Contents
1. Introduction 2
About the report
Highlights
Message from Management
2. Corporate profile 11
Eletrobras
Industry overview
3. Strategy and vision of the future 17
Strategic planning
R&D and Innovation
Sustainability vision
How we generate value
4. Governance, ethics and compliance 37
Evolution
Corporate governance
Ethics and Compliance
Risks and Opportunities
5. Performance and results 59
Generation
Transmission
Distribution
Sector programs
Financial results
Capital markets
1
6. Responsible environmental management 80
Management
Water
Climate changes
Biodiversity
7. Relationships 97
Management
Employee development
Customer Satisfaction
Aligned suppliers
Community Engagement
GRI Content Index 125
Capital Map 135
Assurance report 136
Acknowledgments 139
CONTENT
ANNUAL REPORT • 2017 2
CONTENT
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION 3
About this report
G4-30; G4-24; G4-25; G4-26; G4-27; G4-28, G4-32; G4-33
of Executive Officers and the Board of Directors, according to international
verification parameters. Learn more in the Assurance Report on page 136.
For the17th consecutive year, we publish our Annual Report,
providing transparency to the management and performance
of Eletrobras companies operation between January 1st and
December 31st, 2017.
The indicators in this report represent the companies that make
up 100% of our revenues.
Best reporting practices
The report is based on global best reporting and management
practices in corporate sustainability:
• Guidelines of the Global Reporting Initiative (GRI, version G4),
Core option;
• Principles of the Global Compact of the United Nations (UN);
•
•
Sustainable Development Goals (SDG);
Integrated Reporting (IR) Framework, adopted for the first
time, in line with the international tendency of sustainability
reports and the company’s strategy.
Reliability
Materiality
G4-18; G4-19; G4-23
For the 2017 Annual Report, we carried out a new materiality process to
map the most important themes for business sustainability, that is, with
greater potential for impact and relevance in the opinion of our various
audiences. The process was based on the following steps:
1. Internal scenario assessment
Identification of material themes in the Stakeholder Survey results, applied
by all Eletrobras companies, from the data provided by the relationship
channels (Ombudsman, Facebook and Twitter), media reports, risk maps
and significant fines and in the SDG prioritized by the management in its
Business and Management Master Plan 2018-2022.
2. External scenario assessment
Benchmark of the material themes for the electric sector.
3. Prioritization with internal expert review
Workshop with sustainability coordinators of Eletrobras companies,
based on the GRI guidelines and the Integrated Reporting for prioritizing
material issues, considering their potential impact and relevance in the
company’s strategy.
In line with our objective of presenting reliable information, as in
recent years, the information published in the profile, strategy
and governance chapters and the sustainability performance
indicators were audited by KPMG Brasil, as directed by the Board
4. Prioritization with external expert review
Interviews with sustainability and in the electric sector specialists,
representatives of external stakeholders of the company.
CONTENT
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION 5. Validation with the leadership
Presentation of the materiality analysis
process and the inferred priority themes to
the Board of Directors, in order to align with
the business strategy and validation of the
company’s materiality matrix, relative to the
2018-2020 period, as follows.
4
Limits of impacts of relevant themes
G4-20; G4-21
Themes
1. Retention and
development of
employees
Within Eletrobras
(subsidiaries)
All the company’s
business
Outside Eletrobras
(stakeholders)
Employees and investors
Related GRI Indicators
G4-10, G4-LA1, G4-LA2,
G4-LA9, G4-LA10, G4-LA11,
G4-LA13, EU14
2. Relationship with
communities
All the company’s
business
Communities, society and
government
G4-HR8, G4-SO1, G4-SO2,
EU-20, EU-21, EU-22
3. Water (availability
and quality)
4. Climate Change
and Renewable
Sources
5. Biodiversity
All the company’s
business, except
Eletropar
All the company’s
business, except
Eletropar
All the company’s
business, except
Eletropar
Communities, society and
government
G4-EN8, G4-EN9, G4-EN10,
EU-21
Investors, communities,
society, suppliers,
government and
customers
G4-EC2, G4-EN15, G4-EN16,
G4-EN17, G4-EN18, G4-
EN19, G4-EN20, G4-EN21,
EU-1, EU-2, EU-6, EU-10
Communities, society,
government and investors
G4-EN11, G4-EN12, G4-
EN13, EU-21
6. Relationship with
suppliers
All the company’s
business
Suppliers, investors and
society
7. Ethical culture
All the company’s
Business
All
G4-12, G4-13, G4-EC9,
G4-HR1, G4-HR4, G4-HR5,
G4-HR6, G4-HR12
G4-56, G4-57, G4-58,
G4-HR3, G4-SO4, G4-SO5,
EU-21
G4-LA5, G4-LA7, 403-2, G4-
LA7, G4-LA8, EU-16, EU-18
8. Health and safety
(employees)
All the company’s
business
9. R&D and
innovation
All the company’s
business
Employees and investors
Society, investors,
government, suppliers and
customers
EU-8
10. Governance and
risk
All the company’s
business
All
G4-2, G4-34 to G4-55
Instructions
This report brings GRI disclosures related to all these issues, as well as other indicators, not necessarily related to our
materiality matrix, complying with our commitment to report on other initiatives to promote sustainability.
CONTENT
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION Useful reading tools
Throughout these pages you will see
the symbol GRI XXX-XX indicating which
disclosure we are responding to in
that content.
At the end of the publication, the
GRI Content Index references the
disclosures and pages where
they appear.
There you will also find a list of the
disclosures with the Sustainable
Development Goals (SDG) and with
the Global Compact, initiatives of the
United Nations (UN).
Right after the GRI Content Index,
you will find the Map of Capitals
that, in line with the Best Practices
of the Integrated Report, indicates
which capital / assets essential to the
company’s sustainability are addressed
in each chapter of the report.
Enjoy your reading!
5
Value creation
This is the theme of our report this year, reflecting the period in which we
have taken important steps towards valuing the company from several
points of view:
• Valuing our image, brand and services;
• Valuation our actions as a reflection of increased confidence in the
business management and strategy;
• Valuing relationships with our stakeholders: suppliers, customers and
employees.
To tell this story, we have created a symbol that will accompany you
along the content highlighting the initiatives and results achieved that
supported our value creation in the year:
This symbol is a visual representation of the value creation
movement: the expansion of a reality.
CONTENT
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION
Highlights
6
Strengthening and evolution of corporate governance, risk
management and compliance practices
Development of sustainability practices in a line with
best global practices
We have improved the process of selecting and qualifying
leaders page 44
We have reviewed our Bylaws and other important governance
instruments page 40
We have received two important recognitions for our achievements in
governance page 38
We create a policy, a dedicated area and a committee related to
Information safety page 52
We implemented an integrated reporting channel for all Eletrobras
companies, managed by an independent third party page 48
We have established a due diligence process for critical suppliers
focused on promoting integrity in the supply chain page 51
We received the maximum grade in the Anti-Corruption Program
category of the Transparency in Corporate Reports ranking of the
NGO Transparency International page 38
We have reduced the Material Weaknesses identified in relation to
financial reporting internal controls from 4 in 2016 to 1 in 2017 page 19
We prioritize the Sustainable Development Goals (SDG), in
which the company has the highest potential to contribute
together with its executives page 32
We have developed our value creation model and are
working, on this report, in our adhesion to the Integrated
Report page 36
Responsible social and environmental management
We invested R$ 307.6 million in R&D&I, in a portfolio with
projects directly linked to key aspects of the sector’s
sustainability, such as energy efficiency, climate change
management and management of social and environmental
impacts page 26
We held the first ”Biodiversity and Ecosystem Services in
Business Management” workshop page 90
We contributed with an estimated saving of 21.2 million
MWh through Procel, equivalent to the annual consumption
of 11.2 million households, avoiding the emission of
1.96 million CO2e page 71
CONTENT
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION
Financial discipline, cost reduction and improvement of the 2016
results vs 2017
Career development, meritocracy and people
appreciation
7
We reduced the Net Debt/Managerial Ebitda ratio from 6.7x to 3.7x
page 20
We reduced the ratio of the sum of Recurring Personnel, Material,
Services and Other (PMSO)/Regulatory PMSO from 1.55x to
1.33x page 20
We concluded the preparation and analysis of the privatization
process of all six distributors, and the sale model of the stake in 70
SPEs, totaling an amount of R$2.5 billion at book value page 20
We have created an Integrated Trading Committee, that unifies
and optimizes the energy trading strategy and process of all our
generation companies page 76
We have worked on the qualitative and quantitative
analysis of our employees as a premise for a
sustainable and efficient model, adhering to the
company’s strategic plan page 99
We have developed the ”Eye on the Future”, pilot
project of succession mapping, supporting the
performance management improvement, meritocracy
and the identification of career development
opportunities page 108
TL Construction Tucuruí-Manaus - Eletrobras holding / Jorge Coelho
CONTENT
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION
Message from the management
G4-1
8
Business sustainability is the ability to generate results at an optimal level
over time. This is only possible if the company obtains and uses the necessary
resources for its business - people, inputs, capital, relationships, etc. - in a
correct and responsible way, keeping healthy its ecosystem and its capacity to
generate value and results.
For Eletrobras, the year 2017 was a continuation of a broad work begun in the
previous year to recover our operational and financial capacity and to strengthen
the foundations of our sustainability and then generate and sustain the results.
Our Business and Management Master Plan (PDNG) 2018-2022, unfolding from
the Strategic Plan 2015-2030 (PE 2015-2030), maintained the three strategic
pillars of the previous edition (2017-2021) - Governance and Compliance,
Financial Discipline and Operational Excellence - and brought two pillars
essential to the moment of transformation and search for business sustainability
and sustainability: Valorization of People and Sustainable Performance.
In 2017, we achieved important advances in relation to the initiatives planned for
the PDNG 2017-2021:
We have strengthened Eletrobras’ governance with the committed work of
the employees, the Executive Board and the Board of Directors to rescue our
credibility. Highlights in this regard in 2017 include the creation of a unified
and independent external complaint channel, the restructuring of the policies
and bodies responsible for promoting compliance and integrity culture in the
company, the full revision of Eletrobras’ By-Laws, and implementation of a single
competence policy for the whole group.
CONTENT
José Guimarães
Monforte –
Eletrobras holding/
Jorge Coelho
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION All this has been recognized. We achieved
two important certifications to recover
our credibility: in November 2017, the
Certification of the Governance Indicator
- IG-Sest Level 1 (level of excellence), an
innovation developed by the Secretariat
of Coordination and Governance of State
Companies (Sest) to bring more effectiveness
and transparency in the follow-up of good
governance practices by federal state-owned
companies, and in March 2018, Eletrobras’
certification in the State Companies
Governance Highlight Program of B3 – Brasil,
Bolsa, Balcão.
We have achieved important results in the
promotion of operational excellence, which
contribute to the financial discipline of the
business. The Net Debt / Adjusted EBITDA
ratio of 6.7 in 2016 went to 3.7 in 2017, with a
reduction target of less than three at the end
of 2018.
This process was based on cost reduction,
based mainly on the resizing of our staff,
which began in 2017, with voluntary
termination plans, to be continued in 2018.
These plans provided estimated annual
savings of R$ 855 million (90% of the
target), in addition to the cut of 758 gratified
functions, which led to a reduction of R$
74 million in annual costs in 2017. By 2018,
cost reduction will be intensified with the
implementation of our Shared Services
Center and the unification of our Integrated
Enterprise Management System (Pro-ERP).
Other highlights in this pillar providing us
with advances in 2018 in improving our
capital structure are the beginning of the
corporate restructuring between Eletrosul
and CGTEE - to achieve gains in operational,
tax, economic and financial synergy - and
the completion of modeling for privatization
of our energy distribution companies and
for the sale of interests in Special Purpose
Entities (SPCs), whose auction is expected to
occur until the first half of 2018.
We also continue the expansion projects of
our operation in generation and transmission.
We invested R$ 4.1 billion in corporate
operations and interests in SPCs, with R$
1.6 billion in transmission and R$ 2.5 billion
in generation. In the expansion process, we
emphasize the start-up - two months ahead
of the deadline stipulated by the Brazilian
Electricity Regulatory Agency (ANEEL)
- of the first Belo Monte transmission
system bipole and the start-up of the first
hydroelectric turbine at the UHE São Manoel,
more than five months in advance over the
contracts’ deadline. The project is an ultra-
high voltage direct current line with 2,100 km
9
connecting the Xingu (PA) substation to the
Estreito (MG) substation, with capacity to
transmit up to 4 thousand MW.
We also continued to invest in research,
infrastructure and environmental quality,
with a contribution of R$ 167 million in
the year.
Regarding sustainable performance – an
irrevocable commitment to our business,
which continually supports the UN Global
Compact - in 2017 we have also worked
on important initiatives. We promoted
the prioritization of the Sustainable
Development Goals (SDG) for which we
will contribute aiming at implementing the
Agenda 2030 in Brazil.
The highlight in the maturing of the
company’s socio-environmental
management in the year was the evolution
of our strategy to adapt to climate change.
We signed the Open Letter “Private Sector
Supports Carbon Pricing in Brazil”, a private
sector paper on carbon pricing, developed
by the Climate Corporate Initiative, with
support from the World Bank’s Carbon
Pricing Leadership Coalition (CPLC), and we
adhere to the “Positioning on mechanisms
of carbon pricing”, document launched in
2016 by the Climate Corporate Initiative.
CONTENT
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION 10
These results, achievements and recognitions were only
possible with the trust of our stakeholders, who believed in the
management plans and gave all the support so that we could work
and present the data in this report, and the commitment of our
employees, who were engaged in the transformation process.
The changes and advances prepare us to face the great challenge
of democratizing the company’s capital, announced by the
Ministry of Mines and Energy in August 2017.
There is a lot of work to do, but the challenges overcome in 2017
show that the company is able to respond with courage, speed
and efficiency to the changes required by the spirit of time.
Enjoy your reading,
Wilson Ferreira Junior
Eletrobras CEO
José Guimarães Monforte
Board of Directors President
Wilson Ferreira
Junior – Eletrobras
holding/Jorge Coelho
CONTENT
ANNUAL REPORT • 2017CHAPTER 1 • INTRODUCTION 11
CONTENT
ANNUAL REPORT • 2017CHAPTER 2 • CORPORATE PROFILE Eletrobras
G4-3; G4-4; G4-7; G4-8; G4-9; G4-13
Founded in 1962, Centrais Elétricas Brasileiras S.A. – Eletrobras controls 13 subsidiaries in electric power generation, transmission, and
distribution, a research center (Eletrobras Cepel), a holding company (Eletrobras Eletropar), and half of the capital stock of Itaipu Binacional. The
Company also holds an indirect interest in 175 Special Purpose Entities (SPEs), and minority interests in 26 companies.
2017 Eletrobras Overview
The 16th largest energy company in the world in generating capacity
12
Transmission
Distribution
International operations
31%
of Brazil’s
capacity
64.944 km
of transmission lines
with voltages above
230kV
4,4 million
customers
8
international
projects
4,7 GW
in generation
projects
900 km
in transmission
lines
Generation
48.134 MW
of power generation
capacity in
233 power plants
We are the
5th hydroelectric power generator
in the world considering installed capacity
49%
of Brazil’s
total
In 476
municipalities
95% of capacity from clean energy sources
Intangible assets overview
42.350 MW in 48 hydroelectric power plants
2.634 MW in 112 thermoelectric plants
1.990 MW in 2 nuclear power plants
1.158 MW in 70 wind farms
1 MW in 1 solar power plant
22.921
employees
R$ 307,6 million
invested in R&D&I
15,9 thousand
suppliers
R$ 527,0 million
in social and
environmental actions
R$ 260,9 million
invested in social, cultural
and sports projects, as
well as projects related
to land development,
promotion of citizenship,
children and adolescents
rights, environment, creation
of job opportunities
and income and health
and food safety
surrounding communities.
Focus
Projects of regional integration and renewable energy
generation in Latin America, aimed at local partnerships,
focusing on value creation, ensuring adequate return
on investment.
Competitive advantages
Expertise in large hydropower projects and regional
integration, size and favorable geopolitical positioning.
2017 Highlights
· Under the agreement between Eletrobras, Bolivia's National
Electricity Company (Ende) and the Development Bank of
Latin America (CAF), a contract with the company winning
bidder to develop of a binational hydroelectric power plant
on the Madeira river was signed.
· We maintained a partnership with the Argentine state-owned
company Ebisa (Emprendimientos Energéticas Binacionales
Sociedad Anónima), to develop studies on hydropower
development in the Uruguay River, on the border between
Brazil and Argentina.
Learn more in our Management Report (page 63)
available at https://bit.ly/2L2gBQv
CONTENT
ANNUAL REPORT • 2017CHAPTER 2 • CORPORATE PROFILE Corporate structure of Eletrobras companies
13
(1) The number of SPEs is taking into account direct and indirect interests, and excluding the Specific Purpose Entities participating in more than one Eletrobras company, differently from the
numbers considered in the tables of each company.
(2) The number of SPEs does not consider Serra do Mel I, II and III wind farms, since they are developed by consortia.
CONTENT
ANNUAL REPORT • 2017CHAPTER 2 • CORPORATE PROFILE In 2017, Eletrobras sold its entire stake in CPFL Energia S.A.
in the company’s public offering of common shares, totaling
1,802,104 shares sold and raising R$49.9 million.
We will sell our distribution companies by 2018,
allowing us to focus on generation and transmission,
and we will also carry out the sale auction of some
of our holdings in Specific Purpose Entities (SPEs).
These actions will significantly contribute to our
commitment to financial discipline, essential for the
sustainability of the business.
More information on these sales is available in our 2018-2022
Business and Management Master Plan, on page 21. To learn
more about other corporate events for 2017, please access the
Management Report (page 17), available at:
https://bit.ly/2rFK0Hk.
Ownership structure
G4-9
A publicly-held, government-controlled company, Eletrobras is
controlled by the Brazilian government and its shares are traded
on the São Paulo Stock Exchange, the New York Stock Exchange
(United States), and the Madrid Stock Exchange (Spain).
Learn more about share distribution by shareholder and by
region in our Management Report (page 110), available at:
https://bit.ly/2rFK0Hk.
14
In 2017, the Brazilian Ministry of Mines and Energy (MME) proposed the
democratization of Eletrobras’ capital and, in January 2018, recommended
that the process should be done by means of capital increase through public
offering of common shares. Learn more about this issue in the “Regulatory
Overview” section on the following page.
1,352,634,100 shares
80,4%
COMMON
SHARES
19,6%
PREFERENTIAL
SHARES
Traded on 3 stock exchanges
ELET3 and ELET6
Shares on the São
Paulo Stock
Exchange in Level 1
of Corporate
Governance
American
Depositary Receipts
(ADR) NYSE EBR and
EBR-Bon the New
York Stock Exchange
XELTO and XELTB
shares on the
Madrid Stock
Exchange through
the Latibex
program
Learn more about the distribution of the company's
share capital at: https://bit.ly/2jzFV3J
CONTENT
ANNUAL REPORT • 2017CHAPTER 2 • CORPORATE PROFILE Industry overview
Macroeconomic indicators
Gross Domestic Product (GDP) closed 2017 with growth of 1.0%, the
first high after two years of decline.
Inflation measured by the Extended Consumer Price Index (IPCA)
reached 2.95%, compared to 6.29% in 2016, remaining below the
National Monetary Council target.
The General Price Index IGP-DI ended 2017 with deflation of 0.42%,
against 7.15% in 2016.
The trade balance registered a record surplus of US$67.1 billion in
2017, compared to US$47.7 billion in the previous year.
Sector indicators
The electric power sector reached total consumption of 463,948 GWh
by December 2017, an increase of 0.8% compared to 2016, according
to the Brazilian Energy Research Agency (EPE), with increased
consumption in all classes and regions, except the Northeast.
Industrial: +1.3%
Residential: +0.8%
Commercial: +0.3%
Northeast: -0.1%
North: +0.6%
Southeast: +0.3%
Midwest: +1.9%
South: +3.0%
15
Regulatory overview
The highlight of 2017 was the Brazilian Ministry of Mines and Energy
proposal to democratize Eletrobras’ capital. The decision was
approved by the Board of the Investment Partnership Program (CPPI).
At the beginning of 2018, the draft Bill on Eletrobras privatization and
sales model was sent to the National Congress. The document is fully
available on the Ministry of Mines and Energy website
http://www.mme.gov.br.
The execution of the operation is also subject to other governmental
authorizations, to the evaluation of legal and regulatory
authorizations, to the evaluation of the model to be adopted
and compliance with other procedures, since it is a publicly-held
government-controlled company with shares listed on the São Paulo
Stock Exchange (B3 – Brasil, Bolsa, Balcão), the New York Stock
Exchange (NYSE) and the Madrid Stock Exchange (Latibex), as well
as to evaluation regarding the contractual obligations assumed by
the Company.
In addition to the draft bill aimed at the privatization, the government
issued Provisional Measure No. 814, dated December 28, 2017, which
amends Law No. 12,111, of December 9, 2009, which provides for
electric power services in Isolated Systems, and Law No. 10,438, of
April 26, 2002, which provides for the expansion of emergency electric
power supply and extraordinary tariff recomposition, establishes the
Alternative Sources of Electric Energy Incentive Program (Proinfa)
and the Energy Development Account (CDE) and provides for the
universalization of the public electric power service.
CONTENT
ANNUAL REPORT • 2017CHAPTER 2 • CORPORATE PROFILE 16
This measure repeal Article 31 of Law 10,848/2004, which excluded Eletrobras and its subsidiaries – Furnas, Chesf, Eletronorte, Eletrosul and
CGTEE – from the National Privatization Program.
The democratization of capital is one possible way to expand the Company’s potential in order to promote the transformations
initiated with the 2017-2021 Business and Management Master Plan and reaffirmed in the “Challenge 22: Sustainable Excellence”, the
2018-2022 Business and Management Master Plan, essential for the business sustainability and continuity over time.
In July 2017, the Ministry of Mines and Energy released Technical Note 05, which suggests a number of legal measures to enable the sustainable
future of the electric power sector in the long term. Eletrobras, as the other agents, significantly contributed to the improvement of the proposals
for adjustments in the sector regulation.
More detail on other regulatory events that influenced the industry’s generation, transmission and distribution in 2017 is available in our
Management Report (page 20) at: https://bit.ly/2rFK0Hk .
Substation in Itaipu – Itaipu Binational/Caio Coronel
CONTENT
ANNUAL REPORT • 2017CHAPTER 2 • CORPORATE PROFILE 17
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Strategic planning
G4-56, G4-42, G4-44
Our strategic planning was developed to identify trends, risks and uncertainties related to our business. The studies that supported targets and
guided this plan considered current expectations and future events, as well as financial and non-financial trends within a 15-year time frame
(2015-2030).
18
2015-2030 Eletrobras strategic plan
Business identity
Strategic guidelines
Mission: operating in the energy
markets in an integrated,
profitable and sustainable
manner.
2030 Vision: being one of the
3 largest clean energy global
companies and one of the 10
largest electric power companies
in the world, with profitability
comparable to that of the best in
the industry and being recognized
by all stakeholders.
Values: ethics and transparency;
focus on results; people
appreciation and commitment;
entrepreneurship and innovation
and sustainability.
As a result of the 2015-2030 Strategic Plan,
we developed the Business and Management
Master Plan (PDNG), for the five-year period,
based on corporate identity and strategic
guidelines. The PDNG includes targets and
projects to achieve strategic objectives and
projections to support decisions on business
portfolio, as well as guiding the preparation
of business and management plans (PNG) of
our companies.
The PDNG aims to present a
proposal to address the challenges
of Brazil’s current economic scenario
and of the electric power sector,
focusing on solidifying the business
support bases.
Below are the main advances made under the
PDNG prepared in 2016, with focus on the
2017-2021 period, and the new features and
challenges of the current PDNG, prepared in
2017, with focus on the 2018-2022 period.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE 19
2017-2021 PDNG achievements
Throughout 2017, the PDNG remained in line with its strategic objectives and achieved
important results in the three strategic pillars considered priority in the next five-year period.
Challenge 21: Sustainable Excellence
Governance and compliance
Objective: increase transparency and investor confidence by improving internal
controls and risk management.
Highlighted Initiatives
• Implementation of an independent and unified complaints channel page 48;
• Establishment of a due diligence process to ensure the integrity of critical
suppliers page 51;
• Creation of a Committee and the Information Security area page 52.
2017 TARGET: ELIMINATE material weaknesses in our internal controls as
identified by independent auditors.
• Revision of our companies’ Bylaws and implementation of the Board of
Directors’ Internal Policy page 40;
• At the beginning of 2018, we received certification in B3’s Highlight Program
on Corporate Governance of State-Run Companies and
in the governance indicator of the Department of Coordination
and Governance of State-Run Companies (IG/SEST) in Level 1 (Excellence)
page 9.
Megawatt Solar
Power Plant –
Eletrobras Eletrosul/
Hermínio Nunes
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Operational excellence
Financial Discipline
20
Objective: reduce operating costs, in line with the regulatory
remuneration defined for the company and aligned to a healthy
sustainable level for the business.
Highlighted Initiatives
• Actual reduction of 3.46%, or R$441 million, with expected
reduction of R$1.7 billion by December 2018 with the adoption of
initiatives that favored operational excellence;
• Organizational restructuring with a reduction of 758 gratified
functions, exceeding the target by 29%, and saving R$74.3 million
per year, 10% above the target;
• 2,055 accessions to the Extraordinary Retirement Plan (PAE),
resulting in estimated savings of R$826 million per year page 99.
2017 TARGET: Align our Recurring Personnel, Material, Services
and Other (PMSO) accounts, maintaining our PMSO equivalent to
a maximum of 1.10 times the Regulatory PMSO.
RESULTS IN 2016
STATUS AT THE END OF 2017
1.54
TIMES
PARTIALLY
ACHIEVE
1.33TIMES
• Accumulated gains of R$287.9 million with integrated operations in
Energy Trading page 76;
• Progress in preparations for the implementation of the Shared
Service Center (SSC) and the Integrated Management System
(PRO-ERP), which should lead to efficiency and synergy gains;
• Reduction of R$75 million in administrative costs, overtime,
hazard and on-call pay.
Objective: reduce the company’s indebtedness through the sale of
assets.
Highlighted Initiatives
• Adhesion to the new REFIS, a program for the payment of federal
tax debts, and improvement of the federal tax offsetting process,
which generated a benefit of R$1.8 billion;
• Conclusion of the sale model of the stake in 70 SPEs, totaling R$2.5
billion at book value;
• Completion of the preparation and analysis of the privatization
process of all six distributors, with sale scheduled for May 2018.
2017 TARGET: REDUCE the net debt/EBITDA ratio to less than 4
times.
RESULTS IN 2016
STATUS AT THE END OF 2017
6.7TIMES
ACHIEVED
3.7TIMES
Raising of approximately R$2.0 billion with:
• Sale of CELG D for R$2.2 billion
(R$1.1 billion to Eletrobras);
• Sale of Energisa shares for
R$364.7 million;
• Sale of stake in CPFL
R$46.0 million;
• Sale of interest in the Tumarin hydroelectric project
R$70 million;
• Sale of SPE INTESA
R$282 million.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE 21
2018-2022 PDNG
In 2017, we prepared the 2018-2022 PDNG, with updates from the
last 2017-2021 PDNG to meet the rapid changes in the domestic
scenario and to continue to tackle the challenges that will still persist
in the next five years.
As in the previous plan, three strategic pillars – Governance and
Compliance, Financial Discipline and Operational Excellence – were
prioritized and two new pillars were included:
• People appreciation: prioritizes projects related to the
management of people due to the large number of employees
who have retired or left the Company under the Extraordinary
Retirement Plan (PAE), the Consensual Dismissal Plan (PDC), and
the implementation of the Shared Services Center (CSC) and the
Unified Integrated Management System, scheduled for 2018.
• Sustainable performance: initiatives that demonstrate the
Company’s commitment to the best practices of corporate
sustainability, through the development of projects aligned with
the UN’s Sustainable Development Goals, launched in 2015, in
the 2030 Agenda for Sustainable Development; the prospection
of Green Bonds issuance opportunities; the improvement
of the methodology for measuring R&D&I projects and the
implementation of the integrated reporting model.
In order to achieve the strategic objectives, we set targets and
developed the initiatives presented below.
CONTENT
Repair work at TL – Eletrobras Furnas/Daniela Monteiro
Strategic objectives of the Business and
Management Master Plan | 2018-2022 PDNG:
“Maximize competitive advantages in
generation, transmission and trading, achieving
corporate sustainability recognized by all
stakeholders”.
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE
Challenge 22: Sustainable Excellence
Financial Discipline
People Appreciation
Sustainable Performance
22
Qualitative and quantitative personnel
Define Eletrobras companies' qualitative and
quantitative personnel framework, seeking
to balance the number of employees.
Commitment to the 2030 Agenda
Implement, monitor and report on actions related
to the UN 2030 Agenda, increasing stakeholder
value perception.
Improvement of the Performance
Management System
Improve teams’ performance management
systems, promoting the meritocracy culture
and motivating employees.
Talent Bank and Opportunities
Promote a structured program of internal
and external mobility, enabling process
efficiency and a more balanced distribution
of the workforce.
