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TABLE OF CONTENTS

MESSAGE FROM THE CEO

CORPORATE PROFILE08 Identity, Vision, Mission Statement and Integrity 09 Sustainability Model10 Operational Structure11 Our Corporate Philosophy in 15 Steps14 Competitive Integration16 Market Leadership18 Our Products23 Organizational Structure23 Bio-PAPPEL in numbers 2014

ECONOMIC PERFORMANCE26 Key Figures27 Ethics and Corporate Governance31 Value Chain

ENVIRONMENTAL PERFORMANCE36 Environmental Management38 Paper and Cardboard Recycling39 Solid Waste Management40 Energy42 Emissions44 Water46 Transportation47 Biodiversity Other Partnerships

06

08

24

34

ACKNOWLEDGMENTS AND CERTIFICATIONS

GLOBAL COMPACT

CONTACT US

TABLE OF CONTENTSG4

ABOUT THISREPORT

SOCIAL PERFORMANCE50 Our People58 Quality of Life at Work61 Occupational Health and Safety 68 Community Involvement76 Bio-PAPPEL Foundation78 Citizenship and Industry Involvement79 Our Stakeholders

ASSURANCELETTER

8090

94

82

92

48

91

06

COMMITMENTOur commitment to sustainability and the creation of shared value were once more the axes of our performance in 2014.

EVOLUTIONIn addition to our organic sustainable growth program, this year Bio-PAPPEL complete the acquisition of the SCRIBE Corporation, which will increase the size of our operations by 50% and will substantially strengthen our integration and competitive advantages.

URBAN FORESTOur Corporate Program Bosque Urbano® (Urban Forest) continues to produce a positive impact on the solid waste management in Mexico in order to promote a culture of increased awareness of the importance of paper recycling across the country. This has allowed us to contribute to a 2.8% nationwide growth in the collection of paper in 2014, while our Company captured 5.3 million tonnes of CO2 equivalent by saving trees from logging and preventing the used paper from being disposed in landfill sites.

ORGANIC GROWTHThis year, to strengthen our commitment to sustainability, we opened two new high-tech mega industrial plants in Silao, Guanajuato, and Mexicali, Baja California, which allow us to manufacture lighter paper products with lower levels of raw materials, energy and water, and to reduce end-consumer transportation distances.

We also completed an important project for the supply of gas to one of our industrial operations in southeastern Mexico, involving an energy link-up to build a gas pipeline over 70 km long between the states of Veracruz and Oaxaca. The above actions will help us to increase our CO2 equivalent savings.

SOCIAL RESPONSIBILITYWe are very proud of having continued to exceed our Social Responsibility targets vis-a-vis our various stakeholder groups inside and outside of the Company throughout 2014. Furthermore, we again obtained the following recognitions and certifications: Great Place to Work, Social Corporate Responsibility, Clean Industry, Sustainable Company Seal from the Mexican Stock Exchange, FSC® 100% Recycled, WWF Environmental Paper Company Index, Integrated Management System, Highly Protected Risk System from FM Global, the GEI Mexico Program (Greenhouse Gases program), Clean Transportation, Inclusive Company Recognition, Gender Equity Model Certification, and many more.

MESSAgE FrOM ThE CEO

[G4- 1, G4- 6, G4- 8, G4- 9, G4- 13, G4- 15]

Miguel RincónChairman of the Board of Directors

and Chief Executive Officer

07

BIO-PAPPEL FOUNDATIONThrough the Bio-PAPPEL Foundation, we donate to the Papalote Children’s Museum, the Mexican Red Cross, Best Buddies Mexico, Reino Animal and Refugio Salvaje, Worldfund and the National Solid Waste Recycling Contest.

FORBESIn 2014, we were named by Forbes Mexico magazine as Mexico’s Number One Company in sustainability practices from a short list that also featured companies such as Grupo Bimbo, Nestlé, Continental Automotive, Ternium Mexico, CEMEX, Kellogg’s and General Motors.

SUSTAINABILITY PARTNERSIn 2014 we had the honor to lead the efforts made by large-scale companies committed to the very purposes that drive our own actions, as we chaired the National Chamber of the Paper Industry with the participation of paper companies across Mexico, as well as the GEMI Initiative with companies that play a leading role in sustainability such as: Kellogg’s, Nestlé, Grupo Bimbo, Grupo Herdez, Grupo Jumex, Tetra Pak, Coca Cola Femsa, Grupo Modelo, Dow, Henkel, Janssen, Colgate-Palmolive, P&G and Bio-PAPPEL.

We are also active members of SUSTENTA, an association that revolves around the 3 Rs (Reduce, Reuse and Recycle) Program, which includes companies the size of Coca Cola Mexico, Unilever, Danone, P&G, Grupo Bimbo, Tetra Pak and Bio-PAPPEL.

UNITED NATIONS GLOBAL COMPACTThe above actions were clearly channeled towards meeting our commitment to the UN’s 10 principles in human rights, labor rights, environment and zero tolerance for corruption.

COMMUNICATION ON PROGRESS (CoP) REPORTWe invite you to read this document and discover the spirit and substance of a Company and its people committed to sustainability and reporting the progress made in 2014, while taking our stakeholder groups into account and the future of current and future generations.

Thank you,

Miguel Rincón ArredondoChairman of the Board of Directors and Chief Executive

Officer of Bio-PAPPEL

We have not inherited the earth from ourancestors, we have borrowed it from our

children and grandchildren...

... With that in mind, we produce our paperwithout cutting down trees.

“

”Martín Rincón

Director of Sustainability and Development

08

COrpOratEPrOFiLE

IntegrItyWe subscribe to international business best practices in our daily operations, guided by a set of strong Values and a strict Code of Ethics. We honor our commitments, respect personal dignity and refuse to tolerate the inefficient or improper use of the Company’s resources. We also adopt a “zero tolerance” approach to all forms of corruption.

IdentItyBesides being a “green” Company, we strive to be a BLUE ENTERPRISE because we not only recycle paper and plant trees, but also aim to maximize the use of technology to co-generate clean energy, recycle and reuse water, employ sustainable industrial processes and monitor the impact of our operations on rivers, lakes, oceans and the atmosphere.

VIsIonOur corporate VISION is to CREATE SHARED VALUE based on our four pillars of Innovation, Competitiveness, Environmental Protection and Social Responsibility in everything we do.

MIssIon stateMentOur corporate MISSION is to ensure the competitive production of sustainable paper and paper products that effectively contribute to the success of our clients and their customers.

[G4- 56]

092014 Sustainability Report › Corporate Profile

SuSTAINAbILITy MOdEL

Through our sustainability model, we aim to be a leading creator of shared value

based on our Four Pillars - Competitiveness, Innovation, Environmental Protection

and Social Responsibility - with an organizational culture that sets us apart as an

ethical and principled Company.

... We don’t CUt doWn tReeS

10

STRENGTHS• The sector leader in vertical integration.

• The paper industry leader in

cutting-edge technology.

• The sector leader in scale economies.

• The leader in national production and distribution

networks.

• The leader in sustainable, low-carbon products.

• The market leader in its core product lines.

• The sector leader in carbon and water footprints

in Mexico.

Kraft Paper Mill

Bond Paper and Newspaper Mill

Packaging Mega Plant

Paper Sack Mill

Notebooks Mill

Cut Bond Paper Mill

Paper Collection Depot

Headquarters

Our extensive nationwide production and distribution network based on our Company's sustainable business model allows us to work more closely with our clients, to cover shorter distances, to cut down on transportation, to use less fuel and fewer tires... and to reduce our

Carbon Footprint.

BuIldIng an InternatIonal CoMpany

OPERATIONAL STruCTurE[G4- 5, G4- 6, G4- 8, G4- 9]

Kraft Paper Mill

Bond Paper and Newspaper Mill

Packaging Mega Plant

Paper Sack Mill

Notebooks Mill

Cut Bond Paper Mill

Paper Collection Depot

Headquarters


01 START with the client and work backwards.

02 MAKE all business decisions based on competitiveness.

03 HAVE production costs that are among the lowest in the world.

04 COMPARE our performance with the best in the world.

05 DIFFERENTIATE our Company and its products.

06 INNOVATE constantly in what we do.

07 MEASURE everything we do to enable us to improve.

08 DO more with less, more quickly and at a lower cost.

09 BUILD lasting partnerships with clients and suppliers.

10 BASE decisions on verifiable information with a flexible and pragmatic approach.

11 BE a great place to work.

12 TREAT all staff members as partnerws.

13 REWARD outstanding performance and major achievements.

14 BE a leader in sustainability and caring for the earth.

15 BE a leader in creating shared value.

OuR CORPORATE PhiLOSOPhY iN 15 STEPS

SUSTAINABILITy PyRAMID

bLuE 1,000 pts.

GREEN 700 pts.

yELLOW 300 pts.

ORANGE 0 pts.

RED -500 pts.to -1,000 pts.

[G4- 56]

... We ReCyCle


Bio-PAPPEL knows that companies today play a key role in finding environmentally-friendly solutions, and our sustainable business model departs from conventional paper industry models that are based on the intensive use of trees and forests to propose the implementation of innovative sustainable techniques.

Under our sustainable business model, our paper and paper products are produced without cutting down trees, since we recycle used paper and turn it into new high-quality paper, while also helping to preserve our planet.

[G4- 14]

85.3% of our total investment in 2014 was focused on enhancing and implementing environmental projects that will produce a positive impact on our operations.

We don’t cut down trees, we plant them...


14

COMPETITIVE iNTEgrATiON


In August 2014, we announced the signing of a contract to acquire 100% of the share of the Scribe Corporation and its subsidiaries. SCRIBE is the largest company in Mexico that manufactures bond paper in large rolls, cut bond paper for printing, copying, photocopying and exercise books. The company has operations in Mexico, Central and South America. SCRIBE has important industrial operations in the states of Mexico, Querétaro, Michoacán and Veracruz, as well as the largest domestic distribution network.

As a result of this acquisition, Bio-PAPPEL became the largest integrated manufacturer of brown paper, newsprint paper, corrugated cardboard packaging, bond paper for copying and printing, as well as exercise books in Mexico and Latin America. The Company also produces paper sacks for the cement industry and other specialties. The Company will operate 34 industrial plants in Mexico, the southern United States and Colombia. SCRIBE will maintain its corporate identity and commercial brand. This acquisition is part of Bio-PAPPEL’a integration, growth and development strategy.

Some relevant information about the transaction:

Strategic acquisition

Attractive appraisal Proforma increase in sales of 50%

Proforma increase in EBITDA of 40%

Increase in sales portfolios

Greater geographical presence

Increase in market leadership

Potential synergies

Increase in vertical integration

... We ReCyCle

16

MArkET LEADERShIP

POSITION The largest PAPER MANUFACTURER in Mexico. The largest PAPER PRODUCTS MANUFACTURER in Mexico.

CATEGORIES• #1 in Bond Paper for Writing and Printing.• #1 in Notebooks.• #1 in Kraft Paper for Sustainable Packages.• #1 in Newsprint.• #1 in Corrugated Packages.• #2 in Paper Sacks.

[G4- 13, G4- 15]


THE MExICAN PAPER INDUSTRyWE ARE THE SECTOR’S MOST SUSTAINABLE PRODUCER

2014 INSTALLED CAPACITy (THOUSANDS OF TONNES)

MAjOR PRODUCERS

Rather than being the BIGGeSt, it is more important for us to be the most sustainable

in our industry.“

”


Our PRODuCTS[G4- 4, G4- 14]

18

bIO-RECyCLED,bIO-RECyCLAbLE ANDbIO-DEGRADAbLE

kRAFT PAPER

100%

bOND PAPER

NEWSPRINT

192014 Sustainability Report › Corporate Profile ... We ReCyCle

CARDbOARD bOXES

NOTEbOOkS

20

paCkagIng paperWe are the largest producer of paper 100% recycled, used to make cardboard boxes and paper sacks in Mexico and Latin America.

By using sustainable raw materials, processes and technologies, we help make packaging lighter and more resistant through by using our paper for manufacturing, which in turn reduces the Carbon Footprint and offers our clients high-performance products with FSC® 100% certification.

• paper liner for packaging• Medium paper for packaging• White top liner for packaging• paper for sacks• paper for bags and wrapping


WrItIng and prIntIng paper

We are the leaders in Mexico for the manufacturing of writing and printing paper, including bond paper rolls, cut paper and newsprint.

