Indicators

413-1 a) Percentage of operations with implemented local community engagement, impact assessments, and/or development programs, including the use of:

413-1 a) i) social impact assessments, including gender impact assessments, based on participatory processes;

Banrisul has an ongoing Sponsorship Program designed to support projects in the areas of culture, sports, social responsibility, education and technological innovation with a focus on serving the interests and meeting the needs of the target audience. Projects sponsored and supported by Banrisul seek to expand access to personal training and to cultural activities and equipment that promote, in addition to knowledge and experiences for young people and adults, the generation of employment and income for communities. Some of these investments enable technical improvements in cultural and sports venues, the implementation of projects for the conservation of tangible and intangible cultural heritage and access to innovation and technological training, encouraging young people and children to participate in sports and cultural activities and to generate knowledge and income, expanding opportunities and contributing to the promotion of citizenship, human development and respect for equality.                            

413-1 a) ii) environmental impact assessments and ongoing monitoring;

Through its sponsorships, the Bank supports third-party projects. There is no effective monitoring of their environmental impact, and the proponents are responsible for adapting to best practices in this field. However, criteria/features such as sustainability, social responsibility and citizenship, democratization, among others, are essential in the analysis of projects supported by Banrisul, and proposals which, for example, damage the environment or mistreat animals are considered inappropriate.

413-1 a) iii) public disclosure of results of environmental and social impact assessments;

413-1 a) iv) local community development programs based on local communities’ needs;

413-1 a) v) stakeholder engagement plans based on stakeholder mapping;

413-1 a) vi) broad based local community consultation committees and processes that include vulnerable groups;

413-1 a) vii) c works councils, occupational health and safety committees and other worker representation bodies to deal with impacts;

413-1 a) viii) formal local community grievance processes.

Not applicable. Banrisul’s sponsorships support third-party projects and, even though the Bank is not in a position to effectively monitor direct environmental impacts, possible environmental risks are assessed from the analysis of proposals to the finalization of projects, and proponents must comply with sustainability principles laid out in the call for proposals. By supporting these projects, the Bank is integrated into the communities, seeking to help transform and improve the quality of life part of the local population. In return, the brand is associated with the various projects supported, expanding the audience reached and the possibilities for relationships with new and traditional customers.

Banrisul operates in the public and private sectors. The Bank and its affiliates currently have several types of suppliers: lawyers; consultants; system analysts; sellers of perishable and non-perishable goods; international IT companies; armored truck companies; and numerous other service providers.

The number of direct suppliers, in 2022, is estimated at 1,093. The Bank hires suppliers to provide services and products unrelated to its core activity, i.e., they provide supporting services  and products, including security, cleaning, transportation of valuables, acquisition of IT systems, telephone and internet services, acquisition of furniture, building rental, acquisition of sundry items.

Banrisul acts as a financial agent for customers, from industry, agriculture, transport, service, trade and health sectors. Most of them are located in Brazil’s South region.

2-6 a) Report the sector(s) in which it is active.
The Banrisul serves the public and private sectors in all economic segments, including civil servants, private sector employees, self-employed professionals and farmers.

2-6 b) Describe its value chain, including:

2-6-b) i) the organization’s activities, products, services, and markets served;
In its commercial portfolio, Banrisul grants lines of credit that rely on Guarantor Funds, including to small businesses. For the Rio Grande do Sul’s local governments, it offers lines of credit with its own funds to finance capital goods, and on-lending lines of the Brazilian Development Bank (BNDES, in Portuguese) for companies’ and industries’ installation and expansion projects.

Banrisul’s operations cover the individual and corporate segments and offer commercial, real estate and rural financing. The Group offers its customers a broad range of financial products and services, including credit cards, securities brokerage, pool group management, means of payment, insurance, private pension plans, savings bonds and intermediation of variable and fixed income and foreign exchange transactions.

2-6-b) ii) the organization’s supply chain;
Banrisul and its affiliates currently have several types of suppliers: lawyers, consultants, system analysts, vendors of perishable and non-perishable goods, international IT companies, armored truck companies and numerous other service and providers.

2-6-b) iii) the entities downstream from the organization and their activities.
Banrisul acts as a financial agent for customers from industry, agriculture, transport, service, trade and health sectors. Most of them are located in Brazil’s South region.

2-6 c) Report other relevant business relationships.
There are no other relevant business relationships.

2-6 d) Describe significant changes in 2-6-a, 2-6-b, and 2-6-c compared to the previous reporting period.
There were no significant changes.

The ratio of the annual total compensation for the organization’s highest-paid individual to the median  annual total compensation for all employees is 12.0%, while the ratio of the percentage increase in the annual total compensation for the organization’s highest-paid individual to the median percentage increase in the annual total compensation for all employees is 0.8%.

Annual salary increases occur in April (regulatory promotions retroactive to January) and in September (collective bargaining agreement).

For calculation purposes, the CEO, who is not a Bank employee, was considered as the highest-paid individual. The other workers who are not employees were not considered in the calculation. The total compensation (salaries, bonuses, job commission, full performance bonus, annual bonus, overtime, singing bonus, relocation bonus, management, retirement bonus, and retirement incentive) was considered in calculating compensation.

2-21 a) Report the ratio of the annual total compensation for the organization’s highest-paid individual to the median.

The ratio of the annual total compensation of the organization’s highest paid individual and the average annual total compensation of all other employees (excluding the highest paid) was 10%.

2-21 b) Report the ratio of the percentage increase in annual total compensation for the organization’s highest-paid individual to the median percentage increase in annual total compensation for all employees (excluding the highest-paid individual).

The median remuneration of employees, excluding the highest paid, fell from 2022 to 2023, due to the dismissal of 506 employees through the Voluntary Severance Program, so it was not possible to calculate the proportion of the percentage increase requested in item b.

2-21 c) Report contextual information necessary to understand the data and how the data has been compiled.

The Chief Executive Officer was not included in this calculation, since there was a change to the Board of Executive Officers. The reference was the Deputy Chief Executive Officer, who is not an employee of the Bank. Total compensation included salaries, bonuses, job commission, full-time dedication bonus and length of service bonus, overtime, singing bonus, relocation bonus, executive officer bonus, retirement bonus and incentivized retirement plan.

2-29 a) Describe its approach to engaging with stakeholders, including:

2-29 a) i) the categories of stakeholders it engages with, and how they are identified;

• Employees
• Shareholders/investors
• Market analysts
• Customers
• Suppliers
• Government
• Unions
• Board of Executive Officers
• Board of Directors
• Social, Environmental and Climate Responsibility Committee – CRSAC Sustainability Committee

2-29 a) ii) the purpose of the stakeholder engagement;

Banrisul focused its efforts on engaging its stakeholders, especially internal stakeholders and managers. Due to the hiring of new employees and the fact that it was a year marked by changes in the Institution’s management, Banrisul intensified its efforts to connect employees and engage these professionals in the new strategic guidelines.

2-29 a) iii) how the organization seeks to ensure meaningful engagement with stakeholders.

Through the Onboarding Program, the People and Culture Development Unit – Corporate University, responsible for organizing the program, provided newcomers with a unique experience that allowed them to deepen their knowledge of Banrisul’s history, mission, culture, values, practices and goals. The initiative reinforces the Bank’s commitment to the continuous training of its employees, striving for constant improvement.

  Stakeholder categories with whom Banrisul engages are:

• Employees;
• Shareholders/investors;
• Market analysts;
• Customers;
• Suppliers;
• Government;
• Unions;
• Executive Board;
• Board of Directors;
• Social, Environmental and Climate Responsibility Committee – CRSAC.

The Institution has identified the need to create a stakeholder engagement program to strengthen its relationship with these groups and provide greater business opportunities and chances to listen to them. The goal is that this program enables the Institution to explore relationship channels with several groups.

For preparing its materiality, Banrisul surveyed all its target audiences, creating an opportunity to get to know their interests.

The Chair of the Board of Directors is not the Company’s CEO.

2-11 a) Report whether the chair of the highest governance body is also a senior executive in the organization.

The chair of the Board of Directors is not in Banrisul’s CEO.

2-11 b) If the chair is also a senior executive, explain their function within the organization’s management, the reasons for this arrangement, and how conflicts of interest are prevented and mitigated.

The chair of the Board of Directors is not in Banrisul’s CEO.

2-30 a) Report the percentage of total employees covered by collective bargaining agreements.

100% of employees are covered by collective bargaining agreements.

2-30 b) For employees not covered by collective bargaining agreements, report whether the organization determines their working conditions and terms of employment based on collective bargaining agreements that cover its other employees or based on collective bargaining agreements from other organizations.

All employees are covered by collective bargaining arrangements, in particular the Collective Bargaining Agreement and its amendment.

100% of employees are covered by collective bargaining agreements.

2-17 a) Report measures taken to advance the collective knowledge, skills, and experience of the highest governance body on sustainable development.

Every year, Management takes specific courses on topics such as corporate and financial market laws, data disclosure, internal controls, the code of ethics, the Anti-Corruption Law and other subjects related to Banrisul’s activities. In 2023, sustainability and ESG guidelines were included in the lectures, as requested by Management.

In compliance with Law 13,303/16, every year, elected Management members attend specific training on corporate and capital market legislation, disclosure of information, internal controls, code of conduct, Law 12,846, of August 1, 2013 (Anti-Corruption Law) and other topics related to the activities of a publicly held company or government-controlled company. In 2022, ESG was included in the list of topics. Additionally, Management members may participate in other courses/events with themes pertinent to their responsibilities in the respective governance bodies, if said theme is interesting for the Company.

2-16 a) Describe whether and how critical concerns are communicated to the highest governance body.

At its ordinary or extraordinary meetings, the Board of Directors receives and resolves on the concerns reported by the Executive Board and the Statutory Audit, Eligibility and Remuneration, Risk and Social, Environmental and Climate Responsibility Committees. In addition to these, the crucial concerns received through the Whistleblowing Channel are communicated to the Board of Directors by means of reports which must contain, at the very least, the number and nature of the communications received, the areas responsible for dealing with the situation, the average time for treatment and the measures adopted by the Institution. If it is proven that employees engaged in wrongdoing, the complaints are brought to the attention of the Ethics Committee.

2-16 b) Report the total number and the nature of critical concerns that were communicated to the highest governance body during the reporting period.

The number and nature of critical concerns are deemed confidential by Banrisul.

Suspicions or evidence of non-compliance with Banrisul’s Code of Ethics and Conduct, policies, standards and institutional regulations in force should be reported through the Whistleblowing Channel, which allows the anonymous reporting of the misconduct, ensuring the right to confidentiality and protection against retaliation. The internal and external channels are available, respectively, on the Corporate Intranet and on Banrisul’s website (www.banrisul.com.br) and are intended for receiving misconduct reposts and complaints from employees and other stakeholders. The Control and Compliance Department is the independent area responsible for managing this channel.

Every six months the Board of Directors reviews a report on Banrisul’s Whistleblowing Channel. In compliance with article 3, paragraph 2, of CMN Resolution 4,859/2020, the Control and Compliance Department prepares a report with the following minimum information:

I – the number of reports received;
II – the nature of the reports;
III – the departments responsible for handling the situation;
IV – the average response time; and
V – the measures adopted by the Institution.

Banco do Estado do Rio Grande do Sul (Banrisul) is a government-controlled corporation. Banrisul’s General Management, its administrative headquarters, is located in the city of Porto Alegre, Rio Grande do Sul state.

In 2022, there were 1,085 significant instances of non-compliance with laws and regulations, of which only one incurred in fine (one instance of irregular waste disposal). 720 Municipal Tax Unit (UFM, in Portuguese) (R$3,554.06) repaid by the outsourced cleaning company (as set forth in the contract) and other non-monetary penalties. Out of the 1,084 administrative or judicial proceedings that did not incur in fines, 1,082 are social in scope: six are events related to accessibility, 20 to over-indebtedness, one to customer moral harassment, 1,055 are labor complaint events (according to CMN Resolution 4,943/21), one environmental event (disposal of recyclable waste in an organic waste container), one climate-related event (collection lawsuit to recover the amounts from the plaintiff’s property insurance policy, affected by a storm).

Additionally, Banrisul received 262 notifications in this reporting cycle, 45 of which were fines for instances of non-compliance with laws, and all of these were paid during previous reporting periods.

2-27 a) Report the total number of significant instances of non-compliance with laws and regulations during the reporting period, and a breakdown of this total by:

2-27 a) i) instances for which fines were incurred;

2-27 a) ii) instances for which non-monetary sanctions were incurred.

In 2023 there were no significant incidents of non-compliance with laws and regulations¹

¹For 2023, in an effort to improve information management, the scope of the indicator was limited to fines and sanctions imposed on the institution in relation to its direct conduct on these issues. In this period, non-compliance incidents that cause social, environmental or climate damage are considered. For this reason, figures published for previous years have been adjusted in this report. This has led to a reduction in the number of cases presented.

2-27 b) Report the total number and the monetary value of fines for instances of noncompliance with laws and regulations that were paid during the reporting period, and a breakdown of this total by:

2-27 b) i) fines for instances of non-compliance with laws and regulations that occurred in the current reporting period;

2-27 b) ii) fines for instances of non-compliance with laws and regulations that occurred in previous reporting periods.

¹All loss events involving administrative and court proceedings, administrative fines and damage to physical assets were considered as fines, such as events associated with bad weather and damage to physical assets (climate scope), data processing and over-indebtedness (social scope).

2-27 c) Describe the significant instances of non-compliance.

Significant cases of non-compliance consist of the total number of operational risk events with a social, environmental and climate scope, comprising fines, notices, damage to physical assets, administrative and legal proceedings (civil and labor) against the Banrisul Group.

2-27 d) Describe how it has determined significant instances of non-compliance.

The instances of social, environmental and climate non-compliance are identified based on Section VIII — Management of social, environmental and climate risks (articles 38-A, 38-B, 38-C) of Resolution 4,557/17 of the National Monetary Council. The articles mentioned above exemplify social, environmental and climate events that may lead to losses for the Institution. When these events are identified based on operating losses, the social, environmental or climate scope is marked.

Banrisul’s Board of Directors identifies and manages conflicts of interest based on, but not limited to, applicable legal standards provided for in Article 156 of the Brazilian Corporate Law and article 25 of its Bylaws. Furthermore, the Code of Ethics and Conduct is widely disseminated to management members, board members, employees, interns, members of the Banrisul Group, business partners, suppliers and service providers. In the event of a potential conflict of interest, members of the Board of Directors, the Audit Committee and the Ethics Committee must abstain from resolving on matters in which this conflict is identified. Another important document governing this topic is the Related-Party Transactions Policy that outlines the conditions credit transactions and other related-party transactions.

The item “SUBORDINATION, SERVICE OR CONTROL RELATIONSHIPS BETWEEN THE ISSUER’S MANAGEMENT AND ITS SUBSIDIARIES, AFFLIATES AND OTHERS” of the Company’s Reference Form informs the interest held by Banrisul management in management of other companies in the Banrisul Group. The only controlling shareholder is the State of Rio Grande do Sul.

Related-party transactions, as well as measures taken by Banrisul, can be found in Note 29, pages 118 and 119, to the 2022 Financial Statements, available here.

2-15 a) Describe the processes for the highest governance body to ensure that conflicts of interest are prevented and mitigated.

Banrisul recognizes and manages conflicts of interest in all activities, including in relation to the Board of Directors, in accordance with the applicable legal rules, including Article 156 of Brazilian Corporate Law and Article 25 of the Bylaws.

In addition to the legal regulations, it has a Code of Ethics and Conduct and a Conflict of Interest Booklet for all those involved in the Banrisul Group, both of which are widely disseminated.  

When it comes to credit transactions, compliance also includes the Related-Party Transaction Policy, which defines the conditions for these and other transactions to be carried out.

2-15 b) Report whether conflicts of interest are disclosed to stakeholders, including, at a minimum, conflicts of interest relating to:

2-15 b) i) cross-board membership;

The participation of management members in other positions in Banrisul Group companies is reported in item 7.6 of the 2023 Reference Form.

2-15 b) ii) cross-shareholding with suppliers and other stakeholders;

There are no shareholdings of suppliers or other stakeholders not listed in the 2023 Financial Statements, page 38.

2-15 b) iii) existence of controlling shareholders;

The only controlling shareholder is the State of Rio Grande do Sul.

2-15 b) iv) related parties, their relationships, transactions, and outstanding balances.

We refer to Note 29 to the 2023 Financial Statements. Note 29 – transactions with related parties:

(a) Transactions with related parties are disclosed in compliance with Technical Pronouncement CPC 05(R1) and CMN Resolution 4,818/20.Account balances relating to transactions between consolidated companies are eliminated in the consolidated financial statements and also take into account the absence of risk. With regard to transactions carried out with the State Government and entities fully or jointly controlled by it, we have opted for the partial exemption granted by CMN Resolution 4,818/20. In this case, only the most significant transactions are disclosed. We carry out banking transactions with related parties, including checking account deposits (non-interest-bearing), interest-bearing deposits, open market funding, loans and service contracts. These transactions are carried out at the usual average market amounts, terms and rates in force on the respective dates, on an arm’s length basis.

The Control and Risk Executive Office is responsible for managing the Institutions’ corporate risks.

As regards Integrated Capital and Corporate Risk Management, the Chief Risk Officer (CRO) is responsible for the Corporate Risk Management Department and his/her duties include ensuring that the risk process monitors, controls, evaluates and plans capital need and goals and identifies, measures, monitors, reports, controls and mitigates credit, market, IRRBB, liquidity, operational, social, environmental and climate risks associated with the Prudential Conglomerate, communicating said risks to the Risk Committee, the CEO, the Board of Directors and regulatory agencies.

The Corporate Risk Executive Superintendent reports to the CRO on the Institution’s risk management. At least every year, risk management reports are submitted to the Board of Directors for consideration.

2-13 a) Describe how the highest governance body delegates responsibility for managing the organization’s impacts on the economy, environment, and people, including:

2-13 a) i) whether it has appointed any senior executives with responsibility for the management of impacts;

The Board of Directors is responsible for steering the Bank’s business, guidelines and institutional goals. It is advised by the Audit, Risk, Eligibility and Compensation, and Social, Environmental and Climate Responsibility Committees, all of which operate on a permanent basis.

The Corporate Risk Executive Superintendent reports to the Chief Risk Officer (CRO) on the Institution’s risk management. The executive is responsible for the Corporate Risk Unit and for coordinating capital management and credit, market, IRRBB, liquidity, operational, social, environmental and climate risks, covering all the institutions in the Prudential Conglomerate. It also considers the possible impacts of risks associated with other companies controlled by Conglomerate companies and other significant risks identified.

In 2023, the Risk Office incorporated sustainability into the Social, Environmental and Climate Risk Department, with the intention of reinforcing the importance of sustainability and promoting integrated action on related risks and opportunities. Thus, the management of the Social, Environmental and Climate Responsibility Policy is aligned with the risk guidelines, integrating processes and directing the focus of its risk and responsibility initiatives.

2-13 a) ii) whether it has delegated responsibility for the management of impacts to other employees.

The corporate risk executive superintendent reports to the Chief Risk Office (CRO) on the Institution’s risk management.

2-13 b) Describe the process and frequency for senior executives or other employees to report back to the highest governance body on the management of the organization’s impacts on the economy, environment, and people.

The Institution has developed a series of indicators and flags to monitor its risk appetite, which are periodically monitored and reported to Senior Management by means of reports and a dashboard. The risk matrix is updated dynamically, with attention to the risks with the greatest exposure. Processes are monitored according to the frequency and impact of their respective risks. The Risk Appetite Statement (RAS), documented for Banrisul’s Prudential Conglomerate, is reviewed annually with the support of the Risk Committee, the Board of Executive Officers and the Chief Risk Officer (CRO).

The credit policies definitions are available in internal regulations and are also parameterized in the “Customer Registration”, “Negative Incidents” and “Risk Calculation” systems. The Bank currently checks with external agencies whether the customer, either an individual or a company, has been listed as an “Employer that uses Forced Labor” or as causing “Environmental Damage” (conviction for environmental damage in actions filed by Brazil’s environmental protection agency (IBAMA, in Portuguese)).

Customers identified as “Employer of Forced Labor” are prevented from contracting any type of credit operations. We also monitor customers who already have a relationship with us and who may be included in those lists, taking specific actions to discontinue the business relationship.

2-24 a) Describe how it embeds each of its policy commitments for responsible business conduct throughout its activities and business relationships, including:

In its relationship with the various sectors of society, Banrisul acts based on principles of institutional conduct designed to value people and respect human rights. These principles are described in a series of institutional policies, approved by the Board of Directors, which determine the conduct expected of employees, contractors and suppliers.

