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A NEW LOOK TO THE

2014 REPORT

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INTRODUCTIONThis Report contains Fibria’s main achievementsin 2014 and focuses on the process ofgenerating value for society. Through thisreport, Fibria brings clear, transparent, andcomplete data to its stakeholders. In additionto this document, the company makes moreinformation available through links to theinfographic, references, and other corporate

reports.

From a market perspective and focus on a “ANew Look to the Future,” on the followingpages Fibria presents its business model, mainrisks and opportunities, strategies adopted,its operational and business developments,and how it generates value inside and outsidethe company.

The process of reducing and renegotiating thenet debt existing at the time of its inceptionin 2009 places Fibria as a strong companyprepared to walk the path of growth focusedon innovation. Today, even in the midst of achallenging economic scenario, the companyturns its eyes toward opportunities for organicand sustainable growth, strongly positioning

itself as a forestry company.

In its five-year history, the company hasremained focused on and steady toward itsgoals. On the following pages, you will learnabout the result of this work in 2014 andprospects and possibilities for the future.

Enjoy your reading!

INFOGRAPHIC

For more information, visitwww.fibria.com.br/r2014/infographic

Along with the 2014 Report, you will find aninfographic that shows the entire Fibria ValueChain - from the search process for innovative

productivity solutions and planting, to thearrival of products to customers worldwide.

Divided into two parts, the infographic brieflypresents all the information on the strategy,performance, the landscape of Long Termtargets and the highlights of 2014 in the areasof forest operations, industrial and shows

Fibria’s business strategy to reduce its socialand environmental impacts while improvingthe quality of their products and increase the

perceived value.

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MESSAGE FROM THE CEO 8

MESSAGE FROM THE CHAIRMAN 10

ABOUT THE REPORT 12

EXTERNAL READERS 16

EXTERNAL AUDIT 22

profileMAP OF OPERATIONS IN BRAZIL AND ABROADFIBRIA IN NUMBERS

VALUE CHAIN

MISSION, VISION AND VALUES 28

OUR STRATEGYSTRATEGICS PILLARS

CORPORATE GOVERNANCE

MANAGEMENTOMBUDSMAN OFFICE

FINES AND LAWSUITS

CERTIFICATIONS 36

innovationFROM THE FOREST TO THE CONSUMER

NEW BUSINESSES

CLIMATE CHANGE 54

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our stakeholdersEMPLOYEES AND OUTSOURCED WORKERSCOMMUNITIES

SUPPLIERS

INVESTORS AND SHAREHOLDERS

CLIENTS

GOVERNMENT

PRESS 68

our operationsFOREST MANAGEMENTFOREST PLANNING

FOREST LOGISTICS

INDUSTRIAL OPERATIONS

WATER

SALES 98

ECONOMIC PERFORMANCE 128

CONSULTATION WITH STAKEHOLDERS 136

GLOSSARY 140

CORPORATE INFORMATION 146

CREDITS 148

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READYTO GROW ANDDIVERSIFY

A STRONG COMPANY PREPARED TOWALK THE PATH TOWARD GROWTH,FOCUSED ON INNOVATION. LEARNABOUT THE MAIN HIGHLIGHTSOF THE YEAR IN THIS INTERVIEWWITH THE PRESIDENT OF FIBRIA,MARCELO CASTELLI.

1. In 2014, Fibria announced to the marketthat it was ready to resume growth. Whatare the main challenges for the companywhen following this path?

We closed 2014 with a strengthened imageof Fibria and much more credibility in thecapital market. This crowns a five-yearprocess of seeking financial soundness,an instrumental factor for the sustainablegrowth of the company. Presence on theDow Jones Sustainability Index, remaining onBM&FBOVESPA’s Corporate Sustainability Index(ISE), and the rise in the credit score from FitchRatings to BBB- the first level of the investmentgrade, were factors that favorably contributedto greater credibility with shareholders andcreditors. Fibria dedicated the last five years topaying off debts and regaining its investmentgrade. Now, the company has cash availablefor growth, either organic or through

consolidation. We reevaluated the company’sposition, conducted a comprehensive

assessment of market megatrends, andgained understanding of the concepts of ourbusiness in order to reposition ourselves at thisnew moment. Today we have a 9% share ofthe global pulp market. I believe that in 2015the market will be more balanced in terms ofsupply and demand, and the currency betteradjusted for exporters. Consequently, ourmain challenge is to maintain a path of growthand consolidation focused on our strategicpillars – operational excellence, growth, and

diversification – in order to maximize businessvalue, generate value for our stakeholders,and bring the expected profit to our investorsand shareholders.

2. The year was also quite turbulent, bothinternally and externally. Did these factorsinterfere with the company achieving itsgoals?As exporters, we are less influenced by thereduced growth of Brazil’s GDP and theunfavorable currency exchange, and as a self-sufficient energy company, we are less impactedby the energy rationing affecting this country.Thus, Fibria is in a strong position at a toughtime in Brazil. This encourages shareholders,

MESSAGE FROM THE CEOwww.fibria.com.br/r2014/ceo/

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creditors, and the communities that dependon Fibria. We also have good prospects for theprice of pulp, since the international demand

remains stable - which should continue to bestrong in Europe and the United States – andthe recently announced price readjustments.From an operations standpoint, it is importantto also mention a fatal accident that occurredin Espírito Santo, a fact that left us in dismay.In response to this, we expanded further ourfocus on procedures regarding the health andsafety of employees and contractors, a matterof utmost importance in all of our operations.

3. How do you carry out austerity-oriented

management while seeking growth andinnovation?We need to maximize our value on the frontswhere we already operate through continuousactions for improvement and seekingtransformational initiatives which allow thecompany to begin a new cycle of growth. Tothis end, we are going to pursue possibilitieswithin the forestry business, investing ininnovation, and also in new business, alwaysthinking of ways of doing more with less. The

Zero-Based Budget enters our continuousimprovement front with the objective ofbringing excellence to our processes whilereducing costs. It is an innovative approachthat reverses the traditional logic of thebudget building process. With this, all areasof the company are going through a stage ofrevising the budget and designing the plan for2015 from scratch, in order to reduce its costand investment base.

4. Diversifying business is one of Fibria’sgrowth pillars. How does the companyposition itself and seek new paths as aforestry company which today operates ina commodities market?We have greatly advanced our process ofbio-strategy analysis, seeking new ways toapproach research and innovative and/ordisruptive projects. Innovating in a forestrycompany such as Fibria requires a change inmindset with a lot of planning, discipline, and

connections within the business. And this iswhat we’re doing; working towards havinga versatile company, where cost reductionis directly associated with innovation andsustainable growth. As I mentioned, we

reevaluated the company’s position in order

to define the best strategic avenues based on

operational excellence, market consolidation,

and business diversification. To this end, welook for different ways of doing things and

we already have several initiatives within the

company based on bio-strategy, nanocellulose,

real estate development projects - all under an

umbrella for maximizing value and creating

admirable profit from our stakeholders

perspectives.

5. Among Fibria’s opportunities for growthare bio-energy and real estate projects.How did Fibria prepare for this path in2014 and what are your next steps?Diversifying the business requires caution

in terms of strategy. We can’t go around

doing just anything. We need to evaluate

our opportunities and risks, strengths and

weaknesses. Based on this, we secured a

partnership with the Canadian company

Ensyn in 2012 for the production of bio-oil,combining their over 30 years of experience

in that area with our vast knowledge of

the eucalyptus. The other aspect of our

diversification is real estate. The idea here is to

generate value for one of our greatest assets

– the forest. Tied in with the operational

excellence pillar is the project that foresees the

transformation of areas previously intended

for eucalyptus plantation and near several

communities in planned districts, createdwithin the concept of sustainability and well-

being. This does not compete with Fibria’s

commitment to sustainability, because we

seek to collaborate with the orderly growth

of cities, leaving the area structured so that it

does not negatively impact the environment.

Today, growth and diversification are key

issues in the pulp industry. We are part of an

extremely fragmented commodity market in

which there is a continuous search for low

costs. Fibria is prepared and this growth is a

question of evaluating the best opportunities.

The road has been paved.

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MESSAGE FROM THE CHAIRMAN

1. Besides transparency and the search foradmirable profit, corporate governance is oneof Fibria’s main values. What is the importanceof this factor to the success of the company?In 2014, we had many governance-relatedgains, such as the approval of internalpolicies based on anti-corruption law and

the publication of our risk management andcompliance policy. Our risk management toolhas already become a reference for othercompanies. In addition, the company, bothin the Executive Board and in the Board ofDirectors, expanded its discussions about thefact that the future we want to build for Fibriais directly linked to its ability to innovate. Basedon this concept, one of the company’s maininitiatives is the Innovation Committee, whichadvises the Board, lending a strategic marketview to its ongoing projects. The result is that,in the last two years, work in innovation haschanged focus from incremental to disruptive,creating new paths and possibilities. Thisleaves me convinced that we are on the righttrack for designing the future.

