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The Embraer Annual Report 2022 contains the company’s main highlights of the year, including each Business Unit, Innovation, ESG, and financial performance
Embraer
Report
ESG
Business
Innovation
Financial
2022
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Message from the MANAGEMENT Francisco Gomes Neto The year 2022 was marked by overcoming the challenges and uncertainties that have ari- family, as well as in Executive Aviation and the Defense area. Moreover, the diversi昀椀cation sen on several fronts: the war in Ukraine, increased global in昀氀ation, and broad restrictions of business areas helped to compensate for the performance of a speci昀椀c segment. In this on the supply chain. These challenges led us to adjust internal processes throughout the way, the good performance of the Services & Support and Executive Aviation areas, as well year and, thanks to the focus and discipline of the entire team in the accomplishment of our as the increase in deliveries in Commercial Aviation, helped to offset the impact in the strategic plan, we were able to deliver the goals planned for the year. Defense & Security area. Compared to 2021, we increased aircraft delivery by 12.7% – from 141 to 159 Commercial At Commercial Aviation, we announced an additional order for Canada’s Porter Airlines and Executive aircraft in 2022. We also increased revenue by 8.2% to USD 4.5 billion. Ad- for 20 new E195-E2s, in addition to 30 existing 昀椀rm orders. Porter even took delivery of the justed EBIT and EBITDA margin (in USD) exceeded the guidance presented to the market, 昀椀rst E195-E2 jets operating in North America at the end of the year. We also announced an reaching 6.0% and 10.1%. Another highlight was free cash generation without EVE, which order from Azorra, a U.S. aircraft leasing company, for 20 new E2 jets, besides the expansion reached USD 540.1 million, quite above estimates. of our presence in the Middle East, with operator SalamAir from Oman ordering six E2s. The focus on improving business ef昀椀ciency remains a key factor in achieving our goals In addition, the Chinese civil aviation authority has granted certi昀椀cation for our E190-E2, and delivering better margins, even with supply chain constraints. Throughout the year, opening the doors of the relevant Chinese market for the E2 family. we implemented several mitigation measures, such as creating a special team to operate Executive Aviation presented another year with outstanding results, with the delivery of 102 within the main suppliers’ plants, developing alternative logistics routes, and improving aircraft, “book-to-bill2” above 1.8:1, and a higher gross margin than in the previous year. As internal processes to reduce production cycles. Also noteworthy are the efforts for con- a re昀氀ection of the good momentum of the business unit, Phenom 300 was voted for the 11th tinuous improvement of operational ef昀椀ciency, such as inventory turnover management, consecutive year as the world’s best-selling business jet in the industry. restructuring of selection and procurement processes, and ongoing improvement of pro- In Defense, we faced dif昀椀culties such as contract renegotiation and other factors that re- duction processes. sulted in a 25% decrease in segment revenue. However, we are optimistic for 2023 as the The sales growth of our current product portfolio also excites us for the coming years. The current geopolitical scenario continues to in昀氀uence countries around the world to review backlog returned to the pre-pandemic level, reaching USD 17.5 billion. There are several their plans and renew their armed forces. The main highlight of the year was the selection ongoing sales campaigns that are progressing, both in Commercial Aviation, mainly the E2 of C-390 Millennium by the Dutch Ministry of Defense as the only aircraft that meets the
requirements of its “Replacement Capacity Tactical Airlift” project, which provides for the SINCE 2008, EMBRAER IS A SIGNATORY AND REAFFIRMS ITS COMMITMENT “ acquisition of 昀椀ve tactical transport aircraft. Besides this, we announced with L3Harris TO THE UN GLOBAL COMPACT. IN 2022, WE MOVED FORWARD ON OUR JOURNEY Technologies a partnership to develop an “Agile Tanker,” a tactical aerial refueling option to TOWARD A LOW-CARBON ECONOMY AND A MORE DIVERSE COMPANY WHILE meet U.S. Air Force operational guidelines. MAINTAINING THE HIGHEST STANDARD IN CORPORATE GOVERNANCE. The service and support business continues to post positive results, with a growing order Francisco Gomes Neto - President of Embraer ” book and positive gross margin. The growth was based on the expansion of the sale of ma- terials (parts and support for special programs) thanks to a greater use of the Commercial and Executive Aviation aircraft 昀氀eet. The main driver of commercial aviation services were Lastly, it was with great joy that we received the “Great Place to Work” certi昀椀cation in seve- Pool Program contract renewals such as Blue and LOT Polish, as well as new customers, in- ral countries that we operate. For us, it is an important recognition to be celebrated, since cluding Porter Airlines, Sky High Aviation Services, and Western Air, operator of the largest we believe that engaged and passionate people achieve the best results and create a happy 昀氀eet of ERJs in the Caribbean. Another highlight is new contracts for more than 20 Breeze and healthy work environment. and Envoy Air Airframe Maintenance and Repair aircraft. For this year, despite persistent value chain constraints and global macroeconomic risks, In the innovation pillar, we have taken an important step to cement our performance in we see a better outlook in terms of revenue and pro昀椀tability. The aircraft slots on the pro- the start-up urban air mobility industry (UAM), which should represent a great business duction line for deliveries in 2023 and 2024 are almost completely 昀椀lled, for both commer- opportunity in the coming years. In May, we completed Eve’s spin-off by listing the company cial aviation and business jets. on the New York Stock Exchange. With a full portfolio of solutions for the UAM market, an Therefore, adding our focus and discipline in business ef昀椀ciency concerning innovation advanced electric vertical take-off and landing aircraft (eVTOL) design and a comprehen- projects to ongoing sales campaigns in all business units, we are very con昀椀dent in Embra- sive global service and support network, Eve ended 2022 with 26 publicly announced cus- er’s sustainable growth in this and the coming years. tomers, with potential orders for 2,770 vehicles valued at USD 8.3 billion, the industry’s largest backlog. Today we have a very comfortable cash position compared to previous years, a portfolio of Regarding our journey to a low-carbon economy and more sustainable aviation, we announ- top-notch products and services, and highly quali昀椀ed people. We demonstrate commit- ced the advances in the Energia Family program, which consummated the concept aircraft ment and discipline in accomplishing our strategy and resilience to meet the challenges into two models with a capacity of 19 to 30 seats, both with hybrid electric and hydrogen ahead. Besides, we continue to advance strategic partnerships for the business. electric propulsion. Furthermore, alongside Pratt & Whitney, we successfully tested a GTF- I would like to end with a strong thank you to the Embraer team, which once again showed -powered E195-E2 aircraft using 100% sustainable aviation fuel (SAF), the 昀椀rst step in the cer- commitment and dedication to overcome the challenges, always keeping the focus on qua- ti昀椀cation process to maximize emissions reduction with the use of sustainable aviation fuels. lity and safety, and also to our shareholders and customers for their trust in our company. We also project for 2024 our goal of using 100% renewable electricity in our facilities in Brazil, which account for about 70% of our total electricity consumption. In addition, we signed a memorandum of understanding with Raízen, of the Shell/Cosan group, to evaluate the sustainable aviation fuel (SAF) production market in Brazil – contributing not only to our Francisco Gomes Neto - President of Embraer emissions, but to the entire aviation industry in the country. Alexandre Silva - Chairman of the Board of Directors
CLICK TO GO TO THE INTENDED SUBJECT TABLE OF CONTENTS All pages in this 昀椀le are browsable: menus and pagination. About Fit For Growth ESG Business 06 12& FINANCIAL 15COMMITMENT 36INNOVATION 48 EMBRAER PERFORMANCE TO THE FUTURE UNITS 7. Introduction 13. Introduction 16. Introduction 37. Introduction 49. Commercial Aviation 8. Where We 14. Operating 17. Environmental Commitment 38. Awards | Highlights 51. Executive Aviation Are Result 39. Innovation Verticals 56. Defense & Security 21. Social Commitment 9. Our values 32. Commitment to Governance 43. Innovation Culture 61. Services & Support 10. Timeline 45. Embraer-X 65. Agricultural Aviation 46. Beacon 47. Eve Air Mobility Sustainability INDICATORS 67. Technical References, Materiality, Indicators, GRI, SASB, TCFD
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About EMBRAER 6
RELATÓRIO ANUAL / 2022 ABABOUOUTT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBREMBRAERAER FINANCIAL PERFORMANCE UNIT INDICATORS ONE OF THE Embraer is one of the world’s largest aerospace and defense conglomerates. On average, every 10 seconds an aircraft ma- NET REVENUE LEADERS nufactured by the company takes off from an airport, annually in the aerospace carrying more than 145 million passengers around the world. US$ 4,5 and defense Leader in the segments in which it operates in the Commercial BILLION industry Aviation, Executive Aviation, Defense & Security, Services & Support markets and with more than 8,000 aircraft manufac- GRI 2-1; 2-6 tured and delivered throughout its history, Embraer has been Embraer is the main ex- an exponent of innovation since its inception in 1969, and has porter of high value-added in this strength its critical pillar for sustainable growth. There- goods in Brazil, with in- fore, the company fosters an ecosystem of knowledge genera- dustrial operations, of昀椀- tion and dissemination that stimulates the quality training of ces, service centers, and its collaborators, increases the competitiveness of the aero- parts distribution in the nautical industry, furthers scienti昀椀c development, and positi- Americas, Africa, Asia, and vely impacts the society as a whole. Europe. At the end of 2022, Embraer’s workforce was made up of 18,872 Of total net revenue, Com- collaborators, of which 14,960 in Brazil and 3,912 abroad. The mercial Aviation accounted reported total includes OGMA employees. for 34%, Executive Aviation 27%, Defense & Security 10%, Services & Support 28%, and 1% of other rela- 145 MILLION ted businesses. At the end of the year, the PASSENGERS portfolio of 昀椀rm orders to be delivered reached USD ARE CARRIED ANNUALLY AROUND 17.5 billion. THE PLANET ON OUR AIRCRAFT 7
ABOUT RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBRAER EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS 6 5 8 7 2 4 11 3 9 10 WHERE 1 we are GRI 2-1 1 2 3 4 5 6 7 8 9 10 11 Brazil United Mexico Portugal United Ireland France Netherlands Arab Singapore China São José dos Campos States Chihuahua Alverca Kingdom Dublin Le Bourget Amsterdam Emirates Singapore Beijing Gavião Peixoto Mesa Subsidiary: Subsidiary: Farnborough Dubai Botucatu Nashville EzAir OGMA Subsidiary: Taubaté Melbourne Interior Embraer Cae Brasília Irwindale Training Services Belo Horizonte Fort Lauderdale São Paulo Davies Rio de Janeiro Jacksonville Sorocaba Memphis Campinas Dallas Subsidiaries: Subsidiaries: Atech Embraer Cae Visiona Training Services Tempest Eve 8
RELATÓRIO ANUAL / 2022 ABABOUOUTT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBREMBRAERAER FINANCIAL PERFORMANCE UNIT INDICATORS Our VALUES Ethics and integrity Our people are what We are here to serve We strive for company are in everything we do make us 昀氀y our customers excellence From the simplest activities Happy, competent, valued, Winning the loyalty of Corporate action designed for Embraer’s values were built to the greatest achievements. ful昀椀lled people, committed customers by ensuring their simplicity, agility, 昀氀exibility, and collectively, involving collabo- We follow the rules and to what they do. People complete satisfaction, and security, with a constant drive to rators around the world, and question when necessary, who work as a team and act building strong and lasting continual improvement and to bring the deepest and most always in search of what is with integrity, coherence, relationships. Establishing excellence. An entrepreneurial compelling view of what is in right and best for society, respect, and mutual trust. partnerships, based on real attitude based on integrated the company’s business. They for the company and for all. commitment and 昀氀exibility. planning, responsible delegation, form a solid base, founded on and disciplined execution. ethics and integrity, from whi- ch Embraer will always deve- Boldness and innovation Global presence We build a lop science and technology, are our hallmarks is our frontier sustainable future generating value for its cus- The forefront in technology, Global presence and Constantly striving to tomers, shareholders, colla- an organization that learns mindset, acting locally to build the foundation for borators, society, and other continuously, and has the leverage competitiveness, the company’s longevity, stakeholders. capacity for innovation, using the best of each considering stockholders’ for transforming inner location. Vision of a world pro昀椀tability, respect for reality and in昀氀uencing without borders and of quality of life, environment the markets in which it valuing diversity. and society. SENCEoperates. Strategic vision and capacity to overcome challenges, with creativity S and courage. E 9
RELATÓRIO ANUAL / 2022 ABABOUOUTT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBREMBRAERAER FINANCIAL PERFORMANCE UNIT INDICATORS How did we get here? TIMELINE 1983 1996 1994 1968 1975 1969 1978 1985 1960 1970 1980 1990 1965 – Start of the IPD/PAR-6504 1970 – Start of 昀氀ight testing of 1983 – Presentation and 1st 昀氀ight of 1994 – Privatization of Embraer. project, a light transport aircraft the Ipanema agricultural aircraft. EMB 120 Brasilia, regional turboprop 1996 – First delivery of EMB 145, for military and civilian use, at the 1975 – First export. Uruguay with capacity for 30 passengers. later renamed as ERJ 145. A new Aeronautics Technical Center (CTA), in receives the Bandeirante plane 1985 – Presentation and 1st 昀氀ight family of regional jets emerges. São José dos Campos, State of São Paulo. and the Ipanema agricultural plane. in Brazil of AMX, subsonic 昀椀ghter 1968 – Named Bandeirante, the aircraft developed in partnership with Italy. 1999 – Pre-launch of the performs its 昀椀rst 昀氀ight. 1978 – Brazilian Air Force (FAB) EMBRAER 170/190 program, a hires Embraer to develop the 1989 – Start of the EMB 145 project, new family of business jets between 1969 – Embraer is created to further EMB 312 Tucano, a basic military regional jet aircraft for up to 70 and 120 seats. the development of the Brazilian training aircraft. 50 passengers. aeronautical industry, with the initial activity being the series production of Bandeirante. 1010
RELATÓRIO ANUAL / 2022 ABABOUOUTT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBREMBRAERAER FINANCIAL PERFORMANCE UNIT INDICATORS 2021 2017 2018 2001 2004 2018 2019 2022 2005 2000 2010 2020 2001 – Launch of PEE (Specialization Engineering 2017 – Creation of the Services & Support 2020 – Performance of the plan to protect Program), a master’s program in partnership with ITA area, a new organizational structure dedicated people and overcome the global crisis caused (Technological Institute of Aeronautics), as well as to supporting Embraer aircraft operators by the pandemic. the Embraer Institute. and offering agnostic services. 2021 – Embraer strengthens its ESG 2004 – Start of deliveries of jets of the EMBRAER 2018 – Presentation of Praetor 500 and commitment by introducing a group of 170/190 family, recognized worldwide as the E-Jets. Praetor 600 business jets. Start of deliveries sustainable initiatives, with goals of diversity, 2005 – Launch of the Phenom 100 and Phenom of the second generation of E-Jets, the E2. inclusion, governance, and emission reduction. 300 jets. After a successful experience with the 2019 – Delivery of the 昀椀rst KC-390 to FAB. 2022 – IPO of EVE, the 昀椀rst company incubated Legacy jet, Embraer reasserts its commitment to the It is the beginning of the operations of the by Embraer-X, and dedicated to accelerating Executive Aviation market, expands its portfolio, most sophisticated aeronautical project the Urban Air Mobility (UAM) ecosystem. and expands its global customer support network. developed in Brazil. 11 11
Fit for Growth & FINANCIAL PERFORMANCE 12
ABOUT FIT FOR GROWTH & BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS FINANCIAL PERFORMANCE Fit for Growth & FINANCIAL PERFORMANCE GRI 201-1 In 2022, Embraer exceeded the 昀椀nancial indicator forecasts dis- COMMERCIAL AND EXECUTIVE closed at the beginning of the year: Adjusted EBIT, Adjusted EBI- TDA, and Free Cash Flow. Results that re昀氀ect better operational 159AIRCRAFT ef昀椀ciency compared to previous years. DELIVERED IN 2022 Compared to 2021, the company increased the delivery of Com- mercial and Executive aircraft by 12.7%, from 141 to 159 aircraft in 2022, posting a revenue of 8.2% (in USD) higher. Detailed results of the company’s 昀椀nancial performance are available in the Ma- nagement Report. Learn more: Financial Statements (only in Portuguese) Release of Deliverables and Backlog 1313
ABOUT FIT FOR GROWTH & BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS FINANCIAL PERFORMANCE OPERATING INCOME TOTAL NET REVENUE In 2022, the adjusted result and operating margin (EBIT) were USD 270.3 million and 6%, US$ 4,5 BILLION respectively. 8.2% higher (USD) than in 2021 The increase of about 13% in the number of de- liveries of Commercial and Executive Aviation, Revenue by Segment Revenue by Region with a consequent increase in its revenues, Net Rev. USD Billion Net Rev. USD Billion the increase in average prices coupled with a 4,2 4,5 4,2 4,5 more favorable product mix and cost control 3% measures largely explain the better pro昀椀tabili- 4% ty posted in 2022 vis-à-vis 2021. 11% 11% 1% 1%2% Embraer’s shares have been listed on the 5% Novo Mercado Listing of the São Paulo Sto- ck Exchange (B3) since 1989 and on the New 19% York Stock Exchange (NYSE), through the level 27% III American Depositary Receipts (ADRs) pro- gram, since 2000. At the end of 2022, Embraer’s shares traded on B3 - EMBR3 – were quoted at BRL 14.31, a 42% 63% Others devaluation compared to BRL 24.82 at the end 52% Brazil of 2021. The American Depositary Shares (ADSs) Services & Support Asia-Paci昀椀c listed on NYSE - ERJ – reached a price of USD Defense & Security Latin America Executive Aviation Europe 10.93, accounting for a devaluation of 38% com- Commercial Aviation North America pared to USD 17.75 in the previous year. 2021 2022 2021 2022 14
Commitment to THE FUTURE 15
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Embraer maintains its sustainability strategy and planning, announced at the end of 2021, with long-term ESG goals. Focused on decarbonizing aviation through the development of more sustainable products, services, and technologies, as well as strengthening its historical performance E / Environmental in social responsibility, the company advanced and, in 2022, its goals evolved and achieved concrete results on several fronts. S / Social G / Governance GRI 2-22; 3-3; RT-AE-410a.2 Carbon neutral Maintain Maintain Commitment to Provide professional 100% Carbon Products for growth from the Ethics & the highest 50% diversity in quali昀椀cation in electricity neutrality in zero-carbon 2022 Compliance international hiring across all technology for from operations aviation Program, fully standards of gateway programs 1,500 people from renewable until 2040 by 2050 aligned with global governance by 2025 minority groups by sources by standards 2025 through the 2030 Social Tech Program 2022 2025 2030 2040 2050 Continuous training in Maintain the approval of Maintain high product Have 25% of women Have 20% of fety standards Diversity & Inclusion more than 80% of Embraer sa in Embraer’s women in senior Learn more: high school students in and full alignment Master’s Program leadership Sustainability public or private universities with international in Aeronautical positions by 2025 Indicators with a full scholarship requirements Engineering by 2025 16
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS ENVIRONMENTAL Commitment RENEWABLE ENERGY In 2022, the company signed a power purchase agreement that ensures that 100% of the electricity acquired by Embraer in Brazil is from renewable, wind, and solar sources, starting in 2024. With this agreement and the acquisition of Renewable Energy Certi昀椀cates (RECs), Embraer will zero its Scope 2 carbon emissions in Brazil one year earlier than announced in its corporate goal. Electricity consumption in its operations in Brazil accounts for about 70% of the total consumed in all its operations around the globe. In 2022, assessments Learn more: and discussions were also started with the teams in Portugal and the United Sustainability States so that, by 2030, 100% of the electricity consumed by Embraer will be from Indicators renewable sources in all its operations worldwide. 171717
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS CARBON NEUTRALITY Embraer focuses on three main actions to achieve carbon neutrality of its operations by 2040. They are: Energy ef昀椀ciency Use of 100% electricity from Increased use of SAF* on test of its operations renewable sources and demonstration 昀氀ights *Sustainable Aviation Fuel As concerns energy ef昀椀ciency and use of electricity 100% from renewable sources, in 2022 several initiatives were implemented, with special emphasis on: Solar heating installation at the Changes in processes and automation of machines Installation of photovoltaic panels in the Ede unit Gavião Peixoto unit at the Ozires Silva unit The Embraer Equipment Division (EDE), a unit dedicated to the ma- The installation of solar panels at the Gavião Two relevant efforts were implemented at the Ozires nufacture of landing gear in São José dos Campos, São Paulo, recei- Peixoto unit was carried out with a view to Silva unit to reduce electricity consumption: ved the installation of photovoltaic solar panels in one of its adminis- supplying heated water to its restaurant. The trative buildings. This technology is capable of transforming sunlight photothermal solar panel is a highly ef昀椀cient • One of them was dedicated to reviewing the process of into electricity, and estimates are that power thus generated will be and widely used technology in Brazil, capable heat treatment of metal parts manufactured in the com- suf昀椀cient to supply the building, producing around 42 MWh, poten- of converting sunlight, an in昀椀nite and free pany, which occurs in a large air furnace and requires tially avoiding up to ten tons of carbon in the atmosphere per year. source of energy, into heat. Estimates are that large amounts of power, especially when starting the this project will reduce each year approxima- device’s use. At no cost and with a potential reduction Use of biomethane gas in the Gavião Peixoto unit tely 40,000 m3 of natural gas consumption of up to 218 MWh of electricity per year, they represent and avoid the emission of about one hundred around sixteen tons of avoided carbon emissions. In 2022, the company implemented a pilot project to replace tons of carbon (CO2e) into the atmosphere. • And the other consisted in creating a strategy of automa- natural gas (non-renewable source) with biomethane in several tic activation and disconnection of the machining ma- production processes at the Gavião Peixoto unit. Biomethane is a Practices similar to this have already been im- chines. This initiative required a change in the operating renewable source gas, generated in the process of decomposing plemented at the Ozires Silva and Eugênio de logic of the machines and implies a reduction in annual organic matter. Melo units in Brazil, and are strategically linked electricity consumption of up to 145 MWh per year, avoi- Comparative analyses of the performance of equipment and sys- to Embraer’s emission reduction targets. ding the emission of, on average, ten tons of carbon into tems were carried out, with a positive outcome that will serve to the atmosphere. replicate the project in other units and production processes. 18
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Regarding the use of SAF, the goal is to account for 25% of tot al fuel use by 2040. As the production of SAF in ADVANCES TOWARDS ZERO-CARBON AVIATION Brazil is still zero, Embraer initiated a process for procu- rement of this product in the United States, for Melbour- Embraer plans, for 2026, its fully electric 100% SAF-compliant, this aircraft is destined ne site operations*. and zero emission vertical take-off and to revolutionize the industry, reducing CO2 landing vehicle, the eVTOL, which will emissions by up to 15% compared to others be able to transport passengers through in the industry. In current projections, the Purchase of SAF cargo cities, transforming urban mobility. As for company predicts that the new turboprop In July 2022, Embraer and Raízen (a global bioenergy Commercial Aviation, the company intends will start operating in 2028. company) signed a Letter of Intent with the commit- to make the 昀椀rst 昀氀ight of its hydrogen-elec- By 2045, the 昀椀rst 昀氀ight of Embraer’s hy- ment to further the development of the sustainable tric demonstrator by 2025. drogen-powered turboprop is expected aviation fuel production ecosystem – SAF, thus rea- Another step towards more sustainable to occur. For 2050, the goal is to have E2 f昀椀rming the sustainability agenda of both companies. aviation is the next-generation turboprop powered by hydrogen or similarly sized air- Among all intentions, Embraer seeks to become the program. In early stages of development, and craft soaring to the skies. 昀椀rst company to use this fuel to be produced in Bra- zil, which may be distributed by Raízen. This initiative bene昀椀ts the air transport industry worldwide, and the use of this type of technology is a pivotal part of Embraer’s strategy regarding carbon neutrality in operations until 2040. Learn more: Learn more: Purchase of SAF cargoes eVTOL Energia Family 19
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS E195-E2 IS THE MOST SUSTAINABLE aircraft in its category EMBRAER’S E195-E2 AIRCRAFT IS THE QUIETEST AND MOST EFFICIENT IN THE WORLD Operating on short- and medium-haul routes, E2 has the lowest external noise levels and As the aircraft consumes less fuel, it has greater E195-E2 is the most ef昀椀cient aircraft on the longest maintenance intervals in the single-aisle 昀氀ight range while being 50% quieter and emitting market, and considered the most sustainable in jet category: 10,000 昀氀ight hours for basic checks up to one-third less carbon dioxide. The economy its class, with a 25% lower fuel consumption than and no time limit for typical E-Jets operations. This of E195-E2 coupled with its comfort allows the the previous generation, and 17% lower emissions. means an additional 昀椀fteen days of use over a ten- operator to increase capacity and delight their year period compared to the current generation. customers. Learn more: Aircraft E2 2020
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS SOCIAL Commitment GRI 405; 3-3 Embraer seeks to be a plural and human company that respects the individualities of each collaborator. Valuing characteristics and behaviors, the company praises that every human being is part of a process, and always seeks to offer the necessary support for its collaborators to perform their assignments with a sense of belonging. With a focus on the inclusion and representativeness of all people, and efforts directed at minority or underrepresented groups to be part of the company in a genuine way, Embraer has corporate goals for Diversity & Inclusion and makes this a cornerstone of its culture. Learn more: Sustainability Indicators 212121
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS TALENTS Inspired by all the learning gathered over the critical period of the Covid-19 pandemic, 2022 saw the implementation of new work models, focusing on the hybrid model, in which part of the professionals work in person and part remotely. The company realized the need to support its leaders and collaborator, so that this adaptation was ef昀椀cient, changing new behaviors into new habits. THE FUTURE OF WORK TALENT ATTRACTION AND RETENTION GRI 401-1 In 2022, the company created a global project entitled “Future of For Embraer, attracting and retaining the best talent are primary Work,” managed based on an Agile methodology (based on the goals. In 2022, Embraer had more than two thousand and seven Scrum framework) with weekly sprints, and engaging more than hundred vacancies 昀椀lled. The company carried out an active sear- 50 collaborators, who represented Embraer’s major areas. ch for the best candidates, especially on the LinkedIn platform, in Diagnostics and adjustments were made in different processes addition to being present at fairs and career events at institutions to improve the experience of collaborators, who were working such as ITA (Technological Institute of Aeronautics), POLI USP 100% remotely or hybrid, in addition to guiding their leaders in (Polytechnic School of the University of São Paulo), UFMG (Fede- the management of teams and supporting the business needs in ral University of Minas Gerais), and other relevant universities in the face of changes in the current corporate world. Brazil, thus advancing the selection process with interviews and simultaneous hiring. This selection process model, called selec- The concept of asynchronous communication (non-simultaneous tion sprints, resulted in swift hiring for various positions in pro- communication) has been implemented as a capital point of duction and production support areas. mindset change within the company, being essential for hybrid Alongside the personnel of Talent Acquisition, Information Tech- work, fostering transparency, and avoiding excessive meetings nology, Medical Team, and Payroll and with the support of an ex- and interruptions. ternal partner, the company mapped the journey of the new Em- The project made the company review new work scenarios that, braer collaborator, in order to assess the possibilities of improving connected to the business vision, the pillars of culture and the the hiring process. With this initiative, newly hired collaborators expectations of collaborators, allowed to build an adaptive and and leaders were interviewed with the purpose of better unders- bold work model. tanding customer experience, using Design Thinking techniques for interview and user journey. 22