2-24 a) i) how it allocates responsibility to implement the commitments across different levels within the organization;

The Ethics Committee, which reports to the Chief Executive Officer, is the body responsible for implementing, disseminating, training, reviewing and updating Banrisul’s Code of Ethics and Conduct in order to ensure its efficacy and effectiveness, in addition to analyzing and judging the issues submitted to it, recommending correction of conduct or disciplinary sanctions. The Committee has autonomy and operates independently. In the event of a conflict of interest, the Board of Executive Officers takes the final decision.

2-24 a) ii) how it integrates the commitments into organizational strategies, operational policies, and operational procedures;

Banrisul has an Ethics Committee responsible for implementing, disseminating, training, reviewing and updating Banrisul’s Code of Ethics and Conduct in order to ensure its efficacy and effectiveness, in addition to analyzing and judging the issues submitted to it, recommending correction of conduct or disciplinary sanctions. Therefore, it is incumbent upon the Ethics Committee to carry out this integration process, through policies and training.

Moreover, we had the Privacy and Data Protection Governance Program, which was responsible for integrating data protection commitments.

2-24 a) iii) how it implements its commitments with and through its business relationships;

In its relationship with the various sectors of society, Banrisul acts based on principles of institutional conduct designed to value people and respect human rights. These principles are described in a series of institutional policies, approved by the Board of Directors, which determine the conduct expected of employees, contractors and suppliers. These policies are communicated by means of an Administrative Instruction.

2-24 a) iv) training that the organization provides on implementing the commitments.

All employees receive training on the Code of Ethics and Conduct and the Anti-Corruption Code.

As regards data protection, the Data Privacy and Protection Governance Program was set up this year, comprising several fronts, including:

• Mapping of all activities involving personal data processing, identifying the data life cycle, from collection to deletion, and the appropriate legal framework;
• Creation of a customer service channel for holders of personal data, ensuring the full exercise of all the rights set out in the Brazilian General Data Protection Law (LGPD, in Portuguese);
• Formalization in a standard of a flow of adjustments of contracts with third parties to comply with the LGPD, including the definition of a methodology to help identify the Processor x Controller x Joint Controllers and define the flow for indicating LGPD clauses for business and administrative contracts;
• Implementation of the Privacy by Design and Privacy by Default methodologies in order to ensure the privacy and protection of personal data in the design of new products and services;
• Creation of specific guidelines for handling or responding to security incidents involving personal data, considering the requirements imposed by the LGPD in order to complement Banrisul’s existing Information and Cyber Security Policy; and
• Development of internal training for all the staff on the main points addressed by the Law and their impacts on the workplace, as well as creation of a website featuring content that helps disseminate a culture of data privacy and protection in the Institution.

2-7 a) Report the total number of employees, and a breakdown of this total by gender and by region.

2-7 b) Report the total number of:

2-7 b) i) permanent employees, and a breakdown by gender and by region;

2-7 b) ii) temporary employees, and a breakdown by gender and by region;

2-7 b) iii) non-guaranteed hours employees, and a breakdown by gender and by region;

2-7 b) iv) full-time employees, and a breakdown by gender and by region;

2-7 b) v) part-time employees, and a breakdown by gender and by region.

¹There are no temporary, non-guaranteed hours and part-time employees.

¹There are no temporary, non-guaranteed hours and part-time employees. There are no employees in the North and Northeast regions.

2-7 c) Describe the methodologies and assumptions used to compile the data, including whether the numbers are reported:

2-7 c) i) in head count, full-time equivalent (FTE), or using another methodology;

2-7 c) ii) at the end of the reporting period, as an average across the reporting period, or using another methodology.
Data was generated based reports from HR’s own systems, considering the totals at the end of the year.

2-7 d) Report contextual information necessary to understand the data reported under 2-7-a and 2-7-b.
All permanent employees reported are full-time employees.

2-7 e) Describe significant fluctuations in the number of employees during the reporting period and between reporting periods.
There was a 5.0% increase in employees between 2022 and 2023. To strengthen the team and bring new talent to the Institution, 244 new employees joined the IT departments and 898 employees joined the branch network in 2023.

Employees, by gender¹ ²

¹Banrisul does not have temporary, non-guaranteed hours and part-time employees.

²All permanent employees are full-time employees.  

Employees, by region

¹Banrisul does not have employees in the North and Northeast regions.

Data were gathered from a proprietary system, considering total employees for the reference period.

2-2 a) List all its entities included in its sustainability reporting.
The conglomerate comprises the following subsidiaries and affiliates: Banrisul Armazéns Gerais S.A; Banrisul S.A. Corretora de Valores Mobiliários e Câmbio; Banrisul S.A. Administradora de Consórcios; Banrisul Soluções em Pagamentos S.A.; and Banrisul Seguridade Participações S.A., all of which are included in the report and the financial statements.

2-2 b) If the organization has audited consolidated financial statements or financialinformation filed on public record, specify the differences between the list of entitiesincluded in its financial reporting and the list included in its sustainability reporting.
The Sustainability Report presents Banrisul’s consolidated information; other entities are not included.

2-2 c) If the organization consists of multiple entities, explain the approach used forconsolidating the information, including:
The approach used in the Sustainability Report concerns the company’s business or service, not necessarily its shareholding structure.

2-2 c) i) whether the approach involves adjustments to information for minority interests;
It does not.

2-2 c) ii) how the approach takes into account mergers, acquisitions, and disposal ofentities or parts of entities;
There were no mergers, acquisitions or disposals.

2-2 c) iii) whether and how the approach differs across the disclosures in this Standard and across material topics.
It does not.

The consolidated financial statements include the operations of Banrisul, its offices abroad, its subsidiaries (Banrisul Armazéns Gerais S.A., Banrisul S.A. Corretora de Valores Mobiliários e Câmbio, Banrisul S.A. Administradora de Consórcios, Banrisul Soluções em Pagamentos S.A., Banrisul Seguridade Participações S.A.) and investment fund quotas in which Banrisul substantially takes or incurs in risks and benefits. We explain the Banrisul Group in detail, which comprises six subsidiaries and four affiliated companies.

2-18 a) Describe the processes for evaluating the performance of the highest governance body in overseeing the management of the organization’s impacts on the economy, environment, and people.

The Board of Directors is subject to a formal performance evaluation with the aim of gauging effectiveness and improving Banrisul’s governance — an evaluation similar to the one applied annually to the Board of Executive Officers and the Chief Executive Officer. The evaluation process complies with Law 13,303/16 and State Decree 54,110/18, covering self-evaluation and comparison of the results obtained with the targets set, among others.

2-18 b) Report whether the evaluations are independent or not, and the frequency of the evaluations.

Performance appraisals are carried out annually, anonymously, individually and non-independently.

2-18 c) Describe actions taken in response to the evaluations, including changes to the composition of the highest governance body and organizational practices.

All answers to the evaluation questionnaires are compiled into a report, which is sent to the Eligibility and Compensation Committee for prior analysis and then presented to the Board of Directors for consideration. The body suggests improvements in carrying out their duties.

Performance evaluation is an essential step to assess effectiveness, contributing to enhance the Organization’s governance. The Board of Directors carries out an annual formal evaluation of the Executive Board and its Chair performance, as well as of its own performance, a process that include self-evaluation questions. The annual evaluation is carried out according to procedures previously defined by the Board of Directors and is anonymous and individual.

All answers to the evaluation questionnaires are compiled into a report, which is sent to the Eligibility and Compensation Committee for prior analysis and then presented to the Board of Directors for consideration. The body itself suggests improvements in carrying out their duties.

2-5 a) Describe its policy and practice for seeking external assurance, including whether and how the highest governance body and senior executives are involved;
As a way of ratifying the credibility of its information, this report was submitted to an external and independent audit of the Bank, carried out by the company Deloitte Touche Tohmatsu Auditores Independentes Ltda, with a scope of work defined by the sustainability area, coordinator of the reporting process, with the knowledge of the independent Internal Audit area, which is the manager of the contract with Deloitte at Banrisul.

2-5 b) If the organization’s sustainability reporting has been externally assured:

2-5-b) i) provide a link or reference to the external assurance report(s) or assurance statement(s);
The assurance report is attached to the 2023 Sustainability Report.

2-5-b) ii) describe what has been assured and on what basis, including the assurance standards used, the level of assurance obtained, and any limitations of the assurance process;
The scope of the assurance is mentioned in the Assurance Report, which is attached to the 2023 Sustainability Report.          

2-5-b) iii) describe the relationship between the organization and the assurance provider.
Banrisul also works with Deloitte to audit its financial statements. Deloitte is an independent external entity.

Banrisul is concerned about the credibility of its information disclosed to the market and submits its sustainability report to independent external limited assurance by Deloitte, which also audits the financial statements.

The assurance letter can be found in the Sustainability Report on page 119.

BOARD OF DIRECTORS

FISCAL COUNCIL

AUDIT COMMITTEE

ELIGIBILITY AND COMPENSATION COMMITTEE

RISK COMMITTEE

SOCIAL, ENVIRONMENTAL AND CLIMATE RESPONSIBILITY COMMITTEE

¹ Sworn in February 2023.

EXECUTIVE BOARD

2-9 a) Describe its governance structure, including committees of the highest governance body.

¹The members have no other duties or commitments to report.

¹The members have no other duties or commitments to report.

¹The members have no other duties or commitments to report.

¹The members have no other duties or commitments to report.

2-9 b) List the committees of the highest governance body that are responsible for decision-making on and overseeing the management of the organization’s impacts on the economy, environment, and people.

The Board of Directors is responsible for steering the Bank’s business, guidelines and institutional goals. It is advised by the Audit, Risk, Eligibility and Compensation, and Social, Environmental and Climate Responsibility Committees, all of which operate on a permanent basis.

2-9 c) Describe the composition of the highest governance body and its committees by:

2-9 c) i) executive and non-executive members;

2-9 c) ii) independence;

2-9 c) iii) tenure of members on the governance body;

2-9 c) iv) number of other significant positions and commitments held by each member, and the nature of the commitments;

Answered in item a.

2-9 c) v) gender;2-9 c) vi) under-represented social groups;

2-9 c) vii) competencies relevant to the impacts of the organization;
The competencies of members of management are assessed during the eligibility process, according to the information presented in their CVs, in compliance with the Institution’s Nomination and Succession Policy.  In addition, training on Law 13,303 is offered every year to address relevant topics, enabling a diversity of thought and more informed decision-making.

2-9 c) viii) stakeholder representation.
Of the 11 seats available on the Board of Directors, one (1) is reserved for minority common shareholders, one (1) is reserved for minority preferred shareholders, and one (1) is reserved for an employee representative.

All employees receive training on the Code of Conduct and Ethics and on Anti-Corruption. Banrisul has other institutional policies and makes a whistleblowing channel available both on the internal and external websites.

Banrisul’s Whistleblowing Channel is a communication tool that allows employees, customers, users, partners or suppliers to report possible misconduct of any nature related to the Institution’s activities that affect its reputation and violate its internal controls and Banrisul’s Compliance Program.

The Whistleblowing Channel recorded stable figures in 2018 and 2019, receiving 155 and 153 reports, respectively. In the following years, the number of reports spiked significantly to 536 in 2020 and 433 in 2021. This increase had two main reasons: first, the Institution made a channel available to external stakeholders, offering more visibility, thus increasing the number of reports; and second, the pandemic, which altered the service routine at the branches, leading Customers to use this channel to request information from the Bank.

In 2022, there was a significant reduction, only 234 contacts were made, reflecting the acculturation of the correct use of the channel.

2-26 a) Describe the mechanisms for individuals to:

2-26 a) i) seek advice on implementing the organization’s policies and practices for responsible business conduct;

All employees receive training on the Code of Ethics and Conduct and the Anti-Corruption Code. Furthermore, there are rules, institutional regulations and the Whistleblowing Channel, available on the website, which allows the reporting of irregularities, with the option of anonymity, confidentiality and protection against retaliation.

2-26 a) ii) raise concerns about the organization’s business conduct.

Suspicions or evidence of non-compliance with these rules must be reported through the Whistleblower Channel, which receives reports of wrongdoing, with confidentiality, protection against retaliation and the option of anonymity.

2-28 a) Report industry associations, other membership associations, and national or international advocacy organizations in which it participates in a significant role.

The Bank participates in Febraban’s committees and squads, in AMCHAM’s ESG Committee and the Interinstitutional Committee on Environmental Education (CIEA in Portuguese).

Banrisul’ participates in Febraban’s committees and squads, in AMCHAM’s ESG Committee and the Interinstitutional Committee on Environmental Education (CIEA in Portuguese).

2-10 a) Describe the nomination and selection processes for the highest governance body and its committees.

The Board of Directors currently has 11 members, of whom (i) eight are appointed by the controlling shareholder, in accordance with the current legislation (Federal Law 13,303/16; Federal Law 6,404/46 and Rio Grande do Sul State Decree 54,110/18); ii) one is appointed by the common minority shareholders, (iii) one is appointed by the preferred minority shareholders and (iv) one is a representative of employees, elected internally in accordance with regulations.

The Eligibility and Compensation Committee analyzes the nominees, checking the eligibility requirements in the Nomination and Succession Policy, which include skills, experience, availability, diversity, knowledge, behavior, culture, age and gender. The Committee reports to the State Attorney General’s Office, which decides whether the requirements have been met and whether there are no impediments. If the nomination is approved, the election process is carried out by the competent body.

2-10 b) Describe the criteria used for nominating and selecting highest governance body members, including whether and how the following are taken into consideration:

2-10 b) i) views of stakeholders (including shareholders);

The Board of Directors has 11 seats, of which one (1) is reserved for minority common shareholders, one (1) is reserved for minority preferred shareholders, and one (1) is reserved for an employee representative.

2-10 b) ii) diversity;

To reinforce its public commitment to diversity, the Organization is responsible for ensuring that, by 2030, at least 30% of the seats in Senior Management, the Fiscal Council and the Statutory Committees are allocated to diversity, a commitment that extends to the Group’s Subsidiaries, as stipulated in article 111 of the Bylaws.

2-10 b) iii) independency;

The Board of Directors currently has 11 members, of whom (i) eight are appointed by the controlling shareholder, in accordance with the current legislation (Federal Law 13,303/16; Federal Law 6,404/46 and Rio Grande do Sul State Decree 54,110/18); ii) one is appointed by the common minority shareholders, (iii) one is appointed by the preferred minority shareholders and (iv) one is a representative of employees, elected internally in accordance with regulations.Through this composition, the Board is in compliance with article 22 of the Bylaws, which determines, among other things, that 30% of the appointed members are independent, a criterion considered by Banrisul when selecting the members of the highest governance body

2-10 b) iv) competencies relevant to the impacts of the organization.

The competencies of members of management are assessed during the eligibility process, according to the information presented in their CVs, in compliance with the Institution’s Nomination and Succession Policy. In addition, training on Law 13,303 is offered every year to address relevant topics, enabling a diversity of thought and more informed decision-making. The current eligibility process carried out by Banrisul involves various spheres (the Finance Department, the Civil House, the State Attorney General’s Office, among others), providing security and reliability for all stakeholders.

After the Management Proposal is published, the shareholders make nominations for the Board of Directors, which are subsequently submitted to the Chief of Staff of the Government of the State of Rio Grande do Sul for approval. If the nominations are approved, their names and information will be forwarded to the Treasury Department for the opening of an administrative proceeding via the PROA system. Upon the receipt of the Administrative Proceeding, the Eligibility and Compensation Committee analyzes the nominee, taking into consideration the eligibility requirements outlined in the Nomination and Succession Policy, which determine that the background and experience of the nominees for the Board of the Directors should be assessed, as well as their time availability to perform the duties, diversity, knowledge, experience, behavior, cultural aspects, age group, and gender. The Committee’s opinion is forwarded to the State Attorney General’s Office for a final decision about the fulfillment of the requirements and the absence of impediments. Once the nomination has been approved by the State Attorney General’s Office, the proceeding returns to the Company, so that the election can be held.

Every two years, before the Annual and Extraordinary Shareholders’ Meeting, shareholders submit their candidates for the highest governance body. The controlling shareholder makes its nominations considering the criteria set forth in the current legislation (Federal Law 13,303/16; Federal Law 6,404/46 and State Decree RS 54,110/18).

In 2022, the Nomination and Succession Policy was updated and stated that the election of Banrisul’s Board of Directors members, should include seats for Diversity groups as of 2023, as follows: I – the shareholder, or group of shareholders, with a right to nominate 25-40% of seats on Banrisul’s Board of Directors, shall be responsible for allocating at least one of the openings for members of the Diversity group; II – the shareholder, or group of shareholders, with a right to nominate for Banrisul’s Board of Directors any percentage higher than that established in item I must allocate two or more openings for members of the Diversity group; III – Grupo Banrisul must adjust the composition of the Boards of Directors, which shall respect the minimum percentage of 30% for openings aimed at the Diversity group, by 2030.

Independence criteria must also be considered, as provided for in article 22 of the Bylaws, which can be read here.

Banrisul’s current eligibility process involves several spheres (State Department of Finance, State Chief of Staff and State Attorney General’s Office, among others). This verification flow conveys security and reliability to all stakeholders.

2-1 a) Report its legal name.

Banrisul – Banco do Estado do Rio Grande do Sul S.A.

2-1 b) Report its nature of ownership and legal form.

A mixed-capital, publicly traded corporation, Banrisul trades its shares on Level 1 of Corporate Governance of B3 (the Brazilian stock exchange) and on the over-the-counter market under the tickers BRSR3, BRSR5 and BRSR6.

The Bank is an indirect public administration body controlled by the Rio Grande do Sul state and linked to the Finance Department.

2-1 c) Report the location of its headquarters.

Banrisul’s administrative headquarters is located in the city of Porto Alegre, Rio Grande do Sul state.

2-1 d) Report its countries of operation. 

The Bank operates only in Brazil, with branches in the states of Rio Grande do Sul, Santa Catarina, São Paulo, Rio de Janeiro, Paraná and the Federal District. As regards foreign operations, in May 2023, the Board of Directors approved the voluntary closing of the Grand Cayman Island branch.

2-23 a) Describe its policy commitments for responsible business conduct, including:

2-23 a) i) the authoritative intergovernmental instruments that the commitments reference;

Banrisul is grounded on the values defined in its code of ethics as transparency, ethics, commitment, integration and efficiency, as well as in principles and guidelines, such as integrity, respect for diversity, people, appreciation of work, social and environmental responsibility, respect for competition, respect for the image and excellence in rendering services.

Anti-Corruption Policy: It lays down the procedures and controls that must be adopted, as well as preventive measures to inhibit acts of corruption. In this sense, in order to improve its controls and adhere to the best market practices, the policy is updated according to changes in legislation. Banrisul also has the Policy on Prevention of Money Laundering and Terrorist Financing, the Compliance Policy, the Internal Controls Policy, the Whistleblowing Channel Policy and the Code of Ethics and Conduct.

The Institution’s integrated Capital and Risk Management structure must be forward-looking and compatible with its business model, the nature of the operations and the complexity of the products, services, activities and processes; proportional to the size and relevance of the risk exposure, as defined by the Institution; appropriate to the risk profile and its systemic importance; and able to assess the risks arising from macroeconomic and market conditions where it operates.

In this context, the identification, measurement, assessment, monitoring, reporting, control and mitigation of several types of risks, namely credit, market, operational, interest rate variation for instruments classified in the banking book, liquidity and social, environmental and climate risks, including relevant risks (according to the criteria established by the Institution) not covered by RWA, are processes intrinsic to the Institutional Capital and Risk Management Structure, as is the observation of adverse effects resulting from interactions between these risks.

Aimed at improving the capital and risk structure with the enactment of CMN Resolution 4,557/17, the Institution documented its risk appetite through the Risk Appetite Statement (RAS) for Banrisul’s Prudential Conglomerate. In this context, Risk appetite is defined by the Basel Committee on Banking Supervision (BCBS) as the level of aggregate and individual risk that an institution is willing to assume within its capacity to achieve its strategic goals and follow its business plan.

2-23 a) ii) whether the commitments stipulate conducting due diligence;

These guidelines/policies set forth responsibilities and consequences for all levels.

2-23 a) iii) whether the commitments stipulate applying the precautionary principle;

The Institution has developed a series of indicators and flags to monitor its risk appetite, which are periodically monitored and reported to Senior Management by means of reports and a dashboard. The risk matrix is updated dynamically, with attention to the risks with the greatest exposure. Processes are monitored according to the frequency and impact of their respective risks.

