2018
Sustainability Report
03
Word from the President
56
Internal public
06
Identity
72
Customer experience
12
Scenario conception and assertiveness in demand forecasting
79
Relationship with other stakeholders
24
Ethics, transparency and integrity in business
90
Recognition
37
Sustainable construction methods
95
About this report
53
Environmental solutions for enterprises
104 GRI content index 120 Preparation
Word from the President 102-14 | 102-15
MRV | 2018 SUSTAINABILITY REPORT
In 2018, we adopted the right strategy, based on organic growth with efficiency gains and improved productivity, and we have achieved a higher profitability. The focus on the production of economic real estate, an important segment in the domestic context, with lower credit costs and higher demand than supply, contributed to our exceptional performance and to maintain our position in the market. We obtained the best operating result in our history, with records of R$6.42 billion in launches and R$6.22 billion in sales, which increased our net revenue by 14.1% and net profit by 5.6% compared to the previous year.
3
Contributing to our exceptional performance and to maintain our market position is our focus on the production of economic real estate, an important segment in the domestic context In this context, what distinguished 2018 from previous years regarding the performance of the “green blood” team – an internal name used to identify employees engaged and committed to our corporate culture - was the fact that we made significant progress on several fronts. We achieved greater convergence among the various areas of the company, which resulted in a significant improvement in our teams’ performance. We can sum up the year of our 39th anniversary in one word: Purpose. It is our inspiration for all that we accomplish and will come to accomplish. We strengthen our commitment to ethics through a high level of governance, with the best sustainable practices and the pursuit of excellence in the experience of our customers through technological innovation in our products, our processes and our operations. The company’s results also support the high satisfaction of employees, partners and suppliers, as well as the respect and interaction with our neighbors in the communities where we operate, providing improvements and achievements for all those involved with MRV.
MRV | 2018 SUSTAINABILITY REPORT
In 2018, we did a great job to expand this concept that moves us, the Purpose Project, which involved all areas of MRV in order to redesign our values. We understand that the a company’s sustainability depends on the soundness of its principles and values, but they need to be improved and updated since the significant growth we have experienced throughout our path imposes a high degree of complexity in conducting business. It is necessary that all employees assimilate and work in accordance with our values, especially according to ethics and respect for others and the environment. Thus, together, we updated the purpose that symbolizes our corporate culture, a task that has resulted in the definition directing our actions: “Building Dreams that Transform the World.” In this sense, the past year has been one of great achievements. Our commitment to sustainability was highlighted, for example, by our permanence in the portfolio of the Corporate Sustainability Index (ISE) of B3 S.A. – Brazil, Bolsa, Balcão (B3). In addition, we are signatories of Brazil Network in the United Nations Global Covenant (UN) since 2016 - aligned with its principles, as well as with the initiatives of the Sustainable Development Goals (SDGs). In September, the Global Covenant Brazil Network held the SDGs in Brazil – The Role of the Private Sector in New York during the 73rd United Nations General Assembly, in which MRV presented the case “How SDGs generate value for MRV” and was one of 19 companies to show its initiatives aligned with the SDGs. MRV was chosen among 80 projects by an independent jury committee of PricewaterhouseCoopers (PwC) based on specific criteria for the event. All of this is the result of a journey of many years, developed with the collaboration of all those involved, with ambitious goals and objectives focused on all dimensions of sustainability. 4
Another area in which we have evolved considerably is that of consumer relations. We expanded and consolidated the adoption of the Net Promoter Score (NPS) methodology, which evaluates the client’s perception of each stage of the relationship with the supplier. We have strengthened the engagement of all internal areas and, along with our employees, we have enhanced the residents’ experience before, during and after the acquisition of our properties. Today, this is one of the most important projects, because we consider that purchasing a real estate goes beyond receiving its keys. It represents a lifetime dream for most people, involves expectations and emotions, which increases our responsibility and distinguishes our performance. The Net Promoter Score (NPS) methodology contributes to improve our work and strengthen the partnership during the customer’s journey with us. During this period, we have attained very positive results in compliance, which strengthened our controls and improved our risk management. In the area of technological innovation, we achieved excellent results through years of investment that made us the first sector’s construtech. With the advances made in 2018, we entered the industry 4.0 era, and we received awards that recognized our results, for example, our project in artificial intelligence to serve our customers. We permanently monitor the trends in real estate consumption of future generations to offer products and services in tune with their time, besides developing skills that will support new market demands. We are a consolidated and successful company, evolving and renewing itself without losing its values and principles.
We carried out and encouraged several projects in Brazil and in the communities that received our projects, impacting with their creation more than 325 thousand people directly and indirectly with projects focused on improving education, and we were able to change the realities of these people. Our challenge for the coming years is to be the best real estate developer in the country. We believe that Brazil is moving towards resuming growth, especially if we are able to approve the reforms and changes our country needs; together with our continuous challenge to improve management and indicators, we have a great responsibility in transforming our society. We have taken a first step to consolidate a strategy that can be a major differentiator in the future in order to respond with innovative solutions to the changes involving society, providing a dignified life and better opportunities for all. This is our Purpose for the coming years: To build Dreams that Change the World.
Eduardo Fischer MRV CEO
Through the actions of the MRV Institute, we express the corporate vision that offering jobs is not enough; it is necessary to effectively contribute to the transformation of society.
MRV | 2018 SUSTAINABILITY REPORT
5
Identity
Profile 102-15
Those who visit MRV Engenharia e Participações S.A.’s headquarters in Belo Horizonte (MG) for the first time will find an attraction that calls their attention even before they enter the building: a photovoltaic energy tree for mobile phone charging and use of Wi-Fi that stands out in the landscape and says a lot about the company. The largest residential construction company in Latin America is also MRV | 2018 SUSTAINABILITY REPORT
6
the first to use solar energy on a large scale in the segment in which it operates, economic properties, in order to promote the use of clean and inexhaustible energy in their enterprises – and should reach 100% of them by 2022. The tree also symbolizes the ramifications that, in 39 years of history, have extended the company’s presence to 159 Brazilian cities – in 2018 it entered Manaus (AM) – in 22 states and the Federal District. 102-1 | 102-2 | 102-3 | 102-4 | 102-6 | 102-7 | 102-10
The stylized palm tree is also a representation of MRV’s commitment to the continuous pursuit of excellence in sustainability management in all its dimensions – governance, social and environmental. Member for three consecutive years of the portfolio of the Corporate Sustainability Index (ISE), signatory of the Brazil Network of the United Nations Global Compact (UN) since 2016 and aligned with the Sustainable Development Goals (SDG) initiatives, the company has adopted programs, measures and procedures for sustainable practices that span from decision-making at the highest level to the final end of its operations.
In 2018, the company invested R$50 million in innovation and maintained the allocation of 1% of its budget to the MRV Institute, through which it develops social projects focused on the education of children and teenagers. Since 2017, we have replaced the Parque, Spazio and Village product lines – whose projects could no longer contain the innovations developed by the company – with the offer of the Eco, Bio, Award and Garden models, created by experts attuned to the most advanced global trends. The concrete wall construction method corresponded to the end of 2018, to 87% of all its enterprises. MRV ended 2018 with 22,494 direct employees and 5,442 outsourced workers in its offices and construction sites, achieving the largest annual operational growth since its foundation. A total of 41,900 units were sold and 143 projects launched, one of which led MRV to enter a new state, Amazonas. 102-4 | 102-7 | 102-8
102-12
A publicly-held company, it participates, under the code MRVE3, in the Novo Mercado segment of B3 S.A. – Brasil, Bolsa, Balcão (B3), which validates its commitment to the highest corporate governance practices. In addition, it trades American Depositary Receipts (ADR) on the OTC PINK of the Over-the-Counter Market (code MRVNY). It also adopts corporate policies that establish high compliance criteria, Integrity Due Diligence (DDI) and Related Party Transactions, among others.
"To be green blood is to look to the future with optimism, to believe that in fact we realize people’s dreams and to know that we have a very big responsibility in relation to our clients as well as to those who are inside MRV and those who relate with it.” Eduardo Fischer President of MRV
102- 5
MRV | 2018 SUSTAINABILITY REPORT
7
Business, mission, vision and values 102-16
BUSINESS
Incorporation, construction and sale of housing units. MISSION
To make the dream of owning a house come true by offering properties with the best cost/ benefit ratio for the client. VISION
To be the best company for the incorporation, construction and sale of economic enterprises in Brazil. VALUES
Ethics and transparency Think like the customer Shareholder value generation Committed team Sharing success Sustainability MRV | 2018 SUSTAINABILITY REPORT
8
MRV in numbers
2018
2017
2016
22,494
14,314
14,673
5,419
4,760
4,249
Ebitda (R$ million)
988
892
637
Ebitda margin (%)
18.2
19
15
Net income (R$ million)
690
653
557
480.9
408
384
8.9
6.5
5.4
Added value (R$ million)
2,404
2,140
1,902
Contracted sales (R$ million)
6,217
6,055
5,259
41,879
40,512
34,082
Launches (R$ million)
6,424
5,627
3,987
Launches (units)
41,195
37,155
26,366
Completed units
35,642
34,204
34,864
242
206
214
102-7 | 102-8
Number of employees Net revenue (R$ million)
Taxes paid (R$ million) Debt ratio (%)
Contracted sales (units)
Works in progress (units)
MRV’s investments in 2018 (R$ million)
Year
Employees*
Taxes and contributions
Dividends
Suppliers
2018
769.5
480.9
455.7
1,716.8
2017
621.5
408.0
282.3
1,458.0
2016
613.5
383.6
156.1
1,500.0
* Includes direct compensation, benefits and Service Assurance Fund (FGTS).
“To be green blood is to work with identification, delivery and guarantee so that our customers and employees have the best vision of the company.” Marcos Alberto Nunes Junior Administrative Analyst
MRV | 2018 SUSTAINABILITY REPORT
9
Performance
NORTH
Customers
102-6 | 102-8
Employees
Customers
193
683
Amazonas
331
Tocantins
352
NORTHEAST
3,655
43,874
Customers Alagoas
MIDWEST
Bahia
13,258
Ceará
8,773
Maranhão
516
Piauí
475
Rio Grande do Norte
27,765
1,950
Distrito Federal
5,076
Goiás
9,693
Mato Grosso do Sul
5,022
Mato Grosso
7,974
5,400
Sergipe
2,831
Pernambuco
7,011
Paraíba
Customers
2,585
3,025
SOUTHEAST
SOUTH
12,570 242,089 Units produced in 2018: 36,977 Total number of clients: 376,101 Total number of employees: 22,494 MRV | 2018 SUSTAINABILITY REPORT
4,126
61,690 Customers
Customers Paraná
25,872
Rio Grande do Sul
11,267
Santa Catarina
6,265
Espírito Santo
9,183
Minas Gerais
51,345
Rio de Janeiro
29,225
São Paulo
152,336
10
Highlights from 2018 102-7
Best operating result in the
net revenue,
company’s history
launches and sales
Presentation of sustainability case studies at the UN
MRV | 2018 SUSTAINABILITY REPORT
Records in
R$230 million invested in infrastructure in the neighborhoods and municipalities of the projects
R$50 billion in General Sales Value (GVS), corresponding to thousand units (land bank)
322
25 thousand
units launched with photovoltaic solar energy
36,977 thousand units produced, % more than in the previous year
12.7
40 awards in areas such as innovation, sustainability, customer relations, execution of works, among others
11
Scenario conception and assertiveness in demand forecasting
Economic and industry contexts The performance of the Brazilian economy in 2018 was greatly influenced by uncertainties arising from the electoral context – with the market awaiting a definition of the country’s direction until the new government was elected -, due to the truckers’ strike and the worsening of the international scene. The result was the maintenance of the growth of the Gross Domestic Product (GDP) at the same level of the previous year, 1.1%, according to the Brazilian Institute of Geography and Statistics (IBGE). The increase in the last two years, although modest, has occurred after a two-year period (2015–2016) where the annual recession exceeded 3%.
The company’s business plan combines strategies ensuring support to drive the expansion IBGE data show that the civil construction sector presented the fifth consecutive annual drop, this time of 2.5%. It was the only sector to compose the GDP calculation to have retreated, a reflection of the containment of government spending, which has a strong impact on the infrastructure area. Among all segments of civil construction, however, the best performance was that of economic properties, especially those contemplated by the Minha Casa Minha Vida program, according to data from Secovi-SP. In the absence of national statistics, the Real Estate Market Survey (PMI) of the largest union in the sector in Latin America gives a sample of business behavior: in 2018, sales totaled 29,929 units in the city of São Paulo (SP), a growth of 26.7% compared to 2017 and higher than the annual volumes calculated since 2014. The supply of financing and the high demand repressed in the low-income housing segment also drive the segment, even in adverse industry environments. Statistics of the Brazilian Chamber of the Construction Industry (CBIC) reveal that the total volume of housing financing by the Service Assurance Fund (FGTS) went from R$58.5 billion to R$59.9 billion between 2017 and 2018; while in the Brazilian Savings and Loan System (SBPE) savings, there was an increase from R$43.1 billion to R$57.3 billions. These are the main types of credit for economic real estate.
MRV | 2018 SUSTAINABILITY REPORT
Strategy and management model The strategy adopted by MRV has proven to be efficient and effective in promoting historical growth in the unfavorable political, economic and sectoral contexts of 2018. Four years ago, the company laid the foundations for this business plan, which is centered on the concept of micro-regions for land purchases and launches, which improves the balance of the land bank in each of the locations where it operates; the increase in the volume of launches in capital and metropolitan regions; and the adjustment of sales, administrative and other expenses (Selling, General and Administrative Expenses – SG&A). This combination has resulted in secure support for the challenge of driving the expansion of the MRV’s capital opening in 2007. Since then, the number of buildings signed by the brand with the financial agents has multiplied tenfold, closing 2018 at 40,882 units. The strategy unfolds into a series of resources that reinforce a bold, diversified and innovative business vision. It allows the company, for example, to operate inspired by the retail model, taking advantage of the characteristics of the markets in which it operates to intensify its presence. By knowing the situation of land prices, the peculiarities of the place and the points where the demand for real estate is greater, in a micro-region that has its enterprises, MRV is able to establish a specific plan to meet the needs of the micro-regions. Innovation, in turn, is expressed in the optimization of costs and processes and in solutions that improve services and provide greater interaction with customers. Since when it decided to follow the experience of its consumers in 2017, the company started to work to match their expectations during the whole day they are linked to it. 13
Search for technology and business diversification Still focused on customer satisfaction and loyalty, MRV delivers differentiated, sustainable products and services of the highest quality and with innovative solutions, which causes the brand to have become an object of desire of the public seeking affordable housing. At the same time, it keeps an eye out for changes in consumer habits to develop products and services in tune with the new generations. In line with this work, MRV considers it strategic to remain at the forefront of digital solutions. With investments of R$50 million in innovation in 2018, iIt is currently the only construtech in Brazil in the civil construction market, because it works with the most advanced technologies both in the way it produces its enterprises (hardware) with properties increasingly industrialized and computerized, as in the way it relates to the customer.
Seeking to remain at the forefront of digital solutions, MRV is today the only national construtech company in the civil construction market
This business plan is developed based on the multifunctional Squad management model, with teams organized by projects and focused on problem solving and the implementation of digital products. It is a modern, agile and assertive resource, still little used in the sector.
Market place The construction company has a market place, an exclusive online shopping mall for its customers, bringing together the best brands in the country, with up to 35% discount on products such as home appliances, decoration, school supplies, pet products, among others. Therefore, it builds a perennial and positive relationship even after the delivery of the keys. The actions contribute to maintaining the company’s leadership in the market and to diversify its operations, offering differentiated products, with excellent location, advantages program, hiring of services, among others, with focus on experience and in customer satisfaction.
MRV | 2018 SUSTAINABILITY REPORT
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Orbi Connects In partnership with Inter Bank and Localiza, MRV is the maintainer of the collaborative space to foster innovation and entrepreneurship. The hub, located in Belo Horizonte (MG), brings together 16 startups in different levels of maturity and segments, promoting the integration between them in a creative environment, consisting of workstations, meeting rooms and rest areas. There are also places prepared for meetings, workshops, mentoring, among others. In the same sense, to stimulate the innovative ecosystem existing in Minas Gerais, MRV supports initiatives such as TREE Lab, which meets the company’s purpose of promoting a business environment with more disruptive solutions that benefit everyone.
Risk management 103-2 | 103-3: Market presence | 103-2 | 103-3: Socioeconomic compliance
MRV operates in a sector subject to risks that require effective management instruments to mitigate them as much as possible. One of the tools adopted for this is the SWOT matrix, which evaluates the business risks, validated by the company’s management. In 2019, the updating of the system began, as a result of the change from OHSAS-18001 to ISO-45001. 102-11
In 2018, in addition to the restructuring of the Compliance area (see information in the Corporate governance chapter), MRV achieved positive results in the Legal area, in view of the work it has been developed in recent years with a preventive and consultative focus, in order to substantially reduce the incidence of processes that involve it. Preventive actions seek the adequacy of several internal procedures to stop the emergence of future actions. To this end, MRV has conducted an analysis of the history of negative results and positive, in different processes, in order to involve in training the related areas to adjust the procedures based on the problems detected in order to mitigate the risks and compensation expenses.
MRV | 2018 SUSTAINABILITY REPORT
In the technological sphere, the company began to collect results from the implementation of a system supplied with the historical basis of the processes, whose information, combined, make it possible to point out the cases where there is a risk of loss and possibility of victories in judicial cases, as well as statistics on amounts to be allocated, depending on the process. Thus, when a process in which the probability of loss is greater enters into, it can propose an agreement to reduce the risk and obtain savings. The resource therefore allows for more strategic management of the Legal department. The effect of this work was the reduction of 25%in the entry of lawsuits filed by consumers in relation to 2017. In the labor segment, the decrease was of 50% in the same comparison. In this case, there was also an impact of the change in legislation in 2017, which brought clearer regulation on several issues that were not previously well defined by labor justice. In 2018, MRV won 5,000 lawsuits and settled around 7,000 lawsuits. For 2019, the goal is to win 8,000 lawsuits and settle 6,000 lawsuits – in this case, the reduction in relation to the previous year is provided for by the estimated increase in the number of cases decided in its favor. In addition, the company has improved management by expanding its legal team, and no longer delegates the work to third parties, since it fully complies with labor legislation, preventing a third party employee from getting the company involved in any demand.
15
As of December 31, 2018, the company and its subsidiaries were parties to 981 judicial and administrative tax proceedings. The total amount of these demands involved the amount of R$5.9 million; of this amount, the majority (72%) was related to administrative fines (56%) and Service Tax of Any Nature – ISSQN (16%). 419-1
On December 31, 2018, the amount of R$549,676 was recorded as a provision, referring to tax lawsuits for which the estimated loss was classified as probable according to the prognosis of the company’s legal advisors. No claim was seen among the lawsuits that individually represented a significant portion of the provision. The other tax and administrative proceedings did not give rise to an accounting provision due to the favorable prognosis presented by the company’s legal advisors. There is no relevant tax process. In the same period, the Company and its subsidiaries were part of 3,878 labor proceedings (judicial and administrative), of which 49% of the labor claims referred to proceedings in which the claim against the Company was a conviction for subsidiary liability. The total amount involved in labor lawsuits was approximately R$129.9 million; of this amount, almost all (99%) was related to labor claims. Even so, in a conservative position, on December 31, 2018, the amount of R$39.1 million was accrued, referring to the 1,020 labor lawsuits in which the estimated loss was probable, according to the prognosis of the company’s legal advisors, in the labor area. Among those lawsuits, there was not one that individually represented a significant portion
MRV | 2018 SUSTAINABILITY REPORT
of the provision. The other labor lawsuits did not give rise to an accounting provision due to the favorable prognosis of the company’s legal advisors. The main objects involved in these processes are: payment of severance benefits from third parties, employment relationship and salary funds. Of the 3,878 labor demands, 744 refer to Infraction Notices issued by the Ministry of Labor and Employment (MTE). The company clarifies that it presents defense for each assessment and appeals, administratively, whenever the notice is deemed subsistent and there are grounds for its divestiture. Even so, once the origin of the proceedings prevails, an action aiming its annulment is proposed. 419-1
For 2019, MRV plans to launch a model for communicating and formalizing contracts with customers. The document will no longer be exclusively descriptive and on paper, and will become a selfexplanatory contract, since many of the lawsuits filed against the company arise from doubts regarding the clauses. With the use of gamification and videos, the customer will get clarification about the contract in an intuitive, clear and objective manner. With the use of a mobile phone or totem, he will be led to a an interactive journey through videos and games, learning about the contract to, at the end, decide whether to sign a short text of what MRV has proposed in the contract itself. With this, the expectation is to reduce most of the lawsuits that are currently focused on questioning the rules established in the conventional format. 103-2 | 103-3: Product and service labeling
“To be green blood is to have the feeling of ownership, the pride of being part of the company, of having followed the growth in these 22 years I have been at MRV. It’s a real sense of belonging.” Igara Pessoa Executive Manager of Contracts and Receivables
16
Risk Management Policy 102-11 | 102-15 | 103-2 | 103-3: Economic performance | 103-2 | 103-3: Socioeconomic compliance
MRV is exposed to a number of uncertainties inherent to the sector in which it operates. Market volatility affects the financial and non-financial aspects of business results. To increase confidence in meeting objectives, the company identified the need to manage risks, especially those inherent to the business that impact the strategy. The Risk and Internal Audit area, together with the business areas, prepared the Business Risk Matrix in 2016. In accordance with the MRV Group’s Risk Management Policy, the update of the diagnosis of the 36 risks monitored in the Risk Matrix is presented every six months. The objective of this half-yearly update is to provide an opinion on the internal controls applied to strategic risks, indicators and degree of exposure to the impact of risks. In addition, the document has been used as
evidence for the Corporate Sustainability Index (ISE), which demonstrates to the market that MRV adopts good practices in this area. The Business Risk Matrix is also a formalization requirement for ISO 9,001 and 16,001 certifications. Also every six months, leaders are involved in reflecting on the need to update the status of contingency plans for the main risks, classified into: conjuncture, credit, image, legal, liquidity, market, operation, regulatory and compliance. Scenario analyses are also carried out with those involved in the areas that have an interface or responsibility for the risks, in order to understand the company’s position. In these analyses, assessments are made of the impacts that the risks may bring to the business and the probability of them materializing. After this process, actions are defined to improve the monitoring of risks and control indicators to monitor the evolution of their behavior. This work results in a contingency plan for the main risks. Every time the Business Risk Matrix is updated, a follow-up is sent to senior management. The establishment of the Risk Management Policy aims to ensure that the responsibilities and guidelines are defined covering goals, methodologies and applicable monitoring. In addition, in monitoring risks, the MRV Group should, whenever possible, see opportunities that minimize negative aspects of activities, compensating these impacts with positive actions.
