Annual Sustainability
Report
2011
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GRI EN4; EN16; EN18; 4.14; 4.15; 4.16

The belief that it is possible to grow in a sustainable manner and engage its whole relationship network in practices that promote the construction of a better world has been an integral part of the Algar Group’s essence. The Group is a signatory to the Global Compact, an initiative developed by the United Nations Organization (UNO) to encourage the corporate community to adopt values related to human rights, work relationships, the environment and the fight against corruption.

These values are put into practice through programs focusing on two essentially complementary areas – the environment and social arenas.

Programa Algar Sustentável (Sustainable Algar Program)

The search for development and adoption of sustainable actions with emphasis on the environment has been a common concern shared by all Algar companies. Over the last years, the sustainability guidelines were updated to include the challenge of reducing Greenhouse Gas Emissions (GGE). A first assessment of the GGE volume produced by the companies revealed that the Algar Group produced 42,575 tonnes of CO2 in 2010. In the year-over-year comparison, the same type of emissions totaled 35,350 tonnes, representing a 17% drop.

Total Direct and Indirect Greenhouse Gas Emissions by Weight.

Direct Emissions
 Substance    2011 (tonCO2e)    2010 (tonCO2e)    (Year)  
Generation of Electricity, Heat or Steam (EN3)  20,059.4   26,517.6    
Other Combustion Processes  ‐    
Physical or Chemical Processing 0.9 0.6   
Transportation of Materials, Products and Waste  7,047.1   5,616.8   
Opening of Venting   
Fugitive Emissions 383.9 238.6   

Indirect Emissions – Acquired (EN4)
 Substance    2011 (tonCO2e)    2010 (tonCO2e)    (Year)  
Consumption of Indirect Energy    2,947.8  4,989.0   

Optional Indirect Emissions
 Substance    2011 (tonCO2e)    2010 (tonCO2e)    (Year)  
Generation of Electricity, Heat or Steam (EN3)  25.7  ‐   
Other Combustion Processes   
Physical or Chemical Processing 61.0 1.6   
Transportation of Materials, Products and Waste 20,154.3 6,004.8   
Opening of Venting   
Paper Consumption 1,255.8 24.8  
Fugitive Emissions   

Algar Agro was favored by the initiative to change its energy matrix (replacement of oil by-products for sugarcane bagasse in the boilers) in the soybean crushing and oil refining plant in Uberlândia. Therefore, Algar Agro is among the Group’s companies that showed the best performance in terms of GGE reduction. When compared with the previous year, the Company’s economy reached 30%. In 2012, the Company also plans to change the energy matrix in the Porto Franco plant, in the State of Maranhão, where the most appropriate renewable source of energy is the eucalyptus from reforestation areas.

At Algar Telecom, the economy reached 37%, in line with the results attained by the various projects that make up the Telecom Verde (Green Telecom) Environmental Program. The Company’s main causes of GHG emissions were tackled by implementing specific individual projects, such as the use of new technologies that dispense with the use of generators, which contributed to reducing total energy consumption by 29% in 2011. In addition, another initiative was the Clube de Carona (Hitching Club), aimed at reducing the impact from the second major villain that causes gas emissions, which is the associates’ daily work journeys. In September 2011, Algar Telecom was listed among the group of 20 Brazilian companies that invest the most in environmental protection, as shown in a ranking published by Época magazine.

At Rio Quente Resorts, the Company adopted thermal solar panel systems to heat the water of showers, laundry and others. Moreover, in some facilities, the consumption of LPG by kitchen ovens was reduced after the introduction of electric hot plates (GHG emission rates of LPG is higher than the emission rate in the power generation).

The Algar Group’s initiatives to reduce GHG emissions also include the replacement of old generators by more modern and efficient models in all the companies; the search for solutions to reduce generation of solid waste through automation of internal processes and reduction of physical content in publicity or disclosure events; creation of programs that encourage the use of electric vehicles to conduct the regular surveillance rounds in both Algar Segurança and Rio Quente Resorts; in addition to monitoring the efficiency of the Company’s own car fleet, so as to replace those that have reached a minimum level for the efficient use.

Other actions which jointly contribute to reduce the environmental impacts from all the Group’s operations also produce the same effect in each of the Algar companies in individual terms. The construction of the Holding Company’s building, for instance, used glass in the walls and in part of the roof, which allows for higher energy efficiency. Engeset maintains a nursery for native plants of the Cerrado (tropical savanna) region; and Algar Tecnologia exerts continuous efforts towards a waste reduction project. At Rio Quente Resorts, one of the most admired examples of environmental responsibility is the Terra dos Pássaros (Bird Land). In the largest free wing bird’s nursery in South America, the bird species rescued by IBAMA – the Brazilian Institute of Environment and Renewable Natural Resources – recovered or still under ongoing treatment due to mutilation, injury, malnourishment or serious illness, are given a second chance to live in freedom.

