background image
a n n ua l
r e p o rt
n at u r a
2009
background image
2
natura
annual
report
OUR ESSENCE
HOW WE GOT HERE
4
OUR mOmENT
WHAT WE AIm FOR
WHO WE WORK WITH
WHAT FOOTPRINT WE LEAVE
FINANCIAL STATEmENTS
97
DNV REPORT
134
ABOUT THE REPORT
136
GLOBAL COmPACT PRINCIPLES
137
GRI INDEX
138
EDITORIAL TEAm
142
3 Reason for being
3 Vision
3 Beliefs
5 message From the Chairmen
6 message From the Executive Committee
7 Profile
8 Awards and Recognitions
13 Natura Value Chain
14 Governance
19 Prospects
20 Collective construction
22 High-priority sustainability topics
25 Development of our commitments
28 Natura management System
29 Innovation
32 Quality of relationships
37 Employees
49 Consultants and NCAs
54 Consumers
58 Suppliers
60 Supplier communities
64 Surrounding communities
67 Shareholders
69 Government
74 Creation of social value
81 Creation of environmental value
94 Creation of economic value
Table of Contents
background image
3
natura
annual
report
VISION
Because of its corporate behavior, the
quality of the relationships it establishes,
and the quality of its products and
services, Natura will be an international
brand, identified with the community
of people who are committed to
building a better world, based on better
relationships among themselves, with
others, with nature of which they are
part, with the whole. .
Our Reason for Being is to create
and sell products and services
that promote well-being/being well.
Well-being
is the harmonious, pleasant relationship
of a person with oneself,
with one's body.
Being well
is the empathetic, successful,
and gratifying relationship of a person
with others, with nature
and with the whole.
REASON FOR BEING
BELIEFS
Life is a chain of relationships. Nothing in the
universe exists alone.
Everything is interdependent.
We believe that valuing relationships is the
foundation of an enormous human revolution
in the search for peace, solidarity, and life in all
of its manifestations.
Continuously striving for improvement
develops individuals, organizations, and society.
Commitment to the truth is the route to
perfecting the quality of relationships. The
greater the diversity, the greater the wealth and
vitality of the whole system.
The search for beauty, which is the genuine
aspiration of every human being, must be free
of preconceived ideas and manipulation.
The company, a living organism, is a dynamic
set of relationships. Its value and longevity
are connected to its ability to contribute to
the evolution of society and its sustainable
development.
OUR
ESSENCE
background image
4
natura
annual
report
1969 Luis Seabra founds Natura in São Paulo. The company has
included plant ingredients in the composition of its pro-
ducts from the very beginning.
1970 The first Natura store opens on Oscar Freire street, in
the city of São Paulo; Seabra himself works behind the
counter.
1973 Natura's plant is inaugurated in São Paulo. At the time,
seven employees produced approximately 600 units per
month of hair, face, and body treatment products.
1974 Natura decides to invest in customized consulting and
starts to operate using the direct selling system.
1979 Natura enters the men's cosmetics market with the launch
of the Sr. N line.
The Natura System is established with the participation of
many companies.
1981 Natura pioneers in the creation of a toll-free customer
service.
1982 Natura starts operations in Chile, the first initiative of the
company abroad.
1984 In a pioneer initiative, the refill product alternative was
launched.
The Erva Doce line is born, one of Natura's major
successes.
1986 The Chronos line, an anti-aging facial cream, that brings
together the major technological evolutions in cosme-
tics, arrives on the market.
1988 Natura begins to sell its products in Bolivia.
1989 In the 1980s, Natura grows 35-fold, and merges with four
companies of the Natura System and emerges as the lar-
gest Brazilian cosmetics company.
1990 Natura publishes its Reason for Being (commitment with
well-being/being well) and its Beliefs: the importance of re-
lationships, commitment to truth, ongoing improvement,
stimulation to diversity and appreciation of beauty without
stereotypes, and the company as a promoter of social de-
velopment.
1992 The Natura Escola (Natura School) Project is created: the
company's first social project, developed in association
with the matilde maria Cremm State School in Itapecerica
da Serra, state of São Paulo.
Natura arrives in Argentina and Peru.
1993 Launch of the Mamãe & Bebê line, which helps strengthen the
bond between parents and children.
1995 The Crer Para Ver (Believing is Seeing) Program is created
to help improve public education in Brazil.
1996 The first campaign using the Truly Beautiful Woman con-
cept is created for the Chronos line, expressing the idea that
a woman's beauty does not depend on her age.
1998 By means of environmental impact analyses of all of its
processes, Natura begins to systematically monitor and
manage the environmental impacts of its activities.
Natura's Board of Directors is created.
2000 Launch of the Natura Ekos line, which sustainably uses in-
gredients from Brazilian biodiversity.
Natura begins the Program for the Certification of Ingre-
dients.
2001 The Natura Plant in Cajamar (state of São Paulo) is inau-
gurated. It encompasses factories, warehouses, logistics, and
administrative activities in a building that complies with the
most advanced environmental requirements.
2003 The Natura Tododia line is created to turn the routine of
body care into a special ritual.
2004 Natura goes public on the São Paulo Stock Exchange
(Bovespa).
The company obtains the NBR ISO14001 environmental
certification.
2005 The Natura House in Paris, France, is inaugurated.
Operations start in mexico.
Natura obtains the NBR ISO9001 certification from the
Brazilian Association of Technical Standards.
The company begins to produce soaps using ingredients
from plants.
The Moviment Natura (Natura movement) is launched.
2006 The first Natura House in Brazil is opened, in Campinas,
state of São Paulo.
Animal testing ends in all of the company's research
practices.
The first agreement for the sharing of benefits from access
to traditional knowledge is signed.
2007 The Carbon Neutral Program is launched. Natura undertakes
to reduce its greenhouse gas emissions by 33% within five
years and fully offset the emissions that cannot be avoided.
The first Natura plant outside São Paulo is opened with
the inauguration of the Benevides Industrial Plant in the
state of Pará.
Natura starts operations in Colombia.
All Natura's products start to present an environmental table.
2008 Natura begins to implement the Natura management
System, a model of organization based on management by
process, catering to Business Units and Regional Units.
In order to streamline the relationship with our consultants
(sales representatives), Natura expanded the Natura Con-
sultant Adviser (NCA) model in Brazil.
2009 After 40 years in business, Natura reaches the historical
milestone of 1 million consultants.
Natura Conecta (Natura Connects) is launched: a virtual
community that brings our stakeholders closer to Natura.
HOW WE
GOT HERE
background image
5
natura
annual
report
Joys and hopes amidst the precarious balance of the world.
That was how we lived 2009. The impressive results Na-
tura produced renewed our energies and encouraged us
in facing the known but complex challenges posed to the
global society.
In a year characterized by the global economic crisis and the frustrating impasse in negotiating
an agreement on global climate change, we celebrated our 40 years of existence with some
important achievements, and the enthusiasm of more than 1 million consultants helped drive
our market share and increased the number of customers served. We fulfilled the commit-
ments assumed two years ago by remodeling Natura's management and starting a new growth
cycle. As a result, we created more value for shareholders and for the long chain of people and
institutions connected to our business model. We had important, positive social impacts and,
among other environmental advances, we continued to reduce our relative carbon emissions.
Our strategy enjoyed the trust of shareholders and investors, a fact demonstrated in the se-
condary offering of shares, which increased Natura's liquidity and its value.
We look at the future of our business over the next 10 years with confidence. The third largest
cosmetic market in the world, Brazil signals that it is entering a virtuous cycle of prosperity.
Our strong identification with its soul and development cheers us; we will continue with our
efforts to build a beautiful business and a fairer society that is more ethically committed to
future generations.
We also believe that if we improve our ability for dialogue with the cultural diversity that makes
up Latin America, which is so receptive to our products, values, and business opportunities, we
will be able to maintain high growth rates, in addition to contributing to the creation of socio-
environmental value. In more geographically and culturally distant regions, we will continue to
carefully evaluate new opportunities.
Our civilization is experiencing a crisis that requires major transformations. The challenges
related to climate, energy, water, food, health, security, and conservation of biodiversity and
cultural diversity cannot be avoided. We want Brazil to be one of the leading countries in the
development of an agenda of macro-changes, fully committed to the need for urgent progress
in climate negotiations at the end of 2010 in mexico.
We are convinced that we have an important role to play: the Natura brand, more so than our
business, is helping to build this new era, offering us the opportunity to innovate, to constantly
reinvent our work. Thus we will fulfill our vocation to strive to create economic, social, and
environmental value.
The respect and value of our brand are based on the quality of the relationships we have
with each and every one of our stakeholders. We recognize the need, and we reaffirm here
our commitment, to invest in the excellence of our services, in particular for our consultants.
Our Reason for Being, to promote Well-Being Well, whose essence is serving with excellence,
listening to yourself, others, and the world, is and will always be our great inspiration in our
persistent search for better and stronger relationships with our many stakeholders: the most
legitimate means of increasing the recognition of our brand.
This is how it has been since 1969, when a white rose delivered to each of our first customers
symbolized our pleasure to serve and our desire to contribute to the search for peace.
40 YEARS
SOWING
OPPORTUNITIES
mESSAGE FROm THE CHAIRmEN
OUR
mOmENT
Pedro Luiz Barreiros Passos
Guilherme Peirão Leal
Antonio Luiz da Cunha Seabra
Co-Chairmen of the Board
of Directors
background image
6
natura
annual
report
We have many reasons to celebrate 2009. The initiati-
ves of the past two years continue to bring the expec-
ted results in the short term, and they build the basis
of our company's future development.
We reached the historical milestone of 1 million consultants. The strength of our operations
brought impressive progress in all the main economic, social, and environmental indicators.
Net revenues totaled R$ 4.2 billion, 18.6% higher than in 2008; EBITDA totaled R$ 1.0
billion, and our EBITDA margin was 23.8%. Net income totaled R$ 684 million, 32.1% higher
than in the previous year. We also increased the distribution of wealth to our stakehol-
ders and were more efficient in our environmental management, reducing by 5.2% relative
greenhouse gas emissions and offsetting the emissions of our chain by supporting socio-
environmental projects.
This performance is the result of an intense maturing process, reflected in a new company
management model based on three fundamental pillars - management by process, training
of leaders, and strengthening of our organizational culture ­ all indispensable requirements if
we are to perpetrate our corporate behavior in a constantly changing business environment.
In Brazil, we established an executive group and introduced the Business Units and the Re-
gional Units. With this we brought Natura closer to the local needs of consultants and end
users by localizing marketing and driving performance. As a result, in 2009 our net revenues
grew 18.6%, and we gained market share in the domestic market.
We are taking this management model to all areas of the company. Our international ope-
rations continue to grow and are establishing themselves in markets with great potential. In
2009, net revenues in local currency increased by 42.1%; we had around 160,000 consul-
tants and more than 1,000 employees in our operations in Argentina, Chile, Peru, Colombia,
mexico, and France. This is a scale that allows us to seek leadership positions and accelerate
our expansion strategy.
In Latin America, we want to be an important player who is committed to regional sus-
tainable development. To this end, we will adapt marketing, portfolio, logistics, and various
channels, such as sales communication, to meet the needs of each country.
We continued to invest in improving the quality of relationships with many of our stakehol-
ders in 2009, making progress on the sensitive issues of these relationships. As a result, we
improved the organizational climate in our operations with an increase from 72% to 74%
in favorable responses. In the case of suppliers, the increase was even higher: from 74% to
82%. We maintained the climate among our consultants at the same high rate of 90% of
favorable responses.
We have to recognize, however, that the provision of services to our consultants is not
yet of the high quality we seek in all our relations. This is a priority issue for Natura, as the
excellence in services is an intrinsic part of our value proposal. We have already adopted
short, medium, and long-term measures to give our company the competitive edge in servi-
ce provision. These measures did not result in significant improvements in 2009, but we are
confident that there will be perceptible improvements in 2010.
In the sphere of relationships with our customers, we increased our penetration even fur-
ther, reaching 3.5 million new homes, which were added to the more than 20 million homes
where the Natura brand is already present. We would like to thank our customers for their
trust, and we renew our commitment to offer high quality products that are innovative and
fairly priced.
Despite the better results for these indicators, the improvement in the quality of rela-
tionships should always be high on our agenda. This requires a collective effort to approach
and engage in continuous dialogue with all stakeholders.
We are aware of and enthusiastic about the fact that there is still a lot to improve in Natura's
management model, which should allow for the development of people, the strengthening
of our culture and the continuing search for innovation. We believe that Natura is the result
mATURITY
BRINGS RESULTS
mESSAGE FROm THE
EXECUTIVE COmmITTEE
background image
7
natura
annual
report
of the unified efforts of many people who play different roles, but who have a common ob-
jective. We want to highlight the contribution of the Natura Consultant Advisers, who took
over a new and important role in the relationship between Natura consultants and our sales
team, and we want to thank, in particular, our employees for their support and hard work
in participating in the company's management transformation project. This engagement will
allow us to respond to future challenges and to our own desire to actively participate in
this scenario of changes, always driven by the Beliefs that brought us here and that guide us
toward the future.
Alessandro Carlucci
CEO
João Paulo Ferreira
Senior Vice President of Supply Chain
José Vicente Marino
Senior Vice President of Sales and marketing
Marcelo Cardoso
Senior Vice President of Organizational
Development and Sustainability
Maurício Bellora
Senior Vice President of International Operations
Roberto Pedote
Senior Vice President of Finances, and Legal Affairs,
Telma Sinicio
Senior Vice President of Innovation
PROFILE
Over 40 years, we have built a cosmetics, fragrances, and personal hygiene company that is re-
cognized by a different value proposal: from a direct selling model, which generates income and
creates opportunities for more than 1 million consultants, our sales representatives, we deliver
to our customers products that promote well-being well, awaken the senses and awareness, and
establish new connections between individuals and their own selves, with others and with the
world. To this end, we try to keep our corporate behavior focused on the creation of sustainable
value, by developing quality relationships with society, and we have a commitment to the balance
among the economic, social, and environmental impacts of our businesses.
Our head office is in Cajamar, state of São Paulo, and we have commercial offices in five re-
gions of Brazil and in the following countries: France, Argentina, Chile, Colombia, Peru, and me-
xico. We have local distributors in Bolivia, Guatemala, Honduras, and El Salvador. In December
2009, direct employees in all of our operations totaled 6,260 professionals.
We have plants in Cajamar, state of São Paulo, and Benevides, state of Pará, where since 2006
we have been developing oils obtained from native trees and noodles (plant mass for soaps).
Our distribution centers are in Itapecerica da Serra (São Paulo), matias Barbosa (minas Ge-
rais), Jaboatão dos Guararapes (Pernambuco), Canoas (Rio Grande do Sul), and Simões Filho
(Bahia), the latter inaugurated in 2009. We have research and technology centers in our plants
in Cajamar and Benevides. Since 2006, the Advanced Technology Center in Paris, France, has
been bringing us closer to one of the most innovative and demanding cosmetics markets in the
world. To encourage the trial of our products and promote the training of our consultants, we
have six Natura Houses in Brazil, five of which were inaugurated in 2009, and another 10 are
distributed throughout our international operations: three in mexico, one in Argentina, three
in Colombia, two in Chile, and one in Peru.
We have been a listed company since 2004, with around 40% of our shares available on the
New market of the São Paulo Stock Exchange (Bm&FBovespa). Due to our commitment to
sustainability, in 2009 we appeared for the fourth consecutive year on the Corporate Sustai-
nable Index (ISE) of Bovespa (learn more on page 54)
background image
8
natura
annual
report
Economic
· Natura's net revenues totaled R$ 4.2 billion, a growth of 18.6% in relation to
2008, increasing in both foreign operations and in Brazil.
· Natura's market share in Brazil grew from 21.4% in 2008 to 22.5% in 2009,
according to the Brazilian Association of Cosmetic, Toiletry and Fragrance
Industry (Sipatesp/Abihpec).
· EBITDA amounted to R$ 1.0 billion, and the EBITDA margin was 23.8% in
2009, exceeding our forecast for a minimum rate of 23% for 2008, 2009,
and 2010.
· Net income totaled R$ 683.9 million, a growth of 32.1% from 2008.
· Foreign operations increased 42.8% in weighted local currency, and our
activities in Argentina, Chile, and Peru reached a proforma EBITDA of
R$ 8.9 million.
· We paid dividends amounting to R$ 552 million in 2009 on a cash basis, 30%
higher than in 2008.
· At the end of 2009, our cash balance amounted to R$ 500 million and our
net indebtedness corresponded to 0.2 times EBITDA for the year.
· The level of our services to our consultants was below our expectations. We
did not evolve as much as we wanted in the quality of the delivery of our
products, either with respect to timeframes or availability.
Social
· We exceeded the milestone of 1 million consultants, increasing their number
by 20.5% in Brazil and 33% in foreign operations.
· We launched the Trilhas (Trails) Project, within the Crer Para Ver (Believing
is Seeing) Program, in 210 Brazilian municipalities, reaching approximately
200,000 students from public schools (learn more on page 61).
· We implemented the Crer Para Ver (Believing is Seeing) Program ­ our
contribution to improving the quality of public education ­ in all Latin
American operations.
· We had 9.9% more employees in all operations. In Brazil, the turnover rate
fell to 7.5% in 2009 from 12.4% in 2008.
· We increased favorable responses with respect to organizational climate
among employees (to 74% from 72%) and suppliers (to 82% from 74%).
Environmental
· In 2009, we reduced our volume of relative greenhouse gas (GHG) emissions
by 5.2% by means of the Carbon Neutral Program.
· We recorded our highest rate in the use of renewable raw materials in our
product formulas: 79.2%, in comparison with 77.5% in 2008.
· We reduced the consumption of energy per unit billed by 19% but increased
the consumption of water per unit billed by 8.7%.
· We launched the Ekos Safra Açaí (Açaí Berry Harvest) line, which disseminates
awareness of cycles of nature.
· The share of product refills in billed items in Brazil was 18.4%, below the
target of 19%.
mAIN HIGHLIGHTS OF THE YEAR
background image
9
natura
annual
report
Best Governmental Relations case study on the topic
Professionalism and Transparency in Relationships.
Natura was named the Industry's Highlight in the "Retail and
Wholesale" segment.
Natura came 1
st
in all categories: General Ranking of the 10 Best
Companies Listed at Bovespa, Sustainability Category and New
markets Index.
Natura ranked 1
st
in the "Best Companies for Shareholders 2009"
award in the category of companies with a market value between
R$ 5 and R$ 15 billion.
Natura was named the best company in the Consumer Goods category;
Natura was voted the Company of the Year in the Biggest and Best
Ranking.
Winner in the Best Socio-Environmental Sustainability Category.
Best company in the Pharmaceutical, Hygiene and Cleaning industry
Best Company in the Hygiene and Cosmetics Industry
Natura was voted the Best Company of the Year in the
Perfumery Category.
Intangibles Award: We obtained the award in Sustainability Assets
and in the Non-durable Consumer Goods.
Aberje (Brazilian
Association
of Corporate
Communication)
Abrasca (Brazilian
Association of
Listed Companies)
Agência Estado
media group
Capital Aberto
magazine in
partnership with
Stern Stewart
Exame magazine
IBRE ­ Brazilian
Institute of
Economics and FGV
­ Getúlio Vargas
Foundation
IstoÉ magazine
Valor Econômico
newspaper
Getúlio Vargas
Foundation and
Conjuntura
Econômica
magazine
The Brander and
modern Consumer
magazine
ABERJE
Communication
Award
ABRASCA Award
Agência Estado
Distinguished
CompaniesAgência
Capital Aberto
Ranking
Biggest and Best
IR Magazine
Awards
Best of Dinheiro
Valor 1000
Conjuntura
Econômica
Magazine: XVIII
FGV Corporate
Excellence Award
Brazil's Intangibles
Awards (PIB)
COmUNICATION
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
FINANCES
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
AWARDS AND RECOGNITIONS RECEIVED
BY NATURA IN 2009
most Admired Company in Brazil
most Admired Companies in the Hygiene, Cosmetics and
Perfumery Industry.
most Admired Companies in Key Factors: Commitment to HR,
Respect for Consumers, Ethics, The most Committed to Sustainable
Development and Social Responsibility.
Carta Capital
magazine

most Admired ­
Carta Capital
INSTITUTIONAL
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
background image
10
natura
annual
report
The most Prestigious Cosmetics Brand in Brazil.
Natura is among the ten most innovative Brazilian companies.
The "Intellectual Property and Innovation study: An Analysis of the
main Brazilian Companies and Universities" was conducted by the
Prospectiva consulting firm, which is specialized in international
affairs and public policies.
We were recognized as the most remembered brand by
consumers on the Internet in the Beauty Products category.
Natura won in the "marketing 10" and "Excellence in Service
Provision" Category.
Natura won in the Villegaignon category (large company), for its
distinguished involvement in Brazil-France commercial relationships.
The IT Executive Officer, marcos Pelaez won as the executive
of the year in the Consumer Goods category.
Natura ranked 5th among the most Valuable Brands.
We won in the Large Company category.
Natura was awarded in two categories: Perfume and Company
Concerned with the Environment (ahead of Petrobras).
Época Negócios
magazine
Prospectiva
Negócios
Internacionais e
Políticas Públicas
UOL media
website
Editora Brasil
Notícias e
Comunicação
Empresarial LTDA.
France Brazil
Chamber of
Commerce
Info Exame
magazine
IstoÉ Dinheiro
magazine
Finep (Financial
Sponsor of Studies
and Projects)
Amanhã magazine
among
the 10
companies
that
innovate the
most
Época Negócios
100 most
Prestigious
Companies in Brazil
Intellectual Property
and Innovation
Award
Top of mind
Internet Award
Brazil Entrepreneur
Award 2009
III France-Brazil
Foreign Trade
Award
INFO
CORPORATE The
CIOs of the Year
The most Valuable
Brands in Brazil
FINEP Award
We won in the "Evolution in Corporate Governance" category.
Instituto Brasileiro
de Governança
Corporativa
(Brazilian Institute
of Corporate
Governance)
IBGC Corporate
Governance Award
Amanhã magazine
Top of mind Porto
Alegre
INTERNET
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
The Co-Chairman of the Board of Directors Guilherme Leal was
recognized as one of the leaders in the Cosmetics, Hygiene and
Cleaning Industry.
Recognized as the most remembered and preferred brand in the state
of Rio Grande do Sul in the Personal Hygiene and Beauty industry.
Líderes magazine
Jornal do Comércio
newspaper Porto
Alegre
Forum of Corporate
Leaders 2009
Brands for
Decision makers
INSTITUTIONAL
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
BRAND
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
background image
11
natura
annual
report
Named the most socially responsible company and Best Brand
in the "skin creams" category. Additionally, the CEO, Alessandro
Carlucci was named the "most reliable executive among Brazilians".
Natura ranked 10th among the 12,800 Brazilians interviewed
and their most admired brands.
Natura and Taterka agency won with the 2009 Natura Ekos ­
Triphasic Oils campaign.
Natura won the award in the Hygiene and Beauty category.
Natura and Taterka agency won with the 2009 Natura Ekos ­
Triphasic Oils campaign.
Natura was named by marketing magazine as the marketing
Company of the Year 2009 in the Cosmetics segment.
Seleções magazine
in partnership with
market research
company Ibope
IstoÉ Dinheiro and
BrandZ millward
Brown
ESPm Social
DCI - Diário do
Comércio e
Indústria newspaper
mercado Comum
magazine
marketing magazine
10º
Reliable Brands
The Strongest
Brands
Renato Castelo
Branco Homage
DCI - Diário
do Comércio e
Indústria Award
Top of mind 2008
minas Gerais
marketing
Company of the
Year 2009
Awarded in the ranking of the 10 most favorite companies
of Brazilian youngsters.
marcelo Cardoso was named the professional of the year 2009
in the Hygiene and Cleaning Industry.
Natura is the best company in Latin America (1
st
), Natura is the
11th among the best companies in the world in Leadership ­
global ranking.
DmRH Group and
Cia de Talentos
Editora Abril
publishing company
Hewitt Associates
and Época
Negócios
Company of
the Dreams of
Youngsters
HR Professional of
the Year Award
Top Companies for
Leaders
Homage to Claudia Falcão, Human Resources Director, as one
of the 10 most prestigious HRs in Brazil.
Gestão e RH
publishing company
among the
ten best
50 most Admired
HRs in Brazil 2008
HUmAN RESOURCES
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
Among the 20 most distinguished companies in Brazil.
We won in the Sustainable Business model module with
the case study "Engagement of Stakeholders in Biodiversity".
Exame magazine
Eco Amcham
among the
twenty
best
Exame Sustainability
Guide
Eco Amcham
Awarded among the best companies in the Environmental
Responsibility category.
Gestão & RH
publishing company
among the
ten best
The 100 Best in
Corporate Civic
Awareness 2008
SUSTAINABILITY
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
BRAND
RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
background image
12
natura
annual
report
Natura distinguished itself as one of the Leading Companies in
Climate Policies of the 2009 Época Climate Change Award.
We won in the Graphic Design, Product Family and marketing
with the massaróca Naturé Line.
Natura mexico was recognized for its socially responsible
management as part of the company's culture and business strategy.
Line/Product for Children: massaróca Naturé
American Perfumery for Women: Humor 5
Aparício Basilio da Silva Award ­ Best National Perfume Creation for
Women: Humor 5
Aparício Basilio da Silva Award - Best National Perfume Creation for
men: Natura Homem Nitro,
Company of the Year 2009 and Professional of the Year ­ Alessandro
Carlucci.
Natura won in the Best Cleaning Product category with the Natura
Chronos Cleaning Gel Soap;
The best company in the shower category with the Açaí berry
Triphasic Oil;
The best company in the The Classics of Nova category with
Diversa Lápis Kajal;
Perfumery, Natura Águas de Banho.
Época magazine
ABRE (Brazilian
Association of
Packaging)
mexican Center
for Philanthropy
(Cemefi) and
Alliance for Social
and Corporate
Responsibility in
mexico (Aliarse)
Atualidade
Cosmética
magazine
Nova magazine
among the
twenty best
certificate
Época Climate
Change
ABRE Design
Socially Responsible
Company Badge
Atualidade
Cosmética
New Beauty Award
SUSTAINABILITY

RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
PRODUCT AND PACKAGING mARKETING

RECoGnITIon
oRGAnIzATIon CATEGoRy AwARDED
PLACE
mr. Luiz Seabra, Co-chairman of the Board of Directors of Natura
was named one of the world leaders in sustainable business
management.
SAm Sustainability
SAm/SPG
Leadership Award
background image
13
natura
annual
report
NATURA VALUE CHAIN
Natura's main performance indicators in 2009
related to the stages of our value chain are:
1.
Extraction and transportation of raw materials
and packaging (direct and indirect suppliers)
R$ 2.7 billion distributed to suppliers
82% of suppliers were satisfied
31 certified ingredients
105,570 mt of GHG emissions related to the
extraction and transportation of raw materials
and packaging
23,606 mt of GHG emissions per direct supplier
(process and transportation to Natura)
2. Industrial and internal processes
R$ 643 million invested in innovation
R$ 111.8 million investidos em inovação
0.52 liter of water consummed per unit billed
447.3 kjoules of energy consummed per unit billed
31.5 grams de resíduos gerados por unidade faturada
14,767 metric tons of GHG emission in
internal processes
3.
Sale of products (transportation and distribution)
R$ 2.3 billion distributed to consultants
1 million consultants in all operations
88% of satisfied consultants
103 new products launched
43,980 tons of GHG emissions related to transpor-
tation of products to consultants and consumers
4.
Use of products and disposal of packaging
18.4% of refills on items billed
69.5 mPt/kg is the environmental impact of packa-
ging per number of products¹
57,873 tons emissions related to the final disposal
of products and packaging
1. The indicator also includes effects on the extraction
and transformation of packaging.
R$ 1.5 billion paid to the government
R$ 551.9 million distributed to shareholders
R$ 683.9 million in net income
R$ 4.2 billion in net revenues
R$ 1.0 billion in EBITDA
23.8% the EBITDA margin
R$ 59.9 million invested in corporate responsibility
CRoSS-SECTIonAL
InDICAToRS
3
1
2
4
background image
14
natura
annual
report
GOVERNANCE
In 2009, corporate governance at Natura greatly changed. It had begun to take shape in the
1990s but became more consistent in 2004, when the company went public and listed its shares
on the New market of the São Paulo Stock Exchange (Bm&FBovespa).
The Board of Directors, the highest administrative authority at Natura, consists of three founding
partners and four external members, two of which are independent. The board members were
chosen according to their qualifications, knowledge of sustainability, the complementary nature
of their executive experiences, and lack of conflicts of interest. Part of the Board members' re-
muneration is fixed and paid monthly, and another part is variable, linked to economic, financial,
social, and environmental goals, and paid annually.
In 2009, we raised the bar, the result of progress in the operation of the Board and in the streng-
thening of its four supporting committees: Strategy; Corporate Governance; Organization and
People; and Audit, Risk management, and Finance.
The Organizational and People Committee, which was formerly composed of Natura insiders,
was reinforced by Fátima Raimondi, chairman of Ericsson Brazil, a company recognized for its tra-
dition of good people management. Her membership was approved and made official in 2009,
and Raimondi started to effectively participate in February 2010.
meanwhile, the Audit, Risk management, and Finance Committee, which is responsible for the
analysis of scenarios related to accounting, fiscal, tax, corporate, and new investment issues, star-
ted to count on a second independent member: Gilberto mifano, vice president of the Brazilian
Institute of Corporate Governance (IBGC), former chairman of the Bovespa's Board of Direc-
tors, and known for being a professional with wide experience in corporate governance. Celso
Giacometti, who until 2008 was the only external member of the Audit Committee, was repla-
ced by Taiki Hirashima, former consultant of the World Bank and an expert in accountancy.
In 2009, the Strategy Committee became even more active, and its members met 13 times, de-
dicating twice as much time to the analysis of topics of interest to the Board of Directors.
The progress in corporate governance provided Natura with a IBGC award in 2009, in the Evo-
lution category. Our model is also recognized internationally. The company has been a member
of the Company Circle of Latin American Corporate Governance, an association made up of a
group of Latin American corporations, chosen by the International Financial Corporation (IFC)
of the World Bank based on their governance practices. In 2009, this group launched a guide
containing successful case studies of member companies.
EVALUATION OF SENIOR mANAGEmENT
In the first half of 2009, we conducted a structured self-evaluation process with our board mem-
bers and members of the Committees. This was the third evaluation since the creation of the
Board 11 years ago. The first was in 2006, and the second, in 2007.
The process was carried out in the ambit of the Governance Committee, which conducted
a series of individual interviews. The main notes and conclusions were compiled into a single
document, which was subsequently presented to the Board itself. Among the progress arising
from the self-evaluation are the reinforcements of new external participants in the People and
Organizational Development and Audit, Risk management and Financial committees.
EXECUTIVE GOVERNANCE
The Executive Committee (Comex) established itself as the main executive authority of
Natura and manages corporate affairs related to decisions on the Brazilian market and
foreign operations. It is made up of the CEO, Alessandro Carlucci, and the Senior Vice
Presidents of Natura.
In 2009, João Paulo Ferreira joined Comex as Senior Vice President of Supply Chain, as
did Telma Sinicio, as Senior Vice President of Innovation, the first woman to hold a senior
vice president position in Natura. This decision-making authority is supported by six com-
mittees that act as divisions of Comex and represent the executive authority in initiatives
related to brand management, ethics, commercial innovation, sustainability, products, and
processes.
They all report to the CEO and meet monthly ­ except for the Product Committee,
which meets on a weekly basis, and the Ethics Committee, which meets every six months
or whenever necessary.
background image
15
natura
annual
report
Natura's Executive Board in 2009
André Urani ­ Superintendent of Natura Institute
Alessandra da Costa - Human Resources Vice President ­ Brazil
Angel Medeiros ­ Logistics Innovation Vice President
Armando Marchesan neto ­ Customer Services Vice President
Arnô Araújo ­ Commercial Vice President - Natura mexico
Cecília Riviello ­ General Vice President mexico
Daniel Gonzaga ­ Research Vice President
Denise Alves ­ Culture and Organizational Climate Vice President
Denise Figueiredo ­ Business Unit Vice President - Platform C
Erasmo Toledo ­ Commercial management Vice President
Flávio Contini ­ International Finance and Legal Affairs Vice President
Flávio Pesiguelo ­ Organizational Development and Sustainability Vice President
Gilberto Xandó ­ Business Unit Vice President - Platform D
Guto Pedreira ­ Business Unit Vice President - Platform A
Heriovaldo Silva ­ Commercial management Vice President - Latam
Jorge Rosolino ­ Finance Vice President - Brazil
José Renato da Silveira ­ Shared Services Central Vice President
Lucilene Prado ­ Legal Vice President
Luis Bueno ­ Brasil Central Regional Vice President
Minoru Suga ­ South Regional Vice President
Marcello Rodrigues ­ Product Availability Vice President
Marcos Pelaez ­ Information Technology Vice President
Marcos Vaz ­ Sustainability Vice President
Moacir Salzstein ­ Corporate Governance Vice President
Mônica Gregori ­ Business Unit Vice President - Platform B
nestor Felpi ­ International Order Cycle Vice President
Pedro Villares ­ Latin America Business Vice President
Renato Abramovich - North Northeast Regional Vice President
Ricardo Faucon ­ Supplies Vice President
Rodolfo Guttilla ­ Corporate Affairs and Government Relations Vice President
Romina Broda ­ General Vice President ­ Argentina
Rogério Cher ­ Corporate Human Resources Vice President
Tatiana Pignatari ­ Business Unit Vice President ­ Latam
Victor Fernandes ­ Product Development Vice President
Board of Directors
Pedro Luiz Barreiros Passos - Co-chairman
of the Board of Directors in office
Antonio Luiz da Cunha Seabra - Co-chairman
of the Board of Directors
Edson Vaz Musa - member of the Board
Guilherme Peirão Leal - Co-chairman of the Board
of Directors
José Guimarães Monforte - member of the Board and
Chairman of the Audit, Risk management, and Finance
Committee
Julio Moura neto - member of the Board
and Chairman of the Strategy Committee
Luiz Ernesto Gemignani - member of the Board and
Chairman of the Organization and People Committee
Natura Executive Comittee
Alessandro Carlucci - CEO
João Paulo Ferreira - Senior Vice President
of Supply Chain
José Vicente Marino - Senior Vice President
of Sales and marketing
Marcelo Cardoso - Senior Vice President of
Organizational, Development and Sustainability
Maurício Bellora - Senior Vice President
of Internationalization
Roberto Pedote - Senior Vice President
of Financial and Legal Affairs
Telma Sinicio - Senior Vice President of Innovation
background image
16
natura
annual
report
Strategy Committee
It is made up of three Board members, Pedro Luiz Barreiros Passos, Julio moura Neto and
Edson Vaz musa, in addition to the CEO, Alessandro Carlucci. They analyze the strategic issues,
preparing guidelines and recommendations for the Board. Among the main actions of the
Committee in 2009, we note the increase in the duration of the monthly meetings, which star-
ted to take all day long and not half a day anymore. The Committee monitors the 16 strategic
projects that are currently in progress and discusses Natura's long-term strategies.
