Companhia Paranaense de Energia (COPEL) Annual Report 2015

Plain-text annual report

1 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex 3 ABOUT THE REPORT About the Report The Copel Sustainability Report is published annually and is intended to provide this report. G4-18 transparent accountability to all its audiences, as well as to present the main social, environmental, and economic impacts caused by its operations. This edition includes information about management and performance for the year 2015 - from January 1 to December 31 - in the areas of operation of Copel Holding, and its wholly-owned subsidiaries: Copel Geração e Transmissão S.A., Copel Distribuição S.A., Copel Telecomunicações S.A., Copel Renováveis S.A., and Copel Comercialização S.A., except when stated otherwise. G4-17, G4-28, G4-29, G4-30z The reporting methodology follows the G4 version of the Global Reporting Initiative (GRI), and the “core” option of adherence, and covers the set of indicators of the electric utilities sector disclosures. All indicators disclosed are listed in the Content Index, with indication of an independent external assurance by KPMG. G4-18, G4-32, G4-33 This edition contains an important change which is the application of the integrated reporting structure recommended by the International Integrated Reporting Council - IIRC, which seeks to improve communication of material aspects for sustainability in the Copel businesses to their stakeholders and to demonstrate the Company’s value generation capability. G4-18, G4-22, G4-23 To this end, an engagement process was conducted with the Executive Board, the business and corporate risk areas, seeking to establish the main impacts and risks inherent to the Copel business model. The results of this process are reflected in Section “Main Social and Environmental Impacts” and has guided the content of In order to improve the management processes and support decision- making, the main events that can impact the Company’s businesses were mapped, considering a senior management position, the risk factors presented in the 20F Form and the internal controls defined by the corporate integrity area in conjunction with the areas involved. As a result, the aspects covered in this report that were considered to be material for the success of the Company in the short-, medium-, and long-term were reviewed, adjusted and defined. G4-18 The report also follows the guidelines set forth by IBASE (Brazilian Social Audit Institute of Social and Economic Analysis), the Brazilian Accounting Standards (NBC T15), the regulation of Abrasca Award for Annual Report, Progress Communication in terms of commitments assumed with the Global Compact, and of the International Financial Accounting Standards (IFRS), considered in the information from the financial statements. G4-15 The report is composed of two parts. The first part provides an overview of our business model, the risks to which we are exposed, and main impacts we cause to the environment and to the audiences with which we interact through our operations. The second part demonstrates the context and performance of each of our capitals, providing details about relevant aspects of our business and our capacity to generate value. 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex ABOUT THE REPORT Relevant Aspects A review of the aspects deemed material and strategic consider the following: G4-18 Aspects determined in 2014 by stakeholders and senior management during the engagement process; G4-24 4 Revalidation in 2015 through a media survey and references of corporate sustainability - Corporate Sustainability Index (ISE - BM&FBOVESPA), the Dow Jones Sustainability Index (DJSI), the Global Compact, and Ethos Indicators for Sustainable and Responsible Business Models; In 2016, the results of the business model analysis and mapping of the main associated impacts and risks. Processes and results to define material and strategic aspects G4-23 Structure Risks 20F Environmental impacts of the value chain Stakeholder opinions selection criteria of relevant/strategic aspects Social and Relationship Capital Relationship with Clients and Consumers Supplier management Relationship with Communities Natural and Infrastructure Capital Operational excellence and Eco efficiency Climate change Impacts on Ecosystems Scope of aspects revised based on business risks/ impacts Human Capital Intellectual Capital Financial Capital Governance, ethics and compliance Occupational Health and Safety Training and Availability of the Workforce Economic and Financial Performance Access to financial capital Energy planning Regulatory Matters New element previous adjusted element previous element Learn about other results obtained by Copel available online: G4-25, G4-26 Administration and Financial Statements 20F Report ANEEL’s Social and Environmental Reports Copel’s materiality process For questions, suggestions or details about the content of this report, Copel provides a communication channel Talk to Us - Sustainability. G4-31 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex ABOUT THE REPORT SOBRE Material and strategic aspects, material topics and relevant indicators G4-19, G4-20, G4-21, G4-24, G4-27 MATERiAl And STRATEgiC ASpECT MATERiAl TopiC / boUndARy RElEvAnT indiCAToRS SCopE Regulatory issues **changes in rates G4-2 *changes in regulation (ex.: Resulting from the water shortage) G4-2 regulatory bodies, clients, and consumers regulatory bodies, clients, and consumers Training and Availability of Workforce *valuation, retention and training of employees with critical knowledge for Copel's businesses LA1, LA2, LA9, LA10, LA11, EU14, EU15 employees and contractors 5 Supplier Management *procurement practices and supplier appraisal, and legal compliance EC9, LA14, LA15, EN32, EN33, HR10, HR11, SO9, SO10 all stakeholders *quality and delivery terms (materials/services) - contractors Energy Planning Relationships with Clients and Consumers **projection of demand **availability and reliability **buy-sell strategy **renewable sources **nontechnical losses *default *dynamics of the free consumers market EU10 EU6 G4-2 EU1, EU2 EU12 EU27 EU3 all stakeholders all stakeholders regulatory bodies all stakeholders regulatory bodies clients and consumers regulatory bodies, clients, and consumers *quality of services provided EU8, EU12, EU28, EU29, EU30 clients, and consumers, regulatory bodies *level of satisfaction **energy efficiency *labor compliance *environmental compliance Governance, Ethics, and Compliance *security data Climate Change Operational Excellence and Eco- efficiency *legal actions *ethics, Code of Conduct *contribution to the national GHG emissions *carbon market mechanisms **energy *air emissions *hazardous waste *effluents PR5, SO11 clients and consumers EU7 HR1 EN29 - SO7, SO8, PR9 all stakeholders all stakeholders all stakeholders all stakeholders all stakeholders SO3, SO4, SO5, SO6, HR1, HR8 all stakeholders EN15-18 EN19, EC2 EN3 EN21 EN23 EN8, EN9, EN22 all stakeholders all stakeholders all stakeholders all stakeholders all stakeholders all stakeholders Relationship with Communities *impact and development of local communities EC7, SO1, SO2, EU19, EU20, EU22 all stakeholders Occupational Health and Safety *compliance with applicable health and safety standards LA6, EU18, EU24, EU25, employees, contractors, and regulatory bodies Impacts upon the Ecosystem *impacts on the ecosystem EN11, EN12, EN13, EU13 all stakeholders Access to Financial Capital *Indebtedness and investment program Economic-Financial Performance **cost to acquire energy EC7 G4-9 clients and consumers all stakeholders, more specifically governments and partners Limits: * All business units ** Holding and energy-related 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex 6 MESSAgE fROM THE CEO Message from the CEO G4-1, G4-2 The Brazilian economy was put through a tough test in 2015. For the electric sector, a critical component of the production chain, it was no different, having to face specific difficulties in the regulatory, economic and environmental scenarios that are being slowly and gradually overcome. Nevertheless, amidst this adversity, Copel managed to create sustainable growth opportunities that only the more complex crisis can provide. The fast and agile response to challenges in many of our areas of operation allowed us to record significant results, such as R$ 1.3 billion in net profit for the period. In a year in which governance for the country and companies alike was constantly on the news, and transparency became a daily exercise for many institutions, Copel intensified its actions in this sense, aiming to make its operations even more transparent, and dedicating special attention to people management. Proof of this was the creation of the Corporate Integrity department, reporting directly to the president’s office, and which seeks to coordinate activities associated with compliance, corporate risk management, and internal controls. Commitment to fight corruption is in line with the corporate values and culture, and meets the expectations of stakeholders. The Innovation Coordination department was also created to promote technological development and innovation to stimulate generation and renewal of products, services, and processes. In terms of engagement and promotion of transparency in employee relations, the Anima Program is underway seeking to implement actions to value employees, in addition to promoting improvement of internal processes and communications at all levels. Concurrently, we are developing a program to train leaders, in line with these common values and objectives. All of these initiatives are seeds for a variety of corporate projects, which design and develop the Copel of the future. The year 2015 was also highlighted by the successful strategy to diversify our power generation complex, with beginning of operations of 15 wind farms in the Northeast, totaling 330.5 MW of installed capacity by the end of the year. Our windfarms, together with the preponderance of the hydroelectric plants, currently account for 93% of energy from renewable sources. By 2019, we are already committed to completing 13 new wind farms, representing an investment of R$ 1.9 billion. 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex MESSAgE fROM THE CEO In the area of energy distribution, Copel was evaluated by its clients, for the fourth time in five years, as the best in Brazil according to the 2015 ABRADEE survey, conducted by the Brazilian Association of Electricity Distribution Companies. These awards, plus the extension of our distribution concession for an additional 30 years, are a result of the seriousness of our work, and drives us forward in the quest to constantly improve all our activities. In a severe environmental scenario that requires strict financial management, we are aware of the difficulties to present less frequent and short-term power outages. To this end, we have increased, year upon year, the amount of resources geared toward new technologies in this sense. The expansion of our intelligent network program and the launch of the program Mais Clic Rural, which will allocate R$ 500 million to modernization of rural networks in the next three years, are proof of this guideline. 7 It was also with emphasis on high technology that Copel Telecomunicações took fiber optics to 399 cities in the state of Paraná, two cities in Santa Catarina, one in Mato Grosso, and four in São Paulo. The high demand for broadband services proves the quality of the interaction with the World Wide Web desired by our clients, who now have access to connectivity standards comparable to those of more developed nations. Aware of the current debate about the implications of climate change, in the first half of 2015, Copel joined the platform EPC Empresas pelo Clima (Companies for Climate), which aims to facilitate the transition of the Company towards a low-carbon economy. Thereby, we have reaffirmed our commitment to seek solutions for problems arising out of climate change and their implications to our business. We have also reaffirmed our commitment to the initiative of the United Nations’ Global Compact. In 2015, we confirmed our presence in the São Paulo Stock Exchange’s corporate sustainability Index (ISE-Bovespa) and joined the Morgan Stanley Capital International’s Sustainability Index (MSCI), which awards companies with excellent performance in the social, environmental, and corporate governance areas. For us, obtaining the MSCI seal represents another benchmark in Copel’s path toward sustainability. At Companhia Paranaense de Energia, sustainability is not simply a way of doing things, but rather a future vision that the Company intends to take to the 10 Brazilian states where it operates. This report provides in details these and other projects that Copel developed last year, aiming to perpetuate our activities. Enjoy your reading. LUIZ FERNANDO LEONE VIANNA CEO 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SECTOR COnTExT Sector Context G4-2 The macro economic crisis that hit the country in 2015 also affected the entire addition to the reduction and load, which allowed for closing the year with 8 electricity sector. Load in the National Interconnected System (SIN) reached 62,000 reservoirs near 100% capacity. MWm in the year, representing a decrease of 0.66% compared with 2014. Another consequence of the water crisis was the intense use of thermal The peak was registered in January, when high temperatures and rates drove electric plants throughout the entire first half of 2015. During the second half energy consumption. Nevertheless, the load dropped throughout the year, with of the year, these plants continued supplying, with fuel costs (CVU, Brazilian the smallest rates recorded between April and August, period when moderate acronym for Variable Unit Cost) in excess of R$ 600/MWh, despite the most temperatures typically result in reduced use of air conditioning, with a direct impact expensive plants having been shut down for the second half of the year. upon energy consumption. Another relevant point was the increase in the cost of energy, both for captive rates and spot market prices (transactions in which the delivery of product acquired is immediate and payment is cash). With the water crisis, distributors were left with the challenge to address cash flow imbalance caused by the rate deficit, and receive loan from the ACR Account (Regulated Reduction Environment) of R$ 21 billion, to be paid The economic downturn had a direct impact upon the energy market, as a result of (with the corresponding restatement, fees and interest) in 60 months, and the drop of the average income of the population, which, along with increased rates, the power generation companies retained losses in billions. Rate increases, implied in a reduction in residential consumption. Historically, growth in electric resulting from the need to reflect the cost of power generation, given the lack power demand is observed in years of recession, since the number of families and of rainfall and the consequent increase in the use of thermal electric energy, households to shelter these families grows. But the economy behaved so poorly led to a major retraction in energy consumption, implying in even greater that domestic consumption of energy dropped 2.2% between November 2014 reduction in hydroelectric power generation. GSF closed the year 2015 at and November 2015, representing the worst performance in 12 years. According approximately 0.85, which is 15% below the physical guarantee; a rate to Empresa de Pesquisas Energéticas (EPE), energy demanded by the industries that could have caused bankruptcy of some power generation companies. dropped by 8.9% between November 2014 and November 2015. This situation resulted in a 42% increase in rates. The water crisis also contributed to reducing the level of the reservoirs in the four Already greatly affected by the problem that occurred in 2014, generating subsystems in the country. Rainfall levels and flow are the main contributors to companies of the MRE worked preventively and defensively, filing legal actions this decrease; however, these levels would be even lower in parts of the regions in an attempt to limit the effect of the low GSF. Soon the number of legal actions if the economic activity were normal and energy consumption had been higher in reached several tens, resulting in injunctions exempting power generation 2015. The Southern subsystem had the most comfortable scenario, especially in companies, in total or in most part, of the effects of the GSF. the second half of the year, given the abundant rainfall throughout the period, in 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SECTOR COnTExT Provisional Measure (MP) 688/2015, which transfers the risk of water shortage in economy, which goes beyond the use of renewable sources of energy and hydroelectric power generation to end consumers and extends the agreement of includes the adoption of efficient technologies and production processes the plants or their concessions to offset losses in 2015 with smaller generation, that have reduced impact upon the environment. closes the legal issue in the sector. This condition is valid for both generating companies that deliver the energy produced in the regulated market (distributors) Brazil’s Energy Matrix 9 and those that supply the free market (industrial consumers). Signing the agreement requires: solving the GSF impasse, enabling the renewal of power generation concessions, and ensuring future investments. The proposed agreement foresees hiring new volumes of energy by the owners of the plants, and the extension of the term of the concession agreements to a maximum of 15 years. With the rules of the fourth rate review cycle, the pressure for higher rates this year was reduced. The process involved three phases of debates, one public consultation, and two Public Hearing phases, and throughout the process, more than 100 contributions of representatives from consumers, market analysts, 61% 61% 7% 9% 6% 17% 6% 1% 0% Water Biomass Wind farm Fossil Import Nuclear Solar consultants, researchers, and representatives of the power distribution companies Source: Aneel were received. One of the rules allows for the recognition, in the rates, of the remuneration for investments made through loans in the Energy Development Account (CDE), geared toward the program Luz para Todos (Light for All). Another decision that helped reduce the weight of readjustments was the increase in productivity gains to be considered in the so-called Fator X; a rate that is applied to reduce the impact of the IGP-M index on the rates. In the environmental area, COP21 gathered national goals in an effort to keep temperature increase below 1.5° C. In terms of the Brazilian commitment, the country presented its absolute goal to reduce greenhouse gas emissions for 2030, 43% lower than 2005. Specifically for the electric sector, the goal is for 23% of the national electricity matrix to come from non-fossil sources, excluding hydroelectric generation (currently this number is at 23.3%). Another measure planned in Brazilian goals to reduce greenhouse gas emissions is to achieve a 10% gain in efficiency in the electric sector. Achieving these goals will require investments in a low-carbon For the electric sector, the challenge will be enormous, since the Brazilian energy matrix predominantly uses sources with low carbon emission and, in recent years, has significantly expanded emissions of greenhouse gases given to need to continuously operate thermoelectric plants to offset the low level of reservoirs in the hydroelectric plants. Consequently, even with all thermal electric generation, in 2014 production of electricity represented only 4.5% of Brazilian emissions of greenhouse gases. Comparatively, in the global scenario, the electricity sector accounts for 31.3% of emissions, and the Brazilian energy matrix for 4.5% should be reason of pride, although there are aspects that can be improved. 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SECTOR COnTExT Context – Operation of Brazilian electricity sector plAyERS who are the major players on the market of electric power in brazil. How EnERgy SUpply woRkS , n o i s i v r e p u s , n o i t a l u g e r , n o i s s e c n o c f o l e v e L g n i r o t i n o m d n a g n n n a l p i s e c i v r e s f o l e v e L s t n e g a d n a CMSE Monitoring Committee of the Electric Sector CnpE National Policy And Energy Council MME Ministry of Mines and Energy AnEEl National Electric Energy Agency EpE Energy Research Company onS National Operator of the Electric System CCEE Electric Power Marketing Chamber CnpE: Defines the country’s energy policy with the purpose of ensuring stability in energy supply. MME: Responsible for planning, management and development of the legislation for the sector, as well as for supervision and control of execution of policies geared toward the country’s energy development. EpE: Plans expansion of generation and transmission, for the MME, and provides technical support for auctions. CMSE: Supervises the continuity and reliability of electricity supply. AnEEl: Regulates and supervises generation, transmission, distribution and marketing of electricity. It defines the transport and consumption rates and ensures economic and financial balance of the concessions. onS: Controls the operation of the National Interconnected System (SIN) so as to optimize energy resources. CCEE: Manages transactions of the energy market and conducts the official auctions. Regulated market Captive consumers buy energy from the distribution concessionaires to which they are connected. Each consumer unit pays only a monthly electricity bill. Rates are regulated by the Government, and the price is the result of a mix of long-term contracts. 10 C a s h F l o w E n e r g y F l o w M e c h a n i s m s C o n t r a c t i n g Government fees and taxes Only one electricity bill Remuneration according to auction contract Remuneration for transmission services Generation onS ONS Controls power generation Transmission Distribution Consumer defines prices Auction for power supply MME defines price cap ANEEL promotes auctions CCE operationalizes Indicates the amount of energy REvEnUE FRoM diSTRibUTion SERviCE Quota A Quota b Purchase of electricity Operating costs Transmission Depreciation quota Fees and taxes Return on investment Destination: generation, transmission and government Destination: distribution Total electricity bill = Quota A + Quota B Free Market Free consumers buy energy directly from generators or distributors through bilateral agreements with freely negotiated conditions, such as price, time, volume, etc. Each consumer unit pays the local utility a bill referring to distribution services (regulated rate) and one or more bills related to purchase of electricity (negotiated price agreement). p o s s i b i l i t y 1 p o s s i b i l i t y 2 C a s h F l o w F l o w E n e r g y F l o w E n e r g y C a s h F l o w Government Fees and taxes Distributor invoice + Generator invoice remuneration for transmission services Remuneration for distribution services Generation Transmission Distribution Consumer Free or special Marketer Agreements to supply power via marketer 01SobreAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex 11 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex About Copel About Copel Copel - Companhia Paranaense de Energia - is currently the largest company in the state of Paraná. The Company operates in the generation, transmission, distribution, marketing of energy, and in the telecommunications sector. G4-3, G4-4 Founded 61 years ago, with headquarters in the city of Curitiba, PR, the Company operates in 10 Brazilian states through a structure composed of an own power generation complex of power plants, transmission lines, substations, and distribution network, in addition to the operation of a telecommunications fiber optic system, with interests in sanitation and gas sectors. G4-5, G4-6 Copel is a corporation, established in the form of a quasi-public company and controlled by the Government of the State of Paraná, with shares traded at the São Paulo stock exchange (BM&FBOVESPA), and in the stock exchanges in New York and Madrid. G4-7 Strategic Reference G4-56 Copel has assumptions and guidelines set forth in its strategic reference, which guides management and all actions, and internal and external decisions of the Company. Mission Vision Values Supply energy and solutions for sustainable development. Become a benchmark in the areas where it operates, sustainably generating value. Ethics Respect to people Dedication Transparency Health and safety Responsibility Innovation Copel’s business model Develops studies, builds and operates generation plants to produce energy from different sources: • Thermoelectric plant • Hydroelectric plant • Wind farm Develops, builds and operates transmission towers to transport energy from the plant where it was generated to the distribution substation where it will be forwarded to end consumers. Provides, operates and maintains the infrastructure and provides related services to customers. Generation Transmission Distribution Consumer 12 Auctions Main electricity sales channel from the generation unit (GeT). One of the main channels through which the Distribution Unit (DIS) purchases energy, including from the Generation and Transmission unit (GeT). Currently, auctions held in the regulated market are an important sales channel for the energy from our generation units, and the only one through which our distribution unit acquires energy to resell to captive consumers. Our generation unit only sells energy to our distribution unit through auctions in the regulated market. Our distribution unit, as well as other Brazilian distribution companies, is also obliged to acquire energy from the Itaipu Binacional hydroelectric plant which has joint ownership between Brazil and Paraguay, in amounts established by the Brazilian government based on our prorated share of the Brazilian energy market. Operations in the free market can occur through Copel Geração e Transmissão, or through the recently created wholly-owned subsidiary Copel Comercialização, whose goal is to reinforce Copel’s positioning in this market, allowing for greater agility and flexibility in marketing energy. The subsidiary will operate in a segment with large growth potential, capable of marketing conventional and incentivized energy. G4-13 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex ShAreholding StruCture Shareholding Structure G4-17 ORGANIZATION CHART - SHAREHOLDING STRUCTURE / POSITION ON DECEMBER 31, 2015 Paraná State BNDESPAR Custódia em Bolsa (free float) Eletrobras Other Shareholders 58.63% 31.07% Voting Share Total 26.41% 23.96% Voting Share Total 13.71% 44.19% Voting Share Total 1.06% 0.56% Voting Share Total 0.19% 0.22% Voting Share Total BM&FBOVESPA 12.91% 30.60% NYSE 0.80% 13.56% lATIBEX 0.00% 0.03% Voting Share Total Voting Share Total Voting Share Total 13 (1) Copel Geração e Transmissão S.A. (1) Copel Distribuição S.A. (1) Copel Telecomunicações S.A (1) Copel Renováveis S.A. (1) Copel Comercialização S.A. (a) 100% Total 100% Total 100% Total 100% Total 100% (4) Marumbi Transmissoras de Emergência S.A. (80%) (2) UEG Araucária lTDA. (60%) (4) Costa Oeste Transmissora de Energia S.A. (51%) (1) Nova Eurus IV Energias Renováveis S.A. (100%) (5) Consórcio Energético Cruzeiro do Sul (51%) (1) Nova Asa Branca I Energias Renováveis S.A. (100%) (4) Mata de Santa Genebra Transmissão S.A. (50.1%) (4) Guaraciaba Transmissora de Energia (TP SUl) S.A. (49%) (4) Matrinchã Transmissora de Energia (TP NORTE) S.A. (49%) (4) Integração Maranhense Trans. de Energia S.A. (49%) (4) Caiuá Transmissora de Energia S.A. (49%) (4) Cantareira Transmissora de Energia S.A. (49%) (5) Consórcio São Jerônimo (41.2%) (1) Nova Asa Branca II Energias Renováveis S.A. (100%) (1) Nova Asa Branca III Energias Renováveis S.A. (100%) (1) Santa Maria Energias Renováveis S.A. (100%) (1) Santa Helena Energias Renováveis S.A. (100%) (1) Ventos de Santo Uriel S.A. (100%) (4) Paranaiba Transmissora de Energia S.A. (24.5%) (1) São Bento Energia. (100%) (4) Transmissora Sul Brasileira de Energia S.A. (20%) (6) Consórcio Tapajós (11.1%) (6) Consórcio Baixo Iguaçu (30%) GE Olho D’água S.A. (100%) GE Boa Vista S.A. (100%) GE Farol S.A. (100%) GE São Bento do Norte S.A. (100%) (1) Brisa Potiguar S.A. 100.0% (4) Dominó Holdings S.A. 49.0% Total (1) Wholly-owned subsidiary (2) Affiliates (3) Related companies (4) Jointly-owned (5) Consortia (6) Consortia for investment (7) Without investments realized Note: Copel also has 0.82% of the total capital of Investco S/A (lajeado Hydroelectric Plant). (a) on February 3, 2016, Copel Participações S.A. was named Copel Comercialização S.A.. (3) Carbocampel S.A. (49%) (3) Copel Amec S/C lTDA (em liquidação) (48%) (3) Sercomtel S.A. Telecomunicações (45%) (3) Escolectric lTDA. (40%) (3) Foz do Chopim Energética lTDA. (35.8%) (3) Dois Saltos Empreend. de Geração Energia Elétrica lTDA. (30%) (3) Dona Francisca Energética S.A. (23%) (2) UEG Araucária lTDA. (20%) (3) Companhia de Saneamento do Parana SANEPAR (7.6%) (7) Parana Gás Exploração e Produção S.A. (30%) (2) Elejor - Centrais Elétricas do Rio Jordão S.A. (70%) (2) Companhia Paranaense de Gás - Compagas (51%) (2) Voltalia São Miguel do Gostoso Participações S.A. (49%) (1) Cutia Empreendimentos Eólicos SPE S.A. (100%) São Bento do Norte I S.A. (99.9%) São Bento do Norte II S.A. (99.9%) São Bento do Norte III S.A. (99.9%) São Miguel I S.A. (99.9%) São Miguel II S.A. (99.9%) São Miguel III S.A. (99.9%) Usina de Energia Eólica Cutia S.A. (100%) Usina de Energia Eólica Guajiru S.A. (100%) Usina de Energia Eólica Jangada S.A. (100%) Usina de Energia Eólica Maria Helena S.A. (100%) Usina de Energia Eólica Potiguar S.A. (100%) Usina de Energia Eólica Esperança do Nordeste S.A. (100%) Usina de Energia Eólica Paraiso dos Ventos do Nordeste S.A. (100%) 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex About Copel The presence of Copel in Brazilian states G4-8 Goiás Maranhão Rio Grande do Norte Market share in 2015 G4-8, G4-9 MAIN PRODUCTS (%) BRAZIL SOUTHERN REGION PARANá Power generation (1) Electric power transmission (4) 3.5 1.8 21.3 (2) (3) 53.5 (2) (3) 8.8 28.5 Distribution of electricity (5) 6.0 (6) 34.0 (6) 96.9 (7) Gas distribution (8) Source: Administration Report 3.5 40 100.0 (1) Installed capacity. Copel’s interest in plants and wind farms not included (5) Share in serving the captive/free market (2) The Itaipu hydroelectric plant not included (3) Does not include the plants in the Paranapanema River (4) The market refers to Allowed Annual Revenue - RAP (6) Source: Empresa de Pesquisa Energética – EPE (7) Estimated data (8) The volume distributed in Paraná, with thermoelectric, considered 14 Mato Grosso Bahia Minas Gerais Santa Catarina São Paulo Rio Grande do Sul Paraná HYDROELECTRIC PLANT SUBSTATION TRANSMISSION LINE WIND FARM DISTRIBUTION LINE FIBER OPTIC NETWORK Strategic objectives Corporate Guidelines Expand businesses profitably and sustainably Invest in innovation, modernization of assets, and people management Maintain excellence in costs, processes, and quality Guidelines for the Businesses Electric Sector Copel Geração e Transmissão S.A. Copel Distribuição S.A. Copel Renováveis S.A. Maintain concessions; Increase share of alternative renewable sources Electric, Telecommunications, Sanitation, and Gas Sectors Copel Comercialização S.A Maximize profitability of assets in society. Telecommunications Sector Copel Telecomunicações S.A Expand the client base and offer high value-added services 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex About Copel risk factor G4-2 The chart below summarizes the main industry risks that could affect our businesses and those considered in our strategic planning. More details about these risks are available in the 20-F Report. Main risks to Copel’s businesses 1 2 3 4 Internal risk factors: Operations 5. Uncertainties in projections for energy demand can adversely impact the businesses. 6. Legal actions that can have a material adverse effect upon our businesses if the outcome is unfavorable to us. External Risks Internal Risks 7. Security breach of information, employee errors, conduct deviations can harm our business and reputation. ] Operation Market Expansion 5 6 7 8A 9 10 11 12 8B External risk fators: 1. Political, economic, and regulatory conditions, which include a series of topics, such as economic development of the country, changes in rate policies, regulations, and changes in the concession regime, taxation, and cases of corruption and unlawful conduct. 2. Fluctuations in the currency rate comparing the Brazilian Real with foreign currencies can increase the cost of servicing our debt in foreign currency and the acquisition of electricity from Itaipu, as well as creating additional inflation pressure that can limit access to international markets. Fluctuations that can have an adverse effect on our net profit and cash flow can also result in uncertainties in the Brazilian economy and the Brazilian real estate market. 3. Negative performance of economies in other countries, especially in developing nations, can adversely affect foreign investments in Brazil and the economic growth of the country. 4. Changes in the rainfall regime. The government can adopt measures for the preservation of water/energy that are unfavorable to the businesses. 8A. Contractors involved in the operation may not be in compliance with the 15 law and with our ethical values. Consumer market 9. Certain consumers in our area of concession may suspend the acquisition of energy from our distribution unit. 10. Part of our operating revenue comes from Free Consumers, who may seek other suppliers of energy once their supply agreements expire. 11. Default resulting from difficulty in receiving amounts billed to our clients. Expansion 12. Limited access to capital as a result of certain limits defined by the National Monetary Council and by Brazil’s Central Bank concerning the level of credit that financial institutions can offer to companies in the public sector. 8B. Contractors involved in the construction and expansion of projects may not be in compliance with the legislation and with our ethical values, delivering materials and services below the expected quality and beyond the schedule foreseen in our planning. 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex About Copel Main social and environmental impacts of our businesses G4-2, G4-EC8, G4-SO2 It is in Copel’s mission to serve society, providing infrastructure, energy, and technology necessary for people’s lives, and available for their development. Some of Copel’s operations, presented below, generate relevant impacts to the community where they are located and to society as a whole. Main social and environmental impacts of Copel’s businesses Burning of fossil fuels Multiple use of water (local communities) Removal of native vegetation in case of new projects Urban visual impacts Water withdrawal for cooling processes, with return to the source Flooding of areas and displacement of communities in the case of new projects No significant impacts THERMOELECTRIC POWER PLANTS HYDROELECTRIC PLANTS RENEWABLE ENERGY SOURCES TRANSMISSION DISTRIBUTION AND TELECOM Emission of Greenhouse Gases (GHG) and air pollutants Generation of Hazardous Waste Recovery and protection of native vegetation through compensation programs and the like Income- generating projects in local communities (lease) Recovery and protection of native vegetation Urban afforestation Tax generation in municipalities where the Company has operations local development programs Social and environmental impacts: • Significant increase in collection of state and municipal taxes, such as Services Taxes (ISS), charged on civil construction work, in the cities where the works are conducted. During the operation of the projects, the collection of other municipal taxes is increased, and an increase in the share of state taxes, such as ICMS. • Displacement of households impacted by the works and loss of the use of land. • Both the construction and operation of Company assets can impact the health and safety of stakeholders, or those located in the area of impact. • Installation and operation of projects can affect the economic production of local communities, resulting in loss of local ties or increased demand upon public services. In this case, each project implements specific programs to minimize and mitigate these impacts. Environmental impact: • Both the construction and operation of Copel’s assets can alter ecosystems, especially in terms of the natural conditions of water resources and vegetation in the flood basin, in the case of hydroelectric plants. • The installation and operation of projects can generate a series of emissions and waste. Among the main impacts of this type are air emissions and generation of hazardous waste, all of which are subject to legislation and control by regulatory agencies. 16 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex governAnCe governance Copel’s governance model is based on transparency, conformity, and corporate social responsibility, pursuant to best practices proposed by the Brazilian Institute of Corporate Governance (IBGC). There are four principles that guide corporate governance at Copel: Transparency, Equity, Accountability, and Corporate Responsibility. Based on these principles, Copel developed a Governance Policy, which establishes the standard and best practices in terms of corporate governance to be adopted at Copel and in its subsidiaries. For the Company’s operations to be permanently guided by morally sound principles, all those working in its name are governed by a code of conduct developed according to Copel’s values, the principles of the Global Compact, and Corporate Governance. G4-41 Both the Governance Policy and the Code of Conduct are approved by the Company’s highest governance body - the Board of Directors. learn about the governance practices and policies that guide the Company’s businesses: Corporate Governance Policy Governance Practices 17 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex governAnCe Copel’s Governance Structure G4-34, G4-38 Board of Directors • Deliberates and deﬁnes the overall direction of the business. • Members: 9 (7 being independent). • Mandate: 2 years after the election in Assembly. Audit Committee • Monitors, reviews, supervises, accompanies and makes recommendations on the Company's activities. • Members: 3 independents and members of the board of directors. • Mandate: 2 years. Corporate Risk Management Committee • Advises the Audit Committee in the deﬁnition of guidelines and strategies for the Company's risk management. • Members: 11 employees (Holding and wholly-owned subsidiaries). • Mandate: 2 years. Holding General Shareholders' Meeting • Deﬁnes the business guidelines and make strategic decisions. • Members: shareholders eligible to vote (ordinary shares), which gather in forum annually or extraordinarily, whenever necessary. Executive Board • Has executive functions and applies the Company's strategy. • Members: CEO, 4 directors and 1 adjunct director. • Mandate: 3 years after election by the Board of Directors. Presidency Fiscal Council • Permanent organ that reviews and advises the ﬁnancial statements and supervises the actions of the managers. • Members: 5 eﬀective and 5 substitutes. • Mandate: 1 year. Ethical Guidance Committee • Ensures the fulﬁllment of the code of conduct. • Members: 12 (with 11 employees and one representative of civil society). Supported by CADAM (Committee to Analyze Complaints of Moral Harassment). 18 Committee Disclosure of Relevant Acts and Facts • Supports the Department of Investor Relations in the practice of Disclosure Policy. • Members: 15. Wholly-Owned Subsidiaries Department of Finance and Investor Relations Corporate Management Department Department of Institutional Relations Business Development Department COPEL DISTRIBUIÇÃO S.A. COPEL GERAÇÃO E TRANSMISSÃO S.A. COPEL TELECOMUNICAÇÕES S.A. COPEL RENOVÁVEIS S.A. COPEL COMERCIALIZAÇÃO S.A. 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex governAnCe Composition of the Board of Directors and its supporting committees G4-38, G4-39 • CEO (government - independent): Fernando Xavier Ferreira • Executive Secretary (government): Luiz Fernando Leone Vianna • Advisor (government - independent): Mauro Ricardo Machado Costa • Advisor (government - independent): José Richa Filho d. Cannot be spouses or direct family members, in-laws or in affinity, up to a second degree to the person qualified under item “a” above; e. Cannot be members of the Board of Directors in a situation of conflict of interest, or potential conflict of interest, which affects their independence. The Board of Directors holds four planned meetings besides the extraordinary • Advisor (BNDES - independent): Henrique Amarante Costa Pinto meetings (an average of eight meetings per year). G4-47 • Advisor (BNDES - independent): Maurício Borges Lemos • Advisor (government - independent): Carlos Homero Giacomini • Advisor (minority - independent): Marlos Gaio • Advisor (elected by employees): Hélio Marques da Silva Audit Committee • President: Carlos Homero Giacomini • Member: José Richa Filho • Member: Mauro Ricardo Machado Costa Copel’s Board of Directors is composed of seven independent members as foreseen in rule 10A-3 of the Securities Exchange Act. G4-40 These members: a. Must be independent technically, economically, and from shareholders (especially subordination) and from the Company (pursuant to the terms of the Independence Analysis of the members of the Board of Directors); The résumés of the members of the Board of Directors and of the Audit Committee are available on the Governance Map. 19 • IPO in 1994 at BM&FBOVESPA, and currently its shares are listed in level I in Corporate Governance, which indicates adoption of practices that favor transparency and access to information by investors. G4-7 • In 1997, it was the first Company in the Brazilian electric sector to have its shares traded in the New York Stock .Exchange (NYSE) and in 2002, in the Madrid stock exchange (latibex). • In 2015, the Company remained listed in the Corporate Sustainability Index (ISE). • In 2015, the Company also entered the Sustainability Index of Morgan Stanley Capital International (MSCI). b. Cannot accept payment for consulting, advisory, or compensation fees by the Company; remuneration and Self-Assessment c. Cannot have, in the past 12 months, held executive director positions at the Company, or in any of its subsidiaries, affiliates or related companies, technical person in charge, directors, managers, supervisors, or any other member, with managerial position, of the team involved in the independent audit work for the Company or its subsidiaries, affiliates, or related companies, or shareholders who, directly or indirectly, hold more than 10% of the Company’s voting share; Copel’s Administrators and Fiscal Advisors have their remuneration defined during the General Assembly Meeting, which takes into account the remuneration of the previous period and the corresponding monetary restatement. In 2015, the global remuneration for the Executive Board, for the Board of Directors, and for the Fiscal Council totaled R$ 9.7 million. G4-51, G4-52 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex governAnCe The self-assessment for the Board of Directors, the Executive Board and the Audit Committee is conducted annually at the Company. The objective is to seek continuous improvement of each individual. Advisors and Directors answer any specific questionnaire for each department. Based on the analysis of the results, strengths and weaknesses are indicated and proposals are made for improvement. G4-43, G4-44 practices on integrity You Code of Conduct Corporate risk management COE Ombudsman’s Office Reporting Channels Dialogue legal Department Copel advocates for ethical conduct and transparent operations, establishing guidelines and principles that are reflected in its corporate policies. In this sense, in 2014 the Company adhered to the Initiative for Audit Governments Against Corruption, reassuring its commitment with transparency and fight against corruption, CADAM 20 aiming to promote sustainability, ethical conduct and best corporate governance practices. Aiming to expand the communication of Compliance concepts, the Copel Compliance Portal was created and made available to internal and external audiences. The portal presents mechanisms adopted by the Company to guide the transparency and ethical conduct in all its activities. G4-56 Integrity practices are sponsored by the Company’s senior management and are in line with the public commitment to fight corruption. Seeking to enforce the Compliance practices and intensify initiatives geared toward risk management and internal controls, the Corporate Integrity Coordination was created; a body hierarchically associated with the president’s office, and which is responsible for coordinating the implementation of the Corporate Integrity Program throughout the Company. Fighting corruption The Company repudiates corruption in all its forms, and offers guidance on how to fight it. Aiming to expand the communication of concepts and guidelines about fighting corruption, as well as the Company values, which are included in the Code of Conduct, distance learning training courses started to be developed, offering the opportunity of taking knowledge to all employees. In order to expand dissemination of these concepts, in 2015, all employees were informed of the release of the Portal Copel Compliance. The portal presents the mechanisms adopted by the Company which are aimed at strengthening ethical values, transparency and compliance with laws and regulations. Initially, 63 employees were trained in topics such as fraud investigations, compliance and anti-corruption legislation. G4-SO4 In addition to communication and training, the operating processes are submitted to annual assessment for risks associated with errors or fraud that could interfere in the results of financial statements, and internal controls are established and submitted to tests by the Internal Audit and the Independent Auditor, with the results being reported to senior management. G4-SO3 The Company also adopts as a practice, issuance, by process managers, of “Internal Control Certificates”, which is a document that formalizes notifications of noncompliance detected, committing to developing action plans to regularize such noncompliance. Through the adoption of this portfolio of initiatives intended to consolidate integrity practices and fight against corruption, two cases of corruption were identified which resulted in termination. G4-SO5 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex governAnCe Code of business Conduct G4-56, G4-57 The Code of Conduct was developed taking into account Copel’s values, the principles of the Global Compact, and the principles of Corporate Governance. It is a guiding instrument for the acts of all those who perform activities in the name of the Company, and establishes ethical parameters for the conduct of employees, managers, members of the board, interns, services providers, and contractors. The code defines a set of concepts that address integrity, conformity, transparency, health and safety, social and environmental responsibility, respect, and relationship with the various segments of the environment in which the Company operates. In 2015 the Code of Conduct was revised and submitted to an open consultation process with internal audiences and society at large. After consolidation of proposals for improvement, the code was approved by the Executive Board and Board of Directors. Company employees receive a printed version of the Code of Conduct and acknowledge the commitments with its provisions. Contractors and suppliers are guided through the Supplier’s Manual and a specific clause in agreements. The Code of Conduct is available to all stakeholders at the Compliance Portal. Channels of complaint G4-57, G4-58 Confidential Communication Channel This channel is intended to receive reports and claims associated with noncompliance with standards and laws, especially those associated with fraud or irregularities involving financial, audit, or accounting issues. The channel ensures protection, confidentiality of the person making the report and an answer to the claim. It is available 24 x 7 through a toll- free number: 0800 643 5665. Ombudsman’s Office There are two channels open to all audiences, both internal and external, to receive suggestions, complaints and reports, which are available on business days, from 8 AM to 6 PM, via toll-free number. The Ombudsman’s Office for Copel Distribuição is available through the phone number 0800 647 0606 and also through the e-mail ouvidoria@copel.com. Additionally, it is prepared to receive complaints personally or through mail sent to the address Rua Professor Brasilio Ovidio da Costa, 1703, district of Santa Quitéria, zip code: 80310-130, in Curitiba, PR. The Ombudsman’s Office for Copel Telecomunicações is available through the toll-free number 0800 649 3949 or the e-mail ouvidoriatelecom@copel.com, and is prepared to receive complaints personally or via mail sent to the address Rua Emiliano Perneta, 756, district of Batel, zip code: 80420-080, in Curitiba, PR. Committee to Analyze Complaints of Moral Harassment (CADAM) Committee to address and support all employees victim of moral harassment in the workplace. The information is confidential and both the person reporting and the person reported have the preservation of their identity guaranteed. E-mail: cadam@copel.com Ethical Guidance Council (COE) COE evaluates and issues guidance in processes associated with ethical conduct within the Company and has up to 90 days to provide a final solution. E-mail: conselho. etica@copel.com In addition to these channels, Copel is open to receive requests for information, services, criticism or suggestions for improvement, guidance and grievances from its stakeholders In order to gather opinions, criticism, complaints, claims, and personal through various Service Channels. consultation, Copel provides a communication channel, presented below, which, in addition to fighting fraud and corruption, expands the organization’s relationship with stakeholders. 21 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex governAnCe risk management G4-2 Copel’s Integrated Corporate Risk Management covers all corporate areas, its The Audit Committee is an advisory body to be Board of Directors, wholly-owned and controlled subsidiaries, jointly held affiliated companies, and that acts independently in a consulting and permanent manner, and is establishes the formation of a Corporate Risk Management Committee, which responsible for the revision and supervision of the process to present accounting and financial reports; for the internal control processes and risk management; and for the activities of internal auditors and independent external auditors. The committee convenes ordinarily, at least six times throughout the year, according to a preestablished agenda; however it can convene extraordinarily. If necessary, the committee can meet with any members of the Executive Board, of the Independent Audit, the Internal Audit, or of the Fiscal Council. 22 reports to the Audit Committee. The guidelines adopted are based on renowned structures and standards, such as the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and ISO 31000, and whose purpose is to maximize economic, social and environmental value to stakeholders and ensure compliance with laws and regulations in force. Given the intrinsic uncertainty to risks and the nature of the sector where the Company operates, the risk management model adopts parameters for appetite for risk, considers the likelihood of occurrence of events and the impacts on the financial and operating areas, and to the image of the Company, and foresees tools for treatment and mitigation of such risks. The risk management adopted by the Company considers legal, regulatory, social and environmental, and reputation aspects, among others, and serves as a base for decision-making processes and operating activities, taking into account the following risk profiles: strategic, operational, disclosure, and compliance. G4-14 Corporate Risk Management Committee G4-45, G4-46, G4-47, G4-49 The Company has in place a Corporate Risk Management Committee, responsible for the development and monitoring of risk management policies and for advising the Audit Committee in order to ensure good management of resources and protection and valuation of Company assets. This collegiate body has an annual agenda of ordinary meetings, and may convene extraordinarily whenever necessary. 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SuStAinAbility MAnAgeMent Sustainability Management Committed to sustainable development, Copel, in addition to providing energy solutions to telecommunications for the entire population of the state of Paraná, business areas, aiming to align the understanding of sustainability as a form to generate financial, reputational, and competitive value. Thus, Copel fine tuned its Materiality Matrix and adopted a new reporting format based on the structure of the International Integrated Reporting Council (IIRC). promotes economic growth with social and environmental responsibility. Copel was chosen, in November 2015, to remain among the group of most learn about our Sustainability Policy. sustainable companies in the São Paulo Stock Exchange (BM&FBOVESPA), in the 2015/2016 portfolio. Copel’s shares have integrated the Corporate Challenges in terms of sustainability are included in the Company’s strategic Sustainability Index (ISE), since it was created in 2005. We were present in reference through its mission, vision, values, and strategic guidelines, in the 10 of the 11 editions of this index. sustainability policies and in corporate governance. Additionally, these challenges cascade into the strategic objectives “Sustainably Maximize Company Value” and “Improve Performance in Sustainability”. Also in 2015, the Company was included in the sustainability Index from Morgan Stanley Capital International (MSCI), a global leader in the composition of financial indices that serve as reference for investors. Copel’s Corporate Sustainability Coordination Office defines Company’s The MSCI ESG seal is awarded to companies that show excellent policies and guidelines. Its objetives include conducting corporate issues performance in the social, environmental and corporate governance related to sustainability, continuous performance improvement, strategic areas. Copel obtained the highest score in 25 of the 28 indicators communication with stakeholders and management of related topics and analyzed, which include, for example, control of carbon emissions and indicators. This office reports to the Executive Board and to the Board of disclosure of administrative and financial management information. Directors on strategic issues to corporate sustainability, in order to deliberate and approve the relevant decisions. G4-35, G4-36, G4-45 Copel adopts the main market practices in order to: Voluntary commitments G4-15, G4-16 Throughout its history, Copel has assumed several voluntary commitments: • Guide and assess its performance, as well as compare its practices with global Global Compact and national benchmarks: questionnaire from RobecoSAM (Dow Jones Sustainability Index - DJSI), Ethos Indicators for Sustainable and Responsible Business Models, A signatory of the Global Compact of the United Nations since 2000, Copel supports the principles proposed by this initiative, based on three and the Corporate Sustainability Index (ISE - BM&FBOVESPA). main aspects: • Report its performance and engage its audiences: Global Reporting Initiative (GRI), Carbon Disclosure Project (CDP) and Global Greenhouse Gas Protocol (GHG). In 2015, Copel intensified its efforts to improve engagement of leadership and • Constant improvement in the management systems and corporate policies; • Support to the creation, implementation and improvement of public policies; • Consolidation of partnerships with other companies, institutions or organizations in projects that may provide social and environmental gains. 