In recent years, society has become increasingly critical regarding the issue of environmental responsibility. In addition to lighting a beacon for companies to position themselves according to the needs of their customers, it is essential that we are aware, as company representatives and as individuals, of the importance of the permeability of sustainability in our journey.

In this context, investors, sustainability market indices and legislative updates, each in their own way, direct corporations to present solid environmental management based on goals and indicators that demonstrate positive actions and results in biodiversity conservation.

A recent movement with a high impact on the economy was the publication, in June 2023, of the European Union's anti-deforestation regulation. It is a milestone against deforestation that requires due diligence measures from European importers that guarantee that the acquisition of goods, including wood and wood products, have no direct or indirect relationship with deforestation after 2020, even when carried out legally.

This regulation highlights in its considerations that the rate of environmental devastation is alarming and emphasizes that, according to the Food and Agriculture Organization of the United Nations, between 1990 and 2020, 420 million hectares of forest were lost worldwide, that is, around 10% of the remaining forests in the world and the equivalent of an area larger than that of the European Union itself.

We live in a time in which the environmental performance of companies and the debate on sustainability have migrated from technical discussions between small groups within organizations to be part of business strategies. This is a relevant issue and must be incorporated into the organizational culture and values of companies to ensure business continuity.

The incorporation of themes linked to business sustainability is already a reality at Dexco. In our 2025 Sustainability Strategy, we assume goals that guide our actions: one of the strategic commitments is to ensure sustainable growth, maintaining a positive carbon balance. To achieve this, we seek to efficiently use inputs and raw materials, manage forests responsibly and consider socio-environmental criteria in our supply chain.

The forestry sector plays an important role in maintaining biodiversity, whether through the conservation of forests and native areas, or in the protection and recovery of Permanent Preservation Areas. In total, according to data from the Brazilian Tree Industry, the sector has more than 6 million hectares allocated to conservation areas, a fact that confirms and validates the important performance and great environmental responsibility.

In this sense, for Dexco, taking care of the environments in which we operate is essential for the responsible management of natural resources. That said, Dexco's forest area develops a monitoring and evaluation program for conservation areas in Brazil, which total more than 40 thousand hectares and are divided between the Cerrado, Atlantic Forest and Pampa biomes, in the states of São Paulo, Minas Gerais and Rio Grande do Sul.

The program's main strategy is to generate reliable data for making safe decisions that allow us to effectively monitor and evaluate the conservation status of our forests. To achieve this, we invest in three main sources of information: (1) in biodiversity research projects, (2) in characterizing the successional stage of conservation areas and (3) in evaluating the fragmentation and connectivity of forest remnants.

1. Studies on biodiversity date back to the 1970s, and since then we have maintained partnerships with universities, research institutes and consultancies. We prioritize research that contributes to scientific knowledge, to public environmental conservation policies, that generate applicable subsidies in the treatment of environmental aspects and impacts of forestry operations and contribute to forestry management certifications and environmental licensing of forestry activities. To date, fauna and flora studies have recorded more than 14 thousand individuals classified into more than 2.7 thousand species, which have served as the basis for more than 60 scientific publications in national and international journals.

2. In the process of characterizing the successional stage of conservation areas, we carry out digital processing of satellite images and field expeditions for more careful assessments using drones, when necessary. This classification process divides conservation areas into classes that range from exposed soil to remnants of native vegetation in an advanced stage of succession and, with this information, we define and understand which strategies we should follow. The measures adopted for sites with exposed soil, for example, can range from passive restoration, as well as soil transposition, native planting or direct sowing.

3. In characterizing the fragmentation and connectivity of native vegetation remnants, we analyzed the distance between conservation areas on the boundaries of the farms, as well as in the surrounding areas and, based on this information, actions are directed to expand connectivity. The objective is to promote the connection of native areas, an important strategy to mitigate the effects of anthropogenic pressures and fragmentation itself, facilitating the movement of organisms between habitats and increasing the chances of survival and development of populations of different species.

In addition to actions aimed at conserving native areas, we also highlight two important work fronts: investment in the verification of Ecosystem Services and the definition of Areas of High Conservation Value, both validated by external audit and recognized by standards widely disseminated on an international scale.

In the scope of Ecosystem Services, which are the benefits that nature provides to society and which reflect on improving the quality of life of populations. Since 2022, we have started a project to diagnose and recognize our positive impact on biodiversity conservation, carbon sequestration and storage, maintenance of water quality and recreational services.

When defining High Conservation Value attributes, our methodology defines which locations present environmental or social values of exceptional nature, or of critical importance, including in this assessment the participation of local communities and experts in the environmental and social spheres. When attributes are identified, additional and specific protection and monitoring measures are implemented.

A summary of our actions adopted for biodiversity, with goals and indicators aligned with the Sustainability Strategy, is available on our website. This document also contains the Biodiversity Impact Index, a way of evaluating the impact of our activities. The index provides, for example, metrics for zero deforestation, ecological development of conservation areas, forest protection actions, investment in responsible forest management, among others. These actions demonstrate our environmental responsibility and reinforce our role in the practice of sustainability and biodiversity conservation, important values to achieve the purpose of providing people with solutions for a better life.