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Risk 1: Partial or total interruption of operations at an industrial unit

Classification Physical risk.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units in Argentina (Rosario) and Brazil (Minerva Foods Industrializados) and slaughtering and deboning units in Brazil (Mirassol d'Oeste, Palmeiras de Goiás and Rolim de Moura), Paraguay (Belén - Planta 23), and Uruguay (Canelones). Value chain: Not applicable.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the partial or total interruption of operations at an industrial unit. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Additionally, the Company has implemented controlled firebreaks to prevent fires from neighboring properties to impact the industrial units, along with internal and external fire suppression systems, as well as periodic training of the Fire Brigades. There is also an Emergency Response Plan (ERP) for each of the industrial units. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Extreme weather events such as forest fires, river floods, or weather-related droughts can threaten the ability of industrial facilities to operate by obstructing access, compromising physical structures, and causing water rationing or shortages.

Risk 2: Infrastructure and equipment damage

Classification Physical risk.
Susceptibility Company-owned operations: Slaughtering, deboning and processing plants located in Argentina (Rosario) and slaughtering and deboning plants in Brazil (Palmeiras de Goiás), and Paraguay (Belén - Planta 23). Value chain: Cattle ranches located within a 300 km radius of the industrial units in Argentina, Australia, Brazil, Colombia, Paraguay, and Uruguay.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to increased maintenance and repair costs and expenses. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Additionally, the Company has implemented controlled firebreaks to prevent fires from neighboring properties to impact the industrial units, along with internal and external fire suppression systems, as well as periodic training of the emergency response teams. There is also an Emergency Response Plan (ERP) for each of the industrial units. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

High winds, wildfires and flooding can damage the physical structure of industrial plants, as well as both stationary and mobile equipment.

Risk 3: Access to industrial units becomes difficult or not possible at all

Classification Physical risk.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning units in Brazil (Barretos, Janaúba, Palmeiras de Goiás and Rolim de Moura). Value chain: not applicable.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to increased freight costs and delays in production. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Additionally, the Company has implemented controlled firebreaks to prevent fires from neighboring properties to impact the industrial units, along with internal and external fire suppression systems, as well as periodic training of the Fire Brigades. There is also an Emergency Response Plan (ERP) for each of the industrial units. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Floods and wildfires can make it difficult or impossible for employees, suppliers, and service providers to access industrial facilities due to road closures.

Risk 4: Increased incidence and severity of employee-acquired infectious diseases

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): An increase in the frequency and severity of infectious diseases among employees, which may result in absenteeism and the need to increase preventive measures, which may impact production levels. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning plants in Brazil (Barretos, Janaúba, Palmeiras de Goiás, Paranatinga and Rolim de Moura), Colombia (Ciénega de Oro), Paraguay (Assunção – Planta 2, San António – Planta 3 e Belén – Planta 23) e Uruguay (Carrasco). Value Chain: not applicable.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. During the COVID-19 pandemic, Minerva Foods developed health protocols for its operations based on guidance from Hospital Israelita Albert Einstein. These protocols were voluntarily submitted to health and legal bodies and ensured the sustainability of operations during this period. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Low temperatures and cold snaps, as well as high temperatures and heat waves, can lead to physical discomfort and may facilitate the transmission of infectious diseases in closed and crowded spaces.

Risk 5: Accidental physical and mental injury

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): Accidents that cause physical and mental harm can result in lost time and the need to increase preventive measures, which can affect production levels. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning plants in Brazil (Araguaína, Barretos, Janaúba, Palmeiras de Goiás, Paranatinga and Rolim de Moura). Value Chain: not applicable.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Additionally, the Company has implemented controlled firebreaks to prevent fires from neighboring properties to impact the industrial units, along with internal and external fire suppression systems, as well as periodic training of the Fire Brigades. There is also an Emergency Response Plan (ERP) for each of the industrial units. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

High winds, wildfires, and floods can threaten the physical and mental well-being of employees and suppliers through the displacement of structures and equipment, excessive heat, and smoke inhalation.

