Net Zero

We have several actions already implemented in this regard. Such as:

• BRF prioritizes clean energy sources, such as solar and wind. Today, around 90% of electricity consumption globally comes from renewable sources. In 2020, around 3% of this energy came from not only renewable sources, but also clean ones. In 2021, we estimate to close the year with 25% of the energy consumed coming from clean sources. And our goal is to reach 2030 with at least 50% of our electricity matrix coming from clean sources.
• We have about 30,000 hectares of planted reforestation area in eight states in Brazil.
• The Company started to implement tests with electric cars in its commercial fleet, which significantly reduces the emission of greenhouse gases.
• Together with Banco do Brasil, we plan to install solar energy panels on about 700 integrated farms.
• BRF was also the first Brazilian company, in partnership with Aleph Farms, to develop cultivated meat, which should reach the market by 2024.
• On the logistics front, BRF recently announced the construction of a new distribution center in Espírito Santo, which will occupy an area of 13 thousand square meters and will be the most sustainable of its operations, with solar panels capable of generating up to 1.5 megawatts of energy, in addition to water reuse, innovations in refrigeration generation and vehicles with zero carbon gas emissions.
• In 2020, the Company took an important step by establishing a goal of reducing the intensity of greenhouse gas emissions by 20% by 2030 (Scopes 1 and 2) and also implementing initiatives that contribute to a strong climate commitment.
• Later this year, a carbon neutral product line will be launched.

From a very solid base (mentioned above) we decided to advance even further, taking on the commitment to be Net Zero by 2040, and for this we also acted in our chain.

• We joined the Science Based Targets (SBTi) platform, a global initiative that seeks to align efforts to limit the warming of our planet.
• We will reduce greenhouse gas emissions and neutralize waste by 2040.
• This means a decrease in direct emissions, known as Scope 1, and those that are generated by energy consumption, called Scope 2. We will also work to reduce indirect emissions, those from our value chain, which are known as Scope 3.

For this, we have identified a set of initiatives, on four priority fronts in our value chain:

• Sustainable Grain Purchase: We are implementing guidelines for a deforestation-free chain. The company will not use, for example, grains from the Amazon biome from properties where deforestation has been carried out. This means Zero Deforestation in the Amazon.
• Low carbon agriculture: We are going to scale up the use of solar energy by more than 9,500 integrated producers, hatcheries and own farms to implement low carbon agriculture in the poultry and swine chains. Another technology that will also have an impact on farms will be the use of biogas for energy generation.
• Operational efficiency: In our Industrial Operations, where the manufacturing activities are located, we are already looking for new technologies for the treatment of effluents and residues for greater efficiency and reduction of emissions. In the Logistics area, considering transport and our distribution centers, we are looking for more sustainable technologies. This includes the technology used to keep our products refrigerated, the use of alternative fuels, greater logistical efficiency in our transport and the improvement of current facilities and construction of sustainable DCs.
• Renewable Energy: Today, around 90% of electricity consumption globally comes from renewable sources. In 2020, around 3% of this energy came from not only renewable sources, but also clean ones. In 2021, we estimate to close the year with 25% of the energy consumed coming from clean sources. And our goal is to reach 2030 with at least 50% of our electricity matrix coming from clean sources. For this, we are going to invest in renewable sources, such as wind and solar.

We have now joined the Science Based Target initiative by signing the "Ambition Letter for 1.5ºC" and seeking to align our commitment and reduction targets with scenarios established by SBTi. The validation of targets by SBTi can last up to two years after signing the commitment.

We already have several initiatives related to greenhouse gas emissions in place (as explained above). Even though the validation process by SBTi takes up to two years for official approval of the commitment, our objective is to ensure that all appropriate measures to mitigate the effects caused through our operations are applied. As with sustainable development, we see net zero as a journey, and by adhering to the commitment, we understand that our journey is already underway and our plans will be implemented.