We are the only FSC® (Forest Stewardship Council) certified manufacturer of 100% Recycled bond paper in Mexico. Our products are subject to a chlorine-free bleaching process with a low carbon footprint in the manufacturing processes.

We produce the equivalent of 83% of newsprint used for daily newspapers published in Mexico,and we are the most reliable and competitive vendor in the publishing industry.

• Notebooks• Bond Paper for copies• Bond Paper for writing• Bond Paper for notebooks• Bond Paper for books• Bond Paper for forms• Bond Paper for commercial printing

• Extended paper• Standard Newsprint• Premium Newsprint• Newsprint Plus• Magazine, brochure and insert paper• Newsprint Extra and Mex-Brite


22

Corrugated paCkagIngWe are the number one manufacturer of sustainable corrugated cardboard in Mexico and Latin America, and a major national producer of paper sacks.

A combination of our efficient vertical integration, scale economies, cutting edge technology, presence nationwide, proximity to clients and the unrivaled experience of our people have made Bio-Pappel the most reliable supplier in the market.

Our packaging solutions are designed to protect, store and distribute consumer products, while projecting an optimal graphic image for the sale of the articles they contain.

• Corrugated paper packaging• Micro-corrugated packaging• Cardboard packaging with high-quality graphics• Collapsible packaging• pre-printed packaging

• special packaging• sacks for Cement• sacks for lime and plaster• Food sacks• sacks for chemical products• sacks for specialities products


ORGANIzATIONAL STruCTurE

bIO-PAPPEL iN NuMBErS 2014

1,814 volunteers 16,500 trees planted through our Reforestation program

8,661 Employees

33 years’ experience as the largest producer of paper and paper products in Mexico and Latin America

Presence in 16 states of Mexico, 4 states in the US and 1 state of Colombia

Shipments of 1,349.3 millions of short tons

36 industrial plants and 15 collection depots

MXN 12,298.9 million in annual sales

6.9 million tonnes of paper and cardboard recycled between 2010 and 2014

27.6 million tonnes of CO2 equivalent captured between 2010 and 2014

0 trees felled in the manufacture of our products

Annual water savings of 17.9 million m3 and energy

savings of 3,933 million KwH

More than 240,000 training hours

5,714 goals alignedto the Bio-Talent program

MXN 987.3 million invested during 2014 in technologies to improve paper and water recycling processes, and the energy leverage of our plants

[G4- 6, G4- 9]

... We ReCyCle

24

ECONOMIC PErFOrMANCE

DIRECT ECONOMIC VALUE GENERATED

DIRECT ECONOMIC VALUE DISTRIBUTED

PROjECT INVESTMENT

11,991.8

10,913.9

724.4

11,717.4

10,266.7

893.2

12,298.9

10,783.6

987.3

2013 20142012

Figures in millions of Mexican pesos. The information hereby presented complies with International Financial Reporting Standards (IFRS). Hence, the information presented in the 2012 Annual Report under Mexican Standards, is replaced with new data for both fiscal years under IFRS.

25

NET SALES

COST OF SALES

OPERATING PROFITS

11,991.8

9,975.9

1,096.5

11,717.4

9,358.9

1,407.7

12,298.9

9,940.3

1,633.6

2013 20142012

Figures in millions of Mexican pesos. The information hereby presented complies with International Financial Reporting Standards (IFRS). Hence, the information presented in the 2012 Annual Report under Mexican Standards, is replaced with new data for both fiscal years under IFRS.

26

This section provides an overview of the most relevant aspects of our financial performance. Our economic results for the 2014 fiscal year are summarized in the Financial Report available at http://www.biopappel.com/en/investor-relations/financial-reports

kEy FIGuRES[G4- EC1]

[G4- 17]

In 2014 we invested more than one billion Mexican pesos in projects that enable us to get the most

advanced technology for paper and water recycling and energy leverage.

272014 Sustainability Report › economic Performance › Ethics and Corporate Governance

ETHICS AND CORPORATE GOVERNANCE

Our Board of Directors heads the Bio-PAPPEL corporate governance system based on what it considers to be in the best long-term interests of both our shareholders and stakeholders. Our Board of Directors is responsible for approving our corporate strategy, and defining and monitoring the implementation of our core values and vision. It is also responsible for reviewing and approving all related party transactions and operations aside from the ordinary course of business.

The board is composed of a minimum of seven (7) and a maximum of twenty-one (21) directors appointed by the Ordinary Shareholders’ General Meeting, of which 25% must be independent in accordance with the definition of “independent director” in the Securities Market Law.

The Regular Shareholders’ General Meeting and the Board of Directors shall have the right to appoint a director to act as Chairman of the Board, and the directors to stand in for the Chairman in the event of a temporary or permanent absence, from among their members. Directors do not receive retribution for their participation on the Board. Our Board of Directors, ratified at the Shareholders’ Meeting of April 24 2014, and the procedures to determine the conditions of transactions involving related parties, can be viewed in our Annual Report to Shareholders, available at http://www.biopappel.com/en/investor-relations/financial-reports

bOARD OF DIRECTORS[G4- 34, G4- 38, G4- 39, G4- 40, G4- 41, G4- 44, G4- 49, G4- 51, G4- LA12]


28

The Board of Directors has an Audit and Corporate Practices Committee responsible for tasks including the following: • Evaluating the performance of internal and external auditors.• Evaluating the scope and outcomes of all kinds of accounting, tax and financial audits conducted on the Company’s operations.• Overseeing the administrative, accounting and internal control policies, verifying their consistent application and that the financial information generated fairly reflects our financial position and operating results.

General Management operates the Company’s internal control system through operational and financial directives that fall within its powers, with the support of the Corporate Finance and Administration Division (comptrollership, internal auditing and IT systems), and internal comptrollers responsible for conducting internal audits of business units.

The internal control system is defined based on policies, procedures and an organizational structure segregating duties and roles to enable risk prevention, the implementation of self-monitoring, and the appropriate use of technology.

Furthermore, the processes with which the supreme body of governance prevents and resolves potential conflicts of interest are set in the Annual Financial Report, which mentions that any shareholder voting in a business transaction involving any conflict of interest shall be liable for any losses or damages if the transactions would not have been approved without the vote of that shareholder. Moreover, a member of the Board of Directors or any committee whose interests may be in conflict with those of the Company must disclose that conflict to all other Board Members or the respective committee, and must refrain from discussing or voting on any matters related to the conflict of interest. Any failure by a director or committee member to comply with these obligations may cause the director or member to be deemed liable for any losses and damages.

Our Bio-Talent program for performance management evaluates the Board members responsible for environmental, social and economic aspects in compliance with the

objectives set for the period.

Since 2011, the Board of Directors has appointed one of its members to the position

of Director of Sustainability to plan and implement environmental and social actions, reporting to the supreme body of governance.

Furthermore, the CFO is responsible for economic matters involving the Company, and

also reports regularly to the Board of Directors.[G4- 36]

29

CODE OF EThICS

Our Code of Ethics contains guidelines on carrying out our operations with integrity and high ethical standards in terms of the personal conduct of all Company employees, including those in the supreme body of governance.

Every year, the Code is reviewed by the Board of Directors to ensure that the document is up-to-date and meets the needs and expectations of existing laws and regulations. Bio-PAPPEL gives all related parties complete freedom to report any concerns they may have in relation to violations of the Code of Ethics, with the guarantee that experts in law, finance and human resources will follow up these concerns and resolve them from an objective point of view.

Our ethics reporting hotline is open to receive complaints on how the Code of Ethics is applied to employees and stakeholders. Anomalies can be reported anonymously, assuring always the confidentiality of the person reporting the anomaly. It also provides a mechanism to implement penalties against violations that call for punishment, and a reward system for complaints that lead to asset recoveries or the restitution of damages to the Company.

We have set up a Corporate Ethics Committee and an Ethics Committee for each business unit. These committees are convened at least once every year, and they report every quarter to the Audit and Corporate Practices Committee (CAPS).

It is important to Bio-PAPPEL that stakeholders know how to voice their concerns over improper conduct, and that they trust the system. Furthermore, through our Suppliers Policy we reject forced labor, child labor and corruption in our supply chain. Our vendors receive a copy of our Code of Ethics and have access to our reporting hotline where they can report any anomalies.

During 2014, we organized 12,050 hours of training and refresing courses for Bio-PAPPEL staff in these areas, representing a 10% increase on the number of training hours during 2013.

In 2014, a hard copy of the updated Code of

Ethics was distributed to all our staff. All new hires are given a course on the Code of Ethics as part of their induction process, and employees

sign a statement acknowledging that they have read and understood the Code, which they agree to abide by. The Code was also

sent to clients and vendors.

[G4- 25, G4- 56, G4- HR10, G4- HR11, G4- SO3, G4- SO9, G4- SO10]

... We ReCyCle2014 Sustainability Report › economic Performance › Ethics and Corporate Governance

30

The application of corrective measures, and disciplinary actions where appropriate, are evidence of the Company’s intention to generate a strong culture of ethics and integrity. In 2014, a total of 179 complaints, mostly anonymous, were filed concerning a variety of issues.

Of these complaints and reports filed, 75 made suggestions on how to improve administrative or operational processes, working conditions and facilities; 26 led to the termination of contract of 32 employees, including four managers, four transportation service providers and two providers of other services, while the remaining 78 cases resulted in changes being made to employment, training, the strengthening of control measures and simplification or updating of processes.

During 2014, weformally delivered our Code of Ethics to 3,525 suppliers, 1,397 clients and 320 carriers. This included the delivery of a printed copy of the Code and a copy of the main ethical guidelines

for clients and suppliers.

ITEM CASES IN 2012 CASES IN 2013 CASES IN 2014

TOTAL 190 161 179

Theft of Property 13 8 7Conflicts of Interest 11 3 2Supplier Relations 18 22 25Labor Conditions 81 59 41Safety and Hygiene 11 5 9Employee Relations 15 32 49Client Relations 2 1 2Policy Compliance 9 9 12Discrimination 4 2 2Suggestions for Improvement 21 7 7Others 5 13 23

31

CLIENTS

ValuEChAIN

OUR QUALITy CREED

At Bio-PAPPEL, we reaffirm our commitment to our supply chain by establishing continuous dialogue that allows us to follow up on meeting expectations on time.

By quality, we mean:

[G4- 12, G4- 56]

[G4- PR1, G4- PR3]

... We don’t CUt doWn tReeS2014 Sustainability Report › economic Performance › Value Chain

32

It is not as merely suppliers that we are proud to contribute to the success of our clients and their customers, but as partners working together to maximize their productivity, raise standards of sustainability and reduce the value chain carbon footprint.

Our products fully comply with the Mexican NMX-144 standard concerning the high content of recycled material in our products sold to government, and NMX-NN-107 (otherwise know as the Monarch Butterfly standard) concerning the requirement for recycled fiber in the manufacture of our paper. We also abide by the parameters set by the United States FDA (Food and drug Administration)

for products that are in contact with foodstuffs, as well as Chain of Custody certification that assures clients the use of sustainable raw materials.

The FSC® (Forest Stewardship Council) certification is one of the most valued in the international paper industry, as it guarantees that products meet the parameters of sustainability and social commitment that this institution requires. Bio-PAPPEL is the only paper manufacturing company in Mexico to obtain FSC® 100% Recycled certification in its plants located in Veracruz, Oaxaca, Tizayuca, State of Mexico, Durango, Monterrey and Prewitt, New Mexico.

In 2014, 37 audits were conducted by our major clients. Overall, the major aspects evaluated were as follows:

1. Compliance of quality standards (ISO 9001:2008).2. We have also set our parameters in accordance with the requirements set by the U.S. Food and Drug Administration (FDA) for the products that are in contact with food products.3. Ethics and Social Responsibility (SEDEX SMETA Code).

Satisfactory results were achieved in these audits, with compliance above 90%. The areas of opportunity detected are addressed by each responsible area as part of our “Preventive and Corrective Actions” procedure.

As we do every year, we conducted Customer Service Survey with at least 80% of the client base of Bio-PAPPEL. Satisfactory results were achieved, with the following areas rated as “Good (8)” and “Very Good (9)”: commercial area service, technical service, administrative service, product quality, delivery on agreed dates and transportation.

