Companhia Paranaense de Energia (COPEL)
Annual Report 2016

Plain-text annual report

Summary 01 . About the Report.......................................................................................3 02. Message from the President..........................................................7 03. Industry Context........................................................................................9 04. About Copel...................................................................................................11 05. Governance and Sustainability..................................................17 06. Human Capital..........................................................................................29 07. Intellectual Capital..............................................................................36 08. Social and Relationship Capital...............................................40 09. Natural Capital..........................................................................................51 10. Infrastructure Capital........................................................................62 11. Financial Capital.....................................................................................68 12. Social Audit..................................................................................................74 13. GRI Content Index..................................................................................79 14. Annex - Incorporation of the Principles of the Global Compact........................................................................94 3 Copel | 2016 Sustainability Report 01 . ABOUT THE REPORT About the Report // Relevant and Strategic Aspects 01. About the Report Copel’s Sustainability Report is part of the Company’s commitment to The review of strategic and relevant aspects included, in addition to the transparency and open dialogue with all its stakeholders. The document is points raised by Copel’s senior leadership, the risks relevant to each business, published annually and presents management and performance information according to the strategic risk map. including executive decisions, achievements, operational results, and social, environmental, and economic impacts. The latest published report refers to the 2015 fiscal period. G4-29 This edition of Copel’s 2016 Sustainability Report contains information from January 1 to December 31 of the same year in the various areas of activity of Copel Another highlight of the document is the attention to the normative guidelines defined by the International Financial Reporting Standards (IFRS), included in the information from Financial Statements, the Social Audit from the Brazilian Institute of Social and Economic Analyzes (Ibase), and Progress Communication about the commitments made under the Global Compact. G4-15 Holding and its wholly-owned subsidiaries: Copel Geração e Transmissão S.A., The report was organized in two parts. The first presents an overview of Copel Distribuição S.A., Copel Telecomunicações S.A., Copel Renováveis S.A., Copel’s business model, bringing together the main social and environmental and Copel Comercialização S.A., except when stated otherwise. G4-17, G4-28, G4-30 impacts and risks of its operations. The second part describes the context The reporting methodology follows the guidelines of the G4 version of the Global Reporting Initiative (GRI), in the “core” option of adherence, and covers the set of indicators of the electric utilities sector disclosures. It is important to point out that in order to facilitate reading and identification of specific and performance of the Company’s capitals with a detailed approach to the relevant aspects of the business and its ability to create value. Relevant and Strategic Aspects data, all indicators disclosed are listed in the Content Index, which includes Copel began, in 2013, the process of building the matrix of material and external assurance through an independent audit by Deloitte. G4-32, G4-33 strategic aspects, which was reviewed and validated by stakeholders who have The current edition of the Report maintains the practice adopted by Copel in the previous cycle, following the structure and integrated reporting guidelines a relationship with the business and their degree of importance. The matrix was prepared based on consultations about perceptions, and the convergence of the different points of view of the audiences consulted, on media surveys, recommended by the International Integrated Reporting Council (IIRC). It is a and on national and international sustainability benchmarks, considering model intended to improve communication with stakeholders about aspects the aspects relevant to the Company’s business. Since then, the audiences relevant to the sustainability of Copel’s business, and demonstrate the considered priority have been employees, shareholders, investors, clients and Company’s ability to create value. G4-22, G4-23 consumers, communities, suppliers, and society. G4-24, G4-25, G4-26 44 About the Report Relevant and Strategic Aspects Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Copel | 2016 Sustainability ReportAbout the ReportConcerning employees, one of the Company’s main stakeholders, there ■ Aspects determined in previous cycles by stakeholders and senior are several approaches to engagement throughout the year. The strategic management during the engagement process, available online; G4-24 planning process involving professionals from different areas and the process of preparing the Sustainability Report itself are key to reflecting on strategic ■ Issues identified as material for the electricity sector by the most prestigious sources in the market, such as RobecoSAM (which evaluates companies aspects of the business. There is also regular communication on material for their inclusion in the Dow Jones Sustainability Index, DJSI), the aspects through the magazine Copel & Sustentabilidade and the newsletter Corporate Sustainability Index (ISE BM&FBOVESPA), SASB (sustainability concerning Education for Sustainability, available online. reporting standards for publicly held companies in the American stock exchange), and RepRisk 1. The priority of the aspects was defined based on: ■ Risks to the business, according to Risk Maps prepared for each Employee Vision of Copel Sustainability Copel business; In order to obtain a diagnosis concerning sustainability, the Employee Opinion Survey found that almost 90% of the 5,915 employees who answered the survey are committed to Copel policies, including the Sustainability Policy, and 87% understand the importance of following the Company’s sustainability guidelines, aiming for the conscious use of natural resources and respect for the environment. ■ Reputational risks, based on the analysis of Copel’s social, environmental, and governance risks via RepRisk; ■ The main social and environmental impacts of Copel’s operations. While most aspects mapped during the previous cycle remained unchanged, two aspects were updated in terms of coverage. In addition, two new aspects gained prominence in the matrix. The aspect from the previous cycle called Training and Availability of the In order to stay informed of industry trends and new organizational and Workforce is now considered Human Capital Management. sustainability challenges, Copel annually reviews its matrix of material and strategic aspects. The objective was to better reflect the importance of people management, including the vision of investing in developing Human Capital. In order to obtain the current view on these matters, all Officers of Copel Energy Planning has become part of New Assets, in order to reflect their Holding and the Wholly-Owned Subsidiaries were consulted in 2016, and expansion and construction capacity. benchmark materials were analyzed. The review process included: G4-18, G4-37 Two new aspects were also highlighted: Innovation Culture and Risk and Crisis Management. G4-27 About the Report Relevant and Strategic Aspects Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 1RepRisk — Media analysis tool used by RobecoSAM throughout the process for the evaluation of companies for the DJSI. 5 Copel | 2016 Sustainability ReportAbout the ReportMatrix of relevant and strategic aspects G4-19, G4-23 Structure 1 Business Risks 2 Reputational Risks 3 Social and Environmental Impacts of the Operations Social and Relationship Capital Relationship with Customers and Consumers Natural and Infrastructure Capital Operational Excellence and Eco-efficiency Human Capital Governance, Ethics and Compliance Intellectual Capital Inovation Culture Financial Capital Economic and Financial Performance 1 2 3 2 1 1 Supplier Management Climate Change Occupational Health and Safety Risks and Crisis Management Acess to Financial Capital 1 3 1 1 1 Relationship with Communities Impacts on Ecosystems Human Capital Management Energy Planning and New Assets 2 3 2 3 1 1 LEGEND: Previous Aspects New Aspects Previous Ajusted Aspects Scope of aspects revised based on business risks / impacts Regulatory Matters 1 Learn about other results obtained by Copel, available online: G4-26 Administration and Financial Statements 20F Report Social and Environmental Reports Copel’s Materiality Process For questions, suggestions or explanations about the content of this report, Copel provides a communication channel Talk to Us - Sustainability. G4-31 6 About the Report Relevant and Strategic Aspects Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Copel | 2016 Sustainability ReportAbout the Report 02. Message from the President G4-1, G4-2 The political and economic These acknowledgments, achieved several times in this decade, show the instability of the country saw no strong perception that society and our customers have of our results and mitigating factors in 2016; it was another year of major challenges for the production sector in Brazil. undertakings. In 2016, we made the largest investment in the Company’s history: over BRL 3.57 billion in all our areas of operations, with net profit of BRL 947.8 million. At Copel, many decisive aspects Copel Telecomunicações was recognized in the 2016 Telecom Yearbook as regarding company performance one of the 10 most profitable companies in 2015 in the Telecommunications in the period were related to the sector, conferred by Fórum Editorial. The fiber optic backbone of Copel energy distribution segment. Throughout the year, default rates declined, although consumption remained stagnant. The good news came with the fourth tariffing cycle, Telecomunicações, which reaches all municipalities in the state, is already considered one of the best and fastest in the country. The energy trading company, Copel Energia, was created to offer a reliable supply option to companies migrating to the free market, seeking better contracting conditions for energy inputs. which raised the asset base to In 2016, Copel Renováveis continued with the work on the fourth wind farm in BRL 4.9 billion at the end of 2016, the state of Rio Grande do Norte, with estimated investments of approximately due to Aneel’s recognition of investments made in the last four years. BRL 2.2 billion. By 2018, the complexes will total 28 wind farms in that region. With this, the equivalent in wind power at Copel will total 665 MW. Currently, 93% of the Company’s generation comes from renewable sources. About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact This increase represents a new stimulus to the distributor’s construction program, which is based on a more realistic level of assets in order to maintain its economic-financial balance, and provide services that In the transmission segment, the year was marked by 1,678 km of lines entering operation, and the implementation of a BRL 258.8 million project, resulting from an auction won by the Company in 2015. This undertaking was to replace the structure at Avenida das Torres, between Curitiba and São José dos Pinhais, with a fully underground line, which, in addition to increasing reliability meet the sector’s new quality requirements. We point out that in 2016, Copel in supply, allows the government to implement work to promote mobility once again ranked first in the customer’s evaluation of the Abradee Award, and and urban landscaping in this important corridor of access to the capital received the CIER trophy for Best Distributor in Latin America. city of Paraná. 7 Copel | 2016 Sustainability ReportAbout the ReportIn order to address our works and projects program in the generation and biogas, while avoiding the environmental impact of disposing waste in nature. transmission segments, in 2016 we issued approximately BRL 1 billion in debentures, which demonstrates the trust and reputation that Copel has historically enjoyed with investors and the market. We reinforce our commitment to fighting corruption, an extremely important issue in our current situation, as well as the ethical and legal compliance of our practices, by elevating the areas of governance, risk, and compliance, structured in 2015, to a status of executive office. The new department reinforces our belief that transparency and accountability are key practices for the continued and sustained growth of the business. Copel also celebrated its best ever position in the Corporate Sustainability Index (ISE). The voluntary participation in this index recognizes the performance About the Report Message from the President of companies listed on the São Paulo Stock Exchange regarding sustainable Industry Context development, and demonstrates our inalienable commitment to the principles About Copel of the Global Compact. The differentiators that have guaranteed the Company a significant improvement in its score in the ISE range from practical actions focused on climate change, with commitments extended to the value chain, to the adoption of the Integrated Report – an accountability model that favors transparency by associating economic, social, environmental, and The Company increased its investments in people management, the main focus governance results. of the current management, in order to enable employee self-development and more active participation in planning and execution of our strategy. By mobilizing 94% of employees in face-to-face consultations that analyzed the Company’s challenges and brought up over 5,000 suggestions and criticisms, the Anima Program began an engagement movement that intends to prepare Copel to face the future through innovation across its business areas. In 2017, the program will continue through the implementation of improvements, and promotion of collaborative environments - such as the corporate social network - and another phase of training leaders committed to the UN Principles of Responsible Management Education (PRME), as well as the development of teams aligned with a common purpose. The search for innovation is part of our daily routine, and today one of our main objectives is to foster this culture throughout the Company in order to contribute to its long-term vision. Good examples of this effort are the Mais Clic Rural program, implementing smart grids at the main agribusiness centers, and the micro-generation project in Entre Rios do Oeste, which associates small- and medium-sized pig farmers with large power generation condominiums using 8 These are initiatives that show an important point in common: they are actions that will allow Copel to continue to grow sustainably in the coming decades, and increase the capacity to serve its customers with quality and agility. Throughout this publication, we show our audiences the company’s guiding principles, the initiatives carried out in the year in order to put into practice our strategy, and paths to creating value that have been opened to those who enable the growth and soundness of the business: our employees, customers, shareholders, suppliers, organizations, and communities around our projects. ANTONIO SERGIO DE SOUZA GUETTER Enjoy your reading Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Copel | 2016 Sustainability ReportAbout the Report03. Industry Context G4-1, G4-2 The ongoing Brazilian economic crisis in 2016 continued the trend of reducing Another important move in 2016 was the expansion of the free market through energy consumption in the country. The industrial sector recorded a drop of 2.9% the retail market, with the migration of captive customers from the Regulated in the year, followed by trade, which dropped 2.5%. Residential consumption Contracting Environment (ACR) to the Free Contracting Environment (ACL). The alleviated the reduction, increasing by 1.4% during 2016, but did not prevent the Electricity Trading Chamber (CCEE) recorded a 25-fold increase in the number of sector from posting an overall decline of 0.9% in the period, according to data approved applications for consumers to adhere to ACL last year, compared with from the Energy Research Company (Empresa de Pesquisa Energética - EPE). 2015, totaling 93 requests. In this way, the scenario already recorded in 2015 by the National Interconnected This mobility between environments helped free consumption grow 18.6% System (Sistema Interligado Nacional - SIN) continued: energy surplus, distributors in November alone, according to the Monthly Electricity Market Review, of overcontracting, and price retraction. Data from the National System Operator November 2016. (Operator of the National Integrated Grid - ONS) indicates that SIN’s energy load recorded a drop of 0.1% in 2016 compared with the previous year. The expectation for a less recessive economic environment, the increase in investor confidence, and the low basis of comparison allow us to expect a positive This scenario helped EPE calculate a surplus of 9,000 MW by 2019, which, added to prospects for the economic scenario for the years to come, justified the Ministry evolution in consumption in 2017. Recovery, however, will depend on the expansion route of the Gross Domestic of Mines and Energy’s (MME) decision to cancel the 2nd Energy Reserve Auction, Product (GDP), which has an estimated growth of 0.5% for 2017 by EPE. scheduled for the month of December 2016. Add to this the expansion of installed capacity for generating electricity in 2016. sector crisis. EPE projects an average growth of 3.5% in consumption for the four- Data from the National Electricity Agency (ANEEL) showed an increase of 9,526 year period 2017-2021, if the industrial sector resumes activity in the second half MW, the largest increase in generation capacity recorded since the beginning of of the year and residential and commercial consumption increases, with average the historical series, in 1998. growth rates of approximately 3.8% and 3.9%, respectively, in the period. The year 2017 will be challenging, and key to beginning a reversal in the electricity The supply of infrastructure monitored by the MME recorded an increase of 4,777 It will be a year of significant relief amid the turbulence in the economy in the last km of transmission lines. The transmission area experienced an excellent year, three years, albeit a relief that will probably be unable to reverse the downward with the closing of 21 lots of lines auctioned by ANEEL in October, with a projected trend in price, due to increased installed capacity, which will be 7,120 MW in 2017 investment of BRL 11.5 billion in 6,000 kilometers of lines. alone, according to Aneel. 9 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Copel | 2016 Sustainability ReportAbout the ReportContext - Operation of the Brazilian Electricity Sector PLAYERS Who are the major players on the market of electric power in Brazil. HOW ENERGY SUPPLY WORKS e h t f o e e t t i m m o C r o t c e S c i r t c e l E g n i r o t i n o M CMSE E E P P N N C C E M M L E E P E N N C A Conselho Nacional National Policy and Energy Council de Política de Energia Ministry of Mines and Energy Conselho Nacional National Electric Energy Agency de Política de Energia EPE h c r a e s e R y g r e n E y n a p m o C S N O National Operator of the Electric System E E C C Electric Power Marketing Chamber g n i r o t i n o m d n a g n n n a l p i , n o i s i v r e p u s s t n e g a d n a , 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 s e c i v r e s f o l e v e L 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. 10 w o fl y e n o M w o fl y g r e n E s m s i n a h c e m g n i t c a r t n o C 1 y t i l i b i s s o P 2 y t i l i b i s s o P REGULATED MARKET: Captive consumers buy energy from the distribution concessionaries to which they are connected. Each consumer unit pays only a montlhy electricity bill. Rates are regulated by the Govermment, and the price is the result of a mix of long-terms contracts. Fees and taxes Government Electricity Bill Remuneration as per auction contract Remuneration for services and transmission GENERATION TRANSMISSION DISTRIBUTION CONSUMER ONS Controls power generation Indicates the amount of energy defines prices AUCTION FOR POWER SUPPLY MME • defines price cap ANEEL (cid:127) promotes auctions CCE (cid:127) ooperationalizes Revenue from Distribution Service Quota A Quota B Purchase of electricity Operating costs Transmission Depreciation quota Fees and taxes Destination: Generation. Transmission and government Return on investment 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). Money flow Government Energy flow Sector Charges Distributor Invoice + Generator Invoice Payment for transmission services Remuneration for distribution services Energy flow GENERATION TRANSMISSION Contracting mechanism TRADER DISTRIBUTION Agreements to supply power via trader CONSUMER FREE OR SPECIAL About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Copel | 2016 Sustainability ReportAbout the Report Governador Ney Braga Hydroelectric Power Plant The Presence of Copel in Brazilian States // Interest in the Energy Market in 2016 // Strategic Objectives and Guidelines Shareholding Structure // Risks and Impacts of Copel’s Businesses 04 . ABOUT COPEL 11 Copel | 2016 Sustainability Report Presença da Copel nos estados brasileiros Presença da Copel nos estados brasileiros Presença da Copel nos estados brasileiros Presença da Copel nos estados brasileiros Presença da Copel nos estados brasileiros Presença da Copel nos estados brasileiros G4-8 G4-8 G4-8 G4-8 G4-8 G4-8 The Presence of Copel in Brazilian States G4-8 Presença da Copel nos estados brasileiros Goiás Goiás Goiás Goiás Goiás Goiás 04. About Copel Companhia Paranaense de Energia - Copel was founded in October 1954, and is a corporation, established in the form of a quasi-public society and controlled by the Government of the State of Paraná, with shares traded at the São Paulo stock exchange (BM&FBovespa), and at the stock exchanges in New York and Madrid. G4-3, G4-7 It is the largest company in Paraná, with headquarters in Curitiba (PR), and operations in ten Brazilian states. The Company operates with cutting- edge technology in generation, transmission, distribution, and marketing of energy, in addition to telecommunications and natural gas. It operates a comprehensive and efficient electrical system with its own power generation complex, transmission lines, substations, lines, and electrical networks from the distribution system, and a modern fiber optic telecommunications system that integrates all cities in the state. G4-4, G4-5, G4-6 Interest in the Energy Market in 2016 G4-8 G4-9 G4-8 93% of generated power is renewable Mato Grosso Mato Grosso Mato Grosso Mato Grosso Mato Grosso Mato Grosso Mato Grosso Brazil Southern Region Paraná Santa Catarina Santa Catarina Santa Catarina Santa Catarina Santa Catarina Santa Catarina Main products (%) Power Generation (1) Electric Power Transmission (4) Distribution of Electric Power (5) Gas Distribution (7) 3.2 1.8 (6) 6.1 2.2 (2) (3) 20.5 (2) (3) 51.0 Santa Catarina São Paulo 9.1 (6) 34.6 24.2 97.3 Rio Grande do Sul Rio Grande do Sul Rio Grande do Sul Rio Grande do Sul Rio Grande do Sul Rio Grande do Sul Paraná Paraná Paraná Paraná Paraná Paraná 27.1 100.0 Rio Grande do Sul Paraná Source: 2016 Administration Report (1) Installed capacity. Copel’s interest in wind farms not included (2) Interest in the Itaipu HE Powerplant not included (3) Plants in the Paranapanema River not included (4) The market refers to the Annual Revenue Allowed – RAP (5) Grid market (6) Source: Empresa de Pesquisa Energética (EPE) - preliminary data (7) Includes volume distributed in Paraná, including thermoelectric USINA HIDRELÉTRICA USINA HIDRELÉTRICA USINA HIDRELÉTRICA USINA HIDRELÉTRICA HYDROELECTRIC USINA HIDRELÉTRICA USINA HIDRELÉTRICA POWER PLANT USINA EÓLICA USINA EÓLICA WIND FARM USINA EÓLICA USINA HIDRELÉTRICA USINA EÓLICA USINA EÓLICA USINA EÓLICA SUBESTAÇÃO SUBESTAÇÃO SUBESTAÇÃO SUBSTATION SUBESTAÇÃO SUBESTAÇÃO SUBESTAÇÃO SUBESTAÇÃO LINHA DE DISTRIBUIÇÃO LINHA DE DISTRIBUIÇÃO DISTRIBUTION LINE LINHA DE DISTRIBUIÇÃO LINHA DE DISTRIBUIÇÃO LINHA DE DISTRIBUIÇÃO LINHA DE DISTRIBUIÇÃO LINHA DE TRANSMISSÃO LINHA DE TRANSMISSÃO LINHA DE TRANSMISSÃO TRANSMISSION LINE LINHA DE TRANSMISSÃO LINHA DE TRANSMISSÃO LINHA DE TRANSMISSÃO ANEL DE FIBRA ÓTICA LINHA DE TRANSMISSÃO ANEL DE FIBRA ÓTICA FIBER OPTIC NETWORK ANEL DE FIBRA ÓTICA ANEL DE FIBRA ÓTICA ANEL DE FIBRA ÓTICA ANEL DE FIBRA ÓTICA 1212 USINA EÓLICA LINHA DE DISTRIBUIÇÃO ANEL DE FIBRA ÓTICA Maranhão Maranhão Maranhão Maranhão Maranhão Maranhão Goiás Maranhão Rio Rio Rio Grande do Grande do Rio Rio Rio Grande do Norte Norte Grande do Grande do Grande do Norte Norte Norte Norte Rio Grande do Norte Bahia Bahia Bahia Bahia Bahia Bahia Bahia Minas Gerais Minas Gerais Minas Gerais Minas Gerais Minas Gerais Minas Gerais Minas Gerais São Paulo São Paulo São Paulo São Paulo São Paulo São Paulo About the Report Message from the Presidente Industry Context About Copel The Presence of Copel in Brazilian States Interest in the Energy Market in 2016 Strategic Objectives and Guidelines Shareholding Structure Risks and Impacts of Copel’s Businesses Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact About CopelCopel | 2016 Sustainability Report Strategic Objectives and Guidelines Strategic Reference Strategic Objectives Copel has assumptions and guidelines set forth in its strategic reference Copel’s strategy guides business conduct and operation in order to achieve its which guides management and all actions, and internal and external decisions Vision: “To become a benchmark in the areas where it operates, sustainably of the company. G4-56 To become a benchmark in the areas where it operates, sustainably generating value. Supply energy and solutions for sustainable development Vision Mission generating value.” For this purpose, the Company maintains a structured strategic planning process that is revised annually, taking into account changes in its sectors of operation, the economy, regulatory changes, and stakeholder demands. The strategic guidelines established by the Board of Directors - CAD, which guided current strategic planning are: Corporate Guidelines Guideline for the Businesses • Ethics: Result of a collective agreement that defines individual behaviors aligned to a common goal. • Respect for people: Consideration for others. • Dedication: Ability to engage intensely and completely in the work, contributing to the achievement of the organization’s objectives. Profitably and sustainably expand businesses. • Transparency: Reporting the Company’s decisions and achievements in order to inform its stakeholders of any positive or negative aspects. Electric Sector ■ Copel Geração e Transmissão S.A. ■ Copel Distribuição S.A. ■ Copel Renováveis S.A. ■ Copel Comercialização S.A. Maintain concessions; Increase share of alternative renewable sources • Health and safety: Healthy work environment in which workers and Values managers collaborate to use a process of continuous improvement to Invest in innovation, modernization of assets, and people management. protect and promote safety, health, and well-being of all. Electric, Telecommunications, Sanitation, and Gas Sectors Maximize profitability of assets in society • Responsibility: Managing the company in a sustainable way, respecting the rights of all stakeholders, including future generations and the commitment to supporting all life forms. • Innovation: Applying ideas in processes, products, or services, in order to improve something that already exists or build something different Maintain excellence in costs, processes, and quality. Telecommunications Sector ■ Copel Telecomunicações S.A. Expand its customer base and offer services with high added value and better. 13 About the Report Message from the Presidente Industry Context About Copel The Presence of Copel in Brazilian States Interest in the Energy Market in 2016 Strategic Objectives and Guidelines Shareholding Structure Risks and Impacts of Copel’s Businesses Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact About CopelCopel | 2016 Sustainability Report Shareholding Structure of 12.31.2016 G4-17 State of Paraná 58.63% Voting 31.07% Total Bndespar 26.41% Voting 23.96% Total Eletrobrás 1.06% Voting 0.56% Total Other Shareholders 0.22% Voting 0.24% Total Free Float 13.68% Voting 44.17% Total BM&FBovespa 12.85% Voting 31.29% Total Nyse 0.83% Voting 12.85% Total Latibex 0.00% Voting 0.03% Total r (1) Copel Geração e Transmissão S.A. (100%) (1) Copel Distribuição S.A. (100%) (1) Copel Telecomunicações S.A. (100%) (1) Copel Renováveis S.A. (100%) (1) Copel Comercialização S.A. (100%) (2) UEG Araucária LTDA. (60%) (1) Nova Eurus IV Energias Renováveis S.A. (100%) (1) São Bento Energia (100%) (1) Cutia Empreendimentos Eólicos SPE S.A. (100%) (4) Marumbi Transmissora de Energia S.A. (80%) (1) Nova Asa Branca I Energias Renováveis S.A. (100%) (4) Costa Oeste Transmissora de Energia S.A. (51%) (1) Nova Asa Branca II Energias Renováveis S.A. (100%) Central Geradora Eólica São Bento do Norte I S.A. (100%) (2) Elejor Centrais Elétricas do Rio Jordão S.A. (70%) (4) Mata de Santa Genebra Transmissora S.A. (50.1%) (1) Nova Asa Branca III Energias Renováveis S.A. (100%) GE Olho d’Água S.A. (100%) Central Geradora Eólica São Bento do Norte II S.A. (100%) (2) Companhia Paranaense de Gás Compagás S.A. (51%) (4) Guaraciaba Transmissora de Energia (TP Sul ) S.A. (49%) (1) Santa Maria Energias Renováveis S.A. (100%) GE Boa Vista S.A. (100%) Central Geradora Eólica São Bento do Norte III S.A. (100%) (2) UEG Araucária LTDA (20%) (4) Matrincha Transmissora de Energia (Tp Norte) (49%) (1) Santa Helena Energias Renováveis S.A. (100%) GE Farol S.A. (100%) Central Geradora Eólica São Miguel I S.A. (100%) (3) Carbocampel S.A. (49%) (4) Integração Maranhense Trans. de Energia S.A. (49%) (1) Ventos de Santo Uriel S.A. (100%) GE São Bento do Norte S.A. (100%) Central Geradora Eólica São Miguel II S.A. (100%) (3) Copel Amec S/C Ltda. (48%) (em liquidação) (1) Brisa Potiguar S.A. (1 00%) (4) Dominó Holdings S.A. (49%) (4) Caiuá Transmissora de Energia S.A. (49%) (4) Cantareira Transmissora de Energia S.A. (49%) (4) Paranaíba Transmissora de Energia S.A. (24.5%) (4) Transmissora Sul Brasileira de Energia S.A. (20%) (5) Uhe Gov. Jayme Carnet Junior (Mauá) (51%) (5) UHE Baixo Iguaçu (30%) (1) Wholly-owned subsidiary (2) Associated companies (2) Affiliated companies (3) Jointly-held companies (4) Consortiums 14 Central Geradora Eólica São Miguel III S.A. (100%) (3) Sercomtel S.A. Telecomunicações (45%) Usina de Energia Eólica Cutia S.A. (100%) (3) Foz do Chopim Energética LTDA (35.8%) Usina de Energia Eólica Guajiru S.A. (100%) (3) Dois Saltos Empreendimentos de Geração de Energia Elétrica (30%) Usina de Energia Eólica Jangada S.A. (100%) (3) Dona Francisca Energética S.A. (23%) Usina de Energia Eólica Maria Helena S.A. (100%) (4) Voltalia São Miguel do Gostoso Participações S.A. (49%) Usina de Energia Eólica Potiguar S.A. (100%) (4) Paraná Gás Exploração e Produção (30%) Usina de Energia Eólica Esperança do Nordeste S.A. (100%) Usina de Energia Eólica Paraíso dos Ventos do Nordeste S.A. (100%) About the Report Message from the Presidente Industry Context About Copel The Presence of Copel in Brazilian States Interest in the Energy Market in 2016 Strategic Objectives and Guidelines Shareholding Structure Risks and Impacts of Copel’s Businesses Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact About CopelCopel | 2016 Sustainability ReportRisks and Impacts of Copel’s Businesses Risk factor G4-2 Internal Risk Factors: The chart below summarizes the main risks in the industry that could affect our businesses and that are considered in our strategic planning. More details about these risks are available in the 20-F Report. Operations 5. Uncertainties businesses. in projections for energy demand can adversely impact 1 2 3 4 unfavorable for the Company. 6. Legal actions that may have a material adverse effect if the outcome is External Risks Internal Risks 7. Security breach of information, employee errors and misconduct can harm our business and reputation. About the Report Message from the Presidente Industry Context About Copel The Presence of Copel in Brazilian States Interest in the Energy Market in 2016 Strategic Objectives and Guidelines 8A. Contractors involved in the operation may not be in compliance with the law Shareholding Structure Operation Market Expasion and with Copel’s ethical values. 