Annual and Sustainability Report JBS • 2019 06 About This Report 08 Message from Management 12 the Year's Highlights

Annual and Sustainability Report JBS • 2019 06 About this report 08 Message from management 12 The year's highlights

14 JBS: 112 Our Business: A global food company Care from every aspect 16 Profile 116 JBS Brasil 18 Mission and values 118 Business description 20 Global operations and business strategy 128 Performance 22 Governance and ownership structure 134 Products and services 32 Covid-19 and the JBS mission 150 Sustainability 34 Risk management Seara 36 Ethics and compliance 186 42 Our People 188 Business description 52 Value chain 190 Performance 64 Food safety and quality 194 Products and services 68 Innovation 202 Sustainability 72 Partnerships and associations 226 JBS USA Business description 74 Commitment to Sustainability 228 234 Performance 78 Materiality and stakeholder engagement 236 Products and services 88 Product integrity 244 Sustainability 94 Social responsibility 98 Environmental stewardship 274 Performance and Perspectives 106 Animal welfare 276 Financial result 278 Business units results 282 Achievements 284 Future outlook

286 GRI content index Contents Annual and Sustainability Report // 2019 • JBS

GRI 102-45 About GRI 102-46 The aim of this Annual and Sustainability Report is to provide updates on how GRI 102-50 the Company conducts business and carries out its mission of ensuring the best GRI 102-53 products and services for customers, a relationship of trust with our suppliers, this report GRI 102-54 profitability for our shareholders and the opportunity for a better future for all of our team members.

JBS has excelled in different scenarios, using In line with its operations, JBS recognizes a clear strategy of diversifying its business the importance of an open dialog with and geographic locations, with a strong stakeholders across the many sectors of the commitment across the entire food industry production chain. That is why the Company production chain and with a varied portfolio of has restructured the report to provide brands and products. updates by business unit. In chapters 1 and 2, the reader will find global information on With locations in 15 countries across best practices adopted and comprehensive a global production and distribution results achieved. Content in chapter 3 is more platform, JBS has over 400 production specific to each business. This will make it units and offices on five continents – possible to open up space for a discussion the Americas, Asia, Europe, Africa and that allows for a closer reading of each Oceania – serving over 275,000 customers topic: description of activity, operational in more than 190 countries worldwide, performance, sustainable practices, animal while meeting consumer needs, aligned welfare and product integrity. Major with local cultures and with operational themes, such as quality, innovation, savings, flexibility in each market. productivity, competitiveness, sustainability and governance, will therefore be discussed From the standpoint of sustainable management, one of the main goals at JBS Accounting results follow the International is to ensure the most efficient allocation Financial Reporting Standards (IFRS), issued by of capital. That is why our aim throughout the International Accounting Standards Board this publication is to discuss the factors (IASB), and are prepared by Grant Thornton that allow the Company to generate social, Auditores Independentes. environmental and economic value.

We reiterate our commitment This 9th edition of the Annual and Comments, suggestions, questions to conduct our operations Sustainability Report covers the Company's or criticism can be sent by e-mail to with a focus on high quality, activities and performance for the period of [email protected]. The Investor food safety and best January 1 to December 31, 2019, encompassing Relations area can be reached by phone sustainability practices across operations, business structure and responsible at +55 (11) 3144-4224 and by e-mail at the entire value chain governance practices. The process of drafting [email protected], while the Sustainability the report followed the Global Reporting area can be contacted by e-mail at Initiative (GRI) Standards: core option. [email protected].

Headquarters (SP)

6 7 Annual and Sustainability Report // 2019 • JBS Message from

management innovation platform allows us to monitor trends free cash flow of R$9.5 billion. Over the year, and leverage innovations in every region where we brought our financial leverage in US dollars we operate. From our day-to-day operations down to 2.13x. GRI 102-14 to building a portfolio that serves the needs of customers and consumers around the world, The solidity of these numbers has provided The certainty that we invest in sharing knowledge and accelerat- us with the ability to make substantial in- ing adoption of best international practices. vestments in advancing our strategy - as is comes from the the case with Pilgrim's acquisition of Tulip in right choices When combined, all of these elements form Europe in the second semester of 2019 and the base of our operational excellence, which is, Seara's acquisition in Brazil of Marba and In recent years, I've had the Determination and Discipline transformative actions in our in turn, converted into results. Financially, these Bunge, established producers of mortadella great satisfaction of sharing in to deal with challenges. When supply chain and the contin- achievements are represented by net revenue and margarine, respectively. the results and advancements these attitudes are multiplied ued evolution of our activities. of R$204.5 billion, EBITDA of R$19.9 billion and at JBS, especially the progress by our over 240,000 team The performance JBS has attained creates we've made in our sustainabil- members, this becomes a Focused on the sustainabil- value across the value chain and in Company ity policies and practices. In a powerful competitive edge, ity of our business, we have relationships: with team members, integrated year as fertile and victorious with the certainty that major made significant investments Gilberto producers, farmers and other suppliers, as well Tomazoni as 2019 was, this satisfaction is goals will be reached. in compliance, in developing as with customers, consumers and the commu- Global CEO even greater. systems and processes, and in nities where JBS is found, in a business part- Among the multiple aspects reinforcing a culture of com- nership offering opportunities for growth and Personally, being part of this at the core of our action and pliance, with the belief that development for everyone. story and helping to tell it at performance, two are partic- each team member serves to every possible chance, as in ularly strengthened by this multiply good practices. Our As a leader, we are especially pleased to see our this sustainability report, is collective vision: sustainability growth in this area is evident in team fulfilling our mission every day of pro- cause for joy. and innovation. the implementation of a due ducing food with passion, quality and humility, diligence system, developed seeking to be better and better at what we do. These results reflect the In sustainability, we are ex- by the Company in partnership accuracy of our strategy as a tremely proud of our role in with an international con- This message could end no other way but with global food platform and the helping to feed billions of sulting firm to assess supplier thanks to all of those who have helped along decision to continually invest people around the world. To reputation. In the last year, we the way, particularly our team members, pro- in developing and producing do this, we have undertaken have done over 9,000 analy- ducers and business partners. Successfully con- a wide-ranging portfolio of a commitment to produce ses using this system, making fronting the challenge of providing sustainable products and brands while food with the least possible partner contracts more reliable. food solutions to millions of consumers around growing the share of val- environmental impact and Also worth highlighting is our the world is only possible through the commit- ue-added products. by efficiently using resourc- team's total involvement - over ment and determination of these people. es - this has not only helped 45,000 training hours were These achievements and the to make JBS a benchmark in spent on compliance practices Finally, on behalf of the JBS team, I would like entire evolution of JBS are multiple respects, but also a in Brazil, with dozens of specif- to thank you for your interest in learning more sustained by deep roots that leader in advancing practices ic actions for leadership world- about JBS and our perspectives for guarantee- are translated into our Values. in this sector. wide in 2019. ing growing, sustainable and innovative pro- From the start, we've always duction over the coming years. acted according to Simplicity Our sustainability activities Innovation has been funda- and Humility, while also using work with three lines of action: mental to our growth strate- an Attitude of Ownership and a focus on what we can influ- gy and to improving margin. applying a strong sense of ence directly, leadership in Management of a global Enjoy your reading!

8 9 Annual and Sustainability Report // 2019 • JBS

The challenge of continuing to move forward Jerry O’Callaghan Chairman of the Board of Directors The success of JBS over recent In this sense, the role of the years, particularly in 2019, has JBS Board of Directors is come with constant evolution in to oversee and support the the Company's management. executive board in complying with the guidelines and poli- The Board of Directors is hon- cies that keep the Company's ored to play the role of support- growth in line with its purpose ing a company like JBS, which and values. Board members' has made significant progress diverse career experiences in matters beyond economic add to building harmonious and financial aspects. and relevant work, with active participation by the various Over the last year, we have committees supporting the closely monitored growth Board of Directors. in the Company's global Compliance program and By achieving an increasingly enhancement of risk control relevant global position, JBS management, in addition to is reaffirming its commitment ESG initiatives focused on rural to an efficient strategy, with a sustainability, while remaining global platform diversified by focused on social and gover- geography and protein types, nance issues. which ensures flexibility and guarantees adaptation to mar- JBS is already skilled at allo- ket demands. cating the right people to the right places, with the autono- For 2020, our dedication to an my to make decisions. Yet de- agenda of enhancement will fining clear roles and respon- remain firm, aimed at guaran- sibilities for management was teeing that year after year JBS also an important part of the continues to exceed mar- process of consolidating gov- ket expectations and make ernance at the Company. This a difference to its partners, has contributed to the Com- customers, consumers, team pany's excellent performance members and shareholders in its global operations. around the world.

10 11 The year's highlights Annual and Sustainability Report // 2019 • JBS Main indicators

R$ 698.82 million was invested in topics related to environmental stewardship. 2019 2018 2017 2016 2015

Financial and economic indicators - R$ millions CDP results for 2019 position JBS as one of the best The Incredible Seara range made Seara companies in its sector in all aspects measured: Brazil's first major food company to offer Net operating revenue 204,523.6 181,680.2 163,170.0 170,380.5 162,914.5 Climate Change, Water Security, Forests, a complete range of products made with Livestrock, Soy and Timber Products . Cost of products sold -172,577.2 -155,340.1 -139,397.7 -149,066.7 -140,324.2

Over 105,000 team members underwent safety training. 100% Gross earnings 31,946.4 26,340.2 23,772.2 21,313.8 22,590.2 plant-based protein. Gross margin 15.6% 14.5% 14.6% 12.5% 13.9% R$ 930.8 million was invested in food quality and 2,460 people safety, with over trained. Animal welfare: EBITDA 19,881.1 14,849.8 13,415.9 11,286.9 13,300.4 R$ 474,712,791 invested and Global Policy on Conflicts 19,542 people Approval of the trained. EBITDA margin 9.7% 8.2% 8.2% 6.6% 8.2% of Interest implemented worldwide. Approval and implementation of the Anti-Corruption Policy Over 1 million tons of waste Net earnings 6,068.4 25.2 534.2 233.6 4,640.1 is set for 2020. were reused, with 121,000 metric tons to generate energy. Net margin 3.0% 0.0% 0.3% 0.1% 2.8% In Brazil, the number of team R$ 59.6 million members with leave due was put toward energy Investments 5,854.5 1,742.7 2,426.4 3,649.0 5,637.9 16,075 professionals in the to accident who registered efficiency projects.. administrative area of JBS in with the Social Security Net debt 42,994.1 47,217.7 45,283.3 46,904.8 47,038.7 Brazil, representing 94% of total system was down by 137,165 people administrative staff, received Operational cash flow 17,098.4 11,466.6 8,698.4 3,667.4 7,384.8 were trained in anti-corruption training, with 8,084 hours development programs, of training. Free cash flow 9,502.7 4,545.6 2,092.0 18.4 1,746.9 24.2% 11% more than in 2018. drop in water Social environmental indicators 116,645 people were JBS monitors an area of consumption trained in the Code of 450,000 km² in the per ton of Number of team members 242,105 230,086 233,797 237,061 227,168 Conduct and Ethics, which Amazon, to guarantee 3.9% product Total GHG emissions, by weight comprises 98.4% of the JBS the origin of raw 4,593,547.51 4,379,351.82* 5,504,609.52* 6,553,358.36 4,445,098.00 team in Brazil, with 37,432 materials sourced from (tCO2e) - Scope 1 hours of training. cattle suppliers. R$ 32 million R$ 129 Total GHG emissions, by weight was globally million 1,615,547.85 1,550,524.56* 1,780,515.80* 1,814,793.76 1,779,980.77 invested in social invested in (tCO2e) - Scope 2 R$ 698.86 million Due diligence: 9,486 analyses responsibility and wastewater was invested globally Volume of water captured were done by JBS software. sponsorships. treatment. 174,973.80 176,125.68* 180,396.18* 190,961.16 165,606.00 in health and safety, up (thousands of m³)

Global investments in innovation surpassed R$ 120.5 million. Investments in environmental 133% stewardship and improvements 698.82 721.10 806.50 855.20 716.60 Global investments by JBS in sustainability totaled R$ 1.90 billion. (R$ millions) year-over-year. * Revised numbers in relation to the last report.

12 13 JBS A global food company

Profile Covid-19 Food safety and the and quality JBS mission Mission and Values Innovation Risk management Global Partnerships operations and and business Ethics associations strategy and compliance

Governance Our People and ownership structure Value chain 14 Annual and Sustainability Report // 2019 • JBS

Profile GRI 102-1 GRI 102-3 GRI 102-10

JBS is the largest animal protein company and second largest food company in the world. Because of its global production platform diversified by geographic location and protein types, the Company Friboi and Seara brands. Confiança, Pena Branca, has greater access to raw materials. Friboi has 37 production Marba, Wilson, and Macedo. units and five feedlots spread Working to process animal JBS has a widely diversified throughout regions with The brand is also exported protein and value-added product portfolio, from fresh intensive livestock farming, to more than 100 countries, products in the beef, pork, and frozen meats to ready- guaranteeing broad access especially in the Middle East, lamb and poultry segments, to-eat (prepared) dishes, to raw material. Europe and Asia. the Company also operates with leading brands that are related businesses, such as recognized for excellence and As the best-selling Brazilian Aligned with the strategy of leather, biodiesel, person- innovation in-market, such beef brand in the foreign adding value to the produc- al care and cleaning, solid as: Friboi, Just Bare, Pilgrim’s market, Friboi product of- tion chain, JBS Brasil is found waste management solu- Pride, Plumrose, Primo, Seara ferings serve a wide variety in the leather segment, where tions, and metal packaging. and Swift. of consumer profiles and it is a global leader, which cur- needs, such as the epony- rently has 21 production units With locations in 15 countries Company operations in the mous Friboi, Reserva Friboi, and three cutting units, with a and over 400 production United States, Australia, Can- Do Chef Friboi, Maturatta Fri- production capacity of 84,000 units and commercial offices ada, Mexico, Puerto Rico, the boi, 1953 Friboi, Bordon and hides daily in Brazil, Argentina, on five continents (the Amer- United Kingdom and Main- Anglo, among others. Uruguay, Vietnam, Germany, icas, Asia, Europe, Africa and land Europe are controlled Italy, USA and Mexico. Oceania), JBS serves around by JBS USA, which includes Seara is the country's second 275,000 customers, in over the JBS USA Beef, JBS USA largest chicken and pork JBS also has related business- 190 countries, ranging from Pork and Pilgrim's Pride Cor- meat producer and exporter. es in the food sector. In Brazil, supermarket chains to small poration (holder of the Moy It has 30 poultry and eight through JBS Novos Negócios, retailers, wholesale clubs and Park and Tulip operations, pork processing plants, in there are 11 business units food service companies. with production units in the addition to 20 prepared which mostly use by products United Kingdom, France, the foods units. – including biodiesel, collagen, With over 240,000 team Netherlands and Ireland) pharmaceutical inputs, per- members, the same sustain- business units. See more at Seara products are sold sonal care and cleaning items, ability (economic, social and https://sustainability.jbssa. under brands that are widely animal nutrition ingredients environmental), innovation, com/chapters/who-we-are/ recognized for their quality, and natural casings. JBS Novos quality and food safety guide- about-our-company/. notable among which Negócios also offers comple- lines are followed in every re- are Seara, Seara Gourmet, mentary services and prod- gion, adopting best practices In Brazil, the Company Incrível Seara, Seara ucts to the Company's value based on the Company’s mis- develops beef, poultry, Nature, Rezende, LeBon, chain, such as metal packag- sion and values and a focus pork and prepared food Doriana, Agrovêneto, Massa ing, trading, environmental on operational excellence. businesses, split among the Headquarters in Leve, Excelsior, Frangosul, management solutions and São Paulo (SP) transportation services.

16 17 Annual and Sustainability Report // 2019 • JBS Mission and Values

GRI 102-16

OUR MISSION To be the best in all that we do, completely focused on our business, ensuring the best products and services for customers, a relationship of trust with our suppliers, profitability for our shareholders and the opportunity of a better future for all of our team members. OUR VALUES:

Ownership OUR Determination BELIEFS: Discipline • Focus on details Availability • Take a hands-on approach • Our achievements are based on hard work Simplicity • The right person in the right place • Passion for what we do Sincerity • Attitude is more important than knowledge Humility • Leaders must gain their team's trust • Lead by example • Focus on results • Work with people better than us Sônia Maria C. Monteiro (Feed plant), Ederson Rodrigo Blanc • Belief makes the difference (JBS Transportadora) e Éder José da Rosa (deli meats) Team members at the Montenegro unit (RS) • Product quality

18 19 Annual and Sustainability Report // 2019 • JBS Global operations and business strategy GRI 102-4 GRI 102-6 GRI 102-7

Locations in 15 countries and over 400 production units and commercial properties on five continents (the Americas, Asia, Europe, Africa and Oceania).

Beef 3% CANADA 7% EUROPE Pork 48% UNITED STATES Poultry 17% ASIA

Lamb 4% MEXICO

Leather 3% AFRICA AND 14% BRAZIL MIDDLE EAST Commercial property 3% AUSTRALIA AND NEW ZEALAND Products 1% SOUTH Prepared Food AMERICA

% of consolidated revenue: domestic sales and imports

20 21 Governance and Annual and Sustainability Report // 2019 • JBS Shareholder and corporate structure ownership structure Last updated on December 31, 2019

GRI 102-5 GRI 102-10 GRI 102-18 39.78% Controlling Group Aimed at enhancing the governance structure and assuring (J&F + Formosa) 21.32% transparency in all relations, JBS continually promotes refinement Brazilian of its corporate practices, creating an environment of trust with 100% Development shareholders, investors and other stakeholders. Controlling Group Bank (BNDES) + Free Float 2.33% Treasury shares The governance structure at governance practices beyond JBS is made up of the Board those required by law. Board of Directors, the Global Com- members are elected at a pliance Department, a per- general shareholders' meet- manent Fiscal Council and ing to serve unified two-year Headquarters in advisory committees to the terms and they are responsi- São Paulo (SP) Board of Directors, who focus ble for determining business 36.57% on specific topics including: policies and guidelines as Other minority shareholders sustainability, auditing, finan- well as economic, social and cial and risk management, environmental commitments, governance and stakeholders. among other matters.

There are also three strategic The Company's Chairman of areas, reporting directly to the the Board and CEO, positions Global CEO: Food Safety and held by different people, both Quality; Global Sourcing; Hu- receive fixed monthly com- man Resources and Center of pensation based on their job Excellence; and Innovation. performance. No payments are made by way of direct or The Board of Directors is the indirect benefits or profit shar- Company's highest gover- ing. Compensation for other nance body. At the end of leadership positions at JBS is 2019, there were nine mem- based on performance indica- bers serving on the board, tors, in an effort to encourage including four independent sustainable growth of the or- members, which is above the ganization in the medium and minimum set forth in regula- long term, while also reaching tions for the B3 Novo Mercado short-term targets. Pay is peri- – the segment in which JBS odically compared with mar- shares are traded, which con- ket practices, and in line with tains companies committed the interests of the Company to compliance with corporate and its shareholders.

22 23 Annual and Sustainability Report // 2019 • JBS

While Novo Mercado rules stipulate that 20% of board members be independent, Headquarters in São Paulo (SP) independent members make up 44.4% of the Company's Board of Directors. Moreover, the Company's capital consists solely of common shares, giving all shareholders equal rights, with tag-along rights given to all in the event of transfer of Company control.

JBS shares are included in the theoretical portfolios of the following B3 indices:

• Special Corporate Governance Stock Index (IGC) • Special Tag-Along Stock Index (ITAG) • Brazil 100 Index (IBrX 100) • Brazil 50 Index (IBrX 50) • Brazil Broad-Based Index (IBrA) • Carbon Efficient Index (IC02) • BM&FBovespa Consumer Stock Index (Icon) • Valor BM&FBovespa Index (IVBX-2) • MidLargeCap Index (MLCX) • Corporate Governance Trade Index (IGCT) • Novo Mercado Corporate Governance Equity Index (IGC-NM) • BM&FBovespa Industrials Index (INDX) • Ibovespa Index

1 The Company ceased to be part of the Valor BM & FBovespa (IVBX-2) index in January 2020.

In the United States, JBS shares are of the capital markets and traded on the OTCQX over-the-counter specialized media outlets. market as Level 1 American Depositary Receipts (ADRs). The Company Total subscribed and paid-in communicates with shareholders and capital is R$ 23,572.6 million, investors through the Investor Relations divided into 2,728,747,412 area, which has its own website (https:// common shares. Each ri.jbs.com.br/en/) and periodically common share equals one releases results, through phone vote in General Shareholder conferences and events with members Meeting resolutions.

24 25 Annual and Sustainability Report // 2019 • JBS Global Management Structure

BOARD OF DIRECTORS PPC Gilberto Tomazoni Global CEO

Alfred Al Almanza Eduardo Noronha Vicente Zuffo Global Head of Food Safety Global Head of HR and Global Sourcing and Quality Operational Excellence

Jayson Penn André Nogueira Guilherme Cavalcanti Wesley Batista Filho* Global CEO PPC CEO JBS USA Global CFO JBS S.A. CEO JBS Brasil

Tim Shannon Rodrigo Brent David Bob Krebs Thomas Wesley Renato Nelson Guilherme José Schellpeper Grassl Horvath Eastwood Colwell President Lopez Batista Costa Dalcanale Motta Roberto President President President President President JBS USA President Filho* President President President Tambasco JBS USA JBS USA JBS Carriers JBS JBS Canada Pork Plumrose President Friboi JBS Novos JBS Couros President Fed Beef Regional Australia Seara Negócios Swift Beef * Joanita Karoleski was president of Seara until January 2020.

26 27 General Shareholder Meeting Annual and Sustainability Report // 2019 • JBS

As the highest body in the Governance structure, it holds powers to decide on Company business and propose solutions that are suited to its development. Members meet annually as well as on an ad hoc basis as necessary, to elect members to the Board of Directors, consider ac- Board of Directors counts submitted by administrators and financial statements, decide on disbursement of the fiscal year's net income and distribution of dividends, among other matters. There are currently nine members serving The members of the Board of Direc- on the JBS Board of Directors: one president, tors are elected at the general share- Board of Executive Officers one vice president, three permanent directors holder meeting to a unified two-year without a specific title and four independent term and are eligible for reelection. directors. During periods of absence or tempo- They are also subject to removal at This body is responsible for conducting the general business of JBS as well as for deliberative rary unavailability of the president, the presi- any time, with or without cause, at processes and implementation of policies and guidelines, as periodically established by the Board dent’s activities will be performed by another a general shareholder meeting. JBS of Directors. Members of the Board of Executive Officers are elected by the Board of Directors to member of the Board of Directors, as appoint- does not elect alternate members to serve three-year reelectable terms. The Board of Executive Officers may remove any director at ed by the president. the board. any time, with or without cause. Pursuant to Law 6.404/76, directors must reside in Brazil, but they need not be Company shareholders. The JBS Board of Executive Officers meets whenever called The Company’s Board of Directors is the The Board of Directors meets once by the Chief Executive Officer or by the majority of its members. body responsible for, among other matters, each quarter and at any time when establishing policies and guidelines for the an extraordinary meeting is called by businesses and their implementation by the the president or by any other mem- On December 31, 2019, the members of the Board of Executive Officers were: Board of Executive Officers. According to Law ber. Each board member is entitled to 6.404/76, the Board of Directors is also respon- vote on this body's resolutions, which • Gilberto Tomazoni: Chief Executive Officer sible for hiring independent auditors. are made through a majority of votes. • Jeremiah O‘Callaghan: Director without a specific designation • Eliseo Santiago Perez Fernandez: Director of Administration and Control • Guilherme Perboyre Cavalcanti: Chief Financial Officer and Investor Relations Officer • Wesley Mendonça Batista Filho: Director without a specific designation

Fiscal Council 1

This is an independent man- In this first year serving on the agement body of external auditors, which is able to func- Board of Directors, I have found tion in both permanent and JBS to be a company with non-permanent capacities. The • Adrian Lima da Hora: President excellent managerial competency Fiscal Council is responsible • José Paulo da Silva Filho: Member and which holds quality as a fundamental for monitoring management • Demetrius Nichele Macei: Member tenet of its operations. The Company is activities, providing opinions on • Maurício Wanderley Estanislau da Costa: Member experiencing a cycle of major possibilities proposals made by administra- • Marcos Godoy Brogiato: Alternate Member to evolve in various dimensions and its tion bodies for submission to • André Alcantara Ocampos: Alternate Member José Guimarães main strength is its corporate culture: the the General Shareholder Meet- • Sandro Domingues Raffai: Alternate Member Monforte people in contact with me during this time ing for consideration, examina- • Francisco Vicente Santana Silva Telles: Alternate Member partner at Emax convey engagement and enthusiasm. tion of accounting statements, Consultoria and “One of the Board's main areas of focus in and reporting to administrative [1] The Fiscal Council is made up of at least 3 (three) and at most 5 (five) sitting members and alternates in the same number, shareholders or not, liable to be a member of the 2019 was appropriate and fundamental bodies and the General Share- elected or dismissed at any time of the General Meeting. Board of Directors oversight of environmental, social and holder Meeting of any errors, since April 2019 governance actions and policies." fraud or crimes it discovers.

28 29 Annual and Sustainability Report // 2019 • JBS

Jeremiah O'Callaghan José Batista Sobrinho Aguinaldo Gomes Ramos Filho Board of Directors Committees Chairman Vice President Member Sustainability Committee Financial and Risk Management Committee Having worked in the meat The Board's current Vice With experience in the beef Advises the Board of Directors in relation Assists the Board of Directors and Executive industry since 1983, he is President, he is one of the sector in Brazil and Latin to sustainability risks and opportunities. Officers in analyzing the impacts of the global a specialist in global trade founders of JBS and has over America, he began his career Accordingly, the committee is respon- economic scenario on JBS’ financial policy. The strategies for the sector. He 50 years of experience in beef with the Friboi sales team. sible for connecting all topics related Committee acts in order to improve rules and started at JBS in 1996, de- production development He has led operations at JBS to the Company's business in a global procedures for the control and management of veloping the International at the Company. He also Uruguay and JBS Paraguay, perspective, including: identification, ad- market and credit risks, in addition to helping Business area. For 10 years, currently serves as an effective where he spearheaded the dressing and treatment of critical issues mitigate other risks to which the Company is he served as the Director of member of the Board of project to build Latin America's that result in risks or impacts on busi- naturally exposed. There are four members on Investor Relations at JBS, rep- Directors for the Eldorado most modern meatpacking ness; monitoring and implementation of the Committee. resenting the Company with Brasil Celulose S.A. company. plant. He is now the CEO at VL policies, strategies and specific initiatives; its local and international Participações, which operates and evaluation of proposed sustainability Compensation and Governance Committee investors and stakeholders.. in agribusiness.. investments. There are four members on An internal advisory body, plays a technical role the Committee. aimed at implementing practices and polices Gilberto Meirelles Wesley Mendonça José Guimarães Monforte* based on the highest international standards of Xandó Baptista Batista Filho Member Audit Committee corporate governance and compliance, in addi- Member Member Advises the Board of Directors on the tion to monitoring compliance by the Compa- A partner at Emax Consultoria, norms, rules and procedures for dis- ny with these practices and policies. There are With his significant multidisci- He began his career at JBS 10 Chairman of the Board of Di- closure and transparency of Financial three members on the Committee. plinary experience, he developed years ago as a trainee. In South rectors at Eletrobrás and of the Statements, in addition to being respon- a career in the Finance, Control, America, he was responsible for Advisory Boards of Premix and sible for evaluating the performance of Related Parties Committee Trade Marketing, Marketing, Asian exports and later served Instituto Elos. He is a member internal control systems and internal and Aims to ensure that the transactions of JBS and Sales (Brazilian and Foreign) and as the Head of operations at JBS of the Board of Directors at external audits. The Audit Committee its subsidiaries and affiliates, involving related Business Unit Management ar- Uruguay and JBS Paraguay. He Cyrela and has worked as an reviews the work conducted by the inter- parties are performed taking into account the eas at the Natura, Sadia S.A. and served as the President of JBS executive at companies such as nal audit team on an annual basis and best interest of the Company, under normal Coopers & Lybrand companies. operations in Canada and led BANESPA, Banco Merrill Lynch, approves guidelines and action plans for market conditions, negotiated independently, He was the CEO of Vigor Alimen- the beef operations in Canada Banco Citibank NA, VBC Ener- the current year. There are three mem- through a transparent and ethical process, in tos S.A. until December 2019 and the United States. He is gia S/A and Janos Comércio, bers on the Committee. accordance with current laws and on terms not and is currently a member of the currently the President of JBS Administração e Participações less favorable to the Company than a transaction Board of Directors of Itambé. Brasil and Seara. Ltda., in Brazil and abroad. held with third parties that are not considered related parties, under the same circumstances or in similar scenarios. There are three members on Márcio Guedes Pereira Júnior* Cledorvino Belini* Alba Pettengill* the Committee. Member Member Member

A partner at Pangea and Having worked for 44 years Dedicated to the food industry a Director of the Brazilian at Fiat, he served as the for over 30 years, she is a spe- Financial and Capital Markets automaker's chief executive in cialist in production processes. Association (Anbima). He Brazil and Latin America over She is the founder and Presi- led the investment banking 11 years, from 2004 to 2015. dent of the Paraguayan Meat group at Banco J. Safra and He was also the President of Chamber and is a member of also served as the director Brazil's National Association of the Steering Committee of the To see the Committee's Internal Procedures of investment banking at Motor Vehicle Manufacturers Rural Association of Paraguay By-Laws and members, visit: Unibanco, CitiGroup and Credit (Anfavea), from 2010 and 2013. and the Animal Health Com- https://ri.jbs.com.br/en/esg-investors/corpo- Suisse. He has vast experience mission of Paraguay, where she rate-governance/board-council-and-committees/ with M&A and Capital Markets. owns land. * Independent member

30 31 Annual and Sustainability Report // 2019 • JBS

New safety Expansion of the bus and van ∙ Transportation - and protective Covid-19 fleets that carry team members and sanitation equipment and disinfection of vehicles in the periods items between trips, assigned seating and other and the control measures. ∙ Control - Control of everyone's temperature JBS mission and hand cleaning upon accessing the plants and during production shift breaks, with an abundant supply of soaps, sanitizers In addition to the top priority of its team mem- and hand sanitizer for all employees. bers' health, JBS is fully dedicated to supporting The Company has also started free H1N1 the fight against the coronavirus and will donate In early 2020, humanity vaccination for all team members. R$ 700 million exclusively for use against the began to face the ∙ Sanitation - Daily disinfection of all facilities Covid-19 pandemic. Covid-19 pandemic, (internal and external). possibly the greatest ∙ Distancing - Application of rules and clear In Brazil, this plan stipulates donation of R$ 400 global challenge in recent Safe distancing signage to prevent agglomerations and pro- million in three areas: public health, social care and decades. Committed to mote safe distancing among team members. support for science and technology. These funds its mission of feeding Demarcation and spacing, with controlled will go toward directly benefiting 162 municipalities people around the world, access at gates, in locker rooms, in leisure areas and 17 states with donations of masks, personal and in other areas. protective equipment, food kits, ICU beds, construc- JBS took measures to Procedures were defined according to healthy agencies and ∙ Cafeterias and breaks - Creation of new tion of hospitals and more. Special committees protect the health of its according to protocols defined by the Ministries of Agriculture, routines and alternating times, implementing have been created to validate the projects and team members, while at Health and Labor, in addition to standards in effect at the state distancing rules, installing dividers and visual resources to be delivered within the various spheres the same time adopting a and municipal levels. Additionally, the Company contracted signage, and requiring the use of masks until of the project, containing independent members rigorous disease control specialized medical consulting from Hospital Albert Einstein, a meals begin. who are specialists in their areas of action. and prevention protocol reference in Brazilian medicine, which has provided support for ∙ Personal Protective Equipment (PPE) - at its units to keep constant enhancement of the measures the Company has imple- Implementation of new protective equipment, Abroad, JBS will earmark R$ 300 million for operations running. mented at its units and other facilities. such as ninja-style masks, acrylic face-shields local communities, mostly in the United States, and fabric masks in the administrative area. to support food assistance and critical infra- Notable among actions included in the protocol adopted by JBS are: Mask use is required by everyone in all structure, such as supplying personal protective Company areas. equipment (PPE) for paramedics, as well as for ∙ Risk Group - Leave granted to all team members belonging to risk groups - those aged 60 and ∙ Other measures - Creation of emergency efforts to combat COVID-19. over, pregnant women and people with a medical condition. Team members showing signs of a protocols for any team member showing cold, those with a medical recommendation and those who have tested positive for Covid-19 should symptoms. In the event that a team member The company has been carrying out other actions also be granted leave. In all cases, team members' benefits are guaranteed and they receive care tests positive for Covid-19, the Company will since the start of the pandemic through "Good and comprehensive assistance from the Company. provide immediate care and comprehensive Deeds Are Good", its nationwide Social Responsi- ∙ Information and awareness - Clear and follow-up for the team member and their bility program. JBS sent 200 metric tons of prod- permanent communication using family until they recover. During this time, ac- ucts - including food and hygiene and cleaning audiovisual media, murals, internal radio and cording to health agency guidelines, the team items - to hundreds of organizations, hospitals media outside of the factory environment, member will be placed on leave and will only and communities in over 100 municipalities with campaigns to raise awareness on this return pending medical/clinical approval. Full in Brazil. The Company also delivers protective topic, including: guidance on prevention disinfection and additional sanitation of com- materials and uniforms to the different locations measures adopted by the Company, such mon areas and the location where the team where it maintains operations, in addition to as correct hand cleaning and use of hand member works are also part of the Company's having produced and donated another 2 million Front gates – sanitizer, mandatory mask use, social protocol, along with comprehensive monitor- bars of soap to homes for the elderly, institutions Organization of accesses distancing, PPE use and others. ing of team members. supporting vulnerable populations and hospitals.

32 33 Annual and Sustainability Report // 2019 • JBS

Risk management GRI 102-11

The Risk Control Department structure is responsible for identifying, Based on the guidelines of the Financial Risks and Commodities Management assessing, mitigating and monitoring the financial risks inherent to Policy, as approved by the Board of Directors, this area also supports operational JBS operations. units in identifying and monitoring risks specific to their own activities, supported by specialist staff and specific systems.

The matrix below lists the risks JBS has identified by category and severity level, as well as the efforts made to mitigate them.

Main financial and socio-environmental risks

Category Types Definition Mitigation method

Financial risks Market Market Currency, interest rate and commodity price risks Exposure is mapped in real time. when price fluctuations could affect JBS businesses. Hedging instruments, including derivatives, are used, subject to approval from the Board of Directors.

Credit The risk of default on accounts receivable, financial Accounts receivable: portfolio is diluted and secure credit parameters are set (always based on proportional limits, financial investments and hedge contracts. and operational ratios and credit agency queries).

Financial transactions with financial institution counterparties: exposure thresholds are defined by the Risk Management Committee and approved by the Board of Directors, based on international rating agency classifications.

Liquidity The possibility of imbalances appearing between negotiable Capital structure management focuses on immediate, modified liquidity metrics - i.e. cash on hand and financial assets and enforceable liabilities that could affect the ability investments, divided by short-term debt - and working capital, to maintain leverage for the Company and its subsidiaries. to fulfill future financial obligations. In 2019, a Liquidity Management Policy was published, establishing guidelines for the liquidity management process at the Company and its subsidiaries, in Brazil and abroad.

Social and Raw material The risk of purchasing raw materials from suppliers involved Cattle purchases: adopt and notify the market of the social and environmental criteria adopted for purchases and support in deforestation of old growth, invasion of protected areas for the use of best farming practices. In Brazil, supplier farms located in the Legal Amazon States are monitored using environmental procurement – such as indigenous land or environmental conservation a geospatial system capable of identifying non-conformities and barring raw material purchases from non-compliant units - use of child or forced labor or products that could suppliers. (https://jbs.com.br/en/sustainability/product-integrity/cattle-responsible-purchase/) risks pose a risk to consumer health. Poultry and pork: the Company’s integrated relationship with animal breeders assures the origin and quality of raw materials. Suppliers are visited periodically and are audited to ensure production practices are in line with the criteria established by JBS. (https://jbs.com.br/en/sustainability/product-integrity/relationship-with-poultry-and-pork-suppliers/)

Product quality: a global area dedicated to monitoring all production processes, which are audited internally by various regulators and customers to maintain high food quality and safety standards and remain eligible to serve all markets. (https://jbs.com.br/en/quality/home/ )

Climate change Climate change could have a negative impact on the We monitor the environmental impacts from direct (industrial, logistics and shipping) operations, taking steps to minimize Company’s businesses. Resources like water, electricity and these impacts on the Company’s own and its suppliers’ operations. Monitoring involves taking a global inventory of direct and animal feed (which is dependent on farming) are critical for indirect GHG emissions using the international GHG Protocol methodology. The results of the inventory are published annually production of raw materials (cattle, poultry, pork and lamb). on the CDP platform. JBS also monitors indicators representing the volume of water and electricity used by its operations in order to optimize production processes and gradually reduce consumption. To reduce impacts of its operations and create Businesses could also be affected by new legislation and opportunities, the Company has an annual plan to invest in environmental improvements aimed at optimizing use of natural regulation in this area. resources, water and waste energy recycling and other issues. Water risks were also mapped for JBS USA operations, with the help of the Aqueduct tool, from the World Resources Institute (WRI). (https://jbs.com.br/en/sustainability/environmental-management/climate-changes/)

34 35 Annual and Sustainability Report // 2019 • JBS Ethics and compliance

Since 2017, the Company has had an independent global department at the forefront of the compliance topic, reporting directly to the Board of Directors. The Company monitors the maturity of processes and assesses the efficiency of actions adopted year after year, in every region where it operates. In this sense, 2019 was an important year for upper management to reiterate a commitment to continual improvement processes implemented.

