Supplier social and environmental performance

Strengthened and resilient value chain in its most vulnerable parts, composed of suppliers who make use of responsible social and environmental practices to ensure good practices throughout the productive life cycle.

2030 Goal

KSDGs 2030

Percentage of critical suppliers included in the Sustainable Supply Chain Management Program
2020Goal
43%100%

The 2020 baseline (KSDGs’ launch date) considers about 20% of suppliers covered per year, since the first wave of the Ecovadis program.

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Supply chain information

Klabin’s supply chain profile

The suppliers are classified as providers of forestry inputs, commodities and specialty chemicals for pulp and paper production; fuel, power and packaging for finished products; provision of logistics services, material management, equipment storage and rental; supply of auxiliary production material, uniforms and Personal Protective Equipment (PPE), bearings, pumps; provision of cleaning, security and maintenance services, among other positions.

2020
Number of active suppliers 7.851
Number of active suppliers by region
North196
Northeast646
Midwest51
Southeast3,782
South3,176
Total amount spent on suppliersBRL 9,01 billion

A total of 7,851 suppliers with a relationship with Supply were considered, excluding orders created by areas other than Procurement. Of these, 306 are exclusive suppliers of the Puma II project.

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Percentage of purchases from local suppliers

State202020192018
Amazonas64.70%71.40%38.7%
Bahia44.10%37.80%56.6%
Minas Gerais49.10%55.50%45.9%
Paraná62.00%66.80%65.0%
Pernambuco50.10%37.40%50.6%
Santa Catarina37.00%58.30%56.0%
São Paulo85.30%78.10%87.6%
Rio Grande do Sul48.30%60.00%14.7%
Average58.70%64.70%64.3%
  • The percentage of purchases from local suppliers considers the total number of suppliers monitored by the Criticality and Sustainability Matrix.
    ** Purchases made with suppliers headquartered in the same state as Klabin’s operation are considered local.
    *** The variations are due to commercial negotiations and differentials in price and volume conditions.
    The reduction in the overall average was due to an adjustment in control, in terms of 2020 spend, by removing the paper suppliers from the Merchandise Group and Klabin itself from the list.
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Social and environmental impacts on the supply chain

Percentage of new suppliers selected based on environmental criteria

 Unit20202019
Number of new suppliers       136       147
Number of new suppliers selected based on environmental criteria       136       147
Percentage of suppliers selected based on environmental criteria%100%100%

*Agreements considered include new agreements signed in the year in which environmental clauses are considered.

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Among the 96 invited suppliers, we had a response rate of 88% – 84 suppliers who responded and received an assessment through the EcoVadis platform. Of these, 22 suppliers obtained scores between 35-20 points for environmental impacts, which means they were considered to be of medium risk. Among the three suppliers assessed as high risk (scores below 20 points), two demonstrated insufficient practices related to environmental issues such as environmental impact management and policies; energy, water and waste management and sustainable procurement. They were subjected to audits and monitoring of the development of improvement action plans.

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Percentage of new suppliers selected based on social criteria

 Unit20202019
Number of new suppliers       136       147
Number of new suppliers selected based on social criteria       136       147
Percentage of suppliers selected based on social criteria%100%100%

*Agreements considered include new agreements signed in the year in which environmental clauses are considered.

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Negative social impacts on the supply chain 

 Unid20202019
Number of suppliers assessed regarding social impacts    84    86
Number of suppliers identified as causing actual and potential negative social impacts    10 NA
Percentage of suppliers identified as causing actual and potential negative social impacts, with which improvement agreements were signed as a result of the assessment conducted%12%NA

Among the 96 invited suppliers, we had a response rate of 88% – 84 suppliers who responded and received an assessment through the EcoVadis platform. Of these, 10 suppliers obtained scores between 35-20 points for social impacts, which means they were considered to be of medium risk. The three suppliers assessed as high risk (scores below 20 points) demonstrated insufficient practices related to social issues such as labor relations, health and safety, human rights and sustainable procurement and were subjected to audits and monitoring of the development of improvement action plans. 

In 2020, we also followed up on the action plans of the 41 companies assessed in 2019 (1st wave) that scored below 35 points (considered as medium and high risk companies by the methodology).

