Lojas Renner Annual Sustainability Report 2012 by Simone Linck

2012

Annual Sustainability Report

Contents

2012 ANNUAL SUSTAINABILITY REPORT

Message from Management

GRI 1.1 | 1.2

We have ended 2012 with a number of achievements to

2012. This unit is the first important facility in support of

celebrate and disclose. The Brazilian economy, though

our growth, and for the coming years we have already

having grown insufficiently, was much encouraged by

planned two additional distribution centers.

consumer spending during the year, which has boosted our performance. Lojas Renner was able to drive its

Another relevant project in support of our growth is the

growth in the industry further by virtue of the solid base

planning of the Shared Services Center (SCS). Created

previously built and in constant development.

in 2012, its implementation will take place over the next two years, and once concluded it will provide efficiency

An essential aspect in this regard is our attitude,

gains and a greater strategic focus. With support ac-

which is a daily practice among our staff members

tions concentrated in one sole area, our staff members

by means of our Enchantment Philosophy. Having

will be able to drive all of their efforts to the business,

the right people in the right places, always willing to

strategic goals and planned activities.

exceed, to overcome challenges and achieve excellence, enchanting everybody who participates in our

Preparing for the future is already part of our attitude

world, this is essential. This is what defines us, much

and that is why we reap good results from our work

beyond distinguishing us from our competitors, mak-

year after year. In 2012 we achieved 19.3% in sales

ing us a unique company.

growth and 20.6% in operating cash generation. On the other hand, the investments that maintained this

We also have the Lojas Renner brand, considered the

solid operation rose to R$382.3 million over the year.

most valuable in the retail trade and ranked no. 11 in

Our financial services rose by 19.0%, we obtained the

Brazil by Interbrand. A brand recognized for its close

lowest ever loss rates and increased the Private Label

relation with present-day women, providing quality and

and Meu CartĂŁo card base.

style at competitive prices. And progressively more widely known and admired by our customers, through

A further highlight of the year and worthy of mention are

the Companyâ&#x20AC;&#x2122;s ongoing expansion. We opened 35

the efforts in integrating Camicado, acquired in 2011.

stores in 2012 only, among Renner, Blue Steel and

Very much in line with the Renner attitude, it adopted

Camicado, most of these in shopping malls.

important differentials in its activities, with personalized services, a philosophy of excellence in it wares and a

This expansion, a part of the Companyâ&#x20AC;&#x2122;s growth strat-

countrywide leader in wedding lists. All of these factors

egy, is supported by other important in-house actions.

favored the acquisition of Camicado by Lojas Renner

Among these we may stress the new fully automated

and expedited the integration process now under way.

distribution center we organized in Rio de Janeiro in

The existing mismatches were already detected and

are being closely monitored by our teams. We hope to see tangible results in this operation’s synergy and efficiency during the second half of 2013. All of these advances and achievements are sanctioned by the Lojas Renner corporate governance. This responsible and transparent business management is one of our commitments, and we have therefore adopted the country’s highest level of corporate governance, and we are a part of the São Paulo Stock Ex-

Preparing for the future is part of our attitude and that is why we reap good results from our work year after year

change’s (BM&FBovespa) Novo Mercado since 2005. Through our motivation for greater and better performance, we have systematically and continuously improved our structure and practices. In this regard, we

We believe that our market will grow briskly over the

may highlight the creation in 2012 of the Audit and Risk

coming years, not merely because of the country’s

Management Committee, which jointly with the existing

economic activity and the population’s increased earn-

Sustainability and People Committees are advisors to

ings, but also due to the activity’s consolidation. This

the Board of Directors. The committees are extremely

movement in the fashion trade involves chiefly less in-

important as they allow us to detail discussions of rel-

formality and fragmentation. We have before us a very

evant Company topics and to more easily match stra-

important window of opportunity to increase business,

tegic and operating topics.

with clothing purchases in 2013 estimated by Ibope at R$129 billion.

In our relations with our stakeholders, our attitude is reflected in our Enchantment Philosophy. Through its

We will continue resilient and committed with our

exercise we are enabled to convert our customers,

growth strategy, as we are certain that it is taking us in

suppliers and staff members into true stakeholders in

the right direction, and we also envisage in the future

the Lojas Renner scenario. This Philosophy permeates

a likely leadership in the activity. Each one of our staff

our relationships and spreads out our Values and the

members, customers and stakeholders is essential to

Company’s commitments among our stakeholders.

achieve the targets that we aspire, and we trust that we will achieve them with the same determination that has

In this regard, we are fully focused on qualifying and

brought us so far.

managing our suppliers, ensuring that our sustainability vision and our defense of human rights are also adopted by the Lojas Renner value chain. Among the actions put in place to ensure this alignment are the Suppliers Relations Policy, the Suppliers’ Qualifying Program by Associação Brasileira do Varejo Têxtil (ABVTEX) and restructuring of Administration Suppliers’ Management area, started in 2011 and concluded in 2012.

José Galló Chairman

Claudio Thomaz Lobo Sonder Chairman of the Board of Directors

2012 ANNUAL SUSTAINABILITY REPORT

Report Building Process Lojas Renner submits its 2012 Annual Sus-

Some of the information shown here is differ-

tainability Report in which it discloses its

ent from that reflected in the previous report,

achievements and results to its staff members,

chiefly owing to the inclusion of Camicado’s

customers, shareholders, investors, suppliers,

social and environmental indicators, which

society, government and the press. This re-

was acquired in 2011. Should this be the

port includes Lojas Renner plus the Blue Steel

case, explanatory notes will appear in the text,

and Camicado units, as well as Instituto Lojas

tables or graphs regarding such changes.

Renner throughout the country, for the period

GRI 3.10 | 3.11

from January 1 to December 31, 2012. GRI 2.7 | With this report Lojas Renner intends above all

3.1 | 3.6 | 3.7 | 3.8 | 4.14 | 4.15

to reassert its commitment of depicting to its The annual sustainability report is published

stakeholders a story of enchantment, to share

since 2010 and serves as a communica-

achievements and to prepare continuously for

tions channel with our relationship publics,

future challenges. To this end, your assistance

and which stresses the Company’s culture,

is always important: send your queries, sugges-

achievements and differentials. In order to en-

tions and comments to relatorio@lojasrenner.

sure a relevant and transparent submission of

com.br or call (51) 3272-2577. The Sustainability

accounts, this publication adopts Global Re-

team will be pleased to provide further informa-

porting Initiative (GRI), version G3.1 interna-

tion or explanations. GRI 3.4

tional guidelines, pursuant to application level B and the criteria by Associação Brasileira

Materiality Matrix

das Companhias Abertas (Abrasca) and by

This report’s contents is a picture of the Com-

Comitê de Orientação para Divulgação de

pany’s sustainability management and focus-

Informações ao Mercado (Codim). Social and

es on 11 priority topics, jointly defined by Lojas

environmental information are currently sub-

Renner and its strategic stakeholders in 2011

mitted to external examination. Therefore, only

based on the materiality principle.

the financial statements were audited. 3.3 | 3.9 | 3.13

REPORT BUILDING PROCESS

GRI 3.2 |

GRI 3.5 | 4.15 | 4.16 | 4.17

The selection of priority topics involved sectoral

3,00

SOCIETY (EXTERNAL)

and comparative studies among companies in the fashion trade and materiality tests with representatives of our relationship publics. The materiality test started with 34 topics in line with GRI indicators and proposed as priorities by the stakeholders surveyed. The survey took the form of online questionnaires that were returned by 564 people.

2,00

The stakeholders with which Lojas Renner has relations was selected based on queries in the Company’s internal areas. Among the criteria employed for this survey, are the intensity of stakeholder relations and the impact that the latter may bring about in conducting business, as well as the influence of op-

1,00

erating activities on these stakeholders. Based on this database, Lojas Renner invited stakeholder representatives to interviews and round tables in order to discuss relevant topics and to point out concerns and suggestions to improve management. The ensuing materiality matrix was organized in two

COMPANY (INTERNAL) 0

1,00

2,00

3,00

axes. The first was external and consolidated assessments of external stakeholders and comparative and sectoral studies. On the other hand, the

Priority subject 1: Employment number of workers, turnover, benefits

Priority subject 7: Child labor or that analogous to slave labor

management assessments on the materiality test.

Priority subject 2: Training and education

Lojas Renner expects to update the matrix in 2013

Priority subject 3: Investment, purchase practices – contractual clauses regarding human rights

Priority subject 8: Products and services – impacts, reduced impacts, recovered products and packages

internal axis was based on surveys with staff members, an interview with the chairman and senior

and every two years from then on, save for significant changes in the economic or business scenario, when the survey may be held every year. Always seeking to improve its practices, the Company intends to go deeper into this commitment process, including person-to-person surveys in meetings or panels during the 2013 edition. GRI 4.16

Priority subject 4: Materials used, conservation of resources, efforts to reduce, savings in use of materials/recyclables Priority subject 5: Economic performance as created distributed value Priority subject 6: Emissions, effluents and residues

Priority subject 9: Occupational health and safety Priority subject 10: Management of impacts by Company operations on the community Priority subject 11: Diversity and equal opportunities

2012 ANNUAL SUSTAINABILITY REPORT

Commitment by Strategic Stakeholders Stakeholders

Shareholders, investors and market analysts

Customers

Professional Staff

Environment

REPORT BUILDING PROCESS

GRI 4.14 | 4.15 | 4.16

Detailing

Forms of commitment

5,549 shareholders

Management Report, Institutional Overview, Quarterly Financial Information, Shareholders' Meeting Attendance Manual, meetings with shareholders, disclosure of results, Renner Day, Investor Relations Website, Speak with IR (Lojas Renner site), Carbon Disclosure Project (CDP)

Women from 18 to 39 years in medium/high consumer classes

Enchantmeter, Lojas Renner site, Customer Assistance (through Lojas Renner site), Renner magazine, social networks and mobile application, Renner Clube das Vantagens, sponsorships in fashion and cultural events, satisfaction surveys and focal groups, Eco Estilo project, Mais Eu campaign

14,915 staff members

Ethics and Conduct Code, Renner Welcome Program, Trainee Program, Fundamental Leadership Program, Learning Managers, High Performance Group, Renner Academy, Renner University, in-company MBA, Executive Leadership Program, Internal communications channels (Canal Renner, Planeta Renner, Planeta Informa, Vitrine, Líder@Renner, Café com a Diretoria, Reunião de Ponto de Partida, Palavra do Presidente), in-house campaigns, incentive campaigns, Enchantment Stories Program, Accident Prevention Internal Committee (Cipa), SIPAT, 5S Program, HR Website, Speak to Us (through the HR Website), Relationship Guidelines, Climate Survey, 360º Assessment, Management Assessment, benefits and profit sharing

Over one thousand ton of residues gathered and correctly disposed, and 575 tCO2e neutralized

Alchemia Bio Line, Solid Residue Management program, Eco Estilo project, Greenhouse Gas Emissions Inventory and neutralizing emissions, Efficient ICO2, public registration of emissions

Stakeholders

Detailing

Forms of commitment

Suppliers

636 resale suppliers and 1,481 administration suppliers

Resale suppliers: Ethics and Conduct Code, Renner Supplier Relations Policy, Responsible Conduct Commitment Statement, Agreement, Supplier Relations Website, technical visits, audits, Crescendo Juntos program, Escola de Costura Renner program (through Instituto Lojas Renner), Administration suppliers: Responsible Conduct Commitment Statement, Agreement

Press and opinion formers

Magazines, newspapers, TV, radio, online vehicles

Renner Preview, fashion production for editorials, interviews, releases, press kit

Federal, state and municipal governments, associations with focus on business

Associations: Instituto para o Desenvolvimento do Varejo (IDV), Associação Brasileira do Varejo Têxtil (ABVTEX), Carbon Disclosure Project (CDP), Grupo de Institutos, Fundações e Empresas (GIFE), Pacto Global, Pacto Nacional pela Erradicação do Trabalho Escravo, Princípio do Empoderamento de Mulheres. Governments: Rede Parceria Social, Rouanet Law, Sports Law, Funcriança, Fundo do Idoso, clothing donations to state and municipal governments

Government and associations

Communities and social organizations

Social organizations supported by Instituto Lojas Renner and communities in which the Company is present

Announcement of support to social projects, Programa Escola de Costura Renner, Rede Parceria Social, Programa Escola de Varejo, Projeto Pescar, Rede Bom Jesus, Programa Estilo Solidário, Rede Parceria Social, Funcriança, Fundo do Idoso, Instituto Lojas Renner website and social networks

2012 ANNUAL SUSTAINABILITY REPORT

Overview

OVERVIEW

With 232 stores and over 14 thousand employees, the Company is the country’s second largest fashion retailer About the Company GRI 2.1 | 2.3 | 2.6 | 2.7 | 2.8 | 3.11 | 4.8

Renner Attitude

Lojas Renner S.A. is the second largest fash-

The Enchantment Philosophy based on three

ion retailer founded in Brazil, active in the re-

pillars (see table in page 13) goes much be-

tail trade since 1965. Known for its pioneering

yond overcoming customer expectations, it

spirit and quality, as well as for its Enchant-

permeates Lojas Renner’s relations with all of

ment Philosophy in customer assistance, it is

its stakeholders. The Renner attitude is applied

one of the fastest growing companies in its

every day by all staff members and in every ac-

field. Its background is marked by a passion

tivity, from managing human resources to the

for overcoming challenges and making things

business and operating areas, also including

happen, an obsession for growth, ethics and

support activities such as IT and Investor Rela-

entrepreneurship and respect for all those

tions. This common view of principles between

which participated in it growth.

employees and the Company is a business differential, as it ensures that efforts are placed to

The Company has been listed in the stock mar-

fulfill the Mission and Vision.

ket for 45 years and since 2005 its equity capital is widely dispersed, with roughly 100% of its

Employees are encouraged to share their en-

shares free floating in the BM&FBovespa Novo

chantment stories by means of a specific in-

Mercado. By late 2012 it had 232 stores under

ternal channel. Since this action was created,

the Renner, Blue Steel and Camicado names,

over 620 thousand stories have been received.

and three distribution centers. Among the di-

The best are selected for the “Enchantment

versity of people and styles that can be found

Stories” book, the second edition of which was

among its over 14 thousand staff members, it

published in early 2013 with 100 stories dating

is easy to recognize a feature in common: the

back to the period between 2006 and 2011.

wish to enchant and to be enchanted.

With 22 thousand copies printed, the book will be handed out to all current employees and to new ones during the integration period. The first “Enchantment Stories” edition was launched in 2006 and contained experiences by employees since the program’s beginning to 2005. Several of these stories can also be found in this report, in the course of its text.

2012 ANNUAL SUSTAINABILITY REPORT

Family Management (1912-1965)

1912 Antônio Jacob Renner,

1922 After the First World War, fashion

entrepreneur and innovator, founded a textile company in Porto Alegre (RS) and a product that made history in its day, the Capa Ideal.

and habits changed. It was under these circumstances that Renner founded his first point of sales in the capital city of Rio Grande do Sul, to sell textile goods.

The 1940s With the growing popularity of electrical appliances and the cinema’s golden age (which broadened women’s references on fashion), the Renner company expanded its product mix and became a department store.

Family and Professional Management (1965-1997)

The 1960s

The 1970s and 1980s

Early 1990s

During the period under the dominance of the spirit of liberation, with the introduction of the birth-control pill and the mini-skirt, Renner was also emancipated: in 1965 it became an independent company and two years later it went public in the Stock Exchange.

The Company opened its first branches and pioneered by opening a unit in a shopping mall and automating its stores.

A new concept marked by a reference to the beauty of top models, freedom of choice with globalization and less time available for purchases owing to increased daily working hours and traffic, led to the Company’s overall restructuring and the adoption of professional management, now operating as a department store specialized in fashion.

J.C. Penney Management (1998-2005)

Early 2000s

1998 J.C. Penney, one of the largest

Committed to developing a close relation with present-day women, the Company started to display its goods in a coordinated manner, easing choices and optimizing customer time, and tuned to the movement of universal fashion. This style was refined in 2002 with the Lifestyle concept whereby collections were according to lifestyle and composed of house brands.

retail networks in the United States, acquired Renner’s equity control in December of this year, which contributed to the Company’s large growth.

Corporation (as of July 1, 2005)

2005 On July 1st Renner became the country’s first company to have its equity capital widely dispersed, with roughly 100% of its shares free floating, following a public offering of shares owned by J.C. Penney.

OVERVIEW

2006 a 2009

2010 The co-branded

Family purchasing power is on the upswing. Renner is enabled to intensify its expansion plan and opens it first stores in the Northeastern and Northern regions, in addition to organizing its Financial Services area.

Mastercard and Visa cards were launched (the first Brazilian non-financial institution to have its private label card), e-commerce and new brands.

2011 Keeping up with women in the new millennium – who require things closer, more practical and quickly – the Company breaks a record by opening up 30 stores. The expansion strategy is driven with the opening of specialized stores, Internet sales and acquisition of the Camicado network. During the same year Renner is elected Brazil’s 11th most valuable brand by Interbrand, and the best retail trade in customer assistance by Instituto Ibero-Brasileiro de Relacionamento com o Cliente (IBRC).

TIMELINE

Renner’s background of events

1996 Inauguration of the

1997 Driven by its Enchantment

Enchantmeter in its stores in order to monitor quality in customer assistance and degree of satisfaction.

Philosophy, Renner expanded its operations by starting business in the state of São Paulo, the country’s chief business region.

Pillars of the Lojas Renner Enchantment Philosophy Investing and developing talents Staff members are being constantly prepared and encouraged to act independently, to resolve any problems right away and to ceaselessly seek to enchant customers.

Customer focus Customer purchase experience should be unique, which involves among other aspects store layout, intelligent assistance avoiding the formation of lines, displaying goods according to lifestyle for customers to easily find what they are looking for, the store’s environment and of course the Enchantmeter (read more in the chapter on Sustainability/Customer Management in page 84).

Putting the Enchantment Philosophy into practice 2012 In order to provide support to the Company’s expansion plan, the Shared Services Center (CSC) and Supply Chain projects are kicked off, with the inauguration of Rio de Janeiro’s new Distribution Center. Other highlights are the new web platform and revamping of the Cartão Renner card.

The Enchantment Stories Program acknowledges and awards staff members who practice the Enchantment Philosophy. In addition, the Company’s birthday is commemorated as Enchantment Day, when Management employees exchange their office routine for the store and experience enchantment in direct customer contact.

2012 ANNUAL SUSTAINABILITY REPORT

Mission

GRI 4.8

To be biggest and best department store in the Americas for the middle/high income consumer segments with different styles, always in the forefront of fashion, quality, competitive prices and excellence in services rendered, by enchanting and innovating.

Vision Enchanting everybody is our fulfillment.

Renner Values Enchantment is Our Fulfillment

People

We put ourselves in the place of our

We hire, develop and retain the best

for the long-term future of Renner, prin-

customers, doing everything for them

staff – staff that like people, who have

cipally through attitudes and examples:

that we would like to be done for us.

a passion for what they do and a shine

an example worths more than a thou-

We must understand their desires and

in their eyes. We work as a team and

sand words.

needs, exceed their expectations and,

our staff have the authority and respon-

so, enchant them. We are not simply

sibility to take decisions. We provide the

Determination to Achieve

employees, but rather enchanters of

same ladder to all our employees so

Exceptional Results

customers. We do not have a Customer

they can rise in the company at a pace

We are responsible for achieving results

Service Desk, because each one of us

equal to their talents, efforts and results.

– not just good ideas. Results are what

is a Customer Service Desk: there’s a problem – we solve right there and then.

guarantee our investments, give a return Owners of the Business

to our shareholders, pay our salaries

We think and act as owners of our busi-

and make our growth and long-term

Our Way

ness units, being rewarded as such.

continuity a reality.

