SUSTAINABILITY REPORT
2015 (BASE YEAR 2014)
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sumรกrio Presentation 3 Who we are 4 Message from the Executive Board
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Materiality 12 Corporate Governance 14 Responsible Building 22 Social and Environmental Commitment 28 Costumers 42 People 50 Trust and Partnership
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Financial Perfomance 64 Glossary 65 Awards and Acknowledgments
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Summary of the GRI Content
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Expedient 74 2
Presentation MRV Engenharia believes in having and supports sustainable actions in its entire production chain. In order to promote the transparency of our actions among our stakeholders, we are disclosing our fourth Sustainability Report. This Report gathers the results and describes the main initiatives in the economic social, and environmental fields in 2014. As in the previous issues, our report follows the guidelines from Global Reporting Initiative (GRI), the international organization responsible for standardizing and enhancing performance reporting techniques for organizations around the globe. We are continuously improving our report, which for the first time is being produced according to the new generation of GRI in dicators.. The
proposition is presenting our results and commitments in the aspects considered more relevant for our business and stakeholders. The activities described in this Report reinforce our commitment to act sustainably, according to the best practices, generate high-quality results, and create value for all our stakeholders: shareholders, customers, employees, society, the government, financial institutions, and partners. Where indicated, the information also reports the consolidated data of the companies Prime, MRL Engenharia, and Urbamais. Log Commercial Properties, a group company, discloses its 2014 information in a separate report. Our 2014 Annual Report has not been subject to external evaluation or validation.
Some sections of this report are color highlighted. Click on them and read more about the related content online.
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WHO WE ARE Founded in 1979, the MRV Group gathers five companies: MRV Engenharia, Log Commercial Properties, MRL Engenharia, Prime Incorporações e Construções, and Urbamais Desenvolvimento Urbano. Know more about each of these companies.
MRV at a new home In 2014 MRV finished building its new headquarters in Belo Horizonte, after two years and half of construction. This building, with capacity to allocate up to 2,000 people, has brought productivity gains and cost savings, since it concentrates the entire company management in a single place. The structure was planned to offer more comfort and security to the allocated staff and has modern and sustainable resource management solutions, such as LED lighting, restrooms with natural lighting and ventilation, “intelligent” elevators, naturally ventilated and lit garage floors, roofs with thermal isolation and natural vegetation, building automation, garden irrigation, water saving systems etc. The transfer of all MRV employees to the new headquarters was completed in March 2015.
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TIMELINE
• In a pioneering ac construction indu creates a custom • MRV invests in sp the first sponsors and athletes. • Opening of the fi Horizonte. • Expansion of acti and São Paulo inl Brazil.
• MRV Engenharia is founded by shareholders Rubens Menin Teixeira de Souza, Mário Lúcio Pinheiro Menin, and Vega Engenharia Ltda. The company, headquartered in Belo Horizonte, State of Minas Gerais (MG), was engaged in building and developing real estate projects in the city.
1979
1990 – 19 1980 – 1989 • Delivery of the first properties built in Belo Horizonte. • Vega Engenharia withdraws from the shareholder group.
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• As it completes 35 years, MRV is established as the main agent of Minha Casa Minha Vida. • MRV formalizes its adhesion to the National Commitment for the Betterment of Working Conditions in the Construction Industry. Thus, it becomes the first Light Steel Framing building company to be part of the program. • After the agreement entered into with the Labor Prosecution Office, MRV insources 70% of its labor force by hiring approximately 12,000 new employees. • Inauguration of the new headquarter of the Company in Belo Horizonte. • Creation of the Instituto MRV.
ction in the ustry in Brazil, MRV mer service department. ports marketing with ships to football teams
irst store Belo
ivities to Minas Gerais land and to the south of
2010 – 2014
999 2000 – 2009 • MRV completes 25 years and projects its expansion into other states: Rio de Janeiro, Goiás, Mato Grosso, and Mato Grosso do Sul, Bahia, Espírito Santo, and Ceará, and the Federal District. • Initial public offering which shares traded on BM&FBovespa. • Signature of the agreement with Caixa Econômica Federal, formalizing MRV as the first correspondent in the real estate industry. • Together with other industry companies, MRV was involved in the preparation of the program “Minha Casa, Minha Vida” (Affordable Housing Program) with the federal government.
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WHERE WE ACT • Alagoas: Maceió
• Bahia:
Cabo de Santo Agostinho, Caruaru, Jaboatão dos Gurarapes, Olinda, Recife
Camaçari, Feira de Santana, Lauro de Freitas, Salvador, Vitória da Conquista
• Piauí:
• Ceará:
• Rio de Janeiro:
Fortaleza, Maracanaú
• Distrito Federal: Águas Claras, Ceilândia, Gama, Planaltina, Taguatinga
• Espírito Santo: Cariacica, Serra, Vila Velha, Vitória
• Goiás:
Teresina Belford Roxo, Campos dos Goytacazes, Duque de Caxias, Itaboraí, Macaé, Niterói, Resende, Rio das Ostras, Rio de Janeiro, São Gonçalo
• Rio Grande do Norte: Natal, Parnamirim
• Rio Grande do Sul:
Canoas, Caxias do Sul, Gravataí, Novo Hamburgo, Porto Alegre, São Leopoldo, Sapucaia do Sul
Aparecida de Goiânia, Goiânia, Valparaíso de Goiás
• Santa Catarina:
• Maranhão:
• São Paulo:
São José do Ribamar, São Luís
• Mato Grosso: Cuiabá, Várzea Grande
• Mato Grosso do Sul: Campo Grande
• Minas Gerais: Belo Horizonte, Betim, Contagem, Juiz de Fora, Lagoa Santa, Montes Claros, Nova Lima, Sete Lagoas, Uberaba, Uberlândia, Vespasiano
• Paraná: Arapongas, Araucária, Cambé, Curitiba, Londrina, Maringá, Ponta Grossa, São José dos Pinhais
• Paraíba: Campina Grande, Cabedelo, João Pessoa 8
• Pernambuco:
Itajaí, Jaraguá do Sul, Joinville, Palhoça, São José
Americana, Aparecida, Araçatuba, Araraquara, Araras, Barretos, Bauru, Birigui, Botucatu, Cajamar, Campinas, Campo Limpo Paulista, Catanduva, Cotia, Ferraz de Vasconcelos, Franca, Guarulhos, Hortolândia, Indaiatuba, Itu, Jacareí, Jundiaí, Limeira, Marília, Mauá, Mirassol, Mogi das Cruzes, Mogi Guaçu, Ourinhos, Paulínia, Pindamonhangaba, Piracicaba, Poá, Presidente Prudente, Ribeirão Preto, Rio Claro, Salto, Santa Bárbara D´Oeste, Santo André, São Bernardo do Campo, São Carlos, São José do Rio Preto, São José dos Campos, São Paulo, Sertãozinho, Sorocaba, Sumaré, Suzano, Tatuí, Taubaté, Votorantim
• Sergipe: Aracaju, Barra dos Coqueiros
ceará
maranhão
rio grande do norte paraíba
piauí pernambuco alagoas sergipe
mato grosso bahia
distrito federal
goiás minas gerais
mato grosso do sul
espírito santo
são paulo Rio de janeiro
paraná
santa catarina rio grande do sul
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MRV in numbers 2014
2013
2012
4,186
3,871
3,804
862
643
787
20.6%
16.6%
20.7%
Net income (R$ million)
720
423
528
Taxes paid (R$ million)
338
265
313
Indebtedness
24.2%
30.4%
40.7%
Value added (R$ million)
2,179
1,672
1,706
Pre-sales (R$ milh천es)
6,005
5,094
4,005
Pre-sales (units)
41,325
38,449
34,214
Launchings (R$ million)
4,336
3,517
3,433
Launchings (units)
29,386
25,516
29,655
Finished units
35,328
40,205
26,457
251
299
333
22,605
27,764
30,078
Net revenue (R$ million) EBITDA (R$ million) EBITDA margin
Construction sites
* It includes direct compensation, benefits and Severance Pay Fund (FGTS)
Number of employees Wealth creation (R$ million) Employees*
692.5
507.5
Dividends
391.2
Suppliers**
2,559,424 2,469,904 2,448,786 10
Taxes and contributions
171.0
140.7
125.3
** In 2014 MRV changed its criterion to calculate this figure to make it more complete, covering all hiring made in the year. The 2013 and 2012 data presented in this report have also been revised following the new approach.
