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Sustainability Annual Report Multiceras Group

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SustainabilityReport 2020

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HistoryLocationCorporate GovernanceSocial ResponsibilityEthicsCorporate ValuesComplaint MechanismsExternal InitiativesStrategic Sustainability ObjectivesPresenceProductsApplications Affiliation to AssociationsCertifications, Audits and AwardsMaterialityConsultation with StakeholdersSupply ChainCandelilla Wax Supply ChainAllies in Social ResponsibilityProductsMarketsAuditsMaterialityConsultation with StakeholdersSupply ChainOur PeopleEquality and No DiscriminationCommunicationTraining and EvaluationSafetyHealthAdditional BenefitsCommunity EngagementCandelillero CommunitiesEnvironmental PolicyEnvironmental GoalsEnergy ConsumptionMaterialsCarbon FootprintSolar PanelsBiodiversityPresident and CEO’s Letter344567889Corporate ProfileMulticeras ProfileAztec Plumbing ProfileSocial PerformanceEnvironmentInnovationAppendixGRI Content IndexAbout This ReportContact252727282930333434111212131314151617183636373738383920212122232442434312102519404236

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Because most of our clients participate inessential industries, the effect of COVID-19 on ourfinancial results was minimal. Our focus was onovercoming all of the external challenges in orderto continue supplying our products and servicesin a timely manner.Beginning this year, we have decided toconsolidate the achievements of our Multicerasand Aztec Plumbing companies and present themin a single Sustainability Report for newly createdcorporate entity Multiceras Group.At Multiceras Group, we proudly ratify ourcontinued commitment to the UN GlobalCompact. We are convinced that its Ten Principleshave been an essential guide in these uncertaintimes. In this report, we demonstrate thedecisions we have made for the benefit of all ofour stakeholders and how they have helped uspromote sustainable development.Yours sincerely,Raúl Marmolejo VelezMulticeras President and CEODear Friends, I am pleased to share with you our achievementsas an organization during 2020, a year that will bemarked in history as one of the most difficult andchallenging for the world due to the COVID-19pandemic.Despite all of the challenges caused by thepandemic, we were quickly able to adapt, and weprioritized the health of our employees above allelse. We implemented a work-from-homecampaign, accommodated vulnerable personnel,and coordinated activities according to keyfunctions and roles to keep operations runningsmoothly.We created several COVID-19 committees, and wealso took this opportunity to promote training forour management team and to establish newscorecard criteria to measure our success inmitigating the impact of COVID-19 on staff,customers, suppliers, business partners, and thecommunity.President and CEO'sLetter2020 SUSTAINABILITY REPORT GRI 102-10, 102-14, 102-15, 102-231

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Mexican-based Multiceras Group includes the family-owned companies Multiceras, Aztec Plumbing, and Arca Chemicals.While each company has its own specific focus, they all share the same values and various management functions. In orderto better serve our clients, we have decided to create Strategic Business Units (SBUs). Each SBU will be dedicated to aparticular market and employ a specific business model, which will allow us to improve our understanding of customerneeds and requirements. Our first SBU, Volkom, was launched in 2020 and will focus on industrial markets.GRI 102-1, 102-5Corporate ProfileFounded in 1978, Multiceras is dedicated tothe design, manufacture, andcommercialization of natural, synthetic, andpetroleum waxes, as well as relatedproducts for industrial applications.Our first Strategic Business Unit, Volkom, waslaunched in 2020 to offer wax emulsions forthe manufacture of wood and drywallpanels and to provide R&D for new productsand services for the automotive and metalmechanics sectors.Aztec Plumbing began as an independentcompany in 2000 to manufacture andmarket wax rings and other products forthe plumbing industry.Established in the United States in 2008, ArcaChemicals is an import-export company thatspecializes in the purchasing and distributionof raw materials and final products mainly inthe USA and Mexico, serving as a commercialbridge between enterprises of both countries. 2SocialPerformanceEnvironmentInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT

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Candelilla Institute was foundedNew laboratory facilities werecreated to increase our capacity for R&D andinnovationMulticeras and Aztec Plumbingadhered to the Global Compact and began to presentsustainability reports thefollowing yearVolkom starts as a new StrategicBusiness Unit (SBU) to manufactureand distribute industrial waxemulsions and other quality productsMulticeras received the SociallyResponsible Company awardfrom CEMEFIThe company was founded underthe name BaldiniThe plant was relocated to SantaCatarina, Nuevo LeonThe first productionplant wasestablished inSaltillo, CoahuilaThe company startedthe production of waxrings for the plumbingindustryThe company was divided intoMulticeras for the manufacture andcommercialization of waxes, andMultiquim for the distribution ofchemical productsMultiquim was soldto Noveon, Inc.HistoryAztec Plumbing began asan independent companyThe current productionplant and corporateoffices were built inGarcia, Nuevo LeonArca Chemicals wasestablished in the United States 3SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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The Executive Board of Multiceras Group provides our highestlevel of governance. It sets strategy, authorizes the annualbudget, oversees internal procedures, and monitors progress.Our Advisory Council of independent members provides adviceon ethical, legal, and strategic matters. General management is responsible for executing the strategyset by the Executive Board, managing operations, and approvingpolicies. The Chief Executive Officer is supported by the ChiefCorporate Officer, Chief Commercial Officer, and othermanagement executives.Each Strategic Business Unit (SBU) has a manager who isresponsible for executing the unit’s specific strategy, as well asfor its sustainable growth.LocationGRI 102-3, 102-4The production plants of Multicerasand Aztec Plumbing, as well as theircorporate offices and laboratories, arelocated in Garcia, Nuevo Leon, Mexico.Corporate GovernanceGRI 102-18, 102-19, 102-20, 102-26 4SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Social ResponsibilityGRI 102-16, 102-41“Multiceras Group operates through a sustainablebusiness model based on the creation of shared values with our stakeholders, seekingpermanence in the market through legal compliance, respect, and concern for theenvironment and society.”At Multiceras Group, we conduct ourselves with a firm adherence to the respect of human rights and International labornorms. Through our social responsibility policies, we support initiatives that prohibit child labor and forced labor within ourcompany and within our suppliers and contractors. We also recognize the right to collective bargaining and freedom ofassociation, according to the law and rules within and outside of the company.We integrate into our policies and operations a strict adherence to our Code of Conduct, to contribute to quality of life atwork, equal opportunity, and the wellbeing of our employees and their families. All employees are trained in our SocialResponsibility Policy, Internal Regulations, Code of Ethics, and Code of Conduct.SocialResponsibilityMissionSocialResponsibilityVisionWe will increase our value to all of ourstakeholders — customers, suppliers,employees, and community — byintegrating sustainability and socialresponsibility into all aspects of ouroperations.To be a global leader in sustainability and socialresponsibility that drives growth.Social ResponsibilityPolicy 5SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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The Code of Ethics addresses the following situations and providesprotocols to deal with them: During 2020 no instances of corruption were detected.EthicsGRI 102-17, 102-25, 205-2, 205-3Through our Sustainable Procurement policy, we strive to align our value chain with our ethical, social, and environmentalprinciples and require all suppliers to commit to compliance with our Suppliers Code. We take the sustainability profile of asupplier and the impact of the product it offers into consideration when evaluating and selecting sources of raw materials.We strongly reject any kind of corruption, extortion,or bribery. All staff have been trained in our Codeof Ethics, and new staff also receive training on itsvarious reporting mechanisms. 6Conflict ofinterestBribes FraudCorruptionMoneylaundering100% Trained StaffSocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Corporate ValuesGRI 102-16 C O M M I T M E N TMotivates us to give our all tothe team and trust that we canachieve our goals together.R E S P E C TMeans honoring ourselves,others, and the environmentthat sustains us all.E X C E L E N C EDrives us to perform at ourhighest level.S A F E T YGuides our behavior and demandsthat we be vigilant in minimizingrisks and preventing accidents.C R E A T I V I T YInspires us to generate ideas,push boundaries, and discoveroriginal solutions.S E R V I C EAllows us to anticipatecustomers’ needs andcollaborate with them to createthe best solutions. 7SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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We believe it is our ethical duty to contribute to the social and economic development of Mexico. Therefore, we haveundertaken several initiatives and committed to international standards, such as the 2030 United Nations’ Agenda forSustainable Development. We continually strive to maximize the benefits of sustainability.We are open to receiving complaints regardingemployee violations of our Code of Conductthrough one of our emails: ethics@aztec-plumbing.comWe have multiple mechanisms in place that allowemployees to provide suggestions, denouncebehavior and violations of the Code of Conduct,and give general feedback to the company. Forexample, we have suggestion boxes locatedthroughout our facilities, and all employees havedirect access to Human Resources personnel.Complaint MechanismsGRI 102-17All complaints, both internal and external, are processed in a confidential manner, with a guarantee of respect forhuman rights and no retaliation.External InitiativesGRI 102-12Since October 2012, we have adhered to the TenPrinciples of the UN Global Compact regardinghuman rights, labor, environment, and anti corruption.To adopt international standards regarding ethicaltrading, we have included the ETI Code in ourpolicies. 8SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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The Mexican chapter of UN’s Global Compact invited usto participate in the SDG Ambition Program, which aimsto help companies align their sustainability objectiveswith Sustainable Development Goals (SDGs). Once thealignment of objectives has been achieved, the programwill allow the acceleration of compliance with the SDGs.Thanks to this initiative, we have started with theestablishment of our Strategic Sustainability Objectives.Incorporate innovation into shared value initiativesthroughout the value chain. Seek the efficient use of resources and thepromotion of a circular economy to reduce negativeimpacts on the environment. Promote well-being through the creation ofopportunities and quality jobs.As stated above, we have establishedthree overarching StrategicSustainability Objectives, each alignedwith specific Sustainable DevelopmentGoals (SDGs).S t r a t e g i c S u s t a i n a b i l i t yO b j e c t i v e s 9SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment123

