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CONTENTS

LETTER FROM THE CHAIRMAN ECONOMIC PERFORMANCE ENVIRONMENTAL PERFORMANCE

CORPORATE PROFILE

Vision and Mission Corporate Governance and Ethics

Urban Forest ®

Efficient Use of Clean Transportation

Emissions

Forest Conservation and Biodiversity

Relevant Figures Environmental Management

Water

Energy Sustainability Model

Office of the CEOGeographic Presence

Code of Ethics Business Groups and Products Value Chain

Bio Pappel in Figures 2018

6 16 26

18 28

38

329 19

30

40

36

42

1021

1122

1225

14

SOCIAL PERFORMANCE

Employee Training and Development

Community Engagement

Community and Industry Involvement

Awards and Certifications

Sustainable Development Goals

Occupational Health and Safety

Bio Pappel Foundation

Our Stakeholders

Our People GRI Content Index

Global Compact

About this Report

Letter of Verification

Contact Us

Quality of Life at Work

44

4674

82

86

89

90

50

48

56

70

72

84

52

68

71

5 IS2018

LETTER FROM THE CHAIRMAN[102-14, 102-15, 102-16 / SR PRINCIPLE 2]

With 35 years of experience in the industry, Bio Pappel started with an ambi-tious dream: building a world-class paper company to drive the sustainable use of our forests based on a clear mission: serving Mexico through our business capacity, supported by a rigorous culture of learning and innova-tion and inspired by the best business practices from the international paper industry.

Since then, the company has successfully created a legacy within the paper industry, expanding vertically and geographically to become an internatio-nal company and the leader manufacturer of paper and paper products in Mexico, with operations in the United States and Latin America.

As the paper industry is intensive in terms of the use of natural resources, at Bio Pappel we have decided to become part of the solution to combatting climate change. This is why our DNA has evolved, and we are developing an efficient sustainability model that allows us to produce paper without cutting down trees, implement large-scale recycling programs, co-generate our own green energy, recycle the water used in our processes, and drive the development of sustainable forests in Mexico.

At Bio Pappel, we always place the highest value on integrity, ensuring com-pliance with our Code of Ethics in everything that we do. We are a com-pany that is constantly learning, creating new leaders and rewarding the outstanding performance of our people, in order to become a company where everyone wants to work.

Thanks to our community engagement programs and the work of the Bio Pappel Foundation, we promote a culture of sustainability that foments the recycling of paper and other products to help protect nature and our planet.

The information contained in this Sustainability Report reflects Bio Pappel’s on-going commitment to the 10 principles of the UN Global Compact and the 17 Sustainable Development Goals. This Sustainability Report contains our Communication on Pro-gress (CoP).

We would like to invite you to browse through our Sustainability Report and discover more about the soul and essence of our Company and its people, in addition to our commitment to our stakeholders, to Mexico and to nature.

MIGUEL RINCÓN ARREDONDOChairman of the Board of

Directors of Bio Pappel

7 IS2018

CORPORATE PROFILE

[102-16, 103-2, 103-3 / SR PRINCIPLE 2]

Our business philosophy focuses on positioning Bio Pappel as a company that promotes a green low-carbon economy that inspires and helps others to achieve the same goal.

VISION

MISSION

Our company’s vision is to become a leader in creating shared value based on a rigorous culture of learning, in-novation, productivity, ecology and social responsibility.

Our company’s mission is to competitively produce pa-per, paper products and sustainable packaging to effecti-vely contribute to the success of our customers, our com-pany and the environment.

9 IS2018

SUSTAINABILITY MODEL

Productivity, Innovation, Social Responsibility and Environment are the pillars that underpin all our activities and productive processes; these are aligned with our principles and allow us to serve Mexico with the best of our business capacity.

Environmental

Values

Vision

Productivity Innovation

Environment

Economic

Social

Sh

are

value

generation

Mission

Nuevo Mexico

El Paso

Chihuahua

Coahuila

SinaloaNuevo León

Durango

Guanajuato

Jalisco

Michoacán

HidalgoQuerétaro

Valle de MéxicoVeracruz

OaxacaChiapas

Puebla

Washington

B. California

Phoenix

Colorado

Texas

Colombia

GEOGRAPHICPRESENCE

Industrial Plant

Industrial Plant Project

Collection Center

Corporate Office

11 IS2018

[102-4, 102-6, 102-7 / CG PRINCIPLE 1]

WE OPERATE IN MEXICO, THE UNITED STATES AND COLOMBIA

BUSINESS GROUPSAND PRODUCTS[102-2, 102-6 / CG PRINCIPLE 1]

Thanks to our customers, we have become the largest manufacturer of paper, paper products and sustainable packaging in Mexico and Latin America, in addition to our growing presence in the United States.

Boardof Directors

The largest manufacturer of paper for packaging, con-tainers, wrapping and newspapers in the country, with industrial operations in Mexico and the United States.

The largest corrugated and high-quality graphic card-board packaging company in Mexico and Latin America.

A world-class paper company and the most iconic and recognized brand on the market.

Products: Paper rolls for packaging and containers, white and

brown liner paper for packaging, newspaper, paper for sacks, bags

and wrapping.

Products: High-quality graphic cardboard packaging, corruga-

ted and micro-corrugated cardboard, folding packaging, spe-

cial packaging, paper sacks and bags.

Products: Bond roll paper, bond sheet paper, cut sized paper,

colored paper and bristols, notebooks and specialty papers.

McKinley Mexico operates 5 industrial plants, as well as a wide-ran-ging supply and distribution network.McKinley USA operates 2 industrial plants in the USA, ensuring the highest levels of sustainability.

Given its efficient vertical integration, geographic presence, advan-ced technology and wide-ranging national network, Titan has been a market leader and the most reliable supplier for more than 80 years.

Scribe is the largest white paper conglomerate in Mexico and Latin America.Bio Pappel has replicated its sustainability model at Scribe, driving the creation of commercial forest plantations.

Our products are 100% recycled and FSC® Forest Stewardship Council® certified.

13 IS2018

BIO PAPPEL IN FIGURES 2018

[102-4, 102-7, 102-9]

MXN $26.4

1.44

11,211

46

2.8

16,600

OPERATION

62%

313,908

billion

million tons million

in sales.

of cardboard and paper recycled.

direct jobs.

industrial plants, collection centers and corporate offices.

trees saved.

indirect jobs.

in 16 states within Mexico, 5 in the United States and 1 in Colombia.

green energy generated through our Bio-Energy system.

training hours.

MXN $1.8

16.5

1,795

+2,650

5.76

billion

million m3 million tons

invested in sustainable processes.

of water recycled.

volunteers.

SME’s form part of our value chain.

of CO2e captured.

15 IS2018

Tizayuca PlantHigh-Quality Graphics Plant

ECONOMICPERFORMANCE[102-7, 102-9]

increase in annual sales.

of training in our Code of Ethics.

of our suppliers are Mexican.

invested in sustainable processes.

10.67%

10,821hours

MXN $1.8 Billion

94.4%

17 IS2018

[103-2, 103-3/PM]

RELEVANT FIGURESThrough our Finance Department, we comply with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), which are a series of international accounting standards that stipulate the financial information, reporting and measurement requirements used by the company.

