years
NATURA 2018
Annual Report
Summary
Presentation
Our essence
Message from the Board of Directors
Message from the CEO
Natura
Performance highlights
Strategy
Business model
Multichannel Natura
Focus on technological innovation
Innovation for sustainability
Sustainability Vision (2018 Progress report)
1 Management and Organization
2 Brands and Products
Reduction of environmental impact
Carbon neutral company
Eco-efficient packaging
Water footprint
Sustainable social biodiversity-oriented businesses
3 Our Network
Positive social impact
Work and income for Natura consultants
Developing surrounding areas
Sustainable supplier management
Diversity and inclusion
Instituto Natura: a drive for education
Culture for sustainability
Organizational transformation
Overview of the 2050 Sustainability Vision
Company information
Corporate governance
Risk management
Ethics and integrity
Natura commitments and partnerships
Complementary indicators
About the report
GRI content summary
Assurance report
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2018 ANNUAL REPORT
Presentation
presentation / our essence / message from the board of directors / message from the ceo / natura / performance highlights
Our Essence
REASON FOR BEING
Our Reason for Being is to create and commercialize products
and services that promote well-being-well.
well-being
is the individual’s harmonious,
agreeable relationship with him/herself, with his/her own body.
being well
is the individual’s empathetic, successful and pleasurable
relationship with others, with the nature he/she is
part of, 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
for the great human revolution in the pursuit of peace,
solidarity, and life in all its manifestations.
Continuously striving for improvement develops
individuals, organizations and society.
Commitment to the truth is the way
to enhance quality in relationships.
The greater the individual diversity, the greater
the wealth and vitality of the whole.
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 linked
with its ability to contribute towards the evolution of society
and its sustainable development.
VISION
Due to our corporate behaviour, the quality of the relations we estab-
lish and our products and services, we will be a group of global brands,
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 part, with the whole.
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2018 ANNUAL REPORT
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Message from the Board of Directors
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We had a great year! Natura &Co has
given shape to our dream of reaching
out to the world and furthering our
vision that business should drive positive
transformation in society. In this first year
of consolidating a global cosmetics group,
we have made significant progress in
building the foundations that will sustain
our future development.
Throughout this journey we have
maintained our belief in the power of
transformation, of collaboration, of
transparency, of integrity, of diversity and
of the interdependence between everything
and everyone. These certainties enable
us to mobilize people and businesses in
different geographies aligned with the
same purpose: “To nourish beauty and
relationships to promote a better way of
living and of doing business”.
Our global future
GRI 102-14
Antonio Luiz da Cunha Seabra, Guilherme Peirão Leal,
Pedro Luiz Barreiros Passos (co-chairmen)
and Roberto de Oliveira Marques (executive chairman)
From left to
right: Pedro Passos,
Roberto Marques,
Luiz Seabra
and Guilherme Leal
In the ambit of business results, 2018 also
saw key developments. For the second
year running, Natura consolidated the
bases of its new growth cycle, supported
by the revitalization of direct selling. The
Body Shop advanced successfully in
its transformation plan, which will drive
efficiency, new growth platforms and
rejuvenation of the brand. And Aesop
maintained the expansion of its businesses,
both in number of stores and in channels
and new markets.
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However, this edifying awakening of
Natura &Co should not permit us to lose
sight of the times in which we live. The
world is beset by great uncertainty. And
not infrequently we see the propagation
of world views radically different from
ours. Faced with systemic challenges that
impact the entire planet, we witness with
concern the emergence of isolationist
reactions among nations that make
efforts aimed at achieving a global
understanding even more complex.
Trusting in the constructive power of
open debate, it is our understanding
that this conjuncture requires that we
reaffirm our belief in universal values that
should shape a globalized civilization.
We believe in the power of free trade, in
social justice that combats inequalities,
and in the urgent need to address global
warming. We understand that businesses
have an indispensable role to play in the
transformation of the world we live in.
Beyond generating wealth, they generate
values that shape human relationships and
enable people to live their lives more fully.
Natura &Co is founded on these premises.
This is a fundamental commitment
that emanates from the trajectory of
our companies. In August 2019 we will
celebrate the 50th anniversary of Natura,
the oldest company in our group. This is an
emotional event for us, above all because
we recognize in our past the drivers of
our future: a passion for cosmetics and
for relationships. The experience of
self-knowledge bestowed by cosmetics
allied with the expanded possibilities of
relationship enabled by complementary
physical and digital means signals an
excellent opportunity for us to relate with
an ever larger number of people, in more
places, through different brands.
This gives us every reason to celebrate
the excellent results of Natura &Co’s first
year. They are the result of the quality
and talent of a team of co-workers
who make the most of the power and
beauty of their own diversity, in all
dimensions, from origins to cultures,
from experiences to business contexts.
This is complemented by the focused
application of a strategy that respects
the particularities of the businesses,
seeking to ensure that each evolves
and contributes in the best way possible
to the whole. Thus we advance in the
construction of the future of a global
group that values the strength of
relationships at every point in its network.
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years
Message from the CEO
Prepared for
a new cycle
GRI 102-14
João Paulo Ferreira, CEO
There are many stories involving people
or organizations that highlight how they
managed to shine in moments of adversity.
And this is the sensation we have about
Natura’s achievements in 2018. Our results
last year were outstanding, in the midst
of an unfavourable conjuncture in the
markets in which we operate: low growth,
exchange devaluations, the truck drivers’
strike in Brazil, unemployment and social
turbulence. Even so, our performance was
one of the best in our almost 50 years of
existence, enabling us to reap the fruits
of the important business transformations
implemented over the last two years and
positioning us to embark on a new growth
cycle from 2019.
Our many accomplishments during the
year include the best Christmas sales ever,
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making October to December the best
quarter ever in the company’s history. We
increased our market leadership in Brazil.
We maintained the pace of our growth
and achieved consumer preference in the
operations in Latin America. Productivity
among the consultants continues to grow,
driving greater loyalty and demonstrating
the value of the Relationship Selling model.
This evolution is strongly supported by the
use of digital tools.
We grew our multichannel presence,
which includes the leading online platform
in the Brazilian cosmetics market
and our retail initiatives: company-owned
stores, products commercialized in
pharmacies and the Aqui Tem Natura
points of sale – franchises run by the
Beauty Entrepreneurs in our network.
In 2018, we engaged in a number of
important causes, including banning animal
testing (leading to the award of Peta and
Cruelty Free International certification),
business expansion in the Amazon region,
the development of our consultants and
incentives for education – funded by the
Crer Para Ver (Believing is Seeing) product
line, which raised a record R$ 44 million.
All of these advances have one point in
common: the painstaking and integrated
execution of Natura’s strategic priorities
throughout 2018. Without the talent and
engagement of our team, we would not
have been able to overcome the obstacles
in our path. In all our operations, we focus
on promoting greater interdependence,
resolving conflicts collaboratively and
always putting the consultant at the
centre of our decision making, with the
overarching objective of ensuring the
results of the whole. This is why we had
more than enough reasons to celebrate.
We are, however, aware that there is still
much to be done. There is still room to
reinforce desire for our brand, to seek
greater product differentiation by means of
innovation and to enhance the consumer
shopping experience, expanding our
multichannel presence and accelerating
the digital transformation of the business.
We want to integrate our practices,
positioning them on the same level in all
the countries in which we operate, while
exploring the opportunities arising in new
international markets, leveraged by the
relationship networks and experience of
The Body Shop and Aesop, our partners
in Natura &Co.
We have a huge opportunity ahead of us.
We have already identified the direction
we need to take and have been making
preparations to blaze this trail. It is truly
exciting to realize that while Natura
is commemorating a half a century of
existence, the company has the vitality
and the capacity to embark on this
journey, planning what will happen over
the next fifty years. This is how we will
take our value proposition
to more and more people around the
world and contribute to the positive
transformation of the planet and society.
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2018 ANNUAL REPORT
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Natura
In 2019, Natura commemorates 50 years
of existence. During this half century, we
have opened up new frontiers, becoming
the largest Brazilian multinational in the
cosmetics industry. We are part of a global,
multibrand and multichannel group, in
conjunction with Aesop and The Body
Shop (acquired respectively in 2012 and
2017). At the beginning of 2018, the group
was baptised Natura &Co, with the purpose
of nourishing beauty and relationships
to drive a better way of living and of
doing business. Together, we total more
than 18,000 co-workers, operating in 73
countries on five continents.
Natura has 6,600 employees. Currently, in
addition to Brazil, Natura has operations
in seven countries – Argentina, Chile,
Colombia, France, Mexico, Peru and the
United States. Our products are also
commercialized in Bolivia through a
partnership with a local distributor.
GRI 102-1, 102-2, 102-8
The Natura product portfolio is at the
disposal of millions of consumers,
principally by means of the Relationship
Selling model, which is supported by
a network of 1.7 million Natura Beauty
Consultants in Brazil and in the Latin
American operations. Our online sales
platform in Brazil has more than 5 million
registered consumers and was elected
the best e-commerce in the country in
2018. Internet sales have been extended
to Argentina, Chile, France and the United
States.
We also have 45 company-owned stores
in Brazil, Argentina, Chile, France and
the United States. In Brazil, Natura Sou
line products are commercialized in some
4,000 pharmacies, and we have almost
200 Aqui Tem Natura franchised stores,
run by enterprising consultants who we call
Beauty Entrepreneurs.
GRI 102-2, 102-4, 102-6
Providing support for our operations
is a structure comprising our administrative
headquarters in São Paulo (São Paulo),
the factories in Cajamar (São Paulo) and
Benevides (Pará) and the logistics hub
in Itupeva (São Paulo), as well as
13 distribution centres (eight in Brazil
and five in Latin America). In Argentina,
Colombia and Mexico, Natura has local
third-party production. This structure
is rounded off by two research and
technology centres installed in Cajamar
and Benevides. GRI 102-3
GRI 102-8 Number of employees
Brazil
Argentina
Chile
Mexico
Peru
Colombia
France
United States
Total
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years
2016
4,907
597
185
124
227
339
18
2017
4,765
641
189
116
219
362
19
Not available
Not available
2018
4,958
690
224
122
228
378
21
14
6,397
6,311
6,635
2018 ANNUAL REPORT
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Sustainability and ethics
Natura is a publicly traded company
with shares negotiated on São Paulo’s
B3 stock exchange. Our pioneering
stance in balancing the financial and
socioenvironmental dimensions of running
the business made us the first publicly
traded company in the world to be awarded
B Corp certification in 2014. We were
recertified three years later.
GRI 102-5
In 2018, we were elected the 14th most
sustainable company in the world in the
ranking elaborated by the Canadian media
and research company Corporate Knights.
Other highlights during the year were two
international certifications: UEBT (Union
for Ethical BioTrade) certification for the
Natura Ekos product line, which attests to
the sustainability of the Ekos supply chain,
and Cruelty Free International certification
– which recognizes Natura as a company
that does not conduct animal testing for
any of its portfolio. For the sixth year
running, the Ethisphere Institute, a global
organisation that promotes corporate best
practices, elected Natura as one of the
most ethical companies in the world.
As we take our first steps towards
our next 50 years, we maintain our
commitment to being an organisation
that generates a positive impact for
people and for the environment. On this
journey, we will be guided by our 2050
Sustainability Vision, the first stage
of which established ambitions and
commitments to be achieved by 2020.
In addition to the efforts expended on
achieving the 2020 targets set forth in
the vision, we are dedicated to expanding
our networking, aimed at leveraging the
impact of our actions. In 2018, together
with other organisations in the Amazon
region we supported the PPA (Parceiros
pela Amazônia) and the AmazôniaUp
platforms, which promote sustainable
entrepreneurship in the agroforestry
area. Based on the learning accumulated
from the Natura Carbon Neutral Program
over the last decade, we have also
consolidated a collaborative platform
intended to attract other companies that
want to offset the greenhouse gas (GHG)
emissions generated by their activities.
We have also intensified dialogues
with other organisations around female
empowerment. At the beginning of
2019, the Natura brand adopted a new
positioning (“The world is more beautiful
with you”), linked with the company’s
commitment to generating a positive
impact and inviting ever more people to
join us in this quest.
Natura net revenue: Brazil and Latin America
Net
Revenue
R$ 8.4 billion
71.3%
Brazil
29.7%
Argentina
28.6%
Latin America1
0.1%
United States and
France2
Net
Revenue
R$ 2.4 billion
Income tax due in 2018 – Brazil and Latin America3
40.4%
Latin America1
Income tax
R$ 199.6
million
Income tax
R$ 80.7
million
40.4%
Argentina
59.6%
Brazil
16.3%
Chile
13.6%
Peru
24.1%
Mexico
16.3%
Colombia
18.8%
Chile
11.2%
Peru
2.8%
Mexico
26.7%
Colombia
1. Business in Bolivia is conducted through a local distributor.
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 79.
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2018 ANNUAL REPORT
presentation / our essence / message from the board of directors / message from the ceo / natura / performance highlights
Performance highlights
GRI 103-2, 103-3
During 2018, Natura sustained the
course of financial recovery in place
over recent years. Net revenue grew by
9.9% compared with 2017, from R$ 7.689
billion to R$ 8.447 billion in 2018. The
expansion from October to December
2018 represented the company’s
highest quarterly growth since 2010,
particularly worthy of note being Natura’s
best ever Christmas sales campaign
and the ninth consecutive double-digit
increase in the indicator that measures
consultant productivity, demonstrating
the effectiveness of the new Relationship
Selling model (the indicator was 18.4% up
in the fourth quarter of 2018 against the
year ago period).
In the Brazilian market, Natura maintained
leadership in its three key categories,
perfumery, body and gifts, and gained
ground in others. In Latin America, we grew
in all of the countries, especially in Argentina,
where the macroeconomic conjuncture was
particularly challenging, in Colombia and in
Mexico. We also gained in brand preference
in the Latin American countries.
strategic measures which enhanced
process efficiency and our
product portfolio.
There was a slight 2.9% decrease in
Ebitda (earnings before interest, taxes,
depreciation and amortisation) in 2018,
with Ebitda margin at 17.5%. However, on
an adjusted basis (excluding non-recurring
or non-comparable effects between the
two periods under comparison), there was
growth of 9.9%, with a 5.5% increase in
Brazil and a 27.3% increase in the other
Latin American operations.
In terms of socioenvironmental
performance, a component of our
integrated management vision, our relative
carbon emissions were reduced by 2%,
both in relation to 2017 and in relation to
our 2020 commitment, which uses 2012
as base year. The result reflects certain
Crer Para Ver product line revenues,
the profit from which is invested in
education, saw record results in Brazil and
overseas. Consolidated revenue for 2018
exceeded R$ 44 million, beating the
R$ 41 million target established for 2020.
In the Pan-Amazon region, we exceeded
the Sustainability Vision 2020 target of
R$ 1 billion in business volume in the
region, by over 50%. At the end of 2018,
business volume already stood at more
than R$ 1.5 billion.
For the 14th year running, in 2018 Natura
was listed on the São Paulo B3 stock
exchange’s Corporate Sustainability
Index (CSI). The company is also listed
on the Dow Jones Emerging Markets
Sustainability Index.
Natura &Co: global results
With positive contributions from Natura, The Body
Shop and Aesop, the group’s consolidated net revenue
increased by 36%, reaching R$ 13.397 billion in 2018.
Consolidated Ebitda, at R$ 1.847 billion, grew 6%. Net
income, however, decreased by 18%, totalling R$ 548.4
million, impacted by factors such as servicing the debt
incurred with the acquisition of The Body Shop.
Our financial statements may be accessed at: natu.
infoinvest.com.br/en
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11
2018 ANNUAL REPORT
presentation / our essence / message from the board of directors / message from the ceo / natura / performance highlights
Main indicators
Direct economic value generated (R$ million)1 GRI 201-1
Direct economic value generated (R$ million)2
Gross total revenues
Economic value distributed (R$ million)2
Operating costs
Employee salaries and benefits
Profits distributed3
Payments to suppliers
Payments to government
Payments to creditors
Community investments4
Total
Economic value retained (R$ million)2
“Direct economic value generated” less “Economic value
distributed”
Other economic indicators
Consolidated net revenue
Consolidated Ebitda
Consolidated net income
Internal cash generation
Average daily traded volume of shares5
2016
Not available
2016
Not available
Not available
Not available
Not available
Not available
Not available
Not available
Not available
2016
Not available
2016
7,912.7
1,256.5
308
407
39
2017
13,824
2017
4,873
1,836
670
3,116
1,994
1,040
295
13,824
2017
0
2017
9,857.42
1,786.74
724.18
617
46
2018
19,131
2018
5,619
2,813
548
4,712
2,414
2,693
330
19,131
2018
2018
13,397.42
1,846.19
548.38
469.24
59
1. Reported consolidated Natura &Co indicators for 2017 and 2018 and Natura and Aesop for 2016.
2. The methodology was revised to better reflect Natura’s financial statements, involving revision of the allocation
of some items. It was not possible to make this allocation retroactive to 2016.
3. Takes into account net profit attributable to controlling shareholders and the participation of non-controlling
shareholders.
4. Amounts recalculated under GRI guidelines, taking into account Crer Para Ver revenues; business volume in the
Amazon and investments in supplier communities (except for supplies); investments in surrounding communities;
Movimento Natura, support and sponsorship.
5. Source: Bloomberg.
Environmental indicators
Relative GHG emissions (kg CO2e/kg product billed)1 2
2016
3.17
2017
3.20
GHG emissions in the value chain (tCO2e)2
303,424
308,048
Water consumption in Brazil (l/unit produced)
% post-consumer recycled material in finished
product packaging — Brazil
% eco-efficient packaging in Brazil3
Vegetalization rate in formulas (% of total mass)
Raw materials originating in Pan-Amazon region
(% in relation to R$ million)
0.53
4.3
20
83%
19.1%
0.53
4.6
21
81%
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. 2018 inventory audited by KPMG.
3. 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.
18.1%
17.8%
Social indicators
0
Crer Para Ver revenue (R$ million)1
Families benefiting in Pan-Amazon supplier communities
2016
38.2
2,119
2017
35.7
4,294
1. Includes proceeds from Brazil and operations in Latin America.
Economic value distributed (%)1
2016
2017
Operating costs
Employee salaries and benefits
Payments to providers of capital
Payments to government
Payments to creditors
Community investments
Total
Not available
Not available
Not available
Not available
Not available
Not available
Not available
34.51
13.02
4.75
24.6
14.18
7.38
97.91
1. The methodology was revised to better reflect Natura’s financial statements, involving revision of the allocation
of some items. It was not possible to make this allocation retroactive to 2016.
12
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3.14
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2018
44.2
4,636
2018
29.37
14.71
2.87
24.63
12.62
14.08
98.28
2018 ANNUAL REPORT
13
Strategy
2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Strategy
Natura’s strategic planning has evolved
into an ongoing programme that
adds new elements to existing guidelines
whenever necessary, reinforcing the course
we have drafted for the company’s future.
With this new framework, we have gained
agility to remain abreast of the rapid
changes taking place in the world and the
transformations Natura itself is undergoing.
Another key advance in 2018 was the
greater integration of the strategies of our
operations in Brazil and the other countries
in Latin America, ensuring a more wide-
reaching management vision. We seek to
respond to current challenges, but without
taking our eyes off the long term.
Our business’ transformation cycle
completed two years in 2018. Our efforts
were focused on two major drivers:
redefining the meaning of direct selling
and in the process transforming it into the
company’s Relationship Selling model, as
well as prioritising three key categories
(perfumery, body and gifts) to boost our
market penetration. Our results in 2018
demonstrate the astuteness of these
decisions. The number of consultants
occupying the higher segments of the new
model grew, as did their productivity rate
and average income. We strengthened our
leadership in the key categories.
These major drivers are complemented by
our multichannel and sub-brand strategy.
Together, they are essential for promoting
the other motors of the future which will be
prioritized from 2019. These are related to
the construction of a new organisational
culture, the digitalization and the
internationalisation of the business.
Natura, The Body Shop and Aesop, the
three companies in the Natura &Co group,
maintain their specific strategic agendas,
but with room for sharing solutions and
seeking synergies. We have created
Excellence Networks in the Digital,
Sustainability and Retail areas, in which
executives from the three companies share
best practices and develop joint actions. For
example, Natura’s international growth will
be supported by the existing relationship
network of The Body Shop, which has over
2,900 stores in 69 countries.
14
Natura’s drivers for the future are:
>>>> Recover brand preference and desire;
>>>> Pursue greater differentiation in focus categories
by means of innovation;
>>>> Boost the power of direct selling, improving the shopping experience
for consumers and profitability for consultants;
>>>> Expand multichannel presence;
>>>> Accelerate the business’ digital transformation;
>>>> Enter international markets that permit
accelerated growth;
>>>> Adopt innovative people management and
organisation models that enable future businesses.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Business model
A Poweful Cycle
We strive to structure
our activities in a circular
manner. Processes are
designed to harness the
full potential of the
resources involved,
to drive greater
productivity, to reduce
environmental impact
and to boost positive
social impact.
It is a model that is
interconnected and
self-renewing (the
illustration at the side
separates the initiatives
into “environmental”,
“social” and “economic”
to systematize them,
but they are all
interconnected).
B
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Formulations
Portfolio comprising
90% natural
products1.
100% organic
alcohol in
perfumery
No animal testing
since 2006; Peta and
Cruelty Free
certification.
22%
eco-efficient
packs2,
50% recyclable
and 5.4%
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1
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Open innovation
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innovation
network that
includes
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bem estar bem
(well being well)
#porummundomaisbonito
(#foramorebeautifulworld)
Ethical trade
Traceability from the first
link in the chain and
UEBT certification for the Ekos
product line
Communities
5,600 families supplying
social biodiversity
ingredients, of which 81% in the Amazon
region; 17.8% of all production
inputs from the Pan-Amazon region
More than R$ 1.5 billion
in business volume
in the Amazon since 2010
Impact valuation
EP&L published since 2016;
in 2018, we started to measure
the business’ externalities from an
integrated perspective (environmental
and social) by means of the IP&L
(Integrated Profit and Loss)
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New positioning
Launched in the beginning of 2019, the
phrase “The world is more beautiful with
you” is an invitation to engage
Conscious consumption
Environmental table and product impact
declaration for consumers purchasing from
the website. Reverse logistics for 32.8%
of the waste generated from packaging
(working at industry
level and in the supplier chain)
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and a further 2 %
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1. With vegetable and biotechnological
ingredients.
2. Eco-efficient packaging is at least 50%
lighter than regular/similar packaging;
or comprises 50% post-consumer and/or
renewable non-cellulosic materials that
do not increase mass.
3. Share of sales of products launched in the
last 24 months in total gross revenue in the
last 12 months (refers only to Brazil).
U
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Multichannel Natura
Anchored in the Relationship
Selling model, that was
restructured in 2017 and continues
to be one of the business’ key
strengths, Natura has been
consolidating its multichannel
positioning as a company prepared
to serve consumers in the manner
that they choose – by means of
direct interaction with the Natura
Beauty Consultants, digitally or via
the different retail experiences we
offer. This course is marked
by the connection between the
channels, which leverages our
presence and ensures even
greater proximity with our brand.
There follows a description of the
main advances in our business
strategy in 2018.
The power of Relationship Selling
In 2018, we advanced in the revitalization
of our direct selling model, which was
store, becoming Beauty Entrepreneurs.
Our network is supported by Business
Managers. These are Natura sales
force employees responsible for
monitoring the work of leaders and
training new consultants.
In Brazil, we ended the year with almost
1.06 million consultants, a 6.3% reduction
compared with 2017. This slight decrease
in the size of the channel was expected
and has been offset by the ongoing
increase in productivity. Other indicators
demonstrate the effectiveness of the new
format. Currently, 34% of the consultants
in Brazil are positioned in the higher levels
of the plan: Silver, Gold or Diamond. The
number of consultants who join Natura
and progress to a higher level more quickly
has also increased, which demonstrates
greater engagement in the activity. Among
its 5,300 leaders, Natura now has around
one hundred consultants in the highest
category. Network productivity grew
during nine consecutive quarters, with
a cumulative 18.4% increase in the last
quarter of 2018 (compared with the year
ago period). This is a reflex of the new
model and the company’s commercial
renamed Relationship Selling. This
is guided by three major principles:
Prosperity, Purpose and Belonging.
The new format offers Natura Beauty
Consultants a series of career progression
levels. They enter at Seed level and as their
performance improves they advance to the
levels Bronze, Silver, Gold and Diamond. At
each new level, the percentage they earn
from sales increases. As they ascend on
their career path, they also gain access
to a series of benefits, such as courses,
rewards and recognition measures.
Attentive to the different profiles and
professional ambitions of our consultants,
we also offer other possibilities for
progression. One of these is becoming a
Business Leader (possible from level Silver
on), a position combining direct product
sales with the task of leading a group
of consultants, helping them to develop
their business and providing them with
support in their work routines. Consultants
with an entrepreneurial bent and a high
business volume also have the opportunity
to open an Aqui Tem Natura franchised
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strategy, particularly in the perfumery,
body and gift categories. The consultants’
average earnings grew 12% in 2018,
while average remuneration for Business
Leaders increased by 25% compared with
2017. GRI 203-2
The main challenges involved in fully
consolidating the model in Brazil are
ensuring proximity with new consultants
and engaging leaders. For this reason,
Natura has been investing in initiatives
such as new rituals for beginner
consultants and in leadership development.
Relationship Selling is being expanded to
Latin America, initially to Chile and Peru,
and should be in place in all the countries
in which we operate in the region by
the end of 2019. In the Latin American
operations, the total number of consultants
increased from 589,000 to 645,000,
growing in all the countries except for
Chile, where consultant numbers remained
stable from 2017 to 2018.
2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Consultants: Brazil + Operations in Latin America (thousands)1
2000
1500
1000
500
0
2016
2017
2018
1. Does not include Business Leaders/NCAs.
+ than 1.7 million
Natura Beauty Consultant
1,718.0
1,702.8
Consultants - Brazil
Consultants (thousands)
Business Leaders1
2016
1,256
8,310
2017
1,129
5,221
2018
1,058
5,323
1,218.6
1. The Business Leaders replaced the Natura Consultant Advisors (NCAs)
Consultants - Operations
in Latin America (thousands)
2016
2017
2018
Argentina
Chile
Colombia
França
Mexico
Peru
Total
161.2
74.3
87.8
2.5
125.8
94.0
545.5
170.9
73.4
96.7
0
160.6
87.4
589.0
189.0
73.0
108.4
0
183.9
90.5
644.8
12%
increase
in consultants’
average income
25%
increase
in Business Leaders’
average income
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NCAs/Business Leaders in the Operations
in Latin America1
Chile
Peru
Colombia
Total
2016
2017
2018
681
901
691
2,273
420
845
719
1,984
420
650
700
1,770
1. In the operations in Latin America we still have countries using the NCA (Natura Consultant Advisor) model.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Technology to leverage the consultant’s business
In 2018, we advanced in the digitalization
of the Relationship Selling model. We
ended the year with some 860,000
consultants using the Consulting platform
in Brazil and Latin America. This is
available as an app for smartphones and
in the form of a mobile website (launched
at the beginning of the year). Moreover,
500,000 consultants do business
over the internet via the Rede Natura
(Natura Network). Of these, a half work
simultaneously with the online and face-to-
face formats.
of consultants who do not use the
Consulting platform.
It is also possible for a person interested
in becoming a Natura Beauty Consultant
to apply via the web and the app.
The process is fully digital and rapid,
with no need to send any physical
documents to Natura. As a result a new
consultant is registered immediately.
In the previous format, the conclusion
of the application process for
consultants took on average 15 days.
The Consulting platform contains a number
of features that support the consultants’
sales, from order entry to access to sales
performance records. Both the website
and the application are also accessed by
Leaders and Business Managers, who
receive support in the form of exclusive
tools to facilitate their work. The results
underscore the potential of the adoption of
digital tools for the consultant’s business:
the productivity of those using the tools
is on average 11.9% higher than that
To boost adhesion to the Rede Natura,
in which consultants have their own
webpage to sell products to their
customers, we nominated a group of
Business Managers as ambassadors
for the digital channel, with the mission
of disseminating it in meetings and
training sessions for consultants. During
the course of the year, we intensified
internal efforts to converge the two
consulting models with a view to ending
the separation between face-to-face
consulting and digital consulting. This process
should be concluded in 2019. The goal is to
ensure that all the consultants may use these
resources to promote their business and have
access to tools that best meet the needs of
their customer profiles. This will also help to
extend the proven benefits and advantages of
digitalization to the entire network.
In 2018, we introduced a new means
of payment, which boosts sales force
productivity in launch events for the main
commemorative dates, such as Mother’s
Day, Valentine’s Day and Christmas. Using
the Consulting platform, it is possible to
place product orders for these launch events
and pay with support from a card terminal
that offers exclusive commercial terms. This
ensures greater flexibility and autonomy
for the sales force and for the consultants.
Since its launch, the new means of
payment has generated revenue of more
than R$ 100 million.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Online training
Another key element in digitalization is
training. Currently, a major part of the
training provided for consultants in Brazil
is virtual. This format has proved to be an
important option because it enables the
consultant to undertake the training at
her convenience. The number of online
training events increased by over 40%
in 2018, in particular via the Consulting
application. The total number of training
sessions undertaken in the year was 2.9
million. Especially noteworthy among the
face-to-face training sessions were those
conducted by specialist consultants, who
disseminate their knowledge of the Natura
portfolio (in particular face and makeup),
helping to qualify other consultants and
boost their productivity.
Average annual income for consultants and leaders Brazil (R$)
Consultants
Business Leaders
40,000
30,000
20,000
10,000
0
37,195
29,803
18,428
4,028
4,728
5,318
2016
2017
2018
Nat: the Natura virtual assistant
A highlight during the year was the arrival of our personified virtual assistant:
This is Nat – our artificial intelligence system made available to the network via the
website and the Consulting app. With Nat, in just a few clicks, consultants and the
sales force can address any questions related to records, credit and payments.
On average, 60% of the contacts with Natura undertaken via the virtual assistant are
resolved without the need to resort to a traditional human attendant. Even so,
for more complex situations or whenever it is deemed pertinent, the consultant
or customer may opt to talk to a person.
