About the Sustainability Report

GRIG4-1

In order to represent all our stakeholders in our performance and the performance of our subsidiaries from January 1 to December 31, 2014, we publish this annual Sustainability Report, where we also express our corporate governance principles and our three-dimension management: economical, social and environmental. Our purpose is to provide an account of the main events and challenges faced during the period, in addition to serving as a tool for a dialog between Tractebel Energia and its stakeholders. GRI G4-28 | G4-30

This report was developed by a multidisciplinary team, consisting of representatives from different areas, including the Sustainability Committee, to ensure the disclosure of the most significant issues for Tractebel Energia. In addition, this report was validated by our Executive Committee. We also consulted our stakeholders, using quizzes and in live events held in 2013 and 2014, coupled with interviews conducted at the beginning of 2015. The consultation proposed the discussion of sustainability-related matters, which allowed the interviewees to freely suggest the discussed matter. This process resulted in the selection of 11 relevant topics, presented below. GRI G4-18 | G4-24 | G4-48

The contents of this report are aligned with the Global Reporting Initiative (GRI), version G4, guidelines, Comprehensive option contemplating sector indicators. Furthermore, as part of the gradual adoption of the Integrated Reporting standard, of the International Integrated Reporting Council (IIRC), in this report we apply some of IIRC recommendations, especially those related to the short-, medium- and long-term value generation, and the presentation of the business model. This document was externally verified. GRI G4-48

Thus, as in the previous issues—the last of which was published in April 2013—, this publication includes the contents of the Management Report of Tractebel Energia, which complies with statutory requirements. In order to verify the information consistency, as recommended by the IIRC, the structures of both reports were adjusted to the extent possible. Similarly, we disclose updated social and environmental indicators in our quarterly releases of economic and financial results on our website. Our executives were involved in the communication information reporting processes, such as the disclosure of this Sustainability Report, intranet communication, and dissemination of social and environmental programs in our internal bulletin.GRI G4-29 | G4-32 | G4-33

The consolidated financial performance of Tractebel Energia and our direct and indirect subsidiaries are available in the financial statements, at http://www.tractebelenergia.com.br/wps/portal/internet/investidores/informacoes-financeiras/demonstracoes-financeiras.GRI G4-17

For clarification or more information about the contents of this Sustainability Report, please contact our Investor Relations Department, via the e-mail ri@tractebelenergia.com.br or by telephone +55 48 3221-7221. GRI G4-31

Materiality ProcessGRI G4-18 | G4-19

The materiality process conducted by Tractebel Energia underwent the three steps proposed by the GRI G4 guidelines—identification, prioritization, and validation—, and complies with the four principles recommended by the GRI: sustainability context, stakeholder inclusiveness, materiality, and completeness.

The analysis and definition process developed to prepare the materiality matrix took into consideration Tractebel Energia’s documentation, sector studies, media surveys, and GRI documentation, as well as the analysis of the previous materiality processes of Tractebel Energia and GDF SUEZ and interviews with our executives, chief executive officer, and chairman of the board.

The GRI G4 materiality definition process recommends assessing the organization’s economic, environmental and social impacts and potential of the sustainability issue influencing decision-making. The lines of analysis used for this report were as follows:

Potential of an issue influencing the assessments and decisions of stakeholders

Macro issue	Compilation	GRI Sector Supplements and Sustainability Topics for Sectors	Sector	Survey
Source	Results of 2013 survey	Specific documents	Survey of sector reports	Media survey conducted by Media Group
Weight (%)	40%	20%	20%	20%

Organization’s economic, environmental and social impacts

Macro issue	Compilation	Interviewees’ perception	Sector
Source	Results of 2013 survey	Interviews with executives	Survey of sector reports
Weight (%)	30%	50%	20%