Corporate Governance Committee
Among its functions is the discussion of improvements and progress in the governance pro-
cess and business operation. made up of four Board members: Pedro Luiz Barreiros Passos,
Guilherme Peirão Leal, José Guimarães monforte and Júlio moura Neto, in addition to moacir
Salzstein, Corporate Governance Director. They meet on a quarterly basis and, in 2009, they
met four times. In 2009, the Committee was responsible for the self-evaluation process of the
Board of Directors and its support committees.
Organization and People Committee
It is made up of three Board members: Pedro Luiz Barreiros Passos, Edson Vaz musa and Luiz
Ernesto Gemignani; an external member (as from 2010), Fátima Raimondi; the CEO, Alessan-
dro Carlucci; and the Senior Vice President of Organizational Development and Sustainability,
marcelo Cardoso. They meet monthly, however, in 2009, 10 meetings were held. Among the
topics addressed by the committee are issues related to compensation, leadership projects,
succession, and training and topics of interest to the Human Resources area
Audit, Risk management and Finance Committee
It is composed of the Board member José Guimarães monforte; two external members,
Gilberto mifano and Taiki Hirashima; the Senior Vice President of Financial and Legal Affairs,
Roberto Pedote; the Corporate Governance Vice President, moacir Salzstein; and the Risk
management and Internal Auditor manager, mercedes Stinco. The group meets on a monthly
basis and, in 2009, it met 12 times. The Committee is responsible for supporting the Board
in its analysis of financial matters, risks, and the relationship with external auditors. The news
for this Committee in 2009 was the addition of an external member, the replacement of a
member and the inclusion of the Corporate Governance Vice President.
Sustainability Committee
To ensure that sustainability permeates Natura's entire governance model, the Sustainability
Committee serves as a preparatory forum for the decisions of the Executive Committee and
also contributes to the analysis of the Board. The coordination of the Sustainability Committee,
which meets monthly, is in charge of the Sustainability Office, which monitors the inclusion of
and the balance between the social, environmental and economic variables in the action plans
conducted by the many projects and departments of the company. It is composed by the
Board members Guilherme Peirão Leal and Pedro Luiz Barreiros Passos; the CEO, Alessandro
Carlucci; the Senior Vice Presidents of Organizational Development and Sustainability, marcelo
Cardoso, of Supply Chain, João Paulo Ferreira, and of Innovation, Telma Sinicio; and by the Vice
Presidents of Corporate Affairs and Government Relations, Rodolfo Guttilla, Sustainability,
marcos Vaz, and Legal Affairs, Lucilene Prado.
Process Committee
At the end of 2009, the Process Committee was created to provide executive support for the
implementation of the management system by processes at the company. It is made up of the
CEO, Alessandro Carlucci; the Senior Vice President of Organizational Development and Sus-
tainability, marcelo Cardoso; the Customer Service Vice President, Armando marchesan; the
Platform C Business Unit Vice President, Denise Figueiredo; the Brazil Central Regional Vice
President, Luis Bueno; the Information Technology Vice President, marcos Pelaez; the Corpo-
rate Human Resources Vice President, Rogério Cher; and the management System manager,
Daniel Levy. This committee meets on a monthly basis.
background image
17
natura
annual
report
Brand Committee
The Brand Committee meets once a month to address topics related to Natura's brand and
sub-brands. The main discussions are focused on the architecture of the brand, the adequacy
of the sub-brands to Natura's value proposal and beliefs and on issues such as the language
and evolution of the brand. This committee is composed of the CEO, Alessandro Carlucci; the
Senior Vice President of Sales and marketing, José Vicente marino; the Senior Vice President
of Organizational Development and Sustainability, marcelo Cardoso; the Corporate Affairs and
Government Relations vice president, Rodolfo Guttilla; and the brand managers, Ana Luiza Alves
and Karen Cavalcanti.
Quality of Relationships Committee
This Committee monitors the relationship plans established for each of our stakeholders and
the evolution of these relationships. This Committee meets every two months. It is made up of
the Senior Vice President of Organizational Development and Sustainability, marcelo Cardoso;
the Sustainability Director, marcos Vaz; the Ombudswoman, Estelita Thiele; and those respon-
sible for communicating with the stakeholders: supplier communities, suppliers, shareholders,
consultants and NCAs, surrounding communities, employees, government and consumers.
RISK mANAGEmENT
Natura uses the analysis of two risk groups: strategic, which takes into consideration sce-
narios that may affect the company's continuity, and operational, which focuses on internal
processes that are regularly checked by managers and their respective teams. In both cases,
the evaluation of risks includes economic, social, and environmental aspects.
In 2009, we implemented Control Self-Evaluation in Natura's entire chain of processes. The
main operational risks and the controls of all processes were identified, totaling approxima-
tely 100. The self-evaluation involved the application of approximately 180 questionnaires
and mobilized around 170 managers. The most important risks were forwarded to our 2010
Natura Strategic Planning. In the processes where we identify high risks, we develop action
plans to mitigate them.
As part of a movement for the continuous improvement of the whole management model,
in 2009 we started to develop a more comprehensive contingency plan for Natura, based
on the actions necessary to mitigate strategic risks.
INTERNAL AUDIT
Natura's Internal Audit department is made up of 20 employees who report only to the
Audit, Risk management and Finance Committee. The fact that this group does not report
to any other area of the company helps to guarantee the impartiality of its work. Natura
internal audits use a set of tests and procedures in the many processes of the company to
evaluate the internal controls environment, and they also look into possibilities of fraud. In
2009, we audited nearly twice as many processes than in 2008: 13 audit exams compared
to seven.
In 2009, the Internal Audit department received 24 cases involving all operations, reported
by different channels, especially the Natura Ombudsman's Office. Twelve cases of irregula-
rities were proved; those that were cases of misconduct resulted is six employee dismissals
and one warning. The survey does not include cases involving third parties. All cases helped
us improve our control mechanisms.
COmPENSATION OF KEY mANAGEmENT PERSONNEL
Our organizational evolution, which has been taking place since 2008, involved the adoption of a
management model based on processes, which are at the service of more independent business
and regional units, imposing on Natura a revision of its compensation structure so as to increase
the variable component by means of adjustments in Profit Sharing.
For a group of executives, which includes the company's chief executive officer, senior vice presi-
dents, officers and senior managers, we have consistently tied the gains with not only the short-
term results generated but also, and primarily, with the commitment to our long-term project.
This practice was adopted by means of the Share Purchase or Subscription Option Program,
with an aim to stimulate the necessary entrepreneurship and engagement of executives, as well
as the assumption of risks.
background image
18
natura
annual
report
The design of the Share Purchase Option Program aims to ensure the sense of ownership and
involvement, strengthening the relationship between compensation and gains and the creation of
the company's value, in addition to healthy growth with the balanced distribution of results when
allowed by the business profitability.
The Share Purchase or Subscription Option Program has provided, since 2009, that the granting
of the option to purchase or subscribe shares is associated with the executive's decision to invest
at least 50% of the amount received as profit sharing in the acquisition of Natura's shares. The
shares can only be exercised after a vesting period of three years for 50% of the shares, and of
four years for 100% of the shares. In both cases, there is an eight-year validity, and the shares
are not available for sale until the end of the third year. Until 2008, the vesting period had been
three years, the plan expired after six years and it did not require the purchase and holding of
the shares. As it is now, long-term commitment is stimulated, and executives have more time to
exercise their options.
In 2008, we had a ceiling established by the Board of Directors of 0.6% a year and 3% of Natura's
total shares. The model established in 2009, which is more aggressive, provides for an annual
limit of 0.75%, totaling a maximum of 4% of Natura's shares. In December 2009, the volume of
options held by executives represented around 1.29% of the company's shares compared to
1.1% in December 2008.
The Program's history is as follows: since 2002, we have granted 19,551,076 options and 22% of
these options were cancelled due to executives leaving.
nUMBER oF oPTIonS
Mature
Non-Mature
Plan
Granted
Exercised
Balance
Balance
Cancelled
22002
3,533,610
2,712,645
0
0
820,965 23%
2003
3,969,220
3,359,160
0
0
610,060 15%
2004
1,901,460
1,544,986
61,077
0
295,397 16%
2005
1,120,760
421,329
230,025
0
469,406 42%
2006
1,153,756
45,096
577,623
0
531,037 46%
2007
1,305,508
0
361,559
361,559
582,391 45%
2008
1,800,010
0
0
1,089,064
710,946 39%
2009
2,735,657
0
0
2,465,384
270,273 10%
2010
2,031,095
0
0
2,031,095
0
0%
Total
19,551,076
8,083,216
1,230,284
5,947,102 4,290,475 22%
APPRECIATIon oF THE PLAnS
Valores em Milhares de R$
Potential
Restated Real Desont
Discount
Potential
Discount of the
Amount of Obtained in
Obtained Discount of the Non-Mature Status of
Plan
the Plan
the Year
in the Year* Mature Balance
Balance
the Plan
2002
R$ 6.60
42,412.4
50,320.5
0.0
0.0
Expired
2003
R$ 3.70
66,917.3
76,807.9
0.0
0.0
Expired
2004
R$ 9.09
24,543.9
26,627.5
1,590.9
0.0
Expired
2005 R$ 19.51
3,189.2
3,300.2
3,594.8
0.0
100%
Mature
2006 R$ 29.08
223,7
227,3
3.502,5
0,0
100%
Mature
2007 R$ 27.50
0,0
0,0
2.763,5
2,763.5
50%
Mature
2008 R$ 21.35
0,0
0,0
0,0
15,017.0
non-
Mature
2009 R$ 23.29
0,0
0,0
0,0
29,297.1
non-
Mature
2010 R$ 34.17
0,0
0,0
0,0
2,049.0
non-
Mature
Total
137,286.5
157,283.4
11,451.8
49,126.6
(*) Accumulated amounts, adjusted based on the Broad Consumer Price Index (IPCA) until March 2010. On March 19, 2010,
NATU3 was quoted at R$ 35.14. Natura shares on March 15, 2010 ­ 430,324,496.
50%
100%
EFFECTIVE-
MATURE
MATURE
nESS
04/10/2005 04/10/2006
04/10/2008
04/10/2006 04/10/2007
04/10/2009
04/10/2007 04/10/2008
04/10/2010
03/16/2008 03/16/2009
03/16/2011
03/29/2009 03/29/2010
03/29/2012
04/25/2010 04/25/2011
04/25/2013
04/22/2011 04/22/2012
04/22/2014
04/22/2012 04/22/2013
04/22/2017
03/19/2013 03/19/2014
03/19/2018
background image
19
natura
annual
report
VARIABLE COmPENSATION
The Board of Directors also established that the total annual Profit Sharing, which is the basis of the
long-term compensation program, is limited to 10% of net income. With these limits, Natura has a
consistent and well-controlled system that avoids the recent distortions in executive compensation
seen in other countries.
The variable component, whether a short-term compensation or long-term gains, represents a
larger portion for senior executives compared to the other employees because we believe in the
joint creation of value. In addition to the well-defined limits, all variable compensation is tied to
the effective attainment of targets and the surpassing of minimum growth expectations annually
established by management.
The criteria that determine the scope of variable compensation take into account performance
indicators that cover the three sustainability dimensions. In 2009, the following indicators were
taken into consideration:
· Economic - consolidated EBITDA, Brazilian and foreign operations;
· Social - organizational climate survey among employees from Brazilian and foreign operations,
satisfaction survey with consultants, and the Non-Service Rate (NSR), which represents the
percentage of products unavailable for sale upon the placement of orders by our consultants,
which is also measured for both Brazilian and foreign operations;
· Environmental ­ carbon emissions.
See below the compensation amounts of the main groups of professionals:
2010 Stock
Avarage
Total
Total
Options Palan
Number of
Salary
Variable
(in mumber
2009
Employees
(in millions)
1
(in millions)
2
of options)
3
Board
8
5.06
1.33
338,030
Executive Committee
4
2.38
6.35
345,626
Senior Management
and officers
74
19.77
20.17
1,347,440
Middle Management
283
32.86
20.50
0
Administrative
903
44.63
5.59
0
Sales force
981
43.76
46.25
0
operational
2.239
37.09
5.59
0
Total 2009
4,492
185.56
105.79
2,031,095
2009 Stock
Avarage
Total
Total
Options Palan
Number of
Salary
Variable
(in mumber
2008
Employees
(in millions)
(in millions)
of options)
Board
7
2.64
1.33
0
Executive Committee
6
5.45
7.29
694,726
Senior Management
and officers
81
24.31
21.22
2,040,931
Middle Management
302
39.85
22.57
0
Administrative
971
53.54
8.67
0
Sales force
1,097
43.81
40.06
0
operational
2,132
37.89
8.63
0
Total 2008
4,597
207.50
109.77
2,735,657
background image
20
natura
annual
report
2008 Stock
Avarage
Total
Total
Options Palan
Number of
Salary
Variable
(in mumber
2007
Employees
(in millions)
(in millions)
of options)
Board
6
2.28
0.00
0
Executive Committee
5
3.70
2.58
454,573
Senior Management
and officers
85
23.58
13.52
1,273,504
Middle Management
316
39.52
13.12
71,933
Administrative
1,009
54.14
3.38
0
Sales force
1,149
40.79
30.98
0
operational
2,094
35.84
4.11
0
Total 2007
4,664
199.85
67.70
1,800,010
2007Stock
Avarage
Total
Total
Options Palan
Number of
Salary
Variable
(in mumber
2006
Employees
(in millions)
(in millions)
of options)
Board
5
2.56
0.00
0
Executive Committee
6
4.55
2.51
290,568
Senior Management
and officers
72
19.21
10.15
961,534
Middle Management
270
32.97
12.20
53,406
Administrative
920
48.33
4.21
0
Sales force
1,008
35.11
25.97
0
operational
1,760
29.96
5.16
0
Total 2006
4,042
172.70
60.21
1,305,508
(1) Total Salary: Includes annual average base salary over 12 months (without charges) and Overtime (with Remunerated
Weekly Rest ­ DSR) in millions.
(2) Total Variable: Total Salary plus Bonuses, Profit Sharing and Sales Bonuses (with DSR).
(3) The number of options refers to the plan of the current year.
Note: The profit sharing refers to the year it was earned, and is paid in the subsequent year.
CAPITAL mARKETS
In 2009, a secondary public offering of shares took place, increasing to 39.5% from 26.2% the
portion of total capital of Natura available for trading on the market at the price of R$ 26.50
per share. The offering raised approximately R$ 1.5 billion. As a consequence, new shareholders
could join our shareholder base (see page 54). In line with the best governance practices, which
recommend the reduction of restrictions for the purchase of shares, Natura decided to soften
the poison pill clauses adopted in 2004 when the company went public. These clauses are rules
that protect the company against hostile takeovers. At the time, the rules were quite justifiable.
Now, however, Natura has achieved sufficient size and maturity in its relationship with the capital
markets to allow us to soften such restrictions.
Natura's previous rule determined that a shareholder or group of shareholders holding 15% of
the shares must make an offer to buy the shares of all the other investors for a purchase price
that included a premium of 50%. After the change, this percentage went from 15% to 25% and
the premium requirement was removed. Despite the maintenance of this clause, it was deter-
mined that any offer can only be formalized based on a decision of shareholders at an Annual
Shareholders' meeting.
The governance was responsible for the flow of processes, at first, within the Audit Committee
and later, within the Board, which convened an Extraordinary meeting that was held on August
5, 2009. The entire process was supported by the legal affairs department.
This flexibility resulted in a change in our By-laws and was interpreted as a pioneering attitude of
Natura in the capital markets. Currently, more than 60 companies listed on the Bm&F Bovespa
have poison pill clauses. It was Natura itself that decided to amend the clause. There was no
emergency, obligation or pressure by the shareholders or any other stakeholder for this decision.
However, we believe that this was the ideal moment for making it more flexible due to the gre-
ater maturity achieved by Natura's corporate governance
background image
21
natura
annual
report
PROSPECTS
We believe that the 21st century agenda will be guided by a low-carbon economy, conscious
use of natural resources, and the development of quality relationships. The companies that are
aligned with the precepts of sustainable development and are attentive to the opportunities
imposed by the sustainability crisis will continue to be competitive in the face of this new
scenario.
Natura strives to lead in this environment of changes, and 2009 represented another impor-
tant moment in its progress. We successfully predicted the effects of the international crisis:
lower exposure of the Brazilian economy; resilience of the personal hygiene, fragrances, and
cosmetics sector; strength of the Natura brand; and the competitive advantage of the direct
sales business model.
The impressive results for 2009 and the recent changes in our management encourage us to
look to the future with optimism. Year after year, we have achieved growth higher than our
sector's average, which proves the acceptance of our value proposal in the markets where we
operate, all with great potential for expansion.
The economic expansion expected for Brazil over the coming years, with the consequent
improvements in income distribution and increase in women's participation in the economy,
points to an acceleration in the growth of the Brazilian cosmetics, fragrances, and personal hy-
giene market. In Latin America, we have reached a size that allows us to start a new expansion
phase, always committed to sustainable regional development.
In order to improve the quality of our services, allow for future growth, and continue to increa-
se production gains, we are increasing our investments in industrial training and logistics, as well
as in information technology, integrating the many sites and operations.
mARKET CONTEXT
The target market in Brazil grew in nominal value by 15.2% in 2009, according to partial figu-
res from the Brazilian Association of the Cosmetic, Toiletry abd Fragrance Industry (Sipatesp/
Abihpec). The direct sales segment also kept its growth pace in Brazil and handled R$ 21.85
billion in 2009, an 18.4% increase over the previous year.
At the end of 2009, the Brazilian Direct Selling Association (Abved) accounted for 2.37 million
active resellers, which represented an increase of 17% in this sales channel over 2008. Accor-
ding to the Euromonitor agency, Brazil became the largest direct sales market in the world
for cosmetic, fragrance, and personal hygiene products, ahead of countries such as the United
States and Japan.
Natura's market share in the target market in Brazil continued to grow in 2009, moving from
21.4% in 2008 to 22.5% in 2009., Although we do not yet have consolidated data, we can
affirm that we also gained market share in the other Latin American countries.
SUSTAINABILITY mANAGEmENT
Natura is recognized in Brazil and the world for its unceasing efforts to infuse sustainability into
the company's day-to-day business. Our main challenge, however, is to improve the combined
management of the economic, social, and environmental aspects throughout the processes of
the company.
WHAT WE
AIm FOR
background image
22
natura
annual
report
Sustainability is a cornerstone of Natura's Strategic Planning approved by the Board of Direc-
tors. We have also included socio-environmental indicators in our strategic targets. We want
to be innovative regarding social and environmental demands in the present and in the future
in all countries in which we operate, and we are attentive to the risks and opportunities that
involve climate change, social inequality, and scarcity of natural resources.
Every two years, we reflect on the most important aspects of the business in these regards,
including impacts on our stakeholders (more information on page 112). The Sustainability
Committee reports on these aspects to senior management, which discusses the risks and
opportunities related to them. The sustainability management process includes the sustainable
use of biodiversity and the quality of relationships, which covers all our efforts on education
about the relationship and dialogue with stakeholders.
The Sustainability Office, which is linked to the Office of the Senior Vice President of Organi-
zational Development and Sustainability, is responsible for safeguarding this management pro-
cess, acting as a mobilizer, instructor and disseminator of the practices to the whole company
and ensuring that all have social and environmental indicators and targets when conducting
the company's day-to-day business.
We are also including and harmonizing our sustainability practices in our international operations.
In 2009, we created the Sustainability Office for Latin America in order to strengthen sustainabi-
lity management in the other Latin American countries where we operate.
ABOUT THIS REPORT
This is our tenth sustainability report prepared based on Global Reporting Initiative
(GRI) guidelines. For the third consecutive year, we declared the A+ application level,
with external verification conducted by Det norske Veritas (DnV) and data checked
by GRI itself.
we present information on all our operations, but most indicators still refer to the
Brazil-ian operations. The progressive consolidation of data on all operations helps
us continually improve the report. The criterion for selecting the information for the
printed version focused on the relevance of the topics for natura and its stakehol-
ders.
COLLECTIVE CONSTRUCTION
In line with our strategy to increasingly involve our stakeholders in the development
of the desired future, we began for the first time in 2009 to prepare a wiki Report,
the content of which is being developed collaboratively with our stakeholders.
The main objective of the process was to start a journey to transform the Annual
Report into a living document, to serve as communication and continuous dialogue
with stakeholders. To this end, six virtual discussion forums were held by means of
the natura Conecta platform, one for each high-priority sustainability topic: Ama-
zon, Biodiversity, Education, Greenhouse Gases, Impact of Products, and Quality
of Relationships. The results were included in this report and will be considered in
the preparation of our Strategic Planning.
Stakeholders were invited to visit the discussion forums on high-priority sustai-
nability topics and post their messages. Each forum had an introductory text, an
invitation to reflection, in addition to a video film produced by natura on the
respective topic. The video explained why the topic is important to society and to
natura, presented the actions we develop that are related to the topic and asked
the participant: what do you think about this matter? Do we manage to make a
positive contribution with respect to this topic? How can we improve?
background image
23
natura
annual
report
To encourage more people to engage in the process, we distributed to the people
registered in natura Conecta forms via e-mail with questions on the adherence
of natura's actions regarding the high-priority topics, opportunities, and improve-
ments. In addition to the discussions that took place in the forums, we considered
in the analysis the 320 replies sent between February 4 and 10, 2010, by employees,
consultants, consumers, and suppliers.
we found that much of what has been offered by our stakeholders was in line with
our thinking. This activity represents an opportunity to evolve our process of dia-
logue with our stakeholders and to include their voices in natura's management.
Systematizing responses led to the collective development of the text on the follo-
wing page, which was validated by our stakeholders through the virtual platform.
we thank all the participants and invite our readers to engage in our dialogue.
THE NATURA WE SHARE
we recognize that natura is a company that is committed to social and environmental
issues, concerned with the impacts of its products, and open to dialogue. we notice
its respect for nature and regional culture, its vanguardism in the sustainable use of
raw materials and biodiversity, and in the creation of value to suppliers, consultants,
and the people who live in the Amazon. For this reason, we expect from natura more
efficiency in its actions and support its playing a greater lead role in bringing awareness
to society.
we believe that natura is an example for people and the market, and it has a role in
shaping opinions, bringing awareness to the corporate segment, promoting and disse-
minating its good practices, and mobilizing the creation of an innovative movement that
involves other companies, suppliers, universities, non-governmental organizations, and
public authorities.
Therefore, communication is an important focus of attention, whether in the way
natura communicates its value proposal to society by means of the media, or the
service to stakeholders through the communication channels that have already been
established, such as the website, the natura Customer Service (nCS), and the natura
Service Center (nSC). we understand that natura's communications with its con-
sultants, and their communications with consumers, can be improved, as well as the
communications with those inside the company. The existing channels can be further
explored, mobilizing society and encouraging sustainability actions.
There are opportunities for improvement on many other fronts. we suggest that na-
tura expand its sustainable work in the use of biodiversity to other regions of Brazil.
we verified that its actions are concentrated on the Ekos line, which uses raw mate-
rials from the Amazon rainforest, and we see the possibility of expanding these actions
to other product lines and geographic areas.
we support the search for new technologies and the constant improvement of pro-
ducts and packaging, as well as the investment in reverse logistics, which collects empty
packaging after use and properly forwards them for recycling.
we suggest that natura increase investments in the training of consultants so that they
will have more opportunities to engage in socio-environmental projects and dissemi-
nate them to society, expanding the company's influence network. we believe that the
actions and projects related to education are not sufficiently publicized and need more
investments, but we recognize the importance of initiatives such as the Crer Para Ver
(Believing is Seeing) Program.
Finally, we believe that natura seeks to improve its interaction with its different
stakeholders. And we share the view that this is the way to make lasting relationships..
Participants of the Natura Conecta
background image
24
natura
annual
report
HIGH-PRIORITY SUSTAINABILITY TOPICS
AmAZON
We believe that sustainable development in the Amazon, based on the maintenance and
appreciation of its natural and cultural heritage, is a requirement to ensure its future. For the
Amazon rainforest to play its beneficial planetary role, it is vital to direct educational, scienti-
fic, and technological resources to the region, in addition to stimulating the development of
sustainable chains that combine job creation and income generation with the balanced use
of natural resources. Only an open and collaborative approach, with the involvement and the
co-responsibility of our partners and stakeholders, can improve the situation of the Amazon
region.
In 2009, we were focused on the expansion of our activities in the Amazon by means of semi-
nars with experts. We also visited the region often to experience the local reality. These activ-
ities involved Natura's senior management in order to develop in 2010 a program of initiatives
that contribute to the sustainable development of the region and provide new opportunities
for the business.
"NATURA IS NOT THERE (IN THE AMAZON REGION)
BASED ON THE RESOURCE EXPLORATION MODEL. BUT,
ON THE CONTRARY, IT IS BASED ON THE SUSTAINABLE
DEVELOPMENT MODEL."
Poliana Roman, Natura consultant
BIODIVERSITY
The degradation of biodiversity is a major threat to life on our planet. By using ingredients
from biodiversity sustainably while appreciating traditional regional and local cultures in our
technological platform, we are contributing to the balanced use of these natural resources.
We understand that generating income to the supplier communities and encouraging the
adoption of sustainable practices allow us to evolve in our commitment to sustainable de-
velopment. During 2009, we internally disseminated our Policy for the Sustainable Use of
Biodiversity and Cultural Heritage.
We will maintain the incentives for the creation of community development funds and fair
price value chains, and remuneration for the use of genetic heritage and traditional know-
ledge. We expect these initiatives to be integrated and successful. We will also focus on the
development and implementation of Relationship Plans with the supplier communities and
their settlements.
In order to ensure the best results in this process, we systematically monitor its actions
and results by means of the Biodiversity managing Group (BmG), which is made up of the
executives involved in the process and led by the Sustainability Executive Officer. Thus we
provide for the integration of different views on the topic and on the company's initiatives.
We will continue to contribute to governmental efforts toward the establishment of a new
regulatory framework for access to Brazilian biodiversity. Internally, we will eliminate the
vulnerabilities related to the existing regulatory framework or the one that replaces it (learn
more on page 64).
"I FEEL THAT THIS SPEECH IS STRONGLY CONNECTED WITH
A SPECIFIC LINE OF PRODUCTS (EKOS) AND NOT TO THE
COMPANY AS A WHOLE."
Fabio Betti Rodrigues Salgado, Natura consumer
background image
25
natura
annual
report
EDUCATION
Natura considers education one of the most decisive and powerful mechanisms to transform
society. Our business, given its reach and influence, gives us the opportunity to be an important
agent in strengthening the movement of education and social change.
Our work has gained new strength with the creation of the Natura Institute, an independen-
tly headquartered, non-profit institution that will assume Natura's private social investments,
which include managing the projects of the Crer Para Ver (Believing is Seeing) Program. Throu-
gh this program ­ which represents one of our main expressions in the field of education
­ we have developed initiatives for improving the quality of public education, focusing on the
encouragement of reading and the improvement of writing. Internally, we recognize that the
effort we have been making in education over the years is still insufficient by our standards.
We understand that education for sustainability must promote reflections, develop knowledge,
and train managers to identify socio-environmental challenges and convert them into business
opportunities that promote sustainable development.
In 2009, we put into practice a leadership development program with an annual investment of
0.4% of our net revenues, which started to be applied to the 484 managers of the company
and which, in 2010, will be extended to other stakeholders (learn more on page 28).
"A COUNTRY, A SOCIETY, A COMPANY, CANNOT GROW
WITHOUT KNOWLEDGE. IT IS OUR GREATEST HERITAGE
BECAUSE, ONCE OBTAINED, IT BECOMES PART OF
US. NATURA IS AWARE OF THAT AND INVESTS IN ITS
INTERNAL AND EXTERNAL STAKEHOLDERS."
Ariane Chacon da Cruz, Natura consultant
GREENHOUSE GAS EFFECTS
Climate change has become one of the greatest challenges of society. If nothing is done, we
will suffer the consequences of the increase in global temperature caused by the growing
emission of greenhouse gases. Natura considers this an extremely important issue and is
concerned that nations' made no progress toward controlling GHG emissions at the Clima-
te Change Conference (COP15) in 2009 in Copenhagen. At this meeting, we announced
the partnership that we signed with WWF to reduce by 10% our emissions related to the
so-called scopes 1 and 2 of GHG by.2010.
Through our Carbon Neutral Program, we have set the target of reducing by 33% our GHG
emissions in all our chain within five years, between 2007 and 2011. In 2009, we reduced our
emissions by 5.2%, for a total since 2006 of 16.1%. This program also includes the offsetting
of emissions we could not avoid by means of socio-environmental projects that promote
carbon capture and, at the same time, contribute to the development of local communities
(learn more on page 63).
"I BELIEVE NATURA CAN DO MORE, AND SHOULD...
RESEARCH ON REDUCTION SHOULD BE INCREASED. OUR
CLIMATE HAS ALREADY CHANGED AND SOME IMMEDIATE
ACTION IS NECESSARY! NATURA IS AN EXAMPLE, AND
SHOULD SEARCH FOR MORE."
Fabiolla Pereira de Paula, Natura consumer
background image
26
natura
annual
report
ImPACT OF PRODUCTS
We understand that in our systematic efforts to reduce the negative impacts of our products,
we should invest in innovative instruments and practices. Our constant focus should be on the
reduction of these impacts, including social and environmental aspects in decision-making in all
areas and processes of the company.
Accordingly, we have invested in using more plant and organic substances in our product for-
mulas. In packaging, we offer the use of refills and use recyclable and recycled materials. In 2009,
we reached the highest rate of use in our products of materials that come from renewable
plant sources in our history: 79.2%. We also use ecological design concepts, aimed at making
post-consumption recycling easier.
We have mobilized our consultants from from some Brazilian regions so that, voluntarily, they
collect Natura's post-consumption packaging from their customers and forward them, by me-
ans of partner transportation companies, to the cooperatives of local garbage collectors. Ac-
cordingly, in addition to reducing environmental impacts, we contribute to the social inclusion
and income generation of people who make a living from the collection of these materials.
To our customers we offer the guarantee of the use of safe, animal-testing free products, which
are approved by dermatologists and multidisciplinary teams. And we are committed to the
elimination of controversial ingredients.
"IT IS IMPORTANT TO EXPAND THE KNOWLEDGE NETWORK BY WAY OF JOINT INNOVATION
TEAMS (COMPANIES, SUPPLIERS, UNIVERSITIES, NGOS, ETC.) THAT SEARCH FOR SUSTAINABLE
SOLUTIONS FOR REPLACING PACKAGING AND INPUTS."
Helen Zampoli Augusto, Natura supplier
QUALITY OF RELATIONSHIPS
We believe that sustainable results are achieved by means of quality relationships and, for this
reason, in addition to open dialogue channels, we try to cultivate ethical and transparent rela-
tionships with all of our stakeholders. Accordingly, in addition to expanding the Ombudsman's
work, we have recently included relationship quality management in our strategic planning
and developed structured education processes for the relationships with and engagement
of stakeholders. The availability of the lessons learned from these initiatives could lead to the
evolution of our processes and actions, helping raise the standard of our relationships.
To this end, it is important to solidify the mobilization and training of managers to prepare
and implement relationship plans, which should be continuously monitored by indicators.
In 2009, we shared our wishes with employees, consultants and NCAs, consumers, share-
holders, surrounding communities, suppliers, and supplier communities, and help them to get
to know us better and interact with us. In this process, a rich learning experience, we directly
involved around 1,500 people, 1,120 of whom participated in person-to-person meetings
in Brazil. This process expanded our social networks on the Internet, which allowed our
stakeholders to jointly prepare a document on the role of Natura concerning high-priority
sustainability topics.
"I HAD THE PLEASURE OF RESPONDING TO THE
QUESTIONNAIRES, AND I HAD NEVER BEFORE SEEN
A COMPANY THAT WANTED TO HEAR EVERYTHING
WE HAD TO SAY, EVEN THOUGH IT WAS NOT ALL
COMPLIMENTS."
Fabiane Alves dos Santos, Natura consultant
background image
27
natura
annual
report
DEVELOPmENT OF OUR COmmITmENTS
Over the years, we have established clear commitments to the evolution of our performance indicators as a way to
continually improve the management of our impacts. This year, in addition to relating our targets as to the high-priority
sustainability topics, as we did in 2008, we also aligned the 2010 targets with our socio-environmental budget, the objective
of which is to further integrate sustainability with our strategic planning cycle.
To learn more about the targets presented in this table, please refer to the chapter on the related stakeholder.
EmPLOYEE
Quality of
relationships
Quality of
relationships
CONSULTANTS AND CONSUmERS
Education
Quality of
relationships
Education
Obtain a 71% favorable response rate from employees in the
Organizational Climate survey.
TARGET ACHIEVED - We obtained a 72% rate in the Brazilian
operations. This result is due mainly to the increase of eight
percentage points in favorable response by the operational staff as
a result of the RenovAção Project. (Renovação means "renewal" in
Poruguese, but this form stresses the word Ação, or "action.").
maintain a 47% brand preference rate according to the Brand
Essence survey (brand's image).
TARGET noT ACHIEVED - We obtained a rate of 46%.
Statistically speaking, the target was met because there is a
margin of error in this survey. However, we chose to be more
conservative and consider the target not achieved.
maintain a 90% favorable response rate from consultants in the
Satisfaction Survey.
TARGET ACHIEVED - We maintained the same level as the
previous year for both the quality of relationship (climate) rate,
which was at 90%, and the satisfaction rate, which was at 88%.
Invest 3.5% of total payroll in employee training.
TARGET ACHIEVED - In Brazil, investment in education allowed
for the training and development of 4,714 employees; the total
amount invested represents 4.4% of total payroll.
Collect R$ 3,744 million from the sale of products from the Crer
Para Ver (Believing is Seeing) line.
TARGET ACHIEVED - We collected R$ 3,768 million. In order
to achieve this goal, we invested in the launch of products such as
new T-shirts and shopping bags.
Have 463,054 consultants participate in training courses.
TARGET ACHIEVED - 527,000 consultants were trained
(a total of 583,000 consultants participated in the training
courses, excluding repetitions).
2010 ­ Have 100,000 consultants engaged in the movimento
Natura (Natura movement).
Obtain a 77% favorable response rate
in the Organizational Climate Survey.
maintain the consumer loyalty rate
at 46%.
Obtain a loyalty rate of 18% with
consultants.
Obtain a loyalty rate of 40% with
Natura Consultant Advisers
Provide an average of 100 hours of
training per employee in Brazil.
Collect R$ 6 million from the sale of
products from the Crer Para Ver line.
Have 100,000 consultants engaged in
the Natura movement
Have 500,000 consultants participate
in training courses.
Hight-priority Topics
Commitments for 2009
Commitments for 2010
Hight-priority Topics
Commitments for 2009
Commitments for 2010
Hight-priority Topics
Commitments for 2009
Commitments for 2010
CONSUmERS
background image
28
natura
annual
report
Impact
of Products
Publish the Relationship Principles with consumers.
TARGET noT ACHIEVED - We published the Relationship
Principles with consumers at the beginning of 2010. The
principles address topics such as dialogue channels, relationship,
quality of products and services, sustainability, and satisfaction,
and are available at www.natura.net/principios
Eliminate the chemical class parabens from the product
portfolio by December 1, 2010.
