Natura &Co Holding S.A.
Annual Report 2021

Plain-text annual report

2021 annual report 2021 annual report 01 — Our group (05) 02 — Our businesses (33) 03 — Our launches (63) 04 — Our Commitment to Life (75) 05 — Sustainability data (101) Our group Natura &Co annual report – 2021 Our group 6 7 We are proud to be the world’s largest B Corp™. We are Avon, Natura, The Body Shop, and Aesop. We are Natura &Co. We are a global purpose driven group made up of four iconic beauty companies. Natura &Co operates in more than 100 countries, with over 3,700 stores, 35,000 employees and 7.7* million Representatives and Consultants. We believe in challenging the status quo in order to promote real positive economic, social, and environmental impact. We believe in the power of cooperation, co-creation, and collaboration. * As of December 31, 2021 Natura &Co annual report – 2021 Our group 8 9 Purpose and aspiration Our purpose To nurture beauty and relationships for a better way of living and doing business. Our aspiration We will dare to innovate to promote positive economic, social, and environmental impact – and become the best beauty company FOR the world. 10 11 Our brands Founded in 1886, Avon connects people in more than 70 countries, using the power of beauty to transform women’s lives for the better. 5.6 million Representatives across the world sell its iconic products, building their own beauty businesses. Avon believes a better world for women is a better world for all, and is committed to acting for gender Founded in 1969, Natura is a Brazilian multinational in the cosmetics and personal care segment, a leader in direct sales in Brazil, and recognized for protecting the Amazon social biodiversity through its sustainable business model. Founded in 1976, The Body Shop became a certified B Corp™ in 2019. The Body Shop seeks to make positive change in the world by offering high-quality, naturally inspired products produced ethically and sustainably and cam- paigns for social and environmental justice around the world. Having pioneered the philosophy that business Established in 1987 in Melbourne, Australia, Aesop has since expanded to 28 markets around the globe, with each of its 269 signature stores having its own unique design. can be a force for good, this ethos is still the brand’s Aesop is renowned for creating products with driving force. The Body Shop today is a truly omni- meticulous attention to detail, along with a unique channel business with more than 2,600 retail locations exploration of the intersection of botanicals and equality, speaking out about issues that matter and Cruelty free. 90% vegan. With 7,000 employees (owned and franchised) in more than 80 countries; science to create sensorial and highly efficacious creating positive change. Together with Avon Founda- and two million beauty Consultants in Latin America, The Body Shop at Home direct to consumer channel formulations for skin, body, hair, fragrance, and tion, the company has donated over US$1.1 billion, with Natura operates in 11 countries. In 2014, Natura in the UK, US, and Australia; and an e-commerce pres- home. Aesop became a B Corp ™ certified a focus on tackling gender violence and breast cancer. became the first publicly traded company to receive ence in nearly 60 markets. company in 2020. B Corp ™ certification, and its third certification was concluded in 2020. Natura’s EKOS line is certified by the Union for Ethical Biotrade (UEBT). Natura &Co annual report – 2021Our group12 13 Message from the Board of Directors The power of the collective Natura &Co annual report – 2021Our group14 15 Luiz Seabra, Guilherme Leal, Pedro Passos, and Roberto Marques, on behalf of the Board of Directors The continuation of the pandemic in 2021 and the outbreak of war in Ukraine at the beginning of 2022 have extended the period of uncertainty the world is experiencing. On one hand, we have been able to confront the coronavirus thanks to giant leaps in science, with vaccination programs being rolled out worldwide, and on the other, tragically, we have seen the renewal of violence in the place of dialogue. As we are confronted with the customers. Faced with a particu- return of war on our doorstep, we larly hard year, we consolidated offer our solidarity to the victims of the first stage of the integration violence and reiterate the profound of our businesses. We were able conviction that dialogue is always to define paths to move forward, the best path towards peace- and now our focus is on enhanc- ful resolution. Conflict forged by ing operational execution. Our arms is illegitimate and ineffective. strategic ambition has proven History is full of examples. All over to be robust, and our long-term the world, we have seen polariza- vision is being implemented, with tion hinder building constructive fundamental transformations relationships, making it even more difficult to combat the biggest ongoing. and most urgent challenges of The challenges we have experi- our times. In addition to the war enced have revealed an impact underway, inequalities continue previously unacknowledged: in to grow, the climate crisis is wors- addition to the irreparable losses ening, and biodiversity loss is close caused by the pandemic and the to irreversible. war, people’s mental health has also been profoundly affected. At Natura &Co, we reaffirm our be- Our unwavering focus is therefore lief in the power of the collective. A to care for people. With the pow- belief maintained by our companies er of the collective, we are acting during this past year, through our in defense of life, by providing four businesses and through the funding and support for public members of our network: our asso- healthcare systems, engaging ciates, Consultants and Represen- in transparent dialogue with tatives, suppliers, communities, and governments, institutions, and Pedro Passos The profound truth is: ”You can't be human in isolation; you are human only in relationships.” — Desmond Tutu Luiz Seabra Roberto Marques Guilherme Leal society across the world. The same areas with high potential to remove premise is guiding us in the current carbon from the atmosphere. conflict: we are providing support and help to refugees and making donations to address the urgent needs of those in and around the war zone. ”Determination and perseverance move the world” said Dame Sarah Gilbert, the British vaccinologist and Oxford University Professor who developed the Oxford–Astra- Turning our attention to the plan- Zeneca COVID-19 vaccine, saving et, faced with climate changes the lives of millions of people from that threaten us with devastating the virus. We agree. With this same impacts, in November 2021, we participated in COP26, in Glasgow. sentiment, we forge ahead into 2022, building a group that believes Natura &Co defended a broad- in its Commitment to Life, in beauty based global effort for the estab- and in the power of the collective lishment of ambitious targets for and, above all, in the capacity for the decarbonization of the econo- science and peace to build a better my, as set forth in the Paris Climate world. Agreement; keeping the Amazon forest alive is a condition necessary to achieve the climate targets it sets out. In addition to making every effort to articulate collective efforts to revert deforestation in the region by 2025, we prioritized the urgent need for the development and ap- plication of nature-based solutions that promote the regeneration of Natura &Co annual report – 2021Our group16 17 35,000+ employees 50.4% women in leadership positions USD $ 59 million invested in social & environmental causes 15.6% growth in social selling & e-commerce sale 2 million hectares of conserved forest in the Amazon region 64 sourcing communities based on ethical trade in 17 countries Approx. 4,000 tons of virgin plastic replaced by recycled plastic in packaging Natura &Co in numbers Triple-bottom line results R$ 40.16 billion Consolidated net revenue 2021 R$ 4.14 billion* Adjusted EBITDA 2021 R$ 1 billion Net income 2021 * Excludes effects that are not considered usual, recurring or comparable between the periods under analysis. Natura &Co annual report – 2021Our groupGlobal footprint 18 19 100+ countries 7.7* milllion Consultants and Representatives 3,700+ stores and franchises * As of December 31, 2021 Natura &Co annual report – 2021Our group20 21 → Photo: Josefina Bietti & João Ávila Strategy and Governance Strategy Delivering on our promise again, through resilience, determi- economies worldwide. Rising in- nation, compassion, and empathy, flation, localized supply chain and vative ways, boosting our unique and iconic brands. In parallel, we we were able to achieve a healthy freight disruption, as well as the further nurtured relationships and 2021 was a year that taught the underlying performance and suc- contraction of the median income collaborations, helping us to design world many important lessons and continued to test us in unexpected cessfully move forward in our goal of building a global, multi-brand, in some developing and emerging economies, led us to reaffirm our solutions that reconcile economic results with positive social and en- ways. As Natura &Co continued to omnichannel, and purpose-driven priorities and the fundamentals that vironmental impacts. This immense evolve and adapt, we were gratified group that creates value for all. made us come together as a group. groundwork that had already start- to see that one of our core beliefs, that we are all interdependent, Due to the ongoing health and We tightened our focus on deliv- was brought to light more clearly safety concerns related to ering synergies and efficiencies than ever before. We stand firm COVID-19, we continued working from the integration process in in the belief that only through a diligently to minimize its impacts, Latin America, accelerating Avon's truly collective approach can we most importantly on our people transformation worldwide, and in- ed in 2020 and continued into 2021, set the stage for the beginning of the implementation of the second wave of our strategic plan, which will allow us to seize opportunities such as cross-selling and upselling address the world's most pressing and network, whilst ensuring con- vesting in areas to fuel growth such the Avon and Natura brands with issues, from public health to climate tinuity of operations, protecting as digitalization, creating a more our Representatives and Consul- action, from inequality to regenera- cash, and improving liquidity. In targeted portfolio, and exploring tants. Planned synergies remain on tion, and, unfortunately again, from addition to the uneven recovery geographical expansion. We took conflict to peace. For the second from the pandemic in key markets, the opportunity to honor and an accelerated track, helping us to offset the impacts of the challeng- year running, Natura &Co's over- we also dealt with unexpected leverage our collective intelligence ing and unforeseen global operat- all strategy was tested, and once headwinds that are still hitting to work together in more inno- ing environment. Natura &Co annual report – 2021Our group The way forward Integration with Avon: Natura &Co’s plan to create a transforming the digital Represent- ative and consumer experience for powerhouse in Latin America re- the brand. We will continue to scale mains on track, with close to 50% up the app together with other of expected synergies delivered in tools to accelerate digitalization 2021, ahead of plan of 40%, we are even further. Aesop and The Body set to achieve our goal of 70% by Shop also continue to make strides the end of 2022. Important lessons in e-commerce, driving personali- have been learned in Avon’s imple- zation and loyalty – with The Body mentation of a new commercial Shop sales nearly double those from model in Brazil, inspired by Natura's pre pandemic levels in 2019. success story in social selling, and an improved commercial model al- Brand & Innovation: ready brought to life in Ecuador and as we gain momentum on the Central America in 2021, and more innovation front, we continue to recently in Colombia. Beyond Latin move towards a solid pipeline of America, the model has also been high-performance products that successfully implemented across embrace circularity and regener- 14 other key international markets, ative solutions at the heart of the after pilots held in South Africa and innovation process. In 2021, Brand the Nordics. These moves have been Finance consultancy positioned supported by an ongoing strategy Natura as the strongest cosmetics to rejuvenate the brand, optimize brand in the world, Avon showed the portfolio, and streamline the op- encouraging first signs of renewal erating model, which are all essen- tial steps in Avon's transformational and strength from the transforma- tional turnaround efforts, while The path to growth. Digital first: in 2021, our ongo- ing focus on digitalization allowed for digitally enabled sales to reach more than 50% of Natura &Co's total revenues. We will continue building Body Shop, as planned, regained its activist energy across its 121 Activ- ist Maker Workshop stores and the relaunch of iconic products. Both Avon and The Body Shop were ranked by Cosmetify amongst the Top 10 most popular beauty brands on this momentum with a view to in 2021. Aesop's beautiful and unique increasing this share to 75%. To- perspective on fragrance, wellness day, Natura already benefits from and design led to the launch of its own innovation ecosystem to sophisticated products and sensory design digital services that enhanc- experiences in 2021, with more on es its social selling capabilities. This the way to fuel its outstanding year- year also marked the rollout of Avon over-year growth. ON which is now live in 51 markets, 23 Regional strategy: crucial pro- gress has been made in our entry strategy for China, with Aesop's ing partner WaterBear, called Tree of Plenty, focusing on Natura’s work in the Amazon to bring the ucuuba brand activation and go-to-market tree back from the brink of extinc- set for the second half of 2022, as tion. We are aware of the challenges well as the rollout of The Body Shop ahead, but as we have shown many into mainland China. We are plan- times in our history, it is possible to ning the further rollout of Avon's create solutions that reconcile short new commercial model into an ad- and long-term results. ditional 12 markets and will engage in several cross-selling and upselling Continued operating initiatives with Natura with a focus on other Hispanic Latin American model improvement: at its incep- tion, Natura &Co set the goal to be countries. a lean, results-driven group, with flawless execution and agile pro- Sustainability: as sustainability continues to be an integral part of cesses that support the success of our four unique, independent our business model, 2021 saw signif- icant progress in our Commitment to Life, Natura &Co’s ambitious Sus- tainability Vision, with the publica- brands. In 2021, we embarked on a journey to establish the guiding principles for working together and designed an operating model that tion of our first 12-month progress can adapt and grow with us. We report. Another milestone for us firmly believe that our capacity to was the successful issuance of US$ 1 create value as a group for our four billion in a sustainability-linked bond related to two of these targets. It brands will be directly related to our willingness to trust, collaborate, was the largest-ever single issuance and balance autonomy and interde- of this type by a Brazilian company. pendence. To help us with this, we Furthermore, Natura &Co attended are investing in a robust IT infra- COP26, a conference on climate structure to foster cooperation and change, where we engaged at all improve data collection and analyt- levels to push the agenda for pre- ics, including new procurement and serving the Amazon. As part of our human resources platforms. work there, we launched PlenaMata, an online tool available to all, which tracks the live rates of deforestation in the Amazon and its causes, rais- ing awareness of the importance of this critical part of our planet. In parallel, Natura &Co created a short documentary film with our stream- Natura &Co annual report – 2021Our group24 25 nance (86% of full compliance). We composition. New to the Board is tions and extensive experience also observe the recommendations Georgia Garinois-Melenikiotou, in this area. published by the Brazilian Institute also independent, who joined in Collectively, that’s how we work Alongside assisting the Board of Directors with global strategy, the of Corporate Governance (IBGC). 2021, bringing her extensive in- In addition to the regular commit- Group Operating Committee (GOC) In 2021, the second year of our ternational experience in beauty, tees, four other subcommittees is responsible for supervising each integration as four businesses, we complex business, digitalization, were formed in 2021 to address of Natura &Co’s business units, continued to enhance these practic- Asian markets, and brand equity specific demands: Finance and identifying synergies and oppor- es in line with the most up-to-date to Natura &Co. Asia Entry, both linked to the Strat- tunities among them. It comprises requirements, consolidating our egy Committee, and Internal Audit the four brands’ CEOs, the heads of framework and enjoying the beauty The other members of the Board and Information Security, within each corporate function (logistics, of working collectively. are the three Natura co-found- the scope of the Audit Committee. finance, human resources, and le- In 2021, we launched a new Inves- tor Relations website to improve our communication with investors and analysts, with a goal of driving continuous transparency. As of De- ers, who uphold the legacy of the During the year, we focused on gal), the Chief of Staff, and the Chief original company and contribute to strengthening our compliance and Growth Officer. Headed by Roberto the long-term vision for the group, cyber security processes and con- Marques as the Executive Chairman which is critical for us. They take trols. We reviewed new corporate of the Board of Directors and Group turns as Chairman of the Board policies on transactions with CEO, the GOC is also responsible for while having the support of Board related parties and management overseeing organizational aspects cember 31st, 2021, our free float was member Roberto Marques as the of conflict of interests, enterprise to ensure fluidity and efficiency, 60.86% of the total shares, with a 37% Executive Chairman and Group risk management, and dividend and for making recommendations increase in the number of sharehold- CEO of Natura &Co. In ordinary and distribution, as well as new com- on administrative and operational ers , mainly driven by the growth of extraordinary meetings, the Direc- pliance policies such as the group structures. individual investors, reaching 68,000. tors met ten times in 2021 to dis- anti-corruption and the group Governance An enduring commitment to transparency ↑ Natura Headquarters, Cajamar, Brazil (ADTV) was R$ 339.1 million. group and oversee subjects ranging six two-day meetings to ensure ro- The average daily trading volume cuss critical strategic topics for the trade sanctions policies. In 2021, this Board committee held doing business. To achieve this, we Independence and expertise Our Board of Directors is currently composed of 13 highly experienced members (six men and four wom- from quarterly results, strategic This year, the Strategy Commit- bust, lean processes for Natura &Co. planning, sustainability, risks to tee focused on strategic planning, Furthermore, important organiza- people and culture. digital, Asia expansion, and mergers tional changes took place within the To guarantee its best performance, and acquisitions over the course of seven meetings. The People GOC throughout the year: follow a system that relies on the en and three members from the our Board of Directors has five com- Committee met six times to discuss Guilherme Castellan joined best international governance prac- group of control), all of whom are mittees (Strategy, People, Group succession, culture, compensation, Natura &Co as the new Chief tices, reviewed annually to ensure elected and dismissed by the Gen- Operating, Governance, and Audit), diversity and inclusion, and