MRV | 2018 SUSTAINABILITY REPORT
17
Strategic risks Compliance – Risk of legal, regulatory, reputational and/or financial penalties resulting from non-conformities in the compliance and application of laws, and regulations and/or Code of Conduct, Policies and Standards of the MRV Group. Conjuncture – Risk arising from losses and changes in political, cultural, social, economic or financial conditions in Brazil.
Every six months, MRV updates the diagnosis of the 36 risks that are monitored within the scope of the internal Risk Matrix
Credit – Risk of loss resulting from uncertainty as to the receipt from customers, financial institutions and collateral for financial investments. Image – Risk of loss arising from the MRV brand being “worn out” in the market and before authorities due to negative publicity, true or not. Legal – Risk of loss arising from fines, penalties or indemnities resulting from actions of the supervisory and control agencies, as well as losses caused by an
unfavorable decision in lawsuits, or administrative. Liquidity – Risk of lack of funds to honor commitments assumed due to the mismatch between assets and liabilities. Possibility of loss arising from the inability to make a transaction within a reasonable time (cash). Market – Risk arising from the possibility of there being pressure to change the prices of products and costs of inputs for the operation. Operation – Risk of loss resulting from failure, deficiency or inadequacy of internal processes, people and systems or from external events (e.g. meteorological factors). Regulatory – Risk arising from changes in the regulations in force, which may adversely affect MRV Group’s business.
“To be green blood is to treat the company’s affairs as if they were your own. It’s really feeling like an owner, doing your job in the best possible way.” Alex Medeiros Executive Manager of Internal Audit and Compliance
MRV | 2018 SUSTAINABILITY REPORT
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Sustainability Policy 102-15 | 103-2 | 103-3: Environmental compliance | 103-2 | 103-3: Socioeconomic compliance
The MRV Group is a reference in sustainability among national companies – a condition achieved thanks to the adoption of practices that cut across all areas, and an assertive and consistent Sustainability Policy. The company is fully committed to sustainable development and management in its main pillars – social, governance and environmental – so that activities are guided by balance and responsibility in an integrated, direct and transversal manner among the employees, extending its effects to all stakeholders and locations where it operates. In addition, MRV meets the requirements required to integrate the ISE portfolio of B3 S.A. – Brasil, Bolsa, Balcão (B3); it is a signatory of the Brazil Network of the United Nations Global Compact (UN) and the Ethos Institute;
MRV | 2018 SUSTAINABILITY REPORT
and is committed to the broad spectrum that fills the dimensions of sustainability. This work has been a source of pride and its results reflect great achievements in 2018, including the historical recognition of the UN in relation to the company’s standard of excellence in its commitment to the Sustainable Development Goals (SDGs). The company also achieved all sustainability targets in its operations throughout 2018. (Learn more in the Sustainable construction methods chapter.)
MRV’s full Sustainability Policy can be checked at the link: https://ri.mrv.com.br/list.aspx?idCanal=tE2ofrR9 ZuNl73xRhP9YPQ==&pagina=2#ancora
19
The MRV case at the UN MRV presented a case study at the SDGs in Brazil – The Role of the Private Sector event regarding the SDGs, held in parallel to the 73rd United Nations General Assembly, by means of several panels that gathered successful experiences. The selection of Brazilian companies, which underwent several screening procedures, was carried out by an independent jury committee of PricewaterhouseCoopers (PwC) which evaluated specific criteria for approving the case. On September 23, two company executives presented, in New York, the case “How the SDGs generate value for MRV”. The company was the only representative of the civil construction sector among the 19 businesses selected Brazilians. Each company presented the results for one of the 17 existing SDGs. MRV, however, has shown how much the SDGs generate value for itself in general terms. (Take a look in About the report to see which SDGs MRV is already in line with.) Another striking aspect at the time was the fact that the company demonstrated that the SDGs are directly linked not only to its sustainability values, but also to its performance strategy – which does not occur in other companies. At MRV, the Sustainability Policy, the Sustainability Strategy and the Risk Matrix, and the Opportunities include the SDGs and there is a specific committee to address them. In 2018, the construction company held training sessions with 33 internal areas to identify all the indicators that impact the initiatives linked to the SDGs, also identifying the leaders of each area in order to strengthen the engagement of its teams, which provided a mapping of the specific objective to which the work is linked and, finally, a general diagnosis of their impact on MRV as a whole. This work allowed the SDGs, called Affinity Map, to be mapped for each area, posted in all sectors. The idea is to gather the indicators that, next year, will be adopted in new mapping by sector and for the whole company. The MRV case was presented in two publications: Integration of the SDGs in the Business Strategy – an achievement of the Global Compact Brazil Network, of the United Nations Development Program (UNDP) and PRIME – and SDG in Brazil – The Role of the Private Sector, led by the Global Compact Brazil Network and UNDP.
The Sustainability Policy and the adoption of best practices make the company a reference in its sector MRV | 2018 SUSTAINABILITY REPORT
20
Review of materiality In 2018, MRV developed, in partnership with TheMediaGroup, the process of reviewing its materiality matrix, whose objective was to revisit the themes considered material for the company. A list of potential topics relevant to the sector has been drawn up based on internal and external documents of high importance to MRV, including MRV’s sustainability reports from previous years, sustainability reports from competitors in the sector (Brazil and the world) and studies such as the Global Risks Report 2019 – World Economic Forum (WEF), Sustainability Yearbook 2018 – RobecoSAM and SASB – Home Builders. The consultancy
1st
Material themes defined on the basis of the prioritization and validation process and addressed throughout the report
3rd
5th
7th
also verified MRV’s performance pillars, set forth in internal documents, in releases to the market and in the disclosures of the Association of Analysts and Capital Market Investment Professionals (Apimec). All were analyzed and had fundamental weight for the research of important themes for the sector. More than 1,000 people who are part of stakeholder groups with which MRV engages were consulted through an online survey, made available between January and February 2019. It was possible to perceive the engagement of the team of employees, responsible for more than 90% of the responses to the survey.
Theme 6:
2nd
Subject 12:
Theme 2:
4th
Subject 5:
Topic 1:
6th
Subject 8:
Theme 3:
8th
Sustainable construction methods
Search for technology and business diversification
Scenario conception and assertiveness in demand forecasting
Attraction, retention and development of human capital
Enterprise environmental solutions
Ethics, transparency and integrity in business
Employee health, safety and well-being
Topic 10:
Customer experience
The process of revision of the material themes allowed MRV to reflect on the themes already worked on internally and those that should be better explored from this cycle on. (See more information about the materiality review process in About this report.)
MRV | 2018 SUSTAINABILITY REPORT
21
Economic and financial performance 103-2 | 103-3: Economic performance | 103-2 | 103-3: Indirect economic impacts
In the best operating performance in its history, MRV recorded net revenue of R$5.42 billion in 2018, an increase of 13.8% in relation to the previous year, and net income of R$690 million, 5.6% higher in the same comparison. Gross margin remained stable and expenses grew in better volume, which contributed to higher profitability. The company recorded 26 quarters of recurring cash generation, totaling R$3.3 billion, having distributed R$2.3 billion in dividends in the period. In 2018 alone, it distributed R$456 million to shareholders and repurchased R$31 million in shares. The generation of value to shareholders was benefited by the conclusion of the spin-off of the subsidiary Log Commercial Properties, which started to have its securities traded on the Novo Mercado of B3, the highest level of governance of the São Paulo Stock Exchange, under the code LOGG3.
13.8% increases in net revenue and 5.6% in net income positioned 2018 as the best year regarding the company’s operating performance
DVA 201-1
Consolidated (R$ thousands)
2018
2017
2016 (resubmitted)
Recipes
5,624,677
4,916,558
4,389,427
Inputs purchased from third parties*
(3,339,176)
(2,986,604)
(2,668,043)
Gross added value
2,249,660
1,929,954
1,721,384
Depreciation and amortization
(63,675)
(49,186)
(41,577)
Net added value and produced
2,185,985
1,880,768
1,679,807
* In the consolidated financial statements: (i) reclassification of capitalized interest balances referring to the company’s associates and jointly-controlled subsidiaries, from the caption “Properties for sale” to “Investments”, in accordance with OCPC 01 – Real Estate Development Agencies, item 6, in the amount of R$13,212 at December 31, 2016 (R$11,438 at January 1, 2016); and (ii) reclassification of capitalized interest between short and long term, in the amount of R$228,139 at December 31, 2016 (R$153,282 at January 1, 2016).
DVA (continued)
2018
2017
2016
Personnel
769,465
621,531
613,486
Taxes, fees and contributions
480,959
408,037
383,626
Remuneration of third party capital
395,544
410,180
330,329
758,137
700,024
574,404
2,404,105
2,139,772
1,901,845
201-1
Remuneration of equity capital Added value distributed
Added value received in transfer 201-1
2018
2017
2016
Equity in earnings (a)
(27,855)
(33,049)
(63,407)
Financial revenue
245,975
292,053
285,445
2,404,105
2,139,772
1,901,845
Added value to distribute
MRV | 2018 SUSTAINABILITY REPORT
22
At the end of 2018, MRV recorded 26 quarters of recurrent cash generation By reducing the size of MRV’s balance sheet, this operation also had an effect on the return on shareholders’ equity (ROE), which reached 16.5%, an extremely positive indicator when compared to the industry benchmark. As for the Statement of Added value (DVA), the company prepares it under the terms of technical pronouncement CPC 09 – Statement of Added value, which is presented as part of the financial statements, in accordance with accounting practices adopted in Brazil, applicable to listed companies, while the International Financial Reporting Standards (IFRS) represent additional financial information.
MRV | 2018 SUSTAINABILITY REPORT
“To be green blood is to have an addiction, in the positive sense, like that of a sport. When you become part of the MRV team, you discover a culture that absorbs you in an impressive way, making you feel committed body and soul to your work. There is a very human character in the relationship with colleagues and there is the beauty of the business we are doing: to build for those who never dreamed that it would be possible to have their own apartment.” Matheus Torga Investor Relations Executive Manager
23
Ethics, transparency and integrity in business
MRV’s presence in the portfolio of the Corporate Sustainability Index (ISE) of B3 S.A. – Brasil, Bolsa, Balcão (B3), São Paulo stock exchange, for the third consecutive year, attests to its excellence in corporate governance. This condition is the result of a series of policies and practices that support the quality of management.
103-2 | 103-3: Economic performance | 103-2 | 103-3: Shopping practices | 103-2 | 103-3: Anti-corruption MRV | 2018 SUSTAINABILITY REPORT
24
In 2018, the company made further progress in this area, restructuring its management committees, which were reduced from six to three – Governance and Compliance, People and Operations –, and promoting the convergence of related areas in order to improve advice and attribution in the proposition of solutions, with a view to increasing the effectiveness of the decisions of the Board of Directors. The former committees, which are no longer structured in the new format, are represented by committees – Communication, Legal, Innovation, Clients, Sustainability and Sustainable Development Goals (SDGs) and Credit Concession and Gross Margin. The year was also marked by the development of the Compliance area, formalized in the previous period and the launch of the Integrity Program, which brings together all the policies that govern commitments to transparency, ethics and the fight against corruption, also establishing measures for the prevention, detection and remediation of acts harmful to the Public Administration, private and foreign agencies. MRV has had a consistent governance structure and compliance actions in place for many years, and the creation of a segregated area
has allowed for a complete review and the improvement of instruments that prevent risks of non-conformities related to legislation, regulations and internal guidelines. Since its creation, the Compliance area has built several pillars necessary for the even more effective application of the Integrity Program, such as Integrity Risk Management, Communication and Training Plans, Due Diligence, Policies and Processes, Internal Controls and Monitoring. In the Integrity Due Diligence (DDI) pillar, suppliers, service providers, sponsorships, donations, land sellers and intermediate agents were evaluated, following the process of preventive assessment of risks of corruption, reputation and integrity in relationships with suppliers, service providers, partners, sponsored and beneficiaries of MRV, based on profile assessment, history of corruption practices and presence on restriction lists. There was also a significant evolution in the training and awareness work of employees – an initiative called Integrity Week, which had faceto-face agendas in 14 cities where MRV operates and involved more than 1,500 participants.
“To be green blood is to fly the company’s flag’ in a totally genuine way. It is to think like an owner, to be very austere in relation to the ethical precepts and cost reduction, without having to explain the MRV way of working very much, because people naturally have these commitments.” Guilherme Freitas Legal Director
MRV | 2018 SUSTAINABILITY REPORT
25
Another highlight was the launch of the Culture of Integrity, a distance education channel through which all employees with Internet access took a course on MRV’s ethical values. More than 7 thousand people participated, later answering ten questions about the content taught, with the goal of achieving 70% assertiveness for the training to be completed, without the need to return to the program. At the end of the work, the participants evaluated the quality of the course on a scale of 0 to 5, 5 being the best score, and the result was an average of 4.7. Participation is mandatory for all “green bloods”, who can access the course at any time. Also in 2018, representatives of MRV’s Board of Directors and Executive Board participated in the “Compliance” debate: Challenges and Opportunities”, held at the headquarters of the Belo Horizonte City Hall (MG), with an audience of over 160 people. In addition, the company brought together 25 suppliers and third parties in the training course “Training for the Prevention of Corruption from Companies to Companies”, conducted in partnership with the Alliance for Integrity (Afin).
MRV is one of the supporting companies of Afin, implemented by the German International Cooperation Agency GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit – GIZ, GmbH), in German). It is the only global multi-stakeholder initiative that has been initiated by the government, which has provided support to companies to fight corruption collectively. An event on the theme was held in Belo Horizonte, open to the public, which attracted more than 150 people. Another action was the company to company meeting, gathering medium and small suppliers in order to show that, even if they do not have the structure and number of MRV’s clients, they may adopt minimum compliance pillars, such as preparing a Code of Conduct or creating a confidential channel to receive complaints of internal non-conformities that require treatment.
Corporate governance policies and practices 103-2 | 103-3: Economic performance | 103-2 | 103-3: Anti-corruption
The Compliance area reviewed the main corporate policies throughout 2018, approved by the Board of Directors. All the company’s policies go through the area’s seal, and the approval must be submitted to the Board and recorded in its minutes to be considered corporate and valid in the organizational structure. Get to know the policies adopted by the company in the following link: www.mrv.com.br/institucional/pt/a-mrv/ programa-de-integridade
MRV | 2018 SUSTAINABILITY REPORT
26
The Compliance area also participated in external institutional agendas, dialoguing with representatives of society and trade associations and participating in initiatives that promote ethics, like Afin’s. The objectives were achieved: MRV was represented at events such as the Ethos 20 Years/São Paulo Conference, in which it presented one of the panels; the seminar Ethics & Compliance for Effective Management, promoted by the Brazilian Chamber of the Construction Industry (CBIC); and the Integrity Congress, held by Via Ética.
Code of Conduct 103-2 | 103-3: Anti-corruption 103-2 103-3: Environmental assessment of suppliers | 103-2 | 103-3: Occupational health and safety | 103-2 | 103-3: Non-discrimination | 103-2 | 103-2: Forced or compulsory labor | 103-2 | 103-3: Social evaluation of suppliers | 103-2 | 103-3: Public policies
MRV has a Code of Conduct aligned with the best market practices. Its first version was formalized in 2007 and, since then, it has undergone two revisions – one in 2012 and the last one in July 2015 – to accompany the changes and development of the corporate environment and employees. All versions of the Code of Conduct were approved by the Board of Directors, according to meeting minutes. The document is available online on the intranet, on the company’s website and on the suppliers’ portal: www.mrv.com.br/institucional/pt/ relacionamentos/codigo-de-conduta
Participation in institutional agendas and dialogues with representatives of society disseminate ethics MRV | 2018 SUSTAINABILITY REPORT
Its content includes guidance to employees, partners and third parties on MRV’s rules of ethical conduct and the behaviors expected and prohibited by the company. All the norms that should be adopted by the professionals are described, regardless of the hierarchical level, and by relationship groups, such as partners and suppliers. The text also points out situations that it considers unacceptable in relation to the work environment; occupational health and safety; the use of social networks; the company’s assets and resources, conflicts of interest, gifts and gifts; and relationships with partners, customers, real estate agents and accredited professionals, the press, community, contractors, suppliers, the environment, public agencies, competition and unions. In addition to the Code of Conduct, MRV developed an Integrity Pocket Guide in early 2018. The main themes addressed in the publication are: Information on the Integrity Program; MRV values; Relationship with the Public Power; Conflict of Interest, Gifts and Gifts; Relationship with Suppliers; Donations and Sponsorships; Talk to Compliance Channel; and Confidential Channel. In addition, there is a section that deals with ethical dilemmas and of how each employee should position himself. The Pocket Guide was launched in March 2018, with a circulation of 6,000 copies, and its dissemination will be gradual during face-toface events and Integrity Week. MRV also adopts a Code of Conduct for the Work, which is a summarized version of the complete document, prepared in language and visually accessible to the public for which it is intended.
27
Confidential Channel 102-17
Misconduct complaints in relation to the guidelines established by the company are forwarded, anonymously, through the Confidential Channel. The tool is important to ensure the possibility of employees, third parties and suppliers, among others, denounce acts contrary to the Code of Conduct, corporate policies and current laws. Access is available on the company’s website (www. canalconfidencial.com.br/mrv), by e-mail canalconfidencialmrv@br.ictsglobal.com and by telephone 0800 888 2833. Among the policies maintained by MRV to encourage transparency in the business is that of not retaliating against whistleblowers, which aims to protect conflict situations, including in the context of risk management.
Combating corruption 103-2 | 103-3: Anti-corruption | 103-2 | 103-3: Public policies
By approving the Anti-corruption Policy, MRV reinforced its commitment to maintaining the highest standards of integrity, ethics and governance in the conduct of its business by establishing Anti-corruption guidelines for both public institutions and private companies. The policy aims to ensure that all employees, MRV Group’s partners and suppliers understand the guidelines of the Brazilian Anti-corruption Law so that they comply with the guidelines to prevent and combat situations prone to acts of corruption, bribery and fraud. During the year, MRV supported the panel “How can companies, public institutions and civil society be protagonists in the development of integrity and the fight against corruption?”, presented at the Ethos São Paulo Conference,
MRV | 2018 SUSTAINABILITY REPORT
which aimed to promote dialogue with multiple stakeholders on the development of integrity, the fight against corruption and the fight against corruption and the influence of compliance practices on the business environment. The Compliance area has a structure dedicated to the subject with a physical structure, its own budget and operating systems that support the compliance processes and activities. The Compliance Policy, in turn, explains the functions and responsibilities of the area and the objectives of the Integrity Program. In addition to this and the Anti-corruption Policy, the Company maintains Corporate Relationship Policies with the Government; Relationships with Suppliers, Service Providers and Intermediary Agents; Conflicts of Interest; Gifts, presents and Hospitality; Donations and Sponsorships; Consequences; Integrity Due Diligence; Related Party Transactions; Sustainability; Risk Management; Non-Retaliation of Whistleblowers; Relationships with Interested Parties; and Human Resources.
28
In the Contact with Compliance service, in 2018, the following were computed:
503 DDI performed 191 statements of gifts and presents analyzed 138 consultative
compliance analyses
74 Commitment
terms analyzed
40 declarations of attachment 44 institutional letters for the insertion of anti-corruption clauses and compliance recommendations
In addition, 58 critical cases identified in 2018 that involved significant risks related to corruption were addressed and mitigated. There were no cases of corruption in the company. 205-1 | 205-3
All MRV contracts contain anti-corruption clauses and provide for the construction of evidence that proves its commitments to compliance in its relationship with stakeholders.
