ESG Update

May 17, 2021

Slides

Good morning. Thank you for waiting. Welcome to ESG Day of Braskem. We have here with us Robert Simeon, CEO of Braskem, VP of Finance, Procurement and Corporate Affairs, Pedro Freitas our Head of Investors Relations, Rosanna Voelho and Head of Sustainable Development, Georgios So to. We would like to inform you that this event is being recorded and all participants will be in listen only mode during the company's presentation. Next, we are going to start our Q and A session and further instructions will then be provided. We have simultaneous webcasts that will be accessed through Braskem's IR website sent by e mail. All participants can also provide their questions and post questions to be asked during the session through the web. I would like now to hand it over to Rosanna, who is Head of Investor Relations and will start the presentation. Please. Hi, thank you. Good morning, everyone. On behalf of Brescia, I would like to thank you all for being here in our first EST Day. I'm going to start on Slide 3, And here you can see the agenda we've prepared for the day. I'm going to start by making a brief introduction, then peer to fetus, we'll share with us the main advances of the company in terms of sustainable growth by after 'twenty. Giorgio So to will tell us about the commitments that we've made for the upcoming decades. And finally, Roberto Simmons will draw his closing remarks, and we will open for the Q and A. Slide 5 now. Let me tell you about the belief and purpose of Braskem. Braskem believes that chemical and plastic makes people lives better, being present in our everyday practice in packaging, materials and also health care devices, our home appliances and others. Therefore, Braskem has a purpose to improve people's lives, creating sustainable solutions through chemicals and plastics. And its contribution is offered through a wide diversified portfolio of basic chemicals, specialties, thermoplastic resins, diopolymers and recyclable products. During this specific situation, plastics and chemicals are even more essential as they perform an important role to fight against the pandemic and to live life in social distancing. Slide 6. Now considering our belief and purpose, Braskem seeks to operate in accordance with sustainable development principles, and it has been so since the beginning of our operations in 2,002 when we shared our letter of commitment to a sustainable operation. Since then, the company has made important achievements. In 2008, we had our first external check of greenhouse gases, the first important breakthrough. In 2009, we had the definition of the macro objectives of 2020, whose results we are presenting today. And we also launched our statement on climate change, making commitments to reinforce the contribution of Braskem in reducing green gases by using renewable raw materials. Along the same lines, in 2010, we started producing green polyethylene made of sugarcane, becoming global leaders in the production of green biopolymers, really reinforcing our position. In 2014, thanks to the high level of commitment with sustainable development in global UN Global Pact, we've become the leader of Global Pact, and we have remained since then. In 2018, we announced the company's position in circular economy, and we also updated our policy of sustainable policy as I'm going to share next. In 2020, we were certified by Brazilian and American authorities on the effectiveness and robustness of our compliance system, meeting all the commitments we've made in the global pact and also everything that we have agreed on carbon neutral circular economy. And finally, today, we are opening the new cycle of commitments of Braskem for sustainable development. The next slide, I'm going to talk about our global sustainable development policy. To meet this purpose and really strengthen our contribution to sustainable growth, in 2018, we've updated our global sustainable development policy. It was reviewed and approved by our Board of Directors. It aligns our goals, missions and inspirations together with the UN Sustainable Growth Plan. It includes sustainability processes and strategic guidance part of having sustainability as part of our decision making. In implementing this policy, we have a constant monitoring by the Board of Director, which is informed through our CEO, which helps us unfold the policy in the company. Our executives put into practice these objectives, and all team members are ultimately responsible for implementing them. The company defines periodically the material topics to be addressed considering our risk matrix, defining our strategy and long term objectives. Now into Slide 8, we can see in terms of materiality, as I told you before, Braskem performs a periodical assessment of relevant sustainability themes, all associated with our business operations. Within environment realm, we include greenhouse gas emission, water and energy consumption, waste generation, use of renewable and fossil raw materials and post consumption plastic waste. In terms of social realm, the main topics are people health and safety, process safety, product safety, local development and diversity, equity and inclusion. Finally, in terms of economy, the main topics are related to economic and financial results, transparency, integrity, suppliers' engagement and support to client chain. Next slide now. Braskem also assess sustainability based on corporate risk perspective, always based on its global risk management policy. In 2017, we implemented a cyclic continuous methodology to quantify, understand and respond to risks based on international references, making adaptations, of course, to the Brazilian culture. The methodology is focused on making sure that our decisions are made based on appropriate timely decisions considering the risks we are exposed to, increasing the likelihood of meeting our objectives and reducing the risks at acceptable levels. At the same time, it tries to maintain our tangible and intangible equity, people's safety and integrity of the environment on the community. Risk identification is based on a preliminary risk of a list of risks that is called a risk dictionary. It's a database of information that concentrates all the risk description, categories and subcategories. There are operational risks, which are those associated with strategic decisions towards achieving our business goals and or resulting from our lack of skills to get adapted to environmental changes. We also have risks which are resulting from failure to adjust our systems, control process and also problems to deal with our resource and internal controls and frauds, which may harm our activities. There are also financial risks, which are those associated with financial decisions arising from the financial market, credit and liquidity to pay our debts. And finally, regulatory risks, which are associated with the regulatory environment, which arise from failure to comply with