Board Election and Nomination Process

The election of the members of the Company's Board of Directors will take place through the slate system. In the election by slate, each shareholder may only vote for one slate, with the candidates from the slate receiving the highest number of votes being declared elected. Alternatively, the election may take place through the multiple vote procedure, if shareholders representing together 5% (five percent) of the Company's voting capital, at least, request its adoption, according to article 141 of Law 6,404/76 and CVM Resolution No. 70/22. In this case, the election will be carried out by a candidate and each share will be assigned as many votes as there are seats to be filled on the Board of Directors through the multiple-vote procedure, each shareholder being able to freely allocate their votes among the candidates, being elected the candidates who receive the highest number of votes.

Board Performance Review

In the 2023 fiscal year, the Board of Directors conducted a self-assessment process, and in the 2021 fiscal year, it conducted an external evaluation, carried out by an independent consulting firm specialized in the subject. The self-assessment and external evaluation process included checks on the structure in which the Board of Directors operates, the dynamics of meetings and interaction among directors, strategy, duty of care, human capital, monitoring of Financial Statements, and risks and compliance.

Furthermore, the methodology adopted for the external consulting work consisted of document analysis, questionnaires, and interviews with all members of the Board of Directors and key personnel from other governance and management bodies, consolidating the information obtained to identify strengths and opportunities for improvement.

Additionally, the self-assessment of advisory committees takes into account various dimensions, including the dynamics of meetings, member development, environment, posture, and attendance at meetings.

The results of the external evaluations are examined in light of statutory, regulatory, and internal rules, best practices, and benchmarks, as well as the Company's strategic objectives and business. Based on the improvement opportunities identified throughout the evaluation process and the recommendations of the external consultancy, the evaluated bodies develop and implement action plans, within their respective competencies, with the support of the various bodies and managers of the Company.

Information was used following the reference form dated 05/29/24.

Compensation Policy and compensation-setting process

 

The purpose of the Company’s compensation policies includes: 

 

• Aligning the interests of employees with the Company’s and the shareholders’ strategy; 
• Enabling our employees’ compensation to remain competitive and attractive compared to the market at large;
• Recognizing high-performing Klabin employees, fostering a meritocratic culture, and attracting and retaining talent for the Company;
• Causing executive compensation to reflect our short- and long-term results, in addition to their individual performance.

The Company’s fixed and variable compensation policies make no distinction in terms of gender, race, religion, or any other aspects not associated with individual or corporate performance. In addition, executives operate under goals associated with KODS (Klabin Sustainable Development Goals), that is, relative to one of the four proposed theme axes (renewable future, sustainable economy, prosperity for people, and technology & innovation). 

For the CEO’s compensation, the Company sets relative financial metrics and financial return, as shown below: 

Financial return: comparison of the Company’s annual average ROIC (Return on Invested Capital) and WACC (Weighted Average Cost of Capital). 

Relative financial metric: aligns compensation with the market performance of shares. Until 2022, this took place using TSR (Total Shareholder Return) and Ke (Cost of equity). The 2023 plan adopted the relative position between the Company’s TSR (Total Shareholder Return) and the TSR for the Peer Group of companies. 

Deferral of the CEO’s Short-Term Compensation Bonus

Concerning the breakdown of the CEO’s variable compensation, the following applies: : 

• The CEO has the option to defer up to 50% of their short-term compensation into share purchases. 
• The longest performance period that the executive compensation plan covers is five years, and the vesting period for variable compensation is five years as well.  

 

Required shareholdings:

Starting in 2022, a Minimum Stock Ownership requirement was established for Statutory Executive Directors and Non-Statutory Executives. To comply with the program, the CEO must allocate 30 monthly fees (based on their earnings at the end of each fiscal year) for the purchase of the Company's shares and keep them in their possession (at a ratio of 2.50 concerning the annual salary). For Statutory and Non-Statutory Executive Directors, the amount to be allocated and kept in their possession is 18 monthly fees/salaries (at a ratio of 1.50 about the annual salary), as applicable.

 

 

 

 

Sustainability Governance Structure

 

Materiality

Klabin reviewed its entire materiality considering the United Nations Sustainable Development Goals (SDGs). The process of identifying material topics involved the following steps: (1) Identification of potential material topics; (2) Reprioritization of themes; (3) Analysis of results; (4) Validation from senior leadership.

1. Identification of potentially material topics

The identification of potential material topics involved consultations with more than 30 corporate management and business unit leaders. This process allowed for the assessment of risks and impacts (both positive and negative) associated with activities conducted in Klabin's four business units (forestry, paper, cellulose, and packaging). During this stage, risk and impact matrices were consulted, as well as processes used for engaging with stakeholders (e.g., mechanisms for complaints and feedback), and external references (secondary sources) of impacts related to the company's sector of operation (benchmarking with other companies, ratings, indices, etc.). 

2. Evaluation of impact relevance

The risks and impacts identified in the previous stage were grouped based on thematic convergence and analyzed considering the probability of occurrence and severity of the generated impact. In line with the principles of dual materiality, all impacts were assessed considering their influence on the company's value generation, including the stakeholders affected by financial losses. 

During the impact assessment, consultations were conducted with groups of company stakeholders, especially customers and suppliers. This process supported the definition of prioritized themes.

3. Analysis of results and prioritization of themes

A total of 23 priority material themes related to the environment, society, and governance were defined, considering the challenges of the company's expansion plan while addressing urgent global challenges. 