With the support of external consultants, the structure of the lines of defense was revised in 2023, and inspection activities were transferred from the Internal Audit to the second line of defense. Processes, tools and methodologies for managing risks, controls and auditing were also reviewed. With greater synergy and sharing of information and tools between the second and third lines, it was possible to improve risk management and internal controls.

2-23 a) iv) whether the commitments stipulate respecting human rights.

The principles of the Social, Environmental and Climate Responsibility Policy (PRSAC, in Portuguese) include valuing people and respecting and protecting human rights, including the promotion of inclusion, diversity and financial education. The Bank does not have a specific human rights policy, but as a signatory to the Global Compact since 2013, it reaffirms its commitment to the well-being of its employees and seeks to guarantee the rights of its customers, suppliers and all stakeholders.

2-23 b) Describe its specific policy commitment to respect human rights, including:

2-23 b) i) the internationally recognized human rights that the commitment covers;

No policy specifically addresses human rights issues. However, as a signatory of the Global Compact since 2013, Banrisul reaffirms its commitment to the well-being of its employees and seeks to guarantee the rights of customers, suppliers, and all the public with which it relates.

2-23 b) ii) the categories of stakeholders, including at-risk or vulnerable groups, that the organization gives particular attention to in the commitment.

Employees, customers, suppliers, vulnerable audiences.

2-23 c) Provide links to the policy commitments if publicly available, or, if the policy commitments are not publicly available, explain the reason for this.

Anti-Corruption Policy

Personal Data Protection Guidelines

Social, Environmental and Climate Responsibility Policy

Banrisul’s Anti-Corruption Policy

Code of Ethics and of Conduct

Annual Corporate Governance Charter 2023 – Fiscal Year 2022

2-23 d) Report the level at which each of the policy commitments was approved within the organization, including whether this is the most senior level.

The institutional conduct principles, laid down in several policies, are approved by the Board of Directors.

2-23 e) Report the extent to which the policy commitments apply to the organization’s activities and to its business relationships.

These principles are described in a series of institutional policies, approved by the Board of Directors, which determine the conduct expected of employees, contractors and suppliers.

2-23 f) Describe how the policy commitments are communicated to workers, business partners, and other relevant parties.

These policies are communicated by means of an Administrative Instruction, and all employees acknowledge they have received them by signing an Agreement to Comply.

The Institution is grounded on its values defined in its Code of Ethics as transparency, ethics, commitment, integration and efficiency, as well as in principles and guidelines, such as integrity, respect for diversity, people, appreciation of work, social and environmental responsibility, respect for competition, respect for the image and excellence in rendering services.

The commitments refer to internationally recognized intra-governmental instruments, namely the Brazilian Central Bank, Febraban, National Monetary Council, UN Global Compact Guidelines and SDG 16.

These guidelines/policies set forth responsibilities and consequences for all levels.

Banrisul manages capital and credit, market, interest rate variation risks for the instruments classified in the banking portfolio – IRRBB- in a continuous and integrated manner;  as well as liquidity, operational, social, environmental, climate and other risks considered relevant.

Social risk, defined as the possibility of the Institution incurring in losses from events related to the violation of fundamental rights and guarantees or by acts that are harmful to the common interest, is one of the relevant risks included in the Risk Management Policies.

Banrisul does not have a specific human rights policy.

Human rights are rules that recognize and protect the dignity of all human beings and govern how individual human beings live in society and among themselves, as well as their relationship with the State and the obligations that the State has in relation to them. In this regard, as a signatory to the Global Compact since 2013, Banrisul reaffirms its commitment to the well-being of its employees, as well as to seeking to ensure the rights of its customers, suppliers and all stakeholders to which it engages. The Bank manages social risk, particularly, in order to mitigate possible actions that may occur under the human rights aspect.

The stakeholder categories to whom the Organization pays special attention in this commitment are employees, customers, suppliers and vulnerable publics.

Policy commitments should be approved by the Board of Directors. These commitments apply to management members, board members, employees, interns, members of the Banrisul Group, business partners, suppliers and the Group’s service providers.

An Administrative Instruction is issued stating that all employees must sign a Compliance Agreement, which is published in the Institutional Manual (Chapter 04 of Banrisul’s Code of Ethics and Conduct).

All employees receive training on the Code of Ethics and Conduct and the  Anti-Corruption Policy. Banrisul has other institutional policies and makes a whistleblowing channel available both on the internal and external websites. The commitments of the Code of Ethics and the Anti-Corruption Policy are available to the public.

The responsibilities of the Eligibility and Compensation Committee are:

(i)  drafting the compensation policy for Management of the Bank and its subsidiaries, suggesting to the respective Boards of Directors various forms of fixed and variable compensation, in addition to benefits and special recruiting and severance programs;
(ii) proposing to the Boards of Directors of the Bank and subsidiaries the overall Management compensation amount to be submitted to the respective Shareholders’ Meetings, pursuant to Article 152, of Law 6,404, of 1976;
(iii) assessing future internal and external scenarios and their possible impacts on the Management compensation policy of the Bank and its subsidiaries;
(iv) analyzing the Management compensation policy of the Bank and its subsidiaries vis-à-vis market practices in order to identify significant discrepancies compared its peers, proposing the necessary adjustments.

As per CMN Resolution 3,921/10, the Eligibility and Compensation Committee is responsible for assisting in the process of determining compensation. The Committee is composed of three independent members, all of whom are natural persons residing in Brazil, with higher education degrees and technical skills suitable for the position they hold. The members also meet the criteria for holding positions in statutory bodies of financial and other institutions authorized to operate by the Brazilian Central Bank.  

The board   members convene in ordinary and extraordinary meetings, and their considerations are recorded in minutes. In turn, shareholders can express their opinions at the Annual/Extraordinary Shareholders Meeting.

2-20 a) Describe the process for designing its remuneration policies and for determining remuneration, including:

2-20 a) i) whether independent highest governance body members or an independent remuneration committee oversees the process for determining remuneration;

The Committee is responsible for assisting the Board of Directors in determining compensation by analyzing future internal and external scenarios and their possible impacts on the compensation policy for the Bank’s Management and the Group’s Subsidiaries. To prepare the Compensation Proposal, this committee analyzes the institution’s figures vis-à-vis market practices in order to identify significant discrepancies in relation to similar organizations and propose the necessary adjustments.

2-20 a) ii) how the views of stakeholders (including shareholders) regarding remuneration are sought and taken into consideration;

The following take part in defining remuneration policies: independent members (Eligibility and Remuneration Committee), the Board of Directors, the Government of the State of Rio Grande do Sul (controlling shareholder) and other shareholders. Board members and shareholders have their opinions recorded in the minutes of ordinary and extraordinary meetings and assemblies. The definition of employee remuneration includes the participation of representative bodies, through collective bargaining agreements.

2-20 a) iii) whether remuneration consultants are involved in determining remuneration and, if so, whether they are independent of the organization, its highest governance body and senior executives.

As per CMN Resolution 3,921/10, the Eligibility and Compensation Committee is responsible for assisting in the process of determining compensation and is composed of three independent members.

2-20 b) Report the results of votes of stakeholders (including shareholders) on remuneration policies and proposals, if applicable.

The individual voting results of members of the board of directors or committee members are not available for confidentiality reasons.

2-25 a) Describe its commitments to provide for or cooperate in the remediation of negative impacts that the organization identifies it has caused or contributed to.

2-25 b) Describe its approach to identify and address grievances, including the grievance mechanisms that the organization has established or participates in.

2-25 c) Describe other processes by which the organization provides for or cooperates in the remediation of negative impacts that it identifies it has caused or contributed to.

2-25 d) Describe how the stakeholders who are the intended users of the grievance mechanisms are involved in the design, review, operation, and improvement of these mechanisms.

2-25 e) Describe how the organization tracks the effectiveness of the grievance mechanisms and other remediation processes, and report examples of their effectiveness, including stakeholder feedback.

Information not available – The analysis of positive and negative impacts is under in-depth technical study, in which strategic actions are being mapped out and defined for the medium and long term.

2-19 a) Describe the remuneration policies for members of the highest governance body and senior executives, including:

2-19 a) i) fixed pay and variable pay;

The overall compensation of Senior Management and the Statutory Committees is set annually by the Shareholders’ Meeting, and the Board of Directors is responsible for defining the individual compensation of each Body.

The members of the Board of Directors receive a fixed monthly fee, with no variable compensation or benefits.  

The members of the Board of Executive Officers receive fixed monthly compensation and representation fees and are entitled to Profit Sharing (PLR, in Portuguese) and benefits such as paid time off, meal allowance, food basket allowance and health insurance, as well as variable compensation, provided that it is included in the overall compensation mentioned above, subject to the limits set by current legislation and based on criteria defined by the Board of Directors.

2-19 a) ii) sign-on bonuses or recruitment incentive payments;

Not applicable – the policy does not provide for this type of bonus.  

2-19 a) iii) termination payments;

Not applicable – the policy does not provide for this type of payment.

2-19 a) iv) clawbacks;

Not applicable – the policy does not provide for clawbacks.

2-19 a) v) retirement benefits.

Officers can also join private pension and insurance plans. These benefits may vary according to the specific profile of each professional. Officers who were Banrisul employees before taking office will be covered by the benefit plans they had when they were employees.

2-19 b) Describe how the remuneration policies for members of the highest governance body and senior executives relate to their objectives and performance in relation to the management of the organization’s impacts on the economy, environment, and people.

In addition to the Profit Sharing – PLR, in Portuguese ,(as per collective bargaining agreement), the Banrisul Conglomerate may pay variable compensation to its executive officers, provided it is included in the overall compensation approved by the Shareholders’ Meeting, observing the limits established by the legislation in force and based on criteria that may be defined by the Board of Directors.

The Board of Directors members are only entitled to fixed monthly compensation as fees, and are not entitled to variable compensation or direct and/or indirect benefits. Executive Board members are entitled to monthly compensation in the form of monthly wage plus a representation fee, the annual amount of which must not exceed the overall management compensation amount set by the Extraordinary and Annual Shareholders’ Meeting. They are also entitled to Banrisul’s Profit Sharing Program (PLR, in Portuguese), calculated in accordance with the rules established by the Board of Directors, considering the rules applicable to the payment of PLR to employees, as defined in the Banking Employees’ Collective Bargaining Agreement. In addition to the PLR, the Banrisul Conglomerate may pay variable compensation to its executive officers, provided it is included in the overall compensation approved by the Shareholders’ Meeting, observing the limits established by the legislation in force and based on criteria that may be defined by the Board of Directors.

2-3 a) Specify the reporting period for, and the frequency of, its sustainability reporting.
Annual.

2-3 b) Specify the reporting period for its financial reporting and, if it does not align with the period for its sustainability reporting, explain the reason for this.
The financial report covers the period from January 1, 2023 to December 31, 2023, the same as the Sustainability Report.

2-3 c) Report the publication date of the report or reported information.
August 2024.

2-3 d) Specify the contact point for questions about the report or reported information.
Questions may be sent to the Investor Relations team through the following channels:
Website: https://ri.banrisul.com.br/
E-mail: ri@banrisul-ri.com.br
Telephone: (+55 51) 3215-3232

The report is published every year and this reporting period is between January 1, 2022 and December 31, 2022.

Contact: Sustainability Corporate Department, Rua Caldas Júnior, 108, 6º andar
E-mail: Sustentabilidade@banrisul.com.br

2-4 a) Report restatements of information made from previous reporting periods and:

2-4-a) i) explain the reasons for the restatements;
In GRI indicators 305-1, 305-2 and 305-3, the base year used to compare emissions is 2021, year of the company’s first complete and assured inventory. Information on the amount of emissions from the previous year (2022) was restated, as it did not include the correct emissions for 2021.

In indicator 302-1, the amount of diesel oil consumed by motor vehicles has been included in the calculation, in addition to that used by generators. Therefore, values for 2021 and 2022 differ from those published in previous years.

In GRI indicator 2-27, to improve information management, the scope in 2023 was limited to fines and sanctions imposed on the institution concerning its direct conduct in these areas. In this period, non-compliance occurrences that cause social, environmental, or climate damage are considered. For this reason, figures published for previous years have been adjusted in this report.

2-4-a) ii) explain the effect of the restatements.
Given the restatement of information, scope 1 greenhouse gas emissions (Direct Emissions) increased by 0.03% of metric tons of  CO₂, and biogenic CO₂ emissions were up by 0.01% of metric tons of  CO_2. With regard to diesel consumption, data for 2021 increased by 424.3% and 2022 data by 117.2%In addition, the reformulation of cases of non-compliance with laws and regulations has led to a decrease in the number of cases filed in 2023.

No information has been restated in previous reporting periods.

2-12 a) Describe the role of the highest governance body and of senior executives in developing, approving, and updating the organization’s purpose, value or mission statements, strategies, policies, and goals related to sustainable development.

In line with its responsibility for steering the Bank’s business, guidelines and goals, the Board of Directors reviews and approves risk management policies, strategies and limits, and sets risk appetite levels in the Risk Appetite Statement (RAS), documented for Banrisul’s Prudential Conglomerate. The Bank also has the Social, Environmental and Climate Responsibility Policy (PRSAC, in Portuguese), which establishes the guidelines for conducting responsibility actions for each area, in a manner compatible with the nature of its activities and the complexity of its products and services, balancing business opportunities, to contribute to the sustainable development of the regions in which Banrisul operates.

Based on CVM Resolution 4945/21, the PRSAC also establishes that governance is effectively delegated to the Board of Directors and an officer responsible for implementing the actions designed to ensure effectiveness. In order to monitor and manage initiatives related to sustainability, the Company relies on a statutory Social, Environmental and Climate Responsibility Committee (CRSAC, in Portuguese), which is responsible for making recommendations to the Board of Directors and assessing the compliance of implemented actions with the Responsibility Policy.

2-12 b) Describe the role of the highest governance body in overseeing the organization’s due diligence and other processes to identify and manage the organization’s impacts on the economy, environment, and people, including:  

2-12 b) i) whether and how the highest governance body engages with stakeholders to support these processes;

As the institution’s highest body as regards the Risk Appetite Statement (RAS), the Board of Directors establishes the risk appetite levels and reviews them annually, supported by the Chief Risk Officer (CRO), the Board of Executive Officers and the Risk Committee.  

2-12 b) ii) how the highest governance body considers the outcomes of these processes.

The Institution has developed a series of indicators and flags to monitor its risk appetite, which are periodically monitored and reported to Senior Management by means of reports and a dashboard.

2-12 c) Describe the role of the highest governance body in reviewing the effectiveness of the organization’s processes as described in 2-12-b, and report the frequency of this review.

The Board of Directors meets monthly to assess the management reports on the main risks to which the institution is exposed. Changes to capital and corporate risk management policies are assessed annually by the body. At Management level, Banrisul relies on the Corporate Risk Committee and the Control and Risk Executive Office and, statutorily, on the Statutory Risk Committee.

The composition of the Board of Directors ensures a seat for common minority shareholders, preferred minority shareholders and a representative of the employees, who is chosen by internal election, according to the Board of Directors Charter. Thus, stakeholder groups are engaged in the Board of Directors meetings.

The Board of Directors is responsible for the Company’s overall direction of business, institutional guidelines and goals. As regards Integrated Capital and Corporate Risk Management, the Board is responsible for:

a) Establishing the Institution’s risk appetite levels in the Risk Appetite Statement (RAS) and reviewing them supported by the Risk Committee, the Executive Board and the Chief Risk Officer (CRO);
b) Ensuring compliance with the Institution’s policies, strategies and risk management limits;
c) Whenever necessary, authorizing exceptions to policies, procedures, limits and risk appetite levels set out in the RAS;
d) Ensuring that the Institution’s compensation structure does not encourage behaviors that are incompatible with risk appetite levels set out in the RAS;
e) Ensuring that the Institution keeps adequate and sufficient capital and liquidity levels;
f) Having a broad and integrated knowledge of risks that can hinder capital.

As for Corporate Risk Management, the Board of Directors, the Risk Committee, the CRO and the Executive Board have seral joint responsibilities, including:

a) Understanding, in a broad and integrated way, risks that can impact the Institution’s capital and liquidity;
b) Understanding the limits of information included in capital and risk management reports;
c) Ensuring that the Institution complies with the content of the RAS;
d) Understanding the limits and uncertainties related to the assessment of risk models, even when they are developed by a third party, and the methodologies used in risk management structure; and
e) Ensuring the Institution’s different levels understand and continually monitor risks.

The Board of Directors meets periodically to evaluate changes to the capital and corporate risk management policies, as well as management reports on the main risks to which the Institution is exposed. At Management level, Banrisul relies on the Corporate Risk Committee and the Control and Risk Executive Office and, statutorily, on the Statutory Risk Committee.

2-14 a) Report whether the highest governance body is responsible for reviewing and approving the reported information, including the organization’s material topics, and if so, describe the process for reviewing and approving the information.

The Sustainability Report is submitted for approval to the Board of Directors, which receives the complete document, including the assurance report issued by the External Audit firm.

2-14 b) If the highest governance body is not responsible for reviewing and approving the reported information, including the organization’s material topics, explain the reason for this.

Not applicable as the Board of Directors is responsible for approving reported information.

In compliance with CMN Resolution 4,945, of September 15, 2021, Banrisul’s Social, Environmental and Climate Responsibility Policy (PRSAC, in Portuguese) determines that it is incumbent upon the Executive Board, a governance body elected by the Board of Directors, to:

a) provide input and participate in the decision-making related to the drafting and review of the PRSAC, assisting the Board of Directors;
b) support the implementation of actions to ensure this Policy’s effectiveness;
c) monitor and evaluate implemented actions;
d) ensure that implemented actions are improved whenever possible deficiencies are identified;
e) help and encourage the adequate and reliable dissemination of mandatory information;
f) manage the PRSAC at Banrisul. The responsibilities of the Board of Directors include ensuring that the Institution complies with the PRSAC and taking measures to ensure its effectiveness.

Banrisul has a the Social, Environmental and Climate Responsibility Committee (CRSAC, in Portuguese), an advisory body to the Board of Directors, whose duties and responsibilities are to:

a) make recommendations to the Board of Directors on the drafting and review of the Social, Environmental and Climate Responsibility Policy;
b) evaluate if the actions implemented are in compliance with the Social, Environmental and Climate Responsibility Policy and, whenever necessary, make recommendations for improvement;
c) keep records of its deliberations and decisions;
d) evaluate and monitor the Bank’s sustainable performance and the effectiveness of the actions laid down in the Sustainability Plan;
e) monitor advancements in sustainability, seeking to identify opportunities and risks, in order to create value for the Bank and its stakeholders;
f) propose and follow-up the execution of initiatives that improve the Bank’s socio-environmental performance;
g) assisting the Board of Directors in incorporating sustainability into the Company’s business strategy and administrative practices and follow up its progress;
h) analyze, monitor and issue recommendations and opinions to support the Board of Directors’ decisions on policies and practices related to its field;
i) fulfil other duties determined by the Board of Directors.

2-22 a) Report a statement from the highest governance body or most senior executive of the organization about the relevance of sustainable development to the organization and its strategy for contributing to sustainable development.

See the answer to this content in the “Message from the CEO” section of the 2023 Sustainability Report, which can be accessed on the Sustainability Report page.

The Message from the CEO can be found in the Sustainability Report on page 4.  

The number of workers who are not employees and whose work is controlled by the organization amounts to 2,204, of whom four are supernumeraries and 2,200¹ are interns.

Most common workers are interns, whose contractual relationship is established through an integration agent called Center for Company and School Integration (CIEE, in Portuguese). Interns serve bank customers, act as cashiers, provide documents to customers and perform collection activities. They also provide supporting services to the branches and other Bank departments, manage the flow of bank bags, clear documents and control documents in the archives.

The methodology and assumptions used to obtain this indicator gather data from the internal database. The significant change in the number of workers is due to the duration of the internship contract, which is up to two years.

¹ The 2022 Administration Report shows 2,293 trainees. The difference is due to the criteria used in the consultation, which also included those who left during the month. After adjustments, those who left during the month were disregarded for the purposes of the Sustainability Report.

2-8 a) Report the total number of workers who are not employees and whose work is controlled by the organization and describe:
3 attachés and 1,986 interns.

2-8-a) i) the most common types of workers and their contractual relationship with the organization;
Interns: contractual relationship is established through an integration agent called Center for Company and School Integration (CIEE, in Portuguese); and attachés: agreement between agencies for the assignment of employees.

2-8-a) ii) the type of work they perform.
They serve bank customers, act as cashiers, provide documents to customers and perform collection activities. They also provide supporting services to the branches and other Bank departments, manage the flow of bank bags, clear documents and control documents in the archives. They communicate with customers and providing them with information on banking services.

