SUSTAINABILITY REPORT
2023
page 2
Table of Contents
ABOUT THE REPORT | 3 |
Materiality matrix | 4 |
MESSAGE FROM | |
THE CEO | 6 |
A YEAR OF | |
ACHIEVEMENTS | 8 |
Numbers | 9 |
Awards and recognition | 10 |
ABOUT US | 11 |
Santos Brasil | 12 |
Map of operations | 13 |
Mission, vision and values | 14 |
ESG COMMITMENTS | 15 |
ESG Strategy | 16 |
Market recognition | 17 |
Commitments to the future | 18 |
Business model and shared value | 19 |
NATURAL CAPITAL | 20 |
Emissions | 22 |
Energy efficiency | 24 |
Protection of biodiversity | 25 |
Waste management | 27 |
Water resources management | 28 |
HUMAN CAPITAL | 29 |
People management | 31 |
Valuing diversity | 36 |
Health and safety | 38 |
SOCIAL AND | |
RELATIONSHIP CAPITAL | 41 |
Stakeholder engagement | 43 |
Social impact on the community | 45 |
Private social investment | 47 |
Customer relationship and satisfaction | 50 |
Supply chain | 51 |
CORPORATE | |
GOVERNANCE | 53 |
Governance structure | 54 |
Corporate risk management | 56 |
LGPD | 57 |
Ethics, transparency and compliance | 57 |
Protection of human rights | 59 |
BUSINESS | |
PERFORMANCE | 60 |
Macroeconomic and industry scenario | 61 |
Operational efficiency, | |
expansion and modernization | 62 |
Economic-financial performance | 65 |
GRI SUMMARY | 67 |
Assurance letter | 76 |
CORPORATE | |
INFORMATION | 78 |
2023 Sustainability Report - About the Report | page 3 | ||||||
ABOUT THE REPORT
GRI 2-2,2-3,2-5,2-14
2023 Sustainability Report - About the Report | page 4 |
GRI 3-2
This is the 18th Sustainability Report of Santos Brasil, a publicly traded company with shares listed on the Novo Mercado segment of the B3 stock exchange. This edition refers to the period from January 1 to December 31, 2023, unless otherwise indicated. Every year we present information about all the operations and units of the company related to economic, financial, governance, environmental, and social aspects, considering also the industry sector in which it operates. GRI 2-3
Materiality
Matrix
For this report, referring to 2023, we considered the materiality matrix as revised in 2022. The materiality process, updated every two years, aims to instruct the preparation of a relevant document, which showcases our business vision, in addition to addressing the impacts of our activities with transparency and considering the interests of our stakeholders. The identification of our material topics was based on analyzes, prioritizing strategic stakeholders, and validation by senior leadership. -
CONSULTING STAKEHOLDERS
16
interviews with senior leadership
The report, approved by the Sustainability Committee, is aligned with the guidelines of the Global Reporting Initiative (GRI), and is inspired by the integrated reporting model of the
International Integrated Reporting Council (IIRC). The economic and financial data were audited by Ernst & Young (EY) and compliance with the GRI
standard was ensured by SGS Sustentabilidade. Please find the complete financial statements on
the Investor Relations website. GRI 2-2, 2-5, 2-14
In addition to this document, detailed information can be consulted in the Appendices Book, to comply with the GRI, Task Force on Climate-related Financial Disclosures (TCFD), and Sustainability Accounting Standards Board (SASB) indicators.
Doubts, questions or suggestions about this report can be sent to the e-mail:
sustentabilidade@santosbrasil.com.br. GRI 2-3
STEPS OF THE MATERIALITY
PROCESS GRI 2-2,2-29,3-1
Analysis: evaluation of Santos Brasil's documents, sustainable development trends and benchmarks, followed by the preparation of a preliminary list of topics;
Prioritizing topics: consulting the senior leadership and stakeholders - male and female employees, supplier companies, customers, non-governmental organizations, government and civil society representatives, investors, unions, partners, financial institutions, press, regulatory agents and industry entities;
Consolidation and approval: completion of Santos Brasil's materiality matrix and validation by the Sustainability Committee.