Our clients’ privacy is of vital importance to us. We establish rigorous confidentiality agreements to guarantee that their information is comprehensively protected. In relation to our Urban Forest program for the collection of paper and cardboard from companies, universities and public offices, we guarantee the destruction of all documents classified as confidential in the presence of a public notary, if so requested by the paper supplier.

By engaging each of our clients in a direct dialogue,

we have been able to achieve high quality standards in all of our products, with zero incidents relating to violations of any legal, information or labeling

regulations concerning our products during 2014.

33

SuPPLIERS

To ensure that our products meet the highest established quality standards, it is also important that our suppliers take into consideration our joint responsibility in production processes. For this purpose, we carry out ongoing actions that allow us to have a trust-based work system in place to ensure our clients are fully satisfied.

The first link with our suppliers is established through the acceptance of our Suppliers Work Policy and compliance with our Code of Ethics, for which we make our Ethics Reporting Hotline available.

Through our Suppliers Work Policy, we reject all forced labor, child

labor, discrimination and corruption at any stage of

our supply chain.

96% of our current providers are

based in Mexico.

In 2014, we held our Second Supply Congress, chiefly focused on the training and designing of career plans for staff in the various Purchasing areas of business units to ensure that our supply chain has the best practices and applicable methodological tools. The aim of this initiative was to generate shared value by opening effective channels of communication with our suppliers and continuously working together on projects, which will allow us to guarantee long-term relationships with our vendor base, in addition to reducing costs and improving the quality of the products and services we consume at Bio-PAPPEL.

OUR COMMITMENT IN 2015

LICENSES AND PERMITSFROM AUTHORITIES

Update and renew all licenses and permits necessary for compliance purposes to operate in accordance with the law.

MATERIAL ASPECTS

[G4- SO10, G4- EC9]

... We ReCyCle2014 Sustainability Report › economic Performance › Value Chain

34

85.3% of our total investment in 2014 was focused on enhancing and implementing environmental projects that will produce a positive impact on our operations.

Thanks to our Urban Forest program, we were able to recover and reuse more than 6.9 million tonnes of paper and cardboard between 2010 and 2014, representing the capture of 27.6 million tonnes of CO2 equivalent.

ENVirONMENTALPERFORMANCE[G4- EN27, G4- EN31]

35

Our “High Efficiency in Transportation” program served to implement our Backhaul Logistics Model, through which we reduced the use of diesel fuel in our transportation vehicles by more than 18%.

In 2014, we carried out 16 reforestation campaigns, planting more than 16,500 trees in regions where Bio-PAPPEL operates, thereby conserving the habitat of different species.

36

In 2014, we continued our commitment to reduce our environmental footprint through actions based on obtaining raw materials (used paper and cardboard) to be transformed and manufactured into new paper and other paper products, to their final disposal as waste material to make it reusable as raw materials, closing their life cycle in 360º.

Our environmental priorities focus on the following areas:

• Efficientwastemanagementandrecycling.• Betteruseofenergy.• Minimizationofemissions.• Efficientuseoftransportation.• Optimizationofwateruse,andreductionofthepollutantloadofdischarges, making them “zero effluent”.• Preservationofbiodiversity.

ENvIRONMENtAl ManagEMEnt

our operating philosophy demonstrates our commitment to continuous improvement and technological innovation together with an advanced environmental management model, which is key to responding to the environmental challenges that concern us all.

[G4- 14, G4- EN27]

37

As a result of this great effort and our operating results, we obtained the high-sustainability certificates including ISO 9001, ISO 14000 and OHSAS 18000. Over the past three years, we have also held the Clean Industry Certification issued by the Mexican Federal Attorney General for Environmental Protection (PROFEPA) for meeting all environmental requirements established by law.

As for our products, we also hold Forest Stewardship Council FSC® 100% Recycled certificates at our plants in Durango, Tizayuca, Monterrey, Veracruz, Oaxaca, State of Mexico and Prewitt, New Mexico in the United States.

In 2014, we were not subject to any fines, non-financial penalties or complaints for non-compliance of environmental legislation and regulations.

2014 Sustainability Report › environmental Performance › Environmental Management

ENvIRONMENtAl ManagEMEnt

ISO 14000

ISO 18000

[G4- 14, G4- EN27]


38

We surpassed our 2014 target for paper andcardboard recycling by 32,768 tonnes.

In addition to these efforts, Bio-PAPPEL has led the nationwide promotion and implementation of campaigns urging state and city governments to employ efficient urban solid waste management programs. The primary goal of these efforts is to boost the domestic waste collection index, which in the past five years has risen from 49.2% in 2010 to 52.4% in 2014, according to figures from the Mexican Paper Chamber.

Through this campaign, we promote the proper separation and collection of urban solid waste to create a society that is environmentally aware, while also gaining access to raw materials that can be effectively recycled time and again to generate a positive impact on the community and the environment.

PAPEr ANd CARDbOARD RECyCLING

2015 GOAL20142014 GOAL201320122011

1,510,000 1,535,000 1,247,269 1,300,000 1,332,768 1,379,415PAPER AND CARDBOARD RECyCLING

(TONNES/yEAR)

thanks to our extensive network of collection depots

and agreements done with clients, government bodies and

educational institutions, we successfully recovered:

84% of the packaging paper produced, and

89% of the writing and printing paper manufactured.


Bio-PAPPEL is consistent with the values we promote. Therefore, we have implemented special waste management measures in all operating centers to identify the waste materials that could extend their useful life and those that require special disposal.

SOLID WASTE MANAgEMENT

2015 GOAL20142014 GOAL201320122011

174 175 166 169 173 179SPECIAL SOLIDS

WASTE MANAGEMENT (THOUSANDS OF TONNES)

INDICATOR

... We ReCyCle

40

We exceeded our 2014 target to reduce electricity and fuel oil consumption by 1.1% and 23.4%

respectively.

ENERGy

In order to ensure better use of electricity, for the past three years our Bio-ENERGY co-generation system has provided our production processes with efficient, sustainable energy.

Bio-ENERGY seeks to leverage the use of electricity more effectively by using natural gas as a primary energy source, from which steam can be obtained from the combustion of this gas as a subproduct. This steam is then used in the paper manufacturing process, thus increasing the leverage of conventional energy.

[G4- EN6]


Our Bio-ENERGY co-generation system is installed at the following paper plants: Durango, Tizayuca, Veracruz, Monterrey, Oaxaca and Prewitt, New Mexico.The work carried out at these plants is essential to reducing our Carbon Footprint, and has helped reduce

consumption of electricity from the national grid by 100% at these facilities, which has enabled us to stop consuming energy from an inefficient thermal system with high CO2 equivalent emissions.

The use of Natural Gas keeps us from generating indirect GHG emissions.

2015 GOAL20142014 GOAL201320122011

929,681 958,770 901,174 920,000 909,711 920,000ELECTRICITy(MWh)

115,404 61,036 44,880 35,176 26,930 12,000FUEL OIL(M3)

ENERGy TyPE

964,066 1,911,372 2,080,909 2,573,691 2,261,165 2,500,000NATURAL GAS(GIGACALORIES)

ENERGy CONSUMPTION*

ENERGy CONSUMPTION AND GENERATION

* Energy consumption across all facilities in Mexico and the United States.


In 2014, we implemented a program running in parallel with the combined co-generation cycle, to be carried out during 2015.NATURAL

GAS

CO-GENERATION PROCESS DIAGRAM

START OF PROCESS

RECOVERyBOILER

WATER

AIRINFLOW

GASTURBINE

COMPRESSOR

GENERATOR

HOT GAS OUTPUT (BOILER)

HOT GAS OUTPUT (BOILER)

THERMAL ENERGy

ELECTRICITy GENERATED

STEAM TO PROCESS

42

EMISSIONS

Bio-PAPPEL has joined the enormous global efforts to mitigate the impact produced by Greenhouse Gas Emissions (GHG) by enforcing a tight strategic plan to use urban solid waste (recycling fiber) instead of trees to make top-quality paper and other paper products.

Thanks to our recycling processes, we capture more CO2 equivalent than we emit by keeping unused paper and cardboard out of landfills, where it would otherwise degrade and produce Greenhouse Gas (GHG) emissions.

We surpassed our 2014 target for Greenhouse Gas Emissions reduction by 4.2%.

[G4- EN19]


0.801.91 1.27 1.06 0.82NOX

0.502.19 1.16 0.86 0.52SOX (SO2)

0.150.56 0.29 0.22 0.13PARTICLES

0.0150.0081 0.0097 0.014 0.012METHANE

2015 GOAL2014201320122011INDICATOR

*Emissions determined with the EPA AP-42 Emission Factors, published in 1995.

GAS EMISSIONS(Thousands of Tonnes)

*VERIFIED emissions calculated based on Emission Factor contained in the GEI Mexico Program methodology, and by the Intergovernmental Panel on Climate Change (IPCC).** A study carried out by the Inter-American Development Bank and the Mario Molina Center for the paper industry in Mexico estimates that between three and five tonnes of CO2e are captured from every tonne of paper recycled and reused.

565

5,518

2015 GOAL

4,953

555 579 633 600

5,003 5,452 4,989 5,071

2014 GOAL

2014201320122011

4,448 4,873 4,4714,356

GREENHOUSE GAS EMISSIONS AND CO2e CAPTURE(Thousands of Tonnes)

575

5,331

4,756

*GHG EMISSIONSCO2e

**CARBONCAPTURE

INDICATOR

**NET CARBONCAPTURE

[G4- EN21]

... We ReCyCle

44

WATER

The paper production process is unquestionably water-intensive. However, at Bio-PAPPEL we use the most advanced water treatment technology and zero-effluent processes to maximize our use and reuse of water time and again in our manufacturing processes.

We also align the entirety of our efforts with all provisions issued by agencies such as the National Water Commission (CONAGUA), and we urge our employees to use this vital liquid responsibly.


TOTAL WATER ExTRACTION By SOURCES

3,069,836 26.9%SURFACE WATER EXTRACTED (m3)

UNDERGROUND WATER (WELL) EXTRACTED (m3)

MUNICIPAL DRINKING WATER

TREATED AND RECyCLED INDUSTRIAL WATER FROM THIRD-PARTy VENDORS

TOTAL WATER USE (m3)

6,898,782 60.4%

425,435 3.7%1,020,317

11,414,370

8.9%

100%

6.26.311,4146.1010,7946.7012,4487.3312,732

WATER CONSUMPTION (Thousands of

m3/year)

2015 UNIT GOAL (m3/

tonne)

2014 UNIT(m3/

tonne)2014

2013 UNIT (m3/tonne)2013

2012 UNIT (m3/

tonne)2012

UNITARy 2011

(m3/tonne)2011INDICATOR

3.73.86,8893.906,9243.907,1504.007,756

WATER DISCHARGE (Thousands of m3/year)

2.502.504,5252.203,8702.805,2983.334,976

NET WATERUSE

(Thousands of m3/year)

WATER USE AND DISCHARGE

[G4- EN8]


46

With our Bio-PAPPEL Transportation program, we have developed a large-scale collection and delivery logistics model to deliver fiber and finished products, cutting travel times in half.

In 2014 more than MXN 8.8 million were invested in extending our High Efficiency program to the transportation fleet owned by the packaging business groups, which has allowed us to increase the efficiency of transportation by making sure that each vehicle makes at least twice the trips as in the past, thus reducing loading and unloading times and creating cooperation systems with our final clients.

Driver training has also enabled us to increase transport performance by 22% compared to 2013, representing an 18% reduction in diesel consumption, which is the equivalent of keeping from emitting 293 tonnes of CO2e.

TRANSPORTATION

In 2014, seMarnat’s Clean transportation program rated

the environmental performance of Bio-pappel’s Fleet of

transportation as excellent

47

Committed to protecting the environment and guaranteeing that we do not cut down one single tree in our paper production processes, we are also concerned about increasing forest mass and conserving the flora and fauna species found near our manufacturing plants.

Consequently, we worked in partnership with local government authorities and NGOs over the course of the year to implement several reforestation campaigns that encouraging people’s participation and aim to raise environmental awareness.

In 2014 we also built on our strategic partnership with the “Reino Animal” theme park and the “Refugio Salvaje” wildlife conservation unit, with the aim of building and maintaining the first Royal Eagle Conservation Center in Mexico to help save this endangered species, with only 70 surviving couples, currently.

The Center will be situated in the Animal Kingdom theme park in Teotihuacán, state of Mexico, opening its doors to the public in 2015.