2-8 b) Describe the methodologies and assumptions used to compile the data, including whether the number of workers who are not employees is reported:

2-8 b) i) in head count, full-time equivalent (FTE), or using another methodology;

2-8 b) ii) at the end of the reporting period, as an average across the reporting period, or using another methodology.
Consulting the database – internal system, considering the total figures at the end of the year.

2-8 c) Describe significant fluctuations in the number of workers who are not employees during the reporting period and between reporting periods.
There was a 9.7% reduction in trainees between 2022 and 2023. The variation is due to the length of the trainee contract, which is valid for up to 2 years. Another reason was the increase in the number of employees hired due to the civil service examination, which reduced the number of trainees over the period.

3-2 a) List its material topics.

• Innovation and Technology
• Corporate governance and integrity
• Privacy and data security
• Sales practices and customer satisfaction
• Sustainable products and business
• Partner and supplier management
• Human capital development
• Eco-efficiency
• Diversity and inclusion
• Financial inclusion and education
• Environmental, social and climate risk strategy

3-2 b) Report changes to the list of material topics compared to the previous reporting period.

Compared to 2021, the following new topics were added to the materiality list: “Diversity and inclusion”, “Corporate governance and integrity”; “Data privacy and security”; “Partner and supplier management”, “Human capital development”, “Eco-efficiency” and “Financial inclusion and education”.

In 2022, the topics “Risk approach and opportunities related to climate change” and “Quality of customer service and services provided” were added to the “Environmental, social and climate risk strategy” and “Sales practices and customer satisfaction” topics, respectively. The topic “Management of risks that can significantly impact business” was also added to “Environmental, social and climate risk strategy.

”Furthermore, topics “Management of energy consumption and solid waste generation,” “Criteria for financing assignment, positive impact and delinquency,” “Social investment in the external community” and “Business expansion strategy” have been excluded in this new step.

List of material topics:

• Innovation and technology;
• Corporate governance and integrity;
• Data privacy and security;
• Sales practices and customer satisfaction;
• Sustainable products and business;
• Partner and supplier management;
• Human capital development;
• Eco-efficiency;
• Diversity and Inclusion;
• Financial inclusion and education;
• Environmental, social and climate risk strategy.

Compared to 2021, the following new topics were added to the materiality list: “Diversity and inclusion”, “Corporate governance and integrity”; “Data privacy and security”; “Partner and supplier management”, “Human capital development”, “Eco-efficiency” and “Financial inclusion and education”.

In 2022, the topics “Risk approach and opportunities related to climate change” and “Quality of customer service and services provided” were added to the “Environmental, social and climate risk strategy” and “Sales practices and customer satisfaction”, respectively. The topic “Management of risks that can significantly impact business” was also added to “Environmental, social and climate risk strategy”.

Furthermore, topics “Management of energy consumption and solid waste generation”, “Criteria for financing assignment, positive impact and delinquency”, “Social investment in the external community” and “Business expansion strategy” have been excluded in this new step.

 In 2022, Banrisul conducted a complete materiality assessment to define its material topics, which encompassed peer benchmarking, as well as analysis of the Company’s internal documents and industry literature, such as ESG ratings and standards. A list of material topics for the industry was prepared based thereon. This list was discussed and validated with important stakeholders through interviews (the CEO, Sustainability Corporate Department and Executive Board) and, then it was prioritized through an online survey with a larger stakeholder group.

At the same time, based on the analysis of internal risk documents, the Company assessed possible impacts related to each topic, which were duly classified as regards their nature and then added to the consolidated materiality results.

Results were assessed using a methodology that weighted the answers according to each stakeholder group. The results of the online survey were consolidated to the topics’ impact study to prepare the final list of material topics.

A total of 1,315 people from the following stakeholder groups participated in the online survey:

• Employees;
• Shareholders/investors (priority);
• Shareholders/investors (diversified);
• Capital markets;
• Customers;
• Main suppliers;
• Government;
• Representatives of non-profit organizations and/or social institutions;
• Specialized media outlets;
• Union representatives;
• Executive Officers;
• Board of Directors members;
• Sustainability Committee members.

Prioritization and final approval:

Sustainability Corporate Department, CEO and Administrative Executive Board. The materiality results were also presented to the Sustainability Committee, the Social, Environmental and Climate Responsibility Committee and the Executive Board.

3-1 a) Describe the process it has followed to determine its material topics, including:

3-1 a) i) how it has identified actual and potential, negative and positive impacts on the economy, environment, and people, including impacts on their human rights, across its activities and business relationships;

In 2022, Banrisul conducted a complete materiality assessment to define its material topics, which encompassed peer benchmarking, as well as analysis of the Company’s internal documents and industry literature, such as ESG ratings and standards. A list of material topics for the industry was prepared based thereon. This list was discussed with important stakeholders through interviews and, then it was prioritized through an online survey with larger stakeholder group. Results were assessed using a methodology that weighted the answers according to each stakeholder group. The results of the online survey were consolidated to the topics’ impact study to prepare the final list of material topics.

3-1 a) ii) how it has prioritized the impacts for reporting based on their significance.

Based on the analysis of internal risk documents, possible impacts related to each topic were identified and duly classified as regards their nature and then added to the consolidated materiality results. As a result, the final list of topics was defined based on the impacts of the topics in question.

3-1 b) Specify the stakeholders and experts whose views have informed the process of determining its material topics.

Representatives of the following groups took part in the consultations to define materiality:

• Employees
• Shareholders/investors
• Capital markets
• Customers
• Suppliers
• Government
• Non-profit organizations and/or social institutions
• Union
• Board of Executive Officers
• Board of Directors
• Social, Environmental and Climate Responsibility Committee

The Sustainability department, the Chief Executive Officer and the Board of Executive Officers approved the final material topics. The materiality results were also presented to the Social, Environmental and Climate Responsibility Committee. 

2-21 a) Report the ratio of the annual total compensation for the organization’s highest-paid individual to the median.

The ratio of the annual total compensation of the organization’s highest paid individual and the average annual total compensation of all other employees (excluding the highest paid) was 10%.

2-21 b) Report the ratio of the percentage increase in annual total compensation for the organization’s highest-paid individual to the median percentage increase in annual total compensation for all employees (excluding the highest-paid individual).

The median remuneration of employees, excluding the highest paid, fell from 2022 to 2023, due to the dismissal of 506 employees through the Voluntary Severance Program, so it was not possible to calculate the proportion of the percentage increase requested in item b.

2-21 c) Report contextual information necessary to understand the data and how the data has been compiled.

The Chief Executive Officer was not included in this calculation, since there was a change to the Board of Executive Officers. The reference was the Deputy Chief Executive Officer, who is not an employee of the Bank. Total compensation included salaries, bonuses, job commission, full-time dedication bonus and length of service bonus, overtime, singing bonus, relocation bonus, executive officer bonus, retirement bonus and incentivized retirement plan.

The ratio of the annual total compensation for the organization’s highest-paid individual to the median  annual total compensation for all employees is 12.0%, while the ratio of the percentage increase in the annual total compensation for the organization’s highest-paid individual to the median percentage increase in the annual total compensation for all employees is 0.8%.

Annual salary increases occur in April (regulatory promotions retroactive to January) and in September (collective bargaining agreement).

For calculation purposes, the CEO, who is not a Bank employee, was considered as the highest-paid individual. The other workers who are not employees were not considered in the calculation. The total compensation (salaries, bonuses, job commission, full performance bonus, annual bonus, overtime, singing bonus, relocation bonus, management, retirement bonus, and retirement incentive) was considered in calculating compensation.

The Chair of the Board of Directors is not the Company’s CEO.

2-11 a) Report whether the chair of the highest governance body is also a senior executive in the organization.

The chair of the Board of Directors is not in Banrisul’s CEO.

2-11 b) If the chair is also a senior executive, explain their function within the organization’s management, the reasons for this arrangement, and how conflicts of interest are prevented and mitigated.

The chair of the Board of Directors is not in Banrisul’s CEO.

2-17 a) Report measures taken to advance the collective knowledge, skills, and experience of the highest governance body on sustainable development.

Every year, Management takes specific courses on topics such as corporate and financial market laws, data disclosure, internal controls, the code of ethics, the Anti-Corruption Law and other subjects related to Banrisul’s activities. In 2023, sustainability and ESG guidelines were included in the lectures, as requested by Management.

In compliance with Law 13,303/16, every year, elected Management members attend specific training on corporate and capital market legislation, disclosure of information, internal controls, code of conduct, Law 12,846, of August 1, 2013 (Anti-Corruption Law) and other topics related to the activities of a publicly held company or government-controlled company. In 2022, ESG was included in the list of topics. Additionally, Management members may participate in other courses/events with themes pertinent to their responsibilities in the respective governance bodies, if said theme is interesting for the Company.

The Business Partnership and Open Banking Department has been working constantly with Bem Promotora on the Prevention of Money Laundering and Terrorist Financing (PLDFT, in Portuguese). In September 2022, Banrisul published its New Policy on Prevention of Money Laundering, Terrorist Financing and the Distribution of Weapons of Mass Destruction, which is a mandatory reading for all those operating the corresponding assets. This document was read by 1,440 operators.

Suspicions or evidence of non-compliance with Banrisul’s Code of Ethics and Conduct, policies, standards and institutional regulations in force should be reported through the Whistleblowing Channel, which allows the anonymous reporting of the misconduct, ensuring the right to confidentiality and protection against retaliation. The internal and external channels are available, respectively, on the Corporate Intranet and on Banrisul’s website (www.banrisul.com.br) and are intended for receiving misconduct reposts and complaints from employees and other stakeholders. The Control and Compliance Department is the independent area responsible for managing this channel.

Every six months the Board of Directors reviews a report on Banrisul’s Whistleblowing Channel. In compliance with article 3, paragraph 2, of CMN Resolution 4,859/2020, the Control and Compliance Department prepares a report with the following minimum information:

I – the number of reports received;
II – the nature of the reports;
III – the departments responsible for handling the situation;
IV – the average response time; and
V – the measures adopted by the Institution.

2-16 a) Describe whether and how critical concerns are communicated to the highest governance body.

At its ordinary or extraordinary meetings, the Board of Directors receives and resolves on the concerns reported by the Executive Board and the Statutory Audit, Eligibility and Remuneration, Risk and Social, Environmental and Climate Responsibility Committees. In addition to these, the crucial concerns received through the Whistleblowing Channel are communicated to the Board of Directors by means of reports which must contain, at the very least, the number and nature of the communications received, the areas responsible for dealing with the situation, the average time for treatment and the measures adopted by the Institution. If it is proven that employees engaged in wrongdoing, the complaints are brought to the attention of the Ethics Committee.

2-16 b) Report the total number and the nature of critical concerns that were communicated to the highest governance body during the reporting period.

The number and nature of critical concerns are deemed confidential by Banrisul.

Strictly speaking, the Bank did not identify incidents of corruption in the form of offering or requesting of undue advantages. Banrisul did not terminate or refuse to renew contracts due to the involvement or possible involvement of a correspondent in corruption. Neither the Organization nor its employees are parties to corruption-related lawsuits.

2-15 a) Describe the processes for the highest governance body to ensure that conflicts of interest are prevented and mitigated.

Banrisul recognizes and manages conflicts of interest in all activities, including in relation to the Board of Directors, in accordance with the applicable legal rules, including Article 156 of Brazilian Corporate Law and Article 25 of the Bylaws.

In addition to the legal regulations, it has a Code of Ethics and Conduct and a Conflict of Interest Booklet for all those involved in the Banrisul Group, both of which are widely disseminated.  

When it comes to credit transactions, compliance also includes the Related-Party Transaction Policy, which defines the conditions for these and other transactions to be carried out.

2-15 b) Report whether conflicts of interest are disclosed to stakeholders, including, at a minimum, conflicts of interest relating to:

2-15 b) i) cross-board membership;

The participation of management members in other positions in Banrisul Group companies is reported in item 7.6 of the 2023 Reference Form.

2-15 b) ii) cross-shareholding with suppliers and other stakeholders;

There are no shareholdings of suppliers or other stakeholders not listed in the 2023 Financial Statements, page 38.

2-15 b) iii) existence of controlling shareholders;

The only controlling shareholder is the State of Rio Grande do Sul.

2-15 b) iv) related parties, their relationships, transactions, and outstanding balances.

We refer to Note 29 to the 2023 Financial Statements. Note 29 – transactions with related parties:

(a) Transactions with related parties are disclosed in compliance with Technical Pronouncement CPC 05(R1) and CMN Resolution 4,818/20.Account balances relating to transactions between consolidated companies are eliminated in the consolidated financial statements and also take into account the absence of risk. With regard to transactions carried out with the State Government and entities fully or jointly controlled by it, we have opted for the partial exemption granted by CMN Resolution 4,818/20. In this case, only the most significant transactions are disclosed. We carry out banking transactions with related parties, including checking account deposits (non-interest-bearing), interest-bearing deposits, open market funding, loans and service contracts. These transactions are carried out at the usual average market amounts, terms and rates in force on the respective dates, on an arm’s length basis.

Banrisul’s Board of Directors identifies and manages conflicts of interest based on, but not limited to, applicable legal standards provided for in Article 156 of the Brazilian Corporate Law and article 25 of its Bylaws. Furthermore, the Code of Ethics and Conduct is widely disseminated to management members, board members, employees, interns, members of the Banrisul Group, business partners, suppliers and service providers. In the event of a potential conflict of interest, members of the Board of Directors, the Audit Committee and the Ethics Committee must abstain from resolving on matters in which this conflict is identified. Another important document governing this topic is the Related-Party Transactions Policy that outlines the conditions credit transactions and other related-party transactions.

The item “SUBORDINATION, SERVICE OR CONTROL RELATIONSHIPS BETWEEN THE ISSUER’S MANAGEMENT AND ITS SUBSIDIARIES, AFFLIATES AND OTHERS” of the Company’s Reference Form informs the interest held by Banrisul management in management of other companies in the Banrisul Group. The only controlling shareholder is the State of Rio Grande do Sul.

Related-party transactions, as well as measures taken by Banrisul, can be found in Note 29, pages 118 and 119, to the 2022 Financial Statements, available here.

The Control and Risk Executive Office is responsible for managing the Institutions’ corporate risks.

As regards Integrated Capital and Corporate Risk Management, the Chief Risk Officer (CRO) is responsible for the Corporate Risk Management Department and his/her duties include ensuring that the risk process monitors, controls, evaluates and plans capital need and goals and identifies, measures, monitors, reports, controls and mitigates credit, market, IRRBB, liquidity, operational, social, environmental and climate risks associated with the Prudential Conglomerate, communicating said risks to the Risk Committee, the CEO, the Board of Directors and regulatory agencies.

The Corporate Risk Executive Superintendent reports to the CRO on the Institution’s risk management. At least every year, risk management reports are submitted to the Board of Directors for consideration.

2-13 a) Describe how the highest governance body delegates responsibility for managing the organization’s impacts on the economy, environment, and people, including:

2-13 a) i) whether it has appointed any senior executives with responsibility for the management of impacts;

The Board of Directors is responsible for steering the Bank’s business, guidelines and institutional goals. It is advised by the Audit, Risk, Eligibility and Compensation, and Social, Environmental and Climate Responsibility Committees, all of which operate on a permanent basis.

The Corporate Risk Executive Superintendent reports to the Chief Risk Officer (CRO) on the Institution’s risk management. The executive is responsible for the Corporate Risk Unit and for coordinating capital management and credit, market, IRRBB, liquidity, operational, social, environmental and climate risks, covering all the institutions in the Prudential Conglomerate. It also considers the possible impacts of risks associated with other companies controlled by Conglomerate companies and other significant risks identified.

In 2023, the Risk Office incorporated sustainability into the Social, Environmental and Climate Risk Department, with the intention of reinforcing the importance of sustainability and promoting integrated action on related risks and opportunities. Thus, the management of the Social, Environmental and Climate Responsibility Policy is aligned with the risk guidelines, integrating processes and directing the focus of its risk and responsibility initiatives.

2-13 a) ii) whether it has delegated responsibility for the management of impacts to other employees.

The corporate risk executive superintendent reports to the Chief Risk Office (CRO) on the Institution’s risk management.

2-13 b) Describe the process and frequency for senior executives or other employees to report back to the highest governance body on the management of the organization’s impacts on the economy, environment, and people.

The Institution has developed a series of indicators and flags to monitor its risk appetite, which are periodically monitored and reported to Senior Management by means of reports and a dashboard. The risk matrix is updated dynamically, with attention to the risks with the greatest exposure. Processes are monitored according to the frequency and impact of their respective risks. The Risk Appetite Statement (RAS), documented for Banrisul’s Prudential Conglomerate, is reviewed annually with the support of the Risk Committee, the Board of Executive Officers and the Chief Risk Officer (CRO).

1. The entity shall describe the processes and policies that are set forth within its whistleblower program, including, but not limited to, internal compliance programs, whistleblower hotline details (e.g., if it is managed by an independent third-party), reference to and publication of the hotline number (e.g., within corporate compliance manuals or code of ethics), whistleblower incentives for reporting violations, and methods for submitting tips.

The Bank has a Whistleblowing Channel, available on the Corporate Intranet and on Banrisul’s website, under the Customer Service option. Aimed at employees, customers, users, partners or suppliers, the Channel receives complaints and communications about situations of alleged wrongdoing, of any nature, related to the Bank’s activities, which affect the Institution’s image and do not comply with internal controls and the Compliance Program. A registration form is available within the Whistleblowing Channel, which can be filled in completely anonymously.

2. Disclosure shall include the entity’s compliance with applicable whistleblower regulations.

The internal and external channels for submitting complaints and queries covered by the Policy are disclosed, respectively, on the Corporate Intranet and on Banrisul’s website – www.banrisul.com.br, in the section Whistleblowing Channel.

3. Disclosure shall include a discussion of any violations of whistleblower regulations and any corrective actions the entity has implemented as a result of violations.

In the event of non-compliance with this Policy and related regulations, actions will be taken according to the level of the offender’s relationship with the Bank: – if an employee, sanctions provided for in item Sanctions of the Personnel Regulations will be adopted, appropriate to address the non-compliance; – if an Officer or Board/Committee Member, the non-compliance will be reported by the Internal Audit to the Board of Directors, complying, when applicable, to Banrisul’s Whistleblowing Policy; – if an Intern or Outsourced Employee, sanctions provided for in the agreement will be adopted. If managers, other employees and/or other related parties become aware of misconducts and do not report them to the Personnel Department or the Whistleblowing Channel, they will , also be held accountable. Regardless of the degree of relationship with Banrisul and the penalty adopted, anyone who fails to comply with the organizational policies may be held civilly or criminally liable for proven misconduct.

Banrisul’s Whistleblowing Channel is a communication tool through which employees, customers, users, partners or suppliers report possible misconducts of any nature related to the Institution’s activities that affect its reputation and violate its internal controls and Banrisul’s Compliance Program. The whistleblowing channel is available on the Bank’s institutional website or on the intranet, where a registration form can be filled out anonymously.

The internal and external channels for submitting complaints and queries covered by the Policy are disclosed, respectively, on the Corporate Intranet and on Banrisul’s website – www.banrisul.com.br, in the section Whistleblowing Channel.

In the event of non-compliance with this Policy and related regulations, actions will be taken according to the level of the offender’s relationship with the Bank:

– if an Employee, sanctions provided for in item Sanctions of the Personnel Regulations will be adopted, appropriate to address the non-compliance;
– if an Officer or Board/Committee Member, the non-compliance will be reported by the Internal Audit to the Board of Directors, complying, when applicable, to Banrisul’s Whistleblowing Policy;
– if an Intern or Outsourced Employee, sanctions provided for in the agreement will be adopted.

If managers, other employees and/or other related parties become aware of misconducts and do not report them to the Personnel Department or the Whistleblowing Channel, they will also be held accountable.

Regardless of the degree of relationship with Banrisul and the penalty adopted, anyone who fails to comply with the organizational policies may be held civilly or criminally liable for proven misconduct.

2-18 a) Describe the processes for evaluating the performance of the highest governance body in overseeing the management of the organization’s impacts on the economy, environment, and people.

The Board of Directors is subject to a formal performance evaluation with the aim of gauging effectiveness and improving Banrisul’s governance — an evaluation similar to the one applied annually to the Board of Executive Officers and the Chief Executive Officer. The evaluation process complies with Law 13,303/16 and State Decree 54,110/18, covering self-evaluation and comparison of the results obtained with the targets set, among others.

2-18 b) Report whether the evaluations are independent or not, and the frequency of the evaluations.

Performance appraisals are carried out annually, anonymously, individually and non-independently.

