Companhia Paranaense de Energia (COPEL)
Annual Report 2017

Plain-text annual report

ANNUAL AND SUSTAINABILITY REPORT 2017 COPEL IN NUMBERS 2017 102-7 NUMBER OF EMPLOYEES8,245PRODUCTS AND SERVICES: Generation, Transmission, Distribution and Commercialization of Electric Power, and TelecommunicationsPOWER TRANSMISSION: 150 km lines delivered (TL Assis-Londrina delivered in 2017)NUMBER OF OPERATIONS: 28 own power plantsand 3 participations, 7,025 km transmission lines and 45 substations, 196,951.2 km distribution lines and 369 substationsNET OPERATIONAL REVENUES: BRL 14,024.6 millionPOWER DISTRIBUTION:Equivalent Interruption Frequency (FEC): 6.79 and Equivalent Interruption Duration (DEC): 10.41NET POWERGENERATION: 20,891 GWhTELECOMMUNICATIONS:32,422 km optical fi ber2CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 3 RECOGNITIONS Awards / Certifi cations Certifi cating Entity Awards / Certifi cations Recognition as the most transparent state owned company in Brazil Abradee Award – Social Responsibility Abradee Customer Assessment Award – Best Distributor in Brazil Award – Best Distributor (gold category) International Transparency (TRAC Brazil) SESI SDG Seal – Recognition of the practices in favor of the Sustainable Development Goals Brazilian Electric Power Distributor Association Brazilian Electric Power Distributor Association Comisión de Integración Energética Regional – CIER Latin America Recognition for the good practices related to SDG United Nations – UN IASC Brazil Award – Utility companies above 400 thousand IASC South Award – Utility companies above 400 thousand Aneel Aneel Certifi cating Entity SESI Paraná Climate Seal Gold Paraná Government of the State of Paraná Award – Best companies to work (9th place) Great Place to Work (GPTW) Award – 150 best company to work Você S/A Award – Best fi xed line broadband operator in Paraná Anatel Citizen Company Certifi cate – information presented in the social report Regional Accounting Board of the State of Rio de Janeiro, FIRJAN System, FECOMÉRCIO Recognition for fastest Internet in Brazil Portal Minha Conexão Award 500 Largest in the South – Best company in Paraná Amanhã Magazine Copel Telecom among the most profi table in the sector Telecom Yearbook Award 500 Largest in the South – Best net revenues power sector Amanhã Magazine Innovation Projects TeleSíntese Yearbook – Momento Editorial COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 4 ABOUT THE REPORT COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 5 Companhia Paranaense de Energia – Co- pel presents its Sustainability Report 2017, demonstrating performance associated to generation of value for its stakeholders in so- cial, economic and environmental aspects. Published annually, the edition consolidates the information relevant for the fi scal period started in January 2017 and ended in Decem- ber the same year. 102-1, 102-50, 102-52 The accounting data presented in this report refer to the companies, where Co- pel hold corporate shares. The non-account- ing data comprehend mainly Copel and its wholly-owned subsidiaries Copel Geração e Transmissão S.A. (GeT), Copel Distribuição (DIS), Copel Telecomunicações S.A. S.A. (CTE) and Copel Comercialização S.A., in- dicating inclusion or exclusion of any opera- tion, when applicable. In 2017, the activities of Copel Renováveis S.A. were incorporated to Copel Geração e Transmissão S.A. With- in the participations, Copel sold its shares in Sanepar, receiving BRL 489.1 million. 102-10, 102-45, 102-49 The Sustainability Report 2017 meets the following assumptions: • principles of Global Reporting Initiative (GRI). This report has been prepared according to the GRI Standards methodology, report op- tion “Essential”, including the set of indica- tors from the electric power sector supple- ment available in version G4. To assure the reliability of the content informed in the re- port, independent assurance of the materi- al disclosures and the report principles was done by Deloitte Touche Tohmatsu Auditores Independentes. 102-54, 102-56 • structure and guidelines of integrated re- port recommended by the International In- tegrated Reporting Council (IIRC), incorpo- rating the representation of the business model of its wholly-owned subsidiaries and the report structure of its performance by means of capitals (Human, Intellectual, So- cial and Relationship, Natural, Infrastruc- ture and Financial). • normative guidelines defi ned by the Interna- tional Financial Reporting Standards – IFRS, considered in the information coming from the Financial Statements and the Progress Communication in relation to the commit- ments undertaken with the Global Compact. • provisions in Law No. 13.303 (Law of the State Companies) dated 06/30/20161, which sets forth annual disclosure of integrated or sustainability report in article 8, item IX. The report is organized in two parts. The fi rst presents an overview of Copel’s busi- ness, bringing together the main social and environmental impacts and the strategic risks of its operations. The second part describes the context and the performance of the Com- pany’s capitals with a detailed approach to the relevant aspects of the business and its abili- ty to create value. Doubts, suggestions or clarifi cations about the content of Sustainability Report 2017 can be submitted to Talk to Us in the Copel´s site. 102-53 See other Copel´s reports: ADMINISTRATION´S REPORT AND FINANCIAL STATEMENTS 20F REPORT ANEEL COPEL DIS AND COPEL GET SOCIAL-ENVIRONMENTAL REPORTS COPEL MATERIALITY REPORT 1 In Law No. 13.303/2016, art. 91, the deadline of June 30, 2018 is set forth for public companies and private-public corporations constituted before the enforcement of the Law to provide the necessary adaptations to com- ply with these provisions. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 6 RELEVANT AND STRATEGIC TOPICS 102-46 In 2017, Copel reviewed materiality to de- fi ne the social, environmental and economic topics to be reported. For this purpose, it con- sidered the following methodology: Identifi cation of the subjects considered the most relevant for the electric sector by sources recognized on the market, such as RobecoSAM (conduct evaluation of compa- nies for participation in the Dow Jones Sus- tainability Index (DJSI), SASB (defi nes the sustainability report standards for companies traded on the American stock exchange) and RepRisk (tool for media analysis used by Ro- becoSAM along the process of company eval- uation for DJSI). In addition to the survey carried out at the mentioned sources, benchmarking was pre- pared with ten companies from the sector, highlighting the material topics presented in the respective sustainability reports. The identifi cation of the main subjects approached by the wholly-owned subsidiar- ies (SIs) of the Company (Distribution, Gen- eration and Transmission, Commercialization and Telecommunications). This process con- templated the survey of information at the following sources: • Copel´s Strategic Risks Plan (2018-2027); • Interview with the high management of Copel and its wholly-owned subsidiaries and managers of the main processes in the value chain; and • Channels for communication with stake- holders established by Copel and its whol- ly-owned subsidiaries, including: results from the ombudsman and employees´ opinion survey2. 102-43 The last activity of the topic prioritization stage contemplated the preparation of a ma- trix with correlation of the results obtained for Copel and its wholly-owned subsidiaries, and relevant topics for the sector (presented in the previous steps). The result from the mate- riality published in Sustainability Report 2016 was also inserted as criterion. The process of validation of the material topics inserted in the Sustainability Report was carried out in two occasions: MEETING OF THE MANAGEMENT – REDIR The results from materiality analysis were submitted to approval by Copel´s Executive Management in a Meeting of the Manage- ment – Redir held on 02/06/2018. At that occasion, the methodology used for prepa- ration of the materiality and the prioritized topics were presented. Finally, the prioritized topics were approved without remarks. MEETING OF THE BOARD OF DIRECTORS – CAD After validation of the material topics at Redir, the result was submitted to assessment by the Board of Directors – CAD in its ordinary meeting held on 02/21/2018. The prioritized topics in the previous stages were kept, and it was recommended to include the Diversity topic associated to the Human Capital. Compared to the materiality presented in Copel´s Sustainability Report 2016, the topics risk and crisis management, regulatory affairs management, access to capital and strategic planning and new assets were not considered material for not being related to general dis- closures reported by the Company. For supply management, although not considered mate- rial topic, the disclosures reported for social and environmental assessment of suppliers and defi nition of the supply chain were kept. 2 Copel did not adopt a specifi c process for inquiry to the stakeholders for preparation of materiality, scheduled to start again in 2018. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 7 In limits Out limits Employees Copel (operations) Government Regulating Bodies Suppliers Customers Communities MATRIX OF MATERIAL TOPICS AND IMPACT LIMITS 102-47, 103-1 Copel´s material topics GRI material topics Climate changes Governance, ethics, compliance Human capital management Diversity Innovation Culture 201_ Economic Performance / 305_Emissions 205_Anticorruption / 307_Environmental compliance / 419_Social-Environmental compliance 401_Employment / 404 Training and Education 405_Diversity Sector GRI Economic Financial Performance 201_Economic performance Relationship with Customers and Consumers Operational excellence and eco-effi ciency Relationship with communities Impacts on eco-systems 102_General Disclosures Sector GRI 302_Power / 303_Water 413_Local communities / 414_Social assessment of suppliers 304_Biodiversity / 308_Environmental assessment of suppliers Health and Safety at Work 403_Health and Safety at Work Human rights 411_Rights of Indigenous Tribes and traditional communities / 412_Assessment in human rights Direct impact Indirect impact No impact MESSAGE FROM ADMINISTRATION 8CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXWe progressed in thecreation of the Strategic Management Cabinet (GGE), whose objective was to speed upthe implementation of strategic projects for Copel.2017 imposed the need to keep resilient posture before the challenges of an economy that showed signs of a resumption of growth to the Brazilian companies. In addition to the macroeconomic scenario, which remained impacting several sectors in the country, in the specifi c case of the power market, other factors made the reestablishment of positive results diffi cult, highlighting the legalization of the sector and the diffi culty in obtaining new fi nancing in a period, when hydrology was also a problem for the operations and the generation of revenues. However, for short-term diffi culties, we succeeded to compensate the performance of Copel’s strategic planning for the next ten years, a basis for a sustainable operation, which considers the decarbonization move-ment of the global economies, the perma-nence of technological innovation and the in-creasingly higher requirement of the citizens regarding the quality and the effectiveness of the public services. In 2017, before the imposed challenges, we established a positive agenda based on fi nancial discipline associated with the ful-fi llment of the commitments assumed with our stakeholders and looking towards the preparation of the Company for a future sce-nario. In this context, we progressed in the creation of the Strategic Management Cabi-net (GGE), whose objective was to speed up the implementation of strategic projects for Copel, with emphasis on the cost reduction in our operations, which is aligned with the guidelines set by Aneel. 103-3 When it comes to new business, 2017 marked the formalization of the intention for partnership between Copel Holding (HOL) and Shell do Brasil for the development of a strategic plan for natural gas for the state of Paraná. The agreement seeks solutions for the supply of natural gas at competitive prices, the expansion of this market and bet-ter service to residential, commercial and in-dustrial sectors – in this case, providing the replacement of more polluting fuels, such as diesel, in the production processes. The ini-tiative is also in accordance with the Com-pany’s strategy for diversifi cation of its gen-eration park, with a portfolio of power plants that prioritize renewable sources without losing the robustness and the stability re- 102-14 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 9 quired by the national electricity sector, and which require the presence of non-interrupt- ed sources in the energetic matrix to assure its sustainable development. When it comes to our structure of whol- ly-owned subsidiaries, 2017 was marked for the incorporation of the Renewables business to Copel Geração e Transmissão. This initiative allowed us to reduce costs immediately and to gain objectivity and effectiveness in the ne- gotiations with suppliers and partners associ- ated with the implementation of farms in Cu- tia Wind Complex, in Rio Grande do Norte. In a period focused on the delivery of works in progress and selective participation of the company in tenders with good com- mercial conditions within the captive market, Copel Comercialização redefi ned its operation strategy aiming at the potential growth of the Company in the free market. For Copel Telecomunicações, the avail- ability of the mobile application for our new residential customers and small and medi- um-sized company customers stood out in 2017, making access to our services easier. We also consolidated our presence in 399 municipalities of the state of Paraná, where we reached the mark of 32,422 km in optical fi ber cables at the end of the year. Regarding Distribution, highlight was the confi rmation of our presence in the market as the best distributor in Brazil and Latin America, through the Abradee Award (winner for the 6th consecutive year) and the award offered by the Regional Power Integration Committee (CIER). In Governance, the closure of the fi rst year of creation of the Governance, Risk and Compliance Offi ce, made us confi rm that pio- neering assumed by Copel among the state- owned companies in the fulfi llment of Law No. 1,303/2016, brought concrete results for the Company’s day-to-day operations. The ini- tiatives developed during the year were recog- nized by Fundação Getulio Vargas, which iden- tifi ed us as the state-owned company most aligned with the requirements in the new law. In People Management, the highest result measured in 2017 was Copel´s entry in the list prepared by Você S/A magazine with the 150 best companies to work. This recognition made us be sure that we are on the right way to guarantee better working conditions and quality of life for the “copelians”. The mainte- nance of the Encouraged Retirement Program also enabled us to keep the alignment with 10CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXour employees´ expectations, associated with the implementation of actions that guide the Company towards an environment of higher competitiveness and renewal of the human capital. For us it is clear that the development of work force also passes through valuation of diversity. We kept the Standing Diversity Committee active in order to reinforce the Company’s commitment to the subject, be-ing responsible for the implementation of an agenda focused on promotion of inclusive practices aligned with the Sustainable Devel-opment Goal (SDG 5).Looking into the future of the power sector, we understand that investments in Research and Development and Innovation are essential for our market positioning within a long-term per-spective. As we are holders of a recognized and valued brand in the state of Paraná, we know that our actions must progress together with the change in the behavior of the consumer market. Initiatives, such as distributed generation, elec-tric mobility and power storage, indicate that the market is in constant transformation, directing to new forms of operation, especially regarding ser-vice provision. The transformation process in the sector is refl ected in Public Inquiry 33, which pro-poses, in addition to the Eletrobras privatization process, creation of a new regulatory milestone, which provides structural and conjectural chang-es, highlighting the possibility to open the free market for all consumers.Copel remains in the Portfolio of the B3 Corporate Sustainability Index (ISE) 2018. This is the 12th time the Company is a part of the portfolio since it was created by B3 in 2005. This recognition indicates that we are on the right way in relation to adoption of good practices in corporate governance and sustainability. We know that the main-tenance of the Company in the index pass-es through implementation of continuous improvement actions, which comprehend all areas of the Company. Still regarding the commitment assumed by the Company with the Global Compact, we also increased our support to the process of implementation of Sustainable Development Goals (SDG) in the south region of the Country, accepting the invitation to coordinate the regional of-fi ce of the Global Compact Cities Program. It was another recognition of the alignment be-tween our voluntary initiatives and the Com-pany’s mission and vision. Have a good reading.Executive BoardCONTEXT OF THE SECTOR11CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIX12CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXThe year was marked by the end of re-cession period, although economy has still registered refl ections from the crisis, with in-terruption of public services due to lack of re-sources and the critical situation of the public accounts in some states. The Brazilian econo-my, after accumulating 7.0% decrease in GDP between 2015 and 2016, showed signs of re-covery as of the last quarter 2016, which was consolidated in the fi rst half-year 2017.Positive results were also recorded in power transmission and generation tenders carried out by the National Electric Pow-er Agency (Aneel). The A-4 power gener-ation tender held in December had higher demand than expected and ended with an investment forecast at BRL 13.9 billion in power plants for new energy, which will be provided as of 2021. Totally, 2.93 GW were contracted. In December, the second trans-mission tender of the year was carried out, which received offer for the 11 offered lots, with discount of up to 50%. The investment forecast is BRL 8.7 billion. In April, 31 out of the 35 lots offered by Aneel were sold, totaling an investment forecast at BRL 12.1 billion. The next tender scheduled by Aneel to April 2018 will be for purchase of electric power as of 2022 (A-4). From the regulatory point of view, in 2016, with the change of ownership of the federal government, it was possible to see a change in the way of conduct-ing the policies aimed at the electricity sector in the country, which was less in-terventionist and seeking to improve the business environment in order to attract new investments in the sector. An ex-ample of this new guideline was the ap-proval of Law 13,303/2016, which comes from Provisional Measure No. 735/2016.In general, the new law aims to facil-itate the privatization processes, reduce bureaucracy in tenders and the Federa-tion´s costs for subsidies to utility com-panies, allowing privatization of state dis-tributors, which were federalized. Totally, twelve standards in the industry were changed, including Law No. 10.848/2004, considered as the legal milestone of the “new model” of the Brazilian electricity sector. Generically, the new regulation shows to the market the intention of the federal government to reduce the judicial involvement in the sector and present mechanisms to solve problems.In the progress of these changes, in 2017, Public Inquiry No. 33/2017 was opened, aiming to improve the legal milestone in the sector. After a period for submission of contributions by the agents, the Ministry of Mines and En-ergy prepared a document with a set of proposals to be submitted to the National Congress. Among the issues submitted by the Ministry, there are improvements in pricing and functioning of the market, internalization of environmental external-ities associated with emissions, separa-tion of ballast and power, expansion of the free market and changes in the al-location of risks of dispatch decisions in regulated contracts.For consumers, in December, Aneel an-nounced news for 2018: from January 1st, consumers with a monthly average above 500 kWh will be able to adhere to the new rate model. The purpose is to enable con-sumers to change the power consumption time and thus, reduce their costs. The perspectives of the sector for 2018 indicate a new period with low volume of rain, which, with cost at about BRL 16 billion in subsidies, might generate increase in the rates. From 2014 to 2017, the power rate increased by 31.5% average.BRL 13.9 billionIN POWER PLANTS FOR NEW ENERGY, WHICH WILL BE PROVIDED AS OF 2021COPEL EM COPEL IN NÚMEROS NUMBERS SOBRE O ABOUT RELATÓRIO THE REPORT MENSAGEM DA MESSAGE FROM ADMINISTRAÇÃO THE PRESIDENT CONTEXTO CONTEXT OF DO SETOR THE SECTOR SOBRE A COPEL ABOUT COPEL AND E MODELO DE NEGÓCIOS BUSINESS MODELS GOVERNANÇA CORPORATIVA CORPORATE GOVERNANCE CONTEXT – OPERATION OF THE BRAZILIAN ELECTRIC SECTOR SUSTENTABILIDADE SUSTAINABILITY CAPITALS CAPITAIS SUMÁRIO GRI CONTENT DA GRI INDEX ANEXO APPENDIX 13 Who are the major players on the market of electric power in Brazil. HOW ENERGY SUPPLY WORKS PLAYERS CNPE National Policy and Energy Council CMSE Monitoring Committee of the Electric Sector MME Ministry of Mines and Energy EPE Energy Research Company ANEEL National Eletric Energy Agency 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. Government Fees and taxes Electricity Bill Remuneration as per auction contract Remuneration for services and transmission Revenue from Distribution Service Quota A Quota B Purchase of electricity Operating costs Transmission Depreciation quota GENERATION TRANSMISSION DISTRIBUTION CONSUMER Fees and taxes Return on investment ONS Controls power generation AUCTION FOR POWER SUPPLY MME • defi nes price cap ANEEL • promotes auctions CCEE • operationalizes Indicates the amount of energy Destination: Generation. Transmission and government Destination: Distribution Total Electricity Bill = Quota A + Quota B y e n o M w o fl y g r e n E w o fl g n i t c a r t n o C i s m s n a h c e m , n o i t a u g e r l i , n o s s e c n o c f o l e v e L g n i r o t i n o m d n a i l g n n n a p , n o s v r e p u s i i i s e c v r e s f o l e v e L s t n e g a d n a ONS National Operator of the Electric System CCEE Electric Power Marketing Chamber FREE MARKET: Free consumers buy energy directly from generators or distributors through bilateral agreements with freely negotiated conditions, such as pri- ce, 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). CNPE: Defi nes the country’s energy policy with the purpose of ensuring stability in energy supply. MME: Responsible for planning, management and development of the le- gislation 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 defi nes the transport and consumption ra- tes and ensures economic and fi nancial balance of the concessions. ONS: Controls the operation of the National Interconnected System (SIN) so as to optimize energy resources. Money fl ow Energy fl ow Energy fl ow 1 y t i l i i b s s o P 2 y t i l i i b s s o P CCEE: Manages transactions of the energy market and conducts the offi - cial auctions. Money fl ow Government Sector Charges Payment for transmission services Remuneration for distribution services GENERATION TRANSMISSION DISTRIBUTION CONSUMER FREE OR SPECIAL TRADER Agreements to supply power via trader 14CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXABOUT COPEL AND BUSINESS MODELS DISTRIBUTION GENERATION AND TRANSMISSION COMMERCIALIZATION TELECOMMUNICATIONSCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 15 Copel operation map 102-6 GO MA RN THE PRESENCE OF COPEL IN BRAZILIAN STATES Copel was founded on 10/29/1954 in the form of a quasi-public company, controlled by the State of Paraná. Currently, Copel´s shares are negotiated on B3 and the stock exchanges in New York and Madrid, 102-5 Copel is the largest company in Paraná, with headquarters in Curitiba (PR), and opera- tions in ten Brazilian states (See map beside). Its business is composed of power transmis- sion, distribution, and sale, in addition to tele- communications and natural gas. The electri- cal system of the Company is composed of its own power generation complex of power plants, transmission lines, substations, elec- trical lines and grids from the distribution system, and a modern optical telecommu- nication system, which integrates all cities in Paraná. In the power segment, the main cus- tomers are consumers from the regulated market (residences, industry and commerce) and consumers from the free market (indus- try and commerce), regulated and inspected by Aneel. Copel Telecomunicações works ex- clusively on retail (See operation map of Co- pel Telecomunicações on page 16). 102-2, 102-3, 102-4, 102-6 TRANSMISSION LINE HYDROELECTRIC PLANT SUBSTATION WIND FARM DISTRIBUTION LINE OPTICAL FIBER LOOP MT PR RS BA MG SP SC COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 16 Copel Telecomunicações operation map LONDRINA MARINGÁ CASCAVEL PONTA GROSSA CURITIBA COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 17 Ethics Result of a collective agreement which sets aligned to a common goal individual behaviors. Respect for People Consideration of for others. Dedication Ability to engage in intense and completely at work contributes to the achievement of orga- nizational goals. Transparency Accountability of decisions and accomplish- ments of the company to inform their positive or negative to all stakeholders aspects. STRATEGIC OBJECTIVES 103-1, 103-2 In December 2017, the Board of Directors approved the Strategic Planning for the ten-year period 2018-2027. According to the strategic references, the planning was defi ned focused on sustainability of Copel´s business and the trends of the na- tional and the global electric sector, guiding the Company to- wards technological innovation and provision of new services. The corporate strategic guidelines are presented in the chart below: CORPORATE STRATEGIC GUIDELINES • Value the work force • Retain talents and knowledge Safety Healthy work environment in which employees and managers collaborate to use a process of continuous improvement of the protection and promotion of health, safety and welfare of all. • Expand the business in a sustainable and profi table way • Obtain excellence in costs, processes and quality Accountability Conduct of life sustainably company, respect- ing the rights of all stakeholders, including fu- ture generations and commitment to support all forms of life. Innovation Application of ideas in processes, products or services in order to improve something exist- ing or build something different and better. • Promote synergy among the different areas of the Company • Invest in research, development and innovation with value added For wholly-owned subsidiaries, the guidelines are stated in the respective business models presented on page 20. STRATEGIC OBJECTIVES AND GUIDELINES STRATEGIC OBJECTIVES AND GUIDELINES 102-16 Copel´s management is based on the guide- lines set in its mission, vision and values, which guide its actions and decision-making as follows: Mission To supply electricity and solutions to promote sustainable development Vision To be a benchmark in our business segments by generating sustainable value. Core Values A set of beliefs and premises underpinning Co- pel’s strategic, organizational and people man- agement, guiding all its internal and external decisions and the behavior of its members. SHAREHOLDING STRUCTURE 3STATE OF PARANÁ58.63% Voting 31.07% TotalBNDESPAR26.41% Voting 23.96% TotalFREE FLOAT13.68% Voting 44.17% TotalELETROBRAS1.06% Voting 0.56% TotalBM&FBOVESPA12.85% Voting 31,29 TotalNYSE0.79% Voting 12.10% Total(1) COPELGERAÇÃO E TRANSMISSÃO S.A. 100.0%(1) COPELDISTRIBUIÇÃO S.A. 100.0%(1) COPELTELECOMUNICAÇÕES S.A.100.0%(1) COPELRENOVÁVEIS S.A.100.0%(1) COPELCOMERCIALIZAÇÃO S.A.100.0%(4) DOMINÓ HOLDINGS S.A.49.0% Total(1) CUTIA EMPREENDIMENTOS EÓLICOS SPE S.A.100.0%(1) SÃO BENTO ENERGIA100.0%CENTRAL GERADORAEÓLICA SÃO BENTO DONORTE I S.A.100.0% Total(2) UEG ARAUCÁRIA LTDA.60.0% Total(4) MARUMBITRANSMISSORA DE ENERGIA S.A.80.0% Total(4) COSTA OESTETRANSMISSORA DEENERGIA S.A.51.0% Total(4) MATA DE SANTAGENEBRA TRANSMISSÃOS.A.50.1% Total(4) GUARACIABATRANSMISSORA DEENERGIA (TP SUL) S.A.49.0% Total(4) MATRINCHÃTRANSMISSORA DEENERGIA (TP NORTE) S.A.49.0% Total(4) INTEGRAÇÃOMARANHANSE TRANS. DEENERGIA S.A.49.0% Total(4) CAIUÁ TRANSMISSORADE ENERGIA S.A.49.0% Total(4) CANTAREIRATRANSMISSORA DEENERGIA S.A.49.0% Total(4) PARANAÍBATRANSMISSORA DEENERGIA S.A.24.5% Total(4) TRANSMISSORA SULBRASILEIRA DE ENERGIA S.A.20,0 Total(5) UHE GOVERNADORJAYME CANET JÚNIOR(MAUÁ)51.0% Total(5) UHE BAIXO IGUAÇU30.0% TotalGE OLHO D’ÁGUA S.A.100.0% TotalGE BOA VISTA S.A.100.0% TotalGE FAROL S.A.100.0% TotalGE SÃO BENTO DO NORTE S.A.100.0% TotalLATIBEX0.00% Voting 0.05% Total(1) NOVA EURUS IVENERGIAS RENOVÁVEIS S.A.100.0%(1) NOVA ASA BRANCA IENERGIAS RENOVÁVEIS S.A.100.0%(1) NOVA ASA BRANCA IIENERGIAS RENOVÁVEIS S.A.100.0%(1) NOVA ASA BRANCA IIIENERGIAS RENOVÁVEIS S.A.100.0%(1) VENTOS DE SANTO URIEL S.A.100.0%(1) SANTA MARIA ENERGIASRENOVÁVES S.A.100.0%(1) SANTA HELENAENERGIAS RENOVÁVEIS S.A.100.0%CENTRAL GERADORAEÓLICA SÃO BENTO DONORTE II S.A.100.00% TotalCENTRAL GERADORAEÓLICA SÃO BENTO DONORTE III S.A.100.0% TotalCENTRAL GERADORAEÓLICA SÃO MIGUEL I S.A.100.0% TotalCENTRAL GERADORA SÃO MIGUEL II S.A.100.0% TotalCENTRAL GERADORA SÃO MIGUEL III S.A.100.0% TotalUSINA DE ENERGIA EÓLICACUTIA S.A.100.0% TotalUSINA DE ENERGIA EÓLICAGUAJIRU S.A.100.0% TotalUSINA DE ENERGIA EÓLICAJANGADA S.A.100.0% TotalUSINA DE ENERGIA EÓLICAMARIA HELENA S.A.100.0% TotalUSINA DE ENERGIA EÓLICAPOTIGUAR S.A.100.0% TotalUSINA DE ENERGIA EÓLICAESPERANÇA DO NORDESTE S.A.100.0% TotalUSINA DE ENERGIA EÓLICAPARAÍSO DOS VENTOS DONORDESTE S.A.100.0% Total(2) ELEJOR - CENTRAISELÉTRICAS DO RIO JORDÃO S.A.70.0% Total(2) COMPANHIAPARANAENSE DEGÁS-COMPAGAS51.0% Total(2) UEG ARAUCÁRIA LTDA20.0% Total(3) CARBOCAMPEL S.A.49.0% Total(3) COPEL AMEC S/C LTDA.