All practices and policies related to compliance are available in the Code of Conduct and Ethics (https://jbs.com.br/en/compliance-en/ In 2019, the Company continued codes-and-policies/codes-of-conduct/). This doc- to spread its "Always Do the Right With each ument provides guidelines for team members to Thing" program in every sphere work in compliance with the Company in every of the business. This initiative was training cycle, situation, outlining the behavior and conduct built to foster an environment acceptable and required by JBS. The Code, avail- of ethics and integrity in all training makes them curious able in Portuguese, English, Italian and Spanish, Company processes, following and, more than anything, was created to consolidate and unify the global local and international guidelines confident. They understand guidelines in place at the different JBS opera- on the following pillars: that this closer relationship is tions around the world. The Company also has a Business Associate Code of Conduct (https:// • Risk assessment a plus and that they can speak jbs.com.br/en/compliance-en/codes-and-policies/ • Leadership and governance their minds, ask questions codes-of-conduct/). Third parties carrying out any and even complain. They are kind of transaction with JBS, such as customers • Policies and procedures “confident that all issues will and suppliers, must follow this Code. • Ethics hotline be taken seriously and, above all, the entire team is available • Controls and transparent." • Training and communications • Third-party due diligence • Assessment, oversight and discipline

Ana Cláudia Fernandes HR Manager in Amparo (SP)

36 37 Annual and Sustainability Report // 2019 • JBS

Amparo (SP) Training

JBS held their first compliance professionals exchanged ideas with 116,645people partici- Items, Gifts, Travel and Enter- The Company also invests in The Company has also meeting, in partnership with and experiences over eight pating, which accounts for tainment Policy and a new the Supplier Training Program. adopted internal policies, J&F, at the Company's head- hours, in an effort to enhance 98.4% of JBS team in Brazil policy, the Third Party Due Dili- The 10 largest carriers with which must be adopted at quarters in São Paulo. The their knowledge of compli- and 37,432 training hours.. gence Policy, was launched. whom the Company holds every Company unit. The event was attended by around ance programs and good contracts for transportation Global Policy on Conflicts 150 participants, including corporate governance prac- Anti-corruption training was Throughout the year, over went through a pilot program of Interest was approved team members from JBS and tices. Another topic discussed held in Brazil for administra- 9,000 reputational analy- in 2019. With this training, they and implemented from other group companies, was the role of compliance in tive staff, with 16,075 people, ses were done on suppliers, understand and are commit- worldwide. The Anti- in addition to market pro- fighting corruption. or 94% staff participation, including not only a historical ted to the rules and policies of Corruption Policy is in the fessionals, who gathered to taking part in 8,084 training assessment of partners, but JBS in Brazil, as well as what approval phase and should debate challenges and trends The Company also focused hours. Single-topic training for also of their respective associ- is expected of them as suppli- be implemented in 2020. of compliance in Brazil. The its activities on training and specific teams was also de- ates, making contracts more ers. The goal of the initiative, The Company also carried Global CEO of JBS, Gilberto education for team members, veloped, such as competition reliable. This was done using a which is still under develop- out a review of existing Tomazoni, and the Chairman aimed at reinforcing guide- compliance for those working tool developed by JBS in part- ment, is to continue in 2020 controls and created of the Company's Board of Di- lines and ratifying a culture of directly with public sales. nership with an international with the entire value chain to new controls to verify rectors, Jeremiah O'Callaghan, compliance. A series of train- consulting firm, allowing for encourage transparency and compliance with internal were also in attendance. Some ing sessions on the Code of To build on existing policies, a comprehensive analysis of integrity as strategic elements rules and scenarios for any of the Brazil's top compliance Conduct and Ethics were held, JBS revised the Promotional partners' reputations. of the business. breach of rules.

38 39 Other initiatives developed in 2019: Annual and Sustainability Report // 2019 • JBS • Launch of a global compliance website (https://jbs.com.br/en/compliance-en/), dedicated to Company activities in this area; • Internal communications campaign; • Risk assessment for controls and rules for each business.

Business Pact for Integrity and Against Corruption (Ethos) GRI 102-12 GRI 102-13 Policy for Offering and Receiving JBS has been a signatory to the Instituto Promotional Items, Ethos Business Pact for Integrity and Gifts, Travel and Against Corruption since 2018. This Entertainment initiative aims to join companies with the goal of promoting a market of greater integrity and ethics and to Updated in August 2019, matters related to compliance. Members eradicate bribery and corruption. In the Policy for Offering and of the Institutional Ethics Committee, the last year, the Company also signed Receiving Promotional Items, which meets on a quarterly basis, include the Business Movement for Integrity Gifts, Travel and Entertainment the CEO of JBS in Brasil, Administrative and Transparency. The movement provides rules on exchanging Director, Legal Director, HR Corporate encompasses creation by business gifts and entertainment Director, one of the Company's BU sectors of conditions to deepen and between the Company's Presidents (rotating seat) and the Global consolidate integrity programs, risk team members and partner Compliance Director. This committee management and anti-corruption companies. The new guidelines carries out a variety of activities which activities, while also demanding provide more security, control are defined and pre-established in the enhancement of laws. and transparency in relations internal policy, such as discussing and for the Company's business resolving highly relevant grievances partners in Brazil and for the received and considering progress made purpose of the gift offered and/ in the compliance program. Compliance Highlights 2019 or received. • 37,000 hours of training in the Code of Conduct and Ethics, with more than JBS Ethics Hotline 115,000 team members in Brazil. Ethics Committees The JBS Ethics Hotline guarantees • Over 8,000 anti-corruption training JBS Brasil has five business transparency in internal and external hours for more than 16,000 team Ethics Committees (Friboi, relations. The hotline is consolidated, members, through an online platform. Seara, Swift, JBS Couros and JBS well-structured and fully outsourced Novos Negócios) and one Insti- – which protects and guarantees user • Due diligence: In 2019, 9,486 analyses tutional Committee. Process im- anonymity. It is available everywhere in were done by JBS software. When provements were implemented the world where the Company is located, any nonconformance is found in a across these committees. in 4 languages, 24 hours a day, 7 days a supplier assessment, the supplier is week, and it is a fundamental part of the automatically barred and undergoes The business committees meet Company's compliance program. This a second verification procedure by the on a quarterly basis to discuss channel is the chief vehicle for grievances compliance area. the most relevant grievances related to irregularities and violations Team member Tayna Santos, from received via the Ethics Hotline, of the Company's Code of Conduct and Heardquarters (SP), reading the • In 2020, there will be training on topics jointly establishing solutions Ethics, both for its team members and Code of Conduct and Ethics such as conflicts of interest and a in addition to resolving other JBS's external public. review of anti-corruption content.

40 41 Annual and Sustainability Report // 2019 • JBS

Our People GRI 102-8 GRI 102-41

the market, maintaining the people with disabilities. The highest standards of career same principle applies to selection and development training talent and to team within the Company is also a member career development managerial guideline at JBS. and promotion. Operations are quite diverse, spread across five continents, The Company believes in adherence by everyone to the value of dialog between the Corporate Culture is the managers and teams, and foundation for the success of fosters interpersonal relation- the Company's businesses. ships. In the USA, JBS has an Open Door Policy, encour- To uphold corporate gover- aging team members to talk nance in adopting policies to supervisors or the HR area and procedures as well as in about any problems affecting developing macro strategies, the workplace in general. This the HR area revises people policy allows for identification management policies and of work-related issues, such programs on an annual basis, as compensation and bene- along with the key indicators fits, working hours, safety and of health and safety, turnover, relationships with leaders. absenteeism and overtime. This allows the Company to In Brazil, 845 team members Itapiranga Unit (SC) make necessary adjustments work in the corporate and and guarantee that health, approximately 128 thousand safety and working condi- work in the business units. In tions for team members the Brazilian operation, the JBS is a Company made of people, and focused on developing its Promoting development of implemented according to Company saw lower rates of team members, in the different locations where it operates. That is human capital is a major goal the high standards adopted absenteeism and turnover. why the Company works tirelessly to promote workplace health, at JBS. With this in mind, by the Company. Absenteeism was at 2.48% safety and welfare for its entire team, offering equal opportunities to the Human Resources area versus 2.62% in 2018, with all and continuously investing to develop its talents and leadership. works regionally, following JBS remains committed to turnover at 21.38% versus The Company moreover strives to hire, retain and develop local laws and norms, with hiring regardless of race, 22.07%. Moreover, 90% of professionals who are dedicated to operational excellence and the support of Corporate religion, color, nationality, sex, team members in Brazil identify with the Company's mission. At the end of 2019, JBS had HR. In addition to working sexual orientation, gender were covered by collective over 240,000 team members in 15 countries. to attract the best talent in identity or age, including bargaining agreements.

42 43 Annual and Sustainability Report // 2019 • JBS

We've been in Brazil since the end of 2018. From the first time we came to the plant, a wide range of topics, including ben- JBS in Brazil has a training program for everyone told us: ‘come here,’ ‘let's do this,’ efits, safety and training, in a variety of people with disabilities, contributing to their ‘let's eat dinner together.’ In this short time languages and dialects. Furthermore, placement in operations as well as in the we've been working here, I think a family has each facility provides unlimited access job market. been born at JBS: it is made up of Brazilians, to Language Lines, available in over 200 Venezuelans and Haitians." languages, providing access to clear A Company initiative maintains 12 schools communication between everyone. in 11 cities, where people with disabilities are recruited, trained and given opportunities. In Brazil, JBS employs team members In 2019, 150 professionals were trained. JBS “ from various countries, such as Senegal, currently has around 2,000 people with Haiti and Venezuela. disabilities on staff in Brazil.

Fernanda Silva HR Manager in Itumbiara (GO)

Sol Emília e Sixto José Venezuelan refugees and team members The project has a very at Dourados (MS) unit positive impact on the lives of participants and their families. Because Diversity someone with a disability has a physical, mental, intellectual or sensory impairment, which Diversity is very important at the There are 120 different nationalities among oftentimes comes along Company, given that its success the 2,500 team members at JBS in Canada. with other issues, this causes depends on the collective skills, As the largest employer in the city of Brooks, difficulties for them to be backgrounds and experiences of its Alberta, the Company absorbs professionals inserted in society. The project team members. The Company values from around the world: around 60 different “is here to say otherwise: that variety in backgrounds, languages and languages are spoken at this unit alone. people can have a job, can be cultures, which is why it promotes part of society and can interact diversity and inclusion at all of its plants In an effort to ensure a sense of unity and with others." and offices, aimed at creating a reliable, promote a multidisciplinary environment, the pleasant and productive workplace. Company develops communications covering

44 45 Annual and Sustainability Report // 2019 • JBS

JBS Without Borders Among those selected in 2019 was Mahamadou Sissoko, a native of Mali, Africa. At just 27 years old, the single father worked at Seara, in Brazil, over five years. He came to the Ipumirim (SC) unit in 2015, and has consistently served In an effort to value the specialized work done by deboners, the as an example of determination, humility, simplicity, an attitude of ownership, program offers Friboi team members the chance to work at the JBS discipline and interpersonal relations. When he started working at the Brazilian Canada unit, in the city of Brooks. There are a multitude of advantages unit, he helped out with different activities, including translating, since he is in this project: the Company's global position is reinforced and able to speak five languages. opportunities are created along with international experience, retention and sharing of knowledge between team members.

Alex Batista I've been in Canada since General Foreman at JBS Canada and a participant in JBS Without Frontiers September 2019 and I work in in the deboning section. When I left my country to live in Brazil, I really loved it and was planning to bring my family to live there. But after four and a half years, I heard about the JBS Without Frontiers program. Coming to Canada will help me to develop other talents."

Mahamadou Sissoko “Deboner at JBS Canada and a participant in JBS Without Frontiers

Campo Grande (MS) Unit The 5th edition of JBS Without Bor- ders was held in 2019, and for the first time, Seara team members also took part in the selection process. In Oc- tober 2019, 16 team members were approved to work in Canada. JBS I've been in Canada for provides support to team members during the entire process of immi- three and a half years. grating to a new country, in addition I started as a deboner and was promoted to monitor and then to a benefits package that includes supervisor. In January 2020, I began to work in my new position as housing and local support with English classes. With the success of General Foreman. I was in the first JBS Without Borders group and this initiative, the program has been everything was very new, but I had the support I needed from the expanding in recent years. For 2020, Recruitment team and from people in other departments, who the Company aims to also open posi- “were even willing to help me on weekends." tions at the supervisory level.

46 47 Annual and Sustainability Report // 2019 • JBS

Training

With the goal of investing in devel- of improvements, shared supervision, oping qualified technical manpower technical training provided according for the business and of these young to the area's needs and personnel man- people working as specialists or in an agement workshops. People development programs at JBS entry-level leadership role, JBS has developed the Valued Youth program The Company also promotes the in- In 2019, JBS trained a total of 137,165 people, up by 11% in Brazil. house talent program in Brazil. Its year-over-year. aim is to select operational staff mem- Governed by the Company's values, bers and develop supervisors for the Summit: A JBS USA program Quality Academy: Valued Youth provides learning oppor- maintenance, production, transporta- dedicated to gathering com- A development program for tunities based on practical activities. tion and logistics business units. There pany executives for intensive Seara Quality staff, aimed at: In 2019, the Company expanded the are currently 318 team members who learning on topics geared assuring up-to-date technical program to those obtaining degrees have gone through the program: 181 toward leadership. The pro- knowledge; developing in Engineering to work at Friboi. Out are active as supervisors and 37 team gram provides opportunities multipliers, in an effort to of the 27 young people hired, 26 are members are undergoing develop- for executives and leaders from harmonize concepts and currently leaders or specialists. ment in the program. In 2019, 55 spots different JBS businesses to ex- fundamentals; and providing were opened, with 37 internal team change good practices and to training to support Quality This program uses on-the-job train- members hired at the end of the six- gain knowledge on the Com- Assurance – "Know what you ing and is accompanied by a project month period. pany's business units. do and what really needs to be done." A total of 157 Leadership Academy: An ini- professionals were trained Headquarters in São Paulo (SP) tiative of JBS Couros to develop in 2019. leaders in Brazil on themes of people management with Labor Lawyer: A program a focus on the challenges at geared toward selecting and JBS. Modules are held with an developing attorneys to work in-house multiplier team, using in the labor area at JBS in the synergy between the HR Brazil. The program is open departments at the different to lawyers who have recent- business units. In 2019, 16 topics ly graduated in the last two were developed, with a total of years. Training, which lasts 90 850 people trained. days and takes place at JBS headquarters in São Paulo, Seara University: A dis- consists of theoretical and tance learning platform that practical portions and cov- offers various career devel- ers behavioral, technical and opment tracks, discussing legal topics. Since 2016, 32 topics related to leadership, attorneys have gone through operational and administra- the course. The program is tive activities. Available to all currently developed at 11 Seara team members. group units.

48 49 Annual and Sustainability Report // 2019 • JBS

Camila Gulla Quality Assurance Supervisor

JBS USA Trainee Program: A Elective Learnings: Supplementary 12-month program to identify and de- online training courses offered by JBS velop future leaders by having recent USA to any team member interested graduates rotate through Company in improving their skills, in areas that operations in the United States, Canada include Cross-Generational Communi- and Mexico. The goal is to contribute to cations, Responsibility and Ownership, developing their knowledge and abili- and Creating Engaged Teams. ties in the leadership, process management and people management areas. People First: This program provides specific training for all frontline JBS JBS USA Internal Talent Program: USA supervisors in four sessions held Created to identify production team throughout the year, focused on prac- members who possess leadership tical leadership techniques and team skills, offering them the tools they management tools. Topics include need to accelerate their careers at JBS. building trust and respect, the cost of Valued Youth: Aimed at developing Internal Talent Program: The program includes a four-month turnover, responsibility, delegation and young Brazilians to work as specialists The 8-year-old program develops training rotation at a JBS USA facility, prioritization, communication and infor- or in entry-level leadership positions Company professionals to undertake training on leadership skills and the mation sharing. in engineering and labor law areas, supervisory positions in the opportunity to meet and learn from the program offers technical training, Production, Maintenance, Logistics and other leaders across the Company. Leadership Fundamentals: shared supervision and project develop- Transportation areas. JBS currently has Leadership Fundamentals is a new ment. The initiative includes the online 318 team members who have gone JBS USA Leadership Warehouse manager training program designed Valued Youth platform (jovensdevalor- through the program. In 2019, 37 in- Program: This includes six different for team members who have been jbs.com.br) and a Facebook profile house talents were placed in positions programs for JBS USA leaders, recently promoted or hired by the (facebook.com/JovensDeValorJBS/). after completing the six-month broken down into different profiles – Company. This one-day program is The Company currently has 32 labor training program. leaders with high potential, mid-level held eight times a year, offering new attorneys and 26 young leaders and managers, production supervisors, and leaders exposure to the values, mission engineering specialists who have gone JBS USA Internship Program: A JBS managers who have been recently and beliefs of JBS USA, in addition to through the program. USA internship program in the United promoted or hired. basic leadership skills, such as effective States, offering university students the team communication, delegation and Trainee: With its industrial focus, the chance to gain practical industry expe- JBS USA Way of Leading: A profes- performance management. program recruits young people who rience and develop leadership skills. It is sional development program aimed at have graduated in the last two years held over 10 weeks in the summer, with team members who have leadership Development Workshops: A pro- with the potential to serve as leaders, ca- approximately 150 participants, using skills. After they are mapped, these team gram created in 2018 for team mem- pable of managing processes and teams practical learning and projects that members undergo a six-month training bers in corporate positions at JBS USA, at different JBS business units in Brazil. provide relevant workplace experience, rotation at a JBS USA plant, in prepara- to meet their personal and profession- The selection process is done by plants, while also helping to identify future tion to take on management positions. al needs. in the places where they are located. leaders at JBS.

50 51 Annual and Sustainability Report // 2019 • JBS

Value chain

These guidelines covers a variety of the use of monitoring via satellite imagery, work fronts, from comprehensive georeferenced maps of farms and monitoring compliance with the various regulatory of official data from public agencies. See more and certification requirements in the on Chapter2/Commitment to sustainability/ Company's 190+ markets, to policies Product integrity. and processes related to value chain management (including responsible Seara also has a robust quality auditing pro- procurement of raw materials), partner- cess, for certifying new suppliers as well as ships with suppliers and team health monitoring active suppliers. Included in this and safety, training and other activities process is a commitment to quality and food permeating work routines. safety, maintenance and training, in addition to requirements related to good manufacturing The Global Sourcing Department is the practices. The Company assesses its suppliers area tasked with developing and dis- from breeding to receipt of inputs at produc- tributing policies on supplier relations tion units, in relation to quality and punctuality. and responsible procurement; however, each business has the autonomy The nature of JBS businesses around the to create relationship actions specific world means that a broad and diversified for its partners. This is done to make base is used for suppliers of raw materials partnerships more effective, while also and inputs as well as for manufacturers of guaranteeing uniform criteria, prac- materials such as packaging, ingredients and tices and objectives across the entire services, information technology (IT) and recy- production process. cling, among others.

In Brazil, selection and maintenance of In the United States, suppliers for JBS USA all JBS suppliers is based on the South who come into direct contact with food un- America Supplies Policies, which covers dergo a strict assessment before becoming the rules, guidelines and best practices Company partners, in addition to Global Food for safe, upstanding and competitive Safety Initiative (GFSI) audits. The Company business. This policy is furthermore values new local suppliers who are cost-com- aimed at assuring product quality, petitive and have the ability to work with the supply, total competitive cost, gover- Company's requirements and standards. This Mozarlândia (GO) nance and traceability across the hiring helps in further stimulating the economy in and procurement process, which is also the communities where the Company oper- guaranteed though Electronic Market, a ates. JBS Australia has a Supplier Relationship procurement system. Management Program to assess matters in- As a global company committed to sustainability across the business, JBS ensures cluding safety, collaborative business updates, quality in all of its processes, from suppliers and producers to customers and Friboi applies best sustainability and demand and precision forecasting, service consumers. This is why the Company invests in promoting continual enhancement of quality practices across its value chain and quality, sustainability and innovation, operating, manufacturing and product distribution standards in all of its businesses. and to cattle suppliers in particular, with among others.

52 53 Annual and Sustainability Report // 2019 • JBS

Livestock Domestic and Points farming foreign markets of sale 1 and feed 6 7 With its global From small Animals are structure, JBS markets to major farmed intensively produces food retail chains, JBS or extensively by that supplies local products are found partner producers. markets and serves in 190 countries. 275,000 customers in the world.

Warehousing Purchase of and distribution raw material 5 2 JBS has a specialized JBS acquires warehousing and animals from distribution systems, livestock farmers, suited to its products fostering adoption and guaranteeing of good practices that quality is

BEEF VALUE CHAIN VALUE BEEF by its suppliers. maintained.

Processing / 3 Transport 4 Industrialization JBS uses All production specialized procedures at the transportation to Company follow strict bring animals from standards of food the field to the health and safety. plant, following the tenets of animal welfare.

54 55 Annual and Sustainability Report // 2019 • JBS

Farms Nutrition 1 and hatcheries 2 and diet 3 Transport JBS uses After going through Feed is specialized the genetic produced transportation selection, incubation at Company to bring and reproduction factories in animals from phases, birds are order to meet all the field to raised on Company animals' growth the plant, farms as well as and health following integrated producers needs at every the tenets of and integrated stage of life. animal welfare. producer farms.

Processing / 4 Industrialization All production procedures at the Company follow strict standards of food health and safety. POULTRY VALUE CHAIN VALUE POULTRY

Points Domestic and Warehousing 7 of sale 6 foreign markets 5 and distribution From small With its global JBS has a markets to major structure, JBS specialized retail chains, produces food warehousing fresh poultry, that supplies and distribution poultry cuts, and local markets systems, suited prepackaged and serves to its products and processed 275,000 and guaranteeing poultry products customers in continued quality are found in 190 the world. worldwide. countries.

56 57 Annual and Sustainability Report // 2019 • JBS

PORK VALUE CHAIN

Farms Nutrition and diet Transport 1 After undergoing 2 3 the genetic Feed provided to JBS uses selection and hogs is produced specialized reproduction at Company transportation to phases, hogs are factories, meeting bring animals from raised on Company all animal needs in the field to the farms as well as relation to growth, plant, following integrated producer. maintenance and the tenets of health. animal welfare.

Points Domestic Warehousing Processing / of sale and foreign and distribution Industrialization 7 6 markets 5 4 From small markets JBS has a specialized All production to major retail With its global warehousing and procedures at the chains, fresh pork, structure, JBS distribution systems, Company follow pork cuts, and produces food suited to its products strict standards of prepackaged and that supplies local and guaranteeing food health and processed pork JBS markets and serves continued quality safety. products are found 275,000 customers worldwide. in 190 countries. in the world.

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Purchase of 1 raw material Purchase of sustainable raw material, respecting social and environmental as well as animal welfare practices.

Production 2 Leather is separated into a JBS beef Wet blue leather is sold processing plant to customers on the for use as a raw domestic and foreign material. markets

LEATHER VALUE CHAIN VALUE LEATHER WET BLUE SEMI-FINISHED Points Wet blue: leather that Semi-finished of sale Transport Wet Blue goes through an initial tanning process that uses 6 Sales to 3 4 chromium; wet white: 5 Wet blue leather Specialized A processing domestic and leather pre-tanned using processing transport to plant to aldehyde or phenolic foreign footwear, synthetic tannin, giving plant for protect this raw transform the leather a lighter color; automotive, semi-finished: leather that semi-finished material, using raw materials is re-tanned, dyed, polished furniture and and then dried; finished: product. trucks with solar into wet blue leather that is ready to use, leather goods after undergoing processes protection, for leather. that give it a homogenous customers, example. softness, color and sheen. among others. Itumbiara (GO)

60 61 Oscar Freire Swift store in São Paulo (SP) Annual and Sustainability Report // 2019 • JBS

Customers

JBS creates value in the products and Seara also joined Top Grade Butcher, services it supplies around the world, while also relying on the Perfect Store earning the trust of customers. This is program (learn more about this pro- the result of a commitment to program on page 201). duce and provide the highest quality of products and services, as well as Another innovation was the develop- the goal of having close relations with ment of 1953 Friboi by Pão de Açúcar, every stakeholder. held in some of the retail chain's stores in São Paulo, Rio de Janeiro and the JBS operates globally in both the B2B Federal District. One highlight of this (business to business) and B2C (busi- model is its dry-aged beef products, ness to consumers) segments and now sold at some of these stores. Swift, in has over 275,000 customers in more turn, has an in-store program, with than 190 countries. The Company's re- personalized brand-managed spaces in lations with stakeholders range from fi- major retail chain stores. nal consumers to corporate customers who make up major retail chains and At the JBS USA operation, Just Bare®, a food service. This is done by making it Pilgrim's brand, became a sales leader a priority to sustain close, harmonious in fresh chicken sales on Amazon Fresh, and constant relationships in order to an Amazon.com subsidiary specialized learn about and fulfill the wants and in food sales, with product deliveries in needs of each group in different mar- select cities in the United States. kets with excellence. For end consumers, market surveys and The Company invests in customized de- relationship channels, such as Custom- velopment of high-quality products for er service and social media, are a valu- corporate customers, providing services able source of information on public that support them in making their busi- needs and trends. In the United States, nesses more profitable. consumers have access to a range of tools, such as the Consumer Hotline, Through the Top Grade Butcher chan- phone lines and e-mail accounts that nel, Friboi, for example, promotes train- provide options for communicating ing for butchers at major retail chains with the Company. Service teams mon- and supports management and cre- itor feedback, interact with consumers ation of a customized environment. In to answer questions, and keep a data- 2019, the program surpassed the mile- base to track trends and supply perfor- stone of 1,000 stores. During the year, mance reports.

62 63 Annual and Sustainability Report // 2019 • JBS

Food safety GRI 103-1 GRI 103-2 and quality GRI 416-1 GRI 417-1

To achieve this goal in the 15 countries The Company invests in laboratories at where the Company operates, meet- its units around the world that spe- ing local regulatory requirements and cialize in microbiological analyses and For Seara, food quality international quality standards, JBS has biotechnology, providing indicators of and safety means a Global Food Safety and Quality As- food safety for its various brands, assur- doing the right thing, surance Department, headquartered in ing product quality. By modernizing going beyond customer and the United States. infrastructure and equipment used, consumer expectations, JBS is able to achieve more and more though excellence in Specialized Food Quality and Safety precise results, with increasingly faster processes and compliance teams who are active in each business analysis times. with standards. Quality and unit are responsible for implementing R&D are interconnected from the policies, strategies and procedures For instance, excellence in JBS oper- the start, establishing the developed by the Global Department. ations is certified by the British Retail best options, from product Consortium (BRC), a global reference “development, deciding Notable among the tools that monitor in quality in protein production, and on the unit and packaging quality and safety assurance for JBS plants are ISO 9001 certified to process and product products are value chain oversight pro- standards to guarantee our cesses, such as ensuring raw material customer and consumer origin and quality, production control total satisfaction." and monitoring of distribution. Training and refresher courses are provided to teams, customers and other agents in the process, qualifying them to perform their roles throughout the process.

Luciara Peil Executive Quality and R&D Director at Seara

Providing safe, nutritious, flavorful and high-quality foods to In 2019, R$ 930.8 million was invested in quality, consumers around the world is at the heart of JBS's purpose and with over people trained. is a fundamental element in its strategy. This means providing an 2,460 operating model aimed at continual enhancement of operating, manufacturing and product supply activities.

64 65 Annual and Sustainability Report // 2019 • JBS

Different controls in each market

United States Australia: Depart- Brazil: All JBS units All units are inspected ment of Agriculture hold seals from the by the U.S. Department of and Water Resources (DAWR) Federal Inspection Service Agriculture’s Food Safety and representatives perform in- (Serviço de Inspeção Federal Inspection Service (FSIS). spections at export facilities – SIF) of the Ministry of Agri- daily to guarantee that the culture, Livestock and Supply Mexico: Pilgrim's unit is in compliance with all (MAPA), certifying the Compa- factories follow the federal food safety and for- ny to export and sell its prod- guidelines defined by the eign market requirements. ucts on the domestic market. Secretariat of Agriculture, Livestock, Rural Development, Canada: The Fisheries and Food (SAGAR- Canadian Food PA) and the National Service Inspection Agency (CFIA) for Agro-Alimentary Public inspects all facilities to Health, Safety and Quality guarantee compliance with (SENASICA). In addition, each federal food safety standards. factory in Mexico is TIF (Fed- eral Inspection Type) certified, as issued by the government for food that meets the standards established by the World Animal Health Organization and by the Codex Alimentarius, a publication of the Food and Agriculture Organization of the United Nations.

Europe: Production facilities are inspected and audited by third parties according to European Food Hygiene regulations and any additional customer quality requirements to verify compliance. Pilgrim's Moy Park supports the Food Standards Agency campaign to reduce the spread of Campylobacter and has invested over £ 1 million in cutting edge research and practices to help the poultry industry fight the bacteria.

Montenegro (RS)

66 67 Annual and Sustainability Report // 2019 • JBS

Innovation

The growing demand around the world for consumption of animal protein has driven markets where JBS operates. With its global platform of operations, located in 15 countries and with more than 400 production units and offices, JBS is able to serve a variety of markets with high value- added products.

Changes to people's lifestyles and upward trends FOR FAMILY AND FRIENDS: in protein-based diets have been notable fac- foods that are easy to cook, making it easier to tors in JBS taking even more of a leading role in spend time with family and friends. the food market over the last year. To promote Examples: Reis da Grelha (Mexico), Zap Wings best practices, JBS started the Global Innovation (England), ready-to-serve and canned Bordon Team (GIT) in 2018. and Seara Rotisserie (Brazil) products. . Monitoring of global trends in the food market also provides vast business opportunities for JBS. The GIT furthermore allows for the Company to leverage its competitive advantage, promoting global knowledge sharing, rapid adaptation in adopting global trends, raising and launching HEALTHY PREPARE, COOK innovative products. PRODUCTS: AND EAT: DIVERSIFIED functional products products that are quick with high standards of OPERATING and easy to make, traceability and low social STRATEGY with high nutritional and environmental impact. performance. Examples: Just Bare and Examples: AdapTable Naked Meats (USA) and (USA) and Pilgrim’s Seara Nature (Brazil). (Mexico). INDULGENCE Investment of over R$ 120.5 million in AND SENSES: Innovation and Research and Development high-quality foods that delight the senses and provide unique experiences. Examples: Friboi 1953, Swift Black and Seara Dourados (MS) Gourmet (Brazil).

68 69 Annual and Sustainability Report // 2019 • JBS

In 2019, the Company began to use has zero trans fats, is lac- management tools to optimize devel- tose-free and contains no egg opment efforts for products with higher or milk products. demand among customers. Internation- al food mega trends, such as reduced In the United States, Pilgrim's sodium and fat, smaller portion sizes Pride is a leading supplier of and others, were also included in the organic chicken. project assessment. During this same period, an analysis of consumer demand With maintenance of long- for vegetable proteins led to Seara term investments in Innova- launching the Incredible Seara range, tion in mind, JBS opened its making it Brazil's first major company JBS Global Food Innovation to offer a complete range of products Center in 2019, in partnership made with 100% plant-based protein. with Colorado State Univer- This new product came to supermarket sity (CSU). The Center is an shelves in the states of São Paulo and educational and research unit Rio de Janeiro in late 2019 and will be geared toward enhancing available nationwide in 2020. Another food safety practices, meat highlight in this range was the Incred- sciences and animal welfare, ible Burger Seara Gourmet, a while also developing educa- 100% plant-based burger. tional and training activities in addition to performing equip- These innovative products ment testing. have the exclusive i Biomole- cule, guaranteeing that the fla- In Brazil, Friboi has a pioneer- vor and texture of plant-based ing program on improve- products is identical to meat. ments to production process- There are seven products in es, which allows for internal the Incrível line, ranging from recognition of projects and hamburgers to ready-to-serve their creators. The Continual Global Innovation Team plant-based meals, enriched Improvement Circle (or CMC, with iron and its acronym in Portuguese) The Global Innovation Team (GIT) aims to offer JBS's knowledge by sharing information, accelerating vitamin B12. program leverages knowl- innovation through cross-border exchanges and creating global platforms that support innovative The line is 100% edge by using the PDCA practices. GIT team members include innovation professionals from JBS business areas around the plant-based (Plan, Do, Check and Act) world, whose work is based on three pillars: product innovation, process innovation and technological and transgen- methodology. In some cases, innovation. Innovations conducted by the GIT in 2019 resulted in gains in raw material profitability, ic-free, serves as when adaptable, the Compa- improved product quality and reduced plastic usage during production. a source of iron ny implements the winning and fiber, is rich initiative at other units or in vitamin B12, even in other businesses. GIT Mission

• Share knowledge globally • Bigger, better and faster global platforms • Quickly adapt to global trends • Make technology feasible worldwide • Raise and launch successful innovations • Share global talent

70 71 Annual and Sustainability Report // 2019 • JBS

United States Partnerships ∙ Alabama Feed and Grain Association ∙ Alabama Poultry and Egg Association ∙ American Association of Avian Pathologists and associations American Association of Swine Veterinarians ∙ ∙ American College of Poultry Veterinarians GRI 102-12 GRI 102-13 ∙ American Fats and Oils Association ∙ American Feed Industry Association JBS is a member of food industry associations and trade groups and a ∙ American Leather Chemist Association member of some of the largest industry and sustainability organizations ∙ American Meat Science Association in the countries where it operates. ∙ American Society of Animal Science ∙ American Veterinarian Medical Association ∙ Asociación de Industriales de Puerto Rico Global Brazil ∙ Association of National Advertisers ∙ Global Roundtable for Sustainable Beef (GRSB) ∙ Poultry Growers Association of Bahia (ABA) ∙ Beef Industry Food Safety Council ∙ International Meat Trade Association ∙ Brazilian Association of the Food Industries (ABIA) ∙ Colorado Motor Carrier Association ∙ International Consortium for Antimicrobial ∙ Brazilian Beef Exporters Association (ABIEC) ∙ Food Safety Preventative Controls Alliance Stewardship in Agriculture ∙ Brazilian Agribusiness Association (ABAG) ∙ Georgia Association of Water Professionals ∙ International Institute of Ammonia Refrigeration ∙ Brazilian Association of the Plastics Industry (Abiplast) ∙ Georgia Poultry Federation ∙ Leather Naturally ∙ Brazilian Association of Vegetable Oil Industries ∙ Georgia Veterinarian Medical Association ∙ Leather Working Group (LWG) (Abiove) ∙ Institute of Food Technologists ∙ Sustainable Agriculture Initiative ∙ Brazilian Animal Protein Association (ABPA) ∙ Kentucky Poultry Federation ∙ Global GAP ∙ Brazilian Association of Broiler Chick Producers ∙ Kentucky Rural Water Association (APINCO) ∙ Missouri Pork Producers Association Australia ∙ Poultry Growers Association of Minas Gerais (AVIMIG) ∙ National Cattlemen’s Beef Association ∙ Australian Beef Sustainability Framework ∙ Industrial Association of Meat and Meat ∙ National Chicken Council ∙ Australian Environmental Business Network Byproducts of Santa Catarina (SINDECARNE-SC) ∙ National Oilseed Processor Association ∙ Australian Food and Grocery Council ∙ Centre for the Brazilian Tanning Industry (CICB) ∙ National Pork Board ∙ Australian Lot Feeders’ Association ∙ Brazilian Coalition on Climate, Forests ∙ National Pork Producers Council ∙ Australian Meat Industry Council and Agriculture ∙ National Renderers Association United Kingdom and ∙ Australian Meat Processor Corporation ∙ Packaging Coalition ∙ North American Meat Institute European Union ∙ Australian Pork Limited ∙ Brazilian Roundtable on Sustainable Livestock ∙ North Carolina Poultry Federation ∙ Bord Bia ∙ Cattle Council of Australia (BRSL) ∙ Organic Trade Association ∙ British Frozen Food Federation ∙ Meat and Livestock Australia ∙ Instituto Ethos ∙ Palmetto Agribusiness Council ∙ British Poultry Council ∙ Institute for the National Pact to Eradicate Slave ∙ Pet Food Alliance ∙ Campden BRI Food and Drink Initiative Labour – INPACTO ∙ Poultry Science Association ∙ Chilled Food Association Canada ∙ Trade Association of the Poultry Products ∙ Research Chefs Association ∙ European Federation for Beef and Pork Meat ∙ Alberta Motor Carrier Association Industry of the State of Paraná (SINDIAVPAR) ∙ South Carolina Poultry Federation ∙ French Meat Federation ∙ Canadian Cattlemen’s Association ∙ São Paulo State Cold Products Industry ∙ Southern Poultry Science Association ∙ French Meat Interprofessional Federation ∙ Canadian Meat Council Association (SINDIFRIO) ∙ Southwest Meat Association ∙ French Poultry Federation ∙ Canadian Renderers Association ∙ Sindicato Nacional da Indústria de Alimentação ∙ Tennessee Poultry Association ∙ Institute of Livestock or INRA (French National ∙ Canadian Roundtable for Sustainable Beef Animal (SINDERAÇÕES) ∙ Texas Broiler Association Institute of Agricultural Research) ∙ Cattle Council of Australia ∙ Tropical Forest Alliance (TFA) ∙ Texas Grain and Feed Association ∙ Northern Ireland Food and Drink Association ∙ Fats and Protein Research Foundation ∙ União Nacional das Indústrias e Empresas de ∙ Texas Poultry Improvement Association ∙ Northern Ireland Poultry Federation Carne (UNIEC) ∙ Trucking Industry Defense Association ∙ Northern Ireland Food Chain Certification ∙ Brazilian Roundtable on Sustainable Livestock ∙ Uniform Intermodal Interchange Agreement ∙ Organic Farmers and Growers (BRSL) ∙ USA Poultry and Egg Export Council ∙ Red Tractor

72 73 Commitment to sustainability

Materiality Social Animal and stakeholder responsibility welfare engagement

Environmental Product stewardship integrity

Moy Park poultry farm 74 Commitment Annual and Sustainability Report // 2019 • JBS to sustainability GRI 103-1 GRI 103-2 GRI 103-3 The Company’s global sustainability priorities are: product integrity, animal welfare, environmental stewardship Aware of its role in engaging the entire value chain, global activities and social responsibility. This chapter at JBS are based on sustainable development and management of will show guidelines, policies and global the impacts of its operations. results in these topics. However, in line with the Company’s vision of “thinking globally, acting locally” and its strategy of providing business areas regional auton- JBS Couros unit in Itumbiara (GO) omy, these topics will also be discussed within the context of each business, with their specificities and results.

To conduct sustainability management at the corporate level, JBS has established leaders in Brazil and the USA, in addition to locally designating people to this theme at each business. Regional leaders are also tasked with engaging business areas with a commitment to sustainable action and with spreading this same vision across the value chain, serving as an interface for the Company’s communications with its stakeholders.