2015 2016 2017 2018

19,300Direct Economic Value Generated

Indirect Economic Value Generated

Investment in Projects

17,295

627

21,862 23,902

19,106 21,394

837 966

26,452

22,4521,796

*Millions of Mexican pesos.**For further information about the financial performance of Bio Pappel, please consult the 2018 Annual Financial Report at: https://www.biopappel.com/en/finance

BOARD OF DIRECTORS

CORPORATE GOVERNANCEAND ETHICSOur operations and activities are undertaken within a transparent and reliable framework, coordinated by our Corporate Governance.

Pursuant to that established by the Ordinary General Shareholders Meeting, in addition to that stipulated in the Securities Market Act, our Board of Directors has 12 members, none of whom receive any financial compensation and 25% of whom are independent.

Our Board of Directors is responsible for authorizing the annual business stra-tegy, ensuring alignment with the business’ social precepts and managing our

internal control system.

The Auditing and Corporate Practice Committee (CAPS), which forms part of the Board of Directors, is responsible for ensuring that all administrative, accounting and internal con-trol policies are followed, in addition to communicating the company’s financial results.

To learn more about the procedures, operations or members of our Board of Directors, please review our 2018 Annual Financial Report:

https://www.biopappel.com/en/finance/financial-fundamentals/reports

19 IS2018

OFFICE OF THE CEO[102-18 / CG PRINCIPLE 4 & 5]

The Office of the CEO coordinates the internal system in conjunction with the Business Groups, Finance and Administration, and Sustainability departments.

The Office of the CEO is responsible for managing, coordinating and implementing the business activities of the company and its subsidiaries in accordance with the strategic plan agreed on by the Board of Directors.

21 IS2018

CODE OFETHICS[102-16, 103-2, 103-3 / CG PRINCIPLE 2, 4 & 5 / PM]

Our Code of Ethics ensures that every step we take is governed by integrity. Every year, we provide a Code of Ethics training to all employees, and to the new personnel when they join the Company.

It is periodically reviewed to ensure compliance with current laws and regulations. You can view the Code of Ethics by clicking:https://www.biopappel.com/en/our-company/our-

code-ethics

10,821 Code of Ethics training hours were recorded.

10,204 employees received training in our Code of Ethics and

Anti-Corruption Policy.

100% of new employees received training and a copy of

our Code of Ethics.

CODE OF ETHICS TRAINING

23 IS2018

[102-17, 103-2, 103-3, / PM]

ETHICS REPORTING HOTLINEWe promote transparent communication with our stakeholders through an open-channel program to report any complaints or violations of our Code of Ethics in an anonymous and secure manner.

Mail Drop E-mail Reporting Hotlines IntranetLocated in visible areas

in our [email protected] 01800 7727735 or

01800 7 PAPPELEthics Reporting Hotline Section

We have several channels that safeguard people’s anonymity

Complaints Reported to Bio Pappel and its Business Groups

20172016 2018299

65.9%

3%

31.1%

Total Number of Complaints

Suggestions on Improvements to Processes,Facilities and Working Conditions

Cases resulting in Employee Transfers, Training, Tighter Controls and More Simplified Processes

173

74%

20.2%

5.8%

215

68.4%

14.9%

16.7%

*Complaints reported include working conditions, policy compliance, discrimination, conflicts of interest, and supplier, customer and employee relationships, among others.

Cases resulting in Termination of Employment

[102-9 / PM / EP PRINCIPLE 1 & 2 / SR PRINCIPLE 3 Y 4]

VALUECHAIN

94.4% of our suppliers are Mexican, and some 2,650 SME’s form part of our value chain.

We have extended our commitment to sustainability to encompass our supply chain through our philosophy and Supplier Policy in order to have a greater impact and ensure that each of our clients receives the highest quality products.

In 2018, we provided 4,673 printed versions of our Code of Ethics to our suppliers, clients and carriers. We are currently developing a strategy to identify areas of opportunity for our suppliers in social and environmental areas, in addition to executing joint programs to help consolidate our operations.

Alongside our more than 2,800 suppliers, we reject any form of forced and child labor, discrimination and corruption.

25 IS2018

Veracruz PlantEnergy Cogeneration Plant

ENVIRONMENTAL PERFORMANCE [102-11, 103-2, 103-3 / PM]

We recycled 1.44million tons of paper

and cardboard.

We cogenerated

62% of the energy we use.

We captured 5.76 million tons of CO2e.

We recycled 74.3% of the water we use in

our processes.

27 IS2018

Hidalgo PlantWater Treatment Plant

ENVIRONMENTALMANAGEMENT

Our resources come from nature, which is why we are committed to streamlining our productive processes, which are governed by six pillars that allow us to mitigate our impact on the environment.

Circular Economy and Recycling.

Optimal Water Consumption and Recycling.

Carbon Capture: CO2e.

Conservation of Our Forests and Biodiversity.

Efficient Green Energy Use.

Efficient Use of Clean Transportation.

29 IS2018

URBAN FOREST

[103-2, 103-3, 301-2, 301-3 / EP PRINCIPLE 1&2 / PM]

This is one of the most important programs within our productive processes as, thanks to this model, every product becomes part of a circular economy: after they have been used, we collect and process them to turn them into 100% recycled, high-quality paper and paper products, over and over again.

Of the products we collect*:

• 84% is for making brown liner paper for packaging.• 16% is for manufacturing bond paper used for writing or printing.

*Information compiled by plant and by recycled raw material.

URBANFOREST

Collection

RecyclingPAPER

PaperProducts

Use

Was

te

We also coordinate urban solid waste management plans in conjunction with the local and state governments.

Thanks to our efforts in paper and paper products recycling, we have helped increase the national recycling index, which has risen from 40% in the year 2000 to 53.6% in 2018, according to

figures from the Mexican Chamber of the Paper Industry.

2016 2017 2018 2019 GOAL

1,443,160 1,515.122 1,442,021 1,500,000

PAPER AND CARDBOARD RECYCLING (TON./YEAR)

31 IS2018

Durango PlantEnergy Cogeneration Plant

ENERGY[[103-2, 103-3 / PM]

33 IS2018

We are not only a paper company; we are also an efficient green energy company.

As part of our goal to become one of the most energy efficient companies in the paper industry, in 2018, we increased the generation capacity at two of our facilities where the Bio-ENERGY system is already up and running: our Querétaro and Veracruz mills.

To the end of 2018, 12 plants are now operating using our Bio-ENERGY system.

As part of a virtuous cycle, the company generates its own energy, taking advantage of the steam pro-duced through its industrial processes. Our Bio-ENERGY model helps us to efficiently meet the needs of the company, in compliance with the new Energy Transition Act, stemming from Mexico’s signing of the Paris Agreement.