The virtual assistant came about after rounds of talks with consultants and leaders.
The objective was to create a persona with whom our network could identify,
employing the best possible technology to ensure rapid, simple service while
maintaining a sensation of proximity with Natura. Nat will be launched in the
operations in Latin America in 2019.
A project is also underway to leverage the use of the data generated by the
Consultant Experience Centre, located in our administrative headquarters in
São Paulo (SP), which monitors information on logistics, product availability and sales
results in real time. The project will include the expansion of the synergies between
the cross-functional team working in the centre, raising the service levels provided
for consultants even higher.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Network loyalty
In Brazil and in the operations in
Latin America we monitor consultant
loyalty. The indicator comprises three
elements: satisfaction, intention to
continue the relationship with Natura and
recommendation of the company. In Brazil,
we started to release the results for loyalty
and satisfaction based on the annual
average of the surveys carried out in each
sales cycle. These are now conducted
fully online and represent a more varied
participant profile (previously, we reported
the result of the annual survey).
In 2018, the loyalty rate among consultants
was 22.5%. This percentage corresponds
to the proportion of respondents who gave
Natura top scores on the three elements
assessed. The result is in line with the
target established for the period (between
20.8% and 25.4%) and with the average
survey results for the 2017 cycles, when
the rate was 22.2%. Among the leaders,
loyalty corresponded to 12.1% in 2018,
a reduction of more than five percentage
points compared with the previous year’s
17.3%. More frequent surveys – among
leaders measurements are taken every two
sales cycles – have enabled us to
take measures to improve loyalty levels
within this group. Addressing this point
will continue to be a priority for the
company in 2019.
In the operations in Latin America we still
divulge the results of the annual survey.
There was a slight decrease in consultant
loyalty in 2017, from 43.1% to 42%.
Among the leaders and Natura Consultant
Advisors (a role that still exists in some
countries that have yet to adopt the
new Relationship Selling model), loyalty
increased by more than three percentage
points, reaching 59.5%.
Relationship quality1 consultants – Brazil (%)
Satisfaction2 4
Loyalty3 4
Relationship quality1 leaders – Brazil (%)
Satisfaction2
Loyalty3
Relationship quality1 consultants –
Operations in Latin America (%)
Satisfaction2
Loyalty3
Relationship quality1 leaders/NCAs –
Operations in Latin America (%)
Satisfaction2
Loyalty3
2016
75.4
19.4
2016
66.4
12.9
2017
76.6
22.2
2017
68.3
17.3
2018
78.8
22.5
2018
64.8
12.1
2016
2017
2018
94.0
37.4
2016
96.3
53.3
95.7
43.1
2017
97.2
56.3
95.2
42.0
2018
97.5
59.5
1. Source: Ipsos Institute.
2. Satisfaction: percentage of consultants and leaders who are “completely satisfied” or “very satisfied”, who gave a
score of 4 or 5 (“Top2Box”) on a scale from 1 to 5 points in relation to their overall satisfaction with Natura.
3. Loyalty: percentage of consultants and leaders who gave the top score (“Top1Box”), on a scale from 1 to 5 points
in the three aspects: overall satisfaction with Natura, intention to continue the relationship with the company and
recommendation of Natura to other people.
4. In Brazil, we started to release the results of the annual average of the surveys undertaken in each sales cycle
for the satisfaction and loyalty indices. The data from the historical series were adjusted to ensure comparability.
Previously, we reported the results of the annual surveys.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Rede Natura:
among the best in e-commerce
In the Rede Natura, our online sales
channel and digital relationship platform,
we exceeded the mark of 5 million
registered customers and were elected the
best e-commerce in Brazil by the certifying
body Nielsen/Ebit. This was the first time
we received the top award, the result of a
technical assessment based on surveys
conducted among consumers who shop via
the web. In the popular vote for this award,
once again we were recognized as the
most popular store in the Cosmetics and
Perfumery category.
The Rede Natura network enables
consumers to purchase online, offering
innovative features such as support
from a consultant. Consultants are able
to maintain their own virtual store on
the Natura platform, with an exclusive
web page and specific tools to support
customer relations. In addition to Brazil, the
Rede Natura is in operation in Chile and in
Argentina, and we are currently concluding
implantation in Peru, Colombia and Mexico.
We also operate via e-commerce in the
United States and in Europe, the latter
supported by our operation in France.
In financial terms, 2018 revenues from
the Rede Natura increased by more than
40% compared with the previous year.
Once again, the performance during the
Black Friday promotions, held at the end of
November, was worthy of note. To maintain
service levels during this period, we set up an
agile structure based on the start-up model
whereby various areas work as a single team
in the same physical space. This is aimed at
improving the experience for the consultant
and the consumer – a similar model had
already been adopted on commemorative
dates (Mother’s Day, Father’s Day, Valentine’s
Day and Christmas), when the transaction
volume increases both in the digital and
physical channels.
We are committed to driving continuous
improvement in the consumer experience
in our online channel. In 2018, we launched
the virtual mirror in the Rede Natura
application. By activating the camera on
their smartphone or tablet, users are able
to simulate the tones of Natura Faces,
Natura Una and Aquarela products on their
face. The purchase conversion rate among
people who use this feature on the app is
68% higher than the rate for other users
of the application. In 2018, the number
of customers who purchase via the Rede
Natura app continued to grow.
As part of our efforts to drive convergence
between the digital and physical
businesses, at the beginning of 2019 we
created the unified Natura website, which
combines the full e-commerce experience,
content, branding and institutional content,
providing a complete experience for new
consumers who want to access everything
with just a few clicks.
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5 million
consumers
Best
e-commerce
in Brazil in the Ebit Award
Online
sales
in Brazil, Argentina,
Chile, France and the USA
Rede Natura
in 2019
will also be available in: Peru,
Colombia and Mexico
2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Digital causes
We are stepping up our efforts to engage the consultants and the consumers who
acquire our products via the digital channel in the socioenvironmental causes we
advocate. Upon concluding a purchase on our platform, customers are able to
visualise the positive impact generated by buying a Natura product. For example, if the
product is from the Crer Para Ver line, the purchaser receives information about the
educational initiatives developed by the Instituto Natura. With the Ekos product line,
we publicise our efforts aimed at conserving biodiversity in the Amazon region.
During the 2018 Black Friday, part of the proceeds from Rede Natura sales were
invested in educational projects developed by Natura Beauty Consultants. Upon
finalising their purchase, customers received information about the initiatives which
they could then share on their social networks.
Expansion of Natura Stores
The strategy to expand our retail
presence was further developed in
2018. We inaugurated 17 Natura stores
during the course of the year. In December
2018, there were 45 spaces, of which
36 were in Brazil, two in Buenos Aires
(Argentina), two in Santiago (Chile), three
in Paris (France), one in New York (USA)
and one in New Jersey (USA). In Brazil, in
addition to São Paulo and Rio de Janeiro,
we opened stores in the Distrito Federal
and in the states of Goiás, Mato Grosso,
Mato Grosso do Sul, Minas Gerais, Paraná,
Santa Catarina and Rio Grande do Sul. The
results were positive, with the company
achieving its revenue generation and
Ebitda (earnings before interest, taxes,
depreciation and amortisation) targets.
Natura’s retail presence is constantly
evolving. In 2018, we designed a new
concept for the Natura stores, providing a
more in-depth experience for consumers
inspired by the brand’s references and
22
causes. Given the possibilities generated by
the connection between the physical and
virtual channels, we are testing the use of
self-service terminals to enable customers
to purchase Natura products that are not
sold in our stores and receive them in
their home. Customers may also purchase
products on the Natura website and opt to
pick their order up from the nearest store.
Our experiences to expand our retail
presence include a partnership with the
Sephora cosmetics chain. The perfumery
lines and Chronos, Aquarela, Natura Una
and Natura Ekos sub-brand products are
available from four of the chain’s stores
and two of its kiosks in Brazil, as well as via
e-commerce. In contrast, the decision was
taken to terminate the pilot project with the
Renner department store chain. The Sou
product line continues to be commercialized
in some 3,800 pharmacy outlets from the
RaiaDrogasil, São Paulo, Pacheco, Panvel,
Araújo, Clamed and Extrafarma chains.
Aqui Tem Natura and the
Beauty Entrepreneurs
We ended 2018 with 192 Aqui Tem Natura
franchised stores in 16 states in Brazil.
These are run by consultants who decide
they want to open their own business
and adopt the format known as Natura
Beauty Entrepreneurs. This number is
projected to continue to expand during
the course of 2019.
The model is advantageous for
consultants because the cost is lower
and the return on investment is faster
than average for the Brazilian franchise
market. In addition to generating
revenue, the format stimulates the
generation of formal employment –
one of the company’s requirements is
that franchisees formally register their
employees. Franchisees also receive
support from Natura in marketing
strategy and have access to specific
training programmes. For customers, the
Aqui Tem Natura stores offer a shopping
experience focused on practicality and
product trial, with a range that can
include the full Natura portfolio.
According to a study conducted
internally, the opening of Aqui Tem
Natura stores also boosts business for
consultants who do not have franchises.
This is because many customers see the
brand’s products in the stores and end
up buying them via the traditional direct
selling channel.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Focus on technological innovation
N atura’s digital transformation
continued to advance in 2018
and was not restricted to Relationship
Selling. Convinced that technological
innovation is fundamental for expanding
and differentiating the business, we have
already started to reap the benefits of
some of our recent investments. We pay
close attention to new solutions arriving
on the market and focus on increasing
investments in features such as big data
and machine learning solutions that
can drive positive results for different
company areas.
After conducting a series of concept
proofs during the course of 2017 to
identify disruptive technologies that best
meet Natura’s current needs, 2018 was
marked by the implementation of some of
these solutions. In January, a 3D printer
was installed in the factories in Cajamar
(São Paulo). This is capable of producing
permanent plastic parts to replace
damaged machinery components. Prior to
this, it was necessary to acquire new parts
from suppliers. In addition to reducing
costs and the volume of parts in stock,
the technology ensures rapid replacement
in the event of breakdowns, avoiding
excessive down time.
In September, a collaborative robot was
introduced on the packaging line of the
Natura Plant production line. It can operate
in processes such as fitting lids and valves,
activities that require repetitive movements,
which could represent the risk of occupational
disease for employees. Process robotisation
was also introduced into the Shared Services
Centre during the course of 2018. Five robots
came into operation. Five employees were
trained to operate them, resulting in the
successful execution of 37,000 transactions.
The company expects to increase the number
of collaborative robots employed in similar
functions in 2019, aimed at raising safety
levels in the work place.
We started to use a system based on IoT
(Internet of Things), which can predict
deviations in the reactors and packaging
lines and thus improve production
performance, as well as software that
simulates production processes and helps
to map opportunities for optimisation. An
augmented reality solution is also being
tested with a view to boosting employee
productivity in the operational units.
Some of these initiatives are being
developed in partnership with start-
ups, another work front that expanded
significantly in 2018. In addition to
hiring these entrepreneurs to develop
specific projects, the company maintains
the Natura Start-ups Programme. This
supports businesses in areas such as
cosmetics, interactivity and biodiversity
and is in place in Brazil and Argentina. The
Natura Start-ups Programme also helps
to disseminate the concept of innovation
internally, engaging different areas of
the business in the quest to stimulate
disruptive advances and collaborative
work. In the ambit of the Natura Start-ups
programme, we conducted a new round of
business in the Amazônia Up programme,
which is intended to develop ideas,
prototypes and businesses in the fields of
forestry and biodiversity in the Amazon
region (further information on page 50).
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23
2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Innovation for sustainability
The company has been reaping the
benefits of the redesign undertaken
in the Innovation area in recent years,
aimed at developing ever more agile and
disruptive processes. Currently, this sector
is organized in two major areas that report
to Marketing, Innovation and Sustainability,
which ensures more effective alignment
between science, product development and
the company’s commitment to generating a
positive social impact.
The effectiveness of this reorganization is
confirmed by the indicator that measures
the time Natura takes from the approval of
a project to develop a new product to its
conclusion. From 2017 to 2018, this time
was reduced by approximately 50 days.
Considering the actual product launch,
there was a 15% reduction in the average
lead time compared with 2017.
With research centres in Cajamar
(São Paulo) and the Ecoparque site
in Benevides (Pará), in 2018 Natura
approved investments to revitalize its
science and technology park. The project,
which will be executed throughout 2019
and 2020, should drive even greater
efficiency and productivity in innovation-
related activities, boosting synergies
among the professionals active in the
area. Another measure underway is the
sharing of experiences between innovation
professionals at Natura and the other two
companies in the Natura &Co group: The
Body Shop and Aesop.
Main deliveries
In 2018, we consolidated the use of
genomic technology tools that enable the
study and simultaneous genetic mapping
of diverse active ingredients. We acquired
a 3D skin printer to carry out effectiveness
and safety tests on ingredients and high-
technology sequencing equipment for
analysing human microbiota, the bacterial
ecosystem that helps protect the skin (this
technology, already employed in the Naturé
product line, will be featured in the main
product launches planned for the face
and body categories in 2019). Genomics
enables us to expand our knowledge about
the effects of ingredients, permitting the
development of high performance formulas
and products.
We increased the content of natural
ingredients in our formulas even further,
which will be one of the highlights of
our product launch strategy for 2019,
especially in the hair care category.
Currently, our portfolio comprises
products that have on average 90%
natural ingredients, which includes the
use of vegetable and biotechnological
components. Considering only the
vegetalisation rate, the formulations of
24
our portfolio in Brazil and in Latin America
contain 81% vegetable ingredients.
We also invest in providing an enhanced
experience for our consumers. Some
Natura stores are already equipped with
a device that conducts an assessment of
the consumer’s skin in real time, enabling
staff to recommend the most appropriate
products. On another front, a solution to
analyse hair is also under development.
Formulations GRI 417-1
Origin of material and product certification1 (%)
2016
2017
2018
Material of renewable vegetable origin – Brazil
Material of renewable vegetable origin – Operations in Latin
America2
Material of renewable vegetable origin – Brazil + Operations
in Latin America2
83
75
81
75
Not available
Not available
Material of natural vegetable origin– Brazil
6
6
Material of natural vegetable origin – Operations in Latin
America2
Material of natural vegetable origin – Brazil + Operations in
Latin America2
Not available
Not available
Not available
Not available
Material with certification of origin – Brazil
13
13
Material with certification of origin - Operations in Latin
America2
Material with certification of origin - Brazil + Operations in
Latin America2
Not available
Not available
Not available
Not available
82
76
81
15
24
16
14
16
14
1 Calculation considers dry base of raw materials present in product formulation. Vegetable origin: raw material of
vegetable origin that has been subjected to some chemical process (e.g.: organic alcohol); Natural vegetable origin:
raw material of vegetable origin that has not been subjected to a chemical process (e.g.: oil extracted from seeds
without a processing stage).
2. Reporting of this information was initiated in 2018.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
2018 product launches
Natura launched 233 new products
on the Brazilian market in 2018. Our
innovation rate (share of sales of products
launched in the last 24 months in total
gross revenue in the last 12 months)
corresponded to 59.9%, stable in relation
to previous years and maintaining high
levels of contribution to the business.
Particularly worthy of note in 2018 was
the perfumery category. Natura has a
molecular olfactory library consisting of
more than one thousand components,
which supports the work done by our
exclusive perfumer, Verônica Kato. We
launched Essencial Oud, for men and
women, whose south-east Asian ingredient
was presented in an unprecedented
form in Latin America. Another launch
Innovation
Investments1 (R$ million)
% of net revenue invested in innovation1
Products launched2
Innovation rate (%)3
was Kaiak Aero, for men and women, a
refreshing fragrance option appropriate for
the summer. Another launch in women’s
perfumery was Luna Intenso, with patchouli
and notes of peach and vanilla. In men’s
perfumery, Natura Homem launched Cor.
Agio, the most most intense option in the
line, with an innovative bottle without a
lid that is more practical to use. We also
relaunched the Aquarela makeup line,
with new formulas, colours, finishes and
packaging. The Natura Una product line
also featured novelties. There was a special
summer edition of the Tododia line, with
specific fragrances – such as Folhas de
Limão and Graviola and Lima and Flor de
Laranjeira. The brand also sought to engage
consumers around questions such as
acceptance and self-love.
2016
2017
2018
Meditation App
In addition to products, the company also launched a service during the year:
the Natura Meditation application. This provides an eight-week guided
meditation programme, with daily activities focused on breathing, relaxation and
mindfulness. The purpose is to help users to manage anxiety, among other
characteristic problems of contemporary life.
The Natura Meditation app is the result of a programme to promote well-being
and reduce stress. It was developed by Natura, the Instituto do
Cérebro do Instituto Israelita de Ensino e Pesquisa Albert Einstein and the
Associação Palas Athena. The benefits of the activities proposed in the app
were tested and proven in experiments with employees of Natura and Albert
Einstein. The next step will involve the incorporation of new features into the
application, which may be downloaded free of charge and is available for the
iOS and Android operating systems. Between the launch, which was in
September 2018, and December 2018, the application was downloaded more
than 142,000 times.
1. Data refer to Brazil and the International Operations.
2. The number of products launched includes only products that represent a new value proposition for the
consumer, including new packs and formulations. The number refers only to Brazil.
3. Share of sales of products launched in the last 24 months in total gross revenue in the last 12 months.
The rate refers only to Brazil.
188
2.0
255
57.1
172
2.2
213
64.6
188
2.2
233
59.9
25
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Highlights in the year
ESSENCIAL OUD FOR MEN AND WOMEN
Oud, or agarwood, a rare and noble ingredient from South-east
Asia, was brought to Latin America for the first time by Natura.
It is one of the most luxurious components in a perfumer's
palette, endowing the two fragrances in the Essencial product
line. In the men’s and women’s versions, the opulence of the
oud or agarwood is enriched by the essential oil of copaíba,
an ingredient from Brazilian biodiversity. The fragrance
is a co-creation of Natura’s exclusive perfumer Veronica
Kato and oud specialist Pierre Guéros, perfumer for
the Symrise fragrance house .
Una Nude Me Base Sérum FPS 18
a major makeup launch for Natura in 2018, the
ultrathin texture foundation dovetails with one of
the biggest trends in the beauty world: appreciation
of the natural allied with cutting-edge technology.
With a duration of 24 hours, the product enables
the desired coverage with lightness and comfort
without looking at all artificial. Its exclusive Oxygen
technology, associated with Brazilian biodiversity
active ingredients such as cocoa extract, promotes
the oxygenation of the skin, leaving it rested,
energized and revitalized.
Natura Homem Cor.agio
launched in December, the men’s deo parfum
features an intense combination of cold spicy
notes, such as rose pepper and nutmeg, with
the warmth of copaíba and cumaru. The name
of the fragrance melds the concepts of "cor",
related to the heart ("coronary"), and "agio",
as a reference to action ("agir" or action in
Portuguese). The Natura Homem product line
invites men to express themselves free from
stereotypes or preconceived standards.
Chronos Sistema de Clareamento
based on 30 years of research
into Brazilian women, Chronos has
developed an innovative skin treatment
system that combines concentrates
of aroeira, an exclusive active
ingredient from Brazilian biodiversity
that has a regulating effect on
melanin production, with recognized
dermatological cosmetic industry
active ingredients such as pure Vitamin
C and glycolic acid. The line comprises
products that, if used together,
enhance perceived results on the
skin by 70%.
Tododia Lima e Flor de Laranjeira
the new line consists of a body toning
deodorant, a perfumed body deo
cologne spray, bar soap and a roll-on deo
antiperspirant and stars the sorbet moisturiser
Hidratante Sorbet Corporal, which can
be stored in the fridge for an even more
refreshing sensation. The launch campaign
is derived from the "Wear your skin. Live
your body" concept, which drives Tododia
communication with the goal of showing that
everybody is ready for the summer.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
New ways of innovating
We maintained the Natura Start-ups
Programme, a platform created
to enable and accelerate innovation
opportunities by means of our interactions
with start-ups. We have explored
innovation in a number of areas with
these companies, such as: treatment
and diagnostics for skin, the body, the
face and hair; new materials and ways
of applying labels to packaging; IoT
(internet of things) and the generation
of new businesses; cosmetic ingredients
and biodiversity active ingredients; and
augmented reality solutions to facilitate
work for the consultants. The programme,
in place in Brazil and Argentina, has
analysed 3,186 start-ups, of which 387
interacted with Natura. A total of 60
testing and development projects were
undertaken. Currently, projects are being
executed with 15 start-ups and more
than 20 start-ups have become Natura
suppliers. In 2018, Natura was recognized
as the third company most heavily involved
in relationships with start-ups in Brazil
CorageN Programme
More and more, Natura is seeking to attract people with an entrepreneurial
profile able to contribute to our processes and drive innovation. In 2018,
we found a new way of capturing these talents with the design of our
CorageN selection programme, in which the only application requirement
for candidates is age – they must be over 18 years.
A total of 20 people were selected and none of them are attached to
a specific company area. Divided into groups of five members, these
individuals receive mentoring and are engaged in developing projects
inspired by agile work methodologies.
by the 100 Open Start-ups movement.
Internally, we are organising a number of
open innovation challenges, which are
aimed at fostering the participation of
professionals from diverse areas. There
were two challenges in 2018, the first
related to microbioma and second to waste.
The company also has two agile cells in
operation. This is a work model which is
being tested in different sectors at Natura. It
is based on multifunctional teams that work
together to speed up project development.
In partnership with the organisation Capes
(Coordenação de Aperfeiçoamento de
Pessoal de Nível Superior), we held the
second edition of the Capes - Natura
Excellence in Research Campus Award,
which recognized two academic scientific
works, one on bioconversion of waste in
the Amazonian chain and the other on
prospecting potential micro-organisms for
bioactive ingredients. The award is part
of Natura Campus, an open innovation
programme created by the company in 2003.
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2018 ANNUAL REPORT
strategy / business model / multichannel natura / focus on technological innovation / innovation for sustainability
Natura is granted Cruelty Free
International certification
GRI 102-11, 416-1, 417-1
Consumer health and safety
GRI 103-2, 103-3, 416-1, 417-1
2018 symbolised the positioning assumed
by Natura in 2006, when the company
stopped animal testing for its products
and raw materials. In September, we were
awarded the Leaping Bunny seal, granted
by Cruelty Free International, which
attests to the non-use of animal testing
throughout our portfolio. The following
month, we received Peta (People for the
Ethical Treatment of Animals) certification,
which also provides assurance that no end
product or ingredient used by Natura is
tested on animals.
In addition to these certifications, we
support the Forever Against Animal Testing
campaign, an initiative promoted by The
Body Shop and Cruelty Free International.
The campaign petition was signed by
8.3 million people and was delivered to
the United Nations Organisation (UNO)
headquarters in October.
28
Committed to ensuring the health and
safety of our consumers, we have
rigorous internal processes in place,
ranging from research into new ingredients,
through the conceptual design of products
to their launch in the marketplace.
Moreover, our cosmetovigilance system
guarantees that products continue to be
monitored after they are launched, thus
stimulating the company’s continuous
improvement processes.
Natura formulations use only safe products
and ingredients that are compliant with
international legislations and best market
practices. The company has definitively
banned the use of the ingredients
triclosan, parabens and phthalates in
its portfolio. We are also eliminating
MIT (methylisothiazolinone) from
non-washable products, in line with
European Union recommendations.
Attentive to our environmental impact,
we have also eliminated polyethylene
microbeads from our rinsable products,
replacing them with biodegradable
exfoliants made from rice
and bamboo. Because they are so small,
microbeads are not retained or eliminated
by sewage treatment systems
and end up in the oceans.
GRI 102-11
In the research and development phase
products and raw materials are subject
to safety and effectiveness tests and
assessments, including in sílico, in vitro and
in vivo studies, stability and microbiology
tests, as well as transportation and
usage tests to ensure that the product
design is compliant with health, safety
and performance requirements. All
company production is subject to process,
microbiology, stability and other pertinent
quality controls.
Our labels provide information on
components manufactured by third-parties,
substances that may generate
an environmental impact, instructions
for the safe use and the proper disposal
of products, as well as recommendations
on the number of times packs may
be reused (refilling), among other data.
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2018 ANNUAL REPORT
Sustainability Vision
(2018 Progress report)
29
2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Vision Achievement Index
Towards our 2020 ambitions.
60%
2017
69%
2018
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Generating a positive impact
We are striving to transform Natura into a company
which, in addition to reducing and mitigating the effects
of its activities, also promotes social, environmental,
economic and cultural welfare.
Our Sustainability Vision is based on
three interdependent pillars
>>>> Management and Organization
>>>> Brands and Products
>>>> Our Network
BRANDS
BRANDS AND
PRODUCTS
AND
PRODUCTS
MANAGEMENT AND
MANAGEMENT
ORGANIZATION
AND
ORGANIZATION
30
OUR
OUR
NETWORK
NETWORK
2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Achieved/
well on track
On track
Not reached/
below target
Achieved/
well on track
On track
Not reached/
below target
Management and Organization
2020 Commitment
Valuation of externalities
Consulting council
Public debate on
materiality
Governance with engagement
Transparency and evolution
Brands and Products
2020 Commitment
Product environmental footprint
33% reduction in
relative carbon emissions
Carbon offsetting
Renewable energy strategy
Water footprint strategy
Eco-efficient packs*
PCR Packs**
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Achieved/
well on track
On track
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below target
Our Network
2020 Commitment
Consultant average income
Consultant
entrepreneurship
Consultant human and social
development
Consultant education
Inclusion of disabled people
Women occupying leadership
positions
Employee engagement
and culture
Evolution of supplier
management
Community human
and social development
Territory strategy (surrounding and
supplier communities)
Strategy to mobilise
consumers
1. Eco-efficient packs: 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
**PCR: Post-consumer recycled material.
31
2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
1Management
and
Organization
The numbers in the coloured squares
refer to the Sustainable Development Goals
(SDGs). See the complete list on page 68.
Management model
Material topic: transparency
and product origin
6
13
12
15
Governance and
Sustainability
Government and
Society
12
16
15
17
75%
Adopt the valuation of
socioenvironmental externalities*
*Includes entire value chain
75%
Implant
consulting council
75%
Stimulate discussion
and debate of the material topics
Engagement with
Stakeholder
Groups
12
16
Ethics and Transparency
Material topic: transparency
and product origin
12
75%
Governance model with external
engagement
75%
Total transparency in product information
and evolution of Sustainability Vision
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
As we approach 2020, the year
established for the achievement of key
ambitions and commitments in our 2050
Sustainability Vision, (https://www.natura.
com.br/sustentabilidade/visao-2050,
in portuguese), we remain firm in our
belief in the transformational power and
the righteousness of the commitment
we assumed: to transform Natura into
a company that generates a positive
impact which, in addition to reducing and
mitigating the effects of its activities, also
promotes social, environmental, economic
and cultural welfare.
In 2018, we reviewed the management
and governance model for the ambitions
and commitments, and we created the
Sustainability Vision Index. Based on OKR
(Objectives and Key Results) methodology,
adopted by a number of Silicon Valley
companies in California (United States),
the calculation takes into account the
percentage of each target achieved in
qualitative and quantitative terms, based
on the goals established for 2020. The
Sustainability Vision index for 2018 stood
at 69%. We are also currently defining our
next cycle of commitments, for 2030.
We are striving to enhance an integrated
vision of the effects of our businesses,
which includes managing environmental
resources, developing the potential of
biodiversity, keeping the forest standing,
promoting social impact, harnessing
the power of our immense relationship
network and mobilising a culture that
enables change. This is furthered by the
collaboration, transparency, diversity and
interdependence of all the members of our
network.
A measure worthy of note in 2018 was
the reformulation of the Natura Amazônia
Programme, reinforcing the dimension
of Science, Technology and Innovation.
This was based on the understanding that
increasing the value generated locally, with
additional research and technology, is one
of the alternatives for boosting the region’s
sustainable development.
We also reaffirmed our commitment
to the United Nations Organization’s (UNO)
Sustainable Development Goals (SDGs),
a global agenda that helps us to
prioritize our initiatives and actions,
enabling us to contribute to society
and develop more sustainable means
of production.
We also furthered our understanding
around the generation of positive social
impact, reinforcing the pillars that involve
our stakeholder groups, the Natura
Beauty Consultants, the forest supplier
communities and the other links in the
supplier chain.
And this vision of pursuing the generation
of positive impact is being extended from
Natura to the other companies in the Natura
&Co group. Sustainability is one of the
three excellence networks, groups involving
managers and teams from the three
companies to promote the development
of joint solutions. The other two areas are
retail and digitalisation. This is the context
in which the Natura &Co Sustainability
Vision is being constructed and will result
in the disclosure of the 2030 corporate
commitments and priorities for Natura,
Aesop and The Body Shop in 2019
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Accounting for our impacts
Five years ago we joined a group of
companies that committed to measuring
the impacts of their activities on nature
and society in an innovative manner. At the
initial stage, we adopted Environmental
Profit and Loss (EP&L) methodology.
This is aligned with the Natural Capital
Protocol best practices for calculating
the externalities or final consequences of
the environmental impacts (or benefits)
generated by the Natura value chain for
society in monetary terms. We published
the results of our first EP&L in 2016,
based on data from 2013, encompassing
the production, commercialization and
final disposal stages for our products.
EP&L methodology takes the following
dimensions into account: water
consumption and pollution, emissions
of greenhouse gases and other
atmospheric pollutants, volume of
solid waste generated and land use.
Since we plan to transform this accounting
into an effective management tool for our
business, we work constantly on evolving
the tool we employ. This was the case in
2018, when we elaborated a new inventory
that enabled us to start calculating the
impacts of products launched by products
billed. Up until 2017, we used the average
impact of the product category. The
alteration generated a slight variation in
the figure reported in 2017, from 6.9% to
7% of Natura’s net revenue. In 2018, our
externalities, that is, the environmental
impacts we generated, grew, accounting
for 7.4% of the company’s net revenue.
