natura and recommending the brand. 3. The scores from Chile and Colombia were
not considered in 2016, due to an invalidation of study results caused by a field quality problem involving the Ipsos Institute. The study will be redone in these
countries, with results expected in May 2017. The 2015 indicator has been recalculated on the same basis, to ensure comparability.
102-43 / 102-44 Consumer Preference Index12 –
Customers (%)
2014
2015
2016
Consumers - Brazil
Consumers - IOs3
Recommendation - IOs4
41.8
21.4
81.9
35.1
24.3
81.9
30.9
27.3
91.1
1. Brand Essence research conducted by the Ipsos Institute in all countries, between November and December 2016. 2. Indicators generated through a
quantitative survey of 3,000 interviews in Brazil (30 municipalities across the country), and 2,000 interviews in the five Latin American countries (Argentina,
Chile, Peru, Colombia and Mexico). Brand preference is based on the following question: Out of all the cosmetics, hygiene and beauty brands you know, which
is your favorite? 3. For IO preference, the weighted scores of Argentina and Peru were considered. The results from Chile were not considered in 2016, due to
an invalidation of study results caused by a field quality problem involving the Ipsos Institute. The study will be redone, with results expected in May 2017. In
Mexico and Colombia, countries that are in consolidation, we did not evaluate brand preference. 4. The recommendation results for Chile and Colombia were
not included, since the research was invalidated in those countries, for the reasons cited in note 3.
Global assessment of brand image survey -
Brazil¹ (%)
2014
74.2
2015
73.0
2016
72.5
1. Source: Brand Essence / Ipsos Institute. The indicators are the result of a quantitative sample of 3,000 interviews conducted in person at people’s homes
in 27 different cities. It is the same sample used in the 2015 research, whichh makes the data obtained comparable.
133
2016 ANNUAL REPORT Consumer Health and Safety
416-1 - Assessment of the impacts on health and safety during product and service life cycle
The categories of marketed hygiene products, cosmet-
ics and perfumes are regulated by Anvisa in Brazil, as
well as by similar local regulatory bodies where we have
International Operations. In 2015, a new indicator was
created – “delivery of technical dossier to Anvisa for ap-
provement of new product” – in which all Anvisa legal
requirements regarding health and safety are checked
off. With this new indicator, 100% of marketed products
follow established procedures and are monitored for
post-market availability.
Also in 2016, we opened our first Natura store in New York.
All products sold in the U.S. market have been evaluat-
ed and comply with local regulatory requirements, such
as those of the Food and Drug Administration (FDA), and
of the California Proposition 65 (a list of more than 800
chemical products that are subject to restricted use).
417-1 – Labeling of products and services
103-2/ 103-3
Natura products contain information on how to use them,
which of the substances used in its formula are capable of
generating social and environmental impacts, how to dis-
pose of the product, indication of the recommended num-
ber of times the packaging can be reused and data on pro-
duction outsourcing. All Natura cosmetics are evaluated
according to the requirements of the Environmental Table.
Read more about our consumer safety practices on
page 39
Origin of materials and product certification (%)
2014
2015
2016
Materials of renewable plant origin
Materials of natural plant origin
Materials with certificate of origin
82.6
7.2
12.2
83
6.6
13
83
5.6
13
Marketing Communications
417-3 - Cases of non-compliance regarding product and services communications
In 2016, Natura received no notifications regarding non-compliance with regulations and laws, nor any voluntary codes
related to marketing communications, including advertising, promotional actions and sponsorships.
416-2/417-2/419-1 – Fines or non-compliance related to impacts caused by products and services,
labeling or the supply and use of products and services
In 2016, Natura received no notices, penalties or fines for violation of the laws and regulations that govern the supply and
use of products, labeling or allegedly endangering the health and safety of consumers. Only one payment was made in 2016,
totalling R$ 6,000, due to non-compliance with import standards and formalities.
134
2016 ANNUAL REPORT Local Communities
Hiring from the local communities
202-2 - Senior managers who are from local
communities - Brazil¹
2014
2015
20166
Total number of senior managers
Cajamar (%)2
Benevides (%)3
Nasp (%)4
Lapa (%)5
185
3.1
0.0
9.2
n.a.
169
1.5
0
0
22.1
164
0
0
0
4.3
1. Senior managers are the positions starting from Senior Manager (Business Manager, Process Manager and Global Manager) at Brazilian operating units.