2014 Sustainability Report › environmental Performance

In 2014, we carried out 16 reforestation campaigns, planting more than 16,500 trees, many that

are native to the regions where Bio-PAPPEL operates, thereby also

conserving the habitat of different species.

bIODIVERSITy

As part of our commitment to the environment and our Company’s mission of not felling trees to make our products, we continued our partnership with the Papalote Children’s Museum for the second year in a row.

The purpose of this partnership is to maintain and operate Ramón the Tree, a character created when the museum first opened its doors in 1993, by providing a fun-filled tour that proves that trees are a source life both within and outside the city. We also sponsor the recycling center inside the museum, intended to raise awareness and teach children of the importance of separating trash so it can subsequently be recycled and reused.

OTHER PARTNERShIPS

[G4- EN13]

... We ReCyCle

sustainability

48

846 employees in Mexico and the United States participated ain the Bio-Talent program in 2014 to set goals and strengthen our performance management model.

SOCiAL PERFORMANCE

In 2014 our workforce comprised 8,661 direct employees, with a further 26,000 indirect employees.

[G4- 10]

49

1,814 Bio-PAPPEL employees volunteered to share their time and talent with neighboring communities, representing close to 21% of our total workforce.

In 2014 we invested more than MXN 78 million on updating our security systems to provide our staff with the best possible working conditions.

50

Our PEOPlE

Bio-PAPPEL continues working steadily to gain further recognition as one of the Mexican companies where people want to work. In 2014, for the third consecutive year, we were recognized by Expansión magazine as a Super Company, a distinction that recognizes organizations that have worked to strengthen their organizational culture, climate and best practices. For the second consecutive year, we received the “Great Place to Work” certification.

In 2014 we created 541 new direct and

1,640 indirect jobs

Two new mega plants opened in Bajio and Mexicali, representing 4.68% of our workforce.

59.86% of our employees are between 23 and 40 years of age

81.98% are men and

18.02% are women

[G4- 10, G4- LA1, G4- LA12]

512014 Sustainability Report › Social Performance › Our People

Furthermore, following a study carried out with our employees to enhance the organizational climate, throughout 2014 we worked on building a Values Campaign that is due to be implemented by 2015. This campaign will be launched side-by-side with our Bio-Talent Performance Management Model in view of the importance of professional skills in relation to organizational values.

In terms of our commitment to development in the communities where we operate, we try to hire local residents through the Human Capital Division and the Human Resources and Industrial Relations area at each operation center to fill positions that will help them grow economically and professionally within the Company.

3,318

5,343

3,055

5,065

2,980

4,997

399

981

368

712

302

1,189

2,919

4,362

2,687

4,353

2,678

3,808

20142012201320142012WORKFORCEBy CONTRACT

TyPE2013 2012 2014 2013

ADMINISTRATIVESTAFF

6,486 7,040

PERMANENT TEMPORARy TOTAL

7,281 1,491 1,080 1,380 7,977 8,120 8,661TOTAL

WORKFORCE By CONTRACT TyPE

OPERATIONAL STAFF (COLLEC-

TIVE AGREE-MENTS)

[G4- 11]


52

All (100%) of our staff work full-time and, following our commitment to offering optimal working conditions.

182185180333131149154149UNITEDSTATES

6,621 6,741 7,100 1,356 1,379 1,561 7,977 8,120 8,661TOTAL

8,4797,9357,7971,5281,3481,3256,9516,5876,472MEXICO

20142012201320142012WORKFORCEBy GENDER

AND REGION2013 2012 2014 2013

MENCOUNTRy WOMEN TOTALWORKFORCE By GENDER AND REGION

2012 2013 2014WORKFORCE ByAGE GROUP

100% 100% 100%TOTAL

12.90% 9.03% 11.05%18 TO 22

21.71% 23.98% 25.50%23 TO 29

17.15% 18.33% 18.14%30 TO 35

14.85% 15.78% 16.23%36 TO 40

22.29% 21.37% 19.68%41 TO 50

10.21% 11.04% 8.82%51 TO 60

0.89% 0.47% 0.58%61 AND OVER

WORKFORCE By AGE GROUP

100%

81.98%7,100 MEN

18.02%1,561 WOMEN

WAGES

MONTHLy WAGE RANGE By GENDER

67.66%

14.88%

UP TO MXN 10,000

1,228

5,86012%

2.64%

MXN 10,001TO MXN 30,000

229

1,0391.79%

.39%

MXN 30,001 TO MXN 70,000

34

156.52%

.12%

MORE THAN MXN 70,000

10

45

We are in constant dialogue with

employees through their union

representatives, who we involve in our

pay-setting processes and any changes we make to policies and

procedures.[G4- 53]

[G4- 51, G4- EC5, G4- LA13]


Bio-PAPPEL rejects the practice of paying different salaries to men and women, and we offer equal remuneration based on position, goals and responsibilities.

These benefits include:• Annual bonuses in proportion to time worked. • Savings fund to promote employee and their families’ financial protection. • Grocery vouchers to support employees’ household expenses.• Punctuality or attendance bonuses in recognition of the extra hard work put in by our employees.

• Variable bonus plans, and productivity bonuses.• Vacations beyond these required by law.• Agreements with fitness centers, opticians, universities and nurseries for the corporate offices and some of our plants.

At Bio-PAPPEL, we know that our employees are the lifeblood of our business, as they put their body and soul into their daily tasks. As a demonstration of our commitment to their safety and wellness, we offer them benefits above and beyond those established by law.

2014

1,561

1

3

27

189

26

95

257

963

2013

1,379

1

3

15

117

17

89

209

868

2014

7,100

4

30

125

795

120

348

1,298

4,380

2013

6,741

4

30

114

745

138

327

1,185

4,198

jOB

TOTAL

DIRECTORS

AREA AND DEPUTy DIRECTORS

WORKFORCE By jOB CATEGORy

COORDINATORS ANDSUPERVISORS

ASSISTANT ANDAUXILIARy STAFF

MANAGERS

AREA HEADS

ANALySTS

OPERATIONAL STAFF

MEN WOMEN

[G4- LA2]

... We ReCyCle

54

TRAINING AND CAPACITy buILDING

We believe that the training and capacity-building of our employees is important for their development. The ongoing training provided to our employees allows us to give our best, which is reflected in major benefits for our clients and consumers.

We therefore offer attendance and e-learning sessions to make information available to all, regardless of teaching method or workplace. These training courses were taught by 138 in-house instructors registered with the Mexican Ministry of Labor and Social Welfare.

16.65

10.00

16.07

19.66

10.92

8.37

9.33

12.12

19.00

AVERAGE TRAINING HOURS PER EMPLOyEE

129,383.14

50.00

499.96

2,949.00

9,544.08

1,146.69

4,002.57

9,780.84

101,460.00

NUMBER OF TRAINING HOURS

1,530

1

3

27

188

17

84

250

960

NUMBER OF EMPLOyEES TRAINED (WOMEN)

6,240

4

25

123

686

120

345

557

4,380TOTAL

DIRECTORS


2014 TRAINING AND CAPACITy BUILDING



MANAGERS

AREA HEADS

ANALySTS

OPERATIONAL STAFF

jOB CATEGORIES NUMBER OF EMPLOyEES TRAINED (MEN)

[G4- HR9, G4- SO4]

[G4- LA9]


Every year, we also place particular effort in training and raising staff awareness of our Code of Ethics and the different channels available to them so they can report violations.

Our training and capacity-building

efforts are concentrated as follows:

68.7% operational staff

31.3% administrative staff.

2

2

2

2

2

2

2

2

2

AVERAGE TRAINING HOURS PER EMPLOyEE

16,486

10

66

296

1,400

224

840

2,968

10,682

NUMBER OF TRAINING HOURS

1,469

1

3

25

126

20

75

257

962

NUMBER OF EMPLOyEES TRAINED (WOMEN)

6,774

4

30

123

574

92

345

1,227

4,379

TOTAL

DIRECTORS


TRAINING AND CAPACITy BUILDING IN OUR CODE OF ETHICS, ANTI-CORRUPTION AND HUMAN RIGHTS POLICIES



MANAGERS

HEADS

ANALySTS

OPERATIONAL STAFF

jOB CATEGORIES NUMBER OF EMPLOyEES TRAINED (MEN)

1,351 via e-learning

16.65 training hours per employee on average in subjects directly related to their day-to-day activities

129,383 hours of specialized technical training

[G4- HR2]


56

BIO-TALENT PROGRAM

The importance we place on our people’s performance and development has given rise to our Bio-Talent Performance Management Model, which aims to define, monitor and align staff goals with the professional capacities required by Bio-PAPPEL, thereby enhancing the development of our individual and collective potential that will enable us to improve on the success achieved so far. Bio-Talent also enables us to establish Individual Development Plans, based on detecting the training needs of our people to provide continual improvement, feedback and evaluation processes.

3,359 Goals set to strengthen our Performance

Management Model

846Employees in Mexico and the USA

participated in 2014

Employee performance is evaluated annually based on the set goals for the period in question. In 2014,

25.5% of administrative staff were evaluated on their goals and skills. In 2015, we reached 40% when we incorporated all of Wave 2, including supervisors, heads, coordinators and

analysts.

[G4- 52, G4- LA10]


In its third year in operation: 182 leaders from the “First Implementation Wave” participated (directors, assistant directors and some managers), and 664 employees from the “Second Implementation Wave” participated (managers, area heads, coordinators and supervisors). Resulting in:2,243 performance goals impacting on the accomplishment of the Company’s strategy and thus creating value for the Company.

1,116 development goals aimed at developing the individual talent of employees with a focus on learning and developing new behavior.

daily2. intermediate

1. d

efin

itio

n

perf

ormance review

of e

xpec

tati

ons

daily

perf

orm

ance

3. evaluation

tim

ely

and

Qual

ity

feed

BacKfeedBacK

formal

timel

y an

d Qu

alit

y fe

edBa

cK

sKills and

oBJectives

metHods and tecHnoloGy

tecHnoloGy

formalfeedBacK

Bio-Talent also generates a skills model aligned with the Company’s mission and vision, which staff must have in order to fulfill their responsibilities. These skills are divided into the following two categories:

A. Organizational Skills1. Competitiveness2. Integrity3. Sustainability4. Teamwork5. Innovation and Creativity6. Personal Development7. Focus on Results and Achievements

B. Leadership Skills1. Strategic Outlook2. Problem Analysis and Solutions3. High-Performance Team Building4. Decision Making5. Negotiation and Conflict Management6. Business Knowledge7. Performance Management

In 2014 we began offering e-learning training programs, thus providing access

to more employees.

7% 1% 3%TURNOVER PERCENTAGE IN THE USA

2012 2013 2014

2% 1% 7%TURNOVER PERCENTAGE IN MEXICO

TuRNOVER

... We ReCyCle

58

GENDER EquITy MODEL (GEM) CERTIFICATION

In 2014 we kept our Gender Equity Model certificate issued by the Mexican Woman's Institute.

This Model serves as a tool for demonstrating our commitment to developing an equal society by helping create equal opportunities and nondiscriminatory treatment for men and women.

We carry out activities to maintain and improve our Gender Equity Model in order to spread a culture of fairness throughout the Company.

QuAlIty OF lIFE AT wORk

592014 Sustainability Report › Social Performance › Quality of Life at Work

All staff is informed of our Gender Equity Policy, which includes the following commitments:

- Defense of human rights. - Stand against discrimination and promotion of equal treatment and opportunities for men and women. - Implementation of specific measures to prevent, deal with and punish all instances of harassment or violence. - Promotion of a work-life balance - Implementation of actions aimed at promoting greater conditions of equality between men and women among the Company’s stakeholders.

To ensure the compliance of our Gender Equity Policy, we carry out several initiatives over the course of the year, which include:

Bio-PAPPEL Gender Equity CommitteeThe aim of which is to design action plans and identify areas of opportunity within our Gender Equity Model. Ethics Reporting Hotline Communication channel for the follow-up of cases concerning gender equity that may arise.

Guaranteed Maternity LeaveCommitted to the women who work for Bio-PAPPEL, and in compliance with all established legislation, we guarantee we will give women returning from maternity leave their current job back or a similar position without affecting their wages, benefits, or professional development within the Company.

Benefits for Working MothersWe have lactation rooms available to mothers during their working hours, and we have set up an agreement with a nursery to assist our employees as they embark on a new phase as parents.