Risk 6: Loss of grazing land for livestock

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in the price of the main raw material. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: not applicable. Value chain: Cattle ranches located within a 300 km radius of the industrial units in Australia, Brazil, Colombia, Paraguay and, Uruguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Wildfires and floods on the ranches that supply the Company may result in partial or total loss of pastureland, increasing the cost of maintenance and restoration of degraded areas. These events may increase the cost of purchased animals or affect the availability of animals in certain regions.

Risk 7: Loss of nutritional quality of pastures

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in the price of the main raw material. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: not applicable. Value chain: Cattle ranches located within a 300 km radius of the industrial units in Australia, Brazil, Colombia, and Paraguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Heat waves can affect the nutritional quality of pastures on the ranches that supply the Company. As a result, cattle will require supplemental feed, which will impact the cost of the product.

Risk 8: Lack of grain available for use as a feed supplement

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in the price of the main raw material. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning plants in Brazil (Palmeiras de Goiás and Rolim de Moura), Colombia (Ciénega de Oro), Paraguay (Asunción - Planta 2, San Antonio - Planta 3 and Belén - Planta 23), and Uruguay (Carrasco). Value chain: Cattle ranches located within a 300 km radius of the industrial units in Brazil, Colombia, Paraguay e Uruguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Wildfires can affect crop development, reducing the supply of grain for feed supplementation and increasing costs for livestock producers, which may be then passed on to meatpackers.

Risk 9: Longer transport times for purchased animals

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in freight costs. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, and deboning units located in Argentina (Venado Tuerto), Brazil (Janaúba), Colombia (Bucaramanga e Ciénega de Oro) e Paraguay (Assunção – Plantas 2, 8 e 13, San António – Planta 3, and Belén – Planta 23). Value chain: Cattle ranches located within a 300 km radius of the industrial units in Argentina, Brazil, Colombia, Paraguay and, Uruguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Wildfires and/or flooding can degrade and/or render impassable roads that provide access to supplier ranches and industrial facilities, resulting in increased live animal transportation times and worsening animal welfare indicators.

Risk 10: Animal purchase costs increase

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in the price of the main raw material. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning plants in Brazil (Palmeiras de Goiás and Rolim de Moura), Colombia (Ciénega de Oro), Paraguay (Asunción - Planta 2, San Antonio - Planta 3 and Belén - Planta 23), and Uruguay (Carrasco). Value chain: Cattle ranches located within a 300 km radius of the industrial units in Argentina, Australia and Uruguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

The cost of purchasing cattle, which is the Company’s primary raw material, can fluctuate significantly due to factors such as the livestock cycle, input costs at supplier ranches, trade and health embargoes, among others. Extreme weather events, like heat waves, cold spells, and droughts, can lead to an increase in the incidence of infectious diseases in animals, reduce the availability of drinking water on supplier ranches, and cause losses in the production of agricultural commodities used in feed. These factors can result in increased costs for rural producers, which may then be passed on to meat packers.

Risk 11: Contusions, bruises and animal deaths

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in the price of the main raw material. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning plants in Brazil (Palmeiras de Goiás), and Paraguay (Belén - Planta 23). Value chain: Cattle ranches located within a 300 km radius of the industrial units in Argentina, Australia, Brazil, Colombia, Paraguay, and Uruguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Additionally, the Company has implemented controlled firebreaks to prevent fires from neighboring properties to impact the industrial units, along with internal and external fire suppression systems, as well as periodic training of the Fire Brigades. There is also an Emergency Response Plan (ERP) for each of the industrial units. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Flooding can cause animals to become trapped, and high winds can dislodge structures and threaten the physical integrity of the herd. Both events have the ability to increase stress levels in animals and the likelihood of injury, contusions and hematomas. Crush injuries cause blood to pool in the injured area, increasing the risk of bacterial contamination of carcasses and rendering the meat unfit for sale and consumption, requiring it to be discarded. Wildfires can cause high levels of stress to animals, as well as smoke inhalation and carcass injuries, which can increase the final pH of the meat and damage the hide.