2. Surroundings of Cajamar: the whole town of Cajamar (São Paulo state). 3. Surroundings of the Ecoparque: municipalities of Benevides, Marituba, Santa
Bárbara and Santa Izabel, and Mosqueiro district (part of the city of Belém), all in the state of Pará. 4. Surroundings of Nasp: Jaguara district (part of the city of
São Paulo, comprising the following neighborhoods: Vila Jaguara, Vila Piauí, Remédios and Jardim Marisa); 5. A few employees have been temporarily allocated
to the Lapa site. This allocation is provisional, for the duration of construction at the new Nasp site. After it is completed, these employees will be allocated there
permanently. Its surroundings include the districts of Lapa, Vila Leopoldina and Barra Funda, all in the city of São Paulo (São Paulo state). 6. At present, none
of the senior managers resides in a local community that surrounds one of Natura’s operational units. The only exception is the Lapa site, which is temporary,
as explained in the note above. Actions designed to boost local development currently place more emphasis on hiring employees from local communities for
entry-level positions at Natura.
Senior managers who are from local communities –
IOs (%)¹2
2014
2015
2016
Argentina
Chile
Colombia
France
Mexico
Peru
Total
59
0
50
100
44
40
50
59
0
20
100
50
66
40
67
20
25
25
70
67
57
1. Senior managers are those holding positions from Senior Manager upwards. 2. Most of the senior management roles are occupied by professionals who
are native to the country where Natura is operating, so that the business works according to local market benchmarks. In 2016, some of the senior manager
vacancies were filled by employees from Brazil who possessed the skills required to take on these roles.
135
2016 ANNUAL REPORT Employees from local communities¹ (%)
2014
2015
2016
% of employees from local communities in Benevides2
% of employees from local communities in Cajamar34
% of employees from local communities at Nasp45
% of employees from local communities in Lapa6
26
15
1
n.a.
43
17
2
7
48
17
2
5
1. In 2016, we changed the criteria for defining the regions considered as local communities surrounding Natura, in order to align them with the regions
covered in our territorial development strategy. As a result, this indicator directly reflects the results of our efforts in activities that contribute to local social
and environmental development. The data for the years 2014, 2015 and 2016 were updated according to these new criteria. 2. Surroundings of Ecoparque,
in Benevides: municipalities of Benevides, Marituba, Santa Bárbara and Santa Izabel, and the district of Mosqueiro, which is part of the city of Belém, all in
the state of Pará. 3. Surroundings of Cajamar: the entire town of Cajamar (São Paulo state). 4. Despite the efforts and activities directed at the territorial
development of Cajamar and Nasp, 2016 was a year of restrictions on new employee hiring, which meant that the number remained stable between 2015
and 2016. 5. Surroundings of Nasp: district of Jaguara, which is part of the city of São Paulo (São Paulo state) and comprises the neighborhoods of Vila
Jaguara, Vila Piauí, Remedios and Jardim Marisa. 6. Region not considered in the territorial development strategy, since the allocation of employees to
this site is provisional, for the duration of construction at the new Nasp site. After it is completed, these employees will be allocated there permanently. The
surroundings of Lapa include the districts of Lapa, Vila Leopoldina and Barra Funda, all in the city of São Paulo (São Paulo).
204-1 - Policies, practices and proportion of spending on local
suppliers (R$ million)1
2014
2015
2016
Cajamar
Benevides2
Total
Spending on local suppliers as a proportion of total spending on
suppliers (%)
148
132
281
7.0
144
178
322
6.9
155
111
266
5.1
1. They are considered suppliers of the municipalities of Cajamar and Benevides, but supply any Natura unit. 2 In Cajamar, the financial increment is mainly
due to an increase in business dealings with partners who migrated to the local environs. In Benevides, the reduction was a reflection of changing the
definition of “local”, which previously included the entire state of Pará.