TARGET PARTIALLy ACHIEVED - more than 90% of the
product portfolio is free from parabens. We made progress
in research into new preservatives and continued replacing
this ingredient.
Eliminate the chemical class phthalates from the portfolio as a
formulation ingredient by July 1, 2010.
TARGET PARTIALLy ACHIEVED - more than 95% of the
product portfolio is free from phthalates. We discontinued
the use of phthalates in PVC packaging in contact with the
products.
Eliminate parabens from the
portfolio by December 1, 2010.
Eliminate phthalates from the
portfolio as a formulation
ingredient by July 1, 2010.
Hight-priority Topics
Commitments for 2009
Commitments for 2010
Education
Quality of
relationships
Quality of
relationships
Implement the Trilhas (Trails) project in 210 Brazilian
municipalities. The project aims to create opportunities for pre-
school children to have more access to children's literature and,
consequently, to the culture of the written language.
TARGET ACHIEVED - The Trilhas Project was implemented
as a result of two years of development and, in 2009 it was
present in 210 new municipalities.
Involve our stakeholders in the determination and monitoring
of Natura's strategic priorities through a process of
engagement.
TARGET ACHIEVED - Natura's strategic priorities were
analyzed by stakeholders during many dialogues in 2009, and
their contributions provided valuable insight for our strategic
planning.
Obtain an 85% favorable response rate by supplier companies
in the Supplier Satisfaction Survey.
TARGET noT ACHIEVED - We obtained a rate of 82%.
General supplier satisfaction increased in relation to 2008 due
mainly to the increase in the satisfaction of production input
suppliers.
Obtain an 85% favorable response
rate from supplier companies.
Hight-priority Topics
Commitments for 2009
Commitments for 2010
Hight-priority Topics
Commitments for 2009
Commitments for 2010
Hight-priority Topics
Commitments for 2009
Commitments for 2010
SOCIETY
DIFFERENT STAKEHOLDERS
SUPPLIERS
Quality of
relationships
There are no formal commitments
on this issue to 2010.
There are no formal commitments
on this issue to 2010.
There are no formal commitments
on this issue to 2010.
background image
29
natura
annual
report
Quality of
relationships
Bidodiversity
Quality of
relationships
Biodiversity
Impact
of Products
Greenhouse
Gases (GHG)
Publish the Relationship Principles with supplier communities.
TARGET PARTIALLy ACHIEVED - The principles are part
of the policy for the sustainable use of biodiversity, which was
published internally. The publication of the policy and relationship
principles also took place informally, in visits made to some
communities. Formal presentation will take place in 2010.
Include two new ingredients from biodiversity in phase III of the
certification process.
TARGET ACHIEVED - Eight new ingredients were included.
The cumulative figure of certified ingredients accounts for the
exclusion of three ingredients that were previously mentioned
as certified as a result of the discontinuation of the products that
used these raw materials and the replacement of the supplier area.
Publish the Relationship Principles with surrounding
communities.
TARGET ACHIEVED - The relationship principles were
discussed and approved by two stakeholder panels created for
these communities.
Begin the implementation of local development plans in three
communities in 2009.
TARGET ACHIEVED - The plans are being implemented in the
Iratapuru, Turvo, and Reca communities.
Increase to 79% the materials in our products that come from
renewable plant sources.
TARGET ACHIEVED - We achieved a rate of 79.2%, the best
rate ever obtained by Natura. This performance is due to the
increase in the sale of products that use a larger quantity of
plant raw materials in their composition.
Obtain a 19% refill rate on items billed
TARGET noT ACHIEVED - We obtained a rate of 18.4%. We
remain committed to education and awareness on the sale of
refills despite the reduction in the sales promotions of these
items in order to balance promotional efforts, a strategy that
has been used since 2008.
Waste
Water
Reduce by 3% relative greenhouse gas emissions.
TARGET ACHIEVED - We were able to exceed the reduction
target of 3% for 2009 and achieved a drop of 5.2% in our
relative GHG emissions, that is, kilograms of CO2e (carbon
dioxide equivalent) per kilo of product billed.
Increase by 44% the resources
allocated to the supplier
communities (made up of supply,
sharing of benefits, funds and
support, image use, training,
certification, and assistance).
Obtain an 18.5% refill rate on
items billed.
Reduce by 6% the total weight of
waste per unit billed.
Reduce by 10% the consumption of
water per unit billed.
Reduce by 2011 our relative GHG
emissions by 33%, based on the
inventory we performed in 2006.
Reduce by 2012 our absolute GHG
emissions related to the 1 and 2
scopes of the GHG Protocol by
10%, based on 2008 emissions.
Hight-priority Topics
Commitments for 2009
Commitments for 2010
Hight-priority Topics
Commitments for 2009
Commitments for 2010
Hight-priority Topics
Commitments for 2009
Commitments for 2010
SUPPLIER COmmUNITIES
SURROUNDING COmmUNITIES
ENVIRONmENT
The relationship quality indicators above have a margin of error that corresponds to a confidence level of 95%.
There are no formal commitments
on this issue to 2010.
There are no formal commitments
on this issue to 2010.
There are no formal commitments
on this issue to 2010.
background image
30
natura
annual
report
NATURA mANAGEmENT SYSTEm
Institutionalizing the Essence of Natura and making it permeate all our decisions: this is the driving
force behind the Natura management System, which we started to develop in 2007 when we
moved from a more centralized management approach to a more integrated model, a process
that gained speed in 2009. The system guides business management by means of three central
pillars: Business Units (BUs) and Regional Units (RUs), which are supported by processes, the
strengthening of the organizational culture, and the development of leaderships.
We divide our activities into seven BUs (four in Brazil and three abroad), which group to-
gether brands and product categories, and eleven RUs. Five RUs are in Brazil: São Paulo city;
interior and coast of São Paulo; South; North and Northeast; and Rio de Janeiro, minas Gerais,
and the midwest. The remaining six are abroad: Argentina, Chile, Peru, Colombia, mexico, and
France. The BUs and RUs provides management with more autonomy and responsibility, so
their decisions are more closely connected to the interests of local stakeholders, in particular
consultants and consumers.
For this system to work, we use an integrated planning methodology, from overall strategy to the
designation of targets and indicators aligned with economic, social, and environmental criteria,
linked to the payment of bonuses and results. We have also created a project office to ensure
that the choices are well implemented.
It is focused on 16 strategic projects, all directly connected to our growth plans for the next few
years, approved by the Board of Directors, and regularly monitored by senior management.
mANAGEmENT BY PROCESS
The Natura management System is supported by 18 macro-processes, which apply to the en-
tire company. They are essential for us to continue to expand our activities with the certainty
that we follow the same procedures wherever we are as we reproduce our value proposal in
different places.
In 2009 we made progress in implementing this approach, turning all Natura formal gatherings
into standardized processes. The challenge for 2010 is to finish the mapping of the other acti-
vities. This new organizational design will allow us to identify, create, and seize opportunities in
different regions and also for different categories of products. We take into consideration the
opportunities and risks of economic, environmental, and social impacts, as well as the develo-
pment of our culture, brand, and relationship with our different stakeholders.
ORGANIZATIONAL CULTURE
We have been working over the past two years to create and strengthen Natura's organiza-
tional culture. This initiative seeks to ensure that the elements of our Essence permeate the
culture in the company's behavior, formal gatherings, symbols, and the way we run our business.
We developed in 2009 the Culture Dialogues, a collaborative process for interpreting our
organizational culture, involving 146 employees from the operating, administrative, sales, and
senior management areas. These professionals will play an essential role in disseminating the
results to other employees. This long-term process is expected to be completed by 2011.
We want this culture to be the foundation of our vision of the future, maintaining and rein-
forcing our Essence. The culture will support the ways our employees act in terms of internal
practices, systems, and formal gatherings, which were reorganized by the new Natura manage-
ment System that was created to support our new growth cycle. In 2010, we will focus on de-
veloping the drivers of our culture, which will define the behaviors expected of individuals and
the alignment of formal gatherings, symbols, systems, and processes of Natura as a whole.
DEVELOPmENT OF LEADERSHIPS
Over the past few years and due to the growth of the business, Natura attracted at least half
of the new management from outside the company. We believe, however, that the success of
our activities depends directly on our leadership being true to our corporate Essence, making
the leadership selection and hiring process even more challenging.
Thus we want to encourage the internal promotion of professionals who are aligned with our
corporate behavior, and we have decided to make a significant investment in the training of lea-
ders inside Natura to support the future development process of the company. The long-term
objective of the program is to train, within five years, leaders who are aligned with our Essence.
background image
31
natura
annual
report
In order to support the new Natura management System, we are working to strengthen our
leadership team, which is governed by the Executive Committee and involves the leaders of
the BUs, RUs, and processes, all of which have greater autonomy and responsibility for results
(further information on page 38).
INNOVATION
Innovation is one of the pillars for achieving sustainable development. The potential for develo-
ping new business approaches is vast and encompasses science and technology research, the
development of new concepts and products, business strategy, and the management system and
new forms of relationship with stakeholders. The Natura management System itself is a driver
of our innovation process. The development of an increasingly agile and decentralized structure,
closer to our stakeholders, and collaborative, helps us maintain a continuously innovative process
to help transform society.
In order to promote continuous product innovation, which involves science and technology, the
generation of new concepts, product development, new models and methods to ensure the
safety of products, and strategies in regulatory issues, we allocated in 2009 R$ 111.8 million, the
equivalent of 2.6% of net revenues.
We launched or relaunched 103 items in a total portfolio of 685 products. In 2009, we maintai-
ned our innovation rate at 67.6%, the same level as in 2008. This rate measures the sales over
the year of the products launched over the past two years. It shows the importance that product
innovation has in Natura's commercial performance.
InnoVATIon InDICAToRS
2007
2008
2009
Investment in inovation (R$ million)
108,4
103,0
111,8
net revenue invested in innovation (%)
3,4
2.8
2,6
number of products launched (un)
183
118
103
Innovation rate
1
(%)
56,8
67,5
67,6
1. Gross revenue arising from products launched or improved over the past 24 months divided by Natura gross revenue for the
past 12 months.
Since 2007 we have been providing an environmental table for our products, giving con-
sumers information on the origin, processing, and percentage of certification of raw mate-
rials, in addition to percentages of use of recycled and recyclable materials and the number
of refills. The table has an educational purpose, contributing to our customers' awareness of
the environmental impacts of products.
The search for renewable raw materials is reflected in the make-up of our products. In 2009,
we exceeded the target of increasing to 79% the total use of renewable plant materials in
our products, ending with a rate of 79.2%.
EnVIRonMEnTAL TABLE
Product
2007
2008
2009
% of renewable plant material
78.8
77.5
79.2
% of natura plant material
1
5.6
8.0
5.2
% of material with origin certification
1 2
13.2
20.3
16.1
Packaging
% of post-consumption recycled material
0.7
0.7
0.7
% of recyclable material
90.6
85.8
85.9
1 The figures for the "natural plant" and "origin certification" indicators for 2008 were recalculated and the data were adjusted
at the beginning of 2009.
2. Origin certification: 99% organic agriculture; 1% forest stewardship.
background image
32
natura
annual
report
In order to promote product innovation, we strive for excellence in:
· Scientific research to identify ingredients from Brazilian biodiversity and the viability
of these new ingredients in the preparation of products with exclusive benefits;
· Scientific fundamentals relating to skin and hair, and deep understanding of consu-
mer needs;
· New models and methods to guarantee the safety of our products and global stra-
tegies for regulatory issues;
· Cosmetic Vigilance System, which monitors possible adverse effects of products,
protects the end consumer, and drives the innovation process;
· Focus on the scientific understanding of controversial elements and replacement
strategy.
· Conceptualization and development of new products that provide a continuous
flow of product launches in both the short and long term;
· New packaging, and other innovative and exclusive ways of providing benefits to
consumers with minimal environmental impact.
These actions promote and support major innovations in the market and in scientific circles,
product approval by consumers, and exclusive proprietary technologies, which are develo-
ped either internally or through a network of strategic partners made up of Brazilian and
foreign science and technology institutions.
This open innovation model began in 2005. Our initial expectation was that by 2012 we
would have 50% of our innovation projects completed by means of external partnerships.
We reached this percentage in 2009, three years before we had expected. The quick ac-
complishment of our target represents the recognition by scientists of our commitment to
innovation and allows a greater flow of innovation to our projects as we promote applied
research in important research centers (learn more on packaging innovations on page 65).
NATURA CAmPUS
our work with partners is part of the natura Campus Technological Innovation Pro-
gram created in 2007, which is supported by the national Council for Scientific and
Technological Development (CnPq), the State of São Paulo Research Support Foun-
dation of (FAPESP) and the Research and Finacing Projects (FInEP). These sponsoring
institutions contribute to the joint financing of projects and provide equipment, scien-
tific scholarships, and research materials for participants.
An important tool of the program is the natura Campus portal (www.natura.net/cam-
pus), launched in 2007. It has been facilitating and strengthening our relationship with the
academic community. In 2009, we received 9,000 monthly visits through the portal. we
currently rely on a database of voluntary participants that brings together 262 research
groups linked to 95 different science and technology institutions. In 2009, we updated the
content of our website on the Internet and disseminated the new technological topics
for virtual interactions. we received 11 new proposals from seven institutions through
the portal, and the contracting of one was approved at the beginning of 2010.
The topics we focused on in 2009 included sustainable technologies, the efficiency and
safety of our products, the well-being and the effect of our products on people's senses.
Every two years we publicly and financially recognize the best project through the natu-
ra Innovation Award, the last being given in 2008, with a new one expected for 2010.
In 2009 we implemented the scientific topic committees, through which we rely on
the participation of experts and researchers to discuss future technological trends.
This is an interesting way for natura to work more closely with members of the
scientific and academic communities.
In 2009, we received R$ 600,000 in financial assistance from FInEP for our Research
and Development program. we also obtained financing of R$ 81.7 million from the
Brazilian national Development Bank (BnDES), intended for investments in infor-
mation technology and innovation, and in industrial and logistics training.
background image
33
natura
annual
report
In its business model, Natura bases its commercial structure on one fundamental pillar: the
relationship dynamics between its Relationship managers (Rms), Natura Consultant Advi-
sers (NCAs) and Consultants (NCs).
The Relationship managers are employees of Natura who make up a group of professio-
nals that have well defined roles in their relationship with the NCAs and NCs. They are
responsible for managing and training the NCAs, providing feedback and training them in
the activity by means of cycle meetings, special events and direct contact in their day-to-day
activities. The Rms also work directly with the Natura consultants, preparing this group in
training dynamics and by means of the Natura meetings: the main in-person activity carried
out every sales cycle.
The role of the NCAs, in turn, is to invite new consultants to the activity, contributing to the
systematic renewal of the sales channel. They should also encourage consultants, showing
them the attractions and income opportunities in each cycle. They guide de NCs in their
activities and on the proper channels to solve possible doubts and problems. Finally, they
should monitor the consultants' business and encourage them to participate in training
course and events organized by Natura.
SALES FORCE
We have streamlined our sales channels through the Internet. Besides making transactions
easier, the virtual channel helps strengthen the relationship with the NCs. We have sought to
open up communications so that our consultants can always be updated on corporate news
and product launches through initiatives such as the Blog Consultoria (Consultancy Blog) ­
(www.blogconsultoria.natura.net), created for our consultants to share information. We also
developed hot sites for product release campaigns, and in 2009 we created the Portal do
Conhecimento (Knowledge Portal), which makes training content available for consultants.
We have innovated and invested strongly in the expansion of the interface with our stakehol-
ders through the Natura Nós (Natura Us) and Natura Conecta (Natura Connection - natu-
raconecta.educartis.com) social networks. These two initiatives use a web 2.0 platform. We
believe that the virtual environment and interaction with our stakeholders can improve our
engagement with these stakeholders and create new relationship opportunities, strengthe-
ning ties and the pace of collective and collaborative future actions.
Natura Nós is a social network similar to the well-known "Facebook" network, but for the
time being accessible only by employees, in-house outsourced workers, and relationship
managers. It has 2,500 members, who interact without Natura's intervention and exchange
messages on different subjects. Natura Conecta is a network open to the participation of
anyone and develops activities that are both created and moderated by Natura to engage
the participants. At the end of 2009, there were 8,042 members in this network. In 2009
Natura Conecta was an important means of increasing stakeholders' participation in virtual
discussions on topics related to sustainability and our business. This was possible through
lectures and roundtables (broadcast by video on the Internet) and wikishops (virtual deba-
tes, with open chat rooms for the participation of whoever is interested). (Learn more on the
chapter Quality of Relationships).
SALES
MANAGER
CONSULTANT
ADVISER
NATURA
CONSULTANT
FINAL
CONSUMER
RELATIONSHIP
MANAGER
background image
34
natura
annual
report
QUALITY OF RELATIONSHIPS
What are the main challenges in the future? How can our value proposal contribute to
a better world? What do we need to do now to build the future we want? Facing these
questions and the moral crisis affecting humanity has led us to a conviction: answers to
these questions must be developed through a collective process of thinking about the
future, focused on the expansion of awareness and on the search for the meaning of
our choices.
The process of relationship management, which is part of the process of sustainability
management, seeks the mutual creation of answers for these questions. It is directly re-
lated to the evolution of our management model, because more and more we want the
contributions of our different stakeholders to help us improve our methods of planning
and managing.
Relationship management consists of two work fronts: one focused on group actions,
aimed at the collective creation of shared solutions by means of dialogue panels with
our stakeholders; and the other, focused on actions aimed at individuals, searching for
self-development and greater awareness. Throughout 2009, we developed both person-
to-person and virtual activities.
In 2009, we shared our wishes with employees, consultants, consumers, shareholders,
surrounding communities, suppliers, and supplier communities, and helped them get to
know us better and interact with us. In this rich learning experience we directly involved
around 1,500 people, 1,120 of whom participated in in-person meetings held in Brazil.
We held nine in-person discussion panels throughout 2009. In November we worked
with representatives of our relationship stakeholders to analyze the company's plans and
Natura's Strategic Planning (NSP), which are both in place. In 2010, requests received
from the different stakeholders in the course of the year will be an important input for
formulating strategic planning for the coming years, so that the opinions of these stakeholders
can be incorporated into our future plans. The main challenges in the area are:
· Expand the potential of collective intelligence by maximizing virtual interaction;
· Develop ways of including "analogical" stakeholders, (who do not use digital
means of communication) especially NCs and NCAs.
We use our Natura Conecta (Natura Connects) social network to identify possible par-
ticipants in person meetings held throughout the year. In 2009, through Conecta, we held
19 wikishops, as well as other virtual activities such as roundtables and forums. In these
virtual debates, we have been managing to map and discuss the topics of interest to
our stakeholders.
To encourage individual growth, we also carried out in 2009 virtual roundtables and in-
person lectures on topics such as Cultural Biology (with Humberto maturana, a Chilean
scientist and Doctor in Biology from Harvard University, and Ximena Dávila, a Chilean
psychologist) and the U Theory (with Otto Scharmer, a professor from the Sloan School
of management at the massachusetts Institute of Technology), which offers ways of col-
lectively creating a future. Throughout 2009 other lectures on topics related to raising
awareness and self-development took place, involving around 850 people in total.
WHO WE
WORK WITH
background image
35
natura
annual
report
DIALOGUE PANELS
Surrounding
communities
20
July/2009
mapping of the problems and opportunities
for improving the relationship and definition
of potential shared commitments.
multistakeholders
43
August/2009
Feedback to stakeholders on the 2008
engagement process, evaluation of the
2008 Annual Report and start of collective
construction of the 2009 report. Discussion
on the desired common future.
Supplier
communities
14
August/2009
mapping of the problems and opportunities
for improving the relationship, definition
of shared commitments and review of
Natura's relationship survey with this
stakeholder group.
Stakeholders
nº of
Month
Key topics
involved
participants
held
___________ __________
________
__________________________________
Specialists in
biodiversity
22
August/2009
Dialogue on potential joint paths for the
Sustainable Use of Biodiversity.
Suppliers
30
September/2009 Review of relationship plan with suppliers
and discussion of the desired future based
on the principles of the Qlicar Program.
Employees
50
October/2009 Pioneer experience by Natura in the
debate on the Gross Domestic Happiness
(GDH) index for companies.
Specialists in
annual reports
10
November/2009 Evaluation of annual reports as business
management instruments and how to
improve Natura Annual Report.
Surrounding
`communities' ­
(2nd)
20
November/2009 Definition of shared action plans and
review of Relationship Principles with the
Surrounding Community.
multistakeholders
48
December/2009 Review of 2010 Natura Strategic Planning
and contributions from stakeholders to the
construction of a desired common future.
Consumers
22
January/2010
Review of Natura's strategy to the three
pillars of products, channel and corporate
behavior.
background image
36
natura
annual
report
Specialists
Specialists
Launch the Wiki Report and give
stakeholders a voice in the Annual Report.
Publish the list of Natura's majority shareholders
The Wiki Report was launched in 2009. The
Natura We Share section of the chapter entitled
What We Aim For presents the voice of the
stakeholders who participated in the debates on
the Natura Conecta networking platform.
The list of Natura's majority shareholders
can be found in the Shareholders section of
the chapter entitled Who We Work With.
Brazilian Foundation for
Sustainable Development
(FBDS) and SustainAbility
Explain the governance
structure for sustainability
issues.
The information is included in the
Governance section of the chapter entitled
Our moment.
Stakeholders
Suggested topics
Responses from natura
____________________
____________________________________
__________________________________
FBDS - SustainAbility
Publish the results of stakeholder
engagement (opinions and suggestions).
We have included, together with the six
high-priority sustainability topics, tables with
the principal contributions from stakeholders
on each topic.
Employees and NCAs
Information on the consolidation of the
Natura Consultant Advisers model.
This issue was addressed in the chapter Who
We Work With, under Consultants and NCAs.
Consultants and NCAs,
Shareholders, Suppliers,
Employees and Consumers
Address the Non-Service Rate and Natura's
position on matters such as out-of-stock
products and delays in delivery.
Natura's position on these matters is
available in the box entitled Quality of
Services, in the chapter Who We Work With.
Shareholders
Importance of training leaders in the
company's culture.
This is a strategic matter for Natura and it
is tackled twice in the report: in the Natura
management System section of the chapter
What We Aim For, and under Employees, in
the chapter Who We Work With.
Suppliers
This information is contained in the Suppliers
section of the chapter Who We Work With.
Data on dialogue with suppliers
and on the feedback from Qlicar
supplier development program.
Employees
Employees and
Consultants
Natura's position on issues such as the
murumuru Case and the Urban Installations
exhibition, which stirred up a controversy in the
city of São Paulo.
Information on Natura's Houses.
This data can be found in the Consultants
and NCAs section in the chapter Who We
Work With.
The murumuru Case is dealt with in the
Supplier Communities section, and Natura's
position on the exhibition that breached
São Paulo's Clean City Law can be found in
the Consumers section, both in the chapter
Who We Work With.
In the table below, we present the main topics that our stakeholders wanted to see addressed
in the 2009 Annual Report, and the responses from Natura:
background image
37
natura
annual
report
To encourage individual growth, we also carried out in 2009 virtual roundtables and in-person
lectures on topics such as Cultural Biology (with Humberto maturana, a Chilean scientist and
Doctor in Biology from Harvard University, and Ximena Dávila, a Chilean psychologist) and
the U Theory (with Otto Scharmer ­ a professor from the Sloan School of management at
the massachusetts Institute of Technology), which offers ways of collectively creating a future.
Throughout 2009 other lectures on topics related to raising awareness and self-development
took place, involving around 850 people in total.
OmBUDSmAN'S OFFICE
The Natura Ombudsman's Office was created in 2006 to establish a dialogue channel be-
tween the company and its stakeholders. It helps us ensure compliance with the relationship
principles, which translate our Essence into daily activities. It also allows us to identify oppor-
tunities to improve our processes, policies, and relationships, based on the requests received.
The Ombudsman's Office is linked to Natura's Office of the Senior Vice President of Organi-
zational Development and Sustainability.
Through this channel comments are received, analyzed, and forwarded to the manager responsi-
ble. The Ombudsman's Office directly contributes to the search for a solution to every case.
The Ombudsman's Office receives complaints of violations of conduct, such as discrim-ination,
corruption, harassment, or other critical issues. These are analyzed with the departments in
charge. In Natura's history, we have never had a proven discrimination complaint. All of the
complaints that represent possible violations are reported to the Ethics Committee, in which
the company's CEO participates. When necessary, the support of the Internal Audit depart-
ment is requested (learn more on page 16). Last year, the volume of calls to the Ombudsman's
Office grew 31% compared to 2008, a cumulative increase of 69% since 2007.
This channel serves the internal stakeholders from the operations in Brazil and other Latin
American countries, suppliers (Brazil), and consultants related to the Brazilian operations in a
pilot project for sales managers in São Paulo.
ToTAL nUMBER oF CoMPLAInS RECEIVED
By THE oMBUDSMAn´S oFFICE
2007
2008
2009
Internal Stakeholders - Brazil
649
783
1.096
Internal Stakeholders - Latin America
29¹
26
13
Suppliers Brazil
12²
19
13
Consultants Brazil
3
n.a.
52
34
Total
690
880
1,156
1. Data related to the period from October to December 2007 (launch of the Ombudsman's Office: October 2007).
2. Data related to the period from May to December 2007 (launch of the Ombudsman's Office: May 2007).
3. Data related to the pilot project for a sales management office in Greater São Paulo.
The Ombudsman's Office carries out a satisfaction survey on the services provided by
the channel with employees from its Brazilian operations. We reached a 98% level of satis-
faction, a result we consider statistically equivalent to the figure in 2008 (96%).
(Graph 1)
In July 2009, we began a satisfaction survey on the Ombudsman's Office with the NCs and consu-
mers, a process still in the implementation phase, with results expected to be available in 2010.
The growth in complaints shown in 2009 was strongly driven by requests from internal
stakeholders in Brazil, which totaled 1,096, a growth of 40% in comparison with the previous
year. Of these, 81% were related to technical questions, such as policies, processes, standards,
procedures, and infrastructure, and 19% to attitudes and behaviors.
People management was the topic most mentioned by the internal stakeholders in Brazil.
The majority of the comments referred to benefits, such as private transportation and me-
dical assistance. The complaints resulted in important gains for employees, such as improve-
ments in the health insurance plan and the implementation of 17 new charter bus lines.
1. SATISFACTIon wITH THE
oMBUDSMAn'S oFFICE
CHAnnEL
1
97%
96%
98%
2007
2008
2009
1. The percentages refer to the positive
replies to the question: "are you satisfied
with this dialogue channel?"
background image
38
natura
annual
report
INTERNAL STAKEHOLDERS IN BRAZIL
The growth in the number of contacts in 2009 was strongly driven by requests from internal
stakeholders in Brazil, which totaled 1,096, a growth of 40% in comparison with the previous
year. Of these, 81% were related to technical questions, such as policies, processes, standards,
procedures, and infrastructure, and 19% to attitudes and behaviors.
(Graph 2)
We noted a reduction in the number of suggestions and queries, at the same time as an incre-
ase in the number of criticisms. This demonstrates that the Ombudsman's Office is establishing
itself as a channel for handling critical topics, such as the misuse of resources, moral or sexual
harassment, illegal business transactions and arbitrary management, among others.
Of all processes, people management was the most criticized by the Brazilian internal stakehol-
ders. The majority of the contacts referred to benefits, such as transportation and health care.
Based on this information, we could offer our employees some important improvements, such
as better health insurance and 17 new chartered bus routes.
Of the complaints received last year, 60% were proven and 10% were still being analyzed in
march 2010. Of the contacts made by the internal stakeholders in Brazil, 40% came from the
operational staff, who also represent 40% of all Natura's employees in Brazil. The group that
least used the services of the Ombudsman's Office was the sales staff, who represented just
4% of all the contacts but correspond to 15% of the company's employees.
INTERNAL STAKEHOLDERS IN LATIN AmERICA
In the other operations in Latin America (Latam), the number of contacts received from
internal stakeholders fell 50%, since no activities were developed to support the channel. Ne-
vertheless, of all the contacts made by the Latam internal stakeholders, 64% were related to
complaints. In other words, although the number of contacts decreased, the topics heard by
the Ombudsman's Office unmistakably needed to be analyzed.
CONSULTANTS AND NCAS
The service model of the Ombudsman's Office for consultants still needs to be approved.
Although a pilot project has been developed with a group of 10,000 consultants, we will only
resume the process of adjusting and implementing the channel when we have achieved a
better performance in the service offered to this group.
Having said that, the Ombudsman's Office works in partnership with the company's service
division, receiving critical complaints (related to ethical misconduct, behavioral matters or un-
resolved technical problems) via Natura's Service Center. In 2008, we handled 687 cases, and
in 2009 this number rose to 6,613, since behavioral complaints were not received in 2008. This
project has brought us some important insights for the construction of the Ombudsman's
Office´s model still to be established for this public.
SUPPLIERS
The Ombudsman's Office has been available to suppliers since may 2007. Of the 13 con-
tacts received from suppliers in 2009, 50% dealt with critical process issues and 50% were
complaints (behavioral matters or ethical misconduct). The topics included the competitive
process, the selection of suppliers and contract management, which covers the negotiating
and payment stages. The fact that half the contacts made by suppliers were related to ethical
misconduct, as was the case with internal stakeholders in Latin America, is an indication of the
consolidation of the reliability of the channel.
CONSUmERS
Just like for our consultants, the Ombudsman's Office is not available for our consumers yet.
But we have also conducted a similar project to find solutions to critical complaints received
through Natura's Customer Service Center. Accordingly, in 2009 we handled 2,523 critical
complaints from this stakeholder group.
2. PRoFILE oF THE ConTACTS
By BRAzILIAn InTERnAL
STAKEHoLDERS
81%
Criticisms
Complains/ethical misconducts
Total contacts 1,096
Queries, compliments
and sugestions
17%
2%
background image
39
natura
annual
report
EmPLOYEES
The high-quality relationships we seek to maintain internally have led to rapid improve-
ments in labor relations over the past two years. Adherence to Natura's proposals, and
the trust in its value proposal and in the relationship history itself were some of the con-
tributing factors. However, there is room for improvement, and we worked hard on this
in 2009.
Consistent with our strategy for implementing a robust management system at Natura,
we initially focused our efforts on the leadership training and development program, to
which the largest portion of our investments were allocated.
We also worked directly on one of the weaknesses identified in 2008 and sought, by
means of the RenovAção (Renewal) project, to improve our relationship with operational
employees on a sustained and structured basis.
The number of employees, which was reduced in 2008 as a result of the management res-
tructuring process, increased again in 2009 to meet business growth demands, maintaining
levels of productivity and efficiency
nUMBER oF nATURA EMPLoyEES
2007
2008
2009
Brazil
4,798
4,386
4,821
Argentina
276
306
331
Chile
179
222
264
Mexico
259
277
335
Peru
229
290
296
Colombia
79
135
168
Venezuela
1
63
50
n.a
France
36
32
45
Total
5,919
5,698
6,260
Other employment contracts
2
Interns
73
66
47
Temporary workers
3
151
445
340
In-House outsourced workers
4
1,170
1,787
1,310
1. Operations in Venezuela were discontinued in August 2009. In April, the Venezuelan operations had 52 employees.
2. Includes operations in Brazil, Argentina, Chile, Colombia, Peru, and Mexico.
3. Temporary workers are those hired for a pre-determined period of time and registered in accordance with labor laws by em-
ployment agencies and subordinated to these agencies. In Brazil, we counted those temporary workers who were in the company
on December 10, which is the date payrolls are closed..
4. Outsourced employees are the suppliers who are assigned to the company's plants.
This change in people management led to a significant increase in the main indicator that me-
asures the quality of relationships with employees: the Natura Organizational Climate survey.
The overall favorable responses, covering all of our operations, increased two percentage
points to 74%, placing us for the first time among the 10 best companies in employee
climate management, according to the specialized consultancy Hay Group. Our target for
2010 is 77%.
In its international operations, Natura's organizational climate remained, on average, sta-
ble at 79%, with a notable improvement by Colombia, which showed an increase of four
percentage points to 88% of favorable responses.
In Brazil, a 72% rate of favorable responses exceeded the climate target of 71% establi-
shed for 2009. This result was due mainly to the increase of eight percentage points in
favorable responses by the operational staff as a result of the RenovAção Project (learn
more on page 38). The topics that showed an improvement from 2008 were Leadership,
which was considered a point needing attention in the previous year; Engagement, Ethics,
Compensation and Benefits; and Sustainable Development and Training, which showed
outstanding results when compared to the Brazilian market's best practices.
Despite the improvement in the organizational climate with all stakeholders, we identified op-
portunities for improvement in aspects related to quality of life, decision-making processes, and
relationships, which will be our focus in 2010. However, there is evidence that organizational
changes such as the implementation of the Natura management System, focused on processes,
culture, and leadership, have positively affected the results of the survey.
background image
40
natura
annual
report
oRGAnIzATIonAL CLIMATE SURVEy ­ FAVoRABLE RESPonSES (%)
1
2007
2008
2009
Brazil
71
69
72
Argentina
69
80
77
Peru
80
77
78
Chile
72
83
77
Mexico
83
85
84
France
56
60
75
Colombia
86
84
88
Venezuela
2
61
17
n.a
natura
72
72
74
1. Equivalent to the percentage of employees who checked 4 or 5 (top 2 boxes) on a score of 0 to 5 points.
2. Operations in Venezuela were discontinued in August 2009.
GROSS NATIONAL HAPPINESS
For a company like natura, which seeks to widely understand its impacts on society,
the standard measurements seem to be limited. Therefore, we decided to internally
discuss the application of the Gross Domestic Happiness (GDH) index, which inclu-
des a number of elements that are considered intangible but that are in line with our
Essence. The GDH is based on the belief that the true development level of a society
is best measured by criteria that go beyond material wealth indicators.
The GnH was created in Bhutan to measure the well-being of that country and
has nine levels: living standards; good governance; education; health; community
vitality; ecology; culture; time use; and psychological well-being.
we gathered 50 volunteer employees to test a pioneering form of the GnH in the
corporate environment. This work was developed in partnership with the Instituto
Visão Futuro (Future Vision Institute), which is responsible for disseminating the
principles of GnH in Brazil. our objective for 2010 is to integrate this work with
the Cultura (Culture) Program. As a result, a larger number of employees will be
able to experience the process of GnH application at natura.
TURNOVER
Another positive fact in 2009 was the considerable drop in our turnover rate, which in the
Brazilian operations was 7.5%, compared to 12.4% in 2008. There was also a reduction in
our international operations, except for Colombia, where we carried out an internal restruc-
turing process, and in Peru, where some employees were replaced as a result of a strategic
corporate decision.
Natura made 65% of the replacements of the total number of employees who left the
company. In absolute figures, the turnover rate was higher among operational staff, but in
percentage terms this number was higher among the administrative personnel.