Wind power

Cogeneration

Biogas(Generated in landfills)

Photovoltaic energySolar panels

Urban solid waste

Solid waste boiler

Motor

Recoveryboiler

GeneratorCompressor

Gasturbine

Thermal energy

steam process

Generated electricity

Gas exit

Biogas

Solid waste

WaterFuel

natural gas

Mill’s solid waste: Biomass(Sludges)

ENERGY MIXAT BIO PAPPEL

2016 2017 2018 2019 GOAL1,285,608Electricity (MWh)

Wind Energy (MWh)

Fuel Oil (m3)

Natural Gas (Gigacalories)

Gasoline (Liters)

Diesel (Liters)

23,914

4,400

3,565,038

993,985

2,924,112

1,320,352 1,345,902

21,802 10,2833,551

3,625,661

1,001,421

3,410,057

11,035

4,152,298

977,542

6,946,418

1,372,820

10,489

11,256

4,235,344

997,346

7,085,346

35 IS2018

ENERGY TYPE

ELECTRICITY USED, PURCHASED AND GENERATED (MWh) [302-1]

Electricity Used

Electricity Purchased

Electricity Generated

[302-1]

ENERGY USE

38%

62%46%

54%53%47%

90

9,7

11

MW

h

52%48%

2014

1,2

85

,60

8 M

Wh

52%48%

20161

,32

0,3

52

MW

h2017

1,3

45

,90

2 M

Wh

2018

1,2

52

,57

4 M

Wh

2015

At Bio Pappel, we want to be an agent of change to help tackle climate change. Thanks to our Urban Forest® recycling project, for every ton of paper recycled, an average of 4 tons of CO2e* is captured.

We promote transparency by periodically and voluntarily publishing our emissions inventory through the GHG Mexico Program coordinated by the Mexican Ministry of the Environment and Natural Resources (SEMARNAT) and the Commission on Private Sector Studies for Sustainable Development (CESPEDES). We also report our emis-sions inventory to the Carbon Disclosure Project (CDP).

*Based on a study published by Centro Mario Molina and the Inter-American Development Bank for the Mexican Chamber of the Paper Industry.

In 2018, we captured 5.76 million tons of CO2e

EMISSIONS

37 IS2018

2016

2016INDICATOR

2017

2017

2018

2018

2019 GOAL

868

0.68

*CO2e emissions

NOx

CO2e capture

SOx (SO2)

Net CO2e capture

Particles

Methane

5,773

0.35

4,904

0.07

0.28

895

0.65

1,036

0.73

6,060

0.28

5,768

0.75

5,166

0.06

0.02

4,732

0.090.030

1,057

5,883

4,827

CO2e emissions and Capture (Thousands of Ton)

Gas Emissions (Thousands of Tons)

*Direct or Scope 1 GHG Emissions from Fossil Fuels.

Measured using ISOKINETIC studies based on NOM085 SEMARNAT and emission calculations based on AP42.

[103-2, 103-3, 305-1]

[305-7]

WATER[303-3 / PM / EP PRINCIPLE 1&2]

2016INDICATOR 2017 2018 2019GOAL

2016 Unit(m3/ton)

2017 Unit(m3/ton)

2018 Unit(m3/ton)

2019UNIT GOAL

(M3/TON)

21,215 21,122 22,186 22,630Water Use

Waste Water Discharge

Net Water Use

16,653 16,207 16,501 16,831

4,562 4,914 5,685 5,799

9.0 8.7 7.6 8.5

7.1 6.7 5.6 6.4

1.9 2.0 1.9 2.1

WATER USE AND DISCHARGE (THOUSANDS OF M3/YEAR) [306-1]

Another of our major environmental goal is to optimize water consumption and recycling, which we have made possible thanks to our water treatment systems and zero-effluent processes. As a result of these processes, we use a third of the water traditionally needed by the paper industry.

In 2018, we reused 74.3% of the water from our processes, the equivalent of 16.5 million m3

We have received the Water Efficiency Award from Pulp and Paper International for having one of the most efficient water footprints in the global paper manufacturing industry.

39 IS2018

27%Extracted Surface Water

4%Third-Party Treated and Recycled Industrial Water

41%Extracted Groundwater-Well

28%Municipal Potable WaterTOTAL WATER EXTRACTION

BY SOURCE (THOUSANDS OF M3/YEAR) [303-1]

22,186Total Water

Consumption

*Measuring equipment owned by Bio Pappel, endor-sed and monitored by corresponding authorities and accredited by third parties.

EFFICIENT USE OF CLEAN TRANSPORTATION[PM / EP PRINCIPLE 1&2]

41 IS2018

We have continued implementing our successful transportation system, reducing loading and unloading times and operating under a reverse logistics system. In 2018, we changed the transportation methods used for se-veral raw materials and finished products, from trucks to rail, helping reduce CO2e emissions by 1,471 tons in 2018.

For the fifth consecutive year, the Ministry of the Environment and Natural Resources (SEMARNAT), as part of its Clean Transportation Program, awarded us the “Excellent Environmental Performance” certification.

CLEAN TRANSPORTATION

FOREST CONSERVATIONAND BIODIVERSITYAt Bio Pappel, we strive every single day to maintain a balance in nature, which can be seen through our commitment to turning the forests of the Scribe plant in San Rafael, which cover an area of more than 4,000 hectares, into a forest reserve, providing one of the most important sources of oxygen in south-eastern Mexico

Every year, we increase the number of trees in every community in which we operate through refores-tation campaigns, in addition to protecting local flora and fauna.

[304-2/PM]

43 IS2018

We are part of Conservation International’s Council of the Americas, one of the largest organizations in the world dedicated to protecting the

environment and biodiversity.

45 IS2018

We created 11,211 direct jobs and

16,600 indirect jobs.

We offered 313,908 training hours.

4 of our workplaces obtained the Mexican Equality

and Non-Discrimination Standard certification.

We brought 6,382 volunteering hours into

the community.

SOCIALPERFORMANCE

MEN MEN MENWOMEN WOMEN WOMEN

8,637

144

93

8,874

8,635

143

87

8,865

8,441

133

87

8,661

1,896

32

20

1,948

2,025

34

20

2,079

2,485

39

26

2,550

47 IS2018

OUR PEOPLE[102-7, 102-8, 102-41/ PM]

We are a company that is committed to lifelong learning; we create leaders at all operational levels; and we reward outstanding performance. This is why we continuously improve the experience of the people who work at Bio Pappel.

*The information presented in these tables is compiled from the Employee Balance Sheet for each workplace.

MEN

MEN

MEN

MEN

COUNTRY

MENWOMEN

WOMEN

WOMEN

WOMEN

WOMEN

2017

2018

2016

2017

2016 2017 2018

2018

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

7,806

8,433

7,808

8,638

7,1691,830

2,483

1,714

2,026

2,1109,636

10,916

9,522

10,664

9,279Permanent Contract

Full-Time

Mexico

Temporary Contract

Part-Time

United States

Colombia

TOTAL

Total Employees

TOTAL EMPLOYEES

1,059

228

1,066

227

1,492249

67

234

53

4401,308

295

1,300

280

1,932

8,865

8,661

8,874

8,865

8,6612,079

2,550

1,948

2,079

2,55010,944

11,211

10,822

10,944

11,211

WORKFORCE BY CONTRACT TYPE [102-8, 102-41]

WORKFORCE BY WORKING DAY[102-8, 102-41]

WORKFORCE BY GENDER AND REGION [102-8]

*61% of our employees are included in collective bargaining agreements. We determine salaries and changes to the benefits packages of our employees through their trade union representatives.

[103-2, 103-3, 404-2 / SR PRINCIPLE 3]

TRAINING AND DEVELOPMENT

Developing our talent...

Every single day, we strive to motivate our people to fulfill their maximum potential.

For the third year, the Bio Pappel Institute continues to be our leading training tool to help drive the professional development of our employees. The training opportunities we offer them aim to boost their skills and experience in areas to help benefit them both professionally and personally.

Some of the areas we focused on in 2018, through the Bio Pappel Institute, include:

• Workplace Equality and Non-Discrimination• Code of Ethics• Human Capital Congress• Strategic Alliance Congress• IT Security• Effective Meetings

22,422 employees attended training courses.

