ENERGY AND EMISSIONS

At KUO, we manage energy consumption and emissions generation in a comprehensive manner, implementing various measures to mitigate environmental impacts and meet our sustainability commitments.

We maintain close relationships with suppliers and research centers to identify best practices and technologies that allow us to reduce our energy consumption and emissions. In addition, we seek an ongoing relationship with the competent authorities and provide periodic emissions reports, demonstrating our transparency and commitment to the environment.

Continually evaluating our performance by monitoring electricity and fuel consumption allows us to take proactive measures to reduce our carbon footprint and promote a more sustainable operation. We are committed to complying with the highest quality standards and regulations, including the RED code and NOM-043-SEMARNAR-1993, to ensure the efficient and controlled development of our operations.

In the Pork Meat business, we installed solar panels in the Maxicarne stores and produce electricity with the methane generated in the wastewater treatment processes in farms. In addition, we have implemented intelligent lighting in production areas, adopted practices such as turning off machines and equipment on weekends or non-operational days, performed periodic maintenance on electrical equipment and emission generators, and improved distribution routes to reduce fuel consumption. We also integrate natural gas optimizers in specific areas of our operation, contributing to energy efficiency.

Impact Management Related to Climate Change

During 2023 we conducted a climate change risk and opportunity analysis that considered the three sectors, taking a sample of 9 representative facilities located in Mexico. The study included the identification and evaluation of physical and transition risks. Based on the results, we are working on the implementation of strategic and operational measures to manage these risks and opportunities.

WASTE MANAGEMENT

We have implemented a rigorous waste management system in all our businesses. From the separation of the waste generated to its final disposal, we follow a comprehensive approach to maximize efficiency and minimize environmental impact.

We have a reprocessing program for materials in the value chain, as well as a special waste management plan that allows us to classify and recover waste for reuse in the supply chain.

We closely monitor the generation and disposal of waste, in strict compliance with current environmental regulations, such as NOM-052-SEMARNAT and NOM-161-SEMARNAT. We have specific management plans authorized by the corresponding authorities, as well as the services of transportation companies and authorized recipients to guarantee adequate waste management.

Through a waste control statistician, we analyze waste generation in terms of cost and volume, which allows us to identify areas for improvement and define corrective actions. Our operations are subject to regular waste audits by authorities and customers.

In the Pork Meat business, we acquired a rendering facility that allows us to transform meat waste generated by our processing plants to produce meat meal and fats. In addition, we transform organic waste from farms into bio fertilizers, which we donate to support small producers.

During 2023, the Polymers business underwent an extraordinary inspection by PROFEPA, which we attended satisfactorily, demonstrating our regulatory compliance in the proper management of the waste generated in the facility.

BIODIVERSITY¹

As part of our commitment to the environment. In 2016 we established a Conservation Area, which has more than 800 hectares inYucatan, Mexico. This area is focused on protecting the region's wild flora and fauna, including threatened and endangered species. During 2023, in partnership with the Centro de Investigación Científica de Yucatán (CICY), a floristic study was carried out that identified 501 species of vascular plants, and wildlife monitoring was carried out that detected 350 specimens of wildlife. This area has been recognized as a "Voluntary Conservation Area" under the General Law of Ecological Balance and Environmental Protection (Ley General del Equilibrio Ecológico y la Protección al Ambiente, LGEEPA), which demonstrates our commitment to the preservation of the natural environment.

We do not have operations located in or near protected natural areas, nor do we generate products or purchase inputs that contribute to deforestation. In addition, during 2023, we did not transform the natural ecosystem to establish our production or operation centers, and we are not aware of any suppliers that have carried out such transformations.

1. The information reported corresponds only to the Pork Meat business.