These themes guided the development of the Klabin Sustainable Development Objectives (KODS), which are materialized through short, medium, and long-term targets until 2030. These objectives represent the values that the company must deliver to society and the planet, prioritizing 14 out of the 17 objectives established in the global 2030 Agenda. 

 

Klabin agenda for sustainable development

The 23 material themes have been prioritized and are listed under the following structural axes:

BUILDING A RENEWABLE FUTURE	CONTRIBUTION TO A SUSTAINABLE ECONOMY	PROSPERITY OF PEOPLE	TECNOLOGY AND INNOVATION
Wood avaliability	Production and logistics	Human capital development	Mutiple uses of wood
Forest yeld	Forest certification	Management and engagement of professionals	Innovation management
Energy Use	Ethical conduct and integrity	Klabin's culture	Information security
Water Use	Risk management	Diversity
Waste management	Local development and impacts on communities	Occupacional health and safety
Climate change	Supplier social and enviromental performance
	Costumers abd products
	Biodiversity

 

4. KODS Governance 

Klabin's 2030 Agenda is validated by Klabin's Fixed Sustainability Committee, the Executive Board, and the Board of Directors. The meeting agenda for both the Committee and the Fixed Sustainability Commission is defined based on the risk and urgency of the theme and the progress of the commitment. These meetings occur at least bimonthly. 

The alignment analysis of all new projects within the company is systematically conducted considering Klabin's sustainable development objectives. This includes internal audit processes and the periodic update of the company's Risk Matrix.

Starting in 2023, the individual goals of all Klabin executives include a Sustainability Index. The index comprises a set of goals related to Klabin's 2030 sustainable development agenda (KODS), which is selected at the beginning of each year based on the main challenges for the progress and risks of KODS during that period. This practice is mandatory for the company's directors and managers and encompasses safety, diversity, community relations, and environmental indicators.

For all employees at every level of the company, the long-term commitment to sustainability is extended by cascading the executive goals to teams in the short term. Additionally, employees can participate in the ILP Para Todos program, which enables them to acquire shares in the company. For more information, please refer to the Incentive Programs section.