We are a cheerful, innovative, ethical,

We have a sense of urgency, attitude

austere, open doors company where

and aggressiveness in seeking the best

Quality

communication is easy and transparent.

practices, constantly alert to all the op-

We develop and implement standards

We do things in a simple and responsive

portunities in the market. We take deci-

of excellence in all that we do, since

way, with much enthusiasm and pas-

sions, running risks with responsibility;

there is room for improvement in all that

sion. Our business is driven by persis-

we accept the errors that come from

we do. Our products and services enjoy

tence, creativity, and optimism, always

moving up the learning curve, not seek-

the highest levels of quality: this is writ-

very close to the market: we adopt a get

ing to blame but to identify causes that

ten into our DNA.

up and go attitude.

must be corrected. We are responsible

We adore challenges: impossible is not a word in our vocabulary, we just get on and do it. 14

OVERVIEW

THE BEST 2012 ENCHANTMENT STORY

Enchanting any time On August 9 I was arriving at the store for the opening and noticed a couple talking to the caretaker of the neighboring building. The caretaker asked at what time the store would open for business, and when I informed 9 AM, I saw the couple’s frustrated expression. Questioned on the reason for the inquiry, Karine explained that she and her husband Alexandre had traveled all night from São Paulo state to Belo Horizonte, as he had passed in an admission test and had arrived in the city to start working. However, when arranging their luggage in the car, they had forgotten to load Alexandre’s suitcase, whose only clothes were those he was wearing, – t-shirt and jeans – and his appointment was just one hour away. I quickly thought of a way to help this couple. I asked them to wait and went to my supervisor Luiz Eduardo, to tell him of my wish to enchant them. He readily agreed to help me. I returned to see the couple and gave them the news: we would open the store solely for them to do their shopping. Karine and Alexandre looked at each other with excitement and followed me inside the store. I took them to the Preston Field sector where they were marveled with the models and they soon selected a look for the occasion. Alexandre had to leave the store dressed, but the new shirt was wrinkled and couldn’t let him leave like that. So I decided to iron the shirt. He said that he had never expected such a special treatment, chiefly at 6 AM. Before departing, Karine thanked me and regretted that she lived in a small town where there is no Lojas Renner, and said that she would soon be back at the store.

Denize de Paula da Silva | Store inspector | Shopping Bahia (MG)

ENCHANTMENT STORIES

Market Presence GRI 2.2 | 2.3 | 2.4 | 2.7 | 2.8 Lojas Renner is the country’s second largest

Its activities focus on women from 18 to 39

fashion retailer in terms of gross billings, with

years in population’s medium/high consumer

188 Renner, 4 Blue Steel and 40 Camicado

classes. With its vocation of close relations

stores, a network acquired in May 2011. With

with present-day women and with the slogan

headquarters located in Porto Alegre, state of

“You have your style. Renner has them all.”,

Rio Grande do Sul, over 90% of its stores are in

it provides collections with the most recent

shopping malls, making life easier for custom-

fashion trends, with quality and at competitive

ers with quick access and closeness of other

prices. GRI 2.7

services. Street stores are located in central urban areas, with an expressive influence and circulation of consumers. GRI 2.7 | 2.9

2012 ANNUAL SUSTAINABILITY REPORT

Lojas Renner in Brazil

North

GRI 2.5 | 2.7

AMAZONAS PARÁ RONDÔNIA TOCANTINS ACRE

2 2 1 1 1

Northeast BAHIA PERNAMBUCO CEARÁ SERGIPE PARAÍBA RIO GRANDE DO NORTE ALAGOAS MARANHÃO

8 6 2 2 1 2 1 1

Center-West DISTRITO FEDERAL MATO GROSSO GOIÁS MATO GROSSO DO SUL

6 2 6 2

Southeast

1 1

Lojas Renner Lojas Blue Steel

SÃO PAULO 62 RIO DE JANEIRO 20 MINAS GERAIS 13 ESPÍRITO SANTO 4

South

Camicado Distribution Center

OVERVIEW

RIO GRANDE DO SUL 23 PARANÁ 13 SANTA CATARINA 10

5 3 2

2 1

21 4 2 1

1 1

Lojas Renner:

Lojas Renner markets a product mix of 25 thousand item consisting in house brands,

Brazil’s 2nd largest fashion retailer

third-party brands, licensed goods and imported goods. The 19 house brands include exclusive apparel items (with 16 brands), foot-

192 stores

wear, toiletry and beauty accessories (each one of one brand).

GRI 2.2

Among the 16 apparel house brands, 6 represent different lifestyles. Clothing, footwear and accessories are displayed in the stores grouped under specific styles: casual, young

188

look, neo-traditional, fashion or contemporary. This model created in 2002 makes selecting easier when purchasing and provides a practical and pleasant store environment. GRI 2.2 | 2.8

4.7 billion

Brazilian reais in gross revenues for 2012 Stocking the right goods, in the correct amounts and at the correct time in the right stores is a challenge overcome by the Company’s integrated and flexible logistics. In addition to the two Distribution Centers (CDs) existing in Santa Catarina and São Paulo, in 2012 Renner

20.8 million cards issued

inaugurated a new CD in Rio de Janeiro in order to comply with its expansion plan. Located in venue close to important highways and areas that concentrate suppliers, this logistics structure is supplemented by an outsourced fleet of vehicles specialized in the retail business, which is a competitive differential.

93%

of its stores in shopping malls

361.3 thousand m

is the total sales area

78 thousand m

is the total area of the three distribution centers

2012 ANNUAL SUSTAINABILITY REPORT

Diversification in specialized stores, e-commerce platform and acquisitions contributes to Renner’s growth

OVERVIEW

Ease of purchase terms and specific installment options are assured over 39 years by means of the Cartão Renner, bringing customers even closer to the Company and encouraging purchases. The creation of the Financial Services area back in 2006 intensified Lojas Renner’s activities in this field. In the course of the years, financing sales was supplemented by the provision of personal loans, insurance and capitalization bonds, by means of the Realize Soluções Financeiras brand and business partners.

Blue Steel is the first Lojas Renner house brand to have specialized stores. In 2012 a fourth pilot store was opened in S達o Paulo (three others were opened in 2011 in the cities of S達o Paulo, Belo Horizonte and Porto

e v i t i t e p m o C advantages GRI 1.2

Alegre). This model has been well accepted by customers and should be expanded in 2013 with the opening of at least ten youth fashion stores. The YOUCOM brand is scheduled for launching still this year, replacing Blue Steel as an independent company. GRI 2.2 Another Lojas Renner growth front has no frontier restrictions: the e-commerce platform was completely restructured in 2012, with a modern layout, improved browsing and the provision of online services. The product mix is at the reach of a click, easy exchanges in the physical stores, discounts and exclusive purchase terms. The same diversification and growth logic led the Company in 2012 to return to the household and decorations area, with the acquisition of Camicado in 2011. The company has the largest portfolio in this segment and a style that is in agreement with Lojas Renner: personalized assistance and a pleasant environment for it customers to experience unforgettable consumer moments. Tuned in to world trends, it has a product mix with over eight thousand items and is a leader in wedding list services. GRI 2.2

Complete apparel collections at competitive prices Coordinated and frequently renewed clothing, accessories and footwear contribute to a differentiated customer perception of Renner.

Pleasant and convenient consumer experience Brands displayed in stores according to styles make purchases quicker and more comfortable, helping customers to select the style that they wish and encouraging them to come back for new purchases.

Focus dedicated to customer assistance Cares for a pleasant purchase experience go beyond customer satisfaction, surprising and enchanting them.

A solid corporate culture Principles and value found in day-to-day routine and in each gesture by staff members are supplemented by a solid Human Resources policy, valuing a pleasant environment and a commitment with team development.

Attractive credit options Special payment terms are provided by Cart達o Renner and other market means of payment, such as cash, checks, credit cards, and are widely accepted in the stores.

2012 ANNUAL SUSTAINABILITY REPORT

Brands, Goods and Services GRI 2.2 All the brands and goods displayed in the

gether a complete wardrobe in a practical and

stores comply with the Lifestyle concept, house

quick manner, in accordance with their style.

brands meet different lifestyles and regardless of the collectionâ&#x20AC;&#x2122;s topics, trends in fashion are

The diversity in models and constant renewal

examined and adapted to different lifestyles.

of collections are also part of this enchant-

The brands displayed in a coordinated manner

ment process, embodying international fashion

in the stores is essential to ensure a pleasurable

trends adapted to each lifestyle and to the pref-

consumer experience. Customers may put to-

erences of Brazilian consumers.

The Lojas Renner range of apparel is organized into 16 house brands, and 6 of these represent different lifestyles:

Youth fashion (male and female)

Trendy Attitude Youth Connected

OVERVIEW

Casual (male and female)

Neo-traditional (female)

Casual Frugal Practical Relaxed

Sophisticated Modern Cosmopolitan Professional

Advantages of the Renner Lifestyle... ...to customers

...to the Company

Ease in selecting items

Increase in cross-sales opportunities

Better use of purchase time

Greater inventory turnover without overlapping of goods

Store with goods for the entire family Display of footwear and accessories to complement each style

Less need to reduce prices Opportunities for increased margins

PREVIEW RENNER

Neo-traditional (male)

Tailor-made Traditional Classic Tidy

Fashion (female)

Youth Sensual Fashion Sociable

Contemporary (male)

Tuned Modern Contemporary Urban

2012 ANNUAL SUSTAINABILITY REPORT

Alchemia Bio line goods reflect concern with the environment Among other house brands, Alchemia is the Companyâ&#x20AC;&#x2122;s perfume and toiletry brand, with a portfolio for a complete beauty ritual to bring about well being and self-esteem in women. There are 86 items in this line, in addition to limited editions for commemorative dates and coordinated with apparel brands intended chiefly fort customers between 26 and 45 years. Fine perfumes are inspired by the Alchemia Notes line, developed by international specialists in perfume and consisting in three perfumes, which combine with three apparel Lifestyles. Besides being sophisticated, the proposal is practical: the perfumes come in 20 milliliter flasks â&#x20AC;&#x201C; small, delicate and ideal for carrying in the purse.

OVERVIEW

On the other hand, Alchemia Bio is a distinc-

Personal loans: available since 2006, these

tive line with a touch of sustainability. All of its

are one more example of Lojas Renner’s willing-

goods reflect the concern with the environ-

ness to provide convenience to its customers,

ment when they were created with natural

by meeting their specific needs of small sums.

plant ingredients, with bio-degradable for-

The source is a master agreement with Finan-

mulas and packaged in recyclable materials,

ceira Alfa S.A. and they are provided through

with water-based dyes and Forest Steward-

the Realize Soluções Financeiras brand.

ship Council certification. These goods are not tested on animals. GRI EN6

Insurance: Jointly with Porto Seguro S.A., there are a number of classes such as con-

The target public are mindful women who de-

sumer credit insurance, unemployment, per-

fine their choices to make themselves feel well

sonal loan, card loss and theft, and Seguro

and to benefit society and the environment.

Pessoal Viver Bem. Available in the store net-

There are 17 items dedicated to women’s mo-

work, the policies entitle holders to participate

ments of well being and beauty, including exfo-

in draws for capitalization bonds by means of

liants, moisturizers, body oils, liquid soap and

the Federal Lottery.

invigorating fragrances. In 2012 a special home line was launched and in 2013 a new refreshing

Capitalization bonds: in a partnership with

fragrance, Verbena, was launched.

Icatu Seguros, these have a 60-month effective period. Customers save from R$40 to R$400

Financial Services GRI 2.2

per month during 12 months, in addition to run-

Cartão Renner: for 39 years a part of every-

ning in weekly draws of as much as R$1 million.

day life by customers, this card provides five

www.clubedevantagensrenner.com.br/

interest-free installment payments or 8 interest-

Camicado

bearing installments. With it, the Company re-

Camicado is a leading company in Brazil in

mains even closer to its customers by providing

wedding lists and has a complete household

an increase in the number of purchases and the

and decorations product mix. There are a

sum spent in fashion, by virtue of the distinctive

number of items in the bedroom, tableware,

payment terms and participation in the Renner

bath, household utensils and appliances lines,

Clube de Vantagens (Advantages Club).

among which exclusive items. With 40 stores and one distribution center in São Paulo, the

Meu Cartão: launched in 2010 jointly with

company has a market differential in its excel-

Mastercard and Visa, this card issued by

lent customer assistance and the pleasant en-

Renner Administradora de Cartões de Crédito

vironment in its stores, which provide a plea-

is one further differential. It is accepted in Lo-

surable consumer experience to customers.

www.camicado.com.br

jas Renner, Blue Steel, Camicado and every store that accepts credit cards, and provides payment options such as invoices or booklets.

2012 ANNUAL SUSTAINABILITY REPORT

Corporate Governance

CORPORATE GOVERNANCE

Lojas Renner belongs to the BM&FBovespa Novo Mercado and has 100% of its equity capital widely dispersed Relations based in ethics and respect, this proposition

Instituto Brasileiro de Governança Corporativa (IBGC).

served as guidance to Lojas Renner ever since its first

Moreover, it is a part of the São Paulo Stock Exchange’s

years of activities and has let its imprint in its business

(BM&FBovespa) Novo Mercado, which includes compa-

governance. Always seeking to exceed and to serve as a

nies with Brazil’s highest governance level, besides a

reference, the Company has refined its practices in this

number of market ratios (read more in the table).

field since 1967, when it became a public company in the Stock Market. In 2005 Lojas Renner had its equity capital

A number of policies and guidelines ensure dissemina-

widely dispersed and became the country’s first company

tion of a transparency, financial discipline, internal control

with roughly 100% of its shares free floating.

and professional culture in its stakeholder relations. These guidelines are based on Corporate Foundations and con-

The Company systematically adopts transparency, equal-

tribute to apply Values on employees’ daily routines. All

ity, accountability and responsibility principles from

of these differentials are shown in the topic that follows.

Number of shares

% of equity capital

17,858,786

14.38

BlackRock Inc.

8,999,153

7.25

TRowe Price

6,872,800

5.53

Schroder Investment Management Limited

6,167,300

4.97

Other

84,272,026

62.52

Total

124,170,065

100.00

Equity breakdown on Dec. 31, 2012 (shareholders with over 5% of Company shares) Aberdeen Asset Management PLC

2012 ANNUAL SUSTAINABILITY REPORT

The Code of Ethics and Conduct is a reference for sustainable management

Corporate Governance Practices GRI 4.9 | 4.11 The Code of Ethics and Conduct Each staff member’s conduct is guided by the Code of Ethics and Conduct Created in 2009, it is a reference in the ethical and sustainable management of business, which stresses the Company’s commitment in establishing real partnerships when addressing staff members, suppliers, customers, government, society, the community and shareholders. The Code’s review is scheduled for 2013, making it the sole guideline for Lojas Renner, YOUCOM and Camicado. Disclosure Policy Defines guidelines that ensure disclosure of consistent and equalitarian information in line with best corporate governance practices and trans-

CORPORATE GOVERNANCE

parency, and in compliance with provisions in Brazilian legislation and those by Comissão de Valores Mobiliários (CVM). Based on this policy, the Investor Relations area defines relationship practices with the capital market. Relevant Event Disclosure Policy Aspects that materially affect business, such as Shareholders’ Meeting resolutions and those by governance bodies, and exceptional

Key Corporate Governance Practices

political or financial and economic conditions, should be informed quickly and clearly to the market. The Relevant Event Disclosure Policy

Novo Mercado

ensures that this should occur, when it defines

100% free float

rules and criteria for this kind of situation. The Investor Relations area is responsible for implementing these guidelines. Arbitration Clause Arbitration Chambers are a much more agile mechanism to resolve conflicts than lawsuits in a common court of law. A number of legal provisions and market entities regulate actions by these Chambers. The Lojas Renner Bylaws provides for adopting this mechanism, by means of the Novo Mercado Arbitration Chamber, which fact provides greater reliability and peace of mind to shareholders. Financial Management Policy A Financial Policy is being prepared for the subsequent approval by the Board of Directors, formalizing guidelines that will protect the Company’s income figures and assets. Once it is approved, this document will reinforce the Renner culture regarding responsibility and concern in managing liquidity and loans, with a view to preserving the financial health of

Majority of independent board members (75%) Board of Directors Committees Management Committees Different executives in the office of chairman of the Board Permanent Board of Inspectors Manual for Attendance at Shareholders’ Meetings Share Options Purchase Plan Internal regulations for Boards and Committees Formal assessment of the Board of Directors Secretaries for Boards and Committees Board of Directors Website Reporting channels

business and improving practices and procedures in this regard.

2012 ANNUAL SUSTAINABILITY REPORT

Governance, Risk and Compliance Policy With publication expected for 2013, a resolution by the Companyâ&#x20AC;&#x2122;s Executive Committee, the Audit and Risk Management Committee and the Board of Directors is being reviewed. This policy will cover the Governance, Risk and Conformity (GRC) model, detecting opportunities for gains and reducing the loss likelihood and/or impact. By exceeding compliance with regulatory requirements, this model will support decision making by the executive committee in order to progressively improve the Companyâ&#x20AC;&#x2122;s performance. GRI 4.9 Information Security Policy

Policies and guidelines ensure a culture of transparency

CORPORATE GOVERNANCE

Information is a highly valuable asset, which should be employed and protected appropriately. Lojas Renner has an Information Security Policy (PSI) since 2009, with the most recent update going back to 2012. The PSI is intended to protect the confidentiality, integrity and availability of information against a number of different threats, minimizing risks and ensuring business continuity.

Sustainability Policy

Audit Policy

DMA EN

DMA HR | DMA SO

Under study by the Sustainability Committee

The Audit Policy lists the objectives, attributions

for the subsequent examination by the Execu-

and scope of the Internal Audit department. Lo-

tive Committee and the Board of Directors, the

jas Renner is backed by an internal audit struc-

Sustainability Policy will provide guidelines for

ture and an external audit firm, both of which

managing environmental indicators, sustain-

act independently and are accountable directly

ability commitment by suppliers and improved

to the Audit and risk Management Committee.

relations with staff members and communities.

The Company extends its concern with this veri-

The policy enhances the Companyâ&#x20AC;&#x2122;s vision of

fication to its suppliers, holding regular audits on

the future, acting currently in order to grow

topics such as social responsibility, process and

more and more in the fashion market.

sub-contractors (read more in the Sustainability/ Supplier Chain Management chapter).

GRI 4.11

Supplier Relations Policy DMA HR | DMA SO

Reporting and Opinion Channel

To encourage sustainability in the supply chain,

Renner asserts its commitment with the search

avoid conflicts of interests and define limits and

for excellence and transparency with its stake-

criteria for a fair selection of suppliers. These are

holders, by maintaining a specific channel for

a few of this policyâ&#x20AC;&#x2122;s objective principles that

anonymous and confidential reporting of inap-

govern the relationship with suppliers, in par-

propriate situations related to bookkeeping and

ticular during the selection process. Conformity

non-bookkeeping aspects, loss prevention,

reduces risks for Lojas Renner, creates benefits

human resources, legal topics, compliance and

for the area and stresses responsibility and

ethics. The competent areas are activated to

transparency in management. Renner also relies

take the required steps. This channel is open to

on the Lojas Renner Suppliersâ&#x20AC;&#x2122; Manual and the

everybody and may be accessed for:

GRI 4.4

supplier relations guide.

Non-bookkeeping topics: 0800 702 0130 (Lojas Renner) and 0800 077 0077 (Camicado) Bookkeeping topics: 0800 702 0740 (assistance is provided by the Audit Manager or electronically, not allowing tracing the call or the reporting party)

Correspondence (care of the loss prevention manager for nonbookkeeping topics, or the audit manager for bookkeeping topics): Lojas Renner S.A. Avenida Joaquim Porto Villanova, 401 Postal Code 91410-400 Jardim Carvalho Porto Alegre (RS) | Brasil

denuncia@lojasrenner.com.br and denuncia@camicado.com.br

2012 ANNUAL SUSTAINABILITY REPORT

Commitments Assumed Target

Stakeholder

Performance 2012

Commitment 2013

Shareholders and investors

Achieved Operations begun on Aug. 27.

