NATURA 2017
ANNUAL REPORT
THE NATURA 2017 ANNUAL REPORT
is part of Natura’s results disclosure process. On the same
date that it was released, April 20, 2018, we published
a report in print format (which is also available online) with
Natura &Co’s highlights for the year. This group of companies
was formed in September 2017, when The Body Shop
was united with Natura and Aesop.
Except when otherwise stated, the financial information
in this annual report refers to Natura, Aesop and
The Body Shop. The scope of the indicators for non-financial
information only covers Natura’s activities in Brazil
and in its International Operations. In 2018,
we initiated the integration of the three companies’
environmental and social impact strategies.
Further information in Parameters for the preparation of the Natura 2017 Annual Report HERE.
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2017 ANNUAL REPORT Our Essence
GRI 102-16
REASON FOR BEING
Our Reason for Being is to create and sell products
and services that promote well-being/being well.
well-being
is the harmonious relationship of the individual
with himself, with his own body.
being well
is the empathetic, successful and pleasurable
relationship of an individual with other people,
with nature, and with the whole.
BELIEFS
Life is a chain of relationships. Nothing in the universe stands alone.
Everything is interdependent. Natura believes that valuing
relationships is the foundation of the great human revolution in the pursuit
of peace, solidarity, and life in all of its manifestations.
Continuously striving for improvement develops individuals,
organizations,and society.
Commitment to the truth is the route to enhance quality in relationships.
The greater the individual diversity, the greater the wealth
and vitality of the whole system.
The pursuit of beauty, a genuine aspiration of every human being,
should be free of preconceived ideas and manipulation.
The company, a living organism, is a dynamic set of relationships. Its value
and longevity are connected to its ability to contribute towards
the evolution of society and its sustainable development.
VISION
Due to our corporate behavior, the quality of the relations
we establish and our products and services,we will be
a group of brands with strong local and global expression, identified
with the community of people committed to building a better world
through a better relationship with themselves, with others,
with the nature of which they are a part, with the whole.
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2017 ANNUAL REPORT Message from the Board of Directors
What matters to us
is to show that companies
should be transformed
into forces for positive
social change. That
they should change
from being vehicles
for the creation of
private wealth to
instruments aimed
at the public good”.
Anita Roddick, 2000
social activist and founder
of The Body Shop
From left to right:
Luiz Seabra,
Roberto Marques,
Pedro Passos and
Guilherme Leal
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2017 ANNUAL REPORT
Message from the Board of Directors
The beginning of a new era GRI 102-14
Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal, Pedro Luiz Barreiros Passos
(Co-Chairmen) and Roberto de Oliveira Marques (Executive Chairman)
In the world, we are experiencing intense
times. In spite of the apparent resumption
of economic vitality, inequality continues
to present a systemic threat which will
tend to increase because of the impact
of new technologies on employment,
intensifying social pressures.
This uncertain environment creates room for isolationist
ways of thinking, such as the setbacks in the Paris
Agreement, a global effort to combat climate change.
In contrast, countries previously criticized for their
untrammelled and reckless production, are now emerging
as active participants in debates on how to reconcile
economic activities with environmental conservation,
even though they still have a long way to go.
Amidst these impediments to civilization, that pose a threat
to the future of mankind, in 2017 we lived through a process
that transformed our history as a company: we created
a group of companies that, for decades, have been
doing business in a new way. Natura, Aesop and The Body
Shop have joined forces in Natura &Co, a global cosmetics
group which is unique in that it comprises businesses
that share a common vision and a strong sense of purpose.
We believe in the transformation of the global economy
and in the power of sharing, in its many facets.
In the sum of strengths, and in the power of differences.
In connection, in comprehension and in collaboration
for the co-creation of solutions capable of driving
a positive transformation in the world.
We are also experiencing intense times in our companies,
albeit more predictable than those the world has
been experiencing. We believe, however, that in Brazil
and worldwide, new forces will enable us to overcome
separation, indifference and alienation, in the pursuit
of a common good, of a fairer society aware of its
commitment to future generations. To repeat the truly
inspiring phrase of Insead professor of Global Management
Joe Santos, “globalisation allows us to use the whole
world for the purpose of creating something new”.
With Natura &Co, we are seeking this something new and
expressing our profound confidence in the transformational
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potential of a new, more humane and systemic form of
globalisation, of value creation for our companies, for
society and for the planet.
In this historical moment filled with so many risks, it is our
understanding that companies have both the opportunity
and the duty to respond to society’s call to help drive major
transformations. This was always one of the ideals that we
shared with Anita Roddick, the founder of The Body Shop
and a pioneering voice in insisting that business should
assume the responsibility of being a force for good.
In the same way that we pay tribute to the legacy left by
those who built the companies united in Natura &Co, we
celebrate the future that we are beginning to build. In 2017,
while still in an initial stage of integration, our businesses
produced excellent results. Natura revitalized its presence
in the Brazilian market, gained share in key categories
and continued to grow its operations in Latin America. In
parallel, Aesop maintained its accelerated expansion in
the retail trade in large urban centres on all continents,
exceeding the milestone of 200 company-owned stores.
And The Body Shop, whose integration into the group
began in September, contributed with its best Christmas
performance in recent years.
This is only the beginning of a long journey. In 2018, we are
going to consolidate the basis of our group and in so doing
build the environment which will enable the business to gain
momentum. Close to completing 50 years in business, we
feel as if we are just starting. Natura &Co takes our dream
of internationalization to the next level. Now, we will be able
to drive a positive impact in 72 countries on every continent,
accelerating the exchange of knowledge and taking our
brands to new consumers.
Just as we believe in the power of shared values, such as
a passion for cosmetics and a passion for relationships,
embodied in our Reason for Being, WellBeingWell, we
recognize the creative power and the wisdom contained
in differences. With this renewed, diverse and multicultural
energy, intensified by collaboration among three businesses,
we will be more capable of generating even greater and
better economic, social and environmental results. ✧
2017 ANNUAL REPORT Message from the executive chairman
Focus and mobilization GRI 102-14
João Paulo Ferreira
2017 was a landmark in Natura’s
almost 50 years of existence.
Amidst a complex economic
environment, we achieved impressive
results based on two important
postures: focus and mobilization.
We were clear and disciplined in executing priorities
and in allocating resources for our strategy, generating
a positive spiral that engaged all of our employees
in our cultural transformation. This enabled us to
understand how we need to work together to build
the organization that we want, one that is capable
of responding to our present and future challenges.
In the second half of the year our results demonstrated how
this movement has begun to take effect. We grew in the
last two quarters of the year in Brazil, recovering market
share and resuming leadership in key categories, such
as perfumery, body care and gifts. Moreover, Natura has
maintained its accelerated pace of expansion in the other
countries in Latin America. We are the leaders in direct
selling in Brazil, Argentina and Chile, and we are growing
strongly in Mexico. Our net revenue reached R$ 7.7 billion,
up 7.8% over the previous year, while Ebitda totalled R$ 1.5
billion, an increase of 21.3% compared with 2016.
One of the fundamental elements in our strategy was
the revitalization of our direct selling model, which
we now call Relationship Selling. We made our
consultants the central focus of our decisions, achieving
our highest loyalty rate since measurement of this
indicator was begun, as well as increasing market share.
By striving to be more relevant for them,
we strengthened our business.
We have dedicated a great deal of effort to increasing
our consultants’ satisfaction, whether through
the development of the relationship interfaces, the
constant enhancement of our business models or the
implementation of new technologies. The digital expansion
in Relationship Selling opens up innumerable possibilities
for strengthening our brand, not just in products, but also
in the quality of the services and the contents we offer.
We already have more than 160,000 consultants
who have their own webpages on the Rede Natura
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platform, and almost 600,000 are connected via our
Consulting app. We believe there will be exponential growth
in the use of technology in all Natura operations, which
should become our main competitive differential in the
coming years.
We are also maturing in our multichannel approach.
Our online businesses practically doubled in size in 2017,
and we expect the same to happen in retail, which is at
an earlier stage. Currently we have 26 stores, three of
which in France, two in the United States and one each in
Argentina and Chile. Thanks to these initiatives, we have
adapted our portfolio for the North American market and
now, supported by The Body Shop’s global experience, we
are better prepared to take the Natura brand to more
countries.
It is important to underscore that all these movements
incorporate sustainability as a core principal that continues
to guide our way of innovating and doing business. This is
how we are striving to substantiate our vision of generating
a positive economic, social, environmental and cultural
impact in the long term. To achieve this, we will remain true
to our course and use 2018 to consolidate and ensure the
continuity of what was done in 2017. This will enable us
to further strengthen our fundaments and differentials,
which are key to our ambition to be a positive force in the
evolution of society. ✧
2017 ANNUAL REPORT
Index
1 PROFILE
Who we are
2017 performance
Strengthened governance
Risk management
Ethics and compliance
2. STRATEGY
Business model
Multichannel Natura
l Relationship Selling growth plan
l Expansion of the Rede Natura
l Participation in retail
Digital technology as a business enabler
Sustainability Driving Innovation
3. GENERATING POSITIVE IMPACT: THE PATH TO 2050
Integrated management
l Performance management
Reducing environmental impact
l Carbon: monitoring, reducing and offsetting
l Packaging and waste: making new again
l See our water footprint
Sustainable social biodiversity businesses
l Science, technology and innovation
l Social biodiversity production chains
l Institutional reinforcement
Positive social impact
l Greater development for consultants
l Local development programme
l Suppliers: partnerships for development
l Commitment to education
l A more diverse and inclusive environment
Culture for sustainability
l Consumer engagement
4 • ABOUT THE REPORT
GRI Content Index
5. 2050 SUSTAINABILITY VISION AMBITIONS
6. ATTACHMENTS
7. ASSURANCE REPORT
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11
13
15
17
18
20
23
23
27
27
28
29
32
33
34
37
37
41
42
43
44
44
47
49
49
51
52
54
56
59
59
61
64
78
82
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2017 ANNUAL REPORT 1. PROFILE
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2017 ANNUAL REPORT Who we are
Natura is the largest Brazilian
multinational in the cosmetics
industry. The company is
committed to generating a
positive social and economic
impact through all its businesses
and brands and in every
region in which it operates.
We reach millions of consumers through diverse channels,
the main one being 1.7 million consultants in Brazil, Argen-
tina, Chile, Colombia, Mexico and Peru. In addition to these
countries, we have physical stores and e-commerce ope-
rations in the United States and France, and we commer-
cialize products in Bolivia through a local distributor. In the
retail trade, we operate through company-owned stores,
franchises run by enterprising consultants and partner-
ships with pharmacy chains. The Rede Natura (Natura
Network), is one of the largest beauty product online sales
platforms in Brazil, and we have already implemented digi-
tal commerce in Chile, Argentina, France and United States.
GRI 102-1, 102-2, 102-3, 102-6
Natura has more than 6,300 employees and in 2014
became the first publicly traded company in the
world to receive B Corp certification. This was renewed
in 2017. The B System movement comprises companies
that attribute equal weight to their financial and their
socioenvironmental results. Natura shares are traded
on São Paulo’s B3 stock exchange.
GRI 102-5, 102-8
In 2017, for the fifth year running, Natura received
the World’s Most Ethical Companies award. This is
granted by the Ethisphere Institute, a global organization
engaged in enhancing ethical business practices.
Our structure comprises administrative headquarters
in São Paulo (São Paulo), plants in Cajamar
(São Paulo) and Benevides (Pará), third-party production
in Argentina, Colombia and Mexico, eight distribution
centres in Brazil and five in Latin America, a logistics
hub in Itupeva (São Paulo) and research and technology
centres in São Paulo and Benevides.
GRI 102-4
We work with a network of partners to promote innovation,
and we strive to reduce the impact of our products
throughout the chain, investing in the use of recycled
materials and in the vegetalization of our formulas, having
reached a rate of 81% to date. Whenever possible, we
combine the best in cosmetic science with the traditional
knowledge of communities engaged in the Brazilian
social biodiversity ingredient chain, having
progressively increased the number of families who supply
inputs for our products. We have also been carbon
neutral since 2007 – meaning we offset all greenhouse
gas (GHG) emissions not only from Natura, but from
our entire production chain – and we invest continually
in measures to reduce our volume of emissions.
Targets have been established for all these areas in our
2050 Sustainability Vision, the first cycle of which will end
in 2020. This Vision is designed to transform Natura into a
company that generates a positive impact.
A TRANSFORMATIONAL COMBINATION
In addition to our multinational operation under the
Natura brand, in September 2017 we took a decisive step
towards becoming a global multichannel, multi-brand
cosmetics group driven by purposes with the acquisition
of The Body Shop.
In February 2018, this group comprising Natura, Aesop
(acquired in 2013) and The Body Shop, adopted the name
Natura &Co. In addition to being highly complementary in
their market strengths, channels and product categories,
these three businesses show remarkable alignment in
the way they do business. They value traceability and
sustainability in the supply of ingredients, the conservation
of social biodiversity, the elimination of animal testing, the
measurement of environmental impacts in the value chain
(including reducing and offsetting carbon emissions),
as well as supporting education.✧
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2017 ANNUAL REPORT
2017 ANNUAL REPORT
Natura
GRI 102-7
Operations in:
Argentina, Brazil, Chile,
Colombia, France, Mexico,
Peru and the United States.
Local distributor in Bolivia.
1.7million
Natura Beauty
Consultants
6,300
employees
Revenue of
7.7billion
R$
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2017 ANNUAL REPORT
Natura &Co
l Natura l The Body Shop l Aesop
18,000
employees
R$
9.9 billion
in revenue
Presence in
72 countries
5
continents
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2017 ANNUAL REPORT 2017 Performance GRI 103-2; 103-3
2017 was an emblematic year
for Natura, with the acquisition of The Body Shop and,
together with Aesop, the formation of Natura &Co. Both
Aesop and The Body Shop saw growth in their results,
while Natura bounced back in comparison with 2016. Total
revenue grew by 7.8% in constant currency, with a 4.5%
increase in Brazil. This positive result in a still challenging
economic conjuncture was most certainly due to the
transformation the company promoted in Relationship
Selling, offering consultants a clearer career path and
gaining market. We resumed our leadership position in key
markets, such as perfumery, body care and gifts.
In the other countries in Latin America, revenue grew by
18% in constant currency, driven by the expansion of the
online channels and by consultants’ performance. Natura’s
Ebitda increased by 23.1% compared with 2016, ending the
year at R$ 1,524.7 million.
The changes we promoted in Relationship Selling in Brazil
boosted the consultants’ productivity rate (it grew 15.2%
in the fourth quarter of 2017 compared with the year ago
period) and also increased share of wallet.
The profit from Crer Para Ver (Believing is Seeing), which
totalled R$ 22.9 million in Brazil and R$ 12.8 million in
the other Latin American countries, is channelled into
educational improvement projects (in Brazil these funds are
managed by the Instituto Natura). Although the proceeds
from this line dropped slightly during the year, due to a
decrease in the average price of the products in Brazil and
softer performance in Latin America, we beat our record for
penetration among consultants, with 28% of them selling
this product line.
In the Pan-Amazon region we achieved our 2050
Sustainability Vision target of generating R$ 1 billion in
business volume by 2020 well ahead of plan, reaching the
mark of R$ 1.22 billion in 2017. Part of this amount goes
towards the purchase of social biodiversity ingredients,
provoking positive economic, social and environmental
impacts and contributing to keeping the forest standing.
Nature net revenue (R$ million) 1
8,200
7,900
7,600
7,300
7,000
7,689.7
7,332.9
2016
2017
1 Taking into account only Natura operations, without Aesop and The Body Shop.
Natura net revenue:1 Brazil and the International Operations
72.8%
Brazil
Net
revenue
R$ 7.7
billion
0.1%
United States
and France
27.1%
Latin
America 2
39.2%
Argentina
Net
revenue
R$ 2.1
billion
14.7%
Chile
12.6%
Peru
19.3%
Mexico
14. 1%
Colombia
1 Takes into account only the Natura operation, without Aesop and The Body Shop. 2 Business in Bolivia is conducted through a local distributor.
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2017 ANNUAL REPORT Income tax due in 2017: Brazil and International Operations 1 2 3
48.1%
Brazil
Income
tax
R$ 184.1
million
51.9%
Latin
America
Income
tax
R$ 95.6
million
69.3%
Argentina
9.5%
Chile
7.6%
Peru
3.2%
Mexico
10.3%
Colombia
1 Takes into account only the Natura operation, without Aesop and The Body Shop. 2 The businesses in the United States and France do not yet have a basis for levying income tax. 3
The disclosure of tax payments per country is part of Natura’s commitment to the B Team Responsible Tax Principles. Read more on page 17.
Our financial statements may be accessed here (in portuguese)
Main advances
Natura’s net revenue grew 7.8% in the year. In Brazil, our sales increased in the last two
quarters of 2017. Additionally, we recovered market share in key categories. Annual growth in net
revenue1 in Brazil was 4.5%; in the other countries in Latin America, it was 18% (in constant currency).
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We transformed our Relationship Selling model in Brazil, with results already apparent,
including a 15.2% increase in consultant productivity in the 4th quarter of 2017 compared with the year ago
quarter. Moreover, average revenue per consultant grew by 17%. The project includes a career path for our
consultants and incentives for their self-development.
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We took a decisive step towards the internationalization of our businesses
with the acquisition of the British cosmetics brand The Body Shop, for 1 billion euros.
Ahead of target, we exceeded our Sustainability Vision
commitment to generate a business volume of R$ 1 billion in the Amazon
between 2010 and 2020 by 22%.
2
4
5 We progressed in the traceability of our chain, achieving UEBT
(Union for Ethical Bio Trade) certification for 100% of the supplier communities in
65 social biodiversity supply chains.
.
Our challenges
In comparison with 2012, the base year for our commitment to reduce relative greenhouse gas (GHG) emissions,
the reduction in 2017 was 0.5%. The goal set forth in our Sustainability Vision establishes a 33% reduction in the relative
indicator (emissions versus products billed) by 2020. In spite of the diverse initiatives aimed at reducing our emissions,
there was a 2% increase in Natura’s absolute emissions in 2017, compared with 2016. The annual growth in relative
emissions was 0.8%. This result reflects our sales mix during the year, which included items generating higher emissions,
as well as sales growth in our International Operations, which intensified product transportation to these countries.
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2017 ANNUAL REPORT Reinforced governance
GRI 102-10; 102-18; 102-19; 102-20; 102-21; 102-23; 102-24; 102-27; 102-29
The formation of the Natura &Co Group included administrative restructuring to ensure
the proper integration and management of the company’s three brands
The corporate governance
structure was adapted to support the
Natura &Co integration. The Natura Board of
Directors was increased to ten members, with its
international character reinforced by the entry
of Canadian Peter Saunders, the former The Body
Shop CEO, who brought with him his knowledge
of the recently incorporated company and his broad
experience in retail and in international markets.
Another important change was the creation
of the position of executive chairman of the Board,
assumed by Roberto Marques. He has been a board
member since April 2016, and has broad international
experience (at companies such as Johnson &
Johnson and Mondelez International). The three
Natura co-founders, Luiz Seabra, Guilherme Leal and
Pedro Passos, continue as co-chairmen of the Board,
with the objective of ensuring a proper balance
between business expansion and alignment with the
company’s purposes and Essence.
In this new configuration, the Board of Directors
has six independent members (who have no direct
link with Natura). The rate of 60% independent
board members goes beyond the São Paulo B3 stock
exchange’s Novo Mercado Listing Requirements,
which recommend a minimum of 20%. Consequently,
the Board draws on a robust mix of knowledge in
areas such as finance, international markets, direct selling,
retail and cosmetics, extremely necessary for the current
stage of the business. GRI 102-22
Further information on the
board members’ curricula HERE.
The changes in governance structure were approved at
an Extraordinary General Meeting held on November 30,
2017. The members’ term of office is one year and may be
renewed upon approval by the Shareholders’ Meeting.
Each of the three Natura &Co companies has its
own CEO and Executive Committee,
guaranteeing the companies’ autonomy:
João Paulo Ferreira and Michael O’Keeffe, who
continue to head up Natura and Aesop, respectively,
and David Boynton, who assumed as CEO of
The Body Shop in December 2017, bringing his robust
international and retail experience to the organization.
Composition of Board of Directors GRI 102-22
• Antonio Luiz da Cunha Seabra
• Guilherme Peirão Leal
• Pedro Luiz Barreiros Passos
Co-chairmen
• Roberto de Oliveira Marques
Executive Chairman
• Carla Schmitzberger
• Fábio Colletti Barbosa
• Gilberto Mifano
• Marcos de Barros Lisboa
• Silvia Freire Dente da Silva Dias Lagnado
• Peter Bryce Saunders
Board members
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2017 ANNUAL REPORT Composition of the Board of Directors GRI 102-22
By age group
By country of origin
0
Up to 45 years
10
Over 45 years
9
Brazilian
1
Foreign
By gender
By time in position
2
Women
8
Men
4
Between one and
three years
1
Up to one year
5
Over three years
>>> Support for management <<<
The Group Operations Committee (GOC) was created
to streamline Natura &Co’s development. It comprises
the CEOs of the three companies, representatives
of key areas (Finance, Human Resources, Strategy and
Business Development, Legal, Operations, Innovation
and Sustainability and Corporate Governance),
in addition to the vice president of Transformation,
Robert Chatwin, charged with oversight of all
matters involving Natura &Co or one or more of the
brands. The GOC is led by the executive chairman
of the Board, Roberto Marques, and is responsible
for encountering dynamic solutions for Natura &Co.
For this reason, the option was made for a structure in
which some members exercise a dual executive function,
maintaining their attributions in the business.
The other four Board support committees are: Strategy,
People and Organizational Development, Corporate
Governance and Audit, Risk Management and Finance.
Further information on the formation and role of the committees here
>>> Natura Executive Committee <<<
The Natura Executive Committee (Comex) is headed
by the CEO, João Paulo Ferreira, and is focused on the
Natura brand in Brazil and in the other countries in which
it is commercialized (Aesop and The Body Shop have their
own executive structures, with a view to ensuring the
necessary focus and independence of each business).
In addition to the CEO, the Natura Comex comprises six
vice presidents. In December 2017, Flávio Pesiguelo
assumed as Vice President of People, Culture and
Management Systems. After heading up Natura’s
technology advances, Agenor Leão was appointed Vice
President for Latin America in January 2018, with the
challenge of accelerating the transfer of technology and
business evolutions from Brazil to the other operations.
The position of Vice President of Digital Technology is
vacant at the moment. Erasmo Toledo, who conducted
the company’s growth in Latin America over the last nine
years, returned to Brazil to assume the function of Vice
President of Direct Selling, with the mission of furthering
the advances made in consultant relations. At the
beginning of 2018, the vice president of Finance and
Investor Relations, José Roberto Lettiere, left the company
after almost three years in the position, during which
time he led important processes for Natura’s growth.
The company is currently seeking a successor (at the
moment the CEO, João Paulo Ferreira, is exercising this
role on an interim basis). In April 2018, Itamar Gaino
Filho assumed the position of vice president of the Legal
area, where his attributions will include supporting
the international expansion of the Natura brand.
For further information about the Executive Committee and to see each member’s CV, click HERE.
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2017 ANNUAL REPORT Risk management GRI 102-30; 102-31
During the course of 2017 the business
areas were mapped in accordance with the risks
identified as priorities at the end of 2016 by the Audit,
Risk Management and Finance Committee, based
on the risk dictionary that was reviewed that year.
Starting from the identification of processes, we mapped
the risks and the controls designed to mitigate them.
Furthermore, we detailed risks related to specific factors,
creating impact and vulnerability measurement criteria
and monitoring indicators. This new modelling is part of
the risk management governance inaugurated in 2017. The
work on risk management in the quality and environmental
areas contributed to Natura’s recertification in the ISO
9001 standard for Quality Management and in the ISO
14001 standard for the Environmental Management System
in Brazil. Risk management and change management
have become indispensible in obtaining recertification.
The entire risk management process is overseen by the
Executive Committee and is monitored by the Board of
Directors through the support committees.
risk
Brand
management
and commercial
model,
including
attractiveness
for consultants
Implantation of
strategy
Innovation
capacity
Main risks monitored at Natura GRI 102-15; 102-34
mitigation measures
We monitor the industry constantly, including the preferences and spending patterns of our
consumers. We focus on projects to develop the commercial model in accordance with our value
proposition and in line with strategic planning, which is reviewed annually. This is the case with the new
sales formats, such as the digital relationship platform (Rede Natura), and the company’s experiences
in the retail trade, including the commercialization of the Sou line in pharmacies and Natura’s own
stores. Furthermore, the company is investing heavily in revitalizing direct selling to ensure the
maintenance of close, high quality relations with the Natura Beauty Consultants.
We review our strategic planning and our short, medium and long-term targets on an annual basis.
This includes investment decisions in acquisitions and holdings, as well as the entry in new markets.
This is an activity that involves all the business units. The strategies and reviews are presented and
discussed by the Executive Committee and approved by the Board of Directors.
We invest continuously in innovation on different fronts: commercial strategy, digital platforms,
product development, logistics network and distribution etc. We maintain rigorous control over
the registration of intellectual property, in particular patents, industrial designs and brands.
These measures also help to mitigate the significant competition from Brazilian and multinational
manufacturers who offer product lines similar to ours and who at times compete within our direct sale
channel.
Research,
development,
manufacture
and product
quality
Natura maintains a constant commitment to customer health and safety, with rigorous internal
processes that range from the conceptual development of the product to its launch. This is
accompanied by a differentiated positioning based on a commitment to truth and transparency.
The company’s Occupational Health and Safety policy is focused on preventing the risks inherent to
its operations. Moreover, Natura maintains an open channel of communication and relationship with
all unions, recognizing their legitimacy in representing the interests of employees in each specific
category, and constantly pursuing understanding and conciliation between the parties.
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2017 ANNUAL REPORT
risk
Interruption of
our information
technology
systems
Main risks monitored at Natura GRI 102-15; 102-34
mitigation measures
Our main IT systems are managed to ensure operational stability. This entails data and server
redundancy, routine information back up, control of access to the systems and continuous monitoring
to detect security vulnerabilities in data banks and infrastructure components. Natura manages
information security in a structured manner, with guidelines set forth in the company’s code of conduct,
ongoing work to drive employee awareness, mapping and addressing all risks and ensuring compliance
with standard ISO 27.002:2013.
Attraction
and retention
of executives
and leadership
development
To drive the engagement and development of leaders, we offer an educational programme, Mosaico,
which comprises coaching, formal training and self-development measures. To ensure recognition and
to retain talent, we offer a remuneration package which is above the market average, the aim being to
share the wealth generated by the company with all employees. Additionally, we review the succession
map annually to ensure the ongoing identification of individuals with the potential to occupy executive
positions.
Climate
change
GRI 201-2
Social
-biodiversity
We seek to ally economic and socioenvironmental gains in our activities. Strategic mitigation projects
permeate the organization and have been incorporated into our routines. An example of this is
the Carbon Neutral programme, which prioritizes the reduction of direct and indirect emissions
throughout the chain, in addition to offsetting 100% of emissions that cannot be avoided.
The use of social biodiversity ingredients is aligned with the Natura Policy for the Sustainable Use
of Social Biodiversity Products and Services, which ensures the fair sharing of benefits with supplier
communities and the sustainable management of the assets, as well as guaranteeing compliance with
Brazil’s new legislation regarding access to genetic heritage. With its Amazônia Programme, Natura
also strives to promote the generation of sustainable business based on biodiversity and traditional/
cultural knowledge. One of the programme fronts, aimed at institutional reinforcement, was engaged
in implanting a project to promote development in the Mid-Juruá region in the Amazon. The initiative
includes a pilot scheme dedicated to risk management that may be extended to the other territories
in which Natura is active (read more on page 43).
Legal, industry
regulation and
tax load
We actively monitor any legal alterations in the civil, tax and/or labour spheres, given the major
impact any legal changes may provoke on our finances, business model and operating results. We
continuously monitor federal and state tax developments and industry activities through membership
of sector associations such as Abihpec and ABEVD.
Permanent monitoring of external risks arising from the economic conjuncture by senior management,
with modifications to strategic planning as necessary.
Permanent monitoring of the political-economic conjuncture in the countries in which Natura
operates, modifying strategy as necessary.
Other external
risks (interest
rates, exchange
rate variations,
inflation etc.)
Institutional
situation
(Brazil and
International
Operations)
>>> Risk control <<<
Natura has an internal risk control matrix based on the
COSO (Committee of Sponsoring Organizations of the
Treadway Commission) framework. This matrix is updated
on an annual basis both for controls related to the Brazilian
operations and to the ones in Latin America.
Additionally, all controls are submitted to effectiveness
tests, and the implementation of plans to remedy any
non-conformance detected is monitored. All the work is
documented and presented to the company’s independent
auditors, who at their discretion, may undertake additional
tests. The results of the tests undertaken by both the
company and the independent auditors are reported to the
managers responsible for the controls and to the Audit, Risk
Management and Finance Committee, which reports to the
Board of Directors.
16
2017 ANNUAL REPORT Ethics and compliance GRI 102-17
For Natura the construction of an equal
and fair society by means of integral conduct in all its
businesses is an ethical principle. In 2017, once again the
company received the Empresa Pró-Ética (Pro-Ethical
Company) seal, an initiative organized by Brazil’s Federal
Comptroller General and the Instituto Ethos to recognize
organizations committed to establishing ethical and
transparent practices throughout their business chains.
For the fifth year running, we were recognized as one of the
World’s Most Ethical Companies by the Ethisp Institute.