2-18 c) Describe actions taken in response to the evaluations, including changes to the composition of the highest governance body and organizational practices.

All answers to the evaluation questionnaires are compiled into a report, which is sent to the Eligibility and Compensation Committee for prior analysis and then presented to the Board of Directors for consideration. The body suggests improvements in carrying out their duties.

Performance evaluation is an essential step to assess effectiveness, contributing to enhance the Organization’s governance. The Board of Directors carries out an annual formal evaluation of the Executive Board and its Chair performance, as well as of its own performance, a process that include self-evaluation questions. The annual evaluation is carried out according to procedures previously defined by the Board of Directors and is anonymous and individual.

All answers to the evaluation questionnaires are compiled into a report, which is sent to the Eligibility and Compensation Committee for prior analysis and then presented to the Board of Directors for consideration. The body itself suggests improvements in carrying out their duties.

2-9 a) Describe its governance structure, including committees of the highest governance body.

¹The members have no other duties or commitments to report.

¹The members have no other duties or commitments to report.

¹The members have no other duties or commitments to report.

¹The members have no other duties or commitments to report.

2-9 b) List the committees of the highest governance body that are responsible for decision-making on and overseeing the management of the organization’s impacts on the economy, environment, and people.

The Board of Directors is responsible for steering the Bank’s business, guidelines and institutional goals. It is advised by the Audit, Risk, Eligibility and Compensation, and Social, Environmental and Climate Responsibility Committees, all of which operate on a permanent basis.

2-9 c) Describe the composition of the highest governance body and its committees by:

2-9 c) i) executive and non-executive members;

2-9 c) ii) independence;

2-9 c) iii) tenure of members on the governance body;

2-9 c) iv) number of other significant positions and commitments held by each member, and the nature of the commitments;

Answered in item a.

2-9 c) v) gender;2-9 c) vi) under-represented social groups;

2-9 c) vii) competencies relevant to the impacts of the organization;
The competencies of members of management are assessed during the eligibility process, according to the information presented in their CVs, in compliance with the Institution’s Nomination and Succession Policy.  In addition, training on Law 13,303 is offered every year to address relevant topics, enabling a diversity of thought and more informed decision-making.

2-9 c) viii) stakeholder representation.
Of the 11 seats available on the Board of Directors, one (1) is reserved for minority common shareholders, one (1) is reserved for minority preferred shareholders, and one (1) is reserved for an employee representative.

BOARD OF DIRECTORS

FISCAL COUNCIL

AUDIT COMMITTEE

ELIGIBILITY AND COMPENSATION COMMITTEE

RISK COMMITTEE

SOCIAL, ENVIRONMENTAL AND CLIMATE RESPONSIBILITY COMMITTEE

¹ Sworn in February 2023.

EXECUTIVE BOARD

The joint development of commitments, indicators, and targets proposed by the Bank’s departments has been showing the topic’s greater maturity within the institution and the leadership’s stance. The main guideline is the Bank’s strategic planning, established by the ESG pillar.

The methodology used to create the agenda enabled a greater engagement of the units and executive offices, which had to work together and expand their knowledge. his is an ongoing process, but it is already possible to see advancements in the governance front. In order to prepare the ESG Agenda, Banrisul assessed internal and external information to obtain an overview of the efforts required to position itself aligned to market expectations. The Company used data from interviews with senior management and online stakeholder survey to prepare its materiality matrix, and meetings and workshops with key departments to get their opinion on suggested actions, targets and indicators.

The effectiveness of this measures is yet unknown, as their results will be seen after the due implementation of the 2030 Agenda.

3-3 a) Describe the actual and potential, negative and positive impacts on the economy, environment, and people, including impacts on their human rights.

3-3 b) Report whether the organization is involved with the negative impacts through its activities or as a result of its business relationships, and describe the activities or business relationships.

See the answers to this content in the impact section on the material topics page.

3-3 c) Describe its policies or commitments regarding the material topic.

The Integrity Program includes the Anti-Corruption Policy, the Code of Ethics and Conduct, the Whistleblowing Channel Policy, and the Internal Control and Compliance Report.

3-3 d) Describe actions taken to manage the topic and related impacts, including:

3-3 d) i) actions to prevent or mitigate potential negative impacts;

These actions are managed by the Control, Compliance and Inspection Unit, together with other departments of the Bank. Policies, training and a whistleblowing channel are in place to prevent acts of corruption and mitigate integrity risks.

3-3 d) ii) actions to address actual negative impacts, including actions to provide for or cooperate in their remediation;

The Bank has a Whistleblowing Channel, available on the Corporate Intranet and on Banrisul’s website, under the Customer Service option. Aimed at employees, customers, users, partners or suppliers, the Channel receives complaints and communications about situations of alleged wrongdoing, of any nature, related to the Bank’s activities, which affect the Institution’s image and do not comply with internal controls and the compliance program.

3-3 d) iii) actions to manage actual and potential positive impacts.

Constant maintenance and improvement of good practices related to the prevention of illegal acts, as well as continuous training for those interested.

3-3 e) Report the following information about tracking the effectiveness of the actions taken:

3-3 e) i) processes used to track the effectiveness of the actions;

The channel is managed by an independent area, the Control and Compliance Unit, which sends a report every six months on the complaints received during the period to the Board of Directors, describing the number and nature of the communications received, the areas responsible for dealing with the situation, the average processing time and the measures adopted. Every year, the Internal Controls and Compliance Report is submitted to the Senior Management.

3-3 e) ii) goals, targets, and indicators used to evaluate progress;

1. Joint development of a strategic sustainability agenda for 2023, with the direct involvement of all Executive Officers and approval by all bodies. The main guideline is the Bank’s strategic planning, established by the ESG pillar.
2. Constant improvement of procedures related to the Integrity Program, such as training and preparation of reports.
3. Policy indicator: the Policy provides for annual updates.
4. Whistleblowing Channel: the indicator states that complaints must be responded to within 45 days and a report must be submitted to senior management every six months.
5. Training: the indicator states that training on integrity is mandatory for all the Bank’s employees.

3-3 e) iii) the effectiveness of the actions, including progress toward the goals and targets;

The effectiveness of the actions are not yet known, as Banrisul will only have the results once the 2030 Agenda has been effectively implemented.

3-3 e) iv) lessons learned and how these have been incorporated into the organization’s operational policies and procedures.

The joint development of commitments, indicators, and targets proposed by the Bank’s departments has been showing the topic’s greater maturity within the institution and the leadership’s stance, and the Institution aims to constantly update the policies based on current regulations.

3-3 f) Describe how engagement with stakeholders has informed the actions taken (3-3-d) and how it has informed whether the actions have been effective (3-3-e).

The methodology used to create the agenda enabled a greater engagement of the units and executive offices, which had to work together and expand their knowledge. This is an ongoing process, but it is already possible to see advancements in the governance front.

Each time regulations are updated, the information is disseminated through administrative instructions, which are available to all employees.

The Bank has a Whistleblowing Channel, available on the Corporate Intranet and on Banrisul’s website, under the Customer Service option. It is aimed at employees, customers, users, partners or suppliers and, if it is proven that employees engaged in wrongdoing, the complaints are brought to the attention of the Ethics Committee.

2-10 a) Describe the nomination and selection processes for the highest governance body and its committees.

The Board of Directors currently has 11 members, of whom (i) eight are appointed by the controlling shareholder, in accordance with the current legislation (Federal Law 13,303/16; Federal Law 6,404/46 and Rio Grande do Sul State Decree 54,110/18); ii) one is appointed by the common minority shareholders, (iii) one is appointed by the preferred minority shareholders and (iv) one is a representative of employees, elected internally in accordance with regulations.

The Eligibility and Compensation Committee analyzes the nominees, checking the eligibility requirements in the Nomination and Succession Policy, which include skills, experience, availability, diversity, knowledge, behavior, culture, age and gender. The Committee reports to the State Attorney General’s Office, which decides whether the requirements have been met and whether there are no impediments. If the nomination is approved, the election process is carried out by the competent body.

2-10 b) Describe the criteria used for nominating and selecting highest governance body members, including whether and how the following are taken into consideration:

2-10 b) i) views of stakeholders (including shareholders);

The Board of Directors has 11 seats, of which one (1) is reserved for minority common shareholders, one (1) is reserved for minority preferred shareholders, and one (1) is reserved for an employee representative.

2-10 b) ii) diversity;

To reinforce its public commitment to diversity, the Organization is responsible for ensuring that, by 2030, at least 30% of the seats in Senior Management, the Fiscal Council and the Statutory Committees are allocated to diversity, a commitment that extends to the Group’s Subsidiaries, as stipulated in article 111 of the Bylaws.

2-10 b) iii) independency;

The Board of Directors currently has 11 members, of whom (i) eight are appointed by the controlling shareholder, in accordance with the current legislation (Federal Law 13,303/16; Federal Law 6,404/46 and Rio Grande do Sul State Decree 54,110/18); ii) one is appointed by the common minority shareholders, (iii) one is appointed by the preferred minority shareholders and (iv) one is a representative of employees, elected internally in accordance with regulations.Through this composition, the Board is in compliance with article 22 of the Bylaws, which determines, among other things, that 30% of the appointed members are independent, a criterion considered by Banrisul when selecting the members of the highest governance body

2-10 b) iv) competencies relevant to the impacts of the organization.

The competencies of members of management are assessed during the eligibility process, according to the information presented in their CVs, in compliance with the Institution’s Nomination and Succession Policy. In addition, training on Law 13,303 is offered every year to address relevant topics, enabling a diversity of thought and more informed decision-making. The current eligibility process carried out by Banrisul involves various spheres (the Finance Department, the Civil House, the State Attorney General’s Office, among others), providing security and reliability for all stakeholders.

After the Management Proposal is published, the shareholders make nominations for the Board of Directors, which are subsequently submitted to the Chief of Staff of the Government of the State of Rio Grande do Sul for approval. If the nominations are approved, their names and information will be forwarded to the Treasury Department for the opening of an administrative proceeding via the PROA system. Upon the receipt of the Administrative Proceeding, the Eligibility and Compensation Committee analyzes the nominee, taking into consideration the eligibility requirements outlined in the Nomination and Succession Policy, which determine that the background and experience of the nominees for the Board of the Directors should be assessed, as well as their time availability to perform the duties, diversity, knowledge, experience, behavior, cultural aspects, age group, and gender. The Committee’s opinion is forwarded to the State Attorney General’s Office for a final decision about the fulfillment of the requirements and the absence of impediments. Once the nomination has been approved by the State Attorney General’s Office, the proceeding returns to the Company, so that the election can be held.

Every two years, before the Annual and Extraordinary Shareholders’ Meeting, shareholders submit their candidates for the highest governance body. The controlling shareholder makes its nominations considering the criteria set forth in the current legislation (Federal Law 13,303/16; Federal Law 6,404/46 and State Decree RS 54,110/18).

In 2022, the Nomination and Succession Policy was updated and stated that the election of Banrisul’s Board of Directors members, should include seats for Diversity groups as of 2023, as follows: I – the shareholder, or group of shareholders, with a right to nominate 25-40% of seats on Banrisul’s Board of Directors, shall be responsible for allocating at least one of the openings for members of the Diversity group; II – the shareholder, or group of shareholders, with a right to nominate for Banrisul’s Board of Directors any percentage higher than that established in item I must allocate two or more openings for members of the Diversity group; III – Grupo Banrisul must adjust the composition of the Boards of Directors, which shall respect the minimum percentage of 30% for openings aimed at the Diversity group, by 2030.

Independence criteria must also be considered, as provided for in article 22 of the Bylaws, which can be read here.

Banrisul’s current eligibility process involves several spheres (State Department of Finance, State Chief of Staff and State Attorney General’s Office, among others). This verification flow conveys security and reliability to all stakeholders.

205-1 a) Total number and percentage of operations assessed for risks related to corruption.

 Overall, Banrisul had five operations assessed by the Corporate Risks Unit in 2023. This figure was not measured as a percentage of total operations. 

205-1 b) Significant risks related to corruption identified through the risk assessment.

Operational risk management includes identifying and assessing external fraud events, the possibility of employee misconduct that offers or results in undue advantage and operational flaws in developing processes to assess or identify suspicious operations.These actions are managed by the Control, Compliance and Inspection Unit, together with other departments of the Bank. Policies, training and a whistleblowing channel are in place to prevent acts of corruption and mitigate integrity risks. The policies are reviewed annually reflecting updates to regulations and administrative instructions.

According to Banrisul’s Anti-Corruption Policy, all those subject to the Policy are responsible for fostering an ethical culture and for creating an environment of permanent corruption control and prevention, in which it is possible to monitor and identify, through Due Diligence procedures, operations from customers and non-customers – individuals and companies –  and actions or suspected corruption crimes, as well as enforcing the internal integrity and auditing mechanisms and procedures, encouraging whistleblowing and the effective application of Banrisul’s Anti-Corruption Policy and Code of Ethics and Conduct.

Moreover, in 2021, a Social, Environmental and Climate Risks (RSAC, in Portuguese) assessment questionnaire was developed for operations over R$10 million, which includes anti-corruption questions.

Operational risk management includes identifying and assessing external fraud events, the possibility of employee misconduct that offers or results in undue advantage and operational flaws in developing processes to assess or identify suspicious operations.

The Bank is subject to Brazilian and foreign anti-corruption legislation. These laws require the adoption of integrity procedures in order to mitigate the risk that any person, acting on behalf of the Bank, may offer an undue advantage to a public agent, in order to obtain benefits of any kind. The transnational scope legislations, including, but not limited to, the U.S. Foreign Corrupt Practices Act of 1977 and the UK Bribery Act of 2000, in addition to Federal Law no. 12,846/13, provide for the adoption of specific policies and procedures for the prevention and fight against illegal acts related to corruption of public administration entities and government representatives, which aim at ensuring any kind of advantage. They also require the Bank to keep its books and records accurate and rely on an internal controls system to certify their respective veracity, in addition to the prevention of illegal activities.

2-20 a) Describe the process for designing its remuneration policies and for determining remuneration, including:

2-20 a) i) whether independent highest governance body members or an independent remuneration committee oversees the process for determining remuneration;

The Committee is responsible for assisting the Board of Directors in determining compensation by analyzing future internal and external scenarios and their possible impacts on the compensation policy for the Bank’s Management and the Group’s Subsidiaries. To prepare the Compensation Proposal, this committee analyzes the institution’s figures vis-à-vis market practices in order to identify significant discrepancies in relation to similar organizations and propose the necessary adjustments.

2-20 a) ii) how the views of stakeholders (including shareholders) regarding remuneration are sought and taken into consideration;

The following take part in defining remuneration policies: independent members (Eligibility and Remuneration Committee), the Board of Directors, the Government of the State of Rio Grande do Sul (controlling shareholder) and other shareholders. Board members and shareholders have their opinions recorded in the minutes of ordinary and extraordinary meetings and assemblies. The definition of employee remuneration includes the participation of representative bodies, through collective bargaining agreements.

2-20 a) iii) whether remuneration consultants are involved in determining remuneration and, if so, whether they are independent of the organization, its highest governance body and senior executives.

As per CMN Resolution 3,921/10, the Eligibility and Compensation Committee is responsible for assisting in the process of determining compensation and is composed of three independent members.

2-20 b) Report the results of votes of stakeholders (including shareholders) on remuneration policies and proposals, if applicable.

The individual voting results of members of the board of directors or committee members are not available for confidentiality reasons.

The responsibilities of the Eligibility and Compensation Committee are:

(i)  drafting the compensation policy for Management of the Bank and its subsidiaries, suggesting to the respective Boards of Directors various forms of fixed and variable compensation, in addition to benefits and special recruiting and severance programs;
(ii) proposing to the Boards of Directors of the Bank and subsidiaries the overall Management compensation amount to be submitted to the respective Shareholders’ Meetings, pursuant to Article 152, of Law 6,404, of 1976;
(iii) assessing future internal and external scenarios and their possible impacts on the Management compensation policy of the Bank and its subsidiaries;
(iv) analyzing the Management compensation policy of the Bank and its subsidiaries vis-à-vis market practices in order to identify significant discrepancies compared its peers, proposing the necessary adjustments.

As per CMN Resolution 3,921/10, the Eligibility and Compensation Committee is responsible for assisting in the process of determining compensation. The Committee is composed of three independent members, all of whom are natural persons residing in Brazil, with higher education degrees and technical skills suitable for the position they hold. The members also meet the criteria for holding positions in statutory bodies of financial and other institutions authorized to operate by the Brazilian Central Bank.  

The board   members convene in ordinary and extraordinary meetings, and their considerations are recorded in minutes. In turn, shareholders can express their opinions at the Annual/Extraordinary Shareholders Meeting.

The Board of Directors members are only entitled to fixed monthly compensation as fees, and are not entitled to variable compensation or direct and/or indirect benefits. Executive Board members are entitled to monthly compensation in the form of monthly wage plus a representation fee, the annual amount of which must not exceed the overall management compensation amount set by the Extraordinary and Annual Shareholders’ Meeting. They are also entitled to Banrisul’s Profit Sharing Program (PLR, in Portuguese), calculated in accordance with the rules established by the Board of Directors, considering the rules applicable to the payment of PLR to employees, as defined in the Banking Employees’ Collective Bargaining Agreement. In addition to the PLR, the Banrisul Conglomerate may pay variable compensation to its executive officers, provided it is included in the overall compensation approved by the Shareholders’ Meeting, observing the limits established by the legislation in force and based on criteria that may be defined by the Board of Directors.

2-19 a) Describe the remuneration policies for members of the highest governance body and senior executives, including:

2-19 a) i) fixed pay and variable pay;

The overall compensation of Senior Management and the Statutory Committees is set annually by the Shareholders’ Meeting, and the Board of Directors is responsible for defining the individual compensation of each Body.

The members of the Board of Directors receive a fixed monthly fee, with no variable compensation or benefits.  

The members of the Board of Executive Officers receive fixed monthly compensation and representation fees and are entitled to Profit Sharing (PLR, in Portuguese) and benefits such as paid time off, meal allowance, food basket allowance and health insurance, as well as variable compensation, provided that it is included in the overall compensation mentioned above, subject to the limits set by current legislation and based on criteria defined by the Board of Directors.

2-19 a) ii) sign-on bonuses or recruitment incentive payments;

Not applicable – the policy does not provide for this type of bonus.  

2-19 a) iii) termination payments;

Not applicable – the policy does not provide for this type of payment.

2-19 a) iv) clawbacks;

Not applicable – the policy does not provide for clawbacks.

2-19 a) v) retirement benefits.

Officers can also join private pension and insurance plans. These benefits may vary according to the specific profile of each professional. Officers who were Banrisul employees before taking office will be covered by the benefit plans they had when they were employees.

2-19 b) Describe how the remuneration policies for members of the highest governance body and senior executives relate to their objectives and performance in relation to the management of the organization’s impacts on the economy, environment, and people.

In addition to the Profit Sharing – PLR, in Portuguese ,(as per collective bargaining agreement), the Banrisul Conglomerate may pay variable compensation to its executive officers, provided it is included in the overall compensation approved by the Shareholders’ Meeting, observing the limits established by the legislation in force and based on criteria that may be defined by the Board of Directors.

2-12 a) Describe the role of the highest governance body and of senior executives in developing, approving, and updating the organization’s purpose, value or mission statements, strategies, policies, and goals related to sustainable development.

In line with its responsibility for steering the Bank’s business, guidelines and goals, the Board of Directors reviews and approves risk management policies, strategies and limits, and sets risk appetite levels in the Risk Appetite Statement (RAS), documented for Banrisul’s Prudential Conglomerate. The Bank also has the Social, Environmental and Climate Responsibility Policy (PRSAC, in Portuguese), which establishes the guidelines for conducting responsibility actions for each area, in a manner compatible with the nature of its activities and the complexity of its products and services, balancing business opportunities, to contribute to the sustainable development of the regions in which Banrisul operates.

Based on CVM Resolution 4945/21, the PRSAC also establishes that governance is effectively delegated to the Board of Directors and an officer responsible for implementing the actions designed to ensure effectiveness. In order to monitor and manage initiatives related to sustainability, the Company relies on a statutory Social, Environmental and Climate Responsibility Committee (CRSAC, in Portuguese), which is responsible for making recommendations to the Board of Directors and assessing the compliance of implemented actions with the Responsibility Policy.

2-12 b) Describe the role of the highest governance body in overseeing the organization’s due diligence and other processes to identify and manage the organization’s impacts on the economy, environment, and people, including:  

2-12 b) i) whether and how the highest governance body engages with stakeholders to support these processes;

As the institution’s highest body as regards the Risk Appetite Statement (RAS), the Board of Directors establishes the risk appetite levels and reviews them annually, supported by the Chief Risk Officer (CRO), the Board of Executive Officers and the Risk Committee.  