2018 TARGET:
REDUCE the
accident frequency
rate from
2.18 to 1.38.
2018 TARGET:
REDUCE the net
debt/EBITDA
ratio from
3.7 times to less
than 3.0 times.
Prospecting opportunities via Green Bond
Evaluate the opportunities for the issuance of
”green” bonds, allowing revenue increase with
the implementation of sustainable projects.
Methodology to measure R&D&I projects’ results
Elaborate a unified methodology for analyzing the
results of R&D&I projects, seeking a better
allocation of resources and identification of new
business opportunities.
Implementation of the Integrated Reporting
Implement the Integrated Report model, in line with
the International Integrated Reporting Council (IIRC)
guidelines, making the Company's reports more
solid and transparent.
2018 TARGET:
REDUCE the GHG
emission intensity
(ton of CO2e emitted
per thousand of R$
of Net Operating
Revenue) from 0,348
in 2016 to 0,330.
Privatization of Distributors
Sale of the 6 distribution companies, improving
Eletrobras’ EBITDA indicator.
Sale of administrative buildings
Sale of real estate not linked to the Company's
core activity by reducing administrative costs and
raising funds to settle debts.
Sale of holdings in SPEs and other divestments
Sale of 77 SPEs, generating a revenue of
R$4.6 billion and reduction of the Company’s debt.
Corporate Restructuring (Eletrosul + CGTEE) and
Deverticalization of Amazonas Distribuidora
Aimed at greater operational, tax,
economic-financial and corporate synergy between
companies, generating cost reduction.
Tax Optimization
Better use of Eletrobras companies’ tax credits,
reducing financial expenses.
Compulsory Loan
Mitigate risks associated with legal proceedings
with possible recovery of resources.
Eletrobras Companies’ Pension Fund
Reduce and balance actuarial deficits in order
to achieve a better performance in the results
of pension plans
Zero-based budgeting
Implement a planning and budget methodology
that establishes expenditure limits compatible with
the Company’s economic situation.
Share Portfolio Strategy, held by Eletrobras,
in Affiliated companies
Actively manage the portfolio of shares in affiliates,
allowing an increase in financial gains
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Challenge 22: Sustainable Excellence
23
2018 TARGET:
REDUCE the ratio
between recurring
PMSO and Regulatory
PMSO from 1.33
times for 1.0 time.
Operational Excellence
Organizational Restructuring
New organizational structure due to the implementation
of the SSC, simplifying the structure and reducing costs.
Implementation of the PRO-ERP system
Implementation of a unified information system
providing process standardization and cost reduction.
Shared Services Center (SSC)
Centralization of the administrative activities, generating
the standardization and optimization of processes and
allowing the reduction of operating costs.
Reduction of Personnel Costs
Implement the Dismissal Incentive Plan (PID), with the
goal of reducing the number of employees by 3,017,
as well as reducing expenses with manageable
personnel accounts, which will lead to estimated
savings of R$959 million.
Regulatory strategy for G and T
Increase in revenues from generation and transmission,
with the ongoing negotiations with ANEEL, and manage
the portfolio of infractions with preventive action,
aiming at reducing expenses with fines.
Electric Power Commercialization Committee
Increase efficiency on the commercialization of electric
power, seeking higher revenues through the capture of
synergies identified by the Commercialization Committee
Plan to resume works at Angra 3
Enable the resumption of works, allowing new revenues
from the conclusion of the Angra 3 TPP, avoiding penalties.
Modernization and Automation of Generation and
Transmission Facilities
Implement telephone-assistance resources in the
facilities of the companies, increasing operational
efficiency, reliability and cost reduction.
2018 TARGET:
NO MATERIALS
WEAKNESSES
Governance and Compliance
Consolidation of the 5 Dimensions Program
Adhere to good integrity management practices and corporate
governance, increasing investor confidence.
Continuous Improvement of the Internal Control Environment
Eliminate material weaknesses by mitigating critical risks and
giving greater reliability to the Company’s results.
Implementing Actions to list in Indexes and Obtain
Corporate Governance Seals
Improve business sustainability best practices by increasing
stakeholder value perception.
Preparation for the Democratization of Eletrobras' Capital
Support for the public offering of common shares without
the participation of the Federal Government, allowing new
investments with the resources of the new members.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE
Performance monitoring
Eletrobras continuously monitors its companies performance in achieving established strategies and planned results, favoring the accountability
and identifying needs of adjustments and plan revisions. We also seek to contribute to the performance of the companies, supporting decision-
making processes and encouraging cooperation, integration and articulation between companies and external bodies.
Management tools supporting performance monitoring
24
We agreed on the targets of each company and the plans
of action to achieve them
We reinforce management’s commitment to these targets by
linking variable compensation to them
The Business Performance Target Agreement (CMDE)
Based on our Strategic Plan and its developments in PDNG
and signed by each Eletrobras company.
We monitor the progress of the company’s management
and performance against these targets and plans
Corporate Project Management Office (Corporate EGP)
This monitors, analyzes and informs senior management
of the progress of the relevant projects and programs of
Eletrobras companies – such as those linked to the PDNG,
the General Business Plans of each company and the RVA –
through an integrated management tool.
The EGP follows the good practices of Project Management
Body of Knowledge (PMBOK), as recommended by the
Project Management Institute (PMI).
Management Variable Compensation Program (RVA)
Each executive board of Eletrobras companies relies on at least one
strategic project linked to the RVA for monitoring of the EGP. The
RVA included financial, operational and social and environmental
indicators from the CMDE, reinforcing the commitment of the
companies’ management with the strategic orientation of the Board of
Directors and with the public policies to combat climate change.
The RVA also considers the results of the performance evaluation of
the Board of Executive Officers held by the Board of Directors and
by the Secretariat for Coordination and Governance of State-Owned
Companies (SEST) and the achievement of the individual targets by
the Board of Directors (learn more on page 46).
Profit Sharing Program (PLR)
The PLR is the variable compensation for Eletrobras companies’
employees and is composed of a subgroup of economic and financial,
operating, social and environmental, management and corporate
governance indicators of the CMDE (learn more on page 108).
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Investments
2018-2022 investments (in R$ billion and% of total)
25
In 2017, Eletrobras invested R$5.2 billion,
corresponding to 58% of the budget estimated for
the year. The main differences between investments
planned and carried out were the implementation of
Angra 3, with a 57.6% increase in the initially planned
investing amount, due to the difficulties in relation
to the tariff revision, and the implementation of the
Chesf wind farms, with an unexpected increase
of 244.9%.
In relation to the partnerships, the main investments
were in the implementation of the Belo Monte HPP
(R$0.6 billion), in the Xingu-Estreito transmission
line (R$0.28 billion), in the São Manoel HPP (R$0.23
billion) and in the Jirau HPP (R$0.2 billion).
The PDNG provides for investments of R$19.8
billion for the 2018-2022 period, a reduction of 45%
compared to the 2017-2021 period.
Financing sources (%)
Hand and graph – Eletrobras holding/Jorge Coelho
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE R&D and Innovation
G4-EU8
26
Our commitment to bring energy and
sustainable development to the country is
present in the Company’s mission, vision
and organizational values and in the
transversality of our electric power programs.
The continuous investment in
research & development and
innovation (R&D&I), focused on
promoting clean energy generation,
environmentally less impacting and
socially responsible, creating value
for stakeholders, is fundamental to
achieve this commitment and to our
sustainability strategy. In Eletrobras
companies, this process has been
ongoing for more than two decades
before the legal obligation and goes
beyond our Company, working as a
multiplier of R&D&I benefits among
the entire sector in the country.
Given the relevance of this innovation
process, since 2000, companies in the
electric power sector are required by law
to apply 1% of their net operating revenue
in R&D. At Eletrobras, the Electric Power
Research Center (Cepel), an agency dedicated
to research, development and technological innovation, was launched in 1974, working to
create solutions and products for the entire electric power sector in Brazil.
Founded by Eletrobras Holding, Chesf, Furnas, Eletronorte and Eletrosul, Cepel is the result of
the strategic vision of Eletrobras and MME in relation to technological development
and innovation.
Cepel conducts the Executive Secretariat for Research, Development and Innovation (R&D&I)
and Technology of the Technological Policy Committee (CPT) of Eletrobras companies and its
lines of research are defined according to technological challenges in their areas of activity.
Classified as a “Product Lab”, Cepel has an advanced infrastructure for applied research in
electrical systems and equipment, in the development and supply of technological solutions,
specially related to the generation, transmission, distribution and trading of electric power
in Brazil.
Investments in R& D+I (R$ million)
In 2017, we
invested
R$307.6 million
in R&D&I,
including the
projects of
Eletrobras
companies.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Generation of value of the R&D&I process
We operate throughout the innovation chain
From the early stages* of knowledge production to the launch of
the product in the market, with its application in the daily routine
of the companies, training of the teams and future improvement:
l
e
p
e
C
9
8
7
6
5
4
3
2
New technology in successful operation
Complete new technology, ready
to start operation
Prototype of new technology in an
operational environment
Prototype of the new technology
in a realistic environment
New technology testing in a
realistic environment
New technology testing in the laboratory
Analysis, research and design of
new technology
Creation of the concept and
application of the new technology
r
o
t
c
e
S
1
Monitoring and reporting
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fl
s
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* The development of an innovative technology goes through different maturation stages, according to NASA’s TLR methodology.
27
Developing innovative products and specialized services that
lead to important contributions to the electric power sector and
help consolidate national technological expertise, generating
value and social, economic and environmental development for
different stakeholders
Knowledge support in
the interaction with
universities and
research institutions
Development of innovative
and efficient solutions for:
. manufacturers
. sector organizations
. other companies in the sector
Contribution to
sustainability and
environmental
improvements is
part of at least
60% of projects
Support for projects that
promote the access of
remote communities to
electricity with installation
of solar panels
Development of models that
optimize the energy operation
of the National Interconnected
System (SIN) and support efficient
management of water resources
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE
Contribution to sustainability
Asset management: products focused on the monitoring, diagnosis and
management of the electric power system assets.
28
We present below, among the several projects developed by
Cepel in 2017, those that have the greatest potential to
contribute to the social and environmental aspects for the
promotion of sustainability.
To support the sustainability of its activities, Cepel was
included in the 2018-2022 Business and Management
Master Plan (PDNG), with four goals aimed at improving
R&D&I management:
• % of investments in relation to net operating revenue
•
•
•
Financial autonomy
Laboratory services satisfaction
Implementation of the portfolio of institutional
projects
Learn more on page 61 of the PDNG, available at:
https://bit.ly/2wO6ETU
Industry and sector development
Expansion and operation planning: we offer a series of
methodologies and computer programs widely used in expansion
and operation planning, and real-time operation.
Benefits: these tools are essential for the management
of the sector, within strict safety criteria, enabling the
sustainable use of the country’s energy resources.
In addition, they significantly collaborate for the
diversification of the electricity matrix on a renewable
basis, with the consequent reduction of financial costs,
therefore relevant for the development of the Brazilian
hydroelectricity production.
Benefits: increase the reliability and safety of system operation with
great benefits related to avoiding failures and costs.
Efficiency in transmission: development of optimized transmission
line projects.
Benefits: Higher transmission capacity over long distances with cost
reduction of between 10% and 30%, and lower environmental impact.
Knowledge management and human capital
System operator training simulator: simulator integrated with the
Open Energy Management System (SAGE), which is used by generation,
transmission and distribution concessionaires, as well as the Brazilian Electric
System Operator (ONS).
Benefits: more effective training of the different agents of the
electricity system, simulating the practice in the real management
environmenttema elétrico simulando a prática no ambiente real de
gerenciamento.
Complementary generation
Brazilian Wind Potential Atlas: Cepel updated data from the Brazilian
Wind Potential Atlas of 2001, with information on wind speed and direction
throughout the country and at different heights, and an estimate of its wind
potential. The new atlas provides the results on thematic maps and is publicly
available at: http://www.novoatlas.cepel.br/.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Benefits: generation of knowledge for the entire sector,
promoting the planning and expansion of clean and
renewable wind energy projects in the country.
Planning and operation of new distributed sources: new
distributed and intermittent sources of energy generation have
been quickly disbursed, mainly wind and solar power. With this,
the sector must face important challenges with the expansion
planning model, system operation and the technological
knowledge of the equipment involved. Cepel prepares itself to
tackle these challenges by investing in the evolution of operation
management tools such as Newave (in order to incorporate
these new sources) and Dessem, subjected to approval, to meet
regulatory developments scheduled for 2019.
Benefits: support the transformation of the Brazilian
electrical system into a more sustainable and efficient
model.
For 2018, investments in research on smart grids
solutions will be prioritized – focusing on the creation
of the Smart Grid Laboratory – and research on
complementary generation, with the implementation of
laboratory infrastructure to enable studies related to the
performance of photovoltaic panels.
Climate change management
Greenhouse Gases Emissions from Reservoirs (Balcar): a
project that aims to produce quantitative assessment reference
documents of GHG emissions from hydroelectric reservoirs,
including a bibliographic review of the existing knowledge about
29
the carbon cycle in reservoirs and a document containing guidelines for
the elaboration of quantitative analysis of net GHG emissions in reservoirs.
Between 2011 and 2012, data analysis and modeling were carried out
based on GHG flow measurements and variables in 44 field campaigns in
11 hydroelectric power plants, three still under construction (Belo Monte,
Santo Antônio and Batalha) and eight in operation (Balbina, Tucuruí, Xingó,
Três Marias, Serra da Mesa, Funil, Itaipu and Segredo).
Benefits: brings important data to the discussion on the emissions
from the reservoirs, supporting the companies in the sector in the
inventory analysis of the emissions from their operations. In 2014,
the first results were published. To learn more, please access the
document at:
http://www.cepel.br/data/pages/balcar/LivroBalcar.pdf.
Mudclima: project addressing three dimensions related to climate change:
• Researches for the use of climatological information in the construction
of scenarios of flows to the reservoirs, evaluating the impact of climate
change on the generation of energy in Brazil;
• Strategies and actions for social and environmental adaptation to climate
change, one based on communities and another on ecosystems;
• Development of strategies and adaptation actions aimed at electric
power companies.
Benefits: support the sector in the strategy to adapt to the impacts
caused by climate change.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Management of water resources
Optimization models for the energy operation of the National
Interconnected System (SIN): as hydroelectricity is the country’s
main source of energy, we have a portfolio of models aimed
at optimizing energy operations (such as the Matriz, Newave,
Decomp and Dessem projects), officially adopted for the planning
of the SIN operation.
Benefits: important contribution to the efficient
management of water resources.
Flows forecasting and generating models: Cepel develops
forecasting (Previvaz) and generation models of flow scenarios
(Gevazp), required for the planning of the operation and for
planning and scheduling models of flood control in the reservoirs
of the hydroelectric power plants (Cheias).
Benefits: more efficient management of water resources,
allowing the shared use of reservoirs.
Incorporation of the social and environmental
dimension in the planning of the electric
power sector
Methodologies for the evaluation of the environmental
dimension: among the R&D projects, some are aimed to support
mitigation of social and environmental impacts of the sector,
such as: AAEXP (Environmental Assessment for Expansion),
which develops methodologies for the environmental evaluation
of generation and transmission expansion plans, and SINV
30
(System for Hydropower Inventory Studies of River Basins), which develops
methodologies to assist decision-making processes in the feasibility
of hydroelectric power plant in river basins, based on a multi objective
approach, which considers the energy benefits, as well as negative and
positive social and environmental impacts.
Benefits: mitigation of social and environmental impacts resulting
from the construction of generation and transmission projects.
Promotion of the innovation culture
Eletrobras Holding develops the Corporate Innovation
Program, aimed at promoting a culture of innovation among
its employees and giving them a stronger voice, through
registering ideas to improve the Company’s performance,
according to the themes established in each cycle. In 2017,
the themes were: process improvement, revenue increase,
reduction of material, services and others, and other ideas.
The ideas implemented and that generate results are
certified and automatically compete for the Good Ideas
Award, which happens every year.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Sustainability vision
GRI G4-48
31
Strategic guidance
Our business strategy seeks to balance the
economic, financial, environmental and
social aspects of our projects, preventing
risks and ensuring the availability and quality
of the resources needed for our business
continuity, in order to always maximize the
value generated for our stakeholders.
In order to optimize our
contribution to sustainability
beyond our business and support
priority causes for the country,
we have been signatories to the
Global Compact since 2006 and
have integrated our strategy into
the UN Sustainable Development
Goals (ODS), demonstrating
our commitment to sustainable
development and strengthening
our relationship with society
and government bodies, working
to promote and implement
public policies.
The Global Compact is a United
Nations (UN) initiative that mobilizes
the international business community
to adopt fundamental and globally
accepted values related to human rights,
labor relations, the environment and the
fight against corruption.
Learn more at
www.pactoglobal.org.br.
The Sustainable Development Goals,
also promoted by the UN, are a global
agenda adopted by the UN’s member
states, comprising 17 goals and 169
targets to be achieved by 2030. This
agenda includes actions related to
poverty eradication, health, education,
energy, water, among others.
Learn more at
www.agenda2030.com.br.
CONTENT
Kaiapó girl –
Eletrobras holding/
Jorge Coelho
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE Learn more about the integrating process of our strategy with the SDGs in 2017
1. Mapping
3. Targets and Indicators
32
Diagnosis and correlation between:
Eletrobras
companies’ actions
and programs
17
SDGs
Direct
correlation
with all SDGs
For each prioritized SDG, the companies' Sustainability managers
developed indicators and targets, included in the 18-22 PDNG.
4. Awareness and Engagement
Internally disseminate and raise awareness among Eletrobras companies
for the 2030 Agenda and the prioritized SDGs
Internal Workshop on the SDG
Implementation Guide for companies
with the collaboration of the Global Compact
Network in Brazil (RBPG), the Brazilian Business
Council for Sustainable Development (CEBDS)
and the Global Reporting Initiative (GRI)
Strategic Partnerships
The Federal Government’s Secretariat invited
Eletrobras and other institutions to learn
about the proposal of Brazil's SDG Project and
the opportunities for strategic partnerships
to implement the 2030 Agenda.
2. Prioritization
Identify the SDGs with greater adherence to the strategy from the
point of view of its correlation with:
THE PRESENT
Existing projects and programs
THE FUTURE
Strategic Plan 2015-2030
8 priority SDGs were initially identified
submitted to the evaluation of leadership in the development \
of guidelines for the 18-22 PDNG
Eletrobras companies’ CEOs, directors and executive officers
filed out a form with questions about the comparative materiality
between the eight SDGs and the business. The result was:
5 SDGs were prioritized by the Board of Directors
N
O
I
T
A
Z
I
T
I
R
O
I
R
P
I
G
N
K
N
A
R
Peace, justice and strong institutions
Affordable and clean energy
Industry, innovation and infrastructure
19,11%
16,91%
14,78%
Decent work and economic growth
11,53%
Climate action
11,43%
Good health and well-being
Reduced inequalities
10,90%
8,60%
Responsible consumption and production
6,74%
Learn more about the integrating process of our business strategy with the SDGs in item 4.1.1 and 4.1.2 of our 2018-2022 PDNG, available at: https://bit.ly/2v1hfK2.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE
Management structure
G4-36; G4-48
Voluntary commitments
G4-15; G4-16
33
To ensure alignment between planning, strategy, performance
and sustainability, Eletrobras relies on the Sustainability
Management Executive Committee, which is linked to the Chief
Executive Officer, reports to the Sustainability Committee and
is coordinated by the Superintendence of Strategy, Business
Management and Sustainability.
The committee is responsible for implementing internationally
recognized sustainable management processes, procedures and
tools within Eletrobras companies, monitoring and evaluating
results, as well as establishing goals and improvements.
The superintendence is responsible for supporting and
interacting with the Sustainability Committee, disclosing and
disseminating the guidelines established by the committee, and
proposing improvement plans, topics identified in the materiality
research and the editorial model adopted in the Annual Report.
Worker at Candiota – Eletrobras CGTEE
We endorse national and international initiatives that discuss social,
environmental, economic and human rights issues in business, in order
to expand our potential contribution to sustainable development.
Among them, we highlight:
• Pro-Equity Gender and Race Program, since 2005;
• UN Global Compact, since 2003 (when the first of Eletrobras
companies, Eletrobras Furnas, joined the Compact);
• Declaration of Commitment to Fight Against Sexual Exploitation of
Children and Adolescents, since 2010;
• Carbon Disclosure Project – CDP, since 2010;
• Women’s Empowerment Principles, since 2010;
• Sustainable Development Goals – SDGs, since 2016;
• National Volunteer Program – Viva Voluntário, since 2017.
Eletrobras also voluntarily participates, in a strategic way, in
organizations focused on the promotion of sustainability in different
topics, which are relevant to its business:
Corporate sustainability
• Brazilian Business Council for Sustainable Development – CEBDS,
participating in several technical chambers, such as Social, Climate,
Biodiversity and Water;
• Global Compact Brazil Network – CBPG;
• Global Reporting Initiative – GRI Gold Community;
• Ethos Institute of Business and Social Responsibility.
Business management
• Brazilian Risk Management Association – ABGR;
• National Association of Research, Development and Engineering of
Innovative Companies – ANPEI;
• Brazilian Institute of Corporate Governance – IBGC;
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE • COGE Foundation;
• National Quality Foundation – FNQ;
• National Forum on Ethics Management in State-owned Companies;
• Brazilian Institute of Corporate Governance - IBGC.
Environment
• Brazilian Electricity Sector Environment Forum – FMASE, participating in
several working groups, such as Environmental Legislation, Real Estate
Management, Social and Environmental Costs, etc.;
• Last Initiative for Earth – LIFE.
Climate change
• Brazilian Forum on Climate Change (FBMC);
• Companies for Climate – EPC.
Water
• São Francisco River Basin Committee – CBHSF;
• Rio das Contas River Basin Committee – CBHRC;
• Rio Grande River Basin Committee – CBH – GRANDE;
• Parnaíba River Basin Committee – CBH – PARNAÍBA;
• Committee for the Integration of the Paraíba do Sul River Basin – CEIVAP;
• Preto e Paraibuna River Basins Committee - CBH Preto and Paraibuna Rivers;
• Corumbá, Veríssimo and São Marcos River Basins Committee – CBH
Corumbá, Veríssimo and São Marcos Rivers;
• Bahia da Ilha Grande River Basin Committee – BIG;
• National Council of Water Resources – CNRH;
• World Water Council – WWC.
Fuels
• Brazilian Association of Mineral Coal – ABCM;
• Brazilian Association of Engineering and Environmental Geology – ABGE.
Social development
•
Intersectoral Coordination Center of the Diálogo Empresas e Povos
Indígenas Initiative;
International Association for Volunteer Effort – IAVE (Brazilian delegation);
•
• Brazilian Business Volunteer Council – CBVE.
Child and adolescent protection
• Childhood Brasil;
• ABRINQ Foundation.
34
Diversity and Human Rights
• CBPG’s Working Group on Human Rights;
• Advisory Council on Women’s Empowerment Principles (WEPs) – UN Global
Compact and UN Women ;
• Permanent Committee for Gender Issues of the Ministry of Mines and Energy
and Related Entities;
• United States-Brazil Joint Action Plan to Eliminate Racial and Ethnic
Discrimination and Promote Equality;
• Committee between the Tri-Border Area (Brazil, Paraguay and Argentina) to
Fight Violence and Trafficking of Women;
• Executive Women’s Association;
• Commission for Studies on Gender Violence – OAB/PR;
• Brazilian Women Leaders Network for Sustainability.
Responsible Labor Relations
• Brazilian Association of Quality of Life – ABQV;
• National Pact for the Eradication of Slave Labor – InPacto.
Industry development
• National Nuclear Energy Commission – Copron;
• Brazilian Association of Concessionaires – ABCE;
• Chamber of Electric Power Commercialization – CCEE;
• Brazilian Association of Thermoelectric Generators – Abraget;
• Brazilian Association of Electric Power Distributors – Abradee;
• Cier (Regional Energy Integration Commission) Brazilian Committee – Bracier;
• Utilities Telecommunication Council Latin America – UTC-AL;
• Brazilian Committee for the Production and Transmission of Electric Power –
Cigré-Brasil;
• Brazilian Committee on Dams – CBDB;
• Brazilian Association of Electric Power Generation Companies – Abrage;
• Brazilian Association of Large Electric Power Transmission Companies – Abrate;
• Brazilian Association on Wind Energy – ABE Eólica;
•
International Center on Renewable Energies (CIBiogas);
• Brazilian Committee of the World Energy Council – CBCME;
•
International Hydropower Association – IHA;
• Brazilian Association on Nuclear Energy - ABEN;
• World Association of Nuclear Operators – WANO;
• World Nuclear Association – WNA.
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE 35
How we generate value
G4-56
By nature, our business is aimed
at generating value to society,
through access to energy, which is an
essential resource for the operation
of all productive sectors, as well
as people relations and social and
economic development.
In addition, as Latin America’s largest
company in the electric power sector,
and one of the largest in the world,
we still have the potential and the
responsibility to positively influence
society and our stakeholders in all
aspects of our operations.
To do this end, we seek to identify
resources, assets and capital that relate
to our business and promote responsible
and sustainable management, in order to
our multiply and strengthen them.
This identification is necessary for the
Company to achieve a more cohesive and
efficient approach to corporate reporting,
which reflects its processes and actions,
enabling greater connectivity between
different business units and financial and
non-financial (intangible) results, and
therefore, generate value in the short,
medium and long term.
Our positioning enables us to
exert this positive potential
through progress towards a
more efficient, responsible,
transparent and, therefore,
more sustainable operation
in the long term, with greater
competitiveness and continuity,
generating value for investors
and others stakeholders.
Considering the extension of the
Company’s operations and the
continental dimensions of our
country, the effects of this
integration are multiplied and the
values generated by it are more
visible to the different stakeholders.
The figure below shows the assets
identified and how Eletrobras’ value
creation model works.
CONTENT
Repair work in
the distribution grid –
Eletrobras Distribuição
Amazonas
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE 36
CONTENT
ANNUAL REPORT • 2017CHAPTER 3 • STRATEGY AND VISION OF THE FUTURE 37
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Evolution
In the last years, we have been
working hard to increasily improve
our governance processes and
practices, risk management and
internal controls compliance, in
order to promote a transparent
management, which is
committed to:
Maintaining solid
foundations for
sustainability and
business continuity
The generation of value
to all shareholders
and society and the
strengthening of our
credibility in the
capital market
Continuous attention to
compliance and reliability
of our internal controls
38
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Governance
Policies and tools
G4-56
We have an institutional structure of policies
and management tools that establish
standards, values and behaviors to be
observed for good business governance:
• Bylaws;
• Boards’ Internal statutes and
their committees;
• Annual Chart of Public Policies and
Corporate Governance;
• Code of Ethics and Conduct of the Eletrobras
Companies;
• Eletrobras Companies Competence Policy;
• Antitrust Policy;
• Antitrust Guidelines;
• Negotiation Policy between Related Parties;
• Appointment Policy for the Holding
company and the Subsidiaries, Associates,
Foundations and Associations of Eletrobras
Companies;
• Manual for Disclosure and Usage of Relevant
Information and Policy of Negotiation of
Securities Issued by Eletrobras;
• Guidance Manual for Board Directors
Representative of Eletrobras Companies;
• Guidance Manual for Tax Advisers
Representative of Eletrobras;
39
• Manual for Participation in Eletrobras Shareholders
Meetings;
• Manual of the Anti-Corruption Program at Eletrobras
Companies;
• Strategic Plan for Eletrobras Companies.
Click here for the full documents available on
our website.
In 2017, we took an important step in improving
our corporate governance practices: we reviewed
Eletrobras’ Bylaws, issued the Annual Chart of Public
Policies and Corporate Governance, and reviewed other
important instruments, such as the Manual of the
Board of Directors Member Representative, the Manual
of the Supervisory Board Representative, the Internal
Regulations of the Board of Directors, the Supervisory
Board and of the Committees of the Board of Directors,
among others.
Improving the robustness of these documents
and policies supports the creation and
maintenance of a safer business environment
by ensuring management alignment with
established principles and values, reinforcing
company commitments and enhancing
investor and market confidence in general.
CONTENT
Certification by B3 - B3
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Highlights of the bylaws revision
Selection and monitoring of the board
of directors
New responsibilities allocated to
the board
Reorganization of committees
40
Greater qualification of leadership
and alignment with the interests of
all shareholders
Better structuring of processes
and responsibilities for
strategic alignment
•
•
Institutionalization of criteria and objective
impediments for the selection of managers,
unfolded in the new Appointment Policy of
Eletrobras Companies;
Increase of 1 board member in the
composition of the Board of Directors, of
which 7 are appointed by the Ministry of
Mines and Energy (MME), among which 2 must
meet the requirements defined for members
of the Audit Committee, according to State
Law and its regulations;
• Minimum of independent members in the
Board of Directors goes from 10% to 30%;
• Performance evaluation of the administrators,
members of the Supervisory Board and
members of the Committees according to the
methodology elaborated by Eletrobras to be
applied also in their companies.
• To resolve on the shareholders’
agreements - to be signed by
Eletrobras, its subsidiaries or
controlled entities - before
its signature;
• To approve the personnel
regulations and define the
number of functions in the upper
management, as well as approve
the maximum number of personnel
and the public tender of Eletrobras
and its subsidiaries;
• Approve corporate policies, being
ratified by the Boards of Directors
of its subsidiaries.
