RESULTS 2020 Summary

2020 RESULTS OF OVERCOMING YEAR A SUSTAINABILITY REPORT Summary 1 2 3 FOREWORD CORPORATE CORPORATE FINANCIAL PROFILE GOVERNANCE PERFORMANCE 4 5 6 7 8 STRATEGY PEOPLE COMMUNITY ENVIRONMENT GRI CONTENT INDEX SUSTAINABILITY REPORT | 2020 FOREWORD Message from the Board of Directors ear 2020 ended a decade that tested Usiminas’ resilience in several ways. We Y have closed the period with results that show a quick and effective reaction capacity. Supported by the Board of Directors, Usiminas’ Executive Board took the lead in an effective work to meet and react to the extraordinary demands brought by the pandemic. The Board of Directors’ agenda, on the other hand, has been adapted to this challenging scenario. 29 meetings were held, whether in person or via video con- ference, to approve urgent matters. The Board has quickly approved the shutdown of the blast furnaces during the crisis – and later it approved them to gradually resume operations. Another 2020 issue was the corporate restructuring of Usiminas Mecâni- ca, which now focuses on providing services only to Usiminas companies. The Company’s good results, despite all hurdles, allow us to embark in this new decade looking to the future and build the company’s perpetuity. We are strongly engaged in Environmental, Social and Governance (ESG) matters, in line with the long- term sustainability strategy. 3 SUSTAINABILITY REPORT | 2020 We have strengthened measures that began to gain momentum over the past years. In For the second year in a row, per the Executive Board’s initiative, the Company’s report 2018, we created an independent integrity department reporting to the Board of Direc- has been improved according to the Global Reporting Initiative (GRI) standards, which tors, which enhanced Usiminas’ governance level. Since the program’s launch, we have now relies on external independent assurance, showing Usiminas’ commitment to trans- focused on its effectiveness. We have improved other governance aspects at Usiminas. parency. In the following pages, you will learn in detail about the continuous improve- ment efforts that the Usiminas’ team have made during 2020 for the benefit of employ- In the social field, the Board has supported the Executive Board’s initiatives to fight ees, communities surrounding our operations, our shareholders and the environment. the crisis created by the pandemic. Important actions have been taken focused on both our internal and external stakeholders. We have also advanced in creating our Diversity and Inclusion Program. The environmental field saw important achievements in controlling the Ipatinga steel works’ air emissions and the implementation of a new waste disposal system at the mining unit, which will replace the use of dams. Another highlight was the progress of ESG governance, through the Executive Board’s proposal to create a department that centralizes such important topic in the corporate agenda. I also emphasize that the executive officers should be even more engaged in this agenda. Around 20% of the Executive Board’s bonus will be related to ESG goals, according to the rules approved by the Board of Directors in February 2021, and amounts will be paid Ruy Hirschheimer in 2022. Other 2 advancements included in the 2021 agenda are the risk management structuring by the Board of Directors, by developing a Corporate Policy to define its com- Chairman of Usiminas Board of Directors petences and operation; in addition, besides, we will take stock of our CO2 emissions and have it certified by an external agency, as grounds for an emissions reduction plan. 4 SUSTAINABILITY REPORT | 2020 Message from the CEO | GRI 102-14 | he pandemic has had a huge impact on the corporate life, and for Usiminas, it was LGBTI+. For each of them, we have creat- taking stock of our emissions, which is T no different. Despite the hurdles, we took a series of measures quickly and, by the ed voluntary affinity groups, who discuss, expected to be finished by 2021, when end of 2020, we were able to build the company’s best result for the last 12 years. With- analyze and proposes actions for each we will be able to set long-term goals. We out losing sight of our employees’ safety and health standards, we advanced in our topic. Each group pillar has an executive have been Brazil’s flat steel market leaders competitiveness – specially in two pillars. One being cost reduction, an ongoing work officer who act as sponsor. for decades and expect to continue inno- for the Company. The other is the effort to improve customer service. In the automotive vating to maintain an updated product industry, a large portion of our products are delivered just in time to car manufacturers. Usiminas reinforces its commitment to portfolio. For the past 50 years, we have In order to render this service, one of our companies, Soluções Usiminas, Brazil’s largest the United Nations’ (UN) Global Com- kept innovating through our Research flat steel distributor and service center, plays a crucial part in cutting steel and deliver- pact and is a member of 4 action plat- Center launched 10 years after the Com- ing welded products to carmakers and other industries. forms for: water, climate, anti-corruption pany’s foundation. It was back then, in and communication & engagement. 