CVM Resolution No. 14 of December 9, 2020

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – CEP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – CEP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – CEP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020
Approves Technical Guidance CPC 09 –
Integrated Reporting.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION OF BRAZIL – CVM makes public that the Board, in a meeting held on December 3, 2020, based on §§ 3 and 5 of art. 177 of Law No. 6,404, of December 15, 1976, combined with items II and IV of § 1 of art. 22 of Law No. 6,385, of December 7, 1976, APPROVED the following Resolution:

Art. 1. It is made mandatory for publicly held companies, when deciding to prepare and disseminate the Integrated Report, the CPC 09 Guidance – Integrated Reporting, issued by the Accounting Pronouncements Committee - CPC, annexed to this Resolution.

Art. 2. The Integrated Report shall be subject to limited assurance by an independent auditor registered with the CVM, in accordance with standards issued by the Federal Council of Accounting.

Art. 3. This Resolution enters into force on January 1, 2021.

Electronically signed by
MARCELO BARBOSA
President

CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020
ACCOUNTING PRONOUNCEMENTS COMMITTEE
TECHNICAL GUIDANCE CPC 09
INTEGRATED REPORTING

Correlation to the Conceptual Framework of Integrated Reporting, prepared by the International Integrated Reporting Council (IIRC)

TABLE OF CONTENTS Item
SITUATION AND GENERAL PRINCIPLES 1 – 6
PART I – INTRODUCTION

USE OF THE GUIDANCE
A. Definition of Integrated Reporting 1.1 – 1.2 B. Objective of the Guidance 1.3 – 1.6
C. Purpose and users of Integrated Reporting 1.7 – 1.8
D. Principles-based approach 1.9 – 1.11
E. Format of the Integrated Report and relationship with other information 1.12 – 1.16 F. Application of this Guidance 1.17 – 1.19 G. Responsibility for the Integrated Report 1.20
FUNDAMENTAL CONCEPTS 2.1
A. Introduction 2.2 – 2.3
B. Value generation for the organization and for third parties 2.4 – 2.9
C. Capitals 2.10 – 2.19
D. Value generation process 2.20 – 2.29
PART II – THE INTEGRATED REPORT
GUIDING PRINCIPLES 3.1 – 3.2
A. Strategic focus and future orientation 3.3 – 3.5 B. Connectivity of information 3.6 – 3.9
C. Relationship with stakeholders 3.10 – 3.16
D. Materiality 3.17 – 3.35
E. Conciseness 3.36 – 3.38
F. Reliability and completeness 3.39 – 3.53
G. Consistency and comparability 3.54 – 3.57

CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020
4. CONTENT ELEMENTS 4.1 – 4.3
A. Overview of the organization and its external environment 4.4 – 4.7 B. Governance 4.8 – 4.9
C. Business model 4.10 – 4.22
D. Risks and opportunities 4.23 – 4.26
E. Strategy and resource allocation 4.27 – 4.29 F. Performance 4.30 – 4.33 G. Outlook 4.34 – 4.39 H. Basis for preparation and presentation 4.40 – 4.48
I. General guidance on Integrated Reporting 4.49 – 4.62
GLOSSARY
APPENDIX A – SUMMARY OF REQUIREMENTS
APPENDIX B - LIST OF FIGURES

SITUATION AND GENERAL PRINCIPLES OF THE GUIDANCE

This Guidance describes the long-term vision of a world in which integrated thinking is rooted in the main business practices of the public and private sectors, facilitated by Integrated Reporting as a standard for corporate reporting. The cycle of integrated thinking and reporting, which leads to the efficient and productive allocation of capital, functions as a force to confer financial stability and sustainability.
Integrated Reporting, whose objective is described in Item 1B, was proposed considering the needs to:

improve the quality of information available to financial capital providers, allowing for more efficient and productive capital allocation;
promote a more cohesive and efficient approach to corporate reporting, which leverages the various aspects of reporting and communicates the full range of factors that substantially affect the organization's ability to generate value over time; and
improve accountability and responsibility for the management of the comprehensive base of capitals (financial, manufactured, intellectual, human, social, relationship, and natural) and promote the understanding of their interdependencies.

1 See Glossary definition of Integrated Thinking

CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020

Integrated Reporting is consistent with numerous developments in corporate reporting that are occurring in national jurisdictions around the world. It is intended that Integrated Reporting provide principles-based guidance for companies and other organizations wishing to prepare Integrated Reporting, accelerate these individual initiatives, and give impetus to greater innovation in global corporate reporting to expand the benefits of Integrated Reporting, such as increasing the efficiency of the reporting process itself.
Specifically, Integrated Reporting focuses on the organization's ability to generate value in the short, medium, and long term. In doing so, Integrated Reporting:

has a combined emphasis on conciseness, strategic focus, and future orientation, as well as on connectivity of information and capitals and their interdependencies; and
emphasizes the importance of integrated thinking within the organization.

Integrated thinking takes into account the connectivity and interdependencies between a range of factors that affect an organization's ability to generate value over time, including:

the capitals used or affected by the organization, as well as critical interdependencies, including trade-offs between them;
the organization's ability to meet the legitimate interests and needs of key stakeholders;
how the organization adjusts its business model and strategy to its external environment, opportunities, and risks faced; and
the organization's activities, performance (financial and other), and outcomes in terms of capitals - past, present, and future.

The more this integrated thinking is rooted in the organization's activities, the more naturally the connectivity of information will flow into corporate reporting, analysis, and decision-making. It also leads to better integration of information systems that support reporting and internal and external communication, including the preparation of the Integrated Report.

CHAPTER 1 – INTRODUCTION

USE OF THE GUIDANCE
1A. Definition of Integrated Reporting

CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020

1.1 Integrated Reporting is a concise report on how the organization's strategy, governance, performance, and perspectives, in the context of its external environment, lead to value generation in the short, medium, and long term.

1.2 Integrated Reporting must be prepared in accordance with this Guidance.

1B. Objective of the Guidance

1.3 The purpose of this Guidance is to establish Guiding Principles and Content Elements that govern the general content of the Integrated Report, and to explain the fundamental concepts that underpin them.

1.4 This Guidance is written considering, primarily, the private sector and for-profit companies of any size, but it can be applied and adapted, as necessary, for public and non-profit organizations.

1.5 This Guidance identifies the information to be included in the Integrated Report for use in assessing the organization's ability to generate value and does not establish reference standards (benchmarks) for aspects such as the quality of the organization's strategy or the level of its performance.

1.6 In this Guidance, references to value generation:

include instances in which value is preserved or reduced (see Item 2.14);
relate to value generation over time (in the short, medium, and long term).

1C. Purpose and users of Integrated Reporting

1.7 The main objective of Integrated Reporting is to explain to financial capital providers how the organization generates value over time. Therefore, it contains relevant information, whether financial or of another nature.

1.8 Integrated Reporting benefits all stakeholders in the organization's ability to generate value over time, including employees, customers, suppliers, business partners, local communities, legislators, regulators, and policymakers.

1D. Principles-based approach

1.9 This Guidance is based on principles. The intention of the principles-based approach is to find an adequate balance between flexibility and imposition, which recognizes the great variety of individual circumstances of different organizations, and at the same time allows a sufficient degree of comparability between organizations to meet important information needs.

1.10 This Guidance does not impose specific performance indicators, measurement methods, or disclosure of individual topics. Thus, those responsible for preparing and presenting the Integrated Report must exercise professional judgment, given the specific circumstances of the organization, to determine:

which topics are relevant;
how they are disclosed, including the application of commonly accepted measurement and disclosure methods, as appropriate. When Integrated Report information is similar to other information published by the organization or was based on such information, it is prepared on the same basis or is easily reconcilable.

Quantitative and qualitative information

1.11 Quantitative indicators, such as key performance indicators (KPIs) and monetized metrics, as well as the context in which they are provided, can be very useful to explain how the organization generates value and how it uses and affects various capitals. Although quantitative indicators are included in the Integrated Report whenever this is feasible and relevant, it is worth noting that:

the organization's ability to generate value is best reported through the combination of quantitative and qualitative information (see also Item 3.8 on the connectivity of quantitative and qualitative information);
the Integrated Report does not aim to quantify or monetize the organization's value at a point in time, the value generated over a period, or its uses and effects on all capitals (see also Item 4.53 for the common characteristics of appropriate quantitative indicators).