This was in recognition of our efforts to promote
an integral and transparent internal environment,
while applying the same principles in our relations with
customers and suppliers. Our Ombudsman service
has been in place since 2006. In addition to receiving
criticisms, praise and suggestions from employees,
suppliers and partners, it is a channel for reporting
possible violations of our Code of Conduct and our
compliance policies (the channel is also open to
consultants and consumers). Reports may be made via
the email ouvidoria@natura.net and via the hotlines
available in all the countries in which we have operations
(with the exception of the United States, where the
process is currently being implanted). The Ethics
Committee, which reports to the Executive Committee,
assesses and decides on all reports that are backed by
evidence, ensuring alignment with the organization’s
commitments and culture. The successful experience with
this channel at Natura, will be replicated with the creation
of similar channels in The Body Shop and Aesop in 2018.
The company has also publicized this channel widely,
underscoring the full guarantee of confidentiality in all the
countries in which Natura operates.
Since 2015, the company has had a statutory Legal and
Compliance area. In 2017, our Code of Conduct, which is
revised annually, was extended to the rest of the world. This
is the first year in which we have implanted a single version
for the entire organization, helping to clarify our positioning
in relation to confidentiality, information security, anti-
competitive behaviour and psychological and sexual
harassment, among others.
The Natura Code of Conduct was revised and published in
Portuguese, English and Spanish for the countries in Latin
America, for the United States and for France. Similarly, our
Anti-Corruption policy has been aligned and is compliant
with the legislation in all the countries in which we operate.
These documents may be accessed through our Investor
Relations website. The revisions of the code were supported
by senior management, which participated actively in
communicating the changes and the associated e-learning
programme for employees.
RESPONSIBLE TAX PRINCIPLES
In February 2018, the B Team established its Responsible Tax Principles, aimed at improving tax practices in companies
worldwide. The B Team is non-profit global initiative comprising a group of companies, civil society organizations and
government leaders whose aim is to promote improved business practices, prioritizing the well-being of people and the planet.
Natura participated in the development and launch of the principles and was one of the first companies to ratify them. Aligned
with this commitment is the idea that modern, inclusive economies depend on fair and effective tax systems that enable
responsible investment and sustainable growth.
The B Team Principles adopted by Natura espouse transparency and responsible tax practices and strategies, including
information about effective tax loads. In line with this commitment, on pages 11 e 12 of this annual report we publish Natura’s
revenues (not including The Body Shop and Aesop) in each of the countries in which it operates, as well as the income tax due in
each of them. Natura intends to extend this commitment to the Principles to its subsidiaries.
17
2017 ANNUAL REPORT 2. STRATEGY
18
2017 represented a landmark
in the evolution of our strategic planning. We were able to
accelerate the execution of our planning, which has already
impacted business performance. We also initiated yet
another transformation in the company by uniting three
strong, pioneering cosmetics brands: Natura, Aesop and
The Body Shop.
With the formation of Natura &Co, we have the opportunity
to consolidate a global cosmetics group comprising
companies whose purposes have been convergent since
the beginning. 2018 will be dedicated to implementing
the group’s governance and management structure. We
intend to foster each operation’s spirit of autonomy and
enterprise while simultaneously promoting a culture of
interdependence aimed at capturing synergies, best
practices and gains in the allocation of resources that will
benefit all the businesses.
Specifically regarding Natura, we will intensify the
implantation of the strategic directives that
produced the company’s robust results in 2017.
We will continue to enhance the Relationship Selling
model, which has already driven greater consultant
engagement and, consequently, gains in productivity
and profitability. We will maintain our focus on the
perfumery, body care and gift categories, as well
as on expanding the multi-channel experience. The
digitalization and convergence of the online and traditional
direct selling models is growing in importance for the
business (it should be noted that the Rede Natura
practically doubled in size for the second year running).
Among our employees, we will proceed with the company’s
cultural transformation, which provided the springboard for
this positive spiral in results.
We are integrating our strategic thinking for Brazil
and Latin America to ensure that all the operations
benefit as rapidly as possible from the advances
developed by the company.
Direct Sale
Revitalization
Multichannel
buying
experience
Repositioning
of the Natura
brand
Digitalization
NATURA
STRATEGIC
PRIORITIES
Strategic
review
of brand
architecture
Strengthening
our position
in Latin
America
Expansion
to developed
and developing
markets
19
2017 ANNUAL REPORT Business model
IN PURSUIT OF
positive impact
At Natura we are seeking to
implant a cyclical and systemic production system that
produces and regenerates itself. We are committed to
generating value and developing technologies inspired
by the regenerative movement in nature until we
become a company that provokes a positive impact.
This means not only offsetting and neutralizing the effects
of our production chain, but also delivering value for our
entire relationship network through our products, services
and commercialization channels.
commitment to reducing socioenvironmental impact in
order to accelerate the achievement of our targets. Some
of these targets depend on technological developments
or are linked with changes in behaviour, such as water
consumption during the use of cosmetic and personal
hygiene products. The fact is that our greatest impact
occurs during the usage phase of our products, in
accordance with the Environmental Profit and Loss study
that quantified our environmental impacts (read more
about the EP&L on page 35).
This involves ethical and fair trade in sourcing raw
materials, on the one hand, and the transformation of
socioenvironmental challenges into more inclusive and
sustainable business opportunities on the other. We build
relationships with communities in the Amazon regions,
incentivizing production chains that keep the forest
standing, while simultaneously generating resources
for traditional communities. In our open innovation
model, Brazilian and global partners share traditional
knowledge, science and design in the development of new
product lines. We work together with suppliers to reduce
the impact of our production, developing a chain that
employs recycled materials such as PET and glass. More
than 80% of our formulas are vegetable (and therefore
renewable) and all the alcohol we use is organic,
produced by methods that conserve the ecosystem.
Our consultants boost the power and the reach of our
concepts and products. Relationship Selling is our way
of conducting direct sales, which is now gaining synergy
through new points of contacts with consumers via the
Rede Natura (our digital platform) and the Natura stores.
This virtuous cycle drives more sustainable values and
behaviours, promoting WellBeingWell throughout the chain.
We still face challenges before we will be able to generate
a positive impact. We need to further strengthen
the connection between business strategy and our
On the other hand, we have progressed in generating
sustainable businesses in the Pan-Amazon region,
in the reduction of greenhouse gas emissions, in inclusion
and diversity in the company, and in promoting
social development measures for our consultants,
among other areas. One challenge in closing the
production cycle is recycling waste, which also depends
on cross-sector collaboration to build recycling chains –
even so, we evolved in reverse logistics for our
packaging in 2017.
We connected with the global agenda developed for
the Sustainable Development Goals (SDG) to assess
the transformational potential of our activities.
And to achieve the scale necessary for our activities,
our brands and sub-brands must become platforms
that contribute to addressing global issues such
as gender equality, biodiversity and climate change.
Portraying this complexity and establishing the targets
to be reached during the course of this journey is what
we proposed in our 2050 Sustainability Vision, whose
initial cycle of ambitions ends in 2020.
All these movements reaffirm our commitment to
sustainability as a principle that shapes the way we do
business and is a differential in our business model. They
also substantiate our long-term vision of generating
a positive impact in every dimension of our activities.
20
2017 ANNUAL REPORT A POWERFUL CYCLE
We strive to structure our activities in a circular manner. Processes are designed
to realize the full potential of all the resources involved to maximize productivity
and reduce environmental impact. It is a model that is self-renewing.
P r o d u c t c o n c e p tion
a n d d e v e l o p m e nt
1
n
c i a l
d i e
e
r
g
t i n
b l e ( 8 1 %
a
t
d
e
g
s ) a
e
o
l V
n s
s
o
o f m a
z
- A m a
g
y i n
s i t
n
a
e
r
n i m a l t
e
P
d i v
b i o
l N o a
e 2 0 0 6
h
g w i t
d / o
g i n
c
s i n
a
n
b l e a
k
c
a
r
l P
u m e
e w a
s
n
n
e
o
t
r
c
d m a
-
t
s
o
p
c l e
e
s
y
c
l Global open
innovation network
that includes
partnerships
with international
organizations
l Around 30% of
the portfolio
renewed
every year
s
t
n
r
i a l
r
R$ 172 million
invested in
innovation
(2.2% of net
revenue)
2
s
u
p
ply
l R
tr
a
e
s
p
o
n
a
rst lin
d U
sible s
bility fr
k in t
o
n
m
E
B
T
h
e
e
r
n fo
rsity
e
t
p
a
h
h
o
e
c
c
c
s
in
c
e fi
ain a
rtifi
cial bio
ts
gistic
rs
% s
s wit
ele
c
tio
c
tiv
l R
tio
div
v
e
e
e
u
h
n
e
lo
2
9
c
olle
u
p
ply,
r
e
G E S
C H A L L E N
im p act fro m carb on e missions,
l R ed uce environ m ental
U P T O 2 0 2 0
exp an d recycling chain
an d define w ater strategy
l Exp an d social
im p actfor our
relationship
l Exp an d A m azonian
netw ork
social biodiversity
b usinesses
** EP&L: in monetary
terms, the
environmental
impact of our
production chain
corresponds to
6.9% of net revenue
Our brands
should engage
consumers in
topics that are
important for
the common good,
defend values and
promote healthy
practices
Conscious
consumption:
product impact
declared to consumers
upon purchase via
Rede Natura
b
r
a
n
d
c
i
m
o
n
o
c
e
l
a
i
c
o
s
t
n
e
m
n
o
r
i
v
n
e
ic
m
i r o n m e n t
v
n
e
social
economic
e
n
vir
o
n
m
e
n
t
s
o
c
i
a
l
Our
essence:
E
WellBeing
well being well
Well
e
c
o
n
o
m
i
c
e
n
v
i
r
o
n
m
e
n
t
l
s
5
u
,
3
b
t
i
p
0
o
p
h
s
t
d
r
o
i
v
l
y
i
0
f
n
a
l
1
8
f
r
e
u
e
w
g
r
o
a
h
P
%
r
g
m
s
i
t
s
o
e
ili
r
a
m
o
e
n
g
-
t
h
f i
i
o
A
n
e
d
s
y
i
c
i
s
s
u
h
s
n
i
t
p
a
p
a
l
m
p
n
*
u
t
s
a
z
o
n
u
i
n
t
s
a
b
l
e
More than R$ 1.2 billion in
business volume generated
in the Amazon since 2010
Carbon neutral
throughout the
value chain.
Programme seeks
to reduce GHG
emissions as well
as offsetting them
3
n
o
i
t
c
u
d
o
r
d p
n
n a
atio
transform
so
cial
ec
o
n
omic
of leadership
30% leadership
positions occupied
by women and 6.1%
of disabled people
in the work force
o
n
eco
social
environment
e
x
p
e
r
i
e
n
c
e
5
l 1.7 million
consultants
in Latin America
l 26 Natura stores
l Rede Natura:
digital platform
with 3 million
customers
l Products in
3,400 pharmacies
On average,
850 different
items produced
for each
sales cycle
l Plan to
increase wealth
generation
for consultants
(whose income
grew by 17%
in 2017).
l Education
platform for
consultants
l Review of
logistics network
and new
distribution centres
installed in
recent years.
l Experiments with
electric vehicles for
cargo transportation
relationship selling in multip l e c h a n n e l
s
4
* In proceeds from sales.** EP&L (Environmental Profit and Loss) converts environmental impacts into monetary values.
21
2017 ANNUAL REPORT
Main indicators
Economic (R$ million)
Net revenue 1
Ebitda 1
Consolidated net income 1 2
Free cash generation 1
Average daily volume of shares traded 3
Business volume in the Amazon to date from 2011 (in R$ million)
Wealth distribution (R$ million)
Capital provider 2
Natura Beauty Consultant
Employees
Suppliers
Government
Environmental
Relative GHG emissions (kg CO2e/kg product billed) 4 5
GHG emissions in the value chain (tCO2e)5
Water consumption Brazil (l/unit produced)
% post-consumer recycled material in finished product packaging — Brazil
% of eco-efficient packaging Brazil 6
Vegetalization rate in formulas (% of total mass)
Raw materials originating in Pan-Amazon region (% in relation to R$ million)
Social
Crer Para Ver (Believing is Seeing) revenue (R$ million) 7
Families benefiting in Pan-Amazon supplier communities
2016
2017
7,912.7
9,852.7
1,256.5
1,741.9
308
470
39
973
2016
308
4,430
1,327
6,512
2,009
2016
3.17
670
617
46
1,222
2017
670
4,579
1,836
8,046
2,000
2017
3.20
303,424
308,048
0.53
4.3
20
83%
19.1%
2016
38.2
2,119
0.53
4.6
21
81%
18.1%
2017
35.7
4,294
1 Consolidated Natura &Co (Natura, Aesop and The Body Shop) indicators. 2 Takes into account net profit attributable to controlling shareholders and the
participation of non-controlling shareholders. 3 Source: Bloomberg. 4 CO2e (or CO2 equivalent): measure used to express greenhouse gas emissions, based
on each one’s global warming potential. 5 Includes GHG Protocol scopes 1, 2 and 3. 2017 inventory audited by KPMG. 6 Packaging at least 50% lighter than
regular/similar packaging or comprising 50% post-consumer and/or renewable non-cellulosic materials that do not increase mass. 7 Includes proceeds
from Brazil and the International Operations.
22
2017 ANNUAL REPORT Multichannel Natura
>>> Relationship Selling growth plan <<<
The direct selling model
is one of our major strengths. Currently we have
1.7 million Natura Beauty Consultants, of which 1.1 milion
in Brazil alone. Whenever necessary we review our
relationship with this stakeholder group, as well as
the value proposition we offer them. In the most recent
modification, we sought to revive the essence of the
direct sale model adopted by Natura, opting to rename
it Relationship Selling. The change took into account
the importance of the link between the consultants
and the consumers of our products for our business.
After a stage in which we listened to consultants to
understand their needs and aspirations, in 2017
we undertook a major revitalization in Relationship
Selling with a value proposition based on three
principles, Purpose, Belonging and Prosperity
(in Portuguese called the 3 Ps) and a growth plan
aimed at increasing average remuneration.
This new model offers diverse opportunities in direct
selling in accordance with each consultant’s profile.
These are: Natura Beauty Consultant, Business Leader,
Beauty Entrepreneur or Business Development Manager.
In this model the consultants have five levels
of progression – seed, bronze, silver, gold and
diamond – and ascension is linked solely with
individual performance. At each new level,
the percentage the consultant earns from sales
increases, as does her average income. Natura also
offers improved payment terms and a series of benefits,
such as courses, prizes and recognition measures.
Upon reaching the silver category, the consultant may
opt for a new career path, that of Natura Business
Leader. While continuing to work in consulting,
she also starts leading a group of consultants,
providing support in their day-to-day activities,
presenting them with new products and advising them
on how to develop their business. The leader substitutes
and enhances the role formerly played by the
Natura Consultant Advisor (NCA). The new format
promotes entrepreneurship among the consultants,
offering them more incentives to act as advisors to their
colleagues. During the implementation of the
new Relationship Selling model, we conducted an analysis
with each NCA to identify which of them would fit the new
profile proposed for leaders. Those considered unsuitable
were invited to focus on consulting.
Another possible career path is Beauty Entrepreneur
(further information in the following box). All these
options permit the consultants to choose their
own professional path, in accordance with their
ambition and talent.
The model also establishes the role of Natura Business
Development Manager, a group of Natura
employees who work in the sales force and whose role
was also modified. They oversee the work done by the
leaders, in addition to being responsible for training
new consultants.
The strategy was focused on improving the quality
of our network in Brazil, resulting in increased
productivity for the consultants, whose average annual
income grew by around 17% (for leaders, the increase
was more than 60%). Tracking consultants’ performance
on a daily basis and the results of our satisfaction
and loyalty surveys demonstrate that the model
was well received. Its introduction did, however, lead
to a reduction in the size of the consultant network in 2017
(see the following numbers).
The transformation to the Relationship Selling
model is already being implemented in Chile. In 2018,
we should extend it to the other operations in Latin
America. In these countries, the number of consultants
continues to grow. The total was 589,000
in 2017, particularly worthy of note being Mexico.
Inspired by the desire to make a difference in the
lives of our consultants, we also have a
programme focused on their self-development,
which is extensive to the consultants’ families.
This is based on monitoring the Human Development
Index (HDI) for consultants (further information in
Positive social impact, on page 49).
23
2017 ANNUAL REPORT BEAUTY ENTREPRENEUR
We also offer our consultants the opportunity to become Beauty Entrepreneurs, which involves opening Aqui Tem Natura
franchises. This is one of the career options for consultants who have been active in Relationship Selling for at least one year
and who have reached diamond level. The option is designed for consultants who have been successful in selling our products
and who are given the opportunity to receive support from Natura to develop their business in line with our proposition and
our Essence.
We ended 2017 with more than 50 stores aligned with this model. Located on shopping streets and in galleries, they stock the
complete portfolio of Natura products. Promoting entrepreneurship among our consultants is one of the
priorities of the Natura 2050 Sustainability Vision, along with increased average income targets, incentives for learning and
promoting health. Development is also encouraged through the Movimento Natura (Natura Movement), which recognizes
social transformation initiatives undertaken by the consultants in their communities (read more on page 50).
Revitalization of Relationship Selling
NATURA BEAUTY CONSULTANT
BUSINESS LEADER
BEAUTY ENTREPRENEUR
Consultants Brazil (in thousands)
Natura Beauty Consultant
Business Leaders 1
1 The business leaders substituted the Natura Consultant Advisors (NCAs).
Consultants International Operations (in thousands)
Argentina
Chile
Colombia
Mexico
Peru
Total
NCAs International Operations 1
Chile
Peru
Colombia
Total
2015
1,377
9.5
2015
139.6
72.7
71.9
130.4
90.5
506.5
2015
747
1,084
439
2,270
2016
1,256
8.3
2016
161.2
74.3
87.8
125.8
94.0
545.5
2016
681
901
691
2,273
2017
1,084
5.2
2017
170.9
73.4
96.7
160.6
87.4
589.0
2017
420
845
719
1,984
1 In the International Operations there are more countries that use the NCA (Natura Consultant Advisor) model.
24
2017 ANNUAL REPORT
>>> From the viewpoint of the consultants <<<
GRI 102-43, 102-44
The transformation of the Relationship Selling model took
place in October, after the conclusion of some pilot projects.
By the end of 2017, the Brazilian consultants had already
recognized the positive impacts of the changes, which
influenced our loyalty index. Comprising three indicators
(satisfaction, intention to continue their relationship with
Natura and recommendation), the score was the highest
ever. Consultant loyalty increased from 31.2% in 2016 to
33.9% in 2017, worthy of note being the indicator that
measures intention to continue the relationship with the
company. Although there had been a slight reduction
from one year to the other, the indicator that measures
satisfaction with the commercial terms offered by Natura
grew by 9%, especially among consultants in the southern
region and in the states of São Paulo, Rio de Janeiro and
Espírito Santo.
There was, however, a decrease in the loyalty rate among
leaders – from 31.7% in 2016 to 23.2% in 2017, which
demonstrates the need to adjust certain aspects of the
model, particularly ensuring full comprehension of the role
this group is expected to play.
In our International Operations, the loyalty index was 43.1%.
This was 5% above target, worthy of note being Argentina
and Mexico, which had the best results with 52% and 49.6%
respectively. Among the NCAs/leaders, loyalty increased
significantly in Chile and in Colombia.
Consultant loyalty index — Brazil (%) 1
Satisfaction 2
Loyalty 3
Leader loyalty index — Brazil (%)
Satisfaction 2
Loyalty 3
2015
93.3
29.8
2015
92.8
29.5
2016
93.1
31.2
2016
94.6
31.7
2017
92.6
33.9
2017
84.2
23.2
1 Source: Ipsos Institute. 2 Satisfaction is the percentage of consultants and leaders who are “completely satisfied” or “very satisfied” (Top2Box). 3 Loyalty:
percentage of people consulted who gave the top score (“Top1Box”) on a scale from 1 to 5 points, in the three aspects: satisfaction, intention to continue the
relationship with Natura and recommendation.
Consultant loyalty index — International Operations (%) 1
Satisfaction 2
Loyalty 3
NCA loyalty index 4 — International Operations (%)
Satisfaction 2
Loyalty 3
2015
93.0
37.3
2015
95.3
52.4
2016
94.0
37.4
2016
96.3
53.3
2017
95.7
43.1
2017
97.2
56.3
1 Source: Ipsos Institute. 2 Satisfaction is the percentage of consultants and leaders who are “completely satisfied” or “very satisfied” (Top2Box). 3 Loyalty:
percentage of people consulted who gave the top score (“Top1Box”) on a scale from 1 to 5 points, in the three aspects: satisfaction, intention to continue the
relationship with Natura and recommendation. 4 In the International Operations there are countries that still use the NCA (Natura Consultant Advisor)
model.
Average
annual income
consultants
and leaders -
Brazil (R$)
30
20
10
0
Consultants
Leaders 1
29,803
17,614
18,428
4,161
4,028
4,728
2015
2016
2017
25
1 In addition to the improvements in the
model and in sales performance, the
increase is explained by the redesign of the
leaders’ (former NCAs) activities, which led
to a reduction in the total number of leaders.
Consequently, those remaining had a larger
group of consultants to supervise, elevating
their average annual income.
2017 ANNUAL REPORT >>> Training platform <<< GRI 404-2
With the introduction of the Relationship Selling
model, we developed a new training strategy
for the Natura Beauty Consultants. In 2017, we invested
in behavioural training programmes, in addition
to maintaining the focus on functional topics
and product knowledge. We launched more
than 50 new virtual training courses and worked on
improving the consultants’ experience, with
the migration of the training menu to
the consulting application. We also provide specific
courses for different consultant profiles, such as makeup
and perfume specialists.
Through a partnership with a French institution, we offer
a course with international certification in perfumery.
As was foreseen, the changes in the model led to
a decrease in the number of consultants receiving
classroom training from Business Development
Managers. To reinforce face-to-face training we created a
specialized group consisting of 40 instructors in 12 regions
around Brazil. These instructors deliver programmes
ranging from product workshops to functional and
behavioural courses for Beauty Consultants. We also
increased participation in virtual courses offered via
the website and mainly via the consulting application.
Training delivered over these two platforms increased by
28% compared with 2016. In total, we recorded more than
1.9 million training sessions (virtual, face-to-face and led
by external specialists) – beating the company’s global
target by 12.2% (read more on page 111).
>>> Tribute to consultants <<<
In 2017, our 1.1 million Brazilian consultants saw themselves
represented on TV by the actress Mariana Xavier, who
played a Natura Beauty Consultant in the soap opera A
Força do Querer, aired by Rede Globo between April and
October. This was the first time that a merchandising
action extended beyond the programme script.
The character Abigail lived on in digital content on the
channel’s website after the soap opera had ended. To
develop the character, the actress spent time with Natura
Beauty Consultants in order to learn more about them
and their work routines. Another tribute was the creation
of Natura Beauty Consultant Day, commemorated on
September 22 . A number of actions were organized
on the date, such as promotions and an event on
entrepreneurship promoted by the Chronos brand at the
Casa Natura Musical, in São Paulo, and transmitted live to
the whole of Brazil, in partnership with Editora Abril.
The project also included the engagement of all the
Natura areas in the largest communication plan ever
undertaken in the consulting area, part of our effort to
forge closer links with consultants and to stimulate their
passion for the activity, as well as to attract new talent to
the consultant network.
>>> Head first into digitalization <<<
Increasingly our Relationship Selling model is being
supported by digital transformation. We encourage
consultants to create their own pages on the Rede
Natura, which facilitates consulting work and the sale
of our products via e-commerce. They also use the
Consulting application for mobile phones with a series
of features that support face-to-face sales.
These two resources were created to promote
business and income for our consultants. In Brazil,
we now have 163,000 consultants who have their
own pages on the Rede Natura, while 586,000
use the Consulting app for mobiles.
In 2018, we will continue to work on the convergence
of the platforms to facilitate Relationship Selling in
person and in the virtual world. We are encouraging
the integration of consulting work with the
unification of our registration base and the
commercial models. In 2017, we increased the number
of features available on our digital tools. The Natura
application for consultants enables access to all the
information necessary for consulting work – face-to-face
and online sales –, as well as a series of training programs.
Other recently incorporated features are the
possibility of viewing purchase statistics and the number
of accesses to the consultants’ pages on the Rede
Natura, as well as messaging to congratulate customers
on their birthday or to recommend the acquisition
of Natura products. There is also a tool that permits
consultants to transmit orders to Natura via audio.
For Business Leaders and Business Development
Managers, the application contains an option
for organizing relationship events and actions.
26
2017 ANNUAL REPORT
EASY EXCHANGE SEAL
Although the company has always offered customers the option of exchanging Natura products via the 0800 hotline and
online chat, a survey among Brazilian consumers showed that part of them were unaware of this service. This would frequently
mean that customers would not choose a Natura product as a gift for someone. After conducting tests in the city of Guarulhos
(São Paulo) in 2016, and in the city of São Paulo and other regions in Greater São Paulo in 2017 for Mother’s Day and Valentine’s
Day, we officially launched the easy exchange seal nationwide in time for the 2017 Christmas season.
Now the consultant can put the exchange seal on the product, filling out the date on which the consumer bought it. The seal
has the address of the website where the consumer can obtain information about exchanging the gift, as well as the location
of consultants who will perform this exchange (this is an activity which the consultant must register for) or the closest Aqui Tem
Natura franchises. It is still possible to exchange Natura products directly via our 0800 number and chat channels.
>>> Expansion of the Rede Natura <<<
The Rede Natura (Natura Network), our online sales
channel and digital relationship platform continues to
grow, consolidating its position as yet another option for
acquiring Natura products in the practical and convenient
manner associated with digital media. Launched three
years ago, revenues from the platform grew by 80% in
2017, or six times higher than the market average.
The platform already serves more than 3 million
customers, of whom 50% access it via mobile devices
(smartphones and tablets). Currently, around 20%
of the revenue from the platform comes from
purchases made via the Rede Natura application.
In Brazil, the Rede Natura permits consumers to buy
directly and also provides consultants with a space
for their own virtual store, with an exclusive webpage
and customer relationship tools. The platform has
also been adopted in Chile and in Argentina. In 2018,
it should be extended to the other countries in Latin
America in which we have operations. We also sell
our products via e-commerce in the United States and
Europe – orders to the European continent are fulfilled
by our operation in France.
Our digital strategy has elevated Natura to fourth place
among global cosmetics brands with the highest traffic
in digital channels, according to Similarweb (an online
market intelligence platform), in the process facilitating
access to young, urban consumers and classes A and B.
>>> Participation in retail <<<
Attentive to the demands of different consumer profiles, we
inaugurated our retail presence in 2015, commercializing
certain products for daily use in pharmacies. In 2016, we
launched the first Natura stores in Brazil and have been
growing in this channel ever since.
In April 2018, we had a total of 26 Natura stores.
They are located in Buenos Aires (Argentina), Santiago
(Chile), New York and New Jersey (USA), Paris (France)
and in shopping malls in the states of São Paulo and
Rio de Janeiro. Based on the learning acquired,
we have continued to enhance the model and to
develop our expansion plans.
After starting in the North American market with the Ekos
line, in 2017 we introduced Chronos. The signature Natura
Brasil has been added to the product names, attesting to
and valuing their Brazilian roots.
In Paris, we maintained our space in the charming Marais
district and inaugurated a second store last year in the La
Defense commercial centre. Our portfolio in France includes
the Ekos, Chronos and Mamãe e Bebê lines. The three
brands may also be found in large department stores and
are commercialized via the e-commerce operation,
which serves other European countries, too.
With support from Aesop and The Body Shop, brands
which now make up the Natura Group, we expect
to intensify our learning in the retail channel.
And we also envisage other opportunities for synergies,
for example, in distribution channels.
OUR PRODUCTS IN PHARMACIES
We continue to increase the number of pharmacies
commercializing the Sou product line. In 2017, we started
working with the following pharmacy chains: Drogaria
São Paulo (São Paulo), Pacheco (Rio de Janeiro), Panvel
(Rio Grande do Sul), Araújo (Minas Gerais), Clamed (Santa
Catarina) and Extrafarma (Pará), and we consolidated our
presence in the RaiaDrogasil chain.
The products are now available in a total of 3,450
stores. During the year we also began to commercialize
Natura Faces products in 90 RaiaDrogasil stores in São
Paulo and Rio de Janeiro. On another action front, we
are commercializing our makeup line at seven Renner
department stores, located in São Paulo and Porto Alegre,
as well as via the chain’s e-commerce operation.
27
2017 ANNUAL REPORT Digital technology
as a business enabler
Digital technology is growing in importance
for our business, not only as a commercial tool but also
as a driver of advances in a series of Natura processes.
In 2017, we were able to apply the “agile way” of
managing projects and initiatives – intrinsic to technology
– to other company areas, such as product development
and logistics. This enables us to innovate more and to
do it more effectively, working faster and exploiting
the multi-disciplinary inputs from all the people and
audiences involved.
Digital technology had a powerful influence on
the transformation to our Relationship Selling model
and management of sales force routines, based on
the co-creation of solutions with the commercial team.
It is our intention to replicate the learning from this
process in other areas of the company.
We are investing in solutions that use disruptive
technologies, such as augmented reality, the internet
of things, bots, machine learning and artificial
intelligence. These technologies enable the
construction of new services, such as the individualization
of CRM (Customer Relationship Management) actions,
with the intelligent recommendation of products in
accordance with the customer profile and context.
Additionally, we have launched a number of industry
4.0. initiatives. And to enhance essentially
administrative processes such as those in the People
Management area – in 2017, we started using an
application through which staff can check on diverse
types of information and services related to their
daily routines (company news, pay slips, 360º feedback,
benefits, among other functionalities).