laws, financial laws or loss of reputation to comply with laws, regulations, code of conduct or any other guidance. During analysis and assessment of risks, our leaders are responsible for appreciating the causes and sources of risk and positive and negative consequences arising from them and the likelihood that they may be become a reality and impact our expectations. Finally, we select the risks that require prioritization of all the necessary activities and actions to respond to the main threats we are exposed to. The result of this assessment and likelihood of occurrence and prioritization leads to risk definition and classification into very high, high, medium or low level risk and the position in our matrix. Into Slide 10, we can see some examples. In 2020, we maintained the implementation of different measures to prevent and mitigate risks, which were set as priority integrated to the corporate risk matrix. The main highlights, plastic waste and the kind of image it has. There is a trend of trying to ban single use plastic. Climate change also because of the growing global concern with environment and governmental alignment with Paris Agreement. Social environmental issues related with a number of risks of environment, health and safety, which petrochemical industries are exposed to and finally, industry cyclicity, which may have a positive or negative impact on company margins. Now if you go into the next Slide 11, we can see that based on materiality of our business and risk assessment, Braskem defined in 2009 the first long term cycle which was ended in 2020. There were 10 objectives fully aligned with the principles of the Global Path and contributing to the sustainable development goals of UN and the Paris Agreement. And to carry on, I'd like to hand it over to Pedro Freitas, who is going to tell us the main deliverables of this cycle according to the objectives we have defined up to 2020. Hi. It's a pleasure to be here in the first ESG Day of Braskem to introduce to you our main achievements in the past decade. Slide 13. I would like to show you the list of our macro objectives of 2020. They were agreed in the past for the year 2020. We have reached 85% of our goals defined at that time, and we've obtained a very solid secondary result to the cycle, really evolving in safety and health, economic and financial results, post consumption, renewable resources, climate changes and also strengthening practices. The next slide shows health and safety, people and processes. Braskem has achieved 84% of its goal, and it's measured by the accident rate with and without leave and also process safety in Tier 1. In terms of people safety and accident rate with or without leave, we closed the cycle with 0.95 per 1000000 man hours worked, 71% below the industry's average. In terms of cost and safety, we can see that Braskem has achieved consistently the reduction of Tier 1 events, reaching 2020 with 0.07 accident per 1000000 hours manual. Safety is a nonnegotiable value to Braskem. Improvement in our performance has resulted from our human program, which we have implemented, the human reliability program implemented in all our plants. Now in terms of climate change in the next slide, we can see we've achieved 94% of our goal, which is measured by intensity of greenhouse gas emissions. Since 2008, we have a third party assessing our inventory. And we have made an agreement, which is to fight against climate change. In 2017, we launched the program of climate adaptation plan, implementing actions to reduce climate risks in our operations, considering stress scenarios in the long term. In 2020, the company has taken a leader position in CPP climate, common disclosure project with measures, emissions and also use of water. In the CDP climate, we took a leading position for the 6th consecutive time. And in CDP water, we were also leaders for the 4th consecutive time. In addition, we have contributed with effective actions for climate issue, developing products with a negative carbon footprint such as green pea. On the average of the 3 years, we have reduced CHG emissions by approximately 17% over 2,008, avoiding the emission of 30,000,000 tons of carbon, which is equivalent to planting 200,000,000 trees. And the result has been achieved thanks to energy efficiency projects and the purchase of renewable energy. The next slide shows that we have achieved 100% of our going renewable resources, which is measured by the capacity to make you or produce or manufacture new products by using recyclable items. We have started the use of green PE and manufacturing in 2020. The total production capacity used to beat 200,000,000 tons, and we became global leaders in the production of biopolymers produced out of sugarcane. Green pea is produced of green ethanol produced from sugarcane. In 2020, green PE celebrated 10 years in the market. And due to increasing the demand for sustainable products, we've achieved record sales. In addition, we were awarded internationally for our work. CPAL and Chemical Week have awarded our performance, thanks to our sustainable characteristics of products. Brescain aims at expanding its portfolio of sustainable products and has been working on developing green mag and expanding the green ethylene capacity. GreenPE keeps the same properties, performance and versatility as traditional resin, but it captures up to 3.09 tons of carbon dioxide per produced ton. The next slide addresses our achievement in the goal of post consumption. We've achieved 37% of what was our goal of recyclable post product post consumption product. And we have get ready to work on circular economy, disposing all the waste using mechanical and chemical recycling and involving the whole plastic chain. Since then, we have been making partnerships with our clients to conceive new products to expand and facilitate recycling and reuse of plastic package. These initiatives encompass investments to support new technologies, business models and also systems for collection, triage, recycling and recovery of materials. In addition, we are founding members of Alliance to Wind Plastic Waste, AEPW. It's a global entity that aims at eliminating plastic waste discarded in the environment. By doing that, we've seen the expansion of recyclable resins being sold and we finished the year in 2020 by commercializing recyclable plastic in all the regions where we have operations. And we have we keep on working to avoid inappropriate disposal of plastic in the environment, leveraging recycling opportunities in our operations and in the value chain worldwide. The next slide shows how we've achieved our economic and financial results by 95 94%, excuse me. This is a measure based on the company's investment risk rating. We've maintained our investment grade for most of this period even after being after Brazil being downgraded, after the sovereign risk has been downgraded. And this has been maintained through our geographical diversification. After so many years, we had a reclassification. We were downgraded because of the uncertainties caused by the COVID-nineteen pandemic. We continue to be committed to maintaining our financial health and in order to do that, we've implemented several measures to reduce leverage. 