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GATEWAYS, INTERNSHIPS, AND YOUNG APPRENTICES GRI 404; 405; 3-3 WORKING MODELS In 2022, Embraer’s Internship Program 昀椀lled 昀椀ve Overall, forty collaborators attended Data Scien- hundred vacancies in two cycles and is expected ces subjects, and 昀椀fty-one collaborators took the to 昀椀ll another three hundred vacancies in the 昀椀rst subjects on Embedded Software. In December ON-SITE: Five days in person half of 2023, with a new cycle of applications 2022, the class was concluded with the approval (productive areas and production for candidates from all over Brazil. In addition, of the thirty-昀椀ve professionals, thirty-three of support) the Summer Internship was also launched, with whom were hired by Embraer. thirty vacancies and a duration of two and a half Embraer’s goal is to draw the new generation of months with opportunities in several areas, and in aviation talent and provide candidates with great HYBRID: On-site + Remote face-to-face, hybrid, or 100% remote work models. convenience and experiences, in a diverse and (up to two days in person) Embraer, in concert with Senai (National Service inclusive environment, so that each professional for Industrial Training) for young apprentices, becomes the main player in their own development opened new classes in 2022, with about two and career. 100% REMOTE: Five days remote hundred participants in the São Paulo cities of Gavião Peixoto, Botucatu, and São José dos Campos. It also maintained the partnership for Based on these three models, the FORMARE, a professional quali昀椀cation program company tested and validated the aimed at young people in situations of economic foundations of Future of Work, such as and social vulnerability, earmarked for logistics updating employment agreements, how students in the city of Gavião Peixoto. to offer infrastructure services such Also in 2022, the 昀椀rst class of the Software as food and transportation, as well as Specialization Program – PES was formed. Held issues of home-of昀椀ce allowance and in partnership with UFPE (Federal University of assistance during the pandemic. Pernambuco), this is a Non-Degree Graduation Program in Embedded Software and Data Science, with subjects taught by professors from UFPE and with the participation of Embraer professionals. 23
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GPTW CERTIFICATION LEADERSHIP ACADEMY GRI 404; 3-3 Embraer has been In 2022, the company carried out continuous All new company leaders also undergo training, which recognized as one actions for the development of its leaders. Wi- includes understanding all company processes, of the best com- thin the “Leadership Academy”* topics were people management, and culture. In 2022, there panies to work in worked on Culture, People Cycle, Business, Fu- were three classes of new leaders. a survey performed by Gre- ture of Work, and Diversity. For the Future of The portfolio of training performed in 2022 is extensive at Place to Work®, a global Work topic, the company combined efforts to and covered speci昀椀c training on Diversity and Inclusion, consulting 昀椀rm that supports customize a global training on hybrid manage- Culture, Compensation, Con昀椀dential Processes, and organizations to achieve the ment for supervisors and managers. Senior lea- Communication, the latter focusing on “communicate best results through a cultu- ders were also trained to be facilitators of this to lead.” Overall, there were one hundred and re of trust, high performance, topic for new leaders. sixty-six training classes for leaders, totaling and innovation. almost 昀椀ve hundred hours of training. The GPTW Certi昀椀cation was Learn more: * Development program in management, launched in Brazil in 1997 as Talent Management leadership, and innovation. a seal that recognizes organi- zations that develop a work of excellence with their colla- borators. One of the highlights in the sur- EMBRAER CULTURE vey was Embraer’s contribution In 2022, the company made important advances in the evolution of its culture. All to society. Leader of an indus- company’s leaders and collaborators participated in training and a number of enga- try deemed strategic owing to gement and communication efforts, which prompted re昀氀ection and strengthened the the cutting-edge technology it movement of change for an increasingly integrated company, with diversity and inclu- develops, the company gathers sion, focused on results, agile and ef昀椀cient. The leap in this evolution could be quan- talents with high capacity to ti昀椀ed through the engagement survey, carried out in concert with Great Place to Work. generate innovations with po- In just one year, the company had an increase from 72% to 78% in overall favorability sitive impacts on the economy. in relation to the topic, in the perception of more than 8,000 collaborators worldwide. 2424
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS DIVERSITY & INCLUSION GRI 405; 3-3 Embraer values the history and particularities of people, so it always seeks to build diverse teams, with initiatives aimed at the inclusion of underrepresented groups. Wi- thin the company, it is important that all people are represented, both in the staff and especially in leadership positions, regardless of their characteristics. Social Tech GRI 401; 404; 405 reated in 2021 in partnership with the Institute of Management and Information Technology (IGTI) with a view to fostering the professional quali昀椀cation of minority or underrepresented groups. In its 昀椀rst edition, Social Tech had as participants people with disabilities and, in 2022, the program continued, this time aimed at black people, with more than ten thousand candidates for a thousand vacancies. Throughout the course, which provided two hundred and forty-four hours of study, students learned to work with the Python programming language, which has applications in data science, arti昀椀cial intelligence, and automation, through the bootcamp methodology*. Participants make up the talent pool of Embraer and partner companies in future selection processes. Besides being relevant to the market, Social Tech is a program that integrates the company’s af昀椀rmative actions. *Type of immersive training destined for the development of important skills in several areas. Course with 244 HOURS IN PYTHON PROGRAMMING LANGUAGE. 2525
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS EMpower Women GRI 401; 404; 405 In 2022 Embraer has the corporate goal of having 20% of women in the company’s senior leadership by 2025. To pave the way 16% for such achievement, the company created, in 2022, the OF Women’s Training Program with a focus on accelerating the development of their careers. WOMEN This training takes place within the company’s corporate HELD MANAGEMENT training platform, which provides continuous development POSITIONS programs and training for the entire company. The program’s 昀椀rst class will start in February 2023. Learn more: Ecosystem Accelerating Careers Embraer participated in the 33rd Annual Conference of Women in Aviation (WAI) in Nashville, USA, and the 34th Conference of the International Association of Women in Aviation (IAWA) in Lisbon, Portugal. Both events aimed to further, support, discuss, and expand the presence of women and their careers in this mostly male segment, globally. 2626
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE ESG INNOVATION UNIT INDICATORS EMBRACE GRI 404; 405 1ST INTERNATIONAL Embraer’s voluntary, colla- WOMEN’S CONGRESS borator -driven af昀椀nity group ON STEAM or ERG (Employee Resource Embraer participated in the 1st Group) created in 2019 to International Congress of Women welcome underrepresented in STEAM (Science, Technology, groups and diversity, equity, Engineering, Arts, and Mathema- and inclusion agenda in the tics), held at the Technological company. Through actions and Park of São José dos Campos, initiatives structured around São Paulo. The event, organized the commemorative dates for alongside professors from the Te- these groups, throughout the chnological Institute of Aeronau- year, the agendas raised by tics (ITA), aimed to strengthen the Embrace were addressed. connections among scholarship, At Embraer Brasil, the groups industry, and political agents to represented by the program are: internationally further initiatives targeted at Science, Technology, • Women and Innovation (ST&I) that rely on • Persons with Disabilities the performance of women. Du- ring the congress, Embraer and • Black People Embraer-X presented an interac- • LGBTQIA+ people tive exhibition on women working in the company’s innovation, en- gineering, and technology areas. 27
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS WORKER SAFETY AND HEALTH GRI 403; 3-3 SAFE ENVIRONMENT PROGRAM At Embraer, safety always comes 昀椀rst, A new Integrated and Cooperative Sys- Present at Embraer since 2018, the program aims to address whether in the products offered or in tem, which includes Global, Regional, occupational safety with preventive data that can be contri- the operations carried out. The com- and Local Management, was created in buted by anyone, whether collaborators, contractors or visi- pany has a set of prevention practices 2022, aiming at synergies so that all data tors. The insertion of information happens via cell phone or to protect collaborators from occupatio- and information is treated more actively computer through QR Codes spread throughout the company. nal risks and accidents, providing a safe and objectively, integrating the work of all Any and all unsafe situations spotted by any person should be and healthy work environment, with the units of the company around the world. reported through the program, for latter handling and resolu- best conditions for everyone to perform Seeking to increase the well-being of tion in the shortest possible time. their tasks. the team that operates in the company’s In this manner, the company maintains a tracked database Occupational safety indicators are as- operations, Embraer invested in innova- with all reported situations and their resolutions, thus being sessed monthly under the supervision of tion and purchased its 昀椀rst exoskeletons, able to act in the prevention of accidents and incidents, the company’s leaders, both in organiza- robotic equipment that help the human making the environment always safe. tional visibility meetings with the boards body to develop certain tasks, in addition In 2022, the process of unifying platforms of this program be- and in Board of Directors’ meetings. to assisting in human joints. Dressing the gan, making it even more agile and robust. equipment brings support to movements and reduces the need for human stren- gth, collaborating with the team’s safety WELL-BEING PROGRAM GRI 403 and ergonomics. *Environment, Health and Safety. The Well-Being Program contributes to a better quality of life for active collaborators, direct dependents, and interns. In order to reduce health risk factors, the program encou- rages the practice of bene昀椀cial habits and provides facili- tating means in order to introduce a healthier lifestyle into Learn more: daily life. In 2022, twenty-seven thousand people were im- Sustainability Indicators pacted by the vaccine bene昀椀t, including collaborators and their dependents. 28
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GRI 413 CORPORATE SOCIAL RESPONSIBILITY For more than 20 years the Em- dents in Science & Technology, in braer Institute has supported addition to fostering social inclu- education in Brazil to build a fairer sion through a healthy competi- and more inclusive country, main- tion that generates knowledge. taining two full-time high schools In addition, the schools achieved for students from public schools a remarkable result of students and low-income households in approved in the entrance exam, São José dos Campos and Botu- with 75% of approval in public or catu, in the State of São Paulo. private universities with scholar- To them, a contingent of paying ship. students (20% of the total student body) is added, reaching a total of Another major initiative of the 800 students in 2022. Embraer Institute revolves around The resumption of face-to-face the response to climate emergen- school classes was one of the cies. The Institute joined the cam- high points of the year 2022. With paign to donate necessity goods, this, new programs were laun- integrating into the hall of organi- ched, such as the 1st edition of zations that sent aid for the 昀氀oods the Embraer Institute of Science that struck the state of Pernam- and Technology Olympiad, targe- buco in 2022, serving more than ted at furthering the interest of 1,000 people of the area’s vulne- elementary and high school stu- rable population. 2929
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GRI 413 VOLUNTEER PROGRAM The Asas do Bem volunteer program mo- DIVERSE SCIENCE bilized collaborators, who presented the The Embraer Institute held factories of São José dos Campos, Bo- the second edition of Ciência tucatu, Eugênio de Melo, and Sorocaba Diversa, a program to encou- to students, contributing to the dissemi- rage the formation of groups nation of aeronautical culture in the re- underrepresented in Science gions where Embraer conducts business. & Technology. In 2022, the In 2022, 440 students visited the com- topic addressed was “Black pany’s production units. People in Science,” with a focus on non-pro昀椀t Civil So- Since the start of operations in 2001: ciety Organizations (CSOs) that develop projects for bla- + ck and mixed-race people. 8 THOUSAND PEOPLE The social action invested IMPACTED BY THE ACTIONS OF BRL 380,000 in two institu- ENGAGEMENT WITH SOCIETY tions that perform activities + aimed to encourage training 4 THOUSAND STUDENTS in STEM areas (Science, Te- GRADUATED FROM EMBRAER SCHOOLS chnology, Engineering, and Mathematics) and that have of a minimum of 60% of black 75% STUDENTS people and aged between 6 APPROVED AT TOP UNIVERSITIES and 24 years among the be- ne昀椀ciaries. The organizations Learn more: chosen will perform the pro- Sustainability Indicators jects in 2023. 3030
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RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GRI 413 EMBRAER FOUNDATION IN 2022 In order to cement its corporate social responsibility strategy in the United 40 States, Embraer created in 2016 the Embraer Foundation, sister organiza- ORGANIZATIONS tion of the Embraer Institute, which RECEIVED SUPPORT operates on three fronts: volunteering, FROM THE EMBRAER social and environmental partnerships, FOUNDATION and entrepreneurship. TO CARRY OUT The pillars are aligned with the Com- PROJECTS pany’s global social responsibility stra- tegy and respect the particularities of social investment in the United States. In 2022, more than 400 volunteers en- gaged in the social activities developed by the Foundation, totaling about 3,300 hours. In the partnership pillar, 40 orga- nizations received support from the Em- braer Foundation to carry out projects. Learn more: Embraer Foundation 3131
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Commitment to GOVERNANCE Embraer seeks to ensure the highest level of corporate integrity and ethics in all its businesses. The corporate governance model adopted has a business management focused on sustainable growth, meeting the highest Brazilian and international market standards. RANKING FIRST IN GOVERNANCE In 2022, Embraer S.A. ranked 昀椀rst in corporate governance in the survey of the Época Negócios 360º Yearbook, which aims to identify and disseminate the best business practices in Brazil. Conducted in concert with Fundação Dom Cabral, the ranking recognizes the best in each of the six dimensions of the survey – 昀椀nancial performance, corporate governance, innovation, people, sustainability, and vision for the future. The 2022 edition of the yearbook presented a record number of registrations, with four hundred and twenty participating companies divided into twenty-昀椀ve sectors, and recognized the company’s Corporate Governance practices, which are established to the highest international standards. 323232
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS ETHICS AND COMPLIANCE GRI 3-3; RT-AE-510 COMPLIANCE PROGRAM PILLARS Embraer’s Compliance Program initiatives are based on risk assess- ments, which serve as a starting point for strategic planning applied to • Corporate Governance • Monitoring and assessment the program’s pillars. The purpose of strategic compliance planning is to • Risk Management of compliance risks ensure that all initiatives are aligned and incorporated into the company’s • Compliance in relationships with operations, according to the risk assessment carried out. • Policies and Procedures Third Parties • Training and Communication • Audit and Continuous Improvement • Helpline COMPLIANCE PROGRAM GOALS To foster a culture of ethics and integrity ba- KAIZEN & OFFICE FLOOR MANAGEMENT sed on Embraer’s Values and Code of Ethics 1and Conduct, as well as the anti-corruption The Kaizen philosophy – which means continuous improvement in laws applicable to the company. Japanese – is already adopted by Embraer in its production processes, and is now also part of its Compliance Program. This is the 昀椀rst administrative area of the company to work on a pilot project called To support Embraer’s other Compliance Of昀椀ce Floor Kaizen, which was conducted in three of its departments in preventing main processes: Due Diligence, Know Your Customer, and Hospitality. 2risks, spotting red flags, and improving processes. FLY RIGHT New tool, which had its initial implementation in 2022, and will have the other implementation phases carried out in 2023, and centrali- zes the Compliance processes in a single platform, optimizing the approval 昀氀ows, activity management, monitoring and addressing of risks in the company. 3333
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS TRAINING CARRIED OUT IN 2022 The following trainings were provided by the Compliance area during the 2022 THINK AND RETHINK accounting year: New edition of the Compliance communication Compliance Processes – (refresher): (Hos- • Ethics & Compliance Management Pro- campaign for 100% of collaborators. In 2022, the • main topic revolved around raising awareness on the pitality, Gifts, Events, Due Diligence, Know gram: A Story use of the whistleblowing channel – the Helpline – en- Your Customer, Risk Assessment, Monito- Target audience: the entire leadership of ring, Red Flag & Blocklist, Donations, Spon- Embraer S.A; couraging collaborators to identify the situations in sorship, Helpline, Membership) – Taught to which the use of the channel is recommended. Compliance Of昀椀cers and also Agents, Am- • Bribery and Corruption: A Story About Glo- bassadors, and Requesters, as applicable; bal Bribery • OFAC (Of昀椀ce of Foreign Assets Con- Target audience: the entire leadership of trol) Training – For Compliance Of昀椀cers, Embraer S.A; COMPLIANCE DAY Agents, and Ambassadors; • Con昀氀icts of Interest – Managing and resol- Held on the week of the international anti-corruption • Anti-Corruption Compliance Training – ving con昀氀icts of interest involving gifts and day, December 9, for 100% of collaborators, the event Taught by the law 昀椀rm Maeda Ayres & Saru- gratuities in business was attended by members of Embraer’s Board of bbi to the Compliance team of Embraer S.A. Target audience: the entire leadership of Directors and Executive Board, as well as external and group companies, in addition to the Hel- Embraer S.A; guests, experts in FCPA*, and the Brazilian Anti- pline investigation team; • Compliance Training for the Board of Di- Corruption Law. • Bribery and Corruption: Doing Business in rectors and Executive Board’s members High-Risk Countries –taught by a lawyer specialized in FCPA. The lectures and roundtables highlighted the challen- Target audience: the entire leadership of ges, trends, and future of Compliance both in the ae- Embraer S.A; rospace industry and in other sectors of the economy and facilitated the interaction among collaborators and speakers. * Foreign Corrupt Practices Act - The United States Corrupt Practices Act, which is considered the pioneering anti-corruption law abroad and came into force in 1977. 34
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS OPERATIONAL SAFETY AND PRODUCT QUALITY IMPLEMENTATION OF THE SAFETY OGMA SAFETY SUMMIT MANAGEMENT SYSTEM (SMS) The OGMA Safety Summit – Conference on Safety Mana- In 2022, Embraer actively participated in the gement System – gathered in Alverca, Portugal, four ex- review and development of the SM-0001 stan- perts from the areas of Safety and Quality to address topi- dard, focused on operational safety, contribu- cs of Operational Safety. Among professionals, specialists ting to the implementation of SMS* for the en- and the OGMA team, the event had about one hundred tire aeronautical industry around the globe. In participants, from twenty-seven entities of the aeronau- the company, SMS was 昀椀rstly implemented in tical community. all its U.S. maintenance units, and the imple- mentation of SMS for OGMA** maintenance units in Portugal was 昀椀nalized. As a result, all II OPERATIONAL SAFETY the company’s European maintenance units AND QUALITY WEEK 2022 are already able to meet the new regulations of EASA – The European Aviation Safety Agency, For the second year in a row, Embraer which will be mandatory by the end of 2024. joined the themes of Operational Safety In Brazil, the company joined forces with and Quality in a single week dedicated ANAC – National Civil Aviation Agency to devi- to discussing with external experts, the se the Brazilian operational safety regulations senior leadership of the company and for the aeronautical industry. collaborators, success cases, challenges, and trends for these two capital topics for * SMS is a global, systematic, and standardized approach the aeronautical industry. The event was to managing operational safety risks for the aeronautical online and open to 100% of collaborators, industry. and all content is available for reference **Aeronautical Industry of Portugal on the intranet, further af昀椀rming the company’s culture of safety and quality. 3535
INNOVATION 36
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINOVVAAÇTIONÃO BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS INNOINNOVVAATIONTION Embraer believes that collaborative innovation is the best way to co- -create the future, adding value to all its stakeholders and society. The efforts seek to contribute in a relevant way to the technological advan- ces of Brazil and the markets in which it operates. In practice, Embra- er’s evolution and innovation journey is carried out every day through the commitment of collaborators and networking taking the whole ecosystem into consideration, i.e., partners, government, universities and research institutions, suppliers, startups, and customers. Within this perspective, once again the company’s innovative pro昀椀le stood out on the Brazilian scene. The company was one of the hi- ghlights of the 2021/2022 edition of the National Innovation Award, an initiative of the Business Mobilization for Innovation (MEI), carried out by the National Confederation of Industry (CNI), and the Brazilian Micro and Small Business Support Service (SEBRAE). In the award, held to encourage and recognize the efforts of ins- IN 2022, ABOUT titutions that operate in the Brazilian innovation ecosystem, Em- braer won in the “Product Development” category, “Large Com- panies” modality. 46% In 2022, about 46% of the company’s revenue came from OF THE COMPANY’S innovations that occurred over the last 昀椀ve years. Investment REVENUE CAME FROM in technological development and innovation remained stable, DEVELOPMENTS on the order of 5% of annual revenue. MADE IN THE LAST FIVE YEARS. 373737
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS AWARDS HIGHLIGHTS NATIONAL INNOVATION AWARD DESIGN SYSTEM PLATFORM [DS] The Brazil’s largest innovation award, conducted to en- Development of a standard library of design, ob- courage and recognize the efforts of institutions opera- jects, colors, text sources, and active components ting in Brazil: 1st place in the product innovation category that allow software development teams to create with the case of Eve Urban Air Mobility. prototypes and solutions with signi昀椀cant time and cost savings, while keeping designs standardized AWARD VALOR INOVAÇÃO BRASIL 2022 with the brand’s visual identity. In its 8th edition, Embraer ranked as the third most in- novative company in Brazil and the 昀椀rst in the Capital INCEPTION OF THE INNOVATION LAB Goods Sector. Place that allows fast execution of tests and proto- BRAZIL 5.0 DIGITAL TRANSFORMATION types, which has methodologies and tools supported AWARD 2022 by the Product Design concept. National highlight with the pro- EMBRAER INNOVATION ject “Leveraging Digital Transfor- ECOSYSTEM PORTAL mation in Products and Talents” organized by Manifesto & Prêmio Launched in 2022, the portal furthers governance, 2022, which furthers the develo- programs, events, content, pages, and news pertaining pment of projects for Innovation to innovation at Embraer, maximizing the company’s and Digital Transformation of Pro- global innovation potential through integration and cesses and Business Models. greater visibility of structuring actions. 38
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS INNOVATION The Innovation Verticals are Innovation priorities under study by Embraer. In 2022, the highlight is the advance in the Business Verticals agenda of Zero Emission and Autonomous Flight Verticals, especially the direct investment in XMobots by Embraer Ventures. In addition, in 2022 two new Verticals were approved for Incubation: Cybersecurity and Passenger Experience. VERTICAL ZERO EMISSION Embraer and Collins Aerospace are collaborating on the development and testing of an innovative electrothermal heating technology based on carbon nanotubes (CNT) for ice protection systems. This electrothermal CNT technology is more energy-ef昀椀cient, lighter, and uses greener manufacturing processes than current systems, and the company believes it will become the future standard for ice protection – including in more electric aircraft designs. The new solution was successfully installed in the vertical stabilizer of a prototype Phenom 300E*. Collins’ CNT heater and anti-icing system underwent about ten hours of ground testing and “dry air” 昀氀ight. In 2022, the project reached an important milestone by starting a 昀氀ight test campaign at the Gavião Peixoto unit, São Paulo. 3939
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS ZERO EMISSIONS STARTUP DAY Embraer has concluded its 昀椀rst the Program team, each focusing on Embraer believes that some of the “Start-Up Day” with a view to en- one of four critical areas: electric and technologies needed for aviation HYDROGEN FUEL CELL couraging startups with the most hybrid powertrain, fuel cells, hydrogen have not yet been developed, and DEMONSTRATOR cutting-edge technologies to join storage, and battery technology. that it is essential to harness all the the sustainable 昀氀ight initiative of Embraer is connected and works talent available in the world to 昀椀nd With the 昀椀rst 昀氀ight scheduled the Energia Program. The company’s closely with agile innovators, and answers that work, are accessible for 2025, the company has ad- goal is to select organizations to believes that the growth of the and practical in the real world. vanced the conceptual design partner with the Energia Program, ecosystem of small startups with The quality of interactions and the of the aircraft. Based on the develop technologies with the grea- technology experience has a huge potential capabilities of the tech- Ipanema platform, in 2022 the test potential to address the challen- contribution to make – when the nologies presented drove the com- project made an important ad- ges of the climate crisis, considering opportunity is offered. The event pany to plan more events such as vance in its technical feasibility. that startups have a signi昀椀cant role drew relevant organizations from Start-Up Day, including other areas in overcoming certain challenges. around the world, including France, of interest such as design projects At the 昀椀rst meeting, held in 2022, si- Germany, the Netherlands, South aimed at sustainable cabin, connec- Learn more: xteen organizations from around the Korea, the United Kingdom, and the tivity, ground handling, clean power Energia Program world introduced their technologies to United States. generation and more. 4040
