Banco Bradesco S A : Bradesco Sustainable Finance Framework

At Bradesco, sustainability is one of the Organization's strategic drivers. The management of environmental, social and governance aspects ("ESG") is pivotal for Bradesco's perpetuity and growth in an increasingly dynamic and challenging context. By seeking to generate shared and long-term value for investors, employees, suppliers, customers and society, we also contribute to the country's sustainable development.

We incorporate this vision into our management, mainly through robust governance with an effective set of corporate policies and standards, ongoing management of social and environmental risks and opportunities, in addition to engagement with our various stakeholders.

Bradesco Sustainability Strategy considers the major global challenges and macro trends, the aspects pointed out in the Materiality Matrix, the Organization's business goals, as well as the national and international sustainable development agendas - especially the Sustainable Development Goals (SDGs) and the Paris Agreement.1

The pillars of our Strategy underpin Bradesco's goal of expanding the offer of financial solutions with positive social and environmental impacts, and supporting our customers in the transition to a less carbon-intensive economy, which is more resilient to the impacts of climate change. Such solutions aim at serving individuals, micro and small entrepreneurs and large corporations.

Sustainable Finance Framework

Aligned with its Sustainability Strategy, Bradesco seeks to raise funds from the market to reinforce support for (i) projects and (ii) corporate loans² that contribute to prevent or mitigate the impacts resulting from climate change, social and environmental issues.

This document establishes the criteria and processes that will be used by Bradesco for issuing Green, Social and Sustainable bonds to address this initiative by defining a Framework according to the pillars of the Green and Social Bonds Principles and Sustainability Bonds Guidelines, issued by the International Capital Market Association (ICMA), in its 2021 version:

• Use of Proceeds;
• Selection and assessment of projects;
• Resource management; and
• Reporting.

Table 1, below, describes the categories and types of projects and assets that will be eligible to receive proceeds raised by bonds adhering to this Framework.

Such categories are in line with the requirements of the ICMA's Green and Social Bonds Principles and Sustainability Bonds Guidelines (version 2021). We also use the

1 Additional information is available in Bradesco Organization's 2019 Integrated Report that can be found on

2020www.BradescoRI.com.br.

2 Only companies (including SME loans) that earn > 90% from the activities mentioned in the eligibility table will be accepted.

1

recommendations from the Climate Bonds Standard and Certification Scheme of the Climate Bonds initiative (CBI) as references.

Additionally, we list the indicators that, within the limits of feasibility, will be considered and accounted for in the reporting of results, which will follow two modalities:

1. Operating indicators: These show the direct results of financed projects and assets, according to their type.
2. Impact indicators: They present the benefits produced by the financed projects, considering the sustainable approach - mainly in terms of greenhouse gases (or carbon, by conversion) avoided or sequestered and/or individuals or companies impacted.

The indicators may be provided directly by the project executors, or will be calculated based on estimates and references of similar projects or carbon emission factors indicated in sector and academic studies and research. Irrespective of the case, sources of information will be referenced in periodic reports - as described in the "Reporting" section.

Framework-level of exclusion

Any activity, product, project, corporate (including MSMEs) or loans that are associated with fossil fuel and its operations, hard-to-abate industries, child labour and poor working conditions, negative-impact activities such as tobacco, firearms/weapons, palm oil, production or trading of weapons, munition, radioactive materials, use of asbestos fibers, tobacco, wastewater from fossil fuel operations, and chemical recycling of plastic.

Table 1 - Use of Proceeds

Eligible	Project	Operating	Impact
categories	description	indicators	indicators

Renewable Energy SDG 13 Climate action

Financing or refinancing of projects in the	Electricity	Carbon
generation and infrastructure for source	generated	avoided
energy within Brazil.	(MW)	(tCO2)
- Solar
Concentrated solar power projects
acceptable if they generate at least 85%
electricity from solar power.
- Wind;
- Biomass projects, provided that they

• Release less than 16.0 g CO2eq/MJ in all lifecycle;
• Have certification, or third-party verification, regarding low indirect impact on land use, indicating production without expansion of areas or use of previously degraded land in their production chain - only projects with FSC production certification will be accepted.