5 6 7 8A 9 10 11 12 8B Consumer Market External Risk Factors: 9. Certain consumers in our area of concession may suspend the acquisition of energy from our distribution unit. 1. Political, economic, and regulatory conditions, which include a series of topics, 10. Part of our operating revenue comes from Free Consumers, who may seek such as economic development of the country, changes in tariff policies, other suppliers of energy once their supply agreements expire. regulations and changes in the concession regime, taxation, and cases of corruption and unlawful conduct. 11. Default resulting from difficulty in receiving amounts billed to our customers. 2. Fluctuations in the currency rate comparing the Brazilian Real with foreign currencies Expansion can increase the cost of servicing our debt in foreign currency and acquisition of electricity from Itaipu, as well as create additional inflation pressure that can limit access to international markets. Factors that can have an adverse effect on our net profit and cash flows, can also result in uncertainties in the Brazilian economy and the Brazilian real estate market. 3. Negative performance of the economy 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 conservation of water/energy that are unfavorable to the businesses. 15 12. Limited access to capital, due to the fact that the Company is subject to the guidelines of the National Monetary Council and Brazil’s Central Bank concerning the level of credit that financial institutions can offer to companies of 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. Risks and Impacts of Copel’s Businesses Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact About CopelCopel | 2016 Sustainability ReportSocial and Environmental Impacts of Copel’s Operations G4-2 It is in Copel’s mission to serve society, providing infrastructure, energy, and technology necessary for people’s lives, and available for development. Some of Copel’s operations presented below may generate relevant impacts to local communities and society as a whole. Details on various ways to mitigate the social and environmental impacts of our operations are presented in Sections 8 and 9 of this report. Main social and environmental impacts and their management in Copel’s projects Construction Operations Copel studies, evaluates, and measures the impacts on communities and ecosystems when obtaining environmental licensing for its works. In order to mitigate negative impacts and boost the positive impacts, Cope develops social and environmental programs with the impacted communities, the government, and local leaders. All Copel operations follow the requirements for mitigating impacts that are defined and approved during the licensing phase. Possible displacement of families Local development Displacement cases are evaluated through a social and economic registration, and when any social vulnerability situation is identified, Copel provides for the family relocation process and social compensation for the damages caused by installing its projects. Possible land and production losses Copel provides the owners with compensatory remuneration for their losses Communities Copel seeks to meet the expectations of the population surrounding its projects, investing in infrastructure and services that generate benefits for the communities where it operates. Most of the actions implemented originate from legal requirements related to licensing of its projects. Income generation Copel pays to lease the land for implementing wind farms. For hydroelectric power plants, financial compensation is paid to municipalities in proportion to the flooded areas and according to the energy produced. There is also ICMS (tax on commercialization of goods and services) for energy production, amounts paid to the municipalities where the projects are located. Significant increase in Service Tax collection (ISS), charged on civil construction works, in the municipalities where the works are carried out. Risk of accidents involving the local population Copel promotes several informative events to promote the conscious and safe use of electricity. Building Copel’s assets may alter ecosystems, resulting in loss of biodiversity Copel studies environmental impacts prior to the installation of its projects, and if such impacts cannot be avoided, vegetation suppression programs are implemented, as well as monitoring and recovery of flora and fauna, recovery of Permanent Preservation Areas, and forest replenishment, among others. Ecosystem Generation of hazardous waste and the use of natural resources As defined in the licenses, each project implements specific programs to minimize and mitigate these impacts. About the Report Message from the Presidente Industry Context About Copel The Presence of Copel in Brazilian States Interest in the Energy Market in 2016 Strategic Objectives and Guidelines Shareholding Structure Risks and Impacts of Copel’s Businesses Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 16 About CopelCopel | 2016 Sustainability Report05 . GOVERNANCE AND SUSTAINABILITY Governance Structure // Performance of Governance Bodies // Integrity Practices // Sustainability Management 17 Copel | 2016 Sustainability Report 05. Governance and Sustainability The following principles guide the Company’s corporate governance: In 2016, Copel improved its corporate governance practices by creating transparency, equity, accountability, and corporate responsibility. Based the Governance, Risk, and Compliance Office. The creation of on these principles, our Governance Policy, whose main objective is to contribute to Copel’s continuity and establish the standard and best practices of corporate governance to be adopted by the Company and its wholly-owned subsidiaries. this office accelerated compliance with the requirements of the new State Law No. 13,303, of 2016, and is aligned with the Anti-Corruption Act regulated in 2015. The corporate governance practices adopted comply with the requirements In its structure, the new department integrated the responsibilities of other established for BM&FBOVESPA level 1 companies. We also adopted as a areas of Copel that until then had been responsible for risk management, benchmark the Code of Best Practices in Corporate Governance from the governance, and integrity, placing the Company among the first Brazilian Brazilian Institute of Corporate Governance (IBGC). For the Company to be permanently guided by ethically sound principles, all those working on its behalf are governed by code of conduct developed according to Copel’s values, the Principles of the Global Compact, and the Principles of Corporate Governance. companies to incorporate business sustainability management activities into this area, seeking to align its governance practices with those of companies that are global benchmarks in this aspect. G4-35, G4-36, G4-45 Learn about the governance practices and policies that guide the Company’s Both the Governance Policy and the Code of Conduct are approved by the businesses: Company’s highest governance body - the Board of Directors. G4-42 • Corporate Governance Policy • Governance Practices About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 18 Governance and SustainabilityCopel | 2016 Sustainability Report Governance Structure G4-34, G4-38, G4-42 Copel’s management structure consists of four permanent deliberative bodies, broken down by levels of responsibility and advised by technical committees. General Shareholders' Meeting Defines the business guidelines and make strategic decisions. (cid:127) • 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. (cid:127) Members: CEO, 5 directors and 1 adjunct director. (cid:127) Mandate: 2 years after election by the Board of Directors. Fiscal Council Permanent organ that reviews and advises the financial statements and supervises the actions of the managers. (cid:127) Members: 5 effective and 5 substitutes. (cid:127) Mandate: 1 year after the election in Assembly. Internal Audit C h i e f E x e c u t i v e O ffi c e Committee Disclosure of Relevant Acts and Facts Supports the Department of Investor Relations in the practice of Disclosure Policy. • Members: 15. Holding Business Development Office Finance and Investor Relations Office Legal and Institutional Relations Office Corporate Management Office Governance, Risk and Compliance Department para Governance, Risk and Compliance Office Ethical Orientation Committee Ensures the fulfillment of the code of conduct. (cid:127) Members: 12 (with 11 employees and one representative of civil society). (cid:127) Mandate: 1 year after the election in Assembly. Board of Directors Deliberates and defines the overall direction of the business. (cid:127) Members: 9 (5 being independent). (cid:127) Mandate: 2 years after the election in Assembly. Audit Committee Monitors, reviews, supervises, accompanies and makes recommendations on the Company's activities. (cid:127) Members: 3 independents and members of the board of directors. (cid:127) Mandate: 2 years. Corporate Risk Management Committee Advises the Audit Committee in the definition of guidelines and strategies for the Company's risk management. (cid:127) Members: 11 employees (Holding and wholly-owned subsidiaries). (cid:127) Mandate: 2 years 19 About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Governance and SustainabilityCopel | 2016 Sustainability Report General Assembly The Shareholders’ General Meeting is the forum in which shareholders have the power elected by the Board of Directors for a term of two years. Executive Board meetings are held every two weeks and the minutes are recorded in the appropriate book. to decide all business regarding the Company’s purpose and to make resolutions Board Composition deemed convenient concerning the defense and development of the Company. The Annual General Meeting is held in the first four months of each year, and Extraordinary General Meetings may be convened whenever deemed necessary, on any date. Board of Directors ■ CEO: Antonio Sergio de Souza Guetter ■ Chief Corporate Management Officer: Gilberto Mendes Fernandes ■ Chief Financial and Investor Relations Officer: Luiz Eduardo da Veiga Sebastiani ■ Chief Legal and Institutional Relations Officer: Cristiano Hotz ■ Chief Governance, Risk and Compliance Officer: Fabio Malina Losso ■ Chief Bussines Development Officer: Jonel Nazareno Iurk Copel’s Board of Directors - CAD is composed of nine members, five of them Fiscal Council independent. G4-40 The CAD holds regular meetings according to the pre-established schedule, in addition to possible extraordinary meetings (on average, there are eight meetings per year). In 2016, ten regular and six extraordinary meetings were held. G4-47 Composition of the Board of Directors - period 2015-2017 G4-38, G4-39 Copel’s Fiscal Council is permanent, composed of five members and five alternates elected by the General Meeting for a term of one year. It convenes monthly to deal with matters that include, among others, supervision of the acts of the administrators, analysis, and opinion on the quarterly and annual financial statements. All meetings of the Fiscal Council - both regular and extraordinary - are recorded in the appropriate book and, sometimes, in accordance with legal requirements, opinions are also recorded. ■ President: Fernando Xavier Ferreira ■ Board member: Antonio Sergio de Souza Guetter ■ Board member: Mauro Ricardo Machado Costa ■ Board member: José Richa Filho ■ Board member: Carlos Homero Giacomini ■ Board member: Marlos Gaio ■ Board member: Sandra Maria Guerra de Azevedo ■ Board member: Sergio Eduardo Weguelin Vieira ■ Board member: Hélio Marques da Silva Executive Board Copel’s Executive Board is responsible for executive roles and has the exclusive Composition of the Fiscal Council - period 2016-2017 Members ■ George Hermann Rodolfo Tormin ■ Nelson Leal Junior ■ Massao Fabio Oya ■ João Carlos Flor Junior ■ (vacant position) Alternates ■ Osni Ristow ■ Roberto Brunner ■ Gilmar Mendes Lourenço ■ Aurelio Belarmino Barbosa responsibility of representing the Company. It is composed of six members who are ■ Vinícius Flor 20 About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Governance and SustainabilityCopel | 2016 Sustainability Report Audit Committee G4-49 Reporting directly to the Board of Directors, the Audit Committee is composed of three risk matrix, managing it, and recommending preventive security measures to the members of the Board, who are independent according to Rule 10A-3 of the Securities business. This committee has an annual agenda of ordinary meetings, and may convene Exchange Act, with the characteristics, composition, operation, and powers established extraordinarily whenever necessary. G4-45, G4-46 in a specific Internal Regulation. G4-40 In 2016, the Corporate Risk Management Committee reported to the Audit Committee As of the next term of office of the members of the Committee, which will begin in May its monitoring of 19 significant concerns regarding the Company’s business, of the 2017, the Company will adopt the requirements provided in Article 25 of Law 13,303/2016 following nature: stakeholders; social and environmental liabilities; contingencies and and State Decrees 6,262 and 6,263/2017, for the appointment of board members. judicial deposits; property, permanent, intangible assets, and receivables related to the concession; suppliers; labor obligations; accounting procedures, and information The Committee holds regular meetings at least six times a year, according to a previously defined schedule, with extraordinary meetings and, if necessary, with any member of technology. G4-50 the Board of Directors, Independent Auditors, Internal Audit, or Fiscal Council. In 2016, a total of 16 meetings were held to deliberate on approval of annual planning of the work, performance, and monitoring of the activities of the Internal Audit. Risk Management G4-2 It also oversees the Internal Audit, responsible for developing and executing the Copel’s Integrated Corporate Risk Management covers all corporate areas, its wholly- About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital Intellectual Capital Social and Relationship Capital Annual Audit Plan, which covers the Copel corporation, its business units and interests, conducting special audits through requests received through the proper channels, preparing and submitting reports of the results of the audit to the Company’s Management and the Audit Committee, when necessary, communicating the results of the audit, with recommendations and/or suggestions for the auditees to improve owned and controlled subsidiaries, jointly held affiliated companies, and establishes the formation of a Corporate Risk Management Committee, which reports to the Audit Natural Capital 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 Infrastructure Capital Financial Capital 31000, and whose purpose is to maximize economic, social, and environmental value to Social Audit management of their respective areas, among others. The Internal Audit Regulations stakeholders and ensure compliance with laws and regulations in force. are available online. Corporate Risk Management Committee A permanent advisory body. It is a subordinate of the Audit Committee and is composed of representatives of the Board of Directors, the Superintendency of Controllership, Management and Participations, the Coordination of Corporate Regulatory Affairs and Integrated Corporate Planning, and a member of the Internal Audit. The Corporate Risk Management Committee is the department responsible for preparing the Company’s 21 The risk management model adopted by Copel 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. The model also defines the parameters of appetite for risk, likelihood of occurrence, and its social and environmental, financial, operational, and image impacts, providing tools for its preventive treatment and mitigation. G4-14 GRI Content Index Annex - Incorporation of the Principles of the Global Compact Governance and SustainabilityCopel | 2016 Sustainability Report Deficiencies and recommendations on internal controls are routed to business assessment. In addition to being a best practice in governance and management the areas through “Internal Controls Certificates.” For each note, an action plan is initiative meets the requirements of Law No. 13,303/2016. developed, which will be monitored in the following year. After analyzing the results of the Assessment of the Administration held in 2016, the This process is coordinated by Corporate Integrity Coordination, a body that reports Board of Directors approved the continuity of the process and requested the plan for directly to the Governance, Risk and Compliance Officer, with whom it meets evolving the methodology to be presented in the first quarter of 2017. periodically, and is responsible for reporting its activities to the Audit Committee and the Executive Board. Copel also in place has an Internal Audit structure, responsible for assessing the adequacy of internal controls, the effectiveness of In 2016, the main opportunities for improvement identified refer to the management and transparency dimension, as follows: risk management, compliance with standards, and process reliability. ■ Availability of relevant information about the organization, market trends and Performance of Governance Bodies Remuneration G4-51, G4-52 the industry sector; ■ Monitoring feasibility and execution of strategic planning; ■ Monitoring risks and internal control processes; ■ Monitoring transactions between companies and stakeholders. Copel’s Administrators and Fiscal Advisers have their remuneration defined during The main actions for improvement implemented were: the General Meeting, which takes into account the remuneration of the previous ■ Prior preparation for meetings in order to further knowledge and the decision-making period and the corresponding monetary restatement. In 2016, overall remuneration for the Executive Board, for the Board of Directors, and for the Fiscal Council totaled nearly BRL 9.5 million. Self-Assessment G4-44 process of the administrators aiming to improve management processes in order to sustain the business strategy and ensure expected results; ■ Publication of the Stakeholders Transactions Policy. Development In pursuit of continuous improvement, the Company annually conducts a self- assessment of the Board of Directors, the Executive Board and the Audit Committee. Board Members and Directors answer a specific questionnaire for each department. The Administrator Training Program is aimed toward directors, presidents of subsidiaries, and executive officers. The content was developed in modules and included issues regarding corporate governance, economic and financial aspects, Based on the analysis of the results, strengths and weaknesses are indicated and business strategy, fiscal council, and administration and strategic management of proposals are made for improvement. business risks. Assessment G4-44 In order to provide greater credibility to the process of assessing the performance of The program aims to develop the competencies required for Members of the Board and of the Fiscal Council to perform their activities. It also aims to train professionals who act as directors of Copel’s subsidiaries and affiliated companies, so that their the Company Administration, Copel contracted an external consultant to carry out the performance may be more effective. G4-43 22 About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Governance and SustainabilityCopel | 2016 Sustainability Report Integrity Practices Integrity Program Copel has several structures in place to establish a transparent dialogue and ethical relationship with all its audiences. These mechanisms form the integrity practices of the Company and its subsidiaries, based on alignment with the UN Global Compact2 and the public commitment to fight against corruption. The Company uses internal tools in order to disseminate ethical conduct and identify deviations. To this end, the Company makes available the Compliance Portal, which contains mechanisms adopted to guide the transparency and ethical conduct of its activities. Learn about the mechanisms adopted by the Company, such as the Confidential Communication Channel, the Copel Distribuição and Copel Telecomunicações Ombudsman’s Office and the Ethics Guidance Committee (COE) on the Compliance Portal. G4-56 This structure is monitored by determining that process managers issue “Certificates of Internal Controls,” formalizing the cases of nonconformities detected and thus committing to regularizing them. All these mechanisms are overseen by the Audit Committee. According to the recommendations of the Second External Control Inspectorate Office of the Audit Court of Paraná (Segunda Inspetoria de Controle Externo do Tribunal de Contas), Copel promoted improvements on its Transparency Portal, making access easier with more detailed information. The result of the work was praised by the inspectors, and mentioned as a benchmark at the State Audit Court (TCE-PR). Learn about the improvements on the Transparency Portal. In addition to immediate and detailed access to all content, the new portal facilitates the export of data, now fully complying with the Access to Information Act. Among the innovations added to the portal is the inclusion of a link to report cases of corruption, information regarding corporate participation in concession contracts, and public bids opened by the Company, among others. Copel proactively adopted the practice of scheduling monthly meetings with TCE-PR to streamline possible actions and/or proceedings by the 2nd inspectorate, thus improving the flow of information and demands, as well as the relationship between Copel and TCE-PR. 23 The Integrity Program is a platform for disseminating the Company’s commitments to transparency and the fight against corruption. In 2016, Copel implemented the Distance Learning (EaD) training program in order to raise awareness of ethical behavior among all employees of Copel and its subsidiaries. A total of 7,724 employees were trained in the fight against corruption, equivalent to 90.54% of the employees, in addition to all members of the Company’s Board of Directors. G4-SO4 The program was further strengthened by disseminating the Company’s ethical standards using all internal communication channels such as emails, internal newsletters, intranets, meeting minutes and others, as well as making all related corporate rules of the Integrity Program available on the web. About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital All these actions are reflected in the reduction of cases of corruption involving Intellectual Capital Copel’s employees. Four people received sanctions for their involvement in suspicious activities in 2014 and 2015. In 2016, no case was registered. G4-SO5 There were also two events with aspects focused on integrity: Management Meeting: presenting the current scenario facing integrity practices and how companies are reacting to the need to adapt their processes, and implement an integrity program. It was attended by over 500 managers. 25º GAIP – Group of Internal Auditors of the State of Paraná: held at Copel’s premises, aiming to contribute to the evolution of the profession of Internal Auditors, supporting the official institutions that govern this activity, as well as other correlated activities. At this meeting, the aspect “How Copel structured its Risk Management, Internal Controls, and Compliance areas, and the relationship of these areas with Internal Audit” was discussed. This event registered a record number of participants, with 92 present. 2 - Copel has been the United Nations’ Global Compact signatory since 2000 and joined the Call to Action initiative launched in 2014 by the UN’s Global Compact, aimed to encourage governments to fight against corruption. Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Governance and SustainabilityCopel | 2016 Sustainability Report Compliance tested in company contracts and processes employees participated. The goal is to ensure that all employees take this module Copel maintains a commitment to taking preventive action in the fight against corruption; thus in 2017 the Company will conduct systematic compliance tests by October 2017. For the 2017/2018 cycle, a new version of the EaD Code of Conduct is planned, with emphasis on the Confidential Communication Channel. in contracts and processes that are more fragile, among which we highlight: As a best practice, the Company has defined in an administrative standard financial, accounting, procurement, and information technology. Aiming for greater effectiveness in risk management in the supply chain, Copel that the Code must be revised every two years, and every four years, through public consultation, in a candid and open dialogue with all stakeholders. For 2017, a new update of the Code of Conduct is planned, seeking improvement in is developing a due diligence process for critical business suppliers to be compliance issues. implemented in 2017, which, in addition to handling corruption risks, will contribute to monitoring social and environmental issues. The Code of Conduct is available to all stakeholders at the Company website. Also in 2017, Copel will hold a workshop on the Integrity, Anti-Corruption and Social and Environmental Act for its main critical suppliers. Copel Telecomunicações will also develop an Integration Program with its service providers and contractors, with lectures on safety and integrity, for all its partners. Code of Conduct G4-56, G4-57 Risk Assessment for Corruption G4-SO As part of its Policy on Integrated Management of Corporate Risks, Copel works to ensure constant monitoring of threats of corruption within the Company, and of fraud in the internal control environment. Due to these safety criteria, all operational processes are annually submitted to risk assessment involving errors or frauds that may interfere with the results of the financial The Company’s Code of Conduct is aligned with its values, the Principles of the statements. In this respect, controls are submitted to tests by an Internal Audit and an UN Global Compact, and Corporate Governance guidelines. It defines actions that Independent Audit, the results of which are reported to senior management. promote integrity, transparency, safety, and health. The document also addresses social and environmental responsibility, respect, and the relationship with the various segments in which the Company operates. In 2016, the Company submitted 28 transactions to risk assessments concerning corruption. This was 100% of the transactions carried out in the year, and no cases of corruption were identified in the period. Created in 2003, based on ethical parameters, the code is a guiding instrument for the acts of all those who carry out activities on behalf of Copel. The Code was revised at Reporting Channels G4-57, G4-58 the end of 2015, and was even submitted to public consultation. In 2016, it was widely publicized in the media and all employees received a hard copy. G4-SO4 In order to gather opinions, criticism, complaints, claims, and personal consultation, Copel provides a communication channel, presented below, which, In order to disseminate the concepts of the Code of Conduct, in 2016 Copel in addition to fighting fraud and corruption, expands the organization’s relationship developed specific training in the “Distance Learning” modality (EaD), where 543 with stakeholders. 24 About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Governance and SustainabilityCopel | 2016 Sustainability Report Confidential Communication Channel - This channel is intended to receive reports Sustainability Management 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 response to the claim. It is available 24x7 through a toll-free number: 0800 643 5665. Ombudsman’s Office - There are two channels open to all audiences, both internal Copel’s commitment is to promote economic growth with social and environmental responsibility, in line with the Sustainability and Corporate Governance Policy. About the Report Message from the President At the end of 2016, Copel restructured the duties of sustainability and governance, Industry Context creating the Coordination of Corporate Sustainability and Corporate Governance with a scope of action that includes following the sustainability agenda, disseminating culture, and adopting best practices in sustainability and corporate governance. The Coordination resports directly to the Risk, Governance, and and external, to receive suggestions, complaints and reports, which are available on Compliance Office. G4-35, G4-36 business days, from 8 AM to 6 PM, via toll-free number. The Ombudsman’s Office for Copel Distribuição is available prepared to receive complaints personally or through mail sent to the address Rua Professor Brasílio Ovídio da Costa, 1703, district of Santa Quitéria, zip code: 80310-130, in Curitiba, PR. Sustainability challenges are part of the strategic framework, through the mission, vision, values, and strategic guidelines, and are aligned with business planning, linked to the strategic objective, “Improve performance in sustainability”. G4-36 In its ongoing search to improve the Company’s sustainability performance, in addition to managing aspects and indicators, Copel considers expectations and The Ombudsman’s Office for Copel Telecomunicações is available receive works to improve communication and relationships with our stakeholders. G4-35, complaints personally or via mail sent to the address Rua Emiliano Perneta, 756, G4-36, G4-45 district of Batel, zip code: 80420-080, in Curitiba, PR. In this work, the following main market practices are used to: Committee to Investigate Claims of Mobbing (CADAM) - to address and support all employees victim of mobbing in the workplace. The information is confidential ■ Guide and assess performance, as well as compare practices with global and national benchmarks: questionnaire from RobecoSAM (Dow Jones Sustainability Index - DJSI), Ethos Indicators for Sustainable and Responsible Business Models, and both the person reporting and the person reported have the preservation of their and the Corporate Sustainability Index (ISE – BM&FBOVESPA). identity guaranteed. Email: cadam@copel.com. Ethics Guidance Committee (COE) - The COE evaluates and offers guidance in processes associated with ethical conduct within the Company and has up to 90 days to provide a final solution. Email: conselho.etica@copel.com. ■ Report our performance and engage our audiences: Global Reporting Initiative (GRI), Integrated Reporting (IR), Carbon Disclosure Project (CDP) and Global Greenhouse Gas Protocol (GHG). The main purpose of corporate sustainability and corporate governance is to ensure continuity of the Company, which is achieved through recognition that our practices In addition to these channels, Copel is open to receive requests for information, services, must meet the expectations of our stakeholders. criticism or suggestions for improvement, guidance and grievances from its audiences One of the main results of the action was that in November 2016, the Company was through various service channels. selected to remain in the group of the most sustainable companies in the São Paulo 25 About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Governance and SustainabilityCopel | 2016 Sustainability Report Stock Exchange (ISE - BM&FBOVESPA) in the 2016/2017 portfolio, where it evolved in the Brazilian Committee of the Global Compact - CBPG, since its the most since 2012, above the average performance of the portfolio. Copel has creation in 2004. been a part of eleven of the twelve editions of the Corporate Sustainability Index (ISE), since the index was created, in 2005. National SDG We Can Movement The year 2016, was also marked by the continued inclusion in the Morgan Stanley Capital International (MSCI) Sustainability Index, a global leader in the preparation of financial indices that serve as reference for investors. The MSCI ESG seal is awarded to companies that show excellent performance in the social, environmental and corporate governance areas. COPEL obtained a maximum score in 27 of the 28 indicators analyzed in 2016, and AA concept on a seven-level scale that ranges from CCC to AAA. Copel was also selected to be part of the FTSE4Good Emerging Index, an index linked to the FTSE 100, of the London Stock Exchange, which recognizes companies that have best practices in the social, environmental, and governance areas, and is a reference for investors. Voluntary Commitments G4-15, G4-16 Committed to sustainable development, in the course of its history, Copel has made several voluntary commitments that it disseminates throughout its value chain and other stakeholders. Global Compact The SDG is a global agenda that comprises 17 objectives and 169 goals to be achieved by 2030. The National SDG We Can Movement acts in support of this global development agenda defined by the UN, which is non-partisan, ecumenical and plural. It is the result of coordinating volunteers from the three sectors of Brazilian society in order to promote the improvement of the population’s living conditions, from a sustainable development standpoint in Brazil and internationally. As a member of the Brazilian Global Compact Committee, Copel participated in Sustainable Development Goals (SDG), launched by the United Nations Global Compact. The study seeks to create a methodology that translates business engagement with SDG, identifying best practices and learning, and providing inputs for strategic guidance of the Brazil Network of the Global Compact. Corporate Contribution to Promoting a Green and Inclusive Economy 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 A signatory of the UN Global Compact since 2000, Copel endorses the principles toward a more inclusive economy, which contributes to face major challenges in proposed by the initiative, based on three main aspects: constant improvement sustainability in Brazil and worldwide. of management systems and corporate policies; supporting the formulation, implementation, and improvement of public policies and consolidation Statement of Cultural Action for Governments in the Fight against Corruption of partnerships with other companies, institutions, or organizations Copel adhered to the statement in 2014, reaffirming its commitment to in projects that may bring social and environmental gains. In line with transparency and the fight against corruption, expressing its support to the this commitment and the Sustainability Policy, Copel participates Post-2015 Development Agenda, in an effort to promote sustainability, ethical in the Brazilian Network of the Global Compact and has had representation conduct, and best practices in corporate governance. 