2020 was finished at a leverage based on the net debt to EBITDA ratio of 2.94 versus 4.97 at the end of 2019. In the Q1 of 2021, this measurement dropped to 1.8x. With that, our outlook was updated to positive last week by Fitch rating, which reflects our commitment to maintain our strong liquidity position, cost discipline and we are always trying to retake our investment risk grade. The next slide shows how we strengthen practices in our compliance and governance systems. We received a certification from the compliance authorities in Brazil and in the U. S, the U. S. Department of Justice, the Securities and Exchange Commission, and the Brazilian Federal Prosecution Office. We implemented all the recommendations for a robust and effective program. As a highlight, we have a higher number of independent members in our Board. We created a compliance committee in the bylaws with at least 3 independent members from the board. We now have a Chief Compliance Officer who is independent from management and who responds directly to the board through the compliance committee. The compliance team was expanded by 8 times and it was expanded to all regions. And we also defined compliance targets for all of the company's leaders. And of course, we cannot forget on the next slide about the case of Maceillor. This was a very relevant event. And considering the geological phenomenon that took place in Alagoas, it's important to highlight how we advanced in addressing solutions. We had a specific event about this topic and we continue to be committed to our community's safety and well-being. We're focused on supporting the affected families completely and understanding the phenomenon from a technical standpoint. We continue to make progress on the relocation and financial compensation for families there. Until March this year, 11,600 families were relocated. We offered 5,500 proposals of which 99.6% were approved. And regarding payments made, our disbursement so far has been until March around BRL713,000,000. So to deal with this topic, we set a dedicated team to find solutions for the impacted by this phenomenon. And we had transparent talks with the government and with the communities. Finally, to close this chapter, Braskem has made efforts which have been recognized by several specialist organizations in sustainability. For example, we have been in the RobecoSend list or yearbook since 20 14. We've been one of the most sustainable companies in the petrochemical sector. We were also listed in the B3 Carbon Efficient Index since it was created in 2012. And this is due to our transparency on our emissions. We've been recognized by ECE ever since it began in 2,005 and will continue to be part of this process. We received the gold category in the Brazilian GDP protocol program, which measures greenhouse gas emissions since the first time this inventory was made. I've mentioned CDP, where we have been leaders since 2016. And finally, Braskem is the only leading company in Brazil for the UN Global Compact, which we've participated in since 2014. Jorge Sosso will continue. He is the Sustainability Development Director at Braskem and he is the main person in charge of the advances we've had on this topic. He'll present our new commitments for the next decades. Thank you, Pedro, and good morning, everyone. Good afternoon, if you're listening from abroad. As you heard, our first improvement cycle has already taken place. And now I'm going to talk to you about our 2nd long term improvement cycle, which starts now, and I'll define our goals for 2,030 and 2,050. First, we're going to watch a brief video on what we're launching today. Future. In line with the UN's sustainable development goals for 2,030, Braskem has made new commitments to people and the planet. Working in different dimensions, we have set several goals for the coming years related to eliminating plastic waste, expansion of our I'm Green renewable and recycled portfolio, promoting and our ambition for carbon neutrality by 2,050 to combat climate change. We will transform the world to be a more sustainable place for everyone now and for generations to come. Braskem, a more sustainable future today. Well, that's a summary that shows how we're renewing our commitments in sustainable development and it shows all the global challenges that we are facing collectively. As you know, this was approved by our Board. The commitments have been made last year after long internal discussions and 27 workshops involving several leaders. We talked about our corporate risk assessments. We made an internal review of the materiality matrix. We benchmarked with peers and we also considered the requirements from the main ESG indexes. And of course, we also used external references for sustainable development as we mentioned, the Paris Agreement and the sustainable development goals. So we've made 7 dimensions to promote sustainable development with our long term commitments. This is shown on the next slide, Slide 24. The 7 dimensions intend to extend our positive impacts and mitigate risks in Braskem's path, creating value for our business through our focus on innovation and sustainability. The 7 topics are health and safety, economic and financial results, eliminating plastic waste, fighting climate change, operational eco efficiency, social responsibility and human rights, and sustainable innovation. The 7 topics cover all of the ESG dimensions and you can see how it's represented in colors. But they definitely also apply to more than one dimension. It's important for you to know that for 2 of them as you saw in our last launch last year, we decided to have a very strong public commitment for the long term associated to what we call the carbon neutral circular economy. These commitments were taken at the end of last year and I'm going to mention some of the information on this again. So let's start with the first health and safety topic. As Pedro said, safety is a non negotiable value for BreastCat. Obviously, this is how we deal with safety. This includes all of our employees, third parties, surrounding communities, and everyone involved in the process. This is a key topic so that we can continue our operations and we understand that Braskem due to its size of importance plays a protagonist role in this theme when we have indicators which we have been following up on for a long time. And we're among the best in the global chemical industry. We intend to keep this until 2,030, and our ideal level is to have 0 accidents with people, occupational safety and process safety. As you can see here, our goal is 0.5, but our ultimate goal is always 0. Our own ongoing projects, we have been focusing on human reliability and