2. How is sustainability associated with Fibria’sbusiness strategy and financial results?Our history has been marked by severalachievements, mainly related to sustainability.As a forestry company, the balance betweeneconomic, social, and environmental gains issomething that permeates Fibria’s corporate

culture and is directly linked to all ourbusiness decisions. In industrial operation,we work with cutting-edge technology. Inour forests, we invest in forestry certificationsand management innovation. In addition,we may cite initiatives involving other partsof society, such as including social programsfor land development to generate revenueand engagement in movements that fightfor land rights in southern Bahia. All of thisis the result of a corporate vision centeredon the search for admirable profit, seekingnot only to bring return to our shareholders,but also bring benefits to our stakeholders,consequently improving the company’sreputation. I normally say our sustainabilityteam has over 17,000 people today – our own

GOVERNANCE AND INNOVATION ON THE AGENDA

Transparency, innovation, solidgovernance, and planning focused onbusiness sustainability. Today, this is therecipe for maintaining its reputation andgenerating value for its stakeholders. JoséLuciano Penido, Fibria’s Chairman of theBoard, talks about how the company facesthis reality.

www.fibria.com.br/r2014/chairman/

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employees and contractors who are engagedand work within a corporate culture withinterdependence and co-authorship towardsthe best result for our business.

3. Have the projects being developed todayproved to be effective in countering theimpacts caused by drought and excess rain?We have worked hard with our InnovationDepartment to prepare ourselves for the

possible impact caused by extreme climateevents. One aspect is selecting clones thattolerate environmental stress, such as thephysiological disorder in the eucalyptus insouthern Bahia. This is a new problem andthis is why our classic genetic improvementprogram is focused on identifying clonesincreasingly better adapted to new recordedenvironmental conditions, such as frequentalternating between excess rain and drought.Another very interesting project was the

development of a map of the places wherephysiological disturbances have occurred.Today, we have much deeper knowledgeof all the affected areas in southern Bahiaand northern Espírito Santo, and we knowhow to distinguish which areas are more orless susceptible to the problem. This way,plantation planning is safer, since we havebeen able to better define which clone will beplanted in each region, decreasing exposure toevents related to climate change. In addition,the network of weather stations and otherexisting next-generation equipment, suchas flow towers, monitoring environmentalconditions as well as their effect on thegrowth of our plantations, offering a betteranalysis for company decision making,allowing us to better prevent and mitigate therisks associated with climate change.

4. How can the shifting of innovation projectsand the search for new business opportunitiesbeyond pulp help in the sustainability of the

business?In both the Executive Board and the Boardof Directors, we increased our convictionthat the future we would like to build forFibria is directly associated with our ability

to develop innovation. Today, we are theonly Brazilian industrial company with anInnovation Committee as part of the Board,which reinforces our conviction that we are ata time to rethink the pulp industry. In 2011,we defined a new governance strategy forour innovation process, and, through thischange, we are at a turning point in the workin this area. We have decreased the focus onincremental innovation and we use this energy

in two other areas: radical innovation, whichseeks leaps in the current business, pulp, anddisruptive innovation, which works on newbusiness alternatives in other market niches.With this, we have greatly advanced towarddeveloping products that allow us to generategains for the client and across the productionchain. In 2015, we will be able to consolidaterevenue through differentiated pulp products,and we should advance even more in ourradical and disruptive innovation actions.

5. In your opinion, how have the actionsdeveloped by Fibria taken into account theconcerns and expectations of its stakeholders?For us, reputation is a real value, and becauseof this, it should be an issue present in alldimensions of the business. At Fibria, weadopted the concept of admirable profit,and through our actions over the last fiveyears, we have managed to gain recognitionand generate value for stakeholders. We areleaders in an important sector of the renewableindustry and one of the companies in thatsector with the lowest cost of production in theworld. Today we are working on implementingnew technologies and processes whichwill help redesign the industry. All focusingon developing people, generating valuefor neighboring communities, formattingproducts according to the needs of the clients,and with a strengthened ability to positionitself in the face of market opportunities.

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ABOUT THE REPORTPrepared according to the G4 guidelinesof the Global Reporting Initiative (GRI) –Comprehensive level – and the framework ofthe International Integrated Reporting Council(IIRC), the 2014 Report of Fibria Celulose S.A.presents the company’s main achievementsand challenges in the areas of strategy,corporate governance, economic and financial,

social and environmental responsibility, andtheir interrelations, during the reporting period

between January 1 and December 31, 2014.

The information in this report updates the datafound in the 2013 report, covering all companyunits in the country: Aracruz (ES), Jacareí (SP),and Três Lagoas (MS); the forestry units andoffices in Bahia (Posto da Mata), in EspíritoSanto (Conceição da Barra and Aracruz), in

Mato Grosso do Sul (Três Lagoas) and in SaoPaulo (Capão Bonito and Vale do Paraíba),

www.fibria.com.br/r2014/about-the-report/

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and the pulp shipping operation in the Portoof Santos (SP), as well as its three commercialoffices outside Brazil. Since the companiesVeracel (BA) and Portocel (ES) are jointly heldwith other companies, they are not includedin this material.

The structure of this publication is based onthe most relevant topics in the company’s

materiality processes, updated at the endof 2013, and shows the moment of Fibria’schallenges and opportunities in view of itsmain stakeholders (employees, communities,suppliers, investors and shareholders, clients,civil society, government, and the press). The

following are the topics identified and mostcommonly mentioned by stakeholders:

ABOUT THEREPORT

Certifications,

industry voluntarycommitments, and

regulations.

Local development

and impact oncommunities.

Business

expansion.

Financial

management.

Social and

environmentalmanagement of the

supply chain.

Value generation

through innovation.

Forest

management:biodiversity,

land use.

Government

relations.

Transparency

and stakeholderengagement.

Water use.

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The Materiality Matrix was built basedon interviews with Fibria executives,representatives from stakeholder groups(clients, NGOs, academia, government, media,communities, suppliers, employees, investors,sponsored suppliers, wood suppliers), internal

material (such as the risk matrix), industrystudies, and online questionnaires.

Besides accounting for Fibria’s actions andchallenges throughout 2014, the objective ofthe Report is to describe, with transparency,future projects and actions involving thegovernance of sustainability, evaluating theissues most relevant to business continuityfrom the point of view of stakeholders(internal and external). Material topics are partof the strategic planning built by the companyin 2014 and will be strengthened throughout2015.

The Bureau Veritas Certification, as wellas internal auditing processes and othermanagement mechanisms, assures the

reliability of the information (learn more in theLetter of Assurance). No significant changeswere found in terms of scope, boundaries, ormethods of measurement. Fibria followed themethodologies of the International IntegratedReporting Council (IIRC) and of the GRI, version

G4 Comprehensive level, when preparing itsreport.

Besides the printed version, a more conciseand visual online version contains detailedinformation about company performance. It isavailable on the website - www.fibria.com.br/ r2014 – which may be accessed on any mobiledevice. This report also includes an infographicwith updated information about

Send questions or suggestions by e-mail [email protected].

IN THE FOLLOWING SECTION YOUWILL LEARN MORE ABOUT OUREXTERNAL READERS AND WHATTHEY THINK ABOUT THIS REPORT.

In addition to these topics, the report handles, in greaterdepth, the impact of climate change and how it affectedthe business scenario in 2014. The subject was highlighted

by the organization’s leadership due to the challenges andopportunities generated by climate instability.

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FIBRIA’S REPORT IS EMBLEMATIC.

NOT ONLY FOR ITS CONTENT, BUTFOR WHAT THE COMPANY HAS COMETO REPRESENT IN BRAZILIAN ANDINTERNATIONAL SOCIETIES.

One of the prerogatives of this image is its abilityto represent a synthesis while maintainingits enigmatic, provocative, and mobilizingcharacteristics. In Fibria’s case, it indicates a verycomplex corporate concept and does not fallinto the temptation of oversimplification. The

foundations of the company’s business modelare clearly exposed in the Report. Conceptssuch as generating value in society, lookingto the future, innovation, the commitment totransparency, operational excellence, and truly

integrating the pillars of the new economy(to avoid directly using the worn out conceptof sustainability), are arranged in an edifyingmanner.

The emblematic nature of the company isaudaciously illustrated in the infographic,which integrates the organization’s variousdimensions. They also appear in the differentsections of the Report. The introductorywords of the President and the Chairman ofthe Board expose how much the concept ofintegration is rooted in organizational culture.