The Company maintains an important governance authority for this topic through the JBS Sustainability Commit- tee, which is responsible for discussing strategic issues at the global level. This group reports directly to the Board of Directors. The Board’s Chairman, Jerry O’Callaghan, also joined the Sustainabili- ty Committee in 2019.

Brazilian directors are also responsible for monitoring all operations in Brazil and the Couros business unit in other countries. Operations for the United States, Canada, Australia, New Zealand, Mexico and Europe are monitored from Global investments in sustainability in 2019: the United States. R$ 1.9 billion

76 77 Annual and Sustainability Report // 2019 • JBS

Materiality and stakeholder engagement

GRI 102-40 GRI 102-42 GRI 102-43 GRI 102-44 GRI 102-47

JBS has developed a materiality matrix that prioritizes sustainability topics for the Company and its stakeholders. In 2019, these topics were revised and grouped into four new pillars that better represent the Company’s global challenges.

To create this new matrix, a series of interviews were held with Company leaders from around the world and select customers in Australia, Brazil, Canada, the United States and Europe over six months, based on the materiality process and studies that have been being carried out since 2014. Based on this consensus-building methodology, items in the JBS materiality matrix are given equal weight and no prioritized.

Global sustainability priorities

ENVIRONMENTAL ANIMAL WELFARE SOCIAL RESPONSIBILITY STEWARDSHIP FP 10, FP 11, FP 12 GRI 203-2, 403-2 GRI 302-1, 302-3, 302-4 , 303-1, Sector supplement/ Direct and indirect economic 303-3, 305-1, 305-2, 305-3, 305- Animal welfare impacts, occupational health 4, 305-5, 306-1, 306-2 and safety Energy, Water and effluents, Emissions, Waste

PRODUCT INTEGRITY GRI 308-2, 414-2, 416-1, 417-1 Social and environmental supplier assessment, customer health and safety, product labeling and services Itumbiara (GO)

78 79 Annual and Sustainability Report // 2019 • JBS

Sustainable Development Goals - SDGs

JBS manages sustainability in alignment with the international scenario and the 17 Sus- Relationship between strategic sustainability themes and SDGs tainable Development Goals (SDGs) launched by the United Nations (UN) as a platform and reference for its sustainability actions. The UN’s 2030 Agenda defines the SDGs as an action Activities are also linked to GRI indicators, with information on these indicators available in the plan for making the planet more sustainable for people. summary, starting on page 286.

ANIMAL ENVIRONMENTAL PRODUCT SOCIAL WELFARE STEWARDSHIP INTEGRITY RESPONSIBILITY

Mozarlândia (GO)

80 81 Annual and Sustainability Report // 2019 • JBS

Relationship between JBS projects and SDGs

PRODUCT INTEGRITY SOCIAL RESPONSIBILITY

IN THE VALUE CHAIN INNOVATION COMPLIANCE JBS USA TEAM JBS BRASIL TEAM COMMUNITY AND QUALITY MEMBERS MEMBERS Super Agro Program JBS Ethics Hotline (p. 40) Good Deeds Are Good (p. 206) Kind Leather (p. 142) 8 Internship Program (p. 50) Internal Talent Program (p. 159) 8 12 6 7 8 11 12 13 15 1 8 (p. 48) 3 10 Instituto Ethos (p. 41) 1 8 Integrated partnership LWG and CSCB 8 Management Trainee Instituto Germinare (p. 161) (p. 205) Certifications (p. 139) Program (p. 50) Valued Youth Program 4 3 12 6 7 8 11 12 13 15 Policies, Codes, Due 1 8 (p. 48) Diligence and Compliance 1 8 Agro Against Cancer Supply Chain Protocol Whow! Innovation Award Training (p. 37) Leadership Warehouse Campaign (p. 159) (p. 138) (p. 193) 8 Program (p. 50) JBS Without Borders 3 2 3 8 12 15 2 3 12 15 1 8 Program (p. 46) 1 8 Special Chefs (p. 159) Friendly Oil Program Seara Incrível Line (p. 71) Tomorrow Fund (p. 252) 4 10 (p. 174) 2 3 12 15 1 4 8 10 2 3 8 12 15 Favelas Cup (p. 159) Legend: 10 Decarbonization Credits (CBio)(p. 175) Social action in Vietnam 11 12 13 15 (p. 160) 1 3 4 8 10 Social Fuel Seal (p. 154) 1 2 8 10 12 Refugee support and regularization (p. 44) JBS 3600 (p. 158) 3 8 6 7 11 12 13 15 Inclusion of people with BRSL, GSRB and disabilities (p. 45) Araguaia League (p. 152) 4 8 10 2 8 12 13 15 JBS Canada Centre (p. 252) Monitoring of cattle 1 3 suppliers (p. 88) 2 8 12 13 15

InPacto (p. 92) 8

82 83 Annual and Sustainability Report // 2019 • JBS

ENVIRONMENTAL STEWARDSHIP

Sapling nursery in Marabá ENERGY AND (PA) (p. 160) EMISSIONS 13 15 Renewable energy (p. 177) 7 11 12 13 15 Recycling (p. 180) 7 11 12 15 TRP Optimized Route Program (p. 176) Sustainable packaging (p. 104) 11 12 13 12 Photovoltaic panels and energy management at Tropical Forest Aliance Swift (p. 177) (p. 92) 7 11 12 13 2 8 12 13 15 Biolins, renewable Instituto Recicleiros (p. 214) resource thermoelectric 1 3 8 10 plant (p. 177) 7 11 12 13 15 Use of cardboard pallets (p. 261) Open market acquisition 11 12 13 of 65% of energy by JBS (p. 177) Use of recyclable plastic 7 11 12 13 15 wrap (p. 133) 12

ANIMAL WELFARE

Certified feedlots (p. 265) 12 15

Animal welfare care, targets and training (p. 106) Team 12 15 member Patrícia Locatelli Baron, from the Ipumirim (SC) unit

84 85 Annual and Sustainability Report // 2019 • JBS

Stakeholder communication channels

Some of the many channels of communication maintained by JBS CUSTOMERS AND companies to communicate with stakeholders are: CONSUMERS MEDIA

FOOD NEWS: SPECIALIZED SERVICE AREAS for each INTERNAL communicating news on JBS brand business unit and corporate business. products and Food Service channel actions for customers and partners in MEDIA ROOM JBS INTRANET: OMBUDSMAN: Brazil. Every two months. https://jbs.com.br/comunicacao/ultimas-noticias provides information and news on takes criticism, questions and suggestions the Company, as well as other team on operations and internal processes as well CUSTOMER SERVICE 2.0: member services. as other topics related to day-to-day work. Friboi, with a toll free hotline (+55 0800 11 INVESTORS AND 5057), and a channel for online interaction SHAREHOLDERS FIND OUT MORE: HOTLINES: (available at http://www.friboi.com.br) a newsletter sent twice a week to team for anonymous reporting of matters related to SERVICE AREAS in Brazil and the United members in Brazil. the workplace or ethics: Customer Service: States (Pilgrim’s) - JBS USA: Best Work Environment Hotline - Seara, with a toll free hotline (+55 0800 FIND OUT MORE SUPER AGRO: - Pilgrim’s: Prideline 47 2425), e-mail and social media. JBS IR WEBSITE a newsletter sent monthly to integrated - JBS Australia: Complaints Hotline - Consumer Hotline: 1-800-312-1470, ri.jbs.com.br producers in Brazil. - Moy Park: Support Assistance Helpline available Monday through Friday, during business hours, in the United States PILGRIM’S IR WEBSITE HR REPORTS, ALWAYS DO THE RIGHT ENGAGEMENT SURVEYS - FreshTraceTM ir.pilgrims.com THING NEWS, MESSAGE FROM THE - SAP Cloud for Customers PRESIDENT, JBS TV, AMONG OTHERS, OPEN DOOR POLICY: - Website for each business and brand QUARTERLY EARNINGS CALLS covering what is happening in relation a program for communicating directly to Company and Corporate business. with leaders, allowing team members to JBS NEWS: JBS DAY submit questions related to performance monthly report on sustainability actions GLOBAL NEWS ROUNDUP: and the workplace. being carried out by JBS in Brazil and a newsletter with stories and topics of leather operations around the world. global interest to JBS. SUSTAINABILITY SPOTLIGHT: SUPPLIERS a weekly report highlighting sustainability JBS NEWS ROUNDUP: in the JBS USA and Pilgrim’s business. CONEXÃO FRIBOI: an internal newsletter with the main https://www.friboi.com.br/pecuarista news on JBS USA, the competition and the market, distributed three GIRO DO BOI PROGRAM: times a week. www.girodoboi.com.br

PILGRIM’S MOY PARK MAGAZINE: SEARA’S “CONNECTED & a quarterly magazine. INTEGRATED” PROGRAM https://www.canalrural.com.br/noticias/pecuaria/ produtores-frangos-suinos-programa-canal-rural/ SOCIETY AT LARGE WEBSITE for each business www.jbs.com.br (Brazil) www.jbssa.com (United States) www.seara.com.br www.pilgrims.com/ 86 br.linkedin.com/company/jbs 87 Product Annual and Sustainability Report // 2019 • JBS integrity Partner Supplier

GRI 102-9 GRI 103-1 GRI 103-2 GRI 308-1 GRI 414-1

At JBS, product integrity means respecting the highest food safety, quality and sustainability standards. This means being committed to and investing in enhancing operations, manufacturing and product supply adopting good social Supplier relationships and environmental practices and enhancing JBS understands that its relationship with sup- In integrated poultry and pork chains, JBS certification by pliers is essential and relevant to the prosperity units works with producers, partnering independent auditors to of the value chain. That is why the Company to guarantee the origin of raw materials. ensure implementation developed a series of actions to build closer re- The inputs needed to develop safe and of good practices, lationships with its stakeholders that are based healthy breeding are provided through this processes and routines. on confidence, respect, ethics and transparen- relationship. In addition, regular technical cy. Learn more about what is being done by visits are held, providing advice on production One of JBS’s main each business in Chapter 3 - Our Businesses. management, environmental practices and characteristics in the context animal welfare. of its value chain is its role as With a regular dialog with its suppliers, espe- a benchmark, especially in cially in relation to matters related to respect- At every stage, from genetic selection of ani- responsible procurement of ing human rights and national and local labor mals to transportation of products for sale, a We have a nearly seven year raw materials. This position laws, JBS has been a signatory of the Na- management system guarantees compliance long partnership with JBS, has a significant influence tional Pact to Eradicate Slave Labour since with the strictest standards. Having greater always based on innovation and on on the value chain, from raw 2007, and has been a member of the Insti- control over animals’ health and nutrition finding the best technological solutions material suppliers adopting tute for the National Pact to Eradicate Slave makes it possible to minimize the risk of con- for monitoring its supplier chain good practices to the final Labour (InPACTO) since 2014. tamination and diseases, while simultaneously and detecting deforestation. During quality of products. augmenting quality assurance, food safety, this entire period, we’ve developed The Company’s approach to managing im- product cost efficiency and fulfillment of cus- countless challenging projects with JBS, In this sense, JBS encourages pacts in its supply chain includes constant and tomer specifications. which have helped the beef sector in and develops actions geared consistent collaboration with our suppliers. Brazil as a whole to move forward when toward enhancing supplier The majority of whom, are bound by contract In Brazil, all livestock in the beef chain is ac- it comes to sustainability.” management and practices, to follow state laws and regulations, JBS also quired from third-party suppliers in order to by working on two fronts: establishes long-term relationships in different guarantee best practices, and the Company “ supplier relationships and locations, which contribute to the continued develops relationship programs and training guarantee of origin. progress of its supply programs. materials for its suppliers around the world. Breno Félix Product Director at Agrotools

88 89 Annual and Sustainability Report // 2019 • JBS

Amazon

JBS is committed to combating, discouraging and eliminating deforestation of its supply chain in the Amazon. A pioneer in sustainable development initiatives in the region, the Company’s activities are based on a Raw Material Responsible Procurement Policy, which establishes social and environmental criteria for selecting cattle suppliers.

Over the last 10 years, JBS has made substantial investments to make one of the largest private supplier monitoring systems in the world viable. Using satellite images and georeferenced data on supplier farms, the system monitors an area of 450,000 km² (45 million hectares) located in the Legal Amazon, equal to the size of Germany.

The Company assesses 50,000 farms daily to avoid purchasing animals from properties involved with deforestation of old growth forests, invasion of indigenous lands and environmental preservation areas or areas listed as under embargo by the Brazilian Institute for the Environment and Natural Resources (Ibama). JBS does not acquire cattle from suppliers involved with rural violence or agrarian conflicts or that use child or forced labor. During this period, around 9,000 cattle supplier farms have been blocked by the monitoring system for failing to comply with social and environmental requirements.

Raw Material Responsible Procurement Policy https://jbs.com.br/wp-content/uploads/2020/01/ 27-12-2019-Politica-de-Compra-Responsavel-EN.pdf Cattle Purchase Monitoring - Headquarters (SP)

Guarantee of origin For three years, Imaflora has At JBS, the acquisition of raw materials is based on the been working with JBS principles of responsible procurement; this means they are to enhance monitoring of meat purchases based not only on compliance with federal and local regu- coming from the Amazon as well as audits lations, but also in line with the most sustainable practices of Conduct Modification Agreements, which in the sector. This is where the Company’s guarantee of are done with the Federal Public Prosecutor’s origin begins. Office, other NGOs, meatpacking plants and retailers. Because JBS is the world’s largest This commitment could result in cancellation of contracts animal protein company, it has this huge when irregularities or incompatible practices are found. potential to positively impact on the entire That is why there are control mechanisms at various stages sector, especially in the Amazon, monitoring of the process. “its cattle purchases and ensuring less deforestation and elimination of slave labor in In integrated poultry and pork chains, efforts to guarantee Brazil, and it even has the potential to bring all origin is through oversight of farms and producers. In Brazil, of these examples of projects to other biomes.” Seara uses tracking systems to quickly identify and, if necessary, isolate farms with any problems related to quality or Marina Piatto safety. Technology also helps monitor treatment of birds at Climate and Agricultural every stage of their lives and the production process. Chains Manager at Imaflora

90 91 Annual and Sustainability Report // 2019 • JBS

As part of its commitment to transparency, the Company’s cattle procurement operations and its Brazilian Beef Exporters Association (ABIEC), and other institutions who work to combat illegal entire supplier monitoring system are audited annually by independent auditors, with results pub- occupation of public lands and deforestation in the Amazon. lished to the Company’s website. Audits have shown that in recent years, over 99.9% of JBS’s cattle purchases from farms located in the Amazon region were compliant with the Company’s social JBS was the first company in the food industry in Brazil to become a member of InPACTO, a and environmental criteria. multi-stakeholder organization combating the use of forced labor in the country’s main production chains. In 2019, the DNV-GL company of Norway, an international reference in social and environmental auditing, consulting and certifications, confirmed that 100% of cattle acquisitions made by In partnership with the Federal Prosecution Office of Brazil and the Institute for Forest and Ag- the Company in the Amazonian biome were socially and environmentally compliant. ricultural Management and Certification (Imaflora), JBS has made important contributions to building industry strategies for responsible cattle procurement in the Amazon, called Boi na Linha JBS makes efforts to enhance industry standards, through open dialog and by engaging stake- (www.beefontrack.org/), which establishes criteria for purchasing raw material for the Company’s holders in order to improve sustainability across the industry’s entire value chain. The Company is operations in the region. a founding member of the Brazilian Roundtable on Sustainable Livestock (BRSL), part of the Glob- al Roundtable for Sustainable Beef (GRSB), and a member of the Tropical Forest Alliance (TFA), The Company’s goal for 2020 and beyond is to develop a project for reforestation of an initiative connected to the World Economic Forum, fostering and promoting actions aimed at environmental liabilities in the Legal Amazon in partnership with its cattle suppliers and civil ending deforestation in the world. society organizations.

The Company is also a member of the Brazilian Coalition on Climate, Forests and Agriculture, JBS believes that the industry can continue to prosper by using new technologies and through greater which works collaboratively on issues connected to climate change. It is also a supporter of the productivity, without deforestation in the Amazon, and invites all industry players to join its commit- “Be Legal in the Amazon” initiative, led by the Brazilian Agribusiness Association (ABAG), the ment to protect this important biome and remove incentives that could encourage deforestation.

Amazon rainforest

92 93 Annual and Sustainability Report // 2019 • JBS

Social responsibility

GRI 103-1 GRI 103-2 GRI 403-2

JBS understands that its corporate social responsibility should be exercised in every aspect, especially in communities where it operates and with a focus on the health and safety of its team members.

JBS has a major social impact on the regions in which it operates. Facilities are mostly located in areas that lie far away from major urban centers, where the Company naturally has a bigger economic and social influence. Among other things, this means that the Company has the chance to play a role in developing the local community. Through which its production units provide people without specific educational backgrounds with access to differential professional education, in a fast and effective process of inclusion.

The Company’s approach is based on community development actions and donations that allow it to positively impact the places where JBS team members live and work, therefore benefiting the community where it is located. Along these same lines, JBS supports initiatives geared toward educating and developing children and young people, through professional training for young people and adults and training and social inclusion of people with disabilities As with other areas, each business platform has the autonomy to establish their own programs in this area - through sponsorships, team member volunteering activities and direct investments.

Global investment in social responsibility and sponsorships: Lins (SP) Friendly Oil program R$ 32 million

94 95 Annual and Sustainability Report // 2019 • JBS

Occupational health and safety GRI 103-1 GRI 103-2 GRI 303-3

Occupational health and safety Management policies and programs are JBS also monitors key safety indicators on a daily, are essential to business devel- revised annually, along with key indica- weekly and monthly basis, so that health and opment at JBS. As with other tors. This measure makes it possible for safety decisions are made quickly and prioritized. themes, this follows the Compa- the Company to make the adjustments ny’s global principles, complying needed to assure compliance with cor- Monthly verification makes it possible for the with regional programs and local porate requirements for occupational Company to monitor the evolution of frequen- action plans. In addition, the health and safety conditions. The Com- cy and severity rate indicators as well as im- Training on occupational health Company strictly complies with pany works to train its team members provement actions. Likewise, action plans are Occupational Health and Safety on accident prevention, compliance with monitored and a check is done on any pending and safety was provided to regulations established by local legal requirements, spreading a culture matters related to legal nonconformance found 105,000 team members, with standards and laws in every region of occupational health and safety and in safety inspections, as well as on the mandato- where it operates. continual improvement of its processes. ry training indicators for each job. R$ 698.86 million invested in this area, 133% more than in 2018.

Occupational health and safety rates GRI 403-2

Pilgrim’s Pilgrim’s Brazil/ Brazil/ South JBS Australia Canada South JBS Australia Canada 2018 America USA Pilgrim’s Pilgrim’s Pilgrim’s Pilgrim’s 2019 America USA Pilgrim’s Pilgrim’s Pilgrim’s Pilgrim’s USA Mexico Moy Park Tulip* USA Mexico Moy Park Tulip

Accidents Accidents Accidents Accidents with leave 455 283 114 29 25 N.A. 273 29 with leave 456 293 89 13 24 101 239 27

Accidents Accidents without leave 3,806 1,792 797 257 97 N.A. 437 N.A. without leave 4,002 2,002 875 151 60 358 420 259

Total 4,261 2,075 911 286 122 N.A. 710 N.A. Total 4,458 2,295 964 164 84 459 659 286

Injuries Rate of injuries Injuries Rate of injuries with leave 2.12 0.81 0.36 0.38 0.21 N.A. 13.29 1.07 with leave 1.99 0.84 0.28 0.12 0.24 1.51 11.95 0

Rate of injuries Rate of injuries without leave 17.77 5.14 2.53 2.46 7.69 N.A. 24.62 N.A. without leave 17.44 5.78 2.74 1.37 5.63 5.36 22.83 0.97

Total rate of injury 19.89 5.95 2.89 2.73 1.07 N.A. 37.91 N.A. Total rate of injury 19.43 6.62 3.02 1.49 0.82 6.87 35.81 10.34

Lost Lost workdays Lost Lost workdays due to accidents 22,219 N.A. N.A. 398 193 N.A. N.A. 830 due to accidents 16,752 N.A. N.A. 393 219 1,624.5 N.A. 391 workdays workdays (severity rate) Lost workday rate (severity rate) Lost workday rate (LWR) 95 N.A. N.A. 0.01 1.69 N.A. N.A. 30.50 (LWR) 182 N.A. N.A. 0.0105 1.87 24.3 N.A. 14.1

DART DART (Days Away, Days away, (Days Away, Days away, Restricted or job restricted or job N.A.. 4.15 1.56 0.2 0.11 N.A. N.A. N.A. Restricted or job restricted or job N.D. 4.22 1.32 0.08 0.24 1.56 N.A. N.A Transfer rate) transfer rate Transfer rate) transfer rate

Fatalities Typical accidents 1 0 0 2 0 N.A. 0 0 Fatalities Typical accidents 3 1 1 0 0 0 0 0

N.A. - Not available *In 2018, Tulip did not yet belong to the JBS group

96 97 Annual and Sustainability Report // 2019 • JBS

Environmental stewardship Effluent treatment facility in Frederico Westphalen (RS)

GRI 103-1 GRI 103-2

Similar to other topics, the environmental stewardship process at JBS involves the utilization of resources, such as water and energy, lowering greenhouse gas (GHG) emissions and treating waste generated by the operation, with a focus always on improved eco-efficiency through innovative solutions and efficient management. In 2019, JBS invested R$ 689.82 million in environmental improvements.

Publishing of the results and assessments markets and compared to other of practices adopted through the CDP, the sectors, meaning that the Company’s largest and most respected global platform for performance is among the best in the corporate sustainability information, is part of world in relation to corporations. the Company’s monitoring and analysis of improvements it has made. In 2019, results iden- Data used in the assessment is tified in the CDP showed that JBS had above gathered through questionnaires built average performance in all criteria assessed. around topics that cover risks and opportunities, governance, strategies, The platform allows the Company to report on compliance, traceability, procurement its performance, policies and good practices policies, chain engagement and in sustainability. Since 2015, the Company has establishment of targets. All of used the tool to report on its performance these efforts are geared toward the in managing water resources (CDP Water Environmental Management Policy and program), to manage GHG (CDP Carbon) by the Environmental Management emissions and corporate actions and policies Systems of its various businesses, which preventing deforestation associated with ob- set guidelines and provide indicators to taining key agricultural commodities – cattle, direct actions. Corporate environmental soybeans, timber and palm oil (CDP Forests). teams supervise environmental performance of operations and provide The study used five criteria to assess companies assistance for specific problems, in grouped in the food, beverage & tobacco the event they arise. Cases on the industry. JBS had better than average results most relevant results are shared and compared to companies in the industry replicated whenever possible, regionally working in the biggest animal protein and globally.

Globally, R$ 698.82 million was invested in environmental stewardship at JBS factories.

98 99 Water management Annual and Sustainability Report // 2019 • JBS GRI 103-1 GRI 103-2 GRI 303-3

JBS reiterates its commitment to sustainable In addition to monitoring rainwater collection, Effluents water use as a priority in all of its units and also which reached 125 million liters in 2019, as a develops strategies and projects to guarantee premise, the Company reuses water at various Liquid effluents resulting from maximum efficiency in using and reusing this moments in the process. Many of these actions the production process at units resource. Water resource management is the are shared by JBS operations around the world. are appropriately treated and foundation of the JBS production chain. This Water reuse and recycling initiatives represent undergo a process that meets resource is considered essential to the develop- the biggest opportunity for saving this resource. legal requirements. All efflu- ment of animals and feed, as well as to assuring Water reuse is chiefly employed in processes ents are treated, whether inter- sanitary standards for processes and products used in cleaning external areas and for cooling nally or by the public system. in addition to sanitation of areas, equipment equipment, in accordance with existing sani- The Company constantly moni- and tools. tary standards. It is important to note that the tors the performance of efflu- specific local laws in each country outline the Brasília (DF) ent treatment stations, com- The guidelines around water resource manage- types of operations where gray water can be plying with the physical and ment are carried out at the corporate level and reused. In 2019, over 3.3 billion liters of water chemical standards stipulated the actions are executed by plant environment were reused in Company operations around by law, with oversight from the teams. Specific targets and procedures are the world, accounting for approximately 2% of respective governmental agen- of water collected and used defined for each business, respecting their par- water captured. This amount of water reused is cies in each country. in its industrial processes ticularities. Is it worth noting among indicators equal to 1,320 Olympic-size swimming pools. back to the environment monitored are control of water collection sourc- The volume of effluents safely. The only exception is es and of disposal sites for treated effluents, In addition, through eco-efficiency efforts and generated by JBS was 151.7 the effluent volume sent to the effluent treatment programs and reuse and process management, JBS lowered the amou- million m³. JBS returns 87% public system for treatment. recycling strategies, as well as water use based nt of water used in its operations per ton of on production intensity. product produced by 4%.

Investments in effluent management and treatment totaled R$ 129 millions Investments in water management totaled R$ 39.1 million

Volume of effluents generated and treatedGRI 102-48 GRI 306-1

Water withdrawn by source GRI 102-48 GRI 303-1 2019 2018 2017

2019 2018 2017 Amount Amount Amount % % % (in m³) (in m³) (in m³) Amount Amount Amount % % % (in m³) (in m³) (in m³) Volume discarded - 79,381,190.65 52.32 72,165,406.03 (*) 49.10 59,806,238.85 (*) 51.21 water body Surface water 44,881,517.80 25.65 53,495,029.89 (*) 30.37 (*) 53,363,792.28 29.58 Volume discarded - Groundwater 60,191,597.88 34.40 55,599,013.82(*) 31.57 47,368,450.62 (*) 26.26 18,312,871.46 12.07 19,827,579.71 13.49 19,010,574.02 16.28 fertigation Public and 69,659,103.35 39.81 10,668,979.54 6.06 16,886,962.75 9.36 Volume discarded - third-party supply 46,749,741.05 30.81 49,505,829.21 33.68 22,917,222.07 19.62 public system Rainwater 125,782.72 0.07 158,451.27 0.09 172,538.48 0.10 Volume discarded - 7,287,937.79 4.80 5,474,609.14 3.73 15,052,391.53 12.89 Other sources 115,805.00 0.07 56,204,208.47 31.91 62,604,435.54 34.70 other disposal source

Total 174,973,806.75 176,125,682.99 (*) 180,396,179.66 (*) Total 151,731,740.96 146,973,424.09 (*) 116,786,426.46 (*)

* Data changed in relation to the last report * Data changed in relation to the last report

100 101 Annual and Sustainability Report // 2019 • JBS

Climate change GRI 103-1 GRI 103-2

For the last 11 years, JBS has conducted an annual Scope 3 emissions – Indirect emissions GHG emissions inventory, according to the resulting from the third-party fleet, com- international GHG Protocol methodology and has mercial air travel, decomposition of waste on published its global inventory on the Brazil GHG third-party properties and others. Emissions Protocol’s Public Emissions Registry Platform. in this scope are therefore considered to be emissions over which the Company has no JBS monitors and accounts for its operations’ responsibility or indirect responsibility. GHG emissions and reports them within scopes 1, 2 and 3. JBS is constantly looking for new applications and best practices to reduce Scope 1 emissions - Emissions coming from the carbon footprint of its operations. JBS Biodiesel unit in Lins (SP) the Company’s own fleets, fuels used to generate Initiatives by JBS to reduce direct emissions energy or heat in operations, effluent treatment are mainly focused on the volume of fossil ponds and enteric fermentation from animals on fuels and energy consumed. A major effort feedlots or Company farms, among others. is also being made to achieve a cleaner Energy energy matrix, to use waste in generating GRI 103-1 GRI 103-2 Scope 2 emissions – Indirect energy emis- energy, to gain more efficiency in treating sions from sources over which the Company has industrial effluents and to increase the JBS invests in adopting best practices related to energy consumption. The Company is conscious no responsibility or indirect responsibility. These logistics efficiency of the Company’s own of its responsibility to use renewable energies in order to reduce emissions in its value chain. This emissions come from the use of electricity. and third-party fleets. item is a priority for management, in terms of both the Company’s emissions and eco-efficiency, and it relies on a definite strategy as well as resources for implementation.

In 2019, JBS investments in energy efficiency projects worldwide reached R$ 59.6 million. GHG emissions by scope GRI 102-48 GRI 305-1 GRI 305-2 GRI 305-3 (in tCO2e) Energy matrix GRI 102-48 GRI 302-1 2019 2018 2017 (in GJ)

Scope 1 4,593,547.51 4,379,351.82 (*) 5,504,609.52 (*) Direct energy* 2019 2018 2017 Scope 2 1,615,547.85 1,550,524.56 (*) 1,780,515.80 Total GJ 69,978,035.37 67,804,701.67(**) 67,742,846,23(**) Scope 3 930,672.31 704,850.13 (*) 580,081.37 % non-renewable 54.23% 53.49% 57.19%

(*) Data changed in relation to the last report % renewable 45.77% 46.51% 42.81%

Absolute emissions at JBS rose slightly from 2018 to 2019. This was mainly due to the acquisition of (*) Considers direct energy to be electricity generation, use of fuel in steam generation and thermal heating (stationary combustion) and fuel consumption to operate the Company’s vehicle fleet (mobile combustion). new operations by the Company, such as Tulip, in Europe. (**) Data changed in relation to the last report

102 103 Annual and Sustainability Report // 2019 • JBS

Packaging is essential, especially when it comes to JBS’ responsibility to protect food and keep it safe from processing to the consumer’s table. That is why the Company promotes returning packaging to the production chain, in an effort to contribute to recycling and diminish the impact of landfill disposal.

All Company operations invest in research and development to find ways to reduce and optimize the use of packages, lowering the amount of waste generated by customers and consumers.

In 2019, JBS reused over 121,000 metric tons of waste to generate energy, which is 9% more than the previous year. This reinforces the Company’s commitment to optimize the use of resources in processes, using the circular economy as a premise. Over 1 million tons of waste generated by the Company were also reused, accounting for approximately 50% of all waste generated. This volume was used in composting, recycling, energy reuse and cogeneration. JBS Ambiental unit in Lins (SP)

Waste generated in operations GRI 102-48 GRI 306-2 (in GJ) Waste and packaging GRI 103-1 GRI 103-2 2019 2018 2017

Hazardous waste 32,706.93 1.50% 29,542.03 1.35% 9,356.68 0.50% Waste management is done at every JBS unit around the world, based on a commitment to reduce waste generated, appropriately dispose of waste, Non-hazardous waste 2,144,268.94 98.50% 2,161,720.3 (*) 98.65% 1,868,472.41 99.50% lower the amount of waste sent to landfills and decrease costs, always in 2,176,975.87 2,191,262.33 (*) 1,877,829.09 (*) accordance with current laws in the countries where it operates. Total volume of waste 1. Company landfill 19,260.53 0.88% 23,533.82 1.07% 22,828.2 1.22% Management of solid waste generated during internal production process- 2. Third-party landfill 469,614.1 21.57% 304,087 (*) 13.88% 245,691.27 13.08% es at JBS is part of the strategy to reduce GHG emissions. The creation of methane (CH4), a greenhouse gas, is a byproduct of waste that the Compa- 3. Composting 588,655.27 27.04% 645,906.82 (*) 29.48% 637,852.63 33.97% ny works to carefully dispose and treat to lessen its environmental impact. 4. Incineration 13,288.89 0.61% 14,273.75 0.65% 10,732.44 0.57%

JBS has undertaken a commitment to recycle or reuse the greatest pos- 5. Recycling 304,952.38 14.01% 377,462.21 17.23% 399,072.36 21.25% sible amount of waste, so as to reduce waste sent to landfills and other destinations, in addition to supporting initiatives to promote recycling of 6. Energy reuse 121,763.63 5.59% 111,986.3 5.11% 57,438.97 3.06% post-consumer packaging in Brazil, using reverse logistics programs. 7. Cogeneration 54,873.48 2.52% 38,834.48 1.77% 28,277.42 1.51% For JBS, the closed cycle system of reusing and recycling waste is funda- 8. Fertigation 527,198.68 24.22% 584,400.37 26.67% 387,726.39 20.65% mental to the sustainability of its operations. The Company develops a variety of initiatives to identify these opportunities. 9. Other 77,368.91 3.55% 90,777.59 4.14% 88,209.4 4.70%

(*) Data changed in relation to the last report

104 105 Annual and Sustainability Report // 2019 • JBS Animal welfare GRI 103-1 GRI 103-2 FP 10 FP 11 FP 12

JBS has a commitment to ensure animal welfare and develops actions related to The main procedures used to reinforce the adoption and applica- this theme as a global, strategic and priority agenda. Animal health and safety are tions of Company guidelines include internal and external training top priorities and best animal welfare practices are encouraged, because it is the for team members and suppliers, periodic internal audits, indicator right thing to do. panels, and constant verification of the need for investments and adjustments to processes.

Five fundamental freedoms of animals

1 2 3 4 5 Free from hunger Free from Free from pain, Free to express Free from fear and thirst discomfort injury or disease normal behavior and distress

The Company believes that product quality is directly related to transport of animals. These programs involve adopting appropriate processes and animal welfare and health. This is what is behind its dedication to practices, in addition to monitoring, training and documentation at every step in its fostering and making sure appropriate treatment and care at every extensive value chain. stage of the animals’ lifecycle. Actions and initiatives, carried out with extreme rigor and care by each JBS All of the Company’s business units have animal welfare programs, operation, are in line with the five fundamental freedoms of animals, as defined by prioritizing this topic from breeding to processing and including the Farm Animal Welfare Council (FAWC).

106 107 Annual and Sustainability Report // 2019 • JBS

All of the business units at JBS have multidis- equipment assessments and training programs ciplinary teams specialized in each species of to ongoing monitoring of procedures. All team animal, as well as teams who are responsible members involved with animal contacts receive for animal welfare at the corporate level. These specific training on humane animal handling teams focus on constant improvement and and slaughter. In 2019, R$ 474.7 million was invested in animal welfare, with development. They are responsible for ensuring compliance with the policies and procedures Those responsible for Quality Assurance at beef 19,542 team members trained on this topic. required by animal welfare programs, for cre- processing operations in the United States, Can- ating and enhancing Company practices, and ada and Brazil are specialized in humane han- for developing the technical specifications that dling and hold certification issued by the Profes- suppliers must adopt. sional Animal Auditor Certification Organization (PAACO). In Australia, certification is provided tered in cases where they are needed, always current laws, indicating JBS’s commit- In 2019, over 19,500 people worldwide under- by the Australian Animal Welfare Certification following veterinarian recommendations. An- ment to adopting best practices. There went training on animal welfare, which is 47% System (AAWCS). tibiotics are not routinely used preventively in are also certification audits, such as Glob- more than in 2018. Internal training involves production; they are only used as needed and al GAP and Certified Humane, applied to field teams, factories and drivers. Integrated and All operations comply with local technical pending an assessment by veterinarians. Use of Seara units, the National Feedlot Accred- third-party poultry and pork producers and cat- standards and laws, as well as the principles of medications is registered and tracked through- itation Scheme (NFAS), for Australian tle suppliers are also given technical instructions, animal freedom and humane slaughter. Due to out the integrated and Company chains. operations, and PAACO, at JBS USA and training and support on animal welfare guide- commercial issues, JBS follows religious guide- Friboi operations. lines, procedures and policies to adopt. lines to respect the cultural characteristics and JBS’s animal welfare programs are assessed us- diversity of the markets in which it operates. ing key performance indicators (KPIs), which are Any team member or supplier violations Every JBS production unit has Quality Assurance audited by both internal teams and indepen- of the JBS Animal Welfare Program result professionals and corporate teams, who are JBS works to reduce the use of antibiotics in dent consulting firms, as well as by customers in disciplinary processes that could lead responsible for overseeing the implementation animals year after year, across the entire supply in the domestic and foreign markets. Most are to termination of employment or con- of the animal welfare program, from facility and chain. Antibiotics are currently only adminis- focused on practices beyond those required by tracts to supply raw materials.

Global animal welfare ranking

Caring for food quality and safety is an ongoing process that JBS applies at every stage of its production chain and it starts with caring for animals. The results of these initiatives can be found in the Business Benchmark on Farm Animal Welfare (BBFAW), an annual global report of best practices in animal welfare that is developed by two international NGOs, World Animal Protection and Compassion in World Farming (CIWF), and by Coller Capital, a global private equity firm. In 2018, JBS remained one of the best companies in the world in relation to Access the Pig farm in Seara (SC) Animal Welfare practices, placing in tier 3. BBFAW site here

108 109 Annual and Sustainability Report // 2019 • JBS

The Company oversees every stage in the How are animals transported? animal control and welfare process, from breeding to transportation to production. Animal transport between ranches and farms and the slaughter units uses the following practices:

Breeding Trained teams are responsible Breeding is a fundamental to animal wel- for loading trucks, performing fare. Each protein chain is served according loading and unloading in way to best local practices, in line with their that minimizes animal stress. particularities.

Breeding of poultry, hogs and cows involves Company or third-party operations. Animal health and safety are top priorities and are common to every product line, which is why they are guaranteed through technical visits, manuals, procedures and policies, audits and training.

Practices such as cloning and genetic engineering are not used in the JBS supply chain. The Company also does not use any type of growth hormone, in accordance with Brazilian laws.

Transportation Distances or route times between At JBS, animals are transported by spe- ranches and farms and production The transport routine is managed cialized and trained drivers using Com- units are pre-defined, providing using indicators, such as animal pany or third-party vehicles, designed to animals with more comfort. density, so as to guarantee that promote animal welfare. This procedure appropriate practices are adopted. prevents injuries and minimizes animal stress during transportation, from de- parture to arrival. Maximum transport JBS Transportadora float fleet in Lins (SP) distances and times are pre-established, with procedures for resting, feeding and supplying water adopted according to the timeframes set. Drivers are trained on Production safety procedures in the event of emer- gencies while transporting animals. The Company is constantly investing in improving facilities, in acquiring the best equipment available and in training specialized teams, who are at plants to oversee receipt of animals and guarantee their welfare up to the moment of processing. Performance in every stage is regularly evaluated and audited, internally and externally, using specific metrics.