1E. Format of the Integrated Report and relationship with other information

1.12 Integrated Reporting must be an identifiable communication with a name.

1.13 Integrated Reporting must be more than a summary of information contained in other communications (e.g., financial statements, sustainability report, presentations to analysts, or information contained on websites); it makes explicit the connectivity of information to communicate how value is generated over time.

1.14 Integrated Reporting can be prepared to meet existing compliance requirements. For example, the organization may be required by applicable law to prepare the management report or another report within the context of its financial statements. If this report is prepared in accordance with this Guidance, it can be considered the Integrated Report. If the report is required to include specific information in addition to that required by this Guidance, the report can still be considered the Integrated Report, provided that this other information does not obscure the conciseness required by this Guidance.

CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020

1.15 Integrated Reporting can be a standalone report or be a distinct, highlighted, and extracted part of another report or statement. It can, for example, be included at the beginning of a report that also covers the organization's financial statements.

1.16 Integrated Reporting can serve as an "entry point" to more detailed information, outside the statement to which it is linked. The form of the link depends on the format of the Integrated Report (e.g., in the case of a printed report, links can be other attached information; in the case of an electronic format report, they can be hyperlinks leading to other information).

1F. Application of this Guidance

1.17 Any communication that claims to be the Integrated Report and makes references to the Conceptual Framework prepared by the International Integrated Reporting Council (IIRC) or to this Guidance must meet all the requirements identified in bold and italic, summarized in Appendix A, unless:

the unavailability of reliable information or specific legal prohibitions cause an inability to disclose relevant information; and
the disclosure of relevant information could cause significant competitive harm (see Item 3.51).

1.18 In the event of unavailability of reliable information or specific legal prohibitions, the Integrated Report must:

indicate the nature of the omitted information;
explain the reason for the omission; and
in the case of data unavailability, the measures taken to obtain the information and the expected timeframe for this must be identified.

Instructions

1.19 The text of the items of this Guidance that is not in bold and italic establishes guidance to assist in the application of the requirements. It is not necessary for the Integrated Report to include all topics referenced in the instructions.

1G. Responsibility for the Integrated Report

1.20 The Integrated Report must include a declaration by those responsible for governance that includes:

the acknowledgment of their responsibility to ensure the integrity of the Integrated Report;
the acknowledgment that they have applied collective thinking in the preparation and presentation of the Integrated Report; and
their opinion or conclusion regarding whether the presentation of the Integrated Report is in accordance with this Guidance;

Or, if the Integrated Report does not contain the declaration by those responsible for governance, it must explain:

the role played by those responsible for governance in the preparation and presentation of the Integrated Report;
the measures being taken to issue such representation in future reporting vehicles; and
the timeframe for doing so, which must not exceed the organization's third Integrated Report that references this Guidance.

2 FUNDAMENTAL CONCEPTS

2.1 The fundamental concepts provided in this chapter support and reinforce the requirements and instructions of the Guidance.

2A. Introduction

2.2 Integrated Reporting explains how the organization generates value over time. Value is not generated only by the organization or within it. It is:

influenced by the external environment;
created through relationships with stakeholders; and
dependent on various resources.

2.3 Therefore, Integrated Reporting aims to offer a view of:

the external environment that affects an organization;
the relationships and resources used and affected by the organization, collectively referred to as "capitals" in this Guidance, and classified in Section 2C as financial, manufactured, intellectual, human, social and relationship, and natural; and
how the organization interacts with the external environment and with capitals to generate value in the short, medium, and long term.

2B. Value generation for the organization and for third parties

2.4 Value generated by the organization over time manifests itself through increases, decreases, or transformations of capitals caused by the organization's activities and products. Value has two interrelated aspects, being generated for:

the organization itself, which allows financial returns to financial capital providers; and
others (i.e., stakeholders and society in general).

2.5 Financial capital providers are interested in the value generated by the organization for itself. They are also interested in the value the organization generates for others when this affects the organization's ability to generate value for itself or is related to the organization's declared objective (e.g., explicit social purpose) that affects their assessments.

2.6 The organization's ability to generate value for itself is related to the value it generates for third parties. As shown in Figure 1, in Appendix B, this happens through a wide range of established activities, interactions, and relationships, as well as others, such as sales to customers, which are directly associated with changes in financial capital. These include, for example, the effects of the organization's activities and products on customer satisfaction, the willingness of suppliers to do business with the organization and the terms and conditions of such business, the initiatives that business partners agree to undertake with the organization, the organization's reputation, the conditions imposed on the organization by its authorization or license to operate, and the imposition of conditions by the supply chain or legal requirements.

2.7 When these established activities, interactions, and relationships are relevant to the organization's ability to generate value for itself, they must be included in the Integrated Report. This also takes into account the extent to which effects on capitals have been externalized (i.e., costs or other effects on capitals that do not belong to the organization).

2.8 Externalities can be positive or negative (i.e., they can result in a net increase or net decrease in the value contained in capitals). Externalities can ultimately increase or reduce the value generated for the organization. Therefore, financial capital providers need information on relevant externalities to be able to assess their effects and allocate resources appropriately.

2.9 Since value is generated over different time periods and for different stakeholders through different capitals, it is unlikely that it will be generated through the maximization of a single capital, to the detriment of the others. For example, it is unlikely that maximizing financial capital (e.g., profit) to the detriment of human capital (e.g., inadequate human resources policies and practices) will increase value for the organization in the long term.

2C. Capitals

Stock and flow of capitals

2.10 All organizations depend on various forms of capital for their success. In this Guidance, they are classified into financial, manufactured, intellectual, human, social and relationship, and natural capitals, although - as discussed in Items 2.17 to 2.19 - organizations preparing integrated reports do not need to adopt this classification.

2.11 Capitals are stocks of value that increase, decrease, or transform through the organization's activities and products. For example, the organization's financial capital increases

CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020

when it generates profit, and the quality of its human capital improves when employees receive better training.

2.12 The overall stock of capitals does not remain fixed over time. There is a constant flow between and within capitals as they increase, decrease, or transform. For example, when an organization improves its human capital through employee training, the costs incurred with training reduce its financial capital. The effect is that financial capital transforms into human capital. Although this is a simple example and presented only from the organization's perspective2, it reflects the continuous interaction and transformation between capitals, albeit with different rates and outcomes.

2.13 Many activities result in increases, decreases, or transformations much more complex than the previous example and involve a broader set of capitals or components within capital (for example: the use of water to grow crops that feed livestock, all components of natural capital).

2.14 Although organizations aim to generate value across the set of capitals, this may involve decreasing the value contained in some of them, resulting in a net decrease in the overall stock of capitals. In many cases, whether the net effect is an increase or decrease (or neither, when value is preserved) depends on the perspective chosen; as in the previous example, employees and employers may value training differently. In this Guidance, the term value generation encompasses situations in which the overall stock of capitals remains unchanged or decreases (i.e., when value is preserved or reduced).

Categories and description of capitals

2.15 For the purposes of this Guidance, capitals are classified and described as follows:

Financial capital encompasses the pool of resources that:
o is available to the organization to be used in the production of goods or the provision of services; and o is obtained through resources, such as debts (loans and financing), equity interests, or subsidies, or generated through investments.
Manufactured capital encompasses manufactured physical objects (different from natural physical objects) available to the organization for use in the production of goods or the provision of services, including:
o buildings; o equipment; and o infrastructure (such as roads, ports, bridges, and facilities for water and sewage treatment).
Manufactured capital is often generated by other organizations, but includes assets manufactured by the organization itself for sale, or when retained for own use.
Intellectual capital encompasses organizational intangibles and knowledge-based assets, including:
o intellectual property, such as patents, copyrights, software, rights, and licenses; and o "organizational capital", such as tacit knowledge, systems, procedures, and protocols.
Human capital encompasses the competencies, skills, and experience of people and their motivations to innovate, including:
o their alignment and support for the governance structure, risk management, and ethical values; o the ability to understand, develop, and implement the organization's strategy; and o loyalty and motivation to improve processes, goods, and services, including the ability to lead, manage, and collaborate.
Social and relationship capital encompasses the institutions and relationships within and between communities, groups of stakeholders, and other networks, and the ability to share information to improve individual and collective well-being. Social and relationship capital includes:
o shared standards, as well as common values and behaviors; o relationships with key stakeholders, as well as the trust and commitment that an organization develops and seeks to build and protect with external stakeholders; o intangibles associated with the brand and reputation developed by an organization; and o social license to operate.
Natural capital encompasses all renewable and non-renewable environmental resources and environmental processes that provide goods or services that support the past, present, and future prosperity of the organization. This includes:
o air, water, land, minerals, and forests; and o biodiversity and ecosystem quality.