2-12 b) ii) how the highest governance body considers the outcomes of these processes.

The Institution has developed a series of indicators and flags to monitor its risk appetite, which are periodically monitored and reported to Senior Management by means of reports and a dashboard.

2-12 c) Describe the role of the highest governance body in reviewing the effectiveness of the organization’s processes as described in 2-12-b, and report the frequency of this review.

The Board of Directors meets monthly to assess the management reports on the main risks to which the institution is exposed. Changes to capital and corporate risk management policies are assessed annually by the body. At Management level, Banrisul relies on the Corporate Risk Committee and the Control and Risk Executive Office and, statutorily, on the Statutory Risk Committee.

The composition of the Board of Directors ensures a seat for common minority shareholders, preferred minority shareholders and a representative of the employees, who is chosen by internal election, according to the Board of Directors Charter. Thus, stakeholder groups are engaged in the Board of Directors meetings.

The Board of Directors is responsible for the Company’s overall direction of business, institutional guidelines and goals. As regards Integrated Capital and Corporate Risk Management, the Board is responsible for:

a) Establishing the Institution’s risk appetite levels in the Risk Appetite Statement (RAS) and reviewing them supported by the Risk Committee, the Executive Board and the Chief Risk Officer (CRO);
b) Ensuring compliance with the Institution’s policies, strategies and risk management limits;
c) Whenever necessary, authorizing exceptions to policies, procedures, limits and risk appetite levels set out in the RAS;
d) Ensuring that the Institution’s compensation structure does not encourage behaviors that are incompatible with risk appetite levels set out in the RAS;
e) Ensuring that the Institution keeps adequate and sufficient capital and liquidity levels;
f) Having a broad and integrated knowledge of risks that can hinder capital.

As for Corporate Risk Management, the Board of Directors, the Risk Committee, the CRO and the Executive Board have seral joint responsibilities, including:

a) Understanding, in a broad and integrated way, risks that can impact the Institution’s capital and liquidity;
b) Understanding the limits of information included in capital and risk management reports;
c) Ensuring that the Institution complies with the content of the RAS;
d) Understanding the limits and uncertainties related to the assessment of risk models, even when they are developed by a third party, and the methodologies used in risk management structure; and
e) Ensuring the Institution’s different levels understand and continually monitor risks.

The Board of Directors meets periodically to evaluate changes to the capital and corporate risk management policies, as well as management reports on the main risks to which the Institution is exposed. At Management level, Banrisul relies on the Corporate Risk Committee and the Control and Risk Executive Office and, statutorily, on the Statutory Risk Committee.

In compliance with CMN Resolution 4,945, of September 15, 2021, Banrisul’s Social, Environmental and Climate Responsibility Policy (PRSAC, in Portuguese) determines that it is incumbent upon the Executive Board, a governance body elected by the Board of Directors, to:

a) provide input and participate in the decision-making related to the drafting and review of the PRSAC, assisting the Board of Directors;
b) support the implementation of actions to ensure this Policy’s effectiveness;
c) monitor and evaluate implemented actions;
d) ensure that implemented actions are improved whenever possible deficiencies are identified;
e) help and encourage the adequate and reliable dissemination of mandatory information;
f) manage the PRSAC at Banrisul. The responsibilities of the Board of Directors include ensuring that the Institution complies with the PRSAC and taking measures to ensure its effectiveness.

Banrisul has a the Social, Environmental and Climate Responsibility Committee (CRSAC, in Portuguese), an advisory body to the Board of Directors, whose duties and responsibilities are to:

a) make recommendations to the Board of Directors on the drafting and review of the Social, Environmental and Climate Responsibility Policy;
b) evaluate if the actions implemented are in compliance with the Social, Environmental and Climate Responsibility Policy and, whenever necessary, make recommendations for improvement;
c) keep records of its deliberations and decisions;
d) evaluate and monitor the Bank’s sustainable performance and the effectiveness of the actions laid down in the Sustainability Plan;
e) monitor advancements in sustainability, seeking to identify opportunities and risks, in order to create value for the Bank and its stakeholders;
f) propose and follow-up the execution of initiatives that improve the Bank’s socio-environmental performance;
g) assisting the Board of Directors in incorporating sustainability into the Company’s business strategy and administrative practices and follow up its progress;
h) analyze, monitor and issue recommendations and opinions to support the Board of Directors’ decisions on policies and practices related to its field;
i) fulfil other duties determined by the Board of Directors.

2-14 a) Report whether the highest governance body is responsible for reviewing and approving the reported information, including the organization’s material topics, and if so, describe the process for reviewing and approving the information.

The Sustainability Report is submitted for approval to the Board of Directors, which receives the complete document, including the assurance report issued by the External Audit firm.

2-14 b) If the highest governance body is not responsible for reviewing and approving the reported information, including the organization’s material topics, explain the reason for this.

Not applicable as the Board of Directors is responsible for approving reported information.

The Fiscal Council, through any of its members, is responsible for overseeing Management’s acts and verifying compliance with legal and statutory duties, according to the Fiscal Council’s Internal Regulation.

Banrisul does not have a policy on tax risk management. Some of the tax risks are identified, managed and monitored focused on Operational Risk, e.g., compliance with the legislation and rules.

The Operational Risk department identifies risks, whose control compliance are assessed by the Controls and Compliance department. Moreover, the Company has a whistleblowing channel, with a general scope that can receive reports on taxes.

Banrisul does not have a policy on tax risk management. Some of the tax risks are identified, managed and monitored focused on Operational Risk, e.g., compliance with the legislation and rules. The Fiscal Council, through any of its members, is responsible for overseeing and assessing Management’s acts and verifying compliance with legal and statutory duties, according to the Fiscal Council’s Internal Regulation. The Operational Risk department identifies risks, whose control compliance are assessed by the Controls and Compliance department.

Whether the organization has implemented auditing systems for its environmental and social risk assessment policies.

In its organizational structure, the Bank has an Internal Audit area, which reports directly to the Board of Directors, whose scope considers all the functions of the Bank and the other companies that make up the conglomerate, observing the guidelines of CMN Resolution 4,879/2020.

Both the completed audit and the verification in progress were carried out by the Internal Audit, based on CMN Resolution 4,945, of September 15, 2021, and CMN Resolution 4,557, of February 23, 2017. Most of the comments refer to the effectiveness and implementation of the Social, Environmental and Climate Responsibility Policy.

For the year 2024, the Bank plans to carry out the audit, once again, within the scope of CMN Resolution No. 4,945/2021.

Any exclusions or limitations to the audit coverage of regions or products and services.

There are no exclusions or limitations to audit coverage related to regions or products and services.

Whether the audit(s) was carried out using internal/external auditor(s).

The internal audit department is responsible both for the completed audit and the one in progress.

The names of any standards utilized for the audit.

CMN Resolution 4,945, of September 15, 2021.

CMN Resolution 4,557, of February 23, 2017.

Follow-up actions (if any) to overall findings of the audit(s).

Among the follow-up actions for overall audit findings, there are actions aimed at the effectiveness of Social, Environmental and Climate Responsibility Policy (PRSAC, in Portuguese), the dissemination of complete and up-to-date information and the implementation of the PRSAC.

Banrisul’s organizational structure includes the Internal Audit department, reporting to the Board of Directors, whose scope of activities considers all duties of Banrisul and the other companies in the conglomerate, in compliance with CMN Resolution 4,879/2020.

Therefore, as of the publication of CMN Resolution 4,945, of September 15, 2021, an audit forecast was included in the Internal Audit planning for 2022. Works began in August 2022 and were completed in February 2023. For 2023, a social, an environmental and climate risk management audit is planned according to CMN Resolution 4,557, of February 23, 2017.

The internal audit department is responsible both for the past and for the future audit, as per:

– CMN Resolution 4,945, of September 15, 2021

– CMN Resolution 4,557, of September 23, 2017

Below, we list some Internal Audit findings that are currently being monitored. We must note that all the findings/reports issued by the Internal Audit are in compliance with the Policy on Management of Internal Audit Findings, approved by the Conglomerate’s Board of Directors:

– Actions to ensure PRSAC’s Effectiveness: drafting/preparation and validation of indicators relates to the Sustainability Agenda. Expectation to hire an external consulting firm to assist in this process. Timetable/deadlines will be established by the managing department.

– Dissemination of Complete and Updated Information: combined actions of the Sustainability Corporate Department and the Institution’s other departments, in addition to the creation of working groups for mapping sustainable products and sensitive sectors as regards social, environmental or climate aspects, as well as the forecast for hiring external consultants to assist in this project. Timetable/deadlines will be established by the managing department.

– Implementation of the PRSAC: initiatives to enable the implementation of social, environmental and climate responsibility principle and guidelines established in the PRSAC, as well as to ensure their compatibility and integration with the Institution’s other policies. Expectation to hire an external consulting firm to assist in this process. Timetable/deadlines will be established by the managing department.

¹Considers scope 1 and 3 emissions

As for fugitive emissions, which are encompassed in Scope 1 emissions, Banrisul began a process to modernize its air conditioning equipment, in order to reduce fugitive gas emissions. In this sense, we believe it is already possible to see a slight reduction in fugitive emissions due to this program.

As for mobile combustion, Banrisul will change the fuel used by its proprietary and leased vehicle fleet to ethanol in 2023. The goal is to have the entire fleet using this fuel whenever available (given that not every gas station offers ethanol, especially when the vehicles are located in smaller cities), in order to reduce emissions from mobile combustion.

The reduction seen in emissions for reference year 2022 was due to a reduction in the reference conversion factor used by the GHG Protocol tool. In 2021, the average annual factor (tCO2/MWH) was 0.1264 and, in 2022, it was 0.0426, which explains the decrease in tCO2 equivalent emissions.

Measurement of Scope 3 emissions improved after one year. For the 2022 inventory, Banrisul included additional information in the Upstream Transport category, related to light ATM maintenance vehicles that were not included in the previous inventories. Similarly, cash and money deposit bag transportation increased significantly, in absolute number of liters of fuel used from 562,557 in 2021 to 986,962 in 2022, largely due to the gradual recovery of the economy after the pandemic.

There are no reduction targets defined, since the Bank intends to increase the number of categories included in the Scope 3, leading to an upturn in emissions.

305-1 a) Gross direct (Scope 1) GHG emissions in metric tons of CO2 equivalent.

305-1 c) Biogenic CO2 emissions in metric tons of CO2 equivalent.

305-2 a) Gross location-based energy indirect (Scope 2) GHG emissions in metric tons of CO2 equivalent.

305-3 a) Gross other indirect (Scope 3) GHG emissions in metric tons of CO2 equivalent.

305-3 c) Biogenic CO2 emissions in metric tons of CO2equivalent.

¹Scope 2 emissions recorded a reduction in both 2022 and 2023 due to a decrease in the conversion factor of the National Integrated System (SIN, in Portuguese) used by the GHG methodology to convert MWh consumption into tCO₂.

²Regarding biogenic emissions, the variation arises from improved data collection for commuting emissions and, in 2023, we began considering emissions from employees working remotely, which were previously not measured due to uncertainties about the appropriate methodology.

³As for non-Kyoto emissions (R22), the reduction is due to the ongoing implementation of air conditioning system renewal at Banrisul’s premises, aimed at reducing the average age of equipment and consequently reducing fugitive GHG emissions.

⁴For scope 2, only CO₂ was included in the calculation.

⁵Considering scope 1 and 3 emissions.

305-1 b) Gases included in the calculation; whether CO2 , CH4 , N2O, HFCs, PFCs, SF6 , NF3 , or all.

Todos.

305-1 d) Base year for the calculation, if applicable, including:

305-1 d) i) the rationale for choosing it;

In 2021, Banrisul completed its first greenhouse gas inventory, measuring emissions for 2020, based on the GHG methodology. However, the first complete and third-party assured inventory refers to the 2021 fiscal year. For this reason, the reference year used as a measure to monitor emissions over time is 2021.

305-1 d) ii) emissions in the base year;

958.9 tCO₂.

305-1 d) iii) the context for any significant changes in emissions that triggered recalculations of base year emissions.

The base year used for emissions comparison is 2021, as it was the first comprehensive and assured inventory year. In this regard, we restated the information on emission quantity from the previous year (2022), which did not reflect the correct base year emissions (2021).

305-1 e) Source of the emission factors and the global warming potential (GWP) rates used, or a reference to the GWP source.

Emission factors and indices used according to the GHG Protocol calculation tool.

305-1 f) Consolidation approach for emissions; whether equity share, financial control, or operational control.

Operational control.

305-1 g) Standards, methodologies, assumptions, and/or calculation tools used.

The GHG Protocol calculation methodology was used to prepare the inventory, which was assured by an independent audit firm.

305-2 b) If applicable, gross market-based energy indirect (Scope 2) GHG emissions in metric tons of CO2 equivalent.

1,352.402 tCO₂ equivalent, measured considering the year 2023 for all Banrisul companies.

305-2 c) If available, the gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all.

For scope 2, only CO₂.

305-2 d) Base year for the calculation, if applicable, including:

305-2 d) i) the rationale for choosing it;

In 2021, Banrisul completed its first greenhouse gas inventory, measuring emissions for 2020, based on the GHG methodology. However, the first complete and third-party assured inventory refers to the 2021 fiscal year. For this reason, the reference year used as a measure to monitor emissions over time is 2021.

305-2 d) ii) emissions in the base year;

4,642.3 tCO₂ equivalent identified in emissions in 2021, according to the GHG Protocol methodology.

305-2 d) iii) the context for any significant changes in emissions that triggered recalculations of base year emissions.

The base year used for emissions comparison is 2021, as it was the first comprehensive and assured inventory year. In this regard, we restated the information on emission quantity from the previous year (2022), which did not reflect the correct base year emissions (2021).

305-2 e) Source of the emission factors and the global warming potential (GWP) rates used, or a reference to the GWP source.

 Emission factors and indices used according to the GHG Protocol calculation tool.

305-2 f) Consolidation approach for emissions; whether equity share, financial control, or operational control.

 Operational control.

305-2 g) Standards, methodologies, assumptions, and/or calculation tools used.

The GHG Protocol calculation methodology was used to prepare the inventory, which was assured by an independent audit firm.

If available, include the targets for the next cycle.

The Bank is currently migrating its energy consumption to renewable sources. As a result, it has 11,417.989 I-REC certificates, equivalent to 11,417.989 MWh of electricity generated from renewable sources, reducing greenhouse gas emissions by 465,054 tCO₂ equivalent, reinforcing the Company’s commitment to a cleaner and more sustainable energy matrix.

305-3 b) If available, the gases included in the calculation; whether CO₂; CH₄; N₂O; HFCs; PFCs, SF₆; NF₃; or all.

 All, according to the GHG Protocol tool.

305-3 d) Other indirect (Scope 3) GHG emissions categories and activities included in the calculation.

Only the categories set out in the GHG Protocol methodology tool were used.

305-3 e) Base year for the calculation, if applicable, including:

305-3 e) i) the rationale for choosing it;

In 2021, Banrisul completed its first greenhouse gas inventory, measuring emissions for 2020, based on the GHG methodology. However, the first complete and third-party assured inventory refers to the 2021 fiscal year. For this reason, the reference year used as a measure to monitor emissions over time is 2021.

305-3 e) ii) emissions in the base year;

 5,054.4 tCO₂ equivalent in scope 3 in 2021.

305-3 e) iii) the context for any significant changes in emissions that triggered recalculations of base year emissions.

The base year used for emissions comparison is 2021, as it was the first comprehensive and assured inventory year. In this regard, we restated the information on emission quantity from the previous year (2022), which did not reflect the correct base year emissions (2021).

305-3 f) Source of the emission factors and the global warming potential (GWP) rates used, or a reference to the GWP source.

 Emission factors and indices used according to the GHG Protocol calculation tool.

305-3 g) Standards, methodologies, assumptions, and/or calculation tools used.The GHG Protocol calculation methodology was used to prepare the inventory, which was assured by an independent audit firm.

201-2 a) Risks and opportunities posed by climate change that have the potential to generate substantive changes in operations, revenue, or expenditure, including:

201-2 a) i)  a description of the risk or opportunity and its classification as either physical, regulatory, or other;

Short-term physical climate risk: customers’ reduced payment capacity in the event of extreme weather events, such as heavy rains and periods of drought, including risks related to climate vulnerability in agribusiness credit transactions.

Medium-term physical climate risk: concentration of the loan portfolio in economic sectors most likely to suffer impacts related to extreme weather events, with the risk of compromising the Bank’s liquidity and competitiveness.

Climate transition risk: business relationship with sensitive and carbon-intensive industries. In the long term, by maintaining business relationships with these sectors, we can be negatively affected by changes in consumer preferences, as well as by restrictions, limitations and even bans on financed production processes.      

201-2 a) ii) a description of the impact associated with the risk or opportunity;

In the short term, extreme events, such as heavy rainfall and periods of drought, can harm customers’ payment capacity, especially in sectors that are more susceptible to the effects of climate change.

In the medium term, the concentration of the loan portfolio in economic sectors most likely to suffer impacts related to extreme weather events can compromise the Institution’s liquidity and competitiveness.

In the long term, the Institution, by maintaining business relationships with sensitive and carbon-intensive industries, can be negatively affected by changes in consumer preferences, as well as by restrictions, limitations and even bans on financed production processes.        

201-2 a) iii) the financial implications of the risk or opportunity before action is taken;

Customers’ capacity to honor their financial commitments to the Institution can be compromised.            

201-2 a) iv) the methods used to manage the risk or opportunity;

The business strategy aims to minimize the risks to which we are exposed in order to protect the assets and interests of customers, shareholders, employees and other stakeholders. The Risk Appetite Statement (RAS) is the instrument that defines the level of risk that the Institution is willing to accept in order to achieve its goals, regularly monitoring and reporting to higher bodies on the status of the indicators for monitoring social, environmental and climate risks.

Capital management is treated as an ongoing process, compatible with the nature of the operations, the complexity of the products and services offered and the scale of the risk exposure.

For relevant changes or the development of new products and services, a Social, Environmental and Climate Risk (RSAC, in Portuguese) analysis is carried out based on the information provided by the requesting business area. When necessary, recommendations for improvement are made in order to mitigate possible social, environmental and climate risks.

Where applicable, RSAC criteria are analyzed in credit transactions using a specific form, covering the industry, location, legal and management characteristics of the counterpart and the transaction.

Business opportunities are being developed by expanding the supply of sustainable products, such as the Sustainability CDC line, which finances renewable energy projects, electric charging stations, energy efficiency projects and electric scooters, among others.

In credit risk analysis, when applicable, the result of the assessment of social, environmental and climate risks is considered as part of a set of variables that affect the definition of the risk limit for customers.

201-2 a) v) the costs of actions taken to manage the risk or opportunity.

The costs of the measures taken to manage these risks or opportunities linked to climate issues and sustainability amounted to R$ 348.3 thousand in 2023.

For policies and commitments related to this material topic, the Board of Directors approved the Social, Environmental and Climate Risk Policy (PRASC in Portuguese), which was published in June 2022 and aims to set out the guidelines for the Bank’s and Banrisul Group subsidiaries’ social, environmental and climate responsibility activities, aligned to the nature of their activities and the complexity of their products and services. The PRSAC seeks to foster sustainability, balancing business opportunities with social, economic, environmental and climate responsibilities, contributing to the sustainable development of the regions where Banrisul operates.

The Institutional Policy on Social, Environmental and Climate Risk Management, updated in 2022 based on new regulatory framework, is targeted at outlining the management processes, seeking to mitigate these risks and, consequently, safeguard the assets and interests of its customers, shareholders, employees and other stakeholders.

To manage the topic and its related impacts, Banrisul manages social, environmental and climate risks by identifying, measuring, assessing, monitoring, reporting, controlling and mitigating other corporate risks in an integrated way, keeping risk exposure at a level the Institution is willing to take and ensuring adherence to its Institutional Policies.

The Institution controls and mitigate potential negative impacts through initiatives and strategies that aim to keep exposure to social, environmental and climate risks at adequate levels. Risk treatment options are described and formalized through initiatives that can have one or more procedures and mitigate one or more risks.

Banrisul adopts a series of actions to mitigate potential negative impacts, mainly regarding the exposure of its credit operations, when applicable, i.e.:

– Contractual clauses determining that the borrower must comply with the respective legislation and adopt periodic monitoring;
– Contractual clauses foreseeing the possibility of early maturity of the operations in case of irregularities of this nature;
– Checking if environmental licenses and certificates are valid;
– Requiring the Biosafety Quality Certificate (CQB, in Portuguese), issued by the National Biosafety Technical Commission (CTNBio, in Portuguese);
– Applying the Survey of Indications of Contamination in Urban Properties (LIC, in Portuguese) form;
– Applying the social, environmental and climate risk analysis questionnaire, for operations above R$10 million;
– Monitoring agribusiness credit operations through the Social and Environmental Compliance System.