Stabilizing and migration of a larger amount of items (1000% increase) to this unit.

Inauguration of 30 stores, chiefly in the states of São Paulo and Rio de Janeiro, and Northern and Northeastern regions

Shareholders and investors

Partial 24 stores were opened, in compliance with geographical priority. The greatest difficulty was the postponing of shopping malls.

Opening 26 new Renner stores and at least 10 Blue Steel stores.

Monitoring performance of three Blue Steel pilot stores

Shareholders and investors

Achieved Besides the three pilot stores in activity, Renner inaugurated the fourth specific Blue Steel store.

Rollout and development of the youth fashion chain with a new banner.

Customers

Not achieved The item’s average price was much above that of other t-shirts of the same brand.

Development of a product line with organic certification (including organic cotton) for launching in 2014.

Customers

Achieved The satisfaction rate of very satisfied or satisfied customers in the Enchantmeter survey was 96.6%.

Maintaining the rate of very satisfied or satisfied customers above 96%.

Customers

Achieved On average 99.4% of outstanding tickets in the channel were answered within 72 hours.

Maintaining 2012 performance, monitoring commitment of employees in charge of managing the Speak to Us program by concluding tickets.

Staff Members

Achieved The course was launched and included in the integration program for the Procurement area’s employees.

Continuity of the virtual course in the Renner Academy and University.

Inauguration of a new distribution center in Rio de Janeiro with a total area of 50 thousand square meters

Launching of an organic cotton t-shirt line of the Blue Steel brand

Raising the level of customer satisfaction

Committing 85% of employees in charge of managing the Speak to Us program to meet the customer reply maximum term of 72 hours

Launching of virtual course for the Procurement division on the Supplier Relations Policy

GRI 4.17 | SO1 | DMA SO

CORPORATE GOVERNANCE

Stressing its transparency in accountability and the ongoing search for greater and better performance, Lojas Renner discloses in its Sustainability Report every year the targets and commitments assumed by the Company. The following is a description of the performance and outlook for the targets mentioned in the 2011 report.

Target Development of a course on the Consumer Defense Code for store employees

Holding of virtual training for cashiers to detect counterfeit bills

A 5% reduction in the occupational casualty and illness rate

Holding of awareness campaigns in diversity and actions to prepare staff members to receive and live with diversity in the work environment

Working jointly with suppliers in order to improve production and subcontractors and to seek approval in the Retail Suppliers Qualification Program

Having 100% of São Paulo suppliers qualified by the end of the year in the Associação Brasileira do Varejo Têxtil (ABVTEX) program

Stakeholder

Performance 2012

Commitment 2013

Staff Members

Achieved The course was provided for all Renner stores and held for 540 employees.

A 50% increase in the number of participants.

Staff Members

Partial The contents were defined but the course is still to be developed.

Disclosure of course in the first half of 2013.

Staff Members

Not applicable Changes in the calculation methods of these rates from 2011 to 2012 made comparisons difficult.

A 5% reduction in the occupational casualty and illness rate.

Staff Members

Partial Five of the nine regional areas held the training course for Godparents of Diversity and trained 80 godparents.

Training of Godparents of Diversity in all the regional areas and ensure the preparation of every employee, in particular in administration, to encourage diversity.

Resale suppliers

Achieved Two live events were held focused on an Associação Brasileira do Varejo Têxtil (ABVTEX) program, with resale and apparel suppliers, in addition to visits to resale suppliers, guidance by email and notices on the program and its merits.

Maintaining visits to apparel resale suppliers and monitoring qualification of the latter and pending subcontractors.

Resale suppliers

Achieved In São Paulo, 69 apparel resale suppliers were qualified (100% of this state's active suppliers) concluding a commitment process started in 2010.

Maintaining Supplier qualification in the state of São Paulo and expanding it to 100% of suppliers and subcontractors in other states in Brazil.

2012 ANNUAL SUSTAINABILITY REPORT

Target

Ensuring that suppliers exempt from ABVTEX social responsibility audits should hold process audits by an external firm based on three criteria: purchase volume, score obtained and date of last audit

Maintaining a specific social responsibility audit in workshops

Monitoring pre-selected supplier performance by means of the Supplier Performance General Indicator (IDGE), which embodies in its score 25% in social responsibility

Developing a ratification process for suppliers of consumables

Increasing by 30% the amount of recycled residues

Increasing by 20% the collection of residues in the EcoEstilo project

CORPORATE GOVERNANCE

Stakeholder

Performance 2012

Commitment 2013

Resale suppliers

Achieved 138 resale suppliers held a process audit during the year, of which 105 were Approved, 29 Approved with Restriction and 4 Failed. The latter are blocked in the Renner system and cannot receive new orders.

Maintaining the 2012 target â&#x20AC;&#x201C; audits comply with the Lojas Renner Supplier Audit Policy.

Resale suppliers

Achieved During the year 290 workshops were audited, 50 more than in 2011.

Audits in 670 workshops, covering 100% of those in the state of SĂŁo Paulo and 25 located in other states in Brazil.

Resale suppliers

Achieved The 25 strategic suppliers selected in 2011 (based on significance of purchase volume) were monitored and reflected IDGE progress from 21.09 points in January to 22.05 at the year's end.

Expanding IDGE monitoring to 30 suppliers.

Administration suppliers

Partial Process defined based on technical, commercial and social and environmental assessment metrics for suppliers. The GFA held discussions on scale for 2013, resulting in R$4.7 million in reductions with ratified suppliers.

Developing new suppliers and implementing performance assessments for non-resale suppliers.

Environment

Partial Lojas Renner obtained an 18% increase in residues sent to recycling.

Increasing by 10% commitment by stores in the Solid Residue Management Program.

Environment/ Customers

Achieved Awareness campaigns and the increase in numbers of stores contributed to achieve the target.

Increasing by 10% the collection of residues in the EcoEstilo project.

Target

Stakeholder

Performance 2012

Commitment 2013

Environment

Partial The program was developed and is in the internal approval stage for future implementation.

Putting the program into practice.

Environment

Not applicable The inclusion of Camicado in the 2012 greenhouse gas emissions inventories did not allow a comparison of performance from 2011 to 2012 â&#x20AC;&#x201C; due to the difference in emissions standards from one year to the other.

Based on the results of the 2012 inventories, we will maintain the 2% reduction target for the performance indicator (emissions per mÂ˛ of sales area).

Environment

Not applicable Owing to changes in the logistics of goods with the new Rio de Janeiro distribution center, and the inclusion of Camicado in the GHG emissions inventory, it was decided not to work in 2012 with logistics operators before stabilizing routes and suppliers.

Developing a management plan for GHG emissions.

Community

Partial 3 Sewing Schools were added and 849 women were trained.

Maintaining 3 units and opening 6 new ones (4 of which being opened), and training 1000 people.

Supporting at least one job and income creation project in each of the states where Lojas Renner has stores, through Instituto Lojas Renner

Communities and social organizations

Partial Instituto Lojas Renner supported projects in 17 states and in Brasilia, and had no project enrollment in other states where the Company is active.

Improving performance of projects supported by Instituto Lojas Renner, working in a proactive manner and proposing new units of Escola de Varejo and Escola de Costura.

Placing 100% of Projeto Pescar pupils in the labor market, preferably in Lojas Renner, or motivating them to enroll in the university

Community

Achieved 100% of young employees.

Maintaining training of 100% of young people for the Lojas Renner units.

Developing a specific residue management program for refurbishing of stores

Reducing emissions in the performance indicator (emissions per mÂ˛ of sales area) by 2%

Maintaining actions focused on logistics operations

Having 10 Sewing Schools and training 800 people by the end of 2012

2012 ANNUAL SUSTAINABILITY REPORT

Governance Structure

GRI 4.1 | 4.7 | 4.10

Renner’s governance structure is based on clearly defined composition attributions and criteria, in which each body works with a view to ensure the Company’s sustainability and value creation for shareholders. The governance body is highly qualified and broadly experienced in the market in order to define strategies and ensure the Company’s good performance regarding social, environmental and social and economic aspects. To read more on qualifications, see the Reference Form in www.lojasrenner.com.br/ir.

Shareholders’ Meeting

Board of Inspectors

Board of Directors People Committee

Sustainability Committee

Audit and Risk Management Committee

External Audit Internal Audit Compliance

Chairman

Loss Prevention

Administration and IR Officer

HR Officer

Procurement Officer

Executive Group

CORPORATE GOVERNANCE

IT and Management Officer

Operations Officer

Shareholders’ Meeting GRI 4.4 | 4.7 | 4.9 | 4.10 The Shareholders’ Meeting is an important corporate governance instrument and defines, among others, the election of Board of Directors

The Boards

GRI 4.2 | 4.3 | 4.7 | 4.10

and Board of Inspectors members, allocation of the fiscal year’s profits and dividends payouts.

Board of Directors

The Common Shareholders’ Meeting is held

The Board of Directors provides guidance for

once per year and its resolutions depend on the

business strategy, elects and monitors the

absolute majority of votes. Every shareholder

Executive Committee, decides on calling the

has equal voting rights.

Shareholders’ Meeting and defines and selects independent auditors. All of these func-

Lojas Renner practices for calling this meeting

tions are intended to preserve a body inde-

exceeds legal requirements. Besides calling them

pendent from executive activities to guide the

from 30 to 45 days in advance – the legal require-

Company’s strategy in the long run and ensure

ment being 15 days – the Company provides a

the working order of the management control

Shareholders’ Meeting Attendance Manual. The

and accountability mechanisms.

manual provides guidance for attendance by shareholders, describing the topics subject to

Its regulations provide for holding at least six

resolution and anticipating explanations.

meetings per year. Nonetheless, this body met 13 times in 2012 and closely monitored the

The manual also contains a draft of a power-of-

company’s management.

attorney, in case a shareholder should need to appoint a representative. This publication was

Currently six of its eight members are inde-

a market pioneer in 2006, clearly demonstrat-

pendent. This presence of board members

ing the desire to exceed shareholders’ expecta-

not related to the Company is highly relevant

tions. Its creation led to Lojas Renner’s acknowl-

in avoiding conflicts of interest and in allow-

edgement in 2007 by means of the Corporate

ing a diversity of visions and contributions to

Governance IBGC Award.

the Board’s activities. Also in line with good market practices, the chairman of the Board of Directors cannot accrue the office of CEO.

The Board of Directors has six out of eight independent members 2012 ANNUAL SUSTAINABILITY REPORT

Board of Directors Members on December 31, 2012 Name

Age

Office

Date of first election

Claudio Thomaz Lobo Sonder*

Chairman of the Board of Directors

04/02/2007

Egon Handel*

Vice Chairman of the Board of Directors

04/30/1991

José Galló

Board Member

04/26/1998

Pedro Pezzi Eberle*

Board Member

04/02/2007

Deborah Patricia Wright*

Board Member

03/31/2008

José Carlos Hruby

Board Member

04/11/2011

Flavia Buarque de Almeida*

Board Member

10/26/2011

Osvaldo Burgos Schirmer*

Board Member

04/20/2012

* Independent member.

The committees that advise the Board contribute for discussions to be more greatly focused and structured. Hence, the interface between strategic and operating topics is better coordinated, as each committee specializes and refines discussion on topics such as management, contributing to excellence in governance practices. The Audit and Risk Management Committee was created in 2012, which expedites discussions on related subjects and provides guidance to internal and external audits and the Compliance area. In addition to this one, the Company has a People Committee and a Sustainability Committee.

Committee Members on December 31, 2012

Audit and Risk Management Committee

Osvaldo Burgos Schirmer (chairman), José Carlos Hruby and Flavia Buarque de Almeida

People Committee

Egon Handel (chairman), Pedro Pezzi Eberle and Claudio Thomaz Lobo Sonder

Sustainability Committee

Deborah Patricia Wright (chairwoman), José Carlos Hruby and Clarice Martins Costa

CORPORATE GOVERNANCE

Board of Inspectors

GRI 4.6

The Board of Inspectors is one more monitoring instance for the Company’s management, with the chief purpose of ensuring the ethical conduct of business and the scope of the established plans. It is bound to report its activities to the Shareholders’ Meeting, and in order to inspect other governance bodies it cannot be formed by Board of Directors members, Executive Committee officers or other Renner staff members. It met nine times during 2012.

Board of Inspectors Members on December 31, 2012 Name

Age

Office

Date of first election

Francisco Sérgio Quintana da Rosa

Chairman of the Board of Inspectors

09/01/2005

Helena Turola de Araujo Penna

Board Member

09/01/2005

Isabel da Silva Ramos Kemmelmeier

Board Member

03/21/2006

Ricardo Gus Maltz

Substitute

04/22/2010

João Luiz Borsoi

Substitute

04/15/2009

Roberto Frota Decourt

Substitute

04/22/2010

Executive Officers serve as examples in encouraging Renner Values

Executive Committee The Executive Committee is empowered to manage the Company. Much more than defining plans for putting in practice the guidelines established by the Board of Directors, it works very closely with staff members. The executive officers are accessible and promote Renner Values by means of examples. Hence, they are the first ones to do their best for the Company to achieve everything that it has planned. As in the Board of Directors, the Executive Committee is advised by committees that qualify resolution and expedite decision making. Currently there are the following Committees: Losses, Real Estate, Corporate Ethics and Executive.

2012 ANNUAL SUSTAINABILITY REPORT

Breakdown of Executive Committee on December 31, 2012 Name

Office

Age

José Gallo

Chairman (since 1991)*

Clarice Martins Costa

Human Resources Officer (since 2006)

Haroldo Luiz Rodrigues Filho

Procurement Officer (since 2008)

Paulo José Marques Soares

Operations Officer (since 2010)

Adalberto Pereira dos Santos

Administration and Financial Officer (since 2010)

Emerson Silveira Kuze

Information Technology Officer (since 2012)

* Elected Lojas Renner’s superintendent on September 30, 1991 and elected CEO on March 15, 1999.

Management Compensation GRI 4.5 The Company’s compensation is based on the

On the other hand, the Executive Committee’s

following assumptions: the creation of sustain-

compensation is defined by the Board of Direc-

ability and long-term values, business goals and

tors supported by the People Committee, the

strategies, best market practices, Vision, Mis-

floating portion is directly related to achieving pre-

sion, and Renner Values. These foundations are

viously established goals, and total compensation

intended to ensure a policy to attract profession-

also includes a benefits package and the Stock

als with competencies and values in line with the

Option Purchase Plan. Hence, compensation for

Company, and to motivate them to develop their

performance by executive officers is closely relat-

careers in recognition of individual performance.

ed to the objectives created for the year (goals) as well as longer term ones (action plan). The Board

The Board of Director members’ compensation

of Inspectors members have a fixed compensa-

includes a fixed portion that is competitive with

tion base on that of executive officers.

market practices and a floating portion, encouraging their effective participation.

Shares in possession of Renner board members and executive officers on December 31, 2012 Board of Directors Executive Committee Board of Inspectors

Total

CORPORATE GOVERNANCE

Number of shares

% of equity capital

76,001

0.06

407,000

0.33

0.00

483,001

0.39

Renner seeks the creation of sustainable and long-term value To read more on Lojas Rennerâ&#x20AC;&#x2122;s corporate governance bodies, such how it operates and breakdown, see the Reference form and the By-laws at

www.lojasrenner.com.br/ri

www.lojasrenner.com.br/ir.

Strategy and Management

GRI 1.2 | 4.7 | 4.10

Committed to constantly overcoming chal-

the Internal Audit, Compliance and Loss Pre-

lenges and achieving exceptional outcomes,

vention areas, the Company retains external

Lojas Renner devises its strategies in line with

audit services. All the efforts in order to detect

the Values and principles that served to guide

and mitigate risks likely to harm Lojas Renner

it throughout its existence. Simplifying opera-

are coordinated by the Audit and Risk Man-

tions, valuing its internal stakeholders, training

agement Committee, created in 2012.

new leaders, adjusting to consumer requirements in order to enhance the purchasing ex-

Prosperity of Company business depends on

perience, strengthening the supply chain and

consumersâ&#x20AC;&#x2122; buying power. Hence, market risks

increasing productivity are some of the Com-

likely to affect the pace of the economy and

panyâ&#x20AC;&#x2122;s objectives.

availability of income by the population, are the most relevant to management. These include,

Risk Management

GRI 1.2

for example, instability in the Brazilian reais vs.

A cross-functional structure is in charge of risk

US dollars exchange rate, restrictions on over-

management at Lojas Renner. In addition to

seas remittances, government interference in

2012 ANNUAL SUSTAINABILITY REPORT

the domestic economy that may upset vari-

stakeholders; creation of open conflicts (with

ables such as interest rates, inflation and taxes,

customers, officials, suppliers, journalists,

changes in regulations for extending credit,

community, investors, etc.); exposure of con-

among other.

tradictions between Values and a practical stance; financial losses; depreciation of assets

In 2012 the Information Security (IS) area was

and of shares; lawsuits claiming indemnities.

restructured and assumed a managerial position in the Company, with structure apart from

Business Continuity Management

the Information Technology area. The IS area’s

GRI EC2 | DMA EC

mission is to protect company information, man-

Business Continuity Management (GCN) is dedi-

aging security risks by maintaining them within

cated to detecting potential threats to the avail-

acceptable levels.

ability of the Company’s operating processes and the likely impacts on business should these

Crisis Management

GRI 1.2 | 4.11

threats become reality, and the definition of con-

The Communications in Crisis Situations Manual

tingency strategies and monitoring of the Busi-

defines processes for Lojas Renner to preserve a

ness Continuity Plan’s (PCN) effectiveness.

responsible posture in crisis situations, in particular with regard to its positioning with the press. This

The PCN was devised based on the Business

attitude stresses the application of Values in day-

Impact Analysis, which relates the financial im-

to-day life and reduces any likely friction in its repu-

pact per hour of downtime to each business

tation and relations with publics of interest. This

process. The calculation included the value of

document was devised jointly by the Corporate

compensation, costs and benefits per area and

Marketing the press relations areas, with involve-

in some cases the image value and percentages

ment by other departments, among which Loss

regarding non-compliance fines. The plan pro-

Prevention, Procurement, Legal Counsel, Human

vides for actions to ensure the continuity of op-

Resources, the Controller, Financial Services, Infor-

erations, should employees not be able to use

mation Technology, Information Security, Logistics,

the Company’s headquarters owing to physical

Administration Suppliers’ Management, Investor

access restrictions, lack of electricity (blackout)

Relations and Architecture and Engineering.

or adverse weather conditions.

This manual’s printed version is handed out

Furthermore, the Information Technology area

to each manager when inaugurating stores.

has a disaster recovery environment dedicated

Should a crisis situation occur, the Commu-

to the data center, which includes two data cen-

nications in Crisis Situations Committee is

ters located in different spots and that replicate

in charge of devising the strategy, response

the Company’s critical services. A testing and

and positioning. Among the risks that Lojas

simulation routine is under implementation in

Renner may seek to mitigate with this model

order to ensure this plan’s efficacy, pursuant to

are listed: upsetting of the corporate image

practices required by the Company’s PCN.

and reputation, discredit to the Company and to it spokespersons before its strategic

CORPORATE GOVERNANCE

Fighting Corruption and Money Laundering GRI HR3 | HR6 | HR7 | HR8 | SO2 | SO3 | SO4 | DMA HR | DMA SO

Lojas Renner rejects any practices contrary to

Besides receiving a copy of the Renner Code

legislation in force and to good market prac-

of Ethics and Conduct on being admitted, em-

tices. In order to fight corruption and money

ployees are submitted to virtual courses that

laundering, the Company is always concerned

stress Values and the responsible conduct

in detecting and mitigating factors that facilitate

expected by the Company. In 2012, Lojas

criminal practices. To this end, it discloses ethi-

Renner staff members trained in the Renner

cal conduct standards and provides specific

Code of Ethics and Conduct virtual course

training to it staff members, confirm custom-

rose to 79% of the body of staff members.

er documentation and monitors operations. Should it detect a risk situation, the Compli-

In 2012 Lojas Renner also held the Ethics and

ance area will investigate and submit results of

Fraud Workshop, involving 21 leaders. The

this examination to senior management.

choice of public was based on the understanding that the Renner Leader is the chief

The ConheĂ§a seu Cliente (Know your Cus-

person responsible for promoting ethics in the

tomer) practices with this purpose deserve to

work environment and for caring for Company

be mentioned in the internal control structure,

resources, serving as an example for all other

which since its acceptance and in the course

employees. Aspects were discussed during

of entire customer relationship, have allowed

the workshop such as the concept of ethics

Lojas Renner to know this customer well, if he/

and its relevance to the Company, the im-

she is conformity with legal requisites and may

portance of Renner Leaderâ&#x20AC;&#x2122;s ethical attitude

be of any risk.

in detecting and reducing fraud. This training course will have new groups every year.