A broad spectrum of seemingly contradictoryconcepts is mentioned, such as austerityand the ability to innovate, focus and truerelationships with the large number of needsof various stakeholders. As the company’s

EXTERNAL

READERRoberto S. Waack

Founder of Amata S.A. and Chairman ofits Board of Directors. Board member atGRI, IBGC, Ethos Institute, WWF-Brazil,and ISE Bovespa. He was a member ofthe Board and Chairman of the FSC® -Forest Stewardship Council®, and of otherorganizations related to sustainability,climate change, and forests. He was thePresident of Amata, Orsa Florestal, and anexecutive of pharmaceutical companies.A biologist with a Master’s degree inBusiness Administration from FEA-USP.

www.fibria.com.br/r2014/external-readers/

To keep evolving in the preparing of reports and in the accountability for their stakeholders,

every year Fibria submits this material to the reading and evaluation of important figuresin the area of sustainability. These opinions contribute to the constant evolution of thecompany in its business and its form of communication with the various stakeholders. Theassessments are published in full, without interference by Fibria of any kind.

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profile, strategy, and operations are described,these concepts are continuously revisited ina natural, as opposed to compartmentalized

manner, indicating that the true integrationof economic, social, and environmentalvalues are foundations sustaining the visionof shareholders and day to day operations. Itis a testament to the coherence between thecompany’s discourse and its practice.

Main management tools are covered ina balanced manner, such as the role ofcertifications, sustainability indexes, as wellas reporting instruments and their derivatives,

such as the materiality matrix. The Reportdescribes the effective use of these toolswhen managing forests, factories, and theirsurroundings. They do not appear to becorporate tools merely mentioned for show.The iterant balance, like a swinging pendulum,between short-term demands and the “look tothe future” is present in the various sections ofthe Report. The relationship between what isdone today and the long-term consequencesare clearly described. The Report seeks to aligntangible and intangible assets to the extent

that they hover about the company’s diverseactivities. It handles positive and negativeexternalities with transparency and courage,describing the company’s willingness to learnfrom both painful and victorious experiences.The pursuit of admirable profit and how

it relates to the company’s reputation isaddressed openly and honestly withoutdifficulty. One emblematic point is the vision of

the supply and value chains, extended to landmanagement and a wide spectrum of capital,following the instructions for the framework ofan Integrated Report.

The text is quite instigating in that, as acompany producing a classic commodity, itdeals with the search to “decommoditize” viadisruptive and collaborative innovation. It isevident that the company plays a leadershiprole in the technological field by incorporating

natural capital such as water, biodiversity,climate, and social capital, such as theinclusion of diverse communities with whichthe company interacts, into the worlds offinance, production, and competitiveness.

However... (always this provocative word!) thewealth of information brought to the publiccreates a new expectation: that there shouldbe more forceful treatment of externalities andtheir effects on the value of the organizationand society. The quality of what Fibria does

and the inspiration that the corporate visionentails demand this step. This is the level ofexpectation that such an emblematic enterpriseprovokes. Could this be the missing piece ofFibria’s puzzle?

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FIBRIA’S 2014 REPORT BEGINSWITH A CLEAR STATEMENT FROMTOP MANAGEMENT THAT THEIRGOAL IS “ADMIRED PROFIT”:THAT WHICH NOT ONLY BRINGS

RETURNS TO SHAREHOLDERS BUTALSO BENEFITS TO STAKEHOLDERS.AND THROUGHOUT THIS REPORT,WE OBSERVE A RICH TAPESTRY OFEXAMPLES OF HOW FIBRIA SEEKSTO INTEGRATE SUSTAINABILITYCONSIDERATIONS IN THECOMPANY’S BUSINESS’S STRATEGYIN ORDER TO DELIVER HOLISTICPERFORMANCE BEFITTING WHATI CALL “CORPORATION 2020”, ACORPORATION FIT FOR THE FUTURE.

EXTERNALREADERProfessor Pavan Sukhdev

Founder and president of GIST Advisory,a consulting firm that helps between 2011and 2014, he was a visiting professor at Yale University (USA), and was awardedthe 2011McCluskey Fellowship. In 2012,

he was named Goodwill Ambassador ofthe United Nations EnvironmentProgramme (UNEP), where he coordinatedtwo projects on green economy: the TEEBreport (The Economics of Ecosystemsand Biodiversity) and the Green EconomyInitiative. He chaired the Council AgendaEcosystems and Biodiversity for theWorld Economic Forum in Davos between2009 and 2011 and today sits on theboard of the Conservation International

(Washington), Global Reporting Initiative- GRI (Amsterdam), Gulbenkian OceansInitiative (Lisbon), TEEB (Geneva) andStockholm Resilience Centre (Stockholm).

Holistic performance - in terms of its direct andindirect impacts - has been measured by Fibriasince 2009. This report - for a year of good re-venue growth and strong profit growth - takesthis emerging tradition of holistic and integra-ted reporting a step further, with a focus on in-

novation as a driver for both sustainability andprofitability.

Fibria sets high standards across business ma-nagement, governance and risk management.These risks include third-party risks: social andenvironmental issues and impacts, the healthand safety of employees, and the quality ofproducts and services. Fibria’s good governan-ce and risk management is further reinforcedby an active and effective Ombudsman.Three important business threats faced by thecompany are from commodification, concen-

www.fibria.com.br/r2014/external-readers/

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tration and climate change. A new ‘Technology

and Innovation’ unit was set up in 2014, re-cognizing and addressing the business threatfrom commodification in an industry in whichFibria already has a dominant market share, at9% of the global pulp market. Many examplesin this report illustrate Fibria’s journey “from vi-sion to action”, both in its strategy (eg: radicalinnovation driving leaps in the current pulp bu-siness, and disruptive innovation for new busi-ness alternatives in other market niches), and inits operations (eg: 90% of energy used in pulpproduction at Fibria’s industrial units is renewa-ble, from wood and liquid biomass).

Climate change threats to productivity arebeing addressed with genetic improvement ofeucalyptus, identifying the best species adap-ted to worsening climate conditions.

Fibria understands that today, growth is stilla key issue in the pulp industry. Based on thisassessment, the company has worked meticu-lously to define and invest in pillars that drive

growth – innovation, operational excellence,economies of scale, diversification. At the sametime, six major goals are clearly laid out in thearena of sustainability, including related corpo-rate targets for reforestation, improved carbonsequestration and reduced land-use for pulpproduction.

In terms of Natural Capital impacts, Fibria hasretained an impressive record: a positive car-bon balance, starting with a net sequestration

of 3.3 million tCO2eq from forestry operations.Fibria has also evidenced, in this 2014 report,several examples of nurturing and building Hu-man Capital and Social Capital. For example, itsForestry and Industrial Learning program trainsprofessionals in partnership with Senai and du-ring 2014, a total of 119 young people beganthe program, 86 graduated, and 18 were hired.Fibra has diverse income generating programsand social actions serving over seven thousandfamilies. I believe Fibria’s large inventory ofimpacts on natural, human and social capital

could perhaps be aggregated by capital cate-

gory, valued, integrated and presented more

succinctly in the form of an “Integrated Profitand Loss” or an “Integrated Value Added” re-port in future.The “Infographic” in Fibria’s 2014 report is auseful device, but it needs to be made easier toread and absorb. I believe it needs to be seg-mented according to high-level topics (businessareas, strategies, priorities) with each of thesehigh-level topics linked together in an overar-ching and simplified ‘summary’ infographic,which then telescopes down one or two layersin separate sheets with detailed commentary.This could make the “infographic” communi-cate with more power and ease to investors,media, and the general public. The approachof identifying “materiality issues” based on sur-veys is good in principle, but surveys should bedesigned to identify and align with stakeholderexpectations and priorities, including those ofshareholders.

Fibria’s integrated annual report could alsobenefit from a ‘dependencies’ analysis which

evaluates and positions Fibria’s business stra-tegy in the context of all major risks from thecomplex and changing global environment. Cli-mate change risk has already been evaluatedand responded to well, as stated above, butsome other global megatrends (eg: changingdemographics and lifestyles, increasing urba-nization, consumer awareness and increasingvalue chain accountability, and ecological scar-cities & disruptions especially in freshwater su-pply) need to be sized, evaluated and respon-

ded to as well.

Fibria today has become a large and importantlink in a long global value chain which begins atthe local forest and extends all the way to con-sumers of various types of paper used in educa-tion, hygiene, and health all around the world.Its integrated report for 2014, “A New Look tothe Future” is a commendable step towards thecompany’s goal to generate “admired profits”into the forseeable future and to report themtransparently and in an integrated manner to

all its major stakeholders.

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Bureau Veritas Certification Brazil (Bureau

Veritas) was engaged by Fibria Celulose S.A.(Fibria), to conduct an independent assessmentof its Sustainability Report (hereinafter referredto as the Report), encompassing assessmentof the content, quality, and boundaries of

same with regard to the year 2014. The

information published in the Report is thesole responsibility of Fibria’s management.Our responsibility was to provide independentverification, in accordance with the scope ofwork defined below.

