2016 | Braskem | Annual Report 2

Summary 34 03 07 15 24 Message from the Business Sustainability Governance Financial Leader Braskem Strategy and Compliance Performance

45 55 78 99 110 Health, Safety, GRI G4 and the Content Innovation Stakeholders Environment Index Attachments

116 117 120

Corporate Glossary Information Credits 2016 | Braskem | Annual Report 3

in the Brazilian market, we Message from the also achieved record sales results. Domestic sales of basic petrochemicals were 1.8 million Business Leader tons, up 5%. Resin sales totaled G4-1, G4-2, G4-SO5 Global Compact – Principle 1 3.3 million, with a slight decrease 2016 was one of the most the United Kingdom from the of 1%. Our commercial strategy, challenging times in Braskem’s European Union and the fierce however, made it possible to history. Nevertheless, we have US presidential election. Such take advantage of opportunities much to be proud of. Our occurrences, coupled with in production sectors less Company has accomplished China’s new growth pattern, affected by the Brazilian crisis, unprecedented achievements, led to moderate growth in helping to expand our exports. the result of a consistent business international trade - below 3% In 2016, international shipments strategy based on international for the fifth consecutive year of resins from Brazil totaled 1.7 presence, diversification of - and to a reduction in global million tons, an expansion of raw materials and constant investment. 24% compared to 2015. improvement of operational efficiency, competitiveness, and In Brazil, the recession scenario Diversifying raw materials and Governance and Compliance persisted. The GDP recorded geographic presence continued standards. These pillars not a strong decrease of 3.6% to be a priority in our global only ensured us the resilience (repeating the level of the strategy. We achieved a 100% necessary to overcome the 3.8% drop in 2015), driven average utilization rate of the turbulence, but also proved that by reduced credit and the polypropylene plants in the we are on the right track towards prolonged political-institutional United States and Europe, which a promising future of sustainable crisis, which aggravated the was reflected in a 2% increase growth. effects of historical bottlenecks in sales volume in the respective of competitiveness. was the basis for achieving a historical record of 8.5 million regions compared to 2015, Scenario record EBITDA for the Company tons of basic petrochemicals, reaching a level of two million The main adversities effecting Historical Operating in both Brazilian reais (BRL 11.5 a volume 3% higher than in tons. US$ our activities in 2016 came Performance billion) and in dollars (US$ 3.3 2015, with an average cracker from the uncertainties in the In 2016, Braskem achieved good billion) at the end of 2016.* utilization rate of 92% (the 2016 marked the start of political and economic scenario, operating results thanks to the best in the historical series), an operation of the Petrochemical 3.3 both globally and in our main gains in production efficiency It is important to note that, increase of three percentage Complex in Mexico, a milestone BILLION country of operation, Brazil. and stronger integration among despite the recession in Brazil, points (p.p.) compared to the in our internationalization At the international level, we the industrial units in Brazil, in 2016 our Brazilian units previous year. Resin production process that required a US$ 5.2 billion investment, the largest in EBITDA at faced a slowdown in the pace Mexico, the United States, and of basic petrochemicals and reached 4.9 million tons, up 4%. amount ever invested by a the end of of world economic growth from Germany, and commercial offices resins recorded good operating 2016. key factors such as the exit of around the world. This formula performance. We achieved a Despite the weak demand industrial company with Brazilian

* The preliminary unreview financial information by the auditors and the Fiscal Council set forth in this document is subject to adjustments and modifications. The review of the financial statements and related notes for the period ended December 31, 2016 is still in progress. Adjustments and modifications to the financial statements may be identified up to its issuance, which could result in differences from this preliminary unreview financial information. 2016 | Braskem | Annual Report 4

capital in a greenfield project which is eight times lighter than At the end of 2016, as a result abroad. In the fourth quarter, steel and ten times more durable of the full provisioning of the the average operation rate of than high density polyethylene resources established through the three polyethylene plants in (HDPE), at a competitive cost. the Global Agreement to be paid the Complex was 73%, reaching to Brazilian and international 97% in December. Polyethylene Governance and Compliance authorities in the fourth quarter US$ production in Mexico totaled Illegal acts committed by former of 2016, the Company posted a 443,000 tons in the year. members and agents of Braskem consolidated net loss of BRL 768 were confirmed in 2016, based million for the year, even after It is also important to note the on information disclosed in the retained earnings in the three 5.2 closing of the ten year contract context of Operation Lava-Jato. previous quarters. BILLION to purchase ethane imported from the United States from an As the main interested party It is important to remember that, invested in affiliate of Enterprise Products. clarifying the case, Braskem since the second quarter of 2016, the Mexican The agreement is part of a acknowledged its responsibility Braskem had already implemented Petrochemical project to modernize and make for those acts and regrets a wide revision project of its Complex flexible the use of raw material past conduct. The internal Corporate Governance structure, of the petrochemical plant in investigation process culminated which aimed to implement a new Bahia, which predominantly in the global agreement signed Compliance Program in order to operates using naphtha. The with authorities in Brazil, the strengthen the responsible area initiative, with an investment United States, and Switzerland, with direct report to Braskem’s of BRL 380 million, will enable announced in December. Through Board of Directors and significantly the production of up to 15% of the Global Agreement, Braskem reduce the possibility of any ethylene using ethane as raw agrees to pay the amount of deviation of a similar nature to material. The new operation is BRL 3.1 billion as a fine and those identified. In addition to the expected to begin in the second indemnity, and implement initiatives already implemented “A” half of 2017. improvements in its compliance in 2016, the program presents LIST and internal control systems. This almost a hundred initiatives that The prospects are promising commitment will be accompanied will also be carried out throughout after we commissioned the by external monitors, appointed the course of 2017. of CDP Ultra High Molecular Weight by the Department of Justice Investor, Polyethylene (UHMWPE) plant in (DOJ), the Securities and Sustainable Development international La Porte, Texas, USA, in 2016, to Exchange Commission (SEC), Braskem maintains a consistent seal recognizes enable better customer service in and the Federal Public Prosecutor course of action to promote companies North America and Europe. The (MPF - Ministério Público Federal) sustainable development. We with standards plant was built from Braskem’s for up to three years, to ensure are proud to be the first industry of excellence own technologies, enabling compliance with the terms of the in Brazil to join the “A” List in carbon management. production of this product, agreement. of CDP Investor in 2016, an 2016 | Braskem | Annual Report 5

international seal that recognizes which aims to foster businesses companies with excellent carbon and initiatives for appreciation of management standards. This recovery, reinforcing Braskem’s achievement is in line with commitment to the plastic chain our engagement in different in Brazil. national and global forums linked to promoting sustainable Innovation development such as UN Global Our Company’s contribution to Compact, of which we have been a sustainable world is supported a signatory since 2007, as well by regular investments in as supporting its outstanding research and development of participation in lists such as innovative solutions capable the Dow Jones Sustainability of providing high levels of Emerging Markets Index (DJSI) productivity and reducing and the Corporate Sustainability impacts on the environment. Index (ISE) of the Brazilian Stock Innovation initiatives are the Exchange (BM&FBOVESPA). result of the joint efforts of our Technology and Innovation Among the most important Centers located at the Triunfo initiatives in 2016 is the petrochemical complex in Rio Movimento Menos Perda Grande do Sul, Brazil, and Mais Água (Less Loss More in Pittsburgh, United States, Water Movement), a water as well as our laboratories in management project aligned with Campinas, in São Paulo, Brazil, the UN Sustainable Development focused on biotechnology. In Goals initiated by the Brazilian addition, in 2016 we expanded Network of the Global Compact, our innovation structure which has Braskem and SANASA with the inauguration of the as leaders. European Technical Center, located at the Wesseling plant With a focus on generating in Germany. A highlight in more sustainable products, it is product development was the important to highlight the launch launch of a polypropylene resin of 100% recycled polypropylene named under the brand Braskem and polyethylene resins Amppleo. The new resin, used to produced from big bags and manufacture high performance sacks discarded. These initiatives foams, can withstand include the Wecycle platform, temperatures up to 100°C 2016 | Braskem | Annual Report 6

without deformation and may be In Brazil, despite the consistent Concerning the dynamics of In this context, the Company’s fully recycled, aligned with our decline in inflation and rising the oil market, expectations strategy remains focused on sustainable commitments. investor confidence seen in are to maintain the agreement diversifying the raw material recent months, the challenges between OPEC members and and geographic profile as a It is also worth mentioning the of the macroeconomic scenario other producers to limit global way to mitigate the volatility of use of of I’m green™ Polyethylene for 2016 continue in 2017. supply, which may lead to an the petrochemical cycle, taking (green plastic) to produce Although resumption of growth increase in the price of oil and advantage of the synergies equipment and parts in zero is expected, the consensus is consequent increase of the between Braskem’s industrial gravity. The project was the result that it will occur at a slow and competitiveness of the gas units and commercial offices of a partnership with Made In gradual pace. based producer compared to the for both marketing products Space, a leading North American naphtha based producer. and identifying new investment company in the development In the international market, opportunities, reinforcing of 3D printers for zero gravity according to the International Concerning the petrochemical petrochemical activity in order operation and a supplier for the Monetary Fund (IMF), market, new polyethylene to guarantee the operational North American Space Agency the outlook for advanced capacities in the United States efficiency, productivity, and (NASA). This is one of the essential economies improved for 2017 may pressure the spreads of competitiveness of units in advances for a possible mission to and 2018, due to stronger polyethylene in the international all regions, with emphasis on Mars and we are very proud to be economic activity in the second market whithin the period stabilizing production at the part of this epic moment. half of 2016 and projected beginning in the end of 2017 Petrochemical Complex in fiscal stimulus in the United and continuing mainly in Mexico. We are also committed Perspectives States. For emerging markets 2018, with expected recovery to continuously improving Despite the adversities, 2016 was and developing economies in beginning in 2019. Regarding the compliance program and a year that once again proved general, prospects for growth the other resins (PP and PVC), governance practices, maintaining the soundness of Braskem’s have marginally worsened, expectations are to maintain financial soundness, and cost operations. We are a strong with positive reviews for China the spreads at sustainable discipline. Thus, we continue Company, committed to the growth and negative for countries levels, especially in the North on the mission of building an of the regions where we operate, such as Mexico, influenced by American polypropylene market, increasingly global Company. and firm in our commitment to uncertainties regarding the where there is no new capacity contributing to the sustainable election of Donald Trump in the beginning operation until the Enjoy your reading development of the planet. United States. end of this decade. Fernando Musa 2016 | Braskem | Annual Report 7

01. Braskem G4-6, G4-9, G4-12

PRODUCTION OF OVER

INDUSTRIAL 41 UNITS million 100 29 IN BRAZIL, SIX IN THE UNITED STATES, 20 EXPORT TO CLIENTS FOUR IN MEXICO, TWO IN GERMANY TONS/YEAR OF THERMOPLASTIC RESINS AND IN APPROXIMATELY OTHER CHEMICAL PRODUCTS 100 COUNTRIES

OVER 96,4 THOUSANDS PEOPLE IMPACTED BY THE 7,6k 8k PRIVATE SOCIAL BRL 10 TEAM MEMBERS SUPPLIERS INVESTMENT 11.5 NEW APPLICATIONS WORLDWIDE WORLDWIDE PROJECTS BILLION OF EBITDA* AND 73 PATENT EXTENSIONS. THROUGHOUT ITS HISTORY, GROSS BRASKEM HAS FILED 1,030 REVENUE OF PATENT-RELATED INNOVATION PROJECTS BRL DOCUMENTS BRL UNDER DEVELOPMENT WORTH 2.9 334 US$ 2.6 BILLION1 BILLION INVESTED* 1 Risk-adjusted net present value of the company’s project portfolio up 55.4 to December 2016 BILLION*

*Unreviewed financial information by the auditors and the Fiscal Council. 2016 | Braskem | Annual Report 8

With annual production of over 20 companies from the Odebrecht Mexico, in the latter through a million tons, Braskem is now the Group2 and the Mariani Group, joint venture with the Mexican largest petrochemical company Braskem3 has over 7,600 Team company Idesa. in the Americas and is fifth in the Members and is one of the few world in production capacity of petrochemicals in the world to G4-6 thermoplastic resins (polyethylene, maintain integrated operations for polypropylene, and polyvinyl producing basic petrochemicals Associated with diversifying chloride) and basic petrochemicals and thermoplastic resins, which its raw materials matrix and (such as ethylene, propylene, provides competitive advantages creating new sustainable butadiene, and others). Braskem from gains in scale and chemical and plastic solutions, is also a global manufacturer operational efficiency4. Braskem’s growth strategy is 200 of biopolymers, with annual based on strengthening its production capacity of 200,000 tons G4-4, G4-7, G4-9 relationship with its Clients, TONS OF of I’m green™ Polyethylene (green developing the petrochemical TM I’M GREEN plastic) produced from sugar cane, Its global performance profile and plastic chains, searching for a 100% renewable origin. enables the Company to export operational efficiency, and on to Clients in approximately internationalization, the latter Braskem’s G4-3, G4-4 green plastic 100 countries and to operate through geographic expansion produced from in 16 regional offices and 41 focused on the Americas. All sugar cane. Established in August 2002, industrial units located in Brazil, without giving up the safety and as a result of the merger of six the United States, Germany, and quality standards of its products.

TO LEARN MORE, VISIT www.braskem.com

Focusing on sustainable growth, Braskem sustains an organizational Principles culture common to all its operations: A set of shared principles, concepts, and Values and criteria that promote efficiency and clarity in interactions between Leaders and Subordinates, and seek to ensure business coherence in its G4-56 various Businesses.

2 Copene, OPP, Trikem, Proppet, Nitrocarbono, and Polialden 3 In order to identify the entities included in the consolidated financial statements and entities not covered by the report, we reference the Parent Company’s financial statements prepared in accordance with accounting practices adopted in Brazil, in compliance with the provisions of Law 6,404/76 (“ Lei das S/A - Corporation Law”) and subsequent adjustments, and the standards issued by the CPC and in accordance with the International Financial Reporting Standards (IFRS) issued by the IASB, and are being published together with the consolidated financial statements [G4-7, G4-17] 4 In order to clarify the scope of this material, it is worth mentioning that the results of quantiQ were reported in the Financial Statements of the report, but are not considered in the social and environmental indicators. Its management was already carried out independently even before the sale of the company. quantiQ was sold on 1/10/2017 (signing), with closing of the transaction on 4/03/2017 (closing). 2016 | Braskem | Annual Report 9

Markets and In 2015 and 2016, the chemical and petrochemical New Fronts sector experienced a high spread cycle, which boosted G4-8 the search for better businesses in key markets such as Petrochemical production focuses The performance of the sector is the United States and Europe, places that showed higher on transforming oil by-products, associated with the fluctuation usually naphtha and natural gas, of prices of chemical and levels of economic performance. into materials for industrial use petrochemical commodities or into end products intended for traded in the international society. market. The spreads are formed from the differences between This is a fundamental sector the prices of oil and its by- for the growth of the economy products, defining/ and they and the development of modern define the income results of society for its potential of the industries in the sector. creating new solutions and It is a condition requiring materials from chemistry and companies to constantly search plastic, capable of providing for operational efficiency and more practicality for people’s rigid control of production daily lives and reducing the levels costs to guarantee the balance of environmental impacts in and safety of activities during different market segments, such challenging moments, resulting as construction, agribusiness, from lower spread cycles. automotive, among others. In 2015 and 2016, the chemical Given these characteristics, and petrochemical sector According to data from the Brazilian included - dropped from sixth ranking by France and India, and the petrochemical industry is experienced a high spread Chemical Industry Association to eighth place in the sector’s followed closely by the United constantly evolving technologically. cycle, which boosted the search (ABIQUIM5) , as a result of the worldwide ranking. Today, the Kingdom. The top three positions The market trend follows the line for better businesses in key country’s political and financial industry accumulates net sales in the global ranking are occupied for diversifying raw materials and markets such as the United crisis, the Brazilian chemical of US$ 113 billion, after shrinking by China, the United States, and their sources, seeking to develop States and Europe, places industry - in which Braskem’s nearly 20% in 2015, having been Japan, respectively. renewable inputs. The goal is to that showed higher levels of petrochemical production is also surpassed in the international find innovative solutions that are economic performance. This capable of generating increasingly context helped offset challenges more social and environmental in emerging markets, which was 5 Source: ABIQUIM http://www.abiquim.org.br/comunicacao/noticia/detalhe/2433/industria-quimica-brasileira-perde-posicao-no-ranking- benefits. the case in Brazil. mundial-do-setor (portuguese only) 2016 | Braskem | Annual Report 10

Braskem Worldwide G4-4, G4-5, G4-6

NETHER LANDS UNITED STATES PITTSBURGH

GERMANY

MEXICO

VENEZUELA INDUSTRIAL UNITS

COLOMBIA SINGAPORE BASIC POLYPROPYLENE (PP) BRAZIL PETROCHEMICALS Brazil Brazil Mauá (SP) Camaçari (BA) Paulínia (SP) Duque de Caxias (RJ) Germany Mauá (SP) Schkopau e Wesseling PERU ADMINISTRATIVES OFFICES Triunfo (RS) United States Mexico Marcus Hook (Pennsylvania) TRIUNFO Administrative Headquarters Coatzacoalcos (Veracruz) La Porte (Texas) Brazil TECHNOLOGY AND INNOVATION Oyster Creek (Texas) São Paulo (management and CHILE administrative offices) PVC AND SODA Seadriff (Texas) Centers for Technology and Neal (West Virginia) Brazil Administrative Offices Innovation Maceió (AL) Brazil Brazil Marechal Deodoro (AL) PE + PP ARGENTINA Salvador (BA) Triunfo (RS) Porto Alegre (RS) Camaçari (BA) Brazil United States United States Pittsburgh (EUA) Camaçari (BA) Rotterdam POLYETHYLENE (PE) Duque de Caxias (RJ) United States Partnership with companies and Triunfo (RS) Philadelphia (Pennsylvania) Brazil external laboratories for research in Germany chemistry and polymers, Frankfurt Cubatão (SP) GREEN PE petrochemical or renewable source. Santo André (SP) Green PE Brazil Commercial Offices PE Mexico Polyethylene Triunfo (RS) polyethylene LEARN MORE IN Germany United States manufactured Coatzacoalcos (Veracruz) PP Argentina Netherland from sugarcane polypropylene www.braskem.com.br > UTEC Singapore Mexico ethanol, Chile Peru PVC United States renewable raw Braskem in the world Colombia Venezuela polyvinyl chloride La Porte (Texas) material source. 2016 | Braskem | Annual Report 11

Business STRATEGY Strategic Planning Model PILLARS Braskem’s strategic planning is based on the long-term, but increasingly seeks to act efficiently, in order to adjust the paths of business development to the global market scenarios. In this With global operations, Braskem respect, the Company’s growth is based on: seeks to diversify sources of raw materials, production efficiency, and innovation with sustainable Survive PRODUCTIVITY AND COMPETITIVENESS returns, in terms of products • Focus on the Client and Guarantee of operational efficiency, productivity, and competitiveness and production process. All this the market of the units in all regions, especially the stabilization of production without losing focus on the • Competitive raw at the Braskem Idesa Petrochemical Complex in Mexico, in 2016. Client and market trends. These materials and energy guidelines are summarized in • Operational productivity three conceptual and strategic and efficiency pillars: to survive, to grow, and GEOGRAPHICAL DIVERSIFICATION to perpetuate. Expansion of the global presence and synergies between industrial Grow plants and commercial offices around the world to explore export • Internationalization with opportunities, mitigate the volatility of the petrochemical cycle, expansion focused on the and reduce dependence on specific markets on the Company’s Americas consolidated results. • Serve the global market • Renewable chemicals DIVERSIFICATION OF THE RAW MATERIAL PROFILE Seek alternative sources of raw materials in order to reduce the dependence on naphtha, and adopt renewable sources with lower environmental impact.

Perpetuate • Competencies and technology COMPLIANCE AND GOVERNANCE PRACTICES • People and organization Rigorous Compliance and Corporate Governance model, as a way of • Sustainability and innovation guaranteeing excellence of operations in the various global markets • Governance and Reputation and protecting the business while maintaining financial soundness and cost discipline. 2016 | Braskem | Annual Report 12

Business Model PURPOSE: To improve people's lives by creating sustainable chemical and plastic solutions.

RAW SEGMENTS/ MARKET AND MATERIAL PRODUCTS SOCIETY

SALES PER SECTOR** 33 3 22% Food Packaging Hygiene 5% and Cleaning 13% Industrial Ethanol 5% Agricultural 41 Gas 13% Construction 5% Cosmetics and 23 8% Retail Pharmaceuticals Basic Polymers*** Biopolymers Petrochemicals (2nd Generation) 8% Consumer Goods 4% Automotive Naphtha Propylene* (1st Generation) 17% Other

INNOVATION Total investments in innovation: BRL 275 million Filing of 10 new patent applications

Investment in People Production Wecycle st nd BRL 19 million invested in training 1 Generation 2 Generation The first polypropylene and polyethylene Ethylene 3,459,861 t PE 3,151,646 t resins made from fully recycled content Propylene 1,400,466 t PP 3,599,653 t were launched. Combined production Water Resources PVC 594,039 t volumes can reach 50 t/month 15.4 million 3 m of water (reused/recycled) 9,253 ktCO₂e / year Scope 1: Economic Social Investments Scope 2: 980 ktCO₂e / year Performance*** and Community Raw material cost naphtha and gas*** Number of Team Members EBITDA of R$ 27.5 mi in social Naphtha BRL 13.9 billion R$11.5 bi and environmental, cultural 7,656 and creation of around 40,000 jobs (include condensate) in the value chain up 23% and sports projects, directly compared benefiting more than Gas BRL 6.5 billion (includes ethane, propane, HLR, and propylene) Energy consumption: 10.25 GJ/t to 2015 96,400 people in 2016.

*Considers 60% propane for US plants, 22% propane for Europe, and 18% acquired from third-parties for the plants in Brazil. **Resin sales in Brazil ***Unreviewed financial information by the auditors and the Fiscal Council. 2016 | Braskem | Annual Report 13

Recognition INTERNATIONAL Global Compact – Principles 6, 7, 8, 9 and 10 CDP INVESTOR Braskem’s operational soundness category of the O Estado de S. Paulo In 2016, Braskem became the first representative of the Brazilian industry to join the “A List” of and sustainability were newspaper Empresas Mais award. CDP Investor Global, for the transparency and performance of the Climate Change strategy. The acknowledged by important regional Another highlight was receiving list is reserved for public companies with excellence in greenhouse gas management. As for the and international recognition from the award as best company in score, Braskem reached the highest score among all companies in Latin America. the major press and the market the Chemical and Petrochemical throughout 2016. sector from Valor 1000, one of the most prestigious yearbooks in the CDP SUPPLY CHAIN In Brazil, the Company was a Brazilian press. Braskem won two acknowledgments in 2016 regarding the engagement of its suppliers in climate highlight of the sector in the change. The Company joined, for the first time, the “A List” of the CDP Supply Chain Global. It also award As Melhores da Dinheiro In addition, Braskem made entered the list of the 29 companies with best practices in this aspect, a new ranking created by CDP, a publication of magazine IstoÉ important achievements, some after evaluating the practices of 3,300 companies worldwide. Dinheiro, and ranked 3rd in the of them unprecedented among Chemical and Petrochemical Brazilian companies: DOW JONES SUSTAINABILITY INDEX For the fifth consecutive year, Braskem has been selected to be part of the select group of 95 global companies in the Dow Jones Sustainability Emerging Markets Index (DJSI). The emerging market index on the New York Stock Exchange (NYSE) identifies companies that excel by effectively incorporating sustainability into their business strategy.

TOP WORK PLACES 2016 For the third consecutive year, Braskem was recognized as a top place to work in the Greater Philadelphia Region in the United States. Braskem was also recognized as a top place to work for the fourth year in Pittsburgh, United States.

THE SUSTAINABILITY YEARBOOK

Braskem has been included for the third time in The Sustainability Yearbook, a publication prepared by RobecoSAM, an international investment consulting agency specializing in sustainability. The ranking lists the 457 most sustainable companies in the world, with Braskem among the leaders in the global chemical industry and classified in the Bronze category, which recognizes companies with ratings greater than 54 points and whose performance is between the 5% and 10% best evaluated in their sectors. 2016 | Braskem | Annual Report 14

REGIONAL - BRAZIL

In the area of diversity, Braskem is among the ten best evaluated by women in the labor market, taking ninth place and being the only one in DIVERSITY its sector to be on the list, according to the survey conducted by the site Love Mondays, specializing in evaluating careers. The survey, based on 12,000 interviews, defines a ranking of 200 companies, among which Braskem is listed among the top 10.

Green Plastic became the first product in the Brazilian petrochemical industry to have its carbon footprint certified by the new System of Measurement and Certification of the Carbon Footprint of Products by ABNT (Brazilian Association of Technical Standards). The measurement GREEN POLYETHYLENE confirmed that the product has a negative footprint (-2.78kg of CO2eq per kg of product), in other words, it helps to sequester CO2 emissions from the atmosphere.

FGV recognized two initiatives: CENTER FOR • The increase in the use of video-conferences to reduce travel was highlighted in the study “Sustainability in the area of Information SUSTAINABILITY Technology,” from Insight Case Studies magazine, from the Getúlio Vargas Foundation. A total of BRL 4.1 million was saved through STUDIES (GVces) 3,270 video-conferences, which avoided the emission of 1,238 tons of GHG (CO2e). OF FGV-EAESP • Less Loss, More Water: An initiative by the Brazilian Network of the Global Compact, which has Braskem and SANASA as leaders, was recognized by GVces Corporate initiatives among the 10 best cases of water resource management in Brazil.

In 2016, Braskem was selected for the 12th time to be a part of the Corporate Sustainability Index (ISE) of the Brazilian Stock Exchange (BM&FBOVESPA). The ISE BM&FBOVESPA Company has been part of this index since its inception in 2005, and its permanence reflects its commitment to best practices of Corporate Governance, social responsibility, economic and financial management, and environmental preservation.

Braskem’s inventory of greenhouse gas emissions (GHG) received, for the sixth consecutive year, the Gold classification of the Brazilian GHG Protocol BRAZILIAN GHG Program, due to coverage of emissions 1, 2, and 3 with independent external assurance. The classification was granted in 2016, based on the last PROTOCOL PROGRAM inventory, in 2015, calculated by the Company.

The Eco Brasil Award, carried out by Amcham (American Chamber of Commerce), and the newspaper O Estado de S. Paulo, recognizes corporate sustainability practices in processes and products or services. Braskem was the winner in the Processes – Large Companies category - with Braskem Labs, The Braskem ECO 2016 AWARD an incentive program for entrepreneurs. In its 34th edition, the award had 71 entries, highlighting projects that reduce energy and water consumption GHG emissions in the production process, reduce waste emissions, and certify a sustainable chain. inventory received, for the sixth Braskem won the Ecomagination Award, awarded by the GE Company to clients who achieved the positive balance between industrial consecutive production and sustainability challenges. The Mobile Reverse Osmosis System, implemented at PP 4 ABC in São Paulo (Brazil), was GE ECOIMAGINATION year, the Gold recognized for its high positive impact, exemption of Health, Safety, and Environment risks (HSE) related to handling hydrochloric acid and AWARD classification sodium hydroxide (caustic soda), economic gains of US$ 950,000 per year and for optimizing the use of 128.115 m³ per year of drinking of the Brazilian water, in addition to the guarantee of continuing to use demineralized water in the Company’s production process. GHG Protocol Program 2016 | Braskem | Annual Report 15

02. SUSTAINABILITY STRATEGY

Strategic macro objectives: ratified to the goals for 2020.

280 million 86% ASSESSMENT SINCE 2002, INVESTMENTS OF AROUND BRL THE IMPLEMENTATION OF IMPACTS 280 MILLION IN IMPROVEMENTS IN WATER LEVEL OF THE TEN REGARDING EFFICIENCY AND OVER BRL 100 MILLION MACRO OBJECTIVES HUMAN RIGHTS. TO IMPROVE OPERATIONAL AND ENERGY REACHED 86% IN EFFICIENCY. 2016. 2016 | Braskem | Annual Report 16

For Braskem, to evolve is to grow sustainably. This is a principle that and the relation to risks and Active participant in the process and sanitation; Decent work and is materialized by the constant search for innovative solutions, created opportunities associated with for developing these SDGs economic growth; Responsible with the purpose of creating value to the business and reputation to the a given macro objective. The during Rio+206 and aware of consumption and production; brand, while minimizing any possible environmental and social impacts sponsors are responsible for its role in creating a green and Industry, innovation and caused by the Company’s activicties. establishing, maintaining, and increasingly inclusive economy, infrastructure; Sustainable cities strengthening the integration Braskem has inserted all 17 and communities, and Climate The Company seeks to develop the sustainability strategy aligned of the Business strategy and UN commitments as an integral change. with day-to-day business practices. Since 2002, Braskem has invested the corresponding sustainability part of its 10 strategic macro around R$ 280 million in improvements in water efficiency and over R$ objectives. objectives for sustainability. Some of the actions include 100 million to improve the operational and energy efficiency of all its investing in innovation and industrial units in Brazil and abroad, adopting innovative processes and The sponsors’ recommendation Based on a correlation process, technology to create new and technologies. was validated by Braskem’s the Company defined 79 sustainable products; promoting Business Leader and Vice concrete contributions that can recycling solutions for plastics; Presidents. The evolution of the be put into practice through local development through work was systematically reported its businesses and products. training of people, suppliers to the Company’s Sustainability Among the 17 objectives, and customers; improving Committee, aiming to promote seven were defined as more management practices, targeted decision-making, impacting and with a higher especially those related to SUSTAINABILITY focusing on the long term. The degree of contribution. They gender equality, discrimination ALIGNED WITH implementation level of the ten are: No poverty; Clean water and transparency. macro objectives reached the BRASKEM’S BUSINESS 86% mark.