(Em Liquidação)48.0% Total(3) SERCOMTEL S.S.TELECOMUNICAÇÕES45.0% Total(3) FOZ DO CHOPIMENERGÉTICA LTDA.35.8% Total3) DOIS SALTOS EMPREEN.DE GERAÇAÕ ENERGIAELÉTRICA LTDA.30.0% Total(3) DONA FRANCISCAENERGÉTCA S.A.23.0% Total(4) VOLTALIA SÃO MIGUELDO GOSTOSO IPARTICIPAÇÕES S.A.49.0% Total(4) PARANÁ GÁSEXPLORAÇÃO E PRODUÇÃO30.0% TotalOTHER SHAREHOLDERS0.22% Voting 0.23% Total 102-45 (1) Wholly-owned subsidiary(2) Associated companies(3) Affi liated companies(4) Jointly-held companies(5) Consortiums3 Organizational chart of the shareholding structure on December 31, 201718CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 19 STRATEGIC RISKS OF COPEL´S BUSINESS 102-15 STRATEGIC RISKS In addition to the Integrated Corporate Risk Management Policy and the legisla- tion in force in the Country, the Compa- ny´s risk management respects recog- nized structures and standards, such as Committee of Sponsoring Organizations of the Treadway Commission (COSO) and ISO 31000, applying them to the corpo- rate areas, their wholly-owned subsidiar- ies and controlled, jointly controlled and colligated companies. Aligning risk management and good social-environmental practices, the Com- pany´s principle is to conduct its actions with responsibility and contributing to the creation value for all stakeholders. In ac- cordance with this principle, the risk man- agement model adopted by the Company considers legal, regulatory, social-environ- mental and reputational aspects to sup- port the decision process and the per- formance of operational activities. In the model, the criteria for risk classifi cation, the possibility of occurrence and the gen- erated impacts are equally defi ned, which provide tools for its preventive and miti- gating handling. 102-11 At the end of 2017, Copel reviewed the strategic risks associated with its opera- tions, linking them to the Strategic Planning 2018-2027. The work consisted in identifi ca- tion and analysis of the risks, defi nition of control and contingency plan, and establish- ment of monitoring actions. The chart below demonstrates the risks Copel is exposed to: CORPORATE RISKS: • Judicial liabilities; • Information security (cybersecurity); • Fraud/corruption in the operations; • Loss of knowledge; • Credit and liquidity risk; and • Innovation and technology. The risks associated with the Copel´s wholly-owned subsidiaries are reported in the business models presented on page 20. Further information about the compa- ny´s risks are available in Form 20-F and on link. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 20 BUSINESS MODEL BUSINESS DEVELOPMENT COPEL DISTRIBUIÇÃO INPUTS PER CAPITAL Copel Distribuição S.A is public service provider of electric power distribution, upon concession from the Federal Government and its activities are: • Provide public service for electric power distribution and correlated services; and • Study, plan, design, implement, operate and maintain electric power distribution systems. In 2017, 4,561,484 customers were served (residential, industrial, commercial, rural and others – public authorities, street lighting, pubic services and own). STRATEGIC DIRECTIVES OF COPEL DISTRIBUIÇÃO FINANCIAL • R$ 469 million invested • R$ 406 million cost SOCIAL AND RELATIONSHIP • Customer satisfaction management • Relationship channels (customers, suppliers, communities, body regulator and employees) NATURAL • 5,239,850 liters of fuel • 25,983.115 GWh of purchased power HUMAN INFRASTRUCTURE • 5,746 own employees • 6,167 outsourced workers • 369 substations • 196,951.2 km of distribution lines and grids • 156 fi xed assets • 2,049 vehicles own fl eet INTELLECTUAL • R$ 18 million invested MAINTAIN THE CONCESSION PRIORITIZE PEOPLE • Serve the customers with excellence • Keep the economicfi nancial balance of the concession • Renew and modernize the • Develop talents and retain knowledge • Promote actions to improve the quality of the employees´ life CONTRIBUTE TO SUSTAINABLE DEVELOPMENT OF THE STATE OF PARANÁ • Guide about safe and rational use of electric power • Promote actions of social interest aligned to our business • Invest in innovation and new concession assets • Look after work safety technologies STRATEGIC RISKS: • Loss of concession • Regulatory instability • Technological downgrade • Severe weather adversity • Failure to meet the quality criterion of the concession contract • Failure to meet the economic-fi nancial effi ciency criterion of the concession contract. GENERATING SHARED VALUE FOR: HOLDING SUPPLIERS EMPLOYEES CUSTOMERS COMMUNITY REGULATING BODIES • EBITDA R$ 573.1 million • R$ 198 million contracted volume APPENDIX • 81% satisfaction • 191 thousand training hours • 918 million salaries and benefi ts • Aneel satisfaction index – 80.69 (1st place) • Perceived Quality Satisfaction Index (ISQP): 90.3 (1st place) • 1.818 volunteer hours • 95,910 benefi ciaries in lectures at schools, associations and non-profi t institutions • 92.84 (1st place): Abradee Social Responsibility Award • Equivalent Duration per Consumer – DEC: 10,46 • Equivalent Frequency per Consumer – FEC: 6.83 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 21 BUSINESS MODEL COPEL GERAÇÃO E TRANSMISSÃO INPUTS PER CAPITAL BUSINESS DEVELOPMENT Copel Geração e Transmissão S.A. (Copel G&T) is a non-traded corporation, wholly-owned subsidiary of Companhia Paranaense de Energia (Copel), which works with state-of-art technology in the power generation and transmission areas. It operates an electric system with power plant generating park (Hydroelectric, Thermoelectric and wind power plants), transmission lines and substations, including in partnership with specifi c purpose companies. STRATEGIC DIRECTIVES OF COPEL GERAÇÃO E TRANSMISSÃO EXPAND THE SHARE ON THE GENERATION AND TRANSMISSION MARKET IN A SUSTAINABLE AND PROFITABLE WAY INVEST IN INNOVATION, SEEK THE BEST PRACTICES AND RESEARCH NEW TECHNOLOGIES RENEW AND MODERNIZE THE ASSETS WITH LONG-TERM VISION GENERATING SHARED VALUE FOR: HOLDING • EBITDA R$ 1,816 million SUPPLIERS • ACB4 – Copel G&T – 122.8 million and Wind – 22.4 million • AIB5 – Copel GeT – 696.3 million and Wind – 473.5 million • AIB – Share – 248.2 million MAXIMIZE THE PROFITABILITY OF THE POWER COMMERCIALIZATION OPTIMIZE THE CONCESSION RESOURCES KEEP THE CONCESSIONS AND THE AUTHORIZATIONS EMPLOYEES • 190,256 training hours TRAIN AND QUALIFY THE EMPLOYEES CONTINUOUSLY RETAIN KNOWLEDGE LOOK AFTER LABOR SAFETY COMMUNITIES • R$ 22.2 million applied in social actions and cultural, sports projects, etc. CUSTOMERS • 19,866,907.902 MWh generated power • Loss of concession • Regulatory instability • Insuffi cient level of expansion to assure the • Drop in the business profi tability company´s sustainability • Drop in the project profi tability (new business) STRATEGIC RISKS • Hydrological Risk 4ACB - Annual Cost Budget 5AIB - Annual Investment Budget HUMAN INFRASTRUCTURE NATURAL • Generation: 880 own employees • Transmission: 647 own employees • 17 Hydroelectric • 1 Thermoelectric Plant • 11 Wind farms • 2,699 Km transmission lines • 36 Basic Grid substations • 78,077 tons of coal • Water: 1.26 m³/s per kWh SOCIAL AND RELATIONSHIP • R$ 6.07 million invested FINANCIAL • R$ 1,071.3 million invested INTELECTUAL • R$ 18.5 million invested and RD&I COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITAIS CAPITALS GRI CONTENT INDEX APPENDIX 22 BUSINESS MODEL COPEL COMERCIALIZAÇÃO BUSINESS DEVELOPMENT Copel Comercialização S.A is a wholly-owned subsidiary of Copel responsible for the power commercialization on the free market. INPUTS PER CAPITAL STRATEGIC DIRECTIVES OF COPEL COMERCIALIZAÇÃO FINANCIAL SOCIAL AND RELATIONSHIP • R$ 66.3 million subscribed and paid off capital stock • Relationship with free customers, consumers, power sellers and generators INTELLECTUAL • Team with expertise in purchase and sale of power, competitive intelligence, price studies 5 HUMAN INFRASTRUCTURE NATURAL • 38 own employees • Commercalization management system • Mobile app • Measuring System (MEC) • Commercialization website • Consumption of water and power (adminitrative) • Commercialization of incentive power (renewable sources) • Be among the 5 largest companies in Brazil in the operation branch until 2025 • Be recognized by the market (generators and purchases) for excellence in attending and provided services by 2025 • Have engaged and entrepreneur work force STRATEGIC RISKS (RELATED TO PURCHASE AND SALE OF POWER) • Financial exposure of the purchase and • Non-involvement of a sale operations • Default • Increase of competition commercialization culture • Regulatory • Economic instability GENERATING SHARED VALUE FOR: HOLDING • Net profi t R$ 13 million CUSTOMERS • 249 customers in 15 states • 507 contracts for sale of power • 206.44 MW average of incentive power (renewable sources) purchased and sold • 401.15 MW average of conventional power purchased and sold EMPLOYEES • Collaborators Satisfaction COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 23 BUSINESS MODEL BUSINESS DEVELOPMENT COPEL TELECOMUNICAÇÕES The Copel Telecomunicações INPUTS BY CAPITAL INTELLECTUAL • Business knowledge • Alignment to the best international Telecom practices • Management Excellence Model - MEG • Balanced Scored Card – BSC SOCIAL AND RELATIONSHIP • Recognition of the brand in the state of Paraná and Brazil • Shareholders´ trust • Relationship with customers: development and maintenance of multiple relationship channels NATURAL • Water consumption: 665 m³ • Power: 674.6 MWh • Fuel: 231 thousand liters (alcohol + diesel + gasoline) • Batteries: 7,300 individual battery elements FINANCIAL INFRASTRUCTURE HUMAN • Result from the operations reinvested in the business • Financing with External Resources • Backbone • Servers • Operation network • Operation center • Specifi c systems, including data security and protection • Posts and towers • 649 own emplyees Purpose: • To increase the market share with value added to the customer in an innovative and sustainable way • To be a benchmark of Anatel´s quality requirements until 2020 Business strategy: • To maximize the Company´s value in a Sustainable way through increase of sales of current products and services, and increase of value added, effi ciency and integration of the processes with mass gain GENERATING SHARED VALUE FOR: STRATEGIC DIRECTIVES OF COPEL TELECOMUNICAÇÕES • Develop potential markets from • Expand the provision of services with HOLDING service innovation and excellence; high value added and availability; • EBITDA Margin - 35.14% • Increase of the Gross Operational Revenues by 19%. • Telecom Yearbook: ten most profi table in the sector for the fourth consecutive year and highlight in the data center and collocation segment (Fórum Editoria and FGV). • Innovation, synergy and value added to the customers from integration of telecommunication and information technology; • Administer the supply chain and the relationship with suppliers, aligning values, quality and performance; • Guarantee valuation and perspective professional to the Telecom employees with development of competences and motivation for high performance; • Speed up the decision process and the service provision to the customers to increase the delivery of value and the business performance POSITIVE IMPACTS: • Increase of Sale Value Added Products and Services • Assure the quality of the attendance and the provided service • Assure the capacity of investment and liquidity for profi table expansion • Contribution to the social and the economic development of Paraná • Optimization of the costs and increase of productivity due to cost administration by process and guiding factor RISKS ASSOCIATED TO THE DIFFERENT ACTIVITIES: • Restriction of available funds for investment plan. • Regulatory quality requirements. • Technological obsolescence of the products. SUPPLIERS • 38.35% of the contracted amounts are from suppliers in Paraná (66.27% of total suppliers). • Involvement of suppliers and partners in sustainability programs. EMPLOYEES • 40,573 hours training • 81% satisfaction (survey 150 Best Companies to Work) • SCM 4 - Contracted Guaranteed Instantaneous Speed ( 95%): 95.44% • SCM 5 - Contracted Guaranteed Average Speed: (95%): 100% • SCM 9 - Availability Rate (99%): 99.99% • SCM 10 - Service rate up to 20s (85%): 86.69% CUSTOMERS • SCM 14 - Subscriber response rate (95%): 98.52% • Telesynthesis Annual Award - Innovation category. • Best fi xed line broadband operator in Paraná 2016 (consumers´ perception) • Fastest Internet in Brazil (by Portal Minha Conexão). • It is among the 10 Best Companies in Administration 2017 of FNQ. • Availability of high-quality data link in all state schools (SDG 4) • Maintenance of the customer base of the Connected Paraná Program (SDG 1, SDG 8, SDG 10) • Social actions in network (SDG 16 and SDG 17) with suppliers, business partners, COMMUNITIES volunteers from Copel and other companies • Internet Sem Bulling Project (SDG 4 and SDG 5) • Social inclusion by means of availability of data and Internet infrastructure for governmental initiatives, such as Justice in the Neighborhood, Paraná Citizen, Mass Action for Civil Awareness, among others. (SDG 10, SDG 16 and SDG 17) CORPORATE GOVERNANCE24CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 25 Copel´s Corporate Governance model is based on the principles of transparency, equity, accountability and corporate respon- sibility, following the best market practices and seeking the best results for the stake- holders. The adopted corporate governance practices comply with the requirements es- tablished for companies listed at B3 Corpo- rate Governance Level 1 and are referenced to the Code of Best Practices in Corporate Governance from the Brazilian Institute of Corporate Governance (IBGC), meeting the provisions in Law No. 13,303 dated 2016, CVM Instruction 586 dated 2017 and applica- ble legislation. 103-1 For the Company to be permanently guid- ed by ethical principles, all those working on its behalf are governed by a Code of Con- duct developed according to Copel’s values, the Principles of the Global Compact, and the Principles of Corporate Governance. 103-2 The adopted corporate governance practices comply with the requirements established for companies listed at B3 Corporate Governance Level 1 Learn about the governance practices and policies that guide the Company’s management: CORPORATE GOVERNANCE POLICY GOVERNANCE PRACTICES CODE OF CONDUCT GOVERNANCE, RISK AND COMPLIANCE MANAGEMENT GOVERNANCE STRUCTURE 103-2, 103-3 The Governance, Risk and Compliance Management (DRC) works with the Compa- ny’s areas to improve the governance prac- tices seeking the best results for the stake- holders. 103-2 In compliance with the Corporate Bylaws, Copel´s administration is organized in a structure formed of four permanent decision-making bodies with different levels of responsibility, assisted by technical committees. 102-18 COPEL´S GOVERNANCE STRUCTURE HOLDINGGeneral Shareholders’ MeetingBoard of DirectorsAudit CommitteeInternal AuditLegal and Institutional Relations Offi ce Business Development Offi ce Governance, Risk and Compliance Offi ceChief Executive Offi ceFiscal Council Board Ethical Orientation Committee Executive Board26Committee Disclosure of Relevant Acts and FactsFinance and Investor Relations Offi ceCorporate Management Offi ceCONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIX.COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 27 GENERAL SHAREHOLDERS´ ASSEMBLY MEETING The General Shareholders´ Assembly Meeting is re- sponsible to defi ne the guidelines of the Company´s business and take strategic decisions. It is formed by shareholders with eligible to vote, gathering in an ordi- nary meeting in the fi rst four months every year, and ex- traordinarily, on any date, whenever necessary. BOARD OF DIRECTORS – CAD The Board of Directors is deliberative body, respon- sible to defi ne the general guideline of the Company in conformity with the competences set forth in Copel´s Corporate Bylaws and in CAD Internal Regulation, which provides the actions in cases, involving confl icts of inter- est. In case any confl ict situation is identifi ed, the fact is publicly reported in the minutes of meeting of the Board of Directors. No cases of such nature were identifi ed in 2017. 102-25, 102-26 It is composed of nine members, seven of them independent, indicated and elected according to the rules provided in the legislation in force, Law No. 6,404/1976, Law No. 13,303/2016 and the normative deliberations of the State Company Control Coun- cil (CCEE), in addition to compliance with Rule 10A-3 of the Securities Exchange Act. The board members are elected for two-year mandate with possibility for re-election. The Company´s Director President is for- bidden to perform the function of President of the Board of Directors. 102-22, 102-23 COMPOSITION OF THE BOARD OF DIRECTORS: Profi le of the members of the governance bodies according to criteria of diversity 405-1 Five members representing the State of Paraná, majority shareholder of the Company; Percentage of representatives of the governance bodies (by gender) Two members of BNDES Participações S.A. – BNDESPAR, as provided in the shareholders´ agreement signed with the State of Paraná; One member representing the employees, elected in the terms of the pertinent state legislation State Law 8,096/1985, regulated by Decree No. 6,343/1985 and State Law No. 8,681/1987; and One member representing the majority shareholders, in the terms of article 239 of the Corporation Act.6 Men Women Total Percentage of representatives of the governance bodies (by age range) Under 30 years old Between 30-50 years old Above 51 years old Total 2017 2016 2015 84% 16% 95% 97% 5% 3% 100% 100% 100% 2017 2016 0% 28% 72% 0% 20% 80% 100% 100% 6Election is done separately (the controlling shareholders cannot vote), considering that shaholders of ordinary and preferential shares are entitled to vote, and the candidate, who obtains the highest percentage representation of the stock capital of the Company is considered elected, without minimum limit. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 28 FISCAL COUNCIL A permanent body, which analyzes and issues opinions on the fi nancial statements and inspects the administrators´ acts re- garding their legal and statutory duties. It is formed by fi ve members and the same number of deputies, elected by the Ordinary General Shareholders´ Assembly Meeting for annual mandate with possibility to be re- elected. 102-22 STATUTORY AUDIT COMMITTEE Independent consulting and permanent body that assists the Board of Directors, com- posed of fi ve members, most of them inde- pendent, selected among the Administration Board members, as provided in Rule 10A-3 of the Securities Exchange Act, for two-year mandate. One of the members of the Audit Committee shall have recognized experience in corporate accounting subjects in compli- ance with Art. 25 of Law No. 13,303/2016. COPEL´S EXECUTIVE BOARD The Executive Board is responsible for executive roles and has the responsibility to represent the Company. It is composed of six members, one director president and fi ve directors, who are elected by the Board of Directors for a term of two years, consider- ing that three consecutive elections are per- mitted. The directors´ responsibilities are pre- sented individually in the Internal Regulation of Copel´s Executive Board, including the guidelines associated to social, environmen- tal and economic issues. The Company may also have a Deputy Director. 102-20, 102-26 PERMANENT COMMITTEE FOR DISCLO- SURE OF RELEVANT ACTS AND FACTS A body responsible to assist the Finance and Investor Relationship Offi ce (DFI) in the application of Copel´s Policy for Information Disclosure and Secrecy Preservation. Its members shall review and approve the infor- mation to be disclosed to the capital market by means of Quarterly Accounting Reports (ITR); Standardized Financial Statements (DFP); Reference Form (FRE); 20-F and 6-K Forms for fi le in the Securities and Exchange Commission (SEC); Relevant Factors, Notifi - cations and press-releases; Other documents of the Relationship with Investor area. 2017 the highlight was the 1st Cycle Meeting of Governance, Risk and Compliance Offi ce.29CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXINDICATION AND PERFORMANCE ASSESSMENT OF THE MEMBERS OF THE GOVERNANCE BODIES ASSESSMENT OF THE ADMINISTRATORS’ AND THE FISCAL COUNCILORS’ PERFORMANCE In accordance with the best corporate governance practices and adapting to Law No. 13,303/2016, Copel has evolved its pro-cess of assessment of the Administra-tion´s performance (Board of Directors and Executive Offi ces of the Holding and Whol-ly-owned subsidiaries), Statutory Audit Com-mittee and Fiscal Council of the Holding and Wholly-owned subsidiaries.In 2017, the assessment done by the consulting firm PricewaterhouseCoopers (PwC) considered the determinations of the Board of Directors to insert quantita-tive criteria, which represent the achieve-ment of the strategic corporate goals in the assessment of the Executive Offices and the Board of Directors of the Whol-ly-owned subsidiaries, according to the strategic planning set by means of corpo-rate management contract for the year. To enrich the process, assessment by peers (directors, board members and committee members) by means of a form was also incorporated thereto. 102-28 DEVELOPMENTThe Governance, Risk and Compliance Of-fi ce promoted cycles of lectures for all Admin-istrators and councils at Copel and its partici-pations, aiming to improve their performance and uniformize the comprehension of the risks and prevention options. In 2017, the two Meetings of the Lecture Cycle destined to Copel´s high administration shall be highlighted. The fi rst about “compli-ance”: “How to protect against New Risks”, with brief contextualization about the Bra-zilian Anti-corruption Act (Federal Law No. 12,846/2013). The second approached the top-ic “Risk Management and Internal Controls”.INDICATION AND NOMINATION PROCESSCopel observes the Corporate Gover-nance principles and it is in process of adapta-tion to the provisions in Law No. 13,303/2016, State Decree No. 6,263/2017 and the nor-mative deliberations of the State Company Control Council (CCEE). We highlight the im-provement of the process of nomination and evaluation of the members of the governing bodies. In addition to the minimum require-ments required by applicable legislation and the Company’s Bylaws, the criteria and guide-lines established in internal policies are ob-served. Applicants must submit the CVs and other relevant documents such as clearance certifi cate, based on Article 147, § 4, of Law 6,404/1976; declaration of professional ex-perience and academic training compatible with the performance of the duties to be per-formed. In addition, they undergo compliance analysis performed by the Board of Gover-nance, Risk and Compliance of Copel, after the background check, which verifi es any ele-ments that prevent the election of nominees. Currently, Copel does not adopt criteria to pro-mote diversity in the nomination and election of members of the governing bodies.COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 30 INTEGRITY PRACTICES In 2017, the Company published its Integ- rity Program, a set of internal mechanisms for integrity, ethics, transparency, risk man- agement, internal controls, compliance, in- ternal audit and application of the Code of Conduct, which shall be complied with by all employees, administrators and fi scal board members. The purpose is to prevent, detect and remedy possible acts with impact on the Company. The initiative provides Copel´s com- pliance with Law No. 13,303/2016, which will enter into force in June 2018. 103-3, 205-1 INTEGRITY PROGRAM The disclosure and the dissemination of the Integrity Program are done periodically by electronic means to the entire Company. Its full content can be checked in Copel´s inter- nal and external online channels through the Compliance Portal. The following employees participated in the training available for dissemination of the Integrity Program in the period: 205-2 Code of Conduct Anti-Corruption Act State Company Law, Corporate Governance, Business Strategy, Internal Control and Strategic Business Risk Management 8,200 employees 632 employees 97 employees The Company´s Administration participat- ed in the in-person training on the Anti-Cor- ruption Act, the State Company Law, Corpo- rate Governance, Business Strategy, Internal Control and Strategic Business Risk Manage- ment, contemplating 25 members. In 2017, 117 Copel´s business partners were notifi ed about the anti-corruption mea- sures adopted by the Company, representing 10% of the total. 205-2 CODE OF CONDUCT Since 2003, Copel maintains its Code of Conduct, which is a guiding tool for the acts of all people, who perform activities on behalf of Copel, and who are responsible to comply with the provisions therein and apply, with- in their scope of responsibility, the content of the Code and to promote its disclosure, under- standing and inclusion in the daily practices. CORRUPTION RISK ASSESSMENT 103-3, 205-1 Currently, the Code of Conduct is the most relevant guiding tool for preventing and fi ghting corruption, and additionally, the Com- pany has policies and normative documents related to the topic. In the same context, the operational pro- cesses are annually assessed regarding the risks related to errors or frauds, which might interfere in the results in the fi nancial state- ments, and internal controls are established, submitted to tests by the Internal audit and the Independent Auditor, with the results re- ported to the Administration. 31CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXThe tests carried out by the Internal audit on the internal controls are done annually as of October, and they are completed with as-sessment of the severity and the magnitude of the defi ciencies upon fi ling Form 20-F in SEC (April every year).In 2017, for the effects of number of es-tablishments, business units Holding, Gen-eration and Transmission, Distribution, Tele-communications and Commercialization were considered. In the previous years, the num-ber of mapped processes to comply with the Sarbanes-Oxley Act, applicable to companies with shares listed on a US stock exchange, were taken into account. In such context, 100% of Copel´s establishments were sub-mitted to assessment of risks related to cor-ruption. The Company identifi ed 1 corruption case in the year 2017, which resulted in the dismissal of the employee. 103-3, 205-3 For 2018, Copel´s target is to implement the following initiatives:• implementation of the outsourced report-ing channel;• background check (check of criminal re-cords) for suppliers considered critical; and• training on the update of the Code of Conduct.REPORTING CHANNELSIn order to gather opinions, criticism, com-plaints, claims, reports and personal consulta-tion related to the business activities, Copel provides communication channels, presented below, which, in addition to fi ghting fraud and corruption, expand the organization’s relation-ship with stakeholders. 102-17, 103-2, 103-3 See the Reporting Channel chart:Confi dential Communication Channel – This channel is intended to receive reports and notifi cations associated with non-com-pliance with standards and laws, especially those associated with frauds or irregularities involving fi nancial, audit, or accounting issues. The channel assures protection of the per-son´s identity and answer to the report. It is available 24x7 through a toll-free number 0800 643-5665. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 32 Ombudsman’s Offi ce – There are two channels open to all people, both internal and external, to receive suggestions, complaints and reports, which are available on business days, from 8 AM to 6 PM, via toll-free number: • Ombudsman’s Offi ce Copel Distribuição, available on telephone number 0800-647- 0606 and e-mail ouvidoria@copel.com, which is also prepared to receive complaints personally or through mail sent to address Rua Professor Brasílio Ovídio da Costa, 1703, Santa Quitéria, in Curitiba - PR. Ethics Guidance Committee (COE) – Consulting body, which assesses and of- fers guidance in processes associated with the ethical conduct within the Company and has up to 90 days to provide a fi nal solution: conselho.etica@copel.com In addition to these channels, Copel is open to receive information demands, re- quests for services, criticism or sugges- tions for improvement, guidance and com- plaints from its audiences through different service channels. • Ombudsman’s Offi ce Copel Telecomuni- cações: available on telephone number 0800-649-3949 and e-mail ouvidoriatele- com@copel.com, which is also prepared to receive complaints personally or through mail sent to address Rua Emiliano Perne- ta, 756, Batel, in Curitiba – PR. Committee to Investigate Claims of Mob- bing (CADAM) – A Committee to attend and support all employees, victims of mobbing at work. The information is confi dential, and both the reporting and the reported person have the preservation of their identity guaranteed. e-mail: cadam@copel.com Number of reporting channels: • Demands handled by COE in 2017: • Reports: 17 • Inquiries: 27 Reports received by the Confi dential Communication Channel in 2017: • Grounded: 42 • Non-grounded: 24 • Reports with lack of content or insuffi cient data: 9 • Pending: 7 SUSTAINABILITY 33CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXSUSTAINABILITY MANAGEMENTIn the 13th B3 Corporate Sustainability Index(ISE) Portfolio 201834CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXThe sustainability challenges are part of Copel´s strategic framework through mission, vision, values and strategic guidelines, and are aligned with busi-ness planning, linked to the strategic goal “Improve performance in governance and sustainability”.In its ongoing search to improve the Company’s sustainability performance, in addition to managing aspects and indicators, Copel considers the expec-tations of the related parties and works to improve communication and relationship with them. For this purpose, the Company adopts the main market practices focused on: • Guide and assess performance, as well as compare practices to the global and national benchmarks: questionnaire from RobecoS-AM (Dow Jones Sustainability Index – DJSI), Ethos Indicators for Sustainable and Respon-sible Business Models and the Corporate Sustainability Index (ISE – B3).