110 111 Our Business Care from every aspect

JBS Brasil Friboi, Swift, JBS Couros and JBS Novos Negócios

Seara

JBS USA JBS USA Beef, JBS USA Pork and Pilgrim's Pride 112 Care from every aspect Annual and Sustainability Report // 2019 • JBS

Headquarters in São Paulo (SP)

Global business structure GRI 102-2

JBS develops its global business strategy based on seven pillars: UNITED STATES: strong brands, a leading position in the markets where it operates, • JBS USA Beef production in locations with competitive advantages, distribution • JBS USA Pork EUROPE: CANADA : structure in the largest consumer markets, diversification by protein - JBS Live Pork • Pilgrim’s Pride and geography, operational excellence, and value-added products. - Plumrose • JBS Food Canada - Moy Park • Pilgrim's Pride - Tulip JBS has two main structures: one headquartered in Brazil and another in the United States. JBS in Brazil includes Friboi, Swift, JBS Couros and JBS Novos Negócios, in addition to Seara. While operations headquartered in the United States are grouped under JBS USA and include JBS USA Beef, JBS USA Pork and Pilgrim's Pride, a conglomerate of companies with significant operations in Central and North America, Europe and Oceania.

The goal of this organization is to optimize the Company's competitive advantages in the biggest markets in the world, with a broad portfolio of products, synergies in the value chain and high consumer brand recall.

Business have the autonomy to implement choices related to management, MEXICO: innovation and treatment of themes material to JBS, based on their regional • Pilgrim's Pride realities, provided they are aligned with the values and principles, as well as the global strategy, that guide the Company's action. At the same time, with the support of the corporate area, business units share knowledge, good practices and BRAZIL: management systems with each other. • JBS Brasil - Friboi The result is a model geared toward agile decision-making, operational excellence, - Swift AUSTRALIA AND NEW ZEALAND : and resilience in the face of challenges, whether situational or commercial. This - JBS Couros • JBS Australia is what enables JBS to meet market demands and fulfill its purpose of providing - JBS Novos quality food, with ethical action and more sustainable production. Negócios • Seara

114 115 Annual and Sustainability Report // 2019 • JBS

Comprised of four business units headquartered in Brazil, operating in the beef market and with consumption-related GRI 102-16 items (Friboi and Swift), leather (JBS Couros) and on a series of activities related to the value chain at the other businesses (JBS Novos Negócios), JBS has approximately 54,000 team members, supplying its products and services JBS Brasil to the entire world. Friboi, Swift, JBS Couros and JBS Novos Negócios

OUR BUSINESS

117 Business description Annual and Sustainability Report // 2019 • JBS

Main brands

VERSÃO COM HOTSTAMPING

FRIBOI PANTONE 877 C DEVE SER SUBSTITUÍDO PELO HOTSTAMPING PRATA

A market leader in Brazil, Friboi Map of operations revolutionized the market by "de-commoditizing" Brazilian beef and becoming a reference in the industry. The Company offers some of the brands most recognized by Brazilian consumers, such as Friboi, Reserva NUMBER OF Friboi, Maturatta Friboi, Do Chef TEAM MEMBERS: Friboi and premium brands 1953 Friboi and Swift Black. With offices 40,347 PA in over 150 countries, it is the best- selling Brazilian beef brand on the foreign market. TO AC RO BA MT

37 processing units MG

MS 5 feedlots SP RJ

PR 18 distribution centers

RS 7 prepared foods units

118 119 Annual and Sustainability Report // 2019 • JBS

SWIFT

Founded in 1855, in the found in a variety of categories, with a broad United States, Swift is a part portfolio of nearly 500 products, including of the lives of thousands of beef for everyday grilling, sustainability- people worldwide. Using certified fish, pork, lamb, poultry, snacks, a unique and innovative side dishes, vegetables, desserts, seasonings strategy to provide services, for grilling and more. The Company has its the brand fulfills its mission own stores and stores at partner retailers, in of changing how the world's addition to mobile and online shops, aimed people consume and at providing more comfort and practicality in purchase protein. Swift is making purchases at over 120 points of sale.

Brand pillars

Delicious & Healthy

However,and wherever whenever

Respect for the Planet Feeding a better world

Low Price

NUMBER OF TEAM MEMBERS: Your meat Chef and Expert Swift Oscar Freire Store in São Paulo (SP) 2,214

120 121 Annual and Sustainability Report // 2019 • JBS JBS COUROS

Founded in 2009, JBS Couros is the world's such as Authentic, aimed at the furniture seg- largest leather processing manufacturer in ment; Cambré, for footwear and leather goods; the wet blue, wet white, semi-finished and and Virgus, for the automotive sector, respond finished segments1, with offices in South and to market trends. In 2019, the revolutionary North America, Europe and Asia and produc- Kind Leather was launched, a product char- tion units, distribution centers and commer- acterized as being even more sustainable and cial offices serving the automotive, furniture, that uses a production process that reduces footwear and leather goods sectors, among water and energy consumption, as well as CO2 others, around the world. Company brands, emissions during transport.

1 Leather types, classified by stages and techniques.

Map of operations

NUMBER OF Main brands TEAM MEMBERS: GERMANY 6,866 UNITED STATES CHINA

21 production units ITALY VIETNAM

4 commercial offices MEXICO

3 cutting plants BRAZIL

5 distribution centers URUGUAY

ARGENTINA 3 showrooms Itumbiara (GO)

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JBS Biodiesel in Lins (SP) JBS NOVOS NEGÓCIOS

JBS Novos Negócios develops operations dedicated to transforming coproducts and animal protein processing waste into high value-added products, such as biodiesel, collagen, casings for deli meats, animal feed, pharmaceutical inputs, hygiene and cleaning materials and more, sold in the Brazilian market and exported to over two dozen countries. It also includes companies providing strategic services to JBS, in the metal packaging, trading, transport, recycling and waste management segments.

The rationale governing JBS Novos Negócios is to allow a closed cycle to be formed, where waste from one particular operation serves as the raw material for another, in a movement of innovation, efficiency and sustainable practices, promoting a circular economy.

Map of operations

JBS Ambiental

JBS Biodiesel

Novaprom

MT JBS Natural Casings

GO JBS Higiene & Limpeza MG MS

JBS Transportadora NUMBER OF SP TEAM MEMBERS:

JBS Embalagens Metálicas 4,195 RS Complexo JBS Novos Negócios - JBS Feed Solutions and Orygina

124 125 Biolins Unit in Lins (SP) Annual and Sustainability Report // 2019 • JBS

NOVAPROM Bringing proteins and ingredients to life The Company's two plants, located in the cities The world's largest producer of high- of Lins and Barretos, in the interior of the state ly functionalNOVAPROM beef proteins. Located in of São Paulo, make steel cans for products that the city of Guaiçara (SP), this unit offers need to be protected from physical, chemical innovativeNOVAPROM solutions in ingredients for a and biological actions, like in the food industry, variety of food industry sectors. Through for example. With an annual production capaci- its international operations, exports are ty of approximately 1 billion cans, it is among the sent to over 20 countries on every conti- largest in its sector. Cans for pre-cooked meats nent except Antarctica. This business unit (luncheon meat), sardines and tuna (pull tabs), operates in a range of segments, such vegetables and tomato-based products, in addi- as: meat (hamburgers, fresh and cooked tion to aerosol packaging, are among the items sausages, hams, seasoned cuts, etc. ), Business units manufactured by JBS Embalagens Metálicas. dairy and baked goods, as well as special applications, such as food supplements and pharmaceutical products.

JBS Ambiental has ten recycling units, in the With two factories, located in Campo Verde Sells raw materials in the food, hygiene and states of Goiás, Minas Gerais, Mato Grosso do Sul (MT) and Lins (SP), it is the world's largest cleaning, and biodiesel segments. Among prod- and São Paulo. In 2019 alone, two waste centers verticalized producer of biodiesel made from ucts offered are vegetable oils, animal fats and The factory, in Campo Grande (MS), is a were opened, including plants in Senador Cane- beef tallow and the first company qualified chemical products. reference in facilities and technology. It’s do (GO) and Nova Andradina (MS). The Compa- to sell credits obtained through Renovabio geared toward production of inputs for ny provides products and solutions developed (see more in Climate Change, page 175), the pharmaceutical industry, with a focus from industrial waste, such as plastic, wood and a Brazilian government program aimed at on supplying raw materials for research metal, which are transformed into trash bags, reducing emissions based on the obligations Serves JBS and other customers through 35 centers, molecular development, genet- tarps, bags or plastic covers to be used in JBS undertaken in the Paris Agreement. The branches spread across Brazil. It has its own ic therapies and vaccines. The source of operations. Manages and treats non-recyclable Company uses waste as raw material, such fleet of 1,100 trucks, tracked and with real-time supplies is JBS itself, which guarantees post-industrial solid waste, tracking its lifecycle as recycled used cooking oil. The Lins (SP) telemetry control. Operating in the live animal that products are 100% traceable. and providing for correct disposal of this waste. and Campo Verde (MT) units will also receive cargo, containers, dry and refrigerated cargo and investments, aimed at improving the industrial leather segments. park and increasing production. Operates in acquisition of new The largest producer of natural cattle-based vehicles for JBS companies and in the casings in the world and a supplier for the larg- sale of used trucks and trailers, with est food manufacturers, with two processing The largest producer of soaps and bar soaps in average annual sales of 2,000 vehicles. units in Brazil: Goiânia (GO) and Ituiutaba (MG). the B2B segment, serving the biggest hygiene The production unit, in Campo Grande (MS), pro- Recognized for its supply capacity, quality and and beauty brands in Brazil, as well as custom- duces plasma and blood products made using the traceability of its products, used to make deli ers in Nigeria, Cabo Verde, Angola, Argentina, chilled adult bovine blood, serving 100% of the 1 The main global initiative responding to climate change meats, like salamis, and to manufacture strings Peru, Colombia, Paraguay and Uruguay. The demand from JBS's own units. With their high and reinforcing countries' capabilities to deal with the impacts resulting from these changes. Signed by 195 for musical instruments, tennis rackets and sur- plant, located in Lins (SP), also makes soap base nutritional value, products serve as ingredients countries, its main commitment is to keep the increase in global average temperature at less than 2°C above gical sutures, among other things. for plant or animal based and glycerin soaps. for manufacturing poultry and hogs feed. pre-industrial levels.

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Performance

Highlights for the year

Friboi In 2019, Friboi grew to fulfill an increase ume up 46% year-over-year. One factor behind in protein consumption worldwide and this growth is consumer access to this prod- in the domestic market. One of the main uct, led by 1953 Friboi, which was made easier highlights was the Top Grade Butcher when the brand became available at retailers channel, which reached over 1,000 stores with gourmet butchers. during the year. This service is aimed at developing a special sales channel at On the foreign market, the Company decided partner retailers, helping them to man- to segment brands by market, with major in- age their meat departments, training vestments in premium and high value-added professionals and preventing losses. In Rio products, such as Grill Steakhouse, for Europe, de Janeiro, for example, Supermercado and Friboi Black in China, as well as in seg- Guanabara began the year with a pilot menting customers by brands and channels, project at its Barra da Tijuca store, and by serving niche markets such as food service, the end of 2019, the program had been B2B, retail and e-commerce. In Dubai and implemented in 100% of stores. China, the Company segmented brands by customer, a strategy that has had positive re- Friboi also saw an opportunity for a sults. The 1953 Friboi line grew by 100% in the unique experience with 1953 Friboi foreign market in 2019. by Pão de Açúcar, implemented in 34 retail stores in São Paulo, Rio de Janeiro In the last year, Friboi has entered the digital and Brasília. The initiative features the world with the launch of an Instagram profile, premium brand, including, in some of aimed at bringing its brands even closer to them, dry-aged beef. The experience consumers. By December 2019, it already had of forming this product mix was a high 10,500 followers, 14 million impressions from point for the brand this year. posts published on Instagram and 7.5 million interactions (likes and comments). Partnerships were held with supermarkets as well as with restaurants and The Friboi Pecuarista app, available for iOS the largest restaurant chains in Brazil, and Android, is aimed at simplifying the guaranteeing Friboi's place as a mar- connection between suppliers and the ket leader. Major partnerships such as Origination area at Friboi, while also allowing those with McDonald's, Bobs and Burg- producers to communicate with the Company er King were renewed based on perfor- with the same quality and speed. Prior to the mance in service, sustainability, quality app's release, all cattle acquisitions were done and safety, among other factors. using two business modalities: spot pricing and cattle futures contracts. Now, livestock The premium beef segment was anoth- producers have a third option, trading via a er highlight for the year, with sales vol- digital market.

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JBS Couros The launch in March 2019 of Kind Leather, a revolutionary type of leather, mostly due to its sustainable attributes, was one of the main highlights of the year for JBS Couros. With a patent filed by the Company, Kind Leather uses a production process that reduces water consumption by 46%, energy consumption by 20%, and CO2 emissions during transport by 65%.

Another high point for the year was expansion of the Company's Vietnam unit. With an over US$ 5 million investment during the period, the plant practically doubled Swift Oscar Freire Store its built-up area and opened in São Paulo (SP) a showroom, a space where customers have the chance to see and handle finished furniture items. Swift In 2019, Swift created new products success in sales. Another investment is in the Conceria Priante and lines, aimed at serving customer sustainable fish line, with guaranteed origin (www.conceriapriante.com) demand. In addition, there continues and environmental conservation. is focused on the luxury to be a focus on practicality, with the and premium markets, launch of prepared dishes and sea- To reinforce a day-to-day presence in the lives with collections featuring soned meats, reinforcing the brand's of Brazilian families, other innovative products innovative interpretations concept of being there at every meal. were launched, such as frozen fruit, a frozen for leather goods, joining mushroom mix and frozen vegetables, and creativity and tradition. Swift reinforced its Gran Reserva healthy snacks. For 2020, Swift will work to Today, it is an international premium line of grilling products, expand, especially by consolidating store-in- reference in the leather with cuts of beef carefully selected a-store service, where the Company partners industry, as one of the biggest from British breeds. Launched in with major retail chains to assemble personal- players in the fashion, leather January 2019, it quickly became a ized spaces managed by Swift. and furniture segments.

Itumbiara (GO)

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JBS Novos Negócios

In 2019, JBS Biodiesel saw record production In October 2019, Lins (SP) was the first pro- The Company has also developed new prod- With the plant's opening, aerosol of 265.7 million liters of biodiesel, 2% gram-certified efficient ofuelbi plant, and in ucts using recycled plastic products for use production capacity will be increased more than in 2018. Of raw material used in February 2020, the Campo Verde (MT) branch by JBS businesses, such as tarps and plastic to over 220 million packages annually. production, 18% (around 47.5 million liters) was also certified. RenovaBio is a federal gov- racks for lining truck beds, plastic pallets for Moreover, the move into the aluminum was from reused cooking oil. This reuse ernment program launched by the Ministry of transporting products and oxo-biodegrad- packaging segment, with a focus on means that around 1.2 trillion liters of water is Mines and Energy, aimed at expanding biofuel able shrink film. This last product meets the the cosmetics - deodorant market, prevented from being contaminated, enough production in Brazil to meet the demands of requirements of SASO standards regulating will be a milestone for the Company. to meet the daily needs of nearly 30 million the Paris Agreement. (Learn more in Environ- the supply of plastic packaging to the Saudi JBS Embalagens Metálicas has also people for an entire year, according to the mental stewardship) Arabian market. invested R$ 25 million in expanding United Nations1. lithographic printing capacity and In 2019, JBS Ambiental managed 23,904 met- JBS Embalagens Metálicas invested over R$ modernization of the Lins unit's JBS Biodiesel became the first biodiesel com- ric tons of solid waste, including plastics, met- 80 million to build a new plant, geared ex- production lines. The new, latest pany authorized to take part in a new Brazilian als, paper and other types of waste along with clusively to production of steel (tinplate) and generation equipment uses German policy to reduce greenhouse gas emissions, 5,457 light bulbs. It also produced over 2,189 aluminum cans. The operation is set to start and Swiss technologies and started with the authorization of the country's Na- metric tons of recycled plastic products, such in the first half of 2020. Located in the inte- operating at the end of 2019. tional Agency of Petroleum, Natural Gas and as trash bags, protective pallet covers, trays rior of São Paulo, in the city of Guaiçara, the Biofuels (ANP). Through this certification, the and shrink wrap, in addition to more than new plant will contribute to creating new job JBS Transportadora purchased 408 Company is now qualified to issue decarbon- 2,432 metric tons of recycled plastic resins, opportunities in the region. With cutting-edge new vehicles to replace 397 used ones. ization credits, called CBios, within the Renov- for a total of approximately 5,000 metric tons technology and a focus on Industry 4.0, the This took the Company's fleet from an aBio program for the biodiesel it produces, the of recycled plastic products. This is 11% more unit has three production lines dedicated to average age of 1.89 years at the end of raw material of which is bovine tallow. than the previous year. serving the domestic market. 2018 to 1.23 years old in 2019.

1 https://www.ana.gov.br/noticias-antigas/dia-mundial-da-agua-incentiva-cooperaassapso-entre.2019-03-15.6545387713

JBS Biodiesel - loading biodiesel into the plant

132 133 Annual and Sustainability Report // 2019 • JBS Products and services

Quality

Quality assurance for products and services is a non-negotiable JBS business units in Brazil develop actions oriented toward fulfilling quality commitment at JBS. Based on pillars that include innovation, quality commitments in the foods area as well as in products and services. At all JBS foods and guarantee of origin, the Company tracks from production business units, this process is connected directly to the Global Food Safety and to sale. A multi-channel system receives any grievances and Quality Assurance Department, headquartered in the United States and reporting complaints customers and consumers may have in relation to to the Global CEO (learn more in Food Safety and Quality). products and the many aspects of the business. Each Business Unit has a specialized team, who oversee the Food Safety and Quality Assurance Programs, in collaboration with the Global Department. All Friboi production units hold certifications from the Federal Inspection Service (SIF) of the Ministry of Agriculture, Livestock and Supply (MAPA), certifying the Company to export and sell its products on I've been eating the domestic market. Swift products for around four years. I buy the brand because it has a standard of quality that I know is right for me. In my view, the Swift difference is the stores and the service the “people provide. It's practically another part of my home."

Mechanisms for grievance and complaints

• Phone: 0800 11 5057 • E-mail: [email protected] • Social media: Facebook, Instagram, Twitter • Reclame Aqui Romeu Bianchi Junior • Institutional websites: Friboi and JBS Swift costumer

134 135 Annual and Sustainability Report // 2019 • JBS

The Company maintains laboratories at its units around the world that specialize in microbiological and biotechnology analyses, providing indicators of food safety for its various brands, assuring product quality.

Friboi has been RA 1000 Seal-certified by Reclame Aqui since 2018. One of the most important initiatives in the Cus- tomer Service sector in Brazil, this seal is proof of certified companies' commitment to aftersales service, in addition to a high degree of trust in their brands, products and services. One of the initiatives that helped to consolidate Friboi in this ranking was social media monitoring, Friboi Friboi has a policy of continual quality improve- done in an effort to understand consum- The quality assurance process at Friboi is based on rigorous management, built on four pillars: ment for its processes and products, perfectly er needs, from involvement to final reso- safety, quality, protection against fraud and protection against contamination. meeting the needs of its customers and share- lution with the Customer Service Center. holders, and of investing in team member training, consumer safety assurance, and following Internally, Friboi developed its Contin- legal, community and environmental require- ued Improvement Cycle (CMC) program, FOOD SAFETY FOOD FRAUD ments, with a focus on sustainable development. fostering studies on improvements to Food safety Protection against food fraud production processes and allowing for Protect food from contamination Protect against deliberate Actions include everything from careful pro- recognition of projects and their cre- by agents that could be found in food fraud caused to generate curement of raw materials to audits of product ators, replicating some of these good the production chain. economic gains by tampering display standards at points of sale, up to strict practices at other units. The program is with products or providing controls in the production and distribution pro- based on formation of teams by Compa- FOOD QUALITY false information. cess. To assure each step of the process, teams ny team members, who map opportu- Food quality and customers are trained, with annual refresh- nities for improvements, to develop and Assure compliance with pre- FOOD DEFENSE ers for other process agents, including exchange apply solutions. Results are measured established food characteristic Food defense of experiences on best practices. and presented at local and national con- and performance standards, and Protect food from interna- ventions, where there is an intense ex- meet industry, customer and tional contamination that Among the main actions adopted to ensure change of knowledge and suggestions, consumer specifications in an is unlikely to occur in the that the products that reach consumers meet aimed at enhancing and replicating the effort to standardize products. production chain. the highest standards of qualityand safety are best projects. management and food-related risk assessment systems, committees and discussion forums In 2019, the Company strengthened with area specialists, certification processes, and relations between customers and live- Food Safety and Quality Assurance management at JBS is based on monitoring three areas: accurate labeling systems, in addition to regular stock producers, reinforcing transpar- internal and external audits and inspections of ency in adopting good sustainability the Company's facilities by health missions as and production practices. In addition, a Value Financial Indicators well as by customers. partnership agreement was signed with chain results related to the Brazilian Nelore Breeders Association consumer Friboi invests in modernization and continual (ACNB), participating in 26 rounds of relations and improvement of its Food Safety and Quality As- the Nelore Circuit, allowing producers to satisfaction surance area, investing R$ 214 million in 2019. closely monitor performance and quality.

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During the year, Friboi also made progress in its Supply Chain Protocol program (https:// jbs.com.br/en/quality/supply-chain-protocol/), certifying compliance with criteria that assure food safety and meet the highest standards of customers and consumers. Notable among Itumbiara (GO) improvements is the creation of a specific page for this topic on the JBS intranet, to consult certifications, a check list, training and JBS Couros other documents related to the protocol; its application to a group of fresh and prepared It is a policy at JBS Couros to perfectly meet its final product according to global standards. food products for export; and, moreover, customers' needs, investing in team member To do this, the Company has laboratories establishment of a new visual identity, to development and continually improving pro- specialized in leather analysis at its units facilitate communication and understanding cesses and products. To do this, quality man- around the world, providing indicators show- of the importance of this initiative. agement is built on four guiding pillars: ing that products meet the strictest standards of quality. The Supply Chain Protocol brings togeth- Management and standardization systems: er strict protocols on topics such as animal aimed at assuring that all JBS Couros units JBS Couros holds ISO 9001:2015 quality man- welfare, traceability, sustainability, operation, work in a standardized and systematic agement system certification at 12 plants, in production, quality, industrialization and manner, aimed at attaining minimum addition to IATF 16949:2016 (auto industry marketing. Parameters for the Protocol are variability in processes and products, resulting standards) certification at three plants and SIF adopted based on internationally recognized in customer satisfaction. (Federal Inspection Service) approval to sup- initiatives, such as the British Retail Con- Customers: quickly and effectively meet, pro- ply shavings and clippings at ten production sortium (BRC), European Union Regulation cess and respond to customer requests. units. One plant holds NBR 16296 certification, 1099 on Animal Welfare, the AMI Protocol on Quality control: guarantee that products are the national Brazilian Leather Certification of Animal Welfare in the United States, and the always authorized according to customer speci- Sustainability (CSCB) standard. European Union Regulation on Traceability fications and the JBS Couros quality standard. Laboratory: assure that products are tested The Company moreover has 17 units certified In order to guarantee certification, the according to standards set by JBS Couros, the by the Leather Working Group (LWG), all of production units undergo a five-step process customer and nationally and internationally which received top marks in traceability, in that includes, among them, a gap analysis, recognized standards. which the Company is a market leader. The which is done by an outside consulting firm, LWG is an international initiative made up of and specific training. All Brazil units operate To assure leather quality, constant monitoring companies, retail chains and suppliers, pro- according to the guidelines of the Protocol and should be applied across the chain, which moting efficient and sustainable environmen- undergo annual external audits, performed is why Quality team members undergo fre- tal practices in the leather industry. by the Brazilian Certification System (SBC).In quent training and are present from control 2019, all 36 Friboi production units passed and survey of raw material data, to verifying JBS Couros also invests in quality, aimed at and kept their seals. Lins (SP) all inputs used in the process, and up through modernizing its processes and services. In detailed assessment and authorization of the 2019, R$ 57 million was invested.

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Innovation

Friboi JBS Couros At Friboi, innovation seeks to Aimed at developing products with greater added-value, differentiate products in the market; it such as semi-finished and finished products, JBS Couros involves technology and a relationship constantly invests in research, development and innova- of intense partnership with suppliers, tion. The Company's Conceria Priante unit serves luxury including learning about all of the and premium markets, with a production facility and possibilities in its portfolio and working research and development center in Italy. This region is a to develop them. Demands related to Swift reference in leather and a hub of innovation development, this topic are forwarded to Research One of the most innovative bringing together the world's top specialists in materials, and Development (R&D) teams, which businesses at JBS, Swift has a machinery and equipment, and chemical products, in then study solutions. business model with a unique addition to its proximity to the Milan fashion market. and differential strategy In the area of packaging, the main to providing services, with With 20 dedicated professionals, the Conceria Priante results were gains in increasing the Company stores and stores at R&D center is tasked with creating disruptive and number of products per box shipped, retail partners, in addition to incremental innovations for the Company's products resulting in fewer cardboard boxes online stores. and processes, with a capacity to create four product being used. In financial terms, savings innovations daily. Notable among them are the use from innovations in cardboard boxes With a comprehensive control of biopolymers in the production process and the use equaled R$ 10 million per year, not to system across its production of renewably-sourced finishes like waxes, caseins and mention the environmental gains from chain, from selecting animals protein- and silica-based products. reducing raw material usage based on to strict temperature controls transported product weight. during transport and display at To boost the production process and results, JBS Couros points of sale, Swift's mission is has established partnerships with customers, the chemical One highlight of innovation at Friboi is to change how people con- and equipment industries and academic researchers. One in the Sourcing area. The Company de- sume and purchase protein. of the partners, who conducts radical innovations aimed at veloped an unprecedented service and saving water and chemicals in retanning leather, support- sales platform for feeder cattle, Friboi This same care is found in the ed JBS Couros in the production of Kind Leather, a type of Pecuarista (see more on page 129). production process. Alterna- leather with a 46% savings in water and a 41% reduction in tive distribution models, such formulation costs (see more on the following page). Another initiative worth mentioning as vans that function as mo- is logistical transport via train, which bile points of sale, and deliv- In 2019, over 4,000 projects and 2,000 R&D samples were currently accounts for 36% of Friboi's ery service, offering a unique made in the leathers division. The chief improvements operations. This investment lowers experience, with almost im- included creating new leather goods for customers, operation costs and guarantees mediate delivery or the ability optimizing industrial processes, samples to increase new logistical agility, while also reducing to schedule deliveries, also customer numbers and analytical procurement of statisti- the greenhouse gas emissions used in show the business’ capacity cal databases. transporting the same product volume. for innovation. Targets aimed at items such as planning assertiveness, deadlines for submitting developments and samples, approval levels for projects and costs, and others, were all met by the business. Investments in innovation totaled R$ 1.9 million.

Itumbiara (GO)

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Kind Leather project

In 2019, JBS Couros launched Kind Project sustainability data Leather sustainable leather. With a more efficient and innovative production process, this new leather offers the Traceability Eco-efficiency Productivity industry and society a range of relevant environmental, social and economic The highest score in benefits, through smart use of raw traceability from the LWG: materials and resources, traceability, sustainable origin and eco-efficiency.

The Kind Leather philosophy 100% Carbon emissions consists of a belief that in order for a lowered by Efficiency in material to be truly sustainable, the finishing stages entire production chain should be Sustainable origin raised by considered in its use. That means that it is not enough for a given material to 65% be produced sustainably throughout 9% the process if a considerable amount Water consumption in the of it is discarded at the factory as Over tanning stage reduced by waste. That is why JBS Couros, through Chemical product Kind Leather, has offered the industry consumption lessened by the solution kindest to the world: ,000 farms remove the hide parts that are not as 90 46% frequently used right at the start of 28% the process, since this material can still be used as raw material in other Chemical consumption is industries, such as the pharmaceutical and food industries. This means waste 590,000 is turned into raw material, making a km2 monitored significant contribution to the entire 42% chain's sustainability. more efficient Cut yield 8 to

The Company only works with raw materials produced according to higher the highest sustainability global 10% 100% Energy standards. This guarantees that leather compliance in the consumption comes from areas not affected by last raw material fell by deforestation, invasion of indigenous (livestock) lands or conservation unit, forced purchase labor conditions, rural violence and audits. agrarian conflicts. 20%

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JBS Novos Negócios

JBS Novos Negócios works with management of related businesses and seeks to add value to coproducts of animal origin, such as biodiesel, collagen, personal care and cleaning products, natural casings, solid waste management solutions, recycling, metal packaging and transportation. In 2020, JBS Ambiental hopes to move forward in growing its share of The goal of the Company's Research & Development (R&D) team is to transform resin recyclable products and expanding the number of waste management generated by the Company into new products. branches at JBS units.

In 2019, the following innovations stood out in the JBS Ambiental pipeline:

• Plastic tarp development for the JBS Transportadora: used to line beds on trucks carrying inputs to Seara operations, the tarp is made from plastic waste generated at JBS operations and collected by JBS Ambiental management units. • Development of oxy-biodegradable shrink wrap: a product made using recycled material, which meets the requirements of SASO standards regulating the supply of plastic packaging to the Saudi Arabian market; • Development of recycled plastic pallets: used to move materials or as packaging at meatpacking units, recycled pallets are made from plastic waste collected by JBS Ambiental management units. • Recycled plastic racks: used to line JBS Transportadora truck beds used in transporting leather to JBS units. This product is made from plastic waste collected by management units.

JBS Ambiental in Lins (SP)

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With factories in Lins (SP) and Cam- JBS Ambiental in po Verde (MT), JBS Biodiesel was the NovaProm in Guaiçara (SP) Lins (SP) first company in the industry to receive authorization from the National Agency of Petroleum, Natural Gas and Biofuels (ANP) to participate in a new policy to reduce greenhouse gas emissions in Brazil, through certificates to sell Decarbonization Credits (CBio), as established by the RenovaBio program, which are obtained from production of biodiesel, the main raw material of which is bovine tallow.

JBS Transportadora has its own fleet JBS Transportadora float fleet in Lins (SP) of approximately 1,100 trucks, all of which are tracked and controlled using real-time telemetry, an innovative procedure for route management and optimization of the transport process. In addition, the cattle transport fleet is entirely adapted to guarantee animal welfare. In line with the complemen- tary JBS Transportadora business, TRP Seminovos works with acquisition of new vehicles for JBS and with the sale of used trucks and trailers. NovaProm has two food ingredient factories and is ISO 9001-2015 and FSSC 22000 certified. In addition, it has a comprehensive system for tracing raw materials and its products are halal certified. While JBS Natural Casings provides high-quality casings of animal origin for the entire deli meats segment, including salami, sausages and more. The Company is the world's largest Orygina produces pharmaceutical producer of this product and is certified according to the strictest quality standards using state- Orygina in Campo Grande (MS) industry inputs, with a focus on devel- of-the-art tracing technology. oping raw materials for research centers, molecular development, genetic The use of technology to favor improvement to processes is a hallmark of JBS Higiene & Limpeza, therapies and vaccines. The Company the largest producer of soaps and bar soaps in the B2B segment, whose customers include the currently invests in over 100 assets for biggest hygiene and beauty brands in Brazil and around the world. The Company also works to pharmaceutical inputs made using cat- produce soap base for plant or animal based and glycerin soaps. tle organs, such as the pancreas and liver. Geared toward production of plasma JBS Trading sells raw materials to the food, hygiene and cleaning, and biodiesel segments, such and powdered blood, processed using as animal fats, vegetable oils and chemical products, in addition to supplying other segments. refrigerated adult bovine blood, which serve as ingredients in manufacturing One of the largest producers in this segment in Latin America, JBS Embalagens Metálicas has poultry and pork feed, JBS Feed Solu- the capacity to produce 1 billion cans annually to hold products, geared toward providing pro- tions meets 100% of the demand from tection against physical, chemical and biological actions, for food products as well as a line of JBS production units. aerosols for different segments.

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Swift Awards and recognition Named the most beloved beef brand in the city of São Paulo, according to a survey done by Veja São Paulo magazine in partnership with the Market Research Friboi and Intelligence area of Abril. According to the survey, taken among over 1,000 • Ranked as the best beef by 34% or respondents for the fourth time internet users, 36.7% said that Swift was in a row in a survey by Datafolha. The city of São Paulo is one of the their favorite beef brand, garnering it 1st biggest markets for the premium ranges, such as 1953 Friboi and place in the Comer&Beber 2019/2020 Swift Black, as well as for Maturatta Friboi products. ranking - and is proof of the good • The business was also chosen as the best supplier in the meats experience consumers have with its segment in the APAS Acontece Award for the third year running, in products and services. addition to winning the Tito Muffato Award. • Nominated for the second consecutive year in the Época Negócios JBS Biodiesel Reclame Aqui Award, created to highlight companies with excellent service rates on Reclame AQUI. Friboi was among industry The first factory certificated to sell companies with the best assessments on the website, a reference Decarbonization Credits (CBio), as in fulfillment of consumer rights. Communication channels are established by the RenovaBio program, evaluated in rankings or consumer defense initiatives. Reclame as a result of biofuel produced from Aqui also publishes a ranking that highlights the 20 companies renewable resources. with the best scores in rates for: best solution, I would repeat business and best average scores. In 2019, Friboi was ranked in the JBS Biodiesel is the first and only three rates mentioned. company in Brazil to hold ISCC • "The best-selling beef in Brazil" seal, given by the Nielsen (International Sustainability and Carbon consulting firm. Certification), allowing it to make sales • Recognized in two categories at Nelore Fest 2019, an award given to Europe, since 2013. out annually by the Brazilian Nelore Breeders Association (ACNB). • First place as the Top Supplier 2019 in the packaged beef cuts Itumbiara (GO) category, an award given out by SA Varejo Magazine. • Chosen by the Prezunic chain of Rio de Janeiro supermarkets as the best supplier in the beef segment. JBS Couros Friboi also carries out customer satisfaction surveys every two years. The last survey, held in 2018, found a 78% rate of satisfaction. • Leather Working Group (LWG) Certification • Couro Brasileiro Sustainability Certification • ISO 9001:2015 Certification at twelve plants; • IATF 16949:2016 Certification, related to auto industry requirements, at three plants; • SIF (Federal Inspection Service) approval to supply shavings and cuttings at ten production units. • In Germany: Supplier of IATF 16949 / ISO 9001 automotive parts

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Sustainability

Sustainability is a business value and a priority at JBS in all the Company's global operations. Among the duties of the Sustainability area are serving as an interface for JBS with its main stakeholders - the market, suppliers, customers, partners, consumers, and others - making constant dialog possible among stakeholders. See more on Chapter 2, Commitment to sustainability.

In fulfilling the points expressed in the Company's materiality matrix, sustainability of JBS Business Units will be shown from four aspects: product integrity, social responsibility, environmental management and animal welfare.

JBS conducts sustainability management based on four objectives:

• Enhancing risk management • Reducing the environmental footprint of the business • Improving eco-efficiency and relationships with society • Fostering innovation JBS Biodiesel in Lins (SP)

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Product integrity The Araguaia League was an initiative to GRI 308-1 GRI 414-1 call on the region's livestock producers to take more of a leading role in environmental conservation and Within the logic that supplier relationships and guarantee of origin are the main sustainable production. We are now working with JBS to develop the axes for guaranteeing product integrity, Friboi has invested in closer and closer rela- Araguaia Herd project, which also runs along these lines of constant tionships with producers, in addition to enhancing and expanding is tools and pro- promotion of sustainable intensification of livestock and working within cesses to guarantee the origin of raw materials. environmental laws. Under this model, our challenge is to show consumers and the world that it is possible to have production in Mato Grosso with leading action by livestock producers spearheading this process." Friboi develops actions to support enhanced management and development of good social and environmental practices across its entire value chain. This attitude not only results in a smaller “ environmental footprint, but also brings gains in quality in the raw materials the Company uses.

In 2019, Friboi surpassed the mark of 2 million head contracted in forward and fixed price purchases, models that allow producers to plan better and, as a result, gain more efficiency in future deliveries.

With a commitment to being a reference in this area, through actions in the axes of supplier relationships and product origin, Friboi seeks to contribute to enhancing management and social Caio Penido and environmental practices across its value chain through a variety of programs. Rural producer and president of the Brazilian Roundtable on Sustainable Livestock (BRSL)

Management of Friboi cattle suppliers

+ 20 in-person and online meetings about the subject + 91,885 head of cattle monitored + 360 indicators found

Partnership with the Araguaia League With the project's support, livestock producers are now better able to invest in their properties EIn 2019, Friboi entered into a partnership with the Araguaia League, whose members include and in production, raising their productivity indicators, improving the quality of their animals and, around 60 livestock producers in the Médio Vale do Araguaia region, located in the state of Mato especially, contributing to the advancement of sustainability in livestock farming. This partnership Grosso. The goal is to promote sustainable livestock development in the region, with the support with JBS was created to strengthen sustainable beef production in the Cerrado region and to meet of local producers. Within the so-called Araguaia Herd project, Friboi funds contracts for firms demand from major players, who are looking for products differentials. The goal is to transform providing consulting on livestock management to help in the process of intensifying farm pasture the region, one of the biggest cattle producers in the country, within a global parameter of good lands, therefore guaranteeing better productivity and contributing to environmental and local production practices. Together, these livestock producers help to preserve an area of 54,000 biodiversity conservation while reducing greenhouse gases in the livestock chain. hectares of legal reserve and permanent preservation areas.