INTRODUCTION

A reasonable level of assurance1 was providedand conducted according to the Guidelinesand Principles2 of the Global ReportingInitiativeTM GRI-G4 (2013).

Excluded from the scope of this work was anyassessment of information related to:

• Activities outside the defined assessmentperiod;

• Statements of position (expressionsof opinion, beliefs, goals, or futureintentions) on the part of Fibria;

• Economic and financial informationcontained in this Report which has beentaken from financial statements verifiedby independent financial auditors.

SCOPE OF WORK

1. Interviews with the personnel responsiblefor material issues and involved in theReport content;

2. Traceability of data published, searchingthe its sources of the same and thereliability of management systemsinvolved;

3. Verification of performance datarelateding to the principles that ensurethe quality of the information, pursuant

to the GRI G4 guidelines;

4. On-site visits to Fibria’s Units at Aracruz(Espírito Santo State), Jacareí (São PauloState), Três Lagoas (Mato Grosso do SulState) and the Central Administrationoffice located in the city of São Paulo;

5. Analysis of Fibria’s stakeholderengagement activities;

6. Evaluation of the method used to definematerial issues included in the Report,taking into account the sustainability

context and the scope of the informationpublished.

METHODOLOGY

The Assurance covered the following activities:

INDEPENDENT ASSURANCE

STATEMENTBUREAU VERITAS CERTIFICATION

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1. The Bureau Veritas independent assessment protocol is informed by the ISAE 3000 International Standard AssuranceEngagements and the reporting requirements set out in the GRI G4 guidelines

2. Materiality, Stakeholder Inclusiveness, Sustainability Context, Completeness, Balance, Comparability, Accuracy,Periodicity, Clarity, and Reliability

The Fibria Report verified by us is composedof two publications: one in electronic meansand one physical (paper), which focuses onthe narrative and the performance dataassociated with the material themes; andthe other, only in electronic means, containsmore comprehensive performance data andinformation on non-material themes. Bothare available on the Report 2014 website(www.fibria2014.com.br).

Additionally, Fibria developed a condensedversion of the Report as an infographic that,in our opinion, demonstrates on a reliableway the company´s processes.

With regard to the verification principles ofAccuracy and Reliability of Data, we clarifythat our scope was limited to the data relatedto the ten most material issues as shown inthe index of the Report.

• Fibria presents its Report based on

material issues that reflect the study“Review of material issues of December2013”. In our view, the study remainsvalid in the light of the GRI Principle ofMateriality, as it continues to develop theten major material topics, which enablesthe reader to compare it with informationin the previous Report;

• The Report provides a consistentaccount the internal initiatives of

related to promotining, training andimplementatining the anticorruption andantitrust policies of the company;

• The set of qualitative and quantitative dataconcerning the company’s performanceindicators was carried out for the thirdyear through a system called “GestãoOn Line” (GOL), which standardizes andensures historical consistency of thedatadisclosed;

• Fibria developed a tool to enhance itscommunication and engagement withsuppliers, the “Suppliers’ Portal”; thisstructures suppliers’ data, making itmore reliable and accurate. The Portalwas recently launched and is still inimplementation.

• With regard to the data related to

Human and Organizational Development,information regarding personnel is alsorestructured in the SAP platform, makingreliable data collection possible, andso reducing the need for manual datahandling and manipulation;

• We evaluated the work of the SustainabilityCommittee, associated to the Board ofDirectors, including recommendationsrelated to biotechnology, the Rural

Environmental Register (CAR), modelsof regeneration Legal Reserve (RL) andwater;

• In its work in the supply chain weevaluated a project (Value Chain) begunin 2014 with the aim of diagnosingsuppliers in a range of matters related tosustainability performance;

• Concerning the development and impact

of investments in infrastructure andservices offered in local communitiesand economies (GRI-EC7 indicator),information contained in the Report islimited to investments in infrastructure,there being no data related to the servicesdirectly offered or supported by Fibria;

TECHNICAL REPORT

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• In 2014, wereviewedFibria’s Code ofConduct, which now extends to its supplychain. We acknowledge the extensivework undertaken to disseminate the newCode to suppliers of the company;

• Very little information was found in theReport around the measures of controland monitoring of the impacts in thecommunities (material issue), caused byforest stewardship;

• During our assurance, we witnessed alimited role of the Internal SustainabilityCommission (CIS);

• Fibria presents indicators for long termtargets, providing increasing clarity to thereaderon their performance;

• The Report provides a satisfactoryaccount of expectations that weregenerated in the previous Report. Thepresentation of the achievement againsttargets published in 2014, enables thereader to analyze Fibria’s evolution in themanagement of the commitments made;

• We note that recommendations madein our previous Statement are partiallyaddressed by Fibria, and maintain

those recommendations not yet carriedout, whilst also presenting some newrecommendations for the company.

• Discuss the role of the InternalSustainability Commission (CIS), createdto work on internal processes regardingsustainability (recommendation from theprevious cycle);

• With regard to the impacts of foreststewardship in communities, werecommend that the Report enhancesaccounts for measures taken and themethods of monitoring these impacts;

• Make efforts to report in a clear mannerthe investments offered or supportedby Fibria in local communities and/oreconomies, pursuant to the GRI-EC7indicator.

RECOMMENDATIONS

Inconsistencies identified through theassurance have been satisfactorily corrected,so that the data and information presented inthe Report adhere to the principles of contentand quality of the Guideline GRI-G4.

As a result of our assurance, we conclude thatthe Report meets the criteria set out for ‘Inaccordance’ reporting with the GRI-G4 at theComprehensive level.

CONCLUSION

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Bureau Veritas Certification is an independentprofessional services firm specializing in Quality,Health, Safety, Socialand EnvironmentalManagement, with more than180 years’experience in independent assessment.

No member of the assessment team has anycommercial links with Fibria. We performedthis assessment independently and understandthat there was no conflict of interest.

Bureau Veritas has implemented a Code ofEthics throughout its business, in order topreserve high ethical standards among its staffin the performing of their activities.

At the end of the assessment, a detailed reportwas drawn up, showing all the topics verified,any deviations found, corrective action takenand opportunities for improvement. ThisReport ensures the traceability of the processand is kept as a Bureau Veritas managementsystem record.

DECLARATION OF INDEPENDENCE AND IMPARTIALITY

CONTACT Bureau Veritas Certification is available for furtherclarification on www.bureauveritascertification.com.br/faleconosco.asp or by telephone (55 11) 2655-9000.

Alexander VervuurtLead auditor Assurance Sustainability Reports (ASR)Bureau Veritas Certification – BrasilSão Paulo, April 2015.

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PROFILEBrazilian company and world leader ineucalyptus pulp production, Fibria focuses itsoperation on forest plantations in the statesof Bahia, Espírito Santo, Mato Grosso do Sul,Minas Gerais, Rio de Janeiro, Rio Grande doSul, and São Paulo.

With over 17,000 workers (own employeesand outsourced workers), 846,000 hectaresof forests – 284,000 of which are intendedfor environmental conservation – today Fibria

has a production capacity of 5.3 million tonsof pulp per year. Besides its own forests,the company uses wood supplied by 2,148contracts, corresponding to 71,272 hectaresof eucalyptus plantations.

Its industrial mills are strategically located inTrês Lagoas (MS), Aracruz (ES), Jacareí (SP),and Eunápolis (BA), where Veracel is located,which is a joint operation with Stora Enso. Inaddition, in partnership with Cenibra, Fibriaoperates the only Brazilian port specializing inshipping pulp, Portocel (Aracruz, ES).

Present in the main consumer markets, thecompany exports to over 40 countries throughdistribution, commercial and representative

offices in North America, Europe, and Asia.

www.fibria.com.br/r2014/profile/

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All Fibria units are certified by the ForestStewardship Council® (FSC® ), and byCERFLOR®/Programme for the Endorsementof Forest Certification (PEFC). The company ispart of the Dow Jones Sustainability Indices(Global and Emerging Markets categories),of the New York Stock Exchange (NYSE),

and of BM&FBOVESPA’s CorporateSustainability index.