EMPLoyEE TURnoVER RATE (%)
1
2007
2008
2009
Brazil
9.0
12.4
7.5
Argentina
16.1
16.6
12.5
Chile
20.4
13.9
13.6
Mexico
56.5
42.7
25.3
Peru
17.2
12.2
16.6
France
4.0
35.0
15.5
Venezuela¹
43.5
31.9
n.a
Colombia
4.6
35.4
39.7
1. Although the turnover rate has not been considered relevant in the exercise of materiality, we decided to continue releasing this
data for the countries where we operate, since the indicator reflects the significant organizational changes that have occurred
in recent years, both in the Brazilian and international operations. Internally, we also monitor turnover by length of service and
salary group.
2. Operations in Venezuela were discontinued in August 2009. Until April, the turnover rate was 11.4%. .
background image
41
natura
annual
report
ATTRACTION AND ENGAGEmENT
Natura's main, long-term objective is to train its professionals internally and, therefore, bring
them in line with its Essence and organizational culture. For this reason, we started a re-
formulation in the talent attraction and recruitment process. We started in 2009 with the
trainee program, and in 2010 we will extend this to the other groups, focusing on promotion
opportunities for our employees.
To support the expansion of our business, we carried out in 2009 a broad trainee selection
process, which was remodeled to meet the demand of our leadership-training program.
Called Next Leaders, the selection process was based on the search for diversity and the
identification of candidates who share our beliefs and world vision, and for this reason we
did not use Natura's name at first. We did not make any requirements regarding college
graduation or fluency in languages and increased the age limit to 28 years old. We used the
Natura Conecta social network for both disseminating the program and for conducting the
first stages of selection processes. Thirty-four employees were selected for the program,
which is expected to last two years.
The number of interns at the company, meanwhile, fell 28.8% in 2009, since we decided not
to conduct a selection process for this type of employment contract. Instead, positions were
filled on an individual basis. Our intern program is being reviewed, and a new and reinvigo-
rated selection process will begin in 2010, since we understand the importance of creating
opportunities in Natura for young undergraduates.
Generally speaking, we try to promote internal recruiting through the Internal Job Oppor-
tunities Program. Our rate of internal recruitment, however, fell by 10 percentage points in
2009 compared to the previous year. This occurred for two main reasons: the reformulation
of the desired profile for management positions; and a reduction in the number of eligible
employees for the Internal Job Opportunities Program ­ 75% of our managers have held
their positions for less then two years, meaning they have not completed their probation
period yet. We recognize the need for adjusting the program, and we hope to implement
the necessary changes in 2010.
Natura does not have an official staff recruitment policy for its international operations. Ho-
wever, in all the countries where we operate, the majority of the employees are nationals,
since we understand the importance of our staff having a thorough understanding of the
regional context. This is why we have structured our activities into RUs and also established
the base of our international operations in Buenos Aires, Argentina.
nUMBER oF CAnDIDATES FoR EACH PoSITIon AT nATURA (BRAzILIAn oPERATIonS)
2007
2008
2009
Candidates for the trainee selection process
28,742
n.a
13,298
Candidates for the intern selection process
14,639
n.a
n.a
Candidates for other selection processes
46,686
21,441
132,062
Positions offered/filled by employees (%)
64
71
61
When recruiting staff for our international operations, we understand that we should strike
a balance between people who know Natura and people who know the local market. This
is why we hire people from the respective countries, but also Brazilians. In Chile and Colom-
bia, for example, 50% of the members of senior management were recruited from the local
community in 2009. In mexico, meanwhile, the figure was 20%. Although the percentages may
seem high, these changes in international management personnel are fairly negligible, referring
to just one employee joining or leaving the company.
MEMBERS oF THE SEnIoR MAnAGEMEnT RECRUITED FRoM THE LoCAL CoMMUnITy
1
(%)
2007
2008
2009
Argentina
33
33
33
Chile
17
50
50
Colombia
100
0
50
France
2
n.d
0
n.d
Mexico
71
50
20
Peru
33
33
0
Venezuela
3
40
60
n.a
1. Senior management is staff from the Salary Groups 19 and higher.
2. In France, in 2007 and 2009, this indicator was not tracked.
3. Operations in Venezuela were discontinued in August 2009..
background image
42
natura
annual
report
Broadly speaking, when we give feedback on performance to our staff, 100% of employees
who have been at the company at least for three months, in Brazil, receive regular perfor-
mance appraisals and career development assessments. In 2009, we opted for a simplified
assessment and an analysis of the results of 2008 based on competencies in four areas: self-
knowledge, relationship, protagonism and sustainability.
However, we felt the need to improve this evaluation system. In 2010, therefore, we are
going to implement a new model to measure the performance of our employees and im-
prove the feedback process. The changes will follow guidelines designed to better tailor and
restructure the competencies, so they are more in line with the values of Natura.
In 2009, we also implemented a pilot program involving 80 managers, called Engagement of
Employees. We used an innovative human resources methodology we call the 360-degree
cycle. managers can evaluate their life purposes inside and outside the company. Based on
this self-analysis, added to external evaluations, we can start to outline together with them,
in a collaborative manner, plans for their future inside Natura. In December 2009, the project
was expanded to include Natura's entire leadership staff, which consists of 448 leaders
throughout our business operations.
In virtue of innovative projects such as this, Natura won the 1st place in Latin America and
the 11th place among the 25 best companies from around the world in leadership develop-
ment, according to the survey "Top Companies for Leaders", developed by the international
human resources consulting firm Hewitt Associates in 2009. The survey evaluates criteria
such as the consistency and alignment of leadership programs; the commitment of the senior
leadership to the program; how well it fits the culture ; the high standards proposed to the
leaders; the vision of the future and innovation; as well as the coherence to ethical values
and results. In 2009, 537 companies accepted the consulting firm's invitation, responded to
the questionnaires of the consulting firm and allowed their leaders to be interviewed. 87 of
these companies were from Brazil.
R
eNoV
A
ção (RENEWAL)
The quality of the relationship with our plants' operational staff presented structural ele-
ments of dissatisfaction that our leaders needed to address. To solve the problem, we de-
veloped the RenovAção project, which involved 2,515 employees from the operating areas
in direct dialogues with senior management. This contact helped us design a structured
plan with clear objectives to be achieved within five years: to increase the level of favorable
responses from this group to 80% and to have at least 5% of Natura's leaders coming from
these stakeholders. To this end, we need to prepare in 2010 a career plan that creates real
possibilities for the promotion, inclusion, and development of our employees in the opera-
tional areas.
Some initiatives have already started to meet the needs of these stakeholders. We have
established mechanisms to identify and train leaders within the operating units, and we have
also implemented new means of internal communication.
TRAINING
The preservation of our Beliefs and Values in Natura's new growth cycle is closely related
to our strategy for training leaders to become managers, vice presidents, and senior vice
presidents. For this reason, in 2009 we started the Leadership Development Program, which
is intended over five years to find 120% of our successors and validate development plans
for all critical succession positions in the short, medium, and long terms. Our challenge will
increasingly be to fill positions with leaders trained within Natura itself who champion our
principles. The new program includes our operations in Brazil and abroad. It enhances the
Leader Training Program, which existed until mid-2009 and trained 28 employees over the
past two years. In 2010 we intend to extend the same approach we adopted for training
leaders to the other stakeholders of Natura.
In 2009, we exceeded the target of investing 3.5% of the total payroll of the Brazilian opera-
tions in employees' training. During the year, investment in education for these stakeholders
totaled R$ 20.2 million, the equivalent to 4.4% of payroll. This was 43.8% higher than in 2008,
benefiting a total of 4,714 employees.
Among the training courses provided, there were strategic workshops on our commercial model
aimed at the consolidation of the Regional Units and Business Units. These courses were also
provided to the employees of foreign operations, where we also invested in the development of
leaders and the training of internal multipliers to train others for their functions.
background image
43
natura
annual
report
most of the training courses provided to management and administrative employees, including
the sales force, were focused on team development. Investments in training totaled R$ 2,24
million in our foreign operations, which represented an increase, except for Argentina and
France. In the other Latin American countries, investments were focused on the program for
training the sales force and employees of the administrative, marketing and operational areas.
In 2009 we addressed topics related to human rights, environment and social responsibility
during the Integração Nossa Essência (Our Essence Integration Program) program, which was
aimed at all employees (including outsourced workers) and during lectures titled "Você tem
fome de quê?" (What do you crave?), which were open to all employees. By means of the
Integração Nossa Essência program, we provided 3,373 hours of training last year.
Although there are no specific training courses on issues related to corruption and human
rights, in the Integração Nossa Essência program, the new employees are taught Natura's rela-
tionship principles, which are inspired by the Declaration of Human Rights. By means of these
principles, we take an official stand against corruption, forbidding behaviors that can be charac-
terized as corruption, bribery or a kickback. In 2009, we did not develop specific programs on
human rights for the security personnel as we had expected.
InVESTMEnTS In EDUCATIon AnD TRAInInG oF EMPLoyEES (R$ THoUSAnDS)
1
operation
2007
2008
2009
Brazil²
15,951.9
14,062.0
20,221.3
Argentina
86,9
162,5
103,3
Chile
109, 7
82,7
164,6
Mexico
416,7
496,8
1,567.1
Venezuela3
n.d
98,1
n.a
Peru
31,4
74,9
222,7
Colombia
19,5
87,1
130,0
France
71,1
73,4
51,0
Total
22,460.1
15,137.6
16,686.1
1. The figures in Brazilian reais were translated into US dollars at US$ 1: 2007 - R$ 1.9480; 2008 - R$ 1.8346; 2009 - R
2. Investments in Brazil include the training of the sales force (sales managers and relationship managers).
3. Operations in Venezuela were discontinued in August 2009..
In 2009, we recorded an average of 82 hours in training per employee, 12.8% lower than the
94 hours seen in 2008. This reduction is transitory, as we decided to focus on the training of
leaders and structure a more comprehensive program for 2010. For 2010, our target is to
provide an average of 100 hours of training per employee. For 2010, our target is to provide
an average of 100 hours of training per employee.
AVERAGE HoURS oF TRAInInG PER yEAR PER EMPLoyEE, PER FUnCTIonAL CATEGoRy In
BRAzILIAn oPERATIonS
1
2007
2008
2009
Production
120
105
86
Administrative
92
90
79
Managers
90
68
61
Executives
55
9
78
Total²
105
94
82
1. This indicator includes the training of the sales force (sales managers and relationship managers).
2. It includes total hours of all levels divided by total employees in December of the respective year.
We also had the Natura Educação (Natura Education) Program by means of which scholar-
ships are granted to our employees and their families to encourage continuous education.
In 2009 investments in this program grew 16.7% compared with the previous year and the
number of scholarships granted grew 29.2%.
BRAzILIAn oPERATIonS ­ nATURA EDUCAção PRoGRAM¹
2007
2008
2009
Scholarships granted
568
473
611
Scholarships granted/enrollments (%)
44.4
32.6
48.3
Amount invested in the natura Educação
program (R$ thousands)
974
720
841
1. All employees enrolled and awarded with the scholarships are considered to have been served by the program.
background image
44
natura
annual
report
nATURA EDUCAção PRoGRAM - CoURSES ATTEnDED By EMPLoyEES oR THEIR FAMILy
MEMBERS THAT ARE ToTALLy oR PARTIALLy SUBSIDIzED By nATURA
2007
2008
2009
Technical/vocational
83
48
77
Languages
142
118
117
Preparatory course for College
EntranceExamination (Vestibular)
9
11
6
University
234
219
292
MBA and post-graduate
100
77
119
CORPORATE VOLUNTEER WORK
Over the years, we have been encouraging the participation of our employees in corporate
volunteer work program in order to disseminate the importance of social engagement and
promote the relationship of our employees with the surrounding communities of Cajamar and
Itapecerica da Serra, making them aware of their social realities.
The absolute number of employees involved in these activities, however, dropped from 57 in
2008 to 52 in 2009. On the other hand, 646 people have benefited from the Sala de Leitura
(Reading Room) and Orientação Profissional (Professional Guidance) programs. This is still a
challenge that we have to face. In order to increase participation and adopt a suggestion made
by the employees themselves, we are opening volunteer work fronts on weekends as well.
DIVERSITY
We value diversity and consider it to be a basic element in the development of a fairer and
more sustainable society. However, we believe that the reality in Brazil ­ and Latin America
­ poses a challenge of inclusion. We are a historically diverse people, mainly mixed-race and
syncretized, but we face large barriers to social inclusion.
Some of our main projects in 2009, such as the RenovAção project and the selection of
employees, are based on opening opportunities. In the case of trainees, for example, we
gathered participants from different ages, universities, and locations in Brazil, by means of a
virtual process that broke the paradigms of conventional hiring programs in a clear exercise of
inclusion and respect for differences.
In 2009, we saw an increase in the number of women in positions of leadership at Natura.
Although it is still disproportional, the participation of women in vice president and senior vice
president positions grew from 3 in 2008 to 6 professionals in 2009, compared to the partici-
pation of 35 men in these positions.
We currently have a program to include disabled people in the commercial area in positions such
as marketing assistant, and in customer service and sales. Through our regional units structure, we
are mapping new jobs and opportunities to include disabled people in different regions in Brazil.
ConTRACTInG AnD TRAInInG oF DISABLED PEoPLE
Brazilian operations
2007
2008
2009
number of disabled employees
251
237
236
Disabled people in relation to total employees (%)
5.2
5.4
5.0
number of disabled people trained in the Competências
Básicas Profissionais (Basic Professional Skills) program
49
39
67
We believe that the inclusion of these people not only takes place through contracting but
also through interaction between the company, the society and other employees. In 2009 we
trained 67 people within the Competências Básicas Profissionais program, which was develo-
ped in partnership with the Favalli Institute. We also have the Padrinhos em Libras (Sponsors
in Brazilian Sign Language ­ Libras) program in which 43 employees are being trained in sign
language to improve communication and inclusion of the hearing impaired.
DIVERSITy
2007
2008
2009
Total employees in Brazil
4,793
4,386
4,821
Disabled employees (%)
In relation to the total number of employees (%)
5.2
5.4
5.0
In management positions in relation to total
management positions (%)
0,0
0,0
0,0
In executive positions in relation to total
executive positions (%)
0,0
0,0
0,0
background image
45
natura
annual
report
Women
In relation to the total number of employees (%)
63.9
63.7
60.5
In management positions in relation to total
management positions (%)
53.4
52.3
51.9
In executive positions in relation to total
executive positions (%)
20.0
19.2
17.6
Black and multiracial women
In relation to the total number of female employees (%) nA
nA
nA
In management positions in relation to total number
of women in management positions (%)
nA
nA
nA
In executive positions in relation to total number
of women in executive positions (%)
nA
nA
nA
Black and multiracial men
In relation to the total number of male employees (%)
nA
nA
nA
In management positions in relation to total number
of men in management positions (%)
nA
nA
nA
In executive positions in relation to total number
of men in executive positions (%)
nA
nA
nA
Above 45 years of age
In relation to the total number of employees (%)
9.1
10.5
12.2
In management positions in relation to total
management positions (%)
7.5
8.2
11.3
In executive positions in relation to total
executive positions (%)
26.7
38.5
35.3
In our diversity indicator, data related to comparison by race is still being consolidated; we star-
ted a reference file update campaign at the beginning of 2009, and its results will be reflected
in the 2010 data.
COmPENSATION
The compensation practices adopted by Natura follow a corporate policy with guidelines that
are similar in all countries in which the company operates. However, there is room for adjusting
these practices to local markets.
To determine the salaries of our employees, we compare our salary grid with reference markets,
such as competitors in the consumer goods segment, Brazilian multinational companies, listed
companies, and companies that have compensation practices that are similar to those of Natura.
In accordance with the annual survey carried out by the consultancy Hay Group on several func-
tions and groups of employees, Natura maintains a higher average salary than the market.
We still need to make progress towards salary equality between men and women who have the
same positions, whether in the production, administrative, management, or executive areas. This
is a focus of attention, and solutions should be aligned with the people management processes.
By means of the Caminhos (Paths) Project, we will make performance analysis of employees who
are in the same positions with different salaries in order to adjust salaries over time.
In 2009 compensation in Argentina grew due to a collective bargaining agreement. The other
operations reflect a salary table adjustment or increase in the local minimum wage. In the
Benevides unit, on the other hand, where market compensation is lower than the average in
the Brazilian market, the difference caused a reduction in the proportion between the lowest
salary paid by Natura and the minimum wage.
MARKET PRESEnCE ­ PRoPoRTIon oF THE LowEST SALARy CoMPARED To THE LoCAL
MInIMUM wAGE, PER oPERATIon
2007
2008
2009
Brazil
1.9 1.2
1.1
Argentina
1.1 1.5
2.0
Chile
1.5 1.4
1.3
Peru
1.6 1.6
1.7
Mexico
2.8 4.6
4.8
Colombia
1.5 1.1
1.6
Venezuela¹
1.9 1.9
n.a
France
1.3 1.1
1.5
1. Operations in Venezuela were discontinued in August 2009. Until April, the variation in the proportion of salary was 1.9.
background image
46
natura
annual
report
Also, in the compensation field, in line with the growth and internationalization of Natura, we
have an expatriation program that seeks to strengthen the quality relationships we have with
our expatriated employees and their families, providing a package of differentiated services and
benefits, as well as a career development opportunity. We currently have approximately 18
expatriated employees in the operations in Chile, Argentina, Peru, mexico, France and Colombia.
Our differential in relation to the market is the Variable Compensation model, which is adapted
to the characteristics of each group of employees, such as form of payment, targets and amounts.
The distribution limit for the non-executive employees is 3% of Operating Income. In 2009, we
paid professionals from the operational area, on average, three to four additional monthly salaries
a year.
In 2009, collective bargaining agreements provided our employees from the Brazilian operations
with an average salary increase of 6%. The female employees from the administrative area, which
includes the sales force ­ relationship managers and sales managers ­ recorded an increase hi-
gher than the collective bargaining agreement due to the sales bonuses obtained throughout the
year, a growth of 23% compared to 2008.
SALARy PRoFILE (R$) ­ AVERAGE MonTHLy SALARy In BRAzILIAn oPERATIonS.
1 2
2007
2008
2009
Women - total (R$)
3,815.5
4,352.0
4,755.1
Average monthly salary in production positions
1,009.3
1,104.5
1,150.0
Average monthly salary in administrative positions
4,458.9
5,287.9
6,137.4
Average monthly salary in management positions
11,307.3
12,341.1
13,105.1
Average monthly salary in executive positions
28,284.5
31,185.9
34,309.8
Men - total (R$)
3,291.2
3,550.3
3,574.3
Average monthly salary in production positions
1,235.1
1,352.5
1,362.3
Average monthly salary in administrative positions
4,188.4
4,656.4
4,621.5
Average monthly salary in management positions
11,613.2
12,906.9
13,886.2
Average monthly salary in executive positions
32,156.4
38,788.7
42,162.5
Black and multiracial women (R$)
NA
NA
NA
Average monthly salary in production positions
nA
nA
nA
Average monthly salary in administrative positions
nA
nA
nA
Average monthly salary in management positions
nA
nA
nA
Average monthly salary in executive positions
nA
nA
nA
Non-black and non-multiracial women (R$)
NA
NA
NA
Average monthly salary in production positions
nA
nA
nA
Average monthly salary in administrative positions
nA
nA
nA
Average monthly salary in management positions
nA
nA
nA
Average monthly salary in executive positions
nA
nA
nA
Black and multiracial men (R$)
NA
NA
NA
Average monthly salary in production positions
nA
nA
nA
Average monthly salary in administrative positions
nA
nA
nA
Average monthly salary in management positions
nA
nA
nA
Average monthly salary in executive positions
nA
nA
nA
Non-black and non-multiracial men (R$)
NA
NA
NA
Average monthly salary in production positions
nA
nA
nA
Average monthly salary in administrative positions
nA
nA
nA
Average monthly salary in management positions
nA
nA
nA
Average monthly salary in executive positions
nA
nA
nA
Over 45 years of age (R$)
6,729.6
7,540.2
8,067.5
Average monthly salary in production positions
1,547.6
1,676.3
1,712.7
Average monthly salary in administrative positions
7,021.3
8,161.9
8,961.0
Average monthly salary in management positions
14,809.8
15,198.0
17,437.9
Average monthly salary in executive positions
36,459.0
38,395.8
38,242.9
background image
47
natura
annual
report
2007
2008
2009
Up to 45 years of age (R$)
3,317.4
3,653.4
3,850.4
Average monthly salary in production positions
1,110.5
1,213.6
1,240.7
Average monthly salary in administrative positions
4,016.6
4,652.1
5,266.5
Average monthly salary in management positions
11,177.3
12,379.8
13,068.4
Average monthly salary in executive positions
29,535.9
36,658.4
41,570.5
1. The calculation does not take into consideration the payment of the short-term incentive (profit sharing).
2. For the purpose of the calculation of this indicator, the bonuses paid to sales managers and promoters were considered.
When the sales force employees are placed in their categories, this improves the average women's salaries due to the bonuses,
excluding production jobs.
.
In Natura's operations in Brazil, the collective bargaining agreements signed with the unions
include all our employees, as determined by legislation. In the foreign operations, this matter
follows the laws of the countries where we operate.
Natura appreciates and recognizes the right of employees to be represented by their respec-
tive unions. We do not have formal processes for the identification of operations in which the
right to exercise freedom of association and collective bargaining may be at risk. However, we
place the Natura Ombudsman's Office at the disposal of our employees to receive any type
of complaint (learn more in Quality of Relationships). In the Brazilian operations, the relationship
with unions is coordinated by our Human Resources department by means of meetings to
discuss agendas that are set in advance with union representatives.
At Natura, although procedures for the prior notification of operational changes are not
specified in the collective bargaining agreements, we have always tried to communicate such
changes in advance and, therefore, provide clarifications.
We have the Poupança Incentivada (Subsidized Savings Account) Program, a benefit offered
to all our employees to encourage a culture of saving money. All employee decides on the
amount they wish to contribute from a scale from 1% to 5% of their salary, and Natura con-
tributes with 60% on the contribution made by the employee, up until a maximum monthly
salary of R$ 13,129.00. Except for the relationship managers and sales managers, who receive
bonuses in every 12-day cycle in proportion to the results obtained, all our employees receive
an annual bonus in the form of a 14th month's salary
1
.
In 2009 the company's contributions dropped 54.9% compared with the previous years due
to a surplus in the pension fund. This favorable balance is the result of many employees who
have worked at Natura for less than five years leaving the company before they had the right
to redeem the contribution.
(Graph 1)
BENEFITS
Natura offers a number of benefits to ensure the practice of well-being well among its em-
ployees. In 2009 we changed the system of our employee health plan, which used to be
managed internally. Due to the growth of our activities and consequent increase in the level
of actuarial risk, we concluded that a migration to a health insurance plan would be more
sustainable.
In the second half of 2009, we started to offer a six-month maternity leave to our female
employees. This practice has been encouraged by the federal government. We also increase
our offer of transportation to the employees from the surrounding communities. most of the
benefits are provided to permanent employees but a number of benefits are also offered to
temporary workers.
We maintained the relationship actions towards pregnant workers. The program offers cour-
ses to employees, in-house outsourced employees and wives of employees, in addition to la-
boratory tests, without any cost to employees and wives of employees, and appointments with
psychologists after birth and during the period of adaptation of their children at the nursery.
Benefits offered to employees from the Brazilian operations
· Natura Educação (Natura Education) Program
· Construindo o Futuro (Building the Future) Program (includes subsidized savings account)
· Nursery for employees' children up to 2 years and 11 months old (Until 2007, the nursery
served children up to 3 years and 11 months old. The maximum age was reduced in order
to meet the demand. Therefore, we managed to ensure exclusive breastfeeding up to the 6th
month of life and the proximity with the mother without her having to quit her career).
· Support for employees in adoption processes
1. ConTRIBUTIonS MADE By
nATURA To THE PEnSIon PLAn
oF EMPLoyEES (R$ MILLIonS)
3.808
3.076
1.387
2007
2008
2009
2. All registered employees are entitled to
the payment of a 13th month's salary in
December of every year as required by
Law No. 4,090 of July 13, 1962.
1 All registered employees are entitled to
the payment of a 13th month's salary in
December of every year as required by Law
No. 4,090 of July 13, 1962
background image
48
natura
annual
report
· Health plan
· Dental care plan
· Psychological/social service
· Check-up for management-level employees
· Medical services in the company's facilities for the prevention of metabolic conditions
(diabetes, cholesterol and triglyceride) and cardiovascular conditions (hypertension)
· Partial reimbursement of expenses with medications for cardiovascular conditions, dia-
betes, kidney failure, oncology, hepatic diseases, neurological disorders, work-related
musculoskeletal disorders, and psychiatric alterations
· Telemedicine: electrocardiogram (EKG) via telephone in emergency cases
· Health Area: Admission, regular, laboratory and discharge health tests; general practi-
ce; gynecology, orthopedics, physiotherapy; acupuncture; global postural reeducation
(GPR); nutrition, treatments for work-related diseases, collection of samples, all available
at the company's premises.
· Saúde em Movimento (Health in Movement) Program: incentive to practice physical
exercise. medical, nutritional and physical check-up before starting the activities.
· Gym subsidy for Relationship Managers
· Five free products for management-level employees
In addition to these benefits, the employees are entitled, in the company's facilities to:
· Buy five Natura products per month with a 40% discount in the VIP shop
· Vacation Project (activities held in July at Natura's Cajamar unit aimed at employees'
children aged between 6 and 12 years and 11 months)
· Professional guidance
· Cuidando de Quem Cuida (Taking Care of Those Who Take Care) Program: post-birth
meeting, course for pregnant women
· Daycare/exceptional children subsidy
· Life insurance
· Payroll loan
· Cars for management-level employees
· Family moment (with distribution of toys)
· Pharmacy agreement for discounts on medications
· Chartered transportation
· Christmas basket
· Gifts (Mother's Day, Father's Day and birthday)
· Sale of School Materials
Benefits offered to employees and outsourced employees:
· Course for pregnant women
· Corredores (Runners) Project
· Restaurant
· Laboral gymnastics
· Toys
· Christmas basket
· Chartered transportation
· Fitness services, swimming pool and multi-purpose sports court at the Natura sports
club (Cajamar and Itapecerica da Serra)
· Services: seamstress, laundry, shoe repair, eyewear shop, insurance, post office, travel
agency and book and movie rental
HEALTH AND SAFETY
In 2009, even with the increase in staff, we reduced the number of work-related accidents by
20% in the Brazilian operations, with an impressive drop in the rate of serious injuries and no
work-related fatalities. We increased investments in the prevention of accidents by 17.8% in
relation to 2008. We also established a Health Committee and began to develop a database
that will allow us to better understand the health conditions of our employees and identify
new preventive practices.
background image
49
natura
annual
report
We identified that approximately 60% of the work-related accidents in 2009 occurred as a result
of practices that did not comply with safety rules and procedures. In total, 70% of the injuries of
employees were hand injuries. For this reason, we will focus on the following measures in 2010:
· Promote an even more robust and complete management system that considers all
elements that are essential to health and safety management;
· Intensify the Quase Acidentes (Near Accidents) according to which our employees are
encouraged to communicate any situation or installation that may cause accidents;
· Implement a program for the evaluation and improvement of behavioral issues;
· Expand the focus of the Internal Week of Work-Related Accidents for the specific
prevention of hand accidents and communicate in a more expressive manner the
proper practices that provide more safety to employees.
TyPICAL woRK-RELATED InJURIES AnD DAyS MISSED AnD ABSEnTEEISM RATE (InCLUDInG
oUTSoURCED EMPLoyEES) In BRAzILIAn oPERATIonS
1
2007
2008
2009
Employees ­ number of accidents with leave²
10
16
12
Employees - number of accidents without leave³
3
5
5
number of work-related accidents per employee
0,003
0,005
0,004
outsourced employees ­
number of accidents with leave leave
4
8
11
4
outsourced employees -
number of accidents without leave
4
9
2
4
workdays missed
5
115
131
84
Frequency rate of accidents with leave
6
1,06
1,71
1,31
Frequency rate of accidents with/without leave
7
1,38
2,24
1,85
Investment in the prevention of illnesses
per employee (R$)
395,7
479,6
707,4
Investment in the prevention of accidents
per employee (R$)
8
465,9
722,8
851,5
number of cases reported to the national Institute
of Social Security on occupational illnesses ­ Cajamar
7
5
10
number of cases reported to the national Institute
of Social Security on occupational illnesses ­
Itapecerica da Serra
0
1
0
1. Only the accidents reported in the units of Cajamar and Itapecerica da Serra are considered.
2. Accidents with sick leave are those in which the employee does not return to his/her activities on the working day after the
accident.
3. Accidents without sick leave are those in which the employee returns to work on the same day of the accident or on the
first working day after the accident.
4. Both our "resident" and "non-resident" service providers are considered.
5. Refers to Natura employees.
6. Equivalent to the number of accidents or injured employees with leave divided by a million man-hours worked.
7. Equivalent to the number of accidents or injured employees with/without leave divided by a million man-hours worked.
8. Includes the whole budget of the Work Safety Department, expenses and the investments made by the Engineering and
Manufacturing area to ensure and/or improve work safety conditions. Expenditures with training are not included.
Formal agreements with unions include labor protection measures, in addition to the use of pro-
tection equipment; practices for the prevention of accidents with machinery and equipment; com-
munication of labor-related accidents; and the existence of an Internal Accident Prevention Com-
mission (IAPC). All employees from the Brazilian operations are represented in formal safety and
health committees and in the IAPCs.
The funds used in the prevention of illnesses increased 47.5% in 2009 compared with the previous
year. This was due to investments in prevention programs, as well as in improvements in infrastruc-
ture and services. In 2009, the outpatient clinic started to operate 24 hours a day, which required
the contracting of first-aid drivers for the same period.
background image
50
natura
annual
report
In 2009, the number of work-related illnesses doubled. This was because last year we had a large
number of new hirings in a short period of time, which resulted in employees not having enough
time to receive and assimilate the information on health, work safety and ergonomics. Additionally,
with the review and reactivation of the readaptation program, which was focused on musculoske-
letal pathologies, it was possible to identify new cases of work-related illnesses.
One of the highlights of the year was the organization of the fourth Ergonomic Evaluation, which
is one of the phases of a program for the monitoring and control of risks associated with work-
related illnesses, such as Repetitive Strain Injuries and Work-Related musculoskeletal Disorders
(RSI/WmSD). Based on a previous diagnosis, it is possible to check the evolution stage in the
preventive work and establish guided action plans. The first evaluation took place in 1998 when
the program was launched. In 2009 we were able to eliminate job posts classified as posing high
ergonomic risk.
In addition to replacing machinery for more appropriate versions, we also developed preventive
measures, such as the practice of laboral gymnastics and the rotation of operational employees in
the use of machines. In 2009, ten new cases of RSI/WmSD were identified in the Brazilian ope-
rations. They were all checked by multidisciplinary health teams made up of occupational health,
orthopedist, physiotherapist, psychologist, ergonomist and acupuncturist doctors.
In 2009, we also established a Health Committee and began to develop a database that will
allow us to better understand the health conditions of our employees and identify new pre-
ventive practices.
In 2009, we followed the recommendations of the World Health Organization with respect to the
influenza H1N1, sending home for 7 days those possibly infected as well as those who work closely
to the suspected cases. There was a suspected case in the nursery and, consequently, activities were
suspended for some groups. For the mothers who did not have anyone to leave their children with,
Natura gave them time off work or provided financial assistance for hiring baby-sitters.
COmmUNICATIONS WITH EmPLOYEES
Communication is a key part of our organizational and cultural development processes.
Important changes include expanding the purposes of internal communication, causing
management to play the role of communicators, engaging in dialogue with their teams,
and, consequently, bringing together the internal communications of Natura's Essence.
The information disclosed, in accordance with the profile of each stakeholder, became, ge-
nerally speaking, more strategic and relevant for the broad understanding of the company's
main progress over the year.
An example of this new, more lively and dynamic phase of internal communication is
the Canal Natura (Natura Channel) ­ digital broadcast television whose programming is
shown at 22 points distributed at Cajamar, Itapecerica da Serra, Benevides, and also at the
Natura House in Campinas. The Natura Channel was strengthened in 2009, and the satis-
faction of employees with this means of communication reached 89%, a significant growth
in relation to the 76% seen in 2008. Interactivity is one of the channel's characteristics.
Employees may suggest agendas and are also invited to work in the shows.
background image
51
natura
annual
report
CONSULTANTS AND NCAS
Natura consultants (NCs) are an essential part of our history. Since 1974, when we opted for
the direct sales model, they have been responsible for taking not only our products to consu-
mers but also our Reason for Being, our Vision, and our Beliefs. In 2009, we reached a historical
figure: we exceeded the milestone of 1 million consultants working with Natura, 879,700 of
which are in Brazil and 159,200 in the international operations. In Brazil, the increase in the
number of NCs in 2009 was 20.5%, and abroad, 33.2%.
nUMBER oF ConSULTAnTS In BRAzIL AnD FoREIGn oPERATIonS (In THoUSAnDS)¹
2007
2008
2009
Brazil
632.4
730.1
879.7
Argentina
30.8
37.3
46.5
Chile
12.6
17.5
24.5
Mexico
12.1
20.0
31.2
Peru
26.0
35.2
42.6
Venezuela²
2.3
2.8
n.a.
Colombia
2.0
5.9
13,0
France
0.4
0.8
1.4
Total
718.6
849.6
1,038.9
1. This refers to the number of consultants at the end of the year.
2. Operations in Venezuela were discontinued in August 2009. Until the 2009 cycle, Venezuela had 2,300 consultants available.
The other foreign operations refer to the closing position of cycle 17.
In Brazil, an important part of this significant increase was the establishment of the Natura
Consultant Adviser (NCA) model, which was launched in 2008 and in the following year
implemented in the entire Brazilian operation. The design of this model starts with our
Relationship managers (Rms) further supporting the activities of the NCAs. The NCAs,
who also work as consultants, play an important role in attracting, advising, and developing
consultants.
(Graph 1)
We ended 2009 with approximately 9,000 NCAs in Brazil, each of them serving as many
as 150 consultants. The NCA model meets the needs of our regionalization strategies
(learn more on page 28). They are a significant part of our commercial model because they
contribute to the strengthening and cultivation of relationships and leverage the growth of
our business.
The income distributed to consultants increased by approximately R$ 300 million, from
R$ 2 billion in 2008 to R$ 2.3 billion in 2009. However, we saw a reduction in the average
income per head for these stakeholders in the same period. This was due to an acceleration
in the increase in the number of new NCs, who at first show lower productivity. When the
length of time of the relationship with Natura is considered, both the group of NCs active
for less than one year and the group that has been with the company for longer showed an
increase in productivity in nominal terms in relation to the previous year. However, in the
composition mix, which establishes a productivity average among all NCs, the average was
reduced since there is a larger number of new consultants.
AVERAGE AnnUAL InCoME GEnERATED (R$)
2007
2008
2009
natura Consultant Advisers (nCAs)
10,908
3,380
9,841¹
Consultants (nCs)
4,247 4,097 3,987
1. The increase in the income per head of the NCAs is related to the new regions that adopted the model and the number of
cycles in which these NCAs worked during the year.
TRAINING
We recorded 583,000 participations in training courses for consultants in 2009, training
527,000 NCs (the same consultant can participate in more than one course). As a result,
we exceeded our target, which was to have the participation of 436,000 NCs in training
courses in 2009.