23 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SuStAinAbility MAnAgeMent Corporate Contribution for the Promotion of a Green and Inclusive Economy to raise awareness and involve employees in the promotion of equal Copel assumed the commitment in 2012 at Rio+20. It is the public commitment of companies signatory to the Global Compact with the adoption of initiatives toward a more inclusive economy, which contributes to facing major challenges in sustainability in Brazil and worldwide. rights, opportunities and recognition of everyone, with special attention to vulnerable groups subject to discrimination based on gender, race, color, physical disability, sexual orientation, age, and religion. Prevention of Moral and Sexual Harassment Statement of Cultural Action for Governments in the Fight Against Corruption Copel recognizes health and safety at the workplace as a fundamental Copel adhered to the statement in 2014, reaffirming its commitment to transparency and the fight against corruption, expressing its support to the Post-2015 human right, valuing life and respecting physical and moral integrity of people, seeking to create a gratifying and conducive work environment to Development Agenda, in an effort to promote sustainability, ethical conduct, and generate productivity. best practices in corporate governance. Respect for Free Association and the Right to Collective Bargaining Corporate Pact for Integrity and Fight against Corruption Copel guarantees the principles of freedom of association, for individuals and The Company became a signatory in 2015. Its principles are based on the Charter of Principles of Social Responsibility, on the United Nations Convention against Corruption, on the 10th principle of the Global Compact, and on the OCDE guidelines. collectively, pursuant to article 8 of the 1988 Constitution, and Convention No. 87, of the International labor Organization - IlO. Principles for Responsible Management Education (PRME) Copel Corporate University (UniCopel) became, in 2014, the first of its kind in Eradication of Child Labor, Forced or Bonded Labor Brazil to adhere to the PRME, a program by the United Nations that promotes In alignment with the principles of the Global Compact and the Objectives for Sustainable Development - ODS, Copel commits to implementing tools to bar hiring products and services from suppliers who use child, forced or compulsory labor in its value chain. training of leaders toward responsible management of businesses. Agenda for Climate Change Aware of the effects that climate change can have on power generation, transmission and distribution, Copel created, in 2011, a Climate Change Sexual Exploitation of Children and Adolescents agenda in order to establish commitments and guidelines to be adopted in The Company promotes actions to raise awareness among employees, suppliers, the Company’s planning and operations in order to contribute to sustainable and clients against the sexual exploitation of children and further disseminates this development. commitment in its Supplier Manual and through specific clauses in its agreements. Learn more about the commitments assumed on the Sustainability page – Fight against Discrimination and Valuation of Diversity Voluntary Commitments. The Company created the Permanent Committee on Diversity, whose goals are 24 02PERFILAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex 25 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex Performance in Capitals 26 Under capitals, we present our capability of generating value for stakeholders in the short-, medium-, and long-term. “Capitals are stocks of value that increased, decreased or transformed through the activities and outputs of the organization. For example, an organization’s financial capital is increased when it makes a profit, and the quality of its human capital is improved when employees become better trained.” IIRC Framework 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex HUMAN CAPITAL Important information about personnel and their performance Human Capital Copel’s Staff G4-9, G4-10 78% 22% 6,719 men 1,909 women 8,628 employees New hires in 2015 G4-LA1 More than half people under the age of 30. (51%) are Employee turnover rate 2.42%. is 64% 36% 144 men 81 women 225 employees Copel’s employees represent one of the Company’s success variables. It is the employees who ensure that corporate objectives are fulfilled. The main objectives and focus of Human Capital management are geared toward professional development and training in line with business priorities, improving management practices of knowledge, culture, and health and safety. Management of human Capital A critical part of the Company’s strategy and its sustainable development, Copel’s employees are formed by 8,628 direct employees, whose profile is detailed in the G4-10 indicator in the Content Index. Additionally, another 6,457 contractors provide services to the Company in activities such as: client services, construction of transmission lines, networks and substations, connections, disconnections and re-connections, reading of meters in low tension, maintenance of electric system, green areas and buildings, private security, and maintenance, among others. G4-9 The Company’s relationship with these professionals is based on respect for the Consolidation of Labor Laws (CLT), in the fundamental conventions set forth by the International Labor Organization (ILO), and the Universal Declaration of Human Rights. And the behavior expected by the Company from this audience is defined through the Code of Conduct, and the Manual for Copel Personnel. 1,290 (15%) employees will be eligible for retirement within the Copel’s Career and Salary Plan was adjusted in 2015, after approval from the Executive Board and next five years. Of these, 153 are managers. In the next 10 years, from the committee for Public Companies and Remuneration Policy, an entity created in January 2,222 employees will be eligible for retirement. G4-EU15 2015 by the government of the state of Paraná. The purpose of the adjustment was to align salary 100% of the employees are covered by collective bargaining agreements. G4-11 In 2015, Copel invested R$ 8.79 million in training and development, that is 39% more than in 2014. G4-EC1 standards to the market, aiming to provide all Copel employees with opportunities to advance in their careers. The Plan initially prioritizes horizontal movements, based on individual merits, and subsequently vertical movements, pursuant to standard and transparent criteria. The new Repositioning Program was developed in 2015, and announced in March 2016. The program was created to value and promote human capital within the Company, as well as to provide equal opportunities to employees, and transparency in the people movement process. G4-DMA-EU14 27 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex HUMAN CAPITAL ChAt wIth In terms of the new actions for people management, the focus at Copel is to achieve satisfaction, appreciation, and quality of life for employees through the assessment and implementation of projects such as: home office, family day, recovery of the pre-retirement program, and especially, preparation and development of leaders and ample communication of these actions among employees. Additionally, another point is the improvement of internal processes for the Company to manage its resources in a more optimized and effective manner. These initiatives seek to align people with the quest for results in order to ensure Copel’s continuity and sustainability. A commitment assumed by the president upon taking office, people management is a priority at Copel’s Benefits G4-EC1 strategic plan. For CEO Luiz Fernando Leone Vianna, it is Copel offers a package of benefits in addition to those required by law, and in-line with those of the important to appreciate those who build the Company best companies. Benefits are rights of all employees, regardless of work hours. In 2015, to show to on a daily basis. employee staff the set of financial and nonfinancial benefits and remuneration, the Company launched This appreciation involves the consolidation of the career and salary plan, the Programa Nossa Energia the Balanço de Benefícios da Copel – BBC (Balance of Copel’s Benefits), which presents the annual amounts received by employees. [More information in the indicator G4-LA2 in the Content Index]. 28 (Our Energy Program), and the investment of a crucial Professional development Training and retention of employees in critical positions, if not prioritized by management, can become a risk factor for sustainability in the medium-term. In order to mitigate this risk, Copel invests in training and development of its employees, so as to always rely on qualified and experienced professionals, allowing everyone to achieve their potential in an environment that is conducive to advancement in their career and abilities. G4-DMA-EU14 aspect for Copel’s evolution: management of different generations of employees. Pursuant to this guideline, the Anima Program was created in order to implement actions geared toward appreciation of the Company’s Human Capital. Also the listening process was improved through the creation of the “Bate-Papo com o Vianna” (Chat with Vianna), a channel to establish a one-on-one dialogue between the CEO and employees. The idea is to have a candid, open conversation about any topics raised by participants (suggestions, questions and concerns). 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex HUMAN CAPITAL Copel has a Performance Management Program, called Nossa Energia, which is Copel constantly trains its staff, prioritizing those activities that require formed by two pillars: Organizational Competency and Results. This program specific and specialized abilities. These initiatives vary between basic supports functional promotions, meritocracy, functional suitability, conferences, training, intended for certain positions, to graduate courses at specialization training, scholarship for graduate courses, foreign languages, among others. and doctorate levels. Initiated in 2013, the program evolved according to Copel’s Management Performance. The idea is that, at each cycle, the program provides lessons learned and improvements to ensure greater adherence to the Company’s culture and status. In 2015, approximately 99% of the employees received their performance assessment. G4-LA11 training and capacity building G4-LA10, G4-DMA-EU14 Copel has a Corporate University (UniCopel) and training departments in its main wholly-owned subsidiaries, which are responsible for training of the Company’s entire workforce. In 2015, R$ 8.79 million were invested in training and personal development. In all, a total of 2,021 training events were held, with 24,298 participants, totaling 328,196 hours of training, representing an average of 38 hours of training per employee. G4-LA9 Ever since the Company adhered to the Principles of Responsible Management Education - PRME in 2014, UniCopel has developed educational actions based on the principles of this initiative. In 2015, Copel trained 62 members of senior management through an education program conducted by one of the main consulting companies in executive management and education in Brazil. Employees who form the Permanent Committee for the Integrated Corporate These initiatives are organized into corporate programs (education initiatives for the entire Company), basic training (intended for basic training for the performance of functions), mandatory training (courses geared toward certain activities), national and international short-term professional enhancement training courses that provide opportunity for participation in events (seminars, lectures, workshops, congresses, etc.), concerning aspects associated with the business, allowing for sharing of experiences, and the communication of studies and research. The basic training courses are geared toward preparing an employee for a new activity, covering both new and veteran employees, differentiated based on the employee’s career. Among these basic training courses, we highlight FBED - Distribution Electricians Training Program. In this course, a recently hired employee receives the initial training necessary to adequately perform the job: “Operate as an electrician in Copel’s distribution network”. This course has a total class time of 200 hours. The course covers, among other topics, health and safety at work, basic concepts of electricity, theoretical and practical activities in construction, maintenance, and operation of distribution networks, in addition to the normative courses NR 10 - Safety in Electrical Installations and Services , and NR 35 - Working Planning and Corporate Performance Management, as well as all Human Resources in Heights. managers at Copel, also participated, establishing a commitment to continuously seek improvements in personnel management. Other Company managers took an in-company short-duration course geared toward the development and improvement of competencies. Copel has in place the program “Education Allowance”, which reimburses the employee the equivalent to 70% of tuition for graduation and post- 29 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex HUMAN CAPITAL graduation courses, up to a cap of R$ 770.00. The program aims to contribute with growth and development of employees, promoting self-development as a form of talent Pool improving Copel’s performance. In 2015, the program benefited 1,009 employees, reimbursing a total of R$ 3.8 million. Copel fully pays postgraduate courses, for both lato sensu and stricto sensu, through internal processes. This credit can be renewed after a grace period, Copel Distribuição has in place a program called Talent Pool. This program contributes to enssure availability of specialized labor by identifying and developing employees with potential to eventually hold leadership positions. In 2015, a total of 336 potential leaders were identified, and may assume job provided the second postgraduate course is in the interest of the Company. In positions at different levels in the Company. 2015, a total of 32 employees were taking postgraduate courses funded by the Company. Individual Development Plan Copel also has a Foreign Language Program, extended to employees who need another language in order to perform their duties. Within this program, the Company reimburses part of the cost of the course in consideration to the employee achieving performance and learning goals. Copel offers a Pre-Retirement Program (PPA – Programa Pré-Aposentadoria), which includes lectures and activities for employees eligible to retire and their partners, aiming to guide them on this new stage of life. In the last years, PPA’s events The way that Copel Telecomunicações found to prepare its professionals for the challenges of its business was the identification of the necessary competencies for the role, within its processes, and establish individual performance goals based on these competencies. The Individual Development Plan is a tool to help managers develop the strategic plan and corresponding management commitments, in addition to contributing to the development of professionals by offering a comprehensive vision of their training needs. covered topics such as Behavior, Quality of Life, Physical and Mental Health, Social INOV+Get Security and Financial Planning. In addition, employees had the opportunity to participate in workshops sponsored by the Copel Foundation of Social Security on pension plans and received retirement planning advices. In 2015 Copel, in partnership with Copel Foundation, initiated the redesign of the Pre-Retirement Program so that in 2016 the program be extended to all employees, Another form of enssuring specialization of professionals is through dissemination and sharing of experiences, and to this end, Copel Geração e Transmissão promotes sharing of knowledge among its various departments through technical meetings. And, launched in 2015, the INOV+GeT sought to disseminate proposals for new ideas aiming to improve processes at Copel starting from the integration phase until retirement. Geração e Transmissão. 30 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex HUMAN CAPITAL Health and Safety in question. Control of the minimum mandatory training for working with electricity is conducted with a proprietary application that contains information about employees of contractors and of Since it develops activities associated with risk factors, the agreements. Copel relies on an Occupational Safety Policy. The area of Occupational Health and Safety Management (HSE) at Preserving Life Program (PPV): establishes field inspection of the technical and safety procedures Copel is responsible for the identification of these risks and during the execution of activities, pursuant standards of the HSE area, where a technician from the definition of preventive actions allowing for tasks to be occupational safety area, or from departments monitors the teams and issues reports with scores for completed safely. faults encountered. In 2015, a total of 6,025 inspections were conducted in the fields involving own The Company also has a specific manual for contractors, employees and 6,392 contractors, totaling 12,417. included in every services agreement, and conducts At Copel Distribuição, compliance with legal requirements by contractors is monitored through the onboarding lectures for every new agreement, in order to PPV. Given the high employee turnover rate at contractors, and the characteristics of the agreements, complement this effort. More details on G4-EU18 indicator are there is no specific manner to determine the percentage of contractors trained; however, the available in the Content Index. Company adopts as a rule to provide onboarding training on safety to all contractors. Capacity-building and training: programs such as National week for Safety with Electricity Training of Field Inspectors, and Training for the Use of For a whole week, Copel volunteers conduct a series of visits (households, work sites, cooperatives, schools, Preliminary Risk Assessment, are offered to employees. among others) throughout Paraná, offering guidance to the population about the safe use of electricity. Under These courses aim to establish active prevention in the coordination of the Brazilian Association of Electricity Distributors (ABRADEE), the campaign promotes order to identify and block occupational diseases and lectures, distributes information and guidance material to prevent accidents with electrical shock in Brazil, accidents. operating in six main fronts: civil construction, rural areas, trimming of trees, theft of electricity, installation of Promotion of health: Copel has in place an occupational health service that offers employees, through the Copel Foundation, a health plan to conduct diagnostic exams antennas, and care with kites. Performance of the business segments in terms of Health and Safety G4-LA6 for diseases that can affect capacity and productivity at hEALth AND SAfEty CAtEGORy work. Fatalities training and integration: all field activities are Absenteeism rate conducted by contractors who have participated in Lost Time Injury Rate the Occupational Health and Safety Integration, and the exhibit about Risk Assessment for the activities Severity Index NA = Not Available Employees Contractors Employees Employees Contractors Employees Contractors 2014 GEt DIS CtE DIS GEt CtE hOL REN PAR 2015 0 5 2.74 7.35 3.74 587 0 1 1.44 2.95 11.31 0 NA 1.41 2.35 NA 32 927.05 3,603 4,560 NA 0 4 2.48 5.92 5.59 185 3,181 1 2 1.36 4.01 15.41 2,468 0 0 1.65 0 2.26 0 3,338 101.06 0 0 NA 0 0 0 0 0 0 NA 13.09 0 13.09 0 1 0 NA 0 0 0 0 31 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex INTeLLe CTUAL CAPITAL Intellectual Capital G4-DMA-EU8 Copel is recognized as one of the companies that invests most on new technologies in the electric sector. In 2015, the Company created an area exclusively dedicated to this topic. The area of Innovation Coordination will manage the resources for the Research and Development program from the National Electric Energy Agency (ANEEL), regulated by the agency, and that today totals more than R$ 120 million of the Company in projects. Reporting directly to the president of the Company, the new area will be in charge of promoting technological development and innovation In 2015 , Copel Telecom sponsored the Startup Weekend, one of major technology and entrepreneurship events in the world. Known as the craziest 54 hours in life of any entrepreneur, Startup Weekend brings together professionals who meet on a Friday night with ideas and end up on Sunday with business models. This meeting has already taken place in over 600 cities around the world, in more than 100 countries, and is run in all areas of the Company, generating new products, services, and processes, or locally by volunteers. renewing them. Among the responsibilities of the innovation coordination are the reformulation of policies and strategies for new technological developments; governance of research, development and innovation; management of the innovative project portfolio; establishment of new technological partnerships; management of multidisciplinary human resources; open innovation and generation of new innovating businesses. Starting in 2016, the Company will add an R$ 19 million per year to the portfolio in order to leverage new investments and partnerships to conduct the projects. In order to leverage the preparation and development of research, development, and innovation projects - R&D+I, Copel authorized the employees involved in these projects to work overtime up to a limit of 20 hours per month, respecting the limits of total hours foreseen in the project and according to norms defined by the National Electric Energy Agency (ANEEL). Research & Development G4-DMA-EU8 Through its R&D program, Copel promotes the engagement of the scientific community and interaction with research institutions. In 2015, Copel invested 32 R$ 28.6 million, approximately 12 million more than in 2014. The R&D projects conducted by the Company provide opportunities for researchers to improve their professional and academic training, and institutions to advance their technology through laboratory facilities. The results seek the evolution of research and scientific knowledge on important aspects of the electrical sector, which ultimately reflect upon social development, benefits, and improvement in the quality of life for society as a whole. 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex INTeLLe CTUAL CAPITAL Investments in R&D RESOURCES INVEStED IN tEChNOLOGICAL AND SCIENtIfIC RESEARCh AND DEVELOPMENt R&D (IN R$) By topic of research EE - Energy Efficiency FA - Alternative sources for power generation MA - Environment OP - Operation of the Electric Power Systems MF - Metering, billing, and fighting commercial losses PL - Planning the Electric Power Systems QC - Quality and Reliability of Electric Power Services SC - Supervision, Control, and Protection of Electric Power Systems SE - Safety OU - Other Management Project 2014/2015 Total Brand DIS GeT 450,131.02 709,133.79 1,608,373.99 1,696,205.97 638,610.20 4,573,375.29 1,920,721.90 1,239,109.14 714,896.28 13,550,557.58 35,064.00 1,409,433.20 1,796,429.74 4,340,972.50 1,299,700.86 333,970.59 2,281,212.63 2,587,047.83 975,152.89 15,058,984.24 Website and presence on social networks We have diversified our channels, expanded our presence, and today we are on social networks: YouTube, Facebook, Twitter, LinkedIn and Instagram. We speak, listen, and above all, open a space where we can talk with our clients. More than simply clients, conscious and informed citizens about our products and how to make the best use of it. From the series of inspirational videos “Atreva-se a Mudar seu Mundo” (Dare to Change Your World) which tells a little of the life of our employees engaged in volunteer work, to the daily services, and business hours, on Twitter and Facebook, with 95% services in less than 20 minutes after Copel participates in the lives of 10 million people on a daily basis. At home, at work, contacting. We maintain two dedicated teams in schools, and on social networks. A company that evolved, understands, serves and that are alert to everything involving our brand, is present also on the Internet. We are not simply providers of two essential services our services, and our operation in the 10 states such as energy and Internet connections, we turn our strategy on social networks into where we operate. Information and services are a link to take educational content to children, information about the efficient use of also available through our website, which in 2015 energy, and tips about consumption and safety involving our product. recorded 33,772,650 visits to the home page. the largest company in the state of Paraná Copel leads the ranking of the largest companies in the state of Paraná, according to the “500 Maiores do Sul - Grandes&Líderes”, published by the economics and business magazine Amanhã, in partnership with PricewaterhouseCoopers (PwC). The ranking is prepared based on an exclusive indicator created by PwC and Amanhã, called Valor Ponderado de Grandeza (VPG) (Weighted Size Value), which assigns weights to financial statement information about net equity (50%), net revenue (40%) and profit or loss (10%). In the ranking of the Southern region, Copel is the fourth largest company, and ranks first in the energy sector. In all, the state of Paraná has 182 companies among the 500 largest companies in Brazil’s southern region. The soundness of the brand on social networks monitored via a SCUP tool gives us the reach of Copel’s presence: there are approximately 3,000 comments per month, of which 13.05% are negative, 12.51% are positive, and 74.43% are neutral. In the overall assessment, the brand has an 87% positivity. 