PROFILE

Aracruz

Veracel

Posto da Mata

Conceiçãoda Barra

Vale doParaíba

São PauloCapãoBonito Santos

Jacareí

TrêsLagoas

Capão do Leão

RS

MS

SP

MG

RJ

ES

BA

Forest

Industrial Units (Pulp)

Port

Office

Distribution Centers

Belmonte

Caravelas

Portocel

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CENTRAL ADMINISTRATIONSão Paulo - Brazil

DISTRIBUTION CENTERSEuropeFlushing - The Netherlands

Sheerness - UKLa Pallice - FranceTarragona - SpainLivorno - ItalyMonfalcone - Italy AsiaChangshu – ChinaKaohsiung – Taiwan

REPRESENTATIVE OFFICEHong Kong - China

SALESAND DISTRIBUTIONSUBSIDIARIESMiami - USALustenau - Austria

30


FIBRIA IN NUMBERS

Latin America

Asia

North America

Europe

SALES DISTRIBUTIONBY REGION IN 2014

41%

25%

10%

24%

CLIENTSATISFACTION 83%

NUMBER OFCOUNTRIESWHERE THECOMPANYHAS CLIENTS 42

PRODUCTION 2014*Jacareí

Três Lagoas

Aracruz

50% Veracel

TOTAL

1,085 1,2762,3565575,274

*in thousand tons (t).Numbers rounded

Specialty paper

Printing and writing

Tissue

SALES BY ENDUSE IN 2014

51%31%

18%

OWNERSHIP STRUCTURE

www.fibria.com.br/r2014/fibria-in-numbers/

VotorantimIndustrial S.A.

BNDESParTreasury

StockMarket

Free Float

29.42% 30.38% 0.06% 40.14%

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Fibria is an important link on a long valuechain which begins at the forest and extends

all the way to end consumers of various typesof paper used in education, hygiene, and he-alth. Present in global markets, where there isa growing demand for social and environmen-tal responsibility along the production chain,Fibria seeks to relate to all of its stakeholders,including countless rural communities surrou-nding operations.

Beginning with research seeking improve-ments in inputs, moving on to the plantation,

harvest, transport, production, and sales of its

products, the company works constantly on

consolidating the concept of admirable profitand recognition in society. To this end, during

the entire process, the company concerns

itself with indicators covering the responsi-

ble use of natural resources, valuing human

resources, concern for client prosperity, and

producing products valuable to the client, all

within strict ethical standards and on a path

offering contributions to society.

VALUE CHAIN www.fibria.com.br/r2014/value-chain/

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We believe in constructive relationships based

on bonds of partnership and trust, commit-

ment and respect. We are moved by vital ener-

gy, determination, and a passion for makingviable products which are essential to quality

of life, health, education, and culture. We seek

recognized admirable profit that generates be-

nefits for everyone, beginning with the sustai-

nable use of resources.

MISSION, VISION,AND VALUES

MISSION• Develop the renewable forestry business

as a sustainable source of life.

VISION• Consolidate the planted forest as a produ-

cer of economic value. Generate admira-ble profit, associated with environmentalconservation, social inclusion, and theimprovement of quality of life.

VALUES• Soundness: Seek sustainable growth while

generating value.• Ethics: Operate responsibly and with trans-

parency.• Respect: Respect for people and willing-

ness to learn.• Entrepreneurship: Grow with the courage

to do, innovate, and invest.• Unity: The whole is stronger.

www.fibria.com.br/r2014/mission-vision-values/

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In 2014, Fibria received important recognition, such as the “Most SustainableCompany of the Year,” on the Exame de Sustentabilidade guide, and the bestcompany in the Paper and Pulp Industry on the Época Negócios 360° and

Melhores da IstoÉ Dinheiro guides, and the best company in Production ChainManagement in the As Melhores da Dinheiro Rural yearbook.

RECOGNITION

IN THE NEXT SECTION, LEARN MOREABOUT THE STRATEGIC PILLARS FORFIBRIA’S BUSINESS.

Access the online versionof Report 2014 to see acomplete list of Fibria’sawards in 2014.

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OUR STRATEGY

As part of a fragmented sector, where the

low-cost production scale is an extremely

important factor, Fibria understands thattoday, growth is a key issue in the pulp

industry. Based on this assessment, the

company worked meticulously to define

pillars that drive growth, analyzing both the

global and external scenario and the scenariowhere it operates.

STRATEGIC PILLARS

GOVERNANCE www.fibria.com.br/r2014/our-strategy/

www.fibria.com.br/r2014/strategic-pillars/

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Fibria is a company that is always looking for innovation and new business

opportunities: characteristics which are very important to our strategic value. Welive in a very volatile world today and Fibria needs to stay flexible and always beready to make decisions.

Vinícius Nonino, Director of Strategy and New Businesses

OURSTRATEGY

Every company’s strategic line of thinkingshould be to seek the best ways of combiningstrengths with market opportunities, creatingbusiness leverage, because this will be thecombination that builds the best strategy forthat company.

Contrary to how it may seem, the definitionof these pillars is not based on an abstract

concept, but rather on a set of analysesand connections that bring togethermarket trends, the scenario of threats andopportunities in the sector (for Fibria as well

as its competitors), and assessment of the

company’s own strengths and weaknesses.

Fibria is part of an industry based on the

forestry business. This is why its strategic

pillars should take into account social and

environmental issues that can influence

productivity, reduction in operating costs to

ensure the financial appeal of its commodity,and an ongoing search for new ways to

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Directly related to the need to keep costslow, the production scale, and the product’scompetitiveness, this strategic pillar helps thecompany look constantly at the efficiencyof its industrial and forestry operations, anddifferent ways to keep the cost of the product

as low as possible. It includes actions in theforests (projects for mechanizing harvesting,

reducing the asset base, etc.), a vision of an“industry of the future” (which seeks the bestpractices around the world for reusing wasteand maintaining operational stability), as wellas reducing negative externalities generated byits operations.

OPERATIONAL EXCELLENCE

Fibria is embedded in a fragmented commoditymarket, where the need for competitive costsis vital. Growth and consolidation is requiredto achieve this. Growing organically includesbuilding a forest base which, in the future,will have consolidation value and createopportunities for new businesses. Anotherimportant point is decision-making flexibility– a very important characteristic in a relativelyvolatile market.

GROWTH

Decisions toward growth via organicexpansion, mergers, and acquisitionsdepend on market conditions andwindows of opportunity created in thechallenging and fragmented marketin which Fibria operates. The projectexpanding the Três Lagoas* (MS)unit, which is in the technical studyand evaluation phase, lies within thisconcept.

THE PILLARS

On May 14th , 2015, Fibria announced the construction of new pulp production line at Três Lagoas Unit (MS).

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DIVERSIFICATION

Among the initiatives in progress worth noting is the establishment of analliance with the American company Ensyn Corporation (Ensyn), as well as otherprospects on the routes defined as priorities in Fibria’s bio-strategy studies.In port development, the studies which stand out are those toward expandingPortocel, the private terminal specializing in pulp shipment and located in Barrado Riacho (ES).

This pillar is linked to innovation projectsand the search for new opportunities forexpansion. Fibria is working hard to diversifyits business and deliver solutions outside theconcept of commodity, for its current productsas well as new products and markets. But

diversifying business requires strategic focus,therefore, it is one of the goals guiding Fibria.

Today, the company has established businessmaps and plans – all embedded under a valuemaximizing umbrella with effective benefit forFibria. Among these plans are bio-strategy,diversification in logistics, and real estatedevelopment projects.

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TARGETS ACTIONS BENEFITS

1. Reduce by one third theamount of land needed for pulpproduction.

Conventional genetic improvementof eucalyptus, improvement ofenvironmental management andincreased productivity.

• Less land concentration• Greater availability of land for other

uses.• Increased competitiveness and greater

return for shareholders.

2. Double carbon sequestration

from the atmosphere.

Increase in forest areas and in therecovery of degraded areas withnative species. In 2014, there was anincrease in greenhouse gas emission

due to increased diesel consumptionin forestry logistics and thereforereduced net carbon sequestration.

• Reduce concentration of greenhouse

gases in the atmosphere.

3. Promote environmentalrestoration of 40,000 hectares ofits own areas between 2012 and2025.

Planting native forest speciesand stimulation of natural forestregeneration. In 2014, a total of 2,933hectares were recovered.

• Increased availability of habitat forwildlife and flora

• Biodiversity conservation, especially ofendangered species

• Expansion of environmental services• Carbon sequestration, availability and

quality of water, among others.

4. Reduce by 91% the volumeof solid industrial solid wastedisposed in landfills.

Valuation of waste, producingforestry inputs, and optimizing theenergy matrix by replacing fossilfuels with waste. In 2014, Fibria

expanded the reuse of solid wasteand reduced the volume of wastedisposed in landfills. The TrêsLagoas unit began reusing 62.6% ofits industrial solid waste, comparedwith 23.2% in the previous year.

• Reduction of impacts and risks caused

by industrial landfills.• Increased eco-efficiency.• Reduction of cost of waste disposal

and replacement of inputs.

5. Achieve 80% approval inneighboring communities.

Increase in the approval ratefrom neighboring communitiesby improving the quality ofthe relationship, inserting thecommunity in the company’svalue chain, and expanding localdevelopment projects.