More integrated and qualified
vision of strategic aspects for
the business
• Creation of the Audit and Risks
Committee and the Management,
People and Eligibility Committee
as statutory, with scope of action
covering the controlled companies
and meeting the requirements
of independence and professional
experience compatible with
the position.
Creation of new policies and practices
More clarity, reliability and alignment
of processes and controls
• Creation of a Single Competence Policy
for Eletrobras companies, aligning
the responsibilities and limits in the
decision-making process;
•
In the Bylaws, creation of integrality,
risk management and internal
controls practices .
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE
Management structure
G4-34; G4-35; G4-38; G4-39; G4-40; G4-42
Management organizational chart
41
Shareholders Meetings
Objective: decision-making body
composed by shareholders with
right to vote, about strategy and
general business orientation.
Meetings: Annual Shareholders
Meeting (AGO), held annually
until April, and Extraordinary
General Meetings (AGE), promoted
whenever the Board of Directors
deems convenient or in situations
provided for by law. The company
makes available on its website
the “Manual for Participation
in Eletrobras Shareholders
‘Meetings”, which supports the
shareholders’ understanding of the
matters proposed at the General
Meetings and defines how the
participation in them should be.
Frequency in 2017: one AGO and
threes AGEs were held.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Board of Directors
Eletrobras’ Board of Directors in 2017
42
Objective: protects and values the
company, optimizing the long-term return
on investment, and seeks to balance the
expectations of all stakeholders. Eletrobras’
main governance body, in charge of the
company’s strategic direction, mission, vision
and values, with active participation in the
elaboration of the strategic planning and in
the Business and Management Master Plan
(PDNG) of the company.
Composition: up to 11 members, elected
at the Annual Meeting, being at least 30%
independent. The term of office of the Board
of Directors members shall be unified and not
longer than two years, with a maximum of
three consecutive reelections permitted. Of
these members, seven are appointed by the
Minister of Mines and Energy; one Director
appointed by the Minister of Planning,
Development and Management; one, by
minority shareholders holding common
shares; one, by minority shareholders holding
preferred shares issued by Eletrobras,
representing at least ten percent of the share
capital; and one representing the employees
(Under Act #12,353/2010).
Director
Position*
José Guimarães Monforte
director and Chief Executive Officer (non-executive)
Carlos Eduardo Rodrigues Pereira
director representing the employees
Vicente Falconi Campos
Wilson Ferreira Junior
José Pais Rangel
Ariosto Nunes Culau
Edvaldo Luis Risso
Esteves Pedro Colnago Junior
director
director and Chief Executive Officer (executive)
director representing the minority shareholders holding
common shares
director
director
director
* The chair appointed by the minority shareholder holding preferred shares was not filled due to noncompliance with the
requirements in the Bylaws (art. 17, item IV).
Meetings: ordinary and extraordinary meetings whenever necessary. Executive Board members
may be requested to attend.
Frequency in 2017: 21 meetings.
The Board of Directors has three committees to advise it on analysis, follow-up and
recommendation on specific issues in each area: Strategy, Governance and Sustainability
Committee; Audit and Risk Committee; and Management, People and Eligibility Committee,
which in 2017 held, respectively, 2, 4 and 1 meetings, the last two of which are provided for by
Eletrobras’ Bylaws. Each committee has three vacancies for board members, and its duties are
set out in internal regulations.
In 2017, the Audit and Risk Committee met eight times, the Management, People and Eligibility
Committee, seven times and the Strategy, Governance and Sustainability Committee,
eight times.
Moreover, the Divestment Commission was created which has the objective of supporting the
Board of Directors on their sales decisions of their interest in companies and has three board
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE members and two employees. In 2017,
studies were initiated for the divestment
process. For 2018, the intention is
to proceed with the sale of Eletrobras’
stake in 70 Specific Purpose
Companies (SPCs).
Meet the composition in the internal
regulations of the committees and
in the Regulation of Internal Audit at
Eletrobras website.
Executive Board
Objective: general management of
Eletrobras, based on the guidelines set
by the Board of Directors.
Composition: seven officers, including
the CEO, elected by the Board of
Directors. The term of office shall
be unified and not longer than two
years, with a maximum of three
consecutive reelections permitted.
The chief executive officer is elected
from among the Board of Directors
members, excluding the chairman of the
board of directors. The board also has
committees and workgroups created
on-demand to discuss the technical
aspects of management matters.
43
Eletrobras’ Executive Board in 2017
Executive Officer
Wilson Ferreira Junior
Antônio Varejão de Godoy
José Antonio Muniz Lopes
Luiz Henrique Hamann
Position
ceo
chief Generation officer
chief Transmission officer
chief Distribution officer
Armando Casado de Araujo
chief Financial and Investor Relations officer
Lucia Casasanta
chief Compliance officer
Alexandre Vaghi de Arruda Aniz*
management officer
* Alexandre Vaghi de Arruda Aniz has stepped down as Management officer on 02/23/2018.
Meetings: weekly meetings.
Frequency in 2017: 58 meetings.
In 2017, Eletrobras’ CEO, Wilson Ferreira Junior was elected at the 100 Most Influential
in the Energy Sector Awards, in the Corporate Management category and received the
Certificate of Achievement to Business Merit - Public Company in the World Company
Award 2017, an event that integrated the Brazil-Portugal Economic Forum.
Supervisory Board
Objective: responsible for representing the shareholders’ supervisory function, overseeing the
management to ensure compliance with their statutory and bylaw duties.
Composition: five members and their relative alternates. The term of office of the Supervisory Board
members is no more than two years, with a maximum of two consecutive reelections permitted.
One of the members must be a financial expert, according to the requirements of the Securities and
Exchange Commission (SEC), and the members’ appointment is made by the majority shareholder
(three members); by the minority shareholders holding common shares (one member) and by the
minority shareholders holding preferred shares (one member).
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE 44
Eletrobras’ Supervisory Board in 2017
Selection
Member
Agnes Maria de Aragão da Costa
José Wanderley Uchôa Barreto
Márcio Coelho Leão
Patrícia Valente Stierli
Ronaldo Dias
Position
president
sitting member
sitting member
sitting member - financial expert
sitting member
Meetings: ordinary and extraordinary ordinary meetings whenever necessary.
Frequency in 2017: 14 meetings.
Throughout the year we made strategic allocations of members of
Eletrobras’ Executive Board on the Boards of Directors of the subsidiary
companies, focusing on the priority themes for each company evolution.
Selection and development of leadership
G4-43; G4-44
With the publication of Law 13,303 (State Law) and its regulations (Decree
8.945) - which has brought new requirements for the selection and
qualification of candidates for management and Supervisory Board member
positions at state-owned companies -, since 2016 we have improved our
analysis and qualification processes for nominees and we have promoted
several initiatives towards the development of these professionals.
Our process of analyzing the nominees for positions
at the Board of Directors, Executive Board and
Supervisory Board, as well as complying with the
company’s legislation, Bylaw’s and other normative
documents, was improved in 2016.
For all appointments to directors and officers, the
integrity and governance areas make a preliminary
analysis on the compliance status of the nominees -
with reference to the sanctions database applied by the
Public Ethics Commission and the electronic websites
of regulatory agents , to assess whether there are
any breaches of integrity - and consultations with the
ombudsmen of Eletrobras Companies.
In addition, in 2017, the Management, People and
Eligibility Committee was created, which replaced
the Transitional Internal Eligibility Commission
(CITE), with the purpose of assisting shareholders
in the appointment of managers and members of
the supervisory board who meet the requisites and
who do not have reservations regarding elections.
The committee also verifies the conformity of the
evaluation process of these directors and officers.
1Brazilian Securities and Exchange Commission (CVM), Federal Court
of Accounts (TCU), Supreme Electoral Tribunal (TSE) and State Court of
Accounts (TCE).
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE To ensure a performance aligned to
the company’s strategy, each year
the Board of Directors and executive
directors members undergo a
process of self-assessment and
evaluation by the agents, with
a unique methodology for all
Eletrobras companies. The results
are scored and consolidated in
a report and the respondents
participate in a feedback meeting.
In 2017, the Supervisory Board’s first
performance evaluation was carried
out, and a performance evaluation
is planned for 2018, which will
include the committees of the
Board of Directors, which evidences
the continuous improvement of
governance practices.
Each year, we also identify the
training needs of governance
members, which guide the
promotion of training initiatives.
45
Development
In 2017, we launched the Eletrobras’ Directors and Officers Improvement Program, with
educational actions to promote, in all Eletrobras Companies, the development of Board of
Directors, Supervisory Board members and officers consistently and continuously.
The program consists of lecture, annual conferences, face-to-face and online courses and, in
2017, developed the following actions:
• Training “Supervisory Board in Practice”, for Supervisory Board members;
• Lecture “Directors’ Responsibilities” for Board of Directors and Supervisory Board members of
Eletrobras in its subsidiaries and affiliates, during the 2017 Board Members Meeting;
• Participation of officers and directors at the 18th IBGC Congress in São Paulo;
• On-site course “Governance, Integrity and Capital Market” at the Brasília, Recife and Rio de
Janeiro poles, to serve Officers, Board of Directors and Supervisory Board members, and also
the same course, but in a hybrid mode, part face-to-face, part online, aiming to serve the SPC
directors in 2018.
In all, these actions had 209 participations in 32 hours / class.
Compensation
G4-51; G4-52; G4-53
The governance bodies’ compensation is disclosed, in an aggregated manner, in the
Management Report and in the Reference Form, available on the Investor Relations website. The
compensation of the Board of Directors and the Supervisory Board are individually reported in
the Business Management Report of accountability to the Brazilian Government Accountability
Office (CGU), which sends it to the Federal Court of Accounts (TCU). The values can be found in
the Reference Form (link: https://bit.ly/2J1nXWj).
Board of Directors and Supervisory Board: the legislation establishes that the compensation
of the members of these bodies of the federal state-run and mixed investment companies
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE
shall not exceed 10% of the average monthly
remuneration of the directors. Members of the
Board of Directors are not paid any additional
compensation as consideration for their board
committees and/or advisory commissions’
duties, except the Audit Committee members,
who may have a different compensation
depending on the workload.
Executive Board: The monthly remuneration
of the Executive Board is determined at the
Shareholders’ General Meeting, following
the guidelines of the Department of
Coordination and Governance of State-run
Companies (Sest).
The Annual Variable Remuneration (AVR) can
add up to 2.5 compensation and is conditioned
to reach positive results in the year and the
achievement of annual goals agreed between
the Board of Directors and the Executive Board
of each Eletrobras Companies. The goals agreed
upon in the AVR consider the results of the
Executive Board’s performance evaluation and
capture the management alignment to the
long-term strategy and the Board of Directors’
guidelines, noting the economic, environmental
and social impacts and risks.
46
In 2017, the targets linked to AVR were directly linked to PDNG 2017-2021,
ensuring the alignment of leadership with the business value creation
strategy. In addition, the AVR is paid in four years - 60% in the first year, 20%
in the second year, 10% in the 3rd and 4th years - and the payments for the
2nd to 4th years are only made if the merit for to compensation is maintained,
reinforcing the commitment to corporate sustainability and the generation of
perennial value.
2017 Goals
Category
Corporate
(performance
indicators of the
company as a whole)
Strategic
cornerstone of the
PDNG 2017-2021
Indicator
Unit
Operational
Excellence
Net Income on
Shareholders’ Equity
Financial Discipline
% of Investments Made
%
%
Sustainable
Operation
Operational
Excellence
Emissions of greenhouse
gases / net operating
revenue
tCO2e/R$
thousand
Personnel, Material,
Services and Other
Accounts (PMSO) / net
operating revenue
%
25%
Individual
weight
15%
10%
5%
Financial Discipline
Net Debt / EBITDA
Collegiate (indicators
related to the
Collegiate Board)
Governance and
Compliance
Governance and
Compliance
Board of Directors
Evaluation
Compliance with
regulatory deadlines
number of
times
%
%
Business unit¹
(specific indicators for
each Board)
All
Project Performance Index %
25%
5%
5%
10%
¹ Each of the boards is responsible for one of the strategic projects of the PDNG 2017-2021 and monitors its execution. The
goal is achieved when the project is developed within the expected timeframe, taking into account the strategic goals.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE
Ethics and compliance
Conflict of interests
G4-41
Eletrobras is subject to Law 12,813 / 2013, which provides for situations
that constitute a conflict of interests involving occupants of a position
or employment within the scope of the Federal Executive Branch, the
requirements and restrictions on occupants of position or employment
who have access to privileged information, impediments subsequent
to the exercise of the position or employment and the competences for
inspection, evaluation and prevention of conflicts of interest.
As provided by Law, in addition to the Public Ethics Committee, the
Comptroller General of the Union (CGU) also monitors and evaluates
situations of conflict of interest.
In order to ensure compliance with the Law, we rely on rules and
policies to guide our leaders and employees on situations of conflict
of interest, as presented below:
Board of Directors
The Company’s Bylaws determine the situations of conflict of interests
that may arise among the members of the Board of Directors, who must
register the conflict in minutes and abstain from discussing and voting.
The board member elected by employees does not participate in
discussions and resolutions on matters involving union relations,
compensation, benefits and advantages, including matters related
to complementary welfare and assistance funds, since this practice
represent a conflict of interests.
47
The Board of Directors should also monitor and manage potential
conflicts of interest of executives, board members and shareholders,
in order to avoid the misuse of the Company’s assets and, especially,
improper transactions between related parties.
Board of Executive Officers
In order to avoid possible conflicts and the misuse of confidential and
strategic information, the CEO and the executive officers may not hold
management, administrative or consulting positions in electric power
public utility companies or private companies which are linked or not to
the electric power sector, except subsidiaries, special purpose entities
and state-owned concessionaires, in which Eletrobras has an equity
interest, where they may be members of the Board of Directors and
the Fiscal Council, in accordance with the provisions of Law No. 9,292,
which regulates compensation and establishes the limit of only two
compensations from public companies.
Employees
A consultation system, integrated to the Personnel Management
department and the Ethics Committee, is available to all employees
through the email address: conflitodeinteresses@eletrobras.com For
those who wish to make formal inquiries about conduct in situations of
possible conflict of interest.
The Comptroller General of the Union (CGU) created the Electronic
System for the Prevention of Conflict of Interest (SeCI), which can be
accessed by all government bodies and is available to all employees via
the Company’s intranet or on the CGU website.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Integrity
G4-57 ; G4-58; G4-37; G4-49; G4-50; G4-SO4; G4-SO5
Evolution of management
We promote a culture of ethics in business management through
institutional and normative instruments that guide our performance
and establish the principles, guidelines, rules, and commitments of
conduct of companies and their employees, as well as the relationship
with suppliers, business partners, customers and other stakeholders.
In addition to the guidance to sustain an ethical culture, the
instruments used by Eletrobras also identify, resolve, treat and, in case
of breach, penalize attitudes that are contrary to ethics and integrity.
All departments undergo internal audits, which verify the adequacy
and regularity of processes, internal procedures and contracts. The risk
of fraud and unethical conduct is one of the risks currently prioritized
for mitigation within Eletrobras companies’ activities.
Over the last three years, we have been working to intensify
our controls and investigation, compliance and integrity
processes with the creation of the Compliance Department,
the Compliance Program and the Integrity Program of
Eletrobras Companies. This ongoing initiative reinforces our
commitment to fight against corruption and fraud, mitigate
risks and correct non-conformities. Therefore, we seek to
ensure the sustainability of Eletrobras companies and the
trust of our shareholders and society.
48
Integrity Program
The Eletrobras 5 Dimensions Integrity Program relies on the continuous
involvement of the holding company’s Board of Executive Officers and
Board of Directors, and covers all Eletrobras companies, through the
Compliance Committee (CDC), which is composed of the companies’
compliance managers.
The program is aimed at strengthening the integrity practices of
processes, routines and conduct, for the development of a culture of
integrity in companies through five dimensions:
• Development of the management environment of the
Integrity Program;
• Periodic risk analysis;
• Structuring and implementation of the Integrity Program policies and
procedures;
• Communication and training;
• Program monitoring, mitigating measures and penalties application.
In 2017, the program has made significant advances, among which
we highlight:
Unification of integrity management and the Whistleblower Channel
In August 2017, we unified the complaint management areas of all
Eletrobras companies and our Whistleblower Channel, which is available
to everyone at: www.canaldedenuncias.com.br/eletrobras.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE In accordance with the best practices of the market, we also hired
an external and independent firm to act in the centralized receipt of
complaints. Outsourcing the channel was one of the initiatives planned
in the new process of managing and handling complaints, and is aimed
at improving the monitoring of complaints received, dealing with cases
of fraud or corruption, as well as raising awareness of all employees
about of topics related to ethics and legality.
The integrity management and complaint handling process
was also centralized with the creation of internal regulation
documents, procedures and a unified management body for the
standardization of analysis and investigation, accountability and
mitigation recommendations.
• The managing and handling of complaints regulation was
created, which standardizes and guides the process of analysis
and investigation of complaints, and the Penalties Policy, which
establishes corporate commitments to fight corruption, anti-
competitive practices, conflicts of interest and other infractions, and
guides the application of penalties to non-compliance with the Code
of Ethics and Conduct of Eletrobras companies, with the Eletrobras
Integrity Program and with the internal and legal rules.
• The Integrity System Committee (CSI) was created, coordinated by
the Compliance Department and made up of representatives of the
Eletrobras companies, and is aimed at monitoring, in a standardized
way, all the complaints received by the channel, classified by subject
and criticality, as well as assisting in decision-making processes
related to complaints, together with the companies’ directors.
49
“Combating corruption and maintaining ethics
must be values intrinsic to the organization. The
behavior of the entire staff should be derived from
ethical principles. At the moment we are living
today, we realize that this issue is becoming more
and more central for companies. “
Reive Barros dos Santos, director of the National Electric
Energy Agency (Aneel), in an interview that based the
materiality matrix that guides this report (learn more on
page 3).
The unification and independence of the whistleblower
channel and the creation of standards, policies and
unified integrity management bodies led to a faster,
more solid and reliable process of receiving and
investigating complaints, and allowed a precise and
consolidated diagnosis on management risks.
Eletrobras directors meeting - Eletrobras holding/Jorge Coelho
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE 50
THROUGH THE OMBUDSMAN AND WHISTLEBLOWER CHANNEL, ANY PERSON MAY ANONYMOUSLY REPORT
VIOLATIONS OR SUSPICIONS OF VIOLATIONS TO THE INTEGRITY PROGRAM, CODE OF ETHICS AND CONDUCT
AND/OR ANTI-CORRUPTION LAW. CONFIDENTIALITY IS MAINTANED AND RETALIATION IS NOT TOLERATED.
CENTRALIZED WHISTLEBLOWER CHANNEL
OF THE ELETROBRAS COMPANIES
It has a series of mechanisms that enable the traceability of the actions and
consultations carried out by those involved in the handling of complaints.
REPORTS
IN 2017
364
complaints*:
164
were considered to be
out of scope
.
200
22
valid complaints:
concluded (went through all the
decision-making stages regarding
accountability and mitigation measures).
* Considers data from August 2017, when the
channel was launched.
Of the total number of reports
95.1%
were
concluded and
4.9%
were ongoing
at the end of
the period.
OMBUDSMAN
OF ELETROBRAS
COMPANIES
27,309
reports, of which
2,679
were complaints.
Linked to their respective Boards of Directors,
reporting periodically and eventually, in speci c cases,
to the Audit Committee, the Fiscal Council and the
Board of Directors.
As for fraud, corruption and other irregularities, Eletrobras companies received 55 complaints in 2017, 13 of which were concluded, 1 being valid and 1
partially valid, which went through accountability and mitigation measures.
Regarding incidents of discrimination, in 2017, the Company recorded three complaints in Eletrobras companies, two in Eletronorte and one in
Eletrobras Distribuidora Rondônia. At Eletronorte, the cases were analyzed and considered not applicable. At Distribuidora Rondônia, the case was
resolved with the management of the area and, as a corrective measure, a project will be developed to raise awareness of employees about ethics
and human rights in 2018, as well as internal communication initiatives that promote a culture of respect.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Improved integrity management in
supplier relations
In 2017, we improved Eletrobras
companies’ supplier relations
integrity management by
establishing and reviewing policies,
regulations and guidelines, engaging
suppliers and management areas,
and creating a critical supplier
due diligence process. As well as
strengthening our processes, we
aim to multiply a solid culture of
integrity and compliance within
our supply chain.
Elaboration of Eletrobras’ Bidding
Procedures and Contracts Regulation:
in order to prevent fraud and illegal acts
in bidding processes mediated by third
parties, we approved the Bidding Procedures
and Contracts Regulation, which adapts
Eletrobras companies’ contracting rules to
that established in Law 13,303/2015 (State-
Owned Companies Act) and provides for
the assessment of the supplier’s corporate
integrity, from the contracting process to
the monitoring during the execution of
the contract.
Eletrobras companies identified their
most critical suppliers regarding the
integrity aspect and that should be
monitored. For this critical group
of suppliers, a due diligence form
was requested, as well as a signed
statement of integrity. Learn more
about the process on page 112.
Revision of the Supply Logistics
Policy and launch of the Conduct
Guide: we revised our Supply Logistics
Policy and launched the Conduct Guide
for Suppliers of Eletrobras companies
and included the Ethics and Corporate
Integrity topic in both documents.
Engagement: we developed activities
to improve our relationship with
suppliers, together with Eletrobras
companies – including the Supply and
Compliance areas and other interested
parties. Among these activities, we
highlight the use of the Compliance
Committee as a discussion forum,
and the holding of events such as the
Supplies Workshop and the Annual
Meeting with Suppliers. Learn more
about the events on page 112.
51
Main advances achieved with the
new regulation
• Simplified procedure for
contracting construction work and
specialized engineering services,
reducing the average from 200 to
70 days;
• Faster processing due to the
standardization of contracts and
call for bids;
• Lower expenses with publication
in large circulation newspapers
and a more clear and transparent
process, through the establishment
of a risk matrix (requiring better
budgeting by competitors, avoiding
additives throughout the works
and sharing the risks of the project
with the future contractor),
integrity criteria to guide the
contracting of bidders (adhering
to the 5 Dimensions program) and
the dissemination of sustainable
procurement practices.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Information Security Policy of Eletrobras companies
In 2017, we created a policy to guide Information Security governance
and that will support the Information Security and Management area,
linked to the Compliance Department (CD), aimed at coordinating the
management and protecting documents and corporate information at
acceptable risk levels, and Eletrobras’ Information Security Committee,
which monitors and supports all actions necessary for corporate security.
We achieved, for the first time, the maximum level (improved)
in the IT Governance Index (iGovTI), granted by the Brazilian
Federal Court of Accounts (TCU). Only 12% of the 368 federal
public administration organizations evaluated reached the
same level. With this, we moved from 8th to 3rd place among
energy companies.
Communication of the Eletrobras 5 Dimensions Program
We disseminated the Eletrobras 5 Dimensions Program through
communications initiatives and training sessions tailored to each type
of stakeholder, in all our companies, reaching employees and the Boards
of Directors of the main subsidiaries. Among the initiatives, we highlight
news broadcast via intranet, the Conformity Department’s lectures and the
“Minuto de Liderança” (“Leadership Minute” – short movies featuring the
CEO and the Compliance Director about the program). We also consolidated
the annually held Ethical Culture Week, which, in its fourth edition,
addressed the conflict of interest issue and the progress of the Eletrobras 5
Dimensions Program.
In 2017, 769 of the holding company’s employees were trained on
principles and standards of the Code of Ethics and Compliance
Program and the “Integrity and Ethics – Compliance” online
training was utilized by 18,798 employees, representing 82% of
the staff.
52
The Eletrobras companies participate in the
National Forum on Ethics Management in State-
Owned Companies, which carries out studies
and maintains study groups, promotes the
achievement of certifications and seals and holds
the Annual Seminar, open to all employees of the
participating companies, renowned professors,
governmental authorities and the general public.
Anti-corruption awareness initiatives in
2017
Number of participants
governance agents
employees
management level
higher education level
primary and secondary level
business partners
214
20,719 (90% do total)
1,494
6,755
12,470
25
Anti-corruption training initiatives
Number of participants
governance agents
employees
management level
higher education level
primary and secondary level
151
18,798
1,336
6,293
11,169
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Internal investigation and audit
In addition to strenghtening compliance
and integrity management, as previously
mentioned, considering that some of the
Eletrobras companies have been named in
the Lava Jato Operation (an investigation
conducted by the Brazilian Federal Police
and by the Federal Prosecutor’s Office) and
the risk of violation to the Integrity Program,
the Company launched an independent
investigation and audit procedure in 2015,
with the hiring of the U.S. law firm Hogan
Lovells to assess possible irregularities.
The investigation was organized around the
Brazilian legislation and the Code of Ethics
and Conduct of Eletrobras Companies, and
followed the principles of the Securities and
Exchange Commission (SEC), the Department
of Justice (DOJ) and the U.S. Securities and
Exchange Act and Foreign Corrupt Practices
Act (FCPA), which govern the U.S. capital
market, as we have been liable for trading
our American Deposit Receipts (ADRs) on
the New York Stock Exchange since 2008.
The investigation is ongoing and, if a
potential liability is identified, it may result
in future prosecution.
The Radioactivity and Pripyat
operations, conducted in 2016
as part of the Lava Jato Operation,
resulted in the sentencing of three
former executives of Eletronuclear
in 2017. The independent investigation
identified contracts in which
irregularities could have occurred,
and they were duly assessed and
the respective corrective measures
adopted – whether suspension or
cancellation. Administrative measures
were also taken in relation to
employees and directors involved
in the activities identified by the
independent investigation, adopting,
when applicable, the respective
disciplinary procedures.
Since the beginning of the
investigations, Eletrobras has been
cooperating with the authorities,
sharing information gathered by the
independent investigation and assisting
the prosecutors in these criminal
proceedings, as well as dismissing the
suspects in 2016.
In 2017, no cases of corruption were
identified within Eletrobras companies.
53
Risks and
opportunities
G4-14; G4-2; G4-45, G4-46, G4-47; G4-EC2; G4-SO4
The risk management process implemented in
Eletrobras companies is integrated and its main
focus is to reduce the occurrence of events that may
negatively impact, in a relevant and permanent way,
our strategic goals.
Our risk management is guided by the
principle of caution, seeking to anticipate
and avoid negative impacts or be prepared
to act if the identified risks materialize.
Governed by a single corporate policy, the risk
management process is coordinated by the holding
company, ensuring standardization across all
companies and a systemic view of results.
Based on the COSO 2013 and ISO 31000:2009
methodologies, the management model aims to
identify and consolidate, in a matrix, the strategic,
operational, financial and compliance risks to
which the companies are exposed to, for further
analysis, treatment and follow-up through specific
proprietary processes.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE 54
The process is conducted by the risk management
departments and by the risk committees of each of
the subsidiaries, with general guidance from the Risk
Committee of the holding compan.
The results are submitted to the Board of Executive
Officers and the Board of Directors, through the
Audit and Risk Committee. The Board of Directors
periodically resolves on the strategic issues related to
the risk management process, such as the Company’s
level of appetite for risk, its tolerance ranges, the role
of the Board of Executive Officers in managing risks
and the policy that should guide the whole process.
A Statutory Audit and Risk Committee
was created in the beginning of 2018, in
compliance with the Company’s Bylaws,
which should provide a new approach to risk
management, receiving monthly reports from
the Corporate Risk Management department,
and bringing the process even closer to the
Board of Directors.
The most relevant results of the risk analysis are
published in documents such as the 20-F Form and the
Reference Form. We present below the main analyzed
risks and more detail is available at the Company’s
investor relations website.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Main risks analyzed
Compliance
Risk Scenario
As a publicly-held government-controlled company listed
on the São Paulo Stock Exchange (B3 – Brasil, Bolsa, Balcão),
the New York Stock Exchange (NYSE) and the Madrid Stock
Exchange (Latibex), we are subject to legislations such as
Sarbanes-Oxley (SOX), the Foreign Corrupt Practices Act
(FCPA) and the Brazilian Anti-Corruption Law, compliance
laws, transparency and anti-corruption, as well as the rules
and guidelines of bodies such as the Securities and Exchange
Commission (SEC), the Brazilian Securities and Exchange
Commission (CVM), the Brazilian Institute of Corporate
Governance (IBGC) and the Organization for Economic
Cooperation and Development (OECD).
Risk management and mitigation
Since 2016, we rely on the Compliance Program, which gives
greater strength and maturity to compliance processes in
Eletrobras companies and is part of the 2018-2022 Business
and Management Master Plan (PDNG), monthly monitored
by the Board of Executive Officers. More detail on the
program is available on page 48.
55
consortia in which the holding company or its companies participate, specifically
created to bid in auctions. Therefore, our ability to meet financial obligations is
linked to the cash flow and revenues from these SPEs and consortia. Due to the
country’s challenging macroeconomic situation in recent years, the operating
and financial results of subsidiaries and SPEs have been negatively affected.