26 About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact a study on the contribution of companies in the Brazilian electricity sector to the Human Capital Governance and SustainabilityCopel | 2016 Sustainability Report Corporate Pact for Integrity and Fight Against Corruption are to raise awareness and involve employees in the promotion of equal rights, 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 opportunities and recognition of everyone, with special attention to follow vulnerable groups subject to discrimination based on gender, race, color, physical Corruption, on the 10th principle of the Global Compact, and on the guidelines of disability, sexual orientation, age, and religion. the Organization for Economic Co-operation and Development (OECD). Prevention of Mobbing and Sexual Harassment Eradication of Child, Forced or Bonded Labor Copel recognizes health and safety at the workplace as a fundamental human In alignment with the principles of the Global Compact and the Sustainable right, valuing life and respecting physical and moral integrity of people, intended Development Goals - SDG, Copel commits to implement tools to bar hiring to create a gratifying and conducive work environment to generate productivity. products and services from suppliers who use child, forced or compulsory labor in its value chain. In 2016, Copel joined the Network of Companies Respect for Free Association and the Right to Collective Bargaining for Education and Eradication of Child Labor, which reaffirms the Company’s Copel guarantees the principles of freedom of association, for individuals and concern for the cause. collectively, pursuant to article 8 of the 1988 Constitution, and Convention No. 87, Sexual Exploitation of Children and Adolescents of the International Labor Organization - ILO. The Company promotes actions to raise awareness among employees, Principles for Responsible Management Education (PRME) suppliers, and customers against the sexual exploitation of children and further Copel Corporate University (UniCopel) became, in 2014, the first of its kind in Brazil disseminates its commitment in its Supplier Manual and through specific clauses to adhere to the PRME, a program by the United Nations that promotes training of in its agreements. leaders toward responsible management of businesses. Fight against Discrimination and Valuation of Diversity Learn more about the commitments assumed on the Sustainability page – The Company created the Permanent Committee on Diversity, whose goals Voluntary Commitments. About the Report Message from the President Industry Context About Copel Governance and Sustainability Governance Structure Performance of Governance Bodies Integrity Practices Sustainability Management Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 27 Governance and SustainabilityCopel | 2016 Sustainability Report Performance in Capitals Copel has executive areas that cover the Company’s most important strategic fronts. In these areas, considered business capitals, Copel shows its capacity to create value for stakeholders in the short, medium, and long term. “Capitals are deposits of amounts that increase, reduce or transform through activities and products from the organization. For example, the financial capital of an organization increases when it generates profit, the quality of its human capital improves when employees receive better training.” IIRC Framework 28 i o h c c a T i e l r e d n a V : t i d e r c o t o h P Human capital Intellectual capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital This is Donizete Benedicto Barboza 06 . HUMAN CAPITAL Human Capital Profile // Performance Management // Professional Development // Health and Safety 29 Copel | 2016 Sustainability Report 06. Human Capital Investment in human capital is one of Copel’s main strategic pillars. There are two businesses, collaboration, sharing, satisfaction, well-being, and work safety, as well main challenges regarding Human Capital management at Copel, which guide as pioneering the use of blank spaces in the market and society. their development strategies, remuneration, and employee assessment. The first is adjusting personnel costs, since it is a public and regulated concession, where the priority is tariff accessibility, resulting in a constant search for productivity, efficiency, The idea is to allow all Copel employees to contribute to creating a management model capable of preparing people to perform their roles in an increasingly complex scenario where new technologies arise and improve with great speed. and operational excellence. The second challenge is the search for more diversified projects using other sources of clean energy, for example, wind power generation and distributed generation, Human Capital Profile which represent a constant need to develop its professionals, as well as generate and retain knowledge. Copel’s Workforce G4-9, G4-10 *New Hires in 2016 G4-LA1 This vision of the future market guides strategies for the development, engagement, and assessment of employees, and is reflected in its policies for People Management and Occupational Health and Safety. Initiatives at Copel are always focused on enhancing both professional and personal development, improving knowledge management practices, and strengthening the Company’s innovation and safety 1,900 women 25 women culture, based on providing equal opportunities. 6,631 men 70 men The Company believes that professional qualification and well-being of its employees is reflected in better results in terms of business growth. To this end, Copel traditionally fulfills a benefits commitment that gives the company advantages in the market. In addition to maintaining its competitive advantages in the market, and promoting a motivating climate in the workplace, Copel understands that modern forms of management significantly contribute to maintaining its competitiveness. Accordingly, Copel launched Anima, an unprecedented initiative whose challenge is to build a new participatory management model, openly discussing its future with over 8,500 employees. 22% 78% 8,531 employees 26% 74% 95 hires Initially formed by eight projects, its main concepts are: involvement, proactivity, *Approximately half (49%) are less than 30 years old. participatory leadership, greater synergy between the holding company and the The turnover rate was 1.7%. 30 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Human Capital Profile Performance Management Professional Development Health and Safety Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Human CapitalCopel | 2016 Sustainability ReportAll Company employees are covered by a Collective Bargaining Agreements and have This structure aims to: contracts governed by the Consolidation of Labor Laws (CLT). G4-11 The Company bases its relationship with all its employees on the guidelines of its policies for People, Health, and Safety Management, its Code of Conduct, and the Copeliano Manual, in compliance with the Consolidation of Labor Laws (CLT), the fundamental conventions of the International Labor Organization (ILO) and the ■ Identify the positions and roles required to perform the activities; ■ Define training required to perform the activities regarding each position and role; ■ Establish the levels of maturity and complexity of each position and role Universal Declaration of Human Rights. required to meet the demand of each job position; In addition to direct employees, the Company operates with 5,666 contractors. ■ Establish rules for the functional (vertical) and salary (horizontal) movement These are contractors providing services such as: customer services, construction of employees; of transmission lines, networks and substations, connections, disconnections and re-connections, reading low voltage meters, maintenance of electrical systems, ■ Demonstrate opportunities for career growth and development. green areas, and buildings, private security, and maintenance, among others. In 2016, the average annual remuneration adjustment of all employees was Respect Creates an Inclusive Culture Copel was one of the first Brazilian companies to allow the use of the “social name” - a name chosen by employees who have adopted a different sexual identity - on 10.62%. The ratio between the percentage of increase in remuneration of the highest paid individual and the percentage of increase in the average annual remuneration of all employees was 0.86. G4-55 their ID badge. Relocation Program Regarding gender equality at Copel, one in five employees is a woman. The ratio Valuing people, prioritizing internal mobility, and allowing employees to move is the same among managers, reflecting the seriousness with which the Company addresses issues related to equal conditions and the opportunities offered to women in the workplace. In 2015, Copel was awarded the Pro-Equity Seal for to other locations or areas of the company are the main objectives of the Relocation Program launched by Copel. Reflecting the wishes of the employees Gender and Race from the Federal Government for the second time, and in 2016, themselves, expressed through the Employee Opinion Survey (POE), the Copel was one of the 48 companies selected by the organizers of the WEPs Brazil Award - Women’s Empowerment Principles. Remuneration and Benefits The Company’s career and remuneration structure establishes remuneration standards compatible with the market and the position, title, and level of the employee, according to training and qualification, enabling recognition for individual development. 31 initiative enables employees to become more active in managing their own careers, collaborating toward personal and professional development. The program is intended to optimize the workforce by increasing gains in productivity, offering equal opportunities based on the principle of transparency in the decision-making process regarding internal movement of people. Since its launch in 2016, a total of 120 job openings have been made available internally. About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Human Capital Profile Performance Management Professional Development Health and Safety Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Human CapitalCopel | 2016 Sustainability ReportBenefits G4-EC1 Copel offers a benefits package that goes beyond those required by law, and is in line with those of the best companies in the market. It annually delivers to its employees the Benefit Balance - BBC, which provides a comprehensive view of the benefits offered by the Company, with stratified information regarding what each employee received in the previous year, in terms of salary, additional pay, allowances, profit sharing, financial and non-financial benefits, as well as future benefits regarding the pension plan and the government’s severance fund (FGTS). G4-LA2 Performance Management In 2016, Copel continued the Performance Management Program - called Our Energy. Improvements for each cycle are provided by the experiences of previous cycles and by performance management practices. In this way, we always seek spot and assertive changes that do not modify the essence of the model, in order to preserve its main characteristics and make it increasingly continuous and consolidated. An example of a change was including the calibration process that minimized distortions and errors in the evaluations. The objective is to further adapt the model to the Company’s market practices and needs. In 2016, all (100%) of the employees received their performance assessment. Through the Employee Opinion Survey (POE), which is carried out every two years, we verify that all employees were subjected to the evaluation interview and whether it contributed to improving the people management process. G4-LA11 Professional Development G4-DMA-EU14 Investments in Human Capital in 2016 G4-LA9 Short term ■ 2,242 events ■ 34,488 participants ■ 416,298 hours of training ■ Average of 48.8 hours per employee Long term Language Courses Post Graduate Courses ■ 302 participants The guiding principles for development of human capital are goals and objectives derived from Copel’s strategic planning, as well as the need to develop the skills of each employee. These training and development initiatives ranges from basic training, intended for certain roles, to graduate courses at specialization and doctorate levels. These actions are organized into corporate programs (education actions geared toward the entire Company), qualification training (basic training to perform a given role), compulsory training (courses for certain activities), training for professional development and events (seminars, lectures, workshops, congresses, etc.). Corporate education actions (Integrity, Sustainability, Foreign Language Training, Leadership, Preparation for the Future, Integration, among others) are coordinated by the Corporate University (UniCopel). Basic training courses are aimed at empowering the employee in a new activity. One highlight is the Distribution Electricians Training Program, in which the newly admitted employee receives the initial training necessary for the proper performance of the function. Good ideas, informal conversations, and suggestions for improvements in processes, from employees to senior management are the strengths of Chats with the President. In 2016, ten meetings were held, including trips to other cities in the state, and breakfast and lunch with employees and the President. In these two years of conversation, the program enabled the President to meet with about 180 employees from the Copel units in Paraná, Mato Grosso, São Paulo, and Rio Grande do Norte. Employee Qualification and Training Programs In 2016, UniCopel focused on three fronts: Integrity, Sustainability, and Transformational About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Human Capital Profile Performance Management Professional Development Health and Safety Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact In 2016, a total of BRL 8.75 million were invested in training and people development. Leadership. 32 Human CapitalCopel | 2016 Sustainability ReportIntegrity Program: In 2016, several training courses were developed to raise awareness about the topic at various levels of the Company, also considering the target audience for each event. Examples of such modern approach include training on general aspects of Anti-Corruption Law and Decree as well as Workshop on Integrity for all managers of Copel. The workshop included the topics of Anti-Corruption Law, Public Companies Law, and the role of corporate integrity. The Code of Conduct training was also started. Transformational Leadership Program: Structured in alignment with the The Anima Program aims to implement actions that value the Company’s Human Capital, encouraging discussing ideas and points of view of different generations of employees in the creation of a participatory management model. In order to engage employees, the Orange Blood (Sangue Laranja) was created - a mote chosen to instill a sense of belonging among over 8,500 employees. Principles for Responsible Management Education (PRME), a UN Global Other Forms of Training and Development Compact initiative that fosters the education of leaders in charge of responsible G4-LA10 business management and the application of knowledge in daily management, promoting alignment, integration, shared performance, and co-responsibility in the day-to-day activities of the company’s business leaders. Initiated in October 2016, the program has already reached ca. 22% of the 540 managers. The goal is that, by the end of 2017, all managers complete the training. For each module, trained managers must propose at least two practical actions to be implemented with their teams. Through the initiative, the company has invested not only in establishing the desired managerial profile, but in training its management team. The idea is that leaders are increasingly able to support and leverage the potential of their teams. Anima Program: With the challenge of building a new participatory management model in 2015, Anima launched an innovative program sponsored by the presidency and permeated throughout the groups closest to the operations. Initially consisting of eight projects, aimed at intensifying the production and flow of ideas and action plans in all areas of the Company, where each employee is encouraged to imagine alternatives and solutions to aspects such as innovation, collaboration, proactivity, In addition to promoting its own training and qualification programs, the Company encourages training of its professionals through the following initiatives: Educational Aid: encourages employees to undertake postgraduate and other specialization courses, reimbursing 70% of school monthly tuition up to the limit amount of BRL 840.46. To this end, by means of an hour bank, Copel employees are excused from part of the work hours - provided the conditions of the curricular schedule are justified and compatible with the employee’s career. In 2016, the program benefited 1,064 employees, reimbursing a total of BRL 4.53 million. Foreign Language Training Program - BABEL: established in 2012 and intended for employees who perform activities in which another language is required. In 2016, a total of 255 employees benefited from German, Spanish, and English courses. Postgraduate courses: promotes professional development in specific and strategic subjects focusing on producing research, dissertations, theses, creating innovation, and improvements for the Company and the electricity sector. In 2016, ten employees began postgraduate studies and in total, 47 participated in courses at lato sensu and stricto sensu levels, fully subsidized by the Company. leadership, synergy between the holding company and the businesses, Exchange Programs and Courses Abroad: employees also participate in events satisfaction, well-being, and work safety, as well as the pioneering spirit abroad to share experiences and disseminate projects and constantly research aspects of occupying blank spaces in the market and in society. By the end of associated with the business. Also part of these actions is qualification through short- 2016, a total of 75% of the employees were trained in the program and involved term courses, offered by national and international companies, guaranteeing quality of in their conceptions. 33 content and the effective improvement of the professional staff. About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Human Capital Profile Performance Management Professional Development Health and Safety Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Human CapitalCopel | 2016 Sustainability Report Pre-retirement: The Company began a series of events to guide employees on The Individual Development Plan was Copel Telecomunicações’ way of retirement conditions, providing support in taking decision about post-career. preparing its professionals to meet the challenges of the business, identifying the Training for Contractors: Copel also offers training for contractors, provided that skills required for their processes. included in the contract or in the interest of the Company. The Individual Plan is a tool to help managers cascade the strategic plan and In 2016, the Second Workshop on Training for Environmental Programs was held, to raise awareness among Copel’s service providers and the internal audience on social and environmental issues - in compliance with environmental corresponding management commitments, in addition to contributing to the development of professionals by offering a comprehensive vision of their training needs. About the Report Message from the President Industry Context About Copel Governance and Sustainability licensing requirements (preliminary, installation, and operation licenses) from the In line with the Company’s strategic objectives, in order to disseminate experiences Human Capital Environmental Institute of Paraná (IAP). and knowledge and to continuously improve its processes, Copel Geração e Human Capital Profile Measurement and Planning of Investments in Training Transmissão, through the INOV+GeT and ETGET Programs, holds technical meetings to promote knowledge sharing, integration, and dissemination of matters related to the operation and maintenance of transmission lines, substations, and Investments in employee training are planned based on the Company’s power plants, as well as matters related to management, environment, land, strategic objectives and on the process to assess the roles and activities of each finance, accounting, legal, and safety. professional. The focus of these investments is to maintain the availability of skilled labor in the long term. G4-EU14 Subsidiaries are responsible for managing goals and results related to investments in training, through tools such as Management Commitments and Critical Review Meetings. These meetings seek to ensure the effectiveness of the actions in the period, where follow-up indicators are presented and monitored with the help of the ERP-SAP system. Copel Distribuição has a program in place called the Talent Bank that allows the identification of employees with potential to take on a higher-level leadership position. To this end, criteria such as performance, potential, maturity, and time until retirement are analyzed. The talents Identified take part in specific processes to leverage development, among them, mentoring and coaching processes are highlighted, due to the empowering nature of performance and maturity. In 2016, Awards and Recognition in Professional Development The awards received reflect the result of a set of actions carried out by the Company. Copel won the CIER (Regional Energy Integration Committee) Award for the third time in the last four years, which distinguished it as the best Distributor in Latin America. The Company also won the Transparency Trophy, granted by ANEFAC (National Association of Executives of Finance, Administration, and Accounting), recognizing the quality of the accounting information provided to the market. The Company is the only state-owned company among the five companies in the electricity sector awarded in the 20th edition. For the third time, Copel Distribuição won the National Electricians Rodeo, focused on perfection in executing daily tasks carried out by electricians, focusing a total of 250 potential leaders took part in the Talent Bank and may fill openings on technical expertise, safety, and agility. such as division managers, department managers, or superintendents. Performance Management Professional Development Health and Safety Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 34 Human CapitalCopel | 2016 Sustainability ReportHealth and Safety G4-LA6 Health and Safety Performance Indicators Category 2015 2016 compliance with legal requirements by contractors is monitored through the PPV. Given the high employee turnover rate among contractors, and the characteristics of the agreements, there is no specific manner to determine the percentage of contractors trained; however, the company adopts as a rule to provide onboarding training on Fatalities Employees Contractors DIS GET HOL DIS GET CTE** HOL* safety to all contractors. 0 4 1 2 0 0 0 0 0 0 - - 0 0 Participation in the Electricians Rodeo: in order to promote the culture of work safety and development in performing as electricians, Copel encourages participation in the About the Report Message from the President Industry Context About Copel Governance and Sustainability Absenteeism rate Employees 2.48 1.36 4.68 2.80 1.08 1.16 1.48 Electricians Rodeo, which consists of joining teams of electricians and technicians from Human Capital Employees 5.92 4.01 1.42 5.95 3.26 0.88 0 all regions of the state, on an internal phase, and teams of electricians from different Human Capital Profile Lost Time Injury Frequency Rate Severity Index Contractors 5.59 11.41 0 3.74 5.70 1.47 4.63 electricity utilities around the country that compete among themselves, on a national Employees 185 2,468 1.42 207 21 Contractors 3,181 3,338 0 349 231 - - 0 phase, where the competition activities are based on following safety standards, acting 138.89 with expertise, and having differentiated skills. It is an entertaining way of valuing * The numbers for the Holding Company include the subsidiaries Renováveis e Comercialização, and are consolidated until November 2016; the frequency and severity rates were not assured. ** The absenteeism rate of Copel Telecomunicações was not assured. Since it develops activities associated with risk factors, the Company has in place an Occupational Safety Policy. The area of Occupational Health and Safety Management electricians, encouraging integration, improving attention to work safety, and sharing experiences and knowledge. In the 2010 and 2014 editions, Copel Distribuição was champion of the national rodeo and in 2012 came in second place. In the 2016 edition, Copel Distribução’s teams took the top three places on the podium. (OHSM) at the Company is responsible for identifying these risks and defining preventive Training and integration: all field activities are conducted by contractors who actions allowing for tasks to be completed safely. Training and qualification: programs such as Training of Field Inspectors, and Training for the Use of Preliminary Risk Assessment, are offered to employees. These courses have participated in the Occupational Health and Safety Onboarding, and in the exhibit about Risk Assessment carried out for the activities in question. Control of the minimum mandatory training for working with electricity is conducted through aim to establish active prevention in order to identify and prevent occupational diseases a proprietary application that contains information about employees of contractors and accidents. and of the agreements. Promotion of health: Copel has in place an occupational health service that offers The Company provides a specific Health and Safety Manual for contractors, whose employees, through the Copel Foundation, a health plan to conduct diagnostic exams content is included in all services agreements. Outsourced companies are contractually for diseases that can affect capacity and productivity at work. obligated to apply the guidelines described in the Guidelines for Occupational Safety Preserving Life Program (PPV): establishes field inspection of the technical and safety procedures during the execution of activities, pursuant to standards of the OHSM area, and Health for Contracted Companies (available online), to achieve and demonstrate satisfactory performance regarding safety and health of their employees. In addition, where a technician from the occupational safety area, or from departments, monitors Copel conducts onboarding lectures with each new hire, complementing the actions the teams and issues reports with scores for faults encountered. At Copel Distribuição, encouraging safe work. 35 Performance Management Professional Development Health and Safety Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Human CapitalCopel | 2016 Sustainability ReportThis is Cleusa Maria Pereira 07 . INTELLECTUAL CAPITAL Research, Development, and Innovation // Brand // Website and Presence on Social Networks 36 Copel | 2016 Sustainability Report 07. Intellectual Capital Research, Development and Innovation G4-EU8 Copel is recognized as one of the companies in the electricity sector that invests the most in technology. The increasing rate of investments is a strategy to ensure that the company stands out as one of the most modern. The impacts of innovation are evident as the Company contributes to increased productivity, improved process execution, and quality of products and services. Innovation leads to differentiation in the Company’s business and consequently enables greater competitiveness and consolidation of activities, strategically necessary for its sustained growth. Management of Innovation Projects the Company authorizes employees participating in R&D+I projects to work overtime up to the limit of 20 hours per month in order to carry out activities related to the project. The R&D Award by Copel Distribuição and Copel Geração e Transmissão, for the projects with the highest potential for business value, aims to foster participation in proposing innovative projects aligned with strategic planning. This initiative offers About the Report Message from the President Industry Context About Copel Governance and Sustainability opportunities and aims to encourage employees to become researchers along with Human Capital academic training. Copel invests in partner institutions in order to promote the technological evolution of laboratory facilities, academic research, and foster masters and doctorate degrees in fields that are relevant to the electricity sector. This ends up reflecting on social development, benefits, and improving quality of life for society. Since 2015, Copel has had in place an Innovation Coordination that reports In 2016, the Company’s contributions in this area were: directly to the Presidency, whose objective is to establish Research, Development, and Innovation (R&D+I) policies, in order to coordinate the projects of the Holding Company, to monitor those of its wholly-owned subsidiaries, and coordinate special projects demanded by the CEO. There are currently 22 employees working exclusively in the areas of R&D and Innovation, which managed investments Copel Geração e Transmissão invested BRL 15.3 million in 28 R&D projects. Four projects are strategic, with aspects established by ANEEL, and nine projects are conducted in cooperation with other companies in the sector. More than BRL 436,000 was invested in management of these R&D projects. of around 0.37% of net revenue dedicated to project management and Investments in innovation are part of a new model adopted to subsidize planning and GRI Content Index investments in innovation. Investments in R&D G4-DMA- EU8 programming of generation in hydroelectric plants. Efforts have already recorded a gain of 8.6% in energy production, which corresponds to additional revenue of BRL Annex - Incorporation of the Principles of the Global Compact 13 million in the second half of 2016. Theoretical studies show that gains from this shift in paradigm may reach a 20 % increase in generation, and revenue increase of BRL 30 Copel’s R&D+I program has already earmarked BRL 263 million for innovation projects. million per year. Currently, there are 55 projects in progress, totaling approximately BRL 159 million in Copel Distribuição invested BRL 17.7 million in 31 projects, three of which are strategic new investments. projects, with aspects established by ANEEL, and six projects conducted in cooperation Copel encourages the development of innovation projects, supporting internal teams with other companies in the electricity sector. and in partnership with universities and other centers of academic research. To this end, The breakdown of investments can be found in the Content Index. 