orga- Financial Officer, also assuming The backbone of our corporate gov- that processes followed align with eral Shareholder Meeting, with a two of which are statutory. Annu- nization. Nine meetings, including the responsibility for Mergers & ernance dates to 2004, when it was the guidelines established by the unified term of office of two years. ally, these committees undertake one extraordinary meeting, were Acquisitions (M&A) created as part of Natura Cosméti- Board of Directors. Six of the 13 members are Brazilian a self-assessment with the active held by the Audit Committee. Key cos’s commitment to robust trans- residents; six are US residents and participation of the Directors in themes included risk and con- The transformation agenda parency, fairness, accountability, Our commitment to the best corpo- one is a UK resident. According to sharing their views and recommen- trol, internal and external audits, for the group is now under the and corporate responsibility. Since rate governance practices is re- Natura &Co bylaws, re-election is dations to improve the composition, ethics and compliance, financial leadership of Kay Nemoto, Chief then, we have welcomed Aesop, The flected, among other things, by our allowed. As defined in the Novo workflow, and responsibilities of the operations structuring, and capital of Staff Body Shop, and more recently Avon, pioneering listing under the rules of Mercado rules, at least one-third of committees. As a result of this feed- structure. Throughout the year, the to create Natura &Co, a global com- the Novo Mercado on the Brazilian the Directors must be independent. back, for example, board member five members of the Governance Silvia Lagnado’s role as Sus- munity of people that work togeth- Stock Exchange in 2004 and our At Natura &Co, nine of the 13 board W. Don Cornwell joined the Gov- Committee covered self-assess- tainable Growth Officer now er, envisioning world class products growing level of adherence to the members are independent, corre- ernance Committee in 2021, thus ment, Board meeting follow ups and includes the Strategy agenda paving a better way for living and Brazilian Code of Corporate Gover- sponding to 69.23% of its current providing his independent contribu- updates on governance demands. Natura &Co annual report – 2021Our group 26 27 Our board Luiz Seabra Jessica Herrin Don Cornwell Nancy Killefer Guilherme Leal Pedro Passos Roberto Marques Fábio Barbosa Gilberto Mifano Georgia Garinois Melenikiotou Carla Schmitzberger Ian Bickley Andrew McMaster Jr. Natura &Co annual report – 2021Our groupBoard of directors Finance or Accounting Sales, Marketing & Branding Strategy & Innovation Digital BUSINESS Leadership/ International Experience Legal & Regulatory ESG Risks & Compliance Operations Direct Sales Consumer goods Industry - Beauty & Healthcare North & Central America LatAm APAC EMEA INDUSTRY-SPECIFIC GEOGRAPHY 28 29 Luiz Seabra Guilherme Leal Pedro Passos Roberto Marques Carla Schmitzberger Fábio Barbosa Gilberto Mifano Jessica Herrin Ian Bickley Andrew McMaster Jr. Don Cornwell Nancy Killefer Georgia Garinois Melenikiotou Natura &Co annual report – 2021Our group30 Paula Fallowfield, the Chief Hu- man Resources Officer for the four teams in four different busi- more than 100 countries. Given nesses. Examples of hubs are the Group's structure and business group, assumed Internal Com- Legal & Compliance, The Transfor- complexities, it is critical to rely on munications and Human Rights mation Office, Procurement, and a highly skilled management team agendas Packaging. to lead the Group on its growth tra- jectory, executing a purpose-driven Our group exists to support our Networks of Excellence (NEx): business strategy and creating value four businesses, and whilst it is par- Teams that push our boundaries for all stakeholders. Read more amount for our brands to be free to and set and orchestrate metrics on Natura´s ESG metrics on our manifest themselves through their and KPIs in areas of very high stra- Sustainability Vision 2030 progress purposes, we also have an incredi- tegic relevance for us. At first, these report (link here) ble opportunity to leverage our col- networks were meant to be forums lective intelligence and to do more to discuss best practices, but in 2021 The Company’s compensation than we could independently. The they evolved into agenda setters structure takes into account com- immense challenges we have ahead to achieve our Commitment to Life Sustainability Vision constitutes a for Natura &Co. There are currently pensation norms and competitive six networks in place: Innovation levels specific to the role’s talent in Beauty Products and Services market, regulatory requirements, perfect example of this. (including R&D), Sustainability, IT business strategy, and alignment Transformation, Digital Transforma- with shareholder interests. As is the We recognize that the determina- tion (focused on customers, Repre- norm in the market and aligned to tion to balance interdependence sentatives, Consultants, and store our talent objectives, our compen- and autonomy is unique. It requires managers); Relationship Selling, sation structure comprises fixed and us to design a non-traditional op- and Retail. erating model that is results-driven, variable compensation, the latter of which includes short and long- agile, and accountable, but also Virtual Communities: term incentives. Compensation collaborative, replicable, and able Spontaneous interest groups are is designed to be predominantly to flourish through its diversity. encouraged to share knowledge variable and which does not payout Sustainability and finance come together ↑ Photo: Josefina Bietti & João Ávila For years, our brands have operated in an open innovation process; by and expertise in specific topics. Some of the communities that if threshold performance levels are not met. Our leadership has always balanced business performance, social trans- nym), holding the fifth position and including The Body Shop’s data for of the Board of Directors and with the support of the Group Operating working as a network rather than have already emerged are Quality formation, and environmental pro- the first time. This year was also our Committee (GOC). These targets, a hierarchy, we can operate as a and Control (across manufacturing More information on the Total com- tection. Consequently, sustainability eighth inclusion in the Dow Jones which include the reduction of true collective. Operating in a ma- sites), COVID-19 Safety Measures pensation of the Board of Directors, is always at the core of our corpo- Sustainability Index within the NYSE. greenhouse gas emissions and the trix is vital to ensuring collaboration (with the participation of General Statutory Officers and the Fiscal rate governance and strategic plan- Furthermore, we were rated AA+ by increase of post-consumer recycled without duplication. Therefore, the Managers and Store Managers), and Council for the years ended Decem- ning and is embedded in everything MSCI ESG, making us the only Latin GOC relies on three core elements China Regulatory Affairs (to share ber 31, 2020 and 2021, respectively, is we do. We continue to improve our American listed beauty company to guide Natura &Co towards better knowledge on product registration). found on Exhibit III - Reference Form position in sustainability indexes with this rating. plastic in product packaging, are related to our Commitment to Life and the US$ 1 billion sustainabili- ty-linked bond successfully issued by practices and new horizons. item 13.1. Compensation Strategy: Group Hubs: Teams or individ- uals that provide functional services The Company compensation strat- egy is underpinned by its broader to all business units, capturing mission on “people, planet and economies of scale. A group hub profit”. Natura &Co is formed by will exist when it is best to leverage global purpose-driven, multi-chan- one mindset rather than duplicate nel beauty brands and is active in while embarking on more ambitious challenges, such as our Sustain- ability Vision, Commitment to Life, much of which is to be achieved In 2021, we took a step further. our subsidiary Natura Cosméticos We concluded the revision of our in 2021. We believe these incentives variable compensation program to create a virtuous circle to hold peo- by 2030. In 2021, for the 17th year include, from 2022 onwards, be- ple accountable, assure discipline in a row, Natura &Co was listed by yond the long-term goals, some in monitoring KPIs, and drive the B3 in the Corporate Sustainability short-term goals of our sustainabil- necessary initiatives to reach our Index (ISE, in the Portuguese acro- ity strategy, under the supervision Net Zero ambition. Natura &Co annual report – 2021Our group Our businesses Business structure Aesop CEO – Michael O’Keeffe Natura &Co Holding Executive Chairman and Group CEO – Roberto Marques Aesop LatAm Natura &Co LatAm CEO – João Paulo Ferreira Natura The Body Shop CEO – David Boynton Avon LatAm Avon International CEO – Angela Cretu The Body Shop LatAm The Body Shop: includes all operations under The Body Shop brand, except those located in Natura &Co LatAm: includes all operations under the Natura brand in all markets and Avon, Latin America. David Boynton is the CEO of Aesop and The Body Shop brands located in The Body Shop. Avon International: includes all operations under the Avon brand, except those located in Latin America. Angela Cretu is the CEO of Avon International. Latin America (‘LatAm’). João Paulo Ferreira is the CEO of Natura &Co Latin America. Aesop: includes all operations under the Aesop brand, except those located in Latin America. Michael O'Keeffe is the CEO of Aesop. 34 35 Roberto Marques Letter from Executive Chairman and Group CEO Following a strong 2020 performance for Natura &Co, 2021 was a year that continued to test our resilience and ability to adapt to the ever-changing circumstances imposed by COVID-19. Throughout the year, we focused in some key markets, disposable on continuing to support our income impact with the elimination people and consumers with com- of government subsidies. passion whilst moving forward with the transformational changes In response, we focused on the within our businesses that are key things that we could control. Our fo- to our core strategy. After almost cus on costs and continued transfor- two years of living with the realities mational changes resulted in Natura created by the global pandemic, &Co posting a net sales growth up by we have shown that Natura &Co’s collective approach is our strength. 8.8% (3.8% vs 2020 at constant cur- rency) and strong net income of R$1 billion, significantly higher than 2020, We were cautiously optimistic that while finishing the year with a strong 2021 would mark a return to normal- cash position of R$6 billion. Our total cy, particularly with the arrival synergies reached US$197 million of COVID-19 vaccines, however, as in 2021, close to 50% of plan, and has been the case for many busi- exceeded our guidance of 40% run nesses, we were met with a series rate in 2021. And despite the effects of headwinds, especially by the of the global pandemic, we remain second half of the year, due to the on track to deliver our 2022-2024 continuing pandemic and resulting plans, with key initiatives in place to macro-economic challenges. These fuel sustainable, profitable growth. were exacerbated by inflationary We are confident that we will con- pressures, commodities and cost tinue to build long-term shareholder increases, further currency deval- value, while remaining committed to uation in key geographies, and, a purpose-driven future. Natura &Co annual report – 2021Our businesses 37 learn from each other, and in turn we grow. We are living proof that together we are greater than the sum of our parts. For all we have achieved, I am especially proud of our teams who demonstrated their resilience time and time again and tirelessly drove results, pushing for- ward in the spirit of collaboration, and creating synergies to deliver impactful outcomes across the company. 2021 has proven that even in the toughest of times, our busi- ness model and our brand strate- gies are sound, and we continue to move forward with confidence. As I write this letter, the shadow and devasting consequences of war in Europe are once again around us. Our thoughts and soli- darity are with our people, where our priority remains their safety and well-being while already helping all those with donations, logistics and We are living proof that together we are greater than the sum of our parts.” This performance reflects the re- share in all countries, growing 34%, revenue trend in the last three years, markable mobilization of our teams which more than offset a challeng- reinforcing our confidence and con- Aesop continued its rapid double-digit growth in 2021. 25.1% will be with the World Economic monetary support. We are consis- Forum’s Champions for Nature tently monitoring the situation and to focus on sustainable profitable growth, as well as the strength of our "direct-to-consumer", omni- channel model and the depth of ing second half in Brazil. viction in its turnaround plan. driven by Asia and the Americas. It continued its expansion, reaching community which we co-chair for 2021-2022 on behalf of the private evaluating all options in terms of business continuity. More than ever, At Avon International, 2021 marked a year of transformation to The Body Shop demonstrated its ability to adapt through an en- 269 signature stores at year-end sector. A milestone achievement for in the face of violence, we believe 2021, up 22 from year-end 2020. our group during 2021 was defining in dialogue, interdependence, in the reinvention of the social selling the core of the business, building hanced multi-channel offer, and the model we are implementing. the foundation for a decisive turn- brand’s growing appeal achieved around. Courageous decisions were an all-time high of GBP£800 million Here are some of our highlights, all made to accelerate change, despite to grow 0.7%, despite COVID-19 To advance our Commitment To Life Sustainability Vision in 2021, we used our voice on the glob- the baseline of our carbon emis- power of the collective and peaceful sions of all four brands on scopes 1, resolution as the only way forward. 2, and 3, which will now enable us to clearly advance our path to a We look forward to continuing supported by the continued expan- headwinds created by the pan- related impacts and a slowdown in al stage, including at COP26 in Net Zero future. our journey side by side with you. sion of digitally enabled sales: demic and its 2020 cyber incident. the fourth quarter, as the Omicron Glasgow, and to address the Chi- The business made key structural variant significantly impacted retail nese Government at the opening Our belief in the beauty of the With gratitude, Natura &Co Latin America grew changes and eliminated complexity footfall. It continued to deploy its of COP15, the Conference of Bio- collective runs deep. With over 6.3% year-over-year, driven by from the operating model while we new Activist Maker Workshop retail diversity hosted by President Xi 7.7 million Consultants and Repre- strength in Hispanic Latin America evolved the much-needed commer- concept, reaching 100 stores in Jinping in Kunming, China. One of sentatives, as of 31st December at +22%. Our Natura brand contin- cial model. Even with all of that, the company markets at the end of the the ways in which Natura &Co will 2021, and over 3,700 stores across Roberto Marques, ued growing, particularly in Hispan- Avon brand (International and Latin year, and resulting in double-digit continue to help drive the agenda to five different continents and 100 Executive Chairman ic Latin America, where it gained America combined) posted the best sales uplift. halt and reverse nature loss in 2022 countries, we collaborate, we and Group CEO, Natura &Co 38 39 Building our future together During 2021, we continued to care for our people and support our network as the world forged on fighting the global pandemic. Today, just as we were seeing the positive effects of global collaboration to tackle COVID-19, the world is once again in the shadow of war. Angela Cretu (Avon International), João Paulo Ferreira (Natura &Co Latin America), David Boynton (The Body Shop), and Michael O’Keeffe (Aesop) Message from the CEOs As we see its devastating effects, we for a better blending of digital and in-person experiences with rich commit to taking care of our people “in real life” interactions fully re- and helping all those affected by the turning. We have the opportunity violence; we will help those in need to help rebuild the world, making and put forth our best efforts, join- it a better place to live and do busi- ing forces in the hope that peace ness, and it is important to do it will prevail. “in person”. For a group with a profound belief We’re proud that the beauty of in relationships, it was challenging in some cases to evolve our culture our collective manifested itself in many ways during 2021, helping us and build connections during 2021. to advance our strategic priorities Collectively, we innovated, work- and spread positive impact for the ing hard to bring our teams closer world and its people. For example, together (even in the virtual world), on its transformation journey, Avon and to ensure our retail stores and has learnt from Natura how to de- our Consultants and Representa- velop a more competitive commer- tives had the tools they needed to cial model for Representatives. It keep their businesses going, over- is also helping to create significant coming limited person-to-person cost savings for The Body Shop with interactions. From the digitaliza- the production of 100 million units tion of the social selling model, to per year of the brand’s iconic body customized online experiences, we butters. With its strength in the Asia are beginning to reap the rewards region, Aesop is sharing learnings of our investments. Our hope is with The Body Shop for entry into COVID-19 deepened inequalities across the world, particularly in the poorest countries, so we must con- tinue to strive for a better future for all. As a group, our goal will always be to create financially successful, incredible products, while support- ing and honoring the environmental and social progress we need to cre- ate a fairer, more sustainable world. The beauty of our collective is also evident on our journey to achieve our Commitment to Life Sustain- ability Vision goals. 