Materiality Issues and Metrics for Enterprise Value Creation

Material Issue	Climate Change	Occupational Health and Safety	Biodiversity
Business case	Climate change management is part of Klabin's strategy and is integrated into the agenda of risks and opportunities for the Company's business and its stakeholders. Among the main guiding principles are our Sustainability Policy and the Guidelines for the Management of Climate Change - Mitigation and Adaptation. In addition, we are committed to the Business Ambition for 1.5° C, a UN global campaign, which aims to reduce emissions considering science and neutralization of emissions by 2050. The climate risks and opportunities are inserted in the company's management and decision-making processes, especially those related to forest management, due to their relevance to the business. The forestry research area - Efficiency and Ecophysiology Department - monitors possible future climate scenarios, developing data modeling related to climate parameters and assessing the impact on planted forests. Among the potential risks mapped is, for example, the rise in temperature in the region where Klabin's main forestry area is located.	The Corporate Life Safety Policy was launched in 2022 and aims to nurture a just culture that looks after the well-being of employees and business strategy, turning failures into learning that drives safer processes and activities throughout Klabin. Considered an extremely relevant theme for the company because it represents a risk directly associated with the continuity of the company's operations, productivity, and the quality of life of our employees and third parties, the theme is directly linked to the business strategy and is present in long-term goals and in the variable compensation of the company's executives. (Occupational Health and Safety Management)	Because of its forest-based business, Klabin is a pioneer in the implementation of mosaic planting: a system which mixes areas of preserved native forests, which correspond to almost half of our forest area, with planted pine and eucalyptus forests of different ages. Since the quality of planted forests also depends on the quality of native forests and their natural resources, Biodiversity is a material issue for the company, and has the largest set of 2030 targets within Klabin's Agenda for Sustainable Development. The loss of biodiversity threatens the capacity of ecosystems to provide resources and services (e.g. dispersal of pollen and seeds, natural plague control, water and climate regulation, soil and nutrient conservation etc.) that are essential for sustaining Klabin's plantations high yields.
Business impact	Risks	Risks	Risks
Business strategies	The Company has a history of investments and adoption of low carbon technologies which has allowed that in recent years (2003 - 2020) there has been a 64%* drop in emissions of CO2 equivalent per ton of product generated. It is reinforced that among Klabin's Objectives for Sustainable Development (KODS) is the commitment to develop carbon reduction targets based on science. This means that Klabin's carbon reduction targets are challenging and have been approved by the Science Based Target initiative (SBTi), aligned with the global challenge of limiting the average temperature increase to 1.5°C. In the line of adaptation or climate risks/opportunities, the Company follows the recommendations of the Task Force on Climate-Related Financial Disclosure. In 2020, Klabin became a "TCFD Supporter", having implemented and improved actions in the pillars of governance, strategy, risk management and targets/metrics.	The management of this theme is foreseen in the Occupational Health and Safety Management System and is structured in 3 pillars:  1. installation: Ensuring the safety and reliability of equipment. Improvement and maintenance of the work environment offered to our professionals.  2. Method: Continuously improve the way we treat safety in our routine. Keep a critical eye on our accident prevention and mitigation procedures by creating and reviewing policies, guidelines and requirements; and 3. People: To value good practices and encourage our employees to take care of each other. Empower them regarding norms and procedures and bring the leadership closer to the routine.   The Occupational Health and Safety Management System is guided by ISO 45001 in all manufacturing and forest units, with guidelines and procedures focused on loss prevention and continuous improvement of processes to preserve people's lives, health, and physical integrity.	Klabin has been assessing the impacts of this risk with the Continuous Monitoring Program for Fauna and Flora. In doing so, it is possible to understand the behavior of the species and adopt prevention and mitigation measures such as initiatives for reducing road accidents, rewilding actions, and scientific research. Klabin has a biodiversity study center within its Ecological Park, which aims to monitor and re-establish the quality levels of forests through the restoration of wildlife.  It is also responsible for bringing technological solutions to speed and scale the Biodiversity Monitoring program, which includes species tracking. Moreover, one of this topic’s long-term goals is linked to a Sustainability-Linked Bond, which increases the company’s commitment to its 2030 Agenda and its financial and strategic roadmap.  In 2022, Klabin launched its Biodiversity Plan which is divided into 6 programs aimed at supporting the company in achieving Net Positive Impact on Biodiversity in an integrated manner. (Climate Transition Plan)
Long-term target	As approved by the Science-based Targets Initiative, Klabin’s Climate Change targets are:  i. Reduce scope 1 and 2 GHG emissions by 25% per ton of pulp, paper and packaging by 2025, and 49% per ton of pulp, paper and packaging by 2035.   ii. Net capture of 45 million tons of CO₂eq from the atmosphere between 2020 and 2030.  In 2023, the Company updated and submitted new targets to the SBTi validation, considering the 1.5°C scenario and expanding the inclusion of Scope 3 emissions, including new categories based on their relevance to the business. They consist of reducing absolute scope 1, 2 and 3 emissions in 42% by 2030 and in 90% by 2050 (net-zero goal). It will substitute these targets above as soon as the SBTi approves it. (Klabin Climate Transition Plan)	Lost time accident frequency rate (direct and indirected) below 1. Please refer to other long-term targets (Goals 2030)	Our goals/targets until 2030 are: (i) to reintroduce two extinct species and reinforce four other threatened species in forests by 2030; (ii) to donate 1 million native seedlings to partner areas; (iii) to have at least 6 research partnerships per year; (iv) to maintain or increase the number of native species dependent on forests; (v) to map 100% of the hotspots where fauna are run over and conduct actions to reduce occurrences. Klabin Biodiversity Plan is on track to soon disclose new targets related to its programs that address the Company’s Net Positive Impact approach (2040).
Target year	2035	2030	2030
Progress	14.3% of reduction (Climate Goals)	Below baseline (Health and Safety)	21% - Target V (Biodiversity Goals)
Executive compensation	As Klabin’s GHG reduction targets are part of its 2030 agenda, all company managers, from coordination to the executive board, have been committed to short-term targets in their compensation components. 100% of executive directors currently have a variable compensation tied to a Sustainability Index, which includes KPIs for water, residues and emissions management. Apart from them, line managers who are responsible for addressing the theme in the company (23%) also managed to develop variable compensation tied to the company’s Climate Change target. (Undertaking goals linked to the topic by executives)	As Klabin’s Occupational health and safety targets are part of its 2030 Agenda, all company managers, from coordination to the executive board, have been committed to the short-term targets, which will lead to the 2030 goals achievement, in their remuneration components. 100% of directors currently have a variable compensation tied to Health and Safety performance. Apart from them, 62% of line managers also managed to develop variable compensation tied to the company’s specific target. (Undertaking goals linked to the topic by executives)	As Klabin’s biodiversity targets are part of its 2030 agenda, all company managers, from coordination to the executive board, have been committed to the short-term targets, which will lead to the 2030 goals achievement, in their remuneration components. 100% of directors (+ 21%-line managers who are responsible for achieving the goal) currently have a variable compensation tied to Biodiversity performance.  (Undertaking goals linked to the topic by executives)

Material Issues and Metrics for External Stakeholders

Material Issue for External Stakeholders	Forest Certification, Water, Climate Change	Local Development
	Categories: Climate Transition and Physical Risks	Category: Community Impact and Development
Cause of the Impact	Operations; Supply chain (> 50% of business activity)	Operations (> 50% of business activity)
External stakeholder(s)/ impact area(s) evaluated	Society; Supply chain	Society
Topic relevance on external stakeholders	Both positive and negative: The Tragedy of Commons considers impacts arising from the uncoordinated actions of economic actors around a common element that can scarce if not managed collectively. The balance that Klabin must strike between forestry and  Water-intensive industrial operations can impact not only water matters, land use and local dynamics. Since elements such as water, biodiversity, and land use are connected to a common issue, Klabin has defined commitments to these externalities and a management system focused on territorial water security by prioritizing: Supplier certification: the sharing of socio-environmental skills for effective landscape planning (Legal Woods program), aiming at conserving natural resources and productivity while ensuring sustainably forest management.  Hydrosolidarity management, which guides the Forestry water management, to maintain 60% of standing forests for the conservation of watersheds and water availability, both quantitatively and qualitatively.	Positive: The presence of Klabin, especially in forest territories with a paper industry, affects the local dynamics, while the company and its local suppliers rely on a good relationship and a politically robust society to gain social acceptance and obtain social license to operate. Municipalities with strong social fabric can contribute more effectively to sustainable development, and governments with strengthened capacities rely on collaborative planning to guide their progress. In this relationship, the company's positive influence on social dynamics safeguards local quality of life and social relationships.  Klabin maintains an economic, social, and environmental agenda with the communities where it operates, encompassing projects related to education and workforce training, support for family farming, regional solid waste management, and a program to assist public management planning. Through the Program for Support to Public Management, Klabin works to promote significant advancements in municipalities prioritized for the company's operations (see criteria below) by providing training and consulting services to enhance their planning and the utilization of public resources generated from taxes related to the company's activities. The objective of this initiative is to foster participative public management in municipalities that demonstrate below-average development indicators compared to similar municipalities.
Output Metric	Percentage of third-party areas covered by Matas Legais Program; Percentage of wood suppliers certified by FSC or similar methodology; Percentage of areas with hidrosolidarity management; Hectares sustainably managed; Hectares of restored native areas.	% of territories with participative management encouraged
Impact Valuation	Environmental value lost/gained - Shared natural resources management	Quantified quality of life impacted - Increase in local sustainable development capabilities
Impact Metric	Hectares of restored forests: Enhanced environmental skills for wood suppliers, Water availability, Enhanced Forest productivity for wood suppliers, Increased restored native areas (Legal Reserve)	Quantified quality of life impacted - Increase in local sustainable development capabilities