33 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL Social and Relationship Capital The continuous success of Copel’s business model depends on various audiences with which the Company interacts - shareholders, clients and consumers, suppliers, government, and communities. Our competitive advantage stems from the quality of the relationship and reputation built with these audiences. Copel Distribuição’s client profile G4-EU3 our Suplliers G4-12 Copel’s Suppliers Companies that make projects, provide consulting services and work in power plant and transmission line projects. • generators and marketers of electricity • suppliers of materials and equipment • services providers 1% Government Public Lighting Public Service Own Consumption 0% 80% 9% 8% 2% 1% + 4,4 million clients Supply energy to clients 3% 3% 4% 9% 27% the Best Distributor in Latin America and Caribbean (Silver category) - CIER Award the Best Distributor of Brazil according to its clients - Abradee Award in the “Customer Evaluation” 2% 29% 23% Client satisfaction level obtained through ABRADEE ISQP survey G4-PR5 Residential Government Industrial Public Lighting Commercial Public Service Rural Own Consumption • Residential Group B: 88.6% • Non Residential Group B: 86.5% • Large Clients (Group A) 78.6% Copel is ISQP benchmark in 2015 Generation Transmission Distribution Consumer 34 Suppliers of fiber optic network equipment and materials. Telecom Breakdown of expenditures with Copel’s suppliers G4-EC9 OPERAtION ExPENDItURE wIth SUPPLIERS ExPENDItURE wIth LOCAL SUPPLIERS % Distribution 1,486,519,377.86 Generation and Transmission 4,020,519,256.40 Holding Telecommunications Total 41,345,832.15 158,098,571.23 820,129,012.96 55% 3,104,319,514.03 77% 33,907,389.15 82% 84,128,056.18 53% 5,706,483,037.64 4,042,483,972.32 71% 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL Relationships with Clients and Consumers G4-PR5 Copel’s relationship with its clients in all segments is grounded on the search for excellence in services. Focusing on the high levels of satisfaction, Copel’s main actions referred to network maintenance to ensure the quality and continuity of supply, investments to develop new relationship channels, in addition to improvement in The Company monitors the Satisfaction Survey from ANEEL and also conducts its own survey, hired the existing channels, both through training of attendants through the Brazilian Association of Electric Power Distributors (ABRADEE). These surveys allow for a and in the required technological evolution of each of the comparative study with other distributors and are conducted with three client groups: Group B of urban relationship channels. residential clients, Group B of industrial and commercial clients (trade and services), and Group A. Surveys conducted by ABRADEE generate the ISPQ, a Brazilian acronym for Satisfaction Index for Perceived Quality. The results cover five aspects: Supply of energy, information and communication, energy bill, client services, and Company image. Copel also conducts a satisfaction survey with its rural clients, since they are not included in any of the aforementioned scopes. G4-PR5 LEVEL Of SAtISfACtION ASSESSMENt Of COPEL DIStRIBUIÇÃO ISQP – Satisfaction Index for Perceived Quality Measured by ABRADEE, this index measures electric power distribution companies in the perception of consumers in five aspects: Supply of energy, information and communication, energy bill, client services, and Company image. ISC – Consumer Satisfaction Index Measured by ABRADEE through the weighted results in the areas of quality and price. Low tension residential Low tension nonresidential High tension Low tension residential Low tension nonresidential High tension 2013 2014 2015 89.4 88.6 87.6 64.1 66.5 66.7 89.3 85.6 86.3 63.5 69.0 58.6 88.6 86.5 78.6 60.6 63.1 * Throughout 2015, new service solutions were implemented: • Copel com Você: personal service in small cities in partnership with local trade establishments. • Creation of ISO Comercial: ISO certification for the commercial process involving more than 3,400 people throughout the state of Paraná. • Portal Imobiliário: exclusive service channel for real estate agencies. • Copel Mobile: inclusion of new functionalities and service channel for smartphones and tablets. • Duplicate of the bill at the branches: implementation of a password system exclusively to request a duplicate of the bill, in order to reduce service time at branches and service centers. • training: focus on services with large numbers of nonconformities in order to remediate the problems IASC – ANEEL Consumer Satisfaction Index Measured based on a survey by ANEEL, conducted since 2000, of residential consumers in order to evaluate the level of residential consumer satisfaction with the services provided by electric power distributors. 61.97 75.24 60.26 reported. Rural Client Satisfaction Survey *There was no sufficient data for ISC estimation for High Tension group. Not conducted Not conducted 77.89 35 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL Complaints The distribution business follows two indicators for analysis: Equivalent Frequency of Complaints (FER, in the Brazilian acronym), which maps the number of well- founded complaints for each 1,000 consumer units, and the Equivalent Duration of Complaints (DER), which establishes an average response time for well-founde complaints in hours. G4-SO11 COMPLAINtS RECEIVED fER DER 2013 2014 2015 14,163 11,077 17,592* 10.33 7.64 7.21 273.02 120.82 126.89 *In 2015, a total of 17,592 complaints and grievances were handled, in addition to 243 grievances recorded in 2014. In this business area, the quality of the service channels and the standardization of procedures associated with receiving and handling complaints, certified by ISO 9000, are also monitored. Another initiative is the annual survey of Satisfaction of Complaining Client, which measures the ease of contact, the clarity of the information provided, the friendly attitude of the service, the observance of the schedule to respond, and the meeting of expectations in terms of the response to the complaint. Compensation for consumers The main differentiating factor between Copel telecomunicações and competitors is that it is the only one on the market to offer services with 100% optic fiber technology, the best technology available for the transmission of images, data and voice, with the least signal attenuation and interference, ensuring a service with greater availability, quality and speed in transmission. The level of client satisfaction with the services received at the call center was 96.2% in 2014, and 90.19% in 2015. G4-PR5 Acess to Energy G4-EC8, G4-EU23 Energy rates represent a direct impact upon the economy for consumers, regardless of the rate category. Differentiated rates for certain class of consumers yield direct and indirect positive financial impact. Copel, in line with public policies, in performing its social role in partnership with the federal, state, and municipal governments and associated agencies, promotes various integrated programs to make energy available to everyone. The Social Rate for Electricity (TSEE) offers discounts for electricity consumption of up to a limit of 220 kWh to families registered in the Federal Government’s Social Program Registry, provided other provisions set forth in ANEEL Resolution 414/2010 are met, thereby resulting in savings for consumers. In case of disturbances in the electric system that caused damage to equipment, assets, products, animals and people, Copel ensurers consumers their right to compensation. Pursuant to a request from ANEEL, at the end of 2015, Copel, as well as With preestablished procedures and deadlines, a consumer records his/her request the other energy utilities throughout the country, reregistered consumers and receives compensation for their goods when failure in the electric supply system benefiting from TSEE. There are a total of 406,000 consumer units is confirmed. This is a way of ensuring to clients the quality of the energy supplied, the associated with the TSEE and, after validation, 242,000 units remain with safety and reliability of the services offered by the Company. the regularized benefit. 36 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL The fraternal Light Program (Programa Luz fraterna), of the state of Paraná pays lightbulbs for more efficient ones (florescent and LED), replacement of the bills for consumers registered at the TSEE, provided that consumption does 12,000 refrigerators for the ones with the Procel energy savings seal, and not exceed 120 kWh - in an initiative that represents a positive financial impact 10,000 conventional electric showerheads for showers that use a heat for low-income consumers, who are exempt from expenses for electricity. In 2015, recovery system. These actions seek to engage the community in the area the state government paid a total of nearly R$ 36.6 million, benefiting an average of concession with actions to conserve natural resources, especially energy. were held, 50,000 energy diagnostics, replacement of 150,000 incandescent 136,000 families per month. The Nighttime Irrigation Rate Program and the Nighttime Rural Rate Program projects, where consumers can present proposals for energy efficiency promote the increase in agricultural productivity through a discount of 60% projects to be financed with resources from PEE. Consumers from the to 70% in the energy rate used for production, in the period between 9:30 PM industrial, residential (condos), trade and services, public authorities, or and 6 AM. Lower amounts on the energy bill directly reflect upon a reduction in rural, public services, and public lighting sectors can participate. In 2015, production costs allowing for an increase in income of rural producers. In 2015, R$ 12 million were allocated, and 11 proposals were approved, totaling R$ Copel Distribuição also conducts annual public calls for energy efficiency approximately 4,100 farmers benefited from the Nighttime Irrigation Rate and 11.97 million. 9,794 rural consumers benefited from the Nighttime Rural Rate Program. Eficient use of energy G4-DMA-EU7 The Energy Efficiency Program (PEE) promotes efficient use of energy through the application of financial resources set forth through Law No. 9,991/2000, and ANEEL Normative Resolution No. 556/2013. Through the PEE, Copel Distribuição carries out the project “Copel in the Community”, which aims to develop initiatives for low-income consumers who benefit from the Social Rate for Electric Power (TSEE). This project includes lectures about safe and efficient consumption of electricity, energy diagnostics, and replacement of incandescent lightbulbs for more efficient ones, to all beneficiaries. Also in 2015, the first edition of the “Copel Lar Eficiente” (“Copel Efficient Home”) project was held to benefit residential consumers. Through this project, held in partnership with Lojas Colombo, winner of the bidding process, a 45% bonus was granted for the replacement of old appliances (refrigerators or freezers), for more efficient ones. Additionally, 18,000 efficient lightbulb kits were made available at a cost of R$ 1.00 each. Each kit contains five light bulbs (four fluorescent lightbulbs and one LED lightbulb), to replace the same number of incandescent bulbs. Based on the results of the energy diagnostics, a selection of consumers is made Energy Saved (MWh/yr) 34,464.92 10,476.88 30,618.57 to replace refrigerators and showerheads for more efficient equipment. At the end of the most recent edition of the project (Copel in the Community 4), 500 lectures Peak Demand Reduction (kW) 15,714.41 3,112.76 14,064.10 ENERGy EffICIENCy 2015 2014 2013 37 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL Suppliers Management From a corporate sustainability standpoint, best practices among companies depend works and services. Noncompliance generates suspension of the agreement on the adoption of social and environmental criteria in procurement, as well as an and inability to participate in new bidding processes for the Company for a effective work to develop suppliers, especially small and midsized suppliers. period of two years. Critical suppliers Copel has maintained, since 2005, a permanent working group to technically support the implementation of strategies and initiatives that allow for improvement in the Copel considers suppliers to be critical when their supplies represent a supply-chain management. significant risk for the business in terms of the following aspects: legal, financial, environmental, occupational health and safety, safety of the This alignment can be perceived from the selection of suppliers, monitoring and population, image of the Company, perception by client and society, and of renewal of contracts, and requires that all members of the supply chain respect the processes involved. human rights, the environment and fair labor relations, and promote corporate ethics and transparency. Qualification and selection G4-EN32, G4-LA14, G4-hR1, G4-hR10 The methodology adopted by Copel to identify these services focuses on the assessment of the three sustainability pillars: economic, environmental, and social. Each of these dimensions, as well as the scope, receives a score referring to the likelihood and severity of the occurrence. 38 As a quasi-public Corporation, Copel is subject to Law No. 8,666/93 and Paraná State Law No. 15,608/2007, which restrict selection actions. Nevertheless, the Company adopts as its main criteria in selecting suppliers the compliance with labor, human rights, fiscal, and environmental legislation. The criteria is defined in the call for bid, contract provisions, supplier registration manuals, technical standards and manuals permanently available online to interested parties. hiring and monitoring G4-EN33, G4-LA15, G4-hR11, G4-SO9, G4-SO10 In 2015, contract and fiscal managers were trained on the topic of Management for Sustainability in the Supply Chain, empowering them for the process to evaluate and monitor suppliers. The goal to map Critical Suppliers for Copel Geração and Copel Telecomunicações in 2015 was not totally reached, since the need to review the methodology and to make relevant adjustments for these businesses was noted. Based on the revised methodology, the goal to identify the group of critical suppliers is expected for 2016 for the Generation, Issues related to social and environmental aspects, human and labor rights, are Telecommunications, and Holding businesses. Given the change in addressed by Copel during the onboarding process, conducted with each new methodology, the group of suppliers of the Distribution unit will also be supplier, and covered through specific clauses in the purchase agreements for reassessed. 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL training and engagement Relashionship with Communities In 2015, five meetings dedicated to Copel suppliers were held in order to address sustainability in the supply chain. The aspects were chosen through a formal survey with suppliers, resulting in the following events: • Management for sustainability - indicators, assessment, and monitoring of corporate sustainability aspects (ISE, ETHOS, GRI) – in Cascavel and Curitiba; • Appreciative dialogue “Structuring of COPEL’S Sympathetic Value Network” and “Climate change and GHG accounting” – in Curitiba; • Sustainability platforms and incorporation of sustainability aspects into business strategies - October 2, 2015 - VI COPEL SEMINAR ON S U S T A I N A B I L I T Y : T h e C o m p a n y a n d i t s r o l e f o r a s u s t a i n a b l e The existence of a solid basic services infrastructure, such as energy and telecommunications, leverages the social and economic development of the regions. This infrastructure favors the appearance or expansion of industrial and business centers, and consequently expands the supply of jobs and taxes, resulting in benefits and services for the population, thereby contributing to improvement in satisfaction and strengthening the relationship of trust. Management of impacts Assessments of impacts upon communities are conducted in studies carried out during the environmental licensing of each project. These impact assessments are measured according to the characteristics of the location and project. Through the implementation of environmental programs, negative impacts are mitigated, and positive impacts are strengthened, jointly developed with the communities affected, municipal authorities and w o r l d - C u r i t i b a , P R ; local leaders. • Processes for assessment, selection and identification of risks in The Colíder hydroelectric plant, which is being installed in the state of suppliers based on social and environmental criteria – in Curitiba; Mato Grosso, has a website for the community to access all reports produced by these programs, containing information associated with the project, in • In addition to dedicated events, suppliers were invited to participate in addition to acting as an open communication channel with the community. the Copel Seminar on Sustainability, promoted annually by the Company, G4-SO2 where suppliers are awarded for outstanding labor, environmental, and human rights practices through the Susie Pontarolli Award. Learn more about the Sustainability Seminar on the Company’s website. Cases of displacement are evaluated through a Social and Environmental Registry. Whenever a situation of social vulnerability is identified, Copel provides a family resettlement process and social compensation for damages for the installation of projects. Social Compensation consists in enabling the affected family to be relocated to an area that is similar to or better than the previous area, and to recover the economic status they had prior to the development. Additionally, properties undergoing condemnation are compensated. G4-DMA-EU20 39 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL Impact generated by new projects in 2015 Lt 500 kV Araraquara - taubaté G4-EU22 Colíder Hydroelectric Plant / TL Exclusive Assis Substation compensation for 75 people, R$ 3,813,172.50 impacting 28 cities in the state of São Paulo. As a measure to mitigate social Physical displacement of 9 people and economic impacts, the Company conducts, among other measures, a Social Compensation Program that offers support for relocation and R$ 7.6 million in taxes generated for municipalities affected compensatory measures associated with the loss of economic activity Copel is currently working on the installation of a 356 km transmission line, by the non-landowner population affected by the right of way of the TL. Governador Ney Braga hydroelectric Plant Additionally, regular visits are carried out in the communities affected and In 2015, Copel initiated the monitoring process for the organization of associations a transparent communication channel with the Company is established. Four additional programs intended for local communities are ongoing. in the Resettlement Communities of Segredo I, II, III and IV. This work partially addresses the conditions set forth for the renewal of the environmental license for Distribution Networks the GNB hydroelectric plant. The population resettled will be monitored through this process by social and environmental analysts from different areas. The hydroelectric plants of Governador Ney Braga and Governador Bento Munhoz da Rocha Netto, also have visitation structures and communication of best social and environmental practices. Every year they receive thousands of visitors, such as the Regional Iguaçu Museum, and the Visitor Center of Faxinal Botanical Gardens, which are installed in the Residential Villages of the Plants. transmission Lines The most significant social and environmental impact of the distribution network (low tension and 13.8 and 34.5 kV) are accidents with third parties, management of vegetation under the power lines, and interference with the urban landscape. In order to mitigate these impacts, Copel adopts alternative technologies for the networks, such as the protected compact network, standalone secondary network, standalone network, underground network, and the Urban Forests Program. wind Power Generation Installation of transmission lines has impacts on the communities where Copel operates. Properties and residents are affected by loss of land and production, established via right of ways, as well as the modifications in the natural landscape of the location. Mitigation of impacts is achieved through a compensatory For construction of wind power generation projects, significant direct and indirect negative impacts upon biodiversity are reduction in species of flora, and risks of accidents with birds, which are mitigated through the implementation of environmental programs. remuneration to landowners for their losses. Investments in local development In 2015, Copel invested in infrastructure and services to generate benefits in the communities where it operates. These investments totaled R$ 5.9 million and are 40 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL listed on the specific indicator G4-EC7 of the GRI Content Index. Indigenous communities G4-HR8 In order to arrive at the Indigenous communities located in the environmental conservation units or other areas where the implementation of a power distribution network is not viable, Copel developed projects that involve new power connections, efficient use of electricity, installation of solar panels in villages located on the coast, and new power connections The initiatives for education on sustainability can be found in the sustainability section of the Copel website, which also offers educational and informative material, such as primers, educational games, and several publications that address issues associated with efficient and safe use of electricity, issues on citizenship, human rights, and protection of the environment. for inland communities. In recent years, the Company has allocated more than R$ 6 million Other questions can be answered through the Fale Conosco (Talk to Us) - for projects developed in 28 Indigenous areas in the state of Paraná. In 2015, a total of Sustainability, a direct channel established by Copel with the population 669 Indigenous consumer units were registered under the Electric Power Social Rate - Low of Paraná. Income, and no cases of violation of the rights of Indigenous peoples were recorded. Education for Sustainability Social Investments through fiscal Incentives G4-EC1, G4-EC7 The project called Iluminando Gerações (Illuminating Generations) aims to conduct Copel supports and participates in several initiatives with government iinformative and preventive lectures for fourth graders in public schools, geared agencies and other institutions, aiming to promote the sustainable toward conscientious and safe use of electricity, use of natural resources (energy development of the regions where it operates. Selection of the initiatives 41 and water), and proper disposal of waste. In order to reinforce the information followed the companies strategic references, commitments assumed with provided during the lectures, kits were delivered to students, teachers and school the Global Compact, and the state of Paraná’s government policy. staff, containing: 2 primers, one about care in using electricity and the use of natural resources, and the other called “Desafio elétrico” (Electrical challenge). In 2015, the program Iluminando Gerações offered guidance on efficient and safe use of energy, and on sustainability to more than 50,000 students in the state of Paraná. Copel Seminar on Sustainability In 2015, Copel held the sixth edition of the Copel Seminar on Sustainability. Through lectures, workshops and a trade show, the Company gave visibility to best sustainability practices in companies, industries, universities, and public agencies. Held in the Oscar Niemeyer Museum, in Curitiba, the theme of the event was “The Company and Its Role in a Sustainable World”, with a focus on climate change, Sustainable Development Objectives (ODS), and ethics. Copel’s investment in 2015, arising out of fiscal waiver, total R$ 16.1 million. The initiatives include the areas of education, culture, sports, and health. AREA Of INVEStMENt AMOUNt % Investment by area in 2015 Culture - Rouanet Law - R$ 7.6 million Education and social initiatives - FIA - R$ 1.8 million - Elderly Act - R$ 1.8 million Sports Health - Sports Incentive Act - R$ 1.8 million - PRONON - R$ 1.7 million - PRONAS/PCD - R$ 1.4 million 47% 23% 11% 19% 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex SoCIAL AND ReLATIoNSHIP CAPITAL Other social initiatives The Iguaçu Regional Museum located on the banks of the largest river of Paraná, in the south-central region of the State, completed 15 years of Since July 1, 2015, clients who opt for receiving their bill via e-mail participate in careful work aimed at guarding and conserving the elements which help the Sympathetic Invoice Project. For each invoice sent by e-mail, Copel donates tell the history of the region. Maintained by Copel, the Museum is located R$ 1.00 to APAE institutions in the state of Paraná. next to HPP Governor Ney Braga. Its mission is to: Copel, through the project Cobrança de Valores de terceiros - CVt, collects • Educate for sustainability through the guard and enhancement of cultural contributions via electricity bills, for participating philanthropic entities. The and environmental memory of Paraná; amounts to be included must have a written authorization from the client. Limits for donations are a minimum of R$ 1.00 and maximum R$ 150.00. In 2015, a total • Raise awareness for the preservation of biodiversity and all forms of life; of 186,000 donators collected a monthly average of R$ 1.5 million, distributed among 108 philanthropic institutions. • Inform and educate about the repopulation of the Iguaçu ichthyofauna and care for the environment , responsible electricity generation and environmental The project Projeto Mais que Energia (More Than Energy) was created in 2014 with commitment. the purpose of implementing, expanding, and consolidating social projects and investment programs for the community. In the first project, the funds originated from the Corporate Social Investment (ISE) line, of BNDES, totaling R$750,000 and support institutions and schools for the deaf and/or deaf and blind. For this In 2015, the Museum attended 12,719 visitors, providing guided scheduled first project, three institutions were chosen. The project is under a bidding phase and spontaneous visits, as well as visits and Museu Itinerante visits. to procure the engineering projects. The program Corporate Volunteering - activities and monitoring of more than 300,000 people who learn about EletriCidadania allows employees to use up Copel’s environment-related activities. Since its inauguration, in December 2000, it was responsible for educational 42 to four hours per month of their work time to carry out voluntary and spontaneous community work, which goes beyond simple charity, taking sustainable development to society in all its aspects, whether cultural, educational, or professional. In 2015, a total of 1,513 hours of volunteer work was done. 