The variation was due to the increase in
the volume of products billed in 2018,
driven by business expansion and the
company’s promotional strategy. From the
first calculation for 2013 until the 2018
figure, our cumulative gain in efficiency
in EP&L/Net revenue has been 1.2
percentage points. Being aware of
these figures enables us to better focus
company efforts on reducing negative
impacts and boosting positive ones, in
particular by means of our Carbon Neutral
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programme and water footprint and waste
generation ambitions. According to a co-
benefits study undertaken by Natura in
2018, each R$ 1 invested in our emissions
offsetting programme generates R$ 31 in
benefits for society. Between 2007 and 2018,
these co-benefits totalled R$ 829 million
(further information on page 41). We see the
disclosure of our results as an opportunity to
engage other organizations in this movement.
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Valuation of Environmental Impact
Impact of externalities (R$)
on net revenue (R$)1
Variation against the previous year
(percentage points)
8.6%
7.7%
7.3%
7.3%
7.0%
7.4%
-0.8
-0.4
-0.1
-0.3
0.4
2013
2014
2015
2016
2017
2018
10
8
6
4
2
0
-2
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Integrated valuation
We have already started working from
an integrated perspective, which
assesses the environmental, social and
human impacts of our business on a joint
basis. Inside Natura, we call this IP&L
(Integrated Profit and Loss). It expresses
the results of the company’s environmental
and social externalities in monetary values,
aimed at integrating these impacts into
the business model so that the information
may be used to guide the organisation’s
strategic decisions. We expect to continue
to progress in these assessments to the
point where we will shortly be able to
disclose the result of this study.
During the course of 2018, we advanced
in the valuation of the social impacts of the
business. We employed SP&L (Social Profit
and Loss) methodology, in line with the
human and social capital protocols, using
as a base data collected from monitoring
the Natura Consultant Human Development
Index, NC-HDI (further information on
page 54) to calculate the contributions
generated by the Natura business model to
the consultants’ quality of life. The different
segments they occupy in the Natura
Relationship Selling framework – from the
Seed category through to Diamond - were
taken into account.
The methodology uses the minimum
salary as the zero base value. The income
exceeding this amount is multiplied by
impact factors determined in function of
the social context of the country – in this
case, Brazil –, such as inequality in income
distribution and safety, health and well-
being of the population. The multipliers
adopted by Natura were developed by the
consultancy Valuing Nature (https://www.
valuingnature.ch/single-post/2018/07/20/
VALUING-THE-IMPACT-OF-WAGES-ON-
HUMAN-CAPITAL).
The result of this first analysis, which
took into account only consultants in the
Brazilian market, showed that the positive
social impact derived from the additional
income beyond the minimum salary from
the activity of consulting, was equivalent to
25.7% of Natura’s net revenue in 2017. The
analysis also proved that the consultants
that benefit from this positive impact
demonstrate superior performance and
generate even greater value for Natura.
Impact calculator
gains new
features
The Natura product innovation teams
employ a tool that estimates the
environmental impact of a future product
launch while it is still in the initial phase
of development. The Environmental
Calculator, which started off providing
information on carbon emissions in 2010,
has gradually been gaining new features as
Natura progresses in measuring its positive
and negative impacts throughout the chain.
After including waste generation data,
from 2019 the Calculator will be capable of
estimating a new product’s impact for all
the items assessed by means of the EP&L
(further information on page 34).
Study published
In 2018, a group of Natura specialists,
partners and co-workers published a
scientific article on Life Cycle Assessment
(LCA) in The International Journal of Life
Cycle Assessment, a major scientific
journal. The article presents the findings of
Natura’s O-LCA (Organizational Life Cycle
Assessment), which enables measurement
and management of environmental impacts
throughout the organisation’s global supply
chain, as well as individual analysis of each
product.
Based on the findings of the analysis of 10
products from the company’s main categories
it was possible to extrapolate the study
and estimate the impact of 2,600 items
commercialized in the period studied (2013).
The objective is to provide our researchers
with as much information as possible,
enabling the most conscious choice of
ingredients and packaging materials for
new Natura products. Environmental
impact assessment is a mandatory stage in
the innovation process and, in conjunction
with the other factors inherent to the
business, is an integral part of feasibility
studies for future launches.
The findings indicate that the most
significant effects are concentrated in the
product usage stage (water and energy
consumption for rinsable products),
accounting for more than 41% of the total
impact. The stages comprehending the
supply of production inputs and packaging
materials, as well as the sourcing of
ingredients of vegetable origin also provoke
a significant impact.
35
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
2 Brands
and
Products
The numbers in the coloured squares
refer to the Sustainable Development Goals
(SDGs). See the complete list on page 68.
Climate change
Material topic:
climate change
3
12
7
13
9
14
11
15
Material topic:
climate change
valuation of
social biodiversity
13
14
15
Formula Design
Material topic: valuation
of social biodiversity
3
6
9
12
14
15
Traceability
Material topic: transparency
and product origin
8
12
16
17
6%
Reduce relative GHG emissions
by 33% (base year 2012)*
*Includes the entire value chain.
100%
Offsetting all emissions,
primarily in the Pan-Amazon region*
59%
30% inputs from the
Pan-Amazon region, in value
*Takes into account Natura Brazil.
Packaging Design
Material topic: waste and climate change
3
11
12
55%
Achieve 40% eco-efficient
packs1 2
54%
Use 10% PCR3
in total packaging mass4
1. Packaging at least 50% lighter or comprising 50% post-consumer
and/or renewable non-cellulosic materials.
2. Takes into account units billed.
3. Post-consumer recycled material.
4. Takes into account Natura Brazil.
68%
Use 74% recyclable
material in total
packaging mass4
36
50%
Traceability of 100% of direct
manufacturers’ inputs by 2015.
By 2020, traceability programme
for remaining links in value chain.
Waste
Material topic: waste
3
9
11
12
13
14
15
65%
Collect and forward
50% of waste from product
packaging for recycling.
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sustainability vision / management and organization / brands and products / our network
Social biodiversity
Material topic: valuation of social biodiversity
1
2
12
15
10
17
Energy
Material topic: climate change
7
13
46%
10,000 families in the
Pan-Amazon production chains
141%
R$ 1 billion in business volume in the
Pan-Amazon region
50%
Develop strategy
to diversify sources
of renewable energy*
*Takes into account Natura Brazil.
Water
Material topic: water
6
14
Brands and products
Material topic: transparency and
product origin
12
0%
Develop reduction and
neutralisation strategy
based on water footprint*
*Includes entire value chain.
50%
Disclose environmental and social
footprint for all products
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sustainability vision / management and organization / brands and products / our network
Reduction of environmental impact
One of the topics of our 2050
Sustainability Vision addresses
our commitment to reduce the
environmental impact of the
company’s activities. We have
targets related to climate change,
energy, water, waste and packaging
for 2020 and are working in a
concerted manner to enhance our
performance.
There follows a description of the
main 2018 highlights on each of
these fronts.
from freight haulage operators, as well as raw
materials and packaging materials supplied
by third-parties. We conduct our emissions
inventory, which is audited by an independent
company, on an annual basis.
In 2018, the inventory results indicated a
reduction in relative emissions of approximately
2% compared with 2017. Strategic actions to
improve efficiency in our processes and product
portfolio were essential in achieving this result.
However, absolute emissions increased by 8%.
Based on the monitoring exercise, we were
able to draft GHG emission reduction initiatives
for the entire chain, which is the second front in
the programme. The actions include, whenever
possible, the adoption of lower impact logistics
systems (we have already expanded the use
of cabotage and reduced the use of air freight);
local production in some countries in Latin
Carbon neutral company GRI 103-2, 103-3
Developed in 2007, the Carbon Neutral
Programme was Natura’s first public
commitment to reduce greenhouse gas (GHG)
emissions generated by its activities. The
programme’s first target was a 33% reduction
in the company’s relative emissions by 2013 – a
commitment that was achieved and led to a new
target: a further 33% reduction by 2020, based
on 2012 emissions. To engage both leaders
and employees in this question, since 2009 the
index that measures GHG emissions has been
part of the set of indicators that determine the
company’s profit share payouts.
Monitor and reduce
In order to reduce emissions, we must first
be aware of the extent of our impact. For this
reason, the first front in the Carbon Neutral
Programme involves the ongoing monitoring
of all emissions generated by Natura and its
production chain, which includes emissions
38
America, reducing the impacts generated
by product exports; the use of ingredients of
vegetable origin in our formulas and organic
alcohol in the entire perfumery line; the use
of materials of renewable origin (green PE)
and post-consumer recycled material, such
as PET and recycled glass; as well as the
commercialisation of product refills. In 2018, we
avoided 9,127 tonnes of CO2 equivalent (tCO2e)
scope 3 emissions (other indirect emissions).
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sustainability vision / management and organization / brands and products / our network
GRI 305-1, 305-2, 305-3, 305-4
Total CO2e
emissions (t)12
Relative emissions
(kg CO2e/kg of
product billed)
Cumulative
relative emissions
reduction since
2012 (%)
2020 Vision
Commitment
2016
2017
2018
303,424
308,048
333,183
3.17
3.20
3.14
1.3
0.5
1.8
-33% relative emissions
1. CO2e (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.
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Scope 1
1. Intergovernmental Panel on Climate Change (IPCC). 2006 IPCC guidelines for national greenhouse gas
inventories: Volume 2. IPCC National Greenhouse Gas Inventory Program (http://www.ipcc-nggip.iges.or.jp).
2. Intergovernmental Panel on Climate Change (IPCC). 1997b. Revised 1996 IPCC guidelines for national
greenhouse gas inventories: Reference Manual (Vol 3). IPCC National Greenhouse Gas Inventory Program
3. DEFRA - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224437/
pb13988-emission-factor-methodology-130719.pdf
4. IPCC Fourth Assessment Report - AR4 (2013) - (http://www.ipcc.ch/publications_and_data/ar4/wg1/en/
ch2s2-10-2.html)
5. Balanço Energético Nacional 2013 (BEN 2013) (https://ben.epe.gov.br/downloads/
Relatorio_Final_BEN_2013.pdf)
Scope 2
1. Brazilian Power Grid Emission Factor: Brazilian Ministry of Science and Technology (MCTC) - http://www.mct.
gov.br/index.php/content/view/74694.html
2. Argentinian Power Grid Emission Factor: http://energia3.mecon.gov.ar/contenidos/verpagina.
php?idpagina=2311
3. Chilean Power Grid Emission Factor: http://huelladecarbono.minenergia.cl/emision-para-el-sic
4. Colombian Power Grid Emission Factor: http://www.siame.gov.co/siame/documentos/Calculo_FE_SIN_2013_
Nov2014.pdf
5. Power Grid Emission Factor Peru and France: CO2
Emissions From Fuel Combustion Highlights 2013
6. Mexican Power Grid Emission Factor: http://www.geimexico.org/factor.html
Scope 3
1. Intergovernmental Panel on Climate Change (IPCC). 2006 IPCC guidelines for national greenhouse gas
inventories: Volume 2. IPCC National Greenhouse Gas Inventory Program (http://www.ipcc-nggip.iges.or.jp).
2. Intergovernmental Panel on Climate Change (IPCC). 1997b. Revised 1996 IPCC guidelines for national
greenhouse gas inventories: Reference Manual (Vol 3). IPCC National Greenhouse Gas Inventory Program
3. DEFRA 2013 - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224437/
pb13988-emission-factor-methodology-130719.pdf
4. IPCC Fourth Assessment Report - AR4 (2013) - (http://www.ipcc.ch/publications_and_data/ar4/wg1/en/
ch2s2-10-2.html)
5. Balanço energético Nacional 2013 (BEN 2013) (https://ben.epe.gov.br/downloads/
Relatorio_Final_BEN_2013.pdf)
39
2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Biogenic emissions (tCO2 equivalent)1
Direct biogenic emissions (from the burning or
biodegradation of biomass) GRI 305-1
Indirect biogenic CO2 emissions
GRI 305-3
Total biogenic emissions
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)
2016
2017
2018
GHG emissions – Scopes 1, 2 and 3
(tCO2 equivalent)1
2016
2017
2018
8,870
9,387
10,098
Direct GHG emissions - Scope 1
9,366
18,236
2016
8,976
18,364
2017
9,639
Indirect emissions from the acquisition
of energy - Scope 2
19,737
Other GHG emissions - Scope 3
4,975
5,094
5,187
8,509
6,006
5,072
293,355
296,855
319,602
2018
Total GHG Emissions - Scopes 1, 2 and 3
303,424
308,048
333,183
122,337
119,101
131,504
1. Our greenhouse gas emissions inventory takes into account total emissions from all stages of our operation,
from the extraction of raw materials, through our processes and those in our production chains, to the final
disposal of post-consumer packaging. We comply with GHG Protocol standards and the principles of Brazil’s
ABNT NBR ISO 14064-1 standard, which establish rules for their conception, development, management and
elaboration. In 2018, the Natura GHG emissions inventory was audited by KPMG.
Direct suppliers (process and transportation to Natura)
30,378
29,574
32,654
Industrial and internal processes
15,633
16,754
Product sales (transportation and distribution)
63,465
62,751
Use of products and disposal of packaging
71,611
79,868
Overall total
303,424
308,048
19,814
62,425
86,786
333,183
1. Our greenhouse gas emissions inventory takes into account total emissions from all stages of our operation, from
the extraction of raw materials, through our processes and those in our production chains, to the final disposal of
post-consumer packaging. We comply with GHG Protocol standards and the principles of Brazil’s ABNT NBR ISO
14064-1 standard, which establish rules for their conception, development, management and elaboration. In 2018,
the Natura GHG emissions inventory was audited by KPMG. The sources of emission are the same ones taken into
account in the previous tables.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Offsetting
We offset all the emissions we are
still unable to avoid by contracting
projects that generate climatic and
socioenvironmental benefits. These include
projects aimed at the conservation of social
biodiversity, substitution of fossil fuels and
energy efficiency, based on public calls for
proposals issued by the company. This is
the programme’s third front, which ensures
that Natura remains carbon neutral. Six
calls for proposal were issued from 2007
to 2018, resulting in the contracting of 38
projects, of which 32 were in Brazil and
six in the countries in which we operate in
Latin America: Argentina, Chile, Colombia,
Mexico and Peru. Two thirds of the projects
were related to energy efficiency initiatives,
while the remainder were forestry projects.
38% were located in the Pan-Amazon
region. GRI 305-5
Since 2007, the offsetting projects have:
>>>> Offset 3.4 million tonnes of carbon;
>>>> Conserved or reclaimed 7,593 hectares of forest;
>>>> Avoided the consumption of 571,000 litres of fossil fuel;
>>>> Produced 1,125 GWh of renewable electricity, equivalent
to the annual consumption of 86,500 families;
>>>> Directly impacted 15,367 families;
>>>> Generated 1,874 jobs;
>>>> Generated environmental, social and community services worth the equivalent
of R$ 1.6 billion (further information in the following box).
Positive impact of R$ 1.6 billion
According to a valuation study conducted by Natura, each R$ 1 invested in the carbon offsetting
programme generates R$ 31 in benefits for society. The study encompassed the valuation of the impacts
generated by the offsetting projects, based on Social Return on Investment (SROI 2012) methodology,
revealing the positive impacts of the measures undertaken during the ten years of the Carbon Neutral
Programme. In addition to neutralising Natura’s climate change impact between 2007 and 2018, the
offsetting projects generated co-benefits estimated at R$ 829 million, since the initiatives receiving
investments also contribute to improving human health, community development, job generation,
increased education and training, as well as ecosystem services. Together with the direct investment
made in the purchase of carbon credits, the company’s positive socioenvironmental impact totals
R$ 1.6 billion.
41
Circular Carbon
GRI 305-5
Combining the Carbon Neutral and
Amazônia programmes enabled
Natura to develop its first internal project
to pay for the compensation of carbon
within the company’s own production
chain (a practice known internationally as
carbon insetting). Referred to inside the
company as Circular Carbon, the project
remunerates the families of smallholders
not only for the purchase of ingredients
and benefit sharing, but also for
environmental conservation services.
Up to the present moment the project has
been conducted with the reforestation
cooperative RECA (Cooperativa de
Reflorestamento Econômico Consorciado
e Adensado), located on the border
between the states of Acre, Amazonas and
Rondônia.
Between 2013 and 2016, the deforestation
rate on the 126 participating properties
corresponded to 0.93% – less than half
the average 1.9% rate on surrounding
properties. The conserved area
corresponds to approximately 190 football
pitches and resulted in the avoidance
of atmospheric emissions of 104,000
tonnes of carbon gas. The cooperative
received the first payment in 2017, and
from 2018 payment is on an annual basis.
The transfer of funds is conditional on
the preparation of an annual emissions
inventory audited by a third-party. Part
of the funds are distributed among the
smallholders’ families, while the remainder
goes into a cooperative fund.
Our goal is to eliminate deforestation
completely in RECA by the end of the
25-year project. Furthermore, we want to
replicate the payment for environmental
services model in other regions of the
Amazon from which we source biodiversity
ingredients.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Networking: Commitment to the Climate
GRI 305-5
In 2017, we launched the Commitment to
the Climate initiative, in partnership with
Itaú Unibanco and the Instituto Ekos Social.
This is a platform to select emissions
offsetting projects, whose first call for
proposal received 95 submissions. Ten
projects were selected from these – six
aimed at generating renewable energy, two
that promote conservation in the Amazon
and two that work towards the adoption
of sustainable technologies among rural
populations.
The projects contracted to offset Natura’s
2017 and 2018 emissions were selected
through the first Commitment to the
Climate call for proposal. The company
also wants to stimulate its suppliers and
partners to participate in the platform.
In 2018, the initiative was expanded with
the launch of the Ekos Social platform
(https://compromisso.ekos.social, in
portuguese), which is intended to connect
other companies wanting to neutralise their
emissions with projects that promote a low
carbon economy. In 2019, the São Paulo
B3 stock exchange joined the platform,
which will help us to mobilise other
companies in the capital market. A second
call for proposal for the selection of new
offsetting projects is scheduled.
Efficient stoves in the SDG Brazil award
One of the emissions offsetting projects the company supports was
recognized in the 2018 SDG Brazil award, a federal government initiative to
generate visibility for practices aligned with the 2030 UN Sustainable
Development Goals (SDGs). With its Efficient Stoves Programme, the Instituto
Perene came in third place in the non-profit organisation category.
The programme has been in place since 2008 and has already installed 10,700
sustainable stoves in Brazil’s Recôncavo Baiano region, based on a technology
that permits the reduction of the amount of wood used by stoves. The model
enables the reduction of greenhouse gas emissions and the degradation of
forests, as well as diminishing the occurrence of health problems from the
inhalation of smoke in homes. Part of the cost of the efficient stoves is
subsidised by Natura, while the beneficiaries pay the remainder of the cost.
The company has also helped to implement a similar project in Mexico,
where 4,467 stoves have been installed.
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42
2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Eco-efficient packs and solid waste
GRI 103-2, 103-3, 301-2
Our Sustainability Vision also
encompasses ambitions related to the
increased use of eco-efficient packaging,
post-consumer recycled material and
recyclable packaging and to the reduced
generation of post-consumer waste. It is
our understanding that we are responsible
for our products’ entire life cycle, including
the post-consumer phase, which still
represents the greatest challenge for
Natura and other organisations. In 2018,
we stepped up our commitment in this area
by formally joining the Ellen MacArthur
Foundation’s global New Plastics Economy
commitment, which intends to apply
circular economy principles to the plastics
chain. The commitment establishes targets
for plastic packaging to be reached by
2025. These are aligned with the Natura
2020 Sustainability Vision ambitions.
In comparison with 2017, we made a little
progress in the adoption of eco-efficient
packaging (at least 50% lighter than
similar packaging or comprising 50%
post-consumer and/or renewable
non-cellulosic materials): at the end
of 2018, this represented 22% of our
portfolio. The company’s ambition for
2020 is to have at least 40% of its
packaging within these parameters.
The improvement in the indicator was due
to the robust commercial performance
of refills, which we use for the main
product lines in the portfolio, for the Plant
and Tododia sub-brands (produced with
material of renewable origin) and for the
Natura Ekos body care products, whose
packs are made from 100% recycled
PET. The Sève line was also relaunched
with packs made from 100% recycled
PET. Progress was also made in the use
of recycled glass in perfumery – now all
the Natura perfume bottles have up to
30% recycled glass in their composition.
Challenges in the supply chain hamper our
efforts to increase the use of this material.
These, however, will be addressed in 2019.
GRI 301-2 Eco-efficient packs1 by items billed (%)
2016
2017
2018
Brazil
International Operations
20
21
21
21
Total
Not available
Not available
22
22
22
Vision
Commitment
for 2020
40
-
-
1. Eco-efficient packaging is at least 50% lighter than regular/similar packaging;
or comprises 50% post-consumer and/or renewable non-cellulosic materials that do not increase mass.
GRI 301-2 Recycled materials used in product manufacture
Material
2016
2017
2018
Vision
Commitment
for 2020
Post-consumer recycled material
(PCR)1 incorporated into finished
product packaging – Brazil (%)
Recyclable material2 in
product packaging – Brazil (%)
4.3
51
4.6
50
5.4
50
10
74
1. Percentage of post-consumer recycled material (PCR) in packaging compared with
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.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Less waste
GRI 103-2, 103-3, 301-3
In 2018, we also progressed in our
commitment to collect and recycle 50%
of the waste generated by Natura product
packaging in Brazil by 2020 in tonnes
equivalent. The indicator that measures
our performance increased from 29%
to 32.8%, which is the result
of the volumes recovered in the two
programmes in which we participate:
Elos and Dê a Mão para o Futuro.
The Elos Programme is a shared responsibility
initiative involving Natura and its packaging
suppliers, which is aimed at ensuring
traceability, ratification and reverse logistics in
the post-consumer recycled material supply
chains that we employ for our packaging.
The Dê a Mão para o Futuro (Give the
Future a Hand) programme is a multisector
recycling initiative conducted by Abihpec
(Brazilian personal hygiene, perfumery and
cosmetics industry association), Abipla
(Brazilian cleaning industry association)
and Abimapi (Brazilian industrialised
biscuit, doughs, bread and cakes industry
association).
Internally, we reduced the volume of waste
generated by 11%, in spite of an increase
in production during 2018. For example, we
launched a campaign to eliminate the use
of plastic cups in our offices and started
reusing boxes and lids in our distribution
centres. We also began to sell oil and
alcohol leftovers, which can be used
in the manufacture of cleaning products
and biodiesel.
GRI 306-2
Water Footprint
GRI 103-2, 103-3, 303-1
We remain committed to formulating a
strategy to reduce and neutralise the
impact of water use throughout our value
chain, including the phase of product use
by consumers. To this end, we continued
studies on our water footprint.
In Natura’s industrial processes, relative
consumption remained practically stable
compared with 2017. The slight reduction
is important in view of the increase in the
total Natura produced in 2018,
confirming the efficiency of the
company’s reduction efforts. On the other
hand, absolute consumption increased
because we stopped using reclaimed
water in the gardens of the Cajamar, São
Paulo and Itupeva units, in accordance
with the rules established by the São
Paulo state environmental authority
Cetesb (Companhia Ambiental do
Estado de São Paulo).
GRI 303-1 Water consumption per unit produced
Total litres per unit produced
2016
0.53
2017
0.53
2018
0.52
1. Actual water consumption in all the installations listed (measured by local equipment) divided by the number of
units produced in the production facilities (Natura: data extracted from SAP and third-party suppliers:
data extracted from the monthly report to the environmental area).
GRI 303-1 Water withdrawn by source (m3)
2016
2017
2018
Ground water
190,898
252,016
263,244
[301-3] Recovery
of products and packaging
materials – Brazil (%)
2016
2017
2018
Vision
Commitment
for 2020
Rainwater harvested directly and
stored by the organisation
Water supplied by municipal utility or
water supply companies
Not available
Not available
354
23,858
37,958
72,821
Not available
29
32.8
50
Total
214,756
289,974
336,419
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Sustainable Pan-Amazon social biodiversity businesses
GRI 103-2, 103-3, 203-1, 304-2
Natura’s relationship with Pan-Amazon
social biodiversity (which includes all
the countries whose territory encompasses
the forest) is completing two decades. In
1999, one year before the launch of the
Ekos product line, we started to develop
ties with the Amazonian communities which
later supplied us with ingredients. In 2011,
to coordinate our activities in the region,
we established the Amazônia Programme.
The programme strategy was updated in
2018. Its three pillars continue to be: (1)
science, technology and innovation; (2)
social biodiversity production chains; and
(3) institutional reinforcement.
Through the Amazônia Programme,
we seek to promote environmental
conservation and regeneration; social
inclusion, diversity and generation of work
and income; placing value on Amazonian
culture, traditional communities and the
indigenous peoples. We reaffirm our belief
in the importance of keeping the forest
standing because, as underscored in a
report published at the beginning of 2018
by Brazil’s climate change watchdog
Instituto Nacional de Ciência e Tecnologia
para Mudanças Climáticas, if deforestation
in the Amazon reaches between 20%
and 25% – something which is close to
happening –, it will be impossible to reverse
the changes in the region’s hydrological
cycle, which will provoke serious
consequences for the climate. Through
the Amazônia Programme, in partnership
with government and non-governmental
organisations and the communities, we
contribute to the conservation of some
257,000 hectares of forest, approximately
equivalent to the joint area occupied by the
cities of São Paulo and Rio de Janeiro.
Internally, Natura maintains two important
ambitions for the Pan-Amazon region,
which are part of the company’s 2050
Sustainability Vision. The first, which
established that the company should
generate R$ 1 billion in business volume in
the region between 2010 and 2020, has
already been exceeded by more than 50%.
At the end of 2018, the cumulative volume
was more than R$ 1.5 billion. The second
ambition, also for 2020, is that 30% of the
inputs consumed by Natura should come
from the Pan-Amazon region. In 2018, the
cumulative relative volume was 17.8%,
slightly below the figure for the previous
year, due to the company’s sales mix. Even
so, during the year we bought an additional
absolute volume of 14% of company
inputs from the Amazon. Excluding palm
oil, absolute acquisitions of Amazonian
biodiversity ingredients increased 21%
compared with 2017. In other words, we
increased the positive impact generated in
the communities, which supplied us with
a higher volume of ingredients compared
with the previous year. We maintain our
commitment to boost the use of these
ingredients in the portfolio proportionally
to the company’s growth.
GRI 203-1 Natura Amazônia Programme
2016
2017
2018
Vision
Commitment
for 2020
% of raw materials
bought by Natura from the
Pan-Amazon region1 (in relation
to sales value)
Sales volume in the Pan-Amazon
region2 (R$ million)
19.1
973
18.1
17.8
30
1,222
1,507
1,000
1. Total purchases of raw material of Pan-Amazon origin as a proportion of total input purchases.
2. Cumulative amount since 2010, such as 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, among others.
45
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sustainability vision / management and organization / brands and products / our network
Science, technology and innovation
With the internal reformulation of the
Natura Amazônia Programme in
2018, we reinforced the understanding that
the region’s social biodiversity continues
to be a major driver of technological
innovation for the company. As
demonstrated not only by the Natura Ekos
product line, but also by the growing use
of vegetable inputs and social biodiversity
ingredients in the company’s other
lines, we have intensified research and
development related to natural ingredients.
During 2018, in Ekos we relaunched the
Ucuuba line enhancing repair and skin firming
for the body benefits. In perfumery, the use of
Amazonian essential oils has grown.
To boost our innovation potential in the region,
we reviewed research and development
strategy by reinforcing the innovation team
working at the Ecoparque in Benevides (Pará)
and the approval of the restructuring of the
unit’s multi-purpose pilot plant.
Our scientific production in the region
is supported by external partnerships,
which include the Federal University of
Amazonas, the research bodies Instituto
Nacional de Pesquisa da Amazônia
and Fundação de Amparo à Pesquisa
do Estado do Amazonas, as well as the
agricultural research agency Embrapa
(Empresa Brasileira de Pesquisa
Agropecuária).
46
Palm AFS: inspired by the forest GRI 304-2
Since 2007, Natura has been dedicated to a project aimed at adopting an
Agroforestry System (AFS) for cultivating palm oil (known as dendê in Brazil), a raw
material employed internationally in diverse products, especially in the cosmetics
and foods industries. This involves using nature itself as inspiration (a concept
known as biomimetics) to substitute palm monoculture – a practice that threatens
forests worldwide – with a combined system that involves planting palm together
with other crops such as cocoa, açaí and andiroba.
In the first phase of the programme, run in partnership with Finep (Financiadora de
Estudos e Projetos), the system was tested on 18 hectares of land by producers
belonging to the CAMTA (Cooperativa Agrícola Mista de Tomé-Açu) cooperative in
Pará. The pilot demonstrated the effectiveness of the model. Not only is palm oil
production volume in the AFS higher than with monoculture, but the system also
generates other socioenvironmental benefits. In terms of the environment, worthy
of note is the creation of a natural barrier against pests in function of the diversity of
vegetable species cultivated and the capture of carbon from the atmosphere. In social
terms, the biodiverse system represents food security for the agricultural producers,
who may also boost their income with the commercialization of additional crops.
In 2019, we ended our partnership with USAID (United States Agency for
International Development), which provided support for the project from 2016 with
an investment of US$ 4.8 million. In 2018, the programme was extended and now
covers 38 hectares. Natura has initiated studies to permit the extraction of palm oil
from the agroforestry system on a commercial scale.
In addition to employing this sustainable palm oil in its portfolio in the near future,
the company expects the project to become a benchmark that may be scaled up
to other parts of the world. It should be noted that all the palm oil currently used in
Natura products has RSPO (Roundtable on Sustainable Palm Oil) certification.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Social biodiversity production chains
GRI 103-2, 103-3, 102-43, 102-44,
203-1, 203-2, 413-1, 413-2
The main objectives of the Amazônia
Programme encompass the generation
of work and income, as well as social
inclusion. To ensure this happens, Natura
is committed to the consolidation of
sustainable production chains in the
region. This commitment is set forth in
one of the company’s 2020 ambitions,
which establishes that Natura should
form relationships with 10,000 families
in the region. In continuous evolution, in
2018 our network was extended to 4,636
families in the region, compared with
4,294 the previous year. A major part of
these families live in the states of Acre,
Amapá, Amazonas, Pará and Rondônia.
The total number of families in the supplier
communities, including other regions in
Brazil, grew from 5,296 to 5,664.