37 Intellectual Capital Research, Development and Innovation Brand Website and Presence on Social Networks Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit Intellectual CapitalCopel | 2016 Sustainability ReportResults of Investments In 2016 the following results can be highlighted: plants, the tunnel connecting the reservoirs of the Governador Ney Braga Plant and the Foz do Jordão Plant, machine operating points, and the uncertainty regarding the flow of the reservoir tributaries. These variables, when included Development of the Integrated Energy Market Forecasting System (Sistema in the scientific analysis made using the mathematical model, result in more de Previsão Integrada de Mercado de Energia - SPIN), a computer system that refined operational decisions capable of optimizing the combined operation of integrates several projections of energy and demand for forecasting studies, all plants. In the second half of 2016, the use of the model recorded an 8.6% assisting in decision-making of energy auctions, planning and expansion of the gain in energy production, which corresponds to additional revenue of BRL 13 electricity distribution system, and in the relationship with government agencies million. Theoretical studies show that gains from this shift in paradigm may (ONS, EPE), creating more assertive forecasts. The system is composed of reach a 20% increase in generation and increase in revenue of close to BRL 30 management modules for measurement, geoprocessing, and billing data, and million per year. global forecasts of energy and demand (short term), busbar systems (medium term) and georeferencing. Another 15 patent applications have been filed with the National Institute of Industrial Property (INPI) for products developed under the Research, Copel Distribuição files first product patent Development, and Innovation - R&D+I Program. R&D+I Projects under Development In 2016, Copel Distribuição field a product patent, developed in the Research, Another highlight of 2016 was the launch of the Gera Rural Program, which aims Development, and Innovation - R&D+I program. It is a voltage-sensing helmet to mobilize public and private institutions in the production of renewable energy designed to increase safety of electricians in field work. The equipment detects electric fields and emits an intermittent audible alert when the electrician enters the so-called hazardous area - less than 60 cm away from the energized areas, for 13,800 volts, and 1 meter networks, for 34,500 volts. The prospect is that the helmet will become standard equipment for all Company electricians, and the first batch of 500 helmets was manufactured for use in 2017. on the rural properties of Paraná, grouping them into self-sufficient systems and energy exporters. Autonomous generation brings clear environmental and economic advantages. For the electricity system, gains are a result of diversifying sources, and by mapping the generation potentials in the State, producers will form microgrids that, once integrated, will guarantee a continuous supply of About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Research, Development and Innovation Brand Website and Presence on Social Networks Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact The planning model and generation schedule in hydroelectric plants presents the best alternatives for Copel Geração e Transmissão to generate more energy in order to contribute to the performance of the National Interconnected energy for the whole system. Gera Rural began as a Copel R&D project initiated in 2015, which is implementing biodigesters on pig farm properties, and channeling the biogas from manure to a thermoelectric micro-plant in the municipality of Entre Rios do Oeste. System. This is only possible because the calculation began including several The program includes close relations with state and federal universities in order details from the generating park, such as the flooding of the spillways at some to align research projects and the installation of solar panels in schools in five 38 Intellectual CapitalCopel | 2016 Sustainability Reportmacro regions in the State of Paraná, teaching new generations about distributed energy consumers, we want to build consistent relationships with conscious, generation and the importance of clean energy. informed citizens about our products and services. In this spirit of integration, Copel proposed the formation of the “Energy of the The daily service calls, during business hours on the Twitter and Facebook Future” forum, in order to integrate the Company with universities and research, networks, with 100% response in up to three minutes, more practical than development, and innovation organizations operating in Paraná, within the concept of open innovation and collaboration, aiming to boost energy innovation actions. Brand travelling to one of our on-site service units or e-mail. We maintain two dedicated teams informed about everything involving our brand, services, and operation in the 10 states where we operate. Information and services are also available on our website, which in 2016 recorded 27,936,277 visits to the Virtual Agency, where the most requested service was a second copy of the energy bill, which Copel participates in the lives of 11 million people in the state of Paraná. With was 7,301,840, or 11% of the visits to the website. electricity or Internet services, we are the Company that connects people to the world and to the comfort provided by electricity. More than a solid and reliable logo present in the daily lives of three generations, today Copel is a symbol of an efficient, modern, innovative company, always ahead of its time. At home, at work, at school, in the industry, on the market, or in the field, we provide important services that are strengthened by transforming consumption habits, means of production, and social relations. We adapt and prepare to understand and meet the needs of our customers today and of future generations. That is why our presence on social networks is strengthened each year as another means of serving our four and a half million consumers. Information, guidance, and problem solving quickly become possible in the palm of the hand, at a click. We also communicate the risks of using electricity and the caution required for working with it. The benefit of our product lies in customer satisfaction, and the recognition of Copel as one of the best Companies in Brazil and Latin America, in the opinion of the consumers themselves (CIER and Abradee Awards). Website and Presence on Social Networks We have diversified our channels, expanded our presence, and today we are on social networks: YouTube, Vimeo, Facebook, Twitter, LinkedIn and Instagram. We talk with, guide, and serve our consumers through social networks. More than 39 For 2017, we renewed our series of inspiring videos, “Atreva-se a Mudar seu Mundo” (“Dare to Change Your World,”) which tell a bit about the lives of our employees engaged in volunteer work, people who do more than their day job at Copel. This is Rakelly Schacht About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Research, Development and Innovation Brand Website and Presence on Social Networks Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Intellectual CapitalCopel | 2016 Sustainability ReportThis is Thais Handar R. da Silva 08 . SOCIAL AND RELATIONSHIP CAPITAL Customers and Consumers // Supplier Management // Local Communities // Indigenous Communities Education for Sustainability // Social Investments through Fiscal Incentives // Social Initiatives 40 Copel | 2016 Sustainability Report 08. Social and Relationship Capital Copel believes that the continuity of its business model depends on ongoing dialogue with the various stakeholders: shareholders, consumers, employees, suppliers, the government, and communities. The Company considers a quality, transparent relationship with all these groups to be a competitive differentiator. satisfaction survey and grants the winning company the ISQP award (Satisfaction Index for Perceived Quality). This indicator is calculated based on a questionnaire of approximately 100 questions, through which over 2,000 consumers from Paraná assessed the Company. The survey is conducted with nearly fifty distributors from For this reason, Copel maintains a working group dedicated to having in place a structured relationship policy, governed by constant planning and activities, with the purpose of guaranteeing levels of excellence in the relationship of these groups with the Company. Customers and Consumers Customer Satisfaction Management G4-EU3 Copel Distribuição’s customer profile Dec/2014 Dec/2015 Dec/2016 Residential Industrial Commercial Rural Other (government, public lighting, public service, company’s own) 3,437,030 3,527,126 3,597,105 91,068 88,276 82,021 369,205 376,959 382,121 372,464 368,297 360,066 57,203 57,404 57,454 Total Number of customers 4,326,970 4,418,062 4,478,767 Copel Distribuição G4-PR5 In 2016, Copel was recognized for the third consecutive time as the best distributor in the country according to customer assessment. This recognition comes from the Abradee (Brazilian Association of Electric Power Distributors) customer 41 across the country. Abradee also awarded Copel as the best distributor in the Southern Region, according to customer assessment – the award was announced a day after Copel reduced its residential rate by 14.3%. In addition to the competition organized by Abradee, Copel conducts research with rural customers every four years and with government customers in the first and last year of each mayor in office. The satisfaction indicator is also monitored through the annual survey conducted by the National Electricity Agency (ANEEL), focusing on residential customers. Customer Satisfaction Index - Distribuição (%) 2014 2015 2016 ISQP Satisfaction Index for Perceived Quality perception it evaluates Measured by Abradee, electricity of customer distributors in five aspects: energy supply, information and communication, electricity bill, customer service, and image Low voltage residential Low voltage nonresidential 89.3 88.6 88.8 85.6 86.5 84.8 Natural Capital High voltage 86.3 78.6 85.9 IASC Consumer Satisfaction Index Measured based on a survey by ANEEL, conducted since 2000, among residential consumers, in order to evaluate the level of residential consumer satisfaction with the services provided by electric power distributors. 75.2 60.3 73.1 Rural Customer Satisfaction Survey Government Satisfaction Survey The survey is conducted every four years*, by sending questionnaires to all 400,000 rural clients, along with the rural schedule for automatic meter reading. The survey is carried out with the mayors of the municipalities, during their first and last year in office. * * 77.9 * * 80.4 *Surveys were not conducted in these years. About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Customers and Consumers Suppliers Management Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Social and Relationship CapitalCopel | 2016 Sustainability ReportCopel Telecomunicações G4-PR5 Copel Telecomunicações has conducted regular opinion surveys since 2008. Starting in 2015, the Company began to adopt the same data collection instrument used by ANATEL, making it possible to compare the results of the Company’s quality indicators with those of other companies in the sector. In 2016, the level of overall customer satisfaction with the quality of multimedia communication services remained high (80.1%), despite oscillations compared with the previous year (81.3%). Complaint Management G4-SO11 Copel Distribuição Compensation for consumers In case of disturbances in the electrical system that resulted in damage to equipment, assets, products, animals and people, Copel ensures the right to compensation. Procedures and term for compensation claims are predefined. Consumers are reimbursed after power failure has been confirmed. Another initiative to achieve quality services is the annual survey of Satisfaction of Complaining Customers, which measures ease of contact, clarity of the information About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Customers and Consumers provided, friendly service, observance of the term to respond, and the meeting of Suppliers Management Using two indicators, Copel Distribuição assesses the quality of products and services according to consumer perception: the Equivalent Frequency of expectations in terms of the response to the complaint. Complaints indicator (FER) quantifies valid complaints in relation to the number Copel Telecomunicações of consumers, and the Equivalent Complaint Duration indicator (DER) shows the average time it takes the utility to respond to complaints. Complaint Management at Copel Distribuição 2014 2015 2016 Copel Telecomunicações provides the Ombudsman’s Office as a customer channel, responsible for managing and following up on suggestions, complaints, and reports received directly by the Company or through the Ombudsman channels of the regulatory agency, ANATEL. The statements recorded on the Registered and processed grievances and complaints 11,077 17,592 20,668 National Consumer Department (SENACON) platform of the Ministry of Justice Registered and resolved grievances and complaints 10,833 17,835 20,668 are also handled, in addition to those that arrive through PROCON (Consumer Equivalent Frequency of Complaints (FER) 7.64 7.21 6.77 Protection Department) and the State Ombudsman. Equivalent Complaint Duration (DER) 120.82 126.89 116.94 The Ombudsman’s goal is to respond to complaints within 10 business days. Copel also monitors the quality of service channels and the standard to receive and address complaints (1st Level). At the end of 2016, the Ombudsman’s To this end, deadlines are monitored daily. In 2016, the difference between the number of complaints recorded and complaints resolved was only 40 complaints in relation to the total number processed. As a result, most of the complaints Office began to work to secure ISO 9001 certification, expected to be completed that would have been escalated to external entities such as PROCON, SENACON, Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact at the end of 2017. 42 or even ANATEL, were resolved by the Company itself. Social and Relationship CapitalCopel | 2016 Sustainability Report Business Performance of the Telecom Business 2014 2015 2016 295,000 consumer units with regular benefits were served, representing 8.4% of Registered and processed grievances and complaints 576 1,178 4,474 Registered and resolved grievances and complaints 560 1,171 4,434 Equivalent Frequency of Complaints (FER) Equivalent Complaint Duration (DER) 0 11.1 3.1 4.4 5.4 8.3 the total households served by Copel Distribuição. The Fraternal Light Program (Programa Luz Fraterna), of the state of Paraná pays the bills for consumers registered in the TSEE, provided consumption does not exceed 120 kWh - in an initiative that represents a positive financial impact to low-income consumers, who are exempt from electricity expenses. In 2016, the state government invested in the program ca. BRL 40.5 million, benefiting an The increase in the absolute volume of complaints in the Ombudsman’s Office average of 156,000 families per month. of Copel Telecomunicações, from 2015 to 2016, may be explained in part by the The Nighttime Irrigation Rate and Nighttime Rural Rate programs encourage significant increase in the customer base, requiring constant adjustments in the increase of agricultural productivity with a discount of 60% to 70% in the the internal processes linked to service, service activation, and maintenance. rate for electricity used between 9:30 PM and 6:00 AM. In 2016, a total of 3,026 Another contributing factor was greater availability for access both in the farmers benefited from the Nighttime Irrigation Rate and 8,828 rural consumers Customer Service Center and in the Ombudsman’s Office, areas that had their benefited from the Nighttime Rural Rate Program. structures expanded and disseminated with greater emphasis among the various stakeholders. Use of Energy G4-EC8, G4-EU23, G4-DMA-EU7 Affordable Energy Efficient Use of Energy G4-DMA-EU7 Copel annually promotes actions toward conscious consumption of electricity, which include energy efficiency, safety, and health of the population. Efficiency is The energy rate has a direct impact upon the economy of consumers, regardless a permanent target of the campaigns, such as: empowering citizens (adults and their social status. This effect may be negative for the low-income population, which makes it necessary to adopt differentiated rates so that the financial impact becomes positive, directly or indirectly. This understanding is the driving force behind the movement that leads Copel to play its social role in partnership with the Federal, State, and Municipal governments. To this end, the Company promotes several programs to make energy affordable for all. children), and encouraging the use of more efficient equipment in all sectors. Copel makes public calls for energy efficiency projects, open to all industrial consumers, residential consumers (including housing complexes), commerce and services, public authorities, rural services, and public services (including public lighting). In 2016, a total of BRL 16 million was made available, and 38 projects were received, which are being evaluated and selected. This is the case of the Social Rate for Electric Power (TSEE), which offers discounts for consumption of electricity up to a limit of 220 kWh to families The Energy Efficiency Program promotes efficiency in the final use of electricity and applies Company resources towards this purpose. The main mechanism of registered in the Federal Government’s Social Program Registry, as long as the the PEE is the Copel in the Community project, which develops actions for low- provisions set forth in ANEEL Resolution 414/2010 are met. In 2016, a total of income consumers, benefited by TSEE. Lectures are given on safe and efficient 43 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Customers and Consumers Suppliers Management Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Social and Relationship CapitalCopel | 2016 Sustainability Reportconsumption, energy diagnostics, and replacing equipment with other more economical equipment. In 2016, the Copel in the Community project held 500 Our Suppliers G4-12 lectures, 39,000 energy diagnostics, and replaced 118,000 incandescent light bulbs with compact fluorescent and LED lights. For 2017, the replacement of 5,000 refrigerators with new ones with the Procel energy saving seal is planned. These actions seek to engage the community in the concession area in conserving natural resources, especially energy. Supplier Management G4-12 G4-EC9 Operation Distribution Expenditure for Suppliers Local Suppliers 3 % 1,179,686.66 740,549.28 62.78% Companies that make projects, provide consulting services and work in power plant and transmission line projects. ■ Generators and traders of electricity ■ Suppliers of materials and equipment ■ Services providers GENERATION TRANSMISSION DISTRIBUTION CONSUMER Generation and Transmission 596,712.59 554,111.47 92.86% Holding 69,770.29 56,270.64 80.7% Suppliers of fiber optic network equipment and materials. Telecommunications 349,278.36 149,565.97 42.82% Total 2,195,447.89 1,500,497.36 68.35% TELECOM 3 Copel Holding, Copel Distribuição and Copel Telecomunicações consider the suppliers of the State of Paraná to be local. Copel Geração e Transmissão considers the suppliers of the states where it operates as local, in this case, São Qualification, Selection, Contracting, and Monitoring G4-EN32, G4-LA14, G4-HR1, G4-HR10, G4-SO9, G4-SO10 Paulo, Paraná, and Mato Grosso. Copel requires compliance with labor and tax laws in bidding documents, About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Customers and Consumers Suppliers Management Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital For Copel, suppliers are an important link of the value chain, representing a strategic audience that is carefully considered in a sustainable management model, in line with corporate policies and focusing on improving the relationship between the parties. The permanent challenge is to mobilize and engage this chain in the ideals and values shared among them. contractual clauses, supplier registration manuals, and standards and technical Financial Capital manuals that are permanently available online. Issues related to social and environmental aspects, and human and labor rights, are addressed by Copel during the onboarding process, conducted with each new supplier. They are also included in specific clauses in contracts for Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact As a result of the work carried out in 2016, the Management Committee for the acquisition of construction work and services. Noncompliance generates Sustainability of Copel’s Supply Chain is updating the Supplier Manual that suspension of the agreement and inability to participate in the Company’s new guides suppliers regarding the Company’s policies and guidelines. bidding processes for a period of two years. 44 Social and Relationship CapitalCopel | 2016 Sustainability Report Critical Suppliers Copel considers critical suppliers those whose supply poses a significant risk to the Copel is also aware of the positive effects of the infrastructure of its projects in company’s business. In order to minimize potential risks from supplying products surrounding communities. This infrastructure favors the appearance or expansion and services, and also better protect the business, the Company classifies its of industrial and regional business centers, and consequently expands the supply supply chain according to the supplier’s level of criticality. of jobs and taxes, resulting in benefits and services for the population. Copel considers suppliers to be critical when their supplies represent a significant risk for the business in terms of the following aspects: legal, financial, environmental, occupational health and safety, safety of the population, image of the company, perception by client and society, and the processes involved. In the methodology, critical supplies are those considered the “main supplies,” and those that stand out from the others due to their high criticality when evaluated for their social, economic, and environmental importance, as well as their comprehensiveness in the business. Guided by the need to dialogue and serve several audiences, Copel works toward an efficient relationship with the communities in which this dynamic occurs. Thus, the Company seeks to improve the dialogue channels in the cities impacted by its operations. The first social and environmental impact assessment is conducted by Copel’s Business Development Office (DDN), in the analysis phase of business opportunities. If the business is of interest to the Company, the DDN carries out the approval with the Executive Board and the Board of Directors (CAD), responsible for approving the strategic decisions related to new investments. In 2016, the evaluation and identification cycle of critical suppliers occurred for the subsidiaries Copel Geração e Transmissão and Copel Telecomunicações, and the Technical Report was prepared with the methodology and identification of their Detailed assessments of impact upon communities are conducted in studies prepared during the environmental licensing of each project. It is at this stage that the impacts are measured according to the characteristics of the location Critical Suppliers. For the Holding Company, identification of critical suppliers is and project. From there, through the implementation of environmental programs, expected to be completed in 2017. Local Communities G4-EC8 Management of impacts negative impacts are mitigated and the positive ones are strengthened. All this takes place in conjunction with the dialogue with neighboring communities, the government, and local leaderships. Whenever cases of displacement are evaluated through a Social and Economic Registry and a situation of social vulnerability is identified, Copel provides a family resettlement process and social compensation for damages The social and economic impacts of Copel’s activities have different orders of for the installation of projects. Social Compensation consists in enabling magnitudes and vary according to the characteristics of each project and location. the affected family to be relocated to an area that is similar or better than For this reason, the Company follows the Sustainability Policy and the Code of the previous area, and to recover the economic status they had prior to the Conduct, whose principles of corporate governance include commitments made project. Additionally, properties undergoing condemnation are compensated. under the UN Global Compact. In 2016, two families were relocated, totaling four people. G4-EU20, G4-EU22 45 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Customers and Consumers Suppliers Management Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Social and Relationship CapitalCopel | 2016 Sustainability ReportColíder HPP Araraquara – Taubaté Transmission Lines The Colíder Hydroelectric Power Plant, which is in the final phase of implementation Installation of transmission lines has impacts on the communities where Copel in Northern Mato Grosso, has in place 32 social and environmental programs. The operates. Properties and residents are affected by the loss of land and production, actions aim to avoid risks, and mitigate and compensate for the changes that may resulting from the creation of right of ways, as well as the modifications in the occur in the social and natural environments of the region affected by the work. natural landscape of the location. Copel provides a website for the community to have access to all reports produced To this end, Copel carries out a series of initiatives to mitigate these impacts. This by the mitigation programs. The website offers information regarding the project, occurs through compensatory remuneration for the owners for their losses, as well About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital and provides a communication channel open to the community. G4-SO2 as the adoption of a series of proactive programs and actions associated with the Intellectual Capital Program for Fostering and Monitoring Sustainable Local Production Arrangements compliance and conditions established in environmental licensing. Among the initiatives, the programs that stand out are Social Communication; Social and Relationship Capital Customers and Consumers Social Interaction or Relationship with the Community; Environmental Education Suppliers Management The Program for Fostering and Monitoring of Sustainable Local Production for Communities; The Local Production Arrangement, Tourism Strengthening; and Arrangements developed by Copel is one of the measures to compensate for The Free Line, to meet demands in occupations for housing or economic purposes the installation of the Colíder Hydroelectric Power Plant and is described in the under the transmission lines. company’s Basic Environmental Project. Investments in the municipalities totaled more than BRL 5 million. You can view this contribution on Copel’s website. Transfer of resources is part of the support program for the activities of family farmers residing in the municipalities in the Copel is currently installing the 500 kV Araraquara - Taubaté transmission line, 356 km long, in 28 municipalities of the State of São Paulo. The Company implemented the Social Compensation Program with the purpose of compensating for the loss plant’s area of influence. The initiative enables, for example, about 100 properties of economic activities suffered by the communities, due to the right of way for the in the cities of Colíder, Itaúba, Nova Canaã do Norte, and Cláudia to receive monthly transmission line. technical visits from agronomists. The professionals in the field teach residents about sustainable agriculture - primarily organic, aiming to ensure qualified food Copel provides professionals in social and land management issues to enable production and better living conditions for families. proper and dignified relocation, in agreement with those affected. Rural technical assistance is strengthened by other Copel initiatives, such as training workshops on management processes, processing and marketing family farming products, in order to improve the conditions for including farmers in the To this end, regular visits are carried out to the communities affected and a transparent communication channel is established. Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact local production chain. 46 Additional programs intended for local communities are ongoing. Social and Relationship CapitalCopel | 2016 Sustainability ReportDialogue with Communities Copel values a good relationship and permanent dialogue with the communities around its administrative buildings and projects. To this end, the Company is structuring a specific program for engaging with the surrounding community. The initiative began with mapping communities within a radius of up to 2 km from Copel’s buildings in the south-central region of Paraná. The objective is to improve the relationship with these communities and minimize the possible negative impacts caused by the activities carried out in the area. The survey has already enabled the development of engagement actions, through a visit to four institutions in the communities. The meetings were held to identify possible actions and partnerships to be developed in 2017, through groups of volunteers. Distribution Networks G4-SO1, G4-EU22 Distribution projects do not cause human displacement. Particularly in High Voltage Distribution Lines projects (LDAT), there is compensation for implementing the right of ways for the Line. This measure does take ownership from land owners, but establishes some restrictions for its use and, for that reason, results in compensation. In 2016, a total of 580 people were compensated. G4-EU22 As part of the implementation processes of new projects, Copel conducts an awareness program with the contractors (third parties) who will carry out the works and also the Community Relations Program with the surrounding community, where explanations are given about the work to be carried out, caution concerning the works, and the benefits they will bring to the community. In 2016, the Company carried out engagement programs with communities in all 25 operations carried out throughout the year 4. The program called Programa de Educação Patrimonial has been in place since 2014, through a contracted company (Fundação Aroeira). The target audience for the activities includes the local community directly affected by the installation of the projects, teachers at schools in the region, and construction workers at operational and management level. The program addresses issues such as education on citizenship, valuing cultural identity, preserving heritage, educating multiplier agents, and disseminating scientific research. The methodology used seeks to instill in the community with the interest in knowing and understanding its identity, history, and culture. Investments in local development In 2016, Copel invested in infrastructure and services to generate benefits in the communities where it operates. These investments totaled BRL 662.75 million. G4-EC7 Copel’s investments in infrastructure and services provide better living conditions for the population, economic development in the regions and, consequently, employment and income generation for families, the State, and Municipalities. Taking into account the legal requirements for licensing the projects, the Company always seeks the most effective way to respond to the wishes of the local communities in the municipalities where it operates. As part of the Distribution Development Plan (PDD), in 2016, Copel Distribuição invested BRL662 million in ensuring that the demands of electricity consumers are met, and in contributing to the improvement of the quality and reliability of the electrical system. Additional PDD resources were invested in various social interest programs, including rural electrification, housing, projects for isolated communities, and settlements. In addition, Copel Geração e Transmissão contributed about BRL 750,000 in the state of Mato Grosso, where the Colíder HPP is located, as part of the Action Plan for Malaria Control (PACM). Ambulances, vans, computer equipment, instruments, About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Customers and Consumers Suppliers Management Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 4 To establish the number of operations that implemented community engagement programs, the projects served by the Community Relations Program and the Equity Education Program were included. 