• Report Copel´s performance and engage pop-ulation: Global Reporting Initiative (GRI), Integrated Reporting (IR), Carbon Disclo-sure Project (CDP) and Global Greenhouse Gas Protocol (GHG).7 It provides the instutional investors with a more solid tool for environmental, social and governance integartion (ESG) to help them mitigate risks and increase long-term creation of value.8 The series FTSE4Good is a tool for investors prepared by the independent index-production company FTSE, composed by The Financial Times and the London Stock Exchange. This index measures the performance of the companies in the environmental, social and governance aspects.Among the achieved results, Copel´s perma-nence in the following stands out:• In the 13th B3 Corporate Sustainability In-dex (ISE) Portfolio 2018; • In Morgan Stanley Capital International En-vironmental, Social and Governance Rating (MSCI ESG Ratings)7; • In the portfolio of FTSE 4 Good Emerging Index8.VOLUNTARY COMMITMENTS 102-12 35CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXAlong its history, Copel has undertaken different voluntary commitments, which encourage generation of knowledge and sharing good practices. The main commitments undertak-en by the Company are shown below: • Global Compact • National SDG We Can Movement• Corporate Contribution to Promoting a Green and Inclusive Economy • Statement: Call for Action for Governments in the Fight against Corruption• Corporate Pact for Integrity and Fight Against Corruption• Eradication of Child, Forced or Bonded Labor• Fight against Sexual Exploitation of Children and Adolescents• Fight against Discrimination and Valuation of Diversity • Prevention of Mobbing and Sexual Harassment• Respect for Free Association and the Right to Collective Bargaining• Principles for Responsible Management Education (PRME)36CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCopel and its subsidiaries also participate in the following enti-ties: 102-13 EntitiesRepresenting companyBrazilian Association of Electric Power Companies – ABCECompanhia Paranaense de Energia – CopelBrazilian Wind Power Association – ABEEÓLICACompanhia Paranaense de Energia – CopelBrazilian Telecommunication Resources Association – ABRTELECOMCopel Telecomunicações S.A.Brazilian Association of Electric Power Distributors – ABRADEECopel Distribuição S.A.Brazilian Association of Electric Power Generation Companies – ABRAGECopel Geração e Transmissão S.A.Brazilian Association of Electric Power Transmission Companies – ABRATECopel Geração e Transmissão S.A.Brazilian Association of Independent Electric Power Producers – APINECopel Geração e Transmissão S.A.Brazilian Global Compact CommitteeCompanhia Paranaense de Energia – CopelElectric Power Commercialization Chamber – CCEECompanhia Paranaense de Energia – CopelCopel Distribuição S.A.Copel Geração e Transmissão S.A.Copel Renováveis S.A.Copel Comercialização S.A.Regional Engineering, Architecture and Agronomy Council of the State of Paraná – CREA/PRCompanhia Paranaense de Energia – CopelCopel Geração e Transmissão S.A.Copel Distribuição S.A.Copel Telecomunicações S.A.Copel Renováveis S.A.Regional Chemistry Council – CRQ – Brazilian Network Information Centre – NICCompanhia Paranaense de Energia – CopelNational Electric System Operator – ONSCompanhia Paranaense de Energia – CopelCAPITALS PERFORMANCE HUMAN CAPITAL INTELLECTUAL CAPITAL SOCIAL AND RELATIONSHIP CAPITAL NATURAL CAPITAL INFRASTRUCTURE CAPITAL FINANCIAL CAPITAL37CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXHUMAN CAPITAL38CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 39 HUMAN CAPITAL Copel considers its human capital a deter- mining factor both for the success in its busi- ness and to overcome the challenges genera- ted by the recession in the Brazilian economy in the last three years. The human capital is also responsible for the transformations in the electric sector because of new technologies, with consequent demand for new services on the market. 103-1 In the last year, one of the operation fronts was the modernization of the mana- gement with investment in the employees´ professional development, increasing the in- dividual productivity to work focused on the business sustainability and the increase of the Company´s competitiveness. The front was promotion of healthy work environment, which reinforces the people´s valuation and well-being, evidenced by Copel´s entry in the ranking of the 150 Best Companies to Work of Guia Você S/A. 103-3 The relationship between Copel and its employees is guided by the People Manage- ment and the Labor Safety and Health Policies, by the Code of Conduct and by the Copelian´s Manual. The Company´s operation is equally aligned with the fundamental conventions of the International Labor Organization (ILO), the National Declaration of Human Rights and the legislation in force. 103-2 Within the professional qualifi cation, in partnership with UniCopel, trainings are car- ried out aimed both at specifi c skills requi- red by the wholly-owned subsidiaries and skills demanded by the Company as a who- le, such as, leadership aspects. The trainin- gs have been carried out more in the for- mat of Remote Studies (EAD), in conformity with the need to reduce cost in force in the Company. 103-2 Also due to the cost-reduction program, the communication related to the Encouraged Dismissal Program (PDI) also reinforced, and in 2017, 248 professionals left based on this program. For the next ten years, the expecta- tion for retirement at Copel is the following: Percentage of employees, who can retire by functional category G4-EU15 5 years 10 years By functional category Employees Managers By region South Southeast Center-West Northeast North % % 13.44 24.52 17.58 32.03 % % 13.78 25.11 6.67 1.82 13.33 7.27 16.67 33.33 0 0 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 40 HUMAN CAPITAL HUMAN CAPITAL PROFILE Copel´s employee structure by gender and type of contract 102-7, 102-8 Copel´s employee structure 9 2017 2016 Variation 6,400 | 78% 1,845 | 22% 6,631 | 78% 1,900 | 22% -3.48% -2.89% Total 8,245 | 100% 8,531 | 100% -3.35% 9 In addition to the aforementioned employees, there are directors, advisers, trainees and third-party. Full Time Part Time 6,376 1,827 24 18 Total 8,203 42 Further information about Copel´s People Management Policy is available on the Sustainability page on the Company´s site. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 41 HUMAN CAPITAL North region Center-West Region Percentage of employees by age range Under 30 years old Between 30-50 years old Above 51 years old Total 2017 8.07% 68.07% 23.87% 100% 2016 10.05% 67.78% 22.15% 100% Total 0 55 Total employees by race and gender 405-1 Female Male South Region Southeast Region Northeast Region Total 8,163 15 12 Yellow White Indigenous Brown Black Not informed Total 74 1,589 0 126 47 9 204 5,279 9 671 211 26 1,845 6,400 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 42 HUMAN CAPITAL New hiring, dismissal and hiring and turnover rate 103-3, 401-1 Hiring Hiring rate Dismissal Turnover rate Under 30 years 30 to 50 Above 50 Men Women South Region Northeast Region Center-West Region 24 42 5 56 15 69 2 0 2.80 0.73 0.26 0.84 0.79 0.82 22.2 0 22 79 255 287 69 354 0 2 2.68 1.05 6.88 2.59 2.21 2.50 11.11 1.67 The most representative factor in the change of the functional structure was the Administration´s decision not to fi ll vacancies of dismissed employees. Considering that, it was decided to optimize the structure by me- ans of internal movement and release for re- placement of vacancies only in exceptional or legally obligatory cases. Copel keeps periodic meetings with the 19 trade unions representing the working classes that compose the structure. In these meetin- gs, subjects of mutual interests are discussed. And in october of each year, the Company´s base date, the meetings for negotiation of the Group Labor Agreement (ACT) are held. All employees are covered by a Group La- bor Agreement and have their contracts gover- ned by the Consolidation of Labor Laws (CLT). In case of just-cause fi ring, the Company ins- talls an administrative process, regulated by an internal administrative norm, which assures the employees´ right to defense. 102-41 43CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCopel recognizes diversity as a relevant aspect in the valuation of its human capital, repudiating any form of discrimination involving its employees and partners. Considering the reference position of the Company in Paraná and in the energetic sector in the Country, Copel recognizes its impact on the community, as well as its legal limitations related to the implementation of actions to priori-tize entry of minority representatives in the func-tional structure, which is provided by means of pu-blic service exam. 103-1 Copel maintains a Sustainability Policy that guides its actions; one of its pillars is respect to all stakeholders, with promotion of diversity and ethical precepts when conducting business. In 2015, the Company reaffi rmed its commitment to such issue, transforming the Temporary Commit-tee created in 2007 into a Permanent Committee for Promoting Diversity, constituted by the Hol-ding, the wholly-owned subsidiaries and Fundação Copel, which gathers twice a month to follow up the implementation of discussed actions. Copel´s communication channels also support the Com-mittee in the management of the demands on the topic. Annually, a report with the activities during the year is published and the action plan for the following years is presented. 103-3 The Diversity Program is the main initiative of the Committee, and its role is planning, exe-DIVERSITY 405-1 cution and follow-up of actions aimed to pro-motion of equal rights, opportunities and re-cognition for all. Its focus is on the vulnerable groups, subject to discrimination, especially gender, race, disabili-ty, sexual orientation, age and religion. It also se-eks to promote and support internal actions alig-ned to the public policies and movements aimed at diversity, in accordance with Copel´s values and policies. The program actions are implemented by means of partnerships with public bodies, non-go-vernmental organizations, universities and specia-lists on the topic. The entire initiative follows the Sustainable Development Goals (SDG) of the Global Compact, especially SDG 5, which provides about equality in gender and empowering women. 103-2 In 2017, ten actions were implemented by the Diversity Program, highlighting:RECOGNITION OF THE SOCIAL NAME A way to assure civic awareness, dignity of the human being, equality of the conditions for ac-cess and permanence in any social space. In May 2016, Copel set the administrative procedures ne-cessary to use the social name upon edition of its NAC 040130 – Social Name. After the implemen-tation of this initiative, four employees starting using the social name in just 18 months. 103-2 HUMAN CAPITALCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 44 HUMAN CAPITAL BENEFITS AND REMUNERATION DISABLED PEOPLE (PCD) Because it is a public company, private-pu- blic, conditioned to public service exams for hiring new employees, the Company is limited in relation to immediate compliance with Law No. 8.213/1991 (Aliquot Law). To comply with the legal obligations, Copel, upon opening of the invitations for public service exams, esta- blishes distribution of differentiated percentage for entry of disabled people in positions, which assure accessibility and safety to the new em- ployees. In 2017, the Company met 62% of the obligatory aliquot for disabled people. 103-2 RELIGION The corporate environment is composed by different groups from the society, and there, re- ligious diversity manifests, among others. The Permanent Committee for Promoting Diversity elected religion as relevant topic to be approa- ched within Civic Awareness. In this context, the intention is to promote discussions on the issue by means of lectures and other forums. 103-2 For 2018, actions are scheduled in the following operation fronts: • Course for Copel managers on gender and race and their inequality in the labor world (in person and/or EAD); • Obtaining approval from the Administration (Executive Offi ce and Board of Directors) to adopt criteria for selection aimed at raising wo- men to the Company´s high administration; • Two lectures on topics related to Diversity; • Obtaining the Seal of the Program Pro-Equity in Gender and Race of the Federal Government; • Two new support rooms for breastfeeding at Copel´s facilities; and • Communication plan related to Prevention of Sexual Harassment in the Company. Further information about the Diversity Program and Accessibility at Copel is available on the Sustainability page in the Company´s site. The employees are provided with Position and Salary Plan, which sets careers with remuneration and benefi ts compatible to the values in force on the market according to the position, the title and the education and qualifi cation level. 103-2 The Human Resources area is responsible for the management of this process, which aims to: • Identify positions and the roles necessary for the development of the Company´s activities; • Defi ne the education level required for the perfor- mance of the activities at each position and role; • • • Establish the levels of maturity and complexity of each position and role required to meet the demand of each job position; Establish rules for the functional (vertical) and sa- lary (horizontal) movement of employees; Demonstrate opportunities for career growth and development. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 45 HUMAN CAPITAL BENEFITS 401-2 O pacote de benefícios oferecidos pela Copel vai além do pre- The benefi t pack offered by Copel is bigger than that provided in the legislation in force, and it is compatible to that of the best companies. The benefi ts are granted to all employees, regardless of their working hours. To demonstrate the annual amounts received by the employe- es in fi nancial and non-fi nancial benefi ts, the Company imple- mented Copel´s Benefi t Balance (BBC), which lists the benefi ts of each employee at Copel and its wholly-owned subsidiaries in a stratifi ed way, as follows: 103-3 Meal voucher, Snack voucher, Daycare allowance, Ex- tended Maternity Leave, Extended Paternity Leave, Profi t Share (PLR), Anticipated 13th Salary, Education allowan- ce, Advanced Payment for Vacation, Vacation Allowan- ce, Flexible Working Hours, Allowance to Disabled Peo- ple, Allowance to employees with disabled dependents, Professional Rehabilitation and Re-adaptation Program, Award for Traffi c Safety, Complemented Disease allowa- nce, Chemical Dependency Program, Vaccination. Quali- ty of Life benefi ts (Internal Games, Sesi Games, Pre-Re- tirement Program, Energy and Health Space, Copel[s Choir, Working hours to practice volunteer activities, in addition to benefi ts provided through Fundação Copel (Private Social Security, Savings Plan, Medical, Hospital, Dental and Pharmaceutical Assistance Plans and Loans at lower interest rates than those on the market. Education allowance is a highlight among the Company´s benefi ts: 1,089 employees received that allowance in 2017, at the amount of BRL4,833,572.49, as follows: By gender By functional category 258 831 1,055 34 By region PATERNITY LEAVE 401-3 All own employees at Copel have the right to paternity leave. The company adopts six-month benefi t for women and up to 20 days for men. Furthermore, for women, when returning from the leave, the working time are reduced to six hours for sixty days for breastfeeding. In 2017, 263 men and 113 women used the leave, only one employee did not return after the leave period, which repre- sents 100% and 99.12% return rate, respectively. In relation to the permanen- ce at the Company twelve months after returning from leave, 278 men and 83 women remained, i.e., retention rate of 98.58% and 98.81%, respectively. REMUNERATION 102-38, 102,39, 103-3, 202-1 Within remuneration, the proportion between the total annual remuneration of the best paid individual in the Company and the average total annual remu- neration of all employees is 6.99. The variation between the lowest salary and the minimum salary10 is 1.88 for men and women11. The percentage of increased remuneration received in 2017 compared to the previous year was 9.15% for the best paid employee and 10.62% for the other employees, considering the salary, severance additional pay, group agreement, additional pay pursuant to the performed roles and integration of judicial meal allowance. About the remuneration of the outsourced work force, Copel´s suppliers shall sign Term of Awareness and Commitment, destined to assure minimum remune- ration standards and observe the working hours provided in the labor legislation. 14 3 1,066 6 10 National minimum salary on 12/31/2017: 937.00. Copel does not use the minimum salary as a base to defi ne salaries. 11 The calculation of the proportion between the remunerations is done based on the salaries of the employees working full time. PROFESSIONAL DEVELOPMENT 103-2 PERFORMANCE MANAGEMENT46CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXSince 2013, Copel´s Performance Mana-gement is carried out through the Our Energy Program, which is improved annually following the best market practices, such as internal pro-cess learning, presented by the Holding and the wholly-owned subsidiaries. In 2017, 100% of the employees considered eligible were submitted to performance assessment. 103-2 A formal document is issued for the asses-sment, which defi nes the assessment period and the procedures to be followed. The Human Resources area coordinates and monitors the application of the assessments, which is done through an electronic system, and discloses partial information about the process progress and general guidelines by e-mail. After the me-eting for assessment of each employee, the manager registers in the assessment in the system, and a message is automatically sent to each employee by e-mail, informing about their process. At the end of the assessment, system reports inform the total number of as-sessed employees. 404-3 The employees´ professional develop-ment is a strategic factor for Copel, providing increase of productivity, gain in competitive-ness and well-being and safety for all. A set of norms and guidelines provided in the Corporate Education Policy defi nes what the training and development initiatives and targets will be. In this context, in 2017, Co-pel invested in trainings aimed at governan-ce, risks and compliance, and mainly, in the execution of the leadership program, eviden-cing growth in the average training hours per employee when compared to 2016. Aligned to that, there is management to “Develop le-aders focused on people management and value generation”, whose indicators is the management training effectiveness rates sti-pulated at 85%for 2017 and with expressive result achieving 92%.The trainings offered by the Company aim also to engage the employees to commit to strategic corporate targets and goals, which are broken down as follows: • Corporate Programs: education actions ai-med at the whole Company;• Trainings for qualification: destined to basic qualification to perform the role;• Compulsory trainings: courses destined to some activities;• Trainings for professional improvements and events: seminars, lectures, workshops and congresses, among others.In the business structure, UniCopel is supe-rintendence responsible to coordinate the cor-porate education trainings, which encompass, among others, the Integrity, Sustainability, Lea-dership and Preparation for the Future Programs, highlighting the commitment undertaken to the UN Principles for Sustainable Executive Educa-tion (PRME), which involved conduction of equal training initiatives for the Company´s executi-ves, highlighted in this report on page 47.HUMAN CAPITALFurther information about Copel´s Corporate Education Policy is available on the Sustainability page in the Company´s site.COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 47 HUMAN CAPITAL INVESTMENTS IN HUMAN CAPITAL In 2017, BRL7.58 million were invested in people training and development. Totally, 2,781 short training events were held with 41,407 participants, totaling 459,782 training hours, with 53.35 average training hours per employee and 119 participations in long events (language and post-graduate courses). 103-3, 404-1 Average training hours by gender and functional category* Men Women Operational High school level technician High school level professional Higher level professional 58.40 39.64 114.46 73.31 31.18 95.73 * The number of employees considered is different from that shown in the table of 12/31/2017. For training, it was considered the total of 8,618 employees, as we consider all employees who passed through the company in 2017 The difference between the average training hours per gender is pursuant to the fact that Copel has higher number of male employees, with a part of then allocated in roles, which require compulsory trainings. Women are mostly classified in high school level career, where the training hour load is lower than that of the legally obligatory or higher education courses. EMPLOYEE QUALIFICATION AND TRAINING PROGRAMS G4-DMA-EU14, 404-2 TRANSFORMATIONAL LEADERSHIP PROGRAM Comprehensive program for qualifi cation of the Company´s management body by means of in-person and EAD trainings. In 2017, 453 ma- nagers were trained, 88% of the management population. Each participant had 96 training hours in person and 50 training hours EAD. The content approached topics, such as leadership, strategy, people and team management, management skills and elements from the management es- sence. Furthermore, Copel promoted two leader meetings, where all managers were gathered with the Company´s Board of Directors to dis- cuss the relevant subjects for the business. TALENT MANAGEMENT PROGRAM Instituted by Copel Geração e Transmissão, it seeks to improve the people management process to promote talent recognition and valuation. Through the Program, it is possible to identify talents for strategic positions, such as supervision and coordination of projects, identify successors and implement competen- cy development actions. TALENT BANK Copel Distribuição has a talent bank, es- tablished by mapping professionals with po- tential for leadership positions according to criteria as performance, maturity and time to retirement. Such professionals get specifi c trainings, such as mentoring and coaching. In 2017, 27 out of the 210 employees in the ta- lent bank were designated to management le- vel positions. CALIBRATION COMMITTEE A committee destined to align the understan- ding of the people responsible for the employees´ assessment regarding the management behavior, comprehension of the requirements for assess- ment and reduction of subjectivity in the perfor- mance assessment process. The cases selected by the committee are handled to provide the ma- nagers´ professional development and growth. In 2017, 1,064 employees were benefi ted with education allowance48CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXANIMA PROGRAMWith the challenge of building a new participatory management model in 2015, Copel launched Anima, an innovative program proposed by the Presidency to per-meate throughout the groups closest to the business operations and constituted based on eight projects. With this program, it is expected to intensify the production and the fl ow of ideas and action plans in all areas of the Company, where each of the 8.5 thou-sand employees is encouraged to imagine alternati-ves and solutions to aspects such as innovation, collaboration, proactivity, leadership, synergy betwe-en the Holding and the businesses, satisfaction, well-being, and labor safety, in addition to providing, in a pioneering spirit, occupation of empty spaces in the market and in the society.This participative model shall be the source for projects, which aim revolutionize the way to work at the Company, granting higher satisfaction, productivi-ty and dialog to the employees´ work.FOREIGN LANGUAGE PROGRAM A program destined to employees, who perform ac-tivities requiring foreign language. Established in 2012, it reimburses part of the amount of the course as a compensation for performance and achievement of a knowledge target by the employee. In 2017, 94 em-ployees participated in the Program in German, Spa-nish and English courses. EDUCATION ALLOWANCE Copel reimburses up to 70% of the monthly ins-tallments of post-graduate courses, with the amount limited to BRL 840.46. This credit can be renewed after a grace period, provided that the second post-gradu-ate course is of interest to the Company´s operation. In 2017, 1,064 employees were benefi ted, representing reimbursement of BRL 4.72 million. BASIC QUALIFICATION COURSES They qualify the employees – beginners or veterans – for a new activity. The main courses are Distribution Electricians Qualifi cation Program (FBED), Basic Qualifi -cation Program for Transmission Operation and Mainte-nance (PFBOM) and Power Plant Technology (TECUS). In these courses, the recently-hired employees get ini-tial training necessary for the adequate performance of the position, with approximate total load of 200 hours.HUMAN CAPITALCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 49 HUMAN CAPITAL POWER GENERATION AND TRANSMISSION TECH- NICAL MEETING (ETGET) Technical Meetings related to Operation and Main- tenance (O&M) are held by Copel Geração e Transmis- são to promote exchange of technical experience and technical, administrative and management knowledge. CONTRACTORS´ EMPLOYEES Copel offers training to contractors´ employees as well, upon contract provision or because of the Com- pany´s interest, aimed at integration and specifi c activi- ties to be carried out by the professionals during their service at the Company. PRE-RETIREMENT In 2017, no actions were carried out for employment continuity in case of retirement or termination of the employment contract. By 2020, approximately 750 em- ployees shall fi le request for retirement. To attend the- se people and facilitate employment after retirement for those, who wish to work, a new edition of the qua- lifi cation program will be started in 2018. INOV+ GET PROJECT An event of Copel Geração e Transmissão, which gathers innovative practices, which help optimizing processes and resources to improve the Company´s results and avoid unnecessary costs, among other be- nefi ts. The Project started in 2015 and includes lectures about innovation. PARTICIPATION IN EVENTS Copel considers that the employees´ participation in external events is a way to update and have access to knowledge. In October 2017, Copel Geração e Transmis- são coordinated the XXIV National Seminar on Produc- tion and Transmission of Electric Power (SNPTEE). This event is promoted at every two years by Cigré-Brasil, which the largest electric power generation and trans- mission area in the country. There, topics considered by the sector as the most relevant for its development are discussed. About 500 Copel employees participated in the 2017 edition. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 50 HUMAN CAPITAL HEALTH AND SAFETY 103-3, 403-2 2017 2016 2017 2016 Frequency rate (injuries) HOL GeT DIS CTE HOL GeT DIS CTE Number of fatalities HOL GeT DIS CTE HOL GeT DIS CTE Men Women - 1.9 6.69 0.86 - 3.26 7.48 0.88 Men Women 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Occupational disease rate HOL GeT DIS CTE HOL GeT DIS CTE Number of days lost HOL GeT DIS CTE HOL GeT DIS CTE Men Women - - - - 0.51 - - - - - - 0.86 - - Men Women - - 46 1,240 50 - - - - 21 2,150 5 - - Absenteeism rate HOL GeT DIS CTE HOL GeT DIS CTE Men Women - 0 1.46 2.83 1.14 1,13 1.48 21 2.8 1.18 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 51 HUMAN CAPITAL For Copel, the workers´ health and safe- ty is a strategic subject included in the Labor Health and Safety Policy, which presents the guidelines to be followed by all employees and workers and guides on the fulfi llment of legal requirements and dissemination of prevention culture to mitigate risks in its power genera- tion, transmission and distribution operations and in the telecommunication activities. 103-1 Copel´s Labor Health and Safety Policy defi nes the operation guidelines for manage- ment and prevention of risks for its workers´ safety and health. Such policy is prepared by the Labor Safety and Health Coordination (CSST), together with the labor safety de- partments of the wholly-owned subsidiaries, which identify risks, develop preventive ac- tions and follow up the indicators associated with this aspect. In addition to the guidelines in the policy, the Company has a specifi c Labor Health and Safe- ty Manual for outsourced professionals, which is a part of all service provision contracts. Under the contract, the outsourced compa- nies shall also apply the guidelines provided in the Labor Safety and Health Instruction Guide for Contractors (available online) and demons- Total workers trained on labor health and safety Number trate satisfactory performance in relation to their employees´ safety and health. 103-2 Holding A Copel provides lectures and trainings for its employees and the contractors´ em- ployees. The number of contractors, who have gotten any health and safety training in 2017 is shown in the chart below. G4-EU18 Distribution Generation and Transmission ACTIONS DONE: 325 5,367 2,319 Training and qualifi cation: focused on prevention of diseases and work accidents, programs, such as Training of Field Inspec- tors and Training for Use of Preliminary Risk Analysis are carried out. Health promotion: own occupation he- alth service offered to the employees, com- plemented by Fundação Copel. It enables in- vestigation and expanded medical follow-up, exceeding the legally provided assessments, with diagnostic and prevention exams for di- fferent diseases, including those that might affect capacity and productivity at work and others related to gender or age range to im- prove quality of life. Electricians Rodeo: an event, which gathers utility companies from all over the country with the purpose to promote labor safety culture and development in the per- formance of the electrician role. In the 2010 and 2014 editions, Copel Distribuição was champion of the national rodeo and in 2012 came in second place. In the last edition, in 2016, the teams of Copel Distribução took the top three places on the podium. Trainings and integration: all contrac- tors participate Occupational Health and Safety Integration and exhibit about Risk Assessment carried out for the activities in question. Control of the minimum manda- tory training for working with electricity is done through a proprietary application that contains information about the contractors´ employees and the agreements. Preserving Life (PPV) and Behavior Verifi cation (VCO) Programs: Field ins- pection of employees and service provi- ders hired by the Company, destined to monitor the fulfi llment of the technical and the safety procedures during the execution of their activities. A labor safety technical or specialist from the area itself follows the teams up and issues a report indicating the found failures. 52CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXIn relation to the power consumers of Copel Distribuição, the following numbers of acci-dents were recorded: G4-EU25 20162017Number of accidents with the population 3845Number of deaths with the population 1419Number of cases related to health and safety, including occupational diseases.1515The main initiatives adopted to avoid occurrence of accidents with power are listed below:• Participation in the National Week for Pre-vention of Accidents with Electric Power promoted by Abradee• Correction of situations with risk to the po-pulation found out by means of Risk Hun-ting actions.• Lectures in schools, companies and the community in general, alerting on the main risks with electric power; • Presence of Copel Distribuição in events with big flow of people, disclo-sing safe use of electric power; • Disclosure of message through radio sta-tions; HUMAN CAPITALINTELLECTUAL CAPITAL53CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXRESEARCH, DEVELOPMENT AND INNOVATION G4-DMA EU8 54CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXThe Company´s Innovation Coordination is responsible to establish poli-cies to support the structured development of research, development and innovation in the Company, subordinated directly to the Presidency becau-se of its strategic character for the future of the business. 