Virtual courses on Code of Ethics principles and anti-corruption aspects

2012

2011

2010

Code of Ethics

Loss Prevention

Prevention of Money Laundering

Code of Ethics

Loss Prevention

Prevention of Money Laundering

(% of employees trained compared to the target public)

Managers (managers and supervisors)

Non-managers (other staff members)

2012 ANNUAL SUSTAINABILITY REPORT

Intangible Assets

Intellectual Property

Managing Lojas Rennerâ&#x20AC;&#x2122;s intangible assets is

Right people in the right places, passionate over

highly valuable, as it involves aspects inherited

what they do and acknowledged for their distinc-

from the founder and strengthened in the course

tive performance. With this strategy, Renner se-

of almost one century. This is the outcome of an

lects and retains talents and provides everybody

impeccable background of daily practicing the

with the same opportunities for them to grow and

Values and the Enchantment Philosophy.

develop themselves apace with their efforts and achievements. All the people management prac-

The Strength of the Brand

tices are described in the Sustainability/Employee

Acknowledged by its stakeholders for being tu-

Management chapter.

ned to fashion trends, for having a close relation with modern women, and transparent in all of its

Technology and Innovation

relations, the Renner brand depicts the concept

Lojas Rennerâ&#x20AC;&#x2122;s operations depend on the

of enchantment. Lojas Renner is constantly lis-

functionality and operating stability of tech-

ted in Top of Mind surveys and has a respectful

nological systems employed at the points of

background, rejecting any non-compliant prac-

sales, in the logistics area and in communi-

tices in connection with human rights related to

cations, besides specific applications for in-

forced or child labor in its operations.

ventory control and the creation of commercial and financial performance reports. In the course of recent years, the Company invested in improvements and put in place new information technology systems and equipment, required to develop the business.

CORPORATE GOVERNANCE GOVERNANĂ&#x2021;A CORPORATIVA

Global Pacts and Actions GRI 4.12 In 202 Lojas Renner decided to undersign the

child or forced labor in its operations and those

Women’s Empowerment Principles (UN Wo-

of its suppliers and sub-contractors is provided

men), the United Nations Organization Global

for in the Code of Ethics and Conduct.

Pact (UNO) and the National Pact for Eradicating Forced Labor, all of which formalized in

During the same year Lojas Renner participa-

2013. This decision was taken following a reso-

ted in the Rio+20 Conference’s Major Group,

lution by the Board of Directors and reflects the

in discussion groups on the empowerment

Company’s convictions in the light of its commit-

of women. This participation is related to the

ment with sustainable business management.

Company’s long-ago commitment with this topic, whether through the activities by Instituto

To Lojas Renner, in addition to being its pre-

Lojas Renner or by adopting the Women’s Em-

ferred public, women are essential in the for-

powerment Principles.

mation of society, reference in the behavior and conduct of people. Therefore, the ever greater

Participation in Associations

inclusion of women in economic activities is an

Instituto para Desenvolvimento do Varejo

essential condition for creating strong econo-

(IDV): has as its key purpose the contribution

mies, defining more just societies and achieving

to sustainable development of the Brazilian

development goals, sustainability and human

economy and the ethical and formal retail ac-

rights. In this regard, formal concurrence with

tivity. To this end, IDV represents in society 37

the Women’s Empowerment Principles stres-

retail companies in different activities, taking

ses the Company’s culture and is very closely

part in discussions with the public authorities,

related to its strategy.

and also prepares studies and proposals to

GRI 4.13

improve efficiency in the sector. The relation The Global Pact is a voluntary action that pro-

between Lojas Renner and IDV dates back to

vides guidelines to encourage sustainable

2004, when José Gallo, the Company’s chair-

growth strategy and citizenship by means of

man, was active as one of the entity’s foun-

leaders committed with ten principles. Its gui-

ders. The organization is one of the represen-

delines are in line with the Company’s attitude

tatives of the retail textile business. In 2012,

and practices, including among others, topics

the lack of adoption of safeguards for the

such as dignity at work, transparency in mana-

apparel retail trade was one of the key topics

gement, discussions with the community and

dealt with by the Lojas Renner team with IDV.

respect for the environment. Associação Brasileira do Varejo Têxtil The decision to concur with the Eradication of

(ABVTEX): represents the retail trade in rela-

Forced Labor Pact also has a lot to do with the

tions with government bodies, manufacturing

Company’s culture, as the commitment to fight

business, trade entities and the market in general. In this manner it promotes an exchange

2012 ANNUAL SUSTAINABILITY REPORT

of experiences and studies on topics that are relevant to the activity, such as foreign trade, taxation issues, social responsibilities and supplier certification. Lojas Renner participates in the ABVTEX Management Committee (quarterly meetings) and work groups for specific subjects (monthly meetings). Carbon Disclosure Project (CDP): this is a

Awards, Acknowledgements and Certifications GRI 2.10

non-profit organization with the purpose of creating a relationship among shareholders and companies. CDP examines potential risks and opportunities related to climate change for participant companies. This is a questionnaire prepared by institutional investors and addressed to companies listed in the world’s

Interbrand ranking, 11th Most Valuable Brand in Brazil and 1st in Brazil’s Retail Trade

chief stock exchanges, in order to disclose information on climate change policies. CDP currently represents investors that jointly account for US$87 trillion in transactions. Lojas

Exame 2012 magazine, Best and Largest, 1st place in the Retail class

Renner responds voluntarily every year to the CPD investors’ questionnaire.

Dinheiro magazine, Among the Best, 1st place in the Retail class

Carta Capital magazine, Most admired companies in Brazil, 1st place in the Textile Retail class

Época Negócios magazine, 360th rank, Best Fashion Company

Capital Aberto magazine, Best Company for Shareholders, Governance class

DCI newspaper, DCI Award, Most Admired in the Trade Sector

CORPORATE GOVERNANCE

150 Best Companies in People Practices and 50 Psychologically Healthy Companies – Gestão RH

Among the 10 Most Admired HRs in Brazil – Gestão RH

3rd place in the above 10,000 employees

Confidence Brands 2012, winner in Department Store class – Ibope and Seleções magazine

Top Consumer 2012 – Excellence in Consumer Relations and Respect for the Environment – Consumidor Teste magazine in partnership with Instituto Nordeste Cidadania

class – Valor Carreira and Aon Hewitt

PCI DSS (Payment Card Industry, Data 13th ranking in the list of 50 Best CEOs in Latin America – Harvard Business Review

Security Standard) Certification, market standard that establishes a security model to protect confidentiality of customers’ credit and charge card data

José Gallo, Freedom-Businessman – Instituto de Formação de Líderes de Minas Gerais

500 largest in the South, 7th ranking in Rio Grande do Sul and 22nd in overall ranking – Amanhã magazine

Latin America Executive Team Ranking Best CEO, 1st place by sell side and by buy side, Best CFO, 2nd place by sell side and by buy side, Bet IR Professional, 1st place by sell side and by buy side; and Best IR Program, 1st place by sell side and 2nd place by buy side – Institutional Investor Magazine

About magazine Popular Vote Award, Announcer of the Year, Grand Prix 2012 class; Gold, silver and bronze in Fashion class; Gold and silver in Retail class; Gold in Institutional and Corporate class, totaling eight awarded commercials or spots

Top of Mind, most recalled brand in Fenale Apparel Store class (13th time) and preferred brand in new Top Y class (young consumers) – Amanhã magazine

Brands for Who Decides, most recalled brand in Female Apparel and Retail Network, also the public’s favorite – Jornal do Comércio newspaper (Rio Grande do Sul)

2012 ANNUAL SUSTAINABILITY REPORT

Operating, Business and Financial Performance

OPERATING, BUSINESS AND FINANCIAL PERFORMANCE

In a challenging economic scenario, Lojas Renner raised sales and operating cash generation

Lojas Renner ended 2012 with a number of

Operating Performance

achievements to commemorate, having in-

Though facing the impacts of uncertainty in the

creased total sales by 19.3% and 20.6% in

economic scenario during the first semester, the

operating cash generation. The expansion

industry as a whole reflected a trend for slight

plan was maintained, in line with long-term

improvement throughout the year. Recovery

planning, and investments totaled R$382.3

of the level of activity resulted chiefly from the

million, directed among others to inaugurate

domestic increase in purchasing power, with

35 stores (Renner, Blue Steel and Camicado).

greater access to credit and job stability.

Expectations for the coming years are that the

Pursuant to the Monthly Retail Survey (PMC)

market will grow briskly, driven by the econ-

by Instituto Brasileiro de Geografia e Estatística

omy’s growth and the population’s increased

(IBGE), nominal retail sales volume and revenues

earnings, and above all by the industry’s con-

rose 8.4% and 12.3% over the year respec-

solidation, reducing informality and fragmen-

tively, while the textiles, clothing and footwear

tation rates. This scenario will provide the

increased 6.4% in nominal revenues. Lojas

Company with a relevant opportunity, albeit

Renner grew 18.0% according to this same indi-

less efficient in the short term, to expand, con-

cator, far from the encouraging results of recent

solidate and also to gain market leadership in

years but still well above the industry’s average,

the near future.

pointing to possible gains in market share. This distinctive performance is the outcome of the Company’s culture, determined to achieve exceptional results and focused on quality.

2012 ANNUAL SUSTAINABILITY REPORT

The Fashion Market

GRI 2.8

Clothing purchases in 2013 should total R$129 billion, or yearly per capita expenditures of R$786.39. Chief consumers...

50.3%

Class

39.7%

class B

40.4%

class C

live in the Southeastern region

In July 2012...

38%

of the population seeks to keep up with fashion and styles

74%

they purchased clothing and accessories

34% purchased footwear

Among those that keep up with fashion...

79%

85%

68%

look for offerings and discounts

plan carefully the purchase of costly goods

believe that well-known brands are better

In the Internet...

40% 69%

Most purchased items in virtual stores

dresses

they are between 25 and 34 years old belong to class AB

female blouses

shoes

59% women

sneakers

41% men

sandals

Source: Ibope 2012

Shared Services Center

Stores

Implementation of Lojas Renner’s Shared Ser-

There was a record number of store openings

vices Center (CSC) was begun in 2012. The

in 2012, 24 Lojas Renner, 1 Blue Steel and 10

structure will consolidate and standardize

Camicado stores, increasing the Company’s

support processes, leading to efficiency gains

sales area by 14.2%. In terms of productivity, the

and enhanced internal controls. By taking over

average sales by Lojas Renner and Blue Steel

these activities, the CSC will allow the busi-

was of R$9.9 thousand per square meter, and

ness to drive their efforts to strategic issues,

of R$8.5 thousand per square meter Camicado

new projects and challenges. With the struc-

stores. The ceaseless search for efficiency was

turing organized in three stages and estimated

converted into actions in the course of the year,

for conclusion in 2014, the project is in line

such as a new environment and refurbished

with the Company’s strategic plan, in readi-

units, adoption of new visual merchandis-

ness for the vigorous rise in operations by the

ing project and steps to enhance consumers’

corporate structure.

purchasing experience. During 2012, 24 Lojas Renner stores were remodeled and remained

Financial Services Highlights

open to the public during the work period.

The Cartão Renner card accounted for 52.1% of total store sales during the year and the rec-

With regard to Camicado, operating integra-

ognized loss percentage was of 2.7%, both

tion efforts required attention during the year.

below the previous year’s figures, of 54.7%

Next, an adjustment in the product mix re-

and 2.9% respectively. The Meu Cartão credit

ceived priority, with increased variety, in partic-

card launched in 2010 ended 2012 with a to-

ular of imported goods. To this end, Camicado

tal of 1.1 million cards issued. With regard to

was enabled to proceed with direct imports, to

personal loans, the default rate dropped, as

take place using the same structure employed

opposed to the market, and stood at 15.5%

for imports of apparel. Projects for Camicado

of the portfolio at the fiscal year-end.

include organic growth, an increased number of stores and stressing venues in shopping

Know more about the financial services provided

malls. The strategic model is the same as that

by Lojas Renner by means of the Realize Soluções

adopted for retail apparel stores, benefiting

Financeiras brand, in the Profile chapter.

from all of Renner’s accrued expertise.

2012 ANNUAL SUSTAINABILITY REPORT

Key Indicators GRI 2.8 | EC1

Key Indicators (R$ thousands) – consolidated

2012

2011

2010

Total net operating revenues

3,862,508

3,238,543

2,751,338

Total net revenues from sale of goods

3,461,960

2,896,617

2,462,683

400,548

341,926

288,655

Total gross profit

2,228,262

1,842,414

1,541,879

Gross profit from retail transactions

1,845,548

1,521,372

1,280,316

Operating profit after financial income

508,820

475,393

431,771

Net profit for fiscal year

355,401

336,907

308,028

Number of shares at end of fiscal year

124,170

122,821

122,349

Adjusted retail Ebitda

565,591

467,553

384,075

Total adjusted Ebitda

714,449

592,626

505,120

Total net revenues from financial goods/services

Operating indicators – Lojas Renner and Blue Steel

2012

2011

2010

192

167

134

361.3

318.0

274.7

Average m² per store (thousands of m²)

2.0

2.1

Same stores growth (%)

8.8

7.2

10.3

20.8

19.0

17.1

1.739

1.904

1.878

Share in sales (Cartão Renner)

52.1

54.7

56.6

Share in sales (0+5)

40.2

42.8

43.6

Share in sales (0+8)

11.9

13.0

Share in sales (sight)

24.9

23.8

23.4

Share in sales (credit cards)

23.0

21.5

20.0

154.95

145.53

132.16

Company average ticket

111.9

105.01

97.65

Personal Loan portfolio (R$ millions)

112.3

101.1

98.5

82.4

74.6

72.0

Number of stores Sales area (thousands of m²)

Number of cards at end of period (millions) Number of cards issued during period (thousands)

Cartão Renner average ticket

Personal Loan portfolio (present value – R$ millions)

OPERATING, BUSINESS AND FINANCIAL PERFORMANCE

Financial and Economic Analysis GRI 2.8 | EC1 Net Revenues from Sale of Goods

Breakdown of net revenues (%)

Result: R$3,462.0 million, a 19.5%

4.6

increase over 2011.

Camicado

Factors: operating actions to enhance purchasing experience and improve the

95.4

macro-economic outlook.

Lojas Renner

Same stores sales: 8.8% growth over the period.

Gross Profit from Retail Transactions Result: 21.3% growth for the year, totaling

Factors: operating actions related to the

R$1,845.5 million, with a 53.3% gross mar-

supplier chain, such as support by dedi-

gin from retail transactions, 0.8% percent-

cated teams from Asian suppliers and inten-

age points above the previous year, even

sified three-sided negotiating tools in local

after including Camicado with structurally

procurement, in addition to the lower cost of

weaker margins.

cotton and other fibers.

Operating Expenses

Breakdown of operating expenses (%)

Result: growth in line with net revenues of 19.2%, totaling R$1,223.5 million at fiscal year-end.

24.0

Future: implementation of Shared Services Center (CSC)

Sales expenses

and conclusion of Camicado integration should optimize

76.0

operating leverage.

General and administration expenses

Adjusted Retail Ebitda Result: R$565.6 million for the year, a per-

Factors: growth in revenues above rise in

formance 21.0% above that for 2011, with a

costs and strict control of expenses, though

16.3% adjusted retail Ebitda margin, as against

with increased logistics expenses and greater

16.1% for 2011.

profit sharing.

2012 ANNUAL SUSTAINABILITY REPORT

Income from Financial Services

Breakdown of income from financial services (R$ thousands)

2012

2011

2010

382,714

321,042

261,562

91,584

79,635

67,000

171,310

150,485

114,018

Meu Cartão co-branded card

34,417

6,962

Personal loans and other financial services

85,403

83,960

80,544

(126,081)

(109,427)

(88,172)

Sales without charges (0 + 5)

(31,965)

(28,282)

(20,948)

Sales payable in 0 + 8 installments with charges

(59,898)

(54,039)

(46,867)

Meu Cartão co-branded card

(15,461)

(2,724)

Personal loans and other financial services

(18,757)

(24,382)

(20,357)

(107,775)

(86,542)

(52,435)

148,858

125,073

121.045

20.8

21.1

24.0

Revenues, net of funding and taxes Sales without charges (0 + 5) Sales payable in 0 + 8 installments with charges

Credit losses, net of recoveries

Operating expenses (Cartão Renner and Financial Services) Income from financial services % on Company’s total adjusted Ebitda

Company’s Total Adjusted Ebitda Result: R$714.4 million, a 20.6% increase

Factors: business scenario and second se-

over the preceding year. The total adjusted

mester sales, end of remodeling process, strict

Ebitda margin was of 20.6%, slightly above the

control of expenses and good income figures

20.5% obtained in 2011.

for Financial Services.

Net Financial Income Financial income: R$33.4 million, 33.7%

benture issue in 2011 and 2012, by the end

below the preceding year owing to the lower

of part of fiscal benefits in Santa Catarina and

cash level managed during the year and the

by the change in foreign exchange hedging in-

reduced Selic (inter-bank) rate reduced market

struments for imported goods.

rates in general. Performance: R$50.4 million in net expenses Financial expenses: R$83.8 million in 2012

for the year as compared to R$2.8 million net

as opposed to R$47.5 million in 2011 – this

revenues in 2011.

increase is justified by a R$600.0 million de-

OPERATING, BUSINESS AND FINANCIAL PERFORMANCE

Indebtedness/Net Cash and Cash Equivalents In June 2012 the Company held its fifth

Indebtedness and cash (R$ millions) 683,7

public offering of common non-convertible

683,3 578,3 644,7

debentures at a br AA+ rating attributed by Standard & Poorâ&#x20AC;&#x2122;s. The issue involved R$300 million, which jointly with the 2011 issue formed the Lojas Renner new equity

363,5

structure. These funds are being allocated for the Companyâ&#x20AC;&#x2122;s organic growth. Net cash and cash equivalents: R$38.6 million at fiscal year-end, as compared to R$215.0 million available in late Decem-

48,7

Total debt

ber 2011.

Cash 2010

2011

2012

Profit for 2012 was of R$355.4 million, 5.5% above that for the previous year

2012 ANNUAL SUSTAINABILITY REPORT

Net Profit Result: R$355.4 million, with a 10.3% net

Factors: greater financial expenses arising

margin. Compared to the previous year, a

from the new equity structure and increased

5.5% rise in profits and a 1.3 percentage point

depreciation level.

decline in margin.

Performance of Shares

LREN 3 x IBOV

LREN 3 + 64.7%

Having appreciated 64.7% during the year, Lojas Renner ended the period quoted at R$79,75. The average daily volume traded rose to R$58.4 million, in line with the average

IBOV + 7.4%

recorded in 2011. Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12

OPERATING, BUSINESS AND FINANCIAL PERFORMANCE

Investments (R$ millions)

Investments

382.3

In accordance with its long-term planning, the Company put in place several

15.7

important projects in the course of 2012, in which R$382.3 million were invested, including the opening of 25 retail apparel stores (Renner + Blue Steel)

296.6

and 10 Camicado, in addition to the remodeling and updating of 24 stores.