338.1
265.0
YEAR 2014 2013 2012
312.9
Message from the Executive Board
Rafael Menin
Eduardo Fischer Eduardo Fischer
For 36 years, MRV has been committed to work based on social environmental and economic best practices. To understand the importance of a more coherent and responsible action, the company elected 2014 as the Sustainability Year, an opportunity to strengthen the concept and design actions focused on this subject. As part of a set of sustainability-related efforts, we created the MRV Institute, an entity engaged in managing our investments in education, occupational health and safety, professional training, culture, and leisure, always focusing on the wellbeing of our stakeholders. This project fills us with pride since it reinforces our commitment to what we believe in: if we all work together it is possible to build a better and more cohesive Brazil. In terms of economic performance, one of the highlights of 2014 was the investment in the insourcing of our services, which resulted in hiring more than 12,000 new employees to work in our construction sites and in an our offices. We have paid over R$ 690 million in wages and more than
R$330 million in taxes. As a result of several investments, we have once again consolidated our leadership in the Minha Casa Minha Vida program. In 2014, 73% of the launched units were eligible for the federal government program. In an effort to promote the wellbeing of the population and strengthen the MRV trademark, we have invested R$103 million in urban planning in the 130 cities where we operate. Because we believe in the transformative power of education as a productivity improvement and national growth driver, we invest in training programs for all our employees, their families, and the communities around us. Accordingly, we collaborate to better the quality-oflife of these stakeholders and create a long-lasting and positive legacy for the neighboring communities. In our attempted to eradicate illiteracy and promote learning, we are about to open the hundredth literacy and training school in our construction sites. We believe that these initiatives strengthen our foundations and ensure sustainability to be an actual pillar of our business.
Rafael Menin e Eduardo Fischer Presidency 11
Materiality After a series of studies and reviews, we have elected to keep the Materiality Matrix prepared for the 2013 report—with the support of an outside consulting firm—as the basis for the preparation of this report. The most important subjects have been identified through interviews with our Board of Directors and our in-house stakeholders. We have also heard members of the labor unions,
We reviewed the results and generated a list with the 13 most mentioned subjects, considered the most important for our inhouse and outside stakeholders.
External axle
Construction materials and resource using efficiency Employment practices Local development Innovation in construction processes Employee training and education Waste generation and management Return on shareholder investments Dialogue, engagement, and relationship with stakeholders Investment in infrastructure for public benefit Interaction with customers Access to housing Interaction with the government Labor equivalent to slavery Internal axle
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financial agents, and MRV investors. We sent on-line questionnaires to customers and suppliers. In aggregate, 933 customers and 26 suppliers answered the questionnaire.
Material aspects and scope Index
Aspect
Stakeholders In-house
Construction materials and resource using efficiency
Employees
NĂŁo aplicĂĄvel
Innovation in construction processes
Employees
Shareholders Customers
Waste generation and management
Employees
Communities Environmental agencies Government
Employment practices
Employees
Communities Class associations Labor unions
Employee training and education
Employees
Communities Suppliers
Labor equivalent to slavery
Employees
Government Suppliers Government NGOs
Dialogue in engagement with stakeholders
Employees
Communities Suppliers Press
Investment in infrastructure for public benefit
Employees
Communities Public authorities Government
Access to housing
Employees
Communities Customers
Local development
Employees
Communities Suppliers Governments
Return on investments for shareholders
Employees
Shareholders
Employees
Government Public authorities Environmental agencies
Employees
Customers
Environment
Labor Practices
Social
Economic Performance
Interaction with the government General Content
Outside
Interaction with customers
Materiality Very high High
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CORPORATE GOVERNANCE
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Changes in structure in search for a more dynamic management
Aiming at obtaining a more dynamic operational model, MRV elected a co-chair format
In 2014, the shareholders of MRV Engenharia e Participações S.A. approved the management restructuring and a change of our bylaws. At the time, in order to comply with the Novo Mercado regulation, we decide that the positions of Chairman of the Board and Chief Executive Officer or principal executive of the Company could not be held by the same person. Since March, we operate under this new administrative structure: Rubens Menin resigned as Chief Executive Officer and became the Chairman of our Board of Directors. For the purpose of obtaining a more dynamic operational model, aligned with MRV’s strategic
planning, we elected a co-chair format that couples the work of both CEOs, who have different but complementary responsibilities and roles. Rafael Menin became the Chief Executive Officer of Region I, consisting of Minas Gerais, Espírito Santo, Rio de Janeiro, the Midwest, and the Northeast. Region II is led by Eduardo Fischer Teixeira de Souza and comprises operations in São Paulo, Paraná, Santa Catarina, and Rio Grande do Sul, and he also coordinates the Legal Executive Department and the Institutional Relations Executive Department.
Organizational structure Since our IPO in 2007, we are part of Novo Mercado (special listing segment) and our shares are traded on BM&FBovespa. This segment, known for the high level of corporate governance requirements, is also key for a business conduct that prioritizes ethics and transparency, with the disclosure of clear and complete information on our financial and economic performance. In August 2011, MRV adhered to the Code of Self-regulation and Good Practices of 16
Publicly-held Companies (ABRASCA). The document includes principles, rules and recommendations to improve corporate governance initiatives. The Board of Directors is at the top of our administrative structure. It consists of seven members, including four independent directors and three directors from our controlling group. The board has regular quarterly meetings but it can meet extraordinarily when summoned by the chairman or two directors.
Board of Directors Chairman: Rubens Menin
Chief Executive Officer 2 Eduardo Fischer
Chief Executive Officer 1 Rafael Menin Regional I MG, NE, CO, RJ, ES Chief Administrative and SSC Officer Júnia Galvão
Regional II SP and South
Chief Financial and Investor Relations Officer Leonardo Corrêa
Chief Legal Officer Maria Fernanda Chief Production Officer Homero Paiva
Institutional Relations Director Raphael Lafeta
Chief Real Estate Development Officer Hudson Gonçalves
Chief Commercial Officer Eduardo Barretto
Chief Real Estate Financing Officer José Adib
The members of the Board of Directors are elected by the shareholders at general shareholders’ meetings. The board is responsible for setting our strategic and business policies, elect the members of the executive committee and oversee their management. The Board of Directors has the support of eight Management Committees with specific responsibilities. Critical issues or issues highly relevant for MRV that have to be analyzed by the Board follow the regular reporting flow in
our hierarchical scale. In 2014 there were no such occurrences. The Executive Committee is responsible for the company’s management. Today, our Executive Committee consists in nine people, elected by the Board of Directors for two-year terms, with possible reelection. All Board of Directors and Executive Eommittee members are Brazilian, working under contract, who live in regions where we operate. 17
Committees Eight internal committees provide assistance to the Board of Directors’ decision -making: Human Resources Committee, Corporate Governance Committee, Customer Relations Committee, Real Estate Development Committee, Risk Management Committee, Ethics Committee,Committee of Production and Committee of Credit/ Comercial. Know the roles and the members of each committee.
Shareholding structure See the shareholding structure of MRV.
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Scope Our operations are restricted to Brazil. However, we attract the interest of investors from different parts of the world, especially from the American continent. The chart on the right shows the percentage of shareholders per region in relation toour free float.
Shareholders per country Percentage of free float 8%
10,0%
9%
28%
24%
24%
44%
48%
20%
18%
2014*
2013
39%
28%
2012
Brazil
America (except-Brasil)
Europe
Asia & Oceania
2014*: Annual average shareholding position Last update: Dec 31, 2014
Ethical conduct The MRV Group Code of Conduct, revised in 2012, guides the actions of all our employees. This Code provides guidelines for the relationships with different stakeholders, including employees, shareholders, customers, partners, competitors, suppliers, communities, labor unions, public and governmental entities, the press, etc. To assess Code-related events and analyze situations that are not provided for in the
Code, we have an Ethics Committee that manages the communication channels created to clarify doubts and receive reports regarding compliance with guidelines. Additionally, this committee is responsible for the annual revision of the Code of Professional Ethics. We have two communication channels on which people can report procedures that are not in accordance with the Code of Professional Ethics regulations:
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MRV Confidential Channel This tool was created to receive reports on irregularities and noncompliance events with the Code and internal policies, procedures and regulations, as well as current legislation. A contractor manages this channel in order to ensure the confidentiality of information. Reports can
Confidential Channel 0800 888 2833 www.canalconfidencial.com.br/mrv canalconfidencialmrv@br.ictsglobal.com
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be made by telephone (0800 888 2833), our website www.canalconfidencial.com. br/mrv, or by the email canalconfidencialmrv@ictsglobal.com MRV Code of Conduct Channel Dedicated to clarifying doubts about the Code of Professional Conduct, it is also where we receive suggestions about the ethical management of our company. All our employees can access the tool via email and are oriented to contact their immediate manager in case of doubt. The email comitedeetica@mrv.com.br is another way employees can send questions. Currently we do not have specific procedures to assess corruption risks and we do not manage this type of occurrences. However, the issue is addressed in the Code of Professional Conduct, which reinforces our support to anticorruption practices aligned with international conventions. The legal department and the Risk Management and Internal Audit function are working to design an anticorruption policy. During this reporting period there were no reported cases of corruption at MRV or our subsidiaries.