Risk management and mitigation
In order to standardize the management of SPEs and mitigate operational and
financial risks, the holding company developed the “Eletrobras Companies SPEs
Manual”, with guidelines for the construction of a uniform corporate governance
model, which is being replicated in all subsidiaries, establishing activities to
control and mitigate risks related to the:
• Pre-constitution of the SPEs, such as the preliminary integrated assessment
of the business, the partner selection process based on pre-defined premises
and the evaluation of the conditions for participation in auctions; and
• Post-constitution of the SPEs, such as dividend management and financial
contributions, business plan updates, as well as monitoring of the financial
statements and of the implementation and operation of projects.
In addition, the SPEs Manual provides guidelines to support project analysis,
considering the dynamics of the process in the Generation and Transmission
areas, including social and environmental issues.
Budget and cash flow
Management of SPEs and consortia
Risk Scenario
We carry out generation and transmission activities
mainly through our subsidiaries, but also through SPEs and
Risk Scenario
Law 12,783/13 establishes that companies are only responsible for the operation
and maintenance of the generation assets under their concession, which has led
to a significant reduction of their revenues, the need for greater leverage and the
worsening of their risk perception.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE Risk management and mitigation
Licensing and social and
environmental management
Since 2016, with the preparation
of the 2017-2021 PDNG,
management has been showing
increasing concern about the
Company’s financial solvency,
prioritizing projects that address
the economic-financial balance
and operational performance
improvement, basically
by reducing costs and
restructuring and enhancing
organizational processes.
With the strategic guidance and goals related
to financial discipline in the 2017-2021
PDNG, which were reviewed and reinforced
in the 2018-2022 PDNG, we have already
achieved some positive results, such as the
reduction of the debt ratio (see more on page
78), the development of relevant projects,
such as the Extraordinary Retirement Plan
(see more on page 99), the beginning of
the implementation of the Shared Services
Center and the standardization of the
integrated corporate management system
(corporate ERP).
Learn more about the results of the 2017-
2021 PDNG and the new goals of the 2018-
2022 PDNG on page 19.
Risk Scenario
Non-compliance with specific social and
environmental legislation may impact
electric power generation, transmission and
distribution companies.
Risk management and mitigation
From an environmental management
point of view, Eletrobras companies have
implemented environmental management
systems with tested and formalized
standards and procedures. Regarding the
Company’s social management approach,
the indigenous issue stands out as one of the
most striking issues. To mitigate its negative
impacts, we formally included the matter in
the second version of the 2016 Eletrobras
Companies Social Responsibility Policy, and
Eletrobras companies have been developing
actions, in partnership with the Indigenous
National Foundation (Funai). Learn more
on page 119.
Climate Change Risk
Risk Scenario
Currently, climate change risk is the main
focus of several world forums, being
56
constantly discussed and analyzed, and
giving rise to a greater movement of
implementation of measures to prevent,
mitigate, adapt and/or offset impacts, as well
as the report its results to the market
Risk management and mitigation
Based on this scenario, the assessment of
the “climate change” risk seeks to determine
how we can be impacted, foreseeing actions
to readapt operations, as well as repairs and
mitigate damages.
Therefore, it is important that Eletrobras
companies can ensure the execution of
control activities, such as:
• Address climate change issues in its
activities;
• Know its vulnerabilities related to climate
change;
• Ensure that a set of measures are
implemented to adapt electric power
generation and transmission systems to
the climate change effects;
• Check if service providers or suppliers
operate in areas susceptible to climate
change effects and/or act in disagreement
with the legislation and standards in force
on the subject;
• Ensure to raise awareness on the social
and economic effects of climate change;
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE • ensure the monitoring of the development of the National Policy on
Risk management and mitigation
57
Climate Change or other related policies and regulations, such as the
carbon credit market.
Since the first analyses of the issue, we have been managing the
climate change risk and dealing with all its aspects through the
Working Group on Climate Strategy, which has been developing a
pilot study to be used as foundation to the future elaboration of a
strategy to adapt to climate change in Eletrobras companies.
In 2017, we had the goal of developing a study to evaluate the impact of
climate change on Eletrobras companies’ operations. During the year, this
study proved to be ineffective, due to the amount of evidence of this impact
on the hydrological regime of the Brazilian rivers. The Company is aware
of this risk and already evaluates ways to mitigate it, whether studying
alternative energy sources or deconcentrating its electricity matrix from the
water source.
Operating risks – Nuclear power generation
Risk Scenario
Because it involves the use of radioactive materials, nuclear power
generation activity presents negative social and environmental impact
risks, even if very low, in case of accidents or incidents during the life cycle
of the projects. In 30 years of operation, the Angra nuclear power plants
have never had an accident or event that would put at risk its employees,
the population or the environment of the region. According to the Brazilian
law and the Vienna Convention, damages in the event of an accident are the
Company’s strict liability.
Safety is a commitment that is crystallized in
Eletrobras Eletronuclear’s Integrated Management
Policy. It is a priority and comes before productivity
and savings, and should never be compromised for
any reason.
All activities involving the nuclear power generation process
are extremely controlled, with the supervision of national
and international institutions. In this context, Angra 1 and
2 plants operate under the supervision of the National
Nuclear Energy Commission (CNEN) and are subject to
periodic inspections by international agencies, such as
the International Atomic Energy Agency and the World
Association of Nuclear Operators. The Company is also
involved in the Protection System for the Brazilian Nuclear
Program (Sipron) and participates in the general activities
program every year, which includes, among other initiatives,
courses and seminars, as well as emergency response
training or facility safety exercises.
Although the Angra nuclear power plants are considered
solid and have an annual budget for safety activities,
following the Fukushima accident in Japan in 2011, the
Company developed the “Fukushima Response Plan”,
comprising 30 studies and 28 projects and investments of
approximately R$300 million.
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE 58
Operating risks – Hydropower generation
Risk Scenario
Currently, the most important risk related to this type of activity is the hydrological risk, which consists of maintaining a systemic production level
below the physical guarantee of the plants that are part of the regulated energy market. This risk is higher when the occurrence of water shortages
and has negative impacts on results.
Risk management and mitigation
We seek to mitigate this risk through the renegotiation of the hydrological risk, a measure established by law in 2015, limiting the generators’
losses during periods of shortage and extraordinary gains in periods of a more favorable flow. We also carry out the “Energy Hedge” in the amounts
that are not covered by the renegotiation, that is, electricity available for sale in case of severe droughts so the Company’s power production is not
completely contracted.
Passo São João TPP – Eletrobras Eletrosul
CONTENT
ANNUAL REPORT • 2017CHAPTER 4 • GOVERNANCE, ETHICS AND COMPLIANCE 59
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Generation
Installed capacity
G4-EU1; G4-EU10
2017 Outlook
Our installed generation capacity at the end of 2017 was 48,134 MW,
which represents 31% of the 157,370 MW installed in Brazil. We have
expanded this capacity, in the last three years, on average 1,326 MW
per year, in terms of installed capacity, especially via SPCs.
Increase in installed capacity by type of enterprise (MW)
60
Of this total, 32.5% (15,627 MW) are from Corporate Power Plants,
27.2% (13,094 MW) Corporate Power Plants Under the O&M Regime
(Operation and Maintenance), 6.5% (3,132 MW) Corporate Power
Plants Renewed by Law 13,182/2015, 16.5% (7,943 MW) from Shared
Ownership Power Plants, 16,5% (7.934 MW) from Specific Purpose
Companies (SPCs) and 0.8% from Specific Purpose Companies under
the O&M regime. If we consider the total installed capacity of the
plants in which we have participation, this amount will be 66,036 MW.
It is worth noting here, in 2017, the commercial start-up of the São
Manoel HPP, the Casa Nova II wind farm and the first generating unit
of the Mauá III TPP (591 MW). Also noteworthy is the start-up of new
generating units at Belo Monte and Santo Antônio HPPs. On the other
hand, the Sao José TPPs, in Amazonas, and Santarém, in Pará, and the
A and B phases of the Candiota thermal power plant were deactivated,
remaining only phase C. In total, in 2017 there was an increase in the
installed capacity of the Eletrobras System of 1,278 MW.
Como previsto em nosso PDNG 2018-2022, em fevereiro de 2018
As defined in our PDNG 2018-2022, in February, 2018
the divesture of 70 shares in SPCs held by Chesf, Furnas,
Eletronorte, Eletrosul and holding company was approved.
The initiative seeks to promote the debt settlement
of controlled companies with Eletrobras, allowing the
reduction of financial leverage and the improvement in
the Net Debt / EBITDA indicator. The divestiture operation
and the auction are scheduled to take place in June 2018.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Solar Megawatt – Eletrobras Eletrosul/Hermínio Nunes
In recent years, we have increased our share in sources
with low emission of greenhouse gases (“GHG”) in our
installed capacity. In 2017, it represented about 95% of
the total, decisively contributing to place the Brazilian
electrical matrix as one of the cleanest and most
renewable in the world.
61
Strategic expansion planning
Our goal for 2022 is to maintain our leadership position in the energy
generation sector, prioritizing the completion of projects that are part of
our portfolio. As a result, Eletrobras and its partners are expected to add
about 8 GW of installed capacity to the brazilian electric matrix, reaching
a planned capacity of 51.2 GW, while increasing the share in sources with
low GHG emissions .
According to the forecast of the Ten-Year Energy Expansion Plan (PDE)
2017-2026, one of the main tools for planning country’s electro energetic
expansion, prepared by the Brazilian Energy Research Agency (EPE) and
by the MME, our participation in relation to the country’s total installed
capacity tends to fall.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS 62
EVOLUTION OF THE INSTALLED CAPACITY IN THE SIN - Capacity of the Eletrobras System vs. Total Planned Capacity (PDE 2026)
SOURCE
2017
2022
2026
Brasil - SIN
(MW)
Eletrobras
System (MW)
Share (%)
Brasil - SIN
(MW)
Eletrobras
System (MW)
Share (%)
Brasil - SIN
(MW)
Eletrobras
System (MW)
Share (%)
COAL
OIL
3,174
5,251
NUCLEAR
1,990
NATURAL GAS
13,123
413
752
1,990
966
HYDRO
100,898
42,350
WIND
12,843
1,158
BIOMASS
13,010
SOLAR
TOTAL
960
151,249
0
1
47,630
13
14
100
7
42
9
0
0
31
3,514
5,251
1,990
17,204
350
30
1,990
1,091
109,108
46,109
21,254
432
14,666
5,660
178,647
0
1
50.003
10
1
100
6
42
2
0
0
28
3,514
2,386
3,395
29.537
350
30
3,395
1,091
111,624
46,109
28,470
16,936
9,660
205,522
432
0
1
51,408
10
1
100
4
41
2
0
0
25
Notes:
• Our capacity Includes the Brazilian half of Itaipu Binacional (7,000 MW) and, For jointly owned plants, the installed capacity considered was proportional to the ownership interest held by the
parties.
It was considered the deactivation of some thermal plants in the coming years, as forecasted by Eletrobras Companies.
•
• Considering the installed capacity of the Eletrobras Companies plants that are part of the SIN, plus those that are part of the Isolated Systems (504 MW, being 15 MW from natural gas source and
489 MW from oil source), the total installed capacity of Eletrobras Companies in 2017 corresponds to 48,134 MW.
We have the goal of investing R$ 9.5 billion between 2015 and 2019 in generation projects from clean sources. By the end of 2017 we had already
invested R$ 15.3 billion. In the year we also reviewed our goal of implementing the portfolio of contracted generation projects, going from 22.6 GW
to 18.6 GW. From 2015 to 2017, Eletrobras and its partners implemented 10.55 GW of installed power, which represents 31% of the Brazilian power
matrix. From 2018 to December 2019, Eletrobras and partners will incorporate 7.87 GW of installed capacity into the SIN, about 55% of Brazilian
growth (14.31 GW).
In order to learn about the Eletrobras Companies power plant map in operation in 2017 (by region and type of power plant), in addition to detailed
information on installed capacity (by company and by type of enterprise), access our Management Report, item 5.1, pages 45 to 48, available at:
https://bit.ly/2rFK0Hk.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS 63
Electric power production
G4-EU2
In 2017, we generated 182,147.7 GWh, an increase of 6.6% over 2016.
The most significant positive changes were observed in Eletrobras Companies, Eletronorte Eletrosul and Amazonas G & T. With regard to Eletrobras
Companies and Eletronorte, the high growth is mainly due to the start-up of HPP Belo Monte. At Eletrosul, in turn, there was an increase in
generation at HPPs Jirau and Teles Pires. In Amazonas G & T, the increase was caused by the high generation of HPP Balbina and the commercial
start-up of the 1st generating unit of HPP Mauá 3.
On the other hand, the most significant negative change in power generation was in the CGTEE company, mainly due to the suspension of the
commercial operation of phase B of HPP Candiota, as of the 2nd semester.
Net Generation by
source (GWh)
2015
2016
2017
Evolution
2016 x 2017 (%)
Solar
Natural Gas
Wind
Uranium
Hydro
Coal
Oil
TOTAL
0.0
4,170.0
1,475.0
0.8
3,448.0
3,383.0
14,808.0
15,864.0
1.3
3,673.7
3,594.3
15,741.2
139,305.0
143,827.0
155,128.9
2,212.0
4,138.0
2,281.0
2,113.0
1,589.5
2,418.8
166,108.0
170,916.8
182,147.7
68
7
6
-1
8
-30
14
7
The data presented consider corporate plants, shared ownership and Itaipu Binacional.
For details on the energy generated by company, access our Management Report, item 5.1, page 49, available at: https://bit.ly/2rFK0Hk.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Availability
G4-EU11 / G4-EU30
The availability factor is the indicator that is associated with the time that a
power plant is available to generate power with greater reliability and continuity,
that is, fewer stops and duration for planned and forced maintenance.
Average plant availability factor by energy source (%)
For the SPCS, the availability factor by wind and water
source was, in 2017, respectively 95.84% and 96.77%.
The data presented consider corporate plants, shared
ownership and Itaipu Binacional.
Yearly average generation efficiency of thermal
plants by energy source (%)
64
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Transmission
Lines and substations profile
Strategic Expansion
65
2017 Outlook
Transmission lines
G4-EU4
On December 31st, 2017, our transmission lines
network totaled approximately 71,684 km.
Of this total, 9.5% (6,823 km) are corporate,
79.5% (57,010 km) refer to corporate assets
under O&M agreements and 10.9% (7,851
km) correspond to ownership interest in SPCs.
Considering only the basic SIN grid, that is,
voltages of ± 800, 750, ± 600, 525/500, 345
and 230 kV, we are responsible for 64,944
km of transmission lines, about 49% of all
transmission lines in Brazil.
Substations
At the end of 2017, we had a transformation
capacity of 250,493 MVA, of which 91.5%
(229,192 MVA) through our corporate
substations, and 8.5% (31,302 MVA) in SPCs. In
a leveraged manner, that is, considering all the
capacity of the SPCs in which we have a stake,
Eletrobras contributed with 270,435 MVA in
transformation capacity.
We are Latin America’s largest transmitter, we have played a key role in the
interconnection of Brazil in the last decades and in 2017 we accounted for
almost half (48.9%) of the transmission lines above 230 kV in the country.
In 2017, we added 1,201 km of transmission lines in partnership (SPCs) and 274 km in
corporate lines. In the last five years, we have expanded an average of 2 thousand km per
year, especially through SPCs, reflecting our strategy of acting in a relevant way in the
sector, maintaining the leadership.
Expansion of transmission lines by type of project (km)
In 2017 we had the goal of implementing a portfolio of contracted transmission projects,
equivalent to 12,667 km of transmission lines. From 2015 to December 2017, Eletrobras and
its partners added 6,898 km of transmission lines to the National Interconnected System.
From 2018 to December 2019, Eletrobras and its partners will incorporate 3,583 km of
transmission lines.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS 66
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS The highlight in the transmission expansion in the
year was the conclusion, two months ahead of the
commitment to Aneel, of the construction project to
build the largest direct current transmission line in
Latin America and two converter substations (Xingu
/ PA and Estreito / MG), by SPE Belo Monte Power
Transmitter.
With 2,092 km and unprecedented technology in
Brazil (ultra-high voltage of 800 kV-CC), the line
allows the transport of up to 4 thousand MW of power
to the Southeast and the Midwest. The project, which
had an estimated global investment of R $ 4.5 billion,
was established in the sector planning and is part of
the Growth and Advancement Acceleration Program.
In addition to the expansion of our operations, our PDNG 2018-2022
provides for the modernization and automation of facilities from the
deployment of teleassistance resources that should allow the remote
operation of facilities to increase operational efficiency and reliability
and reduce costs.
We have the goal of implementing the portfolio of
contracted transmission projects that adds 12,667 km
of transmission lines by 2022. From 2015 to 2017, we
implemented 4,158 km of lines.
67
Quality and efficiency
G4-EU6
In 2017, the transmission lines availability rate, that is, the percentage of
hours in the year in which the lines remained available for the transmission
system, totaled 99.81%, an increase of 0.12 pp in relation to the previous year.
Transmission lines availability rate (%)
In order to monitor the quality and efficiency of the service provided,
we monitor the robustness indicator, which assesses the ability of the
basic grid to withstand contingencies without disruption of power
supply to consumers, considering only disturbances originating from the
transmission grid of Eletrobras Companies.
Learn in detail the extent of transmission lines and substations per
company and regulatory regime in our Management Report, pages 52
and 53, available at: https://bit.ly/2rFK0Hk.
The Eletrobras System has been maintaining the same performance from
the latest years, with emphasis on the robustness for any power outing
which had a considerable increase, considering the smaller number of
disturbances which caused power outings in 2017.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Robustness indicator of the Eletrobras System (%)
Losses
G4-EU12
68
The transmission technical losses Index was 1.78%, improvement of
0.24 p.p. when compared to 2016. The electrical losses are due to the
grid topology and to the operating point of the system, both situations
beyond the control of the transmission companies. Therefore, changes
to the profile of the optimization of the electro-energetic operation of
the SIN generate increases or reductions of the losses that, in the current
Brazilian regulatory model, have the cost split between consumers and
generators, without any charge to the transmission company.
Technical Losses by Transmission (%)
Worker at TL - Eletrobras Furnas/Daniela Monteiro
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Distribution
Context
Eletrobras’ Electric Power Distribution Companies (“EDC”)
operate in two (02) states in the Northeastern area and in four
(04) states in the Northern area, serving more than 4 million
consumers. At the close of the reporting period, these companies
used a low, medium and high voltage power distribution grid,
252,329 km long with a total of 229 substations, comprising 476
municipalities.
The first initiative of the “Financial Discipline” cornerstone
of the PDNG 2018-2022 includes the privatization of the
distribution companies. The leave of the distribution segment
should contribute to the improvement of our EBITDA and avoid
disbursement of funds to finance the cash deficit and the
investments of these distributors, contributing to the strategy to
reduce the net debt / EBITDA indicator.
In this sense, in February 2018 the sale of the six distributors was
approved, through the assumption of debt of R$ 11.2 billion.
Operation and trading
Eletrobras’ distribution companies generated a volume of
energy in the captive market of 16,118 GWh, a 6% reduction
when compared to 2016, mainly due to the economic slowdown,
impacting the industrial and commercial classes by -32.8% and
-6.7%, respectively.
69
Trading of Electric Power of Distribution Companies
Consumption
Classes
Power Sold (MWh)
2016
2017
Residential
7,080,356
7,185,000
Industrial
2,555,741
1,718,713
Commercial
3,754,061
3,500,794
Rural
773,598
802,018
Public Administration
1,427,283
1,419,756
Public Lighting
782,716
Public Service
638,367
Own Consumption
70,632
900,266
560,802
30,426
TOTAL Captive
17,082,754
16,117,776
Supply*
388,789
394,963
TOTAL P. Sold
17,471,543
16,512,739
%
1.48
-32.75
-6.75
3.67
-0.53
15.02
-12.15
-56.92
-5.65
1.59
-5.49
* The value of 2016 was changed after considering also the supply of Alagoas, Piauí and Rondônia.
Worker at distribution line – Eletrobras Dist. Alagoas/ Lula Castelo Branco
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS 70
Quality and efficiency
G4-EU28; G4-EU29
Power losses and default
G4-EU12
Quality of distribution services is monitored by changes in
the DEC ratio (Equivalent Duration of Interruption), which
measures how many hours a consumer unit experienced
power outage; and the FEC ratio (Equivalent Frequency of
Interruption), which indicates how many times, on average,
there was a disruption in the supply of energy to consumers.
Losses in the distribution of electric power are measured by the difference
between the power injected in the distributor’s network and the total power
supplied, and may occur due to technical factors - those inherent to the
transportation process, voltage transformation and metering of energy in the
utility company’s network; -or non-technical factors such as electricity theft or
fraud, metering errors, billing errors, and unmetered consumer units.
In 2016, the Eletrobras distribution companies achieved a
positive evolution, reducing the DEC by 11.9% and the FEC by
14.7%, as shown in the following chart:
Evolution of quality in distribution
In 2017, Eletrobras’ distributors recorded 32.29% of consolidated losses, an
increase over previous years as a consequence of the non-inclusion of CELG-D
concessionaire numbers, sold at the end of 2016, which, due to its area of
operation, has lower loss rates than when compared to our companies located in
the North and Northeast.
Technical and non-technical losses in distribution (%)
Get to know the distributors’ operational indicators detailed by company in our Management Report, pages 59 to 63,
available in: https://bit.ly/2rFK0Hk.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Sector programs
G4-EU7; G4-EU23
71
We support important initiatives by the federal government to
promote the sustainable development of society and the sector
through universal access to electric power, energy efficiency incentive
and expansion of science and technology in the country.
Benefits: incentive to the technological development of
electricity powered equipment, reduction in the emissions of
carbon dioxide equivalent (CO2e), better consumption efficiency
and therefore, greater energy availability, which allows to
postpone investments in the sector expansion.
We had the goal of developing a portfolio of projects related to the
sale of energy efficiency services. Between 2015 and December 2016,
Eletrobras composed a contract for the sale of energy efficiency
services in the amount of R$ 408 thousand.
Main initiatives and results in 2017
Procel Seal
Get to know below the main programs developed by the government in
2017, the contribution from Eletrobras and the results achieved.
National electric energy conservation
program – Procel
What it is? Program coordinated by the Ministry of Mines and Energy
destined at promoting the efficient use of electricity and fighting
waste.
Where? Across the country, present in the various sectors of the
economy.
How? Education initiatives (Procel Educação), dissemination of
information (Procel Info), of energy efficiency in the segments of
buildings, environmental sanitation, municipal energy management,
public and industrial lighting and support for energy efficiency through
transparency for the consumer (Selo Procel).
The Procel Seal allows the consumer to learn the energy consumption
profile of equipment and appliances, promotes the technological
development and improvement of the manufacturers and supports the
training in laboratories and research centers.
Supported by the program, manufacturers are also encouraged to
comply with maximum energy consumption rates for devices, under
the Energy Efficiency Act #10,295/2001, and receive subsidies for the
preparation of technical energy efficiency standards. Eletrobras Cepel
plays an important role in this project.
The Procel Seal, managed by Eletrobras with the support
of Inmetro, produced in 2017 an estimated saving of 21.2
million megawatt-hours (MWh) - equivalent to the annual
consumption of 11.2 million residences -, avoiding the
emission of 1.96 million CO2e.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Procel Results
Note: 2017 data are estimated. Further information can be found at Eletrobras website.
Procel Educação: the program contributes to the construction of
a knowledge base on energy efficiency and sustainability through
the dissemination of information and the availability of educational
resources to the country’s formal education system, encouraging
citizens to develop skills, competences and attitudes towards the
effective use of energy.
Through Procel in Schools, has developed and made available
the “Energy that Transforms” and “Nature of the Landscape”
methodologies, to stimulate and facilitate teachers’ approach to
basic education on energy efficiency and sustainable development.
The actions of Procel in Schools are carried out through the Energy
Efficiency Program (PEE), regulated by Aneel, and executed by the
electric power distribution utilities in a partnership with state and city
government education departments.
72
The Procel in Schools projects in 2017 benefited 3,360
schools, 10,640 teachers and 937,616 students. In that sense,
574,894 educational kits of the program were distributed.
In professional training - aimed at undergraduate and graduate
students and energy professionals -, Eletrobras and Procel have
invested in the creation of a network of laboratories and research
centers to design and disseminate advanced educational tools in
energy efficiency and develop and monitor energy optimization
studies.
In 2017, there were 44 laboratories for teaching and research and three
excellence centers in the network. Throughout the year, 25 master’s
dissertations and 32 undergraduate monographs were produced, 80
articles published in national and international congresses proceedings
and in periodicals, as well as participation in 22 academic events,
including seminars, workshops and lectures.
Procel Info: the Brazilian Energy Efficiency Information Center
(Procel Info) gathers, generates, and disclose important information
originating in Brazil or abroad relating to energy efficiency, through
the Procel Info website, developed by Eletrobras in 2006.
The website had reached, in 2017, 52,491 registered users, with 4,728
new users, 9.9% more than in 2016. In all, the website promoted 737
services contacts to the public, 535 of which were via email procel@
eletrobras.com and 202 by means of the Contact us of the Procel Info
(procelinfo@eletrobras.com). Pageviews reached 1.5 million times, a
monthly average exceeding 125 thousand views.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Programa Luz Para Todos
(Light for all) - LPT
What it is? The Luz para Todos Program aims
to provide by 2018 the service in electric
energy to the rural portion of the Brazilian
population that has no access yet to such
public service.
The Luz para Todos program,
operated by Eletrobras and
coordinated by MME, was considered
by the United Nations as one of
the largest social programs in the
world, promoting universal access to
electricity.
Eletrobras manages contracts and monitors
the execution of rural electrification
works associated with the program.
Concessionaires and licensees of electricity
distribution and companies providing
public electricity distribution service carry
out the works. The program also has the
participation of Caixa Econômica Federal
(CAIXA), state governments and, since May 1st,
2017, the Electric Energy Commercialization
Chamber (CCEE), as the sector funds manager.
Resources for this program come from the
federal government as subsidy—through the
Energy Development Account (CDE) and from
credit facilities—through the Global Reversal
Reserve (RGR) and CAIXA, in addition to
investments from state governments involved
and Executing Agents.
Where? Rural areas in the entire Brazilian
territory.
How? Promoting universal access to
electricity, free of charge, through
extensions of electricity distribution grids,
implementation of generation systems with
renewable sources of energy in remote areas
and the connection, with the free installation,
in residences of up to three points of light,
one per room, two power outlets, conductors,
lamps and other necessary materials.
73
Benefits: in addition to bringing energy
to the rural population, the program
offers solutions for its use as a vector of
social and economic development in low
income communities, contributing to
poverty reduction and increasing family
income. Access to electricity facilitates
integration with health services,
education, water supply and sanitation,
as well as federal government social
programs. It favors the permanence of
families in the countryside, improving
the quality of life, since with the arrival
of electric power, families are able to
acquire rural electro equipment, allowing
increasing their income.
Estimates of the MME indicate that
more than 500,000 direct and indirect
jobs were generated as a consequence
of the implementation of the program,
which prioritizes the use of local labor
and the purchase of domestic materials
and equipment.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS 74
Main initiatives and results in 2017
• Construction of 761,850 km of high and low voltage
electrical grids;
At the end of 2017, investments foreseen for the implementation of the program
until 2018 totaled R$ 25.16 billion, of which R$ 18.26 billion (73%) related to
sector resources (CDE and RGR), of which 82% were already available since 2004.
• Implementation of 7.94 million poles;
• Installation of more than 1.11 million transformers;
• Installation of 2,499 photovoltaic systems.
In 2017, 57,310 connections were made, adding to a total of 3,389,037
connections since 2004, which corresponds to more than 16.2 million people
benefited in the Brazilian rural environment. The overall goal of 3,373,118
connections by the end of 2017 was exceeded, fulfilling the commitments of the
executors with Eletrobras and the state governments.
Considering only the commitments with Eletrobras, there were
2,923,843 connections in 5,435 Brazilian municipalities since 2004,
93% of total contracted connections between the executing agents and
Eletrobras, in addition to:
Between 2010 and 2012, Eletrobras executed 18
agreements related to special projects with enabling agents
(based on ordinance 60/2009 of the Ministry of Mines and
Energy), using CDE resources for R$ 7.61 million, serving 377
consumer units located in extremely remote areas using
photovoltaic systems. By the end of 2017, 328 consumer
units have been proven to be connected, according to on-
site inspections, that is, reaching 87% of the established
target.
Benefited by the Luz para Todos program – Eletrobras holding
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS 75
Financial results
Operating revenue
The net operating revenue in 2017 totaled R$ 37,876 million, reduction
of 37% in relation to the R$ 60,316 million in 2016. Excluding the
revenue from the Basic Network of the Existing System (RBSE), which
positively impacted revenues in 2017, and revenues from the sale of
Celg-D, which positively influenced the 2016 result, net operating
revenue would present an increase of 17%, from R$ 27,930 million in
2016 to R$ 32,639 million in 2017.
Gross Revenue Evolution by Business Segment
(in R$ million)
Incentive Program to Alternative Electric
Energy Sources - Proinfa
What it is? Program created in 2004 to increase the participation of
alternative renewable sources in the Brazilian energy matrix.
How? Adding projects based on wind, small hydroelectric power
plants (SHP), and biomass sources to the SIN. The Ministry of Mines
and Energy defines the annual amount to be contracted and evaluates
the impact of costs to final consumers and Eletrobras carries out the
contracting and selection of projects for the purchase and sale of
energy. The contracting of energy from projects ended on December
31, 2011.