2021 marked the João Paulo Ferreira Angela Cretu And at the same time, Aesop is David Boynton learning how to progress its path to year in which each of our businesses circularity by creating a retail refill established its baseline in carbon station, thanks to shared insights emissions, an essential project to from The Body Shop. aid us in mapping our collective journey to Net Zero. And at COP26 Together, we celebrated the launch in Glasgow, our four brands came of many incredible products across together at the summit and online our brands in 2021. While it’s diffi- to deliver a powerful message from cult to shortlist favorites, highlights Natura &Co: to ensure a Net Zero, include Avon’s revolutionary ANEW Power Serum skincare range, with nature positive future. We feel confi- dent that our combined geographi- award-winning patented Protinol™ cal reach across every continent will that transforms the skin in just sev- allow us to use our collective voice en days; Natura enhanced its entire to help drive the change needed vegan Ekos range with new formu- to stabilize the planet and to help las, now three times more potent, achieve a Net Zero world by 2050. and introduced a new bio-active from the Amazon forest: tukumã; As a group, we value beauty and re- The Body Shop reinvented its leg- lationships, and these fundamental endary body butter line, now parts of life need peace to flourish. Vegan Society certified and refor- As we see violence and war bring- mulated, with fully recyclable pack- ing suffering to people all around aging; and Aesop’s extraordinary us, we are mobilizing all efforts we Othertopias fragrance collection, can to drive change and overcome featuring three complex and this terrible moment and seeking a that 2022 brings the opportunity mainland China, planned for 2022. Michael O’Keeffe unique aromas. peaceful resolution. Natura &Co annual report – 2021Our businesses40 41 The beauty of the collective Our foundations for growth ↓ Photo: Josefina Bietti & João Ávila We are very proud of what we achieved in our second year operating together as a global group. Through the second year of the global pandemic, with its continued unexpected effects, Natura &Co was able to adapt to these difficult circumstances with rigor and discipline, enabling us to achieve and in some cases exceed our goals in a timely manner. Most importantly, we embraced been a phenomenal effort, and we planned, and we continue to work change and faced these challeng- are humbly taking advantage of on the optimization of our distribu- es with a "human kind" mindset by this opportunity to create deep and tion centers across Europe and Asia. taking care of our people, including meaningful changes that will drive In Latin America, the Avon facility in the most vulnerable ones in our growth in the future. network, and moving forward in Moreno (Argentina) now produces most of Natura’s products, which our integration journey which sets We continued to advance in the has been crucial in overcoming the stage for further value creation five-year strategy to integrate our supply chain issues, carbon emis- from 2024 onwards. supply chain by taking a global sions, and importation constraints. approach to Natura's “qlicar”, the We expect more products from In April 2021, we raised our annual renowned 17-year long relationship the portfolio to join them soon. At recurring target synergies by US$ 50 program with strategic suppliers, Natura's Ecoparque, located in the million, to between US$ 350 million which this year evolved into “Em- Amazon city of Benevides (PA), one to US$ 450 million. In Latin America, brace” to support Natura &Co's of the pillars of the group's strategy where integration is well-advanced strategy. The goal is to bring to- for the Amazon rainforest, the team with all four brands already work- gether key partners across brands is now producing The Body Shop ing collaboratively successfully, we to strengthen ties, boost innovation products alongside Natura Ekos and achieved 50% of planned synergies (up from 21% in 2020), ahead of ex- and cooperation, and reward dis- tinguished achievements in quality, Avon soap bars. pectations for the year. resilience, and positive impact on In 2021, we integrated The Body society. As part of the plan, Natura Shop and Aesop distribution hubs Functional areas, including human &Co will have a unified procurement in Hong Kong, while The Body Shop resources, finance, legal, and supply management system to increase will consolidate some of its UK activ- chain follow the same policies and savings, enhance productivity, and ities in the Avon distribution center procedures, leveraging best prac- gather vital data and analytics. in Corby (England) by January 2022. tices from each brand. For example, Looking towards our delivery routes Natura &Co in Latin America ad- In manufacturing, the production in Latin America, the distribution opted Natura's know-how in credit of The Body Shop products at the center in Cabreúva (Brazil), Avon's operations while utilizing Avon's Avon facility in Poland is on track to largest in the world, is now export- expertise in debt collection. It has achieve 100 million units per year as ing Natura products, while Natura’s Natura &Co annual report – 2021Our businesses42 43 We inaugurated the first truly integrated Natura &Co distribution center in Medellín (Colombia), with another three going operational in 2022 in Brazil, Peru, and Chile. center in Itupeva (Brazil) is now an build capacity in critical areas such ment survey held in 2021 showed combined knowledge while balanc- Understanding the challenges we fore the end of the week. The same important logistics hub for Avon's as marketing, branding, information that we are heading in the right di- ing our brands' autonomy. Once were facing with a human-kind lens policy was also adopted at Aesop, Fashion and Home categories. We security, digital, and other support- rection by remaining stable, and in again, we see the beauty of the allowed the organization to respond incentivizing its employees to keep inaugurated the first truly integrat- ing functions. Key to improving our the top quartile, with a positive out- collective. with empathy. ed Natura &Co distribution center in governance, we also aligned execu- put against external benchmarks. this time free to connect socially, organize their thoughts or reflect Medellín (Colombia), with another tive pay across the globe, balancing three going operational in 2022 in short and long-term compensation, Our leadership is committed to Well-being and mental health Two years ago, a previously un- The Body Shop, for example, cre- and plan for the week ahead. ated the Self-Love Day, an annual Brazil, Peru, and Chile (including The and in a bold move, linked several continuing to forge a strong culture known virus radically impacted the benefit that allows employees to Additionally, Aesop added a flexi- Body Shop’s products). of our sustainability goals to them. that can adapt and respond to ex- way we live and work, transforming take an extra day off once a year to bility statement to its email signa- A focus on our people This year, as we continued to inte- A new, collaborative, data-driven ternal challenges and remain true to our daily lives. Our first response recharge and do something they tures to aid life balance and pro- human resources IT system is also our purpose and aspirations, while was to quickly make decisions to love. Moreover, it gave all staff three tect boundaries: ‘Aesop is keen to underway to support our people protecting and celebrating each safeguard our people, our commu- days’ leave, which it does every year, protect the well-being of its people grate the businesses, our people management agenda. brand’s unique voice. To support nities, and our company. We are to volunteer for good causes. The and partners. “If this email finds you strategy followed suit. We have been building the blocks of our or- We know that Natura &Co's ability this and ensure that our culture is deeply connected to our strategy, proud that we were able to engage with all our stakeholders, which Body Shop also launched LinkedIn Learning, a flexible way for people after hours, a reply is not expected.’ Aesop also rolled out the first phase ganizational structure and integrat- to attract and retain talent is critical this year we put in place several allowed us to address the challeng- to develop their professional skills of its internal Mental Health First ing our policies and procedures to to achieving our aspirations both global culture-focused leadership es, and contribute to the world in a alongside their day-to-day job. In Aider program training to the HR ensure they are fair and equitable, within the group and for each busi- meetings to educate and engage meaningful way. addition, it introduced a menopause and office teams across the globe. and that we have the right capabil- ness. This past year helped us learn our workforce; these have been rep- policy, from enabling comfortable This course allows employees to ities to achieve our goals. As part new skills and behaviors to help our licated at all levels of the business. In 2021, we continued prioritizing working temperature control to the gain a deeper understanding of of that work, the executive teams people prioritize their mental health We spent some time together, deep the well-being of our people and adoption of flexible working hours, mental health and taught them from the four brands were assessed and well-being, as we all adapt to diving into our brands, into what our communities as we all em- the measures aim to provide infor- how to identify, understand and against a common approach to new ways of working. In the spirit of binds us, and what we can learn braced new skills and behaviors to mation about workplace accommo- help someone who may be experi- skills and performance. The results interconnectedness and the im- from each other, which allowed allow us to operate in a more agile dations and support for team mem- encing a mental health issue. were translated into clear talent portance of relationships, we firmly us to define the guiding principles way when needed. We went from bers experiencing menopause. mapping and succession planning believe in the need for our leader- for how we should work together. a primarily office-based culture as well as a development agenda ship to be empathetic, encourage These are now key enablers of our to a flexible one, as we began to Furthermore, The Body Shop imple- to fill gaps. Also, along with adjust- a supportive culture and engage in culture and the foundation of our see leaders become more aware mented a “no meetings on Friday ments to the organizational struc- conversations with each other. The unique, matrix-operating model of the importance of supporting afternoon” policy to help employees tures, we recruited new talent to results of our employee engage- which allows us to leverage our colleagues’ mental well-being. get back some focused time be- Natura &Co annual report – 2021Our businessesNatura &Co annual report – 2021 Our businesses 44 Co-existing with the pandemic One year into the pandemic, we Canada, Australia, Japan, Germany, along with financial aid for food, approached 2021 with a feeling and Malaysia experienced manda- medical expenses, and public ca- of optimism thanks to the global tory store closures while others saw lamity. The activities also include a rollout of vaccines and the hope for the return of customers to tradition- mechanism of direct income trans- a more normal business landscape. al channels. Consumers prioritized fer which has already surpassed R$ As the world saw new variants arrive online channels, with sales over two 1.2 million in donations for more along with other geopolitical and times higher than pre-pandemic than 5,000 consultants. human factors, we continued to see levels. As for our Consultants and a challenging environment. Representatives, the continuous Along with supporting education As a business, we carried on through the storm with agility adoption of digital assets continued initiatives to raise awareness about to drive their performance. the benefits of the vaccine, Natura &Co donated R$ 4 million to Conec- As the pandemic continued to tar (the Brazilian Cities’ National disrupt lives across the world, it also Vaccine Consortium) for the pur- had a negative effect on global sup- chase of hospital equipment and ply chains, resulting in significant vaccines. We also joined the “United As each country experienced disruptions. We are thankful to our for Vaccine” movement promoted different facets of the pandemic at long-term partners and suppliers by businesses and civil organiza- different times, with the backdrop who prioritized our businesses so tions aiming to facilitate vaccine of unique regulatory frameworks, that we could continue producing access for everyone. it was necessary as a group to re- spond and coordinate in a central- and delivering to our customers. During the 2021 edition of “Em- Also, Natura &Co joined forces with ized manner. Leveraging the power brace”, our global suppliers’ best 11 other businesses to donate more of each business’s independence practices awards program, than 5,000 oxygen concentrators and interdependence when need- we recognized those partners with to the Brazilian Public Health System ed, our teams showed resilience, outstanding performance in resil- (SUS) to contribute to the care of adapting, and responding to the ience and in overcoming obstacles patients with Covid-19. Together differing market circumstances. during the first year of the pandem- with another 20 businesses and civil We deployed more resources and ic in the Special Awards category. organizations, we also partnered gained even greater confidence in with UniãoBR, which bought 16 our local operations, consolidating In parallel, our sales force in Latin oxygen plants that were sent to our belief in the beauty of the col- America gained access to Natura’s public hospitals in 15 cities in the lective, and the core of our operat- Social Support Center, a call center Amazon region. ing model. offering free social services, med- ical information as well as mental With the world in flux, we saw a real well-being and support for those change in consumption patterns; affected by domestic violence, 46 47 14.5% 10.7% Digitally enabled sales 50.9% An omnichannel group Drive for change In 2021, we continued our pivot to a digital- enabled business model, building a personalized and convenient experience for our customers to interact with our brands, anytime, anywhere and through the channels and touchpoints of their choice. As we faced the complexities of the pandemic for a second year, our collective, authentic, global omnichannel value-proposition once again proved its value. Digitally enables sales reached 50.9% of total revenue 74.8% Retail Online Relationship selling Natura &Co annual report – 2021Our businesses48 49 Avon International Accelerating the transformation 2021 saw Avon celebrate 135 years of championing women and beauty and make continued progress in its transformation strategy, evolving the original social selling model to meet today’s consumer needs. Starting with resetting its operating dics. Inspired by Natura's success Digital-enabled sales are expected model to be more streamlined and story, the new commercial model to accelerate in 2022 with the con- efficient, simplifying processes, and offers a more modern, profitable, solidation of tools into one platform, optimizing resource allocation, the and attractive value proposition Avon ON. The app is being used by business is now centered around to Representatives, with a career 15.8% of the Representatives as of eight key markets (Italy, Philippines, pathway that is more productive December 31st 2021, which rep- Poland, Romania, South Africa, and promotes greater engagement resents an 820bps increase in the Turkey, and the UK) as well as China. with the brand. Initial feedback has year. In the UK, Avon ON’s adoption Philippines and Romania, while Po- local plant will continue to supply land and Russia still faced continued their social selling operations. For effects from the pandemic. In 2022, 135 years, Avon has stood for wom- Representatives from another 12 en wherever they are in the world, markets will also have access to the regardless of ethnicity, nationality, new model, which provides more age, or religion. As a group, we will recognition, support, and benefits continue to assess our position as at each level of their progress with the situation evolves. These markets operate as central been very positive with promising reached 40%, while in Italy it in- Avon. hubs for Avon International’s busi- green shoots in their retention and creased from 14.8% to 23.4% and in ness (excluding Latin America) and co-create campaigns and initia- productivity. Poland from 6% to 23%, ahead of the target for 2021. Although a key mar- tives with the lean central teams. Furthermore, Representatives are ket, the Philippines is still a challenge Examples of simplifying operations benefitting from Avon's investments due to relatively limited smartphone include standardizing the number in digitalization and brand appraisal; use and data access among Repre- of campaign cycles in all markets online sales (including both e-com- sentatives. to twelve and reducing the product merce and social selling) are two portfolio by 20%, focusing on hero times higher than pre-pandemic products and innovation in make- levels. For the whole year, there was In 2021 Avon gained share in the UK, jumping from tenth to third place in up, fragrances, and skincare. a 27.3% increase compared to 2020, market share within the beauty sec- driven by the distribution of digital tor, which is a remarkable achieve- Focusing on building lifetime rela- brochures. The average order of ment for a social selling channel in tionships with its Representatives, Representatives who share both the a developed market. Similarly, the Avon rolled out a new reward and digital and printed brochures is 50% brand also increased share in South recognition model, called Avon Re- (59% in key markets) higher than Africa, progressing from 7.33% in wards, in 14 markets, after successful those who only use the traditional 2020 to 7.81% in 2021. Other en- pilots in South Africa and the Nor- printed version. couraging signs were observed the Overall Representative satisfaction In response to the war in Ukraine, our primary concern has been showed positive momentum com- pared with 2020 and 2019, driven with the protection and safety of by South Africa, Poland, and the UK, our associates and Representatives mainly due to better service levels in facing violence and loss. We are the order fill rate. In 2022, Avon will helping our people on the ground, continue with the rollout of the new including our sales teams in Ukraine, commercial model and scaling up and are working with organizations its digitalization rates. More brand providing humanitarian relief such investments are planned to improve as the Red Cross and local NGOs by perception of Avon’s affordable donating both funds and personal quality, innovation, and contempo- care products for refugees. Avon is raneity, with a focus on cult prod- suspending exports from Russia and ucts and gifting. is assessing shipments to the mar- ket. We strive to provide our repre- sentatives with the means to sustain their financial independence, so our Natura &Co annual report – 2021Our businesses50 51 Natura &Co Latin America Building strength Latin America is leading our integration process and modeling our way of operating as a group with interdependence and autonomy. Today, all four brands work in an integrated way, most notably leveraging synergies between Natura and Avon. The Natura brand outperformed for the eighth year running. This increase in sales and accessing Latin America, notably Argentina, customer brochure itself is now its app to allow customers to shop the CFT markets, with strong represents outstanding and en- better payment terms and benefits. Chile, Peru, as well as Mexico, which 100% digital, resulting immediately online as they watch live events growth in Hispanic markets in the couraging recognition of the efforts The higher segments of the com- is now Natura’s biggest market after in increased conversion rates, with presented by the Consultants; along fourth quarter that helped offset a made five years ago within a turn- mercial model, representing the Brazil. Total online sales (including 75% of Consultants in Argentina with other content produced for tough environment in Brazil, and around strategy anchored on the most significant part of total sales, e-commerce and social selling) sharing content using the Natura Natura, these are an opportunity to Avon’s new commercial model showed initial positive signs in some reconnection to the brand’s essence and its vision to build a better world registered an increase in productiv- ity, demonstrating the sustainable for the Natura Brand in Latin Amer- ica were up 41.9% in 2021, with the app. Meanwhile, Mexico joined the e-commerce platform, and Chile obtain additional revenue. markets, with higher productivity, through better relationships. health and strength of Natura’s number of Natura Consultants has become a reference for the om- As for Avon, the new commercial retention and activity. value proposition. online stores reaching 1.5 million (up nichannel approach in Hispanic Lat- model has been fully implemented In 2021, all Latin American markets 50% from 2020). in America by bringing together the in Brazil to drive Representatives' Furthermore, it reached its high- registered an expansion in the In parallel, the evolution of Natu- est-ever recorded value (up 19% to number of Natura Consultants and ra’s social selling platform, which US$ 1.7 billion) in 2021. It was ranked a significantly higher loyalty index brought direct sales to the digital as the world’s strongest brand in driven by core product categories age, proved its strength once again. In Brazil, the sales brochure Minha Natura, a cyclical magazine featur- ing special promotions dedicated experiences of retail, e-commerce, loyalty and