One of Braskem’s ten strategic macro objectives Macro objectives and the (MOs) is to be among the business benchmarks Sustainable Development MACRO OBJECTIVES in Brazil and worldwide for its contribution to Goals (SDGs) Sustainable Development. FOR SUSTAINABLE Defined by the United Nations DEVELOPMENT BRL (UN) in 2015, today the Sustainable Development Goals See the infographic on page 17 to understand how the are the new benchmark for strategic macro objectives for sustainability correlate 280 governments, civil society and with the UN Sustainable Development Goals MILLION With this vision and focus on growth opportunities for the coming other partners in designing years, Braskem defined its work foundation based on ten strategic business strategies focused on macro objectives for sustainability. Strengthened in 2016 and with eradicating poverty, promoting invested in new goals to be achieved by 2020, this work guides Braskem’s prosperity and well-being improvements actions at all levels and its implementation and results are monitored protecting the environment and 6 Held in Rio de Janeiro in 2012, Rio+20 (or United Nations Conference on Natural in water Development) aimed to discuss the renewal of political commitment to sustainable development. efficiency. by sponsors from several areas, chosen by their area of operation addressing climate change. 2016 | Braskem20 |1 Annual6 | Brask Reportem | Relatório Anual 217

Macro obje tiv s To be among the benchmarks in Chemical, Occupational, and Process Safety in the Global To be among the top three To be one of the global benchmarks in Chemical Industry. thermoplastic resin producers in the the sector for its contribution in world while maintaining the Sustainable Development. Investment Grade rating in the three major international agencies.

INTERRELATIONS o FOR SUSTAINABLE DEVELOPMENT To be one of the five largest traders To be recognized as a company that G4-15 of polyethylene (PE) and supports its Clients in the development polypropylene (PP) from recycled All macro objectives defined of environmental and social solutions content in the world and become an by Braskem contribute to in Chemistry and Plastics, through its Post-consumption important driver of the growth of products & services. the 17 UN Sustainable plastic recycling in Brazil. Development Goals. Goal Braskem took part in the process for defining the SDGs between 2012 and 2020 2015 as a Member of the To be among the leading producers of chemicals and Brazilian Committee of the o To achieve the "excellent" reputation thermoplastic resins from Global Compact, actively level in the Citizenship dimension of ® renewable raw materials. And participating in the the RepTrak Pulse, being remain the world's largest recognized by the Community and Sustainable Development producer of thermoplastic resins Society for its contribution to from renewable sources. Summit. improving human development.

Sustainable Development Goals To be among the benchmarks in the use of water resources in the To be among the best major global chemical industry in terms chemical industries in the world in To be among the world's best major of water consumption and water intensity of energy consumption chemical companies in intensity of reuse rates. and to be a major user of Greenhouse Gas (GHG) emissions while renewable energy sources. maintaining the use of renewable raw materials. 2016 | Braskem | Annual Report 18

Multiplier Effect of TO LEARN MORE Sustainability Strategies ABOUT BRASKEM’S G4-18, G4-19, G4-20, G4-21, G4-24, G4-25, G4-26, G4-27 SUSTAINABILITY Braskem is aware that achieving Braskem’s Materiality Matrix Matrix show the aspects of STRATEGY, VISIT the goals is only possible reflects this concern in constantly greatest importance to Braskem’s through clear, open, and reducing possible negative stakeholders and are aligned www.braskem.com.br/material- transparent communication with impacts and increasing the with the ten strategic macro issues-assessement all its stakeholders, including positive impact of its business objectives for sustainability, in a partners in the private sector, and its presence in different prospect up to 2020. governments, and civil society. locations. The results of this

MATERIALITY MATRIX Environmental MATERIALIDADE

21 1 2 4 26 (1) Non-renewable resources (2) Water Critical High (3) Climate change and energy High (4) Air 5 13 27 3 23 8 28 (5) Waste Moderate (6) Transportation (7) Biodiversity Low (7) Biodiversity Mexico 9 (8) Post-consumption 10 20 (9) Suppliers – environmental management BRASKEM’S LEVEL OF Medium 22 (10) Product development – environmental 25 17 29 11 24 CONTROL OR INFLUENCE LEVEL OF Social UPON THE ASPECT

IMPACT (11) Jobs BRASKEM (11b) Jobs - USA 6 (12) Freedom of association 11b (13) Health and Safety Low 19 12 (14) Training and career 18 Minimum Low Medium Strong 7a (15) Equal opportunities (16) Property security (17) Safe use of products (18) Grievance mechanisms (19) Suppliers – social management MATERIAL ASPECTS Economy and governance Irrelevant 16 7 14 15 (20) Economic Performance (21) Social investments and community (22) Public assistance (23) Local suppliers (24) Free competition Irrelevant Low Medium High (25) Corruption (26) Public policies (27) Product development - social LEVEL DEGREE TO STAKEHOLDERS (28) Labor from Local Communities (29) Transparency and integrity 2016 | Braskem | Annual Report 19

MAPPING OF STAKEHOLDERS Category of stakeholders Stakeholders Means of engagement interacting with Braskem Political/strategic Trade unions, regulatory agencies, professional associations, executive branch, legislative branch, public prosecutor’s office, Meetings, Reputation Survey* environmental agencies, public/regional opinion, NGOs, financial market analysts, auditors Industry Industry trade shows, Participation in sector meetings Influenciators Competitors, trade associations Media Coordinators, specialized media, general media, social networks/ Press Releases, Meetings, Interviews, Reputation Survey* virtual environment Academy Research centers, schools, researchers, universities, Meetings, Reputation Survey*, Projects in partnership technical schools Suppliers Meetings, E-Mails, Internet Channel with exclusive access, Raw materials, Petrobras, indirect materials, services, technology Reputation Survey* Financial market Meetings, Website “Investor Relations”, Reports, Video conference Controlling shareholder, minority shareholder, board of directors, Facilitators on results financial institutions, debt provider, banks E-Mails, Internal Campaigns, Newsletters, Safety Dialogues, Team Members Recognition Award, Intranet, Reputation Survey*, Climate Survey Team Members, third parties (every two years), Communication Survey (every two years) Communities Projects, Direct Relationships with Local Representatives from the Impacting Residents, local leadership, partners initiatives Institutional Relations Area, Reputation Survey* Society Reputation Survey* Abc 18+/ national, families of Team Members Meetings, Visits to Facilities, Technical and Relationship Events, Beneficiaries Clients Industry Trade Shows, Sponsorship, Internet channel with exclusive Clients of end consumers distributor, Unib, Unipol, Unvin, access, Sales support service by account managers, Technical international development agenda, Reputation Survey* *The reputation survey has been carried out each year since 2009, with the support of the Reputation Institute. The program relies on an Image and Reputation Management Committee, with participation of representatives of all Company areas, responsible for discussing the main risks and opportunities in the production process and the strengthening of the trust of Braskem’s stakeholders. 2016 | Braskem | Annual Report 20

Human Rights G4-18

Commitment to the principles and Organization (P&O), Health, that govern Human Rights Safety, and Environment (HSE), worldwide is embedded in Procurement, Legal, Corporate Braskem’s values, expressed in its Governance, Compliance, and Code of Conduct and in voluntary external partners. Over 100 agreements - such as the Global documents were also provided Compact - aimed at promoting and analyzed in order to sustainable development. map procedures and identify key risks, opportunities, and Braskem carried out an assessment vulnerable groups. focused on the practices of protecting and promoting With this, Braskem has created fundamental guarantees to all a risk matrix of Human Rights human beings, regardless of violations, which is being validated gender, ethnicity, belief, age by the Leaders. In 2017, Braskem group, or any other social status. will provide additional information This assessment was developed on this aspect on its website. based on the UN Guidelines on Business and Human Rights The purpose of this work is to (Ruggie´s Framework), and establish an integrated, strategic included the following phases: and continuous management of Sector Benchmark, Corporate and this aspect. Accordingly, based on Chain Impact Assessment, and the recommendations received, GAP Analysis. Braskem will engage its internal and external stakeholders in order The work encompassed the to motivate them to improve the Company’s operations in current action plans, in addition Brazil, Mexico, the United to reporting the evolution of the States, and Germany, as well results. The Company’s perspective as the activities of external is that, in 2018, the assessment stakeholders. Several Team of impacts on Human Rights will Members were interviewed, be strengthened and integrated among them those responsible into the process of reviewing the for internal areas such as People Braskem´s Materiality Matrix. 2016 | Braskem | Annual Report 21

Braskem Idesa • New Opportunities Program: • Biodiversity: 400 hectares of An initiative created to support reforested area, 529 specimens The Company’s commitment to professional relocation after of the local wildlife rescued and protecting and promoting human completion of the construction five-fold increase of 331 plants rights goes beyond geographical work on the Braskem Idesa of the rare endangered species and cultural boundaries. Braskem Petrochemical Complex, “Ceratozamia Miqueliana.” Idesa, a joint venture between ensuring the inclusion of 6,500 Braskem and the Mexican group people in selective processes. • Preservation of Cultural Idesa, were conceived with Heritage: The construction prerogatives of sustainability • Private Social Investment: works were monitored by and human rights. Therefore, in After identifying regional a team of specialists from addition to following Braskem’s talents, 200 people from the the National Institute of global corporate policies, such community (93% women) Anthropology and History as the Code of Conduct for were trained to be suppliers (INAH) to ensure that any Team Members, the unit has a for Braskem Idesa and other archaeological remains policy focused on Human Rights, companies in the region (legal were properly identified and which includes procedures that constitution of 11 cooperatives recovered. Currently, over guarantee excellent social and of cleaning products, uniforms, three thousand pieces have environmental performance: and tilapia and chicken been found and are part of farming, as well as recycling the collection of the INAH- • Health and Safety: Accident materials made available by Veracruz Center. frequency rates with and without the Company). lost time during the construction Braskem Idesa will continue phase were less than one accident • Participatory Environmental to carry out third-party audits per million man-hours worked, Monitoring: Community to ensure compliance with 85% winning the DuPont Safety and • Diversity: During the • Human Rights Training: representatives were trained principles governing Human Sustainability Award 2015, as a construction phase, women’s Over 500 people were trained to measure levels of air and Rights, and, together with OF LOCAL worldwide highlight in the area of participation was 8%, a highly in different aspects, including water contaminants, as well as Braskem’s other businesses, will LABOR Industrial Safety. In 2016, its first representative rate when sexual harassment and dust and noise levels. These intensify the promotion of the year of operation, this rate was compared to the Mexican national mobbing, in which there was a people perform environmental Ethics Line Channel through an in addition 0.67, lower than the average for average of 3.5%. In addition, reduction of 40% of the cases monitoring, guaranteeing the educational process. to workers of the Chemical Industry in Mexico workers came from 24 different reported. transparency of the results 24 different determined by the National nationalities, but with great use which, so far, have not been nationalities. Association of the Chemical of local labor, which represented • Human Development: any different than the initial Industry in Mexico (ANIQ). 85% of the workforce. The current 670,000 training hours to environmental parameters. diversity ratio in the workforce is ensure better professional 31% women and 69% men. qualification. 2016 | Braskem | Annual Report 22

Forums and Commitments

G4-14, G4-15, G4-16 CDP The participation in working groups and forums, with the specific Launched in 2000, the program aims to collect and publish data on greenhouse gas (GHG) emissions purpose of multiplying positive practices and experiences, is a strong from companies in over 60 countries. CDP is an international organization with a global reporting part of Braskem’s sustainability strategy. In 2016, the Company platform that works with investors around the globe in order to increase investment opportunities, supported a coalition of organizations called the IEC (Iniciativas contributing to more consistent information for decision-making and risk assessment associated with Empresariais em Clima - Business Climate Initiatives) in order to adopt climate change. CDP operates a standard system for recording and evaluating company strategy and a series of recommendations to be submitted to the Government performance, recognizing best business practices in this aspect. about the best model for Brazil regarding pricing and constituting a carbon market. GLOBAL COMPACT

ICCA (INTERNATIONAL COUNCIL OF CHEMICAL ASSOCIATIONS) Braskem has been a member of the Global Compact’s Brazilian Network Committee since 2008 and Braskem is part of the executive leadership group and acts in the Global Compact’s LEAD group since 2013. The Company is also part of UNIDO’s Green Industry energy, climate change, and chemical safety working groups of Platform initiatives, Caring for Climate of the Global Compact, and Women’s Empowerment Principles the International Council of Chemical Industry Associations. The of UN Women. Company also contributes with initiatives such as the Responsible Care Program, which, since 1992, has sought to improve the BRAZILIAN BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT (CEBDS) environmental management of chemical companies and their production chain in Brazil, and the Global Product Strategy (GPS), a One of the founding companies of CEBDS and representative of the World Business Council for program that seeks to promote the recognition and dissemination of Sustainable Development (WBCSD) network. The initiative has nearly 60 national and regional possible risks to workers, consumers, and the environment, arising councils in 36 countries and 22 industrial sectors. from the production, handling, and sale of chemical products. Support for these initiatives occurs through Abiquim and the GETÚLIO VARGAS FOUNDATION - COMPANIES FOR THE CLIMATE American Chemistry Council (ACC), respectively. Braskem has been participating in the Companies for the Climate initiative since 2012, a business platform created by the Center for Sustainability Studies at the Getúlio Vargas Foundation (FGV). CARBON PRICING LEADERSHIP COALITION (WORLD BANK)

In 2015 Braskem became part of this World Bank initiative that BUSINESS CLIMATE FORUM (ETHOS INSTITUTE) seeks to mitigate climate change by introducing carbon pricing mechanisms. In 2016, Braskem was part of this organization’s In 2015, the Company extended its voluntary commitments to improving the levels of greenhouse Steering Committee. gases reduction by signing the Open Letter to Brazil on Climate Change. 2016 | Braskem | Annual Report 23

AKATU INSTITUTE

Non-governmental, non-profit organization that works to promote conscious consumption. Braskem supports the Institute and sponsors the Edukatu program, an initiative aimed at sustainability education, launched in 2013.

TRATA BRASIL INSTITUTE

Civil Society Public Interest organization, aiming to coordinate national information and mobilization initiatives, so that Brazil may achieve universal access to basic sanitation.

TO LEARN MORE INTERNATIONAL DECLARATION ON CLEANER PRODUCTION ABOUT THE FORUMS AND ORGANIZATIONS Part of the United Nations Environment Program (UNEP), seeks to OF WHICH BRASKEM disseminate environmentally clean production policies and more IS A PART, THEIR sustainable production and consumption practices. AGENDAS, AND HOW BRASKEM IS ENGAGED, BUSINESS COMMITMENT FOR RECYCLING (CEMPRE) VISIT

A non-profit association dedicated to promoting recycling and www.braskem.com > integrated waste management. voluntary commitments

PLASTIVIDA

Entity that institutionally represents the industry production chain in order to promote the importance of plastic in modern life and promote its environmentally correct use, while prioritizing social responsibility initiatives.

FISCAL CITIZENSHIP CENTER (CCIF)

Independent think tank whose goal is to contribute to simplifying the Brazilian tax system and improving the country’s fiscal management model. 2016 | Braskem | Annual Report 24

03. Governance and Compliance Global Compact – Principle 10

Braskem’s commitment to continuous improvement of its Corporate Governance and Compliance model.

HIRING A CREATION OF COMPLIANCE THE COMPLIANCE OFFICER TO LEAD ACTING WITH leaders COMMITTEE, THE COMPLIANCE ETHICS, INTEGRITY, 416 TO SUPPORT AREA AND REPORT AND TRANSPARENCY TRAINING IN COMPLIANCE CONDUCTED IN 10 THE BOARD OF TO THE COMPLIANCE IN ITS BUSINESS DIFFERENT LOCATIONS, REACHING AN AUDIENCE DIRECTORS. COMMITTEE. POLICIES. OF 416 LEADERS. 2016 | Braskem | Annual Report 25

Braskem believes that action excellence practices to ensure based on ethics, integrity, and the implementation of a solid transparency is essential to the Compliance Program, such as Survival, Growth, and Perpetuity the creation of a Compliance of its Business. This belief Committee composed of three requires constant evaluation and Board Members, two of which updates of its Business Policies, are independent members who among them those that govern directly report to the Board Compliance. Thus, in 2016, the of Directors. In addition, the Company began a process of Program also promoted: An revising its structure, focusing increase in the number of on improving and strengthening independent members on the compliance in business practices Board of Directors; an increase and processes. in the number of Compliance Members in the areas of Internal This initiative aims to further Controls, Risk Management, improve the concepts and Compliance, and Internal guidelines that drive the Auditing; the approval of the corporate actions of Braskem’s Compliance Policy by the Board Team Members and support of Directors, which includes relationships with Shareholders, the Anti-Corruption, Antitrust, Suppliers, Competitors, and Related Party Transactions Governments, Communities, Policies; the evaluation and other stakeholders, and society improvement of Internal Controls in general, significantly reducing regarding processes that have the possibility that deviations of presented vulnerabilities in the a similar nature occur again. past; outsourcing and improving Search for evolution in these the reporting channel, the “Ethics processes resulted in several Line”, and other initiatives. actions based on market 2016 | Braskem | Annual Report 26

BRASKEM COMPLIANCE PROGRAM

In 2016, Braskem reviewed its and Remediation. Prevention COMPLIANCE SYSTEM MODEL Governance and Compliance is always better and less

processes, focusing on costly than a cure. Thus, 7

expanding security and preventive measures are the 8 protecting the Business. In most important ones to be this context, Braskem’s Board implemented and followed, of Directors approved the and should be made a priority Detect 6 creation of the Compliance for the Leaders, investments, Committee directly related to and other uses of Braskem 1 Governance and Compliance it. In addition, the Company resources. 2 Policies and Other Guidelines hired a new Compliance Officer 5 3 Risks and Controls Assessment and revised the scope and Practicing the Compliance Leader guidelines of the Compliance System is everyone’s 4 Communication and Training 4 Prevent area in order to ensure greater responsibility, especially the 5 Third-Party Compliance independence and autonomy Leaders’, and must occur Remedy 6 Engagement in Collective Actions for carrying out its activities. within the dynamics of the 3 Action Program’s planning 9 7 Management of the Ethics Line Channel

The new Braskem Compliance cycle and commitment, and 2 8 Monitoring of Risks and Controls System is based on ten its monitoring, evaluation, and 10 9 Remediate Risk and Strengthen Controls measures, structured in three judgment, which permeates 1 pillars: Prevention, Detection, Braskem. 10 Disciplinary Measures

COMPLIANCE MEASURES CASCADED COMPLIANCE MEASURES BY SUBJECT INTO IN 151 INITIATIVES Since the beginning of the 01. Governance and Compliance 06. Engagement in Collective Actions

process review, ten new 02. Policies and Other Guidelines 07. Management of the Ethics Line Channel compliance measures have been 03. Risks and Controls Assessment 08. Monitoring of Risks and Controls established, already cascaded in 151 initiatives focusing on best 04. Communication and Training 09. Remediate Risk and Strengthen Controls governance practices. 05. Third-Party Compliance 10. Disciplinary Measures

15 51 7 25 11 13 5 14 8 2 2016 | Braskem | Annual Report 27

BRASKEM GOVERNANCE MODEL G4-34, G4-39

Standing Committees STRATEGY AND COMMUNICATION COMMITTEE (CEC) to Support the Board of Directors PEOPLE AND ORGANIZATION COMMITTEE (CPO)

INVESTMENT AND FINANCE COMMITTEE (CFI)

COMPLIANCE COMMITTEE (CC) COMPLIANCE AREA ETHICS COMMITTEE CLIENTS

BOARD OF DIRECTORS EXECUTIVE OFFICE

FISCAL COMMITTEE (WITH RESP. OF AUDIT COMMITTEE)

INDEPENDENT AUDIT DISCLOSURE COMMITTEE SHAREHOLDERS (GENERAL MEETING) SHAREHOLDERS SUPPORT CORPORATE GOVERNANCE

GENERAL SHAREHOLDERS’ the Support Committees to the Board and review Policies and Programs plan, and leverage goals. as provided by the Sarbanes-Oxley MEETING (AG) of Directors, as well as the basic in force, regarding the aspects of Act of the United States. The General Shareholders’ Meeting guidelines for their constitution, are People and Organization, such • Strategy and Communication is the sovereign body, which has the described in the Board of Directors’ as Remuneration, Health, Safety, Committee (CEC) INDEPENDENT AUDIT power to decide all business related Rules of Procedure. and Environment, and the Private • Evaluates new Policies, Responsible for independently issuing to the Company and to make the Pension Program. In addition, monitors and analyzes the opinions on the Financial Statements resolutions it deems appropriate for its • Compliance Committee (CC) the CPO reviews significant current Corporate Policies in accordance with current legislation. defense and development. Created in 2016, the Committee changes in macrostructure and concerning Capital Markets, has a Permanent Support replacement and succession of Social Responsibility, and STATUTORY EXECUTIVE OFFICE BOARD OF DIRECTORS (CA) nature to the Board of Directors executives in strategic positions. Corporate Sustainability, as well Officers are responsible for exercising Braskem’s Board of Directors is an regarding its continuous as Institutional Image Programs. the management of the Company’s autonomous body of a collegiate commitment to act with • Finance and Investment In addition, the Committee business and functional areas, as nature, composed of eleven members transparency and integrity, in Committee (IFC) contributes to the general well as for implementing the General and their respective alternates, six accordance with best Governance • Evaluates new Policies, monitors guidelines and assumptions used Policies and Guidelines established by of whom are Independent Directors, practices and applicable laws, and analyzes the Policies as the basis for the preparation the Board of Directors. elected or dismissed at any time by standards, and regulations, as in force regarding Financial of the Braskem Business Leader the General Meeting. Its Chairperson is well as with Company Policies, Management, Insurance and Action Program. ETHICS COMMITTEE (CET) not a Company executive. The term of monitoring conduct based on Guarantees, Financial Risks The Ethics Committee is an advisory office of the members of the Board of principles and ethical values. Management, among others. FISCAL COMMITTEE (CF) and deliberative body whose purpose Directors is two years, and reelection In this way, the Committee is It is also responsible for the Composed of five members and an is to support the Compliance is permitted. responsible for ensuring the investments subject to approval equal number of alternates, the Committee in matters involving monitoring of exposure to risks, and investment monitoring. This Fiscal Committee is an independent violations of the commitment to STANDING COMMITTEES TO internal control systems, and committee is also responsible corporate body of Braskem’s act ethically and with integrity and SUPPORT THE BOARD OF compliance with laws, standards, for contributing to the Braskem administration that supervises the transparency. It is also responsible DIRECTORS and regulations, among others. Business Leader Action Program acts of the administrators to ensure for evaluating and discussing The four Standing Support Committees proposal, prior to its presentation compliance with their legal and the outcome of investigations of are part of the Corporate Governance • People and Organization to the Board of Directors, statutory duties, issuing opinions and complaints in an exempt manner, structure and aim to advise the Board Committee (CPO) focusing on analyzing the providing information to the partners, treating all information and of Directors on pre-established matters. • Its role is to evaluate, monitor, financial strategy, investment and monitoring the internal audit. documents analyzed with absolute The basic roles and responsibilities of The committee has expanded powers, secrecy and confidentiality. 2016 | Braskem | Annual Report 28

Internationalization and Improvement TRAINING IN COMPLIANCE of Compliance The teams in the Compliance The new structure of the Compliance area has also reinforced Braskem’s area visited the Company’s protection in the face of the Company’s more mature internationalization units to conduct training on process, and for this, the team has already been planned with 20 Braskem’s Compliance System, Members who have global ramification. The guidelines are defined in the the regulatory environment, Brazilian matrix and passed on to representatives of other regions in the and the new guidelines. In world with Braskem production units. 2016, the training focused on managers, directors, vice In 2016, the Company hired executives responsible for compliance to work presidents, and advisers, in the United States and Mexico, and in 2017 will have a representative who are responsible for in Europe. They also have autonomy regarding their respective executive disseminating the practices offices, since they report to the Braskem Compliance area. among the teams and ensuring compliance with standards and processes. In just three months, 16 workshops were held at ten different locations, reaching an audience of 416 Compliance Policy participants.

and Organization In 2017, the center will also expand training to its Suppliers. The implementation of the Compliance Policy and a new organizational New e-learning training structure brought improvements to the Company, but did not change related to specific issues in the its Organizational Culture. Based on the trust, delegation, and Compliance Policy are being integration in relationships between Leaders and their Subordinates, prepared and will be made in this new conceptual design, the Office’s main function is to define available to key areas of the Braskem’s Compliance Guidelines and ensure its implementation by Company. the respective areas.

It is up to the Leader to maintain their autonomy and delegation, managing the risks inherent to the Business and to the processes, executing and monitoring the controls, and fulfilling their responsibilities, accountability, and purposes. 2016 | Braskem | Annual Report 29

COMPLIANCE STRUCTURE

In order to create value and contribute to Braskem’s competitiveness, productivity, and reputation, the Compliance Department works to help define Guidelines and Policies, disseminate Culture and Integrity, evaluate and manage Corporate risks and improve the Controls and monitoring environment. The Braskem Compliance Department operates in four segments:

Internal Controls: responsible for ensuring the adequacy, strengthening, and operation of the Company’s internal control system. Advises Leaders in assessing the internal control structure at the process level for management controls, SOX controls, and compliance controls, and supports them in developing processes and controls to manage transactional risks in a preventive manner, addressing possible vulnerabilities.

Risk Management: responsible for helping senior management identify corporate risks that may impact the possibility of attaining strategic objectives, as well as creating and protecting value for Shareholders. Supports Leaders in their responsibilities to identify risks with specialized technical and methodological risk management expertise. In addition, it assists Leaders in defining the action plans necessary to address the risks identified.

Compliance: responsible for supporting Leaders in disseminating the Culture of Integrity and adherence to internal laws and regulations. Provides and manages the Ethics Line Channel, enabling the reporting of conduct not in accordance with an ethical, integral, and transparent action by Team Members, Third Parties and Clients. Addresses all reports with independence and impartiality. The team is also responsible for conducting anti-corruption training for Team Members.

Internal Audit: responsible for the independent and objective evaluation of the processes, verifying their effectiveness and compliance, aiming to add value and improve Braskem’s operations. To this end, in 2016, the team dedicated to structuring the area and developing an overall work plan, which was approved by the Compliance Committee in December 2016 and will be implemented beginning January 2017. 2016 | Braskem | Annual Report 30

Compliance Policy

The strengthening of Braskem’s based on guidelines determined continuous basis, the formalization Braskem defines ten commitments governance also involved the by the Board of Directors and and updating of its policies, assumed in this policy that must creation and approval of the best practices in the market. including those on Governance be implemented in a convincing, Company’s Compliance Policy. and Compliance, as well as their responsible, and unrestricted Braskem understands that effective implementation with manner throughout Braskem, Published in November 2016, operating with ethics, integrity, an educational, preventive, and without exceptions or leniency. the document was constructed and transparency requires, on a awareness-raising approach.

THE TEN COMMITMENTS OF THE BRASKEM COMPLIANCE POLICY

• Fight and not tolerate corruption in any form, including extortion and bribery.

• Firmly and determinedly reject business opportunities that conflict with this commitment.

• Adopt ethical, integral, and transparent principles in relationships with public and private agents.

• Never cite cultural or normal market conditions as a justification for wrongdoing.

• Ensure transparency in information about Braskem, which must be accurate, comprehensive, and accessible, and disclosed on a regular basis.

• Be aware that deviations of conduct, whether by action, omission, or complacency, harm society, violate the law, and destroy the image of Braskem as a whole.

• Guarantee at Braskem, and throughout its value chain, the practice of the Compliance System, always up to date with the best benchmark references.

• Contribute individually and collectively to necessary changes in markets and in the environments where there may be incentive for deviations in conduct.

• Incorporate to the Team Members’ Action Programs performance assessments to comply with the Compliance System.

• Be confident that this commitment will keep us on the path to Survival, Growth, and Perpetuity.