it includes education, knowledge management, updating field practices with attitudes that will reduce people's risk at work. We have many contractors with us and we could not leave them out. So contractor safety is also one of our main points and we want to improve this standard to global levels. Also our health program, which includes all of our employees and everyone at Braskem. We're looking at COVID and how important it is. So it considers aspects that go beyond just the occupational hazards that we have. We're focusing on the emotional and social aspects of all human beings involved. And also digital transformation, which helps us to use tools that we developed in our digital center and with 4.0 industry to further improve how we manage operations and how we reduce risks. So these are the main projects for health and safety. The next slide, Slide 27, shows what we want to achieve in economic and financial results. Of course, we want to create value sustainably and that means creating value for shareholders on the long term so that we can meet the growing trend of incorporating ESG criteria into this decision making of the financial market along with their perspective. Reschem has been making a relevant contribution to sustainable development and as Pedro said, we've incorporated sustainability into our business strategy as a lever for the long term. And in 2,030, we want to be recognized as a leading company for our contribution to sustainable development. Our objectives are to maintain the company's financial health, our discipline and capital allocation focused on creating value, as I mentioned, and strengthening our relationship with the market based on ESG requirements. The indicators are shown here on the slide. And we want to be among the 1st quartile of shareholder returns that is our total shareholder return. We also want to be among the best companies in the world in the Dow Jones Sustainability Index and we also aim to improve our governance and compliance processes in accordance with the best level practices according to the ISS Quality Score. And finally, we also have to include client satisfaction so that we can achieve an excellent reputation level with them. So what have we done on this topic? This is shown on Slide 28. As Pedro said, we've seen how our compliance and governance practices program has improved and will continue to improve without a doubt. Pedro has personally joined a selected group of CFOs who are working towards the UN's Global Compact, defining the best practices and integrating them to the company's financial management. We're also unifying our report which you will soon see. It's an integrated report with the main reporting standards and sustainability which complies to requirements from the investors and is linked to GRE, IIRC standards and so on. Executives with DSG goals is not a new practice for Braskem and that's why we've reached 85% of the goals we defined in 2009 until 2020, but we will definitely strengthen this requirement. And finally, financial discipline and creating ESG value through financial health and discipline in creating value and strengthening our relationship with the market based on ESG values. These are our ongoing projects to reach the goals we mentioned in the previous slide. Slide 29 discusses our focus on eliminating plastic waste. As I said, this is one of the topics where we want to be seen as a part of the solution. In 2020, we've announced our goals and we know very clearly that we are moving towards a circular economy so that we can address all the issues related to waste. Of course, this is a movement that requires investments and technologies so that the solution does take place so that we can collect and sort better. So, this is very important and we understand that this can leverage our business. We hope that we can do this through partnerships and it is for that reason that we understand that we need to continue to reinforce partnerships and develop new initiatives and projects as well as develop technology, both for mechanical and chemical recycling, which means transforming plastic waste into a chemical product that can be reutilized in the chain. By 2,030, we want to be globally recognized as a company that develops the recycling value chain in the regions where we work, and we want to reach the position of a leader in this theme in the Americas. We hope that until 2,030, we can recover 1,500,000 tons of post consumption plastic per year, and we want to reach 1,000,000 tons a year by 2,030. And that will help us recover all the plastic waste that is now being discarded in the environment. So we hope to strengthen this movement. Some ongoing projects are shown on Slide 30 and also on Slide 31. With mechanical recycling, you might have seen a recent announcement where we started partnerships with Valorin and Testimpar. We have the capacity to provide 2,000 tonnes a year. So this increases our participation in treating plastic waste. The same is taking place in Mexico and into the U. S. And Mexico with Alchemare, one of the biggest recycler of the region and in the U. S. With Cyclics and other players. They aim at developing innovative recycling solutions for all types of plastic waste. To address chemical recycling, this is still a technological development issue. In Brazil, along with Senay and the Federal University of Rio de Janeiro, we've started a partnership to develop catalysts to improve our performance in mechanical excuse me, in chemical recycling. In the U. S, we started a partnership with Insina. Slide 31 now. You can see here different sector alliances. We don't think we are going to deal with all of that on our own. And this is why we have to have global alliances such as AEPW. And we also have local alliances, one of them called Bluekeepers here with a global pact and an initiative announced last month to understand the source of plastic waste that goes into aquatic environment. And by doing that, we can define the best solutions to deal with the problem. In the U. S, we are also a member of the PP Recycling Coalition. Socially speaking, it's also important to know in many countries such as in Brazil, for example, waste management is very much related to social inclusion. And this is why since 2013, we have 2 programs, one called CERMAIS, be more, for workers that work in recycling the INVO, waste collector, operators and cooperative of recycling waste and Edukatu, which is a second program that teaches young people about conscious consumption because we know the participation of the community is essential to make sure that circularity can be implemented. So these are the 2 social projects we have, but there are others in Mexico and other programs that we are offering to promote further education. Now let's go to Slide 32. Here, we have a it's part of our public commitment for 2020. It's something really strong and compelling. Our focus is to reduce and neutralize greenhouse gas emissions. We want to rank among