Gender Equity Film DebateIn this program implemented every quarter we show a film concerning Gender Equity Model related issues. Approximately 40 employees take part in each session with the sharing of viewpoints, discussions and questions.

MEG FairAn event where we share information with employees over what exactly is discrimination, how it occurs and how it can be avoided. We put on quizzes and other activities to help reinforce the information shared with our people.

We launched a major partnership with Best Buddies Mexico for the employment of young people with cognitive disabilities

in our work centers. Bio-pappel hired one person from this group in 2014, and in 2015 we undertake to provide employment opportunities to at least two more people.

90% 80% 96%RETURN TO WORK PERCENTAGE FOLLOWING MATERNITy LEAVE

2012 2013 2014

5.62% 3.75% 4.48%MATERNITy LEAVE PERCENTAGE


bIO-PAPPEL OPEN HOUSE

Bio-PAPPEL is proud of our excellent facilities, manufacturing processes, and health and safety measures offered to our employees. As part of our commitment to transparency, we therefore invite families, members of neighboring committees and students to visit our plants so they can get to know our work space and our production processes.

In addition to being events where individuals and families can socialize and integrate, these visits also provide an opportunity for students to find out more about the jobs in demand at Bio-PAPPEL, serving as an incentive for young people in the communities where we operate to train and boost their personal development.

380family and neighbors participants

9“Bio-PAPPEL Open House” Events

60

OCCupatiOnal HEAltH AND SAFEty

612014 Sustainability Report › Social Performance › Occupational Health and Safety

In view of Bio-PAPPEL’s commitment to sustainability, the creation of an accident-free workplace is a priority. We also adopt and uphold a commitment to providing optimal working conditions by ensuring the highest standards of occupational health and safety. We demand high levels of safety in all of our processes, facilities and services, with special attention given to protecting employees, contractors, clients and the local environment. This active principle is disseminated throughout the organization by means of our Occupational Health and Safety Policy.

We are committed to a culture of safety and security, which contributes to the success of our Management System and helps extend good practices, safe conduct and high safety standards throughout the organization in order to ensure improved performance and greater readiness in dealing with unexpected events.

All of our employees are represented by formal occupational health and safety committees, which have been set up to help offer monitoring and guidance over programs and activities dedicated to health and safety.

OCCupatiOnal HEAltH AND SAFEty [G4- LA6]

... We ReCyCle

MANAGEMENT MOdEl FOR OCCuPATIONAL RISk PREVENTION Our Management Model for Occupational Risk Prevention aims to guarantee a system of safety management which will allow us to pursue our goal of “Zero Accidents” in our operations.

Our Contingency Plan describes the facilities, available means of protection and risk areas to guarantee reliable means of prevention and protection.

62

In keeping with our commitment to preventing and minimizing

occupational risk across 100% of our plants, our goal in 2015 is to reduce the number of lost days subsidized due to occupational injury by 25%, so we will continue working with

our “Zero accidents” program to be overseen by occupational Health and safety supervisors at each of

our facilities.

•DEVELOPMENTOF OCCUPATIONAL HEALTH AND SAFETy EXPERTS AND INSTRUCTORS.

•NATIONALOCCUPATIONAL HEALTH AND SAFETy CONTEST.

•ANNUALHEALTHAND SAFETy PROGRAM.•OCCUPATIONALRISK PREVENTION PLAN•CONTINGENCYPLAN•NATIONALSAFETY CONGRESS.

•FMGLOBALAUDITS.•OHSAS18001 CERTIFICATION.•CLEANINDUSTRY CERTIFICATION.

AUDITING IMPLEMENTATIONOF ACTIVITIES

SETTINGOF

STANDARDS

RISKDETECTION

•METRICS.•ACCIDENTRATE.

SECURITy AS A

VALUE AND DISCIPLINE


Last year we reduced by :

Calculated based on 8,661 employees.

14.2% occupational injury days lost

25.5% accidents

In 2014 we invested more than MXN 78 million to update our security systems to provide our employees with the best possible working conditions.

For the ninth successive year, we surpassed the requirement established in NOM-019-STPS-2011 of the Ministry of Labor and Social Welfare for the number of workers involved in Occupational Health and Safety Committees by 150%.

We have also trained all of our First Aid, Search and Rescue personnel as part of a joint effort with the Civil Protection authorities.


64

*Our Accident Rate includes fatal accidents, of which there were zero reported incidents in 2012, 2013 and 2014. All minor accidents at the Company’s facilities that required first aid only are excluded.

2012 2013 2014

157 200 149ACCIDENTS

0.0066% 0.0083% 0.0058%

2,600 2,680 2,300

0.109% 0.111% 0.089%

33,290 34,816 31,482

1.34% 1.27% 1.13%

RATE OF DAyS LOST DUE TO OCCUPATIONAL INjURy

ACCIDENT RATE

OCCUPATIONAL INjURy DAyS LOST

DAyS LOST FOR ABSENTEEISM

RATE OF ABSENTEEISM

ACCIDENTS, OCCUPATIONAL INjURIES AND ABSENTEEISM


ACCIDENTS, OCCUPATIONAL INjURIES AND ABSENTEEISM

100,722 training hours provided, 122%

more than in 2013

8,655 employees trained

HEAltH ANd SAFEty tRAININg

At Bio-PAPPEL, we believe training is a key element that helps prevent risk situations from arising from our activities; therefore, we dedicate a great deal of economic and human effort to this activity.

We promote the training of personnel directly involved in the management, operation and maintenance of our facilities and systems, and those with direct responsibilities for clients, suppliers and contractors, based on each of their activities and responsibilities.

We also work actively on developing communication plans that support training efforts, while making all information available to employees in the form of regulations, technical documentation and self-training materials.

The main training programs developed for each of the Company’s business units are focused on risk and incident management, and health and safety leadership. We also focus on firefighting and contingency plans.

Health and safety training is one of the most effective actions for improving

management and performance.

40.0

29.9

10.4

12.0

36.5

1.7

9.6

11.6

40

509

1,395.9

5,328.9

39,168.6

2,841.3

51,438.5

100,722

WOMEN

0

2

12

72

127

756

594

1,563

MEN

1

15

122

371

946

884

4,753

7,092

AVERAGE TRAINING PER

EMPLOyEE

40.0

11.1

9.7

7.0

11.4

12.5

5.6

7.7

TRAINING HOURS

40

244.5

1,089.9

4,094.3

8,357.3

11,817

19,550.2

45,193

WOMEN

0

0

4

382

98

339

507

1,330

MEN

1

22

108

199

635

604

2,964

4,533

HEALTH AND SAFETy TRAINING


EMPLOyEE

30.0

20.3

36.4

4.7

20.0

13.4

15.4

15.3

TRAINING HOURS

30

243.2

3,893

1,470.4

14,840.2

20,261.5

71,685

112,423

WOMEN

0

0

14

20

59

770

346

1,209

MEN

1

12

93

291

684

738

4,312

6,131

jOBCATEGORy

TOTAL

DIRECTORS



MANAGERS

HEADS

ANALySTS

OPERATIONAL STAFF

2012 2013 2014TRAINING

HOURS


EMPLOyEE

... We ReCyCle

66

Since we at Bio-PAPPEL consider health and safety to be a lifelong value and the environment to be the core focus of our operations, in November we organized our 7th Safety and Environment Congress with the participation of all our Directors, Deputy Directors, Operational Managers, and Safety and Environment Heads, who helped us share key information with their workforce in each operations center.

On March 21 and 22, we put on the 1st Occupational Health and Safety Congress with the participation of staff at all our plants as part of our continual training strategy, at which we set up the Annual Occupational Health and Safety Plan, which contains the “Zero Accident” Program aimed at reducing workplace accidents as much as possible.

CONGRESSES

safety and environment Congress

occupational Health and safety Congress


Every year we organize a Bio-Health Fair, where employees are given information on various health issues such as diabetes, high blood pressure, pap smears, oral health, accident prevention and nutrition.

Bio-Health Fairs prevenIMss

EMPlOyEE HEAltH BENEFItS

In the interests of promoting and securing healthy conditions for our people, all of our work centers have an on-site physician and occupational health specialist to attend to the specific circumstances of each of our employees. They are also responsible for promoting issues of prevention and wellness through the staging of health fairs, informal talks, visits from external experts and other activities.

In October and November 2014, we were visited by personnel from the Mexican Institute of Social Security, who helped us implement activities aimed at the prevention and detection of obesity and diseases among our employees.

We have continued making significant progress through SCoRe SCR, our social commitment and involvement strategy for the communities where we operate, through which we aim to generate shared value in the areas of environmental education and protection, community development, and education for development, with the continued participation of our people.

68

COMMuNITy INVOLVEMENTOUR COMMuNITy PROGRAMS IN NuMbERS

18,823direct beneficiaries

1,814 Company employees volunteered to share their time and work

176 activities performed

242civil society

organizations benefitted

MORE THAN:

1. Environmental Education and

Protection

3. Educationfor

Development

2. CommunityDevelopment


Protection

3. Educationfor

Development


Bio-PAPPEL Volunteering

Hug a Tree Taking Care of My Community Productive Workshops

Bio-PAPPEL Green Summer School Visits

Adult Education

Reforestation: Our Role

Lets all help the Environment

692014 Sustainability Report › Social Performance › Community Involvement ... We ReCyCle

70

HUG A TREE

REFORESTATION:OUR ROLE

GeneralObjective

To generate a culture of effective separation and disposal of urban solid waste.

1. To implement campaigns for the recycling of unused paper and cardboard.2. To provide recycling training and awareness sessions.3. To generate in-kind benefits for participating institutions through the exchange of paper and cardboard collected.

1. To raise awareness of the importance of protecting and looking after our forests.2. To carry out tree-planting campaigns in partnership with experts and local authorities to ensure that they grow and survive in the area.3. To stimulate the voluntary participation of employees and members of communities.

1. To lead talks, workshops and activities that will enable participants to put ideas over environmental protection into practice.2. To take part in events, fairs and forums on the environment.

To help increase the country’s forest mass and reduce environmental impacts.

To raise awareness of environmental protection.

Specific Objectives

LETS ALL HELP THEENVIRONMENT

OUR GUIDING PRINCIPLES

guIdINg PRINCIPAl 1: ENvIRONMENtAl EDUCATION AND PROTECTION

We bring our experience and knowledge of sustainability to the communities where we operate in order to create a culture of environmental protection and respect.

The environmental and social programs implemented under this principal are described as follows:

712014 Sustainability Report › Social Performance › Community Involvement

Through this guiding principle, we aim to generate shared value with the communities situated near our plants by leveraging the skills and talent of our employees to make a positive contribution to their social and economic development.

The social programs implemented under this principal are described as follows:

guIdINg PRINCIPAl 2: COMMuNItyDEVELOPMENT

TAKING CARE OF My COMMUNITy BIO-PAPPEL GREEN SUMMER

GeneralObjective

To help improve conditions in our plants’ neighboring communities by leveraging the talent and availability of our people and the communities concerned.

To give employees’ children the opportunity to get to know our production centers during the summer vacation period every year.

1. To demonstrate the production and recycling processes carried out at our plants.2. To put on recreational and cultural activities that help raise awareness of environmental protection.3. To promote the integration of our employees and their families.

Specific Objectives

1. To start up painting, cleaning and/or infrastructural improvement campaigns based on the needs of each community.2. To form partnerships with authorities to promote actions to improve the area.3. To mobilize our people and neighboring communities to volunteer to carry out particular actions.


72

We develop programs for the development of vulnerable groups in neighboring communities through education, thereby helping beneficiaries gain access to new and better sources of income for them and their families.

The social programs implemented under this principal are described as follows:

I have enrolled on the piñata production workshop organized by Bio-PAPPEL to help me get ahead.

I think the workshop will help me feel useful and generate an extra income for me and my family.

– Brenda López, Artesanos Community, Tlaquepaque, Jalisco–

“”

guIdINg PRINCIPAl 3: EDUCATION FOR dEvElOPMENt

ADULT EDUCATION

GeneralObjective

To offer opportunities for development and new sources of income, and a better quality of life.

1. To design, implement and monitor workshops appropriate for the needs identified.2. To refer those in attendance to public bodies that will help them with resources, promote their development and help them set up their own small business.

1. To take tours designed to encourage learning about our production processes.2. To mobilize volunteers to lead tours.3. To form partnerships with local educational institutions.