 

Certifications 

In 2022, Klabin's Sustainability Policy was updated and, therefore, training was conducted at the units and also through Klabin's Business School. The Sustainability Policy training covers all new employees (during the onboarding process) and direct and indirect training through the headquarters of each industrial unit.

Klabin makes external voluntary commitments that reinforce its commitment aligned with sustainable development. Learn more at commitments page.

 

ISO 14001 CERTIFICATION
	Direct Employees	Indirect Employees	Total of Employees (Directs + Indirects)	Percentage of Units	Percentage of Revenue
Number of Employees at Units	15,541	9,675	25,216	74%	76%
Total of Kablin's Employees	18,353	10,185	28,538
Percentage of Employees covered by certification	85%	95%	88%

The industrial mills in Pilar (Argentina), Rio Negro (state of Paraná), Manaus (state of Amazonas) and Horizonte (state of Ceará) are not yet ISO 14.001 certified due to internal and external reasons - and as previously mentioned in the last year, have been preparing to do so, to get certified in 2024. Although 26% of the industrial units’ operations are not certified by a third-party, all of them undergo an internal audit by a specialised Klabin team, which holds the ISO 14001 standard auditor certificate. Those that are certified carry out internal audits of the management system. In this way, units that do not yet have formal certification prepare for the certification audit, re-scheduled for the second half of 2024. 

ISO 9,001 CERTIFICATION
	Direct Employees	Indirect Employees	Total of Employees (Directs + Indirects)	Percentage of Units	Percentage of Revenue
Number of Employees at Units	15,573	9,704	25,277	83%	77%
Total of Kablin's Employees	18,353	10,185	28,538
Percentage of Employees covered by certification	85%	95%	89%

 

ISO 45,001 CERTIFICATION
	Direct Employees	Indirect Employees	Total of Employees (Directs + Indirects)	Percentage of Units	Percentage of Revenue
Number of Employees at Units	8,786	2,658	11,444	26%	56%
Total of Kablin's Employees	18,353	10,185	28,538
Percentage of Employees covered by certification	48%	26%	40%

 

ISO 50,001 CERTIFICATION
	Direct Employees	Indirect Employees	Total of Employees (Directs + Indirects)	Percentage of Units	Percentage of Revenue
Number of Employees at Units	1,898	1,082	2,980	4%	27%
Total of Kablin's Employees	18,353	10,185	28,538
Percentage of Employees covered by certification	10%	11%	10%

 

OHSAS 18,001 CERTIFICATION
	Direct Employees	Indirect Employees	Total of Employees (Directs + Indirects)	Percentage of Units	Percentage of Revenue
Number of Employees at Units	553	222	775	4%	3%
Total of Kablin's Employees	18,353	10,185	28,538
Percentage of Employees covered by certification	3%	2%	3%

 

 

 

 

 

 

 

Since 2019, Klabin has maintained a structured materiality analysis process that underpinned the development of its 2030 Agenda. This initiative involved extensive consultations with different stakeholder groups, with the aim of identifying the main impacts to be mitigated and opportunities to be seized, using the global sustainable development agenda as a reference. The outcome of this process was the creation of Klabin’s Sustainable Development Goals (known by their Portuguese initials, KODS), composed of 23 material topics. In all, 11 of them involve long-term commitments, while 12 address internal company demands. (See Table 1.) The goals guide the Company’s sustainability strategy, including the composition of variable compensation for employees at all levels

KODS Topics (Classified as Material Topics Since 2019)

Topics with public goals	Other relevant topics
Suppliers Social and Environmental Performance	Increased Forest Yield
Local Development and Impact on Communities	Forest Certification
Diversity	Ethical Conduct and Integrity
Ecosystems and Biodiversity	Klabin's Culture
Climate Change	Economic Performance
Products and Partnerships with the Value Chain and Circularity	Human Capital Development
Waste	Availability of Wood
Occupational Health and Safety	Innovation Management
Cybersecurity	Risk Management
Water Use	Management and Engagement of Professionals
Energy Use	Production and Logistics
	Multiple Uses of Wood

 

Klabin’s 2030 Agenda is revalidated annually by internal governance bodies. The agendas for Sustainability Committee and Sustainability Standing Committee meetings are set according to the risk and urgency of the topics and the progress of commitments. These meetings are held at least every two months.
Since the creation of the KODS Agenda, the appropriateness of all new company projects has been systematically analyzed in light of Klabin’s Sustainable Development Goals, internal audit control processes, periodic updates to the Risk Matrix and contributions from technical sponsors and the corporate Sustainability Area. Furthermore, the Company has included the achievement of some goals as trigger KPIs for some of its debts (see Sustainable Finance). The process for verifying the agenda’s compliance is also audited by a third party. In addition to the topics covered by the 2030 Agenda, all risks and recommendations arising from human rights due diligence conducted by Klabin are also internalized by means of the Company’s official monitoring activities.

