2014 Sustainability Report - Relato Web · association CervBrasil (Associação Brasileira da Indústria da Cerveja), higher interest rates should impact products dependent on credit,

2014 Sustainability

Report

Summary02 Message from the CEO03 Highlights04 Brasil Kirin

07 Economic results 09 Governance of sustainability14 Our products and our brands

20 Strategy21 Governance21 Risk management23 Ethics

24 Stakeholders44 Our processes and impacts54 Assurance statement57 GRI index 77 Credits

Published annually, this is the third edition of the Brasil Kirin Sustainability Report, presenting the company’s main achievements and challenges in the areas of socio-environmental responsibility, operations, finance, management and governance in the period between January 1st and December 31st 2014. The report covers the same operations presented in the financial statements. G4-28; G4-30

Prepared in accordance with GRI (Global Reporting Initiative) G4 guidelines, comprehensive option, the information represents an update of the data from the 2013 report and encompasses all the company units in Brazil. The objective of the document is to account for and share our results, achievements and challenges with the key stakeholders with whom Brasil Kirin relates directly: employees, consumers, customers, suppliers, franchisees, resellers, government, industry and food and beverage sector associations, non-governmental organizations, business partners, journalists, specialists and opinion formers. G4-24; G4-29; G4-32

The identification of these stakeholders and the selection of the topics addressed in this publication are the result of research conducted by the company’s Corporate Affairs and Sustainability area and validated by its Sustainability Committee in November 2013. The selection of the topics was in accordance with the Brasil Kirin materiality matrix, built in conjunction with an external consultancy in 2013 (read more in Governance of sustainability). For the 2014 report, the Sustainability Committee determined the questions to be addressed in accordance with each material topic in the matrix. A new materiality process will be conducted in 2015. G4-25, G4-26

In addition to presenting Brasil Kirin’s actions throughout 2014, this report helps the company to establish action plans for future projects, driving the evolution of governance for sustainability. G4-18

Your comments and suggestions would be most welcome via the email [email protected]. G4-31

Introduction

2014 Sustainability Report 1Brasil Kirin

mailto:[email protected]

On the right track2014 was very important for Brasil Kirin, both in terms of business results and of sustainability actions. During the year, we were able to overcome a series of challenges in pursuit of our medium and long-term goals as defined in our Mid-Term Business Plan.

The company has a history of working on sustainable development, but the major differential in 2014 was the implantation of management via the materiality matrix– a methodology which permits the identification of the main needs and concerns of our stakeholder groups.

After the creation of the Corporate Affairs and Sustainability area at the beginning of 2013, 2014 was the year in which a culture of integrated management took shape in the company. The challenge of transmitting and consolidating this culture among our stakeholders and business partners will be pursued, the objective being to ensure that sustainability will always be linked with the growth, competitiveness and profitability of the business.

The commitment to identify and manage the impacts of our actions is aimed at continually driving social, environmental and economic evolution. This was fundamental in the way we addressed the unprecedented water crisis the company experienced in Itu (São Paulo). Based on our long-term commitment to water management - incorporated into our production processes and evident in our eight-year partnership with the Fundação SOS Mata Atlântica aimed at reclaiming deforested areas and conserving water springs -, we were able to contribute in a number of ways to minimizing the impacts of the scarcity of this natural resource. In 2014 alone, 20,000 m3 of water (around 685 tanker trucks) were donated to municipal organizations in partnership with the local government. The company also made a spring available for use by the public free of charge, as well as donating thousands of packages of bottled water to hospitals, nurseries, schools and charities in Itu.

Message from the CEO

GRI“We have also worked intensely on our institutional brand and have begun to boost people’s perception of our products and the initiatives the company supports. This adds value for the brand and strengthens us even further.”From a macroeconomic standpoint, the year was also very challenging. In spite of Brazil’s hosting the World Cup and the election campaign, which boosted the market during the year, the beverage sector grew only modestly. Consequently, we started to look for alternative ways to grow in a more profitable and sustained manner, rethinking brand strategy and distribution throughout the country.

Although the country’s economy is sluggish, it is our understanding that there are growth opportunities in the fast moving consumer goods market and we intend to pursue these. The challenge will be to operate in a decelerating economy and in a market which is heavily taxed, while being dependent on inputs (aluminum, hops, malt and barley) that are directly affected by exchange fluctuations, particularly in dollars and euros.

“Brasil Kirin is a company whose essence is solid. We work tirelessly on knowledge management and on developing our people.”

For 2015, we project a growth rate of approximately 4%, pursuing opportunities both for the company and for the communities in which it operates. G4-1, G4-2

Enjoy reading it!

Gino Di DomenicoCEO


One of the Best Companies to Work in - GPTW (Great Place to Work) Brasil, published by Época magazine

Guia Você S/A – The Best Companies for You to Work In, published by the magazines Exame and Você S/A

Best company in “Sustainability Governance”, according to the Exame Sustainability Guide

Launch of four new special beers under the Baden Baden and Eisenbahn brands, as well as the Japanese brand Kirin Ichiban

A 13,000 metric ton reduction in sugar in beverages with the Schin Sugar in the Right Measure program over the last three years

96% of company leaders trained in sustainability

50,000 people impacted by the Brasil Kirin Tour

648 thousand hours of training for employees

7% reduction in accidents compared with 2013

10% increase in material recycled by plants, totaling more than 33 thousand metric tons

17% of the total soft drink volume commercialized in PET packs produced with 100% recycled PET resin

Solar heating in Manaus, generating savings of 50% in natural gas consumption in the plant’s boilers

8.5% reduction in energy consumption at plants, compared with 2013

142 thousand liters of diesel fuel saved through the backhaul program in partnership with the retail trade

100% of logistics providers participating in the ETRAF Transportation Excellence program

Use of road trains that emit 25% less CO2 than conventional trucks

Around 3 million seedlings of more than 100 tree species produced in the SOS Mata Atlântica - Brasil Kirin Forestry Experimental Center

Reclamation led to the recovery of 19 springs with an estimated 20% increase in ground water and 5% increase in surface water

30 thousand participants in the company’s Learning with the Mata Atlântica program, in partnership with SOS Mata Atlântica over the last four years

11 communities benefiting from the Salvador em Campo project in partnership with the Salvador city government in Bahia

Highlights


Young, but many stories to tellWith its head office in the city of Itu in the state of São Paulo, Brasil Kirin is part of one of the largest beverage groups in the world, the Japan-based Kirin Holdings Company. With a strategy focused on consumer satisfaction, on innovation and on the creation of strong brands, Brasil Kirin strives to strengthen its institutional identity among consumers, highlighting products already known in the market, as well as the company’s power to innovate using Japanese technology. G4-3, G4-5

Headquartered in Japan, Kirin Holdings operates in more than 15 countries. In December 2014, its 270 companies employed approximately 46 thousand people. In Brazil alone, the company has more than 11 thousand employees in its 13 manufacturing units located in 11 states: Manaus (Amazonas), Benevides (Pará), Caxias (Maranhão), Horizonte (Ceará), Alagoinhas (Bahia), Recife and Igarassu (Pernambuco), Alexânia (Goiás), Blumenau (Santa Catarina), Igrejinha (Rio Grande do Sul), Cachoeiras de Macacu (Rio de Janeiro), Campos do Jordão and Itu (São Paulo), as well as in its 23 company-owned distribution centers and 186 resellers, responsible for serving more than 600 thousand points of sale. G4-8, G4-9, G4-10, G4-17

Brasil Kirin

Brasil KirinEconomic results GRI


Mission, vision, values G4-56Mission•To be present in consumers’ lives with innovation and quality, gaining their trust

and admiration. •Brands: valued and profitable •Distribution: presence and effective execution.•People: engaged with superior results.

Vision•To be an innovative beverage company, giving consumers pleasure and joy.

Values •People: commitment. Proud to be Brasil Kirin. Prepared.•Services: consumer/client focus. Building partnerships. Excellence in execution.•Results: superior results. Successful company. Recognition

Brasil KirinEconomic results

GRI

COMpanY-OwnEd dIstRIButIOn CEntERs

ManufaCtuRInG plantsManaus (aM), Benevides (pa), Caxias (Ma), Horizonte (CE), alagoinhas (Ba), Recife and Igarassu (pE), alexânia (GO), Blumenau (sC), Igrejinha (Rs), Cachoeiras de Macacu (RJ), Campos do Jordão and Itu (sp)

where we are G4-27Illustrative image


The beverage industry employs more than 300 thousand people in the country. Seasonality is a key characteristic of the alcoholic and non-alcoholic beverage market, with higher consumption during the summer months.

The sector accounts for 3% of the country’s GDP (Gross Domestic Product) and generated R$ 33.4 million in taxes in the reporting period.

Today, the industry is facing a serious challenge: after extensive negotiations with the federal government, in 2015 a new tributary model will be introduced for the cold beverage segment (beers, water, soft drinks and isotonic beverages). Under this new model, the sector’s tax load will increase by 10%.

In the soft drink market, the emerging countries led a 3.3% increase in the volume commercialized worldwide from 2013 to 2014. There is also a trend towards volume increases for functional products, which should be maintained over the coming years: consumption of energy drinks grew 9.8% worldwide in 2014, and bottled water sales volume increased by 6.1%. In Brazil, data from the tax authority Receita Federal’s beverage production control system (Sicobe) showed a soft drink production of 15.83 billion liters in 2014, an increase of 1.46% over the previous year.

Production in the beer sector grew 4.28% compared with 2013. Sales were boosted by high temperatures, by Carnival in March and by the organization of the World Cup in Brazil.

The conjuncture for 2015 is proving a little more conservative, and companies in all segments will be exercising rigorous cost controls. According to the brewers’ association CervBrasil (Associação Brasileira da Indústria da Cerveja), higher interest rates should impact products dependent on credit, which could represent an opportunity for the foods and beverages sector.

the beverage sector in Brazil


Economic resultsChallenges and opportunities2014 was a very challenging year for Brasil Kirin. Competitiveness in the industry and instability in the market resulted in an atypical year, which ended with an economic scenario very different from what had been planned.

Growth expectations had been higher in all sectors. The volume recorded by the Sicobe beverage production control system for the entire industry indicated a 4.28% increase in beer production and a 0.98 % rise in soft drinks. With this, Brasil Kirin was forced to review all its planning and targets in the second half of the year, a move which enabled the company to maintain its results at the same level as previous years.

There was a strong slowdown in consumption in the second half of the year. Consolidated gross sales revenue was R$7.193 billion, 3.4% down on 2013. The review of commercial discounts helped to improve net operating revenue, which totaled R$ 3.987 billion in 2014, representing a decrease of only 0.9% compared to 2013. Ebitda in 2014 was R$ 472 million, remaining stable compared with 2013. G4-9

The macroeconomic conjuncture for the year underscored the importance of seeking ways to maintain sustained growth, leading the company to initiate the design of a new working format, with special focus on distribution and commercialization. Brasil Kirin will work on understanding how the market will behave during this new cycle and, within this model of moderate economic growth, will pursue any viable opportunities.

Brasil KirinEconomic results GRI


Indirect economic impactsBrazil Kirin has an integrated intelligence system that monitors and studies diverse beverage industry areas, socio-economic conjunctures, consumption habits and overall market dynamics. These studies are undertaken based on a methodology that enables the creation of diverse scenarios and their respective impacts.

The indirect economic impacts identified in 2014 are related to the changes in taxes on products. The beverage industry is subject to heavy direct and indirect taxation. Drastic or constant alterations in taxes can mean the difference between the viability or not of the business.

Direct and indirect job generation, which in 2014 was positively influenced by the opening of five new company-owned distribution centers, also indirectly impacts the generation of wealth and the community (employees, shareholders and the communities surrounding our operations). G4-EC8

The donations of water to the city of Itu during the water supply crisis which affected the region generated an indirect economic impact on the community, benefiting the population and its access to basic health services (donations to clinics) during this period of restrictions. G4-EC7

The company also assesses the influence of its operations and the financial implications, risks and opportunities arising from climate change. The decision in 2012 to invest in a wind park in the municipality of Acaraú (Ceará) to generate alternative energy, as well as the company’s water management practices over recent years are examples of Brasil Kirin’s orientation to prevention. G4-EC2

Brasil KirinEconomic results

GRIValue added statement (R$ thousands) G4-EC1

2013 2014

Shareholders (remuneration of own equity) – –

Employees (remuneration, benefits and charges) 662,331.19 720,862.49

Government (taxes, charges and contributions) 1,337,637.91 1,462,657.09

Deferred income/Losses 65,462.47 22,823.42

Interest and rents (remuneration of third party capital)

462,526.66 571,511.56

Investments in the community* 180.90 286.16* Only donations in products or company support for institutions undertaking community projects via federal incentive laws were included. Read more about social investment in Communities.


Challenges for sustainable developmentSustainability and strategic growth are managed jointly at Brasil Kirin. The potential short and long-term impacts of each new project in the corporate area, in production or in distribution are analyzed exhaustively. The creation of the Corporate Affairs and Sustainability area in February 2013 led to the consolidation of measures and strategies which hitherto had not been integrated into Brasil Kirin’s planning.

The governance of sustainability is directly linked with the CEO of the company and plays a strategic role in Brasil Kirin’s growth. Its attributions include the integration and alignment of the social, financial and environmental areas in the pursuit of concrete results in line with the company’s strategies, which include creating shared value. For this reason, the topics defined as priorities for the company in 2014 remain the same. Click here to see them. G4-35, G4-36, G4-45

Sustainability is incorporated into the company’s strategic map and systematized in its balanced scorecard, determining the indicators for the variable remuneration of all employees. G4-51

In 2014, the participation of leaders in training provided by the Sustainability school was incorporated into their variable remuneration. The purpose was to drive deeper knowledge about sustainability among company leaders, thus forming a basis for consolidating sustainability in the core business. At the end of 2014, 96% of Brasil Kirin leaders (from coordinators to the CEO) had concluded the online

Governance of sustainability

Governance of sustainability GRI


http://relatorio.brasilkirin.com.br/pt/pdf/relatorio-sustentabilidade-2013.pdf

training available on the corporate education website, totaling more than 3,000 courses concluded.

The Sustainability Committee, a multifunctional group of leaders, discusses strategic actions and projects to be implanted by the company. The committee, which meets on a bimonthly basis, consists of leaders from the Quality Assurance, Planning and Logistics, Institutional Brand, Economic and Financial Development, Supplies, Corporate Communication, Human and Organizational Development, Industrial, Legal, Safety, Health and Environment, Commercial and Sustainability areas. G4-34, G4-43, G4-47

For the second year running, Brasil Kirin is among the most sustainable companies in Brazil, according to the Exame 2014 Sustainability Guide. The company also received a distinction in the Sustainability Governance category in recognition of the strategic nature of the work it has done and the intense involvement of its different internal areas. In 2014, 61 companies from 19 sectors were included in the ranking.

Recognition


GRI


definition of the material topicsAt the end of 2013, in partnership with a consultancy, Brasil Kirin defined its material topics. This involved consulting internal and external stakeholders, studying a series of company documents and using best practices adopted both inside the company and in the market as references. Of the 12 topics chosen, eight were defined as management priorities for 2014 by the Sustainability Committee (see the materiality matrix). The remaining four will be prioritized in 2015, when a new materiality matrix will be elaborated. G4-24, G4-26

The topics are:

To know more about the topics, click here G4-18, G4-19, G4-20, G4-21, G4-27, G4-37, G4-48

Water*

Responsible consumption of beverages*

Packaging*

Strong brands*

Managing suppliers*

Innovative culture*

Work environment*

Consumer focus and products with social benefits*

Local development **

Energy and GHG emissions**

Generating value for the shareholder and profitability **

Managing biodiversity**

*priority material topics for management in 2014** priority material topics for 2015


GRI

Materiality matrix G4-27

* Priority material themes.