76.1

11.8 28.3

47.6

29.2 39

160.2

New stores

15.3 12.3

Remodeling of facilities

22.3

Technology equipment and systems

37.8

Distribution Centers

Breakdown of investments in 2012 (%)

71.3

188.3

171.6

72.5

Others 2010

4.0

2011

2012

19.9 44.9 New stores Remodeling of facilities

12.5

Compensation to

Technology equipment and systems

shareholders (R$ millions)

Distribution Centers

Payout 75%

Others

18.7

3.3%

Payout 75%

4.3% 2.7% 252.7

266.6

231.0

Compensation to Shareholders Payouts of dividends and interest on capital (JCP) to Lojas Renner shareholders takes place pursuant to the Corporation Law and corporate By-laws, equal to a minimum of 25% of the net profit found in each fiscal year. In recent years the Company paid out dividends and JCP equal to 75% of net profit.

Compensation to shareholders Dividend yield

2010

2011

2012

2012 ANNUAL SUSTAINABILITY REPORT

Managing Sustainability

Overall and specific guidelines for each relations stakeholder serve to orient actions by Renner Lojas Renner considers the issue of sustainability strategically and directs it actions based on overall guidelines and according to stakeholders (please see diagram). The Sustainability area (which until late 2012 was referred to as Social Responsibility) prepared a proposal for the Lojas Renner Sustainability Policy. By means of the Sustainability Committee that provides guidance and consolidates efforts in the area, as of 2013 this policy will require approval from the Executive Committee and the Board of Directors.

Strategic management and sustainability pillars

Overall guidelines

Guidelines per stakeholders

Awareness and training of staff members to become Corporate Sustainability players

Environment: structuring of an environmental program considering the liabilities created by the business

Enhancing of the Code of Ethics and Conduct as the guideline for Corporate Sustainability practices Advising on the Companyâ&#x20AC;&#x2122;s Corporate Sustainability practices to internal and external stakeholders Monitoring and assessment of Corporate Sustainability practices

Internal Stakeholders: enhancing tools and processes in connection with employees Suppliers: structuring the Renner Supplier Relations and Support Program Customers: structuring the Renner Customer Relations Program Communities: structuring the Renner Social Investment, Government and Society Program Government and Society: consolidating the companyâ&#x20AC;&#x2122;s leadership and social influence

Environmental Aspect DMA EN Commitment with the environment is one of

sustainability practices that need to be men-

Lojas Renner’s working assumptions, in accor-

tioned, as in the case of the Solid Residue

dance with its responsible management culture.

Management Program (PGRS), the EcoEstilo

The Company seeks continually to improve its

project, greenhouse gas emissions manage-

environmental management practices, keeping

ment and the use of certified paper in its dis-

up with modern women, who are ever more de-

closure materials, which will be detailed further

manding and aware in their purchase decisions.

ahead in this chapter. GRI EN 26

Efficiency in the use of resources and responsi-

The company seeks to use low environmental

bility in the disposal of residues are encouraged

impact materials and prefers to use paper with

internally as well as in their stakeholder relations.

the Forest Stewardship Council (FSC) seal in its

In this regard, Lojas Renner has a number of

catalogues and campaign materials.

Materials TP EN1 | EN2 | EN26 | EN27 | DMA EN

Renner¹ used materials (in units except where indicated)

2012

2011

2010

A4 paper (tons)²

100.5

86.5

n/a

131

n/a

Alarms available

43,697,351

n/a

Hangers available

17,122,539

10,166,575

n/a

Hangers used (all types)

55,175,018

58.076.483

62.033.421

Plastic glasses

Paper in catalogues (tons)³

13,467,200

11,246,100

n/a

Paper packaging

1,632,925

18,000

n/a

Mailing list

8,200,000

5,720,000

n/a

Biodegradable plastic bags

6,279,000

2,886,200

n/a

39,630,500

38,782,500

n/a

3,337

1,543

542

Oxy-biodegradable plastic bags Toners used and gathered

Includes Lojas Renner and Blue Steel data. ² Roughly 90% FSC recycled. ³ 100% FSC source. 4 100% of used toners are gathered by suppliers for re-use (contractual clause). 1

Camicado* used materials A4 paper (tons)

2011

2010

175,500

186,938

94,688

Recycled A4 paper (tons)

28,238

n/a

Cardboard (tons)

73,539

75,055

n/a

832

714

513

1,746

1,464

824

Used toners (units) Used cartridges (units) * Includes sheets for printing wedding lists.

2012

MANAGING SUSTAINABILITY

There is also legal compliance in connection with

quired by the Company under this system is

the use of biodegradable and oxy-biodegrad-

100% renewable and comes from 4th Gen-

able bags in stores, and in administration offices

eration Small Hydroelectric Plants (PCH). This

activities with materials focus on gathering and

model also allows the reduction of electricity

re-using 100% of cartridges and toners. Hence,

costs, estimated at R$3.4 million annually after

Lojas Renner improves its responsible environ-

the migration of 33 units. GRI EN7

mental practices and reduce the creation of residues and emissions, re-using materials and

In its search for energy efficiency, the Company

reducing their impact in the environment.

held awareness campaigns among its staff members, installed LED lamps and changed

Energy and Energy Efficiency

equipment for low-energy consumption and

GRI EN3 | EN4 | EN7 | EN26 | DMA EN

more efficient models. All of these improve-

Part of the energy used by Lojas Renner is ac-

ments are provided for in the new store proj-

quired in the Free Energy Market, which works

ects. To know more on other efficiency actions,

under specific agreements and pre-established

please see the Impact by Transportation sec-

pricing supply period conditions. Energy ac-

tion in page 65. GRI EN5

GRI EN3 | EN4 | EN7

Electricity consumption (GJ) Electricity consumption1 Use of diesel oil in generators Total use of direct and indirect energy (GJ) % renewable energy

2012

2011

2010

460,854

443,020

334,100

826.90

751.70

675.99

461,680.90

443,771.70

334,775.99

3.28

n/a

¹ There was a change in electricity consumption unit regarding the unit used in the 2011 report, the unit was GJ thousands and is now GJ. ²C onsidering that energy in Brazil comes from different sources that are combined in the distribution network, the percentage of renewable source energy considered by the Company is that purchased through the Free Energy Market and currently supplying 12 stores.

Water: Sourcing, Use and Re-use GRI EN8 | EN9 | EN10 | EN21 | EN26 | DMA EN The Company’s headquarters uses an average daily 146 cubic meters of water, and owing to this daily control, Lojas Renner is able to quickly detect any changes in volume. During 2012 it installed aerating devices in the units and exchanged conventional taps for others that shut off automatically, reducing the use of water. All the water used in the headquarters and units comes from public supplies and is disposed of in the rainwater or sewage networks. However, a new administration area building now being planned will have gray water reuse systems installed (water from showers and washbasins).

2012 ANNUAL SUSTAINABILITY REPORT

Emissions Inventory TP EN16 | EN17 | EN18 | EN26 | EN29 | DMA EN Lojas Renner has been preparing a Greenhouse Gas (GHG) emissions inventory since 2010 in order to measure and manage its emissions. This inventory will be employed as an ongoing process by the Company and will enable it to detect the progress of emissions mitigation efforts.

Scope 1

57 tCO e 2

Generators

Scope 2

Scope 3

36 tCO e 998 tCO e 9,461 tCO e 2

Company vehicles

Air conditioning

Purchased and use electricity

Direct and indirect emissions – scope 1 and 2 (tCO2e)

0 tCO e

3,019 tCO e 10,444 tCO e

Residues

Business trips

Transportation of goods

20121,2

2011

2010

Scope 1 (generators, vehicle fleet and refrigeration gases)

1,092

575

416

Scope 2 (purchased and consumed electricity)

9,461

3,636

4,701

10,553

4,211

5,117

Total emissions – scope 1 and 2 (tCO2e)

The emissions inventory includes Lojas Renner, Blue Steel, Administration, Credit and Collections Department, CDs and Camicado. The inclusion of Camicado in the GHG emissions inventory for 2012 prevents yearly comparisons regarding the efficacy of mitigation projects. ² Calculations regarding GHG emissions took place based on the GHG Protocol’s spreadsheet v2012.0.1.

Indirect emissions – scope 3 (tCO2e)

20121,2

2011

2010

Solid residues

n/a

Business trips

3,019

3,140

1,399

Transportation of goods

10,444

3,859

26,758

Total emissions – scope 3 (tCO2e)

13,463

7,014

28,157

MANAGING SUSTAINABILITY

The emissions inventory reflects the Company’s concern with climate change In 2012 the Lojas Renner emissions inventory

management. This involvement reflects the

started to include operations by Camicado.

Company’s concern with responsible ac-

Hence, it is not possible to compare it with

tions that exert a declining negative impact

2011 in order to confirm the reduction target

on the environment.

of 2% of emissions. Yet this inclusion reflects the Company’s commitment in continually en-

An example is the publication of its inventory in

hancing its control of indicators and emissions

the Brazilian GHG Protocol Program’s platform,

management, the 2% reduction target for the

allowing anybody to have access to this informa-

performance indicator will be preserved for

tion. Brazilian GHG Program encourages a cor-

2013 (total emissions per m² of sales area).

porate culture in the preparation and disclosure of emissions inventories, and rates the compa-

In addition to controlling its emissions inven-

nies that belong to its platform with regard to

tory, Lojas Renner participates in a number

transparency and quality of data reported. Lojas

of actions related to greenhouse gas (GHG)

Renner was awarded the silver seal in 2012.

2012 ANNUAL SUSTAINABILITY REPORT

The Carbon Disclosure Project (CDP) is a non-

Lojas Renner’s Solid Residue Management

profit organization with the purpose of creat-

Program implemented in all the Renner and

ing a relationship among shareholders and

Blue Steel units is based on the principle of

companies focused on business opportunities

reduced creation and correct disposal of resi-

resulting from global warming. The entity also

dues. The program defines procedures and

assesses information by companies that com-

criteria for classifying, separating, packaging,

plete the questionnaire. In 2012 Lojas Renner

gathering and transporting, recycling and the

improved its performance in the CDP assess-

final disposal of residues.

ment, rising from E to D in the Performance Score and being placed above average in the

The entire disposal process is certified by spe-

Governance & Strategy, Emissions Manage-

cialized firms. The same trucks that go from

ment and Emissions Reporting requisites.

the Distribution Centers (CDs) to the stores loaded with goods, return to the CDs with the

In addition, the Company is a part of the

residues created by the units. Separating resi-

BM&FBovespa’s Carbon Efficient Index (ICO2)

dues according to type takes place in the CDs

since 2011. All the 39 ICO2 members in the year

(recyclable, non-recyclable and hazardous

were selected for adopting transparent practices

residues) for the correct final disposal (recy-

in connection with their greenhouse emissions.

cling, industrial landfill or co-processing). Remittance of residues is controlled on a weekly

Solid Residue Management Program (PGRS) TP EN22 | EN23 | EN24 | EN26 | DMA EN

basis by means of invoices, controlled by the

Lojas Renner runs the Solid Residue Manage-

which discloses the stores’ residue ranking.

ment Program (PGRS) since 2010, based on

The three mist committed stores for each

the Solid Residue National Policy Law (PNRS).

month are listed in the Planeta Renner maga-

The PNRS defined the principle of shared re-

zine, available to internal stakeholders.

CDs and managed by the Sustainability area,

sponsibility for product life cycle and has reverse logistics as its essential aspect – a set

Among the chief actions covered by the pro-

of disposal actions that expedite the return of

gram in 2012 are the store encouragement

residues to their source, for treatment or re-

and recognition campaigns and disclosure of

use in new products.

the Solid Residue Management Manual. Over one thousand tons of residues were gathered during the year. The Company had no cases of spills during the removal of residues and it does not create, transport or exports residues

The smart logistics operation optimizes costs in solid residue management 62

MANAGING SUSTAINABILITY

deemed to be hazardous, pursuant to the terms of Basel Convention. GRI EN23 | EN24

Approximately

800 tons

of residues were remitted for recycling

GRI EN22

Residues created (in tons, save where indicated) GRI EN22

Disposal

Paper/cardboard

2012

2011

2010

Recycling

618.81

634.3

123.65

Plastic

Recycling

151.64

134.36

20.51

Metal scrap

Recycling

2.65

3.78

7.33

Technological residues¹

Recycling

Other non-hazardous residues²

Recycling/landfills/co-processing

EcoEstilo

Industrial landfill

Sundry scrap (m³)³ Total non-hazardous residues created

Cells and batteries

Industrial landfill Decontaminating and recycling

Fluorescent lamps (units)

Other hazardous residues

Total hazardous residues created6

Industrial landfill

7.22

11.38

n/a

237.77

78.61

n/a

9.12

4.61

1.31

610

135

1,027.21

867.04

152.80

4.12

4.85

0.01

44,729

26,629

672

4.12

8.24

4.85

0.01

Technological residues are remitted to outsourced firms that re-use or recycle these materials and correctly dispose of residues that are not re-used. ² Merchandising materials, fixed assets, dummies and unmatched footwear. ³ Lumber, pallets, rubble and organic residues; Lojas Renner has no data on tons for this kind of residue. 4 Lamps are remitted in units to the firm that decontaminates and recycles. Hence, it is more correct to inform units disposed of rather than weight (which previously was estimated and did not consider different lamp models). 5 Contaminated residues that cannot be recycled. 6 Camicado residues are not included, as they are part of the residue management programs in the shopping malls where the stores are located. The Solid Residue Management Program has not been put in place yet in Camicado. 1

2012 ANNUAL SUSTAINABILITY REPORT

EcoEstilo TP EN 26 | EN27 The EcoEstilo Project launched in 2011 ac-

At the time of purchase of toiletry goods, custom-

counted for 9.12 tons of residues gathered un-

ers receive an explanatory leaflet on the impor-

der the Solid Residue Management Program

tance of returning packaging and the appropri-

in 2012. This is an action by Lojas Renner that

ate disposal of residues in order to preserve the

encourages customers, consumers and em-

environment and natural resources. They are also

ployees to discard toiletry and beauty residues,

informed that they may discard bottles and pack-

whether or not purchased in Lojas Renner, in

aging of any beauty products in the storesâ&#x20AC;&#x2122; bins.

appropriate bins available in all the stores. The packaging gathered is disposed of in an environ-

Virtual courses at Academia Renner and Uni-

mentally correct manner by Lojas Renner. It was

versidade Renner (please see these in the Em-

put in practice in 2011 and is part of the Lojas

ployees item) on residue management and the

Renner Solid Residue Management Program.

EcoEstilo Project are provided to employees.

Besides the goods discarded by customers, the

Since the introduction of EcoEstilo, the environ-

project is also aimed at testing samples in the

mentally correct disposal has taken place of 15

stores and defective beauty goods.

tons of beauty and toiletry resides.

See how EcoEstilo works Industrial landfill: non-recyclable residues

Final disposal

Use of toiletry and beauty products

Separation according to type of residues Correct discarding of bottles and packaging

Recycling: plastic, paper and cardboard

MANAGING SUSTAINABILITY

Transportation Impacts GRI EN11 | EN12 | EN13 | EN14 | EN15 | EN25 | EN29 | DMA EN

A Suppliers

B Suppliers

CD RJ

CD SP

C Suppliers

CD SC

The increase in the Company’s distribution

country’s main highways. The Company’s

capacity and the review of the procurement

stores CDs are located in urban areas, where

logistics processes were important highlights

there is no direct impact on areas with a high

in the Supply Chain Project. This action which

rate of bio-diversity, protected or restored

is still in progress includes cross-functional

habitats or protected areas adjacent to these.

teams from Procurement, Logistics and IT,

GRI EN11 | EN12 | EN13 | EN14 | EN15 | EN25

which in 2012 were called on to implement a specialized distribution cell and to build the

The location of CDs is also strategic as they

Rio de Janeiro Distribution Center, with auto-

favor a regionalized distribution of goods:

mation equipment new to Lojas Renner and

suppliers’ delivery network and remittance to

to Brazil. Automation made it possible to re-

stores is always based on the definition of the

duce the CD built-up area by 11%.

shortest routes possible, avoiding unnecessary traveling distances. Provisioning follows

The CD in the state of Rio de Janeiro joins

the procedures shown above.

those already in place in Palhoça (SC) and São Bernardo do Campo (SP), in order to

Transporting goods accounted for 44% of

deliver the right goods at the right time. They

emissions by the Company in 2012 (equal to

are all located close to areas with a greater

scope 3), above the 34% recorded in 2011.

concentration of suppliers, stores and the

This increase resulted from the inclusion of Camicado in the inventory.

2012 ANNUAL SUSTAINABILITY REPORT

Mitigation Actions and Investments in Sustainability TP EN18 | EN26 | EN28 | EN30 Lojas Renner sponsors a number of actions to reduce the use of natural resources, to encourage the appropriate disposal of residues and awareness by its stakeholders on responsible consumption. Investments in management, prevention and mitigation of impacts rose to R$278,068.00 for the year. In recognition of the environmental management efforts, Lojas Renner was awarded the ECO-WBrasil, a Certificate for Installing Sustainable Materials, attesting compliance with domestic and international environment legislation. The Company knows no bounds for compliance with environmental aspects. Proof of this is that in 2012 there were no cases of expressive fines imposed and of non-conformity with rules, laws and regulations. GRI EN28 Please see below a number of highlighted actions:

Lower water consumption: in Company headquarters, saving water was obtained by installing efficient equipment, with taps that shut off automatically.

Lower electricity consumption: use of LED lamps and changing for more efficient equipment.

Investments in sustainability* (in R$)

Neutralizing GHG emissions: Lojas Renner took part in the Descalvado Carbon Project, involving restoration of 41 hectares of permanent preservation areas (APP) in the municipality of Anhembi (SP), located on the edge of the Barra Bonita reservoir. This action consisted in the acquisition of 575 tons of carbon credits, employed to neutralize Scope 1 emissions in the 2011 greenhouse gas emissions inventory.

Products: the Alchemia Bio product line (read more in page 22) is biodegradable, packaged in materials certified by the Forest Stewardship Council (FSC) and containing no petroleum derivatives, such as Vaseline, in its formula. GRI EN6

2012

2011

2010

242,093

185,618

25,020

Mitigating environmental impacts

25,875

n/a

Environmental management

10,100

85,000

253,158

278,068

270,618

278,178

Treatment and disposal of residues

Grand total of investments * Considering investments in Lojas Renner and Blue Steel only.

Awareness: the Consumer Vibes in-house campaign encouraged staff members to avoid wasting natural resources.

MANAGING SUSTAINABILITY

The world’s largest fan letter

Lojas Renner knows that its greatest assets are its employees and therefore sponsors a number of action to value its human and intellectual capital. Attention and intense experience with the Renner Values take place as of the first days on the job in the Company, with the start of the Welcome Program. During the first three months, employees undergo a number of activities to ease their integration, and exercise the Renner attitude. Enchanting employees is the start of a virtuous circle that will end up by enchanting all of the Company’s stakeholders. That is why Lojas Renner invests in people management, continually enhancing aspects such as compensation, organizational environment, health and safety, training, career and communications. It also adopts the 5S Program in its units since 1994, in order to disclose a culture of encouraging quality. Besides not having a specific admission and succession policy granting priority to professionals in the communities in which it operates, Lojas Renner trains professionals locally for its activities, chiefly due to the nature of rapid dissemination. The business dynam-

What has pop star Madonna’s tour to do with Lojas Renner’s sustainability actions? In 2012, the Company’s awareness style combined both of these initiatives in one pioneering action. By means of Facebook application and the Twitter #cartamadonna hashtag, fans were able to send messages, love letters, photos and images to the singer, aiming to write the world’s largest fan letter. This action resulted in 3425 messages to the pop star, which were disclosed innovatively in mobile projections on several seaside locations in Rio de Janeiro, the city that staged her tour’s first show in Brazil. A selection of messages was printed on canvas and formed a kilometer-long letter, unrolled on the seaside at Ipanema from the hotel where Madonna was staying. Passing fans were called to interact by leaving a message. This action created commitment and noise, and attracted attention owing to the purpose for all this canvas: the creation of 2 thousand eco-fashion bags. Producing the sustainable bags involved re-use of post-consumer materials, adding design value, and created income for women undergoing semi-open imprisonment and for selfemployed seamstresses in the state of Rio Grande do Sul. The bags are part of a kit sent to fans who were drawn in a promotion of 1500 tickets for the pop star’s shows in Brazil. The entire action involved Madonna herself, who was given an iPad with all of the messages that, had they been printed, would produce a letter of over 4 kilometers in length.

ics provides for opportunities in countrywide mobility. GRI EC7

2012 ANNUAL SUSTAINABILITY REPORT

Those who Enchant

TP LA1 | LA2 | DMA LA

According to function Lojas Renner and Blue Steel Employees* Executive Committee Leaders (managers, coordinators and supervisors) Administration (analysts and similar) Operations Others (apprentices, trainees and interns)

Total per function

2012

2011

2010

1,124

956

856

359

289

255

12,902

12.232

11,488

524

552

420

14,915

14,035

13,025

* Total employees includes only those admitted under the CLT statutes and interns, and does not include temporary and outsourced professionals. There is a seasonal variation during the months prior to Christmas and Mothersâ&#x20AC;&#x2122; Day. However the percentage changes are not available as they depend on information not currently monitored, such as temporary and outsourced people.