136
2016 ANNUAL REPORT Environmental Management
GHG Emissions
305-1/305-2 – Emissions from the value chain 1 2
2014
2015
2016
Extraction and transportation of raw materials and packaging
(processing and transportation to direct suppliers)
141,574
127,788
122,337
Direct suppliers (processing and transportation to Natura)
35,154
31,731
30,378
Industrial and internal processes
29,325
18,557
15,663
Product sale (transportation and distribution)
49,593
66,749
63,465
Product use and packaging disposal
76,680
76,442
71,611
Overall total (t)
332,326
321,267
303,424
1. All the GHG gases were included in the calculations. 2 To calculate our inventory, we considered the total volume of our emissions under Scopes 1, 2
and 3. Our inventory follows GHG Protocol standards and the principles of the ISO 14064-1 standard, which establish rules for its design, development,
management, preparation and reporting. In 2016, the report was audited by KPMG.
305-1/305-2/305-3 – Direct and indirect greenhouse gas
emissions12
2014
2015
2016
Direct GHG emissions (Scope 1)
1,635
4,156
4,975
Direct biogenic emissions (from biomass burning or biodegrada-
tion)
8,826
9,347
8,870
Indirect GHG and energy emissions (Scope 2)
8,371
7,909
5,094
Other indirect GHG emissions (Scope 3)
322,319
309,202
293,355
Indirect biogenic emissions of CO2, in metric tons
8,921
10,746
9,366
Total (t)
332,325
321,267
303,424
1. All the GHG gases were included in the calculations. 2. To calculate our inventory, we considered the total volume of our emissions under Scopes 1, 2
and 3. Our inventory follows GHG Protocol standards and the principles of the ISO 14064-1 standard, which establish rules for its design, development,
management, preparation and reporting. In 2016, the report was audited by KPMG.
137
2016 ANNUAL REPORT 305-5 – Reduction in greenhouse gases emissions
2016
Weight
(t eq of CO2)
Type of gas
Use of coastal shipping to supply distribution
centers in the north/northeast
Export gains due to local production
Launch of Ekos perfume refill
Recycled glass for fragrances
Recycled PET packaging
1,118
890
186
86
535
CO2e
CO2e
CO2e
CO2e
CO2e
Scope
(1, 2 or 3)
Objetivo 3
Objetivo 3
Objetivo 3
Objetivo 3
Objetivo 3
305-6/305-7 – Emission of substances that deplete the ozone layer / Emissions of NOx, SOx and other
significant atmospheric emissions
Natura does not use substances that affect the ozone lay-
er in its operations. Furthermore, since clean fuels (ethanol,
LPG and briquette) are used in all boilers, there are no sig-
nificant measurable quantities of NOx and SOx emissions.
Transport CO2
emissions
Product
transportation
Logistics
Product export
Employee
transportation
Waste
transportation
Chartered
Sales force vehicles
Vehicles used by
senior management
2014
2015
2016
49,593
10,951
219
2,229
577
449
50,395
16,353
204
2,079
457
331
49,856
13,609
206
1,955
357
201
138
2016 ANNUAL REPORT Energy
302-1 – Direct and indirect Energy
Consumption, divided by primary
source (TJ) 1
Type of Source
2014
2015
2016
Solar energy
Renewable
0.02
0.02
0.02
Diesel used in generators
Non-renewable
LPG consumption
Non-renewable
6
6
3.27
7.10
4.31
6.17
Electricity
Mixed source, predominantly
renewable2
197
205.71
189.90
Alcohol consumption3
Renewable
BPF oil consumption:
Non-renewable
Briquette consumption4
Renewable
32
-
33
38.65
40.45
-
1.00X10-12
33.12
29.27
1. Consumption in relation to Natura’s energy matrix: Cajamar, Benevides, Lapa, Distribution Centers and Nasp administrative support, Itupeva hub, Shared
Services Center (CSC) and regional offices. 2. Electricity is classified as a renewable source because 75.5% of the Brazilian energy matrix was composed of
renewable sources in 2016, according to the National Energy Balance report. 3. Renewable fuel used in Cajamar for steam production. 4. The BPF boiler has
been fully replaced by biomass in Benevides as one of the steps to reduce fossil fuel consumption.
302-1 - Energy matrix (%)¹
Type of Source
2014
2015
2016
Electricity2
Mixed source, predominantly
renewable
LPG consumption
Non-renewable source
Diesel used in generators
Non-renewable source
Alcohol consumption3
Renewable source
BPF oil consumption
Non-renewable source
72
2
2
12
0
71
2
1
13
0
70
2
2
15
0
Solar energy
Briquette4
Renewable source
0.01
0.004
0.007
Renewable source
12
12
11
1. Consumption in relation to Natura’s energy matrix: Cajamar, Benevides, Lapa, Distribution Centers and Nasp administrative support, Itupeva hub, Shared
Services Center (CSC) and regional offices. 2. Natura stores are not included. 3. Renewable fuel used in Cajamar for steam production. 4. The BPF boiler has
been fully replaced by biomass in Benevides as one of the steps to reduce fossil fuel consumption.