103-1 Copel Distribuição and Copel Geração e Transmissão also maintain areas dedicated to Research and Development management and support in com-pliance with the guidelines set in Copel´s Sustainability Policy and in confor-mity with Law No. 9,991/2000, which defi nes the rules for annual application of minimum percentage of the Net Operational Revenues (ROL) in RD&I projects by the utility and authorized companies from the electricity sector. INNOVATION PROJECT MANAGEMENT Innovation Portal To follow up the development of the RD&I programs, the Innovation Coordination created the Innovation Portal, which gathers all information about the budget execution of the projects under development. In addition to enabling follow-up by the Coordination, the Portal is a support tool for the projects managers, who, based on the available information, can defi -ne investment adaptation measures for their projects. The purpose is the targets to be met 100% monthly. 103-2 The investment measurement is done by means of an accounting indi-cator and follow-up of the investment compared to the innovation goals INTELLECTUAL CAPITAL55CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXstipulated by Aneel and related to the con-cession contracts. All RD&I project shall be approved by Copel and Aneel to have their investments recognized as such, considering that Aneel is responsible for the defi nition of the procedures for evaluation of the initiati-ves and inspection of the application of the funds by the Company 103-3 The Portal data is available on the intranet and can be checked throughout the Company. INCENTIVE TO INNOVATIONAs a policy for incentive to innovation, Copel gives awards to employees, who pre-sent proposals for innovative projects with potential to create value for the corporate business and the society, and which are alig-ned to the Company´s Strategic Planning. Another incentive is giving extra time to em-ployees, who participate in RD&I projects of-fi cially registered at Aneel. The presentation of the projects is done by open model, where proposals for RD&I projects can be presented at any time (con-tinuous fl ow). The interested people shall fi ll in the Initial Project Proposal - PIP form avai-lable on the internet for proposals presenta-tion by employees, research institutions and the population in general. The proposals are evaluated according to parameters, which encompass Aneel criteria for originality, appli-cability, relevance and cost reasonability, as well as the economic and the social-environ-mental impacts, in addition to professional and technological qualifi cation of the agents involved in the project.Copel considers that the innovation im-pacts are evidenced by increase in produc-tivity, improvement in the execution of the processes and increase in the quality of products and services. As a result from the RD&I projects, 15 petitions for product pa-tents have already been fi led at the National Industrial Property Institute (INPI). In addition to those, Copel has two more international petitions for patents in the United States and Europe through the Paris Convention of the Community (CUP).INTELLECTUAL CAPITALCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 56 INTELLECTUAL CAPITAL INVESTMENTS IN RD&I In 2017, Copel´s RD&I program has provi- ded BRL 36.9 million for projects divided in the following topics: energetic effi ciency; alternative electric power generation sources; management of watershed and reservoirs; environment; mea- surement, billing and fi ghting commercial losses; electric power system operation; electric power system planning; supervision, control and protec- tion of electric power systems; safety; quality and reliability of the electric power services; RD&I ma- nagement and other important topics, since stu- dies about nanotechnology applied to insulation oils, to smart grids and power storage. 103-2 The RD&I projects developed by Copel pre- sent direct application of their results by means of new equipment or methodologies. Furthermore, they shall contribute to the qualifi cation of profes- sionals through post-graduate courses associated with the projects. In 2017, the Company´s funds in this area were: Copel Geração e Transmissão: applied BRL 17.9 million in 29 RD&I projects, seven of which strategic, whose topics have been established by Aneel through Project Calls. The Company par- ticipated in 11 projects in cooperation with other companies, in addition to applying BRL 600 thou- sand in management innovation projects, totaling BRL 18.5 million invested. Copel Distribuição: in 2017, invested BRL 18.4 million in 37 RD&I projects, three of which were completed along the year, in addition to co- operating with other companies from the electric sector in eight other projects, two of which strate- gic, whose topics have been established by Aneel through Project Calls. Copel Telecomunicações: in 2017, the Tech- Month event was held with the purpose to follow up the future trends in the sector at the biggest suppliers in the telecommunication area, stimula- ting the creation of new products and services. During the next three years, Copel will invest BRL 52 million in innovating projects for renewab- le power generation and equipment replacement to make the use of electric power more effi cient. The projects will be carried out in fi ve university centers in Paraná approved in public call opened by Cope- l´s Energetic Effi ciency and Research and Develop- ment programs, regulated by Aneel. The institutions will have a year to carry the energetic effi ciency pro- jects out, followed by the period of one year to mo- nitor the results. There will be three years to execute the research and development works. DETAILS OF INVESTMENTS IN RD&I: Investment in Research, Development (by topic) GeT | Value (BRL) DIS | Value (BRL) Energetic Effi ciency 532,572.24 - Alternative sources for electric power generation 2,545,504.14 657,768.18 Watershed and Reservoir Management 1,346,063.64 - Environment 1,997,399.46 1,095,404.17 Measurement, billing and fi ghting commercial loss - 1,246,050.69 Electric Power System Operation 4,567,137.64 2,181,413.74 Electric Power System Planning 1,214,337.24 767,103.58 Supervision, Control and Protection of Electric Power Systems 2,979,309.77 4,967,831.14 Safety 2,207,447.55 5,240,957.57 Quality and Reliability of the Electric Power Services 53,541.12 72.00* Others RD&I Management Total Invested 454,227.12 1,438,980.23 590,161.20 852,640.50 18,487,701.12 18,448,221.80 *A big project about “Quality and Reliability” with investment started in the end of 2017 at Copel DIS, and resulting in a low value for this period. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 57 INTELLECTUAL CAPITAL RD&I HIGHLIGHTS: • The project for Technical and Commercial Arrangement of the Electric Power Distri- buted Generation from Biogas resulting from Residual Biomass from the pig farm properties in the municipality of Entre Rios do Oeste in Paraná. The proposal of this project is to drive electric power ge- neration from biogas in Brazil, especially in the regions with high concentration of residual organic matter produced in a decentralized way and without adequa- te treatment. The project contributes to energetic effi ciency and favors the mi- tigation of environmental liabilities and preservation of their water resources, energetic recovery of the pig farms, envi- ronmental and energetic sustainability of the agribusiness, adding value for the ru- ral properties and stimulation to the cre- ation of new rural economy, with income generation supported on biogas. The pro- ject also generates improvement in qua- lity of life and strengthening of the pig farming, in addition to contributing to the dissemination of the culture to use distri- buted generation to complement power in unfavorable hydrological periods. • Another example of success is the project Automated System for Distribution Pro- tection Order Management (GEPROTEC), which enables checking the technical fea- sibility for implementation of an enginee- ring network for access to equipment in electric power distribution substations, using wireless communication networks in case of equipment, which can be re- -parameterized only through serial ports, or sharing of ethernet optical cables for newer equipment, or equipment, whi- ch already complies with the IEC 61850 standard. As a whole, the engineering ne- twork together with higher precision and agility in the process of defi nition of the protection adjustment parameters for the use of the GEPROTEC system, will enab- le also reduction of the DEC, FEC indexes and the average service time (TMA) due to reduction of the size of the sections of feeders switched off at the time of failure in the power supply, and consequently, re- ducing the number of disconnected custo- mers, which leads to increased billing and improvement of the Company´s image be- fore the society. • System for analysis and diagnosis of HV capacitor banks AT – MEDICAP, which, in the fi rst phase, enabled the develop- ment of equipment, which facilitates and speeds up the tests on capacitor banks, in addition to having lower cost than the similar systems existing on the market. In the second phase of the project, under contracting, the studies will be continued aiming at its insertion in the market. SOCIAL AND RELATIONSHIP CAPITAL 58CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIX59CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCopel considers proactive and transparent relationship with the stakeholders fundamen-tal for the development and the sustainability of its business, as provided in the Company´s Sustainability Policy. Aligned to this assump-tion, the wholly-owned subsidiaries inserted the implementation of processes for identi-fi cation of stakeholders and defi nition of the engagement ways to be adopted in the res-pective agendas. For working in markets re-gulated by Aneel and Anatel, Copel is directly impacted by the quality indicators of the provi-ded services. 102-40, 102-42, 103-1 In 2016, Copel Distribuição, by means of the methodology presented in the AA1000 Standards and benchmarking material, de-fi ned its stakeholders and the main indicators to be presented for each one. For 2017, the list of stakeholders was maintained as pre-sented hereunder: 102-43 HoldingCopel´s subsidiaries are committed to the Holding to contribute to the maximization of the Company´s value in a sustainable way. This com-mitment is signed in a Management Contract be-tween the parties. This stakeholder´s need and ex-pectation are identifi ed in the Strategic Planning, in the meetings of the Executive Offi ce (Redir) and the meetings of the Board of Directors (CAD).EmployeesThe Company adopts different communica-tion channels with its employees12, with the pur-pose to identify their needs and expectations, highlighting professional development, remune-ration according to the market, transparency and equity in the actions developed by the Company. CustomersThe actions aimed at the customers intend to meet their main expectations: to have power and internet (Copel Telecom), free of errors bills and quality service. Periodically, satisfaction surveys are carried out with customers of Co-pel Distribuição and Copel Telecomunicações, presented in this chapter. SuppliersThe alignment Copel´s operation with the needs and the expectations of its suppliers is essential for the regularity and the quality of the provided services. Working on the contract management in an isonomic way, Copel keeps regular contact with its suppliers, providing di-fferent relationship channels, such as e-mail, telephone and correspondence service, in ad-dition to specifi c space for the suppliers in the corporate siteRegulatory Bodies In the energy sector, Copel is legally obliged before the regulatory bodies to develop its ac-tions in accordance with the standards, the re-gulations and the applicable legislation. In the telecommunication sector, the Company shall also carry its activities out in accordance with the respective regulatory frame. Regularly, the Company holds specifi c meetings with the re-gulating bodies, as well as public hearings and inquiries, exchanging documents, e-mails and inspection and guidance visits.ComunidadesPower, Copel´s main product, represents quality of life, health and development for the society. In order to identify needs and expec-tations, Copel pays visits and makes surveys in the communities around its new enterpri-ses, keeping specifi c actions for communica-tion with this population. SOCIAL AND RELATIONSHIP CAPITAL12 Communications channels with the employees: Employee Opinion Survey (POE), Great Place To Work Survey (GPTW), Confi dential Channels (CADAM, COE, Ombudsman, Confi dential Communication Channel), Chat with the President, Anima Program)COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 60 SOCIAL AND RELATIONSHIP CAPITAL CUSTOMERS AND CONSUMERS Customers´ Satisfaction Management Customers´ profi le G4-DMA EU3 In 2017, Copel Telecomunicações carried out a process of identifi cation of stakeholders as a stage for elaboration of its Management Excellence Model (MEG)13, which provides commitment to the stakeholders. As a re- sult from this work, the following populations were listed14: majority shareholder/holding, employees, contractors, customers, suppliers and trade unions. . For 2018, Copel GeT provides performan- ce of a project for review and improvement to what refers to identifi cation and prioritization of business stakeholders. Copel Comercia- lização does not perform a specifi c process for identifi cation of its stakeholders, following the positioning of the holding. In this chapter, the results achieved in 2017 will be presented, as well as the way the Company manages the relationship with the different populations. 13 Methodology for assessment, self-assessment and recognition of the good management practices elaborated by the National Quality Foundation (FNQ). 14 The listed stakeholders were classifi ed according to their expressi- ve relevance for Copel Telecomunicações. Copel Distribuição customer profi le15 2015 2016 2017 Residential Industrial Commercial Rural 3,527,126 3,597,105 3,682,009 88,276 82,021 76,328 376,959 382,121 389,844 368,297 360,066 354,829 Other (public authority, public lighting, public service, own) 57,404 57,454 57,483 Total number of customers 4,418,062 4,478,767 4,560,493 15 Captive and free consumers served by Copel Distribuição. Copel Comercialização customer profi le 16 2015 2016 2017 Bilateral sales (sellers) Industrial Commercial Residential and Rural Total number of customers NA NA NA NA NA NA NA NA NA NA 50 110 29 NA 189 16 Criterion used is CNPJ number not repeated in the year. There are many customers with more than one establishment and in different periods. For 2016, no survey was done because the establishments were on the free market at the beginning, and the values were too low. Copel Comercialização started activities in the beginning of 2016 and the fi rst billing was done as of July 2016. In 2017, Copel celebrated the recognitions of its service excellence by the customers once more. Copel Distribuição was the best evaluated utility according to the customers´ opinion, ba- sed on the Aneel Consumer Satisfaction Index, with score 80.69 among the utility companies with more than 400 thousand customers. In the award of the Brazilian Association of Electric Power Distributors (Abradee), the utility com- pany took fi rst place in the customer assess- ment category for the sixth out of seven years. Internationally, it was recognized for the fi f- th time in seven years as the best distributor in Latin America and the Caribbean, a title gran- ted by Comisión de Integración Energética Re- gional (CIER), competing with 57 companies from 13 countries. To identify opportunities for improvement in service provision, Copel Distribuição makes its own survey with the rural customers at every four years and with the customers from the public authorities in the fi rst and the last year of the mayors´ mandates. 102-44, 103-3 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 61 SOCIAL AND RELATIONSHIP CAPITAL Survey category Residential customer (ISQP) - Abradee Customer from group B (non-residential - ISQP – Abradee Industrial customer (ISQP) - Abradee Residential customer IASC - Aneel Rural customer** 2015 88.6 86.5 78.6 60.3 77.9 2016 88.8 84.8 85.9 73.1 - 2017 90.3 - * 82.4 80.7 - * Copel did not participate in the 2017 survey with non-residential customers from group B. ** Survey not carried out in 2016 and 2017. Complaint Management at Copel Distribuição 2015 2016 2017 Registered and processed grievances and complaints 17.592 20.668 24.460 Registered and solved grievances and complaints 17.835 20.668 24.460 Equivalent Complaint Frequency (FER) 7.21 6.77 9.01 Equivalent Complaint Duration (DER) 126.89 116.94 108.59 COPEL TELECOMUNICAÇÕES Annually, Copel Telecomunicações makes con- sumer satisfaction surveys following the same data collection methodology as that used by the National Telecommunication Agency (Anatel) since 2015. The adoption of this methodology enables comparison of the results from the Company´s quality indicators to the data from other companies in the sector. In 2017, the General Satisfaction Index (ISG) ba- sed on the customers´ experience with the Copel Telecom fi xed line Internet was 93%. The results of the Multimedia Communication Service (SCM) indi- cators can be checked in the company´s business model on page 23. 102-44 Complaint Management 103-2, 103-3 COPEL DISTRIBUIÇÃO The assessment of the products and the services offered by Copel Distribuição is done by means of two indicators: Equi- valent Complaint Frequency (FER), which quantifi es valid complaints in relation to the number of consumers, and the Equivalent Complaint Duration (DER), which shows the average time the utility takes to res- pond to complaints. In 2017, the Company was re-certifi ed on ISO 9001 for customer service. The customer service area at Copel Distribui- ção is composed of seven channels Level 1, those used by the consumer for fi rst contact with the Company, and Ombuds- man Offi ce, which provides service Level 2. In addition to these own channels, Co- pel provides other channels, such as Com- plain Here. Also focused on excellence in service provision, the Company performs annual survey of Satisfaction of Complaining Cus- tomers, which measures ease of contact, clarity of the provided information, friendly service, observance of the time to res- pond, and meeting of expectations. COPEL DISTRIBUIÇÃO SERVICE CHANNELS 1st Level: • Virtual Agency; • Copel Mobile Application; • Service in Person; • Telephone Service - 0800 51 00 116; • e-mails (copel@copel.com, atendimento@copel.com e comercial@copel.com); • Talk to Us; and • URAs17. 2nd Level: • Ombudsman 17 Acronym for Audible Response Unit. 62CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL TELECOMUNICAÇÕES 103-2, 103-3 Relationship with the customers is promoted through the relationship channels, which are de-fi ned according to the characteristics of each segment, facility, agility and acceptance. SegmentChannelSTFC, SMP and SCM operators Site, self-service portal, exclusive e-mail, telephone, Contact Center, account manager and Ombudsman.SCM providers Site, self-service porta, exclusive e-mail, telephone, Contact Center, account manager and Ombudsman.CorporateSite, self-service porta, exclusive e-mail, telephone, Contact Center, account manager and Ombudsman.CopelExclusive e-mail, telephone, Contact Center, account manager and Ombudsman.Public Sector Exclusive e-mail, telephone, Contact Center, account manager and Ombudsman.PMEsSite, self-service portal, exclusive e-mail, telephone, Contact Center and Ombudsman.ResidencesSite, self-service portal, exclusive e-mail, telephone, Contact Center and Ombudsman.Low income residencesSite, self-service portal, exclusive e-mail, telephone, Contact Center and Ombudsman.Strategic customersSite, self-service portal, exclusive e-mail, telephone, Contact Center, account manager and Ombudsman.SOCIAL AND RELATIONSHIP CAPITALCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 63 SOCIAL AND RELATIONSHIP CAPITAL Copel Telecomunicações customers can use the Ombudsman as one of the custo- mer service channels. The Ombudsman receives and follows up suggestions, com- plaints and reports received directly by the Company, the Ombudsman of the regula- ting agency, Anatel, and the platform of the National Consumer Department (Senacon) of the Ministry of Justice, in addition to the demands presented by Procon and the Ge- neral Ombudsman of the State. The target of the Ombudsman is to answer the complaints within ten business days. In 2017, all processed complaints were solved. As a result, big part of the manifestations, which would be submitted to external entities, such as Procon, Senacon or even Anatel, were solved by the Company itself. Telecommunication business performance 2015 2016 2017 Registered and processed grievances and complaints 1,178 4,474 7,461 Registered and solved grievances and complaints 1,171 4,434 7,461 Equivalent Complaint Frequency (FER) Equivalent Complaint Duration (DER) 3.1 4.4 5.4 8.3 5.4 3.6 USE OF ENERGY ACCESSIBLE ENERGY G4-EU23, G4-EU24 The energy rate has a direct impact upon the con- sumers´ economy, regardless of their social status. 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 affor- dable for all. • Social Rate for Electric Power (TSEE) TSEE offers discounts for consumption of elec- tricity up to a limit of 220 kWh to families re- gistered in the Federal Government’s Social Pro- gram Registry, as long as the other criteria set forth in ANEEL Resolution 414/2010 are met, resulting in savings for the consumer. In 2017, 299,709 consumer units with regular TSEE were served, or 8.2% total households served by Co- pel Distribuição, representing the amount of BRL 107.5 million. • Fraternal Light Program The Fraternal Light Program (Programa Luz Frater- na) of the Government of the State of Paraná, pays the bills for consumers registered in the Social Rate for Electric Power, provided that consumption does not exceed 120 kWh. In 2017, the total funds of the State Government for the program were at about BRL 37.3 million, benefi ting an average of 158 thousand families per month. • Nighttime Irrigation Rate and Nighttime Rural Rate Result from the partnership involving Copel, the Sta- te Department of Agriculture and Supply, Instituto Paranaense de Assistência Técnica e Extensão Rural - Emater and the State Department of Environment and Water Resources, the initiative aims to encoura- ge agricultural productivity upon discount of 60% to 70% in the rate for electricity used for production in the period between 9:30 PM and 6:00 AM, as well as subsidies for construction/reinforcement of ne- tworks to serve the irrigators. Until December 2017, there were 4,400 consumer units registered in the Social Rate for Electric Power and 12,000 registered in the Nighttime Rural Rate Program. 64CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIX Number of consumer units with time between disconnection and payment agreement 20162017Less than 48 hours269,812495,230Between 48 hours and 1 week55,69192,291Between 1 week and 1 month73,259109,588Between 1 month and 1 year80,13694,452Above 1 year280 Number of consumer units with time between disconnection and payment agreement20162017Less than 24 hours273,314314,844Between 24 hours and 48 hours15,79665,301Between 48 hours and 72 hours15,70596,304More than 1 week41,853188,628RESIDENTIAL DISCONNECTIONS G4-EU27 Compared to the previous year, it was ve-rifi ed that in 2017, there was signifi cant increa-se in the volume of suspended power supply for lack of payment. This is pursuant to stra-EFFICIENT USE OF ENERGY G4-DMA EU7 Copel is committed to encourage its con-sumers to use power consciously. Annually, campaigns are carried out to promote diffe-rent ways of awareness about energetic effi -ciency. Furthermore, public calls are made for energetic effi ciency projects, open to indus-trial, residential consumers (including housing complexes), commerce and services, public authorities, rural and public services (inclu-ding public lighting). In 2017, 21 projects were started, which totalize investments of about BRL 15.2 million. At the end of the year, ano-ther selection was made, which will enable investment of BRL 20 million in 2018. The Company develops also the Energy Ef-fi ciency Program (PEE) responsible to promo-te effi ciency in the fi nal use of electricity. The main mechanism of the PEE is the Copel in the Community project, aimed at low-income consumers, benefi ted by TSEE, which is based giving lectures about on safe and effi cient con-sumption, energy diagnostics, and replacing equipment with other more economical.tegic business decision and need to reduce losses driven by default. The verifi ed results are shown in the chart below:Along 2017, Copel in the Community repla-ced fi ve thousand second-hand refrigerators with new ones with the Procel seal for ener-gy saving. Since 2010, in the project, 2,650 lectures and 254 thousand energy diagnosti-cs were given, 763 thousand lamps, 43 thou-sand refrigerators and 30 thousand showers were replaced. These actions seek to engage the community in the concession area to pre-serve natural resources, especially energy.SOCIAL AND RELATIONSHIP CAPITAL65CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXSUPPLIER MANAGEMENT 102-9 The rules for the supply chain manage-ment by the Holding and the wholly-owned subsidiaries are provided in documents Con-tract Management, Registry, Supplier Assess-ment, Material Acquisition, Contracting Servi-ces, Works and Engineering Services, as well as Company´s the Code of Conduct and the Supplier´s Manual.Copel ´s supply chain has the following priority elements:• Generation and Transmission: acquisition of safety materials and equipment mainte-nance services.• Distribution: Power Generation/Transmis-sion and commercialization companies, suppliers of material and equipment and engineering service providers.• Telecommunications: suppliers for provi-sion of activation and maintenance servi-ces, provision of call center services and supply of equipment for data transmission. • Holding: IT infrastructure equipment, sof-tware acquisition and provision of buil-ding services.• Commercialization: software develop-ment, software acquisition and provision of services for defi nition of forward market prices and risk. In 2017, Copel had 9,455 active suppliers, which totalize BRL 8,916,794,453.79 paid amou-nts. Currently, the Company does not control se-cond or third level suppliers18. Geographic distribution of the Copel suppliers: RegionNumber of suppliersPercentageNorth region250.26%Northeast Region1701.80%Center-West Region2252.38%Southeast Region99010.47%South Region8,04385.07%Other (outside of Brazil)20.02%Total9,455100.00%18 Suppliers, which are subcontracted by the direct suppliers.SOCIAL AND RELATIONSHIP CAPITALCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 66 SOCIAL AND RELATIONSHIP CAPITAL Currently, Copel does not perform spe- cific assessment for risk management in the supply chain. However, considering its impact within the Company, some sectors are considered critical for the operation, such as outsourcing the customer activa- tion and maintenance service and the call center service provision for Copel Teleco- municações, software development at Co- pel Comercialização and IT equipment su- pply for the Holding. In the assessment of its critical suppliers, Copel Distribuição considers legal, fi nancial, environmental, labor health and safety, safe- ty of the population, the Company´s image, the perception of customers and the society and the process continuity aspects. In the bidding processes done by Copel Geração e Transmissão, the contract reques- ting area defi nes the criticality of the object to be contracted, which serves to adjust the judgement criteria related to economic-fi - nancial qualifi cation of the companies. The intention of this measure is to avoid inter- ruption of the service provision and discon- tinuity of the material delivery, impeding possible fi nancial impacts on the Company and risks associated with the safety of em- ployees, communities and the environment. Copel makes efforts to strengthen the relationship with its suppliers, in order to contribute to the development of business in the whole chain. In addition to following the legislation in force, the Company has internal guidelines and norms, which govern its relationship with business partners. QUALIFICATION, SELECTION, CONTRACTING 308-1, 414-1 Copel´s suppliers shall comply with all as- pects of the legislation in force in the country. The compliance requirement is expressed in the calls for bid, in contract clauses, supplier registration manuals and technical standards and manuals, permanently available online. Currently, Copel does not select or assess new suppliers based on environmental criteria. In all labor cession agreements, the con- tractors undergo integration process, in whi- ch Copel highlights its contract requirements regarding social-environmental, human and labor rights, accessibility and inclusion and fi ghting against child work issues. Non-com- pliance leads to suspension of the contract and prohibition to participate in new bids of the Company for two years. Follow-up of the compliance with the contract clauses is done by contract managers and inspectors. In 2009, Copel started including a stan- dard social-environmental responsibility clau- se in its contracts, which in 2016 was com- plemented with specifi c clauses for human rights. Contracts are accompanied by State- ment of Good Standing and Social Responsi- bility. For 2018, a new model, which includes human rights aspects and will be used in new contracts and the contracts in force, will be introduced. 412-3 Depending on the object to be contrac- ted, some specifi c clauses related to envi- ronmental requirements are inserted in the draft contracts, which accompany the call for bid upon publication. In May 2017, Copel instituted an exclusi- ve bid for Micro-companies and Small Com- panies and reserve of aliquots (up to 25%) in tenders, whose object is acquisition of di- visible goods, as defi ned in Complementary Law No. 147/2014. Furthermore, it launched the invitation for Public Call (SGT160415) for selection of projects aimed at increase of the family agriculture production activities and sustainable management in the municipalities of Cláudia, Colíder, Itaúba and Nova Canaã do Norte in Mato Grosso. The process is in pro- gress, and completion is scheduled to 2018. Number of companies contracted by me- ans of exclusive bid: Holding and subsidiaries Number of exclusive contracts GeT DIS CTE HOL* Total exclusive contracts Total Copel´s contracts in 2017 Percentage of exclusive contracts * Responsible for hiring for Copel Comercialization. 25 88 8 5 126 2,041 6.1% 67CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXLocal CommunitiesIMPACT MANAGEMENT 413-2 Power generation, transmission and dis-tribution activities produce positive and nega-tive social-economic impacts on the regions, where they are installed. Copel is aware of the impacts from its enterprises and develops actions for prevention and mitigation in accor-dance with the legislation in force and the gui-delines set forth in its Sustainability Policy and its Code of Conduct, which contemplate the commitments undertaken within the UN Glo-bal Compact. 