We are also consolidating a new way of working which
includes partnerships with startups and universities, as
well as mobilizing different teams in cross-disciplinary,
non-hierarchical projects. All of these investments will
be maintained, since they drive gains in productivity and
reductions in costs and losses for Natura.
28
2017 ANNUAL REPORT Sustainability
as driver of innovation
At the end of 2016, we integrated the
innovation, sustainability and marketing areas
under a single vice president, aimed at reinforcing
the Natura way of promoting innovation. We continue
to invest in developing products that ally high
technology, the sustainable use of social biodiversity
ingredients and disruptive brand concepts, in addition
to listening to what our customers want.
We also continue to enhance the structure of the
innovation team. For example, we centralized
the product research, creation and packaging areas
under the same director, boosting connectivity
between ideas and ensuring a less bureaucratic,
more streamlined process.
In 2017, another major step was taken in biotechnology
and the consolidation of the omic sciences
(genomic, proteoic and metabolomic), which
enable the simultaneous study and mapping
of diverse active ingredients. This enables faster
confirmation of the ingredients being
researched at a lower cost. We have research
centres located in the Cajamar (São Paulo) and
Benevides (Pará) units.
The changes have had a positive effect on the speed
of our new product development process.
This is evident in the 7.5% growth in our innovation
rate, which increased from 57.1% in 2016 to 64.6% last year.
In 2017, 13 patents were granted to Natura.
Innovation
Investment (R$ million)
Number of products launched 1
Innovation rate (%) 2
2015
221
220
n.a.
2016
188
255
57.1%
2017
172
213
64.6%
1 Covers products that offer consumers a new value proposition, including new packaging and formulations. 2 The innovation rate is calculated by adding
the gross revenues for the last twelve months from products launched in the last 24 months over the total gross revenue for the last 12 months. Only takes
Brazil into account.
>>> Wealth of Brazilian social biodiversity <<<
The products we develop based on Amazonian social
biodiversity ingredients are the result of years of field
research and laboratory tests conducted by the members
of our innovation team. From the beginning of research
to prove the effectiveness and to ensure the safety of a
new input to the development of the supply chain and the
launch of a new product takes between three to five years.
the plant (leaf, fruit, stalk) containing the cosmetic benefits
are identified, as is the most effective means of extracting
them (oil, butter or another presentation). After this, Natura
develops the formula for the product. In parallel, the
company drafts the future marketing plans for the product
and initiates training for the families who will supply the
active ingredient.
After identifying the potential use of the ingredient, we seek
to acquire it from the agro-extractivist community that
produces it. Only then do we begin scientific tests on the
ingredient. Genomic studies are conducted to ensure the
complete characterization of the plant and understanding
of which compound generates the benefit indicated
previously by traditional knowledge or the scientific
bibliography. The molecules are analyzed and the parts of
The supplier communities are remunerated for each of
the social biodiversity active ingredients employed in our
portfolio, beginning with the community from which the
traditional knowledge originated or the one from which
we acquired the ingredient at the research stage. From
this point, these communities are considered to be genetic
heritage locations. Our relations with these communities
are shaped by the Policy of Sustainable Use of Social
29
2017 ANNUAL REPORT Biodiversity Resources; they are also in compliance with
Brazil’s new Biodiversity Law (read more on page 48).
extracted from Brazilian biodiversity.
Our focus is on leveraging the wealth of the country’s
biodiversity. For example, our perfumes are the result
of a blend of around 2,500 ingredients employed in the
perfumery industry worldwide with 20 unique essential oils
A case in point is the Ekos Patauá product line. One of the
main novelties in 2017 was the launch of six hair products
that use the potential of oil extracted from patauá to
strengthen and accelerate the growth of the strands
(further information ahead).
THE PATAUÁ CHAIN
For many generations, women who live in the Chico Mendes Extractivist Reservation, a federal conservation unit in Acre crea-
ted in 1990, have used the oil from a rounded fruit common in the region on their hair. This is patauá, known for strengthening
the hair and speeding up growth.
Inspired by this traditional knowledge, we acquired the fruit from this Amazonian palm tree in the municipality of Cametá, in
the Lower Tocantins region of the state of Pará, where we work with communities that supply açaí, murumuru and ucuuba. We
conducted the genetic mapping of the fruit and upon obtaining positive results, we identified the best way to store the fruit in
order to maximize the quality of the oil.
After being frozen, the patauá is transported by boat to the Cofrutas cooperative or to a Natura partner, Beraca, where the
oil is extracted and sent to our factory in Cajamar (São Paulo), where it is transformed into the six Ekos Patauá line products.
Respecting the plant’s natural cycle, in 2018 we will prepare new families to supply Natura with patauá.
>>> Main launches <<<
Like the Ekos Patauá line, the main novelties
in our portfolio in 2017 reflected the Natura way of
innovating which, whenever possible seeks to ally
the best in cosmetic science with active ingredients
from Brazilian social biodiversity. The Natura Homem
line was completely reformulated, with the relaunch
of 12 products using a new fragrance and more
biodiversity active ingredients. The brand was also
repositioned, based on research into the behaviour
of contemporary man and the infinite possibilities
of exercising masculinity.
The Natura Chronos line gained a Revitalizing
Concentrate based on sapucainha (Carpotroche
brasiliensis) and polyphenols, the first product
with an exclusive anti-pollution and anti-stress
technology which repairs the damage caused by
these external factors, stimulates the skin’s natural
defences and slows down the emergence of wrinkles,
blemishes and flaccidity. We also launched Una CC
Nude Me, a multifunctional cosmetic that corrects
dark circles under the eyes and worry lines, prevents
early aging and, thanks to DetOx+ technology,
revives the natural luminosity of the face.
In the TodoDia line, worthy of note was Hidratante Corporal
Sorbet (Sorbet Body Moisturiser), which can be stored in
the refrigerator and increases the sensation of freshness
when applied to the skin. In the Kaiak line, we launched K,
with a differentiated, intense fragrance for men. The scent
has woody notes and remains on the skin for up to 10 hours.
COMMITMENT TO CONSUMER SAFETY
GRI 103-2; 103-3; 417-1
Our formulations only use products and ingredients that
have been proven to be safe, always in compliance with
international laws, standards and good practices. Our
researchers stay abreast of scientific discussions on the use
We adopted rice and bamboo-
based biodegradable exfoliants
to substitute polyethylene
microbeads — which end
up in rivers and oceans
30
2017 ANNUAL REPORT of ingredients, in particular those considered controversial.
When there is evidence that a substance presents a risk
to the environment or human health, we substitute it in
our formulations, even when this is not a legal requirement
in the countries in which we operate. We have already
eliminated triclosan, parabens and phthalates from our
portfolio. In 2017, in line with guidance from the European
Union prohibiting the use of MIT (methylisothiazolinone), we
started to eliminate the substance from our non-rinsable
products. GRI 102-11
We also stopped employing polyethylene microbeads as
exfoliating agents in products under development and
eliminated the material from our rinsable
products, substituting them with biodegradable
exfoliants based on rice and bamboo.
The decision was taken because regular sewage
treatment systems are incapable of retaining the
microbeads, which end up in rivers and oceans.
The Natura product packs provide information
on the third-party manufacture of product components;
substances that can generate environmental impacts;
safe use and proper disposal of products; and an
indication of the recommended number of times a pack
may be refilled, among other data.
RESPECT FOR ANIMALS
In 2006, we were the first company in Brazil to completely eliminate animal testing in our products, a decision based on our
beliefs and values. Since 2008, we have been on the Projeto Esperança Animal (PEA) list, which publishes an annual list of Bra-
zilian companies that do not conduct tests on animals.
31
2017 ANNUAL REPORT 3. GENERATING
A POSITIVE
IMPACT: PATH
TO 2050
32
Integrated management
The Sustainability Vision is aimed
at transforming Natura into a company that generates
a positive impact by 2050. This means that in addition
to reducing and mitigating the effects of our activities,
we want to promote a positive social, environmental,
economic and cultural impact. Constructed based
on a long-term orientation, the Sustainability Vision
contains intermediate commitments and targets,
with the first cycle ending in 2020.
We have had some important achievements in the three
years since this strategy was implemented, such as value
generation for the Pan-Amazon region, where business
volume exceeded R$ 1.2 billion in 2017, beating the target
established for 2020. We also progressed in managing
the communities in the Pan-Amazon region, in reverse
logistics, in the valuation of environmental externalities,
in promoting the social and human development of our
consultants, suppliers and surrounding communities, and
in strengthening company culture, among others. In some
public commitments, however, we have identified the need
to step up our efforts in order to achieve targets. Areas
such as climate change, increasing the percentage of eco-
efficient packaging, the human and social development of
our main stakeholder groups, as well as the empowerment
of consumers in relation to our causes, are some of the
company’s priorities for 2018.
We are engaged in assessing and evolving the
Sustainability Vision to establish new commitments for the
period from 2020 to 2030, and we will continue to develop
Natura’s business-related strategic agenda.
Status of the 2050 Sustainability Vision ambitions
on target or already achieved
on schedule
behind schedule
Topic
Ambition for 2020
Management model
Brands
Integrated management
Ethics and transparency
status
Reduction of environmental impact
Sustainable social biodiversity businesses
Government and society
Governance for sustainability
Climate change
Energy
Waste
Packaging
Water
Social biodiversity
Formulations
33
Relative emissions
Offsetting emissions
Recycled material
Recyclable material
Eco-efficient packaging
Supplier communities
Business volume
Industrial park
2017 ANNUAL REPORT Status of the 2050 Sustainability Vision ambitions (continued)
on target or already achieved
on schedule
behind schedule
Topic
Ambition for 2020
status
Positive social impact
Natura Beauty Consultants
Communities
Suppliers
Supply chain
Employees
Consumers
Average income
Educational actions
Consultant HDI
Entrepreneurship
Human development
Territory strategy
Women leaders
Disabled people
Engagement
Culture for sustainability
Stakeholder engagement
SEE OUR AMBITIONS IN DETAIL ON PAGE 78.
Performance management
We remain committed to
monitoring our activities, including the different stages
of the product life cycles and the impacts we provoke on
employees, consultants, consumers, suppliers and members
of the supplier communities, as well as the environment.
Using the United Nations Development Programme’s
(UNDP) Human Development Index (HDI) as a reference,
we created our own HDI which has measured
the year on year evolution in our consultants’ living
standards since 2014.
We also manage territories, including the communities
surrounding our operations and the families
supplying Pan-Amazon social biodiversity
active ingredients.
The knowledge accumulated in the course
of these years of continuous monitoring is
employed in measures aimed at
conserving natural resources, reducing environmental
impacts and developing our stakeholder groups.
All these metrics are linked with performance
targets and public commitments assumed
to drive progress in the 2050 Sustainability Vision.
34
2017 ANNUAL REPORT >>> Socioenvironmental accounting <<<
EP&L (Environmental Profit and Loss) is
a methodology that measures the positive and
negative impacts of all the phases of production,
commercialization and disposal of an organization’s
products in monetary terms. Four years ago, we
initiated a project to measure and disclose how our
activities impact nature and, consequently, people’s
well-being. Thus, Natura is part of a group of
companies that is in the forefront of knowledge related
to impact measurement worldwide. We intend to
influence other organizations to engage in this
movement so that they may evolve in their metrics and
in managing their business chains. The calculation
takes into account the volume of solid waste generated,
land use, consumption and pollution of water, as
well as emissions of greenhouse gases and other
atmospheric pollutants.
We want to transform the EP&L into an applicable
management instrument. Our first calculation
was based on 2013 data. Today we have identified
results up until 2017 and have projections for the coming
years. Assessing this period, we have established that
there has been a gain in efficiency in relation to
environmental impact and net revenue, with a 1.6
percentage point variation since 2013. In 2017, our
externalities (the impact generated) represented 6.9%
of Natura’s net revenue.
It should be understood that the performance of these
numbers is also affected by our financial result
and by the lower production volume compared with
2013. We know that the impact valuation methodologies
are still evolving, but we believe that we are on a
path that will substantiate Natura’s desire to make a
difference in the world.
With the visibility afforded by these numbers, we will
continue to reduce our negative impacts and leverage
our positive effects by means of our carbon, waste
and water footprint programmes. With the Carbon
Neutral programme alone, the organization has made
a contribution of almost R$ 1.4 billion over the last ten
years. This takes into account aspects that include human
health, community development, ecosystem services and
climate change. What this means is that offsetting carbon
emissions through support for forestry, energy efficiency,
renewable energy and waste treatment projects not only
mitigated the company’s emissions but also generated
environmental and social benefits.
NEW CHALLENGES
We want to increase the importance of the valuation
of externalities in future business decisions, as well as
using it as an instrument in Natura’s accountability and
transparency.
We are aware that the product usage phase is the biggest
challenge presented by this calculation, which takes into
account energy and water consumption by consumers and
is a key factor in society’s consumption habits.
Our next step will be to implant a similar pioneering
methodology focused on the social sphere. This means
we will incorporate the valuation of our contributions and
impacts on the social development of the communities with
which Natura maintains relations, such as the generation
of employment and the stimulation of entrepreneurship
among employees and consultants, among others. Certain
social aspects have already been taken into account in
analyzing the co-benefits of the company’s Carbon Neutral
Programme and these will now be extended to the entire
Natura process and its value chain.
Valuation of environmental impact
2013
2014
2015
2016
2017
8.6%
7.7%
7.3%
7.3%
6.9%
-0.8 p.p.
-0.4 p.p.
-0.1 p.p.
0.3 p.p.
Cumulative
variation
from
2013 to 2017
-1.6 p.p.
Impact of externalities (R$)/
net revenue (R$) 1
Variation compared
with previous year
(percentage points)
8
6
4
2
0
-2
1 To correct the amounts over the course of the years, global economic growth and the increase in the concentration of greenhouse gases in
accordance with IPCC (Intergovernmental Panel on Climate Change ) data from 2014 were taken into account.
35
2017 ANNUAL REPORT
CALCULATOR PROJECTS IMPACT
Since 2010, a mandatory stage in the Natura innovation process has been the use of a tool called an environmental
calculator. This digital system uses information about packaging and formulas to calculate the environmental impact
a product will have while it is still at the development stage.
In conjunction with other factors, the results indicated by the calculator are used to decide whether the company will
proceed with or interrupt the product development process, enabling researchers to make more conscious decisions
about the choice of inputs. The decision on whether or not to develop the product also takes into account other
business factors and the availability of resources, among other requirements.
At present the calculator is supported by LIMS (Laboratory Information Management System) software, which
assesses all the data on carbon emissions, post-consumer recycled material, potential for recycling, refilling, life cycle
assessment, materials of vegetable and natural vegetable origin, waste and biodiversity ingredients, in addition
incorporating details about certification.
Currently, the company has 1,462 raw materials and 94 packaging materials available in the tool
36
2017 ANNUAL REPORT Reduction of
environmental impact
In the environmental area, we are committed to
questions such as climate change, social biodiversity, waste
management, energy and water. We work proactively on
reducing our impact and innovating in all these areas.
Carbon: monitor,
reduce and offset GRI 103-2; 103-3
The Carbon Neutral Programme,
created in 2007, was Natura’s first public commitment.
It established the target of a one-third reduction
in the company’s emissions by 2013, which represented
the avoidance of 480,000 metric tons of CO2e emissions.
The volume avoided is equivalent to 83,000 trips around
the Earth by car. As part of our 2050 Sustainability
Vision, we assumed the commitment to reduce our relative
GHG emissions by a further 33% by 2020, using 2012 as
base year. GRI 305-5
The programme was developed on three fronts –
measuring, reducing and offsetting. The first
consists of the annual monitoring of all the organization’s
emissions by means of an inventory audited by an
independent company. What differentiates
Natura is precisely the scope of the inventory, which
covers not only the company’s own emissions but also
those of our entire production chain, including the
emissions from the extraction of raw materials,
from freight haulage operators, and from packaging
manufactured by third-parties.
In 2017, the company had a 0.8% increase in relative
GHG emissions and a 2% increase in absolute emissions
compared with 2016. This is due mainly to an increase
in items with higher relative emissions, as well as
to the growth in our International Operations, increasing
the impact of exports and product transportation
to consultants. In the comparison with 2012 (the base
year of the commitment), there was a cumulative
reduction of 0.5% in relative emissions. We continue to seek
alternatives that will enable us to honour our commitment
through measures such as optimizing the raw materials
logistics process, greater efficiency in delivering product
to consultants in Brazil, diversifying our fleet and
increasing the use of materials that provoke a lower
environmental impact in our products.
GRI 305-1; 305-2; 305-3; 305-4
Year
2015
2016
2017
Total CO2e (t) emissions 1 2
Relative emissions (kg of
CO2e/kg of product billed)
Cumulative reduction in
relative emissions since
2012 (%)
Vision commitment for
2020
321,267
303,424
308,048
3.17
3.17
3.20
1.4
1.3
0.5
-33% relative emissions
1 CO2e (or CO2 equivalent): measure used to express greenhouse gas emissions, based on each one’s global warming potential. 2 Includes GHG Protocol
scopes 1, 2 and 3.
37
2017 ANNUAL REPORT GRI 305-1; 305-2; 305-3
Emissions in the value chain (t)1
Extraction and transportation of raw materials and packaging (process and
transportation to direct suppliers)
2015
2016
127,788
122,337
2017
119,101
Direct suppliers (process and transportation to Natura)
31,731
30,378
29,574
Industrial and internal processes
18,557
15,633
16,754
Product sales (transportation and distribution)
66,749
63,465
62,751
Use of products and disposal of packaging
76,442
71,611
79,868
Overall total
321,267
303,424
308,048
1 Our Greenhouse Gas Emissions Inventory takes into account not only the company’s own emissions but also those of the entire production chain, including freight haulage operators
that transport raw materials and packaging materials manufactured by third-parties. We comply with GHG Protocol standards and the principles of the ABNT NBR ISO 14064-1
standard, which establish rules encompassing conception, development, management and elaboration. The 2017 Natura GHG inventory was audited and assured by KPMG.
Biogenic emissions (tCO2 equivalent) 1
2015
2016
2017
Direct biogenic emissions (from the burning or biodegradation of biomass)
GRI 305-1
Indirect biogenic CO2 emissions GRI 305-3
Total biogenic emissions
9,347
8,870
9,387
10,746
20,093
9,366
18,236
8,976
18,364
1 Our Greenhouse Gas Emissions Inventory takes into account not only the company’s own emissions but also those of the entire production chain, including freight haulage operators
that transport raw materials and packaging materials manufactured by third-parties. We comply with GHG Protocol standards and the principles of the ABNT NBR ISO 14064-1
standard, which establish rules encompassing conception, development, management and elaboration. The 2017 Natura GHG inventory was audited and assured by KPMG.
We voluntarily offset 100% of the emissions
that we are unable to avoid, ensuring we remain
carbon neutral. This offsetting involves the acquisition
of carbon credits from organizations that have reduced
their emissions by means of projects to keep forests
standing, reforestation, the substitution of fossil fuels and
energy efficiency programmes. In this way, we
have managed to align reduction in impacts on climate
change with the generation of socioenvironmental
benefits. Between 2007 and 2016, five public tenders
were launched and 36 projects contracted.
The total amount offset was 2,945,158 tCO2e.
Read more in our inventory filed in the Brazilian Public Emissions Records
(Registro Público de Emissões, available here in portuguese)
Emissions offset
Of the 36 offsetting projects contacted by Natura in the ten years of its Carbon Neutral Programme:
6
30
were in
Brazil
in Latin
America
37%
forestry
projects
63%
energy
projects
It should be noted that since 2007 Natura has
implemented measures to reduce its emissions
throughout the chain. The reductions in absolute GHG
emissions refer to improvements in processes and
products, considering indirect scope 3 emissions,
worthy of note being: use of cabotage to supply the
distribution centres, gains from exports based on local
production in the International Operations, efficiency gains
in ingredient transportation, reduction in impacts due
to Ekos brand refills, the use of post-consumer recycled
glass in perfumery and the use of post-consumer
recycled PET and green PE in product packaging. Although
these initiatives drove absolute reductions, they had little
impact on Natura’s overall result. The amounts are
not comparable over the years because different
initiatives were adopted in each period. GRI-305-5
38
2017 ANNUAL REPORT
GRI 305-5
GHG emission reductions resulting directly from emission reduction initia-
tives (tCO2e)
Reductions in other indirect emissions (scope 3) 1
Total reductions
2015
9,357
9,357
2016
8,213
8,213
2017
8,578
8,578
1 The emissions reduction calculation (scope 3) took into account emissions in 2017, 2016 and 2015, respectively over each period and not from one year
to the other. The amounts are not comparable over the years because different initiatives were adopted in each period.
GAINS THROUGHOUT THE CHAIN
Examining the entire value chain enables us to work on different fronts to reduce our impact on climate change.
We strive to drive innovation and generate additional benefits at every stage of the production and distribution of our products.
New product
development/
innovation process
Packaging
development
Production
Logistics/
distribution
Standing forest
Social benefits
Carbon and waste calculator: a tool developed to measure the environmental impact of a new product under
development; it takes into account GHG emissions and waste generation, from the formulation stage to the disposal
of packaging.
Vegetalization of formulas: in 2005, we started to substitute animal fat with vegetable oils in our toilet soap lines. In
2007, we replaced mineral oils with vegetable oils. In 2017, 81% of our formulas comprised renewable vegetable oils
(see the historical series in the item Origin of material and product certification).
Use of refills: in addition to pioneering the use of refills for our daily use products, over time we started using more
efficient materials, such as 100% recycled post-consumer PET for the refills. The relative emissions generated by a
Natura refill are on average 47% lower than those for the regular product.
Packaging: our target is to include 10% recycled post-consumer materials and 74% recyclable materials in the
composition of our packaging by 2020. We also intend to reach the rate of 40% eco-efficient packs. One of the main
contributions to this advance is the Ekos line. It was relaunched in 2016 employing more reused materials, with
relative emissions 30% lower than the materials used previously. Other initiatives include the use of recycled glass in
perfumery, packs made from recycled PET and green PE.
Organic alcohol: our perfumery line uses alcohol made from sugarcane that is grown without burning and without
the use of crop defence products or chemical fertilizers, resulting in a 39% reduction in carbon footprint compared
with conventional alcohol.
Low impact transportation: we were the first company in Latin America to adopt an electric vehicle for transporting
cargo in the distribution operation to consultants in the city of São Paulo and the surrounding metropolitan region.
On average, this vehicle emits nine times less carbon than a conventional model. We also developed other measures
to reduce the impact of product transportation, such as new carton sizes for sending product to consultants, the
use of maritime transportation instead of air freight, review of the logistics network, expansion of the distribution
centres in Brazil and the expansion of local international production. We also use ethanol-powered buses to
transport employees.
Social biodiversity active ingredients: we promote the generation of sustainable businesses through the Amazônia
Programme. We maintain relations with 34 communities, incentivising production techniques that have already
helped keep 257,000 hectares of forest standing. This has reduced deforestation, one of the main causes of GHG
emissions in Brazil.
Restoration of Xingu River springs: we support the Instituto Socioambiental’s Y Ikatu Xingu movement aimed at
reclaiming and protecting around 300,000 hectares of land surrounding the sources of the Xingu River in Mato
Grosso. An innovative system permits the plantation of a larger quantity of seeds in less time, with a 50% cost saving.
To ensure the feasibility of the project, the local community collected a large quantity of seeds which culminated
in the creation of a seed network, involving indigenous peoples, collectors, nursery operators and agricultural
producers. Currently comprising 450 collectors, most of whom are women, the network has been generating an
average annual income of more than R$ 2 million. Natura contributed to the reclamation of 516 hectares by means
of an emissions offsetting programme.
Reca Carbon Project: we recognize the importance of family agricultural producers in the conservation of forests,
and we believe that reconciling production activities and forestry maintenance is economically advantageous.
As part of this strategy, we initiated the Payment for Environmental Services Project (PSA in the Portuguese
acronym), remunerating communities not only for the purchase of ingredients and sharing of benefits, but also
for the environmental protection work they do. The project involves 109 families on 125 properties in the border
region of the states of Acre, Rondônia and Amazônia (read more about the project in Sustainable Social Biodiversity
Businesses, on page 43).
Efficient stoves: this is a partnership between Natura and the Instituto Perene which enables the construction of
sustainable stoves in the Recôncavo Baiano region in Brazil. A similar project was implemented in Mexico. The
stoves use a technology that permits a significant reduction in the consumption of firewood, helping to minimize
greenhouse gas emissions, the degradation of forests and local public health problems. A total of 12,247 stoves have
been installed in the two countries.
39
2017 ANNUAL REPORT >>> Partnership for the climate <<< GRI 305-5
With the knowledge accumulated over a decade in the
Carbon Neutral Programme, we realized that we could
leverage the effectiveness of the measures if we work
together with partners who share the same objectives.
According to the World Resources Institute, Brazil comes
seventh in the ranking of countries with the highest CO2
emissions in the world.
To further this commitment, in September 2017
we launched a common platform of carbon emission
offsetting projects in partnership with Itaú Unibanco,
called Compromisso com o Clima (Climate Commitment).
The initial objective is to offset 500,000 metric tons of
carbon by means of independent projects and to attract
more companies to the initiative.
In 2015, the year of the Paris Agreement, Natura led a
dialogue in which 200 people from different companies
and civil society organizations participated. The subject
was the responsibilities of the production sector in relation
to climate change. Presenting the work undertaken in the
Carbon Neutral Programme as a reference, the objective
was to articulate an institutional support network for
innovative, sustainable initiatives aimed at the transition to
a low carbon economy, as well as promoting the emissions
offsetting agenda in Brazil.
The first Compromisso com o Clima tender
received applications from 95 projects, located in
24 states and the Distrito Federal. The areas include
energy, agriculture, forestry and waste treatment.
Eight projects were selected for legal appraisal and
execution. To compensate our 2017 and 2018 emissions, we
will select projects approved in the tender. We would like
and will encourage Natura’s partners and suppliers
to choose from among the projects selected to honour
their own offsetting commitments.
PAYMENT FOR ENVIRONMENTAL SERVICES GRI 305-5
The Payment for Environmental Services (PSA in the Portuguese acronym) project, which links the Amazônia Programme
(read more on page 43) and our Carbon Neutral Programme, is the first carbon offsetting initiative organized by Natura. In a
concerted effort, the programme invests in forestry conservation, strengthening production chains, territorial development,
environmental/land deed regularization, valuing sustainable production systems and maintaining agricultural producers on
the land, among other objectives.
The pilot project was implemented in the Reca (Reflorestamento Econômico Consorciado e Adensado) supplier community,
located in the border region of the states of Acre, Rondônia and Amazonas, an area with a high deforestation rate due to
activities such as livestock breeding and timber exploitation. A total of 77% of local families, who are Natura suppliers, entered
the program. In 2017, they started receiving payment for promoting the sustainable stewardship of social biodiversity active
ingredients. The amount paid was equivalent to what Natura paid for the ingredients supplied by Reca for the same period
(2013-2015), thereby doubling the families’ income. From 2018, payments will be made on an annual basis.
Between 2013 and 2015, deforestation rates were 60% lower than in the surrounding communities. The area conserved during
the period is equivalent to 170 soccer fields, meaning emissions of 74,000 metric tons of carbon gas were avoided. Natura is
committed to the project for a period of 25 years. We estimate that the deforestation rate in the Reca area will be zero in 2038
and believe that the environmental service model may be adopted in other areas.
40
2017 ANNUAL REPORT Packaging and waste:
making new again GRI 103-2; 103-3; 301-2
We recognize our responsibility
for the life cycle of our products and packaging. We also
recognize the challenge managing post-consumer waste
represents for society, particularly in large urban centres.
Over the years, we have invested in increasing the use of
eco-efficient packaging (at least 50% lighter than regular/
similar packaging; and/or comprising 50% post-consumer
recycled material and/or renewable non-cellulosic
materials that do not increase mass).
In 2017, we continued to increase the rate of eco-efficient
packaging in Brazil and in Latin America, reaching 21% of
the products commercialized. This progress was made
possible, in particular, because of the good performance of
the Ekos and TodoDia lines of body care products, whose
packs are made from 100% post-consumer recycled PET or
sugarcane-based 100% green PE.
The Chronos face category refills also performed well. We
are certain that the offer of refills will be essential for us
to reach the rate of 40% eco-efficient packaging for our
products, part of our ambitions for 2020.
We also continue to progress in the use of recycled
glass in Brazil. We expanded the use of post-consumer
recycled material from 20% to 30% in the packaging
for some brands, such as Ekos, Kaiak, Humor and
Essencial. This movement began in 2015, when we
started to employ recycled glass from beverage industry
waste. One year later, we began to source part of the
recycled glass from cooperatives. To ensure the quality
of these packs made from glass of more heterogeneous
origin, we implemented a rigorous approval process for
the cooperative suppliers, encompassing traceability,
formalization and regulatory compliance.
GRI 301-2
Recycled materials used in product manufacture (%)
Material
Post-consumer recycled material incorporated into
finished product packaging – Brazil 1
Recyclable2 material in finished product packaging –
Brazil
2015
2.9%
50%
2016
4.3%
51%
2017
4.6%
50%
Vision commit-
ment for 2020
10%
74%
1 Percentage of post-consumer recycled material mass in relation to total mass of packaging materials, weighted by the quantity billed. 2 Percentage of
recyclable material mass in relation to total mass of packaging materials, weighted by the quantity billed.
GRI 301-2
Eco-efficient packaging as a proportion of items billed (%)
Brazil
International Operations
GRI 417-1
2015
26%
23.7%
2016
20%
20.8%
Origin of material and product certification 1 (%)
Material of renewable vegetable origin
Material of natural vegetable origin
Material with certification of origin 2
2015
83.0%
6.6%
13.0%
2017
21%
21.5%
2016
83.0%
5.6%
13.0%
Vision commit-
ment for 2020
40%
-
2017
81%
5.6%
13.1%
1 Calculated on dry base of raw materials present in product formulation. 2 The percentage of material with certification of origin increased because the number of certified inputs
employed in the body care and perfumery categories grew.