Camicado employees per function (2012)

Breakdown by region

444 2012 276 2011

262 2010

33 Others (apprentices, trainees and interns)

133 Leaders (managers, coordinators and supervisors)

1,584 2012 1,503 2011

1,119 2012 1,108 2011

Administration (analysts and similar)

1,213 2010

647

1,110 2010

6,576 2012 6,097 2011

5,192 2012 5,051 2011

Operations

5,684 2010

Camicado employees per region (2012)

4,756 2010

160 South

32 Center-West

642 Southeast

MANAGING SUSTAINABILITY

Turnover in operations

2012 Renner and Blue Steel

Camicado

Admissions Terminations Admissions Terminations Executive Committee

Leaders (managers, coordinators and supervisors)

112

Administration (analysts and similar)

7,379

6,489

505

555

636

565

8,142

7,241

601

640

Operations Others (apprentices, trainees and interns)

Total admissions and terminations for 2012

Turnover rate per region Renner and Blue Steel (%)*

2012

2011

2010

Center-West

47.78

54.69

43.75

Northeast

31.48

29.73

34.47

North

50.56

52.03

45.66

Southeast

48.43

45.57

43.80

South

41.49

38.07

39.81

*The average turnover rate for Lojas Renner and Blue Steel for 2012 was of 44.89%.

2012 ANNUAL SUSTAINABILITY REPORT

ENCHANTMENT STORY

A special uniform I received a call in January from Dinair, commercial supervisor in the 06 store in Joinville (SC). As I am in charge of purchasing uniform for stores, she got in touch with me because she was uncertain on how to proceed with a special employee, who could not use a td t-shirt due to a health problem. The uniform is the same for every employee, so I suggested getting in touch with HR to address this exception. In April I received approval for buying the special uniform. Faced by the opportunity, I asked myself: “What can I do in this situation to enchant this fellow worker?” At this point I thought of explaining the issue to our supplier of uniforms and ordered two t-shirts with the same layout as the others, but of a special fabric. As soon as the t-shirts arrived, I sent them through the in-house mail pouch. I included a note and a chocolate in the package. A week later I got an email from Liliane, the special employee, which read: “I was enchanted with the attention given to me. Let me thank you from my heart! I felt much honored in receiving two t-shirts made especially for me. You now have your Enchantment Story, as it made me very happy. Your action surprised me. Congratulations! If I were the Mystery Shopper, you would have my full approval and also 100% for the Story of the Year. Oh, and the chocolate, believe me, was better than the box, as it came with love. You are enchanting. Many thanks!” This opportunity served to show that enchanting is accessible to us every day, you simply need to see opportunities with other eyes.

Camila da Silva Dornelles | Procurement | Administration

Enchanted TP EC5 | LA3 | LA12 | LA14 | DMA EC | DMA LA The competency compensation system in use at Lojas Renner is based on merit and consists in three pillars: job description, employee assessment and career. The former ensures that employees understand what is expected from them in their day-to-day activities, their responsibilities, requisites and required competencies. The Company does not practice wage discrimination between men and women in the same function and who perform the same activities. GRI LA14 Performance assessment takes place under different methods according to stakeholders. Employees in operating functions, analysts, supervisors and coordinators are submitted every six month to the 360º Assessment, involving generic and specific attitudes and competencies. The final score attributed to staff members is composed of selfassessment and of assessment by line managers, peers and in-house customers. Employees will receive feedback at the end of the process, with positive aspects and improvement opportunities. In 2012, roughly 82% of in-house employees eligible for assessment underwent the entire process, including formal feedback. GRI LA12

MANAGING SUSTAINABILITY

Yet management level staff members are sub-

The compensation management model is

mitted to an assessment of competencies

supplemented by salary surveys. Defining

built around three axes: organizational, strate-

compensation does not discriminate employ-

gic and functional. The assessment’s outcome

ees by gender and there may be in several

is discussed in a committee including the line

cases difference due to competency levels

manager, the area’s officer and the Human

and seniority. The lowest compensation paid

Resources office – in order to equalize criteria

by Lojas Renner and Blue Steel was 4.82%

and to ensure consistent assessments. Every

above the national minimum salary, while in

executive was submitted to this performance

Camicado this ratio was of 13.34% The Com-

analysis in 2012.

pany practices payment of the floor for the employee class, and exceeds this figure in

The compensation system’s third pillar pro-

39% of units. GRI EC5 | LA14

vides growth opportunities for staff members with distinctive performances. Renner encour-

Furthermore, a wide range of benefits is pro-

ages staff members to plan their careers un-

vided to employees, described in detail in the

der guidance by their line managers, and sig-

Welcome Manual and in the integration pro-

nals two possible routes: technician/specialist

cess for new employees. Please see the Lojas

(with wage progression at the same functional

Renner benefits in the table that follows. GRI LA3

level) and leadership profile (with a vertical rise in Company hierarchy).

2012 ANNUAL SUSTAINABILITY REPORT

Employee benefits GRI LA3

Meals: by means of cafeterias and contracts, Lojas Renner pays from 80% to 90% of the price of meals.

discounts for purchases in Lojas Renner, depending on years of work, for employees as well as for legal dependants.

10% to 15%

Multi-purchase cards

for use in grocery and drug stores, fuel stations and other accredited retail outlets, deducted from payroll.

Health plan: with a broad range of medical and hospital coverage and a network of accredited services, including legal dependants.

Association in recreational activities known as

SER

, providing dental plans, language courses and social events, among others.

Work uniforms provided at no cost to store and distribution center staff members.

Life insurance optional, deducted from payroll.

Bus vouchers for home/ work/home commuting, deducted from payroll according to the fareâ&#x20AC;&#x2122;s price and restricted to 6% of compensation.

Agreement with learning institutions

for discounts on matriculation fees and monthly dues for university, post-graduate and extension courses (for employees and dependants).

Profit sharing

as much as one salary, on condition of achieving pre-specified and disclosed goals.

Year-end celebrations to promote integration and to commemorate achievements, also including family members.

Lojas Renner holds an annual Organizational

with over 50 staff members included an In-

Environment Survey intended to measure com-

ternal Accident Prevention Committee (Cipa),

mitment by its employees. Participation is online

formed in accordance with NR05 criteria found

and 100% of staff members are requested to

in the Ministry of Labor’s Ordinance 3214/78.

respond. The survey’s result in 2012 was 76% commitment, a 4 percentage point rise as com-

Cipa is in charge of health promotion pro-

pared to the previous year. This rate confirms

grams together with managers and the Hu-

Lojas Renner among high-performance compa-

man Resources division. The Committee also

nies. The process is embodied in the Company’s

trains brigade members who are provided with

culture and is strengthened by the rising rate of

guidance in first aid, evacuating buildings and

respondents – in 2012 concurrence was of 86%.

fire-fighting, and provides every employee with

Based on these results, action plans are devel-

virtual courses on coronary diseases, tobacco

oped and put in place aimed at the organizational

addiction, postural health and quality of life.

environment’s ongoing improvement.

Every year it assists in organizing the Internal Accident Prevention Week (Sipat), which in

Health and Safety Indicators

2012 was held in all the Lojas Renner units.

TP LA6 | LA7 | LA8 | LA9 | DMA LA

Safety of staff members is essential in order

Other health and safety practices include monitor-

to preserve a pleasant work environment, be-

ing environmental risks related to each function,

sides showing respect and concern by Lojas

regular medical exams and influenza vaccination

Renner with its internal stakeholders. In 2012

campaigns, as well as a constant disclosure of

with the integration of Camicado, every unit

information on health and family planning.

2012 ANNUAL SUSTAINABILITY REPORT

Occupational health and safety indicators¹

201210

2011

2010

0.002

0.003

0.004

28,112,000

34,465,000

34,386,000

555

27.920

137.436

3.9

162.01

799.371

Frequency rate of accidents with leave

0.99

0.95

1.62

Frequency rate of accidents with/without leave6

0.10

0.08

0.05

n/a

0.00

2.031

2.69

Accidents with leave³ Accidents without leave4 Occupational accident rate Total yearly working hours programmed8 Working days lost² Lost days rate (TDP)9 5

Investment in accident prevention per employee (R$)7 Frequency rate of occupational diseases

Includes Lojas Renner and Blue Steel. 2 In previous years occupational and common diseases were listed, giving rise to erroneous information and increasing excessively the number of days lost. According to NBR 14280 criteria, occupational accidents did not include commuting accidents, which condition was also not followed in previous years. ³ Accidents with leave are those whereby employees do not return to their activities until the day following the event. 4 Accidents without leave are those whereby employees return to their activities on the day of the event or on the first subsequent working day. 5 Equal to the number of accidents with leave divided by one million man hours worked (HHT). 6 Equal to the number of accidents with or without leave divided by one million man hours worked (HHT). 7 Average investment per employee. Investment in accident prevention includes: The entire Occupational Safety Department’ budget and expenditures and investments made by the Engineering and Manufacturing area to ensure and/or improve occupational safety or comfort conditions. Does not include expenditures with training (under the charge of the HR/Training area). 8 Total hours programmed: considered as 8 hours daily x business days estimated. 9 TDP: Considers the factor 1 million pursuant to NBR 14280 instead of the factor 200,000 recommended by the GRI. Calculating days lost starts on the day following an accident. 10 No deceases in operations over the period covered by the report. 1

Occupational diseases¹

2012

2011

2010

0.0381

0.0376

Investment in disease prevention per employee (R$)2

n/a

Total notices to the National Institute of Social Security on occupational diseases

Absentee rate

Includes Lojas Renner and Blue Steel. ² Average investment per employee.

Virtual course on health and safety* Quality of life

1,754

Tobacco addiction

994

Coronary diseases

1,342

Postural health

1,626

Cipa

1,755

* Includes Lojas Renner and Blue Steel.

Total conclusions

MANAGING SUSTAINABILITY

Diversity TP LA1 | LA13 | DMA LA Encouraging diversity is part of the Lojas Renner style. If the Company publicly supports and develops a number of actions on behalf of women (see more in the Instituto Lojas Renner item), it could be no different with its internal stakeholders. In 2012 Lojas Renner trained by means of awareness and training programs 80 Godparents of Diversity in 5 regional divisions – and plans to broaden this action in the coming year. These staff members understand the importance of diversity and act as examples to their colleagues. The Company monitors diversity indicators such as age, gender, race or handicaps, and bars any form of discrimination. Specifically on the issue of women, 72% of Lojas Renner’s staff members are women, and it sponsors projects that comply with the Women’s Empowerment Principles.

Diversity indicators* GRI LA1 | LA13

2012

2011

% of women in the Company

71.75

72.05

% of employees above 45 years of age

5.95

5.79

% of employees above 45 years of age in management functions

8.83

11.00

66.66

% of employees above 45 years of age in executive officer functions Total overseas leaders with international experience * Includes Lojas Renner (Admin., stores, CDs) and Blue Steel.

2012 ANNUAL SUSTAINABILITY REPORT

ENCHANTMENT STORY

Daiane’s graduation My story started when I saw customer Daiane on a wheelchair and who whenever she comes to the store wants me to help her. I know her from the time when I worked in the female dressing booth, when I always helped her to try on clothes. This time Daiane needed a pair of shoes for a very special occasion: her graduation. After trying several models, we selected one that she loved. Daiane also asked for help in selecting make-up for the occasion. My colleague Daniela in the beauty area helped us and on seeing Daiane’s difficulty, she decided to call our colleague Jaqueline, who has lots of practice with make-up. Daniela spoke to me and suggested that we should enchant our special customer by going to her house to do her make-up on the graduation day – she uses a probe and it would be difficult for her to come to the store on that day. So we asked for approval from our supervisor Tatiana, who immediately let us go. We told Daiane of our idea, who was speechless because of our kind offer. On August 3, as we had arranged, Jaqueline and I went to Daiane’s home. We were very anxious to see her. On our arrival we were surprised, Daiane’s whole family was waiting for us and we were very well received. Her sister had told us in confidence that Daiane had hardly slept well in expectation of the great day. At each stage of the make-up, Daiane was being transformed, ever prettier, and when she saw herself in the mirror she was moved. We also felt that her mother was also very restless and offered her the make-up in order to relax her. She told us awkwardly that she could not pay and that she did not use make-up since she was widowed. We said that the occasion called for a very attractive make-up and that she should not worry, we would not charge anything, after all, Daiane had purchased the make-up. She thanked us and was very happy with the outcome. Everything was ready for the great moment, but our enchantment could not end here: we made a gift of a necklace to Daiane, to use for the graduation. Everybody was speechless and invited us to socialize with them at a table laden with tidbits and sweets. We felt very enchanted at being part of that unique moment. We said good-bye and returned to the store with the sensation of a job well done. We later telephoned to find out about the graduation and Daiane told us that she was very much praised, and also that the graduation was beautiful. I loved having assisted in this moment so special for Daiane. Without the assistance by my colleagues Daniela and Jaqueline, I would not have achieved this. This is the Renner way: mutual assistance to enchant our customers.

Joara Manzoni Pereira | Sales assistants | Shopping Barra Sul (RS)

MANAGING SUSTAINABILITY

Breakdown of groups per age bracket (%)*

GRI LA1 | LA13

Breakdown of groups per gender (%)¹

2012

2011

Women

Men

Women

Men

Board²

28.57

71.43

33.33

66.67

Executive Committee

16.67

83.33

16.67

83.33

Leaders (managers, coordinators and supervisors)

53.99

46.01

52.74

47.26

Administration Operations (assistants, technicians and store operations) Others

65.74

34.26

67.82

32.18

73.95

26.05

73.94

26.06

69.08

30.92

65.22

34.78

¹ Includes Lojas Renner (Admin., stores, CDs) and Blue Steel. ²T he chairman of the Board of Directors is not included, as he is accounted for in the Executive Committee.

Blacks and tawny per gender and functional level (%)1, 2

72.56

27.44

Up to 30 years

70.98

29.04

Between 31 and 50 years

72.75

27.25 Above 51 years

* Includes Lojas Renner (Admin., stores, CDs) and Blue Steel.

2012

2011

Women

Men

Women

Men

Board

0.00

Executive Committee

0.00

Leaders

4.75

3.38

4.43

Administration

1.39

0.84

1.04

0.35

Operations

23.55

7.74

22.53

7.31

Others

23.47

10.69

23.37

11.23

¹ Includes Lojas Renner (Admin., stores, CDs) and Blue Steel. ² According to self-description.

Handicapped employees per region* (% over total)

2012

2011

South

1,91

2,74

Southeast

1,13

1,44

Center-West

2,17

2,00

Northeast

1,15

1,22

North

0,46

1,36

Company overall average

1,46

1,68

* Includes Lojas Renner (Admin., stores, CDs) and Blue Steel. A number of actions have been put in place to full comply with the quota for handicapped employees, which has still not been achieved due to the scope of operations (requiring the admission of roughly 650 people in this class), and the high turnover rate in this group of staff members. Lojas Renner has entered into a Conduct Adjustment Agreement with the Labor Public Prosecutors’ Office, granting a grace period for complying with the quota.

2012 ANNUAL SUSTAINABILITY REPORT

Chief training programs Supervisor Trainee Program: develops store, merchandising and distribution center supervisors by means of technical improvement and leadership and Company Values. It has a sixmonth duration, with theoretical and practical activities.

Fundamental Leadership Program (PFL): based on a concept of ongoing Renner leadership training, the preparatory stage for a future executive career in the company.

Management Trainee Program: trains executives for stores and the procurement department, who think and decide strategically, who understand retail dynamics and act as owners of the business, encouraging competitive differentials in order to enchant customers.

Executive Leadership Program: reinforces the enchantment culture by enabling gifted staff members to become Renner leaders at different Company levels.

Magia Renner: disseminates Company culture and business strategy. To this end, the leaders themselves hold 6-hour courses in the Lojas Renner units. The topic for 2012 was Enchantment in every sense, and to commemorate 20 years of existence, Magia Renner launched an internal social network for employees to exchange experiences on enchantment.

MANAGING SUSTAINABILITY

This live training enabled 9,394 people and over 8 thousand staff members accessed the social network, which totaled 12 thousand posts.

Welcome: as of the second half of 2012, new staff members are submitted to a special program during their first 90 days of Lojas Renner. Several stages of development, in addition to monthly feedback from the supervision, provide in-depth knowledge of operations and of Renner Values.

Change Management: specific workshops are preparing employees for the expressive changes that will occur with two major projects in progress: putting in place the Shared Services Center and the Supply Chain. To date 213 employees were involved in 11 workshops in 2012 â&#x20AC;&#x201C; and work will be intensified in 2013.

Virtual Courses: every Lojas Renner employee has access to a portfolio of 142 virtual courses. There are computers in all the units dedicated to learning, and leaders and analysts may also access the system from outside the Company. There were 140 thousand participations throughout the year. On concluding their training, staff members assess their satisfaction with courses. In 2012 very satisfied assessments accounted for 95% of the total.

Corporate Education and Leadership Development TP LA10 | LA11 | LA12 | DMA LA Meritocracy pervades the development of Lo-

Another action in this regard is the Executive

jas Renner staff members. The Company pro-

Leadership Program, a part of Universidade

vides the same ladder for each employee to

Corporativa Renner and accessible to all man-

rise at a pace equal to his/her talents, efforts

agement levels. This program develops lead-

and results.

ers in order to ensure results and the pace of growth expected to sustain the business. On

It provides systematically training to its em-

the other hand, the Fundamental Leadership

ployees and totaled 133 hour of training per

Program stresses the concept of ongoing

employee in the operations of Renner and Blue

training for leaders by developing supervisors

Steel, and 60 hours per Camicado employee.

and coordinators, preparing for future execu-

Educational programs range from technical

tive careers in the Company.

training to and MBA scholarships to management education and coaching programs.

Every year Lojas Renner holds the management performance assessment, combining

Two fronts concentrate development programs:

strategic and organizational competencies

Academia Renner de Varejo for specific training

with the results gained in achieving individual

in the retail area and directed at operating area

goals. Staff members who stand out as po-

employees, and Universidade Renner that pre-

tentially positive in this assessment are labeled

pares leaders for business management.

as likely successors and undergo special development programs. The intention is to allow

Preparing and developing leaders are essential

them to exploit their skills and to expand their

aspects in sustaining growth by Lojas Renner.

corporate experiences, preparing to rise step

To this end, the Company runs the Trainee

by step on the development ladder and to

Program to prepare new store managers and

achieve ever higher positions in the Company.

supervisors, the Procurement and Merchan-

GRI LA11

dising areas and the Distribution Centers, for the development of professionals in technical

The Renner attitude is what makes the Com-

and leadership aspects.

pany different and makes it unique. Hence, this philosophy is an experience from an employeeâ&#x20AC;&#x2122;s first day at work, while participating in the Welcome Program. With a 90-day dura-

Employee development provides each one with his/her own growth prospects

tion, this program situates the new employee in the organizational culture and discloses the key HR policies and practices, encouraging the sense of belonging.