2.16 Not all capitals are equally relevant and applicable to all organizations. Although most organizations interact, to some extent, with all capitals, these interactions may be relatively insignificant or so indirect that they are not sufficiently relevant to be included in the Integrated Report.

Role of capitals in this Guidance

2.17 This Guidance does not require the Integrated Report to adopt the categories identified above nor to be organized along the lines of capitals. Instead, the main reasons for including capitals in this Guidance are so that they serve:

as part of the theoretical support for the concept of value creation (see Section 2B); and
as a guideline to ensure that organizations take into account all forms of capital used or affected by them.

2.18 Organizations may classify capitals in different ways. For example, relationships with external stakeholders and intangibles associated with brand and reputation (both identified as parts of social and relationship capital in item 2.15) may be considered, by some organizations, as separate capitals, part of other capitals, or encompassing a number of individual capitals. Similarly, some organizations define intellectual capital as an integral part of what they identify as "structural" and "relational" human capital.

2.19 Regardless of how the organization classifies capitals for its own purposes, the categories identified in item 2.15 must be used as a guideline to ensure that the organization does not neglect the capital used or affected by it.

2D. Value creation process

2.20 Figure 2 in Appendix B shows the value creation process. The following items contain a brief explanation, which also identifies how the components of Figure 2 (underlined in the text) align with the Content Elements of Chapter 4.

2.21 The external environment, including economic conditions, technological changes, societal issues, and environmental challenges, establishes the context in which the organization operates. The mission and vision encompass the organization as a whole, identifying its purpose and intention clearly and concisely (see Content Element 4A Overview of the organization and its external environment).

2.22 Those charged with governance have the function of creating an appropriate oversight structure to support the organization's ability to generate value (see Content Element 4B Governance).

2.23 At the core of the organization is its business model, which uses various capitals as inputs and, through its business activities, converts them into outputs (products, services, by-products, and waste). The organization's activities and outputs lead to outcomes in terms of effects on capitals. The ability of the business model to adapt to changes (for example, in the availability, quality, and accessibility of inputs) can affect the organization's long-term viability (see Content Element 4C Business Model).

2.24 Business activities include the planning, design, and manufacturing of products or the allocation of specialized skills and knowledge in the provision of services. Encouraging a culture of innovation is often a core business activity in the sense of generating new products and services that anticipate customer demand, introducing efficiencies and improved use of technology, substituting inputs to minimize adverse social and environmental effects, and finding alternative uses for products.

2.25 Outcomes are the internal and external (positive and negative) consequences for capitals, resulting from the organization's business activities and outputs.

2.26 The continuous analysis and monitoring of the external environment, in the context of the organization's mission and vision, identify the risks and opportunities relevant to the organization, its strategy, and its business model (see Content Element 4D Risks and opportunities).

2.27 The organization's strategy identifies how it intends to minimize or manage risks and maximize opportunities. It establishes strategic objectives and strategies to achieve them, which are implemented through resource allocation plans. (see Content Element 4E Strategy and resource allocation).

2.28 The organization needs information about its performance, which involves establishing measurement and monitoring systems to provide information for decision-making (see Content Element 4F Performance).

2.29 The value creation process is not static; frequent reviews of each component and its interactions with other components, as well as the focus on the organization's perspective, lead to review and refinement for the improvement of all components (see Content Element 4G Perspective).

PART II – INTEGRATED REPORTING

3 GUIDING PRINCIPLES

3.1 The following Guiding Principles underpin the preparation and presentation of the Integrated Report, informing the content of the Report and the manner in which information is presented:

a) strategic focus and future orientation; b) connectivity of information; c) relationships with stakeholders;

d) materiality (relevance); e) conciseness; f) reliability and completeness; g) consistency and comparability.

3.2 These Guiding Principles apply individually and collectively for the purposes of preparing and presenting the Integrated Report. Thus, professional judgment is required in their application, especially when there is an apparent conflict between them (for example, between conciseness and completeness).

3A Strategic focus and future orientation

3.3 The Integrated Report should offer a view of the organization's strategy and how it relates to the organization's ability to generate value in the short, medium, and long term, as well as to its use and effects on capitals.

3.4 The application of this Guiding Principle is not limited to Content Elements 4E - Strategy and resource allocation and 4G - Perspective. It guides the selection and presentation of other contents, and may include:

highlighting significant opportunities, dependencies, and risks arising from the organization's market position and business model;
the views of those charged with governance on:
o the relationship between past and future performance, and the factors that may alter it; o how the organization balances short, medium, and long-term interests; o how the organization has learned from past experiences in determining future strategic directions.

3.5 Adopting a strategic focus and future orientation (see also items 3.52 and 3.53) includes clearly articulating how the continuous availability, quality, and accessibility of significant capitals contribute to the organization's ability to achieve its strategic objectives in the future and generate value.

3B Connectivity of information

3.6 The Integrated Report should show a holistic picture of the combination, interrelationship, and dependencies between the factors that affect the organization's ability to generate value over time.

3.7 The more integrated thinking is rooted in the organization's activities, the more naturally connectivity of information will flow into management reporting, analysis, decision-making, and consequently, into the Integrated Report.

3.8 The main forms of connectivity of information include connectivity between:

The Content Elements. The Integrated Report connects the Content Elements into a complete picture that reflects the dynamic and systemic interactions of the organization's activities as a whole. For example:
o analysis of existing resource allocation and how the organization combines resources or makes additional investments to achieve desired performance; o information on how the organization's strategy adapts when, for example, new risks and opportunities are identified, or past performance does not materialize as expected; and o links between the organization's strategy and business model with changes in its external environment, such as increases or decreases in the pace of technological changes, growing societal expectations, and resource scarcity as planetary boundaries are reached.
The past, present, and future. The organization's analysis of its past and present activities can provide useful information to assess the reasonableness of what was reported about the present period into the future. Explaining the period from the past to the present can also be useful for analyzing existing capabilities and the quality of management.
The capitals. Includes interdependencies and trade-offs between capitals and how changes in their availability, quality, and accessibility affect the organization's ability to generate value.
Financial information and other information. For example, the implications for:
o projected growth in revenue or market share, resulting from research and development policies, technology, knowledge (know-how), or investments in human capital; o cost reduction or new business opportunities in environmental policies, energy efficiency, cooperation with local communities, or technologies to address social issues; and o growth in revenues and profits resulting from long-term relationships with customers, customer satisfaction, or reputation.
Quantitative and qualitative information. Both qualitative and quantitative information are necessary for the Integrated Report to adequately represent the organization's ability to generate value, as each creates a context for the other. Including performance indicators as part of the descriptive narrative can be an effective way to connect quantitative and qualitative information.
Management, Board, and externally reported information. For example, as discussed in item 4.53, it is important that quantitative indicators in the Integrated Report are consistent with the indicators used internally by those charged with governance.
Information in the Integrated Report, in other organizational communications, and from other sources. This recognizes that all organizational communications need to be consistent and that, when making an assessment, the information provided by the organization should not be read in isolation, but rather in conjunction with information from other sources.

3.9 Connectivity of information, as well as the overall usefulness of the Integrated Report, increases when it is structured logically, well-presented, written in clear, intelligible language free of jargon, and when it includes effective navigation means, such as clearly delineated (but interconnected) sections and cross-references. In this context, information and communication technology can be used to improve the ability to search, access, combine, connect, customize, reuse, or analyze information.

3C Relationships with stakeholders

3.10 The Integrated Report should provide a view of the nature and quality of the relationships the organization maintains with its key stakeholders, including how and to what extent the organization understands, takes into account, and responds to their legitimate interests and needs.