MRV | 2018 SUSTAINABILITY REPORT
Themes addressed in the Code of Conduct Anti-corruption – To reinforce MRV Group’s commitment to maintaining the highest standards of integrity, ethics and governance in the conduct of its business by establishing Anti-corruption guidelines for both public institutions and private companies. Gifts and hospitality – Guide and assist the conduct of employees in receiving or offering gifts, presents, hospitality and other benefits, in view of the need to avoid actual, potential or perceived conflicts of interest and situations that could characterize bribery or corruption. Conflict of interest – Establish guidelines and guide the identification, declaration and resolution of situations that may present actual, potential or perceived conflicts of interest apparent. Risk management – To express the guidelines adopted by MRV Group and its subsidiaries in the identification, assessment, communication and treatment of risks, and of the opportunities generated as a result of its operation. Climate change – Demonstrate the company’s commitment to sustainable development, climate change and the need to perform activities in a balanced and sustainable manner responsible in the various cities in which it operates. Establish principles and guidelines to be applied in the activities all over the country, with the objective of promoting the adequate management and emissions.
29
No retaliation against complaint makers – Establish rules of protection for those involved in internal investigations and for whistleblowers who, in good faith, report conduct or facts that violate the guidelines of the Code of Conduct or applicable laws. Relationship with suppliers, service providers and intermediate agents – Guide the relations between the Supplies area and suppliers, service providers and present the general, sustainability and integrity criteria used in an integrated manner in the process of contracting materials, services and equipment. Relationship with the Public Power – Reaffirm the integrity and transparency in the relationship with the Public Power and ensure the adherence of the conduct of its employees to the current legislation, corporate policies and the Code of Conduct. Aims to prevent the occurrence of situations, conducts and illicit acts against the Public Administration that may be characterized as a practice of corruption, in particular, pursuant to the Brazilian Anti-corruption Law. Sustainability – Reveal the commitment to sustainable development and the need to perform activities in a balanced and
MRV | 2018 SUSTAINABILITY REPORT
Through its AntiCorruption Policy, MRV reinforces its commitment to integrity, ethics and good governance practices in conducting its business
responsible manner in the various cities in which it operates. Establish principles and guidelines to be applied in activities throughout the country to promote sustainable management in its three main pillars: social, governance and environment. Donations and sponsorships – Establish guidelines for making donations and sponsorships in order to ensure that they occur with the highest standards of transparency, integrity and legality.
30
Commitments to external initiatives
Investor relations 102-43
MRV voluntarily joins a number of external initiatives, including the United Nations (UN) Global Compact Brazil Network, which has been present in the Anticorruption WGs since 2016, GT ODS, Engineering and Climate GT, Human Rights GT, Water GT and Communication GT; the Ethos Institute, present since 2016, in the GT de Integridade e GT Fórum Clima; the Brazilian GHG Protocol Program since 2015; the Carbon Disclosure Project (CDP) since 2016; the CDP Supply Chain since 2018; the Blue House Seal, from Caixa Econômica Federal, since 2017; the ISE since 2016; and the offset of the company’s emissions since 2015. 102-12
It is also associated with several agencies, both linked to its sectors of activity and to issues related to sustainability, among them, the Construction Industry Union (Sinduscon). The company is supported by CBIC and Afin – the Brazilian Association of Real Estate Developers (Abrainc), the Social Service for Construction (Seconci), the CBIC and Afin – which it supported and participated in the conception of the Full Day of the event. 102-13
2018 was economically troubled due to the Brazilian general elections. In this context, the company’s IR sought to get even closer to investors, which hold 66% of the company’s shares, in order to make clear MRV’s solidity and its commitments to governance, ethics, compliance, people and sustainability. IR maintains a number of channels of communication with these audiences, on its corporate website, where annual and quarterly reports and information on the progress of business are available. The company also promotes face-to-face meetings, conferences, visits and frequent meetings with investors from different parts of the world where it discloses clear information and in accordance with the rules that govern the financial market. For the third consecutive year, in 2018, the company joined the ISE, of B3, being the only company in the sector to make up the portfolio, which seeks to enable a comparative analysis of the companies listed on the São Paulo Stock Exchange under the aspect of sustainability, based on economic efficiency, environmental balance, social justice and corporate governance. A member of B3’s Novo Mercado segment, the company strives to maintain differentiated corporate governance, being recognized for its maturity in sustainability by market analysts. 102-44
MRV | 2018 SUSTAINABILITY REPORT
31
Relationship with the Public Power
Governance structure 102-18
102-43 | 103-2 | 103-3: Public policies
MRV participates in the main discussions related to its operations, especially on labor legislation and financing with resources from the Service Assurance Fund (FGTS) through the Brazilian Association of Real Estate Developers (Abrainc). It also maintains a cordial and healthy relationship with state and local authorities the interaction is conducted through agencies such as Sinduscon and CBIC. At the municipal level, issues are dealt with directly with the municipalities, guided by the ethical principles established in the Code of Conduct. 102-13
One of the guidelines of the company’s Public Power Relationship Policy is the prohibition of acts of corruption and bribery in the relationship with public officials or other officials thirdly related to it. All employees, third parties and partners acting on your behalf are prohibited from receiving, promising, offering and/or giving, directly or indirectly, through third parties, any undue advantage for a public official or any individuals or legal agencies linked to him; finance, fund, sponsor or in any way contribute to the practice of acts harmful to the public administration; and use a representative to conceal or disguise his real interests, or the identity of the beneficiaries of the acts committed. 102-13
MRV | 2018 SUSTAINABILITY REPORT
MRV has a robust corporate governance structure, continuously improved. The management of the company is the responsibility of the Board of Directors and of the Executive Board. Additionally, the company has a Fiscal Council and advisory committees to the Board of Directors. In 2018, 100% of the senior management members (nine) were hired from the local community. 202-2
Stock ownership breakdown 102-5
Treasury stock
0.7%
Rubens Menin Teixeira de Souza
32.0%
Council and Board of Directors
0.7%
Other shareholders
66.6%
32
Board of Directors It is up to the board to define the strategic guidelines, responsible for the general orientation of the business plans, the control and supervision of the company’s performance, among other things. The company’s Purpose, “to build dreams that transform the world”, was approved in 2017 by MRV, which conducts work to redefine MRV’s
MRV | 2018 SUSTAINABILITY REPORT
values. It consists of seven members, including four independent members, one woman and six members over 51 years of age. Its President does not accumulate the position of Chief Executive Officer of the company. 102-22 | 102-23 | 405-1
33
The directors are elected at the Annual General Meeting for unified terms of two years, and may be reelected (the terms began on April 28, 2017 and will run until April 28, 2019). Ordinary meetings are held every three months, and extraordinary meetings are held whenever called by any of the members for the purpose of analyzing economic matters, social and environmental issues related to the company’s operations. These meetings may also include agendas submitted by leaders and managers on sensitive topics that require analysis and deliberation of the directors. The mandate of the current Council runs until April 28, 2019.
The Relationship Policy with the Public Power establishes, among other guidelines, the prohibition of bribery and corruption practices in relationships with public officials
102-19 | 102-31 | 102-33
Topics considered critical or of great relevance are presented to the Board of Directors by leaders and managers. They are responsible for receiving/identifying, evaluating and take
sensitive issues to the highest Board of Directors of the company. In 2018, there was no incident or critical concern that required the referral and the analysis of the Board of Directors. 102-33 | 102-34
Break down
Members of the Board of Directors
Position
Rubens Menin Teixeira de Souza
President
Marcos Alberto Cabaleiro Fernandez
Counselor
Sinai Waisberg
Independent Director
Betânia Tanure de Barros
Independent Director
Marco Aurélio de Vasconcelos Cançado
Independent Director
Rafael Nazareth Menin Teixeira de Souza
Counselor
Antônio Kandir
Independent Director
MRV | 2018 SUSTAINABILITY REPORT
34
Finance Committee As resolved in MRV’s Bylaws, the Finance Committee is not permanent. The election of its members – three effective members and three alternates – takes place at the General Meeting at the request of the shareholders, who also have the prerogative to dismiss the committee at any time. The most recent election took place on April 19, 2018, under the terms of article 161, paragraph 2, of Law No. 6,404/76. The Finance Committee acts independently, with the duties of supervising the activities of management, examining and issuing opinions on the financial statements, among other functions provided for in Brazilian law.
Executive Board Composed of up to ten Executive Officers, whether shareholders or not, the Executive Board is responsible for the daily management of the company, with the resolution, by its representatives, on all the necessary or appropriate acts in their areas, provided that they are not under the exclusive competence of the Board of Directors or the General Meeting, in accordance with the law or the Bylaws. The Directors are elected by the Board of Directors for a unified term of two years, and may be re-elected. The mandates began on April 28, 2017 and run until April 28, 2019.
Break down Directors
Position
Rafael Nazareth Menin Teixeira de Souza
Chief Executive Officer Region I
Eduardo Fischer Teixeira de Souza
Chief Executive Officer Region II
Leonardo Guimarães Corrêa
Chief Financial and Investor Relations Officer
Eduardo Paes Barretto
Commercial Executive Director
Homero Aguiar Paiva
Executive Director of Production
Júnia Maria de Sousa Lima Galvão
Executive Director of Administration and Shared Services Center
José Adib Tomé Simão
Chief Real Estate Credit Officer
Hudson Gonçalves de Andrade
Executive Director of Real Estate Development
Maria Fernanda Nazareth Menin Teixeira de Souza Maia
Chief Legal Officer
MRV | 2018 SUSTAINABILITY REPORT
35
Statutory committees The restructuring of the statutory committees was approved at the Annual General Meeting held on April 19, 2018. The Risk and Compliance and Governance, Ethics and Compliance and Sustainability became part of the Governance and Compliance Committee; the Human Resources Committee came to operate under the name of People Committee; and the Commercial and Credit, Real Estate Development and Production Committees were met in the Operations Committee. In addition, the creation of the Statutory Audit Committee was approved, which will be installed until the Ordinary General Meeting to resolve on the financial statements referring to the fiscal year 2020, pursuant to article 68, II, paragraph c, b3’s New Market Regulation. With the restructuring, the statutory committees were organized as follows:
a) Management and
Compliance Committee
b) Committee of People c) Operations Committee d) Statutory Audit Committee
MRV | 2018 SUSTAINABILITY REPORT
The company’s governance structure includes advisory committees to the Board of Directors in line with the new needs of the markets in which it operates
In addition to the statutory committees, the company has an Ethics Committee, not a statutory one, created by the Board of Directors in 2012. All the executive committees have their own internal regulations and operate in accordance with the needs of the company, and their functions and objectives are defined by the Chairman of the Board of Directors, who also has the right of veto. The Board of Directors may establish other committees according to the company’s interests and business needs. In 2019, for example, the constitution of the Statutory Innovation Committee is planned. The members of the executive committees are elected by the Board of Directors, and the participation of at least one Chief Executive Officer in all of them is mandatory.
36
Sustainable construction methods
Operational performance 102-15
MRV ended 2018 with the best operating result in its history, with records in launches and sales. The volume launched went from R$5.6 billion in 2017 to R$7.02 billion; and the values sold grew from R$6.1 billion to R$6.4 billion in the same comparison.
Among the factors that contributed to this satisfactory performance are the growing demand in the homeowners’ market and the strategies adopted by the company, among them the quality construction with affordable cost to the client; the management of enterprises with criteria of artificial intelligence and robotics; and investments in technology for greater interaction with customers.
“To be green blood is to do your best to deliver the best you can to your clients.”
for which MRV already had 26,000 licensed units, distributed among the cities where it maintains its enterprises The market share in the municipalities where it has been operating for the longest period of time is 70%, which attests to the MRV brand as the favorite of local consumers and provides a greater competitive advantage for absorbing launches, and increase in sales. At national level, the company’s market share is 12%, which shows the size of the potential to be exploited.
Evolution of launches (thousand units)
Kalel Costa Alache Regional Works Manager
41
50 45
32
To deal with materials on site, the company maintains an Inspection and Storage Table (TIA), which controls the way the material is stored, which prevents waste and the loss from breakage and damage. There is also the Service Verification Form (FVS), which checks the quality of the work delivered. In addition, MRV encourages its suppliers to propose new sustainable solutions. In 2018, it also hired the Midas Solution system, capable of ensuring greater control and quality of processes, which will come into effect in 2019 and will help in the management of suppliers.
26 16 2016
2017 Permits*
2018
2019
Launches
* License: mandatory document that authorizes the company to perform works and services and launch the project.
National market share
Market share mature cities
12%
70%
103-2 | 103-3: Materials
As part of its business plan, the investment made in recent years in land bank has led the company to close 2018 with a General Sales Value (GVS) of R$50 billion, a figure corresponding to 322,000 units, which indicates continued growth in 2019, the year
MRV | 2018 SUSTAINABILITY REPORT
38
production volume, considering the residential units and allotments, reached 40.2 thousand, an increase of 13.5% in relation to 2017.
The performance in the last quarter of the year indicates that the company recorded record launches of around R$2.23 billion, an increase of 34% in relation to the same period in 2017, expanding its presence in large cities and the middle-income public. Net sales were 6% higher than in the fourth quarter of 2017 and 31% higher than the previous quarter. The
In addition, MRV has been reducing the volume of districts through the guaranteed sales process:
Sales x District (units)
8,426 8,748
8,604
5,657
3,384
1Q15
6,099
9,977
9,855
5,480
3,222
2Q15
3,034
3Q15
6,343
2,526
4Q15
6,704
6,948
6,590 6,898
5,562
7,587
7,863
2,168
2,106
2,058
1,947
1,864
1,941
1,830
1,960
1,853
1,677
1,941
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
Net sales At the same time, the company further reduced its Productivity Index (IP) based on the implementation of innovations, mechanization and automation of the production process in conjunction with the
1,394.1 4Q18
Cancelled units aluminum formwork. PI demonstrates how many people are needed to produce a unit. The lower the indicator, the better the result. Check out a history of the number of workers needed to build one unit per month:
Evolution of the Productivity Index
11.0
2006
10.0
2007
9.8
2008
MRV | 2018 SUSTAINABILITY REPORT
9.0
2009
8.7
2010
8.8
2011
8.5
2012
8.1
2013
7.8
2014
7.3
2015
5.9
2016
5.3
2017
4.8
2018
39
During the year, the company recorded a growth of 23.7% in the number of units passed on. Another highlight in 2018 was the launch of the Brazilian Savings and Loan System (SBPE) with onlending in the plant with a private bank, in partnership with Banco Santander. Another novelty was the launch of Luggo, MRV’s apartment rental platform.
Reduction and optimization of material consumption and waste management 103-2 | 103-3: Materials | 103-2 | 103-3: Effluents and waste
Materials of renewable origin consumed (m2) 301-1
2018
2017
Laminate flooring*
302,050.18
188,316.09
Total materials consumed from renewable sources
302,050.18
188,316.09
* The data for laminate flooring for 2017 in this table differs from that reported in MRV 2017’s sustainability report, as it was reviewed by the responsible area and set for this report.
Materials of renewable origin consumed (unit) 301-1
MRV adopts a set of actions to reduce the use of materials, to mitigate the generation and reduce the volume of waste in its works. In 2018, MRV consumed several types of materials from renewable and non-renewable sources. The consumption of renewable materials increased by 60%, in the case of laminate floors, and 23%, of finished doors. That’s because there was a change in the specification of the product delivered, with the replacement of ceramic tiles by laminate floors in the bedrooms, and in the rooms. The ready door has also been standardized on all units.
MRV | 2018 SUSTAINABILITY REPORT
2018
2017
Ready door
217,631.04
176,381.62
Total materials consumed from renewable sources
217,631.04
176,381.62
* The data for the ready door for 2017 in this table differs from that reported in MRV 2017’s sustainability report, as it was reviewed by the responsible area and set for this report.
MRV’s projects increased between 2017 and 2018 and, consequently, the amount of materials used. Despite this, the consumption of non-renewable materials fell by 33% in cement consumption, 32% in the consumption of concrete blocks and 1% in the use of fiber cement roof tiles in the
40
Through the TIA table, there is a material storage control, avoiding wastes
period. This reduction in the consumption of materials is the result of the construction methods used by MRV. On the other hand, the consumption of sand*; concrete pipes, staves and precast rings; PVC pipe/connection; and aluminum windows had an increase in the order of 12%, 10%, 29% and 33%, respectively. The company does not use recycled materials in its production process. 301-2 * In some regions, MRV has concrete plants in the construction sites, using inputs and not ready-made concrete.
Materials of non-renewable origin consumed (m2) 301-1
Materials of non-renewable origin consumed (m3)
2018
2017
Ceramic tile
1,103,663.25
933,852.34
Ceramic flooring
1,030,394.96
992,798.36
Fiber-cement tile*
307,615.76
310,294.79
2,441,673.97
2,236,945.49
301-1
Sand Machined concrete Total materials consumed from non-renewable sources
2018
2017
318,048.83
283,160.22
1,006,682.49
758,674.70
1,324,731.32
1,041,834.92
Materials of non-renewable origin consumed (t)* 301-1
2017
Mortar
24,782.00
26,703.86
Cement
20,746.58
30,785.06
456,073.85
436,563.45
8,461.64
8,256.11
40,659.64
26,508.42
546,723.71
528,816.90
Texture Rebar/steel screen Total materials consumed from non-renewable sources
* The data for crushed rock and rebar/steel screen for 2017 in this table differ from those reported in MRV’s 2017 sustainability report, as they were reviewed by the responsible area and adjusted for this report. MRV | 2018 SUSTAINABILITY REPORT
* The data for fiber cement roofing tiles for 2017 in this table differs from the data reported in MRV’s 2017 sustainability report, as it was reviewed by the responsible area and set for this report.
Materials of non-renewable origin consumed (m) 2018
Crushed stone
Total materials consumed from non-renewable sources
301-1
2018
2017
76,954.51
69,939.45
Electric cable
18,689,989.62
16,933,776.97
Total materials consumed from nonrenewable sources (m)
18,766,944.13
17,003,716.42
Pre-cast concrete tube, stave and ring*
* The data for concrete pipe, dowel and precast ring for 2017 in this table differ from those reported in the MRV 2017 sustainability report, as they were reviewed by the responsible area and adjusted for this report.
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Materials of non-renewable origin consumed (unit)
Total weight of waste broken down by type* 306-2
301-1
Pipe/connector PVC normal drain1
2018
2017
4,266,550.49
3,316,595.73
229,004.26
175,775.25
20,282,616.67
29,949,906.182
146,428.90
162,555.72
30,827.15
24,502.57
Aluminum window Concrete block Sanitary ware Meter boards Total materials consumed from nonrenewable sources
24,955,427.47
33,629,335.45
2018
2017
2,476.98
2,859.12
Non-hazardous
355,509.60
173,965.10
Total waste (hazardous + non-hazardous)
357,986.58
176,824.22
By type Hazardous
* In 2017, the Climas system was not in place, and the information was entered retroactively in 2018. Thus, some waste data may not be covered since the Climas uses the items posted in the Source List (LOF) and some LOF were not standardized until 2018.
1. The data for normal sewage PVC tube/connector for 2017 in this table differs from that reported in the MRV 2017 sustainability report, as it has been reviewed by the responsible area, and set for this report. 2. The increase is due to the increase in the number of concrete wall works.
In 2018, MRV generated 1,998.78 mÂł of hazardous waste and 110,374 m3 of tons of non-hazardous waste in its operation throughout Brazil. Among the actions to reduce this volume are recycling, reuse and reverse logistics. In order to avoid the impact of the generation and disposal of waste generated at the construction sites, the company relies on the partnership of cooperatives, through donations, to recycle materials such as Styrofoam, plastics, cement bags, metal, glass, among others. MRV | 2018 SUSTAINABILITY REPORT
42
Total weight of waste by type and disposal method (m3) 306-2
2018
2017
Total weight of non-hazardous waste by disposal method
3,882.93
Recycling
69,113.71
31,124.58
0
0
0
0
Incineration (burning)*
0
0
Deep well injection*
0
0
240,468.90
95,049.31
Industrial landfill
42,044.05
40,596.94
On-site storage*
0
0
Other (specify): reverse logistics
3,417.59
6,950.74
357,986.58
176,824.22
Total
Reuse*
0
0
Recycling*
0
0
Composting*
0
0
Recovery, including energy recovery*
0
0
Incineration (burning)*
0
0
Deep well injection*
0
0
Industrial landfill
2,476.98
2,859.12
On-site storage*
0
0
Other (specify)
0
0
2,476.98
2,859.12
243.53
Recovery, including energy recovery*
Landfill of civil construction
2017
Total weight of hazardous waste by disposal method
Reuse (clean debris – concrete and cement, wood, metal, paper and plastic floors)
Composting*
2018
* MRV does not dispose of non-hazardous waste by these methods.
Total
* MRV does not dispose of hazardous waste by these methods.
Waste that is not directed to recycling is sent to companies specialized in responsible and adequate disposal, while wood and other waste are sent to specialized companies, and transformed into chips or sent to companies in various segments, which use the input as biomass for energy generation.