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RESPONSIBLE BUILDING
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Business
Values
Real state development, building and sale of household units.
Ethics and transparency;
Mission
Committed team;
Realizing the dream of home ownership offering real estate with the best value for money for the customer.
Sustainability.
Vision Being the best company for development, construction and sales of lower income real estate in Brazil.
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Think like the customer; Delivering value to shareholder; Sharing the success;
Based on our Mission, Vision and Values, we operate in the real estate development, building and sale of household units business always looking for applying the best practices to generate solid results
A record-breaking year In 2014 we broke the record of number of units delivered, which totaled 42,505, of which 28,903 were delivered before deadline. This represents a 37% yearon-year growth. Our goal for 2015 is to reduce the average construction cycle by up to 20% for the early delivery of units under construction. The Simultaneous Sales system, implemented in 2013, gained momentum in 2014. As from the partnership with Caixa Econ么mica Federal (CEF) and Banco do Brasil (BB), property sales are recorded from the time credit is approved by these financial institutions. This reduces the business risk and the sales cancellation risk. The capital inflows into our cash allow us to accelerate production and complete properties more quickly, which contributes to improve the r delivery time. The MRV Engenharia team, specialized in building low-income residential properties, consists of eight operating officers, 53 supervisors, 449 engineers, and thousands of skilled workers. During this annual period, we had 251 construction sites in several Brazilian regions, with an average of 349 units per construction site.
42,505 keys delivered
28,903 keys delivered before deadline
First-class team 8 operating officers 53 supervisors 449 engineers Thousands of skilled workers
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Minha Casa Minha Vida (Federal Affordable Housing Program) For yet another year, MRV was the leading company of the Federal Government’s Minha Casa Minha Vida (MCMV) program. In 2014, we delivered 36,059 units for sale through the financial system. This number is lower than the 43,465 units reported in 2013 and reflects the scenario created by an atypical year in Brazil, with a series of strikes and the organization of large events, such as the presidential elections and the FIFA World Cup hosted in Brazil. Of the 41,000 pre-sales throughout the year, which corresponds to R$6 26
billion (or an year-on-year 17.9 percent increase), 82 percent were eligible for the program. In total, the 519 contracted projects generated R$6,553 billion, equivalent to 1.68 times the volume of the company raking second in the program, according to data from the Ministry of Urban Development in April 2014. The MCMV 2 contracts ofIncomeII and III totaled 166,193 contracted units in 2014. This corresponds to 11 percent of the total units offered by the segment. The know-how acquired throughout the years in building affordable houses
and our recognized track record in the housing loan market, place MRV as CEF’s (federal savings bank) and BB’s (a state-owned bank) main partner also in this program. In total, we have 1,860 own and outsourced employees working in the housing loan segment to facilitate the loan granting processes with the financial agents. Our team also works in projects that allow increasing the chances of the customers’ success of becoming homeowners, such as financing the portion allocated to savings for income II and III (from 10 to 20 percent of the property’s price) under the Minha Casa Minha Vida program.
MCMV 1 (2009-2010) TOTAL
MRV
%
1,005,028
50,384
5%
Group I
547,874
0
0%
Group II and III
430,154
50,384
12%
TOTAL
MRV
%
Pre-sales
2,758,471
169,373
6%
Group I
1,226,605
3,180
0%
Group II and III
1,531,866
166,193
11%
Pre-sales
MCMV 2 (2011-2014)
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SOCIAL AND ENVIRONMENTAL COMMITMENT
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2014: The Year of Sustainability We elected 2014 as the Year of Sustainability. This decision evidences the subject’s importance for our company, which since the beginning of our history has tried to work responsibly, by understanding that the actions adopted in the present cannot compromise the wellbeing of future generations.
Sustainability is one of our most important values and pillars—both internally and externally. This reporting year has brought new opportunities to address the subject in a deeper way, which resulted in actions that have strengthened our commitment to a more responsible operation.
During the Year of Sustainability, we invested in actions that reaffirm our commitment to build a better world
Construction sites MRV is the only Brazilian building company in a position to join the National Commitment for the Betterment of Working Conditions in the Construction Industry in 2012, when it was created. In 2014, the Commitment’s proposals were implemented in four more projects, increasing compliant sites to 27 of our 251 constructions sites, and generating benefits for 22,605 employees (as of December 31, 2014).
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Every day, the employees appointed by the labor union devote part of their time to talk to their coworkers and gather information on, for example, occupational health and safety conditions. The dialogue between this group of employees and the company helps increasing the swiftness and efficiency of improvements or solutions for possible problems.
The Commitment map
DISTRITO FEDERAL Taguatinga
paraíba João Pessoa
bahia Camaçarí
MATO GROSSO Várzea Grande
MATO GROSSO DO SUL Campo Grande PARANÁ Araucária
espírito santo Serra SãO PAULO Ribeirão Preto, SãoJosé dos Campos, Rio Claro, Votorantim, Itu, Piracicaba, Campinas
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Environmental sustainability At MRV construction sites and offices, 100% of the paper used are certified by the FSC Forest Stewardship Council. Certified products help preserving forests, soil, wildlife and biodiversity, thus ensuring the wellbeing and the rights of workers, communities and indigenous peoples.
Even without formally adopting the caution principle, we are always seeking new solutions to reduce the impacts of our activities. The entire project—from planning to completion—is marked by the respect for the environment, a commitment that we also require from our suppliers. In addition to promoting the landscaping of our projects and the areas around them, we are committed to recovering parks from degraded areas in the regions
where we operate. At the end of 2014 we had 16 Environmental Preservation Areas (APA) in Brazil. Following the agreements entered into the environmental protection departments and municipal governments, we helped preserving local ecosystems and funded the maintenance of squares, parks and green areas in the cities where we operate. Once again, this year we exceeded the tree-planting goal, which was 100,000 seedlings. In aggregate, 113,892 new trees were planted in all regions.
Sustainable projects The construction stage demands special attention from our company as regards responsible resource management and reduction of environmental impacts. In 2014, our actions were aimed mainly at saving water in projects according to company planning and due to the need caused by the water shortage in Brazil. The reuse of shower water in flushing cisterns, reclaimed concrete truck washing water, and the collection ofrainwater to irrigate vegetable and flower gardens and wash restrooms are some examples of actions created to reduce consumption. From January to December it was consumed 3.9 million m³ of water, a cost of R$ 54.5 million in water and sewage services. 32
One of the actions to reduce consumption consisted of using PET bottles filled with sand inside the flushing cisterns of the restrooms used in construction sites. The bottles occupy the space of 1.2 water liters of water volume, saved each time a person flushes. The initiative was initially implemented in construction sites in Ribeirão Preto and in one month generated savings of approximately 500 litters. Responsible project management goes beyond the construction stage and is one of the characteristics of the units delivered to our customers. In 2014 for example we implemented the sustainable resident project with pilot actions in Belo Horizonte and southern Minas Gerais. The initiative offers training and resources
so that residents can appropriately manage wastes and use natural resources responsibly in their daily activities. When a project is delivered each condominium receives a battery collector, a light bulb collector, a cooking oil collector, and a recyclable and non-recyclable waste collector. Additionally, residents attend training courses and are given manuals that teach them how to practice selective collection and save water and energy, among other information. MRV also provides an email address to clarify eventual doubts from the subjet (sustentabilidade@mrv.com.br). The housing units are planned to promote rational use of natural
resources and have the following differentials: • Individual water meters that foster a reduction of up to 50% in monthly the consumption of condominiums. • Economic flushes with a dual flush system that allow choosing from two water flows (3 or 6 litters). This system includes washbasins linked to the water box that allow saving up to 20 liters of water each time they are flushed compared to the conventional model. • Recyclable cooking oil collection system that allows each condominium to exchange the used oil for cleaning supplies thanks to a partnerships with NGOs.