the best companies in dealing with greenhouse gas emissions and be an active player in collecting those emissions using renewable energies. When they are used to produce stable chemicals, they reduce CO2 from the atmosphere. Almost 3 tons are excluded from the atmosphere when we use renewable polyethylene, and the same logic has been evolved. So we have made a commitment, which is to reduce by 15% the absolute CHD emissions within our plants at Braskem, what we call scope 12. And because of energy efficiency and purchase of renewable energy, we want to reduce by 15% in absolute values these reductions. And by 2,050, we will reach carbon neutrality through this kind of initiative of energy efficiency, purchase of renewable energy and also by developing new products and implementing new plans based on renewable energy and also on technology development, making investments in new plants that can also capture CO2 from the atmosphere, manufacturing stable chemical products. So these are our goals for 2,030 and 2,050 concerning climate change. To reach that, we are moving ahead. And here, you can see some of our projects in the next slide. Energy efficiency, I've mentioned a number of them. There is another one here in Greater Sao Paulo. It's a program for energy efficiency to reduce by 90,000,000 tons per year. In renewable energy, we've announced a number of partnerships. For example, this year, a partnership with Casa dos Ventus to reduce 700,000 tons of greenhouse effects during the contract. These are partnerships and agreements that really helps us avoid 1,500,000 tons of CO2 throughout the period. In terms of carbon offset, probably you've seen that we've announced the expansion of our capacity of green ethylene. It has increased by 60 kilotons or an investment of $61,000,000 It's one project, and there are a number of other projects being analyzed. Innovation is essential so that we can offer more to fight climate change. We have a very developed program of green mag, which is used for PET production. And this is a partnership with Aldertopso, a Danish company that will help us develop Mag from sugarcane. It may be produced of different sources here. We are working on sugarcane. There is a pilot production already in operation, and we've announced that our pilot plant has been producing very good results. Next slide shows us our initiatives for operational eco efficiency, our homework, what we have to do in our industrial plants. We work continuously to improve the efficiency of our plants, especially involving energy, water because these two topics are extremely relevant for all the other kinds of impact and efficiency. By 2,030, we want to rank among the main in operational efficiency in petrochemical industry. Our focus comprises carbon efficiency and energy efficiency, and it's also related with climate change because it involves water security. We want to increase by 100% water security, having access to safe sources, which are not subject to water stress in the areas where we have our industrial plants. We are currently running at 83%, and we want to achieve 100% of water security in this by 2,030. Next slide, we hear about energy efficiency. I've mentioned some of them, but we have furnaces that really need a lot of energy, but we are working on reducing those cracker furnaces and how much they need of energy. We are going to keep on emphasizing this point, reducing water consumption and working in energy efficiency. We always have projects involving that to reduce the amount of water needed in our cooling towers. This year, for example, we already have managed to save 300,000,000 liters of water, resulting from initiatives like that in Bahia. In terms of water stress and security, we are constantly looking for new sources, especially in areas where there is water stress. In Brazil, in Sao Paulo, it's a reality. And this is why in 2012, we had invested in the project AquaPol, the largest project of reused water in the South Hemisphere. So we are planning to have the same in Rio de Janeiro using safer sources to constantly have water availability to our operations. And finally, as I've mentioned, water reuse, which is closely related with water stress, this is the kind of initiative we want to put in place. So these are the main projects of operational eco efficiency. The next slide shows us Slide 36, we see what we are going to do in social responsibility and human rights. Braskem, by 2025, want to be recognized as a company focused on people because we respect and promote human rights throughout the whole chain, always fostering local development for the communities surrounding our operations. These are some of initiatives we are working on, gender, race, human rights and benefits provided to people around our plans. We want to have more women taking leadership roles. We want to have more black people people working in our operations in Brazil and in the U. S. We want to manage the risk regardless of their level involving human rights and also increase the number of people benefit by our social benefits and donations. So these are the objectives for 2,030. The next slide brings us some of the ongoing projects involving diversity, equity and inclusion. We have an internship program, which provided flexibility of criteria for selecting people. So we have underrepresented groups. For example, English is no longer a requirement. We believe that this is something that can be learned once we have the young people working with us. So 40% of our openings no longer require knowledge of English. We also have what we call blind CV analysis. Last year, we've also made a commitment, which is the CEO plan of diversiting the global pact, a number of commitments to actions that promote a diverse and inclusive environment for team members. Surrounding communities, Pedro mentioned about the case in Masea. It is to keep on offering a fair and safe way of having financial compensation and reallocation program for people, always analyzing the situation of the region and stability of our different regions. Since last year, we've all paid close attention to what's happening with COVID. Last year, we donated BRL 11,000,000 BRL in PPE and also food, making donations to the different communities that are around our operations and also in partnership with our clients, we've reached nearly all states in Brazil. We are constantly announcing new actions, focusing continuously on the economic challenge, the situation of hunger, the fact that people are experiencing difficulty financial difficulties do not can no longer afford to have decent meals. We want to continue and expand our program of local development in different communities. These are programs that amount to 237,000 people benefit and donations not only involving COVID situation but also different social projects, and they have amounted to EUR 25,000,000 in 2020. Finally, the last topic that has guided our macro objective are sustainable innovation. This is