3.11 This Guiding Principle reflects the importance of relationships with key stakeholders, as discussed in item 2.2, value is not generated solely by or within the organization, but rather through relationships with other stakeholders. This does not mean that the Integrated Report should seek to satisfy the information needs of all stakeholders.

3.12 Stakeholders provide useful insights on issues relevant to them, including economic, environmental, and social issues, which in turn also affect the organization's ability to generate value. These insights can help the organization to:

understand how stakeholders perceive value;
identify trends that have generally not yet attracted attention but whose relevance is growing;
identify relevant issues, including risks and opportunities;
develop and evaluate strategies;
manage risks; and
implement activities, including strategic responses and accountability for relevant issues.

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Corporate Financial Center Building, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br

RESOLUTION CVM NO. 14, OF DECEMBER 9, 2020

3.13 Engaging with stakeholders is something that happens normally in the routine course of business (for example: day-to-day contact with customers or suppliers, or broader and continuous contact as part of strategic planning and risk assessment). It can also occur for a specific purpose (for example: contact with the local community when planning factory expansion). The more integrated thinking is rooted in the business, the greater the likelihood that consideration of the legitimate interests and needs of key stakeholders will be incorporated into the normal conduct of business.

3.14 Integrated Reporting increases transparency and the level of accountability, essential for building trust and resilience, by disclosing how the legitimate interests and needs of key stakeholders are understood, taken into account, and addressed through decisions, actions, and performance, as well as in continuous communication.

3.15 Accountability is closely associated with the concept of management and the organization's responsibility to care for or use, in a responsible manner, the capitals affected by its activities and products. When the capitals are owned by the organization, the responsibility for management is imposed on the administration and those responsible for governance through their legal obligations regarding the organization.

3.16 When the capitals are owned by others, or have no owner, the responsibility for management can be imposed by law or regulation (for example: through contracts with owners or through labor laws or environmental protection regulations). When there is no legal responsibility for management, the organization may have an ethical responsibility to accept or choose to accept management responsibility, and be guided in this regard by the expectations of stakeholders.

3D Materiality (Relevance)

3.17 Integrated Reporting must disclose information on topics that substantially affect the organization's ability to generate value in the short, medium, and long term.

Process for determining materiality (relevance)

3.18 The process for determining materiality (relevance) for the purpose of preparing and presenting Integrated Reporting involves:

the identification of relevant topics, based on their ability to affect value generation, as discussed in Section 2B (see items 3.21 to 3.23);
the assessment of the importance of relevant topics regarding their known or potential effect on value generation (see items 3.24 to 3.27);
the prioritization of topics based on their relative importance (see item 3.28); and
the determination of information to be disclosed on relevant topics (see item 3.29).

3.19 This process applies to both positive and negative topics, including risks and opportunities, favorable or unfavorable performances and prospects. It also applies to financial and other types of information. Such topics may have direct implications for the organization itself or may affect capitals belonging to or available to others.

3.20 To maximize effectiveness, the process of determining materiality (relevance) must be integrated into the organization's management processes and include regular contact with providers of financial capital and others, ensuring that Integrated Reporting fulfills its main purpose, as discussed in item 1.7.

Identification of relevant topics

3.21 Relevant topics are those that affect or may affect the organization's ability to generate value. Topics are determined by considering their effect on the organization's strategy, governance, performance, or prospects.

3.22 Topics related to value generation discussed in meetings between those responsible for governance are normally considered relevant. Understanding the perspectives of key stakeholders is critical for identifying relevant topics.

3.23 Topics that can be easily addressed in the short term, but that, if not addressed, will be more difficult or harmful to deal with in the medium and long term, must be included in the group of relevant topics. Topics should not be excluded because the organization does not wish to address them or does not know how to deal with them.

Assessment of importance

3.24 Not all important topics should be considered relevant. To be included in Integrated Reporting, a topic also needs to be sufficiently important with regard to its known or potential effect on value generation. This involves assessing the magnitude of the topic's effect and, if there is uncertainty regarding its occurrence, the probability that it will occur.

3.25 Magnitude is assessed by considering whether the effect of the topic on the organization's strategy, governance, performance, and prospects is such that it has the potential to significantly influence value generation over time. This requires professional judgment and depends on the nature of the topic in question. Topics may be considered relevant, either individually or collectively.

3.26 Assessing the magnitude of a topic does not imply the need to quantify its effect.

3.27 Depending on the nature of the topic, qualitative assessment may be more appropriate.

3.28 When assessing the magnitude of the effect, the organization must take into account:

quantitative and qualitative factors;
financial, operational, strategic, reputational, and regulatory perspectives;
the affected area, whether internal or external; and
the duration of the effect.

Prioritization of important topics

3.29 Once the group of important topics has been identified, they must be prioritized based on their magnitude. This helps focus on the most important topics and determine how they are reported.

Determination of information to be disclosed

3.30 Professional judgment applies when determining the information to be disclosed on relevant topics. This requires considering different perspectives, both internal and external, and relies on the assistance of regular contact with providers of financial capital and others, thereby ensuring that Integrated Reporting fulfills its main purpose, as mentioned in item 1.7 (see also items 4.50 to 4.52).

Boundaries of Integrated Reporting

3.31 The concept of reporting boundaries is essential to the process of determining relevance. The determination of boundaries for an Integrated Report is governed by two aspects:

the reporting entity (that is, the boundaries used for financial reporting purposes); and
risks, opportunities, and outcomes attributable to or associated with other entities/stakeholders, beyond the reporting entity, that have a substantial effect on the reporting entity's ability to generate value.

3.32 The reporting entity is fundamental to reporting boundaries because:

it is in the reporting entity that financial capital providers invest. Therefore, they need information about the reporting entity; and
the use of the reporting entity causes the information in the financial statements to serve as an anchor or reference point, with which other information in the Integrated Report can relate.

3.33 Figure 3, in Appendix B, shows the entities/stakeholders that should be considered in determining the boundaries of Integrated Reporting.

Reporting entity

3.34 The reporting entity identifies which transactions of subsidiaries, jointly controlled ventures, and associates, as well as related events, should be included in the organization's financial reports. The reporting entity is determined in accordance with applicable financial reporting standards, which revolve around the concepts of control or significant influence.

Risks, opportunities, and outcomes

3.35 The second aspect in determining the boundaries of Integrated Reporting is the identification of risks, opportunities, and outcomes attributable to or associated with other entities/stakeholders, beyond the reporting entity, that have a substantial effect on the reporting entity's ability to generate value. These other entities/stakeholders may be "related parties" for the purposes of financial reporting, but normally exceed these boundaries.

3.36 The objective of looking beyond the boundaries of financial reporting is to identify risks, opportunities, and outcomes that substantially affect the organization's ability to generate value. The entities/stakeholders within this portion of the Integrated Reporting boundaries do not have any relationship with the reporting entity due to control or significant influence, but rather due to the nature and proximity of risks, opportunities, and outcomes. For example, if aspects of industry labor practices to which the organization belongs are relevant to its ability to generate value, its disclosure in Integrated Reporting may include information on these aspects and how they relate to the labor practices of suppliers.

3E Conciseness

3.37 Integrated Reporting must be concise.

3.38 Integrated Reporting must include sufficient context for understanding the organization's strategy, governance, performance, and prospects, without being overloaded with less relevant information.

3.39 The organization must seek to achieve a balance in its Integrated Report between conciseness and the other Guiding Principles, particularly completeness and comparability. In achieving conciseness, Integrated Reporting:

applies the process of determining materiality (relevance) described in Section 3D;
follows a logical structure and includes internal cross-references, as appropriate, to limit repetition;
may be linked to more detailed information, which does not change frequently (for example: the list of subsidiaries), or external sources (for example: assumptions about future economic conditions on a government website);
expresses concepts clearly and with the fewest possible words;
prefers simple language to the use of jargon or highly technical terminology; and
avoids disclosures that are too generic, often considered "clichés," that are not specific to the organization.

3F Reliability and completeness

3.40 Integrated Reporting must cover all relevant topics, both positive and negative, in a balanced manner and free from material error.

Reliability

3.41 The reliability of information depends on its balance and freedom from material error. Reliability (often called faithful representation) increases with mechanisms, such as robust internal controls and reporting systems, stakeholder engagement, internal audit or similar functions, and external and independent assurance.