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS PARTNERSHIPS FOR R&D & INNOVATION CPQD CAMPINAS & EMBRAPII The partnership with CPQD Campinas (Telecommunications Research and Development Center) and EMBRAPII (Brazilian Industrial Resear- WIDERØE E ROLLS-ROYCE ch and Innovation Company) for the research on high-voltage batteries Embraer, Widerøe, and Rolls-Royce have announced plans to stu- applied to aeronautics. The purpose is to allow that Embraer further dy a zero-emission concept regional aircraft. The twelve-month develops batteries applied to the aeronautical production system. cooperative study – in the context of pre-competitive research & development – will address the demands of passengers to stay con- FAPESP nected, in a post-covid-19 world, in a sustainable way, in addition Partnership with FAPESP (São Paulo State Research Foundation) to seeking to accelerate the technological knowledge required for to research recycling and disposal of high-voltage batteries. such transition. New technologies will allow countries to continue to support pas- ITA & FAPESP senger mobility, while reusing most existing infrastructure in a more sustainable fashion. Advances in scienti昀椀c research could Partnership with ITA (Technological Institute of Aeronautics) and make clean, renewable energy a major catalyst of a new era of re- FAPESP (São Paulo State Research Foundations), with a shared in- gional aviation. vestment of BRL 48 million over the next 昀椀ve years in an Enginee- Among other topics, the research will cover a wide array of new pro- ring Research Center (CPE) for the air mobility of the future, based on pulsion technology jobs, to assess various potential solutions – in- three pillars: low carbon aviation, autonomous systems, and advanced cluding all-electric aircraft, hydrogen fuel cell aircraft or hydrogen manufacturing. In 2022, the institutions jointly described the scope of gas turbine-powered aircraft. research and the main activities to accomplish the partnership that proposes innovative technological solutions that will enhance the competitiveness of the global innovation ecosystem. 41
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS VERTICAL AUTONOMOUS FLIGHT VERTICAL ARTIFICIAL In 2022, Embraer announced the agreement to invest in XMobots, a INTELLIGENCE company located in São Carlos, São Paulo that is the largest drone company The company made signi昀椀cant strides with innovati- in Latin America. The deal aims to accelerate the future of the mid- and large-size ve initiatives in arti昀椀cial intelligence and data scien- autonomous drone market and broaden the collaborative network in research into ce in 2022. A key achievement was the preparation new technologies. and alignment of the corporate data strategy with A series of experimental helicopter 昀氀ights in Rio de Janeiro focused on assessing the vision of making Embraer a company capable of new autonomous system technologies in real 昀氀ight conditions and complex urban yielding more and more value from the information environments were also completed. generated by its systems and processes. To support such a change, improvements pertaining to people and culture were made, including new careers for data professionals. In December, the company ful- 昀椀lled the 昀椀rst class of the Software Specialization Program for training new data scientists. From a technological standpoint, the company laun- ched its research portfolio in arti昀椀cial intelligence, focusing on embedded applications for increased 昀氀ight safety and machine learning algorithms for predictive maintenance, capable of generating great value for customers. Learn more: Experimental Flights Learn more: XMobots Software Specialization Program 42
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS INNOVATION CULTURE With the challenge of stimulating the generation of new ideas and solutions, as well as fostering the culture of innovation throughout Embraer, the company opens opportunities for the development of innovative projects and calls for Innovation Strategy programs and actions. INNOVA PROGRAM Created to disseminate culture and foster innovation to every collaborator who is willing to seek innovative solutions. Besides, it stimulates the generation of ideas in the company through Innovation Challenges. • Green Light: • Innovation Day: Entrepreneurship program that assesses innovative pro- Initiative to spread culture and foster innovation, bringing posals presented voluntarily by collaborators. The program a collaborative environment and the opportunity for diffe- provides technical and business guidance, leadership en- rent institutions to discuss future trends at a global level. gagement, time and resources for them to realize ideas until In 2022, in its 6th edition, the event was attended by more their technical and economic viability is proven. than 2,800 people and included the launch of Embraer’s 昀椀rst Hackathon, with the development of integrated so- • Innova Challenge: lutions between processes and applications for ten pain points of each of the vice-presidencies, and collection of Internal crowdsourcing mechanism that stimulates ideas to more than 150 kilos of food with the solidarity ticket. Addi- solve problems globally from different departments of the tionally, participants were asked to wear fun t-shirts or cos- company. Its 10th edition in 2022 was marked by the launch play costumes to attend the event. of the Agro Innovation Challenge, focusing on solutions and technologies earmarked for the agricultural industry. 4343
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS INNOVATION CULTURE CYCLE OF INNOVATION VERTICALS To optimize Embraer’s investments in innovation, priorities were established through the Innovation Verticals. Annually we carry out the Vertical Cycle through the Innovation Forum, bringing together executives from the various areas of the company to follow up the evolution of these prio- rities and decide on the approach in the coming years. To compose the Vertical cycles, the following information is considered: • Emerging Technologies: • Aerospace Industry Trends: • Business Trends: Map of technologies necessary to meet Consolidating the knowledge genera- It considers business trends inside new and future products. ted in the market intelligence areas of and outside the Aerospace, Defense, the different Business Units. and Venture Capital markets. EMBRAER STARTUP PROGRAM With the purpose of gathering several areas of the company to join The democratization of collaboration with startups is one of the backgrounds and efforts to solving problems, Embraer Startup ways to accelerate innovation at Embraer, recognize internal and Program was implemented as a means to recruit startups within external talents, and boost ef昀椀ciency. up to 5 business days. In November 2022, the 昀椀rst edition of the Marathon was held, a The Program brings the potential of external entrepreneurs to the com- competition between startups to solve previously mapped de- pany for challenges and needs of diverse sorts, ranging from technical mands, including a face-to-face event and interaction among product issues to those more of a process or management character. ecosystem players. 4444
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Embraer’s disruptive innovation arm is a group Among the news of 2022, Embraer-X strengthened company focused on the future of air mobility, relations with the Netherlands, opening an of昀椀- clean energy, among other topics, with a view to ce at the Aerospace Innovation Hub@TUD, of the fostering and structuring new business opportu- Delft University of Technology (TU Delft). nities. Embraer-X is committed to sustainabili- Embraer-X’s strategic position in the Aerospa- ty principles in the development of its business ce Innovation Hub@TUD will serve as the basis and operations. for continuously connecting to the institution’s In 2022, Embraer-X established itself as a market business ecosystem, which involves startups, accelerator committed to developing solutions test facilities, and spin-offs, facilitating colla- that change life experiences, and dedicated to boration between professionals and researchers collaborating with global innovation communities. from both organizations. WEB SUMMIT LISBOA 2022 Embraer-X also participated for the 昀椀rst time in Web Summit Lisbon 2022, one of the world’s largest technology and innovation events, with two panels at the Apex Brasil Pavilion, where the impacts and new opportunities created by the digital revolution for the mobility segment were discussed. At the event, it presented the journey of adoption of technologies and form of digital work by Embraer, including the decision to create Embraer-X itself, and the incubation of new businesses. 4545
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Incubated by Embraer-X, the Beacon is a maintenance nagement software services. This collaboration aims to coordination platform for faster return to operation. In- test a fully integrated solution for managing aeronauti- novative, it is designed to connect and synchronize in- cal maintenance pro昀椀les with a complete Competency dustry, supply chain and aviation service professionals and Compliance check to solve the growing need to 昀椀nd resources in a more agile and ef昀椀cient way to keep air- quali昀椀ed and specialized professionals. craft in operation. This partnership will bring more transparency, security, The platform is primarily focused on providing solutions and trust to the platform, as Beacon wants to empower for unscheduled aircraft maintenance. Through an ea- teams and individuals with tools that can deliver the best sily accessible digital web and mobile application (IOS return to their customers’ operation. and Android), Beacon’s main goal In December 2022, Embraer-X signed a is to connect businesses and pro- contract with Pulse Aviation to use the fessionals in a revolutionary way. Beacon. Headquartered in Florida, Pulse The technology tri最最ers a network is a business aviation company that provi- of accredited suppliers, promp- des maintenance, repairs, and operations. ting real-time collaboration during The company intends to use Beacon to maintenance activities not initia- improve maintenance coordination, sim- ted, accelerating the return to air- plify communication about maintenance craft operation. events for all aircraft models, and increa- In 2022, Beacon formed a working se team collaboration, thereby improving group with ELMS Aviation, a lea- knowledge exchange and streamlining ding provider of Competency Ma- maintenance-related work昀氀ows. 46
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS An Embraer Group company for eVTOLs (vertical ca. FlyBIS will purchase up to 40 eVTOL vehi- takeoff and landing aircraft), Eve had its shares listed cles from Eve. on the New York Stock Exchange under the symbol The partnership with FlyBIS has made it pos- “EVEX” in 2022. sible to expand the future of air mobility to the In order to go public, Eve merged with Zanite, a spe- Southern Region of Brazil and to other coun- cial-purpose acquisition aviation company (SPAC). tries in South America. Eve also signed a letter of intent with FlyBIS, an ad- FlyBIS vehicles are included in Eve’s market- vanced air mobility startup based in Caxias do Sul, -leading backlog, which currently has an order FLYBIS TO BUY UP TO Rio Grande do Sul, for cooperation in the develop- backlog for up to two thousand seven hundred ment of eVTOL operations in Brazil and South Ameri- and seventy eVTOLs. EVE Learn more: 40eVTOLs Eve Air Mobility 4747
BUSINESS Units 48
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS COMERCIAL Aviation Embraer’s E2 family of aircraft enables airlines to increase operational adap- tability, match capacity to demand, and add frequencies. In 2022, nineteen aircraft of the E2 family and thirty-eight of the E1 family were delivered. In 2022, the E190-E2 aircraft received its Type Certi昀椀cate from the Civil Aviation Administration of China (CAAC). The company’s latest market fore- cast revealed that one thousand four hundred and forty-昀椀ve new aircraft in the category of up to one hundred and 昀椀fty seats will be delivered to China by 2041, driven by the country’s long-term economic development and the continuing trend of the Chinese civil aviation system to evolve from peer-to- -peer to a hub-and-spoke-based network*. IN 2022 * On hub-and-spoke routes, airlines choose a particular city to be the distribution center for their 昀氀i- E2 FAMILY ghts, causing passengers to change planes at the airport. 19AIRCRAFT WERE DELIVERED FLYING WITH 100% SAF In June 2022, Embraer conducted a successful test with 100% SAF AND ALSO engines on the E195-E2 aircraft, proving that GTF engines and the AIRCRAFT OF E2 E-Jets family can 昀氀y with this fuel without compromising safety 38THE E1 FAMILY or performance. The aircraft completed two days of ground testing at Fort Lauderdale International Airport in Florida, followed by another seventy minutes of 昀氀ight testing at Vero Beach Regional Airport in Learn more: Florida. Future fuel speci昀椀cations will enable blends of up to 100% Financial Statements (only in Portuguese) SAF to boost the potential for reducing carbon emissions. Release of Deliverables and Backlog 494949
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS ENERGIA PROGRAM HYBRID ENERGY FUEL CELL POWER In December 2022, Embraer shared new advances in the Energia Program, the (E19-HE E E30-HE) (E19-H2FC E E30-H2FC) company’s initiative to zero pollutant emissions in the aviation industry by 2050. Announced in 2021 with nine Announced with nineteen seats, Embraer now explores seats in 2021, Embraer A year after the Sustainability in Action event, which unveiled the study of a nineteen and thirty-seat is studying a thirty-seat four new aircraft concepts powered by new technologies and renewable version with: version with: energy, the company has focused on two nineteen- to thirty-seat projects for hybrid electric and hydrogen-electric propulsion. The research has been • Parallel hybrid-electric propulsion • Hy drogen hybrid propulsion developed based on Embraer’s 昀椀fty-year technical experience, external • Up to 90% reduction of CO2 emis- • Zero CO2 Emissions contributions from airlines, and joint studies with engine manufacturers. sions when using SAF • 19- and 30-se at versions The two projects offer a real and feasible path to zero carbon emissions. • 19- and 30-se at versions • Electric motors at the rear • Engines a t the rear • Technological readiness – 2035 • Technological readiness – early 2030 Still in the evaluation phase, architectures and technologies are being analyzed for technical and commercial feasibility. The Energia Program Advisory Board was also launched to harness the contributions and collaboration of partner airlines, with the aim of making development more assertive. Learn more: New concept of Energia Family Energia Program 50
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS EXECUTIVE SERIES Aviation PHENOM 300JETS ARE THE WORLD’S BEST-SELLING JETS FOR THE Embraer is creating the future of Executive Aviation today, using industry- ELEVENTH CONSECUTIVE YEAR -leading innovation, design, and technology, while incorporating new part- nerships to deliver the best experience in the industry. Embraer reached a histo- ric milestone in 2022: the Phenom 300 series jets be- came the best-selling category models in the world for the ele- venth year in a row, and the most delivered twin-engine jet of the previous year, according to 昀椀gures released by the General Aviation Manufacturers Association (GAMA), a United States association that brings together manufacturers in the industry. Embraer delive- red 昀椀fty-six Phenom 300 series jets in 2021 and 昀椀fty-nine in 2022, cementing product excellence for a decade and market dominance. The Phenom 300 series has an average of 昀椀fty aircraft delivered per year since it entered the market in December 2009. In 2022, after demand for business jets recovered strongly compared to the previous year, the Business Aviation market continued to post sharp Learn more: growth. Embraer’s activity level remained high, reaching record levels in Financial Statements (only in Portuguese) sales, backlog, and utilization. Release of Deliverables and Backlog 515151
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS 2022 HIGHLIGHTS EXECUTIVE AVIATION ENDED 2022 WITH A NET REVENUE OF In May, Embraer announced that Flexjet is the 昀椀rst Legacy 500 cus- US$ 1,2 tomer in the world to install the Ka Band, which offers fast connection, as an after-sales modi昀椀cation, to its business jet 昀氀eet in Europe. This BILLION new feature is also available, via a service bulletin, for Legacy 450, Le- gacy 500, Praetor 500 and Praetor 600 business jets. Ka-band provi- des high-speed internet access, very attractive to the charter market lando, Florida, to serve the 昀氀eet of and the most delivered twin engine of allowing multiple devices to be con- and is recognized and requested by more than two hundred aircraft on the year. A market leader, the model nected at the same time. Installation customers for its emphasis on com- the Praetor platform. Operations offers best-in-class features in cabin of this feature is also offered direct fort, technology, and performance. will begin in the second quarter of range, speed and pressurization, and from the factory, as an optional item, In the fourth quarter, Embraer and 2023. The new 昀氀ight simulator will stands out for its unique technology for the Praetor 600 and Praetor 500. FlightSafety International annou- provide Embraer customers with the and unprecedented comfort. In the third quarter of 2022, Embraer nced a new Full-Flight Simulator latest technological updates to the At the end of 2022, Embraer has more delivered its 1,600th business jet, a (FFS) for the Praetor 500 and Pra- aircraft, bringing the highest level of than 1,600 aircraft in operation and Phenom 300E, on July 7, to U.S. char- etor 600 business jets in order to service to market. more than 1,000 operators and cus- ter operator Keystone Aviation. This meet the growing demand for trai- With the 2022 results, Embraer cele- tomers present in more than sixty- impressive feat has been achieved in ning these models. The simulator, brates eleven years of leadership in -昀椀ve countries. Executive Aviation’s twenty-two years, while the industry which is the third for these business the light jet segment with Phenom 昀椀rm order backlog ended the year at average for reaching this milestone is jet models designed by FlightSafety 300, the fastest jet in production cer- USD 3.9 billion (34% higher) and its thirty-four years. The Phenom 300E is International, will be based in Or- ti昀椀ed for operation with only one pilot Net Revenue reached USD 1.2 billion. 5252
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS EMBRAER EXECUTIVE CARE PROGRAM PARTNERSHIP WITH VOAR Embraer announced a partnership with VOAR Aviation with a view to offering uns- cheduled services to Embraer’s Executive Aviation customers at Congonhas Airport in São Paulo. Thus, the company continues to strengthen its component maintenance, repair and overhaul (MRO) and Fixed Base Embraer Executive Care, which turned sixteen During the edition of LABACE 2022, the largest Operator (FBO) operations to meet the grow- in 2022, is an aircraft maintenance program business aviation event in Latin America, th of Executive Aviation in Brazil. carefully designed and managed by Embraer to Embraer and Avantto signed a contract for the The partnership with VOAR occurred two provide a simple and predictable way to budget Embraer Executive Care Program to support months after Embraer opened the new han- aircraft maintenance costs. the company’s 昀氀eet of executive jets. Leading gars of the Sorocaba Service Center, in the Over a 昀椀ve-year cycle, the bene昀椀ts of the in the 昀椀eld of aircraft sharing in Brazil, Avantto State of São Paulo, thus doubling its useful program include savings over the actual costs currently has a 昀氀eet of seven Phenom jets, area. The unit, which completed eight years of scheduled and unscheduled events in the four of the Phenom 100 model and three of of operation in March 2022, now has four same timeframe, providing protection against the Phenom 300 model. Currently, more than hangars, three of them dedicated to MRO price tolerance and ease of doing business 700 aircraft are part of Embraer Executive and one to FBO. with Embraer and its partners. In addition, the Care globally. company offers preferential prices for customers registered in Executive Care for various services. 53
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS PORTFOLIO The current portfolio includes: • the entry level Phenom 100EV jet; • the last decade’s most designed light class, Phenom 300E; • the Praetor 500 medium jet; • and the super-midsize Praetor 600. Both with the best combination of tech- nology, performance, and comfort. Cus- tomers appreciate Embraer’s global ne- twork of services and support. The company markets business jets to companies, including fractionally owned charter 昀氀ights, air taxi, individuals and 昀氀ight clubs, both independent and those belonging to airlines and armed forces. Learn more: Executive Aviation Portfolio 54
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS ESG INITIATIVES FREE CARBON OFFSET PURCHASE OF THREE SAF CARGOES Used in the demonstrator 昀氀eet. This action directly Embraer and 4AIR entered into a their commitments to 昀椀ght clima- contributes to the reduction of the company’s Scope partnership in May 2022 to grant te change through participation 1 emissions and is connected with the global goal of carbon emissions compensation in 4AIR’s programs. The starting having carbon-neutral operations by 2040. for the 昀椀rst twenty-昀椀ve hours of twenty-昀椀ve hours are at Level 1 of business jet 昀氀ight to new custo- 4AIR (Bronze), which credits 100% ISSUANCE OF FOLS mers who enroll in the Executive of carbon dioxide emissions. (FLIGHT OPERATIONS LETTER) Care Program. This offset will oc- Customers will be able to choose Certifying that it is safe and appropriate to use SAF cur free of charge during the 昀椀rst to continue participating in this on aircraft. This document is an important action year of aircraft ownership. level, increase their commitment for the awareness raising and furtherance of this After completing the twenty-昀椀ve to becoming carbon neutral or re- biofuel among customers. hours of 昀氀ight through the Care duce emissions through measures Executive Program, Embraer cus- such as changes in the operation STUDIES FOR COMPATIBILITY tomers will be able to continue or use of SAF. OF AIRCRAFT USING 100% SAF With the goal of certifying them by 2030. 5555
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS Embraer DEFESA & SEGURANÇA KC-390 MILLENNIUM OPERATIONAL Embraer Defense & Security is a leader in the Aerospace and Defense RELIABILITY Industry in Latin America. The company’s solutions are available in more ABOVE 99,5% than sixty countries, and continue to expand into the global market. In 2022, the Brazilian Area Force (FAB) received its 昀椀fth KC-390 Millen- nium aircraft. The 昀氀eet accumulates about eight thousand 昀氀ight hou- rs and almost six thousand cycles, with an outstanding maturity level (operational reliability above 99.5%). The negotiation of adjustments to the serialization agreement, an ef- fect of the country’s economic moment, was successfully concluded, quelling the possibility of further unilateral reductions: the nineteen aircraft contracted preserve the company’s cash 昀氀ow, and ensure the program’s economic and 昀椀nancial feasibility – the strategic partnership between Embraer and FAB goes on strong and healthy. 5656
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS The KC-390 program continues to progress smoothly. New capabilities were considered much superior to all competitors in the category. The Dutch Air Force’s added in 2022, with emphasis on operation on gravel tracks, and 昀椀re昀椀ghting public report, considered to be of high technical competence, represented a seal system. The Portugal setup is in the testing/certi昀椀cation phase, was presented of quality for C-390, and yielded an immediate increase in global market interest. to the customer in Beja in October 2022, and will be delivered in 2023. The 昀椀rst In addition, even in the midst of the pandemic, Embraer signed a new contract for Hungarian aircraft is already in production, in the structural assembly phase. the sale of A-29 Super Tucano aircraft. Deliveries are planned for 2023. On the international stage, the Dutch government announced the decision to Highlight in the streamlining programs was the delivery of the fourth E-99 purchase 昀椀ve C-390 Millennium aircraft to replace its 昀氀eet of C-130 Hercules. AEW&C aircraft to FAB – the 昀椀fth and last aircraft of the contract will be After thorough technical and economic assessment, the Embraer product was delivered in 2023. 5757
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS PARTNERSHIPS RADARS & TERRESTRIAL SYSTEMS In 2022, Embraer Defense & Security set up important new The year 2022 was a great success The 昀椀rst two M60 v2 radars (which partnerships, with emphasis on: for the Radar & Terrestrial Systems join the more than 30 units of the • Memoranda of Understanding signed with BAE Systems, business. original version already in opera- which establish a partnership between the two companies The First Phase of the SIS-FRON tion by the Brazilian Armed Forces) for global sales efforts of the C-390, and to collaborate on Program was ful昀椀lled by the effec- were delivered to EB, which this year the development of a military use variant of eVTOL. tive implementation of more than also signed a contract to acquire 4 1,500 contractual deliveries plan- additional units of this radar. Las- • Eve Air Mobility has announced a Letter of Intent with ned for this stage. Reasserting a tly, a new contract was signed with Embraer and BAE Systems to explore the potential order of relationship of trust and satisfac- the Brazilian Army for the develop- up to 150 eVTOLs for aircraft application to the Defense & tion, the Client signed a contract ment of a radar for Counterbattery Security market. with Embraer for SISFRON Phase application. The project will resort to • Embraer announced the Memorandum of Understanding 2, which will continue the Pro- knowledge and technology applied (MoU) with South Korean aerospace companies, with a view gram, complementing the covera- to the M200 family of radars. to a future supply of parts for the C-390 Millennium, which ge of the country’s western border competes in the Large Transport Aircraft II program. surveillance system. • Embr aer and L3Harris Technologies have announced a partnership to develop the “Agile Tanker,” an agile tactical aerial refueling aircraft based on KC-390 Millennium, to meet U.S. Air Force operational guidelines and Joint Force requirements. 58
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS Atech, company that specializes in de- In 2022, Eve Air Mobility was also awar- veloping solutions for critical missions ded Phase 1 of the Urban Air Traf昀椀c In 2022, Visiona took important steps to ce- and technologies to support decision- Management (UATM) system concept. ment its status as a space systems integra- -making, has been working on major Atech is a strategic partner of EVE, and tor in Brazil. programs of the Brazilian Armed Forces. aims to apply its expertise in develo- Tamandaré-class Frigate Program: in ping, deploying and supporting air tra- It was declared the winner of a Public Notice 2022, the infrastructure of CMS (Combat f昀椀c 昀氀ow control and management sys- of Subsidy to Technological Innovation, con- Management System) and IPMS (Integra- tems for the future of urban air mobility. ducted by FINEP (Financier of Studies and ted Platform Management System) inte- Accomplishing the main milestones of Projects) for the development of a new high- gration test laboratories was completed. the year, Atech and the Municipality of -resolution satellite – in the tender, Visiona São José dos Campos signed a partner- led a consortium of thirteen companies and LABGENE Program (Laboratory for the ship focused on the management and ICTs in the space industry in Brazil. Generation of Nucleoelectric Energy) monitoring of intelligence and security Additionally, the company completed the of the Navy: Atech develops the monito- operations – CSI. assembly of the VCUB satellite, and advan- ring, control, and protection systems of ced its 昀椀nal tests, expected to be launched the laboratory, as well as the integration The agreement will result in increased by SpaceX in the 昀椀rst half of 2023. of instrumentation systems and auxiliary situational awareness of security, ena- systems: the year marked the issuance bling strategic decision-making and In the application business, the highlight of the of the 昀椀eld installation documentation, greater risk control, in addition to opti- year was the signing of the contract with BBSeg which begins the performance schedu- mizing operational costs. for the supply of a system for the provision of led for 2023. parametric agricultural insurance, expanding its participation in the agricultural industry. 59