something that is cross section. It involves all the other four objectives. Through innovation, we want to deliver to the society solutions which are transformative. By 2,030, Braskem wants to be perceived and wants to keep on accelerating the perception of a partnership that offers sustainable innovative solutions for consumers and for the society at large. We've created an index to measure to what extent the projects bring contributions to sustainability. It contributes what we do to water, chemical safety, energy, climate change and also circularity. In 2020, we've reached 80% of our portfolio fully aligned with the sustainability index. By 2025, we've reached 85% and by 2,030, 90%. The next slide brings our reorganization of our platforms to encompass sustainable innovation. There are 5 key focus points: new generation of processes, so technologies for existing access assets improving carbon and energy efficiency and also creating differentiation in recycling and performance. We want to make an impact by relying on our existing assets. In cycling, we've been focusing on conversion of plastic waste into added value products. It involves technology and process in chemical and mechanical recycling. Conversion of CO2 to chemicals in the future may become necessary to strengthen our contributions. It may become an opportunity indeed. So we've also invested in it. The 4th pillar and probably one of the main contributions right now in terms of innovation is conversion of biomass into chemicals. We are the largest manufacturer of biopolymers, and we want to keep our leadership investing in MedGreen and others, all based on conversion of biomass into chemicals and value added products. Finally, we also work on material replacement, delivering better solutions to the society at large because the society also has to move together towards a carbon neutral economy, which does not depend on inappropriate items. With that, I come to the closing remarks of my presentation. But all the goals shown on Slide 40 reinforce our commitment with governance. And this is why we have a Global Sustainability Committee. It's like a marathon. It's really important for you to understand. We now have a full set committee. It means monthly. And the Global Sustainability Committee is led by all the executives of our company reporting the progression of our strategy to the Board of Directors. The Global Sustainability Committee encompasses our C suite and all the leaders of all the different macro objectives. All the different VPs have taken over as their main focus one of these objectives. Pedro, for example, who is here with us, he is the leader in the macro objective of economic and financial results, but we have all VPs involved. We are also supported by a strategic PMO group, which is part of the transformable value, which helps us generate long term value to the company and also sustainable development team, of which I am the leader. With that, I would like to hand it over to Roberto Simeones, our CEO, for his closing remarks. Thank you all very much. Good morning, everyone. It is a great pleasure to be here with you for our ESG Day. The presentations made by Giorgi can really show you the history of Braskem and our commitment with all topics that concern ESG since the very generation of the company. I would like to make a quick summary of everything that we've said. I'm trying not to be repetitive, of course. Slide 42 brings our 6 points for comments. Since our creation, our sustainable development has been an important focus, being recognized not only in Brazil but also globally, thanks to its very advanced position we have taken over. As such, we have continuously incorporated all the principles of sustainable development in all decision making process throughout the 2 decades of existence of our company. Risk assessment, materiality of risk and observation of international guidelines has always been part of our process and decision making. In some situations and throughout the years, I've been working with Braskem, I've been noticing that the decisions have been made regardless of legal requirements or external determinations to the company. To the contrary, we are constantly paying attention to that regardless of what the external obligations require of us. By 2020, all the significant progress we've presented and shared by Giorgi and Pedro have been really significant, reaching 85% of the established goals we have set, leveraging a number of possibilities. Now looking ahead to the future, fully aligned with our shareholders, we have goals for 2,030 and 2,050. It renews our strength to strengthen our contribution to the planet where we live, improving all the governance mechanisms that the company has embraced. And we understand that this is a part of our survival for the company, a basic requirement for our constant expansion of our businesses. We are fully committed with sustainable development, always focusing on creating value from the transition to carbon neutral circular economy by using renewable and circular raw materials. In the next slide, we can see all the priorities of Braskem for 2021. The 2 main priorities are focused on topics which are not part of strategy or future. In fact, they address 2 key problems we have to focus, which are a circumstance. 1 is the geological phenomenon in Alagoas, And it's been addressed, thanks to very important breakthroughs. And we expect to have it all completed very shortly. Secondly, we're going to have reliable ethane supply to Braske and IDESA, another point that we expect to have fully solved shortly. We have a number of actions ongoing. Another constant concern is capital allocation and financial health of the company and the guarantee of financial health for our company is really important. And the results, as you have seen and been monitoring closely, have been really positive. And the last three points are focused on the future. The first one is to strengthen Braskem's image. Much of what we've said, and George has emphasized a number of those issues, we really want to strengthen the image of our company, not only our different team members, but also clients, suppliers, investors and the society at large. In addition, as another important point, innovation, digital transformation. And there is a number of opportunities that we can really address, complexity of all the operations. Really, we can expand our efficacy in terms of innovation, speeding up digital transformation. We've made investments. And this year, we have the highest budget dedicated to innovation. We really have to invest our budget in a very smart way focusing on the future of our company. And finally, we have ESG position of the company. It has been beautifully shown by everyone before me. And please bear in mind that safety in our operations, safe performance is always our main focus in all our operations. And as we said and keep on emphasizing, it's a perpetual nonnegotiable value in our strategy. With