47 Social and Relationship CapitalCopel | 2016 Sustainability Reportand laboratory materials were donated, as well as inputs and entomology equipment. In addition, the local infrastructure has gained the headquarters of the Colíder Tutelary Council, a landfill in Nova Canaã, and the Colíder Municipal Park by social institutions and suppliers working in communities close to their projects. The trophy is presented annually on International Volunteer Day, celebrated on December 5. was revitalized. Indigenous Communities 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 for communities in the state. In 2016, a total of 819 consumer units of Indigenous people were included in the Social Electricity Rate - Low Income. For the beginning of 2017, a major operation is scheduled for the villages of Aldeia Apucaraninha, for inspections of connections EletriCidadania Volunteer Program On Volunteer Day, Copel pays homage to employees who volunteered throughout the year. The awards are given under the EletriCidadania Program and the winners of the 2016 edition received trophies with prominent inscriptions about the four Intellectual Capital prerogatives of the Sustainable Development Goals (SDGs), established by the UN, that were reached through their volunteer activities. On that occasion, Copel also launched a new portal for the EletriCidadania Program. in consumer units, commercial registration and guidelines regarding the safe and In 2016, the Amigas da Mama Association was the winner of the Social Institutions conscious use of energy and rate benefits. Education for Sustainability In 2016, the Copel Sustainability Seminar was reformulated and extended to other cities in the state of Paraná, to the cities of Londrina, Ponta Grossa, Cascavel and Reserva do Iguaçu, under the name “Sustainability Dialogues.” The Seminar aims to share with employees and suppliers information about corporate environmental and social programs, providing greater integration with the subject areas, enabling progress and innovation in sustainable actions. The aspects covered were: Human Rights, Global Compact, Sustainable Development Goals, Mobbing, Sexual Harassment, Ethics, Corporate Citizenship and Values, Climate Change, Eco-efficiency, Solid Waste, Gender and Race Equality, Affordability, and The Susie Pontarolli Award. Suppliers from each region also participated and had the opportunity to present success stories. Since 2002, Copel has been promoting the Copel Sustainability Award - Susie Pontarolli Trophy. The award focuses on social responsibility projects conducted 48 award, with the project Ação Feliz e Responsabilidade Social (Happy Action and Social Responsibility), which promotes assistance and encourages women facing breast cancer to share their experiences. In second place was the Associação Franciscana de Educação ao Cidadão Especial (Franciscan Association of Education for the Citizens with Special Needs - AFECE), and third place went to the Ação Social para Igualdade das Diferenças (Social Action for Equality of Differences - ASID Brazil). The institutions received cash prizes in the amount of BRL 10,000, BRL 6,000, and BRL 4,000, respectively, as an incentive to continue the projects. The Susie Pontarolli Trophy also recognizes social and volunteer projects developed by Copel suppliers. In the Suppliers category, the winners were Radiante Engenharia, the Associação de Educação Familiar e Social do Paraná (Family and Social Education Association of Paraná - AEFSPR), and Landis+Gyr. Suppliers received certificates from Copel for their work (details about the winning projects are on the Copel website). About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Social and Relationship Capital Customers and Consumers Suppliers Management Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Social and Relationship CapitalCopel | 2016 Sustainability ReportThrough the project called Iluminando Gerações (Lighting Generations), Social Investments through Fiscal Incentives Copel provides informative and preventive lectures to fourth graders at the G4-EC1 elementary school level, on sustainability geared toward conscientious and safe use of electricity, use of natural resources (energy and water), and proper disposal of waste. In order to consolidate this knowledge, after the lectures, Copel distributes to the audience present- students, teachers and school employees- a kit containing a primer called “A energia elétrica e você” (“Electricity and you”), which addresses care in using electricity and the use of natural resources. G4- EU24 Copel supports and participates in several initiatives with government agencies and other institutions, aiming to promote the sustainable development of the regions where it operates. Selection of the initiatives followed the company’s strategic references, commitments assumed with the Global Compact, and the state of Paraná’s government policy. National Electricity Safety Week brings together Copel volunteers for visits to Area of Investment Amount homes, construction sites, cooperatives, and schools throughout Paraná. They teach the population about the safe use of electricity. Under the coordination Culture ■ Rouanet Law - BRL 7.6 million ■ PROFICE (ICMS) - BRL 8.58 million ■ Mecenato Municipal Curitiba (ISS) - BRL 252,000 of the Brazilian Association of Electricity Distributors (Abradee), the campaign promotes lectures, distributes information and guidance material to prevent accidents involving electrical shock. This initiative operates on six main fronts: civil construction, rural areas, pruning trees, electricity theft, antenna installation, and caution with kites. In addition, on its website, Copel made a Manual available on “Electricity without Risks” which provides important guidelines on the correct use of Education and social initiatives ■ FIA - BRL 544,000 ■ Elderly Act - BRL 544,000 Sports Health ■ Sports Incentive Act - BRL 544,000 ■ PRONON - BRL 544,000 ■ PRONAS/PCD – no investment in 2016 electricity and basic recommendations to prevent accidents on the street, at Copel’s investment in 2016, arising out of fiscal waiver, totals BRL 13.2 million. home, in the field, and in construction. The initiatives include the areas of education, culture, sports, and health. This year Copel started promoting cultural projects through PROFICE - State Program for Promotion and Incentives for the Culture of Paraná, a form of tax incentive The initiatives for education on sustainability can be found in the sustainability section from ICMS. 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 Social Initiatives protection of the environment. Other questions can be answered through the Fale Conosco (Talk to Us) - Sustainability, a direct channel established by Copel with the population of the state of Paraná. Solidarity Invoice Project - each agreement to receive the Copel invoice via email will be worth a BRL 1.00 (one real) donation to the institution to aid people with special needs Federação das Associações de Pais e Amigos dos Excepcionais - FEAPAES/PR, at no cost to consumers. Since its launch, approximately BRL 80,000 have been donated to all APAEs linked to the federation. 49 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Customers and Consumers Suppliers Management Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Social and Relationship CapitalCopel | 2016 Sustainability ReportCobrança de Valores de Terceiros - CVT, (Collection from Third Parties) collects elements that has helped tell the history of the region for 16 years. Maintained by Copel, contributions via electricity bills, for participating philanthropic entities. The amounts the Museum is located next to the Governador Ney Braga Hydroelectric Power Plant. to be included must have a written authorization from customers. Donation limits are Its mission is: a minimum of BRL 1 and a maximum of BRL 150. In 2016, a total of 208,000 donators collected a monthly average of BRL 1.9 million, distributed among 120 philanthropic institutions. ■ To showcase the cultural heritage of the region under its care, valuing the cultural and environmental memory of Paraná; ■ To raise awareness toward preservation of biodiversity and all forms of life; The More than Energy Project, conceived by Copel in order to promote projects ■ To demonstrate the interaction of men and women with their environment, involving deaf and deaf-blind people with the following aspects: education and social inclusion; safety of the environments to cater to them; accessibility; health and quality of life; and training and qualification of professionals serving the students. Funding for project development total BRL 750,000 and comes from the line of social investments for companies (ISE) from the National Bank for Economic and Social Development (BNDES). In 2016, through a bidding process, a specialized company was hired to carry out the architectural and complementary projects for the first two institutions selected by the project. The bidding process for hiring companies to carry out the work planned in the projects is scheduled for the beginning of 2017. The Cultivate Energy Program, developed in partnership with municipal governments and communities, encourages the establishment and cultivation of community gardens in vacant spaces under its distribution and transmission lines, in order to promote social inclusion, food safety, and income generation in socially vulnerable communities. Through this activity, it is also possible to provide the reflected in the social-cultural aspects of the collection; ■ To demonstrate Copel’s commitment to preservation of environmental, historical, and cultural heritage through social and environmental compensation programs derived from implementing generation, transmission, and distribution projects. Since its inauguration in December 2000, it was responsible for the educational and monitoring activities of over 300,000 people, who became aware of Copel’s environmental and social actions. In 2016, the Museum had 7,309 visitors, among guided tours, spontaneous visitors, and at the Traveling Museum. In 2016, the Museum was awarded in the 14th edition of the Brazil Benchmarking Award, a project that rewards companies and/or projects considered as Best Social and Environmental Practice. Participating in the award for the first time, in its population with greater safety, since the existence of the gardens inhibit irregular 14th edition, the Regional Museum of Iguaçu registered a project that produced and high-risk occupations under the power lines. With the positive results of the first garden implemented in the municipality of a book of compositions. This book alluded to the Museum’s 15 years, celebrated in 2015, and rakned 12th among over 85 projects registered for this edition of the Award, enabling Copel Geração to be included in the Ranking of Best Social and Maringá/PR in 2013, other vegetable gardens were enabled and are currently Environmental Practices of 2016. benefiting nearly 140 families from three different communities in that municipality. In 2016, Copel formalized the rules and procedures for expanding the program’s capacity to serve. For 2017, the implementation of new gardens is planned for other municipalities in the same state. The Iguaçu Regional Museum, located on the banks of the largest river in the state of Paraná, in the South-Central region of the state, has been guarding and preserving 50 For this book, of the 127 texts registered, 15 essays were selected from 5th grade students from the André Dorini and São Francisco de Assis municipal schools in Manguerinha-PR, a city that houses the machine room of the Gov. Ney A. Braga Hydroelectric Power Plant. About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Customers and Consumers Suppliers Management Local Communities Indigenous Communities Education for Sustainability Social Investments throught Fiscal Incentives Social Initiatives Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Social and Relationship CapitalCopel | 2016 Sustainability Report09 . NATURAL CAPITAL Climate Change // Eco-efficiency // Ecosystems // Reservoirs and Water Quality 51 Copel | 2016 Sustainability Report 09. Natural Capital Climate Change G4-EC2, G4-15 Sustainable development is an essential part of Copel’s strategic growth objectives. The Company believes that financial resultts should be obtained in a manner aligned with social and environmental responsibility guidelines as part of a commitment to the population of Paraná, the other states in which it operates, and future generations. Copel’s operations are cross-sectional and involve all business fronts of the Holding Company in the areas of energy and telecommunications. Materialization of these commitments is in Copel’s Agenda for Climate Change, a guide developed by the Company in 2011 aiming to maintain coherence of the actions of the various business fronts with the aspect. Through this platform, Copel defines positioning, plans actions, and makes corporate decisions that take into account the impacts on the environment caused by climate change. Commitments Assumed in 2016 ■ Manage annual greenhouse gas emissions (GHG); ■ Conduct studies and projects related to climate change; ■ Reduce GHG emissions from Copel’s activities; ■ Raise awareness towards GHG emissions in the value chain; ■ Assess the risks and opportunities of new projects, from acquisitions to mergers of assets based on carbon; ■ Assess the risks and opportunities of climate change for the Company’s business. The committee monitors those commitments approved by senior management, validates strategic documents related to climate change, assesses risks and opportunities, fosters initiatives that contribute to mitigating greenhouse gases, and Incorporated into the Company’s risk matrix, actions related to the Climate Change drives actions to adjust its businesses to the climate change scenario. In addition, it Agenda involve mitigating environmental impacts inherent to its business activity, is responsible for defining strategies for disseminating the Climate Change Policy investments in technological innovations that promote reduction in greenhouse and participating in discussions with external entities. gas (GHG) emissions, and environmental preservation programs disseminated to employees, suppliers, communities, and society in general. The Adaptation Subcommittee was primarily created to identify Company processes that may be vulnerable to the effects of climate change, based on history or relevant In 2016, the progress was reflected in the implementation of the Climate Change facts. It proposes adaptation plans that are applied to the processes identified Policy, aiming to promote actions to reduce greenhouse gas emissions and prepare as a potential risk, and develops methodologies to add the adaptation criteria to to cope with the effects of climate change on business. In order to implement the corporate risk matrices. Policy, Copel reinforced and expanded its commitments to climate change. Adaptation to Climate Change About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact In 2016, within the scope of the Corporate Climate Change Management Program, Copel created a Management Committee represented by The Adaptation Subcommittee was primarily created to identify Company the effects of climate change, processes that may be vulnerable to employees from each department of the Holding Company and its based on history or relevant facts. It proposes adaptation plans that subsidiaries. The committee is composed of three technical subcommittees: are applied to the processes identified as a potential risk, and develops Adaptation, Carbon Valuation, and Management and Mitigation of Emissions. methodologies to add the adaptation criteria to corporate risk matrices. 52 Natural CapitalCopel | 2016 Sustainability ReportThe Adaptation Subcommittee suggested projects focused on generation and Scope 1 of this work focuses on reducing consumption of fuel used in the Company’s transmission processes, taking into account the risk of water shortage and the operations as a whole. One of the solutions to complying with this guideline is need to measure variations in the flow of tributaries at the hydroelectric plants under the Company’s concession. through the use of distance communication technologies, whenever possible, to avoid the need for employees to travel from the executive and operational areas to meetings and training sessions. Copel develops a pilot project with FGV In 2016, emissions by Copel Holding and its wholly-owned subsidiaries were In 2016, Copel initiated a pilot project in partnership with the Center for Sustainability considered. The results can be seen in the table below. Studies of the Getúlio Vargas Foundation (FGV). The Company’s vulnerability to climate G4-EN15, G4-EN16, G4-EN17, G4-EN19 will be studied in order to suggest adaptation measures. The project aims to discover the impacts of climate change in the current scenario and to prepare a projection for 2040 in the north and northwest regions of Paraná. The study was divided into three phases: diagnostics of vulnerability to climate change, development of an adaptation plan, and implementation and assessment of the project. So far, it has been possible to point out three critical points in the regions studied: increases in temperature, wind storms, and volume of rainfall. The direct consequences of these phenomena are the increased dilation of power cables, toppling of transmission line towers, risk of accidents to the population, fires, and temporary power outages. The second phase of the project will take place in 2017, when an adaptation plan will By type of gas (tCO2e) Scope 1 Scope 2 Scope 3 CO2 CH4 N2O HFCs SF6 187,880.91 249,026.27 3,055.00 89,762.60 1,102.71 1,698.31 2,300.84 0 0 -  -  3.82 44.25 0 0 be defined to address the adverse climatic effects in the coming years, pointing out the TOTAL 282,745.37 249,026.27 3,103.07 alternatives that may be applied in order to minimize the risks. Biogenic CO2 (t) 1,679.44 - 164.37 Note: Emissions referring to changes in land use are not yet incorporated in scope 1 of the Company, since this is a new source in the inventory, which is still being prepared. Management of Greenhouse Gas (GHG) Emissions Copel sets goals for reducing greenhouse gas emissions as one of its commitments under the Climate Change Agenda. Since 2009, the Company has Scope 1 considered its own sources of emissions from stationary and mobile combustion, fugitive emissions, and industrial effluents. Upon completion of the inventory, it will be possible to assess the increase in emissions due to the invested in producing annual inventories, based on semiannual consolidated inclusion of the new source. The 2016 inventory showed that there was an 11% monitoring, to quantify GHG emissions following the methodology of the reduction in emissions from stationary combustion, which is important, since this Brazilian GHG Protocol Program. source represents over 85% of the company’s emissions. About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 53 Natural CapitalCopel | 2016 Sustainability ReportScope 2 considered emissions from consumption and loss of energy. Compared capable of measuring the costs related to increase in emissions or the investment with 2016, there was a 44% reduction in emissions due to the reduction of the to be made to reduce them. grid emission factor, and reduced energy consumption, and losses in energy Copel expects that this methodology will be able to guide the new business transmission and distribution. Scope 3 emissions were considered to be air travel, transport and distribution (upstream), and waste from the company, but this scope has not yet been finalized, so it is not possible to make comparisons at this point. areas in assessing risks and financial opportunities regarding aspects related to climate change. As measures for study, the Company has invested in the participation of its employees in discussion forums such as the CEBDS (Brazilian Business Council for Sustainable Development) and the EPC (Companies for the Climate of GVces) The inventory was assured by an external entity and will subsequently be and also by simulating a carbon market coordinated by the EPC using the BVRio published in the public records of the GHG Protocol, and in the climate change platform. forum in the state of Paraná. This simulation enabled the Company to understand the structure of a possible About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital carbon market to be installed in Brazil and how to operate it, since in 2016 the Natural Capital Paraná Climate Seal: Gold for the Four Copel Subsidiaries Copel’s commitment to reducing the impact of its operations was recognized, for the second consecutive year, through the Paraná Climate Seal. Copel was recognized in the Gold category, reserved for companies that submit their inventories for external Eco-efficiency Eco-efficiency Program assurance. In 2016, seeking further transparency and showing internal alignment Copel understands that eco-efficiency is an important management philosophy Company participated in the auctions promoted by the EPC. Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital regarding this aspect, the four subsidiaries of the Company participated individually. for achieving economic benefits in parallel with environmental improvements. Financial Capital Of the 15 seals awarded in this edition, only seven were in the Gold category, and four Thus, the Eco-efficiency Program, in force since 2014, aims to integrate the Social Audit of them were awarded to the Copel companies. Registration in the Paraná Climate Seal is voluntary and aims to encourage state companies to publish their greenhouse gas emissions inventories, the main vector for climate change worldwide. Carbon Valuation various initiatives developed in the company related to reducing and optimizing the use of natural resources, by strengthening and enhancing them. In addition, the program intends to support projects with a sustainable focus on cost GRI Content Index Annex - Incorporation of the Principles of the Global Compact reduction and propose new actions that may contribute to this purpose. The current economic scenario, coupled with the legal and regulatory changes that have affected the electricity sector in recent years, reinforces the importance of implementing actions toward optimizing costs. To this end, the In 2016, Copel included carbon pricing in the responsibilities of the Climate awareness and involvement of the employees are essential to guaranteeing the Change Committee. Since this aspect is still new, the Company understands company’s commitment and achievement of its goals. Engaged employees are that it will take at least two years of study to be able to implement any type of aware of impacts on costs related to their roles and areas of operation, thereby action. The idea is that in the coming years, a methodology will be developed increasing company revenues. 54 Natural CapitalCopel | 2016 Sustainability ReportThe actions of the Eco-efficiency Program are concentrated in five theme lines: Copel’s experience with the Eco-efficiency Program was also presented at the energy, water, paper, mobility and fuel, and education and communication. seventh edition of SMARS (Brazilian Seminar on the Environment and Social In 2016, the Eco-efficiency Program was one of the aspects of the Sustainability Dialogues, promoted by the Sustainability Education Program in the following cities Responsibility of the Electricity Sector), held in November 2016, at the Electricity Research Center (CEPEL) in Rio de Janeiro (RJ). in the state of Paraná: Londrina, Cascavel, Reserva do Iguaçu, and Ponta Grossa. The purpose of this event was to promote technical discussions on the main The main actions developed by Eco-efficiency were introduced, as well as some future perspectives. challenges involving planning, implementation, and operation of projects in the Brazilian electricity sector, in view of commitments to sustainability, About the Report Message from the President Industry Context About Copel Governance and Sustainability environmental legislation requirements, and corporate social responsibility. Human Capital The meetings were also used to receive suggestions and reports of other experiences regarding this aspect. In total, 232 employees and 34 suppliers participated in the events. The selection of the work submitted by the Eco-efficiency Program coordination reinforces the importance of this aspect in company management, and is a good recognition of the actions carried out at Copel so far. Summary of the Eco-efficiency Program in 2016 In 2016, initiatives were carried out to reduce water and energy consumption in Copel’s largest administration buildings. There was a 1% reduction in water consumption, compared with 2015. The goal for 2017 is to reduce consumption by 2%, compared with 2016. Also worth noting are the actions toward the use of rainwater - in 2016, a total of 147.86 m3 of rainwater were collected and used for administrative purposes. In 2017, we intend to improve management of this consumption data and encourage the implementation of new tanks. Regarding energy consumption, the reduction goal for 2016 was 2% compared with the previous year (or 4% compared with base year 2014). Performance was 8% above the goal. For 2017, Copel plans to reduce energy consumption by 2% compared with 2016. For paper consumption, the goal was to achieve 40% rate for duplex printing in 2017, and 50% in 2018. In addition, several internal awareness and information campaigns were carried out. Specific actions for saving paper, improving employee mobility, and reducing consumption of inputs and natural resources are planned for Water Consumption The administrative consumption of water is monitored through the Eco-efficiency Program. Consumption data is obtained semi-annually from the companies responsible for the municipal supply. In 2016, the goal established by the Eco-efficiency Program was to reduce water consumption by 5% compared with 2015. The goal was not achieved, there was a reduction of only 1%. It is important to note that reduction in consumption from 2014 to 2015 reached the goal of 5%. In the accumulated period from 2014 to 2016, consumption was reduced by 6%. For 2017, the goal is to reduce by 2% compared with 2016. The main actions carried out toward reaching the established goal include replacing simple faucets with automatic faucets, replacing sanitary valves with dual-flush toilets, and internal awareness campaigns on the rational use of this resource. In addition, the possibility of installing tanks for the use of rainwater in some of the Company’s the coming years. It is important to note that most of the actions in the Eco- units is being studied. efficiency Program were carried out without large specific investments, and a routine building maintenance budget was used. In 2016, Copel’s total water consumption in the administration units located in the state of Paraná was 135,678 m³. G4-EN8, G4-EN9 55 Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Natural CapitalCopel | 2016 Sustainability ReportIn 2016, a total of 99,481,215.61 m³ of water from ground sources were withdrawn, Below are the amounts corresponding to fuel consumption by the Company. which were used for cooling at plants. The volume of water returned to the body of water is practically the same as the volume withdrawn, since only an immaterial Type of Fuel Consumption (GJ) volume was lost through evaporation, and was not considered as water consumed by the Company. Coal (Figueira Thermoelectric Plant)* 1,759,580.98 About the Report Message from the President Industry Context Source of water Administrative consumption (m3) Underground Sources Municipal Supply 22,750 112,928 Electricity and Fuel Consumption G4-EN3 Copel’s total energy consumption in 2016 was 2,101,180.96 GJ, considering the scopes for Generation, Transmission, Distribution, Telecom, and Holding. The following table shows the energy consumption in 2016 and the two years before. Diesel** LPG*** Ethanol Gasoline Aviation Kerosene TOTAL * Coal is used to produce electricity in a thermoelectric plant. ** Total diesel used in transportation and emergency generators. *** Total consumption in the company’s forklifts and kitchens. Ethanol, gasoline, CNG and aviation kerosene are the fuels used in the Company’s own means of transportation. Electric power consumption (in MWh) Copel Telecomunicações S.A.* 2014 2015 2016 2014 - 2015 2015 - 2016 2014 - 2016 countries to promote cycling as a transportation option. In 2016, this date was Evolution Evolution Evolution Bike to Work Day is inspired by the event of the same name held annually in several 489.9 535.2 656.4 9% 23% 34% greeted with a special breakfast. The action involved the company’s own employees celebrated on May 13, and at Copel, employees who signed up in advance were Bike Day Copel Distribuição S.A. 24,171.8 23,498.2 21,160 -3% -10% -12% Copel Geração e transmissão S.A 8,813.7 8,314 7,775.8 -6% -6% -12% Copel Renováveis S.A.* 10.5 64.6 Holding 87.1 186.4 516% 114% Grand Total 33,475 32,445 29,843 -3% -8% -11% * The increase in energy consumption was due to the evolution of the operations of this subsidiary and contractors at the headquarters, Atuba, Santa Quitéria, and hub at KM3, in Curitiba, as well as employees of several municipalities in the state of Paraná. In total, 148 employees participated. They answered a questionnaire in which the Company recorded the following data: ■ 1,726 km in commuting back and forth (home - work); ■ About 225 kg of carbon dioxide (CO2) were prevented from being released into the atmosphere; ■ The group would stop issuing 60 tons of CO2 over the course of a year with the use of a bicycle every day for work. in the period analyzed. 56 175,312.35 About Copel 9.46 2,642.52 52,494.78 3,706.07 1,993,746.16 Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Natural CapitalCopel | 2016 Sustainability ReportDisposal of industrial waste Destination Description Unit Amount Waste Management G4-EN23 Industrial Waste The waste generated in the company’s operations is segregated, packaged and sent to one of the warehouses, where it is stored until disposal. The entire process adopts criteria according to current norms and laws. In its operations, the Company mainly generated ashes from the Figueira Disposal Thermoelectric Plant, copper and aluminum cable scrap, poles, crossarms, ceramic isolators, transformers, lead-acid batteries and insulating mineral oil. All disposals are made according to legislation, prioritizing reuse and recycling whenever possible, as established in the priority order of the National Policy on Solid Waste, requiring from contracted companies all necessary technical qualification. The disposal of waste generated revenues of approximately BRL 5 million. In 2016, Copel reached the goals established for reuse or recycling of 90% of its Composting industrial waste from distribution and 70% of the industrial waste from Copel Geração e Transmissão. However, the goal of recycling 50% of the ashes generated Co-processing was not reached due to the delay in the modernization work of the Figueira Thermoelectric Plant, and consequently, migrating the operation of the Figueira plant to Copel Geração e Transmissão, which studies new forms of final disposal Concrete parts Crossarm Miscellaneous equipment Isolators Meters Furniture and utensils Insulating Mineral Oil* Poles Plastic waste Scrap metal Fiber optic cable Ashes Wood Golden mussel Oils and solvents* Contaminated waste* Lead-acid batteries Rubble Fluorescent lamps* Landfill Rubble and wood for this waste. For 2017, Copel has the following goals: ■ A reduction of 95% in industrial waste from Distribution sent for reuse or recycling; Recycling Wood Oils and solvents* Tires Scrap metal ■ 60% of the industrial waste from Copel Geração e Transmissão sent for reuse or * hazardous wastes recycling (ashes not included). 57 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact unit unit tons tons unit unit l m tons tons m3 m3 tons m3 m3 tons tons tons m3 unit m3 l unit tons 148 44,828 102 498 220,639 450 220,000 470,485 32.3 964 111 15 17,105 93.3 21 13 23.8 144 20.8 17,998 1,205 1,588 28 3.28 Natural CapitalCopel | 2016 Sustainability ReportAdministrative Waste Generation Projects Copel has in place the Solidary Waste Sorting program for disposal of recyclable Construction of hydroelectric generation projects may contribute to reducing waste with associations and cooperatives of recyclable materials. The program is species important to the local ecosystem, due to suppression of vegetation in the conducted in partnership with these entities and works to contribute with income catchment basin; conversion of habitats caused by damming or rivers in order to generation and improvement in working conditions for pickers. create a reservoir, and changes in ecological processes outside the natural variation In 2016, the goal to expand the program was to reach 65% of the company’s employees. This goal was exceeded, reaching 69% of the employees, and Copel received a certificate from the State Public Ministry for excellence in compliance with State Decree No. 4,167/2009, which requires the mandatory segregation of recyclable solid waste and subsequent sending to associations and cooperatives of recyclable materials. range. Mitigation of impacts is done through programs involving suppression of vegetation, monitoring and rescuing species of wildlife and flora, recovering Permanent Preservation Areas, replacement of forests, monitoring and recovery of archaeological heritage, among others. In the case of Copel Renováveis wind farms, no significant impacts on biodiversity were identified that could not be mitigated, considering the magnitude of the works and their locations. G4-EN12 Disposal of Administrative Waste During the installation phase of wind power generation projects, fragmentation Destination Landfill Composting Recycling Ecosystems Description Organic/Rejects Organic Other recyclables Paper Plastic Metals Weight (kg) 427,606 34,967 3,571 130,939 15,773 5,668 Mitigation of Impacts Caused by Projects G4-EN12 The implementation and operation of projects impact ecosystems in their area of and edge effect may occur due to suppression of vegetation and loss of habitats, increased risk of accidents involving wildlife, and risks of increased hunting activities. In order to mitigate this type of impact, Copel Renováveis requested that companies involved in the construction of wind farms conduct campaigns to relocate and rescue wildlife, as well as a Rescue and Management Program for the Plant Species Melocactus violaceus and Griffinia gardneriana. Transmission and Distribution Projects Forest fragmentation and reduced populations of native species caused by suppression of vegetation in the right of way is the main direct and indirect negative impact on biodiversity due to the construction of transmission and distribution projects. In order to mitigate these impacts, Copel carries out detailed and multidisciplinary studies of alternative routes with minimal impact, prioritizing the use of previously altered areas that are environmentally and socially less fragile. influence. Before beginning installation, Copel conducts several environmental Where the route must pass through certain areas where forest remains are studies in order to assess the best ways to avoid or mitigate negative impacts more preserved, the Company places higher towers in the right of way to while promoting the positive ones. minimize impacts. 