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Waste disposal
40% of recycled or reused waste in 2014
Our efforts to improve the management of waste generate by construction works allowed that the volume of recycled or reused waste increased from 57,000 cubic meters in 2013 to 86.6 cubic meters in 2014, i.e., a 40% increase. The waste material, weighing 103,000 metric tons, is sufficient to fill 17,322 dumpsters and would otherwise be sent to landfills. To systematize the waste management processes nationwide, each construction site was assigned a person responsible for the appropriate disposal of the generated waste. Related actions not only helped preserving the environment but also generated economic gains. In 2014, all the reuse and recycling initiatives generated savings of R$3,997,507 for MRV. In March we started to install signs at the gates of the construction sites to
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indicate the works where sustainable waste management actions are conducted. By yearend, 87% of the construction sites had that sign. One of the actions intensified in 2014 to reduce material disposal was the scrubbing and cleaning of Personal Protective Equipment (PPE) for reuse. In the Northeast regional unit alone, which has achieved the best results with these actions, more than 5,000 hardhats, boots and uniforms were reused generating savings of almost R$57,000. Considering all regional units, 15,510 units were reused generating savings of more than R$1.1 million for the company. As in previous years, we maintain partnerships with recycling cooperatives to donate Styrofoam, plastic, cement bags, metal, glass, and other materials. In
the case of class A Cement Based Waste (Class A waste), such as dust, sand and gravel, recycling continues to be made in construction sites to make an aggregate that can be added to subfloor cement mortar and other similar uses. As for construction wood, it has two purposes: wood in good conditions is used to make furniture; other wood is chipped and used to generate energy by companies in other industries. A similar procedure is used for gypsum. This material is sent to a transshipment and sorting area and is afterward returned to the production process. In 2014 we maintained a reverse logistics system for waste classified as hazardous by returning it to the manufacturers. We also have partnerships with the Paraíba State University (UEPB); the Minas Gerais Federal University
(UFMG); the Bahia Federal University (UFBA); the University of Salvador (Unifacs); Empresa Mato-grossense de Pesquisa, Assistência e Extensão Rural (Empaer - MT) (Mato Gross State Research Agency), and Fundação de Amparo à Pesquisa e ao Desenvolvimento Científico e Tecnológico do Maranhão (Fapema) (Maranhão State Scientific and Technologic Research and Development Foundation) for studies on waste reuse. In addition to the Talk to Us, we have other channels for the public to clarify doubts, make complaints, or report events with a possible environmental impact as a result of our activities. When construction is initiated customers and neighboring residents receive an email or a telephone call from the engineer responsible for the project, who can be contacted 35
Certifications In 2014, we received two important certifications: ISO 14000, related the Environment Management and OHSAS 18000, related to on Occupational Health and Safety. We make continual efforts to increase the quality of our products by identifying opportunities for improvement at each project. We also invest in responsible waste
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management programs in all our works by handling each material as established by the prevailing environmental law. Since 2001, MRV is certified by ISO 9001, and since 2008 in the terms of PBQP-H Level A (Brazilian Habitat Quality and Productivity Program).
Control of Greenhouse Gas (GHG) emissions As a sustainable practice, in the past five years we took an inventory of our greenhouse gas emissions. This practice complies with the five principles of the GHG Protocol Corporate Standard of accuracy, completeness, consistency, transparency, and relevance. Each year we try to improve the quality of the results obtained to take a more accurate and complete inventory of our GHG emissions and thus identify opportunities to reduce these emissions. The inventory taking the GHG emissions comprises the 1, 2, and 3 scope sources, where the latter is related to indirect emissions. Among the approaches
presented by the GHG Protocol (WRI/ WBCSD), which include Shareholdings and Control (either operating or financial), we elected the financial control approach because we believe it is more appropriate for our business and asset management structure. Under this approach all assets owned MRV Engenharia are part of Scope 1. Beginning 2014, Urbamais’s data started to be included in the report and added to the other group companies, which was responsible for an increase in the figures posted in all scopes as compared to the previous year.
Our Scope on emissions in 2014 can be mostly attributed to the felling of Atlantic Woods by Urbamais in Araraquara, SP to build a subdivision project. Even with the inclusion of Urbamais in the report, the change in Scope 2, characterized by the purchase of grid electricity, was less than insignificant. There was an increase in Scope 3, represented by emissions from waste treatment, air travel, freight, and other activities over which we have no control.
Each year we try to take a more accurate and complete inventory of our GHG emissions and thus identify opportunities to reduce these emissions
Absolute GHG emissions per scope – 2014* Escope
t CO2
t CH4
t N2O t CO2e
Escope 1
20,261.69
0.42
2.64
20,261.69
Escope 2
6,101.57
-
-
6,101.57
Escope 3
171,616.31
-
-
171,616.31
* The GHG included in the estimate are those regulated by the Kyoto Protocol: carbon dioxide (CO2), methane (CH4), nitrous (N2O), sulfur hexafluoride (SF6), and hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs), expressed in the common unit of CO2 equivalent (CO2e). Both direct and indirect emissions are accounted for (Scopes 1, 2 and 3). Information not verified by an independent party.
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Urban improvements
In 2014 we invested approximately R$103 million in infrastructure that promotes the quality-of-life of residents
In addition to the objective of building quality housing at affordable price, with reasonable payment conditions, we seek to create a pleasant environment for the families that live in our projects. Either through counterpart funds or own initiatives, in the past year we invested approximately R$103 million in infrastructures that promote the quality-of-life of residents, such as driveway paving, and by building schools, clinics, water and wastewater treatment plants, and constructions that promote wellbeing, such as landscaping in squares, parks and gardens.
(WWTP) in the states of Bahia, Ceará, Espírito Santo, Mato Grosso, Paraná, Rio de Janeiro, Rio Grande do Sul, and Santa Catarina, thus contributing to offering better living and health conditions for the population. In the cities of Jaboatão dos Guararapes (PE) and Campinas (SP), we allocated funds to build roads and bridges that facilitate residents’ transit, which represented an investment in excess of R$21 million. Also in Campinas, we destined almost R$500,000 to adapt the São José dos Campos Avenue, improving pedestrian and vehicle transit.
In 2014, we invested R$13.9 million to build 20 wastewater treatment plants
Citizen MRV Since its foundation, MRV creates and integrates actions to offer welfare and improve the quality-of-life of communities, especially for underprivileged youngsters and senior citizens. Inaugurated in December 2014, the MRV Institute was created with the purpose of promoting activities directed at education, health, occupational safety, professional training, culture, and leisure generating value and wellbeing for the society.
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For more than 15 years we support Cidade dos Meninos São Vicente de Paulo (Divine Providence Association for the Human Promotion), located in Belo Horizonte, MRV’s headquarter. The project, one of the highlights of our social work, received R$1.5 million to maintain the activities offered to more than 5,000 students.
Main actions developed in 2014 Building a new classroom. We invested approximately R$60,000 to build a classroom in the Antônio Nunes da Rocha Municipal School, in São José dos Pinhais, PR. In this new classroom, the school opened 60 more places than in 2013, increasing its support to 380 elementary school students—first and second grades.
in the Heartwarming Campaign. The initiative, held by the Social Solidarity Fund, benefits many welfare entities and underprivileged households.
A gym on the Square. The Mata dos Ipês Ecological Park, in Uberaba, MG received an open-air gym in April. This space donated by MRV allows visitors to practice fitness activities for free. In aggregate, we invested more than R$10,000 in infrastructure and equipment.
Support to the senior citizens home. Through an agreement entered into with MRV, the Lar da Velhice e Assistência Social (senior citizens home and welfare) institution, which serves senior citizens in Araçatuba, SP, transforms construction waste into a source of income for the organization. This partnership, formalized in 2014, was suggested by our employees and since then benefits more than 35 senior citizens in the region.
Clothes Campaign in São José dos Campos, SP. In 2014 we participated
Donation to the NGO Cabelegria. In August last year, 15 female employees 39
from the southern Minas regional unit led a hair donation campaign, which was sent to the NGO Cabelegria. This NGO manufactures and distributes wigs for kids who undergoing cancer treatment.
Contribuições e doações 2014 (R$ mil) Associação de Promoção da Divina Providência
1,209
Instituto Empreender Endeavor Brasil
75
Instituto Atlântico
55
Instituto Minas pela Paz
23
A playground for the population of Maringá. In September one of the landmarks of this city in Paraná received a new playground built inside the Ingá Park. We invested approximately R$30,000 that will allow families in the region to participate in free leisure and open-air activities. Pink October. As part of the Pink October actions, our employees collected 365 scarfs that were donated to women undergoing breast cancer treatment. The purpose of the action was to help raising the self-esteem of patients that were being treated by ten charities. Christmas of Light. In the cities of Serra, ES and Uberlândia, MG Christmas became more colorful. With our sponsorship, public squares and streets were decorated and lightened for the season festivities. Solidarity collection. In Londrina and Cambé, PR, a group of employees collected toys to be donated during Christmas. The 320 gifts were delivered by Santa Claus to the NGO Viver.