In 2008, approximately 30% of the NCs took some kind of training course and, in 2009, this
rate increased to 40%. We also started a pilot project to offer advanced courses to these
1. nUMBER oF nATURA
ConSULTAnT ADVISERS In BRAzIL
1. The increase in the number of NCAs is related to
the expansion of the model in the city of São Paulo
and in the Northern and Southern regions.
2. This takes into consideration the Midwestern,
Interior of São Paulo, Northeastern, Rio de Janeiro,
and Minas Gerais regions.
3. Pilot project in the Midwestern region.
630
3
5.844
2
9.083
1
2007
2008
2009
background image
52
natura
annual
report
stakeholders. The first, developed in partnership with the National Service for Commercial
Education (Senac), took place in São Paulo, with the offer of courses in entrepreneurship
and makeup technique to 2,000 NCs.
The new NCs take a training course called Boas-Vindas (Welcome), through which they
are monitored from the time they join Natura to the receipt of their first order. In this
activity, they become familiarized with the work of consultants and Natura, receiving basic
information on our value proposal, which involves the relationship with the sales channel,
our products, and our Values and Beliefs. In 2009, we reached nearly 100% in support and
training to NCs who started the activity between January and December, whether by
means of in-person training courses or by the distribution of 70,000 self-instruction kits
(containing a book, a DVD, and samples of products), which were sent to the new NCs
last year.
In 2009, we completed the roll out of the Social Security Education Program in Brazil. The
initiative, which started in 2006, aims to stimulate the inclusion of Natura´s consultants in
the Social Security system by means of raising awareness of the importance to contribute to
the social security system. Over four years, we trained 956 sales promoters and relationship
managers from across Brazil in 44 groups to work as agents to raise the awareness of the
NCs of the importance of the protection offered by Social Security. Since the beginning of the
program, we have also prepared and distributed approximately 880,000 folders and raised the
awareness of over 55,000 consultants. Only in 2009, 115 relationship managers from Rio de
Janeiro were trained and around 115,000 folders were distributed.
nC TRAInInG
2007
2008
2009
new nCs
266,762
303,958
430,229
Initial training
95,673
164,927
354,415
Participations in training courses¹
350,496
458,217
583,000
1. Takes into consideration the participation of the same NC in different training courses..
A good indicator of the quality of the relationships that we establish with the NCs is the
turnover rates, which are among the lowest in the world among direct selling companies,
according to a survey by Natura. This reflects the positive results of our strategies to retain
and train these stakeholders.
As a signatory of the Direct Sales Conduct Code before Direct Sellers and between Com-
panies of the Brazilian Direct Selling Association (ABEVD), Natura prepares its NCs to work
in the field in accordance with the company's ethical standards.
In 2009, as in previous years, we did not record any legal or administrative case that implied
violation of data on consultants or loss of their privacy. Neither was there any record of legal
cases on issues such as child, dangerous, or slave labor involving the NCs.
NATURA HOUSES
Still in the experimental stage, the Natura Houses are aligned with our strategy to bring
our consumers and consultants together. In 2009, we inaugurated five new Natura Hou-
ses in Brazil, in the Greater São Paulo region (in the districts of Paraíso, Santo Amaro
and Itaquera ­ in the city of São Paulo ­ and in the cities of Osasco and Guarulhos). In
Latin America we have another 10 Natura Houses in mexico, Argentina, Colombia, Chile,
and Peru.
These facilities support the activities of consultants. There both consultants and consumers
can test our entire portfolio; courses and events also take place, such as the Encontros Natura
(Natura meetings), which are carried out at the beginning of each cycle to introduce the new
products to our sales force.
COmmUNICATION CHANNELS
Natura seeks to provide well-structured communication channels to consultants. In 2009,
by means of the Conectividade (Connectivity) Project, we invested in increasing the number
of orders made via the Internet, an efficient channel that allows NCs to make contacts
digitally. The Conectividade Project encourages the gradual migration of orders to the
background image
53
natura
annual
report
1. Orders received by consultants through the
Internet billed in the respective years.
2.663,0
4.277,6
8.941,1
2007
2008
2009
2. AVERAGE DAILy CALLS
RECEIVED By nSC ­ nATURA
SERVICE CEnTER¹ (In
THoUSAnDS)
1. Calls related to the Brazilian Operation.
37,9
32,8
28,0
2007
2008
2009
virtual channel, including discounts and promotions exclusively offered via the Internet.
To make access easier, all Natura Houses have computers available for the NCs to place
their orders electronically.
In 2009, 71% of our orders were placed on the online channel, totaling 8.94 million virtual
orders, compared to 53% in 2008.
(Graph 1)
The NCA model contributed to the increase in online orders, as the NCAs educate NCs on
the use of this channel. Our website for the end consumer also allows the faster and more
effective registration of new consultants.
Another communication channel with the NCs is the Natura Service Center (NSC), through
which communication is made via a toll-free number. The NSC provides a wide range of
services, such as the receipt of orders, the answering of queries related to products and
promotions and handling compliments, criticisms, and suggestions. In each cycle the service
staff are trained to provide accurate information and to communicate significant changes. The
queries that are classified as critical are forwarded to the Ombudsman's Office, which works
to re-solve these cases (learn more on page 34).
In 2009, we recorded 25% more queries received by the service center compared to the pre-
vious year. The average monthly number of queries through this channel, however, fell 14.5% in
the same period, closing 2009 with a daily average of 28,000 calls. This drop is directly related
to the increase in the number of orders placed via the Internet.
(Graph 2)
QUALITY OF SERVICES
we identified a great opportunity for improving our services to nCs, in product
availability, and in delivery deadlines. Last year our consultants faced these proble-
ms again. Due to the significant increase in sales far above our projection in some
periods of the year, the non-Service Rate (nSR) increased again.
The nSR is a central issue for natura. one of its main points concerns the lack of
products related to miscalculation of demands and training along the production
chain. In 2009, we created a working group composed of the company's leaders,
who adopted short, medium, and long-term solutions, such as offering more advan-
tageous alternative products to the nCs, maintaining promotions, resizing stocks,
managing portfolios, and reviewing the logistics model.
This will continue to be a strong focus point in 2010. we undertook to improve
this situation with a number of strategic actions that are already in progress, such
as investing in infrastructure, logistics, and information systems, and focused on
increasing the flexibility and robustness of the chain and the quality of demand
forecasting.
RECOGNITION AND INCENTIVES
The results of the surveys on the quality of our relationship with our consultants and on their
satisfaction remained high, 90% and 88% respectively, reaching the target set for 2009 and showing
the consistency of our performance at the time. The level of satisfaction of NCAs increased two
percentage points to 95% in 2009.
In the satisfaction surveys with NCs, NCAs, and consumers (learn more on page 45) we included
the loyalty rate, which combines the level of satisfaction with our company, the intention to con-
tinue the relationship with the company, and the intention to recommend Natura. The loyalty of
the NCAs, for example, rose six percentage points between 2008 and 2009 to 37%. The loyalty
of the NCs, on the other hand, remained stable compared to the previous year.
1. nUMBER oF oRDERS
PLACED VIA THE InTERnET¹
(In THoUSAnDS)
background image
54
natura
annual
report
ConSULTAnTS (%)
jan/08
jan/09
jan/10
Satisfaction¹
90
88
88
Loyalty
2
n.a
16
17
Quality of relationship (Climate)
3
90
90
90
nATURA ConSULTAnT ADVISERS ­ nCAs (%)
jan/08
jan/09
jan/10
Satisfaction¹
87
93
95
Loyalty
2
n.a
31
37
Quality of relationship (Climate)
3
93
96
96
1. Percentage of consultants and NCAs in Brazil who are "satisfied" and "totally satisfied" (top 2 boxes).
2. Percentage of loyal consultants and NCAs in Brazil. The loyalty rate is calculated based on the Top Box (% of consultants
who attributed the highest score) for satisfaction, intention to continue and recommend. There is no historical data for
January 2008.
3. Average of climate category attributes, which includes issues related to training and development, work conditions,
compensation, quality of life, and motivation.
Natura rewards consultants for their services, dedication, and good performance. NCs
who have been with Natura for 15 years are invited to visit the Espaço Natura (Natura
Plant) in Cajamar, spending two days with us and being welcomed at a gala dinner, where
they receive a souvenir directly from the vice presidents and senior vice presidents, sho-
wing our gratitude and recognition. In 2009, 64,030 NCs were rewarded for their length
of service and 10,572 for good performance, in both sales volume and in the sales of refills
and products of the Crer para Ver (Believing is Seeing) line (learn more on page 61). There
are rewards for the NCs who have been with Natura for five and 10 years, and awards
for outstanding performance.
We believe in strengthening personal relationships, and through the reward program we
invest in the loyalty of our sales force. This is a spontaneous action of Natura that is adjusted
to our operational strategy.
nCS RECoGnITIonS
2007
2008
2009
Total nCs recognized for length of service
51,703
65,000
64,030
Total nCs recognized as outstanding (Destaque)
14,150
14,493
10,572
number of Awards distributed to
outstanding (Destaque) nCs
1,120
1,120
473
number of outstanding (Destaque) nCs
Recognition Events
49
56
43
We also use incentive campaigns, which have become an important marketing tool aligned
with our strategy. In addition to stimulating sales, the campaigns strengthen the relationship
with our sales people, increasing the connection with the brand, recognizing the work of
our NCs, and helping them to increase their income. One of the main events is the Chronos
Convention, which in 2009 was held in Cabo de Santo Agostinho (State of Pernambuco).
At the time, we rewarded 300 NCs, who excelled in the sale of products from the Chronos
line during the year.
(Graph 1).
mOVImENTO NATURA (NATURA mOVEmENT)
The Natura movement was created in 2005 to raise awareness and mobilize our con-
sultants in actions and projects, through which they can work as social change agents. In
2009, we had 13 projects in the different regions of Brazil. We involved 45,467 NCs in the
following projects: Crer para Ver (Believing is Seeing) Program, Água de Viver (Water to Live),
A Mata Atlântica é Aqui (The Atlantic Forest is Here), Reciclagem de Produtos Natura (Natura
Product Recycling), Mulheres da Paz (Women of Peace), Papo de Responsa (Serious Talk),
self-esteem actions, and income generation in low-income communities, among others. For
2010, the target will be to engage 100,000 NCs.
In the Reciclagem de Produtos Natura, for example, the NCs are encouraged to request the empty
packaging of our products when they visit their customers, and then return it to the transportation
company that delivers it to cooperatives of partner garbage collectors. As a result, we not only
ensure the proper destination of materials but also generate income for the cooperatives.
1. ToTAL oF PRIzES AwARDED In
InCEnTIVE CAMPAIGnS To nCS
1
1. The volume does not take into account
products from regular cycle promotions.
1.296.000
2.377.741
3.103.395
2007
2008
2009
background image
55
natura
annual
report
In 2009, this project, which was already run in the cities of São Paulo (state of São Paulo) and
Recife (state of Pernambuco), was extended to the coast of the state of São Paulo and Rio
de Janeiro lowlands (state of Rio de Janeiro), as well as to the state of Espírito Santo and to
Salvador (state of Bahia). In total, 18,141 NCs took part in the project and they collected 118
metric tons of post consumption packaging.
RECyCLInG PRoJECT
2007
2008
2009
Penetration of participating consultants (%)
10.0
2.3
2.4
Total metric tons collected²
90.8
118.0
120.0
1. Percentage of consultants participating in the project (delivery of box with waste) divided by total consultants who are active
in the cycle.
2. Embalagens e produtos Natura pós-consumo.
Last year, we also started a partnership with the NGO SOS mata Atlântica in the A mata Atlân-
tica é Aqui (The Atlantic Forest Is Here) project, which aims to inform and raise people's awa-
reness of the importance of this biome. Our consultants were invited to participate in itinerant
exhibits on the Atlantic Forest held in 28 Brazilian cities in the states of São Paulo, Rio de Janeiro,
Santa Catarina, Paraná and Rio Grande do Sul. Between may and December 2009, 1,010 NCs
visited the exhibits.
Another project created in 2009, also in partnership with SOS Mata Atlântica, was the Água
de Viver (Water to Live) pilot program, which aims to engage and mobilize the Natura sales
force and the children from their respective communities on the water issue. Last year, 63
monitoring stretches were chosen in rivers of the three Brazilian southern states. By means of
this project, Relationship managers (Rm) were trained to become "water guardians", learning
to conduct the monitoring. In the program, each Rm was responsible for monitoring a given
stretch of the river. In total, in addition to the Rms, 243 consultants and 270 children were
involved in the Água de Viver program.
Natura also supports the Papo de Responsa (Serious Talk) project conducted by the Rio de Ja-
neiro Civil Police and the Grupo Cultural AfroReggae (AfroReggae Cultural Group). By means of
lectures at schools in the state of Rio de Janeiro, the project aims to raise awareness on human
rights, violence, peace culture and of responsibility and the value of human life. We participate
trough financial support and the institutional strengthening of the project, and our consultants
work as agents of the proposal and appoint the schools where the lectures will be held. In 2009,
1,224 NCs were involved in the Papo de Responsa project.
Another highlight in the year was the partnership signed between Natura and the United Na-
tions Development Programme (UNDP). We mobilized and encouraged our consultants to
participate in the Brasil Ponto a Ponto (Brazil from End to End) campaign, which also involved
other partners of the UNPD and aims to work towards (shaping) a better country. In total,
72,127 NCs from all over Brazil were involved, being encouraged to express their opinions
during the Encontros Natura (Natura meetings) and virtually on Natura websites by answering
the question: "What needs to be changed in Brazil for your life to really improve?" The contri-
butions of the NCs will help to support the UNDP in the preparation of the Brazil´s Human
Development Report.
background image
56
natura
annual
report
1. GLoBAL EVALUATIon oF
BRAnD IMAGE SURVEy (%)¹
2 3
1. Source: Brand Essence..
2. The 2009 global evaluation indicator
was measured based on a quantitative
sample of 1,200 personal and home
interviews distributed over 3 markets:
400 in São Paulo; 400, Recife; 400, Porto
Alegre.
3. The survey was conducted with men
and women of classes A, B, C and D
(using the Brazil Economic Classification
Criteria of the Brazilian Association
of Research Companies ­ ABEP1),
between 14 and 70 years of age, using a
minimum of three cosmetic or personal
hygiene products. The sample included
both Natura and non-Natura users.
The top box measure considers the
respondents who attributed the highest
score to the brand in a range of 0 to 5
points. The entire quantitative survey has
a margin of error that corresponds to a
confidence level of 95%.
2. BRAnD PREFEREnCE (%)
42
47
46
2007
2008
2009
83
80
81
2007
2008
2009
CONSUmERS
millions of people all over Brazil use Natura's products, which are developed with the inten-
tion of awakening the senses and promoting well-being well. We work to maintain a por-
tfolio of choices that can go beyond functional needs. Accordingly, we believe that we can
contribute to increasing individuals' awareness of themselves, of others, and of the world.
Natura continuously strives to be closer to consumers, and 2009 was important for the
strengthening of these ties. We have opened new channels so that consumers' opinions and
ideas are ever more present in our daily lives, directly influencing our innovation process
right from the start, in the creation of new products, and taking care not to lose either the
essence of our brand or our ability to surprise.
In 2009, our consumers participated in two dialogue panels with representatives of all our
stakeholders. In January 2010, we also held a panel for consumers in which there were 22
representatives of these stakeholders from different regions of Brazil.
During this meeting, they offered opinions on our products, our sales channels, and our
corporate behavior, indicating areas for improvement and sharing their expectations of Na-
tura for the future. A diverse set of actions were suggested, such as creating more products
for men, intensifying the training of consultants to improve customer service, and increasing
the number of Natura Houses, thus offering more places to test products.
We intended to disclose Our Relationship Principles with Consumers in 2009, but we only
succeeded in doing this at the beginning of 2010. The principles address topics such as dia-
logue channels, relationship, quality of products and services, sustainability, and satisfaction.
They are available at www.natura.net/principios.
SURVEYS AND APPROACH
In 2009 we increased the volume of surveys and studies carried out with consumers by
approximately 200%. We created a Consumer Insight area to collect and increase our in-
formation on the market, further understand the behavior of consumers, and identify tren-
ds. This structure was reproduced in the Business Units, allowing us to collect even more
qualified information, separated by categories and products. The Regional Units have also
been contributing to the identification and collection of information on local needs.
A good example of this was the Oscar Freire Project, launched for the celebration of
Natura's 40
th
anniversary. Through an Internet channel, consumers could choose which
products they would like to see back in our portfolio. The ones with the most votes were
returned to production and named "Natura Classics." The project had more than 20,000
registered users and has attracted 15,000 requests to restore favorite products. Another
initiative was the Bela (Beautiful) Project, in which over 1,000 consumers tested the new
version of Chronos product before its launch, thus ensuring that we had the proper pro-
duct for the skin of Brazilian women.
As a result of our work in the market, the constant innovations, product portfolio, and
communication strategies, we maintained competitive investments in marketing, reaching
R$ 204 million cumulatively in 2008 and 2009, in addition to those in 2007, financed by
productivity gains of R$ 252 million in the same period.
We have been achieving positive results in terms of our brand acceptance, which continued
to show high rates: according to the Brand Essence/Ipsos image survey, the overall evalua-
tion reached 81% and our consumer preference reached 46%, 30 percentage points higher
than the second place.
(Graph 1)
In order to improve the monitoring of the quality of relationships with our stakeholders, in
2009 we included in the loyalty indicator, which was measured previously only by the level
of satisfaction, two new evaluation indicators: intention to continue the relationship with
the company and intention to recommend Natura. We achieved a 46% loyalty rate with
the consumers. This indicator is also being measured for suppliers and consultants (learn
more on page 43)
.
(Graph 2)
background image
57
natura
annual
report
In 2009, we increased our penetration in Brazil, reaching 3.5 million new homes, which were add-
ed to the more than 20 million homes where the Natura brand is already present.
(Graph 3)
CUSTOmER SERVICE
Customers have different ways to interact with Natura. One of the main communication
channels is the Natura Customer Service Center (NCS), which provides clarifications and
receives criticisms, compliments, and suggestions. In 2009, the NCS received 1.48 million
calls, 76% of which were answered within 30 seconds.
With respect to unanswered calls, they increased from 60,000 in 2008 to 109,000 in 2009.
This reflects an extra and unexpected demand for customer service resulting from an in-
crease in orders placed in February and march (49% and 48%, respectively, compared with
the same months of 2008), thus increasing the number of unanswered calls. After this period,
the unanswered call rate dropped by half in may 2009.
nCS ­ nATURA CUSToMER SERVICE (CALLS In THoUSAnDS)
2007
2008
2009
Total
1,984
1
1,531
2
1,484
Answered
1,854
1
1,471
1,375
Unanswered
130
60
109
1. Calls related to the Brazilian operations
2. The sum was corrected and the data for 2008 changed.
In order to improve the service, in August 2009 we updated our customer service policy.
The main change was in the product complaint service. In some cases, we collect and
analyze the product about which there was a complaint, and, after verifying the defect,
we make an exchange. This change speeds innovation and contributes to the study and
continuous improvement of our products and services.
The cases of allergic reactions to products are analyzed, and solutions are adopted on a
case-by-case basis. This analysis further improves our formulations. In the second half of
2009, our indicator that measures customer complaints per items billed per million dropped
69% from the first half, and, at the end of 2009, it was 28% lower than in 2008.
The training of NCS employees is continuous, with programs staged in every cycle. In 2009,
we provided a special training course to all NCS employees to prepare them to serve
customers during the Christmas campaign, a period in which the demand for the service
channel increases.
As we are concerned with the privacy and confidentiality of customers, all customers who
contact us via the Internet or NCS are protected by policies and systems that ensure data
security. In 2009 we did not record any legal or administrative cases related to violation of
privacy or loss of data of our consumers.
CLEAN CITY
In July 2009 we were assessed by the city hall of São Paulo as it understood that
we had disrespected the Municipal Law no. 14,223, which is known as the Clean
City Law. This resulted from the fact that natura supported the "Concrete Poetry"
exhibit. As soon as we received the assessment, the agency responsible for the
campaign immediately removed the exhibit from the streets.
At the time, we clarified that natura did not act in bad faith or mean to disrespect
the law at any moment. natura has not made any billboard campaigns for over a
decade, even before this was made illegal, because it believed it was necessary to
reduce visual pollution in large urban centers. Although we regret the embar-
rassment, we believe that there is a need to discuss, with society as a whole, the
opportunities and limits for using and intervening in the urban area.
3. PEnETRATIon
In BRAzILIAn
HoMES
1
2 3 4
(%)
1. Source: LatinPanel.
2. The penetration is the percentage of
homes represented in the survey that
bought the brand in the specified period.
3. The survey represents 81% of the
domiciled population and 90% of the
potential consumption in Brazil (according to
the Target Index).
4. Due to updates in the population profile,
the information from Natura was adjusted
and the numbers for the previous years
were reviewed.
43.3
46.3
52.4
2007
2008
2009
background image
58
natura
annual
report
CONSUmER HEALTH AND SAFETY
The safety and health of our consumers guides all our processes, from the development of
product concepts to the final disposal of packaging, including research and development,
certification, manufacturing, marketing and promotion, storage, distribution, supply, and
product use itself. We have a Product Safety management Department that is responsible
for evaluating and ensuring the safety of all of our ingredients and finished products.
Before adopting a new ingredient or new formula, we use the precautionary principle as
a guideline. If there are any questions by international medical and scientific communities
with respect to a possible adverse effect on health, we choose not to use it. In the case of
raw materials that have some limitation with respect to the volume allowed, we adopt the
standards of the country in which sanitary legislation is strictest. We maintain our target
to eliminate parabens and phthalates as ingredients in our products by the end of 2010.
All new ingredients and formulas are rigorously tested by dermatologists.
We maintain a Cosmetic Vigilance System, which monitors possible adverse effects of pro-
ducts, protects the end consumer, and drives the innovation process. All communications
on health or safety effects received by the Natura Customer Service are investigated.
This care meant that in 2009, as in previous years, there were no convictions or questions
by the Brazilian National Agency of Sanitary Vigilance (Anvisa). Nor were there any fines
related to our products with respect to impacts on consumer health and safety or signifi-
cant fines related to product labeling.
We received in 2009 352 complaints to the Consumer Protection and Advisory Program
(Procon), most referring to requests to negotiate debts of consultants; third-party questions
related to undue inclusion on the list of customer credit protection agencies as a result of re-
gistration fraud; and complaints from consumers who were dissatisfied with an unperformed
product exchange or refund. All complaints are analyzed by the proper departments and the
resulting information is used to make improvements in our processes. Natura also works
in accordance with the rules of the Advertising Self-Regulation Council (CONAR), and the
codes of conduct of the Brazilian Association of Advertisers (ABA), Brazilian Association of
Consumer Protection (Pró-Teste), and Brazilian Direct Selling Association (ABEVD).
PRó-TESTE
A survey reported by the media in 2009, which was conducted by the nGo Pró-
Teste (Brazilian Association for Consumer Protection), had announced that the subs-
tance oxybenzone is prohibited in other countries, but this is not true. The use of
this substance was one of the criteria adopted by the nGo to "fail" a series of well-
known sunscreen brands, among which was natura's Fotoequilíbrio Emulsão Prote-
tora Hidratante FPS30 (SPF30 Photoequilibrium Emulsion Moisturizing Sunscreen).
natura assures the public that none of the ingredients used in its products is harmful
to health or carcinogenic. The ingredient oxybenzone is safe and can be used in a
concentration approved by the strictest international control bodies, such as the
brazilian national Agency of Sanitary Vigilance (Anvisa), the United States Food and
Drug Administration, and the European Cosmetics Association. Together with trade
associations and other manufacturers, we challenged the reliability of the tests due
to a number of irregularities, including the use of a methodology that is not approved
by Anvisa. we consider this survey as harmful for the general population, as the use
of sunscreens decreases the risks of skin cancer.
background image
59
natura
annual
report
CONTROVERSIAL INGREDIENTS
Parabens
Parabens are a group of preservatives made up of short-chain and long-chain com-
pounds. The long-chain parabens are claimed to be harmful to human health, althou-
gh there is no scientific consensus on the topic. Although natura does use the short-
chain parabens, which are not harmful to health, in some of its products, it chose
to replace them in its new creations, eliminating them from its entire portfolio by
December 31, 2010. In 2009, we made progress in the research of new preservatives
and continued with the gradual replacement of this ingredient.
Triclosan
The greatest concern about triclosan refers to the fact that it is widely used in the
world, increasing its concentration in nature with possible impacts on the environ-
ment, as the substance affects water microorganisms because it is a synthetic antimi-
crobe that acts against the proliferation and growth of microorganisms. Consistently
with natura's sustainable stand, we have since July 2008 we have replaced the use of
this ingredient in new products with plant origin alternatives and constantly seek to
develop new less harmful antimicrobes.
Phthalates
Phthalates are a family of compounds used for many different purposes, including as
additives in the manufacture of plastics and in the cosmetic industry. natura used a
compound from this family, diethyl phthalate, as a solubilizer of fragrances, bittering
agent, and alcohol denaturizer. when used in low concentration, there are no indi-
cations that diethyl phthalate can damage health. nevertheless, this ingredient may
be mistaken for the controversial versions of phthalates and so we have eliminated
this substance from our new products since June 2008. At the end of 2009, natura
banned the use of phthalates in PVC packaging that is in contact with products.
background image
60
natura
annual
report
SUPPLIERS
Efforts to maintain a sustainable company necessarily include a focus on the quality of
our relationships with suppliers. They are fundamental links in our value chain, providing
inputs, finished products, services, equipment, and indirect materials necessary to our
business processes. Our supplier base is located mainly in Brazil, although a few suppliers
are abroad.
In 2009, we had relationships with 4,500 suppliers. Of this total, 5% are suppliers of
finished products and production inputs (ingredients from biodiversity, raw materials, and
packaging materials). The remaining 95% are suppliers of services and indirect ingredients
or materials.
We work constantly to establish long-term partnerships because we understand that our
suppliers are an essential part in the accomplishment of our value proposal. In 2009 we
started to work to reverse the descending trend in the level of satisfaction of suppliers,
which had dropped from 84% in 2007 to 74% in 2008. To this end, we designed a two-year
action plan started in 2009, and we established five priority actions based on a detailed
analysis of the 2008 satisfaction survey with suppliers.
These actions are focused on: awareness by employees of the critical aspects that may
affect the relationship, based on the relationship principles and processes with these
stakeholders; a closer relationship with strategic suppliers of finished products and pro-
duction inputs; improvement of the product innovation funnel process; improvement in
the payment process, particularly to the suppliers of services; and the extension of the
Qlicar Program to other categories of service suppliers. (Qlicar is a corporate program
for the development of suppliers. See below for more details.)
We had a significant increase in the level of supplier satisfaction for the Brazilian opera-
tions from 74% in 2008 to 82% in 2009, although we have not yet achieved the target
of 85%. We obtained high levels of satisfaction from suppliers of finished products and
production inputs, to whom we have been closer in 2009 and among whom we recorded
a 90% satisfaction level.
(Graph 1)
In the process of working more closely with the suppliers of production inputs and in-
house outsourced workers, we have established relationship processes that improve the
communication between Natura and partners at operating, tactical, and strategic levels.
We systematized the meetings of the Qlicar program, implemented the Cafés da Manhã
com Fornecedores (Breakfast with Suppliers) and Encontro da Aliança (Alliance meeting),
programs that ensure Natura's contact with all the organizational levels of our partners.
Of the three dialogue panels held during the year involving suppliers, one was specifically
for suppliers and gathered around 30 partners, while in the other two suppliers exchanged
experiences with representatives from other Natura stakeholder groups. In the panel for
suppliers, important questions were raised, such as the challenge of decentralized relations;
the benefit of a dialogue on the action plan for improving the quality of relationships; and
the new environment for a lead role that may be generated by designing relationships
(learn more in Quality of Relationships, page 34). We also made progress in increasing
transparency in the processes for negotiating production inputs through the use and
improvement of cost models per category.
Some other initiatives that enhanced the collaboration from our suppliers are also worth
noting. Seven transportation companies, for example, were critical to the success of the
Trilhas (Trails) Project of the Crer para Ver (Believing is Seeing) Program. They are: Rapidão
Cometa; Dias Entregadora; TNT mercúrio; Patrus; Rodofly; Utilissimo; Expresso Araçatuba.
They voluntarily transported the teaching materials that were distributed to schools from
210 Brazilian municipalities. The in-house outsourced workers and suppliers of production
inputs engaged in the internal project for the improvement in the level of service to our
consultants.
Despite the progress, we know that we still have opportunities for improvements. For this
reason, in 2010 we will continue with the existing plan and will increase communications
with these stakeholders with respect to sustainability and further integration of the chain.
1. GEnERAL SATISFACTIon¹ -
By SUPPLIER CoMPAny (%)
1. Percentage of satisfied and totally
satisfied suppliers (top 2 box).
84
74
82
2007
2008
2009
background image
61
natura
annual
report
QLICAR PROGRAm
Since 2004, Natura has Qlicar (acronym for Quality, Logistics, Innovation, Competitiveness,
Service, and Relationship in Portuguese), a corporate program for the development of
suppliers based on performance indicator management. In 2009 78 production input and
service suppliers participated in the program.
Last year, we focused on stabilizing the program with finished product and production
input suppliers, searching for a greater integration of the chain and inclusion of initiatives
for mutual value generation and the reduction of water consumption and GHG emissions.
We verified that the quality audit process needs to increase its scope of work. We cre-
ated new indicators to measure the level of logistics service and determined innovation
indicators for the fragrance, packaging, and raw material categories. We also re-evaluated
the order cycle supplier program to make it stronger in 2010.
Our suppliers are subject to self-evaluation and audit exams related to quality, environ-
ment, and social responsibility issues, the latter including aspects related to human rights,
such as risks involving child, forced, or the equivalent of slave labor. In 2009, the 78 sup-
pliers who participate in Qlicar went through audit exams and self-evaluations; 48% of
productive suppliers were subject to audit exams. No cases of human rights violations
were found.
The same human rights aspects are taken into consideration in the Natura Supplier Qua-
lification process. In 2009, we signed 2,500 such contracts, 30% more than in 2008. This
increase in the number of new contracts with suppliers is directly related to the increase
in business volume.
AUDITED oR SELF-EVALUATED SUPPLIERS wITH RESPECT To QUALITy, EnVIRonMEnT AnD
SoCIAL RESPonSIBILITy
1
2007
2008
2009
Self-evaluated productive suppliers (%)
100
100
100
Audited productive suppliers (%)
36
48
48
Qlicar audited suppliers (%)
n.d.
100
100
1. The human rights aspects considered are child, forced, or the equivalent of slave labor.
HUMAn RIGHTS CLAUSES In ConTRACTS
1 2
2007
2008
2009
Significant investment contracts
with clauses related to human rights (%)
100
100
100
Significant investment contracts
with clauses related to human rights (in thousands)
2,2
2,0
2,5
1. Among the criteria to determine whether a certain contract is significant are: a) amount (contracts over R$ 5 million); b) whether
the contract is related to a strategic project; c) whether the contract is essential for Natura's business; d) whether the replacement of
the contracted party by another supplier is difficult; e) whether the contract poses risks to the company's image. 2. The clauses refer
to child, forced, or the equivalent of slave labor.
background image
62
natura
annual
report
SUPPLIER COmmUNITIES
The sustainable use of ingredients from the Brazilian biodiversity is the main technological
platform of Natura. We recognize that the communities that form our network of ingre-
dient suppliers play a key role in preserving environmental heritage. A priority for us, they
provide us with the genetic heritage and traditional knowledge used in the development of
our products.
We ended 2009 with relationships with 26 communities. These include a total of 2,084 families
located in the North, Northeast, Southeast, and South of Brazil, and also in Ecuador. This
group of communities is characterized by great diversity, both cultural and socioeconomic.
They are located in different ecosystems and have different forms of social and institutional
organization. These stakeholders range from an extractivist community in the North of
Brazil, comprising approximately 400 families, to a small group of five families of farmers in
the Vale da Ribeira region in the interior of the state of São Paulo.
SUPPLIER CoMMUnITIES
2007
2008
2009
Communities with which natura relates
19
23
261
Benefited families from the supplier communities
1,684
1,895
2,084
1. The increase is due to the inclusion of four communities that are under the responsibility of the team from the Industrial unit
of Benevides (Cart, Coomar, Unidos Venceremos (United We Stand) Association and Jauarí Association). We stopped including the
community of Maninaltepec (Mexico), which was establishing a project that did not continue.
In Benevides, state of Pará, our industrial unit of oils and soap mass receives inputs from eight
supplier communities with which we relate directly. Our supply chain also includes processing
companies, which transform the inputs arising from the communities into raw materials.
Establishing and maintaining this network of relationships and inserting them into the business
model are challenges that Natura assumed a few years ago to encourage environmental pre-
servation and appreciation of traditional knowledge. . Despite good progress, we know that
this is an ongoing learning process.
We have an internal team made up of a multidisciplinary group, as well as management and
governance mechanisms established to meet the complexity that involves supply logistics, the
group of laws that governs the many aspects of this relationship and the cultural and social di-
versity of the communities involved. This structure allows us to internalize the challenges, such
as those that involve costs, quality and traceability of inputs, and incorporate them into the
strategic and daily decisions of our innovation projects and processes. . Despite good progress,
we know that this is an ongoing learning process.
LOCAL DEVELOPmENT
In 2009, we started to implement three projects that contribute to sustainable local
development: Reflorestamento Econômico Consorciado e Adensado (Consortiated and Densed
Economic Reforestation, RECA), located on the border between the states of Rondônia and
Acre, which supports the operation of the Escola Família Agrícola Jean Pierre Mingan (Jean
Pierre mingan Agricultural Family School), Cooperativa de Produtos Agroecológicos, Artesanais e
Florestais de Turvo (Cooperative of Agro-Ecological, Handmade, and Forest Products of Turvo,
Copaflora), in the state of Paraná, which supports institutional development; and Cooperativa
Mista dos Produtores Extrativistas da Reserva de Desenvolvimento Sustentável do Rio Iratapuru
(mixed Cooperative of the Extractivist Producers of the Sustainable Development Reserve
of the Iratapuru River ­ Comaru), in the state of Amapá, to improve the infrastructure of the
village and Brazil nut extraction.
These represent a target for the year that we achieved. The projects strengthen the groups
socially, promoting goals such as environmental preservation and cultural appreciation, in addi-
tion to improving the communities' production infrastructure. Prepared with the participation
of the communities, the projects demonstrate Natura's desire to extend its relationships with
its partners beyond a strictly commercial level.
background image
63
natura
annual
report
Comaru: Improvements in the Village of Iratapuru and in the production chain of
the Brazil nut.
The role of Natura in this project is to support the community in the decision on the use and
management of the communities' own funds, which are provided in the agreement established
with the company in 2004. Since that time, the community has proposed actions for improve-
ments in their quality of life, which were agreed on a case-by-case basis with Natura. In 2009,
the following actions started to be implemented:
· Renewal of the Brazil nut oil plant
· Implementation of improvements in the village's infrastructure
· Equipment and infrastructure for the collection of the Brazil nut
· Investments in the Cooperative's management
In this project, we also made available consulting services to support the community in the
implementation of the Iratapuru Fund and prioritization of the use of funds for investments in
infrastructure and management.