 

Financial and risk approach to KODS topics

Since 2020, Klabin has been a Task Force on Climate-Related Financial Disclosures (TCFD) Supporter and committed to following the TCFD’s recommendations. The panel assesses not only the impact of climate change on Klabin’s long-term financial performance, but also the effects of the Company’s activities on society and the environment.

In the following years, the process was extended to other relevant topics, such as water and biodiversity. In 2023, Klabin expanded its Climate Transition Plan by incorporating elements of integrated soil, water and biodiversity management, accelerating the transition to a sustainable future. Considering this progress and the fact that, in Brazil, the main source of greenhouse gas emissions is land use change associated with deforestation, Klabin published its first Nature Transition Plan, in line with its commitment as an Adopter of the TNFD (Taskforce on Nature-related Financial Disclosures), starting in 2025.

Main advances in governance associated with Klabin 2030 Agenda

• A requirement to link the individual goals of all managers and executives to the KODS agenda, making up 20% of their variable compensation; 
• The recurrence of Sustainability Standing Committee meetings, in order to regularly monitor and deliberate on changes of course and challenges related to the agenda, supported by an internal goal progress dashboard; 
• A change in the use of the Sustainability Index, which was previously linked only to executives’ variable compensation, to provide all Klabin employees with short- and long-term financial incentives connected to the KODS Agenda; 
• One-off reviews in terms of goals and timelines (e.g., the climate and net-zero goals approved by the SBTi); 
• The publication of specific thematic guides to resilience strategies based on identifying risks and opportunities, such as the Climate Transition Plan and the Nature Transition Plan. 

 

Expansion of approach: Double Materiality 

The regulation of international standards – such as the European Sustainability Reporting Standards (ESRS), associated with the EU’s Corporate Sustainability Reporting Directive (CSRD) and IFRS S1, published by the International Sustainability Standards Board (ISSB) – represents an important milestone in the consolidation and standardization of global reporting practices.

In Brazil, CVM Resolution 193 of 2023 incorporates the international standards for sustainability information disclosure issued by the ISSB (IFRS S1 and S2). It establishes guidelines for sustainability disclosures by publicly traded companies, with voluntary adoption starting in 2024 and mandatory adoption starting in 2026 (base year). 

Considering the regulatory outlook and market best practices, Klabin began reviewing its KODS topics in 2024, adopting the double materiality guidelines presented by the European Financial Reporting Advisory Group (EFRAG) as a methodological reference.
Carried out between February 2024 and June 2025, the new materiality process was structured in the following stages:

1.    Analysis of convergence between the KODS topics and the ESRS’ mandatory sector topics;
2.    Analysis of financial materiality (risks and impacts) for Klabin;
3.    Consultation and analysis of impact on stakeholders and the environment;
4.    Definition of double material, material and non-material topics;
5.    Validation of Klabin’s new materiality;
6.    Monitoring of indicators and internal controls for limited assurance;
7.    Periodic review of materiality.

 

Analysis of convergence between the KODS topics and the ESRS’ mandatory sector topics

Based on the ESRS’ disclosure requirements for each topic and subtopic, a convergence analysis was performed for Klabin’s current materiality, with the aim of consolidating overlaps and simplifying the presentation of the Company’s material topics.

As a result, 12 material topics were redefined and submitted for analysis of: 1) the financial risks for Klabin; and 2) the impact on stakeholders and the environment. In addition to these, four other cross-cutting and enabling topics were defined for the Company’s businesses and operations.

Analysis of risks and opportunities for Klabin

Subsequently, the 12 material topics were reviewed to check the integration of their management and internal controls into the Company's official Risk Matrix.

Scoring:

• Probability score, considering the Company's criticality and vulnerability, i.e., occurrence, maturity of internal controls, and likelihood of risk occurrence; 
• Severity score, considering the prospective financial impact and likelihood of risk occurrence. 

Assumptions:

• The risk analysis methodology stipulated in Klabin's Risk Management Policy;
• The score of the most critical risk for each topic was considered; 
• Minimum indicators were obtained from correlating risks involving each of the 12 KODS topics with more than 200 mandatory indicators;
• Opportunities are not yet incorporated into this version of our materiality exercise.

Approach and analysis:

• Meetings and workshops with the areas responsible for updating the classification and criticality of each risk related to the KODS topics, as well as proposing new risks, when necessary.

 

Analysis of impact on stakeholders and the environment

Calculation approach

• Consultation with stakeholders to determine the probability of impacts versus their severity (scale, dimension and irremediability¹), if and when materialized;
• Conversion of existing primary data into a scale from 1 to 4.

Approach and analysis

An in-depth analysis was conducted of the impacts generated by the 12 topics on stakeholders and the environment. This process was conducted using primary data from reliable sources and recognized tools, in addition to a specific consultation to check the materiality of some topics not considered definitive. 

For example, for certain topics, this analysis used external diagnoses, organizational climate data from employee consultations, matrices of social and environmental aspects and impatcs, human rights due diligence information, and technical reports aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and Taskforce on Nature-related Financial Disclosures (TNFD).