139
2016 ANNUAL REPORT 302-1 - Total energy consumption, by source (TJ)
2014
2015
2016
Non-renewable fuels
Renewable fuels
Total fuels
11.8
10.38
10.49
262.2
277.49
259.64
274.0
287.87
270.13
302-1 - Total energy consumption (TJ)
2014
2015
2016
Electricity1
Heating
Refrigeration2
Steam3
Total energy
203.1
208.98
194.21
0.00
0.00
66.1
0.00
0.00
0.00
0.00
74.80
72.00
269.2
283.78
266.20
1. Natura stores are not included. 2. At the Cajamar site, electricity used for refrigeration is already included in the total electricity consumption figure. 3. Total
consumption of alcohol and briquettes, plus LPG consumption for Cajamar’s boiler.
302-1 - Total energy consumption¹ (TJ)
2014
2015
2016
Cajamar and Benevides2
Other Natura locations in Brazil3
Natura's third-party manufacturers4
Total energy matrix
198.8
75.2
45.0
215.7
72.1
35.8
212.7
57.5
25.9
319.0
323.7
296,0
1. There was a slight reduction (1%) in absolute energy consumption at Cajamar and Benevides, due to a decline in production volumes. Reduction (17%) in
absolute consumption of other Natura locations; reduction (28%) in absolute consumption of third-party manufacturers, due to reduced production volumes
and internalization of the production of certain products at Cajamar and Benevides. These factors resulted in an 8% decrease in energy consumption
compared to 2015. 2. Cajamar and Benevides represent 64% of Natura’s total energy matrix. 3. Other Natura Brazil locations: Itupeva hub, Lapa and Nasp
- both in São Paulo (all in São Paulo state). 4. Companies that manufacture finished products for Natura, representing approximately 90% of the total units
purchased by Natura.
140
2016 ANNUAL REPORT 302-2 – Energy consumption outside Natura spaces (TJ)1
2014
2015
2016
Goods and services acquired
245.94
189.44
148.23
Upstream transportation and distribution
479.71
497.59
495.83
Operational waste generated
-
-
-
Business trips
79.58
55.65
45.38
Transportation of employees
30.99
29.48
27.75
Downstream transportation and distribution
194.13
207.94
214.79
Total
1,030.35
980.10
931.99
1. Conversion of fuel consumption to energy using IPCC factors.
302-3 – Energy Intensity
2014
2015
2016
Energy consumption per unit produced1 (Joules x 1012 – kJ)
484.3
539.9
564.9
1. Consumption in relation to Natura’s energy matrix (Cajamar, Benevides, third-party Suppliers, DCs, Itupeva hub, Lapa and Nasp). Calculation formula: sum
of all Natura Energy Sources divided by total of units produced.
302-4 – Energy saved (Joules x 1012)
2014
2015
2016
En virtud de proyectos de eficiencia1
En virtud de consumo de energía solar
6.84
0.02
0.04
0.02
0.00
0.02
1. Solar energy consumption has been continuous since the implementation of parking lot lighting and water heating for the nursery, in 2005.
Waste Management
103-2 / 103-3
301-1 – Materials used, by weight or volume (except water)1
2014
2015
2016
Direct materials (t)
Direct materials (m3)
53,259
70,283
70,635
11,663
9,583
8,162
1. The calculation method was revised and now includes all inputs or raw materials received at Cajamar and Benevides. Prior to 2014, the amount reported
included only the materials consumed by Cajamar’s factories. Therefore, the values for 2014 and 2015 were also updated, In line with the new methodology.
141
2016 ANNUAL REPORT Environmental impact of packaging, by
product quantity¹ (mpt/kg)
2014
2015
2016
Brazil
64
69
53
1. The Life Cycle Assessment methodology goes from the extraction of raw materials to final disposal. The software used to calculate packaging LCA has
an international database; therefore, it is necessary to adapt/group the materials used by Natura and the disposal scenarios to Brazilian standards. The
environmental impact of packaging as measured by the LCA tool showed a reduction in comparison with the previous year, due to efforts to expand the use
of eco-efficient packaging and reduce greenhouse gas emissions, as well as fluctuations in the sales mix.
