Scope 1 Emissions
2022 Communication on Progress
Neoenergia S.A.
Published date
June 14, 2022
No. of questions
70
Supplemental files
Environmental PolicyEthics CodeHuman Rights Respect Policy Equality, Diversity and Inclusion PolicyANNUAL REPORT 20222021.07.15_Politica_de Igualdade_Diversidade_Inclusao1_en_US.pdf2021.07.15_Politica_de_Respeito_aos_Direitos_Humanos1_en_US.pdf2021.07.15_Politica_Ambiental1_en_US.pdf2021.07.15_Politica_de_Biodiversidade1_en_US.pdf2021.07.15-Politica-de-Gestao-Sustentavel.pdfPolitica_de_Acao_Climatica.pdf2021.07.15_Codigo_Etica_da_Neoenergia_en_US.pdfCEO Statement
Signed
Governance
Policies and Responsibilities
1. Does the Board / highest governance body or most senior executive of the company:
2. Does the company have a publicly stated commitment regarding the following sustainability topics?
3. Does the company have in place a code of conduct regarding each of the following sustainability topics?
4. Has the company appointed an individual or group responsible for each of the following sustainability topics?
5. Does the company have a formal structure(s) (such as a cross-functional committee) to address each of the following sustainability topics?
Prevention
6. Does the company have a process or processes to assess risk?
6.1. During the assessment of risk, which business relationships are reviewed?
7. Does the company have a due diligence process through which it identifies, prevents, mitigates, and accounts for actual and potential negative impacts on sustainability topics?
7.1. During the due diligence process, which business relationships are reviewed?
Concerns and grievance mechanisms
8. Are there any processes through which members of the company’s workforce can raise concerns about the company’s conduct related to human rights, labour rights, environment, or anti-corruption?
Optional commentNeoenergia has an independent Whistleblowing Channel operated by a specialized firm, with all reports kept anonymous and confidential. Reports can be submitted 24/7 by email, via a toll-free number or on the company website. The contact details of the whistleblowing channel are provided on subsidiaries’ websites, on the intranet, via communications initiatives, and during employee and contractor training. The channel is available to all Neoenergia employees, contractors and society in general. Reports are managed and investigated by the Compliance Unit. When a report is submitted, the whistleblower is assigned a case number and a password. With these details, whistleblowers can track the status of their reports via the Ethics Hotline, on the internet or by phone. The Compliance team provides information about the status of report investigations and post-investigation feedback to whistleblowers via the Ethics Hotline8.1. Please provide additional detail regarding the process(es) the company has through which members of the company’s workforce can raise concerns about the company’s conduct.
9. Does the company provide or enable access to effective remedy to right holders / stakeholders where it has caused or contributed to the adverse impact?
Lessons
10. How does the company capture lessons regarding each of the following sustainability topics?
Optional commentAt the forefront of the best national and international practices, Neoenergia's corporate governance system advanced in the last cycle in order to value ESG aspects. By incorporating new practices, such as the creation of the Sustainability Committee, it has reinforced this commitment already existing in the company, and is now called Governance and Sustainability System.Executive Pay