Indirect Energy Consumption by Source

The indirect energy used by Algar Group is purchased directly from the interconnected electric grid. Thus, it is not possible to identify the primary source of power within the Brazilian energy matrix.

Consumption of Indirect Energy by Source
  2011 (GJ) 2010 (GJ)
 Electric Power 366,765 349,989

Algar Institute


The social investments
are channeled through the Algar Institute, a Public Interest Civil Organization (OSCIP)
In regarding people as talents, the development of human potential consists in the chief intention behind the Algar Group’s actions towards the community. The social investments are channeled through the Algar Institute, a Public Interest Civil Organization (OSCIP) that receives funds from all the Group’s companies. In 2011, Algar companies altogether invested R$4 million.

Overall funds were earmarked for the maintenance of three programs run by the Institute. The Algar Educa (Algar Educates) Program is intended to the specific training of teachers, school managers, as well as managers from central bodies of educational public administration. It aims to discuss and disseminate the idea of Integral Education within the scope of Human Development. The Program phases include the preparation of an action plan aimed at turning discussions into actual initiatives and be easily disseminated throughout the school community.

The program includes on-site and distance learning. The on-site activities involve two training meetings (total of 32 hours/year), two conference calls (total of 4 hours/year), one closing lecture (4 hours) and one educational forum (6 hours), the two latter held in November. Simultaneously, two optional distance learning modules are offered, totaling an additional 40 hours. The training program also presupposes the fulfillment of guided written assignments throughout the process.

In 2011, Algar Educa involved 345 educators from 99 schools, located in ten cities of four States: Goiás, Maranhão, Minas Gerais and São Paulo. The program benefited 2,581 students and had the participation of 476 volunteers. The Algar companies’ associates are also encouraged to integrate with the community, as part of the Algra Institute’s initiatives.

Intended to directors, educators and teachers of the public school network of Uberlândia, the Algar Lê – Correio Educação (Algar Reads) Program promotes workshops aimed to develop the educators’ skills in making use of newspapers in classroom activities from the 1st to the 9th grade. The main purpose is to improve the students’ reading and writing skills, turning them into readers and writers of contents, as well as teaching them to value the print newspaper as a cultural vehicle that plays a key role in history and local identity. In 2011, 45 educators from 15 schools replicated this initiative to 2,400 students.

The Algar Transforma (Algar Transforms) Program is developed in partnership with Associação Encantar through the use of Federal and State of Minas Gerais Laws of Incentive to Culture, and consists in a program of complementary education to children and teenagers (7 to 14 years old), which aims at the social inclusion by means of training workshops in the fields of digital culture, environment, integrated arts and literature. The activities take place in the Algar Group Sports Club located in Uberlândia, and in 2011 involved 400 students and 10 educators from 2 schools.

In total, the Algar Institute programs were carried out in partnership with 116 public schools of 11 cities in 4 States (São Paulo, Minas Gerais, Goiás and Maranhão), and involved nearly 400 educators and 5,400 students. The Algar companies’ associates are also encouraged to take part in this action as volunteers.

The Institute was also in charge of coordinating the allocation of over R$200,000 from income tax payable, through the Fund for Children and Teenagers (FIA). Altogether, eight municipal councils for the rights of children and teenagers (CMDCAs) and eight organizations were granted this financial aid. The beneficiary funds are based in the cities of Araguari, Cláudio, Iguatama, Ituiutaba, Pará de Minas, Patos de Minas and Uberaba, all in the State of Minas Gerais, and one in the city of Franca (State of São Paulo).

In general terms, as can be evidenced by the social actions described above, the Algar Institute is in charge of managing the Algar Group’s relationship with the community. Its daily activities include making contact with the municipal and state education secretariats, public elementary schools, educators (school managers and educators), an students, in addition to representative institutions in this segment. One example is GIFE (Group of Brazilian Institutes, Foundations and Companies), a non-profit institution that groups different types of formal and informal organizations, such as entrepreneurial, family-run, independent or community, which invest in public-purpose projects. Another example is the Instituto Ethos de Empresas e Responsabilidade Social (Ethos Institute of Business and Social Responsibility), whose mission is to mobilize, sensitize and help companies to manage their businesses in a socially responsible manner by turning them into partners for the construction of a more equitable and sustainable society.

Engagement of stakeholders of the the Algar Institute is distinguished, since it involves each kind of public in different moments.

1) Municipal and state education secretariats: the Algar Institute relates in person with the education secretaries and superintendents twice a year. At the start of works, Algar Institute submits its action plan for that city, and at the end of the year, when the works are completed and the Institute informs on what the funds were used for, and the submitting of annual accounts. In addition, a number of contacts by phone and e-mail are made throughout the year.

2) Students: students take part in the Algar Institute’s projects indirectly, although they constitute the target public. Twice a year, they fill out an evaluation form, in the beginning and at the end of the year, with the purpose to measure their learning improvement rate.

3) Educator: many training opportunities are offered during the entire year. In 2011, three social programs were carried out: Algar Educa, Algar Lê and Algar Transforma.
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