In 2017, all Team Members will receive a badge with the ten commitments for continuous ethical, integral, and transparent action. 2016 | Braskem | Annual Report 31

Communication: transparency in Relations with the Market and Internal Audience G4-58

As part of its legal commitments, Braskem regularly sends a set Braskem Global Agreement of information to the Brazilian Securities and Exchange G4-SO5 Commission (CVM) and the In March 2015, as part of At the end of July 2016, Braskem credits that were already within the Under the terms of the Global São Paulo Stock Exchange the “Operation Lava-Jato” received new information about rights of Braskem. Agreement, Braskem will pay the (BM&FBOVESPA), and the New investigation, allegations made deviations, revealed in the above-mentioned authorities, York Stock Exchange (NYSE), about defendants in criminal collaborations of former Braskem After confirming the illicit acts, on in Brazil and abroad, the such as Standardized Financial proceedings were made public, administrators in the context of October 3, 2016, Braskem began approximate total value of Statements, Announcements, according to which certain persons Odebrecht’s cooperation with the discussions with the DoJ and the SEC US$ 957 million, equivalent to no longer linked to Braskem were authorities. to formalize an agreement resolving nearly BRL 3.1 billion, which is Material Facts, and others. In involved in undue payments all the illicit acts identified and to approximately US$ 95 million addition, members of the Board of to obtain benefits through raw Based on this information, the seek a simultaneous agreement (nearly BRL 316 million) due to Directors and the Fiscal Committee material contracts with Petrobras. internal investigation confirmed the with the Brazilian authorities, and the DoJ, US$ 65 million (nearly have an exclusive information existence of payments made by the later on, with the Swiss authorities. BRL 216 million) due to the channel, which may be accessed In view of these facts, Braskem Company between 2006 and 2014 SEC, close to CHF 95 million on the Braskem portal on the immediately approved the hiring to three companies located abroad, As a result of these negotiations, (approximately BRL 307 million) Internet, providing security, of law firms with ample and as commercial intermediation on December 14, 2016, Braskem to the Swiss Attorney General, transparency, equity, and speed proven experience in similar cases services, and it was not possible to entered into a Leniency Agreement and approximately BRL 2.2 billion in the process of communicating in Brazil and the United States in prove the effective services provided with the Federal Public Ministry due to the MPF. with Shareholders. order to conduct an internal and by such companies. As Braskem’s (MPF). Shortly thereafter, on independent investigation of said former administrators explained December 21, 2016, Braskem Also according to the Global allegations, which was performed in their collaboration process, finalized the formal agreements Agreement, Braskem committed to For the internal audience, under the supervision of and in these companies only transferred with the DoJ and the SEC, as well undergo independent monitoring Braskem’s communication collaboration with public authorities resources to a number of other as an agreement to terminate for a term of up to three years channel, View, (intranet), of the Department of Justice companies, which in the end investigations by the Swiss by monitors designated by the available in Portuguese, English, and the Securities and Exchange made illicit payments to Braskem, Attorney General (in conjunction US and Brazilian authorities, who and Spanish, disseminates Commission of the United States involving issues such as the naphtha with the agreement with the MPF, will verify Company compliance Company national and (DoJ and SEC, respectively). contract signed with Petrobras in Global Agreement). The Global with the obligations assumed in regional news, corporate and By mid-July 2016, the internal 2009 and terminated in 2014, as Agreement includes all the facts the agreements and evaluate its business information, products, investigation had not obtained well as changes in the federal and ascertained up to the date of its Compliance Program, with the campaigns, internal processes, evidence proving the existence of state tax legislation, to obtain tax execution involving Braskem under purpose of reducing the risk of and acknowledgments. illicit facts at Braskem. incentives and monetization of tax Operation Lava-Jato. deviations recurring in the Company. 2016 | Braskem | Annual Report 32

Code of Conduct: Ethics, Integrity, and Transparency G4-56, G4-57

Acting in accordance with ensure that the Company adheres model that remains in force in applicable laws, regulations, to the best global processes. order to ensure full assimilation BRASKEM’S CODE OF CONDUCT HAS BEEN policies and best practices is a of content by all Team Members. EXPANDED AND STRENGTHENED, AS PART OF fundamental principle at Braskem. The content of the Code THE COMMITMENT TO ETHICS, INTEGRITY, Effective Compliance represents an of Conduct is disseminated Braskem’s Code of Conduct is AND TRANSPARENCY, PRESENT IN THE intangible asset for the Company to all Team Members of the translated into all the languages COMPLIANCE POLICY, WITH A GLOBAL SCOPE to protect and strengthen the Company. The process included of the countries where Braskem AT BRASKEM. Business. Therefore, constant questionnaires on the subject has operations. It may be revision of the Compliance and electronic signature of the accessed on the corporate IT DEFINES THE VALUES, PRINCIPLES AND standards, as well as the Code terms of commitment with the intranet and the Company’s PRACTICES THAT GUIDE THE COMPANY’S of Conduct, is a best practice to guidelines of the Code. It is a website. CORPORATE CONDUCT. Pacts to Fight Corruption

Braskem is committed to playing Responsibility. Braskem also an initiative that encourages Participation in collective actions an important role in the fight actively participates in the companies to adopt best through associations with other against corruption, working Integrity Working Group, which governance practices. Braskem companies and entities is a way to promote a more ethical assists in the implementation participates effectively in the of expressing the commitment of and integral business market. of policies that promote Anti-Corruption Working Group, the Braskem Leaders to sharing As part of this objective, the integrity and fight corruption, promoted by the Global Compact experiences, results, and Company is a signatory of the and mobilizes companies and Brazil Network, contributing to actions, to influencing and being Business Pact for Integrity business entities. the development of corporate influenced by best practices, and and against Corruption, an actions that fight corruption in to promoting improvements to initiative of the Ethos Institute The Company is also a signatory all its forms, including extortion the conditions of its markets and of Companies and Social to the UN Global Compact, and bribery. environments. 2016 | Braskem | Annual Report 33

Ethics Line Channel G4-58

Cross-sectionally, Braskem MAIN RESULTS OF THE ETHICS LINE CHANNEL IN 2016 provides the Ethics Line Channel G4-HR3 in which all stakeholders may, in 19 unfounded cases were closed. a safe and responsible manner, Of the 85 cases opened in 12 founded cases were filed, which resulted in the following remediation contribute information in order 2015, a total of 31 were measures: to maintain a sound, ethical, brought to 2016 under • 2 Team Members terminations transparent, and productive analysis and had their • 2 Team Members warnings or suspensions corporate environment. This investigations closed during • 2 notifications to Partners channel is accessible via the the year. • 1 Partner removal Internet on the Company’s • 3 process improvements website, or through a toll- Of these, 62 analyses were completed and filed in 2016, of which 36 were free number in the languages founded and 26 were unfounded. of the countries in which Based on 36 founded cases, the following remedial measures were Braskem operates. All the addressed by Compliance: information received on the • 8 Team Members terminations Channel is investigated, • 11 feedback events/warnings/suspensions to Team Members respecting confidentiality • 5 partner removals and independence, ensuring • 2 cancellations of contracts with partner companies the anonymity of the whistle 106 cases opened in 2016 • 2 notifications/alignments to partner companies blowers and the security of the • 5 process/control improvements investigation. Of these founded cases, three involved discrimination* and the respective remediation measures were: In 2017, the Ethics Line Channel • 1 Team Member termination will change and evolve. The WEBSITE • 1 Team Member warning/suspension system will be outsourced and www.ethicslinebraskem.com • 1 partner removal. specialized, providing greater *Discrimination: Includes Mobbing, Sexual Harassment, and Abuse of Power. impartiality and independence. Of the 44 cases from 2016 that started 2017 in the investigation process, 17 TOLL-FREE The service will be customized, NUMBERS: were completed and presented to the Ethics Committee on March 24, 2017, will operate 24 hours a day, 44 cases opened in 2016 and 12 will be presented to the Ethics Committee scheduled for May 2017. • Germany: 0800-183-0763 and will be a reference tool for • Brazil: 0800-377-8021 began the year 2017 in the managing reports. • United States: 1-800-950-9280 investigation process. Ethics Line cases are archived at the Ethics Committee’s quarterly meetings. • Holland: 0800-022-1787 • Mexico: 01-800-681-6940 The last meeting in 2016 took place on December 12. 2016 | Braskem | Annual Report 34

04. Financial Performance*

BRL 11.5 billion RECORD EBITDA IN BRAZILIAN REAIS (BRL 11.5 BILLION) AND IN DOLLARS (US$ 3.3 BILLION) 4% • BRAZIL: BRL 8.4 BILLION IN 2016, RESIN PRODUCTION IN BRAZIL • THE US AND EUROPE: BRL 2.5 BILLION WAS 4.9 MILLION TONS, 4% HIGHER • MEXICO: BRL 530 MILLION THAN 2015. 1.7 million tons

Polyolefins: HISTORICAL HISTORICAL RECORD RECORD OF BRL 3 billion OF PRODUCTION EXPORTS: 1.7 8.5 VINYLS: NET SALES REVENUE OF OF POLYETHYLENE MILLION TONS, million BRL 3 BILLION IN 2016, AN INCREASE IN 2016, 24% EXPANSION tons OF 9% OVER THE PREVIOUS YEAR. WITH 4.301 KTON. COMPARED TO 2015.

BASIC PETROCHEMICALS: PRODUCTION OF 8.5 MILLION TONS % IN 2016, 3% 2 42% HIGHER THAN 2015 IN THE UNITED STATES AND EUROPE, ALSO IN THE RAMP-UP PROCESS, THE AND A HISTORICAL BRASKEM’S PRODUCTION AND SALES VOLUME UTILIZATION RATE OF POLYETHYLENE (PE) RECORD FOR THE REACHED 2 MILLION TONS IN THE YEAR, PLANTS IN THE YEAR WAS 42%, WITH A COMPANY. A GROWTH OF 2% OVER THE PREVIOUS YEAR. PRODUCTION VOLUME OF 443 KTONS.

*Unreviewed financial information by the auditors and the Fiscal Council. 2016 | Braskem | Annual Report 35

BRASKEM OPERATIONS: SOUNDNESS AND RECORD RESULTS IN 2016

G4-EC17

The maturing of Braskem’s world and prioritized operational in 2016, including exports, was global presence, coupled with efficiency initiatives to increase BRL 8.5 billion, representing greater gains in productivity the average utilization rate of 74% of the consolidated result from the improvement and the domestic petrochemical of the Company’s segments. synergy between operating and plants, whose index reached commercial units, ensured the a record 92% in the year, 3 In the United States and Company’s positive results in p.p. over the previous year. Europe, Braskem’s production 2016. The result was achieved even and sales volume reached 2 after a planned shutdown of million tons in the year, a 2% In 2016, Braskem registered the Bahia power station for growth over the previous year, a record EBITDA in reais (BRL approximately 40 days during reflecting an average operating 11.5 billion) and in dollars (US$ the fourth quarter of the year, rate of 100%, which was 2 p.p. 3.3 billion), which represented as well as the poor performance higher than 2015, both historical growth of 23% and 18%, of national economic activity. records for the units. The result respectively, compared to the was achieved due to the units’ Due to the conclusion of the Global Agreement with previous year. This improvement Due to good operating good operating performance, the authorities, announced on December 21, 2016, the is mainly explained by good performance, resin production together with a stronger demand Company has been carrying out the necessary evaluations operating performance, a in Brazil was 4.9 million tons for polypropylene in the regions, of its internal processes and controls, which has affected healthy level of resin spreads in 2016, 4% higher than 2015. especially in the American % the schedule of the work with the independent auditors. in the international market, In the year, Braskem’s strategy market, and also due to better 92 a higher volume of Brazilian remained in service of the spreads in these regions. In order to keep the market informed of its operating and exports, the performance of US Brazilian market, guaranteeing financial performance, the Company decided to disclose and European operations, and exports of volume not sold The highlight of the year was all time record an unaudited preview of the results. Braskem will continue the beginning of the contribution in the Brazilian market due the scheduled shutdown at the in the use its best efforts to finalize the work of preparing its audited of the Petrochemical Complex in to weaker demand. In this Marcus Hook polypropylene of Brazilian financial statements as soon as possible and reiterates Mexico. scenario, Brazilian exports plant in Pennsylvania, USA, petrochemical that it does not expect material changes regarding the reached a historical record, where improvements were plants. unaudited results disclosed previously which served as In Brazil, the Company took totaling 1.7 million tons, a 24% made to increase nominal the basis for this Annual Report. After completion of the advantage of the synergy with expansion compared to 2015. production capacity by 64 kton work, the results will be attached to this document, in an its commercial offices around the The EBITDA of Brazilian units per year. updated edition.

* Unreviewed financial information by the auditors and the Fiscal Council 2016 | Braskem | Annual Report 36

COMMISSIONING THE UTEC BRASKEM IDESA REACHES AN AVERAGE UTILIZATION PLANT IN THE UNITED STATES RATE OF 73% IN ITS FIRST YEAR OF ACTIVITY

In 2016, Braskem commissioned its first Ultra-High The year 2016 was also highlighted by the contribution of the result of the first year of operations Molecular Weight Polyethylene (UHMWPE) plant in the of the Braskem Idesa Petrochemical Complex in Mexico. In line with the estimates planned for the United States in La Porte, Texas. The unit will enable first year of activities, the unit recorded an average operating rate of 42% of the polyethylene better customer service in North America and Europe, plants and EBITDA of US$ 165 million (BRL 537 million), representing 5% of the total consolidated and starts operations supported by improvements at the EBITDA of Company segments. Pittsburgh Innovation and Technology Center in the United States aimed toward increasing research and development In 2016, the focus was mainly on stabilizing the production of the Petrochemical Complex, capacity in UHMWPE. The resin, developed from Braskem’s consolidating the service and relationship with Mexican Clients, and exporting in synergy with own technologies, is eight times lighter than steel and ten Braskem’s operations in other regions. times more durable than high density polyethylene (HDPE). Its diverse applications cover sectors such as automotive It is important to highlight the operational evolution of the Complex over the period. After the and transportation, electronics, fiber and textiles, cracker’s departure in March, the three polyethylene plants began operation in June, which enabled industrial and heavy machinery, material handling, oil and the average plant utilization rate to reach 42% in the second half of 2016, reaching 73% in the gas, pipelines and mining, porous plastics, and recreation. fourth quarter.

FLEXIBILITY OF RAW MATERIALS IN BAHIA

As part of the strategy to expand the diversification of raw materials for production, Braskem has made progress with the project at the Camaçari plant in Bahia (Brazil) toward making it suitable to receive ethane. With an investment of BRL 380 million and beginning operations scheduled for the second half of 2017, the project includes modernizing the industrial unit and adapting the region’s port infrastructure. By the end of 2016, Braskem had already invested BRL 120 million. In addition, the Company entered into a supply agreement with an affiliated company of Enterprise Products Partners L.P. (NYSE: EPD) for ethane imported from the United States. The term of the agreement is ten years and price based on the international benchmark Mont Belvieu. 2016 | Braskem | Annual Report 37

IMPACTS OF THE GLOBAL RISK RATING AGENCIES LENIENCY AGREEMENT In 2016, Braskem maintained diversification of the raw material and the fact that the Company the investment grade rating by matrix by beginning operation at has operations outside of Brazil. Under the Global Agreement, Company recorded a consolidated Standard & Poor’s and Fitch the Braskem Idesa Petrochemical Braskem will pay the authorities, net loss of BRL 2.6 billion in 4Q16, Ratings (BBB-) and presented a Complex (Mexico), the cash Moody’s: in February, Moody’s in Brazil and abroad, the total and BRL 768 million for the year. credit risk above the sovereign position maintained abroad, and downgraded Brazil’s sovereign approximate amount of US$ Loss attributable to shareholders by the three largest risk rating the availability of a revolving credit rating and maintained the 957 million, equivalent to for the year was BRL 452 million. agencies: line available for withdrawal. negative outlook. According to approximately BRL 3.1 billion. the agency’s scale, the grade Of this total, approximately US$ Except for the amount of the Fitch Ratings: in September Standard & Poor’s: despite fell two steps to Ba2. In this 95 million will be paid in cash to Global Agreement mentioned 2016, Fitch reaffirmed Braskem’s the downgrade of Brazil’s sense, following the drop of the United States Department of above, as well as other non- global scale rating as BBB- sovereign rating by S&P in the sovereign rating, Moody’s Justice (DoJ), US$ 65 million to monetary penalties imposed on and changed the outlook from February, Braskem had its global lowered Braskem’s risk rating the United States Securities and Braskem under the terms of said negative to stable. This change rating reaffirmed at BBB- with by one grade to Ba1. Even with Exchange Commission (SEC), agreement, the Company is not was supported by the Company’s a negative outlook, driven by the downgrade, Braskem has a approximately CHF30 million to the able to predict or measure at this strong cash generation, Braskem’s solid cash position risk rating above the sovereign. Attorney General of Switzerland time the extent of the financial and nearly BRL 736 million to the and non-financial impacts, if Federal Public Prosecutor (MPF). any, that the confirmation of The remaining balance will be the allegations, possible actions paid by the Company as of 2018, of other authorities, parallel with approximately BRL 1.5 billion investigations, or the execution to the MPF, divided into six annual of the Global Agreement may payments restated according to cause for the Company, or the the variation of the IPCA8 index, resources that may be necessary maturing on January 30 of each to remedy such occurrences. year, and approximately CHF64 million to the Attorney General The Global Agreement may of Switzerland, divided into four have an adverse material annual payments, due on June 30 effect on Braskem’s business, of each year. reputation, financial condition, and operating results, as well Due to the provision of the fine as on liquidity and the price of referring to the Global Agreement securities issued by Braskem. in the fourth quarter of 2016, the

8 Broad National Consumer Price Index 2016 | Braskem | Annual Report 38

RAW MATERIALS AND SOUND NET REVENUE 2016* PETROCHEMICAL SPREAD LEVELS Braskem’s consolidated net decrease in sales volume in the revenue reached US$ 13.7 domestic market, which dropped The average international spread than the previous year, due Also in 2016, the average oil billion, which was 3% lower 1% compared to 2015. of thermoplastic resins produced to a combination of a larger price was US$ 43 per barrel, than in the previous year. The by Braskem in Brazil remained at propylene supply and greater 17% lower than the average decline was explained by the In Brazilian reais, consolidated net a sound level, reaching US$ 677 PP demand in the US market. price in the previous year. 8% drop in the prices of resins revenue was BRL 47.7 billion, which per ton in 2016, down 3% from For the year, the average price This drop was reflected in and basic petrochemicals in was 2% higher than in the previous the previous year’s average of propylene in the American the average price of naphtha the international market, due to year due to the depreciation of the spread.9 Gulf (USG) was 12% lower in the international market in lower oil prices and the new resin Brazilian real from one period to the compared to 2015, reaching 2016, of US$ 385/t, a drop capacities, especially polypropylene, next. Excluding from the analysis Polypropylene (PP) spreads in US$ 759 per ton due to the in line with the drop in oil that began operating in China the resale of naphtha/condensate, the United States were US$ greater availability of the input prices when compared to the during the year. Another factor revenue increased by 1% in dollars 702/t, which was 24% higher in the region.10 previous year. contributing to the decline was the and 6% in Brazilian reais.

9 Difference between the price of petrochemicals and the price of naphtha, ethane, and propane for the raw material mix used in the Brazilian units. 10 Difference between the price of US PP and US propylene. *Unreviewed financial information by the auditors and the Fiscal Council 2016 | Braskem | Annual Report 39

Results by

STRUCTURE OF THE BASIC Operational Segment PETROCHEMICAL SEGMENT

in Brazil* The Basic Petrochemicals segment owns and operates four G4-EC1 petrochemical complexes in Brazil (Camaçari, Triunfo, São Paulo, and Rio de Janeiro), where olefins, aromatics, and utilities are produced. The result of Braskem in Brazil is composed of the following segments: The total annual ethylene production capacity of these industrial units Basic Petrochemicals, Polyolefins, Vinyls, and Chemical Distribution. is 3,952 kton, approximately 78% of which is naphtha-based, 16% is gas based, and the rest is ethanol-based. Of the total ethylene 1. BASIC PETROCHEMICALS produced by the Basic Petrochemicals units, nearly 80% is transferred Production in 2016 was 8.5 The volume of export sales for consumption in the Company’s Polyolefins and Vinyls units. The million tons, 3% higher than was impacted mainly by the segment’s annual propylene production capacity totals 1,585 kton and 2015 and a Company historical replacement of the exported approximately 65% is transferred for consumption in the Company’s record, while the average volume of propylene for supply Polyolefins segment. utilization rate in the year was to the Client in the acrylic 92%, an increase of 3 p.p. complex in Bahia and by the compared to 2015, highlighting higher volume of transfer to the petrochemical plants of São the Polyolefins segment for PP Paulo, Rio Grande do Sul, and Rio production. The result was 705 FINANCIAL OVERVIEW (BRL MILLION) 4T16 3T16 4T15 VAR. VAR. 2016 2015 VAR. BASIC PETROCHEMICALS (A) (B) (C) (A)/(B) (A)/(C) (D) (E) (D)/(E) de Janeiro. The Petrochemical kton, 7% less than the volume Plant of Rio de Janeiro also recorded in 2015, which was Net Sales Revenue 6,548 6,409 6,297 2% 4% 25,063 24,270 3% stands out, due to the greater partially compensated by supply of ethane raw material, the increase in benzene and Cost of Goods Sold (5,312) (5,194) (5,247) 2% 1% (20,263) (20,053) 1% with a record utilization rate. butadiene exports. BRL Gross Income 1,236 1,215 1,051 2% 18% 4,799 4,217 14% The segment’s net sales revenue in Net revenue for exports was the Brazilian market reached BRL BRL 5.6 billion, up 13% from Gross Margin 19% 19% 17% 0 p.p. 2 p.p. 19% 17% 2 p.p. 5.6 19.4 billion, a 1% growth over the that in 2015, due to the SG&A (185) (198) (202) (6%) (8%) (697) (659) 6% BILLION previous year, driven by greater higher average exchange rate sales volume of the main basic between 2016 and 2015, in Other Operating Income (Expenses) (268) (44) (159) 507% 69% (374) (178) 110% petrochemicals to third parties, addition to better prices of is the net especially the redirection of sales some basic petrochemicals revenue from EBITDA for the Segment 1,080 1,274 986 (15%) 10% 4,913 4,440 11% exports, up of gasoline for the domestic in the international market, 13% from market, showing a growth of 66% especially butadiene. EBITDA Margin for the Segment 16% 20% 16% (3 p.p.) 1 p.p. 20% 18% 2 p.p. 2015. compared to the previous year.

* Unreviewed financial information by the auditors and the Fiscal Council (pages 39 to 42) 2016 | Braskem | Annual Report 40

2. POLYOLEFINS The production of the PE plants was 89% for the year, Janeiro (both in Brazil), as a STRUCTURE OF THE POLYOLEFINS SEGMENT Polyolefins segment in 2016 a growth of 2 p.p. compared to result of the improvement in the was 4,301 kton, a record 2015, mainly influenced by the propylene supply from the Basic The Polyolefins segment consists of 18 polyethylene (PE) and production of polyethylene. better performance of plants Petrochemical segment. polypropylene (PP) plants in Brazil, including the production of The result was obtained due located in the states of São Green Polyethylene made from renewable raw material (sugar to the better utilization rate Paulo and Rio de Janeiro. In PP The net sales revenue of the cane). The industrial operations include PE and PP plants of the polyethylene (PE) and plants, the average utilization Polyolefins segment totaled located in the petrochemical complexes in Triunfo, Camaçari, polypropylene (PP) plants, which rate for the year was 86%, BRL 20.3 billion, a growth of São Paulo, Paulínia, and Rio de Janeiro, with a total production also includes the production of which was 10% higher than in 2% compared to 2015. In the capacity of 3,055 kton of PE, with 200 kton of Green PE, and Green Polyethylene made from 2015, influenced by the better Brazilian market, the result was 1,850 kton of PP. renewable raw material. performance of the plants driven by a greater volume of located in the state of São Paulo exports and better prices in the The average utilization rate of and in the complex in Rio de international market.

FINANCIAL OVERVIEW (BRL MILLION) 4T16 3T16 4T15 VAR. VAR. 2016 2015 VAR. POLYOLEFINS (A) (B) (C) (A)/(B) (A)/(C) (D) (E) (D)/(E)

Net Sales Revenue 4,730 5,170 4,785 (8%) (1%) 20,307 19,986 2%

Cost of Goods Sold (3,731) (4,090) (3,659) (9%) 2% (16,041) (15,461) 4%

Gross Income 1,000 1,079 1,126 (7%) (11%) 4,267 4,525 (6%)

Gross Margin 21% 21% 24% 0 p.p. (2 p.p.) 21% 23% (2 p.p.)

SG&A (345) (327) (348) 6% (1%) (1,301) (1,225) 6%

Other Operating Income (Expenses) (64) (22) (63) 193% 3% (120) (131) (8%)

EBITDA for the Segment 697 849 829 (18%) (16%) 3,295 3,647 (10%)

EBITDA Margin for the Segment 15% 16% 17% (2 p.p.) (3 p.p.) 16% 18% (2 p.p.)

2016 | Braskem | Annual Report 41

3. VINYLS The Vinyls segment had net 528 kton, maintaining the same sales revenue of BRL 3 billion level recorded in 2015, since, in 2016, a 9% growth over the despite the market recession, the previous year. This increase Company increased sales to the STRUCTURE OF THE VINYLS SEGMENT is mainly explained by higher Agribusiness sector (irrigation levels of PVC prices in the tubes), reaching a market share The Vinyls segment consists of the industrial and commercial operations of the international market and by the of 52%, which was 1 p.p. higher PVC, chlorine, and caustic soda units, as well as other products such as hydrogen greater export efforts adopted than in 2015. and sodium hypochlorite. Industrial operations include three PVC plants and two by the Company to compensate chlorine-soda plants located in the petrochemical complex in Camaçari and Alagoas. for the recession of the domestic In 2016, the average utilization The Company’s annual production capacity for PVC and caustic soda is 710 kton and market. rate of PVC plants was 84%, 539 kton, respectively. an increase of 7 p.p. over In 2016, exports showed a 79% 2015, and production volume increase compared to 2015. In increased by 10% compared to the Brazilian market, sales totaled the previous year.

FINANCIAL OVERVIEW (BRL MILLION) 4T16 3T16 4T15 VAR. VAR. 2016 2015 VAR. VINYLS (A) (B) (C) (A)/(B) (A)/(C) (D) (E) (D)/(E)

Net Sales Revenue 794 740 724 7% 10% 3,016 2,780 9%

Cost of Goods Sold (732) (698) (568) 5% 29% (2,834) (2,416) 17%

Gross Income 62 43 156 45% (60%) 183 364 (50%)

Gross Margin 8% 6% 22% 2 p.p. (14 p.p.) 6% 13% (7 p.p.)

SG&A (68) (62) (64) 9% 6% (241) (225) 7%

Other Operating Income (Expenses) (48) 0 (42) - 14% (49) (27) 83%

EBITDA for the Segment 38 75 108 (50%) (65%) 241 355 (32%)

EBITDA Margin for the Segment 5% 10% 15% (5 p.p.) (10 p.p.) 8% 13% (5 p.p.) 2016 | Braskem | Annual Report 42

4. CHEMICAL DISTRIBUTION (QUANTIQ) Despite a higher sales volume, that the results of quantiQ influenced mainly by the better were reported in the Financial STRUCTURE OF THE CHEMICAL performance of commodities Statements of the report, but DISTRIBUTION SEGMENT such as methanol and caustic are not included in social and soda, the segment’s net revenue environmental indicators. Its The Chemical Distribution segment has a portfolio of over ended 2016 with a result 9% management was already 1,500 products. Products are classified as commodities, lower than the previous year, carried out independently even performance chemicals, and specialty chemicals. totaling US$ 239 million. In before the sale of the company. Brazilian reais, net revenue quantiQ was sold on 1/10/2017 was BRL 831 million, down (signing), with closing of the 5% compared to net revenue transaction on 4/03/2017 in 2015. It should be noted (closing).

FINANCIAL OVERVIEW (BRL MILLION) 4T16 3T16 4T15 VAR. VAR. 2016 2015 VAR. CHEMICAL DISTRIBUTION (A) (B) (C) (A)/(B) (A)/(C) (D) (E) (D)/(E)

Net Sales Revenue 190 217 239 (12%) (20%) 831 875 (5%)

Cost of Goods Sold (153) (174) (195) (12%) (21%) (667) (693) (4%)

Gross Income 37 43 44 (14%) (16%) 164 182 (10%)

Gross Margin 19% 20% 18% 0 p.p. 1 p.p. 20% 21% (1 p.p.)

SG&A (31) (35) (32) (11%) (3%) (133) (123) 8%

Other Operating Income (Expenses) (1) (1) (2) (36%) (66%) (1) (5) (87%)

EBITDA for the Segment 6 8 11 (18%) (44%) 36 59 (40%)

EBITDA Margin for the Segment 3% 4% 5% 0 p.p. (1 p.p.) 4% 7% (3 p.p.) 2016 | Braskem | Annual Report 43

OPERATING RESULTS ABROAD* Braskem’s results abroad are composed of the industrial and commercial polypropylene units in the United States and Europe, and BRASKEM BUSINESS STRUCTURE the Braskem Idesa Petrochemical Complex in Mexico. IN THE US AND EUROPE

Braskem has six industrial plants in the US and two in UNITED STATES AND EUROPE Europe, with annual production capacity of 2,010 kton, Due to the increased demand demand, especially in Europe. of which 1,465 kton are in the United States and 545 for polypropylene in the US and The Company’s net revenue kton in Europe. European markets during 2016, reached US$ 2.6 billion, which the Company recorded positive was 3% higher than in the results when compared to the previous year, due to the previous year. In the period, increase in the price of PP in sales volume of polypropylene the US market and the increase (PP) increased 2% compared in sales volume. In Brazilian to 2015, due to the better reais, net sales revenue grew FINANCIAL OVERVIEW (US$ MILLION) 4T16 3T16 4T15 VAR. VAR. 2016 2015 VAR. UNITED STATES AND EUROPE (A) (B) (C) (A)/(B) (A)/(C) (D) (E) (D)/(E) operating performance of the 8% due to the exchange rate Company’s units and increased appreciation during the period. Net Sales Revenue 612 636 615 (4%) 0% 2,553 2,477 3%

Cost of Goods Sold (476) (446) (462) 7% 3% (1,760) (2,089) (16%)

Gross Income 136 190 153 (28%) (11%) 793 388 104%

Gross Margin 22% 30% 25% (7,7 p.p.) (2.7 p.p.) 31% 16% 15.4 p.p.

SG&A (49) (46) (37) 6% 32% (163) (133) 23%

Other Operating Income (Expenses) (4) 0 (3) - 56% (3) (3) (17%)

EBITDA for the Segment 103 161 131 (36%) (21%) 696 322 116%

EBITDA Margin for the Segment 17% 25% 21% (8.5 p.p.) (4.5 p.p.) 27% 13% 14.3% p.p.