The increase in the number of families is
due especially to the entry of three new
Amazonian supplier communities in our
network. Two of them supply biodiversity
GRI 203-2 Communities and families benefiting1
Communities with which Natura
maintains relations
Families benefiting in the
communities
Families benefiting in the
Pan-Amazon region
2016
2017
2018
33
2,841
2,119
34
5,296
4,294
37
5,664
4,636
Vision
Commitment
for 2020
-
-
10,000
1. The number of partners and families is monitored by the Social Biodiversity Chain Verification System.
ingredients for the Ekos product line.
The third, focused on handicrafts,
produces wallets made from natural straw
fibres that are sold in Natura’s own stores.
We also initiated relations with new families
in communities which are already part
of our network.
Our relationship with the communities is
measured every two years based on the
results of a loyalty survey. The last survey
was undertaken in 2017, indicating a
Loyalty rate of 27%, similar to the 28%
recorded in the 2015 edition. A new survey
will be conducted in 2019. One point
raised in the last survey was the supplier
families’ desire for more information about
Natura. As a result, in all the workshops
and training sessions we conduct with
these stakeholders, we now dedicate
more time to telling them about our history
and to making a connection between the
communities’ activities and the positive
impact they generate for our business.
47
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International seal attests to ethical sourcing
GRI 103-2, 103-3
The Social Biodiversity Chain Verification
System ensures compliance with
Ethical Biotrade criteria (including
traceability of all the ingredients acquired
from the communities) and that the entire
chain is submitted to annual audits. As a
result, in 2018 Natura was awarded UEBT
(Union for Ethical BioTrade) international
certification for its Ekos line products.
The seal attests to the sustainability of
the supply chain for all the line’s natural
ingredients (not only those supplied by the
communities), reinforcing the company’s
commitment to fair trade, the conservation
of biodiversity and social development
as a result of the relationships based on
trust formed with the suppliers. Together
with a European multinational, Natura
was the first company to be granted this
certification in the world.
We are founding members of the
UEBT (2007), and we received support
from the organisation when we designed
the Social Biodiversity Chain Verification
System, with a focus on community
relations and on verifying ingredient
production. The system is used to
verify questions related to labour,
occupational health and safety, the
conservation of biodiversity,
organisational management, best
production practices and traceability
in the communities.
The verifications also guide the
development measures we undertake with
these stakeholders. During the course
of 2018, we conducted training courses
on occupational safety, organisational
development and best production practices
for more than 370 people. In partnership
with Sebrae, we promoted the participation
of community representatives in two
meetings that presented the connection
between Amazonian biodiversity and the
cosmetics world, addressing aspects such
as market trends and the importance of
environmental conservation.
More than 150 families also received
training in environmental regularisation,
which drove an increase in the number
of rural environmental registrations
(CAR in the Portuguese acronym) granted
in the region and reduced the number
of environmental non-conformances
identified in our verification system. This
training was part of a project developed
in partnership with Symrise, a company
installed in the Ecoparque in Benevides,
and the German International Cooperation
48
Agency GIZ. This cooperation enabled an
investment of R$ 10 million in communities
and cooperatives in the north-east of Pará,
the Transamazon region, also in Pará, and
Ponta do Abunã, in Rondônia. In addition
to the training programmes, the measures
scheduled include the development of new
production chains (of vegetable species
as of yet unexploited), the implementation
of technologies for the pre-processing
of ingredients to improve production
quality and support for the communities’
organisational management processes.
By means of these and other initiatives,
we are contributing to the consolidation
of a commercial model that prioritises the
valuation of the wealth in the Pan-Amazon
region, promoting community autonomy.
BioQlicar
recognition
Our supplier development and
recognition programme is also extended
to the supplier communities by means of
the BioQlicar award. The results of the
audits under the Social Biodiversity Chain
Verification System account for 80% of
the score each community may obtain in
the award. The remaining 20%
corresponds to fulfilling the planned
production volume and the delivery
deadline. In 2018, we recognized two
communities: the one achieving the
highest score and the one that made the
most progress in the period. On average,
the communities’ scores increased to
4.05 (on a scale up to 5). In 2017 and
2016, the scores were respectively
3.97 and 3.93, showing a steady
improvement in performance on the
part of the company’s community
partners.
GRI 414-1
SDG Brazil Award
Natura won the 2018 SDG Brazil award in the for-profit organisation category in recognition of its work
on certifying social biodiversity chains. The federal government award is aimed at generating visibility for
practices that contribute towards the achievement of the United Nations Organisation’s 2030 agenda
targets and Sustainable Development Goals.
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sustainability vision / management and organization / brands and products / our network
Payments and benefit sharing
GRI 103-2, 103-3, 203-2
In addition to payment for the acquisition
of production ingredients, Natura
remunerates its supplier communities for
their contributions during the research
and development phase. This is always
done based on the fair and equal sharing
of the benefits accruing from access to
genetic heritage and traditional associated
knowledge. This practice, aligned with
Brazil’s new biodiversity law (13.123/2015)
is aimed at promoting the conservation
and sustainable use of natural resources.
In accordance with Natura’s Policy on the
Sustainable Use of Social Biodiversity
Resources, the company also makes
investments in infrastructure, training
and the purchase of carbon credits,
among other items, which are accounted
for in the total invested annually.
In 2018, we paid out almost R$ 36
million to the supplier communities, a
50% increase over the previous year.
Considering only the amount related to
the acquisition of raw materials acquired
by Natura, we managed to generate an
average annual income of approximately
R$ 3,000 for each supplier family.
Of the total amount transferred in 2018,
the most significant sum associated with
benefit sharing was for the establishment
of the Sustainable Development Fund for
the Comaru cooperative (Cooperativa
Mista dos Produtores e Extrativistas do
Rio Iratapuru), located in the Iratapuru
Sustainable Development Reservation
in Amapá. Incidentally, this was the first
cooperative to supply ingredients for the
Ekos product line. To administer the funds
a managing committee was created,
comprising representatives from Comaru,
Natura, the Amapá state environmental
department and foundations that undertake
research into biotechnology in the region, as
well as consultant members, such as the local
branch of Sebrae (in Laranjal do Jari) and
the state rural development body Instituto de
Desenvolvimento Rural do Amapá. The funds
are invested in local development initiatives
that will benefit nine communities in the region
and will be selected via a call for proposals.
Structured in line with the new biodiversity
law, the agreement stipulates the sharing of
benefits on a non-monetary basis, focusing
instead on research aimed at conserving
biodiversity. Similar agreements have
already been undertaken with the extractivist
reservation Reserva Extrativista Chico Mendes
and communities in the Mid Juruá region.
49
GRI 203-2 Funds allocated by family
(R$ thousands)
2016
2017
2018
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Supply
GRI 203-1 Community investments (R$ thousands)
Supply1
Benefit sharing2
Carbon credits3
Image rights4
Support and infrastructure5
Training6
Technical services7
Studies8
3.1
2.0
2016
5,771
3,070
Not available
36
669
77
255
245
3.2
2.9
2017
9,213
6,075
1,477
5
763
70
337
0
Total allocated to the communities
10,123
17,942
1. Supply: direct funds from the supply and purchase of raw materials from communities.
This indicator is measured based on the shipping invoice issued by the communities.
2. Benefit sharing: direct funds from the sharing of benefits for access to genetic heritage and traditional
knowledge acquired in the communities.
3. Carbon credits: the purchase of carbon credits in supplier communities.
4. Use of image rights: amounts paid by Natura for the use of community members’ images in institutional or
marketing materials.
5. Support and infrastructure: support for local development and infrastructure projects, in particular ones aimed at
driving efficiency and adding value in production chains.
6. Training: management and organisational development programs, technical exchanges, training in good
production and stewardship practices, and occupational health and safety programmes.
7. Technical services: all technical services provided by external consultants or contracted by Natura for the
cooperatives/communities.
8. Studies: elaboration of diagnostics, management plans, stewardship plans, mapping exercises, information
gathering, field research, loyalty/satisfaction surveys. The high investment volume in 2018 refers to the implantation
project for the palm oil agroforestry cultivation system (AFS).
5.2
2.9
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18,711
281
61
775
71
125
5,557
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sustainability vision / management and organization / brands and products / our network
Institutional
reinforcement
GRI 103-2, 103-3, 413-1
In the Amazônia Programme front focused
on institutional reinforcement, we invest in
partnerships to promote the growth of local
institutions and communities with a view to
fostering an economy based on the standing
forest. Currently the Mid Juruá (Amazonas),
Lower Tocantins (Pará) and Transamazon
(Pará) regions are priority territories in which
we promote entrepreneurship, education
and sustainable social biodiversity chains
by means of a collaborative territorial
development management model. The model
involves local governments, communities and
companies and provides for a plan based on
shared initiatives and targets.
Entrepreneurship in the Amazon GRI 413-1
To foster an environment oriented to innovation and entrepreneurship in the
Amazon and extend our social and economic impact in the region, we supported
a number of initiatives in partnership with local organisations during the course of 2018.
Together with the sustainable development body Instituto de Conservação e
Desenvolvimento Sustentável da Amazônia, USAID (United States Agency for
International Development) and other companies, we supported the formation
of the Plataforma Parceiros pela Amazônia (PPA or Partners for the Amazon
Platform), idealised to lead the construction of innovative solutions for the
region’s sustainable development. The network’s main goals are to be a catalyst
for social and environmental investments in the Amazon region by promoting the
relationship among the PPA members themselves and between them and other
partners and communities in the region.
Natura is a member of the PPA Steering Committee in Manaus and in Belém. In
Manaus, the call for proposals from businesses based on social biodiversity products
and services supported by the platform selected four start-ups to be accelerated,
as well as providing training for another ten.
Jointly with the Centro de Empreendedorismo na Amazônia, we launched a second
training programme and a round of businesses in the Amazônia Up Programme.
The focus is on accelerating ideas, prototypes and/or businesses in rural areas
oriented to the forest and biodiversity. Of the 13 places available, five were reserved
for the Rede Jirau de Agroecologia, located in the Lower Tocantins region, a priority
territory for Natura. The people responsible for the projects selected in the Amazônia
Up programme will receive training and funding to leverage their businesses during
the course of 2019.
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Other highlights in 2018 GRI 413-1
>>>> In the Mid Juruá territory in
Amazonas, efforts were centred on
initiatives to promote environmental
conservation and regeneration, to foster
sustainable value chains, such as the
the oilseed and pirarucu stewardship
chains, as well as rural education and
youth and female entrepreneurship.
Additionally, 600 solar lighting kits were
distributed to communities in the region.
The projects reflect part of the investment
made by USAID (United States Agency
for International Development), with a
matching investment from Natura and
Coca-Cola, to the local development body
Fórum de Desenvolvimento Territorial do
Médio Juruá, consisting of government
and non-governmental organisations in
the region. Instituted in 2014, the forum
is focused on strengthening cooperation
and driving the integration of organisations
working in the Mid Juruá region, promoting
quality of life for the peoples and traditional
communities in the region, leveraging
sustainable value chains and conserving
local biodiversity.
>>>> In the Lower Tocantins region, we
fostered the development of the Rede Jirau
de Agroecologia through the Amazônia
Up programme, developed in partnership
with the Centro de Empreendedorismo da
Amazônia (further information on page
50). We also supported the organisation
of the 3rd Jirau Agroecológico, a seminar
coordinated by the Jirau network aimed
at strengthening agro-ecology within the
context of family agricultural production.
The seminar was attended by 450 people
from diverse institutions working in the
Amazon region. Moreover, one of our
supplier communities – the Camtauá
cooperative or Cooperativa Mista
Agroextrativista do Santo Antônio do Tauá
– received more than R$ 250,000 for the
construction of ten high efficiency dryers,
employed in andiroba and murumuru seed
drying processes, and the acquisition of 40
chairs used during the patauá harvesting
season. The result of a partnership with
the Fundação Banco do Brasil, the project
improved production quality and increased
safety for harvest workers, impacting some
400 people. Lastly, we supported the
Pará rural education association,
Associação das Casas Familiares
Rurais do Pará, by regularizing its unit
in Cametá and providing training for
technicians, in particular in the Lower
Tocantins region.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
3Our
The numbers in the coloured squares refer
to the Sustainable Development Goals
(SDGs). See the complete list on page 68.
network
Consumers
12
50%
Formulate a strategy to
mobilise consumers
Natura consultants
Material topic: income generation
1
8
3
5
10
16
100%
Boost the Natura consultants’
average income*
Material topic: education to
develop co-workers
and consultants
4
5
8
10
12
16
100%
Create human development
indicator
for consultants
Educational offering that meets
the consultant’s needs
Material topic: education to
develop co-workers
and consultants
1
8
10
100%
Support consultants’
socioenvironmental entrepreneurism
Co-workers
8
10
5
8
10
Material topic: education to
develop
co-workers and consultants
4
5
8
10
12 16
81%
Reach the mark of 8%
disabled people
in the work force*
75%
Reach the mark of 50% women
occupying leadership positions
(director level and above)
100%
Culture and engagement
for co-workers
*Takes into account Natura Brazil.
Communities
Material topic: valuation
of social biodiversity
8
10
15
16
4
5
8
10
12
16
Suppliers
Material topic: transparency
and product origin
8
12
16
17
100%
Formulate a strategy for the
Pan-Amazon territories and Natura's
surrounding communities*
75%
Evolve in measurement
of community human and
social development
50%
Evolve supplier
management
*Takes into account Natura Brazil.
*Takes into account Natura Brazil.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Positive social impact
We know that the future prosperity of the business is linked with
our capacity to generate a positive impact on the environment
and on everyone who interacts with the company over time: co-
workers, consultants, communities, consumers and, generally,
society as a whole. In 2018, we reaffirmed our commitment to
the agenda proposed in the United Nations Organisation’s (UNO)
Sustainable Development Goals (SDGs), and we approved our new
understanding around positive social impact.
For Natura, positive social impact means promoting social
inclusion and improving quality of life and well-being for our entire
relationship network, fostering education, diversity, work and
income generation. We believe we are capable of generating a
positive social impact by means of our business model and the
pursuit of exponential, innovative and collaborative solutions for
the challenges facing the company’s relationship network. This is
aligned with our overarching goal of contributing to human and
social development and building a more democratic and more
sustainable society.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Work and income for the consultants
With the revitalisation of our
Relationship Selling model, in 2017
we established a new growth plan for the
Natura Beauty Consultants impacting the
professional and financial dimensions,
which is already beginning to produce
results. The relationship strategy is aimed
at boosting the positive effects on the
consultant network and is leveraged by the
Movimento Natura. In 2018, the strategy
for the initiative was revised in order to
enhance the company’s approach to
consultants, aimed at mobilising social
impact businesses.
We continue to offer a set of instruments
aimed at promoting a positive
transformation in the lives of our
consultants and their families. These
additional instruments were idealised
based on the demands of the consultants
themselves, identified by means of the
listening process which gave rise to the
Human Development Index (HDI) that
was developed especially for this group,
called the NC-HDI. The methodology was
developed by Natura in 2014, based on the
United Nations Development Programme
(UNDP) indicator bearing the same name,
however, without taking income into
account. In Brazil, the most recent index,
from 2017, indicated an HDI of 0.593. In the
course of 2018, Natura started to measure
the indicator among the consultants in the
operations in Latin America, while a new
survey will be undertaken in Brazil in 2019.
for Brazil’s Enem national secondary
education examination) and the Khan
Academy (online reinforcement courses in
mathematics).
beneficiaries have access to more than
15,000 pharmacies in every region in Brazil
and products from the main laboratories in
the pharmaceutical sector. In 2018, more
than 43,600 people joined the initiative.
In parallel, we conducted a specific
survey to gain more in-depth insight into
the reality and expectations of Natura
Business Leaders, the results of which are
being processed.
Education programme in expansion
In accordance with the findings of the
HDI, which indicated the priority attributed
by the consultants to their education, we
developed a programme for this area,
financed by the Crer Para Ver product
line and managed by the Instituto Natura.
This programme makes a wide range of
alternatives available to consultants and
family members, including campus or
distance degree, postgraduate, technical-
professional and language courses, among
others. Some of these are free and others
grant discounts to the consultants.
Examples are the 80 degree and
postgraduate courses offered by the
Universidade Estácio and the partnerships
with the language school chains Wizard by
Pearson and English Live and with Geekie
Games (an online preparatory platform
An internal study showed the growth
in productivity of consultants who are
studying or who have a child enrolled in
one of our education programme courses,
demonstrating that investments in this area
strengthen the relationship between Natura
and this group. In 2018, we exceeded the
mark of 100,000 consultants and family
members enrolled in at least one of the
education initiatives.
We also focused efforts on promoting the
consultants’ digital education. This is aimed
at boosting their access to increasingly
important web contents that contribute
to their personal and professional
development.
Health in focus
From 2017, we started taking a closer
look at healthcare for our network. At
the end of that year, we launched a
programme offering healthcare services
for the consultant and one family member.
The programme provides for discounts
of up to 60% in doctors’ consultations,
examinations and medication. The
54
Women’s rights
Guaranteeing women’s rights and
reducing violence was one of the causes
Natura assumed both in Brazil and in the
International Operations in 2018. For the
Natura internal audience we launched
an exclusive channel for reporting and
providing advice on violence. The channel
is also open to the Business Managers,
employees who work directly with the
leaders and consultants. The managers
may also report cases of violence among
consultants and leaders and intermediate
the support offered by the channel. In
Argentina, in one of the 2018 editions of
the magazine Consultoría, which offers
consultants tips on doing business, we
placed an announcement disclosing the
official channels that handle this kind of
report. In Brazil, a similar announcement
was published providing data on the
country’s national hotline
at the beginning of 2019.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Social innovation laboratory
Inspiring examples
GRI 203-1
With support from a specialized consultancy, we designed the Natura social
innovation laboratory, which is dedicated to identifying feasible solutions for
the points mapped by the HDI that still represent challenges to social inclusion,
generation of work and income and improved quality of life and well-being for
the consultants. There will be four areas of activity in this first stage of the
laboratory’s work: financial education, digital education, healthcare and
violence against women. With the participation of two start-ups and applying
agile working methodologies, we are already testing solutions for financial
education. Depending on the results of the pilot project, these solutions will be
made available to the entire consultant network.
The social innovation projects will also be connected to the Natura programme
to drive the formation of intrapreneurs. The programme is an initiative of the
Fundação Dom Cabral and the League of Intrapreneurs, a non-profit organisation
active in Brazil and other countries, dedicated to driving skills oriented
to innovation and entrepreneurship among employees of organisations.
One of the ways we have encountered
of mobilising our consultants around
this movement to generate a positive
impact for society and the planet is
through the Acolher Award which, since
2010, has provided recognition, as well
as technical and financial support for
socioenvironmental projects having broad
transformational power.
At the beginning, the award was focused
on initiatives run by the consultants.
However, since the network is so large,
the award was opened to employees
and consumers.
In 2018, a new element was the inclusion
of projects submitted by members of
the communities surrounding the Natura
operations in Brazil. A total of 16 projects
received awards in this edition: eight in the
Natura Beauty Consultant category, three
in the consumer category and five in the
surrounding community category.
For further information on these projects, see:
http://www.movimentonatura.com.br/cs/movimentonatura/premioacolher
(in portuguese)
Consultants engaged in the Movimento Natura
(units)
2016
2017
2018
Public1
Participations2 3
2,193,662
2,194,838
55,355
56,228
857,644
42,237
1. Calculation of the indicator is based on the number of visitors to the website.
2. In addition to the consultants, other groups, such as consumers, access the platform. Currently, the tool does not
permit identification of the groups in all types of access.
3. Calculation of the participation indicator considers qualified participations: registration of people or initiatives,
sharing of communication contents on social networks and interactions with the people responsible for the
initiatives via the platform.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Developing surrounding communities
GRI 103-2, 103-3, 204-1, 413-1, 413-2
The positive social impact Natura is
committed to generating also involves
the communities surrounding the company’s
main operations. The priority regions are
the municipalities of Cajamar (São Paulo)
and Benevides (Pará), where the company’s
industrial units are installed, and the Vila
Jaguara district in the city of São Paulo
where its administrative headquarters and
the São Paulo distribution centre are located.
In these locations, we make a significant
contribution to the generation of
employment and income, not only through
the direct jobs created by Natura, but also
through indirect employment opportunities
connected in some way to the business.
Worthy of mention is Benevides (PA), where
the Ecoparque was implanted in 2014
and where 80% of Natura’s bar soaps are
manufactured today. In the unit, a significant
part of the work force comprises young
people who are relative newcomers to the
labour market.
We also stimulate the development of
surrounding areas by means of partnerships
with local suppliers. In 2018, from the total
amount paid out to Natura suppliers,
4.3% went to companies in Cajamar and
Benevides. Although the percentage is lower
that the previous year (5.2%), the absolute
amount increased by 14%, from R$ 181 million
in 2017 to R$ 207 million in 2018.
financial support. One of the projects chosen
in Benevides, for example, is focused on
preventing and addressing domestic violence
and has already provided legal, psychological
and social support to more than 500 women.
Furthermore, we are engaged in
partnerships and arrangements with
governments, the communities themselves
and other companies to leverage human
and social development in these regions.
A highlight in 2018 was the opening of
the Acolher Award to socioenvironmental
projects from the communities surrounding
our facilities. Two initiatives from São Paulo,
two from Benevides and one from Cajamar
were selected and will receive technical and
In addition to the Acolher Award, we
contribute towards the consolidation of
transformational movements in the three
locations. In Cajamar, we support the
organisation Inova Cajamar’s Viva Vielas
project, aimed at revitalising urban spaces
and carrying out positive interventions in the
local environment. The project was selected
for the award. In Vila Jaguara, we support a
joint community recuperation effort in the
Parque Vila Edwiges district. In Benevides,
together with the Rede UDBEN, we helped to
set up an exhibition of social projects in the
city. In partnership with the Instituto Natura,
we also engaged in efforts to improve the
municipality’s performance in Brazil’s basic
education development index, Ideb. The
municipal schools in Benevides achieved
a score of 6.2 (for the first years of basic
education). The previous average score in the
2015 survey was 5.4.
GRI 204-1 Total amount spent on
local suppliers by operational unit1 (R$ million)
2016
2017
2018
Cajamar
Benevides
Total
% of budget spent on local suppliers
155
3
158
3.00
169
12
181
5.22
193
14
207
4.26
1. Only the manufacturing units (Cajamar and Benevides) are considered to be operational units. We maintained the
definition of local, considering total purchases from suppliers located in the same municipality as the manufacturing
units (Cajamar and Benevides), supplying to any Natura unit. Since only the manufacturing units are considered to
be operational units, the International Operations are not considered in the calculation.
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sustainability vision / management and organization / brands and products / our network
Sustainable supplier management
GRI 102-43, 102-44, 103-2, 103-3, 102-9
Our relations with our suppliers were
strengthened in 2018. There was
significant growth in our production
volume, which in turn boosted demand for
the products and services we acquire from
our supply chain.
In Brazil particularly, Natura suppliers
also suffered from the consequences of
the truck drivers’ strike in May. In a spirit
of collaboration, our partners sought to
fulfil delivery schedules to Natura, for
example, by adopting alternative means of
transportation.
In the International Operations, suppliers
who manufacture finished products on
behalf of Natura saw a 5% increase in
production volume compared with 2017.
On a consolidated basis, we paid out
R$ 5.9 billion to our business partners
(R$ 4.8 billion to suppliers in Brazil
and R$ 1.1 billion to their overseas
counterparts). The total volume is
15% higher than the 2017 figure.
We have on average 9,900 suppliers.
These are divided between the ones
who supply materials used in product
manufacturing (such as packaging and raw
materials) or who make products on behalf
of Natura, and non-production suppliers,
responsible for services or products
not applied directly in the production
process (the case of maintenance service
providers, freight haulage and logistics
operators). From the total number of
partners, 165 accounted for 62% of our
purchase volume during the year.
Considered strategic for the business,
this group of 165 suppliers participates
in the Qlicar programme, which is aimed
at gradually and consistently improving
their management and processes. The
Qlicar programme is based on analyses
of the pillars Quality, Logistics, Innovation,
Competitiveness, Environmental/Social
practices and Relationship. Based on
the results of the analyses, actions plans
are drafted and put into practice by the
suppliers with support from Natura. Natura
organises the Qlicar award for outstanding
performance on an annual basis. In 2018,
22 companies were recognized. There
are two other Qliqar awards for specific
supplier profiles: BioQlicar, for the supplier
communities, and Qlicar Innovation for
partners dedicated to research and
technology development.
Additionally, the company organises
events for interacting with and engaging
suppliers. A case in point is the strategy
meeting, when Natura shares the company
goals and guidelines for the future with its
strategic partners. Natura also organises
an innovation fair, with the purpose of
fostering innovative projects among
suppliers. In the 2018 edition, a total of 190
suggestions were collected. Natura staff
participate in the fair, helping to assess
and select the best proposals. There are
also panel discussions and dialogues that
address points generating dissatisfaction in
the relationship.
Measured on an annual basis, supplier
satisfaction increased from 89% in 2017
to 90% in 2018. Satisfaction is one of
the factors taken into account in the
loyalty index, which in 2018 corresponded
to 33%, 4% down on 2017. The most
significant reduction occurred in the
International Operations, influenced
most heavily by the result in Argentina,
which reflected the economic and social
fluctuations the country is facing.
Synergy with The Body
Shop and Aesop
In 2018, Natura &Co started to
designs its Global Procurement
Organisation. The product and service
categories in which negotiations and
relations are to be conducted in a unified
manner for the three Natura &Co
companies: Natura, The Body Shop
and Aesop have already been defined.
This generates gains in scale for
the group, taking advantage of the
possibility of negotiating better terms,
given the higher purchase volume.
There are also advantages from a
compliance standpoint– a supplier
contracted by the group will only need
to conform to a single set of rules
and will undergo just one audit. It is esti-
mated that the synergies from
the initiative could generate
savings of some R$ 420 million over
a three-year period.
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sustainability vision / management and organization / brands and products / our network
GRI 102-9 Information about suppliers
2016
2017
2018
Estimated monetary value of payments to suppliers
(R$ billion)
Annual renewal rate1 (%)
4.2
20
5.1
11
5.9
13
Socioenvironmental criteria
for contracting suppliers
GRI 103-2, 103-3, 308-1 e 414-1
1. Calculated based on the percentage of new suppliers registered in the year in relation to the total number of
suppliers registered.
Supplier loyalty (%)
Satisfaction1 by supplier
Supplier loyalty2 - Brazil
Supplier loyalty2 - International
Operations
Natura supplier loyalty2 - Brazil and
International Operations
2016
2017
2018
82
21
41
27
89
30
45
37
90
28
38
33
1. Satisfaction: percentage of suppliers who are “completely satisfied” or “very satisfied”, who gave a score of 4 or
5 (“Top2Box”) on a scale from 1 to 5 points in relation to their overall satisfaction with Natura. Since 2017, we have
reported information for Brazil and the International Operations.
2. Loyalty: percentage of suppliers consulted who gave the top score (“Top1Box”), on a scale from 1 to 5 points,
in three aspects: overall satisfaction with Natura, intention to continue supplying Natura and recommendation of
Natura as a client.
To become a Natura supplier, it is
necessary to share our ethical
commitments, including formal adhesion to
our Code of Conduct, as well as attesting to
the would-be supplier’s financial health and
the conformance of its registration data.
Every year, part of Natura’s new suppliers
– due to the nature of their activity or the
risk they represent – are submitted to audit
processes that verify environmental, labour
and human rights criteria and potential
impacts on society and the environment. In
2018, 13 (1%) of the company’s 1,306 new
suppliers were eligible and were submitted
to assessment. Under environmental
criteria, for example, documents such
as environmental operating licenses and
water withdrawal permits are considered
in the assessment, as well as how the
future partner manages water and energy
consumption and the generation of waste,
effluents and emissions.
This supplier approval process, which
includes the execution of audits,
assessment of the company’s financial
health and adhesion to the Code of Conduct
is also conducted periodically with suppliers
considered strategic for the business.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Diversity and inclusion
GRI 103-2, 103-3, 405-1
In the course of 2018, we saw important
progress in the work we have been doing
for some years to foster diversity, inclusion
and a multicultural environment in the
Natura work force and in society as a
whole. Since 2016, we have had the Natura
Diversity Policy that supports our diversity
initiatives, which are focused on women,
the disabled, LGBTI+ and black people.
We continue to advance in our commitment
to reach 50% women occupying
leadership positions (director level and
above) by 2020 in all the Natura operations
in Latin America. We ended the year
with 38.2% of women occupying these
positions, compared with 32.7% in 2017.
It should be mentioned that in all selection
processes – regardless of the hierarchical
level – Natura ensures that 50% of the
finalists are women. In 2018, we also had
the highest ever percentage of disabled
employees – our 2020 ambition is to have
8% disabled employees in Brazil. At the
end of the year, the rate was 6.5%,
half of whom were disabled women.
We focus on attracting disabled
candidates, reinforcing our employer
brand communication aimed at this group.
In addition to these ambitions, we
maintained four priority work fronts:
gender equality, inclusion of disabled
people, ethnic-racial equality and LGBTI+
rights. Affinity groups were formed with
the participation of employees who wish
to contribute actively in these areas. We
also organised the first Diversity Week,
with a series of campaigns and one day
dedicated to each front.
Regarding gender equality, we also
started to focus on the problem of
violence against women. After performing
a diagnosis with the Movimento Natura
and UN Women, in Brazil we launched
a toll-free 0800 channel for female
employees who are the victims of
violence. The channel provides support
from lawyers, psychologists and social
assistants and dispenses advice on
how to report cases of violence, how
to find shelters and to obtain other
protective measures. In the International
Operations, Natura Argentina broke
new ground in this area. In the country,
employees who suffer from violence may
contact a partnering organisation and,
in addition to receiving the necessary
guidance, are able to request temporary
leave from work and credit to cover extra
expenses. This process has already been
established in the other countries in Latin
America, with the exception of Colombia,
which should launch the protocol in 2019.
Now Natura Brazil is studying how to
extend this initiative to the consultants. In
the operations in Latin America, awareness
measures have been implemented,
an example being the dissemination
of the official channels for reporting
violence against women in the magazine
Consultoría. Natura also continuously
encourages discussion about family
ties, the role of men in the family and the
division of household chores. A practical
novelty in this sense was the opening
of two Natura nurseries in Brazil for the
children of male employees. Initially, these
offered 35 places. Paternity leave of 40
days is guaranteed in all the countries in
which we operate.