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex NATURAL CAPITAL Natural Capital Climate Change G4-EC2 Additionally, the committee defines strategies to disseminate the Climate Change Agenda, and participates and contributes in debates related to climate change in foreign entities. Inventory of Greenhouse Gases Issues related to this topic and the impact upon Copel’s businesses are guided by the Climate Change Agenda. The Company’s senior management incorporated Since 2009, Copel has been preparing its inventory to quantify the emission of commitments in its planning of corporate activities and initiatives. To this end, greenhouse gases pursuant to the methodology set forth by the Brazilian GHG a Corporate Climate Change Management Program was established, headed by a Protocol program. In 2015, emissions from Copel Holding and its wholly-owned management committee represented by employees from every department and subsidiaries were considered. The results can be seen in the table below. subsidiary. G4-EN15, G4-EN16, G4-EN17, G4-EN19 The Climate Change Agenda aims to define Copel’s positioning on this topic, By tyPE Of GAS (tCO2E) SCOPE 1 SCOPE 2 SCOPE 3 develop mechanisms that allow for the identification of opportunities and risks associated with the businesses, in addition to promoting innovation in technology and processes to drive reduction in greenhouse gas - GHG emissions. The committee monitors those commitments approved by senior management, CO2 CH4 N2O HFCs SF6 Total 227,380.32 448,062.03 136.18 1,199.11 1,017.78 1,785.76 0.00 0.00 0.00 0.00 231,519.15 448,062.03 validates strategic documents related to climate change, assesses risks and Biogenic CO2 (t) 1,805.44 0.00 opportunities, fosters initiatives that contribute to mitigation of greenhouse gases, 879.57 86.08 8.64 0.00 0.00 974.29 0.00 and drives actions to adjust its businesses to the climate change scenario. Scope 1 considered own sources of emissions from stationary and mobile As a member of the Theme Group on Energy and Climate of the Brazilian Network, increase in emissions when compared with the previous year. This increase was from the Global Compact, Copel contributes to the production of the Compact the result of the annual energy production at the Figueira Thermoelectric Plant journal: Clima (Climate), a publication intended for recent debates concerning the (in 2014, the plant reduced production because of a corrective maintenance challenges associated with climate change. operation). Additionally, other sources such as mobile combustion and waste combustion, fugitive emissions, and industrial effluents. There was a 20% The purpose of this material is to raise awareness and mobilize the private initiative to comply with the rules defined in the 21st climate conference (COP21) held in Paris in December 2015. contributed, to a lesser portion, with increase in emissions. Scope 2 considered emissions from consumption and loss of energy. There was a reduction in emissions as a result of the grid emission factor, in other words, there was a reduction in consumption of energy from thermoelectric plants. Commitments approved by the Management Committee associated with climate change can be seen at Copel’s website. Scope 3 emissions considered only air travel. 43 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex NATURAL CAPITAL The inventory was assured by an external entity and subsequently will be Modernization of the figueira thermoelectric Plant: The Company initiated the published in the public records of the Brazilian GHG Protocol program, modernization work in 2015, aiming to increase efficiency and reduce emission of gases and the climate change forum in the state of Paraná. and particulate matter resulting from the burning of coal. The plant has an installed Research and Development to Adjust Companies to Climate Change and Carbon Market In 2015, Copel joined the Companies for the Climate (Empresas pelo Clima - EPC) platform, an initiative of the Center for Sustainability Studies (GVces) of the Getúlio Vargas Foundation that promotes and debates practical solutions for environmental problems, seeks new management models and reduction of GHG emissions, in addition to participation in the creation of new public policies. In order to incorporate assessment concepts of the lifecycle in capacity of 20 MW, and the modernization process should be completed by September 2016, representing investments of R$ 55.6 million made up to December 31, 2015. Eco-efficiency Conscious consumption is part of Copel’s everyday life. For this reason, the Eco-Efficiency Program was created aiming to reduce consumption of natural resources, reduce costs and raise awareness among employees concerning the environment, and businesses, the foundation initiated a pilot project in the Greenhouse Gas concerns with future generations. Emissions category, in the construction of its wind farms, which will allow for calculation of the carbon footprint during the construction and initial operations of the wind farm. This project should be completed in 2016. Aiming to adjust its businesses to the climate change scenario, Copel is developing a research project to evaluate the impact of climate change upon high-voltage distribution lines located in the Northern region of the state of Paraná. The project uses as a reference the maximum estimated temperatures up to the year 2040 to evaluate the effects upon the materials of the distribution line. The project will allow for a review of the technical characteristics of the project, avoiding system overload and minimizing shutdowns. Within the EPC platform, Copel works together with two other companies for this adjustment study, strengthening the low carbon economy, and the Emissions Trading System, which simulates the GHG emissions model “cap-and-trade”, representing the first initiative of this nature in Brazil. The working group, established since 2014, coordinates and monitors the activities of this corporate program, working in the following aspects: water, energy, paper, 44 mobility, and fuels. In 2015, initiatives were carried out to reduce water and energy consumption in Copel’s largest administration buildings. Concerning water consumption, a 5% reduction was achieved compared with the baseline year of 2014. The goal for 2016 is to maintain a 5% reduction compared with 2015. In terms of energy consumption, the goal to reduce consumption by 10% was not reached. The goal was reviewed in order to reduce by 10% energy consumption by 2019. To this end, investments in energy efficiency are being planned. Furthermore, throughout the year, several awareness campaigns were conducted providing information to the workforce. For the coming years, the program will continue working to reduce consumption of inputs and natural resources. Specific actions are already planned to reduce consumption of paper and improve employee mobility. Learn more: 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex NATURAL CAPITAL Mobility In order to reduce fuel consumption and promote the use of more sustainable means of transportation, bicycling activities were promoted in 2015. The first of these activities had the participation of the CEO and one of the Company’s directors. Along a 90-km route, a group of employees rode between two of Copel’s largest plants. In the second event, to celebrate the World Car Free Day, a group of employees from Curitiba gathered to ride their bikes together to work. Power Bike Launched on the World Car Free Day, this initiative allows for lending a power bike to employees for their commute from home to the office, for example. fuel Consumption G4-EN3 Below are the amounts corresponding to fuel consumption for the Company. tyPE Of fUEL UNIt CONSUMPtION Coal (Figueira plant) Diesel** LPG*** Ethanol Gasoline CNG Aviation gasoline Total GJ GJ GJ GJ GJ GJ GJ GJ 2,079,460.80 173,968.26 123.04 5,506.37 47,316.70 1.68 2,826.79 2,309,203.64 * Coal is used for energy generation by one of the power plants. ** Diesel used for transportation and for emergency power generators *** LPG consumed by fork-lifts and kitchens The idea was so well received that five additional power bikes are planned Ethanol, gasoline, GNV and aviation gasoline are used by own fleets for 2016. Energy Consumption G4-EN3 water Consumption G4-EN8, G4-EN9 In 2015, Copel’s total water consumption in the administration units located in the state of Parana was 133,134 m³. Copel’s total energy consumption in 2015 was 854,013.6 GJ, considering the scopes for Generation, Transmission, Distribution, Telecom, and Holding. SOURCE Of wAtER ADMINIStRAtIVE CONSUMPtION M³ The table below shows the electricity consumption for Copel in 2015. ELECtRICIty CONSUMPtION (Mwh) Purchased electricity Self-generated electricity Copel Distribuição S.A. Copel Telecomunicação S.A. Holding Copel Geração e Transmissão S.A. total 23,416 527 56 8,494 32,492 0 0 0 204,734 204,734 Underground sources Rainfall sources Municipal supply 24,193.00 138.00 108,803.00 In 2015, a total of 107,606,193 m³ of water from ground sources was withdrawn, which was used for cooling at the plants. The volume of water returned to the body of water is practically the same as the volume withdrawn, since only an immaterial volume was lost through evaporation, and was not considered as water consumed by the Company. 45 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex NATURAL CAPITAL waste G4-EN23 Copel adopts certain criteria to manage waste generated in its activities pursuant to the standards and policies in force. In 2015, the Company sent to a final destination recyclable waste from the administration (State Decree No. 4,167/2009). The program is conducted in partnership with associations and material recycling cooperatives and aims to contribute with income generation and improve working conditions for pickers. 26,556 tons of waste, 31,430 light bulbs, 27,688 crossbars, and 318,136 m of poles, in In 2015, this partnership resulted in the final destination of 102 tons of addition to a variety of materials and equipment. Reuse and recycling of this waste, recyclable waste. In the city of Curitiba alone, this represented revenue in conducted through a disposal process, generated revenue of approximately R$ 10 excess of R$ 24,000 for the waste pickers associations. The goal for Copel million. wAStE UNIt AMOUNt REVENUE (R$) Ash Electronics and lighting Miscellaneous equipment Isolators Fluorescent lamps Insulating Mineral Oil Tires Contaminated waste Acid-lead battery scrap Meters Crossbars Miscellaneous materials Poles Transformators Tons Tons Unit Tons Unit Tons Unit Tons Tons Tons Unit Tons m un 20,924 89 4,488 736 31,430 89 917 107 34 88 27,688 4,489 318,136 8,445 - 90,085 676,375 25,340 - - 11,346 - 70,010 224,875 91,682 7,375,292 616,897 868,668 For 2016, Copel has the following goals: • 90% of the industrial waste from Distribution sent for reuse or recycling; • 70% of the industrial waste from Copel Geração e Transmissão sent for reuse or recycling; • 50% of the ash generated in the Figueira thermoelectric plant sent for recycling. by October 2016 is to send to recycling, via the selective waste collection program, administration waste generated by 65% of the employees. wAStE UNIt AMOUNt Metal Paper Plastic Glass Total Tons Tons Tons Tons Tons Ecosystems G4-EN12 5.2 81.9 13.6 1.5 102.2 The implementation and operation of projects cause direct and indirect negative impacts upon wildlife and flora located in the area of influence. Environmental studies developed before the installation phase assess and classify these impacts, aiming to propose the social and environmental programs necessary to mitigate the negative impacts and to strengthen the positive impacts. For the construction of hydroelectric generation projects, the significant direct and indirect impacts on biodiversity are: • Reduction in the number of important species in the local ecosystem, resulting from suppression of vegetation in the flood basin; • Conversion of the habitats, resulting from the river dam for the creation Copel maintains a Sympathetic Selective Waste Collection program to dispose of of the reservoir. 46 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex NATURAL CAPITAL • Changes in ecological processes outside the natural variation range: as a result Valuation of Ecosystem Services of the river dam for the creation of the reservoir. In order to mitigate the impacts caused by the hydroelectric generation Trends (TeSE), of the FGVCenter of Studies in Sustainability (GVces), aiming projects, vegetation suppression programs are implemented, monitoring and to incorporate these concepts into its businesses. In 2015, the initiative rescuing wildlife and flora species, recovering of permanent preservation areas, identified the main ecosystem services associated with its businesses and is replacement of forests, monitoring and recovery of archaeological heritage, developing a pilot project to value ecosystem services in the riparian forests among others. at the Governador Bento Munhoz hydroelectric plan. In 2015, Copel adhered to the Corporate Initiative in Ecosystem Service For the construction of wind power generation projects, the significant direct and G4-EN13, G4-EU13 indirect negative impacts upon biodiversity are the reduction in species of flora, In 2015, Copel held in the state of Paraná environmental compensation and risks of accidents with birds, which are mitigated through the implementation through donation of seedlings to be planted by third parties. Throughout the of environmental programs. same period, 8,894 native forests seedlings and 671 urban forest seedlings were supplied, as environmental compensation for felling of vegetation in 47 For the construction of transmission and distribution projects, the significant distribution lines. direct and indirect negative impacts on biodiversity are: reduction in species of the flora, resulting from suppression of vegetation in the right of way. Mitigation of these impacts begins during the planning and licensing phases of the project, through detailed and multidisciplinary studies of alternative routes with minimal impact, prioritizing the use of areas previously altered where environmental and social fragility is smaller. For those locations where it is imperative for the route to cross given areas where vegetation is more preserved, towers are heightened in order to preserve the areas located in the right of way of the lines. Environmental programs implemented include forest recovery, preservation of slopes in areas with fragile soil and water springs; recovery of wildlife and flora, among others. In other environmental initiatives conducted by Company employees, 200 native forest seedlings and 275 tree seedlings were planted in the state of Paraná. For environmental compensation of the transmission lines, 41,714 native seedlings were supplied and planted in 21.57 ha of third-party areas. In the state of Rio Grande do Norte, 3 ha of forests were planted as environmental compensation for the suppression of vegetation for the construction of the GE Farol wind farm. For the other wind farms implemented in that state, compensation was financial. 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex NATURAL CAPITAL Since 2012, Copel has maintained an agreement with IAP - Instituto Ambiental and produced are the Jundiá (Rhamdia quelen), Lambari (Deuterodon) and do Paraná (Paraná Environmental Institute), where third-party service centers are the Surubim-do-iguaçu (Steindachneridion melanodermatum). offered to work exclusively in the production of native forest seedlings used in the restoration of Permanent Preservation Areas, Legal Forest Reserves, and Forest Recovery Areas in the state of Paraná. In 2015, a total of 139,000 fish were released, and this number represents the number of fish produced in the Company’s fish station. In 2016, the goal is to produce and release 87,600 fish in the reservoirs of the Copel plants. To offset the impact of its projects upon biodiversity, Copel acquired and transferred to environmental agencies the following conservation units: Copel’s repopulation initiatives are reflecting an increase in the population of the Surubim-do-iguaçu - an endangered species. • Rio dos Touros Ecologic Station (Governador Ney Braga hydroelectric plant), created in 2011, covering 1,231 hectares, in the city of Reserva do Iguaçu, PR; Urban forest Program • Tia Chica Ecologic Station (Derivação do Rio Jordão hydroelectric plant), covering 423 hectares, in the city of Pinhão,PR; Since 2007, Copel has supported municipal governments in planning afforestation of public roads, contributing to • Rio Guarani Stae Park (Governador José Richa hydroelectric plant), created in the environmental improvement and reduction of energy 2000, covering 2,322 hectares, in the city of Três Barras do Paraná, PR; supply interruptions caused by the conflict between trees • Lago Azul State Park (Mourão hydroelectric plant), created in 1997, covering 1,749 hectares, in the city of Campo Mourão and Luiziana, PR. All Protected Areas created by Copel have similar or higher biodiversity characteristics than the locations affected through installations of projects subject to compensation. Initiatives for Preservation of Biodiversity Ichthyofauna and electrical systems. An initiative of this program is the production of seedlings in the Company’s own forestry gardens, which, in addition to catering to the interested municipalities, addresses compensatory measures. Through this program, 35,000 seedlings have been planted in afforestation of public roads. Before 2014, supply of municipalities was done through agreements. Difficulties in management and execution of activities justified suspension of initiatives and the need to assess new forms of operating in partnership Copel monitors the ichthyofauna in all its reservoirs and promotes the free population with municipalities to replace trees and plant new trees that were compatible of fish in the Iguaçu River basin, which is the main river in the state of Paraná. with the electric systems. Since 1992, the Company has maintained an Ichthyofauna study station located The program was reformulated in 2015, improving the form of transfer of in the reservoir of the Governador Ney Braga Hydroelectric plant. In the station, studies of the behavior of the ichthyofauna are conducted in order to select the most suitable native species for reproduction and repopulation. The main species studied seedlings suitable for urban areas and changing the target set in 2014. The new procedure for supplying seedlings was launched during Arbor Day 48 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex NATURAL CAPITAL (September 21), with procedures initiated with the supply of seedlings in 2016. The Management of the Reservoirs goal is to supply 12,000 seedlings to at least 25 municipalities through initiatives to be developed and produce 70,000 native plants suited to urban forestry. In the reservoirs and surrounding areas, Copel monitors possible The Company also promotes professionalization of the afforestation team by address irregularities found in terms of release of effluents, stability of the holding courses on training and qualification of managers and municipal workers in slopes, use and occupation of Permanent Protection Areas, illegal hunting environmental interventions and acts pursuant to specific initiatives to the state of Paraná. Since 2014, Copel has trained municipal workers and managers, and fishing, among others. and the goal is to complete this work in 2016. Also this year, project GeoPoda was initiated with the creation of an application environmental interest, the Company has in place an agreement with intended to make a systemic control of trimming of trees in the collection, execution the Environmental Police Battalion of the state of Paraná. Additionally, and inspection phases, gathering information on 89,033 trees in 80 feeders in the the Company actively participates in the Watershed Committees and the In order to help in the preservation process, as well as other areas of municipalities of Londrina, Cambé and Ibiporã. Riparian woods Program Copel promotes reforestation and fencing of Permanent Protection Areas (APPs, in the Brazilian acronym) in own and third-party areas, aiming to recover National and State Water Resource Council, and monitors, in real-time, the status of the water in the rivers where the Company has reservoirs, in addition to monitoring the quality of water. Monitoring water quality Copel’s main impact on water resources is the modification of their natural 49 degraded areas and/or avoid degradation, contributing to improvement in the conditions and the vegetation in the flood basin during construction of quality of the water in reservoirs, inhibiting soil erosion processes and conserving hydroelectric plants. For this reason, the Company works in managing social biodiversity. Seedlings used in reforestation are produced in the Company’s forestry and environmental impact of its projects, from construction up to the operation nurseries. In 2015, a total of 108,606 seedlings of native species were planted, exceeding the goal for 2014, replanting 56.16 ha of forests, and fencing 7.63 km. phase, conducting studies, mitigating impacts and risks, and addressing the applicable environmental legislation. On a quarterly basis, the Company collects and analyzes samples of water from the reservoirs in order to monitor the quality. A total of 25 physical-chemical Seedling production for the Riperian Woods Program and the Urban Forest programs totaled 240,410 seedlings, of which 212,373 were native species for the and biological parameters are monitored. reforestation of the APP (Riperian Woods) and 28,037 for urban forests, reaching Copel also monitors the quality of water of the river before the beginning of 65% of the goal established given contractual difficulties. For 2016, the goal is to the construction of a new project. This monitoring includes, in addition to the produce 213,600 native seedlings for the Riperian Woods Program. parameters already monitored, analysis of sediments and pesticides. 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex INfRASTRUCTURe CAPITAL Infrastructure Capital Assets for energy generation and planning G4-DMA-EU6 Copel operates 30 own plants and participates in six other plants, including 22 hydroelectric, 12 wind farms, and 2 thermoelectric plants, with total installed capacity of 5,630.2 MW, and average Physical Guarantee of 2,622 MW. In 2015, net energy production was 25,659 GWh. G4-EU1, G4-EU2 In order to comply with important strategic and sustainability guidelines established for the generation business, our main purpose is to increase the share of renewable alternative sources of energy in the energy matrix in a profitable and sustainable manner. Today, Copel is building 19 plants that will add 789.8 MW capacity and average 385.6 MW of Physical Guarantee to the Company’s generating complex. To this end, the Company had already invested R$ 2.3 billion by the end of 2015 (of which, R$ 1.9 billion in 2014), of which R$ 2.2 billion in own plants and in consortium, and R$ 83.0 million in capital investment in companies in which Copel has interest. Evolution of the generating complex with gradual beginning of operations of the plants under construction can be represented as follows: Generation Complex - By Source Evolution of the generation complex Expansion of generation through renewable sources G4-13 Copel started the operation of own wind farms in the Northeast of the country, and closed the year with 330.5 MW of installed capacity in 15 wind farms in three different complexes. By 2019, the goal is to achieve 663.6 MW capacity in five complexes, which is sufficient to supply a city with a population of 8 million, or equivalent to the population of the state of Pará. The five complexes will house 28 wind farms, in all, representing an investment of R$ 4 billion. At the end of 2015, Copel announced investments of R$ 2 billion for the implementation of 13 wind farms in the state of Rio Grande do Norte. At the event, an agreement with the Company WEG was signed in the amount of R$ 1.4 billion to supply 149 aerogenerators for the wind parks. Renewal of concessions Concessions for Generation For concessions for generation, a thirty-year extension was granted. Extension was offered to the concessionaire, and adhesion depended, in addition to accepting the anticipation of the original term for the concession, acceptance of the following terms: (i) Remuneration per rate calculated by ANEEL for each hydroelectric plant; (ii) Allocation of physical guarantee quotas for energy and power of the hydroelectric plants to the concessionaire and grantor of SIN’s electric power distribution services, to 50 12% 5% 83% 3% 6% 14% 19% 21% 20% be defined by the regulatory agency, as regulation of the granting power; and (iii) adoption of service quality standards determined by ANEEL. 2014 2015 2016 2017 2018 2019 2020 Thermoelectric Plants Wind farms Hydroelectric Plants Copel Geração e Transmissão, after learning the terms for renewal, made all possible analysis and concluded that it was not feasible to renew, at the time, the concessions for generation in four of its maturing concession 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex INfRASTRUCTURe CAPITAL for plants between 2014 and 2015: Rio dos Patos with 1.8 MW installed capacity, the regulation for compensation for investments not yet amortized and/or Governador Pedro Viriato Parigot de Souza plant, with 260 MW, Mourão with 8.2 depreciated on May 31, 2000, that were called RBSE and RPC. MW, and Chopim I with 1.8 MW. Subsequently, Provisional Measure No. 688/2015, among other topics, altered the conditions for renewal of concession of these plants, which have become object of a bidding process disputed through higher stock bonus to be offered by the concession-holder vis à vis the smallest revenue required. As such, on November On March 30, 2015, Copel Geração e Transmissão submitted to ANEEL a technical opinion for the assessment for reimbursement of these investments, which is pending validation by the agency for subsequent payment by the Ministry of Mines and Energy - MME. 25, 2015, bidding process No. 12/2015 was held, through which the Mourão and Concessions for Distribution Governador Pedro Viriato Parigot de Souza plants were offered. After the bidding process, Copel Geração e Transmissão was declared winner of Lot B1, through which the Governador Pedro Viriato Parigot de Souza hydroelectric plant was offered, thereby renovating the concession of the plant for an additional 30 years. For the Mourão plant, Copel Geração e Transmissão did not submit a proposal. Considering the Chopim I, after termination of the concession, the plant became registered under Copel Geração e Transmissão, pursuant to Law No. 12,783/2013. Rio dos Patos, is under a quota regime, introduced through the same law. Concession for Transmission On June 2, 2015, Decree No. 8,461 was published, which regulated the extension of concessions for distribution of electricity as provisions of article 7 of Law No. 12,783, of November 1, 2013. Through this decree, the MME could extend concessions for distribution of electricity for 30 years, aiming to address the following criteria: I – Efficiency in terms of quality of services provided; II – Efficiency in terms of economic-financial management; III – Operating and economic rationality; and IV – Rate affordability. For concessions for transmission, a thirty-year extension was established. On November 9, 2015, by order of the Ministry of Mines and Energy, the Extension was offered to the concessionaire, and adhesion depended, in addition request for extension was granted, and in the beginning of December 2015, to accepting the anticipation of the original term for concession, acceptance of the fifth contract amendment was executed, formalizing the extension of the the following terms: (i) Revenue established pursuant to criteria defined by ANEEL; Concession Agreement for Distribution of Electricity Services No. 46/1999, and (ii) acceptance of service quality standards defined by ANEEL. up to the end of July 7, 2045. Copel Geração e Transmissão, after learning the conditions for renewal, made The fifth contract amendment imposes conditions associated with service the necessary analysis and assessments, opting for renewal of the transmission quality indicators and economics-financial sustainability, which will be agreements. Nevertheless, the extension failed to consider a series of investments supported through an investment program focusing on automation and made by the concessionaires and that were not reimbursed by the granting power. new technologies, for the full application of rate adjustments approved Consequently, in 2013, Normative Resolution No. 589 was published, establishing by ANEEL, and for implementation of a corporate governance structure to 51 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex INfRASTRUCTURe CAPITAL be defined by the regulatory agency, ensuring protection and individualization of DIStRIBUtION LINES ExtENSION (kM) Copel Distribuição. The Company reiterates its commitment to economic sustainability of the concession and to the continuous investments supported by cost control management, maximization of productivity, and improvement of operational efficiency. transmission and distribution assets G4-EU2 Energy sold (Gwh) -0.7% 24,208 2,381 2,252 5,470 6,838 7,267 2014 24,043 2,371 2,256 5,530 6,929 6,957 2015 Residential Industrial Commercial Rural Other Extension of transmission and distribution lines G4-EU4 transmission The Company operates 3,772.1 km of transmission lines and 38 substations of the basic network with transformation potential of approximately 14,102 MVA. Distribution 13.8 kV 34.5 kV 69 kV 138 kV 230 kV Total 103,488 83,347 695.3 5,867 130 193,527 Efficiency in supply: management of quality and loss of energy Quality and supply, measured through performance indicator of distributors in terms of continuity of services provided, known as DEC (Equivalent Duration of Interruption by Consumer Unit) and FEC (Equivalent Frequency of Interruption by Consumer Unit) showed improvement in 2015 compared with the previous year, as a result of enhancement of periodic maintenance, preventive inspections, performance and expansion of work. G4-EU28, G4-EU29 The goals for the concession agreement for 2016 are: 13.61 (*hours and hundreds of hours) for DEC and 9.24 (interruptions) for FEC. Supply quality indicators 14.01 13.67 11.62 8.92 8.33 8.06 2013 2014 2015 52 Copel’s distribution line has 193,527 kilometers, and in all, it serves more than 4.4 million consumers, in 394 cities in the state of Paraná and one municipality in DEC (hours)* FEC (interruptions) Santa Catarina. 