2012 ANNUAL SUSTAINABILITY REPORT

GRI LA10

Hours of training per function*

2012

2011

2010

768

144

Managers

38,970

25,874

28,543

Coordinators and supervisors

23,526

Administration (analysts and similar)

23,382

75,174

85,530

399,300

375,704

301,068

1,327,919

1,402,773

1,280,759

1,813,865

1,879,669

1,696,044

Executive Committee

Trainees Operations

Total

* Information does not include Camicado. These data began to be recorded and monitored in the computerized system put in place in 2012.

Course participants per function*

2012

2011

2010

Managers

363

312

271

Coordinators and supervisors

772

n/a

Administration (analysts and similar)

370

n/a

Trainees

309

322

12,420

n/a

14,240

640

599

Executive Committee

Operations

Total

* Information does not include Camicado. These data began to be recorded and monitored in the computerized system put in place in 2012.

MANAGING SUSTAINABILITY

Magia Renner which has been active since 1992

Other projects deserving of mention are Projeto

also stresses this one-of-a-kind culture, also contrib-

Pescar and Escola de Varejo, which prepare young

uting to disseminate this business strategy. In 2012

people in the communities where the Company op-

in commemoration of its 20 years of existence, its

erates to act in retail customer assistance. In addition

theme was “Enchantment in every sense”, and it

to a theoretical background, students are given the

launched an internal social network for staff mem-

opportunity to work as Lojas Renner apprentices

bers to exchange experiences on enchantment.

(see more on these actions in this report’s Instituto Lojas Renner item).

GRI LA11

Renner & Blue Steel ongoing education and competency management¹ (total of employee participants)

2012

2011

2010

n/a

Leaders’ Convention

398

388

325

Leadership development

713

513

427

High-performance group (GAP)

728

554

921

Focus on Reading

363

312

271

9,082

9,161

8,265

n/a

14,712

14,850

13,867

Executive Leadership Program (PLE)

622

174

667

Fundamental Leadership Program (PLF)

686

513

427

Management Trainee

154

155

125

Supervision Trainee

155

167

197

4,171

7,530

8,187

3,013

4,361

3,854

6,026

10,123

5,615

Coaching

Magia Renner MBA – Retail Management – in company (scholarships granted) Virtual Training Program

Succession Program Rite of Passage Program

Training in anti-corruption practices (loss prevention)² Training in anti-corruption practices (money laundering prevention)³ Training in anti-corruption practices (Code of Ethics and Conduct)

Information does not include Camicado. These data began to be recorded and monitored in the computerized system put in place in 2012. 2 Annual recycling aimed at store leaders, tellers and staff members related to the Financial services department. 3 Held during the integration period for all staff members. 4 Held during the integration period for all store employees. 1

2012 ANNUAL SUSTAINABILITY REPORT

GRI LA11 | LA12

Camicado ongoing education and competency management (total of employee participants)* Coaching

Technical training

432

Behavioral training

235

Leadership Technical training

Corporate Foundations training

549

Magia Camicado

794

New Leadership program

Team Building

Cumbuca

* Camicado employees in 2012 were given 45,664 hours of training, with an average of 60 training hours per employee.

% of employees per function submitted to performance analysis*

2012

2011

2010

100

Leaders (coordinators and supervisors)

Administration (analysts and similar)

Operations

100

Managers

Others (trainees) * Includes Lojas Renner and Blue Steel.

Communications Channels Communications is easy and transparent at

Planeta Renner: an in-house magazine pub-

Lojas Renner. Doors are always open to staff

lished monthly with tips on fashion, photos of

member to give compliments, make sugges-

activity in the stores and a profile of employee

tions, clear up doubts or lodge complaints.

teams, in addition to the chief news on Lojas

See below the key communications channels

Renner. Can be taken home by employees.

with internal stakeholders. Planeta Informa: a bulletin-board newsletCanal Renner: a TV program with Rennerâ&#x20AC;&#x2122;s

ter permanently displaying internal campaign

main newscasts. Employees watch this 15 to

posters of notices and local information on

20 minute program every month, commented

each unit.

by a Company leadership.

MANAGING SUSTAINABILITY

Líder@Renner: an email sent to leaders

Palavra do Presidente: an exclusive channel

whenever necessary to deal with strategic

from the CEO’s office with staff members, plus

topics that should be shared with the team.

an email sent whenever necessary, intended for every Company employee. For those with

Café com a Diretoria: staff members may

no corporate email, leaders will be in charge of

enroll to have breakfast with a Lojas Renner

sharing information.

executive officer. Among those who enrolled, 15 people will be drawn for a chat, the subject

Fale com o RH: a permanent and direct link

of which is selected by employees themselves.

from employees to the HR area to cover subjects of interest to the former, clear up doubts

Ponto de Partida (PP): every day at the start

or make suggestions.

of the working day, store employees will have a brief meeting to coordinate information, speak of goals and other important topics related to their functions. This meeting will be held every week in the administration areas.

Face-to-face interaction, TV, magazine and electronic channels ensure transparent communications with staff members

Customers GRI PR1 | PR3 | PR5 | DMA PR The Enchantment Philosophy dictates the

Mystery shoppers regularly visit the stores

pace of Renner’s relations with its customers.

and assess performance by employees in the

As it is evident in each gesture by Company

front line of customer assistance. This practice

staff members, this attitude and work form

awards employees with the best performance

constantly seeks to exceed expectations and

in enchanting customers.

provide experiences. No problem is simply left aside: employees know that responsibility

Stores are designed and furnished in order

for customer satisfaction lies with everybody

to engross customers in their purchases, be-

and is shared, and they feel as owners of the

sides making it easier to select items. In ample

business compelled to immediately solve any

spaces with music by Rádio Renner, collec-

inappropriate situation.

tions are displayed in accordance with the Lifestyle concept, making the entire experience more practical and customer empathy with items that attract them much quicker. Concern by Lojas Renner with customers is also related with health and safety in the use of its goods. Clothing items are made to ensure comfort, and to this end they may include felt linings (in embroidery) and a larger percentage of elastane (in blue jeans), in addition to embodying modeling patterns that favor mobility. Alchemia brand goods intended for modern women’s appearance and well being strictly follow the rules and procedures by Agência Nacional de Vigilância Sanitária (Anvisa). This Lojas Renner brand provides a portfolio for a complete beauty ritual, including lines of a social and environment trend (Alchemia Bio) and goods for the home. The labeling of textile goods complies with Inmetro rules and in Alchemia labels meet Inmetro standards on volume and Anvisa’s RDC 79.

MANAGING SUSTAINABILITY

ENCHANTMENT STORY

A very special gift I was in the men’s department when I noticed a customer who seemed to need help. I politely offered to assist. She introduced herself as Sueli and said that she was looking for a white handkerchief. I inquired whether she had not liked any of the options and she replied that what she really needed was a white handkerchief to give to her father for his birthday. She had gone through a number of stores in search of one, but could not find it. I asked why she preferred white and she explained that when her father was a child her grandmother used to buy him white handkerchiefs only, and they were all starched and embroidered with his name. On her grandmother’s decease, her father went on using white handkerchiefs, this was a form of preserving his mother’s presence with him. But as the years went by, the handkerchiefs given to him by his mother wore out – he had only one remaining, which he kept as a relic. She told me this story with emotion and tears in her eyes. I felt that this customer could not leave our store in that condition. Her father’s birthday was on Saturday. I told her not to worry any longer and to return on Friday, I would find a way. I asked her to bring her father’s handkerchief on the following day, for me to see how it was. I woke up on Thursday and went out looking for the white handkerchief, but unfortunately I could not find a similar one. So I went to a textile store and took the customer’s handkerchief with me. As soon as I arrived, I asked the saleswoman if she had a fabric similar or the same, and luckily she had. With this fabric in hand, I decided to make not only three, but one dozen handkerchiefs. I took the fabric to my grandmother’s home for her to embroider it as the one I had in hand. Before asking my grandmother, I told the story of Sueli’s father. She was moved and said that it was incredible that something so simple had acquired so much value. Finally to our surprise, the handkerchiefs came out just like the original! We both were satisfied and anxious to hand over the great surprise to the customer. I purchased a small box and secured it with a beautiful blue bow together with a card. On Friday, as had been arranged, the customer arrived and I soon noticed her anxiety. As I handed her the box I saw her eyes sparkle. She smiled, hugged me and said: “Never had anyone given me so much attention.” I replied that it was from my heart. When she opened the box and saw the handkerchiefs, she cried emotion and thanked me so much. She said that they were beautiful, just like those that her grandmother used to make for her father. At that moment I had a huge sensation of mission accomplished. On the following day her father phoned to thank for this great gift that I had helped his daughter give him. I was enchanted with the phone call. I felt that in fact who enchants ends up being enchanted.

Michele Aparecida de Oliveira Santos | Sales assistant | Shopping Maxi Jundiaí (SP)

Communicating with Customers GRI PR5 | DMA PR Fale Conosco (Speak to Us) is customer assis-

2013. The Company was the only department

tance tool that Lojas Renner provides on the

store included in the report disclosed. Always

Company’s site (Customer Assistance). Emails

with an eye on social networks, in addition to

received through this channel are answered in

Facebook, Twitter and Instagram, Renner was

not over 72 hours. The number of events, the

also the country’s first department store to

area involved and reply time are monitored,

disclose its profile in Pinterest and the mobile

and efforts are made to solve the problem in

application in 2012 (see more below).

question and to enchant customers. Customer relations is also monitored in the soLojas Renner took part of the IndexSocial

cial networks and in case of any complaints,

ranking among the 10 Brazilian brands with a

these are forwarded through the channel.

greater commitment in social networks such

Suggestions and complaints sent to newspa-

as Facebook and Twitter, in November and

pers, totaling 52 publications during the year,

December 2012, and January and February

are handled by Corporate Marketing.

2012 ANNUAL SUSTAINABILITY REPORT

Lojas Renner also participates in the Con-

Lojas Renner Mobile Application

sumer Board, a qualitative survey formed of

Lojas Renner was once again a pioneer in its

customer groups that discuss topics such as

activity when it launched Brazilâ&#x20AC;&#x2122;s first mobile

image, quality of assistance, comfort of store

application for a fashion store. This tool con-

environment, and new products acceptance.

tains in one place only exclusive fashion con-

This information is employed by the Company

tents from the Estilo Renner blog in Facebook,

to enhance its good and services.

Instagram and Pinterest. It also contains new editions of Renner magazine, promotions and

In Camicado, the key customer interaction

a virtual dressing booth.

channels include price surveys, variety and quality, diagnosis research, assistance through

The application is free of charge and compat-

online chats, and Contact Us through e-mail. In

ible with the iOS and Android systems, and a

2012 Camicado intensified its presence in so-

simplified version of Windows 8. Relying deeply

cial networks such as Facebook, Twitter, Insta-

on social media is very much in line with the

gram and Pinterest, and created the Camicado

innovation background by Lojas Renner and

blog, with tips on cuisine, home organization,

with its close relations with women in the fast

marriage and decoration.

fashion and online era.

Rennerâ&#x20AC;&#x2122;s figures in the social media (year-end 2012) Blog

Estilo Renner

1.8 million fans

thousand

followers

MANAGING SUSTAINABILITY

Over Average 1,369,319

one thousand

of one thousand

followers

visits per month

views

Customer satisfaction and enchantment are measured in the stores themselves Online Business In 2012 a new e-commerce platform was launched

This model was adopted in the 1990s with the Com-

in accordance with Lojas Renner’s positioning, dis-

pany’s clear intention of applying the Enchantment

playing goods based on fashion trends, more modern

Philosophy, when companies were still starting to be-

and with an improved usability. The www.lojasrenner

come aware that they should meet new customer ex-

site provides a complete mix of apparel, footwear, ac-

pectations and needs. Currently all the Renner stores

cessories and toiletry line, underwear, and watches,

are equipped with Enchantmeters.

unique payment terms, discounts and special price and delivery conditions.

Customer reactions are inserted in the Lojas Renner intranet on a daily basis and consolidated every month

The Enchantmeter

GRI PR5 | DMAPR

by the Corporate Marketing area for in-house dis-

Lojas Renner was the first fashion store in Brazil that

closure. The stores have monthly goals for positive

measured customer satisfaction in the store itself, right

customer assessments. A ranking is prepared every

after the purchase experience. The Enchantmeter as it

month of the best placed stores, bearing in mind the

is known, is found at the stores’ exits and allow cus-

very satisfied score and the mystery shopper’s score.

tomers to assess whether they were very satisfied,

Base on this outcome, those stores placed first during

satisfied or dissatisfied. This is the opportunity to keep

three consecutive months, or five alternate months in

the thermometer turned on permanently, measuring

the same year, are financially rewarded.

vital signals and solving problems expediently.

www.lojasrenner.com.br

2012 ANNUAL SUSTAINABILITY REPORT

Customer satisfaction percentage until December 2012 OPINION

January

February

March

April

May

June

Very satisfied

60.02

61.17

61.92

61.39

60.73

61.07

Satisfied

36.70

35.71

35.08

35.50

35.88

35.75

3.28

3.12

3.00

3.12

3.39

3.18

Dissatisfied

The Enchantment Philosophy

Enchantment

Expectations

Satisfaction

Customer Data Privacy GRI PR8 | DMA PR

MANAGING SUSTAINABILITY

Lojas Renner sends news and information to

Owing to its commitment with respect for its

its customers whose email addresses were

customers and compliance with their needs

registered in its database, whether due to the

and desires, Lojas Renner will stop sending

use of communications channels or to online

emails to customers who request cancella-

purchases. The idea behind this practice is to

tion of such news, and will not get in touch by

involve customers in the Renner world, putting

telephone with customers who register in the

them in tune with everything that occurs, new

Procon S達o Paulo Blocking Receipt of Telemar-

collections, promotions and trends.

keting Calls.

July

August

September

October

November

December

TOTAL

61.58

61.88

61.70

60.81

61.88

61.84

61.36

35.07

35.42

35.38

34.13

34.65

34.42

35.26

3.35

2.69

2.92

5.06

3.48

3.74

3.38

Supplier Chain TP EC6 | HR1 | HR2 | HR6 | HR7 | DMA EC | DMA HR

Management of the supplier chain takes place by means of two different areas. Supplier Management (GFO) is in charge of resale item suppliers, while Administration Supplier Management (GFA) is in charge of all other supplies, from retaining builders for new stores to office supplies, uniforms and other services. Despite not having a formal policy for retaining local suppliers, Lojas Renner has an expressive percentage of its purchases with this class of suppliers, as shown in the table that follows.

Supplier chain

Total suppliers a) Total expenditures with local suppliers (R$ thousands) % of expenditures with local suppliers b) Total expenditures with overseas suppliers (R$ thousands) % of expenditures with overseas suppliers Grand total expenditures with suppliers (a+b) (R$ thousands)

GFA2

GFO³

2012

2011

2012

2011

1,481

1,414

636

616

617,338

455,417

1,286,119,446

1,174,730,530

100

7,700

n/a

388,732,122

276,082,400

n/a

625,038

455,417

1,674,851,568

1,450,812,930

Data in this table consider Lojas Renner and Blue Steel transactions only. There is currently no formal policy granting priority to local suppliers. ² The GFA considers local suppliers all domestic suppliers, as the delivery of goods takes place in every state where Lojas Renner has branches. ³ The GFO perfected its rating criteria for local suppliers. This class until 2011 included suppliers located in the same states as the then existing Distribution Centers (SP and SC). As of 2012, the GFO adopts the same criteria as the GFA, considering local suppliers as domestic suppliers. Data considered embrace suppliers of resale items to Renner and Blue Steel stores. Period under consideration: calendar year 2012 when there were 177 Renner and 4 Blue Steel stores.

2012 ANNUAL SUSTAINABILITY REPORT

Resale Suppliers Management (GFO) GRI HR1 | HR2 | HR4 | HR5 | HR6 | HR7 | DMA HR

Selecting resale suppliers takes place based

Audits are an important tool to mitigate risks

on supply and demand criteria, competitive-

and to develop resale suppliers employed by

ness, quality, productive capacity and com-

Lojas Renner. GFO currently run three differ-

pliance with Lojas Renner requirements. In

ent audit procedures. The Process Audit, per-

compliance with its Values, Lojas Renner does

formed by an outsourced firm, was started

not have agreements with suppliers that use

in 2006 and takes place according to criteria

child labor, forced or slave labor, insecure en-

defined by Lojas Renner, covering issues re-

vironments, discrimination attitudes, corporal

garding quality, manufacturing processes, fa-

punishment, psychological coercion, sexual or

cilities and social responsibility. In 2010 with

oral harassment, in connection with its work-

the creation of the Supplier Certification Pro-

ers. It is essential and required that in every

gram by AssociaĂ§ĂŁo Brasileira do Varejo TĂŞx-

agreement that suppliers should formalize

til (ABVTEX), this entity began to be in charge

concurrence with human rights principles. In

also for Social Responsibility Audits in cloth-

this regard, in 2012 there were no cases of

ing suppliers for criteria such as: child labor;

discrimination.

forced labor or that analogous to salve labor; irregular foreign labor; freedom of association;

Retaining resale suppliers is not limited to de-

discrimination; abused and harassment; health

tecting and mitigating risks. More than this, it is

and occupational safety; monitoring and doc-

related to the involvement by this chain in the

umentation; compensation; working hours;

practice of principles in which the Company

benefits; monitoring the productive chain; the

believes and that contribute to sustainable de-

environment. Hence, currently the Process

velopment and respect for human rights. All

Audit is held only with resale suppliers not in-

these suppliers undersign the Renner Supplier

volved with apparel. Finally, the Sub-contractor

Agreement jointly with the Renner Supplier Re-

Audit is applied since 2010, also by an out-

sponsible Conduct Agreement, formalizing con-

sourced company, to supplier sub-contractors

currence with principles related to human rights.

of apparel with the purpose of minimizing risks related to regular working conditions.

MANAGING SUSTAINABILITY

ENCHANTMENT STORY

Happy customers! My enchantment story began when I received a Fale Conosco email. Customer Ana used to tell us that she loved a Cortelle blouse, which unfortunately was stolen from her house. Ana had searched everywhere in stores in her region and also in the virtual store, but could not locate it. She was very sad, it was hard for her to like a blouse so much. That was when I decided to enchant this customer, as I wanted so much to make her happy! I phoned our supplier to check on the possibility of making a similar blouse for this customer. After a long search for the fabric, the suppler found a surplus item of size 50, exactly Ana’s fit. The supplier then sent me the blouse and I forwarded it to her house. She thanked me so much, she had never expected a gesture like this one and was extremely happy! At the end of her email she wrote: “Thank you, Renner! You are surprising!”

Josiane Peres da Rocha | Procurement Assistant | Administration

Other highlights are the Crescendo Juntos pro-

Value chain management

gram, held during the year with the purpose of encouraging and making apparel resale suppliers aware of the importance of qualifying in

700

636

616

the ABVTEX Program. In order to ensure understanding and compliance with goals, these events were regionalized. In March local suppliers in the states of Rio Grande do Sul and

238

242

280

Santa Catarina were made aware. The event for suppliers in other states was held in June, save for the state of São Paulo, as the event for these suppliers took place in 2011.