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS Specializing in cybersecurity, Tempest’s portfolio is aligned with the cybersecurity framework of NIST® (National Institute With the 昀椀rst steel cutting, 2022 marked the building start of the 昀椀rst of Standards and Technology), the non-regulatory government Tamandaré-class Frigate. The program continues following the development agency of the U.S. Department of Commerce’s Technology plan, with the 昀椀rst delivery scheduled for 2025. The Brazilian Navy has Administration. contracted a total of four frigates from SPE (Special-Purpose Entity) Águas 2022 was the year of launch of Prospero Suite, a new platform Azuis, composed of Embraer, Atech, and Thyssenkrupp. for integrated management of cybersecurity services and results. The platform, which is already being used by sixty- one customers, allows management and consumption of results in an integrated fashion, integrating operational, tactical, and strategic perspectives. Another noteworthy development of the year was Allow-Me Bio – evolution of facial biometrics, which has expertise in behavioral analysis. Created within the concept of security by design, it ensures security without impacting user experience. In addition to these platforms, Tempest has also started publishing the daily Cyber Morning Call podcast, which covers breaking news on attacks, vulnerabilities, and threats. 60
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS Services & SUPPORT Embraer Services & Support’s commitment is to offer high-tech The survey occurs in various formats and according to the customer’s experiences with a human touch through a team dedicated to pro昀椀le and operation, being sent soon after the customer’s contact exceeding expectations. With a pool of experts that supports each of with Embraer, as well as an annual survey with several pillars for its customers, both in the air and on the ground, it is committed to assessment. The Customer Experience Program allows Embraer to be always keeping them 昀氀ying at their best performance. more responsive in developing initiatives based on customer feedback, With the customer at the center of its operations, the estimating, and anticipating their needs. company implemented in 2022 the Customer Additionally, the company has Product Support Experience Program, a tool designed to surveys that are carried out by Aviation International measure customer satisfaction based on News (AIN) and Professional Pilot Magazine. Over the their experience. past ten years, Embraer has remained in the Top 3 of these surveys, in 2022 ranking 昀椀rst in the AIN ranking and second in ProPilot. Learn more: Research Financial Statements 6161
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS A TEAM FULLY DEDICATED TO CUSTOMERS EMBRAER STARTS AIR CARGO ACTIVITIES Embraer Services & Support cou- Embraer entered the air cargo market with the launch of the E190F nts on a team of 210 highly qua- and E195F Passenger to Freight Conversions (P2F). li昀椀ed 昀椀eld representatives worl- dwide, who are capital for the E-Jet freighters are designed to meet the new demands of e-com- relationship of excellence with merce and modern commerce, which require fast deliveries and de- its customers. centralized operations. Therefore, Embraer is offering cargo savings and the adaptability that the right-sized jets offer. One of the opportunities identi昀椀ed was the time of operation of the 昀椀rst E-Jets that entered service about ten-昀椀fteen years ago and are STRENGTHENING RELATIONSHIPS exiting long-term leases and starting their replacement cycle. The full conversion to cargo will extend the life of E-Jets and encourage their Every year customers have the opportunity to interact with the Embraer replacement with more ef昀椀cient, sustainable, and quieter aircraft. staff, other operators, suppliers, and partners during the Embraer Ope- With more than 1,600 E-Jets delivered globally, customers in this rators Conference (EOC). Conferences are segmented by business area: new freighter segment will bene昀椀t from an established and mature • W orld Conference for E-Jets and E2 Operators; global service network as well as a comprehensive portfolio of pro- • Th ree regional conferences for Executive Aviation operators: Brazil, ducts ready to support their operations. USA, and Europe; Full freighter conversion is available for all E190 and E195 aircraft • W orld Conference for Super Tucano Operators. used, with entry into operation projected by early 2024. Embraer an- ticipates a market for this aircraft size of approximately seven hun- The presence at these events is pivotal to strengthen the relationship, dred units in 20 years. in addition to creating an opportunity to introduce updates on products and services, discussions about the operation, news in service and trends in the aviation market. 62
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS 20TH ANNIVERSARY OF EMBRAER OGMA IS THE FIRST AUTHORIZED MAINTENANCE AIRCRAFT MAINTENANCE SERVICES (EAMS) CENTER CERTIFIED BY ANAC FOR E2 E-JETS In 2022, Embraer celebrated the 20th anniversary OGMA, an Embraer Group company, has Named among the top 10 MROs in Europe in of Embraer Aircraft Maintenance Services (EAMS), reached a historic milestone by becoming 2022 by Aerospace & Defense Review, this a certi昀椀ed repair center operating in Nashville, TN the 昀椀rst Authorized Maintenance Center certi昀椀cation represents OGMA’s expansion (USA) under the most prominent regulatory autho- certi昀椀ed by Portugal’s National Civil Avia- into the business segment of commercial rities worldwide, including the Federal Aviation Ad- tion Authority (ANAC) to perform heavy aviation and heavy maintenance, total 昀氀eet ministration (FAA) in the USA, the European Union maintenance on commercial aircraft of the management, engineering solutions, airwor- Aviation Safety Agency (EASA), and the National E2 E-Jets family in Europe, Middle East and thiness management, support maintenance, Civil Aviation Agency (ANAC) in Brazil, among others. Africa (EMEA). The announcement was as well as future aircraft modi昀椀cations that Opened in 2002, EAMS provides comprehensive made during the Embraer Operators Con- meet customer requirements and retro昀椀t for fuselage services for heavy maintenance, unsche- ference (EOC), international conference for E2 E-Jets family aircraft. Besides, in 2022 duled maintenance, structural checks and repairs, Embraer’s Commercial Aviation operators. OGMA signed a contract with Norwegian air- modi昀椀cations, supplement type certi昀椀cates (STCs), line Widerøe to perform the 昀椀rst maintenan- aircraft bridges, and lease returns. ce of an E2 aircraft worldwide. Currently, EAMS is the world leader in heavy mainte- nance services for Embraer commercial aircraft. The facility serves half of the global E-Jets 昀氀eet and 80 percent of the North American E-Jets 昀氀eet, supporting component and AOG requests from around the world. • MORE THAN 10,000 REPAIR ORDERS • MORE THAN 180,000 MAINTENANCE TASKS • C OLLECTION OF MORE THAN 10 MILLION of service data points that help improve Embraer’s technical knowledge 63
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS BEST FBO 10 YEARS OF THE CUSTOMER CARE CENTER For the third year in a row, Embraer’s FBO (昀椀xed-base operator) In 2012, Embraer launched the Customer Care Center, the result of is recognized as the best in Brazil, according to FBO 2022 survey, the uni昀椀cation of its regional Commercial Aviation customer service conducted by AIN (Aviation International News) magazine. Embraer’s centers. Celebrating ten years of operation in 2022, its scope will be FBO in Sorocaba is a center of excellence in aircraft support, offering broadened, covering executive and defense aircraft operators. From its hangar, cleaning, and supply, among many other services. headquarters in São José dos Campos, the Customer Care Center has a quali昀椀ed team of technicians, providing global support for coordination FBO IN SOROCABA IS THE of AOG events and scheduled aircraft maintenance assistance, from BEST IN BRAZIL the 昀椀rst contact to resolution. • MORE THAN 70 COLLABORATORS in the main duties of service and engineering solution projects; • MORE THAN 130 PROFESSIONALS working 24/7 to serve three business units – Commercial, Executive, and Defense; • SUPPORT TO MORE THAN 3,900 AIRCRAFT in operation and nearly 1,100 customers around the world; • MORE THAN 96% OF RESPONSE RATE to customers within SLA. 64
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS AGRICULTURAL Aviation Embraer is a leader in Agricultural Aviation, certi昀椀ed by ISO 9001, ISO 14001, and OHSAS 18001. Since 2004, the company has a certi昀椀cate issued by ANAC for Ipanema 100% hydrated alcohol (ethanol) powered airplane, which makes it the only aircraft in the world certi昀椀ed to 昀氀y with this type of fuel. Ipanema has also reached other levels. The new generation, EMB-203, which was launched in 2015, accumulates high orders each year and is currently the best-selling aircraft in Brazil. Throughout 2022, Embraer reached the mark of sixty-four aircraft sold, surpassing the previous year’s 昀椀gures. This is the third consecutive year of aircraft and parts sales records, reaching a growth of 40% compared to 2021 and four times higher than the average production of the 昀椀rst 昀椀ve years since the launch of Ipanema 203. On top of BRAZIL’S BEST-SELLING AIRCRAFT the high growth of agricultural market, this strong expansion results from the consistent process of brand strengthening, as well as improvements in the already recognized high performance of aircraft, not to mention the plant’s AIRCRAFT operational ef昀椀ciency and the quality of customer service and support. 64SOLD IN 2022 These 昀椀gures cement Embraer’s leadership in the market. Throughout 2023, the aircraft will also bring new improvements in aspects such as ergonomics, maintenance, and durability, exceeding customer expectations. 6565
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS Since 2005, Ipanema is the 昀椀rst and only aircraft certi昀椀ed to operate with an ethanol engine in the world. As of 2015, 100 percent of the new airplanes leave the plant powered by ethanol, in addition to hundreds of conversion kits from gasoline to ethanol engines SPEECHES AND CONSULTING installed in part of the more than 1,200 airplanes in operation. The company estimates that more than 200 million liters of fossil fuel have ceased to be burned. Embraer’s Customer Support team held, throughout 2022, lectures on 昀氀ight safety and continuous improvements to maintenance processes. In addition, partnerships were signed with the compa- nies Sabri and Agroefetiva that, from 2023, will offer free consulting to Ipanema purchasers, so that the aircraft operate in an optimal con昀椀guration and thus can achie- ve maximum performance, according to the needs of each customer. THE WORLD’S FIRST AND ONLY ETHANOL-POWERED AIRCRAFT + 300 THOUSAND TONS OF CO2 STOPPED BEING RELEASED INTO THE ATMOSPHERE 66
SUSTAINABILITY Indicators 67
CLICK TO GO TO THE DESIRED TOPIC INDEX All pages in this document are browsable: menus and pagination. 69Technical References 74 Environmental 89Social 125Governance 150 Content AND MATERIALITY INDICATORS INDICATORS INDICATORS SUMMARY 70. Technical References 75. Energy 90. Safety, Health and Wellbeing 126. Corporate Governance 151. GRI 71. Materiality 78. Emissions 97. Talent Management 132. Ethics and Compliance 156. SASB 82. Water and Ef昀氀uents 112. Diversity 137. Data Security 158. TCFD 86. Waste 118. Supplier Assessment 140. Operational Safety and 124. Local Communities Product Quality
Technical References AND MATERIALITY 69
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 1. Technical REFERENCES Global Reporting Initiative (GRI): Data pointed out refer to the period from The full list of material indicators covered in this report is available January 1, 2022, to December 31, 2022 This Annual Sustainability Re- in the GRI content index. And it covers 100% of Embraer S.A.’s collaborators. port follows the reporting re- Exceptions regarding the scope of data are duly ferences below: Sustainability Accounting Standards Board (SASB): described in the indicators to which they pertain. (GRI 2-2; 2-3) Embraer’s ESG performance information was supplemented by speci昀椀c indicators from the aerospace industry. The list of indi- Embraer produces its Sustainability cators is available in SASB content index. Reports on an annual basis. Sustainable Development Goals (SDGs) and Global The document is available to the public on its Compact Principles: corporate website esg.embraer.com and the historical series can be accessed on the Investor Relations Embraer’s efforts are aligned with global agendas, which assemble website (GRI 2-3) relevant challenges from society, government, and the aerospace Questions about this report can be sent to the e-mail segment. The main SDGs considered are integrated into the GRI [email protected] (GRI 2-3) content index. This report has not undergone independent auditor Task Force on Climate-Related Financial Disclosures assurance (GRI 2-5). (TCFD) Information pertaining to this framework’s recommendations is available in the TCFD content index. 70
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 2.MATERIALITY (GRI 3-1) Embraer is a company that values Identify and assess impacts on an ongoing basis Determine material topics for reporting relationships with all its value chain connections. Dialog and engage- 1 2 3 4 Material topics list ment with several stakeholders are ongoing company processes. The materiality process to ascertain Identify actual Assess the material topics and the corporate Embraer context and potential signi昀椀cance of Priorization sustainability agenda has been car- impacts the impacts process ried out by Embraer, frequently and in a structured manner, since 2013. In 2022, the process of updating its materiality matrix was accom- plished, including the principle of dual-materiality and following the Sector standards Materiality survey: test the material guidelines of the 2021 GRI-3 stan- Benchmarking topics with experts and Embraer’s Business strategy executives dard. (GRI 3-1) Engage with relevant stakeholders Figure 1: Embraer’s 2022 Materiality Process (GRI 3-1) 71
SUSTAINABILITY RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY INDICATORS EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS The materiality survey was attended by more than 700 responses, accounting for 昀椀ve stake- holder groups: suppliers, customers, collabora- MATERIALITY tors, investors & shareholders, and civil society. MATRIX The material topics were discussed and vali- dated by the company’s senior leadership, and by the Board of Directors advisory committee’ 5 members in charge of People and ESG matters, Topics prioritized by internal and external stakeholders referred to as CPESG. Topics not prioritized 1 When comparing the list of material topics of this year with that carried out in the previous 4,5 4 3 materiality process, conducted in 2017, the 23 14 13 5 main change is in the inclusion of the topic 12 6 Materiality 2022 16 8 7 2 Support for the development of biofuels (SAF), 15 s 24 22 17 11 1. Product safety and quality which occurred both by prioritizing stakehol- eholder4 18 9 10 ak 29 19 2. GHG emissions in the product use phase ders and by strategically prioritizing Embraer’s t 27 S 20 executive committee. 28 25 21 3. Anti-corruption and bribery practices 26 4. Hazardous waste management (GRI 3-2) 5. Support for the development of biofuels (SAF) 3,5 6. Talent attraction and retention 7. Emission of GHG in manufacturing processes Learn more: 3 3,5 4 4,5 5 Board of Directors’ Advisory Committee Executivos Figure 2: 2022 Materiality Matrix (GRI 3-2) 72
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S SUSTAINABLE DEVELOPMENT GOALS (SDGs) Embraer has been a signatory to the UN Global Compact since 2008 and maintains its ESG strate- gy aligned with the Sustainable Development Goals. The main SDGs related to the material topics are: 1 - No Poverty 4 - Quality Education 5 - Gender Equality 8 - Decent work and Economic growth 9 - Industry, Innovation and Infrastructure 13 - Climate Action Other SDGs are addressed by Embraer according to its strategic plan and ESG agenda. The complete list is available in the GRI content index. 73
ENVIRONMENTAL Indicators 74
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS 3.1.1. ENERGY Energy consumption within the organization (MWh) (GRI 302-1) Sources Types 2020 2021 2022* The units included for the construction of the in- Purchased and consumed fuel 83 739 1168 dicators of this topic are Belo Horizonte, Botucatu, Campinas, Embraer Equipment Division (EDE), Eugê- Purchased electricity** 27594 29868 14404 nio de Melo, Gavião Peixoto, Ozires Silva, São Paulo, Renewable Sorocaba, Taubaté, Fort Lauderdale, Jacksonville, Electricity generated*** - - 34 Macon, Melbourne, Nashville and OGMA (Aeronau- Renewable energy total consumption 27677 30607 15606 tical Industry of Portugal), which account for 94% of Embraer’s collaborators considering all its worldwide Purchased and consumed fuel 153856 158397 151757 units. In 2022, data coverage increased from 93% to 94% owing to the inclusion of the Campinas unit in Non-renewable Purchased electricity 136993 139702 142658 the scope. Consumptions of purchased electricity are stated on Non-renewable energy total Consumption 290849 298099 294415 the supply invoices. Data, as well as the invoices and Total energy consumption within the 318526 328706 310021 meters calibration, is audited internally and by a third organization (MWh) party, annually, within the scope of the Greenhouse Data coverage 92% 93% 94% Gas Inventory — GHG (Scope 2). Embraer’s GHG Inventory is being veri昀椀ed by LRQA do Brasil LTDA in accordance with to ISO 14064:2006. * In 2022, the Évora unit ceased to be part of the scope. Checking the Inventory 2022 is being done with a ** Purchased electricity: Biomass, solar, wind, PCH from incentivized energy sources without certi昀椀cate of origin (free energy market). *** Electricity generated: until 2021, electricity generated was demonstrated along with purchased electricity. As of 2022, this data will be reasonable level of trust and should be 昀椀nalized in published separately. April 2023. Note: (i) OGMA Units, in Portugal, and Sorocaba, in Brazil, use incentivized (renewable) electricity. (ii) Self-produced electricity refers to gene- ration for own use from photovoltaic panels installed in Ozires Silva. (iii) Renewable fuels include: biomethane, ethanol, and SAF (Sustainable Aviation Fuel). 75
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S In 2022, compared to 2021, there was a re- Fuel consumption within the organization (MWh) (GRI 302-1) duction in purchased renewable electricity, owing to the termination of the contract for Source Fuel 2020 2021 2022* incentivized energy supply in the Botucatu, EDE and Taubaté units (which together ac- Hydrous ethanol 83 143 166 counted for 17% of electricity consumption SAF – Sustainable Aviation Fuel - 596 682 purchased in 2021). It ought to be remarked Renewable Biomethane - - 320 that from 2024, the company will purchase and use 100% energy from renewable sour- Total renewable fuel 83 739 1168 ces in all Brazilian units. Diesel – Brazil 635 731 505 Overall, total fuel consumption decreased by Diesel BO 609 695 767 4% in 2022 compared to the previous year. Gasoline – Brazil 81 30 27 Gasoline 136 313 357 Aviation Gasoline 2 4 4 Non-renewable Lique昀椀ed Petroleum Gas (LPG) 1446 1395 1491 Natural Gas 51033 50956 47521 Aviation Kerosene 99905 104263 101022 Acetylene 2 2 2 Propane 7 8 61 Learn more: Total non-renewable fuel 153856 158397 151757 Advanced achievement of the 100% renewable electricity target * In 2022, the Évora unit ceased to be part of the scope. Note: (i) Although conservatively categorized as non-renewable fuels, “Gas - Brazil” and “Diesel - Brazil” contain additions of renewable fuels (i.e., ethanol and biodiesel, respectively). 76
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S Fuel consumption outside the organization (MWh) (GRI 302-2) Energy Management (RT-AE-130a.1) Source Fuel 2020 2021 2022* Indicator 2021 2022* Hydrous ethanol 1620 1825 3095 Total energy consumed Renewable (GJ) 1183214 1115955 Total 1620 1825 3095 % of energy it consumed that was supplied from grid 52 51 Diesel – Brazil 20181 20142 23022 electricity Gasoline – Brazil 681 741 1227 % renewable energy 9 5 Lique昀椀ed Petroleum Gas (LPG) 23 17 22 Non-renewable Natural Gas 0 0 0 Aviation Kerosene 7210 9068 28875** Total 28095 29968 53146 In 2022, the signi昀椀cant increase in aviation kerosene consumption was due to the increase of air travel. * In 2022, the Évora unit ceased to be part of the scope. ** Does not consider the estimated Aviation Kerosene consumption relative to the use of sold product category. Note: (i) This table considers energy consumption in sources categorized as Scope 3. (ii) Although conservatively categorized as non-re- newable fuels, “Gas - Brazil” and “Diesel - Brazil” contain additions of renewable fuels (i.e., ethanol and biodiesel, respectively). 77
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.1.2. EMISSIONS Direct (Scope 1) GHG emissions (tCO e) (GRI 305-1) GREENHOUSE GAS EMISSIONS 2 The company has been carrying out its Greenhouse Gas (GHG) Emissions Inventory in keeping with ISO 14064 Part I since 2009. From 2020 on, Gas 2020 2021 2022* Embraer increased the coverage of GHG Emissions data from 9 to 6 operating units, which has led to an increase in emissions. In 2022, the CO2 36721 38007 36504 Évora unit ceased to be part of the Embraer group, and the inventory started covering 15 unites, namely: Belo Horizonte, Botucatu, EDE, Eugênio HFC 5304 6497 4846 de Melo, Gavião Peixoto, Ozires Silva, São Paulo, Sorocaba, and Taubaté, in Brazil; Fort Lauderdale, Jacksonville, Macon, Melbourne, and Nashville, NO 251 266 230 2 in the United States, and OGMA, in Portugal. CH 16 17 19 Embraer’s GHG Inventory is being veri昀椀ed by LRQA do Brasil LTDA in 4 accordance with ISO 14064:2006. The veri昀椀cation of 2022 inventory is being taken with a reasonable level of con昀椀dence and should be completed PFC-218 0 0 0 in April 2023. Total 42292 44787 41599 Biogenic emissions 42 100 172 * In 2022, the Évora unit ceased to be part of the scope. Note: (i) The increase in emissions from biogenic sources is explained by the increase in the use of renewable energy sources by Embraer. 78
SUSTAINABILITY RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY INDICATORS EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Indirect (Scope 2) GHG emissions (tCO e) (GRI 305-2) Other indirect (Scope 3) GHG emissions (tCO e) (GRI 305-3) 2 2 Gas 2020 2021 2022* Gas 2020 2021 2022 CH 16 16 20 4 CH 1126 1122 1341 4 CO2 22874 30327 17840 CO2 10014 11238 15617363 NO 24 24 25 2 NO 155 161 202 2 Total 22914 30367 17885 Total 11295 12521 15618906 The CO2 emission factor of the National Interconnected System of Brazil posted a signi昀椀cant reduction in 2022 compared to 2021. This Biogenic emissions 1621 1421 1985 scenario contributed to the reduction of Scope 2 emissions. * In 2022, the Évora unit ceased to be part of the scope. 79
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S consumption of aviation kerosene – the emission factor used considers Other indirect (Scope 3) GHG (GRI 305-3) the entire fuel life cycle. Values were calculated considering the useful emissions by category (tCO2e) life of aircraft, the number of aircraft delivered in the reported year, and Categories 2021 2022 the average annual fuel consumption of each aircraft model. The value of delivered aircraft was taken from Embraer’s 昀椀nancial report. Other Purchased Goods and Services 3597 3165 information was estimated considering internal and external data on aircraft Collaborator Commuting 1071 1300 performance. The calculation methodology, as well as the entire inventory Waste Generated in Operations 5481 4785 of GHG emissions, is being validated by a third party, with a reasonable Transport and Distribution (Upstream) 1347 1359 level of con昀椀dence and following the guidelines of ISO 14064. Business Travel 2444 7605 Use of sold product - 15585195 Direct GHG emissions intensity (Scope 1) (GRI 305-4) Activities related to fuel and energy not included in - 15497 Scopes 1 and 2 2020 2021 2022 Total 13940 15618906 GHG total direct emissions (tCO e) 42292 44787 41599 2 The reach of Scope 3 was signi昀椀cantly expanded in 2022: (i) For the Annual revenue (Million US$) 3771 4197 4500 categories: Goods and Services purchased, Collaborator commuting Emissions by annual revenue 11,21 10,67 9,24 (tCO e / Million US$) (home-work), Waste generated in operations, Transport and distribution 2 (upstream), and Business trips, data reach was maintained, only Data coverage 92% 93% 93% considering the Brazilian units. (ii) The category of emissions associated with energy use, not included in scope 1 and 2, was included in all Indirect GHG emissions intensity (Scope 2) (GRI 305-4) operating units considered in the inventory. For this inclusion, emission factors available in the literature about the production processes of the 2020 2021 2022 energy consumed by the company were considered. (iii) Scope 3 emissions GHG total indirect emissions (tCO e) 22914 30367 17885 2 associated with the use of the product sold for commercial and executive Annual revenue (Million US$) 3771 4197 4500 aircraft were included. For accounting, the Technical Guide for Calculating Emissions by annual revenue (tCO e / Scope 3 Emissions – category 11 (GHG Protocol, 2022) was considered. Million US$) 2 6,1 7,2 3,9 The emissions from the use phase were calculated, resulting from the Data coverage 92% 93% 93% 80
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS OTHER ATMOSPHERIC EMISSIONS The values reported in 2022 refer to the production units Botucatu, EDE, Emissions of Ozone-Depleting Substances - ODS (t) (GRI 305-6) Eugênio de Melo, Gavião Peixoto, Ozires Silva, Taubaté, Melbourne, and Nashville. For the calculations, the technical standards of regulatory environmental agencies of each region are applied. Gas 2020 2021 2022* NO, SO , and other signi昀椀cant (GRI 305-7) X X atmospheric emissions (t) HCFC-22 0,09 0,08 0,06 Gas 2020 2021 2022* NO 36 57 53 x HCFC-141B 0,04 0,03 0,02 SO 1 4 1 x Persistent Organic 0 0 0 Pollutants (POP) Volatile Organic Compounds HCFC-124 - 0 0 (VOC) 16 89 78 Particulate Matter (PM) 14 55 37 Total 0,13 0,11 0,08 Total 67 205 170 * In 2022, the Évora unit ceased to be part of the scope. Note: (i) Emissions in tons of CFC-11 equivalent calculated through the Ozone Destruction Potential (ODP), as applied by the Montreal Protocol. Figures obtained at: http://www.epa.gov/ozone/ science/ods/index.html, (ii) In 2021, 3 international units (OGMA + ÉVORA + MLB) were included. 81
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.1.3. WATER AND EFFLUENTS EFFLUENTS WATER At Embraer, the environmental guidelines pertaining In 2022, data coverage increased to 94% compared to 92% in 2021, which is a result to wastewater generation are: of improvements in management that made it possible to include the following units: Campinas, São Paulo, Jacksonville, and Macon. Additionally, the indicator considers: • Compliance with legal, environmental, health, safety, Belo Horizonte, Botucatu, EDE, Eugênio de Melo, Gavião Peixoto, Ozires Silva, Sorocaba, 昀椀re prevention, and emergency requirements applica- Taubaté, Fort Lauderdale, Melbourne, Nashville, and OGMA. ble to the company’s business; • Prevention and response to pollution, respect for bio- Embraer has initiatives for the rational use and conservation of water, including: diversity, and concern about climate change; • Furtherance and enhancement of technology develo- • Reuse of treated ef昀氀uent in cooling towers and gas washers in EDE; pment, so that their products, processes, and equip- • Use of rainwater in toilets, gas washers, and 昀氀oor washing in Botucatu; ment cause less impact. • Reuse of treated ef昀氀uent for cleaning parts, in the painting booth, gas washers, and cooling towers in Ozires Silva; Data coverage for ef昀氀uents is 86% and considers • Reuse of ef昀氀uent treated by reverse osmosis, in an industrial process at the Taubaté unit; the following units: Botucatu, EDE, Eugênio de Melo, Gavião Peixoto, Melbourne, Ozires Silva, Taubaté, • Use of ef昀氀uents from other organizations in the Melbourne unit, for non-drinking use. Melbourne, and OGMA. 82
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS 3 (GRI 303-3) Water withdrawal by sources (m ) Water consumption in 2022 was within expectations even in the face of the company’s production increase. The high con- sumption occurring in 2021 was mainly connected to the need Water withdrawal 2020 2021 2022* for maintenance in industrial facilities, which resulted in an unexpected water consumption for the year. Surface water including lakes, rivers, - 0 0 The reduction observed in 2022 of 11% for the consumption of and streams water from a local concessionaire and 67% for rainwater mainly Groundwater 393146 517569 397825 resulted from the exclusion of the Évora unit from the scope. This unit accounted for 16% and 65%, respectively, of water Water withdrawal Rainwater directly collected and stored consumption from local concessionaire and rainwater. by sources by the company - 443 148 The Melbourne unit stands out in terms of water consumption, with 91% of the total water consumed coming from indirect reu- Third-party water 314270 275182 244258 se, that is, from the use of ef昀氀uents from other organizations. The Ozires Silva unit had a 30% reduction in water consump- Ef昀氀uent from other companies 94803 81156 88925 tion in 2022 compared to the previous year. This unit accounts for about 56% of total groundwater consumption. Total water withdrawal 802219 874350 731156 In relation to the OGMA unit, which accounts for 18% of the company’s water consumption, the strategy of outsourcing Data coverage 92% 92% 94% water-consuming processes contributed to a 5% reduction in consumption in 2022 vis-à-vis 2021. * In 2022, the Évora unit ceased to be part of the scope. Note: The consumption of water from local concessionaire, underground source, and rainwater was lower in 2022 mainly owing to the exclusion of Évora from the scope, a unit that is no longer part of the Embraer group. 83