11. Is executive pay linked to performance on one or more of the following sustainability topics?
Optional commentThe executives' compensation is composed of 30% of the ICP results and 30% of the ILP results. In ICP we have the Safety goals, mandatory for the entire company, which meet the Human Rights item, since the Health and Safety of Workers is a right guaranteed in the Constitution, which deals with the dignity of the human person and the social values of labor. In the ILP we have the ESG goals that meet the Decent Work Environment item, since these goals aim at an inclusive and diverse environment. Executive compensation is not tied to the items below, as justified: a) Anti-corruption: the Company's Compliance system has its effectiveness recognized (Pro Ethics and ISO 37001) and the company has a strong culture of integrity. There is strong engagement of the Company's executives in business integrity issues, especially in the fight against corruption. The Company understands that it does not need, to date, specific anti-corruption indicators linked to executive compensation, considering the current performance of its Compliance system; b) Labor: the Company is rigorous in complying with the labor legislation, and centralizes its controls in the Human Resources area. The use of labor indicators linked to the compensation of its executives could be innocuous considering the current level of compliance with the legislation.Board Composition
12. Percentage of individuals within the company’s Board / highest governance body by:
Optional commentThe Board of Directors is composed of 19 members, including alternates, who were elected and/or reelected in an Extraordinary General Meeting (EGM) to serve until August 2023. Three members are independent and selected externally. One of the independent members, Isabel Garcia Tejerina, an independent member, submitted her resignation on December 15, 2021. She was replaced by Marina Freitas Gonçalves de Araújo Grossi in February 2022, also an independent full member. In the Board, 42.1% of members are between 30 and 50 years old and 57.9% are over 50 years old. The Chairman of the Board does not concurrently serve in an executive position at Neoenergia. The company's governance bodies, including the Board of Directors, are assessed annually by external auditors engaged for this purpose13. Do you produce sustainability reporting according to:
Optional commentNeoenergia has annually reported on its economic, environmental, social and governance performance since 2004. In 2010 the company adopted the Global Reporting Initiative (GRI) Standards and the ANEEL Handbook on Economic, Social and Environmental Reporting in developing its reports. Since 2020, Neoenergia has also drawn guidance from the International <IR> Framework, the Sustainability Accounting Standards (SASB) for the electric utilities sector, and requirements for the Down Jones Sustainability Index (DJSI). This year’s report has additionally incorporated the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). The report also illustrates Neoenergia's commitment to the United Nations Global Compact (UNGC) and Sustainable Development Goals (SDGs).Data Assurance
14. Is the information disclosed in this questionnaire assured by a third-party?
Human Rights
Materiality / Saliency
1. Which of the following has the company identified as material human rights issues connected with its operations and/or value chain, whether based on their salience (i.e., the most severe potential negative impacts on people) or another basis?
Commitment
2. Does the company have a policy commitment in relation to the following human rights issues?
2.1. For each human rights policy, is it:
Prevention
3. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following human rights issues?
4. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with this human rights issue?
5. Who receives training for the following human rights issues?
6. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following human rights issues?
Response
7. During the reporting period, has the company been involved in providing or enabling remedy where it has caused or contributed to adverse impact associated with the following human rights issue(s)?
8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the human rights principles, including any challenges faced and actions taken towards prevention and/or remediation.
Respect for human rights is an essential condition at Neoenergia for establishing long-term partnership relations and for the company's reputation. It is also a commitment assumed with the United Nations (UN) Global Compact. The company and its employees, in application of the Code of Ethics and its corporate policies (especially the Policy of Respect for Human Rights), undertake to respect both ethnic minorities and the internationally recognized rights of indigenous peoples, in accordance with the legislation in force and the obligations established by Convention 169 of the International Labor Organization (ILO). The company, present in regions where there are indigenous communities, promotes that the development of the business activity be carried out with respect for different cultural identities, traditions and environmental riches, since these communities often depend on natural resources for their subsistence. Therefore, it establishes dialogue channels with these communities and their representatives, as well as with the participation of the State, to inform with due transparency and integrity the projects. However, sometimes direct or indirect effects on these communities may occur in some facilities, which is why it tries to promote ethical practices in order to prevent conflicts and generate mutual benefit, which in the long run is the basis of social value. In the selection of suppliers, social and environmental criteria are also considered (environmental, labor, human rights practices and impacts on society), expressed in clauses present in all contracts, regardless of value. Neoenergia values union freedom and therefore does not intervene or control negotiations with its suppliers' unions. Only after the negotiations are concluded does the group follow up on the agreements, to check that the service providers fulfill the obligations undertaken. In the 2021 period no significant risks of occurrences related to human rights violations, including child labor or forced and compulsory labor, were identified.Labour
Commitment
1. Does the company have a policy commitment in relation to the following labour rights principles?
1.1. For each labour rights policy, is it:
Prevention
2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following labour rights issues?