3.42 Those responsible for governance have the ultimate responsibility for how the organization's strategy, governance, performance, and prospects lead to value generation over time. They are responsible for ensuring effective leadership and decision-making regarding the preparation and presentation of Integrated Reporting, including the identification and supervision of employees actively involved in this process.

3.43 Maintaining an audit trail during the preparation of Integrated Reporting helps senior management and those responsible for governance to review the report and judge whether the information is sufficiently reliable for inclusion. In certain cases (for example: regarding forward-looking information), it may be appropriate for Integrated Reporting to describe the mechanisms used to ensure its reliability.

3.44 Item 1.18 identifies relevant disclosures for when there is an omission of relevant information due to the unavailability of reliable data.

Balance

3.45 A balanced Integrated Report should not be biased in the selection or presentation of information. Information in the report should not be biased, relativized, emphasized, minimized, combined, offset, or otherwise manipulated to alter the likelihood of being received favorably or unfavorably.

3.46 Relevant methods to ensure balance include:

the selection of presentation formats that do not unduly or inappropriately influence assessments made based on Integrated Reporting;
giving equal treatment to increases and decreases in capitals, strengths and weaknesses, and positive and negative performances; and
comparative reporting with previously reported targets, forecasts, projections, and expectations.

Freedom from material error

3.47 Freedom from material error does not mean that the information is entirely correct in all aspects. However, it means that:

processes and controls have been applied to reduce to an acceptable low level the risks that the reported information contains material misstatements;
when the information includes estimates, this must be clearly communicated, explaining the nature and limitations of the estimation process.

Completeness

3.48 A complete Integrated Report must include all relevant information, both positive and negative. To ensure that all relevant information is identified, consideration must be given to what organizations in the same sector report, as in a sector certain topics are likely relevant to all organizations that are part of it.

3.49 Determining completeness involves considering the extent of the information disclosed and its level of specificity or accuracy. This may involve considering possible concerns about cost-benefit, competitive advantage, and forward-looking information, all discussed below.

Cost/benefit

3.50 The information contained in Integrated Reporting is, by nature, fundamental to business management. Therefore, if a topic is relevant to business management, cost cannot be a factor for not obtaining critical information and for assessing and managing the topic in the appropriate manner.

3.51 The organization may assess costs and benefits when determining the extent, level of specificity, and accuracy of the information necessary for Integrated Reporting to fulfill its main purpose, but it cannot entirely refuse to make a disclosure on a relevant topic based on cost.

Competitive advantage

3.52 When including information on relevant topics concerning competitive advantage (for example: critical strategies), the organization must consider how to describe the essence of the topic, without identifying specific information that could lead to a significant loss of competitive advantage. Thus, the organization must consider the advantage a competitor could effectively have from the Integrated Reporting information, and evaluate this against the need for Integrated Reporting to achieve its main objective, as mentioned in item 1.7.

Forward-looking information

3.53 In some jurisdictions, legal or regulatory requirements may apply to certain forward-looking information, including, for example:

the types of disclosure that may be made;
whether warnings are necessary or permitted to highlight uncertainty in obtaining the information; and
the obligation to publicly update such information.

3.54 Forward-looking information is, by nature, more uncertain than historical information. However, uncertainty alone is not a reason to exclude this information (see also item 4.50 regarding the disclosure of uncertainty).

3G Uniformity and comparability

3.55 Information in Integrated Reporting must be presented:

on a uniform basis over time; and
in a manner that allows comparison with other organizations as it is important for the organization's own ability to generate value over time.

Uniformity

3.56 Reporting policies must be followed uniformly from one period to the next, unless there is a need to change to improve the quality of the reported information. This includes reporting the same performance indicators, if these remain relevant during the reporting periods. When there is a significant change, the organization must explain the reason for the change, describing (and quantifying, if feasible and relevant) its effect.

Comparability

3.57 Specific information in Integrated Reporting necessarily varies from one organization to another, as each organization generates value in a particular way. Nevertheless, addressing issues related to the Content Elements, which apply to all organizations, helps ensure an appropriate level of comparability between organizations.

3.58 Other strong tools for improving comparability (within Integrated Reporting and with any detailed information to which it is connected) include:

using benchmarks, such as those adopted by the industry or region;
presenting information in the form of rates (for example: research expenses as a percentage of sales; carbon intensity measures, such as emissions per unit of production);
reporting quantitative indicators normally used by other organizations with similar activities, particularly when standardized definitions are stipulated by an independent organization (for example: a trade association). Such indicators, however, should not be included in Integrated Reporting unless they are relevant to the individual circumstances of the organization and those used by it internally.

4 CONTENT ELEMENTS

4.1 Integrated Reporting includes the following eight Content Elements and answers the question asked for each of them:
A the organization's overview and its external environment; B governance; C business model; D risks and opportunities; E strategy and resource allocation; F performance; G outlook; H basis for preparation and presentation and, in doing so, considers:
I general guidance on reporting.

4.2 The Content Elements are fundamentally linked to one another and are not mutually exclusive. The order of the Content Elements as listed here is not the only way to sequence them. Therefore, the Content Elements should not serve as a standard structure for Integrated Reporting, with their information appearing in a fixed sequence, or as isolated and autonomous sections. On the contrary, the information in Integrated Reporting must be presented in a way that makes the connections between the Content Elements apparent (see Section 3B).

4.3 The content of the organization's Integrated Reporting depends on the organization's individual circumstances. The Content Elements are therefore presented as questions, and not as checklists of specific disclosures. Consequently, it is necessary to exercise professional judgment in applying the Guiding Principles to determine what information should be reported and how it should be reported, as presented below.

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020

4A Overview of the organization and its external environment

4.4 The Integrated Report must answer the question: What does the organization do and what are the circumstances in which it operates?

4.5 The Integrated Report identifies the organization's mission and vision, providing the essential context for identifying topics such as:

regarding the organization:
o its culture, ethics, and values; o its shareholding composition and operational structure; o its main activities and markets; o its competitive landscape and market positioning (taking into account factors such as the threat of new competitors, substitute products or services, the bargaining power of customers and suppliers, and the intensity of competitive rivalry); and o its position in the value chain;
key quantitative information (for example: number of employees, revenue, and number of countries in which the organization operates), highlighting, in particular, significant changes compared to previous periods; and
significant factors affecting the external environment and the organization's response.

External Environment

4.6 Significant factors affecting the external environment include aspects of the legal, commercial, social, environmental, and political context, which affect the organization's ability to generate value in the short, medium, and long terms. They may affect the organization directly or indirectly (for example: by influencing the availability, quality, and accessibility of capital that the organization uses or affects).

4.7 These factors occur within the context of the organization itself, its sector, or its region, and within the broader social or global context. They may include, for example:

the needs and legitimate interests of key stakeholders;
macro and microeconomic conditions, such as economic stability, globalization, and sectoral trends;
market forces, such as competitors' strengths and weaknesses and customer demand;
the speed and effect of technological changes;
social issues, such as population and demographic changes, human rights, health, poverty, collective values, and educational systems;
environmental challenges, such as climate change, the loss of ecosystems, and resource scarcity as planetary limits are reached;
the legislative and regulatory environment in which the organization operates; and
the political environment in countries where the organization operates and in other countries that may affect its ability to implement its strategy.

4B Governance

4.8 The Integrated Report must answer the question: How does the organization's governance structure support its ability to generate value in the short, medium, and long terms?

4.9 The Integrated Report provides insight into how the following topics are linked to its ability to generate value:

the organization's leadership structure, including skills and diversity (for example: the variety of background, gender, competence, and experience) of those responsible for governance and whether regulatory requirements influence the design of the governance structure;
specific processes used in strategic decision-making, and to establish and monitor the organization's culture, including its attitude towards risk and mechanisms for dealing with issues of ethics and integrity;
specific actions taken by those responsible for governance to influence and monitor the strategic direction of the organization and its risk management approach;
how the organization's culture, ethics, and values are reflected in the capitals it uses and affects, including its relationships with key stakeholders;
whether the organization is implementing governance practices that exceed legal requirements;
the responsibility that those responsible for governance assume to promote and enable innovation; and
how the remuneration and incentive system is linked to the generation of value in the short, medium, and long terms, and how this system is linked to the way the organization uses and affects capitals.