103-1 Copel manages the impact through dia-log with the communities and the public bodies, trying to identify the best ways to prevent and mitigate the negative impacts and expand the benefi ts from the positive impacts. This dialog starts in the stage of Environmental Impact Studies (EIA) and the Simplifi ed Environmental Reports (RAS), considering the nature and the size of the establishments to be installed.The impact evaluation process is started by the Business Development Executive Of-fi ce (DDN) already in the phase of analysis of the business opportunities. In case Co-pel invests in the new business, the second evaluation stage is carried out including stu-dies for the enterprise environmental licen-sing, which will defi ne the project characte-ristics and will enable measuring the impacts for development of Social-environmental programs related to prevention, mitigation and compensation, and related to implemen-tation of voluntary social initiatives. Population displacement cases are evaluated through a social and economic registration, and when any social vulnera-bility situation is identifi ed, Copel provides for the family relocation process and social compensation for the damages caused by installing its enterprises. Social compen-sation consists in providing for the affec-ted family to be relocated to a better area or area similar to the existing area and to recover is economic conditions existing before the enterprise. Furthermore, de--appropriated properties are indemnifi ed. G4 DMA EU20, G4 DMA EU22, 103-2 COLÍDER HPPIn 2017, the Local Production Arrange-ment Program was completed; it was rela-ted to the process of environmental licen-sing for implementation of hydroelectric power plant. By means of this initiative, one hundred family agriculture properties from the municipalities of Colíder, Itaúba, Nova Canaã do Norte and Cláudia received mon-thly technical visits by agronomist engine-ers, who guided the inhabitants on sustai-nable agriculture, priority to organic, trying to assure qualifi ed production of food and better life conditions for the families. In ad-dition to this total technical assistance ser-vice, qualifi cation workshops were held on management processes, processing and sale of family agriculture products to impro-ve the conditions of the agricultural worke-rs for insertion in the local production chain. The performance of the program provided improvement in the productivity of the agri-cultural workers, who were contemplated in the program, and reduction of the costs of external consumables, which directly led SOCIAL AND RELATIONSHIP CAPITAL68CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXto increase of the family income. Another benefi cial issue for the Company was the positive assessment by the public adminis-trators of the four municipalities involved, which strengthens the relationship betwe-en the two spheres and expands the reliabi-lity of the Company in the region.TRANSMISSION LINES ARARAQUARA – TAUBATÉCopel mitigates the impacts caused by the installation of transmission lines. In ge-neral, properties and inhabitants record land and production losses established by the easement, as well as change in the local na-tural landscape aspects. The Company implements the indemni-ty program with the purpose to mitigate the owners´ loss and adopts series of programs, which meet the conditions for environmen-tal licensing. Among the programs carried out by the Company in these cases are So-cial Communication, Social Integration or Relationship with the Community and Envi-ronmental Education for Communities.In the installation of transmission line TL 500 kV Araraquara – Taubaté, 356 km long, which passes through 28 municipalities in the State of São Paulo, the Company is car-rying out the Social Compensation Program due to the loss of economic activities in some communities. In 2017, the last family living in Araras was relocated. DISTRIBUTION NETWORK Along 2017, 619 people were compensa-ted for the institution of easement for the works on the High Voltage Distribution Line (HVDL), which do not lead to de-appropria-tion of areas, but set use restrictions, leading to payment of indemnities. G4 DMA EU22 In the implementation of new enterprises, Copel carries out actions for environmental awareness with the workers responsible for the installation of the works, as well as the Pro-gram Relationship with the Community, which aims to provide favorable conditions for syste-matic conversation between the entrepreneur and the different segments of the involved communities, public authorities and represen-tations of the organized civil society, which work in the area under direct and indirect in-fl uence of the enterprises to be installed. Another action implemented by the Com-pany in the installation of these enterprises is “Programa de Educação Patrimonial”; its methodology seeks to awaken the communi-ty´s interest in knowing and comprehending its identity, history and culture. In place since 2014, through a contracted company (Funda-ção Aroeira), the target population of the Pro-gram is the local community directly affected by the installation of the enterprises, teachers at schools in the region, and construction workers at operational and management le-vel. The program addresses issues, such as education on citizenship, valuing cultural iden-tity, preserving heritage, educating multiplier agents, and disseminating scientifi c research. SOCIAL AND RELATIONSHIP CAPITALCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 69 SOCIAL AND RELATIONSHIP CAPITAL TELECOMMUNICATIONS Copel Telecom keeps the base of custo- mers from Connected Paraná, a program for access to broadband internet with subsidies cost in cities with up to 10 thousand inhabi- tants and low HDI. The project Internet without Bullying aims to make the society aware of the cyberbullying pro- blem. Bullying is the main cause of depression and suicide among young people. The project provides awareness lectures seeking to commit students from state schools in the last years of elementary school, their parents and teachers. In 2017, two schools were contemplated, serving about 400 students. In 2018, the Project will be expanded and will be continued in Curitiba and in the State countryside. The initiative is aligned with Copel´s mission, the business guidelines of Copel Telecom (Copel Telecom DNA) and complies the UN Sustainable Development Goals (SDG 4, 16 and 17). Other social initiatives of Copel Telecom are presented in the table on page 73. INVESTMENT IN THE DEVELOPMENT OF THE COMMUNITIES 413-1 In 2017, 80% of Copel´s establishment made investments in engagement, impact assessment and local development actions, which generated benefi ts for the communities, where it works. In the period, Copel Telecomunicações in- vested in expansion of the telecommunication network infrastructure with the purpose to in- crease the data transmission capacity, the ne- twork capillarity and the quality of the services. The investments in telecommunication infras- tructure help in the development of the munici- palities in Paraná, assuring quality and reliability of communication, data transfer and access to information, providing social-economic progress of the municipalities and the communities. To continue the Distribution Development Plan (PDD), in 2017, Copel Distribuição inves- ted approximately BRL 55 million with the pur- pose to meet the demand of electric power consumers and contribute to the improvement of the quality and the reliability of the system. Furthermore, PDD funds were applied in pro- grams of social interest and community pro- jects for isolated and re-settled regions. Copel Geração e Transmissão, on its turn, invested in infrastructure for the public autho- rity and communities around its enterprises. The main social initiatives of Copel in the year are presented below. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 70 SOCIAL AND RELATIONSHIP CAPITAL SOCIAL INITIATIVES 413-1 Subsidiary Program/ Operation Name Program / Operation description and goal Impacted groups of Stakeholders Number of Impacted people * DIS Environmental Awareness Program To provide the workers from all hierarchy levels or technical specialization related to the works on the implementation of distribution lines, power substations and switching stations with adequate information about the enterprises and aspects from the regional environmental processes, thus, protecting against possibility of environmental and personal occurrences. Contractors´ employees 147 employees. DIS Solidary Bill Project Charge of Amounts from Third Parties (CVT) The Project was launched in 2015 with the purpose to increase the number of consumers, who receive their bills on digital means and benefi t the Associations of Parents and Friends of Exceptional People from the State of Paraná - APAEs. At every option on digital bill, Copel donated BRL 1,00 to APAEs. Since the launch of the project to its closure on 12/31/2017, 1,153,631 options on digital bill were recorded, which meant transfer of BRL 1,153,631.00 (One million, one hundred and fi fty-three thousand, six hundred and thirty-one reals) to APAES associated with the APAE Federation of the State of Paraná - Feapaes. It consists in provision of Charging Amounts from Third Parties (CVT) in the energy bills upon Contract or Agreement. The amounts to be donated shall be authorized in writing, or through voice recording, by the bill holders or their spouses. In 2017, BRL 26,048,336.08 (Twenty- six million, forty-eight thousand three hundred and thirty-six reals and eight cents) were collected and transferred to Institutions. Non-governmen- tal organizations No Non-governmen- tal organizations 110 philanthropic organizations Program for Relationship with the Community The general purpose of the Program is to provide favorable conditions for systematic conversation with the involved communities, public authority and representations of the organized civil society, which work in the area under direct and indirect infl uence of the enterprises to be installed. Local Community 120 professionals. Good Neighborhood Program It promotes improvement of the quality of life around the administrative headquarters of the Company in Ponta Grossa and Cascavel. The actions are carried out within 2 km from the buildings and were defi ned from studies, which identifi ed needs, expectations and priorities. Local community No * Segmentation of benefi ciaires by gender is not done. DIS DIS DIS Is there environmental/ social impact evaluation? The Environmental Awareness Programs are carried out for all Copel Distribuição enterprises and integrate the social-eco- nomic environment of the en- vironmental studies necessary to obtain Prior License (LP) and Installation License (LI) SDG Is there related target? SDG 3 Yes, to serve all Copel DIS enterprises. No No SDG 5,8,10,11 and 16 SDG 1,10,11 and 16 No No The Programs for Relationship with the Community are carried out for all Copel Distribuição enterprises and integrate the social-economic environment of the environmental studies which are obligatory in the stages of prior and installation licensing. Yes, for defi nition of the program priorities SDG 3 Yes, to serve all Co- pel DIS enterprises. SDG 11 No COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 71 SOCIAL AND RELATIONSHIP CAPITAL Subsidiary Program/ Operation Name Program / Operation description and goal Impacted groups of Stakeholders Number of Impacted people * Is there environmental/ social impact evaluation? SDG Is there related target? DIS Illuminating Generations DIS Eletricomunidade The program aims to take to the communities in the municipalities from Copel´s concession area informative and preventive guidelines on sustainability, conscious and safe use of electric power, use of natural resources (energy and water) and correct destination of residues. The program is sub-divided into projects and actions according to the different segments, popula- tions, cultural differences, needs and expectations (stakeholders), as follows: • Lecture in the schools • Lecture in NGOs • Fairs and external events • Energetic Effi ciency Van • Lecture in companies • Electrifying Stories Theater A set of actions, programs and projects, which aim at sustainable development of the communities, where Copel is present: • Copel in the Neighborhood Program • More than Energy Project • UPS Citizenship • PNighttime Irrigation Rate and Nighttime Rural Rate Program • Fraternal Light Program • Electric Power Social Rate • Live Well Paraná Program • Calamity Benefi t Community Customers Employees Suppliers Community Customers Employees DIS EletriCidadania It aims to encourage voluntary and spontaneous performance of community actions, which, much more than just assistance, lead to sustainable development of the society in all aspects, whether cultural, educational or professional. In 2017, 3,045 volunteer hours were performed. Community Customers Employees The Illuminating Generations Program attended about 63,500 students from the whole State of Paraná. Working also at institutions, companies, fairs and events in the communities, there were about 45 thousand participants • More than Energy Project: Deaf and deaf-blind Community • UPS Citizenship: 556 attendances • Paraná Citizen: 2,000 people • Citizenship Mass Event 1260 • Nighttime Irrigation Rate and Nighttime Rural Rate Program: 16400 CUs • Fraternal Light Program: 158.000 CUs • Electric Power Social Rate: approx. 300,000 CUs • Live Well Paraná Program: 1671 CUs • Calamity Benefi t: 147 CUs 193 employees from Copel DIS registered volunteer hours No No No SDG 4, SDG 7, SDG 11 SDG 1, 2, 3, 4, 7, 8, 10, 11, 12, No No SDG 2, 3, 4, 7, 8, 10, 11 Yes. Percentage of volunteers in relation to the number of employees. In 2017, we achieved 3.96%, excee- ding the target of 3.50%. GeT EIA and RAS * Segmentation of benefi ciaires by gender is not done. In 2017, the GeT carried out activities related to the Social-Economic Impact Assessment and Diagnostic Studies (EIA and RAS) for the following new installations of transmission lines: • LTS 230kV Curitiba Center - Uberaba; • SS Medianeira, • TL 500kV Blumenau - Curitiba North; • TL Baixo Iguaçu - Realeza Sul; • SS Curitiba Center, • TL Baixo Iguaçu - Realeza Sul; • SS Andirá, • TL Andirá Secc 1 e 2 Assis - Salto Grande. Local community No Yes, in accordance with the National Environment Policy and the environmental licensing Not Applicable No COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 72 SOCIAL AND RELATIONSHIP CAPITAL Subsidiary Program/ Operation Name Program / Operation description and goal Impacted groups of Stakeholders Number of Impacted people * Is there environmental/ social impact evaluation? SDG Is there related target? Holding and Subsidiaries Cultivating Energy The program encourages implementation and cultivation of community gardens in empty spaces under the Company´s electric power distribution and transmission lines. Developed in partnership with the city halls and local communities, the Program promotes social inclusion, food safety and generation of income for socially vulnerable communities. The gardens also increase the population´s safety, inhibiting occupation of the high-risk areas under the power lines. Local community 140 families (560 people) Yes, annually, standardized assessment is done through NAC. GET GET GET Audiências Públicas Environmental Awareness Program Program for Relationship with the Community GET Free Line Program Processos de consulta de comunidades locais amplos que incluem Grupos vulneráveis: LT 500kV Blumenau - Curitiba Centro - Foram realizadas duas audiências públicas para a apresentação do empreendimento para as populações locais. Local community No Environmental awareness of the workforce Contractors´ employees 147 employees. Education and environmental awareness of the community Local community 120 people Social treatment of the occupations (housing and economic activity purposes) in safety ranges of transmission lines. In addition to the social approach to the inhabitants, the program provides articulation with the public authority, mainly, the public policies for social assistance, health and housing. Local community 108 people SDG 1, 2, 3, 10, 11, 12, 17 Not Applicable SDG 3,5,7, 11,13, 15 SDG 3,5,7, 11,13, 15 No No Yes, serve all Copel GeT enterprises under construction Yes, serve all Copel GeT enterprises under construction No No No Yes, the social approaches and the effectiveness of the social work through the displacement of the families, who occu- py the area, are assessed. SDG 10, 11 17 Serve all occupations in the safety ranges of the transmission lines involving vulnerable segments. GET GET GET GET Eletricidadania It aims to encourage voluntary and spontaneous execution of community actions, which, much more than just assistance, lead to sustainable development of the society in all aspects, whether cultural, educational or professional. Community Customers Employees 63 employees from Copel GET registered volunteer hours No Free Border Program Social treatment of the occupations at the reservoir borders. In addition to the approach to the inhabitants, the program provides articulation with the public authority. Local community 16 families (64 people) Yes, the cases are monitored periodically. Action for prevention of social emergency in dams Map the population, who lives in the risk area for disaster with the dams and promote registration and awareness for safety issues, escape route and effective communication channels. Local Production Arrangement Program Rural Extension Technical Assistance in 100 family production units and Workshops for qualifi cation in processes for production management, processing and sale for the municipalities around WPP Colíder (Colíder, Claúdia, Itaúba and Nova Canaã do Norte). Local community 34 families (134 people) No Local community 100 families (400 people) Legal requirement, condition for environmental licensing SDG 1, 2, 3 10, 12, 17 SDG 2, 3, 4, 7, 8, 10, 11 SDG 10, 11, 17 SDG 11 and 17 Yes. Percentage of volunteers in relation to the number of No No No * Segmentation of benefi ciaires by gender is not done. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 73 SOCIAL AND RELATIONSHIP CAPITAL Subsidiary Program/ Operation Name Program / Operation description and goal Impacted groups of Stakeholders Number of Impacted people * Is there environmental/ social impact evaluation? SDG Is there related target? CTE Internet without Bullying The Project Internet without Bullying aims at the society awareness about the cyberbullying problem. Bullying the main cause of depression and suicide amount young people. The Project aims to take awareness lectures seeking to commit the students from the state schools in the last years of elementary school. The project is a partnership between Copel Telecom and Abrace Programas Preventivos. It involves employees and volunteers from all Copel subsidiaries, as well as the main suppliers and business partners of CTE. Employees, suppliers, customers, society, government 24 volunteers from the 3 SIs , 430 students (51.2% women and 48.8% men) and their respective parents, 22 teachers, 8 business partners and suppliers. Yes, survey with participants – including by gender SDG 4, 5, 10, 11, 16 and 17 Yes. 8 schools in 2018. Technical support in social actions of the Government of the State of Paraná Copel Telecom provides internet access in events sponsored by the State Government focused on social inclusion and development. The services provided in these events use the connectivity made available by CTE. Thus, the initiatives Justice in the Neighborhood, UPS Citizenship, Paraná Citizen, Protected Child and Adolescent, Citizenship Mass Event are served, which are held in low-income cities or neighborhoods, whose population has poor access to social services, such as issuance of identity documents, legal assistance, among others. Community Customers No EletriCidadania It aims to encourage voluntary and spontaneous execution of community actions, which, much more than just assistance, lead to sustainable development of the society in all aspects, whether cultural, educational or professional. Community Customers Employees 38 employees from Copel Telecom registered volunteer hours: 5.86% of the CTE structure No No LAISA In 2017, CTE applied the tool LAISA – Social-environmental Aspect and Impact Survey – in the macro-processes of the value chain. Not Applicable Not Applicable Connected Paraná Digital Paraná CTE Ombudsman Copel Telecom maintains the customer base of Connected Paraná, access to broadband internet in cities with up to 10 thousand inhabitants and low HDI per subsidized cost (BRL 29.90 - 1 MB). According to the World Bank, availability of internet access to the population provides increase in GDP. Digital Paraná: meeting a Celepar demand, Copel Telecom provides data link to the whole state education network (more than 2200 schools). CTE Ombudsman is a formally established channel, which can be accessed by the community to submit grievances and complaints related to the Copel Telecom operation. Low-income customers In 2017, there were 4,183 customers in 24 municipalities Community – state schools Community and Customers Universe of students registered in the state public education network No No No No CTE CTE CTE CTE CTE CTE SDG 8,10, 16 and 17 No SDG 4, 5, 8, 10, 11, 16, 17 Not Applicable SDG 1, 4, 8, 10, 11, 16 and 17 SDG 4, 10 Not Applicable Yes. Percentage of volunteers in relation to the number of employees. In 2017 we achieved 5.86%. Target 2018 - 10% increase Carry out annual review Maintenance of the benefi ciary base Maintenance of the links in the schools No 74CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXHuman rights issues are inherent in developed by Copel in all its subsidiaries. Since the prospecting of New Business, human rights issues are considered in the feasibility assessments. This process extends in the stage of carrying out the environmental impact studies and / or Re-ports Simplifi ed Environmental Services. During the process of implementation of the projects, Copel seeks to comply with all applicable legal requirements, as well as in meeting the constraints of each pro-ject. Failure to comply with human rights laws can impact the project’s standstill, the loss of the company’s image, and the receipt of sanctions monetary and fi nes.Since its foundation, Copel under-took commitment to defense of the human rights. These are six decades in compliance with the principles of the Universal Statement of Human Rights, which are annually reaffi rmed and de-tailed through other platforms coordi-nated by UN, such as the Global Com-pact, which Copel has signed since its creation, and the Sustainable De-velopment Goals. These are commit-ment, which guide policies, norms and strategies of the Company and aim to protect the rights of all populations in-fl uenced by its activities. Copel does not have centralized management of the issues related to Human rights. Management of the impacts generated by Copel´s opera-tion is carried out by the Environment and the Social Responsibility areas of each subsidiary. Aspects associated with Human rights, such as diversity and accessibility are handled by the Environment Coordination of the Hol-ding. Regarding the activities carried out by suppliers, Copel requires ful-fi llment of the legal obligations in the process of approval of the contractor and during the performance of the contracts by means of requirement of obligatory certifi cates. INDIGENOUS COMMUNITIES The Company develops projects to assure the access of indigenous villa-ges to power. Communities located in environmental preservation units or areas, where it is not possible to take the power distribution grid, receive, for example, photovoltaic panels and trai-ning on effi cient use of power. 411-1 In 2017, 911 indigenous consumer units were enrolled in the Social Rate of Electric Energy (Low Income) and there were no cases of violation of the rights of indigenous tribes. HUMAN RIGHTS 103-1, 103-2 Further information about Copel´s operation in Human rights is available on the Sustainability page of the Company.SOCIAL AND RELATIONSHIP CAPITALNATURAL CAPITAL 75CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 76 NATURAL CAPITAL CLIMATE CHANGES 103-1, 103-2 Climate changes may generate impacts on the power generation, transmission and distribution activities in the sector. For power generation, the predominance of a dependent matrix of water power plants with growth in the participation of renewable sources (wind and solar), considered intermittent, the ef- fects from the climate change may impact the generation capacity directly. In relation to transmission and distribution, extreme clima- te events impact directly the operation and the maintenance of the systems, and conse- quently, the power supply. Copel´s commitment to sustainable develo- pment of its business is refl ected in its structu- re for administration of climate change impacts. Incentive to renewable sources of generation of clean energy and contribution to the diversifi ca- tion of the energetic matrix in the country is pre- sent in the expansion projects in the Company. Its Climate Change Policy, implemented in 2016, provides guidelines to support the Mana- gement Committee´s functions and actions, for example, in addition to those already mentio- ned above, it promotes incentive to innovation for reduction of Greenhouse Gases (GHG) and adoption of low-carbon technology. Copel instituted a Management Committee responsible for the Corporate Climate Chan- ge Management Program, which assures that all employees and the Administration work in compliance with the assumed commitments. Incentive to renewable sources of generation of clean energy and contribution to the diversifi cation of the energetic matrix in the country is present in the expansion projects in the Company. This Committee is composed of all executive offi ces and subsidiaries and there are three sub-committees: Emission Management and Mitigation, Adaptation and Carbon Valuation. Among its activities, the following stand out: follow up the fulfi llment of the commitments approved by the Administration, encourage ac- tions that promote reduction of GHG, assess risks and opportunities and actions for adapta- tion of the business to the climate change. The Committee shall equally participate and contri- bute with debates and external events, which seek new ways and solutions for the society to handle the new climate scenario. Physical Nature Further information about the Climate Change Program and the commitments and the targets undertaken by Copel is available on the program page Regulatory Upon implementation of the Policy, the cli- mate changes were included in the risk analy- sis, the fi nancial evaluation and the opportuni- ties for the Company´s business, in addition to encouraging low-carbon technologies. The risks associated with the climate changes, the respective factors and fi nancial impacts are presented below 201-2 RISKS AND OPPORTUNITIES ASSOCIATED WITH CLIMATE CHANGES Risks: Factors Description Financial impacts (qualitative and quantitative) Extreme weather Increase of the maximum temperatures in the North of Paraná Estimated fi ne pursuant to non-supply of energy is about U$ 2,000/MWh non-distributed. Tropical thunderstorm Increase of thunders in the North and West of Paraná No financial impacts were estimated related to replacement of towers in operation or use of more resistant towers in new projects. Charge for emission Charge of emission rate may impact part of the sector, which invests in thermal power plants Amount under 1% of the net operational revenues is estimated, considering that the current thermal generation is not signifi cant. Carbon Market Mechanisms Cap and Trade The power sector can be one of the selected to introduce this kind of mechanism. Copel participates in carbon simulation initiative, which estimates BRL 30.00 per ton of equivalent CO2 emitted. Considering this assumption, Copel would pay 3.6 million for compensation of the GHG emission Other nature Reputation Interruption of the power supply generates consumers non-satisfaction The fi nancial impacts of this risk were not estimated. 77CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIX OpportunitiesFactors DescriptionFinancial impacts (qualitative and quantitative)Physical NatureExtreme weatherTemperature increase may generate increase of the consumption demandNon-measurable. The adaptation studies have not been spread for market analysis yet, and for the time being, they are focused on operational analysis.RegulatoryCarbon Market Mechanisms Cap and Trade Option to purchase carbon credits or change its processes or buy clean renewable power.Impact study under development.RegulatoryCarbon Market Mechanisms Cap and Trade Option to purchase carbon credits or change its processes or buy clean renewable power.Impact study under development.GREEN GAS (GHG) EMISSION MANAGEMENT 305-1, 305-2, 305-3 Since 2009, Copel has invested in prepa-ration of annual inventory of GHG emissions following the methodology of the Brazilian GHG Protocol program. The management of the emissions from its establishments focu-sed on reduction is one of the commitments undertaken by the Company in the Corporate Climate Change Management Program. For this purpose, the Company invests in resear-ch and development actions, provides incenti-ve to renewable sources in the expansion plan and implements initiatives aimed at emission reduction in the Eco-effi ciency Program (see more on page 80). 103-2 NATURAL CAPITAL COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 78 NATURAL CAPITAL In 2017, the emissions of the Holding and its wholly-owned subsidiaries were conside- red, as presented in the table below: By type of gas (tCO2e) Scope 1 Scope 2 Scope 3 CO2 CH4 N2O HFCs SF6 Total 223,554.301 319,791.701 2,641.853 118.525 1,068.628 46.270 2,234.400 0 0 0 0 3,442.325 91.486 0 0 227,022.124 319,791.701 6,175.664 CO2 biogenic (t) 2,820.974 - 281.174 ciated with this source are pursuant to the building of WPP Colíder. Upon the completion of the vegetation suppression, the emissions from this source dropped, which led to reduc- tion in the last inventory. Scope 1 considered its own sources of emissions from stationary and mobile combustion, fugitive emissions, in- dustrial effl uents and soil changes. In 2017, 2.86% emission reduction was verifi ed, considering the reduction in the con- sumption of coal and the completion of the vegetation su- ppression activities in Generation and Transmission. Scope 2 considered emissions from consumption and loss of energy. Compared to 2016, there was 7.71% incre- ase in emissions, due to the increase of the grid emission factor, despite of the reduction in energy consumption and pursuant to the increase of the losses in power transmis- sion and distribution. Scope 3 emissions were considered to be transport of employees, air travel, transport and distribution (upstream), and waste from the company. In relation to suppliers, Copel has made its contractors aware to report their emissions and adopt measures to reduce the emission in their activities. The inventory will be verifi ed by external unit and afte- rwards, it will be published in the public GHG Protocol re- cords and the Paraná climate change forum. 