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Farm in São José do Rio Claro (MT)

Giro do Boi Platform: An initiative that includes a website with content aimed at livestock producers, profiles on social media and a daily TV show in Brazil. Broadcast by Canal Rural, the Giro do Boi program remains a reference among industry professionals. Communication initiatives on social media and content developed for the Giro do Boi program, which has the highest Connection ratings among Brazil's agribusiness TV program- Management Project ming, help to strengthen relations and dialog with this public. Surveys carried out by Friboi As an offshoot of Conexão indicate that 22% of the Company's cattle sup- Friboi, the project is aimed at pliers watch the show. Online, the platform had bolstering management skills over 3.5 million pageviews. for mid-sized livestock producers, who are responsible for Social Fuel Seal Quality ranking: A tool that reconciles quality supplying between 300 and management of processed cattle and commu- 2,000 animals each year. The nications with livestock producers, by linking project uses tools to support Over the course of the year, 19,056 head of cattle were acquired from family farmers through the technical parameters for raw material, such as increased efficiency in the beef Social Fuel Seal program, a 60% increase year-over-year. This initiative is a partnership between Fr- sex and age, with a quality-based bonus policy. production chain, from live- iboi and JBS Biodiesel in the São Miguel do Guaporé (RO) region and in 17 other municipalities in Depending on indicators found, animals are stock producing suppliers to Rondônia, which is developed by training small livestock producers in an effort to improve pasture classified using a green light (desired standard), the end consumer. lands, property management, herd management and genetic improvement, with purchases guaran- yellow light (admissible standard) and red light teed by the Company. Total revenue for the 338 families surpassed R$ 38.5 million for the year. Around (undesirable standard). This standard simplifies During the year, the pro- 30,000 head of cattle are expected to be purchased in 2020, involving more than 400 families. producers' understanding of the importance of gram held animal welfare product quality for Friboi. As a result, the Com- campaigns, delivering man- The Social Fuel Seal was offered exclusively to farmers, in order to foster development and gener- pany pays a variable bonus, proportional to the agement kits to over 20,000 ation of biodiesel based on oilseed sources, such as soybeans. Because beef tallow, a coproduct of quality of animals supplied. producers, promoting correct meat processing, is the second most important source of raw material for the production of Bra- practices for vaccination zilian biodiesel, inclusion of the livestock chain in the National Program of Biodiesel Production Conexão Friboi Website: The goal is to im- against hoof and mouth and Use National Program of Biodiesel Production and Use (PNPB) could generate an even greater prove relations between Friboi and livestock disease as well as zero waste stimulus for the economy. producers, whether or not they are suppliers. livestock production. The This tool promotes discussions, distributes rele- program also makes it eas- The Social Fuel Seal (SCS), given by the Ministry of Agriculture, Livestock and Supply (MAPA), is con- vant content and helps producers advance their ier to access JBS, providing nected to the National Program for Biodiesel Production and Use (PNPB). Support for the project business. It also makes it easier to access JBS, information on the Company's has qualified JBS Biodiesel for the Brazilian government's Social Fuel Seal. Two JBS Biodiesel units providing information on the Company's culture culture and work methods to hold the seal. and work methods to those interested in estab- those interested in establish- lishing partnerships. ing partnerships.

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Auditing

An audit done in 2019 of livestock purchases made by the Company throughout 2018 showed that 100% of processes complied with external Guaranteed origin and and internal regulations. responsible procurement

The entire process of acquiring raw materials for JBS operations needs to be in Timber procurement The National compliance with federal and local reg- JBS applies internal and/or ulations. In addition to complying with external audits to the tim- Pact to Eradicate laws and standards, JBS uses a variety of ber supply chain. Biomass mechanisms to guarantee that raw ma- purchases are split into two Slave Labour terials in its production chain become types: acquisition from corpo- was created in 2005 as an products whose integrity is assured. rate suppliers and acquisitions initiative of the productive made via local purchases. sector and civil society in an Friboi has a robust system of social and Corporate suppliers are visited effort to provide responses to environmental monitoring, to analyse once yearly, with no prior the challenge of human rights and verify whether its livestock supply- notice given. While local sup- violations in production chains. ing farms follow the criteria stipulated in pliers are visited on-demand, “We recently partnered with JBS its Policy on Responsible Procurement prior to contracting, or during and developed a vulnerability of Raw Materials, aimed at guaranteeing supply, when any deviations index to the occurrence of slave a sustainable supply chain. There are are found. labor that will be of great help about 45 million hectares monitored in to companies, with efficient and the Amazon region (See more in Chap- Moreover, clearance certif- effective information to help ter 2/Product integrity/Amazon). icates are required by the in the challenge of preventing Company at the regional level, and eradicating slave labor in The system covers the identification of issued by IBAMA/Competent production chains." deforestation of old growth forests, in- State Environmental Agen- vasion of indigenous lands and environ- cy and by the Federal Labor Mércia Silva mental conservation areas or areas un- Prosecution Office. Suppliers Executive Director of InPACTO der embargo by the Brazilian Institute also may not be listed on lists of the Environment and Renewable related to slave labor. Natural Resources (IBAMA), in addition to cases where forced labor is used. As a result of these actions, JBS received an outstanding as- Another instrument for guaranteeing sessment from CDP Forests in raw material integrity and quality is the 2019, when the Company had Supply Chain Protocol (See more in the best performance among Products and Services, on page 138). South American companies.

156 157 Annual and Sustainability Report // 2019 • JBS Social responsibility GRI 203-2 JBS 360O Community relations JBS Couros launched 360o, a platform making it possible to access information on everything from the farm of origin to the final product. With operations in over 120 municipalities in Brazil, JBS has relations with communities and re- Through the jbs360.com.br website, customers have quick access to spects the characteristics of each location. To gain a deeper understanding of this context, all of the information on the origin of leather. Each item is identified, allowing social initiatives carried out by Brazilian units were mapped using a qualitative survey that showed the website to be used to trace where the product originated, the the main needs in each region where the Company operates. Based on these results, the Company production units of raw materials and their respective locations, as prioritized five areas on which to focus efforts and investments: Health, Education, Basic Conditions, well as the tanneries where leather was processed. Catastrophes and Others. Scoring criteria were also established to list good practices developed for the communities. With this, over 100 initiatives were identified at different levels of maturity, resulting in a comprehensive panorama of this local action.

One goal of the survey is to allow the strengthening of existing proj- Itumbiara (GO) ects and the construction of an identity of institutional action. The GOOD Are results helped to provide the structure for the Good Deeds Are Good DEEDS (Fazer o Bem Faz Bem) institutional program, whose first unified ac- Good tion was the 2019 Christmas Campaign. Over 75 municipalities were FEEDING THE WORLD WITH SOLIDARITY. registered, with over 90 institutions benefiting, and between the total raised and JBS contributions, this resulted in more than 100 metric tons of food donated, helping around 6,600 families.

A total of R$ 16.3 million in funding was provided by JBS in Brazil for social investments in 2019.

Friboi Friboi supports the Agro the total raised in 2018. The kitchen. The project currently Against Cancer Campaign, cre- number of participating live- serves 300 students annual- ated to raise funds for Hospital stock producers also rose: 44% ly. JBS contributes financial de Amor, in Barretos (SP) - con- more suppliers engaged in the donations, product donations sidered the largest specialized campaign in 2019. and classes. cancer center in Latin America, serving over 4,000 patients Instituto Chefs Especiais, In 2019, the Company spon- daily, free of charge. In the another initiative supported sored the first São Paulo edition campaign, Friboi serves as a by Friboi since 2013, promotes of the traditional Favelas Cup, channel1 for its cattle suppliers bringing together flavorful cui- the largest competition in the to participate in the program sine and social inclusion. This world among communities. by donating R$ 1.00 per ani- project offers cooking classes This event is organized by Cen- mal sold to the Company. This to people with Down Syn- tral Única das Favelas (CUFA) initiative earmarked over R$ drome and encourages them and produced by InFavela, with 500,000 for the hospital in to develop independence the goal of reinforcing social 2019. That is 57% more than while learning new skills in the inclusion through sports.

1 Source: https://www.friboi.com.br/pecuarista/campanha?id=5

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JBS Couros JBS Couros has operations in Brazil and eight oth- In Uruguay, JBS promotes a leather goods er countries, with extensive local social activites. manufacturing workshop and academic support classes. The workshop is held at Company In Vietnam, for example, the Company pro- facilities and its target audience is team mem- motes social actions every year in the Dak bers and neighbors. Academic support class- Lak province, with the goal of distributing kits es are, in turn, aimed at the children of team of basic staples to families and toys to kids, members and students in the community among other initiatives. In 2019, furniture built neighboring the unit. of recycled materials was donated to the province's school and the school was painted by the In Brazil, in Marabá (PA), the Company takes part leather unit employees. in the city's seedlings nursery through a partnership with the Secretariat of Agriculture. It pro- At Argentina, a partnership with the prison sys- vides 70% of its production of fertilizer, which tem lets the Company send raw materials from comes from management of the unit's solid its production to penitentiaries, where this ma- waste. The nursery has an annual production terial is turned into products that are donated to capacity of over 1 million saplings, helping to the Fire Department, regional hospitals, arts and maintain and preserve the region's native plants, crafts classes and the prisons themselves. such as açaí and cupuaçu.

Social Action - seedlings distribution to schools in Montenegro (RS)

Instituto Germinare

Instituto Germinare is a non-profit organi- more than financial support: in 2019, Com- zation, with the goal of providing full-day pany executives spent 2,273 hours tutoring high-quality education free of charge to stu- the school’s students. On the other hand, 42 dents from 6th grade to high school seniors. former and current Germinare students were There were 585 students registered in 2019, 39 hired during the year by JBS Brasil and Seara. of which concluded their cycle upon graduat- ing at the end of the year, with a total of 270 The school's methodology supplements the students having graduated since the school's traditional curriculum with activities geared activities began in 2010. toward entrepreneurship, including business manager training. Upon finalizing high school JBS Brasil is the biggest sponsor of Instituto coursework integrated with professional train- Germinare, having invested nearly R$ 16 mil- ing, students receive technical diplomas in lion in 2019. However, the Company provides Business Administration.

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Occupational health and safety Among the safety tools used by the Company, the following deserve mention: JBS works with responsibility in health and safety for its • DDS: Health and Safety Dialog is one way to raise awareness among team members to team members, partners, sup- foster prevention of accidents and the occurrence of occupational diseases. It is aimed at pliers and stakeholders. The alerting team members to the safety procedures that must be followed by all workers in- Company has a Self-Manage- volved. This is done daily, in each sector at units. ment Health and Safety Pro- • Behavioral Audit: an assessment of deviations in team member behavior in relation to safe gram (PSSAG) that contains practices in performing their activities. A discussion is held with the team member who has standards and principles, ap- committed a deviation in an effort to warn them about working safely and of the possibility plied at each production unit of accidents occurring. Deviations are immediately corrected. with the goal of standardizing procedures, processes and programs in accordance with occupational health and safety laws and best practices.

To promote the health and at businesses to instruct team The Company remains com- well-being of its team mem- members not to avoid seek- mitted to performing preven- bers, JBS develops measures to ing help, showing the Com- tive exams and monitoring prevent occupational accidents pany's support for employees team members' health. In and diseases. One indicator of and, by doing this, reducing addition, healthy habits and the efficacy of these actions rates of absenteeism across practices are encouraged has been a drop in the number the entire process. through awareness cam- of team members with leave paigns, two of which are registered with the Social Se- In addition to leaders contrib- annual. JBS furthermore has curity system for this reason. In uting to raising team member ergonomics programs and 2019, there was a reduction awareness of safety on a daily quality of life initiatives inside of 18.9% at JBS Brasil. basis, by being present and and outside of the Company. holding frequent dialogs fo- Each year, two nationwide Human Resources depart- cused on team behavior, the campaigns are held, with ment also develops legal SESMT works to monitor team themes that are relevant to training to comply with members day-to-day. team health and safety, in Regulatory Standards and the addition to occasional cam- Specialized Services in Safety At each unit, the size of the paigns at each plant. Engineering and Occupation- SESMT depends on the deal Medicine (SESMT). In 2019, gree of risk and number of the SESMT worked significant- team members. Teams are ly with the It's Time to Take made up of safety engineers In 2019, total investments in Care campaign, focusing on and technicians, physicians health and safety in Brazil were mental health. A variety of in- and occupational nurses, as Ipumirim (SC) over R$ 169.7 million. house events were developed well as ergonomists.

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The five principles of the Health and Safety Policy: Other important authorities in governing health and safety at the • Motivate, inform, develop, train and qualify Company include: team members, making them responsible for ensuring and promoting a healthy and safe Internal Commissions for Prevention of Accidents working environment; • Anticipate and prevent accidents, (CIPAs): CIPAs commission members are elected by understanding that all accidents can employees and Company representatives. The CIPAs be avoided; observe and show risk conditions in the workplace, • Seek to continually improve processes, requesting mitigation and control measures or even machinery and equipment, promoting control neutralization of existing risks, discussing accidents that actions to eliminate or minimize incidents; occurred and asking for measures to keep these situa- • Ensure compliance with legal requirements, tions from being repeated. the Self-Management Health and Safety Program, and other items applicable to Emergency Brigade: Present at every JBS unit, emergen- health and safety; cy brigades are made up of volunteer team members, who • Build and disseminate a culture of Health receive training and education to act in a variety of emer- and Safety as a value by leading through gency situations. example, individual responsibility and shared vigilance. Safety Committee: A multidisciplinary committee whose members include top leaders, the goal of which is to discuss key actions, accidents, indicators and other topics related to team member health and safety. Meetings are held monthly at each unit and at the corporate level.

Incident Investigation: For investigation of serious accidents, a committee is formed with the participation of the SESMT, leader/team member (when possible), witnesses and CIPA members. The main goal is to create a program of prevention to reduce or eliminate risks in the work routine. After investigating the causes of the incident, preventive measures can be applied to all business units.

In order to guarantee that these principles guide every activity and all team members, in Brazil, the Company has a Health and Safety Policy, which lists the five basic principles Itapiranga (SC) in its commitment to stakeholders.

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Training and control

Through investment in training and education, the Company works to prevent risks and remedy the impacts caused by accidents. Activities follow the guidelines set forth in Regulatory Standards (NRs) published by the Ministry of Labor and Indicators are monitored by are monitored daily by leaders in the JBS daily, with periodic anal- workplace. In 2019, 93,000 team mem- yses of data and constant bers received health and safety train- evaluation of each operating ing, and "safe behavior" was one of the unit's performance as a form of themes most discussed during the year. control. The Company closely monitors accident frequency Audits are based on laws and internal and severity rates. Although procedures. Any nonconformance is rates at JBS are comparable to monitored by the safety committees market rates and the Frequen- at the local level and by the corporate cy Rate has fallen, the Compa- committee (whose members include ny continues to make efforts to all business unit HR directors and man- lower these numbers, particu- agers from the Specialized Services in larly those related to severity. Safety Engineering and Occupational Medicine - SESMT). These committees In 2020, the Company will analyze information from all of the di- implement a predictive system visions; additionally, audits are done by that uses artificial intelligence, the Ministry of Labor and regular inde- in order to warn of possible pendent audits are carried out by the accidents that may occur. A Company's customers. pilot project was implemented in 2019 at JBS Couros.

Likewise, JBS monitors action plans and checks on any Team members with leave pending matters related to registered with the Social legal nonconformance found Security system: in 2019, the in safety inspections as well as total reduction in Brazilian mandatory training indicators for each job. operations was 18,9%

Amparo (SP)

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Environmental stewardship

JBS Brasil is committed to The Company relies on a computerized system environmental protection, that manages environmental and sustainabili- which includes preventing ty indicators at production units, such as water pollution, sustainable use usage, effluent generation and analysis, energy of natural resources and consumption, steam generation, waste genera- mitigation and protection of tion, transportation, gas coolants, production data biodiversity and ecosystems. and indicators on greenhouse gas emissions, At minimum, this means among other items. Data is periodically entered operating in compliance into this system by teams at each unit. This allows with legal requirements and for oversight of plant performance and listing of national standards, with a goals to reduce the Company's consumption and dedication to authenticity generation of waste, making better management of products and product possible so as to create plans to prevent and specifications and to the reduce environmental impacts. safety of customers and other stakeholders. The Environmental Management System is audited internally and is based on ISO 14001 specifications. The Campo Grande II (MS) unit is certified in this standard, which it uses to develop the environmental stewardship tools applied to all Friboi production units, according to the needs of each unit. JBS Couros uses the requirements of LWG certification and its Kind Leather program as its base. All JBS Couros team members undergo environmental training at least once a year.

In 2019, in order to take another step forward in managing and increasing the transparency and reliability of information supplied to the market, water consumption, energy consumption, greenhouse gas emissions (scopes 1 and 2) and production data were audited by SGS, a Swiss company that is a world leader in inspection, verification, testing and certification, according to standards established by ISO 14064-1: 2007 and the Brazilian GHG Protocol Program.

A total of R$ 99.7 million was invested in JBS Ambiental in Lins (SP) environmental management at JBS Brasil in 2019, up by 83% from the previous year.

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The biggest management challenge in relation Mozarlândia (GO) to this topic has to do with quality; however, availability can also be a challenge at some specific locations. To control this risk, investments have been made in automatic equipment to control operations/disinfection, as well as in structural improvements and standardization of controls at wastewater treatment stations. Strategies to fulfill any emergency demands during droughts include building raw water storage reservoirs and reducing water consumption.

JBS Brasil invested over R$ 6.7 million in improvements and eco-efficiency related to water, 86% more than in 2018. These investments, along with operational procedures adopted by teams, resulted in a 3% drop in water consumption per ton of product in 2019, year-over-year.

In addition to efforts made to lower water use, JBS has also invested in increasing reuse. In 2019, JBS in Brazil reused over 178 million liters, which is equal to the monthly consumption of a city with a population of 50,000.

When it comes to liquid effluents from the production process, plants use modern wastewater treatment stations for collection and appropriate treatment, in compliance with legal requirements. In 2019, over R$ 18.2 million was invested in modernizing and improving wastewater treatment efficiency. All effluents coming from operations are sent to each operation's Water and effluents GRI 303-3 own treatment stations or to public treatment systems. The Company constantly monitors the Management of water resources at Brazilian and critical high-priority water micro-basins; performance in 2019 placed it among the 14 performance of effluent treatment stations, JBS operations is in line with the Company's developing projects; deciding on allocation best companies in South America regarding complying with the physical and chemical stan- view that water is at the base of its produc- of investments and establishing targets to this topic. dards stipulated by law, with oversight from the tion chain and its sustainable use is a priority. reduce water consumption; engaging leaders respective governmental agencies in each state That is why it works to develop strategies and and team members; and creating innovating All JBS production units in Brazil comply and municipality. projects to guarantee maximum efficiency in solutions to reuse water. with specific municipal and state laws, as using and reusing water, in addition to mini- well as guidelines from oversight agencies. JBS Brasil guarantees that 84% of the mize the need for new sources of collection. The work done by JBS to manage its water Production units are also subject to volume of water collected and used in its The greatest reference in the Company for resources has been recognized by the CDP federal laws under the auspices of water industrial processes is safely returned to this management is the Sustainable Water Water platform, to which the Company also management, such as discharge of effluents the environment with quality, with the sole Management Program (PGSA). The program sends annual reports on its performance (Conama 430/2011) and water supply exception of wastewater sent for treatment in is mainly tasked with identifying JBS units in water management. The Company's (Consolidation Directive no. 5/2017). the public system.

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Friboi Mozarlândia (GO) In 2019, water consumption per metric ton produced at Friboi was down by 4% compared to 2018. The Compa- ny carries out initiatives to lower consumption, especially in those processes where water use is substantial, such as in stockyard operations, cleaning, boilers and heat exchangers. Key projects in this area included reducing pressure in the water supply line, which automatically lowers consumption; automation of specific points within the production process; and raising awareness among and providing environmental education to team members.

In the area of reuse, the Company has projects for reuse of water from cooling systems, equipment cleaning and back- washing of water treatment stations. Studies are being done on a project to reuse treated effluent water as well. All water reused is sent to areas outside of the production unit, free of any contact with the production area.

Regarding its effluents, Friboi works to bring down the total generated, based on actions established in its management system. Among the most notable initiatives are: JBS Couros • All units reuse solid waste collected following sedimentation of effluents, which is then At JBS Couros, the protocol for Leather Working Group (LWG) certification, one of used as a raw material for byproducts or in rendering (collection and recycling of waste the most important in the industry, contains a section dedicated especially to water from the animal protein production process). consumption for Gold and Silver certifications, reinforcing the commitment of the • All tallow generated in the red lines1 at production units with a tallow collection system Company's units to improving its rates. In Argentina, for example, water consumed goes to incorporation in rendering. during leather processing fell by 5.6% year-over-year. • Rumens coming from the green line2 are sent for composting and are applied to soil or used as fuel in boilers. In relation to effluents, there are projects for fertigation and to use some waste as fertilizers. An investment of US$ 1 million has also been made in Argentina to ex- 1 Water with blood. 2 Water with manure and rumen. pand the anoxic treatment system to improve liquid effluent quality and remove contaminants.

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Climate change GRI 305-4 GRI 305-5

JBS Brasil takes part in platforms with around 80 grams of carbon diox- a global and local scope, providing ide-equivalent per megajoule of energy transparent performance in controlling generated by vehicles, when compared greenhouse gas (GHG) emissions, such to the same energy generated from die- as the CDP, the Brazil GHG Protocol sel use. For every 370 liters of biodiesel program, the Carbon Efficient Index produced at its two plants, JBS will be (ICO2) of the B3 (São Paulo Stock Ex- able to issue 1 CBio, the equivalent of change), and the Paraná Secretariat of preventing one metric ton of carbon Environment's Paraná Climate Seal. All dioxide. Considering that JBS maintains of these initiatives have annual report- the same biodiesel production level as ing of JBS's GHG emissions inventory. in 2018 (260 million liters), the Compa- ny will be able to issue around 800,000 During 2019, JBS joined the Coalition CBios per year. named as Brazil, Climate, Forest and Agricultural, a multi-sector movement Under the program, producers Friendly Oil whose goal is to propose actions and start measuring and qualifying all influence public policies that lead of its greenhouse gas emissions project goes to the development of a low-carbon in order to obtain an energy and far beyond economy, resulting in the creation environmental efficiency score to issue of quality jobs, fostering innovation, decarbonization credits, for sale on the collecting oil. making Brazil more competitive stock exchange. Earnings should be globally and generating and invested in expanding and maintaining This project has to do with distributing wealth. the production system. people, education and the environment. Over these The main highlight among actions The result is yet another step forward in four years, the project has aimed at lowering emissions in 2019 JBS's history of creating value by reusing “reached over 21,000 students, was qualification of JBS Biodiesel as bovine tallow and other inputs, like recov- including children, youth, the first biodiesel company authorized ered cooking oil, to produce biodiesel. teens and even university to take part in a new Brazilian policy students. There are over 217 to reduce greenhouse gas emissions, The Friendly Oil program, conducted by collection points, among with the authorization of the country's JBS Biodiesel in partnership with JBS which are 47 schools and National Agency of Petroleum, Natural Ambiental, collects used cooking oil charity institutions. They learn Gas and Biofuels (ANP). This means that from over 200 collection points in 37 that recycling is an act of love: the Company now is authorized to issue municipalities in São Paulo. In 2019, 4.7 love for the environment, love Decarbonization Credits (CBio), as million liters of cooking oil were re- for others and love for future established by the RenovaBio program, covered, to be reused in biodiesel pro- generations. Not to mention which are obtained from production duction, 34% more than in 2018. This contributions to schools and of biodiesel, the main raw material of amount is equal to lowering emis- hospitals, since all the money which is bovine tallow. The Company sions by 5,800 tCO2, when projecting raised from the Friendly Oil will sell Cbios from 2020. savings of the same amount of diesel project goes to improvements fuel used in machinery and vehicles, in in the institutions." In October 2019, Lins (SP) was the first addition to preventing contamination plant certified, followed by Campo from cooking oil of around 120 billion Tatiana Souza Verde (MT), in February 2020. Biodies- liters of water, the equivalent amount Logistics Supervisor in Lins (SP) el produced by these units prevents used by 3 million people per year.

174 175 Annual and Sustainability Report // 2019 • JBS

JBS Transportadora promotes optimization of distribution routes as one of its biggest ef- Energy GRI 302-3 GRI 302-4 forts to lower GHG emissions. Changing out the truck fleet The main strategy for managing energy In 2019, two 75-kilowatt voltaic plants were Around 33% of electricity gener- resulted in savings of 83,000 at JBS Brasil is to invest in self-production, leased as part of a pilot project to meet ated by Biolins supplies the Friboi, liters of diesel fuel in the last while also bringing down consumption consumption demands at the Swift store in JBS Couros and JBS Novos Negócios quarter of 2019, equal to 5% and improving energy efficiency, aimed Valinhos (SP), generating over 300,000 kWh of production plants the same industri- of the total used. For 2020, at attaining better economic and envi- energy during the year. In early 2020, a 1,200 al complex where it is installed. The savings are expected to reach ronmental performance. The Company kilowatt-peak photovoltaic plant was leased rest is distributed to JBS facilities and 330,000 liters of oil during works with monthly and annual energy in Ibirá/SP, currently serving six Swift stores. is sold to the national market. Steam the year. consumption goals (kWh/cattle processed The Company continues to look to partner generation, in turn, is solely used to and by ton of product or leather goods). with more plants to serve 100% of energy supply adjacent JBS production plants. The Optimized Route program consumed at Swift stores by using renewable Biolins alone generates the equivalent aims to bring more efficiency Other trends are: electric energy in its activities. of 20% of total energy used by all JBS to cargo transport, by optimiz- • An increase in migration to the factories in Brazil. ing the trips made by its own Open Energy Market, due to JBS has a cogeneration unit in Lins (SP), called trucks and in partnership with better performance; Biolins, which uses biomass (sugarcane Other strategies include ongoing third parties, so that trucks • Automation, due to savings on resources bagasse, sawdust, peanut shells, rice hulls and improvement in energy efficiency at that would return to factories from using more efficient equipment; eucalyptus chips) to generate thermoelectric production plants and expanded use of empty then transport partner • Replacement of conventional light and steam energy. The thermoelectric plant energy from renewable sources. Right cargo. This means that the bulbs with LED models; has the capacity to generate 45 megawatts of now, 65% of energy the Company ac- entire route back and forth is • Reduced natural gas consumption, in energy per hour, a volume sufficient to supply quires on the open market comes from used 100%, contributing to favor of cleaner fuels. a city with a population of 300,000. renewable sources. To generate steam, reducing fuel use and conse- just 1.1% of fuel used comes from fossil quent CO2 emissions. fuels. To generate electricity, 1.6% of energy consumed comes from diesel. Ibira solar power plant (SP) From 2018 to 2019, electricity consumption per metric ton fell by 4.4% Key Optimized Route at JBS Brasil. Electricity projects were results: concentrated on optimizing the cold generation operation (machine room). • Reduced greenhouse gas For steam, there were projects to opti- emissions by 11,682 metric mize consumption by installing more tons, which is equal to efficient equipment and reusing con- the emissions generated densation, in addition to investing R$ annually by over 6,000 28.4 million in energy efficiency projects. passenger vehicles. • Savings of over 11.6 million Out of all direct energy used in JBS liters of diesel fuel. Brasil processes, 85% comes from re- • Lowered kilometers traveled newable sources, considering electric- by over 28 million. ity use and fuel used in the Company fleet and to generate thermal energy. When only considering the use of thermal energy generated by Company boilers, over 98% is renewable fuel.

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Waste and packaging

At JBS Brasil, every area is bags used at JBS are produced in-company; in other committed to working to words, they come from circular economy initiatives. recycle, reuse and reduce solid waste generated in industri- Plastic collected by JBS Ambiental management units is al processes as efficiently as sent to the Lins unit and transformed into recycled plastic possible. All production units resin, for use as a raw material in manufacturing products. comply with the National In 2019, 2,432 metric tons of recyclable plastic resin Solid Waste Policy and waste and 2,189 metric tons of recycled plastic products were management is based on the produced; this is equal to around 5 million units of new Solid Waste Management Plan recycled plastic products and 1,780 ton of recycled shrink. (PGRS), created by the team members tasked with environ- Another example of reuse is the process carried out with mental duties at the unit. This wood pallets that are collected at the Lins (SP) unit for plan defines procedures for refurbishment, after which they once again enter the collection, transportation and production cycle, maximizing use cycles. In a project correct disposal, along with developed with a partner, five tons of liners (waste from good practices to lower the labels used at meatpacking plants) were prevented amount of waste generated in from being sent to landfills each month. JBS Ambiental in Lins (SP) specific points in the process. JBS Ambiental's overriding commitments are man- The Company uses research agement of solid waste generated by JBS production and development projects to units, aimed at compliance with current laws; reuse Volume of recycled resins and plastic products produced work on bringing down the to add value to waste generated by the Company, weight of packing material consolidating the circular economy concept; and Production Volume (metric ton/ year) 2017 2018 2019 used, changing out packaging development of products and processes using recy- materials for materials that cled raw materials and promoting the sustainability of Recycled resins 3,105 3,144 2,432 are more easily recycled and the business. In 2019, JBS Ambiental managed 23,904 Recycled plastic products 492 1,119 2,189 reused as well as for projects to metric tons of solid waste, including plastics, metals, oil, recycle materials for use in oth- cardboard and non-recyclable waste. Total 3,597 4,263 4,621 er products within the process.

JBS Ambiental is a business Material Volumes managed (metric tons) In 2019, centers in Goiânia (GO) and Senador Canedo (GO) were opened, with facilities in Andra- dina (SP), Barretos (SP) and Lins (SP) modernized. These investments resulted in a 32% increase unit working with a circular Cardboard 3,696 recyclable waste economy. in the amount of waste managed, going from 18,000 metric tons in 2018 to 24,000 in 2019. For It is responsible for collection, Plastic 3,368 2020, challenges at JBS Ambiental include opening new operations at Seara production units processing (recycling) and Metal 8,031 and developing circular economy products with multi-layer packaging. reuse of materials inside the Company. Plastic waste, such Oil, similar waste 49 At JBS in Brazil, approximately 387,000 metric tons of waste generated at factories were as polyethylene, is recycled Others 1,657 reused and sent for composting, recycling, energy reuse and cogeneration. Of this total, 21,300 and turned into new prod- metric tons were used to generate energy. Non-recyclable and ucts for use at JBS production 7,103 units as trash bags, plastic hazardous waste The tire analysis process was revised at JBS Transportadora, resulting in a lower rate of premature tarps, pallet covers, shrink TOTAL 23,904 disposal and reusing tires that would have previously been discarded. Around 300 tires were wrap, pallets and injected reused in 2019, through this new process to extend useful life. racks. Today, 100% of trash Lamps 5,457 (units)

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Prolata Program areas of action:

AM CE RN

BA JBS Brasil also takes part in the MT City+ Program. Learn more in DF Seara/Environmental Stewardship. GO MG MS Environmental Labeling Prolata SP RJ PR Since 2014, Research and In compliance with Law 12.305, Development (R&D) teams which instituted the National in Brazil have worked to Solid Waste Policy in 2014, JBS RS adapt packaging to meet joined, in Brazil, the Industry the environmental labeling Package Agreement and the rules set forth by the Prolata Program, an initiative of Brazilian National Standards the Brazilian Steel Packaging Organization (ABNT NBR Association (Abeaço), based on 16182). This regulation three pillars: reception/deposit standardizes symbols used centers, whose structure is geared JBS is a Prolata to inform consumers on toward receiving large volumes; how to correctly dispose of recyclable material collectors program member post-consumer packaging. cooperatives, responsible for social and has supported the program since This makes it possible to inclusion work; and Voluntary it was created in 2012. Investments are separate dry waste from wet Delivery Points (PEV), which made based on member contributions waste, for instance, sending interface with the end consumer. to the program, and from the start them for separation followed According to data from Abeaço, the JBS has supported and backed the by sorting. This contributes program has already recycled program's three pillars. We now have to ongoing improvement in over 31,000 metric tons of steel. over 50 cooperatives operating, the recycling chains in the spread nationwide." various materials sectors. “

Thais Fagury CEO of Prolata, an organization managing reverse logistics for steel cans in Brazil.

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In Brazil, Friboi uses the Ani- Consultoria e Treinamento, while at others it was provided by Animal welfare mal Handling Guide, written Soluções Palestras e Treinamentos. The Company uses a liabil- by Dr. Temple Grandin in ity agreement, where team members attest to their awareness partnership with the animal of the Animal Welfare Policy and the guidelines and respon- welfare committee at the sibilities related to animal treatment - as well as the penal- North American Meat Insti- ties applied in the event they are not fulfilled. Animal welfare tute (NAMI), as one of the guidelines at JBS Brasil for third-party drivers are covered in the main technical standards on respective service provider contract. Drivers are not allowed to animal welfare at processing handle live animals before learning the Animal Welfare Policy units. Other national and in- and signing a liability agreement. There is also a platform avail- ternational laws also serve as able to employees that contains videos and other technical references, such as European materials on good handling practices. Union Regulation 1099/2009, instructions from Brazil's Min- Investments in animal welfare by JBS Brasil during 2019 to- istry of Agriculture, Livestock taled R$ 74 million and went to initiatives ranging from acqui- and Supply on this topic, sition of a new cattle transport fleet by JBS Transportadora to and the new Industrial and certifications, campaigns and training. Health Inspection Regulation for Products of Animal Ori- gin (RIIS-POA), in addition to Breeding Contran Resolution 675/2017, which contains provisions on With approximately 90,000 registered livestock supplying animal transport. farms in Brazil, all of Friboi's supply comes from third-party farms. Of total cattle acquired in Brazil, one-fourth spend 90 to Internally, there is a specific 120 days of their lives on a feedlot, with the rest of their lifetime policy for team members who spent on pastureland, until they reach two and a half to three work with animals, in addition years of age. The other 75% are wholly raised on pastureland. to a Company protocol that is part of Supply Chain Proto- JBS encourages the adoption of the best practices at these col certification(see more in rural properties. To do this, the Company also holds training, Chapter 3/JBS Brasil, page following the Good Management Practices Guidebook, issued 138). Professional Animal by the Ethology and Animal Ecology Studies Group (Grupo Auditor Certification Organi- Etco) and sponsored by JBS. These guidebooks are the result zation (PACCO) certification is of work done by the School of Agricultural and Veterinary also third-party audited and is Sciences at São Paulo State University (FCAV-Unesp), aimed at another important reference animal welfare. in setting guidelines for ani- Lins (SP) mal welfare activities. Starting in 2016, maximum dissemination of good practices was aimed at reiterating to cattle suppliers the importance of Committed to practices to correctly managing animals, preventing suffering and injuries. comprehensively comply with The project will continue over the coming years and will cover A commitment to humane and dignified treatment of animals is non-nego- animal welfare guidelines, more farms. tiable at JBS (find out more in Chapter 2 - Animal welfare). The Company JBS Brasil trained 2,177 peo- complies with the main global standards to guarantee that its practices ple in Brazil on this topic in Moreover, through a technical and scientific cooperation agree- are in line with best references, such as the five fundamental freedoms of 2019. Training involved facto- ment established with two of the biggest references in the animals, idealized by the Farm Animal Welfare Council (FAWC). ry teams and Company and world in this matter, Dr. Temple Grandin and Dr. Mateus Pa- third-party drivers. At some ranhos, JBS also makes constant investments in research and units, it was done by BEA scientific studies related to animal welfare.

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Production Transport

The Friboi beef operation is the only On average, JBS supplier farms are lo- one in Brazil equipped with cameras to cated 167 km away from the Company's remotely monitor animal welfare indica- production units. To guarantee quality tors at all production units. Control goes in transportation, drivers are trained from unloading to slaughter. annually by JBS and by a third-party Animal welfare highlight company (SBC). A video on this topic is for 2019 available on YouTube As a routine procedure, 100% of JBS (https://www.youtube.com/ Over the year, the main actions related cattle transport vehicles are audited watch?time_continue=5&v to this topic that deserve mention were: using a specific form and drivers are =u3v1NEZ5Tok&feature= • Maintenance of the Supply Chain given periodic guidance on the impor- emb_logo) Protocol Certification at 36 units; tance of good maintenance on cattle • Internal animal welfare audits held at In 2019, team members were trained by transport pens. 36 units (Operational); external companies on good handling • Maintenance of PAACO certification at practices at processing units. To register JBS Brasil invests in modern fleets, 10 units and certification of 5 addition- the results of animal welfare indicators, designed with the goal of lessening al units. Friboi has daily and weekly checklists. the risk of animal injuries and falls, • Visit by Dr. Temple Grandin to JBS in, in addition to optimizing transport. Brazil, in order to enhance practices; During the year, team members were This includes investments in research, • Launch and dissemination of the Good trained in Goiânia (GO) at the local units aimed at continual improvements to Stockyard Management Practices man- of Senador Canedo and Mozarlândia, the 2-floor trailer model, launched in ual (Grupo Etco) at Friboi units and JBS focusing on animal welfare. Training was 2016, geared toward promoting animal feedlots, at events with cattle suppliers given by Erika Voogd, an international welfare during cattle transport. The and through digital means; authority and guest, in partnership with fleet of around 250 trailers, operated by • Friboi highlighted as a case of success the Certified Humane Brasil Institute. JBS Transportadora, has tip-less par- in the Animal Welfare book in Brazil and titions, a no-slip floor and a hydraulic in Germany, as a result of investments in Some of the training covered the Rec- elevator that makes animal loading and the animal welfare area, with distribu- ommended Animal Handling Guide- unloading quieter, less agitated and, tion of books to units. lines and Audit Guide, written by Dr. consequently, less stressful for animals Reinaldo Ferrera, driver at JBS Temple Grandin along with the animal and for the driver. Transportadora in Andradina (SP) welfare committee at the North Amer- ican Meat Institute - NAMI. While the practical module consisted of a simu- lated audit focused on handling, from loading to slaughter of animals, as well as document verification, including traceability aspects. The topic of animal welfare is now one of the topics that can be handled by the JBS Ethics Hotline. This leading role reiterates the Company's interest in holding dialogs with stakeholders on this topic and any opportunities for improvement connected to it.

In 2019, JBS worked to approve and launch a new unified visual identity for animal welfare, which includes the JBS animal welfare Seal. This initiative functions as a way to provide visibility and raise awareness among all team members of the value this theme holds for the business.

