CEO of Leading Company in Sustainability – Brazil 2018 – MIGUEL NUNO SIMOES NUNES FERREIRA SETAS

MIGUEL NUNO SIMOES NUNES FERREIRA SETAS

EDP ENERGIAS DO BRASIL
CEO of Leading Company in Sustainability

1. How the sustainability issues are formally addressed in your role as CEO?

As CEO of EDP Brasil and member of the Sustainability Committee – which acts as a consulting committee to the Board -, Miguel Setas plays a key role to ensure sustainability as EDP Brasil’s one of the main core values. EDP’s Sustainability Committee incorporates both social and environmental factors into the business strategy in order to ensure EDP operations’ continuity. The Committee is composed by three members, two of them nominated by the controlling shareholder and one independent.
In 2017, EDP Brasil has publicly committed to 2030 Agenda for sustainable development – global call to action set by United Nations, which includes 17 Sustainable Development Goals (SDGs) to achieve sustainable development until 2030. To reflect such commitment into Company’s business strategy to grow with positive social and environmental impacts, EDP has incorporated 8 out of 17 SDGs into EDP 2020 – a set of targets to promote business sustainability until 2020. As a concrete example of how SDGs correlate to EDP business units’ achievements towards sustainable development, in 2016 EDP has pledged to save 100 GWh on clients’ energy consumption until 2020. Aiming to overcome such goal, EDP Soluções em Energia – EDP’s branch for energy efficiency services – has undertaken 23 energy efficiency projects which have reduced 51,85 GWh on clients’ energy consumption, as well as 30,457 tCO2 on greenhouse gas emissions only considering the year of 2017. The results corroborate Company’s pledge towards sustainable development, especially with SDG 12: Responsible Consumption and Production and SDG: 13: Climate Action – both SDGs integrated into EDP 2020. Among such projects, EDP has teamed up with a large wholesale chain to improve energy efficiency by replacing for LED lamps and retrofitting the lighting system, resulting in 55% cut down on energy consumption, the equivalent to 1,400 tons of CO2 emissions avoided.
As for the commitment with SDG 5: Gender Equality, and Women’s Empowerment Principles (WEPs), a partnership initiative of UN Women and UN Global Compact (UNGC) which has been endorsed by the Company, EDP has launched in 2018 the first ever created School for Women Electricians. Fully sponsored by EDP, the program aims to capacitate women to properly pursuit a career as electricians. The initiative is a partnership of EDP alongside professional education institute SENAI (National Service of Industrial Learning), and represents a watershed in the electric sector as it helps promote gender inclusion in a traditionally male profession. The workload is approximately 550 hours, roughly four and a half months in length. The Company is running two classes of 32 total students in the cities of Mogi das Cruzes and Taubaté, located in EDP’s concession area in the state São Paulo, and already plans an expansion phase of the program. Beyond the scholarship, women are given materials, Personal Protective Equipment, and lunch. At the end of the course, women will receive a certificate issued by SENAI and will remain in the EDP talent pool to participate in future hiring processes. The Company aims to absorb all women electricians who successfully complete the course.
As Sustainability is part of daily business strategies, Company’s achievements naturally reflect such commitment. Among others, in 2017 EDP renewed presence in B3’s Corporate Sustainability Index (ISE, Índice de Sustentabilidade Empresarial) for the 12th consecutive year, reaching the maximum score in 5 out of the 7 dimensions of the index. EDP was also selected as the Sustainable Industry Company by Exame Magazine. The Company is in top 3 of the list of the 100 most sustainable companies in emerging markets, analyzed by the European rating agency Vigeo, and was elected the “Most Sustainable Company in Latin America” by the reputed organization ALAS20. These were just some of the many highlights EDP has managed to achieve in Sustainability, reinsuring its leadership in this area. EDP continues to improve and consolidates its compliance program, reaffirming commitment to the highest ethical standards and combating all forms of corruption in all our operations with customers, suppliers, partners, and the community in general. Finally, in 2018 EDP has learned the results of the Transparency International study, which evaluated how the 110 largest Brazilian companies disseminate information about their anticorruption practices and organizational transparency, with EDP being top three companies in this ranking.
In addition to investing in sustainability, EDP continues to follow innovative paths. In 2017, Company excelled in the electric sector as first to bet on robotization of business and administrative processes. Company’s competency center in São Paulo – Center of Excellence in Robotization – deployed 42 robots during the year, promoting quality and efficiency gains. This will be an area of unquestionable investment within EDP’s Digital Transformation Agenda. Fully aware of the organizational implications of the robotization processes, Company has been founding underwriter of the so-called “Brazilian Business Pact for the Humanized Digitization of Labor”, alongside three other Brazilian organizations.
EDP Brasil’s Sustainability Committee also secures deep and continuous stakeholders management which upholds its commitment to ongoing dialogue, aiming to create shared value. This strategic alignment between the Company’s purpose and shared value is much stronger and more effective. Since 2016, the Company has embedded a strong cultural identity a result of EDP Culture Project combined with the so called “Targets with Purpose”, which directly align financial and operational goals to EDP’s purpose – “to use our energy to always provide better care.” “Targets with Purpose” include goals to create value not only to shareholders, but also to customers, people, environment and community, business partners, assets and operation.
To conclude, in terms of social commitment, EDP has ensured R$ 11.8 million in social investment for the benefit of more than 70,000 people in 2017. With regards to cultural commitment, Company is investing BRL 20 million in the next three years to refurbish the Museum of the Portuguese Language in São Paulo, becoming the master sponsor of the renovation of this heritage destroyed by a fire in the end of 2015. The amount represents 32% of the project total cost, scheduled to last 20 months and estimated in BRL 65 million. Opened in 2006 in São Paulo, the city with the largest number of Portuguese speakers in the world, the Museum of the Portuguese Language has received 4 million visitors until its closing in 2015. Recognized by Unesco as the best communication and information project in 2006, and voted as the best museum in Latin America for four consecutive years by TripAdvisor, it was the first cultural space completely dedicated to a language. Aligned with SDG 11, which aims to “Strengthen efforts to protect and safeguard the world’s cultural and natural heritage”. Portuguese language is the most important legacy Brazil and Portugal share. Therefore, EDP is committed to playing a key role in help preserving it.