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Multiceras is a Mexican corporation specializing in the design, fabrication, and commercialization of natural, synthetic, andpetroleum waxes, as well as related products for industrial applications. The company is composed of an interdisciplinaryteam that promotes innovation and creativity, aligned with a sustainability model based on ethics, human rights, and respectfor the environment.Multiceras ProfileMissionVisionAt Multiceras, we providereliable and personalizedsolutions that contributeto the competitiveness ofour customers.To be a global competitorand a contributor tothe success of ourcustomers, employees,suppliers, and community. 10SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT GRI 102-1Environment

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PresenceGRI 102-3, 102-4, 102-6Our production plant is located in García, Nuevo León, Mexico. We have administrative offices in Cuatro Ciénegas andSaltillo; sales representatives in the Bajío Area and Mexico City; and distributors all over the world. 11Markets DistribuitorsSocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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ProductsGRI 102-2Applications 12We serve more than 30 different industries, including school supplies, cosmetics, pharmaceuticals, and industrial coatings. In2020 we introduced Strategic Business Units (SBUs) in order to better serve customers that share similar markets and needs.Our first SBU, Volkom, serves customers requiring large volumes of product for industrial uses, such as wood panels or drywall.We have grouped other industries into several markets: Life Sciences, Adhesives and Sealants, Packaging and Printing, andIndustrial Coatings.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Certifications, Audits and AwardsThe organizations in which we participate are:AssociationsGRI 102-13Multiceras participates in various chambers and associations aimed at promoting better business practices,sharing information, and lobbying national and international regulatory bodies to support the market.Since 2000, we have been ISO9001-certified, and in 2018 weobtained the ISO 9001-2015certificate. In 2020, the lastfollow-up audit of the currentcertificate was completed, whichwas carried out remotely incompliance with healthprotocols.Periodically, we seek continuousimprovement through internal andexternal social responsibility audits.In 2020 we met the requirementsof a SMETA 6.1 audit of four pillars:Labor Standards, Health andSafety, Environment, and BusinessEthics.In 2020 we received oureighth consecutive SociallyResponsible EnterpriseAward, granted by CEMEFI(Mexican Centre forPhilanthropy). 13SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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MaterialityGRI 103-1, 103-2, 103-3The company's sustainability strategy is based on 13 social, economic, environmental, and governance principles definedthrough a stakeholder exercise undertaken in 2019. 14We continually integrate these principles intocompany policies and initiatives and analyzeand monitor our progress.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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S H A R E H O L D E R SC U S T O M E R SE M P L O Y E E SConsultation with StakeholdersGRI 102-21, 102-40, 102-42, 102-43, 102-44C O M M U N I T YG O V E R N M E N TS U P P L I E R SMaximize economic value of thecompany sustainably, ensure its long-term survival and leadership positionin the market, comply with the lawand ethical considerations.Provide customers with trustworthy andpersonalized solutions that help themcompete in their markets.Guarantee a good working environment,support initiatives that promote personaland professional development, ensureemployee safety, promote diversity, andprovide equal opportunities for men andwomen.Contribute to the quality of life in ourCandelillero communities. Becomeinvolved in the communities where weoperate.Ensure all operations comply with thelaw.Establish long-term relationships withstrategic partners in our value chain.Establishment and execution of thebusiness strategy. Dedication of a boardmember to sustainability management.Customer audits on quality, safety,environment, management, andsocial responsibility. Follow normsand achieve certifications.Monthly financial statements. Quarterlyboard meetings. Executive meetings.Bonus and awards program. Code ofConduct. Training programs. Scholarshipprogram. Healthy living program(nutrition and exercise).Understand the needs of ourCandelillero communities. Volunteerand donate. Get involved with civicorganizations and cooperate withneighboring companies on sharedissues.Fulfill municipal, state, and federalsafety and environmentalrequirements. Adhere to SEMARNATrequirements to ensure