Benefits: diversification of the Brazilian energy matrix, creation of
about 150,000 direct and indirect jobs in the whole country, industrial
advancement and internalization of state-of-the-art technology and
reduction of greenhouse gas emissions and exposure to risks related to
energy generation activity, such as hydrological risk.
Main initiatives and results in 2017
Proinfa added to the National Interconnected System
a total of 131 new developments divided into 60 PCHs
(1.159,24 MW), 52 wind farms (1.282,52 MW) and 19
thermal and biomass plants (533,34 MW), totaling an
installed capacity of 2.975,10 MW. In 13 years, the program
contributed to the system with 87.6 million MWh of energy
generated, and in 2017, 8.6 million MWh were generated at
a cost of R$ 3.32 billion.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Generation
Generation revenues increased 13.4%, going from R$ 18,632 million in
2016 to R$ 21,136 million in 2017, mainly due to improved negotiations
in the free contracting environment.
In 2017, we created an Integrated Trading Committee,
which unifies the energy trading strategy and process in all
our generation companies, bringing important optimization
and synergies. We have also created an exclusive trading
superintendence in the generation board that supports this
process.
As a result, we gained greater bargaining power vis-à-vis
the market and obtained better performance in energy
auctions.
Transmission
Transmission revenues fell 69%, from R$ 33,557 million in 2016 to
R$ 10,378 million in 2017, mostly due to the effect of the Ordinance
of the Ministry of Mines and Energy, which established the payment
conditions and compensation related to the (RBSE), enabling– in
2016 – the accounting recording of the credit with impact on the
transmission revenue in the account of indexation of Transmission
return rates of R$ 28,601 million.
76
Excluding the accounting effects of RBSE, transmission revenues would
have grown by 10%, mainly driven by growth in revenue from return
on investment in transmission, which increased by 42% from R$ 806
million in 2016 to R$ 1,140 million in 2017.
Distribution
Revenues from the distribution segment presented a decrease of 24.1%,
going from R$ 16,349 million in 2016 to R$ 12,416 million in 2017,
mainly due to the sale of CELG-D in the previous year.
Costs and expenses
Operating costs decreased by 5.2%, from R$ 16,211 million in 2016 to
R$ 15,374 million in 2017. Operating expenses, in turn, fell 35.4%, from
R$ 31,264 million in 2016 to R$ 20,202 million in 2017.
Shareholding
Shareholding recorded drop of 14% resulting from accounting of
R$ 3,114 million in 2016 and R$ 2,692 million in 2017, with a special
mention of R$ 1,525 million from the sale of Celg-D in 2017 and the
recognition of RBSE by the subsidiary CTEEP in 2016, with impact on
the Eletrobras equity result of R$ 1.603 million partially offset by the
write-off arising out of investigation findings in SPC Belo Monte (R$ 91
million).
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Financial result
Statement of income for the year (DRE)
77
The net financial result went from net expense of R$ 3,931
million in 2016 to a net expense of R$ 5,193 million in 2017. Such
variation was caused mainly by the exchange variation in the
period that affected financing agreements and with suppliers,
and also the monetary update resulting from reduction of the
rates of the main indexes (inflation and SELIC).
Income tax and social contribution
The provision for income tax (IR) and Social Contribution (CSLL)
went from an expense of R$ 8,511 million in 2016 to an expense
of R$ 1,525 million in 2017, influenced by deferred taxes, mainly
by the effect of accounting of the Basic Network of the Existing
System (RBSE). The provision referring to RBSE was R$ 9,724
million in 2016 and R$ 1,674 million in 2017.
Result
G4-9
In 2017, we had a net loss of R$ 1,726 million, lower than the
R$ 3,513 million profit for 2016, mainly due to the impact of
operating provisions of R$ 5,747 (R$ 1,101 million of operating
provisions in the distribution segment) and the loss of R$ 4,179
million in the distribution segment. The result of 2016 was mainly
influenced by the Accounting of Remuneration related to the
credits of the Basic Network of the Existing System (RBSE).
Net Operating Revenue
2017
37,876
2016
Δ
60,316
-37.2%
Energy Purchased for Resale
-11584.925
-11264.044
2.8%
Charges upon Use of Electric Network
-1611.398
Fuel for Electricity Production
Construction
Gross Income
Personnel, Material, Services, and
Other
Donations and Contributions
Depreciation and Amortization
Operating Provisions/Reversals
Investigation Findings
Operating Result before Equity
Interest
Equity Interest
-425
-1752
22,502
-12,539
-164
-1751
-5747
0.0
2,301
2,692
Profit or Loss before Financial Result
4,993
Financial Income
Financial Expenses
Profit or Loss before Income Tax and
Social Security
Income Tax and Social Security
Net Profit or Loss for the Period
5152
-10345
-200
-1525
-1,726
-1805
-760
-2382
44,105
-10.7%
-44.1%
-26.4%
-49.0%
-12,267
2.2%
-219
-1844
-16723
-211
-25.1%
-5.0%
-65.6%
-100.0%
12,841
-82.1%
3,114
15,955
11223
-15154
12,024
-8511
3,513
-13.5%
-68.7%
-54.1%
-31.7%
-101.7%
-82.1%
-149.1%
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Value-added statement (DVA)
G4-EC1
EBITDA
The added value to be distributed in 2017 was R$ 24,521 million, 44%
lower than in 2016. The decrease is explained by the aforementioned
factors that influenced the company’s revenues and results.
EBITDA totaled R$ 6,744 million in 2017, a 62% drop over 2016.
Managerial EBITDA reached R$ 5,554 million, an increase of 44% when
compared to 2016.
(R$ million)
EBITDA and Managerial EBITDA
78
Consolidated debt
G4-9
Net debt at the end of 2017 was R$ 20,297 million, a reduction of 13.4% when compared to 2016. In the year, Eletrobras Holding chose not to
access the local or foreign capital market; also the Holding chose not to assume debts in the local or foreign banking market. The Eletrobras
Companies Chesf, Furnas, Eletronorte and Eletrosul captured together a total of R$ 1,433 million.
Get to know in detail the company’s economic-financial results in the year in the Management Report, starting on page 97, available at:
https://bit.ly/2vNKyAq.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS Capital market
Share performance
The year 2017 was characterized by
considerable changes in the political
scenario and in Brazil’s economic
guidelines, having as main highlights the
news related to Operation “Lava Jato” –
Car wash - and the accusations affecting
all infrastructure sectors in Brazil,
businessmen and Brazilian political class.
Another highlight was the news about the
democratization process of Eletrobras’
capital and the possible pension reform.
Nevertheless, the Ibovespa index, the main
indicator of the stock market, advanced
26.9% in 2017, considering the closing
score of December 28, 2017.
Eletrobras common shares (ELET3)
recorded a depreciation of 15.2% in 2017,
closing the year at R$ 19.34. We believe
that the devaluation of its shares in the
year reflects the political instability,
confirmed by the high volatility of
the market in the year, as well as the
uncertainties related to the recovery
prospects of the economy.
79
Class “B” Preferred Shares
Despite the decline in 2017, our
shares have been significantly
appreciated in recent years.
Between January 2016 and
December 2017, our market value
almost quadrupled, going from
R$ 7 billion to R$ 27 billion.
See the company’s share capital
profile on page 14 and details on
share performance on page 111 of
our Management Report, available at:
https://bit.ly/2rFK0Hk.
Shareholding Structure
Common Shares
* All of the Preferred Shares are distributed among
“Other”, that is, they are not concentrated in any
particular shareholder.
CONTENT
ANNUAL REPORT • 2017CHAPTER 5 • PERFORMANCE AND RESULTS 80
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT Management
Rational and responsible environmental management is essential to the sustainability of our operations and our value creation model. Therefore,
we rely on an Environmental Management System aimed at monitoring all of the companies’ actions related to the environment, ensuring the
mitigation of negative impacts and the continuous identification of prevention and preservation measures.
Eletrobras environmental management system
Environmental Policy
Environment Committee (SCMA)
Corporate Sustainability Management
Indicators System (IGS SYSTEM)
81
It guides the social and environmental
management of the generation,
transmission and distribution projects
and administrative activities.
It supports the companies’ actions
to improve environmental quality,
contributing to the maintenance of
a balanced environment for present
and future generations and for the
construction of a transparent dialogue
with all stakeholders.
Space for discussing practices
and guidelines for the social and
environmental issues.
Since 2010, strategic tool monitoring the
environmental indicators of all Eletrobras
companies.
It is composed of managers of Eletrobras
companies’ environmental areas, and, at
the technical level, specialists organized
in thirteen topic-specific working groups
and a temporary committee to propose
guidelines for the relationship with
indigenous peoples.
It covers topics such as water, energy,
waste, biodiversity, volunteer actions, and
compliance.
Currently, it has 225 performance
indicators and 354 variables, with 484
registered users.
Internal checks of the data entered in the
IGS Environmental System are performed.
Learn more about the Policy, the Committee and the IGS System at: https://bit.ly/2HtMkrE.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT 82
Eletrobras companies invested
a total of R$527.0 million in
social and environmental
actions in 2017.
Several Eletrobras companies’
operations are also certified by ISO
14001, which specifies global
best practices of corporate
environmental management.
ISO 14001 certified operations: Tucuruí
HPP, Samuel HPP, Coaracy Nunes HPP
and associated 138kv transmission
lines, I and II circuits and substations
Central and Santana – of Eletrobras
Eletronorte; and Substations Foz do
Iguaçu and Ibiúnas – of Eletrobras
Furnas; substation maintenance service
of Paulo Afonso – of Eletrobras Chesf;
Eletrobras Furnas thermoelectric power
plants and Central Nuclear Almirante
Álvaro Alberto (CNAAA) nuclear power
plant – of Eletrobras Eletronuclear.
External audits are also carried out
as required by State Law 1,898/91 in
Eletrobras Furnas thermoelectric
power plants and Eletrobras
Eletronuclear’s CNAA.
Group of TL workers - Eletrobras Furnas/Daniela Monteiro
Sharing best practices
In line with our commitment to sustainable development and social and environmental
value creation, since 2011, the Best Practices Project has been gathering the most
important social and environmental initiatives – mitigation, environmental compensation
or voluntary actions are carried out by Eletrobras companies, bringing benefits to the
region in which these projects are implemented.
As a result of the program, our voluntary environmental actions, which go
beyond what is required by law, reflect the Company’s growing commitment to
sustainability.
Learn more about the Best Practices Project on our website https://bit.ly/2EwU9uk. Below
we present the main environmental aspects of our operation and the highlighted projects
in each one of them.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT
Learn more in this and the next sub-chapters about our
water resources and biodiversity management and how we
act to contribute to environmental protection, mitigation of
negative impacts and development and generation of value.
Water
Impacts
G4-EN8
Reservoirs
83
others through run-of-the-river systems. Hydroelectric power plant
reservoirs are able to alter the volume of water downstream of dams, as
they have the capacity to store water during flood periods. This way, they
manage to control the water bodies downstream of dams, ensuring a
minimum flow volume during periods of low inflow and flood control, which
can avoid natural flooding. The hydroelectric power plants that run through
run-of-the-river systems do not have the capacity to store water and are
not able to change the downstream flow. All the water is turbinated or
spilled and returns to the river with the same quality and quantity as it was
when it reached the dam.
The Electric System National Operator (ONS) define the volumes of water
stored in the reservoirs of the National Interconnected System (SIN)
according to the observed flows and storage capacities and operating
restrictions of the system. Also, the ONS considers as other uses of water in
the reservoir region, focused on water security in the basin.
“Water is a fundamental resource for everyone. Businesses
and communities depend on it. “
Elmírio Eugênio Guimarães, community leader, in an interview that based
the materiality matrix that guides this report (learn more on page 3).
CONTENT
Management of
reservoirs
Relationship
management
Biodiversity
protection
• Flow monitoring
• Multiple use of
• Participation in basin
committees, water
councils, etc.
reservoirs by riparian
communities and
other stakeholders.
• Respect for
indigenous people
• Permanent
Preservation Areas
around the plants
(PPAs)
• Programs for the
preservation of
terrestrial and aquatic
flora and fauna
Vegetation and river in Kaiapó territory - Eletrobras holding/Jorge Coelho
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT
The rational use of water
resources
Percentage of natural flows in relation to the historical average of flows
(calculated from 1931 to 2017)
84
The rational use of water resources
is essential for the execution of our
operation, which is directly impacted
by variations in rainfall, affecting the
volume and flow of the water bodies
on which the hydroelectric power
plants depend.
Since 2012, the electric power sector
has been facing problems related to
hydroelectric generation due to the
irregular rainfall of some river basins,
which affects the flow of rivers. In 2017,
the rainy season started with a slight
delay, and the constant influence of
atmospheric high pressure systems
stopped the rain in the Tocantins and
São Francisco river basins, keeping
the rainfall volumes of these areas
below the historical average until
October 2017.
Three Eletrobras companies’
hydroelectric power plants operate
with reservoirs which are among the
largest in the country: Sobradinho (on
the São Francisco river), Furnas (on the
Rio Grande river) and Tucuruí (on the
Tocantins river).
Source: Electric System National Operator (ONS) and National Water Agency (ANA)
*Flow data in 2016 and 2017 were obtained through the SAR system on ANA’s website.
Within this scenario, Sobradinho and Furnas were not completely refilled in the last years and, in
2017, presented decrease in the volume of water compared to 2016. On the other hand, Tucuruí was
completely refilled in 2017.
Financial Compensation
Eletrobras companies pay financial compensation for the use of water resources in their hydroelectric
power plants, pursuant to Law 7,990/1989. The Brazilian Electricity Regulatory Agency (Aneel)
manages the collection and the distribution of these resources among the beneficiaries: states,
municipalities and bodies run directly by the federal administration.
These amounts are calculated based on the energy generated each year. In 2017, a total of R$389
million was paid – the lowest amount paid in recent years due to the already mentioned water
crisis – which represents about 24% of the financial compensation paid in the country.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT Water consumption
G4-22
Eletrobras companies use water in their operations and administrative processes. Water used in the
operations is usually withdrawn from surface water bodies or underground sources, as granted by the
competent bodies. Water supply to the companies’ administrative buildings located in urban areas is
usually performed by a public service concessionaire.
In 2017, 3.9 million m³ of water was used for administrative purposes, including the volume used in the
Eletrobras Furnas fish farm. This volume is 9.15% lower than in the previous year. The administrative
consumption of water supply network, an indicator in the PDNG, is 12% lower than in the previous year,
due to the repair of leaks and the return of property facilities of some companies.
The table below presents a data correction of the volume of water directly withdrawn from water bodies
in 2016. Regarding thermoelectric power generation, 3,394.0 million m³ of water were used in 2017,
1.75% higher than in the previous year.
Volume of water consumed (in thousands of m3)
Source
2015
20161
20172
Var. 2016 x 2017
(%)
Administrative activities
Surface water
Ground water
Water Supply Network
Thermoelectric power generation
3,611.2
230.4
598.5
3,396.7
275.7
643.5
3,150.0
205.8
565.1
Surface water
Ground water
Water Supply Network
Seawater
TOTAL
20,531.7
10,996.5
8,604.8
193.2
-
3.6
0.2
-
0.1
3,176,016.9
3,315,363.7
3,376,102.0
3,201,181.9
3,330,679.9
3,388,627.8
-7.3
-25.4
-12.2
-21.7
-
-50.0
1.8
1.7
1 There was correction in the 2016 data for Eletrosul (Administrative activities - ground water) and for CGTEE (Thermoelectric
power generation - surface water)
2 By 2017 all companies reported the volume of water withdrawn from the water supply network.
85
The 22% reduction in the use of
surface water in thermoelectric power
generation in 2017 is due to the
closure of Phase B of the Candiota
TPP, due to the Conduct Adjustment
Agreement (TAC) signed with the
Brazilian Institute of Environment
and Renewable Natural Resources
(IBAMA), and the reduction in
consumption of the Eletrobras Furnas’
Santa Cruz TPP, due to a decrease
in generation.
Seawater is used by Eletrobras
Eletronuclear for cooling the
secondary system of Angra 1 and 2
nuclear power plants and is completely
returned to the sea at Saco Piraquara
de Fora, with a slight increase
in temperature.
The water used by the hydroelectric
plants for generating energy is only
diverted to power turbines and
therefore does not add up to the
total volume of water consumed
in the table above. It is important
to highlight that operations are
constantly monitored to ensure
compliance with standards
established by environmental
legislation and do not affect
aquatic fauna.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT
Best management practices
Commitments and initiatives
Reduced consumption in the
Tucuruí Hydroelectric Power Plant
At the Tucuruí Hydroelectric Power Plant, in
Pará, we implemented measures to reduce
administrative and operational water
consumption, such as: valve adjustments,
improvements in equipment cooling
towers, replacement of toilet flushes
and faucets, and rainwater collection for
cleaning and gardening.
As a result, we were able to reduce water
treatment at the Water Treatment Plant
(ETS) from 100 m3/day in 2015 to 28 m3/
day in 2017, a significant reduction of 72%.
Beaches in São Miguel do Iguaçu - Itaipu Binational
We developed a Water Resources Policy in 2010
with the aim of promoting the sustainable and
rational use of these resources, considering
their multiple uses in the energy sector.
In order to monitor the water issue, Eletrobras
companies rely on the Working Group on
Water Resources and Hydroelectric Potential of
Eletrobras Companies (GTRH-EE), which since
2005 has been responsible for addressing water
resources issues that impact their performance
and results.
The group prepares annual reports, with an
overview of the water resources used for
energy generation in Eletrobras companies,
with evaluations and follow-ups of the monthly
average flows of the projects.
Considering the relevance of water resources
for its business, Eletrobras also participate in
several initiatives aimed at the development
of water management, such as hydro basin
committees, water councils, technical
chambers and debates on the subject in
other technical forums.
Eletrobras companies’ Water Resources Policy is
available at https://bit.ly/2Fg7JTb.
86
Biodiversity
Impacts
G4-EN11; G4-EN12; G4-EN13
Eletrobras considers that biodiversity is
directly related to the nature of its operations.
Therefore, managing and mitigating impacts
on biodiversity are a priority in its strategy
and a guideline that must be followed from
the planning to the operational phase of
the projects.
In the planning phase, Environmental
Impact Studies (EIA) are responsible for the
characterization, evaluation and mapping of
the biodiversity of the areas to be used for
the implementation of the projects and for
the identification of the possible impacts.
To mitigate the impacts on biodiversity,
monitoring, control, recovery and conservation
actions are developed according to the
principles and guidelines of the Eletrobras
Environmental Policy.
The most relevant impacts on biodiversity,
which may take place during the
implementation and operational phase of the
projects, are listed in the table below, as well as
the actions proposed to mitigate them.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT Possible direct impacts
Change in water quality
Possible indirect
impacts
Proliferation of
macrophytes
Activity
Type of project
Examples of actions/
programs
Actions developed by
the companies
87
Generation
Hydroelectric power plants
Vegetation loss
Forest fragmentation
Generation
Transmission
Change in ecosystems/habitats
Decreased diversity of
flora and fauna
Generation
Transmission
Interference with flora and fauna
Change in communities Generation
Transmission
Hydroelectric power plants
Wind farms
Transmission and
distribution lines
Hydroelectric power plants
Thermoelectric power
plants
Transmission lines
Hydroelectric power plants
Thermal power plants
Wind farms
Transmission lines
Water quality monitoring
programs
Reforestation programs
Support for the creation
or maintenance of
conservation units
Limnological and water
quality monitoring program
– Furnas
Program for restoration of
riparian areas in the lower
São Francisco region –
Chesf
Biodiversity corridor –
Itaipu Binacional
Reforestation, wildlife
rescue and monitoring
programs
Sea turtle monitoring
project
Promontar – Eletronuclear
Interference with the migration
routes of aquatic fauna
Isolation of
populations
Generation
Hydroelectric power plants
Fish Transposition
Mechanism
Spawning Channel – Itaipu
Binacional
Interference with the migration
routes and collision of birds
Reduction of migratory
bird populations
Generation
Transmission
Distribution
Wind farms
Transmission and
distribution lines
Installation of signaling
equipment to avoid
collision
Higher transmission towers
Best management practices
Protected areas support
The analysis of risks related to biodiversity and water bodies is critical for the
improvement of Eletrobras companies’ management and performance. Based on
this perception, the risks related to biodiversity were identified in the Company’s
Risk Matrix and reported to the Board of Executive Officers.
Through conservation actions, Eletrobras companies seek to have a positive impact
on biodiversity and water bodies in the areas in which they operate, through
initiatives to support protected areas, as well as projects for protection and
preservation of endangered species.
Support for protected areas has proven to be an effective
measure to contribute to biodiversity protection. Since 2012,
Eletrobras companies have been supporting protected areas
such as conservation units, indigenous lands and archaeological
sites, located in the main Brazilian biomes (Cerrado, Atlantic
Forest, Amazon, Caatinga and Pampa). In 2017, Eletrobras
companies supported 67 protected areas, totaling 8,941,349.00
hectares, including 8 Protected Areas that are in their areas of
operation or surroundings.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT
Eletrobras companies also
have their own protected
areas, created with the
aim of contributing to the
conservation of the regional
biodiversity, scientific research
and environmental education.
The Wildlife Preservation
Areas, that make up the
Mosaic of Conservation Units
of the Tucuruí Lake, managed
by Eletrobras Eletronorte,
the Santa Maria Biodiversity
Corridor, the Maracaju
Biological Sanctuary and
the Santa Helena Biological
Sanctuary, managed by Itaipu
Binacional and Trilha Porã, the
Restinga de Mambucaba Park
and the CECREMEF Forest,
managed by Eletronuclear,
are examples of these
protected areas.
Protected areas supported by Eletrobras in 2017
88
Caption
Environmental
Protection Area
Area of Relevant
Ecological Interest
Forest
Green Corridor
Ecological Station
National Forest
Ecological Park
State Park
Forest Park
City Park
National Park
Natural Park
Biological Sanctuary
Biological Reserve
Sustainable Development
Reserve
Ecological Reserve
Extractive Reserve
Private Reserve of
Natural Heritage
Archaeological Site
Indigenous Land
Biome
Amazon
Caatinga
Southern Fields
Cerrado
Coastal
Caatinga-Amazon Ecotones
Cerrado-Amazon Ecotones
Cerrado-Caatinga Ecotones
Atlantic Rainforest
Pantanal (wetlands)
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT 89
Endangered species preservation
Biodiversity protection
Itaipu Binacional develops the Harpia Harpyja
Reproduction Program, an endangered species, which
in 2017 reached an unprecedented achievement: the
birth of the second generation raised in captivity, a
rare case in the world, with records only in zoos of the
United States and Panama. With the new offspring, 31
harpy eagles gave births in the area, which makes the
Itaipu Binacional’s program the largest in the world.
Since 1998, Eletrobras Amazonas GT has been carrying
out the release of chelonians with the participation of the
riverside communities of the Uatumã river. The project
includes conservation and protection of species,
environmental education promoted through training
courses for local communities and awareness of residents.
Up to today, the project has been responsible for the release
of nearly 200,000 hatchlings.
Since 2013, Eletrobras Eletronuclear has been carrying out
the Sea Turtle Monitoring Program – Promontar, with the aim
of monitoring the sea turtles that spend part of their lives in
waters near the Angra nuclear power plant. The program was
created due to popular demand during public hearings in the
licensing process of the Angra 3 plant, to assess a possible
impact of the plant on sea turtles in the surrounding area.
Today, it is the only monitoring project for sea turtles in
the south of Rio de Janeiro, with a fundamental role in
the collection of data on the behavior and physiology
of these animals.
The Biodiversity: Our Heritage Program, of Itaipu Binacional, includes seven
biodiversity conservation projects. The company maintains eight reserves
and biological sanctuaries with a total of 41,039 hectares. Since 1986, studies
on wildlife have been carried out and estimate that there are 44 species of
mammals, 305 of birds and 37 of reptiles – many of which are endangered – In
the reservoir protection area, in the reserves and in the sanctuaries located
on the Brazilian side of the Itaipu Lake. In addition, Itaipu develops the largest
reforestation program in the world implemented by a hydroelectric power
plant. Since 1979, it has promoted the planting of more than 44 million
seedlings in the Brazilian and Paraguayan shores.
Since 2012, Eletrobras Furnas has been developing the Natureza Doce project
at Pedra Branca State Park in Rio de Janeiro, with the aim of conserving
the native fauna of the Atlantic Forest biome, especially wild bees, which
are responsible for the local ecosystem balance. In 2016, Eletrobras Furnas
implemented the Honey Trail initiative, with environmental education actions
on biodiversity conservation. 100 seedlings of native plants such as Ipê
Roxo, Ipê Amarelo, Angico and Pau Brasil, were planted in the area with the
participation of children from a nearby school.
Eletrobras Eletronorte promotes actions for biodiversity preservation and
appreciation of the knowledge of traditional populations in the area around
the Tucuruí HPP. Under the Germplasm Program, the reforestation of native
species is carried out, with the participation of the local community and
the Parakanã indigenous tribe. It also promotes, together with the Waimiri
Atroari indigenous tribe, the fight against fauna and flora predatory actions,
the monitoring of the quality of water bodies in indigenous land and the
protection of the reproductive process of chelonians, in order to maintain the
balance of these population.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT Since 2003, Itaipu has been developing the
Cultivando Água Boa Program, in partnership
with 29 municipalities of the Paraná
Watershed 3, for water quality management
projects, focusing on the protection,
management, conservation, preservation
of biodiversity through the recovery of the
riparian forest, as well as the social and
economic development of local communities.
Learn more about the program at:
https://bit.ly/2IKKBhV.
In 2015, the Água Boa Program was
recognized by the UN in the 5th
edition of the Water for Life Award as
the best water management practice
in the world.
Commitments and initiatives
Since 2012, our Environmental Policy has
specific guidelines regarding biodiversity,
with the aim of improving management
and including the topic in Eletrobras
companies’ decision-making processes. In
line with public policies and international
agreements to which Brazil is a signatory,
Eletrobras companies seek to maintain
a systematic and ongoing improvement
process in management practices, with the support
of the IGS system, a tool that allows monitoring of the
environmental performance of the companies and a
“zero violations” target with relation to biodiversity.
We maintain a permanent working group – Working
Group on Water Resources and Biodiversity – to
address biodiversity issues. Since 2016, the group
has been developing a study on risk exposure related
to biodiversity and ecosystem services and the
opportunities of this interaction, aimed at improving
the companies’ management and performance.
In 2017, GT concluded the phase of identifying
impacts and dependencies related to
biodiversity and ecosystem services and
held the Biodiversity and Ecosystem Services
in Business Management workshop, whose
main focus was the relationship between the
business of large companies and biodiversity
and ecosystem services, which are vital issues
for the rational use of natural resources. State
of the art knowledge about this relationship
and the best management practices within
companies was one of the targets of the
event, from the exchange of experiences on
projects that have succeeded in protecting the
ecosystems and the essential services they
provide to society.
90
In addition, we participate in
external forums that address
biodiversity issues. We can
highlight the Thematic Chamber
on Biodiversity and Biotechnology
(CTBio) of the Brazilian Business
Council for Sustainable
Development (Cebds), which, in
2016, developed a White Paper
containing a critical analysis of the
GRI biodiversity indicators.
We also highlight our participation
in the pilot project developed
by the Cambridge Institute for
Sustainability Leadership (CISL)
of the University of Cambridge
for the creation of the “Natural
Capital Protocol” that aims to
help businesses identify, measure
and value their direct and indirect
impacts and dependencies on
natural capital.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT
Climate change
G4-EN6; G4-EN7
Impacts
91
The energy and fuel consumption of our operation and our chain generates greenhouse gases (GHG) emissions, considering the following scope:
Eletrobras Companies’ GHG Inventory
Scope 1
Scope 2
Scope 3
Emission
Factors:
(cid:31) Direct Emissions from
Fixed Sources (TPPs)
(cid:31) Emissions related to the
(cid:31)
amount of energy
acquired from the grid
Independent power
producers (IPPs)
Methodology
Electric Power
(MCTI )
Energetic
content of fuels
(BEN 2015)
IPCC (2006)
MMA (2011)
(cid:31) Mobile Fonts
(cid:31) Fugitive emissions (SF6,
cooling gases)
(cid:31) Sanitary e(cid:31) uents
(cid:31) Other (cid:30)xed sources:
LPG, natural gas, diesel
from generator groups
and auxiliary boilers
(cid:31) Transmission losses
(cid:31) Air travel
(cid:31) Transport of non-energy
(cid:31) Distribution losses
products
(cid:31) Fuel transportation
(cid:31) Transportation of
employees
Gases:
CO₂
CH₄ N O₂
SF₆
PFC HFC
GHG Protocol
IPCC (2006)
Operational
Control Approach
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT On the other hand, the irregular rainfall, caused by climate
changes, has an impact our operation, and directly affects our
hydroelectric power generation activities - due to the volumes
and flow of the river basins of our plants. The lower availability
of water for water generation also brings another impact:
an increase in thermal generation, based on fossil fuels and,
therefore, intensifying GHG emissions.
Our transmission and distribution activities are also affected by
climate changes that generate natural disasters and extreme
events, interrupting the operation of networks and causing social
and economic damages.