In addition, 28 interviews were carried out with representatives of external stakeholders, including critical suppliers, significant customers across all businesses, industry associations, industry experts and non-governmental organizations, among other stakeholders considered relevant to Klabin's operations. This consultation resulted in probability and severity scores associated with four of the 12 prioritized topics: Resource Use and Circularity, Cibersecurity, Forest Certification, and Suppliers' Social and Environmental Performance. Primary data from previous consultations was utilized for the other topics.

Furthermore, Klabin's corporate policies and Code of Conduct guide its workforce on how to relate to stakeholders, establishing forms of interaction and frequency, as listed below:

 

¹Permanent effects or damage, for which repair is impractical or impossible.

 

GRI-2-29

Stakeholder	Type of engagement	Frequency
Employees	Meetings or direct contact; intranet; daily safety meetings	Daily
Customers	Contact by phone or email; audits; technical visits; Klabin team's presence at the customer's premises (occasional); customer portal	Daily and on demand
Suppliers	Contact by phone or email; negotiation meetings	Periodic and on demand
Regulatory bodies	Follow-up technical visits; contact by phone or email; sending electronic forms; investor reports; financial statements; investor portal.	Periodic and on demand
Investors	Meetings or direct contact; IR website; periodic information disclosed to Brazilian Securities and Exchange Commission (CVM); capital market events; visits to operations.	Daily
Communities	Communication channels (email, toll-free helpline, letters, interaction with employees in the field); in-person meetings; annual survey of communities	Daily

All the consultation results were consolidated and integrated into analysis of the impacts of potentially material topics.

 

Definition of double materiality and other relevant topics

The impact of these topics on stakeholders is assessed by calculating severity multiplied by probability. Meanwhile, Klabin's financial materiality is determined by calculating the financial impact multiplied by vulnerability within the Company itself (Klabin's vision). The topics positioned in the double materiality area are considered priorities for both Klabin and its stakeholders. These are the topics for which full reporting is reasonable, according to both of the aforementioned regulatory standards. 

Nevertheless, the areas of materiality are classified as of high importance and require public goals. To date, the non-material area does not have any established Klabin Sustainable Development Goals. Klabin is still in the process of surveying and calculating positive opportunities and impacts to make up the final matrix. The topics were reorganized into three strategic pillars for Klabin, distributed as follows:
 

 

Validation of Klabin's new materiality

The double materiality process was reported to, evaluated by and deliberated on by the following company bodies: 

• Sustainability Standing Committee;
• Risk Standing Committee;
• Executive Board;
• Sustainability Committee;
• Risk Committee;
• Board of Directors.

Monitoring of indicators for assurance 

The materiality process underwent external verification by a third party and is presented in the assurance letter available here.

 

Periodic review of materiality

Klabin’s new materiality framework will continue to undergo annual reviews, including calibration with the Company’s risks that were included in the material topics, material facts, achievement of goals associated with the topics, and referrals from meetings of the Sustainability Standing Committee and Sustainability Committee.

 

Regulatory Adaptation - IFRS/ISSB

Klabin is reviewing its internal processes and improving its data collection and analysis systems too meet the disclosure requirements established by IFRS S1 (Sustainability Information Disclosure) and IFRS S2 (Climate Risk Disclosure). Until the publication of the first limited assurance report, the thematic workbooks for each double material topic, in line with the new standards, can be found below:

• Climate Change: Klabin's Climate Transition Plan, based on Task Force on Climate-Related Financial Disclosures (TCFD) recommendations;
• Ecosystems and Biodiversity: Klabin's Biodiversity and Ecosystem Services Conservation Plan , based on Taskforce on Nature-related Financial Disclosures (TNFD) recommendations;
• Water Use: Both sets of the aforementioned recommendations address this subject. However, by early 2026, the topic will have its own thematic workbook (Water Resources Management Plan), based on the same frameworks. 

 

Regulatory Adaptation - ESRS

Klabin has been monitoring the implementation of ESRS (European Sustainability Reporting Standards) by the European Union and the reporting requirements for non-European companies. Based on this, it has restructured its Sustainability roadmap based on the concept of double materiality. This proactive approach allows Klabin not only to comply with future regulatory demands, but also to identify opportunities to improve internal processes and management practices on issues considered relevant to the company. 

 