Scientific evidence indicates that climate change is caused by human activity, and that everyone will suffer significant socioeconomic impacts if the increase in the planet's temperature is not limited. We recognize our role in this process, and we respond to it with an ambitious commitment to reduce and neutralize our emissions.

We draw up a plan that encompasses all the company's own operations and also the value chain. To commit to the 2040 date, we invested in specialized consulting, diagnosed all areas of the company in order to have their recommendations, and worked together with SITAWI consulting. In addition, to improve our understanding of the topic, we listened to experts such as Celso Leme (UFRJ), Marina Grossi (CEBDS), Tasso Azevedo (MapBiomas), Sonia Favaretto (SDG Pioneer by the United Nations Global Pact) and Ricardo Voltolini (Sustainable Idea). We have defined strategies to achieve our commitment, which involves the adoption of measures related to the increase of renewable energy, efficiency in the treatment of effluents and waste, innovation in refrigeration systems in distribution centers, logistical efficiency and implementation of guidelines in favor of Zero Deforestation.

Our greenhouse gas emissions are monitored and controlled. Our volume of GHG emissions is concentrated in the value chain, especially in agriculture and logistics processes. In operation, about 90% already use renewable energy and an environmental management system that results in a lower emissions profile. BRF also has 30,000 hectares of planted renewable forest as carbon stock. It has a positive impact on the environment, as it contributes to climate regulation and to the mitigation of impacts generated by its own activities. It is worth mentioning that we are members of the Brazilian GHG Protocol Program and we follow the methodology for calculating our annual greenhouse gas inventory. Our atmospheric and GHG emissions are subject to a management model that complies with environmental legislation and good practices in the markets in which we operate. The GHG inventory is audited by an external company, which comprises the analysis of the calculation tool, the base data used to calculate emissions, as well as on-site visits to assess the information used, which issues a verification letter attesting to the information. To give you an idea, Scope 1 and Scope 2 emissions totaled around 527 thousand tons of CO2 equivalent in 2019 and, in 2020, there were around 475,000 tons. With this, BRF's GHG inventory recognized with the Gold Seal by the Brazilian GHG Protocol Program.

Annually, we report our performance related to climate change on the CDP platform, striving for transparency. In 2021, we hired a specialized consultancy to support the improvement of this report, which will serve as a tool to monitor the evolution of the net zero commitment.

The mapping, quantification and management of value chain emissions is complex for any organization and, for BRF, it would be no different. We are aware of the relevance of these emissions and have already identified the priority links and the main initiatives that will contribute to reducing emissions. Due to the complexity of BRF's chain and the fact that we have less management of this data, we chose to define a reduction target in line with the least ambitious scenario available for scope 3, and we will seek validation from the SBTi for this defined target. We have already identified three priority links in BRF's operations (i – grains, ii – integrated producers, iii – logistics) and we are evaluating the relevance of other links in the chain.

Yes, the Company has already mapped and identified the priority links. Greenhouse gas emissions are mainly concentrated in four links in BRF's value chain. These include:

• Sustainable Grain Purchase: We are implementing guidelines for a deforestation-free chain. The company will not use, for example, grains from the Amazon biome from properties where deforestation has been carried out. This means Zero Deforestation in the Amazon.
• Low carbon agriculture: We are going to scale up the use of solar energy by more than 9,500 integrated producers, hatcheries and own farms to implement low carbon agriculture in the poultry and swine chains. Another technology that will also have an impact on farms will be the use of biogas for energy generation.
• Operational efficiency: In our Industrial Operations, where the manufacturing activities are located, we are already looking for new technologies for the treatment of effluents and residues for greater efficiency and reduction of emissions. In the Logistics area, considering transport and our distribution centers, we are looking for more sustainable technologies. This includes the technology used to keep our products refrigerated, the use of alternative fuels, greater logistical efficiency in our transport and the improvement of current facilities and construction of sustainable DCs.
• Renewable Energy: Today, around 90% of electricity consumption globally comes from renewable sources. In 2020, around 3% of this energy came from not only renewable sources, but also clean ones. In 2021, we estimate to close the year with 25% of the energy consumed coming from clean sources. And our goal is to reach 2030 with at least 50% of our electricity matrix coming from clean sources. For this, we are going to invest in renewable sources, such as wind and solar.