Net Sales Revenue – BRL million 2.014 2.066 2.363 (3%) (15%) 8.913 8.240 8%

EBITDA for the Segment - BRL million 338 524 505 (35%) (33%) 2,463 1,122 120%

*Unreviewed financial information by the auditors and the Fiscal Council (pages 43 and 44) 2016 | Braskem | Annual Report 44

MEXICO In the first year of operation, rest was exported to several BUSINESS STRUCTURE the average utilization rate of regions, among which are Asia, OF BRASKEM IDESA the polyethylene plants at the Europe, and the United States. Braskem Idesa Petrochemical This business segment consists of an ethane-based cracker, Complex was 42%, registering In Mexico, the sales price for two high density polyethylene (HDPE) plants, and one low 443 kton of PE production in 2016. polyethylene (PE) is referenced density polyethylene plant (LDPE) with annual production In the year, 431 kton of PE were in the price of resins traded capacity of 1,050 kton of PE. Since May 2016, the result sold, including resale of resins, in the American Gulf region, of Braskem Idesa is no longer registered as a project to meet the Mexican demand for whose average amount in 2016 and became a reportable operating segment. The same grades that are not yet produced was US$ 1.100/t, which was 9% occurred with the result of the LDPE plant, but only as of during the ramp-up phase of the below 2015. In this scenario, August 2016. plants.11 the net revenue recorded in 2016 was BRL 1.6 billion (US$ Of the total sold, 46% were to 474 million). the Mexican market and the

FINANCIAL OVERVIEW (BRL MILLION) 4T16 3T16 4T15 VAR. VAR. 2016 2015 VAR. MEXICO* (A) (B) (C) (A)/(B) (A)/(C) (D) (E) (D)/(E)

Net Sales Revenue 714 538 - 33% - 1,587 - -

Cost of Goods Sold (427) (325) - 31% - (1,016) - -

Gross Income 287 214 - 34% - 571 - -

Gross Margin 40% 40% - 0.5 p.p. - 36% - -

SG&A (67) (79) - (15%) - (240) - -

Other Operating Income (Expenses) (27) (43) - (37%) - (125) - -

EBITDA for the Segment 343 214 - 60% - 537 - -

EBITDA Margin for the Segment 48% 40% - 8.3 p.p. - 34% - -

11 Ramp-up is a term used in economics and business to define the early stage of industrial production 2016 | Braskem | Annual Report 45

05. Innovation Global Compact - Principles 7, 8 and 9

BRL 275 million in 334 Development of PROJECTS FOR THE a new Master ANNUAL EXPENDITURES DEVELOPMENT OF ON INNOVATION AND NEW PRODUCTS AND Plan to increase TECHNOLOGY PROCESSES the use of each country’s natural talent for % Research and 12.4 Development IN THE LAST THREE YEARS, 12.4% OF THE SALES GENERATED BY THE POLYOLEFIN UNIT IN BRAZIL WERE BASED ON PRODUCTS DEVELOPED BY THE INNOVATION AREA

€ million 2 INNOVATION 5 & TECHNOLOGY INVESTMENT IN A NEW TECHNICAL CENTER IN CENTERS: TRIUNFO BRL 1.3 billion GERMANY, REFLECTING BRASKEM’S PROGRESS (BRAZIL) AND FROM 2011 TO 2016, BRASKEM’S IN ITS INTERNATIONALIZATION PROCESS, PITTSBURGH DISBURSEMENTS IN INNOVATION AND FOCUSING ON LOCAL CUSTOMER SERVICE (UNITED STATES) TECHNOLOGY TOTALED BRL 1.3 BILLION 2016 | Braskem | Annual Report 46

Braskem’s strategic vision is to support the development of the industry with investments in innovation and technology. The dynamics of its business activity, influenced directly by the constant oscillation of prices of commodities, requires that the Company keep below the industry average cost curve, something that can only be achieved by developing new solutions that provide greater gains in production efficiency.

In addition, as a result of the Company’s global commitment to improving sustainability, innovations are also fundamental to reducing the environmental impacts inherent to large-scale industrial production and to generating new businesses resulting from disruptive creations that can guarantee the exclusivity of supply by protecting the patent right. 2016 | Braskem | Annual Report 47

Innovation IN DECEMBER 2016, THE PORTFOLIO FOR Structure THE DEVELOPMENT OF NEW PRODUCTS AND PROCESSES HAD TOTALED A POTENTIAL NET In 2016, Braskem improved its innovation and technology structure, PRESENT VALUE OF BRL 8.5 BILLION. equipping units and reformulating processes and strategies for research and development (R&D).

INNOVATION IN FIGURES

302 7 1 334

Team Members Pilot plants Renewable Chemicals Research Projects for the development of Center in Campinas (SP) new products and processes

2 2 1 10

Technical Centers: Wesseling Technology and Innovation Process Technology Development New patent applications (Germany) and Coatzacoalcos Centers: Triunfo (Brazil) and Center in Mauá (SP) and 73 patent extensions (Mexico) Pittsburgh (United States) 2016 | Braskem | Annual Report 48

Innovation Processes

As part of the area’s efforts, Advisory Group, consisting of five Braskem has consolidated a external members, in five distinct master plan for investments in areas of expertise: Science innovation activities. Based on of matter, macromolecular this new global action dynamic, chemistry, polymer catalysis, Braskem aims to increase the use process and thermodynamics, of each country’s natural talent and renewable chemicals. for research and development of innovation, while stimulating In 2016, meetings were integration among its different held focusing on Braskem’s units. Innovation and Technology programs, in order to The Company makes decisions evaluate efforts undertaken in on innovative projects and innovation based on scientific investment policies in science opinion and in view of global with the support of the Scientific technological trends. 2016 | Braskem | Annual Report 49

Investments INAUGURATION OF THE TECHNICAL CENTER IN EUROPE - WESSELING (GERMANY) From 2011 to 2016, Braskem’s carried out jointly with clients With a €5 million investment, the new Wesseling Technical Center is a reflection of Braskem’s progress disbursements in innovation and partners. Contributions to in its internationalization process and reinforces its commitment to Clients and the European market in and technology totaled BRL new structures and purchases of developing new products and applications, which will contribute to expanding the portfolio and the technical 1.3 billion. This is a strategic equipment in 2016 totaled BRL assistance provided. investment, since it also serves 31 million. to support innovation initiatives PROCESS TECHNOLOGIES DEVELOPMENT LABORATORY (LDTP) TECHNOLOGY AND INNOVATION Located at the Mauá petrochemical complex in São Paulo (Brazil), the LDTP received an investment of BRL 4.4 CENTER, TRIUNFO (RS) million in 2016 to modernize and acquire equipment, which will make it possible to strengthen the development of resin production process technologies, basic petrochemicals, and specialties. Among the most outstanding kayaks, and agricultural parts, contributions during the year was mainly geared toward the civil the investment of BRL 2.2 million construction and retail markets. to qualify the Technology and The investment also includes a Innovation Center in Triunfo (RS). micronizer and auxiliary equipment Rotomoulding equipment was that will be used to support Clients acquired, a segment characterized with the new developments. The by the production of large, hollow inauguration event of the new pieces, such as water tanks, laboratory will take place in 2017. cisterns, children’s playgrounds,

TECHNOLOGY AND INNOVATION CENTER, PITTSBURGH (UNITED STATES) At the Technology and Innovation tools available in polymer science Center in Pittsburgh, Braskem laboratories. The investment invested US$ 845,400 (BRL 2.3 allows Braskem to access this million) in upgrading the Nuclear state-of-the-art technique and Magnetic Resonance (NMR) seeks to expand and intensify equipment. NMR is one of the the understanding of modified most powerful structural analysis polymer resins and catalysts. 2016 | Braskem | Annual Report 50

Products and Solutions Development G4-8, G4-EN27

Braskem’s growth strategy is products developed by the based on developing sustainable Innovation area. and value-added solutions for different production chains that In 2016, the Company supported use plastic as an essential raw 470 Clients, with the aid of material when manufacturing its 20,000 support analyses from end products. the Technology and Innovation NEW BRASKEM RESINS AT K FAIR Center of Brazil, and another To this end, the Company makes 60 Clients with approximately For the fifth time, Braskem other materials, and excellent transportation. Completing significant investments in the 16,000 analyses in the United participated in the 2016 K Fair in thermal and acoustic insulation, in the current portfolio, Braskem research and development (R&D) States. Frankfurt (Germany), the main addition to being totally recycled. Flexus Cling is recommended of new products and services international event in the plastics With this resin, Braskem intends for composing the outer layer adhering to its Clients’ business Regarding patents, the Company and rubber industry. The Company to establish partnerships for the of the film, providing the end models in the various sectors of submitted 10 new patent exhibited a portfolio of innovative development of new applications product with excellent handling the processing industry. In the applications and 73 patent solutions developed throughout in the automotive, industrial, performance and low unwinding last three years, 12.4% of the extensions. Throughout its the year, among which we highlight packaging, civil construction, and force. sales generated by the Polyolefin history, Braskem has contributed the launch of Braskem Amppleo, a home appliances markets. Unit in Brazil were based on 1,030 patent documents. polypropylene resin with High Melt Braskem Rigeo Lumios: New Strength properties. The resin, In addition to Braskem Amppleo, polyethylene resin that provides which was specially developed Braskem presented other high gloss and better finish for for the production of high innovative solutions during the hard blown-moded packages. performance foams, can withstand fair. Among them, the following This launch is in line with the temperatures up to 100°C without stand out: market trends and expands deforming, and enables the the supply of products to the manufacture of products with Braskem Flexus Cling®: packaging markets for cosmetics, widely versatile applications within Specially developed for stretch hygiene and cleaning, and a large density range (from 35 film extrusion, the polyethylene food, resulting in an even more kg to 300 kg per cubic meter), resin primarily serves the market complete portfolio with greater a reduced weight compared to of cargo protection during value added. 2016 | Braskem | Annual Report 51

Braskem Plastic in Space

After over a year of operation and a NASA supplier. first piece made from Green research, in 2016, Braskem The technology enables the PE created off the Earth was completed the project to manufacture of tools and spare a pipe connector for irrigating develop a solution in Green parts in space made of resin vegetables. Polyethylene for 3D printing of renewable origin, giving in zero gravity environments. space missions more autonomy. The equipment, which will make several types of parts with the The project was conducted Braskem’s Green Plastic is now I’m greenTM Polyethylene (green through a partnership between being used to create parts plastic), is at the International Braskem’s Technology and in space using the Additive Space Station (ISS) and was Innovation team and Made In Manufacturing Facility (AMF) developed by Made In Space Space, a leading North American printer. Braskem’s UTEC with the support of CASIS company in the development (UHMWPE) was used in the (Center for the Advancement of of 3D printers for zero gravity creation of the printer. The Science In Space). Photo credit: NASA credit: Photo Photo credit: NASA credit: Photo 2016 | Braskem | Annual Report 52

WECYCLE BRASKEM LABS Wecycle, Braskem’s Brazilian resins, which, previously, were In 2016, Braskem held the monitored by a Braskem Leader, relevant to the companies were platform for the recovery being discarded. Approximately second edition of Braskem selected according to the made on behalf of Braskem of plastic waste along the 120,000 big bag packages will Labs, an incentive program for similarity between their business Labs. Half the entrepreneurs production chain, achieved be recycled annually, which entrepreneurs that have solutions experiences and the challenges of said that the program generated important advances throughout should generate a potential focused on sustainability and each entrepreneur, having received business for their company, and 2016. volume of 30 tons per month innovation, and have social at least four sessions of individual 75% developed improvements of post-consumer recycled resin impact. The program, developed and collective mentoring on topics in their solution or even made The first polypropylene and (PCR). The novelty may be in partnership with Endeavor - a relevant to their business, as well a new product. Another 67% polyethylene resins made from applied in household utilities, global, non-profit organization as contents online, tailor made by obtained investment in 2016, and fully recycled content were garden products, and lids. fostering entrepreneurship - has Endeavor. Through the program, two entrepreneurs attributed the launched. Combined production broadened its thematic scope entrepreneurs also have access to result directly to their participation volumes can reach 50 tons Possible applications of by accepting applications for a network of strategic players in in the program. The overall per month. Braskem works in polyethylene WCL L004 SCV chemical solutions, as well as their market - including potential evaluation uses the Net Promoter partnership with recyclers in include bags, laminated looking at proposals for social Clients, partners, and investors, Score methodology, which shows São Paulo, which undergo an containers, tarpaulins, flexible and environmental solutions for as well as several Braskem teams, how much the participants would audit process that assesses packaging, and tubes, and it plastic. As a special topic of the such as Innovation, Sustainability, recommend the experience to legal, environmental, and social is produced from used and year, Braskem Labs will also select and Marketing. another entrepreneur at the same issues, as well as product discarded bags at Braskem two projects to combat the Aedes level. The result, of 9.1 out of a quality. Distribution Centers. The total aegypti mosquito. In all, 54 mentors became possible 10, indicates the highest volume of recycled resin can involved with the program, level of satisfaction and confirms The polypropylene WCL H reach 20 tons per month in 2017, In 2016, Braskem Labs received between Braskem Leaders and that respondents will indeed act 1003 BBM is produced from which represents the monthly 190 registrations, an increase of mentors from the Endeavor as promoters of the program. recycling big bags used by the recycling of approximately 19.5% over last year. Of the total, network. The entrepreneurs Company when transporting 200,000 bags. 12 projects sent by young Brazilian participated in three classroom entrepreneurs from the states training events and closed the of São Paulo, Santa Catarina, program with Demo Day, where Rio Grande do Sul, Amazonas, they presented their solutions and Pernambuco, were selected to an audience of 180 Braskem for development. The selected investors, mentors, partners and proposals were chosen considering clients. LEARN ABOUT THE the innovation of the proposal, PROJECTS SELECTED ON the business model, social impact, At the end of this edition, BRASKEM LABS market potential, and entrepreneur Braskem spoke with participating WEBSITE profile of the proponents. entrepreneurs seeking their (portuguese only) evaluation of the program. In Participants were individually all, 48 business connections 2016 | Braskem | Annual Report 53

ODEBRECHT BRASKEM DESIGN CHALLENGE The Odebrecht Braskem Design A total of 24 students participated Challenge is an initiative that in the Challenge (forming eight encourages university students to teams) from four institutions develop innovative applications with traditional Architecture in plastic for urban furniture. In and Design courses: Pontifícia 2016, in its fourth edition, the Universidade Católica do Rio Company expanded the project de Janeiro (PUC Rio), Rio de and took it to Rio de Janeiro with Janeiro State University (UERJ), the goal of using the winning Federal University of Rio de pieces in public areas of Porto Janeiro (UFRJ), and Fluminense Maravilha, the central region of Federal University (UFF). the city that has undergone a revitalization process.

With the central theme “Urban furniture for transforming spaces,” Braskem offered challenges to the participating university students divided in two categories: Food and Artistic Presentations; Rest and Work. The winners were, respectively, the Fluminense SPONSORING THE BRAZILIAN Federal University (UFF) and the Federal University of Rio de PARA-ATHLETIC TEAM Janeiro (UFRJ). Overcoming is improving yourself every day. With this motto, Braskem, sponsor of the Brazilian Para- athletic Team since September 2015, reinforced the para athletes’ ability to overcome through the sport. In Brazilian para-athletics, plastic has a practical application, since it is part of the composition of prostheses, making them lighter and better adapted to the athletes’ legs, improving performance and comfort.

In 2016, Braskem renewed its partnership with the Association for Assistance to the Disabled Child (AACD) and donated 18,000 tons of polypropylene to produce approximately 24,000 products, such as prosthetics, vests, and orthopedic appliances, among others. 2016 | Braskem | Annual Report 54

Life Cycle Assessment

Leader in industry initiatives to stages of manufacturing, power Sustainable Development Goals strengthen the environmental generation, and transport.) (SDG). In 2016, the alignment attributes of plastic, Braskem Between 2011 and 2016, a total level of the project pipeline was has been developing several of 41 Life Cycle Assessments and 84%. This action reinforces the projects based on Life Cycle five Carbon Footprint studies Company’s role as a provider of Assessment (LCA) studies, a were completed, identifying the social and environmental solutions technique used by the Company advantages and priority areas for for society and its purpose of since 2005 to assess the product improvement. improving people’s lives through environmental aspects and the chemistry and plastic. potential impacts associated In addition, a methodology with the product (from the was developed to identify the Throughout the year, Braskem extraction phase of raw materials alignment of the development completed a total of ten Life from nature to final disposal projects of new thermoplastic Cycle Assessment studies, among after use, going through all resin applications with the which the following stand out:

Recycled Plastic Resins Casa Clic

In 2016, Braskem presented who use recycled materials in new seeks to reduce the volume of In 2016, Braskem conducted study, carried out in partnership environmental profiles of packaging. The project, the result disposable packaging in landfills. an LCA study comparing the with GoClic (a participant of the mechanical recycling of of the Wecycle platform launched In LCA studies, these materials are PVC plastic solution applied to Braskem Labs), is aligned with polyethylene and polypropylene, in 2015, aims to stimulate capable of reducing environmental housing construction innovation the Sustainable Development promoting reduced environmental consumption of recycled plastic impacts associated with industrial with a similar traditional Goals of the United Nations impact of those who provide resins, and is in line with the production by 35%. masonry construction. The result (SDG 11), which aims to address material for recycling and those national solid waste policy, which was improved environmental the housing deficit in the world performance by about 16%. The using sustainable solutions. 2016 | Braskem | Annual Report 55

06. Stakeholders Global Compact – Principle 1, 2, 3, 4, 5, 6 and 10

1.2% IN BRAZIL, THE VOLUNTARY TERMINATION RATE FOLLOWED THE DOWNWARD TREND OF RECENT YEARS: 1.2%.

77% FAVORABILITY IN THE WORK ENVIRONMENT SURVEY

Braskem’s social investment in Brazil totaled approximately BRL 26 million in social and 90% environmental and cultural projects. In the United OF PROFESSIONALS WOULD RECOMMEND States and Germany, Braskem invested over BRL 7,656 BRASKEM TO A 550,000, and in Mexico, BRL 1.3 million. TEAM MEMBERS FRIEND WHO IS AROUND THE WORLD LOOKING FOR A JOB 2016 | Braskem | Annual Report 56

One of Braskem’s fundamental principles is the practice of responsible management, based on trust and transparent dialogue with all its stakeholders, among which we highlight the Team Members, Communities close to their business activities, Clients, Suppliers, and Government, in their different Work spheres. Through coherent initiatives dedicated to each of these stakeholders, the Company seeks to integrate links, aiming to improve the life of society through sustainable solutions using chemistry Environment and plastic. Survey

DESIRE Team Members TO STAY Global Compact - Principle 6 % Braskem has a Management constant concern with training the continuous evolution of its 88 of the respondents Policy that puts people at the new generations and qualification management model. In 2016, the intend to work at center of its Business strategy. of people to be an integral part Company achieved the voluntary Braskem for a long time. The organizational culture of the of Braskem’s construction of the participation of 82% of its Team Company is based on principles future. Members, and the survey grew by that guide its actions with values nine percentage points compared such as trust in people, planned Periodically, in partnership with Great to the previous edition, in 2013, MOTIVATION delegation, proximity between Place to Work consulting, Braskem reaching a favorability rate of 77%. Leaders and Subordinates, open conducts a Work Environment This result indicates an evolved communication, creation of Survey in all the countries where positive perception of the work 89% of Team Members say a positive work environment, it is present, in order to support environment offered by Braskem. they enjoy going to work.

PRIDE 90% of professionals would recommend Braskem to a friend who is looking for a job. 2016 | Braskem | Annual Report 57

TOTAL NUMBER OF TEAM MEMBERS DIVERSITY 13 BY GENDER AND REGION G4-10, G4-LA12 G4-10

Braskem closed the year 2016 operations (Alagoas, Bahia, note that in the administrative One of the key initiatives of the LGBT14 Rights, standing out as with 7,656 Team Members, Rio de Janeiro, São Paulo, and areas, women represent 52% people strategy is centered on the the first large Brazilian company of which 6,005 were men Rio Grande do Sul), 711 in the of the workforce, with 23% in Diversity Program. The program to adopt this commitment and 1,651 were women. Of United States, 752 in Mexico Leadership positions and 52% aims to stimulate an increasingly through the Companies and this total, 5,976 worked in and 174 in Germany, as well as in young professional programs inclusive environment at LGBT Rights Forum. industrial units and offices 43 professionals in commercial (Young Apprentice, Technical Braskem and foster learning located in the five Brazilian offices throughout the rest of Internship, University, and through differences, based In addition, several actions are states where Braskem has the world. It is important to Associate Program). on respect for how each one already in progress and were expresses him or herself in reinforced throughout 2016. United International society. Braskem believes that Focusing on gender equality, Brazil States Germany Mexico Offices Total this initiative not only enriches Braskem held two editions of the work environment, but the Braskem Women’s Forum, is also essential for Business promoting lectures on the role Survival, Growth, and Perpetuity. of women in the labor market, in order to engage Team As an evolutionary process Members and reinforce the 21% 79% 19% 81% 33% 67% 22% 78% 40% 60% 21% 79% of the Diversity Program, importance of this aspect. The throughout 2016, Braskem took lectures were attended by Carla two important steps towards Tieppo, addressing the topic equality, through its commitment “Female and Male Brains,” and 1,279 4,697 133 578 58 116 164 588 17 26 1,651 6,005 to the Gender and Race Ana Paula Vitelli, who spoke on Equity Program of the Federal the “Including women in the Total Total Total Total Total Total Government, and to the Charter labor market and promoting 5,976 711 174 752 43 7,656 of Business Commitments and gender equality in companies.”

13 In order to clarify the scope of this material, it is worth mentioning that the results of quantiQ were reported in the Financial Statements of the report, but are not considered in the social and environmental indicators. Its management was already carried out Braskem closed the year 2016 with 7,656 Team Members. independently even before the sale of the company. quantiQ was sold on 1/10/2017 (signing), with closing of the transaction on 4/03/2017 (closing). 14 Acronym for Lesbian, Gay, Bisexual, Transvestite, Transsexual 2016 | Braskem | Annual Report 58

These initiatives are part of an agenda that integrates the Gender Equality Program, created in 2015 by Braskem and divided into four pillars: PEOPLE DEVELOPMENT Attracting and developing people to support planned growth is another important part of Braskem’s P&O 1. Women’s careers: aims to promote the empowerment of women strategy. Throughout 2016, the Company invested BRL 19 million in various training actions, trained 6,968 in their careers, as well as foster the number of women in leadership Team Members, with an average investment of BRL 2.7 thousand and 32 training hours per Team Member. positions at Braskem. 2. Maternity and paternity: provides support so that women and men may make the most of this phase of life. Investment of Average investment of 3. Health and well-being: supports health and wellness actions for women and men, such as Pink October and Blue November. BRL 19 million BRL 2.7 thousand 4. Procurement and communities: brings Braskem a greater number in training per Team Member of women suppliers and encourages the practice of diversity programs in the Company’s sector of activity, and promotes the empowerment Training of of women through social programs in the communities. 6,968 32 Team Members training hours per Team Member Respect and Equality

The presence of women in environments and occupations that were previously predominantly male has become increasingly common. Aware of this need, especially in the production units, in 2016 Braskem implemented specific breastfeeding support rooms for the withdrawal and storage of breast milk in all its units in Brazil. In addition, the Company adapted Throughout the year, Braskem development of the existing Leaders new Team Members in the 73 bathrooms in Brazilian industrial plants, adapted work improved the execution of several at the Company. Some of the main culture and values of the uniforms for pregnant women, defined parking spaces for programs focused on a better training conducted in 2016 was: Company. pregnant women at all locations, and extended the period of work environment, integration, maternity leave granted to female Team Members to 180 days. qualification, and training of • Culture and Integration • Global Leadership The results of these initiatives led Braskem to be nominated, Team Members, and on preparing Program (Global): 2,660 Development Program: in its first year of implementation of the Program, as a finalist Leadership to deal with the people participated in a Braskem trained 30 Leaders in in the WEPs (Women Empowerment Principles) Award of UN challenges of the Company’s number of actions in the units the Global Leaders Program, Women, receiving honorable mention for its work promoting continuous and structured growth. and offices where Braskem which aims to develop gender equality. Braskem operates based on operates in Brazil, the United professionals aligned with the Leadership Trails, a set of programs States, Mexico, and Germany, Company’s internationalization structured according to the stages of with the purpose of training strategy. 2016 | Braskem | Annual Report 59

• Development Programs for It is important to highlight the Company’s commitment to training local Team Leaders and Area Leaders corporate leaders, in order to ensure the diversity of the management (Brazil): participation of 60 team and strengthen human capital with the participation of members coordinators and 30 managers, of the local community in decision-making processes. In 2016, respectively, with the objective Braskem ended the year with 53% of senior management from local of improving the performance communities in Brazil, 1% higher than the previous year. as Educating Leaders, through reflection, education through work, and sharing experiences. RATIO OF SENIOR MANAGEMENT HIRED WITHIN • Leadership Development 15 Program (USA and Mexico): in THE LOCAL COMMUNITY the United States, 70 professionals G4-EC6 from the first two stages of leadership 2014 2015 2016 BRASKEM YOUNG were developed through the Program. In Mexico, 29 leaders participated in PROFESSIONALS 2016. Brazil 52% 52% 53% The search for professional vulnerable situations, seeking improvement at Braskem also their inclusion in the labor • Leadership Self-Development involves young professionals market. In 2016, Braskem used Platform (Brazil, Mexico, and looking to the Company to take social networks to impact this United States - - - United States): an online platform, the first steps in their career. audience with the opportunities focused on the development of Through its own programs, and offered, disseminating content Team Leaders, Technical Team others developed in partnership that helps young adults to direct Leaders, and Area Leaders in Germany 36% 63% 67% with entities such as SENAI their career and learn about the Braskem’s Culture competencies (National Industrial Learning day-to-day work of the Company, through videos, e-learning, and Service), technical education based on statements from various colleges, and universities, Braskem professionals. In total, nearly five actions scripts. The platform will be Mexico 62% 21% 26% launched in Germany in 2017. works toward the development million young adults were impacted and training of its future Team by the Company’s social networks. Members. International - 38% 0% Young Technician and Young Offices 15 To calculate this ratio, Team Members Young Apprentice Program – Partner of senior management, Team Members of grades 3 to 10 and who have Subordinates Brazil Focused on training future are considered. These grades include - 49% 49% With a duration of one year and technicians, engineers, analysts, managers, directors, vice presidents and Total president. To calculate the number of a half, the program enables the and other professionals in Leaders from the local community, the development of the professional Braskem’s operations, the Young number of Senior Management Leaders versus the place of birth is used, with the skills and competencies of Technician and Young Partner exception of the United States, which does young adults living in socially programs are structured for not have this information for legal reasons. 2016 | Braskem | Annual Report 60

people taking Technical Education By strengthening its relationship Rio de Janeiro, and Rio Grande Young Operator Program - Development Program (PDCT) and university courses. These with educational institutions, do Sul, to promote Braskem’s Brazil were formed for the Operation programs, which may last one or the Company has continuously brand and make contact with the Aimed toward educating young and Maintenance teams, involving two years, annually offer internship made progress identifying new university audience. adults wishing to build a career in 134 Team Members. opportunities in locations in Brazil professionals and strengthening its the Industrial Operations industry, where Braskem has industrial position as a Company capable of the Young Operator Program is Also in partnership with operations: Mauá (SP), Paulínia attracting young adults willing to carried out in partnership with SENAI SENAI, in the states where the (SP), Duque de Caxias (RJ), Triunfo learn and contribute to the growth The technical and and lasts for 18 months. In 2016, the Company has production units, (RS), Maceió (AL), and Camaçari of their career and the Company. university internship program enrolled 4,541 young adults the Petrochemicals Technical (BA), and at the other administrative and qualified 219 operators. Course began to be offered, with offices of the Company. Thus, in 2016, Braskem began programs had nearly program content aligned with a partnership with the Junior 32,000 registrations Continuing the education and the demands of the industry and In the United States, the 2014 class Business Federations of the states in 2016. The number development process of Braskem’s with the technical training needed of Associates closed with three of Rio Grande do Sul, Bahia, and technicians and operators, over to prepare new chemical and associates, two engineers and one Rio de Janeiro, supporting young of university 3,900 Team Members participated petrochemical process operators. business associate. In addition, four professionals in their academic students enrolled in specific educational actions, such trainees participates in the Science environment. In addition, the increased 22%. as seminars, technical forums, Without Borders16 program and 16 Company participated in a total of six and e-learning. In addition, four SALARIES participated as summer interns. events at universities in São Paulo, classes of the Technical Skills AND BENEFITS

G4-EC5

Braskem has a global competitive ACTION PROGRAM CYCLE remuneration strategy in all G4-LA11 locations where it operates. To operates in Brazil, the United Each Team Member has the throughout the year, through identifying opportunities for support this process, periodic salary States, Mexico, and Germany. opportunity to talk with his or dialogue between the Leader improvement to be included in surveys are carried out to assist in All Team Members have an her Leader in order to align their and his or her Subordinate. the Program for the next period, updating internal benchmarks and Individual Action Program, thoughts on the challenges for The Action Program cycle or in the Plan of Education for revisions of the Team Members’ which is required in order to the work year, the resources consists of four stages: Work, which includes actions to monthly and variable remuneration. needed to carry them out, and Planning/Pact, Monitoring, support Continuing Education receive variable remuneration, which is linked to the level of what support will be fundamental Assessment, and Judgment. and recommendations for Monthly remuneration is based on achievement of the goals and to their success. This is recorded The assessment takes place at corporate programs. The ranges with the purpose of making alignment with the Company’s in the Action Program (PA), the beginning of the following process is carried out at the team remuneration management organizational values. which is monitored and assessed year and serves as a basis for units and offices where Braskem flexible, differentiating the skill levels of the Team Members, and applying the concept of meritocracy. 16 The Science Without Borders Program is an initiative of the Brazilian Government, Ministry of Science, Technology and Innovation (MCTI), Ministry of Education (MEC) and of its respective partnership Monthly remuneration ranges were institutions (CNPq and Capes) and MEC’s Departments of Higher Education and Technological Education of MEC to promote the consolidation and internationalization of Brazilian science and technology through international exchange and mobility. determined based on the following: 2016 | Braskem | Annual Report 61

• 85% of the market median for the initial amount LOWEST SALARY VERSUS RETIREMENT (Development Range) LOCAL MINIMUM WAGE G4-LA10 • Market median at the central benchmark (Target Range) 2015 2016 For Team Members who intend to retire from units in Brazil, Braskem offers • 115% of the market median the Horizons program, which, for a year, prepares and supports professionals SP 1.7 1.8 for the maximum amount and their families for the post-career transition process. The program consists (Advanced Performance RJ 2.2 2.2 of four modules, totaling 40 hours, and has two fundamental pillars: Range) Brazil BA 1.6 1.6 1. Reflection of life and career: process of awareness about the Variable remuneration, carried out AL 1.5 1.5 new stage of life that is approaching. in the form of Profit Sharing (PLR), RS 1.8 1.8 is aligned with Braskem’s strategy 2. Knowledge management: ensure the continuity of the Company’s and culture, making it possible to United States 2.9 3.1 business through a structured process of knowledge transfer acquired by each Team Member throughout his or her career that attract and retain talent. Its main Germany 2.0 2.0 objective is to stimulate achieving are important for Braskem’s succession process. Mexico 3.6 3.5 the best results and to recognize

individual performances. The main G4-LA2 individual challenges are included At Braskem, benefits are offered from the time of hiring and there in the Action Program (PA) of each is no distinction between full-time, part-time or fixed-term Team Team Member, and the calculation Members.18. basis includes indicators such as operating EBITDA, working 17 The calculation used includes the lowest salary offered by Braskem, using the Hay table • Health and Dental Plans (Brazil, Mexico, and the United States) (table of positions and salaries established by Braskem), considering 85% of the range capital variation, and operational • Private Pension – Odeprev (Brazil, United States, and Germany)19 (least % of range varying between 85 and 115) from the lowest position at the Company investment (CAPEX). versus the local minimum wage that is established by the collective bargaining agreement, • Life Insurance Life Insurance 16 (Brazil, Mexico, United States, and in the case of Brazil, and the local minimum wage for non-union Team Members. Germany)20 18 Currently, Braskem does not have Team Members in Brazil hired for a fixed term, only The variation in the ratio of the Apprentices (16), who are hired according to the country’s own regulations. In Germany, • Child Care Assistance (Brazil) there are three Team Members hired for a fixed-term. Company’s lowest salary compared • Maternity and Paternity Leave (Brazil, Mexico, United States, and 19 Braskem provides private pension plans in Brazil, the United States and Germany, with to the local minimum wage the purpose of supporting the Team Members in the planning and preparation of their post- 21 Germany) career period and their retirement. In Brazil, Braskem offers the supplementary pension remained stable throughout 2016, • Meal vouchers (Brazil); food stamps (Mexico); discounts at nearby plan called ODEPREV - Odebrecht Previdência, put together sustainably, without risks of with a slight increase of 1 and 2 actuarial imbalance, with a defined contribution format, exclusive to Team Members of the restaurants with Braskem directly paying the restaurant (Germany) Odebrecht Organization. points, respectively, in the state of • Disease Support (Brazil) 20 ODEPREV – Odebrecht Previdência offers participants a social security insurance São Paulo (Brazil), and in the United (PrevSeguro), which extends the financial protection of the Plan Participants and/or their • Special Child Assistance (Brazil) relatives, in case of death (natural or accidental), or total and permanent disability (due to States. It is worth mentioning that illness or accident), occurring before the age of 65. the salaries at Braskem are equal 21 Braskem tracks the exit and return indicator of maternity leave only in Brazil, and does not monitor this in other countries. In 2016, a total of 33 Team Members utilized the for men and women within their benefit, and 29 was the number of Team Members who returned to work after the maternity respective positions.17 leave period. (G4-LA3) 2016 | Braskem | Annual Report 62

HIRING AND TERMINATION G4-LA1

In 2016, the Company had the lowest turnover in its history, with rates of 1.9% in global operations and 1.2% in Brazil. This is the best result in the Brazil since 2009.