GRI 401-3
Before disabled employees start work, they
have a consultation with an ergonomics
specialist to map any necessary
adjustments to their work stations.
For persons with hearing impairments,
colleagues trained in Libras (Brazilian
sign language) provide assistance with
routine communications. During feedback
processes with management and medical
consultations in the company health
centres, sign language interpreters
are available to provide support via
videoconferencing. In the São Paulo
Distribution Centre, picking by light
technology enables disabled workers,
including the intellectually impaired, to
work in the order picking process. In
2018, a wheelchair user joined the São
Paulo Distribution Centre team. Previously
people in wheel chairs could only work in
the administrative area; however, now the
centre has been fully adapted, and 16%
of the work force comprises people with a
physical or cognitive disability. The target
is to reach 30% by 2020. During the year,
we also contracted the first professionals
with intellectual impairment to work in
the Natura stores in São Paulo and Rio
de Janeiro. At the beginning of 2019, a
disabled person assumed a director level
role in the company.
59
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
To promote ethnic-racial equality, our efforts
are centred on the intern programme,
the gateway to working at Natura. In the
CorageN programme, which selects people
with an entrepreneurial profile to help drive
the company’s innovation culture (further
information on page 27), 50% of the
selected candidates are black.
On the LGBTI+ front, progress was made in
terms of awareness. Use of an individual’s
chosen name is permitted, and since 2017
the nursery may be used by the small
children of employees who take maternity
leave, regardless of their gender identity and
sexual orientation. Externally, a partnership
with the non-governmental organisation
Casa 1 offered a vocational course for
transsexuals, for which the company
donated Natura Faces brand kits.
One external result of our efforts is that we
were ranked among the most diverse and
inclusive companies in the world on a global
index elaborated by the company Thomson
Reuters. We were placed in eighth position
in the 2018 ranking, compared with 11th
place in 2017 and 18th in 2016, proof of our
continuous evolution in diversity.
GRI 405-1
Co-workers by
functional category
and gender (%)
Production
Administrative
Management
Director level
Total
Disabled
co-workers1,
by functional
category and
gender (%)
Production
Administrative
Management
Director level
Total
2016
women
39.7
79.3
55.0
29.6
63.5
men
60.3
20.7
45.0
70.4
36.5
2017
women
37.6
78.5
56.7
32.7
62.8
men
62.4
21.5
43.3
67.3
37.2
2018
women
34.6
78.0
56.2
38.2
62.1
2050 Vision
Commitment
50
men
65.4
21.9
43.8
61.8
37.9
2016
2017
2018
men
women
total
men
women
total
men
women
total
2050 Vision
Commitment
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
1. Data monitored only in the operations in Brazil.
Black co-workers by functional
category and gender (%)
Production
Administrative
Management
Director level
Total
men
women
13.0
2.9
0.4
0.0
7.7
6.0
0.1
0.0
16.3
13.8
30.1
60
2.2
0.7
0.0
0.0
2.9
2016
total
20.7
8.9
0.5
0.0
1.5
1.5
0.0
0.0
3.1
3.8
2.2
0.0
0.0
6.0
men
women
13.6
3.1
0.3
0.0
17.1
7.3
6.3
0.2
0.0
2.5
0.8
0.0
0.0
3.4
2017
total
20.9
9.5
0.5
0.0
13.8
30.9
1.4
1.7
0.0
0.0
3.1
4
2
0.0
0.0
6.5
8
2018
men
women
total
13.5
3.7
0.3
0.0
17.6
6.6
7.4
0.2
0.0
14.2
20
11
1.0
0.0
31.8
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Instituto Natura: a drive for education
GRI 103-2, 103-3, 203-1
In its almost 10 years of existence, the
Instituto Natura has been maturing its
systemic vision, learning and evolving the
competency to work with public policies
capable of generating the structural
changes necessary for the leap in quality
that Brazilian public education requires.
movement developed a set of measures
that included the regulation of the
national education system, alterations in
financing mechanisms, valuing the career
of teaching, redesign of national literacy
policy and the reorganisation of secondary
education.
We were also heavily involved in the
Escola em Tempo Integral (ETI or
full-time schooling) agenda for secondary
education, now consolidated in a
The Instituto Natura is a civil society
public interest organisation (Oscip in the
Portuguese acronym) which in Brazil
is engaged in managing Crer Para Ver
funds and providing support for Natura
in investing the funds raised by the
operations in Latin America, which are
managed independently in each country.
In addition to measures benefiting public
education, the organisation also offers
the Natura Beauty Consultants a set of
learning experiences and possibilities
of engagement in the field of education
(further information on page 54).
In 2018, we were part of a network of
organisations and specialists that
co-built a national education agenda to
mobilise the then-candidates in the 2018
elections in the cause of education. Led by
Todos pela Educação, the Educação Já!
Crer Para Ver (Believing is Seeing)
In existence for almost 25 years, the Crer Para Ver programme is based on a special
line of non-cosmetic products commercialized by the consultants and by Natura,
in which all the profit is invested in the cause of education. The programme is in place
in Brazil and in the other countries in Latin America in which the company operates,
and all the proceeds are invested locally.
In 2018, we reached a new record in revenues: R$ 44.2 million, exceeding
the target of R$ 41 million established for 2020. We also progressed in engaging
consultants in selling the line, reaching a penetration of 30.5% in Brazil and 18.8%
in the Latin American operations (average percentage of consultants who bought
at least one Crer Para Ver product in each sales cycle).
61
number of states. Similarly, we furthered
understanding about the potential
of collaboration between states and
municipalities to address the common
challenge of literacy.
All the work is inspired by evidence
and based on the concrete results
generated by the Instituto Natura Knowledge
Production and Assessment area. Further
information about its activities at:
http://www.institutonatura.org.br/
inrelatorio2018/en/
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
GRI 203-1 Investments benefiting public education (R$ thousands)
Brazil
Crer para Ver Programme Revenue1 (R$ million)
Crer para Ver Penetration2 (% cycle)
Operations in Latin America
Crer para Ver Programme Revenue1
(R$ thousands)
Crer para Ver Penetration2 (% cycle)
2016
23.7
22.6
2016
14,537
19.4
2017
22.8
28.5
2017
12,781
17.7
2018
29.1
30.5
2018
15,122
18.8
1. Refers to earnings before tax on the Crer Para Ver product line.
2. Average indicator of percentage of Natura Beauty Consultants who bought any Crer Para Ver product from the
total number of Natura consultants active during the 19 cycles.
GRI 203-1 Crer Para Ver Programme
Actions - Brazil
Investment in projects developed and supported
by Crer para Ver1 (R$ million)
Municipalities impacted
Schools impacted
Teachers impacted
Students involved
Municipal education departments impacted
Instituto Natura partnerships with state education
departments
Natura Beauty Consultants impacted by education
benefits
2016
2017
2018
23.313
24.097
25.043
828
910
1,601
1,053
2,015
1,299
9,183
34,633
33,598
476,507
1,174,238
1,191,902
828
22
1,601
25
2,015
22
24,000
62,000
80,657
1. The amounts for the projects developed and supported by Crer para Ver may be altered as a result of the audit of
the Instituto Natura’s annual financial statements.
62
GRI 203-1 Crer Para Programme
Actions - Operations in Latin America
Investment in projects developed and supported
by Crer para Ver (R$ million)
2016
2017
2018
8.112
10.431
13.273
Schools impacted
475
2,433
5,744
Teachers, coordinators and headmasters impacted
6,057
10,459
24,125
Students involved
89,021
173,074
407,824
Municipal, state and national governments partnering
with the project
12
28
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More schools assisted in Latin America
GRI 413-1
As Crer Para Ver revenue has grown,
we have increased investments in
educational initiatives in Latin America.
In these countries we work via the
Learning Community (Comunidade de
Aprendizagem) at school, aimed at driving
social transformation through school
administrators, teachers, students, families
and the community. This work is monitored
by the Instituto Natura, which provides
support and know-how, but investments
are made independently in each country,
taking into account local characteristics.
In Argentina, more than 5,000 schools
incorporate learning community practices
into their programmes, more than
450,000 books were distributed and
3,000 professionals were trained in the
methodology. In Colombia, one of the
benchmark schools gained nationwide
recognition for its innovative practices.
By October, 3,268 users had concluded
distance learning courses in Mexico,
compared with 133 people in 2017. In
Peru, we systematized four success cases
and organised the first National Forum
in the country. In the Full-Time School
programme, material was distributed to
713 schools, while representatives of 117
schools received classroom training.
One Instituto Natura and Natura priority for
2019 is to determine how to further expand
this support as Crer Para Ver funds and
consultant engagement in these countries
increase.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Culture for sustainability
In 2018, Natura focused on reconnecting
its co-workers with the company’s
sustainability proposals and mobilising
them around causes already adopted
with other stakeholder groups, such as
consumers and consultants. This included
the organisation of the first edition of
Sustainability Week, held simultaneously
in Brazil and in the Latin American
operations, with diverse activities.
In Brazil, the event provided a stage for the
launch of the Meatless Monday movement,
which abolished red meat from company
canteens and snack bars on Mondays. The
initiative is part of the reflection Natura
seeks to trigger among co-workers about
the preservation of the Amazon region,
impacted by the spread of soy bean
plantations and cattle breeding. Another
movement initiated in Sustainability week
was the elimination of the use of plastic
cups. Natura estimated that it was using
13 million cups per year in all the company
units in the country. With the ban on use,
to be completed in 2019, it is estimated
that there will be a 25-tonne reduction in
waste generated, driving annual savings
of R$ 300,000. In Latin America, the
waste question inspired training sessions
on selective rubbish collection, visits
to recycling cooperatives and working
sessions with urban recycling operators.
We also launched a campaign to stimulate
car sharing among co-workers, reducing
impacts caused by fossil fuels. In Cajamar,
the Natura headquarters in São Paulo,
Ecoparque and the Itupeva Hub, exclusive
spaces were reserved in the parking lots
for drivers participating in the initiative.
In São Paulo, the company provides co-
workers with a bicycle rack and changing
rooms. During the year, the car fleet for
executives was modified, introducing more
economical flexible fuel models.
Lastly, for each co-worker who bought
R$ 20 worth of Crer Para Ver line products,
the company donated a study grant for the
language school English Live to a Natura
consultant or her child. We managed to
exceed the internal target established,
distributing a total of 574 grants.
63
The world is more beautiful with you
We also continue to engage consumers of our brands in the questions we believe
in and advocate. With the Chronos and Tododia brands, we seek to mobilise
consumers around respect for and valuing women’s beauty regardless of age
and body measurements. The launch of Tododia Lima e Flor de Laranjeira led
to the creation of the film Ser o Que Se É (Be What You Are), inspired by the
open letter that the Spanish writer Jessica Gómez wrote to the unknown
“dear girl in the green bathing suit” and which went viral on the internet.
The writer’s message underscores the importance of loving one’s body the way
it is and contesting aesthetic values imposed by society. On international
Anti-LGBTphobia Day, May 17, we launched a Faces action on Natura’s Instagram
page that showed official data on the violence suffered by LGBT+ individuals in
Brazil. The manifesto ends with the message “+ respect is necessary”.
At the beginning of 2019, we announced a new company positioning based
on a simple question: “What can a beauty brand do for the world?”.
The purpose is to attract more and more consumers as allies to Natura’s goal
of generating a positive impact, with everyone taking care of themselves,
but also caring for others and for the surrounding environment. The positioning
is synthesized in the phrase “The world is more beautiful with you” and expresses
our commitment to more sustainable production methods, to the preservation
of the Amazon, to sharing wealth and to generating less waste, among other
things. In the social networks, the new positioning was disseminated with the
hashtag #PorUmMundoMaisBonito (#ForAMoreBeautifulWorld).
This is the positioning Natura will present in the 2019
Rock in Rio festival, to be held in Rio de Janeiro in September.and October.
This is the first time we are sponsoring the event, and we expect to engage
the public in our sustainability and innovation causes and initiatives.
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Natura Musical: reinventing and evolving
In 2018, the Natura Musical programme
celebrated 14 years of existence. During
this period, the programme has directly
impacted more than 260,000 people.
Grande do Sul, agitates the local cultural
scene with shows, parties and musical
residencies during the course of the year,
giving voice to the LGBTQ+ community.
We select projects by means of public calls
for proposals. In the 2018 programme,
there were 2,617 submissions, around
60% more than in 2017. Based on an
evaluation by curators from the music
market, 50 projects were selected
comprising artists and bands in the career
development or renovation phase. They
include names such as Margareth Menezes
(Bahia), Lia de Itamaracá (Pernambuco)
and Tássia Reis (São Paulo), as well as
culture collectives engaged in fostering and
developing regional artistic scenes. This
was the first time that the call for proposals
was opened to this kind of project. An
example was the Rock de Mulher Circuito
(Women’s Rock Circuit), in Rio Grande
do Norte, which organises cultural events
to boost the participation of women in
the music market and, with support from
Natura Musical, will organise training
actions, as well as shows starring women.
In parallel, the Bloco da Laje project in Rio
The funding is provided by private
company investment and Rouanet law tax
incentives on a national level, and state
ICMS tax incentives in the states of São
Paulo, Minas Gerais, Rio Grande do Sul,
Pará and Bahia.
Another new feature was the organisation
of the Natura Musical festivals on a national
level, with the sponsorship of 11 events,
reaching a total audience of around 100,000
people in every region in the country. For
the second year in a row, we maintained the
Casa Natura Musical, organising more than
100 shows in the city of São Paulo.
A total of RS 10.9 million was invested in
Natura Musical in 2018, of which more than
R$ 7 million was funded privately by the
company. The programme is also active
in the digital environment, producing and
disseminating Brazilian music via the social
networks, engaging around 1 million people.
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Organizational transformation
GRI 102-43, 102,44
Natura has continued to promote its
cultural transformation process, which
reflects the company’s business strategy,
aimed at promoting effective networking,
driving greater collaboration, agility and
integration between countries within a less
hierarchical structure.
Over the last two years, Natura has been
mobilised around the revitalisation of direct
selling, the creation of the Natura &Co
group and driving significant results in the
markets in which it operates. In parallel, it
has sought to instil four priority behaviours
which served as the basis for the launch
of Nossa Gente, the Natura people
management model created in 2017.
Based on the elements that the company
wants to reinforce in work force conduct,
these behaviours – two focused on
relations and two on results – were
broadly disseminated. The first positions
the consultant at the centre of all our
decisions, while the second establishes
that company employees work in a
transparent manner, resolving conflicts
constructively and collaboratively. The
other two, focused on results, promote
the celebration of accomplishments and,
lastly, the importance of each individual in
achieving the company’s results.
In 2019, the transformation process will
be accelerated, engaging co-workers
in new behaviours that complement the
first four. This is the case of encouraging
entrepreneurship to create an environment
in which people work proactively. The new
behaviours reflect the future designed
for Natura, which is preparing to become
a digital, multichannel company that
operates globally.
Other working models are also gaining
space in company routines, such as the
use of agile cell methodology, tested
in different Natura areas. Comprising
multifunctional teams, working groups act
together to streamline project development.
The CorageN programme is another
recent experience that has produced
excellent results, with the selection of new
people with an entrepreneurial profile,
without limitations of age or educational
requirements. These individuals work in
groups that map and implement new ideas
(further information on 27).
64
2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
The co-worker feedback process has been
based on this new vision since 2017. It is
called Networked Feedback, which permits
co-workers to share perceptions about their
colleagues’ work and deliveries based on
the four priority behaviours (this can also be
done via the Co-worker app, a smartphone
application developed internally). The
process is integrated with performance
appraisal and the People Forum, the
occasion upon which managers together
with the Human Resources team analyse the
performance of people from different teams
to establish development paths, recognition
measures, training needs and individual
acceleration initiatives. Today, the exchange
of feedback between co-workers and their
managers can occur a number of times
during the year and is based on the principle
that the co-workers are responsible for
taking the lead in this process.
A recently approved change, which came
into force in 2019, is related to a review of
the salary structure. Previously distributed
over more than 20 levels, it was reduced to
ten broader levels, in line with the new less
hierarchical organisational structure.
Selection app
An example of the changes taking place in the organisation is the evolution of the
candidate experience in the company’s entry programmes. In the process of selecting
apprentices and staff for operational vacancies, those interested access a specific
application in which, by means of gaming features, they answer a series of
questions – the candidates whose characteristics are aligned with the Natura
essence go forward to the following recruitment stages. All participants
receive a formal response from the platform, including an analysis of the composition
they wrote as part of the selection process. The candidates selected to go forward
to an interview stage have the chance to take online professional and personal
development courses.
Training programmes
GRI 103-2, 103-3, 404-1, 404-2
From 2019, training programmes should
become less hierarchical and should
promote a more proactive approach on
the part of co-workers. This more open
proposal, with learning experiences
less related to the position occupied by
individuals and more aligned with the
role they are performing at the time, was
employed in the Mosaico programme in
2018. It has now been extended to all
leaders (managers and directors) and
has been divided into two major areas:
Leadership and Culture and Results and
Performance. In the former, the Mosaico
programme focused on managers’ self-
knowledge and people management skills,
including how to lead teams currently
employing agile working models. In Results
and Performance, we once again focused
on knowledge of company products
and launched innovation talks, aimed
at connecting leaders with the rapid
transformations taking place in Natura and
in the external environment.
In 2018, the training programme for
potential Natura leaders, Passport to the
Future, was open to people from both the
operational and administrative areas, as
well as to Business Managers, who work
with the consultant network. The company
continues to offer financial support for the
formal education of co-workers and their
family members (spouses, children and
wards aged up to 21 years). For Natura,
stimulating academic studies, the mastery
of other languages and professional
development helps accelerate co-workers’
careers. In 2018, the company granted one
hundred new study grants, reaching a total
of 238 beneficiaries.
In the International Operations, great
emphasis is placed on educational
initiatives, both in-company and in
partnership with universities. In Argentina,
for example, young innovators in the
company received more than 100 hours
training in agile work methodologies
(further information on page 82 in
“Complementary Indicators”).
65
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2018 ANNUAL REPORT
sustainability vision / management and organization / brands and products / our network
Investments in education per operation
(R$ thousands)
Brazil
Argentina
Colombia
Chile
Mexico
Peru
France
Total
GRI 404-1
Average hours of
employee training by
functional category
Director level
Management
Administrative
Operational
Apprentice
Intern
2016
7,400
2,925
1,326
404
534
417
175
2017
8,300
2,556
1,075
802
598
397
0
2018
7,938
1,677
1,373
421
338
303
0
13,181
13,728
12,051
Natura Education Programme - Co-workers in the
Brazilian Operation
2016
2017
2018
Grants conceded
Grants conceded/enrolments (%)
Amount invested in the Natura Education programme
(R$ thousands)
132
0
535
210
78
690
238
49
897.5
Women
Men
Average no. of hours
Women
Men
Average no. of hours
Women
Men
Average no. of hours
2016
2017
2018
6.6
23.4
27.6
37.6
40.6
45.8
6.2
20.9
18.6
30.0
43.4
43.2
29.3
36.0
30.2
12.9
17.7
42.8
22.2
35.9
34.4
20
19.1
47.7
24.6
36.0
31.1
17.3
18.1
45.1
29
48
44
25
41
47
32
45
44
37
43
49
31
46
39
32
41
48
5.4
18.7
15.5
16.9
44.6
42.2
66
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2018 ANNUAL REPORT
Overview of the 2050
Sustainability Vision
67
2018 ANNUAL REPORT
overview of the 2050 sustainability vision
Management and Organization
Correlation
2018 Results
Topic
Commitment for 2020
Material topic:
SDG
Comments
Index
status
Management
Model
To implement the valuation of socioenvironmental externalities, taking into
account the positive and negative impacts of the extended value chain (from
the extraction of raw materials to the disposal of products) for the Natura
brand.
Transparency and
product origin
6 12 13
15
EP&L (Environmental Profit and Loss) was implemented in 2017 and, in 2018 we initiated
adoption of SP&L (Social Profit and Loss). Valuation of the socioenvironmental impact of
the carbon offsetting programme demonstrated a positive balance of R$ 1.6 billion.
Governance for
Sustainability
Implant a consulting council comprising external specialists, that will assess
the company’s progress and help us to develop our strategy.
Government and
Society
We stimulate public discussion and debate around our material topics based
on the review of our materiality matrix elaborated in 2014.
Stakeholder
engagement
Institutionalise a governance model with external engagement to evolve
sustainability management and strategy.
-
-
-
12 16
15 17
12 16
Ethics and
Transparency
For the Natura brand, to implant full transparency in the provision of
information about products and progress towards the Sustainability Vision.
Transparency and
product origin
12
Created in 2018, the Group Operations Committee (GOC)
acts as a forum for discussing and making recommendations about the administrative
and operational frameworks of Natura and the two other Natura &Co companies.
In recent years, we have evolved in the analysis of socioenvironmental trends, which has
guided the company’s engagement strategy and repositioning of the brand. The result
of this work is the launch of the #porummundomaisbonito (#foramorebeautifulworld)
movement.
The materiality matrix is scheduled to be reviewed in 2019.
Created in 2018, the Group Operations Committee (GOC)
acts as a forum for for discussing and making recommendations
about the administrative and operational frameworks of Natura and the two other
Natura &Co companies.
The Annual Report is based on the Sustainability Vision, presenting the status of all
company commitments. Cruelty Free and UEBT certification demonstrates the evolution
in transparency regarding our products and processes.
75%
75%
75%
75%
75%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
well on target or already achieved
on target
below target
68
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2018 ANNUAL REPORT
overview of the 2050 sustainability vision
Brands and Products
Topic
Commitment for 2020
Material topic:
SDG
Comments
Index
status
Correlation
2018 Results
Brands and
Products
The environmental and social footprints of all Natura brand products will be
disclosed, as will all the respective improvement commitments.
Transparency and
product origin
12
Climate
Change
For the Natura brand, reduce relative GHG emissions (Scopes 1, 2 and 3) by
33%, against base year 2012.
Climate change
Climate change
Continue to offset all emissions that cannot be avoided, primarily in the
Pan-Amazon region.
Climate change
Valuation of
social biodiversity
3 7 9
11 12 13
14
15
13 15 17
The environmental table is presented on product packaging. Since 2017, we have
provided the product footprint for purchases made via the internet. The product
transparency strategy is being reviewed/implemented.
We ended 2018 with a 2% reduction against the base year (2012). Measures prioritized
efficiency in processes and the product portfolio. The challenge to reduce our emissions
significantly by 2020 continues.
We have offset 100% of our emissions since 2007. Additionally we have a partnership
with Itaú Unibanco and Instituto Ekos Brasil whereby we have created the first offsetting
project that remunerates supplier communities for environmental conservation and for
combating deforestation. We have calculated the programme’s socioenvironmental
impact over 10 years: R$ 1.6 billion equivalent in socioenvironmental services in the 38
projects supported, 3.4 million tonnes of CO2 offset, more than 7,000 hectares of
forestland reclaimed or maintained and more than 15, 000 families impacted directly.
Energy
Implement a strategy to diversify sources of renewable energy for the Natura
operations in Brazil.
Climate change
7 13
The energy matrix of the operations in Brazil comprises more than 95%
power from renewable sources. The diversification strategy is being
planned and will be ready by 2020.
50%
6%
100%
50%
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69
2018 ANNUAL REPORT
overview of the 2050 sustainability vision
Brands and Products
Commitment for 2020
Material topic:
SDG
Comments
Index
status
Correlation
2018 Results
Topic
Water
Implement a strategy to reduce and neutralize impact, based on measurement
of the water footprint in the value chain.
Water
Packaging
design
Ensure that 40% of the units billed by Natura in Brazil have eco-efficient
packaging*.
Waste
Climate change
Use at least 10% PCR** in the total mass of Natura packaging in Brazil.
Use at least 74% recyclable material in the total mass of Natura packaging in
Brazil.
Waste
Collect and recycle 50% of the volume of waste generated by Natura product
packaging in Brazil (in t equivalent).
Waste
Social
biodiversity
To reach 10,000 families in the Pan-Amazon production chains.
Valuing social
biodiversity
Achieve a business volume of R$ 1 billion in the Pan-Amazon region
Formula Design
Guarantee that 30% in value of the total inputs consumed by Natura in Brazil
comes from the Pan-Amazon region.
Valuing social
biodiversity
Traceability
Guarantee the traceability of 100% of the inputs produced by the direct
manufacturers (last link) by 2015. Implement a traceability programme for the
remaining links in the Natura brand value chain by 2020.
Transparency and
product origin
6 14
We finalized the water footprint study and incorporated ecotoxicity assessment
into product safety assessments. We have not yet begun to build the water footprint
reduction and neutralisation strategy.
3 11 12
We reached 22%, the result of the sale of refills, packaging of renewable origin
in the Plant and Tododia product lines and post-consumer recycled packaging
for Ekos and Sève.
In 2018, we increased the use of post-consumer recycled glass for the entire
perfumery category by 30%, reaching an overall rate of 5.4%. We have post-consumer
recycled glass in all our perfumery, while the Ekos body and Sève lines use 100% PCR.
The rate reached 50%. The challenge we face is in the ecodesign or redesign of prod-
ucts and packs to increase recyclability, particularly in product categories that do not yet
have a chain in place in Brazil.
Our rate is at 32.8%, as a result of two programs: Dê a Mão para o Futuro (Abihpec sector
reverse logistics initiative) and Elos (a shared responsibility initiative between Natura and
its packaging suppliers aimed at ensuring endorsement, traceability and reverse logistics
in the post-consumer recycled material supply chains incorporated into our packaging).
The total is 4,636 families, the increase being due to the supply of the ingredients
Patauá and Tucumã. Our challenge in achieving the 2020 commitment will depend on
the strategy to expand use of Pan-Amazon vegetable ingredients proportionally to the
company’s growth.
Business volume has already reached R$ 1.5 billion. Amazonian ingredients and funds
allocated to the communities represent respectively 58% and 9% of investments. Worthy
of note in 2018 were the allocation of proceeds from benefit sharing to the Iratapuru
Fund and the environmental conservation and regeneration initiatives in sustainable
supply chains.
The rate was 17.8%, with an increase in the use of these ingredients being developed in
the main categories and product lines.
In 2018, we were awarded international UEBT (Union for Ethical BioTrade) certification,
which attests to the ethical supply system for the natural ingredients used in the Ekos
product line, guaranteeing traceability in the social biodiversity link. Traceability will be
developed for the other critical chains in the coming years.
3 9 11
12 13 14
15
1
2 10
12 15 17
3 6 9
12 14 15
8 12 16
17
70
0%
55%
54%
68%
65%
46%
141%
59%
50%
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2018 ANNUAL REPORT
overview of the 2050 sustainability vision
Our Network
Topic
Commitment for 2020
Material topic:
SDG
Comments
Index
status
Correlation
2018 Results
Natura
consultants
Significantly increase the real average income of Natura Beauty Consultants
in Brazil.
Income generation
Create an indicator to assess the human development of this stakeholder
group and develop a strategy to promote a significant improvement.
-
Stimulate their interest in ongoing learning and provide a broad educational
offering that meets their needs.
Expand the collaboration network, supporting consultants’
socioenvironmental entrepreneurial actions.
Education for the
development of co-
workers and consultants
Education for the
development of co-
workers and consultants
Co-workers
For the Natura brand in Brazil, to have 8% disabled employees in the
workforce.
-
For the Natura brand, reach the rate of 50% women occupying leadership
positions (director level and above).
Implement a strategy to leverage employees’ execution potential through
engagement in the Natura culture.
Education for the
development of
co-workers and
consultants
Suppliers
Evolve the supplier selection and management process, further integrating
socioenvironmental and financial parameters.
Transparency and
product origin
The growth plan for consultants launched in 2017 has already impacted remuneration,
which grew by 12% for consultants and 25% for leaders. Our challenge is to define the
role Natura should play in boosting consultants’ income by 2020.
We have been tracking the NC-HDI (Human Development Index)
for five years. This assesses the impact Natura has on the consultants’ quality of life and
shapes initiatives such as healthcare and education benefits. We face the challenge of
developing Natura’s strategy to impact the network based on the results of this indicator.
The education programme for consultants based on the NC-HDI drivers was implement-
ed and is in progress. In 2018, 80,600 consultants and family members benefited from it.
The Movimento Natura recognises and promotes great ideas for transformation and the
Acolher Award recognises people leading social impact projects, providing them with
technical and financial support. In 2018, in addition to the consultants and consumers,
we enabled the participation of initiatives developed in surrounding communities. 16
projects received financial support of up to R$ 30,000, in addition to technical support to
expand their reach.
We reached the mark of 6.5%, of whom almost half are women. The alignment of internal
processes and monitoring of the development and inclusion of these people in Natura is
fundamental for ensuring retention. External agendas and leadership engagement in this
area are boosting results.
We achieved a rate of 38.2% in this ambition, which is a focus of the company’s diversity
and inclusion strategy. The main actions were an institutional relations plan, internal
engagement with an employee affinity group focused on Lançamos, an exclusive
support channel for female employees who are victims of violence.
In 2018, we took another step towards the organizational transformation that we want.
We started to reflect on the priority behaviours needed to address our long-term
challenges. We set up a Culture Team with leaders from diverse Natura areas and
geographies to lead this front and present their ideas to the Executive Committee and
other organisational leaders.
The supplier selection and management process is being reviewed.
100%
100%
100%
100%
81%
75%
100%
50%
1
3 5
8 10 16
4 5 8
10 12 16
4 5 8
10 12 16
1
8 10
8 10
5 8 10
4 5 8
10 12 16
8 12 16
17
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overview of the 2050 sustainability vision
Our Network
Topic
Commitment for 2020
Material topic:
SDG
Comments
Index
status
Correlation
2018 Results
Communities
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
populations and actors.
Valuing social
biodiversity
8 10 16
15
Communities
Evolve the indicators for measuring human and social development in our
communities and develop a plan to promote significant improvement
Consumers
Define priority topics and implement a strategy
that mobilises the Natura brand consumer.