Risk 12: Reduced level of animal welfare

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in the price of the main raw material. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning plants in Brazil (Palmeiras de Goiás and Rolim de Moura), Paraguay (Belén - Planta 23), and Uruguay (Carrasco). Value chain: Cattle ranches located within a 300 km radius of the industrial units in Argentina, Australia and Uruguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Extreme weather events, such as cold snaps and droughts, can increase the incidence of infectious diseases in animals, reduce the availability of drinking water on supplier ranches, and cause losses in the production of agricultural commodities used in feed. To mitigate the impact of extreme events on animal welfare, suppliers may need to invest in infrastructure and activities to protect animals, increasing costs on ranches and raising the price of the animal to meatpackers.

Risk 13: Impact on Company Image and Reputation

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): Devaluation of the Company's brands. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, and deboning units located in Brazil (Mirassol d’Oeste and Paranatinga). Value chain: Cattle ranches located within a 300 km radius of the industrial units in Brazil, Colombia e Paraguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The Company has implemented controlled firebreaks to prevent fires from neighboring properties to impact the industrial units, along with internal and external fire suppression systems, as well as periodic training of the Fire Brigades. There is also an Emergency Response Plan (ERP) for each of the industrial units. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods' pioneering efforts to combat illegal deforestation in the value chain have led to the monitoring of 100% of direct suppliers using socio-environmental criteria in Brazil since 2020 and in Paraguay since 2021. The Company achieved its goal of monitoring the same percentage of direct suppliers in Colombia by December 2023, six months ahead of schedule. In 2023, approximately 90% of direct suppliers in Argentina were monitored, and over 60% in Uruguay. In 2021, Minerva Foods took steps to improve traceability in the value chain by engaging partner ranchers through the transfer of its geomonitoring technology. The SMGeo Prospec® application, developed in partnership with Niceplanet Geotecnologia, enables rural producers to verify the socio-environmental compliance of their suppliers, similar to the industry's practices. This ensures that monitoring practices extend to indirect suppliers. In 2023, Minerva Foods distributed over 3,000 vouchers free of charge to around 1,000 partner ranchers to use the tool. This group supplied over 40% of the animals purchased in Brazil. Scheduled: A monitoring program for indirect suppliers in South America based on socio-environmental criteria is being developed to be implemented by 2030.

Context

Forest fires occurring on supplier ranches may be tied to the practice of deforestation (legal or illegal), resulting in damage to the Company’s image and reputation.

Risk 14: Increased water consumption

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): Increased water use at livestock supplier ranches and industrial facilities to reduce the heat to which employees and animals may be exposed (e.g., more frequent sprinkling in stalls to ensure animal welfare). The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing plants in Argentina (Rosario) and slaughtering and deboning plants in Brazil (Barretos). Value chain: Sheep and cattle ranches located within a 300 km radius of the industrial units in Australia, Brazil, Colombia, and Paraguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. In addition, the Company has implemented water reuse projects in its industrial units for cleaning outdoor areas, trucks and corrals, with performance indicators monitored weekly in a meeting with engineering, environmental and sustainability representatives. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: In 2024, the company will begin mapping livestock suppliers located in water-stressed areas.

Context

High temperatures and heat waves cause physical discomfort in humans and animals and increase the demand for water.

Risk 15: Increased water costs

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in the cost of water. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, and deboning units located in Brazil (Barretos, Janaúba, Mirassol d’Oeste and Rolim de Moura). Value chain: Sheep and cattle ranches located within a 300 km radius of the industrial units in Australia, Brazil, Colombia, and Paraguay.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw materialacquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. In addition, the Company has implemented water reuse projects in its industrial units for cleaning outdoor areas, trucks and corrals, with performance indicators monitored weekly in a meeting with engineering, environmental and sustainability representatives. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: In 2024, the company will begin mapping livestock suppliers located in water-stressed areas.