Optional commentThe relationship between the company and the unions is based on respect, transparency and recognition of the legitimacy of the institution as a representative of the workers, within the ethical principles and values that guide good union practices. In this sense, negotiation is primarily used as the main way to adjust behaviors and establish rights and duties between the parties. Union negotiations are part of the labor relations management model in the group's companies, with agreements being established that reflect modern and advanced labor practices, respecting the regional characteristics of the concessions and the possibilities of each business. The Company ensures to all employees the right of free association, organization and union mobilization, as well as using internal communication channels to disclose and inform about the progress of negotiations and holds, together with the unions, meetings to monitor the Collective Bargaining Agreement throughout the year, always proactively negotiating solutions for the various issues that involve employees, through modern and advanced labor practices.3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with this labour rights issue?
4. Who receives training for the following labour rights issues?
5. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following labour rights issues?
Performance
6. What is the percentage of employees covered under collective bargaining agreements?
7. What is the percentage of employees in a trade union or other workers' organization?
8. In the course of the reporting period, what was the percentage of women in:
9. What was the average ratio of the basic salary and remuneration of women to men (comparing jobs of equal value) during the reporting period?
10. In the course of the reporting period, how frequently were workers injured (injuries per hour worked)?
11. In the course of the reporting period, what was the company’s incident rate?
Response and Reporting
12. In the course of the reporting period, has the company been involved in providing or enabling remedy where it has caused or contributed to the adverse impact associated with the following labour rights issues?
13. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the labour rights principles, including any challenges faced and actions taken towards prevention and/or remediation.
People are Neoenergia’s most valuable asset. Therefore, to manage over 15 thousand employees and around 28 thousand contractors with respect, fairness, and care, fostering a pleasant atmosphere of integration and individual development is part of the permanent focus of the company’s people management area. In 2021 the company primarily focused on avoiding Covid-19 contagion, reinforcing the protocols of its teams that remained in the field, as well as during the gradual return to on-site work of vaccinated administrative staff. Neoenergia distributed masks and face shields, adjusted working routines and spaces, periodically conducted mass testing and instruction lives featuring its in-house staff and invited guests, such as infectiologists. The company continues to use its online health platform HealthCheck. This tool can be accessed from a computer or cell phone, and enables the company to adopt increasingly accurate means to fight the disease using employee responses to five questions such as how they feel physically and emotionally, how they are being careful in their daily activities during the pandemic, and their current vaccination status. At the close of 2021 a total 43,615 people worked at Neoenergia, including employees, contractors, and interns.Environment
Commitment
1. Does the company have a formal policy on the following environmental topics?
1.1. For each environmental policy, is it:
Prevention
2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following environmental issues?
3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with these environmental topics?
4. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following environmental topics?
4.1. For each environmental topic in which the company sets timebound goals / targets, what kind of targets has the company set?
4.2. For each environmental topic in which the company sets timebound goals / targets, how is progress against target / goal tracked?
5. In the course of the reporting period, has the company been involved in providing or enabling remedy for any actual impacts associated with the following environmental issue(s)?
Climate Action
6. What were the company’s gross global greenhouse gas emissions for the reporting period?
Scope 2 Emissions
Scope 3 Emissions
Optional commentBrazilian GHG Protocol Program – Neoenergia was awarded Gold reporting status within the program for its 2020 greenhouse gas emissions inventory, which was independently audited and provided transparent information about the company's strategy to decarbonize the economy. Scope 1: 986.065 tCO2e; Scope 2: 967.717 tCO2e; Scope 3: 2.344.106 tCO2e.7. What percentage of the company's revenue was invested in R&D of low-carbon products/services during this reporting period?