VOLUNTARY TERMINATION RATE22 2014 2015 2016 Men Women Men Women Men Women

Overall Overall Overall Brazil 2.04% 2.33% 3.36% 1.50% 1.90% 3.40% 0.80% 1.20% 2.80%

Overall Overall Overall United States 4.95% 5.12% 5.83% 6.10% 6.20% 6.50% 3.50% 3.40% 3.00%

Overall Overall Overall Germany 2.80% 3.13% 3.77% 1.80% 2.90% 4.90% 0.00% 3.50% 10.30%

Overall Overall Overall Mexico 2.03% 1.99% 1.82% 2.20% 2.30% 2.70% 4.20% 4.90% 7.40%

Overall Overall Overall Overall 2.29% 2.54% 3.41% 2.00% 2.40% 3.60% 1.40% 1.90% 3.60%

In addition, Braskem maintained the hiring average when compared to the previous year. The ratio of women hired in the period was higher than that of men for the period, almost the same level as in 2015.

2014 2015 2016 Men Women Men Women Men Women

Overall Overall Overall Overall hiring rate 8.60% 9.72% 13.70% 6.30% 7.00% 9.20% 6.70% 7.20% 9.10%

On the other hand, the total number of people terminated was much lower when compared to 2015. In total, 561 Team Members were terminated in 2016, which was 124 fewer people than in 2015.

22 In order to clarify the scope of this material, it is worth mentioning that the results of quantiQ were reported in the Financial Statements of the report, but are not considered in the social and environmental indicators. Its management was already carried out independently even before the sale of the company. quantiQ was sold on 1/10/2017 (signing), with closing of the transaction on 4/03/2017 (closing). 2016 | Braskem | Annual Report 63

FORMAL AGREEMENTS WITH TRADE UNIONS G4-LA8

Braskem respects trade union agreements (which includes representation in all locations economic, social, safety, where it operates and focuses environmental, and trade union on local labor legislation as issues), as well as agreements the minimum standard for the concerning working hours, and Company’s obligations to its profit sharing. In addition, in Team Members. It is part of Brazil, representatives from Braskem’s activity to maintain Labor and Trade Union Relations an open channel for dialogue conduct regular training with so that formal agreements are Company Leaders in order to made wherever necessary. keep them updated on this aspect. In 2016, there were 48 In Brazil, collective bargaining meetings in which 470 Team discount of monthly and union Energy, and Gas Workers. Based to review the Profit Sharing agreements are carried out Members were trained. contributions. Commitments on an open and transparent Program. annually, on specific dates regarding the agreements are dialogue, the committee in each region where the Confirming its respect for included in the Action Program convenes every month to be In the United States, the labor Company has operations, and freedom of association in each (PA) of each Team Member, informed about the metrics and agreement includes monthly the possibility of extending region of activity, Braskem and are submitted to a formal projects under development meetings of the Health and rights provided for in local has Team Members who are assessment that is documented to improve awareness toward Safety Committee. The main legislation are discussed. There part of trade union leadership. quarterly. health and safety in the work objectives and metrics are is also collective bargaining It is also important to note environment. managed and monitored by a between Braskem, the Workers’ that the collective bargaining In line with its global operation, Safety Management Process, and Commission, and the Union, to rules that have been signed Braskem respects trade Also regarding Mexico, collective the data is evaluated monthly sign an agreement regarding contain clauses that affirm union representation in all its work norms contain clauses that by the Unit Leaders and by the the Profit Sharing Program. the policy of respect for trade locations. In Mexico, Braskem confirm the policy of respect for Committee which, according to the union activities, which relate Idesa operates according to the union activities and freedom of results, may initiate investigations The representatives of to the access of union leaders processes of SEMPRE (Integrated association. Regarding collective and make recommendations for Braskem maintain regular and to factories; remuneration of Health, Safety, and Environment bargaining agreements, every improvement. Germany does not constant dialogue with union union leaders for the exercise of System) and OSHA’s Health and year, representatives of Braskem have in place formal agreements representatives. The Labor and union leadership; payment for Safety Certification, and is part Idesa participate in the review on health and safety, since Trade Union Relations area is union leaders who are absent in of the Executive Committee of of negotiations and collective there are several government responsible, in each region, for order to participate in external the National Union of Chemical, bargaining agreements. Each regulations and follow-ups on the negotiation of base date events related to union activity; Petrochemical, Carbochemistry, year, a committee is also elected these topics. 2016 | Braskem | Annual Report 64

Communities INVESTMENTS In 2016, Braskem and its Team Germany) in philanthropic donations, G4-EC7, G4-EC8, G4-SO1 Members invested BRL 27.5 million benefiting over 60 organizations or Aiming to improve people’s lives the visibility and familiarity 1. Boost human development in social and environmental, cultural, programs focused on the benefits through sustainable solutions in of Company actions. These by stimulating the growth of and sports projects in Brazil, divided of plastic in people’s lives and in chemistry and plastic, Braskem projects, carried out with the the people who make up our into three areas: the fields of science, technology, has defined four strategic Communities surrounding the Communities. • Private Social Investment engineering and mathematics. One objectives for its social and operations and also nationally, 2. Promote social and Projects (ISP): BRL 4.9 of the biggest contributions in the environmental responsibility focus on strategic aspects such as environmental development million. United States was made to United projects: Generate social recycling, incentive to innovation, through chemistry and • Incentivized Sponsorships Way, a 125 year-old organization impact; strengthen reputation; and environmental education. plastic, strengthening the (public interest projects): whose objective is to provide become closer to stakeholders, social and environmental BRL 12.3 million in tax support to local communities. To strengthening relationships The two social causes that guide contributions of our most incentives, plus a BRL 1.8 the amounts invested in the United with Communities; and increase the Company’s actions are: important products. million consideration of direct States, Team Members’ volunteer funding. hours in the local Communities are Strategic Objectives • Odebrecht Foundation: added. BRL 7 million donated to the Development and Growth In Mexico, in 2016, there was Social Impact Visibility, Reputation Familiarity Relationship Program Integrated with a social investment of over BRL Sustainability (PDCIS) and BRL 1.3 million ($2 million MXN) in 1.5 million donated through production projects carried out with SOCIAL RESPONSIBILITY STANCE the Program called Tributo ao the Communities surrounding the Futuro. industrial operation and focused Promote Social and Environmental Drive Human Development Development Through Chemistry and Plastic on generating jobs and income, In addition to direct investments, such as support for Cooperatives Stimulating the growth of the people Strengthening the social and environmental who make up our communities contributions of our main products projects in Brazil raised BRL 8.7 raising tilapias and making million in 2016 with the participation uniforms. External resources were Communities of Neighboring Chemicals and Plastics and Chemicals of several partners, among them also raised, of approximately BRL Interest Communities Plastics Chain as a Solution Ambev, City Halls, SEBRAE (Brazilian 1.6 million ($2.4 million MXN). Sports, Culture, Consumption, Culture Innovative Solutions, Support Service for Micro and Small Professional And Post-Consumption Great Solutions Human Education Enterprises), Elektro, ABIHPEC, and • Braskem Theater Award • Braskem Sports • Edukatu • Braskem Labs Cetrel. The Odebrecht Foundation’s • Braskem em Cena Award • Braskem Environmental • “ser+ realizador” • “Menos Perda, Development and Growth Program Stations Mais Água” • Fábrica de Florestas In the United States and Germany, Integrated with Sustainability Institute Braskem invested over BRL 550,000 (PDCIS), supported by Braskem, has • “Inovar para Construir” (Innovate To Build) (approximately US$ 125,000 in the challenge of establishing a social, • “Lagoa Viva” the United States and €30,000 in economic, and environmentally 2016 | Braskem | Annual Report 65

sustainable development model. A major focus of the program these actions, a change in scenario In 2016, actions were carried out PROJECTS since 2015 has been to is expected, with a significantly involving 390 Communities, directly Braskem’s Private Social Investment projects directly benefited over 96,400 support the development and larger volume of waste being benefiting over 20,000 people, and people in 2016. Among them, the following stand out: implementation of strategies for sent to cooperatives, generating indirectly, another 285,000. Among managing post-consumer waste in substantial increases in income. them, the following stand out: SER+ REALIZADOR the municipalities where Braskem operates. Deliveries to date were The program includes the G4-EN28 • Education: jointly with Rural in Porto Alegre, Salvador, and participation of several partners Family Houses, that benefited Present in all states where Braskem cooperatives supported, 47 received ABC Paulista, and the latter two from the public and private sectors over 320 students from the operates, this initiative seeks to increase technical advice and guaranteed the were given support to prepare such as Ambev, SEBRAE, and the Agriculture, Forestry, and the percentage of post-consumer waste shipment of over 30,000 tons of waste the Consultation Letter to BNDES City Halls of Porto Alegre and Agribusiness courses and recycling in the country, promoting for recycling. Over 8% of this volume to obtain funds to develop their Salvador, which invested over BRL the Aquaculture Qualification the social and economic inclusion of refers to plastics produced by Braskem: waste management plans. With 5.8 million in the year. course in the municipalities waste collectors and the efficiency PE, PP, and PVC. Presidente Tancredo Neves, of the recycling chain. By investing in Nilo Peçanha, and Igrapiúna in equipment and infrastructure of the Due to the economic crisis, only the 2016 HIGHLIGHTS the State of Bahia. sorting units, training and personalized target for sorted mass was met, with technical consulting, recyclable material increase in income prevented by the Todos Somos Porto Alegre 1. Productive inclusion of • Environment: through collectors have been able to increase reduced value of recyclable materials. (We are all Porto Alegre) those pulling carts or the Earth Conservation their productivity and income. There was also an intention to expand In 2016, the program We are carts pulled by animals Organization, which reached the program, which was not confirmed All Porto Alegre came to a close. The waste collectors were the end of 2016 with 9,000 In 2016, the project benefited over in the year. Supported by Braskem, this mapped and registered hectares of conserved area, 3,400 waste collectors, and among the municipal waste management through an active search 201,000 trees planted, program in Porto Alegre (Rio Grande carried out by the 150 families served, more do Sul, Brazil) was created to meet municipality, and, adhering than 2,300 tons of carbon the requirements of Municipal Law to the program, were able

neutralized, and 105 springs SER+ REALIZADOR’S RESULTS 2016 No. 10,531, which prohibited the to choose to migrate to 2014 2015 2016 Goal conserved/recovered. circulation of human and animal the formal labor market or Waste collectors benefited 2,132 3,538 3,444 4,000 traction vehicles in the city. continue in the recycling • Citizenship (Social): jointly business. In total, 2,059 with the Law and Citizenship Waste collectors trained 710 1,103 858 1,100 In order to socially include those people were registered in Institute, which reached the who had their carts taken off the the first phase, of which Waste collectors with an increase in income 402 960 787 1,300 end of 2016 with 305,000 road, efforts were made by public 581 were allocated to other visits to the Communities and authorities, civil society, and the occupations with income, Sorted mass (t) 8,492 25,703 30,824 30,800 raised about BRL 11.2 million, private sector. The program was and 225 are in transition to with the Food Acquisition Sorted plastic (t) 1,928 4,863 5,480 - officially launched in December new activities. Program (PAA). 2012 and included three phases: Sorted PP, PE, and PVC (t) 1,133 3,128 2,601 - 2016 | Braskem | Annual Report 66

2. Restructuring of 3. Environmental education Program cooperatives receive support the sorting system The last stage focused on for renovations and improvements The sorting units formalized mobilizing the population in equipment and infrastructure adherence to the program the with environmental and specialized technical advisory immediate needs and demands education actions. One services. The advisors also help the for investment were identified. of them was the project cooperatives obtain partnerships Over the course of four years, Caminhos da Reciclagem for waste collection, which is what they received the assistance of (Recycling Paths), in which occurred in 2016 with Banco do technical advisors to guide the about 400 teachers were Brasil in Rio de Janeiro and with the sorting process. The leaders brought to sorting units to Post Office in São Paulo. In Alagoas, of the units received training learn about the waste sorting cooperatives were selected in a public aimed toward managing and process, impacting over notice for selective waste collection developing the entrepreneur. 28,000 people. after receiving support from Braskem for the application. With these improvements, Given the success of the Rio the capacity of the selective Grande do Sul initiative, Braskem EDUKATU collection system was fully began to encourage the structured Edukatu is the first online Brazilian achieved, with production per management of solid waste in learning network about conscious the Ministry of the Environment for an action planned with the person of approximately 2.4 other Communities of interest. consumption and sustainability and the Ministry of Education. SESI network was transferred to tons per month during 2016 - In 2016, in the ABC Paulista involving over 28,000 teachers In 2016, it reached 28,000 2017. In addition to the number an increase of 43% compared region, the Consultation Letter and elementary and middle school participants, about 2,400 being in of participants, other indicators to the first quarter of 2015. The for the Inter-municipal Selective students in Brazil. Created in 2013 cities in which Braskem operates. confirm the success of the initiative. average per capita revenue Collection Plan was presented to by Braskem and the Akatu Institute, Over 10,000 students were directly In 2016 alone, the external funding recorded a 42% increase in the Inter municipal Consortium the project has already received involved in intervention projects in for the project from partners was the fourth quarter of 2016, of ABC, composed of the seven support from partners such as HP, their school communities, raising approximately BRL 1.3 million. The compared to the same period municipalities in the region, which Cargill Foundation, Sabesp, Elektro, awareness with 63,000 people website surpassed the two million in the previous year, surpassing will seek funding from BNDES Unilever, KPMG, and Mais Unidos, about conscious consumption. The mark of total views and has already the amount of BRL 1,000. through the document. and gained institutional support from targets for 2016 were not met, motivated over 600 media stories.

EDUKATU’S RESULTS 2014 2015 2016 Accumulated Goals

Accumulated number of participants 7,429 11,850 7,646 28,441 39,350

Accumulated number of teachers engaged 272 377 415 1,084 1,200

Accumulated number of students engaged 2,495 3,915 3,353 9,911 10,450 2016 | Braskem | Annual Report 67

2016 HIGHLIGHTS Turma que Recicla and The game Reciclaki, an app The best results in the application In 2016, actions were also municipalities in the same state, Reciclaki App available for computers and of the “Recycling Class” were launched about the water crisis, as well as actions in the states Edukatu launched Turma que mobile devices, simulates the achieved by the team of teacher conscious energy consumption, of Bahia, Mato Grosso do Sul, Recicla (Recycling Class) in 2016 work of collectors at a sorting Luciene Soares, from Pref. José and hygiene. Edukatu promotes and Pará, all in Brazil. With an with the goal of reflecting on the unit: Various types of waste Custódio da Silva School, in the on-site actions to mobilize expressive amount of educational topic of waste. With the help pass over a conveyor belt, and municipality of Coite do Nóia teachers, training them to use the content produced in recent years, of online games, videos, and the player must direct it to the (AL), which mobilized 230 people, platform and carry out practical in 2017 Edukatu intends to focus infographics, students create correct trash bin for each type of reduced the school’s waste projects for engaging students on gains in scale through on-site actions to reduce the amount of material. Launched in July 2016, generation by 20%, and created and the school community. The mobilization, dissemination, and waste generated in school and in the game has already achieved stronger ties with the region’s activity took place in schools in teacher training for the use of the Community. over 9,500 views. waste collectors. the city of São Paulo and in nine the platform.

FÁBRICA DE FLORESTAS INSTITUTE

Present in the Brazilian states of integrated environmental education. who are trained in seed collection, to the Nursery Garden Schools. Bahia, São Paulo, and Rio de Janeiro, The organization is maintained native seedling production and In 2016, over 1,000 people were the Fábrica de Florestas Institute by Braskem, Cetrel - Odebrecht planting, and maintaining the trained in planting techniques and contributes to the construction Ambiental, and Comitê de Fomento planted areas. The project also 27,000 received sensitivity training. of socially and environmentally Industrial of Camaçari (COFIC), develops the Environmental The result of the year was 88,000 responsible communities through in Bahia (Brazil). The work of the Education Program (PEA), which seedlings produced and, of these, the expansion, recovery, and Fábrica de Florestas Institute is offers guided visits to students 46,000 planted and monitored. All maintenance of green areas, with developed with the Communities, from public and private networks targets for 2016 were exceeded.

FÁBRICA DE FLORESTAS’ RESULTS 2014 2015 2016 Metas

Seedlings produced 165.669 116.572 88.407 85.000

Seedlings planted 83.413 39.206 46.628 41.786

People trained in planting 883 1.064 1.036 740

People received sensitivity training 17.565 16.739 27.506 13.500 2016 | Braskem | Annual Report 68

2016 HIGHLIGHTS BRASKEM’S REGIONAL New Nursery Garden School Also, the 1st Virada Sustentável Summer Eco Parque Sauípe INITIATIVES IN BRAZIL and Virada Sustentável Salvador took place, a festival In 2016, another edition Braskem Theater Award em Cena,” focused on attracting Salvador (Bahia) that, through art, culture, and of the Summer Eco Parque (Bahia) and Braskem em Cena audiences and presenting street In 2016, this project was marked by games, offered reflections on Sauípe Project was held in the Award (Rio Grande do Sul) shows in communities farthest away the inauguration of a new nursery several aspects of sustainability, municipality of Mata de São João, from Porto Alegre’s cultural centers. garden school in Bom Jesus da with cultural activities and training which promoted adventurous Salvador hosted the 24th edition of Lapa, Bahia. A new model for the in parks and public spaces around activities such as a climbing wall, the Braskem Theater Award, which Inovar para Construir program was developed, with the the city. The Itinerant Nursery a zipline, and kayak tours. There received 2,400 people at its awards (Rio de Janeiro) creation of the Itinerant Nursery Garden School attended the event were over 1,700 visitors during ceremony. Other initiatives within Garden School, which was displayed and provided sensitivity training the two months of the project. Eco the project include the Braskem Held in partnership with the throughout the year in places such for about 3,300 people, donated Parque Sauípe protects an area Theater Award Circuit, a theater FIRJAN System, the Inovar para as malls and squares, also in Bahia, 450 seedlings of species native to of 66 hectares in the transition festival in the state of Bahia, and Construir (Innovate to Build) at opportune moments such as the Atlantic Rainforest, and 500 region between two ecosystems in the Braskem Theater Award Show, project is an initiative that Environment Week and Forest Day, children participated in seedling the Atlantic Rainforest: the forest which warms up the local scene seeks to disseminate solutions in June and September. production workshops. and the restinga. and brings the shows closer to the for plastic for civil construction. audience, which was about 3,000 These solutions are published people at the presentations in 2016. on a virtual platform (www. firjan.com.br/visaotecnologica), The Rio Grande do Sul initiative takes dedicated to promoting place during Porto Alegre em Cena, innovative solutions for all one of the largest performing arts sectors of the industry. In 2016, festivals in Latin America, awarding a total of 15 people were trained professionals and plays in six in the professional initiation categories. In 2016, a total of 4,500 course in assembly techniques spectators went to see the plays for modular construction sites nominated for the award. There are in plastic, and 120 people were also projects Sábado em Cena and qualified in the improvement in Braskem “Descentralização Braskem plastic solutions course. 2016 | Braskem | Annual Report 69

IMPACT OF THE OPERATIONS ON COMMUNITIES Green Belts and environmental projects, and In all, 30 of Braskem’s 40 units in 2016, the space received over have a green belt - a green area 5,000 visitors and trained over 124 around the industrial plants that producers. The area stands out for provides another level of protection the preservation of local wildlife and reduces exposure to risks. and flora, and was recognized by The green belt also protects local UNESCO as an Advanced Outpost flora and wildlife species and helps of the Atlantic Forest Biosphere. improve the quality of the air in the environment. Safety and Communication with Communities Preparedness and Response to Local entities to the plants, offers a courses offered for the training With 68 hectares of area, the Braskem has communication Emergencies (APELL), implemented Toxicology and Medical Conduct of waterways professionals, for Braskem Environmental Station, channels open to all Communities in Brazil in the units located in course for health professionals, example, included 45 people from which surrounds the Triunfo where it operates. In some units, the states of Alagoas and Rio de simulation, and implements actions the local community, preparing Petrochemical Complex (Rio Grande in addition to the toll-free number Janeiro over twenty years ago. The against the Aedes aegypti mosquito. them for the labor market. do Sul), has been continuously (0800) and the Ombudsman’s project conducts and coordinates Braskem plays a leading role in monitoring the wildlife and flora office available on the Company’s emergency simulation and keeps the community, by engaging its In addition to practical actions carried out by the Zoobotânica website, the Community may the Community informed about the neighbors and providing essential that ease and prevent risks to the Foundation since 1989. Currently, dialogue with the Company risks and measures that control and insight into the potential impacts of health and safety of Communities, the space welcomes students through periodic meetings, factory minimize possible impacts arising the products it manufactures and environmental education activities for guided tours that promote visitation programs, training, and from industrial operations. The local ways to minimize them. are developed so that the environmental education through interface with the government - coordinators of the program also population understands the risks games and workshops in the middle initiatives usually promoted by the plan and execute training activities Maré Boa and impacts of the operation of of the native forest. In 2016, there Community Consultative Councils and guarantee the reliability of Maré Boa is a communication and the Private Use Terminal in the were over 2,800 visitors. (CCC’s) of each location. In the equipment and tools such as alarm social responsibility program that region. One of the actions carried ABC region, in São Paulo (Brazil), systems, substance detectors, and seeks to positively impact the out in July 2016 was sponsoring Another Braskem green belt is a the CCC returned in December respiratory protection equipment Communities within the area of the Civic-Social Action (ACISO) preservation area located in the 2016, with the COFIP ABC action. that is used by public agencies. influence of the Port of Aratu in carried out by the Brazilian Navy, district of Pontal da Barra, next Bahia (Brazil). The program includes which provided support services to Braskem’s Chlorine-Soda unit APELL In 2016, there were three groups actions toward strengthening to five thousand residents of these in Maceió (Alagoas). Created in One of the highlights of Braskem’s of the program Formando Laços and sustaining fishing activity communities, among them medical 1987, it is now a space for studies, relationship with its surrounding (Building Bonds). The initiative and generating jobs and income, care, issuing documents, and visits, and development of social community is the Community brings communities and local such as training courses. The dental procedures. 2016 | Braskem | Annual Report 70

Suppliers PERCENTAGE OF PURCHASES BY G4-12 Global Compact - Principle 10 SUPPLIERS BY COUNTRY G4-EC9 With over 8,000 Suppliers spread processes, cost analysis, quality In the period covered by this report, Braskem in Brazil reduced expenses on contracting foreign Suppliers, falling throughout its operations worldwide, assessment of products and from 36% in 2015 to 24% in 2016. In its first year of operation, Mexico allocated 16% of its spending budget Braskem seeks to closely monitor services, compliance with the to hiring foreign Suppliers. This percentage was maintained in the United States and grew in Germany from 4% the behavior of its partners, seeking Supplier Code of Conduct, legal (2015) to 6% (2016). attitudes in line with the Company’s regulations, and Health, Safety, and ethical, social, and safety principles. Environment (HSE) requirements. Therefore, only companies meeting PERCENTAGE OF PURCHASES BY SUPPLIERS BY COUNTRY tax and regulatory obligations, It is worth mentioning that with technical and administrative all Suppliers have access Suppliers 2015 2016 qualification, and a healthy to the Braskem Ethics Line economic situation, are considered Channel and are encouraged Domestic 64% 76% for hiring. to contribute information that Brazil helps to strengthen transparency Foreign 36% 24% Based on the magnitude of its and trust. All complaints are operations, Braskem has structured, investigated and have reparation Domestic 96% 94% decentralized Supplier management measures to ensure the correct Germany in areas responsible for purchasing outcome of any problems. Foreign 4% 6%

Domestic 99% 99% United States TO LEARN MORE ABOUT THE ETHICS Foreign 1% 1% LINE CHANNEL, VISIT Domestic - 84% braskem.com.br > Ethics Line Mexico Foreign - 16% The Code of Conduct for Suppliers is available for download at braskem.com.br > Suppliers 2016 | Braskem | Annual Report 71

MAIN SUPPLIERS REVISED CODE OF CONDUCT CATEGORIES FOR ETHANOL SUPPLIERS Fossil fuel raw materials: Braskem works with a team Following a process of continuous other codes, standards, and periodically analyzed to ensure strategic to maintaining dedicated to these partners improvement, in 2016 Braskem protocols applied to the ethanol that it keeps up with market Braskem’s operations, fossil fuel to ensure compliance with promoted a review of its Code industry. The work was carried developments, incorporating the raw materials are among the all processes and alignment of Conduct for Ethanol Suppliers, out by Proforest, an international lessons learned from audits and largest portion of the Company’s with the Company’s safety ensuring its alignment with the organization that works with the changes in legislation, treaties, expenses with Suppliers. Among standards. When signing a code applicable to all of Company’s management and sustainable and agreements related to the these products are naphtha, supply contract with Braskem, Suppliers, according to the aspects purchase of natural resources. sector. The new structure has an condensate, ethane, propane, all of these partners sign the monitored by the Company: area for mandatory requirements and HLR in Brazil, ethylene and Code of Conduct for Ethanol slash and burn, biodiversity, In addition, Braskem reinforced that must be followed by the propylene in the United States Suppliers, developed in 2010 best environmental practices, its relationship model and Suppliers and also a section about and Germany, and ethane in by Braskem with the support and human and labor rights. purchase procedures with continuous improvement that Mexico. To ensure cost control of Proforest. In 2016, this This revision also sought greater Suppliers. The Braskem will allow Braskem to influence and supply continuity, Braskem code went through a review synergy with the Company’s Responsible Management its Suppliers through an agreed has contracts with specific that reinforced the relationship Compliance Program and the Structure of Ethanol will be upon action plan. suppliers in all countries where model and the procedures its operations are located. regarding the purchase of Ethanol. In 2016, a total of Ethanol: Braskem’s product 99.1% of ethanol came from in the highest social and plants that signed the Code of Responsible Ethanol environmental risk category, Conduct for Ethanol Suppliers, Management Structure Braskem ethanol has a more rigorous a number above the established management process than goal of 90%. The remainder the other inputs used by the was purchased in commodities Company - and the same is exchanges in order to meet Code of Conduct for Responsible Ethanol Management true for its Suppliers. Thus, specific demands. Braskem Suppliers Structure Braskem

In 2016, a total of 99.1% of ethanol came Compliance Excellence from plants that signed the Code of Conduct for Ethanol Suppliers, a number above the established goal of 90%. Audit Program + Robust Management 2016 | Braskem | Relatório Anual 72

PROCUREMENT BRAZIL

In one more year of economic Health, Safety, and Environment challenges and high inflation (HSE) assessments, as well in the Brazilian market, as compliance with regulatory the Procurement area was and legal obligations. responsible for ensuring the Company’s competitiveness and In Brazil, the area is responsible the availability of essential goods for contracting Industrial and services for the business, Services (for operations by optimizing existing contracts maintenance), Corporate and searching for new partners. Services, purchase of inputs It is important to point out that and packaging required for Braskem Suppliers are selected production, and purchase of by the Procurement team in equipment and materials for conjunction with the user areas, maintenance and operation. and undergo quality analysis, In addition, it also manages with pre-established parameters Braskem’s indirect materials and in each situation, standardized inputs warehouses in Brazil.

G4-EC9 PERCENTAGE OF SUPPLIERS BY TYPE OF SERVICE SUPPLIERS SUPPLIER PERFORMANCE 2016 RADAR INDEX (IDF) A tool that was strengthened in The Supplier evaluation process also underwent minor 2016 was the Suppliers Radar, reformulations and, in 2016, the analyses began to be which identifies in advance carried out by the user areas and respective buyers. 37.19% 56.55% 7.26% companies with greater exposure This evaluation generates the Supplier Performance to labor and economic risks, Index (IDF) and is applied to all partners considered enabling the implementation of critical in Quality, QM (deviation history), Punctuality, Machinery, Technical and Other (inputs and a work plan to minimize possible HSE, Financial, and Compliance dimensions. Deviations equipment, supplementary packaging) and facilities services impacts on these aspects for identified through this study are handled by an action Braskem. plan involving the user, Supplier, and Procurement areas. 2016 | Braskem | Annual Report 73

SUSTAINABLE PROCUREMENT SUSTAINABLE PURCHASES

Based on a strategy connected to The first action of this strategy is the relevance to the business, Braskem’s Sustainability macro was mapping the Supplier chain, through internal and other objectives, the Procurement area in which the supply categories indicators drawn from the ISO works to make the purchasing were classified by a specific 9000, and the second aspect process increasingly more criticality matrix. This matrix evaluates the potential social sustainable and responsible. includes two aspects: The first and environmental impact.