MRV | 2018 SUSTAINABILITY REPORT
43
Initiatives such as the donation and sale of recyclable waste provided a reduction in the generation of recyclable waste (Class B) for MRV, from January 2017 to December 2018, as the following table shows.
Sale and donation of recyclable waste (m3) Type of waste
Donation
Sale
Total
Class B
21,735.49
21,793.58
43,529.07
In addition, the construction method of concrete wall molded in situ was expanded in 2018 to 87% of the works and had a fundamental impact on the positive result of waste generation – an aspect monitored for more than four years by MRV. The volume of buckets per unit produced was reduced by 38%, which represents a decrease of 12% in the total volume in relation to 2017 – savings of R$1.8 million.
R$1.8 million saved with the reduction in the use of buckets per unit produced
Partnership for waste reduction One of the projects developed on the year counted with the partnership of Basf, which, through its brand Suvinil, proposed the substitution of the metallic packaging of its paints for the plastic packaging. Thus, since April, all the units produced by the Suvinil Acrylic Matte Eco-Design Paint, 18 liters, white, are packed in the new containers (rectangular plastic buckets)This will enable the reduction of metal waste generation and the risks of accidents inherent to its use, in addition to the reuse of the new packaging.
Management of water resources in construction 103-2 | 103-3: Water | 303-1
In civil construction, water consumption is mostly incorporated into the final product, causing the production activity to generate a low volume of effluents. MRV maintains actions, both on construction sites and in its enterprises, aimed at saving water and the conscious use of resources. As a result of these actions, water consumption in 2018 was more than 2 million m3, about 22% less than in 2017. 303-1
MRV | 2018 SUSTAINABILITY REPORT
Reuse is the main resource of the company’s water saving plan. In the works, the volume used in sinks is reused in the urinals. In the concrete mixers, after decanting, the water supplies the cleaning of the equipment itself, as well as the rain collected is intended for cleaning and irrigation of gardens and gardens. In the year, the company reused/recycled about 3,157.21 m3³of water in its works, a volume that represented about 0.15% of the total volume of water consumed. The intensity of water use in buildings, in m3/unit produced, was 53.91. 303-3 | CRE2
The housing units are built with equipment and systems that prioritize the reduction of consumption and reuse of water. The sanitary basins, for example, have a double drive system of 3 and 6 liters, which allows the control of the
44
amount of water to be used; the taps contain flow reducers that provide savings of 41.6% per minute, each, if compared to those not equipped with the device; and the rainwater harvesting system directs rainwater to common areas of the development, like bathrooms at the gates and gardens. For 2018, one of the actions planned by MRV was to systematize the calculation of the volume
of water consumed internally. The objective was achieved with the insertion of water management in the Climas, the company’s sustainability management software that includes the other indicators, which resulted in optimization and greater accuracy in the data calculated for calculation, previously accounted for in spreadsheets.
Total volume of water withdrawn, by source (m3) 301-1
2018
20171
Surface water, including water from ponds, rivers, lakes and oceans
0
0
Groundwater tables
0
0
2,254.92
735.92
0
0
2,573,775.42
3,331,013.70
2,576,030.34
3,331,749.62
Rainwater collected directly and stored by the organization2 Waste water from another organization Municipal water supply or other public or private water supply services Total
1. The data referring to 2017 were reviewed and corrected in 2018, according to data available in the software used by MRV (Climas). 2. In 2017, MRV began accounting for the volume of rainwater collected.
Energy consumption 103-2 | 103-3: Energy
MRV’s Strategic Direction determines the optimization of natural resources, including energy savings throughout the company. The Health, Safety and Environment Indicators (HSE) Planning/Map defines the strategic energy consumption, being established the target of 2% reduction in consumption per unit produced – volume accompanied by the Climas software.
MRV | 2018 SUSTAINABILITY REPORT
For 2019, MRV aims to reduce its water consumption by 2%
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The company began accounting for energy consumed in GJ or MWh from 2018. Previously, accounting was by cost only, that is, in units of currency. 302-5
In the year, the total energy consumed from renewable and non-renewable sources totaled 165,380.87 GJ, an increase of 0.96% in relation to the previous year, which can be explained by the increase in production compared to 2017 – consequently there was more use of machinery
in the construction sites that consume diesel, preference for the use of ethanol and also increased travel by the company’s aircraft. MRV consumed approximately 79,000 GJ of non-renewable fuels and more than 3,000 GJ of renewable fuels (ethanol). The electrical energy consumption corresponded to 83,079.33 GJ, 18% less than in 2017. Of the total energy consumed in the period, 13.33% came from renewable sources (use of ethanol). 302-1
Energy consumption (GJ) 302-1
2018
2017
50,325.06
33,923.64
Gasoline
7,256.42
9,370.13
LPG
1,197.64
1,542.27
20,319.12
14,208.07
79,098.24
59,044.11
Ethanol
3,203.30
2,826.54
Total energy consumed (renewable sources)
3,203.30
2,826.54
82,301.54
61,870.64
83,079.33
101,914.39
165,380.87
163,785.03
A.1. Energy consumed from non-renewable fuels Diesel
Aviation kerosene Total energy consumed (non-renewable sources) A.2. Energy consumed from renewable fuels
Total energy consumed (A.1. + A.2.) B. Acquired energy Electricity Total energy consumed (A.1. + A.2. + B)
In the same period, MRV had an energy intensity index of 0.082 GJ per m2 produced, that is, for each m2 produced, 0.082 GJ of energy were spent. 302-3
MRV | 2018 SUSTAINABILITY REPORT
46
GHG emissions “To be green blood is every day waking up, lying down, sleeping and dreaming about the company I work for. And to believe that anything is possible because that way we can achieve unbelievable things, like the UN presentation, for example. It’s embracing the company in everything you do in your job.”
103-2 | 103-3: Emissions
The management of climate issues involving MRV’s activities is carried out by means of the Climas software and, to avoid data reporting errors, the information is integrated with the SAP system on a monthly basis. The company maintains a Climate Change Policy, approved by the Board of Directors, which was updated in 2017, in addition to participating in the Climate Forum Working Groups of the Ethos Institute; Energy and Climate, of the Global Compact; and Sustainable Development Goals (SDGs), also of the Global Compact. Its emissions reduction targets (1% in Scope 1 and 2% in Scope 2) were achieved in 2018 thanks to the strategy of continuously seeking mitigation through, among other actions, awareness of its stakeholders (100% of employees and outsourced workers were trained in the year in relation to the theme), the awareness of their vulnerabilities and adaptation to them, and maintenance of the MRV Carbon Management Plan. In the same vein, the company maintains leadership in CDP Climate Change and CDP Supplier Engagement and adheres to the CDP Education initiative, whose focus is on educating employees on the online platform about climate change, water resources and forests. MRV issued around 280 thousand tCO2e in 2018, an increase of 24% over 2017, largely influenced by the increase in Scope 3 emissions. Scope 1 emissions totaled 8,811.66 tCO2e, which were reduced by 97% in relation to 2017 due to the reduction in the volume of vegetation suppression at the start of the works, which represent the majority of the company’s Greenhouse Gas (GHG) emissions. 305-5
Thais Morais Sustainability Analyst
Total GHG emissions – Scopes 1, 2 and 3 (tCO2e)*
Total
2018
2017
2016
280,352.82
226,264.81
194,938.41
* The GHG emission data for the years 2016 and 2017, for all scopes, were reviewed due to a change in the algorithm used by the GHG management software. Despite the mistake, the offsetting of emissions followed the accounting data, i.e., it was also higher.
Direct GHG emissions – Scope 1 (tCO2e) 305-1
2018
2017
2016
CO2
8,380.42
17,118.39
8,126.88
CH4
13.41
12.85
32.28
N2O
417.82
295.75
344.76
HFC
0.0
0.0
1,882.28
PFC
0.0
0.0
0.0
SF6
0.0
0.0
0.0
8,812.26
17,426.99
10,386.21
Total
MRV reduced its Scope 2 emissions by approximately 36% in relation to 2017 due to improvements in internal energy management. In addition to achieving the reduction target of 2%, the same percentage was maintained as the target for 2019. 305-5
MRV | 2018 SUSTAINABILITY REPORT
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Indirect GHG emissions – Scope 2 (tCO2e)
Environmental compliance
305-2
Total
2018
2017
2016
1,643.06
2,554.31
3,254.85
MRV recorded an increase of about 24% in Scope 3 emissions due to its construction method, more concentrated in concrete walls, which consume a large amount of inputs such as cement, concrete and steel, materials that emit a higher amount of GHG in their production processes. The company has not yet established targets for the reduction of Scope 3 emissions.
Other indirect GHG emissions – Scope 3 305-3
2018
2017
2016
CO2
269,336.56
206,272.20
180,963.19
CH4
579.05
0.27
332.96
N2O
12.22
11.04
1.20
280,382.54
226,264.81
181,297.35
Total
For the first year, MRV discloses emission intensity data, by scope, as a way of initiating a historical series that allows it to identify the efficiency with which it builds its projects, comparing them to emissions from its production process.
Emission intensity index (tCO2e per m2 produced in 2018) 305-4
Scope 1
Scope 2
Scope 3
Total
0.004
0.001
0.135
0.140
MRV | 2018 SUSTAINABILITY REPORT
103-2 | 103-3: Materials | 103-2 | 103-3: Energy | 103-2 | 103-3: Water | 103-2 | 103-3: Emissions |103-2 | 103-3: Effluents and waste | 103-2 | 103-3: Environmental compliance | 103-2 | 103-3: Occupational health and safety
The Environmental Management System remained integrated with the Occupational Health and Safety Management System (SST), complying with ISO 14001:2015 and OHSAS 18001:2007 standards. However, with the transition from 14001:2004 to the 2015 version, the policy was revised and renamed the Sustainability Policy, with its content approved by the Board of Directors in 2018. Its objective is to guide and establish the commitment to sustainable development, defining principles and guidelines to be applied in activities aimed at sustainable management. 103-2 | 103-3: Marketing and labeling | CRE8
One of the primary requirements is to demonstrate continuous improvement in safety, occupational health and environmental performance. To this end, the coordination of the HSE system is responsible for planning performance indicators, which implies defining them, establishing the respective acceptable levels, the calculation formula, the frequency of measurement and the form of control. In terms of compliance with the SiAC-PBQP-H Quality System – version 2017, MRV is Level “A” and certified in ISO 9001, version 2018. In 2018, an update was made to the criteria and requirements for evaluation of the internal audit of Quality to meet the changes in the ISO 9001/18 standard, in which the percentage of 92% was calculated.
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“To be green blood is to have a passion for what you do.” José Luiz da Fonseca Executive Manager of Health, Safety and Environment (HSE)
According to MRV’s estimate, the cost incurred to comply with environmental regulations when required in some projects corresponds to approximately 1.7% of the general sales value of the project. In relation to environmental sanctions and fines, when the company receives an environmental fine, the area responsible for the issue raised is called to assess whether it proceeds or not no. If it does, the payment is made. If it does not proceed, the administrative and/or judicial discussion will begin. In 2018, there was no relevant environmental process that could impact the company’s activities. 307-1
Innovative solutions With the use of Building Information Modeling (BIM), or Construction Information Modeling, four years ago MRV inserted in its construction process a system that is the backbone of the technological revolution in civil construction, by inserting MRV into the industry route 4.0. BIM is a methodology applied to a set of software that not only allows you to design an enterprise in 3D, verifying in real time the adequacy of the materials and the structure to be used, as well as coupling information about planning the work, budget, technical assistance, among others, covering all stages of the project – from land analysis to construction quality.
MRV | 2018 SUSTAINABILITY REPORT
A further 20 projects conceived through BIM are planned in 2019, when all the launches will be integrated to this concept. The system allows you to couple with all the features of the new digital age – such as big data, data analytics, virtual and augmented realities, Internet of Things (IoT) and cloud data – which will gradually be integrated. In line with the accelerated expansion of digitalization, the company also began, during the year, the computerization and inspection of the construction sites, starting to use tablets and other work planning and control tools – which is done through MRV Obras Mobile. The project enables you to move towards integrated planning and online portfolio of all works, with its trainees, engineers, technical assistants and coordinators accessing the information necessary for their activities in the palm of their hands. This means that they can order materials and labor measurements from anywhere on the tablet, for example, which eliminates a series of necessary steps when the information and requests had to be made by the computer. MRV gains agility and increases productivity in construction management.
As of 2019, all projects will be launched using the BIM concept, which is the backbone of the technological revolution in civil construction, positioning MRV on the route to industry 4.0 49
In relation to control, the company has a team of employees who alert the Engineers for the maintenance of the costs of the works, compliance with the deadlines, and the adoption of appropriate procedures. In 2018, by improving and optimizing digitization on construction sites, it created the conditions to open other fronts in future control activities with MRV Obras Mobile MRV also started testing with drones connected to BIM. The equipment is able to capture images for topographic survey, earth moving, construction progress, location of structural parts, walls and foundation piles, among others, detecting eventual problems that need to be solved in the construction stage. The decision to become a construcutech will provide MRV with gains on several fronts: budgets are prepared with greater agility and precision; information reaches the construction sites more quickly; interaction between employees takes place online; and the possibility of committing errors is reduced, since many problems can be detected already in the visualization of the plant in three dimensions. For such, there is an especially dedicated innovation team that acts so that MRV is recognized as an innovative company in a broad sense, involving all areas. In addition to digital innovations, the concrete wall construction method has been increasingly used by MRV because it offers greater efficiency in different aspects of projects. The resource includes the use of
self-compacting concrete and aluminum formwork for assembling centralized walls and metal slabs in a single step. This process results in less waste generation, agility in the construction and less need for labor. From 2017 to 2018, MRV increased from 69% to 87% the total of works with the concrete wall method – the projects with structural masonry corresponded at the end of 2018, the remaining 13%. The number of professionals required for the construction of an apartment per month fell from 11 in 2007 to 3.4 in the concrete wall method. The MRV + Green Seal Lighthouse, which certifies the adoption of sustainability practices and criteria in the construction works and enterprises, also measuring their efficiency, was 97% in 2017 and closed the financial year 2018 at 99.9%. The increase in productivity allows the company to invest in greater specialization and qualification of its employees, in addition to reducing the risks of maintaining a large number of people on construction sites. The cost of the concrete wall method, once the initial stage has been completed – formwork, logistical organization and labor training – is also more competitive than the masonry system. The use of gypsum in buildings was reduced, which contributed to the reduction of waste generation and its exploitation in the gypsum quarries. This is another process that results from the adoption of the concrete wall method.
Amount of gypsum consumption (kg)
Plaster
MRV | 2018 SUSTAINABILITY REPORT
2018
2017
2016
2015
11,774,502.96
20,379,859.80
31,924,917.56
70,094,498.87
50
Amount of gypsum consumption (kg)
70,094,498.87
31,924,917.56 20,379,859.80 11,774,502.96 2015
2016
Another milestone of the company was the pioneering spirit, in its sector, in developing artificial intelligence through the My MRV application. Launched in 2017, the app already has more than 100 thousand downloads. In view of the success, the construction company decided to expand the use of technology to other customer service channels. Those who access Facebook Messenger, the My MRV application and the company’s Relationship Portal have the help of Maria Rosa Vaz, a character created to interact with customers, which interprets the context of the situations and formulates the answers. As the interaction evolves, the system improves with the content that MRV’s customers require most.
Chat bot The chat bot is MRV’s automated customer service. It is in an advanced testing phase, with a robot that provides efficient and humanized service for visitors to the portal. The performance of the service, quantitative and qualitative of the chat bot, is very well evaluated by the team responsible for the project.
MRV | 2018 SUSTAINABILITY REPORT
2017
2018
The robot Mr. V goes into action when a client starts chatting on the construction company’s website to find out the real estate options available in their preferred region. He’s able to talk exactly like a conventional attendant, collecting data and responding with information on financing, values and options. At the end of the service, all the data collected is forwarded to the real estate brokers in the client’s region, to continue the process and complete the sale of the property. With tests and adjustments to the tool in February 2019, it was already possible to perceive a positive variation of almost 30% in the services sent directly to brokers. During a fire simulation training at MRV headquarters that emptied the entire building, the robot was triggered and replaced the attendants completely. For approximately 20 minutes, about 150 consultations were carried out by Mr. V. Another positive experience took place during the campaign of a real estate sales fair, where the robot served 1,800 people for a whole day. The idea is that the chat bot act in partnership
51
with professionals, seeking optimization of time and qualification in attendance. MRV provides an average of about 150 thousand services per month. With the chat bot it will be possible to reduce the time today by about 12 minutes. Automated service has already registered a 50% reduction, with an average of 6 minutes, besides being focused on the customer experience and having already received positive feedback, which demonstrates the humanized character of the tool.
MRV Come in Handy Encouraging the hiring and exchange of products and services among residents of projects is the objective of the Come in Handy project, an online platform unanimously recognized in the Latam Award, organized by the Latin American Alliance of Organizations for Customer Interaction (Aloic). The tool, practical and fast, allows customers to offer their services among neighbors or look for what they need in their own homes. They can sign up for the Come in Handy project and find many services by accessing the address: www.maonarodamrv.com.br
AT in the Palm of the Hand 103-2 | 103-3: Customer health and safety
The application aims to increase the efficiency of the customer service process by the postdelivery Technical Assistance (TA) sector, which improves satisfaction by means of automation and the optimization of the maintenance process steps, the increase of the teams’ productivity and the improvement in the management and reliability of the information.
MRV | 2018 SUSTAINABILITY REPORT
The AT in the Palm of the Hand contemplates all stages of the service process: request of repairs by the customer, sending photos and videos with the requested repair item, analysis of the rules of guarantee, inspection of the property, planning and control of services and closure with digital signature of the call on the platform. The new process organized the service flow, which evidenced the elimination of manual steps that bureaucratized and demanded more time, in addition to having substantially reduced the use of sheets of paper, which met the company’s sustainability strategy.
Apartments decorated in virtual reality MRV is revolutionizing the customer’s traditional visit to the decorated apartment on their sales shifts by investing in My Home Experience, a project that replaces the classics decorated with ultra-modern computers and virtual reality glasses. The tool brings as a novelty to the real estate market the possibility for the client to completely customize the property in minutes. The interactions are multiple and the experience promotes the feeling of being in a real apartment. There are options of different types of furniture; classic or modern environment; types of finishes, such as floors and colors; decorations for couples with or without children; and even the inclusion of pets. It is also possible to walk through the entire virtual apartment having a real dimension of the spaces of the property.
Check out the demonstration of the customer’s perspective by using virtual reality glasses for MRV’s decorated apartments.
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Enterprise environmental solutions
A pioneer in the use of large-scale photovoltaic energy in the construction sector in Latin America, MRV is making great strides towards achieving the goal of having 100% of its housing units benefit from this technology by 2022. In 2017, 30% of all the company’s projects were launched with photovoltaic panels. In 2018, the index rose to 60%; the goal is to reach 2022 with 100%.
To get an idea of the impact that has been provided with the use of the resource, the panels installed in the enterprises produce more than 700 kWh of clean energy, estimated volume based on a study that considers a series of factors, such as the total number of plates installed, the hours of higher and lower energy used, the geographical position of the enterprises, among others. This figure is equivalent to the savings of about 400,000 kilometers driven by a popular car and approximately R$400,000 in the costs of MRV’s condominiums, in addition to providing the supply of clean energy
for approximately 4,000 homes built by the company. The data appear on the MRV Solar website launched by the company in 2018. In addition, by replacing its product lines in 2017 with the Eco, Bio, Premium and Garden models, MRV now offers unprecedented solutions in its segment, with the offer of apartments guided by the concepts of sustainability, innovation and intelligence. From design to finishing, including the installation of devices that reduce the consumption of natural resources and the provision of connectivity in common spaces, the apartments have become the most modern and sustainable in the market for economic real estate.
MRV Solar shows energy saving data in real time In October, MRV launched the on the MRV Solar website, launched by the company in 2018. real-time measurement of the entire economy and the benefits provided by photovoltaic solar energy in its enterprises. Visitors have access to data, graphics and infographics with estimates on the use and production of solar energy and can follow how much energy is being generated by photovoltaic panels at the time of navigation on the portal. The address of the portal is
www.mrv.com.br/sustentabilidade/pt
MRV | 2018 SUSTAINABILITY REPORT
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Plant In 2018, MRV prepared a project to build a solar photovoltaic plant that will generate energy to supply its offices, sales and works in Minas Gerais. At the end of the year, the proposal was sent for the appreciation and approval of the State energy concession holder, Cemig. It is expected that, once the project is approved, the plant will start operating in 2019. With this initiative, the objective is to ensure that 80% of the energy consumed by MRV’s mining units and facilities is supplied by the plant, since the headquarters is not included because it is subject to negotiation in the free electricity market, where you benefit from low costs. The company intends to extend the project to other states.
Multiple Consumption Units Also in the first half of the year, the first large residential development in Brazil with multiple consumer units (Emuc) was inaugurated in Belo Horizonte (MG) of solar photovoltaic energy, the Spazio Parthenon.