77.2% men. 22.8% women.

313,908 training hours.

[103-2, 103-3]

BIO TALENT:DEVELOPING OUR POTENTIAL

49 IS2018

We are convinced that in order to maintain a positive work environment, we need to be open with all our employees. With this in mind, through our Bio-Talent Program, we periodically carry out performance eva-luations, where we provide opportune feedback to help drive the individual and professional development of each person.

In 2019, the Bio Talent program will evolve to help consolidate Individual Development Plans, as well as the Career and Succession

Plans for our employees, increasing their objectivity in the evaluation processes and their effectiveness based on their role. The tech-

nological tool we use for performance evaluations will undergoing rebranding, helping ensure a simpler, faster and more effective

user experience.

11% of our employees had their performance evaluated and

received feedback from their direct supervisors.

We set 5,049 performance goals

and 3,303 development goals.

We evaluated the performance

of 1,030 employees.

QUALITY OF LIFE AT WORK

• Promoting the equitable distribution of responsibi-lities among men and women.• Eliminating gender roles and stereotypes that prevent the development of our employees.

• Ensuring a culture of accessibility.

• Helping people with disabilities to find work at our facilities.

COMMITTED TO EQUAL EMPLOYMENT OPPORTUNITIES AND NON-DISCRIMINATION

We understand that every person is different, and these differences generate value for our operations and the growth of our com-pany. That is why ensuring equal opportunities and a fair workplace for our male and female employees is a priority for Bio Pappel, which is why we have established the following commitments:

Our Labor Equality and Non-Discrimi-nation Policy, which is available to and

understood by our employees.

Equal Employment Opportunities and Non-Discrimination Committee at each of our plants and offices.

Our Code of Ethics, which highlights our zero-tolerance approach to

discrimination, harassment and bullying.

Our Ethics Reporting Hotline.

It is of the utmost importance that everyone at Bio Pappel acts in accordance with these commitments, and to ensure their correct implementation we have:

[PM]

51 IS2018

In 2019, our goal is to certify 8 more workplaces, in addition to complying with and monitoring the goals set in 2017, continuing to promote training and awareness to create a culture free from discrimination.

We complied with UN Women and its seven Women’s Empower-ment principles in the workplace.

We implemented a specific training plan in areas of equality and non-discrimination, through

face-to-face and virtual sessions offered via our Bio Pappel Institute platform.

We have increased the hiring and participa-tion of women in our activities by 26.4% over

the past 5 years.

We certified 4 more workpla-ces in the Mexican Equality and

Non-Discrimination Standard.

We forged a partnership with CONAPRED to bolster our

training plan.

We know that workplace inclusion helps create diverse teams and promotes innovation, which is why, in 2018, we promoted a culture of inclusion through the following activities:

53 IS2018

We strive to ensure our processes and facilities are safe for our employees, suppliers, contractors and clients, through programs such as the Occupational Health and Safety Policy and the Occupational Health and Safety Commission at each of our workplaces, which represents 100% of our employees.

Our goal is to have zero accidents in all of our operations.

OCCUPATIONAL HEALTH AND SAFETY

[SR PRINCIPLE 3]

OCCUPATIONAL HEALTH AND SAFETY

55 IS2018

ACCIDENTS

107,030 hours of face-to-face training for employees, focusing mainly on the following topics:

In 2018, we invested MXN $35.54 million in safe facilities and systems.

To help achieve our zero-accident goal, we implemented different programs.

• The correct tools and occupational medicine treatment for employees at each of our opera-tion centers.

• All our workplaces now host our annual Bio-Health Fairs, an event during which we offer information to our employees regarding visual and oral health, obesity, prevention measures and among others.

57 IS2018

At Bio Pappel, we understand the fundamental role of forging a close and lasting relationship with the communities surrounding our operations. Through the three principles of our [ScoRE]strategy, we drive engagement and generate shared value:

We benefitted 31,662 people.

88 communities in 16 states: Baja California, Chiapas, Chihuahua, Coahuila, Durango, the State of Mexico, Guanajuato, Hidal-go, Jalisco, Michoacán, Nuevo León, Oaxaca, Pue-bla, Querétaro, Sinaloa and Veracruz.

COMMUNITYENGAGEMENT[103-2, 103-3, 203-1 / PM]

ENVIRONMENTAL EDUCATION AND CONSERVATION

COMMUNITY DEVELOPMENT

EDUCATION FOR DEVELOPMENT

2018 RESULTS

We have created a culture of separating and recycling post-consume

paper and cardboard.

186 tons of paper and cardboard.

Through collection drives and with the support of Bio Pappel

Collection Centers.

34 educational institutions in the states of Durango, Coahuila, Nuevo León, Guanajuato, Hidalgo, Jalisco,

the State of Mexico, Puebla, Oaxaca and Veracruz.

Students, academic authorities and parents.

HUG A TREE

1ENVIRONMENTAL EDUCATION AND CONSERVATION

What?

How Much?

How?

Where?

Who?

59 IS2018

We promote the conservation and reforestation of our forests.

We raise awareness among young generations about envi-

ronmental conservation.

State forestry authorities and Bio Pappel volunteers.

Boys, girls and young people.

Through reforestation campaigns.

Through talks, events and workshops.

16 reforestation campaigns. 14,169 trees planted.

177 talks to 16,370 students.

The states of Mexico, Jalisco, Oaxaca, Veracruz, Durango, Guanajuato and Querétaro.

Elementary schools in the communities in which we operate.

REFORESTATION: OUR GREATEST ROLE

LEND THE ENVIRONMENT A HAND

What? What?

Who? Who?

How? How?

How Many? How Many?

Where? Where?

2 COMMUNITY DEVELOPMENT

We show how we produce paper through recycling it and educate peo-ple about the importance of environ-

mental conservation.

33 events for 1,392 boys and girls.

Through recreational and educational activities in conjunction with

Bio Pappel’s Social Responsibility coordinators.

Bio Pappel’s facilities.

The sons and daughters of our employees.

BIO PAPPEL GREEN SUMMER

What?

How Many?

How?

Where?

Who?

61 IS2018

We organize painting, cleaning and/or infrastructure improvement

activities.

9,926 people benefitted through 57 activities.

Through an analysis of the communities where we operate and their needs, organi-zing activities and providing the necessary

materials and supplies.

22 communities in the states of Durango, Nuevo León, Jalisco, Guanajuato, Hidalgo, Mexico,

Oaxaca and Veracruz.

Neighboring communities, with the support of Bio Pappel employees and

volunteers.

TAKING CARE OF MY COMMUNITY

What?

How Many?

How?

Where?

Who?

3 EDUCATION FORDEVELOPMENT

We promote female entrepreneurship, contributing to community economic

development.

8,190 training hours for 117 women.

Through training for women in a trade or activity that offers them access to additional income. We forge partnerships with local authorities and provide the

necessary materials and the fees of the experts who give the workshops.

The states of Durango, Guanajuato, Querétaro, Mexico, Jalisco, Oaxaca and Veracruz.

Women from neighboringcommunities.

PRODUCTIVE WORKSHOPS FOR WOMEN’S EMPOWERMENT

What?

How Many?

How?

Where?Who?

63 IS2018

We explain our paper production and recycling processes.

2,062 students from 86 schools.

Through opening the doors of our plants and coordinating special tours.