increase their remuner- and social selling, with the active ation. Throughout the year, there involvement of the Consultants. were some adjustments to balance business activity and the recruit- the cosmetics sector, according to and increased brand preference. While Natura is creating an eco- to the Consultants, became digital, As part of the continuing strategy to ment of new representatives by Brand Finance, which considered Productivity was up 24.2% in His- system through the acceleration of allowing for the personalization of evolve its digital ecosystem, Natura beauty leaders, with good results factors such as marketing invest- panic Latin America, while it was digital tools, it is reinforcing rela- offers and a reduction in the time- launched a new interactive platform already seen during the last quar- ment, customer familiarity, staff sat- uneven in Brazil. In the early stages tionships across its networks and to-market of the campaigns; this in Brazil whereby Consultants can ter of 2021. These improvements isfaction, and corporate reputation. of the segmentation model, new with its customers to increase value move contributes to the group’s watch launch events online and contributed to a successful launch Also, according to the Merco 2021 Consultants are building activity generation. Overcoming challenges goals of reducing carbon emissions shop for exclusive offers. In addition, in Ecuador and Central America in ranking, Natura was the number with customers and are expected brought by the pandemic, brand to achieve Net Zero. In Argentina, inspired by The Body Shop, Natura 2021, and more recently in Colom- one in reputation in Latin America to progress over time, driving an penetration accelerated in Hispanic Natura took a step further, and the is testing a live shopping tool inside bia, enabling the acceleration of Natura &Co annual report – 2021Our businesses52 &Co Pay In 2021, &Co Pay, the group’s pro- portation passes, sales to Natura prietary financial services plat- Consultants processed via credit form, reached 340,000 accounts in card, and Pix (Brazil’s Central Bank Brazil. The platform is an enabler instant payment service). Because of digital, social, and financial the &Co Pay was born to be scal- inclusion for Natura’s networks able and adaptable to create a in Latin America, where approxi- multi-brand, multichannel and mately 50% of the population are multi-geography experience, the currently unbanked. New features next step is to expand the service added in 2021 include credit top- to Avon’s Representatives and into up for mobile phones, public trans- other countries in the region. the transformation plan across Latin reality television show Big Brother growth in 2021, bolstered by entry America. At the same time, it sets Brazil, which led the brand to lead into Mexico, with six stores opened the stage for Avon to start maxi- in share in social media voice (SOV) during the year. The Body Shop mizing its presence in the region by on Twitter, amongst the 10 trending and Aesop stores in LatAm saw exploring cross selling and upselling topics. The brand also participated outstanding growth accelerated by opportunities with Natura. in the most important fashion event in Latin America, Colombiamoda. investments in digitalization, includ- ing the launch of the Aesop e-com- In Brazil, the Representatives’ According to the Merco 2021 rank- merce channel in Brazil and The satisfaction index reached a re- ing, Avon’s reputation was ranked Body Shop e-commerce in Mexico. cord-high, with double-digit in- number three in the Beauty and Outside Latin America, Natura also crease driven by new digital tools, Personal Care sector in Colombia, saw a 100% growth in sales in the an improved call center and a better Argentina, and Mexico. In Brazil, as United States and 56% in France, portfolio. well as being ranked the number with 43% coming from other coun- three for reputation in the beau- tries in Europe. The new campaign “Watch Me ty sector, Avon was also selected Now” was launched across the amongst the top 10 in the general region, driving a significant increase ranking, assuming the ninth posi- in brand power and customer per- tion (from 16th in the previous year). ception year over year, notably by In retail, although Natura’s 640+ attributes such as "top of mind" and stores still faced continued restric- "differentiation." Avon was a major tions due to the pandemic, the retail sponsor of the 21st edition of the channel registered an increased Natura &Co annual report – 2021Our businesses54 55 The Body Shop The changemaker In 2021, The Body Shop continued its transformation journey to revive the activist spirit of its founder, Dame Anita Roddick. By creating a refreshed brand experience, the company is engaging its staff and customers to become part of a collective of global changemakers, with environmental and community-minded initiatives designed to return it to the forefront of ethical business. These efforts resulted in the addition The Body Shop continued to uphold the brand not only saving 120,000 Australia. Overall, the sales generat- of The Body Shop to Brand Finance's its passionate belief that physical plastic bottles from going to waste ed by The Body Shop at Home were Cosmetics Top 50 ranking in 2021 retail will only thrive in the future if in the first year but also delivering an almost triple the figure reported in and the accolade as one of the fast- it is highly experiential. Hence, it incremental 34% growth for stores 2019. est growing brands in the industry. rolled out its "Activist Makers Work- with refill stations. Those stores are Along with a renewed portfolio, shop" concept to 104 stores in 2021, bringing the total to 121 to date. The attracting loyal refillers and seeing a 15% repeat purchase rate. The refill Throughout 2022, The Body Shop will follow up on its strategy to reinforce with iconic products now further brand is inviting customers to have stations are successfully appealing its presence in Japan, where the embracing packaging and formula fun while playing with the products to younger customers, too, with 49% business was acquired from a head circularity, The Body Shop has suc- and learning how to impact the under the age of 35. The Body Shop franchisee. In 2021, the new local cessfully transitioned into omni- world positively. One of the features currently holds the highest share of management team, supported by channel. Its e-commerce platform, available in these stores is the refill voice in online conversations men- the brand's revival and the enhanced re-launched at the height of the station, where customers can reload tioning the word ‘refill’. pandemic, saw continued invest- their recyclable aluminum bottles portfolio, has started to optimize the store footprint while opening ment in 2021 to improve its digital with hair care products, shower gels, The Body Shop at Home, the direct three new concept stores. These first capabilities. As a result, it has driven or hand washes. The Body Shop sales channel, has experienced moves have already shown positive higher conversion levels, increased rolled out 410 refill stations in 34 considerable growth compared signs of sales momentum. the average transaction value, and countries year end 2021, and antici- to pre-pandemic levels, playing an provided an enhanced consumer pates 400 more will be installed essential role together with e-com- experience. Online sales in 2021 in 2022. have nearly doubled compared with merce in offsetting the gradual and uneven reopening of retail stores in before the pandemic in 2019. Early results are impressive with markets such as the UK, Canada, and Natura &Co annual report – 2021Our businesses56 57 Aesop A tale of consistency Aesop achieved an outstanding year-over-year overall growth of more than 25%* in all regions in which it operates, well ahead of expectations and the CFT (Cosmetics, Fragrances and Toiletries) market. Based on a swift, well-executed applied to make purchases in South This return to the stores, pushed by from The Body Shop: a refill station acceleration of its digital capabilities Korea more convenient by using the people’s need to interact physically is being tested at the South Yarra without compromising its unique app KakaoTalk. With these ongoing rather than purely in digital chan- store in Melbourne (Australia), while brand experience, this growth has investments, Aesop's share of online nels, was significant in leveraging a new eco-designed store was been solid particularly in Japan and sales relative to revenue ended 2021 Aesop’s plan to guide its customers opened in Korea. South Korea (with a 50% increase in at double the pre pandemic level. through a meticulously designed sales) where the company has built sensorial journey. In celebration Looking ahead, Aesop’s primary a relevant retail presence over the Although Aesop faced intermittent of the launch of a trio of elevated goal for 2022 is entry to the Chinese last few years. Now, it has seamless- store closures due to COVID-19 fragrances, the first chapter in the ly connected to its customers in the digital world, increasing personal- and supply chain disruptions that impacted the availability of some Othertopias collection, Aesop’s in-house architects developed a ization and loyalty. products, retail regained sales share, unique retail concept to house this market, going a step further in its remarkable performance in Asia and paving the way for a broader expansion of Natura &Co. As part as expected, rebalancing the distri- growing product category and of the plan, Aesop has advanced in In 2021, Aesop kept enhancing the bution among channels. The lack of encourage sustainable trial through the product registration process, integrated customer experience tourism and the significant reduc- a fragrance chamber and scented obtaining the Good Manufacturing with the rollout of the new CRM tion in the number of people circu- ceramic discs, marking its distinct Practice (GMP) certificate, a require- system across 12 markets, represent- lating in traditional inner-city office and authentic voice in this catego- ing 80% of the brand’s footprint. building areas led to a renewed ry. Fragrance Armoires have been ment of the Chinese authorities. Aesop’s manufacturing plant in It also introduced Apple Pay in the prioritization of opening stores custom designed for and installed in Victoria (Australia) has already been e-commerce channel and launched in local communities and neigh- 15 stores worldwide, while in Sydney authorized to source the products a cross-border mini-program on borhoods. By the end of the year, (Australia) it is inside the Sensorium, for China. Simultaneously, invest- WeChat, allowing users to purchase Aesop had added 25 stores and nine a “store within a store experience” ments in digital platforms and CRM Aesop products directly within the department store counters world- that invites customers’ senses to app. The same concept has been wide, including in Barcelona, Hong interact with the brand. In parallel, are being accelerated to support the omnichannel entry strategy. *at constant currency Korea), Edinburgh, and New Jersey. solutions, inspired by the learnings Kong, Seoul, Taipei, Jeju Island (South Aesop aims to progress in circularity Natura &Co annual report – 2021Our businesses58 59 Innovation and products For a beautiful world At Natura &Co, we are committed to uniting purpose and beauty to develop a unique brand portfolio. Sustainability is at the core of our and inclusive for all. We also strive accessible to all. As the world recov- We have set up hubs of expertise in innovation process, so that with ev- to ensure the highest safety and ers from the pandemic, we are also ery product we develop we contrib- efficiency standards while providing taking a deep dive into the future ute to advances in circularity and emissions reduction on our journey the utmost transparency through traceable sourcing, certifications, to achieve Net Zero emissions. To and verifiable claims. do that, we focus on making each direction of the beauty industry. In 2021, the iNEx, our internal Network of Excellence focused areas critical to our future growth and the delivery of our Commit- ment to Life Sustainability goals. We identified seven expertise areas from where working across the group can help either to enhance step of our product development Our four brands share this frame- on innovation, concluded the R&D our innovation pipeline on key cycle more sustainable, from ethical work, although each has its unique strategy for the group, mapping categories and regional priorities or sourcing and renewable raw ma- take on portfolio development. out synergies and identifying the terials to how we develop formu- Natura, for example, creates natural areas where each brand will work to explore new innovation spaces. Two R&D Hubs have already been las, create packaging, and design formulations sourcing tradition- autonomously and the ones which put in place in early 2022 which will the product usage experience for al knowledge from the Amazon we can benefit from creating plat- our customers. As a group, we are rainforest in a way that promotes forms for the group. The goal is for exploring more disruptive, regen- biodiversity. The Body Shop focuses Natura &Co to have an open, agile erative solutions, which will capture on ethical beauty with a call for ac- ecosystem, which is extensively more carbon than they emit, con- tion. Aesop elevates sophisticated, connected to external trends and be big enablers to our innovation and Commitment to Life program: Circular & Regenerative Packag- ing Technologies, and Regulatory Intelligence & Analysis. The hubs 1.3% of net sales invested 276 partners in open innovation* 1,212 products launched 686 scientists 1,948 patents (since 1992) 470 publications** 61 start-ups became partners 181 start-ups with products tested by us serve, and restore biodiversity and highly sensorial experiences, while expertise and brings in innovative will create platforms, partnerships, ecosystems, and generate quality Avon addresses consumer needs external solutions to deliver them and provide intelligence to enable of life through means that are fair with high-performance products to the brands. all four of our brands while ensur- * Natura, Avon and Aesop ** Number of publications of articles in external journals / conferences that the R&D has done since 1983 Natura &Co annual report – 2021Our businesses60 61 ing there is the right governance in to pioneer naturals and bring place to protect consumer-relevant craftsmanship back to perfum- brand differentiation. For the other ery, creating unconventional expertise areas, we are intensifying fragrances that resonate with our collaboration efforts, setting life and are integral to her style. up Virtual Communities to work on Perfumer H currently has two important topics like Regenerative stores in London and is opening Ingredients and Asian skincare. its first overseas store in Paris Fable Investments in 2022. maude: a modern intimacy company launched in 2018 In 2021, Natura &Co launched to disrupt the male-focused Fable Investments, our corporate legacy sexual wellness industry. investment subsidiary, to support Founded by Eva Goicochea, innovative, emerging businesses maude offers a unique and in- that have deep connections with clusive assortment of sex essen- their customers in the beauty and tials and personal care products wellness spaces through minority that are body-safe and easy to investments. The goal is to offer use. In 2021, Eva was selected those businesses operational, brand, as one of Forbes Next 1000. In financial, and investment expertise, February 2022, maude success- leveraging Natura &Co's knowledge fully made its debut at Sephora and proven track record in success- US online as the first sexual well- fully scaling up premium, niche, pur- ness brand. pose-driven brands while honoring their autonomy and unique iden- LOLI: as a beauty industry tity. Fable Investments is managed independently by an experienced veteran, founder Tina Hedges created the world's first ze- team in the beauty and retail indus- ro-waste, organic, and MADE tries to ensure total commitment to SAFE certified skincare brand. the investment portfolio and deliver LOLI's products are upcycled agility, autonomy, and reactivity. from organic food supply, wa- terless, vegan, non-GMO, and By the end of 2021, four companies cruelty-free. The packages are were part of Fable's investment port- plastic negative and are made create skincare that works. Her folio: of freshly grown mushrooms. commitment to science means Perfumer H: an artisan fra- Stratia: born from a blog under ingredient declarations, and a grance brand founded by British Founder & CEO Alli Reed’s commitment to efficacy for a perfumer Lyn Harris, the only pseudonym “The Acid Queen” wide variety of skin types. Verti- classically trained female nose in 2016, Stratia is a company cally integrated, all products are in the UK. Lyn founded Per- obsessed with research and formulated and manufactured fumer H in 2015 with the desire science-backed ingredients to in house. clear labeling, transparent In 2021, Natura &Co launched Fable Investments, our corporate investment subsidiary, to support innovative, emerging businesses. Natura &Co annual report – 2021Our businessesOur major launches 64 65 Avon Artistique Monet Collection Inspired by Claude Monet’s gardens, the new collection in the Artistique family is available in two scents that bring the majesty of the iconic flowers in Giverny to life: Artistique Water Lily, which combines lotus flower, a pure peony ac- cord, and the delicate touch of blonde woods, and Artistique Wisteria, which blends the blossoming beauty of wisteria with the fresh garden feel of capucine and a soft musk finish. Ultra Lipsticks Avon reinvented its number one lipstick for richer color and creamier comfort across the 60 best-selling shades. The lipstick now comes in a modern and sophisticated shape, making it easi- er to achieve the precision of velvety matte or creamy finishes. The upgrad- ed formula boasts an exclusive blend of nourishing oils, including avocado oil, and reveals a new fragrance, mocha crème, for a comforting scent. Far Away Beyond The expert perfumers from Avon have created an extract using 100% upcycled vanilla beans, sustainably and ethically sourced from Mad- agascar, which would otherwise be discard- ed. The innovative double distillation process reveals new vanilla notes – sensual, smoky, and woody with an addictive salty-sweetness. The fragrance is enriched with sandalwood, juicy pear, and jasmine. ANEW Power Serum and ANEW Hydra Pro Vita-D Avon added two new products to its revo- lutionary, accessible ANEW skincare range. The ANEW Power Serum, which uses Avon’s award-winning patented Protinol™ technol- ogy, strengthens the skin’s foundation with a unique dual collagen boost; it also contains niacinamide, which helps renew skin at the surface. ANEW Hydra Pro Vita-D Cream is brimming with exclusive Pro Vita-D technology to help activate the skin's daily dose of vitamin D. This lightweight, oil-free formula melts into the skin to lock in 72-hour hydration and that healthy-looking glow. Natura &Co annual report – 2021Ourmajor launchesNatura 66 Biōme Natura launched its first-ever body and hair shampoo bars, totally based on regenerative solutions. The palm oil used in its formula- tion is cultivated in a pioneering sustainable agroforestry system in Brazil. The packaging uses recyclable paper and no plastics, and consumers can also purchase a reusable dish to hold the bars, made from pioneering technology that captures methane gas and turns it into bioresin. The high-performance, ultra sensorial formulas are 100% of natural Ekos origin and vegan, with a unique fragrance Natura enhanced its entire vegan Ekos that combines wood notes, vetiver grass and range with new formulas, now three times copaíba, an essential oil from the Brazilian more potent, and introduced a new bio-ac- tive from the Amazon forest: tukumã. The Ekos Tukumã line comprises a series of bath and body care products with a powerful dual anti-aging action. While the crude tukumã oil combats the loss of hyaluronic acid in the skin, the tukumã butter increas- es its natural production by up to 77%. The tukumã palm regrows even after significant fires, regenerating the forest