4C Business Model

4.10 The Integrated Report must answer the question: What is the organization's business model?

4.11 The organization's business model is its system for transforming inputs, through its business activities, into products and outcomes that aim to fulfill the organization's strategic purposes and generate value in the short, medium, and long terms.

4.12 The Integrated Report describes the business model, including the main:

inputs (see items 4.14 and 4.15);
business activities (see items 4.16 and 4.17);
products (see item 4.18);
outcomes (see items 4.19 and 4.20).

4.13 Characteristics that make the description of the business model more effective and understandable include:

explicit identification of the main elements of the business model;
a simple diagram, highlighting the main elements, with a clear explanation of the relevance of these elements to the organization;
a logical narrative flow, considering the particular circumstances of the organization;
identification of critical stakeholders and other dependencies (for example: raw materials), as well as relevant factors affecting the external environment;
the link with information covered by other Content Elements, such as strategy, risks and opportunities, as well as performance (including performance indicators and financial considerations such as cost containment and revenues).

Inputs

4.14 An Integrated Report shows how key inputs relate to the capitals on which the organization depends, or that provide differentiation for the organization, as they are relevant to understanding the robustness and resilience of the business model.

4.15 An Integrated Report does not intend to provide an exhaustive list of all inputs. Rather, the focus falls on those that have a significant influence on the ability to generate value in the short, medium, and long terms, regardless of whether the capitals from which they are derived belong to or are controlled by the organization. It may also include a discussion on the nature and magnitude of significant trade-offs that influence the selection of inputs (see item 4.56).

Business Activity

4.16 The Integrated Report must describe the main business activities. This may include:

how the organization differentiates itself in the market (for example: product differentiation, market segmentation, delivery channels, and marketing);
to what extent the business model depends on revenue generation from the initial point of sale (for example: extended warranty systems or charges for network usage);
how the organization addresses the need to innovate;
how the business model was designed to adapt to changes.

4.17 When relevant, the Integrated Report addresses the contribution to the organization's long-term success, resulting from initiatives such as process improvement, employee training, and relationship management.

Products

4.18 The Integrated Report identifies the organization's main products and services. There may be other products, such as by-products and waste (including emissions), that need to be discussed within the scope of the business model disclosure, depending on their relevance.

Outcomes

4.19 The Integrated Report must describe the main outcomes, including:

internal outcomes (for example: organizational climate, organization's reputation, revenues, and cash flows) and external outcomes (for example: customer satisfaction, payment of fees and taxes, brand loyalty, social and environmental effects);
positive outcomes (that is, those that lead to a net increase in capitals and therefore generate value) and negative outcomes (that is, those that lead to a net decrease in capitals and therefore reduce value).

4.20 Identifying and describing outcomes, especially external ones, requires the organization to consider capitals more broadly and not only those that belong to or are controlled by it. For example, it may be necessary to disclose effects on capitals along the value chain (for example: carbon emissions caused by products manufactured by the organization and labor practices of key suppliers) (see also items 3.30 to 3.35 regarding the determination of reporting boundaries).

Organizations with Multiple Business Models

4.21 Some organizations use more than one business model (for example: when operating in different market segments). Disaggregating the organization into its most significant operations and their respective business models is important to effectively explain how the organization operates. This requires considering each of the most significant business models separately and including comments on the limit of connectivity between the business models (such as the existence of synergistic benefits), unless the organization operates as an investment management company (in which case, it may be appropriate to focus on the investment management business model, rather than focusing on the business models of individual investments).

4.22 The Integrated Report of an organization with multiple businesses often needs to balance disclosure against the need to reduce complexity. However, relevant information should not be omitted. Generally, it is appropriate to align external reporting with internal reporting, considering the maximum level of information normally reported to those responsible for governance.

4D Risks and Opportunities

4.23 The Integrated Report must answer the question: What are the specific opportunities and risks that affect the organization's ability to generate value in the short, medium, and long terms, and how does the organization deal with them?

4.24 The Integrated Report must identify the organization's main specific risks and opportunities, including those related to the effect the organization exerts and the continuous availability, quality, and accessibility of relevant capitals in the short, medium, and long terms.

4.25 This may include the identification:

of the specific source of risks and opportunities, which may be internal, external, or, ordinarily, a combination of both. External sources include those arising from the external environment, as discussed in items 4.6 and 4.7. Internal sources include those arising from the organization's business activities, as discussed in items 4.16 and 4.17;
of the organization's assessment of the probability that the risk or opportunity will occur and the magnitude of its effect, if it does. This includes taking into consideration the specific circumstances that would lead to the occurrence of the risk or opportunity. This disclosure invariably involves a degree of uncertainty (see also item 4.50 regarding disclosures on uncertainty);
of specific measures taken to minimize or manage key risks or to generate value from key opportunities, including the identification of strategic objectives, strategies, policies, targets, and associated performance indicators.

4.26 Considering the Guiding Principle, Materiality, the way the organization addresses any real risks (whether in the short, medium, or long terms) that are essential to the organization's continuous ability to generate value, and that may have serious consequences, is normally included in the Integrated Report, even if the probability of the risks occurring is considered minimal.

4E Strategy and Resource Allocation

4.27 The Integrated Report must answer the question: Where does the organization want to go and how does it intend to get there?

4.28 The Integrated Report normally identifies:

the organization's strategic objectives in the short, medium, and long terms;
the strategies it has established or intends to implement to achieve these strategic objectives;
its resource allocation plans to implement its strategy;
how it intends to measure the achievements and desired results in the short, medium, and long terms.

4.29 This may include the description of:

the link between the organization's strategy and resource allocation plans and the information covered by other Content Elements, including how its strategy and resource allocation plans:
o are related to the organization's business model, and what changes may be necessary in this business model to implement selected strategies that lead to the understanding of the organization's ability to adapt to changes; o are influenced by and/or respond to the external environment, opportunities, and identified risks; o affect the capitals and the risk management structures associated with these capitals;
what differentiates the organization, gives it a competitive advantage, and allows it to generate value, such as:
o the role of innovation; o how the organization develops and exploits intellectual capital; o to what extent social and environmental issues are integrated into the organization's strategy, in order to bring a competitive advantage;
the main characteristics and conclusions of engagement with stakeholders that were used to formulate the strategy and resource allocation plans.

4F Performance

4.30 The Integrated Report must answer the question: To what extent has the organization already achieved its strategic objectives for the period and what are the results regarding effects on capitals?

4.31 The Integrated Report must contain qualitative and quantitative information on performance, which may include subjects such as:

quantitative indicators on targets, risks, and opportunities, explaining their relevance, implications, as well as the methods and assumptions used in their composition;
the organization's effects (positive and negative) on capitals, including relevant effects on capitals along the value chain;
the state of relationships with key stakeholders and how the organization meets their legitimate interests and needs;
the links between past and current performance, and between current performance and the organization's prospects.

4.32 Performance indicators that combine financial measures with other components (for example: the greenhouse gas emissions index over sales) or the narrative that explains the financial implications of significant effects on other capitals and other causal relationships (for example: expected revenue growth resulting from efforts to enhance human capital) may be used to illustrate the connectivity between financial performance and performance regarding other capitals. In some cases, this may include the monetization of certain effects on capitals (for example: carbon emissions and water use).

4.33 It may be relevant to the discussion of performance to include situations in which regulations have a significant effect on performance (for example: restrictions on revenues resulting from regulatory rate setting) or non-compliance by the organization with laws and regulations that may affect its operations in a significant way.

4G Perspective

4.34 The Integrated Report must answer the question: What are the challenges and uncertainties that the organization is likely to face in pursuing its strategy and what are the potential implications for its business model and future performance?

4.35 The Integrated Report, generally, anticipates changes over time, providing information based on solid and transparent analysis on:

the organization's expectations regarding the external environment it is likely to face in the short, medium, and long terms;
how this will affect the organization;
how the organization is currently equipped to respond to critical challenges and uncertainties that may arise.

4.36 Care must be taken to ensure that the declared expectations, aspirations, and intentions of the organization are grounded in reality. They must be proportional to the organization's ability to deliver from the opportunities available to it (including the availability, quality, and accessibility of appropriate capitals) and a realistic assessment of the organization's competitive scenario, its market positioning, and the risks to be faced.