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Waste donation. A partnership formed in Cravinhos, SP transforms waste into raw materials for works of art. Materials such as slats, PVC tubes and beams, which otherwise would have been dispose of, come to life as toys in the hands of an artisan. Besides ensuring a sustainable disposal of waste, the action creates a new source of income for the artisan. Minas for Peace. We renewed for another year the agreement with the Institute created in 2007 from an initiative of the Minas Gerais Industry Federation (Fiemg) and one of the largest companies in the State. The organization’s purpose is to help the government fight violence and reduce crime. The institution stands out for designing, proposing, and implementing feasible solutions focused on public safety. Criança Esperança. In a partnership with Codeme and the State of Minas Gerais Heavy Construction Industry Association (Sicepot), we signed a commitment to build the new headquarters of the Criança Esperança Center in Belo Horizonte. In addition to the new headquarters, which will have dance, music and arts facilities, the project also includes building a swimming pool and refurbishing the sports pitch where over 700 children and adolescents will play sports.
Social Investment (R$ million) R$ milh천es
2014
2013
2012
Education
2,0
0,2
6,8
-
-
4,7
Urbanization
88,1
80,0
83,0
Environment
13,9
13,1
2,8
TOTAL
103,5
93,3
97,3
Health
41
42
CUSTOMERS
43
250,000
8.15
active customers
satisfaction points with customer service out of 9, which means a 90.5% service quality
52,943
1,283
monthly average answered telephone call
contacts in social networks.
158,858
44
130,000
on-line Communications and via the Relationship
accesses to ConexĂŁo MRV videos posted on YouTube
264,543
1.5 million
monthly average visits to the Relationship Portal
accesses to videos with customers’ stories posted on YouTube.
Building dreams One out of 300 Brazilians is a MRV client. The company broke a record delivering 42,505 keys in 2014. Coupled with this action, we conducted 101 “Delivering Dreams� events in Brazil, representing 76.5% of the projects with first delivery of keys within the same year, corresponding to a 38.9% increase compared to the participating projects in the previous year. The purpose is to transform the event in a gathering, with customized service for new residents and integration activities with other co-owners. One of the project novelties in 2014 was the involvement of our leadership in these gatherings as a way to get closer to people and an opportunity to identify improvements to the process. The project is called Executive Service and has already
brought 65 of our leaders to attend key delivery events. When a customer receives the keys, such customer has access to the Homeowner Manual, a document that was consolidated online in 2014, in yet another innovative initiative of our company. Available in the Customer Portal, this manual gathers virtual property plans, explanatory videos on electrical and plumbing installations, preventive maintenance tips, and other relevant information. In addition to reducing the environmental impact generated by the production and distribution of hardcopies (either printed material or CDs), the online manual represents annual savings of R$ 800,000 for the company.
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Technical assistance After a period of inhouse virtual and in-class training, we implemented the SAP system to manage all the demands and requests received by the field teams. Since 2013, when visiting the portal to request maintenance, a customer can classify the request and schedule the visit. The data is sent directly to the tablet of the engineer in charge, who makes an assessment visit and if necessary requests the purchase of materials and the performance of services.
During the property warranty period, which is five years after the delivery of the keys, the customer can call the Technical Assistance team to report occurrences, request visits, and schedule inspections by an MRV specialist. A team of 1,500 own and outsourced employees has the mission of providing quick, efficient response to any request. In 2014, the Na Palma da MĂŁo project was consolidated nationwide, thus contributing significantly to meeting this goal.
Customized service In 2014, we sought to expand even further the relationship opportunities with our customers by offering new channels to build an increasingly accessible, direct and efficient communication. The main information that customers need to know, from the moment they sign a purchase and sale contract to delivery, is handed over in a segmented, proactive way through the Communication Ruler. With a database information crosschecking strategy, we synchronize the data of our over 250,000 customers with the information on and building schedules of the 251 constructions in progress, allowing them to receive explanatory marketing emails during the entire property construction period.
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On the same website, the person in charge enters the information about each construction, consolidating the data that allows for a continual work improvement. By the end of 2014, the project accounted for efficiency gains of approximately 60% for our company, in addition to a 25% decrease in the costs recorded before implementation. In 2014, process streamlining allows us to complete 95% of the technical assistance requests within 30 days after the request was filed.
One of the main resources to ensure the dialogue with the customer is kept within the Relationship Portal, which is continually improved. Last year we developed the project of a directed communication tool that allows sending customized messages to customers, either per block or project, and produce more detailed reports based on these contacts. The tool also favors the expansion of the Communication Ruler allowing for customized interactions on special occasions, such as a customer’s birthday, the one-year anniversary in the new apartment, and other special dates. The Portal hosts the MRV Connection videos, a pioneering project created by the company to provide educational services and help customers clarify their main doubts about
the off-plan property purchasing process. A total of nine short videos facilitate the understanding of several matters, such as financing options, necessary documentation, delivery of the keys, industry indices, etc. The videos total more than 130,000 views.
Positive assessment Several initiatives were initiated in 2014 to seek a closer, more transparent relationship with our customers. One of the highlights is the Visit to the Construction Site project, which ensures that all customers have the opportunity to know the construction sites when projects reach 70% of completion. As a result, we recorded a 65% reduction in the number of complaints about the construction site visit process. The action covered more than 100 projects and totaled approximately 38,000 visits along the year. The compromise with continual improvement also transformed the way we serve the MRV customer in 2014. Through a project call Humanized Service, the staff
who interact with customers were trained to handle contacts in a lighter, more friendly, closer manner. The result was a 3% increase the rating awarded by customers at the end of service in 2014 2012, and perceived Call Center quality above 90%, according to customers, also in 2014. The Promotional Campaign process was also redesign to create benefits for the customer. These actions increase service quality by reducing response time and minimizing errors when opening request calls. As a result, we recorded a 75% decrease in the number of complaints about this matter in 2014 compared to 2012.
90% quality perceived by Call Center customers in 2014
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#meumundomelhor In September 2014 we started to advertise videos that show the trajectory of actual customers in their struggled to become homeowners. The five videos published by the date of this report have already exceeded 1.5 million views and have reached more than 6 million people in social networks. Social media interactions, including enjoys, comments and sharing exceed 47,000, thus confirming that the videos are an
important tool to get even closer to our customers and prospective customers. This project continues in 2015 with stories from different parts of Brazil. The videos have unfolded from the #meumundomelhor campaign, a series of actions launched by our company in 2014 to portray the social transformation that we are promoting in the life of our customers.
Consumer Protection Agencies In 2014 we visited all the Consumer Protection Bureaus (Procons) of the cities where we have projects. In aggregate, this represented 15 discussion opportunities with these agencies and an opportunity for our team to introduce the company and
present solutions in response to customer doubts or complaints. In addition to an email, the staff of regional Procons has access to a hotline for customized service from the MRV customer relations team in order to optimize response time to any demands.
Projects One of the projects planned for 2015 is the launching a direct, exclusive communication channel with building managers that will provide all the necessary support. A virtual tool will help them managing the condominium, with information about preventive maintenance.
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Another novelty plan for 2015 is the launching of the MRV Ombudsman, yet another channel for a closer dialogue between our company and consumers. The purpose is to contribute to the improvement of relationships and increase customer loyalty by optimizing results previously obtained through other service channels.
MRV Without a Doubt: Transparency and soundness MRV Sem DĂşvida (MRV Without a Doubt) was born from the need to establish a more transparent relationship with our customers. The interactive guide, divided into six major subjects, shows figures and facts about the building company and moves on to
subjects such as quality, warranty and sustainability. The guide also serves partners and stakeholders that look for information about the company. The webpage was launched in December 2014 and has already had 22,000 visits.
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50
PEOPLE
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People come first The management of MRV employees is steered by respect and professional appreciation
Workforce
In September 2013, we entered into an agreement with the Labor Prosecution Office that started a process that prioritizes hiring own employees, focused on insourcing our labor force. In the first months of 2014, approximately 12,000 employees became part of our own headcount working in our construction sites. To make this change, we looked for skilled workers in the market and among the outsourced workers who had already provided services to the company. All MRV employees working in our construction sites, including outsourced workers, receive NR-18 training, mandatory for construction site work. Depending on the role, a worker receives training in another regulatory standard, such as NR-10, NR-12, NR-33, and NR-35, which specifically addresses work at heights.