In addition, we may be negatively impacted by the creation of
new legislation for GHG emission intensive sectors or activities,
or by the adoption of carbon pricing as an efficient and effective
alternative to reduce GHG emissions. This scenario is becoming
increasingly likely, since Brazil, as a signatory to the Paris
Agreement (COP 21/2015), aims to reduce its GHG emissions by
37% by 2025.
These issues are being considered as challenges to be faced by
the Company through adaptation studies and analysis of risks and
vulnerabilities to climate change.
92
This scenario also brings opportunities for the creation of new technologies
and business models towards a low-carbon economy. Our innovation,
research and development projects seek to reverse climate change risks
into new business and social value creation opportunities.
Energy consumption
In 2017, Eletrobras companies consumed 126,891,875 GJ, of which
84,390,618 GJ (66.5%) was direct consumption of energy and 42,501,257 GJ
(33.5%) was indirect consumption.
Direct energy consumption: consumption from renewable
sources (such as ethanol and biodiesel) and non-renewable
sources (such as gasoline, coal, liquefied petroleum gas, diesel
oil, fuel oil and aviation fuel). It takes place in the operation of
thermoelectric power plants and emergency diesel groups, as
well as in the supply of the own fleet of vehicles.
Indirect energy consumption: consumption through
intermediary sources, such as the energy consumed in the form
of electricity.
The 2017-2021 PDNG goals of reducing fossil fuel consumption
and electricity consumption between 2016 and 2017 were
achieved, with decreases of 11.3% and 27.1%, respectively.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT 93
GHG Emissions
G4-EC2; G4-EN15; G4-EN16; G4-EN17; G4-EN18; G4-EN19; G4-EN20; G4-EN21
In 2017, Eletrobras companies recorded total emissions of 9,735,754 tCO2e,
considering scopes 1, 2 and 3.
GHG Emissions
(tCO2e)
2015
2016
2017
Scope 1
Scope 2
Scope 3
Total
8,413,795
6,954,216
5,803,061
1,839,372
2,109,075
1,885,581
2,991,807
2,112,499
2,047,112
-3.1
13,244,974
11,175,790
9,735,754
-12.9
Var.
2016x2017 (%)
-16.6
-10.6
Goniophotometer at Cepel - Eletrobras Cepel/Marcus Almeida
For more information, please see the full GHG Emissions Inventory table on
our website at: https://bit.ly/2r0ZUeW.
We reached a significant reduction in emissions, mainly due to the lower thermoelectric generation activity, and met the goal
of reducing GHG emissions between 2016 and 2017, established in the 2017-2021 PDNG, with a decrease of 12.9% in emissions
considering scope 1, 2 and 3.
The emission intensity, considering Scopes 1 and 2, calculated in relation to the net generation of energy (MWh) and also the net operating
revenue1 (NOR in R$) allows for a uniform comparison between all our generation, transmission and distribution companies , regardless of their
size and specificities.
In 2017, the emission intensities calculated in both metrics presented a drop of 18.4% (tCO2e/ROL) and 10.9% (tCO2e/MWh), respectively.
Emission intensity (scopes 1 and 2, without losses)
By Net Operating Revenue (tCO2/NOR)
By Net Generation (tCO2/MWh)
2016
0.217
0.046
2017
0.177
0.041
1 For calculations of the emission intensity, the value of the Net Operating Revenue disregards the indemnities referring to the Basic Network of the Existing System (RBSE).
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT Considering Scope 3 (metric used in intensity indicators presented in PDNG
2018-2022), intensity increased in comparison to revenue and decreased in
comparison to energy generated:
Total emission intensity (scopes 1, 2 and 3)
By Net Operating Revenue (tCO2/NOR)
By Net Generation (tCO2/MWh)
2016
0.348
0.074
2017
0.295
0.068
94
Regarding the goal of progressively reducing the use of fossil fuels
in on-road mobile sources, in 2017, we achieved a drop of 11.3%.
In relation to the goal of reducing greenhouse gas emissions, we
achieved a drop of 12.9% in 2017. The two results exceed the target
set for the five-year period, ending in 2021.
SOx and NOx emissions
G4-EN21
Reduction Targets: Our 2017-2021 Business and Management Master
Plan (PDNG) set targets for reducing energy and fuel consumption and
emission intensity:
In addition to GHG emissions, sulfur oxides (SOx), nitrogen oxides
(NOx) emissions and Particulate Matter (PM10) are also estimated in
the Company’s own TPPs. In 2017, these emissions totaled 16,403.7
tons, 9,058.1 tons, and 1,565 tons1, respectively.
Base year 2016
Targets
Own consumption
of electricity
Consumption of
fossil fuels
GHG Emission
intensity TCO2/NOR
(considering scopes 1, 2
and 3)
2018
2019
2020
2021
2022
Cumulative target
2018-2022
Methodologies and premises
-0.2% -0.2% -0.2% -0.2% -0.2%
-1%
-0.2% -0.2% -0.2% -0.2% -0.2%
-1%
6%
6%
Increase projection due to reduction of
expected Net Operating Revenue
Subsidiaries account for 100% of the GHG emissions from the
units over which they have operational control and do not account
emissions from the operations in which they only hold corporate
interest (SPEs).
The information needed to prepare the inventory is provided by
the companies’ representatives in the Working Group on Climate
Change Strategy (WG 3) of the Eletrobras Companies’ Environment
Committee (SCMA).
To calculate emissions related to electricity consumption,
transmission and distribution losses, the Company uses the SIN
emission factors, which are calculated monthly and published by
the Brazilian Ministry of Science, Technology and Innovation (MCTI).
1The particulate matter measurements are carried out continuously by the monitoring
system installed directly at Eletrobras CGTEE smokestacks to determine the concentration
of particulate matter in the atmospheric emissions from the coal combustion process in
Generating Units.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT
CO2 emissions from biofuel consumption (biodiesel, ethanol
added to gasoline and alcohol fuel) are reported separately from
the calculations in this inventory, as they are reabsorbed through
photosynthesis in sugarcane and soybean crops, among other
plants used in the production of these biofuels.
Thermoelectric power generation emissions from Independent
Power Producers (IPP), whose power is acquired by Eletrobras
concessionaires and resold to the end consumers, are quantified
under scope 3 and therefore recorded separately from Eletrobras
companies’ own thermoelectric power plants, recorded under
scope 1.
The total energy content of the fuels consumed is calculated
based on the conversion factors provided by the National Energy
Balance (BEN).
GHG emissions from hydroelectric reservoirs that belong to
Eletrobras companies are not considered because there is
currently no international scientific consensus methodology
to estimate these emissions and calculate emissions (or net
emissions) from water bodies.
In order to continuously monitor coal-fired power plants
emissions, the Company uses an extractive CEMS method based
on NDIR absorption for SOx and NOx. On the other hand, for the
isokinetic particle sampling, the Company uses the following
methods: for SOx, Cetesb L9. 228; and for NOx, Cetesb L9. 229.
Total particulate matter emission considers emissions from the
Candiota Thermoelectric Complex, of Eletrobras CGTEE, which
uses coal to generate electricity.
95
Accountability
Eletrobras’ GHG Emissions Inventory is published annually and follows
the IPCC (2006) methodology and the Greenhouse Gas Protocol (GHG)
guidelines (WRI, 2004), and considers the holding company and all
subsidiaries.
Regarding emissions from thermoelectric power plants, printed hard-copy
monthly reports, with validated monitoring data, fault identifications
and conclusions, are sent to Ibama, authenticated with the seal of the
responsible area. Isokinetic particle samplings are performed monthly in
every chimney, subject to the operational availability of each generating
unit, in order to validate the continuous monitoring performed.
Best management practices
Ensuring the proper management of GHG emissions, prioritizing renewable
energy projects and promoting studies are some of our commitments,
especially when we know that important climate changes can impact the
availability of water in the country and, consequently, the generation of
energy by hydroelectric power plants, requiring a more intensive use of
thermoelectric power plants, especially those powered by fossil fuels.
The Company has two committees dedicated to energy efficiency and
climate strategy that have been working on monitoring, preparing studies
and proposing actions on the topic:
Eletrobras’ Integrated Energy Efficiency Committee (Cieese): composed
of representatives of Eletrobras companies, with a focus
on promoting business energy efficiency through the development
of technological solutions for all subsidiaries, technical cooperation
and excellence.
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT Working Group on Climate Change Strategy (WG 3): linked to
Eletrobras Companies’ Environment Committee (SCMA) and composed
of representatives of all Eletrobras companies, the WG 3 monitors
GHG emissions reduction targets and relies on task forces that are
developing adaptation studies on climate change and quantifying CO2
emissions and reabsorption due to land use activities.
Eletrobras companies’ environmental policy presents eight
commitments to reduce emissions and energy consumption from non-
renewable sources, which have been publicly endorsed through the
declaration of commitment on climate change, since 2012, in order to
give a differentiated and preferential treatment to this issue.
96
Since 2013, we have adopted internal carbon pricing in our
emissions-intensive operations to assess the financial impact
of a possible CO2 emissions taxation. This initiative has ranked
us as a benchmark in the Carbon Disclosure Project (CDP) in
the Utilities category.
This scenario also brings opportunities for the creation of new
technologies and business models towards a low-carbon economy. Our
innovation, research and development projects seek to reverse climate
change risks into new business and social value creation opportunities.
Learn more in the R&D and Innovation chapter, on page 26.
Commitments and initiatives
We are committed to increasingly mitigate our negative impact and
contribute to the transition to a new development model based on a
low-carbon economy.
The main pillar of our climate strategy is to prioritize energy
generation from low emission sources, which represent more than
90% of our installed capacity.
In 2017, the Company adhered to the “Business Positioning
on Carbon Pricing Mechanisms”, launched in 2016 by the
Business Climate Initiative, and signed the “private sector
support letter to pricing”, prepared by the Business Climate
Initiative with support from Carbon Pricing Leadership
Coalition (CPLC), an initiative of the World Bank.
“It is about practicing a more economic production with
rational use of all resources. Companies have to do their
homework, first of all, using the energy in the best way
possible. In addition, efficiency in energy generation and
consumption is an important bridge to communicating
with society.”
Marina Grossi, President of the Brazilian Business Council for
Sustainable Development (CEBDS) in the interview that based the
materiality matrix that guides this report (learn more on page 3).
CONTENT
ANNUAL REPORT • 2017CHAPTER 6 • RESPONSIBLE ENVIRONMENTAL MANAGEMENT 97
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Management
G4-49; G4-24; G4-25
We maintain a continuous dialogue with our
stakeholders, people that somehow impact or are
impacted by our activities.
The process of identifying and selecting these
stakeholders is in line with our business strategy and
Eletrobras companies’ Code of Ethics and Conduct. Our
dialogue, engagement and relationship are guided by
Eletrobras companies’ Stakeholder Engagement and
Communication Policy.
Eletrobras’ stakeholders
98
In addition to the extensive and continuous communications with our
stakeholders, we also survey them to identify the most material aspects related
to our companies, using mechanisms such as a climate survey, ombudsman
channels, the institutional website, a direct survey with suppliers and investors,
as well as social media channels such as Twitter, Facebook and Linkedin. The
results are considered in the strategic planning, so that the business conduct
meets the expectations of the stakeholders. Learn more on page 3.
The holding company and all other Eletrobras companies have several channels
open for contact with stakeholders.
In order to improve our communication with stakeholders further, we
unified Eletrobras companies’ Whistleblower Channel (learn more on
page 48) and launched the IR Ombudsman in 2017. The new Eletrobras
Portal was launched in the same year, with improvements in user
experience and navigation, responsive layout and accessibility for the
visually and hearing impaired.
The Ombudsman aims to strengthen corporate governance and improve internal
processes by offering an exclusive channel for consultations, suggestions,
complaints, criticisms or compliments regarding the capital market. The channel
is responsive, is available in Portuguese, English or Spanish, and allows the
monitoring of SMS requests.
To learn more, please visit: https://bit.ly/2wlLb4u.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS In 2017, for the second consecutive
year, we were elected the most
prestigious company in the
energy sector, winning the MarCo
award, by the Época Negócios
magazine, in partnership with the
Troiano Branding consultancy
firm. The top three companies
awarded in the sector are part of
the Eletrobras group: the holding
company, Itaipu Binacional and
Eletrobras Furnas, second and
third place respectively.
The chapters below present our practices
for building long-term relationships that
generate value for our main stakeholders.
#EletrobrasEsclarece
Considering the scenario of changes
and evaluation of the democratization
of the Company’s capital, Eletrobras
launched the #EletrobrasEsclarece portal
in 2017, which provides data and official
information, in a direct, accessible and
friendly approach, through posts and
videos, to keep society informed on issues
involving Eletrobras companies. The portal
is available at: https://bit.ly/2FMXlCO.
99
Employee development
We understand that our employees are essential for the sustainability of the business and for the
achievement of our strategy goals, targets and results. Therefore, our management is dedicated to
continuously promote the improvement of workplace conditions, health and safety, quality of life
and development of these professionals.
In this regard, Eletrobras companies’ People Management Policy establishes the guidelines
on providing the appropriate conditions for the development, appreciation and retention of
talents. The holding company is responsible for aligning these guidelines and seeking the best
market practices.
Eletrobras companies’ People Management Policy includes guidelines on acting in
an integrated manner and monitoring people management, ensuring equal rights,
opportunities and obligations, while respecting the specific characteristics of each
region, increasing the synergies between employees and the Eletrobras companies.
Employee profile
G4-9; G4-10; G4-HR3; G4-LA12
In line with our 2017-2021 PDNG, in 2017, we were aimed at re-adjusting the number of employees
in accordance with our current assignments, generating increased efficiency in the processes,
greater balance between the teams and a sustainable profile for the development of the business
and employees in the coming years.
To this end, we have worked on the definition of qualitative and quantitative improvement actions
of Eletrobras companies’ personnel, according to position held, level of complexity, training,
area of activity, macro process, organizational process and unit. It also considers the ongoing
re-adjustment measures, such as the implementation of the Shared Services Center and the
standardization of the integrated business management system (ERP), which will be concluded
in 2018, as well as the Extraordinary Retirement Plan (PAE) of Eletrobras companies and the
Extraordinary Voluntary Resignation Plan (PDV) of CGTEE.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS
100
The correct re-adjustment of our personnel is essential
to the sustainability and achievement of the Company’s
strategic planning. In 2017, initiatives in this regard
generated savings of approximately R$85 million. In 2018, we
expect these savings to reach R$855 million.
In 2017, we had the goal of implementing Eletrobras companies’
Mobility Plan. Due to the significant changes in the personnel
structure, we opted to implement a one-off mobility initiative rather
than a definitive plan, which will depend on the future qualitative and
quantitative survey on employees.
The PAE was implemented simultaneously in the holding company and
in Eletrobras CGTEE, Cepel, Chesf, Eletronuclear, Eletronorte, Eletropar,
Eletrosul and Furnas, subject to conditions previously approved by
the Secretariat of Coordination and Governance of State-Owned
Companies. With the reduction of the operation of the Candiota plant,
we also launched the Extraordinary Voluntary Resignation Plan (PDVE),
aimed at the employees of the subsidiary CGTEE. A total of 2,055
employees joined the Retirement and the Voluntary Resignation Plans.
Diversity profile of employees
As a publicly-held government-controlled company, our employees
are hired through public service entrance exams, pursuant to the 1988
Federal Constitution. Therefore, the diversity profile of our employees
is random. However, we are in line with legislation that encourages the
hiring of minorities, reserving 20% of the positions offered for black
candidates and people with disabilities.
Employees with Disabilities
Most of the Eletrobras companies have initiatives to
support employees who are in process of preparing for
retirement, such as the Retirement Preparation Program
(PPA) and the Reflection on Retirement Program (PRA).
These programs are aimed at supporting the reflection and
planning process of retirement and the life changes that
this new phase might bring. The PPA and the PRA address
financial aspects, family relationships and private pension,
among others, as well as contemplating the transfer of
knowledge to the employees who will succeed the retired
professionals.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS In line with our commitments to diversity (learn more on
page 34), we seek to promote an organizational culture of
equal opportunities for all, regardless of gender, skin color,
ethnicity, age, sexual orientation, social background, physical
or mental ability, as set forth in our Code of Ethics and Social
Responsibility Policy.
Reinforcing our commitment, the 18-22 PDNG
target is to maintain at least the same percentage
of women in management positions as the
percentage of women in the Company (headcount).
From a consolidated point of view, in 2016, women
represented 19% of Eletrobras companies’ personnel,
and women in leadership positions accounted for
21% of the total. However, the target also provides
that these percentages are balanced in each of the
companies.
We have implemented actions to promote diversity among all
our stakeholders through Eletrobras Companies’ Gender and
Race Committees, and since 2004, we have been participating
in the Gender, Race and Diversity Committee of the Ministry
of Mines and Energy and Related Entities (COGEMMEV).
In 2017, we joined the Corporate Citizen Program,
an initiative of the federal government that seeks
to eliminate discrimination and inequality in the
workplace, and extended the paternity leave from 5
to 20 days.
Considering these premises, at the end of 2017, our personnel
was composed of 22,921 employees:
101
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS In 2017, a total of 2,055 employees left the Company, due to the
retirement and voluntary resignation plans. Excluding these plans,
turnover rate was 1.33 in the year.
Health and safety at work
G4-LA7, G4-EU16
102
Eletrobras’ employee turnover rate
excluding retirement and resignation
plans
2015
2016
2017
Total excluding Itaipu
Itaipu
1.55
3.50
3.04
7.40
1.33
3.30
Communication and engagement
Eletrobras TV, an internal communication channel, produced 48 videos
in 2017 and reached a 36% increase in its audience. A series of four
interviews with the Company’s CEO were the most watched videos in
the year.
We also produced 11 videos for the promotion of specific actions
via the intranet, among which the video with the CEO’s message
celebrating Eletrobras’ 55th anniversary was the most watched.
In the intranet, the wall available to all the employees maintained its
interactivity level, with 713 interactions, highlighting the Company’s
55th anniversary campaign.
In December, the 2017 Eletrobras Annual Meeting was held, in which
the CEO and executive officers answered questions from employees.
The safety culture is a consolidated value among Eletrobras
companies and it is integrated to all our activities. Providing
a safe working environment with better quality of life for our
employees is a permanent goal, translated by our corporate
policies and several actions developed.
In order to promote occupational health and safety, we focus on
anticipating, identifying, evaluating and controlling hazards in the
workplace and promoting employee health, in accordance with current
legislation and technical, legal and ethical recommendations made by
government bodies and scientific entities.
The developed actions are in line with the guidelines of the People
Management Policy, which determines the continuous maintenance of
good working conditions and employee well-being, as per Eletrobras
companies’ Sustainability Policy.
Our companies also rely on specific contingency plans and all
employees working in risk areas wear individual and collective
protection equipment. These actions comply with the rules and
regulations of the Ministry of Labor and Employment (MTE), the Fire
Department, Civil Defense and environmental entities.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Robust and trained
management structure
Close dialogue and
monitoring
• Specialized Occupational Health and
Safety Engineering Service (SESMT) in the
companies’ facilities and/or
strategic situations
• Occupational accident and disease
prevention programs
• Annual medical examinations
•
Internal Accident Prevention Committees
(Cipa) to prevent occupational accidents
and diseases
• Monitoring of employees that carry out
external activities and construction
work, projects and or service inspection
• Ergonomics committee
• Environmental Risks Prevention Program
(PPRA) to neutralize the potential risk of
accidents, disease and/or unfavorable
workplace conditions
• Compliance with environmental risks and
hazard standards
•
Internal Accident Prevention Week
(Sipat) at least once a year
• Rigorous and specific monitoring of risks
related to nuclear energy at Eletrobras
Eletronuclear workplace, including
safety and emergency plans
Accident prevention meeting - Eletrobras holding/Jorge Coelho
103
In 2017, we maintained compliance with the
Environmental Risk and Hazard Standards, as well
as the monitoring of employees performing external
activities and physical inspections of construction
works, projects and/or services.
In addition, we continued the work of the Ergonomics
Committee, the maintenance of the Unified
Occupational Safety Portal and the extension of the
Occupational Safety and Ergonomics programs in
the Brasília Office.
Good practices in Eletrobras companies
In line with our guidelines, in 2017, Chesf developed
new prevention actions, such as the Project to
Reduce Dismissals due to Human Error (DEH),
for which the main objective is to reduce human
error infractions in the Electroenergetic Operating
System, and the Previna-se program, which seeks
to strengthen the safety culture and improve the
working conditions of employees.
In order to ensure a healthy and safe environment
for its employees, Eletrosul has maintained, since
2008, the Eletrosul Plan for Occupational Health and
Safety and Social Assistance (People), which includes
several programs related to health and safety at the
workplace, such as the Medical Occupational Health
Control (PCMSO) and the Quality of Life Program.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Eletronorte has improved Health and Safety management with the
help of technology. In the reporting period, the company implemented
an SAP EH&S (Environment, Health and Safety) system which
promoted the integration of Occupational Health and Safety data and,
therefore, increased efficiency in the management of occupational
exams and in monitoring the health of each employee.
Furnas offered training in occupational health and safety to its
employees and contractors, focusing on risk prevention, and it
annually implements a program that addresses issues such as first aid,
accident prevention and risks in the workplace.
At Eletronuclear, safety is believed to be an ongoing process that
involves not only components and structures, but also people and
organizations. Nuclear plants rely on passive safety features, which
automatically come into action to prevent accidents, as well as
barriers that protect the nuclear reactor from external factors such as
earthquakes, tsunamis, floods and explosions, and high pressure inside
the plant.
Risk activities
G4-LA7
Among the several activities performed by Eletrobras companies, we
identified risks of occupational diseases regarding the noise level in
the plants, the exposure to flammable materials and transmission and
distribution lines field activities.
Our goal is to reduce the number of accidents per million
man-hours of risk exposure in Eletrobras companies from
2.23 in 2017 to 1.38 in 2018.
104
Quality of life
In order to promote more health and quality of life for our employees,
in 2017, we maintained actions such as the Eletrobras Healthy Program,
which encourages healthy eating, stimulates sports, cultural and leisure
activities, promotes vaccination campaigns and raises awareness of
physical and mental illness.
In the reporting period, Chesf maintained the “Café e Prosa” initiative,
which demystifies mental health disorders through conversation and
support, in order to promote more quality of life. The company also
continued to hold activities to promote the health and well-being of
employees, such as sports tournaments, running groups and walks in
the courtyard of the building in Pituaçu (BA) – in an initiative called
“Move yourself”.
Eletrosul was also recognized with an honorable mention in the National
Congress of Social Health Care (CONASS) because of the maternity
support group developed by the company, which provides more support
to mothers who return to their jobs after the maternity leave.
Career and people development
G4-LA10; G4-EU14
Our employees are agents and beneficiaries of organizational
strengthening, contributing to competitiveness, profitability
and business sustainability. Therefore, our people
management must be aimed at solutions that provide
adequate conditions for the development, appreciation and
retention of talent.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Corporate education
G4-LA9
Our corporate education model is based
on the integrated and cooperative
performance of companies, aligned with
the Company’s strategic objectives in terms
of integration, competitiveness, profitability
and sustainability and the challenges
arising from the Brazilian electric power
sector’s regulatory, technological and
structural environment.
In order to develop employees’ professional
skills to boost the strategic reach of the
Eletrobras companies, our corporate
education is managed through two pillars:
the Eletrobras System Corporate University
(Unise) and the associated Corporate
Education Units, corresponding to each of
the companies.
Unise develops general, managerial and
specific skills that are critical to the viability
of the strategy, specific training in business,
dissemination of the culture and the values of
the group.
In order to enable activities in all Eletrobras
companies, in 2017, Unise focused its
activities in the following:
105
• Congresses and seminars by Schools/Pillars and
Macro processes;
• AUpdates on complementary pension plans;
• Leadership – Advanced Management Program;
• Improvement Program for Eletrobras Directors
and Officers;
• ProERP Training Program.
Corporate education units, also promote the
management of general and specific skills
related to the business of each company and
the continuous training of employees, through
lectures and capacity building programs.
In total, in 2017, Unise and the
corporate education units reached
777.5 thousand hours of training
offered to 51,679 participations, with
an investment of R$23.7 million, which
represents an average of R$1.2 thousand
per participant.
2016
2017
Hours of training
offered
1,135.8
thousand
777.5 thousand
Investment
Number of
participants
R$32.9
million
68,827
R$23.7 million
51,679
CONTENT
Employees
training at the
holding company -
Eletrobras holding /
Jorge Coelho
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Worker performs maintenance in the line - Eletrobras Dist. Alagoas / Lula Castelo Branco
106
Average hours of training offered in 2017 by
gender and position
In 2017, the Vivendo e Aprendendo Program,
developed by Chesf, was placed 10th in the ranking
of “15th Benchmarking Brasil” event, which rewards
the best social and environmental initiatives in Brazil.
The Program is aimed at raising the employees’
level of education by mobilizing people around the
possibility of learning, continuous improvement and
personal growth.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Career development
G4-LA11 ; G4-LA13
Since 2010, the Eletrobras companies’
Career and Compensation Plan (PCR)
brings together the guidelines and
policies on positions, careers,
compensation and performance. Based
on skills and focused on results, the Plan
aligns people management policies and
practices with strategic business
drivers, aiming at enhancing the
organizational performance.
The Career and Compensation Plan
aims to ensure fairness and equal
treatment regardless of gender,
race, color, religion, disability,
marital status, sexual orientation,
family situation, age or any
other condition.
An integral part of the PCR, the
Performance Management System (SGD)
defines the planning, skill monitoring
and result evaluation processes, based
on business and team goals, aligned
with the Company’s and Eletrobras
companies’ strategies.
The SGD evaluation process is an opportunity to directly contribute to improve business results,
promote employees’ development and career growth and, consequently, organizational growth.
The evaluation results also integrate a series of people management actions (compensation,
career, internal selection and development).
107
Ratio between
salary and
compensation
for men and
women
Acre
Alagoas
Amazonas
Amazonas GT
CEPEL
CGTEE
Chesf
Eletronorte
Eletronuclear
Eletropar
Eletrosul
Furnas
Holding
Itaipu
Piauí
Rondônia
Roraima
Management level
Higher education level
Primary and secondary level
Salary
Compensation
Salary
Compensation
Salary
Compensation
0.81
0.76
0.94
1.01
0.81
0.82
0.94
0.84
0.75
1.15
1.03
1.08
0.91
0.95
0.89
0.83
1.22
0.66
0.78
0.94
0.96
0.74
0.74
0.84
0.82
0.81
1.09
0.94
1.01
0.91
0.97
0.99
0.91
1.15
0.83
0.85
0.68
1.04
0.93
0.91
0.87
0.86
0.78
1.15
0.87
0.90
0.93
0.87
0.97
0.87
0.92
0.81
0.79
0.68
0.95
0.86
0.70
0.78
0.75
0.64
1.09
0.75
0.80
0.91
0.89
0.99
0.76
0.96
0.96
1.03
0.83
0.98
1.18
0.97
1.11
0.99
0.95
1.08
0.83
0.83
0.91
1.01
0.81
1.04
0.87
0.84
Não há
Não há
1.04
1.01
1.09
0.98
1.27
0.93
1.53
0.85
0.68
1.18
0.96
1.23
0.93
1.46
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS 108
In line with the 2018-22 PDNG, which incorporates the
appreciation of people into the strategy, in 2017, we worked on
the beginning of a succession plan, the “De Olho no Futuro” pilot
project. The project initially evaluated 300 employees of the
holding company in order to identify potential leaders, verify
if current managers are suitable in their functions, establish
succession maps and support the improvement of
the Performance Management System and management
succession procedures.
The PPLR is a variable compensation instrument linked to our strategy, and
uses part of the indicators in the Business Performance Target Agreement
(CMDE) to calculate the variable compensation of employees.
As part of the employee appreciation and retention policy, in addition
to fixed and variable compensation, we offer a series of benefits and
advantages determined by law and/or under a Collective Bargaining
Agreement, and based on the assumptions of our human resources policy.
Among them, we highlight the following:
The pilot project of a succession plan and talent bank,
called “De Olho no Futuro”, has brought important
contributions to individual and corporate development
plans and will be expanded to Eletrobras companies.
Compensation and Benefits
Our compensation policy follows the same guidelines as
the Career and Compensation Plan (PCR) and the variable
compensation practice is still linked to the Profit Sharing Program
(PPLR) – as long as the corporate indicators support its payment.
• funeral allowance;
• extended maternity and paternity leave;
• medical care/health insurance and dental care;
• complementary pension plan and pension fund;
• daycare allowance;
• meal/food allowance;
• vacation bonus;
• psychological and pedagogical assistance for employees and/or
dependents with special needs;
• caregiver program to reimburse caregiver expenses for employees or their
dependents.
Tourists at the Itaipu hydroelectric plant – Itaipu Binational/Alexandre Marchetti
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Customer satisfaction
Clear and transparent communication
G4-EU24
The main business of Eletrobras companies that deal with a large
number of customers is distribution. These companies, which serve
more than four million customers, value transparency and accessibility
to information about their services, and adopt a standardized electricity
bill template, which details consumption, tariffs, taxes, quality
indicators, contact details, among other useful and important data.