A estratégia de neutralização da BRF está sendo aprimorada a partir de análises de custo-benefício das tecnologias existentes. Vamos buscar implementar alternativas que capturem o máximo de carbono, de forma eficiente e positiva para a biodiversidade. Atualmente, estamos avaliando os caminhos possíveis, incluindo o plantio de espécies nativas e comerciais e tecnologias de captura direta. Esse é um ramo que se desenvolverá muito nos próximos anos, a e BRF acompanhará de perto essa evolução para detalhar suas medidas.

Investments will be needed to reach net zero. The Company already directs resources to promote energy efficiency, environmental management and other initiatives to reduce environmental impact, being a pioneer in raising funds with sustainable financial instruments (first Brazilian company to issue a green bond in 2015). Since then, resources from this title used for energy efficiency initiatives have totaled more than R$300 million. BRF continues evaluating the use of these instruments and structuring future labeled emissions that will contribute to achieving the goals.

We implement guidelines in favor of a deforestation-free chain, following the applicable legislation. We have already announced a commitment to track 100% of the grains purchased from the Amazon and the Cerrado by 2025. The company will not use, for example, grains from the Amazon biome from properties where deforestation has been carried out. This commitment is part of a set of company initiatives to achieve a clean supply chain, in accordance with the social and environmental criteria of BRF's Sustainability Policy. In practice, we started to adopt a stricter grain origination protocol, with extensive social and environmental analysis of suppliers and their areas of operation, using geospatial technology and data science.

In 2019, the Company began studies to assess the environmental benefits of incorporating electric cars into its fleet. In early 2020, the vehicle used in the pilot project covered a distance of approximately 2,500 kilometers with a 95% reduction in GHG emissions. Over the course of a year, the drop can reach 8300 kg of CO2e, compared to a combustion engine car. The implementation of 100% electric cars to the fleet began at the end of last year and it is expected that by the end of 2022 around 30 vehicles will be available for the company's teams, which values sustainability and works continuously to reduce emissions greenhouse gases (GHG). To complement the action, the Company installed two structures for charging electric vehicles in the parking lot of one of its offices, located in the neighborhood of Jaguaré, in São Paulo. That way, drivers can utilize the power supply as needed.

In 2020, R$188 million were invested in the Company's environmental projects. So far, we have also closed a partnership with Banco do Brasil to have R$ 200 million in credit lines for the implementation of solar panels on integrated farms. For the grain traceability project, which includes the georeferencing tool, R$ 20 million were invested. We remind you that the entire investment is part of the amount of R$ 55 billion announced for the 2030 Vision, and the Sustainability initiatives, which obviously include the Net Zero Commitment, are included.

Powered by a set of batteries that can be charged by electricity, the drone contributes to the reduction of carbon emissions into the atmosphere, which will contribute to achieving our goal of being Net Zero by 2040, facilitates the arrival to farms, many of them in locations with difficult geography, reduces time and brings environmental gains. The project also has health safety and biosecurity as objectives.

In line with our sustainability strategy and the potential impacts of the climate issue on the business, we have sought to increase our efficiency in the use of natural resources, in the use of renewable energy and in the control of emissions in the production chain.

We have had very significant advances in the last few months, such as the announcement of the first contracts from the partnership with Banco do Brasil for the installation of solar panels on integrated farms. We launched our energy efficiency program and, in line with the reduction of greenhouse gases, we implemented tests for electric cars in the Company's commercial fleet and carried out the first delivery of genetic material to an integrated producer by means of a drone, a project that also has health safety and biosecurity as objectives.