Percentage of suppliers in the Procurement area Sustainability Matrix Classification identified in the categories (Base 2016) DEVELOPING SUPPLIERS WITH SEBRAE

Another action initiated and de Janeiro. Several companies Relevant 20.3% aligned to the Sustainable were invited and participated in Development planning of the a business diagnosis conducted area was the implementation of a by SEBRAE-RJ, and in structured Supplier development project in training according to the High 16.3% partnership with SEBRAE, in Rio opportunities mapped.

Low 54.4% CDP SUPPLY CHAIN Medium 9.0% In 2016, the area continued to support the CDP Supply Chain program, which requests that Relevance of the category for the business the for category the of Relevance business the for category the of Relevance Suppliers submit a report on their greenhouse gas emissions, associated risks and opportunities, Social and environmental impact Social and environmental impact of the category of the category and their strategy to ensure improvements in the management of the aspect. This year’s focus was to identify the most significant risks Throughout the year, the actions CEBDS (Brazilian Business Council support the Suppliers selection and opportunities reported in the CDP program originating from this mapping were for Sustainable Development). The process. In 2016, a pilot and the evaluation of possible action plans. planned. Among them is structuring questionnaires will be included project was carried out in one In addition, for Suppliers located in regions of self-assessment questionnaires in the new bidding processes to of the purchasing categories, potential water stress, the water management based on the Sustainable show the overall performance showing its effectiveness in the questionnaire was requested. Procurement Manual tool of in Sustainability aspects, and to evaluation process. 2016 | Braskem | Annual Report 74

LOGISTICS SAFETY PROCEDURES Braskem Logistics (Basic Team Members of the area In 2016, Braskem continued to providers to keep them up-to- is also part of the Company’s Petrochemicals and Polyolefins) work with their own evaluation reinforce Processes Safety in date on best practices in Health, strategy, which hires most works with Health, Safety, and methods, based on Braskem’s Logistics through a structured Safety, and Environment, and, of its non-hazardous road Environment (HSE) professionals performance analysis system program of risk studies from this, adopts assessment freight (resins) with electronic to ensure compliance with and Abiquim’s Safety, involving seven new products tools and safety controls. The trackers. For hazardous all social and environmental Health, Environment, and with operations classified as Company also conducts annual products (chlorine soda) and requirements critical to the Quality Assessment System average risk, based on the audits at the headquarters of petrochemicals, transportation Company’s operations. (SASSMAQ). volume transported and its the transportation companies, companies are required to degree of hazard. with evaluations and planning have 100% of the freight of corrective actions for tracked, freight must be For the logistics operations Supplier cases that resulted handled exclusively by the involved in these seven below the expected in the supplier’s own fleet, and must products, 144 routes, 17 Supplier Performance Index carry out the Priority Product transportation companies, six (IDF). To this end, tools such Logistics Risk Study (e.g. loading and unloading areas, as the Service Level Agreement Benzene and Pygas). Finally, the configurations of road (SLA) and the Accident/ for propylene, in addition to equipment, and ten ships were Incident Prevention (IP) Index tracking the entire freight, evaluated. Specific inspections are used. All this caution is telemetry is required on board based on international reverted in detailed monitoring the vehicles. standards were also carried of the events and indicators out at six maritime terminals of freight transportation: The Company also has a contracted by Braskem with Transport Accident Frequency contract with Suatrans, the purpose of identifying risks Rate (by number of trips and the leader in chemical and and defining preventive control per kilometer driven) and environmental emergency barriers. Accident Severity Rate. road response in Brazil, and conducts audits at the service Braskem also holds periodic Maintaining partnerships with bases and simulations on the meetings with its service Brazil’s leading risk managers main transportation routes. 2016 | Braskem | Annual Report 75

EMISSION CONTROL ROAD SAFETY PROGRAMS On another front, Braskem to identify opportunities In addition to initiating AND PARTNERSHIPS Logistics adopts different to reduce emissions. emissions monitoring, the area The areas responsible for managing Braskem’s logistics actions focused on has sought creative ways to activities are in line with programs relevant to promoting sustainability. In this regard, As a result, also in 2016, reduce this indicator, such as road safety, among which the following stand out: the Polyolefins Logistics Braskem’s Polyolefins Logistics the use of closed circuits to participated in events in four began measuring its emissions transport resins, sharing of • Program Olho Vivo na Estrada: established Brazilian states (São Paulo, from all modes for sales to dedicated vehicles with other by Abiquim in partnership with Abiclor, aims Rio de Janeiro, Bahia, and Clients in Brazil, reaching a transportation companies, and

to prevent unsafe behavior when transporting Rio Grande do Sul) and in result of 0.027 kgCO2e/t.km, fostering more sustainable hazardous products through driver awareness. Mexico, to foster partner with emissions of 67.9 million modes of transport.

The “Olho Vivo na Estrada” is part of a risk engagement in voluntary kgCO2e (3.2 million tons of management system, and its goal is to reduce the monitoring of greenhouse resins and 108.8 million km number of road accidents with chemicals to zero. gas emissions (GHG), seeking traveled).

• Program Transportadora da Vida: a program of the Trade Union of Freight and Logistics Transport Companies (SETCERGS), which certifies cargo transport companies that carry out actions with a greater emphasis on safety.

• Program Na mão certa: developed by the NGO Childhood, is dedicated to eliminating the sexual exploitation of children and adolescents on Brazilian highways. In 2016, Braskem was recognized by the NGO for having trained multipliers and conducted sensitivity training with over 300 truck drivers, in addition to the partnership with the risk manager for support and communication of the cause to the majority of truck drivers who ship Braskem products. 2016 | Braskem | Annual Report 76

Clients G4-8

With Clients in diverse segments of throughout the year, such as production of fan blades and This initiative reinforces and business events such as the industry, Braskem is constantly new formulations of grades and body. The input provided reduced Braskem’s commitment to the Agrishow 2016, one of the largest seeking to maintain and expand products, technical follow-ups, emission of carbon dioxide by 4.2 plastic chain in Brazil, innovation, agricultural technology fairs in a collaborative relationship with audits, and training. The tool used tons per million pieces produced, and sustainability, providing an the world, held in Ribeirão Preto, its partners. To this end, the by Braskem as the basis for project as well as a 30% reduction in increasingly better life for people. in the state São Paulo. Company integrates investments management is CRM (Customer the annual energy consumption Read more about the initiative. in innovation for developing Relationship Management). required to produce fans, an During the year there was also solutions in partnerships with 8% drop in production time of PICPlast an advance in the agenda to train Clients, creating new solutions Maxio® Seal the part, and a 9% increase in The Plastic Chain Incentive businesses and businessmen that can contribute to improving Created to recommend the eco- industrial productivity. Program (PICPlast) is a Braskem with the launch of a Production the life of society and ensuring the efficient resins of the Company’s initiative in partnership with Chain Program for eight Brazilian preservation of the environment. portfolio, the Maxio® Seal serves Wecycle the Brazilian Association of the states, with a total of 71 one of Braskem’s main growth The Wecycle platform was created Plastic Industry (ABIPLAST). companies. Held in partnership Visio Program pillars: Innovation. Through it, with the objective of developing The objective is to encourage with SEBRAE, the project is part Visio is a platform that integrates resins are identified that bring business and initiatives for the development of the plastic of an agenda to expand the sharing knowledge and environmental gains, since they appreciation of plastic waste production chain through three capacity of plastic processing experiences between Braskem and provide to Clients less energy through partnerships, bringing areas: promoting the export of companies. Clients. The goal is to strengthen consumption, greater productivity reliability and quality to developing processed polyethylene (PE) and relationships to create common in the production process, and a products, solutions, and processes polypropylene (PP), encouraging In promoting the advantages of values capable of increasing lighter end product. that involve all links on the plastic competitiveness and innovation plastic, the sector fund set up for competitiveness and business recycling chain. in the sector, and promoting the financing the program received productivity. In this way, the eco-efficiency of advantages of plastic. 31 new participants in 2016, the Maxio® line allows progressive In this way, Wecycle can offer which totaled 486 companies In 2016, a total of 909 Clients were reduction of production costs companies committed to In 2016, the amount invested in registered since December served by Braskem’s Polyolefins and environmental impacts, sustainable development a recycled sales fostered for exports totaled 2014. The total volume of funds unit in Brazil (Polyethylene, contributing to improving plastic raw material with quality, BRL 139 million, which was 3% collected a total of BRL 6.9 Polypropylene, and Renewable people’s lives and preserving the traceability, process regularity, higher than the previous year. million from December 2014 Chemicals). According to Visio environment. Among the highlights and socially and environmentally Throughout the year, PICPlast to January 2017, of which over records, 89 Clients were involved of 2016 is the experiment applying responsible actions throughout the promoted the participation of BRL 3 million were invested in 126 initiatives implemented Maxio® H 202HC resin to the recycling cycle. sectorial companies in fairs over the period. 2016 | Braskem | Annual Report 77

Government Thousand BRL 2014 2015 2016 1 G4-EC423 Total tax incentives /credit 125.7 173.9 87.5 - PRODESIN - ICMS 60.0 71.6 78.8 Open and transparent dialogue competitiveness through PIS- - REINTEGRA 65.7 102.3 8.7 with all stakeholders and Cofins exemption for the purchase proposing solutions that develop of raw material for first and second Grants for investments, research and development, 2 1.6 - 1.6 not only the Company, but also generation petrochemicals. and other relevant types of concessions other sectors of industry and the FINEP 1.6 - 1.6 country’s economy, is something Reintegra, a government program FINEP Award - - - that is a part of Braskem. that aims to return a percentage of ECAs (financial aid from export credit agencies)3 - - - the taxes on the production chain 1. Tax incentives/credits: Restitution of federal taxes by the Reintegra program and tax incentives of ICMS, granted by the Government of Always motivated to offer solutions to certain segments of exporters, Alagoas, through the Integrated Development Program of the State of Alagoas - Prodesin. to the sector’s challenges, in is still working at a lower rate than 2. Grants for investments, research, and development: FINEP awards and financing for innovation projects. 3. Financial assistance from ECAs (credit and exporting agencies): Risk insurance operation with NipponExport and Investment Insurance 2016, the Company continued expected by the sector since it (NEXI – Japanese agency) for investment in maintenance and in the butadiene project. several actions to defend the underwent a revaluation in 2015. competitiveness of its production chain, as well as the search for Created in 2011 as a temporary solutions to challenges in the mechanism and established as OPEN DIALOGUE

areas of logistics, infrastructure, permanent in 2014, Reintegra Among several other associations that discuss new paths • Brazilian Business Council for Sustainable Devel- energy, and topics related to provides mobile rates that may for the Brazil’s macroeconomic policies, Braskem actively opment (CEBDS) industrial policy still affecting vary between 0.1% and 5% participates in discussions forums in petrochemical entities, Brazil’s growth. on the income of companies industry representatives, and other sectors of the economy: • Federation of Industries of São Paulo (FIESP): pri- One of the topics that remained from exports. In 2015, the vate law entity focused on guaranteeing Brazilian compet- on the discussion agenda was 1% rate was set to 0.1%, a • Brazilian Chemical Industry Association itiveness, with demands for lower production costs and preserving the Special Regime percentage that is valid until (ABIQUIM): a private law entity structured to carry out the containing deindustrialization, guaranteeing the country’s of the Chemical Industry 2016. Reintegra is expected to statistical monitoring of the sector, promotes specific stud- economic and social development. ies on the activities and products of the chemical industry, (Reiq). Approved by the Federal reach 2% in 2017, returning follows changes in legislation and advises associated com- • Federation of Industries of the State of Bahia Government of Brazil in 2013, this to 3% in 2018, according to panies on economic, technical and foreign trade issues. (FIEB): private law entity focused on the growth, mod- demand remains one of the pillars the decree established by the ernization, and improvement of the competitiveness of for the recovery of the sector’s Federal government. • Brazilian Association of the Plastic Industry (Abi- the industry in the State of Bahia, and sustainable devel- plast): focuses on the processing industry. opment of the State

• National Industry Confederation (CNI): the highest • Applied Tax Studies Group (GETAP): a nonprofit enti- body of the industrial trade union system, focused on de- ty dedicated to assisting the improvement of Brazilian tax fending and representing the industry by promoting an legislation, through suggestions regarding its simplifica-

23 Indicator not audited due to non-completion of audit of the financial statements. As environment conducive to business, competitiveness, and tion and rationalization. informed, no material changes are expected in relation to the unaudited results that sustainable development in Brazil. comprise this indicator. 2016 | Braskem | Annual Report 78

07. Health, Safety, and the Environment

Global Compact - Principles 1, 2, 6, 7, 8 and 9

Braskem is the SEMPRE first Brazilian THREE FACILITIES industry to be RECORD OF ONE REACH THE MAXIMUM ACCIDENT WITH IMPLEMENTATION part of CDP’s DEATH. STAGE. “A List” - global ranking for strategies Environment and results BEST HISTORICAL associated RESULTS IN THE with climate BRL 103.9 million RATES OF EFFLUENT INVESTMENTS OF BRL 103.9 MILLION GENERATION change. IN HEALTH, SAFETY, AND ENVIRONMENT AND ENERGY PROJECTS. CONSUMPTION.

FOR THE 6º 15 plants CONSECUTIVE YEAR FIRST INVENTORY PROCESS SAFETY (RISK RATING, AS OF GHG EMISSIONS BRASKEM HAS QUALIFIED IN THE GOLD PER INSURER): 15 PLANTS WITH THE FROM OPERATIONS CATEGORY IN THE BRAZILIAN GHG PROTOCOL INTERNATIONAL STANDARD ABOVE STANDARD. IN MEXICO. PROGRAM. 2016 | Braskem | Annual Report 79

For Braskem, maintaining health dedicated to the rigor of a set of Health, Safety, and Environment and safety, and preserving the internal controls (extended along System), which takes into environment are key elements its production chain) to ensure account the unit’s profile, as for the growth of the business water and energy efficiency, well as its respective risks, and the search for innovative constant reduction of generated when setting annual progression opportunities in the market. waste, control and mitigation of goals. To ensure that all plants Always thinking about the future its carbon emissions, and safety are standardized, annual audits - not only of the Company, but of assurance in all its units. work with the following points: all its stakeholders - the Company Strategic Elements, SEMPRE works on its sustainability In 2016, the Company continued Guidelines and Procedures in strategy objectively, focusing on its path of evolution in alignment with Quality and on developing increasingly Health, Safety, and Environment Productivity, and Verification of
   sustainable processes. In this (HSE) management, aligned the Barriers for process safety way, the Company is constantly with SEMPRE (Integrated risk scenarios.

SEMPRE PATH OF EVOLUTION

100% Diagnosis

Stage 1 - Construction of HSE bases 90% In 2016, 100% of SEMPRE audits were carried out, Stage 2 - Prevention of personal losses certifying 90% of the units. In addition, 50% showed 80% Stage 3 - Prevention of big losses an improvement over 2015: today 6.7% of units are Stage 4 - Performance assured in HSE 70% in stage 5, while 4% are in stage 4, and 46.7% are in Stage 5 - High performance in HSE stage 3, and 6.7% are in stages 1 and 2. It should be 60% noted that the audits for Braskem’s terminals in Brazil were carried out separately from the industrial units 50% and focused on logistics operations.

40% Technology labs are included in the scope, and the 30% Pittsburgh Innovation and Technology Center, in the United States, is certified in stage 5, and the Campinas 20% Center for Research in Renewable Chemicals, in Brazil, is certified in Stage 1 of SEMPRE. 10%

Percentage of plants due to their stage of evolution of stage their to due plants of Percentage 0% 2013 2014 2015 2016 2017 2018 2019 2016 | Braskem | Annual Report 80

Investments and Gains in Environmental Protection G4-EN31

Braskem applies resources to increasing the levels of environmental protection related to risks of process or product accidents. In 2016, the Company improved significantly in provisions for environmental damages (Environmental Liabilities), which increased from BRL 65.8 million in 2015 to BRL 182.6 million. This increase is not associated with a greater number of environmental liabilities, and is a result of improved man- agement that allowed the Company to expand the forecast of expenditures from two to five years. Other expenses were divided as follows24:

INVESTMENTS AND GAINS IN ENVIRONMENTAL PROTECTION

Type of spending (BRL million) 2014 2015 2016

Work safety 117.9 65.6 51.4 Process safety 4.9 13.0 25.9 Investments in HSE Health 15.1 4.7 2.8 Environment 27.0 31.1 23.8 Total 164.9 114.4 103.9 Liquid effluents treatment 50.5 51.1 Spending on treating Waste management 105,1* 42.7 55.3 effluents and waste Total 93.2 106.3 Emissions management 59.1 8.1 7.9 Environmental licenses 0.5 1.1 1.0 Depreciation 46.0 46.0 46.0 Provision for environmental damages recovery 50.4 65.8 182.6 (environmental liabilities) Other environmental management costs 48.8 66.6 59.7

*In 2014, spending on effluents and waste treatment were not evaluated separately

24 The depreciation amount is an estimate based on previous years. The amount reported in provision for environmental damage recovery refers to what has been planned for use over the forecast of needs for the coming years. Other environmental management costs include groundwater management, environmental noise monitoring programs, quality of surface water resources (lakes, rivers, sea) and pipelines, environmental risk management, and energy and water management. 2016 | Braskem | Annual Report 81

Occupational Health, Safety, and Environment management also include monitoring Health and Safety savings and avoided costs through improvement projects developed by the area. In 2016, this work resulted in gains of approximately BRL In March 2016, Braskem frequency rate of accidents 252.4 million in operations in Brazil, the United States, Germany, and reported the death of a Team with and without lost time now Mexico. Member at the PE 8 plant in (CAF + SAF), considering Team Cubatão, Brazil. The accident Members and Third Parties occurred while finishing per million hours worked, has COSTS AVOIDED - HEALTH, SAFETY unloading propylene when shown a downward trend in AND ENVIRONMENTAL MANAGEMENT the operator performing the the last four years, with its maneuver was hit by the lowest value in 2015. In 2016, sudden movement of the hose this rate increased by 17.6% DIMENSION (IN BRL MILLIONS) 2014 2015 2016 (hook) caused by remaining compared to 2015 but is still pressure in the equipment. below the historical rate. Work safety 0.6 0.6 -3.4 Despite all medical efforts, the Safety Team Member died days later The Lost Time Injury Frequency Process safety 7.9 -27.0 17.1 due to the aggravation of his Rate, considering Team state of health. Members and Partners per Health Occupational health 37.1 19.0 23.3 million hours worked, was 0.24. For over five years, Braskem The variation of the Severity Waste generation 53.7 13.5 6.7 had not recorded any accidents Rate of Accidents with Lost of this nature in its operations, Time went from 43.32 in 2015 Water consumption 7.2 4.6 and will now further reinforce to 164.17 in 2016, due to the 1.9 its focus on discipline in its fatality that occurred at the PE8 Environment Effluents generation 6.2 2.1 operational activities. The described above.

Energy consumption 307.6 116.8 134.9 G4-LA6 GHG emissions 4.5 0.0 67.0

Common impact 14.0 0.0 0.0 In 2016, the frequency rate of accidents with and HSE Management 4.1 0.5 0.1 without lost time increased by 17.6% compared to 2015, but is still below the historical rate. TOTAL - 431.4 136.8 252.4 2016 | Braskem | Annual Report 82

INJURY FREQUENCY 2012 2013 2014 2015 2016 Process Safety RATE X 1MM/HHT Accident Frequency To reinforce everyone’s strengthened by the leaders, well as audits of barries and 1,04 1,04 0,97 0,68 0,80 Rate (SAF+CAF) awareness of the importance of who work rigorously on risk technical actions to reduce Accident Frequency Rate safety procedures, and ensure management in processes, risk in scenarios of greater 0,35 0,39 0,14 0,26 0,24 (CAF) that processes are effective, operations, and logistics. To significance. The Process Braskem conducts preliminary this end, several management Safety pyramid is used to SEVERITY RATE 30,79 64,70 12,53 43,32 164,17 assessments in order to manage methods are used, such as classify unwanted events NUMBER OF and mitigate potential risks. change management, accident according to their magnitude ACCIDENTS WITH 0 0 0 0 1 The process is continuously and incident investigations, as of damage. FATALITIES

Incident with loss of containment G4-LA6 and release of product above cut- 1 off point. NEW CASES OR AGGRAVATED Incident with loss of containment OCCUPATIONAL DISEASE TIER 2 and release of product below cut- off point. In 2016, after three years without any cases, Braskem identified a case of work-related disease (depression) in the São Paulo (Brazil) Incident with small loss of office. The investigation was completed in July and included the containment or system failure that 3 could potentially lead to a process opinion of external and independent specialists on the case and accident. its history. During the evolution of the analysis, the Team Member

received medical assistance, including follow-up with external G4-SO2 psychologists and psychiatrists.

One of the highlights of the year process safety. It is also In 2016, Braskem recorded 2012 2013 2014 2015 2016 was intensifying the analysis worth highlighting the focus nine Tier 1 events, down from of the smaller process safety on strengthening human 11 events in the previous year. 5 0 0 0 1 occurrences, usually considered trustworthiness at Braskem, The accident rate was 0.22, “near-misses,” allowing for the continuity of the barriers consistent with the best process increased preventive learning audits, and the implementation safety benchmarks of companies in the units, as well as further of technical risk mitigation in the US chemical industry (0.41 revision of the corporate actions for the most significant was the average benchmark for standards associated with scenarios. US companies in 2015). 2016 | Braskem | Annual Report 83

TIER 1 TIER 2 TIER 3

For Tier 225 events, the reduction trend of Regarding the smaller cases, 3,133 Tier 3 events, at the base of the pyramid, NUMBER OF ACCIDENTS (TIER 1) previous years was confirmed. In 2016, were recorded. This result ensures a preventive focus on the smaller events 29 Braskem recorded 37 events, three fewer and a stronger process safety culture, and demonstrates the commitment of 22 than the previous year. The accident rate the Team Members to reducing the number of small events to minimize the was 0.90. occurrence of more severe events. 11 9 4 NUMBER OF ACCIDENTS (TIER 2) 91 2012 2013 2014 2015 2016 RISK RATING 49 40 37 Braskem has been continuously advancing in efforts to improve the ACCIDENTS RATE (TIER 1) Risk Rating of its plants by implementing several improvements in its nº of accidents x MM/HHT facilities and searching for increasingly safe production processes. In 2016, the Company advanced in having almost all units audited by 0.70 0.51 2013 2014 2015 2016 insurers and reinsurers, and now owns 13 plants with the international 0.32 standard “Standard” and 15 plants “Above Standard.” It should be 0.22 noted that Braskem does not have a target for this indicator. 0.09

2012 2013 2014 2015 2016 ACCIDENTS RATE (TIER 2) nº of accidents X 1MM/HHT 2.20 18 16 12 13 15 SEVERITY RATE (TIER 1) 10 1.13 1.17 0.90 3.41 3.24 2.62 2013 2014 2015 2016 2014 2015 2016 0.68 0.25

TOTAL NUMBER OF PLANTS TOTAL NUMBER Standard Above Standard

2012 2013 2014 2015 2016 25 In 2012, Braskem did not evaluate the Tier2 indicator. This indicator only came to be measured in 2013, so it does not yet have a five year history. 2016 | Braskem | Annual Report 84

Product Safety

G4-PR1, G4-PR3

In 2016, Braskem updated characteristics of its products, and made available all of Braskem constantly carries its Emergency Sheets26 in out internal audits to ensure accordance with the new the safety and reliability of Brazilian legislation, improving its processes. In 2016, audits them with the Chemical involved units producing Substances Information (FISPQ) hazardous and non-hazardous of the products produced and products. marketed by the Company. In addition, in partnership About Process Security with ABIQUIM (Brazilian (SEPRO), in 2016 this aspect Chemical Industry Association), continued to be strengthened the Company acts with the in all of the Company’s International Council of Chemical leadership committees. In Associations (ICCA) to promote addition to rigorous analysis the recognition and disclosure and management of process of the risks and benefits, to risks for industrial and people and the environment, of logistics operations, there the use of chemicals. All FISPQs was a focus on recording of the products manufactured and analyzing near-misses, and marketed may be found on seeking preventive learning, Braskem’s website. continuous improvement of management of barriers, and Aware of the degree of hazard, the implementation of technical toxicity, corrosivity, flammability, actions to mitigate risks for the and environmental impact most significant scenarios.

26 In the United States, the Company uses the Material Safety Data Sheet (MSDS) and in Europe, the Safety Data Sheet (SDS), required by the Occupational Safety and Health Administration (OSHA) and the EU relevant directive (REACH). 2016 | Braskem | Annual Report 85

Water Efficiency G4-EN8, G4-EN10, G4-EN22

The drought and reduced From 2002 to 2016, Braskem treated domestic sewage) volume in the reservoirs invested approximately BRL improved by 27%, and - in responsible for water supply 280 million in projects toward 2016 alone - 15.4 million continue to show warning improving water efficiency m³ were reused. signs in Brazil. Considering at its plants in Brazil, with • From 2014 to 2016, the this scenario, and all those accumulated savings of reuse of 25 million m3 with a potential impact on the over BRL 175 million in cost of water was calculated Company’s global operations, reduction with the treatment of through the Aquapolo, Braskem has been investing liquid effluents and operating the largest project for the heavily in the assessment and costs with water consumption. production of industrial management risk of water The following results stand out: reclaimed water in Latin scarcity in its production units • The total volume of water America, releasing a throughout the country. consumed was 72.4 million volume equivalent to m3/year. The consumption 10,000 Olympic swimming As a result of this initiative, in index reached 3.93m3/t, pools for drinking water 2016 the Company completed totaling an accumulated consumption in the ABC the assessment of the regions improvement of about 5% region, in São Paulo, Brazil. where it operates crackers to since 2002. help guide investments where • The liquid effluent Braskem also uses specific there is a need to reduce water generation index reached indicators to measure its consumption or abstraction. 1.11m3/t, the best water efficiency, such as water For 2017, action plans will historical result since consumption (m3/t of product)27 WATER CONSUMPTION – m3/t be developed focusing on 2002, representing an and generation of effluents 3 (m /t -5% reducing water risk, in addition accumulated improvement of product). The 2016 result to extending the study of water of about 41%, and savings was 6.0% better than the agreed 4.23 4.30 25 scarcity risk for the other of BRL 115 million with upon target for the year (4.18 3 MILLION m regions in Brazil and abroad effluent treatment. m3/t), and 3.0% better than the 4.14 4.16 4.05 for the water stress scenario • From 2011 to 2016, the 2015 performance (4.05 m3/t). 3.93 according to the climate risk water reuse percentage The achievement of the target Volume of ... water reused study already carried out by (rainwater, treated represented a savings for the 27 through the the Company. industrial effluents, and Company of nearly BRL 12 million. 2002 2012 2013 2014 2015 2016 Aquapolo Note: Braskem Idesa’s consumption in Mexico was not recorded in 2016, since Project. the Complex was at the beginning of its operation and in the stabilization phase. Beginning 2017, the unit’s consumption will be part of this indicator. 27 Cubic meters per ton of product. 2016 | Braskem | Annual Report 86

The good performance regarding in these industrial units, thus The industrial units located the year’s water efficiency is improving the rates for specific in ABC in São Paulo (Brazil), mainly due to internal initiatives consumption and loss reduction. which used 7,957,425 m3, and by the industrial teams toward where almost all of the water improving the cycle of the cooling In 2016, Braskem utilized consumed is reclaimed water towers, which represent important an absolute total volume of (Aquapolo), are noteworthy. figures in water consumption 15,395,138 m3 of reclaimed water.

G4-EN10 RECLAIMED WATER

23.8% 29.5% 28.1% 18.5% 25.1% 23.4% 6.4% 18.5% 17.2% 6.4% 15.6% 15.1% 17.4% 12.1% 11.0% 11.0% 9.5% 8.3%

2011 2012 2013 2014 2015 2016

Process Improvement Inherent Reuse

(1) Reuse in Process Improvements is any reuse that comes from modifications in the current units, including or improving processes. (2) Inherent reuse is that which was always part of the industrial unit as part of the plant’s original process.

The effluent generation to the previous year’s result for the indicator, and indicator in 2016 presented a performance. Despite having the achievement of the target 4.3% lower result compared to suffered negative impacts due represented a savings for the the annual target (1.16 m3/t), to operational problems, it Company of BRL 1.7 million. and 3.5% lower compared was Braskem’s best historical GENERATION OF LIQUID EFFLUENTS – m3/t 1.94 -43% 1.28 1.17 1.22 1.15 1.11 ...