58 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Natural CapitalCopel | 2016 Sustainability ReportIn 2016, a pilot study called “Valuation of ecosystem services related to the Riparian Forests Program at a plant on the Iguaçu River, Paraná” was completed and published in partnership with the Center for Sustainability Studies of FGV. According to the data analyzed in this study, it was concluded that maintenance and recovery of riparian forests of the reservoir of the Foz do Areia (HPP GBM) plant could generate the avoided cost of approximately BRL 50 million over a 10-year period. In addition, reforestation actions in this same area and time period could remove nearly 60,000 tons of CO2e from the atmosphere. More details on this study may be obtained at: http://mediadrawer.gvces.com.br/publicacoes/original/fgv-gvces- tese-estudos-casos_set16.pdf. This year, new valuation studies began. One of them, to be published in 2017, refers to managing vegetation in electrical systems and the object of study is the Urban Forests Program. The other will address soil erosion on high voltage power distribution lines (LDATs). Forest Compensation G4-EN13 In the same period, 23,000 native forest seedlings were planted in Ibicatu State Park, totaling six hectares for environmental compensation of the Londrina - Figueira C2 TL project. Over 1,455 seedlings were planted for urban afforestation as a form of compensation for the Bateias - Curitiba Norte TL project. The Company also donated 1,615 seedlings to the Campo Largo City Government, as compensation for these projects. In the State of Mato Grosso, approximately 60,000 seedlings of native species were planted in the Permanent Preservation Area of the future reservoir of the Colíder HPP, totaling 59 hectares of reclaimed area in 2016. In the State of São Paulo, where it implements transmission lines, the Company compensated for the impact of the project by transferring 870 native seedlings to contractors and Copel itself replanting 6,500. Biodiversity Preservation Ichthyofauna Studies Copel recognizes and values the importance of biodiversity to maintaining ecosystems, and especially, life. For years, it has been monitoring the fish fauna that live in its reservoirs, distributed over five different watersheds in Paraná, About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital and the Teles Pires River, located in Mato Grosso. This monitoring seeks to Financial Capital Since 2012, Copel has maintained an agreement with the Environmental Institute follow and understand the condition of fish in different reservoirs, guiding the Social Audit of Paraná (IAP) through which it assigns contractors to dedicate exclusively to environmental actions of Copel and environmental agencies. In addition, it the production of native forest seedlings. These seedlings are used to restore develops captive breeding techniques for fish native to the Iguaçu River basin, Permanent Preservation Areas, Legal Forest Reserves, and Forest Restoration with the purpose of conserving these species. GRI Content Index Annex - Incorporation of the Principles of the Global Compact Areas of the State of Paraná. In 2016, reforestation was carried out in urban areas with seedlings of native trees donated by third parties and plantations. There were 400 native forest seedlings and 2,434 urban afforestation seedlings. The initiative is part of the environmental compensation for cutting vegetation for power distribution lines in the State of Paraná. In other environmental actions, such as those promoted by the Internal Social and Environmental Committees (CISAs), the Company collaborated by planting 284 native forest seedlings. 59 Since 1982, at the Governador Ney Braga Plant (Salto Segredo), Copel has maintained the Experimental Station for Ichthyology Studies, where it produces catfish, lambari, and surubim-do-iguaçu fingerlings. The fish produced are released along the river according to conservation guidelines. The main species studied and produced are the Jundia (Rhamdia quelen), lambari (Deuterodon) and the surubim-do-iguaçu (Steindachneridion melanodermatum). There is also the release of fish at environmental education events and on Natural CapitalCopel | 2016 Sustainability Reportcommemorative dates, such as World Water Day, World Environment Day, Tree Lago Azul State Park - It was created through a decree in 1997, and since then, has Day, and River Day. Among these fish is the surubim-do-iguaçu fish, the largest awaited approval from the National Electricity Agency (ANEEL). The area has 1,749.00 fish native to the Iguaçu River, which is endangered and whose captive breeding hectares and is classified as Full Protection for protecting natural ecosystems technology was developed by Copel itself. Reports indicate that, thanks to the of ecological relevance and scenic beauty. It is located in the reservoir and About the Report Message from the President repopulation actions promoted by Copel, the populations of surubim-do-iguaçu surroundings of the Mourão Hydroelectric Power Plant, in the municipalities of Industry Context are growing again. Campo Mourão and Luiziana. In 2016, a total of 124,758 fish were released, and this number also represents the number of fish produced at the Company’s fish station, achieving the proposed Urban Forest Program goal of releasing 87,600 fish into the reservoir. In 2017, the goal is to produce and release 132,500 fish in the reservoirs of the Copel plants. Ecological Stations G4-EN13 Rio dos Touros Ecological Station - Created in 2001, has a total area of 1,231 hectares, classified as Full Protection. The station conducts scientific research and is located in the Mixed Ombrophylous Forest or Araucaria Forest, on the right bank of the reservoir of the Governador Ney Braga Hydroelectric Power Plant (Salto Segredo), a municipality of Reserva do Iguaçu Reserve, Paraná. Since 2007, Copel has supported municipal governments in planning of afforestation of public roads, contributing to environmental improvement and reduction of energy supply interruptions caused by the incompatibility between trees and electrical systems. The initiative focuses on the production of seedlings in the Company’s forest gardens. With this, in addition to the catering to interested municipalities, compensatory measures are fulfilled. More than 40,000 seedlings have been planted in the afforestation of public roads. After reformulating the program in 2015, with changes in the procedure for About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Ecosystems Reservoirs and Water Quality Infrastructure Capital Tia Chica Ecological Station - With 423.12 hectares, will be classified as Full supplying seedlings, the process of supplying over 6,000 seedlings to 20 municipalities Financial Capital Protection to reinforce nature preservation and scientific research carried out by began. In 2016, a total of 2,545 seedlings for afforestation were delivered to seven Copel. The area declared of Public Utility for condemnation purposes has not yet municipalities in Paraná. been declared a Conservation Unit; however the process is underway. It will serve as environmental compensation for the plant and is installed in the backwaters of the Jordão River Reservoir, in Pinhão (PR). In 2016, due to the election year, the performance of the program was below plan, which was to provide 12,000 seedlings to at least 25 municipalities. Another factor that interfered in the results of the program in 2016 was the closing of Campo Mourão Guarani River State Park - Created in 2000, totaling 2,322 hectares. It is classified Forest Garden, when Copel no longer had the concession of the Campo Mourão as Full Protection and aims at preserving natural ecosystems of ecological Hydroelectric Plant. With this, the production of seedlings began to be carried out only significance and scenic beauty. It began to be studied by Copel in 1997, as a result in the Forest Garden in Cabreúvas - Governador Ney Braga Hydroelectric Plant (Salto of the implementation of the Governor José Richa Hydroelectric Power Plant. It is Segredo), municipality of Reserva do Iguaçu - PR; and in the Perobas Forest Garden- located in the Semideciduous Seasonal Forest and Mixed Ombrophylous Forest Governador José Richa Hydroelectric Power Plant (Salto Caxias), in the municipality or Araucária Forest, on the right bank of the Salto Caxias Hydroelectric Plant of Capitão Leônidas Marques - PR. The goal established in 2016 will remain the same reservoir, in Três Barras do Paraná. for 2017. Training and qualification courses for municipal managers and civil servants Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 60 Natural CapitalCopel | 2016 Sustainability Reportin the state of Paraná were not carried out, and contact with the partner institutions In 2016, a total 72,048 seedlings of native species were planted, reforesting should be resumed in 2017 in order to plan the continuity of the courses. 83.43 hectares. The seedling production for the Riparian Forests and Urban Forests In order to manage pruning of urban trees, a corporate georeferencing project is Program was 104,000 seedlings, and the goal was to produce 213,600 native seedlings underway, in which 229,000 trees have already been planted under the energy for the Riparian Forest Program. There were no available workers during the first seven networks in 69 municipalities. months of 2016 because of the review of the call for the bid to hire gardeners. Due to this Also in 2016, the actions of the Urban Forest Program were announced in a lecture and fact, the target was not reached. roundtable at the Urban Afforestation Forum of the Southern Region of Paraná, held in June in São Mateus do Sul. Reservoirs and Water Quality Copel participates in the Interagency Work Committee to evaluate the Municipal Urban Tree Plans coordinated by the Public Ministry of the State of Paraná - MP-PR, with In the reservoirs and surrounding areas, Copel monitors possible environmental interventions and acts to address irregularities found in terms of illegal construction in the evaluation in 2016 of 69 municipal urban afforestation plans. Copel’s work on the the areas of concession, release of effluents, stability of the slopes, use and occupation About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Climate Change Eco-efficiency Committee was announced at the 20th Brazilian Congress of Urban Afforestation and at the Latin American Congress of the International Society of Arboriculture, held in November 2016 in Belo Horizonte. Riparian Forest Program Copel carries out reforestation and fencing of Permanent Preservation Areas (APPs) in its own and third-party areas, as a way to recover degraded areas and/or to prevent their degradation. In addition to contributing to improving the water quality of the reservoirs, inhibiting the occurrence of erosion processes in the soil and conserving biodiversity. of Permanent Protection Areas, Illegal hunting and fishing, among others. In order to assist in the process of preserving the areas of relevant environmental interest, the Ecosystems Company has an agreement with the Environmental Police Battalion of the State of Paraná, actively participates in the Watershed Committees and the National and State Council of Water Resources, conducting the real-time monitoring of the situation of the rivers where it has reservoirs, and monitors water quality. Copel’s main impact on water resources is the modification of its natural flow conditions due to the construction of hydroelectric plants. For this reason, the company works in managing social and environmental impact of its projects, from the construction up to the operation phase, conducting studies, mitigating impacts and risks, and addressing the applicable environmental legislation. In order to evaluate some of these impacts, on a quarterly basis the Company collects and analyzes water samples from the reservoirs of the plants in order to monitor their quality using 25 physicochemical and biological parameters. Copel also monitors water quality of the river before the beginning of the construction of a new project. Such monitoring includes sediment and agrochemical Reservoirs and Water Quality Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Seedlings used in reforestation are produced in the Company’s forestry nurseries. analysis, involving a much larger number of parameters analyzes. 61 Natural CapitalCopel | 2016 Sustainability ReportThis is Rafael Rodrigues 10 . INFRASTRUCTURE CAPITAL Assets for Energy Generation and Planning // Transmission and Distribution Assets // Commercialization // Telecommunications // Corporate Interest 62 Copel | 2016 Sustainability Report 10. Infrastructure Capital Assets for Energy Generation and Planning G4-DMA-EU6 Copel is currently building 15 wind farms, which will add 737.1 MW of installed capacity and 355.5 MW average physical guarantee to the Company’s generation park, with 20% of this physical guarantee expected to begin commercial operation Copel operates 30 own plants and participates in nine other plants, 21 of in 2017. each are hydroelectric plants, 16 wind farms, and 2 thermoelectric plants, with total installed capacity of 5,674.7 MW, and average Physical Guarantee BRL 3.2 billion had been invested in these generation projects by December About the Report Message from the President Industry Context About Copel Governance and Sustainability of 2,651.4 MW. In 2016, net energy production was 25,843 GWh. G4-EU1, G4-EU2 31, 2016, of which BRL 2.2 billion was until December 31, 2015. Of the total, Human Capital BRL 2.4 million refers to additional fixed assets in own plants and in consortium, Intellectual Capital As part of the strategic and sustainability guidelines established for the generation business, Copel works toward expanding its share of renewable alternative sources of energy in the energy matrix in a profitable and and the remainder refers to capital contributions in the companies in which the Company has interest. Evolution of the generation Park with the gradual beginning of operations of the plants under construction can be represented as sustainable manner. G4-EU2 follows: G4-EU2 Generation park by source in 2016 and installed capacity Generation Park Physical Guarantee by Source Generation Park projection for 2019 Physical Guarantee by Source 82% Hydroelectric Plants 80% Hydroelectric Plants Evolution of Generation Park 13% 14% 14% 14% 8% Social and Relationship Capital Natural Capital Infrastructure Capital Assets for Energy Generation and Planning Transmission and Distribution Assets Commercialization Telecommunications Corporate Interest Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 11% Thermoelectric Plants 7% Wind farms 9% Wind farms 2016 2017 2018 2019 2020 2021 THERMOELECTRIC PLANTS WIND FARMS HYDROELECTRIC PLANTS 11% Thermoelectric Plants 63 Infrastructure CapitalCopel | 2016 Sustainability ReportPower Plant Availability G4-EU30 Currently, the Company focuses its efforts on building seven projects, which will add a 2,878 kilometers and 4,150 MVA of transformation capacity to the set of transmission In the generation activities, the indicator on average availability of the plants is lines and substations. monitored. The indicator measures the number of hours of interrupted generation. Distribution Average availability factor 2014 2015 2016 Copel’s distribution lines total 195,458.5 kilometers, and in all serve nearly 4.5 million consumers, in 394 cities in the state of Paraná and one municipality in Santa Catarina. Distribution Lines – Voltage level 2014 2015 2016 Total extension (km) 189,925.4 193,527.1 195,458.5 Total number of hours of planned interruption 71,967.37 42,265 21,916 Total number of hours of forced outage (unplanned) 36,226.20 36,048 18,672 Own hydroelectric plants 0.94 0.90 0.92 Hydroelectric plants with Copel’s shareholding interest 0.95 0.96 0.96 Thermoelectric plants 0.64 0.78 0.70 Thermoelectric plants with Copel’s shareholding interest Generation by Renewable Sources G4-13 0.93 0.89 0.89 In 2016, the Cutia Complex received investment of over BRL 700 million. The complex will have 13 parks with 312.9 MW generated by 149 wind turbines, and will be built in two stages, with the first seven parks expected to start operating by September 2017, with a capacity of 180.6 MW, from 86 wind turbines, and by 2018 another six wind farms will be added, with 132.3 MW from 63 wind turbines. Transmission and Distribution Assets Extension of Transmission and Distribution Lines G4-EU4 Transmission 13.8 kV 34.5 kV 69 kV 138 kV 230 kV 101,688.7 103,488.2 104,556.0 82,232.5 83,347.4 84,071.3 5,153.5 5,866.6 5,970.3 123.5 129.6 165.5 727.2 695.3 695.4 Assets for Energy Generation and Planning Number of substations 361 363 364 In 2016, new substations and high voltage lines were connected to reinforce the electrical distribution system, improving quality and increasing the availability of energy to consumers. In all, in 2016 these projects added approximately 185 MVA to the distribution system and 84 km of new 138 kV transmission lines. Wire Market (TUSD) - In 2016 the load wire, which takes into account all consumers that accessed the distribution network, showed a reduction of 2.0%, compared About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Transmission and Distribution Assets Commercialization Telecommunications Corporate Interest Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact The Company wholly owns and participates in the concession for transmission with 2015. The industrial wire market decreased by 1.4% in the year, and the most and operation corresponding to 5,552 km of transmission lines and 44 significant branches of the industrial class that reported a drop in 2016 were those substations of the basic network with transformation potential of approximately manufacturing non-metallic mineral products, wood products, rubber products, 14,602 MVA. 64 and plastic material. Infrastructure CapitalCopel | 2016 Sustainability ReportPower Wire Market 2016 Dec/15 % 2016 2015 % energy consumption and number of consumers: No. Of Consumers/contracts Energy Distributed (GWh) The charts show the participation of the captive market by class, compared to Captive Market 4,478,767 4,418,062 1.4 22,328 24,043 (7.1) Utilities and Licensees 4 4 - 614 699 (12.2) Free Consumers(1) 620 129 380.6 5,273 4,045 30.4 Wire Utilities Wire Market 2 2 - 52 56 (7.1) 4,479,393 4,418,197 28,267 28,483 (2.0) (1) Total number of free consumers served by Copel Geração e Transmissão and by other suppliers within the concession area of Copel Distribuição. 10.7% Other 9.8% Rural Captive market 2016 By Energy consumption Captive market 2016 By number of Consumers 31% Residential 1.8% Industrial 8.5% Commercial 8% Rural 1.3% Other Captive market - From January to December, captive market consumption was 22,328 GWh, with a negative variation of 7.1% compared with the same 22.7% Commercial period in 2015. The drop in captive consumption is mainly due to the economic 25.8% Industrial 80.3% Residential recession that began in the second quarter of 2014 and has worsened, as well Efficiency in Supply: Quality Management and Energy Loss as the migration of 491 consumers to the free market in 2016, which represented a consumption of 1,296 GWh in the year. Quality and supply, measured through performance indicator of distributors in terms of continuity of services provided, known as DEC (Equivalent Duration of The number of captive consumers billed by Copel Distribuição in December Interruption by Consumer Unit) and FEC (Equivalent Frequency of Interruption by 2016 was 1.4% higher than in December of the previous year, totaling 4,478,767 Consumer Unit) showed improvement in 2016 compared with the previous year. consumers. G4-EU2 Energy Sold (GWh) Dec/2016 Dec/2015 Residential Industrial Commercial Rural Other Total 65 6,932 5,753 5,059 2,179 2,405 6,957 6,929 5,530 2,256 2,371 22,328 24,043 The improvement of the DEC was 20.8% and the FEC, 13.2%, as a result of changes in process, increased maintenance and preventive inspections, and performance and expansion works. G4-EU28, G4-EU29 Supply quality indicators 14.01% 13.67% 10.82% 8.92% 8.33% 7.23% 2014 2015 2016 DEC (hours)* FEC (interruptions)* *Measured in hours and hundreds of hours % (0.4) (17.0) (8.5) (3.4) 1.4 (7.1) About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Assets for Energy Generation and Planning Transmission and Distribution Assets Commercialization Telecommunications Corporate Interest Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Infrastructure CapitalCopel | 2016 Sustainability ReportLoss of energy is inherent to the nature of electricity transformation, transmission, abnormal situations occur, detecting problems and irregular procedures in metering and distribution processes. In 2016, overall losses - technical, non-technical and and reducing commercial losses for Copel. of basic network - represented 9.6% of the energy injected into the distribution system, a percentage that remained stable compared with 2015. G4-EU12 Types of Losses Transmission Overall losses (%) Technical losses (%) Overall losses (%) Distribution Technical losses (%) Nontechnical losses (%) 2014 2015 2016 1.7 1.7 9.8 6.2 1.9 1.8 1.7 9.6 6.1 1.6 2.0 1.9 9.6 6.1 2.0 Paraná Smart Grid Project - a government project in the State of Paraná, inaugurated in 2014, which gathers Copel’s efforts with that of the companies Lactec, Tecpar, Sanepar and Compagás, and aims to improve the telemetry system. It was designed to improve the quality of services and the Company’s ability to serve in the electrical and telecommunications system. As part of the project, telemetry points were installed in the urban and rural areas of Human Capital Greater Curitiba in order to test the technologies. There were also shared telemetry Intellectual Capital facilities (joint measurement of water, energy, and gas) for consumers in the district of Bigorrilho, energy micro-generation with the installation of a wind turbine and set of solar panels added to the power grid of the Copel Distribuição km3 hub, for Technical losses, on the same basis, remained at the level of the previous year, and non- electric cars and bicycles, and reconfiguration of distribution networks in feeders of technical losses increased by approximately 0.4 p.p in 2016. The transmission operation, on three substations. Through the project, reading is performed every hour allowing for the other hand, can register losses in the interconnected system, which are proportionately detection of problems, power outages and reading without physical displacement. divided between generators and distributors, and determined by the Electric Power Marketing Chamber (Câmara de Comercialização de Energia Elétrica - CCEE). Compared with previous years, losses in the basic network have changed. These totals refer to 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 reflecting its share of the market. A change in this loss profile influences the total In 2016, a total of BRL 3.5 million was invested in implementing new equipment in distribution networks, in reconfiguration systems in the city of Guaíra (PR), in expanding monitoring of customers that access distributed generation, in installing 1,000 points of energy telemetering in the municipalities of Bocaiúva do Sul and Campina Grande do Sul, in order to support the installation and monitoring of the electric charging station for electric buses in Curitiba. amount for overall losses. Advances in Operational Excellence Mais Clic Rural - In 2016, investments were made in the amount of BRL 43 million in new technologies in automation and communication systems, 34/13 kV substations, Telemetering Group A - Group A and B billing data is automatically obtained, and work to improve and reinforce the network. The initiative focuses on the four without the need to send someone to read the meter. Until 12/31/2016, there were sectors most sensitive to the quality of energy supply: pig farmers, tobacco farmers, 13,461 telemetric points in Hemera, corresponding to 87.9% of the consumers in group aviaries, and dairy farmers in the State of Paraná. Altogether, 70,000 rural producers A, group B with microgeneration and free (14,534). This type of distance measurement in Paraná and, indirectly, around 2.4 million rural and urban consumers may benefit. enables real time data collection (on time), optimizing the process for more precise Among the main advances made in the period is the entry into operation, in four collection, handling, and availability of data, including data for customers, via the locations, of the network automatic reconfiguration system. The technology enables Internet. The system is also capable of monitoring use of energy, issuing alarms when the isolation of possible defects and the automatic restoration of supply in the other 66 About the Report Message from the President Industry Context About Copel Governance and Sustainability Social and Relationship Capital Natural Capital Infrastructure Capital Assets for Energy Generation and Planning Transmission and Distribution Assets Commercialization Telecommunications Corporate Interest Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Infrastructure CapitalCopel | 2016 Sustainability Reportsections of the network. By July 2018, the goal is to take the innovation to the other in demand, is fundamental to reducing the rate of growth of generation, and 133 rural circuits in the state. postpone the need to build large plants and transmission lines that, together In addition to a series of improvements to the distribution system in rural areas, the with their benefits, are associated with large environmental impacts. amount invested allowed for the purchase of 400 automatic branch circuit-breaker systems, 130 automatic load reconfiguration systems, and 1,000 single-phase Commercialization reclosers. Equipped with technology still new in this country, the equipment enables Copel Comercialização, created in January 2016, established itself in the market under automatic reclosing, replacing manually operated circuit reclosers installed at the poles. It is expected that by the end of 2017, they will all be installed - avoiding about 12,000 deployments of crews per each year, to locate the defects and manually re- connect the reclosers. In the pilot project carried out in Salto do Lontra where a recloser station was implemented and investments in network automation systems were made, the average duration of interruptions (DEC) in the municipality was reduced by 70%. In the other places where the investments were made, there were 30% to 60% improvements in the quality indicators. In 2016, Copel’s rural DEC contributes 5 hours to Copel’s total DEC, with a reduction of approximately 18% in Copel’s total rural DEC. Distributed Generation - is the generic name of the type of energy generation that differs from the centralized generation, usually of greater size and greater environmental impact, because it occurs next to or near consumers. Copel Distribuição updates technical standards and adopts best engineering and safety practices to connect customers that access distributed generation (57 independent producers or self-producers, with 600 MW of generation in 45 municipalities). the brand Copel Energia, working with a free market specialization of energy purchase and sale, motivated by the accelerated movement of migration of large consumers from the regulated market to the Free Marketing Environment - ACL. In addition to operating in the energy purchase and sale segment, it offers management services in the free energy market for its customers. The Company showed rapid growth, closing the year with 30 megawatts of average energy sold. For 2017, we expect to double the volume traded, with over 20 negotiations in progress. Telecommunications Copel Telecomunicações provides telecommunications and communications services in Commercialization general, in Multimedia Communication Service (SCM), developing studies and projects focused on meeting the needs of the Company and the market in general. The operation of such services is for an indefinite term, without exclusivity, at national level. In 2016, the fiber optic network totaled 31,117 km of fiber optic cables, up 10.7% compared with 2015, of which 10,140 km are intercity and 20,977 km are urban. This network provides corporate services in 399 municipalities in Paraná, two in Santa Catarina with Telecommunications Corporate Interest Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact broadband services in 64 municipalities in Paraná. About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Assets for Energy Generation and Planning Transmission and Distribution Assets For micro and minigerators, including operating units and units in documentary Corporate Interest processing, there are 405 units, in general, of solar generations (395 units). They total 3.34 MW of installed power. Copel has corporate interest and association with companies, consortiums and other institutions, which operate in several sectors other than energy. More information in The addition of distributed generation, although insufficient to meet the growth NE 1.1, NE 2, NE 18, and NE 19.7 of the Financial Statements. 67 Infrastructure CapitalCopel | 2016 Sustainability ReportNet Operating Capital // Operanting Costs and Expenses // EBITDA // Financial Result // Value Added // Indebtedness // Net Profit Consumer Default // Investment Program // Relationship with Shareholders and Investors 68 Copel | 2016 Sustainability Report 11 . FINANCIAL CAPITAL 11. Financial Capital G4-EC1 Net Operating Revenue In 2016, Net Operating Revenue dropped BRL 1,844.1 million, representing a 12.3% decrease compared with 2015. Supply of Electricity Procurement of Electricity Availability of Electrical Network Revenue from Construction 5,231.5 5,746.9 2,676.1 3,707.4 3,976.9 2,388.5 1,279.6 1,196.3 2016 2015 ■ Increase of BRL 1,588.1 million in Revenue from Electric Network Availability, mainly due to the recognition of the effects of remuneration for the remeasurement of cash flow as a result of Ordinance MME No. 120, regarding RBSE assets; result of the 4th Tariff Review Cycle, occurred in June 2016, which increased Portion B by 22%; partially offset by the drop in power consumption in the wire market; and by the average adjustment of -12.87% in the usage tariff. ■ Increase of BRL 83.3 million in Revenue from Construction. The Company accounts for revenues related to the construction or improvement of the infrastructure used to provide electricity or gas distribution and transmission services, which totaled BRL 1,279.6 million in 2016, and BRL 1,196.3 million in 2015. The respective expenses are recognized in the income statement for the period, as cost of construction, when incurred. This variation is mainly due to: Telecommunications ■ Decrease of BRL 515.4 million in Revenue from the Supply Electricity, mainly due to the 7.1% retraction in the captive market, basically as a result of the migration of captive consumers to the free market and of the country’s economic situation; and the average reduction of 12.87% in the rate applied beginning Distribution of Piped Gas June 2016. ■ Reduction of BRL 1,031.4 million in Supply of Electricity, mainly due to lower PLD (Settlement Price for Differences) value in the period; and lower revenues in CCEE, due to the non-activation of the Gas-Fired Thermoelectric Plant (UEG) Araucária. 69 Results of Financial Assets and Liabilities in the Sector - 1,079.7 261.6 209.9 471.9 526.4 858.2 Other Operating Revenue 284.1 312.2 2015 2016 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Net Operating Capital Operating Costs and Expenses EBITDA Financial Results Value Added Indebtedness Net Profit Consumer Default Investment Program Relationship with Shareholders and Investors Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Financial CapitalCopel | 2016 Sustainability Report■ An increase of BRL 51.7 million in Revenue from Telecommunications, mainly due to the increase in the number of customers, especially in the retail market, ■ Decrease of BRL 1,347.3 million in Electricity Purchased for Resale, mainly due to the lower LDP in the period and the impact of the GSF - Generation Scaling with the Copel Fibra product. Factor (risk of water shortage). About the Report Message from the President ■ Decrease of BRL 54.5 million in Revenue from Distribution of Piped Gas, due to the non-activation of UEG Araucária and the market retraction compared with the previous year. ■ Negative result of BRL 1,079.7 in the Result of the financial assets and liabilities in the sector in 2016, while in 2015 the result was positive, at BRL 858.2 million. ■ A reduction of BRL 28.0 million in Other Operating Revenues, reflecting the lower variation in the fair value of the indemnifying assets of the concession in the amount of approximately BRL 85.0 million, offset by the increase in revenues from services rendered, revenues from leases, and renting equipment and structures, and fines applied to customers who migrated from the captive market to the free market. Operating Costs and Expenses Unmanageables 6,032.9 4,685.6 2015 2016 ■ Reduction of BRL 850.7 million in Natural gas and gas operation inputs reflecting Industry Context the non-activation of UEG Araucária in 2016. ■ Decrease of BRL 53.5 million in Charges for the Use of the Electricity Grid mainly About Copel Governance and Sustainability due to lower costs of Charges on System Services - ESS, offset by the increase of the Human Capital Charge on Reserve Energy - EER. Manageables 1,304,4 1,168.9 1,280.7 1,251.0 2015 2016 768.7 708.3 676.5 210.8 People and administrators Construction cost Estimated losses, provisions and write-back Depreciation and amortization 1,176.1 325.4 866.2 919.8 33.4 199.3 ■ Increase of BRL 135.6 million in Personnel and Directors, mainly reflecting the salary adjustment of 9.9% in October 2015 and 9.15% in October 2016, according Electricity purchased for reselling Natural gas and inputs for the gas operation Charges for the use of the electrical network Raw material and inputs for the production of electricity 70 to the collective bargaining agreement, and the variation of BRL 38.8 million of provision for compensation for voluntary resignations and pensions. Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Net Operating Capital Operating Costs and Expenses EBITDA Financial Results Value Added Indebtedness Net Profit Consumer Default Investment Program Relationship with Shareholders and Investors Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Financial CapitalCopel | 2016 Sustainability Report■ Increase in Construction Cost, from BRL 1,251.0 million in 2015 to BRL 1,280.7 million in 2016. ■ Increase of BRL 557.9 million in Estimated Losses, Provisions and Reversals mainly due to: provision for estimated losses for doubtful accounts, in the amount of BRL 46.9 million; reversal for litigation in the amount of BRL 69.9 million - considering the reversal of BRL 193.4 million in the Cofins proceedings; and estimated losses for impairment of assets in the amount of BRL 647.6 million. 550.5 519.5 Manageables 259.8 254.3 2015 2016 426.1 414.9 2,802.9 2,752.4 2,357.0 Ebitda (BRL millions) 2014 2015 2016 Financial Result The financial result decreased BRL 237.1 million due to a 16.5% increase in financial revenues, mainly due to the late payment charges of energy bills and higher income from financial investments, and a 33.1% increase in financial expenses mainly due to higher monetary value, exchange rate, and debt charges. 81.5 76.7 Value Added Third-party Services Social security plans And care Material Other operating costs and expenses ■ Increase of BRL 31.0 million in third-party services, mainly due to the readjustment of contracts for inflation. ■ Increase of BRL 5.4 million in Social Security and assistance plans resulting from the effects of the actuarial evaluation, calculated by the contracted actuary. ■ Reduction of BRL 11.3 million in other costs and operating expenses mainly due to the change in the method of evaluating Copel’s investment in Sanepar, which was evaluated at fair value, while in 2015 it was accounted for by the equity method. EBITDA In the 2016 period, Copel recorded BRL 12,746.6 million in Total Value Added. This total is 11.8% lower than the previous year. The variation is mainly due to the decrease in sector charges in 2016. The full statement can be seen on Financial Statements. 2016 2.1% Shareholders 2015 2.7% Shareholders 5.3% Retained 11.6% Third Parties 11.7% Personnel 6% Retained 7.9% Third Parties 9.3% Personnel The Company’s EBITDA BRL 50.5 million compared with 2015, representing a reduction of 1.8%. in 2016 was BRL 2,752.4 million, a decrease of 69.3% Government 74.1% Government 71 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Net Operating Capital Operating Costs and Expenses EBITDA Financial Results Value Added Indebtedness Net Profit Consumer Default Investment Program Relationship with Shareholders and Investors Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Financial CapitalCopel | 2016 Sustainability ReportIndebtedness In December 2016, consumer default for Copel Distribuição was BRL 267.3 million, equivalent to 1.61% of its revenues, whereas in 2015, default reached The Company finances liquidity and capital need with resources from operations BRL 272.8 million, or 1.81% of revenues. and external financing, aiming to expand and modernize businesses associated with generation, transmission, marketing, and distribution of electricity, as well as telecommunications. Although the amount of estimated losses for doubtful accounts (PECLD ) in 2016 is significant, actions to combat delinquency have provided significant gains in short- term delinquency indicators, presented by the Abradee5 and Corporate6 default It is important to point out that the Company seeks to invest in corporate rates, obtaining a reduction in delinquency for both compared with 2015. interest, to use credit lines available in the market, that make sense in Copel’s capital structure, regarding financial leverage concerning the return from According to the Abradee criterion, delinquency reduced by 14.5% and according to Corporate, by 4.7%. The reduced delinquency indicators is due to the Company’s projects. We point out that our perspectives for financing, as well as cash action plan to combat the PECLD, with measures that have resulted in reduced availability, will be sufficient to meet the needs of the investment plan for the default indicators. fiscal period. Payments in the year totaled BRL 1,918.4 million, of which BRL 1,012.2 million was principal and BRL 906.1 million from charges. Net profit In 2016, net profit assigned to shareholders of the holding company was BRL 958.7 million, 19.6% less than the amount obtained in the previous period, Index (%) Abradee Default Company Default 2016 2015 Variation 2.55 -14.51 2.18 1.61 1.81 -11.05 Financial Results of BRL 1.192,7 million. Consumer Default Investment Program The investment program for 2016 was approved on 12/09/2015 by the 151st Ordinary Meeting of the Board of Directors of Copel Holding. The investments made and Copel has been calculating, since 2003, the default rate for the product “energy projected for 2016 are as follows: supply,” using a methodology that considers consumers to be in default in case of a debt 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 the recognition of loss of past due debits is excluded. 72 5 Delinquency Index Abradee criterion: i = ∑ Default (1 to 90 days) / Invoicing 12 months 6 Delinquency Index Corporate criterion: i = ∑ Energy default (16 to 360 days) / Invoicing 12 months About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Net Operating Capital Operating Costs and Expenses EBITDA Value Added Indebtedness Net Profit Consumer Default Investment Program Relationship with Shareholders and Investors Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Financial CapitalCopel | 2016 Sustainability ReportCompanies (BRL million) Realized 2016 Realized 2015 Variation % 2016-2014 Planned 2017 Markets in which Copel’s shares are traded Generation and Transmission 1,879.2 1,373.3 36.8 570.3 Copel opened its capital stock on the market in April 1994, on the São Paulo Stock Exchange (BM&FBOVESPA) and became the first company in the About the Report Message from the President Distribution 777.1 656.4 18.4 629.6 Brazilian electricity sector listed on the New York Stock Exchange (NYSE) in Industry Context Telecommunications 193.8 105.4 83.9 164.3 Economic Community with its entry into Latibex - the Latin American arm Wind Farm Projects (1) 722.2 229.3 245.2 638.6 of the Madrid Stock Exchange. On May 7, 2008, the shares were traded at Others(2) Total 3.1 20.4 - 32.1 Corporate Governance Level 1 of the São Paulo Stock Exchange. Since 2005, Copel’s shares have been included in the ISE - Corporate Sustainability Index 3,575.4 2,364.7 51.2 2,034.9 of BM&FBOVESPA. In 2016, for the second consecutive year, it became part Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital July 1997. Since June 2002, the company has also been present in the European About Copel (1) Includes Brisa Potiguar, Cutia Empreendimentos Eólicos, and São Bento Energia. (2) Includes Holding, Copel Renováveis, Copel Comercialização, among others. Relationship with shareholders and investors At the end of 2016, a total of 25,742 shareholders participated in Copel’s capital stock, corresponding to BRL 7,910.0 million, represented by 273,655,000 shares, with no par value. Distribution of dividends and interest on shareholders’ equity In accordance with Law 9,249/1995, Copel adopts, as a policy, the distribution of interest on capital in replacement of dividends, in whole or in part. Pursuant to the by-laws, the amount of dividends distributed is at least 25% of adjusted net income, in accordance with article 202 and its paragraphs of Law 6,404/1976. Tag Along Copel guarantees tag along rights for its minority common shares, assuring its holders the minimum price of 80% of the amount paid for shares in the controlling block. 73 of the sustainability index of Morgan Stanley Capital International - MSCI, a Natural Capital global leader in the composition of financial indexes, and was also selected to be part of the portfolio of the FTSE4Good Emerging Index, an index linked to FTSE 100, of the London Stock Exchange. The seals of MSCI ESG, FTSE4Good and ISE are awarded to companies that show excellent performance in the social, environmental and corporate governance areas. Infrastructure Capital Financial Capital Net Operating Capital Operating Costs and Expenses EBITDA Financial Results Value Added Indebtedness Net Profit Consumer Default Investment Program Relationship with Shareholders and Investors Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Financial CapitalCopel | 2016 Sustainability Report74 Copel | 2016 Sustainability Report 12 . SOCIAL AUDIT SOCIAL AUDIT December 31, 2016 and 2015 (Amounts expressed in BRL thousands, except when stated otherwise) G4-9 1 - CALCULATION BASE EN 32 Net revenue (NR) 2 - INTERNAL SOCIAL INDICATORS EN 33.2 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 EN 33.2 Profit sharing Employee compensation and severance pay (1) ther benefits TOTAL 3 - EXTERNAL SOCIAL INDICATORS Culture Health and sanitation Sports Others Research & Development Energy Efficiency Program Morar Bem Program Morar Bem Program Others Total contributions to society Taxes (excluding payroll taxes) 75 2016 13,101,753 % Over NR 0.2 7.0 1.0 2.3 0.6 1.6 0.1 0.5 0.4 0.1 13.7 19,194 842,948 119,410 271,225 68,091 205,291 10,600 78,462 6,905 16,119 1,638,245 2015 14,945,844 % Over NR 0.1 5.6 0.8 1.8 0.5 1.4 0.1 0.5 - 0.1 11.0 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact % Over NR % Over NR 0.1 - - 0.5 0.3 0.1 - - - 0.6 65.6 7,568 3,121 1,801 99,710 37,840 38,666 12,769 3,833 6,602 112,200 10,495,595 0.1 - - 0.7 0.3 0.3 0.1 - 0.8 70.2 20,885 920,726 131,629 307,057 76,583 205,458 10,705 64,814 47,005 16,336 1,801,198 11,672 637 712 62,318 38,005 11,459 5,142 2,447 5,265 75,339 8,591,151 Social AuditCopel | 2016 Sustainability Report                                                                                                         Total 4 - ENVIRONMENTAL INDICATORS Investments related to the company’s operations Investments in programs and/or external projects Total (2) Number of environmental sanctions Amount of environmental sanctions (BRL thousand) Environmental Goals Regarding the establishment of annual goals to minimize waste, overall consumption in production/operation, and increase efficiency in the use of natural resources, the Company: EN - Explanatory Note 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 Employee Age Group From 18 to 30 (exclusive) From 30 to 45 (exclusive) From 45 to 60 (exclusive) 60 or older 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 76 8,666,490 66.1 10,607,795 71.0 % Over NR % Over NR 299,893 703 300,597 1 19 2016  ( ) does not have goals ( ) fulfills 0 to 50% ( ) fulfills 51% to 75% (x) fulfills 76% to 100% Men 3,098 3,500 61 Women 1,320 629 8 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 2.3 - 2.3 2016 8,716 97 Total 4,418 4,129 169 878 4,290 3,432 116 1,957 5.7 20.1 970 492,277 856 493,133 1 132 Goals 2017 ( ) does not have goals ( ) fulfills 0 to 50% ( ) fulfills 51% to 75% (x) fulfills 76% to 100% Men 2,993 3,673 181 3.3 - 3.3 2015 8,813 234 Women Total 1,289 4,282 670 7 4,343 188 1,100 4,257 3,371 85 1,966 5.4 19.9 981 Social AuditCopel | 2016 Sustainability Report                                                                                                                                                                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) (3) (4) (4) 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 Ratio of highest to lowest remuneration in the company (5) Total number of work-related accidents (includes accidents involving contractors) Total number of consumer complaints and grievances: in the company (6) at second level in court % of complaints addressed or solved in the company (6) at second level in court 3.6 6.3 223 14,711 5,670 227 292 4,476 1,128 2016 19 132 43,453 3,738 3,644 99.0% 92.4% 15.0% About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 3.3 6.0 207 15,580 6,457 252 333 4,795 1,011 2015 19 125 43,360 998 2,649 99.3% 94.5% 17.1% The company’s social and environmental projects were defined by Board and management Board and management Workplace safety and sanitary standards were defined by All + Cipa All + Cipa Regarding freedom of association, right to collective bargaining and internal worker representation, the company Encourages and follows ILO Encourages and follows ILO Private pension plan covers Profit sharing program covers All All All All In selecting suppliers, the same ethical, social responsibility and environmental standards adopted by the company are required will be required  2016 GOALS 2017 77 Social AuditCopel | 2016 Sustainability Report                                                                                                                                      Regarding employee participation in volunteer work, the company organizes and encourages will organize and encourage 7- GENERATION AND DISTRIBUTION OF WEALTH Total value added for distribution 2016 12,746,577   2015 14,456,447 Distribution of Value Added (DVA) Third parties Personnel Government Shareholders Retained 8 - OTHER INFORMATION 11.6% 11.7% 69.3% 2.1% 5.3% 7.9% 9.3% 74.1% 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, also addressing information requested in NBCT 15 aiming to ensure transparency of its information. • 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, 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 Comercialização 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. The amounts of the sanctions are proportional to Copel’s interest in the projects. 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) 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. (4) Not part of the staff. (5) Calculated through the methodology used in the GRI Sustainability Report G4 - indicator LA6. (6) Includes the complaints in PROCON, Ombudsman’s Office, Consumer.gov, ANEEL and ANATEL deemed founded. About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 78 Social AuditCopel | 2016 Sustainability Report                                     This is Priscilla Lima da Silva This is Everton Farias Dias 79 Copel | 2016 Sustainability Report 13. GRI CONTENT INDEX GRI Content Index // Audit Report 13. GRI 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. Key: Indicators with external assurance Indicator Strategy and Analysis G4-1 Message from the president G4-2 Description of key impacts, risks, and opportunities 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 operates G4-7 Nature of ownership and legal form G4-8 Markets served G4-9 Scale of the organization G4-10 Employee profile Details or reference page 7, 9 7, 9, 15, 16, 21 12 12 12 12 12 12 12, 30, 75 30 Male Female Total By Career Male Female Total By Category Board Member Director *Employee *Manager Intern *Direct employees 41 24 2 – 43 24 6,204 1,792 7,996 427 114 108 163 535 277 Total of Employees Male 6,631 Female 1,900 Total 8,531 G4-11 Percentage of employees covered by collective bargaining agreements Operational Employee Manager 122 1 Technical Prof. High Employee 1,876 School Degree Manager 33 - - 133 1 122 1 2,009 34 Prof. High School Degree Prof. University Degree Employee 3,396 1,320 4,716 Manager Employee Manager 90 810 303 38 339 69 128 1,149 372 G4-12 Description of the organization’s supply chain 44 80 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact Global Compact All By Region South Southeast Midwest Northeast North Workload/day 4 workdays 6 workdays 8 workdays Male 6,554 14 55 8 – Male 36 186 Female 1,894 – 5 1 – Female 31 331 6 Male Total 8,448 14 60 9 – Total 67 517 6,409 1,538 7,947 23 The Company has a relationship with 19 unions representing the various classes of workers and, throughout the year, holds meetings to discuss matters of mutual interest. On the base date (October), this relationship intensifies when unions and Copel discuss the demands to reach the Collective Labor Agreement (ACT). Compliance with the clauses of the ACTs mitigates possible problems involving unions and employees. In addition, dismissals for just cause are preceded by a summary administrative proceeding, regulated by an internal administrative norm, which guarantees the employee the right to defense. 1,2,3 All GRI Content IndexCopel | 2016 Sustainability ReportG4-13 Significant changes regarding size, structure, ownership, and supply chain G4-14 Description of how the organization applies the precautionary 64 21 G4-15 Externally developed social charters, principles, or other initiatives 4, 26, 52, 95 G4-16 Memberships of associations and organizations 26, 95 Identified Material Aspects and Boundaries G4-17: All entities included in the organization’s consolidated financial statements 4, 14 G4-18 Process for defining the report content G4-19 Material aspects identified in the process for defining report content 5 6 G4-20 Aspect boundary, within the organization, of each material aspect All relevant and strategic aspects are material within Copel and for all of its businesses. G4-21 Aspect boundary, outside the organization, of each material aspect Capitals used in our businesses Strategic and relevant aspects for the success of our business in the medium and long term Relevant Indicators Human capital Governance, Ethics and Compliance Human Capital Management Occupational Health and Safety Intellectual Capital Culture of Innovation Risk and Crisis Management Social and Relationship Capital Customer and Consumer Relationship Supplier Management Relationship with the Community Climate Change Natural Capital Operational Excellence and Eco-efficiency Ecosystems Infrastructure Capital Energy Planning and New Assets Economic and Financial Performance Financial Capital Regulatory Affairs Management Access to Capital About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact All All Relevance to stakeholders All Copel stakeholders Employees and contractors Employees, contractors and regulatory agencies All Copel stakeholders All Copel stakeholders Clients and consumers All Copel stakeholders All Copel stakeholders All Copel stakeholders All Copel stakeholders All Copel stakeholders All Copel stakeholders All Copel stakeholders, more specifically governments and partners Regulatory agencies, customers and consumers Customers and consumers G4-22 Restatements of information provided in previous reports 4 Restatements in 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 4, 6 81 GRI Content IndexCopel | 2016 Sustainability Report 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 4, 6 G4-26 Approach to stakeholder engagement 4, 6 G4-27 Key topics and concerns that have been raised during the engagement, by stakeholder group 5 Concerns raised during previous cycle engagements are listed on page 3 of the 2015 Report, available online. 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 4 4 4 6 G4-32 ‘In accordance’ option and location of the GRI Content Index 4, 80 a 91 G4-33 Policy and current practices with regard to seeking external assurance for the report 4, 92 Governance G4-34 Governance structure of the organization and its composition G4-35 Process for delegating authority from the highest governance body for economic, environmental, and social topics G4-36 Process to appointed an executive-level position or positions with responsibility for economic, environmental and social topics, and whether such post holders report directly to the highest governance body 19 18, 25 18, 25 G4-37 Processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics 5 The Board of Directors consults stakeholders directly and indirectly through various representatives, focusing on economic, environmental, and social issues, and delegating consultations to the Company’s departments and receiving consolidated feedback. Copel’s Business Development Department is responsible for analyzing business opportunities, as well as social and environmental risk assessment in the phase before project implementation. The results of the assessments are presented for approval at meetings with the Executive Board and the Board of Directors. G4-38 Composition of the highest governance body and its committees G4-39 Chair of the highest governance body 19, 20 20 G4-40 Selection criteria and nomination processes for the highest governance body and its committees 20, 21 More information is available online. G4-41 Processes to ensure conflicts of interest are avoided and managed Those elected to the Company’s Board of Directors sign a statement of independence, which contains a clause on issues concerning conflict of interest. G4-42 Roles of the highest governance body and senior executives in the development of policies and goals to manage impacts 18, 19 The Board of Directors directs, approves and revises the annual plan for business processes and management of the Company. 82 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact All 10 All All 10 All GRI Content IndexCopel | 2016 Sustainability ReportG4-43 Measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental and social topics 22 In 2016, Copel Board members participated in the Training Program for Board Members, provided by Fundação Dom Cabral, where the current trends of Corporate Governance, importance of stakeholder engagement, understanding of the main financial statements and their economic and financial analysis, legal risks, and the correlation between transparency and accountability and the Company’s reputation were discussed, with an analysis of various case studies. Also discussed was the modern concept of corporate responsibility that includes continuity of the organizations and the creation of job opportunities, training of the workforce, stimulation of scientific development, guarantee of human rights, freedom of association and fair trade, among other forms of creating wealth for society. G4-44 Process for delegating authority from the highest governance body for economic, environmental, and social topics 22 G4-45 Responsibility for the implementation of economic, environmental and social policies 18, 21, 25 G4-46 Role of governance in reviewing the effectiveness of the organization’s risk management processes for economic, environmental and social aspects G4-47 Frequency of the highest governance body’s review of impacts, risks, and opportunities 21 20 G4-48 Formal approval of the organization’s sustainability report On 03/28/2017, the Board of Directors (CAD) approved the presentation of relevant and strategic aspects, described in the Report and defined regarding business risks and impacts for society, the strategic communication materials of the Report for various stakeholders, publicly assumed sustainability commitments, as well as reported sustainability performance values and expected results. G4-49 Process used for communicating critical concerns to the highest governance body 21 G4-50 Nature and total number of critical concerns that were communicated to the highest governance body and solutions adopted G4-51 Report the remuneration policies for the highest governance body G4-52 Process for determining remuneration 21 21 22 G4-53 Participation of stakeholders concerning remuneration 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 ratio of the total remuneration of the highest paid individual to the total annual average remuneration of all employees is 7.33. Remuneration data includes non-variable base remuneration and does not include benefits and variable pay (e.g. profit sharing and bonuses). G4-55 Ratio between the increase in the highest salary and the average increase of the organization 31 The increase in total annual remuneration of the highest-paid individual amounts to 0.86 times the average increase of the total annual remuneration of other employees. Percentage increase in the total annual average remuneration of all employees of the organization is 10.62%. Percentage increase in remuneration of the highest paid individual of the organization is 9.15%. Remuneration data includes non- variable base remuneration and does not include benefits and variable pay (e.g. profit sharing and bonuses). Ethics and Integrity G4-56 Organization’s values, principles, standards and norms of behavior 13, 23, 24 G4-57 Internal and external mechanisms to provide guidance on ethical and lawful behavior G4-58 Internal and external mechanisms adopted by the organization to communicate concerns about behaviors that are unethical or incompatible with legislation 24 24 83 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact All All 10 All 10 10 GRI Content IndexCopel | 2016 Sustainability ReportIndicator Economic Aspect Economic Performance Details or reference page G4-EC1 Direct economic value generated and distributed 32, 49, 69 a 73 G4-EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change 52 Market Presence G4-EC5 Variation of the ratio between the lowest wage and the local minimum wage Variation between the lowest wage and the minimum wage: 1.97 Variation between the lowest wage and the minimum wage - Men: 1.97 Variation between the lowest wage and the minimum wage - Women: 2.13 National minimum wage on 12/31/2015: BRL 880.00 Global Compact 1, 2, 7, 8, 9 1, 2, 7, 8, 9 1, 2, 6 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital 4-EC7 Development and impact of infrastructure investments and services provided for public benefit 47 In addition to the investments included in the report, Copel Geração e Transmissão invested another 2.13 million in social projects. This data was not available during the reporting period, which is why it could not be ensured. 1, 2, 7, 8, 9 Natural Capital G4-EC8 Significant indirect economic impacts, including the extent of impacts 43, 45 Procurement Practices G4-EC9 Policy, practices, and proportion of spending on locally-based suppliers 44 Environmental Aspect Energy G4-EN3 Energy consumption within the organization Water G4-EN8 Total water withdrawal by source G4-EN9 Water sources significantly affected by withdrawal of water Biodiversity 56 55 55 G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas Copel Distribuição has 8,208.4 km of transmission lines with voltages ranging from 69 to 500kV. Of this total, only 82.146 km in full Protection conservation units, according to the National System of Protected Areas (SNUC), only 0.96% – of its total extension. Copel Geração e Transmissão has 27,277 km of high voltage distribution lines in Fully Protected Areas in the State of Paraná, according to SNUC. Copel Renováveis does not have its own, leased or managed areas in Fully Protected Areas, according to SNUC. 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 58 G4-EN13 Habitats protected or restored 59, 60 84 Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact 1, 2, 7, 8, 9 1, 2, 7, 8, 9 7, 8 7, 8 8 8 8 8 GRI Content IndexCopel | 2016 Sustainability Report G4-EN14 Total number of IUCN red list species and in other conservation lists with habitats in areas affected by operations of the organization v Copel Geração e Transmissão: The most recent information presented refers mainly to the wildlife and flora data affected by the most important Generation project, which is in the final phase of implementation at the moment, which is the Colíder Plant. ENDANGERED SPECIES Critically endangered Endangered Vulnerable Near threatened Least concern 3 12 28 1 21 8 Copel Distribuição: The main species found in forest suppression inventories is Araucaria angustifolia (pranic- paraná), considered critically endangered on the IUCN red list. Among the species listed by the IUCN were: Cedrella fissilis (cedar) - endangered and Ocotea puberula (canela-guaicá) - of l concern. Also, Dicksonia sellowiana (xaxim) is considered endangered on national and state lists. Aiming to reduce the suppression of vegetation when implementing distribution lines, the Internal Program to Minimize Impacts on the forest cover is executed. Copel Renováveis S.A.: Of the species of vascular plants surveyed in the present studies carried out in the Copel Renováveis projects, five appear on some of the consulted endangered species lists. The species Griffinia gardneriana (Herb.) Ravenna appears on Ministry of the Environment (MMA) Ordinance No. 443/2014 as “endangered” (EN). Tacinga inamoena (K.Schum.) NPTaylor & Stuppy, Cereus jamacaru DC and Pilosocereus catingicola (Gürke) Byles & Rowley, belonging to the family Cactaceae, are listed in Appendix II of the CITES list, which is also considered “LC” by IUCN for the State of Rio Grande do Norte. The species Catasetum sp., listed in Appendix II (species not necessarily endangered, but whose marketing must be controlled to avoid exploitation incompatible with its survival) was also identified on the CITES list. Emissions G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1) 53 G4-EN16 Indirect greenhouse gas (GHG) emissions from the acquisition of energy (Scope 2) 53 G4-EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3) 53 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 BRL thousand: 0.041. G4-EN19 Reduction of greenhouse gas (GHG) emissions 53 G4-EN20 Emissions of ozone-depleting substances (ODS) COPEL does not maintain production, import or export activities of ODS. G4-EN21 NOx, SOx and other significant air emissions Emission of Persistent Organic Pollutants (POP) Emission of Volatile Organic Compounds (VOC) Emission of Hazardous Air Pollutants (HAP) Emission of Particulate Matter (PM) Air Emissions NOx SOx 2016 (t) 709 2764 0 0.20 0 709 Effluents and Waste G4-EN22 Total water discharge by quality and destination In 2016, Copel’s administrative facilities, in the State of Paraná, discharged 119,788.92 m³ of sanitary wastewater* in collecting public networks or in controlled septic tanks. *Generation of sanitary wastewater calculated according to NBR 7229, coefficient of return water-sewer = 0.8. G4-EN23 Total weight of waste by type and disposal method 57 Compliance G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations In the case of Copel Geração e Transmissão, there was a Terms of Adjustment of Conduct (TAC), which covers two judicial proceedings, in which six court deposits totaling BRL 1,200,000.00 were made. There were no sanctions. 85 7,8 7, 8 7, 8 7, 8 ,9 7,8 7,8 8 8 8 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact GRI Content IndexCopel | 2016 Sustainability ReportSuppliers G4-EN32 Percentage of new suppliers that were screened using environmental criteria 44 For legislation-related issues as well as due to the fact that Copel is a mixed economy company, the bidding processes follow the applicable legislation, therefore not allowing for the selection of suppliers based on environmental criteria. G4-EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken At Copel, there is currently no mapping of significant negative environmental impacts in the supply chain. Social Aspect Labor practices and decent work Employment G4-LA1 Total number and rates of new employee hires and employee turnover 30 2014 2015 2016 Turnover rate  2014  2015  2016 New Hires Total Male Female 211 131 80 225 144 81 95 70 25 New hires by age group and location 2014 2015 2016 Under 30 30 to 50 Over 50 Southern Region Southeast Midwest Northeast North 112 93 6 114 99 4 208 222 0 3 0 0 0 3 0 0 47 45 3 90 0 3 2 0 Overall (%) Male (%) Female (%) Under 30 30 to 50 Over 50 Southern Region Southeast Midwest Northeast North 0 2.51 3.82 7.83 1.85 2.1 2.44 0 4.76 0 0 2.42 2.17 3.31 0 0 0 0 0 0 0 0 1.7 1.38 2.78 3.25 0.94 3.31 1.65 5.56 3.97 20 0 8 8 6 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact G4-LA2 Benefits provided to full-time employees that are not provided to temporary or part-time employees G4-LA3 Return to work and retention rates after parental leave Occupational Health and Safety 32 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, Flexible Hours, Assistance to People with Disabilities, Assistance to employees with dependents 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 Space, Copel Choir, Hours during work days for volunteer work. Benefits offered through the Copel Foundation - Private Pension Plan, Peculio Plan, Medical, Hospital, Dental, and Pharmaceutical Assistance Plan, and Loans with interest rates lower than those practiced by the market. 