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS 3 (GRI 303-4) Water discharge (m ) Water discharge 2021 2022* Surface water 84306 71107 Groundwater 0 0 Water discharge by destination Seawater 0 0 Third-party water 293699 299694 Third-party water and the volume of this total sent for use to other organizations 0 0 Total water discharge 378005 370800 Freshwater (≤1,000 mg/L total dissolved solids) - - Water discharge by freshwater and other types of water Other water (>1,000 mg/L total dissolved solids) - - Data coverage 86% 86% * In 2022, the Évora unit ceased to be part of the scope. Note: Indicators (i) fresh water and (ii) other types of water will be monitored from the next reporting cycle. 84
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS Total water discharge, separated by type (m3 (GRI 303-4) 3 (CDP W1.2) ) Recycled and Reused Water (m ) 2020 2021 2022* Water reused by the company 2020 2021 2022* Domestic 130828 258251 271755 Total amount of reused water 33213 38082 16761 Industrial 111438 119754 99045 Recirculation index 4,1% 4,4% 2,29% There was a 17% reduction in the disposal of industrial ef昀氀uent, which mainly results Water reuse within the organization was lower in 2022, mainly for the removal of the Évora unit from the scope. Another factor that contributed to due to the exclusion of Évora from the scope. In 2021, Évora the reduction was the strategy of outsourcing ef昀氀uent generating processes in the 3 accounted for 49% of direct water reuse, with about 18,700 m . OGMA unit from mid-2022. The Ozires Silva unit, which accounts for about 28% of domestic ef昀氀uent generation and where the largest number of collaborators is concentrated, posted a 44% increase in domestic ef昀氀uent generation, owing to the return of collaborators to the face-to- face and hybrid regimes, and also due to the increase in production in 2022. * In 2022, the Évora unit ceased to be part of the scope. Note: Domestic ef昀氀uents are accounted for by Embraer in the units where there is internal biological treatment. They are: Eugênio de Melo, Gavião Peixoto, Ozires Silva, Taubaté, and OGMA. In turn, industrial ef昀氀uents are accounted for by Embraer in units where there is internal treatment in ef昀氀uent treatment plants. They are: Botucatu, EDE, Eugênio de Melo, Gavião Peixoto, Taubaté, Melbourne, and OGMA. The Belo Horizonte, Campinas, São Paulo, Sorocaba, Fort Lauderdale, Jacksonville, Macon, and Nashville units do not generate industrial ef昀氀uents. 85
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS 3.1.4. WASTE Total weight of waste, sorted by (GRI 306-3,4,5 e RT-AE-150a.1) disposal method (t) Waste generation coverage refers to the Botucatu, Campinas, EDE, Eugênio Type Disposal method 2021 2022 de Melo, Gavião Peixoto, Ozires Silva, Sorocaba, Taubaté, Fort Lauderdale, Land昀椀ll 6 12 Jacksonville, Macon, Melbourne, Nashville, and OGMA facilities, which Recycling, Recovery and Reuse 367 120 account for 93% of Embraer’s collaborators considering all worldwide facilities. In 2022, the unit in Évora (Portugal) ceased to be part of the Composting 0 0 Embraer group. Incineration or Direct Burning (With Energy 0 0 Recovery) In Brazil and Portugal, accounting for about 95% of the waste generated, data is obtained through quanti昀椀cation in calibrated equipment (scales) Incineration or Direct Burning (No Energy Recovery 5 0 and audited annually under the Integrated System for Management of Health, Occupational Safety, and Environment (SIGMASS). In addition, Hazardous Waste Blend Formulation (For Co-Processing) 1230 1188 all management is performed in a public and transparent system (online waste platform), so that all entities involved in waste management (generator, Biological Treatment 0 0 carrier, temporary storage, receiver, etc.) and regulatory environmental Physical-Chemical Treatment 1357 1391 agencies have instant access to data and shipments, being able to audit, deny incoherent shipments, among other actions. Valorization* 186 345 In the units located in the United States, data is supplied by the companies Elimination * 2037 1553 responsible for the 昀椀nal disposal of solid waste. Others 0 6 Total hazardous waste generated 5188 4615 * Exclusive methods for Portugal units. Restatements of information (GRI 2-4): In 2021, coverage was stated to include Fort Lauderdale. However, this unit was only considered in 2022. 86
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS Total waste weight, separated by (GRI 306-3,4,5 e RT-AE-150a.1) Percentage of waste recycled (GRI 306-3,4,5 e RT-AE-150a.1) disposal method (t) 2021 2022 Type Disposal method 2021 2022 Total waste generated (t) 15913 17547 Land昀椀ll 1062 1832 % of hazardous waste recycled 7,1 28 Recycling, Recovery and Reuse 6715 7846 % of non-hazardous waste recycled 70 69 Composting 274 332 Data coverage 93% 93% Incineration Or Direct Burning (With Energy 845 1240 Recovery) Waste generation data, by type of disposal, is received, consolidated, and criti- Incineration Or Direct Burning (No Energy cally reviewed monthly by Embraer’s Health, Safety and Environment area. Mo- Recovery 1 0 reover, data is submitted to local leadership and vice presidencies, especially in Non- the context of the assessment of SIGMASS performance. hazardous waste Waste Blend Formulation (For Co-Processing) 510 730 The classi昀椀cation between hazardous waste and non-hazardous waste follows the legal and regulatory framework of the country where the waste is generated. Biological Treatment 230 254 In the scope of recycled waste, the following are considered: waste that undergo- Physical-Chemical Treatment 0 0 es a process of changing its physical, physical-chemical or biological properties, Valorization* 1087 691 with a view to transformation into inputs or new products; reuse of solid waste without its biological, physical or physical-chemical transformation; and reuse Elimination * 2 8 including the transformation of waste into a blend for co-processing purposes. Thus, the disposal categories included in this scope are: (i) recycling, recovery, Total non-hazardous waste generated 10725 12932 and reuse, (ii) composting and (iii) formulation of waste blend for co-processing. * Exclusive methods for Portugal units. 87
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S From 2022, the formulation of waste blend for co- In 2022 there was an increase in total solid waste processing (speci昀椀c to Brazil) was included in the generation. As concerns non-hazardous waste, two scope of recycled waste considering the speci昀椀c main factors contributed to the increase in this category legal protection (CONAMA Resolution No. 313/2002 of waste, (i) the increase in industrial production and and CONAMA Res. No. 499/2020) that includes (ii) the post-pandemic return of collaborators to face- co-processing in the category of reuse/recycling/ to-face and hybrid work regimes, which increased recovery. Co-processing is de昀椀ned as a 昀椀nal the generation of waste from restaurants, pantries, destination that involves the processing of solid and of昀椀ces. As regards hazardous waste, there was a waste as a substitute for raw material and/ or fuel reduction in generation owing to the exclusion of the in the clinker production furnace system, in the Évora unit, and the strategy of outsourcing production manufacture of cement. This inclusion explains the in OGMA. increase in the percentage of recycled waste in 2022. It is important to note that in Brazil incineration is a process subject to speci昀椀c regulations, not covering co-processing, according to CONAMA Resolution No. 313/2002. The “other” type of disposal includes hazardous NUMBER AND AGGREGATE waste generated at US units, classi昀椀ed according to QUANTITY OF REPORTABLE SPILLS; local regulations as Universal Waste ( EPA, 40 CFR QUANTITY RECOVERED: 273.9). Recovery and Disposal are exclusive methods There were no reportable leaks in 2022, according to for facilities in Portugal, pursuant to Directive the guidelines of indicator SASB (RT-AE-150a 2). Events 2008/98/EC. that occurred and that do not meet the criteria of this The category incineration or direct burning of non- indicator were reported to the regulatory environmental hazardous waste comprises wood waste generated agencies. Such events were promptly contained and in operations. Such waste is processed and managed in keeping with the regulations applicable to transformed into biomass for energy use. the locations where they occurred. 8888
SOCIAL Indicators 89
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.2.1. HEALTH, SAFETY, AND WELL-BEING (GRI 403-1) (GRI 403-2) Embraer seeks excellence in its occupational The management model applied in the Embraer health and safety performance, a topic consi- Business Excellence Program - P3E uses the con- dered a priority in the company. Hence, it car- cept of SQDC (Safety, Quality, Delivery, and Cost) ries out educational and preventive efforts on aiming at the standardization and optimization of an ongoing basis, in connection with the MASS the company’s operational and cost indicators. (Health, Occupational Safety, and Environment) In addition to the criteria of business excellence, policy, which is global in scope. Embraer has maintained in its largest manufac- All collaborators and partner companies (service turing units, for 19 years, international certi昀椀ca- providers) are covered by the Integrated Mana- tions such as ISO 14001. In 2021, the Brazilian gement System for Health, Occupational Safety, Units successfully achieved ISO 45001 certi昀椀ca- and Environment – SIGMASS. The staff consists tion, ensuring the implementation of all the tools of assistants, nursing technicians, occupational provided for in this requirement. This means that safety technicians, occupational safety engine- more than 88% of Embraer’s operations are cove- ers, coordinators and the Global Head of Health, red by these certi昀椀cations. Safety and Environment. Collaborators and workers who are not employed can report hazards and dangerous situations through the SIGMASS channel. In this channel, Learn more: communication is anonymous and supported by MASS Policy Embraer’s Compliance policy. Compliance Policy 9090
SUSTAINABILITY RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY INDICATORS EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Work-related injuries: Health and (GRI 403-9) Occupational Safety Work-related injuries - Collaborators Unit 2020 2021 2022 Work-related injuries - Contractors Unit 2020 2021 2022 Total number of fatalities N. 0 0 0 Total number of fatalities N. - - 0 Fatalities rate i 0 0 0 Fatalities rate i 0 0 0 The number of accidents with lost-workday N. 23 13 23 The number of accidents with lost-workday N. 4 5 8 (excluding fatalities); (excluding fatalities); The rate of accidents with lost-workday i 0,75 0,41 0,75 The rate of accidents with lost-workday i 0,52 0,34 0,24 (excluding fatalities); (excluding fatalities); The rate of accidents with lost-workday Unidade 2020 2021 2022 The rate of accidents with lost-workday Unidade 2020 2021 2022 by countries by countries Brazil i - 0,09 0,04 Brazil i - 0,27 0,24 United States i - 0,80 0,70 United States i - 0,07 0,30 Portugal i - 0 0,56 Portugal i - 0 0 Other countries i - 0 0 Other countries i - 0 0 Total i - 0,41 0,15 Total i - 0,34 0,05 Note: The data was calculated according to the regulatory standards in Brazil and OSHA (USA). Indexes were calculated based on 1,000,000 hours worked. 91
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S OCCUPATIONAL SAFETY AND HEALTH PROGRAMS (GRI 403-1, 403-2, 403-7, 403-8, 403-9, 403-10) Embraer’s Occupational Health Program is inten- ded to provide an occupational medical care service in the company’s units, as well as ensure the mo- nitoring of environmental conditions at work, thus allowing health and prevention of both occupational and clinical diseases. All collaborators are invited to carry out periodic oc- cupational examinations, which are carried out on- -site or in clinics accredited by Embraer. In addition, the occupational physician will visit the various are- as of the company, without prior notice and together with the staff of occupational engineers, in order to inspect the working conditions of collaborators. The company also relies on the process for surveying hazards and risks as a means to prevent and mitiga- te impacts on the health and safety of collaborators. This work is conducted by Embraer’s Health, Safety and Environment staff. 92
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS WELL-BEING PROGRAM (GRI 403-6) WELL-BEING WITH YOURSELF The Company offers a multidisciplinary staff Fostering of Health and Well-Being made up of nutritionists and psychologists to help collaborators achieve balance and quality of life. Number of collaborators participating This effort is targeted at collaborators who are Programs 2020 2021 2022 overweight, obese or have chronic diseases such as hypertension, cholesterol, dyslipidemia, diabetes. Well-being without smoking 10 3 18 and heart diseases and who want to have a healthier life. Well-being without drugs 63 26 23 Well-being with motherhood 0* 40 125 WELL-BEING WITH PHYSICAL ACTIVITY Well-being with yourself 369 211 556 The 30’ (thirty minutes) gym is a method implemented Well-being with physical activity 196 348 1011** by the Well-Being Program in concert with the Well-being 103 160 467 Embraer Sports Association (ADCE) since 2011 that aims mainly at general physical conditioning, in Vaccination program ** 32123 24682 27000 which aerobic capacities and muscular endurance are worked simultaneously. Circuit training, after Reinsertion program 228 124 - which the program is named: 30 minutes, consists Embraer on the move 4800 4800 2762 of an average of 16 activities called stations, in weight machines and gymnastics equipment (Swiss Prevention lives streaming sessions 1490 2032 1028 ball, dumbbells, elastic bed, etc.); in each station an execution time (昀椀fty seconds) is determined, and a Note: (i) The programs are offered to Brazilian collaborators, (ii) * Owing to the pandemic, the event was voice command determines the change of station. not held, (iii) ** This number includes collaborators and their dependents and (iv) In 2022 the company did not carry out the Reinsertion Program 93
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S WELL-BEING WITHOUT SMOKING WELL-BEING WITH THE FAMILY To support collaborators and their direct dependents who no longer want to smoke, Designed to assist collaborators who are ex- the company offers a therapy that helps smokers quit this practice, combining me- pecting a child, the company has assembled dication (nicotine replacement to minimize the physical symptoms of abstinence), two special courses for this moment, namely: and psychological support (to strengthen the emotional structure, encourage the The course for pregnant women, held every change of habit, and behaviors associated with smoking). All therapy and medica- six months online for both the collaborator tion are 100% paid by the company. who will be a father and the collaborator who will be a mother, and the course on paternity WELL-BEING WITHOUT DRUGS leave, exclusively for collaborators who will be parents. A group of quali昀椀ed professionals, with the support of specialized institu- Embraer grants maternity leave of 180 days tions working for the prevention and recovery of chemical dependence, is and paternity leave of 20 days. In addition, responsible for the therapy, which can be: the company also offers daycare allowance Outpatient: with individual therapy with specialists and participation in a to collaborators during the 昀椀rst 18 months af- weekly meeting in the exclusive Support Group for Embraer; ter returning from maternity leave. Hospitalization: depending on the disease stage, and if there is a need for hospitalization, there are specialized clinics and the hospitalization period can range between 30 and 45 days; Treatment for direct dependents: In general, the family of the addict needs support to be able to cope better with the disease, so family members are also offered treatment through a support group and individual therapy. The Program bears 100% of the expenses for the 昀椀rst hospitalization and outpatient treatment. 94
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S WELL-BEING Designed to take care of the mind and body, this initiative offers free On-Call 24 hour: A hotline designed to serve collaborators and direct care with a psychologist with immediate support. dependents, at a distance, and assist them, at any time, in emergency Digital Health: A mobile service, in which all those assisted by the situations, such as: Bradesco Saúde insurance have medical care through the app with • Funeral assistance to collaborators and direct dependents; professionals registered throughout Brazil. • Accidents at work, traf昀椀c, and others; Mindfulness and Self-Care: A time of the day to take care of yourself. • Authorization for emergency care relating to the health or dental 15 minutes of the day are totally dedicated to self-care, with different insurance; types of activities. On-site health care and occupational care: Those who work 100% on- • Emergency assistance to collaborators on business trips. site or in the hybrid model can count on this bene昀椀t. Occupational and Assistance Care is a medical outpatient clinic with a health staff always ready to support collaborators, in the case of complaints, questions, or medical referrals. Prevention Live Streaming Sessions: Prevention Live Streaming Sessions are part of the live streaming sessions track at EMpower, which address topics relating to food, sleep quality, integrative medicine, and much more. Multidisciplinary Well-Being Team: A team ready to listen and give full support to collaborators. Embraer offers a staff dedicated to exclusive well-being care, Healthcare staff, and the care of medical and dental insurance operators, to provide the necessary support on a daily basis. 95
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S VACCINATION BENEFIT HEALTH AND DENTAL HEALTH INSURANCE Vaccines are effective, preventing INSURANCE Embraer offers a Regional and Na- and reducing the spread of disea- Embraer offers four types of dental tional health insurance, with ac- ses. As a way to further the health insurance for all collaborators and commodation in a ward and apart- of its collaborators and direct de- their legal dependents, and the ba- ment, for all collaborators and their pendents, Embraer offers the Vacci- sic insurance (mandatory coverage) legal dependents, with the com- nation Bene昀椀t, where the company is 100% funded by the company, pany’s participation in the monthly participates with 80% of the value of currently there are 31,500 people fees ranging from 70% to 100% of some vaccines that are not offered using the dental insurances bene- the costs. In 2022, 35,000 people by the government, as well as the 昀椀t. were assisted by the plans. annual 昀氀u vaccination campaign. In 2022 circa 27,000 people were be- ne昀椀tted. PHARMACY BENEFIT LIFE INSURANCE LABORATORY IN THE UNITS This bene昀椀t consists of Embraer’s The company offers its collabo- Thinking of allowing increased prede昀椀ned 昀椀nancial participation rators and trainees a Group Life convenience in the daily lives of in the purchase of prescription Insurance. collaborators, encouraging them drugs by collaborators and their di- to keep their exams up to date, rect dependents. the company offers, at the São José dos Campos unit, the servi- ces of Laboratório Clínico Sabin. 96
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS 3.2.2. TALENT MANAGEMENT Collaborator training (GRI 404-1) 2021 2022 2021 2022 Average hours of training by gender and collaborator Men Women Men Women Average hours of training by gender and collaborator category category Men Women Men Women Total number of training hours 6045 2958 7191 4468 Total number of training hours 316 48 572 0 Administrative Total number of collaborators in the category 325 226 335 228 Average training hours per collaborator 18,6 13,1 21,5 19,6 Pilot Total number of collaborators in the category 78 1 84 0 Total number of training hours 60349 12273 87790 20560 Average training hours per collaborator 4 48 6,8 0 Engineer Total number of collaborators in the category 2930 511 3026 553 Total number of training hours 60814 53281 51223 43581 Average training hours per collaborator 20,6 24 28,7 37,2 Professional Total number of collaborators in the category 1391 1056 1588 1169 Total number of training hours 10398 5877 12599 11102 Average training hours per collaborator 43,7 50,5 32,3 37,3 Internship Total number of collaborators in the category 387 253 310 236 Average training hours per collaborator 26,9 23,2 40,6 47 Total number of training hours 68899 7090 87886 8996 Total number of training hours 29577 4565 24522 5332 Technician Total number of collaborators in the category 1949 222 1932 194 Leadership Total number of collaborators in the category 815 120 797 148 Average training hours per collaborator 35,4 31,9 45,5 46,4 Average training hours per collaborator 36,3 38 30,8 36 Total number of training hours 438765 107546 535510 128738 Total number of training hours 202367 21454 263727 34699 Total number of collaborators in the category 5304 499 5908 719 Total Total number of collaborators 13179 2888 14016 3247 Operational Average training hours per collaborator 38,2 43 44,6 48,3 Average training hours per collaborator 33,3 37,2 38,2 39,6 97
SUSTAINABILITY RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY INDICATORS EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Investment on collaborator’s training and education (GRI 404-1) PERFORMANCE ASSESSMENT (GRI 404-3) Investment on training and development 2020 2021 2022 Annually, between January and April, Embraer carries out the Performance Assessment Process, with the purposes of assessing the performance of Average hours by training and development by the entire company, using the Nine in Box* Matrix tool. Thus, 100% of FTE [hours] 14 34 38 collaborators are assessed and evaluated from two perspectives: Average expenditure on training and 1. Result development by FTE (US$) 13 48 78 2. Behavior After the closing of the process, the leader conveys to his team, individually, the results of the performance assessment of each collaborator through performance feedback. One of the outputs of the performance process is the merit cycle, taking into consideration the result of the Performance Assessment. Thinking about the future, Embraer annually carries out the Potential Assessment, a process that assesses the potential of our collaborators to take on new challenges. Thus, while the Performance Assessment Process looks into the past, the Potential Assessment looks to the future, making the talent management process robust and helping in the construction of Embraer’s succession process, that is, if any leader leaves the company, Embraer already knows which other professional has the ideal pro昀椀le to hold the position. *Tool used to assess the performance of collaborators of a company, allowing to sort professionals in groups, and take speci昀椀c efforts to improve the performance of each one. 98
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S EDUCATION ECOSYSTEM Young Lean ACCELERATING CAREERS Aprentice (GRI 404-2) Embraer Leader Internship Supply Embraer fosters the culture of learning and believes Social Tech Chain that each professional is the main player in their own career, and that continuous investment in Engineering Specialization Operations the training and quali昀椀cation of people will Program (PEE) always be a competitive edge. The company relies on an ecosystem of knowledge generation and dissemination, through partnerships and training initiatives, and empowerment of new talent Embraer Partners of Culture & Procurement Designer Knowledge EMPOWER Diversity encouraged to create the most innovative products in the industry of the future. Throughout the year, Embraer provides educational programs aligned with market trends, always attentive Embraer on Route to Business to people’s different career moments and plurality. Diversity In all these programs, topics such as diversity and Engineering respect for people are worked on, in line with the Acceleration Education Engineering Program Incentive Languages company’s culture and strategic goals, supported by (ACE) Program an active and permanent learning process. Manufacturing Engineering Corporate Training Program Strategic Academies Educational Programs 99
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S SELF-DEVELOPMENT PLATFORM CORPORATE ACADEMY Tuned in digital transformation, the self-improvement platform within Empower enables collaborators to set their Underscoring its commitment to be a com- learning goals in line with their career planning. It relies on an pany recognized by Ethics & Compliance, arti昀椀cial intelligence system that chooses and recommends since 2017 Embraer has been applying the content for each individual, pursuant to their skills and areas online training in its Code of Ethics for all of interest. collaborators. The content is available glo- bally and is part of the mandatory training track for all new collaborators. In this same track, collaborators also com- LEADER‘S ACADEMY plete the following courses: Occupational Safety, Business Planning, Performance It covers the entire leadership lifecycle, from onboarding to Assessment, Data Protection, Coronavirus training and long-term development efforts targeted at the Prevention, and Corporate Intellectual Pro- implementation of corporate strategy. In 2022, the company perty Policy, which amount to circa 6,000 maintained the pillars of leadership development (Culture, hours of participation in 2022. Business, People Cycle, Future of Work, and Diversity), offering programs focused on Hybrid Management, Cultural Evolution, Lean Leadership, Performance, and Potential, Labor Relations, among other relevant topics. Overall, there were 13,828 participations, totaling about 30,000 hours of development for the Embraer leadership. 100100
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S ENGINEERING ACADEMY As a means to strengthen the aeronau- As for the Product Development pillar in tical culture, the training of engineers, 2022, there was an evolution of educa- technicians, and engineering professio- tional methodologies and several tracks nals, establish a systemic vision of pro- were designed on the EmPower self-de- ducts, and foster collaborator careers’ velopment platform, in virtual format, improvement, Embraer offers develop- following the trends of digital transfor- ment solutions aligned with the busi- mation and making available to partici- ness strategy. In 2022, the engineering pants the resource of arti昀椀cial intelligen- academy restructured its curriculum, ce for real time knowledge assessment. having as contributors several profes- The technical career tracks containing sionals and specialist areas, and setting 15 macro topics were also created and 3 guiding pillars of education, namely: unfolded in more than 40 educational Soft Skill, Management and Business, routes, planned to occur in 2023 through and Product Development. synchronous classes and asynchronous Regarding the Soft Skill pillar, still in content availability. 2022, 27 classes were planned for the year 2023. For Management & Business, more than 15 relevant topics were ma- pped, in the realms of operational ma- nagement, 昀椀nance, and business strate- gic vision, which will be provided during the year in a gradual way, in a format of live streaming sessions to collaborators. 101
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S ACADEMY OF OPERATIONS BUSINESS ACADEMY SUPPLY CHAIN ACADEMY It provides a Quali昀椀cation Program aimed at In 2022, the company focused on building the Ma- It was created by the Supply Chain and Logisti- collaborators who work in the manufacture of terials Solution Academy of the Vice Presidency cs area with the mission of training collabora- aircraft. In 2022, there were 47,968 participa- of Services and Support (VSS), making a diagno- tors in concepts and best practices of supply tions in quali昀椀cation courses, totaling 182,279 sis of the knowledge and skills required for the chain management, on top of shaping attitu- hours of training. current and future moment, and working on so- des, posture, and raising people’s drive, so that The courses are structured in curricula accor- lutions to enhance outcomes through a duly trai- they make the necessary changes in processes ding to requirements for performance in the ned team. The academy is still under construction, and continuous evolution in the pursuit of ex- production process. The de昀椀nition of these with the provision of new training and efforts to cellence. In 2022, knowledge pills were started, requirements is carried out in concert with be developed, however, some training identi昀椀ed in which are fast courses, two hours long, provi- representatives of quality, engineering, safe- this diagnosis stage has already been carried out, ded by internal facilitators, in addition to soft ty, and human resources. Internal procedures such as: Storytelling, Presenter Communication and hard skills development programs. Overall, and normative requirements for each process (oratory), Visual Communication/ slides, Negotia- 59 classes were held, with 1,242 attendees, and are considered. tion, Decision Making, Onboarding, in addition to 191 learning hours. To date, this academy has speci昀椀c technical training. 65 courses in its tracks. In-person, remote, online, and hands-on lear- It is also worth mentioning the creation of a mul- ning solutions are offered to enhance collabo- tidisciplinary working group (with Defense & Se- rators’ experience during the learning process. curity, IT, Engineering, and HR) for discussions on Some quali昀椀cation tracks have been extended the topic Cybersecurity, as well as the construc- to overseas sites where new local internal fa- tion of an academy through the stages of diagno- cilitators have been trained to ensure knowle- sis and learning strategy. The next stages are still dge management and speed in the delivery of under discussion and should have developments learning solutions. during the year 2023. 102