41
2017 ANNUAL REPORT >>> Reverse logistics programmes <<<
GRI 103-2; 103-3; 301-3
Driven by our commitment to reduce the
impact of post-consumer waste and by Brazil’s
national solid waste policy, over recent years we
have conducted a reverse logistics pilot programme
aimed at developing an efficient model for
recovering the post-consumer packaging of our
products. Currently we are engaged in two post-consumer
packaging reverse logistics programmes:
Elos Programme — a shared responsibility
programme between Natura and its packaging
suppliers, to guarantee traceability, approval and
reverse logistics in the post-consumer recycled
material supply chains incorporated into
our packaging.
Dê a Mão para o Futuro — we continue to support
the industry reverse logistics programme, an initiative
organized by Abihpec in conjunction with the cleaning
products industry association Abipla and the biscuit,
dough and bread industry association Abimapi.
Considering the volumes recovered through the two
programmes – Elos and Dê as Mãos para o Futuro –, in 2017
we achieved a 29% recovery rate for products and their
packaging materials. Our commitment for 2020 is to reach
a reverse logistics volume of 50% of the waste generated
by Natura product packaging in Brazil (in equivalent metric
tons). One of the main challenges in reverse logistics
is the need to expand the recycling chain in Brazil,
which is the focus of the two projects mentioned.
Product and packaging material recovery rate (%)
2017
29%
Vision commitment
for 2020
50%
See our water footprint
GRI 103-2; 103-3; 303-1
Natura continues to work on a
methodology for measuring the impact of water use
throughout the chain as a basis for defining initiatives
that will make a more effective contribution to reducing
and neutralizing the company’s water footprint, similar
to what is done in the Carbon Neutral Programme.
Our major challenge is in the product use phase
and is linked with consumer behaviour. We are aware
that the most significant impact is caused by generating
energy to heat the water used in consumers’ homes
due to the fact that the Brazilian energy grid is primarily
driven by hydroelectric power. In line with our 2020
commitment, we will maintain our efforts to identify
possibilities for reduction at this stage.
In our industrial processes, relative consumption was the
same as the previous year (0.53 litre of water per unit
produced), even though the total production grew by
10%, counting the Cajamar and Ecoparque units and
third-party manufacturers. Absolute water consumption
grew 4% compared with 2016.
What we did in
2017
We finalized Natura’s water
footprint study and incorporated
ecotoxicity assessment into
product safety assessments.
>
42
Vision commitment for
2020
Implement a water footprint
impact reduction and
neutralization strategy for the
entire Natura value chain.
2017 ANNUAL REPORT Water consumption per unit produced
GRI 303-1
0.8
0.6
0.4
0.2
0.0
Total litres per unit produced
0.53
0.53
0.49
7.332,9
2015
2016
2017
GRI 303-1
Water withdrawn by source — Natura Brazil (m3)1
Ground water
Municipal or water utility supply
Total
1 Up until 2016, the numbers did not take third-party manufacturers into account.
2015
177,866
20,872
198,738
2016
190,898
23,858
214,756
2017
252,016
37,958
289,974
Sustainable social
biodiversity businesses
GRI 103-2; 103-3; 203-1
We have used Amazonian social
biodiversity inputs since 2000, the year the
Natura Ekos line was launched. In addition to buying inputs
directly from extractivist communities, which generates
improved livelihoods and income for these communities,
we work actively on keeping the forest standing.
This goal is only possible because it is based on the vision
of transforming social and environmental challenges for
the families living in the region. Our strategy is to promote
and expand a sustainable economy based on Amazonian
biodiversity, driving innovation and ensuring economic
and social visibility on a global level.
In 2011, we implemented the Amazônia Programme,
which reflects the company’s belief in the potential
the region has to become a major global centre of
technologyand sustainable business in line with its
natural vocation. Work on the programme is based
on three pillars: science, technology and innovation;
developing sustainable chains; and institutional
reinforcement.
Although it was created by Natura, today the
programme has innumerable partners including
Brazilian and international companies, research
institutions and non-governmental organizations.
Since the beginning of the Amazônia Programme,
we have worked with 25 native species and contributed
to the conservation of over 257,000 hectares of standing
forest. By the end of 2017, we had beaten our target
of generating R$ 1 billion in business volume in the region
between 2010 and 2020 by 22%. The cumulative volume
exceeded R$ 1.2 billion.
Another 2020 target is to source 30% of the production
inputs consumed by Natura from the Pan-Amazon region,
encompassing other countries in which the Amazon forest
is located. In 2017, the indicator was 18.1%, a slight decrease
in function of the sales mix. Nonetheless, the total purchase
volume of ingredients from the Amazon increased due to the
purchase of products based on certified palm and Brazil nut
oil from the region. Part of our commitment is to guarantee
that the use of these ingredients in the portfolio remains
proportional to the company’s growth.
Amazônia Programme
GRI 203-1
Percentage of raw materials bought from the
Pan-Amazon region by Natura1 (at sales cost)
2015
12.3%
2016
19.1%
Business volume in the Amazon region2 (R$ million)
752
973
2017
Vision commit-
ment for 2020
18.1%
1,222
30%
1,000
1 Total purchases of raw materials from Pan-Amazon region versus total purchases of other inputs. 2 Cumulative amount since 2011 including the purchase of Amazonian raw materials,
benefit sharing, investments in the Ecoparque, local development, institutional reinforcement, innovation, environmental projects and the purchase of carbon credits.
43
2017 ANNUAL REPORT Science, technology and innovation
The first pillar of the Amazônia
Programme comprises the research and
scientific production initiatives that value the region’s
wealth. By means of an international alliance, in
2016 Natura was selected by USAID (United States
Agency for International Development) to ensure the
continuity of a project that employs an agroforestry
system in the cultivation of palm oil. The total investment
in the project is US$ 4.8 million.
The project began in 2007, with a pilot stage
undertaken in Pará in partnership with Finep
(Financiadora de Estudos e Projeto) and Embrapa (Empresa
Brasileira de Pesquisa Agropecuária). In an 18-hectare area
managed by members of the Camta (Cooperativa Agrícola
Mista de Tomé-Açu) cooperative, monoculture was replaced
with an agroforestry system that combines the cultivation
of the palm trees with other vegetable species.
Tests demonstrated that palm oil production was higher
compared with the volume obtained from monoculture,
even with fewer palm trees planted per hectare. It was also
noted that the system generated additional environmental
benefits, such as the creation of a natural barrier against
pests thanks to the diversity of vegetable species, as well
as the sequestration of carbon from the atmosphere. In the
social dimension, the production of fruit and seeds from
the other species generated an increase in income for the
producers.
There is the prospect of expanding the project. Currently
there are three demonstration areas, totalling 37 hectares.
In its products, Natura only uses palm oil certified by the
RSPO (Roundtable on Sustainable Palm Oil), which assures
sustainable production in the chain. The expectation is that
Natura will start acquiring the input from the agroforestry
system as soon as the scale of production permits it.
NÚCLEO DE INOVAÇÃO NATURA AMAZÔNIA (NINA - NATURA AMAZÔNIA INNOVATION NUCLEUS)
The Natura Amazônia Innovation Nucleus (Nina), located in the Ecoparque in Benevides (Pará), is a science and technology
hub that prioritizes the development of innovations and technologies which may be applied in social biodiversity production
chains and in the company. Its partners in this endeavour include the Federal University of Amazonas (Ufam), the Amazonian
research institute Inpa (Instituto Nacional de Pesquisas da Amazônia) and the Amazon state research foundation Fapeam
(Fundação de Amparo à Pesquisa do Estado do Amazonas), in addition to Embrapa.
In 2017, as a result of changes in the Natura Innovation team (read more on page 29), the field team,
which engages directly with the communities, started working in tandem with the ingredients development team,
with the objective of generating synergy and streamlining research and development processes.
Social biodiversity
production chains
GRI 103-2; 103-3; 203-1; 203-2; 304-2; 413-2
We want to build and continuously expand
sustainable production chains in the Pan-Amazon region
by means of the Amazônia Programme. In 2017, we worked
with 34 supplier communities, two of which joined the
network during the year. We practically doubled the
number of families benefiting from this arrangement to
5,296, of which 4,294 are in the Pan-Amazon region.
This increase was due mainly to the resumption of
relations with the Reserva Extrativista Chico Mendes
community for the use of patauá, the new ingredient
in the Ekos line. In this location, 1,926 families are
recognized as possessing the traditional knowledge
associated with this fruit and are remunerated as part
of the company’s benefit sharing policy.
44
2017 ANNUAL REPORT We also initiated relations with another new community
comprising 37 families, which provides Brazil nuts. In
the meantime, a cocoa producing cooperative opted to
terminate its participation in the Transamazon organic
cocoa group and left our network of supplier communities.
Most of the communities are located in the states of Acre,
Amazonas, Pará, Rondônia and Amapá, but Natura also
obtains biodiversity ingredients from other states in Brazil.
In 2017, this stakeholder group received almost R$ 18 million,
an increase of more than 70% compared with 2016.
The amounts include payment for the supply of inputs and
for benefit sharing, as well as investments in infrastructure,
training and technical services, among others. The amount
to be paid is calculated after the company conducts field
audits in which we identify and define the communities’
needs, as well as opportunities for improvement.
GRI 203-2 Communities and families
benefiting in the Pan-Amazon region
2015
1,529
2016
2,119
2017
4,294
Vision commit-
ment for 2020
10,000
GRI 203-2 Communities and families benefiting 1
Communities with which Natura maintains relations
Families benefiting in the communities
2015
30
2,251
2016
33
2,841
2017
34
5,296
1 The number of partners and families is monitored by the Natura social biodiversity tracing system. The number includes ten associations and 24
cooperatives.
GRI 203-2 Funds allocated by family (R$ thousands)
2015
2016
Direct funds
Supply
GRI 203-1 Community investments (R$ thousands)
Supply
Benefit sharing 1
Support for local development and infrastructure projects 2
Use of image 3
Training 4
Technical services 5
Carbon credits 6
Studies 7
2
1
2015
2,837
2,411
443
14
245
139
-
490
3.1
2.0
2016
5,771
3,070
669
36
77
255
-
245
Total allocated to communities
6,579
10,123
2017
3.2
2.9
2017
9,213
6,075
763
5
70
337
1,478
0
17,942
1 Benefit sharing: direct funds from the sharing of benefits for access to genetic heritage and traditional knowledge acquired in communities, allocated
under contract with Natura. 2 Support for local development and infrastructure projects: in 2017, the investment was employed in building drying and
storage facilities, enabling the communities to boost their volume of higher added value business, as well as improving production quality and controls. 3
Use of image: the amounts paid by Natura for use of the images of community members in institutional or marketing materials. 4 Training: management
and organizational development, technical exchanges, training in good production and stewardship practices, and occupational health and safety
programmes. 5 Technical services: technical services rendered to cooperatives/communities by external consultants or consultants hired by Natura.6 This
information was included from 2017. 7 Studies: development of diagnoses, management plans, stewardship plans, mapping exercises, information surveys,
field research and loyalty/satisfaction surveys.
45
2017 ANNUAL REPORT >>> Social Biodiversity Chain Verification System <<<
GRI 103-2; 103-3
By continuously monitoring
a series of indicators, we are able to measure the
positive impacts generated by our relations with the
communities, as well as determining the investment
in training necessary to develop competencies among
this group. In this way, we help to strengthen the
communities and increase their autonomy, encouraging
them to expand supply to other companies.
In partnership with the Union for Ethical Biotrade
(UEBT), we developed a Social Biodiversity Chain
Verification System, which is used to audit 100% of
the supplier communities in 65 supply chains.
This system enables us to verify questions related to
labour practices, occupational health and
safety, conservation of biodiversity, organizational
management, good production practices and the
traceability of production chains to certify the ethical and
sustainable origin of ingredients. The audits are conducted
annually in all the communities. When necessary,
we develop action plans based on the results.
In 2017, the verification system was applied to three new
supplier communities. Natura already maintained relations
with one of them — Avive (Associação Viva Verde da
Amazônia), located in the municipality of Silves (AM) —
but only started sourcing ingredients from it in 2017.
For two years, the audit results have accounted for 80% of
the points in the BioQlicar award (read more on page 52).
This score increased again, reaching 3.97%. In 2016,
the score was 3.94% and in 2015, 3.68%. GRI 414-1
COOPERATION IN THE ECOPARQUE
The Ecoparque in Benevides was inaugurated by Natura in 2014 as a hub to connect communities supplying social biodiversity
ingredients with companies willing to invest and develop businesses in the region. In addition to the Natura soap plant,
the German company Symrise, which produces natural oils and essences, has been operating in the Ecoparque since 2015.
Last year, Natura, Symrise and GIZ (German Agency for International Cooperation) formed an association to generate a
positive impact for 14 partnering cooperatives, comprising 1,140 families. The project, which is already being implanted,
encompasses the provision of training in management and accountability, measures to enhance the cooperatives’
production processes and assistance in initiatives to reclaim degraded areas.
Natura will be responsible for providing technical assistance in the field and in the processing units, as well as developing
new value chains for vegetable species as yet not in use. Symrise will develop new methods and technologies for production
pre-processing by the communities and cooperatives, helping to establish quality standards for the inputs. It is estimated
that the project will boost the cooperatives’ average sales volume by up to 20%, which in turn will increase the families’
income. All participants in the project are audited under the Social Biodiversity Chain Verification System.
46
2017 ANNUAL REPORT Institutional reinforcement
GRI 103-2; 103-3
To develop an economy that revolves around
the standing forest, we believe it is necessary to be aware
of local social and environmental priorities and, through
partnerships, to promote the growth and development
of local institutions and communities. By means of the
survey, we map opportunities to provide incentives for
entrepreneurship and promote education oriented to the
forest, digital inclusion, as well as carbon emission reduction
and offsetting projects. Currently we are engaged in the
development of three territories – Mid Juruá (Amazonas),
Lower Tocantins (Pará) and Transamazon (Pará). In these
areas, we are engaged in developing a shared territorial
development management model in conjunction with local
governments, communities and companies, the objective
being to generate plans and targets for the regions.
Natura’s engagement in the Territórios Prioritários para
o Desenvolvimento de Negócios Sustentáveis (Priority
Territories for the Development of Sustainable Businesses)
takes the form of investments in entrepreneurship,
education and social biodiversity production chains. There
follows a description of the main actions in each one of the
territories in 2017.
Mid
Juruá
(AM)
The Fórum de Desenvolvimento Territorial do Médio Juruá (Mid Juruá Territorial Development Forum), which
consists of local agents and involves the participation of Natura, received US$ 2.3 million in funding from
USAID, (United States Agency for International Development). The money will be invested in diverse projects
to promote education, basic sanitation, infrastructure and access to potable water, as well as studies on
production chains in the region, examples being fruits such as andiroba and ucuuba. Sitawi, a civil society
organization that raises capital to generate positive social and environmental impacts, led by Natura and
Coca-Cola (our partner in the project), coordinated the preparation of the local development proposal
presented to USAID. The project outlined the main needs in the region based on data from the Social Progress
Index-Communities (IPS), that has been used as a tool for diagnosing and assessing socioenvironmental
impact in Mid Juruá since 2015. The diagnosis, which presents the communities’ perception of critical topics,
will enable companies, government, NGOs and civil society movements to align their investment efforts in the
region. It should be noted that the action of the Mid Juruá Forum, the involvement of multiple stakeholders and
the adoption of the IPS index as a basis for diagnosis were determinant in USAID’s selection of the initiative and
in the amount of funding provided. Also worthy of note were the development of projects in partnership with
Capes (Coordenação de Aperfeiçoamento de Pessoal de Nível Superior) and UAB (Brazilian Open University,
in Carauari) to train 45 young community members; support for the constitution of the CFR (Casa Familiar
Rural) association in Carauari; organization of the RedAmérica Transformers Award; partnerships to implant a
university level course in Education aimed at conservation units, with an entry exam scheduled for the end of
2018; and the disclosure of the results of the second IPS survey in the territory.
Transamazon
Region
We supported the certification of 23 Rural Family Homes (CFRs) in Pará (seven in the Transamazon region),
qualifying them to seek public funding; support for the creation of the first specialized course in Alternating
Education in the Amazon region for 30 CFR teachers in partnership with the rural family home association Arcafar
and Ufopa (Western Pará Federal University); and we used tax incentives to provide funding for the Municipal
Child’s and Adolescent’s Right Council in Brasil Novo for the remodelling of the CFR in the municipality.
Lower
Tocantins
In 2017, we signed an agreement with the Fundação Banco do Brasil (FBB) to boost the use of biodiversity
products and services, benefiting more than 200 families from four communities. The initial investment made
by the foundation involved R$ 190,000 for the construction of ten high efficiency solar dryers to enhance
andiroba and murumuru fruit production quality and for the purchase of 40 seats to improve safety in
harvesting the patauá fruit. Natura’s contribution will be in form of training and technical assistance for
the families. Other actions include: tax incentive investments to remodel the CFRs (Rural Family Homes ) in
Abaetetuba and Cametá; in partnership with Latam, the construction of IT laboratories in five cooperatives
and two CFRs, benefiting 350 people; an agreement with the FBB to develop social biodiversity production
chains; a technical cooperation agreement involving Natura, Symrise and GIZ to develop an organic product
street market in Cametá; and support for the formation of technical and specialization courses in agro-
ecology. Worthy of note was the organization of the 1st and 2nd Jirau Network meetings, with more than
400 participants, involving activities such as short, practical permaculture courses and an agro-ecological
product fair. The third edition of the meeting has already been confirmed for 2018. In the Lower Tocantins
region, our partners are the Federal University of Pará, the Instituto Federal do Pará and the agricultural
cooperative Cooperativa Agrícola Resistência de Cametá (CART), in addition to the Rural Family Homes and
the government.
47
2017 ANNUAL REPORT >>> The Biodiversity Legal Framework in practice <<<
As provided for in Brazil’s new Biodiversity Law 13.123/2015,
known as the Biodiversity Legal Framework, in 2017 the
SisGen (National System for the Management of Genetic
Heritage and Associated Traditional Knowledge) system
came into operation. Now applications to perform research
on biodiversity ingredients must be registered on this
platform. The law is aimed at eliminating bureaucracy
for access to genetic heritage and associated traditional
knowledge, boosting research and business opportunities
related to Brazilian biodiversity assets.
Natura was the first company to adopt and use the system
in Brazil. The agreements with the communities in the Mid
Juruá region were undertaken in accordance with the new
legislation, based on non-monetary benefit sharing. The
resources will be employed in local development initiatives.
The agreement is managed by a committee comprising
representatives of the communities, the ICMBio (Instituto
Chico Mendes de Conservação da Biodiversidade), linked
with the Ministry of the Environment, and Natura. In 2017,
the committee launched a tender and the four projects
approved are now being executed in the region.
In the Reserva Extrativista Chico Mendes in the state
of Acre, a location recognized as a source of traditional
knowledge on the use of patauá, we created a fund in
conjunction with representatives of five local residents’
associations and ICMBio. This will be responsible for
managing and implementing benefit sharing projects.
To provide information and debate the changes arising
from the new legal framework, we organized an event in
Benevides (Pará) with representatives from the supplier
communities, universities and other partners.
48
2017 ANNUAL REPORT Positive social impact
We maintain our belief that in order to sustain and ensure
the future of our business in the long term we need to generate
a positive impact on all those who interact with Natura
and help to build our company – employees, consultants,
suppliers and members of the supplier communities,
consumers and, on a broader level, the whole of society.
Aware that these questions are interrelated, we focus on incentives for quality education, enterprise,
professional development, social and economic inclusion, steady growth and improved distribution
of per capita income, diversity and the strengthening of civil society organizations.
Greater development
for the consultants
We want to make a difference in
the lives of our Natura Beauty Consultants, not just
professionally and financially, offering them an increasingly
robust career path, but also providing them with resources
and instruments that will drive a positive impact on
their lives and those of their families. Since 2014, we have
managed to gain more in-depth knowledge about the
living standards and demands of our consultants through
monitoring the consultant Human Development Index
(HDI), a specific methodology developed by Natura inspired
by the United Nations Development Programme (UNDP)
bearing the same name.
The consolidated index takes three dimensions into account
– health, knowledge and work. The result, on a scale from
0 to 1, is fundamental for measuring the effectiveness of
the self-development strategies we have drafted for the
network. In 2017, the HDI score was 0.593, in line with the
2016 result of 0.5. The challenge we face is developing
Natura’s strategy to impact the consultant network based
on the results of this indicator.
>>> Access to health services <<<
In 2016, based on the initial HDI results,
which indicated that many consultants wished
to resume their studies, we developed an education
programme in partnership with the Instituto Natura
(see following block).
At a second stage, in 2017, we started working
on the healthcare front. We conducted a pilot-project
in the cities of São Paulo and Porto Alegre, providing
healthcare services for the consultant and for
one family member. After the test stage, the programme
was extended to the whole of Brazil in December.
The healthcare benefits include discounts of up to 60% on
doctor’s visits, examinations and medication (medicines
are available through a network of eight thousand
pharmacies in the country). This initiative facilitated access
to private healthcare services for the consultants and their
dependents, many of whom had been unable to afford
these previously.
The programme is being executed by a partner
with a network that ensures the service is available in
most of the municipalities in which the Natura Beauty
Consultants reside.
49
2017 ANNUAL REPORT GROWTH OF EDUCATION PROGRAMME
Around 90,000 consultants and family members have enrolled in the Natura education programme initiatives, which include
face-to-face or distance learning degree, postgraduate, language and vocational courses, among others. Some of the
offerings have exclusive discounts, while others are free, such as the reading club which sends the consultants books.
The initiative, funded by the Crer Para Ver product line, is run in partnership with the Instituto Natura, which is responsible for
the curatorship of the courses offered. In addition to Estácio University, which offers a total of 80 degree and postgraduate
courses, we have formed partnerships with Geekie Games (an online preparatory platform for Brazil’s Enem national
secondary education examination), the Khan Academy (online Mathematics reinforcement course), Prepara Cursos (for
vocational technical courses) and the Wizard by Pearson and English Live chains of language schools.
Additionally, the consultants have free access to exclusive educational contents created by the Crer Para Ver brand.
These include knowledge chains in the areas of communication, culture and citizenship, as well as information on how the
consultants may collaborate in the education of their children and their relationship network.
When the education programme has been in place for one year and a half, we will initiate studies to measure the impact that
these opportunities have generated for our consultants.
>>> Movimento Natura (Natura Movement) <<<
In 2017, we reached the number of one thousand social
initiatives posted on the Movimento Natura website,
the platform that connects social development projects
run by Natura Beauty Consultants with people interested
in supporting them. Since 2014, not only consultants,
but the public in general have has been able to mobilize
support around social enterprises. In 2017 alone the
initiative’s website (www.movimentonatura.com.br)
received some 2.2 million visits.
As part of the movement, since 2010 Natura has
recognized social and environmental projects with
outstanding transformational potential by means
of its Acolher Award. A total of 402 projects were submitted
to the 2017 edition of the award, and over 164,000 people
voted in the selection phase. A total of 13 initiatives were
recognized in the three categories: consultants
(8 projects), Natura employees (3) and consumers (2) –
a new category created in 2017. The winners receive
financial support and training in social enterprise.
Since the first edition, 70 projects have received
the Acolher Award. See all the award winners
here (in Portuguese)
Consultants engaged in the Movimento Natura (units)
2015
2016
2017
Public 1
Participations 2 3
1,308,917
2,193,662
2,194,838
32,724
55,355
56,228
1 Calculation of the indicator is based on the number of visitors to the website. 2 In addition to consultants, other groups, such as consumers, access the
platform. 3 Calculation of the indicator is based on active participation: registration of people or initiatives, participation in campaigns, sharing content on
the social networks and interactions with those responsible for the initiatives on the platform.
50
2017 ANNUAL REPORT Local development
programme
GRI 103-2; 103-3; 413-2
In addition to the communities supplying
social biodiversity ingredients, Natura’s commitment to
promoting social and economic development is extended
to the communities surrounding our operating units –
Cajamar (São Paulo), Benevides (Pará) and the Vila Jaguara
district in the city of São Paulo, where the company’s new
administrative headquarters and distribution centre
are located. This commitment is part of Natura’s 2050
Sustainability Vision.
To generate transformations at scale, we work in
arrangements and partnerships with local governments,
grass roots communities and other companies to promote
territorial development solutions. In 2017, there were no
negative impacts recorded in areas surrounding our sites.
In Benevides, in partnership with Rede Udben, we
undertook a series of measures such as: research and local
development, business and opportunities programmes,
cultural programmes, placemaking actions to encourage
interaction and the harmonious use of public spaces,
impacting around one thousand people. In the Vila
Jaguara area, the company promoted the Jaguara Leisure
and Culture Circuits, as well as social project and social
communication workshops for a total of approximately
1,700 participants. In Cajamar, we also supported
placemaking measures (Viva Vielas Project), and we were
engaged in establishing indicators to measure the impacts
of the Cidades Sustentáveis (Sustainable Cities) project,
involving 1,800 people.
Another way of fostering the development of the
communities surrounding the Natura sites is the
development of partnerships with local suppliers, whenever
this is feasible. In 2017, 5.2% of total Natura spending on
suppliers went to companies in Cajamar and Benevides.
GRI 204-1
Amount spent on local suppliers by operational unit 1(R$ million)
Cajamar2
Benevides2
Total
2015
2016
2017
144
110
322
155
3
158
169
12
181
% spending on local suppliers
5.47%
3.00%
5.22%
1 Only the production units (Cajamar and Benevides) are considered to be operational units. Our definition of local considers total purchases made from
suppliers located in the same municipality as these units, whichever Natura unit they may supply. Since we consider only company-owned manufacturing
units, the International Operations whose products are manufactured by partners are not taken into account in this calculation. 2 In Cajamar, the increase
is due mainly to the higher business volume. There was an alteration in business volume with suppliers in the area surrounding Benevides in 2016 and 2015
due to a review of the scope of the indicator.
51
2017 ANNUAL REPORT Suppliers: partnership
for development
GRI 103-2; 103-3; 102-9
We interact on a continuous basis
with the partners in our supply chain, seeking to
strengthen and drive the sustainable development
of their businesses. We are also committed to ensuring
traceability throughout this sizeable chain, which currently
comprises some 10,400 suppliers in all the countries
in which Natura operates. In 2017, payments to these
suppliers totalled R$ 5.1 billion. In the two previous years,
the amount was R$ 4.2 billion.
Today, 240 partners account for over half (57%) of the
purchase volume and, consequently, are considered to
be strategic for the business. This group participates
in the Qlicar programme, the main objective of which is
to drive gradual improvements in processes and in the
management performance of this network. The programme
involves a series of assessments based on the pillars
(Q)uality, (L)ogistics, (I)nnovation, (C)ompetitiveness, (A)
mbiental (Environment), Social and (R)elationship. The
results may generate improvement plans, which are
undertaken by the suppliers with support from Natura.
On an annual basis, we recognize the most outstanding
performance among Qlicar participants in different
categories, such as production suppliers (raw materials,
packaging, third-party manufacturers), logistics and freight
haulage operators and digital technology partners.
The Qlicar award has been extended to include BioQlicar
and Qlicar Innovation.
• BIOQLICAR: aimed at communities supplying social
biodiversity ingredients. Currently, 80% of the score is
derived from the results achieved in the Social Biodiversity
Chain Verification System, the audit conducted by Natura
focused on traceability (read more on page 46, in the
sub-chapter Sustainable Social Biodiversity Businesses).
The remaining 20% refers to meeting the planned
production volume and delivery times. Two communities
receive awards every year – the one with the highest score
and the one making the most progress in terms of quality
and good practices.
• QLICAR INOVAÇÃO: this recognizes partners working
in research and technological development. In 2017, there
were awards in the areas of technology, product and
cosmetic performance.
GRI 102-9
Information about suppliers 1
Estimated monetary value of payments to suppliers (R$ billion)
Annual contract renewal rate (%)
1 Does not take Aesop and The Body Shop into account.
2015
2016
2017
4.2
40
4.2
20
5.1
11
>>> Requirements for contracting suppliers <<<
GRI 308-1; 414-1
To select the suppliers with whom we work,
we take into account their adhesion
to the Natura code of conduct and ethical
commitments. We also verify the financial
health of the companies and their
compliance with registration requirements.
The percentage of new suppliers subject to
screening and monitoring in environmental, labour,
societal impact and human rights criteria
reached 1.6% in 2017. For example, the environmental
criteria include compliance with legal requirements
(environmental operating licence, water withdrawal
permit, industrial waste disposal environmental
certificate), the existence of an environmental policy
and proof that it is communicated, assessment
of environmental risks and management of water
and energy consumption, emissions, waste
and effluent generation, among other details.
During the year, the assessment was expanded
from 999 to 1,119 partners because the supplier
base for the International Operations was included.
52
2017 ANNUAL REPORT
>>> Supplier and supplier community loyalty <<<
GRI 102-43; 102-44
In 2017, we had the best result ever in the supplier
loyalty assessment, with a 37% increase in the
consolidated index. In the International Operations,
growth was 10%, compared with 43% in Brazil.
Our performance improved in a number of aspects,
such as relationship, service and perception
of operational processes. With a sample that
covered 51% of the supplier base, only 4%
of suppliers declared that they were dissatisfied
with the company.
In the 20 supplier communities surveyed,
the loyalty rate was 27%.In five of the communities,
the loyalty rate was high (above 38%),
in 11 it was average (31% to 10%) and in four it was low. In
2017, we revised the research methodology.