473
feedback responses from an online survey with the mapped stakeholders
10
material topics that represent our vision of the business and our stakeholders
2
transversal topics that permeate all the Company's operations
2023 Sustainability Report - About the Report | page 5 | ||||||
MATERIAL TOPICS GRI 3-2, 3-3
MATERIAL TOPICS | IMPACTS | INDICATORS AND SDGs | ||||
Ethics, transparency and compliance | Risks related to non-compliance with social and environmental laws and regulations; | GRI 205-1,205-2,205-3,206-1 | ||||
unfair competition; risks of corruption and violation of the company's ethical principles | SGD 16 | |||||
Risks of work accidents in the operation and with service providers; guarantee of the | GRI 403-1 to 403-10,410-1,416-1 | |||||
Occupational health and safety | SASB TR-MT 320a.1 | |||||
health and safety of employees and third parties | ||||||
SDG 3, 8 | ||||||
expansion | environmentlegaland | |||||
Innovation and technology | Business competitiveness; optimization; process management improvement | Management approach and own indicators | ||||
SDG 9, 17 | ||||||
Decent work, turnover and human | Employee retention; qualification; guarantee of freedom to unionize and freedom | GRI 401-1 to 401-3,402-1,404-1 to | ||||
404-3,407-1 | ||||||
capital development | of association | |||||
SDG 4, 8 | ||||||
Customer relationship and satisfaction | Quality of services provided; meeting market demands, including on social and | GRI 3-3 and own indicators | ||||
environmental topics | SGD 12 | |||||
andDiversification | regulatorytheofManagement | Efficiency and operational stability | Business continuity; cost reduction; influence on customers perception; efficient use | GRI 3-3 and own indicators | ||
of resources | SDG 9, 13 | |||||
Efficient use of water resources | Water scarcity risk; operational risk; process efficiency; environmental compliance | GRI 303-1 to 303-5 | ||||
SGD 6 | ||||||
Biodiversity protection | Impacts on biodiversity, in particular on the coast, sea and land use | GRI 304-1 to 304-4 | ||||
SDG 13, 14, 15 | ||||||
Waste and effluent management | Hazardous waste management; circular economy; compliance with laws | GRI 306-1 to 306-5 | ||||
and regulations | SDG 6, 12 | |||||
Risks related to human rights violation (labor issues, child labor, labor analogue to | GRI 408-1,409-1,412-1 to 412-3,414-1 to | |||||
Human rights | 414-2 | |||||
slavery and safety risks) in operations and in the value chain; appreciation of diversity | ||||||
SDG 5, 8, 10 | ||||||
GRI 201-2,305-1 to 305-7 | ||||||
Financial implications arising from climate change; impacts related to emissions | SASB TR-MT-110a.1, 110a.2, 110a.3, 120a.1 | |||||
Climate change | Task Force on Climate-Related Financial | |||||
originated by the business; adaptation and mitigation actions; regulatory risk | ||||||
Disclosures (TCFD) | ||||||
SGD 13 | ||||||
Transversal topics |
SUSTAINABLE DEVELOPMENT GOALS
SDG3 - Health and well-being
SDG4 - Quality education
SDG5 - Gender equality
SDG6 - Clean water and sanitation
SDG8 - Decent work and economic growth
SDG9 - Industry, innovation and infrastructure
SDG10 - Reduction of inequalities
SDG12 - Responsible consumption and production
SDG13 - Action against global climate change
SDG14 - Life below water
SDG15 - Life on Earth
SDG16 - Peace, justice and effective institutions
SDG17 - Partnerships and means of implementation
2023 Sustainability Report - Message from the CEO | page 6 | ||||||
GRI 2-22
Message from the CEO
In 2023, Santos Brasil's results improved significantly compared to the previous year. EBITDA grew by 23.5%, reaching R$1 billion, with a margin of 46.8%, an improvement of 4.9 percentage points compared to 2022. Net revenue increased by 10.5% to R$2.1 billion, while net income grew by 17.4% to R$504.3 million. Our balance sheet remains healthy, with a net debt/EBITDA ratio of 0.07x. These results reflect the company's strict cost and expense management, combined with the creation of new, higher value-added products, and a highly skilled team dedicated to our mission of increasing our clients' competitiveness.