soil. biodiversity. Chronos Super Serum Wrinkle Reducer The new addition to the Chronos range brings together prebiotics extracted from jatobá and casearia – ingredients from Bra- zilian biodiversity – with a potent probiotic to create a triple-action care to combat all types of wrinkles, from deep to fine lines. Natura Chronos, which celebrated 35 years in 2021, pioneered the idea that women can have a healthier complexion by giving their skin precisely what it needs at each stage of life. Essencial Oud Vanilla This boasts the rare and sophisticated oud, which is extracted from the resinous heart- wood of the agar tree found in the dense forests of Southeast Asia. The essential oil is combined with the Vanilla bahiana, from the Brazilian Atlantic Forest, now used for the first time in perfumery. The result is a warm, woody scent with a floral bouquet that com- bines rose, lily-of-the-valley, and jasmine, ideal for special occasions. Natura &Co annual report – 2021Ourmajor launchesNatura &Co annual report – 2021 Our major launches 68 69 The Body Shop Body Butters In 1992, Dame Anita Roddick, founder of The Body Shop, created the first Body Butter in her own home kitchen. The rich formula she made transformed body moisturizer forever. Now, this iconic range is even better, providing a 96-hour nour- ishing effect. The new and improved Body Butters are registered with The Vegan Soci- ety and are made with at least 95% natural origin ingredients, including shea butter handcrafted in Ghana, with fully recycla- ble packaging sourced through The Body Shop’s Community Fair Trade program. White Musk The legendary White Musk collection cele- brated 40 years with the addition of three eau de parfum scents to be used in con- junction with the more subtle original for- mula. It was the first fragrance in the world to amplify the use of synthetic, cruelty-free musk as part of The Body Shop’s long-last- ing commitment to animal welfare. Now registered as vegan, the scent comes in a 100% recyclable bottle made from 42% re- cycled glass – and no unnecessary second- ary packaging. Hair care routines Designed to improve the appearance of damaged hair, this new range contains Vegan Silk Protein, a 100% plant-based pro- tein that replicates the chemical structure of the silk produced by the common Eu- ropean spider. The formulas are registered with The Vegan Society and contain at least 90% ingredients of natural origin, including tea tree and moringa, both used for the first time in hair care. The bottles and tubs are made with 100% recycled plastics and pay homage to the original “Boston round” packaging introduced by Anita Roddick in the 1980s. Refill, reuse, repeat The Body Shop is calling for a revolution to clean up the planet by making refills easy, convenient, and accessible to everyone. Already in 410 stores, it has an ambitious rollout plan to have refill stations in 800 stores by the end of 2022, inviting custom- ers to pop in, pick up an aluminum bottle, and refill, reuse, repeat. The product line-up includes hair care, shower gels, and hand washes from the best-loved ranges. The move revives the visionary service intro- duced in 1976 at the company’s first store in Brighton, England. Natura &Co annual report – 2021 Our major launches 70 71 Aesop Othertopias Crafted for those seeking complex and unique aromas, Aesop launched a trio of fragrances inspired by the juxtapositions found in certain spaces - environments that blur the boundaries of past and present, real and unreal, here and there. Each one of the fragrances, Miraceti (resinous, woody, spicy), Karst (fresh, herbaceous, marine) and Erémia (green, floral, citrus), respectively embody the worlds of the boat, the shore, and the wasteland, to challenge perceptions, invite a conversation with nature, and unlock reverie. Parsley Seed Anti-Oxidant Intense Serum Lightweight and rapidly absorbed, the serum is formulated to hydrate and fortify the skin with a pleasing matte finish. Suited to normal, combination, and sensitive skin, it is ideal for those living in urban envi- ronments and warm or humid climates. The product forms a breathable film on the skin, thanks to red algae and tara gum extracts. This invisible yet effective barrier helps to minimize the deposition of air- borne pollution particulates. The Adventurer Roll-Up The joint endeavor between Aesop and RÆBURN, the London-based responsible fashion upcycling pioneer, is a portable pouch for on-the-go hand care. Hand- crafted from pre-consumer recycled cotton, the sack features three purpose-fit pockets to house a trio of Aesop prod- ucts: Resurrection Rinse-Free Hand Wash, Resurrection Aromatique Hand Balm, and the new Resurrection Rinse-Free Hand Mist. A co-branded cotton tape enables the pouch to be rolled up securely for neat portability inside any bag. Sensorium Within the granite-covered walls of Aesop Sydney, The Sensorium, invites visitors to engage with the alchemic art of per- fumery. The cocoon-like structure whose curvature makes reference to the waves of scent diffusing through the air, instils a sense of calm, attracting curious minds and inquisitive noses to the Fragrance Armoire - a cabinet which opens onto an inner world where customers can navi- gate Aesop’s growing range of fragrances. While there, their coat or scarf is imbued with their chosen scent in an infusion chamber. Natura &Co annual report – 2021 Our awards and recognitions 72 73 Awards and recognitions + Certified B Corporation by B Lab, making Natura &Co the world’s largest B Corp ™ + Direct Selling News Global 100 – ranked #2 of 100 of the world’s top direct companies in the world + Corporate Knights Global 100 plus ranked #42 in a list of 8,000 companies + Globescan Top Sustainability Leaders - ranked #3 + Dow Jones Sustainability Index Top 100 S&P - listed for the eighth consecutive year in the Emerging Markets portfolio, aimed at recognizing companies that create long-term value for shareholders, through the adoption of sustainable business practices. Of the 108 listed companies in its portfolio, Natura &Co is one in ten Brazilian companies and the only representative of the beauty sector. + The RepTrak Company Top 100 Reputable Companies – ranked #42 + Albert Certification received for Tree of Plenty documentary with WaterBear Network + Ranked in top 10 of WWD Beauty Inc’s Top 100, for 2020 Our Commitment to Life Moving towards a common goal Our Commitment to Life 76 77 2021 was a landmark year for Natura &Co; our four brands came together as a collective of businesses with a single purpose: creating the best global beauty group FOR the world. Our Commitment to Life: One Year On online event and our participation in COP26 were key sustainability milestones for us. In June 2020, Natura &Co launched Commitment to Life, our Sustain- ability Vision, to address some of the world’s most urgent and pressing from all over the world, broadcast live on LinkedIn, Facebook, and YouTube with almost 20,000 viewers. challenges. Remaining true to our During the event, we shared our belief that business can and should view of what a roadmap to protect be a force for good, we have estab- biodiversity could look like. Along- lished bold targets for the next de- side other leading organizations, cade, and, during the past one and Natura &Co has been working to a half years, we have been building develop an Agreement on Nature the foundations to ensure we will by placing value on biodiversity, meet them. Reaching our goals will require innovation and collaboration incentivizing nature-based solu- tions, and providing resources to traditional communities. The panelists discussed the current across the entire end-to-end supply focus of encouraging the adoption chain, including downstream and of transformative, post 2020 global upstream emissions. Therefore, biodiversity framework at Conven- besides working internally with our tion on Biological Diversity COP15. teams, we have connected with business leaders, governments, and civil society to explore how we can work towards creating the best global beauty group FOR the world and a more sustainable world for everyone. In 2021, we celebrated Commitment to Life’s first year anniversary with an online event with expert panelists Natura &Co annual report – 2021Our Commitment to Life78 79 To Address the Climate Crisis and Protect the Amazon ↓Photo: Sebastião Salgado, State of Amazonas, Brasil, 2009 The Amazon is the largest rainforest in the world and home to 10% of the planet’s biodiversity. However, in the last few years, we have seen the Amazon gradually become a net emitter due to drought and deforestation caused mostly by illegal mining, illegal logging, and the conversion of forest into pasture and farming. Until this year, data on the health business model over the last 20 point. We have vowed to contribute of the Amazon was disparate and years which we continue to expand, to the preservation of three million hard to use. That’s why we decid- because we believe our future re- hectares by 2030 and will work to ed to support the development flects the destiny of the rainforest. foster collective efforts necessary to and launch of PlenaMata through Since 2010, Natura has invested more achieve zero deforestation of a partnership between Natura, than R$ 2.55 billion in the region and the Amazon by 2025. MapBiomas, a platform that brings established relationships with 40 together scientists from different communities and over 8,155 families, Natura &Co is supporting Con- NGOs, tech start-ups and universi- already exceeding our 2030 target. certação pela Amazônia (Amazon ties, and InfoAmazônia, a website Innovation is the key driver of our Concertation), a network of over 400 dedicated to providing information presence in the region, either by leaders from the public and private about the Amazon. Tracking de- forestation in the Amazon in real helping turn biodiversity ingredients into products or by developing new sectors, civil society organizations and academia, engaged in finding time, PlenaMata overcomes these regenerative agricultural solutions, solutions for the sustainable devel- problems by creating a centralized such as the agroforestry system opment of the region. The network database to inform initiatives for the Natura has invested in to sustainably promoted debates engaged in the conservation and regeneration of produce palm oil. the Amazon biome. Its purpose is to themes of youth, territorial organi- zation and land title regularization, provide visibility to what is hap- The group also aims to step up its narratives, culture, bioeconomy, po- pening and engage governments, actions to protect the Amazon by litical intelligence and engagement the private sector, civil society, and building on Natura’s more than 20 of the business sector. Concertação local communities to fight against years’ experience in the region. In functions as a democratic space for deforestation and foster successful one year, we have expanded Na- the dozens of initiatives in defense of conservation and environmental tura’s preservation area from 1.8 to the Amazon; a place to meet, enter regeneration initiatives. 2 million hectares of land, an area into dialogue, boost the impact of equivalent to half of the Netherlands, their actions and generate proposals When it comes to the Amazon however this is still very far from and projects for the forest and the region, we have developed a unique being enough to revert its tipping population living in the region. Natura &Co annual report – 2021Our Commitment to Life80 81 With over 40 years of campaigning for social and environmental justice, it was important for The Body Shop’s voice to be heard at COP26. We partnered with B Lab and young activists to learn how young people’s voices can influence better decisions; we joined other businesses to share learning on accelera- ting action to tackle the climate emergency and we listened and learned from youth activists at the fringe events in Glasgow and joined the Climate Justice March. Our key message at COP26 continues to advocate for a just transition, for all people, as the world moves towards a new green economy.” — David Boynton, CEO, The Body Shop a circular economy (rapid adoption of its refill station concept) and open and inclusive hiring (removing barri- ers to finding a job in the beauty in- dustry). The Body Shop also piloted a 2030 model Boardroom, created by the B Lab team, which imagined how a boardroom would work in the new decade, led by younger and more diverse members. The goal was to understand how we can lis- ten to the voices of the people who will be affected in 2030 and beyond at this moment in time. As part of our participation in COP26, the 26th UN Convention on Climate Change in Glasgow, we invited Sebastião Salgado to speak on our behalf and to illustrate the A collective voice for the business sector of a movement to raise awareness impact deforestation has had on of these changes in our planet’s the region during the private sector most significant biome, and to cre- dinner promoted by the World As a parallel event to COP26, we ate new development pathways for Business Council for Sustainable proudly sponsored Sebastião Sal- gado’s exhibition, Amazônia, at the the regeneration of the Amazon and its precious biodiversity, the exhibi- Development. Science Museum in London. One of tion is on an international tour that Across the 12 days of COP26, nine the most respected photographers began at the Philharmonie in Paris Natura &Co senior executives rep- in the world, Salgado has materi- and includes the MAXXI in Rome, resented their perspective on the alized the concept of sustainability SESC in Sao Paulo and the Museu do climate crisis and were present at This is a time when we need all businesses to openly address and listen to the voice of young people and I would say that if a business is not able to do that, is not able to face the really quite clear and direct challenges from young people, I don’t think that that business is going to survive for that much longer.” and fascinated audiences with his Amanhã in Rio de Janeiro. 47 events, including 29 speaking — Charmian Love, B Lab UK testimonial and beautifully powerful engagements. Natura &Co hosted images from the Amazon. Going back to its roots as a pio- four live panels focused on the im- neering company that has thought portance of protecting the Amazon The exhibition had over 21,000 visi- and acted differently throughout in the battle against the climate tors between the launch on October its history and has long had a voice crisis and took a deep dive into how 14th until the end of 2021. Salgado in the debate, The Body Shop was women and girls are disproportion- has spent years visiting the Amazon also present at COP26. The brand’s ately impacted by climate change. and documenting the forest, its CEO, David Boynton, speaking on people, and the devastating chang- behalf of Natura &Co, showcased To build awareness and engage- es the region is undergoing. As part two inspiring themes: examples of ment with our internal and external Natura &Co annual report – 2021Our Commitment to Life82 83 The question is not how to separate human beings from the forest. We need to find ways to get closer to it so that we then feel more connected to it. We need to embrace the problem to help solve it.” — Tasso Azevedo, Coordinator MapBiomas & SEEG initiatives, former Chief MapBiomas, Brazilian Forest Service Click for video audiences and demystify some Andrea Alvares, Chief Brand, Innova- and Samela Awiá, Indigenous En- of the complex issues addressed tion, International and Sustainability vironmental Activist, discussed the during the conference, we devel- Officer at Natura, panelists Izabella value of keeping our forest standing oped multiple content streams Teixeira, Former Environment Minis- and how this value can be shared including the Natura &Co Newsreel, ter, Brazil 2010-2016, Tasso Azevedo, widely with others. Moderated by a daily audio report summarizing Founder and general coordinator, Andrea Alvares, Chief Brand, Innova- the COP26 news, produced in three MapBiomas and Beto Verissimo, tion, International and Sustainability languages for 12 days. We devel- Co-founder Imazon, explored the Officer at Natura. oped eight factsheets download- connection between climate change able by a QR code that was available across all UK The Body Shop stores, and nature loss and how the two issues must be addressed together. Hosted LIVE by Natura &Co at The Body Shop store in Edinburgh, connecting customers directly with “The Climate Crisis is not Gender Natura &Co’s COP26 resource hub Natura &Co, in partnership with Neutral” panel explored how we can on its website. The PlenaMata portal Global Landscape Forum, explored eradicate the inequality women and was screened live across nine The the challenges and opportunities girls face in the fight against climate Body Shop stores in Glasgow and for the Amazon through the lens of change. Moderated by Christo- Edinburgh and one large screen at business in “Amazônia Is the Way pher Davis, International Director Aesop’s Edinburgh location to en- to Our Future: Business as a Force of Corporate Social Responsibility gage consumers on the critical real for Good”. Expert panelists Roberto and Campaigns at The Body Shop, time deforestation numbers in the Waack, President Uma Concer- panelists included Ellen Windemuth, Amazon. tação pela Amazônia, Coalizão Brasil WaterBear Network Founder and Panel highlights at COP26 In “Amazônia is the way to our fu- Clima, Florestas e Agriculture, Karen CEO, Jessica Omukuti, research fel- Oliveira, The Nature Conservan- low at Oxford Net Zero, and Shifrah cy Brazil, Lucy Coast, Business for Jacobs, Chief Impact Officer at ture: Why the world’s largest rain- Nature, Tasso Azevedo, Coordinator Plastics for Change. forest is essential to us all”, hosted by MapBiomas, Marina Grossi, CEBDS We also heard that large countries have committed to investing in the preservation of the Amazon, but this will be useless if it is not built with us.” — Samela Awiá, Indigenous Environmental Activist Natura &Co annual report – 2021Our Commitment to LifeWe have been working on the Agreement on Nature, the “post- 2020 global framework on biodi- versity,” which will be discussed in China. Our goal is to leave the event aligned around a significant number the world can track to stem biodiversity loss, as was the case with the Paris Agreement, a legally binding international treaty on cli- mate change to keep global warm- ing well below 1.5oC, compared to pre-industrial levels. In 2021, we spoke to several regulators to stress the importance of this agreement being ambitious. In the coming years, we will con- tinue to build on an already strong track record of adhering to the UN Convention on Biological Diversi- ty and to expand this practice by enforcing the Nagoya Protocol and payments of ABS (access and benefit sharing) to prevent biodiversity loss. The group has partnered with the Science-Based Alliance to establish a new framework for the protection of nature. Our path to Net Zero We have a bold commitment to become Net Zero across our entire value chain. To achieve this goal, we have pledged to set science-based targets across scopes 1, 2, and 3 by 2022. During 2021 it was essential for us to understand the baseline from which we were working. → Photo: Josefina Bietti & João Ávila 85 We need to work with women, girls, the elderly, and the disabled to ensure they have the right skillsets and capacity to anticipate and respond to the future climate change risks such as floods and droughts that will come with the warming of the planet to 1.5oC.” — Jessica Omukuti, research fellow at Oxford Net Zero COP15 This year, COP15 – the 15th brands and our perspective on Convention on Biological Diversity biodiversity loss, the greatest threat - was divided into two parts due to for both climate change and the COVID-19 restrictions. Natura &Co global economy. The technical was honored to be invited as the part of the conference will be only voice from the business sector held in China later in the year, and to speak at the opening ceremony, travel allowing, we will be there. courtesy of our Executive Chairman Beforehand, we will attend the and Group CEO Roberto Marques. Marques introduced our four preparation meetings to be held in Geneva in March 2022. Natura &Co annual report – 2021 86 Starting point: