Performance – material or immaterial? Natura 2009 Annual Report Consumer Goods Brazil a n n u a l r e p o rt n at u r a 2009 WHAT FOOTPRINT WE LEAVE CREATION OF SOCIAL VALUE In 2009, we once again increased the creation and distribution of wealth to our stakeholders: employees, suppliers, consultants, shareholders and government - to the latter by paying taxes. The increase in the amounts distributed is the result of several factors that arise from the strength of the market in which we operate, the consistent results due mainly to our strategy of growth in Brazil, and the more robust development of our operations in Latin America. DISTRIBUTION OF WEALTH (R$ MILLIONS)¹ Percentage of net revenues in the Crer para Ver (Believing is Seeing) program4 Invested tax incentives – Roaunet Law Incentivos fiscais investidos Lei Roaunet Audiovisual Law ICMS (state Value-Added Tax) in Minas Gerais ICMS (state Value-Added Tax) in São Paulo 1% Income Tax to CMDCA 5 1% Income Tax to Condeca 6 Grand total 2007 1.4% 2,484.8 2,059.5 1,098.0 2,101.6 814.3 227.0 445.0 51,700.3 2008 1.2% 3,767.0 2,852.8 400.0 2,000.0 540.7 0 1,015.0 54,738.0 2009 1.2% 3.768,2 2.422,2 920,0 645,0 0 938.0 0 59,856.0 Shareholders2 Consultants Employees Suppliers Government 2007 391.1 1,722.1 390.3 2,329.7 948.3 2008 425.9 2,023.8 556.4 2,357.2 1,276.7 2009 551,.9 2,302.5 643.0 2,687.6 1,547.3 1. The amounts invested in support and sponsorships are also taken into consideration in this matrix, but they are split among the benefited stakeholders. The matrix includes investments in projects or actions that are not intrinsic to Natura’s business and go beyond legal requirements. 2. The amount for 2007 was recalculated, excluding the amount related to the sharing of benefits, which is presented in the table on page 50. 3. We verified that, in general, the end stakeholder benefiting from these investments is society. The amounts allocated to the government are listed as tax investments in this table and also in the distribution of wealth table. 4. For further information, please see the text on the Crer para Ver (Believing is Seeing) Program. 5. CMDCA - Municipal Council for the Rights of Children and Adolescents of the municipalities of Cajamar, Itapecerica da Serra, Matias Barbosa, Canoas, Benevides and Jaboatão dos Guararapes. Since 2008, 1% of income tax has been transferred to Condeca. 6. Condeca - State Council for the Rights of Children and Adolescents of São Paulo.. CRER PARA VER (BELIEVING IS SEEING) Considered one of our high priority sustainability topics, education is a decisive factor for the development of a fairer society and one of the most effective mechanisms to change our world. To improve the quality of public education, we created in 1995 the Crer para Ver program. Our consultants actively participate in the program as they sell, without making any profit, exclusive products of the Crer para Ver line.The total amount raised is invested in educational projects developed in public schools that focus mainly on encouraging reading and writing. In 2009 we reached our target for funds raised in Brazil, which was R$ 3.744 million, and we added R$ 3.768 million that were allocated to the fund of the Crer para Ver program. INVESTMENT IN EDUCATION FOR PUBLIC BENEFIT IN BRAZIL (R$ THOUSANDS) 1. Due to changes in many accounting practices by various bodies, we recalculated the amounts for government in 2007, and for other stakeholders, except for consultants, in 2008. 2. The amounts reported correspond to dividends and interest on capital that were effectively paid to shareholders, that is, calculated on a cash basis. As a result, the historical data was changed. According to a survey carried out by Ipsos Insight in 2009, 46% of the NCs belong to the social-economic class B and 43% to the C social class. For 70% of the NCs, the activity of Natura consultant represents an income supplement and, for 22%, it is the only source of income. Most of NCAs, however, most of them, 53%, are from the B social class. For 49% of the Natura Consultant Advisers, the activity represents the only source of income. INVESTMENT MATRIX In 2009, we maintained the same proportion of 1.2% of investments in corporate responsibility in relation to Natura’s Net Revenues. Among the benefiting stakeholders who recorded a more significant increase are consultants, with an increase in investments in education and training (more information on page 41), and society, particularly due to the increase in investments in sponsorships and projects of civil society partners (see the next page). In environment, the highlights were once again the projects for offsetting greenhouse gas emissions selected by the Carbon Neutral Program. On the other hand, we saw a reduction in the resources used in management due to the restructuring process Natura undergone in 2009. MATRIX FOR INVESTMENT IN CORPORATE RESPONSIBILITY 1 (R$ THOUSANDS) Net funds raised from the Crer para Ver¹ Total amount from the projects developed and supported by the Crer para Ver2 Penetration of the Crer para Ver (% cycle)3 2007 2,487.8 4,330.0 8.2 2008 3,767.0 3,381.0 9.9 2009 3,768.2 4,075.6 7.1 1. Net funds raised refers to the net income of the program after deducting income tax. 2. The total amount from the projects refers to the total actually invested in the year (withdrawn from the fund and used in the projects). 3. Penetration is the indicator of the percentage of consultants who participate in the program divided by total potential consultants. Penetration data was considered until Cycle 18. At the end of the year, our penetration was 7.1%. The drop in this rate led us to make some adjustments. In order to mobilize consultants, we started in 2009 to implement a new strategy to reposition the brand and develop products, making the Crer para Ver line more attractive, which will bear fruit in 2010. In 2009 we extended the Crer para Ver program to the other Latin American operations, directing the focus of private social investment actions to education, and benefiting nongovernmental organizations and local institutions. The net funds raised from the sale of products from the Crer para Ver line in Latin American operations totaled R$ 430,000. In Argentina, where the program has been carried out since 2008, we expanded our work to 12 education institutions, 10 more than in the previous year. The countries that started to receive the Crer para Ver (Believing is Seeing) Program’s portfolio of products and to support educational causes include Peru, Colombia and Mexico. The Chilean operations, which were initially focused on the Consultora Natura Empreendedora Social (Social Entrepreneur Natura Consultant) program, will start to prioritize education from 2010. We will maintain the investment in the Empreendedora Social program, but independently from the Crer para Ver program. Employees, families, and third parties Consultants Consumers Suppliers Supplier communities² Surrounding communities Society3 Environment Total invested in stakeholders Management expenses Total Natura funds 2007 19,084.0 1,801.4 468.3 232.3 1,993.1 391.5 7,058.7 1,849.09 32,878.2 9,591.9 42,470.1 2008 18,729.3 2,566.8 270.9 212.8 647.0 342.8 8,777.4 5,467.2 37,014.2 7,148.3 44,162.5 2009 17,251.3 3,563.4 480.3 243.8 1,424.6 407.9 15,672.0 8,073.6 47,117.0 4,045.7 51,162.7 naturaannualreport 76 naturaannualreport 77 pp 76-77 Natura have made a significant attempt to link sustainability topics to financial impacts of the business thereby demonstrating that these ‘non-financial’ issues are in fact central to the way the business is run. The full Annual Report provides extensive detail on specific material issues and combines qualitative and quantitative information. 38 Integrated thinking in reporting