• Amicable coexistence withneighboring communities, creatingsuitable environment for localdevelopment.

6. Help the community render70% of the income-generatingprojects self-sustaining with thesupport of the company.

Expand the Rural Land DevelopmentProgram (PDRT) model, promotingtechnical and management trainingand attracting partner support.

• Social inclusion of the communities,

reducing social and economicvulnerability.• Community taking a role in its own

development.• Increased management and technical

qualification of the population.

EXPECTEDEVOLUTION INPRODUCTIVITY

20152010

0

16

15

14

13

12

11

10

9

8

2020 2025

P R O

D U C T I V I T Y

PLANTING YEAR

In order to guide the business strategy and ensu-re the company’s continuity and sustainability, in2011 Fibria instituted a set of long-term targetsindicating the paths to be taken by the companythrough 2025.

Established by the Sustainability Committee andwith the support of the Board of Directors, thesesix targets are directly associated with the stra-tegic pillars and the material topics identified byFibria in 2013.

LONG-TERM TARGETS

10.6 10.9

12.1

15

Target 2025

Target 2014

2014

Baseline (2011)

Target 2025

Target 2014

2014

Baseline (2011)

Target 2025

Target 2014

2014Baseline (2011)

Target 2025

Target 2014

2014Baseline (2011)

Target 2025

Target 2013

2013

Baseline (2011)

Target 2025

Target 2014

2014Baseline (2011)

c e l l u l o s e

t o n

p e r h e c t a r e

/ y e a r

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CORPORATE GOVERNANCE

Fibria has a corporate governance structure

based on transparency, clearly defined roles,administrative independence, high qualitytechnical and managerial staff, fair treatmentof shareholders, and accountability.

Learn more athttp://fibria.infoinvest.com.br,tab Corporate Governance

It is the responsibility of Fibria’s Boardof Directors to establish and update thecompany’s mission, vision, and values, aswell as its strategic guidelines. Based onthese guidelines, senior management works

on policies and goals that are brought tothe Board and its Advisory Committees for

assessment and possible approval. All membersof the Board of Directors undergo a continuingeducation process, which includes an annualvisit to operations, semiannual lectures aboutscenarios, markets, and corporate governance,

as well as workshops on strategy.

BOARD OFDIRECTORS

Is composed of nine members, two independent (no linkswith shareholders signatory the shareholder agreement,according to the regulations in effect), and an equal numberof alternates. Its members meet at least four times a yearand should participate in all Board meetings and those ofthe Committees to which they belong. The minutes of theBoard of Directors meetings, as well as those of the AuditCommittee and the Executive Board are available on Fibria’s

Investor Relations website (http://fibria.infoinvest.com.br/).

AUDITCOMMITTEE

Composed of three members and an equal number ofalternates, elected by General Assembly. Its main objective isto oversee administrative action, in addition to other dutiesprovided for in Article 163 of Brazilian Corporate Law. Itsmembers meet at least four times a year, at the end of eachquarter.

STATUTORY AUDITCOMMITTEE

Oversees the quality and integrity of financial reports, aswell as compliance with legal, statutory, and regulatory

requirements, the adequacy of processes relating to riskmanagement, and the activity of internal and independentauditors.

Objectives To reinforce sustainability in the company’s corporate governance

Material topics • Transparency and stakeholder engagement

• Finance management

Targets for 2014• Finalize roadmap for Long-Term Targets, indicating KPIs and

Medium-Term Targets.Target achieved: the medium-term targets were mapped.

www.fibria.com.br/r2014/corporate-governance/

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FINANCECOMMITTEE

Assists the Board of Directors and the Executive Board inanalyzing the Brazilian and global economic scenario, itspotential effects on the financial position of the company,as well as the preparation of scenarios and trends whenevaluating opportunities and risks and defining strategies to

be adopted in financial policy.

INNOVATIONCOMMITTEE

Assists the Board of Directors in analyzing initiatives relatedto research and technological innovation in the forestry,industrial, and management areas, concerning new productsand processes.

PERSONNEL AND

REMUNERATIONCOMMITTEE

Analyzes the policies, structures, and practices of humanresources proposed by the Executive Board, taking intoaccount the best practices adopted by national and foreigncompanies. The Committee also evaluates strategies and

the context of the opportunities and risks to which thecompany is exposed, as well as proposes the remunerationpolicy for directors and members of the Board of Directors,considering short- and long-term, regular and extraordinarysalaries and benefits.

SUSTAINABILITYCOMMITTEE

Advises the Board on all aspects involving sustainability, inidentifying, approaching, and handling issues representingrisk or that could have an impact on business, on long-termresults, on stakeholder relationships, and the company image.The Sustainability Committee is composed of five external

members and three directors, as well as the Chairman ofthe Board of Directors. In 2014, this committee played animportant role making specific recommendations based ondiscussions with internal and external specialists, relatedto opportunities and necessary adjustments concerningthe Forestry Code and stakeholder engagement related togenetically modified trees.

For more information about boards and committees, see theonline version of the report or http://fibria.infoinvest.com.br,tab Board and Committees

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Appetite for risk and company’s approvalpurview are defined by the Board ofDirectors. The Board assigns to the ExecutiveBoard responsibility to manage economic,environmental, and social issues and itsoperation involving the Board in issues thatrequire official evaluation and approval fromthe highest governance level.

Also, there are economic, social, andenvironmental issues that are evaluated byadvisory committees, which recommendstrategic guidelines to the Board of Directors.Additionally, the area of Governance, Risk, andCompliance (GRC) represents a link betweenstrategies and policies defined by the Board andby the committee and the activities executedby each business area, under the responsibilityof the directors and general management.

Fibria’s risk management process was definedbased on the ISO 31000:2009 standard - RiskManagement – Principles and Guidelines, andhas the following objectives:• Involve all agents in the structure in a given

phase.• Standardize concepts and practices.• Influence decision making.• Ensure that Fibria’s Corporate Governance

is followed and critically analyzed.• Provide a dynamic and efficient flow of

information.• Increase Fibria transparency with

stakeholders, market analysts, and creditagencies.

FIBRIA RISK MANAGEMENT

For more information about Fibria Risk Management, seehttp://fibria.infoinvest.com.br >Corporate Governance >Codes, Policies and Internal Regulations

Establishingcontext

Identificationof risks

Riskanalysis

Riskassessment

Addressingrisks

C o m m u n i c a

t i o n a n d c o n s u l t a t i o n

M o n i t o r i n g a n d c r i t i c a l a n a l y s i s

www.fibria.com.br/r2014/fibria-risk-management/

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Critical concerns are brought to the AdvisoryCommittee by the Executive Board or by theadvisers. The items evaluated are those thathave a potential impact on business resultsand do not have a short-term solution.

Currently, there are six topics covered:strategy, marketing, logistics, tax, judicialprocessesand investments in innovation.

In order to make it more structured and morerobust, in 2014, at the request of the Boardof Directors, Fibria revised its ComplianceProgram by grouping its obligations intoseven pillars: Laws and Regulations; Licenses;

Permits and Certifications; Contracts andAgreements; External Reporting; Support toCompetition / Antitrust; Prevention of Lossesand Fraud; and Anti-Corruption.

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1. It states that an annual evaluation of all internal controls and procedures for financial reporting issued must be made.In addition, the external auditor must issue a report where it attests to the veracity of the information of internal control.

2. It provides for the registration of securities of issuers admitted to trading on regulated markets of securities. 3. Private organization established in the US in 1985 to avoid scams in the financial statements of the company.

The new booklet was distributed to employeesand cont outsourced workers, which are beingtrained through compliance workshops about

the importance of the items reviewed, as wellas to strengthen their knowledge about theinternal and external rules of organizationalcompliance, following Values, Beliefs, andFibria’s Code of Conduct. The focus of thetraining course was based on the CorruptionPrevention and Antitrust pillars, with onclassroom and e-learning training, reviewand publication of the Anti-Corruption Policyand preparation and dissemination of theCompliance Defense Policy to Competition Law

(Antitrust).

Also in 2014, specific controls and compliance

management were created. The entiremonitoring process and environmental reviewis properly documented and reported to senior

management on a quarterly basis, with theannual sign-off of the control chart rated by allgoverning bodies through a specific tool, GRCProcess Control, which increases adherence tobest governance practices.