The bill also features practical information and explanatory images on
the safe use of electricity and any additional information considered
important on issues such as risks associated to electricity, theft of
electricity, low-income social tariff, etc.
As a way to reach different stakeholders and ensure that safety
information reaches all customers, Eletrobras distributors also invest
in periodic publications with safety tips on the use of electricity; visit
educational institutions and participate in state and municipal events
promoting lectures with topics such as conscious consumption of
electricity, environment and power grid risk prevention.
In March, Eletrobras launched a campaign on its official
Facebook page seeking to engage our customers and society
about the rational use of electricity.
109
Satisfaction survey
Since 2014, Eletrobras has been conducting a unified biennial
survey on the level of customer satisfaction with focus on the
generation and transmission business.
The survey uses the Customer Window Quadrant model as a
method to measure the customer satisfaction of the generation
and transmission business, based on customer perception about
value attributes and level of importance.
The last survey, in 2016, had the participation of CGTEE, Chesf,
Eletronorte, Eletronuclear, Eletrosul and Furnas, and showed a
consolidated satisfaction rate of 85.31% and level of importance
of 93.05%.
In order to measure the satisfaction rate and, more importantly,
implement improvements in customer relationship management,
we will conduct Eletrobras companies’ 3rd Integrated Customer
Satisfaction Survey in April 2018. This new survey, as well as the
companies that participated in 2016, will also include Amazonas
GT and Centro de Pesquisas de Energia Elétrica (Cepel), which
will consult users of the Technological services and Product
Licensing units.
Every year, all six Eletrobras distribution companies evaluate
the satisfaction of their customers/consumers through surveys
conducted by ANEEL, based on the ANEEL Consumer Satisfaction
Index (IASC), and by ABRADEE, based on the Perceived Quality
Satisfaction Index (ISQP).
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Abradee Research - Overall Satisfaction
Index (ISG) in%
Aneel Consumer Satisfaction Index (%)
110
Citizenship and social inclusion
G4-EU24
Committed to citizenship and social inclusion, in 2017,
Eletrobras Distribuição Rondônia has been developing
a series of initiatives to promote human rights and the
inclusion of people with disabilities:
• Creation of stickers with useful telephone numbers such
as “136 – Dial Health”, “100 for Human Rights” and “180
for the Call Center for Women”, also available in Brazilian
Sign Language (LIBRAS), bringing the opportunity for
people to talk about gender and race violence.
• Publication of different communication materials to raise
awareness about human rights in LIBRAS.
• A series of videos with the theme “Social Responsibility.
Not to discrimination and yes to inclusion”.
• Promotion of a carnival song created with lyrics about
the Maria da Penha Law, also available in LIBRAS.
• Video posted on Facebook about the campaign “All
against homophobia”.
• Dissemination of accessible materials, in LIBRAS, on safe
and rational use of energy, such as the “The World of
Light Multimedia KIT” and the video “Conscious use of
electricity (safe use and without waste)”.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS
111
Aligned suppliers
G4-12; G4-EC9; G4-HR11
Outlook
In 2017, Eletrobras companies’ supply chain had 3,428 new suppliers
contracted, a cost of R$6.8 billion in the year. By the end of 2017, there
were 15,900 contracts in force.
% of suppliers contracted locally (in
the same region)
Northeast
North1
Southeast
South
20%
50%
69%
79%
1It does not include Eletrobras Rondonia, which until 2017 did not monitor this information.
Eletrobras companies’ main suppliers are from sectors such
as technology, information technology, telecommunications,
engineering, manufacturing, transportation, resale, equipment
for electrical power generation, consulting in different areas and
cleaning and security services. These various-sized contractors
– from micro companies to large multinationals – are spread
throughout Brazil and abroad.
Of the total number of contracts signed in the year, 670 were
related to significant investments – submitted to the approval of the
Board of Executive Officers, in which the asset resulting from these
contracts will be incorporated into the Company’s equity. Of this
total, 97.2% included clauses related to human rights.
Control room at Angra 2 –
Eletrobras Eletronuclear
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Management
Alignment of values and
principles
The Company is aware
that the quality of
its relationship with
suppliers generates
indirect impacts to
society. Therefore,
it believes in the
importance of sharing
good practices and
aligning values with
these stakeholders as
a way to improve its
value creation.
Eletrobras companies work
towards maintaining a
close relationship with their
suppliers, keeping track of
their activities, maintaining
a constant and transparent
dialogue and sharing their
ethical principles throughout
the relationship cycle.
112
Engagement and exchange of knowledge
In 2017, we launched the Supplier Conduct Code, which guides Eletrobras suppliers on
standards to be adopted for the supply of materials and the provision of services, clearly and
objectively defining its attributions and responsibilities, as well as indicating hiring procedures
in a clear and transparent way.
The code is an important supplier engagement tool, and promotes sustainability and integrity.
All suppliers interested in maintaining or establishing business with Eletrobras must observe
and comply with the criteria, requirements and rules of conduct set forth in the code. The
document is available at: https://bit.ly/2qkJIFf
We also held the “VII Meeting with Suppliers of Eletrobras Companies of Rio de Janeiro”, which
brought together Cepel, Eletropar, Eletronuclear and Furnas, aimed at disseminating good
practices, exchanging information and clarifying doubts about the contracting and supply
management processes with the Social Responsibility, Human Rights, Environment and
Corporate Integrity areas.
The event addressed the new Regulation on Bids and Contracts of Eletrobras Companies
and the interaction between supply management and Social Responsibility, Human Rights,
Environment and Corporate Integrity – topics associated with the Sustainable Development
Goals (SDGs), proposed by the United Nations.
Another important alignment action was held internally, in order to define concepts, values
and principles, as well as to disseminate the best supplier management practices among
Eletrobras companies: the I Supply Workshop of Eletrobras Companies, which brought
together the Supply, Compliance and Sustainability areas of all companies in the group.
In line with our Supply Logistics Policy, which guides our business based on internationally recognized
management practices, we require a series of social and environmental commitments from our suppliers, as
presented below.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Selection and monitoring
G4-HR12
To ensure compliance with these commitments since the contracting process, suppliers must be in line with the laws and principles required by
the Company:
Contracted suppliers are constantly monitored through management and supervision of the contracts throughout the duration of their
relationship with the Company and, if any event is recorded, an administrative proceeding may be filed leading to the suspension of their right to
participate in public bids with Eletrobras, and to the possibility of a formal complaint against the supplier to the Public Prosecutor’s Office.
Social and environmental commitments on supplier management
113
This management process
is assisted by Eletrobras’
Strategic Supply Logistics
Committee (Celse), which
analyzes and disseminates
good sustainable
procurement practices
through guidelines, such
as Eletrobras’ Sustainable
Bidding Practices Guide,
and annual meetings
with suppliers.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Critical suppliers
G4-HR5 ; G4-HR6; G4-HR12
At Eletrobras, critical suppliers are those
with contracts that have a direct impact
on the final quality of its services, the
environment, employees’ health and safety,
and human rights, as well as those with
access to confidential information, exclusive
suppliers, as well as those that represents
high risk to the Company’s integrity.
In 2017, we improved our processes
and policies to identify the supplier
criticality regarding integrity and
ensure the dissimination of the
culture of ethics, compliance, and
integrity throughout the chain.
1. The Board of Directors and the Board
of Executive Officers approved the
Regulation on Bids and Contracts, which
aligns Eletrobras companies’ contracting
guidelines to the provisions of Law
13,303/2016 (State-Owned Companies
Act) and provides for the assessment of
the supplier’s corporate integrity from the
contracting process until the execution of
the contract. From April 2018, all contracts
and acquisitions will be formalized based
on the new regulation.
The regulation brings a significant
preventive measure in relation to contracts
with outsourced service suppliers with an
allocated work force: these companies
can’t formalize more than two contracts
of this nature with Eletrobras in order
to protect employees’ social and labor
rights, avoiding, for example, problems in
receiving their compensation due to the
financial problems of the
contracted company.
2. Eletrobras companies’ Supply Logistics
Policy was also reviewed, with the inclusion
of the Sustainability, Ethics and Corporate
Integrity topic.
3. We have established a new due diligence
process:
• Critical providers completed a due
diligence form, which maps out
relationships with public agents, history of
allegations of fraud or corruption, and the
existence of an Integrity Program.
114
• We applied an analysis of results
methodology to identify and classify their
integrity risk as low, medium, high and
very high.
• For each of the four risk classifications,
monitoring actions will be applied.
4. In addition, the contractual obligations
determine that suppliers are responsible
for knowing and complying, as
appropriate, with the principles and
standards of the Supplier Conduct Code,
as well as the Anti-Corruption Program of
Eletrobras Companies, available at:
https://bit.ly/2qkypg5.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS
To stimulate the advances in
the promotion of sustainability
in the supply chain, our 2018-
2022 Business and Management
Plan establishes formal goals of
engagement and relationship
with these stakeholders:
• To reach 60% of critical
suppliers trained in anti-
corruption policies and
procedures in 2018, and
100% by 2022.
• To reach 40% of suppliers
willing to adopt practices of
appreciation of diversity in
2018, and 100% of suppliers
in 2022.
• To apply the due diligence
form in 60% of critical
suppliers by 2018, and 100%
by 2022
• These indicators will be
available on our website in
the second half of 2018.
115
Community engagement
G4-SO1; G4-SO2
Outlook
One of the objectives of our business performance is to ensure that the Eletrobras
system projects are drivers of sustainable development in surrounding areas,
building healthy and long-term relationships, minimizing negative impacts and
generating value to communities.
Compliance with this objective is fundamental in all aspects of our activities, since, from
the study stage through to operations, Eletrobras’ projects can cause more or less impact,
depending on the region where they will be implemented. Local communities can be negatively
impacted mainly by the need for displacement, by changes in the environment around the power
plants and by the interference in the dynamics of indigenous and traditional groups of people.
Commitments
In order to mitigate and offset these impacts, and based on the lessons learned from past
operations, we always seek to update and renew our commitments, already expressed in the
Environmental Master Plan and in the Process of Interaction of the Brazilian Electric Power
Sector with Society, published in the early 1990s.
In line with the UN Global Compact, the Company is a signatory, and aligned with its
Sustainability, Environmental, Social Responsibility and Communication and Engagement with
Stakeholders policies, Eletrobras is seeks to promote ethical and transparent dialogues with
the purpose of building engagement and qualified relationships with the communities in which
we operate, recognizing their culture, forms of social organization and the representatives
appointed by them.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS
From a Human Rights point of view, the UN’s Sustainable Development Goals (SDGs) were used
as reference for the elaboration of other corporate policies, such as Eletrobras companies’ Social
Responsibility, updated in 2016, and guide the prioritization of projects that may be supported
by the Company, always focused on overcoming inequality and promoting the sustainable
development of the local communities where Eletrobras operates.
Impact management
Displacement of populations and
changes in social dynamics
G4-EU20
116
Commitments in the relationship with the communities
Open and permanent dialogue
Awareness of the safe, efficient and responsible use of energy
Safety and protection of populations in emergencies
Respect for the values and interests of each community
Promotion of improved quality of life
Recognition and respect for the culture and form of social
organization of all impacted communities, including traditional
and indigenous communities
Since 2015, we have incorporated guidelines
on the displacement of the populations
affected by projects in the electric
power sector to the guidelines on the
relationship with society and environmental
communication of our Environmental Policy.
The rules establish, for example, that
Eletrobras companies should monitor the
evolution of social and economic conditions
of the relocating and the host communities,
based on quantitative and qualitative studies
at least during the period established by the
environmental licenses.
In addition to our internal guidelines,
we comply with legal commitments and
obligations during the environmental
licensing process, such as Federal Decree
7,342/10 and Interministerial Ordinance
340/12, which deal with the social and
economic assessment of the population
affected by dams.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Interaction with communities
Environmental Impact Studies (EIA):
responsible for the analysis of the social
aspects of the areas of influence of the
projects, as well as the evaluation of impacts.
The EIA relies on the participation of local
communities and their representatives,
through interviews and meetings. The results
of these studies and the planned programs
are presented at meetings with local
communities and their representatives and
also at public hearings, as determined by the
environmental agency.
defined. The responsibilities and financial
resources to carry out these actions are
determined during the elaboration of the
Basic Environmental Project, which is also
submitted to environmental agencies for
analysis. As for the holding company, which
is responsible for the environmental licensing
of projects such as hydroelectric power plants
and transmission lines, the engagement
actions take place during the Environmental
Impact and Feasibility Studies and are usually
based on a specific Social Communication
Plan for each project or set of projects (in the
same area of study).
Social and economic assessment: identifies
the vulnerable groups that can be impacted
by the projects and allows the Company
to develop, with their help, actions that
meet their needs. These actions should
be described in the environmental impact
assessments and also in the preventative
actions that the Company might
carry out or promote along with the
competent authorities.
Social Communication Plan: social
communication actions, including the set-up
of local offices, toll-free (0800) telephone
numbers, mapping of stakeholders, creation
and dissemination of communication
materials such as folders, videos and radio
programs, and meetings with the several
social groups, in order to hear their opinions,
disseminate information and stimulate
social interaction.
Social and environmental actions: abased
on the social and economic assessment, the
EIA and the requirements of environmental
legislation, social and environmental
actions to be developed in the region are
We also monitor the media and conduct
opinion polls to identify expectations of the
population and to resolve any social conflicts
that may arise.
117
At the meetings with the local communities,
the holding company makes its relationship
channels, such as Ombudsman and Contact
Us, available to the population. Eletrobras
also encourages the creation of local
committees – spaces where the community
and their appointed representatives can
participate.
For the first time, Eletrobras, in
partnership with the Bolivian state-
owned company ENDE, will develop
social communication actions
within the scope of the Madeira
River inventory studies. This is a
good practice, since the Social
Communication Plan is not provided
for in the Hydroelectric Inventory of
Hydrographic Basins Manual, that
guides such studies.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS TL worker – Itaipu Binational
118
Safety
G4-EU21
Contingency
In order to manage the existing risks in each business segment,
Eletrobras companies rely on Emergency Response Plans, which
establish responsibilities, measures and effective actions to be taken
during contingency situations. Each project has a specific, constantly
updated contingency plan that includes social and environmental
aspects related to natural disasters, spills, fire, information technology
issues, workers strikes and company image crisis, among others.
So that all employees can implement those plans in emergency
situations, some Eletrobras companies invest in training and education,
involving emergency brigades and employees who work in risk areas.
At Eletrobras Eletronuclear, employees undergo annual drills. At
Eletrobras Chesf, the hydroelectric power plants have basin flood
control manuals with instructions in case of flood events and the
measures that must be taken should they happen. The emergency plan
is established with the participation of different organizations such as
Civil Defense, Military Police and the Fire Brigade. Drills are performed
on a regular basis and certified by the competent authorities.
Eletrobras Furnas, Eletronorte e Eletrosul rely on the Emergency
Response Plans for Transmission Lines, which establish actions to be
taken in order to restore, in the shortest possible time, transmission
lines, transformers and other equipment that make up the transmission
networks, using own or third-party resources, allowing for the
maintenance of the electricity supply.
Safe use of the electricity grid
As a way of raising awareness to the dangers of energized equipment,
the companies carry out several communication actions, such as the use
of warning signs and posters. Learn more on page 118.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Traditional populations
G4-HR8
In line with its commitments and policies, Eletrobras seeks to promote
ethical and transparent dialogues with traditional populations, more
frequently with indigenous peoples at the communities where it
operates, acknowledging their culture, forms of social organization and
the representatives appointed by them.
The Eletrobras companies’ Environmental Committee addresses the
indigenous peoples’ rights issue through the Indigenous Communities
Commission, created in 2012, which prepared an article gathering the
good practices of Eletrobras companies with indigenous peoples.
Eletrobras companies’ Social Responsibility Policy emphasizes that in
the process of building engagement and qualified relationships with
stakeholders, companies should pay special attention to vulnerable
groups such as traditional and indigenous communities.
As a rule of conduct, Eletrobras companies comply with legal
requirements to repair damages caused to the indigenous communities
from the implementation of electric power generation and transmission
line projects, in addition to support cultural development projects at
those communities.
Legislation
Before applying for environmental licenses, Eletrobras companies must
comply with the Interministerial Ordinance 60/2015, which establishes
guidelines and criteria that environmental license applications
submitted to Ibama (Brazilian Institute of Environment and Renewable
Natural Resources) must follow, along with the participation of agencies
119
such as the National Indian Foundation (Funai) and the Palmares
Cultural Foundation. They must also comply with Article 231 of the
Federal Constitution, with regard to the rights of the indigenous peoples
involved in the licensing processes.
Projects that started operating before the National Environmental Policy
was created, are required to conduct Indigenous Component Studies
during their licensing renewal process, under the coordination of Funai,
as well as to adopt measures to mitigate potential impacts.
Cultural development
Kayapó support projects (PA)
Eletrobras continued the social responsibility projects carried out with
financial and technical support from Eletrobras and Norte Energia, in
partnership with Funai, with 32 Kayapó indigenous communities in the
Xingu region, in southern Pará. These Kayapó communities, considered
to be indirectly impacted by the Belo Monte power plant, are divided
between the East and West of the Xingu river, and the first cycle of
projects was completed with both sides in 2012. The second cycle of
projects began in 2013, and is in its final stage. The third cycle is already
being implemented with the Western Kayapó community.
The projects invest in:
• the institutional strengthening of the indigenous associations
implementing the projects, with equipment, maintenance resources
and the hiring of teams;
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS • support for territorial surveillance, with reports produced from
expedition and satellite monitoring data, to identify the presence of
trespassers and the illegal use of natural resources on indigenous
lands;
• the promotion of sustainable economic activities, with goods, inputs
and working capital to support the collection of Brazil nuts and other
socio-biodiversity products of the Kayapó communities;
• culture appreciation, especially the production of local handicrafts
and the training of indigenous filmmakers; and
• infrastructure support, with the construction of houses and other
improvements of collective use.
Our investments in these indigenous communities have
promoted the institutional strengthening of the entities
representing the Kayapó community, the promotion of
sustainable economic activities such as the 273% volume
increase in Brazil nuts collected by the Western Kayapó group,
and appreciation of the local culture, with a fourfold increase
in the amount of handicrafts produced and sold by the
Eastern Kayapó, and the production of learning material in the
Mebêngôkre language.
In June 2017, the project with the Western Kayapó community completed
three years and nine months and was extended to another five years,
with an estimated budget of R$11.25 million, helping 11 villages and
1,500 people.
In January, we also participated in a preparatory workshop for the
activities of the Kayapó Autonomy Support Plan in Ourilândia do Norte
(PA), which should help 4,500 people in 22 Kayapó indigenous villages in
the Xingu region for a year and a half.
120
Kaiapó art - Eletrobras holding/Jorge Coelho
Projects to support traditional indigenous populations also lead to
environmental preservation, since Kayapó lands, where 31% of the
Xingu river flows, have a 93% preservation rate, while the Xingu basin
has a total of only 50%.
The projects are built through a partnership between Eletrobras
technical team, indigenous communities and their leaders, consultants
specialized the indigenous cause (in the second cycle) and Funai,
including workshops with indigenous leaders in the region and visits to
villages for validation of contents. This methodology aims to ensure that
the projects are developed around the needs and demands that all the
groups involved understand as legitimate and pertinent, especially the
indigenous communities.
Eletrobras monitors the projects’ accountability, in order to supervise
the relationship with the Kayapó communities, as they are part of
the Company’s strategic stakeholders. Eletrobras regularly visits
associations and villages, and invites Kayapó representatives to the
events in which it participates.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS Projects to support traditional
indigenous populations also lead to
environmental preservation, since
Kayapó lands, through which 31%
of the Xingu river flows, have a 93%
preservation rate, while the Xingu
basin has a total of only 50%.
Waimiri Atroari Indigenous Program,
Parakanã Program and Support to the
Krikati Indigenous Community (AM)
Eletrobras Eletronorte has programs in
partnership with Funai in the Parakanã,
São Marcos and Krikati Indigenous Lands,
carrying out actions to develop indigenous
communities and offset social and
environmental impacts caused by its projects.
In the Waimiri Atroari indigenous land,
located in the area of influence of the Balbina
HPP in the state of Amazonas, in operation
since 1989, the Company carries out health,
education, protection and environmental
programs, as well as actions to support local
production within the community, focusing
on its sustainability. The Waimiri Atroari
indigenous land has 2,585,611.96 hectares,
with a population of 1,917 indigenous people,
living in 45 villages.
In 2017, the Waimiri Atroari, Parakanã and
Krikati programs received R$17.1 million
from Eletronorte, allocated to mitigation
and environmental compensation actions,
completing the corrective measures determined
by competent bodies.
objectives of improving the infrastructure of
the villages, strengthening their autonomy
and ethnic and cultural identity and
contributing to the appreciation of traditions.
121
The Waimiri Atroari Program is
a benchmark in the sector and
recognized worldwide for its actions. In
1987, in the beginning of the program,
this indigenous group underwent a
serious depopulation process and had
a total of 374 indigenous people. In
2017, with the support of the program
and an effective indigenous action, the
community exceeded 1,940 people.
In 2017, the company was in negotiation with
the Waimiri Atroari community to define the
conditions for the implementation of the
Tucuruí transmission line between Manaus (AM)
and Boa Vista (RO).
Support for the Kaingang community (PR)
Eletrobras Furnas has been supporting the
Kaingang community since 1992 through
donations, surveillance services and the
acquisition of land as compensation for the use
of transmission lines on its land.
Support for the Avá-Guarani community (PR)
Itaipu Binacional develops the Sustainability
of Indigenous Communities project, with the
Dissemination of the Guarani culture (SC)
Inclusion of the indigenous culture in the
activities of Eletrosul’s Environment Week,
with an exhibition of Guarani handicrafts by
indigenous artisans and talks mediated by the
nationally recognized Guarani leadership.
Support to the quilombola community of
Patioba
Eletrobras Chesf promotes the engagement
of the quilombola community of Patioba
regarding social and environmental issues
chosen by them and promotes community
organization workshops to support its
sustainable development.
Meeting in Kaiapó village - Eletrobras holding/Jorge Coelho
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS
In 2017, there were no incidents
of violations involving rights of
indigenous and traditional
peoples in the Eletrobras
companies’ ombudsmen.
Social and environmental
engagement and
development programs
We always seek to go beyond complying
with legislation, mitigating social and
environmental impact or offsetting
possible impacts in the regions where we
operate. We are committed to promoting
the engagement and development of local
communities, valuing the regions surrounding
our operations and contributing to the
improvement of social, economic, educational,
environmental and health conditions.
In 2017, we invested approximately
R$260.9 million1 in social,
environmental, cultural and sports
projects, land development, the
promotion of citizenship, children and
adolescent rights, job opportunities
and income generation, as well
as health and food safety in
surrounding communities.
We present below Eletrobras companies’ main
programs to promote development in 2017.
Volunteer Program
In 2017, Eletrobras companies further
developed their actions and volunteer
programs, supporting the exercise of citizenship
and encouraging their employees to be
transformation agents in the communities of
the areas impacted by the projects.
In 2017, the holding company’s Volunteer
Program promoted 41 actions, in partnership
with institutions that help socially vulnerable
groups, benefiting more than 1,502 people, as
well as six campaigns that engaged volunteers
122
and employees in initiatives focused on
the communities surrounding the
Company’s headquarters.
For more information about Eletrobras
companies’ volunteer programs, please visit
their websites:
Furnas: https://bit.ly/2HiicTi
Itaipu: https://bit.ly/2qspz05
Chesf: https://bit.ly/2Hu9Aqm
Eletrosul: https://bit.ly/2GTxn1J
Social and Environmental Action Plan
(PAS)
PAS is a shared environmental management
process created by Chesf, together with
the communities of the municipalities that
are part of the Paulo Afonso Hydroelectric
Complex, in 2008, and with the communities
surrounding the Xingó HPP, in 2016.
The aim is to develop an environmental
management process capable of minimizing
and/or offsetting the negative impacts and
optimizing the plant’s positive impacts.
Children in the environmental education program - Itaipu
Binational / Nilton Rolin
1. The difference from the R $ 149.9 million reported in the Management Report is due to the inclusion of the amount invested by
Itaipu here in the Sustainability Report but not included in the Management Report.
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS PAS promotes education as a channel of social transformation
by supporting projects in five courses of action: Social and
environmental Educommunication Programs; Environmental
Health and Education Programs; Natural Resource Conservation
and Degraded Areas Recovery Programs; Institutional
Strengthening and Sustainability Programs; Education, Art, Culture
and Environment Programs. In total, the program reached more
than 5,000 people in 2017, with an investment of R$7.3 million.
Community Gardens (Eletrosul)
The Community Gardens program offers an alternative income
to the communities surrounding the transmission lines and
encourages the proper use and preservation of the easement
strips, avoiding irregular occupations. The program is being
developed in the states of Paraná, Santa Catarina and Rio Grande
do Sul, and in 2017, was included in the FAO’s Good Practices
Platform for Sustainable Development, an agency of the United
Nations specialized in combating hunger and poverty. Eletrosul
implemented Community Entrepreneurship Centers (CECs) in eight
municipalities impacted by projects, seeking to stimulate the local
development of communities through entrepreneurship, income
generation and the empowerment of women and/or historically
discriminated people.
The Community Gardens Program is an example of how
the relationship with different stakeholders, observing
their needs and demands, can support the transformation
of risks into value generation opportunities.
123
Development and generation of income (Eletrobras Furnas)
In partnership with the Arba multi-incubator, focused on technical and
management training for innovative and sustainable business, since 2015,
Eletrobras Furnas has supported the development of the community
bakery in the João Carro Women Community Association, and wheat flour
production in the Agricultural Cooperative of Small Producers of Chapada
dos Guimarães (MT). The organizations were trained and prepared to produce
and sell the products to the City Hall, through federal government programs
for school meals, generating qualification, work and income for members
and associates and fostering local development based on processes which
included local residents. With this support, they started to produce about 700
loaves of bread a day to meet the demand in seven municipal schools in the
region. Considering the whole network, more than 300 producers benefited.
Sustainable rural development (Itaipu)
Since 2008, the program has been aimed at supporting farmers from
some 26,000 family farms in the Paraná 3 Basin, who experienced
the modernization of production in the last decades, which degraded
sustainability and generated potential for environmental deterioration and
public health risk with the use of pesticides and chemical fertilizers.
Through participatory methodologies, the program offers small producers
options for the development of the entire chain, seeking to create a
sustainable productive matrix based on five actions: crop diversification,
organic agriculture, technical assistance and rural extension network, family
farming and rural tourism.
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ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS
Among the main achievements of the project are: the number
of organic farmers in the region increased from 100 to 135, the
number of agro-ecological fairs increased from 4 to 22, three new
agro-industries were inaugurated, 98 farmers were benefited with
seedlings, demonstration units were implemented in pedagogical
gardens in 56 institutions, and technical assistance in rural
settlements increased from 130 to 400 families.
Medicinal Plants Program (Itaipu)
Through the program, Itaipu has been supporting the development of
the herbal medicine production chain in the western region of Paraná
for more than 14 years, promoting the training of thousands of public
health agents and people from the community in general, as well as
working in the distribution of seedlings and medicinal plants for use in
the Unified Health System (SUS).
Currently, the focus of the program is fostering production, research
and the use of medicinal plants aimed at the public health agents of
the Paraná Basin 3 involved in the herbal medicine productive chain.
The Medicinal Plants Program was first in the ranking of
“15th Benchmarking Brasil” event, which rewards the best
social and environmental initiatives in the country.
Community Production Centers (CCPs)
CCPs are projects that result from Eletrobras’ partnership with
small producers and provide conditions for the improvement of
local production through the efficient use of electricity. The CCPs
124
start a virtuous development cycle of the producers, giving them
access to other markets and increasing income from their activities,
allowing improvements in the social condition of their families and the
strengthening of social relations among the project participants.
For example, the CCP in the Cachoeira do Cambuí Community, in the
municipality of Muzambinho-MG, benefits a group of 12 small coffee
growers, enabling producers to dry, clean and select coffee beans to
produce a better quality of, and more valuable products, resulting in a
reduction of 50% in the costs of the coffee treatment process, increased
income, greater access to credit and independence in the execution of
certain activities, which had to be contracted previously.
To learn more about the CCPs, please visit: https://bit.ly/2IfM03w.
Group of seamstresses at CCP - Eletrobras holding/Jorge Coelho
CONTENT
ANNUAL REPORT • 2017CHAPTER 7 • RELATIONSHIPS 125
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX GRI Content Index
GRI Indicator
Page / Direct Answer
SDG
Global Compact
126
PROFILE
Strategy and analysis
G4-1
Statement from the most senior decision-maker of the
organization about the relevance of sustainability to the
organization
Page 8
G4-2
Description of key impacts, risks, and opportunities
Page 53
Organizational profile
G4-3
G4-4
G4-5
Name of the organization
Primary brands, products, and services
Location of the organization’s headquarters
G4-6
Number of countries where the organization operates
Page 12
Page 12
Headquartered in Brasília – Distrito Federal: SCN Q 4 BL B –
sala 203 - Asa Norte; and its main office is located in Rio de
Janeiro: Av. Presidente Vargas, nº 409 – Centro.