29,600 26,176 24,570
2014
Our new relationship with our employees is characterized by respect, ethics, and partnership to achieve
2013
Number of employees working in MRV construction sites * Includes outsourced workers; does not include interns.
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increasingly better results and create value. People management prioritizes incentives to personal and professional development, and keeping a healthy work environment. The compensation and benefits offered by the company depend on the role and follow industry practices, while there is no salary difference due to gender. We comply with all collective bargaining agreements entered into with the employees’ labor unions. In 2014, 18 workers from different areas joined the company through the Trainee Program created in 2011 to recruit young talent. The program allows hired employees to work in different company departments during at least 18 months, always under the supervision of the Human Development department and the Executive Board. At the end of this period, participants present a project with improvements for processes linked to their department, based on the lessons learned.
2012
SSMA Our Safety, Health, and Environment Policy (SSMA) holds the importance of these three subjects equivalent to any other business management variables.
Safety culture The Internal Work-related Accident Prevention Week (Sipat) and other awareness campaigns are opportunities to reinforce the importance of adopting safe practices in the work environment. In 2014, more than 15,000 employees participated in these meetings, which included lectures to build awareness on the importance of using Personal Protection Equipment (PPE), conduct regarding height work procedures, environmental education actions, and lectures on health, sustainability, and other subjects. In association with local authorities and institutions, we promoted vaccination and blood donation drives, in addition to activities that include arts and crafts and professional training for members of neighboring communities. Another action that mobilizes employees for awareness building
times about the occupational health and safety are the Daily Safety Dialogues (DDS), a practice adopted in all construction sites. On average, in 2014 25,000 workers participated of these events created to contribute to the reduction of accident risks by incorporating safety as a work culture. Throughout the year, the Internal Accident Prevention Committees (CIPAs) were also very active in all construction sites, regional offices, in our headquarters in Belo Horizonte. In 2014 the Ministry of Labor and Employment conducted 119 inspections in our construction sites and offices. There were no occurrences or notifications in 88 of these inspections, or 74% of the audited sites. From January to December this Ministry initiated 232 administrative proceedings with the administrative defense body. 53
These proceedings are catalogued and registered for the continual improvement of our occupational safety management. In 2014 the Ministry of Labor and Employment conducted 119 inspections in our construction sites and offices. There were no occurrences or notifications in 88 of these inspections, or 74% of the audited sites. From January to December this Ministry initiated 232 administrative
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proceedings. These proceedings are filed with the administrative defense body and are catalogued and registered for the continual improvement of our occupational safety management. We did not record any fatal accidents in our sites this year. As we regularly do, we reinforce safety guidance and conduct traffic accident prevention campaigns with employees and outsourced workers since there were two fatal accidents during commuting involving employees from one contractor and one associate.
Up-to-date with health All health promotion actions developed by our company seek to comply with Regulatory Standard NR-7, enacted by the Ministry of Labor and Employment. Through the Occupational Health Medical Control Program (PCMSO), we create and develop internal initiatives aimed at promoting the health and quality of life of our employees.
year MRV also hosted vaccination drives. In aggregate, 2,215 employees were vaccinated, of which 689 against the flu with the inoculation of the H1N1 vaccine. In association with municipal departments of health, we conducted awarenessbuilding events on the construction sites about the importance of maintaining the individual vaccination cards up-to-date.
In addition to periodical and supplemental occupational medical exams, this past
Lodging and cohabitation Since 2012 we maintain an on-line lodging control system. Labor Safety Technicians visit daily living quarters to assess the lodging conditions of the over 5,000 employees that use them. These inspections take into consideration the guidelines and requirements of Regulatory Standards 18 and 24. Data is compiled in weekly reports about each unit and posted on a corporate social network to be followed up by the Executive Committee.
These documents and photographic records are also made available to different supervisory bodies, when requested. From January to December the team produced 14,415 reports. In addition to ensuring the wellbeing of our workers in the lodgings, we provide cafeterias and common areas in the construction sites with room for leisure and resting.
We require our partner contractors to provide appropriate meals and quarters, and ensure a careful management of their workers’ health and safety
55
56
Training and recruitment We believe in the transformative power of education and that training and development are key to a quality work. Therefore, we have classrooms on the construction sites, where are literacy and professional training courses are conducted, designed to supplement the employees’ education. Throughout the year we opened 97 schools on construction sites nationwide, providing learning to approximately 1,750 student workers. Whenever possible, this opportunity is offered to the workers’ families and the residents of neighboring communities. In 2014, in a pioneering initiative at MRV, we offered professional training to a team consisting 20 former convicts.
After completing the four-month Bricklayer and Tiler courses held by the National Industrial Apprenticeship Service (Senai), the new workers were hired to work on the Retiro das Rosas project in Rio de Janeiro. We regularly hire students that complete professional training courses held by Senai, such as those under the National Program for Access to Technical Education and Employment (Pronatec), in all regional units. To advance the professional training of workers already in our headcount, we permanently offer professional development opportunities.
Benefits All our employees are entitled to a series of benefits that are extended to their dependents. The benefit package includes medical and dental plans, discounts in accredited drugstores, group life insurance, meal tickets, basket of food staples, and transportation vouchers. The benefit package of employees who work in administrative departments and construction administration also includes the annual payment of Profit and Results Sharing (PPLR).
Table of training courses in 2014
90
in-class training courses
2,140 people trained
994
total hours of in-class training
4,119 total hours virtual training
57
58
TRUST AND PARTNERSHIP
59
Dialogue and transparency to build permanent relationships with all Our relationship with our different stakeholders is guided by our company values—ethics and transparency—in favor of broad, efficient communication. As part of our efforts to build a trustworthy environment, we keep
specific dialogue channels for each one of our stakeholders: employees, suppliers, shareholders, the press, the community, and the government.
Labor unions In all states where MRV operates, we carefully follow the collective labor bargaining and other collective agreements signed with the labor unions. Throughout 2014, we signed 89 collective bargaining agreements with 89 labor unions in the cities where we have building projects, covering 24,508 employees.
60
The agreed provisions include regulatory standards that address occupational health, safety, medicine, and hygiene, as well as implementation of programs such as the Occupational Health Medical Control Program and the Environmental Risks Prevention Program. In 2014 there were no recorded cases on which the rights to freedom of association and collective bargaining
Suppliers Our relationship with suppliers is guided by our values and the assumptions of our Code of Professional Conduct. Every year we spend approximately R$2.5 billion in purchases from and contracts with 8,900 active suppliers, from a total of 12,000 registered suppliers, covering 19,000 items. The Supplies team, responsible for procurement, has 172 employees, divided into 28 teams allocated to different parts of Brazil. The team works in the sourcing of equipment, strategic services, and higher value added services (foundations, demolitions, earthmoving, paving, power grids, etc.), working seamlessly with our Production departments. Annually we issue almost 366,000 orders to suppliers, i.e., one every 22 seconds on average. In this reporting year, the Supplies department handled half the amount disbursed to build the projects. The other half refers to labor, including the wages of engineers, contractors, and other employees. The construction sites are free to hire small local suppliers. To ensure an economy of scale in our purchases, we do not have any exclusivity contract with any supplier and we conduct daily market surveys to look for the best prices.
All the wood used by us comes from the reforestation areas and we only exceptionallyuse wood from native forests, always requiring that the product be certified. The same principle applies to other raw materials, such as sand and other inputs, which are only purchased after the supplier submits a certificate of origin, or an operating permit in the case of contractors. This stance is aligned with the value of sustainability, one of the pillars of our company’s corporate governance. Another MRV policy establishes that both own and outsourced workers shall have the same working conditions. Accordingly, we require our partner contractors to provide appropriate meals and quarters, and ensure a careful management of their workers’ health and safety. To select our suppliers, we follow strict labor criteria, such as prohibiting the use of child labor, slave labor, or discriminatory practices. Our contracts provide for severe penalties—including termination—in case of noncompliance with any of these clauses. In 2014, no human rights violations or negative occurrence in relation to labor practices was recorded.
To select our suppliers, we follow strict labor criteria, such as prohibiting the use of child labor, slave labor, or discriminatory practices.
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Investors We are part of BMFBovespa’s Novo Mercado and to keep an open dialogue channel with our investors, we have a section specially dedicated to these stakeholders on our website. In this section we gather the main financial and legal information about our company, in addition to the quarterly and annual reports, and news related to the business performance.