2. Indicate which of the following three areas of the sustainable development of your company is, in your opinion, the most important

Social

3. In your role as CEO, could you describe in particular a project that has led and highlighted by its positive impact, whether in the Environmental, Social or Corporate Governance (ASG) in the last 12 months?.

In 2017, EDP endorsed Women’s Empowerment Principles by the UN, and incorporated the Sustainable Development Goal (ODS) 5: Gender Equality into its strategic agenda for economic growth with positive social and environment impacts until 2020. Promoting gender inclusion is particularly relevant in the Brazilian context where women, despite being population’s majority, face higher unemployment rates. Aiming to help transform gender equality commitment into reality for women, in 2018 EDP has launched the first ever created School for Women Electricians. Fully sponsored by the Company, the program encourages women to pursuit a career as electricians by providing them proper training. The initiative is a partnership between EDP and professional education institute SENAI (National Service of Industrial Learning), and represents a watershed in the electric sector as fosters gender inclusion in a traditionally male profession. The workload is approximately 550 hours, roughly four and a half months in length. The Company is running two classes of 32 total students in the cities of Mogi das Cruzes and Taubaté, located in EDP’s concession area in the state São Paulo, and already plans an expansion phase of the program. Beyond the scholarship, women receive materials, Personal Protective Equipment, as well as lunch. At the end of the course, they will receive a certificate issued by SENAI and will remain in the EDP talent pool, being able to participate in future hiring processes for effective full time jobs. The Company aims to absorb all women electricians who successfully complete the course.

4. Please indicate how you will lead in the next 12 months, from the identification of the risks and opportunities of Environmental, Social and Corporate Governance (ASG) factors, the measurement of the corporate sustainability performance and reporting to institutional investors, and the capital market in general.

The identification of the risks and opportunities of Environmental, Social and Corporate Governance (ASG) factors are integrated in the company’s strategy, which is based on the “Targets with Purpose” – a set of measurable goals to generate value not only for Shareholders, but also for Customers, Business, Partners, Assets & Operation, Environment & Communities, and People. Process to define these goals are fairly collaborative, including meetings with managing staff, and associates allowing the exchange of visions and shared discussion on strategic direction aligned with its purpose of delivering value to stakeholders, future business scenarios, and the challenge of reconciling needs to actual capacities to ensure long-term consistency to the purpose.
In order to measure sustainability performance and ensure full reporting and transparency, EDP establishes as guideline the global targets aligned with the eight United Nations Sustainable Development Goals.
The 14 global targets established include: provide energy efficiency products and services to reduce consumption of 100 GWh of energy at customers; keep associates engagement level above 75%; reach 100% of environmental and health and safety certifications; Invest BRL 100 MM on innovative project; and Invest BRL 50 MM to promote social business and sustainable lifestyle initiatives, among other. (For complete targets, please view page 48 of EDP Annual Report 2017).
Regarding sustainability reporting to institutional investors, and the capital market, EDP Brasil publishes annual reports in accordance with Global Reporting Initiative (GRI) to publicly address the Company’s economic, social and environmental performances from January 1st to December 31st of each year, as well as other reports to periodically publish results, such as quarterly releases. Furthermore, since 2016, EDP Brasil published an integrated report based on IRCC (International Integrated Reporting Council), to duly publicize the interaction among financial, social and environmental aspects before stakeholders.
In addition, EDP Brasil voluntarily endorses the following initiatives to improve transparency on ESG issues for investors: Global Compact; Brazilian Business Compact for Integrity and Against Corruption; National Pact on Eradication of Slave Labor in Brazil; Brazilian Program GHG Protocol; Carbon Disclosure Project.
As a result, EDP Brasil integrated in 2017, for the 12th consecutive year, the B3 Corporate Sustainability Index (ISE), alongside other robust evidences of recognition – second consecutive year selected as one of the 150 best companies to work in Brazil according to Você S.A. Magazine, “Sustainable Industry Company” by Exame magazine, and “Most Sustainable Company in Latin America” by organization ALAS20.
In respect to Corporate Governance, EDP Brasil commits to annually maintain as one of the most Ethical companies in the country, certified as Empresa Pró-Ética (Pro-Ethics Company) – organized by the Controladoria-Geral da União (Office of the Comptroller General – CGU) and Instituto Ethos. The award aims to recognize companies that address topics such as senior management commitment to ethics, policies, procedures, trainings and communication on this matter.

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