that, I would like to thank you all. And now I would like to open for your questions. Thank you. Thank you. We will now begin the questions and answer session. The first question will be asked by Ricardo Rezende from JPMorgan. Good morning, Roberto, Pedro, Jorge and Rosanna. Thank you for this event. It was very informative, a very interesting discussion. I have a couple of questions. My first question is about a point that Georges mentioned during his presentation. We were talking about increased recycling. He mentioned a difference between chemical and mechanical recycling. How are you seeing chemical recycling developing? Do you believe that this is something for the medium term? Do you think it will reach commercial scale? What are your plans? And is chemical recycling getting a bigger slice of your plans than in the past? If you also if you could tell us a bit about how clients have been accepting this kind of product. It is quite unique, right? There's a matter of feedstock that is important to understand because it is not fossil feedstock. So how has it been accepted? How is it being priced? What is Braskem's capacity and what will it be for the long term? Thank you. Hi, Ricardo. Thank you for your questions. So let me answer your question on how chemical and mechanical recycling are evolving and then Pedro will discuss your question on the economic side of things. From the technology development point of view, mechanical recycling well, and chemical recycling, both of them deserve our efforts. From mechanical recycling, usually waste is contaminated and it's very difficult to separate them which gets in the way of its quality. So we've been investing in projects that allow these products to be separated better. For example, we have roller grade. It would be a way of identifying them through visual aspects and separate them or sort them automatically and that would facilitate things. But we're also working on orders so that the quality of recycled products can be better, at least with mechanical recycling. We understand that this will be developed faster than chemical recycling, although we have tested chemical recycling in last year. For the first time, we included a product from that was the result of a process called pyrolysis in our plants. Of course, still in a small amount, but it was a test that has shown that this is a process that can be promising. It still needs to be improved. This is something that all players in the world are working on. Most of the petrochemical players in the world are working on the solution so that it has a future because we know that we need both kinds of recycling, right? Although we have processes that sort plastics very well, there's always going to be something that will require more treatment, right, or a more powerful treatment. And we understand that this will be done through chemical recycling. And Pedro will talk about your second question. Thank you, Ricardo. So Green PE has been highly accepted. Braskem is now sold out. All of its production has been sold. As I mentioned, we have 200,000 tons in production capacity and we've approved earlier this year a 30% expansion of that capacity. It was a $61,000 excuse me, dollars 1,000,000 investment and we hope that in the future we can continue that expansion. And we're confident that the product will not have any trouble being used in the market. Also, when you ask about returns, we believe that the returns from this expansion will be quite attractive. We're still assessing new projects related to green polyethylene because this market is growing and BrasDIM is by far the biggest player in this niche. So we see that our clients are very interested around the world on getting additional volumes of it and we believe that justifies additional investments into this market. We're continuing the expansion project we had announced, but we're also looking at new fronts whether in Brazil or other regions so that we can continue to expand the segment. Great, Pedro. Thank you. And if I could ask another question. Today, the main hurdle for developing this well, would it be? What would it be? Are we being conservative or is it access to raw materials? What is preventing you from accelerating this even more? Ricardo, there really is no specific hurdle here. When we talk about capital allocation, we decided to invest on removing bottlenecks from the Green Ethylene plant. That's the quickest investment we can make that will provide returns very shortly. But we continue to assess other projects and other opportunities. As a reminder, an investment like that takes longer. You need to buy ethanol, so you need to have certified ethanol where you're sure of its origins and you have guarantees. Then you also need to invest in Green Ethine which is what we're investing on and polyethylene. We already have some polyethylene plants in Rio Grande DeSul that have some capacity available. So that's the logic we're following. Our next investment would need to include a new green ethane plant. So depending on the configuration, we could have to invest in polyethylene and also purchasing ethanol. So we may expand quicker because while this was an investment that was easier to make on the short term, but we are looking at opportunities to invest, as I said, at a new plant and a new site. Looking at the long term, of course, we're not looking at investments only for the market demand that we will receive in the next years. We're also analyzing the next 10 years. We expect this segment to grow significantly. Moreover, we mentioned this earlier, but as a reminder, we are also investing in other renewable lines. The clearest example that we have is GreenLake, which is still a tech development, it's doing well, and if it works on an industrial scale, it can be a very good line that's very competitive for the future. Great. Thank you, Pedro. The next question will be asked by Gabriel Prado from Citibank. Roberto, Jorge Pedro, thank you for taking my question. It's always great to hear about ESG initiatives. I'd like to ask you about 2 specific topics. 