Since 61% of our shares are held by both Brazilian and foreign investors, we are always in close contact with financial industry analysts and representatives. From January to December we organized six presentations to these stakeholders, as well as 16 conferences, 51 sundry meetings, 12 roadshows, and eight visits to construction sites.
Government As a good practice, we seek to establish a close relationship with the government and public authorities in general to address subjects directly related to our business and sustainability-related issues. We also seek to participate consistently in the forums and workgroups dedicated to subjects that interest us, such as the rules of the Minha Casa Minha Vida program and the labor legislation, for example the Ministry of Labor and Employment’s Regulatory Standards. We are also actively involved in the
62
decision-making on aspects that govern the construction industry. The issues related to municipal level issues are handled directly with the Cities. As for issues at state and federal levels, they are handled by us together with employers’ associations, such as the Construction Industry Trade Association (Sinduscons), a regional body, and the Brazilian Real Estate Developers Association (Abrainc) and the Brazilian Construction Industry Chamber (CBIC), both operating at national level.
63
Financial performance In 2014 we worked to improve our operations in the affordable housing market, which is our main focus since the company was established. We have obtained sound results during 2014, with a year-on-year 17.9% growth in the sales volume, which shows that the market where we operate remains strong, even though the domestic and international economic scenario is unstable. The net operating revenue was R$4.18 billion in 2014, an 8.2% growth compared to the R$3.87 billion reported in the previous year. EBTIDA was R$862 million (margin of 20.6%), 34% above the R$643 million reported in 2013. Consolidated net income was R$720 million, a 70.2% growth compared to the R$423 million reported in the previous year.
Employer INSS, COFINS (tax on revenue), ISSQN (service tax), IRPJ/ CSLL (taxes on income), PIS (tax on revenue), management fee, ICMS (State VAT), and other taxes.
Indebtedness (net debt to equity)
40.7%
312.9 338.0
265.0
Dividends paid (R$ million)
141 140.7
30.4% 125.3 24.2%
2014
64
2013
2012
2014
2013
2012
2014
2013
2012
Glossary Permanent Preservation Areas (APPs) – Created by the Brazilian Forest Code (Law 4771 of 1965, as subsequently amended), they consist of legally protected, environmentally fragile, vulnerable areas that may be publicly or privately owned, urban or rural, covered by native vegetation or otherwise. In urban areas, maintaining APPs increases the value of natural and built assets, ensuring better quality of life for the communities.
Novo Mercado – Launched in 2000 by Bovespa, Novo Mercado established a highly differentiated corporate governance standard and became a benchmark for the transparency required by investors. The listed companies also adopt a set of corporate rules that increase the rights of their shareholders, in addition to a more comprehensive information disclosure policy. In Novo Mercado, companies can only issue voting shares, the so-called common shares (ON).
EBITDA – Acronym of Earnings Before Interests, Taxes, Depreciation and Amortization. Reverse logistics – One of the concepts of the National Solid Waste Policy. It is characterized by a set of actions, procedures, and means intended to allow the collection and return of solid waste to the corporate sector for reuse within its cycle or other production cycles, or another purpose.
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ATTACHMENT Awards and recognitions in 2014 1st place on 2014 ITC Ranking - More Launches, More Delivered Units and Low Income Segment; winner on the category of more build units in 2012, 2013 and 2014. For the fourth year and third consecutive year, the best performance in square meters constructed. Given by “Inteligência Empresarial da Construção – ITC” magazine. The company has also awarded as the country main construction company in low income segment. 1st place – Top of Mind – Common market successful brands – Minas Gerais 2012/2014 Civil Construction. Awarded in the Civil Construction category through research of 1,500 interviews among the 23 major cities in Belo Horizonte, according to IPC – “Índice de Potencial de Consumo”. In total, it represents 50.44% of state IPC. Biggest and Better Companies in Minas Gerais – XVI Minas Award – Common market, in the Business Performance category The selection followed a rigorous and strictly technical criteria , having as an essential foundation to analyze the balance sheet , the profit and loss statements and management reports disclosed by companies, based on financial year 2013. 1st place on Icon Brands Award – The most remembered in Espírito Santo State, in the Construction Companies category. For the second consecutive year, MRV was the most remembered construction company by Espírito Santo population, been awarded in first place in the real state construction company. Vitae Rio Award – Safe Construction, “Empresa Viva” – SECONCI Safe Construction, “Empresa Viva” was created by Seconci – RJ to improve visibility to excellence standards in helath and security in construction companies. Edison Zenóbio Award in Real State Comunication Event set by “Diários Associados” and Real State Chamber. It has been elected the most efficient strategies of real state offering, published by “Estado de Minas” newspaper and “Lugar Certo” website.
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Summary of the GRI Content This report follows the GRI G4 guidelines on your ESSENTIAL model as summary below. GENERAL STANDARD DISCLOSURES
Pg./Reference
External Verification
Strategy and Analysis G4-1 Provide a statement from the most senior decision-maker of the organization (such as CEO, chair, or equivalent senior position) about 11 the relevance of sustainability to the organization and the organization’s strategy for addressing sustainability.
No
G4-2 Provide a description of key impacts, risks, and opportunities.
11
No
4
No
Organizational Profile G4-3 Report the name of the organization. G4-4 Report the primary brands, products, and services.
4
No
G4-5 Report the location of the organization’s headquarters.
4
No
G4-6 Report the number of countries where the organization operates, and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics covered in the report.
4, 8 and 9
No
G4-7 Report the nature of ownership and legal form.
4
No
G4-8 Report the markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries).
4, 8 and 9
No
G4-9 Report the scale of the organization, including: Total number of employees; Total number of operations, Net sales (for private sector organizations) or net revenues (for public sector organizations); Total capitalization broken down in terms of debt and equity (for private sector organizations); Quantity of products or services provided.
10
No
G4-10 Report the total number of employees by employment contract and gender; Report the total number of permanent employees by employment type and gender; Report the total workforce by employees and supervised workers and by gender; Report the total workforce by region and gender; Report whether a substantial portion of the organization’s work is performed by workers who are legally recognized as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors; Report any significant variations in employment numbers (such as seasonal variations in employment in the tourism or agricultural industries).
52
No
G4-11 Report the percentage of total employees covered by collective bargaining agreements.
100%
No
G4-12 Describe the organization’s supply chain.
61
No
G4-13 . Report any significant changes during the reporting period regarding the organization’s size, structure, ownership, or its supply chain, including: Changes in the location of, or changes in, operations, including facility openings, closings, and expansions; Changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organizations); Changes in the location of suppliers, the structure of the supply chain, or in relationships with suppliers, including selection and termination.
As mudanças registradas estão relacionadas à rotina de concorrências, não tendo havido alterações significativas.
No
G4-14 Report whether and how the precautionary approach or principle is addressed by the organization.
64
No
G4-15 List externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes or which it endorses.
30 and 31
No
COMMITMENTS TO EXTERNAL INITIATIVES
G4-16 List memberships of associations (such as industry associations) and national or international advocacy organizations in which the 62 organization: Holds a position on the governance body; Participates in projects or committees; Provides substantive funding beyond routine membership dues; Views membership as strategic.
68
No
GENERAL STANDARD DISCLOSURES
Pg./Reference
External Verification
G4-17 List all entities included in the organization’s consolidated financial statements or equivalent documents. Report whether any entity included in the organization’s consolidated financial statements or equivalent documents is not covered by the report.
3
No
G4-18 a. Explain the process for defining the report content and the Aspect Boundaries. Explain how the organization has implemented the Reporting Principles for Defining Report Content.
13
No
G4-19 List all the material Aspects identified in the process for defining report content.
13
No
G4-20 For each material Aspect, report the Aspect Boundary within the organization, as follows: Report whether the Aspect is material within the organization; If the Aspect is not material for all entities within the organization (as described in G4-17), select one of the following two approaches and report either: The list of entities or groups of entities included in G4-17 for which the Aspect is not material or – The list of entities or groups of entities included in G4-17 for which the Aspects is material; Report any specific limitation regarding the Aspect Boundary within the organization.
13
No
G4-21 For each material Aspect, report the Aspect Boundary outside the organization, as follows: Report whether the Aspect is material outside of the organization; If the Aspect is material outside of the organization, identify the entities, groups of entities or elements for which the Aspect is material. In addition, describe the geographical location where the Aspect is material for the entities identified; Report any specific limitation regarding the Aspect Boundary outside the organization.
13
No
G4-22 Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements.
Changes in information and data provided in previous editions are explained throughout the report in footnotes or the text itself.
No
G4-23 Report significant changes from previous reporting periods in the Scope and Aspect Boundaries.
