2005 Sustainability Report
Message from the President
In 2005, we received more distinctions than ever before in our history. Paradoxically, we were also faced with one of the most serious conflicts the Company has ever experienced with neighboring communities and social movements.
In the new business environment, only companies that manage adequately to integrate economic, social and environmental factors in their business planning to the extent necessary to be considered sustainable will have a place in the market – and, indeed, a future.
Aracruz is a competitive company since it combines the advantages of a low cost producer with economies of scale, advanced forestry technology and the short cultivation cycle allowed by the Brazilian climate.
This outstanding position implies even greater responsibility. Our "social license" to operate depends on the quality of the environment, the welfare of the communities in which we are present and the trust of the stakeholders involved – our employees, customers, shareholders and suppliers, among others. Maintaining and expanding the trust of these publics is a crucial challenge for our sustainability strategy.
In 2005, we received more distinctions than ever before in our history, with three in particular being of great importance: our listing on two sustainability indexes (the NYSE Dow Jones and the Bovespa ISE) and the granting of a foreign currency investment grade rating by Standard & Poor’s.
Paradoxically, during the same period we were also faced with one of the most serious conflicts the Company has ever experienced with neighboring communities and social movements. Members of the Tupinikim and Guarani communities, supported by members of non-governmental organizations, invaded an Aracruz plantation area in Espírito Santo and a few months later also invaded the Barra do Riacho mill site in order to pressure the government to expand their reservation.
These conflicts, and the political, social and environmental issues that precede and underpin them, are part of the context of a company that uses natural resources, operates in regions that often lack any governmental support and exports to increasingly demanding international markets that are ever more sensitive to social and environmental questions. We are a Company whose visibility has been raised even further owing to its world leadership in its segment.
Aracruz is aware of this challenge and seeks to face the problems and conflicts of the forestry sector – and its own problems in particular – with transparency and dialogue. This involves a learning process for all the parties involved, since the complexity of issues involved permits neither a single solution nor an absolute truth.
In this report we approach sensitive questions such as relationships with indigenous communities, the question of water resources, biodiversity, the use of agricultural defense systems and forestry resources deriving from our operations.
Continuing our Strategic Sustainability Plan that was initiated the previous year, in 2005 we took action on aspects of governance, transparency and stakeholder relationships.
We have continued our dialogue with environmental NGOs in Espírito Santo and have opened new channels for relationships in the south of Bahia and in Rio Grande do Sul. Our volunteer program has reached the Guaíba Unit and the actions involved, added to those of the Barra do Riacho Unit, have benefited more than 19,000 people. We have made progress in meeting our goal of obtaining forest certification for all our plantations, while the areas under our direct management in Espírito Santo and Bahia are already fully certified by CERFLOR.
We made further strides in maritime transportation, leading to significant reductions in truck traffic and fuel savings. Also in this area, Aracruz was the first Latin American company to set targets for the reduction of greenhouse gas emissions, by joining the Chicago Carbon Exchange (CCX).
However, not all the targets set for 2005 were met within the established deadlines. The results and the justifications for these deviations are presented on our website www.aracruz.com.br. Our efforts will proceed in 2006 in compliance with the objectives defined and presented at the end of this publication.
In an attempt to make our communication process more transparent, we invited some stakeholders to evaluate our 2004 Sustainability Report. In this new edition, we are seeking to satisfy some of the expectations that were revealed through this appraisal.
This year, once again the Sustainability Report was submitted to independent evaluation, conducted by the Bureau Veritas Quality International (BVQI), seeking to assure consistency and trustworthyness of the information that has been provided.
Carlos Augusto Lira Aguiar
President and CEO
Aracruz invites the readers of this publication to send us their criticism, comments and suggestions, or to visit our operations. Contact names and addresses are available on Additional information of this report.