Exte

rnal

axi

s

Internal axis

Water*

Responsible beverage consumption*

Packaging*

Strong brands*

Supplier management*

Innovative culture*

Work environment*

Consumer focus and products offering social benefits*

Local development

Energy and GHG Emissions

Creating value for shareholders and profitability

Managing biodiversity


http://relatorio.brasilkirin.com.br/pt/pdf/relatorio-sustentabilidade-2013.pdf

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#bebidas

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#embalagens

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#marca

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#fornecedores

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#inovacao

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#trabalho

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#consumidor

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#consumidor

http://relatorio.brasilkirin.com.br/pt/perfil/construcao-materialidade.html#energia

GRI aspect G4-18, G4-19

Impacts inside and/or outside the organization* G4-20, G4-21

water

WaterIn – Local water availability; efficiency of operation; constant optimization of resources useOut – provision of water for area around operations; protection of springs and basins

Effluents and wasteIn – efficiency of operation; compliance with lawsOut – quality of effluent; correct disposal and/or usage of waste from operation

Conformity In/Out – the impacts of this aspect were not assessed in this reporting cycle

Responsible beverage consumption

Consumer health and safetyIn/Out – product innovation aimed at health benefits, allied with attributes of flavor and indulgence desired by consumers

Product and service labelingIn/Out – information on healthy lifestyles; encouraging good health (vitamins, reduced sugar, nutritive properties)

packaging

Products and servicesIn – recycling of packaging; reverse logisticsOut – environmental impact of packaging; post consumption; selective collection in regions where products consumed; compliance with national solid waste policy

strong brands

Product and service labeling In/Out – perception of brands by customers; choice of Brasil Kirin products

Marketing communicationsIn/Out – construction of inspiring, desired brands; aligned with advertising and marketing self-regulatory guidelines (like Conar)

Management of suppliers

Procurement practicesIn – procurement optimization process; aspects of conformance of suppliersOut – incentives for and foment of companies near our operations

Environmental screening In/Out – compliance with legislation; management of environmental impacts in production chain

Screening of labor practicesIn/Out – compliance with legislation and Brasil Kirin standards; management of labor impacts; encouraging best practices throughout the chain

Human rights screening In – compliance with Kirin Holdings practices of protecting human rightsOut – encouraging best practices throughout the chain

Screening for impacts on societyIn – opportunity to improve risk management of negative impacts and drive positive ones throughout the chain and societyOut – encouraging best practices throughout the chain

Child laborIn/Out – conformance with Kirin Holdings and Brasil Kirin practices regarding protection of children’s rights

Forced or slave-like labor In/Out – conformance with Kirin Holdings and Brasil Kirin practices of not accepting this kind of labor in its operations or its chain

Grievance mechanisms related to human rights

In – contribution to socio-environmental risk management; dialogue with stakeholders Out – transparency; pursuit of best practices, ethics and governance in the production chain

Freedom of association and collective bargaining

In – NoneOut – conformance with Kirin Holdings worker protection practices and with Brazilian labor legislation

CORRElatIOn BEtwEEn MatERIal tOpICs, GRI aspECts and tHEIR IMpaCts, InsIdE and OutsIdE BRasIl KIRIn


GRI


Innovative culture

Products and servicesIn – innovation in industrial operations; continuous improvement in services (industry, distribution and fulfillment)

work environment

Economic performance In/Out - wealth generated and distributed among stakeholders

EmploymentIn –retention of talents; adaptation of working conditions; employee turnover; adherence to company cultureOut– employability of the labor force

Diversity and equality of opportunityIn – attraction and retention of talentOut – external recognition; ethical and fair environment

Equal pay for men and women In/Out – best corporate employment practice; talent retention; gender equality

Non discrimination In/Out – talent retention; adherence to company culture

Grievance mechanisms related to labor practices

In/Out – promotion of ethical and fair environment

Training and education In/Out – talent retention; employability; response to business needs; exercising citizenship

Occupational health and safetyIn – productivity; promoting a safe work placeOut – dissemination of best practices throughout the chain

Labor relations In/Out – the impacts of this aspect were not assessed in this reporting cycle

Consumer focus and products with social benefits

Product and service labelingIn – constant updating to keep abreast of legislation; information about product benefits for consumersOut – access to information (for example, use of customer care service - SAC); mapping of allergenic ingredients

Consumer health and safetyIn – quality required in our operationsOut – offer consumers good quality, safe products

Customer privacy In/Out – the impacts of this aspect were not assessed in this reporting cycle

Healthy foods at affordable pricesIn – product innovation aimed at health benefits allied with flavor Out – access to healthy products; encouraging healthy life styles

local development

Market presenceIn – availability of local manpower; existence of incentives to implant operationsOut – job generation; impact on economies of municipalities in which there are operations

Indirect economic impactsIn/Out – availability of infrastructure (like highways and technology); educationOut – incentives for local development (such as education and access to healthcare)

Local communitiesIn/Out- availability and qualification of manpower; quality of life in cities in which we operate; socio-environmental actions in region; development of suppliers in areas around operations

Energy and GHG emissions

Energy In – efficiency of operation; local and nationwide energy availability Out – availability of renewable and non-renewable energy sources

EmissionsIn – efficiency of industrial operation and distribution; General Sustainability Index of the factoriesOut – management of impacts on climate change and/or air quality

Transportation In/Out – the impacts of this aspect were not assessed in this cycle

Generating value for the shareholder and profitability

Economic performanceIn – development of business in the country; return on shareholders’ investmentsOut – job generation; payment of taxes; impacts of financing

General In/Out - creation of shared value with environmental investments

Managing biodiversity

Biodiversity In/Out – availability of water and raw materials

Effluents and waste In/Out – protection of springs and water bodies

* In - inside Brasil Kirin Out – outside Brasil Kirin

Governança da sustentabilidade

GRI


Innovation and joyDriven by the desire to innovate and offer the consumer products with the latest technologies to mark moments of togetherness and joy, Brasil Kirin has a vast portfolio of alcoholic and non-alcoholic beverages.

The consolidation of the Brasil Kirin brand, crowned by an institutional publicity campaign in 2014, strengthened company products even further. With the slogan “Brasil Kirin, você já conhece e não sabia!” (Brasil Kirin, you know it and you didn’t realize it!), the campaign makes a direct association between certain product brands and the institutional brand, launched two years ago. G4-9, G4-17

Our products and our brands


Brasil Kirin Products

GRI

the best beersLeader in the special beers market in the country, Brasil Kirin underpins this positioning with the Eisenbahn Master Brewer contest. The fourth edition of the event, with more than one thousand contestants (60% more than the 620 participants in 2013), took place in October 2014. Five artisan brewers disputed the title of best Belgian Blond Ale, to be produced in the Eisenbahn plant in Blumenau (Santa Catarina) and launched in March 2015. The winner was Anderson Faller, after his ale won over the jury made up of master brewers, beer sommeliers, as well as connoisseur journalists and bloggers.

alcoholic: Schin, Nova Schin, Devassa, Baden Baden, Eisenbahn, Cintra, Glacial, Schin no Grau and Kirin Ichiban (Japanese beer launched in Brazil in 2014).

non-alcoholic: Water Schin, Schin soft drinks, Itubaína, Fruthos (fruit nectars), Skinka (mixed fruit drink), Fibz (sugar-free soft drink with fiber) and ECCO! (the only low calorie energy beverage in the market with fruit juice). G4-4, G4-9


In April 2014, the American style IPA (Indian Pale Ale) beer which won the 2013 Master Brewer contest was launched in a special limited edition, in recognition of the talent of the home brew artists Fabert Araujo and André Canuto. Eisenbahn Frosty Bison was distributed in the South, Southeast and Midwest regions.

Also in 2014, the Baden Baden and Eisenbahn special beer brands received prizes in the World Beer Awards (an annual competition held in England that elects the best beers in the world), in the 2014 International Beer Challenge (which has recognized the best global beer brands for 18 years), as well as in the 22NDAustralian International Beer Awards. Eisenbahn also won awards in Germany’s European Beer Star, one of the most important competitions worldwide. These prizes made Brasil Kirin the brewer with the most awards in Latin America.

To further strengthen Brasil Kirin’s positioning in the premium beer segment, there is the Cervejaria Devassa franchise system. At the end of 2014, this consisted of 27 units in 11 states, including the Distrito Federal. These cover the Southern region (Paraná and Santa Catarina), the Southeast (São Paulo, Minas Gerais and Rio de Janeiro), the Northeast (Bahia, Pernambuco, Paraíba and Ceará) and the Midwest (Goiás and Distrito Federal).

The newly launched Kirin Ichiban – in which only the first pressing of the beer must is used -, won over the Brazilian market. Initially focused on the growing number of Japanese restaurants in the country, the striking and refreshing flavor of this beer rapidly became popular among connoisseurs of the beverage. As a result, the company decided to boost its visibility at the point of sale. The next step will be to expand production volume and distribution.

The Baden Baden brand portfolio grew with the launch of Baden Baden Witbier, distributed in the South, Southeast and Midwest of the country. Its production is inspired by the traditional Belgian witbier, a light, rather citric beer, frequently “seasoned” with coriander or orange peel. Another launch was Baden Baden 15 anos, a Heller Bock style beer, which is a lighter, more full-bodied version of a traditional bock, with a pronounced malt aroma and a color that varies from deep gold to amber.



Investments in the portfolioDuring the course of 2014, Brasil Kirin invested in strengthening its institutional brand and in generating value for the products in its portfolio, which saw the addition of four new special beers (two from Baden Baden and two from Eisenbahn), as well as the Japanese beer Kirin Ichiban. In the non-alcoholic market , the highlights were the extension of the markets for Fibz and Itubaína, as well as the reduction in sugar content for the Schin soft drink line (read more about the Schin Sugar in the Right Measure program ahead).

Innovation with flavorThe non-alcoholic product line, accounting for around 40% of Brasil Kirin’s sales, saw important innovations during 2014, in particular with respect to ingredients. To reduce the sugar content in Schin soft drinks, the company created the Schin Sugar in the Right Measure program. The advertising campaign focuses on family care, showing how a beverage with less sugar in its composition can be very flavorsome. The program - which has removed 13 thousand metric tons of sugar from company products in the last three years – also encourages consumers to exercise and adopt healthier habits, with tips on the website www.schinrefrigerantes.com.br. G4-FP6, G4-FP7

BiotechnologyWith the objective of developing new products and beer manufacturing processes using state-of-the-art biotechnology, Brasil Kirin established a partnership with LNBio (National Biosciences Laboratory in the Portuguese acronym), which is part of CNPEM national

One of the main ingredients of beer, together with malt, water and yeast, hops are responsible for the beverage’s bitterness. Imported from the United States and some countries in Europe, one of the main obstacles to producing them in Brazil is the climate– since hops require a specific temperature and the right amount of light and humidity to guarantee a flavor suitable for beer production.

In partnership with a small producer in the Campos do Jordão region in São Paulo, Brasil Kirin has initiated the development of a Brazilian hop which will be suitable for local conditions and will have regional characteristics (there are diverse varieties of hops, each having well defined characteristics and varying in strength and aroma in accordance with the climatic conditions in the region in which they are grown). There is a long way to go before these hops may be produced on a commercial scale, but the objective is to create a specific Brazilian identity to innovate in the special beers market and to drive local development, generating shared value for the business and for society. And this has already been made possible with the launch of Baden Baden 15 Anos, the first Brasil Kirin beer to use these hops in its formulation.

Brazilian hops

GRI


energy and materials research center in Campinas (São Paulo). One of the projects already underway is intended to optimize the phases of the beer production process. In the partnership, the laboratory provides the research infrastructure, while Brasil Kirin is responsible for the investments.

The first advertising campaign for Fibz, the sugar-free soft drink with fiber launched in 2013, was aired in São Paulo in June 2014. In addition to the production of two films, the campaign was active on the brand’s fan page, with tips and other actions, as well as merchandising on network TV.

In September, Itubaína was launched in Bahia. Available in the 2l bottle 350 ml can versions, the soft drink was distributed to thousands of points of sale. In October, Itubaína reached Rio Grande do Sul in 2 liter PET bottles and 350ml cans, under the Itubaína Retrô brand.

fibz in são paulo; Itubaína in Bahia and in Rio Grande do sul


To get closer to the Brasil Kirin consumer, the company reinforced its program of guided visits to the factory. In the excursion, visitors have the opportunity to observe the product manufacturing processes, with the right to a tasting session at the end. In 2014, more than 50,000 people made the tour, available at the Itu, Campos do Jordão, Alagoinhas and Cachoeiras do Macacu units.

Since the end of 2014, there has been a tour for children (only at the Itu unit) and another for adolescents, with special itineraries. These are aimed at showing the company’s production processes and the product life cycles, as well as addressing quality, safety, the environment and consumer health.

Brasil Kirin tour


product responsibilityDriving awareness about the responsible consumption of alcoholic beverages is part of Brasil Kirin’s work. In the first half of 2014 we maintained our partnership with the “Pact for Life”, an initiative by the Ministry of Cities to transform traffic into a safe space for everyone. Due to the elections, the campaign was not aired in the events sponsored by the company’s alcohol brands during the second half of the year.

In partnership with the sector association CervBrasil, the company launched the Responsible City project in São Bernardo do Campo (São Paulo). This is aimed at stopping alcohol consumption among minors and discouraging drinking and driving. The pilot for this project was run in the city of Fernandópolis in the state of São Paulo, and it is gradually being extended to other municipalities. The focus is on generating discussion about this issue not only at schools but also in children’s homes. The project includes preventive actions at schools, at points of sale where drinks are commercialized, as well as at other locations around the city.

Empório Brasil KirinCreated in 2012, the Empório Brasil Kirin was originally planned to be a store at which employees could buy company products. With the growth in external demand, the company decided to expand the service and, since January 2014, the store has been open to consumers in Itu and the surrounding region.

The store commercializes everything in the company’s portfolio, including products that are distributed in other states, as well as exclusive brand artifacts, such as glasses, openers, aprons and caps.

The new store was built using containers, a choice which incorporates sustainability criteria, since the modular design permits flexibility, with lower solid waste generation during the construction phase.

The Virtual Empório has been implanted in some of the other manufacturing units, such as Cachoeiras de Macacu (Rio de Janeiro) and Horizonte (Ceará). This is a virtual store through which only company employees may acquire Brasil Kirin products.



Other awareness projects include the No Excess website, in partnership with the national industry association Abrabe (Associação Brasileira de Bebidas), and support for the São Paulo State Military Police Conscious Traffic campaign, in conjunction with CervBrasil.

Brasil Kirin also promotes conscious consumption inside the company with its responsible alcohol consumption policy for employees. The policy is supported by training, talks and constant discussions. There is also an e-learning course on responsible alcohol consumption which is one of the training pillars of the Sustainability School. The target is for all employees at coordinator level and above to take this course, which has been available for employees on the Brasil Kirin Academy website since 2013. Since it was introduced more than 2,800 employees have taken course – 82% of them in 2014.

Employees involved in beer tasting processes are monitored more closely on a periodic basis and undergo specific annual examinations.

Third-party drivers are invited to participate in the ETRAF excellence in transportation program, which promotes health and safety in traffic.

Respect for the consumerSince 2013, Brasil Kirin has been a signatory to the World Health Organization’s (WHO) global strategy to reduce the harmful use of alcohol. Under this commitment, participating beer, wine and distilled beverage producers commit to acting on five fronts: G4-15

• reducing consumption of alcoholic beverages by minors•strengthening and expanding marketing best practice codes •providing consumers with information and introducing responsible product

innovations • reducing drinking and driving under the effect of alcohol •seeking support from the retail trade in reducing the harmful consumption of

alcohol

In Brazil, all marketing communications, advertising, promotions and sponsorships are subject to local rules, with which the company is fully compliant. Brasil Kirin does not supply any products prohibited on the Brazilian market. Any questions or debates involving the company’s product portfolio are addressed at sector level. G4-PR6


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Consumer focusThe main thrust in Brasil Kirin’s strategic planning is consumer focus. Accordingly, the company has defined three essential pillars: brands, distribution and people.

Created in 2012 and known as the 2015 Vision, this strategic planning reinforces key questions such as understanding the market, building solid brands, strengthening commercial and distribution actions, enhancing operational efficiency, pursuing synergy within the group, expanding the sustainability program and boosting employee growth.

This planning will be reviewed in 2015, focused on growing Brasil Kirin and on gaining market. G4-1

The Kirin group’s strategic planning is structured in long-term cycles of nine years, with a review at three-year intervals. The achievement of the planned results directly influences employees’ variable remuneration, because everyone is responsible for achieving these targets, which include sustainability-related aspects such as environmental and social questions.

strategy

StrategyGovernance Risk management Ethics

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Governance The Brasil Kirin governance model is aligned with Kirin Holdings Company guidelines and is structured as follows: G4-34, G4-35, G4-36

Board of Directors: this consists of seven members, including the CEO, three expatriates from Kirin Holdings Company with no executive function and two independent directors. It meets every two months in accordance with a predefined schedule. The Board’s attributions include establishing the company’s governance targets, disseminating and adapting Kirin Holdings’ global strategies and ensuring that actions and the businesses are aligned with the Mission, Vision and Values, as well as with internal policies. The members are also part of three advisory committees: Audit and Finance, Strategy and Personnel and Remuneration. External board members are recruited with support from an external consultancy. This is aligned with the criteria set forth in the Governance Charter - a document laying down guidelines to orient the Board’s performance. The company does not disclose the board members’ remuneration, information which is considered to be strategic and confidential. G4-38, G4-39, G4-40, G4-42, G4-45, G4-46

Audit and Finance Committee: this committee is charged with identifying, overseeing and managing risks. It is linked directly with the Board of Directors and is supported by the internal audit, internal controls and fraud prevention areas, as well as the ERM (Enterprise Risk Management) tool. It meets five to six times a year.

Personnel and Remuneration Committee: this body provides the Board of Directors with independent objective analyses, consulting and assistance with questions related to employees and remuneration. It includes the Conduct Committee, which assesses the need for sanctions and punishment for people who breach the code of conduct, as well as norms and procedures. It meets five times a year.

Strategy Committee: responsible for establishing strategic directives and deciding on projects to make the Kirin group stronger through its activities in the region. It meets five to six times a year.

Executive Board: this consists of the vice presidents reporting directly to the CEO and meets on a monthly basis. It establishes organizational directives and oversees the organization’s economic, social and environmental performance. G4-45, G4-47

Risk managementResponsible for managing the most relevant risks for the company and its stakeholders, the area builds risk maps which feed preventive and corrective action plans. The process also serves as a basis for internal audit projects.

Compliance Belonging to the Corporate Affairs and Sustainability structure since 2014, the Compliance area is responsible for managing ethics, providing guidance, disseminating and promoting the principles and conduct set forth in the Brasil Kirin Code of Conduct, as well as proposing updates through the incorporation of new concepts and practices. Compliance works with the other areas to ensure alignment with legislation and internal policies, regulations and principles. Its work is based on three pillars - Prevent, Act and Assure - and is backed up by some 85 multipliers known as Champions, or Guardians of Conduct.

The Guardians of Conduct are employees who are recognized as role models in ethical conduct by their colleagues. In addition to their regular functions they act as compliance volunteers. This involves modeling exemplary behavior to the team in meetings and in other situations. These multipliers take online courses to


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enhance their capacity to communicate and to handle information.