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S PROCUREMENT ACADEMY LEAN ACADEMY CULTURE AND DIVERSITY ACADEMY Lean Academy is one of the pioneering academies and applies This academy aims to ensure the to all areas of the company. It was born as the training program Among the accomplishments of the training of procurement profes- of P3E (Embraer’s Business Excellence Program) with a view to year 2022, it is worth emphasizing sionals based on the required furthering organizational learning and disseminating the Lean the development of the concept of skills of each position to meet philosophy. The Lean philosophy is part of the cultural foundation the “Culture Flight” journey, and Embraer’s business and strate- of Embraer’s strategic plan. The tracks of this academy involve all the launch of the “Our Culture with gy needs. By building a learning professional categories and aims to make Lean knowledge always Diversity” training, 昀椀rst of this tra- journey by position/area, it prio- available and accessible. In 2022, training started on Dojos, which ck, in an asynchronous, gami昀椀ed ritizes key procurement skills are Lean practical learning rooms. online format, for all collaborators revolving around business know- Two important programs were created for operations using these in Brazil, USA, EMEA*, and Asia. ledge, technical knowledge, and rooms, Dojos – Lean Leadership, and Lean Attitudes for Coaches. behavioral skills. The academy Besides, two other classes of the has 27 development topics ma- Other programs developed were: Of昀椀ce Floor Management for the Psychological Safety Training for pped in its tracks, 3,600 parti- Compliance area, track for the continuous improvement agent, Operations Leaders were held, cipations and more than 11,500 and training of Lean Agile Coaching consultants, training these along with conversation circles training hours. professionals in new skills to support the future challenges of with leaders, coaches, and teams digital transformation. of Botucatu Operations to discuss The academy brought 41 synchronous online courses and 14 concepts and situations experien- remote learning courses, thus fostering education without borders. ced involving diversity, equity, and The Lean academy 昀椀gures are quite impressive: 64 courses, 457 inclusion. sessions, 840 training hours, involving about 30,000 participations. *Europe, Middle East and Africa A fact that demonstrates the importance of this topic for Embraer staffs was that in 2022 Lean was the second largest skill searched on EmPower. 103
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S PEE – ENGINEERING SPECIALIZATION PCEM – MANUFACTURING ENGINEERING PROGRAM TRAINING PROGRAM In the context of training and development, in 2022 This program was designed with the aim of diagnosing there was an investment of approximately BRL 5 and developing current and future skills required by the million in this major training initiative. PEE, carried business in order to further knowledge management and out in partnership with the Technological Institute the necessary readiness of people for the advances of of Aeronautics (ITA), offers the Professional Master’s manufacturing engineering by 2025. Degree in Aeronautical Engineering to selected Launched in August 2022, it has engaged more than participants who are interested in working in the 70 professionals, and achieved 500 hours in program aviation segment. Classes are taught by professionals structuring, in addition to 2,000 hours invested in the of Embraer and professors of ITA, and students have preparation of contents and tracks. During 2022, 50 the chance to be admitted by Embraer after the courses were held, 34 classes with 887 participants, program is completed. In 2022, 61 engineers attended including engineers, analysts, and technicians. The the program. Between July and August 2022, 22 classes developed soft and hard skills through internal engineers were hired by Embraer. facilitators and consulting from the market. PCEM is based on two phases, the 昀椀rst being a general alignment of concepts and the second focusing on the PES – SOFTWARE SPECIALIZATION PROGRAM future of manufacturing and engaged professionals, where topics of industry 4.0 are addressed, with a view In 2022, an investment of approximately BRL 1.4 to developing the necessary skills for the evolution of million was made in this training initiative, with a view processes and practices and mindset in the face of digital to meeting the new demands and opportunities of the transformation. Another front of PCEM is the technical current global scenario. The 2022 outcomes were hi- tracks, which are being built by dedicated experts and will ghlighted on page 23 of the 2022 Annual Report. be made available gradually in 2023. 104
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S ACE – ENGINEERING ACCELERATION PROGRAM LANGUAGE ACADEMY The Engineering Acceleration Program (ACE) released its Embraer has expanded the development po- 昀椀rst class with 35 collaborators graduated in 2022. ACE is licy in the language area, doubling down on targeted at training collaborators having up to 12 months the business focus, with more robust, con- in the company and new hires in 34 courses broken down centrated, and effective ways to accelerate into the Pillars of Culture, Aeronautics & Business, MAnnual the language learning of our collaborators, of Excellence in Engineering and DIP, Technical Concepts, with the purpose of meeting the company’s Procedures and Tools, Engineering and Soft Skills, and 100% challenges globally, investing in retention of the training is administered by Embraer’s specialized and bene昀椀tting from the resulting improved facilitators over a 12-day period. students’ performance. In 2022, Embraer started a new partnership with the company Lingopass, providing a digital study model, which addresses more DIVERSITY ROUTE strongly the need for protagonism and en- gagement of student, continuing to meet Held in partnership with Senai of São José dos Campos the company’s needs with a good level of and Araraquara, the program focuses on training people customization and great 昀氀exibility. With all with disabilities for the labor market, offering theoretical the changes and the need to ensure grea- training and practical training in the company. The allocation ter robustness, the program evolved into the is performed according to the pro昀椀le of the vacancies. The Languages Academy, with the entry of 181 program has contributed to increasing the employability new students in the second half of 2022, of people with disabilities, since 2019 about 100 people closing the year with a total of 352 students have been trained and some continue to pursue careers in and with a great prospect of increasing this various areas of the company, such as Production, Quality, number in 2023. Engineering, Logistics, and Administrative. 105
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S KNOWLEDGE PARTNER EDUCATION INCENTIVE PROGRAM YOUNG APPRENTICE Owing to the unremitting search It aims to further the recognition and development of One of the practical initiatives for the cons- for knowledge, innovation, and collaborators, through subsidies for Graduate, MBA, tant improvement and responsible insertion technology, the company refor- Master’s, PhD and Postdoctoral Programs, taking the of adolescents in the world of work is the mulated the Knowledge Partner organization’s strategy and business needs into account. Young Apprentice Program. In such program’s Program in which the training of Applicable to all collaborators with an inde昀椀nite scope, young people are helped through le- instructors began to be conducted employment contract in all Embraer units. arning to develop habits necessary for entry by Embraer professionals, mitiga- and permanence in the labor market. The ef- ting the need for suppliers, which forts developed with them are targeted at en- brought greater quality associated couraging the development of their autonomy, with a lower cost. EMBRAER INTERNSHIP allowing the search for improving the quality In 2022, the Virtual Facilitation of life, decision-making, building healthy af- Training was created with a view The program was structured targeted at a better experience fective relationships, recognizing themselves to accelerating the online develo- for trainees during their journey at Embraer, aiming at the as active players and participants within their pment of new and capital distan- development of behavioral skills, and the retention of new talent social group. The 2022 outcomes were highli- ce facilitation skills that make a for the company. In addition to their everyday challenges, they ghted on page 23 of this report. difference in the development of were also responsible for creating a project that contributed people and Embraer’s results. In to their respective areas, from process improvements to the order to recognize, develop, and creation of something new, either a service or product. In further improve Embraer’s internal addition to the project module, in 2022 the company’s Culture instructors, the company is deve- Pillars, Soft Skills topics and more knowledge about Embraer’s EMBRAER SOCIAL TECH CAREERS loping an exclusive academy for Business Units were addressed. The 2022 outcomes were this audience, which will be global. highlighted on page 108 of this report. The 2022 outcomes were highlighted on page 25 of the 2022 Annual Report. 106
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS New Collaborator Hires (GRI 401-1) New hires Unit 2020 2021 2022 Total number and rate of new collaborator hires by country Unit 2022 Total number of new collaborator hires N. 962 1909 3371 N. 2831 Rate of new collaborator hires % 5,6 12,7 19,5 Brazil % 84,0 N. 497 United States Total number and rate of new collaborator hires by gender Unit 2022 % 14,8 N. 858 N 2 Women Portugal % 25,5 % 0,06 N. 2492 Men Other countries N 41 % 73,9 Total number and rate of new collaborator hires by age group Unit 2022 New hires - STEM Unit 2022 N. 1598 Under 30 years old N. 199 % 47,4 Women N. 1567 % 26 30-50 years old % 46,5 N. 561 N. 206 Men Over 50 years old % 6,1 74 107
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S Collaborator Turnover (GRI 401-1) Turnover Unit 2020 2021 2022 Total number and rate of collaborator turnover by age group Unit 2022 Total number of collaborator turnover N. - - 1347 N. 243 Under 30 years old % 18 Rate of collaborator turnover % 19,5 10,6 8,1 N. 902 30-50 years old Volunteer total number of collaborator turnover N. - - 956 % 67 N. 202 Volunteer rate of collaborator turnover % 3,1 5,4 6,0 Over 50 years old % 15 Total number and rate of collaborator turnover by gender Unit 2022 Total number and rate of collaborator turnover by country Unit 2022 N. 888 N. 245 Brazil % 65,9 Women % 18,2 N. 427 United States % 31,7 N. 1094 N. 1 Men Portugal % 0,1 % 81,2 Other countries N. 31 108
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS Return to work and retention of collaborators that took parental leave (GRI 401-3) Total number of collaborators that were entitled to Unit 2022 Return rate of collaborators that took parental leave, by 2022 parental leave, by gender gender Women N. 3.011 Women % 95,6 Men N. 13.706 Men % 96,7 Total N. 16.717 Total % 96,4 Total number of collaborators that took parental leave, Total number of collaborators that returned to work after by gender Unit 2022 parental leave ended that were still employed 12 months Unit 2022 after their return to work, by gender. Women N. 114 Women N. 174 Men N. 390 Men N. 702 Total N. 504 Total N. 876 Total number of collaborators that returned to Unit 2022 Retention rate of collaborators that took 2022 work after parental leave ended, by gender parental leave, by gender Women N. 109 Women % 91,1 Men N. 377 Men % 95,1 Total N. 489 Total % 94,2 109
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS Collaborators (GRI 2-7) (GRI 2-8, GRI 2-30) Female Male Other* Not Total The number of collaborators was con- informed sidered as the sum of all collaborators, Total number of collaborators 3247 13988 0 28 17263 including trainees and apprentices hired directly by the company. For the number Total number of permanent collaborators 2902 13528 0 28 16458 of temporary collaborators only those hi- Total number of temporary collaborators 345 460 0 0 805 red for a 昀椀xed period, interns, and appren- tices were considered. For the number of Total number of non-guaranteed hours collaborators 0 0 0 0 0 part-time collaborators, all collaborators Total number of full-time collaborators 2945 13576 0 28 16549 with a workload of less than 8 hours per day were considered. Total number of part-time collaborators 302 412 0 0 714 In 2022, the company had 1,851 worke- *The gender above is self-declaratory. rs who are not collaborators, but whose work is controlled by Embraer. The most Brazil United Portugal Other Total common types of workers in this cate- States Countries gory are associated with housekeeping, Total number of collaborators 14960 1962 17 324 17263 restaurant services, property security, computer services, logistics, and tooling Total number of permanent collaborators 14203 1956 8 291 16458 engineering (GRI 2-8). Total number of temporary collaborators 757 6 9 33 805 100% of collaborators are represented by Total number of non-guaranteed hours collaborators 0 0 0 0 0 an independent union or covered by col- lective bargaining agreements (GRI 2-30). Total number of full-time collaborators 14249 1962 14 324 16549 Total number of part-time collaborators 711 - 3 0 714 110
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S BENEFITS (GRI 401-2) Embraer has a broad package of bene昀椀ts that covers 100% of its collaborators across the globe, which may have small differences owing to market practices and local reality of the country or region in which it is located. In Brazil, where more than 85% of its work- force is allocated, the bene昀椀ts offered by the company are: Health Insurance, Dental Insurance, Life Insurance, Private Pension, restaurants in the operating units, Meal Vou- cher, Food Voucher, Maternity Leave of 180 days and paternity leave of 20 days, 昀氀exible working hours, alternative work models such as 100% remote and hybrid, Day Care Allowa- nce, Pharmacy Bene昀椀t, and Vaccine Bene昀椀t. 111111
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.2.3. DIVERSITY Diversity in Governance Bodies (GRI 405-1) Composition of Governance body Unit 2020 2021 2022 Women % 9 15 15 Men % 91 85 85 Under 30 years old % 0 0 0 30-50 years old % 8 8 8 Over 50 years old % 92 92 92 Total people number N 11 13 13 Restatements of information (GRI 2-4): In the previous Annual Sustainability Report (accounting year 2021), the total of 11 people composing the Board of Directors was reported, but the accurate information is 13 people, as reported in report 20F-2021 page 87. The composition of the board remains the same for accounting year 2022. 112112
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS Workforce composition by gender and collaborator category (GRI 405-1) Collaborator’s diversity Gender 2020 2021 2022 Collaborator’s diversity Gender 2020 2021 2022 Women (%) 43 41 40 Women (%) 8 9 11 Men (%) 92 90 89 Men (%) 57 59 59 Operational Administrative Not informed (%) - - 0,4 Not informed (%) - - 0,2 Total people number 5870 5803 6627 Total people number 571 549 563 Women (%) 0 1 0 Women (%) 15 15 15 Men (%) 100 99 100 Pilot Not informed (%) - - 0 Men (%) 85 85 85 Engineer Total people number 81 79 84 Not informed (%) - - 0 Women (%) 43 43 42 Total people number 3383 3441 3615 Men (%) 57 57 58 Professional Women (%) 36 41 43 Not informed (%) - - 0 Men (%) 64 59 57 Total people number 2280 2447 2757 Internship Women (%) 10 10 9 Not informed (%) - - 0 Men (%) 90 90 91 Total people number 436 640 546 Technician Not informed (%) - - 0,05 Women (%) 12 13 16 2086 2171 2126 Men (%) 88 87 84 Women (%) 17 18 19 Leadership Men (%) 83 82 81 Not informed (%) - - 0 Total Not informed (%) - - 0,2 Total people number 936 935 945 Total people number 15643 16067 17263 113
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS Workforce Composition by Age Group (GRI 405-1) Women in Leadership (GRI 405-1) Unit 2020 2021 2022 Women in leadership (%) 2020 2021 2022 Under 30 years old % 18 15 19 30-50 years old % 70 74 69 Women’s participation in total workforce 18 18 19 Over 50 years old % 12 11 12 Women’s participation in all management positions, including junior, medium and high 15 13 16 Women’s participation in junior management positions, i.e. 16 15 17 Ethnicity and Other Minorities (GRI 405-1) 昀椀rst level of management Workforce composition - Ethnicities and other 2020 2021 2022 Women’s participation in high management positions i.e. no minorities (%) more than two levels apart from CEO or comparable positions 11 13 15 Asian 2 2 2 Women’s participation in managerial positions in revenue- 17 8 0 Black or African American 12 13 13 generating functions (e.g. sales) White 86 85 71 Women’s participation in positions related to STEM (Science, 19 17 17 Technology, Engineering and Mathematics) Indigenous - - 0,05 Not informed - - 14 Restatements of information (GRI 2-4): (i) In the previous Annual Sustainability Report (accounting year 2021), it was reported that the total participation of women in management positions in reve- People with disabilities 4 5 5 nue-generating positions was 30% in 2021, but this number accounted for all women, regardless of whether they hold management positions. From this report, only women in management positions (junior to senior) will be accounted for. (ii) Embraer accounts for positions that have the word sales, Note: For people with disabilities, data was considered only from units in Brazil. and intends to improve this parameter in the future to encompass other revenue-generating roles. 114
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS Gender Pay Indicators (GRI 405-2) Ratio of the basic salary of women to men for each collaborator % 2022 category Administrative % 86 Engineer % 90 Internship % 100 Leadership % 87 Operational % 74 Pilot % - Professional % 89 Technician % 74 Gender Pay Indicators (GRI 405-2) Indicator Unit Difference between men and women collaborators Mean gender pay gap % 8% Median gender pay gap % 0% Mean bonus gap % 14% Median bonus gap % 5% Note: Data Coverage (% FTEs): 95% (Apprentices, Interns, and Eve collaborators were not considered). 115115
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S COMPENSATION POLICIES APPLIED TO MEMBERS OF THE HIGHEST GOVERNANCE BODY AND SENIOR EXECUTIVES (GRI 2-19) Embraer currently has a Management STATUTORY BOARD Compensation Policy in force that co- vers all directors and the Executive The total compensation sums are planned an- Bene昀椀ts: Group Life Insurance, Health Insurance, and Compensation Policy, which encompas- nually based on market research with compa- Private Pension in the same way offered to Embraer’s ses all its executives, and its last reviews nies of equivalent size, complexity, and challen- collaborators. were approved by the Board of Directors ges to those of Embraer. Through these surveys, Short-Term Incentives (“ICP”): Board members are on October 26, 2018 and November 11, we seek to de昀椀ne not only the amounts paid, entitled to variable compensation and are eligible to 2021, respectively. but also the proportionality of its components participate in short-term incentive plans as a reward Both aim to attract and retain highly (Fixed and Variable Compensation, Short Term, for achieving goals that support Embraer’s short-term quali昀椀ed professionals who are alig- and Long Term). The company prioritizes the re- strategy. ned with the company’s principles and tention of its executives and aims to maintain values and with the shareholders’ ob- and attract highly quali昀椀ed of昀椀cers and key per- Long-Term Incentives (“ILP”): Board members are eli- jectives. With that in mind, the com- sonnel, aligning their interests with those of its gible to participate in long-term incentive plans, which, pany guides its policies by following up shareholders. In addition, the purpose is to en- through a phantom share mechanism and the Stock the external environment and annually sure that executives who effectively contribute Option Program, reward executives for achieving goals compares compensation practices with to the best performance of the company and its that support the company’s medium and long-term reference markets, composed of compe- securities participate in the result of their con- strategic objectives. ting companies in the segments in whi- tribution. ch it operates, Brazilian multinationals, Fixed Compensation: it is de昀椀ned annually publicly traded companies or those that from the market references. The Board of Direc- Learn more: have a compensation strategy similar to tors adjusts such amounts to the extent it de- Management Compensation Policy that which Embraer practices. ems necessary each year. 116
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S BOARD OF DIRECTORS PROCESS FOR DETERMINE (GRI 2-20) COMPENSATION The members of the Board of Directors receive a 昀椀xed monthly fee and are offered, optionally, Group Life Insurance and Health Insurance, provided that they assume all the inherent costs. Embraer’s compensation practices and policies There is no variable compensation for this body. It is understood that the exclusive payment of a consider applicable laws and general market 昀椀xed compensation to the members of the Board of Directors is intended to be in line with best practices or by segment, as well as the cou- market practices. ntry and region where the company operates. The de昀椀nition, implementation and/or change of bene昀椀ts go through market analysis, econo- PERFORMANCE INDICATORS (GRI 2-19) mic/ 昀椀nancial feasibility assessments, as well as their impact on the compensation package The performance indicators that are taken established speci昀椀cally in the Plan. of Embraer collaborators. into account to ascertain the short-term In the Short-Term incentive, the amount to variable compensation are (i) annual asses- The Board of Directors annually assesses the sment of the “Action Plan”, an instrument be actually distributed to the executives company’s compensation policy, upon recom- signed with each statutory and non-statu- each year is linked to the respective indi- mendation of the People and ESG Committee, tory of昀椀cer annually containing the results vidual Action Plans and its calculation will which has this topic as a recurring agenda in intended by Embraer for that year and the vary directly with the achievement of the its meetings. efforts planned for each one, so that such results de昀椀ned therein. The content of the results are achieved; and (ii) the result of Action Plan is reviewed annually through the Business Planning cycle and approved ANNUAL TOTAL (GRI 2-21) the company’s overall performance. by the company’s Board of Directors. COMPENSATION RATIO Thus, ICP and ILP compensation vary ac- Therefore, each executive is assessed an- The ratio between the total annual compensa- cording to the company’s economic results nually according to the achievement of tion of the highest paid individual in the organi- and operating result. ICP is impacted by the their speci昀椀c Action Plan and their short- zation and the average total annual compensa- assessments of the individual Action Plans, -term variable compensation is in昀氀uenced tion of all collaborators (excluding the highest ILP is related to the appreciation of the sha- by this result. paid) in 2022 was: 38.3 times, excluding ILP — res in the company and performance goals Long-Term Incentive. 117
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.2.4. SUPPLIER ASSESSMENT (GRI 3-3) Supply Chain Management is a strategic and procedures that de昀椀ne the requi- area led by highly quali昀椀ed people, con- rements concerning respect for privacy, necting Embraer’s business needs to the handling of con昀椀dential information, anti- global supplier base, ensuring value ge- trust laws, anti-corruption practices, pre- neration within the highest standards of vention of money laundering, and social ethics, transparency, and Compliance. and environmental requirements, should Embraer has a large and intricate supply be followed and respected by all those in- chain, made up of two categories of su- volved in the procurement processes. pply (direct and indirect), which account Any and all procurement processes for more than 3,500 suppliers in 62 coun- should be based on the principles of in- tries around the world. tegrity and competitive equality, as a me- The company’s Global Procurement Policy ans to ensure that the procurements of is intended to establish the guidelines for goods, services, and industrialization of the procurement of goods, services, and the company are made seeking to achieve industrialization of products to meet the the highest quality standards, within the needs of Embraer, its controlled compa- conditions of greatest value generation, at nies, customers, and other stakeholders. the right time and with the least risk to the company and society. Embraer’s Code of Ethics and Conduct, as well as other existing internal policies 118118
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS Business Partners are expected to apply Embraer has a Global Supplier Manage- the best practices for preserving the envi- ment Procedure from the product develo- ronment, as well as health and safety. Fur- pment phase, serial production, to after- thermore, they are subject to the process -sales, following the Compliance standards of reputational check (due diligence) befo- and Embraer Business Excellence criteria, re entering into any formal commitment, or providing continuous improvement and un- starting any commercial transaction. For dertaking activities in an ethical, environ- Business Partners identi昀椀ed as critical, Em- mentally sustainable, safe, and health-pro- braer performs risk monitoring through risk moting manner. assessment tools. The Supplier Management area is respon- Applicable laws regarding import and export sible for managing and ensuring the good control (especially ITAR* and EAR*, accor- performance of suppliers in ful昀椀lling the dingly) of goods, services, and industriali- agreed contractual conditions, in addition zation should be meet and complied with to cost management. To support this pro- in keeping with the procedures and policies cess, the area monitors the metrics that de- established by the company. monstrate the supplier’s adherence to the It is forbidden to procure goods, services, conditions agreed, as well as the spotting and industrialization that is not carried out of the need to create an action plan with by the Supply areas and delegated areas, non-adherent suppliers. and in accordance with the Global Procure- *International Traf昀椀c in Arms Regulations. ment Policy, as well as to ensure a fair and **Export Administration Regulations. transparent process in competition proce- dures, guaranteeing the equality of treat- ment for all participating companies. 119
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS ASSESSMENT OF NEGATIVE ENVIRONMENTAL SELECTION IMPACTS ON THE SUPPLY CHAIN OF NEW (GRI 308-2) SUPPLIERS (GRI 308-1 and 414-1) All contracts for supply, services, and industrializa- MATERIAL RESTRICTIONS BY tion of products have socio-environmental require- ENVIRONMENTAL REGULATIONS 100% of the new suppliers ments, which those involved should comply with and were selected based on key implement. The mandatory submission documents As regards the use of materials that contain substan- criteria and committed to and noti昀椀cations to Embraer is stipulated in the con- ces restricted by environmental regulations, Embra- comply with the clauses tracts between the parties, being accepted by the er has a dedicated management staff, DIPAS - Inte- described in the annex “So- suppliers. grated Development of Environmentally Sustainable cio-Environmental Specifi- The supplier, through its supply chain, is expected Product. The staff works to follow up the evolution cation,” which is an integral to comply with applicable environmental laws, such of environmental laws, collect information on res- part of the supply agreement, as the European REACH* regulation, CEPA**, TSCA**, tricted substances present in articles throughout and establishes that new su- and other relevant guidelines that may affect Embra- the supply chain, identify use in products and ma- ppliers should meet the en- er products. It should also ensure compliance with nufacturing processes; additionally, it also directs vironmental, occupational applicable environmental laws, including those of the applications identi昀椀ed to Product Engineering safety, and social respon- subcontractors. Through the applicable regulations, for analysis and execution of the mitigation plan and sibility legal requirements we carry out assessments, based on internal criteria, management of the alternative development plan, so applicable to their industry, which demonstrate if there are negative impacts to that products and processes do not pose occupatio- including obtaining licenses be avoided and/or 昀椀xed. nal or environmental risks throughout their life cycle. and certificates, if applicab- The sustainability of products is thus guaranteed to le in their legislation. customers in different countries, as well as the occu- * Registration, Evaluation, Authorization and Restriction of Chemicals. pational and environmental integrity in all phases of ** Canadian Environmental Protection Act operation, maintenance, and end of life of aircrafts. *** Toxic Substances Control Act. 120