1. To form partnerships with local institutions offering adult education programs.2. To stimulate volunteering so that employees help their colleagues from the same plant.

To share our production process for 100% recycled paper, and its transformation into paper products.

To offer our employees and members of neighboring communities the opportunity to complete their basic education.

Specific Objectives

PRODUCTIVE WORKSHOPS SCHOOL VISITS

We leverage the talent and efforts of our people by inviting them to volunteer in our different community activities. We also generate a sense of belonging and affection for the Company, which contributes to our employees’ quality of life.

Thank you very much for inviting me to participate as a Bio-PAPPEL volunteer in the “Taking Care of My Community” program.

The feeling of knowing you have contributed to overcoming such a challenge is

hugely rewarding.– Andrés Miguel Agustín, Oaxaca Plant.–

“”


BIO-PAPPEL vOluNtEERINg

... We ReCyCle

74

SCoRe RESULTS

Our regional coordinations have enabled ongoing dialogue to be maintained with neighboring communities. In 2014, we worked with 29 municipalities near our plants through our community involvement programs implemented with the support of community leaders, local authorities and Bio-PAPPEL volunteers.

The primary social problems we detected in the communities near our facilities and which we helped reduce through the implementation of our programs, are as follows:• Poverty• Illiteracy• Alcohol abuse• Truancy• Addictions• Crime• Pollution• Family integration


Protection

3. Educationfor

Development


Volunteering

2013 vs 2014201420132012INDICATORPROGRAMPRINCIPLE

1.1 HUG A TREE

TONNES

MAN-HOURS VOLUNTEERING

COMPANYVOLUNTEERS

ATTENDEES

VISITS HOSTED

MAN-HOURSTRAINING

FEMALEBENEFICIARIES

WORKSHOPS PERFORMED

BENEFICIARIES

EVENTS PERFORMED

BENEFICIARIES

ACTIVITIES PERFORMED

ATTENDEES

TALKS PERFORMED

TREES PLANTED

CAMPAIGNS IMPLEMENTED

BENEFICIARY INSTITUTIONS

207

78

11

3,800

N/A

N/A

7

1,400

5

300

0

0

0

21

245

800

2,833

281

102

13

5,690

39

10,200

20

2,718

16

1,028

0

0

0

58

687

1,564

5,540

284

104

16

16,500

47

12,263

21

4,515

18

1,252

4

72

1,296

70

721

1,814

6,425

1%

2%

23%

190%

21%

20%

5%

66%

13%

22%

N/A

N/A

N/A

21%

5%

16%

16%

1.2 REFORESTATION:OUR ROLE

1.3 LETS ALL HELPTHE ENVIRONMENT

2.1 TAKING CARE OF MY COMMUNITY

2.2 BIO-PAPPEL GREEN SUMMER

3.2 SCHOOL VISITS

3.1 PRODUCTIVEWORKSHOPS

N.B. Where 0 is indicated, the program was not yet in place and there were no results obtained during the year in question.

IN 2014, WE WORKED WITH29 MUNICIPALITIES NEAR

OUR OPERATIONS CENTERS THROUGH

OUR SOCIAL PROGRAMS

NORTHERN MEXICAN ORGANIZATION• NUEVO LEON

(Apodaca, Monterrey, San Nicolas de los Garza)

• CHIHUAHUA (Chihuahua)

• SINALOA (Culiacan)

• BAjA CALIFORNIA (Mexicali)

• COAHUILA (Torreon)

WESTERN MEXICAN ORGANIZATION• jALISCO

(Tlaquepaque, Tepatitlan, Zapotlan el Grande, Atenquique, Guadalajara, Zapopan)

• GUANAjUATO (Silao, Leon)

CENTRAL MEXICAN ORGANIZATION• STATE OF MEXICO

(Tlalnepantla, Cuautitlan, Tultitlan, Toluca)

• HIDALGO (Tizayuca, Tula)

• MEXICO CITy (Miguel Hidalgo, Azcapotzalco)

SOUTHERN MEXICAN ORGANIZATION• VERACRUZ

(Tres Valles)• OAXACA

(Tuxtepec)• CHIAPAS

(Tapachula)• PUEBLA

(Puebla)

DURANGO ORGANIZATION• DURANGO

(Durango, Nombre de Dios)

752014 Sustainability Report › Social Performance › Community Involvement ... We don’t CUt doWn tReeS

76

SPONSOR AND CO-ORGANIZER OF THE 5thNATIONAL WASTE RECyCLING CONTEST

We lent our support to the culture of recycling, in partnership with SEMARNAT and COPARMEX by encouraging and acknowledging relevant examples in the business, social, academic and government sectors in Mexico.

In recognition of the hard work of organized civil society in helping to build a better Mexico, we join in with its efforts through the Bio-PAPPEL Foundation by sponsoring and making donations to projects that impact greatly on society.

The key activities of the Bio-PAPPEL Foundation include the following:

PARTNERS OF WORLDFUND TO REDUCE POVERTy THROUGH EDUCATION

We sponsor the training and development of state school principals to improve the quality of education offered to children.

PARTNERS OF THE “REINO ANIMAL” THEME PARK AND “REFUGIO SALVAjE” NGO

We helped with the building and upkeep of the Royal Eagle Conservation Center, dedicated to a national endangered symbol.


FRIENDS OF BEST BUDDIES MEXICOWe launched a major partnership for the employment of young people with cognitive disabilities in our operations centers.

TIES WITH THE MEXICAN RED CROSSWe assisted this crucial institution with several of the activities it organized.

Miguel RincónBio-PAPPEL

SPONSOR OF PAPALOTE CHILDREN’S MUSEUMWe participated in two of the museum’s major exhibitions: Ramón the Tree and the RRRe-Invent Recycling Center.

COMMUNITy INVOLVEMENTTo have greater coverage of communities neighboring our operations center, and to establish a formal process for the grievances of local communities.

TRAINING AND DEVELOPMENTTo enable the training needs of corporate office staff to be detected, and to begin creating the Bio-PAPPEL University, which will concentrate and align training efforts throughout the Company.

PERFORMANCE MANAGEMENTTo incorporate the “Second Wave” into our Bio-Talent Performance Management system, including supervisors, area heads, coordinators and analysts.

OUR COMMITMENT IN 2015

CULTURAL ALIGNMENTTo implement the “Bio-PAPPEL Values” campaign with the aim of spreading it among all staff and aligning the organizational culture.

MATERIAL ASPECTS

... We ReCyCle

CiTizENShiP ANdINDuSTRy INVOLVEMENT

paper CHaMBerDue to our high level of commitment to the development of our sector, we have had the honor and responsibility of presiding over the efforts made by the paper industry in Mexico since 2013, and until 2016, in the interests of promoting a national culture of recycling and preparing strategies to improve the standards regulating our industry and the development of our products.

sustenta, a.C.We promote a culture of total urban solid waste management in various municipalities in Mexico in partnership with other leading businesses in the sector, developing integrated management projects with a selective collection plan, as we aim to reduce garbage volumes in landfills and containment storage.

MexICan Center For pHIlantHropy (CeMeFI)We sit with leading companies on CEMEFI’s Social Responsibility Committee, helping to promote the adoption of best practices in this area in the corporate sector in Mexico.

geMI InItIatIVeThanks to our strong commitment to promoting a low-carbon economy, we currently have the privilege of chairing and coordinating the efforts of the Global Environmental Management Initiative (GEMI), a not-for profit organization through which we strive for excellence among the country’s leading companies in their industries in matters of the environment, energy and climate change, health and safety, and social responsibility.

CoparMexWe are part of the “COPARMEX Large Companies” group, which aims to develop and promote greater competitiveness for the country in partnership with the industrial sector.

[G4- 16]

78

STAKEHOLDERS

EXPECTATIONS RESPONSE/ACTIONS PERFORMED

COMMUNICATION CHANNELS

CONTACT FREQUENCy

Our People

To be a great place to work by offering our people development and professional growth opportunities, and offering companies the best conditions of occupational health and safety.

Bio-Talent: Performance management program aimed at aligning individual and corporate objectives.Continual Training Plan.Bonus and compensation plan.Code of Ethics.Occupational Health and Safety Model.Gender Equity Model.High placing in work climate rankings.

Feedback on individual performance and Career Plan design, through the Bio-Talent Program.Composition and follow-up of various committees to find out the concerns and suggestions of our people, and to implement new projects and initiatives.Work climate surveys.Ethics Reporting Hotline.Bio-Magazine.Bio-Inform bulletin.Volunteering programs.

Bio-TALENT: Semi-annual.Committees: Quarterly.Work Climate Surveys: Annual.Ethics Reporting Hotline: Daily.Bio-Magazine: Quarterly.Bio-Inform: Monthly.

Communities

To generate shared value with the communities neighboring our production plants by leveraging the skills and talent within the Company to make a positive contribution to their development.

Detection of the needs of the communities where we operate.Annual community work plan with objectives and metrics.SCoRe SCR Program focusing on three lines of action: 1) Environmental education and protection; 2) Community development; 3) Education for development.

Direct dialogue with social leaders in neighboring communities. Needs identification and definition of action plans for each community.Monthly activity report.Community questionnaires.

Monthly.

Clients

To offer competitive and sustainable products that effectively contribute to the success of our clients and their customers.

Audits conducted by our clients.Continual improvement to the Client Policy.Improvement strategies in inventory management.Compliance with standards and certifications.

Satisfaction surveys of our clients.Visits and audits at our production plants.Ethics Reporting Hotline.Direct dialogue with our clients to find out their needs and expectations.

Client Satisfaction Survey: Annual.Audits: Annual.Ethics Reporting Hotline: Daily.Delivery of the Bio-PAPPEL Code of Ethics: Annual.

Suppliers

To promote effective relationships within our value chain to guarantee mutual growth and market longevity.

Supplier Development Program.Environmental Leadership Program for Competitiveness.Supplier Policy compliance.Annual Supplier Congress.

Work in partnership with our suppliers for their integration into the PROFEPA Environmental Leadership Program for Competitiveness.Annual Supplier Congress to train all purchasing staff, thereby improving our commercial relations with suppliers.Direct dialogue with key suppliers to identify areas of opportunity and best practices.Ethics Reporting Hotline.

Environmental Leadership Program and Supply Congress: Annual.Ethics Reporting Hotline: Daily.Annual delivery of the Bio-PAPPEL Code of Ethics.

Authorities

To guarantee the legal compliance of all of our operations.

Active participation in industrial chambers and associations to promote the creation and reinforcement of sustainable development and environmental regulations.Government-enterprise partnerships.

Direct dialogue with authorities.Meetings with groups, industrial chambers and associations.Annual reports.Seminars and forums in key areas.

Monthly.

Board ofDirectors and Shareholders

To generate sustainable value based on competitiveness, innovation, environmental protection and social responsibility in all our operations.

Recipient of the Sustainable Company Seal of the Mexican Stock Exchange.Continuous improvement of processes.

Annual and quarterly meeting of the Board and Shareholders’ Meeting.Annual Financial Report.Annual Sustainability Report.Executive Meetings.

Executive Meetings and Financial Reports: Quarterly and Annual.Board and Shareholder’s Meetings, Financial Report, Sustainability Report: Annual.

NGO’s and the General Public

Bank creditors

To promote a transparent relationship aligned to the social and environmental impact of the Company.

To generate shared value and healthy financial relations.

Formation of strategic partnerships.Inclusion in rankings and acknowledgments in corporate sustainability and environmental matters.

Detection of financial needs and implementation of financing strategies through custom-designed products under optimal market conditions.

Direct dialogue to discover the needs and expectations of different groups of civil society.Digital media, website.Inclusion in rankings.

Constant communication with Banking Institutions to identify business and financing opportunities.

Monthly.Inclusion in rankings: Annual.

Quarterly and annual reports.

Our STAkEhOLDERS [G4- 24, G4- 25, G4- 26, G4- 53]

792014 Sustainability Report › Social Performance ... We don’t CUt doWn tReeS

MonarCH ButterFly: eCo-laBelIngRegistered with the Paper Association for compliance with Official Mexican Standard NMX-N-107-SCFI-2010, as our manufacturing processes comply with the recycled fiber content required for paper manufacturing.

geI MexICo prograM (greenHouse gases)In 2014, Bio-PAPPEL gained recognition from SEMARNAT and the Corporate Sustainable Development Council (CESPEDES) for having submitted our Volunteer Program to the GEI Mexico Program (Greenhouse Gases), achieving level GEI 1. Likewise, in 2014 our 2013 inventory was verified by an external certification body alongside the verification of a GEI 3 project.