We now use an application to collect the data
and the responses are transmitted via
a digital system, which has streamlined and simplified
the process.
Supplier loyalty (%)
Satisfaction by supplier 1
Supplier loyalty Brazil 2
Supplier loyalty International Operations 2
Consolidated loyalty Natura (Brazil and International Operations) 2
2015
2016
2017
81%
18%
41%
25%
82%
21%
41%
27%
89%
30%
45%
37%
1 Satisfaction: percentage of satisfied and completely satisfied suppliers. This year the data take into account global information (Brazil and International
Operations). In view of this, we revised the information from 2015 and 2016. 2 Loyalty: combination of the attributes overall satisfaction, intention to continue
as a supplier and recommendation of Natura as a customer.
53
2017 ANNUAL REPORT
Commitment to education
GRI 203-1; 203-2; 103-2; 103-3
We created the Instituto Natura in
2010 to manage the funds raised by the sale of our Crer
Para Ver product line. This non-cosmetic product line has
been part of the Natura portfolio since 1995, with all the
income invested in projects to improve the quality of public
education in Brazil and in the countries in which we have
operations in Latin America. More recently, the institute
has developed educational initiatives for the Beauty
Consultants (further information on page 50).
In Brazil, Crer Para Ver penetration in the year was 28.5%,
growing 5.9 p.p. compared with 2016.This means that more
than 1 million consultants bought at least one product from
the line in the course of the year. Even so, due to results
below expectations in some products, total revenue was R$
22.9 million, 3.8% down on 2016.
In the International Operations, revenue and penetration
dropped, which was considered normal after the above
average performance in 2016.Total revenue was almost R$
12.8 million (R$ 14.5 million in 2016).Penetration decreased
from 19.4% to 17.7%.
GRI 203-1
Investments benefiting public education
Crer Para Ver line revenues — Brazil 1 (R$ million)
Crer Para Ver penetration — Brazil 2 (% cycle)
Crer Para Ver revenues — International Operations 1 (R$ million)
Crer Para Ver penetration — International Operations 2 (% cycle)
2015
19.5
22.9%
10.5
17.0%
2016
23.7
22.6%
14.5
19.4%
2017
22.9
28.5%
12.8
17.7%
1 Refers to earnings before tax on the Crer Para Ver product line. 2 Indicator for the average percentage of Natura Beauty Consultants buying any Crer Para
Ver product versus the total number of active Natura consultants during the 19 cycles.
>>> Instituto Natura in action <<<
The Instituto Natura (iN) contributes towards the
transformation of education in Brazil and in the other
Latin American countries in which Natura operates. The
iN is a non-profit organization (Oscip in the Portuguese
acronym) whose objective is to strengthen the people
and organizations engaged in education, in particular
teachers, schools, public administrators and Natura Beauty
Consultants.
In 2017, a year in which new administrations had taken
office in Brazilian municipalities after the elections held the
previous year, the institute’s main challenge was to mobilize
new administrators in municipal education departments
to ensure the continuity of existing programmes. One focus
during the year was the virtual platform Conviva Educação,
which offers training , information and tools with the aim
of fostering a network for the exchange of experiences and
learning among municipal education departments. In 90
days, we updated the registration of some four thousand
municipalities. We ended 2017 with 4,700 cities registered,
of which 1,600 access the platform frequently. For 2018, the
priority is to measure the impacts the project is having on
the administration of education at municipal level in Brazil.
Together with another eight educational institutes and
foundations, the Instituto Natura is a member of the
Movimento Colabora Educação, aimed at leveraging
the potential for collaboration between the federal
government, the states and municipalities in the country.
In 2017, the 1st Colabora Educação Seminar was held.
This engaged state and municipal representatives in
a discussion of collaborative models and their positive
effects on education. Inspired by the state/municipality
collaboration model in place in Ceará for over 10 years
– PAIC (Pacto pela Alfabetização na Idade Certa), –, we
started to provide support for the PAES learning pact in
Espírito Santo and the Colabora Amapá initiative, with the
intention of furthering support for other states from 2018.
The institute also works in partnership with the education
departments in Cajamar (São Paulo) and Benevides
(Pará), where Natura has operations. In these two locations
we have been running the RAE (Education Support
Network) initiative since 2013. This is aimed at helping
to enhance educational administration and to improve
student learning. The project was implanted after a
diagnosis conducted by the Instituto Natura, which led
to a four-year plan aimed at strengthening educational
management in municipal education departments.
The positive effects of the RAE network are evident in
the improved results in the Prova Brasil national school
performance assessment and the Ideb basic education
development index (Índice de Desenvolvimento da
Educação Básica) in these municipalities.
54
2017 ANNUAL REPORT FULL-TIME SCHOOLS
Two years ago, the Instituto Natura focused its efforts on transforming the full-time school model into public policy. The work,
done in partnership with other institutions, is aligned with measures taken by the Ministry of Education to introduce this
policy for Secondary Education, backed by an investment of R$ 1.5 billion. The policy is being implemented gradually and is
intended to benefit 500,000 new students by 2018.
Another project is the School Learning Community
(Comunidade de Aprendizagem na Escola) aimed
at driving social transformation through school
administrators, teachers, students, families and the
community. In 2017, this project was undertaken in 108
schools in Brazil and in 268 schools in Argentina,
Colombia, Chile, Peru and Mexico. It should be noted
that in the International Operations, the initiative is
managed by the local Natura operations, with support
from the iN.
During the year, a methodology was developed to assess
the impacts of the TRILHAS (TRAILS) programme, which
provides training for teachers of literacy skills. The data
also contributed to the design of Digital TRILHAS,
which will increase the scalability of the initiative from 2018.
Another action in place in 22 states is the Escola
Digital (Digital School), a collaborative network comprising
state and municipal education departments that
provides free and open access to more than 20,000
digital education resources.
Network of people and organizations involved in the Instituto Natura initia-
tives — Brazil
Municipalities
Schools
Teachers
Students
Municipal Education departments
State Education departments partnering with the Instituto Natura
Natura Beauty Consultants
2015
4,884
-
-
-
4,884
27
n.a.
2016
828
910
9,183
2017
1,601
1,053
34,633
476,507
1,174,238
828
22
1,601
25
24,000
62,000
GRI 203-1
GRI 203-1
Investment in projects developed
and supported by Crer Para Ver Brazil
(R$ million)
Investment in projects developed
and supported by Crer Para Ver
International Operations (R$ million)
30
20
10
0.0
23.9
23.4
24.6
2015
2016
2017
30
20
10
0.0
8.1
10.2
10.4
2015
2016
2017
Network of people and organizations involved in the Instituto Natura
initiatives — International Operations
2015
2016
2017
Schools/organizations
Teachers, coordinators and headmasters
Students
337
10,598
60,191
475
13,057
89,021
2,433
10,459
173,074
Further information about the Instituto Natura at www.institutonatura.org.br (Portuguese).
55
2017 ANNUAL REPORT A more diverse and inclusive environment
GRI 103-2; 103-3
In 2016, we launched the Natura Diversity
Policy which formalized the work and the efforts underway
to foster diversity, inclusion and a multicultural environment
among our employees, as well as generating positive
impacts outside the company. In 2017, we defined the
priority audiences and topics: gender diversity, focused
on women in leadership positions, and the inclusion of
the disabled. In addition to these groups, who are part of
our 2050 Sustainability Vision, we incorporated the LGBT
audience and the question of ethnic/racial equality.
Our commitment is to have women occupying 50% of
director level positions in all the Natura operations in
Latin America by 2020. We have progressively increased
this percentage, which reached 32.69% in 2017. To
honour this commitment, we ensure that 50% of the final
candidates for positions at any level in the Natura hierarchy
are women. Furthermore, internally we are engaged in
boosting the potential of female employees, bolstering
their self-confidence and driving empowerment through
the provision of tools to enable them to achieve a balance
between their professional and family lives. In practice, we
offer leadership training via the Mosaico Programme and a
series of benefits (read more ahead).
A number of other initiatives are in place to encourage
the hiring of disabled people and to establish an inclusive
environment. Our commitment for 2020 is to have 8% of
disabled people in the workforce. We have been successful
in this area, ending the year with 6% of disabled staff in our
Brazilian units, 50% of whom are women.
In addition to the exclusive vacancies for the disabled, a
disabled person may apply for any job vacancy at Natura
because all positions in the company are open to everyone.
Specifically in the São Paulo Distribution Centre, 15% of the
members of the workforce are disabled, and our target is to
increase this rate to 30%. The fully automated distribution
centre employs a number of assistive technologies,
including picking by light, which enables disabled
employees, including the intellectually impaired, to pick and
sort products. The system of flashing lights allows the tasks
to be executed intuitively.
Employees with hearing impairments receive support
from so-called godparents who are trained in Brazilian
sign language, Libras, to facilitate communication in the
work place. Another simple but effective measure is the
inclusion of sub-titles on all videos for employees. In 2017,
we inaugurated a translation centre to provide assistance
for the disabled in medical consultations in the Natura
healthcare facility. A Libras translator can assist in the
consultation via videoconferencing.
In 2017 we also started work on promoting ethnic-racial
equality, with an initial focus on the intern programme,
the main gateway to the company. This is being done in
partnership with EmpregueAfro, a consultancy specialized
in recruitment, training and development programs for
Afro-Brazilians.
Another initiative was also started aimed at the LGBT
audience. In 2017, we externalized our values by means of a
campaign for the Faces makeup line, with advertising that
addresses the question of gender. In 2018, we intend to
establish discussion groups to get employees to help us to
think about how Natura may effectively contribute towards
the inclusion of this group. Our idea is to create groups
focused on all the diversity topics: women in leadership
positions, disabled employees and ethnic/racial inclusion.
Natura guarantees six-month maternity leave,
40-day paternity leave, as well as a parenting
course extensive to fathers which includes discussion
of domestic roles and task-sharing. There is a nursery
for employees’ children. In 2017, this benefit was
extended to employees who take maternity leave under the
INSS social security system, regardless of gender identity
and sexual orientation.
GRI 405-1
Employees
by functional
category and
gender (%)
Production
Administrative
Management
Director level
Total
2015
2016
2017
men
women
men
women
men
women
Vision commit-
ment for 2020
60.1%
20.7%
42.8%
74.1%
36.8%
39.9%
79.3%
57.2%
25.9%
63.2%
60.3%
20.7%
45.0%
70.4%
36.5%
56
39.7%
79.3%
55.0%
29.6%
63.5%
62.4%
21.5%
43.3%
67.3%
37.2%
37.6%
78.5%
56.7%
32.7%
62.8%
50%
2017 ANNUAL REPORT Disabled
employees 1
by functional
category and
gender (%) —
Brazil
Production
Administrative
Management
Director level
Total
2015
2016
2017
men
women
total
men
women
total
men
women
total
2.0%
0.5%
0.0%
0.0%
2.5%
1.6%
1.3%
0.0%
0.0%
3.0%
3. 7%
1.8%
0.0%
0.0%
5.5%
2.1%
0.4%
0.0%
0.0%
2.6%
1.6%
1.5%
0.0%
0.0%
3.1%
3.7%
1.9%
0.0%
0.0%
5.7%
2.2%
0.7%
0.0%
0.0%
2.9%
1.5%
1.5%
0.0%
0.0%
3.1%
3.8%
2.2%
0.0%
0.0%
6.0%
Vision com-
mitment for
2020
8%
1 disabled people. Data monitored only in the operations in Brazil.
>>> Nossa Gente (Our People) <<<
At Natura, our purpose is to develop enterprising people
and leaders for the company and for the world. Based on
this belief, a new people management model was launched
in 2017. Called Nossa Gente (Our People), the model is
designed to bring about the transformations we want to
see in our employees and in our business.
Adopting a broad-based approach, the programme
comprehends the entire personnel management cycle,
ranging from the attraction and selection of talent, through
integration, performance, development and training, to
recognition, reward, career progression and succession.
together with the Human Resources team in order to shape
development paths, recognition measures, specific training
programmes and individual acceleration actions.
For example, the new feedback process encourages
employees to take control of their career, proactively
requesting conversations with their direct managers in the
stage known as Development Dialogues. These dialogues
take place throughout the year, whenever the manager and
employee need to align deliveries and priority behaviours
for the culture. It is our expectation that this proximity will
support the people management process.
Although there are specificities in accordance with each
audience, the programme connects the diverse stages
of the annual performance review, the feedback process
and the People Forum, a meeting at which managers
assess the performance of employees from different teams
We also created a networked feedback tool available
as a mobile phone application in which any
employee may make a simple, informal assessment
of a colleague, highlighting behaviours that should
be maintained or that need to be developed.
>>> Education for Transformation <<<
GRI 103-2; 103-3; 404-1, 404-2
To support the Natura cultural transformation
process, we implemented the Education for
Transformation movement, sustained by the corporate
education architecture. This involved updating
some programmes and launching new initiatives.
The model starts with the induction of new employees,
including entry-level programmes (Apprentices,
Interns and Trainees), followed by Passport to
the Future, a career acceleration programme that will
be open to operational personnel and Business
Development managers in 2018, and culminating in
Mosaico, offered to all levels of management. Mosaico was
reformulated to support the cultural
transformation journey which is intended to make
Natura more flexible and less hierarchical.
We are sure of the role we expect leaders to play
on this journey, inspiring employees by example and
engaging their teams. We promoted a workshop
addressing this dynamic, incorporating questions
such as self-knowledge and managing the transition,
aimed at preparing leaders for the context of accelerated
change in the current environment. Mosaico incorporated
two fundamental pillars – focus on results and
on relations –, in line with the priority behaviours
(read more in Culture for Sustainability, on page 59).
57
2017 ANNUAL REPORT All leaders will take the Mosaico programme in 2018. The
Induction Programme was also reformulated to drive closer
alignment with the Natura Essence, the organizational
culture behaviours, as well as the company’s values and
strategies. This is a two-day classroom learning experience.
Allied with these initiatives is the Natura Education
programme, which provides employees with financial
support for formal education initiatives. Relaunched in
2017, in addition to incentives and recognition, the new
programme is aimed at accelerating employees’ careers
by means of integrated measures to drive academic
development, language acquisition and the curatorship of
contents for professional development.
New partnerships were included in Natura Education in
2017 (boosting the number of institutions from five to 17),
with the provision of partial or full grants for employees.
Discounts are also extensive to family members (spouses,
children and wards aged up to 21 years).The partnerships
are valid all over Brazil for both classroom and distance
learning courses.
The review and enhancement of the people management
process took up a large part of the year and impacted
part of the corporate education programming, resulting
in a reduction in the number of hours training per
employee, in particular for director level, management and
administrative functions (see the following table).
Investments in education by operation (R$ thousands)
Brazil
Argentina
Chile
Mexico
Peru
Colombia
France
Total
2015
12,578
1,842
292
443
86
194
87
15,522
2016
7,400
2,925
404
534
417
1,326
175
13,181
2017
8,300
2,556
802
598
397
1,075
0
13,728
Natura Education Programme — Employees in the Brazilian Operation
2015
2016
2017
Grants conceded
Grants conceded/enrolments (%)
Amount invested in the Natura Education programme (R$ thousands)
214
65%
955
132
0%
535
210
78%
690
GRI 404-1
Average hours of
employee training
by functional
category
Director level
Management
Administrative
Operational
Apprentice
Intern
Women
Men
20
41
50
66
34
120
6
29
56
75
34
70
2015
Average
hours
18
34
44
72
34
101
2016
Average
hours
31
46
39
32
41
48
Women
Men
5.4
18.7
15.5
16.9
44.6
42.2
6.6
23.4
27.6
37.6
40.6
45.8
2017
Average
hours
6.2
20.9
18.6
30.0
43.4
43.2
Women
Men
32
45
44
37
43
49
29
48
44
25
41
47
58
2017 ANNUAL REPORT Culture for sustainability
In 2017, we further developed
the cultural management programme for all employees.
This focuses on the rapid changes society is undergoing,
driving the demand for faster decision making, team work
and the more effective use of digital tools in the workplace.
Our new administrative headquarters in Vila Jaguara
in the city of São Paulo were inaugurated in 2017 and
already incorporate this new way of working. The space
was designed to enable employees to work in an totally
collaborative, open environment with no barriers.
For Natura to conclude this transformation, we defined
four behaviours – two focused on relationship and two
focused on results –, that need to be internalized by all
our employees and which we believe will lead to important
changes that will leverage our results. This work began with
an alignment of principles and values between Natura’s
Executive Committee and the members of the Board of
Directors. It is our understanding that rather than inspiring
employees, senior management must be an example of the
desired behaviours. GRI 102-16
The first of the four behaviours is to place the consultants at
the centre of our decision making, inspiring every one of our
actions. The second behaviour involves bringing conflicts
out into the open and resolving them in a positive manner.
It is aimed at encouraging employees to discuss problems
arising in their daily business routines. This requires people
to be proactive and transparent. Great ideas emerge from
collective intelligence and from discussions that frequently
start from initially conflicting viewpoints. The third
behaviour concerns the result of the whole, recognizing that
each employee contributes to the achievement of Natura’s
targets and, in parallel, should feel responsible for the
company’s advances and its challenges. Lastly, the fourth
behaviour is recognizing and celebrating achievements,
creating a culture that commemorates the small day-to-
day victories that lead to success on a broader level.
Consumer engagement
In parallel with the cultural transformation movement
focused on our employees, we are working on engaging
our brand’s consumers more effectively in valuing diversity,
culture and sustainability. We believe in the potential our
products have to mobilize people around these causes and
to promote debate. In fact, some of our campaigns and
launches during the course of 2017 prioritized emerging
social questions.
The Faces makeup line adopted a new brand positioning
in which it assumes the city as a cause and launched
the digital campaign #Quemévocênarua, #tánacara,
#tánarua (#youinthestreet, #inyourface, #inthestreet). This
addresses current social tensions, such as harassment, the
imposition of beauty standards and prejudice (homophobia
and fatphobia, among others).
Chronos celebrated 30 years on the market and was
relaunched with new formulas and unique products.
The campaign addressed the question #velhapra (#oldfor)
with a film underscoring the fact that beauty is ageless.
The Natura Homem line was also relaunched with new
formulations and 12 products that question outdated
stereotypes of what it means to be a man, showing that
there are countless ways of exercising masculinity.
Still on the question of gender, we launched a makeup
campaign to celebrate diversity with the concept “all
beauty can”. The film is narrated by a man who is looking for
the woman of his life – and who he discovers inside himself,
a drag queen. The objective is to celebrate diversity and to
urge consumers to free themselves from pre-established
paradigms.
And to pay tribute to the characteristic creativity and good
humour which should be a source of pride for Brazilians,
we launched the Simpatias de Humor campaign for St
Valentine’s Day. This reinterpreted traditional lovers’ recipes
for winning over a companion in a fun way. The campaign
reinforced Natura’s positioning as the Casa de Perfumaria
do Brasil – a country teeming with creativity, originality and
irreverence.
On Amazon Day in September, we joined the
#TodosPelaAmazônia (#EveryonefortheAmazon) campaign
against the presidential decree extinguishing Renca, a
national reservation covering more than 47,000 square
kilometres and endangering preservation areas and
traditional peoples. These measures drew the attention
of consumers and society as a whole to the issues of
sustainable development, preserving the standing forest
and other key environmental questions..
#velhapra #Quemévocênarua
#tánacara #tánarua #TodosPelaAmazônia
59
2017 ANNUAL REPORT >>> The powerful, active voice of Brazilian music <<<
We believe that music is the voice of the people, where
everyone meets up. To enhance these meetings, Natura
Musical was repositioned with a focus on engaging and
getting closer to consumers, in particular younger ones.
As part of this strategy, we inaugurated Casa Natura
Musical in São Paulo, a space for live programming showing
Brazilian music as it is and promoting brand and product
experiences for consumers.
We also maintained our tenders to foster the development
of artists using company funding and incentive laws. The
tender system was renewed and simplified to offer greater
opportunities for the projects that drive the vibrant
Brazilian music scene. In addition to sponsoring the launch
of new works by artists associated with contemporary
questions such as identity and representation, the main
novelty in 2017 was partnerships with independent festivals,
promoting the circulation of contemporary music, enabling
it to reach a larger, more diverse audience. The funds
invested totalled R$ 5.6 million nationwide, with support
from the Rouanet law and state tax (ICMS) incentives for
cultural initiatives in Rio Grande do Sul, Minas Gerais, São
Paulo, Bahia and Pará.
Twenty-one artists and bands, ten festivals and two music
weeks are some of the causes that will be supported
by Natura Musical during the course of 2018. In the
“New launches” category there were 1,618 submissions
assessed by a network of representatives from the world
of music, including curators, producers, artists, journalists
and festival representatives. These new names join the
330 projects supported during the 13 years existence of
Natura Musical, which have ensured its recognition as the
main platform promoting Brazilian music. In the digital
environment, Natura Musical renewed content, introducing
dialogues on contemporary topics and creating a
community of more than 500,000 people engaged in
culture and behaviour.
Get to know all the projects supported here (in Portuguese).
60
2017 ANNUAL REPORT 4. ABOUT
THE REPORT
61
61
2017 ANNUAL REPORT Parameters for the elaboration of the
Natura 2017 Annual Report
Natura has been presenting
its economic-financial and socioenvironmental
performance in accordance with the Global Reporting
Initiative (GRI) guidelines for almost two decades. The first
report in this format refers to the year 2000. As was the
case last year, this report has been prepared in accordance
with the GRI Standards: Comprehensive option.
GRI 102-51, 102-52, 102-54, 102-55
The production of the material is oriented by the
commitments assumed in our 2050 Sustainability Vision
and our Materiality Matrix, which lists the six priority topics
in accordance with our stakeholder groups (the correlation
is shown further ahead). GRI 102-46
In the GRI Content Index, we have listed only
the most relevant indicators, the so-called material
indicators. But in accordance with our commitment to
transparency, we have opted to continue to report other
indicators, both GRI and those related specifically to the
business, in a complementary section (see Attachments).
This report also communicates Natura’s progress
in relation to the principles of the Global Compact,
to which the company is a signatory. The UNO (United
Nations Organization) initiative engages companies,
workers and civil society in promoting sustainable
growth and citizenship.
This report is part of the Natura annual results disclosure
process, which also includes the Management Report,
published on March 15, 2018, and a printed report
portraying the highlights of the year for Natura &Co
(the group formed by Natura, Aesop and The Body Shop),
released on the same date as this Natura 2017 Annual
Report: April 20, 2018.The information in the financial
statements covers all our operations, including Aesop,
an Australian company acquired in 2013, and The Body
Shop, which was acquired in September 2017.
For the non-financial information, however, the scope of
the indicators refers to Natura’s activities in Brazil and in
its International Operations, where the major part of our
operations and, consequently, our social and environmental
impacts are concentrated.
The Natura &Co corporate brand was launched in February
2018. The group is seeking to establish an integrated
approach to managing the businesses, while respecting
the independence and particularities of each of the three
companies. For the coming years, we will assess ways of
managing non-financial topics as a group. GRI 102-45
There were no changes with respect to materiality and
the understanding of its boundaries. The last review of the
materiality process was undertaken in 2014. Significant
changes in the data reported in previous years and any
alterations in the calculation bases or measurement
techniques are indicated throughout the text and tables in
the report. GRI 102-10, 102-48, 102-49
The data in this publication refer to the period from
January 1st to December 31st, 2017. The results disclosure
process is monitored by the Vice President of Marketing,
Innovation and Sustainability and by the office of the CEO of
Natura by means of the Corporate Affairs area. The annual
report was also assured by KPMG. GRI 102-32, 102-50,
102-56
For further information about this report, it is possible to
contact the team responsible for its publication via the
email relatorioanual@natura.net. In addition to this email
address, stakeholder groups are welcome to express their
opinions about Natura’s performance, management and
relationship practices via the social networks and in face-
to-face meetings. GRI 102-53
>>> Our material topics <<< GRI 102-40; 102-42
As part of the dialogue with the Natura relationship
network, we consult the main stakeholder groups
to define the company’s critical topics. In the most recent
process, conducted in 2014, six topics were defined:
water, education for the development of Natura
employees and consultants, climate change, waste,
transparency and product origin and valuing
social biodiversity. The process of defining materiality
took into account the company’s Sustainability Vision,
including company strategy up to the year 2050 and
the ambitions to be fulfilled by 2020.The process was
based on the identification of more than 20 pre-selected
sustainability topics drawn from the Vision and from
industry documents. These were presented in a series of
consultations undertaken in Brazil and in the International
Operations.
The perceptions of Natura’s priority stakeholder groups
(employees – including leaders –, Natura consultants,
customers and suppliers – including communities)
were taken into account, as well as the opinions of some
shareholders and representatives of local communities.
A total of more than 4,200 online questionnaires were
answered, complemented by 40 personal and telephone
interviews and a discussion panel with 18 participants
drawn from different groups.
62
2017 ANNUAL REPORT Materiality – GRI 102-43; 102-44; 102-46; 102-47; 103-1
Topic
Description
Where it occurs
GRI 103-1
Related aspects and
indicators
Correlation with the SDGs
Water
Relative reduction in water
consumption and pollution
throughout the value chain
and the neutralization of
water impact.
_Water sources and envi-
ronment
_Supplier communities
_Operational units
_Society in general
_Consumers (use and post-
-consumer disposal)
Education for the
development of employees
and NCs
Development of the consul-
tant network and employe-
es, including measures to
promote improvements in
public education.
_Natura consultants
_Employees
_Instituto Natura
_Society in general
Climate change
Waste
Reduction of greenhouse
gas emissions throu-
ghout the value chain and
neutralization by means of
projects that include social
benefits.
Development of packa-
ging that has a lower
environmental impact and
that promotes conscious
consumption.
_Suppliers
_Freight haulage operators
_Operational units
_Environment
_Product conception
_Operational units (zero
dejects)
_Freight haulage operators
_Recyclable material coo-
peratives
_Consumers (post-consu-
mer disposal)
Environment
Transparency and product
origin
Expanding visibility of busi-
ness practices and product
origin.
_Supplier chain
_Supplier communities
_Operational units
_Corporate management
_Consumers
Valuing social biodiversity
Promoting sustainable bu-
sinesses by using products
and services primarily from
the Pan-Amazon region.
_Product conception
_Supplier communities
_Procurement policies
_Consumers
_Pan-Amazon region
SDG 6. Clean water and
sanitation
SDG 4.Quality education
SDG 13. Climate action
SDG 12. Responsible con-
sumption and production
SDG 12. Responsible con-
sumption and production
SDG 15. Life on land
_Water
_Effluents and waste
GRI 303-1, 303-2, 303-3,
306-1 and 306-5
_Indirect economic im-
pacts;
_Training and education
GRI 203-1, 203-2, 404-1
and 404-3
_Economic performance
_Emissions.
GRI 201-2, 305-1, 305-2,
305-3, 305-4, 305-5
and 305-6
_Materials
_Effluents and waste
_Products and services
GRI 301-2, 306-2 and 301-3
_Environmental assessment
of suppliers
_Supplier assessment for
labour practices
_Supplier assessment for
human rights
_Supplier assessment for
impacts on society
_Product and service
labelling
_Products and services
GRI 102-9, 308-1, 414-1
and 417-1.
_Economic performance
_Indirect economic im-
pacts;
_Biodiversity
_Local communities
_Child labour
_Forced or compulsory
labour
_Supplier assessment for
human rights
_Grievance and complaint
mechanisms related to
human rights
_Products and services
GRI 201-1, 201-2, 203-1,
203-2, 304-1, 304-2,
413-1, 408-1, 409-1, 414-1
and 103-2
63
2017 ANNUAL REPORT GRI Content Index
GRI 101: Foundation 2016
GRI 101: No disclosures available
Standard disclosures
Organizational profile
GRI Standard
Disclosure
Page
Omission
Sustainable
Development Goals
GRI 102: Standard disclo-
sures 2016
102-1 Name of organization
102-2 Activities, brands,
products and services
102-3 Location of head-
quarters
102-4 Location of opera-
tions
102-5 Nature of ownership
and legal form
102-6 Markets served
102-7 Scale of organization
102-8 Information about
employees and workers
102-9 Supplier chain
102-10 Significant changes
in the organization and its
supplier chain
102-11 Precautionary ap-
proach or principle
102-12 Initiatives developed
externally
102-13 Participation in asso-
ciations
8
8
8
8
8
8
9-10
8, 86
52
There were no signifi-
cant changes in terms of
location, operation and
supplier chain. Read more
on pages 13 and 62.
31
116
116
8
Strategy
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 102: Standard disclo-
sures 2016
102-14 Declaration from
senior decision maker
102-15 Main impacts, risks
and opportunities
4-5
15-16
Ethics and integrity
GRI Standard
Disclosure
Page
Omission
GRI 102: Standard disclo-
sures 2016
102-16 Values, principles,
standards and norms of
behaviour
102-17 Mechanisms for
advice and concerns about
ethics
2, 59
17
Sustainable Development
Goals
16
16
Governance
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 102: Standard
disclosures 2016
102-18 Governance
structure
102-19 Delegation of
authority
13
13
64
2017 ANNUAL REPORT 16
5, 16
16
5, 16
16
GRI 102: Standard
disclosures 2016
102-20 Executive level re-
sponsibility for economic,
environmental and social
topics
102-21 Consulting stake-
holders on economic,
environmental and social
topics
102-22 Composition of the
highest governance body
and its committees
102-23 Chair of the highest
governance body
102-24 Nominating and
selecting the highest
governance body and its
committees
13
13
13-14
13
The selection of board members
takes into account their qualifica-
tions, complementary executive
experience, identification with
Natura’s business principles and
the absence of conflicts of inte-
rest. The term of office is one year,
which may be renewed upon
approval of the shareholders’
meeting. There are no specific
diversity criteria for the selection
of board members, but inclusion
and equality are valued and are
the focus of a specific Natura
policy. The company in fact has as
a target 50% women in executive
leadership positions by 2020. Read
more on page 13.