Our four brands were at different we take in consideration the brand efforts around a common global level, Avon accounts for most of the goal on climate change. stages of greenhouse gas (GHG) emissions with 70% and Natura with measurement: Natura, Avon, and almost 18%. Aesop have calculated scope 1 & 2 In 2021, we also partnered with the World Economic Forum emissions and The Body Shop start- In May 2021, we concluded an through Champions for Nature, ed the creation of their baseline. international fundraising of US$1 an alliance of leaders from the For Scope 3 footprints each brand billion in bonds linked to sustain- private sector, government, and has calculated their levels to varying ability goals, the largest of this kind civil society, using their experience degrees. issued to date in Latin America. The and ambitions to pave the way to What we have done: We hired an external consultant, transaction commits Natura Cos- a Net Zero, nature-positive glob- meticos to meet two environmental al economy. Last year, Roberto performance indicators by year-end Marques, Zac Goldsmith, UK Minis- Carbon Trust, to consolidate the 2026: reducing scopes 1, 2, and 3 ter for the Pacific and the Environ- organizational footprints for scope 1 of relative greenhouse gas (“GHG”) ment, and Inger Andersen, United & 2, to calculate and consolidate the emissions intensity by another 13% Nations Under-Secretary-General footprint for scope 3 and to calcu- and reaching 25% of post-consumer and Executive Director of the Unit- late the science-based targets for recycled (“PCR”) plastic in plastic ed Nations Environment Program, 1.5°C pathway, in line with the SBTi product packaging. became the organization’s requirements Co-Chairs. Partnerships to create Across 2021 we created a task force gathering people from the group a stronger voice. As a co-founder of Transform to We were honored to become part of a group of 14 influential global and all brands to calculate the Net Zero, together with 10 other companies and brands that came GHG Inventory for Natura &Co at global companies, including Mi- together to support and scale up group-level. Over the 11 months, crosoft, Nike, Danone, and Mer- the innovative and ground-breaking creation of genuinely sustainable We are proud to have become a Belém), and illustrates the impor- after many meetings with several cedes-Benz, our goal is to accelerate solutions developed by the finalists markets. founding partner of WaterBear, a tance of stopping deforestation in departments across all Business Units and six workshops, we man- the transition to a Net Zero global economy and lead by example to of the Earthshot Prize. Founded by Prince William and The Royal The Terra Carta Seal was created streaming platform dedicated to showcasing award-winning docu- the Amazon region, and the po- tential of creating a powerful forest aged to conclude our GHG Inven- enable all businesses to decarbon- Foundation in 2020, the award aims with the knowledge that different mentaries as well as original content bioeconomy there. By bringing this tory baseline for Natura &Co, as the ize their supply chains. Transform to discover and scale up the best industries face unique challenges inspired by the United Nations Sus- story through WaterBear, we hope first step to address our ambition to to Net Zero’s 2025 goal is for the solutions to help repair our planet in their transition to a sustainable tainable Development Goals (SDGs). to engage its Gen Z and millennial become Net Zero. world’s largest 1,000 companies to over the next 10 years, with a focus future and that all are at different Through storytelling, advocacy, audiences to learn more and to take Outcomes: Our total GHG emissions for 2020 are calculated in 2.402 M TCO2eq have targets backed up by transfor- on projects that protect and restore stages on their journey. An accel- distribution across the platform, action to protect the world's largest mation plans to achieve Net Zero by nature, clean our air, revive our erated pace is required if we are events, and cross-marketing, Wa- source of biodiversity. no later than 2050. oceans, build a waste-free world, to achieve the 1.5°C target, restore terBear engages its audiences with and fix our climate. biodiversity and benefit the lives compelling content, raising aware- without including the use phase and In 2020, our Executive Chairman and and livelihoods of current and future 5.756 M tCO2eq including the use Group CEO Roberto Marques be- Our efforts to battle climate change generations. The Seal is awarded phase. Excluding the use phase, came a board member of the United were recognized with the receipt of to companies whose ambitions ness of our vision in key markets around the world. Tree of Plenty, our first short film created together, Natura &Co Latin America accounts Nations Global Compact. We are the Terra Carta Seal, which ac- are aligned with those of the Terra tells the story of the extraction of for 54% and Avon International also now patrons of the UN Global knowledges global companies that Carta, a recovery plan for Nature, ucuuba seeds by the Movimento de 34%, followed by The Body Shop Compact Climate Ambition Acceler- are driving innovation and demon- People, and Planet, launched Mulheres Ilhas de Belém (a wom- with around 11% and Aesop at 1%. If ator, which aims to foster collective strating their commitment to the in January 2021. en’s movement from the Islands of ↑ Photo: DesertifiKation – Antonio Aragon Renuncio Natura &Co annual report – 2021Our Commitment to LifeTo Defend Human Rights and be Human Kind 88 89 A truly inclusive workforce focuses on culture, and not only on the balance between men and women. By 2023, our aim was to go beyond the UN SDG goal of 30% women in leadership positions by increasing our goal to 50%. Women in leadership Love, Co-founder of B Lab UK, Ange- takes into consideration significant la Cretu, CEO of Avon and Alessan- changes to the businesses including In 2021 we met our goal of 50% early dra Orofino, Activist and Co-Founder relatively high turnover, harmoni- by achieving 50.4% female leaders at and Executive Director of Nossas. zation of grading structures across management levels. Whilst we have The panelists shared insights on how the businesses and the introduction achieved our target, we will continue to accelerate progress on gender of new hires. It remains our priority to remain vigilant, always checking inequality and how women can be to completely close the unexplained on recruitment and turnover and better supported in the workplace. pay gap by 2023 and to do so we are ensuring we maintain this balance. Across our total workforce (35,563), we currently have 67.8% women, 30.1% men, 0.1% not declared and 1.9% unavailable data. Equitable pay One of the first steps on our journey impacting rewards as well as more consistent and monitored pay equi- focusing on policies and procedures to achieve equitable pay by 2023 was to undertake an in-depth analysis of our position on equitable pay and ty adjustments. Living wage In 2020, we committed to delivering To honor International Women’s gender balance, conducted with the Day 2021, our group hosted a special global HR consultancy Mercer. The a living wage for our people in more panel discussion and online forum goal was to understand what we than 100 countries by 2023. By this, to address gender inequality in the have achieved so far, and to decon- we mean a salary which enables a workplace in support of the United struct the challenges and roadblocks worker to afford a basic but decent Nations Development Goal 5—to to closing the equitable pay gap. or even higher standard of living achieve gender equality and em- through employment. We have set a power all women and girls—and In 2021, our overall raw pay gap clear baseline, which has allowed us how we can make greater progress improved from –15.30% to –10.21% to understand where we currently on achieving this objective. The (+5.09pp) indicating improvements stand. For every associate, our cur- panel discussion was led by Alys Key in female representation across Na- rent percentage is 96%, 4% behind from inews.co.uk with special guests tura &Co and average pay. Our un- where we want to be. Even so, we Sanda Ojiambo, Executive Director explained pay gap increased in 2021 are confident that we will reach our of UN Global Compact, Charmian from –0.9% to –1.19% (-0.29pp) which goal ahead of the target date. Natura &Co annual report – 2021Our Commitment to Life90 91 The Natura Institute continued to expand its efforts to ensure that all children and youth can attend high- quality schools in Brazil and in other countries in Latin America. Beauty in diversity A key goal of Commitment to Life is our ambition to work towards cruitment. We launched our gender suring the representation of those called “DIVA’s in leadership” that pro- respecting privacy legislations in our December 2021, our Board of Direc- pronoun guide across the group, with disabilities, we are also looking moted activities, roundtables, and main markets. This study will give tors approved our Group Human as we believe that striving to adopt at learnings from Natura and Avon pocket classes focused on ethnic- us a complete view of the measure Rights policy in line with the UN inclusive language is an important in Brazil where they are making racial and gender equity and includ- of income among our Consultants Guiding Principles, one year ahead 30% inclusion of underrepresented step towards building employee great strides; 7.2% and 5% of their ed themes such as ancestry, person- in ten key geographies. This will be of schedule, and plan on rolling out groups across all our management awareness and engagement on di- employees respectively identify al power, limiting beliefs, emotional benchmarked against a living wage the policy across the Group and our levels. We are considering six fac- versity and inclusion developments. themselves as having either physi- intelligence, people management, and should be concluded in 2022. four brands in 2022. tors: ethnicity, socioeconomically cal or mental disabilities. Our work and personal branding. disadvantaged, sexual diversity, Our plan is to create a workforce in collecting data from across the We are also working hard to ensure gender identity, and physical or that reflects the societies in which group continues, so that we can un- The DIVA project will help Avon that our supply chains are fully sus- mental disability. We believe that we operate. Therefore, our first step derstand precisely what work needs Brazil achieve the goal of 30% of tainable. Therefore, another point for Natura &Co to be the best beau- ty group for the world, we must be is to understand the demographic composition of these regions. Our to be done to put the necessary plans in place to effect change. black women in management positions by 2030. of attention has been the develop- ment, detection, and correction of plans to remedy any human Investing in our communities and key causes the most inclusive as well. We strive work to capture sensitive personal to raise the baseline for inclusion, data in line with data protection diversity, and belonging, not only laws and anonymity requirements Leading with diversity Aiming to have a workforce as within our industry, but across has come up against significant diverse as the country in which it Creating value for our rights infringements that we iden- Consultants and Representatives We intend to understand how tify. Over the past year, we have charted our current policies and Our communities In 2021, Natura &Co invested US$59 the world. global, technical, and legal chal- operates, Avon Brazil launched Proj- we create value, wellbeing, and practices regarding human rights million into causes whose main lenges. As a result, we are reviewing ect DIVA (Diversity + Avon), which development for our network of and mapped these against the objectives were to help our wider We recently founded a new diversity, what alternative methods are open encompasses initiatives focused on Consultants and Representatives in best practice captured by the UN network. These are investments inclusion, and belonging strategy for to us to collect the required data, ethnic-racial equity, attracting new our markets, encompassing more Guiding Principles. The group aims aimed at addressing issues relat- the four brands. This involves inclu- navigating the current restrictions, talents and investing in the develop- than 7.7 million people. In 2020, we to enforce full traceability and/or ed to climate crisis including the sion initiatives based on activism and whilst also ensuring that we uphold ment of our staff. DIVA will promote determined how we would track certification by 2025 and alongside protection of the Amazon, educa- social impact. We have been work- the highest levels of compliance. awareness of the theme amongst information related to the earn- these targets, we will implement tion, supporting women, Human ing on training so that our people This baseline should be concluded leaders, employees, sales force, ings, education, health, and digital specific programs for supply chains Kind actions, diversity and inclusion understand the meaning of inclusion in the beginning of 2022. partners, and consumers. One of the capabilities of our network. We are of critical ingredients in the coming initiatives, animal welfare, circularity and setting goals and objectives to first activities was to create a virtual currently building the methodology years, specifically for palm oil, mica, and regeneration, culture and local make sure we are unbiased in re- When considering our work in en- event on Avon’s YouTube channel and data, setting the baseline while alcohol, cotton, paper and soy. In development. Natura &Co annual report – 2021Our Commitment to Life92 → Photo: Josefina Bietti & João Ávila Avon One in five women is consistently in 2021. Commissioned as part of tial guidance on breast health, the the My Story Matters campaign, importance of getting checkups subjected to verbal abuse by an in- the new research surveyed 8,000 and education on how to take ac- timate partner. To raise awareness women globally from countries tion. Avon also developed a training of this as an insidious and highly which included the UK, Poland, Italy, module for our Representatives prevalent form of abuse, Avon South Africa and the Philippines. aiming to equip them with knowl- launched the Speak Out No More The research highlighted that 41% edge of the signs of breast cancer Verbal Abuse campaign in partner- of women have lost confidence be- and help raise awareness. ship with the No More Foundation. cause of lockdown restrictions. Avon representatives, associates and customers promoted a call to To celebrate the achievements of Natura Despite the continuing challenges action against verbal abuse with the use of engaging content that women around the world, Avon partnered with model Ellie Goldstein of the pandemic, including pro- longed school closures, the Natura was shared with all its communities, and professional dancer Oti Mabuse Institute continued to expand its reaching over 10 million people. The to launch a global gallery for women efforts to ensure that all children campaign also carried out research to share their different stories and to and youth can attend high-quality to understand the impact of verbal connect with other women around schools in Brazil and in other coun- abuse that will provide powerful the world. The My Story Matters tries in Latin America. Throughout insights for the brand on how to Gallery was launched ahead of the year, the institute focused on better support women and help International Women’s Day, and cel- supporting the reopening of public rebuild their lives. ebrated stories of strength, grit, and schools and advancing initiatives to determination, from extraordinary contribute to a relevant improve- Most women (68%) find strength in triumphs to everyday wins. ment to student learning. hearing relatable stories from other women and 72% find comfort in In October 2021, during Breast The institute amplified its presence being able to share their experienc- Awareness Month, Avon launched in Brazil to 11 states, increasing the es. That was one of the findings of its Boob Portal, which includes a number of students benefiting from research promoted by Avon earlier collection of real-life stories, essen- 1.3 million to 2.3 million. Natura &Co annual report – 2021Our Commitment to Life It strengthened its activities in Ar- offers such as university scholar- in Europe, with an aim to collect one able achievement considering the gentina, Chile, and Mexico and initi- ships, financial education courses million signatures for a European significant store closures across ated the groundwork for the launch and language proficiency courses, Citizens’ Initiative to push back and the world. 94 of programs in Colombia and Peru. and more than 250,000 Consultants challenge the European Parliament Financed with funds from the sales participated in the brand’s mobili- to uphold the ban on animal testing. of Natura Crer Para Ver (Believe to zation campaigns for education. In Australia, The Body Shop sup- ported people fleeing Afghanistan Aesop As a continuation of its global com- mitment to uplifting communities through literature, Aesop support- See) product lines, one of the insti- tute’s commitments is to augment the number of full-time public high schools, which in 2021 increased by more than 2,500. In partnership with Natura Crer para Ver products, in 2021 the Institute launched “Aprender Hoje” (Learn Today), a national mobiliza- tion campaign that supports and offers educational opportunities for more than one million Consultants, aimed at helping them to achieve their dreams for the future. The Body Shop has its roots in activism, tirelessly pursuing social and environmental justice. The Body Shop The Body Shop has its roots in to enter the country which involved ed two major projects. During the calling on the government to in- month of June, it celebrated Pride crease the number of humanitarian month by presenting an ephemeral visas for Afghan refugees. On International Women’s Day, The queer library in three of its stores: Aesop Bleecker Street (New York City), Aesop West 3rd Street (Los Body Shop launched a movement Angeles) and Aesop Queen Street called the “Self-Love Uprising”, sup- West (Toronto). To give the fea- ported by British activist and actress tured authors the prominence they Jameela Jamil and Millennial Ther- apist Sara Kuburic. The campaign accompanied the publication of a report which identified a self-love deserve, all shelves were cleared of Aesop products and stocked entirely with books elevating the voices and stories of LGBTQIA+ individuals from In Argentina, the institute, already and environmental justice. In the wishing they had more respect went into the store on that day got to present in three provinces, formed UK, it was involved in the Kill the Bill for themselves and one out of two take a complimentary book home. activism, tirelessly pursuing social crisis amongst women, with 60% around the world. Everyone who a strategic alliance with the CIPPEC campaign working to protect the women feeling more self-doubt Foundation (Centro de Imple- right to peaceful protests that are than self-love. The study, designed Aesop also supported Saint Heron’s mentación de Políticas Públicas at risk of being banned through by The Body Shop with market para la Equidad y el Crecimiento) to support the government’s efforts to new legislation. With the conviction that this is an important part of the research firm Ipsos, ran between November and December 2020 and Inaugural library of rare and collec- tors’ edition books, spotlighting the history of black identity. A multidisci- transform public high schools. The expression of democracy, The Body interviewed over 22,000 people in plinary platform, studio, and creative focus in Mexico was on improving Shop petitioned the House of Lords, 21 different countries. The Self-Love agency, Saint Heron has the mission literacy education in the states of the High Chamber of the British Index comprised several academic of building spaces that provoke rad- Veracruz and Yucatán and in Chile, parliament, and successfully partic- measures of self-worth, wellbeing, ical conversation around thoughtful, the