Candelillasustainability. Collaborate with localauthorities in areas where we operateor have influence.Communicate with key suppliers toensure quality of products and services.Participate in events coordinated byorganizations such as American Fuel &Petrochemical Manufacturers andEuropean Wax Federation.Biannual customer satisfaction survey.Visits to customer premises.Participation in national andinternational events, such as InCosmetics and Suppliers’ Day.Quarterly communication newsletter.Monthly breakfasts with seniorleadership. Annual working environmentquestionnaire. Annual evaluations ofperformance and values. Open channelfor complaints.Annual Candelillero survey.Communicate with local authorities andCandelilleros through the Department ofAgribusiness. Monitor progress of annualwork plan.Communicate with SEMARNAT personnelto process permits. Communicate withmunicipal, state, and federalgovernment. Participate in governmentalforums and committees.Monthly supplier evaluations. Suppliervisits. 15SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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The second is our agribusiness supply chain in which we collaborate with local independent producers to obtain the rawmaterials for Candelilla wax, our most emblematic product, through methods that are environmentally friendly and thatcreate value in these communities.Our Candelilla wax supplier program provides opportunities for the development of communities through the sustainableuse of forest resources, allowing us to offer products that are distinct from those of our competitors in how they areresponsibly sourced and processed.Supply ChainGRI 102-9At Multiceras, we have two well-defined supply chains. The first one provides us with the majority of our products, such asemulsions, petroleum-derived products, synthetic waxes, and specific formulations of wax blends. 16SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Candelilla Wax Supply ChainGRI 102-9In some communities, Candelilleros haveorganized into Rural Production Societies,which allow members to access the MexicanSocial Security Institute (IMSS).Our team of forestry engineers supportsCandelillero communities, helping themobtain harvesting permits that allow them tocollect Candelilla plants without harming thesustainability of the species.The equipment needed for the extraction isinstalled in the community, and theextracting agent is provided. In some of thecommunities, citric acid has beenimplemented as an extracting agent.Our buyers visit the more isolatedcommunities, providing the Candelillerosguaranteed purchase quotas.Our R&D and innovation teams work withcustomers to understand their needs andprovide solutions through products that havebeen tailored for them.These teams ensure that all requirementsare met.C A N D E L IL L E R OO R G A N I ZA T I O N SC A N D E L IL L AP L A N TC O L L E C TI O NW A XE X T R A C T I O NT R A N S P OR T A T I O NT O M U L T IC E R A SR E F I N E ME N T A N D P R E P AR A T I O NO F T H E F I N A LP R O D U C T P E R M I T S F O RE X P O R T AT I O NA N D L O GI S T I C SThe exportation of Candelilla waxrequires a CITES permit. Our salesdepartment obtains the permits andorganizes the logistics needed forshipments.S A L E S AN DC U S T O M ERS E R V I C E 17SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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In previous years, our client Yokozeki made donationsthat made it possible to improve the quality of life ofthe inhabitants of the Candelilla communities, throughvolunteer work and the installation of rigid roofs in theCandelilla wax extraction units. Due to COVID-19, this year no volunteer activities werepossible, but the donation made by Yokozeki was used tobuy food baskets for the Candelilleros in different areas.These food baskets were distributed in July and August.L’Oréal was concerned about the impact of COVID-19 on thevulnerable communities where the Candelilleros live and made adonation, which was used to buy food baskets to be distributedin the communities that are in their Solidarity Sourcing Program. They also donated 1,000 antibacterial gels that were alsodistributed among the Candelilleros. This benefited 349Candelilleros and their families. In December, the remaining funds from the Solidarity SourcingProgram were used to provide food baskets to 261 Candelilleros.Provide Candelilleros and theirfamilies with access to social securitybenefits; andImprove work safety conditions forCandelilleros through financing thesubstitution of sulfuric acid with the muchsafer citric acid in the extraction ofCandelilla wax.Allies in Social ResponsibilityAs part of our L’Oreál solidarity-sourcing initiative, we signed theCandelilla Sustainable Sourcing Agreement, which aims to: 18ObjectivesSocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment1)2)