102-25 Conflicts of interest We value the best corporate go-
vernance practices. All decisions
regarding the operations are
submitted to management, in
accordance with the competen-
cies established in the company
bylaws. In the event of a potential
conflict of interest regarding
the matter under analysis and a
member of our decision making
bodies, we comply with corporate
legislation whereby the respective
member abstains from voting,
with the decision being taken
by the other members who are
impartial in relation to the matter
in question. Further information
is available in item 16.3 of our
Reference Form.
102-26 Role of highest
governance body in
setting purpose, values and
strategy
It is the function of the Board of
Directors to determine and to
monitor the implementation of
company strategy and to perio-
dically assess the performance
of the CEO and the Executive
Committee. The board members
analyse Natura’s quarterly and
annual management reports,
which include socioenvironmental
indicators considered relevant for
the company. Board members also
analyse the definition and review of
strategic planning, expansion pro-
jects and investment programs, risk
management and the definition of
profit share plan payouts to Natura
employees.
102-27 Collective
knowledge of the highest
governance body
102-28 Evaluating the
highest governance
body’s performance
13
4
As a result of the transformations
in the business related to the
acquisition of The Body Shop, the
self-assessment process for board
members was not conducted
in 2017
65
2017 ANNUAL REPORT 16
16
The critical concerns
that are not described
are related to strategic
information which is
restricted to senior
management and the
Board of Directors.
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
102-33 Communicating
critical concerns
102-34 Nature and total
number of critical concerns
102-35 Remuneration
policies
102-36 Processes for
determining remuneration
102-37 Stakeholder
involvement in
remuneration
102-38 Total annual
compensation ratio
102-39 Percentage increase
in total annual compensa-
tion ratio
It is the role of the Executive
Committee and the Board
of Directors to monitor
the Sustainability Vision,
which addresses Natura’s
main socioenvironmental
and business topics, and
which were raised by the
stakeholder consultation
processes. Read more on
page 13.
15
It is the role of the Executive
Committee and the Board
of Directors to monitor the
Sustainability Vision, which
addresses Natura’s main
socioenvironmental and bu-
siness topics. However, there
is no pre-established interval
for monitoring by the board.
Read more on page 15.
62
The board members analyse
Natura’s quarterly and an-
nual management reports,
which include socioenviron-
mental indicators considered
relevant for the company.
Board members also analyse
the definition and review of
strategic planning, expan-
sion projects and investment
programs, risk management
and the definition of profit
share plan payouts to Natura
employees.
The board members analyse
Natura’s quarterly and an-
nual management reports,
which include socioenviron-
mental indicators considered
relevant for the company.
Board members also analyse
the definition and review of
strategic planning, expan-
sion projects and investment
programs, risk management
and the definition of profit
share plan payouts to Natura
employees. Read more on
page 16.
Our senior management
remuneration policy and
practices are set forth in
item 13 of our Reference
Form.
Our senior management
remuneration policy and
practices are set forth in
item 13 of our Reference
Form.
The shareholders approve
management remune-
ration in the Ordinary
General Meeting. On this
occasion, they may com-
ment favourably or not on
remuneration. Our senior
management remunera-
tion policy is set forth in
item 13 of our Reference
Form.
88
89
66
2017 ANNUAL REPORT
Sustainable Development
Goals
8
Stakeholder engagement
GRI Standard
Disclosure
Page
Omission
GRI 102: Standard disclo-
sures 2016
102-40 List of stakeholder
groups
62
102-41 Collective bargain-
ing agreements
102-42 Identifying and
selecting stakeholders
102-43 Approach to
stakeholder engagement
102-44 Key topics and
concerns raised
All employees are covered
by collective agreements,
which are coordinated by
the Human Resources area
and comply with the stan-
dards and limits set forth in
local legislation.
62
Natura maintains ongoing
dialogues in diverse forums
with its stakeholder groups.
One of these involves
consumers, consultants
and researchers, among
others, in the co-creation
programme aimed at
generating ideas for inno-
vation. Similarly, on an an-
nual basis we evaluate the
quality of these relations
by means of satisfaction
and loyalty surveys with
our priority stakeholder
groups: employees, Natura
Consultants, suppliers,
supplier communities and
consumers. Read more on
pages 25, 53, 63, 96-97.
25, 53, 63, 96-97
Reporting practice
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 102: Standard disclo-
sures 2016
102-45 Entities included in
the consolidated financial
statements
102-46 Defining report
content and topic
boundaries
102-47 List of material
topics
102-48 Restatements of
information
102-49 Changes in
reporting
102-50 Reporting period
102-51 Date of most recent
report
102-52 Reporting cycle
102-53 Contact point for
questions regarding the
report
102-54 Claims of reporting
in accordance with the GRI
Standards
62
62, 63
63
62
62
62
62
62
62
62
102-55 GRI content index
64-77
102-56 External assurance
62, 118-119
67
2017 ANNUAL REPORT Material topics
Economic performance
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 201: Economic
performance 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
201-1 Direct economic
value generated and
distributed
201-2 Financial implica-
tions 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
63
11, 84
11, 84
84
16, 85
91
85
1, 5, 8, 16
2, 5, 7, 8, 9
13
Market presence
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 202: Market presence
2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
202-1 Ratio of lowest
starting salary to the local
minimum salary
202-2 Proportion of senior
management hired in the
local community
63
88, 90
88, 90
88
90
1, 5, 8
8
Indirect economic impacts
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 203: Indirect economic
impacts 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
203-1 Infrastructure
investments and services
supported
203-2 Significant indirect
economic impacts
63
43-44, 54
43-44, 54
43-45, 54-55, 109
2, 5, 7, 9, 11
44-45, 54
1, 2, 3, 8, 10, 17
68
2017 ANNUAL REPORT Procurement practices
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
204-1 Proportion of
spending on local suppliers
in significant units of the
operation
63
51
51
51
GRI 103: Management
approach 2016
GRI 204: Procurement
practices 2016
Anti-corruption
12
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 205: Anti-corruption
2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
205-1 Operations
submitted to assessments
related to corruption
205-2 Communication and
training in anti-corruption
policies and procedures
205-3 Confirmed cases of
corruption and measures
taken
63
98-99
98-99
98
98
99
16
16
16
Anti-competitive behaviour
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 206: Anti-competitive
behaviour 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
206-1 Legal actions for
anti-competitive
behaviour, anti-trust and
monopoly practices
16
63
100
100
100
69
2017 ANNUAL REPORT Materials
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
301-1 Materials used by
weight or volume
301-2 Recycled input
materials used
301-3 Reclaimed
products and their
packaging materials
42
63
41-42
41-42
42-43, 105
41
GRI 103: Management
approach 2016
GRI 301: Materials 2016
Energy
8, 12
8, 12
8, 12
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 302: Energy 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
302-1 Energy consumption
inside the organization
302-2 Energy consumption
outside the organization
302-3 Energy intensity
302-4 Reduction of energy
consumption
63
101
101
101, 110
103
103
104
7, 8, 12, 13
7, 8, 12, 13
7, 8, 12, 13
7, 8, 12, 13
Water
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 303: Water 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
303-1 Total water
withdrawn by source
303-2 Water sources
significantly affected by
withdrawal of water
303-3 Percentage and total
volume of water recycled
and reused
63
42
42
42-43, 104
104
104
70
6
6
6, 8, 12
2017 ANNUAL REPORT
Biodiversity
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 304: Biodiversity 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
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 operations
63
44
44
107
44
108
108
6, 14, 15
6, 14, 15
6, 14, 15
6, 14, 15
Emissions
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 305: Emissions 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
305-1 Direct (Scope 1)
GHG emissions
305-2 Energy indirect
(Scope 2) GHG emissions
305-3 Other indirect
(Scope 3) GHG emissions
305-4 GHG emissions
intensity
305-5 Reduction of GHG
emissions
305-6 Emissions of
ozone-depleting
substances (ODS)
305-7 Nitrogen oxides
(NO, ) sulphur oxides (SOx),
and other significant air
emissions
63
37, 109
37, 109
37-38
37-38
37-38
37
37-40
101
101
71
3, 12, 13, 14, 15
3, 12, 13, 14, 15
3, 12, 13, 14, 15
13, 14, 15
13, 14, 15
3, 12, 13
3, 12, 13, 14, 15
2017 ANNUAL REPORT Effluents and waste
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
103-1 Explanation
of the material topic
and its boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
GRI 306: Effluents
and waste 2016
306-1 Water discharge by
quality and destination
306-2 Waste by type and
disposal method
306-3 Significant spills
306-4 Transport of
hazardous waste
306-5 Water bodies
affected by water
discharges and/or runoff
63
41, 109
41, 109
106
105
107
105
106
3, 6, 12, 14
3, 6, 12
3, 6, 12, 14, 15
3, 12
6, 15
Environmental Compliance
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 307: Environmental
compliance 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and
its components
103-3 Evaluation of
management approach
307-1 Non-compliance with
environmental laws and
regulations
63
109
109
109
16
Supplier Environmental Assessment
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 308: Supplier
environmental
assessment 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
308-1 New suppliers that
were screened using
environmental criteria
308-2 Negative
environmental impacts
in the supply chain and
actions taken
63
52
52
52
110
72
2017 ANNUAL REPORT Employment
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 401: Employment 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
401-1 New employee hires
and employee turnover
401-2 Benefits provided
to full-time employees
that are not provided to
temporary or part-time
employees
401-3 Parental leave
63
56
56
92
91
92
5, 8
8
5, 8
Labour relations
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 402: Labour relations
2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
402-1 Minimum notice
periods regarding
operational changes
63
56
56
87
8
Occupational health and safety
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 403: Health
and safety 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
403-2 Types of injury and
rates of injury, occupational
diseases, lost days, and
absenteeism, and number
of work-related fatalities
403-3 Workers’
representation in formal
joint management–worker
health and safety
committees
63
95
95
96
95
73
3, 8
3, 8
2017 ANNUAL REPORT Training and education
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 404: Training and
education 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
404-1 Average hours
of training per
year per employee
404-2 Programs for
upgrading employee
skills and transition
assistance programs
404-3 Percentage of em-
ployees receiving regular
performance and career
development reviews
63
57
57
57-58
For layoffs resulting from
restructuring, we provide em-
ployees with support for their
career transition by offering a
set of special conditions. Read
more on pages 26, 57
94
4, 5, 8
8
5, 8
Diversity and equal opportunity
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 405: Diversity and equal
opportunity 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
405-1 Diversity of
governance bodies and
employees
405-2 Ratio of basic
salary and remuneration of
women to men
63
56
56
56
89
5, 8
5, 8, 10
Non-discrimination
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 406:
Non-discrimination 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
406-1 Incidents of
discrimination and
corrective actions taken
63
97
97
97
74
5, 8, 16
2017 ANNUAL REPORT
Freedom of association and collective bargaining
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
407-1 Operations and sup-
pliers in which the right to
freedom of association and
collective bargaining may
be at risk
63
97
97
97
GRI 103: Management
approach 2016
GRI 407: Freedom of
association and collective
bargaining 2016
Child labour
8
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
408-1 Operations and
suppliers at significant risk for
incidents of child labour
GRI 408: Child labour 2016
63
99
99
99
8, 16
Forced or compulsory labour
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
409-1 Operations and
suppliers at significant risk
for incidents of forced or
compulsory labour
63
99
99
99
GRI 103: Management
approach 2016
GRI 409: Forced or
compulsory labour 2016
Security practices
8
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 410: Security practices
2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
410-1 Security personnel
trained in human rights
policies or procedures
63
99
99
99
75
2017 ANNUAL REPORT Rights of indigenous peoples
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
411-1 Incidents of violations
involving rights of
indigenous peoples
63
100
100
100
GRI 103: Management
approach 2016
GRI 411: Rights of
indigenous peoples 2016
Local communities
2
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 413: Local
communities 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
413-1 Operations with local
community engagement,
impact assessment, and
development programs
413-2 Operations with
significant actual and
potential negative impacts
on local communities
63
44, 47, 51
44, 47, 51
112
44, 51
1, 2
Supplier social assessment
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 414: Supplier social
assessment 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
414-1 New suppliers that
were screened using social
criteria
414-2 Negative social
impacts in the supply chain
and actions taken
63
46, 52
46, 52
46, 52
114
76
5, 8, 16
2017 ANNUAL REPORT Public policy
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
GRI 415: Public policy 2016
415-1 Political contributions
63
100
100
100
16
Customer health and safety
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 416: Customer health
and safety 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
416-1 Assessment of the
health and safety impacts
of product and service
categories
416-2 Incidents of
non-compliance
concerning the health
and safety impacts of
products and services
Marketing and labelling
63
113
113
113
113
16
GRI Standard
Disclosure
Page
Omission
Sustainable Development
Goals
GRI 103: Management
approach 2016
GRI 417: Marketing and
labelling 2016
103-1 Explanation of the
material topic and its
boundaries
103-2 Management
approach and its
components
103-3 Evaluation of
management approach
417-1 Assessment of the
health and safety impacts
of product and service
categories
417-2 Incidents of
non-compliance concern-
ing the health and safety
impacts of products and
services
63
30, 113
30, 113
30, 41
113
77
12, 16
16
2017 ANNUAL REPORT
5. 2050 SUSTAINABILITY
VISION AMBITIONS
78
78
2017 ANNUAL REPORT on target or already achieved
on schedule
behind schedule
Ambition for 2020
Related SDG
2017 Performance
Status
Detailing of Sustainability Vision ambitions
Topic
Integrated
manage-
ment
Management
model
To implement the valuation
of socioenvironmental exter-
nalities, taking into account
the positive and negative im-
pacts of the extended value
chain (from the extraction of
raw materials to the disposal
of products) for the Natura
brand.
Brands
The environmental and social
footprints of all Natura brand
products will be disclosed, as
will all the respective impro-
vement commitments.
Government
and society
Stimulate public discussion
and debate around our
material topics based on
the review of the materiality
matrix elaborated in 2014.
Ethics and
transparency
For the Natura brand, to
implant full transparency in
the provision of information
about products and the
company’s progress towards
its Sustainability Vision.
Governance
for sustaina-
bility
Implant a Consulting Council
comprising external specia-
lists to assess the company’s
progress and to help develop
strategy.
Climate
change
Reduction
of envi-
ronmental
impact
For the Natura brand, reduce
relative greenhouse gas
emissions (scopes 1, 2 and 3)
by 33%.
We continue to offset all the
emissions that cannot be
avoided through initiatives
that in addition to reducing
and/or sequestering gree-
nhouse gases, are aimed at
driving socioenvironmental
benefits, primarily in the
Pan-Amazon region
To implement a strategy to
diversify sources of renewa-
ble energy for the Natura
operations in Brazil.
To collect and recycle 50%
of the volume of waste
generated by Natura product
packaging in Brazil
(in t equivalent).
Energy
Waste
79
We have made significant progress with the EP&L
model. In 2017, we calculated the results for 2014 to 2016
based on a methodology that accounts for the envi-
ronmental impacts generated throughout the Natura
value chain. We also advanced in incorporating social
topics into the calculations, assessing the social and en-
vironmental impacts generated by the Natura carbon
offsetting projects. We face the challenge of implemen-
ting the EP&L in management and of building a model
for the valuation of social impacts throughout our value
chain by 2020.
We disclose the impacts of products bought by consu-
mers. Currently under review, the transparency strate-
gy will include the definition of the methodologies to
calculate product footprints from 2018.The challenge
for the company is to implant a balance sheet of its
footprint for disclosure to consumers by 2020.
We have worked with a series of civil society orga-
nizations, companies, government entities, among
others, to promote an agenda for the common good
which also drives innovation and evolution in Natura
strategies.
The evolution and updating of the Sustainability Vision
was postponed as a question of strategic priority. The
review is being undertaken in 2018. Regarding transpa-
rency in relation to products, the social and environ-
mental footprint strategy will provide greater clarity
about our choices. In 2017, diverse positions assumed
by the company, such as bans on certain ingredients
and on animal testing, were presented to consumers
on our website. In 2018, the strategy will evolve to ensu-
re achievement of the 2020 ambition.
In function of the company’s strategy and the recent
expansion of the group, this ambition will be reviewed
in 2018.
In 2017, the company had a 0.8% increase in relative
GHG emissions and a 2% increase in absolute emissions
compared with 2016. This is due mainly to an increase
in items with higher relative emissions, as well as to
the growth of our International Operations, which
intensified the impact of exports and the transporta-
tion of products to consultants. In the comparison with
2012 (the base year of the commitment), there was a
cumulative reduction of 0.5% in relative emissions. We
continue to seek alternatives that will enable us to ho-
nour our commitment through measures such as op-
timizing the raw materials logistics process, achieving
greater efficiency in delivering product to consultants
in Brazil, diversifying our fleet and increasing the use of
materials that provoke a lower environmental impact in
our products.
From 2007 to 2016, 35 projects totalling 2,945,158 tCO2e
were contracted. Forestry projects accounted for
37%, and energy projects for the other 63%. 39% of the
projects are linked with the Pan-Amazon region and
six are in other countries in Latin America. In 2017, we
launched two new initiatives: the Compromisso com
o Clima (Climate Commitment) tender, in partnership
with Itaú Unibanco, and the Payment for Environmen-
tal Services project in the Amazon.
We continue to prioritise the purchase of cleaner
energy. Our energy matrix comprises approximately
96% energy from renewable sources. The diversifica-
tion strategy is at the planning stage and will be up and
running by 2020.
2017: 29% 2020: 50%
The total consists of the results of two shared responsi-
bility programmes conducted jointly with the industry
and with our suppliers.
2017 ANNUAL REPORT Packaging
To use at least 10% post-
-consumer recycled material
in the total mass of Natura
packaging in Brazil.
Reduction
of envi-
ronmental
impact
Water
To use at least 74% recyclable
material in the total mass of
Natura packaging in Brazil.
To ensure that 40% of the units
billed by Natura in Brazil have
eco-efficient packaging.
For the Natura brand in
Brazil, implement a strategy to
reduce and neutralize impact,
based on measurement of our
water footprint, taking into ac-
count the entire value chain.
Sustaina-
ble social
biodiversity
businesses
Social bio-
diversity
To reach 10,000 families in
the Pan-Amazon production
chains.
To achieve a business
volume of R$ 1 billion in the
Pan-Amazon region
To implant a technological
industrial park (Ecoparque) in
the Brazilian Amazon region
Formula-
tions
To guarantee that 30% of
the total inputs consumed
by Natura in Brazil in value
come from the Pan-Amazon
region.
Positive
social
impact
Natura
Beauty
Consultant
To significantly increase
the real average income of
Natura Beauty Consultants
in Brazil.
2017: 4,63%; 2020: 10%
Worthy of note was the increased use of recycled
glass. Our challenge is to expand the recycling chain
in Brazil.
2017: 50%; 2020: 74%
Making progress in packaging ecodesign to increase
the recyclability of some product categories is one of
the challenges we face in order to achieve the 2020
target.
2017: 21%; 2020: 40%
We need to expand these chains in Brazil by incre-
asing the use of post-consumer recycled material,
refills and renewable packs.
For the Natura brand in Brazil, implement a strategy
to reduce and neutralize impact, based on measure-
ment of our water footprint, taking into account the
entire value chain.
2017:4,294 families; 2020:10,000 families
We more than doubled the indicator in 2017.
Achieving the target depends on the strategy
of increasing the consumption of Pan-Amazon
vegetable ingredients in proportion with Natura’s
growth.
2017: 1.222 billion; 2020: 1 billion. The target was
achieved ahead of plan, in 2016.
We inaugurated the Ecoparque in Benevides (Pará)
in 2014. It produces 60% of Natura toilet soaps. Since
2015, Symrise, a German natural oils and essences
manufacturer, has been operating in the same space.
We want to expand partnerships with other compa-
nies seeking to develop business locally based on the
concept of industrial symbiosis.
2017:18.1%; 2020:30%
The purchase of Pan-Amazon ingredients grew in
absolute amounts, but there was a reduction in share
in relation to total inputs acquired. Our challenge is to
increase the use of these ingredients in the portfolio
in proportion with the company’s growth.
The growth plan for consultants launched in 2017 has
already impacted remuneration, which grew by 17%
for consultants and 61% for leaders. Our challenge
is to define the role Natura should play in boosting
consultants’ income by 2020.
Stimulate their interest in on-
going learning and provide
a broad educational offering
that meets their needs.
In 2016, we developed an education plan for con-
sultants and their families based on the consultant
HDI (Human Development Index) drivers, offering
partial grants and exclusive conditions for learning
experiences.
Create an indicator to assess
the human development of
this stakeholder group and
develop a strategy to promo-
te a significant improvement.
Expand the collaboration
network, supporting
socioenvironmental
entrepreneurial actions.
We created the HDI for consultants in Brazil. We have
been tracking it for four years to shape the develop-
ment of initiatives such as healthcare and educational
benefits.
The Movimento Natura is a digital platform that con-
nects those organizing socioenvironmental projects
with people who want to help with them. It receives
around 2.2 million accesses a year. More than 50,000
people benefit from the projects supported in the he-
althcare, education, culture, sports and other areas.
80
2017 ANNUAL REPORT Communi-
ties
Positive
social
impact
Evolve the indicators for
measuring human and
social development in our
communities and develop a
plan to promote significant
improvement.
Suppliers
Supply
chain
Employees
Develop a strategy for the
social biodiversity territories in
the Pan-Amazon region and
the communities surrounding
our main operations in Brazil,
by means of dialogue and
collaborative construction
together with the local popu-
lations and actors.
Evolve the supplier selection
and management process,
furthering integrating socio-
environmental and financial
parameters.
To guarantee the traceability
of 100% of the inputs produ-
ced by the direct manufac-
turers (last link) by 2015. To
implement a traceability
programme for the remai-
ning links in the Natura brand
value chain by 2020.
For the Natura brand, reach
the rate of 50% women oc-
cupying leadership positions
(director level and above)
For the Natura brand in
Brazil, to have 8% disabled
employees in the workforce.
Implement a strategy to le-
verage employees’ execution
potential through engage-
ment in the Natura culture.
Culture for
sustaina-
bility
Consumers Define priority topics and
implement a strategy that
mobilizes Natura brand
consumers.
Stakeholder
engage-
ment
Institutionalize a governance
model with external engage-
ment to evolve management
and sustainability strategy
We maintained the actions in the Local Development
Programme in Benevides, São Paulo and Cajamar, whi-
ch improved the aptitude and organization of the local
development networks. In the last two years, we have
also conducted some experiments, such as analysis of
the Social Progress Index in the Mid Juruá region (Ama-
zonas) and in Cajamar. We also support the Cidades
Sustentáveis (Sustainable Cities) movement run by the
Rede Nossa São Paulo, for the city of Cajamar. These
analyses will enable us to build the impact indicator
methodologies which will help us execute the strategy.
This will allow us to gain more in-depth understanding
of the topics that are important for these territories
and to enhance the social and human development
indicators.
To generate transformations at scale, we work in ar-
rangements and partnerships with local governments,
grass roots communities and companies to promote
territorial development solutions. In 2017, we focu-
sed on consolidating support and strengthening the
local networks in the Mid Juruá and Lower Tocantins
territories and in the communities surrounding our
operations in Cajamar and Benevides.
In recent years, the company has been making a major
effort to increase productivity throughout its chain.
The process of reviewing and assessing suppliers will be
reinforced from 2018 on.
We finalized the traceability of 100% of the manufac-
turers link of our production inputs. From 2018, we will
implement a traceability strategy for all the links of the
chains considered critical. By means of a verification
system that has already been implemented we monitor
all the biodiversity input chains.
2017: 33%; 2020: 50%
The growth in the rate of women in senior mana-
gement is the result of the gender equality strategy,
aligned with the Natura Diversity Policy created in 2016.
We are, however, still faced with the challenge of in-
creasing the number of women in leadership positions
by 2020.
2017: 6%; 2020: 8%
Worthy of note is the gender balance among disabled
employees (50% men, 50% women).
In 2017, we initiated the cultural management front
aimed at strengthening the desired Natura culture
which will enable business strategy and organizational
transformation while respecting our essence. We also
defined four priority behaviours: place the consultant
at the centre of our decisions; bring conflicts out into
the open and resolve them constructively; pursue the
result of the whole; and celebrate victories. Our next
challenge will be to extend this journey to the entire
organization and to expand reflection on the desired
culture and priority behaviours for the long term.
We have defined priority claims to build the value of
sustainability among the end consumers and, based on
these, we will develop a mobilization strategy by 2020.
The topics include: living forest; 100% organic alcohol;
climate commitment; sustainable packaging; intelli-
gent refills; quality education; no animal testing; beauty
free from stereotypes; relationship network.
Dialogues with stakeholders of interest for the evolution
of our sustainability strategy are being conducted with
different audiences in the company’s different projects
and initiatives. For example, in 2017 we conducted the
New Economy Dialogues in partnership with the B
Corp movement; we launched the carbon offsetting
platform, addressing the question of climate change
together with Itaú Unibanco. However, we recognize
that it is a challenge to keep our main stakeholder
groups connected and engaged in the ongoing pro-
cess of assessing our performance and the evolution of
our Sustainability Vision.
81
2017 ANNUAL REPORT 6. Attachments
82
Index
Economic-financial management
People management
Labour practices
Remuneration and benefits
Turnover
Career development
Health and safety
Relationship quality
Freedom of association
Non-discrimination
Ethics and human rights
Anti-corruption
Human rights
Indigenous people’s rights
Public policies
Anti-competitive behaviour
Environmental management
GHG emissions
Energy
Water
Waste and effluents
Biodiversity
Investment in environmental protection
Environmental compliance
Environmental assessment of suppliers
Suppliers’ environmental impact
Natura Beauty Consultants
Surrounding communities
Consumers
Consumer health and safety
Society
Social assessment of suppliers
Support and sponsorship actions
Leadership and social influence
Institutional representation
84
86
87
88
92
94
95
96
97
97
98
98
99
100
100
100
101
101
101
104
105
107
109
109
110
110
111
112
113
113
114
114
115
116
116
83
2017 ANNUAL REPORT Economic-financial management
Direct economic value generated and distributed GRI 103-2; 103-3; 201-1
Direct economic value generated (R$ million) 1
Total gross revenues
2015
12,820
2016
12,138
2017
13,824
Economic value distributed (R$ million) 1
Operating costs
Employee salaries and benefits
Profits distributed
Payments to suppliers
Payments to government
Payments to creditors
Community investments
Total
2015
3,394
1,245
369
3,147
2,149
2,356
7
2016
3,946
1,327
130
2,763
2,009
1,775
10
2017
4,866
1,836
214
3,393
2,000
1,040
18
12,666
11,960
13,367
1 Consolidated economic performance for Natura &Co (including Natura, Aesop and The Body Shop).
Economic value retained (R$ million)
“Direct economic value generated” less “Economic value distributed”
2015
154
2016
178
2017
456
See the full value added statements in our consolidated Financial
Statements, available here (in portuguese)
84
2017 ANNUAL REPORT Financial implications and other risks and opportunities arising from climate change
GRI 201-2
The topics climate change and social biodiversity are part of the Natura risk matrix, monitored by the Executive
Committee, and, through the supporting committees, also by the Board of Directors. In relation to climate change-
related risks, our major concern is understanding, monitoring and mitigating whatever may affect our value chain.
While we work on defining a specific analysis of the effects associated with climate change in the risk management
process, strategic mitigation projects are in place throughout the organization and have become formal company
sub-processes, such as the Carbon Neutral program, which prioritizes the reduction of direct and indirect emissions
throughout the chain, as well as offsetting 100% of the emissions that cannot be avoided. The offsetting measures
are voluntary and non-mandatory and do not portray the financial implications of climate change-related risks.
Read more in the inventory, accessible in Brazil’s public emissions record (Registro Público de Emissões, here (in
Portuguese), and on page 37, in Reduction in environmental impact. On page 15, we also present our risk management
process in full.
Government funds GRI 201-4
Assistance received from the government (R$ millions)
Types of assistance
Tax incentives/credits 1
Subventions for investments, research and development (R&D) and other relevant types
of grants 2
Other financial benefits received or receivable from any government for any company
operation
Total
2015
2016
2017
3
14
1
18
4
18
3
25
1.5
17.6
1.6
20.7 3
1 Income tax incentives (Corporate Income Tax- IRPJ) related to Brazil’s Rouanet and Sport laws, to the Child’s and Adolescent’s Rights Fund, to the worker’s
meal program and to the ICMS tax incentive for the Natura Musical projects. 2 Incentive related to the two-month extension to maternity leave, introduced
by Decree 7.052/2009. The expense is not deductible in the calculation of actual profit and in the calculation base for CSLL (Contribuição Social sobre o
Lucro Líquido) tax; however, it is deductible in full from corporate income tax (IRPJ). 3 With the reduction in the taxable profit, which is the basis for Lei do Bem
and other incentives, the use of the benefit was limited.
85
2017 ANNUAL REPORT
People management
Profile
Information about employees GRI 102-8
Employees by type of work contract and gender 1 2
Type of contract
Fixed term
Permanent
Total
2015
2016
2017
men
women
total
men
women
total
men
women
total
17
2,408
2,425
83
4,083
4,166
100
6,491
6,591
9
2,327
2,336
99
3,962
4,061
108
6,289
6,397
12
2,343
2,355
75
3,881
3,956
87
6,224
6,311
1 Expatriates, interns, members of the Board of Directors and Instituto Natura employees were not taken into account. We used as a reference the headcount
at the end of December. 2 In function of the adaptation to the GRI Standard, there were changes in reporting certain information compared with previous
years.