Materiality Issues and Metrics for Enterprise Value Creation

Material Topic	Climate Change	Occupational health and safety	Biodiversity
Business Case	Klabin is a forestry-based company, and climate change risks directly influence crucial operational parameters such as forest yield, as well as operational and financial risks starting from planting, harvesting, and soil preparation. From the stakeholder’s perspective, the topic has been identified as a priority due to the potential impacts the company’s operations may generate. Therefore, the topic is considered double material, and the companyhas prioritized, in recent years, investments in mitigation and adaptation actions to address negative risks and impacts, as outlined in our Climate Transition Plan. In addition to the pipeline of projects and investments planned for decarbonization, Klabin also has public targets (KODS 2030) for science-based emission reductions and is part of various global climate initiatives such as the UN's Business Ambition for 1.5°C. The company is engaging its value chain to improve its emissions inventory reporting and report science-aligned targets.	The Life Protection Policy was launched in 2022 and revised in 2024 and aims to promote a fair culture that cares for the well-being of employees and the business strategy, turning failures into learning experiences that drive safer processes and activities throughout Klabin. This topic is of extreme relevance to the company as it represents a risk directly associated with the continuity of operations, productivity, and the quality of life of our employees and third parties. It is directly linked to the business strategy and is present in long-term goals and in the variable compensation of the company’s executives. In 2025, Klabin completed its double materiality assessment. Although the topic of health and safety was not classified under double materiality, it remains a material issue in terms of impact for the company. This reflects Klabin’s ongoing commitment to continuously improving internal safety practices.	Due to its forestry-based business, Klabin is a pioneer in implementing mosaic planting: a system that combines areas of preserved native forests, which correspond to almost half of our forest area, with planted forests of pine and eucalyptus of different ages. Since the quality of planted forests also depends on the quality of native forests and their natural resources, Biodiversity is a relevant topic for the company and has the largest set of targets for 2030 within Klabin's Sustainable Development Agenda. The loss of biodiversity threatens the ability of ecosystems to provide resources and services (e.g., pollen and seed dispersal, natural pest control, water and climate regulation, soil and nutrient conservation, etc.) that are essential for sustaining high yields of Klabin's plantations.  In 2025, Klabin completed its double materiality assessment, and the topic was classified as a double material issue—meaning it is considered a priority both for the company and its stakeholders.
Business Impact	Risks	Risks	Risks
Business strategies	The Company has a history of investments and adoption of low-carbon technologies, which allowed a reduction of more than 70% in GHG intensity (Scopes 1 and 2) between 2003 and 2024. Additionally, being forestry-based, the Company maintains a positive carbon balance, which, despite methodological differences in calculation (notably between GHG Protocol and SBTi), results in carbon removal always exceeding total emissions, implying financial opportunities for a possible regulated market.  In 2024, Klabin had new targets approved by the Science Based Targets initiative (SBTi), related to Scope 3 emissions and the most ambitious scenario aligned with limiting global temperature rise to 1.5°C. A long-term Net Zero target was also established, covering Scope 1, 2, and 3 emissions by 2050. In 2025, the company updated its Climate Transition Plan, aligning it with the standards of the Task Force on Climate-related Financial Disclosures (TCFD).	Management of this topic is outlined in the Occupational Health and Safety Management System and is structured into 3 pillars:       1. Installation: Ensure the safety and reliability of equipment. Improve and maintain the working environment provided to our professionals;       2. Method: Continuously improve how we handle safety in our routine. Maintain a critical view of our accident prevention and mitigation procedures, creating and reviewing policies, guidelines, and requirements; and      3. People: Value good practices and encourage employees to take care of each other. Train them on standards and procedures and bring leadership closer to the routine.        The Occupational Health and Safety Management System is guided by ISO 45001 in all manufacturing and forestry units, with guidelines and procedures focused on loss prevention and continuous process improvement to preserve life, health, and physical integrity of people.	Klabin has been evaluating the impacts of this risk through the Continuous Monitoring Program for Fauna and Flora. This allows understanding the behavior of species and adopting prevention and mitigation measures, such as reducing road accidents, reforestation actions, and scientific research. Klabin has a biodiversity research center in its Ecological Park, aimed at monitoring and restoring forest quality through wildlife restoration. It is also responsible for bringing technological solutions to accelerate and scale the Biodiversity Monitoring program, which includes species tracking. Additionally, one of the long-term goals of this topic is linked to a Sustainability-Linked Bond, increasing the company's commitment to its 2030 Agenda and its financial and strategic roadmap.    In 2025, Klabin revised its Biodiversity and Ecosystem Services Conservation Plan, aligned with the Taskforce on Nature-related Financial Disclosures (TNFD) guidelines, divided into 6 programs aiming to support the company in achieving Net Positive Impact on Biodiversity in an integrated manner.
Long-term goal	In 2024, Klabin had new targets approved by the Science Based Targets initiative (SBTi), related to Scope 3 emissions and the most ambitious scenario aligned with limiting global temperature rise to 1.5°C. A long-term Net Zero target was also established, covering Scope 1, 2, and 3 emissions by 2050 (compared to the base year (2022). The targets include industrial and energy emissions: Short-term target (by 2030) - Reduce absolute Scope 1, 2, and 3 emissions by 42%; Long-term target (by 2050) - Reduce absolute Scope 1, 2, and 3 emissions by 90%." Klabin is waiting for the Science Based Targets initiative (SBTi) to publish a specific methodology for the paper and pulp sector, which is currently being developed, in order to define and submit a FLAG target consistent with technical guidelines and aligned with its operations. The Company recognizes the importance of this target for land use, forestry and agriculture, and remains committed to setting a goal in line with its climate ambition. The achievement of these goals accounts for 10% of the variable compensation of directors, managers, coordinators, and specialists, in order to drive internal progress on this front.	At Klabin, safety is a core value of the Company. For this reason, its relevance and the continuous pursuit of improvement are non-negotiable. Given the materiality of the topic, Klabin has established the following long-term goals: i. Zero lives changed of own and contracted employees ; ii. Keep the accident frequency rate (own employees and contractors) below 1; iii. Maintain the severity rate of accidents with own and contracted employees below 50; iv. Achieve a more advanced level (Generative/Sustainable) in the Hearts and Minds methodology or equivalent. The achievement of these goals accounts for 10% of the variable compensation of directors, managers, coordinators, and specialists, in order to drive internal progress on this front.	Our objectives/targets by 2030 are: (i) reintroduce two extinct species and reinforce four threatened species in forests by 2030; (ii) donate 1 million native seedlings; (iii) have at least 6 research partnerships per year; (iv) maintain or increase the number of native species dependent on forests; (v) map 100% of hotspots where fauna is run over and implement actions to reduce occurrences.
Target year	2030	2030	2030
Progress	Reduced 13.2% absolute Scope 1 and 2 emissions compared to the base year (2022); Reduced 17.4% absolute Scope 3 emissions compared to the base year (2022);	i.    4 lives changed; ii.    Accident frequency rate 1.82 iii.    Severity rate: 220 iv.    Percentage of units: 3%	i. 2 species: Jacutinga (Aburria jacutinga) - Fauna reintroduction; Purple-breasted Parrot (Amazona vinacea) - Population reinforcement.  ii. 32% of hotspots for fauna being run over mapped. iii. 76%  of fauna species dependent on high environmental quality forests. iv. 10 partnerships/research projects per year based on nature conservation and biodiversity studies. v. 610,000 native tree seedlings for the recovery of degraded areas in partner areas.
Executive Compensation	In the annual short-term incentive program, starting in 2024, corporate and individual goals are used to measure the performance of each executive, with corporate goals comprising: financial indicators (70% of the total weight), safety (10% of the total weight), ESG indicators (10% of the total weight), and individual goals (10% of the total weight). Climate Change goals are linked to the 10% related to ESG indicators.	In the annual short-term incentive program, starting in 2024, corporate and individual goals are used to measure the performance of each executive, with corporate goals comprising: financial indicators (70% of the total weight), safety (10% of the total weight), ESG indicators (10% of the total weight), and individual goals (10% of the total weight).	In the annual short-term incentive program, starting in 2024, corporate and individual goals are used to measure the performance of each executive, with corporate goals comprising: financial indicators (70% of the total weight), safety (10% of the total weight), ESG indicators (10% of the total weight), and individual goals (10% of the total weight). As the company's biodiversity goals are part of the 2030 agenda, managers sponsoring the topic set goals linked to 10% of the individual goal for this topic.