The states of Hidalgo, Querétaro, Guanajuato, Durango, Jalisco, Nuevo León, Oaxaca, Veracruz,

Michoacán, the State of Mexico, and Chiapas.

High-school and college students.

SCHOOL VISITS

What?

How Many?

How?

Where?

Who?

V

BIO PAPPEL GREEN SCHOOLS

We raise awareness among children through environmental education programs.

Through promoting the development of environmental conservation programs, such as: school gardens, botanic gardens, compost, gardens designed for pollinators, and many more. We also provide on-going support to schools through technical consultancy services, tools, and stakeholder relations. We certify Bio Pappel Green Schools that meet a series of requirements, including: the implementation of an ecology club comprising students and parents, environmental training for teachers, and the coordination of a number of environmental activities throughout the school year.

What?How?

V

65 IS2018

Teachers, students and parents at public elementary schools.

The states of Nuevo Leon, Jalisco, Durango, Querétaro, Mexico, Oaxaca and Veracruz.

19 schools certified, and 4,876 people benefitted.

Who?

Where?

How Many?

*Bio Pappel Green Schools began operating in 2017.

67 IS2018

The result of promoting a culture of solidari-ty and support is that it allows our employees to become Bio Pappel volunteers, helping us to foster the development of the communities where we operate.

PROGRAM RESULTS

PRINCIPLE Program Indicator 2015 2016 2017 2018

190

41

79

91

--

1,826

6,320

6,320

--

6,391

11,565

4,560

816

1,243

170 179

39 41

134 162

109

--

130

3

1,841 1,867

10,015 11,340

7,677

--

9,100

550

6,444 6,535

13,299 15,571

7,000 9,163

1,454 1,575

1,348 1,402

186

34

177

117

19

1,795

16,370

8,190

4,876

6,382

14,169

9,926

2,062

1,392

Environmental Education and Conservation

CommunityDevelopment

Education for Development

Bio Pappel Volunteering

Hug a Tree

Reforestation: Our Greatest Role

Taking Care of My Community

School Visits

Bio Pappel Green Summer

Lend the Environment a Hand

Productivity Workshops

Bio Pappel Green Schools*

Tons

Talks Given

Women Benefitted

Schools Certified

Company Volunteers

Attendees

Training Hours

Beneficiaries

Volunteer Hours

Institutions Benefitted

Trees Planted

Beneficiaries

Attendees

Beneficiaries

BIO PAPPELVOLUNTEERING

The mission of the Bio Pappel Foundation is to promote sustainability through corporate, government and social initiatives that drive the recycling of paper and other products, safeguarding the environment and the planet.

BIO PAPPEL FOUNDATION

[103-2, 103-3]

69 IS2018

We support interactive learning opportunities for children, focusing on promoting a culture of recycling

and sustainability.

We are part of Conservation International’s Council of the Americas, one of the largest organizations in the

world dedicated to protecting the environment and biodiversity.

We support the Mexican Red Cross’ humanitarian work as they aid vulnerable and at-risk people throughout

the country.

We help maintain the green lung of Mexico City, Chapultepec Forest.

We promote child development in Mexico through education and entertainment projects.

We offer employment opportunities at our plants and offices to people with disabilities.

PAPALOTE CHILDREN’S MUSEUM CONSERVATION INTERNATIONAL

MEXICAN RED CROSS CHAPULTEPEC FOREST TRUST

KIDZANIA BEST BUDDIES MEXICO

We are active members of the following national and international associations:

• National Chamber of the Cellulose and Paper Industries

• Global Environmental Management Initiative (GEMI)

• Commission on Private Sector Studies for Sustainable Development (CESPEDES)

• Confederation of Industrial Chambers of Mexico (CONCAMIN)

• UN Global Compact

• Mexican Center for Philanthropy (CEMEFI)

• Conservation International

[102-13, 103-2, 103-3]

COMMUNITY AND INDUSTRY INVOLVEMENT

71 IS2018

[102-40, 102-42, 102-43, 102-44]

CUSTOMERS

STAKEHOLDERS RESPONSE/ACTIONS IMPLEMENTED

EXPECTATIONS COMMUNICATION CHANNELS

CONTACT FREQUENCY

COMMUNITIES

BOARD OF DIRECTORS AND SHAREHOLDERS

GOVERNMENT

OUR PEOPLE

CIVIL SOCIETY ASSOCIATIONS AND THE GENERAL PUBLIC

SUPPLIERS

BANK CREDITORS

Through a range of channels, we maintain open and on-going communication to identify those groups that directly or indirectly par-ticipate in our processes, keep our expectations and relevant issues up to date, and detect areas of opportunity to help us consolidate the business strategy that underpins our current position.

OUR STAKEHOLDERS

Offer competitive and sustainable products that efficiently contribute to the success of

the company and that of its customers.

Create sustainable value in all our operations through competition, innovation,

environmental conservation and social responsibility.

Become one of the best places to work by offering professional development and

growth opportunities to our people, in addition to the best occupational health

and safety conditions.

Promote effective relations within our value chain, driving mutual growth

and market position.

Create shared growth with the communities surrounding our plants by sharing our com-pany’s skills and talent to have a positive

impact on their development.

Guarantee the compliance of all our operations.

Promote transparent relationships that are aligned with the company’s environmental

and social impact.

Create shared value and healthy financial relationships.

Quality, health and safety, environmental management and social responsibility audits by our customers. On-going impro-vements to our Customer Policy. Strategies to improve inventory management and compliance with standards and certifications.

Alignment of Sustainability strategy with business strategy. Appointment of one of the members of the Board

of Directors as Sustainability Director. Creation of a Sustainability Committee.

Bio-Talent: Performance management program that seeks to align individual and corporate goals. Permanent Training Plans. Reward and bonus scheme. Code of Ethics. Occupational Health and Safety Model. Labor Equality and Non-Discrimi-nation Committee and Policy. Participation in organizational

climate rankings.

Compliance with Supplier Policy. Annual Supplier Congress.

Identification of the needs of the communities in which we ope-rate. Annual community development plan, including goals and performance indicators. EnrollaRSE program, focusing on 3 main areas: 1) Environmental Education and Conservation,

2) Community Development, and 3) Education for Development.

Active participation in business chambers and organizations to help promote the creation and consolidation of environmental and sustainable development standards. Government-private

sector partnerships.

Strategic partnerships. Participation in environmental and Corporate Social Responsibility rankings.

Identification of financial requirements and the implementation of financing strategies using tailor-made products that offer the

best possible market conditions.

Customer satisfaction surveys. Audits and visits to our production plants. Ethics Reporting Hotline.

Direct communication with our customers to understand more about their needs

and expectations.

Quarterly and annual meetings of the Board and Shareholders Meeting. Annual Financial Report. Annual Sustainability Report. Executive meetings.

Performance feedback, as well as an Individual Career Plan, through the Bio-Talent program. Committees to handle our employees’ suggestions and concerns, as

well as to implement new projects or programs. Organizational climate surveys. Ethics reporting hotline,

Bio-Magazine, Bio-Infórmate Newsletter, volunteering programs.

Annual Supplier Congress to provide training to all employees from the Procurement department and help improve working relationships with our suppliers. Direct communication with key suppliers to identify areas of opportunity and best practices. Ethics reporting hotline.

Direct dialog with community leaders. Identification of requirements and plans of action for each

community. Monthly activity report. Community surveys.