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Part of the Multiceras Group, Aztec Plumbing is dedicated to the manufacture of wax rings and other products for theplumbing industry. Our two production plants are located in García, Nuevo León, Mexico.Aztec Plumbing began as an independent company in 2000, when its operations were separated from its parentcompany, Multiceras, which continues to supply the waxes for Aztec Plumbing products.Aztec Plumbing ProfileMissionVisionAt Aztec Plumbing we supplyreliable, private-labelproducts that generateprestige for our customers.To be a global competitorand a contributor to thesuccess of our customers,employees, suppliers, andcommunity. 19SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT EnvironmentGRI 102-1

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Toilet WaxRingsPrivate label opportunities,Outstanding customer service, andExcellent performance.ProductsGRI 102-9Some products were developed by our research staff with our own technology, including our patented Plumbers Putty. Otherproducts are sourced from carefully selected suppliers.Bolt KitsPlumbersPuttyLeak DetectorCutting OilPTFE ThreadSeal TapePipe JointCompoundCopper FittingBrushes 20SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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MarketsGRI 102-6AuditsWe periodically undergo social responsibilityaudits requested by our clients. In 2018 wesatisfactorily complied with the requirements ofthe RESA standard (Retail Ethical SourcingAssessment), which is valid for three years.Due to COVID-19, this year presented a specialchallenge; however, to assure the Quality of ourproducts, we were able to satisfactorily complywith a remote audit requested by one of ourclients.Aztec Plumbing meets and follows the Customs-TradePartnership Against Terrorism (C-TPAT) Standards. In order toguarantee the integrity of customers’ products, we haveimplemented specific security procedures aligned throughout oursupply chain. In 2020 we successfully completed a remote SCAN(Supplier Compliance Audit Network) audit. 21SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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MaterialityGRI 103-1, 103-2, 103-3The company's sustainability strategy is based on 11 social, economic, environmental, and governance principles definedthrough a stakeholder exercise undertaken in 2019. We continually integrate these principles into companypolicies and initiatives and analyze and monitor ourprogress. 22SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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GRI 102-21, 102-40, 102-42, 102-43, 102-44Maximize economic value of thecompany sustainably, ensure its long-term survival and leadership positionin the market, comply with the lawand ethical considerations.Provide customers with trustworthyand personalized solutions that helpthem compete in their markets.Guarantee a good working environment,support initiatives that promote personaland professional development, ensureemployee safety, promote diversity, andprovide equal opportunities for men andwomen.Become involved in the communitieswhere we operate.Ensure all operations comply with thelaw.Establish long-term relationships withstrategic partners in our value chain.Establishment and execution of thebusiness strategy. Dedication of aboard member to sustainabilitymanagement.Customer audits on quality, safety,environment, management, andsocial responsibility. Follow normsand achieve certifications.Monthly financial statements. Quarterlyboard meetings. Executive meetings.Bonus and awards program. Code ofConduct. Training programs.Scholarship program. Healthy livingprogram (nutrition and exercise).Volunteer and donate. Get involved withcivic organizations and cooperate withneighboring companies on sharedissues.Fulfill municipal, state, and federalsafety and environmentalrequirements. Collaborate with localauthorities in areas where we operateor have influence.Communicate with key suppliers toensure quality of products and services.Biannual customer satisfaction survey.Visits to customer premises.Participation in national andinternational events.Quarterly communication newsletter.Monthly breakfasts with seniorleadership. Annual working environmentquestionnaire. Annual evaluations ofperformance and values. Open channelfor complaints.Monitor progress of annual work plan.Communicate with municipal, state, andfederal government.Monthly suppliers evaluations. Suppliervisits. 23SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Consultation with StakeholdersEnvironmentS H A R E H O L D E R SC U S T O M E R SE M P L O Y E E SC O M M U N I T YG O V E R N M E N TS U P P L I E R S

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Supply ChainGRI 102-9Our supply chain varies, depending on the type of product. For our best-selling product, the toilet wax ring, the wax rawmaterials are supplied by Multiceras, which is located next to our plant. This has allowed us to improve the wax-blendformulations it supplies us, as well as ensure the quality and reliability of the product. Other wax-ring raw materials areproduced by local Mexican companies. For other products, some elements are produced by Mexican or foreign companies,and others are produced in our plant. 24SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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We respect the right to collective bargaining, and 100% of employees working in operations have a collective labor contractthat has been approved by local authorities.We outsource some security, cleaning, and first aid services to outside contractors. Percentage of personnelwith a collective contract8622108821799Social PerformanceOur People9128119GRI 102-7, 102-8, 102-41, 401-1, 401-3, 407-1MenWomenTotal28% 32% 39%155570217697144862MenWomenTotal85% 83% 88% 25One of our pillars of social responsibility is our employees. Each employee is key to our success and part of what makesMulticeras and Aztec Plumbing leading companies.Percentage of personnelwith a collective contractSocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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1.74%2.49%14*5 1.74%2.49%14 hombres5 10%5.70%40*1 Employment data for 2020:We value the commitment of our employees and provide awards to those who meet five-year milestones with the company.In 2020, 13 awards were given at Multiceras and 8 at Aztec Plumbing:Average monthly rotationAverage monthly absenteeism New hiresParental permits9 1 1 1 1 4 2 2 *Men*7 Men 33 Women 26SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Equality and No DiscriminationGRI 406-1At Multiceras Group inclusion is part of our culture. We seek the development of our employees without any discrimination. Inour policies and internal procedures, discrimination due to gender, religion, ethnicity, and sexual orientation, as well as humanrights violations, is prohibited. We support equal opportunity for men and women. Women represent 28% of administrative staff, and 14% of key positionswithin the company are held by women. In 2020 no discrimination complaints were filed.CommunicationIt is essential that we foster an environment of transparency and trust. We do this by having continuous conversationsthrough practices and events that allow us to listen to all of our team members.On March 9, to celebrate International Women'sDay and following the “A day without us” initiative,all female employees were given the day off withpay. That day, male employees attendedawareness-raising talks given by personnelfrom Nuevo Leon’s Human Rights Commission.Normally a breakfast is held with seniormanagement, where some employeesfrom the different areas are invited sothat they can express their concerns,suggestions, and complaints. Due toCOVID-19, only the first two breakfastscould be held this year. The CEO held several virtualmeetings throughout the year toacknowledge staff efforts in dealingwith the challenges COVID-19presented us, as well as to sharecompany results and successes.Human Resources implementeda Coffee Talk program,organizing virtual meetingswithin different areas of thecompany. The meetings wereintended to foster interpersonalrelationships. 27SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Training and EvaluationGRI 404-1, 404-2, 404-3We invest in courses and training to foster employee development. We provide employees with resources to acquireknowledge, innovate, and increase their productivity.This year, 16 key employees were enrolled in an online Master of Business Administration: ThePowerMBA. All of ouradministrative staff receive performance evaluations.18.6InternalExternal 64511,84111.31,10012InternalExternal 7419USD$ 5,462 28EnglishMaster1924USD$15,252SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT EnvironmentEnglishMaster

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Healthand SafetyCommitteeSafetyGRI 403-1, 403-2, 403-4, 403-5, 403-9The safety of our employees is paramount. We are always investing in infrastructure, and we are continually working with ourpersonnel to improve their preparedness for an emergency. Training is given annually to personnel belonging to our brigadesand committees.14EvacuationBrigadeSearchand RescueBrigade FirefightersBrigadeFirstAid BrigadeLegalRequirementsCommittee10 41313 15This year, due to COVID-19 restrictions and attendant exceptional safety measures, evacuation drills presented a challenge,but, fortunately, we were able to carry them out. One of the drills was even performed during the night shift, which assured usthat all operating personnel understand how to properly evacuate our facilities. 29SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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1 3 0 83,059 2.41 7.22 04 8 0 169,148 4.73 9.46 0Accidents (major injuries)Incidents (minor injuries)Fatalities as a result of work-related injuryTotal number of hours workedRate of high-consequence work-relatedinjuriesRate of recordable work-related injuriesRate of fatalities as a result of work-relatedinjuryMany of our processes involve the handling of chemicals, hot materials, and steam. In order to prevent injuries, we performrisk analyses in designated areas, making sure to include key personnel. Every incident (minor injury) or accident (majorinjury) is thoroughly investigated to determine the cause(s), and the results of the investigation are incorporated into ourinternal methodologies to prevent future recurrences. In 2020 we had:HealthGRI 403-3, 403-6, 403-8The year 2020 presented unprecedented challenges in thearea of healthcare. COVID-19 forced the company toundertake various measures to prevent our employees frombeing exposed to the coronavirus and to ensure the continuityof our operations for the benefit of our customers.At the end of March, the Mexican government decreed thetemporary suspension of activities of companies considerednon-essential. Because Multiceras and Aztec Plumbingare part of the value chain of essential industries, bothcompanies continued to operate, following the extraordinarymeasures requested by the health authorities. 30SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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In order to protect our employees, Multiceras Group established various strategies to support occupational and mental health.We established several committees with the participation of each department leader, who was responsible for regularreporting and timely follow-up on COVID-19 initiatives and issues.The following occupational health measures were implemented:Restriction of trips, visits bysuppliers or people outsidethe companies, and face-to-face training.Following the recommendations of theMexican Ministry of Health, a leave ofabsence with pay for four months wasgranted to employees consideredvulnerable due to their medical history.Upon their return to work, we took greatcare with safe interaction protocols,work spaces, and delivery of a special kit(antibacterial gel, gloves, alcohol, masks,etc.).Implementation of screeningprotocols upon entering companypremises, such as taking temperatureand answering a questionnaire through amobile application.Mandatory wearing of face masks byall employees while travelling to andworking within our facilities. We provideface masks at the beginning and end ofthe day, as well as after meals.Disinfectant mats andantibacterial gel wereinstalled in common andhigh-traffic areas.Work-from-homearrangements (totalor partial) where practicable.All staff were givenantibacterialgel and washable facemasks. 31SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Redesigning of transport routes toavoid the use of publictransportation.Specific routines for disinfection ofoperational areas, personneltransportation, and common areas.Measures were established toensure safe physicaldistancing, including installingsignage in offices and commonareas, as well as acrylic shields.Establishment of protocols forsuspected cases of COVID-19, whichconsist of carrying out rapid testsand immediate referral of staff to ahealth center to confirm or rule outthe contagion. 32A full subsidy for the dining roomwas granted to all employees; wealso established a rotating diningschedule to reduce crowding.Random rapid tests are performed onemployees for timely detection andprevention.