In the first half of 2014, the Compliance team undertook a survey with the entire employee body to measure adherence to compliance in the organization. More than 7 thousand employees participated in the survey. During the second half of the year, the area visited diverse company units to better understand the specific challenges in each location, holding meetings to provide leaders with information and to promote their alignment. Via the email [email protected], employees may seek advice on ethical behavior, clarify any doubts about conduct or questions related to organizational integrity. G4-57, G4-SO4

In 2014, with the entry into force of law 12.846/2013 on the administrative and civil responsibility of legal entities for acts of corruption against Brazilian or overseas public authorities, Brasil Kirin undertook a mapping exercise of all company areas, creating a corruption prevention program in line with the guidelines set forth by the Kirin Group, which is itself subject to the laws of the United States (FCPA – Foreign Corrupt Practices Act) and the United Kingdom (UKBA - United Kingdom Bribery Act). G4-56, G4-57

The main leaders in every area of the company received training in law 12.846/13. After the training, 136 individual interviews were conducted with leaders or persons indicated by leaders to assess the risks in the activities of company areas which maintain relations with public authorities.

In 2015, Brasil Kirin will reinforce controls aimed at preventing corruption throughout the company. G4-SO3


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Ethics Since 2012 Brasil Kirin has had its Conduct and Ethics channel – Speak to Brasil Kirin. This is managed by an independent auditor and may be accessed both by employees and outsiders via telephone, email and website. The channel is open to receive any reports about conduct which could harm the organization’s image or reputation. All the information received (except when it involves the area itself ) is analyzed by the Compliance team and forwarded to the areas responsible. On a monthly basis the team prepares a report on the cases received. These reports are used to prepare preventive action plans with the vice presidents of each area. The results are reported to the head office in Japan on a semi-annual basis. G4-37, G4-49, G4-57, G4-58

There were four cases of internal corruption during the reporting period. Two are currently under investigation and two were resolved. The latter two involved the same employee, who was terminated, and a supplier, who was disqualified. G4-37, G4-49, G4-50, G4-57, G4-58

The channel may be contacted via the telephone 0800 707 98 76, the email [email protected] or via the website www.deloitte.com.br/falecomabrasilkirin. G4-50, SO3, SO5

Compliance with legislation Brasil Kirin is compliant with all Brazilian legal standards and is also committed to Brazil’s Responsible Advertising Pledge, a public commitment on food and drink advertising for children, signed in conjunction with diverse companies in the foods and beverages sector in 2009. G4-15

GRIStrategyGovernance Risk management Ethics


Opportunities and growthRespect, transparency and commitment to people. Be it employees, consumers or suppliers, Brasil Kirin places great value on all its stakeholder groups, addressing each with clarity and care.

people Brasil Kirin seeks professionals aligned with its values and offers them a career path rich in opportunities for learning and growth. The company nurtures a healthy and informal environment favorable for both professional and personal growth at all of its units.

At the end of 2014, Brasil Kirin had 11,662 employees distributed throughout its industrial, commercial and administrative units. With the opening of new distribution operations in Brazil, the headcount increased.

Even with market retractions in all segments, admissions exceeded terminations by 4.89% at Brasil Kirin, with the overall headcount remaining stable. G4-10, G4-LA1

stakeholders

StakeholdersGRI


Employees by functional level G4-LA12

2012 2013 2014

Men women Men women Men women

Board - - - - 1 -

Executive board 34 1 37 4 31 3

Management 211 26 214 34 209 34

Heads/coordination 551 99 547 113 518 125

Technical/supervisory 437 115 466 112 435 70

Administrative 940 710 951 740 839 641

Operational 7,054 447 7,508 468 7,886 498

Trainees* 0 0 6 15 0 0

Apprentices 177 127 158 130 187 185

total by gender 9,404 1,525 9,887 1,616 10,106 1,556

total 10,929 11,503 11,662* Base used is December 2014. Of the 21 trainees participating in the 2013 program, 20 were hired in August 2014 in Corporate areas, Business Units, Factories and Distribution Centers.

Employees by type of contract G4-10

2012 2013 2014


Fixed term 328 137 217 137 254 206

Permanent 9,076 1,388 9,670 1,479 9,852 1,350

total by gender 9,404 1,525 9,887 1,616 10,106 1,556

total 10,929 11,503 11,662

Employees by type of employment G4-10

2012 2013 2014


Full-time 9,174 1,410 9,721 1,512 9,945 1,410

Part-time 208 137 166 104 161 146

total by gender 9,382 1,547 9,887 1,616 10,106 1,556

total 10,929 11,503 11,662

Employees by region G4-10

2012 2013 2014


South 1,094 159 1,175 163 1,207 150

Southeast 4,389 878 3,843 913 3,794 787

Midwest 606 67 616 63 583 63

Northeast 3,269 403 3,871 409 3,900 468

North 46 18 382 68 622 88

total by gender 9,404 1,525 9,887 1,616 10,106 1,556

total 10,929 11,503 11,662* Third-party contract workers are not included in the tables above and the ones following.

Stakeholders GRI


number of terminations by gender G4-LA1

2013 2014

Male 2,130 2,929

Female 272 542

number of admissions by gender G4-LA1

2013 2014

Male 2,618 3,156

Female 354 485

turnover rate by gender (%) G4-LA1

2013 2014

Male 24.01 30.11

Female 19.37 33.00

number of terminations by age group G4-LA1

2013 2014

Under 30 years 943 1,512

From 31 to 50 years 1,396 1,841

Over 50 years 63 118

number of admissions by age group G4-LA1

2013 2014

Under 30 years 1,517 1,881

From 31 to 50 years 1,423 1,704

Over 50 years 32 56

turnover rate by age group (%) G4-LA1

2013 2014

Under 30 years 10.69 14.55

From 31 to 50 years 12.25 15.20

Over 50 years 0.41 0.75

number of terminations by region G4-LA1

2013 2014

South 486 511

Southeast 959 1,670

Midwest 125 169

Northeast 765 1,017

North 67 104

number of admissions by region G4-LA1

2013 2014

South 558 522

Southeast 1,379 1,537

Midwest 155 117

Northeast 790 1,087

North 90 378

turnover rate by region (%) G4-LA1

2013 2014

South 4.54 4.43

Southeast 10.16 13.75

Midwest 1.22 1.23

Northeast 6.76 9.02

North 0.68 2.07

new admissions rate by gender (%) G4-LA1

2013 2014

Male 88.09 86.68

Female 11.91 14.89

new admissions rate by age group (%) G4-LA1

2013 2014

Under 30 years 51.04 51.66

From 31 to 50 years 47.88 46.80

Over 50 years 1.08 1.54

new admissions rate by region (%) G4-LA1

2013 2014

South 18.78 14.34

Southeast 46.40 42.21

Midwest 5.22 3.21

Northeast 26.58 29.85

North 3.03 10.38

Stakeholders GRI


BREaKdOwn Of GROups REspOnsIBlE fOR GOVERnanCE and dIsCRIMInatIOn Of EMplOYEEs BY funCtIOnal CatEGORY* G4-LA12

Gender (%) 2013 2014

Men women total Men women total

Board 100 0 0 100 0 100


Management 86 14 100 86 14 100



Administrative 57 43 100 57 43 100

Operational 94 6 100 94 6 100

Apprentices 55 45 100 50 50 100

Trainees 29 71 100 0 0 0* Base used in December 2014. Of the 21 trainees participating in the 2013 program, 20 were hired in August 2014 in Corporate areas, Business Units, Factories and Distribution Centers.

disabled (%)2013 2014

Men women total Men women total

Board 0 0 0 0 0 0


Management 1 0 0 0 0 0



Administrative 2 3 3 4 3 4

Operational 4 19 12 5 17 11

Apprentices 9 7 8 10 11 10

Trainees 0 0 0 0 0 0

Stakeholders GRI


developmentBrasil Kirin invests in training and qualification for the entire employee body. The learning content is available in the Brasil Kirin Academy and is divided into three stages:

• Institutional Integration: provides new employees with an understanding of the company

•Functional Integration: provides a basic grounding enabling employees to exercise their function

•Learning Trail: educational actions that guide competency development in the diverse company areas.

In a year which saw the consolidation of its eight schools - Commercial, Leadership, Supply Chain, Management, Sustainability, Culture, Marketing and Services –, the Brasil Kirin Academy is preparing for the transformation into a corporate university in the coming years. The company also has internal and external training programs and courses, as well as partnerships with universities, institutions and language schools.

The courses are open to all employees in accordance with internal policy and performance appraisal tools.

age group (%)

2013 2014

under 30 years

from 30 to 50

years

Over 50

years

under 30 years

from 30 to 50

years

Over 50

years

Board

Men 0 50 50 0 29% 71%

Women 0 0 0 0 0 0

Executive board

Men 0 68 32 0 68 32

Women 0 100 0 0 100 0

Management

Men 2 89 9 0 89 11

Women 3 97 0 3 94 3

Heads /coordination

Men 10 83 7 11 85 5

Women 19 72 9 16 78 6

technical/supervisory

Men 18 77 5 13 82 5

Women 20 77 3 17 81 1

administrative

Men 35 62 3 30 59 11

Women 45 55 0 36 63 1

Operational

Men 34 60 6 31 63 6

Women 45 50 5 44 51 5

apprentices

Men 99 1 0 99 1 0

Women 99 1 0 100 0 0

trainees

Men 100 0 0 0 0 0

Women 100 0 0 0 0 0

Stakeholders GRI


In 2014, the Brasil Kirin Academy developed a partnership with a postgraduate program, and in 2015 will have its first group of employees on a special non-degree Strategic Business Management program organized on an in-company basis.

Incentives for employee employability extend to outplacement services for ex-employees at management level and above at all business units. The Outplacement program benefited 28 people in 2014, involving an investment of R$ 675,000. G4-LA10

Hours of training and qualification

In 2014, company training totaled over 648 thousand hours – an average of 55.6 hours per employee. G4-LA9

aVERaGE nuMBER Of HOuRs tRaInInG pER YEaR [G4-LA9]

functional Category / Gender

2013 2014

Employees Hours Hours per employee Employees Hours Hours per

employeeBoard 41 6,358 155.1 34 700.7 20.6Men 37 6,145 166.1 31 607.1 19.6

Women 4 214 53.4 3 93.6 31.2

Management 249 17,803 71.5 243 10,612 43.7Men 215 15,537 72.3 209 9,239.5 44.2

Women 34 2,266 66.7 34 1,372.1 40.4

Heads/Coordination 656 60,160 91.7 643 40,957 63.7Men 537 49,983 93.1 518 34,595 66.8

Women 119 1,0176 85.5 125 6,361.9 50.9

technical /supervisory 561 49,499 88.2 505 19,536 38.7Men 460 41,451 90.1 435 17,434 40.1

Women 101 8,048 79.7 70 2,102.4 30.0

administrative 1,740 105,990 60.9 1,480 69,279 46.8Men 980 58,359 59.6 839 36,436 43.4

Women 760 47,631 62.7 641 32,843 51.2

Operational 7,968 584,133 73.3 8,384 490,672 58.5Men 7,500 550,246 73.4 7,886 458,990 58.2

Women 468 33,886 72.4 498 31,682 64

apprentices 288 13,614 47.3 372 16,426 44.2Men 158 6,667 42.2 187 8,991.7 48.1

Women 130 6,947 53.4 185 7,434.4 40.2

tOtal 11,503 837,557 72.8 11,662 648,202 55.6Men 9,887 728,389 73.7 10,106 566,311 56.04

Women 1,616 109,168 67.6 1,556 81,891 52.6

Stakeholders GRI

leadership, performance and potential G4-LA 10Brasil Kirin not only works on developing its professionals but also looks for talents within its team to draft the company’s succession map. With the Loyalty program, the company seeks to identify and develop key people to assume strategic positions, focused on retaining competencies. The process analyzes individual performance and potential to assume a higher position in the hierarchy.

For those already in leadership positions, the company offers training courses focused on developing essential competencies for the job:


•Assertive people development: shows the importance of the role of the leader and presents tools for developing both leaders and teams

•Behavior-based safety: creates a discipline that helps identify a set of behaviors that will help reduce accidents and drive awareness that safety is everyone’s responsibility

•Coaching: this explores the basic coaching tools and their usefulness. In 2014, the Brasil Kirin Academy leadership school provided more than 37 thousand hours of training.

performanceAll employees also participate in the Brasil Kirin Performance Cycle, an exercise that stimulates self-development, clarifies the company’s expectations and brings the professional closer to his/her manager. It involves four stages, which should be covered by the employee and his/her immediate superior (Contract, Monitor, Analyze and Feedback). This leads to the Individual Development Plan, which is elaborated annually based on the company’s strategic objectives.

The appraisal cycle is annual and is applied to employees who have been in the company for at least three months. Up to coordination level, employees undergo 90º feedback, while management level employees and above are subject to 360º feedback. This appraisal impacts the remuneration of employees at management level and above (see the table below). G4-LA 11

percentage of employees receiving performance appraisal and career development analysis (%)* G4-LA11

2012 2013 2014


total 10,929 11,503 11,662

Employees submitted to performance appraisal and career development analysis

9,131 1,552 9,887 1,616 10,106 1,556

Mission, Responsibilities and Indicators (MRI) – % by gender

76% 66% 84% 64% 97.8% 99.4%

90º Feedback – % by gender - Essential Competencies

82% 75% 80% 80% 71% 70%

90º Feedback – % by gender - Area Competencies *

n/a n/a 79% 80% 71% 70%

360º Feedback – % by gender 89% 85% 0% 0% 100% 100%

% total 83% 75% 61% 56% 85% 85%* The percentage of employees who participated in the 90º Feedback appraisals decreased compared with 2013, because in the previous years employees who were on leave, not eligible or who had been discharged were counted.

Stakeholders GRI


Brasil Kirin invests constantly in tools for managing its employees. In 2014, the company introduced Integrated People Management, a system that unifies all the platforms in the organizational and human development area, such as the appraisal modules (90°and 360° Feedback), MRI (Mission, Responsibilities and Indicators), attraction, selection and opportunities, as well as Remuneration, Brasil Kirin Academy (Education and Training), Succession, Individual Development Plan and Career. The system is available for all employees, who had specific training in how to use it in the course of the year. It permits the generation of reliable integrated reports, enabling leaders to take informed decisions more rapidly.

In 2014, the company was listed in the two major organizational climate surveys in the country: the 2014 130 Best Companies to Work for – GPTW Brasil, published by Época magazine, and the Guia Você S/A – 150 Best Companies for You to Work for published by the magazines Exame and Você S/A. In addition to placing value on the company and its people, these surveys support the development of measures to increase employee satisfaction.

Interpersonal communication is a fundamental element in the organizational development process. Among all the tools in the company, dialogue between employees and leaders is the shortest path to ensuring processes and procedures are clear. In 2014, improving face to face communication was one of the main focuses for the Human and Organizational Development area, work which should be intensified in 2015.

development first

proud to be Brasil Kirin

face to face communication


Remuneration and benefitsBrasil Kirin uses Hay Group methodology for employee remuneration. The company makes no distinction between salaries for men and for women, regardless of their functions. The difference between men’s average remuneration and women’s in all Brasil Kirin functional categories is around 1%. G4-52, G4-LA13

All employees are included in the profit share program (PPR), which takes into account the group’s results (Ebitda) and the results of the location (local strategic map). The combination of these two indicators can lead to a bonus of up to 200% of the employee’s monthly salary. The sales area has a commission-based system.

All employees receive the benefits mandated by law. Other benefits offered are*:

•medical and dental assistance extensive to dependents• transportation vouchers are provided in accordance with the law at the company

owned distribution centers; at the plants, the company provides buses for the employees

•all employees receive a monthly basic hamper•at the plants in which infrastructure permits, employees have an internal

restaurant; employees at the distribution centers, other units and those engaged in external activities receive electronic meal vouchers

•dental assistance is provided by law at the plants and is optional at the distribution outlets

•all employees receive a minicase of Brasil Kirin products every month•coverage for incapacity/invalidity: workplace accidents are dealt with according

to the law; some conventions establish stability for a determined period after return to work. G4-LA2

*This information covers all the factory units and the company owned distribution centers.

The benefits offered to all Brasil Kirin employees (factory units and company-owned distribution centers) are meal vouchers, transportation vouchers (in the case of company buses to and from another municipality, the employee pays part of the cost), life insurance, health and dental plan, maternity and paternity leave, among others.

The pension plan is aligned with the defined contribution standard, with voluntary participation in the basic plan and a matching payment to the company’s contribution in the management plan (both permit additional payments and voluntary contributions). The plan is valid for the employees at all units, but in the distribution centers it is only available for management level and above. Specific information about amounts in the pension plan is considered strategic for the business and for this reason will not be reported. G4-LA2, G4-EC3

In 2014, 66 women took maternity leave, with 63 returning to work at the end of the leave. After 12 months, 51 women were still employed – a retention rate of 77.3%. The terminations occurred either at the request of the employee, at the end of the work contract or through dismissal without just cause (due to performance).

With respect to paternity leave, Brasil Kirin is compliant with the country’s legislation, which provides fathers with five days leave upon the birth of a child. However, the company believes that this leave does not impact the retention rate. G4-LA3

Health and safetyResponsible for the prevention of accidents, occupational illnesses and environmental impacts, the Safety, Health and Environment (SHE) area implants and manages procedures to ensure the well being of the entire employee body. In 2014, the Health area was subordinated to SHE in the Corporate Affairs and Sustainability structure (it had previously been under Organizational and Human Development).

Stakeholders GRI


On an annual basis, the Safety, Health and Environment area organizes campaigns focused on the prevention of chronic diseases, as well as vaccination campaigns.

All employees are represented on health and safety committees. These include the Internal Accident Prevention Commission (CIPA in the Portuguese acronym), which involves 416 employees, and the Emergency Brigade, with 964 employees spread throughout the factories and distribution centers. Additionally, there are the Safety, Health and Environment pillars and Ergonomics Committees at the units in which TPM is in place. A total of 13% of the Brasil Kirin labor force is active in the occupational health and safety area. G4-LA5

All chemical, physical, biological and ergonomic risks are mapped in the Environmental Risk Prevention program, enabling the company to effectively ensure primary prevention.