Context

Meteorological droughts may result in water supply interruptions or rationing by concessionaires, as well as a decrease in the flow of underground (wells) and surface (rivers and lakes) water for industrial operations. Additionally, these events can lower the levels of springs, dams, and reservoirs that are used to collect water for animal feed on supplying ranches. In this scenario, it may be necessary to acquire water from alternative sources, (e.g., water trucks) to maintain critical industrial activities and for human use (e.g., drinking fountains, restrooms, and cafeterias).

Risk 16: Conflicts concerning water allocation

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increase in the cost of water. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, and deboning units located in Brazil (Janaúba and Mirassol d’Oeste). Value chain: not applicable.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. In addition, the Company has implemented water reuse projects in its industrial units for cleaning outdoor areas, trucks and corrals, with performance indicators monitored weekly in a meeting with engineering, environmental and sustainability representatives. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: In 2024, the company will begin mapping livestock suppliers located in water-stressed areas.

Context

In Brazil, Law No. 9.433/97 establishes that in situations of water shortages, the priority use of water resources is for human consumption and livestock drinking. In the event of weather-related droughts, conflicts may arise with local communities, rural producers and other parties over the use of water in industrial operations.

Risk 17: Failure to ensure water quality

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to increased water treatment costs. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning units in Brazil (Barretos, Janaúba, Palmeiras de Goiás and Rolim de Moura) and Paraguay (Belén - Planta 23). Value chain: not applicable.
Relevant target(s) -
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Scheduled: There are no scheduled efforts during the reporting period.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

The occurrence of weather-related droughts and floods may result in the degradation of water quality from surface and/or groundwater sources, which may lead to increased treatment costs, regulatory fines for inadequate quality parameters, and damage to the Company’s image and reputation.

Risk 18: Increased electrical energy use

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): An increase in the energy consumption of equipment that is essential to the operation of industrial refrigeration systems. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning units in Brazil (Palmeiras de Goiás). Value chain: not applicable.
Relevant target(s) i. Reduce greenhouse gas emissions intensity by 30% by 2030 (Scopes 1 and 2); ii. Achieve net zero emissions, taking into account the market approach for Scope 2; and iii. Zero the Company's net emissions by 2035 (Scopes 1, 2, and 3).
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. In addition, the company has implemented energy efficiency projects in its industrial units (e.g. regular maintenance of cold room seals; installation of frequency converters to modulate compressors in machine rooms; shutting down equipment when it is not in use or when the room temperature has reached the required level), with performance indicators monitored weekly in a meeting with representatives from Engineering, Environmental and Sustainability. In addition, there are initiatives aimed at generating our own clean electricity, such as those implemented at the industrial units in Bucaramanga, Colombia, and Colac and Sunshine, Australia, producing 474,172 kWh, 1,245,676 kWh and 227,283 kWh respectively in 2023. Since 2020, all of Minerva Foods' operations have been powered by renewable sources of electricity, which are traceable through Renewable Energy Certificates (I-REC). Additionally, hydroelectric energy certificates were acquired in 2023. It is worth noting that in Paraguay, all of the energy consumed is already from renewable sources, so there is no need to acquire certificates. Through this initiative, carried out in partnership with the Minerva Energia business division, the Company aims to promote the production of energy generated from renewable sources with high performance while also achieving zero scope 2 emissions from the purchase of electricity using the market approach. Minerva Foods was the first company in Brazil to obtain the Renewable Energy Seal, issued by the Totum Institute in partnership with the Brazilian Wind Energy Association (ABEEólica) and the Brazilian Clean Energy Association (Abragel). This seal ensures the renewable origin of the energy and the adoption of differentiated practices in the social and community relations aspects by the electric power generation plants. Scheduled: Economic feasibility studies are under way at business units for projects that will be self-sufficient in clean power generation.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

High temperatures and heat waves require heavy use of cooling and ventilation equipment in industrial units (e.g. compressors, fans and motors) to ensure thermal comfort of employees and to meet food quality and safety standards.