The condominium now has a photovoltaic power plant to supply all 440 apartments and common areas, reducing the impact on the environment and energy costs for all residents. The estimate is that the savings reach R$520 thousand. In the next four years, all MRV’s projects will have a photovoltaic energy system – an estimated investment of R$800 million.
Electric power MRV conducted the first test in another renewable energy field. It leased a small hydroelectric power plant (CGH) for six months to use the electricity supplied in its offices, sales and construction shifts, in Minas Gerais. The result was positive and accumulated an energy credit in the order of 2.3 GWh, and even accumulated 1,1 GWh. The pilot project is a distributed generation modality, which allows the company to generate the electricity that it would consume from the CEMIG grid. With CGH, the savings reached 20%in relation to all expenditure on the input for the installations covered. In Fortaleza (CE), the company contracted renewable energy supply from the Companhia de Gás do Ceará (Cegás) for a large residential enterprises. The supplier has 15% of its production from the treatment of urban waste, the so-called green gas. The contracting was done in the lending modality, which involves the supplier, MRV and the client, in order to make it win-win for all parties. For the gas generator, MRV guarantees contracting at the best price and makes investments less than those required for electricity; the supplier is responsible for the installation of the network and the assignment of materials to the condominium, and the end customers benefit from the lowest cost in the market. According to Cegás, natural gas is up to 40% more economical than the competition.
MRV | 2018 SUSTAINABILITY REPORT
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Internal public 103-2 | 103-3: Jobs
The year 2018 also enters MRV’s history as a milestone in the beginning of one of the most important projects ever developed internally in order to improve the quality of our products and services to consolidate the MRV culture. The idea is to show that the company wants to contribute to the transformation of the country and believes that this is possible through dreams, because dreams motivate people and, when they come true, they change reality. By investing in this intrinsically, MRV is reaffirming its commitment to people, to its employees, the clients and the society that lives close to an enterprise.
This is the Purpose Project, created to revisit, analyze, expand and update the definition of the purpose that governs the company’s performance from end to end. MRV opted for the construction of a concept based on experience and in the vision of all employees who know their operations deeply. To achieve this goal, Fundação Dom Cabral was hired to re-signify the company’s purpose, based on consultation and debate among all employees. The process involved workshops with the Board of Directors, Presidents, Directors and Managers and the formation of 28 groups that covered the entire statement composed of the employees. The teams were designed in a way that balanced geography, the area and representativeness of the company throughout the country. Simultaneously, an electronic survey was conducted with more than 2,000 respondents. Therefore, it was possible to capture the views of all employees on what was most relevant to MRV. Aspects such as the realization of the dream of owning one’s own home were observed, customer satisfaction, the working environment, green blood culture, the quality of products and services, initiatives with an impact on the transformation of society, social inclusion, among others. At this stage, the objective was to detect the essential attributes of the company to elaborate the definition of the purpose.
construction of a meaning, the purpose that moves the company: “Building Dreams That Transform the World”. The definition brings together MRV’s area of operation, the dream of home ownership and the company’s desire to make a difference in the world, promoting transformations in a sustainable manner, involving communities and respecting internal and external stakeholders. After six months of development, the project was launched in November 2018 at the largest event promoted by MRV since its foundation, which gathered around 1,500 leaders in the city of Atibaia. It was the starting point of a work that now has the mission of consolidating among all the employees, of all the instances, the awareness of this purpose that, renewed, is now guiding all internal initiatives. It includes principles that have made the construction company a reference in terms of ethics, sustainability, governance and quality, among other decisive aspects for the success of its strategy and the exponential growth of recent years.
Following this, new workshops were held with executives and the large groups were brought together to consolidate what had been ascertained. Only then was Interbrand, a global brand consultancy, hired to, with the project Coordinators at MRV, transform collective perceptions into a phrase capable of communicating them with accuracy and clarity, and each word should contain the
MRV | 2018 SUSTAINABILITY REPORT
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In 2018, MRV registered an increase in the number of women working in the construction sites, a result of the Company’s search for greater diversity in its operations
Employee profile As of December 31, 2018, MRV had more than 22 thousand direct employees and 5.442 outsourced. Of the total, 82% were men, and 18% women – participation that has increased 117% in the construction sites during the last year. 102-8 | 405-1
Number of employees by gender and region 102-8
2018
2017*
Region Percentage
Women
Men
Percentage
Women
Men
South
18.34
610
3,516
14.31
379
1,691
Southeast
55.88
2,634
9,936
61.27
2,454
6,407
8.67
334
1,616
7.73
252
866
Northeast
16.25
464
3,191
16.64
423
1,984
North
0.86
36
157
0.05
0
7
100
4,078
18,416
100
3,508
10,955
Midwest
Total by gender Total
22,494
14,463
* The data on employees presented in the 2017 MRV sustainability report have been revised and represented in this document. 102-48
Number of employees by gender and employment contract 102-8
Employment contract/ Job type Permanent/Integral Temporary/Part-time Total by gender Total MRV | 2018 SUSTAINABILITY REPORT
2018
2017
Women
Men
Women
Men
3,490
17,825
3,005
10,498
588
591
503
457
4,078
18,416
3,508
10,955
22,494
14,463
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Number of employees per employment contract and region 102-8
2018
2017
Region Temporary
Permanent
Temporary
Permanent
South
180
3,946
124
1,946
Southeast
783
11,787
691
8,167
Midwest
90
1,860
52
1,066
Northeast
113
3,542
93
2,314
13
180
0
10
1,179
21,315
960
13,503
North Total per employment contract Total
22,494
14,463
The variety of benefits includes health and dental insurance plan, agreements with drug stores and laboratories, life insurance, meal/food vouchers, amongst others MRV | 2018 SUSTAINABILITY REPORT
59
In 2018, there was a significant increase in the number of women in leadership positions at MRV, specifically in management positions. The number of women in operational positions has also increased, acting directly on the works, as a reflection of the training of this public to act in the civil construction sector observed in recent years.
Number and percentage of employees by employee category and gender* 405-1
Functional category
2018 Total
Women
Percentage
Men
Percentage
Directors
58
5
8.62
53
91.38
Managers
195
45
23.08
150
76.92
Leaderships (Coordinators, Engineers, Store Managers)
1,086
359
33.06
727
66.94
Professionals (Analysts, Lawyers)
1,069
666
62.30
403
37.70
Operational (administrative)
1,539
895
58.15
644
41.85
17,368
1,520
8.75
15,848
91.25
1,179
588
49.87
591
50.13
22,494
4,078
18.13
18,416
81.87
Operational (works)
Trainees and apprentices
Total employees by gender Total number of employees
22,494
* The total number of employees presented in MRV’s sustainability report in 2017 was reviewed and restated in this document. 102-48
MRV | 2018 SUSTAINABILITY REPORT
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Number and percentage of employees per employee category and ethnicity 405-1
Total number of employees by employee category
Yellow
Percentage
White
Percentage
Indigenous
Percentage
Black
Percentage
Brown
Percentage
Not informed
Percentage
2018
Directors
58
0
0
53
91.38
0
0
0
0
5
8.62
0
0
Managers
195
0
0
149
76.41
0
0
1
0.51
44
22.56
1
0.51
Leaderships (Coordinators, Engineers, Store Managers)
1,086
16
1.47
606 55.80
0
0
6
0.55
438 40.33
20
1.84
Professionals (Analysts, Lawyers)
1,069
0
0
464
43.41
0
0
19
1.78
564
52.76
22
2.06
Operational (administrative)
1,539
7
0.45
516
33.53
0
0
48
3.12
922
59.91
46
2.99
17,368
101
0.58
4,998
28.78
11
0.06
1,639
9.44
9,973
57.42
646
3.72
1,179
6
0.51
448 38.00
0
0
38
3.22
606
51.40
81
6.87
22,494
130
0.58
11
0.05
1,751
7.78 12,552 55.80
816
3.63
Functional category
Operational (works) Trainees and apprentices Total by ethnicity Total
MRV | 2018 SUSTAINABILITY REPORT
7,234
32.16
22,494
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To ensure that the right to freedom of association and collective bargaining of outsourced workers is being respected, MRV, through the Employee Support Department (DAE). In the case of a company that is not part of the company’s business, the company asks the third party to submit the following documents before the beginning of the activities: Collective Bargaining Agreement (CCT), Employment Contract, Work and Social Security Portfolio (CTPS), Registration Form and Hours Compensation Agreement. This control is also done on a monthly basis via the presentation of the pay checks, time card, food/feed voucher receipts and employees’ food basket. 103-2 | 103-3: Freedom of association and collective bargaining | 407-1
MRV | 2018 SUSTAINABILITY REPORT
The DAE also controls the access and permanence of workers from outsourced companies on the company’s premises. To the service providers, this control is given by means of a contract they sign before the beginning of the activities, in which they undertake not to employ/permit the practice of labor analogous to slavery, and or any other form of illegal work, as well as to comply with labor and social security obligations. To ensure that only employees in good standing in relation to the Consolidation of Labor Laws (CLT) enter the construction sites, the initial control made by the AED includes the request and checking of the documents present in the flow of documentation
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of employees, and conducting interviews with all outsourced employees before the start of activities. This control is also done on a monthly basis by means of the request and of checking the documents present in the employee-specific monthly checklist. 103-2 | 103-3: Forced or compulsory labor
Also for service providers (contracted via Supplies), the initial control of outsourced employees is done by the AED team of each work via request and checking the documents present in the Worker’s Document Flow Contract via Supplies, and the control of permanence is by request and by checking the documents present in the monthly checklist of service providers in the supply area.
dependents, who may vary from city to city according to the local collective convention. The company offers medical and dental coverage, agreements with pharmacies and laboratories, collective life insurance, meal/ feeding vouchers, transportation vouchers, basic basket, birth basket, birth bonus and discounts at fitness centers. For employees who work in the administrative sector of offices and construction sites, the benefits also include annual payment of Profit Sharing, and Results (PLR) and private pension. 401-2
Mathematical ratio of basic salary and remuneration between women and men 405-2
Attraction, retention and development 103-2 | 103-3: Employment | 103-2 | 103-3: Training and education | 103-2 | 103-3: Occupational health and safety | 103-2 | 103-3: Diversity and equal opportunities
MRV’s priorities include offering employees a pleasant work environment and opportunities for personal and professional development, so that its teams work in tune, and talent, dedication and professionalism are permanently recognized. Everyone benefits from a remuneration policy based on the Hay Group methodology, which aligns positions and their respective functions with income, with a comprehensive benefits package, some of them also extend to their
2018 Functional category
Women
Men
Proportion (men/ women’s salaries)
Directors
36,617.75
33,549.13
1.09
Managers (administrative)
13,468.61
14,712.13
0.92
Managers (works)
12,374.24
16,964.38
0.73
6,217.39
5,961.17
1.04
Leaderships (works)
8,586.62
9,829.31
0.87
Professionals (Analysts, Lawyers)
3,529.17
3,598.14
0.98
Operational (administrative)
1,648.50
1,706.32
0.97
Operational (works)
1,344.56
1,655.30
0.81
656.06
617.70
1.06
Leaderships (Coordinators, Engineers, Store Managers)
Trainees and apprentices
MRV | 2018 SUSTAINABILITY REPORT
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The health plan is not offered to interns and apprentices; the food voucher is not offered to interns; the other benefits are offered for all positions, except work site operational personnel. 102-35 | 102-36 | 401-2 For more than ten years, programs have been maintained aimed at interns and trainees to attract and retain talent. In 2018, the company launched its one-year careeraccelerating Young Talents program. Twentyfour professionals were selected to start their careers in engineering for a program that includes initiatives, as job rotation, in all areas of engineering and other interface boards, development of behavioral skills and technical knowledge. The initiative counted on the participation of 525 interns and Engineering Auxiliaries, who underwent tests of logic, technical test,
general knowledge and video interviews. By the end of 2018, 69 young people had reached the final stage, competing for the 24 places in the program. In the company’s trainee programs, currently 60% of those enrolled are women. In line with the work already developed and with the Purpose program, the company created and implemented 19 projects under the umbrella of the Ser MRV program, launched in 2018 with the purpose of promoting a change in vision and attitude among its employees – without which, according to the construction company’s understanding, it is not possible to achieve the objective of contributing to the transformation of society. This work resulted in the definition of four pillars:
Move – Actions dedicated to well-being and quality of life, such as: My Doctor – Channel in partnership with the company Teg Saúde, which has Doctors, Nurses, Physiotherapists and other professionals in the area so that the employees receive guidelines and a second medical opinion about what they need. Enquiries can be made by e-mail: meudoutor@tegsaude.com.br. Active Living – Encouraging the practice of physical activities and promotion of events, such as Health Week. In 2018, a partnership was established with a platform that encourages healthy competition among MRV employees throughout Brazil. Your Mind – Employees with psychological problems fill out, under secrecy, a worldwide standard form so that the disorder can be diagnosed and obtained, free of charge, sessions with experts to deal with the case. The program was launched in 2018.
MRV | 2018 SUSTAINABILITY REPORT
Evolve – Incentive to constant learning through training and relevant content, such as: D evelop – Platform for distance training and capacity building in various areas of knowledge. L eader Development – Launched in 2018, the program encompasses 600 leaders from various areas so that they can assimilate and disseminate the company’s purpose to their teams. It is the most comprehensive program ever adopted by MRV for this public, and counts on the partnership of the consultancy Korn Ferry, one of the world’s leading specialists in this type of work. The trainings are face-to-face, with distance complement, and the first of the three modules – Self-Leadership, Team-Leadership and Organization-Leadership – was completed before the end of the year.
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Valorize – Promotion of employee appreciation and recognition. Green Blood Length of Service Valuation Program – The program was created in 2017 to recognize employees with more than 20 years of work at MRV. In 2018, it was expanded to value employees who complete years of work in the company. In 2018, 8,602 employees were honored by means of communications, receiving gifts and the protagonists of an event of recognition.
In addition, the Communication Plan maintained by the company includes details of all the communication actions to be carried out during the year to disclose the Integrity Program, including, in addition to information on vehicles/forms of communication, data on the intended audience, purpose, dates on which the communication took place and main themes that will be disseminated. Among the main themes addressed in the Communication Plan are the content of corporate policies related to the anti-corruption theme. The same occurs with the training sessions, which have as their scope, among others, the Anti-corruption Law and Policy, Conflict of Interest Policy, Integrity Chat and Minute Pilot of Ethics (in stores and construction sites). From September 2017 until August 2018, 21 face-to-face training sessions were held, in addition to the following e-learning Culture of Integrity MRV, applicable to all employees. The trainings are published on the site: www.mrv.com.br/institucional/pt/a-mrv/ programa-de-integridade 205-2
MRV | 2018 SUSTAINABILITY REPORT
U na – Stimulus to the integration and the good relationship of all. Examples range from end-of-year parties to local events, such as Coffee with the President, Board of Directors and with the other employees.
Management cycle professionalizes leadership development The first People Management Cycle, adopted in 2017, provided the initial decision making regarding the positioning of leaders in the organization. The program encompasses the self-assessment and evaluation of the immediate superior and the career committee, in which the participants are classified according to their potential and 6Box matrix performance. The goal is to identify career development opportunities, identify potential successors to leadership positions and to support management decision making. In 2018, the People Management Cycle involved 600 leaders in coordination, management and direction positions. As a result of this process, about 30% of the participants received salary progression or promotion and 5% of managers were dismissed. The output of the Cycle is also Individual Development Plans (IDPs).
65
More than these programs, MRV maintains a series of initiatives aimed at the qualification of its employees. An example is the Academy of Leaders, which in 2018 promoted the development of professionals from various levels of management, with a focus on innovation, leadership skills, organizational and financial aspects. During the year, 31,900 hours of training were given, with: 404-1
37,416 people trained (virtual and in person) 77 in-person courses and training 30.8 thousand hours of distance learning (DE) courses The management of the number of employees who take the virtual courses takes place through the Develop Platform. One of the company’s most important actions is the Note 10 School program at the construction sites, which since 2011 has received investments of over R$3 million, with more than 45,000 people benefited and a 25% reduction in labor turnover. The initiative aims to reduce illiteracy, promote computer science courses and investing in the qualification of the professionals who work on the construction sites and also in the neighbors of the works that have schools. In 2018, there were 25 schools, bringing together 80 classes and benefiting employees and neighbors.
On the innovation front, MRV promotes the Ideas Marathon, a competition among its employees for the presentation of proposals to increase efficiency, reduce costs and other solutions that contribute to the business strategy. The suggestions are submitted to several stages of evaluation and the five best ones are adopted by the company, with their respective authors benefited from awards ranging from R$10 to R$50 thousand. On the other hand, Rumo ao Topo values the efficiency of the works, rewarding those that are delivered with lower costs and deadlines. The regional managers and coordinators of the three best-performing projects receive one car each, while their respective control teams are rewarded with financial resources. All administrative employees who occupy the role of assistant and levels above also participate annually in the performance evaluation process, which is part of the Profit Sharing Program and is considered in the break down of income. 404-3
Also, the number of employee hirings was greater than the number of firings, resulting in a positive balance, or in other words, more people were incorporated, mainly males in the Southeastern region. 401-1
The Academia de LĂderes (Leader Academy) is one of the resources used to increase the qualification of professionals and was responsible for the training of 37,416 people in 2018, either presentially or online distance MRV | 2018 SUSTAINABILITY REPORT
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Number of hires and dismissals
Hiring and turnover rates
401-1
401-1
2018 Hiring
2018 Dismissals
By gender
Hiring rate (%) Turnover rate (%) By gender
Women
2,062
1,577
Men
17,792
12,007
By age group
Women
10.39
3.22
Men
89.61
5.43
By age group
Up to 30 years
7,612
4,890
Up to 30 years
38.34
4.98
Between 31 and 50 years old
10,155
7,222
Between 31 and 50 years old
51.15
5.19
From the age of 51
2,087
1,472
From the age of 51
10.51
4.50
20.97
4.68
By region South
By region 4,164
2,319
South
10,149
7,345
Southeast
51.12
4.91
Midwest
2,147
1,532
Midwest
10.81
6.58
Northeast
3,149
2,315
Northeast
15.86
5.28
245
73
1.23
3.18
19,854
13,584
Southeast
North Total
MRV | 2018 SUSTAINABILITY REPORT
North
67
Health, safety and well-being 103-2 | 103-3: Occupational health and safety
MRV is a highlight in its sector in its accomplishments to ensure safety and promote the health and well-being of its employees. With a priority focus on prevention, the company has a nationwide Health and Safety Management system, certified according to the requirements of the OHSAS 18001:2007 standard, whose scope includes 100% of the company’s own labor force and third parties. The health and safety professionals involved in the implementation of the management system (Engineers and Technicians in Occupational Safety, Doctors, Healthcare Professionals, etc.) Coordinators and of the Work and Technicians of Nursing) follow the definitions of the Regulatory Norms related to the Ministry of Labor and Employment (MTE) and to the Specialized Service in Security Engineering, and in Occupational Health (SESMT). 403-1 | CRE6
The following are carried out exams and clinical evaluations by their own doctors or by qualified and contracted institutions, and all occupational care performed have the data stored via Integrated Software of Occupational Management; only doctors have access to clinical information and to the employees’ medical records, according to the resolution of the Federal Council of Medicine (CFM 1605/2000). All costs related to the exams performed are borne by the company, and the employee receives in advance a guide with guidelines on date, time, address and recommendations for conducting the exams. 403-3
On the other hand, the face-to-face courses have a cost center for their realization. Efficacy assessment is recommended for all training and mandatory for those whose safety
MRV | 2018 SUSTAINABILITY REPORT
legislation is in force health demands. The method of assessing effectiveness may be written examination, practical assessment or other assessment by the instructor, provided that it complies with the legal requirement. Once the certificate of participation/approval has been issued, the training is considered to have been effective. On the other hand, the evaluation of the effectiveness of the Environmental Program and of all training related to awareness is governed by a specific procedure and by internal audits; and of the Health, Safety and Environment (HSE) system. The Site Engineer should analyze the results of the HSE Behavioral Assessment and guide the necessary improvement actions. Through behavioral evaluation, the Safe Practice Index (IPS) is generated, which indicates adequate performance in HSE at the construction site. adequado em SSMA no canteiro de obras.
The company maintains a certified Health and Safety Management system and promotes clinical examinations and evaluations, the results of which are accessed only by the physicians responsible for their performance In 2018, the Health, Safety and Environment Policy was revised, also addressing the issues of quality and social responsibility. As part of the Sustainability Policy, it was validated by the Compliance area and approved by the Board of Directors.