Our business model's adaptability was tested in 2023 by two extreme weather events that challenged our operational performance: the drought in the Amazon river region and heavy rainfall in Santa Catarina. Our operations at Tecon Vila do Conde (Pará) and Tecon Imbituba (Santa Catarina coast) were crucial in maintaining Brazilian logistics operations. Tecon Vila do Conde helped prevent the isolation of the Manaus Free Trade Zone by performing transshipment operations for barges serving the Port of Manaus. Tecon Imbituba, with its deep waters and large-scale infrastructure, was able to receive ships that could not dock at the Port of Navegantes.
of Santos, enabling the recovery of the berthing schedule along the Brazilian coast. Our ability to provide clients with unique, irreplaceable products has given the terminal a distinctive competitive edge at the Port of Santos.
The logistics sector faced a challenging year with low import performance at the Port of Santos. However, despite the revenue decrease in 2023 compared to 2022, our EBITDA improved, reaching R$112.3 million, with a margin of 27.4%, an increase of 14.9% compared to 2022. The improvement in results reflects operational efficiency gains and a better product mix, leading to a higher average sales ticket.
At Tecon Santos, our available capacity and high terminal efficiency | Our operations at Tecon Vila do Conde (Pará) and | |
Tecon Imbituba (Santa Catarina coast) were crucial | ||
were essential for serving non-regular vessels, also known as extra | ||
calls. We also reduced the waiting time for vessels to dock at the Port | in maintaining Brazilian logistics operations. |
Antonio Carlos Duarte Sepúlveda
CEO of Santos Brasil
2023 Sustainability Report - Message from the CEO | page 7 | ||||||
In the liquid bulk segment, we operated with 50,000 m³ of static capacity in 2023 and handled 601,000 m³ of fuels at our terminals in Itaqui (Maranhão). The high level of services provided allowed us to reach full capacity occupancy in the last quarter. The expansion works are on schedule and within the planned budget. In 2024, the expansion of the two brownfield terminals will be completed, increasing static capacity to 110,000 m³. The project will be finalized in 2025, with the completion of the greenfield terminal, raising our static capacity to 190,000 m³. With initial investments of over R$600 million, this unit will account for about a quarter of the total capacity planned for the Port of Itaqui, a strategic hub for distributing petroleum products to Brazil's North, Northeast, and Midwest regions, and serving the agribusiness sector.
Our social programs have also expanded, benefiting over 90,000 people, particularly youth and vulnerable groups. In the environmental area, we met our commitment to reduce waste generation by 50% in 2023, achieving our three environmental goals ahead of schedule, with a 41% reduction in water consumption and a 36% decrease in greenhouse gas emissions. We are firmly committed to decarbonizing our operations. Our new investments align with this environmental agenda and include electrifying equipment and using renewable fuels. For the second consecutive year, we joined the B3 Corporate Sustainability Index (ISE), which includes a select group of companies recognized for their commitment to the ESG agenda.
We are optimistic about 2024. We believe volumes will increase compared to 2023, and our market share will grow, with margin improvements in all three operational areas of the company. We will work hard to increase our operational capacity and productivity. Our capital allocation strategy will remain unchanged, with planned
We met our commitment to reduce waste generation by 50% in 2023, achieving our three environmental goals ahead of schedule, with
a 41% reduction in water consumption and a 36% decrease in greenhouse gas emissions.
investments in containers, logistics, and liquid bulk terminals. This year, the company will allocate R$650 million to R$730 million to increase capacity and improve operational efficiency.