Reca: Support to the Escola Família Agrícola Jean Pierre mingam (Jean Pierre min-
gam Agricultural Family School)
The role of Natura is to supplement the investments made by other organizations in the
school's infrastructure and equipment, making available resources for the school's operation
and training and mobilization of the students' families. This is the beginning of a multi-institu-
tional partnership that aims to promote the autonomy of the school in the medium term.
This school is a 20-year long dream of RECA that will now allow the youngsters from the
community to use their technical education to remain in the community, advancing the social,
environmental and economic sustainability of these families.
Coopaflora: Support for the institutional strengthening of the Cooperative
Natura's role in this project is to strengthen Coopaflora and the Instituto Agroflorestal Bernar-
do Hakvoort (Bernardo Hakvoort Agroforestry Institute ­ IAF), which work on the preserva-
tion of araucaria forests, which are typical in the state of Paraná. Natura's efforts in the region
supplement partnerships established by the IAF and Coopaflora with many other different
state-owned organizations, companies and NGOs. The main actions focus on:
· Support for institutional planning
· Implementation of a business plan for the cooperative for its financial autonomy
· Mobilization of youngsters for the appreciation of family farming
· Training in good processing practices to improve the quality of products
· Promotion of environmental preservation actions
ASSOCIATED TRADITIONAL KNOWLEDGE
AND CULTURAL HERITAGE
In 2009, we signed agreements to share the benefits from access to traditional knowledge
associated with the Brazil nut and Buriti Palm. The first agreement was signed with Brazil nut
producers from the community of Iratapuru (state of Amapá), and the second with Buriti Palm
oil producers from Palmeira (state of Piauí). Natura is proud of these agreements because they
represent the consolidation of parts of our policy for the sustainable use of biodiversity and
cultural heritage (learn more on page 64). Both provide financial resources that will be invested
in projects in accordance with local priorities, which will help the communities to implement
their development strategies.
Also, as part of the efforts to value traditional knowledge and the Brazilian cultural heritage,
in 2009, we maintained a relationship established in the previous year to provide institutional
support to projects for the improvement of the Escola municipal Indígena Pamáali (Pamáali
Indian municipal School) of the Baniwa and Coripaco indigenous peoples. The school is atten-
ded by native Brazilian groups from the Alto Rio Negro (Upper Negro River) region in the
municipality of São Gabriel da Cachoeira in the state of Amazonas. The project directly bene-
fits 150 people and, indirectly, around 3,000 people, including students, teachers, employees
and leaders of the school communities. The funding allows for the continuity of the research
carried out by students; the publication of teaching and publicizing materials; the organization
of the network's meetings, continued education workshops for teachers, and sustainability
activities in the field of food safety.
background image
64
natura
annual
report
STRATEGIES AND PRIORITIES
We started to disseminate the Relationship Principles with Communities, described in the Policy
for the Sustainable Use of Biodiversity and Traditional Knowledge. As part of our dialogue process,
we gathered together in 2009 14 representatives from supplier communities, and mapped the
opportunities for improving the relationships and determined joint commitments. members of
the communities also participated in two other engagement panels of representatives from all our
stakeholders, and in a panel of specialists that discussed the challenges and the opportunities for
the sustainable use of Brazilian biodiversity.
We define work strategies and priorities based on the point of view of these supplier communities
and on the lessons learned over the past few years. The main highlights were:
· Improvement in the planning of demands and purchase of inputs;
· Sharing of information on projects in progress;
· Need to support administrative management;
· Incentive to establish networks for the exchange of experiences and technical
knowledge between communities;
· Reinforcement of the process for the collaborative establishment of input prices;
· Support to the structuring of productive chains and production and processing techniques.
In 2009, we planned and developed, with the communities, several training actions.
· Technical agreement for the development of the cocoa chain at the plantation;
· Training on Good Handling Practices of Sapucainha (Carpotroche brasiliensis) ­
Cooprocam;
· Training of cooperative members in "basic understanding of accounting" ­ Iratapuru;
· Training of the cooperative's officers in financial and administrative management ­
Iratapuru;
· Training in administrative management ­ Middle Juruá River;
· Course in Good Processing Practices ­ Turvo;
· Program for the training of youngsters in the management of cooperatives in par-
tnership with the NGO FASE as part of the Valoração das Oleaginosas (Apprecia-
tion of Oil Trees) Program ­ surrounding communities of Benevides;
· Organization of four technical exchange programs, which included the sharing of
experiences and lessons learned between the communities on social organization,
establishment of partnerships, business management (Palmeira do Piauí, state of
Piauí, visited Coopaesp, state of maranhão; Boa Vista, state of Pará, went to Cotijuba,
state of Pará; and Campo Limpo, state of Pará, went to Boa Vista, state of Pará), in
addition to a visit to the agricultural family school of Amapá by youngsters from the
Iratapuru community, state of Amapá;
· Pernaculture course for representatives from different communities.
In 2010, we intend to make progress in the implementation of the relationship management
tools that were established in 2009. They include the improvement of action planning and pro-
jects developed with communities, the field measurement of sustainability and supply perfor-
mance indicators, and the conduction of a survey to evaluate the quality of the relationship.
RESOURCES AT THE COmmUNITIES
Our relationship with the 26 supplier communities involves the transfer of different types of
resources. They receive funds from the sale of the raw materials produced, through contracts
to share the benefits from access to the genetic heritage or associated traditional knowledge;
from use of image; and through direct investments in local sustainable development.
In 2009, we recorded a 30% increase in resources to supplier communities. The increase
in the resources allocated to suppliers has been growing due to, among other reasons, the
increased production in the communities that supply the Benevides Industrial Plant. The
launch of the Natura Ekos soap line, which contains a higher concentration of natural oils,
was the main reason for this increase.
background image
65
natura
annual
report
The resources from the sharing of benefits remained practically stable compared to 2008.
In total, including the two agreements signed in 2009 related to the Brazil nut and Buriti
Palm, Natura has six agreements for sharing benefits from access to traditional knowledge
associated to native species in Brazil. There are another 28 contracts related to access to
genetic heritage entered into with communities. For 2010, our target is to increase by 44%
the resources to the supplier communities.
RESoURCES To THE SUPPLIER CoMMUnITIES (R$ THoUSAnDS)
2007
2008
2009
Supply
863,6
2,238.2
2,756.1
Sharing of benefits from access to genetic
heritage or associated traditional knowledge¹
324.7
1,136.0
1,056.3
Funds and sponsorships²
755.1
671.9
1,137.7
Use of image
38.4
10.2
14.5
Training³
49.9
18.0
151.8
Certification and stewardship
4
41.7
23.3
27.8
Studies and assistance
5
396.1
129.5
371.9
Total
2,469.6
4,227.2
5,516.1
1. Although the amount of the sharing of benefits is lower than in 2008, the amounts for 2009 refer to only 12 months, whereas
the amount for 2008 represents the cumulative payment of previous contracts. 2. Includes resources donated to the Escola
Municipal Indígena Pamáali (Pamáali Indian Municipal School). 3. Includes workshops and courses paid for by Natura for the
communities to improve their sustainable production techniques. 4. Includes the amounts invested in the certification of cultiva-
tion areas at the supplier communities. 5. Studies and assistance: Includes studies and consulting services provided by specialized
professionals and NGOs contracted by Natura to work at the supplier communities.
THE mURUmURU CASE
The Public Attorney's office of the state of Acre filed, in 2007, an action in order to
investigate whether there was any irregular use of and access to the traditional kno-
wledge associated with the use of the murumuru palm plant developed by the native
Brazilian community Ashaninka, in the state of Acre. According to the case, a resear-
cher obtained this knowledge and unduly transferred it to other companies. we were
included in this proceeding because we use the murumuru palm in our products.
In addition to the fact that the use of this ingredient has been documented in scien-
tific bibliographies since 1941, we clarify that we never worked with the researcher
in question or with the knowledge of the Ashaninka community. Additionally, we
filed the request to access the genetic heritage of the murumuru palm with the
Management Council of Genetic Heritage (CGEn) by means of the Middle Juruá
Extractivist Reserve located in the municipality of Carauari, state of Amazonas. we
signed a previous agreement in november 2008.
we recognize the importance of the indigenous peoples and traditional commu-
nities as guardians of this knowledge. we were the first Brazilian company, even
without the existence of a law, to compensate Brazilian traditional communities
for their knowledge of biodiversity.
background image
66
natura
annual
report
SURROUNDING COmmUNITIES
Natura believes that one of its roles is to pay special attention to and be effectively involved
with the communities surrounding its units. This relationship is most comprehensive and direct
with the people from Cajamar (state of São Paulo), Itapecerica da Serra (state of São Paulo),
and Benevides (state of Pará), where the main operating activities are carried out in Brazil.
We work on this relationship by seeking to encourage the community's potentials and identify
its needs by conducting programs that may contribute to local development. However, we
believe that this should not be an isolated effort by Natura. We want to work more like an
agent in this process, in partnerships that involve other social players for the development of
projects that have lasting results and can change these communities.
In 2009, we discussed and approved the Principles of Relationships with the Surrounding
Communities, which were presented to the representatives of the communities in two engage-
ment panels. These principles better determine the scope of our work and result from the
lessons learned during these years of relationships.
In 2009, we invested more than R$ 410,000 in projects involving the surrounding communities
of Cajamar and Itapecerica da Serra, R$ 407,900 of which were the company's own funds and
the remaining R$ 2,500 were funds from the Crer para Ver (Believing is Seeing) Program used
in the printing of newspapers for teachers associated with the municipal Board of Education.
The objective of the publication is to encourage the exchange of experiences between tea-
chers and maintain parents and the school community well-informed.
InVESTMEnT In InFRASTRUCTURE AnD SERVICES FoR PUBLIC BEnEFIT (R$ THoUSAnDS)
1
2007
2008
2009
Investments in the communities surrounding
natura's plants ­ natura's resources
391.5
342.8
407.9
Investments in the communities surrounding
natura's plants ­ Resources from the
Crer para Ver (Believing is Seeing) Program
n.a
249.2
2.5
Total
391.5
592.0
410.4
1. The investments refer to the municipalities of Itapecerica da Serra and Cajamar. 2. This amount does not include indirect resources,
which reached the communities by means of the Trilhas (Trails) Project in Cajamar, and the Encontros de Leitura (Reading Meeting)
Project in Itapecerica da Serra, both related to the Crer para Ver (Believing is Seeing) Program. As these projects are developed and
implemented in many municipalities of Brazil, they have not been calculated separately for the surrounding communities.
We are increasing the scope of our work to Santana do Parnaíba and working with a broader
surrounding community concept. This has already been reflected in the hiring of 297 employe-
es from the municipalities of Santana do Parnaíba, Várzea Paulista, and Campo Limpo, the equi-
valent of 9.1% of the 3,249 permanent employees at the Cajamar plant. We also have many
temporary workers and in-house outsourced workers who live close to the Cajamar and
Itapecerica da Serra plants. In Benevides, however, of the 51% directly contracted employees,
98% are from the state of Pará.
(Graph 1 e 2)
In 2009 there was an increase in the business volume with partners from the surrounding com-
munities at the two plants that have production processes: Cajamar and Benevides. Expenses of
purchases from the surrounding communities of the Itapecerica da Serra unit remained stable.
PURCHASES FRoM SUPPLIERS FRoM THE SURRoUnDInG CoMMUnITIES (R$ MILLIonS)
2007
2008
2009
Cajamar
2
46.0
52.0
69.9
Itapecerica da Serra
2
0.8
1.2
1.2
Benevides
3
6.5
34.4
44.6
Total
53.3
87.6
115.7
1. The method for consolidating this indicator was changed; this is why historical data have been restated. The amounts include taxes.
2. Purchases from suppliers in the municipalities of Cajamar and Itapecerica da Serra, metropolitan region of São Paulo.
3. Purchases from suppliers from the state of Pará made exclusively for the soap plant in Benevides, Pará.
1. EMPLoyEES FRoM
CAJAMAR(%)
1
1. In Itapecerica da Serra, only
administrative activities are carried out
and, therefore, the unit does not have
any employee from the surrounding
community
16,9
18,2
17,4
2007
2008
2009
2. EMPLoyEES FRoM THE
REGIon oF BEnEVIDES (%)
96
96
98
2007
2008
2009
background image
67
natura
annual
report
ITAPECERICA DA SERRA
In Itapecerica da Serra, our relationship is strongest with the district of Potuverá, where approxi-
mately 9,000 people live, but we have been working on projects that will be extended to a broa-
der area of the municipality. The program for the expansion of selective garbage collection in the
municipality is one example. Our work is carried out on two fronts: to support the work of the
municipal Environment Department (Green Division), which is co-responsible for implementing
the program; and to support the structuring of the Cooperativa de Recicladores de Itapecerica da
Serra (Cooperative of Recyclers of Itapecerica da Serra, CRIS). We believe that this project may be
used as a model for selective garbage collection campaigns in other Brazilian municipalities.
The first step was to better understand the dynamics of waste production in the city, which
has different districts, some highly populated and some with rural characteristics. In January
2009, the Socio-Environmental Diagnosis was completed. This was a study carried out in the
districts of Potuverá and Branca Flor by the Institute of Socio-Environmental Projects and
Research (Ipesa), with the support of Natura, the City Hall and the Cooperative of Recyclers.
Based on this study, it was possible to design a medium-term collection program taking into
consideration the differences between the districts. Our objective is to extend the selective
garbage collection program to the whole municipality by 2012.
The local cooperative increased the volume of collected recyclable materials to around 50
metric tons/month thanks to the systematization of collection in the district of Potuverá. In
2008, the monthly average collection was 16 metric tons of recyclable materials from schools,
public bodies and companies. In the second half of 2009, we also signed an agreement for sen-
ding the recyclable materials generated at our Itapecerica da Serra unit to CRIS. In total, 96.1
metric tons of materials were sent to CRIS over a period of six months.
In 2009 the municipality of Itapecerica da Serra started to benefit from the Encontros de Leitura
(Reading meetings) project of the Crer para Ver (Believing is Seeing) program carried out by
Natura in partnership with the Education and Documentation Center for Community Action
(Cedac). This program is aimed at raising the awareness of teachers who work with children
between four and six years old on the importance of actions that help the development of
children´s reading and writing capabilities. The project lasts two years and involves 50 teachers
from 29 schools and 37 technical professionals and directors of schools, benefiting 1,461 students.
CAJAmAR
In the municipality of Cajamar we followed a different process in 2009. After more than a
decade running and supporting projects such as the one to implement a master Plan in the
municipality and the one organizing discussions on Agenda 21, which involved over 4,000
participants in different activities between 2004 and 2009, we saw the public sector taking
over the lead role.
We see this as positive, but we admit that we did not progress the way we wanted to in
Cajamar in 2009. Some of the projects scheduled for the year, such as the one to establish
a sapling nursery in partnership with the NGO mata Nativa and local authorities, did not
materialize. The same happened with the review of the Decennial Education Plan to be con-
ducted with the municipal Education Board. Given our commitment to work with the local
community, Natura intends to resume discussing these projects with local players in 2010.
Last year, we continued to support the NGO mata Nativa in the implementation of Agenda
21. Within the project, we had 47 meetings in the districts, with an average of 32 participants
per meeting. For the third consecutive year, we sponsored the publication "Cajamar em
Verso e Prosa" (Cajamar in Verse and Prose) organized by the municipal Board of Education,
a project that involves the school community in writing activities that aim to celebrate the
memory and identity of the people from the city of Cajamar, as well as its local culture.
We were also involved in a discussion that we consider extremely important: the renewal of
the agreement for the supply of water and sewage services between the City Hall of Cajamar
and Sabesp, the São Paulo state water utility). We have participated in the meetings and public
hearings that aim to develop a sanitation plan that is more appropriate for the region.
In 2009, Cajamar participated in the Trilhas (Trails) Project, which involved all public scho-
ols and involved children between 4 and 6 years of age in Elementary and middle or Early
Education Schools. A total of 16 municipal schools, 125 teachers, and 2,863 students parti-
cipated in the project. .
background image
68
natura
annual
report
BENEVIDES
The industrial plant of Benevides, in the state of Pará, has been operating since 2006. We
have been consistently strengthening our ties with the local communities over these years.
This has been happening mainly with the extractivist and small farming communities that
supply some of the ingredients used at the plant.
We work with 11 community ventures that involve 610 families, from which in 2009 we
bought 394 metric tons of inputs, a significant increase from the 152 metric tons acquired
in 2008. These producers are in many towns and cities in the state, and not limited to the
municipality of Benevides. At the moment, we do not intend to work with new producers,
but instead to strengthen links to those we already work with.
Despite the progress we have made, we know we have a long way to go. We are in a
region that has suffered for decades from environmental degradation and economic pres-
sure. Our challenge, in addition to overcoming socio-environmental and cultural barriers,
is to encourage more action by the local public authorities. In 2009, we conducted several
initiatives promoting local development and strengthening partnerships, such as tax con-
sulting and organizing meetings on harvest planning and evaluation.
Among these initiatives are: the organization of the First Forum of Agricultural and Extrac-
tivist Cooperativeness and its Insertion in the market, the development of programs for
training youngsters in the management of cooperatives; the announcement of results in
seminars for the exchange of experiences; the organization of workshops to raise aware-
ness on work safety and health; tax consulting; the promotion of knowledge of pernacul-
ture techniques; and the organization of meetings for harvest planning and evaluation.
With the continuity of these actions, we intend to strengthen the relationship with the
community of Benevides in 2010 and our challenge for the coming years will be to streng-
then our relationship with the local government.
background image
69
natura
annual
report
SHAREHOLDERS
Since 2004, when we went public, we have been investing in the development of a transpa-
rent and first-class relationship with shareholders, investors, and market analysts. We try to
keep these stakeholders well informed, and we follow the recommendations of the Brazilian
Securities Commission (CVm), as well as the rules of the Bm&FBovespa, where the shares
issued by Natura are listed in the New market segment.
Tools of communication with these stakeholders include quarterly teleconferences for the
disclosure of results and regular updating of the Investor Relations website with information
on performance and results previously approved by our Audit Committee, Executive Com-
mittee (Comex), and by the Board of Directors.
The website contains accounts of events in which we participate, presentations we make,
and information on our capital structure and on the distribution of dividends, among other
things. The website provides for direct communications by means of the "Speak to Investor
Relations" channel.
Every year, we hold a public presentation, an event that is structured by the Association of
Investment Analysts and Professionals of Capital markets (Apimec ­ state of São Paulo),
with our CEO, Senior Vice President of Financial and Legal Affairs, and the Investor Relations
team all present.
In 2009 we also participated in 15 conferences for investors in Brazil and abroad, and in road
shows in Brazil, the United States, and Europe on the secondary offering of shares.
Another highlight was a first-ever meeting with Analysts and market Professionals (Natura's Day)
held at our plant in Cajamar, state of São Paulo, in which presentations by our senior manage-
ment helped more than 60 Brazilian and foreign investors and analysts get to know Natura.
PROFILE OF SHAREHOLDERS
In 2009, the secondary offering of shares increased Natura's free-float ­ available-for-trading
shares ­ from 26.2% to 39.5%, which positively affected the shares' liquidity and, together with
the positive results for the year, the company's value itself (learn more on page 17).
(Graph 1)
At the end of 2009, we had 8,927 shareholders, 7,699 of which were individuals and 1,228
were Brazilian and foreign legal entities.
PRoFILE oF SHAREHoLDERS
2007
2008
2009
Individuals
19,813
9,993
7,699
Brazilian legal entities
633
396
560
Foreign legal entities
352
538
668
Total
20,798
10,927
8,927
With respect to the number of outstanding shares, at the end of 2009 foreign corporate
investors held 84.8% of the shares, while Brazilian corporate investors held 8%, and indi-
viduals, 6.3%.
CAPITAL STRUCTURE
SHAREHoLDERS
InTEREST
nUMBER oF SHARES
Majority shareholders
60.0%
258,017,219
Treasury shares
0.0%
655
Management shares
0.5%
2,323,878
outstanding shares
39.5%
169,932,709
Total shares
100.0%
430,274,561
1. ToTAL VoLUME oF SHARES
TRADED (R$ MILLIonS)
1 2
1. The 2007 and 2008 amounts were adjusted
because there was a change the historical price
of shares due to the distribution of dividends.
2. The information was updated in accordance
with the history of Economática.
6.894
4.506
6.392
2007
2008
2009
background image
70
natura
annual
report
CONTROL GROUP
Our capital stock is mainly composed of common shares. The table below shows the number
of shares of our capital stock held by shareholders that own 5% or more of our capital stock
and by the members of our Board in 2009.
number of
Shareholder
1
common shares
(%)
______________________________________
_______________
_____
Lisis Participações S.A.
Controlled by Antonio Luiz da Cunha Seabra
95,946,968
22.3%
Utopia Participações S.A.
Controlled by Guilherme Peirão Leal
91,557,964
21.3%
Passos Participações S.A.
Controlled by Pedro Luiz Barreiros Passos
22,606,809
5.3%
AnP Participações S.A.
Controlled by Anizio Pinotti
22,583,608
5.2%
RM Futura Participações S.A.
Controlled by Ronuel macedo de mattos
15,918,754
3.7%
Antonio Luiz da Cunha Seabra
3,628,920
0.8%
Guilherme Peirão Leal
3,462,917
0.8%
Pedro Luiz Barreiros Passos
855,038
0.2%
Anizio Pinotti
854,160
0.2%
Ronuel Macedo de Mattos
602,081
0.1%
(1) They all participate in the shareholders' agreement.
RESULTS
Natura's shares (Natu3) have appreciated since the beginning of 2009, and their price at the
end of the year was R$ 36.31. Whereas the main index of the São Paulo Stock Exchange
(Ibovespa) appreciated 82.7%, Natura's shares rose 101.6%. Since going public, Natura's shares
have appreciated 444%, whereas the Ibovespa rose 248% in the same period.
2004 2005 2006 2007 2008 2009
NATU3
Ibovespa
450
350
250
150
50
444%
248%
We remained listed on the leading Brazilian share market indexes ­ Ibovespa, IbrX-50 (which
list the 50 most liquid shares on the stock exchange), the Special Tag Along Stock Index (Itag),
the Special Corporate Governance Stock Index (IGC) and the Corporate Sustainability Stock
Index (ISE), which uses sustainability criteria to select shares of listed companies. Natura is also
part of the morgan Stanley Composite Index (mSCI), a reference for foreign investors.
PAYmENT OF DIVIDENDS
On February 24, 2010, the proposal for the payment of R$ 554.5 million in dividends and
R$ 43.3 million as gross profit on capital (R$ 36.8 million net of income tax) related to the
results for 2009, was approved by Natura's Board of Directors and submitted to the Annual
Shareholders' meeting (ASm).
Of the amount above, dividends amounting to R$ 215.2 million and interest on capital amoun-
ting to R$ 21.3 million (net of withholding tax) related to the results accrued in the first half
of 2009 were paid on August 12, 2009. The remaining balance will be paid after the approval
of the ASm in April 2010. The aggregate of these dividends and interest on capital related to
the results for 2009 represent net earnings of R$ 1.37 per share (R$ 1.15 per share in 2008),
corresponding to 86.5% of net income
1
for 2009.
1. Net income in accordance with Law No. 6,404/76.
background image
71
natura
annual
report
GOVERNmENT
Natura's relationship with the government is guided by open, transparent, and unbiased
dialogue with the three branches. We want to be recognized as an important party in
efforts to develop public policies to influence the direction of society on matters related
to our business and our vision of the world.
We also engage through trade associations, in particular the Association of Personal Hy-
giene, Perfumery, and Cosmetics Industry (Abihpec) and the Brazilian Direct Selling Asso-
ciation (ABEVD) to join forces and advance the collective needs of our industry.
This relationship has well-defined processes and information management tools. Over the
past few years we have formalized our positions and conduct in documents that we de-
livered to those attending our meetings. These documents are the Relationship Principles
with the Government, which contain the basic guidelines; the Integrity Policy against Cor-
ruption and Bribery, in which we condemn all illicit practices; and the Campaign Donation
Policy, in which we clarify the option of our company not to make donations to candidates
or political parties, in or out of election periods.
Also, since 2008, we have a Position on the Practice of Political Lobbying, a document in
which we align ourselves with those favorable to lobbying, provided it is done ethically and
transparently. We support the regulation of this activity, which is lawful and legitimate, but
which also needs established rules and limits. The following employees perform lobbying
activities on behalf of our company: Daniel Serra, Denis Oliveira, Kassia Reis, Rodolfo
Guttilla, and Thais Chueiri.
The main focus of our process for managing governmental relations, which includes
knowledge management tools and a program for approaching members of Congress,
is the Priority Agenda of Governmental Relations. Set annually, it establishes focus areas
linking the Brazilian political and institutional world and Natura's Strategic Planning. In 2009,
our agenda was guided by discussion around four topics: tax reform; taxation in different
states; the regulatory environment of the personal hygiene, perfumery, and cosmetics
industry; and Brazilian legislation on access to resources from biodiversity and associated
traditional knowledge.
With respect to tax policies, we continue to work under the leadership of the main
entities that represent us: the Association of Cosmetics, Toiletry and Fragrance Industry
(Abihpec) and the Brazilian Direct Selling Association (ABEVD). In 2009, although the
progress we expected on tax reform was not made, we continue to make our position
clear and closely monitor discussions.
Particularly with respect to taxation in different states, we supported the efforts of
ABEVD with the São Paulo State Finance Department to determine a new methodology
for determining a Value Added margin (VAm) that reflects the difference between the
many different distribution channels for cosmetic and personal hygiene products. The
methodology was determined and a survey on the calculation of the margin in each state
was conducted by the Getúlio Vargas Foundation to determine the VAms in 2010. In the
states of Paraná and mato Grosso do Sul, as well as in the Federal District, where an
agreement regarding the methodology for determining the VAm was not reached, we are
trying to settle the matter in court. In all states, the parties in issues related to taxation
are state finance departments.
In the regulatory environment we collaborate with the efforts of the Council of Latin
American Cosmetic Industry Associations (Casic) to standardize sanitary laws in Latin
American countries. The Brazilian National Agency of Sanitary Vigilance (Anvisa),
sympathetic to the industry's concerns, continues to negotiate alternatives with peer
institutions from other countries in the region.
We took steps to promote a new legal framework for access to biodiversity and associated
traditional knowledge that ensures sustainable conditions for the exploration of Brazilian
genetic heritage and the traditions associated with it. The cosmetics and personal hygiene
industry participated in all formal public processes for the discussion of a new legislation,
trying to make contributions on environmental and sustainable development issues and
presenting these to members of Congress. In 2009, there were reports that some of the
main ministries involved had come to a consensus on a new draft bill whose wording
had been developed by the Chief of Staff of the Republic of Brazil to be submitted to
background image
72
natura
annual
report
the National Congress. The industry established dialogues with many players to reaffirm
its interest in making contributions and to request that, given its importance, the text be
submitted to the Congress immediately (learn more about biodiversity on page 64). The
main parties to this topic were the Environment and Science and Technology ministries,
the Chief of Staff of the Presidency of the Republic of Brazil, and the Office of the
Attorney General.
Our efforts brought results: we were the first company to obtain special authorization from
the Brazilian Institute of the Environment and Renewable Natural Resources (Ibama) to ac-
cess genetic resources for scientific research. This type of license, which simplifies the deve-
lopment of technologies based on biodiversity, represents important institutional progress.
Together with Abihpec, we intensified our dialogue with the municipal Administration of
São Paulo to discuss ways of improving the municipal Law on Solid Waste of São Paulo,
which was enacted last year. Natura and a number of other companies in 2009 received
notification from the municipal government about non-compliance with the waste law,
which requires the performance of reverse logistics for the post-consumption packaging
of our products in the city of São Paulo. We would like to collect all this material and give
it the proper treatment, but this would require creating a complex chain involving manu-
facturers, authorities, and consumers. We consider the current law unconstitutional and
advocate its improvement and the creation of a National Policy for Solid Waste, so that
reverse logistics can actually be implemented in Brazil.
Through Abihpec, Natura is part of the Dê a Mão para o Futuro (Give Your Hand to the
Future) project, which is working toward the implementation of reverse logistics projects
in several cities. In 2009 Abihpec signed an instrument for technical cooperation with the
Rio de Janeiro State Environment Department.
Natura is not a party to any litigation involving matters of competition law nor does it
have a history of significant fines or non-monetary sanctions arising from non-compliance
with laws and regulations. In the sphere of trade associations, such as Abihpec and ABEVD,
we have a harmonious relationship with competitors and an established openness for
discussions related to the business and to contributing to increasing competition in both
the industry and the sector.
In 2009, we received financial assistance from the government by means of tax incentives
in the total amount of R$ 19.2 million. An example was the deduction of taxes, totaling
R$ 10 million, by means of the federal government's Lei do Bem (Law of Good), which
provides tax benefits to companies that develop technological innovations.
SIGnIFICAnT FInAnCIAL ASSISTAnCE RECEIVED FRoM THE GoVERnMEnT (R$ MILLIonS)
2007
2008
2009
Tax incentives for Support and Sponsorships¹
6.6
5.2
6.1
Lei do Bem (income tax deductions on up to twice
the spending on technological Research and Innovation)² 14.7
15.6
10.0
ICMS value-added tax subsidy in Itapecerica da Serra
2.8
1.8
3.1
Urban Real-Estate Tax (IPTU) exemption in Itapecerica
da Serra and Cajamar³
0.1
0.0
0.0
Total
24.2
22.7
19.2
1. Legal entity's income tax (IRPJ) incentives granted through the Rouanet Law, the Audiovisual Law, the Children's Rights Fund
and the Workers' Meal Program, and ICMS value-added tax incentives in the state of Minas Gerais through the Natura Musical
(Musical Natura) program.
2. The tax benefit related to the Lei do Bem was changed in 2007 and 2008 due to the review/audit in the Technological Rese-
arch and Innovation projects that are eligible for the tax incentive.
3. Tax incentive referring to the reimbursement of IPTU tax paid in Itapecerica da Serra, as a result of investments made in the region.
LEADERSHIP AND SOCIAL INFLUENCE
Natura seeks to positively influence its stakeholders by means of open and transparent
dialogue. We want to take the lead in the transformation of our society. This is why we ac-
tively participate in socializing opportunities, discussions, and collaboration events in Brazil
and abroad. In 2009, we were formally represented in 47 trade associations, entities, and
organizations.
background image
73
natura
annual
report
REPRESENTATION IN TRADE ORGANIZATIONS AND ASSOCIATIONS
Trade organization/Association
natura Representative
Type of Representation
_____________________________________
__________________
_____________________________
ABERJE - Associação Brasileira de Comunicação
Rodolfo Guttilla
Chairman of the
Empresarial (Brazilian Association of Corporate
Decision-making Council
Communication) (www.aberje.com.br)
ABEVD - Associação Brasileira de Empresas
1. Rodolfo Guttilla
1.Vice-chairman
de Vendas Diretas (Brazilian Association
2. Lucilene Prado
2. Coordinator of the Committee
of Direct Selling Companies)
of Legal Affairs and Government
(www.abevd.org.br)
Relations
3. Leandro machado
3. Chairman of the Ethics Committee
ABIFRA ­ Associação Brasileira das Indústrias
Sérgio Gallucci
Representative
de óleos Essenciais, Produtos Químicos
Aromáticos, Fragrâncias, Aromas e Afins
(Brazilian Association of Essential Oils,
Aromatic Chemical Products, Fragrances,
Aromas and Similar Industries)
ABIHPEC - Associação Brasileira das Indústrias
1. Rodolfo Guttilla
1. Vice Chairman
de Higiene Pessoal, Perfumarias e Cosméticos
2. Lucilene Prado
2. Director
(Brazilian Association of the Personal Hygiene,
3. Oriana Rey
3.Representative of the
Perfume and Cosmetic Industry)
Environment Committee
4. Elizabete Vicentini
4. Representative of the Technical
and Regulatory Committee
5. Luiz Felipe moreira
5. Representative of the Human
Resources Committee
ABNT - Associação Brasileira de Normas Técnicas Luciana Villa Nova
Representative
(Brazilian Association of Technical Standards)
(www.abnt.org.br)
ABRASCA - Associação Brasileira das Companhias Helmut Bossert
Representative
Abertas (Brazilian Association of Listed Companies)
(www.abrasca.org.br)
ABRH - Associação Brasileira de Recursos Humanos Denise Asnis
Representative
(Brazilian Association of Human Resources)
ABPI - Associação Brasileira da Propriedade
Lucilene Prado
Representative
Intelectual (Brazilian Association of Intellectual
Property) (www.abpi.org.br)
AIPPI - Association Internationale pour la
Lucilene Prado
Representative
Protection de la Propriété Intellectuelle (International
Association for the Protection of Intellectual
Property) (www.aippi.org)
AmVD - Asociación mexicana de Ventas
maria Teresa Sterling
Representative
Directas (mexican Direct Selling Association)
ANPEI - Associação Nacional de Pesquisa,
Luciana Hashiba
Director
Desenvolvimento e Engenharia das Empresas
Inovadoras (Brazilian Association of Research,
Development and Engineering of Innovative
Companies) (www.anpei.org.br)
background image
74
natura
annual
report
ASIPI - Asociación Interamericana de la Propiedad Lucilene Prado
Representative
Industrial (Interamerican Association of Industrial
Property) (www.asipi.org)
Asociacion Civil Argentina de Empresas Brasileñas Heriovaldo Silva
Pro-treasurer
(Argentine Civil Association of Brazilian Companies)
(www.grupobrasil.com.ar)
ASPI - Associação Paulista da Propriedade Intelectual Lucilene Prado
Representative
(São Paulo Association of Intellectual Property)
(www.aspi.org.br)
CAPA - Cámara Argentina de la Indústria
Heriovaldo Silva
Deputy member of the Comision
de Cosmética y Perfumería (Argentine
Revisora de Cuentas (Accounts
Chamber of the Cosmetics and
Review Commission)
Perfumery Industry)
Cámara de Comercio de Lima
José Ramon
Representative
(Chamber of Commerce of Lima)
CANIPEC - Cámara Nacional de la Industria
maria Teresa Sterling
Representative
de Perfumaria, Cosmetica y Articulos de Tocador
e Higiene (mexican National Chamber of the
Perfumery, Cosmetics and Beauty and Personal
Care Products Industry)
CAVEDI - Cámara de Venta Directa de Argentina Heriovaldo Silva
Pro-treasurer
(Direct Selling Chamber of Argentina)
Cámara de Venta Directa de Chile
Axel moricz
Director
(Direct Selling Chamber of Chile)
Cámara Peruana de Venta Directa
José Ramon
Representative
(Peruvian Chamber of Direct Selling)
CAmBRAS - Cámara de Comercio Argentino
Heriovaldo Silva
Representative
Brasileña (Argentine Brazilian Chamber of
Commerce) (www.cambras.org.ar)
CASIC - Consejo de Asociaciones de la Industria Rodolfo Guttilla
Representative
de Cosmeticos Latinoamericana (Council of the
Latin American Cosmetics Industry Association)
CEmEFI - Centro mexicano para la Filantropía
maria Teresa Sterling
Representative
(mexican Center for Philanthropy)
CIESP - Centro das Indústrias do Estado de
Rodolfo Guttilla
Director
São Paulo (Center of Industries of the State
of São Paulo) (www.ciesp.org.br)
ETHOS - Institutos Ethos de Empresas e
Guilherme Peirão Leal
member of the
(Ethos Institute of Companies and Social
Decision-making Council
Responsibility) (www.ethos.org.br)
FNQ ­ Fundação Nacional da Qualidade
Pedro Luiz Passos
Vice Chairman of the Board of Trustees
(Brazilian National Foundation on Quality)
(www.fnq.org.br)mas as
FUNBIO - Fundo Brasileiro para a Biodiversidade Guilherme Peirão Leal
member of the Advisory Board
(Brazilian Fund for Biodiversity)
(www.funbio.org.br)
Trade organization/Association
natura Representative
Type of Representation
_____________________________________
__________________
_____________________________
background image
75
natura
annual
report
Fundação SOS mata Atlância
Pedro Luiz Passos
member of the Board
(SOS Atlantic Forest Foundation)
GIFE - Grupo de Institutos Fudações e Empresas
maria Lucia Guardia
Representative
(Group of Institutions, Foundations and Companies)
GRI - Global Reporting Initiative
Rodolfo Guttilla
member of the Stakeholder Council
(www.globalreporting.org)
and Co-chair of the Brazilian National
Annex
IBGC - Instituto Brasileiro de Governança
moacir Salztein
Representative
Corporativa (Brazilian Institute of Investor
Relations) (www.ibri.org.br)
IBRI - Instituto Brasileiro de Relações com
Investidores (www.ibri.org.br)
Helmut Bossert
Representative
IEDI - Instituto de Estudos para o Desenvolvimento Pedro Luiz Passos
Chairman of the Board
Industrial (Institute of Studies for Industrial
Development) (www.iedi.org.br)
Instituto Empreender Endeavor Brasil
Pedro Luiz Passos
member of the Board
(Endeavor Brazil Entrepreneur Institute)
(www.endeavor.org.br)
Instituto São Paulo Contra a Violência
Rodolfo Guttilla
Representative
(São Paulo Institute Against Violence)
(www.spcv.org.br)
INTA - International Trademark Association
Lucilene Prado
Representative
IPT - Instituto de Pesquisas Tecnológicas
Pedro Luiz Passos
member of the Board
(Institute of Technological Research)
(www.ipt.br)
mBC - movimento Brasil Competitivo
Pedro Luiz Passos
member of the Board
(Competitive Brazil movement)
(www.mbc.org.br)
movimento Nossa São Paulo
Guilherme Peirão Leal
Chairman of the Decision-making
(Our São Paulo movement)
Council of the Sustainable São Paulo
(www.nossasaopaulo.org.br)
Institute
PCPC Council - Personal Care Products Council Elizabete Vicentini
Representative
(www.personalcarecouncil.org)
Rede Social São Paulo
maria Lucia Guardia
member of the management
(São Paulo Social Network)
Committee
SIPATESP - Sindicato da Indústria de Perfumaria
1. Rodolfo Guttilla
1. Vice Chairman
e Artigos de Toucador do Estado de São Paulo
2. Lucilene Prado
2. Deputy Director
(Perfume and Beauty Products Industry Union
in the State of São Paulo)
The Arthur W. Page Society
Rodolfo Guttilla
Representative
(www.awpagesociety.com)
UEBT - Union For Ethical Biotrade
marcos Vaz
Vice-chairman
WBCSD - World Business Council for Sustainable Julio moura
member of the Board
Development (www.wbcsd.org)
WFDSA - World Federation of Direct
1. Alessandro Carlucci
1. Bursar
Selling Associations
2. Rodolfo Guttilla
2. member of the Board
WWF Brasil (www.wwf.org.br)
Guilherme Peirão Leal
member of the Advisory Board
background image
76
natura
annual
report
CREATION OF SOCIAL VALUE
In 2009, we once again increased the creation and distribution of wealth to our stakeholders:
employees, suppliers, consultants, shareholders and government - to the latter by paying taxes.