103-3 Since the emission report 2017, it is manda- tory to report the source – change in the use of soil, for calculation of scope 1, impacting the results from the last year. The emissions asso- ATMOSPHERIC EMISSIONS In relation to atmospheric emissions, the results come from Thermal Power Plant Figueira, verifi ed upon six-month monitoring according to the requirements of the responsib- le environmental body (IAP), and the values obtained in the measurement campaigns are followed up18 305-7 Types of emissions 2015 2016 2017 Emissions of NOx (t) 583 709 2,510 Emissions of SOx (t) 4,797 2,764 15,344 Emission of Persistent Organic Pollutants (POP) (t). 0 0 Emission of Volatile Organic Compounds (COV) (t). 0.42 0.2 Emission of Hazardous Air Pollutants (HAP) (t). 0 0 0 0 0 Emission of Particulate Matter (MP) (t). 229 709 277 In 2017, the concentrations of atmospheric emissions were higher due to the results from the measurement of TPP Figueira. The values in 2017 are out of the historical se- ries, and met the norms in force partially, considering that the particulate matter and the nitrogen and sulfur oxides ex- ceeded the maximum allowed threshold. The modernization of the power plant, which is in progress will signifi cantly re- duce the emission indexes. 18 The atmospheric emissions from Copel´s vehicle fl eet are not considered for being little signifi cant. 79CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXIn 2017, Copel continued the actions of the Adaptation Sub-committee, highlighting the completion of the pilot study carried out with Fundação Getulio Vargas (FGV), whose object was the effects of the climate changes on the high voltage lines of Copel DIS in the region of Paranavaí and Apucarana. After vulnerabili-ty analysis with the operation, maintenance, environment, fi nancial and labor safety areas, it was identifi ed that by 2040, these areas will be exposed to higher wind speed and tem-perature increase, with possibility to impact the distribution operation and maintenance in these areas. The preparation of the risk matrix indicated two impacts, which might be signifi -cant in the future: • Increase in collapse of transmission structures built with wind project at 60 and 80 km/h.• Higher overload on lines and transformers, with full incapacity to supply energy. Considering the possibility of occurrence of the mentioned impacts, adaptation options were gathered, which can be applied in the stu-dy area. The main considerations were: • Regarding the increase of the wind speed/frequency: performance of RD&I projects, which enable improving both the meteorological and the structure mo-nitoring. When replacement of towers is necessary due to the climate effects, hi-gher resistance towers are used.• Regarding temperature increase, it was identifi ed that new parameters shall be considered for the projects to be demanded, considering the tempe-rature increase. Upon completion of the study, Copel is in-ternally developing a methodology for survey of vulnerability related to climate change, whi-ch help in the preparation of risk matrixes for the Company´s businesses, as well as in the planning of measures for adaptation for enter-prises in operation and under planning. CARBON VALUATION 103-3 In 2017, Copel continued the studies about carbon pricing within the attributions of the Climate Change Committee. The Company has already adopted internal reference value, which is used by the Business Development Executive Offi ce in simulation made for the Company´s projects, supporting the risk as-sessment and fi nancial opportunities to what refers to climate change.As study measures, the Company has in-vested in the employees´ participation in dis-cussion forums, such as the Brazilian Business Council for Sustainable Development (CEBDS) and GVces Companies for Climate (EPC), and in the simulation of a carbon market coordina-ted by EPC, which uses the BVRio platform. In 2017, Copel participated in the Parana Climate Change Forum, which approached the Carbon Pricing topic: opportunities and challenges for Paraná. At the occasion, a case study about the impacts of the carbon pricing on the indus-trial sector was presented. In general, in 2017, Copel was recognized for its Climate Change management with the Climate seal of the Go-vernment of the State of Paraná.ADAPTATION TO THE CLIMATE CHANGES 103-3 NATURAL CAPITAL COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 80 NATURAL CAPITAL ECO-EFFICIENCY ECO-EFFICIENCY PROGRAM The management of the natural resources is present in all Copel´s operations, conside- ring the possibility to impact the business and the society significantly during the processes of implementation and operation of the esta- blishments, as well as in providing services and maintenance of the administrative facili- ties. Thus, the Eco-efficiency Program, in for- ce since 2014, aims to support projects for reduction and better use of natural resources, making the different areas in the Company aware and complying with the strategic guide- line to obtain cost, process and quality excel- lence. 103-1 Aligned with the Copel´s Sustainability Policy, under an integrated view of Copel´s project, good management of natural resources is a relevant fac- tor in the Company´s competitiveness, conside- ring its current assets and the prospection of new businesses. Thus, the actions in the Eco-effi ciency Program are concentrated in fi ve thematical lines: power, water, paper, mobility and fuel, education and communication. The program management team is responsible to follow up the effectiveness of the initiatives, setting targets associated with reduction of the consumption of water, electricity, fuel and materials (paper). 103-3 The success of the Program is associated with the direct engagement of Copel´s employees and partners, and for this purpose, the following events and trainings were done in 2017: • I Eco-effi ciency Workshop in Ponta Grossa, to prepare an action plan to make the Company’s facilities more eco-effi cient. The event gathe- red 18 employees and established actions to be developed in 2018. • Copel Culture and Sustainability Seminar, held in Londrina in relation to the World Environment Day. At the occasion, the results from the pro- gram were presented for 88 employees, who participated, as well as representatives of part- ners from the community, Funai and the Kain- gang Memory and Culture Center. • Video-conference training with the purpose to guide, qualify and support discussions about the sustainability topic between Copel and suppliers. A total of 340 employees and exter- nal audience formed by suppliers and contrac- tors´ employees participated, and watched the lectures over the internet. The main results of the program in its operation fronts are presented below: WATER CONSUMPTION 103-2, 303-1 The Eco-Effi ciency Program provides the mana- gement of the water consumption in Copel´s ad- ministrative units. The withdrawal of water from underground and surface sources used in power Generation, Transmission and Distribution are controlled directly by the subsidiaries. In relation to the administrative water consumption, incre- ase approximately 8% compared to the previous year was recorded – representing approximately 10,000m³ – considering only the water supplied by Sanepar, which did not impact non-achieve- ment of the reduction target set for 2017 at 2%. One of the causes of the increased con- sumption was the installation of water purifi ers connected to the supply network. Until the end of 2016, drinking fountains with mineral water bottles were used. It is estimated at throughout 2017, about 1,920m3 of water have been consu- med through the new drinking fountain system, representing 18% increase in consumption. In 2017, the total water consumption in the administrative units located in Paraná was 146,519m3. Source of water withdrawal consumption (m³) 2015 2016 2017 Surface sources 107,606,193 99,481,216 147,268,823 Underground sources 24,19319 22,75020 76,75521 Rain water 138 - 108 Municipality supply and other public and private companies 108,803 112,928 146,519 Total 107,739,327 99,616,894 147,492,205 19 Considering consumption in the administrative facilities. 20 Likewise 21 Considering consumption in the administrative facilities and the operations COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 81 NATURAL CAPITAL The actions in the Eco-effi ciency Program are concentrated in fi ve thematical lines: power, water, paper, mobility and fuel, education and communication. Regarding the management of the volume in the reservoirs, Copel maintains hydrological monitoring network in the watersheds, where there are water power plants operating. The ne- twork is composed of different hydrological sta- tions, where data is collected about the level of water in rivers and reservoirs and pluviometric data. This data, after processing in the Reservoir Monitoring System (SMR), help and guide the operation of the water power plants. Such data is available at Copel website. Furthermore, Copel Geração e Transmissão monitors the quality of the water in all reser- voirs and rivers, which serve the power plants operations, in compliance with the conditions in the Operation Permits. Mostly, monitoring is carried out quarterly in three points (located downstream, in the reservoir and upstream the generation enterprise). The purpose of the mo- nitoring is to assess the ecological conditions and the oscillation of the trends of the water quality parameters in long terms. The reports on this monitoring are delivered annually to the Pa- raná Environmental Institute (IAP). The volume of water of surface cour- ses captured in 2017 was 147,268,823m3. The captured water was used for cooling in power plants. For water power plants, the loss of water by evaporation in the cooling system is considered irrelevant for being a closed system 303-2 The volume returned to the water body is virtually the same as that captured at the sour- ce, because there are only low losses by eva- poration, not considered as water consumed by the Company. Despite of representing low volume of wa- ter withdrawal, Copel Distribuição and Copel Geração e Transmissão present their consump- tion results by pluvial sources, namely 34.43m³ and 38.2m³, respectively. The use of rain water was possible upon implementation of tanks in Castro, Jaguariaíva, Londrina, Telêmaco Borba and São Mateus. For 2018, the reduction target is 1% in administrative consumption, and the following strategies are provided to support its achievement: • Recommend adaptation of the building fa- cilities, where there were no: automatic closing faucets, double fl ush valves and installation of hydrometers on the tanks and the artesian wells; • Research of new technologies and equi- pment, which contribute to reduction of the water consumption in toilets and urinals; • Local and regional management of water consumption; and • Awareness campaigns. RESERVOIRS AND QUALITY OF THE WATER In the reservoirs and respective surroun- dings, Copel monitors possible environmental intervention and works with specifi c measures to solve identifi ed irregularities regarding irre- gular building in the concession area, launch of effl uents, stability of slopes, use and occu- pation of Permanent Protection Areas and ille- gal hunting and fi shing. To help in the process of preservation of the areas of relevant envi- ronmental interest, the Company maintains agreement with the Environmental Police De- partment of the State of Paraná, participates actively in the Watershed Committees and the National and the State Water Resources Coun- cil, monitoring the water situation in the rivers, where it has its reservoirs, in real time, in addi- tion to monitoring the quality of the water. Copel´s main impact on the water resour- ces is the change in their natural fl ow condi- tions due to the construction of water power plants. For this purpose, the Company works on the management of the social-environmen- tal impacts of its enterprises – since building to the operation phase, carrying studies out, mitigating impacts and risks and complying with the pertinent environmental legislation. In order to assess part of these impacts, Copel takes and analyzes quarterly samples of the water from the reservoirs of the power plants to monitor their quality through 25 physical- -chemical and biological parameters, including the parameter “temperature”, which is respon- sible for the water to return to the river cour- se after the plant cooling. Copel also monitors the quality of the water in the river before star- ting the construction of a new enterprise. Such monitoring includes analysis of sediments and agricultural chemicals, where the analyzed pa- rameters are much more. 303-2 82CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXELECTRICITY AND FUEL CONSUMPTION 302-1 The Eco-Effi ciency Program consolidates the data on electricity consumption sent by Co-pel Distribuição. The information comprehends virtually all Copel´s facilities in Paraná, except for the facilities in other states, such as São Paulo, Mato Grosso and Rio Grande do Norte. It shall be highlighted that the consolidated data inclu-de substations, which are big power consumers and have their consumption estimated. 103-2 In 2017, Copel recorded total consumption of electricity at 33,136.8 MWh, considering Generation, Transmission, Distribution, Tele-communications and Holding. The table be-low presents the electricity consumption in 2017 and in the last two years. For 2017, Copel assumed a target to redu-ce electricity consumption by 2%, and 11% growth was recorded at the end of the year. The inclusion of the substations, where the-Electricity consumption (MWh)201520162017Copel Telecomunicações535.2656.4674.6 Copel Distribuição S.A.23,498.2021,16024,912.6 Copel Geração e Transmissão S.A22 8,324.57,840.47,321.8 Holding87.1186.4227.8 Grand Total32,44529,84333,136.8 22 The results from 2015 and 2016 were adjusted considering the incorporation of Copel Renováveis by Copel Geração e Transmissão.Type of fuelConsumption (GJ)NON-RENEWABLE SOURCESCoal (TPP Figueira)*1,926,305.16Diesel**162,287.43LPG***68,375.53Gasoline36,972.11Aviation Kerosene2,994.21RENEWABLE SOURCESEthanol12,647.72Total2,209,582.16* Coal is used to produce electricity in a thermal power plant. ** Total diesel used in transportation and emergency generating sets. *** Total consumption in the company’s forklifts and kitchens. Ethanol, gasoline, LPG and aviation kerosene are the fuels used in the Company’s own means of transport.re is no regular measurement, might be the cause of the consumption increase compared to the previous year. For 2018, the reduction target was set at 2%, considering the imple-mentation of the following guidelines:• Identify places, where installation or review of automatic sensors is pertinent, with cost and return on investment analysis;• Evaluate the possibility for separate me-asurement in facilities, where there are equipment units with high energy con-sumption; and• Provide local and regional management of the energy consumption.In the same period, Copel consumed 2,209,582.16 GJ of power in its operation. The values corresponding to fuel con-sumption by the Company by type of fuel are presented below.Among the highlighted initiatives of the Eco-Effi ciency Program, there is the campaign for encouraged used of ethanol in the dual fuel vehicles of Copel Distribuição, Geração e Trans-missão and Telecomunicações. Launched in Au-gust 2017, the campaign presented short-term results with reduction in gasoline consumption and increase in ethanol consumption. Another initiative for reduction of the fuel consumption was the incentive to use video--conferences. Between December 2016 and December 2017, more than 6 thousand meetin-gs were held by video-conference at Copel. The performance of each meeting avoided an avera-ge of 270 km, representing total savings of 140 thousand liters of fuel (considering gasoline) and emission of about 290 tCO2e.NATURAL CAPITAL COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 83 NATURAL CAPITAL PAPER CONSUMPTION Copel keeps control on the copy printing data obtained by means of reports presented by the company providing the service. The monthly report includes data, such as printing quantity, billing amount, attendance and other management information. The main actions carried out in 2017 to reduce paper consump- tion and printing were corporate notifi cations encouraging the use of double mode prints (both sides of the sheet). In 2017, two targets were defi ned for the use of this resource: • Achieve 40% double prints by Dec/2017; and Achieve 50% double prints by Dec/2018. • The absolute number of prints has dro- pped in the last years, and the reduction was of approximately 15% from 2015 to 2017. In relation to the double printing, the annual mean was 39.82%, close to the 40% target. In 2017, Copel saved 3,701,352 sheets of paper by using double printing. This number is equal to 7,402 reams or 740 boxes of pa- per. It would correspond to approximately The waste management at Copel is ba- sed on the Corporate Waste Management Program, whose purpose is to reduce gene- ration, value the disposed material and pro- mote reverse logistics. All processes adop- ted by the Companhia are in compliance with the National Solid Waste Policy and all relevant legislation and standards in force. The waste generated in the company’s operations is duly segregated, packaged and sent to one of the warehouses, where it is stored until disposal. In 2017, most of the ge- nerated waste was sent to recycling through the alienation process. The chart below de- monstrates the destination of the waste:: Copel keeps the following waste destina- tion targets for 2018: • 95% of the industrial waste from Distribu- tion submitted to reuse or recycling; and Destination (in tons) Hazardous Waste Non-Hazardous Waste 490 trees, as described in the Internatio- nal Featured Standards (IFS): 1 tree = 7,500 sheets of paper. Recycling Composting Incineration WASTE MANAGEMENT 103-2, 306-2 Autoclaving + Landfi ll (class II) Landfi ll Co-processing Total 5,490.30 - 0.05 0.76 - 33.04 5,524.15 45,877.40 31.10 - - 20,688.40 3.75 66,600.65 • 60% of the industrial waste from Ge- neration and Transmission submitted to reuse or recycling (ash not included). As a good practice, the Company main- tains the Solidary Waste Segregation pro- gram, which consists is destination of the re- cyclable administrative waste to associations and cooperatives of recyclable materials re- gistered by means of Public Call. The initiati- ve plays an important social role upon stren- gthening and protagonist of the collection entities, which are considered fundamental tools for the fulfi llment of the National Solid Waste Policy. In 2017, more than 100 tons of recyclable waste was sent to collection as- sociations and cooperatives in Paraná, bene- fi ting 331 families and generating estimated income at BRL 29 thousand. In 2017, Copel Telecomunicações kept the project for recycling lead batteries and optical fi ber cable waste with the purpose to reduce the impacts to the environment, create oppor- tunities to generate income and fulfi ll the Na- tional Solid Waste Policy. In relation to service providers, a clause was included in the con- tracts for correct destination of waste classi- fi ed as work leftovers. 84CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXECOSYSTEMS 103-3, 304-1, 304-2 Copel Distribuição and Copel Geração e Transmissão have 82,146 km high voltage dis-tribution lines (69 and 138 kV), which affect preservation units from the Full Protection of the State of Paraná, according to the National Preservation Unit System (SNUC).MITIGATION OF THE IMPACTS CAUSED BY PROJECTS Power generation, transmission and distri-bution projects may generate impacts on the ecosystem in the region, where they are situ-ated. According to its principles and the envi-ronmental legislation in force, Copel carries out environmental studies before starting the ins-tallation of new enterprises. The results from these studies enable elaboration and execution of environmental projects and programs aiming to avoid, mitigate or minimize the negative im-pacts and maximize the positive impacts from their enterprises. 103-1 GENERATION ENTERPRISES The installation of generation enterprises pro-vokes changes in the environment of a region, with impacts on the physical, the biotic and the social environment. There might be changes in some ecological processes, modifi cations in the fauna and fl ora species, impacts on the popu-lation´s way of life and on the historical-cultural heritage. To mitigate these possible impacts, Co-pel carries out programs for monitoring and res-cue of fl ora and fauna, recovery of Permanent Preservation Areas (APPs), re-foresting, arche-ological monitoring and rescue, among others. Several programs are carried out in the phase of implementation of the enterprise and others are broken down to the operation phase as well. 103-2 It shall be highlighted that the enterprises undergo inspections and periodic studies for preparation of Technical Reports, which enable constant follow-up of the environments, ena-bling preservation and correction of possible impacts, in addition to keeping the responsi-ble environmental bodies informed about the status of the enterprise. 103-3 NATURAL CAPITAL 85CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXTRANSMISSION AND DISTRIBUTION ENTERPRISESThe power transmission and distribution enterprises have their main impacts concen-trated in the phase of implementation, when there is vegetation suppression for their ins-tallation. This process may increase forest fragmentation of the environments and lead to reduction of the native species caused by the increase of the border effect, reduction of fauna habitats, increased hunting in the region, etc. In the operation phase, for power distribu-tion, oil leakage from the transformers is con-sidered a risk to the biodiversity to what refers to pollution. The oil substances, if not contai-ned, contaminate the soil and the water table, impairing the water and the land biodiversity. In this context, Copel keeps preventive mea-sures to avoid spillage. In the distribution lines and the substations, exotic, invasive exotic and other opportunist species might be favored due to the opening of clear passages to build structures and launch cables. 103-1 Internally, Copel carries out Prior Environ-mental Analysis to check whether there are social-environmental restrictions for the selec-tion of land for the implementation of power substations. This study considers social-envi-ronmental aspects in the enterprise concept phase. For the defi nition of the route of its transmission lines, multi-functional analysis is carried out, seeking the lowest possible im-pact on the natural environment, but also con-sidering the economic and the social issues of the selected route. However, in some ca-ses, it is not feasible to deviate the line rou-te from forest fragments. For this reason, the current projects seek to minimize vegetation suppression only to the strictly necessary to build the project – sometimes, restricted only to the opening for cable launching – and to provide use of high structures to reduce the impact on the vegetation, whenever possible. In some cases, to minimize suppression, the cables are launched by drones, thus, avoiding low cutting of native species.It shall also be highlighted that, in order to avoid or reduce the negative impacts in its works, Copel has provided environmental pro-grams, such as Vegetation Suppression Moni-toring and Control, Forest Restoration, Erosive Process Monitoring and Control and Driving out and Rescue of Fauna, whenever applicable to the enterprises. In medium voltage distribu-tion lines, the use of compact grids reduced the need to prune trees..In 2017, Copel Distribuição elaborated a Simplifi ed Environmental Report (RAS) for three substations and thirteen High Voltage Distribution Lines (HVDL), and a Detailed En-vironmental Program Report (RDPAs) for four substations and seven HVDLs, in addition to Forrest Inventories (IF) for eight HVDLs. In none of these studies highly relevant impacts on biodiversity were identifi ed. 103-2 In 2017, Prior Environmental Analysis was car-ried out for four substations 34.5 kV and 138 kV.Copel Geração e Transmissão S.A. elabora-ted RDPAs for six projects and eight Forest In-ventories. It also completed the elaboration of the Environmental Impact Study and the res-pective Environment Impact Report (EIA/RIMA) for a Transmission Line, and held public hearin-gs, which are part of the process necessary to obtain prior license (LP) of the enterprise.It also be highlighted that ICMBio appro-ved the work plan of the pilot project for In-tegrated Vegetation Management in progress for the high voltage distribution line projects passing through the National Park Saint-Hilai-re/Lange (HVDL 138 kV Posto Fiscal - Mati-nhos, Guaratuba - Matinhos and Posto Fiscal - Guaratuba) at the Paraná sea coast, which reduced the need to cut in these areas and the environmental impacts caused by this ac-tivity. In the future, the project can be applied to other preservation units, as well.The establishments of Copel Telecomuni-cações are concentrated in Paraná and it sha-res the infrastructure with Copel´s transmis-sion and distribution subsidiaries Copel. NATURAL CAPITAL COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 86 FOREST COMPENSATION 103-3, 304-3, G4-EU13 Since 2012, Copel Geração e Trans- missão and the Environmental Institute of Paraná (IAP) work in partnership in the production of native forest seedlings for restauration of Permanent Preservation Areas, Legal Forest Reserves and Forest Restoration Areas of the State of Paraná. Copel is responsible to grant contractors´ work posts to dedicate exclusively to pro- duction of seedlings. Another relevant partnership of Copel Geração e Transmissão is with the Environ- mental Police Department (BPAmb) to assu- re agility and effectiveness of the actions for protection of permanent preservation areas around its reservoirs, acting preventively to protect water bodies, fauna and fl ora. Also in the scope of forest compensa- tion, Copel Geração e Transmissão is res- ponsible to protect and restore habitats in the following areas: SUSTAINABLE USE UNITS: Guaratuba State APA: 3,513.34 hectares between the municipalities of São José dos Pinhais and Tijucas do Sul (Paraná); 8,798.70 hectares between the municipalities of São José dos Pinhais and Guaratuba (Paraná); 812.14 hectares between the municipalities of Guaratuba, Morretes and São José dos Pinhais (Paraná). Escarpa Devoniana State APA: 88.72 hectares between the municipalities of Ponta Grossa and Carambeí (Paraná) and 40.10 hectares in the municipality of Castro (Paraná). FULL PROTECTION UNITS: Pico do Marumbi State Park: 225.98 hectares in the municipality of Morretes. Pico do Paraná State Park: 865.18 hectares in the municipality of Antonina (Paraná). Tia Chica Ecological Station: 423.12 hectares between the municipalities of Candói and Reserva do Iguaçu (Paraná). Rio dos Touros Ecological Station: 1,231.06 hectares in the municipality of Pinhão (Paraná) Rio Guarani State Park: 2,235 hectares in the municipality of Três Barras (Paraná) NATURAL CAPITAL The actions developed in these areas have not been assessed by external specialists. Due to the vegetation suppression in dis- tribution lines and substations, Copel Distribui- ção carried out compensating actions for forest restoration by donating seedlings to be planted by third parties and delivering seedlings to city halls to be planted in urban areas, totaling 430 native forest seedlings and 1,345 urban affo- restation seedlings. URBAN FOREST PROGRAM Copel supports the city halls in the plan- ning of afforestation of public roads since 2007, contributing to environmental improve- ment of the cities and reduction of the inter- ruption of power supply caused by incompa- tibility of the trees with the electric systems. The initiative is focused on own produc- tion of seedlings in the Company´s forest gardens. Thus, in addition to serving the in- terested municipalities, the compensatory measures are also met. More than 41 thou- sand seedlings have already been planted for street afforestation. The afforestation seedlings are supplied through term of donation with charges. In the period, 895 seedlings were delivered to three municipalities and documentation was recei- ved for seedling supply to 24 municipalities will be delivered at the beginning of 2018. The produced seedlings are also used to meet the conditions for environmental licen- sing. In 2017, the conditions for the projects in the municipalities of Mandaguari (1,015 see- dlings) and Lapa (200 seedlings) were met. In the period, Copel DIS Innovation Com- mittee approved the R&D Project “Urban forest management – Improvement of the pruning activities under electric systems”, presented by the Forest Research Foundation (FUPEF), who- se project is under elaboration. As a result from the participation of Copel DIS in the Work Group Thesis – Trend in Eco- -system Services in the Sustainability Study Center (GVCes) at Fundação Getulio Vargas, the study “Assessment of the results from the Urban Forest Program in terms of regulation of the global climate” was published in 2017. 87CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXTHREATENED SPECIES 103-3, 304-4 Copel GeT carries out different actions in relation to threatened species in the are-as infl uenced by its enterprises, according to the group it belongs to. For water fauna, Copel GeT keeps continuous monitoring on the ichthyofauna in its reservoirs. Monitoring enables identifying the presence of invasive species and follow up their populations. By monitoring in water power plants in stage of installation, Copel GeT seeks to identify the changes in the ichthyofauna as a consequen-ce of the damming and the change in the characteristics of the water body. Monitoring enables Copel GeT to keep the environmental bodies and the society informed about long--term changes in the fi sh populations. Along its monitoring activities, Copel GeT recorded presence of eight species of threa-ten fi sh detected in the watersheds, where Copel maintains power plants. It is an esti-mation based on the information about fi sh species in continental waters considered so-mehow threatened by the Red Book of Thre-atened Fauna in the State of Paraná. For this purpose, the watersheds, where Copel GeT has power generation enterprises operating today, have been considered, crossing this information with the distribution of the fi sh mentioned in the Red Book for the same wa-tersheds. The species indicated in the Red Book of Threatened Fauna in the State of Pa-raná are not registered in IUCN Red List. By now, the monitoring of the ichthyofauna in WPP Colíder, a power plant in process of ins-tallation in the basin of the Teles Pires River in Mato Grosso, has not registered any thre-atened species. As compensation measure, Copel maintains an Experimental Stations for Ichthyological Studies since 1996, who-se juvenile fi sh production is destined to the reservoirs in the Iguaçu River. The target for 2017 was to produce 120,000 juvenile fi sh and it was exceeded with production reaching 124,367 native fi sh. Furthermore, in 2017, the company provided approximately 15 thousand native fi sh for external events, contributing to the environmental education around the Igua-çu River and other watersheds. The target for 2017 was to produce 120,000 juvenile fi sh and it was exceeded with production reaching 124,367 native fi sh.NATURAL CAPITAL COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 88 NATURAL CAPITAL In relation to the land fauna, upon imple- mentation of enterprises, Copel GeT carries out programs for survey and monitoring of the fauna. In addition to monitoring, Copel GeT car- ries out specifi c programs for rescue and re- location of fauna for installation of enterprises with potential impact on the land fauna during the activities, such as vegetation suppression and reservoir fi lling. Copel GeT is also a pioneer in rescuing and relocation of native bees, and it started this kind of activity in the installation of WPP Mauá in the Tibagi River. In the works on survey and management of wild animals contracted by Copel GeT, 47 land fauna species, considered somehow threatened in the IUCN Red List, have already been registe- red, 42 according to the Red Book of Threatened Fauna in the State of Paraná and 28 according to the Red Book of Threatened Brazilian Fauna. The data validation was done by comparing the pre- servation status to the most recent documents evidencing monitoring and rescue of fauna. Regarding fl ora, as for land fauna, Copel GeT contracts specialized teams to carry out survey programs, monitoring and rescue of fl ora (germplasm) in areas affected by the en- terprises during the installation phase. Copel GeT also carries out actions for re-composi- tion and maintenance of the Permanent Pro- tection Areas (APP) of its reservoirs with nati- ve species for each region. To register threatened fl ora species, the data from the monitoring, rescue and forest re- -composition programs of the different enterpri- ses were crossed with that from two sources: The National Offi cial List Threatened Flora Spe- cies of the Ministry of Environment (MMA) and the Brazilian Environment and Water Resources Institute (IBAMA), and the IUCN (International Union for Nature Conservation) Red List of Thre- atened Species. In general, until now, 36 fl ora species were registered in the IUCN Red List and 17 species were found in the MMA List. For Copel Distribuição, in the elaboration of the Simplifi ed Environmental Report (RAS) and the Forest Inventory (IF), the species po- tentially present in the areas of infl uence and those indicated for suppression are classifi ed regarding the state of conservation. A summary of the threatened species re- cord, according to group, list and degree of thre- at, is provided in the table below: NUMBER OF THREATENED SPECIES RELATED TO THE AREAS OF INFLUENCE OF COPEL GET ENTERPRISES, ACCORDING TO GROUP, LIST AND DEGREE OF THREAT. Subsidiary Group List DD Insuffi cient Data LC Less Worrying NT Almost threatened VU Vulnerable EN In Danger CR Critically in Danger TOTAL Threat Status GeT GeT GeT DIS ICHTHYOFAUNA LAND FAUNA FLORA FLORA PR IUCN PR BR IUCN MMA IUCN - 10 16 - - - - - 27 - - - - 1 - 14 3 - - 23 2 7 16 13 20 - 2 1 1 6 4 6 11 8 2 - 2 9 3 5 3 1 8 75 45 29 16 36 7 Legend: IUCN PR IUCN Red List of Threatened Species Red Book of Threatened Fauna in the State of Paraná BR Red Book of Threatened Brazilian Fauna MMA National Offi cial List Threatened Flora Species INFRASTRUCTURE CAPITAL89CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 90 INFRASTRUCTURE CAPITAL GENERATION AND STRATEGIC PLANNING ASSETS Copel operates 28 own power plants and participates in 3 other power plants, 17 of which are Hydroelectric plants, 12 wind farms, and 2 Thermoelectric plants, with to- tal installed capacity of 5,313.4 MW and Physical Guarantee of 2,430.3 MW aver- age. In 2017, the net power production was 20,453.09 GWh. G4 DMA EU1, G4 DMA EU2 To assure power availability and reliability, the Generation Operation and Maintenance (O&M) processes are based on management model supported by reliability techniques, where, through cause and effect analysis, it is possible to defi ne the perfect policies for fail- ure management to avoid or restrict the con- sequences from functional failures and its re- lations (heath, environment, safety and cost). For distribution, to assure power reliability and availability in Copel´s system is a part of a process, which involves medium and long- term planning of the networks, as well as dif- ferent short-term actions, called Distribution Network Operation. G4 DMA EU6 Generation Park Physical Guarantee by Source Generation Park projection for 2019 Physical Guarantee by Source 6% 9% 10% 8% 85% 82% HYDROELECTRIC PLANTS THERMOELECTRIC PLANTS WIND FARMS COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 91 INFRASTRUCTURE CAPITAL POWER PLANT AVAILABILITY In the generation activities, the indicator of average availability of the power plants is monitored. The indicator measures the number of hours of interrupted generation. G4-EU30 AVERAGE AVAILABILITY FACTOR 2015 2016 2017 Total planned interruption hours 42,265 21,916 28,426 Total forced interruption hours (non-planned) Own Hydroelectric plants Hydroelectric Plants with capital shares of Copel Thermoelectric Plants Thermoelectric Plants with capital shares of Copel 36,048 18,672 11,290 0.90 0.96 0.78 0.89 0.92 0.96 0.70 0.89 0.96 0.94 0.81 0.98 HIGHLIGHTED GENERATION PROJECTS • Colíder Hydroelectric Power Plant: The building of the power plant locat- ed on the Teles Pires River between the municipalities of Nova Canaã do Norte and Itaúba in Mato Grosso started in 2011 and shall absorb BRL 2.1 billion investment. In 2017, 94% of the works were already completed. Co- pel Geração e Transmissão conquered the concession for implementation and exploration of the power plant for 35 years in the power bid made by Aneel on 07/30/2010. The installed capacity of the enterprise will be 300 MW, and the forecast to start commercial has been reviewed, providing that the fi rst generating unit will start operation in May 2018, while the third and last generating unit is scheduled to start operation in November 2018. • Modernization of the Figueira Thermoelectric Plant: The Company started the works on the modernization in 2015, aiming to increase its effi ciency and reduce the emission of gases and particles resulting from the coal fi ring. After the replacement of the supplier, who had fi nancial diffi culties, the completion of the works is scheduled to the end of the second half-year 2018 • Cutia and Bento Miguel Wind Complexes: The biggest wind enterprise of Copel is under construction, it is called Cutia and it is sub-divided into two big complexes: (a) Cutia Complex, composed of seven wind farms (Guajiru, Jangada, Potiguar, Cutia, Maria Helena, Esperança do Nordeste and Paraíso dos Ventos do Nordeste) with 180.6 MW total installed capacity and 71.4 MW average physical guarantee, all situated in Rio Grande do Norte. The commercial operation of these farms is scheduled to July 2018; and (b) Bento Miguel Complex, composed of six wind farms (São Bento do Norte I, São Bento do Norte II, São Bento do Norte III, São Miguel I, São Miguel II and São Miguel III) with 132.3 MW total installed capacity and 54.8 MW average physical guarantee, all situated in Rio Grande do Norte. The initial forecast for commercial operation of these farms is January 2019. In Janu- ary 2017, the process of erection of the wind generator towers was started. The Hydroelectric Plant Colíder will have 300 MW of installed capacity, which is expected to start commercial operation, and it is anticipated that the fi rst generating unit will start operating in May 2018. Currently, the Company is concentrating efforts in building 15 power plants, which will add 716.8 MW installed capacity and 355.3 MW average physical guarantee to the gen- eration park, 80% of this physical guaran- tee scheduled to start commercial operation during 2018, according to the chart below: Evolution of Generation Park (Physical Guarantee) 15% 15% 15% 15% 7% 2017 2018 2019 2020 2021 2022 HYDROELECTRIC POWER PLANTS WIND FARMS THERMOELECTRIC PLANTS Distribution lines – Voltage level20172016Total length (km)196,951.20195,458.5013.8 kV105,510.6104,556.034.5 kV84,639.284,071.369 kV866.4695.4138 kV5935.05,970.3230 kV0165.5Number of substations369364INFRASTRUCTURE CAPITAL92CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXTRANSMISSION AND DISTRIBUTION ASSETS EXTENSION OF THE TRANSMISSION AND DISTRIBUTION LINES G4-EU4 Transmission The Company wholly owns and participates in the con-cession for transmission and operation corresponding to 7,025 km transmission lines and 45 substations of the basic grid, with transformation power of 14,752 MVA. The year was marked by the entry in operation of 1,678 km lines and the start of the implementation of a BRL 580 million project, a result from a tender won in 2015.Currently, the Company is concentrating efforts to build three enterprises, which will add 1,430 km length and 4,500 MVA transformation capacity to the transmission lines and substations owned by the company itself and in partnership. Distribution Copel´s distribution lines are 196,951.2 km long and to-tally, they serve about e 4.6 million consumers in 394 mu-nicipalities in Paraná and one in Santa Catarina.In 2017, new substations and high voltage lines were con-nected to reinforce the quality and increase the availability of power to the consumers. In 2017, all these enterprises add-ed approximately 553.34 MVA to the distribution system and 192.81 km of new distribution lines.Wire Market (TUSD) − In 2017, the load wire, which takes into account all consumers that accessed the Distributor´s net-work, grew by 3.4% compared to 2016. The industrial wire market grew by 4.9% in 2017, driven mainly by the food products, manufacture of pulp, paper and paper products, and manufacture of wooden products. Power Wire Market‘Number of Consumers/contractsDistributed Power (GWh)20172016%20172016%Captive Market4,560,4934,478,7671.819,74322,328(11.6)Utility and Licensed Companies34(25.0)521614(15.1)Free Consumers 2499162059.88,8735,27368.3Wire Utilities3250.0785250.0Wire Market4,561,4904,479,3931.829,21528,2673.424 Total free consumers served by Copel Geração e Transmissão and by other suppliers within the concession area of Copel Distribuição.The year was marked by the entry in operation of 1,678km of transmission linesCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 93 INFRASTRUCTURE CAPITAL Captive market - From January to December, the captive market consumption was 19,743 GWh, with a negative variation of 11.6%, compared to the previous year, due to the migration of consumers to the free market. The number of captive consumers billed by Copel Distribuição was 1.8% higher than in December 2016, totaling 4,560,493 consumers. In 2017, 81,726 captive con- sumers were added to the system. EFFICIENCY IN SUPPLY: QUALITY MANAGEMENT AND ENERGY LOSS G4-EU28, G4-EU29 Quality of supply, measured through the performance indicators of dis- tributors in terms of continuity of the provided services, known as DEC (Equivalent Interruption Duration by Consumer Unit) and FEC (Equivalent Interruption Frequency by Consumer Unit) showed improvement in 2017, compared to the previous year. DEC improved from 10.82 to 10.41 and FEC improved from 7.23 to 6.79, according to the graphs below: In 2017 COPEL achieved target set for 2018 of DEC and FEC, of which 11.23 and 8.24 respectively DEC Evolution (hours) FEC Evolution (interruptions) Sold Power (GWh) 2017 2016 Residential 7,126 6,932 % 2.8 Industrial 3,254 5,753 (43.4) Commercial 4,651 5,059 (8.1) Rural Others Total 2,257 2,179 2,455 2,405 3.6 2.1 19,743 22,328 (11.6) ) 0 2 o T 1 m o r F ( s r u o H 12.87 11.63 DEC (HOURS) COPEL DEC LIMIT (HOURS) ANEEL 14.01 13.67 12.28 11.78 11.14 10.88 10.81 10.41 ) 5 1 O T 1 M O R F ( S N O I T P U R R E T N I FEC (INTERRUPTIONS) COPEL FEC LIMIT (INTERRUPTIONS) ANEEL 10.71 8.07 10.5 8.92 9.33 8.33 8.75 7.23 8.53 6.79 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 INFRASTRUCTURE CAPITAL94CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXTYPES OF LOSSES201520162017Transmission25Overall losses (%)1.81.51.4Technical losses (%) 1.81.51.4DistributionOverall losses (%)9.69.69.2Technical losses (%)6.16.16.1Non-Technical losses (%) 1.62.01.7The improvement in DEC and FEC is a result of changes in processes fo-cused on agility, optimization and relocation of recourses to respond the occur-rences. There was also increase of investment in the rural grid through the Mais Clic Rural program, where funds have been applied in special equipment and grid automation, improving the system reliability.Loss of energy is inherent to the nature of electric power transformation, transmission and distribution. In 2017, overall losses - technical, non-technical and of basic grid – represented 9.2% of the energy injected into the Distribu-tor´s system. This percentage reduced by almost 0.4% compared to that in 2016 and remained below the values verifi ed in the last years. A factor that contribut-ed to this reduction was the Program for Fighting Non-Technical Loss carried out by Copel Distribuição.EVOLUTION OF LOSSES IN TRANSMISSION AND DISTRIBUTION G4-EU12OPERATIONAL EXCELLENCE PROGRESS:Telemetering Group A – This billing data is automatical-ly obtained, without the need to send someone to read the meter. This kind of remote measurement enables automated collection of data on time, optimizing the process considering the precision in collection, handling and availability of the data, also for the customers over the internet. The system is also capable of monitoring use of energy, is-suing alarms when abnormal events occur, contributing to de-tection of defects and irregular measuring procedures and re-ducing Copel´s commercial loss.Paraná Smart Grid Project - The Paraná Smart Grid Proj-ect was proposed as a part of the actions stipulated in State Decree No. 8,842/2013, with the purpose to improve the tele-metering system. It was designed to improve the quality of the services and the capacity of the Company to serve in the electric system and the telecommunication system. The Project was completed in 2017, recording the follow-ing conclusions: measuring automation requires standardiza-tion among suppliers, because the power Distributor depends on the implemented own system and the automation of the Medium Voltage Grid is one of the main tools to reduce the time and the frequency of duration of the interruptions. Through the project, micro-generation studies were also carried out using intermittent sources, as well as tests with electric vehicles. The findings are used for connection of new users and preparation of the grid for the future.25 In relation to the previous years, the loss in the basic grid were changed. The amounts refer to losses verifi ed in the basic grid of the national integrated system, shared at 50% for generation companies and 50% for load agents, and Copel Distribuição has its share defi ned by its market share. Any change in this loss infl uences the total overall loss.COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 95 INFRASTRUCTURE CAPITAL Mais Clic Rural – In 2016, investments were made at the amount of BRL 70 million in new technologies for automation and communi- cation systems, 34/13 kV substations and work to improve and reinforce the grid. The initiative focuses on the four sectors most sensitive to the quality of the power supply: pig farmers, tobacco farmers, aviaries, and dairy farmers in the State of Paraná. Altogether, more than 200 thousand rural producers in Paraná were ben- efi ted from these initiatives. Among the main advances made in the period is the implemen- tation of 55 automatic grid reconfi guration sys- tems, whose installation has already been done. Distributed Generation (GD) – This is the generic name of the type of power generation that differs from the centralized generation, usu- ally of greater size and greater environmental impact, because it occurs at or near consumers. Copel Distribuição updates technical standards and adopts best engineering and safety practices to connect distributed gen- eration users (57 independent producers or self-producers, with 600 MW generation in 45 municipalities). For micro and mini generation companies, including operating units and units under doc- ument processing, there are 405 units, most of photovoltaic generation (395 units). Total 3.34 MW installed power. The addition of GD, although still insuf- fi cient to meet the growth in demand, is fundamental to reduce the rate of growth of generation and postpone the need to build big power plants and transmission lines that, which, together with their benefi ts, are associated with expressive environmen- tal impacts. COMMERCIALIZATION Copel Comercialização, created in January 2016, established itself in the market under the brand Copel Energia, working with a free market specialization of energy purchase and sale, driv- en by the accelerated movement of migration of large consumers from the regulated market to the Free Marketing Environment - ACL (ACL). In addi- tion to operating in the energy purchase and sale segment, it offers management services in the free energy market for its customers. The Compa- ny showed fast growth, closing the year with 300 megawatts average energy sold. INFRASTRUCTURE CAPITAL96CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIX TELECOMMUNICATIONSCopel Telecomunicações provides tele-communication and communication services in general, in Multimedia Communication Ser-vice (SCM), developing studies and projects focused on meeting the needs of the Com-pany and the market in general. The explora-tion of such services is for an indefi nite term, without exclusivity, at national level. Increasingly more connected, the people in Paraná are following the trend in the tele-communication sector in Brazil, which pre-sented growth by 7.2% in 2017. Driven by re-gional providers, such as Copel Telecom, the broadband expansion places the telecom-munication services sector as the only one growing above the average among the essen-tial services. According to Anatel, only in the State of Paraná, the number of new contracts of broadband service subscribers grew by 11.3% compared to 2016.The search for effi cient services and state-of-art solutions placed Copel Tele-com on a differentiated level in the sector, with growth above 30% in relation to the number of subscribers. Upon the increas-ing demand and context of improvement in the processes and the teams´ effi ciency, it managed to reduce the cost in percentage without losing revenues.Copel Telecom serves all 399 municipali-ties in Paraná and 2 municipalities in Santa Ca-tarina on optical fi ber with high-performance network and internet services for companies, operators and the government. The company serves 65 municipalities, 64 in Paraná and 1 in Santa Catarina, with residential broadband internet on optical fi ber, in a GPON (Gigabit Passive Optical Network) model network, with one of the best performances on the market. The State is the fi rst and the only one in the country to become 100% digital, with network, which in 2017 totalized more than 32 thousand km optical cables, almost the distance around the Earth.Copel Telecom´s internet is installed to-tally on optical fi ber, in fi ber-to-the-home (FTTH) or fi ber-to-the-offi ce (FTTO) system, i.e., where the fi ber cable is connected in the consumer´s house or offi ce, without any other kind of intermediary material. This sys-tem guarantees the high performance of the Company´s connection.PARTICIPATIONSCopel has corporate shares and associ-ation in companies, consortiums and other institutions, which work in different sectors in addition to the power area. Further infor-mation in EN 1.1, EN 2, EN 18 and EN 19.7 of the Financial Statements.FINANCIAL CAPITAL97CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 98 FINANCIAL CAPITAL Aligned to the strategic guidelines of the Company to expand the business in a sustainable and profi table way and obtain ex- cellence in costs, processes and quality, in 2017, Copel increased the Net Operational Revenues from BRL 922.8 million, repre- senting 7% increase compared to 2016. 103-2, 103-3, 201-1 Copel increased 7% of the Net Operational Revenues compared to 2016. Other operational revenuess 284.10 198.20 Income from sector fi nancial assets and liabilities (1,079.70) 718.80 Distrbution of piped gas Telecommunications 471.90 454.80 261.60 309.00 Revenues from construction Availability of the electric grid Electric power supply Electricity supply 1,279.60 868.00 2016 2017 3,976.60 3,617.90 2,676.10 3,176.40 4,681.50 5,231.50 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 99 FINANCIAL CAPITAL The presented variation is pursuant to the following factors: 1) decrease of BRL 550 million in Revenues from Electric Power Supply, mainly due to: 3) reduction of BRL 358.6 million in Revenues from Electric Grid Availability, mainly due to the effects of the remuneration for re-mea- suring the cash fl ow in compliance with MME Ordinance No. 120, related to RBSE assets; • 11.6% retraction of the captive market compared to the previous year, due to mi- gration of captive consumers to the free market and the economic situation in the Country; and • average reduction of 17.9% in the rate ap- plied since June 2016. 2) increase by BRL 500.3 million in Electric Power Supply mainly due to the increase of the revenues at the Electric Power Commer- cialization Chamber (CCEE) pursuant to high- er average PLD in the period, BRL 318.15/ MWh in 2017 compared to BRL 92.40/MWh in 2016, and higher commercialization within the Free Contracting Environment (ACL); 4) reduction of BRL 411.6 million in Revenues from Construction. The Company accounts revenues related to construction or improve- ment in the infrastructure used in the provi- sion of electric power and gas distribution and transmission services, which totalized BRL 868 million in 2017 and BRL 1,279.6 mil- lion in 2016. The respective expenses are rec- ognized in the income statement for the peri- od as cost of construction, when incurred; 5) increase of BRL 47.4 million in Revenues from Telecommunications, mainly be- cause of the increase of the number of cus- tomers, mostly on the retail market with the Copel Fiber product; 6) reduction of BRL 17.1 million in Revenues from Distribution of Piped Gas, impacted by the retraction of the market compared to the previous year; 7) increase of BRL 1,798.5 in Income from sec- tor fi nancial assets and liabilities because of the positive result in 2017, BRL 718.8 mil- lion, while in 2016, the result was negative, BRL 1,079.7 million; and 8) reduction of BRL 86 million in Other Opera- tional Revenues, refl ecting the lower varia- tion in the fair value of the indemnifi able as- set of the concession of approximately BRL 75.7 million, followed by reduction in the revenues from service provision and offset by the increase in revenues from leases and rental of equipment and structures, and charged services. FINANCIAL CAPITAL100CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXOPERATIONAL COSTS AND EXPENSES 201-1 In 2017, Copel presented the following variation in relation to the manageable and the non-manageable costs and expenses. 1) increase of BRL 1,479.8 million in Elec-tric power purchased for sale, mainly due to higher PLD in the period and the impact of GSF - Generation Scaling Fac-tor (hydrological risk) and increased com-mercialization within the Free Contracting Environment (ACL); Raw material and consumables for electric power productionNatural gas and consumables gas operationCharges on use of electric gridElectric power purchased for sale201633.497.4325.4309.5866.24,685.607126,165.602017Non-manageable2) reduction of BRL 154.2 million in Charges on use of electric grid mainly due to lower cost for System Service Charges (ESS), refl ecting the resources received from the Reserve energy account - Con-er and the Reserve Energy Charge (EER), offset by the increase of the cost of the basic grid and power transport, due to the effects of the indemnities paid to power transmission companies; 3) reduction of BRL 15.9 million in Natural gas and consumables for gas operation due to lower consumption; and COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 101 FINANCIAL CAPITAL Manageable Other operational costs and expenses Material 81.5 83.1 Social security and assistance plans Third parties´ services Depreciation and amortization Estimated loss, provisions and reversal Construction cost Personnel and administrators 414.9 414.0 259.8 237.6 550.5 521.5 708.3 731.6 768.7 365,5 2016 2017 1,003.90 1,280.70 1,304.40 1,343.30 4) increase of BRL 38.9 million in Personnel and adminis- trators, refl ecting salary ad- justment at 1.6% in October 2017, according to the group agreement, and variation of BRL 9.1 million of Provision for indemnity for voluntary dismissal and retirement; 5) reduction in Construction cost from BRL 1,280.7 mil- lion in 2016 to BRL 1,003.8 million in 2017; 6) reduction of BRL 403.1 mil- lion in Estimated loss, pro- visions and reversal mainly due to the reversal of estimat- ed loss for reduction to im- pairment value of assets and reduction in PECLD, offset by the increase in the provision for litigation; 7) reduction of BRL 29 million in Third parties´ services pursuant to reduction of the maintenance services on the electric system and consult- ing and auditing; offset by the increase in communication, data processing and trans- mission services; 8) reduction of BRL 22.2 million in Social security and assis- tance plans pursuant to ef- fects of the actuarial evalua- tion calculated by contracted actuary. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 102 FINANCIAL CAPITAL EBITDA OR LAJIDA FINANCIAL INCOME VALUE ADDED 201-1 The Company´s Ebitda in 2017 was BRL 2,872.9 million, presenting increase by BRL 175.8 million compared to 2016, which represents 6.5% increase. Consolidated – In million BRL 2017 2016 Re-submitted Net profi t attributed to the controlling company´s shareholders 1,118.2 874.5 The fi nancial income dropped by BRL 153,8 million mainly due to the 22.6% drop in the fi nancial revenues pursuant to the reduc- tion of the interest for arrears on power bills and defl ation of the fi nancial indexes, which update the fi nancial revenues. In 2017, Copel calculated BRL 11,772.8 mil- lion Value Added. Total, 7.7% lower than the pre- vious year. The complete statement is included in the Financial Statements Deferred IRPJ and CSLL IRPJ and CSLL Financial expenses (revenues), net Lajir/Ebit Depreciation and amortization Lajida/Ebtida Net Operational Revenues - ROL Ebitda Margin % (Ebitda / ROL ) (105.2) (69.6) 379.9 589.3 748.4 594.6 2,141.3 1,988.8 2017 3.2% 6.3% 2016 2.0% 4.8% 731.6 708.3 66.9% 10.8% 69.2% 2,872.9 2,697.1 14,024.6 13,101.8 20.5% 20.6% 12.8% 12.3% 11.7% GOVERNMENT PERSONNEL THIRD PARTIES WITHHELD SHAREHOLDERS COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 103 FINANCIAL CAPITAL INDEBTEDNESS NET PROFIT 201-1 CONSUMERS´ DEFAULT The Company fi nances the liquidity and the need of capital mainly with resources from the operations and external fi nancing, aiming to ex- pand and modernize businesses associated with power generation, transmission, marketing, and distribution, as well as telecommunications. It is important to point out that the Compa- ny seeks to invest in corporate shares, to use credit lines available in the market, that make sense in Copel’s capital structure, regarding fi nancial leverage concerning the return from projects. We point out that our perspectives for fi nancing, as well as cash availability, will be suffi cient to meet the needs of the invest- ment plan for the fi scal period. The payments made in the year totalized BRL 3,042 million, namely BRL 1,887 million principal and BRL 1,155 million charges. In 2017, the net profi t attributed to the share- holders of the controlling company was BRL 1,033.6 million, 15.4% higher than that obtained in the previous period, BRL 895.8 million. In December 2017, the default25 of Copel Distribuição con- sumers was BRL 226.5 million, which is equal to 1.52% of its billing, while in 2016 it achieved BRL 267.3 million, 1.61% of the billing. Another control indicator of the Company is Abradee, whose methodology considers debts overdue from 1 to 90 days. The economic scenario in 2017 contributed directly to the increase of this indicator, 18.35% higher compared to 2016, due to the concentration of debits from 1 to 30 days. Indicador 2017 2016 % Default Abradee 2.58% 2.18% 18.35% Default Company 1.52% 1.61% -5.59% 25 Since 2003, Copel started calculating the default index of the product “electric power su- pply”; its calculation methodology considers default all consumers with debt overdue for more than 15 days up to 360 days, in conformity with the due date warning deadline (Aneel Resolu- tion No. 414/2010), and the recognition of the loss of overdue debts is excluded. COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 104 FINANCIAL CAPITAL INVESTMENTS The investment program for 2018 was ap- proved on 12/13/2017 by the 173rd ordinary meeting of CAD. The investments made and planned are shown below: Companies (in BRL million) Done % Planned 2017 2016 2017-2016 2018 Generation and Transmission 1,071.3 1,879.2 Distribution Telecommunications Wind Farms 26 Others 27 Total 630.4 241.1 566.0 - 777.1 193.8 722.2 3.1 (43.0) (18.9) 24.4 743.6 790.0 340.2 (21.6) 1,051.4 (100.0) 3.4 2,508.8 3,575.4 (29.8) 2,928.6 26 Includes Brisa Potiguar, Cutia Wind Farms and São Bento Energia. 