1976, that I began my career at Usiminas. Environmental, Social and Governance (ESG), one of our strategic pillars, received an As part of the Company’s history and aim- important support with the creation of the Corporate Department of Sustainability on This year we began to advance in the ing at the future, I can affirm that we con- June 1, 2020, which reports directly to the CEO. We have also created a Sustainability Company’s strategic view planning for tinue to believe in Brazil’s capacity, in our Committee, which meets at least 4 times per year with the participation of all Executive 2030. This analysis definitely includes CO2 team’s efforts to add value, wealth and an Officers. emissions reduction. We are currently even better future. This is our pledge. In 2020, the Company has invested R$25 million in the environmental agenda. Most of said amount was invested to renew the Company’s machinery and adapt its efficiency standards from an environmental standpoint. In the mining business, in 2020, Usimi- nas received environmental authorization to implement a Dry Stacking Waste Disposal System, which, despite the pandemic, enabled us to advance our project to stop using waste dams in our operations. This project stands for innovation and view of the future. When construction works are completed, which is expected for 2021, Usiminas will stand in the global technology state-of-the-art. We have also made progress in the social sphere, where our initiatives have been market Sergio Leite de Andrade benchmarks for decades. One of the highlights is the Diversity and Inclusion Program, Usiminas CEO based on 5 pillars: gender, race & ethnicity, generations, persons with disabilities and 5 SUSTAINABILITY REPORT | 2020 About this Report siminas - Usinas Siderúrgicas de Minas Gerais S.A. - presents its Sustainability Report as Uregards the period from January 1st to December 31, 2020, providing transparency to its strategy and sustainability practices. | GRI 102-1; 102-50 | The Sustainability Report is published every year, with the last report published in 2020, referring to the year 2019. This document has been prepared based on the Global Report- ing Initiative (GRI) standards, the most complete and internationally known reporting standard. | GRI 102-51; 102-52; 102-54 | The GRI Content Index is available at the end of this report, including all information available in accordance with the GRI guidelines. | GRI 102-55 | In order to include a wider range of stakeholders, Usiminas began – preliminarily – to con- sider some requirements from the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD) in this report. In order to provide more assertive information to its stakeholders, the Company has de- signed a materiality exercise to guide the preparation of this report. From a preliminary survey of sustainability management aspects, according to the materiality of environmental, economic and social impacts, and their influence on the stakeholders, 12 priority topics have been identified (refer to the methodology in the chart below). 6 SUSTAINABILITY REPORT | 2020 Mindful of the importance of taking MATERIALITY concrete sustainability initiatives, Usimi- nas is aware of the United Nations’ (UN) 2030 Agenda and the 17 Sustainable Material topics for the consultation have been defined after a benchmarking made with frameworks, Development Goals (SDG) – a global plan ESG ratings, company’s peers and online survey with a selected audience. A broad survey on such topics developed in partnership with public has been conducted with the following stakeholders, who have been selected by the sustainability authorities, the academy, civil society and department according to the hired consulting company’s suggestions, with a total of 210 answers: the private sector. | GRI 102-12 | Board Customers Employees Communities 1% 71% 13% of Directors 2% In this report, references to Usiminas and Company include all companies in the group, including: Usiminas, Unigal Investor Sustainability Financial Suppliers Relations Usiminas, Mineração Usiminas, Usimi- Specialists 5% Institutions 1% 5% 1% Specialists nas Mecânica and Soluções Usiminas. The term “Usiminas Companies” can The outcome is the following materiality also be used in specific contexts. Addi- tional Information and clarifications of doubts on the contents of this report may be requested from the Usiminas’ Sustainability team at the email: [email protected]. Biodiversity Diversity, Greenhouse Gas Ethics and Corporate Water and and Use of Soil Equality and Emissions Transparency Governance Effluent | GRI 102-53 | Inclusion Management This Report was externally validated by BSD Consulting.

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