The Environmental Risk Prevention program indicates that certain employees are involved in work activities that put them at risk of specific illnesses. To ensure these occupational risks are monitored and controlled properly, the company runs its Occupational Health Medical Control Program (PCMSO in the Portuguese acronym) on an annual basis. G4-LA7

Brasil Kirin has the following education and training programs for employees exposed to risk in the work place:

• Induction into Safety, Health and Environment for all employees and third-parties • Internal Accident Prevention Week (SIPAT in Portuguese acronym)•OPL - One Point Lessons subjects related to improvements in the work place and

risk prevention.

The following programs are aimed at controlling and preventing risks:

•BBS - Behavior-Based Safety, applied by the leaders, managers and members of the accident prevention commissions

•Recording Near Accidents, an easily accessed tool for all employees • In the factories there is the application of an improvements register, in which the

employees may propose improvements to the workplace. These may also be replicated in the other units.

•Development of study groups to reduce risks, with the involvement of employees from various areas to promote debate and evaluation from different viewpoints.

The company conducted an assessment of the risk of chronic illnesses among the entire team and implanted a specific module in its SAP system to optimize health and safety monitoring and management.

The number of accidents involving employees was reduced by approximately 7% compared with 2013. This drop was due to the employees’ level of maturity in relation to Safety, Health and the Environment.

The absenteeism rate reported for 2014 takes into account days lost due to work-related accidents - in previous years, as the 2013 figures show, days not worked for diverse reasons besides work accidents were considered.

Union agreements cover diverse health and safety questions, such as having an ambulance on call at the factories. However, Brasil Kirin policy and the legislation in force are fully aligned with other items in the agreements, such as the use of Personal Protective Equipment (PPE) and the creation of health and safety committees. 100% of employees are required to use PPE. G4-LA8

Stakeholders GRI


local hiring G4-EC6Brasil Kirin seeks to contract employees locally – that is persons resident within a radius of 80 km of the units. For strategic positions, leaders are sought on a nationwide level.

In 2014 there were fewer openings at senior management level. There were a number of internal employee transfers at other levels, explaining the variation in percentage compared with 2013.

Health and safety information G4.LA6

2013 2014Employees Employees

total totalNumber of accidents**** 420 391

Injury rate ** 16.22 14.64

Occupational illness rate 0.01% 0.00%

Days lost rate *** 9,764 12,202

Absenteeism rate 15.22% 0.33%*

Total fatalities in the period 0 0* Absenteeism rate: Calculation used (nº of employees x nº of working days x 12 months)/ nº of days lost per work accident)). The 2013 absenteeism rate was not recalculated because there was no information available with the same criteria adopted in 2014.** Injury rate - Calculation used (frequency rate): n° of accidents x 1,000,000/man hours worked + overtime.*** Days lost rate: To calculate the days lost, the total consecutive days lost due to accidents is counted, days lost being counted from the first day after the date of the accident. **** The system of rules applied in recording and reporting accident statistics follows ILO recommendations.All the company’s factories and own distribution centers were considered.Data discriminated by gender are not available for this indicator. There were 48 accidents involving third-parties during 2014; other information is not available.

local hiring 2012 2013 2014

Percentage of senior managers from local communities *

58% 49.5% 22%

Percentage of employees from local communities

88% 90% 96%

* considering professionals at levels manager 1, director, vice president and president in the company hierarchy.

Internal communication Communication between Brasil Kirin and its employees is characterized by clarity and transparency. The company has diverse internal communication channels and constantly develops endomarketing measures. The main media include physical notice boards installed in strategic areas, the bimonthly magazine Novas, email communications, the Conexão intranet and the President’s Blog. In December 2014, a pilot program of Corporate TV was initiated at the Itu unit (factory and corporate). This communication channel should be extended to the other units in 2015.

Some numbers related to communication channels:

•more than 600 pieces of news published in Conexão;•19 posts on the President’s Blog;•14 messages published in the Leader’s Space (channel created in August 2013);•33 videos shown in the Multimedia Center;•Almost 600 posts on the notice boards;•Over 4oo emails sent out (email marketing and general communications);•Over 80 endomarketing actions (involving product brands, events and

institutional projects).

Human rights Brasil Kirin addresses human rights-related questions in its code of conduct, and this information is communicated internally and externally to stakeholders. In 2014, the company launched its Supplier Code of Conduct, which sets forth the principles of a culture based on respect for human rights in the company’s value chain. As of yet, there is no formal process for assessing human rights questions or impacts. G4-HR9

Stakeholders

GRI


When the Jaboatão Distribution Center was opened, there was a stoppage by drivers and assistants due to complaints about the temporary changing room facilities. When the category union came to the company to verify the facts, it discovered the existence of a series of employee claims related to salary increases and other financial questions. To resolve the case an employee commission was established. In conjunction with the union, this commission negotiated the conditions requested. The percentage of working time lost due to the one-day stoppage was 4.36% of the monthly workload. G4-FP3, G4-HR4

Open path to negotiation

All the 276 grievances related to human rights impacts were resolved. Compared with 2013, there was a 72% reduction in cases of harassment, driven principally by the visibility enabled by the “Speak to Brasil Kirin” service, the actions of local leaders, as well as the e-learning training module on harassment, which was taken by more than 90% of company leaders. In 2015, the preventive measures will be maintained in order to prevent recurrences and new incidents. G4-HR12

discriminationDuring this reporting cycle there were five cases related to discrimination. The cases were resolved after the following actions were taken: G4-HR3

• reorientation on Brasil Kirin values;• training in moral harassment and guidance on the attitudes expected by the company• refresher program with managers addressing moral harassment and the importance

of diversity

Stakeholders GRI

ConsumersThe consumer is one of Brasil Kirin’s main reasons for being. Focused on consumer satisfaction and developing innovative products, the company is constantly engaged in identifying and satisfying the different needs of people across the country.

Through the Consumer Care Service (SAC in the Portuguese acronym), the company receives contacts from consumers via email and the 0800 toll-free telephone line, available in every state of Brazil. In 2014, the service recorded 33,901 calls, 15% less than the previous year. Of these, 85% were resolved on the first contact, one percentage point more than in 2013, when 84% of the cases were resolved. Brasil Kirin constantly seeks to drive improvements in its procedures to ensure consumer satisfaction with rapid and effective responses.

When the company receives complaints about product quality or non-conformance, the Consumer Care Services arranges for the product to be exchanged. This is carried out by a logistics operator who picks it up from the consumer’s home, leaving a new one in its place. In 2014, 2,281 products were exchanged, a decrease of 20% compared with 2013.

The company’s main brands are present in the social networks. These media are monitored constantly to provide an immediate response to any comment, when necessary. The company also works with control, measurement, monitoring surveys, as well as exploratory research to identify new business opportunities.

The consumer care service conducts a survey to measure consumer and customer satisfaction with the service it provides. In 2014, 90% of the customers /consumers declared that they were “Very Satisfied/Satisfied” with the service and 86% were “Very Satisfied/Satisfied” with the response time. In 2013, these numbers were 92% and 89%, respectively. The company does not consider this difference significant and works constantly towards improving service quality. G4-PR5


The company is fully compliant with all legislation and regulations issued by the regulatory bodies governing the sector: the Ministry of Agriculture, Livestock and Supply; the national sanitary agency Anvisa / Ministry of Health; the industrial measurement, standardization and quality body Inmetro; and DNPM, the mineral products department; the advertising self-regulatory council Conar and the Ministry of Justice. It also has a well defined product registration and labeling approval system governed by organized procedures. G4-PR3

All the products sold in the Brazilian market have labels that contain information about the means of conservation, handling and, in specific cases, validity after being opened. Additionally, Brasil Kirin constantly seeks new technologies and types of packaging to reduce waste and to encourage recycling:

•all plastic (PET) packs, disposable bottles and cans contain symbols indicating the proper means of disposal

•secondary packaging (packaging film and cardboard cartons) is recyclable, and this is indicated on the packaging G4-PR3

Brasil Kirin product labeling contains complete information about nutritional values, composition, mode of conservation, traceability and allergenic ingredients. The company concluded the mapping of all the ingredients in its products that could cause allergies. The company’s products are elaborated exclusively with ingredients approved in Brazil. G4-PR1

In 2014, there were no cases of non-conformance with regulations or voluntary codes related to product and service labeling that resulted in fines or penalties. Targets for 2015 include the constant improvement of product labels to ensure greater consumer understanding of the company’s products. This work involves the Marketing, Legal, and Consumer Care Center. G4-PR4

CustomersMaintaining close relations based on trust with customers is a major priority for Brasil Kirin. Nationwide, approximately 600 thousand small, medium and large points of sale receive the same level of attention from the sales team.

In 2014, work was begun on ensuring closer relations with the points of sale (bars, supermarkets and restaurants), focused on the reality of each client and the needs of their consumers. In 2015, these measures will be intensified with the introduction of a new structure for the sales force and the development of a new working concept for the commercial team. The objective is to have the right product in the right place, ensuring greater effectiveness in sales and greater agility in logistics through more accurate knowledge of the needs of each point of sale.

Stakeholders GRI

Brasil Kirin’s sustainability measures go beyond production and distribution. They even reach the point of sale, with the purchase of new refrigeration equipment that uses natural refrigerant gases or HCs (hydrocarbons). The purchases made in 2014 and planned for the beginning of 2015 total more than 2,200 refrigerators, of which 36% have already been installed in commercial establishments that sell Brasil Kirin products.

In addition to emitting almost zero greenhouse gases - the change represents 99% less global warming impact compared with the previous model -, this technology consumes less energy and offers more efficient refrigeration. These units are identified by a stamp and a QR Code which provides stakeholders with an explanation about the initiative.

Innovation reaches the refrigerator


Complaints and cases of non-conformanceIn 2014, a direct channel was created so that customers (resellers of Brasil Kirin products) could resolve any doubts about financial matters, simplifying service and rapidly resolving any problems related to unwarranted charges, among other issues. Prior to this, customers used the Speak to Brasil Kirin channel.

During the year, 20,420 complaints were received via this telephone number (11 2118-9500), of which 1,053 were considered unwarranted charges. The Logistics, Commercial and Financial areas are developing measures to mitigate this kind of problem. G4-PR8

During the year, there were two cases of non-conformance related to product and service communication. One of these was a post on Twitter, which led to an administrative process at Conar - Brasil Kirin withdrew the post before any official decision was made. Another case, which has not yet been judged by Conar, refers to a TV commercial. G4-PR7

logistics and optimized delivery In 2014, Brasil Kirin invested in a tool to optimize transportation for deliveries. The project - which reached the expected return in less than one year - helped to reduce logistics costs by 8% and delivery times by 9%, boosting service reliability and planning capacity, while reducing the number of trucks in circulation. The initiatives include real-time monitoring of vehicles to ensure they do not return to the plants empty, conjugating the transportation of raw materials with finished product and the use of diverse transportation modalities.

Around 80% of the products manufactured in the Southern and Southeastern regions for the Northern and Northeastern markets are transported via cabotage, driving a significant 76% reduction in CO2 emissions.

Another key measure in logistics was the introduction of road trains (large trucks between 25 and 30 meters in length) in the company fleet. With a larger freight capacity, these trucks have been in circulation since 2014. They help speed up transportation, decreasing the number of trips made by 43% compared with a conventional truck, and reducing fuel consumption by 25%. Currently road trains account for 17% of the traffic from the Itu plant to distribution centers.

In 2013, Brasil Kirin initiated a pilot project with auto manufacturer Mercedes Benz to produce a truck with smaller dimensions, similar to an urban cargo vehicle but with two rear axles and greater cargo capacity in order to distribute products inside cities. This model was launched in 2014, and there are currently 99 of them in circulation nationwide.

Stakeholders GRI


In partnership with two large retail chains, we developed the Backhaul project, which makes use of trucks that would otherwise undertake a journey empty to transport Brasil Kirin products.

After making deliveries to stores, the partners’ trucks are loaded at one of our units. Therefore, instead of returning to the retailer’s distribution center empty, they transport our beverages. As a result, the company’s own fleet was saved from making 2,411 trips, the equivalent of 450,000 kilometers (or eleven around the world journeys*), with the trucks empty. This meant a 366 tCO2 eq reduction in emissions, and diesel savings totaling 142,000 liters.**

The project was created over five years ago in Itu (São Paulo). Three years ago it was implanted in Igrejinha (Rio Grande do Sul), and in 2014 it was extended to the Northeast, at the Alagoinhas, Recife and Igarassu plants. G4-EN30

*One journey around the world equals 39,840 km** Diesel consumption was considered to be 3.17 km per liter for heavy goods vehicles

Backhaul project

Stakeholders

In 2014, the logistics area consolidated its plan to promote a new governance model for the 23 distribution centers (DCs). This is an integrated effort with the corporate areas involving monthly reports on improvement opportunities and the results achieved. It also includes a project to improve ergonomic conditions and the work shifts of Logistics area employees, which led to an increase in productivity and in employee satisfaction. Also worthy of note was the fact that the process was widely communicated to employees, ensuring that everyone fully understood the various stages of the operation.

This new governance model is part of the Logistics Efficiency Plan, which has been under development at Brasil Kirin for the last two years.

Virtuous circle


suppliers The diverse raw materials that make up the Brasil Kirin product mix depend on 400 suppliers spread over the country. The company prioritizes contracting suppliers located in the states in which its factories are installed, stimulating local social development.

Effective supply chain management is an essential driver of business success. The Supply area is divided into three groups:

•Procurement: of direct materials (primarily raw materials and packaging), indirect (transportation, other materials and services) and media, marketing and trade partners - responsible for contracting business partners

•Supply intelligence: carries out diverse market and commodity studies•Supplier management (homologation): process through which suppliers receive

a manual containing the rules set forth in the supplier management program and the Code of Conduct, which stipulates the practices Brasil Kirin considers suitable to enable a company to become a business partner.

In 2014, 157 potential suppliers were assessed based on the homologation criteria. All received a manual with the program rules and the code of conduct which sets forth the practices Brasil Kirin considers suitable to enable a company to become a business partner. For other suppliers, the Code of Conduct and the Supplier Manual will be included in Brasil Kirin’s institutional website in 2015. Also in 2015, the Supplier Management area will be responsible for ensuring that approved companies have social and environmental management systems established, documented and implanted, with appropriate certifications and audit plans in place.

Based on quarterly monitoring, the Supplier Management area will request that these suppliers prepare action plans to implant improvements, if this is considered necessary. If suppliers do not follow the rules or meet company requirements, their contracts may be terminated. The company does not have a formal process for assessing environmental impacts in the supplier chain. G4-EN33

All company suppliers sign contracts with clauses that state Brasil Kirin’s non acceptance of practices that are harmful to the environment, the use slave labor and child labor. The compliance clauses were included in supply contracts in the first half of 2013 and the anticorruption clauses in February 2014. G4-LA14; G4-HR10; G4-SO9; G4-EN32; G4-12, G4-FP1, G4-LA15; G4-HR5; G4-HR6; G4-HR11

Brasil Kirin considers local suppliers to be the ones located within a radius of up to 200 km from its manufacturing plants. G4-EC9

Stakeholders GRI


Government and industry entitiesThe company participates actively in diverse initiatives aimed at developing the industry and the country. In 2014, Brasil Kirin participated in 14 industry associations: G4-16

•ABA: Associação Brasileira de Anunciantes (Advertisers association) – 2010;•Aberje: Associação Brasileira de Comunicação Empresarial (Business communication

association) – 2010 until June 2014;•Abia: Associação Brasileira das Indústrias da Alimentação (Food industry association) 2011;•Abinam: Associação Brasileira da Indústria de Águas Minerais (Mineral water industry

association) 2010;•Abir: Associação Brasileira das Indústrias de Refrigerantes e de Bebidas No Alcoólicas

(Soft and non-alcoholic beverages association) – 2010;•Abrabe: Associação Brasileira de Bebidas (Beverages association) – 2010;•Adial: Associação Pró-Desenvolvimento Industrial do Estado de Goiás (Goiás industrial

development association) – 2010;•Aficam: Associação dos Fabricantes de Componentes da Amazônia (Amazonas component

manufacturing association) – 2011;•CEBDS: Conselho Brasileiro para o Desenvolvimento Sustentável (Brazilian sustainable

development council) – 2013;•Cempre: Compromisso Empresarial para Reciclagem (Business commitment to recycling)

– 2010;•CervBrasil: Associação Brasileira da Indústria da Cerveja (Beer industry association) – 2012;•Conar: Conselho Nacional de Autorregulamentação Publicitária (Advertising self-regulatory

council) – 2010;• Instituto Akatu: Consumo consciente para um futuro sustentável (Conscious consumption

for a sustainable future) – 2013;•MBC: Movimento Brasil Competitivo (Competitive Brazil Movement) – 2014.

Begun in 2012, the ETRAF (Excelência em Transporte e Frota) excellence in transportation program is aimed at ensuring quality and ongoing improvement in contracting and managing freight transportation. The program consists of various stages and is focused on driver behavior as it relates safe driving, combating the use of illicit drugs and the sexual exploitation of minors on the highways. After three years of intense work, the program, which began in Itu, has been extended to the rest of the country. It consists of special days for the drivers, with courses on safe driving, medical examinations, exhibitions of equipment and free vehicle inspections. In 2014, adherence of freight providers and outsourced drivers to the ETRAF assessment processes was 100%.

The company also has a partnership with Caminhão 100%, an awareness movement focused on preventive maintenance for cargo vehicles to reduce traffic accidents and to value human life. Similarly, since 2013 Brasil Kirin has partnered with Na Mão Certa, a program aimed at protecting children and adolescents from sexual abuse and exploitation. In 2014, 20% of the logistics partners contracted to provide transportation services between the plants and the advanced distribution centers were signatories to the program.

In the 2014 Carnival, Brasil Kirin organized communication and awareness actions among transportation provider partners, reaching one hundred companies.