27 Includes Holding, Copel Renováveis, Copel Comercialização, among others. SUMMARY OF THE GRI 105CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 106 GRI CONTENT INDEX 102-55 Standard GRI Disclosure GRI 101: FOUNDATION 2016 GENERAL DISCLOSURES 102-1 - Organization Name. 102-2 - Activities, brands, products and services 102-3 - Headquarters localization 102-4 - Operation localization 102-5 – Property and legal format 102-6 - Markets served 102-7 - Organization Size 102-8 - Information about employees and other workers GRI 102: General Disclosures 2016 102-9 - Supplier chain 102-10 - Signifi cant changes in the organization and the supply chain 102-11 - Precaution approach or principle 102-12 - External initiatives 102-13 - Participation in associations 102-14 – Statement of the main decision-maker 102-15 - Main impacts, risks and opportunities 102-16 - Values, principles, standards and norms of behavior 102-17 - Mechanisms of consulting and concerns about ethics 102-18 - Governance Structure Page and/or URL Omission External verifi cation Standard GRI Disclosure Page and/or URL Omission External verifi cation 5 15 15 15 15 15 2, 40 40 65 5 19 35 36 8 19 17 31 25 102-20 - Executives´ responsibility for economic, environmental and social issues 102-22 – Composition of the highest governance body and its committees 102-23 – President of the highest governance body 102-25 - Confl icts of interest 102-26 – Role of the highest governance body in the defi nition of purpose, values and strategy 102-28 – Performance assessment of the highest governance body GRI 102: General Disclosures 2016 102-38 – List of annual remuneration 102-39 - List of percentage of increase of total annual remuneration 102-40 - List of stakeholders 102-41 - Group negotiation agreements 102-42 - Identifi cation and selection of stakeholders 102-43 - Approach for engagement of stakeholders 102-44 – Main topics and concerns found 102-45 - Entities included in the consolidated fi nancial statements 102-46 - Defi nition of the report content and limit of the topics 102-47 – List of material topics x x x x x x x x x x x x x x x x x x 28 27, 28 27 27 27 29 45 45 59 42 59 59 60, 61 5, 18 6 7 x x x x x x x x COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 107 Standard GRI Disclosure Page and/or URL Omission External verifi cation Standard GRI Disclosure Page and/or URL Omission External verifi cation 102-48 - Reformulation of information 102-49 - Changes in the reports 102-50 - Period covered in the report GRI 102: General Disclosures 2016 102-51 - Date of last report 102-52 - Report issuance cycle 102-53 – Point of contact for questions about the report 102-54 - Statement according to the GRI Standards 102-55 - GRI Content Index 102-56 - External verifi cation Reformulation of information is indicated along the Report together with the change context 5 5 The last Sustainability Report refers to 2016. 5 5 5 106 5, 113, 114, 115 MATERIAL TOPICS Economic Performance GRI 103: Management Approach 2016 GRI 201: Economic Performance 2016 103-1 – Explanation of the material topic and its Boundaries 7, 17 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 17, 25, 31, 98 8, 25, 98 201-1 – Direct economic value generated and distributed 98, 100, 102, 103 201-2 – Financial impacts and other risks and opportunities pursuant to climate changes 76 x x x x x x x x x x x x x x Market Presence GRI 103: Management Approach 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach GRI 202: Market Presence 2016 202-1 – Proportion of the lowest salary paid by gender compared to the local minimum salary Fighting against corruption GRI 103: Management Approach 2016 GRI 205: anti-corruption 2016 Power GRI 103: Management Approach 2016 GRI 302: Power 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 205-1 – Operations evaluated regarding risks related to corruption 205-2 – Communication and training on anti- corruption policies and procedures 205-3 – Confi rmed cases of corruption and actions taken 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 302-1 - Consumption of power within the organization 7, 39 44 45 45 7, 25 25, 30, 31 30, 31 30 30 31 7, 80 82 80 82 x x x x x x x x x x COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 108 Standard GRI Disclosure Page and/or URL Omission External verifi cation Standard GRI Disclosure Page and/or URL Omission External verifi cation Water GRI 103: Management Approach 2016 GRI 303: Water 2016 Biodiversity GRI 103: Management Approach 2016 103-1 – Explanation of the material topic and its Boundaries 7, 80 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 303-1 - Consumption of water by source 303-2 – Water sources signifi cantly affected by water withdrawal 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 304-1 – Own, leased operating units, managed in or in the surroundings of protected areas and areas with high biodiversity value situated outside the protected areas GRI 304: Biodiversity 2016 304-2 – Signifi cant impact of activities, products and services on biodiversity 304-3 – Protected or restored habitats 304-4 – Threatened species Emissions GRI 103: Management Approach 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 80 80 80 81 7, 84, 85 84, 85 84, 86, 87 84 84 86 87 7, 76 76, 77 78, 79 x x x x x x x x x x x x x x x 305-1 – Direct GHG emissions (Scope 1) GRI 305: Emissions 2016 305-2 - Indirect GHG emissions because of power purchase (Scope 2) 305-3 – Other indirect greenhouse gas emissions (Scope 3) 305-7 – Emissions of NOX, SOX and other signifi cant atmospheric emissions Effl uent and waste GRI 103: Management Approach 2016 GRI 306: Effl uents and waste 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 306-2 – Waste by type and disposal method Environmental Conformity GRI 103: Management Approach 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 77 77 77 78 7, 80 83 80 83 7, 25 25, 31 30, 31 GRI: 307: Environmental Conformity 2016 307-1 – Non-conformity with environmental laws and regulations Copel signed 3 Terms of Conduct Adjustment, whose management is responsibility of the respective technical areas of the Company, thus, as 104 lawsuits or administrative processes with objects related to fulfi llment of the environmental legislation in force are pending judgement, they are of public domain and can be checked by any stakeholder. - x x x x x COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 109 Page and/or URL Omission External verifi cation Standard GRI Disclosure Page and/or URL Omission External verifi cation Standard GRI Disclosure Supplier Environmental Assessment 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 7, 67 67 31, 61, 62 308-1 – New suppliers selected based on environmental criteria 66 103-1 – Explanation of the material topic and its Boundaries 7, 39 GRI 103: Management Approach 2016 GRI 308: Supplier Environmental Assessment 2016 Employment GRI 103: Management Approach 2016 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 401-1 – New hiring and turnover of employees GRI 401: Employment 2016 401-2 – Benefi ts granted to full-time employees which are not offered to temporary or half-time employees 401-3 – Maternity/paternity leave Health and Safety at Work 39, 44, 46 39, 42, 45 42 45 45 GRI 103: Management Approach 2016 GRI 403: Health and Safety at Work 2016 103-1 – Explanation of the material topic and its Boundaries 7, 51 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 403-2 – Types and ranges of injuries, occupational diseases, lost days, absenteeism e and number of fatalities related to the job 51 50 50 x x x x x x x x x x x Training and Education GRI 103: Management Approach 2016 GRI 404: Training and Education 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 404-1 – Average training hours a year, by employee 404-2 - Programs development of the employees´ competencies and assistance for career transition 404-3 – Percentage of employees, who regularly receive performance and career development assessments Diversity and Equality of Opportunities 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach GRI 103: Management Approach 2016 GRI 405: Diversity and Equality of Opportunities 2016 7, 39 39, 46 39, 47 47 47 46 7, 41 43, 44 43 405-1 - Diversity in governance bodies and employees 27, 41, 43 Rights of Indigenous Tribes GRI 103: Management Approach 2016 GRI 411: Rights of Indigenous Tribes 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 7, 74 74 103-3 – Assessment of the Management approach 411-1 - Cases of violation of the rights of indigenous or traditional tribes Currently Copel no devices to assess the human rights management 74 x x x x x x x x x x x x x x COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 110 Page and/or URL Omission External verifi cation Standard GRI Disclosure Page and/or URL Omission External verifi cation Standard GRI Disclosure Human rights Assessment 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components GRI 103: Management Approach 2016 103-3 – Assessment of the Management approach GRI 412: Human rights Assessment 2016 412-3 – Agreements and contracts for signifi cant investments, which include clauses on human rights or have been submitted to human rights assessment Local Communities GRI 103: Management Approach 2016 GRI 413: Local Communities 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 31, 61, 62 413-1 – Operations engaging the local community, assessment of impacts and programs for local development 413-2 - Operations with signifi cant negative impacts, actual and potential, on the local communities 69, 70 67 Currently Copel does not have any mechanisms to evaluate the management of human rights 7, 74 74 66 7, 67 67 x x x x x x x x x Supplier Social Assessment GRI 103: Management Approach 2016 GRI 414: Supplier Social Assessment 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 7, 67 67 31, 61, 62 414-1 - New suppliers selected based on social criteria 66 Social-Economic conformity GRI 103: Management Approach 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – Management approach and its components 103-3 – Assessment of the Management approach 7, 25 25, 31 30, 31 GRI 419: Social-Economic conformity 2016 419-1 – Non-conformity with laws and regulations in the social and economic area Regarding Social- Economic conformity, Copel has 8 Terms of Conduct Adjustment handled by the technical areas. In 2017, there was no record of group suits on the same matter to lead to fi nancial or other civil and/or administrative sanctions. Relationship with customers GRI 103: Management Approach 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – The management approach and its components 103-3 – Assessment of the Management approach 7, 59 61, 62 60 x x x x x COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 111 Disclosure SECTOR SUPPLEMENT Organizational Profi le G4-EU1 Installed capacity, broken down by primary energy source and regulatory regime G4-EU2 - Net energy output, by primary energy source and regulatory regime 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 G4-DMA EU7 Management programs for demand, including residential, trade, institutional, and industrial Research & Development GRI 103: Management Approach 2016 103-1 – Explanation of the material topic and its Boundaries 103-2 – The management approach and its components 103-3 – The management approach and its components G4-DMA EU8 Research and development activities and expenditure aimed at providing more reliable electricity and promoting sustainable development Availability and Reliability G4-DMA EU6 Management approach to ensure short- and long-term electricity availability and reliability Page and/or URL Omission External verifi cation Disclosure Page and/or URL Omission External verifi cation 90 90 60 92 64 54 54, 56 55 54 90 x x x x x x G4-EU10 Planned capacity against projected electricity demand over the short- and long terms System Effi ciency G4-EU12 Transmission and distribution losses as a percentage of total energy (%) Biodiversity G4-EU13 Biodiversity of offset habitats compared to the biodiversity of the affected areas Labor Practices and Employment G4-DMA EU14 Programs and processes that ensure the availability of skilled labor G4-EU15 Percentage of employees with a right to retirement in the next 5 and 10 years, broken down by functional category and region EU18 Percentage of contractor and subcontractor employees that have undergone relevant health and safety training Local Communities G4-DMA EU20 Approach to managing the impacts from displacements The planning of the generation expansion is done by Empresa de Pesquisa Energética – EPE, considering the whole load of the National Interconnected System - SIN. The implementation depends on the expansion plans by the Federal Government and the tenders for power sale, considering that the division of the demand attendance among the different sources of generation is also set by the Federal Government. x 94 86 47 39 51 67 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 112 Disclosure Page and/or URL Omission External verifi cation G4-EU22 Number of people physically or economically displaced or compensated, broken down by type of project 67, 68 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 Consumer Health and Safety G4-EU25 Number of injuries and fatalities to the public involving company assets, including legal judgments, settlements and pending legal cases of diseases Access G4-EU23 Programs, including those in partnership with the government, to improve or maintain access to electricity and customer support services, as well as its safe use G4-EU26 Percentage of unattended population in concession area G4-EU27 Number of residential disconnections for non-payment, broken down by duration of disconnection and regulatory regime G4-EU28 Frequency of interruptions in power supply (FEC) G4-EU29 Average duration of interruptions in energy supply (DEC) G4-EU30 Average plant availability factor, broken down by energy source and regulatory system 63 52 63 Copel does not restrict to attend requests for power connection, unless in specifi c cases, where there is environmental impediment. 64 93 93 91 x x x x x COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX APPENDIX 113 EXTERNAL ASSURANCE 102-56 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 114 COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 115 APPENDIX APPENDIX116CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXThe company ratifi es its commitment to the United Na-tions Global Compact and Sustainable Development Goals, and presents as an Annex to this Progress Communication (COP) below, where it specifi es the initiatives developed to im-plement the principles of the Global Compact and the SDGs in its operations. Throughout the publication this annex is part of, the results of this initiatives are also presented, as well as the progress of its commitments in 2017, which can be found in the GRI indicators reported by Copel.Industry, innovation and infrastructure9Reduced inequalities10Decent work and economic growth8Sustainable cities and communities11Peace, justice and strong institutions16Partnerships for the goals17Life on land15Responsible consumption and production 12Life below water14Climate action13Quality education4No poverty1Good health and well-being3Zero hunger2Affordable and clean energy7Gender equality5Clean water and sanitation6RESPECT and support the internationally recognized human rights in its area of infl uenceENSURE the company’s non-participation in violation of hu-man rightsSUPPORT freedom of association and recognize the right to collective bargainingELIMINATE all forms of forced or compulsory labor.ERADICATE effectively all forms of child labor from its produc-tion chainSTIMULATE practices that eliminate any kind of discrimination in employmentASSUME a responsible and proactive preventive approach to environmental challengesDEVELOP initiatives and practices to promote and disseminate social and environmental responsibilityENCOURAGE the development and diffusion of environmental-ly responsible technologiesFIGHT corruption in all its forms, including extortion and briberyTHE GLOBAL GOALS FOR SUSTAINABLE DEVELOPMENTGLOBAL COMPACT PRINCIPLES INCORPORATION OF THE PRINCIPLES OF THE GLOBAL COMPACT AND SDGS117CONTEXT OF THE SECTORCOPEL IN NUMBERSCORPORATE GOVERNANCESUSTAINABILITYMESSAGE FROM THE PRESIDENTABOUT THE REPORTABOUT COPEL ANDBUSINESS MODELSCAPITALSGRI CONTENT INDEXAPPENDIXCOPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 118 PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES Management Policies and 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; 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). 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 good practices throughout the supply chain. Our Energy Program: ties together obtaining new opportunities in relation to career development, remuneration and personal development to performance. Generation by renewable sources: compliance with the strategic and sustainability guidelines established for the generation business. Ethical Guidance Board: analyzes and provides guidance on processes related to ethical conduct in the Company. Committee for the Analysis of Reports on Psychological Harassment: aims to assess reports on psychological harassment in labor relations within the Company. Integrity Program and Compliance Portal: a set of internal mechanisms and procedures for integrity, audit and incentive to report irregularities and effective application of codes of ethics and conduct, policies and guidelines aiming to detect and heal deviations, frauds, irregularities and illegal acts done against the national or foreign public administration. Copel Transparency Portal: it aims to provide information in compliance with the federal and the state legislation. PRINCIPLES AND OBJECTIVES RESPONDED GLOBAL COMPACT ODS DATE START / FINISH 1 to 10 16, 17 Various / Indeterminate 1 to 10 16, 17 2008 / Indeterminate 6 7, 8, 9 1 a 10 1 a 10 10 10 10 2013 / Indeterminate 7, 17 Indeterminate 5, 8, 16 2003 / Indeterminate 5, 8, 16 2009 / Indeterminate 16 16 2015 / Indeterminate 2014 / Indeterminate Diversity Program: Implementation of the Action Plan and certifi cation for the 5th Edition of the Pro-Gender and Race Equity Program of the Department of Policies for Women. 1 to 10 5, 8 10, 16, 17 2014 / Indeterminate Internal Social and Environmental Committees – CISAS: Acts as multipliers of sustainability concepts, enabling the identifi cation of problem situations in the social and environmental aspect, strengthening the relationship with stakeholders. 1, 2, 6, 7, 8, 9, 10 12, 13 2012 / Indeterminate COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 119 PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES Management Policies and Systems Copel Corporate University – UniCopel: implementation of the Educational Planning and management of Leadership Development Programs, Postgraduate, Master’s and Doctorate Degrees and Languages. Corporate Management Program on Climate Change: Aims to discuss and deliberate actions associated with the study of the effects of climate changes, implementation of Copel´s Climate Change Policy, and undertaken voluntary commitments. Support to Public Policies and Management Improvement PRINCIPLES AND OBJECTIVES RESPONDED GLOBAL COMPACT ODS DATE START / FINISH 1, 2, 7, 8, 9 16, 17 2007 / Indeterminate 1, 2, 7, 8, 9 11, 13, 17 2011 / Indeterminate Participation in the Brazilian Committee on 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 11, 13 2008 / Indeterminate Participation in the Entrepreneurship Initiative Trends in Ecosystem Services - TeSE: initiative of the Center for Sustainability Studies of FGV (Gvces) – aims to incorporate the concepts of valuing Ecosystem Services in business, as well as developing methodology. (Until 2017, for 2018, Copel will not sponsor the FGV initiative, it will work the subject internally) Participation in organizations that discuss and promote energy effi ciency: Brazilian Association of Electric Utilities, Energy Planning Company, Independent Power Producers Assoc., Brazilian Assoc. of Power Generation Companies, Brazilian Assoc. of Power Distribution Companies, Brazilian Association of Large Power Transmission Companies, Brazilian Committee of Large Dams, Regional Engineering, Architecture and Agronomy Council in PR, 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, Architecture and Agronomy Council of the State of Paraná, Garbage and Civic Awareness Forum PR, Forum on Climate Change of the State of Paraná, Environmental Committees of the Public Ministry of Paraná. 7, 8, 9 16, 17 2015 / Indeterminate 1 to 10 6, 7, 15 Diversos / Indeterminate 7, 8, 9 6, 15, 17 Diversos / Indeterminate Participation in the Corporate Citizenship Council of the State of Paraná - CPCE, for joint promotion of social responsibility in the State of Paraná. 1 to 10 16, 17 2005 / Indeterminate COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 120 PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES Management Policies and Systems PRINCIPLES AND OBJECTIVES RESPONDED GLOBAL COMPACT ODS DATE START / FINISH Voluntary participation in the Competitive Paraná Movement and in examining panels of awards: National Quality Awards, MPE Brazil and The Management Quality of Paraná. 1 to 10 2000 / Indeterminate Integrated Management of Water and Soil: in partnership between Copel, Sanepar and State Departments to create synergy between the actions carried out in the watersheds, to promote the improvement of quality and the availability of water by perfecting the use, management and proper conservation of soil, water and forests. 1, 2, 7, 8, 9 6, 15, 17 2010 / Indeterminate UN Global Compact Cities Program: Since November 2017, Copel started hosting and coordinating the Center of the UN Global Compact Cities Program for the South Region of Brazil. It acts jointly with the State Council of Economic and Social Development of Paraná – CEDES and the Independent Social Service Paranacidade. 1 to 10 11, 17 2017 / Indeterminate Social and Environmental Programs, Projects and Initiatives Program to collect donations to charity and social service institutions, non-profi t and of group interest, through the energy bill. 1 to 10 1, 10, 17 1999 / Indeterminate Annual donation, through tax incentives, to the Fund for the Rights of Children and Adolescents – FIA, Rouanet Act, Elderly Act, Incentive to Sports Act, PROFICE, PAIC, PRONON and PRONAS. 1, 2, 5 1 2006 / Indeterminate Corporative Volunteer Program - EletriCidadania: the program allows employees to use up to four hours/month to perform volunteer work. 1, 2, 4, 5, 7, 8 10, 16, 17 2001 / Indeterminate Choir: promotes employees integration, the quality of life at work, the development of the music culture and education, as well as appreciation of the Copel brand in the community. Support room for breast pumping and reduced working day: comfortable and cozy place where mothers may withdraw and store breast milk to be offered to their children timely. Cultivating Energy Program: the purpose is to implement community gardens in the safety sections of Copel´s electric grids, in partnership with municipal administrations and associations of residents. 6 1, 2, 6 3 3 2010 / Indeterminate 2016 / Indeterminate 1, 7, 8, 9 1, 2, 10 2009 / Indeterminate Corporative Accessibility Program: aims to adapt the Company in accessibility issues. 1, 2, 6 11, 16, 17 2007 / Indeterminate COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 121 PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES Management Policies and Systems Eco-effi ciency Program: concentrates several eco-effi ciency initiatives developed in Copel into a single Program operating as a hub, interconnecting them, strengthening them, potentializing them, and enabling new forms of operation. EducaODS Program (Former Education for Sustainability Program): it aims to train and develop professionals, formal and informal leaders of Copel, in sustainability-related issues. Susie Pontarolli Sustainability Trophy: aims to recognize and support initiatives aimed at contributing to the promotion of sustainable development and improvement of the quality of life. Luz Fraterna Program: Program of the Government of the State of Paraná that pays the bills of consumers registered at the Social Electricity Rate, provided that consumption does not exceed 120 kWh. Morar Bem (Live Well) Paraná Program: in partnership with the Housing Company of Paraná - Cohapar – housing program for families with monthly income of up to six minimum national wages. Rural Nighttime Rate Program: incentive to increased agricultural production, to poultry and pig farmers, through discount prices for consumer units classifi ed as rural, served in low voltage. Nighttime Irrigation Program: incentive to use of irrigation to increase agricultural and poultry production and improve the quality of life in rural areas. Subsidized rates and equipment to rural consumers. PRINCIPLES AND OBJECTIVES RESPONDED GLOBAL COMPACT ODS DATE START / FINISH 7, 8, 9 6, 8, 12, 13 2014 / Indeterminate 1 to 10 4, 12, 13 1998 / Indeterminate 1 to 10 10, 16, 17 2012 / Indeterminate 1, 2, 4, 5, 10 1, 7, 11, 17 2003 / Indeterminate 1, 2, 4, 5, 10 1, 7, 11, 17 2003 / Indeterminate 1, 2, 4, 5, 8 11, 17 2007 / Indeterminate 1, 2, 8 8, 11, 17 2003 / Indeterminate Energetic Effi ciency Program: aimed at effi cient use of electricity in residential, industrial, trade and public facilities, located in Copel´s concession area. 1, 2, 8 7 2000 / Indeterminate Paraná Cidadão (Paraná Citizen) Program: promoted by the Special Department for Community Relations, with the purpose to offer free services that promote civic awareness and social inclusion. Copel participates by providing information about its products and guidelines on safe and effi cient use of electric power. 1, 2, 4, 5, 6, 10 1, 7, 10, 17 2003 / Indeterminate COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 122 PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES Management Policies and Systems PRINCIPLES AND OBJECTIVES RESPONDED GLOBAL COMPACT ODS DATE START / FINISH Digital Paraná Program: digital inclusion in public education, through connection with of State schools to the Internet, in partnership with the State Government and the Department of Education, with priority to locations with low HDI. 1, 2, 4, 5, 6, 10 1, 9, 11 2003 / Indeterminate Connected Paraná Program: the initiative provides access to optical fi ber Internet 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 spread affordable Internet access to all municipalities of Paraná. The city halls and the providers, which join the communication service plan, undertake commitment to provide affordable internet access service. 1, 2, 4, 5, 6, 10 1, 9, 11 2010 / Indeterminate Social Electric Power Rate: Established by Law 10.438/2002, it offers discounts on electricity consumption up to the limit of 220 kWh to families registered in the Unifi ed Registry of Social Programs of the Federal Government, provided that the other criteria set forth in Aneel Resolution 414/2010 are complied with. 1, 2, 4, 5, 6, 10 1, 7, 11 2002 / Indeterminate Mais que Energia (More than Energy) Project: implementation, expansion and consolidation of social investment projects and programs for the community. Smart Grid Project: installation of 2000 telemetering points in the urban area of Curitiba and 1000 points in the rural area of Colombo and Bocaiúva do Sul, reading is done every hour, enabling detection of errors, power outage and reading for billing without use of teams. Telemetry: it enables the automated collection of data in real time, optimizing the process for more precise collection, handling and availability of data, including for customers, via Internet. Distributed Generation: type of power generation other than centralized, usually of greater size and greater environmental impact, because it is done with or close of consumers. Illuminating Generations Project: Lectures for fourth-grade students from public schools, of informative and preventive nature regarding the conscious and safe use of electric power, use of natural resources (energy and water) and correct disposal of waste. 1, 2 1, 7, 10, 11, 16, 17 2014 / Indeterminate 1, 2, 7, 8, 9 7, 9, 13, 17 2015 / Indeterminate 8, 9 7, 9, 13 2010 / Indeterminate 7, 8, 9 7, 9, 12, 13 2004 / Indeterminate 1, 2 4 1970 / Indeterminate COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 123 PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES Management Policies and Systems Mais Clic Rural Program: improving the quality of electric power supply in rural areas, focusing on agricultural activities integrated with production processes sensitive to interruptions. PRINCIPLES AND OBJECTIVES RESPONDED GLOBAL COMPACT ODS DATE START / FINISH 1, 2, 7, 8, 9 7, 11 2015 / Indeterminate Solidarity Bill: incentive to customers, who choose to receive the bill by email, at each registration, Copel donates BRL 1.00 to APAE institutions in the State of Paraná. 1, 2 10, 12, 17 2015 / Indeterminate Program of Integrated Actions for Development and Civic Awareness - UPS Civic Awareness: Integrated actions for urban development and social promotion, as well as recovery of civic awareness 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 federal, state and municipal administration and the civil society, contributing to improve public safety and local social-economic development. 7, 8, 9 7, 11, 17 2013 / Indeterminate Corporate Waste Management Program: it aims to reduce, reuse, measure and monitor the solid waste generated by the Company. 7, 8, 9 8, 11, 12 2006 / Indeterminate Selective Collection: destination of recyclable administrative waste for recycling associations and cooperatives, promoting social inclusion and improving quality of life by generating income for the waste pickers. 7, 8, 9 1, 10, 11 2009 / Indeterminate Prevention: raises the population´s awareness about the importance of taking care of pets, in order to prevent accidents with Copel´s and Sanepar´s readers and postmen. 7, 8, 10 4 2015 / Indeterminate Urban Forests Program: it works together with the city halls for planning afforestation of public roads, contributing to environmental improvement of cities and reduction of power supply interruptions caused by the confl ict between vegetation and electrical systems. Riparian Forests Program: it aims to recover natural environments surrounding the reservoirs of power plants and other areas of interest of the Company. Program for Monitoring and Repopulation of Fish Fauna: it aims to monitor and repopulate the Company´s reservoirs and the rivers, where Copel´s projects have some infl uence. Experimental Station of Ichthyological Studies: studies and reproduces species suitable for repopulation of rivers and reservoirs in Paraná. 7, 8, 9 11, 15, 17 2008 / Indeterminate 7, 8, 9 7, 8, 9 7, 8, 9 6, 15 2006 / Indeterminate 6, 15 1993 / Indeterminate 6, 15 1992 / Indeterminate COPEL IN NUMBERS ABOUT THE REPORT MESSAGE FROM THE PRESIDENT CONTEXT OF THE SECTOR ABOUT COPEL AND BUSINESS MODELS CORPORATE GOVERNANCE SUSTAINABILITY CAPITALS GRI CONTENT INDEX APPENDIX 124 PROJECTS / PROGRAMS / MANAGEMENT SYSTEMS / PARTICIPATIONS AND POLICIES Management Policies and Systems Control of invasive and/or exotic species: monitoring and control of invasive and/or exotic species of wildlife and fl ora. Recovery of degraded areas: monitoring and recovery of degraded areas. Forest Gardens: it aims at production of seedlings suitable for application in other Company Programs. Botanical Garden: it aims to preserve and research plant species and to house collections of exotic ornamental plants. PRINCIPLES AND OBJECTIVES RESPONDED GLOBAL COMPACT ODS DATE START / FINISH 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: it 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 Scientifi c Flora and Wildlife Exploitation Memory in the implementation of WPP Gov. Ney Braga. 7, 8, 9 4, 10, 11 2000 / Indeterminate Ecosystem Services: direct and indirect contributions of the ecosystems to the economy and the well-being of humanity. 7, 8, 9 6, 8, 11, 15 2015 / Indeterminate Life Cycle Analysis: A tool that quantifi es the environmental impacts of given product or service. It is composed of categories, such as: greenhouse gas emission (GHG), acidifi cation, eutrophication, toxicity, consumption of natural resources and depletion of the ozone layer. 7, 8, 9 7, 8, 12, 13 2015 / Indeterminate Reserve Logistics: plans, recommends and structures the actions related to the aspect within the scope of the Corporate Waste Management Program. 7, 8, 9 12 2014 / Indeterminate 

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