Clean transportatIonIn 2014, SEMARNAT’s Clean Transportation Program rated the Environmental Performance of Bio-PAPPEL’s Fleet of Transportation as Excellent.

aCknOwlEdgMEnts ANd CErTiFiCATiONS

ManageMent systeM CertIFICatIonsWe are one of the few companies to have integrated certifications attesting to our high levels of sustainability:1. ISO 9001 quality and productivity processes certification.2. OHSAS 18000 occupational health and safety processes certification.3. ISO 14000 certification for environmental issues.4. ISO 22000 food safety certification.

ISO 14000

ISO 18000

Clean IndustryObtained for the third consecutive year from the Federal Environmental Protection Attorney General’s Office (PROFEPA).

WWF enVIronMental paper CoMpany IndexThe World Wildlife Fund (WWF) recognized our leadership in matters of transparency alongside 24 of the world’s largest paper manufacturing companies, including us in the WWF Environmental Paper Company Index.

great plaCe to WorkWe obtained our second Great Place to Work Mexico certificate for promoting policies and practices that improve our people’s quality of life.

super CoMpanIesThe place where everyone wants to work, awarded for the third consecutive year by Expansión magazine and consultancy firm Top Companies.

HIgHly proteCted rIsk CertIFICateIn 2014, FM Global granted the highest safety certificate to ten of our plants in view of our human resources practices and effective maintenance programs.

FsC 100% reCyCled CertIFICatIonThe products carrying this label are independently certified to verify that they strictly comply with the parameters of sustainability and social commitment required by the Forest Stewardship Council (FSC®). Bio-PAPPEL is the only paper manufacturer in Mexico to have obtained FSC® 100% Recycled Certification in its plants in Veracruz, Oaxaca, Tizayuca in the state of México, Durango, Monterrey and Prewitt, New Mexico.

[G4- 56, G4- PR3]

80

812014 Sustainability Report › Certificates and Acknowledgments

unIted natIons gloBal CoMpaCtSince 2006, Bio-PAPPEL has voluntarily adhered to the United Nations Global Compact in support of its ten principles in the areas of Human Rights, Labor, Environment and Anti-Corruption. In 2014, our Communication on Progress (CoP) was awarded Advanced level due to our best practices in these areas.

InClusIVe CoMpany CertIFICatIonAwarded by the Ministry of Labor and Social Welfare for enforcing a Policy of Good Working Practices.

one oF tHe 100 MexICan gloBal CoMpanIesExpansión magazine named Bio-PAPPEL in its list of 100 global Mexican companies in view of its revenues and foreign operations.

nuMBer 1 enVIronMentally CoMMItted CoMpanyIn 2014, Forbes magazine in Mexico gave Bio-PAPPEL first place in its First Ranking of Environmentally Committed Companies in view of its good environmental practices.

Best supplIers 2014Bio-PAPPEL was awarded the Best Suppliers 2014 Prize in the Packing and Packaging category by Grupo Expansión’s Manafuctura magazine.

leadIng CoMpany InsoCIal responsIBIlItyIn 2014, Expansión magazine named Bio-PAPPEL as one of the Leading Companies in Social Responsibility for its adherence to the SCR model in social, environmental and economic aspects.

gender equIty Model CertIFICatIon In 2013, the National Woman's Institute awarded Bio-PAPPEL the Gender Equity Model certificate effective for two years, obtaining the highest possible score for companies certified for the first time.

sustaInaBle CoMpany sealAwarded for the fourth consecutive year by the Mexican Stock Exchange thanks to our policies and practices focused on corporate governance, and environmental and social issues.

100 leadIng IndustrIal CoMpanIes In MexICoManufactura magazine, from Grupo Expansión, named Bio-PAPPEL as one of the 100 Leading Industrial Companies in Mexico.

BIo-pappel FoundatIon aMong tHe Most generousForbes magazine in Mexico named the Bio-PAPPEL Foundation as one of the most generous foundations in its First Report on Philanthropic Firms in Mexico.

soCIally responsIBle CoMpany BadgeAwarded by the Mexican Center for Philanthropy (CEMEFI) for the fifth year running.

[G4- 14]

... We ReCyCle

taBlE OF COntEnts G4

82

INDICATOR DESCRIPTION PAGE/DIRECT RESPONSE EXTERNAL VERIFICATION STRATEGY AND ANALYSIS

ORGANIZATIONAL PROFILE

MATERIAL ASPECTS AND COVERAGE

REQUIRED CONTENT OVERVIEW

G4- 1

G4- 3

G4- 4

G4- 5

G4- 6

G4- 7

G4- 8

G4- 9

Declaration of the Company’s ultimate responsibility over its vision and strategy for sustainability.

Name of the Company.

Brands, products and services.

Address of the Company.

Countries where it operates.

State the Company’s ownership model and legal form.

State the markets served.

Determine the scale of the Company.

Title Page

Key employment data.G4- 10

Percentage employees included in collective agreements.G4- 11

Describe the Company’s supply chain.G4- 12

Significant changes during the period.

Bodies featured in the Company’s consolidated financial statements, and if any is not contained in the report.

Process to determine the content of the report.

List of material aspects identified during the process to define the content of the report.

Indicate the coverage of each material aspect within the Company.

Indicate the coverage of each material aspect outside the Company.

G4- 13

G4- 17

G4- 18

G4- 19

G4- 20

G4- 21

Associations of which it is a member.G4- 16

Principles or other external economic, environmental and social initiatives that the Company has subscribed to or adopted.

G4- 15

Indicate how the Company addresses the precaution principle.

G4- 14 6,7 Mexico signed the Rio declaration in 1992 and adopts the provisions there of concerning the making and application of its laws and regulations. Our Company complies with all envi-ronmental regulations in Mexico,and therefore implicitly addresses the principles of the convention included in each law.

6, 7

16-22

10

10

94

10

16-22

51

31-33

6, 7

92, 93

93

93

93

78

24-81

http://www.biopappel.com/en/investor-relations/financial-reports

48-55

832014 Sustainability Report › G4 Index

INDICATOR DESCRIPTION PAGE/DIRECT RESPONSE EXTERNAL VERIFICATION

STAKEHOLDER INVOLVEMENT

REPORT PROFILE

GRI INDEX

VERIFICATION

GOVERNANCE

Governance Structure and Composition

G4- 22

G4- 26

G4- 27

G4- 25

G4- 32

G4- 33

G4- 34

G4- 35

G4- 36

G4- 24

G4- 31

G4- 28

G4- 29

G4- 30

G4- 23

Describe the consequences of the reformulating the information contained in previous reports, with reasons.

The Company’s approach to stakeholder involvement, including frequency, main issues and concerns, and how the Company has responded to these key issues and concerns.

Indicate any queries or problems raised concerning stakeholder involvement, and describe the evaluation performed by the Company, and related aspects, in its report. Specify which stakeholders raised each of the major queries or issues.

Basis for identifying and selecting stakeholders.

Indicate which option the Organization has chosen in accordance with the Guidelines, and provide the GRI Index, as well as external verification.

Effective policy and practices of the Company in relation to the external verification of the report and other descriptions requested.

Governance Structure of the Company, including all committees of the supreme governance body. Indicate which committees are responsible for decision-making in economic, environmental and social matters.

Describe the process through which the supreme governance body delegates its authority to senior management and particular employees in economic, environmental and social matters.

Indicate whether the Company has executive positions or roles responsible for economic, environmental and social matters, and whether these positions report directly to the supreme governance body.

List of the Company’s stakeholders.

Provide a point of contact to resolve any queries that may arise in relation to memory content.

Reporting period.

Date of last report.

Report submission cycle.

State all significant changes to the scope and coverage of each aspect compared to previous reports.

No major queries or issues have been reported concerning stakeholder involvement.

Described in the “Corporate Governance” section and explained in detail in the Annual Financial Report.

92

79

79

92

91

27, 28

27

79

94

92

92

92

92, 93

84


Evaluation of the competencies and performance of the supreme governance body.

Functions of the supreme governance body in the evaluation of economic, environmental and social performance.

Remuneration and Incentives

G4- 37

G4- 38

G4- 39

G4- 40

G4- 44

G4- 41

G4- 49

G4- 51

G4- 52

Describe the consultation processes between stakeholders and the supreme governance body in relation to economic, environmental and social matters. If this consultation is delegated, state to whom, and describe the processes for the exchange of information with the supreme governance body.

Describe the composition of the supreme governance body and its committees.

Indicate whether the person chairing the supreme governance body also holds an executive position. If so, describe his/her executive functions and the reason for this provision.

Describe the processes for appointing and selecting the supreme governance body and its committees, and the criteria under which the appointment and selection of members of the former is based.

a. Describe the processes to evaluate the performance of the supreme governance body in relation to the governance of economic, environmental and social matters. Indicate whether the evaluation is independent, and how frequently it is carried out. Indicate whether self-evaluation methods are used. b. Describe the measures adopted as a consequence of the performance evaluation of the supreme governance body in relation to the leadership of economic, environmental and social matters; at the very minimum, indicate whether changes have been made in relation to members, organizational practices, and related matters.

Describe the processes through which the supreme governance body prevents and manages potential conflicts of interest. Indicate whether conflicts of interest are communicated to stakeholders.

Describe the process for relaying major concerns to the supreme governance body.

a. Describe policy for the remuneration of the supreme governance body and senior management. b. List the performance-related criteria that impact on remuneration policy, as well as the economic, environmental and social objectives of the supreme governance body and senior management.

Describe the processes used to determine remuneration. Indicate whether consultants are consulted to determine remuneration, and whether they are independent of the management. Mention any relationship that may exist between said consultants and the Company in matters of remuneration.

The consultation processes between stakeholders and the supreme governance body are described in the “Our Stakeholders” section. This process is delegated to members of the Sustainability Division for environmental and social matters, and to the Administration and Finance Division for economic matters.

27

27, 28

27, 28

28

28

28

28, 52

56, 57



Ethics and Integrity

G4- 53

G4- 54

G4- 56

Explain how stakeholder opinions are solicited and taken into account in relation to remuneration including, where appropriate, the results of votes taken over policies and proposals related to this matter.

Calculate the ratio between the total annual remuneration of the best-paid person in the Company in each country where key operations are carried out, and the total average remuneration per year of the entire workforce (discounting the best-paid person) in each country.

Describe the values, principles, standards and regulations of the Company, such as codes of conduct and ethics.

CATEGORY: ECONOMY

CATEGORY: ENVIRONMENT

Aspect: Economic performance

Aspect: Materials

Aspect: Energy

Aspect: Water

Aspect: Market presence

Aspect: Purchasing practices

SPECIFIC REQUIRED CONTENT

G4- EC1

G4-EN1

G4-EN3

G4-EN5

G4-EN6

G4-EN8

G4-EN9

G4-EN7

G4-EN2

G4- EC5

G4- EC9

Direct economic value generated and distributed .

Materials by weight or volume.

Internal energy consumption.

Energy intensity.

Reduction of energy consumption.

Total water capture by source.

Water sources significantly affected by water capture.

Reduction of the energy requirements of products and services.

Recycled materials as a percentage of materials used.

Ratio between starting wage by sex, and the minimum local wage in places where key operations are carried out.

Percentage spend on local vendors in places where key operations are carried out.

97.33% post-consumption fiber (unused paper and cardboard) and

2.67% chemicals.

Total energy consumption in KJ: 15,000,812,155 KJ.

8,274 KJ/Tonne Paper.

There was no significant impact on bodies of water from our

operations.

N/A

97.33% are recycled materials (unused paper and cardboard).

MATERIALASPECTS

EXTERNAL VERIFICATIONINDICATOR & DESCRIPTION PAGE/DIRECT RESPONSE OMISSION

52, 79

52

29, 30

24-26

40,41

45

52

33

86

CATEGORY: ECONOMY

Aspect: Biodiversity

Aspect: Emissions

Aspect: Effluents and waste

G4-EN11

G4-EN15

G4-EN22

G4-EN24

G4-EN25

G4-EN26

G4-EN23

G4-EN16

G4-EN17

G4-EN20

G4-EN21

G4-EN18

G4-EN19

G4-EN12

G4-EN14

G4-EN13

Owned, leased and managed operating facilities that are adjacent to, contain or are within protected or non-protected areas of value in terms of biodiversity.