goal is to reduce inequalities in ipated in their rejecting the propos- and happiness, and revealed how original works that amplify vital voic- learning at some of the most vulner- al, sending it back to the House of age, gender, country, and living es and conceptual imagining. able schools. Commons for amendment. This is standards impact how people feel charitable platform— donated AUD funding, as well as time, exper- a continuing campaign. about themselves. Entitled ‘Anatomy of Generosity’, Ae- $100,000 to each of these organiza- tise, and products. Aesop has now The Natura Institute also supports sop's 2021 collection of Gift Kits was tions, independent of sales. amplified its reach, giving to causes Natura Beauty Consultants in their The Body Shop also continues to Support of the Community Fair designed to honor and encourage that have a much more global out- development and education, for lead the way in campaigning in the Trade program continues to be everyday acts of kindness. Each kit Created in 2017, the Aesop Founda- look and reach, such as Black Lives themselves but also for their fam- European Union against a possible at the heart of The Body Shop. In has been tied to one of five regis- tion began its activities supporting Matter and the Stop Asian Hate ilies, communities and countries. return to animal testing due to con- a turbulent year, through hard tered charity groups. As a concrete initiatives that promote literacy campaign. It has also been support- In 2021, Natura reached more than cerns regarding chemical safety. It work and dedication, the value of gesture of support, the Aesop Foun- throughout Australia, partnering ing Médecins sans Frontières and 200,000 Consultants with learning joined forces with other companies trade remained stable, a consider- dation— the brand’s now global with third-party charities to offer their life saving work in Afghanistan. Natura &Co annual report – 2021Our Commitment to Life 96 97 Embrace Circularity and Regeneration ↓ Photo: Aerial view of Natura's palm SAF study units, Amazon region, Brazil Product packaging currently accounts for more than one third of our carbon emissions, which makes it our biggest challenge on the path towards becoming Net Zero. To achieve full product circularity and meet Net Zero ambitions, we will need to seek new, innovative solutions, hence our push into fully embracing circularity and regeneration across the group by 2030. Today, 81.2% of our packaging In early 2022, we signed the Global Henkel, and LVMH is designed to material is already reusable, recy- Commitment on the New Plastics meet growing consumer demand clable, and compostable. Our goal Economy, led by the Ellen MacAr- for greater transparency regard- is to reach 100% by the end of the thur Foundation. This initiative ing the environmental impact decade and generally reduce the unites over 1,000 organizations, of cosmetics products (formula, overall amount of packaging mate- including businesses and govern- packaging, and usage), thus helping rial that we use. ments, and engages in making sure them to make more informed and that 100% of plastic packaging can sustainable choices. To achieve this One of the tasks as we moved for- be reused, recycled, or compost- objective, the consortium will be ward with our targets was to create ed by 2025. Together with UNEP, open to all cosmetics companies our Packaging Hub, which will pro- UN Environment Programme, the wishing to join and contribute to vide more breakthrough innovative foundation brought together key designing a system that will allow ideas on making packaging more stakeholders to rethink and redesign consumers to compare the environ- circular. This collaboration mech- anism incorporates people from the future of plastics, starting with packaging. mental impact of cosmetics within the same category. across all four brands and helps us to address urgent problems in a Furthermore, with the aim of As for the ingredients used in our more efficient way. Making pumps ultimately providing consumers products, our path to reaching our and flexible refill pouches recycla- with clear, transparent, and com- targets is clear. Regarding formula ble are some of the questions we parable environmental impact biodegradability we are at 94.4% are working on finding answers to information based on a common and on track to achieving 95% or collaboratively. At the hub, we align science-based methodology, we more by 2030. To ensure success priorities, accelerate achievements, joined other companies in the in- in these product-related goals, we and think of new ways of doing dustry to collaborate on the devel- have increased resources dedicated things. From simple incremental opment of an environmental impact to innovation, leveraging not only ideas to rethinking how we take assessment and scoring system. the talent across the group, but care of ourselves; we incorporate The EcoBeautyScore Consortium also developing different ways of eco-design into our products as launched by leading cosmetics working with more cross-industry much as possible, working with companies including Natura &Co, collaboration. For instance, inter- suppliers throughout the chain. L’Oréal, Unilever, nally through a mechanism that Natura &Co annual report – 2021Our Commitment to Life98 99 we call the Innovation Network of compounds that replenish the skin hectares and will continue to grow Excellence, InEx, members of our while driving economic benefits for as Natura works to make its palm oil research and development teams the local community. even more sustainable. representing a wealth of talent across Avon, Natura, The Body Shop, and Aesop, have already come to- Biōme After six years of research and An accompanying bar dish contains a bio resin made from the capture gether to collaborate on important technology development, Natura of methane gas. The packaging for projects and to share best practices. launched Biōme, a line of solid bar Biōme uses recycled and post-con- Ekos Tukumã Line Natura’s experience in working with beauty and care products with sumer recyclable paper obtained zero plastic in its packaging. For its from renewable and compostable development, it used palm oil from sources. traditional communities in a regen- agroforestry systems (AFS), in which erative way has been an inspiration the palms grow together with na- within the group and beyond. In the tive species, such as andiroba and Body Butters Considered The Body Shop’s most past few years, it has been studying açaí, a method that is more produc- iconic products, the brand’s body the Tukumã plant, which is able to tive and sustainable in comparison butters have undergone a full reju- resist forest fires and even flourish in to monoculture. Moreover, it is a venation process over the last two burnt areas. The new Ekos Tukumã better way to capture carbon and years. The first body butters were line contains a high percentage of helps diversify the farmers’ income. launched in 1992 and, today, one Tukumã butter and oil and is of 98% Research on this technique started of these well-loved products is sold natural origin. It comes in silicon in 2008 with three farmers and 18 every three seconds worldwide. The access to more sanitary working free, vegan packaging made from hectares of land in Tomé-Açu, in new and improved body butters 100% post-consumer recycled PET. Pará, in the North of Brazil. The area are certified by the Vegan Society conditions and a fair price for the plastic waste they collect. In 2021, The Tukumã plant provides powerful currently under cultivation is 60 and are made of at least 95% natural we bought 782 tonnes of Com- ingredients, including handcrafted munity Fair Trade recycled plastic, community fair trade shea butter retrieved from the streets of Ben- from Ghana. The addition of this in- galuru, a significant increase from gredient to its formula helps to pro- vide a fair income for more than 700 women from 11 different villages. 2020. Aesop launched an in-store refill pilot in Melbourne, Australia. The The Body Shop is also taking action system offers reusable glass bot- on packaging and collection-related tles available to purchase and fill problems. The new body butter is packaged in 100% recycled plastic with a fully recyclable aluminum cap. This includes community fair trade recycled plastic collected from the streets of India through our partnership with Plastics for Change. This collaboration helps with select formulations (Resur- rection Aromatique Hand Wash, Geranium Leaf Body Cleanser and Parsley Seed Facial Cleanser) from our custom-made dispensary machine. Once depleted, they can be returned to store for replenish- ment. Customer response has been tackle the existing plastic problem powerful and we look forward to while supporting around 2,500 continuing to develop and innovate waste pickers, providing them with in this space to expand our offer. Natura &Co annual report – 2021Our Commitment to LifeSustainability data About this document This document supplements Natura &Co 2021 Annual Report. It provides additional data, transparency, and accountability on our environmental and social performance across our four Business Units (Natura &Co LatAm, Aesop, The Body Shop, and Avon International) from 1 January 2021 to 31 December 2021, in line with global reporting frameworks. Unless otherwise stated, the data relates to our global performance. To Address the Climate Crisis and Protect the Amazon Net Zero GHG emissions Our partners include Transform to Net Zero, a cross-sector initia- tive to accelerate the transition to a Net Zero global economy by 2050 and UN Global Compact Climate Ambition Accelerator. We hired an external consultant, Carbon Trust, to consolidate and calculate the organizational footprints for scopes 1, 2, and 3. During 2021, we concluded our 2020 GHG inventory baseline for Natura &Co, as the first step to address our ambition to become Net Zero. Protect the Amazon Amazon preservation from 1.8m to 3m ha In 2021, Natura &Co and Natura joined forces with MapBiomas, InfoAmazonia and Hacklab to launch the PlenaMata portal, a unique platform that monitors deforestation in the Amazon in real time. Biodiversity To halt and reverse biodiversity loss, we are partnered with Science Based Targets Network (SBTN), Business for Nature, and are co-chairs of WEF’s Champions for Nature. 2019 1.8m ha 2030 3m ha 2020 2021 2m ha Help create targets with a network of partnerships (UEBT, SBTN, BfN, WEF) We are part of the corporate engagement for Science Based Target We are part of the corporate engagement Network (SBTN). To help the construction for Science Based Target Network of the SBTN methodology, we are (SBTN). To help the construction of the piloting the methodology specifically SBTN methodology, we are piloting the with our Natura Ekos line and fulfilled methodology specifically with our Natura Step 1 of 5. Ekos line and fulfilled Step 1 of 5. 102 103 2021 results Goals are presented in pink Become Net Zero, delivering 1.5°C 20 years ahead of the UN Commitment 2.402m tCO2eq (Excluding use phase) Science Based Targets Initiative (SBTi) for all companies scopes 1, 2, and 3 2020 We will submit our science-based targets to SBTi by We will submit our science-based April 2022 and we expect to targets to SBTi by April 2022 and we receive their approval in the expect to receive their approval in coming months. the coming months. 33 to 40 communities 40 Target reached 40 33 34 Increase revenue streams with 55 bio-ingredients (from 38) 2019 38 2020 39 2021 41 2030 55 Share at least R$ 60 million in value with communities (from R$ 33 million) R$ 60m Foster collective efforts towards zero deforestation by 2025 1.3m ha R$ 33m R$ 39.9m R$ 30.1m 1.08m ha 2019 2020 2021 2019 2020 2021 2030 2020 2021 0 ha 2025 PlenaMata data shows 2021 had the highest deforestation rates in the Amazon since 2006 Expand from Natura’s 16 year payment of ABS (access and benefit sharing) to the Group by 2025 2020 R$ 8.9m 2021 R$ 11.03m Natura &Co annual report – 2021Sustainability data 104 105 2021 results Goals Target number 31 metrics & targets Target timeline Natura &Co Group Natura &Co LatAm Aesop The Body Shop Avon International Net Zero GHG emissions Protect the Amazon Biodiversity 1 2 3 4 5 6 7 8 9 Become Net Zero, delivering 1.5°C 20 years ahead of UN Commitment 2030 2,402,399 tons CO2 eq 1 1,304,877 tons CO2 eq 1 26,220 tons CO2 eq 1 260,677 tons CO2 eq 1 810,625 tons CO2 eq 1 Science Based Targets Initiative (SBTi) for all companies, scopes 1, 2 and 3 2022 We are in the process of submitting our science-based targets to SBTi and we expect to receive their approval in the coming months. Expand influence on forest preservation from 1.8m to 3m ha 2030 Expand influence on forest preservation from 33 to 40 communities 2030 Increase revenue streams with 55 bio-ingredients (from 38) 2030 Share at least R$ 60 million in value with communities (from R$ 33 million) 2030 Foster collective efforts towards zero deforestation by 2025 2025 - - - - - 2m ha 2 40 2 41 2 R$ 39.9m 2 1.3 m ha 2 477 million trees - - - - - - - - - - - - - - - Help create targets with a network of partnerships (UEBT, SBTN, BfN, WEF) 2025 We are part of the corporate engagement for Science Based Target Network (SBTN). To help the construction of the SBTN methodology, we are piloting the methodology with our Natura Ekos line and fulfilled Step 1 of 5. Expand from Natura’s 16 year payment of ABS (access and benefit sharing) to the Group by 2025 – as per UN Convention on Biological Diversity (CBD) / Nagoya Protocol 2025 R$ 11,034,125 R$ 10,762,838 - R$ 271,287 - Footnotes 1 2 Natura Cosmeticos only 2020 GHG inventory results excluding the use phase Natura &Co annual report – 2021Sustainability data To Defend Human Rights and be Human Kind 2021 results Goals are presented in pink 106 107 Our people We sit on the Board of UN Global Compact and are patrons of Target Gender Equality, its accel- erator program for companies to set and reach ambitious targets for women’s representation. 50% women on board / senior team by 2023 Target reached Equitable pay, closing the gender gap by 2023 50% 35% 49.4% 50.4% 2019 2020 2021 -0.9% -1.19% 0% 2023 2020 2021 Our wider network Our network reflects the omnichannel nature of our business. We work with the World Federation of Direct Selling (WFDSA) and Seldia (The European Direct Selling Association). Human Rights & Supply Chain We support the UN Working Group developing the UN Guiding Principles on Business and Human Rights in their work to undertake a decade of action on business and human rights. Measurable gains for Consultants/Representatives and sourcing communities In 2021 we completed an initial pilot project to measure the socio-economic impact that our Natura &Co direct selling companies have on the lives of Consultants / Representatives in our network. Adopt robust Human Rights policy in line with UN Guiding Principles by 2023 Natura &Co's new Human Rights Natura &Co's new Human Rights statement was unanimously statement was unanimously approved approved by its Board of by its Board of Directors in 2021. Directors in 2021. Increase investments in key causes by 20% to U$ 600 million US$ 59m 2021* Human kind actions 29.1% Education 28% Amazon protection 20% Women 11.2% Others 11.7% *Data only reflects 2021 result. 2020 figure to be reviewed with new methodology. Our 2020 figures were re-calculated based on new and more robust certification criteria. Palm Oil, Paper, Alcohol, Soy and Cotton values reflect certification %. Mica value reflects traceability % as there is no global certification standard available for Mica. Living wage (or above) for all by 2023 2020 1A 96% 2A2C 85% 2021 1A 96% 2A2C 85% 2023 1A 100% Our costs have increased slightly since 2020 by approximately 23%, however this is mainly due to the increase in the Living Wage Rates. Work towards 30% inclusion, in management, of under-represented groups Throughout 2021 we reviewed various solutions to assess D&I data as we faced data privacy and legislative issues in many of the markets in which Natura &Co operates. With the support of an external consultancy, an online survey tool will be used to anonymously gather data from our employees to support the establishment of our baseline. Promote our trusted and reliable model for the future of direct sales, health and digital inclusion As the Chair of the WFDSA Ethics Committee, Natura is leading activities to promote ethics beyond compliance, continuously raising WFDSA and DSAs’ self-regulatory standards (“The Code”) above local legislation/regulation. Full (100%) traceability and/or certification for critical supply chains by 2025 Palm Oil Mica Paper Alcohol Soy Cotton 100% 70.6% 85.3% 80.4% 35.2% 0% 0% 44.8% 41.5% NA 0.2% 3.4% 2.2% 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 Natura &Co annual report – 2021Sustainability data 108 109 2021 results Goals Target number 31 metrics & targets Target timeline Natura &Co Group Natura &Co LatAm Aesop The Body Shop Avon International Our People Our Wider Network Human Rights 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Gender balance: 50% women onboard/senior team by 2023 Equitable pay, closing the gender gap by 2023 2023 2023 50.4% 4 -1.19% 50% -1.3% 40% -1.0% 64% -0.8% 52% -1.3% Work towards 30% inclusion, in management, of under-represented groups 2030 Throughout 2021 we reviewed various solutions to assess D&I data as we faced data privacy and legislative issues in many of the markets in which Natura &Co operates. With the support of an external consultancy, an online survey tool will be used to anonymously gather data from our employees to support the establishment of our baseline. Living wage (or above) for all by 2023 Measurable gains for consultants/ representatives and sourcing communities' earnings, education, health, and digital inclusion Increase investments in key causes by 20% to U$ 600 million 2023 2030 2030 1A 96% 93% 2A2C 85% 82% 98% 85% 100% 82% 100% 85% In 2021 we completed an initial pilot project to measure the socio-economic impact that our Natura &Co direct selling companies have on the lives of Consultants / Representatives in our network. USD$ 59.0 5 USD$ 33.4 2 USD$ 3.9 USD$ 13.0 USD$ 6.8 Promote our trusted and reliable model for the future of direct sales 2030 As the Chair of the WFDSA Ethics Committee, Natura is leading activities to promote ethics beyond compliance, continuously raising WFDSA and DSAs’ self-regulatory standards (“The Code”) above local legislation/regulation. Full certification by 2025 – Palm Oil Full traceability by 2025 – Mica 6 Full certification by 2025 – Paper Full certification by 2025 – Alcohol Full certification by 2025 – Soy Full certification by 2025 – Cotton 2025 2025 2025 2025 2025 2025 70.6% 35.2% 85.3% 44.8% 0.2% 2.2% 80.0% 26.8% 87.0% 69.0% 0.0% 0.0% 39.0% N/A 71.0% 0.0% 15.6% 1.0% 19.1% 95.2% 67.8% 2.8% 0.0% 59.9% 49.0% 38.4% 81.6% 0.0% 0.0% 0.2% Adopt robust Human Rights policy in line with UN Guiding Principles by 2023 2023 Natura &Co’s new Human Rights statement was unanimously approved by its Board of Directors in 2021. Footnotes 2 Natura Cosmeticos only 4 N&Co Group employees are 44% female for this metric; Board 31% are female 5 Only reflects 2021 result, the 2020 figure needs to be reviewed in line with new methodology 6 There is no global certification standard available for Mica Natura &Co annual report – 2021Sustainability data Embrace Circularity and Regeneration 2021 results Goals are presented in pink 110 111 Packaging Circularity We are a signatory to The Ellen MacArthur Foundation’s New Plastics Economy Global Commit- ment, united with 1,000 organiza- tions across the plastic packaging value chain, progressing towards a circular economy. 20% (or more) less packaging material (in weight) 50% of all plastic used to be of recycled content (in weight) 100% of all packaging material: Reusable or Recyclable or Compostable 2020 2020 2021 2021 2030 2030 100% 7.3% 8% 20% 50% 80.8% 81.2% 100% Offset through “collection and reuse” programs to reach 100% responsible disposal where recycling infrastructure not available 2020 2021 2030 10.2% 7% 2020 2021 2030 24.3% 20.9% 2020 2021 2030 Reduction in numbers reported by Natura &Co LatAm, especially Natura Cosmeticos (from 56.1% to 47.4% in weight). Formula Circularity 95%+ renewable or natural ingredients 95%+ biodegradable formulas Alongside Henkel, L’Oreal, LVMH, P&G, and Unilever, Natura &Co is a founding member of the EcoBeautyScore Consortium, created to meet consumer de- mand for greater transparency about the environmental impact of cosmetic products. 