 

 

Material Issues and Metrics for External Stakeholders

Material topic for external stakeholders	Biodiversity, Forest Certification; Water; Climate Change	Local Developmwnt
	Category: Climate transition and physical risks	Category: Community impact and development
Cause of the impact	Operations Supply Chain (> 50% of business activities)	Operations (> 50% of business activities)
External stakeholders impact areas evaluated	Environment External employees (e.g supply chain, contractors)	Society
Topic relevance on external stakeholders	Both positive and negative:  In 2025, Klabin revised its Biodiversity Conservation and Ecosystem Services Plan, which aims to achieve a net gain in biodiversity by 2050, together with interim targets in 2030 and 2040.   The work to structure the plan involved a multidisciplinary team and close attention to market trends and internationally recognized practices. Using the LEAP approach (Locate, Evaluate, Assess and Prepare for reporting), the Company identified risks, environmental asset dependencies and impacts on ecosystem services and business activities. The document presents high-priority sites for implementing the plan based on global methodologies and the opinions of internal and external experts. The analysis of dependencies and impacts in relation to ecosystem services was based on  interviews with members of Klabin’s technical and operational teams, as well as other specialists in the sector and on the subject. Potential negative and positive impacts were also identified for each high-priority ecosystem service. Based on the analysis of risks, financial impacts, and the Company’s management processes related to the topic—combined with stakeholder consultation—Klabin has identified the issue as double material, meaning it is considered a priority both in terms of financial risk and stakeholder impact.	Klabin's presence, especially in forested territories with a paper industry, affects local dynamics, while the company and its local suppliers depend on a good relationship and a politically robust society to gain social acceptance and a social license to operate. Klabin maintains an economic, social and environmental agenda with the communities where it operates. With the Public Management Support Program, Klabin works to ensure that the priority municipalities (see criteria below) for the company's operations achieve significant progress through training and consultancy to improve the planning and application of public resources from taxes generated by the company's activity. The aim of the initiative is to foster participatory public management in municipalities that have below-average development indices compared to similar municipalities.
Output Metric	Increase in restoration areas of producers participating in forest conservation programs such as Matas Legais and Matas Sociais.	Increase in the Social Progress Index (SPI) score; number of public policies developed that prioritize collective planning.
Impact Valuation	The Company conducted a double materiality assessment aligned with other material aspects. Some examples of relevant indicators are: increased soil quality, water availability, and increased biodiversity richness/abundance.	The Social Progress Index (SPI) is a methodology for analyzing social and environmental data developed to measure the quality of life in communities, cities, countries, and regions. It is a tool used worldwide, adapted to the reality of each territory.  The methodology for constructing the SPI involves the use of three dimensions, each comprising four components, for a total of 12 components: 1. Basic Human Needs: nutrition and basic medical care, water and sanitation, housing, and public safety.  2. Foundations of Well-Being: access to basic education, access to information and communication, health and well-being, and environmental quality. 3. Opportunities: personal rights, personal freedom and choice, social inclusion, and access to higher education.
Impact Metric	Shared positive impacts:   Reduced 13.2% absolute Scope 1 and 2 emissions compared to the base year (2022);  2 locally extinct species reintroduced by 2024 22,000 hectares under restoration/demarcation by the Legal Forest and Social Forest Programs since 2005 Commitment to removing invasive exotic species	Improvement in quality of life in priority municipalities. For example, the municipality of Telêmaco Borba (PR) increased its IPS score from 58.2 to 64.5 from 2021 to 2022. More information available at: main.d3l595nivztlei.amplifyapp.com