Constant evolution

31partners attended the 1st Suppliers Encounter in November, 2014. They discussed the challenges of sustainability and their specific role, as well as presenting six case studies.

Stakeholders

GRI


CommunitiesAware of its role in the development of the communities in which it operates, Brasil Kirin invests in and supports projects aligned with its strategic vision and which fulfill local needs. Relationship actions with the community are developed through donations and private social investment in existing local projects.

For the development of a social project, the company conducts informal talks with the community or public authorities to assess actual local development needs. All company units have committees whose function is to communicate with the community, in addition to the “Speak to Brasil Kirin” channel, which is available by email and a toll free 0800 line. If any kind of report arrives via the Consumer Care Service, whose number is on all the product labels, this is forwarded to the responsible areas in the company (read more in Strategy). G4-SO1; G4-SO11

projectsThe projects supported include Qualifica Macacu which, in partnership with the national industrial learning system Senai (Serviço Nacional de Aprendizagem Industrial), offers short courses in industrial production for employees and residents in the city of Cachoeiras de Macacu (Rio de Janeiro). In 2014, 15 people concluded the course, 3 employees and 12 residents of the city.

In Campinas (São Paulo), where we have an Advanced Distribution Center, we support the Brasil Kirin men’s professional volleyball team, as well as the youth categories manned by young athletes aged from 14 to 21 years. Tickets for volleyball games held in Campinas’ Taquaral Gymnasium were exchanged for non-perishable foods, leading to a donation of 4 metric tons of food for 24 charitable institutions in the city. We also donate products for the activities of FEAC, a federation of social organizations in Campinas.

Also in Campinas, we have a partnership with the Instituto Compartilhar, idealized by the ex-player and coach of the Brazilian men’s national volleyball team, Bernardinho, which offers volleyball classes to needy youngsters in municipal schools in the city. 450 children benefit from the project.

In Itu (São Paulo), two volleyball centers for some one hundred children have been

Stakeholders GRI


inaugurated along the same lines as the Campinas program. Brasil Kirin is also studying other cities in which it has operations to extend the volleyball program.

In the Sorocaba region in São Paulo, the company supports the Sacolona project. In partnership with CCR, we donate used banners for raw material to make bags, wallets and other artifacts, generating income for a group of seamstresses in the city of Capela do Alto. Some of these products are on sale at Empório Brasil Kirin in Itu. At the beginning of the 2015 school year, pencil cases made by the seamstresses were included in the school kit provided for the children of company employees studying in the first to fourth grades of primary school.

In Salvador (Bahia), where we have two distribution centers, in conjunction with the city government we support the Salvador em Campo project, which promotes health and quality of life through incentives for sport and leisure in the city’s communities. The partnership has already benefited 11 communities, with the creation of spaces for schools to introduce children to sports through the organization of games and championships. G4-SO1; G4-FP4

In Sorocaba (São Paulo), we sponsor the men’s

professional futsal team. The team includes

widely acclaimed players and some important

newcomers, in addition to the major talent

Falcão. In 2014, they won the Futsal League

championship, as well as the São Paulo

championship.


Committee for Incentive projects In 2014, a multidisciplinary committee was established to support the organization in the analysis and management of socially oriented projects using federal and state tax incentives that are aligned with company strategy. The committee consists of the Sustainability, Institutional Brand, Marketing and Events, Financial and Tax Planning areas. Other areas are invited to participate in the meetings and present projects to the committee. In 2014, more than R$ 3 million was channeled into projects sponsored via ICMS tax incentives in the states of São Paulo, Rio de Janeiro, Bahia and Rio Grande do Sul. G4-EC4

Brasil Kirin combines sustainability, entrepreneurship and social development in a pilot project implanted in Rio de Janeiro communities.

In December 2014, a drop-off point was inaugurated in the Morro do Alemão district. The idea is to engage people in reducing garbage in the community, separating what can be recycled and sending it to a recycling station run by the local NGO EDUCAP. To encourage the public to sort and clean recyclable material, they are afforded points which may be exchanged for diverse gifts.

In this and in other communities the company is fostering the formation of exclusive micro-distributors for Brasil Kirin products, generating income for these entrepreneurs and strengthening relations with the points of sale in the communities. There are plans to expand this pilot project in 2015.

Economy and sustainability at the base of the pyramid

GRI


Capacity and excellence Striving for operational excellence is part of the Brasil Kirin routine. For this reason, all the company units - in both the production and distribution areas - operate under rigorous standards. This concern is a major competitive advantage for the company, which operates in an integrated manner, combining innovation, logistics structure, production capacity and sustainability in pursuit of productivity and growth.

Detailed, aligned planning drives the constant enhancement of this structure, from the receipt of the raw materials and packaging used in production, through the manufacturing process, warehousing and distribution, to receipt by the end consumer. Today, the company’s major challenge is conciliating the flexibility and agility necessary to respond to innovation without compromising productivity and sustainable practices.

Since 2007, Brasil Kirin has used TPM (Total Performance Management) methodology, a work philosophy created by the Japanese Institute of Plant Maintenance (JIPM) aimed at making companies more competitive by reducing losses throughout the production chain, enabling greater integration between man, equipment and process, and transforming the organizational culture by establishing an environment of continuous improvement. Our main challenge is the pursuit of zero losses. Since 2008, this has already enabled a 95% reduction in customer complaints, an 88% reduction in packaging losses and a 72% reduction in accident rates, among other factors.

In 2014, the company finalized its cycle of Excellence (the first tier of awards granted by the JIPM) in all the manufacturing units in which TPM methodology is used. In 2015 the next step will be taken towards the level of Consistency, already in place at the Alexânia unit. In short, Brasil Kirin is on course to reach World Class, driving competitiveness and sustainability further into the organization.

Our processes and impacts



In Recife (Pernambuco), through the activities in the safety, health and environment pillar of TPM, the unit managed to reduce the number of accidents involving employees with hearing impairments by 100% (from four accidents in 2013 to zero accidents in 2014). The tools developed by this unit will be replicated in the other manufacturing operations.

In 2013, Brasil Kirin conducted a Hazard Analysis and Critical Control Points (HACCP) study on the mineral water and mixed beverage (Água Schin and Skinka) bottling processes. In 2014, this plan was extended to all the soft drink, nectar and beer production and filling processes (Alexânia and Horizonte units), totaling 23 studies in the year. The HACCP analysis is a detailed study of all possible risks (physical, chemical and microbiological), ranging from raw materials to the finished products, to ensure effective quality control. Today, this process is installed in 53% of the company’s production lines. G4-PR1

thinking about the futureQuestions such as reducing water use, recycling materials, decreasing GHG (greenhouse gas) emissions and raising the awareness of all the company’s stakeholders are part of the daily work in the General Sustainability Index, valid for all the manufacturing units and whose results impact the variable remuneration of the plant employees. This index consists of the following factors, with a target of 100% for 2015:

•Compliance with legal requirements•Fulfilling the conditions stipulated in the operating license•Recyclable materials•Greenhouse gas (GHG) emissions •Brewery residues•Fulfillment of treated wastewater parameters.

The performance of the Brasil Kirin factories has improved over the years because of the constant pursuit of consistent results. With respect to the rational use of resources, the following gains in efficiency since 2008 are worthy of note:

•16% total reduction in water consumption •20% total reduction in fuel consumption•8% total reduction in electricity consumption.

water Essential in the beverage industry, water use is a strategic question for Brasil Kirin. In addition to consumption, treatment and reuse, preventive measures, such as managing biodiversity in the areas surrounding the units are also strategic.

In 2014, the Itu unit helped the municipal district and residents during the water crisis faced by the city (read more below and in the Message from the CEO). During this same period no water sources were significantly affected because all surface and ground water withdrawals respect the volumes permitted.

Of the 13 company factories that withdraw surface and ground water, in 2014 only the Igrejinha plant had a decrease in the volume of water available. To enable the water table to recover, other wells around the factory were licensed during the year. G4-EN9

withdrawal and reuseIn 2014 water consumption efficiency was jeopardized by the lower production volume – when the factories tend to carry out more CIPs (stoppages to clean equipment) and set ups (stopping and restarting the production line for a change in product or pack type), implying higher water consumption. Performance is measured in relation to the volume (in hectoliters) of water consumed by the volume produced (also in hectoliters).


GRI


The type and diversity of packs used, or the production mix, increase the complexity of the factory operations and impact the performance of the relative consumption indicators. For example, for the same product, such as Schin beer, there are diverse packs produced in the same factory: 1 l bottle, 600ml returnable bottle, 355 ml long neck bottle, and 473 ml, 350ml and 269 ml cans.

Although the quantity of water used was 8% lower than in 2013, the specific consumption (hL water / hL of beverage produced) was 4.5% higher – increasing from 3.54 to 3.7.

Relative water consumption rate G4-EN8 2012 2013 2014

hL of water / hL of beverage produced 3.61 3.54 3.7

The use of harvested rainwater was 27% lower than in 2013, due to the low rainfall levels in 2014. The volume of water withdrawn by source is strategic and confidential for the company and will not therefore be reported. G4-EN8

source 2012 2013 2014

Surface water (rivers, lakes, wetlands, oceans) 35.92% 37.49% 38.36%

Ground water 63.69% 62.05% 61.31%

Rainwater harvested 0.18% 0.21% 0.16%

Utility provider 0.22% 0.25% 0.27%

tOtal watER wItHdRawn BY sOuRCE G4-EN8

In relation to liquid effluents, the company has physical-chemical treatment plants at its units and uses a combined biological and physical-chemical system that removes more than 97.9% of BOD (Biochemical Oxygen Demand). The total volume of effluents treated is considered strategic for the company’s competitiveness and will not be reported. G4-EN22


GRI

water recycled and reused G4-EN10 2012 2013 2014

Recirculation rate (%) 7.83 8.16 5.57

The recirculation capacity is related to two factors: treatment technology and water quality. The rate was lower in 2014 because of the treatment technology factor. The water needs to go through a physical-chemical plant, and with the reduction of the volume produced in 2014, the treatment plants recirculated less water. Calculation used for the recirculation rate: volume of water recycled m3/total m3/year 2014 x 100% reutilization.


Managing biodiversity Biodiversity management has a direct impact on water withdrawal, a key raw material for a beverage company. Of the 13 manufacturing units, eight have protection areas on the premises. These are Alagoinhas (Bahia), Alexânia (Goiás), Benevides (Pará), Cachoeiras de Macacu (Rio de Janeiro), Caxias (Maranhão), Igrejinha (Rio Grande do Sul), Itu (São Paulo) and Recife (Pernambuco). This totals around 10,000 hectares, including preserved and reclaimed areas, which play a fundamental role in the withdrawal of surface and ground water. G4-EN11, G4-EN13

The partnership with the Fundação SOS Mata Atlântica is one of the company’s major initiatives to ensure the preservation of natural resources and foment environmental education. With the capacity to produce 750,000 seedling per year since the project began in 2007, the SOS Mata Atlântica – Brasil Kirin Forestry Experimental Center in Itu (São Paulo) has cultivated around 3 million seedlings of more than one hundred tree species used in the reclamation of an area equivalent to more than 857 soccer fields.

On the property, loaned by Brasil Kirin under a bailment contract, this restoration work generated the emergence of 19 springs with an estimated increase of 20% in ground water and 5% in surface water. Such results were crucial in a year characterized by a crisis in water supply for the region, ensuring supplies for the company, as well as for the Itu local government and the local population.

In addition to the cultivation of seedlings and the restoration of local vegetation, the center also offers an environmental education program which in 2014 alone was attended by almost 10 thousand people, including students (from infant school to higher education) and teachers.

Employees were invited to bring their children to the SOS Mata Atlântica – Brasil Kirin Forestry Experimental Center to participate in painting and drawing on one of the walls at the site. The activity was conducted by the artist Conrado Zanotto based on the theme of elements of the Atlantic Rainforest and Brazilian biodiversity.


GRI


In 2014, Brasil Kirin and the Fundação SOS Mata Atlântica announced the expansion of the partnership, with support for five academic projects focused on conserving the Atlantic Rainforest in the municipality of Cachoeiras de Macacu (RJ). The winning projects are about the “Conservation of the Atlantic Rainforest” and are divided into “Climate Change”, “Economic conservation strategy” and “Conserving Biodiversity”. G4-EN13

The company works on keeping the habitats in the areas surrounding its plants duly preserved. We have maintained the same areas as in the previous years in the factory units (see below) and initiated a project for the preservation and restoration of a new area acquired by Brasil Kirin in Igarassu (Pernambuco). G4-EN13

Another initiative is the support for the revitalization of the Cactus complex in Rio de Janeiro’s Jardim Botânico, which has collections of cactus species from Africa and Mexico, in addition to Brazilian specimens from the restinga and caatinga biomes. The company helped in the remodeling of the Cactus Garden lake and built small greenhouses for cacti and succulents. The garden organizes guided visits for the visually impaired and offers communication in Braille.

Around 4,838 hectares surrounding the factory units are protection areas for mineral water springs, according to the legislation in force. The detailing of the plants and specific areas is considered to be strategic information by the organization. G4-EN11

Technical studies into biodiversity rates are not carried out in these areas. The company is aware of the need to address the theme of biodiversity in its operations and will conduct such studies in the medium term.

Energy With the objective of reducing total energy consumption, each Brasil Kirin factory has reduction targets that are defined annually. On a monthly basis energy and fuel consumption indicators are reported to senior management as part of the factories’ performance monitoring programs, such as the Manufacturing Management program.

In 2014, energy consumption was 8.5% lower than in the previous year, remaining practically stable in the comparison by hL of beverage produced. This reduction was achieved through technological innovations, improvements to existing processes and the reduction in production volume. As an example of the initiatives that contributed to the reduction in energy consumption, we have the increase in the quantity of biogas generated in the wastewater treatment plants as fuel for the boilers, substituting natural gas. G4-EN3, G4-EN6

In the Manaus plant, solar heating modules substituted the gas boilers in the Guaraná concentrate and essence production process. This led to an almost 50% decrease in the unit’s gas consumption. G4-EN6, G4-EN7

The target for 2015 is to reduce total energy consumption by 3% for the same production volume (GJ/hL of beverage). The pursuit of energy efficiency is one of the priorities for the factories


GRI



GRI

fuel consumption index 2012 2013 2014MJ/ hL of beverage produced 55.78 55.41 53.8

Electricity consumed*

2012 2013 2014 Variation1,058,974 1,072,186.46 998,025.9 -6.9%

* Refers to the energy bought in the free market

Energy consumption inside the organization (GJ) G4-EN3

2012 2013 2014

Total energy purchased (GJ)* 1,220,555.98 1,205,343.42 1,127,152.14Steam generated in company** 2,623,298 2,710,479 2,479,901

* Refers to the energy bought in the free market and the steam bought from third parties, and coming from the biomass boiler. We have no information about the origin of the energy bought on the free market. It may be from renewable sources or not. ** Sum of natural gas, bunker oil, LPG, wood chips and biogas = steam generated in the company in 2014

Energy intensity * G4-EN52012 2013 2014

0.120 GJ/hl 0.115 GJ/hl 0.118 GJ/hl*The energy intensity of Brasil Kirin is measured by one hectoliter (hl) of product filled (beer, draft beer, soft drink, juice, nectar and mineral water). For the calculation of the energy intensity rate the energy from fuel, electricity and purchased steam was considered.

The energy intensity rate remained stable compared with 2013, which may be explained by a 8.5% reduction in total energy consumption, accompanied by a 7.2% reduction in production volume, with the latter being the specific metric adopted for the calculation of this indicator.

non-renewable fuel (GJ) G4-EN3 2012 (GJ) 2013 (GJ) 2014 (GJ) Variation

Natural gas* 1,266,827 1,270,959 1,113,722 -12.37%

Bunker Oil** 452,516 352,416 322,842 -8.39%

LPG** 823,165 863,054 789,226 -8.55%

Total non-renewable (GJ) 2,542,681 2,486,428 2,225,790 -10.48%

Renewable fuel (GJ) G4-EN3 2012 (GJ) 2013 (GJ) 2014 (GJ) Variation

Cane bagasse – 8,874 **** -100.00%

Wood chips ** 36,290 154,316 177,016 14.71%

Biogas*** 44,327 60,861 77,095 26.67%

Total renewable (GJ) 80,617 224,051 254,111 13.42%* Monitored based on purchase invoices** Bunker oil, and LPG and wood chips are monitored via the SAP internal management system

The density of the LPG was 2.5 kg/m3 The conversion factor used for the Bunker oil was 42.29, based on the National Energy Balance Sheet

*** Monitored via internal spreadsheet. The biogas is not considered energy bought by Brasil Kirin because it is produced at the treatment plants

**** There was no consumption of sugarcane in 2014 because of the lack of this raw material in the Goiás region, causing an increase in the use of wood chips.

The increase in the use of renewable energy was due to higher use of biogas and better use of biomass at the factories.

Another initiative aimed at generating energy with a lower environmental impact and a more competitive cost is the construction of a wind park in Acaraú (Ceará). With a total investment of over R$ 100 million, the energy generated will mean that Brasil Kirin will stop emitting approximately 30,000 metric tons of CO2 per year, supplying around 30% of the electricity consumed by all of its manufacturing units.

total energy saved as a result of energy efficiency and conservation initiatives* (GJ) G4-EN6

2012 2013 2014

1,458,049.9 1,918,599.18 2,122,359.18

* Covers fuel and electricity.The methodology used for the calculation was a simple comparison between one year and the other, adding the gain to the total accumulated since 2008.