4.37 The discussion of potential implications, including for future financial performance, normally includes:

the external environment, as well as risks and opportunities, with the analysis of how they may affect the achievement of strategic objectives;
the availability, quality, and accessibility of capitals used or affected by the organization (for example: the permanent availability of skilled labor or natural resources), covering the management of key relationships and why they are important for the organization's ability to generate value over time.

4.38 The Integrated Report may also include key indicators (including performance indicators) or objectives, relevant information from reliable external sources, and sensitivity analyses. If forecasts and projections are included in the report on the organization's perspective, it is useful to also include a summary of related assumptions. Comparisons between actual performance and previously identified targets also allow for the assessment of the current perspective.

4.39 Disclosures in the Integrated Report on the organization's perspective must be made taking into account the legal or regulatory requirements to which the organization is subject.

4H Basis for Preparation and Presentation

4.40 The Integrated Report must answer the question: How does the organization determine the topics to be included in the Integrated Report and how are these topics quantified or assessed?

4.41 The Integrated Report must describe the basis for its preparation and presentation, including:

a summary of the organization's process for determining materiality (see item 4.42);
the description of the reporting boundaries and how this was determined (see items 4.43 to 4.46);
a summary of the significant structures and methods used to quantify or assess relevant topics (see items 4.47 and 4.48).

Summary of the Process for Determining Materiality

4.42 The Integrated Report must include a summary of the process for determining materiality and the main judgments involved (see items 3.18 to 3.20). This may include:

a brief description of the process used in identifying significant topics, assessing their importance, and reducing them to relevant topics;
the identification of the role of those responsible for governance and the key people responsible for identifying and prioritizing relevant topics.

A link to a more detailed description of the materiality determination process may also be included.

Reporting Boundaries

4.43 The Integrated Report must identify its boundaries and explain how these were determined (see items 3.30 to 3.35).

4.44 Relevant risks, opportunities, and outcomes attributable to or associated with entities that make up the reporting entity must be reported in the organization's Integrated Report.

4.45 Risks, opportunities, and outcomes attributable to or associated with other entities/stakeholders must be reported in the Integrated Report insofar as they substantially affect the ability of the reporting entity to generate value.

COMISSÃO DE VALORES MOBILIÁRIOS
Rua Sete de Setembro, 111/2-5º e 23-34º Andares, Centro, Rio de Janeiro/RJ – CEP: 20050-901 – Brasil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2º, 3º e 4º Andares, Bela Vista, São Paulo/ SP – CEP: 01333-010 – Brasil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4º Andar, Brasília/DF – CEP: 70712-900 – Brasil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br RESOLUÇÃO CVM Nº 14, DE 9 DE DEZEMBRO DE 2020

4.46 Practical issues may limit the nature and scope of information that can be presented in the Integrated Report. For example:

the availability of reliable data on entities not controlled by the reporting entity;
the inherent inability to identify all risks, opportunities, and outcomes that may substantially affect the reporting entity's ability to generate value, particularly in the long term.

It may be appropriate to disclose these limitations and the actions being taken to overcome them in the Integrated Report.

Summary of significant structures and methods
4.47 The Integrated Report includes a summary of significant structures and methods used to quantify or evaluate relevant topics included in the Integrated Report (for example: the financial reporting standards applied in the compilation of financial information, the formula defined by the company to measure customer satisfaction, or the sectoral model for risk assessment).
More detailed explanations may be made available in other communications.

4.48 As mentioned in item 1.10, when information from the Integrated Report is similar to other information published by the organization or was based on such information, it is prepared on the same basis or is easily reconcilable with those other pieces of information. For example, when the performance indicator covers a similar topic, or is based on information published in the financial statements or the organization's sustainability report, it is prepared on the same basis and for the same period as the other information.

4I General guidance on reporting
4.49 The following general reporting topics are relevant to several Content Elements:

disclosure of relevant topics (see items 4.50 to 4.53);
disclosure on capitals (see items 4.54 and 4.55);
short, medium, and long-term time periods (see items 4.57 to 4.59);
aggregation and disaggregation (see items 4.60 to 4.62).

Disclosure of material (relevant) topics
4.50 Considering the nature of the relevant topic, the organization must provide:

essential information, such as:
o explanation of the topic and its effect on the organization's strategy, business model, or capitals; o relevant interactions and interdependencies that provide understanding of causes and effects; o the organization's perspective on the topic; o actions to manage the topic and their effectiveness; o the extent of the organization's control over the topic; o quantitative and qualitative disclosures, including comparative information regarding previous periods, as well as targets for future periods;
if there is uncertainty about a topic, disclosures about the uncertainty, such as:
o explanation of the uncertainty; o the range of possible outcomes, associated assumptions, and how the information may change if the assumptions do not materialize as described; o volatility, range of certainty, or confidence interval associated with the information provided;
if essential information about the topic is considered indeterminable, disclose the fact and the reason;
if there is a significant loss of competitive advantage, make general disclosures about the topic instead of specific details (see item 3.51).

4.51 Depending on the nature of the topic, it may be appropriate to present it separately in the Integrated Report or throughout it together with different Content Elements.

4.52 Care must be taken to avoid generic disclosures. Information should only be included when it has practical use to achieve the main objective of the Integrated Report, as mentioned in item 1.7. This requires that disclosures be specific to the organization's circumstances. In this way, the lists of examples and considerations displayed as highlights, with respect to each Content Element, are not intended to be disclosure checklists.

Characteristics of quantitative indicators
4.53 Quantitative indicators, such as performance indicators, can help increase comparability, being particularly useful for expressing and reporting information in comparison with targets. The common characteristics of appropriate quantitative indicators may include that they are:

relevant to the organization's circumstances;
consistent with indicators used internally by governance bodies;
connected (for example: showing connectivity between financial and other information);
focused on the topics identified by the organization's materiality determination process;
presented with corresponding targets, forecasts, and projections for two or more future periods;
presented for multiple periods (for example: three periods or more) to enable the appreciation of trends;
presented based on targets, forecasts, and projections previously reported, for the purpose of accountability;
consistent with generally accepted sectoral or regional benchmarks, creating a basis for comparison;
reported uniformly over successive periods, regardless of whether the resulting trends and comparisons are favorable or unfavorable;
presented with qualitative information, to provide context and improve significance.

Relevant qualitative information includes the explanation of:
o measurement methods and underlying assumptions; o reasons for significant deviations from targets, trends, or benchmarks, and why they are or are not expected to repeat.

4.54 Disclosures on capitals or capital components:

are determined based on their effects on the organization's ability to generate value over time, and not by whether they are, or are not, owned by the organization;
include the factors that affect their availability, quality, and accessibility, and the organization's expectations regarding their ability to produce flows from them that meet future demand. This becomes particularly relevant with respect to capitals with little availability, which are non-renewable, and which may affect the long-term viability of the organization's business model.

4.55 When it is not viable or sensible to quantify significant movements in capitals, qualitative disclosures must be made to explain changes in the availability, quality, or accessibility of capitals as business inputs, and how the organization increases, decreases, or transforms them. However, it is not necessary to quantify or describe the movements between each capital for each disclosed topic.

Complexity, interdependencies, and trade-offs
4.56 This Guidance does not require the Integrated Report to account, exhaustively, for all complex interdependencies between capitals, so that the net impact of the organization on the global stock of capitals is computed. It is important, however, that the Integrated Report discloses the interdependencies considered in determining the boundaries of reporting, as well as the important trade-offs that influence value generation over time, including trade-offs:

between capitals or between capital components (for example: job creation through an activity that adversely affects the environment);
over time (for example: the choice of a course of action, when another would result in greater capital increase, but only in a future period);
between capitals belonging to the organization and those belonging to others or to no one.

Time periods for short, medium, and long terms
4.57 The dimension of future time to be considered in the preparation and presentation of the Integrated Report is, as a rule, more extensive than in other forms of reporting. The duration of each time period for short, medium, and long terms is decided by the organization, considering its business and investment cycles, its strategies, and the legitimate interests and needs of its key stakeholders. Thus, there is no single answer to establish the duration of each term.