Direct dialog with the authorities. Working meetings with business groups, chambers and associations.

Annual reports. Relevant seminars and forums.

Direct dialog to learn more about the needs and expectations of civil society organizations.

Digital media, website. Rankings.

On-going communication with Banking Institutions to identify business and financing opportunities.

Satisfaction Survey: Annual. Audits: Annual. Ethics Reporting

Hotline: On-going.

Executive Meetings and Financial Reports: Quarterly and Annual.

Board sessions and Shareholders’ Meeting, Financial Report,

Sustainability Report: Annual.

Bio-TALENT: Twice a year. Committees: Quarterly. Organi-

zational Climate Surveys: Annual. Ethics Reporting Hotline:

On-going. Bio-Magazine: Quar-terly. Bio-Infórmate: Monthly.

Supplier Conference: Annual. Ethics Reporting Hotline:

On-going.

Monthly.

Monthly.

Monthly. Rankings: Annual.

Quarterly and Annual Reports.

[102-12, 103-2, 103-3]

AWARDS AND CERTIFICATIONS

• ISO 9001:2008. Quality and Productivity

Processes.

• ISO 14001:2004. Environmental Performance.

• ISO 22000:2000. Process and Product Safety.

• OHSAS 18001:2007. Occupational Health

and Safety Processes

TOTAL MANAGEMENT SYSTEMCERTIFICATES

ENVIRONMENTAL PAPER COMPANY INDEX

We are one of 35 global paper manufacturing

companies, and the only Mexican company, to

be included in this international index.

WORLD WILDLIFE FUND (WWF)

We were presented with this award for our

100%-recycled product manufacturing process,

our reforestation campaigns and our sustaina-

bility model.

NATIONAL FORESTRY AWARD SEMARNAT & CONAFOR

FSC® 100% RECYCLEDWe are the only Mexican paper company to

hold this certification, which guarantees that the

raw materials used in our paper manufacturing

are 100% recycled.

FOREST STEWARDSHIP COUNCIL®

WATER EFFICIENCY AWARDWe have one of the lowest water footprints in our

paper manufacturing processes.

ENVIRONMENTAL LEADERSHIP AWARDAwarded as a result of our strong commitment

to the environment.

PULP & PAPER INTERNATIONAL AWARDS

We were chosen as a success story given our

sustainable business model.

IPADE BUSINESS SCHOOL

73 IS2018

GHG MEXICO PROGRAMWe voluntarily submitted our Re-port to the GHG Mexico Program

for the fifth consecutive year.

SUPER COMPANIESEXPANSION AND TOP COMPANIES

CLEAN INDUSTRYPROFEPA

FIRST PLACE IN THE RANKING OF ENVIRONMENTALLY

COMMITTED COMPANIES

FORBES

ONE OF THE TOP TWO COMPANIES IN MEXICO IN TERMS OF

ANTI-CORRUPTION PRACTICES

EXPANSIÓN

LEADING COMPANY IN SOCIAL RESPONSIBILITY

EXPANSIÓN

BIO PAPPEL FOUNDATION AS A LEADING BENEFACTOR

FORBES

GREAT PLACE TO WORKGPTW MEXICO

ENVIRONMENTAL EXCELLENCESEMARNAT AND PROFEPA

SOCIALLY RESPONSIBLE COMPANY CEMEFI

LABOR EQUALITY AND NON-DISCRIMINATION

STANDARDNMX-R-025-SCFI-2015

CONCAMIN“ETHICS AND VALUES IN

MEXICAN INDUSTRY” AWARD

CLARES CORPORATE SOCIAL RESPONSIBILITY AWARD

ANAHUAC UNIVERSITY

CLEAN TRANSPORTATIONSEMARNAT

WE SUPPORT THE UNITED NATIONS GLOBAL COMPACT

For Materiality Disclosures Services, GRI Services has reviewed that the GRI Content Index is clear and that the references for 102-40 to 102-49 contents correspond to the right sections of the report. The service was performed on the Spanish version of the report. 75

IS2018

TABLE OF GRI DISCLOSURES[102-55]

GRI 102: GENERAL DISCLOSURES 2016

ORGANIZATIONAL PROFILE

102-1

102-2

102-3

102-4

102-5

102-6

102-7

102-9

102-8

102-10

102-11

102-12

At Bio Pappel, we have no outsourced employees.

Name of Organization

Activities, Brands, Products and Services

Location of Headquarters

Location of Operations

Ownership and Legal Form

Markets Served

Scale of the Organization

Supply Chain

Information on Employees and Other Workers

Significant changes to the Organization and its Supply Chain

Precautionary Principle or Approach

External Initiatives

87

12-13

90

11, 14

87

11-13

47

We have more than 2,800 suppliers in our supply chain.In 2018, the monetary value of the procurement of goods and services from our suppliers reached

MXN $11.07 billion, 64% of which was for the following areas: fiber, cellulose, natural gas, electricity and chemicals.

In 2018, we commenced our supplier certification process, focusing on tax, and we certified 80% of our supplier base, guaranteeing their compliance with the regulations of the tax and employment authorities in Mexico. In 2019, we will certify 100% of our suppliers, and we will begin a Sustainable

Supply project to develop our supplier network in social and environmental areas.

For further information about our Major Customers, please consult page 6 of our 2018 Annual Report: https://www.biopappel.com/en/finance

14-15, 17, 25

11, 14-15, 17, 47

87

27-43

72-73

INDICATOR

BASIC GENERAL DISCLOSURESCONTENT PAGE / DIRECT RESPONSE

GRI 101: DISCLOSURES 2016

GENERAL DISCLOSURES

STRATEGY

ETHICS AND INTEGRITY

GOVERNANCE

STAKEHOLDER ENGAGEMENT

REPORTING PRACTICE

102-14

102-16

102-18

102-40

102-45

102-50

102-41

102-46

102-51

102-42

102-47

102-52

102-43

102-48

102-53

102-44

102-49

102-15

102-17

Statement from Senior Decision-maker

Values, Principles, Standards, and Norms of Behavior

Governance Structure

List of Stakeholder Groups

Entities included in the Consolidated Financial Statements

Reporting Period

Collective Bargaining Agreements

Defining Report Content and Topic Boundaries

Date of Most Recent Report

Identifying and Selecting Stakeholders

List of Material Topics

Reporting Cycle

Approach to Stakeholder Engagement

Restatements of Information

Contact Point for Questions regarding the Report

Key Topics and Concerns Raised

Changes in Reporting

Key Impacts, Risks, and Opportunities

Mechanisms for Advice and Concerns about Ethics

7

7

7, 8-10, 23

21

71

87

87

47

88

87

71

88

87

71

87

90

71

After the review process, a modification was made to the Disclosures reported previously.

24

INDICATOR CONTENT PAGE / DIRECT RESPONSE

For further information, please consult page 7 of our 2018 Annual Report:https://www.biopappel.com/en/finance

102-13 Membership of Associations 70

77 IS2018


MATERIAL ISSUES

ENVIRONMENTAL PROTECTION

GRI 103: MANAGEMENT APPROACH 2016

GRI 301: MATERIALS 2016

GRI 302: ENERGY 2016

103-1

301-1

302-1

302-4

103-2

301-2

301-3

103-3

Explanation of the Material Topic and its Boundary

Materials Used by Weight or Volume

Energy Consumption within the Organization

Reduction of Energy Consumption

The Management Approach and its Components

Recycled Input Materials Used

Reclaimed Products and their Packaging Materials

Evaluation of the Management Approach

88

i. 22,186,261 m3 of water.ii. 1,748,261 tons of secondary fibers and cellulose.