The increase in the amounts distributed is the result of several factors that arise from the
strength of the market in which we operate, the consistent results due mainly to our strategy
of growth in Brazil, and the more robust development of our operations in Latin America.
DISTRIBUTIon oF wEALTH (R$ MILLIonS)¹
2007
2008
2009
Shareholders
2
391.1
425.9
551,.9
Consultants
1,722.1
2,023.8
2,302.5
Employees
390.3
556.4
643.0
Suppliers
2,329.7
2,357.2
2,687.6
Government
948.3
1,276.7
1,547.3
1. Due to changes in many accounting practices by various bodies, we recalculated the amounts for government in 2007, and for
other stakeholders, except for consultants, in 2008.
2. The amounts reported correspond to dividends and interest on capital that were effectively paid to shareholders, that is, calcu-
lated on a cash basis. As a result, the historical data was changed.
According to a survey carried out by Ipsos Insight in 2009, 46% of the NCs belong to the
social-economic class B and 43% to the C social class. For 70% of the NCs, the activity of
Natura consultant represents an income supplement and, for 22%, it is the only source of
income. most of NCAs, however, most of them, 53%, are from the B social class. For 49% of
the Natura Consultant Advisers, the activity represents the only source of income.
INVESTmENT mATRIX
In 2009, we maintained the same proportion of 1.2% of investments in corporate res-
ponsibility in relation to Natura's Net Revenues. Among the benefiting stakeholders who
recorded a more significant increase are consultants, with an increase in investments in educa-
tion and training (more information on page 41), and society, particularly due to the increase in
investments in sponsorships and projects of civil society partners (see the next page). In envi-
ronment, the highlights were once again the projects for offsetting greenhouse gas emissions
selected by the Carbon Neutral Program.
On the other hand, we saw a reduction in the resources used in management due to the restruc-
turing process Natura undergone in 2009.
MATRIX FoR InVESTMEnT In CoRPoRATE RESPonSIBILITy
1
(R$ THoUSAnDS)
2007
2008
2009
Employees, families, and third parties
19,084.0
18,729.3
17,251.3
Consultants
1,801.4
2,566.8
3,563.4
Consumers
468.3
270.9
480.3
Suppliers
232.3
212.8
243.8
Supplier communities²
1,993.1
647.0
1,424.6
Surrounding communities
391.5
342.8
407.9
Society
3
7,058.7
8,777.4
15,672.0
Environment
1,849.09
5,467.2
8,073.6
Total invested in stakeholders
32,878.2
37,014.2
47,117.0
Management expenses
9,591.9
7,148.3
4,045.7
Total Natura funds
42,470.1
44,162.5 51,162.7
WHAT FOOTPRINT
WE LEAVE
background image
77
natura
annual
report
2007
2008
2009
Percentage of net revenues
1.4%
1.2%
1.2%
in the Crer para Ver (Believing is Seeing) program
4
Invested tax incentives ­ Roaunet Law
2,484.8
3,767.0
3.768,2
Incentivos fiscais investidos Lei Roaunet
2,059.5
2,852.8
2.422,2
Audiovisual Law
1,098.0
400.0
920,0
ICMS (state Value-Added Tax) in Minas Gerais
2,101.6
2,000.0
645,0
ICMS (state Value-Added Tax) in São Paulo
814.3
540.7
0
1% Income Tax to CMDCA
5
227.0
0
938.0
1% Income Tax to Condeca
6
445.0
1,015.0
0
Grand total
51,700.3
54,738.0
59,856.0
1. The amounts invested in support and sponsorships are also taken into consideration in this matrix, but they are split among
the benefited stakeholders. The matrix includes investments in projects or actions that are not intrinsic to Natura's business
and go beyond legal requirements.
2. The amount for 2007 was recalculated, excluding the amount related to the sharing of benefits, which is presented in the
table on page 50.
3. We verified that, in general, the end stakeholder benefiting from these investments is society. The amounts allocated to the
government are listed as tax investments in this table and also in the distribution of wealth table.
4. For further information, please see the text on the Crer para Ver (Believing is Seeing) Program.
5. CMDCA - Municipal Council for the Rights of Children and Adolescents of the municipalities of Cajamar, Itapecerica da
Serra, Matias Barbosa, Canoas, Benevides and Jaboatão dos Guararapes. Since 2008, 1% of income tax has been transferred
to Condeca.
6. Condeca - State Council for the Rights of Children and Adolescents of São Paulo..
CRER PARA VER (BELIEVING IS SEEING)
Considered one of our high priority sustainability topics, education is a decisive factor for the
development of a fairer society and one of the most effective mechanisms to change our world.
To improve the quality of public education, we created in 1995 the Crer para Ver program.
Our consultants actively participate in the program as they sell, without making any profit, exclu-
sive products of the Crer para Ver line. The total amount raised is invested in educational projects
developed in public schools that focus mainly on encouraging reading and writing.
In 2009 we reached our target for funds raised in Brazil, which was R$ 3.744 million, and we
added R$ 3.768 million that were allocated to the fund of the Crer para Ver program.
InVESTMEnT In EDUCATIon FoR PUBLIC BEnEFIT In BRAzIL (R$ THoUSAnDS)
2007
2008
2009
net funds raised from the Crer para Ver¹
2,487.8
3,767.0
3,768.2
Total amount from the projects developed
and supported by the Crer para Ver
2
4,330.0
3,381.0
4,075.6
Penetration of the Crer para Ver (% cycle)
3
8.2
9.9
7.1
1. Net funds raised refers to the net income of the program after deducting income tax.
2. The total amount from the projects refers to the total actually invested in the year (withdrawn from the fund and used in
the projects).
3. Penetration is the indicator of the percentage of consultants who participate in the program divided by total potential consul-
tants. Penetration data was considered until Cycle 18.
At the end of the year, our penetration was 7.1%. The drop in this rate led us to make some
adjustments. In order to mobilize consultants, we started in 2009 to implement a new strategy
to reposition the brand and develop products, making the Crer para Ver line more attractive,
which will bear fruit in 2010.
In 2009 we extended the Crer para Ver program to the other Latin American operations,
directing the focus of private social investment actions to education, and benefiting non-
governmental organizations and local institutions. The net funds raised from the sale of
products from the Crer para Ver line in Latin American operations totaled R$ 430,000.
In Argentina, where the program has been carried out since 2008, we expanded our work to 12
education institutions, 10 more than in the previous year. The countries that started to receive
the Crer para Ver (Believing is Seeing) Program's portfolio of products and to support educational
causes include Peru, Colombia and mexico. The Chilean operations, which were initially focused
on the Consultora Natura Empreendedora Social (Social Entrepreneur Natura Consultant) pro-
gram, will start to prioritize education from 2010. We will maintain the investment in the Empre-
endedora Social program, but independently from the Crer para Ver program.
background image
78
natura
annual
report
TRILHAS (TRAILS) PROJECT
In 2009 we launched the Trilhas Project, which for its scope is considered the boldest initiative
of the Crer para Ver Program since its creation. The project is an educational technology con-
sisting of a set of materials developed to support the work of teachers and directors of public
schools for children from 4 to 6 years of age.
The purpose of this project is to give teachers tools to train students to be readers and
writers. The materials include children's books available in the Brazilian market. Indirectly, the
Trilhas Project helps to reduce functional illiteracy in Brazil.
We reached our target of taking the Trilhas Project to 210 Brazilian municipalities in 2009. The
project already serves 2,923 municipal schools, involves a group of 10,000 teachers and bene-
fits 207,000 students. Trilhas is the result of an investment of two years of development. In the
preparation of the materials and the development of the project methodology, we relied on
the participation of leading educators. Transportation companies that distribute our products
voluntarily distributed the materials to schools.
In a preliminary analysis, where we asked teachers to grade, from 0 to 10, the importance of the
material for their work, the average grade was 9.2. We are developing qualitative surveys regar-
ding the use of the material and the results of the project, which will be completed in 2010.
OTHER PROJECTS OF THE CRER PARA VER
(BELIEVE IS SEEING) PROGRAm
In addition to the 210 municipalities included in the Trilhas (Trails) project, the other
initiatives of the Crer para Ver program reach 40 Brazilian municipalities. The funds are
invested in projects such as the encontros de Leitura (Reading Meetings), Formar em
Rede
(networking), and the Chapada Project. In 2009, we also supported the publi-
cation of newspapers of the Municipal Education Department of Cajamar, where our
head office is located, and the donation of /literature books to schools for youngs-
ters and adults in partnership with the Bahia State Education Department.
ENCONTROS DE LEITURA (READING mEETINGS)
In 2009 the encontros de Leitura project involved 226 schools from ten Brazilian mu-
nicipalities, 1,200 teachers and 14,000 students. Carried out in partnership with the
Education and Documentation Center for Community Action (Cedac), the initiative
consists of person-to-person meetings between teachers and specialists to discuss
and develop activities that provide the first contacts of children with reading. The
initiative seeks to develop quality readers. It is aimed at pre-school professionals who
work with children between four and six years old.
The project lasts two years and, in 2009, a new cycle for ten new cities was initiated.
The project serves all the schools from the cities chosen. In 2009, 27 person-to-
person meetings were held followed by the distribution of children's and adult's
literature books to schools and teachers. The project will continue to be developed
in the same cities through the end of 2010.
FORMAR EM REDE
The project is the result of a partnership with the Avisa Lá Institute and the Razão
Social Institute, and is made possible by means of the support of many companies. It
is present in 15 Brazilian cities. natura supports the Formar em Rede project in the
schools of six municipalities with funds from the Crer para Ver program.
The project consists of the establishment of a virtual community composed of spe-
cialists and professionals from the municipalities (directors, educational coordinators,
teachers and technicians), by means of in-person and remote actions to improve the
quality of education to children between zero and six years old.
At the beginning of 2009, an in-person seminar was held with the participation of
representatives from the municipal education departments of the cities and schools
served. At the time, the diagnoses were prepared that gave rise to the institutional
projects that are currently being implemented at the schools. In total, 486 school, 1,000
teachers and around 10,000 students benefit from the Formar em Rede project.
background image
79
natura
annual
report
CHAPADA PROJECT
The Crer para Ver program has been supporting the Chapada Project, which is deve-
loped by the Chapada Institute of Education and Research, for 12 years. The project
aims at improving the quality of education by means of the training of elementary
and middle school teachers. The activities include training in the areas of reading, ma-
thematics and science to specific groups of directors, educational coordinators, te-
chnical supervisors and teachers, and also meetings with officials. The project serves
24 municipalities, 571 schools, 4,800 teachers and around 86,000 students from an
area that covers the interior of the state of Bahia, the region of Chapada Diamantina
and the semi-arid region of Bahia.
INITIATIVES OF THE CRER PARA VER PROGRAm IN 2009
CE - Encontros
Education and Documen-
de Leitura
tation center for Commu-
Project
nity Action (Cedac)
10
226
1.201
14,236
933,498.33
EI - Trilhas
Education and Documen
Project
tation center for Commu
nity Action (Cedac)
210
2,923
10,115
207,702
2,537,168.32
EmS - Chapada
Chapada Institute of
Project
Education and Research
24
571
4.855
86.255
470,400.00
CE - Formar
Avisa Lá Institute and
em Rede Project Razão Social Institute
6
486
1.076
10.792
109,550.00
EYA - Incentive
Bahia State
for reading in the Department
State of Bahia
-
-
-
-
22,130.81
Surrounding
municipal Education
Communities
Department of Cajamar
-
-
-
-
2,850.00
_____
_____
_____
_______
__________
250
4,206
17,247
318,985
4,075,597.46
PS: Pre-School
EMS: Elementary and Middle School
EYA: Education of Youngsters and Adults
Projects
developed
Projects
supported
Other
sponsorships
Work front/
Project
Name of partner
organization
Municipali-
ties served
N
o
of schools
served
N
o
of
participating
teachers,
coordinators
and directors
N
o
of students
benefited
Amount
invested by
the program in
2009 (R$)
SUPPORT AND SPONSORSHIPS
Natura supports and sponsors initiatives in three main areas: Brazilian culture, focused on mu-
sic; sustainable development, and the strengthening of civil society organizations. These topics
are an expression of our Reason for Being, well-being well, and reinforce the beliefs that guide
our corporate behavior.
Our main Brazilian culture initiative is the Natura Musical (musical Natura) Program. Created in
2005, the program supports efforts that represent the diversity and richness of Brazilian music
with projects from many artistic areas and from different levels of the production process. The
projects are chosen through invitations to bid (a national one and a regional one, in minas
Gerais) and funded through tax incentive laws and by Natura. Some projects are also directly
chosen by Natura.
In 2009 we supported 11 Natura Musical initiatives, which were added to the other 110
already supported since the beginning of the program. Among them were tours of the sin-
gers Arnaldo Antunes and Céu, the organization of the Dorival Caymmi Collection (www.
dorivalcaymmi.com.br) and support for the Grupo Ponto de Partida and Meninos de Araçaí and
Meninas de Sinhá projects, both from minas Gerais.
We also held the Natura Nós About Us festival to use music and other arts to awaken the
vision and raise the awareness of the audience on issues related to sustainability.
background image
80
natura
annual
report
HIGHLIGHTS OF THE 2009 NATURA MUSICAL (mUSICAL NATURA)
Dorival Caymmi Collection
Consists of the documentation of the life and work of one of the most important
Brazilian musicians. The complete works and personal collection of this artist from
the state of Bahia were organized and made available for free consultation on
the Internet (www.dorivalcaymmi.com.br). Part of the collection was included in
an exhibition on Caymmi held in Sala Tom Jobim at the Botanical Gardens of Rio
de Janeiro. The project was selected by means of the national invitation to bid of
Natura Musical.
Concerts and tours
The singer from São Paulo, Céu, presented her album "Vagarosa" in a tour sponsored
by natura in the five regions of Brazil. The project, selected by means of the national
invitation to bid of Natura Musical, included 14 concerts in 12 cities. In total, 15,000
people saw the concerts, paying low-price tickets.
we also sponsored the musician Arnaldo Antunes for the tour of his new album
"Iê Iê Iê". The work was inspired by the the 60s Brazilian beat music of the same
name), which gave rise to pop rock, but with contemporary lyrics, language and
arrangements. The project consisted of a tour around the five regions of Brazil,
totaling 16 concerts in 13 different cities.
Grupo Ponto de Partida and Meninos de Araçuaí
The People's Center of Culture and Development (CPCD) and the Ponto de Partida
Theater jointly carry out education and musical initiation initiatives for the children
who live in the city of Araçuaí, located in the Jequitinhonha Valley, state of Minas Ge-
rais. The project grew and, in contact with the fantasy of the theater and the songs
from the region, the "Meninos do Araçuaí" choir was born. In 11 years of existence,
the group performed five times, launched two albums and a DVD and developed
community projects in the city. The most recent performance, "Pra Nhá Terra", pays
homage to our Earth in a poetic and musical way and was sponsored by natura in
2009. In addition to the performance in four cities, the sponsorship included the
maintenance of the training activities, rehearsals and professional preparation and
the maintenance of the Casa da Morada, the headquarters of the project.
Meninas de Sinhá
The group is made up of women between 45 and 90 years and works on the preser-
vation of traditional cirandas and cantigas de roda folk songs from the state of Minas
Gerais. Selected by means of the regional invitation to bid in the state of Minas Ge-
rais, the project sponsored by natura involves a new print run of the album "Semean-
do e Colhendo
" and the promotion of performances in seven cities of Minas Gerais.
Natura About Us
In 2009 we promoted the Natura About US festival for the purpose of providing ex-
periences that reveal the power we all have to build a better world through music.
with a two-day duration, the event gathered 18,500 people who watched concerts
and participated in workshops such as the ones that were provided by the Grupo
Cultural AfroReggae
(AfroReggae Cultural Group). Among the Brazilian attractions,
the highlights were the groups Palavra Cantada, Grupo Ponto de Partida and Meninos do
Araçuaí
, Arnaldo Antunes, Lenine and Carlinhos Brown. The international attraction
was Sting.
background image
81
natura
annual
report
SUSTAINABLE DEVELOPmENT
In our efforts to promote sustainable development, we tried to have an enlarged view of the
issue. In 2009, we supported projects to raise awareness of the role of each of us in the deve-
lopment of a better world and in social entrepreneurship.
The main highlights were strengthening our partnership with the Grupo Cultural AfroReggae
(AfroReggae Cultural Group); the final stage of the sponsorship of the expansion of the DNA
Bank of Brazilian Flora Species conducted by the Botanical Gardens of Rio de Janeiro; and the
exhibition on mulheres do Planeta (Women of the Planet), of contemporary women from all
parts of the world, displaying their power, diversity, and beauty. We present below some of the
highlights of this initiative in 2009:
Grupo Cultural AfroReggae
Since 2006, natura has been the institutional sponsor of the nGo Grupo Cultural
AfroReggae
headquartered in Rio de Janeiro. In 2009, natura's sponsorship contributed
to the improvement in the quality and the expansion of the impact of the roughly 70
social projects carried out by the nGo with the communities where it works. Directly
and indirectly, over 10,000 people who live in the communities of Vigário Geral, Parada
de Lucas, Complexo do Alemão, Cantagalo-Pavão-Pavãozinho and nova Iguaçu were
benefited.
Estúdio Natura Musical no Centro Cultural Wally Salomão (Natura musical Studio at
the Wally Salomão Cultural Center)
we sponsored the installation of a professional recording studio in the wally Sa-
lomão Cultural center located in the community of Vigário Geral, Rio de Janeiro.
Called estúdio Natura Musical, the studio has state-of-the-art equipment that allows
for professional audio recording. The studio will make possible the training of poor
youngsters in the music recording business and, by selling its services, may also gene-
rate funds for the maintenance of the activities of the cultural center.
DNA Database of Species from Brazilian Flora
In 2009, we completed our support to the project that allowed for the inclusion of
2,000 new species in the DnA Database of Species from Brazilian Flora of the Bota-
nical Gardens of the city of Rio de Janeiro. The objective of this project is to gather
information on the genetics of the diversity of Brazilian flora. The DnA of relevant
species from Brazilian ecosystems, particularly from the Atlantic Forest biome, is
stored and preserved.
"Glaziou e os Jardins Sinuosos" (Glaziou and the Sinuous Gardens) Exhibition
Between november 2009 and January 2010, we sponsored the exhibition of the
French landscaper Auguste François Marie Glaziou, who lived in Brazil in the second
half of the 19
th
century and contributed to the urbanization of the city of Rio de
Janeiro. The exhibition, held in the historical building of the Museu do Meio Ambiente
(Environment Museum), at the Botanical Gardens of Rio de Janeiro, showed low
plants, 180º-degree digital film projections and models of landscaping projects that
value the relationship of man with his environment.
Mulheres do Planeta (Women of the Planet) Exhibition
Between May and July 2009, the French artist Titouan Lamazou presented his
Mulheres do Planeta exhibition sponsored by natura and held at oca, in São Paulo.
The exhibition was focused on a work on contemporary women presented by me-
ans of photography, painting, video, text and drawings made by the artist during seven
years of traveling around the five continents of the world. The exhibition also had
profiles of 19 Brazilian women. Titouan's project was recognized by Unesco thanks
to his engagement with the protection of women's rights.
background image
82
natura
annual
report
ENTITIES AND ASSOCIATIONS
We seek to enhance dialogue with organizations that distinguish themselves by work on issues
relevant to our industry, aligned with our business models, and to contribute to the development
of our vision of the world and of a sustainable society.
Together with the Institute of Technological Research (IPE), for example, we have been contribu-
ting since 2006 to the project for the construction and development of the Escola Superior de
Conservação Ambiental e Sustentabilidade (Higher School of Environmental Preservation and
Sustainability) in Nazaré Paulista, state of São Paulo.
The school was created to offer a master's degree in Preservation of Biodiversity and Sustainable
Development approved and recognized by the Federal Coordination Office for the Improve-
ment of Higher Education Personnel (CAPES). The course was created to make up for the lack
of professionals who are skilled to create and disseminate innovative preservation models of
biodiversity and sustainable development. The completion of the construction work is expected
for 2010 and the course, which is given in other locations, is already in its third year. In 2009 we
participated in the Global Entrepreneurship Week, organized in Brazil by the Endeavor Institute.
The event took place simultaneously in 60 countries, and Brazil's participation stood out.
We also continued to support the Global Reporting Initiative (GRI), which works in the prepa-
ration of international guidelines and standards for the preparation of sustainability reports. We
sponsor the organization of the GRI Stakeholders Council in Brazil and the GRI certification
training processes for Latin America.
For the Instituto Ethos de Empresas e Responsabilidade Social (Ethos Institute of Companies and
Social Responsibility), with which we have been partners since its foundation in 1998, we granted
funding for activities related to the practice of corporate responsibility. We sponsored meetings
of chairmen of companies associated with the institute, who discussed the principles of the Earth
Letter for the construction of sustainable companies and societies
SUPPoRT AnD SPonSoRSHIP - FUnDS InVESTED By nATURA (R$ THoUSAnDS)
2007
2008
2009
Sustainable development
2,519.80
2,782.00
1,500.00
Brazilian culture appreciation with focus on music
780.79
1,327.40
4,844.00
Strengthening of civil society organizations
1,270.78
1,771.88
2,102.07
Support and sponsorship ­ funds from
incentives (R$ thousands)
2007
2008
2009
- Federal Cultural Incentive Law (Rouanet Law)
426.00
450.00
474.00
- Law on investment in production and
co-production of cinematographic and audiovisual
projects, and in infrastructure for production and
exhibition (Audiovisual Law)
643.00
100.00
100.00
- Federal Cultural Incentive Law (Rouanet Law)
546.00
475.27
623.50
- Federal Cultural Incentive Law (Rouanet Law)
1,087.52
2,227.54
1,524.00
- Minas Gerais State Cultural Incentive Law
2,101.62
1,600.00
645.00
- São Paulo State Cultural Incentive Law
814.27
540.74
0.0
- Law on investment in production and
co-production of cinematographic and
audiovisual projects, and in infrastructure for
production and exhibition (Audiovisual Law)
455.00
300.00
820.00
Support and sponsorship - funds from
incentives ­ summary (R$ thousands)
2007
2008
2009
- Federal Cultural Incentive Law (Rouanet Law)
3,588.80
3,332.00
2,621.50
- Minas Gerais State Cultural Incentive Law
2,101.62
1,600.00
645.00
- São Paulo State Cultural Incentive Law
1,816.78
2,247.14
0.0
- Lei de investimento na produção e co-produção
de obras cinematográficas, audiovisuais e infraestrutura
de produção e exibição (Lei do Audiovisual)
1,098.00
400.00
920.00
Support and sponsorship ­ investment
by theme (R$ thousands)
2007
2008
2009
- Sustainable development
3,588.80
3,332.00
2,074.00
- Brazilian culture appreciation with focus on music 5,239.20
5,995.69
7,833.00
- Strengthening of civil society organizations
and governmental organizations
1,816.78
2,247.14
2,725.57
background image
83
natura
annual
report
CREATION OF ENVIRONmENTAL VALUE
Our commitment to environmental issues is based on the belief that the continuity of our
business necessarily involves reducing impacts along our entire value chain.
In 2009, we took important steps to improve our environmental performance: internally, we
disseminated our Policy for the Sustainable Use of Biodiversity and Traditional Knowledge;
we achieved a 5.2% reduction in our relative greenhouse gas (GHG) emissions; we increa-
sed to 79.2% the percentage of renewable raw materials in our formulas; and we progressed
in the development of lower impact packaging.
CARBON NEUTRAL
natura supports an urgent review of the current production and consumption pro-
cesses to manage climate change. This requires reducing greenhouse gas emissions.
our Carbon neutral Program, created in 2007, has different work fronts that en-
compass social, economic, and environmental approaches to minimize the impacts
of our activities.
we have set a target of reducing our relative emissions by 33% between 2007 and
2011, based on the inventory we carried out in 2006. Since 2007, we have been
offering products that are GHG neutral. This has been possible thanks to efforts on
three fronts: carrying out an inventory of our emissions in all stages of our value
chain, projects for reducing emissions, and investments in socio-environmental pro-
jects to offset the emissions that we are not able to avoid.
At the end of 2009, we achieved a reduction of 5.2% of relative emissions of Co2
equivalent per kilo of product billed, exceeding our target of 3% for the year. with
respect to the volume of total emissions, we recorded an increase of 22% in 2009, to
245,796 metric tons of Co2e compared to 2008, when our Co2e emissions totaled
201,493 metric tons.
(Graph 1 e 2)
These calculations took into consideration the total volume of our emissions from
the extraction of raw materials to the final disposal of the product.
INVENTORY OF EmISSIONS
The revisions are a result of the implementation of the improvements that, every year, we
try to include in our inventory, which follows the standards of the Greenhouse Gas Protocol
(GHG Protocol) and the ABNT NBR ISO 14064-1 Standard. They both establish rules of con-
ception, development, management and preparation of GHG emission inventories. Our 2009
inventory was verified by the independent consulting firm PricewaterhouseCoopers.
We also tried to improve our knowledge and exchange experiences on the calculation of emis-
sions. We participated in a series of initiatives, such as the Brazilian GHG Protocol Program, of
which we are founding members, and the workgroup coordinated by the World Resources
Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). This
workgroup is developing international protocols for inventories of emissions for the supply
chain of companies.
In 2009 we made progress in the construction of methodologies that will allow us to identify
the carbon footprint of each of our products, that is, the GHG emissions of every item in
our portfolio.
Natura does not issue or use substances that deplete the ozone layer and, as emissions of the
NOx and SOx gases are not significant, we do not monitor these emissions.
REDUCTION INITIATIVES
We reduced our relative GHG emissions through a number of initiatives. In 2009, we
contracted a consulting company that helped those responsible for our internal processes
and the Natura Business Units identify new opportunities to reduce emissions. At the
same time, we tried to increase our management's understanding of climate change.
1. ToTAL Co2e EMISSIonS
(In METRIC TonS)
1
2
195.154
201.493
245.795
2007
2008
2009
1. CO2e (or CO2 equivalent): measure used
to express greenhouse gas emissions, based
on the global warming potential of each one.
2. The model of inventory calculation was
improved in 2009. The bases for 2007 and
2008 were recalculated.
2. RELATIVE EMISSIonS
(KG oF Co2e/KG oF BILLED
PRoDUCT)
1 2
4,02
3,82
3,63
2007
2008
2009
background image
84
natura
annual
report
In 2009 we joined the World Wildlife Fund's (WWF) Climate Savers project, through
which we took on the target of reducing by 10% our absolute GHG emissions related to
the so-called scope 1 and 2, in the period between 2008 and 2012. Scope 1 is related
to the company's direct emissions (fixed and mobile sources of energy), and scope 2
accounts for indirect emissions deriving from energy purchases. In 2009 we reduced
emissions in these two scopes by 3%.
Among the 2009 reduction projects, we highlight the optimization of resources from the
road network and delivery of products, based on a more productive use of our regional
distribution centers. This was possible due to developing new calendars with delivery
dates and frequencies at the different Regional Units. Accordingly, we were able to strea-
mline the transportation of products, eliminating trips with smaller loads. This generated
cost savings and a 9% relative reduction of GHG per kilo of transported product.
Another significant action to reduce the environmental impacts of product transportation was
the change from air to sea transport in the operations in mexico and Peru. Since 2007, coastal
shipping has also been used to supply the Distribution Center in Jaboatão dos Guararapes
(state of Pernambuco) with finished products, partially replacing road transportation.
OFFSETTING PROJECTS
The emissions that cannot be reduced by Natura are offset by projects that are selected
throughout Brazil by means of invitations to bid. The social effects of the projects also play
a role in their selection.
Last year, four were chosen: Carbono, Biodiversidade e Comunidade no Corredor Ecológico Pau-
Brasil (Carbon, Biodiversity and Community in the Pau-Brasil Ecological Corridor); Uso de
Biomassa Renovável em Indústrias Cerâmicas (Use of Renewable Biomass in Ceramic Industries);
Carbono Socioambiental do Xingu (Socio-environmental Carbon of Xingu); and Fogões Eficientes
no Recôncavo Baiano (Efficient Stoves in the Recôncavo Baiano).
For an analysis of the candidates and selection of the projects, we had the support of a con-
sulting firm that is specialized in climate change and of a panel of specialists including both
Natura employees and experts, such as Dr. José Goldemberg, professor of the University of
São Paulo (USP), member of the Science Academy, former minister of Science and Technology
and former São Paulo State Environment secretary; Thelma Krug, coordinator of the National
Institute of Space Research (INPE), member of the Board of the Intergovernmental Panel on
Climate Change (IPCC) and former secretary of Climate Change of the ministry of Environ-
ment; and marcos Buckeridge, professor of the Bioscience Institute of USP and member of the
IPCC. All projects work with the promotion of recovery of forests in devastated areas and
the replacement of fossil fuels with renewable energy.
Learn about the GHG emission offset projects that are supported by Natura.
Carbono, Biodiversidade e Comunidade no Corredor Ecológico Pau-Brasil
(Carbon, Biodiversity and Community in the Pau-Brasil Ecological Corridor)
BioAtlântica Institute (Ibio)
Forest recovery project that is carried out at the Pau-Brasil national Park and at the
Monte Pascoal national Park (Porto Seguro, state of Bahia). The target is to offset
79,050 metric tons of Co2e in 30 years.
Uso de Biomassa Renovável em Indústrias Cerâmicas (Use of Renewable Biomass in
Ceramic manufacturing Companies)
Carbono Social Consulting Firm
It aims to replace native wood in the burning process for firing roof tiles and bricks
with renewable biomass such as bamboo, sawdust, coconut shells and sugarcane ba-
gasse. The target is to offset 60,000 metric tons of Co2e in up to one year.
Carbono Socioambiental do Xingu (Socio-environmental Carbon of Xingu)
Socioambiental Institute (ISA) and Centro de Vida Institute (ICV)
It provides for the recovery of 116 hectares of devastated riverbank forests and
springs that form the Xingu River in the state of Mato Gosso. The target is to offset
40,000 metric tons of Co2e in 30 years.
background image
85
natura
annual
report
Fogões Eficientes no Recôncavo Baiano (Efficient Stoves in the Recôncavo Baiano)
Ambiental PV Consulting Firm
It provides for the replacement of rudimentary wood stoves of the families that live
in rural communities in the region of the Recôncavo Baiano with more efficient sto-
ves, reducing the volume of burnt wood and improving the quality of people's lives.
The target is to offset 18,880 metric tons of Co2e in eight years.
we also monitor projects from previous years by means of telephone contacts and
annual visits to check on their progress. Currently, there are two projects, started in
2007 that are still in progress.
Forest Carbon - Recovery and preservation of natural resources in rural settlements
Ecológica Institute
one hundred and seventy thousand seedlings of native species are being produced
in the region of Cantão, state of Tocantins. The Institute is also encouraging other
income generating activities, such as the production of handicrafts, honey, sweets,
liqueurs and vegetable oils. At the end, the project will have offset 60,000 metric tons
of Co2e in 20 years.
Recompositioning of landscape and agroforestry systems
Ecologic Research Institute
It aims at recovering the forest with native species. In 2009, the program recovered
55 hectares of forest and implemented 129 hectares in agroforestry systems. The
final offset will be 60,000 metric tons of Co2e in 30 years.