184 185 SEARA

OUR BUSINESS Business description Annual and Sustainability Report // 2019 • JBS Main brands

Map of operations

Served at Brazilian tables for over 60 years and now also at thousands of tables around the world, Seara has an extensive portfolio of fresh poultry and pork products and prepared, processed and frozen foods, with leading brands. Quality and Innovation are strategic pillars at the Company, which is dedicated to offering products that bring flavor and practicality to consumers' tables. At Seara, quality NUMBER OF TEAM MEMBERS: goes far beyond products and should apply to personal relationships. 75,561 Production is run by a team made up of 75,000 Fresh poultry meat accounts for around 85% CE team members, supplying retail, foodservice, of the total volume exported by the unit. In B2B, cash and carry and e-commerce Brazil, chicken meat is one of the most widely customers in the Brazilian and foreign markets, consumed proteins: it is found in 97% of PE especially Europe, the Middle East and Asia, homes. In the pork segment, the Seara portfolio with over 100 million consumers and 150,000 includes fresh meat and prepared foods, BA corporate customers. which go to the domestic and foreign markets, MT meeting the growing demand for this protein. 30 poultry DF Offices in China, Japan, South Korea, Singapore, processing units the Netherlands, the United Kingdom, the United As with other JBS business units, Seara uses Arab Emirates and South Africa help to make the strategy of diversifying its product portfolio, MG Seara a global brand, found in over 130 countries. prioritizing items with greater added-value. 8 pork processing units MS SP RJ 20 prepared foods units PR

SC RS 15 distribution centers Osasco (SP)

188 189 Annual and Sustainability Report // 2019 • JBS Performance

In 2019, Seara consumption (72%), pref- expand the Company's online (techniques that raise animal consolidated its business erence (up three-fold since offerings to the United Arab comfort in an environment) strategy, based on 2015), share of shelf, home Emirates (UAE). Seara products and start-up on organic innovation, quality, penetration (77%), repurchase are now also available at the chicken production at Nova customer service and rate (74%) and recall: Seara is online Carrefour store, where Veneza (SC). relationships. In the now the second ranked Top consumers can convenient- area of innovation, of Mind brand in its sector. In ly purchase a wide range of In the area of research and for example, over 187 relation to quality, customer products that include whole development, Seara is com- products were launched, complaints were down by chickens and chicken parts, mitted to investing 1% to 2% including some in 20%, on Brazilian and for- in addition to prepared items, of its annual revenue. Proj- brand new lines such as eign markets. with just the click of a button. ects developed by the Com- Organic Chicken, Seara pany allow for advancements Nature and Incrível Seara On the foreign market, the On the Brazilian market, Seara in animal welfare and sus- (with plant-based protein success of the DaGranja purchased a plant in Seberi tainability, while traceability products), in addition range (100% natural) in the (RS) in order to boost its pork projects are preparing to use to expanding existing Middle East has opened the processing capacity. Another blockchain technology. ranges, like Seara doors for exports, which are business acquired was the Gourmet. The Incredible now also focused on organic, Frigorífico Marba (SP). as part In another line of action, the Seara range, released at gourmet and the Incredible of the Company's strategy to Super Agro project is bring- the same time in three Seara range. expand into products with ing technology to the rural countries, was Seara's higher added value and sector, providing updates to first international launch. Partnerships with companies established brands on the aviaries and to farms rais- that are already locally con- market. Also worth noting is ing hogs and automation to The year also marked solidated have helped Seara expanded production of Nhô improve performance and the launch of Seara's first to gain penetration in these Bento free-range chickens, a quality of life for integrated promotion in five years, called markets. One example is an higher number of farms using producers, in addition to rec- Home with Seara, aimed alliance with Carrefour to environmental enrichment ognizing good practices. at retailers and consumers. Another innovation, Seara Top Grade Butcher Channel, was implemented at over 250 Hatchery in Nuporanga (SC) stores at the end of its first year at Seara.

These achievements are reflected in the brand's value, which saw higher regular

Montenegro (RS)

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Awards and recognition

• Whow! Innovation Award: • Embanews Award 2019: Seara won five awards at the Awarded as the most biggest awards ceremony in Brazil's packaging industry. The innovative company in exclusive "Power Vac" technologies in the Seara Rotisserie the 'Food' category. The range and the "Heats Evenly" tray in the Lasagnas range were second edition of the award, responsible for these recognitions, which reinforced the brands organized by the Padrão commitment to quality and to innovation. Group and the Padrão Intelligence Center, is aimed at identifying and recognizing companies and institutions that produce consistent, Category: Marketing incremental and disruptive

innovations, based on a focus Sub-category: Packaging-Based Product on generating new ideas Line Differential to benefit the population, economy and society. The Product: Seara Lasagna with "Heats brand's innovations in the Evenly" technology sector related to packaging,

marketing position and Category: Technology & quality merchandising, as well as

sustainability, were considered Sub-category: Packaging production in the award, since Seara process technique Alimentos was the world's first company to be certified by the Product: Seara Lasagna with "Heats World Health Organization, a Evenly" technology testament to food biosafety.

Some recent innovations Category: Technology & quality made direct contributions

to this achievement: Seara Sub-category: Inter-related packaging Nature, Seara Organic process technique Chickens and the Incredible Burger Seara Gourmet. Product: Rotisserie Line - Prepared Refrigerated Dishes

Category: Innovation

Product: Rotisserie Range - Prepared Refrigerated Dishes

Customer of the Year, with the Seara brand: end user, packaging user of the year.

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Products and services

Seara offers customers and ering customer and consum- consumers channels for con- er perceptions related to tact, such as a toll free number the quality of products and and the Contact Us area on the services. Based on manifesta- brand's website, as well as con- tions (criticisms, compliments tacts by e-mail, on social media or complaints), treatment like Facebook and Instagram, and improvements to plant and on specialized service sites, processes and products are such as Reclame Aqui. carried out. Manifestations are captured through service Contacts are captured directly channels and are made avail- through the Seara Customer able to plants online and to Service Center, except for those strategic areas daily through made through social media, the management panel. where the first contact with the consumer is made by a team In addition, the Company has specialized in this relationship. the Seara Academy, promoting actions and consumer In 2019, the Customer Service panels, the results of which Center took 49,131 contacts, are reflected in innovations 11.8% of which were from the and product improvements. foreign market, with the rest from the Brazilian market. The Also worth noting is the Seara service level reached by the brand's maintenance of the toll-free number in 2019 was Reclame Aqui RA1000 seal, Seara Academy at the headquarters in São Paulo (SP) 97%. During the year, the total which is given to compa- number of complaints fell by nies with an excellent rate 25%, with complaints related of service. During the year, to the plants dropping by the Rezende and Massa Leve Focused on the pillars of Quality and Innovation, with efforts that go far beyond 30%, year-over-year. For the brands were also given the products, Seara has achieved results that indicate a growing preference for the foreign market, the response seal. Seara was a finalist in the 1SOURCE: Nielsen Base Retail Index – ON’19. brand among consumers. The Company consolidated its leadership in share time for complaints was 10% Revista Época Reclame Aqui 1 2SOURCE: Kantar Insights – Millwar Brown – value in the Frozen Products category in the last three surveys, rising eight Seara Brand Tracking faster than in 2018. Award for excellence in con- 2 percentage points in brand preference from 2014 to 2019, reaching second place 3SOURCE: Kantar Insights – Millwar Brown – sumer services, placing 3rd in 3 Seara Brand Tracking in Top of Mind, with the brand attaining penetration in 78.4% of homes and a The Customer Service Center the Perishable Food - Frozen 4 4SOURCE: Kantar World Panel – CROSS 78.7% rate of repurchase. Categories Basket. is the main channel for gath- and Fairy Products category.

194 195 RelatórioAnnual Anual and e deSustainability Sustentabilidade Report // // 2019 2019 • •JBS JBS

Quality programs

Seara establishes a series of programs aimed at assuring the quality of its products. Notable among these are:

Plant Excellence Award: based on Quality and Food Safety Management System (SGQSA) Audits at plant units. The results help in managing the 15 aspects of quality, represented by mandalas, allowing for fast visualization of key Seara (SC) points for attention.

Compliance Index: a tool to assess Seara products that shows the quality status in relation Quality to product standards (sensory, appearance, size, physical and chemical properties and The Seara Quality and Food invested in actions connected The public receives regular professionals dedicated to contaminants), primary and secondary Safety Management System to this topic and 2,462 people information about Seara guaranteeing expected service packaging and palletization (arrangement, (SGQSA) can be broken down were trained. products through the websites: levels for its so-called Global presentation, weight, identification, traceability, into three major groups: food • www.seara.com.br Accounts, which include major protection, validity and others). safety, perceived quality and Seara undergoes regular audits • www.searainternational.com chains such as KFC, McDonald's, supplier/customer. by the Federal Inspection And it has a Customer Service Subway and Burger King, Quality route: allows for verification of whether System (SIF) by the Ministry Center, providing online among others. the production process and intermediate These themes are covered of Agriculture, Livestock services and direct contact products are in compliance with the technical in documents developed and Supply (MAPA), which with consumers and customers A network of 14 food labs standards for the process and whether by Seara and aimed at performs official verification interested in finding information are ISO 17025 accredited, monitoring is being appropriately conducted, in management of these aspects, regarding compliance with on products and processes. A specifically for this type of addition to providing guidance when deviations including the Food Quality the regulations and standards team of technicians at offices unit, have developed 854 are found. and Safety Policy, which applicable to production of abroad assure that key legal and certified methods which have expresses the Company's poultry meat and pork and market demands are gathered, been implemented according Project Q: a multifunctional group whose commitment to producing their byproducts. During 2019, along with transparently to international standards members include top management and quality, healthy and safe food. the Company welcomed communicating the main and audited by the National support areas, to assess execution of production In 2019, R$ 274.4 million was international missions at 16 technical topics of interest Institute of Metrology, Quality activities while reinforcing the need to comply production units. to their customers. Seara has and Technology (INMETRO). with product and process standards.

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Certifications Seara Nature ham sausage sandwich

BRC v.8 – global Standard for Food Organic Chicken – assessment through Safety: the Global Standard of the which a certifying agency, duly accredited BRC (British Retail Consortium) for by the Ministry of Agriculture, Livestock Food Safety was created to guarantee and Supply (MAPA) and accredited by the supplier compliance and assure National Institute of Metrology, Quality and distributor capacity to ensure the Technology (Inmetro), assures that the product quality and safety of the food products and process comply with organic production they sell. In 2019, a total of 14 Seara standards and practices. production units were certified. Free-range Chicken – assessment done of Halal – certification of the food the production chain (hatchery, feed plant production chain, which certifies if and meatpacking plant) by a certification the production process complies with agency in relation to ISO 16389:2015. religious precepts, as well as current laws. Smeta – Sedex Members Ethical Trade Audit Animal Welfare Certification – (SMETA). Certifies that companies are using PAACO (Professional Animal Auditor best practices in ethical auditing techniques. Certification Organization) - Assesses compliance with animal welfare standards for meat processing plants. The Amparo (SP) and Itapetininga (SP) production units are certified. Other important Seara Da Granja also holds Certified certifications held by Humane certification. Seara include YUM!, KFC Agropecuária, MARS, Chain of Custody Certification – a ALO FREE, McDonald’s/ company protocol for assessing the SQMS, McDonald's production chain (hatchery, feed plant, MSC, McDonald's MGP, aviaries, slaughter) for Green Chicken, McDonald’s Animal Healthiness verifying the following requirements: Welfare, McDonald's In 2019, Seara worked to lower sodium, fat and sugar content in products, raised without the use of antibiotics or Imanor (Morocco), Supplier as part of a commitment to meet the Brazilian regulatory agency (Anvisa) growth promoters; fed only with plant- Workplace Accountability standards and promote consumer health. based feed; and processed according to (SWA), Burger King, Burger animal welfare standards. King (Popeye's), Global Gap, Highlights during the year include the kick-off of seven projects related IFS Global Markets, MCD Europe, Walmart Quality to reducing sodium and fat and the development of product categories (Chile), Walmart Security aimed at increased healthiness, such as Seara Nature - made using only Chain, M&S, Nestle RS natural ingredients, Seara Rotisserie and Organic Chicken, in addition to (Rural), COSTCO Code of awards for innovation in the Seara Rotisserie and Seara Nature ranges. Conduct and COSTCO Food Safety/ Quality GMP.

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Innovation

Made using soybeans and beats, the Incredible perceived quality, percentage of Seara uses a wide variety of efforts to foster Incredible Lab was created with a focus on Burger, in the Seara Gourmet Range, was margin, reduced variable cost and development of innovation at the Company. developing plant-based protein products for launched in May 2019. It was the Company's shorter project execution time. One of its biggest challenges is the ability to the Incredible Seara range, but its activities first plant-based product and its popularity was forecast food consumption trends, through will be extended to innovations related to one of the reasons why Seara developed an The results of this system geared a close relationship with consumers and by other lines. entire range of plant-based products. toward innovation was a variable cost making them feel connected, listened to and reduced by R$ 74 million, with items respected. To do this, the Company also invests The Incredible Lab's biggest find was the To guarantee this synchronicity with consumer tested for perceived quality performing in innovative management via an ongoing and i Biomolecule, which combines natural needs and interests, opportunities to innovate equal to or above the competition wide-ranging digital transformation process. aromatic molecules with fermentation of at Seara are identified in a variety of ways: 93% of the time, in addition to a 25% existing natural ingredients to guarantee at national and international trade shows, faster project development time when One high point in 2019 was the Incredible similarity to animal protein. The Incredible through technical visits, research and in- compared to 2018. Lab, a hub for innovation formed by Company Seara range of products are 100% plant-based house workshops, through partnerships with researchers in partnership with scientists, and are made with pea and soy base, but have suppliers and more. Research prepared by a At Seara Academy, events make it universities and even consumers. The the flavor and texture of meat. group of internationally respected institutes possible to gain direct access to helps in understanding market trends and customer and consumer opinions, consumer behavior. Internally, the Perceived collaborating to enhance products. Quality project applies research to monitor the The Q Lab, Seara's data intelligence Headquarters in São Paulo (SP) performance of Seara products compared to center, consolidates data from dozens other options on the market. of different sources, processing and delivering analytical studies with The innovative project pipeline at Seara is a consumer-focused vision, which managed on a monthly and quarterly basis. helps in gaining more efficiency in Investment in this area in 2019 totaled R$ marketing activities. 54 million, spread across process, brand and trade improvement actions. During the year, The Q Lab also contributes 187 products were launched in Brazil and interpretation of consumer movements around the world. and trend analysis. The use of data intelligence and social listening allow Projects are aimed at fulfilling global trends the Company to take the pulse of and needs related to the platforms of discussions, taking stock of what healthiness, indulgence and convenience. people are saying on social media and Performance in reaching these goals is seeing whether any opportunities can measured using indicators that include be seized in real time.

Perfect Store The mission of Seara's Perfect Store program is to enhance and monitor the Company's product performance at points of sale, by promoting a unique consumer experience.

200 201 Sustainability Annual and Sustainability Report // 2019 • JBS

As one of the most important food companies in Brazil and with customers abroad, Seara is committed to the sustainability of its operations. The Company adopts the same materiality strategy as JBS Brasil, but adapts actions to the specific needs of its business.

Internally, sustainability is conducted in a transversal manner, through area- oriented policies and targets that comply with the different indicators related to sustainable management. Product integrity

Among commitments related to product integrity at Seara is respect for the highest food safety, quality and sustainability standards. The Company develops a range of actions to contribute to enhancing management processes across the supply chain, by adopting good social and environmental practices. To do this, it relies on internal controls in each of its contracts with integrated producers.

In the supply chain, 100% of integrated producers receive visits and technical assistance from the Company. During the supply process, checklists are applied to close lots and, at the end, a lot form is entered into records that are held by the Com- pany, containing key production information.

All advisory and training actions carried out by Seara are adopted by poultry as well as pork producers, through work by around 500 extension agents and veterinarians who make technical visits to guarantee that all suppliers adopt practices and structures suited to production and in compliance with necessary environmental laws.

Formal monitoring between the Company and integrator is stipulated in the producer integration contract, which is in line with Law 13.288/2016. A group of checklists, divided by theme, are applied to all integrated producers, with a variable frequency, according to the topic's relevance. In all of these processes, if any failure to comply with the quality or sustainability criteria is Seara (SC) found, the appropriate sanctions are applied.

202 203 Supplier relationship Annual and Sustainability Report // 2019 • JBS

Seara wants its raw materials suppliers to The Company is a member of the Brazilian be partners in business. That is why it de- Animal Protein Association (ABPA) and of state velops activities, in line with the use of best associations and is a participant in technical social and environmental practices across meetings at the Ministry of Agriculture (MAPA), the value chain, a measure that assures in multi-sector forums like the Workshop on continued enhancement of the quality of Antimicrobial Resistance, Commissions for I've worked inputs that arrive to the Company. oversight, development and conciliation of integration (CADECs), in projects done in part- with JBS for In late 2019, the Company had nearly nership with the Brazilian Agricultural Research 9,000 integrated production suppliers Corporation (Embrapa - Poultry and Pork), and 25 years. in Brazil. at Universities, including URGS, IFC - Concórdia During this time, (SC) and Araquari (SC). Among the most relevant there has always Seara is an active participant in forums topics for the chain are housing of parent stock been some sort and debates held by trade associations in in individual cages, surgical castration of piglets of training, on order to influence dialogs of importance and tail docking. See more in Animal welfare, environment, animal to the supply chain. on page 216. welfare, vaccination, “treatment matters, conversion. There is a whole project for us to adapt and be Livestock Technical Committee ready to produce."

Seara is a member of the Livestock Technical Committee, promoted by the GlobalGAP quality Alcir Coldebella certification organization, which aims to discuss and define animal welfare trends, requirements and Integrated hog producer parameters worldwide.

Seventeen Integrated Partnership years ago, Seara works in an integrated fashion for example. Seara bears the remaining 93% we started out with 13,000 with producer families to guarantee of costs, as they relate to supplying feed, birds, and now we have the origin of poultry and hogs (which chicks, medications, technical assistance and 160,000 housed. The last can also be acquired, to a lesser extent, transportation, among other things. investment we made through purchases from independent last year was to install producers). Seara is committed to Agriculture fosters investments in sustainable solar energy to lower providing the inputs needed for technologies that offer the chance for activities production costs. Our animals to be raised safely and to be done at a lower cost and with increased partnership with Seara first healthily; in addition, the Company efficiency. Seara provides financial incentives to “began with hogs, 40 years provides advice on production transform conventional aviaries into automated ago. Later, we started the management, environmental practices aviaries, developing compensation policies aviaries. We've always had and animal welfare. that help to maintain cash balances for partner help from the Company integrated producers over the investment's with incentives." Production costs in the system are also entire amortization period. The Company shared. The producer is responsible moreover develops logistics projects, providing Nelsindo Grosser for 7% - which corresponds to the chance to share the gains resulting from infrastructure, manpower and electricity, implementation of competitive differentials. Producer

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Super Agro Program

Created in 2017, the goal of Super Agro is to productivity in the poultry and pork chain. consolidate the JBS Culture and establish Approximately 500 agricultural technicians the Seara brand in Integration and in the and veterinary medical officers, who work Community, with a range of audiences, with rural extension activities at poultry and such as integrated producers, extension hogs units, participate in this award. agents, managers and Agriculture team members. There are two fronts of action: the The second front of action is focused on Agriculture Extension Award and the Best the relationship between the integrated Producers Award. producer and the Company, with monthly and annual recognition of producers The former is geared toward formation of who have the best results and current high-performing, motivated and competitive management practices, motivation and teams. They are recognized for excellence retention of producers, contributing in practices and for rural extension results, to attracting new producers and to contributing to attracting and retaining appreciation of the integration system in the best professionals and to improving the community. André Chiamolera, Agricultural Manager at Seara, and his team at the Itapiranga production unit (SC)

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Social responsibility Occupational Health and Safety The health and safety of its team Security system for these reasons, based members, partners, suppliers and on data for 2019 compared to 2018. stakeholders is a priority at Seara. The Community relations Company applies the principles and To learn more about health and standards used by JBS Brasil. safety management at JBS and Seara's performance in this topic, see In its relationships with the Tools like the Health and Safety Dialogs, Sustainability/Health and Safety, on communities in which it behavioral audits, events and training page 96. operates, Seara follows the are used to continually enhance practices established by JBS; performance and each person's The efforts, policies and procedures in other words, it understands commitment to preserving the physical adopted by JBS in Brazil are equivalent that its social responsibility and mental integrity of all stakeholders. to those adopted by Seara, since actions should be focused on corporate guidelines are the same developing local manpower, Actions to prevent occupational for all Group companies in Brazil. on supporting education, accidents and illnesses have resulted The investments of around R$ 169.7 particularly professional in 28% fewer Seara team members million reported by JBS in Brazil also training, on sponsoring with leave registered with the Social extend to Seara units. projects compatible with the Company's priorities, on encouraging volunteering by its team members or, furthermore, on making direct investments towards the community. Within the Seara business, one highlight is the campaigns to raise Seara aims to monitor and awareness that we carry out along with all of In the city of Ipumirim share actions at JBS Brasil, our team members. We have a timeline that JBS received Corporate Citizen taking advantage of the all of the units follow to get organized: we certification for two consecutive years, synergy between companies schedule meetings, during an entire week, in 2018 and 2019. This program is part and the similarity between doing countless activities, with involvement, of the Novos Caminhos (New Paths) strategies and challenges. interaction, learning and training. It's a time Program, benefiting minors living in for us to pass along a very strong message of shelters. In addition to taking classes See more in JBS Brasil / health and safety to our team members, so at Senai, 2 or 3 days a week, they work Sustainability / Community that they not only practice this at our units, but at the Company on other days. In the relations, on page 159. “are also able to take this beyond our plants project, they have theoretical and and to their homes." practical classes, in education as well “as music, geared more toward routine day-to-day activities.” Robison Raniere Martins Patricia Locatelli Baron Corporate Occupational Health and Safety HR Manager in Ipumirim (SC) Manager at Seara

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Itapiranga (SC) Environmental stewardship

In environmental stewardship, The Company has an environmental policy and Seara developed a platform to assist in managing environmental indicators. In 2019, Seara, always based on its relies on a management system and indicators in order to take another step forward in managing and increasing the transparency Environment Policy, works to to guide development of short- and long-term and reliability of information supplied to the market, water consumption, energy, keep the matrix of environmental strategies. Just like at JBS Brasil, Seara has one greenhouse gas emissions (scopes 1 and 2) and production data were audited aspects and impacts up to date, production unit, in Itapiranga (SC), which is ISO by SGS, a Swiss company that is a world leader in inspection, verification, testing along with its environmental 14001-certified. This facility serves as a reference and certification , according to standards established by ISO 14064-1: 2007 and programs, in an effort to monitor for the others, which replicate the main projects the Brazilian GHG Protocol Program.. them in an ongoing and efficient and actions developed at this production unit in manner. Investments in this area their own activities, whenever applicable. They Practices such as only acquiring firewood from registered suppliers, prohibiting receipt in 2019 totaled R$ 136.2 million, undergo an internal audit process in order to of old-growth timber, controlling energy indicators, greenhouse gas emissions, water 37% more than in 2018. monitor compliance with best practices and and water reuse, in addition to the quality of effluents treated, as well as preferring use performance of environmental indicators. of biofuel, are among the main aspects of Seara’s environmental management.

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Water and effluents Climate Change

Water is essential to production at Seara, making As part of JBS, Seara monitors, accounts for and it a priority. In particular, the Company monitors reports its greenhouse gas (GHG) emissions. Find risks related to water volume and quality: reduced out more in Commitment to sustainability/ availability makes it necessary to have tighter Environmental stewardship/Climate change. operational controls to ensure quality standards. For In an effort to reduce its carbon footprint, the effluents, the challenge is guaranteeing the discharge Company invests in developing innovations and in standards for treated effluents, using appropriate adopting best practices in its operations. operation of treatment stations. In 2019, Seara lowered its scope 1 GHG Seara also works with daily goals for water emissions (direct emissions) by 21% in relation consumption per ton of product, which are revised to the previous year, considering its emissions per annually. Furthermore, work is done to identify metric ton of product produced. opportunities to reuse water in its processes, aimed at lowering the demand for water collection. In 2019, Seara reused 1.7 billion liters of water, 31% Energy more year-over-year. This amount is equal to 680 Olympic-size swimming pools. Energy management at Seara is monitored by a multidisciplinary team of engineers who work in A specific checklist provides guidelines for surveying partnership with plant teams and the corporate any points of water waste and for respective solutions, area, assessing performance and adopting strat- with action plans that stipulate responsible parties and egies to bring down consumption and make the timeframes. Reuse is one possibility; however, because Company more energy efficient. effluents come from food processing, initiatives for reuse must be authorized by the Federal Inspection Service Seara sets individual annual targets to reduce (SIF). One example of projects in this area are reverse energy, by branch, with monthly supervision by osmosis, reuse in vacuum pumps and reuse of water the executive board and daily management by used to clean sieves. units. Electricity purchased on the open and incentivized markets as well as the use of biomass Effluent treatment, another fundamental theme to generate steam are some of the actions aimed in managing water resources at Seara, received at diversifying the Company's energy mix. investments of R$ 13.3 million, 108% more year-over- year. With this structure and funding, Seara guarantees Seara's energy matrix includes 91.7% that 83% of the volume of water captured and used renewable energy, considering direct energy by the Company is returned to the environment in use (electricity, thermal energy and use of fuel compliance with quality and safety standards. in general). If we consider fuel use in boilers to generate thermal energy, renewable energy In order to reduce the volume and guarantee the quality use rises to 97.4%. In 2019, investments of R$8 of effluents produced, Seara invests in procedures to million were made in energy efficiency projects lower the organic load in effluents, using appropriately at the Company. sized treatment systems that guarantee maximum efficiency. Floater systems and anaerobic ponds help to bring down emissions coming from effluents. At the Três Passos and Seberi production units, both located in Rio Grande do Sul, biodigesters are used to burn methane gas in the boiler and to flare methane gas, respectively. Wastewater treatment plant in Amparo (SP)

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Waste management Packaging Map of Cidade+ Program operations

Based on the guidelines of specific JBS Packaging is an essential item when it comes policies for this theme and by the National to guaranteeing quality and to the consumer Solid Waste Policy, Seara aims to reduce waste experience with Seara products, since it is generated and consequently sent to industrial responsible for providing food with safety and Jijoca de Jericoacoara landfills. This necessarily includes application protection from the moment it is prepared to of the Company's critical suppliers program, consumption. Nevertheless, its disposal may CE which establishes correct disposal of all waste create an environmental liability that should PB Cajazeiras generated by suppliers and carriers along be proactively managed in compliance with PE RO Serra Talhada with final waste disposal. Centers at Seara local and national laws. BA Ji-Paraná Luis Eduardo Magalhães units receive waste and correctly dispose of it, including recyclable waste, which is sorted To make this possible, part of the Company's Caldas Novas GO Guaxupé and sold to specialized companies. investment in research and development is MG aimed at finding ways to reduce and optimize Naviraí MS Operational Casimiro de Abreu With the goal of enhancing this procedure, packaging use, particularly when it is not in SP RJ Três Rios in 2019, mapping began on Seara production direct contact with food, helping to lower waste In implementation Campo Largo PR units qualified to receive JBS Ambiental volumes and the costs associated with this. Caçador Bom Jesus dos Perdões e Piracaia projects, which will make it possible to better Opening soon SC Garça e Santa Isabel sort and use waste, along with applying It is important to note that approximately RS specialized management of this topic. 80% of packaging volume for Seara Collection plan São José under development do Norte products come from renewable sources. In the area of reverse logistics, the pallet center manages the processes involved in collecting, purchasing, shipping and supplying plants with this material. The result of this initiative is wider reuse of wood through actions such as changing the logistics system Cidade+ Program JBS, through Seara to reduce shipping, performing supply studies for plants, collecting pallets from customers Seara and JBS Brasil support the and JBS Brasil, in various regions in Brazil and improving work of the Cidade+ Program, supports our selective accountability management with carriers. which is developed and man- collection and recycling aged by the Recicleiros NGO, that programs, which should serve At Seara, 286,000 metric tons of industrial advises municipal governments nearly 1 million new people waste were reused for composting, on implementing smart selec- per year. Four million will have recycling, energy reuse and cogeneration, tive collection while at the same access to sustainable channels accounting for over 70% of total waste time allowing companies to to dispose of solid urban waste generated. Of this total, 1,000 metric tons comply with the requirements of and 2,000 qualified jobs will be were used to generate energy. In addition, the National Solid Waste Policy, created for people in vulnerable Seara lowered waste generation by 17% in which requires that they invest “ situations by the end of 2023.” 2019, compared to the previous year. In 2019, in reverse logistics actions for Seara invested over R$ 440,000 in waste post-consumer packaging. Erich Burger management improvements. Recicleiros Institutional Director The values espoused by Cidade+ become the subject of training for municipal managers, so they can be able to implement and manage their selective collection programs.

214 215 Animal welfare Annual and Sustainability Report // 2019 • JBS

Animal welfare is a material and priority theme at Seara and JBS as a whole. Seara uses external and internal To be in line with best practices, the Company looks to the most relevant ini- guidelines to manage this area, tiatives around the world on this theme as references, including the concept guaranteeing fulfillment of of the five freedoms of animals, applying them end-to-end in its production requirements and alignment with process. With around 9,000 integrated chicken, turkey and hog producers in best practices in the most demanding Brazil, split among Company farms and integrated producer farms, Seara de- markets, such as the European Union. sires to be a reference in animal welfare in the country. Company units are constantly audited and are certified based on the world's most stringent initiatives, some of Among the international standards adopted as a reference by Seara, in addition to national and which are developed by customers. All international laws related to the countries to which the Company exports, it is worth mentioning producers, catching teams, carriers and technical standards, decrees, ordinances, directives and regulations issued by multiple agencies technical teams are trained annually connected to the Brazilian government, in addition to standards proposed by organization such as The on animal welfare practices. During the Welfare of Broiler Chickens in the European Union, Humane Poultry Slaughter - STEPS, Farm Animal year, about 9,000 producers and 100% Welfare Council (FAWC), The World Organization for Animal Health: Slaughter of Animals - Terrestrial of the internal team underwent training, Animal Health Code and National Chicken Council Animal Welfare Guidelines and Audit Checklist for with a total of 14,000 people trained. Broilers, published by the Professional Animal Auditor Certification Organization (PAACO).

The value chain is engaged with actions related to animal welfare through public and internal campaigns, technical visits, programs to raise awareness, animal welfare seminars and committees, operational training seminars, animal On this farm, welfare committees and, moreover, with the help of a reporting channel, the JBS we work with Ethics Hotline.

collective pens; Worth mentioning among the animals are together for commitments undertaken by much longer, in much Seara in relation to this topic are larger pens. With this, we implementation of collective see improvements to their gestation stalls in 100% of the pork quality of life, with better chain by 2025 and the exclusive use results consequently. And, in of eggs from chickens raised free of “addition to collective pens, cages by 2020 in their products. we have a climate control system for sows and piglets." Seara works with the practice of desensitizing 100% of animals, with Rodrigo Bisolo the exception of cases where religious Integrated hog producer requirements apply. The practices employed by Seara are monitored internationally by certifying institutions and customers holding stringent animal welfare requirements, such as Certified Humane, McDonald's, Migros, Moy Park, Global GAP and WQS, among others. Poultry farm in Seara (SC)

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Breeding

One of the main practices at Company and checklists, so that Animal Welfare and integrated producer farms is indicators can be systematically that animals are fed using only feed monitored and controlled. Certification As extension agents, formulated by the Company, by audits, such as Global GAP, are also nutritionists specializing in poultry and done at Seara production units. our role is fundamental and pork, with ingredients that include relevant in relation to our producer, corn, soy and other grains and which Indicators such as housing density, as an intermediary in harmonizing contains no hormones of any kind, in percentage of calluses on birds' feet, the interests of the Company and compliance with Brazilian law. initial and final viability percentage, the producer. Day-to-day, we seek nutritional levels, appropriate feed to maximize results, optimizing All inputs needed for production, availability, water quality control the farm to be highly productive, such as chicks, vitamins, chlorine, and availability, compliance with creating satisfaction for our disinfectants and, when necessary and the five fundamental freedoms and integrated producer." prescribed by a Seara veterinarian, environment control (temperature, “Ivan Cunico medications are provided to producers, humidity, ventilation, lighting and who also receive ongoing assistance "bedding" quality) are on the list of Extension Agent and training, in addition to periodic factors controlled by producers, in an visits from the Seara technical effort to guarantee animal welfare team. There are around 500 field during production. professionals, working to ensure that practices adopted comply with the Animal health and safety are top Company's principles, in addition to priorities and are common to every advising producers on best practices. line. Seara has a very strict internal policy on antibiotic use. The entire For production of day-old chicks, all process of acquisition, use, registration hens are raised "cage-free." In addi- and traceability is maintained in the tion, at poultry farms (parent stock and production chain. The Company follows grandparents), only roosters are de- the premises of all of the markets and beaked. This procedure aims to improve customers with which it works, while animal welfare conditions by preventing also complying with all items required hens from suffering scratching or inju- by law in Brazil. Seara does not use ries during copulation. All poultry trans- antibiotics preventively at any stage in port is monitored to doesn’t exceed 12 its production. hours from fasting to the final stage. The Company made investments of Seara uses Technical Guidelines (OTs) around € 77.8 million in animal wel- Seara Commitments to Animal Welfare to define the criteria producers need fare, particularly in initiatives aimed to follow. Other control forms are used at climate-control, comfort and avail- 1 - Transition from individual to collective gestation pens in addition to Technical Guidelines ability of animal feeding equipment. in pork production by 2025. Current status: 58% adapted.

2- Maintenance of low densities in raising birds, with the maximum level set at 39kg/m2. Current status: less than 35kg/m2.

218 219 Poultry practices Annual and Sustainability Report // 2019 • JBS

Farm densities A dark period, Humidity and Upon arrival at the comply with a maximum of at least six hours ambient temperature production unit, 1limit, according to best 2 a day, is used at all 5 are monitored at all farms, 6 birds are kept in a market practices, so that farms to allow for which are controlled using holding warehouse all animals have room to appropriate resting. a set of visual, electronic under thermal comfort move around freely and and thermal indicators. conditions based on the have access to substrate, the use of the ventilation so-called aviary litter), which and/or nebulization allows them to manifest system, with appropriate their natural behavior. coverage against direct sunlight and adverse weather, such as rain, The debeaking process Seara has wind, hail, etc. is not done at broiler farms. At gradually reduced 3 production farms, the procedure is only 4 the amount of used on roosters, preventing hens from antibiotics used in being injured during copulation. This is production, prohibiting a more modern practice that is used in preventive use. the market and is in line with best global animal welfare practices. To learn more, visit the ‘Hoje tem Frango’ platform (https://www.hojetemfrango.com.br/), Poultry farm in Seara (SC) created by Seara to provide information on poultry production.

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Farm density The practice of tooth-clipping also respects a maximum is not used at Seara piglet production 1 limit, providing animals 2 farms. Adaptations to management have with space to freely move allowed this practice to be stopped. around and express their natural behavior.

Surgical castration Tail docking is also not used. is still used in an effort to prevent 4 The Company uses 3 problems in adult hogs, since an intact immunological tail can facilitate cannibalism among castration, promoting animals. This procedure is internationally greater animal comfort recognized as the best practice for and less stress. guaranteeing production within modern animal welfare standards. Hog farm in Seara (SC)

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Turkey farm in Caxias do Sul (RS) Special production Control

Seara maintains continual investments to Seara has specific assure a portfolio of high-quality products, in certifications at some line with global market trends. To do this, the facilities that attest to its Company offers antibiotic-free, organic, vege- commitment to comply with tarian and natural products, in addition to its national and international traditional product line. legal requirements, including Global Gap and HFAC/ Animal health and safety are top priorities and Certified Humane. For are common to every product range. Seara plants to export products, has a very strict internal policy on antibiotic they must also comply use. The entire process of acquisition, use, with buyer country rules. registration and traceability is maintained Seara moreover performs in the production chain. The Company quarterly internal audits of all follows the premises of all of the markets processing plants, aimed at and customers with which it works, while ensuring compliance with the also complying with all items required by requirements set forth. law in Brazil. Seara does not use antibiotics preventively at any stage in its production.

Transportation Production Notable in the Seara special portfolio are the Da Granja range, with antibiotic- and anticoccidial-free products Animals are transported from For the production stage, each plant has at least one per- and chickens fed using green feed; farms to production units using son responsible each shift with animal welfare training. Organic Chicken range, with organic a team trained to minimize certification and free range animals; animal stress, prevent injuries All team members who come into contact with animals and the Nhô Bento line, with free- during transport and guaran- are trained on preventing injuries and stress. The plant's range chickens. tee appropriate spacing inside managers are responsible for ensuring that a sufficient transport crates or trucks. Driv- number of team members are used on the hanging ers are instructed on emer- line during the entire process, which runs at a speed gency procedures in the event that does not cause stress to birds. After hanging, the that a vehicle breaks down, the animals undergo a desensitization process and continue route is interrupted or blocked, to processing. the trailer is involved in an accident, there is a fire or when In the case of hogs, their skin must be moist and be free tires need to be changed. of excessive dirt. In the event that CO2 is used, the right Corporate Animal Welfare Committee concentration must be applied, respecting the minimum The transport routine follows a time and maximum number of animals in the chamber. The Company has a Corporate Animal Welfare Committee, which is responsible for series of indicators, such as crate assessing and discussing topics relevant to businesses, with the goal of guaranteeing density and weight in loading, In addition to these measures, the Company invests in ongoing improvement in animal welfare at production units and in relation to matters as well as mortality percentage, improvements to its production process. In 2019, ap- strategic to the Company. The Committee describes procedures and implements the so as to guarantee appropriate proximately R$ 14.5 million has been invested in ani- controls needed across the production chain to ensure that animal welfare is appropriately practices are adopted. mal welfare improvements at Seara production units. maintained. The committee also discusses strategies to inform and engage team members with this theme. This year, the committee developed the corporate animal welfare seal, to be used by Seara and Friboi, establishing a commitment by JBS as a company.

224 225 Annual and Sustainability Report // 2019 • JBS JBS USAGRI 102-16 JBS USA Beef, JBS USA Pork and Pilgrim’s Pride

JBS USA Headquarters, Greeley, CO

Driven by the passion to be present at family meals across five continents, JBS USA is a global leader in the beef and prepared food markets. The Company works to make the lives of its consumers more tasty through a success story that reflects three qualities that sit at the heart of its operations: a commitment to innovation, a strong culture and entrepreneurial spirit.