Based on the results obtained, we started to validate the issues based on new interviews, conducted in 2015, with external stakeholders with a vast knowledge of the business: customers, environmental specialists, and government and sector entities. During the process, some aspects were suggested, reinforcing the importance the Company awards to community-related issues such as biodiversity (GRIG4-EN11) and emissions (GRIG4-EN21), (GRIG4-27)

After the external and internal validation process, we have defined the following material issues and GRI G4 aspects to be reported by Tractebel Energia:

Material issues		Aspects	Indicators
1	Economic performance: economic value generated and distributed, and scenario impacts on the business	Economic performance	G4-EC1
6	Sector context (regulatory and pricing environment, power auctions, and hydrology)	Economic performance	G4-EC2
6		Economic performance	G4-EC4
7	Generation capacity, operation uptime, innovation, research and development, and search for energy generation alternatives	Portfolio	EU1
			EU2
			EU8
		Availability and reliability	EU10
		System efficiency	EU11
		Access	EU30
		Access	EU23
8	Customer portfolio management	Product and service labeling	G4-PR5
9	Generation capacity increase (investments, licensing and prospects)	Investments	G4-HR1
9		Assessment of human rights related impacts	G4-HR9
12	Water and effluent management	Water	G4-EN8
			G4-EN9
			G4-EN10
		Wastewater and waste	G4-EN22
		Wastewater and waste	G4-EN26
13	Energy use and energy efficiency	Energy	G4-EN3
			G4-EN4
			G4-EN5
			G4-EN6
			G4-EN7
14	CO₂ emissions and low-emission alternatives	Emissions	G4-EN15
			G4-EN16
			G4-EN17
			G4-EN18
			G4-EN19
		Products and services	G4-EN27
16	Employment and labor relations	Employment	G4-LA1
			G4-LA2
			G4-LA3
			EU15
		Labor relations	G4-LA4
		Non-discrimination	G4-HR3
		Freedom of association	G4-HR4
18	Occupational health and safety (own and outsourced employees)	Occupational health and safety	G4-LA5
			G4-LA6
			G4-LA7
			G4-LA8
21	Community relations (includes local engagement and relationship, complaint, and issue and complaint resolution channels)	Environmental grievance mechanisms	G4-EN34
		Labor practices grievance mechanisms	G4-LA16
		Rights of traditional indigenous peoples	G4-HR8
		Human rights grievance mechanisms	G4-HR12
		Local communities	G4-SO1
		Local communities	G4-SO2
		Local communities (sector)	EU22, EU19
		Grievance mechanisms for impacts on society	G4-SO11
		Biodiversity	G4-EN11
		Emissions	G4-EN21

This materiality analysis process evidenced new management and operation issues. The only issue that was not indicated as material for this reporting cycle was ‘training and education’. Even so, the issue was kept due to its importance for Tractebel Energia. GRIG4-23

Materiality Limit GRIG4-20 | G4-21

According to GRI G4 guidelines, the reporting organization should assess the location of the impacts of each aspect considered in the materiality process by identifying its limits, i.e. if the impact is within or outside the organization.

This analysis is used to guide the indicator monitoring process of Tractebel Energia by observing, in the case of the internal analysis, which activity should be developd to focus on the issues and, in the external analysis, to which point could/should our management go.

Within the organization

As the impacts are not always organization-wide, and since each business has different processes and services, the Company was divided as follows, for the analysis from an internal standpoint:

Tractebel Energia (all operations);
Hydroelectric power plants;
Thermoelectric power plants;
Supplementary sources (biomass, wind power, solar, and small hydroelectric power plant); and
Tractebel Comercializadora de Energia

Outside the organization

The material and priority aspects were also analyzed from an external standpoint and divided into two categories of impacts:

Direct – Significant or real (measurable) impact and/or influence outside the organization.
Indirect – Significant or real (measurable) impact and/or influence caused by an agent of the organization’s value chain.

In the process, only the aspects outside the organization classified as direct were presented. The detailed limit of the impacts is shown in the GRI Index.