Direct greenhouse gas emissions (scope 1).

Total water discharge by quality and destination.

Number and total volume of major spillages.

Weight of waste deemed hazardous under annexes i, ii, iii and viii of the Second Basil Accord transported, imported, exported or treated, and percentage of waste transported internationally.

From bodies of water and habitats significantly impacted by discharges and runoffs from the Company.

Total weight of waste by type and treatment method.

Indirect greenhouse gas emissions through energy generation (scope 2).

Other indirect greenhouse gas emissions (scope 3).

Emissions of ozone-depleting substances.

Nox, sox and other major emissions into the atmosphere.

Intensity of greenhouse gas emissions.

Reduction of greenhouse gas emissions.

Description of major impacts on the biodiversity of protected or non-protected areas of high biodiversity as a result of activities, products and services.

Number of species contained in the UICN red list and conservation lists in Mexico, whose habitats are located in areas impacted by operations, in accordance with the danger level of the species’ extinction.

Protected or recovered habitats.

Our premises are not located in protected or non-protected areas of value in terms of biodiversity.

Direct greenhouse gas emissions (scope 1): 642,228 tonnes CO2e.

Destination: Federal Water CorpsTreatment: Aerobic Process and Evaporation.

No major spillage event was reported.

The Company does not transport, import, export or treat hazardous waste.

N/A

18,785 Tonnes of hazardous waste278,309 Tonnes of non-hazardous waste.The method of waste disposal is determined by the contractor responsible for waste removal.

Indirect greenhouse gas emissions through energy generation (scope 2): 577,281 tonnes CO2e.

N/A

N/A

0.673 TONNES CO2e / TONNE Paper.

42, 43The organization undertakes greenhouse gas reduction initiatives through its energy co-generation projects in Durango and other programs currently underway.

N/A

N/A

MATERIALASPECTS


43

47


CATEGORY: SOCIAL PERFORMANCE

Aspect: Products and services

Aspect: Transportation

Aspect: General

Aspect: Vendor environmental evaluation

SUBCATEGORY: LABOR PRACTICES AND DECENT WORKAspect: Employment

Aspect: Occupational health and safety

Aspect: Training and education

G4-EN27

G4-EN28

G4-EN30

G4-EN31

G4-EN32

G4-EN33

G4-LA1

G4-LA5

G4-LA9

G4-LA6

G4-LA2

G4-LA3

Level of mitigation of the environmental impact of products and services.

Percentage of products sold and their packaging materials recovered at the end of their useful life, by product category.

Major environmental imposts of the transportation of products and other goods and materials used for the Company’s activities and staff transportation.

Breakdown of environmental expenditures andinvestments.

Percentage of new vendors examined based on environmental criteria.

Major actual and potential negative impacts on the supply chain, and measures taken.

Number and rate of new hires and employee turnover by age group, gender, and region.

Percentage of total workforce represented in formal joint management-worker health and safety committees set up to help monitor and offer advice on occupational health and safety programs.

Average annual training hours per employee, y sex and employment category.

Employees designated to help monitor and offer advice on occupational health and safety programs. Type and rate of injuries, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region and by sex.

Benefits provided to full-time employees that are not offered to temporary or part-time employees, by major operations centers.

Return to work and retention rates following pater-nal leave, by sex.

91% of the fiber registered as brown fiber, which includes paper, boxes, bond paper fiber and newsprint fiber.

Our commitment to sustainability is an essential concern that we integrate into all our operations, as demonstrated through the investments we made during 2014. These investments amount to approximately one billion Mexican pesos, which are channeled to initiatives including projects aimed at achieving better energy leverage and better recycling technologies in our plants.

N/A

N/A

100%

61-64 No work-related fatalities were

reported.

96%

MATERIALASPECTS


34-47

47

57

54

53

88

MATERIALASPECTS


SUBCATEGORY: HUMAN RIGHTS

Aspect: Evaluation of vendors’ working practices

Aspect: Complaint channels in relation to working practices

Aspect: Investment

Aspect: Child labor

Aspect: Forced labor

Aspect: Indigenous rights

Aspect: Evaluation

Aspect: Human rights evaluation of vendors

G4-LA14

G4-LA16

G4-LA15

G4-HR2

G4-HR5

G4-HR6

G4-HR8

G4-HR9

G4-HR10

G4-HR11

Percentage of new vendors examined based on working practices criteria.

Number of complaints regarding working practices filed and resolved through formal complaint channels.

Major actual and potential negative impacts on working practices in the supply chain, and measures taken.

Total hours of employee training on policies and procedures concerning aspects of human rights relevant to operations, including percentage of employees trained.

Identification of Centers and vendors with a significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor.

Centers and vendors with a significant risk of the emergence of incidents of forced labor, and measures taken to contribute to the effective abolition of all kinds of forced labor.

Total number of incidents involving violations of the rights of indigenous people, and actions taken.

Percentage and total number of centers that have been subject to human rights reviews and/or impact assessments.

Percentage of new vendors examined under human rights criteria.

Major actual or potential negative impacts on the supply chain in areas of human rights, and measures adopted.

N/A

No grievances were reported in relation to working practices

N/A

No centers and vendors with a significant risk for incidents of

child labor were identified.

No centers and vendors with a significant risk for incidents of

child labor were identified.

No incidents involving the violation indigenous people’s rights were

reported.

Aspect: Training and education

Aspect: Fair remuneration between men and women

G4-LA12

G4-LA13

G4-LA10

Composition of governance bodies and breakdown of the workforce by employment category, sex, age, minority group, and other diversity indicators.

Ratio of basic salary and remuneration of women to men by employment category and major operating locations.

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing the end of their careers.

55

54

29-33

29-33

27, 53, 54

53

55, 63, 65, 77


SUBCATEGORY: SOCIETYAspect: Local communities

Aspect: Channels for human rights grievances

G4-SO1

G4-SO2

G4-HR12

Percentage of centers with implemented local community engagement, impact assessments, and development programs.

Operation centers with major potential or actual negative impacts on local communities.

Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms.

Reported in the following sections: “Community Liaison”, “Environmental Performance”, “Our People” and “Code of Ethics”.

No centers with with major potential or actual negative impacts on local communities were identified.

No grievances were reported in relation to human rights.

SUBCATEGORY: PRODUCT RESPONSIBILITY

Aspect: Anti-corruption

Aspect: Evaluation of vendor social impacts

Aspect: Customer health and safety

Aspect: Customer health and safety

Aspect: Product and service labeling

Aspect: Marketing communications

G4-SO3

G4-SO4

G4-SO9

G4-SO10

G4-PR1

G4-PR8

G4-PR6

G4-PR3

Percentage and total number of centers analyzed for risks related to corruption, and major risks detected.

Policies and procedures for anti-corruption information and training.

Percentage of new vendors examined based on social impact criteria.

Major actual or potential negative impacts of the supply on society, and measures adopted.

Percentage of major product and service categories evaluated for their impacts on health and safety for the suggestion of improvements.

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

Sale of products that are prohibited or in dispute.

Type of product and service information and labeling required by the Company’s procedures, and percentage of major product and service categories subject to such information requirements.

Significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

N/A

MATERIALASPECTS


29

28, 29

29-33

29-33

31-33

31-33, 80

90

glOBAl COMPACt

Source: “Making the Connection: Using the GRI G4 guidelines to communicate progress on the UN Global Compact principles”, www.globalreporting.org

AREAS

PRINCIPALS OF THE GLOBAL COMPACT

RELEVANT GRI INDICATORSPAGES

FOR CONSULTATION

HUMAN RIGHTS

LABOR RIGTHS

ENVIRONMENT

ANTI-CORRUPTION

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

Principle 2 - Businesses shouldmake sure they are not complicit in human rights abuses.

Principle 3 - Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

Principle 4 - Businesses should uphold the elimination of all forms of forced and compulsory labor.

Principle 5 - Businesses should uphold the effective abolition of child labor.

Principle 6 - Businesses should uphold the elimination of discrimination in respect of employment and occupation.

Principle 7 - Businesses should supporta precautionary approach to environ-mentalchallenges.

Principle 8 - Businesses should undertake initiatives to promote greater environmental responsibility.

Principle 9 - Businesses should encourage the development and diffusion of environmentally friendly technologies.

Principle 10 - Businesses shouldwork against corruption in all its forms, including extortion and bribery.

G4- HR2, G4- HR5, G4- HR6, G4- HR9, G4- HR10, G4- HR11, G4- HR12

G4- 11

G4- HR6

G4- HR5

G4- 56, G4- HR2

G4- EN27, G4- EN28, G4- EN30

G4- SO3, G4- SO4

34-47

8, 29-33, 55

55, 59

51

48-60, 93

912014 Sustainability Report › Assurance letter

ASSuRANCE lEttER[G4- 33]

92

Our 2014 Sustainability Report forms part of the communications we have been rolling out annually over the past five years with our stakeholders in relation to the Company’s responsibilities, performance, achievement and contributions in the social, economic, environmental and governance spheres. The above is performed in full respect of our values and principles in our operations relating to stakeholder obligations, protecting social interests and environmental conservation, which allows us to contribute actively to building the common welfare.

Environmental performance indicators were calculated in accordance with the standards established by our Sustainability and Competitiveness area. This report also outlines the actions of the Human Capital, Occupational Health and Safety, and Social Responsibility areas in relation to social matters.

Further information on our economic performance is available in the 2014 Annual Report (http://biopappel.com/es/relacion-con-inversionistas/reporte-financieros), which describes our Corporate Governance practices and identified risks to business sustainability.

The activities performed during 2013 were reported using version 3.1 of the GRI guidelines. From 2014, we began reporting using the G4 version in full compliance with the criteria contained in the guidelines under the “Core” option, independently verified by Redes Sociales en L.T. S.A. de C.V. The information published corresponds to the published from January through December 2014 for all business divisions of Bio-PAPPEL S.A.B. de C.V. in Mexico and the United States: Kraft, Packaging, Printing and International. The report is aligned with the principles of the UN Global Compact, the Gender Equity Model (MEG) of the National Women’s Institute (INMUJERES), and the guidelines of the Sustainable IPC of the Mexican Stock Exchange, using the methodologies set out by EIRIS and Universidad Anáhuac.

We were supported and guided in the materiality, research, analysis, methodology and drafting of this report by McBride SustainAbility. Details on our compliance with the GRI are also available at www.biopappel.com.

ABOUT THIS REPORT[G4- 18, G4- 22, G4- 23, G4- 28, G4- 29, G4- 30, G4- 32]

93

In order to provide relevant information to our stakeholders on our activities performed over the period in question, we have structured our report as follows:

• Corporate Profile. Outlines all information on the business and its divisions.• Performance. Highlights our economic, environmental and social results, and the goals to be accomplished in 2015.

In 2014, we conducted a materiality study with the aim of identifying, prioritizing, validating and reviewing the aspects of major important for the Company and our stakeholders. Information over these matters was gathered during interviews with our leadership team, analysis of conversations with key audiences including our organizational climate questionnaire, and information published in the mass media on the sector, our Company and our stakeholders. The steps we followed in producing our materiality study were as follows:

1. Identification – Relevant aspects of internal and external interest.2. Prioritization – According to the level of maturity, risk and opportunity identified during the analysis of all information. 3. Validation – Approval of the leadership team for confirmation of relevant issues.4. Review – Definition of the continual improvement process to extend the participation of stakeholders.

MAtERIAlIty

2014 Sustainability Report › About this Report

G4-56

N/A

CULTURAL ALIGNMENTHIGH

AUTHORITy LICENSESAND PERMITS

COVERAGE

INDICATORSINTERNAL EXTERNAL

IMPORTANCE TOTHE COMPANy

MATERIALASPECTS

G4-LA10

G4-LA11

TRAINING AND DEVELOPMENT

MEDIUMPERFORMANCEMANAGEMENT

G4-SO1LOW COMMUNITyLIAISON

[G4- 18, G4- 19, G4- 20, G4- 21, G4- 23]

94

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

Daniela Rodríguez FernándezSocial Responsibility and Corporate Communications Manager

Bio Pappel, S.A.B. de C.V. Bio-PAPPEL TowerEjército Nacional 1130Col. Los Morales, Polanco 11510 Mexico City, Federal District

+52 (55) 912-66000

[email protected]

[G4- 7, G4- 31]

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