8. Has the organization acted to support climate change adaptation and resilience?
Optional commentNeoenergia’s adoption of these recommendations is reflected in its CDP Climate Questionnaire 2021, which it responded to comprehensively and publicly for the first time this year, and for which it received a leadership- level score of A-. Climate reporting communicates Neoenergia's approach to managing climate-related risks and opportunities in its day-to-day activities. In managing climate risks, the company has developed innovative methodologies in collaboration with external partners—including the Climate Center at the Federal University of Rio de Janeiro (UFRJ), WayCarbon and Sitawi—to identify the level of exposure to corporate and business- and site-specific climate risks. During the UN Climate Change Conference (COP 26) held in Glasgow, Scotland, in November 2021, Neoenergia signed the Business for Climate declaration drafted by the Brazilian Business Council for Sustainable Development (CEBDS), pledging to implement measures to reduce and offset greenhouse gas (GHG) emissions, establish internal carbon pricing, decarbonize the value chain, invest in green technologies, and set targets to become carbon-neutral by 2050.Energy / Resource Use
9. Please report the company's renewable energy consumption as a percentage of total energy consumption in the reporting period.
Technology
10. What percent of the company's revenue came from environmentally friendly products / services during this reporting period?
Sector-specific Questions
11. Which sector(s) does the company operate in? If diversified, choose top 3 by revenue.
Sector-specific: Water
12. Please provide details regarding the company's water withdrawal and consumption (own operations) during the reporting period.
Water withdrawal (volume of water in megaliters):
Water consumption (volume of water in megaliters):
13. Please provide details about the company’s water intensity of products in regions with high or extremely high water stress.
Sector-specific: Air pollution
17. Where applicable, please report the company's emissions of the following pollutants during the reporting period.
Sector-specific: Waste
18. Please report the company's total weight of waste generated in metric tonnes during the reporting period.
19. Please report the percentage of the company's waste that was hazardous waste (i.e., hazardous waste ratio) during the reporting period.
20. Please report the company's estimated metric tonnes of single-use plastic consumed wherever material along the value chain during the reporting period.
Overall Environment
21. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the environment principles, including any challenges faced and actions taken towards prevention and/or remediation.
Neoenergia constantly reinforces its commitment to sustainable development through initiatives that promote the awareness of society for the preservation of the environment. It adopts a strategy based on generating renewable energy, building increasingly intelligent grids and providing solutions for consumers, so as to affirm its contribution to the energy transition. In this line, and as part of the Governance and Sustainability System, it has four specific policies for environmental management: ❙ - Sustainable Management Policy; - Environmental Policy; - Climate Action Policy; - Biodiversity Policy. Its content guides the Environmental Management System (EMS), which follows the Iberdrola Group's global guidelines and enables the development of a common environmental structure among the group's companies, according to the performance of the different businesses and respecting regional specificities. It also aims to measure and evaluate their environmental performance, considering a life cycle perspective. In addition, through the EMS, these policies are converted into the following environmental guidelines: ❙ Protect the environment and halt the loss of biodiversity; - Combat climate change and its effects; - Ensure sustainable modes of production and consumption; - Strengthen alliances with stakeholders for sustainable development. In this context, the company proposes to promote innovation and eco-efficiency and progressively reduce the environmental impacts of its activities and acts based on the precautionary principle, by which it adopts measures capable of minimizing environmental risks. The mitigation hierarchy (avoid, minimize, remediate and, as a last option, compensate) is applied in all projects. In the environmental impact assessment processes, alternatives for project location are analyzed, being decisive to avoid the installation of new infrastructure in protected areas or areas of high biodiversity value. |GRI 102-11| In addition, it acts to reduce atmospheric emissions and carries out its own inventory of greenhouse gas (GHG) emissions, verified by independent auditors, which allows monitoring and building trajectories to achieve the goal of neutralizing carbon emissions by 2050 The company's actions go beyond the supply of sustainable energy. The hydroelectric plants carry out several environmental projects, such as reforestation in the surrounding regions, ensuring the preservation, maintenance and increase of the local flora, as well as the recovery of river springs, in the three main Brazilian biomes (Amazon, Atlantic Forest and Cerrado), with most of these forest areas in an advanced stage of conservation, while the others are in the recovery, recomposition and/or reforestation phases. In Transmission, the highlight is the fauna scaring and rescue program, which protects animals close to the operational sites of the group's subsidiaries. (More information in Biodiversity, page 54). Also promoted by the business is the project for capturing rainwater, with the aim of reusing a natural resource that is abundant in certain seasons and regions of Brazil. In addition to the projects for the recovery of springs, the group's hydroelectric plants have almost 30 thousand hectares of preserved areas in the three main Brazilian biomes (Amazon, Atlantic Forest and Cerrado), most of these forest areas being in an advanced stage of conservation, while the remaining areas are in the recovery, recomposition and/or reforestation phases. These and other initiatives, which consumed R$ 4.9 billion1 of environmental investment in 2021, are aligned with Neoenergia's commitment to the SDGs, especially the fulfillment of Goals 7 (Clean and Accessible Energy) and 13 (Climate Action) and contributes directly to SDGs 6 (Drinking Water and Sanitation), 9 (Industry, Innovation and Infrastructure), 15 (Life on Earth) and 17 (Partnerships and Means of Implementation).Anti-corruption