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S ASSESSMENT OF NEGATIVE SOCIAL IMPACTS ON THE SUPPLY CHAIN SUPPLIERS WHERE THE RIGHT (GRI 414-2) TO FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING The quality and safety of Embraer pro- the origin of the minerals contained in MAY BE AT RISK ducts are capital to the business. The the products supplied by them and their (GRI 407-1) company undertakes to deliver products subcontractors to Embraer, under the that meet or exceed applicable gover- terms of the applicable American law The agreement with our suppliers contains clauses nmental, industry standards, ensuring (Dodd-Frank Law). that determine that they should comply with the legal safety and quality to the end customer. The company continuously works to obligations and principles of the Global Compact to With this in mind, Embraer strives to en- quell the social impacts of its activities, which Embraer is a signatory, ensuring that the right sure that our supply chain is committed so one of the initiatives was to become to freedom of association and collective bargaining and aligned with social and environ- an integral part of several global Con昀氀ict is ful昀椀lled. mental issues. Minerals programs, such as: Aerospace Suppliers are continuously monitored during the Embraer requires the supplier to adhere Industries Association (“AIA”), Interna- term of contract and a social assessment is revali- to the company’s social standards, not tional Aerospace Environmental Group dated every two years. The Helpline is another tool to engage and not allow others to engage (“IAEG”). and the Responsible Business ensure these rights, ensuring that any possible viola- child or compulsory labor, nor adopt or Alliance - Responsible Minerals Initiati- tion can be reported by anyone. allow others to adopt unacceptable la- ve (“RBA-RMI”). bor practices. Every year the company conducts due As part of the social impact manage- diligence in its supply chain to ascertain Learn more: ment process, the company has esta- if any of its products come from con昀氀ict Suppliers’ Requirements blished in contracts the Con昀氀ict Mi- zones. Additional information is availab- Ethics & Compliance nerals clause whereby suppliers report le in the 20-F report. 121
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S MANAGEMENT OF RISKS ASSOCIATED WITH THE USE OF CRITICAL MATERIALS (RT-AE-440a.1.) Embraer has a vast and complex supply chain across the world. Critical suppliers are identi昀椀ed by means of two important matrices whose combined results allow Embraer to de昀椀ne the best strategy to evaluate and monitor potential risks: EXTERNAL RISK MONITORING Risk Assessment Tools Risk assessment tools allow Embraer to cover risk analysis, 1. STRATEGIC MATRIX: Following the same concept of the Kraljic Matrix, our su- evaluation, and control with a holistic approach in different ppliers are classi昀椀ed according to the complexity of products and services pro- criteria, such as: vided to Embraer, as well as the total expenditure during the contract’s validity. That information is combined with the level of impact on Embraer’s business. The result is the identi昀椀cation of the critical and strategic suppliers. • Natural hazards • Engineering 2. RISK MATRIX: This matrix provides a two-dimensional picture which better • Geopolitical and economical risks • Post-sales estimates the supplier’s vulnerability versus the impact on Embraer’s business. Embraer can identify the critical suppliers which will require more control. • Financial, business-related • Manufacturing 3. CONTRACTS: Embraer guarantees to its suppliers the ful昀椀lment of the proces- • Environment/health/safety • Supply Chain ses of risk analysis and environmental and health requirements, through clauses based on the company’s Code of Ethics and Conduct; such clauses de昀椀ne the • Quality supplier’s obligation of abiding by the sector’s speci昀椀c laws, as well as of com- plying with environmental standards and human rights regulations. 122
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S INTERNAL RISK MONITORING LOCAL SUPPLIERS Embraer has a robust S&OP process 2. SUPPLIER MANAGEMENT (GRI 204-1) that directs the supplying strategies Supplier management is performed ba- in order to mitigate shortages, and a sed on three big fronts: 16% of the purchasing budget of the Supplier Management Program based important operational units in the 2022 on four pillars: a. Embraer has a program developed by cycle was allocated to suppliers located in the Purchase Team which fosters the in- Brazil. The important operational units are tegration of all stakeholders and a sus- de昀椀ned as the productive plants located • Performance tainable monitoring of the suppliers’ in Brazil: São José dos Campos, Botucatu, performance evolution. and Gavião Peixoto. • Cost & Ef昀椀ciency b. Leadership Meetings: Weekly meetin- gs with Embraer’s directors and related • Business Growth areas to present the suppliers’ score- cards, dashboards and action plans. • Partnership c. Executive meetings: quarterly meetin- gs between Embraer’s high-level leader- ship and Suppliers, where the results of the performance monitoring are presen- ted, and the action plans are discussed. 1. STOCK STRATEGY This forum also allows the discussion of For critical materials identi昀椀ed, long- process improvement, competitivity and -term planning is shared with our su- sustainability across all supplying bases. ppliers to mitigate shortages in the pro- duction line. 123
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.2.5. LOCAL COMMUNITIES The following table shows the main results of the work carried out by the Instituto Embraer and Embraer Foundation in 2022. Highlights from Instituto Embraer (Brazil) and 2020 2021 2022 Embraer Foundation (United States) Number of organizations supported by Instituto Embraer 13 36 43 and Embraer Foundation Volunteers engaged worldwide 891 895 1296 Hours allocated to volunteering (hours) 6677 8145 5891 Highschool Program (only in Brazil) 2020 2021 2022 Number of graduates on both Embraer high schools since 2002 4120 4440 4760 Number of Embraer’s high school students accepted in public 80% 84% 75%* or private universities with a scholarship* University students awarded by the scholarship fund (cumulative) 768 768 768 *Data was calculated on March 30th, 2023. 124
GOVERNANCE Indicators 125
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.3.1. CORPORATE GOVERNANCE (GRI 3-3) As a publicly traded corporation, Em- borators and business partners to Governance (IBGC) and the Brazilian braer adopts corporate governance always act in keeping with all applica- Association of Publicly-Held Compa- processes and policies that meet the ble laws and regulations and internal nies (Abrasca). regulations of the markets in which it company guidelines. Lastly, the Anticorruption Policy is trades its shares (NYSE, in the United Embraer, in order to meet the highest also a reference document of the States, and B3, in Brazil) and value levels of Corporate Governance, has company, for establishing guidelines transparency, integrity, and balance in the policies recommended by the to ensure, in addition to compliance strategic decisions. “Code of Best Governance Practices,” with laws, the appropriate manage- Listed in Novo Mercado, the most de- such as: Extra Audit Service Procure- ment of business relationships and manding segment of the Brazilian sto- ment Policy, Risk Management Policy, the prevention of con昀氀icts of interest, ck exchange, the company has a capi- Negotiation and Disclosure Policy, as well as principles for donations tal model without a controlling group Board of Directors’ Appointment and and sponsorships, for offering and re- or controlling shareholder. Embraer’s Training Policy, Related Parties Policy, ceiving gifts and entertainment, and policies maintain the standards of Compensation Policy, among others, contracting or conducting business behavior expected and mainly re昀氀ected and these policies are published on with third parties. in the Code of Ethics and Conduct. All the Embraer Investor Relations web- policies and procedures require colla- site, aiming to ensure transparency about the company’s information. Learn more: The company is also associated with Corporate Governance Model relevant governance forums, such as Embraer Policies the Brazilian Institute of Corporate 126
ABOUT BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION SUSTAINABILITY EMBRAER UNIT INDICATORS FINANCIAL PERFORMANCE INDICATORS GOVERNANCE STRUCTURE AND ITS COMPOSITION (GRI 2-9) The main bodies of Embraer’s Management are the Board of Directors and its three Advisory Commit- Audit, Risks tees (Strategy and Innovation Committee, Audit, and Ethics Risks and Ethics Committee, and the People and Committee ** ESG Committee), in addition to the Fiscal Board Board of Directors and the Executive Board. * Fiscal Board - Independent body - Article 43 Articles of Incorporation People and ESG ** Committees - Advisory bodies to the Board of Directors - Article 34 Arti- Committee** cles of Incorporation Shareholders’ Meeting Strategy and Innovation Committee** Fiscal Board Executive Board 127
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S In line with a transitional provision in the Arti- resolving on their submission to the sharehol- guidelines, and policies and on the measurement of cles of Incorporation (biennium 2021/2023), the ders’ meeting, to call the Independent auditors Management and Accounting Information disclosed Board of Directors currently has 13 members, 10 to provide the necessary clari昀椀cations about the to the public and regulatory bodies. of whom are Independent. The Brazilian Govern- company, to approve the annual and multiannual ment, holder of the special class share (Golden budgets, strategic plans, expansion projects and CPESG - People and ESG Committee Share), has appointed a director and an alterna- Investment programs of the company, as well as Advises the Board of Directors with regard to the te and the collaborator shareholders and non- to follow up their execution. election and dismissal of Embraer’s statutory of昀椀cers -shareholders appoint 2 other directors and their Advisory committees consist of at least 3 and at and establishment of their assignments, de昀椀nition of respective alternates. Currently, the company’s most 5 members. The composition and Bylaws of the salary and human resources policy, assessment Board of Directors is made up of 11 men and 2 each committee are available on Embraer’s In- process, advising the Chairman of the Board, Direc- women, with 11 members being Brazilian resi- vestor Relations website. The summary of the as- tors, the Board and its Advisory Committees, among ding in Brazil, and 2 North Americans residing signments of each committee is described below: other duties. The committee discusses and overse- in the United States. Advisors and committee es the company’s ESG strategy, the management of members have relevant professional experien- CESTI - Strategy and Innovation Committee climate-related risks and opportunities, as well as ces in different sectors, with emphasis on the monitoring the main ongoing projects, the company’s aeronautical industry, innovation, and technolo- Advises the Board of Directors in the establish- ESG schedule, challenges, and goals. gy, ESG, and 昀椀nance. ment of the Company’s Strategic Plan and Action The company’s Articles of Incorporation and the Plan, focusing on objectives, macro projects, and Bylaws of the Board of Directors provide that assessments of potential new business opportu- the main powers of the board are: to establish nities and assessments of topics pertaining to In- the overall guideline of the company’s business, novation, digitalization, and technological trends. to elect and dismiss the company’s of昀椀cers, to supervise the management of the company’s of- CARE - Audit, Risks and Ethics Committee Learn more: 昀椀cers, to review the quarterly results of the com- Advises on the Identi昀椀cation and management of Golden Share pany’s operations, to review the Management business risks Inherent to Embraer’s activities, on Report and the accounts of the Executive Board the appropriateness of risk management models, Advisory Committees 128
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S All committees report on the matters dealt with at their meetings at the 昀椀rst subsequent CHAIRMAN OF regular meeting of the Board of Directors. Furthermore, periodic discussions on ESG THE HIGHEST topics, such as visibility and discussion of GOVERNANCE BODY environmental and climate change issues and Governance & Compliance training (GRI 2-11) on matters relevant to the members of the Board of Directors, are part of the schedule The Chairman of Embraer’s Bo- of the Board of Directors’ meetings. ard of Directors is an independent The Fiscal Board reports directly to the member of the Board and does not Shareholders’ Meeting and is responsible hold a senior executive position at for overseeing administrative management, the company. Not only for the Chair- such as reviewing management activities, man, but Embraer’s rule is that no and 昀椀nancial statements. member of the Board of Directors The Executive Board, in turn, is the body may hold the position of Executive responsible for conducting the company’s Of昀椀cer of the company, as provided business following the provisions of the for in Article 27, Paragraph 5 of the Strategic Plan and the Action Plan, both Articles of Incorporation. approved by the Board of Directors. 129
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S ROLE OF THE HIGHEST GOVERNANCE BODY (GRI 2-12) IN OVERSEEING IMPACT MANAGEMENT The Company’s Articles of Incorporation and the Bylaws The supervision of the Board of Directors is of the Board of Directors provide that the main powers of performed through the meetings of the body the Board are: that occur ordinarily 8 times a year or extraor- a) to establish the overall guideline of the company’s dinarily whenever necessary in connection with business; the reporting of advisory committees and topi- cs that the board of directors deems relevant, (b) to elect and dismiss the company’s of昀椀cers; in addition to those that are already part of the (c) to supervise the management of the company’s of- recurring agenda of meetings. 昀椀cers; According to Article 7, I, of the Bylaws of the (d) to assess the quarterly results of the company’s ope- Board of Directors, the Board of Directors rations; is responsible for spotting, supervising, and following up the risks to which Embraer is expo- (e) to review the Management Report and the Executive sed, whether 昀椀nancial, legal, 昀椀scal, operational, Board’s accounts, resolving on their submission to the commercial or other. Consequently, to approve Shareholders’ Meeting; Embraer’s Corporate Risk Management Policy (f) to summon the independent auditors to provide any and review it whenever necessary, monitor its clari昀椀cations it deems necessary about the company; implementation, and ensure the existence of a crisis management plan that allows the com- (g) to approve Embraer’s annual and multiannual bu- pany to safely overcome them. dgets, strategic plans, expansion projects, and invest- ment programs, as well as follow up their execution, among others. 130
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S DELEGATION OF RESPONSIBILITY FOR IMPACT MANAGEMENT (GRI 2-13; 2-16) The Board of Directors duties are: (a) Election of the Executive Board; ROLE OF THE HIGHEST (b) following up and assessing the performance GOVERNANCE BODY of Embraer’s Chief Executive Of昀椀cer, as well as IN SUSTAINABILITY the other Of昀椀cers, according to Article 7, II, of REPORTING the Bylaws of the Board of Directors. The Exe- cutive Board, which is made up of at least 4 and (GRI 2-14) at most 11 members appointed by the Board of Directors, is responsible for managing the com- CPESG advises the Board of Direc- pany, following the provisions of the Strategic tors on the analysis, recommendation, Plan and the Action Plan approved by the Board and follow-up of Embraer’s socioenvi- of Directors. ronmental strategy and discusses the The relevant topics of interest to Embraer are main projects in progress. The materia- brought to the attention of the Board of Directors’ lity process and the de昀椀nition of mate- members at the Body’s meetings. The Board of rial topics are approved by the commit- Directors meets ordinarily 8 times a year or whe- tee members. never it deems necessary to deliberate on extraor- dinary topics. 131
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.3.2. ETHICS AND COMPLIANCE MECHANISMS FOR SEEKING ADVICE AND RAISING CONCERNS OPERATIONS (GRI 2-26) ASSESSED FOR RISKS RELATED TO CORRUPTION Embraer’s Compliance Department has an in- and easily accessible through the company’s (GRI 205-1) dependent structure and direct reporting to intranet and establish the main guidelines to the Audit, Risk and Ethics Committee, as well be met. During periodic assessments conduc- as a reporting channel structured and available Any concerns regarding Embraer’s business ted by the Compliance Department, 24/7, in the languages of the countries where conduct can be brought to the Compliance risks, when identi昀椀ed, are properly the company operates, allowing any individu- area itself or through the widely disclosed and addressed. When applicable, such als (collaborators or not) to bring questions or available whistleblowing channel — Helpline, risks are shared with the competent concerns. as mentioned above. The channel ensures authorities for discussion and imple- Moreover, the governance of the area was anonymity and con昀椀dentiality, as well as non- mentation of mitigation measures, structured in order to create the roles of Com- -retaliation to whistleblowers in good faith. which are continuously monitored. pliance ambassadors and agents in several The total number and percentage of areas of Embraer, so that support can also be operations assessed are internal in- given by collaborators in these areas, who are formation and, for this reason, will not periodically trained on Compliance techniques. Learn more: be disclosed in this report. In addition, the Code of Ethics and Conduct Helpline and other policies pertaining to it are freely 132
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S COMMUNICATION AND TRAINING ABOUT ANTI-CORRUPTION POLICIES AND PROCEDURES (GRI 205-2) All members of the Audit, Risk and Ethics Committee (CARE) — advisory body to the Board of Directors were informed about the anti-corruption policies and procedures applied by Embraer, broken down by region. 100% of CARE members received training pertaining to anti-corruption and related topics in 2022. The presentation of the Code of Ethics and Conduct and its respective training is mandatory for 100% of collaborators, and the training is refreshed every two years. The Global Anti-Corruption Policy is presented to all collaborators at the time of their admission to Embraer, being available on the intranet and on the external website. Within the scope of Embraer’s third-party Due Diligence process, which is an integral part of the hiring 昀氀ow, business partners that may present potentially relevant anti-corruption risks are aware of the Code of Ethics and Conduct and the Global Anti-Corruption Policy. 133
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S CONFIRMED INCIDENTS OF CORRUPTION AND MEASURES TAKEN (GRI 205-3) On October 24, 2016, Embraer 昀椀nalized the entered into with the US Securities and terms of the agreements for the resolution Exchange Commission on October 24, 2016. of Investigations with the US authorities In November 2021, Embraer was formally (Department of Justice (DOJ) and Securities summoned in the courts of India with respect and Exchange Commission (SEC), and Brazilian to a criminal proceeding 昀椀led by the Directorate authorities (Federal Public Prosecutor’s Of昀椀ce of Enforcement in India against entities and (MPF) and Securities Commission (CVM). The individuals, including Embraer and ECC investigation involved sales transactions that Investment Switzerland AG (Embraer’s wholly- occurred in India, the Dominican Republic, owned subsidiary) regarding the transaction Mozambique, and Saudi Arabia. As part of the in India that was contemplated in the agreement, the company agreed to maintain investigations described in the 昀椀rst paragraph. external and independent monitoring for up to 3 years to ensure full compliance with the terms The above case is in its initial phase and there of the agreement. The company also agreed to is currently no appropriate basis for estimating payments in an a最最regate amount of about USD the additions or quantifying any contingency 206 million to US and Brazilian authorities. The in this regard. The company is not aware of agreement also provided that as long as the other procedures pertaining to the scope of the terms are fully met, no charges will be brought agreements entered into with the authorities of against the company. the United States and Brazil in 2016. To date, In 2020, Embraer successfully completed third- Embraer believes that there is no reasonable party monitoring, as well as the other terms of the basis to estimate provisions or quantify possible deferred prosecution agreement (DPA) entered contingencies relating to such case. into with the DOJ and the consent agreement 134
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S TOTAL AMOUNT OF MONETARY LOSSES AS A RESULT OF LEGAL PROCEEDINGS ASSOCIATED WITH INCIDENTS OF CORRUPTION, BRIBERY, AND/OR ILLICIT INTERNATIONAL TRADE (RT-AE-510a.1) In 2022, the company had no pecu- sel who for Compliance issues re- niary losses pertaining to lawsuits ports directly to the Risk, Audit associated with incidents of cor- and Ethics Committee of the Board ruption, bribery and/or illicit inter- of Directors; the development of a national trade. process for monitoring hiring and Since the start of the internal in- payments to third parties; impro- vestigation process in 2011, Embra- vements in Compliance policies, er has engaged on a comprehen- procedures, and controls; impro- sive effort to improve and expand vement of anonymous and other its compliance program worldwide. whistleblower channels; and the This multi-year task involved the re- development of a comprehensive view of compliance systems. Some training and education program ai- of the main improvements inclu- med at maintaining and reinforcing de the creation of a Compliance a strong Compliance culture at all Department; the appointment of levels of Embraer globally. a Chief Compliance Of昀椀cer who is currently also General Coun- 135
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S DISCUSSION OF PROCESSES FOR TO INCIDENTS OF DISCRIMINATION AND MANAGE BUSINESS ETHICS RISKS CORRECTIVE ACTIONS TAKEN THROUGHOUT THE VALUE CHAIN (GRI 406-1) (RT-AE-510a.3) The company had a case of discrimination received through Embraer’s whistleblowing channel (Helpline), which was quickly ascertained as actually Embraer has established a sin- The process is conducted and grounded in 2022, with appropriate measures applied immediately. gle due diligence process for supervised independently by the third parties with which it main- Compliance Department, which tains any type of business rela- may request additional information tionship, including customers, about the third party. External con- COMPLIANCE WITH LAWS AND REGULATIONS suppliers, business partners, sultants may be engaged for tho- (GRI 2-27) and government entities. rough assessment in more sensi- The level of scrutiny of the pro- tive situations and/or geographies In the period covered by this report, no 昀椀ne or pecuniary penalty was applied cess is established depending with limited access to information. to Embraer for signi昀椀cant cases of noncompliance with laws and regulations. on the degree of risk that the The actual engagement and/or bu- third party represents (risk-ba- siness establishment will be a con- sed approach), and takes into sequence of the 昀椀nal assessment account several factors, such as issued by the Compliance Depart- COUNTRIES AT HIGH RISK OF CORRUPTION exposure to public bodies, Em- ment. Lastly, Anti-Corruption Com- (RT-AE-510a.2) braer’s powers of representa- pliance clauses are included in tion, countries in which it opera- Embraer’s contracts. Revenue from countries rated “E” and “F” according to the Band of Transparency tes, payment structure, the type International’s Government Defense Anti-Corruption Index in 2022 was of activity to be conducted, exis- approximately USD 534,685 million and about USD 85,187, respectively. tence of adverse media, existing legal proceedings, among others. 136
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.3.3. DATA SECURITY NUMBER OF DATA BREACHES; PERCENTAGE INVOLVING CONFIDENTIAL INFORMATION (RT-AE-230a.1) Embraer employs cybersecurity solutions and procedures to ensure the most appropriate and applicable handling, collection, and availability of data and information used by its corporate systems, business processes, and products. These procedures and mechanisms are based on best market practices (such as frameworks such as NIST 800 Special Publication and ISO27001/2) and undergo periodic reviews to ensure their ability to spot, control, and respond to potential global cyber threats. Nonetheless, these results are not publicly disclosed. Throughout 2022, Embraer did not have data leaks with con昀椀dential information. 137
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S DESCRIPTION OF APPROACH TO IDENTIFYING AND ADDRESSING DATA (RT-AE-230a.2) SECURITY RISKS IN COMPANY OPERATIONS AND PRODUCTS Embraer establishes the guidelines avoiding overloads on critical systems. The the IT Infrastructure area should prioritize regarding the methodology to be used for results of scans should generate visibility the application of updates and 昀椀xes within managing vulnerabilities by the Information into the company’s situation, centralizing a service deadline. Security area. Their use allows appropriate the results in CMDB. Weekly there is a In events detected in vulnerability measures to be taken to eliminate their meeting between representatives of all management, the IT Infrastructure staff vulnerabilities before they can be exploited. managers in the Information Technology has the prerogative to perform remediation Vulnerability management is a continuous (IT) area to report outcomes, review critical actions without prior notice. These and transparent process carried out by cases, and address their treatment. These actions are connected to the purpose of the Information Security staff. Using outcomes are con昀椀dential and not publicly maintaining the levels of operation of digital scanning and auditing solutions disclosed. the business, ensuring the availability, for systems and applications, the process The Patch Management and Update integrity, and con昀椀dentiality of the is responsible for providing, in the Process, under the responsibility of the IT company. Con昀椀guration Management Data Base Infrastructure area, aims to coordinate and (CMDB) setup items, the vulnerabilities perform updates to corporate systems. The identi昀椀ed in the various layers that make process should be organized by listing the up corporate systems. Scans are scheduled vulnerabilities based on the Setup Items with to be performed daily, with mechanisms to the classi昀椀cation of the required updates avoid Impacts on operations. To meet the ordered by criticality, based on the CVE company’s monthly critical routines, the (Common Vulnerabilities and Exposures) scan is performed in a less Intrusive manner, severity metric. For each degree of severity, 138
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S CYBER GOVERNANCE AT EMBRAER SUBSTANTIATED COMPLAINTS (GRI 3-3; 418-1) CONCERNING BREACHES OF CUSTOMER Embraer’s Cyber Governance comprises the following members of the PRIVACY AND LOSSES OF CUSTOMER DATA Executive Committee: (GRI - 418-1) In 2022, Embraer had no complaints pertaining to breach of privacy by 1. CEO – Chief Executive Of昀椀cer collaborators and customers, as well as no leaks, thefts, or losses of cus- tomer data. 2. CFO – Chief Financial Of昀椀ce The company has a dedicated structure that manages data privacy issues 3. CISO - Chief Information Security Of昀椀cer throughout the Embraer group, through the composition of a multidisci- plinary team under the supervision of DPO – Data Protection Of昀椀cer. 4. Embraer’s Vice President of Defense & Security 5. Legal & Compliance Vice President / Data Protection Of昀椀cer (DPO) 6. Engineering Vice President 7. TEMPEST (CEO – Cybersecurity Specialist) – Embraer af昀椀liate company The Cyber Committee meets monthly, and CISO has the autonomy to call the committee when necessary. In addition, there are meetings of the Board of Directors and CARE to discuss the Cybersecurity Agenda with updates and decisions on Cyber Risk. 139
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 3.3.4. OPERATIONAL SAFETY AND PRODUCT QUALITY EMBRAER OPERATIONAL OPERATIONAL SAFETY GOVERNANCE SAFETY PROGRAM (GRI 3-3; RT-AE-250) Board of Directors Designed to establish the governance of CEO safety initiatives and indicator reviews of all company operations (design, manufacturing, ESC maintenance, and air traf昀椀c control), the Embraer’s Operational Safety Committee Operational Safety Program focuses on the continued increase of safety in products and VP Engineering operations and is chaired by the Senior Vice VP Operations VP Services and Support Presidents of Engineering, Operations, and Services & Support. Safety actions relating to risk management Design Committees are submitted monthly at the company’s board meeting, where senior leadership Embraer Operational participates. Additionally, the subject has the Operation Committees Safety Program supervision of the company’s CEO and the Board of Directors, in previously established Flight Operations and visibility meetings. Maintenance Committees 140