GRI

EmissionsIn 2014 Brasil Kirin amplified its measurement of greenhouse gas (GHG) emissions and now covers scopes 1, 2 and 3 in its inventory. G4-EN5, G4-EN15, G4-EN16, G4-EN18, G4-EN19

NOx, SOx emissions and other significant atmospheric emissions* G4-EN21

Particulate materials NOx

Alexânia unit** 231.33 mg/Nm³ 203.36 mg/Nm³Caxias unit*** 160 mg/Nm³ 256 mg/Nm³

*The other factory units did not report NOx or SOx emissions. / **Sample taken in Jan./2014, in accordance with Conama Resolution nº 436, December 22nd, 2011. / ***Sample taken in Jan./2014, in accordance with Conama Resolution nº 436, December 22nd, 2011.

Gases included in the calculation Global warming potential (GWP)Carbon dioxide (CO2) 1 t CO2 eqMethane (CH4) 25 t CO2 eqNitrous oxide (N2O) 298 t CO2 eq

ENERGY MATRIX *

Renewable sources (GJ) G4-EN3 Non-renewable sources (GJ) G4-EN3

Natural gas Bunker oil

Liquefied Petroleum Gas (LPG)**

Biomass Biogas

Renewable Non-renewable

45%

13%

7%

3%

32%

2014 10%

90%

2014

2013 20138%

92%

47%

32%

6%

2%

13%

* The consumption of electricity considered is from energy bought from outside the organization in the free market. It may be from renewable sources or not. Because of this, electricity consumption was removed from the energy matrix and, for purposes of comparison, the 2013 matrix calculation was restated.

Indirect greenhouse gas emissions** G4-EN162013 2014

in t CO2 eqTotal 29,069 38,302*

Biogenic emissions (steam purchases at Caxias unit) – 26,139* In 2014 indirect GHG emissions were 31.75% higher than in the previous year. This item accounts for GHG emissions from the acquisition of the electricity consumed by the company. / **Sample taken in Jan./2014, in accordance with Conama Resolution nº 436, December 22nd, 2011.



GRI

Recycled packaging Since August a new raw material is being used for packaging Schin Soft Drinks at the Cachoeiras de Macacu unit in Rio de Janeiro: 100% recycled PET bottles. It is expected that in the first half of 2015 all Schin 2 liter soft drinks produced in the South and Southeast regions will use this pack. Currently 17% of all the PET packs use green PET.

For the correct disposal of packaging, Brasil Kirin invests in partnerships with NGOs and recycling cooperatives to collect the waste generated in the main events sponsored by its brands. In 2014, 5.9 metric tons of waste from Brasil Kirin events were recycled. Moreover, Brasil Kirin works together with the cooperatives encouraging the collection and sorting of solid waste. In the factories in Itu (São Paulo) and Alagoinhas (Bahia) and the distribution centers in Osasco (São Paulo), Itajaí (Santa Catarina) and São Luis (Maranhão), the company donates office waste to nearby cooperatives.

direct greenhouse gas emissions G4-EN15**2013 2014(in t CO2 eq)

Total 112,845 102,416

Biogenic emissions (from burning or degradation of biomass)* – 36,740

Indirect greenhouse gas emissions G4-EN16***2013 2014(in t CO2 eq)

Total 29,069 38,302

Biogenic emissions (steam purchases Caxias unit)* – 26,139

Other indirect greenhouse gas emissions G4-EN17 **** 2013 2014(in t CO2 eq)

Total 2,013 900,187

Biogenic emissions (from burning or degradation of biomass)* – 9,827Calculation based on specific measurement of operational areas. The approach chosen was operational control. * Renewable emission. / ** GHG inventory Scope 1. / *** GHG inventory Scope 2. / **** GHG inventory Scope 3 – considering categories 1, 4, 5, 6, 7, 9, 12.

In 2014, indirect emissions were 32% higher compared with the previous year. This occurred because of the considerable increase in the emission factor for electrical energy consumption in the country, impacted heavily by the water crisis.

The biggest impact in scope 3 are the emissions relative to category 1, raw material and packaging production, accounting for approximately 72% of the total emissions for this scope.

Emission reduction initiatives G4-EN19

2013 2014

weight ( CO2 t eq) type of gas scope weight ( CO2 t eq) type of gas scope

Change to other fuels 2.1 CO2 eq 1 – – –Methodology: Brazilian GHG protocol. In 2014, reductions caused by company initiatives were not measured.

Organization’s GHG emissions intensity rate* (t CO2 eq/hl)G4-EN18

2013 2014

0.004468 0.034892*The metric used to calculate the rate was the direct measurement of the total beverage production (net production). The gases included in the calculation were CO2, CH4

and N2O. In 2013, only scope 1 and 2 emissions were considered. In 2014, the three scopes were considered.


Environmental impacts and waste G4-EN23, G4-EN27One of the initiatives to mitigate environmental impacts was the 2% reduction in the quantity of solid waste disposed of in 2014, compared with 2013.

Initiatives G4-EN27

2014

description Reductions obtained*

EmissionsUse of natural gas and biomass in boilersRealization of emissions inventory

Reduction of approximately 10% in emissions from fixed sources

Effluents

Wastewater treatment plants in all the factories Increase in treatment capacity at the Recife (Pernambuco) factory

Compliance with quality parameters for final wastewater

Sound pollution

Annual noise assessment in factories and surrounding communities

Monitoring and adherence to permitted levels of noise

* The quantities of solid waste generated in the units are accounted for via SAP reports and weighing tickets at scales. From this total, the waste recycled or reused is counted. All solid waste that is not recycled or reused is disposed of properly.

Recovered packs and products G4-EN28

*For glass, the result was obtained from the invoice issuance report for the sale of glass fragments from the breakage of returnable glass bottles at the end of their working life. **The calculation of the volume of packaging recovered took into account: the volume of product sold in 2014 by type of pack (glass, aluminum, PET, barrel and aseptic carton); the percentage of packaging recyclability in the country (glass – 98.88% returnable and barrels – 100% returnable).

In 2014, Brasil Kirin recovered 69,206.54 t of products and packs **, which breaks down as:

Glass*

18.64%Aluminum cans

32.64%

PET

15.73%Aseptic cartons

0.10%

In the manufacturing operation in 2014, 33,200 metric tons of materials were recycled, a 10%increase over 2013.

All units also have internal selective waste collection, recycling and disposal programs. With the consolidation of the General Sustainability Index and an extensive awareness raising effort, in 2014 Brasil Kirin reached the target set the previous year, recycling 98% of its waste. In 2015, the company is planning to improve the work done on waste considered to be hazardous and to maintain its awareness programs, the target being to reach a 99% recycling rate at its units, including the corporate office. G4-EN23

GRIOur processes and impacts


2013 2014 Variation

Costs of waste disposal, emissions treatment and mitigation:

R$ 3,753,371.00 R$ 3,330,134.00 -11.28%

Waste treatment and disposal* R$ 3,753,371.00 R$ 3,122,119.00 -16.82%

Emissions treatment (e,g,: spending on filters, agents)**

R$ 0.00 R$ 192,515.00 –

Total cleaning costs, including remediation of spills***

R$ 0.00 R$ 15,500.00 –

Prevention and environmental management costs:

R$ 2,544,045.88 R$ 1,185,516.36 -53.40%

External environmental management services****

R$ 593,220.32 R$ 187,524.00 -68.39%

External certification of management systems*****

R$ 1,520.00 R$ 0.00 -100.00%

Personnel for general environmental management activities******

R$ 1,949,305.56 R$ 997,992.36 -48.80%

tOtal R$ 6,297,416.88 R$ 3,122,119.00 -50.42%* The company reduced waste generation and is seeking new alternatives to increase the percentage of recyclable waste.

** The investments were made in the units to drive improvements and reduce environmental impacts.

*** Cost of repairing pipes at Caxias unit.

**** This included optimization of the system for managing legal requirements.

***** No certification processes were necessary in 2014.

****** Reduction due to change in headcount in environment area at units.

tOtal InVEstMEnts and spEndInG On EnVIROnMEntal pROtECtIOn G4-EN31


GRI

Hazardous waste (t) G4-EN23 2012 2013 2014 Variation 2013 x 2014

Reuse (decontamination) - - - –

Recycling* 33 976 36 -96.40%

Incineration (burning)** 125 323 19 -94.06%

Landfill (industrial landfill) *** 5,592 6,914 5 -99.93%

Co-processing**** 6 7 32 357.29%

total 5,755 8,220 92 -98.87%* In 2014, lubricating oil accumulated at the units due to the regularization of contracts. Therefore these materials were not recycled as they were in 2013.** The decrease was caused by reduced disposal of PPE.*** There was a mistake in the amount published in the 2013 report. Amounts that were not hazardous waste were considered because of an error in a spreadsheet - 2013 - 3,895 t of waste concentrate from Itu + 2,138t of perlite)**** The company made improvements in segregating contaminated material, which increased generation of these materials.

non-hazardous waste (t) G4-EN23 2012 2013 2014 Variation 2013 x 2014

Composting* 661 4,047 2,376 -41%

Reuse 250,982 292,885 261,285 -11%

Recycling 28,858 29,210 28,560 -2%

Incineration (burning)** 1,642 1,830 91 -95%

Landfill*** 17,177 16,833 5,322 -68%

Underground injection*** 11,051 7,788 17,841 129%

total 310,371 352,593 315,475 -10%* The difference in number was due to the reduction in production volume and consequently the lower generation of perlite. Additionally, one of the composting unit’s licenses was cancelled and the perlite was disposed of in landfills.

** The number is significantly lower in 2014 due to the fact that the material was sent to the Itu unit, and the material was recycled instead of being incinerated.

*** The changes in the landfill and underground injection volumes occurred principally because the waste generated at the Alagoinhas unit was disposed of in landfills in 2013 and was redirected for incorporation into the soil in 2014.


assurance statement G4-33

BSD Consulting carried out an independent verification of the process of drafting Brasil Kirin’s 2014 Sustainability Report in accordance with GRI (Global Reporting Initiative) G4 guidelines, comprehensive option. The verification process was conducted for the second year in a row and is aimed at providing Brasil Kirin stakeholders with an independent opinion on the quality of the report; the stakeholder engagement processes; adherence to AA1000AS 2008 principles; and management of sustainability in the company.

IndependenceWe work independently and guarantee that no BSD staff maintains consulting contracts or other commercial ties with Brasil Kirin. BSD Consulting is an AccountAbility AA1000 Licensed Assurance Provider, registered under the number 000-33.

Our competencyBSD Consulting is specialized in sustainability. The work was carried out by a team of experienced professionals trained in external verification processes.

Brasil Kirin and Bsd ResponsibilitiesThe drafting of the Sustainability Report and the definition of its content are the responsibility of Brasil Kirin. The verification of the report was the objective of the work done by BSD.

scope and BoundariesThe scope of our work includes the information in the complete version of the Brasil Kirin 2014 Sustainability Report for the period covered by the report, from January 1st 2014 to December 31st 2014. The independent verification process was carried out according to AA1000 Assurance Standard 2008, Type 1, which provides a reasonable level of assurance. The purpose of the Assurance Statement is to inform stakeholders of BSD’s conclusions about Brasil Kirin’s adherence to the three AA1000AS principles: Completeness, Materiality and Responsiveness. The scope of the work did not include verification of financial data.

MethodologyThe procedures observed during the engagement and the AA1000AS approach to verification include:

•Evaluation of the content of the 2014 Sustainability Report;

•Evaluation of the engagement and materiality process, focused on GRI G4 criteria;

•Understanding of the processes flow for obtaining and generating information for the Sustainability Report;

•Research of publicly available information on the sector and the company (press, websites and legal databases);

• Interviews with managers of key areas with respect to the relevance of the information for the report and for sustainability management;

•Personal interviews with company leaders;

•Whenever relevant, verification of information about performance in sustainability with the senior managers of the company;

•Review of evidence of the aspects and indicators selected for verification and the remote consultation of external stakeholders, when this was the case;

•Analysis of the relevance of the information in the Sustainability Report from the viewpoint of external stakeholders;

•Based on sample tests, confirmation of information in the Sustainability Report through supporting documentation, management reports, internal controls and official correspondence.

Key Conclusions on adherence to aa1000as 2008 principles

1.Completeness – addresses stakeholder participation in the development of a transparent and strategic sustainability management process.

• In the 2014 sustainability report the stakeholder consultation process undertaken in the 2013 cycle was used. There was no new stakeholder consultation process for the elaboration of the report for the current cycle. Considering the materiality review process projected for


2015, the importance of establishing a structured, ongoing process that involves the company’s priority external stakeholders, as well as internal stakeholders related to the different locations in which the company has operations must be underscored.

•The process of selecting stakeholders in 2013 was conducted by the corporate affairs and sustainability area. There was no structured process for prioritising the groups consulted. In the next reporting cycle it is important that a structured process for prioritizing stakeholders, based on their influence and importance for the company, be conducted. The process of consultation could be broader and more robust, with the inclusion of other stakeholders, such as government bodies, unions, associations, different customer segments and consumers.

•Senior management was included in the consultation process for the definition of material topics in 2013. However, these topics were not validated by the Executive Board and the CEO. The importance of involving senior management in the review and validation of the material topics in the process scheduled for 2015 must be underscored.

•At the end of 2014 a meeting was held with the Sustainability Committee to undertake a critical analysis of internal controls related to material aspects and indicators, focused on managing sustainability for the next cycle. Worthy of note is the involvement of the Sustainability Committee in a process of continuous improvement in monitoring the sustainability indicators, which could be rolled out to the areas in the coming cycles.

• In 2014, consolidation of sustainability management in the company advanced. Worthy of note in the cycle was the integration of the areas in dealing with sustainability topics and the evolution in internal managers’ understanding of aspects of sustainability in their activities and of the impacts of the material topics on the different company areas.

•

2. Materiality (or Relevance) – themes necessary for stakeholders to draw conclusions about the organization’s economic, social and environmental performance.

•The same materiality process conducted in 2013 was used for the 2014 Sustainability Report, without the inclusion or exclusion of topics. However, the topics of Occupational Health and Safety, Training and Education and Transportation were included in the 2014 Sustainability Report as material aspects, in accordance with the recommendation made in the 2013 Assurance process. Compliance (social) and the aspect Materials were not considered in the list of relevant aspects. It is important to consider the inclusion of these in the next reporting cycle, given their relevance for the operations of the company and the context of sustainability in the sector.

•The nomenclature used for the material topics was maintained in the 2014 reporting cycle. The need to clearly and specifically address the meaning of each topic is underscored, considering its impacts and its relevance for the company and for stakeholders.

• In 2014, the impacts and boundaries related to the material aspects were identified, complementing the materiality process carried out in the previous cycle. However, it is still important to enhance the treatment of some criteria of the GRI G4 guidelines with respect to the following points: the cross referencing of the company’s material topics with the G4 aspects; and the assessment of the relevance of the aspects which become material.

• In 2013, 12 material topics were defined for Brasil Kirin. The Sustainability Committee carried out a process to select eight topics, prioritized for focus and treatment in the 2014 cycle, and four which will be included as priorities for company management in 2015. The insertion of these four material topics (Managing Biodiversity, Local Development, Energy and Emissions, and Generating Value for Shareholders and Profitability) in the 2014 report is worthy of note.

•Considering the context of sustainability for the company and the industry it is in, the approach to reporting on the topics water, energy and work environment was appropriate. Of special interest is the question of water, particularly in the context of the water crisis in the Itu region where the company’s head office is located. Brasil Kirin has resource preservation practices in place and was effective in initiatives to help the community when it was faced with this crisis in water supply. Reporting on the topics Emissions and Supplier Management evolved in the 2014 cycle, due to improved company management in these topics. However, critical topics such as packaging, local development and managing biodiversity were treated in a preliminary manner in the report.

3. Responsiveness – addresses the measures taken by the organization in response to specific stakeholder demands.

• In 2014 Brasil Kirin initiated a supplier approval process using a tool which assesses social, environmental, financial and legal compliance criteria. The process is in a trial phase, and 157 suppliers were assessed in 2014. It is important to expand and enhance management of the supplier chain, mapping contracted companies in relation to sustainability risks and impacts, in order to mitigate and manage these. The importance of establishing a structured supplier assessment process with monitoring indicators and periodic verification must be underscored.

•Brasil Kirin has a structured R&D (research and development) area, with a standard flow for the development of innovations in products and packaging. In 2014, there was an evolution in projects related to


sustainability criteria, such as the reduction in consumption of plastic in packaging and increased use of green PET in the product portfolio. Worthy of note is the relevance of creating indicators and ways of assessing the impacts related to the question of packaging from the point of view of sustainability.

•As in the previous cycle, the management and monitoring system for industrial indicators, which includes water, energy and emissions is standardized and is conducted via the Manufacturing Management Program, which is also aligned with the principles of TPM (Total Performance Management) methodology. This management system permits the controls for these indicators to be standardized and subjected to internal audit processes at all the plants. In 2014, management of indicators for atmospheric emissions was enhanced, with the amplification of the GHG emissions inventory to cover scopes 2 and 3. The scope 1 emissions inventory at the Itu plant in São Paulo was submitted to an external audit process in 2014.

•According to the verification process, the G4-EN3 indicator (energy consumption inside the organization) has standard controls for monitoring energy consumption on a monthly basis in the plants. However, it is important to improve consolidation of the information through the systematization of the data and the execution of periodic verifications.

•The indicators G4-EN8 (total water withdrawn by source) and G4-EN9 (water sources significantly affected by water withdrawal) have systematized controls with respect to the calculation information base and these are verified periodically through internal and external audits. It is important to integrate internal controls related to water management to improve the consolidation of the indicators

•The controls related to the G4-LA6 indicator (types and rates of injury, occupational diseases, days lost, absenteeism and number of mortalities related to work, discriminated by region and gender) are standardized with respect to information on the company’s own employees. There is no standardized monitoring of this information for third-party employees because the process of monitoring and controlling this data was initiated in 2014.