301-3 - Recovered packaging in
relation to total billed products1
2014
2015
2016
Colombia
Colombia
Argentina2
Colombia
Argentina
% of recovered packaging in relation
to total billed products/items
37%
73%
1%
37%
0,5%
Kg of materials recovered
286,608
624,419
22,245
282,150
9,350
1. We have worked on the EcoPontos project in Colombia since 2015, through an alliance with the Family Foundation and recyclers’ associations in Bogotá,
Bucaramanga, Medellín, Rionegro and Valledupar. In 2016, we stopped accounting for the waste recovered from our distribution center, since it is not in line
with the post-consumer reusable materials methodology. Considering only EcoPontos materials, the volume grew last year, whereas in 2015 this volume
amounted to 216 tons. 2. We reviewed our strategy in 2016 and ended the joint project with the Buenos Aires government; consequently, the booked amount
refers only to the period from January to April. We partnered with Cempre (Business Commitment to Recycling) and joined the Business Fund for Recycling
(Feri) program, which coordinates business resources and public policies to improve waste management and boost recycling rates. Their goal is to help the
collective effort of companies in the recovery of post-consumer materials, boosting the impact of the investments.
306-2 – Total weight of waste, by type and disposal method12
2014
2015
2016
Total waste per unit produced (g/un.)
25
25.5
22.8
1. The waste/unit produced indicator is the sum of Natura’s total direct and indirect waste, in grams, divided by the total of units directly and indirectly
produced by Natura.
142
2016 ANNUAL REPORT 306-2– Direct and indirect waste5
Natura’s direct waste, by type
and final disposal (%)
Total hazardous waste (Class I)
Incinerated
Recycling1
Total non-hazardous waste
(Class II-A and B)
Discarded in landfill
Recycling1
Incinerated
Discarded in landfill
2014
2015
2016
92
7.6
0
87
4
9
82.4
17.6
0
90
6
4
71.0
28.9
0
91
1,9
7,2
Natura’s total direct waste (t)2
12,168
11,585
9,600
Natura’s total indirect waste (t)
2014
2015
2016
Waste from other Natura
locations3
Waste from third-party
suppliers4
2,266
2,127
2,053
1,543
1,162
1,131
Total indirect waste (t)5
4,319
3,670
2,293
1. Includes recycled waste sent for composting, co-processing and transformation. 2. Refers to the Cajamar, Benevides, Nasp and SP-DC sites. Natura does
not include in this indicator waste generated by construction (rubble) at its sites. 3. Refers to distribution centers, except the SP-DC, Itupeva hub and Lapa.
The waste from these units started to be monitored as of 2015. 4. Refers to the main third-party suppliers, representing approximately 90% of the total
produced by third parties. 5. In 2016, there was a reduction of 17% in the amount of waste generated, deriving mainly from lower production volumes and
projects designed to reduce waste generation that were implemented during the period. The 38% reduction in total indirect waste was due to a planned
reduction of production by third-party suppliers, whose volumes were taken over by Natura.
306-4– Total weight of hazardous waste transported
Natura does not import, export or transport this type of waste internationally.
Water
103-2 / 103-3
303-1– Water consumption (l/unit produced)
2014
2015
2016
0.45
0.49
0.53
143
2016 ANNUAL REPORT Water consumption, by location (m3)
2014
2015
2016
Natura sites1
Other locations2
174,045
177,866
191,277
60,356
52,826
50,224
Natura’s third-party suppliers3
60,299
63,027
37,453
Total Water consumption
294,700
293,719
278,955
1. Covers our industrial units: Cajamar and Ecoparque (Benevides). 2. Includes Nasp, Lapa, distribution centers and the Itupeva hub. 3. Manufacture finished
products for Natura. The leading third-party suppliers account for about 90% of the volume produced.
303-1– Total water withdrawal, by source1 (m3)
2014
2015
2016
Surface water (rivers, lakes, wetlands, oceans)
0
0
0
Groundwater
174,045
177,866
191,277
Water distribution company
30,960
20,872
23,858
Total
205,006
198,738
215,135
1. Relates to the Cajamar, Benevides, Nasp and Lapa units. It is not possible to list the sources used by distribution centers, Itupeva hub and third party
suppliers, due to the variety of water withdrawal sources used.
