Ultrapar

Ultrapar has set a short-term decarbonisation target for 2025. It aims to reduce absolute scope 1 and 2 emissions by 100%. The company relies on carbon offsets to achieve this target. Ultrapar should look to instead reduce emissions by direct action. The company is yet to set a scope 3 target and no long-term targets have been committed to. To improve, Ultrapar should set long-term targets for all emissions scopes and also set intermediate targets at gaps of no more than five years between the reporting year and its furthest target end date. Setting regularly spaced intermediate targets incentivises near-term actions on/towards its longer-term goals.

The company does not disclose its research and development (R&D) expenditure on low-carbon technologies. It provides expenditure only for carbon credits which are not considered under this assessment. To meet the sectoral-level expectation, at least 77% of the company’s total R&D investments should be dedicated to low-carbon technologies.

Ipiranga, one of Ultrapar’s subsidiaries, audits 95% of its suppliers that provide road and waterway transport services (which accounts for 59% of its scope 3 emissions). Suppliers are not required to report on their emissions publicly. The company has an opportunity to ask for this information and integrate it into the company’s engagement strategy.

Ultrapar aims to reduce the group’s scope 1 and 2 absolute emissions by 100% by 2025 and is planning to use offsets to achieve this goal. Ultrapar’s transition planning covers all of its subsidiaries but does not include scope 3 emissions, which account for the majority of the company’s total emissions.

Ultrapar plans to expand its biofuel storage and distribution activities and install more electric vehicles (EV) charging points at Ipiranga service stations. The company aims to achieve 100% of electricity consumption from renewable sources by 2030. The company plans to develop strategies to maximise the proportion of renewable products and energy sources.

Ultrapar has acquired Stella Energia, a renewable electricity company with 19,000 customers and 85 megawatts (MW) of capacity, and NEOgás producing gas and bio-methane. These new business units are likely to be a small in comparison to the company’s total operations. Ultrapar has installed 50 EV charging points through its subsidiary Ipiranga and is planning to install 40 more. However, timing on delivery is unclear.

In 2022, Ultrapar’s total scope 1, 2 and 3 emissions reduced by 44% compared to 2021, largely due to the divestment of Oxiteno and Extrafarma. However, its emissions intensity for scope 1, 2 and 3 has remained at the same level between 2016 and 2021, which does not align with the required trend to align with company’s 1.5°C pathway.

Ultrapar is attempting to diversify its company towards some low-carbon businesses such as renewable electricity and biogas. However, the company will need to rapidly expand these parts of its business to allow it to transition. The company’s emission reduction targets are planned to be achieved through the use of offsets.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. No public commitment by the company was found stating its intention to reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskill and upskills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. However, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company has a public commitment to gender equality and women’s empowerment, and discloses some information about the diversity of its workforce. The company can however strengthen its performance and disclosure on several key decent work issues including the provision of secure, safe and healthy workplaces and fair remuneration.

The company commits to protecting personal data and has a policy prohibiting bribery and corruption, including corresponding clauses in its contracts with business relationships. However, the company can strengthen its performance and disclosure on several key ethical business topics, including personal data protection, tax, and lobbying and political engagement.