•The information for the G4-HR12 indicator (number of human rights related complaints and grievances filed, processed and solved via formal mechanism) is monitored in a standardized way by the Compliance area. In 2014, the Compliance area was incorporated into Corporate Affairs and Sustainability and the Speak to Brasil Kirin channel was consolidated. A standard procedure for addressing reported breaches was established using independent external support to record incidents and audits. The indicator has standardized controls with periodic verification and reports for senior management.

•Management of the SAC Consumer Care Service is structured in the company with a collection system that comprehends all the contacts received. There is a formal and standardized process for attending customers by telephone and by email, as well as the production of consolidated monthly reports by the SAC area on all the contacts received and the procedures undertaken to address them. It is necessary to stress the importance of integrating the SAC area with other company areas through sharing structured information and indicators to optimize and improve consumer service and satisfaction.

final considerations:•We consider worthy of note Brasil Kirin’s efforts in the

sustainability reporting process based on GRI G4 guidelines, as well as the application of the Comprehensive option in 2014. In the opinion of BSD Consulting, Brasil Kirin has procedures and practices for the material topics related to its industrial processes and is seeking to consolidate social and environmental management through the implementation of measures aligned with the other material topics, such as: supplier chain, energy and emissions, responsible beverage consumption and products offering social benefits. There are opportunities to enhance the reporting process in relation to all the criteria of the comprehensive option of the GRI G4 guidelines and the importance of addressing the targets related to the topics: work environment, water, packaging and local development in the report must be underscored. The 2014 Sustainability Report reflects important points as well as critical points for company management, contributing to a transparent report and balance in the information presented.

São Paulo, March 4th 2015.

Bsd Consulting - Brazil


General contentdescription Chapter/ response External

assurance Omission

strategy and analysis

G4-1 Message from CEO Message from CEO (page 2) No

G4-2 Description of main impacts, risks and opportunities

Message from CEO (page 2) No

Goals and targets related to risks and opportunities will be reported in the next reporting cycle as part of the review of the company’s medium term business plan (MTBP).

Organizational profile

G4-3 Name of the organization Brasil Kirin No

G4-4 Primary brands, products and/or services Our products and our brands (page 14) No

G4-5 Location of the organization’s headquarters Itu (SP) No

G4-6 Countries in which the operation’s main units or most relevant ones for the sustainability aspects of the report are located

Brazil No

G4-7 Nature of ownership and legal formA subsidiary of Kirin Holdings, Brasil Kirin is a private company

No

G4-8 Markets served Brasil Kirin (page 4) No

G4-9 Scale of organizationBrasil Kirin (pages 4 and 7)

Our products and our brands (page 14)No

G4-10 Employee profileBrasil Kirin (page 4)

Stakeholders (pages 24 and 25)No

G4-11 Percentage of employees covered by collective bargaining agreements

100% No

G4-12 Description of organization’s supply chain Stakeholders (page 39) No

The total number of suppliers contracted will be published in the next reporting cycle.

G4-13 Significant changes during the reporting period regarding the organization’s size, structure, ownership, and supply chain

There were no significant changes regarding the organization’s size, structure, ownership and supply chain

No

GRI Index


description Chapter/ response External assurance Omission

G4-14 Description of how the precautionary approach or principle is addressed by the organization

The company uses the raw materials and inputs permitted by the legislation of the countries in which it operates. However it does not apply the cautionary principle which establishes the non-use of determined products or ingredients about which there are scientific uncertainties.

No

G4-15 Social charters, principles, or other initiatives developed externally

Our products and our brands (page 19)/Strategy (page 23)

No

G4-16 Participation in associations and organizations Stakeholders (page 40) No

Material aspects identified and boundaries

G4-17 Entities included in the organization’s consolidated financial statements, and entities not included in the report

The consolidated financial statements encompass the financial statements of Brasil Kirin Holding S.A. and its subsidiaries listed below:Brasil Kirin Participações e Representações Ltda.;Brasil Kirin Indústria de Bebidas Ltda.;Brasil Kirin Bebidas Ltda.;Brasil Kirin Logística e Distribuição Ltda.;Brasil Kirin Trading e Serviços Ltda.;Brasil Kirin Maltes Especiais Ltda.;Cervejaria Baden Baden Ltda.;Brasil Kirin Comercializadora de Energia Ltda.;Indústria de Bebidas Igarassu Ltda.;Sonar Serviços e Franquias Ltda.;Cervejaria Sudbrack Ltda.They also include the following companies incorporated in 2013:Brasil Kirin Administração de Bens Ltda.;MS - Marketing e Serviços de Franquia Ltda.;Creme de la Creme Empreendimentos e Participações S.A.;Bar e Restaurante Devassa Ltda.;Kirin Holdings Investments Brasil Participações Ltda.;Aleadri-Schinni Participações e Representações Ltda.;Jadangil Participações e Representações Ltda.

All these companies were covered by the report.

No

G4-18 Process for defining the report content

Introduction (page 1) / Governance of sustainability (pages 11 and 12)

The GRI principles of Inclusion, Materiality, Context of Sustainability and Completeness were broadly considered in the company’s materiality process.

The materiality process conducted in 2013 was maintained for this reporting cycle. In 2014, the material aspects Training and Education, Occupational Health and Safety were included for managing the priority topic Work Environment, on the recommendation of the 2013 assurance process.

Yes. Assurance Statement page 54

G4-19 List of material aspects Governance of sustainability (pages 11 and 1 2)




G4-20 Boundary within the organization, for each material aspect

Governance of sustainability (pages 11 and 1 2)


G4-21 Boundary outside the organization, for each material aspect

Governance of sustainability (pages 11 and 1 2)

The company did not conduct analyses by stakeholder group. The interpretation of the boundaries outside the organization was broad.


G4-22 Restatements of information provided in previous reports

Indicated throughout the report, as necessary, in footnotes.

No

G4-23 Significant changes in scope and boundaries of material aspects in relation to previous reports

There were no significant changes in the company’s operations

No

stakeholder engagement

G4-24 List of stakeholder groups engaged by the organization

Introduction (page 1) /Governance of sustainability (page 11)

No

G4-25 Basis for identification and selection of stakeholders with whom to engage

Introduction (page 1)Market research done with specific groups in the beverage sector

No

G4-26 Approach to stakeholder engagement

Introduction (page 1)Governance of sustainability (page 11)

Research with consumers and employees and dialogue channels such as SAC and social networks.

Additional information about building materiality in the 2013 report (page 5 of the PDF - Building Materiality)

No

G4-27 Key topics and concerns that have been raised through engagement, by stakeholder group

Governance of sustainability (pages 5 and 11)

The main topics (aspects) and concerns of the stakeholders are those listed in the materiality matrix. The main measures adopted by the organization to address these topics and concerns are the actions described in the reports on the aspects in the complement. The methodology used did not identify the main concerns specifically by stakeholder group.

No

Report profile

G4-28 Reporting period Introduction (page 1) No

G4-29 Date of most recent previous report 2013 No

G4-30 Reporting cycle Annual No

G4-31 Contact point for questions regarding the report or its contents

Introduction (page 1) No

G4-32 Option of application of guidelines and location of GRI table

Introduction (page 1)

GRI Index (page 57)No

Governance

G4-33 Policy and current practice with regard to seeking external assurance for the report

Assurance statement (page 54)


G4-34 Organization’s governance structureGovernance of sustainability (page 10)

Strategy (page 21)No



G4-35 Process for delegating authority for economic, environmental and social topics from the highest governance body

Strategy (page 21) No

G4-36 Executive level positions with responsibility for economic, environmental and social topics


G4-37 Processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics


G4-38 Composition of the highest governance body and its committees

100% menVinicius Prianti (chairman)Gino Di Domenico (member)Shinro Fujita (member)Henry Okahashi (member)Hirotake Kobayashi (member)Steve Burrows (independent member)Augusto Cesar Parada (independent member)

No

G4-39 Chair of the highest governance body

Strategy (page 21)

There is no accumulation of functions. The chairman of the Board does not exercise the function of CEO.

No

G4-40 Nomination and selection processes and criteria for the highest governance body and its committees

Strategy (page 21)

The selection of board members is in accordance with the Governance Charter. Prerequisites for selection are: fluency in English, at least five years executive experience as financial officer or vice president of an organization of international origin and experience in the consumer goods industry.

No

G4-41 Processes for avoiding and managing conflicts of interest

No

This information is not currently available. The company is committed to reporting it in the next reporting cycle.

G4-42 Role of highest governance body and executives in development of impact management policies and targets


G4-43 Measures taken to enhance highest governance body’s knowledge of economic, environmental and social topics

Governance of sustainability (page 10)

The Board of Directors, through the CEO, approves the company’s annual strategic planning and thus is aware of what is happening in the governance of sustainability. It also meets with the vice presidents as needed, and is therefore aware of the company’s environmental, economic and social questions.

No

G4-44 Performance self-assessment processes for highest governance body

No

This information is not currently available. The company is committed to reporting it in the medium term.

G4-45 Responsibility for implementation of economic, environmental and social policies


G4-46 Role of governance in analysis of effectiveness of organization’s risk management processes for economic, environmental and social topics


G4-47 Frequency with which highest governance body reviews impacts, risks and opportunities




G4-48 The highest position responsible for formally approving the sustainability report and ensuring all material aspects are covered

Vice president of Corporate Affairs and Sustainability


G4-49 Process adopted for communicating critical concerns to the highest governance body


G4-50 Nature and total number of critical concerns communicated to the highest governance body and the mechanisms used to address them


Other critical questions are reported to the Board of Directors, but the numbers are considered strategic, for which reason they will not be reported.

G4-51 Relationship between remuneration and organizational performance, including social and environmental aspects

Governance of sustainability (page 9)

The remuneration of the Board of Directors does not take into account socio-environmental criteria. The variable remuneration of all employees takes into account socio-environmental criteria which are set forth in the strategic maps of the operations (corporate, manufacturing, business units, and distribution centers).

No

G4-52 Involvement of internal or independent consultants in determining remuneration

Stakeholders (page 32) No

G4-53 Consultation of stakeholders about remuneration and its application to organizational policies

Union agreements No

The remuneration policies are agreed on with the relevant unions on an annual basis. Information about voting is strategic and will not be reported.

G4-54 Ratio of highest salary to general median in the organization, by country

No

The company considers this information strategic, and it will not be reported.

G4-55 Ratio of proportional increase in highest salary to median increase in the organization, by country

No

The company considers this information strategic, and it will not be reported.

Ethics and integrity

G4-56 Values, principles, standards and norms of behavior in the organization

Brasil Kirin (page 5) No

G4-57 Internal and external mechanisms for guidance on ethical behavior and compliance

Strategy (pages 22 and 23)


G4-58 Internal and external mechanisms for communicating concerns about unethical conduct

Strategy (page 23)



specific contentdescription Chapter / response External

assurance Omission

Economic category

Economic performance

G4-DMA Management approach

Brasil Kirin (page 4)Governance of sustainability / Table correlating material topics, GRI aspects and impacts inside and outside Brasil Kirin (page 12)

No

G4-EC1Direct economic value generated and distributed

Brasil Kirin/ Economic results (page 8) No

G4-EC2 Financial implications and other risks and opportunities for organization’s activities due to climate change


G4-EC3 Coverage of organization’s pension plan obligations

Stakeholders/People (page 32) No

G4-EC4 Significant financial help received from government

Stakeholders/Communities (page 43) No

Market presence


Governance of sustainability / Table correlating material topics, GRI aspects and impacts inside and outside Brasil Kirin (page 12)

The company does not have a specific policy to contract local suppliers. However, initiatives to develop local suppliers in plants in the Northeast, such as Alagoinhas, were undertaken and will continue in 2015.

No

Contracting suppliers is based on technical, professional and ethical criteria, in conjunction with price quotes and quality assessment.In 2014 a supplier pre-approval process was introduced which incorporates sustainability criteria.

G4-EC5 Ratio of lowest salary in organization to local minimum wage, by gender

In 2014, the lowest salary paid to male employees was 7.5% above the lowest Brazilian salary, while for women it was 18.78%, an increase of almost 5% compared with ratio for women reported in the previous report.

No

G4-EC6 Local hiring Stakeholders (page 34) No

Indirect economic impacts


Brasil Kirin (page 7)


The company does not have a specific policy to contract local suppliers. However, the Supplier Pool project in the city of Alagoinhas in Bahia, which is committed to hiring locals to foment socio-economic growth in the region, will be continued in 2015. Other manufacturing units, such as Horizonte (Ceará) are developing local suppliers, which generates an exchange of knowledge and innovation. Suppliers are contracted based on technical, professional and ethical criteria, as well as price quotes and quality assessment.

No

G4-EC7 Impact of infrastructure investments offered for public benefit


G4-EC8 Description of significant indirect economic impacts



description Chapter / response External assurance Omission

procurement



The company does not have a specific policy to contract local suppliers. However, the Supplier Pool project in the city of Alagoinhas in Bahia, which is committed to hiring locals to foment socio-economic growth in the region, will be continued in 2015. Other manufacturing units, such as Horizonte (Ceará) are developing local suppliers, which generates an exchange of knowledge and innovation. Suppliers are contracted based on technical, professional and ethical criteria, as well as price quotes and quality assessment.

No

G4-EC9 Policies, practices and proportion of spending on local suppliers


The proportion of spending on local suppliers is considered strategic and will not be reported.

FP1 Percentage of volume bought from suppliers in accordance with the company’s procurement policy


FP2 Percentage of volume acquired that is verified as being in compliance with responsible, reliable internationally recognized production standards, discriminated by standard

No

The Supplies and Sustainability areas are identifying opportunities to incorporate sustainability criteria into raw material and input purchases.

The information is not currently available and will be reported in the next reporting cycle.

Environmental category

Energy



Our processes and impacts (page 44)


G4-EN3 Energy consumption within the organization Our processes and impacts (pages 48 to 50)


G4-EN4 Energy consumption outside the organization

No

The information is not available. The company intends to report consumption outside the organization in the medium term.

G4-EN5 Energy intensity Our processes and impacts (pages 49 and 50) No

G4-EN6 Reduction of energy consumption Our processes and impacts (page 48) No

G4-EN7 Reductions in energy requirements of products and services

Our processes and impacts (page 48) No



water





G4-EN8 Total water withdrawal by source Our processes and impacts (page 46)


The absolute volumes were not reported since this information is confidential and strategic for the business.

G4-EN9 Water sources significantly affected by water withdrawal



G4-EN10 Percentage and total volume of water recycled and reused


The absolute volumes were not reported since this information is confidential and strategic for the business.

Biodiversity





G4-EN11 Location and size of area owned Our processes and impacts (pages 47 and 48) No

G4-EN12 Significant impacts of activities, products and services on biodiversity

No

Over the next five years, the company will evaluate whether any of the factory operations are located in buffer zones or areas which are important or sensitive in terms of biodiversity. Where this is the case, the company will implant flora and fauna studies accompanied by monitoring and impact assessment plans.

G4-EN13 Habitats protected or restored Our processes and impacts (pages 47 and 48) No

G4-EN14 Total number of species on IUCN red list and other conservation lists

No

This information is unavailable. The company intends to initiate impact studies focused on the IUCN red list by factory operation within five years.



Emissions





G4-EN15 Direct greenhouse gas emissions Our processes and impacts (pages 50 and 51) No

G4-EN16 Indirect greenhouse gas emissions from the acquisition of energy


G4-EN17 Other indirect greenhouse gas emissions Our processes and impacts (page 51) No

G4-EN18 Greenhouse gas emission intensity Our processes and impacts (pages 50 and 51) No

G4-EN19 Reduction of greenhouse gas emissions Our processes and impacts (pages 50 and 51) No

G4-EN20 Emissions of ozone-depleting substances

The predominant industrial refrigeration fluid is ammonia, which is not harmful to the ozone layer and does not cause greenhouse gas effects.

No

This information is unavailable. It will be reported in the medium term.

G4-EN21 NOx, SOx and other significant atmospheric emissions

Our processes and impacts (pages 50) No

Effluents and waste





G4-EN22 Total water discharge by quality and destination


G4-EN23 Total weight of waste, by type and disposal method

Our processes and impacts (pages 52 and 53) No

G4-EN24 Total number and volume of significant spills

There was a spill of 60m³ of effluent at the Caxias unit in Maranhão. This was caused by a burst pipe transporting treated wastewater. Part of the piping was replaced to prevent a repetition. Since the wastewater was treated, there was no environmental impact.

No

G4-EN25 Weight of waste transported deemed hazardous

The hazardous waste generated in the diverse processes of the manufacturing units was treated or disposed of in accordance with the legislation in force, always pursing the alternatives with the least environmental impact. In 2014, the quantity was 83.34 metric tons.

No



G4-EN26 Protection and biodiversity rate of water bodies and habitats

Treated effluent is discharged into a single water body

Recife/Pernambuco: River Piabas (Class 2)Benevides/Pará: River Benfica (Class 2)Igrejinha/Rio Grande do Sul: River Paranhana (Class 2)Alexania/Goiás: Ribeirão Barreiro (Class 2)Caxias/Maranhão: Riacho Sanharó (Class 4)Alagoinhas/Bahia: River Catu (Class 2)Macacu/Rio de Janeiro: Córrego Caboclo (Class 2)Igarassu/Pernambuco: River Itapicuru (Class 2)Itu/São Paulo: Córrego Itaim (Class 2)Class 2: water for domestic supply after conventional treatment; protection of aquatic communities; recreation; irrigation for vegetables and fruits; normal and / or intensive breeding of species for human food.Class 4: waters for navigation; landscaping considerations; and less demanding uses.

No

Information about the size of water bodies and about biodiversity is not available.

products and services




No

G4-EN27 Initiatives to mitigate environmental impacts


G4-EN28 Percentage of products sold and packaging materials reclaimed, by category


For this reporting cycle the percentage by product category is not available.

No

For this reporting cycle the percentage by product category is not available.