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The policy provides the framework for the establishment of Occupational Health and Safety (OSH) objectives, defined according to the strategic direction of sustainability. The OHS indicators, targets, and programs associated with these objectives were established in accordance with internal regulations, which determine the system for defining, monitoring, and review of objectives and targets related to safety, health and environmental performance, as well as relevant management programs. The ultimate responsibility for OSH lies with senior management, composed of executives with responsibility and authority over the subject for exercising some type of control over system requirements. Investments in safety training totaled R$2,198,054.67 in 2018. In addition, MRV maintains an annual planning of health, safety and security campaigns environment, which can also be part of the action schedule of the Program of Working Conditions and Environment in the Construction Industry (PCMAT), Environmental Risk Prevention Program (PPRA) and Occupational Health Medical Control Program (PCMSO). There is a MRV | 2018 SUSTAINABILITY REPORT
training matrix that defines, for each function, training needs. Its purpose is to identify the legal training required for the relevant functions. In 2018, this performance was once again recognized by the market, receiving five awards in different categories: People Management – Sinduscon-ES Control of hazards and risks on site – Seconci-SP Environmental management of the work environment – Seconci-SP Health control in the construction site – Seconci-SP Preventive Company and Outstanding Company in the Living Area – Sinduscon-MG and Seconci-MG Occupational Safety – Vitae/Seconci-Rio Projects such as Active Life and My Doctor are examples of initiatives aimed at the well-being and health of employees. Others in the same sense are the Health, Safety and Security Dialogues and the Environment (DSSMA) and the Internal Workplace Accident Prevention Weeks (Sipat), carried out regionally by the Internal Commissions for Accident Prevention (Cipa). 69
In 2018, MRV achieved the goal of reducing serious occurrences and not registering fatal accidents, but saw an increase in the total number of light accidents due to the changes it has been promoting in its construction process, replacing masonry with concrete wall. With more works inserted in the new method, which includes heavy equipment in an accelerated construction process, the number of light accidents dropped from 248 to 340, being that the functions most involved in accidents are: construction workers, concrete form assemblers, bricklayers, carpenters and painters. Causing the construction company to intensify training and qualification of employees. 403-2
Ergometric analyses were also performed to identify the causes of the problems and studies were carried out to verify the need to change the Personal Protective Equipment (PPE). These are initiatives that require an observation period to identify appropriate solutions. Because they were small accidents, the events resulted in fewer days off than in 2017.
Year
Days lost due to accidents 403-2
2018
4,313
2017*
8,940
* The values for 2017 were recalculated, and are different from the number presented in the previous year’s report. 102-48
In total, the No Accidents Production Index closed out 2018 at 99.1%, while that of 2017 was 99.3%. These numbers are calculated according to the Brazilian Standard (NBR).
MRV | 2018 SUSTAINABILITY REPORT
Among the main pathologies identified, which generated more attestations and hours of work lost, are diseases of the musculoskeletal, digestive, and respiratory, eye and appendage diseases, skin and subcutaneous tissue diseases. 403-2
According to the indicators of the Occupational Health area, the areas and processes of MRV do not have high rates of occupational disease. Medical absenteeism is associated with a common disease. 403-3
The absenteeism rate for the period was 0.69. In the works, the index was 0.81 and is higher in the South (1.06) and Southeast (0.81) regions, varying according to the number of employees working in each region.
Absenteeism by region in 2018 (%)* 403-2
Work
0.81
South
1.06
Southeast
0.81
Northeast
0.75
Midwest
0.47
North
0.11
Administrative
0.40
South
0.39
Southeast
0.42
Midwest
0.34
Northeast
0.30
North
0.16
Grand total
0.69
* I llness absenteeism rate = workdays lost in the period / number of employees x scheduled work hours in the period) x 100. Absenteeism due to illness: includes all absences due to illness or medical procedure.
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The company also recorded a significant reduction in the average number of professionals housed on construction sites: 26%, while in 2017 the drop had been 36%. The smaller contingent of people housed contributes to reducing operational risks and drives the development of the locations where MRV operates, through the generation of jobs and income. In 2018, the organization advanced in the goal of ending housing in houses, increasing the number of workers staying in hotels, hostels and central lodgings, in compliance with the legislation.
Type
2018
2017
Home/central
316
838
Hotel/ guesthouse
991
807
Grand total
1,306
1,645
For the coming years, in addition to maintaining and improving the work already developed, one of MRV’s main objectives is to obtain the SA 8000 certification, which establishes the requirements to be met by organizations, including the establishment or improvement of workers’ rights, workplace conditions and an effective management system.
MRV | 2018 SUSTAINABILITY REPORT
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Customer experience 103-2 | 103-3: Customer health and safety
MRV | 2018 SUSTAINABILITY REPORT
In line with changes in society’s behavior and market trends, MRV has been directing its customer relationship strategy to follow up on the experience it has had with its products and services. It is known that consumers today are not satisfied with buying a good, but they also expect satisfaction with what it can offer them in everyday life. In this aspect, the company took a leap to consolidate an innovative work in its sector.
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Since 2015, the Net Promoter Score (NPS) methodology has been adopted – quantitative and qualitative metrics that detect the degree of satisfaction and loyalty of customers at each stage of the link with the brand -, but the resource was restricted to the customer relationship and technical assistance divisions. In 2018, the NPS also began to involve the engineering team, making the necessary connection so that customer perceptions have an impact on the company’s decision making, leading to the improvement of the quality of its products and to meet the demands after the purchase of the property. Squads, multifunctional teams organized by projects, also use NPS research to search for solutions already adjusted to consumer expectations. To get an idea of how much the treatment intended for clients changes with this vision of relationship, an example is someone entering a perfect apartment that has one of the hollow floor quadrants. As he walks on that floor, he makes a noise. Technically, the floor is quality and safe, but for the person who hears the noise has an unpleasant feeling, suggesting problems. Experiences like this, when detected by the NPS and connected to the areas of engineering and technical assistance, for example, began to be corrected to provide greater satisfaction to customers. Throughout the year, two major actions were taken to expand and improve this work. The first was the mapping of the entire customer journey – from the moment of purchase, including monitoring of the work, call center and financing until the consultation on the level of satisfaction nine months and 18 months after the delivery of the keys. The initiative provided MRV with a complete view of the customer experience, detecting the steps that need more attention.
MRV | 2018 SUSTAINABILITY REPORT
The scope of the NPS methodology was expanded in 2018 to reflect more faithfully the customers’ degree of satisfaction and loyalty In addition, the case of A People-Centric Journey won the Innovation category of the Customer Experience Award, granted by Tracksale, a specialist in customer satisfaction management for “transforming the paradigm of customer relationship, offering more than a competitive product, thinking about each action, each project from the client’s point of view, in a daily and continuous process to provide him or her with a relevant and enchanting experience with MRV.” The other highlight action was the holding of meetings with internal teams to seek engagement, in addition to visits to customers’ homes and consultations by e-mail and text messages by telephone, all previously authorized by the residents who expressed dissatisfaction, to investigate suggestions and detect the possibility of improvements relating to the properties and services. One of the issues raised was the extension of technical assistance opening hours, until then concentrated in the commercial working hours. Due to this need, MRV started a test in a regional of Belo Horizonte (MG), extending the hours from 8am to 8pm and from 8am to 2pm on weekends, in order to verify what would be necessary in terms of the adequacy of the escalation of care teams, and the degree of customer satisfaction with the change.
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In 2018, in addition to all this work, the assessment of the NPS indicator became a profit sharing goal (PLR) of the Presidency and the Production Department, for example, establishing the monitoring of customer experience as the company’s strategic pillar. MRV also saw the opportunity to develop actions with customers who spontaneously express appreciation for the brand on their social networks, the so-called “lovers”. On the basis of the information presented about their lives, and the Client Relations area has produced personalized letters celebrating their personal achievements, to thank MRV for the public praise they give MRV and send gifts according to their personal tastes – buoys for swimming pools, aprons, speakers, etc. The impact was so great that customers started to
post MRV’s letters, reverberating a range of at least 10,000 people. In 2019, the construction company will expand the project, developing Lovers 2.0. The idea is to thank customers who praise through the NPS research and also forward the positive assessment of consumers to the employees responsible for the work, also recognizing the value of the teams. The “lifetime” relationship concept, on the other hand, is intensified with the Forever MRV project, which promotes, through the Technical Assistance (TA) area, immersions with clients to learn about their demands in different stages, such as the implementation of condominiums, the election of building managers and inspections for key delivery, for example, following the post-purchase years, while the buyer is linked to MRV. In 2018, the company launched 41 videos on the YouTube channel MRV School of Building Managers, in which, in a relaxed manner, young presenters provide guidance on topics such as prevention and firefighting, building insurance, maintenance and water reservoir, solar photovoltaic energy, among others. MRV maintains strict control of the materials, processes and procedures adopted in its construction sites, in addition to being constantly in search of innovations that benefit its customers, contributing to their well-being and environmental preservation. 103-2 | 103-3: Customer health and safety | 416-1
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Channels and attendance MRV has been working in recent years to make its call center professionals serve clients in a personalized manner, without the distance imposed by the fulfillment of a roadmap that has become the standard in Customer Service Services (SAC). The company is increasingly focused on working on both its human and digital side. For understanding that the real world has no more boundaries for the virtual world, we invest in artificial intelligence to make customers’ lives simpler and easier. But you know that only involvement can build lasting relationships. In order for the client to always have the best of both worlds, MRV wants to transform its experience with the human service of the call center into something positive, and memorable. The School of Customer Experience offers specialization to the Attendants, with in-person and online training and innovative actions to develop and to stimulate empathy.
"To be green blood is to make dreams come true and represent one of the biggest companies in this country.� Edson Batista de Melo Virtual Store Manager
In 2018, the Talk to your Customer project, aimed at the call center team, sought to combine training to solve problems with a more modern service style, in which the attendant has more autonomy to interact with the client in the way he considers most pleasant, always with the objective of solving the problems as quickly as possible. The project was awarded in the Visionaries category by ClienteSA magazine. The company also developed a work through which the Attendants were called to answer a questionnaire that simulates situations presented by customers to verify the most assertive and complete answers. The idea was to observe the percentage of engagement and define a training model for employees who presented potential for improvement at work. This stage will take place in 2019, within the framework of the project called School of Experience. In 2018, the call center received 543,356 calls, of which 95.2% were answered. Requests for information corresponded to 85.2% of calls and 76.5% of complaints received were resolved resolved in up to five work days. Three years ago, on average, two customers per month called the call center to praise MRV. In 2018 the number rose to ten. Another change prepared for 2019 is the reading and response of emails from the Contact Us service using artificial intelligence. The novelty will allow the service to no longer be limited to reading and answering sentences, but longer texts, solving the simplest demands and forwarding only the most complex cases to the service team. The virtual assistant Maria Rosa Vaz, one of the channels of communication with customers, was increased in 2017 with the use
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of artificial intelligence and in 2018, joined the social network Facebook and was made available on the Relationship Portal – part of the expansion strategy. This allowed a number of problems that chatbot forwarded to other links, such as obtaining a duplicate, for example, would be resolved directly with the responses on Facebook. Of the total number of clients who use Maria Rosa Vaz via Facebook, 82% are served by it, with no need to direct their attention to human care. In 2018, around 15% of the contacts made by customers were through the digital service of Maria Rosa Vaz. In addition to continuing and improving the work with NPS, in 2019 MRV plans to offer the care of Maria Rosa Vaz – her artificial intelligence – also through WhatsApp and to develop the Omnichannel solution, which allows to concentrate in the same information base all the interactions made with the customer, making the Attendants and all the other employees who have access to the client’s background summary, have a complete history of these contacts, eliminating stages and making it quicker to solve problems.
The Delivery of Dreams promotes the fraternization of newly inaugurated enterprises’ residents
MRV | 2018 SUSTAINABILITY REPORT
Conveniences 103-2 | 103-3: Indirect economic impacts | 203-2 I 103-2 | 103-3: Product and service labeling
The search for excellence in service is reinforced by the offer of benefits. In this respect, the company offers solutions such as MRV Mais, a program exhibited on the Relationship Portal that includes services such as MRV Decora, which provides tips for decorating the apartments; My Decorated, with examples of projects that can be inspiring; and the Hands on the Wheel, a platform that allows residents to offer their services and products to neighbors, a way to supplement the income. When inaugurating an enterprise, MRV promotes the Delivery of Dreams, a social event among residents. At the time, they receive the Owner’s Basic Manual and the Sustainable Resident booklet, with information on recycling, energy and water management, in addition to other sustainable actions. They also know the Online Manual, which is available on the Relationship Portal. Residents are also invited to participate in a satisfaction survey that provides MRV with indications of process improvements, service and relationship. 417-1
In compliance with ISO 14001:2015, MRV identified both the internal and external contexts that may affect its business, processes and services. In its Sustainability Risks and Strategic Direction form, the organization identifies and defines its context, the risks and opportunities related to its environmental performance. Through the Swot Tools and the Sustainability Risk Matrix, the community/neighborhood represents a strength from the Swot perspective and an
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opportunity for improvement according to the risk matrix, associated with the Private Social Investment Program. 103-2 | 103-3: Local communities | 413-2 | 103-2 | 103-3: Customer health and safety | 416-1
Following these guidelines, the company conducts the Good Neighborhood program, a private social investment action that involves the relationship with communities neighboring the projects. During MRV’s stay in the territory, social impact actions are implemented in favor of local development. Operationalized by a partner, the Good Neighborhood seeks engagement with the communities through dialogue and actions to improve the quality of life through the renovation of public facilities, support for local social organizations and the creation of an agenda to serve the communities. 413-1
MRV maintains a structured channel for the neighborhood, the Dialog with You, through which complaints, suggestions, doubts or compliments can be sent. The channel is available by e-mail (dialogocomvoce@mrv.com.br) and telephone (31 3615-7177). Complaints can also be made through the Confidential Channel. 103-2 | 103-3: Local communities
The program was created in partnership with Seconci-Rio, the first state to implement the initiatives, in 2016. Today he is in ten territories in the city of Rio de Janeiro (RJ) and metropolitan region and in other states of the country,
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where the company seeks to leave a legacy for the community in relation to citizenship, environment, recovery of public facilities, implementation and execution of demands. 203-2
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In order to generate significant economic positive impacts in the regions where MRV operates, in 2018, it allocated approximately R$222 million to the following fronts: 203-1 | 203-2
In R$ million Sustainable urban mobility:
R$57.8
Sanitation:
R$71.5
Urbanization:
R$36.4
Squares, parks and landscaping:
R$24.6
Education:
R$20.0 Electrical networks:
R$10.4 Health:
R$10.2 Customer satisfaction A series of initiatives is adopted to verify the degree of customer satisfaction. In addition to the application of the NPS methodology, there are surveys with residents at the time they receive the keys to the property. In 2018, this survey determined that the index of clients that would indicate MRV to other people was 91.5%. The company also began, in July 2018, the work of NPS in the call center, having obtained a note of the satisfaction survey of 8.2 in the period from January to June. MRV | 2018 SUSTAINABILITY REPORT
“To be green blood is to make a difference in the lives of clients and the communities in which MRV operates. This generates pride for all of us and brings positive results for the brand, as an increase in sales and attraction of talent.� Bianca Vargas Executive Customer Relationship Manager
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Relationship with other stakeholders
MRV strives for a healthy, honest and productive relationship with all its stakeholders: investment analysts/sectoral market, associations and community leaders, industry associations, customers, employees, contractors, suppliers, investors and shareholders, Non-Governmental Organizations (NGOs), capital providers, neighborhoods, educational institutions and consumer protection agencies. 102-40
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They are engaged by the various areas of the business. The procurement department holds meetings with suppliers in the 22 states in which MRV is present to show local and international opportunities and to present the business governance sustainability guidelines. Investor relations include meetings in Brazil and abroad, generally monthly, and the clients receive the most diverse contacts to be informed about the progress of their work and improvements that the company has been making in the neighborhood. They can also get in touch with the construction company to ask questions about the work, payments and documentation, as well as forwarding claims. The Commercial and Real Estate Credit Directorates and the Presidency have constant meetings with financing agents to present the business plans and MRV’s solutions for the enterprises. Employees receive daily
MRV | 2018 SUSTAINABILITY REPORT
information through internal communication and are involved by the Human Development department in programs for their professional and Personal advancement. NGOs and industry associations receive MRV representatives to learn about the company’s strategies and identify solutions for the sector and the country. To prepare the revision of the Materiality Matrix, the basis for the 2018 Sustainability Report, MRV disclosed on Facebook and LinkedIn, for 30 days, a stakeholder perception collection questionnaire. The engagement of the various stakeholders went far beyond what was expected: it had more than a thousand respondents, giving consistency to the review of the matrix and, consequently, to the report itself. 102-43
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Identification and selection of stakeholders 102-42 | 102-44
Stakeholder group
How it was identified and selected
Main topics raised
Investment analysts/ industry market
Leading market analysts
Company reports
Community associations/ Leaderships
Associations of which the company is a member and community associations in the cities and/or neighborhoods where the company does business
Sustainable development, mitigation of possible problems and progress of the work
Industry associations
Associations of the civil construction sector in which the company participates
Capacity building, joint project development or discussion of standards and legislation
Clients
The company has a base of more than 360 thousand customers
Technical assistance, parcels, doubts, visit to the site, advantages club, My MRV App and sustainable development
Employees
The company has administrative and construction employees, all of whom are engaged in
Training and well-being
Contractors
The company has third parties that perform some services in its works
Development, training and monthly management of each contractor. When it comes to hosting, the inspection is daily through software and management report
Suppliers
The company has more than 9 thousand suppliers throughout Brazil
Investors and shareholders
The company is publicly traded and is in the new market, with 66% of its shares in free float
NGOs
The company maintains partnerships with several NGOs to define its social and educational activities
Capital providers
Large private and public banks
Neighborhood
The company has more than 200 construction sites in 157 Brazilian cities, all of them with neighborhoods
N.A.*
* N.A.: not available.
In addition to the work developed with employees and customers, the company also adopts programs to strengthen the harmony and dissemination of its ethical values and sustainability between its suppliers and the communities with which it interacts. MRV | 2018 SUSTAINABILITY REPORT
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Suppliers 102-9 | 103-2 | 103-3: Shopping practices | 103-2 | 103-3: Environmental assessment of suppliers | 103-2 | 103-3: Diversity and equal opportunity | 103-2 | 103-3: Social evaluation in suppliers | 103-2 | 103-3: Product and service labeling
The suppliers are selected based on technical, strategic, commercial and quality criteria, with priority to companies that, more than suppliers of materials, equipment and services, act as partners in the construction of sustainable development and are in line with MRV’s values of integrity. Based on its Supplier Relationship Policy – which complements other devices, such as the Supply Policy, Supplier Qualification and Evaluation and of Presentation and Purchasing Guidelines –, the company requires, in the process of contract approval, the presentation of documents that attest to the fulfillment of labor and labor requirements as well as compliance with qualification standards specific to its activities.
Companies should also commit to adopting anti-corruption practices, during the partnership period, are subject to the possibility of being evaluated and audited, presenting requested information when requested. In the qualification process, MRV promotes training on the values that govern its business and the procedures for operating on construction sites. All suppliers are informed about the guidelines of MRV’s Code of Conduct, which contains, among other aspects related to human rights, specific clauses on the Anti-corruption Law and the prohibition of child or slave labor. The Code is described in all contracts and is available on MRV’s website. In addition, suppliers receive monthly bulletins with guidance on good practices related to sustainability. They also have an exclusive communication channel with the Supplies area (e-mail: sup.sustentavel@mrv.com.br), through which they can send suggestions, criticisms and comments that contribute to the improvement of business and integrity and sustainability practices. In December 2018, the company had 8,026 suppliers – of which 68% are considered local, i.e., from the same state of construction -, earmarking R$1.85 billion to the contracting of materials and services for its works and administrative areas. It is estimated that, in 2019, the amount will reach R$2.24 billion to support the increase in sales and desired launches. 102-9 | 103-2 | 103-3: Procurement practices | 204-1
The total number of suppliers is lower than in the previous year (8.5 thousand), reflecting not only the adoption of the concrete wall construction method, which requires fewer materials and equipment, as well as the redirection that the company has been promoting in its purchasing strategy.
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MRV intends to increasingly expand the acquisition of packages of solutions, instead of acquiring materials that require assembly by its employees or by third parties and specialized professionals. An example of the difference between one model and another can be given by the way of buying the wiring of an apartment: instead of buying the wires to insert in the hoses that will be implanted in the walls, you get a kit with all the wiring ready to be installed in the units. It is the purchase by system, which, by reducing the number of suppliers, also contributes to provide better quality negotiations, besides making MRV more like an industry. In addition, through the Turnkey Contract – the name given to this purchasing model – the contractor makes a complete module (the roof, for example), preventing different technical assistance from being activated or transferring responsibility to each other in the event of possible problems with materials or in the infrastructure. The purchase by system can be used in works such as the entrance of the enterprises, swimming pools and sports courts.
dates or orders already met, among other items, giving greater agility to the process and relieving the work of the purchasing team. Thus, the Procurement area gained more time to exercise its main function of negotiating with suppliers. The expectation is that the system will be used in 100% of the works and begin to be extended to suppliers in 2019 so they can check payments and invoices, among other information.
The forecast is that the chatbox system will be used in 100% of the works and will be extended to suppliers in 2019
Throughout 2018, MRV developed actions to optimize its purchasing processes and monitoring of deadlines, and resolve any risks arising from business with suppliers, gain agility in negotiations and get the best prices for its developments.
Another important advance was the adoption of machine learning to improve price predictability work. The technology uses historical databases and correlates them, projecting trends of increase or decrease in the cost of inputs in the market in general, which subsidizes decision-making. Price monitoring also takes into account seasonality, logistics costs, dollar behavior and all other factors that influence the prices of materials, equipment and products.
