Arezzo Indústria e Comercio S A : Sustainability and Annual Report 2022 - Attachments

2022 Annual

Report

ATTACHMENT

1

Summary

03	CORPORATE GOVERNANCE		EMPOWERED PEOPLE
Risk & Crisis Management		Talent Attraction and Retention
	06 Human Capital Development
				Performance Evaluation Cycle
				Occupational Health & Safety
		RESPONSIBLE PRODUCTION		TRANSPARENT COMMUNICATION
04 ResearchOur Suppliers& Development (R&D)	09 Privacy Protection

05	HEALTHY ENVIRONMENT	10	CREDITS
Responsible Packaging

NOTE

This document is an Attachment to the Arezzo&Co Group Annual Sustainability

Report, publicly available here.

Approved by Executive Director of People and Management, Sustainability, Institutional Relations and Expansion, Marco Vidal.

2

Corporate

Governance

Transparency, assertiveness in decision-mak- ing, and accountability to stakeholders are goals of our governance approach. To improve the Company's performance and pursue company growth, we're devoted to using the absolute best industry practices.

Risk & Crisis

Management

We uphold a capable and precise structure that is in line with the Risk Management Policy.

The Internal Audit department's methods include describing the risk tolerance levels¹ for the categories set out in the Policy, determining the extent of exposure to financial and non-financial risks, and estimating the likelihood that those risks would ma- terialize. On page 47 of the 2022 Annual Report, you may read more about the primary risk management guidance instruments.

1 As a result of the sorts of risks being evaluated, the Group has defined the limits for the losses that it can bear.

Risk governance is monitored by Senior Leadership, with extensive experience in the subject:

NUMBER OF NON-EXECUTIVE BOARD OF DIRECTORS MEMBERS WITH RISK MANAGEMENT EXPERIENCE:

GUILHERME AFFONSO

Coordinator of the Risk,

Audit and Finance Committee

JULIANA BUCHAIM

Sitting member of the Strategy and

Branding Committee

3

Responsible

Production

Research & Development (R&D)

Our Suppliers

SELECTION, APPROVAL AND MONITORING

Track the evaluation process carried out in 2022 according to our monitoring criteria that requires certification of the Brazilian Textile Retail Program (ABVTEX):

• Information and training on ESG program, process and requirements;
• When necessary, supplier assistance (re- mote or on-site) with remedial measures or improvements;
• Technical assistance initiatives to im- prove suppliers' ESG performance and capabilities.

Of the total direct suppliers described in the Annual Report, 105 significant partners were assessed through documents or face-to-face visits - representing 100% of category.

Arezzo&Co* finished product suppliers, with more than six months of operation, are considered "significant" due to their representativeness in production volume and due to the socio-environmental risk in case of non-conformities, according to the criteria of the Consequences Policy.

Of the total assessed, five did not meet the criteria established by the Company, and had corrective action plans implemented.

For more information on the Consequences Policy and the Dirty List of suppliers, access page 52 of the 2022 Annual Report.

• With the exception of AR&Co, Carol Bassi, and Schutz Lifestyle.

In order for the Group's brands to innovate with new materials, the Alme brand plays a vital role as a research and development center. Our goal is to promote thinking about an item's whole life cycle and to inspire and accelerate the adoption of sustainable raw materials. We dedicate R$ 1.1 million to the creation of new goods and technology in order to fulfill this goal.

Also, each brand has a separate Research and Development department. Our intention is to produce goods that are high-quality, aesthetically pleasing, and, by using raw materials with less negative environmental effects, we also aim to reduce their negative effects on the en- vironment. 139 of our R&D roles were still active by the end of 2022, further solidifying our position as the industry leader.

4

Healthy

Environment

Responsible

Packaging

Within the Healthy Environment ESG pillar, we monitor the total packaging generated annually. When considering plastic packaging, we totaled

7.31 tons used (vs. 10.86 tons in 2021) in BAW and

Reserva brands, 100% recyclable. That represents 0.20% of the total packaging produced by the Group in the year, while paper/paperboard pack- aging represents 98% of the total.

5