1st, carbon emission reductions and also renewables. If you could give us some more color on that, we know that there's a market for it in Brazil. Sorry to interrupt, but your connection seems to be very poor. We heard that you were asking about carbon emissions, but we can't understand your specific questions. Is it better now? No, the sound quality is really poor. All right, I will try again. Right, we are going to continue with the next question and then we will come back to you. Okay, no problem. The next question will be asked by Matos Bonsajji from UBS. Hi, everyone. Good morning. Thank you for taking my question and congratulations on this initiative. My question is a bit more generic about the Maceo issue. Now that you've disclosed this information and now that we've heard about the impact there, I'd just like to know what kind of lessons the company learned after this event. How did this impact your internal processes And what strategies is the company implementing so that this does not happen again in the future? That's all. Thank you. Hi, Matias. Thank you for your question. I think, well, first, we at Braskem have always carried risks from working in the petrochemical industry, right? There are inherent risks. So we've always had a very good crisis management area. This was a crisis in our governance and it was different because it was not an industrial event. It was the mitigation of a social environmental risk. So from that standpoint, I think we learned a lot about how to manage a crisis of that nature. As we said before, we placed a very strong team to manage the event in Marseille. I'd say that we have many of the best professionals in Braskem focused on managing this process. So we took people who were very competent and put them in this group to be a part of this management. We learned quite a bit about how we run a process of this sort. Another relevant advance we had was in the enterprise risk management process. Braskem has always had a risk management process, but I'd say that this was an important step forward in advancing best practices in identifying and assessing risks and also in defining contractors. So if I were to mention the two main examples, I'd say it were Doze. So crisis management and the enterprise crisis management, right, are the evolution of risks. Also, one important lesson was how we can operate things differently. First in the Alagoas plant and now working with imported salts, which has different specs from what we need in the plant and that required imported investments so that we could operate with it. So, Matthias, I'd say that this is a summary of what lessons we learned. Okay, thank you. I'm not sure if our listener from UBS is still here, but I understand a bit of his question. Excuse me, our friend from Citibank. Do we have him yet? No, Gabriel has not returned to the queue yet. So what do you think? Should I continue? Well, I'll pass it over to you, Rosetta. Excuse me, Gabriel Bahia from Citibank is back. Mr. Gabriel, you can continue. Hi, can you hear me now? Sort of, but we can try. Sorry, can you hear me? Yes, we can try to hear you. Great. I apologize for my connection. So I'd just like to ask you on environmental issues. There is a credit a carbon credit market in Brazil now. So I'd like to ask you a bit about your company and with the average price of carbon credits. If you understand what the company's emission figures are, it would be about BRL300 million per year or $50,000,000 And today, it's possible to reach this value in the company. It's possible to calculate it. So my question is, how do you see this in the short term? Would it be possible to generate these carbon credits first? And what would be the potential gains for the company in terms of amounts, if you've ever had any studies on that? My second question is about governance. It's clear that there is any market a process that aims to for Petrobras to sell a part of its company to Braskem? And how do you perceive that? What would be the impact on governance for you? So those are my questions. Thank you. Okay. Thank you. I'm glad that you were able to ask your question. I think I understood it. As a reminder, our strategy to cut emissions is based on 3 pillars. First, to really reduce them as we've done since 2008 and as Pedro commented and mentioned in our results. We understand that there's still some room to reduce our emissions and that's why we are committed to cutting it by 15% by 2,030. This will happen. This is our 1st pillar. And the 2nd pillar is on offsetting our emissions, which can be done through well, instead of creating a cost, this is a quality that Breast Chem has in technological investments. We can have positive impacts on that because we're taking to the market a product that captures CO2 from the atmosphere. So we understand that this is an important way of offsetting what we emit through our products. And this is a strategy that we should have in our aims. So that's why the 2nd pillar is so important. And the 3rd pillar is developing technologies to use CO2 as a raw material, as a source, and that can also be, again, used to create new products. So this would also be a part of our strategy. Regarding carbon credits, well, the credit market is growing and we understand that it is an alternative. It's something that should always be in our minds from an economic standpoint. But at the same time, we understand that to reach a carbon neutral society, we need to physically reduce how much is issued, right? Credits will also always be a part of economic possibilities so that we can comply with any commitments that Breastcam has made or is required to make. For now, it's a voluntary commitment. So we understand that this will be a step towards a real reduction. So we don't believe that carbon credits are the right strategy right now because it's still voluntary. But we understand that we need to offset it with renewables or with CO2 captures as a raw material. So this is what I can say for now. Pedro, I'll pass it on to you. Okay. Thank you, Georgi, and thank you, Gabriel. Regarding sales and governance, well, I'd like to highlight that the sales process that we announced is selling through Novonor, our controlling company. Now the decision that Petrobras will make, we don't know. But I'd like to highlight that through selling shares, Braskem has in its bylaws 100% for all minority shareholders. So this would trigger that tag along if Duvernort is sold and this is available to all shareholders to read. And this is a good governance practice, but it's at Level 1 in B3. And this is not the TEGL log is not mandatory for Level 1. But nonetheless, Braskem adopted this practice a number of years ago. And besides that, well, I can't tell you what governance will be like after the sale. What I can say is that our governance today is world class. As you've seen, there were a number of independent Board members. We have a very strong governance system in the company now and we expect to keep it or to even reinforce it. But of course, this will depend on the sales process and how things are at the end of the process. It will be a point for us to pay attention and to discuss with the company if we are invited into this process in the future. Of course, we are going to want to understand it and influence it according to the best practices in the market. Great. That was very clear. Thank you. Well, thank you very much. If there are no more questions, I would like to thank you all for being here for our ESG Day at Braskem. And I would like to take this opportunity to thank you that the path to a sustainable way means a constant attention, and we are fully committed. We are committed to go on in this journey. Thank you all very much, and have a great day. Well, thank you all. ESTJ for breast cancer finished now. Thank you very much. You can disconnect now and have a good day.