303-2– Water sources significantly affected by water withdrawal
Due to the lack of a public water supply system, the water
resources used at the Cajamar and Benevides facilities
are withdrawn from semi-artesian wells. These systems
are monitored daily and comply with all regulations estab-
lished on the permits granted by the supervising bodies. At
Nasp, in the city of São Paulo (SP), the water is supplied by
the public utility system.
303-3 – Volume of water recycled and reused
2014
2015
2016
Water recycled¹ and reused² (m³)
99,586
82,972
63,523
Reclaimed water as a proportion of the total amount of water
treated at the effluent treatment plant³4 (%)
Reclaimed water as a proportion of total water withdrawn (%)
61
67
45
59
42
41
1. Recycled water: water reused for toilet flushing, irrigation and other industrial processes. 2. Reused water: water that is returned from the Cajamar
production process and is used in the drinking water system. 3. Reclaimed water: the sum of recycled and reused water. 4. For this indicator, only Cajamar
data were considered.
144
2016 ANNUAL REPORT Effluent
103-2/ 103-3
306-1/306-5 – Total water discharge, broken down by quality and disposal. Protection and biodiversity
index of bodies of water and habitats
Effluent treated at Cajamar (mg/l)
Legal parameter
2014
2015
20163
BOD1
QOD2
Oils and greases
60
150
120
20
65.68
17
13.3
55.1
18.4
29.1
76.4
16.6
1. BOD – biochemical oxygen demand. 2. QOD – chemical oxygen demand. 3. Refers to the Ecoparque, in operation since April 2014. 4. The increase in
Ecoparque effluent volume is due to the inauguration of the on-site cafeteria, which adds to the volume of sanitary effluent, and to the establishment of
Symrise’s (a partner company) headquarters at the Ecoparque, which adds to the volume of industrial effluent. Furthermore, effluent originating from
cleaning procedures carried out in 2015 had been stored in tanks, with final treatment scheduled for 2016.
Effluent treated at Benevides (Ecoparque)
(mg/l)3
Legal parameter
2014
2015
20164
BOD1
QOD2
Oils and greases
-
-
-
7
64
1
10.9
55.9
7.0
5.5
33.4
5.0
1. BOD – biochemical oxygen demand. 2. QOD – chemical oxygen demand. 3. Refers to the Ecoparque, in operation since April 2014. 4. The increase in
Ecoparque effluent volume is due to the inauguration of the on-site cafeteria, which adds to the volume of sanitary effluent, and to the establishment of
Symrise’s (a partner company) headquarters at the Ecoparque, which adds to the volume of industrial effluent. Furthermore, effluent originating from
cleaning procedures carried out in 2015 had been stored in tanks, with final treatment scheduled for 2016.
145
2016 ANNUAL REPORT 306-1/306-5
Total water
discharge, by
quality and
disposal
Volume (m³)
Treated
Water
quality
and
treatment
method
Disposal
To be
reused by
another
organiza-
tion?
2014
2015
2016
2016
2016
2016
2016
Cajamar1
110,829
129,041
157,101
Yes
Benevides
-Ecoparque2
-
4,261
18,369
Yes
Activated
sludge
Filtration
garden
Reuse
then dis-
charged
into the
river
Discharge
into the
river
No
No
Benevides
11,838
The old Benevides industrial unit was closed in October 2014 and the prop-
erty was returned to its owner
Nasp3
28,163
17,849
15,311
No
N.A.
Municipal
network
No
1. At Cajamar, the discharge goes into the Juqueri River (class 3). This body of water presents the following results (BOD upstream: 17.7mg/l, downstream:
12.5mg/l), from July 13, 2016. 2. At Benevides/Ecoparque, the discharge goes into a tributary of the Benfica River (class 2). This body of water presents the
following results (BOD upstream: <3mg/l, downstream: <3mg/l), from March 23, 2016 and September 28, 2016. This shows that these discharges do not
damage the rivers and are in full compliance with current legislation. 3. Nasp has only domestic effluent, which is collected by the Sabesp sewage system.
Since there are no meters, the volume of effluent is equal to the volume of water consumed.
306-3 – Total number and volume of significant spills
There were no significant substance spills or accidents involving products that have had an environmental impact
recorded in 2016.