As regards its activities, Banrisul mitigates its exposure to potential negative impacts by adopting, among others, the listed action:

– In relevant contracting and procurement processes, it identifies the contracting risk matrix and social and environmental requirements.

The Institution identifies and remedies actual negative Social, Environmental and Climate (SAC, in Portuguese) impacts by consulting information in public lists and checking the activities, products and services subject to social and environmental legislation. As for operations, Social, Environmental and Climate Risks inherent to the activity’s economic industry are identified, based on the National Registry of Economic Activity (CNAE – Cadastro Nacional de Atividade Econômica) code.

As for the credit portfolio as a whole, Banrisul is developing a climate stress test model aimed at measuring the impact of climate events on the overall capital index, demonstrating the financial impact and defining new strategies for significant events.

The characteristics of the Institution’s products, services, activities and processes as well as the activities of its counter parties, controlled companies, suppliers and relevant outsourced service providers are assessed for potential risks of violation of fundamental rights and guarantees or acts harmful to the common interest; environmental degradation, including the excessive use of natural resources; and changes in weather patterns.

For each operational risk event, the Operational Losses Database identifies, when applicable, the operational losses linked to the Social, Environmental and Climate Risk. This scope is highlighted in civil and labor lawsuits, administrative proceedings, fines and other events.

To manage the positive impacts, the “Contribution to the Green Economy” indicator is monitored on a monthly basis to measure how much of the corporate credit portfolio is made up of economic sectors with a certain level of environmental and/or social contribution. This indicator is monitored by following up the percentage variation. The higher the percentage, the higher the active balance in financing to industries with a positive social and/or environmental impact, representing a higher contribution from the Institution.

The efficiency tracking processes are evaluated periodically, including assessing the internal and external audits, the Controls and Compliance department’s follow ups, operational risk analysis cycles, among other procedures. The Institution’s exposure to climate risk is monitored on a monthly basis, through the follow-up of the active balance of the corporate credit portfolio, allocated to industries with highly and moderate risk impacts.

The Bank also actively participates in FEBRABAN’s Committees and Working Groups, where it debates current relevant guidelines for this topic, participates in public consultations, and shares best practices with other companies in the industry.

As for goals, targets and indicators to assess progress based on Banrisul ESG Agenda’s recommendations, themes and strategic pillars were defined, and the Company set indicators and targets for strengthening management of social, environmental and climate risks and reducing climate risk.

Even though the Bank has robust risk management, there are still many opportunities to make progress in managing social, environmental and climate risks, especially in defining sensitive sectors and drafting restrictive policies. The recommendations of the ESG Agenda are based on Banrisul’s ongoing or planned actions/projects and the most prominent/most adopted actions by the financial industry.

In order to prepare the ESG Agenda, Banrisul assessed internal and external information to obtain an overview of the efforts required to position itself aligned to market expectations. The Company used data from interviews with senior management and online stakeholder survey to prepare its materiality matrix, and meetings and workshops with key departments to get their opinion on suggested actions, targets and indicators.

Moreover, Banrisul joined the Carbon Disclosure Project (CDP in Portuguese) and the Brazilian GHG Protocol program to enhance its technical and institutional capacity in managing greenhouse gas emissions in order to take stock and report.

3-3 a) Describe the actual and potential, negative and positive impacts on the economy, environment, and people, including impacts on their human rights.

3-3 b) Report whether the organization is involved with the negative impacts through its activities or as a result of its business relationships, and describe the activities or business relationships.

See the answers to this content in the impact section on the material topics page.

3-3 c) Describe its policies or commitments regarding the material topic.

The organization has a formal risk management policy, described in a document called “Institutional Structures and Policies for Capital Management and Corporate Risks”. It covers capital management and credit, market, IRRBB, liquidity, operational, social, environmental and climate risks.

The Bank operates in line with the regulations issued by the Brazilian Federation of Banks (Febraban, in Portuguese) in the self-regulation system, including standard 14/2014 (Social and Environmental Responsibility Policy and Social and Environmental Risk Management) and standard 26/2023 (management of the risk of illegal deforestation in the beef chain).

3-3 d) Describe actions taken to manage the topic and related impacts, including:

3-3 d) i) actions to prevent or mitigate potential negative impacts;

In the granting of agricultural credit, in 2023, Banrisul began monitoring the areas by remote sensing and hired a specialized company to carry out a social and environmental compliance study of the financed areas, a process that is constantly being improved. Another practical measure has already been put into practice: a half-point reduction in the interest rate on loans to rural producers for areas that have had their Rural Environmental Registry (CAR, in Portuguese) analyzed.         

3-3 d) ii) actions to address actual negative impacts, including actions to provide for or cooperate in their remediation;

No actual negative impacts have been identified.

3-3 d) iii) actions to manage actual and potential positive impacts.

Throughout 2023, we adopted numerous measures to manage risks or opportunities, such as technical consultancy for the preparation of strategic sustainability management and the greenhouse gas emission reduction and mitigation plan; starting the implementation of the sustainability agenda; participating in the Brazilian GHG Protocol program; joining the CDP; and acquiring carbon credits and renewable energy certificates. The costs of the measures taken to manage these risks or opportunities linked to climate issues and sustainability amounted to R$526,398.7 in 2023. 

3-3 e) Report the following information about tracking the effectiveness of the actions taken:

3-3 e) i) processes used to track the effectiveness of the actions;

Processes are evaluated periodically, including assessing the internal and external audits, the Controls and Compliance department’s monitoring, operational risk analysis cycles, among other procedures.

Banrisul is an active member of Committees and Working Groups at the Brazilian Federation of Banks (Febraban, in Portuguese), debating current guidelines relevant to the topic of social, environmental and climate risks and responsibility, as well as participating in public consultations and sharing best practices with other institutions in the financial sector.

Through voluntary reports (such as CDP, GHG, Global Compact and GRI) and compliance reports, we demonstrate the level of compliance with current regulations and adherence to best market practices. The Institution’s processes are also supervised by the Central Bank of Brazil, which issues recommendations and notes when opportunities for improvement and necessary corrections are identified.

3-3 e) ii) goals, targets, and indicators used to evaluate progress;

The Bank seeks to continuously improve its social, environmental and climate risk management, reflecting the guidelines of international frameworks and best market practices, as well as the national regulatory framework.

It is worth noting that the Bank monitors the risk of deforestation in the beef chain, a commitment voluntarily made by the Bank as a signatory to Febraban’s self-regulation system. The Bank now requires these customers to adopt a traceability system for their herds by December 2025, which demonstrates that they do not purchase cattle associated with illegal deforestation from direct and indirect suppliers.

3-3 e) iii) the effectiveness of the actions, including progress toward the goals and targets;

Banrisul’s risk management, especially with regard to social, environmental and climate risks, has been improved to ensure adherence to the standards of the Central Bank of Brazil and the Self-Regulation system of the Brazilian Federation of Banks. Even though the Bank already has robust risk management, there are still opportunities for improvement, especially in defining sensitive sectors and drafting restrictive policies.

The actions undertaken have proven effective, leading to advancements in the risk theme recognized by CDP, where the Bank improved from a C grade in 2022 to an A grade in risk management and a B grade in risk reporting in 2023.

3-3 e) iv) lessons learned and how these have been incorporated into the organization’s operational policies and procedures.

The efforts to improve risk management demonstrated the need to formalize processes already developed into internal policies, as well as the importance of establishing robust controls and systematizing monitoring.

An important step in advancing risk management is to identify the relevant impacts for the Institution, allowing management to prioritize mitigation and correction actions. To this end, a project is underway in partnership with a technical consulting firm specializing in evaluating the impact of products and services offered to the public.

3-3 f) Describe how engagement with stakeholders has informed the actions taken (3-3-d) and how it has informed whether the actions have been effective (3-3-e).

Banrisul’s corporate risk department interacts with the other administrative and business departments, providing training and assisting first-line managers in developing tools for proper risk management. Internal and external training is available to ensure the continuing education of risk teams.

In order to capture the perception of the market and the financial system, Banrisul holds meetings with representatives of other institutions and participates in working groups on risk issues. The Ombudsman’s reports are also used as input so we can respond to customer demands.

When Banrisul receives demands from investors regarding these issues, they are handled together with the investor relations department.

Climate change management at Banrisul includes transition and physical Climate Change Risks, as defined by CMN 4,943/21:

Transition climate change risks: possibility of the Institution incurring in losses arising from events associated with the transition to a low carbon economy;

Examples of transition climate change risks include legal and regulatory changes; technological innovations; changes in products and services supply and demand; unfavorable perception from clients the financial market or society in general; events related to the transition to a low-carbon economy and that negatively impact the Institution;

Physical climate change risks: possibility of the Institution incurring in losses arising from events associated with short and medium-term frequent and severe weather events or long-term environmental changes that can be related to changes in climate patterns.

Climate risk events can lead to financial and reputational losses, as well as to process inefficiencies. Possibilities of losses associated with the other types of risks to which the Institution is exposed, especially operational and credit risks, can be identified.

In addition to monitoring the regulatory environment and customer perception, management includes consulting information on public lists and verifying the activities, products and services subject to social and environmental legislation. As for the operations, Social, Environmental and Climate Risks inherent to the activity’s economic industry are identified, based on the National Registry of Economic Activity (CNAE – Cadastro Nacional de Atividade Econômica) code). Climate risk management costs are not calculated individually, but are considered together with the resources allocated to the Institution’s risk management.

302-1 a) Total fuel consumption within the organization from non-renewable sources, in joules ormultiples, and including fuel types used.

302-1 b) Total fuel consumption within the organization from renewable sources, in joules ormultiples, and including fuel types used.

302-1 c) In joules, watt-hours or multiples, the total:

302-1 c) i) electricity consumption

302-1 c) ii) heating consumption

302-1 c) iii) cooling consumption

302-1 c) iv) steam consumption

302-1 d) In joules, watt-hours or multiples, the total:

302-1 d) i) electricity sold

302-1 d) ii) heating sold

302-1 d) iii) cooling sold

302-1 d) iv) steam sold

302-1 e) Total energy consumption within the organization, in joules or multiples.

302-1 f) Standards, methodologies, assumptions, and/or calculation tools used.302-1 g) Source of the conversion factors used.

¹There was no energy sale.

²In metric tons, standard measurement unit used by the GHG Protocol methodology.

Regarding the “Energy consumption within the Organization” table, three points should be noted:

• In 2023, Both owned and leased vehicles began using ethanol as fuel due to its lower greenhouse gas emissions. resulting in an 18.7% reduction in gasoline consumption.
• Since early 2023, the amount of diesel oil consumed by motor vehicles has been included in the calculation, in addition to that used by generators. Therefore, values for 2021 and 2022 differ from those published in previous years. – Since mid-2023, Banrisul Armazéns Gerais, a company within the Banrisul group, has been generating energy from solar panels at its storage facilities. This energy is consumed by the Company, and the surplus is fed into the utility grid. In 2023, from July to December, a total of 346,170.7 kWh was generated, of which 230,979.0 kWh were fed into the utility grid, and 115,191.7 kWh were used internally.

3-3 a) Describe the actual and potential, negative and positive impacts on the economy, environment, and people, including impacts on their human rights.

3-3 b) Report whether the organization is involved with the negative impacts through its activities or as a result of its business relationships, and describe the activities or business relationships.

See the answers to this content in the impact section on the material topics page.

3-3 c) Describe its policies or commitments regarding the material topic.

Banrisul has joined the Carbon Disclosure Project (CDP) and started using renewable energy sources, while continuing its participation in the Brazilian GHG Protocol program to enhance the technical and institutional capacity of its professionals in managing greenhouse gas emissions for calculation and reporting purposes. 

3-3 d) Describe actions taken to manage the topic and related impacts, including:

3-3 d) i) actions to prevent or mitigate potential negative impacts;

Energy efficiency and ESG factors are also considered within the supplier chain. For the development and execution of engineering projects and services, air quality analyses are required, including the implementation of a semi-annual procedure for air sampling and analysis in Banrisul’s environments with and without public access, and reviewing the reports issued by laboratories.

3-3 d) ii) actions to address actual negative impacts, including actions to provide for or cooperate in their remediation;

 No actual impacts requiring remediation actions were identified.

3-3 d) iii) actions to manage actual and potential positive impacts.

 No measures have been identified to manage actual or potential positive impacts.

3-3 e) Report the following information about tracking the effectiveness of the actions taken:

3-3 e) i) processes used to track the effectiveness of the actions;

Use of renewable energy: monitored through regular reports presented to the Administrative Officer.

Energy efficiency: monitoring energy consumption at Banrisul’s premises.

Air quality analysis: through analysis of reports issued by the laboratories.

ESG in the supplier chain: through the inspection of the works and services with the issuance of a technical monitoring report.

Banrisul has internal controls to track waste generation, documenting volumes of each type of waste and dates of handover to partner companies responsible for final disposal. Moreover, for each destination, specific documents are generated, such as the Waste Transportation Manifest and, at the end of the operation, the Final Disposal Certificate (CDF, in Portuguese), presenting all the information related to the waste handled.

3-3 e) ii) goals, targets, and indicators used to evaluate progress;

As part of Banrisul’s action plan, goals include reducing scope 1 and 2 GHG emissions by 25% by 2030, based on 2020 levels (emission reduction targets calculated using the SBTi tool – 2021), offsetting 100% of remaining emissions with an annual carbon-neutral project, maintaining the lifespan (10–15 years) of air conditioning equipment in branches until 2030, and pursuing improvements in eco-efficiency projects.

The amount of waste generated is not constant because it depends on non-recurring factors, which makes it difficult to set individual targets. For example, maintenance and renovations in workplaces generate waste as a result of the replacement of fluorescent light bulbs. However, Banrisul is committed to replacing all fluorescent light bulbs with LED bulbs during branch refurbishments.

Similarly, no targets have been set for unserviceable furniture, but the Bank is committed to properly disposing of all furniture that is no longer used by the Institution.

3-3 e) iii) the effectiveness of the actions, including progress toward the goals and targets;

Use of renewable energy: 70 consumer units migrated to the Free Energy Market (ACL, in Portuguese) from October to December 2023.

Energy efficiency: delivery of spaces featuring energy-efficient components and equipment, such as occupancy sensors to turn lights on and off, LED panels, inverter air conditioning equipment and sunshades.

Air quality analysis: an air collection and analysis procedure is conducted every six months at the premises (including both units that do and do not serve customers).

ESG in the supply chain: benchmarking.

3-3 e) iv) lessons learned and how these have been incorporated into the organization’s operational policies and procedures.

With the recent update of the Solid Waste Management Plan in 2023, it was possible to review solid waste disposal flows, as well as assess the gaps to be addressed. The Bank is currently implementing the action plan resulting from this update.

3-3 f) Describe how engagement with stakeholders has informed the actions taken (3-3-d) and how it has informed whether the actions have been effective (3-3-e).

The ESG agenda was embedded the various levels through meetings, the dissemination of targets, external communication to the market and internal communication.

306-2 a) Actions, including circularity measures, taken to prevent waste generation in the organization’s own activities and upstream and downstream in its value chain, and to manage significant impacts from waste generated.

Waste management processes are outlined in an internal regulation, revised in 2023, which specifies the types of waste generated by the Bank, the disposal flows, responsible departments for execution, and monitoring measures in line with the Solid Waste Management Plan (PGRS, in Portuguese). This management includes monthly tracking of waste volume indicators and oversight of contracts with companies and partners for proper final disposal and donation of unserviceable items.

In 2023, we concluded the Copinho Zero (Zero Cups), a project aimed at reducing single-use plastic waste by replacing plastic cups with reusable coffee mugs and water bottles by all employees. We issued an administrative instruction to our branch network to procure cups made from sustainable materials to offer to customers, thereby mitigating the negative environmental impact of these wastes.

306-2 b) If the waste generated by the organization in its own activities is managed by a third party, a description of the processes used to determine whether the third party manages the waste in line with contractual or legislative obligations.

Internal controls track waste generation, documenting volumes of each type of waste and dates of handover to partner companies responsible for final disposal. For each destination, specific documents are generated, such as the Waste Transportation Manifest and, at the end of the operation, the Final Disposal Certificate (CDF, in Portuguese), presenting all the information related to the waste handled.

306-2 c) The processes used to collect and monitor waste-related data.

The Bank’s waste management is centralized internally, with materials quantitatively measured for appropriate disposal according to their type.

306-3 a) Total weight of waste generated in metric tons, and a breakdown of this total by composition of the waste.

306-4 a) Total weight of waste diverted from disposal in metric tons, and a breakdown of this total by composition of the waste.

306-4 b) Total weight of hazardous waste diverted from disposal in metric tons, and abreakdown of this total by the following recovery operations.

306-4 c) Total weight of non-hazardous waste diverted from disposal in metric tons, and a breakdown of this total by the following recovery operations.

306-4 d) For each recovery operation listed in Disclosures 306-4-b and 306-4-c, a breakdown of the total weight in metric tons of hazardous waste and of non-hazardous waste diverted from disposal.

306-5 a) Total weight of waste directed to disposal in metric tons, and a breakdown of this total by composition of the waste.

306-5 b) Total weight of hazardous waste directed to disposal in metric tons, and a breakdown of this total by the following disposal operations.

306-5 c) Total weight of non-hazardous waste directed to disposal in metric tons, and abreakdown of this total by the following disposal operations.306-5 d) For each disposal operation listed in Disclosures 306-5-b and 306-5-c, a breakdown of the total weight in metric tons of hazardous waste and of non-hazardous waste directed to disposal.

¹There was no recovery of waste not destined for final disposal within the Organization, only outside.

²We have data on fluorescent lamps; however, the metric used in our control is by units. In 2023, fluorescent lamps were no longer disposed of, due to the process of replacing them with LED lamps.

³ The reduction in Class II non-hazardous waste compared to previous years is because there was no monitoring of this waste. After improvements in control, in June 2023 the organic waste from the Headquarters Building, which goes to landfill, began to be monitored by weighing it daily.

⁴ The organic solid waste generated in the organization is sent for public collection in the locations where the branches are present. A company is contracted to dispose of organic waste at the headquarters building.

306-3 b) Contextual information necessary to understand the data and how the data has been compiled.

306-5 e) Contextual information necessary to understand the data and how the data has been compiled.

See the footnote of the table and answer to item GRI 306-2 b).

306-4 e) Contextual information necessary to understand the data and how the data has been compiled.

Unserviceable furniture was redirected through donation, quantified in units: 2,382, in 2022; and 2,661 in 2023. Organic waste was sent to landfills: at the headquarters, 312.5 m³ in 2022, equivalent to 125 metric tons of waste, using a density of 400 kg/m³, and 11.5 metric tons in 2023, starting from August.

See the answer to item GRI 306-2 b).

To govern supplier relations, Banrisul uses the Bidding Process Law (Federal Laws 8,666/93 and 13,303/2016), as well as other related federal and state laws. It also uses the Internal Regulations on Bidding Processes and Contracts (RILC, in Portuguese), which is published on the Institution’s transparency website. The transparency website also features other documents governing supplier relations, including the Supplier Relations Manual (which governs supplier behavior in bidding processes and the contracting of Banrisul Group companies) and Banrisul’s Supplier Manual (created to help Banrisul’s suppliers know and understand the procedures that the Company uses in its business relations for the acquisition of goods and services).

For the measures taken to manage the topic and its related impacts, there is not a specific position within the Organization to manage these impacts. They are mitigated throughout the supplier management chain, with different levels in charge of different tasks. For example, the Contract Management department is responsible for checking the documentation proving the bidder’s technical qualification in a bidding process; after the bidder becomes a contractor, the Contracting department is responsible for checking if the supplier has any impediments and if it has all the necessary certificates of good standing, among other things.

The measures to prevent or mitigate potential negative impacts include the existence of an Outsourcing Supervision department, which checks if the labor rights of outsourced workers that provide services for Banrisul are being respected. In order to mitigate impacts, Banrisul also created the Sanctioning Processes department, which is responsible for conducting administrative sanctioning processes that investigate negative incidents caused by the contractor and impose penalties, if applicable.

There are measures to face actual negative impacts, such as public contracting regulations, including a tool that mitigates the actual impact of the lack of supply of services or products by the contractor: emergency contracts. This legal provision enables the Bank to hire contractors to provide a portion of a service on an urgent basis, i.e., the services are provided first, and the internal administrative procedures set out in the regulations are completed later, formalizing the contract.