Employees by type of work contract and region
Region
Brazil
Argentina
Chile
Mexico
Peru
Colombia
France
Total
Fixed
term
Perma-
nent
58
24
0
0
12
5
1
5,093
526
185
117
218
317
35
2015
Total
5,151
550
185
117
230
322
36
Fixed
term
Perma-
nent
2016
Total
Fixed
term
Perma-
nent
2017
Total
51
42
0
0
14
0
1
4,856
4,907
555
185
124
213
339
17
597
185
124
227
339
18
54
28
0
0
5
0
0
4,711
4,765
614
189
116
213
362
19
642
189
116
218
362
19
100
6,491
6,591
108
6,289
6,397
87
6,224
6,311
86
2017 ANNUAL REPORT Employees by type of employment
Type of employment
2015
2016
2017
men
women
total
men
women
total
men
women
total
Full-time
Part-time
Total
2,425
4,166
6,591
2,336
4,061
6,397
2,355
3,955
6,311
0
0
0
0
0
0
0
1
0
2,425
4,166
6,591
2,336
4,061
6,397
2,355
3,956
6,311
Employees by age group
< 30 years
From 30 to 50 years
> 50 years
Total
Employees by functional category
Director level
Management
Administrative
Production
Total
Members of governance bodies
Board of Directors
Labour practices
2015
1,365
4,729
497
6,591
2015
54
666
3,625
2,246
6,591
2015
8
2016
1,262
4,647
488
6,397
2016
54
631
3,611
2,101
6,397
2016
9
2017
1,214
4,619
478
6,311
2017
53
596
3,608
2,054
6,311
2017
10
Minimum notice period regarding operational changes GRI 402-1
There is no minimum notice period for operational changes in collective agreements and conventions, but Natura
complies with the minimum periods established in legislation and/or in union agreements.
87
2017 ANNUAL REPORT Remuneration and benefits
Ratio of lowest starting salary to the local minimum salary
GRI 103-2; 103-3; 202-1
Natura is against any kind of discrimination or inequality based on race, colour, sex, age or religious belief.
Consequently, there are no salary distinctions related to these aspects. Our salary levels are in accordance with
competitive remuneration in the respective local markets. In Colombia and in Brazil, the operational production
units are aligned with local market practices and comply with collective conventions, which means that salaries are
closer to the legal minimum salaries. Particularly in Natura Argentina, there are positions in which the remuneration
is determined by union agreement. Coincidentally, these positions are occupied by women, which means that their
salaries are closer to the local minimum salary. The remuneration of third-party employees is determined based on
negotiations with the service providers, who are responsible for complying with all legal obligations, including the
conditions established in the collective agreements and conventions applicable to their categories.
Ratio of the lowest salary to the minimum salary, by gender
Operational unit 1
Brazil
Argentina
Chile
Peru
Mexico
Colombia
2015
women
40%
59%
93%
233%
489%
1%
men
40%
213%
138%
378%
635%
1%
2016
women
60%
52%
92%
171%
545%
1%
men
60%
205%
303%
374%
685%
1%
2017
women
60%
69%
136%
171%
348%
1%
men
60%
222%
294%
374%
462%
1%
1 The minimum salaries used for the comparisons above were: Brazil (R$ 937.00), Argentina (ARS 8,860.00), Chile (CLP 270,000.00), Colombia (COP
737,717.00), Mexico (MXN 2,401.20) and Peru (PEN 850.00).
Ratio of total annual remuneration of the best paid individual to the median annual salary of all employ-
ees GRI 102-38
As in the previous year, it was not possible to report this in line with the GRI standard requirements due to the
confidential nature of this information.
88
2017 ANNUAL REPORT Percentage increase in total annual remuneration GRI 102-39
Country
Brazil
Argentina
Chile
Colombia
Mexico
Peru
Ratio of the increase in the annual remuneration of the highest paid individual to the
median increase in annual remuneration for all employees 1 (%)
1.12%
1.12%
0.28%
1.47%
0.53%
0.62%
1 In function of the adaptation to the GRI standard, there is no basis for comparison with the previous years. The concept of total annual remuneration was
used for the response. This includes: basic annual salary, 13th and 14th salaries, 1/3 of salary relative to vacation pay, bonus from the profit share program
and sales bonus, when applicable and in accordance with the country.
Ratio of women’s salary to men’s salary GRI 405-2
From 2017, we started reporting the data for our International Operations, encompassing administrative and
management positions, which are the most representative. In general terms, we reiterate that our salary scale is not
defined by gender. The variations between women’s and men’s salaries occur in function of the amounts established
for each position and function in the Natura organizational structure. It is not possible to compare the total annual
package, which includes remuneration and benefits, because the benefits are not quantified by gender or functional
category.
In Brazil, the collective agreements represent an increase from 2% to 5% in the salaries of operational and
administrative employees. Management employees had a fixed amount incorporated into their basic salary. For
female administrative employees, the positive salary difference is due in particular to sales bonuses, which increase
monthly remuneration. The sales bonuses also have a positive impact on the remuneration of women who occupy
administrative positions in the International Operations.
Ratio of women’s salary to men’s salary by functional category – Brazil
Director level
Management
Administrative
Production
2015
-15%
-4%
20%
-23%
2016
-10%
-1%
10%
-22%
2017
-19%
-3%
18%
-22%
89
2017 ANNUAL REPORT Ratio of women’s salary to men’s salary – 2017
Country
Argentina
Chile
Colombia
Mexico
Peru
Management
Administrative
-11%
3%
-9%
7%
-5%
3%
33%
-4%
-1%
-28%
Hired in the local community GRI 103-2; 103-3; 202-2
Members of senior management hired in the local community – Brazil
2015
2016
2017
All members of senior management hired 1
Cajamar2
Benevides (Ecoparque)3
Natura São Paulo (NASP)4
Natura Lapa5
169
0.0%
0.0%
0.0%
3.0%
164
0.0%
0.0%
0.0%
4.3%
59
0.0%
0.0%
0.0%
0.0%
1 In 2017, we did not hire members of senior management resident in the communities surrounding Natura facilities. As part of the measures to develop
surrounding communities, we prioritise hiring employees for the organisation’s so-called entry level positions. To publicize vacancies in the company’s
apprentice programme, in 2017 we participated in social and cultural events and selected a group of schools in the local communities to make presentations
which described the opportunities offered by the programme. For effective vacancies, we conducted campaigns in the city of Cajamar and in the district
of Vila dos Remédios, in São Paulo, which is where the Natura headquarters are located. 2 Includes the entire city of Cajamar (SP). 3 Includes the Pará
municipalities of Benevides, Marituba, Santa Bárbara and Santa Izabel, as well the Mosqueiro district in Belém. 4 Includes the Jaguara district, which is part
of the city of São Paulo (SP) and comprises the boroughs Vila Jaguara, Vila Piauí, Vila dos Remédios and Jardim Marisa. 5 Includes the districts Lapa, Vila
Leopoldina and Barra Funda, all located in the city of São Paulo (SP).
Senior management members hired in the local community – International
Operations 1
2015
2016
2017
Argentina
Chile
Colombia
Mexico
Peru
Total
59%
0.0%
20%
50%
66%
40%
67%
20%
25%
70%
67%
57%
71%
25%
40%
75%
57%
61%
1 A major part of senior management positions are occupied by nationals of the country in which the Natura operation is located. The increase in all the
countries is the result of internal succession appointments.
90
2017 ANNUAL REPORT Obligations of the defined-benefit and other pension plans GRI 201-3
Pension plan 1
Contributions made by Natura (R$ million)
2015
4,642
20162
3,753
20172
3,397
1 The Natura Saving Incentive is a defined contribution plan administered by a supplementary pension organization. The employees’ contribution varies
from 1% to 5% of their salary, while Natura contributes 60% of the employee’s contribution, limited to a salary of R$ 19,140.00. 2 The decrease in the amount
invested in the last two years is due to the reduction in the headcount and the withdrawal of funds by employees upon termination, as well as the non-
adhesion of new participants to the plan, which is voluntary.
Employee Benefits – Brazil GRI 401-2
Benefits
Dental assistance
Check-up for executives
Restaurant in Cajamar, Benevides (Ecoparque), Natura São Paulo (NASP) and Itupeva Hub 1
Food allowance
Private pension
Employee Support Programme (EAP in the Portuguese acronym)
Nursery assistance
Nursery allowance
Allowance for employees with disabled children
Gym subsidy (sales force)
Happy Day (day off on employee’s birthday)
Birthday Present (employees receive a Natura product on their birthday)
New-born baby kit (female employees or partners of employees who have babies receive a Natura Mamãe & Bebê line bag of products)
Payroll deductible
Pharmacy purchases
Accompaniment of mothers-to-be
Mothers-to-be meetings
Maternity leave of up to 180 days
Paternity leave of up to 40 days
Christmas card/food hamper
Presents for employees ’ children aged up to 9 years of age
Events (recognition for length of service, year-end party etc.)
Well-being space (beauty salon with hairdressing, make-up, massage, nail care, barber services etc.) 1
Convenience Space (sale of Natura products at special prices) 1
1 Benefits also offered to temporary employees. The others are offered only to full-time employees.
91
2017 ANNUAL REPORT Maternity and paternity leave GRI 401-3
The retention rate has remained stable during recent years. From 2016, when we introduced 40-day paternity leave,
there was an increase in the number of employees using the benefit. In parallel, the maternity leave rate has continued
to drop.
Maternity and paternity leave
Employees who were entitled to parental leave
Employees who took parental leave
Employees who returned to work after the end of the leave
Employees who returned to work after the end of the leave and
were still employed 12 months later
Return rate (%) 1
Retention rate (%)
men
women
men
women
men
women
men
women
men
women
men
women
2015
2,163
2,988
77
158
76
145
49
126
99%
92%
89%
79%
2016
2,065
2,842
87
139
88
151
71
107
101%
109%
93%
74%
2017
2,129
2,839
111
90
112
90
73
105
101%
100%
83%
70%
1 Frequently the leave does not end in the same year it is requested, consequently in some years the number of people returning is higher than those
starting leave.
Turnover
New employees and turnover rate GRI 401-1
In 2017, the number of hires grew 37% compared with the previous year, without significant distinction by gender
and particularly in the age group of up to 30 years. The increase in hiring is concentrated in Brazil, explained by the
expansion of the local structure and the opening of the new channels.
Employees hired, by age
group
< 30 years
From 30 to 50 years
> 50 years
Total
2015
2016
2017
Number (un.)
Rate (%)
Number (un.)
Rate (%)
Number (un.)
Rate (%)
430
478
9
917
46.89%
52.13%
0.98%
100%
361
434
10
805
44.84%
53.91%
1.24%
100%
644
446
11
1,101
58.5%
40.5%
1.0%
100%
92
2017 ANNUAL REPORT Employees hired, by gender
Men
Women
Total
Employees hired, by region
2015
2016
2017
Number (un.)
Rate (%)
Number (un.)
Rate (%)
Number (un.)
Rate (%)
393
524
917
42.86%
57.14%
100%
2015
307
498
805
38.14%
61.86%
100%
2016
414
687
1,101
38%
62%
100%
2017
Number (un.)
Rate (%)
Number (un.)
Rate (%)
Number (un.)
Rate (%)
Brazil
Argentina
Chile
Mexico
Peru
France
Colombia
Total
Employees who left the
company, by age group
< 30 years
From 30 to 50 years
> 50 years
Total
Employees who left the
company, by gender
Men
Women
Total
602
109
28
32
34
6
106
917
65.65%
11.89%
3.05%
3.49%
3.71%
0.65%
11.56%
100%
511
122
34
34
34
4
66
805
63.48%
15.16%
4.22%
4.22%
4.22%
0.50%
8.20%
100%
741
155
42
28
44
6
85
1,101
2015
2016
67.3%
14.1%
3.8%
2.5%
4.0%
0.5%
7.7%
100%
2017
Number (un.)
Rate (%)
Number (un.)
Rate (%)
Number (un.)
Rate (%)
260
646
58
964
27.0%
67.0%
6.0%
100%
2015
476
452
94
1,022
46.6%
44.2%
9.2%
100%
2016
360
685
122
1,167
30.8%
58.7%
10.5%
100%
2017
Number (un.)
Rate (%)
Number (un.)
Rate (%)
Number (un.)
Rate (%)
359
605
964
37%
63%
100%
409
613
1,022
40.02%
59.98%
100%
395
772
1,167
34%
66%
100%
93
2017 ANNUAL REPORT Employees who left the
company, by region
2015
2016
2017
Number (un.)
Rate (%)
Number (un.)
Rate (%)
Number (un.)
Rate (%)
Brazil
Argentina
Chile
Mexico
Peru
France
Colombia
Total
719
74.59%
765
74.85%
74
27
36
39
16
53
964
7.68%
2.80%
3.73%
4.05%
1.66%
5.50%
100%
84
34
29
38
22
50
1,022
8.22%
3.33%
2.84%
3.72%
2.15%
4.89%
100%
861
109
39
40
54
5
59
1,167
73.8%
9.3%
3.3%
3.4%
4.6%
0.4%
5.1%
100%
Career development GRI 404-3
Employees who received
performance reviews by
functional category
2015
2016
20171
men
women
total
men
women
total
men
women
total
Total
employees
Director level
Management
Administrative
40
285
751
Production
1,349
Employees
submitted to
performance
and career
development
reviews
Director level
Management
Administrative
33
250
672
Production
1,083
% by gender
Director level
Management
Administrative
Production
83%
88%
89%
80%
14
381
2,874
897
13
343
2,281
672
93%
90%
79%
75%
38
284
747
1,267
37
282
731
1,185
97%
99%
98%
94%
16
347
2,864
834
16
347
2,864
834
100%
100%
100%
100%
36
263
776
1,280
36
263
726
1,188
100%
100%
94%
93%
17
333
2,832
774
17
324
2,638
40
285
751
1,349
33
250
672
672
1,083
100%
97%
93%
87%
83%
88%
89%
80%
14
381
2,874
897
13
343
2,281
672
93%
90%
79%
75%
38
284
747
1,267
37
282
731
1,185
97%
99%
98%
94%
1 In 2017, the performance review process was reformulated, culminating in the new people management process called Nossa Gente (Our People).The new
process is continuous. For administrative (including the sales force), management and director level employees, the data reported are for the process ended
on December 31, 2017. For operational employees, the data reported refer to 2016, and the appraisal process was concluded in January 2017.
94
2017 ANNUAL REPORT Internal hiring
Internal hiring is an integral part of Natura’s talent retention strategy. The overall rate remained stable in 2017, with
the growth in the indicator in the International Operations offsetting the retraction in Brazil. Especially for leadership
positions, the overall increase was very significant, impacted by the expansion of internal hiring in the International
Operations.
Internal hiring for positions offered/occupied by employees (%)
Operation
Brazil
International Operations
Total
Internal hiring for leadership positions offered/occupied by employees (%)
Operation
Brazil
International Operations
Total
Health and safety
2015
2016
57%
42%
54%
61%
47%
57%
2017
57%
56%
57%
2015
2016
2017
72%
51%
67%
73%
49%
65%
78%
79%
78%
Incidence or risk of occupational diseases GRI 103-2; 103-3; 403-3
We aim to consolidate a health and safety culture to ensure a healthy and safe work environment. We are committed
to raising employee awareness of the importance of adopting a healthy lifestyle, focused on the 3Ps (proactive
mindset, prevention and protection).With this in view, we launched the Viva sua Saúde (Live your Health) programme,
based on an integrated vision of health. We have not identified employees who perform activities in which there
is a high risk of occupational diseases. In 2017, our investments in prevention included a programme to monitor
chronic diseases, an ergonomics programme, work place exercises, specialized company health services (psychology,
physiotherapy, acupuncture and orthopaedics), accompaniment of mothers-to-be, a nutrition programme, as well as
an influenza vaccination campaign.
Investments in disease prevention (R$ thousands) – Brazil
2015
2,661
2016
2,848
2017
3,051
95
2017 ANNUAL REPORT
Health and safety rates GRI 403-2
As a result of the ongoing evolution of our safety management system, in 2017 the number of accidents involving
Natura employees and third-party contractors continued to drop.
Health and safety rates 1 – Brazil
Occupational disease fre-
quency rate
Lost days 3
Number of fatalities
Employe-
es
Nested con-
tractors 2
0.2
212
0
0
329
0
2015
Total
0.2
541
0
2016
Employe-
es
Nested con-
tractors 2
Total
Em-
ployees
Nested con-
tractors 2
0.1
161
0
0
150
0
0.1
311
0
0
210
0
0
51
0
2017
Total
0.0
261
0
1 Taking into account accidents recorded with employees at the units in Cajamar, Lapa, the distribution centres, Itupeva Hub, Natura São Paulo (NASP)
and Ecoparque. Minor injuries only requiring first aid were not included. 2 Taking into account service providers at the units in Cajamar, Lapa, distribution
centres, Itupeva Hub, Natura São Paulo (NASP) and Ecoparque. 3 A lost day is when the employee does not return to his or her job until the next working day
after the incident. Lost days include all subsequent days of absence starting from the date of the incident.
Health and safety rates for Natura employees, by gender 1
Total injuries
Occupational disease rate
Lost days rate
Absenteeism rate
Number of fatalities
2017
women
6
33%
47%
1.15%
0
men
12
67%
53%
1.42%
0
1 The accident frequency rates are calculated based on the number of accidents per man/hour worked multiplied by 1,000,000.
Relationship quality
Approach to stakeholder engagement and main topics and concerns raised – Employee engagement
GRI 102-43; 102-44
In 2017, we conducted our third Engagement Survey, achieving growth in all regions of activity. The first and second
surveys took place in 2014 and 2016 respectively. In the global indicator we achieved 4.04 points on a scale from 1 to
5.In Brazil, we evolved from 3.88 points in 2016 to 3.96 in 2017.The result in the International Operations was an impro-
vement from 4.19 to 4.27. Last year, we also conducted the survey in France, achieving a score of 4.18 points.
96
2017 ANNUAL REPORT Engagement Survey – Favourability (%)1
2016
2017
Brazil
Argentina
Peru
Chile
Mexico
France
Colombia
Overall average – Natura
3.88
4.15
4.33
4.08
4.16
n.d.
4.21
3.95
3.96
4.33
4.41
4.10
4.28
4.18
4.21
4.04
1 The data do not take into account the International Operations area, the office dedicated to the international operations in Buenos Aires (Argentina).
Satisfaction with the Ombudsman channel GRI 102-43; 102-44; 103-2; 103-3
At the beginning of 2017, we altered the survey methodology used to measure satisfaction with the Ombudsman
channel, adopting a scale from 1 to 5 points, where scores of 4 and 5 are considered satisfactory.The satisfaction
rate was 89%, slightly higher than the previous two years (82% in 2016 and 83% in 2015). Our goal is to continue to
improve the survey application process to increase the percentage of responses in relation to the total number of
contacts received by the channel. This year, 41% of the employees who used the Ombudsman service responded to the
satisfaction survey.
Satisfaction with the Ombudsman channel (%)
Internal audience
Supplier
Natura Beauty Consultant
End consumer
Freedom of association
2017
89%
88%
98%
100%
Possible violation or risk of violation of freedom of association and collective bargaining
GRI 103-2; 103-3; 407-1
We support freedom of union association both for employees and suppliers’ employees, as set forth in our Code of
Conduct.
Non-discrimination
Cases of discrimination and corrective measures taken GRI 103-2; 103-3; 406-1
All reports of discrimination are addressed by the Ombudsman. There were two reports in 2017.There has never been a
proven case of discrimination. Should this occur the applicable measures will be taken. All cases of probable breaches
involving ethics and discrimination are reported to the Ethics Committee, in which senior management participates.
97
2017 ANNUAL REPORT Ethics and human rights
Anti-corruption
Operations submitted to corruption-related assessments GRI 103-2; 103-3; 205-1
Natura was recognised publicly as a Pro-Ethical company in 2016 and 2017 by Brazil’s Ministry of Transparency and
the Federal Comptroller General. This recognition is due to the measures the company has in place to prevent, detect
and remedy cases of corruption and fraud. It should be noted that we are signatories to the United Nations Global
Compact, and we support the Alliance for Integrity, a global anti-corruption initiative. In 2017, the Compliance, Inter-
nal Controls and Risk areas maintained the programme to ensure compliance with Brazil’s anti-corruption law (law
12.846/2013). This entailed a number of initiatives, such as updating the mapping of all the company’s critical areas;
the organization of training focused on the country’s anti-corruption law for employees and for small and medium
sized product and service providers; the reassessment of the company’s level of risk in relation to legislation; tests for
the controls regarding the Code of Conduct, the Ethics Committee and the whistleblowing hotline; as well as internal
communication to reinforce awareness in this area.
Communication and training in anti-corruption policies and procedures
GRI 103-2; 103-3; 205-2
In the course of the year, a large number of actions were taken to reinforce anti-corruption procedures and policies
among employees, reporting to respective area managers and directors. We also communicated our anti-corruption
policies and procedures to 880 Natura suppliers, worthy of note being the recommendation to conduct an e-learning
programme about the Natura Code of Conduct. These partners include third-party contractors.
By functional category
Communicated
Trained Communicated
Trained Communicated
Trained
2015
2016
2017
Director level
Management
Coordination 1
Administrative
Production
Trainees 2
Apprentices2
Interns 2
Total
59
679
-
3,819
2,246
-
-
-
48
619
-
3,594
1,998
-
-
-
54
631
-
3,584
2,101
27
140
150
51
614
-
3,393
1,928
26
123
140
58
610
799
2,229
2,322
24
152
129
57
604
796
2,136
2,284
24
68
129
6,803
6,259
6,687
6,683
6,323
6,098
1 In the previous years, the coordinators communicated and trained were part of the administrative staff. 2 Data not available for 2015. 3 Includes all
training on the Code of Conduct for Employees 2016 Brazil and International Operations undertaken between 01/01/2017 and 21/12/2017 and based on the
headcount in December 2017. Indirect contractors in the operational area were added to the administrative staff.
98
2017 ANNUAL REPORT By region – Brazil
South
Southeast
Midwest
Northeast
North
Total
2015
2016
2017
Communicated and trained
Communicated and trained
Communicated and trained
36
1,311
17
103
113
1,580
33
480
5
21
16
555
29
333
3
8
7
380
Confirmed cases of corruption and measures taken GRI 103-2; 103-3; 205-3
As a consequence of the strategy aimed at publicising the Ombudsman service, the number of cases of corruption
involving Natura Beauty Consultants and Business Leaders grew, which increased the overall indicator compared with
2016. In contrast, there was a drop in the number of cases that resulted in the punishment and dismissal of employees.
Public authorities were not involved in any of the cases.
Cases of corruption
Confirmed cases of corruption
Confirmed cases in which employees were dismissed or punished for corruption
Confirmed cases in which contracts with commercial partners were terminated or not
renewed due to corruption-related violations
2015
2016
2017
12
26
0
6
5
0
13
2
6
Human rights
Operations and suppliers identified as presenting significant risk of child, forced or slave labour and
measures taken GRI 103-2; 103-3; 408-1; 409-1
Our suppliers declare their working conditions and are audited periodically. We also continue to assess our supplier
communities regarding human rights, as part of our Social and Biodiversity Chain Verification System. In 2017, no
cases indicating the use of child or forced labour were identified in the communities. Nonetheless, in some Amazon
communities that sell biodiversity ingredients, there are indications of families whose children and adolescents work
in production chains. This is a cultural tradition in certain communities, and does not violate Natura principles (that is,
children who help their parents out but do attend school, thus not violating the principles of ethical biotrade). It should
be noted that our production chain management system is audited annually by an independent body, in addition to
being accredited by the UEBT (Union for Ethical Biotrade).
Security personnel trained in human rights policies and procedures GRI 103-2; 103-3; 410-1
Security procedures at Natura encompass human rights training, including the training mandated by the Brazilian Fe-
deral Police. All security personnel take the Federal Police training, as well as other specific courses. In 2017, 85 (60.3%)
of the 141 members of the Natura security team were trained in human rights.
99
2017 ANNUAL REPORT Indigenous people’s rights
Cases of violations of indigenous people’s rights GRI 103-2; 103-3; 411-1
In 2017, there were no incidents involving indigenous peoples in the locations in which we operate
Public policies
Political contributions GRI 103-2; 103-3; 415-1
In accordance with a specific internal policy, valid in Brazil and in the International Operations, Natura does not make
contributions to campaigns, parties and/or candidates for public office, during or outside electoral processes.
Anti-competitive behaviour
Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices GRI 103-2; 103-3; 206-1
In 2017, we were not subject to administrative or judicial sanctions for violations of laws or regulations governing anti-
-competitive behaviour, anti-trust, and monopoly practices.
100
2017 ANNUAL REPORT
Environmental management
GHG emissions
GRI 305-1; 305-2; 305-3
Greenhouse Gas emissions by scope (tCO2 equivalent)
Direct GHG emissions (Scope 1)
Indirect emissions from the generation of purchased energy (Scope 2)
2015
4,156
7,909
2016
4,975
5,094
2017
5,187
6,006
Other GHG emissions (Scope 3)
309,202
293,355
296,855
Total GEE emissions (Scopes 1, 2 and 3)
321,267
303,424
308,048
Emissions of ozone depleting substances (ODS), NOx, SOx and other significant atmospheric emissions
GRI 305-6; 305-7
There are no indications that ozone depleting substance emissions are significant at Natura facilities (considering the
boilers at Cajamar and Ecoparque), given that we comply with the applicable standards and laws and adopt all the
pertinent internal controls. In relation to NOx, SOx and other atmospheric emissions, our impact is not significant. In
Cajamar, our boilers burn clean fuels (ethanol and LPG).
Significant atmospheric emissions 1 2 (kg/h)
NOx
SOx
Persistent organic pollutants (POP)
Volatile organic compounds (VOC)
Hazardous atmospheric pollutants (HAP)
Particulate material (PM)
Other standard categories of atmospheric emissions identified in regulations
2017
0.87
0.06
0
0
0
0.86
0
1 At Ecoparque, we considered the biomass boiler chimney emissions analysis report prepared by the consultancy Bioagri Ambiental in August 2017.
2 These emissions are not monitored for transportation. We prioritize monitoring of GHG emissions, which are more relevant for Natura and its value chain.
Energy
Energy consumption inside the organization GRI 103-2; 103-3; 302-1
Electricity and fuel consumption in 2017 is based on the following Natura sites: Cajamar, Benevides, Natura São Paulo
(NASP) and the Itupeva Hub, the distribution centres operated by third-parties in the states of Rio Grande do Sul,
Paraná, Minas Gerais, Bahia, Pernambuco and Pará, six third-party manufacturers (chosen because their volumes are
representative) and the administrative support site located in São Paulo (E-Business Park) to the extent that it was
used by Natura in 2017.
There was a 7% increase in energy consumption in Cajamar and Benevides, due particularly to the growth in
production (up 15% compared with 2016). However, relative consumption (MWh/unit produced) at both sites was lower
than in 2016. In the other sites, there was an 11% increase in consumption, driven mainly by the inauguration of the
new NASP administrative site in São Paulo. There was a 25% decrease in absolute consumption by the third-party
manufacturers and, consequently, a reduction in relative consumption (MWh/unit produced), explained by the 2%
reduction in production volume compared with 2016.
101
2017 ANNUAL REPORT Consumption of fuel from
non-renewable sources –
Natura Brazil (MWh1)
Diesel oil (generator sets)
LPG gas
Natural gas
Total
2015
1%
2%
0
3%
908
1,972
0
2,881
1,197
1,714
0
2,911
1 We changed the measurement unit from Tj to MWh.
Consumption of fuels from renewable sources – Natura Brazil (MWh1)
Solar energy
Alcohol 2
Briquettes 3
Electrical energy – from the grid
Total
2016
2%
2%
0
4%
2015
6
10,736
0
57,142
67,883
1,301
1,784
676
3,761
2016
6
11,236
8,131
52,750
72,122
1 We changed the measurement unit from Tj to MWh. 2 Renewable fuel used to produce steam at Cajamar. 3 Biomass boiler at Benevides.
Energy consumed by type – Natura Brazil (MWh1)
Electricity
Heating
Refrigeration
Steam
Total
1 We changed the measurement unit from Tj to MWh.
Total energy consumption – Natura Brazil (MWh1)
Cajamar and Benevides sites
Other Natura locations in Brazil
Natura third-party manufacturers
Total
1 We changed the measurement unit from Tj to MWh.
2015
58,050
0
0
20,778
78,828
2015
59,917
0
9,944
71,876
2016
53,947
0
0
20,000
73,947
2016
59,083
15,972
7,194
84,266
2017
1.51%
2.07%
0.78%
4.36%
2017
6
12,770
8,488
61,179
82,444
2017
62,486
432
0
23,286
86,204
2017
63,105
17,720
5,380
86,204
102
2017 ANNUAL REPORT Energy matrix Natura Brazil (%)
Electricity (grid)
Solar energy
Briquettes
Alcohol
Diesel oil
Bunker oil
LPG gas
Natural gas
Total
Energy consumed outside the organization GRI 302-2
Energy consumed outside the organization 1 (GJ)
Goods and services acquired
Upstream transportation and distribution
Waste generated in the operation
Business travel
Employee transportation
Downstream transportation and distribution
Total
2015
71.00%
0.004%
12.00%
13.00%
1.00%
0
2.00%
-
100%
2015
189.44
497.59
-
55.65
29.48
207.94
980.10
2016
70.00%
0.007%
11.00%
15.00%
2.00%
0
2.00%
-
100%
2016
148.23
495.83
-
45.38
27.75
214.70
931.99
2017
70.97%
0.006%
9.85%
14.81%
1.51%
0
2.07%
0.78%
100.00%
2017
112.05
458.55
-
46.15
27.77
194.09
838.62
1 There was a 10% reduction in the total energy consumed outside the organization, worthy of note being goods and services acquired (suppliers and third-
parties), with a 24% decrease compared with the previous year.