Hydropower plant in Guyana, transmission systems in
Guyana, French Guiana and Suriname, office & Wind farms
in Uruguay, binational hydroelectric (Itaipu) in Argentina
and binational hydroelectric in Bolivia, as well as main
operations
in Brazil.
G4-7
G4-8
G4-9
Nature of ownership and legal form
Markets served
Scale of the organization
Page 12
Page 12
Pages 12, 14, 77, 78 and 99
G4-10
Total number of employees
Page 99
G4-11
Percentage of total employees covered by collective
bargaining agreements
All employees of the Eletrobras companies are covered by
collective bargaining agreements. In addition to permanent
employees, the Collective Bargaining Agreement also
covers all own and amnesty / reinstated employees, who are
assigned to government agencies.
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX GRI Indicator
Page / Direct Answer
SDG
Global Compact
127
G4-12
G4-13
G4-14
G4-15
G4-16
Describe the organization’s supply chain
Significant changes during the reporting period regarding
the organization’s size, structure, ownership, or its supply
chain
Report whether and how the precautionary approach or
principle is addressed by the organization
List externally developed economic, environmental and
social charters, principles, or other initiatives to which the
organization subscribes or which it endorses
List memberships of associations (such as industry
associations) and national or international advocacy:
organizations in which the organization, holds a position on
the governance body, participates in projects or committees,
provides substantive funding beyond routine membership
dues
Page 111
Page 12
Page 53
Page 33
Page 33
Identified material aspects and boundaries
G4-17
List all entities included in the organization’s consolidated
financial statements
Cepel, Chesf, Furnas, CGTEE, Eletrosul, Eletronorte, Itaipu,
Distribuição Acre, Distribuição Alagoas, Distribuição Piauí,
Distribuição Rondônia, Distribuição Roraima, Distribuição
Amazonas, Amazonas GT and Eletropar.
G4-18
G4-19
G4-20
G4-21
G4-22
G4-23
Explain the process for defining the report content and the
Aspect Boundaries
Page 3
List all the material Aspects identified in the process for
defining report content
The material aspects, related to the material themes
presented on page 3, are presented throughout this GRI
index.
For each material Aspect, report the Aspect Boundary within
the organization
For each material Aspect, report the Aspect Boundary
outside the organization
Report the effect of any restatements of information
provided in previous reports, and the reasons for such
restatements
Page 4
Page 4
Page 85
Report significant changes from previous reporting periods
in the Scope and Aspect Boundaries
Page 3
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX GRI Indicator
Page / Direct Answer
SDG
Global Compact
Stakeholder engagement
128
List of stakeholder groups engaged by the organization
Pages 3 and 98
G4-24
G4-25
G4-26
G4-27
Report profile
G4-28
G4-29
G4-30
G4-31
G4-32
G4-33
Governance
G4-34
G4-35
G4-36
G4-37
Report the basis for identification and selection of
stakeholders with whom to engage
Report the organization’s approach to stakeholder
engagement, including frequency of engagement
Report key topics and concerns that have been raised
through stakeholder engagement, and how the organization
has responded to those key topics and concerns
Reporting period
Date of most recent previous report
Reporting cycle
Contact point for questions regarding the report or its
contents
Report the ‘in accordance’ option the organization has
chosen, GRI Content Index and External Assurance Report
Report the organization’s policy and current practice with
regard to seeking external assurance for the report
Report the governance structure of the organization,
including committees
Report the process for delegating authority for economic,
environmental and social topics from the Board of Directors
to senior executives and other employees
Report whether the organization has appointed an
executive-level position or positions with responsibility for
economic, environmental and social topics, and whether
post holders report directly to the Board of Directors.
Pages 3 and 98
Page 3
Page 3
Page 3
2016
Annual
sustentabilidade@eletrobras.com
Page 3
Page 3
Page 41
Page 41
Page 33
Report processes for consultation between stakeholders
and the Board of Directors on economic, environmental and
social topics
Page 48
G4-38
Report the composition of the Board of Directors
Page 41
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX
GRI Indicator
Page / Direct Answer
SDG
Global Compact
129
G4-39
G4-40
G4-41
G4-42
G4-43
G4-44
G4-45
G4-46
G4-47
G4-48
G4-49
G4-50
G4-51
G4-52
Report whether a Board of Directors member is also an
executive officer (and, if so, which one?)
Report the nomination and selection processes for the Board
of Directors and its committees
Report processes for the Board to ensure conflicts of interest
are avoided and managed. Report whether conflicts of
interest are disclosed to stakeholders
Report the Board’s and senior executives’ roles in the
development, approval, and updating of the organization’s
purpose, value or mission statements, strategies, policies,
and goals related to economic, environmental and social
impacts.
Page 41
Page 41
Page 47
Pages 18 and 41
Report the measures taken to develop and enhance the
Board’s collective knowledge of economic, environmental
and social topics
Page 44
Report the processes for evaluation of the Board of Directors’
performance and governance
Pages 18 and 44
Report the Board of Directors’ role in the identification
and management of economic, environmental and
social impacts, risks, and opportunities. Report whether
stakeholder consultation and materiality are taken to Board.
Report the Board of Directors’ role in reviewing the
effectiveness of the organization’s risk management
processes
Page 53
Page 53
Report the frequency of the Board’s review of impacts, risks,
and opportunities.
Page 53
Report the highest committee or position that formally
reviews and approves the organization’s sustainability report
and ensures that all material Aspects are covered
Pages 31 and 33
Report the process for communicating critical concerns to
the Board
Pages 48 and 98
Report the nature and total number of critical concerns that
were communicated to the Board and the mechanism(s) used
to address and resolve them.
Report the remuneration policies for the Board of Directors
and senior executives
Report the process for determining remuneration Board of
Directors and senior executives
Page 48
Page 45
Page 45
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX GRI Indicator
Page / Direct Answer
SDG
Global Compact
130
G4-53
G4-54
G4-55
Report how stakeholders’ views are sought and taken into
account regarding remuneration
Page 45
Report the ratio of the annual total compensation for the
organization’s highest-paid individual in each country
of significant operations to the median annual total
compensation for all employees (excluding the highest-paid
individual) in the same country
Report the ratio of percentage increase in annual total
compensation for the organization’s highest-paid individual
in each country of significant operations to the median
percentage increase in annual total compensation for all
employees (excluding the highest-paid individual) in the
same country
4,90. Permanent wage types, annual supplementary
bonus, functional bonus and other additional items were
considered.
0,09. Permanent wage types, annual supplementary
bonus, functional bonus and other additional items were
considered.
Ethics and integrity
G4-56
G4-57
Describe the organization’s values, principles, standards and
norms of behavior such as codes of conduct and codes of
ethics
Report the internal and external mechanisms for seeking
advice on ethical and lawful behavior, and matters related to
organizational integrity, such as helplines or advice lines
G4-58
Report the internal and external mechanisms for reporting
concerns about unethical or unlawful behavior, and matters
related to organizational integrity, such as escalation
through line management, whistleblowing mechanisms or
hotlines
ECONOMIC PERFORMANCE
Economic Performance
G4-EC1
Report the direct economic value
generated and distributed
Pages 18, 35 and 39
Page 48
Page 48
Page 79
G4-EC2
Financial implications and other risks and opportunities for
the organization’s activities due to climate change
Pages 53 and 93
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX
GRI Indicator
Page / Direct Answer
SDG
Global Compact
131
Procurement Practices
G4-EC9
Proportion of spending on local suppliers at significant
locations of operation
Page 111
ENVIRONMENTAL
Water
G4-EN8
Total water withdrawal by source
Page 83
G4-EN9
Report the total number of water sources significantly
affected by withdrawal by type
Eletrobras companies do not significantly affect water
sources by withdrawal.
Biodiversity
G4-EN11 Operational sites owned, leased, managed in, or adjacent to,
protected areas and areas of high biodiversity value outside
protected areas
G4-EN12 Description of significant impacts of activities, products, and
services on biodiversity in protected areas and areas of high
biodiversity value outside protected areas
G4-EN13 Habitats protected or restored
Page 86
Page 86
Page 86
Emissions
G4-EN15 Direct greenhouse gas (GHG) emissions
Page 93
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX
GRI Indicator
Page / Direct Answer
SDG
Global Compact
132
G4-EN16
Energy indirect greenhouse gas (GHG) emissions
Page 93
G4-EN17 Other indirect greenhouse gas (GHG) emissions
Page 93
G4-EN18 Greenhouse gas (GHG) emissions intensity
Page 93
G4-EN19
Reduction of greenhouse gas (GHG) emissions
Page 93
G4-EN20
Emissions of ozone-depleting substances (ODS)
Page 93
G4-EN21 NOX, SOX, and other significant air emissions
Pages 93 and 94
SOCIAL
Occupational Health and Safety
G4-LA5
Percentage of total workforce represented in formal joint
management–worker health and safety committees that
help monitor and advise on occupational health and safety
programs
100% of the employees of the Eletrobras companies are
represented by health and safety committees, except
Eletrobras Distribuição Alagoas.
G4-LA7 Workers with high incidence or high risk of diseases related
Pages 102 and 104
to their occupation
G4-LA8
Health and safety topics covered in formal agreements with
trade unions
All companies in the Eletrobras group, with the exception
of CGTEE and Eletropar, present health and safety topics in
100% of the agreements.
Training and Education
G4-LA9
Average hours of training per year per employee by gender,
and by employee category
Page 105
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX
GRI Indicator
Page / Direct Answer
SDG
Global Compact
133
G4-LA10
G4-LA11
Programs for skills management and lifelong learning that
support the continued employability of employees and assist
them in managing career endings
Percentage of employees receiving regular performance and
career development reviews, by gender and by employee
category
Page 104
Page 107
Diversity and Equal Opportunity
G4-LA12
Composition of governance bodies and breakdown of
employees per employee category according to gender, age
group, minority group membership, and other indicators of
diversity
Page 99
Equal Remuneration for Women and Men
G4-LA13
Ratio of basic salary and remuneration of women to men by
employee category, by significant locations of operation
Page 107
Investment
G4-HR1
Total number and percentage of significant investment
agreements and contracts that include human rights clauses
or that underwent human rights screening
In total, 651 significant investment contracts include human
rights clauses, representing 97.2% of the total.
Non-discrimination
G4-HR3
Total number of incidents of discrimination and corrective
actions taken
Page 99
Freedom of Association and Collective Bargaining
G4-HR4
Operations and suppliers identified in which the right to
exercise freedom of association and collective bargaining
may be violated or at significant risk, and measures taken to
support these rights
81 suppliers
Child Labor
G4-HR5
Operations and suppliers identified as having significant risk
for incidents of child labor, and measures taken to contribute
to the effective abolition of child labor
39 suppliers
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX
GRI Indicator
Page / Direct Answer
SDG
Global Compact
134
Forced or Compulsory Labor
G4-HR6
Operations and suppliers identified as having significant risk
for incidents of forced or compulsory labor, and measures
to contribute to the elimination of all forms of forced or
compulsory labor
39 suppliers
Indigenous Rights
G4-HR8
Total number of incidents of violations involving rights of
indigenous peoples and actions taken
Page 119
Supplier Human Rights Assessment
G4-HR11
Significant actual and potential negative human rights
impacts in the supply chain and actions taken
Page 111
Human Rights Grievance Mechanisms
G4-HR12 Number of grievances about human rights impacts
filed, addressed, and resolved through formal grievance
mechanisms
In the various channels of the companies, 21 grievances
were received, 31 were processed during the year, 16
were received and settled in 2017 and 3 were received
before 2017 and settled in the year. In the consolidated
denunciation channel of Eletrobras companies, 29
grievances were received and one settled in the year.
Local communities
G4-SO1
Percentage of operations with implemented local community
engagement, impact assessments, and development
programs
Page 115
G4-SO2
Operations with significant actual and potential negative
impacts on local communities
Page 115
Anti-corruption
G4-SO4
Communication and training on anti-corruption policies and
procedures
Pages 48 and 53
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX
GRI Indicator
Page / Direct Answer
SDG
Global Compact
135
G4-SO5
Confirmed incidents of corruption and actions taken
G4-SO6
Total monetary value of financial and in-kind political
contributions made directly and indirectly by the
organization by country.
Sector Supplement
Organizational Profile
Page 48
Indicator scope:
1- Considers only the scope of the independent internal
investigation conducted by the law firm Hogan Lovells,
excluding the cases of the ombudsman and the reporting
channel.
2 - Considers only acts that involve public agents,
disregarding practices of bribery, facilitating payments,
fraud, extortion, collusion and money laundering, not
monitored in the indicator.
In compliance with the legislation, Eletrobras companies
do not support or contribute to political parties or political
campaigns of candidates for elected positions. This
guideline is ratified in the Code of Ethics of Eletrobras
companies.
EU-1
EU-2
EU-3
Installed capacity, broken down by primary energy source
and by regulatory regime
Page 60
Net energy output broken down by primary energy source
and by regulatory regime
Page 63
Number of residential, industrial, institutional and
commercial customer accounts
Residential units: 3.7 million
Industrial units: 11.8 thousand
Commercial units: 300,6 thousand
Rural units: 239.8 thousand
Institutional Units (public power, public service and public
lighting): 53.3 thousand
Own consumption: 714
Total Customers: 4.26 million
EU-4
Length of above and underground transmission and
distribution lines by regulatory regime
Page 65
Availability and Reliability
EU-6
Management approach to ensure short and long-term
electricity availability and reliability
Page 67
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX GRI Indicator
Page / Direct Answer
SDG
Global Compact
136
Research and Development
EU-8
Research and development activity and expenditure aimed
at providing reliable electricity and promoting sustainable
development
Page 26
Availability and Reliability
EU-10
Planned capacity against projected electricity demand over
the long term, broken down by energy source and regulatory
regime
Page 60
System Efficiency
EU-11
Average generation efficiency of thermal plants by energy
source and by regulatory regime
Page 64
EU-12
Transmission and distribution losses as a percentage of total
energy
Pages 68 and 70
Employment
EU-14
EU-16
Programs and processes to ensure the availability of a skilled
workforce
Page 104
Policies and requirements regarding health and safety of
employees and employees of contractors and subcontractors
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX
GRI Indicator
Page / Direct Answer
SDG
Global Compact
Local Communities
EU-20
Approach to managing the impacts of displacement
Page 116
137
EU-22
Number of people physically or economically displaced and
compensation, broken down by type of project
There was no displacement and/or compensation in 2017.
Disaster/Emergency Planning and Response
EU-21
Contingency planning measures, disaster/emergency
management plan and training programs, and recovery/
restoration plans
Page 118
Provision of Information
EU-24
Access
Practices to address language, cultural, low literacy and
disability related barriers to access and safely use electricity
and customer support services
Pages 110 and 111
EU-28
Power outage frequency in the year (FEC)
Page 70
EU-29
Average power outage duration (DEC)
Page 70
EU-30
Average plant availability factor by energy source
Page 64
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX
Capital map
FINANCIAL CAPITAL
Financial results pg. 75
Capital markets pg. 79
HUMAN CAPITAL
Employee development pg. 99
Aligned suppliers pg. 11
INTELLECTUAL CAPITAL
Strategic planning pg. 18
R&D and Innovation pg. 26
Sustainability vision pg. 32
How we generate value pg. 35
Employee development pg. 99
138
MANUFACTURED CAPITAL
Eletrobras pg. 12
Performance and results pg. 59
Generation pg. 60
Transmission pg. 136
Distribution pg. 69
NATURAL CAPITAL
Responsible environmental management pg. 80
SOCIAL AND RELATIONSHIP CAPITAL
About the report pg. 3
Industry overview pg. 15
Corporate governance pg. 39
Ethics and Compliance pg. 47
Sector programs pg. 71
Relationships pg. 97
CAPITAL MAP
CONTENT
ANNUAL REPORT • 2017 Limited assurance report issued by
independent auditors
139
KPMG Financial Risk & Actuarial Services Ltda.
Rua Arquiteto Olavo Redig de Campos, 105, 6º andar - Torre A
04711-904 - São Paulo/SP - Brasil
Caixa Postal 79518 - CEP 04707-970 - São Paulo/SP - Brasil
Telefone +55 (11) 3940-1500, Fax +55 (11) 3940-1501
www.kpmg.com.br
Limited assurance report issued by
independent auditors
To the Board of Directors, Shareholders and Stakeholders
Centrais Elétricas Brasileiras S.A. – Eletrobras
Rio de Janeiro - RJ
Introduction
We have been engaged by Centrais Elétricas Brasileiras S.A. – Eletrobras
(“Eletrobras” or “Company”) to apply limited assurance procedures
on the sustainability information disclosed in Eletrobras’ 2017 Annual
Report, related to the year ended December 31st, 2017.
Responsibilities of Eletrobras’ Management
The Management of Eletrobras is responsible for adequately preparing
and presenting the sustainability information in the Eletrobras’
2017 Annual Report in accordance with the Global Reporting
Initiative (GRI) Sustainability Reporting Guidelines (GRI-G4), and the
“Electric Utilities Sector Supplement”, as well as the internal controls
determined necessary to ensure this information is free from material
misstatement, resulting from fraud or error.
Independent auditors’ responsibility
Our responsibility is to express a conclusion about the information
in the Eletrobras’ 2017 Annual Report based on a limited assurance
engagement conducted in accordance with Technical Communication
(TC) 07/2012, which was prepared based on NBC TO 3000 (Assurance
Engagements Other Than Audits and Reviews), both issued by
the Brazilian Federal Accounting Council - CFC and equivalent
to international standard ISAE 3000, issued by the International
Federation of Accountants and applicable to Non-Financial Historical
Information. These standards require compliance with ethical
requirements, including independence ones, and the engagement
is also conducted to provide limited assurance that the information
disclosed in the Eletrobras’ 2017 Annual Report, taken as a whole, is
free from material misstatement.
ASSURANCE REPORT
CONTENT
ANNUAL REPORT • 2017 A limited assurance engagement conducted in accordance with NBC
TO 3000 (ISAE 3000) consists mainly of questions and interviews
with the Management of Eletrobras and other professionals of the
Company involved in the preparation of the information disclosed in
the 2017 Annual Report and use of analytical procedures to obtain
evidence that enables us to reach a limited assurance conclusion
about the sustainability information taken as a whole. A limited
assurance engagement also requires additional procedures when the
independent auditor acknowledges issues, which may lead them to
believe that the information disclosed in the Eletrobras’ 2017 Annual
Report taken as a whole could present material misstatement.
The selected procedures were based on our understanding of the
issues related to the compilation, materiality and presentation of
the information disclosed in the Eletrobras’ 2017 Annual Report, on
other engagement circumstances and also on our considerations
regarding areas and processes associated with material sustainability
information disclosed where relevant misstatement could exist. The
procedures consisted of:
140
c. Analysis of preparation processes of the Eletrobras’ 2017 Annual
Report and its structure and content, based on the Principles
for Defining Report Content and Quality of the Global Reporting
Initiative - GRI (GRI-G4);
d. Evaluation of non-financial indicators selected:
• Understanding of the calculation methodology and procedures
for the compilation of indicators through interviews with
management responsible for data preparation;
• Application of analytical procedures regarding data and
interviews for qualitative information and their correlation with
indicators disclosed in the Eletrobras’ 2017 Annual Report;
• Analysis of evidence supporting the disclosed information;
• Visits to Eletrobras’ operations and offices for application of
these procedures, and items (b) and (c);
a. Engagement planning: considering the material aspects for
e. Analysis of whether the performance indicators omission and
Eletrobras’ activities, the relevance of the information disclosed,
the amount of quantitative and qualitative information and the
operational systems and internal controls that served as a basis
for preparation of the information in the Eletrobras’ 2017 Annual
Report. This analysis defined the indicators to be checked in
details;
b. Understanding and analysis of disclosed information related to
material aspects management;
justification are reasonable to be accepted associated to aspects
and topics defined as material in the materiality analysis of the
Company;
f. Comparison of financial indicators with the financial statements
and/or accounting records.
We believe that the information, evidence and results we have obtained
are sufficient and appropriate to provide a basis for our limited
assurance conclusion.
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX Scope and limitations
Conclusion
141
The procedures applied to a limited assurance engagement are
substantially less extensive than those applied to a reasonable
assurance engagement. Therefore, they do not assure that
we are aware of all the issues that would have been identified
in a reasonable assurance engagement, which aims to issue
an opinion. If we had conducted a reasonable assurance
engagement, we may have identified other issues and possible
misstatements within the information presented in the
Eletrobras’ 2017 Annual Report.
Nonfinancial data is subject to more inherent limitations
than financial data, due to the nature and diversity of the
methods used to determine, calculate or estimate these data.
Qualitative interpretation of the data’s materiality, relevance and
accuracy are subject to individual assumptions and judgments.
Additionally, we have not examined data reported for prior
periods, evaluated the adequacy of the company’s policies,
practices and sustainability performance, nor future projections
and targets.
Based on the procedures carried out, described earlier in this report,
we have not identified any relevant information that leads us to believe
that the information in Eletrobras’ 2017 Annual Report is not fairly
stated in all material aspects in accordance with the Global Reporting
Initiative Guidelines- GRI (GRI- G4), and the “Electric Utilities Sector
Supplement”, as well as its source records and files.
Sao Paulo, May 25th, 2018
KPMG Assessores Ltda.
CRC 2SP034262/O-4 F-SP
Eduardo V. Cipullo
Contador CRC 1SP135597/O-6
KPMG Financial Risk & Actuarial Services Ltda.
Ricardo Algis Zibas
Sócio-Diretor
CONTENT
ANNUAL REPORT • 2017GRI CONTENT INDEX Acknowledgments
Eletrobras – Centrais Elétricas Brasileiras S.A.
have several channels open for contact
with stakeholders.
Headquarter
Av. Presidente Vargas, 409 – 13º andar –
Centro - Rio de Janeiro – RJ – CEP 20071-003
Phone: (21) 2514-5151
Contact Us – Eletrobras Website >
Contact Us
Website – www.eletrobras.com
Facebook – www.facebook.com/Eletrobras
YouTube – www.youtube.com/user/
SistemaEletrobras
Twitter – @Eletrobras
LinkedIn – www.linkedin.com/company/
eletrobras
Ombudsman
Av. Presidente Vargas, 409 – 17° andar
Centro – Rio de Janeiro – RJ – CEP 20071-003
Phone: (21) 2514-4526
www.eletrobras.com/ouvidoria
ouvidoria@eletrobras.com
Whistleblower Channel
www.eletrobras.com/canaldenuncia/
Branches
Eletrobras offices abroad:
- Cone Sul (Montevideo – Uruguay)
Av. Luis Alberto de Herrera 1.248 Torre 2,
oficina 311, CP – 11.300 - Eina (Lima – Peru)
Calle Basadre 310 Oficina 601 B – San Isidro
Investor Relations (IR)
Phone: (21) 2514-6331 or (21) 2514-6333
Fax: (21) 2514-5964
Website – www.eletrobras.com.br/elb/ri
IR Contact – invest@eletrobras.com
Depositary Institution and Administrator of the
Stock Portfolio
Eletrobras
Banco Bradesco S.A.65
Share and Custody Department
Phone: (11) 3684-9441
Fax: (11) 3684-3811
For any enquires about the technical terms in this
publication, please access the Eletrobras Electric
Power Dictionary, available at: https://bit.ly/2FU3ooU
Cover Photos
1. HPP Itaipu – Itaipu Binational/Alexandre Marchetti
2. Canoists on the Itaipu Lake – Itaipu Binational/
Alexandre Marchetti
3. Bracuhy Indigenous people – Eletrobras
Eletronuclear
4. Worker on live line– Eletrobras Furnas/ José Lins
5. Canoists on the Itaipu Lake (detail) – Itaipu
Binational/Alexandre Marchetti
6. Fisherman in the Sobradinho reservoir – Eletrobras
Chesf/Severino Silva
7. Hands and water – Eletrobras holding/Jorge Coelho
Photos of chapter openings
1. Girl plays the violin - Eletrobras holding /
Jorge Coelho
Girl with foliage - Eletrobras holding/Jorge Coelho
2. Worker performs maintenance – Eletrobras
Distribuição Alagoas/Lula Castelo Branco
Geribatu wind farm – Eletrobras Eletrosul
3. Worker at Santo Antônio TL – Eletrobras Furnas/
José Lins
Technicians in Angra – Eletrobras Eletronuclear/
Ricardo Beliel
4. Waimiri-Atroari child – Eletrobras holding/
Jorge Coelho
Workers and soldering in the Simplício HPP–
Eletrobras Furnas/Daniela Monteiro
142
5. Worker in Angra 1 - Eletrobras Eletronuclear
Workers at Santo Antônio HPP - Eletrobras Furnas /
José Lins
6. Vegetable garden in CCP - Eletrobras holding/Jorge Coelho
Waterfall in Kaiapó territory - Eletrobras holding/Jorge Coelho
7. Group of quilombolas - Eletrobras holding / Jorge Coelho
Family benefited by the Luz para Todos program – Eletrobras
holding
8. Maintenance in distribution line - Eletrobras Dist. Alagoas /
Lula Castelo Branco
Workers assemble a turbine at Tucuruí - Eletrobras holding/
Jorge Coelho
General Coordination
Strategy, Business Management and Sustainability
GRI indicators collection, consulting and writing
Ricca Sustentabilidade
Management and Data Collection
IGS Relat System
Sustainability Indicators Center and Assurance Report
Executive Committee on Sustainability of Eletrobras Companies
Graphic project, translation, layout, and editing
Ricca Sustentabilidade
Editorial Center
Communication and Institutional Relations of Eletrobras and Ricca
Acknowledgments
The Annual Report is the result of the effort of the Eletrobras
companies team. We appreciate the participation and commitment
of all.
We would like to thank all Eletrobras companies’ professionals
who provided the necessary information for the elaboration of the
2017 Annual Report and all stakeholders that participated in our
research on the material topics and substantially contributed to
this work.
G4-31
More information about the Report, please email:
sustentabilidade@eletrobras.com
ACKNOWLEDGMENTS
CONTENT
Instituição Depositária e Administradora da Carteira
Trabalhadores na UHE Santo Antônio – Eletrobras
de Ações
Eletrobras
Banco Bradesco S.A.65
Departamento de Ações e Custódia
Tel.: (11) 3684-9441
Fax: (11) 3684-3811
6. Horta em CCP - Eletrobras holding/Jorge Coelho
Cachoeira no território Kaiapó - Eletrobras holding/Jorge
Furnas/José Lins
Coelho
7. Grupo de quilombolas - Eletrobras holding/Jorge Coelho
Família beneficiada pelo programa Luz para Todos –
Eletrobras holding
Caso tenha dúvidas sobre termos técnicos
8. Manutenção em linha de distribuição – Eletrobras Dist.
apresentados ao longo dessa publicação, acesse o
Dicionário da Energia Elétrica Eletrobras, disponível
em: https://bit.ly/2FU3ooU
Alagoas/Lula Castelo Branco
Trabalhadores montam turbina em Tucuruí - Eletrobras
holding/Jorge Coelho
Fotos da capa
1. UHE Itaipu – Itaipu Binacional/
Alexandre Marchetti
2. Canoistas no lago de Itaipu – Itaipu Binacional/
Alexandre Marchetti
3.
Índias Bracuhy – Eletrobras Eletronuclear
4. Trabalhadora na linha viva – Eletrobras Furnas/
Coordenação-Geral do Relatório
Superintendência de Estratégia, Gestão Empresarial e
Sustentabilidade
Consultoria GRI
Ricca Sustentabilidade
José Lins
Gestão de Indicadores e Coleta de Dados
5. Canoistas no canal de Itaipu (detalhe) – Itaipu
Sistema IGS Relat e Comissão Executiva de Sustentabilidade
Binacional/Alexandre Marchetti
6. Pescador no reservatório de Sobradinho –
Eletrobras Chesf/Severino Silva
das Empresas Eletrobras
Projeto gráfico, diagramação e infográficos
7. Mãos e água – Eletrobras holding/Jorge Coelho
Ricca Sustentabilidade
Fotos das aberturas
Redação e Edição
1. Menina toca violino – Eletrobras holding/
Superintendência de Comunicação e Relações Institucionais
da Eletrobras e Ricca Sustentabilidade
Asseguração do Relatório
Jorge Coelho
Jorge Coelho
Menina com folhagem – Eletrobras holding/
Distribuição Alagoas/Lula Castelo Branco
Parque Eólico Geribatu – Eletrobras Eletrosul
2. Trabalhadora faz manutenção – Eletrobras
KPMG Financial Risk & Actuarial Services Ltda.
3. Trabalhador em LT Santo Antônio – Eletrobras
forneceram as informações necessárias para a elaboração
Técnicos em Angra – Eletrobras Eletronuclear/
especialistas que participaram de nossa pesquisa sobre os
do Relatório Anual 2017 e a todas as partes interessadas e
temas relevantes e contribuíram substancialmente com
4. Criança Waimiri-Atroari – Eletrobras holding/
este trabalho.
Agradecemos aos profissionais das empresas Eletrobras que
Trabalhadores e solda na UHE Simplício –
Eletrobras Furnas/Daniela Monteiro
G4-31
Canal para comunicação sobre esta publicação:
5. Trabalhadora em Angra 1 – Eletrobras
sustentabilidade@eletrobras.com
Furnas/José Lins
Ricardo Beliel
Jorge Coelho
Eletronuclear
ANNUAL REPORT • 2017