In compliance with section 404 of theSarbanes-Oxley Act1 and CVM Instruction480/092, the effectiveness of internal controlsof the company’s financial information is basedon criteria established in Internal Controls

- Integrated Framework (2013), issued bythe Committee of Sponsoring OrganizationsTreadway Commission (COSO)3

FIBRIA’S COMPLIANCE PROGRAM

L A W S A N D R E G U L A T I O N S

FUNCTIONS INSTRUMENTSPILLARS

ComplianceObservatory

Management of CriticalDocuments

Policies andProcedures

KnowledgeManagement

Education andTraining

CommunicationLines

Manager and/orOmbudsman Channel

Monitoring Obligations Monitoring

Systems

ResultManagement

Disciplinary Guidelinesand Corrective Measures

VALUES CONDUCTCODEMANAGEMENT

BELIEFS

L I C E

N S E S , P E R M I T S A N D C E R T I F I C A T I O N S

C O N T R A C T S A N D A G R E E M E N T S

E X T E R N A L R E P O R T S

D E F E N S E O F C O M P E T I T I O N / A N T I T R U S T

P R E V E N T I O N O F L O S S A N D F R A U D

P R E V E N T I O N O F C O R R U P T I O N

Identification of Lawsand Regulations

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Based on this assessment, the design ofcontrol processes is adequate and deficienciesor recommendations that could compromiseFibria certification have not been identified.

Adherence tests were carried out in connectionwith the audit of the financial statements ofFibria controls on 31 December 2014 by theindependent auditors PricewaterhouseCoopers.

Updated every two years, the company’s Codeof Conduct was also revised, including a topicon corruption. With this renewal, all employeesneed to reconfirm their adherence to the Code- action that should happen in 2015.

In addition to consolidating the culture ofethics and compliance, Fibria developed atraining program that includes all employeesabove the first management level (coordinators

and supervisors). In 2014, 19 groups (a total ofapproximately 250 people) underwent trainingin all units covering topics such as harassmentand discrimination. For 2015, an e-learningsystem geared toward senior management isbeing developed, focusing on issues such ascorruption and supplier relationships.

The full text of this set of norms is availableon www.fibria.com.br

In 2014, Fibria advanced in its crisismanagement process. Through simulations

with the regional commissions, there hasbeen a significant increase in the performanceof the teams. Today, all Fibria Units have CrisisManagement Committees in place and withgood coordination capacity.

The teams conduct quarterly meetings inorder to prepare Business Continuity Plans(BCP) to risks assessed and prioritized in theERM matrix that have potential for crisis.These plans are shared among the members

of the Committees for greater alignment andinteraction between the teams. As a result,

groups are better prepared to act in case ofneed to trigger the NCP for crisis management.

Another important step for the preparationof the teams will be to establish constant andperiodic dynamics, capable of putting NCPseffective capacity to the test in order to containor reduce the impact of crises generated bythe implementation of the key risks mapped.

In 2015, examples of continuous improvementof the crisis management process includeenhanced interaction of the committees withthe Corporate Units, in addition to establishing

the roles and responsibilities of the membersof each group.

CRISIS MANAGEMENT

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MANAGEMENTFibria’s management policy is developedby integrating all areas and with the agilityneeded to identify and manage business risks,social and environmental issues and impact,the health and safety of professionals, and thequality of products and services.

To this end, Fibria is committed to:

1. Acting ethically and respectfully with people,

open to dialogue and in compliance with alllaws, regulations, and commitments.2. Cascading strategic guidelines in abalanced manner according to the needs andexpectations of clients, suppliers, professionals,society, government, shareholders, and otherstakeholders.3. Building long lasting relationships with selectsuppliers and clients, according to demand,and offering differentiated products, businessservices and skills, with perceived value.

4. Ensuring business soundness andsustainability, through the mastery andcontrol of processes, acting toward theprevention and reduction of operational risksand environmental and social impact, andaccording to strict criteria for maintaininghealth and safety, promoting human and socialdevelopment. 5. Acting in an enterprising andinnovative manner, promoting the continuousimprovement of the management model and

processes, products, and services.6. Guaranteeing excellence in practices andresults by training and valuing its professionals,combining internal and external efforts, andexercising responsible leadership.

www.fibria.com.br/r2014/management/

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OMBUDSMAN OFFICEThe channel for reporting breach of theCode of Conduct, the Ombudsman Office, isaccessible to employees, former employees,residents of communities surroundingcompany operations, suppliers, clients,partners, and other stakeholders. All reportsare treated confidentially and recorded in asystem that maintains a history of all cases.

In 2014, Fibria Ethics Program, deployed

in 2013, originated several new actions:an extensive internal awareness campaignabout business ethics was held throughoutthe company, contemplating including theapplication of lectures by expert in all units. Inaddition to the campaign, classroom training

were applied to the entire first leadershiplevel reinforcing the company’s ConductCode assumptions, especially those related tohuman rights issues, integrity and compliance.

Initiatives such as these, coupled witha broad leadership development workperformed by different areas, contributed fora better alignment and had a positive impactthroughout the organization. A reduction in

te incidence of inadequate communicationin the workplace reported Ombudsmanshipwas also perceived, consequently, decreasingthe total number of reports the channel - 277reports received in 2014 compared to 331reports in 2013.

In 2014, Internal Audit examined 21 suspected irregularities: threepending from 2013 and 18 new received throughout 2014. Of the claimsinvestigated, seven referred to cases of corruption or misuse of assets (fourin Aracruz, two in Três Lagoas, and one at the Jacareí unit).Two occurrences resulted in termination of contracts with suppliers, oneresulted in taking disciplinary action with the employees involved, and fourrequired creation or change in policy and procedures.

www.fibria.com.br/r2014/ombundsman-office/

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CLAIMS BY CATEGORY %

Human rights 20.9

Consultations 18.4

Business relations and contracts 13.7

Labor 21.3

Lack of adherence to standards 6.9

Community relations 2.2

Conflicts of interest 3.2

Fraud/corruption 2.5

Environmental 4.3

Other issues 6.5

COMMUNICATIONCHANNELS WITH THEOMBUDSMAN’S OFFICE

INTERNETwww.fibria.com.br > Institucional > Ouvidoria

TELEPHONE(for Units abroad, there are specific channelslisted in the website: www.fibria.com.br)

MAILOuvidoria Fibria Celulose S.A.P.O. Box # 72.632

FINES AND LAW SUITS www.fibria.com.br/r2014/fines/

Administrative labor suitsThe company has 201 administrative suits inprogress, six of them filed in 2014. Among themajor issues are outsourcing and compliancewith the quota for hiring apprentices, peoplewith disabilities, and rehabilitated individuals.

In this period, Fibria presented documentsproving compliance with its labor obligations.

Public civil action for excess cargoIn June 2012, the Federal Public Attorney’sOffice filed legal action determining that Fibriamay not travel on any federal highway withexcess cargo weight, under penalty of fine.The suit, claiming the payment of pain andsuffering and material damage to the FederalPublic Ministry due to alleged losses to federal

highways, the environment, and economicorder, was approved at the first instance bythe judge. Fibria filed an appeal to the decisionthat prevented the traffic of company truckson these highways. Today this process is in itsinitial phase and Fibria considers the likelihood

of losing the case a possibility. There is still noprovision recorded for this suit.

Environmental lawsuitsFibria is a party in seven environmental actionsand procedures considered relevant. Of these,

five are Public Civil Actions questioning thelicensing of eucalyptus planting in the states ofSao Paulo and Espírito Santo. Another actionrefers to a Conduct Adjustment Term signedwith the Public Ministry of Bahia, through theRegional Prosecutor’s Office for EnvironmentalJustice in Teixeira de Freitas, due todevelopment agreements with owners of landwith environmental irregularities. The liabilitiesassumed by the company in the ConductAdjustment Term are R$12,535,000.00. The lastprocedure concerns a fine of R$1,500,000.00

(the only action initiated in 2014) authoredby the environmental agency of Mato Grossodo Sul, which argues the alleged discharge ofeffluents outside the parameters established inthe legislation for the Parana River.

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MONETARY VALUEOF FINES

2012 2013 2014

PAID 0 0 0

PENDING DECISION R$ 1,263,548,671.73 R$ 1,087,582,335.90 R$ 1,186,367,204.30

TOTAL R$ 1,263,548,671.73 R$ 1,087,582,335.90 R$ 1,186,367,204.30

CERTIFICATIONSFibria is in compliance with all requirements forall regulations and certifications applicable tothe industry.