Compliance

G4-DMA Management approachGovernance of sustainability / Table correlating material topics, GRI aspects and impacts inside and outside Brasil Kirin (page 12)

No

G4-EN29 Value of fines and total number of sanctions resulting from non-compliance with environmental laws.

There were no fines or significant environmental sanctions in 2014. The Safety, Health and Environment and Legal areas undertook proactive, preventive procedures aimed at avoiding any kind of fine or administrative sanction.

No

transportation


Stakeholders/Logistics and optimized delivery (page 37)



G4-EN30 Significant environmental impacts from the transportation of products and workers.


General

G4-DMA Management approach Our processes and impacts (page 44) No

G4-EN31 Total environmental protection expenditures and investments




Environmental screening of suppliers



Stakeholders (page 24)


G4-EN32 Percentage of new suppliers screened using environmental criteria


The percentage of suppliers contracted in 2014 based on environmental criteria is not available. This information will be reported in the next reporting cycle.

G4-EN33 Significant actual and potential negative environmental impacts in supplier chain


In 2014, 157 suppliers who were being considered for hiring were screened based on the approval criteria. All of them receive the manual with the rules of the program and the code of conduct setting forth the practices Brasil Kirim considers suitable for a supplier to become a business partner. There were no cases in which it was necessary to make an improvement agreement (action plan) related to the supplier’s socio-environmental performance; five suppliers were disqualified because of product quality or the inability to guarantee information security. In 2015, the Supplier Management area will be responsible for ensuring that approved companies have established, documented social and environmental management systems implanted, with certifications and subject to audit.Through quarterly monitoring, if necessary the Supplier Management area will request action plans to implant improvements. If suppliers do not follow the rules or meet requirements, contracts may be terminated. The company does not have a formal process for assessing environmental impacts in the supplier chain. In 2015, the Code of Conduct and the Supplier’s Manual will be available for public consultation on the Brasil Kirin website.

No

social category – labor practices and decent work

Employment



Strategy/Compliance (page 21)


No

G4-LA1 Total number and rates of new employee hires and employee turnover

Stakeholders (pages 24 and 26) No

G4-LA2 Comparison of benefits for full-time and part-time and temporary workers


G4-LA3 Return to work and retention rates after paternal leave




labor relations




No

G4-LA4 Minimum notice periods regarding operational changes

The company does not have a minimum notice periods regarding significant operational changes

No

FP3 Percentage of working hours lost due to labor disputes, strikes and/or lockouts, discriminated by country


Occupational health and safety





G4-LA5 Percentage of employees represented on formal safety and health committees


G4-LA6 Injury, illness, and lost days rates Stakeholders (page 34)


Accident statistics are recorded for third-parties. The company does not analyze the other criteria.

G4-LA7 Workers with high incidence or high risk of diseases related to their occupation


G4-LA8 Health and safety aspects covered in formal agreements with trade unions


training and education




No

G4-LA9 Average hours training per year Stakeholders (page 29) No

G4-LA10 Programs for skills management and lifelong learning


G4-LA11 Percentage of employees receiving performance reviews


diversity and equal opportunity




The company fulfilled 4.8% of its quota for hiring disabled people and has been working on reaching the target of 5%. These numbers are monitored continually by the Human and Organizational Development area.

No

G4-LA12 Composition of governance bodies and breakdown of employees by functional category

Stakeholders (pages 25 and 27) No



Equal remuneration between women and men




No

G4-LA13 Ratio of women’s basic salary to men’s by functional category and relevant units


screening of supplier labor practices





G4-LA14 Percentage of new suppliers screened using labor practice criteria


The percentage of suppliers contacted in 2014 based on labor practice criteria is not available. This information will be reported in the next reporting cycle.

G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain


In 2014, 157 suppliers who were being considered for hiring were screened based on the approval criteria. All of them receive the manual with the rules of the program and the code of conduct setting forth the practices Brasil Kirim considers suitable for a supplier to become a business partner. There were no cases in which it was necessary to make an improvement agreement (action plan) related to the supplier’s socio-environmental performance; five suppliers were disqualified because of product quality or the inability to guarantee information security. In 2015, the Supplier Management area will be responsible for ensuring that approved companies have established, documented social and environmental management systems implanted, with certifications and subject to audit.Through quarterly monitoring, if necessary the Supplier Management area will request action plans to implant improvements. If suppliers do not follow the rules or meet requirements, contracts may be terminated. The company does not have a formal process for assessing labor practice impacts in the supplier chain. In 2015, the Code of Conduct and the Supplier’s Manual will be available for public consultation on the Brasil Kirin website.

No



labor practice grievance mechanisms



Strategy /Speak to Brasil Kirin (page 23)

The Brasil Kirin Conduct and Ethics Channel is the formal mechanism for the receipt of grievances related to labor practices. This is managed by an independent audit company. All incidents are addressed internally


G4-LA16 Number of grievances about labor practices filed through formal mechanism

All the 90 complaints received via the “Speak to Brasil Kirin” channel were resolved during the period.

Only one complaint related to labor practices was received in 2013 and resolved in 2014.

No

social category –human rights

non discrimination




No

G4-HR3 Total number of incidents of discrimination and corrective measures taken


freedom of association and collective bargaining



The company does not have formal practices, policies and procedures to promote freedom of association since it does not believe that the operations violate or put employees’ freedom of association and collective bargaining at risk.

No

G4-HR4 Degree of application of right to free association and operations and suppliers identified as at risk


It is believed that the operations do not violate or put at risk the employees’ freedom of association and collective bargaining at risk. For this reason there are no specific measures to promote free association.

No

Child labor



The company intends to carry out an assessment of human rights impacts in the medium term. No risks of child labor or young persons exposed to hazardous conditions were identified in company-owned operations.

G4-HR5 Operations and suppliers identified as presenting significant risk of incidents of child labor and measures taken

forced or slave labor





The company intends to carry out an assessment of human rights impacts in the medium term.

G4-HR6 Operations and suppliers identified as presenting significant risk of incidents of forced or slave labor and measures taken

assessment




No

G4-HR9 Total number and percentage of operations that have been subject to human rights reviews


The percentage of suppliers contracted based on human rights related criteria in 2014 is not available. This information will be reported in the next reporting cycle.

supplier human rights assessment

G4-DMA Management approach Stakeholders (page 24)


G4-HR10 Percentage of new suppliers screened using human rights criteria



No

The total number and the percentage of suppliers contracted based on human rights related criteria in 2014 is not available. This information will be reported in the next reporting cycle.

G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and measures taken


In 2014, 157 suppliers who were being considered for hiring were screened based on the approval criteria. All of them receive the manual with the rules of the program and the code of conduct setting forth the practices Brasil Kirim considers suitable for a supplier to become a business partner. There were no cases in which it was necessary to make an improvement agreement (action plan) related to the supplier’s socio-environmental performance; five suppliers were disqualified because of product quality or the inability to guarantee information security. In 2015, the Supplier Management area will be responsible for ensuring that approved companies have established, documented social and environmental management systems implanted, with certifications and subject to audit.Through quarterly monitoring, if necessary the Supplier Management area will request action plans to implant improvements. If suppliers do not follow the rules or meet requirements, contracts may be terminated. The company does not have a formal process for assessing human rights impacts in the supplier chain. In 2015, the Code of Conduct and the Supplier’s Manual will be available for public consultation on the Brasil Kirin website.

No



Human rights grievance mechanisms



Strategy/Speak to Brasil Kirin (page 23)



G4-HR12 Number of grievances about human rights impacts filed, addressed and resolved



social category – society

local communities



Stakeholders / Committee for Incentive Projects (page 43)

No

G4-SO1 Percentage of operations with implemented local community engagement, impact assessment and development programs

Stakeholders (pages 41 and 42)Brasil Kirin has intensified its engagement activities in the communities in which it operates, always in conjunction with local authorities or NGOs. At the moment, the company does not have a formal process to measure, mitigate or assess social or gender impacts on communities. The company monitors environmental impacts in the areas around its units and implants measures to mitigate them.

No

G4-SO2 Operations with significant actual and potential negative impacts on local communities

The Brasil Kirin manufacturing units are installed in cities with up to 200 thousand inhabitants. Its production and distribution activities do not cause direct negative impacts on the surrounding community. They seek to generate a positive impact, by prioritizing local community members for jobs in the operations, which promotes development and generates income in the area.

No

anti-corruption

G4-DMA Management approach Strategy (page 20) No

G4-SO3 Units assessed for risks related to corruption

Strategy (pages 22 and 23)

The anti-corruption law is a relevant topic for Brasil Kirin, this is why we are reporting indicators for the question, even though it is not classified as material.

No

G4-SO4 Percentage of employees trained in anti-corruption policies and procedures

Strategy (page 22)


No



G4-SO5 Confirmed incidents of corruption and measures taken

Strategy (page 22)


No

public policies

G4-DMA Management approachBrasil Kirin works with industry associations in public policy-related matters.

No

G4-SO6 Total amount of contributions to political parties and politicians, discriminated by country and recipient/beneficiary

The estimated amounts of financial contributions made to political parties by the company in 2014 total R$ 4.96 million. The breakdown among parties is as follows:

paRtY R$ (in thousands of reais)

PMDB 1,095

PSDB 995

PT 720

PSB 490

PSD 380

PTB 330

DEM 320

PDT 200

PC do B 150

PR 100

PEN 70

PP 40

PPS 25

PSC 25

SD 20

Total 4.960

No

assessment of supplier impacts on society





G4-SO9 Percentage of new suppliers screened using criteria for impacts on society


The percentage of suppliers contracted based on criteria related to impacts on society in 2014 is not available. This information will be reported in the next reporting cycle.



G4-SO10 Significant actual or potential negative impacts of supply chain on society and measures taken


In 2014, 157 suppliers who were being considered for hiring were screened based on the approval criteria. All of them receive the manual with the rules of the program and the code of conduct setting forth the practices Brasil Kirim considers suitable for a supplier to become a business partner. There were no cases in which it was necessary to make an improvement agreement (action plan) related to the supplier’s socio-environmental performance; five suppliers were disqualified because of product quality or the inability to guarantee information security. In 2015, the Supplier Management area will be responsible for ensuring that approved companies have established, documented social and environmental management systems implanted, with certifications and subject to audit.Through quarterly monitoring, if necessary the Supplier Management area will request action plans to implant improvements. If suppliers do not follow the rules or meet requirements, contracts may be terminated. The company does not have a formal process for assessing the supplier chain’s impacts on society. In 2015, the Code of Conduct and the Supplier’s Manual will be available for public consultation on the Brasil Kirin website.

No

Grievance mechanisms for impacts on society


Stakeholders / Communities (page 41)

Even though this aspect is not classified as material, the company decided to report on the G4-SO11 indicator.


G4-SO11 Grievances about impacts on society filed, addressed and resolved through formal mechanisms


There were no complaints or grievances about impacts on the community.

No

Healthy food at an affordable price




Our products and our brands / Innovation with flavor (page 16)

No



social category – product responsibility

Customer health and safety


Governance of sustainability /Table correlating material topics, GRI aspects and impacts inside and outside Brasil Kirin (page 12)



No

G4-PR1 Assessment of health and safety impacts during the product and service life cycle


G4-PR2 Non-compliance related to product and service impacts

There were no cases of non-compliance related to health and safety impacts during product and service life cycles.

No

FP5 Percentage of production volume manufactured in operating units certified by an independent organization in compliance with the standards of an internationally recognized food safety management system

In the 13 factories there is a quality management system which is compliant with Brazilian and international legislation. The factory units are not currently certified in accordance with internationally recognized standards.

No

FP6 Percentage of total sales volume of consumer products, by product category, that have low levels of saturated and trans fats, sodium and added sugars

Our products and our brands (page 16) No

FP7 Percentage of total sales volume of consumer products, by product category, that contain a higher content of nutritious ingredients, such as fibers, vitamins, minerals, phytochemicals or functional food additives

Our products and our brands (page 16)

The improvements made to products in the portfolio are based on evaluations of market trends. In 2014, 7.09 % of the beverages sold had added vitamins and / or fibers

No

product and service labeling




Stakeholders

The company did not carry out a formal impact identification process. There were no non-conformances related to product registration or product composition.


G4-PR3 Type of product and service information required by the organization’s labeling procedures


G4-PR4 Non-compliance related to product and service labeling


G4-PR5 Results of surveys measuring customer satisfaction




Marketing communication




All advertising is evaluated by the Legal area and follows the recommendations of the brand marketing teams


G4-PR6 Sales of banned or disputed products Our products and our brands (19) No

G4-PR7 Cases of non-compliance related to product and service communication


There were no fines for the cases reported for this indicator.

No

Customer privacy





G4-PR8 Total of substantiated complaints regarding breaches of customer privacy and losses of customer data



Overall coordination Corporate Affairs and Sustainability area

CollaborationCommercial; Human and Organizational Development (DHO); Finance / Control / IT; Tax Management; Marketing and Operations areas.

GRI consulting, editorial coordination and design Report Sustentabilidade

Team: Ana Souza (project and relationship management), Sabrina Queiroz (GRI consulting), Patricia Berton (editing), Daniele Aronque (copy), Guilherme Falcão (graphic design), Gustavo Inafuku (layout), Juliana Kaminaga (assistance in design) and Letícia Luppi (photo editing)

assuranceBSD Consulting

RevisionAssertiva Produções Editoriais

English translation Raymond Maddock

photographyArquivo Brasil Kirin/Isabela Senatori and João Chimenton/Edu Leporo Alexandre Macedo (Sosma) Adriana Couto Celso Congilio

font familyMyriad Pro, Robert Slimbach & Carol Twombly, 1992

[email protected]

the following people contributed to this reportAbednego dos Santos RosaAby Modesto do NascimentoAdriana Alves Corrêa Ribeiro do CoutoAdriana Bonis GerbachAdriano Claudino de FreitasAlbertina Rodrigues BuenoAlessandra AndradeAlexandre Moreno Sanchez* (D.E)Amanda GaldiniAmérico Garbuio Jr. (D.E)Ana Clarissa Palagi Del Grossi GimenesAna Paula Piloto Cardoso BarbosaAndre Luiz TirapelleAndrea BregolaAngelo Antônio Rodrigues DiasAnna Paula Macario CoubassierAriane Buzo AndreetaAriane Felippe Padoveze

Augusto BettinelliBruno Eduardo B. de AraújoBruno Iglesias ReisCamila Chagas NavarroCarem AlcântaraCarlos Alberto De OliveiraCarlos Alberto MartineliCelso Ricardo Marciniuk (D.E)Claudia Pessoa*Claudio Fontes* (D.E)Claudio J. BortolozzoCristina AraujoDamasco Domingos da SilvaDaniel Neves GuardieiroDaniel Souza CostaDanielly Marques H. SalvadorDanilo Ruwin F. GawendoDebora Marchiori IensenDiego Lima Campos BernardelliDouglas Costa (D.E)Eder Rodrigo da SilvaEduardo AraújoEduardo Gomes de Abreu NetoEduardo LeoncioEduardo Tadeu RosarioEliana Cristina Silva Gaspar*Ellen Dayane da SilvaErica Aparecida ZaniniErica Mitsue IkunoFabiane Rossi TigreFabio Luis VanussoFaustino IglesiasFernanda AranhaFernando EngelbergFernando SchoedlerFlavia Caroline SarambelliFlavio PedroniGabriela GomesGabriela InfangerGino Di Domenico (D.E)Graziela Succi dos Santos Mucelin*Guilherme BrunsGuilherme Henrique AnselmiGuilherme Luis CecconHamilton Luiz GuidoHomero Guercia*Joana Spengler CoelhoJoão GardenalJoao Victor Martins TapparoJosé Carlos Queiroz KloskeJosé Domingos Francischinelli (D.E)José Ivan Vieira de LimaJosé Roberto Aparecido de OliveiraJosiane Fama RodriguesJuliana ArrudaJuliana Nunes* (D.E)Larissa Andreoni MedeirosLauro José Giacheti*Leandro Araújo

Credits

Leandro Drigo AmbielLeandro GleriaLeonardo Zatta GayerLorenzzo SpilotroLuciana Di LeloLucio Esteves NetoLuis BaraçalLygia Fernanda ArchangeloMarcello Rafael dos Santos Marcelo Antonio Padua OliveiraMarcelo Cunha TrezMarcelo Eduardo PolonioMárcio Quartaroli*Marcos Alexandre PitaMarcos V. Miranda RossiMariana de Camargo BarrosMariana Helena LemesMariana W. PenariolliMatheus de Oliveira VieiraMayara de Fátima BácaroMichele PestanaNatalia Buchwitz*Noemi ShigetomiPaula LarioPaulo Henrique Pentian SilveiraPedro NambaRaphael do Nascimento OliveiraRenata B. S. Fornari*Renato CocchiaRicardo José Di PietroRoberto Martin*Robson Dias BexigaRodrigo FavarettoRonaldo de Andrade JuniorRubens MattosSandro Norberto do NascimentoSilvia Almeida de AndradeSilvia Regina Gonçalves Pereira*Susan M. Cavalin BritoTalita Cristina WilkeTalita S. AndradeTassia Pontes GamaTayana Bertini AnieriTaynara Cristina de OliveiraThiago AndriettaThiago MonteiroTiago S. LuiToninho Di SierviValdicir do PradoValdir Scavacini*Vanessa Cristina SchiavinatoVezio Geracino Della Tonia Jr.Victor Carrilho C. TerrazVictor Fernandes ChimenezViviane Cristina Braga MuhlstedtViviane Lopes CaronWagner da SilvaWarley Militão

(D.E) Executive Board * Sustainability Committee


mailto:[email protected]

Documents

2014 Sustainability Report - Relato Web · association CervBrasil (Associação Brasileira da Indústria da Cerveja), higher interest rates should impact products dependent on credit,