Biodiversity
304-1 – Location and
size of areas
Cajamar
Benevides (Ecoparque)
Nasp (São Paulo)
Area type
Owned
Owned
Rented
Position in relation to the
protected area
This is an APA
(Environmental
Protection Area)
Includes
protected areas
Located in an urban
industrial area
Type of operation
Administrative and
industrial, for the
production of
cosmetics
Administrative and in-
dustrial, for the
production of soap paste
and soaps
Administrative and
logistics, for storage and
distribution of cosmetics
Size of operational unit
646,000 m²
1,729,000 m²
111,700 m²
Biodiversity value1
Not available
Not available
Not available
1. Considers the attributes of the protected area and of areas with a high level of biodiversity outside the protected area (terrestrial, freshwater or marine
ecosystem) and classification by conservation status (e.g.: IUCN Category, Ramsar Convention, national legislation, etc.).
146
2016 ANNUAL REPORT 304-3 – Protected
or restored
habitats
2016
Area/Project
Size
(hectares)
Location
Area status
Cajamar
Maintenance of roads and firebreaks
Nasp
No defined projects
Program for the
Restoration of
Degraded Areas
(Prad)
4
Ecoparque
Program focused on Permanent
Protection Areas (APP), and includes
areas of riparian forest. The goal is
to boost the local forest.
Partnerships
(for
protection or
restoration)?
No
No
No
304-4 – Total number of species included on the IUCN red list and on other conservation lists1
Critically
endangered
2014
-
2015
-
2016
-
Virola surinamensis (IUCN)
– ucuuba
Virola surinamensis (IUCN
and Env. Min) – ucuuba
Endangered
Virola surinamensis* (IUCN)
– ucuuba
Pinus elliottii (IUCN) – slash
pine
Euphorbia cerifera (CITES)
– Candelilla
Euphorbia cerifera (CITES)
– candelila
Vulnerable
Bertholletia excelsa (IUCN
and Env. Min) - Brazil nut
Vitellaria paradoxa (IUCN)
- shea tree
Bertholletia excelsa (IUCN
and Env. Min) - Brazil nut
Bertholletia excelsa (IUCN
and Env. Min) – Brazil nut
Vitellaria paradoxa (IUCN)
– shea tree
Vitellaria paradoxa (IUCN)
– shea tree
Santalum album (IUCN)* -
white sandalwood
Near threatened
Ilex paraguariensis (IUCN)
- Paraguay tea
Ilex paraguariensis (IUCN)
– Paraguay tea
Ilex paraguariensis (IUCN)
– Paraguay tea
-
-
Least concern
Cyperus articulatus (IUCN)
– piri piri
Pinus elliottii (IUCN) –
slash pine
Bulnesia sarmientoi (CITES
and IUCN) – holy wood
1. Plant species that are at risk of extinction, be they native to Brazil or exotic (imported and grown in Brazil) which are used in Natura product lines. Conservation
projects are in place, in partnership with research institutions and direct suppliers, to protect the species from Brazilian biodiversity. For the Brazil nut and Paraguay
tea, two conservation projects have been carried out, in partnership with Embrapa. Likewise, we have just concluded a conservation project, in partnership with
UFSCar (Federal University of São Carlos) to protect ucuuba trees, by collecting its fruit without cutting them down. We also support the adoption of agroforestry
systems for the production of Brazil nuts, ucuuba and piri piri in communities in the Amazon. Paraguay tea is off the list of Brazilian flora that are at risk of extinction. On
the other hand, piri piri has been placed, for the first time, on the list of the IUCN (International Union for Conservation of Nature) and is a species whose organic chain
was developed by Natura. The slash pine species of Pinus, used in fragrance formulas, is obtained from a planted forest whose origin is traceable, as guaranteed by the
supplier. In the case of the shea tree, the supplier participates in the Global Shea Alliance, a movement aimed at promoting the sustainability of this production chain.
As for candelilla and holy wood, both feature on the CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) list, but the supplier
complies with international legislation, and possesses the necessary CITES certification. The sandalwood comes from Sri Lanka, a country that follows strict species
protection and conservation policies, and has its sourcing guaranteed by the supplier. Furthermore, we have received UEBT (Union for Ethical BioTrade) Certifications
for 14 Amazon supplier communities, thereby reinforcing our commitment to ethical sourcing.