Public

2

Excludes feedstock produced on land with high biodiversity and a high amount of carbon.

• Biofuel projects, provided that they:
• • Release up to 16.0 g CO2eq/MJ in all lifecycle
  • Release up to 18.8 g CO2eq/MJ, for the production of liquid fuels for transportation in all lifecycle;
  • Have certification, or third party verification, regarding low indirect impact on land use, indicating production without expansion of areas or use of previously degraded land in their production chain - only projects with FSC production certification will be accepted.

Excludes feedstock produced on land with high biodiversity and a high amount of carbon.

• Hydropower, provided that they;
• • Have energy density greater than 10 W/m2 of flooded area or release less than 50 g CO2/kWh in all lifecycle emissions of generated energy.

Only projects that have an environmental and social impact assessment by a credible body will be accepted.

Energy	Financing or refinancing:	Energy	Avoided
Efficiency		consumption	carbon
SDG 13	- Projects to replace energy efficiency	reduction	(tCO²)
Climate action	retrofits including LEDs, building	(MW)
	management systems, smart thermostats,
	hardware or software applications that
	reduce power consumption, artificial
	intelligence applications.
	Eligible projects must bring efficiency gains
	equal to or higher than 20%.
	Projects using fossil fuels will not be
	accepted.

Sustainable Crops SDG 13 Climate action

Financing or refinancing of:

• Planting, cultivation or management of crops, as long as the production system is certified by Rainforest Alliance, following the requirements of the Sustainable Agriculture Standard version 2020.
• Only livestock projects that are part of ILPF
  - "Forest-Crop-Livestock Integration" systems, that have sustainable forest management plans, to smallholders

Planted area	Avoided
(hectares)	carbon
	(tCO²)

(%)

Fulfillment of certified certification production purposes

Public

3

operations (operations with less than 7 hectares of land) will be accepted.

• Native wood extraction projects will only be accepted if certified by FSC.

Sustainable Transportation4 SDG 13 Climate action

Financing or refinancing of:

• Purchase of new passenger vehicles or mass transport vehicles that are electric or powered by hydrogen;
• Purchase of new hybrid passenger vehicles that
• Private hybrid vehicles are limited to those with an emissions threshold of 75gCO2/km, while the emission threshold for hybrid buses is 50gCO2e/p-km.
• Passenger rail and freight rail to individually meet the 50gCO2e/p-km and 25gCO2/t-km thresholds respectively.
• BRT (Bus Rapid Transit) systems that do not exceed the limit of 50 gCO2e/km, as long as they obtain either Silver or Gold level rating certifications.

Reduction	Avoided
in fuel	carbon
consumption2	(tCO²)
(liters)
and/or
People
impacted
(mass
transport
projects and
vehicles)

Green Buildings SDG 13 Climate action

Financing or refinancing commercial and residential buildings:

• Building construction projects certified with LEED Gold, LEED Platinum or Living Building Challenge.
• Building retrofit energy related projects for which results show at least a 30%5 reduction in the generation of carbon emissions.G 13:
  Climate action

Energy Avoided consumption carbon

reduction (tCO²) (MW)

or Emission reduction (tCO²)

Sustainable

Water and

Wastewater

Management

Financing or refinancing:

• Sustainable water treatment and supply:
• • Expansion of public access to water supply.
  • Reduction in water losses, in water transfer and/or distribution.
• Sustainable sewerage:
• • Expansion of sewage systems

M³	Number of
potable	people
water	served/
	impacted
M³ of
avoided
waste
of treated
sewage

Wastewater from fossil fuel operations will not be accepted.

1. The average fuel consumed per kilometer traveled by Brazilian vehicles will be used as a reference. For hybrid vehicles, the average fuel consumption per kilometer traveled by hybrid vehicles available in the Brazilian market will be considered.

1. The limits is based on Worldwide Harmonized Light Vehicle Test Procedure (WLTP)
   5Over a baseline that is comparable with ASHRAE 90.1 2010

Public

4