NBR ISO 9001, NBR ISO 14001

OHSAS 18001 implemented at the SantosPort Terminal (T13, T14 and T15)

Forest Management Principles and Criteria- FSC-STD-01-001 (Forest StewardshipCouncil®). International Standard ofFSC®. The certification agency uses theFSC® Certification Standard for ForestManagement, Forest Plantation Assessmentin the Federal Republic of Brazil: StandardHarmonized between Certifications Agencies(FSC-STD-BRA-01-2014 V1-0 PT)

Forest Management Principles and CriteriaNBR 14.789 (CERFLOR®)

Chain of Custody ABNT NBR 14.790

(CERFLOR®)

Standards for Suppliers and the CertifiedProduct Industry FSC-STD-40-004 (ForestStewardship Council®). This is the main FSC® chain of custody standard. Since Fibria alsoprocesses forest development wood andpurchases in the non-certified market, thecompany applies the Standards for Non-Certified Wood (Controlled) FSC-STD-40-005(Forest Stewardship Council®) and has onlyone certification. Then, it applies the FSC-STD-40-003 Standards for Certification ofCustody Chain in Multi-Site Operations(Forest Stewardship Council®)

IN THE NEXT SECTION, LEARN ABOUT HOW FIBRIA WORKS WITH INNOVATIONIN SEARCH OF NEW BUSINESSES AND USES ITS KNOWLEDGE TO FACE THE

EFFECTS OF CLIMATE CHANGE.

www.fibria.com.br/r2014/certifications/

AgreementsAll agreements signed by the company haveentered into the company’s monitoring and

control systems and are being fulfilled on time.There were no new agreements signed in 2014.

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With the challenge of exploring innovation asleverage for generating value through intelligentand competitive work that takes into account

events inside and outside of the company,Fibria closed the year 2014 establishing a newTechnology and Innovation Department.

From this strategic point of view, since itsinception the company has worked in termsof incremental (continuous improvement),

radical (performance leaps in current business),and disruptive (technological development fornew business) innovation. Without neglectingincremental innovation, Fibria recently

GOVERNANCE www.fibria.com.br/r2014/innovation/

INNOVATION

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Innovation has been part of Fibria’s DNA since its inception, making a strongcontribution to generating value for our stakeholders. But this success, in achanging world, requires constant questioning. Consequently, the companyrecently repositioned its innovation strategy and began focusing more on radicaland disruptive innovation.

Fernando Bertolucci, Director of Innovation

repositioned its innovation strategy and beganto direct more resources allocate radical anddisruptive innovation in order to generatecompetitive differentiation in current processesand products and create opportunities fordiversifying our business through forestrycapabilities. Along these lines, current studiesare focused on seeking a significant increase inforest productivity, improving the quality of ourfiber to supply the most demanding markets,increasing the efficiency of our production

processes, and developing high qualityinnovative products.

When positioning itself as an ambidextrouscompany – one that has great control over itscommodity production routine while keepingan eye on new business possibilities in forestry –Fibria grows and invests in its ability to innovateand stand out in the market. Just in the year2014, the company invested approximatelyR$48 million in research projects involvinggenetic improvement, forest management, andthe development of products and technologieswhich help the company enter into new

markets.

Disruptive innovation

Radical innovation

Incremental innovation

INVESTMENTS ININNOVATION – 2014

59%

18% 23%

NUMBEROF PATENTSGRANTED: 71

INNOVATION

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GENETIC IMPROVEMENTThrough a better understanding ofthe causes of a physiological disorderoccurring in eucalyptus, it was possible toidentify clones which tolerate the d isorder,a breakthrough in genetic improvementin 2014, offering a solution to a newproblem caused by climate changeperceived mainly in southern Bahia. Thework identified two new clones tolerant

to extreme climates (mainly drought andexcessive rain), which have become partof the company’s cloning renovationportfolio in that region.

In biotechnology, there was an evolution inresults related to studies about geneticallymodified eucalyptus. In 2014, new geneswere identified that could potentially beinvolved with the forest’s ability to adaptto different environmental conditionsand improvement in wood quality, whichmay be introduced in Fibria’s elite cloneswithin the coming years. The work, still

in the research phase, is being conductedin three areas: gene identification,improvement of the efficiency of genetictransformation process, evaluation oftransformed plants, and the bio-safety offield experiments.

THE THREEFRONTS DRIVINGINNOVATIONIn 2014, the Executive Board also advanced inthree subjects which are very important to theprocess of managing innovation:

• Structuring in the area of competitiveintelligence, encouraging sharingknowledge and intelligence in the

Intelligence Center format.

• Valuing the company’s intellectualproperty through wide dissemination ofpolicies concerning the subject, as well asidentifying new opportunities for patentsand creating rules for maintaining industrialsecrecy.

• Engagement processes concerningregulatory issues and updating policy

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INNOVATIONS MADEIN PARTNERSHIPSIn 2014, Fibria’s first major open innovationexperience took place with the launch of apublic notice for research on biodiversity.Approximately a third of Fibria’s areas arecovered by native forests which are of greatimportance to society and arouse the interestof various institutions for the development of

scientific studies. As a result of this initiative,the company received 40 project proposalsprepared by universities, NGOs, and researchinstitutions. Of all the candidates, four projectswere chosen based on Fibria’s innovationstrategy and will be implemented in 2015:

• Technique to physically characterize a thirdorder microcatchment drainage relatedto its hydrology and resilience capacity(ESALQ/USP).

• Seed technology and installation ofprogeny tests in pequi fruit (UNESP IlhaSolteira).

• The importance of limiting nutrients inthe conservation of plant diversity in theBrazilian Cerrado (UNESP Ilha Solteira).

• Use of artificial neural networks forestimating biodiversity, population size,volumetric stock, and carbon in forestfragments (Institute of Engineering andEnvironmental Innovation – Ambinova).

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Harvesting occurs when the tree agesbetween 5 to 7 years and its fibers reachapproximately 0.8 mm in size.

The fibers from the wood from renewable eucalyptus plantations are the essence of the company’s business.With them, Fibria produces high quality pulp with characteristics meeting the needs of several different paperindustries around the world, generating value for all of its stakeholders.

After cultivating and harvesting theeucalyptus, the wood is brought tothe industrial units responsible forproducing the pulp.

The wood is chopped into small chips andchemically processed to seperate its differentcomponents, mainly the pulp from lignin. Thenit is bleached, dried, and baled for transport tothe client.

The short fibers form a more connected, closednetwork. They are excellent for generating gooduniformity and volume in a wide variety of paper.

CROSS SECTION VIEW OFEUCALYPTUS WOOD

WOOD PRODUCTION PULP PRODUCTION

CROSSSECTION VIEW

OF EUCALYPTUS WOOD

VIEW OF THE

SURFACE OF FIBERS

THE PATHOF FIBER

ZOOM 50X

ZOOM 150X

ZOOM 2.000X

ZOOM 1.000X

INDIVIDUAL EUCALYPTUSCELLULOSIC FIBERS

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• Toilet paper• Paper towels• Tissues• Napkins

• Paper for printing andwriting:- Notebooks- Books- Magazines- Advertisements- Envelopes- Office

• Packaging paper• Photographic paper• Decorative paper• Thermal paper (invoices, credit card receipts)

Sheets of paper are formed over screensthrough a pulp suspension providing thedesired characteristics. The sheet willthen be dried and cut into the desiredshape.

Among the main sales channels areretail paper vendors, printers, andsupermarkets.

Main advantages of usingbleached eucalyptus:excellent softness, pleasantto the touch,greaterpaper volume, and highwhiteness.

(51% of sales)

(18% of sales)

Main advantages of usingbleached eucalyptus:excellent uniformity,volume,and printing quality.

PAPER PRODUCTION SALES CHANNEL CONSUMER

TISSUE

PAPER FORPRINTING ANDWRITING(P&W)

ZOOM 500X

ZOOM 300X

ZOOM 500X

TISSUE

P&W

OUTROS

ZOOM 3.000X

CROSS

SECTION

EXAMPLES OFTYPES OF PAPER

(31% of sales)

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NEW BUSINESSES

In a decision aligned with the strategic pillarfor diversification, in 2014 Fibria created theDepartment of Strategy and New Businesses.Responsible for outlining the paths to betaken by Fibria and with a fresh look attrends in the pulp market, this departmentsworks in conjunction with the other companydepartments, the Presidency and the Board of

Directors in search of new uses for the forest– today one of the company’s greatly valuedassets.

Seeking diversification, Fibria brings soundnessto something that could become a weakness:being a part of the forestry sector, which isaffected by climate change. Evaluating thisscenario within the three parameters regulatingthe business, the company chose to use itsability to innovate the development of solutionsand projects that could help redesign the pulpindustry, and obtain a percentage of its incomefrom other sources.

In this new business pillar, Fibria continuouslysearches to identify initiatives complementingthe value chain with activities such asbiobusiness, biomaterials, real estate, portdevelopment, among others.

Among the main plans is the strategic alliancewith the American company, Ensyn Corporation

(Ensyn) in order to develop technology in thebio-oil market, which uses forest biomass as itsraw material. Besides other prospects on the

paths defined as priority in Fibria’s bio-strategystudies, this project proves to be promisingand is already being tested in partnership withpotential clients.

Another asset with recognized operationalefficiency which is ready for expansion isPortocel, a private terminal specializing in the

shipment of pulp, located in Barra do Riacho(ES). Controlled by Fibria in partnership withCenibra (Nipo-Brazilian Pulp), the compa