Headquartered in Greely, Colorado, JBS around the world. JBS USA is cur- USA has three major lines of business, rently one of the largest processors of which comprise all of JBS’s locations beef and prepared foods; the second outside of Brazil: JBS USA Beef, JBS USA largest pork processor in the United Pork and Pilgrim’s Pride (JBS is a ma- States; a leading processor of beef and jority shareholder). Our operations are prepared foods in Canada; and one of spread across the United States, Canada, the top processors of beef, lamb and Mexico, Australia and – following the ac- prepared foods in Australia. quisitions of Moy Park and Tulip – France, the Netherlands and the United King- Consumer know and trust our brands: dom. JBS provides food for more than Swift, Plumrose, Pilgrim's Pride Moy 280 million meals every day to custom- Park and Tulip. ers in more than 100 countries. As with every operational front at JBS, In partnership with farmers and ranch- JBS USA champions the global val- ers from rural communities globally, ues of the Company while localizing the more than 100,000 team members culturally and creating a model that at JBS USA work to provide flavorful, combines synergy and autonomy to healthy and high-quality meals to deliver operational excellence and OUR BUSINESS retailers, distributors and restaurants passion for the foods people love.

227 Annual and Sustainability Report // 2019 • JBS Business description Map of operations

CANADA JBS USA BEEF UNITED JBS USA Beef is the world’s largest STATES beef company, and is focused on beef, lamb and prepared foods production and distribution in the United States, Canada and Australia (through our Primo business in Australia). With approximately 36,000 team members, the Company offers a broad portfolio fresh and prepared foods products from well- known brands, serving markets in these AUSTRALIA AND countries, as well as export markets. NEW ZEALAND In Australia, JBS is a leader in animal protein processing and prepared foods, exporting to more than 70 countries. 18 beef processing facilities 6 feedlots

8 transportation facilities 2 leather facilities

8 distribution centers 2 lamb facilities NUMBER OF TEAM MEMBERS: 11 prepared foods facilities 1 pork facilities 36,000 Main brands

228 229 Annual and Sustainability Report // 2019 • JBS JBS USA PORK

The world's second largest pork producer, JBS USA Pork provides high-quality fresh and prepackaged, ready to cook products, from bacon and ham to deli meats and pork cuts. The Company has approximately 11,000 team members. Plumrose, respected for its high-quality prepared products, was acquired by JBS in 2017.

Map of operations

MN VT

IA IL IN CA KY NC OK AR

TX MS

4 pork 2 distribution processing facilities centers NUMBER OF TEAM MEMBERS: 6 prepared 3 hog farms foods facilities 11,000

Main brands

ALL NATURAL* PORK

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Main brands

Map of operations

UNITED KINGDOM

NETHERLANDS UNITED STATES NUMBER OF FRANCE TEAM MEMBERS: 60,000 PILGRIM’S PRIDE PUERTO RICO MEXICO A publicly traded Company listed on the NASDAQ, Pilgrim's Pride Corporation produces and sells fresh meats and high-added-value prepared and pre-packaged consumer foods. It is 39 poultry a global leader in chicken production and processing, and the world’s largest producer of processing facilities organic chicken; through its subsidiary Moy Park the Company makes one out of every five chickens eaten in the United States, one out of every four in Mexico and one out of every three in the United Kingdom. Pilgrim’s is also the owner of Tulip Limited, a leading pork and 24 distribution centers prepared foods company in the U.K. Pilgrim’s approximately 60,000 team members work from locations in the United States, Puerto Rico, Mexico, the United Kingdom and Europe. 27 prepared foods facilities

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Performance

Annual highlights

During 2019, JBS USA Beef maintained its investment strategy, investing US$ 1.8 billion over the past 10 years. The investment strategy includes a focus on scale, diversification, unique sales and distribution capacity, and high-quality products.

Also in 2019, JBS USA Pork reached a milestone of US$ 500 million invested over the last 10 years. Strong growth during this period allowed the Compa- ny to gain a 15% share of global industry exports.

During the year, in the U.S. alone, more than 200,000 hours and US$ 33 million were invested by the Company in leadership training and development programs for its team.

Pilgrim's acquired Tulip Limited in 2019 for approximately US$ 392 million. As one of the largest pork and prepared foods companies in the United King- dom, the Tulip acquisition positioned Pilgrim's as a global leader in pork and prepared foods, these categories now account for 17% of Pilgrim’s global sales.

In Australia, sales increased 6.5%, export revenue increased 10.4% and domestic revenue decreased 2.4% from 2018 to 2019.

JBS USA Headquarters, Greeley, CO

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Products and services

Stakeholder engagement There are also brand-specific sites and social media channels through which consumers can learn more about the Company’s products, JBS USA's commitment to excellence starts brands and value chain. Those interested, can with the strict quality control standards incor- interact with the Company's profiles, while also porated throughout its operations. The Com- using the "contact us" forms on websites to pany's facilities have adopted robust safety learn more about the brand and gain a better measures and advanced technologies to de- understanding of the food product they are liver high quality products, including multiple interested in. options that meet the breadth of consumers' nutritional needs and purchase expectations, In 2019, JBS in Australia continued to grow its from traditional products to organic and ready- marketing strategy, embracing the power of to-serve dishes. digital communication channels to expand opportunities to engage with customers and To guide innovation and ensure our portfolio consumers around the world. Most of the beef aligns with and anticipates global trends, JBS brands now have their own individual websites, USA closely listens to what consumers have to that connects and is attached to the Compa- say. In addition to market surveys, the Compa- ny's main marketing initiative: aussiebeef.com. ny has a variety of communication resources, au, a website regularly publishing relevant and particularly digital, that enable us to engage updated content on beef products, along with consumers, as well as customers and other tips on cooking and serving them. In addition stakeholders. To simplify these conversations, to the website, aussiebeef.com.au has a strong we organize customer and consumer resourc- social media presence, including on Facebook, es into protein-specific, customer-focused and Instagram and WeChat. consumer-focused websites and communication channels. In addition to websites and Primo Foods uses all of the main tools of profiles on social media, the Company provides communication, whether traditional, digital, Customer Service hotlines and an e-mail con- person-to-person, e-mail, website search- tact. See more in Chapter 1/Innovation es, telephone (i.e. customer service) or social media platforms, including private and public Many business units have developed websites messages. Depending on the query, responses with resources geared toward customers, al- are provided to different teams, such as sales, lowing them to create personalized accounts. marketing, quality and customer service. There Through these websites, they can access infor- were 15% fewer consumer complaints at Primo mation about point of sale materials, packag- Foods in 2019. ing specifications, brands, premium programs, value-added products, food safety, quality and animal welfare. JBS USA Pork team members discusses food options with a U.S. consumer in a leading retail store.

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Quality

Food safety and quality is at the heart Each JBS USA production facility has a robust can be identified, pest control and hosts a Global Food Safety and Quality Confer- of our business. We continuously review food safety and quality program that consists food security programs; and annual ence with area professionals to identify com- every aspect of our daily operations to of Standard Operating Procedures, Sanitation certification to the Global Food Safety mon challenges, industry trends and opportu- make sure we provide safe, high-quality, Standard Operating Procedures, Hazard Anal- Initiative (GFSI) standards at almost all nities for improvement. nutritious products for our customers ysis and Critical Control Point (HACCP) proce- processing plants. and consumers. dures and technology interventions designed In the USA and Canada, the Food Safety and to eliminate or reduce food-borne pathogens. Critical to our global approach to food Quality Advisory Committee is responsible for The JBS USA management structure These processes are monitored by specially safety and quality assurance is the providing oversight and guidance to our food for Food Safety and Quality Assurance trained team members and government offi- ability to share and leverage best man- safety and quality assurance programs as well is designed to ensure leading perfor- cials in each production facility. agement practices across the Company. as regulatory compliance. Senior JBS USA mance, relying on corporate oversight Within this effort, each business unit is and Pilgrim’s team members serve on the at the highest level. The team is led by All facilities also adhere to good manufac- tasked with communicating best prac- committee, as well as academics who spe- the Global Head of Food Safety and turing practices; recall/market withdrawal tices in relation to regulatory compli- cialize in the areas of animal science, meat Quality Assurance, who oversees the procedures, which offer traceability resources ance, pathogen control, modernization science, epidemiology, food microbiology and Company’s global food safety efforts. to ensure that the proper products and dates and other innovations. In addition, JBS veterinary medicine.

JBS USA Hyrum, UT, Beef Processing Facility

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Legal compliance Training and auditing JBS USA teams undergo Food safety and quality system In North America, we require program, organizational In the USA, the U.S. Department of extensive food safety audits are conducted annually that all suppliers who provide structure improvement, Agriculture’s (USDA) Food Safety and management training to using accredited and indepen- products or services that partnership mapping, a Inspection Service inspects every ensure that quality products dent auditing firms. All pro- have direct contact with food global training program and JBS USA production facility daily to reach customers and duction facilities in the United must pass the ISNetworld platforms for collaboration, guarantee that food products meet consumers. Newly hired team States, Canada, Europe and and GFSI audits. sanitation and technology. federal food safety standards. members receive training on Australia, and 86% of Mexico quality assurance and food operations, have been audited In 2019, the global Food In Canada, the Canadian Food Inspection safety management systems, and certified by audit schemes Safety and Quality Assurance Agency (CFIA) regularly inspects and and participate in additional recognized by the GFSI, one of team developed a five-year actively monitors plants to ensure job-specific training. Everyone the most-stringent food safe- strategic plan that included compliance with food safety standards. working at the Company's ty-related standards. Internal the creation of its values, production facilities receives audits and inspections are mission and seven strategic In Australia, Department of Agriculture ongoing training on food conducted by corporate Quali- pillars. These are comprised and Water Resources (DAWR) safety policies and practices. ty Assurance team members. of: a performance recognition representatives are permanently located at the Company's plants and perform inspections of facilities daily to guarantee compliance with food safety requirements for foreign consumption and export.

In Europe, production units are inspected and audited by third parties in accordance with the European Union Food Hygiene regulations and any additional customer quality requirements to verify compliance with the economic bloc's laws.

In Mexico, Pilgrim's follows the best practice guidelines for chicken production, as defined by the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) and the National Service for Agro-Alimentary Public Health, Safety and Quality (SENASICA). Five of the six Pilgrim’s facilities in Mexico have a Federally Inspected Type (TIF) certification.

JBS USA Hyrum, UT, In addition, many of our facilities are Beef Processing Facility also subject to additional customer quality requirements.

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Innovation and products

A passion for innovation sits at the core of JBS USA – it’s the key to unlocking greater value from our products and adding flavor to consumers’ lives. But it’s also the critical tool that will help us feed the world today while also improving the lives of future generations. Innovation allows the Company to develop more-efficient and sustainable practices while adapting to changing customer tastes. The Company's approach to innovation is built upon consumer insights and customer needs found through opinion surveys and market growth opportunities.

United States Mexico In the United States, Plumrose Pilgrim’s Mexico has two facilities that produce is one of the leading suppliers value-added poultry products, including fully of pork meat, ribs and bacon to cooked products. both retail and foodservice customers. JBS USA Retail Ready, Canada a business that specializes in In Calgary, Canada, JBS provides case-ready processing meat and pork-based beef, pork and poultry solutions to Canadian products, includes two produc- supermarkets and foodservice customers. tion facilities strategically located on opposite coasts of the United Australia and New Zealand States to provide fresh, pro- In Australia, Primo Foods is the largest cessed beef and pork products manufacturer of ham, bacon, salami and deli to customers across the country. meats. JBS is also a leading Australian meat The JBS USA Consumer Value supplier, producing ready-to-serve meals and Added (CVA) team is focused on sous vide meat options for major retail stores retail growth, offering fully pack- and foodservice clients. Beehive, part of Primo aged and ready-to-be-cooked Foods, is the number one brand for bacon and products for consumers. Pil- ham in New Zealand. grim’s U.S. includes a case ready divisions with eight production Europe facilities that specialize in pro- In the United Kingdom and Europe, Moy ducing traditional tray pack, deli Park is a leading provider of innovative and boneless dark meat poul- convenience products, including chicken try products for retail. Pilgrim’s and beef products; vegetarian products, like U.S. also includes four prepared spring rolls and onion rings; and desserts, foods production facilities that including donuts and apple pies. Also in the specialize in producing mari- United Kingdom, Tulip provides a wide range nated, battered and breaded, of high-quality and innovative products such par-fried and fully-cooked frozen as sausage, slow cooked and BBQ, gammon, chicken products for leading bacon and cooked meats to the retail and foodservice and retail customers. foodservice sectors. JBS USA Hyrum, UT, Beef Processing Facility

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2020 goals set for U.S. and Canadian facilities only. Environmental goals established based on Sustainability 2013, 2014, 2015 average baselines.

The JBS USA sustainability approach is guided by the mission to be the best in all that we do while securing the opportunity of a brighter Reduce future for JBS team members, shareholders, suppliers, customers natural and the next generation. Sustainability involves continuously gas-use improving social responsibility, economic viability and environmental intensity by stewardship. Using these pillars to guide the JBS USA process, Reduce 20% in addition to input from internal and external stakeholders, the electricity-use AS OF 2019: Company have five key areas of focus: product integrity, team intensity by 16% member health and safety, animal welfare, water, and energy and Reduce 12% of reduction. climate change. To fully integrate Company key priority areas into water-use AS OF 2019: business operations JBS USA set aggressive goals for 2020. intensity by 17% Reduce GHG 10% of reduction. emission AS OF 2019: intensity by 10% Pilgrim's Sanford, NC, Family Farm Partner Barn with Broiler Chicks 20% of reduction. AS OF 2019: 17% of reduction. Score 90% or better on our JBS Improve our USA animal Safety Index welfare. Score by scorecard 10% AS OF 2019: 100% each year. We’re on supplier AS OF 2019: track to adherence with 18% meet this our Supplier Code of improvement goal. Conduct. from 2018 to AS OF 2019: 2019. We’re on track to meet this goal.

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Product integrity

Supplier relationships The nature of our business demands a diverse supplier base; we work in partnership with more than 81,000 suppliers to ensure the highest-quality inputs. Our suppliers range from small family farms and ranch partners who supply us with livestock and poultry to large multina- tional companies that manufacture and provide materials and services. Impacts related to environmental and social aspects differ for each supplier based on the materials they manufacture, the animals they raise or the services they provide. Directly affecting these impacts Pilgrim's Sanford, NC, Family Farm chain is often outside of the immediate Partner Barn with Broiler Chicks control of JBS USA, which is why we strive to form partnerships with suppliers who share the Company's values and mission to achieve more sustainable Chicken suppliers food production. More than 4,900 family farms have Committed to quality across its value chain, Rural Development, Fisheries and Food (SAG- For example, in Europe, Moy Park takes partnered with Pilgrim’s in the United Pilgrim’s conducts audits on a sub-set of fami- ARPA), the Ministry of the Environment and part in the Meet the Buyer initiative to States, Puerto Rico, Mexico and Europe ly farm producers in the United States accord- Natural Resources (SEMARNAT) and the State meet with local companies and discuss to raise our chickens. In the United ing to the Company's Animal Welfare Program, Civil Protection. opportunities for collaboration. Meetings States, we work in partnership with with the support of a team of internal and are held by local councils to support small independent family farmers to raise our external auditors. In Europe, all farms are certified by the Red Trac- regional companies, creating business chickens; we provide the chickens and tor initiative, the largest food standards scheme opportunities. feed, as well as technical and veterinary In Mexico, every farm is audited in compliance in the United Kingdom, with performance that services. In Europe and Mexico, in with Mexican government standards, including meets or exceeds the criteria of this initiative, as addition to our own poultry facilities, those issued by the Ministry of Agriculture and well as of other certifications. Pilgrim’s Moy Park Guarantee of origin the Company works in partnership Rural Development (SADER), the Mexico-Unit- has developed a Policy for Supply Chain Assur- JBS USA works in partnership with with family farmers who maintain the ed States Commission for the Prevention of ance for meat and ingredients, ensuring that suppliers to guarantee the quality of the Pilgrim’s standards of excellence on Diseases and Other Exotic Animal Diseases meat products come from suppliers certified by raw materials used in its production. their farms. (CPA), the Secretariat of Agriculture, Livestock, the Red Tractor initiative or an equivalent initiative.

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Pork suppliers

In 2019, our U.S. based business purchased more before livestock leave their property of birth, than 24.8 million hogs from approximately 800 they must be tagged with an approved Nation- family farmers to supply our five U.S. pork pro- al Livestock Identification System (NLIS) device. duction facilities. Pilgrim’s Tulip sourced more This allows animal movements to be recorded than 2.9 million hogs from 930 family farm in a national database and provides the assur- partners. Approximately 50% of Tulip's hogs ance of livestock trace-back to the property of are sourced from our integrated supply chain. birth and trace-forward from the property of birth. All hogs are sourced from Australia Pork In the U.S., we require all family farm partners Industry Quality Assurance Program (APIQ) that supply hogs to our facilities to be certified accredited farms with industry best-practice and site-assessed according to the Pork Quality animal welfare standards. Assurance Plus (PQA+) Program. We conduct third party audits of a subsample of our part- Moy Park purchases pork from approved suppli- ners according to the PAACO-certified Com- ers, which are audited annually for food safety mon Swine Industry Audit. We also conduct and animal welfare. internal animal welfare audits on a sub-sample of our suppliers. At Tulip, stringent control of the supply chain guarantees that all livestock are treated accord- Hogs that are consigned for sale in Australia ing to the high animal welfare standards. Our must be tagged with an approved NLIS device. Tulip hog farms and hog and lamb suppliers are National Vendor Declaration (NVD), which is the assured to either Royal Society for Prevention of main document that upholds the Australian Cruelty to Animals (RSPCA), Red Tractor or Qual- Beef suppliers meat and livestock food-safety reputation and ity Meat Scotland (QMS) standards. Our Tulip product traceability. When the NVD is signed, owned hogs are outdoor bed and raised accord- In 2019, JBS USA Beef and JBS Food Canada In Australia, livestock are required to have a the producer declares compliance with the ing to the RSPCA higher welfare standards. In a purchased more than eight million head of cattle NVD to be sold. In addition, before cattle leave Livestock Producer Assurance (LPA) program, privately commissioned, standalone assessment from approximately 32,000 family farms and their property of birth, they must be tagged which is an independently audited on-farm Tulip has been awarded the highest rating, a ranches to supply 10 beef production facilities. with an approved NLIS device. food-safety certification program. The NVD con- Tier 1 ranking, for its animal welfare standards, JBS Australia purchased approximately 4.2 mil- tains important information on the husbandry under the ‘Business Benchmark on Farm Animal lion head of livestock from 17,077 partner produc- In Europe, Moy Park in Orleans, France, only of livestock consigned for harvest. In addition, Welfare’ (BBFAW). ers,, including cattle, lambs, sheep, goats and veal purchases beef from approved suppliers, calves, to supply its 12 production facilities. who are audited annually for food safety and animal welfare. The Company has developed JBS USA Finishing Hog In the United States and Canada, cattle sup- contracting initiatives along with French beef pliers are required to sign an affidavit assuring breeder associations, with the goal of ensur- their compliance with government regulations ing a stable market for producers. Moy Park and animal-welfare certification according to also encourages its suppliers to purchase the Beef Quality Assurance (BQA) or equivalent cattle from farms with good farming practices, program. We also encourage feedyard partners which in France are certified by the “Charte to add their feedyard to the precompetitive Na- des Bonnes Pratiques d’élevage,” established tional Cattlemen’s NCBA Feedyard Assessment by the National Livestock Confederation. Meat Database. We anticipate 60% of our feedyard from the Netherlands and Ireland also comes partners will participate by January 1, 2021. In from programs that guarantee Good Farming addition, we will ensure third-party verification Practices. All 1,600 contracted farm partners of the Beef Quality Assurance (BQA) Feedyard are audited for animal welfare and environ- Assessment for 25% of our cattle supply. mental performance.

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Social responsibility JBS USA Riverside, CA Retail Ready Processing Facility

GRI 203-2

Delivering high-quality products would not be possible without team members and supplier partners in rural communities globally. Actions Conduct that develop transparent and close relationships with communities, and ensure the health, safety and well-being of team members, are JBS USA is committed to conducting all activities in compliance with labor top priorities at JBS USA. The ability to deliver high-quality products and human rights laws; a series of internal and external policies guarantee this so well reflects our culture, which is a key point to JBS USA. There is process. For example,a Supplier Code of Business Ethics and Conduct has been a passion for the business throughout the Company, and it manifests developed,, which ensures that vendors meet or exceed our high standards itself in multiple ways. It’s what makes operational excellence possible. when conducting business with JBS USA. Learn more in JBS/Ethics and It fuels our never-ending drive to innovate. It provides the confidence compliance, on page 36. behind our team members’ will to win. It’s seen in the spirit of entrepreneurship – and the qualities of sincerity, discipline and humility We have a 2020 goal for all of our partners with agreements entered into since – that we prize. And it’s the reason we care so much about our team 2018 to be in agreement with this code. members and the communities where it maintains its operations.

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Community Relations Other JBS USA actions JBS USA prioritizes work with partner Together with the government of Brooks, Alber- organizations that support the disadvantaged ta, JBS USA supports the JBS Canada Center, a • Tomorrow Fund – A Pilgrim’s Pride new scholarship program, which will give company workers and and those in need, improve the development facility where immigrants are able to play sports, their direct dependents an opportunity to be awarded funds for their education. Starting in 2020, and wellbeing of youth, promote agriculture, attend educational activities and socialize, Pilgrim's will award one person representing each of 31 facilities across the USA and Puerto Rico, a support the Company's team members, among other services. For example, in the library full scholarship to an institution of their choice. Each person will receive mentorship from someone promote acceptance and diversity, and support thousands of people become more familiar with at Pilgrim’s to guide them in higher education. local communities. the English language and Canadian culture.

• United Way - As a long-term Partner of United Way, the JBS USA corporate headquarters in Gree- The Company particularly recognizes the im- In Australia, Primo Foods supports Foodbank, an ley, CO, champions an annual campaign to support the local community through United Way of portant role it plays in the communities where initiative aimed at serving people living with food Weld County (UWWC) efforts. In 2019, the Company raised US$ 406,555 – the highest amount since team members live and JBS USA operates. In insecurity, by donating products valued at approx- 2015. To ensure 100 percent of team member donations go straight to the programs, JBS USA cov- addition to its role as a major job creator, the imately AUD 390,000. The Company also collabo- ered all administrative and fundraising costs for the resources under UWWC’s management. Company has a long history of partnering with rated in the CEO CookOff, another project geared local non-profit organizations and encourages toward vulnerable communities, to provide food • Worthington United Way – JBS USA Team Members at our Worthington, MN pork production facili- team members to take every opportunity to be to six million people through donations of cash ty pledged US$ 167,000 to the United Way for Nobles County 2020 fund raising campaign. active stewards of their community. The goal is and products. At an event to commemorate the for our hometowns around the world to consid- project, the CEO of Primo cooked for 1,400 guests • Pork Product Donation - JBS USA Pork and their producer partners teamed up to provide over er JBS USA a good neighbor. from Sydney's most impoverished communities, 50,000 pounds of pork and US$ 10,000 to Food Bank of the Rockies. This donation is part of the an- along with 300 business leaders and 50 of the nual Hams Across America program. The 200,000 servings of pork will be distributed by Food Bank To make sure volunteering, sponsorships and do- best chefs in Australia. Throughout the year, JBS's of the Rockies. The organization is the largest hunger relief organization in Colorado, providing food nations have the most meaningful impact, the Australian operations sponsored more than AUD and supplies to more than 700 hunger-relief programs. Company always seeks to support local initia- 648,000 and donated 122 metric tons of food. tives, many of which benefit community schools, hospitals and youth organizations. This approach Pilgrim’s Moy Park, invested in initiatives tar- to community involvement allows the Company geting education in rural communities, which to have an impact where its team members live include scholarships, job placement support and work, with the greatest possible benefit. and training in business disciplines to better qualify young people for meaningful employ- The Company does not set consolidated giving ment. The Company also partnered with the or volunteering targets. Instead, each JBS USA Marie Curie Foundation, an institute committed unit has an annual budget dedicated to sup- to providing care to people with terminal illness- porting local initiatives and communities, based es and their families. Marie Curie nurses provide on an assessment of regional priorities. They are 24-hour practical support day and night to pa- encouraged to follow basic guidelines for part- tients in their homes and at nine hospitals. nering with the community and determining the best use of funds. For example, while some Since 2015, Moy Park has also partnered with facilities focus on working to better the lives of FareShare, the largest food redistribution institute local youth, others choose to fight hunger. in the United Kingdom, whose goal is to combat hunger by redistributing excess food to charitable At the national level in the USA and Canada institutes. In 2019, products equaling 370,000 in 2019, JBS USA and Pilgrim’s supported the meals were donated for redistribution across United Way, American Cancer Society, March FareShare's entire network of 21 Regional Centers, of Dimes, Relay for Life, American Red Cross reaching homeless shelters, breakfast and lunch Pilgrim's Sanford, NC, and local learning institutions, such as public clubs, domestic violence shelters and community Chicken Production Facility schools, colleges and universities. cafes throughout the United Kingdom.

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Each facility also has a safety committee, the members of which are team members from that same location, who meet regularly to assess workplace risks and propose mitigation strategies. Safety data is shared internally and each year there are specific safety targets for the Company, business units and facilities.

In the U.S., we conduct comprehensive safety audits to identify and reduce potential hazards. Based on the results of these audits, each year, we identify three high-priority initiatives—one that is companywide, one that is business unit-wide and two that are prioritized by each facility. In 2020, our company-wide initiative is machine guarding with a focus on conveyor belt guarding.

Regulations The JBS USA General Safety and Health and with Safety and Health instructions, which Policy focuses on training and educat- are compliant with OSHA standards. ing our team members and eliminating work hazards. Safety management pro- In Canada, the JBS Health and Safety Man- grams meet government requirements agement System is aligned with the Alberta in each country. Occupational Health and Safety (OH&S) law. In addition, the Company's facility holds a Certif- JBS USA Hyrum, UT, Our U.S. and Puerto Rican facilities are icate of Recognition (COR), granted by the Al- Beef Production Water in alignment with the U.S. Occupational berta Food Processing Association (AFPA); this Reclamation Facility Safety and Health Administration means that the JBS Canada Health and Safety (OSHA) standards. Management System has been evaluated by a certified auditor and meets the provincial stan- In Europe, programs meet the Regula- dards established by Alberta OH&S. Occupational health and safety tions on Reporting of Incidents, Diseases and Dangerous Occurrences (RIDDOR), Corrective actions JBS USA believes that safety is critical to operational excellence. The Company does not tol- put out by the Health and Safety Execu- The health and safety of JBS USA team mem- erate unsafe work conditions and is committed to providing an appropriate environment for tive, a governmental agency in the Unit- bers is of the upmost importance to the Com- its team members, in addition to implementing policies and procedures to guarantee best ed Kingdom responsible for fostering, pany. While the Company focuses on actions safety practices at every JBS USA facility. regulating and applying health, safety aimed at education, training, process improve- and wellness actions in the workplace. ments and cultural accountability, accidents do JBS USA has a Director of Occupational Health, who provides continual improvements to our occur, and they must be acknowledged, report- health protocols and ongoing training to our Occupational Health Staff to further share and In Australia, each jurisdiction enacts its ed and serve as a source for learning. There is a implement best practices across all of our facilities. own Work Health and Safety Act and formal Incident Investigation Procedure aimed Work Health and Safety regulations, at clarifying incidents and geared toward Personal protective equipment (PPE) for team members is standard across all facilities. Facility which the Company's facilities comply reducing, mitigating or eliminating injuries, Safety Managers conduct workplace hazard assessments regularly to survey PPE needs and with in each region. The overarching safety illnesses and fatalities. provide training and technical assistance to team members, ensuring effective PPE usage. management system framework in the country is aligned with the National Audit The investigation process assists operations in JBS USA’s Ergonomic Improvement Program was designed to reduce the effects of repeti- Tool (NAT), which is based on Australian preventing similar incidents from occurring tion, contact stress and static postures. The program is tailored for each facility to control or Standard 4804 for Occupational Health and in identifying injury and illness trends as eliminate potential conditions or work activities that pose ergonomic risks at each partic- and Safety Management. well as potential points for improvement in ular site. Annual training and assessments continually improve the program. Additionally, safety management. each plant undergoes an ergonomics audit annually, where ergonomic issues are identified, In Mexico, the Company complies with logged, and remediated within a reasonable period of time. the requirements of the Labor Secretariat See more in Chapter 2/Health and Safety.

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To this end, JBS USA has set aggressive 2020 goals. Each facility has developed JBS USA is committed to helping society rise to the water, energy and greenhouse gas reduction goals, which have been aggregated global challenge of meeting humanity's growing to form corporate goals. nutritional needs in a sustainable and environmentally responsible manner, with efficient operations and less The management approach at JBS USA is focused on continuous improvement in environmental impact. The Company's vision is to be operational efficiency, innovation and compliance with applicable environmental an industry leader in conserving and minimizing the laws and regulations. The Company's internally audited Environmental Manage- use of natural resources, minimizing their use as well ment System (EMS) is based on the specifications of ISO 14001 and directs special- as waste generated. ized environmental teams to: recognize the environmental aspects and impacts of their specific facility, establish objectives and targets to reduce potential impacts, assign roles and responsibilities, identify team members and positions whose responsibilities may impact the environment and provide them the appropriate operating procedures, and addition to implementing an efficient monitoring and measurement program for each environmental aspect. All Moy Park facilities are ISO 14001-certified or are working toward ISO 14001 certification.

JBS USA Hyrum, UT, Beef Production Water Reclamation

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Water

Water availability and quality are pillars in our municipalities to address complex issues and sustainability program. We work to improve wa- jointly develop solutions. ter-stewardship efforts by monitoring use at facilities, while always preserving high standards Water risk assessment is an element in the for food safety and sanitary conditions and con- management strategy and allows us to identify tinuing to advance water reclamation efforts. and prioritize specific water resource projects Some facilities are located in water-stressed that are locally relevant to each watershed and areas and require a more strategic focus to en- reduce the Company's overall water impact. sure proper management of this resource. The Company tracks both total water use and At JBS USA operations, in addition to a water intensity (water use per pound of finished corporate target to reduce water consumption product, including co-products) to consistently intensity by 10% from 2015 to 2020, there identify opportunities for improvements, irre- are also individual targets by business unit spective of changes in production. The greatest JBS USA Hyrum, UT, Anaerobic Lagoon and facility. Every facility has ownership to opportunity for water reduction is through water work toward its individual reduction goals by recycling projects, in addition to increased op- managing critical topics and is tasked with erational efficiency. Our facilities focus on reuse responding to unique local challenges and initiatives, including elaborate recycle systems Effluents determining the most effective approach that allow previously used water to be reused The quality of water returned to nature is also a priority. That is why the Company continu- within its context, including withdrawal in other areas of the facility, wastewater to be ously works to make sure that reclaimed water meets or exceeds all regulatory requirements. sources, discharge destinations, wastewater reused to flush animal pens to potable water to treatment programs and reuse and recycling be used to recover wasted heat (from rendering Each production unit has a water reclamation treatment program specifically tailored to that strategies. JBS USA works closely and cookers, for example) before being reused as facility’s effluent discharge permit requirements. These programs help to reduce total dis- collaboratively with federal, state and local heated water throughout the facility. charged water volume and address noncompliance issues. All feedlots and hog operations are managed in accordance with legally mandated nutrient-management plans or equiva- lents. Manure also generated plays an important role, since it is composted and used by local JBS facilities by water risk category* farmers to enhance soil quality in place of synthetic fertilizers.

In feedlots and hog operations, surface water and groundwater are protected by appropriate- Low risk ly sized and sealed retention ponds that hold all storm water runoff. Collected water is then used for dust control or to irrigate surrounding farmland.

Low to medium risk The Company strives to capture the greatest amount of reusable product from wastewater treatment to reduce nutrient loading in discharged water. In 2019, the Tolleson, Arizona facility reduced organic waste production by removing and capturing a greater amount of tallow during the water reclamation process. The project captures on average 12 pounds of tallow Medium to high risk per head, saving the facility significant water treatment costs.

High risk

Souce: Aqueduct JBS USA has a target to reduce water use *does not include data regarding Tulip's operations intensity by 10% by 2020.

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Emissions and energy GRI 305-4 GRI 305-5 Waste and packaging

Improving energy efficiency and reducing air and JBS USA continuously invests in technologies JBS USA’s commitment is meat and bones, to serve as packaging and food waste in greenhouse gas (GHG) emissions are priorities at that result in better recovery and monitoring of to reuse or recycle the max- raw materials for new prod- its value chain. The initiative is JBS USA. Especially in the communities where it data from equipment with high energy con- imum amount of materials, ucts. Nearly 100% of inedi- part of an ambitious campaign operates, its impact on air quality are among the sumption. In addition, the Company continues with the goal of sending as ble byproducts are rendered to combat the use of plastics critical responsibilities for the Company. to invest in energy efficient technologies in- little to landfills as possible. to produce tallow and blood and packaging in its business cluding LED lighting, real-time measurement Each facility works to recycle and bone meal, which are and in the industry. The Com- JBS USA issues annual public reports on green- devices and predictive maintenance, more material and reduce waste sold to other companies to pany plans to lower its global house gas emissions as well as data on fuel use, efficient equipment, electrification of heating by optimizing facility logistics be used in consumer goods, use of packaging by 5% each fuel use intensity, electricity use and electricity systems and transportation and more efficient and team member training. such as cosmetics and phar- year, while simultaneously rais- use intensity. refrigeration systems. maceuticals or in livestock ing the percentage of recycla- One waste management, or poultry feed. ble packages by 5%. This target Eleven of the Company's facilities use biogas recycling and cost reduction is part of the "Remove, Reduce, as a renewable energy source and two have strategy has been to work Unfortunately, packaging Recycle and Research" strategy By 2020, JBS USA aims to lower implemented solar systems. The share of with third-party companies in poses a unique challenge for adopted by the Company. electricity use intensity by 12%, indirect energy from renewable sources used each facility. They are respon- the food industry, as appropri- natural gas use intensity by 20%, at facilities in U.S. varies between 3% and 25%, sible for conducting a gap ate recycling facilities are not Among actions planned, Moy and greenhouse gas emissions depending on where the facilities are located. analysis, identifying opportu- available to all customers or Park will collaborate with intensity by 20%. nities for continued improve- end-users. In addition, packag- researchers and supply ment and adopting best prac- ing materials that come into chain partners to develop tices. Working with our local contact with blood, meat or sustainable packaging for teams and third-party part- fat cannot be recycled. We are its entire product portfolio ners at the facility level has working across a number of in- and will eliminate single use resulted in a greater capacity dustry collaborations to partner plastic from its office and for JBS USA to tailor its waste on ways to enhance recyclabili- restaurants by 2020. The JBS USA Hyrum, UT, Beef Production Facility and recycling approach. ty of our packaging materials. business will begin using 100% recyclable rigid pack- One important attribute of In Europe, Moy Park was the aging by 2022. All other our business is to make use first poultry company to under- packaging will be widely of byproducts, such as blood, take a commitment to reduce recyclable by 2025.

JBS USA recycling data

• 80% of clean cardboard is sent to recycling centers or paper mills to be reused • 95% of pallets are returned to suppliers for reuse • 95% of all metal is sent to a salvage yard • 95% of clean, non-contaminated plastic is collected in bins and then sent to either a recycling center or repurposed to make new products • 95% of plastic high-density polyethylene (HDPE) bags are sold to the original manufacturer and then reused by JBS USA, creating a closed loop system • In 2019, Pilgrim’s Moy Park kept its commitment of sending zero waste to landfills

260 261 Animal welfare Annual and Sustainability Report // 2019 • JBS Management

Ensuring the well-being en Producción de Pollo de Engorda de SADER JBS USA has created management struc- of the livestock and y SENASICA, Council Regulation N˚1099/2009, tures that encourage accountability and poultry under our care Australian Animal Welfare Standards and Guide- promote proactivity on quality assurance is an uncompromising lines and Australian Standard for the Hygienic and humane handling teams. Nearly commitment at JBS Production and Transportation of Meat and Meat every production unit has a full-time USA. Animal welfare Products for Human Consumption. Quality Assurance Manager, Animal Wel- is embedded in the fare Manager or Animal Welfare Officer framework of our culture, To continually improve the care and well-being (AWO) who is responsible for oversee- and we continually strive of our livestock and poultry, we have set aging the implementation of the animal to improve our welfare gressive 2020 animal welfare goals. The goals welfare program, which includes facility efforts through the use are based on our JBS USA Animal Health and assessments, training programs and of new technologies and Welfare Scorecard that is part of our Sustain- ongoing monitoring. For beef and pork the implementation of able Management System. The scorecard uses a production facilities in the United States standards that meet combined 19 indicators, selected for their im- and Canada, this team member is a PAA- and exceed regulatory portance to the health and welfare of animals. CO-trained humane handling specialist. requirements and The indicators are weighted on a 100-point In Australia, Quality Assurance managers industry guidelines. scale across eight main areas of importance, are trained according to industry AWO including compliance, annual audits (internal skills and are Australia Livestock Process- The Company's animal welfare and third-party), losses, priority indicators, investing Industry Animal Welfare Certification programs are often reviewed ment, transportation, management and health. System (AAWCS)-approved. by animal handling and welfare experts at Universities From procurement and transportation to opera- In Europe at our Moy Park facilities, our across the globe. These lasting tions and quality assurance, every JBS USA team AWOs at our poultry facilities are cer- academic partnerships have member is accountable for treating our animals tified through Animal Welfare Training assisted JBS USA in identify- in a humane and ethical manner. We have a Ltd. In addition, all personnel handling ing and investing in upgrades zero-tolerance policy for abuse of any kind, and chickens must have a certificate of to both its facilities and team all team members are required to report any vio- competency (COC), which is an assessed member training programs. lations directly to management, which they may qualification issued by the regional do anonymously. Team members or family farm regulatory authorities: Food Standards Proper treatment of animals is and ranch partners who violate our Animal Wel- Agency (FSA) in Great Britain or the addressed through Standard fare Policy and associated procedures are subject Department of Agriculture, Environment Operating Procedures (SOPs), in to disciplinary action, up to and including termi- and Rural Affairs (DAERA) in Northern addition to verification and pro- nation of employment, termination of a supplier’s Ireland. At our Tulip pork facilities our cess improvements designed contract and/or reporting to the government au- AWOs are accredited according to Bris- to promote animal welfare thority responsible for overseeing animal welfare. tol University or Livestockwise. and product quality. Animals processed at JBS USA facilities Each production facility has team mem- are treated in accordance with bers from processing, quality assurance, national and local regulations, operations, procurement and human such as the U.S. Department of resources, who make sure that the Agriculture (USDA) and Food The goal at JBS USA is a score policies and procedures required by Safety and Inspection Services the Animal Welfare Program are being (FSIS), Canadian Food Inspec- of 90% or better on their Animal followed, including annual training of all tion Agency (CFIA) Meat Inspec- Health and Welfare Scorecard. team members. tion, Buenas Prácticas Pecuarias

262 263 Annual and Sustainability Report // 2019 • JBS

Certificates and audits

All of our facilities are audited regularly to guarantee compliance with our animal welfare programs. Quality assurance personnel conduct daily audits to verify adherence to USDA, NAMI (North American Meat Institute) Animal Handling Guidelines, National Chicken Council (NCC) Guidelines, CFIA Meat Inspection Regulations, Buenas Prácti- cas Pecuarias en la Producción de Pollo En Engorda de SAGARPA y SENASICA, Council Regulation N˚1099/2009 standards on animal welfare and Australian Meat Industry Council (AMIC) Industry Animal Welfare Standards for Livestock and Processing Establishments, depending on region and protein. Govern- ment inspectors also monitor animal welfare practices daily to guarantee compliance with regulations.