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Visual health aidPersonnel transportationBonus for birth or adoption of children, death of familymembers, and marriageEducation aid for employees’ children Christmas bonus for all employeesChristmas bonus for employees’ childrenFamily daysFull days and half days, additional to those required by law Employees receive benefits and incentives beyond those required bylaw, which allow them to have a higher quality of life:Yearly health examsVaccine campaignsFirst aidAmbulance serviceSmoke-free environment Despite the COVID-19 situation, we maintained allactivities focused on ensuring the occupationalhealth and well-being of our employees. 100% ofstaff enjoy the following benefits:We are aware that the stress of living under COVID-19, as well as the sudden changes we have experienced to adapt to thisnew reality, are potentially damaging to our physical and mental health. In order to raise awareness and sensitize ouremployees on physical and mental health issues, the Comprehensive Well-Being Program was established, which includes thefollowing initiatives: 33 Information for the wholefamily on coping withquarantine and thatpromotes#StayAtHome. Talks and workshops with mentalhealth professionals to help usunderstand our unusual circumstancesand support personal, family, social,and work well-being. Short recommendationsand techniques to apply athome and work.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Community EngagementGRI 413-1At Multiceras Group, we work to create shared value in the communities in which we operate. We seek to carry out activities,alongside our employees wherever possible, to nurture a culture of volunteering and social responsibility. Due to COVID-19,our traditional volunteering could not be organized this year, but with the help of some of our clients and corporate donations,food baskets were delivered to a total of 961 Candelillero families in Nuevo León and Coahuila. 34Candelillero CommunitiesCandelilla wax is extracted from the Candelilla plant, which is native tothe Chihuahuan Desert. The plant generates a wax coating that allows itto avoid dehydration due to the desert's harsh temperatures. In Mexico,Candelilla is found in the semi-arid areas in the states of Chihuahua,Zacatecas, Durango, Nuevo León, and Coahuila. Coahuila is where thelargest number of Candelilleros are dedicated to the harvesting ofCandelilla and the extraction of the plant’s wax.For decades, Candelilla wax has been extracted by the inhabitants of the communities of this region through a process ofheating water and adding an extracting agent. All equipment and supplies required for this work are supplied free of chargeto Candelilleros who maintain a buy-sell relationship with Multiceras. The law requires that to harvest the Candelilla plant, itis necessary to submit a technical justification study to the Mexican Environment and Natural Resources Ministry(SEMARNAT), which then issues a harvesting permit.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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02Trainingof Producers03SocialSecurity04Financing ofAdministrativeExpenditures05InfrastructureThrough innovation and the development of products from Candelilla wax, Multiceras will continue investing in thesecommunities, supporting the use of forest resources in a sustainable way, and promoting economic development in theregion. To reduce the risks associated with the Candelilla extraction process and to promote greater economic activity in theregion, Multiceras has undertaken various initiatives in the communities: 3501We provide our Candelilleros with the equipment they need to extract the Candelillawax. We also supply them will all necessary items used during the wax extractingprocesses, such as the extracting agent and packaging materials. In 2020 we helpedwith the repair of extraction equipment and provided new equipment, with a totalinvestment of USD$ 11,084.Our staff provide training to Candelilleros in terms of product quality and sustainableforest use.Multiceras is the only Candelilla wax provider that helps Candelilleros accessgovernment social security benefits, such as medical services, financialprotection in the case of accidents and injuries, and pensions. In 2020 we helped75 Candelilleros access social security benefits, with an investment of USD$53,522.To support Candelillero communities, we opened a forestry office in 2017. The officehas a team of forestry engineers, who perform all necessary studies and monitorpaperwork. In 2020 expenditures amounted to USD$ 99,946.We guarantee our purchase of certain levels of Candelilla wax regardless ofinternational demand, providing Candelilleros with a guaranteed income.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT EnvironmentGuaranteedPurchase

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EnvironmentAt Multiceras Group we are committed to the deals of innovation and efficiency in our processes, as they allow us todecrease our negative environmental impact. 36At Multiceras Group, we are committed to protecting andconserving the environment, preventing injury and illness in the workplace, andproviding a safe working environment by complying with legal requirementsand best practices.EnvironmentalPolicy Reducing20% of our CO₂emissions by 2025 Reducing10% of our cleanwater usage forgeneral services by2025Environmental GoalsSocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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Electric Power (kWh)Water (m )Fuel (l) 3 37Energy ConsumptionGRI 302-1, 303-1594, 5769,834527,44648,96373,411663,9767,783531,84461,85240,698583,7157,244478,417*81,257186, 0739091,251188,6601,1091,260186,088567**No data for this periodMaterialsGRI 306-2Recycled waste (t) We recycle cardboard and palletsHazardous waste (t) We hire a certified third-party to properly dispose of hazardous wasteSpecial handling waste (t) These wastes are handled by the local authority36.67 2,838 56.46 Special handling waste (t) These wastes are handled by the local authority25 252129.10 8,732 6219.86 5,102 73.80SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT EnvironmentElectric Power (kWh)Water (m )Natural Gas (m )LP Gas (l)Fuel (l)33

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38Carbon FootprintGRI 305-1, 305-21,353 307 1,6603 98 10125 95 981,403 313 1,7161,444 335 1,779All carbon-footprint calculations were obtained through the company's internal measurement system using emissionfactors available from Mexico’s National Emissions Registry.Solar PanelsGRI 302-4At Multiceras, we installed 164 solar panels in 2019.These have a capacity to generate 88,202 kWh annually,which is equivalent to a replacement capacity of20% clean energy. In 2020 the solar panels generated35,990 kWh. At Aztec Plumbing, we installed 70 solar panels in 2019.These have a capacity to generate 37,647 kWh annually,which is equivalent to a replacement capacity of 20%clean energy. In 2020 the solar panels generated 21,800kWh.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT EnvironmentIndirect emissions of greenhouse gases (GHG) Scope 1Indirect emissions of greenhouse gases (GHG) Scope 2Tons of CO equivalent2Indirect emissions of greenhouse gases (GHG) Scope 1Indirect emissions of greenhouse gases (GHG) Scope 2Tons of CO equivalent2

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39BiodiversityGRI 304-2, 304-4We recognize the importance of protecting biodiversityand commit to using natural resources responsibly,operating in accordance with national legal frameworksand regulations, and promoting sustainable projects ofsocial and economic benefit to the Candelillacommunities. Candelilla is listed in Appendix II of the Convention onInternational Trade in Endangered Species of Wild Faunaand Flora (CITES), which means that its international tradeis regulated. This is done to avoid harvesting rates thatare incompatible with Candelilla’s survival as a species.To legally export Candelilla wax, it is necessary to receive aCITES permit from SEMARNAT (Mexican Environment andNatural Resources Ministry), which is responsible for ensuringthe lawful origin of the product and compliance with theharvesting permits for each community. The agribusiness team of Multiceras supports theCandelilleros in the preparation of the Forest Studies toobtain their harvesting permits to be able to collect theCandelilla plant in their communities. They also obtain theCITES permit to be able to export Candelilla wax. Multicerasonly exports wax that complies with all regulations.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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40InnovationAt Multiceras Group, we pride ourselves ondeveloping targeted solutions for our customersacross industries, working closely with them togain a deeper understanding of their business, sothat we can offer a product that is tailored to theirneeds. Innovation is one of the foundations of ourbusiness, which is why we nurture in ourpersonnel the values of innovation and creativity.We invest in R&D, plant, technology, andpersonnel to create high-quality products withoutstanding functionality.We have developed new formulations with differentialcharacteristics in emulsions for the constructionindustry.The development of these formulations has allowed ourcustomers to reduce their environmental impact,increase the shelf life of the product, and reduce safetyrisks in their processes and products.SocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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41The Candelilla wax extraction process has beenunchanged for decades. Our R&D team has beenworking to modernize this process to create ahigher return of wax per plant, make the processsafer, and increase the quality of the product. The extraction of Candelilla with citric acid (insteadof the traditional sulfuric acid) has been one of ourmost significant achievements in this area, makingthe extraction process much safer for Candelilleros. Currently, we have 33 communities where waxextraction is done with citric acid, which represents20% of our purchases of Candelilla wax.Communitieswith Citric AcidOf our purchasesof Candelilla waxis done with CitricAcidSocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfile2020 SUSTAINABILITY REPORT Environment

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42AppendixSocialPerformanceInnovation IndexAztecPlumbingMulticerasCorporateProfileGRI Content IndexGRI 102-552020 SUSTAINABILITY REPORT Environment

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43About This ReportGRI 102-32, 102-49, 102-50, 102-51, 102-52, 102-54Mireya MarmolejoSustainability Managermireya.marmolejo@multiceras.comRectangulos No.100 Arco VialZip Code: 66023Garcia, Nuevo Leon, MexicoThrough this Sustainability Report, we present results, activities, and commitments of Multiceras, S.A. de C.V. and AztecPlumbing, S.A. de C.V., from January 2020 to December 2020. This report is published annually on March 1, this being theeighth edition approved by the Executive Board.The Sustainability department is responsible for collecting and preparing the information that has been presented inthis report. This report was made following GRI 4 guidelines: Option Essential Standards, and we will not request verificationof it. As Multiceras and Aztec Plumbing are private companies, this Sustainability Report does not include financial statements.Our Management and Finance departments are responsible for keeping all information documented and archived, as well asfollowing all legal requirements.Past reports are published under the companies’ profiles on the Global Compact website: 102-3, 102-53Please contact us with any suggestions or to request further information:AztecPlumbingMulticeras2020 SUSTAINABILITY REPORT SocialPerformanceInnovation IndexCorporateProfileEnvironment