1,2,6 In all, maternity and paternity leave in the period, respectively, 112 and 283, and 98.21% returned after taking a maternity leave: 110 and 100% - after taking a paternity leave: 283 6 G4-LA6 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities 35 86 GRI Content IndexCopel | 2016 Sustainability ReportTraining and Education G4-LA9 Average number of training hours per year by employee G4-LA10 Programs for skills management and lifelong learning G4-LA11 Percentage of employees regularly receiving performance reviews Diversity and Equal Opportunity G4-LA12 Composition of governance bodies and breakdown of employees by employee category, by gender, age group, minority group, and other indicators of diversity 32 33 32 Profile of individuals who are part of the governance bodies (%) By Category (%) Profile of Copel employees (%) 2014 2015 2016 2014 2015 2016  2014  2015  2016 Men Women Under 30 30 to 50 Over 50 Blacks / mixed 96 4 0 28 50 4 97 3 13 13 50 3 95 5 0 20 80 0 Supplier Assessment for Labor Practices Operational 1.63 1.58 1.44 Men 78.2 77.87 77.73 Technical Prof. High School Degree 23.98 24.03 23.9 Women 21.8 22.13 22.27 Prof. High School Degree 57.08 57.15 56.8 Under 30 Prof. University Degree 17.32 17.25 17.8 30 to 50 Over 50 People with disabilities or special needs * Values are not informed Blacks / mixed * * * 2.2 11.6 * * * 10.05 67.78 22.15 2.36 2.58 11.34 11.33 6 6 6 6 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact G4-LA14 Percentage of new suppliers that were screened using labor practices criteria 44 For legislation-related issues as well as due to the fact that Copel is a mixed economy company, the bidding processes follow the applicable legislation, therefore not allowing for the selection of suppliers based on environmental criteria. 1,2,7,8 G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain Currently, Copel does not have programs in place for mapping negative impacts related to labor practices in the value chain. 1,2,7,8 Human Resources Investments G4-HR1 Total number and percentage of significant investment agreements and contracts that include human rights clauses. 44 Neither Copel Renováveis nor Copel Geração have management over the indicator yet. Indigenous Rights G4-HR8 Total number of incidents of violations involving rights of Indigenous people and actions taken In 2016, there were no cases of violation of the rights of Indigenous and traditional people. 2 1 87 GRI Content IndexCopel | 2016 Sustainability ReportSupplier Assessment for Human Rights G4-HR10 Percentage of new suppliers that were screened using human rights criteria 44 For legislation-related issues as well as due to the fact that Copel is a mixed economy company, the bidding processes follow the applicable legislation, therefore not allowing for the selection of suppliers based on environmental criteria. G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken Currently, Copel doesn’t have programs of mapping of negative impacts related to human rights in supply chain. Society Local Communities G4-SO1 Percentage of operations with local community engagement, impact assessments, and local development programs G4-SO2 Operations with significant actual and potential negative local communities impacts on 47 46 Anti-corruption 4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified 24 G4-SO4 Communication and training on anti-corruption policies and procedures G4-SO5 Confirmed incidents of corruption and actions taken 23, 24 23 Public Policies G4-SO6 Total value of political contributions by country and recipient/beneficiary The 2016 elections did not include financial donations from Copel. Given its quasi-public composition, the Company is legally constrained to make this type of contribution. Anti-competitive Behavior 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. Compliance G4-SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations In 2016, there was a fine of BRL 491,187.70 at Copel Telecomunicações. In addition, the amount of BRL 1,321,243.63 was paid by Copel Geração e Transmissão. There were no non-monetary sanctions or lawsuits brought through arbitration mechanisms. Supplier Assessment for Impacts on Society G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society 44 For legislation-related issues as well as due to the fact that Copel is a mixed economy company, the bidding processes follow the applicable legislation, therefore not allowing for the selection of suppliers based on environmental criteria. G4-SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken 44 At Copel, there is currently no mapping of significant negative impacts on the supply chain in society. 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 42 At Copel, there is currently no systemic process for recording and managing complaints and claims specifically related to impacts on society. Product Responsibility Product and Service Labeling G4-PR5 Results of surveys measuring customer satisfaction 41, 42 Compliance G4-PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services In 2016, 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. 88 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact 1,2 1,2 1,2,7,8 1,2,7,8 10 10 10 10 10 1,2,7,8, 10 1,2,7,8, 10 GRI Content IndexCopel | 2016 Sustainability ReportSector Supplement Indicator Organizational Profile Details or reference page G4-EU1 Installed capacity, broken down by primary energy source and regulatory regime 60 G4-EU2 - Net energy output, by primary energy source and regulatory regime 60, 65 G4-EU3 Number of residential, industrial, and trade accounts G4-EU4 Extension of transmission and distribution lines, aerial and underground, broken down by regulatory system Management of Demand for Electric Power 41 64 G4-DMA EU7 Management programs for demand, including residential, trade, institutional, and industrial 43 Research & Development G4-DMA EU8 R&D activity and expenditure aimed at providing more reliable electricity and promoting sustainable development 37 Breakdown of investment in R&D - Copel Distribuição: Project Management Alternative sources for power generation Metering, billing, and fighting commercial losses Environment Operation of Electric Power Systems Planning Electric Power Systems Other projects Supervision, Control, and Protection of Electric Power Systems Safety Total Availability and Reliability 2016 871,407.97 340,792.86 584,740.44 3,038,763.98 2,891,060.93 940,682.01 934,524.12 4,496,446.91 3,606,331.53 17,704,750.75 Breakdown of investment in R&D - Copel Geração e Transmissão: Energy Efficiency Alternative sources for power generation Management of Watersheds and Reservoirs Environment Operation of Electric Power Systems Planning Electric Power Systems Quality and Reliability of Electric Power Services Supervision, Control, and Protection of Electric Power Systems Safety Total 2016 1,065,709.43 2,335,641.84 106,191.53 2,848,883.92 2,316,348.71 1,118,679.04 3,900.80 2,427,165.11 3,074,958.76 15,297,479.14 Global Compact 1, 7,8 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact G4-DMA EU6 Management approach to ensure short- and long-term electricity availability and reliability 63 The Operation and Maintenance (O&M) processes for Copel Geração 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. In addition to this structured procedure, a set of O&M process support tools such as Meeting to Analyze Occurrence of Failures in Generating Units (ANAOCO) and Support App Portal (OMNI/GMG) is applied. The activities are related to maintenance planning, team management, material management, equipment registration, event registration, management of occurrence analysis, and calculation of equipment performance indicators. The ONS annually publishes the Annual Performance Report (RAD), where the results of all centrally dispatched plants are compiled by ONS. In this report, the results of the generation agents are individually compared to the average of the other agents. These reports show that the performance of Copel Geração e Transmissão’s plants, in addition to the plants where the company provides operating and maintenance services, is above the performance of other plants centrally dispatched by ONS. 89 GRI Content IndexCopel | 2016 Sustainability ReportAvailability and Reliability G4-EU10 Planned capacity against projected electricity demand over the short- and long terms Generation expansion planning is conducted by the Energy Research Company - EPE, considering the entire load of the National Interconnected System – SIN. In 2016, the amount was 771MW. System Efficiency G4-EU12 Transmission and distribution losses as a percentage of total energy (%) 66 Biodiversity G4-EU13 Biodiversity of offset habitats compared to the biodiversity of the affected areas Copel mitigates impacts on ecosystems through compensation, but at the moment does not make the comparison between the affected and compensated habitats. 7,8 Labor Practices and Employment About the Report Message from the President Industry Context About Copel Governance and Sustainability G4-DMA EU14 Programs and processes that ensure the availability of skilled labor 32, 34 1,2,5 Human Capital G4-EU15 Percentage of employees with a right to retirement in the next 5 to 10 years, broken down by functional category and region There are 1,073 (12.56% of total) of employees subject to retirement between 2016 and 2021, and 2,183 (25.6%) - between 2016 e 2026. 1,2,5 G4-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 In 2016, a total of 2,642 outsourced and subcontracted employees of Copel Geração e Transmissão were subjected to health and safety training. Due to the great turnover of the employees hired, and the characteristics of the contracts (on demand, for example), there is no way to tell what percentage of contractors were trained. The company adopts, as a rule, safety integration training for all its contractors. At Copel Distribuição, this figure totaled 5,367 outsourced and subcontracted employees, representing 100%. In the case of the Holding Company Copel Renováveis, and Copel Comercialização, there were 160 workers. 7,8 1,2,5 Natural Capital Description of the roles of the main stakeholders in the Company’s decision-making processes: Copel Holding: schedules and approves all of Copel’s investment decisions. Government of the State of Paraná: controls the common shares and maintains administrative control of Copel Holding, is involved in all strategic decisions of Copel and its subsidiaries. Ministry of Mines and Energy (MME): acts directly and indirectly (through its affiliated companies) in the long term investment decision making process. Agencies linked to the MME: - National Electricity Agency (ANEEL) - normalizes and supervises all services provided by Copel Distribuição. It has the role of adjusting and reconciling the interests of society as a whole and the energy distribution companies; - Energy Research Company (EPE) - plans transmission lines, in line with the needs for Copel Distribuição; - Operator of the National Integrated Grid (ONS) - operates the national integrated grid and detects problems and appoints solutions for the network of Distribution Companies. Consumer Council: Represents the various classes of consumers of electricity in all levels of planning. Organized civil society: Is represented by governmental and non-governmental bodies for discussions on infrastructure projects, representations, or organized trade unions. Municipal Government - a stakeholder in all decision-making processes in infrastructure projects. Environmental agencies and intervenors: analyze and approve environmental and archaeological licensing of Copel Distribuição’s main infrastructure works. Copel’s Business Development Office is responsible for the analysis of business opportunities and submits to approval by the Executive Board and the Board of Directors, responsible for approving strategic decisions. Participation of stakeholders occurs in various ways, according to the phase of each project. In the case of Implementation of infrastructure projects: - the community is consulted directly through public hearings conducted by the licensing body and indirectly through permits/licenses/no opposition; is involved throughout the social and environmental licensing process; - stakeholders: involved through the social and environmental programs defined during the licensing process. In the case of acquisitions of assets, completion of acquisition of any asset depends on approval of regulatory agencies, such as ANEEL, 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 for participation of energy auctions, several agencies participate in the process, where the environmental agency (IAP / Departments of the Environment/IBAMA) is 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 the participation of stakeholders, including vulnerable stakeholders, pursuant to 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. G4-DMA EU20 Approach to managing the impacts from displacements 45 In the year 2016, two families were displaced, totaling 4 people. G4-EU22 Number of people physically or economically displaced or compensated, broken down by type of project 45, 47 90 Intellectual Capital Social and Relationship Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact GRI Content IndexCopel | 2016 Sustainability ReportProvision of Information G4-DMA EU24 Practices used to address barriers related to language, culture, low schooling and special needs that stand in the way of access to electricity and customer service, as well as to its safe use 49 UPS Cidadania and Paraná Cidadão: orking 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, providing guidance to these audiences in an entertaining manner, through the use of educational games and the Energy Efficiency VAN, regarding the conscious and safe use of electricity. Copel no Bairro (Copel in the Neighborhood): Meets local demands, raising awareness in the community toward the efficient and safe use of electricity. In 2016, four events were held, totaling eight days of activities in the communities, all located in the Tatuquara neighborhood in Curitiba. 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 for audiences with Consumer Health and Safety specific accessibility needs. Copel offers blind consumers the possibility of receiving their energy bills in Braille. Copel Distribuição has 72.4% of its branches and service stations architecturally adapted for people with disabilities (there was a reduction compared with 2015 due to a change in the number of service locations). Copel’s website is adapted for access to people with visual impairment. In 2016, the site was also adapted for people with hearing impairment by implementing the Hugo avatar. Assistance to Indigenous peoples and remote areas: Copel has in its concession area several Indigenous tribes, and seeks to ensure this group the right to the differentiated rate benefit established in the TSEE (Social Electricity Rate). By 2016, a total of 819 Indigenous consumer units were enrolled in the TSEE. 1,2,8 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 involving the population Number of deaths involving the population Number of cases related to health and safety, including diseases and members of the audiences affected in legal agreements and potential risks associated with these cases. Access 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 43, 95 2014 2015 2016 31 8 0 29 13 3 38 14 15 1,2,7 G4-EU26 Percentage of unattended population in concession area 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. 4-EU27 Number of residential disconnections for non-payment, broken down by duration of disconnection and by regulatory regime Number of consumer units disconnected considering the time between disconnection and payment agreement 2015 2016 Number of consumer units disconnected considering the time between disconnection and payment agreement and reconnection  2015  2016 Less than 48 hours 232,716.00 269,812.00 Less than 24 hours 268,742.00 273,314.00 Between 48 hours and one week 41,852.00 55,691.00 Between 24 hours and 48 hours 11,702.00 15,796.00 Between one week and one month 54,293.00 73,259.00 Between 48 hours and 48 hours 17,004.00 15,705.00 Between one month and one year 51,069.00 80,136.00 Over 7 days 34,250.00 41,853.00 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact Over one year – 28.00 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 regulatory system. 65 65 64 91 GRI Content IndexCopel | 2016 Sustainability ReportAudit Report G4-33 92 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact GRI Content IndexCopel | 2016 Sustainability ReportAbout the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Audit Report Annex - Incorporation of the Principles of the Global Compact 93 GRI Content IndexCopel | 2016 Sustainability ReportEmployees of Copel 94 14. ANNEX - INCORPORATION OF THE PRINCIPLES OF THE GLOBAL COMPACT AND SDGS Copel | 2016 Sustainability Report 14. Annex - Incorporation of the Principles of the Global Compact and SDGs G4-15, G4-16, G4-EU23 The Company ratifies its commitment to the United Nations Global Compact and the Sustainable Development Goals and presents as an Annex its Communication on Progress (COP), where it specifies the initiatives developed to implement the principles of the Global Compact and the SDGs 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 in 2016, which can be located in the GRI indicators reported by Copel. Principles of the Global Compact The Global Goals for Sustainable Development RESPECT and support the internationally recognized human rights in its area of influence ENSURE the company’s non-participation in violation of human rights SUPPORT freedom of association and recognize the right to collective bargaining ELIMINATE all forms of forced or compulsory labor ERADICATE effectively all forms of child labor from its production chain STIMULATE practices that eliminate any kind of discrimination in employment ASSUME a responsible and proactive preventive approach to environmental challenges DEVELOP initiatives and practices to promote and disseminate social and environmental responsibility ENCOURAGE the development and diffusion of environmentally responsible technologies FIGHT corruption in all its forms, including extortion and bribery 95 About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Annex - Incorporation of the Principles of the Global Compact and SDGsCopel | 2016 Sustainability Report PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES PRINCIPLES AND OBJECTIVES RESPONDED DATE GLOBAL COMPACT SDG START / FINISH Policies and Management Systems Adherence to voluntary commitments in an effort to promote sustainability, ethical conduct and best practices in corporate governance: Global Compact; ODS National Movement We Can Paraná; Business Contribution for the Promotion of a Green and Inclusive Economy; Statement Call to Action for Governments in the Fight Against Corruption; Business Pact for Integrity and against Corruption, and Principles for Sustainable Executive Education (PRME). 1 to 10 16, 17 Various / Indeterminate Management to 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. 1 to 10 16, 17 2008 / Indeterminate Our Energy Program - ties together obtaining new opportunities in relation to career development, remuneration, and personal development to performance. 6 16 2013 / Indeterminate Generation by renewable sources – compliance with the strategic and sustainability guidelines established for the generation business, Copel Renováveis has been researching and prospecting new businesses related to these energy sources. 7, 8, 9 7, 17 Indeterminate Ethical Guidance Council – analyzes and provides guidance on processes related to ethical conduct in the Company. 1 to 10 5, 8, 16, 17 2003 / Indeterminate Committee for the Analysis of Reports on Psychological Harassment – aims to assess reports on psychological harassment in labor relations within the Company. 1 to 10 5, 8, 16, 17 2009 / Indeterminate Integrity Program and Compliance Portal – a set of activities that ensure compliance with internal and external rules and regulations to which the company is subject and a platform for disseminating the Company’s commitments to transparency and the fight against corruption. Transparency Portal - of the Company and link to the Transparency Portal - In this environment, information is found on the structure of the government, revenues, expenses, bids, contracts, assets, remuneration of the Executive Branch employees. This tool for communicating with society enables monitoring and controlling the use of public resources. Publicizing the acts of the Public Administration complies with Federal Law No. 12,527/2011, which ensures the right of access to information for citizens, and State Decree No. 10,285/2014. 10 10 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. 1 to 10 16 16 4 2015 / Indeterminate 2014 / Indeterminate Financial Capital 2014 / Indeterminate About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact 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. 9, 10 13, 16, 17 2012 / Indeterminate Copel’s Corporate University – UniCopel – Implementation of Educational Planning and management of the Leadership Development Programs, Postgraduate, Master’s and Doctoral degrees, and Languages.x 1, 2, 7, 8, 9 13, 16, 17 2007 / Indeterminate 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. 1, 2, 7, 8, 9 6, 7, 15 2011 / Indeterminate Integrated Management of Water and Soil - partnership between Copel, Sanepar and the Secretaries of State, aimed at creation of synergy between the actions conducted in hydrological micro-basins and at promotion of water quality and availability improvement through the improvement of use, management and conservation of soil, water and forests. 1, 2, 7, 8, 9 6, 15 2010 / Indeterminate Support for Public Policies and Management Improvement Participation in the Brazilian Committee of the Global Compact and the ODS National Movement We Can Paraná. 1 to 10 16, 17 2016 / Indeterminate Member of the Brazilian GHG Protocol Program: as a founding member, Copel conducts and publishes annually the accounting report of greenhouse gas (GHG) emissions. 1, 2, 7, 8, 9 Participation in the Entrepreneurship Initiative Trends in Ecosystem Services - TeSE - initiative of the Center for Sustainability Studies of the FGV (Gvces) - aims to incorporate the concepts of valuing Ecosystem Services in business, as well as developing methodology. 7, 8, 9 13 16 2008 / Indeterminate 2015 / Indeterminate 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., Brazilian Assoc. of Power Generation Companies, Brazilian Assoc. of Power Distribution Companies, Brazilian Assoc. of Large Power Distribution Companies, Brazilian Committee of Large Dams, Regional Engineering, Architecture and Agronomy Council in Paraná, FUNCOGE. Participation in associations that discuss and promote environmental improvements: Forum Paraná Agenda 21, Federation of Industries of Paraná, Interinstitutional Commission of Environmental Education of the National Program of Environmental Education, Watersheds Committees of the State of Paraná, Cigré Environment Committee, Regional Engineering Council, Architecture and Agronomy of the State of Paraná, Garbage and Citizenship PR Forum, Forum on Climate Change of the State of Paraná, Environmental Committees of the Public Ministry of Paraná. 1 to 10 6, 7, 15 Various / Indeterminate 7,8,9 6, 15 Various / Indeterminate 96 Annex - Incorporation of the Principles of the Global Compact and SDGsCopel | 2016 Sustainability Report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: National Quality, MPE Brasil, and The Management Quality of the State of Paraná. 1 to 10 1 to 10 16, 17 16, 17 2005 / Indeterminate 2000 / Indeterminate Integrated Management of Water and Soil - in partnership between Copel, Sanepar, and State Departments, to create synergy between actions carried out in watersheds, to promote the improvement of the quality and availability of water by perfecting the use, management, and proper conservation of soil, water, and forests. 1, 2, 7, 8, 9 6, 15 2010 / Indeterminate Programs, Projects, and Social and Environmental Initiatives Program to collect donations to charities and social service institutions, non-profit and of collective interest, through the energy bill. Annual donation, through tax incentives, to Fund for the Rights of Children and Adolescents – FIA, Rouanet Act, Elderly Act, Incentive to Sports Act, PROFICE, PRONON and PRONAS. 1 to 10 1, 2, 5 1 1 1999 / Indeterminate 2006 / Indeterminate Corporate Volunteer Program - EletriCidadania: the program allows employees to use up to 4 hours/month for performing volunteer work. 1, 2, 4, 5, 7, 8 5,17 2001 / Indeterminate Choir: promotes employee integration, the quality of life at work, the development of culture and music education, as well as the appreciation of Copel’s brand in the community. 6 Support room for breast pumping and reduced working day: a comfortable and cozy place where mothers may withdraw and store breastmilk to be offered to their children in a timely manner. 1, 2, 6 3 3 2010 / Indeterminate 2016 / Indeterminate Program Cultivating Energy: works to implement community gardens in the safety sections of Copel’s power networks, in partnership with municipal administrations and associations of residents. 1, 7, 8, 9 2, 10 2009 / Indeterminate Corporate Accessibility Program: aims to adapt the Company in accessibility issues. 1, 2, 6 8, 9 , 11, 16, 17 2007 / Indeterminate Eco-Efficiency Program: Works to concentrate the various eco-efficiency initiatives developed by Copel into one program that operates as a hub, interconnecting them, strengthening them, potentializing them, and enabling new forms of operation. 7, 8, 9 6, 8, 11, 12, 13 2014 / Indeterminate Education for Sustainability Program: works to train and develop professionals, formal and informal leaders of Copel, in sustainability-related issues. Copel Sustainability Seminar: The initiative aims to disseminate social and environmental projects and practices. The Seminar was reformulated and extended to other cities in the state of Paraná, to the cities of Londrina, Cascavel, and Segredo, under the name of Sustainability Dialogues. 1 a 10 1 a 10 Susie Pontarolli Sustainability Trophy - aims to recognize and support initiatives aimed at contributing to the promotion of sustainable development and improvement in the quality of life. 1 a 10 4 4 4 1998 / Indeterminate 2009 / Indeterminate 2012 / Indeterminate Luz Fraterna Program: Program of the Government of the State of Paraná that performs payment of consumer bills registered on the Social Electricity Rate, provided that consumption does not exceed 120 kWh. 1, 2, 4, 5, 10 1, 7, 11 2003 / Indeterminate Program Morar Bem (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. 1, 2, 4, 5, 10 1, 7, 11 2003 / Indeterminate Rural Nighttime Rate Program: incentive to increased agricultural production, to poultry and pig farmers, through discount prices for consumer units classified as rural, served in low voltage. 1, 2, 4, 5, 8 Nighttime Irrigation Program: incentive to use of irrigation to increase agricultural and poultry production and improve quality of life in rural areas. Subsidized rates and equipment to rural consumers. Energy Efficiency Program: Geared toward the efficient use of electricity in residential, industrial, trade, and public school installations located in Copel’s concession area. 1, 2, 8 1, 2, 8 11 11 7 2007 / Indeterminate 2003 / Indeterminate 2000 / Indeterminate Paraná Cidadão (Paraná Citizen) Program: a 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 electric energy. 1,2,4,5,6,10 1, 7, 9 2003 / Indeterminate Paraná Digital Program: digital inclusion in public education, through the connection of State schools to the Internet. In partnership with the State Government/SEED, we take the Internet to schools, with priority to localities with low HDI. Today, there are 2,210 State schools served by Paraná Digital. 1, 2, 4, 5, 6, 10 1, 9, 11 2003 / Indeterminate Connected Paraná Program: the initiative provides access to the Internet in fiber optics at affordable prices and at 1 Mbps speed, according to the State Broadband Plan. 1, 2, 4, 5, 6, 10 1, 9, 11 2010 / Indeterminate State Broadband Plan - PEBL: aims to disseminate affordable Internet access to all municipalities in 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. 1, 2, 4, 5, 6, 10 1, 9, 11 2010 / Indeterminate Social Electricity Rate: Established through Law No 10,438/2002, discounts are offered on electric energy 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. 97 1, 2, 4, 5, 6, 10 1, 7, 11 2002 / Indeterminate About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Annex - Incorporation of the Principles of the Global Compact and SDGsCopel | 2016 Sustainability ReportMais que Energia (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. 1, 2 1, 7, 11 2014 / Indeterminate Smart Grid Project: Installation of 2,000 telemetering 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 deployment of crews. 1, 2, 7, 8, 9 17 2015 / Indeterminate Telemetry: enables the automated collection of data in real time (on time), optimizing the process for more precise collection, handling, and availability of data, including data for customers, via the Internet. 8, 9 7,9,13 2010 / Indeterminate Distributed Generation: type of energy generation that differs from centralized, usually of greater size and greater environmental impact, because it occurs with or close to consumers. 7, 8, 9 7,9,12,13 2004 / Indeterminate Illuminating Generations Project: Lectures for 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. 1,2 Program Mais Clic Rural: Improving the quality of electric power supply in rural areas, with a focus on farming activities integrated with production processes sensitive to interruptions. 1, 2, 7, 8, 9 Solidarity Invoice: Incentive to customers who opt for receiving the invoice by email; at each registration, Copel donates BRL 1.00 to the APAE institutions in the State of Paraná. 1, 2 4 7, 11 11 1970 / Indeterminate 2015 / Indeterminate 2015 / Indeterminate Waste Sorting: program is conducted in partnership with associations and material recycling cooperatives and works to contribute with income generation and improvement in working conditions for pickers. 7, 8, 9 1, 10, 11 2009 / Indeterminate PrevenCão: Awareness of the population about the importance of caring for pets to prevent accidents. 7, 8, 10 4 2015 / Indeterminate 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 improve public safety and local social and economic development. 7, 8, 9 7, 11, 17 2013 / Indeterminate Corporate Waste Management Program: Aims to reduce, reuse, measure, and monitor solid waste generated by the Company. 7, 8, 9 8, 11, 12 2006 / Indeterminate Program for Monitoring and Repopulation of Fish Fauna - works to monitor and repopulate the Company’s reservoirs and rivers where Copel’s projects have some influence. Experimental Station for Ichthyological Studies: Study and reproduce species suitable for repopulation of rivers and reservoirs in Paraná. Riparian Forests Program: Aims to recover natural environments surrounding the reservoirs of power plants and other areas of interest to the Company. 7, 8, 9 7, 8, 9 7, 8, 9 15 15 15 1993 / Indeterminate 1992 / Indeterminate 2006 / Indeterminate Urban Forests Program: Since 2007, Copel has supported municipal governments in planning afforestation of public roads, contributing to environmental improvement and reduction of energy supply interruptions caused by the conflict between vegetation and electrical systems. 7, 8, 9 11, 15, 17 2008 / Indeterminate About the Report Message from the President Industry Context About Copel Governance and Sustainability Human Capital Intellectual Capital Social and Relationship Capital Natural Capital Infrastructure Capital Financial Capital Social Audit GRI Content Index Annex - Incorporation of the Principles of the Global Compact Control of invasive and/or exotic species: Monitoring and control of invasive and/or exotic species of wildlife and flora. Recovery of degraded areas: Monitoring and recovery of degraded areas. Forest Gardens: its objective is the production of seedlings suitable for application in other Company programs. Botanical Garden: aims to conserve and research plant species and to house collections of exotic ornamental plants. 7, 8, 9 7, 8, 9 7, 8, 9 7, 8, 9 15 15 15 15 2000 / Indeterminate 1999 / Indeterminate 1973 / Indeterminate 2010 / Indeterminate 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 Rescue programs and from the Cultural and Scientific Exploitation Memory of Flora and Wildlife in the implementation of the Ney Braga Hydroelectric Power Plant. 7, 8, 9 4, 11 2000 / Indeterminate Ecosystem services: direct and indirect contributions of ecosystems to the economy and well-being of humanity. 7, 8, 9 6, 8, 11, 15 2015 / Indeterminate Life Cycle Analysis: A tool that quantifies the environmental impacts of a given product or service. Composed of categories such as: greenhouse gas emission (GHG), acidification, eutrophication, toxicity, consumption of natural resources, and depletion of the ozone layer. 7, 8, 9 7, 8, 12 2015 / Indeterminate Reverse Logistics: plan, recommend, and structure the actions related to the aspect, within the scope of the Corporate Waste Management Program. 7, 8, 9 12 2014 / Indeterminate 98 Annex - Incorporation of the Principles of the Global Compact and SDGsCopel | 2016 Sustainability ReportCredits Coordination Governance, Risk and Compliance Office Coordination of Corporate Sustainability and Governance GRI Consulting, validation of materiality and texts Keyassociados Graphic Project Vivas Comunicação copel@copel.com Rua Coronel Dulcídio, 800 - Batel - Curitiba - Paraná - Zip code 80420-170 

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