2002 2012 2013 2014 2015 2016

Note: Braskem Idesa’s generation in Mexico was not recorded in 2016, since the Complex was at the beginning of its operation and in the stabilization phase. Beginning 2017, the unit’s generations will be part of this indicator. 2016 | Braskem | Annual Report 87

DISTRIBUTION OF EFFLUENT DISPOSAL BY LOCATION

G4-EN22

Volume of effluents Countries Location Effluent Destination Treatment method COD (kg/year) discharged (m3/year) Rio de Janeiro Canal de Coelho 587,244 Biological 69,939

Odebrecht Ambiental Pre-treatment with water-oil separator and biological Bahia 6,157,184 3,492,411 Treatment Station treatment at Odebrecht Ambiental

Alagoas Ocean disposal 3,375,706 Neutralization/Aerobic process (activated sludge) 320

External Effluent Treatment Pre-treatment with water-oil separator and primary, Brazil Rio Grande do Sul 4,155,331 1,261,223 Station (ETE) secondary (biological) and tertiary treatments

Ponte Funda Stream 85,153 Sent for external treatment 290,466

Water-oil separator and primary treatment through Perequê River 271,386 NA São Paulo decantation and filtration

Conventional primary and physical, Tamanduateí River 1,949,353 333,868 physicochemical, and biological La Porte Houston navigation channel 443,044 Primary treatment and chlorination 2,658

Marcus Hook Delaware River via POTW 695,995 Primary, biological, and chlorination treatment 6,960 United States Neal Big Sandy River 241,157 Primary treatment and chlorination 1,471 Seadrift Victoria Barge Canal 303,324 External treatment NA Oyster Creek Oyster Creek 86,417 External treatment NA Schkopau Saale River 83,382 External treatment NA Germany Wesseling Rio Rhine 149,904 Primary and biological treatment 1,799 Internal treatment with partial reuse and sending Mexico Mexico Huazuntlán River 1,271,951 - to the Huazuntlán River

Among the main impacts on effluent generation in 2016 are the quality of the abstracted water, the influence of the summer temperature in some regions, operational problems, and shutdowns for maintenance. On the other hand, positive actions were implemented, such as increasing the concentration cycle in cooling towers, optimizing operating procedures with consequent reuse of water currents and reduced losses. 2016 | Braskem | Annual Report 88

PERCENTAGE OF CONSUMPTION PER TYPE OF ENERGY Energy IN RELATION TO TOTAL CONSUMPTION Efficiency 2012 2013 2014 2015 2016 Electricity 10.3% 9.9% 10.2% 9.0% 9.0% G4-EN3, G4-EN5, G4-EN6

Braskem units always seek to was Braskem’s best historical Natural gas 12.0% 8.9% 13.0% 16.0% 20.0% minimize their environmental result for the indicator and a External fuels (mainly oil and coal) 4.8% 4.8% 5.2% 5.5% 6.0% impact. To this end, they work to total reduction of 14% since the find alternatives that help reduce beginning of measurement in Residual internal fuels from the petrochemical process 72.9% 76.3% 71.6% 68.8% 65.0% energy consumption, improving 2002. Among the actions that efficiency, and searching for the contributed to this result are the best available energy matrix. energy optimization initiatives PERCENTAGE OF RENEWABLE ENERGY CONSUMPTION for furnaces, boilers, turbines, COMPARED TO TOTAL ENERGY CONSUMPTION The result for the year was pumps, and compressors, better in line with the agreed upon energy utilization in the plants, 2012 2013 2014 2015 2016* target for 2016 (10.25 GJ/t), greater efficiency in steam and 2.3% below the 2015 generation, and the development performance (10.49 GJ/t). It of control systems. 8.95% 9.39% 7.17% 8.26% 7.44% ENERGY CONSUMPTION - GJ/t 11.90 -14% * The 2016 data does not include Braskem Idesa unit in Mexico

10.67 10.74 Among the main initiatives in emissions of 3.4 kg/t MVC/day. drop in natural gas consumption 10.55 10.49 Brazil toward reducing energy In addition, the plant managed (savings of BRL 1.2 million per consumption in the units, the to reduce consumption by 1.2 year). 10.25 following stand out: t/h of steam in the P3201A/B and P3206 heat exchangers, SÃO PAULO - PP3 ABC

ALAGOAS - PVC2 AL reducing CO2 emissions (savings Savings of BRL 900,000 avoiding ... Savings of BRL 1.7 million per of BRL 657,000 per year) and the burning of 320,000 kg of 2002 2012 2013 2014 2015 2016 year through reduced vapor steam consumption through hydrocarbons by the Flare. consumption in the MVC T energy optimization, with a The result was a reduction in Note: Braskem Idesa’s consumption in Mexico was not recorded in 2016, since the Complex was at the beginning of its operation and in the stabilization phase. 1302 and T1502 purification 1.13 million m³ drop in water greenhouse gases emissions Beginning in 2017, the unit’s consumption will be part of the indicator. column, with a reduction in CO2 consumption and 1.11 million m³ equivalent to 1,100 t of CO2. 2016 | Braskem | Annual Report 89

In 2016, Braskem’s production that presented the most gains units recorded a gain of BRL 134.9 was the one implemented at UNIB million through initiatives toward 2 RS (Rio Grande do Sul), which, improvements in processes, by optimizing the furnaces, had energy sales, furnace optimization, a gain of BRL 38.4 million. By reduced steam consumption, and reducing the technical coefficient Improvements in energy efficiency improved boilers and turbines. of steam from evaporation to These initiatives reduced energy 2.55, the CS 1 AL (Alagoas) unit in Triunfo: the use of coal with consumption by 5,471,141 GJ in reduced its energy consumption the year. In Brazil, the initiative by 1,261,711 GJ. environmental control guarantee

G4-EN6 In recent years, the Brazilian to increase the capacity and system, called Miecon, began electricity sector has been quality of coal, optimize operations in August 2016 and experiencing periods of the use of natural gas, and made it possible to increase INITIATIVES TOWARDS ECONOMIC GAIN instability. Based on a increase the efficiency of and optimize the use of coal, IMPROVEMENTS IN PROCESSES (BRL MILLION) predominantly hydroelectric cogeneration. and increase the retention of Improvements in production processes 56.9 matrix, droughts that affected ash generated by burning - (except furnaces) and sale of electricity a large part of the country As part of these strategic without additional costs. In Furnace optimization 60.5 influenced tariffs, and even initiatives, Braskem in this process to improve energy with recovered reservoir Triunfo, Rio Grande do Sul efficiency, the Company sought Reduced steam consumption 6.3 levels, the scenario is still (Brazil) took advantage of the coal with higher energy value challenging. shutdown cycle (from June and lower emission rates, Boiler and turbine improvements 11.1 to September) of the two while complying with the most In the search for alternatives coal-fired boilers in order to stringent emission control TOTAL 134.8 that guarantee a supply of promote improvements in the standards of particulate clean energy with prices efficiency of the electrostatic matter. compatible with the needs precipitator system, of the business, Braskem responsible for retaining ash The changes integrate the has been working hard to from combustion gases. strategic plan to obtain analyze trends and, through increased energy efficiency internal efforts, to implement The Company invested BRL while guaranteeing innovative strategies for 2.7 million in a new control environmental control, one of energy generation in its system that will generate the Company’s main focuses production units. These daily savings of approximately of attention. initiatives include projects 10 MW of energy. The 2016 | Braskem | Annual Report 90

Waste Management G4-EN23

For Braskem, the correct During the year, 37,334,108 When evaluated according to Regarding waste disposal, the values have remained at the same level over management of all generated kg of waste considered Braskem’s specific eco-efficiency the years, with some changes related to the storage of this waste for later waste in its production process hazardous and 18,057,602 indicators, which considers the disposal, as well as seasonal generation associated with expected events is essential, and such action is kg of non-hazardous waste generation of waste per ton and not specifically related to production. part of the Safety macro objective were generated, both with an produced, this value has been of the Company’s Sustainable increase compared to 2015, steadily declining over the last 15 Destination Development Strategy. With this mainly due to the specific years, reaching a total reduction of generated 2012 2013 2014 2015 2016 waste (%) focus in mind, among the actions characteristics of the production of 63% since 2002. Potential for carried out by the Company in process and the impacts of 55.3% 57.1% 60.6% 61.8% 56,2% reuse 2016, the following stand out: seasonal and non-seasonal Thus, based on this data, in 2016 Reuse 29.6% 21.7% 26.8% 29.7% 27,3% initiatives toward reductions at events, such as unscheduled the index was in line with the the source and optimizing internal shutdowns (which may occur established target (2.16 kg/t), but Discarded 15.1% 21.1% 12.6% 8.5% 16,5% procedures, creating economic due to a power outage, for 7.5% higher than the previous value by transforming waste into example), and scheduled year’s performance (2.01 kg/t). Allocated by-products, reverse logistics, shutdowns for maintenance Reaching the target represented waste 2012 2013 2014 2015 2016 (thousand kg) and actions toward reuse and and improvements in plant savings for the Company of composting, among others. efficiency. nearly BRL 600,000. Recycling 7,737 19,858 7,930 4,628 7,371 Recovery 28 These results do not include the Braskem Idesa unit in Mexico, since the Complex was still starting operations and in the stabilization (including 4,165 3,169 5,424 3,975 7,247 phase. Beginning in 2017, the unit’s generations will be part of the indicator. energy) Landfill/ Industrial 14,112 11,152 21,493 2,804 9,146 WASTE GENERATION - kg/t landfill 5.78 -63% On-site storage 474 187 748 1,859 1,303 Incineration 11,552 17,263 20,408 1,713 8,423 Reuse 245 290 238 739 482 2.28 2.30 2.20 Composting 534 306 662 274 475 Underground 1,933 8,568 7,960 0 1,931 2.01 2.16 waste injection ... Other* 4,040 9,650 5,000 3,700 17,022 2002 2012 2013 2014 2015 2016 TOTAL 53,936 70,443 64,868 19,692 53,400

Note: In 2016 Braskem Idesa’s (Mexico) generations were not recorded, since the Complex was still starting operations and in the stabilization phase. Beginning in 2017, the unit’s generations will be part * Other: autoclave; thermal vacuum treatment to remove mercury, co-processing of waste in rotary of the indicator. clinker kilns for the production of cement, soil decontamination through thermal desorption. 2016 | Braskem | Annual Report 91

Climate Change G4-2, G4-EC2, G4-EN15, G4-EN16, G4-EN17, G4-EN18, G4-EN19 Important In 2016, Braskem took forums, as well as government global initiatives regarding important steps in the process initiatives, seeking to support climate change, including Steps of evolving the climate change discussions on options that the International Council strategy, with emphasis on align the competitiveness of of Chemical Associations strengthening adaptation the Brazilian industry with a (ICCA) and the Carbon Pricing • In 2016, Braskem’s latest GHG emissions inventory was and effective actions toward low carbon scenario. Leadership Coalition (World awarded, for the 6th consecutive year, the Gold category reducing its greenhouse gas Bank), Braskem has been classification in the Brazilian GHG Protocol Program. (GHG) emissions. Today, the Braskem’s participation in acting as one of the leaders in Company plays an important national and international developing plans and initiatives • For the fifth consecutive time, Braskem has role in international debates forums has been increasingly toward carbon pricing and been selected to be part of the Carbon Efficient that define policies aligned with strategic, shedding light on the creating the proper tools to Index (ICO2) portfolio of BM&FBOVESPA (Brazil). the industry’s commitments Company’s constant efforts to encourage companies and to reducing GHG emissions. reduce and mitigate social and governments to take action • For the first time, Braskem is part of CDP’s “A In Brazil, the Company environmental impacts. With toward a low carbon economy. List”: the maximum score of the global ranking participates in several business active participation in the major of companies regarding its strategies and results associated with climate change. Also, Braskem is the first Brazilian industry to achieve this result.

• Braskem participated in the UN Conference on Climate Change (COP-22) held in Morocco, contributing to the discussions on carbon pricing instruments CLICK HERE TO LEARN and disseminating its practices and progress in the MORE ABOUT BRASKEM’S management and adaptation to climate change. PARTICIPATION IN NATIONAL AND • The Company conducted workshops with Suppliers on INTERNATIONAL training and technical support to identify opportunities WORKING GROUPS AND to reduce emissions and costs. Almost 44% of the FORUMS. emissions outside the direct control of Braskem (Scope 3) are now reported to the Company. 2016 | Braskem | Annual Report 92

GREENHOUSE GASES Considering only Scope 1 emissions directly managed by Braskem, in 2016 the actions and initiatives implemented totaled a cumulative EMISSIONS (GHG) reduction of nearly 9% compared to base year 2008. Braskem’s corporate GHG emissions inventory considers all categories

of Scopes 1, 2, and 3 in 100% of its operations. Carbon Intensity (scope 1) - tCO2e/t

0.659 19%

GHG EMISSIONS (SCOPE 1 E 2) - ktCO2e 0.581 0.578 8% 0.564 0.540 12.000 959 874 0.532 771 1,088 1,077 980 10.000 10,199 9,743 9,565 9,384 9,140 9,253 Scope 1 8.000 ... Scope 2 6.000 2008 2012 2013 2014 2015 2016 Note: Braskem Idesa’s emissions in Mexico were not included in 2016, since the Complex was at the beginning of its operation and in the stabilization phase. Beginning in 2017, the Complex’s 4.000 emissions will be part of this indicator.

2.000 CARBON INTENSITY (SCOPE 1 AND 2) ... 0 0,721 18% 2008 2012 2013 2014 2015 2016

0,628 Note: Braskem Idesa’s emissions in Mexico were not included in 2016, since the Complex was at the beginning of its 0,630 0,630 0,604 operation and in the stabilization phase. Beginning in 2017, the Complex’s emissions will be part of this chart. 0,589

...

2008 2012 2013 2014 2015 2016

Note: Braskem Idesa’s emissions in Mexico were not included in 2016, since the Complex was at the beginning of its operation and in the stabilization phase. Beginning in 2017, the Complex’s emissions will be part of this indicator. 2016 | Braskem | Annual Report 93

Among the main initiatives to reduce emissions are: BRASKEM IDESA BRASKEM IDESA GHG EMISSIONS - tCO2e/year CARBON INTENSITY - tCO2e/t In southern Brazil, replaced part of the fossil fuel consumption (SCOPE 1) with the additional purchase of electricity, implying reduced absolute emissions. 58,641 1,527 1,588 1,474,227 Actions to optimize operational and energy efficiency.

Energy reduction and/or recovery initiatives.

FIRST INVENTORY OF Scope 1 Scope 1 Scope 2 Scope 1 + 2 GHG EMISSIONS FROM OPERATIONS IN MEXICO

Braskem Idesa’s operations the Company’s efficiency MANAGING INDIRECT EMISSIONS carry significant weight in indexes after it is stabilized. Since 2011, Braskem has carried (UNPOL), working together with distance; and emissions by the Company’s results, with out a GHG emissions inventory the Sustainable Development volume per distance traveled direct emissions (Scope 1) On the other hand, it is worth of Scope 3 (indirect emissions) area, created a tool enabling - “Comprehensive GHGE”), representing 14% of Braskem’s mentioning that the team and has significantly evolved practical and rapid measurement which calculate the relationship total. Given the pre-start and qualified itself, and carried in actions to engage its supply of Greenhouse Gas Emissions between the transported start of operations, results out the emissions inventory chain and to identify initiatives to in the logistics transport of volumes and traveled distances. for 2016 were lower than including all categories of reduce these emissions, while also finished products in any mode expected, since on some direct and indirect emissions, strengthening involvement in areas of transport. With this, it was The chart on the next page shows occasions the unit operated which will enable management such as Procurement, Logistics, easier to visualize the emissions the emissions by volume per without its operational and monitoring beginning at Services to People, Information of cargo transport by business, traveled distance (Comprehensive efficiency at full load. Because the plant’s start-up phase. Due Technology, acquisition of raw by type of transport, and even GHGE) indicator, month by month. it started operating in 2016 to the technology used in this material, and others. by Client. To make comparisons From now on, actions will be and to its more modern new unit, the Company expects possible, three KPIs were created taken toward critically analyzing technology, the unit in Mexico that its result in the coming In 2016, the Logistics area of (emissions by transported the results and identifying actions is expected to improve years will be one of its best. the Polyolefins Business Unit volume; emissions by traveled to reduce emissions. 2016 | Braskem | Annual Report 94

EGHG EMISSION MANAGEMENT IN LOGISTICS ABSOLUTE EMISSIONS (tCO2e) (kgCO2/t.km) Expansion of the measurement scope for 2016: 3,118,478 0.0278 0.0265 0.0262 15,803,961 0.0262 0.0261 0.0263 14,756,583 11,999,834 0.0267 11,533,672 0.0265 0.0264 0.0277 11,351,439 0.0257 0.0259

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

In the area of Services to People, Braskem joined an initiative with the transport supplier to purchase carbon credit through the use of fuels from renewable sources in its fleet of vehicles. The initiative has been implemented and is in the process of monitoring and raising user awareness, in order to achieve maximum 2012 2013 2014 2015 2016 adherence and consequently obtaining carbon credits. Note: Braskem Idesa’s emissions in Mexico were not included in 2016, since the Complex was at the beginning of its operation and in the stabilization phase. Beginning in 2017, the Complex’s emissions will be part of this chart.

The increase in Braskem Scope 3 absolute emissions was mainly due to the following factors:

Increased production in absolute figures, with the consequent increase in consumption of inputs and raw materials, among others.

Emissions from Braskem terminals, previously not yet included.

In the category referring to the use of the products sold by the Company, the beginning of reporting emissions associated with the gasoline produced and sold by the crackers, which was not previously included.

In the category referring to the end-of-life treatment of products sold, the report was expanded to approximately 80% of the products. 2016 | Braskem | Annual Report 95

OTHER EMISSIONS ENGAGEMENT OF SUPPLIERS G4-EN20, G4-EN21 IN EMISSIONS REDUCTION In addition to greenhouse gas emissions, Braskem manages other air Braskem does not have mandatory requirements the preparation and reporting of an emissions emissions within its responsibility, such as ozone-depleting29 substances for its Suppliers, but has been developing voluntary inventory, and identify risks and opportunities are and pollutants from fuel combustion, such as NOX, SOX, and others. engagement initiatives for the past five years as a carried out annually with support from CDP Supply EVOLUTION OF EMISSION OF OZONE LAYER- means of more efficiently managing GHG emissions Chain. As a result, there has been significant DEPLETING SUBSTANCES (SDCO) and the risks and opportunities in the chain evolution regarding the representativeness of upstream. Actions to raise awareness, encourage Scope 3 emissions. 2012 2013 2014 2015 2016 SDCO (t)* (t) (t) (t) (t) SUPPLIER ENGAGEMENT - CLIMATE CHANGE Tons of CFC-11 - 180.5 48.6 55.3 3.0 Equivalent No. of Suppliers invited No. of engaged Suppliers % of Suppliers’ adherence % of Scope 3 coverage *Not reported in the period. 200 182 60% 177 Braskem has also been replacing ozone-depleting substances with 57% other substances outside the Montreal Protocol lists. 54%

150 46% EVOLUTION OF EMISSIONS OF SOX, NOX AND OTHER 44% 42% SIGNIFICANT SUBSTANCES 104 2012 2013 2014 2015 2016 100 96 Emission(1) (t) (t) (t) (t) (t)

NOX 8,756 12,157 11,421 9,546 9,651 SO 5,880 6,582 11,509 4,503 3,137 50 39 42 X 31 25 11% 18 Volatile Organic (2) 13 Compounds 1,756 2,707 3,881 3,808 6,139 0% 1% Particulate Matter 1,088 1,547 1,225 911 860 0 9% 2012 2013 2014 2015 2016 Toxic Air (2) (3) 142 549 97 652 531 Pollutants Other(4) 7,121 6,108 6,190 14,495(2) 4,145 Braskem has expanded SUPPLIERS’ ENGAGEMENT (1)The methodologies used are recommended by state environmental agencies. Where there Supplier engagement toward is no measurement, estimates (emission factors) based on recognized methods, such as WATER RISK MANAGEMENT AP-42 from USEPA, are used. Water Resources, focusing on Total number of 53 suppliers invited (2) The plants have been expanding their assessments, which explains the increase in these those located in regions with parameters. 21 (3) Includes Toxic Air Pollutants and HAP potential water stress, and is Suppliers engaged (4) Includes total hydrocarbons and carbon monoxide. training its buyers to broaden

29 Ozone depletion refers to the decline in the total volume of ozone in the Earth’s the management of the stratosphere (the ozone layer) reported aspects. 2016 | Braskem | Annual Report 96

CARBON PRICING After creating a work platform to assist impact regulation, identifying positive and in making investment decisions, Braskem negative contributions to projects. Thus, concentrated its actions in 2016 on: the positive or negative economic values corresponding to the environmental • Validating the carbon price with impact caused by emissions are calculated senior management. for those projects that reduce or generate • Adapting its standards and emissions. procedures. • Aligning and training leaders and This process is now entering the monitoring key stakeholders. phase, in which will be evaluated the • Using this criteria to support effectiveness of the price defined compared decisions for the 2017 investment to the change in project eligibility in the portfolio. decision-making process. All actions were concentrated in Brazil, and in 2017 the The tool calculates the virtual cost of Company will define and implement a carbon as a preliminary path for future strategy for its international units.

To understand impact To To calculate carbon To create To apply To monitor determine performance footprint platform internal price To reduce price emissions

It is worth mentioning that Braskem also actively participates in the Emissions Trading Simulation (SCE) and the Companies for Climate Platform, a constructive carbon market experience for debate and knowledge generation, expanding the contribution of companies to government proposals. 2016 | Braskem | Annual Report 97

RISKS AND OPPORTUNITIES - ADAPTATION TO CLIMATE CHANGE In order to ensure its information; interpreting in Brazil, United States, competitiveness while information; and expansion and Germany until 2040, contributing to the transition to of risk management by with external support from a new development model based incorporating climate variables the National Institute of on the low carbon economy, in the Company’s strategic Space Research (INPE) and Braskem has been working on planning. specialized consulting, the a comprehensive adaptation Company complemented these plan that works on five After identifying and prioritizing studies by identifying the main fronts: internal engagement; potential opportunities and potential impacts for Braskem external coordination; securing climate risks in all plants Idesa’s operations in Mexico.

POTENTIAL CLIMATE RISK SCENARIOS

2015 Scenario 2040 Scenario

14

12 11

4 2 3 3 1

Number of industrial unitsrisk withpotential industrial high of Number 1 1 1 1 1

Intense Water Hurricanes Energy Flooding Epidemics Heat Waves Rising Sea In Brazil, the Company validated, that will be monitored by the Rain and Shortage and Tropical Generation Levels with its leaders, the potential sponsor of the Company’s Climate Electrical Cyclones Discharges climate risks and the respective Change macro objective. actions for the most relevant risks, which will be managed periodically After validating the actions for through a framework based on a potential risk scenarios, Braskem methodology approved with the will focus on validating scenarios Getúlio Vargas Foundation (FGV), and actions for international in São Paulo, and with indicators operations. 2016 | Braskem | Annual Report 98

OVERVIEW OF THE CLIMATE CHANGE ADAPTATION PLAN PLANTS OF BRAZIL

NUMBER OF ACTIONS - “TOTAL” AND “(IN PROGRESS)”

Region/Location Total

Intense Rain Water Hurricanes Energy Flooding Rising and Electrical Shortage and Tropical Generation Sea levels Discharges Cyclones

AL - 3(2) - 1(0) 1(1) 1(0) 6(3) NORTHEAST BA - 5(2) - 2(1) - - 7(3)

BRAZIL RJ - 4(1) - 1(1) - - 5(2) SOUTHEAST SP 1(1) 3(1) - 1(0) 3(1) - 8(3)

SOUTH RS 1(1) - 4(1) - 2(0) - 7(2)

BRASKEM TOTAL 2(2) 15(6) 4(1) 5(2) 6(2) 1(0) 33(13)

(-)= not applicable Example: 4(1) = total of 4 actions and 1 in progress 2016 | Braskem | Annual Report 99

GRI G4 Content Index

INDICATOR DISCLOSURE PAGE

GENERAL STANDARD CONTENT

Strategy and Analyses

G4-1 03

G4-2 03

Organizational Profile

G4-3 08

G4-4 08, 10

SP Office - Headquarters Rua Lemos Monteiro, 120, Edifício Odebrecht G4-5 Butantã 10 ZIP CODE: 05501-050 Phone: +55 11 3576-9000

G4-6 07, 10

G4-7 08

G4-8 09, 50, 76

G4-9 07, 08

G4-10 57

98.9% of Team Members in Brazil are covered by collective bargaining agreements, 42.2% in G4-11 Mexico, and 8.9% in the USA.

G4-12 07, 70, 72 2016 | Braskem | Annual Report 100

INDICATOR DISCLOSURE PAGE

G4-13 Braskem Idesa Complex beginning of operation -

In principle, and in accordance with the Health, Safety, Environment, Quality and Productivity, Braskem G4-14 does not produce, handle, use, commercializes, transports or discard any product if it does not 22 can do it safely, with minimal impact to the environment.

G4-15 17, 22

G4-16 22

Identified Material Aspects and Boundaries

G4-17 08

G4-18 18, 20

G4-19 18

G4-20 18

G4-21 18

The following comment concerns indicators G4-22 and G4-23: it should be noted that the results of quantiQ G4-22 were reported in the Financial Statements of the report, but are not included in social and environmental indicators. Its management was already carried out independently even before the sale of the company. G4-23 quantiQ was sold on 1/10/2017 (signing), with the closing of the transaction on 4/03/2017 (closing).

Stakeholder Engagement

G4-24 18

G4-25 18

G4-26 18

G4-27 18

Report Profile 2016 | Braskem | Annual Report 101

INDICATOR DISCLOSURE PAGE

G4-28 Annual, covering the fiscal year from January 1 to December 31, 2016

G4-29 2015

G4-30 Annual

G4-31 120

G4-32 G4 Core

The external assurance, performed by KPMG, occurs at the request of the Leaders and is part of the set of G4-33 annual goals of those responsible for preparing the report.

Governance

G4-34 27

G4-39 27

Ethics and Integrity

G4-56 32

G4-57 32

G4-58 31, 33

ETHICS AND INTEGRITY

SPECIFIC STANDARD CONTENT

Material Aspects: All

Macro Objectives: All

Material Aspects: Economic Performance 2016 | Braskem | Annual Report 102

INDICATOR DISCLOSURE PAGE

G4-EC1 35, 39

G4-EC2 91

G4-EC4 77

Aspects: Market Presence

Macro Objectives: Local Development

G4-EC5 60

G4-EC6 59

Aspects: Indirect Economic Impacts

Macro Objectives: Local Development

G4-EC7 64

G4-EC8 64

Aspectos: práticas de compra

Macro Objetivos: desenvolvimento local

G4-EC9 70

Aspects: Materials

Macro Objectives: Renewable Resources

Among the main non-renewable direct materials used by Braskem are naphtha, condensate, ethane, propane, HLR, and sodium chloride. The Company also uses ethanol manufactured from sugar cane to produce ethylene from a renewable source, thereby reducing its demand for non-renewable resources. Braskem G4-EN1 understands materials as those present in the end product. Non-renewable materials are resources that are not renewed at the same rate at which they are consumed, such as minerals, metals, oil, coal, and gas. The values used are not disclosed because it is commercially sensitive information. 2016 | Braskem | Annual Report 103

INDICATOR DISCLOSURE PAGE

Braskem continuously invests in renewable raw materials. In industrial plants, reuse is maximized through the return of currents within the production process, which would be equivalent to internal recycling. G4-EN2 Investments in energy and chemical recycling are being made for the future.

Aspects: Energy

Macro Objectives: Energy Efficiency

G4-EN3 88

G4-EN5 88

G4-EN6 88, 89

Aspects: Water

Macro Objectives: Water Efficiency

G4-EN8 85

G4-EN10 85, 86

Aspects: Biodiversity

Macro Objectives: n/a (only material for Mexico)

The main impact of Braskem in biodiversity occurs when new units are built in areas where before there G4-EN12 was no activity industry, such as in Mexico, where Braskem Idesa Complex finalized the construction of its petrochemical plant. These impacts are reversible in the medium term (approximately 10 years). By 2016, only one endangered species was at risk of being affected by Braskem’s operation: the Ceratozamia G4-EN14 miqueliana(flora, critical status) in Mexico. Moving the plants found to the environmental protection area created by the Company significantly increased the number of plants.

Aspects: Emissions

Macro Objectives: Climate Change 2016 | Braskem | Annual Report 104

INDICATOR DISCLOSURE PAGE

G4-EN15 91

G4-EN16 91

G4-EN17 91

G4-EN18 91

G4-EN19 91

Macro Objectives: Climate Change

G4-EN20 95

Macro Objectives: Energy

G4-EN21 95

Aspects: Effluents and Waste

Macro Objectives: Water Efficiency

G4-EN22 85

Macro Objectives: Safety

G4-EN23 90

Aspects: Products and Services

Macro Objectives: Application Development

In the agribusiness segment, the use of polypropylene to produce raffia sacks prevented the emission of

190,600 tons of CO2e. In the automobile segment, the use of PP to replace several materials avoided the

G4-EN27 emission of 4.5 million tons of CO2e. In the segment of real estate paints, the use of PP in buckets, replacing 50

the tin can, avoided the equivalent of 19,500 tons of CO2e. In total, for the PP segment, the emission of 4.7

million CO2e. was avoided. 2016 | Braskem | Annual Report 105

INDICATOR DISCLOSURE PAGE

Macro Objectives: Post-Consumption

G4-EN28 65

Material Aspects: Compliance

Macro Objective: Strengthening of Practices

Braskem was not definitively ordered to pay fines or to comply with non-monetary sanctions in the period. For the purpose of this report, the same materiality criteria used on the Reference Form established by G4-EN29 the Brazilian Securities and Exchange Commission (CVM) was adopted, under Normative Instruction CVM 480/2009 - BRL 60 million. For environmental issues, the amount of BRL 10 million was considered.

Aspects: Overall

Macro Objectives: Climate Change, Energy, Water

G4-EN31 80

Aspects: Employment

Macro Objectives: Economic and Financial Results

G4-LA1 62

Material Aspects: Diversity and Equal Opportunities

Macro Objectives: None, because the related aspects are not material

The health and safety data recording system does not break down data by gender or third parties. The G4-LA6 monitoring methodology for absenteeism, which was expected to be adapted by the second half of 2016, is 81 still being reviewed.

Material Aspects: Diversity and Equal Opportunities

Macro Objectives: None, because the related aspects are not material

G4-LA12 57 2016 | Braskem | Annual Report 106

INDICATOR DISCLOSURE PAGE

Material Aspects: Local Communities

Macro Objectives: Local Development

G4-SO1 64

G4-SO2 82

Material Aspects: Anti-Corruption

Macro Objectives: Strengthening of Practices

G4-SO5 03, 31

Material Aspects: Anti-Corruption

Macro Objectives: Strengthening of Practices

Zero. In Brazil, in 2016 G4-SO6 Braskem made no donations to political parties.