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S Embraer’s commitment and the gui- with its products. The goal is to improve conferences, participation in external dance of safety efforts to all collabo- product safety by ascertaining contribu- safety events with customers, suppliers, rators are addressed in the company’s ting factors and setting recommenda- authorities, and other aircraft manu- Safety Policy. This policy is approved tions to prevent future events. facturers to exchange safety data and by Embraer’s CEO and all Senior Vice Safety is a pivotal part of the culture, lessons learned. Furthermore, periodic Presidents and is available to all colla- which is furthered through several ini- internal safety culture surveys are con- borators. The policy is stressed through tiatives: internal trainings on product ducted to assess the areas in which ac- training and events to foster the safety safety and safety culture, internal safety tions will be focused to improve safety culture. awareness. Since 2003, internal operational safety committees have been established to address risk management. These com- mittees periodically review all safety reports received from collaborators, customers, suppliers, aeronautical au- thorities, and other audiences that re- (RT-AE-250a.3) late to Embraer. For each of these re- In 2022, there were 11 new Airworthiness Guidelines (DAs) issued by ANAC ports, the associated risk is assessed (National Civil Aviation Agency) and 2 DA’s (from 2011 and 2021) that were according to the aeronautical industry reviewed by ANAC, which may or may not be adopted by foreign authorities standards and Embraer standards, vali- (FAA, EASA, CAAC-China, TCCA-Canada, CASA-Australia etc.). No Emergency dating the proposed efforts and mana- Airworthiness Guidelines have been issued and none of these have been asso- ging them until completion. ciated with ground events or plane crashes. All DA’s are publicly available and In addition to the risk management the latest information can be found on the appropriate regulatory websites. described above, Embraer allocates experts to support authorities in all in- vestigations of accidents and incidents 141
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S PRODUCT QUALITY AIN Embraer manages its performance ba- dedicated Quality Weeks in the pro- ST sed on the SQDC indicators, acronym duction plants, visual communication Position in English for “Safety, Quality, Delive- campaigns underlining attitudes and 1 ries, and Cost.” It is no coincidence principles appurtenant to safety and that safety and quality are the 昀椀rst quality, and an online event of Opera- acronyms. The company believes that tional Safety and Quality Week for the Overall Score the focus on safety and quality is cru- entire company. Source AIN Product cial to process excellence and thus The company closely listens to its Suport Survey, Survey 8,03 ensures on-time deliveries, and the Period APR-Jun 2022 customers to understand their needs, best cost for all stakeholders. always seeking to exceed their expec- Quality has a dedicated board that tations. The efforts it invests to con- guarantees a 360-degree view of all tinuously improve its processes and PRO PILOT the company’s processes, from the deliver quality to its customers led production units to corporate, from Embraer to be recognized by them in the development of new products to Executive Aviation, according to a cus- ND the operation of customers, including tomer satisfaction survey published by Position 2 the supplier base. AIN and PRO PILOT magazines. Embraer believes that a deciding fac- tor for excellence in quality is cultu- Overall Score re. To continuously develop and em- Source: Pro Pilot 2022 Corporate phasize the quality culture, several Aircraft Product Support Survey 7,81 initiatives are carried out, such as Survey period: Apr-Jul 2022 biweekly meetings with the teams, 142
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S EMBRAER EMBRAER EXCELLENCE QUALITY SYSTEM MANAGEMENT Released in 2007, the Embraer losophy comprehensively throu- SYSTEM Business Excellence Program – ghout the organization – through P3E aims to be, further, and sus- the Excellence MAnnuals, which Embraer Quality Manage- tain cultural transformation by state Lean tenets, methods, and ment System complies with explaining the Lean philosophy, tools according to the processes the requirements of several which means the search for excel- to which they are directed. Among authorities, regulatory bo- lence in its processes, services, the main topics covered are: Lean dies, and certifying bodies, and products. The program ope- principles, 5S (organization), TPM being audited periodically. rates based on the Embraer’s Ex- (reliability of assets and resour- In 2022 there were 40 ex- cellence System, which consists ces), Kaizen (continuous improve- ternal audits between the of 4 elements: understanding of ment), Visual Management, Value units in Brazil and abroad strategy, integrated management, Stream Mapping (VSM), and Shop ensuring the maintenance excellence in processes, and per- Floor Management (SFM). of the company’s certi昀椀ca- sonal protagonism. These, when With a focus on gaining pro- tions (AS9100, NATO AQAP put into practice, further the ge- ductivity and eliminating waste, 2110, COP ANAC, and PC neration of value and the consoli- Embraer Excellence System is FAA). dation of the organizational cultu- responsible for ensuring the im- re with stakeholders. plementation of improvements in More than being based on the 4 a standardized manner. elements, Embraer’s Excellence System disseminates the Lean phi- 143
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S TESTS ON PRODUCTS Embraer performs inspections, testing, tests on products in manufacture. Such and tests throughout the development inspections and tests cover the entire and manufacture of the products in ke- supply chain, inspections on receipt eping with the company’s procedures of materials, and inspections and tests and regulatory requirements, in order to at the various stages of the company’s ensure safety, quality, maturity, perfor- production process as a means to at- mance, and reliability of the products test to the conformity of the products throughout the life cycle of the aircraft manufactured. in operation. Lastly, as a 昀椀nal stage of aircraft manu- During the development phase of new facturing, Embraer performs tests with products, Embraer conducts testing the 昀椀nished product on the ground and campaigns with a view to certifying air- in 昀氀ight to ensure quality and complian- craft design with the approval bodies. ce with requirements. In addition, there Also during the development phase, the is the stage of acceptance of product stages of preparation and planning of by customers as part of the delivery quality for serial production are also car- process of each aircraft manufactured, ried out, encompassing the preparation with inspections, tests, and 昀氀ights car- of suppliers for quality delivery. ried out with customer follow-up. In the stage of serial production, Embra- er Quality System, through its procedu- res, provides for the application of ins- pection processes and the execution of 144
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S PRODUCT QUALITY EMBRAER TRAINING TYPES EDUCATION AND TRAINING PROGRAM Class Asynchronous online Course provided by Material available for online an instructor under an reading, which can be done at The readiness of people is one of the pillars in-person or on-site/ any time. of Embraer’s Excellence Model. It is man- remote format. datory that 100% of collaborators who carry out activities in predetermined areas un- dergo training on operational quali昀椀cation, quality, and safety. These trainings are car- Synchronous online OJT ried out from the 昀椀rst day of work, in the Interactive training On-The-Job Training onboarding of new collaborators, and con- conducted in the workplace with a Mentor. tinue throughout their entire careers. The Quality Management System ensures that people are quali昀椀ed to perform their assig- nments and that activities are performed with excellence. Embraer has training and education pro- PRODUCT QUALITY TRAINING DATA grams with trainings dedicated to several areas, including trainings aimed at product quality. The training program occurs in 4 di- fferent modalities, ensuring its robustness. 8.625 182.319 COLLABORATORS TRAINED IN 2022 TRAINING HOURS IN 2022 145
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S SUPPLIER QUALITY MANAGEMENT Suppliers with the tier 1 and 2 de昀椀- fense Contracts) certi昀椀cation for each nitions should have AS9100 certi昀椀- special existing process, maintaining cation, as well as meet the existing this certi昀椀cation through the annual requirements in EQRS – Embraer cycle of NADCAP audits. Quality Requirements for Suppliers. The quality of all products and fe- The maintenance of AS9100 certi- edstock received by Embraer and its 昀椀cation is checked through audits suppliers (tier 1, 2 and 3) is checked carried out by a third party company during the material receipt stage. This and monitored by Embraer. The ser- check occurs through the test reports vice to EQRS is periodically re-e- submitted by the suppliers or manu- valuated by Embraer Quality. facturers of the material in question, Besides, suppliers that produce certifying that the tests necessary for parts according to Embraer’s speci- proof of quality have been carried out 昀椀cation (Build to Print) should have and approved according to technical their processes quali昀椀ed by Embra- speci昀椀cations. In addition, some pro- er’s auditors, as per the requirements ducts and feedstock are re-tested by de昀椀ned in EQRS. If the supplier uses Embraer in its laboratories, pursuant to special processes in its manufac- speci昀椀cations de昀椀ned in the technical turing, regardless of its level in the standards by Product Engineering. supply chain, it should also have the NADCAP (National Program for Accreditation of Aerospace and De- 114646
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S SUPPLIER TRAINING As part of a robust regulatory system, Embra- improvement of processes, through training er annually emphasizes with its entire supply to suppliers explaining the Kaizen methodolo- chain the quality requirements to be met, throu- gy. These trainings occur in OJT – On-the-job gh EQRS, which are additional requirements to Training mode, where Embraer guides how to those existing in the AS9100 – Requirements spot and solve problems in practice, carrying for Quality Management of industries in the ae- out Kaizen projects together with suppliers. In rospace industry, which is a mandatory certi昀椀- 2022, 47 projects were carried out in concert cation to become an Embraer supplier. with 34 domestic and international companies. In addition to EQRS, Embraer also makes avai- Complementing the initiatives, there are trai- lable the EPPAP MAnnual – Embraer Produc- ning courses in the form of Webinars. These tion Part Approval Process, containing 17 Qua- trainings have a more speci昀椀c focus, but with a lity tools to be applied during the development greater scope of companies per class. or modi昀椀cation of a product, in order to ensure In 2022, 2 Webinars were held for the domestic preparation for Quality. supply chain, 1 on the Problem Solving metho- Both guidelines are carried out through the dology, and another on the Implementation of Read & Sign modality, and can also occur inte- Poka-Yokes Solutions (fail-safe system). ractively, in person or online. Another important effort is the dissemination of the Lean philosophy and the continuous 147
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S COUNTERFEIT PARTS PREVENTION PROCESS (RT-AE-250a.2) The prevention of the use of counter- CONTRACT PROCUREMENT feit or non-approved parts at Embraer goes through several processes within When hiring a supplier, the re- The procurement area should purchase products the company with established practi- quirement on counterfeit parts according to the design speci昀椀cations and quali昀椀ed ces and procedures. The basis of pre- is informed through the pur- suppliers according to Embraer’s product structure. vention is the training and deployment chase order or contract. In the The supplier quali昀椀cation process includes procedures of requirements within the company’s contract, this requirement is in- that check, in addition to meeting the technical processes when hiring a supplier, pur- corporated into the quality sys- requirements, compliance with the requirements of chasing parts, designing a product, re- tem certi昀椀cation standards re- the quality management system. ceiving and treating a non-compliant quired from suppliers (AS 9100, Periodic assessment of suppliers’ performance product. Training is provided to colla- AS 9120). For suppliers that do is carried out and risk management is practiced, borators to raise awareness about the not have the certi昀椀cations, the spotting critical points that require a more thorough identi昀椀cation of suspicious parts, and requirement is included in the assessment (audit) or action plans focused on certain treatment for existing non-conforming purchase order for all products problems. Distributors are also approved according products is used when such materials purchased by Embraer, along to speci昀椀c procedures and can only deliver products are identi昀椀ed. with the technical and docu- from manufacturers approved and described in the mentary speci昀椀cations. purchase order. 148
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S ENGINEERING RECEIPT TREATMENT OF NONCONFORMITIES (PRODUCT AND PROCESS) In the aircraft certi昀椀cation process, components To receive the products, Embraer es- should also undergo a speci昀椀c certi昀椀cation cam- tablishes speci昀椀c inspection stan- When identifying suspicious or counterfeit parts, the paign. Equipment is subject to tests and should have dards for each type of material. These material is segregated in quarantine following the same a certi昀椀cate of conformity, as well as the con昀椀gura- standards include physical and docu- process for the treatment of noncompliant products. tion of the laboratory and the procedure used in the mentary characteristics (certi昀椀cate of In the case of identi昀椀cation of nonconformities in the test. All certi昀椀cation artifacts are approved by the conformity, test report) that should ac- processes pertaining to the handling of counterfeit certi昀椀cation authority or its representatives. These ar- company the product, ensuring tracea- parts, corrective actions are carried out to contain the tifacts make up the technical data required to obtain bility to the source of supply. Upon re- recurrence of the problem and ensure de昀椀nitive solu- the aircraft type certi昀椀cate. Each aircraft is produ- ceipt, the identi昀椀cation of the material, tion. Parts for scrap disposal have their disposal strictly ced by a production organization certi昀椀ed according packaging conditions, quantities, do- controlled to avoid misuse in the production process. to the type certi昀椀cate. A new or modi昀椀ed component cumentation delivered, supplier appro- can only be installed on a certi昀椀ed aircraft if it meets ved in the system is checked, that is, all the steps referred to above by following the design the information is checked to ensure modi昀椀cation procedure. As a member of the Mate- that the product delivered meets the rial Review Board (MRB), product engineering is also speci昀椀cations of the purchase order. In responsible for tackling equipment nonconformities, some situations, de昀椀ned in the receipt TRAINING ensuring that they meet applicable requirements. standards, the products or samples are Engineering may still issue inventory re-inspection sent to laboratories for tests that prove Collaborator training is offered by the EmPower system requests for updating, return, testing or visual ins- compliance with the speci昀椀ed techni- on the impact of counterfeit parts on the aeronautics pections. Requesting quality to include equipment cal requirements. When excess parts industry and prevention. The practices carried out by limitation notes that restrict use in 昀氀ight, delivery to are received, parts are scrapped if the Embraer are also implemented in speci昀椀c procedures customer or otherwise, is another option. supplier does not update the documen- in the areas. tation to ensure traceability. 149
Content SUMMARY 150
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 4.1 GRI CONTENT INDEX EMBRAER – Empresa Brasileira de Aeronáutica S.A has reported the information cited Statement of use in this GRI content index for the period from 1 January 2022 to 31 December 2022 with reference to the GRI Standards General Disclosures GRI 2 GRI 1 used GRI 1: Foundation 2021 DISCLOSURE Sustainability Additional General Disclosures GRI 2 Report Reference(s) Sustainability Additional 2-16 Communication of critical concerns Page 131 GRI STANDARD DISCLOSURE Report Reference(s) Organizational 2-17 Collective knowledge of the highest governance body - Structure, 2-1 Organizational details Page 07 Nomintation and Training Policy 2-2 Entities included in the organization’s Page 70 sustainability reporting 2-18 Evaluation of the performance of the highest governance body - Internal Rules of the Board 2-3 Reporting period, frequency and contact point Page 70 Internal Rules of the 2-19 Remuneration policies Page 116 Board 2-4 Restatements of information Page 70 2-5 External assurance Page 70 2-20 Process to determine remuneration Page 117 Internal Rules of the Board 2-6 Activities, value chain and other business - Financial 2-21 Annual total compensation ratio Page 117 relationships Statements 2-7 Collaborators Page 110 2-22 Statement on sustainable development strategy - Sustainability GRI 2: General 2-8 Workers who are not collaborators Page 110 2-23 Policy commitments - Disclosures 2021 2-9 Governance structure and composition Page 127 2-24 Embedding policy commitments - 2-10 Nomination and selection of the highest - Nomination and governance body Training Policy 2-25 Processes to remediate negative impacts - 2-11 Chair of the highest governance body Page 129 2-26 Mechanisms for seeking advice and raising concerns Page 132 2-12 Role of the highest governance body in Page 130 2-27 Compliance with laws and regulations Page 136 overseeing the management of impacts 2-13 Delegation of responsibility for managing Page 131 2-28 Membership associations - impacts 2-14 Role of the highest governance body in Page 131 2-29 Approach to stakeholder engagement - Corporate Procedure sustainability reporting 2-15 Con昀氀icts of interest - 2-30 Collective bargaining agreements Page 96 151
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S Material Topics GRI 3 Anti-corruption GRI 205 GRI STANDARD DISCLOSURE Sustainability Additional SDG GRI STANDARD DISCLOSURE Sustainability Additional SDG Report Reference(s) Report Reference(s) 3-1 Process to determine Page 71 205-1 Operations assessed for Page 132 16 GRI 3: Material material topics risks related to corruption Topics 2021 3-2 List of material topics Page 71 205-2 Communication and GRI 205: Anti- training about anti-corruption Page 133 16 corruption 2016 policies and procedures 205-3 Con昀椀rmed incidents of Page 134 16 corruption and actions taken Economic Performance GRI 201 GRI STANDARD DISCLOSURE Sustainability Additional SDG Energy Report Reference(s) 201-1 Direct economic value Page 12 to 14 Results Center 8,9 GRI STANDARD DISCLOSURE Sustainability Additional SDG generated and distributed Report Reference(s) 201-2 Financial implications CDP - GRI 3: Material 3-3 Management of material and other risks and - C2. Risks and 13 Topics 2021 topics Page 16 to 18 opportunities due to climate Opportunities GRI 201: Economic change C3. Business Strategy 302-1 Energy consumption within Performance 2016 201-3 De昀椀ned bene昀椀t the organization Page 75 7, 8, 12, 13 GRI 302 - Energy plan obligations and other - Report 20-F 8, 9 2016 302-2 Energy consumption retirement plans outside of the organization Page 77 7, 8, 12, 13 201-4 Financial assistance - Report 20-F received from government Procurement Practices GRI 204 GRI STANDARD DISCLOSURE Sustainability Additional SDG Report Reference(s) GRI 204: 204-1 Proportion of spending on Procurement local suppliers Page 123 8 Practices 2016 152
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S Water and Ef昀氀uents Waste GRI STANDARD DISCLOSURE Sustainability Additional SDG GRI STANDARD DISCLOSURE Sustainability Additional SDG Report Reference(s) Report Reference(s) GRI 3: Material 3-3 Management of material topics Page 82 GRI 3: Material 3-3 Management of material Page 86 Topics 2021 Topics 2021 topics GRI 303: Water 303-3 Water withdrawal Page 83 6, 8, 12 306-3 Waste generated Page 86, 87 and 88 3, 6, 12, 14 ,15 and Ef昀氀uents GRI 306: Waste 306-4 Waste diverted from 2018 303-4 Water discharge Page 84 6 2020 disposal Page 86, 87 and 88 3, 11, 12 306-5 Waste directed to disposal Page 86, 87 and 88 3, 6, 11, 12, 14 ,15 Emissions Supplier Environmental Assessment Sustainability Additional GRI STANDARD DISCLOSURE Sustainability Additional SDG GRI STANDARD DISCLOSURE Report Reference(s) SDG Report Reference(s) GRI 3: Material 3-3 Management of material topics Page 118 GRI 3: Material Topics 2021 Topics 2021 3-3 Management of material topics Page 78 308-1 New suppliers that were GRI 308: Supplier screened using environmental Page 120 Environmental criteria 305-1 Direct (Scope 1) GHG Page 78 3, 12, 13, 14, 15 Assessment 2016 308-2 Negative environmental emissions impacts in the supply chain and Page 120 actions taken 305-2 Energy indirect (Scope 2) Page 79 3, 12, 13, 14, 15 GHG emissions Employment 305-3 Other indirect (Scope 3) GHG Page 79 3, 12, 13, 14, 15 Sustainability Additional emissions GRI STANDARD DISCLOSURE Report Reference(s) SDG GRI 305: Emissions 2016 305-4 GHG emissions intensity Page 79 to 80 13, 14, 15 GRI 3: Material 3-3 Management of material topics Topics 2021 305-5 Reduction of GHG emissions 401-1 New collaborator hires and Page 107 and 108 5, 8, 10 collaborator turnover 305-6 Emissions of ozone-depleting Page 81 3, 12 401-2 Bene昀椀ts provided to full-time substances (ODS) GRI 401: Employment 2016 collaborators that are not provided to Page 96 and 111 5, 8 305-7 Nitrogen oxides (NOx), sulfur temporary or part-time collaborators oxides (SOx), and other signi昀椀cant Page 81 3, 12, 14, 15 401-3 Parental leave Page 109 5, 8 air emissions 153
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S Occupational Health and Safety Training and Education GRI STANDARD DISCLOSURE Sustainability Additional SDG GRI STANDARD DISCLOSURE Sustainability Additional SDG Report Reference(s) Report Reference(s) GRI 3: Material GRI 3: Material 3-3 Management of material topics - Topics 2021 3-3 Management of material topics Page 90 Topics 2021 403-1 Occupational health and safety Page 90 to 92 8 404-1 Average hours of training per Pages 97 to 98 4, 5, 8, 10 management system year per collaborator GRI 404: Training 404-2 Programs for upgrading 403-2 Hazard identi昀椀cation, risk Page 90 to 92 3, 8 collaborator skills and transition Page 99 8 assessment, and incident investigation and Education assistance programs 2016 403-3 Occupational health services - 8 404-3 Percentage of collaborators receiving regular performance and Page 98 5, 8, 10 career development reviews 403-5 Worker training on occupational Page 93 3 GRI 403: health and safety Occupational Diversity and Equal Opportunity Health and Safety 2018 403-6 Promotion of worker health Page 92 8 GRI STANDARD DISCLOSURE Sustainability Additional SDG Report Reference(s) 403-7 Prevention and mitigation of occupational health and safety Page 90 to 92 impacts directly linked by business 405-1 Diversity of governance bodies relationships and collaborators Pages 112 to 114 5, 8 403-8 Workers covered by an GRI 405: Diversity occupational health and safety Page 91 3, 8, 16 and Equal management system Opportunity 2016 405-2 Ratio of basic salary and Page 115 5, 8, 10 403-9 Work-related injuries remuneration of women to men 154
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S Non-discrimination Supplier Social Assessment GRI STANDARD DISCLOSURE Sustainability Additional SDG GRI STANDARD DISCLOSURE Sustainability Additional SDG Report Reference(s) Report Reference(s) GRI 3: Material 3-3 Management of material topics Page 132 Compliance GRI 3: Material 3-3 Management of material topics Page 118 Topics 2021 Program Topics 2021 GRI 406: Non- 406-1 Incidents of discrimination and 414-1 New suppliers that were discrimination corrective actions taken Page 136 5, 8 screened using social criteria Page 120 3, 6, 11, 12 2016 GRI 414: Supplier Social Assessment 2016 414-2 Negative social impacts in the Freedom of Association and Collective Bargaining supply chain and actions taken Page 121 3, 6, 11, 12 GRI STANDARD DISCLOSURE Sustainability Additional SDG Report Reference(s) GRI 407: Customer Privacy Freedom of 407-1 Operations and suppliers Association in which the right to freedom of Page 121 8 Sustainability Additional and Collective association and collective bargaining GRI STANDARD DISCLOSURE Report Reference(s) SDG Bargaining 2016 may be at risk GRI 3: Material 3-3 Management of material topics Pages 137 to 139 Topics 2021 Local Communities GRI 418: 418-1 Substantiated complaints Customer Privacy concerning breaches of customer Page 139 16 Sustainability Additional 2016 privacy and losses of customer data GRI STANDARD DISCLOSURE Report Reference(s) SDG GRI 413: Local 413-1 Operations with local community Communities engagement, impact assessments, and Page 124 5, 8, 10 2016 development programs 155
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 4.2. SASB CONTENT INDEX Energy Management Data Security Sustainability Additional Sustainability Additional Accounting metrics Code Report Section(s) Reference(s)/ Accounting metrics Code Report Section(s) Reference(s)/ Link(s) Link(s) Total energy consumed, percentage grid electricity, RT-AE-130a.1 Page 77 Number of data breaches, percentage involving con昀椀dential RT-AE- Page 137 percentage renewable information 230a.1 Description of approach to identifying and addressing data security RT-AE- Page 138 risks in company operations and products 230a.2 Hazardous Waste Management Fuel Economy & Emissions in Use-phase Sustainability Additional Sustainability Additional Accounting metrics Code Report Section(s) Reference(s)/ Accounting metrics Code Report Section(s) Reference(s)/ Link(s) Link(s) Amount of hazardous waste generated, percentage of RT-AE- In 2022, around 13.6% of the hazardous waste recycled 150a.1 Pages 86 to 87 Revenue from alternative energy-related products RT-AE-410a.1 company’s net revenue came from more sustainable products. Number and a最最regate quantity of reportable spills, quantity RT-AE- Page 88 Description of approach and discussion of strategy to address RT-AE-410a.2 - recovered from reportable spills 150a.2 fuel economy and greenhouse gas (GHG) emissions of products 156
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S Product Safety Business Ethics Sustainability Report Additional Sustainability Additional Accounting metrics Code Section(s) Reference(s)/ Accounting metrics Code Report Section(s) Reference(s)/ Link(s) Link(s) Number of recalls issued, total units recalled RT-AE- - Total amount of monetary losses as a result of legal 250a.1 proceedings associated with incidents of corruption, bribery, RT-AE-510a.1 Page 135 and/or illicit international trade Number of counterfeit parts detected, percentage avoided RT-AE- Page 148 250a.2 Revenue from countries ranked in the “E” or “F” Band of RT-AE- Transparency International’s Government Defence Anti- 510a.2 Page 136 Corruption Index Number of Airworthiness Directives received, total units RT-AE- Page 147 affected 250a.3 Discussion of processes to manage business ethics risks RT-AE- Page 136 throughout the value chain 510a.3 Total amount of monetary losses as a result of legal RT-AE- In 2022, the company did not have any proceedings associated with product safety 250a.4 monetary losses related to product safety. Materials Sourcing Sustainability Additional Accounting metrics Code Report Section(s) Reference(s)/ Link(s) Description of the management of risks associated with the RT-AE- Page 122 use of critical materials 440a.1 157
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSUSSTTAINABILAINABILITITYY EMBRAER FINANCIAL PERFORMANCE UNIT INDICINDICAATTORORS S 4.3. TCFD CONTENT INDEX Disclousure Tcfd recommended disclosure Sustainability Report Section(s) Additional Reference(s)/Link(s) a) Describe the board’s oversight of climate-related risks and opportunities. C1.1a, C1.1b Governance Pages 126 to 131 b) Describe management’s role in assessing and managing climate-related risks and opportunities. C1.2, C1.2a a) Describe the climate-related risks and opportunities the organization has identi昀椀ed over the short, medium, and long term. - C2.3a, C2.4a Strategy b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and 昀椀nancial planning. - C2.3a, C2.4a, C3.1, C3.3, C3.4 c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower - C3.2, C3.2a scenario. a) Describe the organization’s processes for identifying and assessing climate-related risks. - C2.1, C2.1a, C2.1b, C2.2, C2.2a Risk Management b) Describe the organization’s processes for managing climate-related risks. - C2.1, C2.2 c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk - C2.1, C2; 1b, C2.2 management. a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk C4.2, C9.1 management process. Page 78 to 81 C6.1, C6.2, C6.3, C6.5, C6.10, C7.1, Metrics and Targets b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. Page 16 C7.1a, C7.2, C7.3, C7.3a, C7.5, C7.6, C7.6a c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets. C4.1, C4.1a, C4.1b, C4.2a 158
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