-
-
4 5 8
10 12 16
12
To generate transformations at scale, we work in arrangements and partnerships
with local governments, grass roots communities and companies to promote
territorial development solutions. In the Pan-Amazon region, worthy of note were
the rural education actions and the training of young entrepreneurs in the Mid
Juruá Territory (AM) and the Rede Jirau activities in the Lower Tocantins Territory
(PA). We support the training of sustainable rural entrepreneurs focused on the
forest and biodiversity. We maintained our activities with the UDBEN network
in the Benevides (PA) region (exhibition of social projects in Benevides, and
the ConVIVA (community reclamation) and Inova Cajamar (urban reclamation)
networks.
In 2018, we created the Human Development and Social Impact Programme
(PDHIS in the Portuguese acronym ). In 2016 and 2017 we experimented with
some territorial development indicators such as the Social Progress Index (IPS),
in the Mid Juruá (AM) region and in Cajamar (SP). We also support the Rede
Nossa São Paulo Cidades Sustentáveis movement in Cajamar. With these
analyses, we seek to build the indicator impact methodologies which will help
us execute the strategy.
100%
75%
Based on the material topics defined in 2014, we defined claims
for building the value of sustainability with consumers. Launched in the beginning
of 2019, the #porummundomaisbonito movement addresses three causes and
six commitments to generate positive impact.
50%
*Eco-efficient packaging 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.
**PCR: Post-consumer recycled material.
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Company information
73
2018 ANNUAL REPORT
information about the company / corporate governance / risk management / ethics and integrity / natura commitments and partnerships
Corporate governance
GRI 102-18, 102-19, 102-20, 102-21,
102-23, 102-24, 102-26
The governance structure continues to
evolve in line with the characteristics of
Natura &Co, the global group which Natura
Cosméticos S.A. controls.
At the end of the year the Board of
Directors comprised nine members, five
of whom were independent. In September
2018, the US citizen Jessica DiLullo Herrin
joined as an independent member. She is
an entrepreneur with experience in direct
selling and in large technology companies.
Marcos Lisboa, who made important
contributions during his seven years on
the Natura board, left at his own volition in
April to pursue other projects. And we note
with profound regret the loss of the board
member Peter Saunders, who passed away
in August.
With support from a specialised consultancy
the Board has been reviewing its structure,
processes and practices – including the
definition of key areas that should serve
group interests. The Board was also
involved in discussions about the executive
remuneration plan, which evolved to
incorporate a global vision, while taking into
account regional factors of each business
and ensuring a healthy balance between
attractiveness, results and long-term
commitment to the company. The meetings
also addressed questions such as the
group budget, Natura’s expansion in Latin
America, The Body Shop transformation
plan and new challenges for Aesop. In 2018,
the Board met five times. Two of these
meetings were held in London, England, as
part of the business integration process.
GRI 102-22 Composition of the Board of Directors
By age group
Under 45 years
Over 45 years
By gender
Women
Men
By origin
Brazilian
Overseas
By length of service
Up to one year
Between one and three years
Over three years
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Board
of Directors
GRI 102-22
(from left
to right)
Carla Schmitzberger
Fábio Colletti Barbosa
Pedro Luiz
Barreiros Passos
Antonio Luiz
da Cunha Seabra
Roberto de Oliveira Marques
Guilherme Peirão Leal
Silvia Freire Dente da Silva
Dias Lagnado
Gilberto Mifano
Jessica DiLullo Herrin
(was unable to be
with us on this day)
See the résumé
of each member of the
Board of Directors
https://natu.infoinvest.com.br/corpo-
rate-governance/our-leaders
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2018 ANNUAL REPORT
information about the company / corporate governance / risk management / ethics and integrity / natura commitments and partnerships
Advisory committees
Incentives for integration
The Board of Directors is advised by
five committees, the most recent being
the Group Operations Committee
(GOC), created in 2017 and headed by
the executive chairman of the Board,
Roberto Marques. The CEOs of the
three companies and representatives of
key areas in the group are also on the
committee. Created in 2017, the purpose
of the committee is to drive agile solutions
for Natura &Co. It met five times during
the year, the first of which in February in
Brazil. This meeting was attended by the
complete leadership teams of the three
businesses.
The other four Board of Directors advisory
committees are made up exclusively of
board members: Strategy; People and
Organisational Development; Corporate
Governance; and Audit, Risk Management
and Finance.
Further information about the composition
of each committee and its attributions:
https://natu.infoinvest.com.br/corporate-
governance/board-members-and-
committees
To facilitate the approximation and
integration of the companies, three
Networks of Excellence, or NEx were
created in cross-cutting areas that impact
the three businesses: Sustainability, Digital
and Retail. The NExs have members from
each business, who have met to coordinate
and promote the sharing of best practices,
providing mutual support, discussing
common agendas and synergies.
Self-evaluation GRI 102-28
To evaluate the members’ performance
and pursue improvement opportunities
in the governance process, Natura has
a self-evaluation process. The previous
evaluation took place in 2016 – and
another is being undertaken at the
beginning of 2019 and will be concluded
in the first half of the year. The process
was not performed in the last two years
because the Board of Directors underwent
a series of alterations in composition and
scope and was engaged in formatting the
Natura &Co group.
Collective knowledge
The company’s quarterly and annual
management reports, which encompass
economic, social and environmental topics,
76
are analysed by the board members. The
board also undertakes the assessment and
approval of Natura’s strategic activities
in these topics, including analysis of the
2050 Sustainability Vision, performance in
achieving its goals, as well as engagement
and presentations related to data
collection and progress. GRI 102-27
Members of the Executive
Committee (Comex)
Chief executive officer
João Paulo Brotto Gonçalves Ferreira
Vice presidents
Agenor Leão de Almeida Júnior
(Latin America)
Andréa Figueiredo Teixeira Alvares
(Marketing, Innovation and Sustainability)
Erasmo Toledo
(Direct Selling)
Fernando Mattoso Lemos
(Technology and Digital Businesses)
Flavio Pesiguelo
(People and Culture)
Itamar Gaino Filho
(Legal and Compliance Officer)
Joselena Peressinoto Romero
(Operations and Logistics)
See the résumé of each Comex member:
https://natu.infoinvest.com.br/corporate-
governance/our-leaders
Executive committee
The Natura Executive Committee (Comex)
comprises the chief executive officer and
eight vice presidents. In 2018, a new vice
presidency area was created, Legal and
Compliance, a structural reinforcement that
not only supports international expansion,
but also sustains the ethical and integral
nature of Natura’s relations. The new Legal
and Compliance Officer, Itamar Gaino
Filho, previously occupied the position
of statutory legal director. Other new
members who joined Comex last year were
the vice president of Finance and Investor
Relations, José Antonio de Almeida
Filippo, and the vice president of Digital
Technology, Fernando Mattoso Lemos.
The composition of Comex ensures a
diverse group of executives that provides
a balance between in-depth knowledge of
Natura and a vision of the new competencies
that will be necessary as the company’s
internationalization process advances.
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Risk management
GRI 102-30, 102-31
In the course of 2017 work was undertaken by the
business areas to map the risks indicated by the Audit,
Risk Management and Finance Committee at the end
of 2016 as priorities to be monitored based on the risk
dictionary reviewed that year. In 2018, the mapping
process was continued and, in the second half of the year,
the risk scenario was reviewed in the light of the business
strategies in place and interviews conducted with Natura
executives to identify and catalogue the main matters to
be taken into account and monitored during the cycle.
This wide-ranging exercise led to the incorporation of
new aspects to be discussed and followed up, such as
questions related to cyber-security and the requirements
of Brazil’s personal data protection law.
In the first half of 2018, we enhanced the analyses
and assessment undertaken in the Environment and
Quality areas at the end of 2017 and started to map the
principal risks that could impact the goals established
for our product distribution hub located in Itupeva (SP).
This joint effort helped to consolidate ownership of these
topics and contributed to the maintenance of ISO 9001
Quality Management and ISO 14001 Environmental
Management certifications.
The entire risk management process is monitored by
the Executive Committee and, through the advisory
committees, also by the Board of Directors.
Principal risks monitored GRI 102-15, 102-34
Risk
Mitigation measures
Brand and commercial model
management, including
attractiveness for consultants
We constantly monitor our industry, including consumer preferences and spending patterns. We focus on models designed to advance the
commercial model in line with our value proposition and strategic planning, which is reviewed annually. This is the case of new sales formats,
such as the digital relationship platform (Rede Natura), and retail experiences, such as sales through pharmacies and Natura’s own stores.
Moreover, the company is making significant investments in revitalising direct selling, aimed at maintaining close, high quality relations with
the Natura Beauty Consultants .
Implantation of strategy
Innovation capacity
Research, development,
manufacturing and product
quality
We review our strategic planning and short, medium and long-term targets on an annual basis, including investment decisions related to
acquisitions and holdings in other companies, as well as the entry into new markets. This is an activity which involves all of the business units.
All the strategies and reviews thereof are presented to and discussed by the Executive
Committee and approved by the Board of Directors.
We invest continually in innovation on different fronts: commercial strategy, digital platforms, product development, logistics and distribution
network 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 have product lines
similar to ours and at times compete within our direct selling channel.
Natura is totally committed to the health and safety of its clients, with rigorous internal processes ranging from the conceptual development of
a product to its launch, backed by a differentiated positioning characterized by a commitment to the truth and to transparency. The company’s
Occupational Safety and Health policy sets forth a preventive approach to the occupational risks inherent to the operations. To guarantee the
quality and safety of its products, Natura employs the most up-to-date development methods and quality controls, with structured quality
assurance processes and programmes that are extensive to our partnering suppliers. Furthermore, Natura maintains open communication
and relationship´channels with all unions, recognising them as the legitimate representatives of the interests of our co-workers in each area,
always striving for understanding and reconciliation of interests between the parties.
Interruptions to
our Information Technology
systems, including cyber attacks
Natura’s main IT systems are managed with a view to ensuring operational stability. We ensure data and server redundancy, information back
up routines, control of access to our systems and continuous monitoring to detect safety vulnerabilities in data banks and infrastructure com-
ponents. Natura manages information security in a structured manner, with explicit guidelines set forth in the company’s Code of Conduct,
permanent awareness measures for co-workers, mapping and dealing with information security risks in compliance with the ISO 27002:2013
standard.
Attraction and retention of
executives and developing
leaders
To maintain the engagement and incentives for the development of our co-workers, in 2018 we consolidated the evolution of our Nossa
Gente programme, focused on employee proactivity. This is based on a simpler, networked process that promotes increased autonomy,
non-hierarchical assessments and real time feedback on a permanent basis, enabling employees to point out and learn about their strengths
and opportunities for improvement. To develop leaders, we enhanced the two fundamental pillars of the Mosaico programme – Leadership
and Culture and Performance and Results, further aligning it with the organizational transformation in progress. We also expanded the
Passport to the Future programme for operational and sales force employees, creating paths for the acceleration of talent in diverse company
areas. As a means of recognising and retaining talent we seek to offer a remuneration package above the market average, with the objective
of sharing wealth with all co-workers. Additionally, we conduct an annual review of the succession maps, ensuring the constant identification
of individuals with the potential to occupy executive positions.
Climate change
GRI 201-2
Our activities are aimed at combining economic and socioenvironmental gains. Mitigation projects have become formal company activities
cross cutting the entire organisation, an example being the Carbon Neutral programme, which prioritises the reduction of direct and indirect
emissions throughout the production chain, in addition to offsetting 100% of emissions that are not avoided through projects that generate
socioenvironmental benefits.
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Main risks monitored (continued) GRI 102-15, 102-34
Risk
Mitigation measures
Climate change
GRI 201-2
Social biodiversity
Our activities are aimed at combining economic and socioenvironmental gains. Mitigation projects have become formal company activities
cross cutting the entire organisation, an example being the Carbon Neutral programme, which prioritises the reduction of direct and indirect
emissions throughout the production chain, in addition to offsetting 100% of emissions that are not avoided through projects that generate
socioenvironmental benefits.
The use of social biodiversity ingredients is governed by the Natura Sustainable Use of Social Biodiversity Products and Services policy,
which ensures the fair sharing of benefits with the supplier communities and the sustainable stewardship of these assets, in addition to
complying with Brazilian legislation on access to genetic heritage. By means of the Amazônia Programme, Natura also seeks to drive the
generation of sustainable businesses based on biodiversity and traditional/cultural knowledge.
Legal, sector regulation and
tax load
We actively monitor regulatory changes applicable to our business in all the judicial spheres in order to manage the impacts any alterations
may have on our operational and financial results. We continuously track federal and state level tributary processes and work with sector
associations such as Abihpec and ABEVD to defend industry interests.
Other external risks
(interest rate, exchange
variation, inflation etc.)
Constant monitoring of external risks related to the economic conjuncture by senior management, with the redefinition of strategic
planning, if necessary.
Institutional conjuncture (Brazil
and International Operations)
Constant monitoring of the political-economic conjuncture in the countries in which Natura operates, with the redefinition of strategy
if necessary.
Compliance with Brazil’s
Personal Data Protection law
The company contracts a specialised legal consultancy to map potential improvements. A multidisciplinary group is responsible for
designing and implanting changes in processes or routines when this is necessary to ensure compliance with the guidelines established
by the personal data protection legislation. The company organised workshops involving the main internal agents impacted by the law.
Internal controls
A Natura has an internal controls matrix based on the
COSO (Committee of Sponsoring Organizations
of the Treadway Commission) framework. This matrix
is updated annually both for the controls relative to
the operations in Brazil and those for the operations in
Latin America. Additionally, all controls are subjected to
effectiveness tests, while 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
complement their analyses with additional tests. The
results of the tests undertaken both by the company
and by the independent auditors, are reported to the
managers responsible for the controls and to the Audit,
Risk Management and Finance Committee, which in turn
reports to the Board of Directors.
In 2018, Natura effected important updates to the
risk and control matrix, such as the classification and
adaptation of the MRC (Management Review Controls)
and IPE (Information Provided by Entity) controls, in
accordance with PCAOB (Public Company Accounting
Oversight Board) guidelines, as well as the inclusion
of controls to address recommendations made by the
independent auditors. The company also organized
training for the staff of the Shared Service Centre.
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Ethics and integrity
GRI 102-17
Responsible tax practices
To promote greater transparency, Natura is a member of the group that
established the Responsible Tax Principles, aimed at communicating the tax
practices of companies around the world. The initiative is led by the B Team,
a global movement comprising leaders of companies, civil society and
government to promote best business practices, prioritising the well being
of people and the planet.
The B Team Principles adopted by Natura espouse transparency and responsible
tax practices and strategies, including information about effective tax burdens.
Based on this, in this report we disclose Natura’s revenues (not including the
The Body Shop and Aesop) in Brazil and in the other countries in Latin America
where we have operations, as well as the income tax due for each of them.
We are committed to growing this practice, extending this commitment
to the Responsible Tax Principles to the other companies in the group
(further information on page 10).
In 2018, Natura instituted an Ethics and
Compliance area headed by a director
to ensure a more wide-ranging vision
that goes beyond mere compliance with
standards and legislation, integrating the
principles into the company’s sustainability
agenda. This ranges from transparency in
tax practices and the use of ingredients,
through anti-corruption, the promotion
of citizenship to questions related to civil
rights and women’s rights, for example.
we were recognised as one of the most
ethical companies in the world by the
Ethisphere Institute, the global leader in
defining and developing ethical standards
for business conduct. Natura was the only
Brazilian company featured on the list of
135 companies from 23 countries. The
company is also a signatory to the Instituto
Ethos Pacto Empresarial pela Integridade e
Contra a Corrupção (Business Integrity and
Anti-corruption Pact).
This commitment ensures that Natura
is constantly recognized for its ethical
practices, both in Brazil and internationally.
The company maintained 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.
Moreover, for the eighth year running
Part of the Ethics and Compliance team’s
work during the year was to introduce its
practices and processes into Natura &Co.
The structure was consolidated in the three
companies, including the implementation
of an ombudsman channel, reinforcing the
group’s ethics and integrity frameworks.
Aligned with best global practice we
reviewed the Natura Code of Conduct
in 2017, followed by the updating of the
Aesop and The Body Shop codes in 2018.
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2018 ANNUAL REPORT
information about the company / corporate governance / risk management / ethics and integrity / natura commitments and partnerships
Natura commitments and partnerships
GRI 102-17
Seals and certifications:
>>>>>> We have been certified as a B
Corp since 2014. This is an initiative of the
B System movement, which recognises
companies that give equal weight to
economic and socioenvironmental results.
>>>>>> UEBT (Union for Ethical BioTrade)
seal for Natura Ekos, in recognition of
the traceability of the natural ingredient
supply chain and reinforcing the company’s
commitment to fair trade and the
conservation of biodiversity.
>>>>>> Leaping Bunny certification from
Cruelty Free International, which attests to
the non use of animal testing in the entire
Natura portfolio. The Body Shop also has
this certification.
>>>>>> Peta (People for the Ethical
Treatment of Animals), which assures that
no product or ingredient used by Natura
and its supplier base was tested on animals
at any stage of development.
>>>>>> RSPO Palm – we use palm oil
100% certified by the Roundtable on
Sustainable Palm Oil.
>>>>>> Organic alcohol – we use 100%
organic alcohol in our perfumery, with
IBD (Instituto Biodinâmico) and Ecocert
certification.
strategies and policies.
- We participate on the Brazilian Global
Compact Committee and coordinate the
SDG Thematic Group.
>>>>>> FSC paper (Forest Stewardship
Council) – we use FSC certified paper in
our product packaging and the cartons
used to ship product to consultants.
>>>>>> LEED certification – in 2018 the
Natura administrative building NASP was
awarded LEED (Leadership in Energy and
Environmental Design) GOLD certification.
Developed by the U.S. Green Building
Council (USGBC).
Organisations with which we maintain
relations:
>>>>>> The United Nations Organisation
(UNO) Global Compact, a movement
of companies, workers and civil society
to promote citizenship and sustainable
growth.
- We are signatories to the Global
Compact, and Guilherme Leal is a member
of its council, the highest governance body
responsible for defining the initiative’s
>>>>>> We have aligned our Sustainability
Vision with the Sustainable Development
Goals (SDGs), a global agenda that sets
forth 169 targets for the 17 SDG goals by
2030
>>>>>> World Business Council for
Sustainable Development (WBCSD), led
by the CEOs of more than 200 leading
companies that are working together to
accelerate the transition to a sustainable
world.
- The Natura vice president of Innovation
and Sustainability, Andréa Alvares, is a
member of the executive committee.
- We are signatories to the Natural Capital
Coalition – a multi-stakeholder global
collaboration oriented to conserving and
improving natural capital.
- We are also members of the Brazilian
sustainable development business council
CEBDS (Conselho Empresarial Brasileiro
para o Desenvolvimento Sustentável).
>>>>>> UEBT (Union for Ethical BioTrade),
as a member of the management
committee.
>>>>>> B Team – a group comprising
world leaders with the goal of engaging
corporations and global leaders in the
cause “People-Planet-Profit” and proposing
solutions that reconcile revenues and
socioenvironmental responsibility.
- Natura board member Guilherme Leal
is a member of the B Team.
- Signatories to Net Zero, a coalition
dedicated to accelerating the transition
to a low carbon economy by 2050.
>>>>>> TCFD (Task Force on Climate
Finance Disclosures), an organisation
involved in developing standards for the
disclosure of climate-related financial risks.
>>>>>> Science Based target, a group
of global institutions that aims to define
science based emissions reduction
targets in line with the scale of reduction
necessary to maintain the increase in
global temperature below 2°C.
80
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2018 ANNUAL REPORT
information about the company / corporate governance / risk management / ethics and integrity / natura commitments and partnerships
>>>>>> Ellen MacArthur Foundation,
whose mission is to accelerate the
transition to a circular economy.
- In 2018, we became signatories to the
New Plastics Economy initiative, which
establishes targets related to plastic
packaging for 2025. In the case of
Natura, the commitments assumed are
the company’s 2020 Sustainability Vision
targets.
>>>>>> Instituto Ethos
- Andréa Alvares is a member of the
Steering Council.
- Natura is a member of the Coalizão Clima
e Florestas.
>>>>>> PPA (Parceiros pela Amazônia),
a group organised by small private sector
companies, NGOs and financiers in the
Amazon region to promote sustainable
development.
>>>>>> The CFT association Abihpec
(Associação Brasileira da Indústria de
Higiene Pessoal e Cosméticos).
- Member of the initiatives: sector
programme Dê a Mão para o Futuro,
a coalition of companies that promotes
racial and gender equality and the
Climate Forum.
>>>>>> LGBTI Conduct Standards Pact,
by the UN Free & Equal movement, aimed
at promoting equality in rights and fair
treatment at work for the LGBTI population.
>>>>>> Business Initiative for Equality,
aimed at promoting opportunities in the
labour market for the black population.
Upon joining the initiative, companies
adhere to 10 Commitments for the
Promotion of Racial Equality.
>>>>>> Win-Win: Gender Equality
Means Good Business, implanted by the
International Labour Organisation (ILT)
in Argentina, Brazil, Chile, Costa Rica,
Jamaica and Uruguay. Natura Brazil and
Natura Chile are part of the initiative.
81
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2018 ANNUAL REPORT
Complementary indicators
82
2018 ANNUAL REPORT
complementary indicators
Complementary indicators
Economic-financial management
People management
Profile
Remuneration and benefits
Turnover
Career development
Relationship quality
Health and safety
Freedom of association
Ethics and human rights
Anti-corruption
Public policies
Human rights
Anti-competitive behaviour
84
84
84
85
87
88
89
89
90
91
91
93
93
94
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Environmental management
Emissions
Energy
Water
Waste and effluents
Biodiversity
Environmental Compliance
Natura Beauty Consultants
Suppliers
Society
Consumer health and safety
Support and sponsorship actions
Leadership and social influence
94
94
95
97
98
101
102
102
103
104
104
104
105
Natura Operations
Regarding the locations informed in the indicators, we take into account:
Cajamar: Natura plants and office in Cajamar (São Paulo)
NASP: Natura administrative headquarters in São Paulo (SP)
SP DC: São Paulo Distribution Centre (SP), located next to NASP
Ecoparque: Natura plant and office in Benevides (Pará)
Itupeva Hub: logistics warehouse located in Itupeva (SP)
Operations in Latin America: Argentina, Chile, Colombia, Mexico and Peru
IOs: International Operations which, in addition to the countries in Latin America,
include stores, offices and e-commerce operations in the United States and France.
83
2018 ANNUAL REPORT
complementary indicators
Economic-financial
management
Financial implications and other risks and opportunities
arising from climate change
GRI 201-2
Climate change and social biodiversity
are elements in the Natura risk matrix
that are monitored by the Executive
Committee. They are also monitored by the
Board of Director advisory committees. In
relation to climate change risk, our major
concern is understanding, monitoring
and mitigating effects on our value chain.
By means of our EP&L (Environmental
Profit & Loss) accounting, we map the
real impacts and externalities generated
by company activities. We identified that
our impact on climate change is one of
the most significant among the categories
analysed. Based on this, together with
the Risk team and other areas, we are
conducting a specific study on the effects
associated with climate change in our
processes in order to map specific
mitigation projects that will be implanted
throughout the company. It should
be noted that we have our Carbon
Neutral Programme that prioritises
the reduction of direct and indirect
emissions throughout the chain, as well
as offsetting 100% of the emissions
we are unable to avoid. The offsetting
measures are voluntary, not mandatory,
and as such do not portray the financial
implications of climate change-related
risks. Our performance in this area and
the main initiatives undertaken in 2018
are described from page 38.
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People management
Labour practices
Information about employees
GRI 102-8
Employees by type of work contract and gender1 2
Type of
contract
Fixed term -
Brazil
Fixed term -
International
Operations
Permanent -
Brazil
Permanent -
International
Operations
2016
2017
2018
men
women
total
men
women
total
men
women
total
18%
82%
0%
100%
51
57
20%
80%
3%
97%
54
33
27%
73%
11%
89%
97
54
42%
52%
4,856
44%
56%
4,711
45%
55%
4,861
19%
81%
1,433
19%
81%
1,513
19%
81%
1,609
Total
37%
63%
6,397
63%
38%
6,311
38%
62%
6,621
1. Expatriates, interns, members of the Board of Directors and Instituto Natura employees and employees in the
United States were not taken into account. We used the headcount at the end of December as a reference.
2. Regarding other work contracts: (i) Apprentices are hired by a third-party company that is responsible for their
management. (ii) Employees hired through employment agencies on fixed-term contracts aligned with Brazil’s CLT
legislation and involving supervision are considered to be temporary. This number includes the temporary workers
in Natura Brazil. (iii) Nested third-parties are suppliers providing services to Natura and who work in or access
Natura facilities for a period in excess of six months, who may or may not have a fixed work post. This number
includes the nested third-parties in Natura Brazil facilities.
84
2018 ANNUAL REPORT
Ratio of women’s salary to men’s by functional category – Operations in Latin America (%)
complementary indicators
Remuneration and benefits GRI 103-2, 103-3
Ratio of women’s salary to men’s
GRI 405-2
We reiterate that our salary grid is not
defined by gender-related factors.
In Brazil in 2018 collective bargaining
agreements resulted in increases of
from 2% to 5% for operational and
administrative co-workers. Managers
received a fixed increment to their base
salary. There were also spontaneous
increases and increases related to
promotions and merit awards, in addition
to hires, terminations and transfers during
the year, which impacted the amounts
reported.
The amounts for 2018 were based on the
concept of monetary remuneration, not
including the proceeds of sales bonuses
and commissions. This concept impacts
mainly women in the administrative
area, reducing their average monthly
remuneration and making comparison
with previous years impossible. The
same occurs in the operations in Latin
America, where the median sales
bonuses also negatively impact the
salary difference between women and
men, principally in Chile. Additionally, in
these countries only administrative and
management positions were reported,
because of their representative mass in
salary analyses.
Argentina
Functional category
Management
Administrative
Chile
Functional category
Management
Administrative
Ratio of women’s salary
to men’s by functional category – Brazil (%)
2016
2017
2018
Director level
Management
Administrative
Production
-10
-1
10
-22
-19
-3
18
-22
-16
-4
-8
-20
Colombia
Functional category
Management
Administrative
85
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0
5
0
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c
o
m
p
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y
a
b
o
u
t
2017
2018
-11
3
-9
-17
2017
3
33
2017
-9
-4
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d
c
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o
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s
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o
m
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n
t
a
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y
2018
-1
-26
r
e
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s
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e
2018
-18
-27
2018 ANNUAL REPORT
complementary indicators
Remuneration and benefits (continued)
Ratio of women’s salary to men’s
by functional category – Operations in Latin America(%)
Mexico
Functional category
Management
Administrative
Peru
Functional category
Management
Administrative
2017
2018
7
-1
2017
-5
-28
10
-4
2018
5
-24
Annual total compensation ratio
GRI 102-38
As in previous years it was not possible to report this in line with GRI Standards requirements due
to the confidential nature of this information.
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5
0
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Maternity and paternity leave
GRI 401-3
Rates have remained stable in relation
to recent years. There has been an
increase in male co-workers taking paternity
leave since 2016, when the benefit was
extended to 40 days. In 2018, we also
started offering places in the two Natura
nurseries in Brazil for the children of male
co-workers. There was an increase in
the number of female co-workers who
continued to work 12 months after returning
from maternity leave, meaning that the
company is retaining these professionals.
Further information on this subject in
Diversity and inclusion on page 59.
Maternity leave
and paternity leave
Employees who took parental leave
Employees who returned to work after
the end of the leave and were still
employed 12 months after their return
86
2016
2017
2018
men
women
men
women
87
139
71
107
112
144
73
105
121
138
94
118
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d
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s
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2018 ANNUAL REPORT
complementary indicators
Turnover GRI 103-2, 103-3
New employee and turnover rates
GRI 401-1
There was a 34% increase in the total
number of hires in 2018. This increase
was due to the hiring of staff for the Natura
stores opened in 2018 and to support the
administrative activities related to these
stores. As in the last two years, 62% of
the co-workers hired were women, which
contributes towards the achievement of
our gender equality target of having 50%
women occupying leadership positions
by 2020.
There was a slight decrease in the
total number of co-workers who left
Natura, worthy of note was the drop
in the number of women leaving the
company, which is positive in terms of
our goals.
Employees who
left the company,
by gender – Brazil + International
Operations
Men
Women
Total
2016
2017
2018
Number
Rate (%)
Number
Rate (%)
Number
Rate (%)
409
613
40.02%
59.98%
1,022
100%
395
772
1,167
34%
66%
100%
420
743
1,163
36%
64%
100%
Employees hired,
by gender – Brazil +
International Operations
Men
Women
Total
2016
2017
2018
Number
Rate (%)
Number
Rate (%)
Number
Rate (%)
307
498
805
38.14%
61.86%
100%
414
687
1,101
38%
62%
569
910
38%
62%
100%
1,479
100%
87
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0
5
0
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c
o
m
p
a
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y
a
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o
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i
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d
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a
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o
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c
o
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m
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n
t
a
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y
r
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o
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a
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2018 ANNUAL REPORT
complementary indicators
Career development
Performance reviews
GRI 404-3
Employees who received performance reviews by
functional category and gender1 2
Total
employees
Employees submitted to performance
and career development reviews
% by gender
Director level
Management
Administrative
Production
Director level
Management
Administrative
Production
Director level
Management
Administrative
Production
2016
women
16
347
2,864
834
16
347
2,864
834
100%
100%
100%
100%
men
38
284
747
1,267
37
282
731
1,185
97%
99%
98%
94%
2017
women
17
333
2,832
774
17
324
2,638
672
100%
97%
93%
87%
men
36
263
776
1,280
36
263
726
1,188
100%
100%
94%
93%
2018
women
17
339
1,377
698
16
320
1,247
658
94%
94%
91%
94%
men
38
264
754
1,223
31
245
681
1,149
82%
93%
90%
94%
1. The process was conducted in 2018, but refers to 2017. The process did not take into account the sales force, retail employees, interns, Instituto Natura employees,
expatriates, employees in the United States and operational area employees in Brazil admitted from November 3, 2017.