On the technological front, the use of artificial intelligence has increased access to data previously only available to the Procurement team, which provided it via e-mail or telephone contact. With the use of chatbot, it became instantaneous the consultation of Engineers and their assistants, directly from construction sites, on purchase orders, delivery
Another novelty was the implementation of software for the registration and management of direct suppliers of materials and services. Suppliers will now enter all the information regarding their companies into the system, including documents, permits and certificates, so that MRV can have greater and better control over the regularity of each
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partner. The change will allow the detection the need for updating or document renewal in a more agile manner. In addition, the contract approval processes will be carried out by a company contracted to develop the system. In this step, it is necessary to check the compliance of each item purchased, observing all its specificities and the legal situation of the supplier. The work will also have an impact on the management of suppliers considered strategic, with the adoption of a greater degree of demand and control than with other partners due to the importance for the development of business. The differentiated treatment will provide greater effectiveness in the management of all purchases. Other actions that stood out in 2018 in relation to suppliers also involve Compliance work and the use of renewable energy. The Supplies area also acts in synergy with the instances responsible for risk management in order to ensure integrity in all stages of the relationship with suppliers. When deviations of conduct are identified, joint investigations are carried out to clarify the cases and subsequently take measures considered appropriate for each type of situation. The analysis of requests for materials and services is not restricted to the team of Supplies, but also involves a system of access segregated by areas and functions, processing in different instances of approval. MRV adopts rotation among its Supplies employees in its purchasing portfolios, allowing them to accumulate experience in the
MRV | 2018 SUSTAINABILITY REPORT
negotiation and contracting of materials and services, while at the same time avoiding any familiarity with suppliers. Partners are encouraged to report to the Confidential Channel any indication of favoritism on the part of any construction company employee. MRV adopts the Integrity Due Diligence process (DDI) for its supply chain, following the criteria of the Integrity Due Diligence Policy in order to ascertain relevant information on their procedures in relation to compliance with the legislation pertinent to their areas, in addition to the relationship with public and political agencies, for example. It is a process of preventive assessment of risks of corruption, reputation and integrity in relationships with suppliers, service providers, partners, sponsors and beneficiaries of MRV, based on profile assessment, history of corruption practices and presence on restriction lists. 103-2 | 103-3: Anti-corruption | 103-2 | 103-3: Social evaluation of suppliers | 103-2 | 103-3: Freedom of association and collective bargaining
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All potential suppliers, partners, service providers, sponsors and beneficiaries submitted to the IDD must pass through Level 1 of the analysis; and, if red flags are identified, Level 2 must be applied. If no red flag is identified, the action will be considered approved and it is possible to move on to the negotiation stage. In the case of identified relevant factors in Level 2 of the analysis, the approval shall be defined by the Compliance area and, if necessary, by the Ethics Committee. 103-2 | 103-3: Freedom of association and collective bargaining | 407-1
The stages of qualification of services and materials include the requirement to meet environmental legal requirements throughout the selection process, by means of the Health, Safety and Environment (HSE) qualification tables. Inputs that have significant environmental aspects for the company pass through this filter. 103-2 | 103-3: Environmental assessment of suppliers
In 2018, 2,593 new suppliers were selected by criteria that included socio-environmental aspects. For materials requiring environmental requirements, 100% have been attended to. 103-2 | 103-3: Environmental assessment of suppliers | 308-1 | 103-2 | 103-3: Social evaluation of suppliers | 414-1
MRV adhered to the CDP Supply Chain Program, seeking to help build strategies with its suppliers, identifying risks and opportunities that contribute to managing the supply chain and mitigating climate change and the emission of Greenhouse Gases (GHG), in addition to collaborating with the improvement in water management, among other impacts on ecosystems. An important objective is to put
MRV | 2018 SUSTAINABILITY REPORT
sustainability at the center of decisions, which includes actions for a low-carbon economy. MRV seeks to be a great showcase for engaging small, medium and large companies that do not have internal practices to address these issues. For its employees, it provides external consulting services to those who are interested in participating in the process. Also in the year, MRV held at its headquarters the second annual event, Sustainability in the Supply Chain, bringing together the main suppliers to encourage the adoption of good compliance practices, health, safety, sustainability and the environment, in addition to the presentation of the company’s areas, such as Investor Relations. The construction company sends an annual questionnaire to verify how the partners manage water consumption, energy, human rights, among other information, identifying and rewarding the best practices and suppliers that stood out in the dimensions of the tripod of sustainability (economic, social and environmental). For the coming years, the goal is to significantly increase the contracting of complete solutions for the works, always in accordance with criteria of quality, efficiency and sustainability adopted by the company. Thus, MRV hopes to further strengthen the partnership with its suppliers, entering the chain and working closely with partners in order to reduce as much as possible any problems with technical assistance after the purchase, since companies are now responsible for the entire system. 103-2 | 103-3: Customer health and safety
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Also in 2019, the company intends to better study the logistics aspect of its purchases to verify the possibility of converging the transaction of several suppliers in order to reduce freight costs. One of the ideas is to contract the joint transport of different inputs between a region and other, instead of having to bear freight costs fixed by each of the suppliers installed in nearby locations. Another possibility is to have a supplier of various inputs concentrate them in a container provided by MRV for that purpose, when the cargo is complete, be transported at once by the manufacturer himself. The possibility of outsourcing purchases considered to be less representative and less risky is still under analysis, making the Supplies area concentrate on the most important inputs for the works. In order to do so, it will be necessary to evaluate whether the contractor will be able to obtain similar or even better prices than those currently obtained by the construction company. If the changes prove feasible, MRV is expected to work at costs 5% below the market average.
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MRV Institute The MRV Institute is the social arm of the company, performing in the area of education. Since its creation in 2015, it has received 1% of the construction company’s net profit annually to develop, in partnership with companies, agencies and government agencies, initiatives dedicated especially to the areas of education of children and adolescents in various regions of Brazil. In four years of work, the Institute has already invested R$15.5 million in projects, which has benefited more than 325 thousand people directly and indirectly in the communities where it operates.
Investments in 2018
R$6.028 million,
including administrative and personnel costs
R$4.32 million
in projects, programs, actions and donations* * Only those that were measurable based on the total number of people impacted.
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The contributions are destined to initiatives with associations, contributing for the agencies to fulfill their mission; and donations, which are transfers of values or equipment to institutions, projects and events aimed at social improvement. Partnerships are also established for the development of projects conceived jointly with other agencies. There is also the sponsorship of events and projects in the education, art and third sector segments, in addition to the programs developed by MRV itself. In 2018, the initiatives had a direct impact on the lives of 34,944 people and, indirectly, reached 104,832 Brazilians from various states of the country. The volume of people benefited considers all the projects carried out and supported. In order to calculate the indirect beneficiaries, the MRV Institute considers three times the direct beneficiaries, according to the calculation of the number of members of the Brazilian family of the Brazilian Institute of Geography and Statistics (IBGE). Among the most prominent programs is Educate to Transform, which associates education with the three dimensions of sustainability – social, economic and environmental aspects -, carrying out public calls for transformative projects developed by non-profit social institutions and individual candidates over the age of 18. In this program, around a thousand proposals are received each edition. Until 2017, the Institute held an annual edition, selecting four projects to be funded, receive guidance on management and be executed. In 2018, for the first time, there were two editions,
MRV | 2018 SUSTAINABILITY REPORT
guided by the themes Education to Solve Local Problems and Transforming Education with a Focus on Sustainable Development. The selection process involves MRV’s volunteer employees and a popular vote.
One of the editions was directed to four projects (each of which received R$80,000), and the other to eight, which received R$30,000, impacting 3,000 people.
“ To be green blood is to be passionate about what you do. In my case, I am a Social Worker and I found in MRV the space to accomplish everything I believe in. As soon as I got here, the company was definitely in my blood. I’m in love with what I do and I’m in love with the company.” Blenda Alves Social Responsibility Coordinator/MRV Institute
To know the winners of 2018 and previous years, just access the link: www.institutomrv.com.br/pt and click on Educate to Transform. The site also presents all the projects developed by the Institute.
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Another program is MRV Voluntários, which brings together employees willing to integrate social actions. They can spend four hours a month of their working hours participating in the projects of the Institute, and are trained for it. At the end of 2018, 2,300 MRV professionals were registered as volunteers. Throughout the year, MRV Voluntários developed a series of actions, among them: Living Library Project – The Institute carried out the Living Library action in partner institutions in Belo Horizonte (MG): BH Futuro, Querubins, Creche Leonardo Fernandes Franco, Cidade dos Meninos and Pavonians. The volunteers promoted playful workshops with the children and adolescents of the institutions in order to present the enchanting universe provided by the books, stimulating reading and the children’s desire to take more and more of the space, keeping the library alive. Four editions were held with the participation of 111 volunteers, impacting 1,082 children and adolescents.
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Moving Forward Project – The objective is to awaken the entrepreneurial spirit in young people, still in school, stimulating their personal development by providing a clear vision of the business world and assist in accessing the labor market from an ethical and responsible perspective. The action was carried out in Belo Horizonte with the participation of 34 volunteers, impacting 335 public school students with the themes: Our Planet, Our Home, Our Community, Our Nation, Introduction to the Business World, Our World, The Advantages of Staying in School and Connected to Tomorrow. Children’s Day – During Children’s Week, the volunteers brought a lot of joy and fun to the children from various social institutions in Belo Horizonte, Campinas (SP), Curitiba (PR), Londrina (PR), Porto Alegre (RS), Fortaleza (CE), Teresina (PI), Salvador (BA), Recife (PE), Aracaju (SE), Maceió (AL), Uberlândia (MG), São Paulo (SP), Ribeirão Preto (SP), São José do Rio Preto (SP), Juiz de Fora (MG), Macaé (RJ), Serra (ES) and Manaus (AM). The initiative had 200 employees and benefited 1,657 children.
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Another program conducted by the MRV Institute, Your Child, Our Future, which until 2017 offered school material kits to employees with children aged 6 to 14, was expanded, including children aged 0 to 5. For the new public, the Institute distributes children’s books in order to stimulate moments of partnership between parents and children during the reading of the stories. In the year, 3,815 children and adolescents benefited from the school kits, while the books reached about 3,430 children.
A study carried out by the company has revealed that, currently, each R$1 invested in the Institute is reverted in R$1.5 real for MRV due to the visibility obtained by the brand and the consequent attraction of more customers.
All school material kits are composed of a backpack, case, ruler, black pencil, pointer and rubber. For the 6 to 10 year old age group, six brochure booklets are delivered, scissors, glue, pens and colored pencils; while teenagers from 11 to 14 receive six spiral notebooks and blue, black and red pens. Now, the leiturinha kit contains book and gifts according to the age of each child. The intention of the MRV Institute is to continually expand the Educate to Change program in order to increase the volume of projects contemplated or the amount to be transferred. In the case of Your Child, Our Future, the goal is to develop a professional and mentoring project aimed at the children of employees who are between 15 and 18 years old. MRV VoluntĂĄrios will expand its experience to new cities through a project to be launched named Voluntary Leadership. The Institute works with its own goals and develops indicators that reveal the impact of its actions not only qualitatively, but also quantitatively.
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Recognition
In 2018, MRV received no less than 40 awards related to innovation, sustainability, customer relations and management. Check out some highlights: Global Entrepreneur EY – The founder of MRV Engenharia received EY’s Global Entrepreneur of the Year award in Monaco during the World Entrepreneur of the Year 2018. The first South American to earn the honor, he was chosen among candidates from 46 countries for his trajectory and the transforming power of his business
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Environmental Merit – Fiesp – MRV’s Carbon Management Plan led the company to receive an honorable mention at the 24th edition of the Environmental Merit Award from the Federation of Industries of the State of São Paulo (Fiesp) which honors companies that have stood out and brought significant results in the implementation of environmental and social projects in the State of São Paulo.
stakeholders, differentiation of competition, market gain, innovation pipeline and scalability.
Best and Biggest – Exame – MRV was elected, for the second consecutive year, the best company in the civil construction sector in Brazil in the Best and Biggest ranking of Exame magazine, one of the most prestigious business awards in the country.
Execution of works – MasterInstal Award – With the case Industrialization of electrical kits for building systems, MRV conquered the first place in the Technology category applied in the execution of the installations of the MaterInstal Award, promoted by the Electrical, Gas, Hydraulic and Sanitary Installations Industry Syndicate of the State of São Paulo (Sindinstalação) and the Brazilian Association for Conformity and Facility Efficiency (Abrinstal).
RI – Institutional Investor – A reference in the area of Investor Relations, the Institutional Investor magazine presented MRV at the top of five categories of its annual ranking of the best companies, as follows Latin American IR professionals. The company was champion in the overall ranking in the following categories: Best IR Team, Best IR Program, Best Meeting with Analysts and Best Sustainability Practices, in addition to Best IR Professional, in the Investors segment. It is the second consecutive year that the company is among the best.
Artificial Intelligence – ClienteSA – Pioneer in its sector in the development of artificial intelligence with the My MRV application, the company was the winner of the Best Technological Contribution Project category and the best in the world Case of the Year at the ClienteSA awards.
Abrinq Seal – The construction company received from Abrinq Foundation the Child Friend Company certification in recognition of the actions developed by MRV Institute, which aim to promote the social transformation of the country through education.
Value Innovation Brazil – MRV was elected the most innovative construction company in Brazil in an award given by the newspaper Valor Econômico, promoted in partnership with the consulting firm Strategy& and with the support of the National Association for Research and Development of Innovative Companies (Anpei). Whow! Innovation Award – In its first edition, the Whow! Innovation Award ranked MRV first among Brazil’s most innovative companies in the construction industry. Six criteria were taken into account in the study, conducted with 1.9 thousand companies: relevance of innovation, impact of innovation for MRV | 2018 SUSTAINABILITY REPORT
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Check out all the awards received by MRV:
Award
Category
Director
1
Honorable mention in the 24th edition of the Environmental Merit Award
Medium and Large Enterprises – for their contribution to the environment
Fiesp
2
World Entrepreneur of the Year Award
Entrepreneurship
Ernst & Young (EY)
Construction
Standard Intelligence Center (CIP) in partnership with DOM Strategy Partners
3
Whow! Innovation Award
4
Value Innovation Brazil
Innovation
Valor Econômico newspaper in partnership with Strategy& consulting and with the support of Anpei
5
Best and Biggest Ranking 2018
Construction
Exame Magazine
6
Sinduscon-ES 2018 Award
Large Companies
Sinduscon
7
Companies that Communicate Best with Journalists Award
Construction
Centro de Estudos da Comunicação and Negócios da Comunicação Magazine
8
12th MasterInstal Award
Technology applied in the execution of the installations
Sindinstalação and Abrinstal
9
Ranking Best Companies and Investor Relations Professionals (IR) in Latin America
· Best CEO · Best IR professional · Best IR team · Best IR program
Institutional Investor Magazine
10
5th Seconci-SP Occupational Health and Safety Award
· Control of hazards and risks at the construction site · Environmental management of the work environment · Health control on the job site
Seconci-SP
11
Personality of the Year
Leadership
Época Magazine
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92
Award
Category
Director
Época 360° Award
· Best Company in the Civil Construction Sector · Company with Better Corporate Governance
Época Magazine
13
Customer Award SA 2018
· Best Technology Contribution Project · Case of the Year · Visionary Project
ClienteSA Magazine
14
24th Association of Real Estate Market Companies of Bahia Award
Economic Housing
Ademi-BA
15
Good Example Award
Mining Economics and Development
Globo Minas Network
16
14th Edition of the Quality and Business Excellence Program (PQEX)
Honor for merit
CMI/Secovi-MG
17
2018 Customer Experience Award
Innovation
TrackSale
18
8th Brazilian Leaders Award
Leadership
LIDE – Group of Business Leaders
12
19
Latam Award
Customer Relationship
Latin American Alliance of Organizations for Customer Interaction (Aloic)
20
The 100+ Innovative in IT Use
Engineering and Construction Industry
IT Media and PricewaterhouseCoopers (PwC)
21
XX Minas Award – Business Performance
Construction
Mercado Comum Magazine
22
Top Of Mind Award Uberlândia S.A.
Builder
WE Projects
23
19th Sinduscon-MG and Seconci-MG Workplace Safety Award
· Preventive Company · Outstanding Company in the Living Area
Sinduscon-MG and Seconci-MG
24
Ecology and Environmentalism Award
MRV | 2018 SUSTAINABILITY REPORT
Municipal Council of Campo Grande (MS)
93
Award
Category
Director
25
Ranking Value 1000
Real Estate Developments
Valor Econômico Newspaper
26
MESC Award – 100 Best Companies in Customer Satisfaction
27
Digital Maturity Index
Infrastructure and Transport
McKinsey & Company in partnership with the newspaper Valor Econômico
28
33rd edition of the O Equilibrista Award
Excellence in Corporate Finance
Brazilian Institute of Finance Executives of Minas Gerais (IBEF-MG)
29
Top Of Mind Common Market Award
Leadership
Mercado Comum Magazine
30
Vitae-Rio Award
Occupational Safety
Seconci-Rio and Sinduscon-Rio
31
Top Of Mind Ribeirão Preto Award
Leadership
Tribuna de Ribeiro Newspaper
32
25th State Real Estate TOP Award
· Incorporators · Builders · More Brands
O Estado de S. Paulo Newspaper
33
Value Large Groups
34
Brazil's Most Sdmired Legal Executive Officer – Maria Fernanda Menin – Legal Executive Officer
Legal
2018 Legal and Financial Executive Yearbook
35
Most Admired Brands by Cariocas
Real Estate Sector Leadership
O Globo Newspaper
36
Icon Brands Award 2018 – ES
Real Estate Sector Leadership
Vitória and Ibope Network
37
Environmentally Friendly Seal – Fortaleza
Environment
City Hall of Fortaleza
38
23rd PINI Best of Construction Award
Sectoral Initiative
PINI Publishing House
39
24th Fiesp Environmental Award
Carbon Management Plan
Fiesp
40
Top Of Mind Award
Leadership
Gazeta de Piracicaba
MRV | 2018 SUSTAINABILITY REPORT
MESC Institute
Valor Econômico Newspaper
94
About this report
MRV | 2018 SUSTAINABILITY REPORT
MRV’s sustainability report enters its eighth consecutive year, presenting to all stakeholders an overview of the challenges, achievements and the results obtained in the governance, social and environmental dimensions.
95
Prepared in accordance with the guidelines of the Global Reporting Initiative (GRI) in its most recent model, Standards, in the Essential option, the document covers the company’s operations in Brazil from January 1 to December 31, 2018 and, when indicated, consolidated data from Prime, MRL Engenharia and Urbamais are also reported. Log Commercial Properties, a company of MRV Group, discloses the information referring to 2018 in its own document and, as of 2019, will no longer be part of the group. Any restatements of information, scope and limits in relation to the report published in 2017 are shown throughout the document, which was not submitted for external verification. The elaboration was based on a process of revision of the Materiality Matrix, which found eight relevant themes, structured in three pillars – planning, construction and after-sales -, being
MRV | 2018 SUSTAINABILITY REPORT
them: Conception of scenarios and assertiveness in demand forecasting; Search for technology and business diversification; Attraction, retention and development of human capital; Ethics, transparency and integrity in business; Sustainable construction methods; Health, safety and well-being of employees; Client’s experience; and Environmental solutions of the enterprises. 102-45 | 102-48 | 102-49 | 102-50 | 102-51 | 102-52 | 102-54 | 102-56
MRV offers the following channels for comments and questions related to the report: 102-53
Site: www.mrv.com.br E-mail: comunicacao@mrv.com.br Telephone: (31) 3615-7100
96
Materiality Matrix 102-46 | 103-1
The initial list of themes used in the materiality review process was based on three pillars:
These three pillars underpinned the allocation of each theme considered important for the sector and subsequently for the analysis of MRV Executive Managers. 102-47
Planning Work Sale/after-sales
List of themes used for the prioritization process of material and non-material themes:
Planning
Work
Sales and after-sales
Topic 1: Scenario conception and assertiveness in demand forecasting
Theme 6: Sustainable construction methods
Topic 10: Customer experience
Theme 2: Search for technology and business diversification
Theme 7: Management and development of the supply chain
Subject 11: Influence on consumption behavior and contribution to popularization of the concept of sharing and sustainability
Theme 3: Attraction, retention and development of human capital
Subject 8: Employee health, safety and well-being
Subject 12: Enterprise environmental solutions
Theme 4: Relationship with public agencies, sector agencies and influence on public policies
Theme 9: Impacts and relationship with the neighborhood during the works
Subject 13: Contributions to local development and social regeneration
Subject 5: Ethics, transparency and integrity in business
Subject 14: Low-income housing and contribution to social inclusion
Legend: Material themes
MRV | 2018 SUSTAINABILITY REPORT
Non-material themes
97
Correlation with the Global Compact and the Sustainable Development Goals (SDGs) Pillars
Priority themes
Planning
Theme 1: Scenarios design and assertiveness in demand forecasting Theme 2: Search for technology and business diversification Theme 3: Attraction, retention and development of human capital
Works
Theme 5: Ethics, transparency and integrity in business
SDGs and goals
11.1, 11.a
17.17
8.2, 8.3
9.1, 9.4
8.3
5.5, 5.b
8.7, 8.8
16.5
6.3, 6.4
8.2, 8.4
9.1, 9.4
11.1, 11.2, 11.a, 11.3, 11.6, 11.b, 11.c
Global Compact
Theme 6: Sustainable construction methods
12.2, 12.5, 12.c
Sales and after-sales
Theme 8: Health, safety and well-being of employees
11.1, 11.a
17.17
11.1, 11.a
17.17
Theme 10: Customer experience
Theme 12: Undertaking environmental solutions
17.17
Global Covenants (Captions): To make sure that they shall not participate in violations of such rights.