2:08 1:49 2:03 Average waiting time (hours) 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex INfRASTRUCTURe CAPITAL Nevertheless, Copel seeks more challenging goals, establishing 12.25 for DEC and In generation activities, the indicator on average availability of the plants is 8.00 for FEC, in 2016. monitored. The indicator measures the number of hours of interrupted generation. Loss of energy is inherent to the nature of electricity transformation, transmission, and distribution processes. In 2015, overall losses on distribution - technical, non- technical and of basic network - represented 9.6% of the energy injected into the distribution system. This percentage represented a 0.2 percentage point reduction when compared with the previous year. G4-EU30 AVERAGE AVAILABILIty fACtOR 2013 2014 2015 Total number of hours of planned interruption 51,915 71,967.37 42,265 Total number of hours of forced interruption 29,596 36,226.2 36,048 Own hydroelectric plants Hydroelectric plants with Copel's Shareholding Interest 0.94 0.88 0.78 0.94 0.94 0.95 0.64 0.93 0.90 0.96 0.78 0.89 Technical losses, on this same base, registered a reduction of 0.1 p.p. and non- Thermoelectric plants technical losses decreased by approximately 0.3 p.p. in 2015. Thermoelectric plants with Copel's Shareholding Interest Copel Distribuição maintained a program to fight nontechnical losses, which contributed to the reduction of this indicator. Advances in operational excellence at Copel Distribuição The transmission operation, on the other hand, can register losses in the Group A telemetry interconnected system, which are proportionately divided between generators and In 2015, Copel expanded telemetry to consumers of group A. In 2015 there distributors, and determined by the Electric Power Marketing Chamber (Câmara were more than 13,000 telemetry points, corresponding to 92% of this type de Comercialização de Energia Elétrica - CCEE). of consumer. 53 G4-EU12 tyPES Of LOSSES 2013 2014 2015 Overall Loss - Distribution (%) Overall Loss - Transmission (%) Technical Loss - Transmission (%) Technical Loss - Distribution (%) Non-Technical Loss - Distribution (%) 9.9 1.7 1.7 6.6 1.6 9.8 1.7 1.7 6.2 1.9 9.6 1.8 1.8 6.1 1.6 Billing data is obtained automatically, without the need to employ the person to read meters. This improves the quality of the process, eliminates error and adds value, with data availability for internal processes, and via the Internet, to clients. This system is also capable of monitoring use of energy, issuing alarms when abnormal situations occur, detecting problems and irregular procedures in Compared with previous years, losses on the basic network changed, and totals metering, and reducing commercial losses for Copel. suffered losses observed in the basic network of the national interconnected system, 50% prorated to generators and 50% to load agents, where Copel Distribuição has a defined portion given its share of the market. A change in this loss influences overall losses. Smart Grid Paraná project Copel is developing a Smart Grid pilot project in Curitiba called Smart Grid Paraná, cconceived to improve the quality of services and the Company’s 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex INfRASTRUCTURe CAPITAL service capability in the electric system and in telecommunications. The project will Program Mais Clic Rural enable the complete automation of the electric network to: G4-EC1 • Avoid human interference to isolate sections without power and rely on automatic reconfiguration of the system after interruption in supply; Copel will invest R$ 500 million by 2018 in the largest rural electrification project ever developed in the state of Paraná. Launched at the end of 2015, Mais Clic Rural will expand and modernize the electric network in the rural • Measure energy, water, and gas in an integrated and automated manner, reducing area to transform the quality of energy supply to rural consumers, focusing operating costs that affect the rates for these services; • Carry out tests for building automation and integration to smart grids for power supply stations for cars, bicycles and electric buses; • Promote distributed micro generation for solar and wind sources. The implementation the Company’s smart grid is part of the Smart Energy Paraná program, created in 2013 by the state government to encourage distributed generation through renewable sources. Currently, the project is undergoing a technical assessment phase, seeking to refine solutions implemented during the pilot project and the assessment of more suitable business models for its large- scale dissemination. on agricultural activities in important production processes. Practically every rural region in the state will be served; however the largest volume will be invested in the Southwestern and Central-southern region of the state. The program will supply rural producers with electricity with quality equivalent to large urban centers. To this end, Copel will implement smart grid technology in rural areas. Approximately 3,000 km of new networks will be built, with nearly 30 substations and close to 3,500 automatic re-closers. The work proceeds in two fronts: improvement in infrastructure to increase the quality of energy supply, and automation technologies to reestablish the system with greater agility in case of power outage. In all, Mais Clic Rural will directly benefit 70,000 producers in the state. The main beneficiaries are Project Paraná Smart Grid installed 2,000 telemetry points throughout the Curitiba tobacco growers, poultry, pig and milk producers in the state, agro-industrial urban area, and 1,000 points in the rural area of Colombo and Bocaiúva do Sul in niches that are more sensitive to the quality of power supply. Nevertheless, it order to test the technology. Reading is done every hour allowing for detection of is expected that investments in the network wil indirectly benefit 2.4 million problems, power outages, and reading without physical displacement. people in the rural and urban areas. 54 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex fINANCIAL CAPITAL financial Capital G4-EC1 Net Operating Revenue In 2015, the Net Operating Revenue exceeded the mark of R$ 14.7 billion, with additional R$ 809.6 million, representing a 5.8% increase compared with 2014. This variation is mainly due to an increase of R$ 1,375.8 million in Revenue from Energy Supply, resulting from the Extraordinary Rate Review (which occurred in March 2015, and readjustment in June 2015) offsetting a reduction of 0.7% in the captive market; (ii) reduction of R$ 663.4 million in Electric Energy Supply, mainly due to the variation in the Settlement Price Difference - PLD, and decrease in dispatch of energy from the Araucária plant; (iii) increase of R$ 151 million in Revenue from Network Availability, arising above all from rate readjustment occurred in June 2015; (IV) reduction by R$ 82.7 million in Revenue from Construction (revenue associated with construction services or improvement in infrastructure used to provide distribution, transmission of energy and gas services); (v) increase by R$ 44.5 million in telecommunication Revenue, mainly due to the increase in number of clients, from 27,614 to 47,987 in 2015; (vi) increase by R$ 135.1 million in Revenue from Distribution of Piped Gas, due to the increase in the volume of gas distribution to the industrial, co- 5 1 0 2 4 1 0 2 0.09 0.2 0.5 0.9 1.2 0.07 0.1 0.4 2.4 3.7 5.8 1.0 1.3 2.2 4.4 4.4 0 2 4 6 8 Other Operating Revenues Revenue from Construction 55 generation, and residential segments. Revenue from Distribution of Piped Gas Telecommunication Revenue Revenue from Network Availability (TUSD/TUST) Electric Energy Supply Result of sectorial financial assets and liabilities Revenue from Energy Supply 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex fINANCIAL CAPITAL Operating Costs and Expenses The Company had an increase of R$ 560.5 million in 2015, representing an increase of 4.6% mainly due to an addition of R$ 952.3 million in Electric Power Purchased for Resale, an increase of R$ 534.9 million in Charges for the Use of the Network, an increase of R$ 116 million in Personnel and Administration, and a reduction of R$ 992.9 million in Provisions and Reversals. Net Profit and EBITDA (EBITDA) In 2015, net profit assigned to shareholders of the holding was R$ 1,192.7 million, 1.1% less than the amount obtained in the previous period of R$ 1,206 million. The Company’s EBITDA in 2015 was R$ 2,585.2 million, representing an increase of R$ 228.2 million compared with 2014. This 9.7% increase is mainly due to the increase in net revenue in 2015, of R$ 809.6 million. Evolution of net profit 1,101 178 1,336 275 1,266 402 923 1,061 864 1.8 19.9 2.3 16.8 2.5 24.6 30 25 20 15 10 5 0 3 2.5 2 1.5 1 0.5 0 2013 2014 2015 2013 2014 2015 9M 4T EBITDA EBITDA Margin Value Added G4-EC1 In the 2015 period, Copel recorded R$ 14,456.4 million in Total Value Added, a total 2015 % 8 2 . % 7.4 7.9% 9.3% 74.1% 58.4% Provisions and Reversals 2014 9.6% Government Shareholders 7.4% Retained 9.1% 15.5% Third Parties Personnel Starting in June 2015, Copel GeT stopped provisioning credit for doubtful debtors for the difference between the sales price of energy negotiated in the CCEARs of the Colíder hydroelectric plant and the PLD, considering the assumption of 150 days of exclusive responsibility associated with delay in delivering the Colíder hydroelectric plant into operation (used to test impairment in 2014). The balance provisioned until June 2015 is of R$ 119.7 million. The Company is awaiting definition from ANEEL concerning the request to review the schedule for the beginning of commercial operations of the plant for a possible reversal of this provision. More details available in Balance Sheets (p. 3-4). Reassessment of Hydrological Risk G4-EC2 At the end of December 2015, Copel Geração e Transmissão and Centrais Elétricas do Rio Jordão filed a request to reassess the hydrological risk in the ACR of the Mauá, Foz do Areia, Santa Clara and Fundão plants. According to the request, and given its retroactivity, the subsidiaries managed to partially recover the cost with GSF in the year at R$ 33.55 per average megawatt for 83.9% higher than the previous year. This variation is mainly due to the aggregate the SP100 class product referring to the risk premium they hired. increase of Copel’s supply rate in 2015 of 51.69%, composed of RTE and RTA. The full statement can be seen in financial Statements (p.10). This reassessment allows for a reversal of R$ 135 million in costs with purchase of energy. 56 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex fINANCIAL CAPITAL Investments In 2015, Copel’s investments totaled R$ 2,364.7 million. For 2016, the Company intends to carry out investments of approximately R$ 3,149.8 million approved by the 151st ordinary meaning of CAD. Evolution of investments by Copel COMPANIES (R$ MILLION) INVEStED IN 2015 INVEStED IN 2014 VARIAtION % 2015-2014 BUDGEt 2016 Generation and Transmission 1,373.3 1,316.3 Distribution Telecommunications Wind Farm Projects (1) Other (2) Total 656.4 105.4 229.3 0.3 857.7 107.5 176.0 11.5 2,364.7 2,469.0 4.3 (23.5) (2.0) 30.3 (97.5) (4.2) 1,695.1 570.0 146.0 714.8 23.9 3,149.8 (1) Includes Brisa Potiguar, Cutia Empreendimentos Eólicos, São Bento Energia and Voltália. (2) Includes Holding, Copel Renováveis, among others. Investment program (R$ million) For calculation purposes, consumers are considered in default in case of a debit past due for more than 15 days up to 360 days, in compliance with the term of the due date notice (ANEEL Resolution No. 414/2010), and recognition of loss of past due debits is excluded. In December 2015, default of consumers of Copel Distribuição totalled R$ 272.8 million, which is equivalent to 1.81% of its revenue. Liquidity and capital resources The Company finances liquidity and the need for capital with resources from operations and external financing, aiming to expand and modernize businesses associated with generation, transmission, and distribution of electricity, as well as telecommunications. It is important to note that the Company seeks to invest in shareholding interest using financing lines available in the market and in line with the Company’s capital structure, in terms of financial leveraging considering the return of the projects. We point out that our perspectives for financing, as well as cash availability, will be sufficient to meet the needs of the Company’s investment plan. For detailed information, see Explanatory Note - EN (Nota Explicativa – NE) 5 57 1,903 1,777 2,469 2,365 3,150 and 6, of the financial Statement (p.31-32). 2012 2013 2014 2015 2016 (Forecast) Indebtedness Consumer Default Starting in the 2003 accounting period, Copel Distribuição began calculating the default rate for supply of electricity, using the following calculation methodology: Default (%) = ∑ past due debts > 15 days ≤ 360 days ∑ billing in the 12 month period Copel’s level of indebtedness is in line with the Company’s capital structure, in terms of financial leveraging considering the return of the projects, as well as the expansion established in the Company’s strategic planning. Additionally, indebtedness meets the criteria and performance indicators required by the institutions in the financial market, as well as by the Banco Nacional de Desenvolvimento Econômico e Social - BNDES. For detailed information, see Explanatory Note - EN (Nota Explicativa – NE) 22, of the financial Statement (p.65). 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex fINANCIAL CAPITAL Net debt* /EBItDA analysis of temporal series, neural networks, fuzzy logic, and classic methods of are used to acquire energy from the Distributor as well as tax and financial planning. The system introduced a significant improvement to techniques and consequently to the level of assertiveness in preparing market forecast using forecast, sending the results of energy projections and demand by class, level of tension, and rate position, for a ten-year horizon, and with varied frequencies. Another important objective achieved through this project was the integration of several forecasts prepared for different objectives, both for those already mentioned above and for planning of operations and expansion of the Company and also of the electric sector (ONS, EPE), eliminating duplicity of data and reducing risk of discrepant information. In addition to greater assertiveness of projects, SPIM provided greater agility, safety and reliability data and processes, thereby contributing to the optimization of time and smaller disbursements. 58 Covenant of 3.5 Net debt/EBITDA 2.8 2.4 1.4 2,545 2013 0.7 1,014 2012 5,517 2014 6,961 2015 Net debt Net debt/ EBITDA *Considers guarantees and warranties Copel’s level of indebtedness, measured through the index that represents the ratio between net debt and EBITDA, has grown in recent years, reaching the mark of 2.8 at the end of 2015. Despite the growth, the indicator is still distant from our covenants, which is the ratio of 3.5. Indebtedness is intrinsically associated with the Company’s solid investment program in recent years. Energy Planning The R&D project Integrated Market forecast System - SPIM was developed together with Lactec aiming to mitigate risks arising from energy market forecasts, as they 03Desempenho em CapitaisAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel Governance Sustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex ANNUAL SOCIAL AUDIT On December 31 2015 and 2014 (Amounts expressed in R$ thousand, except when stated otherwise) 1 - CALCULATION BASE NE 31 Net revenue (NR) G4-EC1 2 - INTERNAL SOCIAL INDICATORS NE 32.2 Management remuneration Employee remuneration Food and meals (meal allowances and others) Mandatory payroll taxes and benefits Pension Plan Health (assistance plan) Training and professional development NE 32.2 Profit sharing Employee compensation and severance pay (1) Other benefits Total 3 - EXTERNAL SOCIAL INDICATORS Culture Health and sanitation Sports Other Research & Development Energy Efficiency Program Morar Bem Program Nighttime Rate Program Other Total contributions to society Taxes (excluding payroll taxes) Total 4 - ENVIRONMENTAL INDICATORS Investments related to the company’s operations Investments in programs and/or external projects Total (2) Number of environmental sanctions G4-EN29 Amount of environmental sanctions (R$ thousand) In terms of defining annual targets for reduction of waste generation and of general consumption during production/operation, as well as for increase of efficiency of natural resources use, the company: 14,728,131 19,194 842,948 119,410 271,224 68,090 205,291 10,600 78,462 6,905 16,118 1,638,242 7,568 3,121 1,801 128,231 66,361 38,666 12,769 3,833 6,602 140,721 10,495,595 10,636,316 490,621 856 491,477 1 132 2015 2014 % ABOUT NR % ABOUT NR 13,918,517 0.1 5.7 0.8 1.8 0.5 1.4 0.1 0.5 0.0 0.1 11.1 16,066 754,218 105,425 247,826 66,972 153,539 8,056 92,657 6,588 15,177 1,466,524 0.1 5.4 0.8 1.8 0.5 1.1 0.1 0.7 0.0 0.1 10.5 % ABOUT NR % ABOUT NR 0.1 0.0 0.0 0.9 0.5 0.3 0.1 0.0 0.0 1.0 71.3 72.2 13,016 4,421 3,130 108,310 51,581 15,856 19,692 4,665 16,516 128,877 4,394,165 4,523,042 0.1 0.0 0.0 0.8 0.4 0.1 0.1 0.0 0.1 0.9 31.6 32.5 % ABOUT NR % ABOUT NR 3.3 0.0 3.3 333,021 333,873 2 1,600 2.4 0.0 2.4 2015 (x) doesn’t have targets ( ) meets 0-50% ( ) meets 51-75% ( ) meets 76-100% 2016 ( ) doesn’t have targets ( ) meets 0-50% ( ) meets 51-75% (x) meets 76-100% 60 04Social audit About the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex G4-LA12 5 - WORKFORCE INDICATORS (INCLUDINg SUBSIDIARIES) Number of employees at the end of the year Number of hires during the year Employee schooling Total Higher and postgraduate Total Secondary Total Primary (3) Employee Age group Under 18 From 18 to 30 (exclusive) From 30 to 60 (exclusive) From 45 to 60 (exclusive) 60 or older (exclusive) Women working in the company % of women in management positions: In relation to the total number of women In relation to the total number of managers Blacks working in the company % of blacks in management positions: In relation to the total number of blacks In relation to the total number of managers Employees with special needs Dependents Outsourced Apprentice(s) Intern(s) (4) (5) (5) Number of labor suits in course at the end of the year Number of labor suits terminated in the period 6 - RELEVANT INFORMATION ON CORPORATE CITIZENSHIP (6) Ratio of highest to lowest remuneration in the company Total number of work-related accidents (includes accidents involving contractors) Total number of consumer complaints and grievances: to company at PROCON (Consumer Protection Agency) in court % of complaints addressed or solved: to company at PROCON (Consumer Protection Agency) in court 8,813 234 8,777 235 Male 2,993 3,673 181 Female 1,289 670 7 Male 2,684 4,044 124 Female 1,165 758 2 Total 3,849 4,802 126 - 1,331 4,159 3,232 55 1,927 5.3 20.6 1,002 2.7 5.4 195 16,256 5,895 177 313 4,867 552 Total 4,282 4,343 188 - 1,100 4,257 3,371 85 1,966 5.4 19.9 981 3.3 6.0 207 15,580 6,457 252 333 4,795 1,011 19 254 43,360 558 2,649 99.3% 100.0% 17.1% 19 263 34,106 515 2,680 100.0% 97.5% 17.2% 61 04Social audit About the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex 2015 Metas 2016 The company’s social and environmental projects were defined by: Board and management Board and management Work place safety and sanitary standards were defined by: Regarding freedom of association, right to collective bargaining and internal worker representation, the company: Private pension plan covers: Profit sharing program covers: In selecting suppliers, the same ethical, social responsibility and environmental standards adopted by the company: All + Cipa (Internal Commission for the Prevention of Accidents) All + Cipa (Internal Commission for the Prevention of Accidents) Encourages and will follow ILO Encourages and will follow ILO All All All All Are required Are required Regarding employee participation in volunteer work, the company: organizes and encourages organizes and encourages G4-EC1 7 - gENERATION AND DISTRIBUTION OF WEALTH Total value added for distribution Distribution of Value Added: Third parties Personnel Government Shareholders Retained 8 - OTHER INFORMATION 2015 14,456,447 7.9% 9.3% 74.1% 2.8% 5.9% 2014 7,860,056 9.1% 15.5% 58.4% 4.9% 11.8% • After 2010, the Instituto Brasileiro de Análises Sociais e Econômicas - Ibase has no longer prescribed its standard model for Social Audit, understanding that this tool and methodology are already broadly disseminated among companies, consulting companies and institutes that promote corporate social responsibility in Brazil. For this reason, Copel, which had been using this model since 1999, decided, based on Ibase recommendation, to improve its Social Audit Statement, addressing information requested in NBCT 15 with a view to ensuring transparency. • The explanatory notes - ENs are an integral part of the Financial Statements and contain additional social and environmental information not covered in this Social Audit • This Social Audit contains data related to Copel holding, wholly-owned subsidiaries, associated companies and consortiums due to the consolidation of their results with Copel’s, unless indicated otherwise. (1) The item Other Benefits is composed of: Complementary Illness Assistance, Extended Maternity Assistance, Insurance, Surplus Transport Allowance and Assistance for Permanent Injury, Accidental Death, Daycare Assistance, Education, Culture and Occupational Health and Safety Assistance. (2) This information refers to social and environmental fines and notifications for Copel holding and its wholly-owned subsidiaries: Copel Distribuição S.A., Copel Geração e Transmissão S.A, Copel Telecomunicações S.A., Copel Comercilização S.A. and Copel Renováveis S.A. The original amounts are disclosed; these may be altered in accordance with the administrative defense presented to the environmental body. Amounts related to Terms of Commitment - TCs and Terms of Conduct Adjustment - TACs are classified as external social or environmental, depending on the specific nature of each. (3) Refer to the apprentice program in conflict with the law, which was terminated in 2014. (4) This number corresponds to the total number of contractors hired in the year regardless of the number of hours worked. It does not represent the number of outsourced work positions. Neither does it cover the contractors engaged in the implementation of the work of Copel Geração e Transmissão and subsidiaries (Plants, Transmission Lines and Substations) or those engaged in the expansion of the Copel Telecom system. (5) Not part of the staff. 