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MIGUEL NUNO SIMOES NUNES FERREIRA SETAS
EDP ENERGIAS DO BRASIL
CEO of Leading Institution in Responsible Investment – Brazil
1. How the sustainability issues are formally addressed in your role as CEO?
Since the launch of its initial public offer (IPO) in July 2005, EDP Brasil has stock traded at the New Market of the Stock Exchange of São Paulo (BM&FBovespa), which provides strict rules of transparency and high standards of Corporate Governance. 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 main core value, as well its application and continuous improvement. The EDP’s Sustainability Committee incorporates social and environmental considerations into defining businesses and operations, in order to add value to society and equally contribute to its continuity. It is comprised of three members, two of them nominated by the controlling shareholder and an independent one. On a global perspective, EDP Brasil’s Sustainability Committee has followed EDP Group’s position in 2017 and endorsed United Nations Sustainable Development Goals (SDG), ratifying the commitment to act towards SDG’s successful implementation. EDP will direct its contributions to eight of the 17 Sustainable Development Goals that were voluntarily endorsed by the Company. [For more information see 4.1. Principles and Commitements, p. 52/53, EDP Brasil Annual Report 2016] EDP Brasil’s Sustainability Committee also secures deep and continuous stakeholders management, which upholds its commitment to ongoing dialogue with all, aiming at creating shared value. This strategic alignment between the Company’s purpose and shared value is now much stronger and more effective. In 2016, the Company launched, within the EDP Culture Project scope, the so called “Targets with Purpose”, which directly align our financial and operational goals to our purpose – “to use our energy to always provide better care.” Our “Targets with Purpose” include goals to generate value, not only for shareholders, but also for customers, people, environment and community, business partners, assets and operation. In 2016, EDP’s performance in this targets were above 100%. Moreover, important to highlight the consistent engagement to private social investment. For instance, EDP Brasil is investing BRL 20 million Reais in the next three years towards the renovation of the Museum of the Portuguese Language in São Paulo, becoming the master sponsor of the recovery 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 Reais. 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”, EDP is committed to playing a key role in help preserving Portuguese language as the most important legacy Brazil and Portugal share. [See more information at: https://g1.globo.com/sao-paulo/noticia/sp-anuncia-parceria-para-restauracao-do-museu-da-lingua-portuguesa.ghtml]. EDP Brasil has also adopted the innovability concept, which is the integration of innovation and sustainability. Innovability guides the business by constantly questioning the status quo of activities to maximise positive impacts, whereas minimise negative ones along with stakeholders. To that end, in 2016 we also launched ourselves in the business of distributed generation with photovoltaic solar with 4 installations and one extensive project pipeline for 2017.
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?.
With the EDP Culture Project, Miguel Setas was one of the three executives chosen in 2016 as Entrepreneur of the Year in the Sustainable Category at the award ceremony of EY Consultancy. Created in 1998, the award values business leaders who share their will to leave a legacy for the Country with their innovative ideas and futuristic vision. Since 2015, EDP Brasil has integrated the collective mission of finding a common denominator for the organization culture, which aggregates the three thousand associates of EDP Brasil. In 2016, the Company carried out an internal (along with all associates) and external (along with our services providers) dissemination of 12 principles that are the base for Company’s new Culture. In 2016, we launched, in the EDP Culture Project scope, the so called “Targets with Purpose” that directly align our financial and operational goals to our purpose – “to use our energy to always provide better care.” In the year balance, we reviewed our “Targets with Purpose” for 2016. The global results for shareholders, customers, people, environment and community, business partners, assets and operation place our performance above 100%. The results were outstanding. The team’s engagement level continued to rise. In the internal atmosphere research, the engagement level exceeded 80%, level above the average for the best companies in the sample. Finally, the most important: in 2016, EDP has registered zero fatal accidents among associates and service provider, the first time in the past ten years to experience such achievement.
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. The process to define these goals is collaborative. It includes meetings with managing staff and associates allowing the exchange of visions and shared discussion on strategic direction in light of its new purpose of delivering value to stakeholders, perspective future business scenarios, and the difficult task of reconciling needs to actual capacities in order to provide long-term consistency to the purpose. So that later on the entire group’s goals could be consolidated in alignment with the Company’s vision and culture. In order to measure sustainability performance and ensure full reporting and transparency, EDP Brasil takes as reference global targets aligned with its eight United Nations Sustainable Development Goals (see above). 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 53 of our EDP Annual Report 2016). Regarding sustainability reporting to institutional investors, and the capital market, EDP Brasil prepares an annual report according to 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, for the first time in 2016, EDP Brasil has launched an integrated reporting, 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 iniciatives to improve transparency on ESG issues for investors: Global Compact; Brazilian Business Compact for Integrity and Against Corruption; National Pact on Eradication of Slave Labour in Brazil; Brazilian Program GHG Protocol; Carbon Disclosure Project. As a result, EDP Brasil integrated in 2016, for the 11th consecutive year, the Bovespa Corporate Sustainability Index (ISE), alongside other robust evidences of recognition – EDP Brasil was chosen the ALAS20 Company, listed as one of the 150 Best Companies to work in Brazil, recognized as sustainability model by Exame Magazine for the forth-consecutive year, among others. 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) – organised 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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