The effective abolition of child labor.
To develop initiatives to promote greater environmental responsibility.
Businesses should support freedom of association and the effective recognition of the right to collective bargaining.
To eliminate discrimination in employment.
To encourage the development and diffusion of environmentally friendly technologies.
The elimination of all forms of forced or compulsory labor.
Businesses should support a preventive approach to environmental challenges.
Companies should fight corruption in all its forms, including extortion and bribery.
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98
2018 material themes and correlation with GRI Standards 102-47 | 103-1
Material topics
GRI topics
GRI Standards
Impact Internal External
102-7: Scale of the organization Scenarios design and assertiveness in demand forecasting
GRI 102: General disclosures
102-9: Supply chain 102-15: Key impacts, risks, and opportunities
GRI 201: Economic performance
X
X
X
X
201-1: Direct economic value generated and distributed 102-9: Supply chain 102-16: Values, principles, standards, and norms of behavior 102-17: Mechanisms for advice and concerns about ethics
GRI 102: General disclosures
102-18: Governance structure 102-22: Composition of the highest governance body and its committees 102-23: Chair of the highest governance body
Ethics, transparency and integrity in business
102-33: Communicating critical concerns 102-34: Nature and total number of critical concerns GRI 201: Economic performance
201-4: Financial assistance received from government 205-1: Operations assessed for risks related to corruption
GRI 205: Anti-corruption
205-2: Communication and training about anticorruption policies and procedures 205-3: Confirmed incidents of corruption and actions taken
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99
Material topics
Ethics, transparency and integrity in business
Search for technology and business diversification
GRI topics
GRI Standards
GRI 307: Environmental compliance
307-1: Non-compliance with environmental laws and regulations
GRI 405: Diversity and equal opportunity
405-1: Diversity of governance bodies and employees
GRI 406: NonDiscrimination
406-1: Incidents of discrimination and corrective actions taken
GRI 407: Freedom of association and collective bargaining
407-1: Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk
GRI 409: Forced or compulsory labor
409-1: Operations and suppliers at significant risk for incidents of forced or compulsory labor
GRI 414: Supplier social assessment
414-1: New suppliers that were screened using social criteria
GRI 415: Public policy
415-1: Political contributions
GRI 418: Customer privacy
418-1: Substantiated complaints concerning breaches of customer privacy and losses of customer data
GRI 419: Socioeconomic compliance
419-1: Non-compliance with laws and regulations in the social and economic area
Impact Internal External
X
X
X
X
X
X
102-2: Activities, brands, products, and services GRI 102: General disclosures
102-15: Key impacts, risks, and opportunities 102-13: Membership of associations 102-15: Principais impactos, riscos e oportunidades
Customer’s experience
GRI 102: General disclosures
102-34: Key impacts, risks, and opportunities 102-43: Approach to stakeholder engagement 102-44: Key topics and concerns raised
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100
Material topics
GRI topics
GRI 416: Customer health and safety Customer’s experience
GRI 417: Marketing and labeling GRI 418: Customer privacy GRI 301: Materials
GRI 302: Energy
GRI Standards
Impact Internal External
416-1: Assessment of the health and safety impacts of product and service categories 416-2: Incidents of non-compliance concerning the health and safety impacts of products and services 417-1: Requirements for product and service information and labeling
X
X
X
X
417-3: Incidents of non-compliance concerning marketing communications 418-1: Substantiated complaints concerning breaches of customer privacy and losses of customer data 301-1: Materials used by weight or volume 301-2: Recycled input materials used 302-1: Energy consumption within the organization 302-3: Energy intensity 303-1: Water withdrawal by source
GRI 303: Water
303-2: Water sources significantly affected by withdrawal of water 303-3: Water recycled and reused
Sustainable construction methods
305-1: Direct (Scope 1) GHG emissions 305-2: Energy indirect (Scope 2) GHG emissions GRI 305: Emissions
305-3: Other indirect (Scope 3) GHG emissions 305-4: GHG emissions intensity 305-5: Reduction of GHG emissions 306-1: Water discharge by quality and destination
GRI 306: Effluents and waste
306-2: Waste by type and disposal method 306-3: Significant spills 306-4: Transport of hazardous waste
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Material topics
Sustainable construction methods
GRI topics
GRI Standards
GRI 307: Environmental compliance
307-1: Non-compliance with environmental laws and regulations
GRI 308: Supplier environmental assessment
308-1: New suppliers that were screened using environmental criteria
Internal External
X
X
X
X
CRE2: Intensity of water usage in construction GRI Construction sector supplement
Undertaking environmental solutions
Impact
CRE8: Type and number of sustainability certificates, classification systems and labelling for new constructions, management, occupation and redevelopment
GRI 102: General disclosures
102-11: Precautionary principle or approach
GRI 303: Water
303-3: Water recycled and reused 305-1: Direct (Scope 1) GHG emissions
GRI 305: Emissions
305-2: Energy indirect (Scope 2) GHG emissions 305-3: Other indirect (Scope 3) GHG emissions 102-8: Information on employees and other workers 102-16: Values, principles, standards, and norms of behavior
GRI 102: General disclosures Attraction, retention and development of human capital
102-34: Nature and total number of critical concerns 102-41: Collective bargaining agreements 102-43: Approach to stakeholder engagement 102-44: Key topics and concerns raised
GRI 401: Employment GRI 405: Diversity and equal opportunity
MRV | 2018 SUSTAINABILITY REPORT
X
401-1: New employee hires and employee turnover 401-2: Benefits provided to full-time employees that are not provided to temporary or part-time employees 405-1: Diversity of governance bodies and employees 405-2: Ratio of basic salary and remuneration of women to men
102
Material topics
Attraction, retention and development of human capital
GRI topics
GRI Standards
GRI 406: NonDiscrimination
406-1: Incidents of discrimination and corrective actions taken
GRI 404: Training and education GRI 401: Employment
404-1: Average hours of training per year per employee
Impact Internal External
X
404-3: Percentage of employees receiving regular performance and career development reviews 401-2: Benefits provided to full-time employees that are not provided to temporary or part-time employees 403-1: Workers representation in formal joint management–worker health and safety committees
Health, safety well-being of employees
GRI 403: Occupational health and safety
403-2: Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities 403-3: Workers with high incidence or high risk of diseases related to their occupation
X
403-4: Health and safety topics covered in formal agreements with trade unions GRI Construction sector supplement
MRV | 2018 SUSTAINABILITY REPORT
CRE6: Percentage of the organization operating in verified compliance with an internationally recognized health and safety management system
103
GRI content index 102-55
Standards option Core/Comprehensive GRI 101: Foundation 2016 GRI 102: General disclosures 2016
Standard
Page
Omission
UNGC
SDG
3, 4, 5, 6
8
Organizational profile 102-1: Name of the organization
7
102-2: Activities, brands, products, and services
7
102-3: Location of headquarters
7
102-4: Location of operations
7
102-5: Ownership and legal form
7 and 32
102-6: Markets served
7 and 10
102-7: Scale of the organization
7, 9 and 11
102-8: Information on employees and other workers
7, 9, 10, 58 and 59
102-9: Supply chain
82
102-10: Significant changes to the organization and its supply chain
7
102-11: Precautionary principle or approach
15 and 17
102-12: External initiatives
7 and 31
102-13: Membership of associations
31 and 32
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104
GRI 102: General disclosures 2016
Standard
Page
102-14: Statement from senior decision-maker
3
102-15: Key impacts, risks, and opportunities
3, 6, 17, 19 and 37
Omission
UNGC
SDG
Strategy
Ethics and integrity 102-16: Values, principles, standards, and norms of behavior
8
10
16
102-17: Mechanisms for advice and concerns about ethics
28
10
16
Governance structure 102-18: Governance structure
32
102-22: Composition of the highest governance body and its committees
33
102-23: Chair of the highest governance body
33
102-33: Communicating critical concerns
34
102-34: Nature and total number of critical concerns
34
5, 16
Stakeholder engagement 102-40: List of stakeholder groups
79
102-41: Collective bargaining agreements
100% of employees are covered by a collective instrument.
102-42: Identifying and selecting stakeholders
81
102-43: Approach to stakeholder engagement
31, 32 and 80
102-44: Key topics and concerns raised
31 and 81
MRV | 2018 SUSTAINABILITY REPORT
3
8
105
GRI 102: General disclosures 2016
Standard
Page
Omission
UNGC
SDG
Omission
UNGC
SDG
10
11, 17
Reporting practice
Material topics
102-45: Entities included in the consolidated financial statements
96
102-46: Defining report content and topic boundaries
97
102-47: List of material topics
97 and 99
102-48: Restatements of information
58, 60, 70 and 96
102-49: Changes in reporting
96
102-50: Reporting period
96
102-51: Date of most recent report
96
102-52: Reporting cycle
96
102-53: Contact point for questions regarding the report
96
102-54: Claims of reporting in accordance with the GRI Standards
96
102-55: GRI content index
104
102-56: External assurance
96
Standard
Page
GRI 201: Economic performance 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
17, 22, 24 and 26
103-3: Evaluation of the management approach
17, 22, 24 and 26
201-1: Direct economic value generated and distributed
22
201-4: Financial assistance received from government
During the year, MRV received no financial assistance from the government.
MRV | 2018 SUSTAINABILITY REPORT
10, 11, 17
106
Material topics
Standard
Page
Omission
UNGC
SDG
6
8, 10
GRI 202: Market presence 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
15
103-3: Evaluation of the management approach
15
202-2: Proportion of senior management hired from the local community
32
GRI 203: Indirect economic impacts 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
22 and 76
103-3: Evaluation of the management approach
22 and 76
203-1: Infrastructure investments and services supported
78
203-2: Significant indirect economic impacts
76 to 78
11, 17
11, 17
GRI 204: Procurement practices 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
24 and 82
103-3: Evaluation of the management approach
24 and 82
204-1: Proportion of spending on local suppliers
82
MRV | 2018 SUSTAINABILITY REPORT
7, 8
11, 12
8
107
Material topics
Standard
Page
Omission
UNGC
SDG
GRI 205: Anti-corruption
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
24, 26, 27, 28 and 84
103-3: Evaluation of the management approach
24, 26, 27, 28 and 84
205-1: Operations assessed for risks related to corruption
29
205-2: Communication and training about anti-corruption policies and procedures
65
205-3: Confirmed incidents of corruption and actions taken
29
16
10
8, 16
GRI 301: Materials 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
38, 40 and 48
103-3: Evaluation of the management approach
38, 40 and 48
301-1: Materials used by weight or volume
40 to 42 and 45
301-2: Recycled input materials used
41
MRV | 2018 SUSTAINABILITY REPORT
7, 8, 9
6, 9, 11, 12
108
Material topics
Standard
Page
Omission
UNGC
SDG
GRI 302: Energy 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
45 to 48
103-3: Evaluation of the management approach
45 to 48
302-1: Energy consumption within the organization
46
302-3: Energy intensity
46
302-4: Reduction of energy consumption
There was no reduction in energy consumption due to improvements in conservation and efficiency in MRV’s processes between 2017 and 2018.
302-5: Reductions in energy requirements of products and services
46
6, 9, 11, 12
7, 8, 9
6, 7, 9, 11, 12
GRI 303: Water 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
44, 45 and 48
103-3: Evaluation of the management approach
44, 45 and 48
303-1: Water withdrawal by source
44 and 45
303-2: Water sources significantly affected by withdrawal of water
MRV does not capture water directly from water bodies.
303-3: Water recycled and reused
44
MRV | 2018 SUSTAINABILITY REPORT
7, 8, 9
6, 11, 12
109
Material topics
Standard
Page
Omission
UNGC
SDG
7, 8, 9
11, 12
7, 8, 9
6,11,12
GRI 305: Emissions 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
46 to 48
103-3: Evaluation of the management approach
46 to 48
305-1: Direct (Scope 1) GHG emissions
47
305-2: Energy indirect (Scope 2) GHG emissions
48
305-3: Other indirect (Scope 3) GHG emissions
48
305-4: GHG emissions intensity
48
305-5: Reduction of GHG emissions
47
GRI 306: Effluents and waste 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
40 to 44
103-3: Evaluation of the management approach
40 to 44
306-2: Waste by type and disposal method
42 and 43
306-3: Significant spills
During the year, there were no significant spills related to MRV’s operations.
MRV | 2018 SUSTAINABILITY REPORT
110
Material topics
Standard
Page
Omission
UNGC
SDG
7, 8, 9
11, 12
7, 8
11, 12
3, 4, 5, 6
5, 8
2, 3, 4, 5, 6
3, 5, 8
GRI 307: Environmental compliance 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
19, 48 to 49
103-3: Evaluation of the management approach
19, 48 to 49
307-1: Non-compliance with environmental laws and regulations
49
GRI 308: Supplier environmental assessment 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
27, 82 to 85
103-3: Evaluation of the management approach
27, 82 to 85
308-1: New suppliers that were screened using environmental criteria
85
GRI 401: Employment 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
56 to 71
103-3: Evaluation of the management approach
56 to 71
401-1: New employee hires and employee turnover
66 and 67
401-2: Benefits provided to full-time employees that are not provided to temporary or part-time employees
63 and 64
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111
Material topics
Standard
Page
Omission
UNGC
SDG
2, 3, 4, 5, 6
3, 8
GRI 403: Occupational health and safety 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
27, 48, 49, 63, 64, 68 to 71
103-3: Evaluation of the management approach
27, 48, 49, 63, 64, 68 to 71
403-1: Workers representation in formal joint management–worker health and safety committees
68
403-2: Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
70
403-3: Workers with high incidence or high risk of diseases related to their occupation
70
403-4: Health and safety topics covered in formal agreements with trade unions
It is included in the collective agreement signed between the unions and the company. Of the 99 conventions, only three states do not have specific clauses: GoiĂĄs, Mato Grosso do Sul and Santa Catarina. In general, the clauses address the control of Personal Protective Equipment (PPE) and training.
GRI 404: Training and education 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
63 to 66
103-3: Evaluation of the management approach
63 to 66
404-1: Average hours of training per year per employee
66
404-3: Percentage of employees receiving regular performance and career development reviews
66
MRV | 2018 SUSTAINABILITY REPORT
5, 8
112
Material topics
Standard
Page
Omission
UNGC
SDG
GRI 405: Diversity and equal opportunity 2016 103-1: Explanation of the material topic and its boundary 103-2: The management approach and its components
GRI 103: Management approach 103-3: Evaluation of the management approach
99 to 103 MRV does not maintain diversity policy, but carries out several actions on the subject, which is responsible for the Human Development area. In relation to the quotas established by the Ministry of Labor and Employment (MTE), the company is committed to meet 25% of the requirement by March 2019, 25% by September 2019 and 50% by September 2020.
405-1: Diversity of governance bodies and employees
33, 58, 60 and 61
405-2: Ratio of basic salary and remuneration of women to men
63
5, 8 6
5, 8, 16
GRI 406: Non-Discrimination 2016 103-1: Explanation of the material topic and its boundary 103-2: The management approach and its components GRI 103: Management approach 103-3: Evaluation of the management approach
406-1: Incidents of discrimination and corrective actions taken
MRV | 2018 SUSTAINABILITY REPORT
99 to 103 There is no external audit or feedback from stakeholders on the topic, nor on related goals. However, awareness actions are developed, such as texts on the intranet and in the works. The complaint mechanism is the confidential channel.
1, 2, 6
5, 8
During the year, MRV recorded no cases of discrimination in its operations.
113
Material topics
Standard
Page
Omission
UNGC
SDG
GRI 407: Freedom of association and collective bargaining 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
62, 84 and 85
103-3: Evaluation of the management approach
62, 84 and 85
407-1: Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk
62, 84 and 85
1, 3 8
1, 2, 3
GRI 409: Forced or compulsory labor 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
62 and 63
103-3: Evaluation of the management approach
62 and 63
409-1: Operations and suppliers at significant risk for incidents of forced or compulsory labor
The selection of suppliers follows strict legal criteria, such as prohibition of discriminatory practices, slave or child labor. Another determination foresees that own employees and outsourced workers have the same working conditions, including food, accommodation and careful health and safety management. In case of noncompliance with the law, the contracts provide for penalties that include the termination of the bond. In 2018, no human rights violations or negative occurrences in relation to labor practices were recorded.
MRV | 2018 SUSTAINABILITY REPORT
4, 5
8
114
Material topics
Standard
Page
Omission
UNGC
SDG
1, 2
11
1, 2
11
1, 2
8
GRI 413: Local communities 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
76 and 77
103-3: Evaluation of the management approach
76 and 77
413-1: Operations with local community engagement, impact assessments, and development programs
77
413-2: Operations with significant actual and potential negative impacts on local communities
76 and 77
GRI 414: Supplier social assessment 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
82 to 86
103-3: Evaluation of the management approach
82 to 86
414-1: New suppliers that were screened using social criteria
85
MRV | 2018 SUSTAINABILITY REPORT
115
Material topics
Standard
Page
Omission
UNGC
SDG
10
16
GRI 415: Public policy 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
27 to 30 and 32
103-3: Evaluation of the management approach
27 to 30 and 32
415-1: Political contributions
Under the terms of the Donation and Sponsorship Policy, the MRV Group does not make donations to political parties, candidates for elective office, campaign committees or coalitions with individuals or companies the Code of Conduct and the electoral legislation in force. The company respects the participation of employees in political activities as long as they are always personal, outside working hours and in compliance with the guidelines of the Code of Conduct.
GRI 416: Customer health and safety 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
52, 72 to 77 and 85
103-3: Evaluation of the management approach
52, 72 to 77 and 85
416-1: Assessment of the health and safety impacts of product and service categories
74, 76 and 77
416-2: Incidents of non-compliance concerning the health and safety impacts of products and services
In 2018, MRV did not record any case of noncompliance with regard to health, safety and the impacts of products and services on customers.
MRV | 2018 SUSTAINABILITY REPORT
16
116
Material topics
Standard
Page
Omission
UNGC
SDG
10
16
GRI 417: Marketing and labeling 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
16, 76 and 82
103-3: Evaluation of the management approach
16, 76 and 82
417-2: Incidents of non-compliance concerning product and service information and labeling
Until December 2018, MRV and its subsidiaries were part of civil lawsuits related to non-compliance cases related to information and labeling of products and services. Most of these actions were related to construction delays and contract termination.
417-3: Incidents of noncompliance concerning marketing communications
During the year, MRV recorded no cases of non-compliance related to marketing communications.
GRI 418: Customer privacy 2016 103-1: Explanation of the material topic and its boundary 103-2: The management approach and its components
GRI 103: Management approach 103-3: Evaluation of the management approach
418-1: Substantiated complaints concerning breaches of customer privacy and losses of customer data
MRV | 2018 SUSTAINABILITY REPORT
99 to 103 MRV does not have a widely disclosed policy on customer data privacy, but it does have two specific policies, respectively exposed in its institutional site in the Customer Relationship Portal. They present how customer data is collected and manipulated and how it is handled do not establish processes in which the customer may request the interruption of such use for any purpose.
16
During the year, there were no proven complaints regarding breaches of privacy and loss of customer data.
117
Material topics
Standard
Page
Omission
UNGC
SDG
GRI 419: Socioeconomic compliance 2016
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
15, 16 and 19
103-3: Evaluation of the management approach
15, 16 and 19
419-1: Non-compliance with laws and regulations in the social and economic area
16
16
Sector disclosure Sector suplement – Construction Water
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
44, 45 and 48
103-3: Evaluation of the management approach
44, 45 and 48
CRE2: Building water intensity
44
7, 8, 9
6, 9, 11, 12
2, 3, 4, 5, 6
3, 8
Occupational health and safety
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
68
103-3: Evaluation of the management approach
68
CRE6: Percentage of the organization operating in verified compliance with an internationally recognized health and safety management system
68
MRV | 2018 SUSTAINABILITY REPORT
118
Material topics
Standard
Page
Omission
UNGC
SDG
Marketing and labeling
GRI 103: Management approach
103-1: Explanation of the material topic and its boundary
99 to 103
103-2: The management approach and its components
48
103-3: Evaluation of the management approach
48
CRE8: Type and number of sustainability certification, rating and labeling schemes for new construction management, occupation and redevelopment
48
MRV | 2018 SUSTAINABILITY REPORT
11, 12
119
Preparation Coordination: Simone Maia Caetano – MRV Communication Department Support: Thais Morais – Sustainability Department GRI consulting, materiality review, graphic design, layout, content and text review: TheMediaGroup Pictures: Acervo MRV/Shutterstock
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120