Every production facility also undergoes annual third-party animal handling JBS USA Hyrum, UT, Beef Production Facility audits. If a deficiency is identified, immediate corrective action is taken and internal follow-up audits are scheduled until the issue is resolved. We share Livestock transporters are audited daily to ers, veterinarians and the Director of Animal At Pilgrim’s, farms are visited and assessed corrective action strategies across the verify adherence to JBS USA humane handling Welfare. When necessary, corrective actions weekly according to our Animal Welfare Pro- Company so that all facilities can ben- standards, NAMI Transportation Guidelines, are outlined with caretakers and additional gram by field technicians. In the U.S., a subset efit from new knowledge and perspec- CFIA Health of Animal Regulations Livestock training is administered as needed. The Di- of farms are audited by a PACCO-certified au- tives to drive continuous improvement Transport Requirements and Australian Stan- rector of Animal Welfare and Animal Welfare ditor according to NCC guidelines. Our Mexico in our approach to animal welfare. dard for the Hygienic Production and Trans- Manager conduct second-party site assess- complexes are compliant with the Federally portation of Meat and Meat Products for Hu- ments as part of the National Pork Board’s Inspected Type (TIF), a voluntary food-quality man Consumption, depending on the region. Pork Quality Assurance Plus (PQA+) program to certification of the Mexican government. In Eu- In addition, we have implemented verify that caretakers are providing care in ac- rope, poultry farms are Red Tractor approved a video auditing system in most of We also prioritize animal welfare standards cordance to industry standards. In addition to and meet or exceed Red Tractor, Bord Bia or our beef, lamb and pork production within our supply chain. In the U.S., we re- internal audits, JBS USA Live Pork participates equivalent welfare standards. Annually, an ex- facilities. This allows us to conduct quire all of our partners who raise the cattle in third-party animal welfare audits using the ternal auditor audits each farm to Red Tractor real-time internal auditing from and hogs that we purchase to be Beef Qual- PAACO- certified CSIA tool. standards, which results in Assured Chicken a viewing room and provide team ity Assurance (BQA) certified or Pork Quality Production (ACP) Certification. Our Tulip high- members with immediate feedback Assurance Plus (PQA+) certified and site as- In Australia, our feedlots are subject to annu- er welfare hogs are raised according to Royal for improvement. Our video footage sessed and verify compliance by conduct- al third-party audits as part of the National Society for Prevention of Cruelty to Animals and process is audited remotely by ing third-party audits according to the BQA Feedlot Accreditation Scheme (NFAS), which (RSPCA) higher welfare standards and all the an independent third party and alerts Feedyard Assessment and the Common Swine includes mandatory biannual internal animal hogs supplied to Tulip are either Red Tractor, and daily summaries are provided to Industry Audit (CSIA). Our sow and finishing welfare audits according to Australian Animal Quality Meat Scotland (QMS) or Red Tractor/ facilities for process improvement. farms are regularly assessed by field manag- Welfare Standards and Guidelines for Cattle. QMS and RSPCA Farm Assured.

264 265 Annual and Sustainability Report // 2019 • JBS

Humane handling

JBS USA animal welfare programs include spe- In Canada, the beef production unit imple- cific requirements and procedures to protect the ments animal welfare programs that align health and welfare of livestock and poultry during with NAMI guidelines and comply with Ca- transportation, unloading, handling and process- nadian Food Inspection Agency (CFIA) Meat ing, as well as the safety of team members. Inspection Regulations.

During transport and handling, there are stan- In Australia, the production facilities implement dard procedures for animal handling and animal welfare programs that comply with delivery that include both daily operations and the AMIC Industry Animal Welfare Standard – emergency situations. Mandatory reporting Livestock Processing Establishments and The and regular auditing are used to make sure Australian Standard for Hygienic Production that these procedures are being followed. Any and Transportation of Meat and Meat Products practice during transportation and handling for Human Consumption AS4696. that could cause harm to the animal is a major failure and corrective actions are implemented Regarding Pilgrim’s chickens, the U.S. animal immediately. Team members who work with welfare programs exceed or meet PACCO-certi- live animals are carefully trained on proper han- fied NCC Guidelines for our breeders, hatcheries, dling techniques. broilers and at slaughter. Our Mexico complexes are compliant with the Federally Inspected Type Quality assurance personnel at each JBS USA (TIF), a voluntary food-quality certification of the production facility conduct daily audits to ensure Mexican government. Our facilities in Europe are adherence to industry standards and govern- compliant with Council Regulation N˚1099/2009 ment regulations. Animal welfare performance is standards on animal welfare. In two poultry shared weekly with all facilities and senior man- production facilities in the U.S. and all production agement to guarantee constant and consistent facilities in Europe, controlled atmospheric stun- oversight, sharing of best management practices ning methods are used, and the chickens are not and corrective actions, if necessary. handled before being stunned.

In addition to properly training team members, Pilgrim’s Tulip higher welfare supply chain raises the design and maintenance of pens is critical hogs according to the RSPCA higher welfare to low-stress handling. Pens are designed to standards as a minimum and has been award- ensure smooth livestock flow along with team ed the highest ranking, Tier 1, by the global member training to identify and correct poten- ‘Business Benchmark on Farm Animal Welfare’ tial problems. (BBFAW) for its animal welfare performance, through an independently commissioned pri- In the United States, beef and pork production vate review. Tulip approved processing facilities facilities implement animal welfare programs also process lambs. Handling of hogs and lambs that align with the NAMI guidelines and are is done using low-stress techniques and facilities compliant with USDA FSIS Directives 6,100.1, are maintained to ensure appropriate animal 6,900.2 and 9 CFR Part 313. Compliance with flow. Controlled atmospheric stunning is utilized our programs is verified through daily and for all hogs. Animal welfare practices at produc- third-party audits. Ourall facilities have also vol- tion facilities are in compliance with Council untarily implemented the USDA’s recommend- Regulation N˚1099/2009 standards which are JBS USA Carriers Headquarters, Greeley, CO ed program for animal handling: “A Systematic monitored daily by Food Standards Agency Approach to Humane Handling and Slaughter.” (FSA) inspectors.

266 267 Annual and Sustainability Report // 2019 • JBS

Pilgrim's Sanford, NC, Family Farm Partner Barn

Housing

JBS USA is committed to providing the age during winter months and wet periods Pilgrim's contracts with more than 4,900 family addition, in Europe, we are pioneering animals under its care with comfort- to provide cattle a dry place to lie down and farm partners who raise breeder hens and industry-leading initiatives to continually able and safe housing that meets their reduce mud in the pens. For feedlots that are broiler chickens. From the farmers’ barns to improve the housing of our poultry by needs. Housing is key to protecting and located in regions with extreme weather, shade the Pilgrim’s production facilities, we require providing environmental enrichment, improving the health and well-being of is provided to prevent heat stress, and bedding our team members and family farm partners windows and provision activities, such as our animals. is supplied to provide a dry and warm place to to provide proper care to our chickens. Our perches and bales. lie down in winter months. Most of our feedlots family farm partners who raise our breeder The Company's facilities meet or exceed are also equipped with a sprinkler system to hens which produce hatching eggs use fresh Pilgrim’s Tulip higher welfare supply industry guidelines to make sure that reduce dust. shavings as bedding material in hen houses. chain contracts with farmers who raise the animals are comfortable and safe- These shavings are clean, absorbent, free of all sows according to the RSPCA high- guarded from extreme weather events, The hogs raised in the U.S. are housed indoors sharp objects and resistant to fungal growth. er welfare outdoor bred standards as a predators and vermin. In beef and pork and health and welfare are prioritized. Sows Across all of our farms, our service technicians minimum. Sows are free from confine- production facilities, pen stocking rates are provided with unlimited access to clean visit our breeders weekly to monitor chicken ment during gestation and farrowing. are set according to NAMI Animal Han- water and are fed a nutritionally balanced diet health. At our hatcheries, the temperature in Hogs are born outdoors and are provid- dling Guidelines, CFIA Meat Inspection based on life stage and individual body condi- the chick-holding room is targeted for chick ed with shelter, where they remain until Regulations and AMIC Industry Animal tion. Weaned and growing hogs in the nursery comfort based on the chicks’ internal tempera- they are weaned at approximately 28 Welfare Standards, and livestock have and finishing stages of production are provided ture. We monitor and document temperatures days of age. All of hogs in higher welfare access to clean water at all times. with unlimited access to clean water and feed. on an hourly basis, making any needed chang- supply chain have permanent access to Specific SOPs for maintaining animal comfort es as soon as possible. We make sure our chicks environmental enrichment. Tulip also Cattle in JBS Australia feedlots are and housing are further defined in the Live Pork have enough space and are not under direct sources hogs from independent farm housed in groups in open-pen, dirt Production Manuals. Climate-controlled ventila- air flow to prevent overheating. Before plac- partners. Those partners meet, and often lots. Pen stocking rates meet or exceed tion systems are expected to be maintained to ing any chicks at a farmer’s broiler farm, we go exceed, the requirements of the Red industry standards and are based on the promote animal comfort, control humidity, de- through our Pre-Placement Checklist to make Tractor or QMS assurance schemes and animal’s expected final weight. Cattle liver quality air and maintain desirable tempera- sure the farm and houses are neat and order- must provide hogs with permanent ac- have access to an unlimited supply of ture according to hog size and life stage. One ly, ventilation is ideal for brooding, ammonia cess to environmental enrichment. Tulip clean water and are fed twice daily. hundred percent of U.S. owned sows are housed levels are appropriate and lighting and bed- also requires that sows are housed in The pens are sloped for proper drain- in open pen systems. ding are in line with program requirements. In open pen systems during gestation.

268 269 Annual and Sustainability Report // 2019 • JBS

In the U.S., Pilgrims’ has been antibiotic free in poultry, we treat all sick animals with all Company hatcheries since 2016 and is fully antibiotics if necessary and then re- compliant with the FDA Guidance 209 and 213 move them from our antibiotic-free/ VFD rule. Any antibiotic use is under the strict NAE, natural and organic programs. We guidance of the Company’s licensed, USDA do not allow sick animals to suffer. accredited and board certified veterinarians and is strictly for disease prevention, control The commitment by JBS USA to reduc- or treatment. The Pilgrim’s antibiotic policy is ing antibiotic use in raising animals is reviewed annually. limited by the fact that it is still not possible to fully replace these medications In Europe, records of medications used on farms to treat and prevent diseases. JBS USA are inspected by the auditors of the Red Trac- veterinary and nutrition teams con- tor Scheme and by the local authority Animal tinue to work closely with companies Health inspectors as legally required. In addi- that produce alternative compounds, tion, Pilgrim’s Moy Park has an Antimicrobial as well as with universities and private Stewardship Forum focused on the education researchers, ensuring that the Company of poultry producers in antimicrobial resistance is on the leading edge of innovation in and best practices to reduce antimicrobial this area. usage and collects comprehensive data to give the poultry industry and regulators a clear pic- Veterinarians work to mitigate or elim- ture of poultry-usage trends. Pilgrim’s Moy Park inate pain for the animals. In the U.S. established a Food Safety Forum and Antibiotics the procedures performed on our hogs Stewardship Forum, to ensure that our chickens prevent injuries later in life and improve are healthy and our products are safe. These fo- meat quality and include tail docking Tulip Higher Welfare Hogs rums include external experts who assist us with and castration and are consistent with the latest scientific developments. our animal welfare program. At JBS Australia feedlots, we work diligent- Pilgrim’s Tulip has introduced an industry lead- ly to purchase cattle that have been Animal health ing initiative in our own higher welfare farming pre-conditioned, which means that cat- supply chains to reduce the need for antibiotic tle have been previously castrated and At JBS USA, all antibiotics are used under the supervision of licensed and accredited use by improving hog management and health. disbudded (if necessary) at a young age, doctors of veterinary medicine and only for the purposes of preventing, controlling We have voluntarily implemented stringent con- vaccinated and weaned before arriving or treating disease, rather than growth promotion or feed efficiency. The Company's trols on the use of Critically Important Antibi- at our feedlots. antibiotic policies also requires written veterinary permission before the use of any otics (CIA’s). Since implementing our antibiotic antibiotics, enhanced record-keeping and tracking of all antibiotic use and training stewardship strategy in 2013, we have reduced At Tulip, routine tail docking is not programs for JBS USA team members to guarantee compliance with our com- use by more than 70 percent. Antibiotic usage performed and is only permitted with prehensive health and disease-prevention programs, including animal husbandry, within our own higher welfare supply chain has veterinary approval and castration is hygiene, monitoring and vaccination. been consistently below the U.K. swine sector not permitted. Tulip continues to lead target for 2020. Tulip’s independent supply the industry in research to advance Pilgrim’s does not administer antibiotics for routine medical treatment and is focused partners, as part of the U.K. swine industry, have animal welfare, for example, our current on producing healthy chickens through good hygiene and husbandry practices. Any achieved the Responsible Use of Medicines in research includes a project examining use of antibiotics is strictly governed by national regulations and requires authoriza- Agriculture Alliance (RUMA) target for the re- hog behavior and its impact upon tail tion by the overseeing doctor of veterinary medicine or veterinary surgeon who care sponsible use of antibiotics since its start in 2017. biting. The objective is to understand for the poultry. Any medication used is licensed by the FDA or U.K. Veterinary Medi- more about causal factors associated cines Directorate and undergoes intense scrutiny before being approved for use. As part of our long-standing commitment with tail biting and how tail docking to safeguard the welfare of our livestock and can be reduced.

270 271 Annual and Sustainability Report // 2019 • JBS

minimal stress on cattle during unloading at our facilities is our priority. JBS USA Carriers takes pride in the safe and efficient transport of animals to production facilities across the country, and our drivers bring a passion for the industry to work with them every day.

JBS USA Carriers, in conjunc- tion with Five Rivers Cattle Feeding (JBS USA’s largest producer partner) and both of their animal welfare teams, provides drivers with animal-handling and safety training. The training materials are based on the BQAT program, which is widely recognized as the industry standard for truck driver training.

During transport at Pilgrim’s, we work to protect our chick- JBS USA Carriers Livestock Trailer ens from temperature ex- tremes and provide them with adequate ventilation. During cold weather, we add side and Transportation front panels to the transport cages to keep chickens warm. As a component of the animal welfare programs at each production facility, livestock In Europe, our pork and approved lamb production facilities During the summer months, transporters are audited daily to verify adherence to JBS USA humane handling stan- require that livestock are moved in their social groups, and hog we reduce the number of dards, and, depending on the country, the NAMI Transportation Guidelines, CFIA Humane trailers are equipped with lifting decks to make loading as stress chickens per cage, keep them Transport Guidelines, Australian Welfare Standards and Guidelines – Land Transport of free as possible. Trailers are bedded with straw and in the sum- shaded and provide fans and Livestock and RSPCA, Red Tractor or QMS. mer months extra drinking water is provided. We monitor trans- misters to keep them cool and port time, current average journey times are four hours and our minimize heat stress. We strive U.S. beef and pork production facilities also require all transporters to present docu- position is that no animal should be in transit to a Tulip produc- to minimize the amount of mentation that demonstrates their understanding of and adherence to the JBS USA tion facility for longer than eight hours. time chickens spend in cages, guidelines and in the U.S. certification with Beef Quality Assurance Transportation (BQAT) consistent with regionally ap- the Canadian Livestock Transport (CLT) and the National Pork Board’s Transport Quality JBS USA Carriers business is responsible for providing safe trans- propriate animal welfare prac- Assurance (TQA) programs. Improper handling of livestock results in immediate correc- portation to more than 1.5 million cattle each year. Delivering cat- tices. We also monitor handling tive actions and can result in the transporter being permanently banned from delivering tle in a manner that promotes humane handling during loading and transport animal welfare livestock to JBS USA facilities in the future. at the feedyard, a safe journey for both drivers and animals and metrics of our chickens.

272 273 Performance and perspectives

Financial Future result outlook

Business unit results

Achievements

274 Annual and Sustainability Report // 2019 • JBS

In yet another year of excellent results, JBS ended 2019 with revenues of R$ 204.5 billion, the highest figure on record for the Company. This performance shows the Financial result importance of engaging the entire Company and of management focusing on operational excellence, innovation and sustainability.

NET REVENUE GROSS PROFIT OPERATIONAL CASH FLOW FREE CASH FLOW

Net revenue at JBS was R$ 204.5 billion, Gross profit reached R$ 31.9 billion, growing In 2019, JBS operational activities Free cash flow was R$ 9.5 billion, 109.1% equivalent to US$ 51.7 billion, a record high. This by 21.3% compared to 2018. Gross margin generated R$ 17.1 billion in cash, 49.1% more than in 2018. amount is 12.6% higher than in 2018, which was rose from 14.5%, in 2018, to 15.6%. higher year-over-year. formerly the year with the highest net revenue. R$204.5Bi R$31.9Bi R$17.1Bi R$9.5Bi Up 12.6% year-over-year Up 49.1%, year-over-year Growth of 109.1% compared to 2018

NET INCOME ADJUSTED EBITDA NET DEBT AND LEVERAGE

In 2019, net income grew by 241 times over Adjusted EBITDA also hit a record high: R$ Net debt in Brazilian reais fell by R$ 47.2 billion to R$ 43.0 billion in 2019, lowering leverage 2018, reaching R$ 6.1 billion. Earnings per 19.9 billion. EBITDA margin rose from 8.2% in from 3.18x to 2.16x during the period. In US dollars, net debt dropped from US$ 12.2 billion to share for the year was at R$ 2.28. 2018 to 9.7%. US$ 10.7 billion - leverage went from 3.01x to 2.13x.

Net income for 2019 totaled R$19.9Bi R$6.1Bi Leverage in US$ at the end Earnings per share was of 4Q19 was R$2.28 2.13x Earnings per share (R$) Leverage in R$ at the end of 4Q19 was 2.16x

Net debt (R$) Net debt (US$) Leverage (R$) Leverage (US$)

276 277 Annual and Sustainability Report // 2019 • JBS Business unit results

Seara

In 2019, Seara had net customers through initiatives JBS USA Beef was enhance- revenues of R$ 20.4 billion, such as Top Grade Butch- ment of the product mix, as rising 15.2% compared to 2018. er and 1953 Friboi Gourmet a result of innovation in value The Company's EBITDA during Butchers, as well as with its added programs, such as As- the year was R$ 2.3 billion, mix of higher added-value pen Ridge Natural Beef, Grass with a margin of 11.1%. products, such as the launch Run Farms, Imperial Wagyu of the 1953 Friboi Hamburger and Adaptable brand products. There is a growing preference and Steak Maturatta products for Seara among Brazilian and the Friboi Beef Skewers In line with a strategy to consumers (99% Brand Knowl- range, aimed at offering more expand value-added product edge), based on the quality convenience to consumers, offerings, JBS USA recently of its products and its inno- delivering quality products in announced the acquisition vation. Throughout 2019, over a ready-to-make format. of the Empire Packing Com- 180 products were launched, pany, with case-ready pro- notably in the Seara Nature duction units in the United (products made with natural JBS USA Beef States, and the Ledbetter ingredients and no artificial brand. Within the diversifi- preservatives), Seara Rotis- JBS USA Beef had net cation strategy and to meet serie (offering convenience revenue of R$ 87.2 billion1 in new consumer trends, the and products with clean label 2019, which is 10.9% more Company recently launched ingredients), and Incredible than in 2018, and EBITDA of the OZO brand of plant-based Seara (providing a range of R$ 8.0 billion, 27% higher protein products, adding to 100% plant-based products), year-over-year, with a margin its portfolio of innovative and not to mention expansion of of 9.2%. These results include high-quality products. the Seara Gourmet range, with the impact of depreciation products focused on indul- in the average exchange rate In Australia, the highlight gent moments. (BRL vs USD) of 7.4%, which was performance of beef and went from R$ 3.65 in 2018 to lamb exports directly to China, R$ 3.95 in 2019. which were 80% higher in JBS Brasil 2019. Primo Foods, a leader in The industry fundamentals in the prepared foods market in In 2019, JBS Brasil had reve- North America remain solid, Australia and New Zealand, nues of R$ 32.0 billion, up by supported by an ample supply continued to drive consumer 15.9% year-over-year. EBITDA of cattle in the US market as behavior through innovations was at R$ 1.7 billion, represent- well as by favorable economic during the year, such as: the ing a 39.1% increase over 2018. conditions, which have sus- "Stackers" line of appetizers tained demand for beef in the and the "Balanced Blend" line JBS has invested in expand- domestic and export markets. of sausages, with a mix of ani- ing partnerships with key In addition, one highlight at mal and plant-based proteins. Headquarters in São Paulo (SP)

1 Considering the results in IFRS and Brazilian reais.

278 279 Annual and Sustainability Report // 2019 • JBS

JBS USA Pork Pilgrim’s Pride

JBS USA Pork had net revenue of R$ 23.5 Pilgrim's Pride saw net revenue of R$ 45.0³ bil- billion2 in 2019, 13% higher than in 2018, lion in 2019, up 12.9% compared to 2018, while and EBITDA of R$ 2.6 billion, with a mar- EBITDA was at R$ 5.3 billion, with a margin of gin of 11.1% compared to 9.6% in 2018, 11.8%. This result includes the impact of depre- considering the impact of a 7.4% depreciation in the average exchange rate (BRL vs ciation in the average exchange rate (BRL USD) of 7.4%, which went from R$ 3.65 in 2018 vs USD), which went from R$ 3.65 in 2018 to R$ 3.95 in 2019. to R$ 3.95 in 2019. In the United States, operational performance In 2019, pork export volume in the continued to move upward, driven by partner- United States grew by 10% in relation ships with key customers and by a focus on to 2018, highlighting the demand from operational excellence. Strong market de- China, which saw a substantial rise mand in the case-ready and small birds busi- in the second half of the year. Larger nesses continued to outpace supply. The com- export volumes, along with favorable modities sector continues to pose challenges, economic conditions in the domestic despite improvement in market conditions market, sustained growth in demand for compared to 2018. The prepared products pork products. operation in the USA continued to grow, as a result of investments made in recent years. JBS USA Pork remains focused on operational performance, with cost controls In Europe, results continue to be driven by at production units and an outstanding greater operational efficiency, investments capacity to convert primary products in automation, higher yields and mitigation into products with greater added-value, of the costs of inputs. Integration of recently contributing to better margins. Add- acquired operations in Europe is still moving ed to this context is the expansion of forward and has already generated a positive the case-ready business in the United EBITDA. Better results were driven by strong States, with the acquisition of the Em- pork exports and good domestic demand, in pire Packing Company. addition to implementing operational improvements and capturing synergies. Plumrose has continued to increase its presence in the prepared foods segment, In Mexico, more challenging conditions in the by scaling up and developing innova- macroeconomic scenario over the last quarter tive and branded products. In 2019, net of the year impacted consumer spending, af- revenue for the business was up by 10%. fecting demand in traditional markets. Despite In line with a strategic plan to increase the market environment, operations saw good production capacity, especially in bacon, operating performance in relation to the sec- Plumrose opened a new production line tor and were able to generate an even better in Ottumwa - Iowa in April 2020. The year-over-year result. business unit will also begin construction on a new production plant for ready- to-eat products in 2020, in the state of 2 Considering the results in IFRS and Brazilian reais. Missouri, in the United States. 3 Considering the results in IFRS and Brazilian reais.

280 281 Achievements Annual and Sustainability Report // 2019 • JBS Certifications

Various JBS production units Production practices: State Childhood and Youth hold additional certifications, Global GAP – an audit focused Coordination based on execu- In 2019, JBS was recognized in a variety of areas, as a which guarantees better on the agribusiness chain (par- tion of community programs. result of its commitment to the continued improvement quality processes and ent stock / hatcheries / broiler Smeta – Sedex Members Ethi- and sustainability of its operations. The awards also products, while also opening chicken farms). cal Trade Audit (SMETA). Certi- show the continual dialog the Company holds with its up access to new markets. Halal – certification of the food fies that companies are using stakeholders to contribute to their constant evolution. production chain (process- best practices in ethical audit- Animal welfare: ing of poultry and processed ing techniques. PAACO (Professional Animal foods), which certifies if the RA1000 (Reclame Aqui) – seal Auditor Certification Organi- production process complies granted to companies with Awards and recognition zation) – assesses compliance with religious precepts, as well excellent rates of service. with animal welfare standards as current laws. Certificate of Recognition Embanews Award 2019: APAS Acontece Award: for meat processing plants, Federally Inspected Type (TIF) – (COR) – certificate from the Seara won five prizes at the Friboi was chosen as the best following the NCC – National certification that sets the stan- Alberta Food Processing As- biggest packaging industry supplier in the meats segment Chicken Council Animal Wel- dards for best poultry produc- sociation, in Canada, which awards in Brazil, with its for the third year running. fare Guidelines, Feb. 2017 and tion practices in Mexico. assesses occupational health exclusive technologies: "Power International legislation. and safety. Vac" in the Seara Rotisserie Tito Muffato Award: Friboi National Feedlot Accredita- Food safety: range and the "Heats Evenly" won in the 'Butcher' category. tion Scheme (NFAS) – certifi- BRC (British Retail Environmental: tray in the Lasagnas range. cation granted by a commit- Consortium) – ensures Leather Working Group "The best-selling beef tee whose members include supplier compliance and (LWG) – certifies companies Whow! Innovation Award: in Brazil" seal: Friboi was representatives of the Austra- assures the capacity to with good environmental Seara was named the most given this title by the Nielsen lian industry, certifying that guarantee the quality and practices at tanneries around innovative company in consulting firm. product documentation and safety of the food products. the world. the 'Foods' category at the auditing practices comply Organic Chicken – assess- NBR 16296 – national standard second edition of the award, Nelore Circuit 2019: Friboi with the standards established ment through which a cer- of Brazilian Leather Certifica- which is organized by Grupo was recognized in two catego- by the association. tifying organization assures tion of Sustainability (CSCB). Padrão and the Padrão ries of the award, which is giv- Animal Welfare Certification that the product and process Intelligence Center. en out by the Brazilian Nelore System (AAWCS) – an inde- comply with organic pro- ISOs: Breeders Association (ACNB). pendently audited certification duction and animal welfare ISO 14001 – environmental qual- Revista Época Reclame that shows compliance with practices and standards. ity management standards. Aqui Award: Seara was a Top Supplier 2019: Friboi preexisting standards in best Global Food Safety Initiative ISO 9001:2015 – general quality finalist in the award given came in first place in the animal welfare practices for the (GFSI) – certifies that the com- management standards. for excellence in consumer packaged beef cuts category, cattle processing industry.. pany meets the food safety IATF 16949:2016 – services, placing 3rd in the in the award given out by SA ACP (Assured Chicken Produc- standards established by the standards related to auto 'Perishable Food - frozen Varejo Magazine. tion) - certified by Red Tractor, organization, which joins the industry requirements. and dairy products category.' the UK's largest platform for as- biggest global actors related OHSAS 18001 – Occupational Friboi was also highlighted Prezunic: Named by the sessing good practices in farms to this area. Health ans Safety Assess- during the award and was supermarket chain as the best and food companies. Red Tractor – the biggest initia- ments Series. nominated for a second year.. supplier in the beef segment. Free-range Chicken – assess- tive standardizing food norms ISO 50001 – it certifies that the ment done of the production in the United Kingdom. company adopts the best ener- Datafolha: Friboi has now Comer&Beber 2019/2020: chain (farm, hatchery, feed gy efficiency practices. been named the best beef Swift placed first in the plant and meatpacking plant) Social responsibility: ISO 17025 – requirements for four times straight, garnering ranking, compiled by Veja São by a certification agency in Empresa Cidadã – a certificate standardization of testing and 34% of survey respondents. Paulo magazine.. relation to ISO 16389:2015. granted by the Santa Catarina calibration laboratories.

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Future outlook JBS Couros production unit in Itumbiara (GO)

At the heart of the Company's purpose and business strategy is the fact that humanity faces the challenge of guaranteeing quality food for the over 7.7 billion people living on the planet - which should reach 10 billion in 2050, according to projections from the United Nations4. Reinforcing this scenario, animal protein consumption is expected to increase by 70%, along with a rise in global population5, wealth and urbanization, as well as changes in dietary trends to protein foods, which were previously absent from most people's diets.

Even in this scenario of radical changes To maintain a continual trajectory of caused by the COVID-19 pandemic, growth, without putting the differen- this challenge remains. Because of tials at risk that made the Company a this, in addition to the measures we market leader, JBS invests in strength- take to protect jobs and the health ening its values and beliefs as well as of team members and communities, its people, who are the main vehicles we continue to build a global model, of this vision of business and who work supported by a fast relationship with knowing what it means to be a group the value chain and by the diversity of and having a common purpose. our geography and portfolio, focusing on value-added products. This global Investments in training, safety and close model makes it possible to capture communication are some of the strate- carbon emissions and generation of To deal with this movement of important synergies and improve gies to strengthen and share the JBS Cul- waste. After all, the very existence of the expansion, JBS invests in agile operating performance. While portfolio ture. The same logic extends to produc- Company and its businesses are inti- and qualified governance, diversification allows for growth and ers and suppliers, who are more than just mately connected to nature and to the simplifying decision-making improved margins, in addition to a part of the value chain, they are funda- ecosystem services nature provides. while at the same time grow- benefits from integrating the various mental to implementing the Company's ing stronger in principles such chains that make up the Company's business model and to guaranteeing the The main path to attaining this goal is as compliance, innovation and product mix. The Company's growth sustainability of its operations. through a process of ongoing improve- product quality. strategy moreover includes seeking out ment, where priorities are the aspects value-added services and products, When it comes to the environment, the the Company is able to control and All of this shows that JBS and based on financial discipline and the Company works to reduce its footprint, enhance in its operations. In the value its over 240,000 team mem- sustainability of operations. especially in relation to water use, chain, JBS holds a leading position where bers are taking the mission of it can contribute to improvements across feeding the world very serious- 4 https://nacoesunidas.org/populacao-mundial-deve-chegar-a-97-bilhoes-de-pessoas-em-2050-diz-relatorio-da-onu/ the industry through innovations and ly and will continue to work SOURCE: World Resources Institute projects that shift the current model. and invest to achieve this goal.

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GRI PAGE/ ITEM REPORTED RELATED SDG GRI Content Index STANDARDS RESPONSE GRI 102: Stakeholder Engagement GRI 102-55 GENERAL DISCLOSURES 2016 102-40 List of stakeholder groups 78

102-41 Collective bargaining agreements 42 8

For the Materiality Disclosures Service, GRI Services 102-42 Identifying and selecting stakeholders 78 reviewed that the GRI content index is clearly presented and the references for Disclosures 102-40 to 102-49 align 102-43 Approach to stakeholder engagement 78 with appropriate sections in the body of the report. 102-44 Key topics and concerns raised 78

Reporting Practice

GRI PAGE/ Entities included in the consolidated 6 ITEM REPORTED RELATED SDG 102-45 financial statements STANDARDS RESPONSE 102-46 Defining report content and topic Boundaries 6 GRI 101: GRI 101: Foundation 2016 Throughout the FOUNDATION report 102-47 List of material topics 78 2016 102-48 Restatements of information 100 to 104, 106 GRI 102: 102-1 Name of the organization 16 GENERAL 102-49 Changes in reporting Not available DISCLOSURES Activities, brands, products, and services 114 2016 102-2 102-50 Reporting period 6 102-3 Location of the headquarters 16 102-51 Date of most recent report 2018 102-4 Location of operations 20 102-52 Reporting cycle Annual 102-5 Ownership and legal form 22 102-53 Contact point for questions regarding the report 6 102-6 Markets served 20 Claims of reporting in accordance with the 102-7 Scale of the organization 20 102-54 GRI Standards 6

102-8 Information on employees and other workers 42 102-55 GRI content index 286

102-9 Supply chain 88 102-56 External assurance Not available

Significant changes to the organization and its INDIRECT ECONOMIC IMPACTS 102-10 supply chain 16, 22 GRI 103: 103-1 Explanation of the material topic and its Boundary 77, 95 102-11 Precautionary principle or approach 34 12 MANAGEMENT APPROACH 2016 103-2 The management approach and its components 77, 95 1, 8 102-12 External initiatives 41, 72 103-3 Evaluation of the management approach 77 102-13 Membership of associations 41, 72 GRI 203: Strategy INDIRECT ECONOMIC 203-2 Significant indirect economic impacts 95, 159, 250 1, 2, 3, 8, 10 102-14 Statement from senior decision-maker 8 IMPACTS 2016

Ethics and Integrity ENERGY

102-16 Values, principles, standards, and norms of behavior 18 GRI 103: 103-1 Explanation of the material topic and its Boundary 77, 98, 103 MANAGEMENT APPROACH 2016 Governance 103-2 The management approach and its components 77, 98, 103 7, 13

102-18 Governance structure 22 103-3 Evaluation of the management approach 77

286 287 Annual and Sustainability Report // 2019 • JBS GRI PAGE/ ITEM REPORTED RELATED SDG STANDARDS RESPONSE

GRI 302: GRI PAGE/ ENERGY 2016 302-1 Energy consumption within the organization 103 7, 8, 12, 13 ITEM REPORTED RELATED SDG STANDARDS RESPONSE 302-3 Energy intensity 176 7, 8, 12, 13 SUPPLIER SOCIAL ASSESSMENT 302-4 Reduction of energy consumption 176 7, 8, 12, 13 GRI 103: 103-1 Explanation of the material topic and its Boundary 77, 88 WATER MANAGEMENT APPROACH 2016 103-2 The management approach and its components 77, 88 GRI 103: 103-1 Explanation of the material topic and its Boundary 77, 98, 100 MANAGEMENT APPROACH 2016 103-3 Evaluation of the management approach 77 103-2 The management approach and its components 77, 98, 100 GRI 414: 103-3 Evaluation of the management approach 77 SUPPLIER SOCIAL Negative social impacts in the supply chain and ASSESSMENT 414-2 actions taken 88, 152 8 2016 GRI 303: 303-1 Water withdrawn by source 100 WATER 2016 303-3 Recycled and reused water 100, 170 6, 8, 12 CUSTOMER HEALTH AND SAFETY

EMISSIONS GRI 103: 103-1 Explanation of the material topic and its boundary 64, 77 MANAGEMENT APPROACH 2016 GRI 103: 103-1 Explanation of the material topic and its Boundary 77, 98, 102 103-2 The management approach and its components 64, 77 MANAGEMENT APPROACH 2016 103-2 The management approach and its components 77, 98, 102 103-3 Evaluation of the management approach 77

103-3 Evaluation of the management approach 77 GRI 416: CUSTOMER Assessment of the health and safety impacts of HEALTH AND 416-1 product and service categories 64 3, 12 GRI 305: 305-1 Direct (Scope 1) GHG emissions 102 3, 12, 13, 15 SAFETY 2016 EMISSIONS 2016 305-2 Energy indirect (Scope 2) GHG emissions 102 3, 12, 13, 15 MARKETING AND LABELING 305-3 Other indirect (Scope 3) GHG emissions 102 3, 12, 13, 15 GRI 103: 103-1 Explanation of the material topic and its Boundary 64, 77 MANAGEMENT 305-4 GHG emissions intensity 175, 260 13, 15 APPROACH 2016 103-2 The management approach and its components 64, 77 305-5 Reduction of GHG emissions 175 13, 15 103-3 Evaluation of the management approach 77 EFFLUENTS AND WASTE GRI 417: Requirements for product and service information MARKETING AND 417-1 64 3, 12 GRI 103: 103-1 Explanation of the material topic and its Boundary 77, 98, 101, 104 LABELING 2016 and labeling MANAGEMENT APPROACH 2016 103-2 The management approach and its components 77, 98, 101, 104 FOOD PROCESSING SECTOR DISCLOSURES - ANIMAL WELFARE 103-3 Evaluation of the management approach 77 GRI 103: 103-1 Explanation of the material topic and its Boundary 77, 106 MANAGEMENT GRI 306: 306-1 Water discharge by quality and destination 101, 105 3, 6, 12 APPROACH 2016 EFFLUENTS AND 103-2 The management approach and its components 77, 106 WASTE 2016 306-2 Waste by type and disposal method 105 3, 12 103-3 Evaluation of the management approach 77, 106 OCCUPATIONAL HEALTH AND SAFETY Policies and practices, by species and breed type, related to physical alterations and the use 106 12, 15 GRI 103: 103-1 Explanation of the material topic and its Boundary 77, 96 FP10 MANAGEMENT of anaesthetic APPROACH 2016 103-2 The management approach and its components 77, 96 Percentage and total of animals raised and/ or FP11 106 12, 15 103-3 Evaluation of the management approach 77 processed, by species and breed type, per housing type

GRI 403: Types of injuries, rates of injury, occupational Policies and practices on antibiotic, anti- OCCUPATIONAL inflammatory, hormone, and/or growth promotion 106 2, 12 e 15 403-2 diseases, lost workdays, absenteeism, and number 96 3,8 FP12 HEALTH AND of work-related fatalities treatments, by species and breed type SAFETY 2016

288 289 Annual and Sustainability Report // 2019 • JBS

Credits

Coordination

JBS Sustainability, Investor Relations and Corporate Communication areas Text and consultancy

Approach Comunicação

Design

Approach Comunicação

Photos

JBS Brasil and JBS USA image bank

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