Energy intensity GRI 302-3
The reduction was the result of the 10% increase in total production in 2017 compared with 2016, in spite of the 7%
increase in absolute energy consumption.
Energy intensity (MWh/unit produced)
Inside the organization 1 2
Outside the organization 3
Total
2015
2016
-
-
-
-
149.39
158.83
2017
190
44
157.16
1 Units produced at the Cajamar site and the Benevides (Ecoparque) site. 2 The calculation base for the indicator was modified in 2017. It was not possible to
calculate the historic series in the new format. 3 Units produced by six third-party manufacturers monitored by the Natura environmental area.
103
2017 ANNUAL REPORT Reduction in energy consumption GRI 302-4
Reductions in energy consumption obtained in function of conservation and
efficiency (GJ) improvements
Efficiency projects 1
Solar energy consumption
Total
2015
.04 kJ
.02 kJ
.06 kJ
2016
.00 kJ
.02 kJ
2017
43.20 MWh
.00 MWh
.02 kJ
43.20 MWh
1 Substitution of fluorescent and metal-vapour lamps with LED lamps in diverse areas of the Cajamar site (restaurant, service area etc.).
Water
Total water withdrawn by source GRI 303-1
There was a 4% increase in absolute water consumption (m³) and a 0.5% decrease in relative consumption (L/unit pro-
duced) in function of the 10% increase in total production in 2017 compared with the previous year, taking into account
Cajamar, Benevides (Ecoparque) and third-parties manufacturing finished products in Natura’s name. Due to the lack
of a public water supply network, the water used in the Cajamar and Benevides facilities comes from semi-Artesian
wells. These draw water from the Cristalino aquifer (Cajamar) and the Barreiras aquifer (Benevides – Ecoparque). In
the city of São Paulo, where the administrative headquarters and a distribution centre are located, water is supplied
by the public network*. GRI 303-2
Water consumption – Natura Brazil (m3)
Natura sites 1
Other locations 2
Third-party manufacturers 3
Total Brazil
2015
177,866
52,826
63,027
293,719
2016
191,277
50,224
37,453
278,954
2017
245,386
19,084
25,504
289,974
* In Cajamar the information comes from the water withdrawal permit. At the Ecoparque, the data come from the environmental control report from when
the unit was implanted. 1 Sites operated by Natura: Cajamar, Benevides, Natura São Paulo (NASP), Lapa, São Paulo Distribution Centre and the Itupeva Hub.
2 Distribution centres operated by third-parties. 3.They manufacture products in Natura’s name.
Total volume of water recycled and reused GRI 303-3
Water recycled and reused
Water recycled 1 and reused 2 by the organization (m3)
Water withdrawn (m3) 3
% of water recycled and reused
% of water recovered 4 over the total of water treated in the wastewater treatment
plant
2015
82,972
0
59%
59%
2016
63,523
0
41%
41%
2017
72,072
166,793
43%
43%
1 Water recycled and water reused in flushing, irrigation and other industrial processes. Also called reused water.2 Reused water comprises the water
dejects from potable water purification treatment in the plants. The purification process generates a deject with a high saline content. This is reintroduced
into the potable water system in which it is diluted. 3 Only the data from Cajamar were taken into account. 4 Water recovered is equivalent to the sum of
recycled and reused water.
104
2017 ANNUAL REPORT Waste and effluents
Materials used by weight or volume (except water) GRI 301-1
Material1 2
Direct material (t)
Direct material (m3)
2015
2016
2017
70,283,211
70,635,227
69,032,746
9,583,511
8,162,401
8,867,217
1 From 2015, the calculation was revised to take into account inputs and/or raw materials used in the operations at Cajamar (SP) and Benevides (Ecoparque).
Up until 2014, the amount only took into account the materials consumed by the plants in Cajamar. 2 The variation between 2015 and 2016 is due to the
variation in units produced, the production mix and the internalization of production of some items. The variation between 2016 and 2017 reflects the
increase in production in the perfumery line, aligned with the growth strategy drafted for the category in 2017.
Waste discriminated by type and disposal method and transportation of hazardous waste
GRI 306-2/306-4
Total waste by type (t) 1
Hazardous waste 2
Non-hazardous waste
Total
2015
3,428
11,585
15,013
2016
3,933
9,601
13,534
2017
4,305
7,706
12,011
1 This refers to Cajamar, Benevides (Ecoparque), Natura São Paulo (NASP), the São Paulo Distribution Centre and the Itupeva Hub. The indicator does not
take into account waste generated in civil construction works (rubble) undertaken at the facilities. 2 Hazardous waste (class I): the quantity generated
is equivalent to the value of the waste transported. All the waste generated is treated externally. This is carried out by suppliers located in Brazil, duly
screened by Natura. There were no significant spills at the Natura units in 2017.
Disposal of hazardous waste (%)1
Recovery (including energy recovery)
Incineration (mass burn)
1 Hazardous waste is not disposed of in landfills.
Disposal of non-hazardous waste (%)
Recycling 1
Incineration (mass burn)
Landfill
2015
82.4%
17.6%
2015
90.0%
6.0%
4.0%
2016
71.1%
28.9%
2016
91.0%
1.9%
7.2%
2017
36.9%
63.1%
2017
91.1%
3.5%
5.5%
1 Recycling encompasses waste which is sent for composting, co-processing and recycling/reuse.
105
2017 ANNUAL REPORT Indirect waste Natura (t)
Waste referring to other Natura locations 1
Waste from Natura third-party manufacturers 2
Total
2015
2,127
1,543
3,670
2016
1,162
1,131
2,293
2017
1,332
876
2,208
1 This refers to the distribution centres, with the exception of the São Paulo distribution centre. 2 This refers to the six largest Natura third-party
manufacturers.
Waste per unit produced (g/unit produced) 1
Waste per unit produced (g/unit produced) 1
2015
25.50
2016
22.80
2017
25.92
1 The waste/unit produced indicator is the sum of all Natura’s direct and indirect waste, in grams, divided by the total number of units produced directly
and indirectly by Natura. This grew in function of the greater volume of waste generated at the Ecoparque. Part of the effluent generated at the Ecoparque
cannot be treated internally. Due to the lack of specialized suppliers able to undertake this treatment, the material is incinerated and categorized as class
1 (hazardous) waste. The installation of a wastewater treatment plant in the Ecoparque, concluded in October, and the covering of some dams should help
to gradually reduce the numbers.
Water discharge (discriminated by quality and disposal) and water bodies affected by water discharges
and/or drainage) GRI 306-1; 306-5
In 2017, a number of improvements in the effluent treatment process at Cajamar (SP) resulted in a significant reduction
in the BOD (biological oxygen demand) and COD (chemical oxygen demand) parameters. The Natura headquarters in
São Paulo only generates domestic effluent, which is collected by the Sabesp public sewage system. Since there are no
metres, the volume of water consumed and the volume of effluent are considered to be the same.
Total volume of planned and unplanned water discharges (treated volume)
Volume m3
Unit
Disposal
Water quality, includ-
ing treatment method
Water that was
reused by another
organization
Cajamar
Reuse and discharge in
waterway
Activated sludge and
reverse osmosis
Ecoparque
Discharge in waterway
Waste water treatment
plant and filtering
garden
Natura São Paulo (NASP) Municipal network
n.a.
No
No
No
2015
2016
2017
129,041
157,101
145,747
4,261
18,369
14,496
17,849
15,311
29,804
106
2017 ANNUAL REPORT Treated effluent in Cajamar (mg/l)
Legal parameter
BOD1
COD2
Oils and grease
60
150
120
1 BOD: biological oxygen demand. 2 COD: chemical oxygen demand.
Treated effluent Ecoparque (mg/l)
Legal parameter
BOD1
COD2
Oils and grease
-
-
<5
1 BOD: biological oxygen demand. 2 COD: chemical oxygen demand.
Significant spills GRI 306-3
There were no significant spills at the Natura units in 2017.
Biodiversity
2015
13.30
55.10
18.4
2015
10.90
55.00
7.00
2016
29.10
76.40
16.6
2016
5.50
33.40
5.00
2017
10.53
56.67
15.78
2017
5.20
30.70
5.00
Operating units inside or adjacent to protected areas or areas with a high biodiversity rates GRI 304-1
Classification 1
Cajamar
Ecoparque
Natura São Paulo (Headquarters)
Geographical location
City of Cajamar (SP)
City of Benevides (PA)
City of São Paulo (SP)
Surface and underground areas
owned, rented or administered by
the organization
Position of operational unit in
relation to the protected area A
Type of operation
Size of operational unit
(m2)
Own area
Own area
Rented area
Permanent Protection Area (APP)
inside the site (areas close to the
Juqueri River and a spring)
Permanent Protection Area
(APP) inside the site (areas near a
tributary of the Benfica River and
a spring)
ZPI (priority industrial zone)
Administrative and industrial
cosmetics production
Administrative and industrial
production of basic soap mass and
toilet soap
Administrative and logistics with
warehousing and distribution of
cosmetics
646,000m2
1,729,000m2
111,700m2
1 Information about the value of biodiversity and the type of ecosystem in the areas is not available.
107
2017 ANNUAL REPORT Protected or restored habitats GRI 304-3
Aspect
Cajamar
NASP
Ecoparque
Size of protected or restored
habitat areas (km2)
15 hectares restored
Location of protected or restored
habitat areas
Inside site
Restoration measure approved by
independent external specialists
Yes – Management plan
-
-
-
4 hectares restored
Inside site
Yes – Management plan (PRAD)
Partnerships with third-parties to
protect or restore habitat areas
other than those in which the orga-
nization supervised and implanted
restoration or protection measures
No
No
No
Standards, methodologies and
premises adopted
Reforestation using native Atlantic
Rainforest species
-
Reforestation using native Amazon
species
Species included on the IUCN red list and on Brazilian conservation lists with habitats located in areas
affected by the organization’s operations GRI 304-4
In the Ecoparque, according to the 2011 Environmental Control Report, there is one species of fauna classified as near
threatened and no endangered species of flora. In Cajamar, according to a tree and fauna registration exercise and
survey conducted in 2012, there were no endangered species. At the Natura headquarters, located in an urban area,
we have no information regarding endangered species.
2017
Red lists and criteria for endangered
species 2
Species of Brazilian biodiversity present in Natura products 1
MMA3
IUCN3
Ucuuba – Virola surinamensis
Brazil nut – Bertholletia excelsa
Erva-mate – Ilexparaguariensis
Andiroba – Carapaguianensis
Priprioca – Cyperusarticulatus
Vulnerable
Endangered
Vulnerable
Vulnerable
-
-
-
Near threatened
Of little concern
Of little concern
1 The endangered vegetable species native to Brazil and which are used in the Natura product lines were considered. Conservation projects are developed
in partnership with research institutes and the direct suppliers of tree species from Brazilian biodiversity obtained by means of sustainable extraction.
For Brazil nuts and yerba mate we concluded two conservation projects in partnership with Embrapa. We also finalized a conservation project for ucuuba,
conducted in partnership with UFSCar (São Carlos Federal University) and the agricultural communities involved in this production chain. The sustainable
use of non-timber forest resources, such as leaves, fruit and seeds contributes towards keeping the forest standing. We also stimulate the adoption of
organic and agroforestry production systems. 2 None of the species discriminated above is on the Cites (Convention on International Trade in Endangered
Species of Wild Fauna and Flora) list. 3 MMA (Brazilian Ministry of the Environment) and IUCN (International Union for Conservation of Nature).
108
2017 ANNUAL REPORT Investments in environmental protection
Total environmental investments and expenditures (R$ million) GRI 103-2; 103-3
During the year, the total amount invested grew in function of investments in social biodiversity (Amazônia Programme),
a result of the steady increase in the volume of business Natura is doing in the Pan-Amazon region. There was also an
increase in investments in environmental technologies for effluent treatment at the Cajamar and Ecoparque sites.
Topic
Description
2014
2015
2016
2017
Social biodiversity
Climate change
Waste
Water and effluents
Innovation and socioenvironmental
technologies
Social
Other
Total
Investments in the Amazônia
Programme 1 (GRI 203-1)
385,000
169,765
220,700
249,330
Investments in the Carbon Neutral
Programme
Reverse Logistics Programme and
disposal of industrial waste from Natura
units 2
Water Footprint Programme and
treatment of industrial waste from
Natura units 2
Sustainable technologies in products
and clean technologies implemented in
the operations
Movimento Natura and Consultants’
HDI
Local development in the Natura units 2
(GRI 203-1)
Other types of support, sponsorship
and association related to sustainabili-
ty3, as well as environmental insurance
1,731
764
3,293
3,151
6,327
9,935
11,375
10,768
2,685
3,410
3,583
2,824
6,645
6,661
3,874
9,188
1,706
2,306
1,695
710
375
478
910
1,127
1,880
1,263
1,194
698
406,349
194,582
246,624
277,796
1 The amounts for the Amazônia Programme are annual, whereas the amount disclosed for business volume in the Amazon (Sustainability Vision commitment)
represents the total amount to date. 2 Natura units: Cajamar, Natura São Paulo (NASP) and Benevides (Ecoparque). 3 The support and sponsorships
indicated here differ from overall Natura support and sponsorships in that they refer only to sustainability-related matters.
Environmental compliance
Non-compliance with laws and regulations GRI 103-2; 103-3; 307-1
In 2017, there were no significant fines or non-monetary sanctions related to environmental issues. Natura considers
significant fines to be ones in excess of R$ 5 million or that represent a medium to high risk for the company’s image.
109
2017 ANNUAL REPORT
Environmental assessment of suppliers
Negative impacts in the supplier chain and measures taken GRI 308-2
Suppliers with potential or actual negative environmental impacts 1
2015
2016
2017
N.º of suppliers assessed for negative environmental impacts
N.º of suppliers identified as causing negative environmental impacts
Actual or potential significant negative environmental impacts identified in the supplier
chain
Number of suppliers identified as causing significant actual or potential negative envi-
ronmental impacts, with whom improvements were agreed on as a result of assess-
ment
Percentage of suppliers identified as causing significant actual or potential negative
environmental impacts, with whom improvements were agreed on as a result of assess-
ment
1 From 2017, the data include suppliers in Brazil and in the International Operations.
Suppliers’ environmental impact
Main packaging and raw material suppliers 1
Number of suppliers assessed
Energy consumption (j) GRI 302-1
Electrical energy
Diesel (generator sets)
GLP
Natural gas
Total
Water consumption 1 (m3)
Total
Waste generation 2 (t)
409
128
n.a.
73
338
120
n.a.
53
424
399
600
165
57.03%
44.17%
41.35%
2015
118
9.9E+13
1.9E+13
3.9E+12
6.0E+13
1.8E+14
2016
83
8.3E+13
4.9E+13
3.1E+13
3.8E+13
1.7E+14
2017
100
6.66E+13
2.54E+13
2.09E+12
9.10E+13
1.85E+14
281,000
157,978
280,535
Waste disposed of in landfills or incinerated
Waste recycled
1,460
6,065
1,285
4,618
2,580
2,765
1 The figures for 2017 include the International Operations. For this reason there was a 20% increase in the total number of suppliers compared with 2016.
Water consumption grew by 78% compared with the previous year, which corresponds to the average consumption for the years prior to the water crisis in
Brazil. 2 The total volume of waste generated decreased by 9%, even so there was a 40% drop in the volume of waste recycled.
110
2017 ANNUAL REPORT Natura Beauty Consultants
Training Brazil
Number of Natura Beauty Consultants in training in Brazil (thousands)
2015
2016
2017
New consultants
Initial training
Total consultants trained by subject1 1
Natura Beauty Consultants – Training actions – Global actual 3
Percentage of single consultants trained (penetration)
Total training undertaken 2 (thousands)
543
315
374
2015
41%
1,909
554
230
397
2016
39%
1,789
460
180
184
2017
31%
1,920
1 Includes the participation of the same consultant in different training sessions. Only training in the Face, Perfumery and Make-up categories given by
Relationship Managers is considered. 2 Takes into account all the different courses done by the same consultant in separate sessions (courses given by
Relationship Managers, virtual training and/or other initiatives). 3 We altered the name “global target” to “global actual”, because the data reported for 2015,
2016 and 2017 refer to the actual number of consultants trained.
Consultant Training 1 2 – International Operations
Argentina
Chile
Colombia
Peru
Total
2015
8,590
4,091
6,717
7,088
26,486
2016
10,389
5,233
7,035
12,582
35,239
20173
9,272
4,584
8,426
10,291
32,573
1 Average number of consultants trained per cycle, without repetition, in the three focus categories: Face, Perfumery and Makeup. This means that we count
only one training course per consultant during the period of one year, even if the consultant does the programme more than once. 2 To make the face-to-
face training more personalized and focused on trial, the number of participants per course is limited to 25 consultants. 3 This year we renewed the courses
in the three categories (Face, Face, Perfumery and Makeup) and launched two new courses: Enhance your Beauty and Daily Care.
111
2017 ANNUAL REPORT Surrounding communities
Investments
Investments in surrounding communities1 (R$ thousands)
Natura funds
Crer Para Ver funds
2015
432
455
2016
354
556
2017
280
847
1 Includes Cajamar, Natura São Paulo (Jaguara district) and Benevides.
Operations with local community engagement, impact assessment and
development programs implemented GRI 413-1
Type of initiative
% of operations 1
Assessments of socioenvironmental impacts, including gender impact assessments, based on participative processes 2
66%
Public disclosure of the results of environmental and social assessments
Local development programs based on the needs of the respective communities
Stakeholder engagement plans based on mapping of priority stakeholders
Committees and broad-based local community consultation processes, including vulnerable groups
66%
100%
100%
100%
Work councils, occupational health and safety committees and other bodies representing employees to discuss impacts
No
Formal grievance and complaint processes open to local communities 3
100%
1 The results have been the same for the last three years:2015, 2016 and 2017. 2 The Social Progress Index (IPS) was the metric chosen to assess the impact
of our activities in the areas close to NASP and Cajamar. In Benevides, the assessment was qualitative in nature and involved broad-based meetings
and community gatherings to validate the new stages of the Natura local development program. 3 The Ombudsman channel is open to all stakeholder
groups. Moreover, Natura has local community engagement and impact assessment programmes in place in the areas surrounding Cajamar, Benevides
and Jaguara (NASP), ensuring ongoing dialogue with these communities.
112
2017 ANNUAL REPORT Consumers
Consumer health and safety
Products and services for which health and safety impacts are assessed GRI 103-2; 103-3; 416-1
Natura has a constant commitment to the health and safety of its consumers. For this reason, the company has
rigorous internal processes for 100% of the products in its portfolio, ranging from the conceptual development of the
product to its launch. This includes product and raw material safety and effectiveness tests and assessments, as well
as stability, microbiological and quality control tests to ensure compliance with the requirements of the respective
sanitary authorities and a differentiated positioning aligned with the company’s commitment to transparency. After
they have been launched, all Natura products are submitted to the company’s cosmetovigilance system, a process
which provides feedback for our continuous improvement cycle. Furthermore, we underscore that our development
process encompasses functional, sensory and emotional aspects of the products. The focus is on continually furthering
our knowledge of customer behaviour and providing innovative products and services.
Cases of non-compliance regarding product and service impacts on consumer health and safety and
product and service information and labelling
GRI 103-2; 103-3; 416-2; 417-2
In 2017, Natura did not receive any fines or sanctions for the violation of laws and regulations related to the supply and
use of products and services, product and service labelling or to putting customer health and safety at risk.
113
2017 ANNUAL REPORT Society
Social assessment of suppliers GRI 414-2
The number of audits increased due to the expanded scope of the indicator, which included the International
Operations as well as Brazil. The percentage of suppliers whose activities were terminated was not greatly reduced,
demonstrating suppliers’ interest in regularizing any deviations identified.
Suppliers presenting potential or actual negative social impacts 1
2015
2016
Suppliers screened for social impacts
Suppliers identified as causing significant potential or actual negative social impacts
Suppliers identified as causing significant potential or actual negative social impacts,
with improvement plans agreed on
409
126
78
338
130
51
2017
440
147
52
Percentage of suppliers identified as causing significant potential or actual negative
social impacts, with improvement plans agreed on
61.90%
39.23%
35.37%
Suppliers identified as causing significant potential or actual negative social impacts
with whom relations were terminated as a result of assessment
0
0
0
1 New indicator measured only in 2017.
114
2017 ANNUAL REPORT Support and sponsorship actions
A total of R$ 12.8 million was invested in support and sponsorships in the course of 2017. Once again, the strategy
focused on valuing Brazilian music through the Natura Musical programme was worthy of note. In 2017, the platform
inaugurated the Casa Natura Musical venue in the city of São Paulo (read more on page60) and increased the number
of sponsorship tenders for festivals. In the course of the year, 69 projects were undertaken, 36 cultural products (CDs,
DVDs, LPs and books) were launched, and more than 160 shows were held all over Brazil, with a total attendance of
175,000 people. We activated new contents in the digital channels (Facebook, Instagram, Youtube, Twitter, Spotify and
the Natura Musical website), which received over 25 million views.
In the fashion world, we were present at the two editions of the São Paulo Fashion Week, impacting more than 112,000
attendees and generating more than 70 million views in the event’s digital channels. Experiences involving product
trials and gifts were promoted for consumers, opinion formers, journalists, consultants and employees in our makeup
space, which was open to the public. In the second edition of the show in August, Natura was the official makeup
brand and we organized an unprecedented co-creation event that culminated in a show-happening for around two
thousand people.
We also maintained our support aimed at consolidating collaboration and dialogue networks related to important
institutional topics for the company, with a focus on sustainability and innovation. During the year we participated
in the following events: Sustainable Brands, Virada Sustentável RJ, Congresso Nacional de Inovação, Conferência
Anpei de Inovação and Virada Empreendedora. Moreover, we sponsored Instituto Ethos and the annual conference it
organizes, as well as a room at the Fundação Getulio Vargas, forging closer links with academia. The foundation also
permits us to use the space for some sales force training programmes.
Investments Natura funds (R$ thousands)
2015
2016 2
Sustainable development
Brazilian music
Fashion 1
Reinforcement of civil society organizations
Cities
Total company funds
Investments funded with tax incentives (R$ thousands) 3
Brazilian music 4
Total (company and tax incentives)
154
9,010
0
1,020
314
10,498
2015
5,541
16,039
337
1,879
2,610
603
0
5,429
2016
3,175
8,604
2017
150
6,706
2,845
552
0
10,103
2017
2,751
12,854
1 In 2016, we resumed our investments in fashion, previously declared as behaviour and attitude. 2 Change in the methodology for declaring Natura funding
compared with previous years. The company declared the investments it made directly in projects using its own funds. 3 In the last three years, we did not
undertake any tax incentive investments in sustainable development, reinforcement of civil society organizations, sport, fashion and cities. 4 Rouanet law
(federal sphere) and ICMS (in the states of Bahia, São Paulo, Minas Gerais, Pará and Rio Grande do Sul).
115
2017 ANNUAL REPORT Leadership and social influence GRI 102-12
In 2017 Natura was active in the public sphere in sustainability-related questions through industry associations,
particularly noteworthy being the implementation of the Biodiversity legal framework in defence of the Pan-
Amazon region and the debate on banning animal testing. Other topics in which the company was active were: the
preservation of autonomy in direct selling, reinforcing female entrepreneurship, innovation and tax questions.
In 2017, Natura initiated a series of dialogues with society about the generation of a positive impact. The first meeting
was attended by Richard Branson, the founder of the Virgin Group, as well as other guests, and revolved around the
prospects of a new economy in which businesses may and should generate solutions for sustainable development
based on the challenge of generating a positive impact for society and the environment.
To commemorate the 10th anniversary of its Carbon Neutral Programme, Natura, in partnership with Itaú Unibanco,
presented a joint platform to promote measures to offset greenhouse gas emissions. The company is also part of
the Science Based Target Initiative (SBTi), which is pursuing an absolute reduction in emissions in line with the level
of decarbonization necessary to maintain the increase in global temperature below 2ºC.We are also members of
The Natural Capital Coalition, a global group whose objective is to harmonize approaches to natural capital and its
conservation, and We Mean Business – Net Zero 2050, an initiative to drive the transition to a low carbon economy.
In partnership with Claudia magazine, we commemorated Natura Beauty Consultant Day (September 22), debating
female empowerment and entrepreneurship. In line with our vision of gender equality, we organized an encounter
with a group of men who inspire others to free themselves from stigmas and stereotypes and who have singular
experiences to share about the construction of identity, image and beauty.
Institutional representation GRI 103-13
In 2017, Natura’s CEO, João Paulo Ferreira, took part in the WFDSA (World Federation of Direct Selling Association)
CEO Council, a federation of 60 direct selling associations from the around the world. Together with Moacir Salzstein,
Natura’s director of Corporate Governance and vice president of the Brazilian direct selling association Abevd
(Associação Brasileira de Empresas de Vendas Diretas), he also participated in the organization’s world congress.
In Brazil, Natura is represented on diverse Abevd committees: Legal and Tax Affairs Committee, Institutional Affairs
Committee, Communication Committee, Benefits Committee, and the Research Committee.
We are also very active in the Brazilian CFT association Abihpec (Associação Brasileira da Indústria de Higiene
Pessoal, Perfumaria e Cosméticos), participating in the following working groups: Environment, Tax, Regulatory,
Labour Relations, Overseas Trade and Communication, as well as in the respective sub-groups. To bring discussion
on the prohibition of animal testing to the forefront, we participate actively in the alternative methods sub-group;
additionally we assumed a seat on the Renama (Rede Nacional de Métodos Alternativos) Steering Council.
In the areas of sustainability, ethics, integrity and transparency, we maintain our representation in the Instituto
Ethos (Instituto Ethos de Empresas e Responsabilidade Social), where Andrea Alvares, vice president of Marketing,
Innovation and Sustainability, and Marcelo Behar, director of Corporate Affairs are on the board of directors. In
parallel, Priscila Specie, Public and Government Relations manager, is on the Steering Council. We also participate in
the Climate, Companies and Human Rights, Integrity and Anti-corruption working groups.
116
2017 ANNUAL REPORT In partnership with the Instituto Ethos and Ceert (Centro de Estudos das Relações de Trabalho e Desigualdade),
we joined the Coalizão Empresarial para a Equidade de Raça e Gênero (Business Coalition for Racial and Gender
Equality). In 2017, for the first time ever Instituto Ethos held a conference in Belém, Pará, where we organized a debate
on women in the Amazon region. In the Movimento Mulher 360º, we accompany the dialogues among members and
the board of director meetings, at which Kássia Reis, our legal director, represents Natura.
In the UN Brazil Global Compact Network, we have a seat on the Brazilian Global Compact Committee and participate
in diverse working groups. Andrea Alvares is on the board of the sustainable development business council Cebds
(Conselho Empresarial Brasileiro de Desenvolvimento Sustentável). We are also represented in the National
Sustainable Development Goals (SDG) Commission by Instituto Ethos, as well as in the national industry confederation
CNI (Confederação Nacional da Indústria). We participate in the discussions organized by the B Corp system, in which
we were recertified in 2017.
We also participate in Getap (Grupo de Estudos Tributários Aplicados) and CCiF (Centro de Cidadania Fiscal). In the
CNI, we are involved in the environment, tax and overseas trade forums. Our vice president of Operations and Logistics,
Josie Romero, is a member of the FNQ (Fundação Nacional de Qualidade) Curators Council.
Our co-founders are also board members of diverse associations. Pedro Passos is a board member of Iedi (Instituto
de Estudos para o Desenvolvimento Industrial) and a member of the MEI (Mobilização Empresarial pela Inovação)
Business Leaders Committee, of the CNI, and the Conselho de Desenvolvimento Econômico e Social, a group of civil
society representatives that provides direct advice to the Presidency of the Republic. Guilherme Leal is part of the B
Team, a global group of leaders for social, environmental and economic transformation and is a member/curator of
Instituto Ethos.
117
2017 ANNUAL REPORT 118
119
120
CREDITS
NATURA
DIRECTOR OF CORPORATE AFFAIRS
Marcelo Bicalho Behar
COMMUNICATION MANAGER
Milena Buosi
ANNUAL REPORT COORDINATOR
Fábio Peixoto
DESIGN
Carolina Almeida
EXECUTIVE PRODUCTION
Priscila Costa
MARKETING, INNOVATION AND SUSTAINABILITY
Luciana Vilanova, Janice Rodrigues, Keyvan Macedo
FINANCE, INVESTOR RELATIONS AND FINANCIAL INFORMATION
Márcio Bologna and Elisa Fortino
MARKET RELATIONS
Marcel Goya and Luiz Palhares
PRODUCTION OF THIS EDITION
ART DIRECTION AND GRAPHIC DESIGN
Aline Leme
COPY AND SUSTAINABILITY CONSULTING
Report Sustentabilidade
EDITING
Álvaro Almeida and Michele Silva
REPORTING
Renata Costa and Talita Fusco
PROJECT AND RELATIONSHIP MANAGEMENT
Ana Souza
GRI CONSULTING
Juliana Fullmann, Fabíola Nascimento and Victor Netto
CRITICAL ANALYSIS OF INDICATORS LINKED WITH THE SUSTAINABILITY VISION
Gestão Samaúma
Karina Baratella
PHOTOGRAPHY
Gustavo Zylbersztajn (models)
ILLUSTRATION
Filipe Jardim
INFOGRAPHICS
Newton Verlangieri (maps and infographs)
Bruna Foltran (tables and graphs)
TRANSLATION
Raymond Maddock
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2017 ANNUAL REPORT