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Termination of business relationships identified as causing significant negative social and environmental impacts

There was no contractual termination related to social and environmental impacts in 2020.

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Management of the topic

Klabin’s Sustainable Supply Chain Management aims to ensure that suppliers implement and follow good social and environmental practices and ensure appropriate management of potential risks present in the activities conducted.

Supply chain management is conducted using the EcoVadis methodology, which assesses suppliers on the topics of Environment, Labor and Human Rights, Ethics and Sustainable Purchasing. Through this collaborative platform, it is possible to measure the quality of a company’s Corporate Social Responsibility management system through its policies, actions and results.

Within the methodology, suppliers are graded from 0 to 100 and the following criteria are considered: company size, country context, type of the product and potential for positive or negative visibility through external assessments. Assessment levels demonstrate suppliers’ level of maturity, as follows:
Between 0 and 20 points: high risk
Between 20 and 35 points: medium risk
Between 36 and 55 points: engaged companies
Between 56 and 75 points: advanced companies
Above 75 points: reference companies

The relationship with each level of suppliers focuses on those that score below 35, so that, rather than being punished, they receive support to develop the four pillars and increase their level of engagement in dealing with all issues. Thus, in the medium and long terms, the idea is to enhance the assessment criteria, based on the suppliers’ improved performances.

The criticality criteria in the selection of suppliers refer to representative contracts for: high value, representativeness of the business towers (Forestry, Pulp and Paper and Packaging), recurrence greater than 6 times (in different months in the year) and complexity to replace the supply. Critical suppliers have been assessed using this methodology since 2019, which aims to cover 100% of them by 2030.

In 2020, we conducted the 2nd wave of assessments for the Corporate Social Responsibility Program (RSE) in the supply chain, using the EcoVadis methodology. We considered approximately 400 critical suppliers and selected 96 suppliers to participate in this second stage. At the end of the process, we obtained an adherence of 88% of the selected suppliers, totaling 84 companies assessed in the topics of Environment, Labor and Human Rights, Ethics and Sustainable Purchasing. In 2021, we will continue with the 3rd wave of assessments, to which 103 suppliers were invited, and also with the reassessment of critical suppliers with a score lower than the established average. Learn more

In order to support and stimulate suppliers with insufficient scores, we gave lectures and support for their evolution, thus building the cyclical management of the program, with beginning (assessment), middle (monitoring) and end (reevaluation).

In parallel with the assessment through the EcoVadis platform, Klabin remains a signatory to the National Pact to Eradicate Slave Labor and is focused on evaluating its active and inactive Supplier base several times a year, with the entries from the Employers Registry who subjected workers to slave labor (popularly known as the “Black List of Slave Labor”). Thus, in case of any mention on this list, the following actions are taken by the Company: identification of the supplier and service provided (date, location, among other data) and formal notification to the party that requires clarification and declaration on the corrective measures implemented – with suggestions for improvement, if necessary. From this phase, it is evaluated whether the supplier will be monitored or if the service will be interrupted.

For forestry suppliers, Klabin has also been following and complying with the principles of the FSC® certification (FSC-C022516) – Forest Stewardship Council® since 1998, establishing a solid and transparent process for tracing raw materials to ensure that there are no violations of environmental, labor and human rights legislation throughout the supply chain. If an audit process identifies cases of non-compliance, supply is suspended until the issue is resolved and appropriate measures are taken.

The main objective of forest certification is to guarantee the sustainable production and consumption of wood, strengthening the productive capacities of rural owners for responsible forest management. This objective is linked to the global supply chain strategy and encourages rural owners to be certified by the FSC® (FSC-C022516) – Forest Stewardship Council®, achieving solid and transparent processes for tracking raw materials to ensure that there are no breaches of environmental, labor and human rights legislation along the supply chain.

21.7% of critical suppliers are evaluated annually, while 41.1% of them are evaluated for 3 years, totaling 62.8% of critical suppliers evaluated so far. Among them, all those who scored below the expected average have action plans whose results are monitored every 3 years.

In 2021, 26 leaders (from consultants to managers, which represent 4% of them) who are responsible for addressing the theme in the company managed to develop variable compensation tied to the company’s Supplier social and environmental performance targets.