62 04Social audit About the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex Content Index G4-32 The following table presents the indicators of the GRI guidelines reported in this publication and the identification of their location throughout the contents of the Report or their direct response. IndIcator detaIls or reference page global compact strategy and analysIs G4-1 Message from the president 6 G4-2 Description of key impacts, risks, and opportunities 6, 8, 15, 16, 22 organIzatIonal profIle G4-3 Name of the organization G4-4 Primary brands, products, and/or services G4-5 Location of organization’s headquarters G4-6 Countries where the organization has significant operations or those that are specifically relevant to the sustainability topics covered in the report G4-7 Nature of ownership and legal form G4-8 Markets served G4-9 Size of the organization G4-10 Labour force profile by category female Advisor Director *Employee *Manager Intern *Direct employees 3 0 1,805 104 187 Work hours/day female 4 hours 6 hours 8 hours grand total by regIon South Southeast Midwest Northeast 34 363 1,512 1,909 female 1,903 0 6 0 total number of employees 1,909 male 34 23 6,303 416 136 male 45 418 6,256 6,719 male 6,648 9 57 5 6,719 12 12 12 12 12, 19 14 14, 27 27 total 37 23 8,108 520 323 total 79 781 7,768 8,628 total 8,551 9 63 5 8,628 All 6 by career female male total Operational Technical Prof. High School Degree Prof. High School Degree Prof. University Degree total Employee Manager total Employee Manager total Employee Manager total Employee Manager 0 0 0 136 135 1 1,377 1,339 38 396 331 65 grand total 1,909 136 135 1 1,937 1,910 27 3,554 3,468 86 1,092 790 302 6,719 136 135 1 2,073 2,045 28 4,931 4,807 124 1,488 1,121 367 8,628 64 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex G4-11 Percentage of employees covered by collective bargaining agreements G4-12 Description of the organization’s supply chain G4-13 Significant changes regarding size, structure, ownership, and supply chain 27 34 12, 50 G4-14 Description of how the precautionary approach or principle is addressed by the organization 22 G4-15 Externally developed social charters, principles, or other initiatives 3, 23, 79 G4-16 Memberships of associations and organizations 23, 79 IdentIfIed materIal aspects and boundarIes G4-17 Entities included in the consolidated financial statements and entities not covered by the report G4-18 Process for defining the report content G4-19 Material aspects identified in the process for defining report content G4-20 Aspect boundary, within the organization, of each material aspect G4-21 Aspect boundary, outside the organization, of each material aspect G4-22 Restatements of the information are provided throughout the report, together with the context of the change 3, 13 3, 4 5 5 5 3, Restatements of the information are provided throughout the report, together with the context of the change. G4-23 Significant changes from previous reporting periods in the scope and aspect boundaries 3,4 stakeholder engagement G4-24 List of stakeholder groups engaged by the organization 4, 5 G4-25 Basis for identification and selection of stakeholders with whom the company engages G4-26 Approach to stakeholder engagement G4-27 Key topics and concerns that have been raised during the engagement, by stakeholder group report profIle G4-28 Reporting period G4-29 Date of most recent previous report G4-30 Reporting cycle G4-31 Contact point for questions regarding the report or its contents G4-32 ‘In accordance’ option and location of the GRI Content Index G4-33 Policy and current practices with regard to seeking external assurance for the report governance G4-34 Governance structure of the organization G4-35 Process for delegating authority from the highest governance body for economic, environmental, and social topics G4-36 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 highest governance body 4 4 5 3 3 3 4 3, 64 3, 76 18 23 23 G4-37 Processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics The company has several structures for dialogue and for meeting the demands of its stakeholders, as shown in subsection Integrity Practices. G4-38 Composition of the highest governance body and its committees 18, 19 G4-39 Chair of the highest governance body G4-40 Selection criteria and nomination processes for the highest governance body and its committees 19 19 1,2,3 All All All All 10 All All 65 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex G4-41 Processes to ensure conflicts of interest are avoided and managed 17 G4-42 Roles of the highest governance body and senior executives in the de- velopment of policies and goals to manage impacts The Assembled Board has executive functions and implements the Company's strategy. The Board of Directors determines and sets the overall direction of the business. G4-43 Measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental and social topics G4-44 Process for delegating authority from the highest governance body for economic, environmental, and social topics 20 20 G4-45 Responsibility for the implementation of economic, environmental and social policies 22, 23 G4-46 Role of governance in reviewing the effectiveness of the organization’s risk management processes for economic, environmental and social aspects 22 G4-47 Frequency of the highest governance body’s review of impacts, risks, and opportunities 19, 22 G4-48 Formal approval of the organization’s sustainability report On March 15, 2016, the Board of Directors approved the integrated reporting structure applied to Copel’s 2015 Sustainability Report and its strategic and material aspects, which should be the focus of the company’s management and communication with its stakeholders. G4-49 Process used for communicating critical concerns to the highest governance body 22 G4-51 Relation between the remuneration and the performance of the organization 19 The remuneration of directors and audit committee members is made up only by honorary payments, not linked to the achievement of any goals or variable compensation or performance indicators. G4-52 Process for determining remuneration 19 G4-53 Stakeholders’ views regarding remuneration, including the results of votes on remuneration policies and proposals, if applicable Stakeholders do not participate in the company’s remuneration process. G4-54 Ratio between the highest salary and the overall average of the organization The remuneration of the highest paid individual is 7 times higher than the average for all employees. The calculation considers all items of the compensation, except the 13th salary. G4-55 Ratio between the increase in the highest salary and the average in- crease of the organization The increase in total annual remuneration of the highest-paid individual equals one time the average percentage increase of the total annual remuneration of other employees. ethIcs and IntegrIty G4-56 Organization’s values, principles, standards and norms of behavior 12, 20, 21 G4-57 Internal and external mechanisms for seeking advice on ethical and lawful behavior G4-58 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. 21 21 10 All All All 10 All 10 10 IndIcator detaIls or reference page global compact economIc aspects economIc performance G4-EC1 Direct economic value generated and distributed 27, 28, 41, 54, 55, 56, 60, 62 G4-EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change 43, 56 market presence G4-EC5 Ratio of the lowest wage compared to the local minimum wage Variation of the lowest wage and the minimum wage: 2.19 Variation of the lowest wage and the minimum wage - Male: 2.02 Variation of the lowest wage and the minimum wage - Female: 2.19 National minimum wage on 12/31/2015: R$ 788.00 IndIrect economIc Impacts G4-EC7 Development and impact of infrastructure investments and services provided 41 1, 2, 7, 8, 9 1, 2, 7, 8, 9 1, 2, 6 1, 2, 7, 8, 9 66 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex actIvItIes descrIptIon of the Investment current and expected Impacts type of Investment Implementation of Parque Linear - Caminhos do Iguaçu - located in União da Vitória, State of Paraná. Technical support to municipal administrations in the area of influence of the Colíder Hydroelectric Plant in the preparation and/or implementation of their Participatory Master Plans. Monitoring and promotion of local economic activities, from the start of construction of the Colíder Hydroelectric Plant up to a few years after completion. Epidemiological surveillance and monitoring in the area of influence of the Colíder, Hydroelectric Plant in accordance with the guidelines of the Ministry of Health. An action plan for controlling this disease was agreed upon with local authorities. Social Projects BNDES - Colíder Hydroelectric Plant- Social demands submitted by the municipal managers that were approved by Copel’s Board of Directors. Park with an extension of 4 km, covering a large portion of the coast of the city of União da Vitória, in the Environmental Protection Area (APP) of the reservoir of the GBM Hydroelectric Plant. It has 3 sports courts, 1 skate park, 1 motocross track and 1 lookout point. - Sport and leisure options; - Boost to tourism in the municipality; - Park lighting, improving security in the region; - Prevention of irregular occupations in floodable areas of the Environmental Protection Area (APP). - Investments in a landscaping team and maintenance of green areas; - Investments totaled R$ 2,935,314.31; - Contributions of the municipality, in environmental education and maintenance of the park. A specialized company was contracted to assist the munici- palities in all stages of mobilization, training, dissemination, diagnosis, and drafts of bills. The municipalities were better prepared to host the proj- ect, through stimulus to the institutionalization of planning structures and territorial management. - Total Invested (R$): 190,613.08 - Services agreement. Meetings for the development of fishing activities; Action Plan for the Development of Tourism; household production included in the municipalities of the area of influence of the Colíder Hydroelectric Plant, and Training Workshops in production management, processing, and marketing processes. Boats, trucks, motorcycles, furniture, rechargeable flashlights, printers, digital cameras, GPS, software licenses, and Entomological materials were transferred. Ambulances, office supplies, computer equipment, laboratory equipment and supplies, and logistical support services are also foreseen. Investments by the municipality were: - NOVA CANAÃ DO NORTE: 2 ambulances; ITAÚBA: 1 van adapted for transportation of patients; - CLÁUDIA: X-ray equipment and Processor, 2 playgrounds for 2 municipal daycares, 1 Ambulance, and 1 minibus - COLÍDER: 46 air conditioners for cooling of 12 municipal schools; Construction of the headquarters of the Department of Children and Family Services (DCFS); Reconfiguration and stimuli to the development of sustainable economic activities, contributing to strengthening the municipalities and reducing the risks of economic downturn at the end of the construction work of the Colíder Hydroelectric Plant. - Total Invested (R$): 351,812.80 - Services agreements. Prevention of outbreaks of the disease during construction of the project and permanent strengthening of environmental surveillance and epidemiological conditions of the municipalities in the area of influence of the project, since it is a malaria-endemic region. - Total Invested (R$): 1,223,921.65 - Terms of Donation Coordination with the local public authorities that drive public policies and projects to serve the various segments of the local community. - Total Invested (R$): 1,207,274.10 G4-EC8 Significant indirect economic impacts, including the extent of impacts 16, 36 procurement practIces G4-EC9 Proportion of spending on locally-based suppliers envIronmental aspect energy G4-EN3 Energy consumption within the organization Water G4-EN8 Total water withdrawal by source 34 45 45 G4-EN9 Water sources significantly affected by withdrawal of water 45 In the production process for energy generation, there is no significant variation between the volume of water withdrawn and the volume of water returned to the source; therefore, this amount was not considered as consumption. bIodIversIty G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas Copel, including assets of Copel GeT and Copel DIS, has 8,208.4 km of transmission lines with voltages ranging from 69 to 500kV. Of this total, only 82.146 km reach Full Protection conservation units, according to the National System of Protected Areas (SNUC), only 0.96% – of its total extension. 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 46 In 2015, eight preliminary environmental studies were carried out and their Simplified Environmental Reports -RAS were prepared, for the following projects: Substation Douradina; Substation Bela Vista; Substation Colombo; Substation Rio Branco do Sul; TL Joaquim Távora; TL ATM - RBS; Substation Catanduvas kV; TL Cafelândia. These studies did not identify relevant impacts on biodiversity, considering the magnitude of the projects and their locations. 1, 2, 7, 8, 9 1, 2, 7, 8, 9 7, 8 7, 8 8 8 8 67 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex G4-EN13 Habitats protected or restored 47 8 rio dos touros ecological station is classified as Full Protection and is aimed at preserving nature and conducting scientific research. It was created on June 5, 2001 through State Decree No. 4,229/2001, for environmental compensation of the Governador Ney Braga Hydroelectric Plant. The predominant vegetation cover is the Araucaria Moist Forest. It has an area of 1,231.06 hectares and is located on the right bank of the reservoir of the Governador Ney Braga Hydroelectric Plant (Salto Segredo), municipality of Reserva do Iguaçu, State of Paraná. tia chica ecological station will be classified as Full Protection, aiming at the preservation of nature and scientific research. It has an area of 423.12 ha and is located in the backwater of the reservoir of the Derivação Hydroelectric Plant in the Jordão River, municipality of Pinhão, State of Paraná. The area declared of Public Utility for condemnation purposes has not yet been declared as a Conservation Unit, and the process is ongoing. guarani river state park is classified as Full Protection and aims at preserving natural ecosystems of ecological significance and scenic beauty. It began to be studied by Copel in 1997, as a result of the implementation of the Governador José Richa Hydroelectric Plant. The predominant forest formations are the Semi-deciduous Seasonal Forest and the Araucaria Moist Forest. It has an area of 2,322.00 ha and is located on the right bank of the reservoir of the Hydroelectric Plant. Governador José Richa (Salto Caxias), municipality of Três Barras do Paraná, State of Paraná. lago azul state park is classified as Full Protection and aims at preserving natural ecosystems of ecological significance and scenic beauty. It has an area of 1,749.00 hectares and is located in the Semi-deciduous Seasonal Forest and the Araucaria Moist Forest, compensating the areas affected by the reservoir and vicinity of the Mourão Hydroelectric Plant, municipality of Campo Mourão and Luiziana, State of Paraná. Report the status of the area: It was created through State Decree No. 3,256/1997. - Copel has had an agreement with the IAP - Environmental Institute of Paraná - since 2012, through which it provides outsourced job positions exclusively for the production of native forest seedlings used in the restoration of Permanent Preservation Areas, Legal Forest Reserves and Forest Replacement Areas. In addition, part of the seedlings grown in Copel’s Forest Plantations are donated and used for forest restoration in the State. Source: Copel contracts and http://www.bioclima.pr.gov.br/ modules/noticias/article.php?storyid=41 All of these Protected Areas created by Copel present biodiversity characteristics similar or superior to the affected locations for installation of the projects compensated. Only areas with clear environmental interest in order to represent the original forest formations are accepted create Protected Areas. More information in Protected Areas on the website. G4-EN14 Total number of IUCN red list species and in other conservation lists with habitats in areas affected by operations of the organization crItIcally endangered endangered vulnerable near threatened least concern 8 2 12 34 11 28 endangered specIes emIssIons G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1) G4-EN16 Indirect greenhouse gas (GHG) emissions from the acquisition of energy (Scope 2) G4-EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3) 43 43 43 G4-EN18 Intensity of greenhouse gas (GHG) emissions Intensity of emissions (ton of CO2 eq scope 1 and 2) by Net Operating Revenue reached in R$ thousand: 0.045 G4-EN19 Reduction of greenhouse gas (GHG) emissions 43 G4-EN20 Emissions of ozone-depleting substances (ODS) Copel doesn’t operate production, import or export of SDO. aIr emIssIons 2015 G4-EN21 NOx, SOx and other significant air emissions NOX SOx Persistent Organic Pollutants (POP) Volatile Organic Compounds (VOC) Hazardous Air Pollutants (HAP) Particulate Matter (PM) 583 4,797 0 0.42 0 229 effluents and Waste G4-EN22 Total water discharge by quality and destination In 2015, Copel’s administrative facilities, in the State of Paraná, discharged 106,507.2 m³ of sanitary wastewater* in public collection networks or in controlled septic tanks. *Generation of sanitary wastewater calculated according to NBR 7,229, coefficient of return water - sewer = 0.8. G4-EN23 Total weight of waste by type and disposal method 46 7, 8 7, 8 7, 8 7, 8, 9 7, 8 7, 8 8 8 68 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex complIance 60 G4-EN29 Monetary value of significant fines and total number of non- monetary sanctions for non-compliance with environmental laws and regulations MONETARy VALUE OF SIGNIFICANT FINES (R$) Number of non-monetary sanctions sIgnIfIcant fInes 2013 2014 2015 25,000 0 132,000 1 0 1 In 2015, there was a non-monetary sanction, with the legal nature of suspension of activities (infraction 013510/15 - ICMBio) - which, in turn, has been restored. Also in 2015, a Public Civil Action was filed by the Non-Governmental Organization "M.A.E" against Copel Distribuição S.A., whose application includes compensation for damage and materials, totaling the amount of R$ 1,058,897.10. supplIers G4-EN32 Percentage of new suppliers that were screened using environmental criteria G4-EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken 38 38 socIal aspect labor practices and decent work employment G4-LA1 Total number and rates of new employee hires and employee turnover 27 8 8 8 6 G4-LA2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 28 Copel offers a package of benefits that contribute to the well-being of all employees: Food Aid, Snack Aid, Daycare Assistance, Extended Maternity Leave, Extended Paternity Leave, Profit Sharing, Advance of the 13th Salary, Education Aid, Foreign Language Training, Advance on Vacation Bonus, Vacation Allowance, Flexibility, Assistance to People with Disabilities, Professional Rehabilitation and Readjustment Program, Award for Traffic Safety, Complementing Disability Insurance, Chemical Dependency Program, Vaccination. Quality of Life Benefits - Internal Games, SESI Games, Pre Retirement program, Health and Energy Facilities, Copel Choir Benefits provided through the Copel Foundation - Private Pension Plan, Annuity Plan, Pro-Health III, Loans 1, 2, 6 G4-LA3 Return to work and retention rates after parental leave In 2015, 117 employees took maternity leave (return rate 98.29%) and 283 – paternity leave (return rate 100%). occupatIonal health and safety G4-LA6 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities traInIng and educatIon G4-LA9 Average number of training hours per year by employee G4-LA10 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings G4-LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by employee category dIversIty and equal opportunIty 31 29 29 29 G4-LA12 Composition of governance bodies and breakdown of employees by employee category according to gender, age group, minority group membership, and other indicators of diversity 61 More information is described in G4-10 indicator of index. supplIer assessment for labor practIces G4-LA14 Percentage of new suppliers that were screened using labor practices criteria G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken 38 38 6 6 6 6 6 1, 2, 7, 8 1, 2, 7, 8 69 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex human resources Investments G4-HR1 Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening. 38 IndIgenous rIghts G4-HR8 Total number of incidents of violations involving rights of Indigenous people and actions taken 41 supplIer human rIghts assessment G4-HR10 Percentage of new suppliers that were screened using human rights criteria G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken 38 38 socIedade local communItIes G4-SO1 Percentage of operations with local community engagement, impact assessments, and local development programs 100% of operations G4-SO2 Operations with significant actual and potential negative impacts on local communities 16, 39 Anti-Corruption G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified G4-SO4 Communication and training on anti-corruption policies and procedures 20 20 G4-SO5 Confirmed incidents of corruption and actions taken 20 One of the confirmed cases of corruption is related to obtaining own financial benefits and benefits of third parties. Another case occurred in São José dos Pinhais with employees charging clients undue amounts. Both cases resulted in employment termination. publIc polIcIes G4-SO6 Total value of political contributions by country and recipient/ beneficiary Anti-Competitive BehAvior Given its quasi-public nature, the Company is legally prohibited to making this type of contribution. G4-SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes Copel does not have pending or closed lawsuits regarding unfair competition and violation of antitrust laws and of the regulation of monopoly in which the Organization has been identified as a participant. complIance G4-SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations Total monetary value of significant fines (R$) Number non-monetary sanctions Proceeding instituted through mechanisms of arbitration 2013 2014 2015 8,683,432 7,634,638 4,750,816 1 0 0 0 1 0 supplIer assessment for Impacts on socIety G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society G4-SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken 38 38 envIronmental grIevance mechanIsms related to Impacts on socIety G4-SO11 Number of grievances related to impacts on society filed, addressed, and resolved through formal grievance mechanisms 36 2 1 1, 2 1, 2 1, 2, 7, 8 1, 2, 7, 8 10 10 10 10 1, 2, 7, 8, 10 1, 2, 7, 8, 10 70 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex product and servIce labelIng G4-PR5 Results of surveys measuring customer satisfaction 34, 35, 36 complIance responsIbIlIty for product G4-PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services In 2015, there was no case of non-compliance associated with quality in Tele Service (INS, Iab and ICO Indices), Quality in Distribution of Services - DIC, FIC, and DIMIC or Supply Voltage Levels. IndIcator detaIls or reference page global compact sector dIsclosures organIzatIonal profIle EU1 - Installed capacity, broken down by primary energy source and regulatory regime 50 EU2 - Net energy output, by primary energy source and regulatory regime 50, 52 EU3 Number of residential, industrial, and trade accounts EU4 Extension of transmission and distribution lines, aerial and underground, broken down by regulatory system 34 52 management of demand for electrIc poWer G4-DMA EU7 Management programs for demand, including residential, trade, institutional, and industrial (former EU7). 37 The distribution utilities developed and implemented a campaign aiming to clarify for consumers of their concession areas about how the mechanism for fare flags works and raise awareness about the efficient use of electricity. The campaign aimed to reach the largest audience possible, throughout the country. To this end, videos, spots, and advertisements were produced to be aired on TV, radio, Internet and print media, with simple and educational explanations. research & development G4-DMA EU8 R&D activity and expenditure aimed at providing more reliable electricity and promoting sustainable development (former EU8). 32 avaIlabIlIty and relIabIlIty G4-DMA EU6 Management approach to ensure short- and long-term electricity availability and reliability (former eu6). 50 1, 7, 8 The Operation and Maintenance (O&M) processes for Generation have a management model supported by Reliability techniques. The Operation and Maintenance Based on Reliability (O&MBC) is a structured process that aims, through the analysis of cause and effect, to define the ideal policies for failure management to prevent or limit the consequences of functional failures and their relationships (health, environment, safety and costs), when applied to any physical asset, considering their operational context. The guarantee of reliability and availability of electricity in Copel’s Distribution system is a complex system that involves planning of networks in the medium and long term as well as several short-term actions, called Operation for Distribution Networks. Planning of distribution networks is analyzed through medium-and long-term studies, involving mainly three sub-processes by voltage class: Low Voltage Distribution System, in the 220/127V and 254/127V voltages, Medium Voltage Distribution System, in the 13.8kV and 34.5kV voltages, and High Voltage Distribution System, in the 69kV, 88kV, and 138kV voltages; For low-voltage circuits, the network designer uses, among others, peak data (demand) and consumer capacity. For medium-voltage systems, planning uses customer consumption and demand data, market growth data (provided by the energy market studies area of DIS) as well as data from metering in substations. For high-voltage systems, planning uses customer consumption and demand data, market growth data (provided by the energy market studies area of DIS), data from metering in substations, and data provided by the agencies of the electricity sector, the ONS (Electric System National Operator) and the EPE (Energy Research Company). Several studies are conducted and developed in conjunction with these agencies. The networks are simulated considering the rate of natural increase in a particular region and systemic construction works are planned to meet consumer demand for energy. The operation of distribution networks works to ensure reliability and availability of electricity in the short term, using computerized systems and professionals to ensure availability of the electrical system, coordinate reconnection, and optimize service and maintenance teams. 71 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex G4-EU10 Planned capacity in MW, including energy purchased and reserve margins for each regulatory regime broken down by both sources of energy and building capacity; planning of future investments, including agreements signed by the plant. system effIcIency Copel does not perform a comparison between the planned capacity with the projection of demand, because the planning expansion of generation is carried out by the Energy Research Company (EPE), considering the entire load of the National Interconnected System (SIN) G4-EU11 Average generation efficiency of thermal plants by energy source and by regulatory regime average generatIon effIcIency 2013 2014 2015 Figueira Thermal Plant - Fuel: coal - Installed power: 20MW - Efficiency – PCI base Araucária Thermal Plant - Fuel: natural gas - Installed power: 475MW (combined cycle) - Efficiency – PCI base 16.64 16.64 16.64 52.52 52.41 54.43 G4-EU12 Transmission and distribution losses as a percentage of total energy 53 bIodIversIty G4-EU13 Biodiversity of offset habitats compared to the biodiversity of the affected areas 47 Management of the compensation areas of the main projects being installed by Copel GeT (Colíder Hydroelectric Plant and TL- ARA TAU) does not allow for presentation of consolidated data on their compensation areas, since they are still undergoing a negotiation and/or execution process. Over 2016 these areas will be recorded, and may be presented in the next report. Area of the habitat (km2): 0.03 Main species preserved/protected: Avifauna: mainly the rufous-bellied thrush and Jurema (native plant) Habitat classification: Forest and caatinga biome labor practIces and employment G4-DMA EU14 Programs and processes that ensure the availability of skilled labor (former EU14). 27, 28, 29 27 Considered a new rule to retirement, in which the numbers 85 and 95 represent the sum of the age of the person and their time of contribution to the INSS (National Social Security Institute). 85 for women, and 95 for men. These number increase over time, taking into account the life expectancy of Brazilians. 85/95 will be valid until 2018. Then it will increase until 2027, when it will be 90/100. perIod male female G4-EU15 Percentage of employees with a right to retirement in the next 5 to 10 years, broken down by functional category and region Up to Dec. 30/2018 From Dec. 31/2018 to Dec. 30/2020 From Dec. 31/2020 to Dec. 30/2022 From Dec. 31/2022 to Dec. 30/2024 From Dec. 31/2024 to Dec. 30/2026 From Dec. 31/2026 onwards 95 96 97 98 99 100 85 86 87 88 89 90 7, 8 1, 2, 5 1, 2, 5 72 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex G4-EU17 Days worked by contractor and subcontractor employees involved in construction, operation and maintenance activities. EU18 Percentage of contractor and subcontractor employees that have undergone relevant health and safety training local communItIes G4-DMA EU19 Stakeholder participation in the decision making processes related to energy planning and infrastructure development (former EU19). Distribution – estimated number of days worked by contractor and subcontractor in: 2014 2015 Construction activities Operation activities Maintenance activities 767520 777504 0 0 625248 672672 Business Distribution of information: Activities associated with: cleaning and maintenance of offices and power-generating plants, maintenance of green areas, clearing under transmission lines and right of ways, travel, masonry, apprentice, service in canteens/kitchens, geoprocessed registration, specialized consulting, courier, messenger, SW development, typing, development of projects, submission of notice of disconnection, gymnastics, meter reading, consumer connection, disconnection and reconnection, cleaning and maintenance of green areas, maintenance of lines and networks, carpentry, engineering works, trimming of trees, reception services, clearing of right of ways, general services, technical support, computer service, telephony, telecommunications, training, surveillance. 