Risk 19: Interruption in the supply of electrical power

Classification Physical risk.
Impact Medium-term (2030) and long-term (2050): A reduction in the Company's profit margins and results due to the increased cost of power generators. The financial impact of this risk could not be assessed at the time of reporting due to the lack of sufficient, reasonable and reliable information.
Susceptibility Company-owned operations: Slaughtering, deboning and processing units located in Argentina (Rosario) and slaughtering and deboning units in Brazil (Palmeiras de Goiás). Value chain: not applicable.
Relevant target(s) i. Reduce greenhouse gas emissions intensity by 30% by 2030 (Scopes 1 and 2); ii. Achieve net zero emissions, taking into account the market approach for Scope 2; and iii. Zero the Company's net emissions by 2035 (Scopes 1, 2, and 3).
Direct mitigation/adaptation efforts Implemented: The geographic diversification of business units is essential to Minerva Foods' strategy of consolidating its position in the animal protein export market. This allows for: i. Capitalize on the abundance of grazing land and reduce the dependence of the herd's diet on agricultural commodities; ii. Implement basis arbitrage to minimize raw material acquisition costs; iii. Mitigate health risks; and iv. mitigate climate risks. It is important to note that the plants in Australia provide a unique addition to the South American operations, maximizing commercial opportunities and operational synergies as well as reducing exposure to different risks. Additionally, the Company has implemented controlled firebreaks to prevent fires from neighboring properties to impact the industrial units, along with internal and external fire suppression systems, as well as periodic training of the Fire Brigades. There is also an Emergency Response Plan (ERP) for each of the industrial units. Furthermore, the Company has implemented energy efficiency projects in its industrial units (e.g. regular maintenance of cold room seals; installation of frequency converters to modulate compressors in machine rooms; shutting down equipment when it is not in use or when the room temperature has reached the required level), with performance indicators monitored weekly in a meeting with representatives from Engineering, Environmental and Sustainability. In addition, there are initiatives aimed at generating our own clean electricity, such as those implemented at the industrial units in Bucaramanga, Colombia, and Colac and Sunshine, Australia, producing 474,172 kWh, 1,245,676 kWh and 227,283 kWh respectively in 2023. Since 2020, all of Minerva Foods' operations have been powered by renewable sources of electricity, which are traceable through Renewable Energy Certificates (I-REC). Additionally, hydroelectric energy certificates were acquired in 2023. It is worth noting that in Paraguay, all of the energy consumed is already from renewable sources, so there is no need to acquire certificates. Through this initiative, carried out in partnership with the Minerva Energia business division, the Company aims to promote the production of energy generated from renewable sources with high performance while also achieving zero scope 2 emissions from the purchase of electricity using the market approach. Minerva Foods was the first company in Brazil to obtain the Renewable Energy Seal, issued by the Totum Institute in partnership with the Brazilian Wind Energy Association (ABEEólica) and the Brazilian Clean Energy Association (Abragel). This seal ensures the renewable origin of the energy and the adoption of differentiated practices in the social and community relations aspects by the electric power generation plants. Scheduled: Economic feasibility studies are under way at business units for projects that will be self-sufficient in clean power generation.
Indirect mitigation/adaptation efforts Implemented: Minerva Foods has achieved advances by incorporating the "seller's option" clause in contracts with its customers. This allows the company to maximize the competitive advantages of its geographic diversification by allowing for the possibility of transferring production to other locations in the event of operational risks. Scheduled: There are no scheduled efforts during the reporting period.

Context

Damage to power lines from wildfires and/or high winds could disrupt power to industrial facilities, resulting in increased use of generators.