ANTONIO LUIS GUERRA NUNES MEXIA

EDP ENERGIAS DO BRASIL
BOARD Member of Leading Company in Sustainability

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

As Chairman of the Board, Antonio Mexia is fully committed to reflect global challenges into EDP Brasil’s leadership to ensure sustainable development. To that end, 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. In this sense, EDP Brasil’s business strategy to grow with positive social and positive environmental impacts incorporates 8 out of 17 SDGs into EDP 2020 – a set of targets to promote business sustainability until 2020. To illustrate how SDGs correlate to EDP business units’ commitment with sustainable development, in 2016 EDP Brasil has pledged to save 100 GWh on clients’ energy consumption until 2020. Aiming to overcome such goal, in 2017 EDP Soluções em Energia – EDP’s branch for energy efficiency services – has undertaken 23 energy efficiency projects which have already reduced 51,85 GWh on clients’ energy consumption, as well as avoided 30,457 tCO2e on greenhouse gas emissions. In addition, from January to August 2018, energy efficiency projects led by EDP Soluções em Energia have promoted an economy of 64.51 GWh on energy consumption, and avoided 25.965 tCO2e on greenhouse gas emissions. Thus, EDP Soluções is one concrete example, among many others, on how EDP Brasil’s business units translate commitment into effective contributions to help achieve sustainable development. To share one example, 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, which especially endorses EDP’s commitment with SDG 12: Responsible Consumption and Production and SDG: 13: Climate Action – both SDGs integrated into EDP 2020 agenda
The eight Sustainability Development Goals fully incorporated into the Company’s strategy until 2020 translate into a set of goals and commitments regarding renewable energy generation, environmental and safety certification, promote diversity, internalize circular economy concept, high level of employee engagement, customer satisfaction and recognition as one of the most Ethical companies in Brazil, among others. For instance, with regards to limiting coal in the power generation portfolio by 25% until 2020, EDP Brasil has achieved 75% of installed renewable energy at the one of 2017 thanks to anticipated entry into operation of the first generating unit of HPP São Manoel. (For complete targets, please see page 49 of EDP Annual Report 2017).
EDP Brasil 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

Environmental

3. In your role as BOARD Member, 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?.

As previously mentioned, 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. Thus, EDP Brasil’s business strategy agenda to grow aligned with sustainable development until 2020 (EDP 2020) incorporates 8 SDGs which correlates the most with EDP’ business.
In this sense, EDP Brasil’s reflects such commitments into goals for 2020, including: 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. With regards to such commitments, important to highlight some of the Company’s accomplishments in 2017:
• In 2017, 23 energy efficiency projects undertaken by EDP Soluções em Energia – Company’s branch for energy efficiency services – have provided a cut down of 51.8 GWh on Company clients’ energy consumption, and a reduction of 30.4577 tCO2e on greenhouse gas emissions.;
• In 2017, R$ 53.8 million were invested in telemetry in low voltage clients. Currently, 125,479 low-voltage customers are tele-measured;
• Generation and Distribution directed, respectively, R$ 7.5 million and R$ 15.1 million in 2017 for Research and Development, with emphasis on projects for the reuse of ash, smart grids and distributed generation
• Highlight in 2017 for the beginning of the reuse of the ashes produced in the generation of energy in the TPP Pecém . 32.2% of the ashes were sent to co-processing in the cement industry;
• • EDP Brasil was a highlight in the EDP Group and reached 81% of engagement in the last biannual satisfaction survey (2016). The result reflects the implementation of the company’s internal culture transformation program. In 2017 EDP was among the 50 most loved companies of Love Mondays and the 150 Best Companies to Work for VOCÊ S.A.

For complete status, please see “Status 2017”, page 49 of EDP Brasil Annual Report 2017.

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.