In support of these three growth vectors, we will focus on six key dimensions for our business: employee experience, customer experience, ESG, technology and innovation, financial discipline, and regulatory expertise. Topics such as transparency, human development, increased diversity, a culture of innovation, and mitigation of environmental impacts, to name a few, have never been more present in the company.
The challenges for the coming years are many, but we believe in the effectiveness of our strategy and our execution capability. We are confident and prepared to continue growing sustainably, contributing to the increase of Brazil's port capacity.
*TEU - acronym for Twenty-foot Equivalent Unit, a unit of measurement used to determine the loading capacity of ships and container terminals.
2023 Sustainability Report - A year of achievements | page 8 | ||||||
A YEAR OF ACHIEVEMENTS
2023 Sustainability Report - A year of achievements | page 9 | ||||||
Numbers
All three environmental goals achieved early:
reduction in | reduction |
36% greenhouse | 41% in water |
gas emissions | consumption |
50% reductionin waste generation
R$ 260 million
invested in equipment electrification
R$ 631 million
invested in the expansion and modernization of operations
R$ 479 million
in dividends paid to shareholders
24%
increase in capacity at CLIA Santos
90 thousand
people impacted by
41 projects
in social and environmental areas supported with R$3.8 million in funds from tax incentives
1.400 people
visited Santos Brasil's facilities
48 initiatives
in social and environmental areas selected to receive in 2024 R$ 5 millions in funds from tax incentives
100%
new suppliers assessed for social and environmental issues*
132
extra vessels served (among ships and ferries)
Score 83
(excellence level)
in Net Promoter Score,
in the first year of operations of the Liquid Bulk Terminal
*Process started in November 2023
2023 Sustainability Report - A year of achievements | page 10 | ||||||
Santos Brasil receiving Grupo Tribuna's 2023 ESG Award
Awards and recognition
Evolution of ESG in Brazil | 2023
Santos Brasil was elected the third most influential company on ESG in the digital sphere, in the report "The evolution of ESG in Brazil", prepared by the UN Global Compact, with consultancy from Falconi and the Stilingue Artificial Intelligence platform.
Latin America Executive Team 2023
We won first place in all eight categories of the 2023 Latin America Executive Team ranking, by Institutional Investor, a North American publication with over 50 years: best CEO; best CFO; best IR professional; best IR Team, IR Program, Analyst Day, ESG and Board of Directors - considering Small Cap companies in the Transport sector.
23rd Broadcast Empresas
Award | 2022
We are among the ten companies with the best financial performance in 2022, ranking tenth among 240 companies analyzed. The award is organized by Agência Estado, in partnership with Fundação Getúlio Vargas (FGV).
Grupo Tribuna 2023 ESG Award
We were recognized by our water efficiency program.
Great Place to Work 2023 (GPTW)
For the fifth consecutive year we were elected one of the best companies to work for in Brazil, scoring 81 in the last edition.
2022 Melhores e Maiores Award from Exame Magazine
We were ranked the third best company in the Transport, Logistics and Logistics Services industry in Exame magazine's Melhores e Maiores award. In this 49th edition of the yearbook, a thousand companies were evaluated.
Época 360º Award | 2023
For the second year in a row, we won best company in the infrastructure sector, according to the Época 360° Award. In the 2023 edition, the survey evaluated more than 410 companies from 24 industries.
Ecovadis Bronze Category | 2023
Since 2016, the platform has evaluated the quality of Santos Brasil's corporate social responsibility practices, considering international standards of sustainable development.
Find out more about market recognition in the ESG Commitments chapter.
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Santos-Brasil Participações SA published this content on 27 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 June 2024 11:52:14 UTC.