2. The criteria for performance reviews vary according to group of employees. In the sales force, it is necessary to have worked in at least nine sales cycles in the year. For
operational co-workers, it is necessary to have worked at least 90 days in the year. For directors, managers and administrative personnel, the process is ongoing and covers
employees admitted up to January 31, 2018. The criteria explain why not all the co-workers are reviewed during the year.
88
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Programmes for upgrading employee
skills and transition
assistance programmes
– Operations in Latin America
GRI 404-2
Training and qualification programmes
continued in Latin America. The
measures in Argentina included two
programmes: in the first, company leaders
addressed business-related matters with
their teams, such as our commercial
models and company marketing strategy
etc.; and, in the second, innovative young
employees were trained in agile working
methodologies. In Chile, there was an
increase in satisfaction with the company
Education programme. Investments
were also made in the variety of courses
on offer and in online offerings. In
Colombia, the Mosaico programme was
implemented for operational co-workers
with a course on logistics. In Mexico and
in Peru, among other measures, Natura
invested in coaching initiatives for leaders,
underscoring the importance of team work.
The main measures in Brazil are described
on page 65.
2018 ANNUAL REPORT
complementary indicators
Relationship quality
Co-worker engagement
GRI 102-43
Health and safety
Health and safety rates
GRI 103-2, 103-3, 403-2
In 2018, for the fourth time we
conducted an engagement survey
with co-workers, with support
from the consultancy Gallup.
We have seen steady year on year growth
in the results since the first survey. Using
a scale from 1 to 5, in 2018 the engagement
survey score increased from 4.04 to 4.12.
In Brazil, the score increased from 3.96 to
4.08, while in the operations in Latin America
there was a slight decrease from 4.27 to
4.24. Participation in the survey, which is
conducted electronically, was 94%.
In 2018, there was an increase in the
accident rate, both among employees
and service providers, especially in the
distribution centres, in the industrial areas
and among administrative workers. There
was also an increase in the number of
days lost in Brazil, due mainly to accidents
with service providers in the distribution
centres and some accidents that occurred
in 2017, in which the people involved
returned to work only in 2018.
The main causes of the accidents in 2018
are related to deviations in behaviour
and lack of supervision of activities. As
an action plan, we are implementing a
programme to reinforce a safety culture at
Natura from 2019.
Engagement Survey – favourability (%)
2016
2017
2018
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t
Brazil
International Businesses Board
Argentina
Peru
Chile
Mexico
France
Colombia
Overall average – Natura
3.88
4.13
4.15
4.33
4.08
4.16
Not available
4.21
3.95
3.96
3.94
4.33
4.41
4.10
4.28
4.18
4.21
4.04
4.08
4.12
4.26
4.14
4.20
4.55
3.89
4.26
4.12
89
Injury
rate1
Brazil
Interna-
tional
Opera-
tions
2016
2017
Co-
workers
Nested
third-
parties
Total
Co-
workers
Nested
third-
parties
Total
Co-
workers
Nested
third-
parties
2018
Total
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m
e
n
t
a
r
y
1.43
2.68
2.04
0.76
1.45
1.09
1.19
1.55
1.36
Not
available
Not
available
Not
available
Not
available
Not
available
Not
available
1.53
6.39
3.27
1. The calculation of the frequency rate takes into account all the accidents logged involving co-workers in the
Cajamar and Ecoparque units, the distribution centres, the Itupeva Hub, NASP and the sales force in Brazil. In
2018, for the first time we reported accidents in the company’s offices, distribution centres and the sales force
for the countries in Latin America (Mexico, Peru, Colombia, Argentina and Chile). Minor injuries only requiring first
aid were not included. The 2018 absenteeism rate takes into account only days lost through injuries at work. In
previous years, the indicator took the total number of days lost into account.
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2018 ANNUAL REPORT
complementary indicators
Health and safety (continued)
2018 health and safety rates –
Brazil
Occupational disease rate
Days lost1
Absenteeism rate2
Number of fatalities
0
343
0.03%
0
Service
providers
Not available
312
0.16%
0
2018 health and safety rates –
Operations in Latin America
Co-workers
Occupational disease rate
Not available
Days lost1
Absenteeism rate2
Number of fatalities
50
0.01%
0
1. Days lost: takes into account time from which absences begin based on the reason stated in the fit note
and/or the stated illness.
2. The 2018 absenteeism rate takes into account only days lost through injuries at work. In previous years,
the indicator took the total number of days lost into account and not only those related to injuries at work.
Co-workers
Service providers
0
314
0.02%
0
Total
0
657
Health and safety
rates –
co-workers,
by gender1
Occupational disease rate
0.03%
Days lost rate2
0
Absenteeism rate
Number of fatalities
2016
women
men
women
0.0%
0.0%
3.02%
0
0.0%
0.0%
1.81%
0
67%
53%
1.42%
0
2017
men
33%
47%
1.15%
0
2018
men
26%
16%
women
74%
84%
0.71%
0.62%
0
0
Total
Not available
362
0.06%
0
1. The accident frequency rates are calculated based on the number of accidents per man/hour worked multiplied
by 1,000,000, in accordance with Brazil’s NBR 14280 standard and NTEP rules.
2. Days lost: takes into account time from which absences begin based on the reason stated in the fit note
and/or the stated illness.
Freedom of association
Possible breach or risk of breach of freedom
of association and collective bargaining
GRI 103-2, 103-3, 407-1
We value freedom of association
to unions both for employees and
suppliers’ employees, as set forth in our
Code of Conduct. As in previous years,
we did not identify operations or suppliers
at which the right to
exercise freedom of association
or conduct collective bargaining
had been violated.
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2018 ANNUAL REPORT
complementary indicators
Ethics and human rights
Anti-corruption GRI 103-2, 103-3
Operations submitted to corruption-related assessments
GRI 205-1
Natura is supported by its Ethics
and Compliance, Legal, Internal
Controls and Risk Management and
Internal Audit areas in preventing and
combating bribery and corruption. We
employ documents such as the Code of
Conduct, which is reviewed annually, to
ensure adherence to the reality of the
business environment and to incorporate
any relevant matters identified. The
code, which has a specific chapter on
anti-corruption and bribery, is available
to all co-workers in Brazil and in the
International Operations, as well as to
the sales force and suppliers. Taking the
e-learning course on the Code of Conduct
is mandatory for all co-workers.
We also have our Anti-Corruption policy,
which is available via the intranet and is
disseminated to co-workers in internal
communications, e-learning courses and
classroom training. Additionally, we have
a policy on Interaction with Government
Officials.
We guarantee that co-workers
and suppliers may report any
suspicion of violations of the Code of
Conduct securely, anonymously and
confidentially through the Ombudsman
channel. Reports are investigated by the
Ethics Committee. Moreover, we
conduct audits on specific payments
and suppliers.
In 2018, we maintained our programme
of compliance with Brazil’s Anti-
Corruption law (law nº 12.846/2013).
The company organised classroom
training for managers, directors,
administrative and operational staff
with a focus on the anti-corruption law
and the code of conduct, in addition to
courses for medium and small product
and service suppliers. We developed a
corruption matrix indicating potential
risks and the people responsible for
addressing them in the company; we
also released internal communications to
reinforce our guidelines.
The controls related to the code of
conduct and the ombudsman channel
were tested, with emphasis on: conflicts
of interest, family or emotional links
with public authorities or co-workers
who have worked in public authorities;
monitoring of gifts given to public agents;
the recording of minutes for meetings
held with public authorities; contract
clauses for suppliers and/or service
providers; policies and procedures for
donations, support and sponsorship,
managing consultants, advisors, opinion
formers and organisers, and procedures
for external events involving public
91
authorities; and the execution of
due diligence processes to verify
any involvement in corruption-related
activities.
Since our interaction with public authorities
is limited and the company maintains this
series of control and mitigation measures,
we classify our exposure to the risk of
corruption as moderate to low. In 2018, all
of our operations were submitted to risk
assessments.
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2018 ANNUAL REPORT
complementary indicators
Communication and training in
anti-corruption policies and procedures GRI 205-2
Our Code of Conduct was communicated
to 100% of the work force in 2018,
and around 90% received training in the
code. In December 2017, the document
was relaunched with a global scope,
in preparation for implementation in all
the countries in which the Natura group
operates. Communication on the updated
document was via the intranet and email,
as was the deadline for employees to
conclude the associated e-learning
programme. During 2018, a series of actions
was undertaken to remind co-workers
to conclude the training, including the
engagement of managers and directors.
In addition to online training, classroom
courses were organised in Brazil.
In 2017, we also relaunched the Code
of Conduct for suppliers. This was
communicated to the entire supplier base
by specific email. In place since 2014, the
document sets forth fundamental guidelines
for the relationship between Natura
and its business partners. In addition to
e-learning courses, in 2018 we organised
two workshops on business conduct and
integrity for suppliers and service providers.
Co-workers communicated and trained in the anti-corruption policies and procedures adopted
by the organisation, by functional category1 2 3 4 5
By functional category
Director level
Management
Area head/coordination
Administrative
Operational
Interns
Total
2018
Communicated and trained (%)
77.78
93.80
95.70
91.28
88.63
75.15
90.72
Suppliers communicated and trained in anti-corruption policies and procedures adopted
by the organisation, by region – Brazil
Region
South
Southeast
Midwest
Northeast
North
Total
2016
2017
2018
Communicated and
trained
Communicated and
trained
Communicated and
trained
33
480
5
21
16
555
29
333
3
8
7
380
30
339
1
9
7
386
92
1. Includes training on the Code of Conduct for co-workers in Brazil and in the International Operations during the
period from 01/01/2018 to 21/12/2018, based on the December 2018 headcount. This year we have started to
present the percentage rather than the absolute number.
2. Indirect operational workers performing administrative functions in the production plants were grouped with
administrative workers, while Natura Store sales staff were grouped with operational workers.
3. Third-party professionals are not allocated in the scope of co-workers trained, but rather in the scope of
suppliers trained.
4. In 2018, our trainee programme ended in March, as a result of which this category was not counted.
5. We did not record training programmes for apprentices in 2018. Because apprentices are outsourced, training
for this group is not mandatory.
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2018 ANNUAL REPORT
complementary indicators
Confirmed cases of fraud and measures taken
GRI 205-3
There were no cases of fraud involving
public authorities at Natura in 2018.
During the year, there was an increase
in the number of reports concerning
Natura Beauty Consultants and Business
Leaders, who are not company employees.
A total of 18 cases of fraud was logged
among this group. Fourteen of these
were duly punished, while the culprit was
not identified in the others, meaning no
penalties were applied.
It should be noted that the increase in
the number of reports is a result of the
strategy aimed at disseminating the
Ombudsman channel and the company’s
codes of conduct, reinforcing Natura’s
commitment to ethics and integrity.
Cases of fraud1
2016
2017
2018
Total number of confirmed cases of fraud
Total number of confirmed cases of fraud in which
co-workers were dismissed or punished for fraud
Total number of confirmed cases in which
members of the sales force (not co-workers) were
dismissed or punished for fraud
Total number of confirmed cases in which contracts with
commercial partners were rescinded or were not renewed
as a result of violations related to fraud
6
5
0
0
13
2
6
0
23
5
18
0
1. In previous years, the table indicated that the cases considered founded by the Ombudsman were related to
corruption. However, all the cases logged involve fraud. Natura understands fraud to be any intentional act or
omission aimed at deceiving third-parties, resulting in a loss for the victim or a gain for the perpetrator. On the
other hand, corruption may be understood to be any offer, promise or authorisation of a payment by an individual
or company to a public authority or a representative thereof, when this payment is aimed at influencing the person
receiving it to use their position or function to obtain or retain an unwarranted business gain or advantage in
benefit of the individual, the company or third-parties. Since we have never registered any cases involving public
authorities, the information was corrected.
Public policies
Political contributions - GRI 103-2,103-3, 415-1
In accordance with a specific internal policy, valid in Brazil and the International
Operations, Natura does not make contributions to campaigns, parties and/or
candidates for public office, during or outside electoral processes.
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
Natura does not work with suppliers
presenting this type of risk. Our
suppliers declare the working conditions
they provide for their work force and are
audited periodically.
In all the supplier communities we conduct
audits by means of the Social Biodiversity
Chain Verification System, which
encompasses indicators on the occurrence
of child, forced or slave labour, formal labour
relations, ergonomics, and worker health
and safety. It should be noted, that our
production chain management system is
audited annually by an independent third-
party, in addition to having UEBT (Union for
Ethical BioTrade) certification. No deviations
were identified in 2018. However, in some
communities there are indications of the
involvement of children and adolescents
assisting their parents/families in the
production chain. The children sometimes
help their parents out, but they do attend
school. This is a cultural tradition in some
communities, which does not constitute
violation of the principles of ethical biotrade.
Violation of indigenous peoples’ rights - GRI 103-2, 103-3, 411-1
In 2018, no incidents involving indigenous populations were identified in the
locations in which the company operates, given that Natura does not work directly
with indigenous peoples.
93
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2
0
5
0
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2018 ANNUAL REPORT
complementary indicators
Non-discrimination
Cases of discrimination and corrective actions taken
GRI 103-2, 103-3, 406-1
All reports of discrimination are addressed by the Ombudsman. In 2018, one
case was reported internally, and this has already been resolved. It should be
noted that all incidents indicating probable breaches of ethical principles, which is
the case of discrimination, are reported to the Ethics Committee, in which senior
management participates.
Anti-competitive behaviour
Non-compliance with social and economic laws and regulations
GRI 103-2, 103-3, 206-1, 419-1
Environmental management
Emissions
Emissions of ozone depleting substances (ODS), NOx, SOx and other significant
atmospheric emissions GRI 305-6/305-7
There are no indications that emissions of ozone depleting substances,
NOx, SOx and other atmospheric emissions are significant in Cajamar and
in the Ecoparque.
In 2018, we were not subject to administrative or judicial sanctions for violations of laws
or regulations governing anti-competitive, antitrust or monopoly practices.
NOx
SOx
Significant atmospheric emissions1 2 (kg)
Persistent organic pollutants (POP)
Volatile organic compounds (VOCs)
2017
2018
0.87
0.06
0.92
0.09
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Hazardous atmospheric pollutants (HAP)
Not Applicable
Not Applicable
Particulate material (PM)
0.86
2.10
Other standard categories of atmospheric emissions identified in regulations
Not Applicable
Not Applicable
1. As clean fuels (ethanol and LPG) are used in the boilers at Cajamar, there are no significant measurable
quantities of these gases.
2. At the Ecoparque, we considered the biomass boiler chimney emissions analysis reports drafted by the
consultancy Bioagri Ambiental in July and August 2018. To calculate the index, we took into account the median of
the last six measurements undertaken.
94
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2
0
5
0
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2018 ANNUAL REPORT
complementary indicators
Energy GRI 103-2, 103-3
Energy consumption inside and outside the organisation
GRI 302-1, 302-2
There was a 7% increase in energy
consumption at the Cajamar and
Benevides units, caused mainly by the
increase in Natura’s production volume
in 2018. At the other sites, there was
an 8% increase in consumption, due
mainly to the effective occupation of
the new NASP administrative site in São
Paulo. There was also an increase in the
absolute consumption by third-parties who
manufacture on behalf of Natura, also the
result of increased production.
Consumption of fuels from renewable sources
– Natura Brazil (MWh)1
Solar energy2
Alcohol3
Briquettes4
Electrical energy – from the grid
Total
2016
6
11,236
8,131
52,750
72,122
2017
6
12,770
8,488
61,179
82,444
2018
0
14,568
9,423
64,977
88,968
Consumption of fuel from non-renewable sources
– Natura Brazil (MWh)
2016
2017
Diesel oil (generator sets)1
LPG gas
Natural gas
Total
1,197
1,714
0
2,911
1,301
1,784
676
3,761
1. This refers to electrical energy and fuel consumption in 2018 at the Natura facilities in Cajamar, Benevides,
NASP and the Itupeva Hub. It includes the distribution centres operated by third-parties in the states of Rio
Grande do Sul, Paraná, Minas Gerais, Bahia, Pernambuco and Pará, as well as six third-party manufacturers,
selected in function of the representativeness of the volume produced.
2. Natura stopped generating and consuming solar energy.
3. Renewable fuel used to produce steam at Cajamar.
4. Biomass boiler at Benevides.
2018
2,408
1,852
1,098
5,358
1. The increase in consumption of diesel oil was due to the higher number of power outages in 2018, occasions on
which the generators come into operation.
Energy consumed by type – Natura Brazil (MWh)
Electricity
Heating
Refrigeration1
Steam
Total
2016
53,947
0
0
20,000
73,947
2017
62,486
432
0
23,286
86,204
2018
53,908
799
13,477
26,141
94,326
1. 20% of the energy consumed is used for refrigeration. In the previous years, the energy used for refrigeration
was disclosed in the data for electricity. In 2018, Natura opted to disclose this information separately.
95
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e
s
e
n
t
a
t
i
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s
t
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a
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y
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i
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i
o
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i
s
u
s
t
a
n
a
b
i
l
i
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y
i
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u
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t
a
n
a
b
i
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i
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y
v
i
s
i
o
n
o
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e
r
v
i
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w
o
f
t
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e
2
0
5
0
t
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e
c
o
m
p
a
n
y
a
b
o
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i
i
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d
c
a
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o
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s
c
o
m
p
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m
e
n
t
a
r
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r
e
p
o
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t
a
b
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e
r
e
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o
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c
e
2018 ANNUAL REPORT
complementary indicators
Energy (continued)
Total energy consumed – Natura Brazil (MWh)
Fuels from non-renewable sources
Fuels from renewable sources
Energy consumed
Energy sold
Total
Energy matrix – Natura Brazil (%)
Electricity (grid)
Solar energy
Briquettes
Alcohol
Diesel oil
LPG gas
Natural gas
Total
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0
t
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c
o
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p
a
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i
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c
a
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p
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e
n
t
a
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p
o
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t
a
b
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u
t
t
h
e
r
e
p
o
r
t
a
s
s
u
r
a
n
c
e
2016
2,911
72,122
75,033
0
2017
3,761
82,444
86,204
0
2018
5,358
88,968
94,326
Total energy consumption – Natura Brazil (MWh)
Cajamar and Benevides units
Other Natura locations in Brazil
Natura third-party manufacturers
0
Total
75,033
86,204
94,326
2016
59,083
15,972
7,194
84,266
2017
63,939
17,720
5,380
86,204
2018
68,541
19,181
6,652
94,374
2016
70.00
0.007
11.00
15.00
2.00
2.00
Not available
100
2017
70.97
0.006
9.85
14.81
1.51
2.07
0.78
100
2018
68.89
0.000
9.99
15.44
2.55
1.96
1.16
100
96
2018 ANNUAL REPORT
complementary indicators
Energy (continued)
Energy intensity
GRI 302-3
There was a reduction in Natura’s energy intensity, because the increase in
absolute energy consumption was lower than the increase in production volume.
Energy intensity
Energy consumption inside the organisation (MWh)
Energy intensity (inside the organisation) (Wh/unit)
Types of energy included in the intensity rate (fuel, electricity, heating, refrigeration,
steam or all)
2017
80,819
190
All
2018
87,722
178
All
Energy consumption outside the organisation (MWh)
5,380
6,652
Energy intensity (outside the organisation) (Wh/unit)
Types of energy included in the intensity rate (fuel, electricity, heating, refrigeration,
steam or all)
44
All
44
All
Total energy consumption by the organisation (MWh)
86,199
94,374
Energy intensity (total for organisation) (Wh/unit)
157.16
146.40
Types of energy included in the intensity rate (fuel, electricity, heating, refrigeration, steam
or all)
All
All
Water
Total water withdrawn by source
GRI 303-1
Water consumption by location (m3)
Natura facilities 1
Other locations 2
Third-party manufacturers 3
Total Brazil 4
2016
191,277
50,224
37,453
2017
245,386
19,084
25,504
2018
276,193
20,093
39,779
278,954
289,974
336,065
1 Facilities operated by Natura: Cajamar, Benevides, NASP, SP DC and Hub
2. DCs operated by third-parties.
3. Third-party manufacturers: Manufacture finished products on behalf of Natura.
4. Actual water consumption in all the facilities listed (measured by local equipment) divided by the number of
units produced in the production facilities (Natura: data extracted from SAP and from third-party suppliers: data
extracted from the monthly report to the Environment area).
Water sources significantly affected
by water withdrawal GRI 303-2
The water sources significantly affected by water withdrawal are the Formação Irati
aquifer, at the Canoas distribution centre (RS), the Cristalino aquifer, in Cajamar, the
Barreiras aquifer, at the Ecoparque, and the public supply network
at the administrative head office in São Paulo.
Proportion of energy intensity inside/outside the organisation
2017
4.32
2018
4.09
97
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2
0
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0
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e
2018 ANNUAL REPORT
complementary indicators
Water (continued)
Total volume of water recycled and reused
GRI 303-3
Due to technical restrictions, there was a decrease in the performance of the current
wastewater treatment plan. This affected treatment quality, leading to an increase
in the solids content in the treated water. This resulted in an overload in the reverse
osmosis system (for the production of reusable water), causing the more rapid saturation
of its filters and reducing recycled water production volume. As a result of the increased
turbidity of the treated water, we are no longer compliant with the parameters established
in law for the use of recycled water for watering gardens. Therefore, use of this water is
restricted to bathrooms.
Waste and effluents
Water discharge (by quality and destination)
and water bodies affected by water discharges and/or runoff
GRI 103-2, 103-3, 306-1, 306-5
In Cajamar, water is discharged in the
Juqueri river (class 3). At the Ecoparque,
water is discharged into a tributary of the
Benfica river (class 2). It should be noted
that these discharges are in compliance with
current legislation and do not jeopardise
the characteristics of these rivers. NASP
produces only domestic effluent, which
is collected via the sewage utility network
(Sabesp). Since there are no metres in place,
the volume of water consumed and the volume
of effluent are considered to be the same.
Water recycled and reused
2016
2017
2018
Total volume of planned and unplanned water discharges
(treated volume)
Volume m3
Total volume of water recycled 1 and reused2 by the organisation
(m3)
63,523
72,072
59,340
Unit
Destination
Water quality,
including
treatment
method
Water that
was reused
by another
organization
Total volume of water withdrawn (m3)
Percentage of water recycled and reused
Percentage of water recovered3 over total volume of water treated
in the wastewater treatment plant
0
41%
41%
166,793
177,421
43%
43%
33%
33%
Cajamar
Reuse and
discharge in
river
Activated
sludge
Ecoparque
Discharge in
river
Wastewater
treatment
plant and filter
garden
No
No
2016
2017
2018
157,101
143,176
146,752
18,369
14,496
62,274
1. Water recycled and water reused in flushing, irrigation and in other industrial processes. Also called reused water.
NASP
2. Reused water is the water dejects from the potable water purification treatment in the plants. The purification
Municipal
network
Not Applicable
No
15,311
29,804
25,711
process generates a deject with a high saline content which is reintroduced into the potable water system, where it
1. The information about the water sources was obtained from the withdrawal permits for the Cajamar facility
is diluted.
and the Canoas Distribution Centre (RS). Information about the aquifers is not provided in the permits for the
3. Water recovered is equivalent to the sum of the recycled and reused water.
distribution centres in Uberlândia (MG), Castanhal (PA), Matias Barbosa (MG) and Jaboatão dos Guararapes (PE).
+
Only the geographical coordinates are supplied. The information about the water source for the Ecoparque was
taken from the Environmental Control Report elaborated for the implantation of the unit. NASP and the Simões
Filho distribution centre are supplied by public utilities. GRI 303-2
98
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o
f
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2
0
5
0
t
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c
o
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p
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y
a
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i
i
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d
c
a
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o
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o
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p
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t
a
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y
r
e
p
o
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e
2018 ANNUAL REPORT
complementary indicators
Waste and effluents (continued)
Treated effluent in
Cajamar (mg/l)
Legal parameter
BOD1
COD2
Oils and grease
60
150
120
Treated effluent
Ecoparque (mg/l)
Legal parameter
BOD1
COD2
-
-
Oils and grease
<5
1. BOD: Biological oxygen demand.
2. COD: Chemical oxygen demand.
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w
o
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e
2
0
5
0
t
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c
o
m
p
a
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y
a
b
o
u
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i
i
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d
c
a
t
o
r
s
c
o
m
p
l
e
m
e
n
t
a
r
y
r
e
p
o
r
t
a
b
o
u
t
t
h
e
r
e
p
o
r
t
a
s
s
u
r
a
n
c
e
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
2018
9.73
62.72
16.10
2018
6.6
54.9
5.00
Waste by type and disposal method
GRI 306-2
In 2018, there was an 11% reduction in waste generation, even though production
volume increased. We also improved the hazardous waste usage rate, with a 51%
increase in the recovery of this type of waste by sending it for co-processing.
Disposal of hazardous waste – class I (%)1
Destination
% recovery (including energy recovery)
% incineration (mass burn)
% landfill
2016
71.09
28.91
0.00
2017
46.30
53.70
0.00
2018
96.77
3.05
0.181
1. Disposal determined and controlled by the Natura Environment department, in accordance with the type of
waste. The sorting and transportation is undertaken by a service provider installed in our units. Final disposal is
undertaken in accordance with legal requirements.
2. Disposed of in landfills appropriate for this type of waste.
Disposal of non-hazardous waste (%)
Destination
% recycling1
% incineration (mass burn)
% landfill
2016
91.00
1.87
7.16
2017
91.25
3.15
5.60
2018
94.34
0.25
5.40
1. Composting, co-processing and recycling processes are all considered to be types of waste recycling.
99
2018 ANNUAL REPORT
complementary indicators
Waste and effluents (continuation)
Indirect waste (t)
Total class I waste – Natura facilities1
Total non-hazardous waste – Natura facilities1
Waste from other Natura facilities2
Waste at Natura third-party manufacturers3
2016
3,933
9,601
1,162
1,131
2017
5,062
7,677
1,135
866
2018
Significant spills GRI 306-3
1,396
9,294
1,326
1,037
There were no significant spills or accidents that caused any
significant impact in 2018.
Transportation of hazardous waste GRI 306-4
Up until 2017, the effluent generated
at the Ecoparque was removed for
external treatment.
treated at the plant and it is no longer
necessary to transport this type of waste.
Total waste
15,827
14,740
13,054
1. Refers to the facilities at Cajamar, Ecoparque, NASP+SP DC and the Itupeva Hub. In this indicator
Natura does not report the waste generated in civil construction works (rubble) undertaken at its facilities.
2. Refers to the distribution centres, with the exception of the São Paulo centre.
3. This refers to the six largest third-party manufacturers.
In 2018, with the wastewater treatment
plant in full operation, all the effluent is now
It should be noted that Natura does
not import, export or transport waste
internationally.
Waste per unit produced (g/unit produced)
Total waste per unit produced1
2016
22.80
2017
25.93
2018
22.06
1. The waste/unit produced indicator is the sum of all Natura’s direct and indirect waste, in grams, divided by the
total of units produced directly and indirectly by Natura.
Total weight of waste (t)
Hazardous waste transported1
2016
Not available
2017
5,062
2018
1,626
1. Total hazardous waste transported refers to hazardous waste in Natura facilities.
Reporting of this information was initiated in 2017.
100
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a
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a
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i
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2
0
5
0
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2018 ANNUAL REPORT
complementary indicators
Biodiversity
Operating units within or adjacent to
protected areas or areas with a high incidence of biodiversity
GRI 304-1
Classification1
Cajamar
Ecoparque
NASP
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
Own area
Own area
Rented area
Position of operating unit in
relation to protected area
Permanent protection area
inside the unit (areas close to
Juqueri River and a spring)
Type of operation
Administrative and industrial
cosmetics production
Permanent protection area
inside the unit (areas close
to a tributary of the Benfica
River and a spring)
Administrative and industrial
production of basic soap
mass and toilet soap manu-
facture
ZPI (primarily an industrial
zone)
Administrative and logistics
with warehousing and
distribution of cosmetics
Scale of operating
unit (m2)
646,000 m2
1,729.000 m2
111,700 m2
1. Information about the value of biodiversity and the type of ecosystem in the areas is not available.
Species included on the IUCN red list and national conservation lists
with habitats located in areas affected by the
organisation’s operations
GRI 304-4
Brazilian biodiversity vegetable species
that are used by Natura and are on
the red lists were taken into account. In
addition to conservation projects, the
company employs practices to promote
the sustainable use of these species. We
also prioritise non-timber related forestry
stewardship with techniques to enrich
production areas through the adoption of
agroforestry systems and agroecological
production, which contribute to the
conservation of natural resources and
species threatened with extinction. In 2018,
Natura was granted international UEBT
(Union for Ethical BioTrade) certification,
which attests to the traceability and good
production practices employed for these raw
materials (further information on page 48).
Regarding fauna, there is one species
threatened with extinction catalogued
in the area of the Ecoparque – Ortalis
superciliaris (Buff-browed chachalaca),
according to monitoring programme
reports from 2017 and 2018. There are
also four species of fauna classified as
vulnerable at the unit: Thamnophilus
aethiops (White-shouldered antshrike),
Thamnomanes caesius (Cinereous
antshrike), Ramphastos tucanus (White-
throated toucan) and Ramphastos
vitellinus (Channel-billed toucan).
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2
0
5
0
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o
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d
c
a
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a
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r
e
p
o
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a
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s
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e
101
2018 ANNUAL REPORT
complementary indicators
Biodiversity (continued)
Natura Beauty Consultants
2018
Red lists and criteria for species threatened with
extinction
Training
For the 2018 highlights, see page 18.
Species of Brazilian biodiversity present in Natura products
Ucuuba – Virola surinamensis
Brazil nut – Bertholletia excelsa
Yerba mate – Ilex paraguariensis
Andiroba – Carapa guianensis
Priprioca – Cyperus articulatus
MMA1
Vulnerable
Vulnerable
Not listed
Not listed
Not listed
IUCN1
In danger
Vulnerable
Number of consultants in training in Brazil
(thousands)
Near threatened
New consultants
Least concern
Initial training
Least concern
Total consultants trained by subject
Percentage of single consultants trained (penetration)
2016
554.0
230.0
397.0
39%
2017
460.0
180.0
184.0
31%
2018
408.2
127.7
178.9
25%
1. MMA (Brazilian Ministry of the Environment) and IUCN (International Union for Conservation of Nature).
Total training sessions conducted
1,789.0
1,920.0
2,895.5
Environmental Compliance
Non-compliance with laws and regulations
GRI 103-2, 103-3, 307-1
In 2018, there were no significant fines or non-monetary sanctions
related to environmental questions. Natura considers significant fines to be ones
in excess of R$ 5 million or that put the company’s image at
risk (medium to high).