4.58 Time periods vary according to:

the industry or sector (for example: the strategic objectives of the automotive industry, as a rule, cover two model-cycle periods, ranging from eight to ten years, while in the technology industry, time periods may be significantly smaller);
the nature of the outcomes (for example: certain topics that affect natural, social, and relationship capitals may, by nature, be of very long terms).

4.59 The duration of each reporting time period and the reason for that duration may affect the nature of the information disclosed in the Integrated Report. For example, as longer-term topics are likely more affected by uncertainties, information about them is likely to be of a more qualitative nature, while information on shorter-term topics fits better with quantification or even monetization. However, it is not necessary to disclose the effects of each topic for each time period.

Aggregation and disaggregation
4.60 Each organization defines the level of aggregation (for example: by country, controlled entity, division, or location) to present information that is appropriate to its circumstances. This includes weighing the effort required to disaggregate (or aggregate) information against any additional meaning of the information reported on disaggregated (or aggregated) bases.

4.61 In some situations, the aggregation of information may result in a significant loss of meaning and not highlight exceptionally strong or weak performance in specific areas. On the other hand, unnecessary disaggregation can lead to clutter, with adverse effects on the intelligibility of the information.

4.62 The organization disaggregates (or aggregates) information at the appropriate level, taking into account, particularly, how senior management and governance bodies manage and supervise the organization and its operations. As a rule, this should lead to the presentation of information based on the business segments or geographic areas used for financial reporting purposes (see also items 4.21 and 4.22 regarding organizations with multiple business models).

GLOSSARY
For the purposes of this Guidance, unless otherwise indicated, the following terms have the meanings assigned below:

Capitals: Stocks of value from which all organizations depend for their success. They serve as inputs to their business model and increase, decrease, or transform due to the activities of the business and the organization's products. In this Guidance, capitals are classified as financial, manufactured, intellectual, human, social and relationship, and natural.

Performance: The organization's achievements relative to its strategic objectives and its results in terms of the effect on capitals.

Content Elements: The categories of information required for inclusion in the Integrated Report. The Content Elements, which are fundamentally linked to each other and are not mutually exclusive, are presented in the form of questions, which, when answered, make their interrelationships clear.

Strategy: Strategic objectives combined with strategies to achieve them.

Value Generation: The process that results in increases, decreases, or transformations in capitals, occasioned by the activities of the business and the organization's products.

Inputs: The capitals (resources and relationships) used by the organization in its business activities.

Reporting Boundaries: The limits within which topics are considered relevant for inclusion in the organization's Integrated Report.

Material (relevant) / Materiality (relevance): A topic is relevant if it can substantially affect the organization's ability to generate value in the short, medium, and long terms.

Business Model: The organization's system for transforming inputs, through its business activities, into products and outcomes that aim to fulfill the organization's strategic purposes and generate value in the short, medium, and long terms.

Stakeholders: Groups or individuals, for whom it is reasonable to expect to be substantially affected by the activities of the business, by the products or by the outcomes of the organization; or the actions of these, for whom it is reasonable to expect to be able to substantially affect the organization's ability to generate value over time. Stakeholders may include providers of financial capital, employees, customers, suppliers, business partners, local communities, NGOs, environmental groups, legislators, regulators, and policymakers.

Integrated Thinking: The effective consideration that the organization gives to the relationships between its various operational and functional units, as well as to the capitals it uses or affects. Integrated thinking leads to integrated decision-making and actions that consider value generation in the short, medium, and long terms.

Guiding Principles: The principles that support the preparation and presentation of the Integrated Report, informing the content of the report and the manner in which the information is presented.

Products: The organization's products and services, as well as any by-products and waste.

Providers of Financial Capital: Holders of equity and debt, and other providers of financial capital, both existing and potential, including lenders and other creditors. This includes the ultimate beneficiaries of investments, owners of collective assets, and asset managers or fund managers.

Integrated Reporting: The process based on integrated thinking, which results in the organization's periodic Integrated Report on value generation over time and the respective communications on aspects of value generation.

Integrated Report: A concise communication about how the organization's strategy, governance, performance, and perspectives, within its external environment, lead to value generation in the short, medium, and long terms. It is the final product resulting from the application of the concept of Integrated Reporting in an organization.

Governance Bodies: The people or organization/organizations (for example: board of directors or corporate agent) with commitment to the supervision of the strategic direction of the organization and its obligations, with respect to accountability and responsibility for management.

Outcomes: The internal and external (positive and negative) consequences for capitals, resulting from the activities of the business and the organization's products.

APPENDIX A - SUMMARY OF REQUIREMENTS

USE OF THE GUIDANCE

Format of Reporting and relationship with other information
1.12 The Integrated Report must be an identifiable communication with a designation.

Application of the Guidance
1.17 Any communication that claims to be an Integrated Report and makes references to the Framework must meet all the requirements identified in bold, unless:

the unavailability of reliable information or specific legal prohibitions cause the inability to disclose relevant information;
the disclosure of relevant information could cause significant competitive harm.

1.18 In case of unavailability of reliable information or specific legal prohibitions, the Integrated Report must:

indicate the nature of the omitted information;
explain the reason for the omission;
in case of data unavailability, the measures taken to obtain the information and the expected timeframe for this must be identified.

Responsibility for the Integrated Report
1.20. The Integrated Report must include the representation of the governance bodies with:

the recognition of their responsibility to ensure the completeness (integrity) of the Integrated Report;
the recognition of having applied collective thinking in the preparation and presentation of the Integrated Report;
their opinion or conclusion regarding whether the presentation of the Integrated Report is in accordance with this Framework or, if the Report does not contain such representation, it must explain:
o the role played by the governance bodies in the preparation and presentation of the Integrated Report; o the measures being taken to issue such representation in future reporting vehicles; o the timeframe to do so, which must not exceed the organization's third Integrated Report that makes reference to this Framework.

GUIDING PRINCIPLES

Strategic focus and future orientation
3.3 The Integrated Report must offer the vision of the organization's strategy and how it relates to the organization's ability to generate value in the short, medium, and long terms, as well as to its use and its effects on capitals.

Connectivity of information
3.6 The Integrated Report must show a holistic image of the combination, interrelationship, and dependencies between the factors that affect the organization's ability to generate value over time.

Relationship with stakeholders
3.10 The Integrated Report must provide a vision of the nature and quality of the relationships that the organization maintains with its key stakeholders, including how and to what extent the organization understands, takes into account, and responds to their legitimate interests and needs.

Materiality (relevance)
3.17 The Integrated Report must disclose information on topics that substantially affect the organization's ability to generate value in the short, medium, and long terms.

Conciseness
3.36 The Integrated Report must be concise.

Reliability and completeness
3.39 The Integrated Report must cover all relevant topics, both positive and negative, in a balanced and error-free manner.

Uniformity and comparability
3.54 The information in the Integrated Report must be presented:

on uniform bases over time;
in a manner that allows comparison with other organizations as it is important for the organization's own ability to generate value over time.

CONTENT ELEMENTS

Overview of the organization and its external environment

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020

4.4 The Integrated Report must answer the question: What does the organization do and what are the circumstances in which it operates?

Governance
4.8 The Integrated Report must answer the question: How does the organization's governance structure support its ability to generate value in the short, medium, and long term?

Business Model
4.10 The Integrated Report must answer the question: What is the organization's business model?

Risks and Opportunities
4.23 The Integrated Report must answer the question: What are the specific opportunities and risks that affect the organization's ability to generate value in the short, medium, and long term, and how does the organization deal with them?

Strategy and Resource Allocation
4.27 The Integrated Report must answer the question: Where does the organization want to go and how does it intend to get there?

Performance
4.30 The Integrated Report must answer the question: To what extent has the organization already achieved its strategic objectives for the period and what are the results regarding effects on the capitals?

Perspective
4.34 The Integrated Report must answer the question: What are the challenges and uncertainties that the organization is likely to face in pursuing its strategy and what are the potential implications for its business model and future performance?

Basis for Preparation and Presentation
4.40 The Integrated Report must answer the question: How does the organization determine the topics to be included in the Integrated Report and how are these topics quantified or assessed?

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020

APPENDIX B – LIST OF FIGURES
Figure 1: Value generated for the organization and for third parties:

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br CVM RESOLUTION NO. 14, OF DECEMBER 9, 2020

CVM Resolution No. 14 of December 9, 2020

Lineage: In force