We are convinced that a major change in the current development model is necessary. We believe that the economic crisis may reveal great opportunities related to sustainability, encouraging the creation of a new society committed to the prudent use of natural resources, increased social justice,
and inclusion.

We understand our role in this change: to consistently contribute to the transformation of society toward sustainable development, creating a business model that brings together economic growth and social and environmental progress.

Innovation is one of the main pillars of our operations. Through it, we seek to turn social and environmental challenges into opportunities, such as in the sustainable use of biodiversity, which is the basis of our technological platform.

Our goal is to assure successful, long-term business, with conscientious leaders who are genuinely interested in environmental issues and economic and social development. To achieve this goal, we need strategies, innovative initiatives, and solid processes that allow us to monitor our performance.

In order to create shared value, we understand that we must align our strategies with the vision of our stakeholders. For this reason, the identification of priority sustainability topics is the result of a process of stakeholder engagement that began on a structured basis in Brazil in 2008. This engagement helps us to prepare the materiality matrix that guides the focus of the social and environmental actions of the company. It also makes the sustainability guidelines outlined in Natura’s strategic planning more specific. Additionally, it guides the organization of this report and the definition of targets we commit to in 2009.

The focus of our operations for the coming years will be
as follows:

The Amazon – Although it is not a topic addressed by our stakeholders, Natura sees the Amazon as a key factor in the development of Brazil. Given what the Amazon means for future generations, we want to help create a development model for the region, working with government, communities, NGOs, academia and other players of civil society.

Biodiversity – The extinction of species is a major threat to the web of life on our planet. By sustainably using ingredients from nature and biodiversity and appreciating traditional regional and local cultures, we are contributing to the balanced use of natural resources. We seek to encourage production based on sound agroforestry models, creation of community development funds and fair price value chains, and remuneration for traditional knowledge.

Education – Education is the main transforming element of society. We seek to use our communication channels to convey our values and share them with our stakeholders. With this in mind, we began to disclose environmental information on the packaging of our products and assumed the commitment to contribute to the improvement of the quality of education in Brazilian public schools.

Greenhouse Gas (GHG) Emissions – The climate crisis is a global challenge as important as the recent economic crisis, and all organizations should help combat the greenhouse effect. In 2007, we launched the Carbon Neutral Project, which coordinates our previously isolated actions to reduce carbon emissions. We also set the ambitious target of reducing by 33% our GHG emissions in all of our chain by 2011. This program also includes carbon offseting.

Impact of products – We are a retailing company selling by direct sales; so the impacts of our operations can be clearly defined: from the environmental standpoint, our most relevant negative effects are in production chain and in the final disposal of our products and packaging. Our social effects are more far-reaching due to the 850,000 consultants who sell our products. Throughout this chain, we seek to create ever more shared economic value.

The quality and safety of our products is a commitment of those whose reason for being is Well-being Well. Before they get to our nearly 42 million consumers, all new ingredients and formulas are analyzed by health and safety specialists and subject to tests monitored by dermatologists or, in some cases, by multidisciplinary teams. This is a basic condition for
our operations in the cosmetics, fragrances, and personal
hygiene markets.

Quality of relationships – Sustainable results are achieved by means of quality relationships and, for this reason, we seek to maintain open communication channels with all our stakeholders in an ongoing exercise in transparency. We foster ethical and honest relationships with our consumers, employees, consultants, suppliers and many others who help us build our brand. In 2008, we included relationship quality management in our strategic planning and developed structured education processes for the relationship with and engagement of stakeholders.