At the end of 2009, we invited new bids on projects that will offset, starting in 2010, emissions
for the 09-10 biennium. A total of 82 proposals were received and are being analyzed; the
results will be disclosed in the mid-2010.
Our Carbon Neutral Project helped strengthen our leading role in national and international
debates on voluntary programs on climate change. Among these programs, we highlight the
Carta Aberta ao Brazil (Open Letter to Brazil) on climate change, an initiative organized by the
Ethos Institute and the Sustainable Amazon Forum, and the Empresas pelo Clima (Companies
for Climate - EPC) project of the Center of Studies on Sustainability of the Getulio Vargas
Foundation. We signed the Position Paper of the Brazilian Business Council for Sustainable
Development (CEBDS). In the international sphere, we joined the Copenhagen Communiqué
of the Corporate Leaders Group on Climate Change (CLGCC), and Caring For Climate of
the Global Compact. Natura is also a member of the Climate Neutral Network of the United
Nations Environment Programme (UNEP).
To learn more about the details of the carbon offsetting projects we support,
please visit www.natura.net/carbononeutro
BIODIVERSITY
We have been working on a wide variety of fronts related to biodiversity. We are close to the
supplier communities of these inputs, and our Legal and Government Relations departments
strive to influence the development of a legal framework for access to traditional knowledge
and wild genetic resources. We have been responsible in our use of biodiversity, as shown in
Natura's Policy for the Sustainable Use of Biodiversity and Traditional Knowledge, which was
approved at the end of 2008 and includes guidelines for the sharing of benefits and supply of
inputs from biodiversity. This is done through sustainable extraction, sustainable stewardship
and extractivist systems, and systems based on family farming (learn more on page 50).
The Policy results from our experience as part of a group that has tackled complex topics
and relatively unexplored principles of the Convention on Biological Diversity.
It brings together guidelines and parameters for action for all of the company areas involved
in the research and development of products based on genetic resources and/or their asso-
ciated traditional knowledge. Externally, especially for our network of relationships, it serves,
among other things, as an instrument of support for decision-making on the dissemination
of our values and the way we work.
background image
86
natura
annual
report
The Policy contains six additional documents, which establish guidelines for the sharing of
benefits from access to the genetic heritage and associated traditional knowledge; supply
of inputs from biodiversity; relationships with the communities; technology development;
product development; and marketing and communication. Its implementation is regulated
and explained by means of the Natura management System.
In 2009, we disseminated the Policy internally in training courses to all areas and all employees
who work, directly or indirectly, in the process of the sustainable use of biodiversity.
In 2009, we carried out a person-to-person meeting with 22 experts on biodiversity and also
virtual debates on this topic. Natura's process of engagement in biodiversity won first place
in the Eco Amcham Award, in the sustainable business model category. The success of this
model, as well as its continuous improvement, depends on the engagement and participation
of several partners with whom we work and on the quality of the relationships we establish
with them. None of the links in this chain can manage the challenges of sustainability alone. In
2010, the International Biodiversity Year, our objective is to disseminate the Policy externally,
especially to the supplier communities.
Natura is a founding member and a vice president of the board of the Union for Ethical
BioTrade (UEBT). This is an international association, created in 2007 in Geneva to promote
the ethical trade of products from biodiversity. Natura will host the 2010 meeting of UEBT.
In 2010 we will also support a project of the UN Conference on Trade and Development,
whose work includes issues related to trade in items harvested from nature.
CERTIFICATION OF INGREDIENTS
We work carefully with respect to the ecological limits of the production of inputs from
biodiversity that we purchase from our supplier communities. We seek to ensure that pro-
duction is within the capacity of the environment. When we need to increase the volumes
produced, we take care to look for new areas and other suppliers who will meet Natura's
assumptions.
Natura does not use invasive or habitat conversion species, which would imply, for example,
the transformation of a natural environment to meet production interests. We search for
raw materials at places where they occur naturally, avoid monoculture and prefer produc-
tions that are pesticide-free, in accordance with the organic production models.
To ensure sustainable and proper stewardship practices in our processes of cultivation,
extraction and production of ingredients, we implemented, in 2008, the Program for the
Certification of Plant Raw materials. It covers family farmers and traditional communities
whose production is certified based on three different models: organic, forestry and sustai-
nable farming.
Except for the Frutífera (Fruitful) organic tea line, for which the final product is certified,
in our cosmetic items, the focus of the certification is on the origin of inputs and not on
finished products.
The organic certification takes place by means of four entities: Biodinâmico Institute (IBD),
Ecocert, International Agricultural and Farming Organization (OIA) and Ecological market
Institute (ImO). The forest stewardship certification is issued by the Forest Stewardship
Council (FSC). With respect to sustainable agriculture, the certifying body is the Sustainable
Agriculture Network (SAN). Among the many requirements for obtaining the certification
is the traceability of production, a process in which the producer documents and provides
accountability on the origin of all volumes produced to the certifying entity.
Currently 31 Natura ingredients are certified, eight of which were included in 2009, 19.2%
more than in 2008. Of the new certifications, four were obtained for raw materials for the
perfumery and cosmetics areas, among which were Lemon Basil (Ocimum americanum)
and Açaí berries (Euterape oleraceae). The other four ­ Lemon Balm (melissa officinalis),
Carqueja (Baccharis trimera), Peppermint (mentha piperita) and Fennel (Foeniculum vulga-
re) ­ are products used in our Frutífera (Fruitful) line.
Last year, we excluded three ingredients from the list of certified ingredients: Guarana and
Pariparoba, due to the discontinuation of the products that use them, and Buriti Palm (mau-
ritia flexuosa), which was no longer certified because of a change of supplier area.
We are on the lookout for other certified areas to meet the demand (learn more on page 50).
background image
87
natura
annual
report
ToTAL nUMBER oF CERTIFIED InGREDIEnTS
1
2007
2008
2009
Total certified ingredients (unit)
24
26
31
Percentage of total certified species
2
(%)
51
54
58
1- Only inputs in the form of waxes, oils, extracts, and essential oils (cosmetics and teas) are considered natural inputs.
2- The calculation of the percentage of raw materials certified was readjusted on account of the changes in the scope of the
calculation basis used, which started to include, besides the raw materials obtained for the production of cosmetics, the inputs
acquired for the Frutífera line products.
Of all the inputs used by Natura, only two are developed from species that are on the list of
endangered species compiled by the Brazilian Institute of the Environment and Renewable
Natural Resources (Ibama) and the International Union for the Conservation of Nature and
Natural Resources (IUCN). They are Brazil's nut (Bertholletia excelsa) and yerba mate (Ilex
paraguariensis). For this reason, we financed studies in partnership with Embrapa Genetic
Resources and Biotechnology for the preservation of these species. These raw materials are
acquired exclusively from areas certified by the FSC.
STAGE I
3
FASE II
4
FASE III
5
Ingredients/Ekos
State
Begining End Begining End Begining End
Production
Certification*
System
________________ ______________ _____ ______ _____ ______ _____ ______ ________
__________
Andiroba
Amazonas
X
X
X
Traditional stewardship
Carapa guianensis
Açaí Berry
Rondônia / Pará
X
X
X
X
X
X
Agroforestry System
SAN
Euterpe precatoria
Lemongrass (F)
Paraná/ São Paulo X
X
X
X
X
X
Cultivation
ECOCERT
Cymbopogon citratus
Brasil Nut
Amapá
X
X
X
X
X
X
Traditional stewardship
FSC
Bertholletia excelsa
Cacao
Bahia
X
X
X
X
X
X
Agroforestry System
IBD
Theobroma cacao
Breu
Amapá
X
X
X
X
X
X
Traditional stewardship
FSC
Protium pallidum
Cupuaçu
Rondônia
X
X
X
X
X
X
Agroforestry System
SAN
Theobroma grandiflorum
Passion Fruit
minas Gerais
X
X
Cultivation
Passiflora edulis
Yerba maté
Rio Grande do Sul X
X
X
X
X
X
Traditional stewardship
FSC
Ilex paraguaiensis
murumuru Palm
Amazonas
X
X
X
Traditional stewardship
Astrocaryum murumuru
Surinam Cherry
São Paulo e Paraná X
X
X
X
X
X
Organic cultivation
ECOCERT
Eugenia uniflora
and stewardship
Jointed Flatsedge
Pará
X
X
X
X
X
X
Cultivation
IBD
Cyperus articulatus
STATUS DO PROGRAmA DE CERTIFICAçãO DE ATIVOS - NATURA 2009
1 2
background image
88
natura
annual
report
STAGE I
STAGE II
STAGE II
Ingredients/
other lines
State
Begining End Begining End Begining End
notes
Certification*
________________ ___________
______ ______ _____ ______ _____ ______
___________
__________
Açaí Berry
Pará
X
X
X
X
X
X
Organic cultivation
OIm/ImO
Euterpe oleracea
and stewardship
Arabian Coffee
minas Gerais
X
X
X
X
X
X
Cultivation
SAN
Coffea arabica
Fragrant Granadilla
São Paulo
X
X
X
X
X
X
Cultivation
IBD
Passiflora alata
Paramela
Patagônia /
X
X
X
X
X
X
Stewardship
OIA/ImO
Adesmia buronioides
Argentina
Palo Santo
Equador
X
X
X
X
X
X
Stewardship
ECOCERT
Bursera graveolens
Copaíba
Amazonas
X
X
X
X
X
X
Organic cultivation
ECOCERT
Copaifera spp
Green Tea (F)
Paraná
X
X
X
X
X
X
Stewardship
ECOCERT
Camelia sinensis
Candeia
minas Gerais
X
X
X
X
X
X
Stewardship
FSC
Eremanthus erythropappus
Lemon Balm (F)
Paraná
X
X
X
X
X
X
Organic cultivation
ECOCERT
Melissa officinalis
Carqueja (F)
Paraná
X
X
X
X
X
X
Organic cultivation
ECOCERT
Bacharis genisteloides D.C.
Peppermint (F)
Paraná
X
X
X
X
X
X
Organic cultivation
ECOCERT
Mentha piperita L.
Chamomile (F)
Paraná
X
X
X
X
X
X
Cultivation
ECOCERT
Chamomilla recutita
Fennel (F)
Paraná
X
X
X
X
X
X
Organic cultivation
ECOCERT
Foeniculum vulgare Miller
Toothache Plant
São Paulo
X
X
X
X
X
X
Organic cultivation
IBD
Spilanthes oleracea
Lemon Brasil
Pará
X
X
X
X
X
X
Organic cultivation
IBD
Ocimum americanum
1. We have seven ingredients certified in phase III that are part of the portfolio of products that have not yet been launched in the market. Therefore, they are not listed in this table.
2. The raw materials followed by an (F) are part of the Frutífera (Fruitful) organic tea line.
3. Phase I: Internal process of identification and selection of a potential supplier area. This phase is characterized by the typology of producers, the organization of the community
and the existing type of stewardship (agricultural or forest).
4. Phase II: Preparation of certification strategies, with discussion of the processes with plant product suppliers, choice of the certifying body and preliminary analysis of the
supplier area by this body (when necessary).
5. Phase III: Inspection of certification in the supplier areas, implementation of the action plan to meet the compliance requirements of the certifying bodies and opinion of the
certifying body to obtain the seal.
* Forest Certification by the FSC (partner certifying entity ­ ImAFLORA)
Sustainable Agriculture Certification, SAN seal (partner certifying entity - ImAFLORA)
Organic Certification, IBD seal (partner certifying entity - IBD)
Organic Certification, Ecocert seal (partner certifying entity - ECOCERT)
Organic Certification, OIA/ImO seal (partner certifying entity in Argentina)
background image
89
natura
annual
report
AREAS OF OPERATION
Natura has areas that supply inputs of species from biodiversity from all over Brazil. Some
of these raw material suppliers are located in areas protected by the National System of
Preservation Units (SNUC). They are the Extractivist Reserve of middle Juruá, in the state of
Amazonas, and the São Francisco Community, located in the Sustainable Development State
Reserve of Iratapuru, in the state of Amapá.
The Extractivist Reserve of middle Juruá covers an area of 253,000 hectares of protected area,
the stewardship of andiroba and murumuru palm takes place in an area of less than 1% of the
total reserve. The sustainable stewardship of Brazil´s nut, copaiba and breu branco takes place
in area of approximately 4,000 hectares of the 842,000 hectares of the Extractivist Reserve of
middle Juruá. All the work has the approval of these Preservation Units.
Natura's headquarters, located at km 30.5 of the Anhanguera Highway, in the municipality of
Cajamar, state of São Paulo, is in an area of 646,000 sq. m in an Environmental Protection Area.
We have developed a project for the recovery of the native forest in Cajamar by means of
which, in 2009, 5,000 seedlings of 114 species from the Atlantic Forest biome were planted.
The Itapecerica da Serra Unit, on the other hand, is at Régis Bittencourt Highway in an area of
96,543 sq. m in the Protection and Recovery Area of the Springs of the Guarapiranga Water
Basin. In 2008 we completed a project for the recovery of the riverbank forest and, since 2009,
we have been handling the maintenance of the area.
The recovery projects developed in Cajamar and Itapecerica da Serra are monitored by the
State Department for the Protection of Natural Resources (DEPRN), a governmental body
that is responsible for this issue. Both units include permanent preservation reserves. We carry
out administrative activities, in both these units, but our production plant is located in Cajamar.
These operations are in compliance with the applicable legal requirements. Together, the two
units cover an area that is equivalent to 90 soccer fields.
ImPACT OF PRODUCTS
In order to monitor the impacts of the packaging of our products, we use the Life Cycle
Assessment (LCA) tool. This methodology, which has been applied since 2001, allows us to
quantify the environmental impacts of packaging within a complete cycle, from the extrac-
tion of raw materials through production and use, to final disposal.
In 2009, the indicator that measures the environmental impact of packaging was at 69.5 mPt/
KG (millipoints per kilo of product content), lower than in 2008, when this indicator was
71.3 mPt/kg. We attribute this primarily to the reduction of the mass of support materials
used by consultants, such as the Revista Natura (Natura magazine).
(Graph 1)
We look for innovative technologies for the development of our packaging. We still use the
concepts of ecological design to guide for the design and choice of our new packaging; these
include reducing the mass of packaging and using raw materials that have a lower negative
impact.
Since 2007 we have been providing an environmental table for our products, giving con-
sumers information on the origin, processing and percentage of certified raw materials, in
addition to percentages on the use of recycled and recyclable materials and the number of
refills. The table has an educational purpose, contributing to our customers' awareness of the
environmental impacts of our products.
We comply with all legal requirements to provide information on the ingredients used. Our
labels are in accordance with the legislation in effect and respect all resolutions related to
cosmetics determined by the National Agency of Sanitary Vigilance (Anvisa).
In 2009 the weight and the volume of the materials we use in our production process in-
creased for both packaging and raw materials. This growth was proportional to the increase
of our production, of around 23%.
1. EnVIRonMEnTAL IMPACT oF
PACKAGInG PER QUAnTITy oF
PRoDUCTS (MPT/KG)
73,4
71,3
69,5
2007
2008
2009
background image
90
natura
annual
report
0,51
0,48
0,52
2007
2008
2009
ToTAL USE oF MATERIALS PER TyPE (EXCEPT wATER) In THoUSAnDS ¹
2007
2008
2009
Kilograms
24,454.0
22,434.4
27,991.3
Liters
8,274.6
8,792.0
10,813.9
1. Refers to the Cajamar unit.
In 2009 we recorded a drop in the percentage of recycled materials, from 13% in 2008 and
to 10.4%. This result is related to the decision to use paper certified by the FSC instead of
recycled paper to manufacture the Natura magazine, which also resulted in an important re-
duction in the amount of GHG emissions.
(Graph 1)
In 2009, the share of products with refills in sales was below the target set for Brazil, which
was 19% of total items billed. At the end of the year, it stood at 18.4%, despite the fact that we
maintained our efforts to educate and raise awareness.
PERCEnTAGE oF REFILLS on BILLED ITEMS (%)¹
2007
2008
2009
Brazil
21.3
19.9
18.4
Argentina
21.1
20.7
15.9
Chile
16.1
16.1
11.7
Colombia
8.1
12.1
12.2
France
9.9
9.3
8.5
Mexico
11.2
11.6
11.5
Peru
21.3
21.4
18.6
Venezuela
2
6.0
8.1
n.a
1. Corresponds to total refills billed divided by total items billed.
2. Operations in Venezuela were discontinued in August 2009.
We explain this result to the many launches of commemorative and perfume boxes that do
not have refills. However, we have noticed that refills are well accepted by our consumers.
Today, among the products that offer this option, the choice for the refill reaches 50 of sales
revenues%. Of the 685 products in our portfolio at the end of 2009, 114 ­ 15.4% of the total
­ offered this choice.
In the foreign operations, we recorded a significant drop in the use of refills in Argentina, Chi-
le and Peru. In Colombia, France and mexico, on the other hand, the use of refills remained
stable in comparison with the previous year, and in France and mexico it declined slightly. This
is because we reduced the number of promotions that are focused on refills only, seeking to
increase the balance between promotions and the sale of regular products. As a result, we in-
creased the possibility of new users taking advantage of the special conditions of a promotion
as the channel is frequently renewed.
WATER AND EFFLUENTS
In order to make the data on our impacts more accurate and manage these impacts more
rigorously, we included the data of outsourced companies that manufacture our products in
our indicators. This explains the increase of 8.7% in the consumption of water per unit billed
in 2009 in relation to the previous year. In the same period that we had an increase of 14.4%
in the volume of units billed, our absolute consumption of water was 24.3% higher than
in 2008. In addition to the relative consumption by outsourced companies, which totaled
34.2%, the inclusion of new sites in the calculation, such as the Natura Houses and Advanced
Logistic Centers, also contributed to the increase in absolute consumption.
(Graph 2)
All water used in the facilities in Cajamar and Itapecerica da Serra come from artesian wells
due to the lack of a public supply system for both plants. The underground water source is
the water table of a crystalline aquifer. The extraction of water meets the regulations of the
permits granted by the State Department of Water and Electric Energy (DAEE). In the mid
2009, we obtained a permit for a second well.
1. RECyCLED MATERIALS
1
(%)
1. The indicator takes into consideration
packaging materials and distribution
materials (magazines, distribution boxes,
and bags) recycled post consumption.
10,7
13,0
10,4
2007
2008
2009
1.wATER ConSUMPTIon PER UnIT
BILLED (GRAMS/UnIT)
1
1. This year, the amounts generated by
outsourced companies that manufacture
our products were included to better
portray the reality of the indicator. As a
result, the historical data were changed.
background image
91
natura
annual
report
wATER ConSUMPTIon PER woRK UnIT (CUBIC METER)
2007
2008
2009
Cajamar and Itapecerica da Serra plants
114,694
112,342
123,012
other natura plants in Brazil²
2,757
11,894
27,813
natura's outsourced manufacturing companies ³
28,549
37,090
49,783
Total water consumption
4
146,000
161,326
200,608
1. The water consumption in Cajamar and Itapecerica da Serra is measured by water meters.
2. The consumption of water in other Natura plants refers to the plants in Alphaville and Benevides, Natura Houses, and Advan-
ced Centers. This information started to be gathered in 2007. In 2009 we included in the calculations the water consumption of
another five Natura Houses, all of which were inaugurated last year.
3. With respect to the consumption by outsourced companies that manufacture our products, they are advised to apportion total
water consumption in proportion to the production volume for Natura.
4. Until 2008, the outsourced companies were not included. However, they are now included to better portray the reality of the
indicator. As a result, the historical data were changed.
At the end of last year, we carried out a study on the water sources at the Cajamar unit and its
surrounding areas to identify risks of contamination and find out the real supply capacity. The result
of this study, still incomplete, will direct preventive actions over the course of 2010.
We know that reducing water consumption is a challenge we have to face, and we are trying
to work on many fronts to streamline our production and reduce consumption. With a view to
understanding and adopting increasingly better water use practices, we joined in 2009 the Dutch
Water Footprint program, which involves a number of international companies and specialists from
around the world to determine a methodology that can help calculate the water footprint of our
products (it measures how much of the water available on our planet is necessary to meet the
production and consumption demand of a certain company or a certain product). The model
takes into consideration the complete analysis of the product lifecycle, from the extraction of the
raw material to the final disposal of the waste.
Our effluents go through the Effluent Treatment Station (ETE) before being discharged. The quality
after treatment fully meets the legal applicable requirements, respecting all discharge conditions and
standards provided for in the Brazilian legislation. In Cajamar, the effluents are discharged into the Ju-
queri river, which is considered a class III river, that is, its water can be used in household supply after
conventional treatment. The Effluent Treatment Station of Itapecerica da Serra, on the other hand,
since it is in an area for the protection of springs, infiltrates its effluents in the soil after treatment in
a conventional station, the organic load removal efficiency of which is, on average, 91%.
(Graph 1)
PERMEATED CAJAMAR
Legal parameter
2007
2008
2009
DBo (mg/l)
60
3.0
5.5
6.0
DQo (mg/l)
150
40.0
43.6
43.0
oils and grease (mg/l)
120
5.0
7.8
7.1
TREATED EFFLUEnT ITAPECERICA DA SERRA
Legal parameter
2007
2008
2009
DBo (mg/l)
60
41.0
19.6
20.2
DQo (mg/l)
150
107.0
73.2
69.0
oils and grease (mg/l)
120
10.0
8.1
7.5
In 2009, we spilled liquid soap waste in the Juqueri River in April, which produced a large
amount of foam. The incident took place at the Prata River Basin plant in Cajamar. We notified
the state environmental control agency (Cetesb), which drew an assessment notice. After the
incident, we established more rigorous routines for unloading liquid materials, such as raw
materials and waste from the production process. We also conducted surveys of the entire
network of industrial and house effluents of Natura, and we found ways to improve the ins-
tallation of equipment in our plants.
The volume of recycled and reused water in 2009 was 35,800 cubic meters, remaining stable
in comparison with the previous year. However, we verified a reduction in the amount of
reused water as a percentage of all the water treated at our effluent treatment stations at the
Cajamar and Itapecerica da Serra units, from 38% in 2008 to 35% in 2009. There was a 7.42%
increase in the volume of effluents generated and treated last year in comparison with 2008.
1. SIGnIFICAnT DISCHARGES
To wATER (CUBIC METERS)¹
1. Refers to the Cajamar and Itapecerica
da Serra units.
89.063
94.126
101.672
2007
2008
2009
background image
92
natura
annual
report
PERCEnTAGE AnD ToTAL VoLUME oF wATER RECyCLED AnD REUSED
2007
2008
2009
Recycled and reused water (cubic meters) ¹
29,773
35,824
35,838
Reused water as a percentage of all the water
treated at the effluent treatment station¹ (%)
36
38
35
1. Refers to the Cajamar and Itapecerica da Serra units.
ENERGY
In 2009, we were able to reduce the total consumption of energy of the operations in Caja-
mar and Itapecerica da Serra by 1.55%, even in an environment that recorded an increase in
average temperature of 0.4ºC and an increase of 14.4% in the volume of units billed. There
was a reduction of 19% in the consumption of energy per unit billed. This was possible
thanks to the work of the multidisciplinary energy committee and to a series of initiatives
and projects to reduce consumption and improve the quality of the energy used, with an
investment of approximately R$ 450,000.
(Graph 1)
ToTAL EnERGy ConSUMPTIon (JoULES X 10
12
)
2007
2008
2009
Energy consumption in the Cajamar and
Itapecerica da Serra plants (joules)¹
135.9
126.4
124.4
other natura plants in Brazil²
8.2
13.4
14.5
Consumption of energy by natura's
outsourced manufacturing companies³
27.7
45.3
32.5
Total energy matrix (joules)
4
171.8
185.0
171.5
1. The energy consumption in Cajamar and Itapecerica da Serra is measured by transducers and software monitors.
2. The consumption of energy in other Natura plants refers to the plants in Alphaville and Benevides, Natura Houses, and Advan-
ced Centers. This information started to be gathered in 2007. In 2009 we included in the calculations the energy consumption
of another five Natura Houses, all of which were inaugurated last year.
3. With respect to the consumption of outsourced companies that manufacture our products, they are advised to apportion total
energy consumption in proportion to the production volume for Natura.
4. Until 2008, the outsourced companies were not included. However, they are now included to better portray the reality of the
indicator. As a result, the historical data were changed.
One of the actions was to implement enthalpy wheels in the refrigeration system of the
plants in Cajamar. Through this mechanism, when the external temperature is lower than
the internal one, the system allows the cold air to be sucked back inside the unit, pro-
moting the cooling of the room. This technology, developed in India, is innovative among
Brazilian companies. Also, the roofs received thermal paint; hybrid filters were installed;
utility systems were automated; new luminotechnical technologies were implemented; and
more efficient equipment in the utility and plant processes was acquired.
We verified a drop of 41.3% in the consumption of diesel oil in generators, arising from
three factors: improvement in the quality of the electric network, resulting is less power
failures and, consequently reducing the need to use diesel-powered generators; greater
assertiveness in the preventive maintenance of generators; and diesel oil consumption
automation, reducing leakages and overflowing of tanks.
In contrast, we reported an increase of 3.8% in the consumption of liquefied petroleum
gas (LPG), a non-renewable energy. This was because, historically, the consumption of this
gas is proportional to the growth in the volume of units billed. In 2010, we expect to re-
place a good part of the LPG by alcohol in the boilers.
DIRECT EnERGy ConSUMPTIon, By PRIMARy SoURCE SEGMEnT (JoULES X 10
12
)
2007
2008
2009
Primary electricity source
104.1
95.9
94.0
Self-generated electricity (diesel-powered generator)
0.03
0.03
0.03
Diesel oil used in generators
2.3
2.7
1.6
Consumption of LPG
29.5
27.8
28.9
Total
135.9
126.4
124.5
1. EnERGy ConSUMPTIon
­ EnERGy MATRIX PER UnIT
BILLED (KJoULES/UnIT)
1
1. For 2009 calculations were adjusted,
and the numbers generated by outsourced
companies that manufacture our products
were included to better portray the reality
of the indicator. As a result, the historical
data were changed. .
598,9
552,1
447,3
2007
2008
2009
background image
93
natura
annual
report
1. 2009 EnERGy MATRIX
(CAJAMAR AnD
ITAPECERICA DA SERRA)
75,9%
Electric Energy
Diesel
Solar Energy
LPG 23,1%
1,0%
0,01%
In 2009 we also signed a three-year agreement with a new supplier to ensure that all the elec-
tric energy consumed at the Cajamar and Itapecerica da Serra plants comes from a renewable
source: small hydroelectric plants. The agreement, signed with Light Esco, became effective at
the beginning of 2010. In 2011, the Benevides unit will be included in this agreement.
moreover, we are developing the largest private project in Brazil for the consumption of solar
energy. In 2009, new solar panels were acquired to increase Natura's use of alternative energy.
The solar energy used in the lighting of the parking lot and heating the water in the changing
rooms and kitchen generates a savings of 19.96 x 109 joules. It corresponds to just 0.01% of
the company's energy matrix, totaling 3 GWh/month, but it is equivalent to the consumption
of one of the four administrative floors of the Cajamar complex. We saved an additional 1.95
x 1012 joules of energy through the implementation of new technologies, procedures, and
policies.
(Graph 1)
WASTE
Natura manages the solid waste from its operations by means of processes that include sta-
ges of separation, classification, storage, collection, transportation, and final disposal, always
for the purpose of reducing the volume of waste generation, increasing the percentage of
recycled waste, and using extra care with hazardous waste.
In 2009, solid waste generation increased 16.1% compared to 2008, in line with the growth
in Natura's activities. This calculation includes not only the waste from the production pro-
cess but also the waste generated in the administrative areas, laboratories, and service areas
(restaurant, outpatient clinic, etc.).
This increase relates to the fact that in 2009 we included in the calculations the weight of
the waste generated by the outsourced companies that manufacture our finished products.
In total, they generated 37.8% more solid waste compared to 2008. For 2010, our challen-
ge is to manage this data more accurately. In the Cajamar and Itapecerica da Serra plants,
the increase was 7%, and the total amount of waste per unit billed increased 1.5% to 31.5
grams/unit in 2009.
We reduced by 18.7% the volume of waste produced at the Cajamar and Itapecerica da
Serra plants that were disposed of in landfills compared to 2008. This means that last year
we avoided sending 117.5 metric tons (volume necessary to fill up 20 garbage trucks) to
landfills.
ToTAL wEIGHT oF wASTE PER UnIT BILLED (GRAMS/UnIT)
1
2007
2008
2009
Total weight of waste per unit billed
(grams/unit)
34.9
31.0
31.5
1. This year, the amounts generated by outsourced companies that manufacture our products were included to better portray the
reality of the indicator. As a result, the historical data were changed.
ToTAL AMoUnT oF wASTE PER TyPE (METRIC Ton)
1 2
2007
2008
2009
Class I
1,395.5
1,348.3
1,436.6
Class II-A
4,043.3
4,330.7
4,817.8
Class II-B
1,180.9
1,444.6
1,390.5
waste related to the Cajamar
and Itapecerica da Serra plants
6,619.7
7,123.6
7,618.9
waste related to the other natura plants
3
180.2
224.5
251.4
waste at natura's outsourced
manufacturing companies
4
3,200.0
3,039.0
4,189.0
Total weight of waste disposed of
9,999.9
10,387.1
12,059.3
1. In accordance with the Brazilian Association of Technical Standards NBR standard No. 10,004/2004: Class I waste: hazardous
waste (obsolete cosmetic products, medical and laboratory waste, and alcohol); Class II-A waste: non-inert waste (physicochemical
and biological sediments from the Effluent Treatment Station (ETE), paper, cardboard); Class II-B waste: inert waste (metals, plastic).
2. Natura does not include in this indicator the waste generated in civil construction works carried out in its plants.
3. Refers to the generation of waste from its industrial plants in Benevides ­ state of Pará, inaugurated in May 2007, and the
Administrative Plant in Barueri (Alphaville).
4. Companies that manufacture (or that are involved in the last stage of production) items with the Natura brand.
background image
94
natura
annual
report
This was possible thanks to recycling initiatives such as the program for the separation
of recycled materials from obsolete cosmetic products. An expired cream, for example,
is considered hazardous waste. But instead of also sending the packaging for hazardous
waste treatment, we have started to separate it and send it for recycling after subjecting it
to a crushing process to remove characteristics of the bottle's original usage.
With this and other initiatives, we were able to increase by 10.1% the volume of waste
sent for recycling (638.8 metric tons more) in 2008 in relation to 2008, and achieved the
rate of 91.5% of waste sent for recycling last year.
DESTInATIon oF wASTE1¹
2007
2008
2009
Incinerated
(%)
2,8
2.5
1.9
(metric tons)
186.9
176.3
142.4
Disposed in landfills
(%)
9.2
8.8
6.6
(metric tons)
605.5
627.8
510.3
Recycled
(%)
88.0
88.7
91.5
(metric tons)
5,827.2
6,319.5
6,958.3
1. Refers to the Cajamar and Itapecerica da Serra plants.
The weight of the organic waste sent for composting, on the other hand, such as food lefto-
vers, for example, increased 36.3% last year.
Hazardous waste, meanwhile, is transported within the strictest safety standards and sent for
treatment and proper final disposal. The volume of hazardous waste transported and treated
in 2009 totaled 1,400 metric tons, 6.5% more than in 2008.
wEIGHT oF wASTE ConSIDERED HAzARDoUS UnDER THE TERMS oF THE BASEL
ConVEnTIon¹ ² ³ (METRIC TonS)
2007
2008
2009
Transported
1,395.5
1,348.3
1,436.6
Imported
0.0
0.0
0.0
Exported
0.0
0.0
0.0
Treated
1,395.5
1,348.3
1,436.6
1. In accordance with Brazilian Association of Technical Standards NBR standard No. 10,004/2004: Class I waste: hazardous
waste (obsolete cosmetic products, medical and laboratory waste, alcohol, lubricating oil and maintenance waste).
2. All waste not directly mentioned in the Basel Convention, such as hazardous waste, but which is classified as hazardous based
on local legislation, is also covered by the Convention.
3. Refers to the Cajamar and Itapecerica da Serra units.
RECyCLInG oF wASTE By DESTInATIon (METRIC TonS)
1
2007
2008
2009
Composting
784.3
942.5
1,284.8
Coprocessing
802.8
727.8
1,288.1
Transformation
4,160.0
4,649.2
4,385.4
1. Refers to the Cajamar and Itapecerica da Serra units.
background image
95
natura
annual
report
In our operations, we have developed, by means of the movimento Natura (Natura mo-
vement), the reverse logistics project Reciclagem de Produtos Natura (Natura Product
Recycling), through which we have mobilized our consultants to send the support materials
and packaging collected from their customers to collection centers. We also have an ex-
perience with the collection of products for recycling in our operations in Colombia, where
we support the Association of Recyclers of Bogotá. In 2009, 32 metric tons of recyclable
waste was collected in that country.
ImPACT OF mAIN SUPPLIERS
Estamos progredindo, ano a ano, para ampliar o monitoramento dos nossos consumos de
água e de energia, bem como da geração de resíduos, para além da nossa própria atuação.
Temos a ambição de integrar cada vez mais os cálculos de toda a nossa cadeia de valor. Em
2009, consideramos, ao todo, 62 empresas nos cálculos sobre os impactos ambientais dos
nossos principais fornecedores. No ano anterior, havíamos reportado os dados de um total
de 49 fornecedores. A inclusão dessas empresas explica, em grande parte, o incremento que
visualizamos nos números, na comparação com 2008.
LEADInG SUPPLIERS oF PACKAGInG AnD RAw MATERIALS oF nATURA
2007
2008
2009
Number of suppliers analyzed
57
49
62
Energy consumption (joules x 10
12
)
1
Primary electricity source ­ consumption
of electric energy
215.1
129.0
216.8
Self-generated electricity - diesel-powered generator
0.2
4.6
4.2
Consumption of LPG
9.1
1.8
4.8
other ­ natural gas
120.5
113.8
140.4
Total energy used
344.8
249.2
366.2
Water consumption (cubic meters)
Total water consumption
251,093
124,667
166,528
Generation of waste by the leading
suppliers of Natura (mt)¹
Total waste generated
2,846
1,752
2,947
1. The leading Natura suppliers of inputs belonging to other categories (accessories, packaging, printing services, fragrances,
chemicals and distribution centers). The data is obtained by means of estimates: Suppliers are instructed to apply apportion-
ments to their consumption of energy and water and waste generation, taking into consideration the production percentage
for Natura.
background image
96
natura
annual
report
CREATION OF ECONOmIC VALUE
Consolidated net revenues totaled R$ 4.2 billion, 18.6% higher than in 2008. EBITDA totaled
R$ 1.0 billion, growing 17.3% in relation to 2008. The EBITDA margin of 23.8% was above
the guidance for a minimum of 23%, which remains in place for 2010.
At the end of 2009, our cash balance amounted to R$ 500.3 million and our net indebted-
ness corresponded to 0.2 times EBITDA for the year.
(Graph 1)
COSTS AND EXPENSES
The operating efficiency initiatives continued to bring results and the Cost of Sales dro-
pped from 31.1% in 2008 to 30.5% in 2009.
Selling expenses were practically unchanged, in line with our strategy and consistent with
the competitive environment, inc