88.8% 2020 89.6% 2021 95%+ 2030 2020 2021 2030 92.8% 94.4%99 95%+ 100% of new formulas will have lower environmental footprint, measured by life cycle analysis (LCA) by 2025 In 2021, a team with components from all the companies of the Group was defined, a consulting firm was hired (Quantis), and the scope of the tool construction was defined in line with the EcoBeautyScore Consortium. Regeneration Natura is a founding member of the Union for Ethical BioTrade (UEBT), and together we work with others to engage compa- nies on the journey to regener- ate nature and protect people through the ethical sourcing of biodiversity ingredients. Invest US$100 million (or more) in developing regenerative solutions, such as: biotechnology e.g. from waste to ingredients, plastics, etc. $100m $4.6m $8.8m 2020 2021 2030 Natura &Co annual report – 2021Sustainability data 112 2021 results 113 Goals Target number 31 metrics & targets Target timeline Natura &Co Group Natura &Co LatAm Aesop The Body Shop Avon International 24 25 26 27 28 29 30 31 Packaging Circularity Formula Circularity Regeneration 20% (or more) less packaging material (in weight) 50% of all plastic used to be of recycled content (in weight) 2030 2030 100% of all packaging material: Reusable or Recyclable or Compostable 2030 Offset through “collection and reuse” programs to reach 100% responsible disposal where recycling infrastructure not available 95%+ renewable or natural ingredients 95%+ biodegradable formulas 100% of new formulas will have lower environmental footprint, measured by life cycle analysis (LCA) Invest U$ 100 million (or more) in developing regenerative solutions, such as:Biotechnology e.g. from waste to ingredients, plastics, etc. 2030 2030 2030 2030 2030 8.0% 10.2% 81.2% 20.9% 89.6% 94.4% 7.9% 8.5% 81.1% 30.7% 93.5% 2 95.8% 2 Not reported Not reported 9.0% 50.8% 82.7% 0.6% 89.7% 89.3% 47.3% 90.3% 0.04% 78.6% Not reported 0.0% 89.9% 90.0% 86.5% 3 89.9% 3 In 2021, a team with components from all the companies of the Group was defined, a consulting firm was hired (Quantis), and the scope of the tool construction was defined in line with the EcoBeautyScore Consortium. USD $8.8m 7 USD $8,754,929 2 - USD $31,065 USD $15,000 3 Footnotes 2 Natura Cosmeticos only 3 Avon Global only 7 Accumulative result reflecting 2020 and 2021 performance Natura &Co annual report – 2021Sustainability data 114 115 Environmental Impact Packaging Materials — The following tables summarize the content and weight of our Business Units non-plastic packaging. Glass packaging Percentage of glass packaging that is from recycled and/or certified material (% of total weight of all glass packaging) Metal packaging Total weight of metal fiber packaging (tons) Wood/Paper fiber packaging Percentage of paper packaging that is from recycled and/or certified material (% of total weight of all paper packaging) 2021 total weight of glass fiber packaging (tons) 2021 % of glass packaging that is from recycled and/ or certifed material 2021 2021 total weight of wood paper fiber packaging (tons) 2021 % of wood/paper fiber that is from recycled and/or certified material Natura &Co LatAm2 16,097 Avon International 13,854 The Body Shop Aesop Total 2,214 760 32,925 14.8 7.3 21.5 1 13.7 3 12.1% Footnotes 1 Data for FY2021 not yet available for The Body Shop. The performance disclosed (21.5%) considers FY2020 performance. 2 The metric considers Natura Cosméticos only 3 Recycled content data has been collated throughout Q3 and Q4 of 2021. Natura &Co LatAm1 1,226 Natura &Co LatAm2 11,828 Avon International 247 Avon International 2,720 The Body Shop 3892 The Body Shop Aesop Total 87 1,949 Aesop Total 1,441 43 16,032 20.1% 6.8 36.2 100 6.7 Footnotes 1 The metric considers Natura Cosméticos only 20% of total weight is from recycled and/or certified material 2 Footnotes 1 Data for FY2021 not yet available for The Body Shop. The performance disclosed (21.5%) considers FY2020 performance. 2 The metric considers Natura Cosméticos only 3 Recycled content data has been collated throughout Q3 and Q4 of 2021. Natura &Co annual report – 2021Sustainability data 116 117 Plastic packaging In 2021, no brands adopted any compostable plastic packaging. The following tables show our Energy consumption – non-renewable & renewable fuels The table below summarizes the energy consumption of Natura &Co. The total cost of energy consumption in 2021 progress as Natura &Co towards reducing our plastic packaging, and increasing the percentage of our for Avon International was US$ 3,747,832.35. The other brands will have the feasibility to track energy consumption plastic packaging that is recyclable and/or recycled plastic. This is shown in the following table. costs in the future. 2021 Total weight of all plastic packaging (tons) Percentage of recyclable plastic packaging (% of the total weight of all plastic packaging) Percentage of recycled content within plastic packaging (as a % of the total weight of all plastic packaging) 2021 1 2 Natura &Co LatAm 25,287 Avon International 10,909 The Body Shop Aesop Total 3,620 468 40,284 66.8 54.4 77.5 61.6 8.5 0.04 47 50.8 Energy consumed from non- renewable fuels (MWh) Energy consumed from non- renewable electricity purchased (MWh) Total non- renewable energy consumption (electricity and heating & cooling) MWh Total renewable energy (wind, solar, biomass, hydroelectric, geothermal, etc.) purchased or generated (MWh) Percentage of renewable energy (as % of total energy consumed) Natura &Co LatAm 32,268 36,294 68,562 157,465 69.7% Avon International 38,220 32,728 70,948 0 The Body Shop - 2852 2 2852 2 7,589 0% 72.7% 64.3% 10.2% Total 70,488 71,874 142,362 165,054 53.7% Footnotes 1 Data for FY 2021 not available for Aesop until the date of this publication. FY 2020 data for Aesop are: 2020.Energy consumption from non-renewable fuels was 34,281 MWh; Energy consumed from non-renewable electricity purchased was 2,304 MWh; Total non-renewable energy consumption was 23,38.508MWh; and Total non-renewable energy consumption was 3,769 MW. 2 The Body Shop coverage reflects where data was made available. 3 The total disclosure represents over 90% of our net revenues Natura &Co annual report – 2021Sustainability data 118 119 Freshwater consumption Total net freshwater consumption 1 (m3) 2021 Natura &Co LatAm 315,622 Avon International 110,282 Total 2 425,904 Footnotes 1 Extraction minus discharges to source of extraction at similar or higher quality 2 Total disclosure represents over 75% of our net revenues Waste Disposal 2021 2 Total waste generated (metric tons) 1 Total waste used, recycled or sold (metric tons) 3 Total waste disposed (metric tons) 4 The Body Shop 6,467 Avon International 12,568 Total 5 19,035 6,405 12,247 18,652 39,831 321 40,152 Footnotes 1 This metric considers the total hazardous and non-hazardous waste generated from owned and leased facilities, including landfill, waste rock, tailings, ash and materials sent for incineration. Total Waste also includes recycled, repurposed materials, and compost. Data for FY 2021 not available for TBS and Aesop until the date of this publication. In 2020 for Aesop total waste generated was 462.98 tons; total waste used, recycled or sold was 262.27 tons; total waste disposed was 199.80 tons Total waste recycled, broadly defined to include reuse, recycling, compositing, anaerobic digestion, but excluding incineration. Applies to owned and leased premises (all premises) 2 3 4 Not recycled, reused or incinerated waste for energy recovery 5 Total disclosure represents over 75% of our net revenues 2020 Natura &Co Total Emissions 1 Total Emissions per category (Tons CO2e) 1 Scope 1 Scope 2 - location based Scope 2 - market based Scope 3 categories 2020 29,548 61,439 21,579 1a: Purchased goods and services (product and non-product) 1,456,576 2: Capital goods 3: Fuel and energy related activities 4: Upstream transportation and distribution 5: Waste generated in operations 6: Business travel 7: Employee commuting 8: Upstream leased assets 9: Downstream transportation and distribution 10: Processing of sold products 11a: Use of sold products (Direct) 11b: Use of sold products (Indirect) 12: End-of-life treatment of sold products 13: Downstream leased assets 14: Franchises 15. Investments 21,342 23,112 332,196 2,112 19,161 24,302 309 99,163 - 39,447 3,354,173 317,540 - 16,013 - Total for Group (market based) without indirect use phase (category 11b) 2,442,259 Total for Group (location based) without indirect use phase (category 11b) 2,402,399 Total for Group (location based) with use phase (categories 11a +11b) 5,796,433 Total for Group (market based) with use phase (categories 11a + 11b) 5,756,573 Footnotes 1 2020 Natura &Co GHG baseline, in line with Corporate Value Chain (Scope 3) Accounting and Reporting Standard, Greenhouse Gas Protocol - WRI / WBCSD Natura &Co annual report – 2021Sustainability data Social Impact New hires Total number of new employee hires 1 2021 – Total number of new employee hires - Gender Voluntary Turnover rate Voluntary employee turnover rate 1 2021 – Voluntary employee turnover rate - Gender 1 2 120 121 2021 Men Women Prefer not to say Natura&Co Group 36 Natura &Co Group 17 Natura&Co LatAm 1,796 Natura &Co LatAm 726 Avon International 209 Avon International 85 The Body Shop Aesop Total 2 1,675 1,501 5,217 The Body Shop Aesop Total 1 176 188 1,192 3,357 19 1,069 124 1,499 646 0 1 0 0 14 15 Footnotes 1 This metric considers only permanent employees. It does not reflect the total from all the Business Units. This metric is based on the employee's hire date and does not consider internal hires from other business units to the group 2 Footnotes 1 Total is not aligned with 5,217 total new hires due to some unavailable gender data' 2021 – Total number of new employee hires - Management level Leadership / Top Management Junior Management Total Natura &Co Group 11 Natura &Co LatAm Avon International The Body Shop Aesop Total 7 2 8 8 36 9 59 27 100 81 276 20 66 29 108 89 312 Natura&Co LatAm Avon International The Body Shop Aesop Total 2021 5% 13% 39% 27% Natura &Co LatAm Avon International The Body Shop Aesop 14.7% Total Men 5% 14% 32% 25% 9.8% Women 5% 12% 40% 24% 16.7% Footnotes 1 This refers to the proportion of employees who choose to leave an organization (such as resignation, retirement, early retirement etc.) over a set period (often a year), expressed as a percentage of the total employees. Natura &Co Group employee turnover will be repor- ted in FY2022 Footnotes 1 2 The breakdown by gender considers the self-declaration of each employee. Natura &Co Group employee turnover will be reported in FY2022. 2021 – Voluntary employee turnover rate - Management level 1 Leadership / Top Management Junior Management Natura &Co LatAm Avon International The Body Shop Aesop Total 5% 10% 9% 15% 9% 6% 12% 10% 31% 10% Footnotes 1 Natura &Co Group employee turnover will be reported in FY2022 Natura &Co annual report – 2021Sustainability data Total employee turnover rate Total employee turnover rate 1 2 2021 – Total employee turnover rate - Gender 1 2 Natura&Co LatAm Avon International The Body Shop Aesop Total 2021 14% 24% 56% 29% 25% Natura &Co LatAm Avon International The Body Shop Aesop Total Men 13% 23% 42% 29% 18% Women 14% 24% 57% 26% 28% Footnotes 1 This refers to the proportion of employees who leave an organization over a set period (often a year), expressed as a percentage of the total employees. Natura &Co Group employee turnover will be reported in FY2022 2 Footnotes 1 Natura &Co Group employee turnover will be reported in FY2022 2021 – Total employee turnover rate - Management level 1 Leadership / Top Management Junior Management Natura &Co LatAm Avon International The Body Shop Aesop Total 6% 26% 11% 15% 15% 9% 22% 11% 31% 15% Footnotes 1 Natura &Co Group employee turnover will be reported in FY2022 122 123 Share of women in total workforce Share of women in total workforce 1 (as % of total workforce) Share of women in all management positions Including junior, middle, and top management (as % of total management positions)1 Share of women in junior management positions 1 (as % of total junior management positions) Natura&Co Group Natura&Co LatAm Avon International The Body Shop Aesop Total 2021 57% 60% 65% 90% 61% 68% Natura&Co Group Natura&Co LatAm Avon International The Body Shop Aesop Total 2021 53% 57% 61% 70% 54% 60% Natura&Co Group Natura&Co LatAm Avon International The Body Shop Aesop Total 2021 65% 58% 62% 71% 57% 62% Footnotes 1 Total number of employees considered (35,363) Footnotes 1 Total number of employees considered (3,275) Share of women in top management positions 1 (as % of total top management positions) Natura&Co Group Natura&Co LatAm Avon International The Body Shop Aesop Total 2 2021 44% 50% 52% 64% 40% 51% Footnotes 1 This metric refers to first-line managers, junior managers and the lowest level of management within a company’s management hierarchy. These individuals are typically responsible for directing and executing the day-to-day operational objectives of organizations, conveying the directions of higher level officials and managers to subordinate personnel. Total number of employees considered (2,903) Footnotes 1 This refers to management positions with a reporting line at most two levels away from the CEO. They include individuals who plan, direct, and formulate policies, set strategy, and provide the overall direc- tion of enterprises/organizations for the development and delivery of products or services, within the parameters approved by boards of directors or other governing bodies. Total number of employees consi- dered (372). If we consider the Board of Directors, the total disclosure is 50.4%. Currently the Board of Directors is 31% women. 2 Natura &Co annual report – 2021Sustainability data 124 125 Institutional Relations Global Organizations A list of the external organizations that Natura &Co is a member of. Organization Representative Role B Lab The B Team Denise Hills Sistema B Brazil Board Member Thais Espildora B Movement Builders Mentor Guilherme Leal The B Team Leader Keyvan Macedo / Zoe Carton Worker B Business for Nature Andrea Alvares (former) / Marcelo Behar (current) Strategic Advisory Group Member The Consumer Goods Forum (CGF) Griscelda Ramos Plastics Group Mexico Member Juan Camilo Padilla Plastics Group Colombia Co-Chair Organization Representative Role Transform to Net Zero (TONZ) Marcelo Behar / Keyvan Macedo TONZ Monthly Meetings Participant Roberto Marques UNGC Board Member Guilherme Castellan CFO Taskforce for the SDGs Member Denise Hills The UN Global Compact Network Brazil Vice President The UN Global Compact (UNGC) Marcelo Behar Liaison Delegate Noelia Souque Caldato (former) / Zoe Carton (current) Target Gender Equality Patron Keyvan Macedo Climate Ambition Accelerator Patron Fernanda Facchini / João Teixeira Climate Ambition Accelerator Brazilian Program The Union for Ethical BioTrade (UEBT) Mark Davis Board of Directors Member Mauro Costa Standard and Assurance Committee Member Louise Scott / Marcelo Behar SteerCo, General Assembly, Corporate Committee Member UN Women Noelia Souque Caldato (former) / Zoe Carton (current) Economic Justice and Rights Action Coalition Commitment Maker Iguatemi Costa Footprinting Working Group Core Team Andrea Alvares Executive Committee Member EcoBeautyScore Consortium Ramez Labib Scoring Working Group Core Team Eugenia Zalis Scoring Working Group Member Ed Fowler IT Solution Working Group Core Team Marcelo Behar General Assembly Member Ginny Edwards Coms, PA & Legal Working Group Member Emilia Lebron Coms, PA & Legal Working Group Member Ellen MacArthur Foundation (EMF) Keyvan Macedo (former) / Steve Cholowsky (current) New Plastics Economy Global Commitment Signatory Marcelo Behar OP2B Meetings Participant Keyvan Macedo SBTN Corporate Engagement Program Member One Planet Business for Biodiversity (OP2B) Science Based Targets Network (SBTN) Taskforce on Nature-related Financial Disclosures (TNFD) World Business Council For Sustainable Development (WBCSD) Denise Hills (former) Keyvan Macedo (current) Liaison Delegate Tyler Reddien CFO Network Member Roberto Marques Champions for Nature Co-Chair The World Economic Forum (WEF) Marcelo Behar Champions for Nature Senior Advisor Itamar Gaino Filho Future of Corporation - General Counsels Member João Paulo Ferreira Ethics Committee Chairman João Paulo Ferreira CEO Council Member JJoão Paulo Ferreira Operating Group Member The World Federation of Direct Selling Associations (WFDSA) João Paulo Ferreira Board of Delegates Member Juliana Darini Teixeira Ethics Committee Member Marcelo Behar Taskforce Member Carlos Pitchu Advocacy Committee Member Keyvan Macedo Taskforce Sherpa Marcelo Behar Global Regulatory Affairs Committee Member Natura &Co annual report – 2021Sustainability data 126 127 Regional Organizations Governance and Economic Impact Code of conduct breaches Number of breaches to Codes of Conduct, specifically relating to serious and significant investigations carried out by Ethics and Compliance. 1 Organization Representative Role Christian Silveri Board of Directors Company Member 2020 2021 CASIC Sabina Zaffora Sustainability Commission President Flavia Bartholomeu Regulatory Affairs Commission Member Amanda Long SCT Regulatory Strategy (REG) Member Cosmetics Europe Amanda Long SCT Ingredients Defense Member Seldia Amanda Long SCT International (INTER) Member Angela Cretu CEO Council Member Anna Tolley Government Affairs Committee Member Natura &Co LatAm Avon International The Body Shop Aesop Total 2 6 1 1 10 11 5 2 3 21 Footnotes 1 Were carried out 21 serious and significant investigations by Ethics & Compliance in 2021, of which nine were found to be substantial. The following outcomes were recorded for the nine substantial cases: four written warnings, two coaching, one training, one bonus retracted, one failure to meet Ethical & Compliance goal in perfor- mance review, one resigned, one settlement and one terminated. Each substantial case can have multiple motives and/or multiple outcomes. Discrimination incidents disclosure Natura &Co Ethics and Compliance team are responsible for tracking the details of all discrimination / harassment complaints receive into our Ethics Line, as well as allegations receive via other channels investigated by Ethics and Compliance. Number of incidents of discrimination and harassment1 2020 2021 Natura &Co LatAm Avon International The Body Shop Aesop Total 1 0 1 1 3 2 2 1 1 6 Footnotes 1 Incidents of harassment or discrimination on grounds of race, color, sex, religion, political opinion, national extraction, or social origin as defined by the ILO, or other relevant forms of discrimination involving internal and/or external stakeholders across operations in the reporting period Of the three discrimina- tion cases reported in 2020, one was found to be substantiated. Natura &Co annual report – 2021Sustainability data Natura &Co annual report – 2021 Credits 128 Credits Natura &Co VP Sustainability & Group Affairs Marcelo Behar The Body Shop Alexandra Fulton Aesop Anna Sacre Head of External Communications Emilia Lebron Contributors Sustainability Coordinator Alisa Smirnova Communications Consultant Shelley Simmons-Bloom Consulting, Copy and Translation Report Sustentabilidade Fernanda Mori, Livia Frossard, Ana Souza, Estevam Pereira and Juliane Duarte Sustainability Keyvan Macedo, Alisha Syal, Design Agency Danki Amsterdam Zoe Carton Investor Relations Viviane Behar, Luiz Palhares, Ana Sartori Lopes Corporate Governance Moacir Saltzstein, Aline Klein Branding Teresa Boulting Natura &Co Latin America Michel Blanco, Fabio Peixoto, Cassio Costa Avon Joanna Newark, Natalie Deacon Commitment to Life Infographics Rodolfo Almeida Special thanks to Luiz Seabra, Guilherme Leal, Pedro Passos, Roberto Marques, Guilherme Castellan, Josie Romero, Kay Nemoto, Silvia Lagnado, Paula Fallowfield, Itamar Gaino, Angela Cretu, João Paulo Ferreira, David Boynton, Michael O’Keeffe, Catherine O'Dea, Chris Davis, Denise Hills, Christiana Souto, Laura McGonigal, Louise Scott, Mark Davis, Renata Vieira, Renato Winnig Avon, Natura &Co LatAm, The Body Shop and Aesop, will release their own reports in 2022 

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