27-43

30

30

35

27-43

The company does not calculate consumption and sale of heating, refrigeration and steam. The methodology used takes into consideration mass-energy factors from the International System of

Units, Internal Control reports.

a. +9.02% increase in unit electricity consumption, reaching 9.68 GJ/t. Reduction in fuel oil consumption of 58% in 2018 compared to the 2014 base year. A 70% reduction in

unit fuel oil consumption, reaching 0.187 GJ/ton.b. Electricity, fuel for fixed sources (Fuel Oil, Natural Gas, Black Liquor), fuels for mobile

sources (Gasoline, Diesel, LP Gas), and thermal and steam energy.c. Base Year 2014 vs. 2018.

d. Electricity (MWh).Factor: *3.6 Gigajoules/MWh

Fuel Oil (Liters)Factor: *41.2474 Gigajoules/l

102-55

102-54

102-56

GRI Content Index

Claims of Reporting in accordance with the GRI Standards

External Assurance

75

87

87, 89

302-5 Reductions in Energy Requirements of Products and Servicea. 14% reduction in main energy requirements for manufacturing, totaling 7.42 Giga-

joules/Ton.b. 2018 vs. 2017.

c. Internal information control reports, patented methodology and standard international conversion factors.


GRI 303: WATER 2016

GRI 304: BIODIVERSITY 2016

GRI 305: EMISSIONS 2016

303-1

303-2

304-1

303-3

304-2

305-1

Water Withdrawal by Source

Water Sources Significantly Affected by Withdrawal of Water

Operational Sites Owned, Leased, Managed in, or adjacent to, Protected Areas and Areas of High Biodiversity Value outside Protected Areas

Water Recycled and Reused

Significant Impacts of Activities, Products, and Services on Biodiversity

Direct (Scope 1) GHG Emissions

39

38

42

37

We reused 67.04% of our water (recycled)Equivalent to 14.8 million m3.

We reused 74.3% of our water (discharge)Equivalent to 16.5 million m3.

b. Water Extracted from Groundwater-Wells= 41%Municipal Potable Water Supply= 28%

Surface Water, Rivers= 27%Industrial Water Treated by Third Parties= 4%

c. Measuring equipment owned by Bio PAPPEL and supervised calibration is carried out by the authorities (Federal, State and Local), as well as by accredited third parties.

No significant direct or indirect negative impact on biodiversity.

a.1,036,711 metric tons of CO2e. Fixed, Mobile, Fugitive and Process sources.b.CO2, CH4, N2O, HFC.

c.The company did not record these measurements.d.Base year 2014. Base year 2005 was recalculated as there was a change in organizational limits, our quantification methodology, and in emission factors. This year represents the largest amount of GHG emissions stemming from the integration and consolidation of the company’s business groups, making it the most comparable year moving forward. Emissions in the base year stood at 1,203,400

tons of CO2e. e.GHG emissions are calculated using the methodology approved by the Ministry of the Environment and Natural Resources (SEMARNAT) via the National Emissions Register (RENE), and emission fac-tors and warming potential are applied in accordance with SEMARNAT and the Ministry of Energy

(SENER).f.Operational Control and shareholdings.

g.AGREEMENT that outlines the technical specifics and formulas for the application of methodologies to calculate greenhouse gas or compound emissions, SEMARNAT 2015. AGREEMENT that establi-shed the greenhouse gases or compounds that are published in the emissions report, in addition to their warming potentials, SEMARNAT 2015. 2018 LIST OF FUELS THAT WILL BE CONSIDERED TO IDENTIFY USERS DEEMED TO BE HIGH-LEVEL CONSUMERS, IN ADDITION TO FACTORS TO DETERMINE THE EQUIVALENCIES IN TERMS OF BARRELS OF OIL EQUIVALENT (published by CO-

NUEE). Emission factor for the National Electrical Grid, 2017 (published by CRE).

No significant impact on water sources stemming from our operations.

Our plants are not located in or adjacent to protected areas or areas of high biodiversity value outside protected areas.

79 IS2018


GRI 306: EFFLUENTS AND WASTE 2016

GRI 306: ENVIRONMENTAL COMPLIANCE 2016



305-6

307-1

305-7

306-1

Emissions of Ozone-Depleting Substances (ODS)

Non-Compliance with Environmental Laws and Regulations

Nitrogen Oxides (NOX), Sulfur Oxides (SOX), and other Significant Air Emissions

Water Discharge by Quality and Destination

37

38

a.The company does not measure persistent organic pollutants, volatile organic com-pounds or hazardous air pollutants.

b.Accurate measurements determined through ISOKINETIC studies, pursuant to NOM085 SEMARNAT.

c.Emissions determined by AP-42 Emission Factors from EPA 1995.

a. To Federal Bodies of Water:14,690,562 m3, approximately 83% of total discharge volume.

Municipal Discharge:417,790 m3, approximately 2.5% of total discharge volume.

Third-Party Treatment:2,254,079 m3, approximately 13% of total discharge volume

b. Compliance with NOM 001 SEMARNAT 1996 and NOM 002 SEMARNAT 1996

The company does not measure the emissions of ozone-depleting substances (ODS).

No violation of environmental laws or standards was identified.

103-1

103-2

103-3




88

48-49

48-49

305-2 Energy indirect (Scope 2) GHG Emissions

a.A2: 553,292 metric tons of CO2e from the procurement of energy services (heat and electricity).b.Unspecified.

c.CO2. d.Base year 2014. This year represents the largest amount of GHG emissions stemming from the integra-tion and consolidation of the company’s business groups, making it the most comparable year moving forward. Emissions in the base year stood at 318,928 tons of CO2e. Base year 2005 was recalculated

as there was a change in the quantification methodology and emission factors.e.NB: Consumption of Purchased Electricity, Heat or Steam Methodology: Electrical Emission Factors published by CONUEE SEMARNAT in 2017, and Electrical and Heat Emission Factors, which have been

calculated internally.f.Operational Control and shareholdings.

g.AGREEMENT that outlines the technical specifics and formulas for the application of methodologies to calculate greenhouse gas or compound emissions, SEMARNAT 2015. Electrical Emission Factors published by CONUEE SEMARNAT in 2017, and Electrical and Heat Emission Factors, which have been

calculated internally.




GRI 413: LOCAL COMMUNITIES 2016

GRI 404: TRAINING AND EDUCATION 2016

PERFORMANCE MANAGEMENT

COMMUNITY ENGAGEMENT

413-2 Operations with Significant Actual and Potential Negative Impacts on Local Communities

11% of total employees received a performance evaluation. Of these, 82% were men and 24% were women. The distribution by employment category of those employees receiving their performance review was: Directors: 2%; Deputy Directors: 2%; Managers: 20%; Deputy Managers: 9%; Supervisors: 55%;

Coordinators: 19%; AAA: 5%.

No operations were identified as having a significant negative impact, real or potential, on local communities.