147
2016 ANNUAL REPORT
Number of certified socio-biodiversity suppliers1
Certified socio-biodiversity suppliers2
Total number of audited socio-biodiversity suppliers
% of socio-biodiversity suppliers that have been audited (%)
Total number of certified supply chains (input v supplier)3
Total number of audited supply chains (input v supplier)
% of total certified supply chains (input v supplier) (%)
2016
14
33
100%
40
113
35%
1. The Socio-Biodiversity Chain Verification System aims at monitoring the principles of ethical biotrade within the supply chains for socio-biodiversity inputs.
The system has been applied to 100% of socio-biodiversity suppliers. In the 2016 audit, 14 communities were deemed suitable for certification. Suppliers that
have not yet been certified follow monitored action plans. Their status will be assessed with the next audit, and they may then qualify to become certified
suppliers. In 2016, the verification system received its first accreditation by external auditors. However, the system has been operating since 2015. 2. Socio-
biodiversity suppliers include supplier communities, which are organized into cooperatives and associations, and rural producers. 3. Supply chain: the input
provided versus the supplier.
Grievance Mechanism
103-2– Number of grievances
and complaints regarding
environmental impacts
2014
2015
2016
Compliance
Registered
Forwarded
Complaints
20
20
9
20
20
9
20
20
9
307-1 – Significant fines and total number of sanctions for non-compliance with legislation
No fines or monetary sanctions related to environmental issues were registered in 2016.
148
2016 ANNUAL REPORT Investments
Investments and
spending on
environmental
protection (R$
thousand)1
Details
2014
2015
2016
Socio-biodiversity
Amazon Program¹
385,000
169,765
220,700
Climate change
Carbon Neutral Program
1,731
764
3,293
Waste
Water and effluent
Reverse Logistics Program and
disposal of industrial waste from
Natura units
Water Footprint Program and
treatment of industrial effluent
from Natura units
Innovation and Social
and Environmental Tech-
nology
Sustainable technology for
products and clean technology
implemented in operations
Social
Others
TOTAL3
Programs such as Natura
Movement, HDI-NC and Local
Development at Natura units²
Support, sponsorship and
associations related to
sustainability2, as well as
environmental insurance
6,327
9,935
11,375
2,685
3,410
3,583
6,645
6,661
3,874
2,081
2,784
2,225
1,880
1,263
1,194
406,349
194,582
246,244
1. The figures disclosed here for the Amazon Program are annual, unlike the amount disclosed in the Volume of Business in the Amazon indicator (a
commitment of the Sustainability Vision), which represents the accumulated amount. 2. Natura Units: Cajamar, Nasp and Benevides. 3. The support
and sponsorship listed here is different from Natura’s General Support and Sponsorship indicator, since it only includes the support, sponsorship and
participation in associations that are related to the subject of sustainability. The 2014 data do not include associations, because the indicator was revised
and recalculated in 2015.
149
2016 ANNUAL REPORT
Credits
NATURA
DIRECTOR OF CORPORATE AFFAIRS
Marcelo Bicalho Behar
Communication and Creation manager
Milena Buosi
Coordination of the Annual Report
Fábio Peixoto (MTb 59.577/SP)
Art direction and graphic design
Vanessa Kinoshita
Design
Carolina Almeida and Cassio Silva
SUSTAINABILITY
Renata Puchala, Keyvan Macedo, Juliana Pasqualini and Andreza Souza
FINANCE AND INVESTOR RELATIONS
Financial information
Márcio Bologna, Daniel Praça and Leandro Grellet Galvão
Market relations
Marcel Goya and Luiz Palhares
COLLABORATORS FOR THIS EDITION
TEXT AND SUSTAINABILITY CONSULTING
Report Sustentabilidade
Editing
Álvaro Almeida and Michele Silva
Reporting
Renata Costa
Project and Relationship Management
Ana Souza
GRI Consulting
Débora Passos , Fabíola Nascimento and Victor Netto
DESIGN
Bruna Foltran
PHOTOGRAPHY
Julia Rodrigues, Tomás Arthuzzi and Acervo Natura
INFOGRAPHICS
Rodrigo Damati
REVISION
Kátia Shimabukuro
TRANSLATION
Greenletters
Document owner
Enzo Raphael Russo
CRC: 1SP275298/O-4
152
2016 ANNUAL REPORT