Material Aspects: Unfair Competition

Macro Objectives: Strengthening of Practices

G4-SO7 Indicator is restricted to the Brazilian territory. In 2016, no actions were recorded regarding the indicator

Regarding this indicator, the following should be considered: (i) The Leniency Agreement, referred to above as the "Braskem Global Agreement"; (ii) in addition, Braskem was not definitively ordered to pay fines or to comply with non-monetary sanctions in the period in question. For the purpose of this report, the G4-SO8 same materiality criteria used on the Reference Form established by the Brazilian Securities and Exchange Commission (CVM) was adopted, pursuant to Normative Instruction CVM 480/2009 - BRL 60 million. For environmental issues, the amount of BRL 10 million was considered. 2016 | Braskem | Annual Report 107

INDICATOR DISCLOSURE PAGE

Material Aspects: Client Health and Safety

Macro Objectives: Safety

G4-PR1 84

G4-PR2 No record of complaints.

Material Aspects: Product and Service Labeling

Macro Objectives: Safety

G4-PR3 84

G4-PR4 No record of complaints.

Aspects: Marketing Communications

Macro Objectives: Strengthening of Practices

There have been no instances of non-compliance with regulations and voluntary codes regarding marketing G4-PR7 communication, including advertising, promotion, and sponsorship.

Material Aspects: Compliance

Macro Objectives: Strengthening of Practices

Braskem was not definitively ordered to pay fines or to comply with non-monetary sanctions in the period. For the purpose of this report, the same materiality criteria used on the Reference Form established by G4-PR9 the Brazilian Securities and Exchange Commission (CVM) was adopted, under Normative Instruction CVM 480/2009 - BRL 60 million. For environmental issues, the amount of BRL 10 million was considered.

Aspects: Non-discrimination

Macro Objectives: Strengthening of Practices

G4-HR3 33 2016 | Braskem | Annual Report 108

KPMG

KPMG Financial Risk & Actuarial Services Ltda. Independent auditors’ responsibility Rua Arquiteto Olavo Redig de Campos, 105, 6º andar - Torre A Our responsibility is to express a conclusion about the information in 04711-904 - São Paulo/SP - Brasil the 2016 Annual Report based on the limited assurance engagement Caixa Postal 79518 - CEP 04707-970 - São Paulo/SP - Brasil conducted in accordance with Technical Communication (TC) Telefone +55 (11) 3940-1500, Fax +55 (11) 3940-1501 07/2012 approved by the Federal Accounting Council and prepared www.kpmg.com.br in accordance with NBC TO 3000 (Assurance Engagements Other Than Audits and Reviews), issued by the Brazilian Federal Accounting Council - CFC, which is the equivalent to international Limited assurance report standard ISAE 3000 issued by the International Federation of Accountants applicable to Non-Financial Historical Information. issued by independent These standards require compliance with ethical requirements, auditors including independence ones and also that the engagement is conducted to provide limited assurance that the information in the 2016 Annual Report, taken as a whole, is free from material To the Directors and Officers of misstatement. Braskem S/A São Paulo - SP A limited assurance engagement conducted in accordance with NBC TO 3000 (ISAE 3000) consists mainly of questioning the management of Braskem and other professionals of the Company Introduction involved in the preparation of the information disclosed in the We have been engaged by Braskem S/A (“Braskem”) to apply limited 2016 Annual Report and applying analytical procedures to obtain assurance procedures on the sustainability information disclosed in evidence that allows us to make a limited assurance conclusion Braskem’s 2016 Annual Report, related to the year ended December about the sustainability information taken as a whole. A limited 31st, 2016. assurance engagement also requires additional procedures when the independent auditor learns of issues which lead them to believe Responsibilities of Braskem’s Management that the information disclosed in the 2016 Annual Report taken as The management of Braskem is responsible for preparing and a whole could present material misstatement. adequately presenting the information in the 2016 Annual Report in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (GRI-G4) as well as the internal controls determined necessary to ensure this information is free from material misstatement, resulting from fraud or error. 2016 | Braskem | Annual Report 109

The selected procedures were based on our understanding of the Scope and limitations issues related to the compilation, materiality and presentation of the The procedures applied in a limited assurance engagement are information disclosed in the 2016 Annual Report, other engagement substantially less extensive than those applied in a reasonable circumstances and considerations regarding areas and procedures assurance engagement. Therefore, we cannot ensure we are aware associated with the material sustainability information disclosed in of all the issues that would have been identified in a reasonable the 2016 Annual Report where material misstatement could exist. assurance engagement, which aims to issue an opinion. If we had The procedures consisted of: conducted a reasonable assurance engagement, we may have identified other issues and possible misstatements within the (a) planning: consideration of the materiality of aspects to information presented in the 2016 Annual Report. Braskem’s activities, relevance of the information disclosed, amount of quantitative and qualitative information and operational systems Nonfinancial data is subject to more inherent limitations than and internal controls that served as a basis for preparation of the financial data, due to the nature and diversity of the methods information in the 2016 Annual Report. This analysis defined the used to determine, calculate or estimate this data. Qualitative indicators to be tested in detail; interpretations of the data’s materiality and accuracy are subject (b) understanding and analysis of the information disclosed related to individual presumptions and judgments. Additionally, we did to the management of material aspects; not examine data regarding prior periods to assess the adequacy (c) analysis of processes for the preparation of the 2016 Annual of policies, practices and sustainability performance, nor future Report and its structure and content, based on the Principles projections data. for Defining Report Content and Quality of the Global Reporting Initiative - GRI (GRI-G4); Conclusion (d) evaluation of indicators and other non-financial information: Based on our review, nothing has come to our attention to • understanding the calculation methodology and procedures for indicate that Braskem’s 2016 Annual Report is not presented, in all the compilation of indicators through interviews with managers material aspects, in accordance with the Global Reporting Initiative responsible for preparing the information; Sustainability Reporting Guidelines (GRI-G4), and with its source • application of analytical procedures on the quantitative information records and files. and questions about qualitative information and their correlation with indicators disclosed in the 2016 Annual Report; São Paulo, June 21st, 2017 • analysis of evidence supporting the information disclosed; • visits to four of Braskem’s operational units and its head office for application of these procedures, as well as of items (b) and (c); KPMG Assessores Ltda. KPMG Financial Risk & Actuarial (e) plausibility analysis of the reasons for omissions of performance CRC 2SP034262/O-4 F-SP Services Ltda. indicators associated with topics and aspects identified as material through the Company’s materiality assessment; and We believe the information, evidence and results we have obtained are sufficient and appropriate to provide a basis for our limited Eduardo V. Cipullo Ricardo Algis Zibas conclusion. Accountant CRC 1SP135597/O-6 2016 | Braskem | Annual Report 110

MACRO OBJECTIVES

In 2016, this macro objective reached a level of progress of about 86% of the goal for 2020.

Occupational Safety • In the period from 2002 to 2016, the injury frequency rate w/o Lost Time (Saf) + w/ Lost Time (Caf), and severity rate improved respectively 92.3%, 92.2%, and 36%. • A fatal accident occurred at the PE8 CUB-SP plant. • Fifteen industrial plants without record of lost time accidents (considering Members and Contractors) for more than three years, ten of these for more than five years. • The percentage of plants in SEMPRE stages 4 and 5 increased from 13% to 46.7%. • Percentage of behavioral dialogues without deviation improved from 66% in 2015 to 80% in 2016. This SEMPRE: 99% of denotes a stronger culture of prevention through compliance with procedures. industrial plants in stage 5 implementation Process Safety

Safety • Risk Rating: The number of industrial plants with above standard rating based on audits by insurance Accident rate with and without To be among the benchmarks companies has evolved from 12 to 15. lost time - 0.75 accidents/MM in Chemical, Occupational, and • Nine TIER1 process accidents were recorded, 18% less than in 2015. The total cost avoided was BRL Mhw; Process Safety in the Global 17.1 million. Chemical Industry. Event rate Tier 1: 0.20 events/ Chemical Safety MM Mhw • Updated the multi-year action plans to replace asbestos, HCFC22 (Hydrochlorofluorocarbon), and CCl4 (carbon tetrachloride);

Occupational Health • Recorded a new case of occupational illness due to depression.

Liquid, Paste, and Solid Waste • In the period from 2002 to 2016, the waste generation rate improved by 63%, representing a result 57% better than the national chemical industry average (Abiquim database, 2015). 2016 | Braskem | Annual Report 111

MACRO OBJECTIVE 2020 GOAL ACTIONS IN 2016

In 2016, this macro objective reached a level of progress of 73% of the goal for 2020.

Economic Production capacity: capacity Production Capacity and financial results of the 3rd largest 11,000 kt/yr. • The petrochemical complex in Mexico began operation in April and provided an increase in the capacity To be among the top three (2020) - LyondellBasell. of Low Density Polyethylene (LDPE) of 1.05 million tons/year. thermoplastic resin producers in the world and ensure Investment Grade: maintain EBITDA profitability that sustains the Investment Grade rating • Record EBITDA of BRL 11.5 billion in 2016. business continuity while of Moody’s, Fitch Rating, and maintaining the Investment Standard & Poor’s. Investment Grade Grade rating in the three major • Maintained the investment grade assigned by two global risk rating agencies: Fitch Rating and Standard international agencies. & Poor’s. Downgraded by Moody’s in February 2016.

In 2016, this macro objective reached a level of progress of 73% of the goal for 2020.

Wecycle Platform • Launched the first polypropylene and polyethylene resins made from fully recycled content. Combined Post-consumer production volumes may reach 50 tons per month. The resins were developed within the Wecycle To be one of the five largest platform, an initiative that seeks to recover plastic waste throughout the production chain. traders of PE and PP from recycled content in the world, • Polypropylene resin WCL H 1003 BBM is produced from recycling big bags used in resin transport that Mechanical recycling rate: among the petrochemical were discarded in the past. Nearly 120,000 big bags will be recycled annually, which should generate a 28% in Brazil companies producing potential volume of 30 tons/month of post-consumer recycled resin. The new product may be applied Polyolefins. To become an to household utilities, garden products, and lids. Tramontina is already testing and evaluating in which important driver of the growth applications of its gardening line the resin may be used. of plastic recycling in Brazil, helping achieve the goals • Possible applications of WCL L004 SCV polyethylene resin are bags, laminated packaging, tarps, flexible in the Sector Agreement on packaging, and tubes. It is produced from used and discarded bags at Braskem’s Distribution Centers. Packaging. The total volume of recycled resin may reach 20 tons/month in 2017, representing the monthly recycling of approximately 200,000 bags. 2016 | Braskem | Annual Report 112

MACRO OBJECTIVE 2020 GOAL ACTIONS IN 2016

In 2016, this macro objective reached a level of progress of 78% of the goal for 2020.

Green PE • The production of Green PE has been modernized to further mitigate impact on the environment. With

investments of BRL 7.1 million from 2013 to 2015 to reduce CO2 emissions by 30%, new equipment was Renewable resources installed to reduce losses, reducing fuel consumption by the generator; as well as a new effluent reuse To be among the leading system, which will reuse effluents. After modernizing its production process, the updated Green PE Life Production capacity of producers of thermoplastic Cycle Assessment (LCA) was launched, which identified the capture of 2.78 tons of CO e per ton of thermoplastic chemicals and 2 chemicals and resins from product produced from sustainable resin, against 2.15 tCO e/t identified in the previous study. resins from renewable raw 2 renewable raw materials. • Green PE is the first product from the Brazilian petrochemical industry to receive carbon footprint materials: 230Kt/yr. Remain the world’s largest certification, an initiative that was born in the Technical Committee of the Industry Plan (CTPIn) and producer of thermoplastic the Ministry of Industry and Commerce (MDIC), which defines and guides actions for implementing resins from renewable sources. the National Policy on Climate Change in priority sectors. According to the measurement, made by Carbon Trust and the Brazilian Association of Technical Standards (ABNT), the polyethylene from renewable origin has a negative emissions footprint, that is, it helps to sequester polluting gas from the atmosphere. The company voluntarily participated in the certification in order to provide transparency to information to its client relations, and to promote the adoption of this practice.

In 2016, this macro-objective reached a level of progress of 96% of the goal for 2020.

Water Consumption Water consumption rate (m³/t): • In the period from 2002 to 2016, the water consumption rate improved by 4.8%, the water reuse average water consumption of percentage improved by 38%, and the net effluent generation rate improved by 43%. the global chemical industry Water Efficiency 26.5 m³/t (2014) • Reduction in water consumption rate for the fourth consecutive year, reaching 3.93 m³/t. This is about To be among the benchmarks 6.5 times better than the average for the global chemical industry (ICCA 2013 - 25.64m³/t). in the use of water resources Percentage of water reuse: in the global chemical industry 2020: 25% • The net effluent generation rate reached 1.11m³/t, the best result since 2002. in terms of water consumption 2025: 30% and water reuse rates. 2030: 50% • Three process improvement initiatives were implemented in the UNIB1 BA, UNIB 2 RS, and UNIB 3 ABC crackers for water recovery and reuse, totaling an annual savings of nearly BRL 2.5 million;

• Completed study of four watersheds of a total of eight that will be studied. Results presented at Abiquim’s 16th Congress of the Program called Atuação Responsável (Responsible Performance). 2016 | Braskem | Annual Report 113

MACRO OBJECTIVE 2020 GOAL ACTIONS IN 2016

In 2016, this macro-objective reached a level of progress of 93% of the target for 2020.

Greenhouse gas inventory: • Considering only Scope 1 emissions, directly managed by the Company, the total aggregate reduction Climate Change was about 9% compared to baseline year 2008 (without Mexico). Scopes 1 + 2 totaled a reduction of To be among the world’s best 18% (without Mexico). major chemical companies in CO Emissions Intensity 2 CDP Investor intensity of greenhouse gas (tCO e/t): remain at 600Kg/t 2 • Braskem became the first Brazilian industry to join the A List of the CDP carbon program. (GHG) emissions, and to be CDP Supply Chain a major sequester of GHG • Braskem joined the A List of the CDP Supply Chain Program. emissions due to the use of Climate Risk Management renewable raw materials. • The climate risk studies in Mexico were completed and the Braskem’s Adaptation Plan was designed in Brazil, consolidating plans for the Northeast, Southeast, and South regions.

In 2016, this macro-objective reached a level of progress of 94% of the goal for 2020.

Energy Consumption Energy consumption rate • In 2016, a total of 10.25 GJ of energy was consumed per ton produced, the best result since 2002, Energy Efficiency (GJ/t): 10.82 GJ/t representing an aggregate improvement of 14%. To be among the best major

chemical industries in the % of renewable energy use: • Five initiatives were implemented to improve the energy efficiency of the process, totaling an annual world in intensity of energy 11% savings of BRL 4.6 million. consumption and to be a major

user of renewable energy • Since 2002, approximately BRL 100 million has been invested to improve the efficiency of the electrical sources. system of crackers in the UNIB1 BA and UNIB2 RS against power outages (caused, for example, by lightning striking Braskem’s external and/or internal electrical system). 2016 | Braskem | Annual Report 114

MACRO OBJECTIVE 2020 GOAL ACTIONS IN 2016

In 2016, this macro-objective reached a level of progress of 88% of the goal for 2020.

In 2016, a total of BRL 27.5 million were invested in social and environmental projects, with emphasis on Reputation Index (%): Local development private social investment projects: “excellent” level in RepTrakTM To achieve the “excellent” • Ser + Realizador: 3,444 waste collectors benefited and 813 recorded an increase in income. Pulse citizenship dimension (> reputation level in the 80%) citizenship dimension of • Fábrica de Florestas Institute: produced 88,407 seedlings, planted 46,628, and 27,506 people received

RepTrak® Pulse, demonstrating sensitivity training. Leverage of private social that it is recognized by the investments: 200% based on community surrounding the • Edukatu: the numbers have evolved significantly. The number of participants reached 28,441 people, the annual budget facility and by society at number of teachers engaged increased to 1,084, and the number of students engaged large for its contribution to the improvement of human development.

In 2016, this macro-objective reached a level of progress of 85% of the goal for 2020. LCA studies “Strong” reputation level • From 2011 to 2016, a total of 41 ACV and five Carbon Footprint studies were completed, identifying the with Clients in the products advantages and priority areas for product improvement. & services dimension of Deep Developing solutions Dive: 70.0% • In 2016, the level of alignment of the project pipeline was 84%. Throughout the year, Braskem To be recognized as a company completed a total of ten LCA studies, among which the Recycled Plastic Resins and Casa Clic stand out. that supports its clients in the Rate of new projects Braskem Labs development of environmental showing positive social and • In its second edition, the program received 190 applications and selected 12 innovative proposals in the and social solutions using environmental impact: 233.2 areas of chemistry and plastic, and also to combat the Aedes aegypti mosquito. Chemistry and Plastics, kt/yr. reaching a “strong” reputation • The Eco Brasil Award, sponsored by the American Chamber of Commerce (AmCham) and the newspaper level through its products & Number of LCA studies O Estado de S.Paulo, recognized the Braskem Labs program as a winner in the Processes – Large services. completed: 14 Companies category. 2016 | Braskem | Annual Report 115

MACRO OBJECTIVE 2020 GOAL ACTIONS IN 2016

In 2016, this macro-objective reached a level of progress of 91% of the goal for 2020.

Diversity • Braskem was chosen among 200 companies in Brazil as one of the 10 best for women to work according ISE Bovespa score: remain to a survey conducted by Love Mondays (based on 12,000 interviews). Braskem’s diversity program listed with a score equivalent was reported to the People and Organization Committee (CPO), a support committee to the Board of to the average between the Directors (CA), demonstrating the strategic importance given to the topic. Strengthening practices portfolio benchmark and ISE BM&FBovespa To be among the business the portfolio average DJSI • For the 12th consecutive time, Braskem was included in the ISE portfolio (Corporate Sustainability benchmarks in Brazil for its Emerging Markets Score. Index), the sustainability index of BM&FBOVESPA of São Paulo. contribution to Sustainable DJSI Emerging Markets Development. To be one of Maintain a score equal to the • Braskem was listed for the fifth consecutive year in the Dow Jones Sustainability Emerging Markets the global benchmarks in the average of the world Chemical Index (DJSI), the sustainability index for companies in emerging markets on the New York Stock sector for its contribution in Industry benchmark and the Exchange (NYSE). Sustainable Development. first in the global industry The Sustainability Yearbook index. • For the third time, Braskem was included in The Sustainability Yearbook, a publication prepared by RobecoSAM, an international investment consulting firm specializing in sustainability. The ranking lists the 457 most sustainable companies in the world, with Braskem listed among the 19 leading companies in the global chemical sector and among the 12 leading Brazilian companies (considering the 59 sectors covered by the study). Additionally, in 2016, Braskem received the “Bronze” classification. 2016 | Braskem | Annual Report 116

Glossary

Biopolymer Flare all quotas does not exceed the Raffia ACRONYMS Thermoplastic resin produced Static mechanical safety maximum fixed limit for the Fibers used to manufacture ABS: acrylonitrile-butadiene from renewable raw materials equipment that is powered to system. The cap is set to ensure bags for transporting fruit or styrene burn chemical compounds that that total system emissions are small loads GJ: Gigajoules Cap the industrial plant will not reduced from one period to the GPS: Global Product Strategy Emission limit be able to process. Burning next. Trade is the trading of Ramp-up KWh/t: kilowatt-hour per ton keeps hazardous compounds permissions between participants Term in economy and business kg/t: kg per ton Cracker from being released into the - those who can reduce their defining the initial stage of PE: Polyethylene Industrial plant where naphtha atmosphere. emissions further can sell their industrial production HDPE: High Density is processed into derivatives, surplus permissions to those Polyethylene such as ethylene, propylene, Rotary clinker kilns for whom reducing emissions Risk rating (of processes) LDPE: Low Density and other co-products Kilns to produce cement is more expensive than buying Process safety index Polyethylene permissions from others. That is, established by insurance LLDPE: Linear Low Density Cracking (naphtha) Grade (Resin) the trade mechanism allows the companies Polyethylene Breaking molecules for Type, Specification reduction sought by the group PP: Polypropylene ethylene production to be achieved at the lowest Second generation (in the PVC: Polyvinylchloride Investment grade possible cost. petrochemical industry) REACH: Registration, Eco-efficiency Investment grade Second generation units, Evaluation, Authorization and The ratio between the use Offsets producers of intermediates and Restriction of Chemicals of resources required to Reverse logistics Emission credits that may be thermoplastic resins (PE, PP, SAN: Styrene acrylonitrile manufacture a given product A set of actions, procedures, traded in a cap&trade market. and PVC) UNIB: Basic Petrochemicals and its production volume. and means enabling the They are generated by the and Vinyls Unit Expresses productivity from an collection and restitution of reduction of avoided emissions Spread UNPOL: Polyolefins, environmental standpoint solid waste in the business or emissions in accredited Margin (of profitability) Renewables and Europe Unit sector, for reuse in its cycle or locations outside of market UTEC: ultra-high molecular Eco-indicators in other production cycles, or coverage (e.g. reforestation). Tagalong weight - Braskem’s brand Environmental performance for other destinations These securities may be Mechanism that gives minority indicators used as compensation by shareholders the same rights Cap&trad market participants in a cap&trade as controlling shareholders in Grid factor Cap & trade. A system composed market who have exceeded the event of sale or transfer Average rate of GHG emissions of several parts in which their emission limit of control. Under Brazilian law resulting from generating electricity emission quotas (permissions) (Brazilian Corporate Law). are established for each p.p. participant, so that the sum of Percentage point 2016 | Braskem | Annual Report 117

Corporate Information

UNIB 4 e PE 9 DCX SOUTH BRAZIL Rua Marumbi, 1001, Campos Elíseos UNIB 2 RS Duque de Caxias BR 386, Rod. Tabaí / Canoas, km 419, SOUTHEAST ZIP CODE: 25221-000 Via de Contorno, 850 UNIB 3 CK ABC Phone: +55 21 2187-8883 Triunfo Avenida Presidente Costa e Silva, 1178, ZIP CODE: 95853-000 Pq. Capuava – Santo André UN PP 5 DCX Phone: +55 51 3457-6310 ZIP CODE: 09270-901 Rua Marumbi, 1400, Campos Elíseos Phone: +55 11 4478-1515 Duque de Caxias PP 1 RS ZIP CODE: 25221-000 BR 386 KM 419 – III Polo Petroquímico, UNIB 3 IN ABC Phone: +55 21 2173-4100 Via Oeste – Lote 5 Rua da União, 765, Jardim Sonia Maria Triunfo Mauá UN PP 3 PLN ZIP CODE: 95853-000 ZIP CODE: 09380-900 Avenida Wagner Samara, 1280, Phone: +55 51 3721-8161 Phone: +55 11 4977-2020 Bairro Cascata, Paulínia ZIP CODE: 13147-082 PP 2 / PE 5 RS UN PE 7 ABC Phone: +55 19 3344-6700 BR 386 KM 419 Lote 4 Avenida Presidente Costa e Silva, 400, Polo Petroquímico do Sul Pq. Capuava – Santo André SP Office - Headquarters Triunfo ZIP CODE: 09270-000 Rua Lemos Monteiro, 120, ZIP CODE: 95853-000 Phone: +55 11 4478-4000 Edifício Odebrecht, Butantã Phone: +55 51-3457-5511 ZIP CODE: 05501-050 UN PP 4 ABC Phone: +55 11 3576-9000 PE 4 RS Avenida Ayrton Senna da Silva, 2700, BR 386 – Rodovia Tabaí/Canoas – Km 419, Jardim Oratório – Mauá SP Office – Villa Lobos Via de Contorno, 1216 ZIP CODE: 09380-901 Avenida das Nações Unidas, 4.777, Polo Petroquímico, Triunfo Phone: +55 11 3583-2200 11º andar, Edifício Villa Lobos ZIP CODE: 95853-000 Pinheiros Phone: +55 51-3721-8661 UN PE 8 CUB ZIP CODE: 05477-000 Rodovia Cônego Domenico Rangoni,55, s/n Phone: +55 11 3576-9000 Km 266 – Pista Oeste Cubatão ZIP CODE: 11573-903 Phone: +55 13 3362-9001 2016 | Braskem | Annual Report 118

PE 6 RS PE 1 BA Av. Av. Antônio Carlos Magalhães, 3244, BR 386 – Rodovia Tabaí-Canoas – Rua Eteno, 1582, Copec - Polo de Camaçari Thomé de Souza, 20º andar Km 419, Via de Contorno 1178 Polo Petroquímico, Camaçari Salvador Lote 29, Passo Raso, Triunfo ZIP CODE:42810-000 ZIP CODE: 41820-000 ZIP CODE: 95853-000 Phone: +55 71 3413 3711 Phone: +55 71 3504-7932 Phone: +55 51-3457-2351 PE 2 BA RS Office Rua Hidrogênio, nº 3520, COPEC, Polo de Camaçari UNITED STATES Av. Soledade, 550, 2º andar, Camaçari Headquarters Petrópolis, Porto Alegre ZIP CODE: 42810-280 1735 Market Street, 28th floor ZIP CODE: 90470-340 Phone: +55 71 3413 3860 PA 19103 Phone: +55 51 3216-2626 Philadelphia PVC 1 BA Phone: +1 215 831-3100 ALAGOAS Rua Hidrogênio, 3342, COPEC–Polo de Camaçari CS 1 AL Camaçari La Porte Plant Avenida Assis Chateaubriand, 5260 ZIP CODE: 42810-280 8811 Strang Road, La Porte Bairro Pontal da Barra, Maceió Phone: +55 71 3413-2800 TX 77571 ZIP CODE: 57010-900 Phone: +1 281 476-0303 Phone: +55 82 3177-5151 PE 3 BA Fax: +1 281 930-2070 Rua Benzeno, 2391, COPEC - Polo de Camaçari PVC 2 AL Camaçari Marcus Hook Plant Rodovia Divaldo Suruagy – Km 12 – Via II ZIP CODE:42810-020 750 West 10th Street Polo Industrial José Aprígio Vilela, Phone: +55 71 3413 4100 Marcus Hook, PA 19061 Marechal Deodoro ZIP CODE: 57160-000 PP6-BA Neal Plant Phone: +55 82-3177-5412 Rua Hidrogênio, 1404 - Polo Industrial de Camaçari 200 Big Sandy Road Camaçari Kenova, WV 25530 Mining ZIP Code: 42810-010 Phone: +1 304 453-1371 Av . Major Cícero Góes Monteiro, 2889, Phone: +55 71 3797 3865 Fax: +1 304 453-5916 Mutange, Maceió Fax: +55 71 3632 2206 ZIP CODE: 57017-515 Seadrift Plant CS 2 BA P.O. Box 105 BAHIA Rua Oxigênio, 765, COPEC - Polo de Camaçari Port Lavaca, TX 77979 UNIB 1 BA Camaçari Phone: +1 361 487-1100 Rua Eteno, 1561, Copec-Polo de Camaçari ZIP CODE:42810-270 Camaçari Phone: +55 71 3413 3344 Oyster Creek Plant ZIP CODE: 42810-000 P.O. Box 2168 Phone: +55 71 3413-2200 BA Office 2016 | Braskem | Annual Report 119

Freeport, TX 77542 COLOMBIA (office) Phone: +1 979 705-2650 MEXICO Braskem S.A. Sucursal Colombiana Calle 93 - 11A - 28 - Oficina 302 Braskem Idesa SAPI Technology and Innovation Center Edificio Capital Park 93 Boulevard Manuel Avila Camacho 36, Piso 24 550 Technology Drive Bogotá - Columbia Col. Lomas de Chapultepec Pittsburgh, PA15219 Phone +57 (1) 589-7074 CP 11000 Phone: +1 412 208-8100 México D.F Fax: +1 412 20-88205 CHILE (office) Braskem Petroquímica Chile Ltda. Coatzacoalcos Plant Houston Office Nueva de Lyon Nº 145 - Oficina 1204 Camino Petrolero El Chapo s/n, Km. 1.3 5100 Westheimer Rd – Suite 495, Edifício Costanera Lyon Col. Zona Industrial de Coatzacoalcos Houston, TX 77056 Providencia - Santiago - Chile Veracruz, Mexico Phone: +1 713 255-4747 / Phone +56 (2) 2482-7000 Fax: +1 713 255-4740 OTHER COUNTRIES NETHERLANDS (office) Pasadena Office Weena 200, 9Th floor Tower C 4949 Fairmont Parkway, Suite 101 ARGENTINA (office) 3012 NJ Rotterdam Pasadena, TX 77505 Braskem Argentina S.A. The Netherlands Phone: +1 979 705-2650 Carlos Pellegrini, 1149 - Piso 7º C1009ABW SINGAPORE (office) Ciudad Autónoma de Buenos Aires 8 Eu Tong Sen Street #22-89 GERMANY Buenos Aires - Argentina The Central, 059818 Phone +54 (11) 5275-6600 Singapore An der Welle 3 Phone: +65 6671 0431 60322 Frankfurt am Main VENEZUELA (office) Phone: +49 69 427 299 200 Av. Río Caura – Torre Humboldt, Piso 19, Oficina 1901, Urb. Prados del Este, 1080 PP 11 Wesseling Caracas Werk Wesseling Phone: +58 (212) 976-5025 Rodenkirchner Strasse 400 50389 Wesseling PERU (office) Phone: 49 2232 705 356 Braskem S.A. Sucursal Perú Av. Victor Andrés Belaunde, 280 - Oficina 603 PP 12 Schkopau San Isidro, Lima 27, Peru Werk Schkopau Phone +57 (1) 442-4241 PF 1163 06201 Merseburg Phone: +49 3461 54 740 200 2016 | Braskem | Annual Report 120

Credits

Vice President of People, Business Communication, Marketing, and Sustainable Development Marcelo Arantes

Corporate Communication Director André Vieira

Sustainable Development Director Jorge Soto

External Communication Supervision Carlos Eduardo dos Santos Mariana Fernandes Cardoso

G4-31 Sustainable Development Supervision Mario Pino FOR MORE Luiz Carlos Xavier INFORMATION ON Vinício Salotti THIS REPORT, PLEASE CONTACT [email protected] Analysis of Indicators, Project Development, and Content Production Keyassociados

Graphic Design and Layout Kite Estratégias Digitais

Assurance KPMG

Photos Braskem Collection

Translation Gotcha! Idiomas www.braskem.com