There wasn’t in 2014
No
Aspectos materiais identificados e limites
Stakeholder Engagement G4-24 Provide a list of stakeholder groups engaged by the organization.
12
No
G4-25 Report the basis for identification and selection of stakeholders with whom to engage.
12
No
G4-26 Report the organization’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process.
12
No
G4-27 Report key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns.
13
No
G4-28 Reporting period (such as fiscal or calendar year) for information provided.
3
No
G4-29 Date of most recent previous report (if any).
2014 (base year 2013)
No
G4-30 Reporting cycle (such as annual, biennial).
Anual
No
G4-31 Provide the contact point for questions regarding the report or its contents.
Expedient
No
Report Profile
69
GENERAL STANDARD DISCLOSURES
Pg./Reference
External Verification
68
No
3
No
G4-34 Report the governance structure of the organization, including committees of the highest governance body. Identify any committees responsible for decision-making on economic, environmental and social impacts.
18
No
G4-35 Report the process for delegating authority for economic, environmental and social topics from the highest governance body to senior executives and other employees.
18
No
G4-38 Report the composition of the highest governance body and its committees by.
16 to 18
No
G4-39 Report whether the Chair of the highest governance body is also an executive officer (and, if so, his or her function within the organization’s management and the reasons for this arrangement).
16 to 18
No
G4-42 Report the highest governance body’s and senior executives’ roles in the development, approval, and updating of the organization’s purpose, value or mission statements, strategies, policies, and goals related to economic, environmental and social impacts.
18
No
G4-47 Report the frequency of the highest governance body’s review of economic, environmental and social impacts, risks, and opportunities.
16 and 17
No
G4-49 Report the process for communicating critical concerns to the highest governance body.
16 and 17
No
G4-50 Report the nature and total number of critical concerns that were communicated to the highest governance body and the mechanism(s) used to address and resolve them.
18
No
G4-56 Describe the organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics.
19 and 20
No
G4-58 Report the internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and matters related to organizational integrity, such as escalation through line management, whistleblowing mechanisms or hotlines.
19 and 20
No
GRI CONTENT INDEX G4-32 . Report the ‘in accordance’ option the organization has chosen. Report the GRI Content Index for the chosen option (see tables below).Report the reference to the External Assurance Report, if the report has been externally assured. GRI recommends the use of external assurance but it is not a requirement to be ‘in accordance’ with the Guidelines. Assurance G4-33 Report the organization’s policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance provided. Report the relationship between the organization and the assurance providers. Report whether the highest governance body or senior executives are involved in seeking assurance for the organization’s sustainability report. Governance
Ethics and Integrity
INDICADORES DE DESEMPENHO ECONOMIC CATEGORY Aspects
Form of management and indicators
Pg./Reference
Economic Performance
DMA
10 and 64
G4 – EC 1 Direct economic value generated and distributed
10 and 64
DMA
38
IMPACTOS ECONÔMICOS INDIRETOS
70
Omissions
external verification No
G4- EC 7 Development and impact of infrastructure investiments and 38 services supported. G4- EC 8 Significant indirect economic impacts, including the extent of impacts.
38
No
ENVIRONMENTAL CATEGORY Aspects MATERIALS
WATER
Effluents and Waste
Form of management and indicators
Pg./Reference
Omissions
External verification
DMA
32 and 33
(parcialmente)
No
G4-EN 1 Materials used by weight or volume
32 and 33
No
DMA
32 and 33
No
G4-EN 8 Total water withdrawal by source.
32 and 33
No
G4 – EN 10 Percentage and total volume of water recycled and reused.
32 and 33
DMA
34
No
G4-EN 24 Total number and volume of significant spills
There were no spills in 2014
No
SOCIAL CATEGORY: Labor Practices and Decent Work Aspects
Employment
Training and Education
Equal Remuneration for Women and Men
Labor Practices Grievance Mechanisms
Form of management and indicators
Pg./Reference
DMA
52
No
G4-LA 2 Benefits provided to full-time employees that are not 57 provided to temporary or parttime employees, by significant locations of operation.
No
DMA
57
No
G4-LA 9 Average hours of training per year per employee by gender, and by employee category.
57
No
DMA
52
No
G4-LA 13 Ratio of basic salary and remuneration of women to men by 52 employee category, by signifcant locations of operation.
No
DMA
20
No
G4-LA 16 Number of grivances about labor practices filed, addresed, and resolved through formal grievance mechanisms.
54
No
Omissions
External verification
SUB-CATEGORY: Human rights Aspects Freedom of Association and Collective Bargaining
Child Labor
Form of management and indicators
Pg./Reference
DMA
60
Omissions
External verification No
G4-HR4 Operations and suppliers identified in which the right to There was exercise freedom of association and collective bargaining may be violated identified or at signifcant risk, and measures taken to support these rights. operations in 2014
No
DMA
60
No
G4-HR5 Operation and suppliers identified as having signifcant risk for incidents of child. Labor and measures taken to contribute to effective abolition of child babor.
There was identified operations in 2014
No
DMA
60
No
61
No
G4-HR 6 Operations and suppliers identified as having significant Forced or Compulsory risk for incidents of forced or compulsory labor, and measures to Labor contribute to the elimination of all forms of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor.
71
SOCIAL CATEGORY: Society Aspects
Form of management and indicators DMA
Local Communities
G4-SO 1 Percentage of operations with implemented local community engagement, impact, assessments, and development programs.
Pg./Reference
Omissions
external verification
38
Não
38, 39 and 40
Não
SUB-CATEGORY: PRODUCT RESPONSIBILITY Aspects Product and Service Labeling
Customer Privacy
Form of management and indicators
Omissions
External verification
DMA
45
No
G4 -PR 5 Resultos of surveys measuring costumer satisfaction.
47
No
DMA
45
No
There were no cases registered in 2014
No
G4 – PR 8 Total numbner of substantiated complints regarding breaches of customer privacy and losses of customer data. DMA
Compliance
Pg./Reference
G4-PR 9 Monetary value of signifcant fines for non-compliance with laws and regulations concerning the provision and use of products and services.
37
No
There were no cases registered in 2014
No
OUTROS INDICADORES RELATADOS QUE NÃO FORAM CONSIDERADOS DE ALTA MATERIALIDADE Aspects
Market Presence
Form of management and indicators
Biodiversity
External verification
52
No
G4-EC 5 Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation.
52
No
17 and 18
No
DMA
61
No
G4-EC9 Proportion of spending on local suppliers at significant locations of operation.
61
No
DMA
30
No
G4-EN 13 Habitats protected or restored.
32
No
G4-EN 15 Direct greenhouse gas (GHG) emissions (Scope1).
37
No
EMISSIONS
G4-EN 16 Energy indirect greehouse gas (GHG) emissions (Scope2).
37
No
G4-EN 17 Other indirect greenhouse gas (GHG) emissons (scope3).
37
No
Transport
G4-EN 30 Impactos ambientais referentes a transporte de produtos e de trabalhadores
37
No
DMA
41
No
G4-EN 31 Total environmental protection expenditures and investments by type.
41
No
OVERALL
72
Omissions
DMA
G4- EC 6 Proportion of senior management hired from the local community at significant locations of operation. Procurement Practices
Pg./Reference
Environmental Grievance Mechanisms
DMA
35
No
G4-EN 34 Number of grievances about environmental impacts filed, No addressed, and resolved through formal grievance mechanisms.
35
No
53 to 55
No
100%
No
G4-LA 6 Tipo de lesões e taxas de lesões, doenças ocupacionais, dias perdidos, absenteísmo e número total de mortes relacionadas com o trabalho, por região e por gênero
54
No
DMA
19
No
G4-SO3 Total number and percentage of operations assessed for risk 19 related to corruption and the significant risks indetified.
No
DMA
Occupational Health and Safety
Anti-corruption
G4-LA5 Percentage of total workforce represented in formal joint management - worker health and safety committees that help monitor and advise on occupational health and safety programs
73
Av. Professor Mário Werneck, 621 Buritis - Belo Horizonte - MG (31) 3615-7100 www.mrv.com.br
EXPEDIENT Fulfillment – Institutional Relations Board / MRV Engenharia Technical Coordination – Raphael Lafeta and Simone Maia Graphic and editorial production – BH Press Comunicação. Writing: Letícia Raquel. Graphic and diagraming project: Danilo Fonseca. Specific orcomplamentary information can be found at the website www.mrv.com.br through the Institutional Relations Board, Raphael Lafeta, email comunicação@mrv. com.br / +55 (31) 3615 – 7100.
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