31 In 2015, a total of 5,955 (i.e. 100% of) contractors and subcontractors were trained on health and safety. At Copel Generation and Transmission, there were 3,291 people trained. Due to the high turnover of contracted employees and due to the characteristics of the contracts (eg. by demand), it is not possible to estimate the proportion of trained contractors. The Company adopts as a rule the achievement of security integration training for all its contractors. 1, 2, 5 Participation of stakeholders occurs in various ways, according to the phase of each project. Details of the main parties involved can be found below: Copel holding: Copel Distribuição is a wholly owned subsidiary of Copel Holding. All investment decisions are on the agenda of and approved by the Holding. Government of the State of paraná: The government has controlling interest of the common shares and retains administrative control of Copel Holding, and is therefore involved in all strategic decisions of Copel Distribuição. ministry of mines and energy: The Ministry operates directly and indirectly (through its related companies detailed below) in the decision-making process of long-term investments. aneel: The National Electric Energy Agency - agency linked to the MME, aims to standardize and monitor all services rendered by Copel Distribuição. Its role is to adjust and reconcile the interests of society as a whole and of the energy distribution companies. epe - energy research Company: agency linked to the MME. Aims to plan transmission networks, aligning with the Distribution needs. onS - electric System national operator: agency linked to the MME. Aims to operate the interconnected system and point out problems and solutions of the Distribution networks. Consumer Council: Represents the various classes of consumers of electricity in all levels of planning - strategic, tactical and operational. organized civil society: Is represented by governmental and non-governmental bodies for discussions about infrastructure developments, such as State Prosecution Office, representations or organized unions; municipal Administrations: the city halls are also significant stakeholders in all decision-making processes of infrastructure projects; environmental agencies and intervenors: Are responsible for the examination and approval of environmental and archaeological licensing of major infrastructure works of Copel DIS. Among them, we can highlight IAP, IPHAN, SMMA Curitiba, and ICMBio. During the implementation phase of infrastructure projects, the procedures described below are adopted for all Generation and Transmission projects. During implementation of new infrastructure, the community is consulted through public hearings directly conducted by the licensing body, and indirectly through permits/licenses/no reservations issued by municipalities, environmental agencies, etc. During implementation, all those affected are involved by the social and environmental programs established during the licensing process. Changes in the business plan are submitted to the departments responsible for approval. With respect to the implementation phase, the community is involved as the social and environmental licensing process occurs, and deviations in the business plan are escalated to higher hierarchical levels, for decision-making, as soon as they are detected. During implementation of the infrastructure projects, the social communication plan is developed and channels are provided, as defined in the social and environmental licensing. DDN – Business Development Department is responsible for the analysis of business opportunities and approves together with the Executive Board and the Board of Directors, responsible for approving strategic decisions. The acquisitions of assets and the development of projects for participation in auctions follow the company’s strategic alignment. - In the case of acquisitions of assets, finalizing the acquisition of any asset requires approval of regulatory agencies, such as ANEEL - The National Electric Energy Agency, CADE - Administrative Council for Economic Defense, and Financing Agencies., in addition to the necessary internal approval (Executive Board and Board of Directors), and the entire process is monitored by the Court of Auditors of the State. - In the case of preparation of projects to participate in energy auctions, several agencies participate in the process, being the environmental agency (IAP / Departments of the Environment / IBAMA) as a licensing agency and several others as intervening agencies (FUNAI, Fundação Palmares, Agência Nacional de Águas - ANA, INCRA, IPHAN, Instituto das Águas do Paraná); Federal and State prosecutors, Local Universities and Municipal and State governments also participate in the process. The areas coordinating and executing the project are structured to provide information and details on all resources involved and ensure participation of stakeholders, including those vulnerable, following the environmental legislation, the needs for public hearings in licensing processes, informative technical meetings and obtaining consent of the municipalities and intervening agencies. This detailing allows for decision-making on the implementation or not of the business, considering the social and environmental viability, availability of environmental resources and legal consents for the projects. In the case of acquisition of assets, prior to implementing the business, it is necessary to obtain approval from the Board of Directors (internal approvals), as well as external approval (ANEEL, CADE, Funders). The development of projects for subsequent participation in auctions, such as hydroelectric, thermal and wind power projects, undergoes an environmental licensing phase, since participation in auctions requires a preliminary environmental license. In these cases, another list of stakeholders is part of the process, in view of the implementation of public hearings and/or informative technical meetings with the participation of the government, society and other stakeholders, in accordance with current legislation and criteria of the environmental licensing agencies. In the case of environmental licensing processes, the environmental agency may request consultations to society and other stakeholders as early as the issue phase of the terms of reference for the preparation of studies. In most processes, the first contact with society and other stakeholders occurs during the implementation process of environmental studies, through informative technical meetings, which aim to bring to the attention of society the development of studies and gather information for analysis of the possible impacts of projects and propose mitigating measures (in the case of negative impacts). G4-DMA EU20 Approach to managing the impacts of displacement (former eu20). 39 G4-EU22 Identify the number of people physically or economically displaced by large projects, broken down by type of project (ex: expansion of the plant, new facilities, new transmission lines). 40 73 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex provIsIon of InformatIon G4-DMA EU24 Practices to address language, cultural, low literacy and disability related barriers to accessing and safely using electricity and customer support services (former eu24). 1, 2, 8 Copel provides several customer service channels to facilitate access to its products and services. Seeking to facilitate low-literacy consumers access to information and services provided, Copel participates in integrated actions carried out by the Departments of State and Municipalities; in these events Copel provides guidance to the public in an educational manner, through the use of games and the Energy Efficiency VAN, regarding the conscious and safe use of electricity, in addition to on-site customer service to the population, in order to facilitate access to services and answer questions. Some examples of practices that occurred in 2015: • UPS Cidadania (in Curitiba, in the districts of Parolim, CIC, Tatuquara); • Prefeitura no Bairro (Municipality of Colombo); • Paraná Cidadão (in the Municipality of Almirante Tamandaré); • Minha Casa Minha Vida (in the Municipality of Araucária). Copel has several Indigenous communities in its concession area and assures this group the right to a differentiated rate benefit provided for in the TSEE (Social Electricity Rate). In 2015, a total of 669 consumer units of Indigenous people were included in the Social Electricity Rate - Low Income. Seeking to facilitate access to electricity, Copel developed the service project with photovoltaic energy, produced by panels that generate electricity from solar radiation, taking energy to the Indigenous lands of Sambaquí, Cerco Grande, Cotinga, and Shangri-lá. special needs Copel offers blind consumers the possibility to receive their energy bills in Braille. The request can be made directly in the agencies and personalized service stations or via 0800 51 00 116. Currently, about 100 bills are issued monthly. Copel Distribuição has 81.7% of agencies and customer service stations architecturally adapted for people with disabilities. Copel’s website is adapted for access to people with visual impairment. Additionally, Copel provides a customer service channel to the community (Ombudsman’s Office) which works toward preservation of values such as transparency, equality and fairness in addressing issues that involve all stakeholders in the company’s businesses. Access is facilitated via website, toll-free and on-site. consumer health and safety accIdents and fatalItIes 2013 2014 2015 G4-EU25 Number of accidents and fatalities for users of the service involving company assets, including decisions and legal agreements, in addition to court cases pending relating to diseases. Number of accidents for users of the service Number of fatalities for users of the service Number of cases related to health and safety, including diseases and members of the audiences affected in trials and potential risks associated acess G4-EU23 Programs, including those in partnership with government, to improve or maintain access to electricity and customer support services, as well as to is safe use 36, 79 27 10 0 31 8 0 29 13 3 1, 2, 7 G4-EU26 Percentage of the population not served in areas with regulated distribution or service Copel serves 100% of the population in its concession area. There are requests for new connections that will be attended to within the regulatory time limits. number of consumer units disconnected by time between disconnection and payment agreement G4-EU27 Number of residential disconnections for non-payment, broken down by duration of disconnection and by regulatory regime Less than 48 hours Between 48 hours and one week Between one week and one month Between one month and one year Over one year 2015 232,716 41,852 54,293 51,069 0 number of consumer units disconnected by total time between payment agreement 2015 Less than 24 hours Between 24 hours and 48 hours Between 48 hours and 72 hours Over 7 days 268,742 11,702 17,004 34,250 74 G4-EU28 Frequency of interruptions in power supply (FEC). G4-EU29 Average duration of interruptions in energy supply (DEC). G4-EU30 Average plant availability, broken down by energy source and regu- latory system 52 52 53 05Content IndexAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex 76 06AssurAnce reportAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex 77 06AssurAnce reportAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex Annex - Incorporation of the Global Compact Principles G4-15, G4-16, EU23 The Company ratifies its commitment to the United Nations Global Compact and presents below its Communication on Progress (COP), in which it specifies the initiatives developed to implement the Global Compact principles in its operations. Throughout the publication of which this annex is a part, we also present the results of these initiatives and the progress of its commitments throughout 2014, which can be found in the GRI indicators reported by Copel. Principles of the Global Compact RESPECT and support the internationally recognized human rights in its area of influence SUPPORT freedom of association and recognize the right to collective bargaining ERADICATE effectively all forms of child labor from its production chain ASSUME a responsible and proactive preventive approach to environmental challenges ENCOURAGE the development and dissemination of environmentally responsible technologies ENSURE the company’s non- participation in violation of human rights ELIMINATE all forms of forced or compulsory labor STIMULATE practices that eliminate any kind of discrimination in employment DEvELOP initiatives and practices to promote and disseminate social and environmental responsibility FIGHT corruption in all its forms, including extortion and bribery PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES POLICIES AND MANAGEMENT SYSTEMS PRINCIPLES OF THE GLOBAL COMPACT DATE START / END Adherence to voluntary commitments in an effort to promote sustainability, ethical conduct and best practices in corporate governance: Global Compact, Call to Action Statement for Governments in Fighting Corruption, Business Pact for Integrity and Against Corruption and Principles for Sustainable Executive Education (PRME). Corporate contribution to Promotion of Green and Inclusive Economy: Actions for a more inclusive economy, which contributes to tacking the major challenges in sustainability. Management for Sustainability in the Supply Chain: Aims to contribute to the development of suppliers, establishing parameters linked to sustainability, proposing actions that promote and strengthen best practices throughout the supply chain. Our Energy Program - associates new opportunities in terms of career development, remuneration, and personal development with performance. Ethical Guidance Council – analyzes and provides guidance on processes related to ethical conduct in the Company. Committee for the Analysis of Reports on Psychological Harassment - aims to assess reports on psychological harassment in labor relations within the Company. Diversity Program: Implementation of the Action Plan and certification for the 5th Edition of the Pro-gender and Race Equity Program of the Department of Policies for Women. Internal Social and Environmental Committees – CISAS: Act as multipliers of sustainability concepts, enabling the identification of problem situations in the social and environmental aspect, strengthening the relationship with stakeholders. Copel's Corporate University – UniCopel: Implementation of Educational Planning and management of the Leadership Development Programs, Postgraduate, Master's and Doctoral degrees, and Languages. Corporate Management Program on Climate Change: Aims to discuss and deliberate actions associated with the study of the effects of climate change, implementation of Copel's Climate Change policy, and voluntary commitments undertaken. SUPPORT TO PUBLIC POLICIES AND MANAGEMENT IMPROvEMENT Participation in the Brazilian Global Compact Committee. 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 3 4 5 6 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 10 10 10 10 10 10 10 10 Various / Undetermined 2012 / Undetermined 2008 / Undetermined 2013 / Undetermined 2003 / Undetermined 2009 / Undetermined 2007 / 2017 2014 / Undetermined 2012 / Undetermined 2011 / Undetermined 10 2000 / Undetermined 79 07ANNEXAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex Participation in organizations in the electrical industry that discuss and promote energy efficiency and environmental improvements: Brazilian Assoc. of Electric Utilities, Energy Planning Company, Independent Energy Producers Assoc., the Environmental Committee of Cigrè, Brazilian Assoc. of Power Generation Companies, Brazilian Assoc. of Power Distribution Companies, Brazilian Assoc. of Large Power Transmission Companies, Brazilian Com. of Large Dams, Regional Council of Engineering, Architecture and Agronomy of the State of Paraná, FUNCOGE. Participation in associations that discuss and promote environmental improvements: Agenda 21 Forum of the State of Paraná, Federation of industries of Paraná, Interinstitutional Committee for Environmental Education of the Environmental Education Program, Watershed Committee of the State of Paraná, the Environmental Committee of Cigrè, Regional Council of Engineering, Architecture and Agronomy of the State of Paraná, Waste and Citizenship Forum Pr, Climate Change Forum of the State of Paraná, Environmental Committees of the Public Prosecutor’s Office Pr. Participation in the Corporate Citizenship Council of the State of Paraná - CPCE, for joint promotion of social responsibility in the State of Paraná. Voluntary participation in the Competitive Paraná Movement and in examining panels of awards: Nacional da Qualidade, MPE Brasil, and Paranaense da Qualidade em Gestão. Integrated Management of Water and Soil - Copel, Sanepar, and of State Departments, to create synergy of actions carried out, in its field of activity, in the context of watersheds, with the purpose of improving the quality and availability of water by perfecting the use, management, and proper conservation of soil, water, and forests. A founding member of the Brazilian GHG Protocol Program: Copel conducts and publishes annually the accounting report of greenhouse gas (GHG) emissions. PROGRAMS, PROJECTS, AND SOCIAL AND ENvIRONMENTAL ACTIONS Program to collect donations to charities and social service institutions, non-profit and of collective interest, through the energy bill. To apply, the entity must be welfare-oriented or be of collective interest, nonprofit, and submit the required documentation. Annual donation, through tax incentives, to Fund for the Rights of Children and Adolescents – FIA, Rouanet Act, Elderly Act, Incentive to Sports Act, PRONON, PRONAS Corporate volunteer Program - EletriCidadania: the program allows employees to use up to 4 hours/month for performing volunteer work. Program Cultivating Energy: Aims to implement community gardens in the buffer areas of Copel's power networks, in partner- ship with municipal administrations and associations of residents. Corporate Accessibility Program: Aims to make the company rigorously adapted in terms of accessibility issues, implementation of technological resources, and provision of training and educational campaigns, so that audiences with specific accessibility needs have full access to its facilities, information, and services. Eco-Efficiency Program – ECOPEL: Aims to concentrate the various eco-efficiency initiatives developed by Copel into one pro- gram that operates as a hub, interconnecting them, strengthening them, empowering them, and enabling new forms of opera- tion. Education for Sustainability Program: aims to train and develop professionals, formal and informal leaders of Copel, in sustain- ability-related issues. Copel's Seminar on Social and Environmental Best Practices - the initiative aims to promote projects and social and environ- mental practices. Susie Pontarolli Sustainability Award - aims to recognize and support initiatives aimed at contributing to the promotion of sustainable development and quality of life. Luz Fraterna Program: Program of the Government of the State of Paraná that makes payment of consumer bills registered in the Social Electricity Rate, provided that consumption does not exceed 120 kWh. Universalization of energy - "Program Light for All": Since its inception, the program has benefited more than 400,000 people in Paraná, through the connection of approximately 80,000 rural households, surpassing the goal initially established. The fifth and last phase of the Program ended in December 2014, totaling more than R$ 500 million invested. Program Live Well Paraná: in partnership with the Housing Company of Paraná - Cohapar - housing program for families with monthly income of up to six national minimum wages. Rural Nighttime Rate Program: incentive to increased agricultural production, to poultry and pig farmers, through discount pric- es for consumer units classified as rural, served in low voltage. Nighttime Irrigation Program: incentive to use irrigation to increase agricultural and poultry production and improve quality of life in rural areas. Subsidized rates and equipment to rural consumers. Paraná in Action: program promoted by the Special Department for Community Relations, with the objective of offering free services that promote citizenship and social inclusion. Copel participates by providing customer service and guidelines for safe and efficient use of electricity. Paraná Digital Program: digital inclusion in public education, through connection of State schools to the Internet. In partnership with the State Government / SEED, we take the Internet to schools, with priority to locations with low HDI. Today, there 2,210 State schools served by Paraná Digital. 1 2 3 4 5 6 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 9 10 Various / Undetermined 9 9 9 9 9 9 9 9 9 9 9 Various / Undetermined 10 10 2005 / Undetermined 2000 / Undetermined 2010 / Undetermined 2008 / Undetermined 10 1999 / Undetermined 2006 / Undetermined 2001 / Undetermined 2009 / Undetermined 2007 / Undetermined 2014 / Undetermined 2011/ Undetermined 2009/ Undetermined 2012 / Undetermined 2003 / Undetermined 2004 / 2014 2003/ Undetermined 2007 / Undetermined 2003 / Undetermined 2003/ Undetermined 2003 / Undetermined 10 10 10 10 10 10 10 10 80 07ANNEXAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex 2 2 2 2 2 2 2 2 2 2 2 Paraná Connected Program: the initiative foresees fiber optic internet access at affordable prices and speed of 1 Mbps, and intercon- nects public buildings to Copel’s fiber optics, allowing for greater speed and reliability of browsing to government agencies. State Broadband Plan - PEBL: aims to disseminate affordable Internet access to all municipalities of Paraná - sell communication services to providers and municipalities that join the plan and that, on the other hand assume the commitment of providing affordable Internet service. Social Electricity Rate: Established through Law No 10,438/2002, discounts are offered on electricity consumption up to 220 kWh, to families registered in the Single Register of Social Programs from the Federal Government, provided the other criteria laid out in ANEEL Resolution No. 414/2010 are observed. More than Energy Project: Implementation, expansion and consolidation of social investment projects and programs for the community. In 2015, the funds were geared toward supporting institutions and schools that assist the deaf and/or deaf and blind. Smart Grid Project: Installation of 2,000 telemetry points in the urban area of Curitiba and 1,000 points in the rural area of Colombo and Bocaiúva do Sul; reading is carried out every hour enabling error detection, power outage, and reading for billing without traveling. Project Illuminating Generations: Lectures to fourth-grade students from public schools, of informative and preventive nature regarding the conscious and safe use of electricity, use of natural resources (energy and water) and correct disposal of waste. Program + Clic Rural: Improving the quality of electric power supply in rural areas, with a focus on farming activities integrated with productive processes sensitive to interruptions. Sympathetic Bill: Incentive to customers who opt for receiving the bill by email; at each registration, Copel donates R$ 1.00 to the APAE institutions in the State of Paraná . PrevenCão: Awareness of the population about the importance of caring for pets to prevent accidents. Energy Efficiency Program: Geared toward the efficient use of electricity in residential, industrial, trade, and public schools installations located in Copel’s concession area. Program for Integrated Actions for Development and Citizenship - UPS Citizenship: Integrated actions for urban development and social promotion, and recovery of citizenship are carried out in the areas of installation of the Safe Paraná units (UPS). The initiative is developed in partnership with agencies and entities of the Federal, State, and Municipal administration, and civil society, contributing to improving public safety and local social and economic development. Program for Monitoring and Repopulation of Fish Fauna - Aims to monitor and repopulate the Company’s reservoirs and the rivers where Copel’s projects have some influence. Corporate Waste Management Program: Aims to reduce, reuse, measure, and monitor the solid waste generated by the Company. Riparian Woods Program: Aims to recover natural environments surrounding the reservoirs of Plants and other areas of interest to the Company. Experimental Station for Ichthyological Studies: Study and reproduce species suitable for repopulation of rivers and reservoirs in Paraná. Control of invasive and/or exotic species: Monitoring and control of invasive and/or exotic species of wildlife and flora. 1 1 1 1 1 1 1 1 1 1 1 Recovery of degraded areas: Monitoring and recovery of degraded areas. Forest Gardens: Its objective is the production of seedlings suitable for use by other Company programs. Botanical Garden: aims at conservation and research of plant species and housing collections of exotic ornamental plants. Corporate Management Program on Climate Change: Aims to develop strategies, propose goals and corporate indicators to address the commitments of Copel’s Climate Change Agenda. Iguaçu Regional Museum: Presents the social, cultural and environmental characteristics of the populations who have occupied the banks of the Iguaçu River. It holds the collection from the Archaeological Salvage programs and from the Cultural and Scientific Exploitation Memory of Flora and Wildlife in the implementation of the Ney Braga Hydroelectric Plant. Urban Forests Program: Assists municipalities in adjusting afforestation in order to have peaceful coexistence between trees and power distribution networks. 6 6 4 4 4 5 5 5 10 10 10 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 2003 / Undetermined 2010 / Undetermined 2002 / Undetermined 2014 / Undetermined 2015 / Undetermined 1970 / Undetermined 2015 / Undetermined 2015 / Indeterminado 2015 / Undetermined 2000 / Undetermined 2013 / Undetermined 1993 / Undetermined 2006 / Undetermined 2006 / Undetermined 1992 / Undetermined 2000 / Undetermined 1999 / Undetermined 1973 / Undetermined 2010 / Undetermined 2007 / Undetermined 2000 / Undetermined 2008 / Undetermined Learn more at: www.unglobalcompact.org. 81 07ANNEXAbout the Report Relevant AspectsMessage fromthe CEOSectorContextProfile About Copel GovernanceSustainability ManagementPerformance in Capitals Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial CapitalSocial AuditGRI Content IndexAssurance ReportAnnex

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