Number of consultants in training in
the Operations in Latin America
(unit)
Argentina
Chile
Colombia
Peru
Total Latin America
102
2016
10,389
5,233
7,035
12,582
35,239
2017
9,272
4,584
8,426
10,291
32,573
2018
9,826
3,955
5,653
5,643
25,077
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2018 ANNUAL REPORT
complementary indicators
Suppliers
Negative environmental impacts in the supply chain
and measures taken GRI 308-2
The percentage of suppliers that are disqualified is relatively low considering real
risks. It corresponds to 21%, most of whom are freight operators. Other risks
are treated as potential ones.
Suppliers provoking negative environmental impacts1
2016
2017
2018
Number of suppliers screened for
environmental impacts
Number of suppliers identified as provoking actual or potential
significant environmental impacts
338
120
Actual or potential significant negative environmental impacts
identified in the supplier chain
Not available
Number of suppliers identified as causing actual or potential
significant negative environmental impacts, with whom
improvements were agreed on as a result of assessment
Percentage of suppliers identified as causing actual or potential
significant negative environmental impacts, with whom
improvements were agreed on as a result of assessment
Number of suppliers identified as causing
actual or potential significant negative environmental impacts,
with whom relations were terminated as a result of assessment
Percentage of suppliers identified as
provoking actual or potential significant negative environmental
impacts, with whom relations were terminated as a result of the
assessment.
424
399
600
165
375
144
205
36
53
44.17%
41.35%
25.00%
0
0
0
0.00%
0.00%
0.00%
1. Since 2017, the data have taken global information into account (Brazil and International Operations).
103
Negative social impacts in the supplier chain
and measures taken
GRI 414-2
Suppliers provoking negative environmental impacts1
2016
2017
2018
Number of suppliers screened for social impacts
Number of suppliers identified as provoking actual or potential
significant social impacts
338
130
Actual or potential significant negative social impacts identified in
the supplier chain
Not available
Number of suppliers identified as causing actual or potential
significant negative social impacts, with whom improvements were
agreed on as a result of assessment
51
440
147
205
52
375
165
246
52
Percentage of suppliers identified as causing actual or potential
significant negative social impacts, with whom improvements were
agreed on as a result of assessment
Number of suppliers identified as causing actual or potential
significant negative social impacts, with whom relations were
terminated as a result of assessment
Percentage of suppliers identified as causing actual or potential
significant negative social impacts, with whom relations were termi-
nated as a result of assessment.
39.23%
35.37%
31.52%
0
0
0
0.00%
0.00%
0.00%
1. Since 2017, the data have taken global information into account
(Brazil and International Operations).
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2018 ANNUAL REPORT
complementary indicators
Society
Consumer health and safety
Incidents of non-compliance concerning impacts caused by products and services on
the health and safety of consumers and product and service information and labelling
GRI 416-2, 417-2
In 2018, 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, to product
labelling or to putting customer health
and safety at risk.
Support and sponsorship actions
GRI 203-1
In 2018, Natura maintained its focus on
valuing Brazilian music by means of
the Natura Musical Programme, which
completed 14 years of existence and to date
has impacted more than 260,000 people.
In the fashion world, we were present at the
first edition of the 2018 São Paulo Fashion
Week. We stopped investing in this front to
prioritise our strategy of developing music
and culture.
Another highlight in 2018 was the expansion
of investments in organisations that
connect us with society and help us to
build collaboration networks and spaces
for dialogue around ethics, sustainability,
innovation and diversity. We support the
events Sustainable Brands, related to
sustainability, and Festival Path, focused on
innovation and creativity. We also continued
to support the Ethos Conference, which
had its 20th anniversary in 2018, and the
second edition of the Ethos Conference in
the Amazon, held in Belém (Pará). At these
events, we prioritise our work aimed at
fostering female entrepreneur networks in
the Amazon region. With the consolidation
of the Natura &Co group, we stepped up
our investments in associations having
global penetration, such as the Ellen
MacArthur Foundation, the World Business
Council for Sustainable Development
(WBCSD) and the International Chamber of
Commerce (ICC).
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Natura Investments (R$ thousands)
Sustainable development
Brazilian music
Fashion
Reinforcement of civil society organizations
Total private funds
Investments via tax incentives (R$ thousands)
Brazilian music
Total tax incentive funds
Total private and tax incentive funds
2016
337
1,879
2,610
603
5,429
2016
3,175
3,175
8,604
2017
0
6,706
2,845
552
10,103
2017
2,751
2,751
12,854
2018
0
7,212
0
818
7,212
2018
3,710
3,710
10,922
GRI 203-1 Investments in infrastructure and services in
surrounding communities (R$ thousands)
Natura funds
Crer Para Ver funds
2016
2017
2018
354
556
280
847
265
767
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2018 ANNUAL REPORT
complementary indicators
Leadership and social influence
GRI 102-12, 102-13, 203-1
manifesto on awareness of the importance
of our planet and all the elements it offers
us. In the last Natura Dialogue, Alain
de Botton, founder and CEO of the The
School of Life, talked about love and
emotional intelligence.
In June 2018, we were granted international
UEBT (Union for Ethical BioTrade)
certification, which attests to the ethical
sourcing of natural ingredients for
Natura Ekos line products. The new seal
underscores the three pillars that have
guided the company’s businesses for the
last two decades: fair trade, conservation
of Brazilian biodiversity and community
relations based on trust. Worthy of note is
the fact that Natura is a founding member
of the UEBT. Further information about this
certification on page 48.
the United Nations Organisation (UNO)
headquarters in New York (United States).
This objective of this forum is to promote
businesses and partnerships that
contribute towards the achievement of the
Sustainable Development Goals (SDGs).
During the event, a keynote was Natura’s
report on its actions to combat climate
change. Marques was also present at the
The Brazil-U.S. Business Council initiative,
in the US Congress, where he affirmed
the Natura &Co group’s commitment to
generating a positive impact in multiple
geographies.
We participate in discussions organised
by the B Corp System and the Movimento
Mulher 360º. We also participate in the
applied tax studies group Getap (Grupo de
Estudos Tributários Aplicados) and the CCiF
(Centro de Cidadania Fiscal). In the Brazilian
industry association CNI (Confederação
Nacional da Indústria), we are active in the
environment, tax and overseas trade forums.
In 2018, the executive chairman of the
Natura &Co group, Roberto Marques, took
part in the SDG Business Forum, held at
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 CNI’s
MEI (Mobilização Empresarial pela
Inovação) Business Leaders Committee.
He was also on the Economic and Social
Development Council, a group of civil
society representatives that directly
advised the Brazilian Presidency of the
Republic until the end of 2018. 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 the Instituto Ethos.
In 2018, Leal also joined the UNO Global
Compact board, the highest governance
body responsible for defining strategies
and policies for the initiative.
To foster interaction with society, we
organise the series Natura Dialogues –
#OMundo+Bonito (#+BeautifulWorld),
which sought to engage society, in
particular young people, in debating
relevant contemporary questions, such as
empathy, sustainability and love. In the first
meeting of the series, the historian Roman
Krznaric, founder of the The School of Life
in London, and one the most important
thinkers in contemporary Britain, spoke
about empathy. In the second talk of the
year, the trend guru Lidewij Edelkoort
talked about sustainability. Having a strong
link with the roots of Brazilian culture,
Edelkoort is the idealiser of the magazine
Bloom Brasil, the latest edition of which “A
Terra Chama” (The Earth Calls) presents a
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2018 ANNUAL REPORT
About the report
106
2018 ANNUAL REPORT
about the report / summary of gri disclosures
About the report
Natura has disclosed its economic-
financial and socioenvironmental
results in accordance with Global
Reporting Initiative (GRI) methodology
on an annual basis since 2001. As in
the previous edition (2017), the 2018
Natura Annual Report was prepared in
accordance with the Comprehensive
option of the GRI Standards. The data
reported refer to the period from January
1 to December 31, 2018, and the content
was submitted for external verification by
KPMG. GRI 102-50, 102-51, 102-52,
102,54, 102-56
The results disclosure process is
monitored by the Vice President of
Marketing, Innovation and Sustainability
and by the office of the CEO of the
company through the Corporate Affairs
area. The publication is based on the
commitments assumed in our 2050
Sustainability Vision and our materiality
matrix, elaborated in 2014 (the material
topics for company management are
described ahead). We also understand our
Annual Report to be a communication of
the company’s progress in relation to the
principles of the Global Compact, a United
Nations Organisation (UNO) initiative
aimed at driving sustainable growth and
citizenship worldwide, to which we are
signatories. GRI 102-32, 102-46
The information contained in the Annual
Report, in particular that addressing
socioenvironmental topics, continues to
refer primarily to Natura’s activities in
Brazil and Latin America, where the major
part of our operation is still concentrated.
The consolidated financial data for the
Natura &Co group, of which Aesop and
The Body Shop are part, are disclosed in
the organisation’s Management Report,
the 2018 edition of which was published
in the February 22nd, 2019 edition of the
newspaper Valor Econômico. There is
also a printed report presenting the 2018
highlights of the three companies that
make up the group. We continue to assess
how to report the group’s economic and
socioenvironmental performance on an
integrated basis. GRI 102-45, 102-48
As in previous years, the GRI content
summary of the 2018 Natura Annual Report
only presents the most relevant (material)
indicators for the integrated management
of the business. We also disclose some
complementary indicators - drawn from the
GRI and from Natura itself –, which are to
be found in a specific section at the end of
this publication. We believe that this enables
us to fulfil our commitment to transparency
and accountability in relation to the
company’s stakeholders. It should be noted
that any significant changes compared
with the data reported in previous years
or alterations in the calculation bases and
measurement techniques are informed
throughout the content of the report.
GRI 102-49
Further information about the Annual
Report is available via the email
relatorioanual@natura.net. We are
also open to any comments about our
performance and our management
practices via the social networks and the
face-to-face meetings that we organise
with our different stakeholder groups.
GRI 102-53
Materiality matrix
GRI 102-40, 102-42, 102-47
The company maintains dialogues with
its main stakeholder groups to define
topics that are critical for company
management. In the most recent process,
conducted in 2014, six topics were defined:
water, education for the development
of employees and consultants, climate
change, waste, transparency, product
origin and valuing social biodiversity.
Initially more than 20 topics were
selected based on the company’s 2050
Sustainability Vision and its ambitions
for 2020, as well as on the consultation
of industry documents. Using this list
as a basis, we consulted the priority
stakeholder groups for Natura in Brazil
and in the International Operations: co-
workers (including leaders), consultants,
customers and suppliers (including
the supplier communities). We also
incorporated considerations made by some
shareholders and by representatives of
surrounding 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 from different
stakeholder groups.
Although there has not been a new full
review of materiality, we understood that it
was necessary to include two other topics
identified as priorities for the business:
diversity and equality and the generation
of work and income. These questions
were formally integrated into our base of
material topics in 2018. They had already
been addressed in our Sustainability Vision
and gained even greater relevance in the
ongoing dialogues with our stakeholder
groups and in the global forums in which we
participate (see the full list of Natura’s public
commitments and partnerships on page 74).
There follows a description of the
company’s material topics and their
main impacts.
107
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
Materiality GRI 102-43, 102-44, 102-46, 102-47, 103-1
Topic
Water
Description
Where it occurs GRI 103-1
Related aspects and indicators
Correlation with the SDGs
Relative reduction in consumption and
pollution of water throughout the value chain
and neutralization of water impact.
_Water sources and environment
_Supplier communities
_Operational units
_Society in general
_Consumers (use and post-consumer disposal)
_Water
_Effluents and waste
GRI 303-1, 303-2, 303-3, 306-1 and 306-5
SDG 6. Clean water and sanitation
Diversity and equality
Progress in promoting equality in the work
environment, in particular concerning gender and
women’s participation in leadership
_Employees
Education for the development of
co-workers and consultants
Development of the consultant network and
co-workers, including measures to promote
improvements in public
education.
_Natura Beauty Consultants
_Employees
_Instituto Natura
_Society in general
Generation of work and income
Support for the development of Natura consultants
and supplier communities
_Natura Beauty Consultants
_Supplier communities
Reduction of greenhouse gas emissions
throughout the value chain and neutralization by
means of projects that incorporate social benefits.
_Suppliers
_Freight haulage operators
_Operational units
_Environment
Climate change
Waste
_Diversity and equality of opportunities
GRI 405-1, 405-2
_Indirect economic impacts
SDG 5. Gender equality
SDG 8. Decent work and economic
growth
SDG 10. Reduction in inequalities
_Training and education
SDG 4. Quality education
GRI 203-1, 203-2, 404-1 and 404-3
_Indirect economic impacts;
GRI 203-1, 203-2
_Economic performance
_Emissions.
SDG 1. Eradication of poverty
SDG 5. Gender equality
SDG 8. Decent work and economic
growth
SDG 10. Reduction in inequalities
GRI 201-2, 305-1, 305-2, 305-3, 305-4, 305-5
and 305-6
SDG 13. Combating climate change
Development of packaging that has a lower
environmental impact and
promotes conscious consumption.
_Product conception
_Operational units (zero dejects)
_Freight haulage operators
_Recyclable material
cooperatives
_Consumers (post-consumer disposal)
_Environment
_Materials
_Effluents and waste
_Products and services
GRI 301-2, 306-2 and 301-3
SDG 12. Responsible consumption and production
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
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
Transparency and product origin
Expanding visibility of business practices and
product origin.
Valuing social biodiversity
Promoting sustainable businesses by using
products and services primarily from
the Pan- Amazon region.
_Supplier chain
_Supplier communities
_Operational units
_Corporate management
_Consumers
_Product conception
_Supplier communities
_Procurement policies
_Consumers
_Pan-Amazon region
_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 impacts;
_Biodiversity
_Local communities
_Child labour
_Forced or slave labour
_Supplier assessment for human rights
_Grievance and complaint mechanisms concerning
human rights
_Products and services
GRI 201-1, 201-2, 203-1, 203-2, 304-1, 413-1,
408-1, 409-1, 414-1 and 103-2
SDG 12. Responsible consumption and production
SDG 15. Life on land
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109
2018 ANNUAL REPORT
about the report / summary of gri disclosures
Summary of GRI Disclosures
GRI organizational
mark
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 101: Foundation 2016
No disclosures
General disclosures
Organizational profile
GRI Standard
Disclosure
Page/URL
GRI 102: General disclosures 2016
102-1 Name of organization
102 -2 Activities, brands, products and services
102-3 Location of headquarters
102-4 Location of operations
102 -5 Nature of ownership and legal form
102-6 Markets served
102 -7 Scale of organization
102 -8 Information about employees and workers
-
9
9
9
9
10
9
9
9
102-9 Supplier chain
57-58
102 -10 Significant changes in the organization
and its supplier chain
There were no significant changes in terms of
location, operation and supplier chain.
102-11 Precautionary principle or approach
102-12 Initiatives developed externally
102-13 Participation in associations
28
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105
Omission
Sustainable Development Goals
Global Compact
8
Strategy
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 102: General disclosures 2016
102 -14 Declaration from senior decision maker
102 -15 Main impacts, risks and opportunities
5, 7
77-78
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
Ethics and integrity
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 102: General disclosures 2016
102 -16 Values, principles, standards and norms of behaviour
102 -17 Mechanisms for advice and concerns about ethics
4
79-80
16
16
Governance
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 102: General disclosures 2016
102-18 Governance structure
102-19 Delegating authority
102-20 Executive-level responsibility for economic,
environmental and social topics
102 -21 Consulting stakeholders on economic, environmental
and social topics
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
102-25 Conflicts of interest
16
5, 16
16
5, 16
16
74
74
74
74
74-75
74
The selection of board members takes into account their
qualifications, complementary executive experience,
identification with Natura’s business principles and the
absence of conflicts of interest. The term of office is
one year, which may be renewed upon approval by 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. Further
information on page 74.
We value best corporate governance practices. All
decisions regarding the operations are submitted to
management, in accordance with the competencies
established in the company bylaws. In the event of a
potential conflict of interest between a question 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 have no connection
with the matter in question. Further information may be
found in item 16.3 of our Reference Form (https://natu.
infoinvest.com.br/enu/6581/2017%20-%20FR%20_%20
English_V24.pdf )
111
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 102: General disclosures 2016
102 -26 Role of highest governance body in setting purpose,
values and strategy
102-27 Collective knowledge of
highest governance body
102 -28 Evaluating the highest governance body’s
performance
102-29 Identifying and generating economic,
environmental and social impacts
It is the function of the Board of Directors to
determine and to monitor the implementation
of company strategy and to evaluate the
performance of the CEO and the Executive
Committee periodically. 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 projects and investment programs,
risk management and profit share plan payouts to
Natura employees. Read more on page 74.
76
76
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, which in turn are generated
by stakeholder consultation processes.
4
16
102 -30 Effectiveness of risk management processes
77
102 -31 Review of economic, environmental and social topics
102 -32 Highest governance body’s role in sustainability
reporting
102-33 Communicating critical concerns
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. However,
there is no pre-established interval for monitoring
by the board. Read more on page 77.
107
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 projects and investment programs,
risk management and profit share plan payouts to
Natura employees.
112
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 102: General disclosures 2016
102 -34 Nature and total number of critical concerns
102-35 Remuneration policies
102 -36 Processes for determining remuneration
102-37 Stakeholders’ involvement in remuneration
102-38 Annual total compensation ratio
102 -39 Percentage increase in annual total compensation ratio
Stakeholder engagement
The critical concerns that are not
described are related to strategic
information which is the exclusive
purview of senior management and
the Board of Directors.
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 projects and investment programs,
risk management and profit share plan payouts to
Natura employees. Read more on page 77.
Our senior management remuneration policy
and practices are set forth in item 13 of our
Reference Form (https://natu.infoinvest.com.br/
enu/6581/2017%20-%20FR%20_%20English_
V24.pdf )
Our senior management remuneration policy
and practices are set forth in item 13 of our
Reference Form. (https://natu.infoinvest.com.br/
enu/6581/2017%20-%20FR%20_%20English_
V24.pdf )
Our senior management remuneration policy
and practices are set forth in item 13 of our
Reference Form. (https://natu.infoinvest.com.br/
enu/6581/2017%20-%20FR%20_%20English_
V24.pdf )
-
-
Natura opted not to disclose
this information because it
considers remuneration data to be
confidential.
Natura does not disclose
this information because it is
considered to be confidential.
16
6
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 102: General disclosures 2016
102 -40 List of stakeholder groups
108
102-41 Collective bargaining agreements
All employees are covered by collective
agreements, which are coordinated by the Human
Resources area and comply with the standards
and limits set forth in local legislation.
8
102 -42 Identifying and selecting stakeholders
108
102 -43 Approach to stakeholder engagement
47, 57, 64, 89, 108-109
102 -44 Key topics and concerns raised
47, 57, 64, 89, 108-109
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113
2018 ANNUAL REPORT
about the report / summary of gri disclosures
Reporting practice
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 102: General disclosures 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
102-55 GRI Content Index
102-56 External assurance
107
107-108
107-108
107
107
107
107
107
107
107
110-122
107
Material topics
Economic performance
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: 2016 Management approach
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
201 -1 Direct economic value generated and distributed
201 -2 Financial implications and other risks and opportunities
due to climate change
GRI 201: Economic performance 2016
Indirect economic impacts
108
11
11
12
78
1, 5, 8, 16
2, 5, 7, 8, 9
13
7, 8, 9
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: 2016 Management approach
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
108
45, 47, 61
45, 47, 61
114
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 203: Indirect economic
impacts 2016
Procurement practices
203 -1 Infrastructure investments and services supported
45, 47, 49, 55, 61-62, 104-105
203 -2 Significant indirect economic impacts
16, 47, 49
2, 5, 7, 9, 11
1, 2, 3, 8, 10, 17
1, 7, 8, 9
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 204: Procurement practices 2016
204 -1 Proportion of spending on local suppliers in important
units of the operation
Anti-corruption
GRI Standard
Disclosure
Page/URL
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 205: Anti-corruption 2016
205 -1 Operations assessed for risks related to corruption
205 -2 Communication and training about anti-corruption
policies and procedures
205 -3 Confirmed incidents of corruption and actions taken
108
56
56
56
108
91
91
91
92
93
12
Omission
Sustainable Development Goals
Global Compact
16
16
16
At Natura, incidents that are con-
firmed and investigated
are dealt with
in confidentiality
10
10
10
Anti-competitive behaviour
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 206: Anti-competitive behaviour
2016
206 -1 Legal actions for anti-competitive behaviour, anti-trust,
and monopoly practices
108
94
94
94
115
16
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
Materials
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 301: Materials 2016
301 -2 Recycled input materials used
301 -3 Reclaimed products and their packaging materials
108
43-44
43-44
43
44
8, 12
8, 12
7, 8, 9
7, 8, 9
Energy
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 103: Management approach 2016
302 -1 Energy consumption within the organization
302 -2 Energy consumption outside of the organization
302-3 Energy intensity
Water
GRI Standard
Disclosure
Page/URL
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 303: Water 2016
303-1 Total water withdrawal by source
303 -2 Management of water discharge related impacts
303 -3 Percentage and total volume of water
recycled and reused
108
95
95
95
95
97
108
44
44
44, 97
97
44, 98
116
7, 8, 12, 13
7, 8, 12, 13
7, 8, 12, 13
7, 8, 9
7, 8, 9
7, 8, 9
Omission
Sustainable Development Goals
Global Compact
7, 8, 9
7, 8, 9
7, 8, 9
6
6
6, 8, 12
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
Biodiversity
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 304: Biodiversity 2016
304 -1 Operational sites owned, leased, managed in, or adjacent to, protected
areas and areas of high biodiversity value outside protected areas
304 -2 Significant impacts of activities, products, and services on biodiversity
304 -4 IUCN Red List species and national conservation list species with habitats
in areas affected by operations
108
45
45
101
45-46
101
6, 14, 15
6, 14, 14
6, 14, 15
7, 8, 9
7, 8, 9
7, 8, 9
Emissions
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -2 Management approach and its components
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 305: Emissions 2016
305 -1 Direct (Scope 1) GHG emissions
305 -2 Indirect (Scope 2) GHG emissions
305 -3 Other indirect (Scope 3) GHG emissions
305 -4 GHG emissions intensity
305 -5 Reduction in GHG emissions
305 -6 Emissions of ozone-depleting substances (ODS)
305 -7 NOx, SOx and other significant atmospheric emissions
108
38
38
39-40
39-40
39-40
39
41-42
94
94
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
7, 8, 9
7, 8, 9
7, 8, 9
7, 8, 9
7, 8, 9
7, 8, 9
7, 8, 9
Effluents and waste
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
108
98
98
117
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
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
Environmental Compliance
GRI Standard
Disclosure
Page/URL
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 307: Environmental compliance
2016
307-1 Non-compliance with environmental laws and regulations
Supplier environmental assessment
98
99
100
100
98
108
102
102
102
3, 6, 12, 14
3, 6, 12
3, 6, 12, 14, 15
3, 12
6, 15
7, 8, 9
7, 8, 9
7, 8, 9
7, 8, 9
7, 8, 9
Omission
Sustainable Development Goals
Global Compact
16
7, 8, 9
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 308: Supplier environmental
assessment 2016
308 -1 New suppliers that were screened using environmental
criteria
308 -2 Negative environmental impacts in the supply chain and
actions taken
108
57-58
57-58
58
103
7, 8, 9
Employment
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
108
59, 87
59, 87
118
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about the report / summary of gri disclosures
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 401: Employment 2016
401 -1 New employee hires and employee turnover
401-3 Parental leave
Occupational health and safety
GRI Standard
Disclosure
Page/URL
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 403: Occupational health and
safety 2016
403 -2 Types of injury and rates of injury, occupational
diseases, lost days, and absenteeism, and number of work-
related fatalities
Training and education
87
59
108
89
89
89
5.8
5, 8
Omission
Sustainable Development Goals
Global Compact
3, 8
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 404: Training and education 2016
404 -1 Average hours of training per year per employee
108
65
65
65-66
404 -2 Programs for upgrading employee skills and transition
assistance programs
For layoffs resulting from restructuring we provide
employees with a special package to facilitate
career transition. Read more on pages 65 and 88.
404 -3 Percentage of employees receiving regular
performance and career development reviews
Diversity and equal opportunity
GRI Standard
Disclosure
Page/URL
Diversity and equal opportunity
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
88
108
59
59
119
4, 5, 8
8
5, 8
Omission
Sustainable Development Goals
Global Compact
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0
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 405: Diversity and equal opportu-
nity 2016
405 -1 Diversity of governance bodies and employees
There is no information available in the internal
controls about black people or disabled people
on the Board of Directors. Read more on pages
59 and 60.
405-2 Ratio of basic salary and remuneration of women to men
85
5, 8
5, 8, 10
6
6
Non-discrimination
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 406: Non-discrimination 2016
406 -1 Incidents of discrimination and corrective actions taken
Freedom of association and collective bargaining
GRI Standard
Disclosure
Page/URL
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 407: Freedom of association and
collective bargaining 2016
407 -1 Operations and suppliers in which the right to freedom of
association and collective bargaining may be at risk
Child labour
GRI Standard
Disclosure
Page/URL
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 408: Child labour 2016
408 -1 Operations and suppliers at significant risk for incidents
of child labour
108
94
94
94
108
90
90
90
108
93
93
93
120
120
5, 8, 16
6
Omission
Sustainable Development Goals
Global Compact
8
3, 6
Omission
Sustainable Development Goals
Global Compact
1, 5
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
Forced or compulsory labour
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 409: Forced or compulsory labour
2016
409 -1 Operations and suppliers at significant risk for incidents of forced or
compulsory labour
Rights of indigenous peoples
108
93
93
93
8
1, 5
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
411 -1 Incidents of violations involving rights of indigenous peoples
GRI 411: Rights of indigenous peoples
2016
Local communities
108
93
93
93
2
1, 2
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 413: Local communities 2016
413-1 Operations with local community engagement,
impact assessments and development programmes
108
47
47
47, 56
413-2 Operations with significant actual and potential negative impacts
on local communities
47, 50-51, 57, 63
Supplier social assessment
1, 2
11
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 414: Supplier social assessment
2016
414 -1 New suppliers that were screened using social criteria
414 -2 Negative social impacts in the supply chain and actions taken
108
48
48
48, 58
103
121
1, 2, 4, 5
1, 2, 4, 5
5, 8, 16
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2018 ANNUAL REPORT
about the report / summary of gri disclosures
Public policy
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 415: Public policy 2016
415-1 Political contributions
Consumer health and safety
108
93
93
93
16
10
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 416: Customer health and safety
2016
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
108
28
28
28
104
16
7, 8, 9
7, 8, 9
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 417: Marketing and labelling 2016
417-1 Requirements for product and service information and labelling
417-2 Incidents of non-compliance concerning product and service information
and labelling
Socioeconomic compliance
108
28
28
24, 28
104
12, 16
16
7, 8, 9
7, 8, 9
GRI Standard
Disclosure
Page/URL
Omission
Sustainable Development Goals
Global Compact
GRI 103: Management approach 2016
103 -1 Explanation of the material topic and its boundary
103 -2 Management approach and its components
103 -3 Evaluation of management approach
GRI 419: Socioeconomic compliance
2016
419-1 Non-compliance with laws and regulations in the social and economic area
108
94
94
94
122
16
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2018 ANNUAL REPORT
assurance report
Sustainability Assurance Manual - KSAM
Global Reporting Initiative - GRI (GRI-Standards)
KPMG
Standards
Global Reporting Initiative – GRI (GRI-Standards)
Standards
Global Reporting Initiative - GRI (GRI-Standards);
Standards
Standards
Global Reporting Initiative - GRI (GRI-Standards)
KSAM
KPMG Sustainability Assurance Manual -
KPMG Financial Risk & Actuarial Services Ltda., a Brazilian limited liability
company and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a
Swiss entity.
KPMG Financial Risk & Actuarial Services Ltda., a Brazilian limited liability
company and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a
Swiss entity.
123
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a
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s
u
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a
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c
e
2018 ANNUAL REPORT
assurance report
Global Reporting Initiative - GRI (GRI-Standards),
Standards
KPMG Financial Risk & Actuarial Services Ltda., a Brazilian limited liability
company and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a
Swiss entity.
124
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2018 ANNUAL REPORT
Credits
NATURA
DIRECTOR OF CORPORATE AFFAIRS
Marcelo Bicalho Behar
COMMUNICATION MANAGER
Milena Buosi
ANNUAL REPORT COORDINATOR
Fábio Peixoto
ART EDITING
Carolina Almeida
REPORTING
Juliana Bordignon
MARKETING,
INNOVATION AND SUSTAINABILITY
SUSTAINABILITY
Luciana Villa Nova and Keyvan Macedo
FINANCE AND INVESTOR
RELATIONS
FINANCIAL INFORMATION
Elisa Fortino, Marcelo Issamu Furukawa,
Walter Ribeiro da Costa Junior
INVESTOR RELATIONS
Viviane Behar, Luiz Palhares,
Ana Carolina Pires Bastos
PRODUCTION OF THIS EDITION
ART DIRECTION AND GRAPHIC DESIGN
Manuela Novais
COPY AND SUSTAINABILITY CONSULTING
Report Sustentabilidade
EDITING
Álvaro Almeida and Michele Silva
REPORTING
Talita Fusco
PROJECT AND RELATIONSHIP MANAGEMENT
Ana Souza
GRI CONSULTING
Juliana Fullmann and Karina Simão
CRITICAL ANALYSIS OF INDICATORS
LINKED WITH THE SUSTAINABILITY VISION
Gestão Samaúma
Karina Baratella
PHOTOGRAPHY
Paulo Vitale (pages 5, 7 and 75)
Natura Archives
INFOGRAPHICS
Bruno Algarve (infograph)
Bruna Foltran (tables and graphs)
TRANSLATION TO ENGLISH
Raymond Maddock
125
2018 ANNUAL REPORT