Commitment
1. Does the company have an anti-corruption compliance programme?
2. Does your company have policies and recommendations for employees on how to act in case of doubt and/or in situations that may represent a conflict of interest, e.g. with regard to gifts and hospitality, donations, sponsorship, or interactions with public officials?
Prevention
3. Who receives training on anti-corruption and integrity?
3.1. How often is such training provided?
4. Does the company monitor its anti-corruption compliance programme?
Response and Reporting
5. Please report the company's total number and nature of incidents of corruption during the reporting year.
6. Within the reporting period, what measures has the company taken to address suspected incidents of corruption independently or in response to a dispute or investigation by a government regulator?
7. Does your company engage in Collective Action against corruption?
8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the anti-corruption principle, including any challenges faced and actions taken towards prevention and/or remediation.
Neoenergia’s policies on Anti-Corruption & Fraud and Crime Prevention and its manuals on Donations, Sponsorship & Social Investment, on Receiving and Offering Gifts, Hospitality and Advantages, on Dealings with Government Officials and on Conflicts of Interest support its efforts to combat all forms of corruption, fraud, bribery, favoritism, influence peddling, extortion and kickbacks internally or in its interactions with suppliers, partners or government officials. Neoenergia’s policies also detail rules and procedures that support SDG 16 (Peace, justice and strong institutions) by enforcing zero tolerance with regard to corruption and fraud of any kind and in any form. The company's Anti-Corruption & Fraud Policy is distributed to all company employees (including executives and Board members), who receive training to prevent misconduct. Neoenergia is a member of the Global Compact Network Brazil’s advisory board, where it supports joint anti-corruption initiatives; the company has subscribed to the anti-corruption manifesto of Instituto Ethos, which helps to implement policies that promote integrity and anti-corruption, as well as mobilizing companies and corporate organizations; and it is a member of the Ethos anti-corruption working group. In the 2021 reporting period Neoenergia marked Anti-Corruption Week by organizing a live-streamed event with a guest speaker, as well as quizzes for employees, who won books about ethics and integrity as prizes. Starting at registration, Neoenergia suppliers must agree to comply with the company’s Code of Ethics and Anti-Corruption Policy; later, when contracts are formalized, they must include anti-corruption clauses to ensure compliance with these principles. In 2021, 79.31% of suppliers and service providers attended training on compliance. Any procurement agreement equal to or greater than R$ 6.5 million—including multiple contracts with the same supplier that exceed this amount in aggregate—undergoes compliance assessments to minimize risks. The same procedures apply to decentralized purchases and work orders for consulting, advisory, legal and representation services, market intelligence and advertising services, and sponsorship contracts, regardless of the amount. In addition, as from 2021 all new suppliers registered for centralized and decentralized procurement (consulting, advisory, legal, representation, market intelligence and advertising services) have been entered into the Dow Jones Risk & Compliance tool and are now monitored on a daily basis on compliance aspects. Group companies do not make financial contributions or donations to political parties, politicians or people related to them, or to any partisan association or union.