103-1

103-1

103-2

103-2

103-3

103-3

404-3







Percentage of Employees Receiving Regular Performance and Career Development Reviews

88

49

49

88

57-67

57-67


GOVERNMENT LICENSES AND PERMITS

103-1 Explanation of the Material Topic and its Boundary 88

GRI 404: TRAINING AND EDUCATION 2016

404-1

404-2

Average hours of Training per Year per Employee

Programs for Upgrading Employee Skills and Transition Assistance Programs48-49

Data regarding training hours divided by employment category is not available.

he company has no programs in place for retired or terminated employees.

GRI 203: INDIRECT ECONOMIC IMPACTS 2016

203-1 Infrastructure Investments and Services Supported 57-67Total investment in social projects during 2018 increased to MXN $5,065,000.

81 IS2018




GENERATION OF SYNERGIES BETWEEN BUSINESS GROUPS FOR RESOURCE OPTIMIZATION

INTERNAL COMMUNICATION

103-1

103-1

103-2

103-2

103-3

103-3







88

88

68-69, 72-73

24

68-69, 72-73

24


CULTURAL STANDARDIZATION

103-1

103-2

103-3




88

8-10, 23

8-10, 23

INNOVATION


103-1

103-2

103-3




88

33-34

33-34

103-2

103-3



18, 36, 41, 70, 72-73

18, 36, 41, 70, 72-73

83 IS2018

HUMAN RIGHTS

PRINCIPLES OF GLOBAL COMPACTAREAS PAGE

ENVIRONMENT

LABOR

ANTI-CORRUPTION Businesses should work against corruption in all its forms, including extortion and bribery.

Businesses should support and respect the protection of internationally proclaimed human rights.1

Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

3

Businesses should eliminate all forms of forced and compulsory labor.4

Businesses should support the effective abolition of child labor.5

Businesses should support the elimination of discrimination in respect of employment and occupation.

6

Businesses should support a precautionary approach to environmental challenges.7

Businesses should undertake initiatives to promote greater environmental responsibility.

8

Businesses should encourage the development and diffusion of environmentally friendly technologies.

9

10

Businesses should make sure that they are not complicit in human rights abuses.223-24, 50-51

47

23-25, 50-51

27-43, 58-60

34, 60

19, 23-24

GLOBAL COMPACT

85 IS2018

SUSTAINABLE DEVELOPMENT GOALS

SUSTAINABLE DEVELOPMENT

GOAL


GOAL


GOALDESCRIPTION DESCRIPTION DESCRIPTIONPAGE PAGE PAGE

Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification and halt and reverse land degradation, and halt biodiversity loss.

Take urgent action to combat climate change and its impacts.

27-43, 58-60, 64-65

38-39

30-31, 36-37,

42, 58-60, 64-65

19, 23-24

70, 72-73

Ensure access to affordable, reliable, sustainable and modern energy for all.

33-35 13, 33-34

Reduce inequality within and among countries.

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.

48-49, 60,

62-6533-34

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

Conserve and sustainably use the oceans, seas and marine resources for sustainable development.

Make cities and human settlements inclusive, safe, resilient and sustainable.

Achieve gender equality and empower all women and girls.

50-51, 62 47-49,

61-62

Strengthen the means of implementation and revitalize the global partnership for sustainable development.

Ensure sustainable consumption and production patterns.

Ensure availability and sustainable management of water and sanitation for all.

38-39 61

Ensure healthy lives and promote wellbeing for all at all ages.

Promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all.

53-55

18, 25, 47,

50-51, 53-55,

62Climate Action

Life Below Water

Life on Land

Peace,Justice and Strong Institutions

Partnerships for the Goals

Good Health and Well-Being

Quality Education

Gender Equality

Clean Water and Sanitation

Affordable and Clean Energy

Reduced Inequalities

Decent Work and Economic Growth

Industry, Innovation and Infrastructure

Sustainable Cities and

Communities

Responsible Consumption

and Production

87 IS2018

ABOUT THIS REPORT[102-1, 102-5, 102-10, 102-45, 102-48, 102-50, 102-51, 102-52, 102-54, 102-56]

This report reflects the achievements of Bio Pappel. In our Sustainability Report, which is published on an annual basis, the environ-mental, social and economic results obtained between January 1 and December 31, 2018 are presented through the initiatives and programs implemented by Bio Pappel S.A.B. de C.V. in the United States, Mexico and Colombia.

Following the structure of the report published in July 2018, and with the support of McBride Sustainability, we have divided it into four sections:

This, our ninth Sustainability Report, contains no restated information or significant changes.

Further details about our Corporate Governance have been published in our Annual Financial Report (pages 52 to 62), which can be consulted here:

https://www.biopappel.com/en/finance/financial-fundamentals/reports

“This report has been produced in compliance with GRI Standards: Core Option and has been externally audited by Redes Sociales en Línea Timberland S.A. de C.V.

At Bio Pappel, we are committed to the 10 Principles of the UN Global Compact and the UN Sustainable Development Goals. For further information about Bio Pappel, please visit our website: www.biopappel.com

CORPORATE PROFILEWe provide background information about the

company and its operations.

ENVIRONMENTAL PERFORMANCEWe focus on the evolution of our efforts and results

in the area of environmental conservation.

FINANCIAL PERFORMANCE We provide information about the composition and functions of our corporate governance, anti-corrup-

tion measures and value chain.

SOCIAL PROFILEWe highlight the scope of our impact on our

neighboring communities and the development of our employees.

In accordance with GRI methodology principles, to define the content of this report we took into consideration a previous Materiality study, as part of which a Sustainability Context and Stakeholde Inclusiveness analysis was undertaken to learn more about their expectations and areas of interest.

Based on the definition of the issues to be communicated, we focused on the principle of Completeness ensuring accurate coverage that reflects our performance and impact during the year, in addition to applying the following quality principles:

MATERIALITY [102-46, 102-47, 103-1]

ACCURACY

CLARITY

RELIABILITY

BALANCE

COMPARABILITY

TIMELINESS

PERFORMANCE MANAGEMENT

COMMUNITY ENGAGEMENT


INTERNAL COMMUNICATION

INNOVATION

404-3

203-1, 413-2

404-1, 404-2

103-1, 103-2, 103-3

103-1, 103-2, 103-3

MATERIAL ASPECTS

RELEVANCE FOR THE COMPANY

GRI DISCLOSURESCOVERAGE

INTERNAL EXTERNAL

HIGH

LOW

MEDIUM

ENVIRONMENTAL CONSERVATION

GOVERNMENT LICENSES AND PERMITS

GENERATION OF SYNERGIES BETWEEN BUSINESS GROUPS FOR RESOURCE OPTIMIZATION

CULTURAL STANDARDIZATION

301-1,301-2,301-3,302-1, 302-4, 302-5, 303-1, 303-2, 303-3, 304-1, 304-2, 305-1, 305-2,

305-6, 305-7, 306-1, 307-1

103-1, 103-2, 103-3

103-1, 103-2, 103-3

103-1, 103-2, 103-3

89 IS2018

[102-56]VERIFICATION LETTER

90 IS2018

CONTACT

For more information and/or feedback regarding the content of this report, please contact:

DANIELA RODRÍGUEZ FERNÁNDEZSocial Responsibility and Corporate Communications [email protected]

Torre Bio PappelEjército Nacional 1130Col. Los Morales, PolancoC.P. 11510, Mexico City

Printed on 100% recycled and 100% recyclable paper, using soya and vegetable oil-based inks that are free from heavy metals.

[102-3, 102-53 / CG PRINCIPLE 1]

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