The Outsourcing Supervision department works to mitigate risks, but there is not yet a routine that provides information on how many defenses of complaints are successful. Regarding the Sanctioning Processes department, more penalties have been imposed over the periods, given that the managing departments understood the importance of effectively monitoring the performance of the contract and should request the determination of responsibility in case of irregularity in the provision of services by the contractor.

The effectiveness of the actions is felt qualitatively, as previously described, when the managing units are more concerned about describing possible penalties for the poor performance of the contract in the contracting processes; the managing units seek new ways to choose service providers through more robust qualifications in bidding processes; contractors try to anticipate future problems of understanding in requests of performance to the contractor, avoiding the filing of a sanctioning process; and contractors understand the importance of sending labor documentation to be effectively monitored by the Supervision department. The departments responsible for mitigating risks share what they have learned, guiding the continuous improvement of processes so that, given the right/duty of the managing department to start proceedings to determine responsibility in case of poor performance of the contract by the contractor, the contracting process is moralized, preventing possible market suppliers with bad intentions from participating in contracting procedures. Similarly, the effectiveness of Outsourcing Supervision can be reducing the number of labor complaints in which the Bank is jointly and severally liable.

3-3 a) Describe the actual and potential, negative and positive impacts on the economy, environment, and people, including impacts on their human rights.

3-3 b) Report whether the organization is involved with the negative impacts through its activities or as a result of its business relationships, and describe the activities or business relationships.

See the answers to this content in the impact section on the material topics page.

3-3 c) Describe its policies or commitments regarding the material topic.

To govern supplier relations, Banrisul uses the Bidding Law, other related federal and state legislation and the Internal Bidding and Contract Regulations (RILC, in Portuguese), published on the Bank’s website under Transparency.

The website also features other documents governing supplier relations, including the Supplier Relations Manual, which governs supplier behavior in bidding processes and the contracting of Banrisul Group companies, and Banrisul’ Supplier Manual, created to help the Bank’s suppliers know and understand the procedures used in its business relations for the acquisition of goods and services.

3-3 d) Describe actions taken to manage the topic and related impacts, including:

3-3 d) i) actions to prevent or mitigate potential negative impacts;

The terms and conditions of the relationships between the Company and its suppliers are set out in the contracts entered into between the parties.

Especially for contracts involving the outsourcing of labor, they are submitted to thorough checks for compliance with labor and social security obligations, through monitoring of certificates of good standing, among other actions.

3-3 d) ii) actions to address actual negative impacts, including actions to provide for or cooperate in their remediation;

In public procurement rules, there is a tool that mitigates the real impact of shortages: emergency contracting, a device that allows the immediate contracting of service providers/suppliers to meet an urgent service requirement. The resource makes it possible to carry out the services or supply and then deal with the internal administrative procedures provided for in the regulations, to make the contract effective.

3-3 d) iii) actions to manage actual and potential positive impacts.

 No positive impacts requiring management actions were identified.

3-3 e) Report the following information about tracking the effectiveness of the actions taken:

3-3 e) i) processes used to track the effectiveness of the actions;

Suppliers, especially those with contracts involving the outsourcing of labor, are submitted to thorough checks for compliance with labor and social security obligations, through monitoring of certificates of good standing, among other actions.

3-3 e) ii) goals, targets, and indicators used to evaluate progress;

There are no targets or indicators to evaluate the progress of the monitoring and sanctioning processes, because their contribution to the overall process is a lot more qualitative than quantitative.

3-3 e) iii) the effectiveness of the actions, including progress toward the goals and targets;

The effectiveness of the actions is felt qualitatively when the managing units are more concerned about describing possible penalties for the poor performance of the contract in the contracting processes; the managing units seek new ways to choose service providers through more robust qualifications in bidding processes; contractors try to anticipate future problems of understanding in requests of performance to the contractor, avoiding the filing of a sanctioning process; and contractors understand the importance of sending labor documentation to be effectively monitored by the Supervision department.

3-3 e) iv) lessons learned and how these have been incorporated into the organization’s operational policies and procedures.

The terms and conditions of the relationships between the Company and its suppliers are set out in the contracts entered into between the parties. Given the right/duty of the managing department to start proceedings to determine responsibility in case of poor performance of the contract by the contractor, the contracting process is moralized, preventing possible market suppliers with bad intentions from participating in contracting procedures. Similarly, the effectiveness of outsourcing supervision can be reducing the number of labor complaints in which the Bank is jointly and severally liable.

3-3 f) Describe how engagement with stakeholders has informed the actions taken (3-3-d) and how it has informed whether the actions have been effective (3-3-e). 

Departments were created by the Procurement Unit, always with the support of the Board of Executive Officers. Pursuant to internal regulations, departments must always be created by a resolution, previously approved by the higher bodies.

308-1 a) Percentage of new suppliers that were screened using environmental criteria.

As contracts may have specific sustainability criteria, such as the use of sheets with the FSC seal, equipment with lower impact on ozone emissions and appropriate disposal of construction waste, among others, all contracts signed by the Bank go through an analysis of environmental criteria.

After the creation of the Sustainability department, all contracts started including analyzed environmental criteria, which are analyzed and defined according to the scope of each contract. As contracts may have specific sustainability criteria, such as the use of sheets with the FSC seal, equipment with lower impact on ozone emissions and appropriate disposal of construction waste, among others, it is estimated that all contracts signed by Banrisul go through an analysis of environmental criteria.

414-1 a) Percentage of new suppliers that were screened using social criteria.

All Banrisul’s contracts are evaluated on the basis of social criteria, including labor and social issues, in accordance with specific legislation.

The contracts entered into by Banrisul, and its associate companies focus on the appropriate treatment of their technical staff, who has a direct role in the provision of services. The contractor is responsible for ensuring this appropriate treatment, while the Bank assumes joint responsibility for supervising these practices, complying with state laws and the Federal Constitution. All contracts have provisions on social criteria, and all contracts entered into by Banrisul have specific clauses related to labor and social issues, in compliance with the specific legislation.

404-1 a) Average hours of training that the organization’s employees have undertaken during the reporting period, by:

404-1 a) i) gender;

¹ To calculate the average number of hours, we used the total number of training hours per employee divided by the number of employees by gender (see GRI 2-7). In 2021, trainees were not included in this calculation. The data for 2022 was corrected, which led to a decrease in the average number of training hours [GRI 2-4]. All the courses included in these figures are considered apprenticeships.

404-1 a) ii) employee category.

With regard to the average number of training hours, by employment category, there was an increase in the Manager category, due to attendance in training programs, as shown in the following table; a reduction in the Analyst category, as a result of the voluntary redundancy program, which terminated more than 500 employees, whose activities were transferred to other employees; extinction of the Assistant category, which included the technical advisor position; expansion of the Clerk category due to the entry of new employees, who participated in the onboarding program and training courses for the position; a reduction in the Intern category, compatible with the return to face-to-face activities, which demand new tasks and restrict the time available for capacity building; and a positive impact on the Other category, as a result of the new classes in the Supervisor Training Program.

¹ To calculate the average number of hours, we used the total number of training hours per employee divided by the number of employees by employee category (see GRI 405-1). All the courses included in these figures are considered apprenticeships.

² Assistants were considered in the functional category of Analysts.

³ The training hours of attachés were not taken into account.

The policies or commitments focused on human capital development are part of the “Strengthening People” front of Banrisul’s strategic planning, considering that employees are the means for achieving organizational success, thus the need for a fresher look and continuous encouragement to developing and improving people.

The People Development Superintendence Department – Corporate University is responsible for managing this topic and its impacts and reporting to the Executive Board. Its duties include “to manage the development, implementation and monitoring of in-person and distance education programs, seeking learning technologies solutions and contributing to the culture of innovation at Banrisul”. Furthermore, the HR areas share strategies and decision-making. The Annual Training Plan, which brings together all areas and Regional Superintendencies in its development, is analyzed jointly and submitted to the Committees and the Board of Directors for approval, accompanied by the respective budget plan.

The actions taken to address potential negative impacts include: onboarding of new employees; training programs for career development; academic incentive program, encompassing undergraduate, specialization, master’s and doctorate degrees; enrollment in paid external courses, refresher webinars on products, services, legislation and topics of interest, symposiums, congresses, among others; international missions; the reach of coursed offered via Moodle platform, favoring the ongoing development and incentive to self-development, regardless of geographical location.

Actions taken to address actual negative impacts include adapting educational technologies in order to provide a better experience for colleagues working at the branches by, for example, offering training sessions with audio and subtitles, enabling a better participation in the courses; organization of trails in different formats, promoting employees self-development. Offering more webinars on topics that attract a large audience, with the option of watching the recorded version for employees who, for different reasons, were not able to watch the presentation live.

Actions to manage actual and potential positive impacts: developing educational strategies and programs through co-production by integrating the branch network’s and general management’s point of view, focused on using knowledge to enhance productivity and provide better service; using inclusive and integrative language to inform about programs and development tracks; strengthening capacity building by bringing all units and Regional Superintendencies closer together through the employees’ academic research; making the final papers of graduating employees available so that research can be accessed by other employees and taken further.

In order to track the effectiveness of these actions, Banrisul monitors investments made, course attendance, certificates received, mandatory courses, career progression based on training programs; surveys the participants of courses and webinars; and verifies the applicability of academic research; among others.

The Annual Training and Development Plan’s strategy involves several stages, i.e., online survey available to all employees; focus groups with representatives from the Branch Network and General Management; analysis of strategic planning guidelines, market trends and gaps reported to the HR departments.

Banrisul evaluates corporate education based on the following indicators: investment, number of employees who attended courses, number of employees who received certification, training hours per employee, courses/events satisfaction level, courses/events quality level.

Periodically, quantitative data on trained employees are shared with the Executive Board and the entire staff in articles published in the internal portal. Moreover, every time Banrisul identifies a position that needs to be filed, specific training is developed to prepare professionals to meet the requirements of the job as market managers, business operators, agribusiness relationship managers, among others. Incentive to academic research encourages employees to share their work via banritalks and the virtual library, making knowledge accessible to the entire staff. Employees can request external and internal courses, such as webinars, via workflow, which enables the analysis, monitoring and conclusion of the process. Information on distance learning courses is published monthly, highlighting free and mandatory programs, in compliance with the legislation.

Given that finance is the Bank’s expertise and that employees should handle their own personal finances, a program was developed to offer financial education to all employees.

The branch network and General Management producing knowledge together enable sharing points of view that enhance the Annual Training Plan, as well as strategies for its implementation. Furthermore, the exchange with universities and innovation centers makes it possible to share challenges and solutions both for internal stakeholders and external groups and institutions.

3-3 a) Describe the actual and potential, negative and positive impacts on the economy, environment, and people, including impacts on their human rights.

3-3 b) Report whether the organization is involved with the negative impacts through its activities or as a result of its business relationships, and describe the activities or business relationships.

See the answers to this content in the impact section on the material topics page.

3-3 c) Describe its policies or commitments regarding the material topic.

Banrisul does not have a specific policy on the topic.

3-3 d) Describe actions taken to manage the topic and related impacts, including:

3-3 d) i) actions to prevent or mitigate potential negative impacts;

Through the Onboarding Program, the People and Culture Development Unit – Corporate University, responsible for organizing the program, provided newcomers with a unique experience that allowed them to deepen their knowledge of Banrisul’s history, mission, culture, values, practices and goals. The initiative reinforces the Bank’s commitment to the continuous training of its employees, striving for constant improvement. 

3-3 d) ii) actions to address actual negative impacts, including actions to provide for or cooperate in their remediation;

Through investments in employee training, which totaled R$5.3 million in the year. Among Corporate Education initiatives, Banrisul invested in training programs for the branch network and general management units based on learning paths in distance learning or in-person format.

3-3 d) iii) actions to manage actual and potential positive impacts.

Banrisul invests in the development of educational strategies and programs through co-production, integrating the vision of the branch network and -general management, focused on using knowledge to enhance productivity and provide better service. Attention to inclusive and integrative language in the dissemination of programs and learning paths enhances qualifications by bringing together and connecting all units and Regional Superintendencies.

3-3 e) Report the following information about tracking the effectiveness of the actions taken:

3-3 e) i) processes used to track the effectiveness of the actions;

To monitor the development of the training area, the Bank tracks investments, employee participation in courses, certifications achieved, mandatory courses developed, career progression based on training, course and webinar reaction surveys, and the applicability of academic research, among other things.

3-3 e) ii) goals, targets, and indicators used to evaluate progress;

Banrisul evaluates Corporate Education based on key indicators: investment, number of employees who attended courses, number of employees who received certification, training hours per employee, course/event satisfaction level and course/event quality level.

3-3 e) iii) the effectiveness of the actions, including progress toward the goals and targets;

Periodically, quantitative data on trained employees are shared with the Board of Executive Officers and employees in articles published in the internal portal. Every time Banrisul identifies a position that needs to be filled, specific training is developed to prepare professionals to meet the requirements of the job as market managers, business operators and agribusiness relationship managers, among others.

3-3 e) iv) lessons learned and how these have been incorporated into the organization’s operational policies and procedures.

In 2023, several webinars focusing on Diversity, Equity and Inclusion were created, strengthening the inclusive culture in the Organization. In the New Employee Onboarding Program, strategies for welcoming new colleagues with disabilities and guidance for managers were incorporated into educational strategies, in partnership with human resources.

3-3 f) Describe how engagement with stakeholders has informed the actions taken (3-3-d) and how it has informed whether the actions have been effective (3-3-e).

Banrisul offered courses through the Training Program to advance its employees’ careers. The courses were designed through co-production organized by the Corporate University, involving the administrative units, the branch network and Banrisul Group affiliates.

401-1 a) Total number and rate of new employee hires during the reporting period, by age group, gender and region.

¹ The rates were calculated based on the total number of employees hired.

²In 2023, the number of employee hires was higher due to a civil service exam.

¹ The rates were calculated based on the total number of employees hired.

²In 2023, the number of employee hires was higher due to a civil service exam.

¹ The rates were calculated based on the total number of employees hired.

²In 2023, the number of employee hires was higher due to a civil service exam.

401-1 b) Total number and rate of employee turnover during the reporting period, by age group, gender and region.

¹ The rates were calculated based on the total number of employees dismissed.

²In 2023, the number of layoffs was high due to the implementation of the Incentivized Retirement Plan carried out in 2022, with layoffs scheduled for the following year.

¹ The rates were calculated based on the total number of employees dismissed.

²In 2023, the number of layoffs was high due to the implementation of the Incentivized Retirement Plan carried out in 2022, with layoffs scheduled for the following year.

¹ The rates were calculated based on the total number of employees dismissed.

²In 2023, the number of layoffs was high due to the implementation of the Incentivized Retirement Plan carried out in 2022, with layoffs scheduled for the following year.

403-1 a) A statement of whether an occupational health and safety management system has been implemented, including whether:

403-1 a) i) the system has been implemented because of legal requirements and, if so, a list of the requirements;

403-1 a) ii) the system has been implemented based on recognized risk management and/or management system standards/guidelines and, if so, a list of the standards/guidelines. 

Safety risk management is supported by guidelines applied by the main regulatory bodies in the sector, taking into account recommendations from specific regulations contained in manuals published by the following entities:

• Ministry of Labor and Social Security;
• Labor Prosecution Office;
• Fundacentro (a government foundation linked to the Ministry of Labor);
• Brazilian Health Regulatory Agency (Anvisa, in Portuguese);
• Occupational Safety and Health Administration (OSHA);
• National Institute for Occupational Safety and Health (NIOSH);
• American Conference of Governmental Industrial Hygienists (ACGIH); and- Collective Bargaining Agreement.

403-1 b) A description of the scope of workers, activities, and workplaces covered by the occupational health and safety management system, and an explanation of whether and, if so, why any workers, activities, or workplaces are not covered.

All employees are covered by the same worker protection initiatives in all the Bank’s units. The scope includes branch network employees, administrative staff in the General Management units and the Board of Executive Officers.

403-3 The reporting organization shall report the following information for employees and for workers who are not employees but whose work and/or workplace is controlled by the organization:

403-3 a) A description of the occupational health services’ functions that contribute to the identification and elimination of hazards and minimization of risks, and an explanation of how the organization ensures the quality of these services and facilitates workers’ access to them.

The PCMSO is responsible for the screening and early detection of possible work-related health problems, reporting them to the Specialized Safety Engineering and Occupational Medicine Service (SESMT – Serviços Especializados em Segurança e Medicina do Trabalho in Portuguese) for assessment of service quality with the PCMSO coordinating physician.

¹ It includes the following employee categories: account manager, market manager, agribusiness relationship manager and business manager (corporate, other states and government).
² It considers all of the Company’s employees.
³ Only those categories that receive performance and competence assessments as a result of the in-house training courses specified in note 1 were taken into account.

GRI 404-2 a) Type and scope of programs implemented and assistance provided to upgrade employee skills.

Training courses offered:

• Business Managers and Business Managers in Other States, which trains and develops professionals to work in the branch network, serving corporate customers;
• Account Managers, which promotes the onboarding, training and development of employees selected to work in the new role of Account Manager, developing the skills and attitudes necessary for the proper performance of their activities;
• Business Operators, which trains employees selected to work in the new Business Operator position, aiming to prepare them to serve and work with individual customers;
• Supervisors, which trains and develops professionals to work as Supervisors in the branch network, serving the Bank’s internal and external public;
• Market Manager, which trains and develops the employees selected for the new position of Market Manager in the branch network;
• Agribusiness Relationship Manager, aimed at professionals who will manage a pre-defined portfolio of customers of the respective point of service, with a business focus on middle- and high-income rural producers;
• Agribusiness Manager, which trains employees selected for the new Agribusiness Manager position, developing technical skills focused on the segment, expanding their knowledge of rural credit products and services, aiming at attracting and managing new business in this segment.
• Corporate Business Manager, which aims to train professionals to manage Large Companies accounts;
• Government Business Managers, which aims to train professionals to work at the superintendencies, in line with the Government Business Unit’s goals.

¹All courses included in these figures are considered apprenticeships

¹All courses included in these figures are considered apprenticeships

GRI 404-2 b) Transition assistance programs provided to facilitate continued employability and the management of career endings resulting from retirement or termination of employment.

The Bank focuses on continued employability and follows-up with the participants of the Pescar Project and the Young Apprentice Program in order to monitor their insertion in the job market, after completing their experience at Banrisul.

Training Program – Business Managers and Business Managers from Other States

The program trains and develops professionals to work at the branch network serving corporate customers. Its contents are focused on developing commercial and technical skills desired in a future Business Manager, such as negotiating products and services; prospecting, attracting, and following up customers through efficient tools and approaches, thus optimizing their business actions.

Training Program – Account Managers

The program promotes the integration, training and development of the employees selected to work in the new Account Manager position, developing the required skills and attitudes for performing their activities well, with emphasis on the development of interpersonal competencies focused on preparing them for building a relationship with high-income individual customers.

Training Program – Business Operators

The program trains employees selected to work in the new Business Operator position, aiming to prepare professionals to serve and address the Bank’s Individual Customers. Its contents include specific technical knowledge with efficient tools and approaches to optimize business with customers.

Training Program – Supervisors

The program prepares and develops professionals to work as Supervisors in the branch network, serving the Bank’s internal and external public. It develops and enhances basic, technical and job-related skills, as well as skills related to other positions in the bank and managerial ones, focused on planning, organizing and executing the position. Aligned to the Bank’s Strategic Planning, it aims at achieving administrative and commercial goals.

Training program – Market Managers

The program trains and develops employees selected for the new Market Manager position in the branch network, to work serving the Bank’s Corporate and Individual Customers. The program enhances and develops technical and behavioral skills, focused on negotiating, prospecting, attracting and following-up with customers. Training Program for Agribusiness Relationship Managers.

Training Program – Agribusiness Relationship Managers

These professionals will manage a pre-established customer portfolio of the respective banking stations at the Suregs, focused on medium- and high-income rural produces. This position aims to serve a customer niche who demands special and exclusive treatment.

Training Program – Agribusiness Managers

The program prepares employees selected for the new Agribusiness Manager position, developing technical skills focused on the agribusiness segment, expanding their knowledge of rural credit products and services, aiming at attracting and managing new business in this segment.

Training Program – Corporate Business Managers

The program aims to train professionals to manage large companies. It is important to note that this position serves a customer niche who demands special and exclusive treatment.

Training Program – Government Business Managers

The Training Program for Government Business Managers aims to prepare professionals to work at the superintendencies, in line with the Government Business Unit’s goals.

GRI 404-2