2012

2011

2010

Total active suppliers with orders during 2012 Productive suppliers audited (process + social responsibility)

2012 ANNUAL SUSTAINABILITY REPORT

Program stages 1. Notice: in March 25 selected suppliers partici-

The IDGF monitoring began with a group of 25

pated in the Crescendo Juntos event, kicking off

suppliers selected for the Ongoing Improve-

the program.

ment Program, based on their share in the total sum of the year’s purchases. The program aims

2. Diagnosis of needs: between April and May,

to strengthen Lojas Renner’s relations with its

weaknesses and improvement opportunities

suppliers and is composed of 4 stages (see

were detected in supplier processes by means

the table). Lojas Renner intends during 2013

of technical visits.

to extend this action to 30 suppliers, selecting them according to their share in the strategic

3. Treating diagnoses: the 3 topics given priority

and purchase value, in addition to the risk they

– problem analysis and solving, sub-contractor

are likely to pose to the business.

management and production layout – are being in September with the attendance of 25 suppli-

Administration Supplier Management (GFA) DMA EC | DMA HR

ers. In addition to live training, virtual courses are

As a part of the CSC Project, the Supplies de-

made available for suppliers. Other courses are

partment was remodeled in 2012, giving rise

expected for the first half of 2013.

to the Administration Suppliers Management

addressed in training courses. The first was held

area (GFA). This new area has as its key objec4. Consultancy and monitoring: together with

tives strategic discussions with its best suppli-

training, the Lojas Renner Supplier Management

ers in the world scenario, and the detection of

monitors supplier performance since September

innovative opportunities to create exceptional

2012.

results and the enchantment of customers. It is in charge of annual procurement planning,

Qualifying Suppliers

prospecting, ratifying and supplier assessment,

The Restructuring Project in the Supplier Man-

as well as for risk management and non-resale

agement area begun in 2011 and concluded in

purchase agreements. GRI EC6 | HR2 | HR6 | HR7

2012, was an important landmark in defining the area’s key processes. With over R$1 million

Following implementation of the area’s gover-

in investments, this change defined key pro-

nance project estimate for July 2013, the GFA

cesses for supplier activities, metrics and man-

will be enabled to strategically manage is sup-

agement indicators. It also involved, among

plier base, with the use of commercial, financial

other topics, selecting, ratifying and monitor-

and social performance indicators, and to put in

ing suppliers, contract and audit management,

practice action to correct any deficiencies and

and relationship assumptions. One of the proj-

risks detected.

ect’s important results was the creation of the Supplier Global Performance Indicator (IDGF), consisting in quality, commercial, logistics and social indicators.

MANAGING SUSTAINABILITY

Over R$ 1 million was invested in enhancing supplier relations

Community and Government TP SO5 | SO6 | DMA SO | DMA HR

Lobby and Social Influence Lojas Renner is active in furthering public poli-

most representative business centers, forming

cies that contribute to develop the country and

part of the employer entity in the discussion

improve retail trade. This contribution takes place

committee facing its employees’ trade unions.

through participations in entities such as As-

The same seriousness and responsibility are

sociação Brasileira do Varejo Têxtil (Abvtex) and

enforced in complying with resolutions arising

Instituto de Desenvolvimento do Varejo (IDV). As

from collective agreements, ensuring trans-

provided in its Code of Ethics, the Company does

parent, fair and professional relations.

not make financial contributions to political parties, candidates or related institutions.

Every employee is covered by collective agreements. These are also represented by

Trade Union Relations

the Sindicato dos Empregados do Comércio

The Company’s commitment with regard to

(retail employees’ trade union) in the different

stakeholder relationships is also present in

venues. Notice on operating changes is given

trade union relations. Lojas Renner attends

in advance, yet there are no minimum terms

every year negotiating tables in those venues

defined by the Company with regard to no-

where it has a large number of stores and in its

tices. GRI LA4 | LA5

2012 ANNUAL SUSTAINABILITY REPORT

ENCHANTMENT STORY

A letter to the Christmas inspector It was on a Monday, I was helping to open the store when I found a letter addressed to Santa Claus. I kept thinking that the sender might be very sad for having lost the letter, so I decided to open it. When I read it, I saw the moving story of a four-year old boy named Lucas. He wrote that he understood the difficulties should he not be given a remote control car, as his mother was unable to purchase one. At that moment I decided that I myself would enchant him with the cherished remote control car. Having the gift in hand, I called the number found in the letter next to his mother’s name, and explained the event. Much surprised, she said that her son would love the gift. On that occasion Lucas was beside his mother and inquired who she was talking to and she replied: “Lucas, I’m talking to Santa Claus, get on the phone and talk to him also.” I was speechless, surprised, when I heard that voice saying to me: “Hello Santa Claus! Is that really you?” I replied with the good old man’s voice: “Yes Lucas, it’s really me, Santa Claus.” He then asked: “Have you already bought my remote control car?” I replied “Yes, I already told your mother and both of you are coming here to the store to get it.” Everything was ready on the agreed day. When I was told that Lucas was in the store, I ran to dress the Santa Claus costume and asked my colleagues to call him. “Santa Claus, are you there?” At that moment my world stood still when I heard his voice echo through the Realize. I replied right then: “Ho, ho, ho, Merry Christmas, Lucas.” On coming out of the management room as a genuine Santa Claus, I saw Lucas for the first time. He put his hands on his head and shouted with wide open eyes: “It’s really you Santa Claus!” I raised Lucas up in my arms and we started to talk. I handed him the gift and tears and smiles overcame Lucas, his mother and several employees and customers who were watching everything. After giving many thanks, Lucas’ mother left with him beside her, playing with the remote control car that he dreamt of so much.

José Ailton dos Santos Prudêncio | Leading inspector | Shopping Pompéia (SP)

Instituto Lojas Renner

TP SO1 | SO5 | EC8 | EC9 | DMA EC | DMA SO

Instituto Lojas Renner is in charge of managing the Company’s social investments, conveying development to the communities where it is located. The institute’s primary focus is inserting women in the labor market, which is very much in line with Lojas Renner’s vocation of encouraging close relations with present-day women. This target is also in tune with furthering gender equality as disclosed among the UNO’s Millennium Development Objectives and the Women’s Empowerment Principles (UNO’s Women and the Global Pact).

MANAGING SUSTAINABILITY

Mission Investments made (R$)

People benefited 38,101

4,796,052 3,857,171 3,722,764

16,234

To encourage the insertion of women in the labor market, in support of entrepreneurial social actions put in place by civil society organizations that effectively contribute to qualify and include women and the development of communities in which Renner is active.

6,972

Forms of action 2010

2011

2012

2010

2011

2012

Number of projects

Education and Professional Training: contribution in acquiring and/or developing skills that assists in accessing the labor market. Entrepreneurship and Creation of Income: encouragement of entrepreneurship and forms of association and/or cooperation for production and service provision. Insertion in the Labor Market: support of market insertion mechanisms by providing market information, detection of work opportunities, preparation for the selection process and for inserting products in the market.

2010

2011

2012

Since its foundation in 2008 Instituto Lojas Renner has already allocated R$15.2 million in 341 projects, directly benefiting over 69 thousand people in all of Brazil’s regions. In 2012 alone R$4.7 million were allocated to actions put in practice in 17 states and in Brasilia.

The institute’s global actions are planned end prepared based on three axes: • Emancipation of women through enabling projects and the creation of employment and income. • Training young people in an unfavorable social and economic position. • Local development based on actions that enhance independence by communities and also by means of corporate volunteer actions.

2012 ANNUAL SUSTAINABILITY REPORT

Private social investment

2012

2011

2010

1,617,404.14

1,535,546.86

2,199,691.24

Local development

846,798.13

292,825.42

644,073.04

Sports

230,000.00

960,000.00

375,000.00

Culture¹

140,000.00

260,000.00

72,000.00

Training young people

393,874.45

268,800.00

183,000.00

Children and teenagers

760,000.00

540,000.00

249,000.00

Senior citizens

800,000.00

16,200.00

Total (a)

4,788,076.72

3,857,172.28

3,738,964.28

Culture²

3,249,958.00

1,942,904.00

1,830,000.00

307,684.00

44,640.00

7,848,577.50

8,123,539.00

na5

Creation of employment and income

Corporate volunteers

Humanitarian aid

Clothing donations4 Total (b)

Grand total of investments (a+b)6

11,098,535.50

10,374,127.00

1,874,640.00

15,886,612.22

14,231,299.28

5,613,604.28

¹ Investments in culture managed by Instituto Lojas Renner. ² Investments in culture managed by Lojas Renner’s Corporate Marketing jointly with Instituto Lojas Renner. ³ Sums invested in the purchase of food and clothing donations to assist towns affected by environmental disasters. 4 Clothing donations when opening Renner stores in new towns and to the RS, SC and SP state governments. 5 Sum not accounted for. 6 The sum for 2011 is different from that disclosed in the previous report, as it includes funds for clothing donations.

www.institutolojasrenner.org.br

Instituto Lojas Renner intends to invest R$21

Mais Eu Campaign

million by 2013 in projects with a priority in

The Mais Eu campaign held in 2012 exceeded

inserting women in the labor market. These

expectations with it results in excess of the

investments will be aimed at training and the

previous year’s, having collected R$1.3 million

creation of employment and income in the

in 4 days of campaigning. With the Na Renner

communities where the Company is present,

invitation, you can try on new clothes and

covering all of the country’s regions.

somebody may experience a new life, customers were inspired to combine the pleasure of a

These projects are funded by the company it-

purchase experience with the joy of support-

self, by state and federal fiscal incentives and

ing a relevant action for training and creating

funds arising from Campanha Mais Eu, which

employment and income for women. From Au-

allocates 5% of 4 days of net sales revenues

gust 13 to 16, 5% of net sales from 173 of the

to the Institute. The funds collected by the

network’s stores and from e-commerce were

campaign are allocated to the Escola de Cos-

transferred to Instituto Lojas Renner.

tura and Escola de Varejo programs, and to projects submitted by social organizations by means of call notices, in order to train women

@institutorenner

MANAGING SUSTAINABILITY

and to create employment and income.

This publicity campaign, starred by women who already had been submitted to the instituteâ&#x20AC;&#x2122;s projects, had its presence stressed in points of sales, newspaper and magazine ads, email marketing, folders, TV films and radio spots. The disclosure showed examples of people who got up and went after their dreams, worked at it and supported by Lojas Renner, were given the shove they required to get there. The campaign has been held since 2008 in order to mobilize staff members, customers, suppliers and society in general for womenâ&#x20AC;&#x2122;s cause, and has already collected R$4,937,519.81, benefiting 7,834 women through 61 projects in 17 Brazilian states and in Distrito Federal.

Creation of Employment and Income for Women GRI EC8 | EC9 | DMA EC Training actions aimed at the creation of employment and income for women include investments in social projects selected through call notices, in the Escola de Costura and Rede Parceria Social programs.

Investment in creation of employment and income projects Total investments (R$)* Projects each year Empowerment of women (women benefited yearly)

2012

2011

2010

1,617,404

1,535,545

2,199,691

3,382

3,733

4,327

* Investments arising from the Mais Eu, Escola de Costura and Rede Parceria Social campaigns (from tax rebates). The figures do not refer to sums transferred during the year but to the projects with activities over the period.

2012 ANNUAL SUSTAINABILITY REPORT

Project Supported by Call Notices The institute discloses every year a notice on social projects dedicated to training and creating employment and income for women. Those social organizations that qualify in the criteria covered by the notice may enroll their projects directly in the institute’s website. The Institute’s staff is in charge of selecting and assessing projects, which takes place as follows: score (pursuant to previously established criteria), confirmation of legal documentation and visit by social organizations. As for project monitoring procedures, social organizations with funded projects are visited regularly by the institute’s representatives, who will assess the use of funds and progress of actions. Every 3 months entities will forward reports of activities, submission of accounts and photos in evidence of achievements. During this fiscal year 32 project were sponsored throughout the country’s regions. The institute was restructured in the current year and therefore no notices were published. Nonetheless, in the absence of a notice for 2012, transfers for projects covered by the 2011 notice (disclosed in the year’s 4th quarter) continued in 2012. The next notice for the selection of new projects will be disclosed in April 2013.

Escola de Costura Renner Program The Escola de Costura Renner is another relevant program in qualifying women for the labor market. Dating back to 2011, it provides courses free of charge to adults over 18 years on using sewing machines and equipment, technical standards and topics such as health and occupational safety. This action was made possible through a partnership with Instituto Lojas Renner and Company resale suppliers, civil society organizations and Serviço Nacional de Aprendizagem Industrial (SENAI).

MANAGING SUSTAINABILITY

Our stakeholder suppliers retain roughly 70%

Training Young People GRI EC8 | EC9 | DMA EC

of the trained professionals at the end of the course. Other applicants conclude the project

Projeto Pescar

prepared to enter the labor market.

Lojas Renner is a sponsor since 2004 of Fundação Projeto Pescar, which provides

In 2012 Renner organized the first group in

technical training units for needy young peo-

the municipality of Campo Grande (MS) with

ple and their insertion in the labor market. The

25 women and in Macatuba (SP) with 62

project dates back 37 years and consists in

women. The program was extended to other

an extensive network of companies that define

towns throughout the years, and trained 849

their training courses in accordance with their

seamstresses in the entire country, by stress-

business strategies.

ing these actions. Courses provided by the Company in 2012

Parceria Social Network

were focused on two targets: one of these

The Parceria Social network is a joint action

was customer assistance, with groups in Por-

by the state of Rio Grande do Sul’s Secretary

to Alegre (RS) and Campinas (SP), and anoth-

of Labor and Social Development with social

er was logistics, with groups in São Bernardo

organizations and companies. Projects pre-

do Campo (SP). The total of 800 class hours

pared and put into practice by social entities

is divided in theoretical and practical classes,

supported by the productive sector – compa-

held in the stores or distribution centers.

nies – that fund the activity. Funds are partly provided by tax rebates (as much as 75% of

Classes are given by Lojas Renner staff mem-

ICMS tax) and by company cash flow.

bers who convey the Renner Values while sharing knowledge and retail experience with

The program’s fourth edition in 2012 includes

young students. These instructors form par-

Lojas Renner’s participation in two notices in

ticipants in the Estilo Solidário program, a Lo-

a partnership with Instituto Nestor de Paula,

jas Renner corporate volunteer project – see

involving projects in favor of women.

more below.

Lojas Renner Projeto Pescar

2012

2011

2010

Total investments (R$)

268,800

183,000

Young people trained*

139

Employability by young people (%)

* The difference in the number of youths trained by Projeto Pescar between 2011 and 2012 results from closing down of the São Bernardo do Campo and Campinas units in the course of 2012. This occurred owing to a change in legislation under the MTE Normative Ruling (MTE ordinance 723/12) which led to changes in the country’s training system. The Porto Alegre unit continues its activities. The project will be included in the Escola de Varejo activities.

2012 ANNUAL SUSTAINABILITY REPORT

Escola de Varejo Program As an example of seeking to continually enhance its activities and to meet its ensuing expansion requirements, in 2012 Lojas Renner launched the Escola de Varejo program, which encourages professional training and insertion of young people in the labor market, in a partnership with non-governmental entities. This consists in the provision of free of charge courses regarding assistance in the retail trade, ensuring employability and benefiting the regional economy, with a pilot group in Salvador (BA) formed by 18 youths. A second group of 15 participants is being organized in the same city. This action trains young people to work in the Company based on the Renner Values and is closely related to Lojas Renner business strategies and sustainability guidelines, as it expedites retaining employees already adapted to a retail profile, from local communities and young trainees. Lojas Renner staff members participating as instructors also display their solidarity through the corporate volunteer spirit acquired among the corporate values. The program was started with a pilot group in Salvador (BA) of 18 young people. A second group of 15 participants is being organized in the same city. With an estimated investment totaling R$500 thousand for 2013, the target consists in training 115 youths and expanding the number of schools to five, with new units in Santa Catarina and S達o Paulo. The target in the future is to put Escola de Varejo in place the program in all the regions covered by the Company.

100

MANAGING SUSTAINABILITY

Local Development GRI SO1 | EC8 | EC9 | DMA SO | DMA EC Bom Jesus Network The Bom Jesus network was organized in 2009 to assist the community neighboring the Lojas Renner administration facilities in Porto Alegre (RS). In involves projects directed at women, children and teenagers and is focused on inserting the community in the labor market, and integrating children and youths in educational and sporting programs. It also includes development goals devised jointly with community leaders, public bodies and companies headquartered in the district.

Bom Jesus Network¹ Total investments (R$)

20122

20113

20103

854,773.90

292,825.42

644,073.04

Total projects each year Funds arising from the Solidarity law. ² Projects supported by the first call notice. ² Projects supported by the second call notice.

The network seeks to strengthen the local

Estilo Solidário Program

community’s independence, preparing it to

Lojas Renner knows that changes in society

continue on its own on the project’s conclu-

will occur only with the participation of people

sion. The Bússola do Desenvolvimento is one

who live in it, and hence since 2009 it holds

of the highlighted actions covered by the net-

its corporate volunteer program: the Estilo

work, in a partnership with the town hall and

Solidário. This is its manner of encouraging

serving as a local development indicator, mea-

volunteer work among its staff members, in

suring the results of the actions implemented.

addition to holding online and live courses on

In 2012 the Bússola’s second edition was

the subject of individual assertion.

postponed to 2013 owing to the municipality’s electoral campaigns.

Support by Lojas Renner to this attitude is visible, for example, in the approval to carry out

During the project’s three years it was possible

such activities during working hours and limit-

to feel the improved integration by social or-

ed to four hours per month, and the use of the

ganizations and the more vigorous community

company’s physical resources such as rooms

leaderships in the district. The outcome fasci-

and support material, to organize actions and

nated everybody involved and encouraged a

hold regular meetings to monitor and assess

continued investment in the community for the

activities. To this end, the Company has vol-

next five years, intensifying the changes put

unteer groups located in its units throughout

in place.

Brazil, engaged in the Pescar and Escola de Varejo projects, as well as in other projects sponsored by the institute.

2012 ANNUAL SUSTAINABILITY REPORT

101

Social Balance Sheet Ibase + NBCT 15 TP GRI EC1 | DMA EC

1 – Calculation base

2012 – R$ thousands

2011 – R$ thousands

Net Revenues (RL)

3,645,414.00

3,105,831.00

Operating Profit (RO)

355,401.00

336,907.00

Gross Payroll (FPB)

278,719.00

232,412.00

2,076,738.00

1,776,728.00

Total Value Added (VAT)

2- Internal Social Indicators

% over RL

% over VAT

R$ % over FPB thousands

% over RL

% over VAT

Meals

21,467

7.70

0.59

1.03

24,396

10.50

0.79

1.37

Mandatory social charges

96,997

34.80

2.66

4.67

80,880

34.80

2.60

4.55

Private pension plan Health Health and occupational safety Education Culture Professional training and development Nursery and nursery subsidy Sports

0.00

24,925

8.94

0.68

1.20

21,035

9.05

0.68

1.18

787,136

282.41

21.59

37.90

0.00

311

0.11

0.01

311

0.13

0.01

0.02

902

0.32

0.02

0.04

426

0.18

0.01

0.02

8,297

2.98

0.23

0.40

7,540

3.24

0.24

0.42

326

0.12

0.01

0.02

288

0.12

0.01

0.02

0.00

Profit sharing

27,497

9.87

0.75

1.32

4,949

2.13

0.16

0.28

Commuting

15,182

5.45

0.42

0.73

14,517

6.25

0.47

0.82

Others

0.00

Total - internal social indicators

983,040

352.70

26.97

47.34

154,342

66.41

4.97

8.69

3- External Social Indicators

R$ thousands

% over RO

% over RL

% over VAT

R$ thousands

% over RO

% over RL

% over VAT

Education Culture Health and sanitation Sports

393

0.11

0.01

0.02

268

0.08

0.01

0.02

2,202

0.62

0.06

0.11

3,389

1.01

0.11

0.19

0.00

960

0.27

0.03

0.05

230

0.07

0.01

Eradication of hunger and food safety

0.00

Sectoral indicator

0.00

Others

11,872

3.34

0.33

0.57

10,799

3.21

0.35

0.61

Total contributions to society

15,427

4.34

0.42

0.74

14,686

4.36

0.47

0.83

Taxes (less social charges) Total - external social indicators

102

R$ % over FPB thousands

MANAGING SUSTAINABILITY

0.00

15,427

4.34

0.42

0.74

14,686

4.36

0.47

0.83

4- Environmental Indicators

R$ thousands

% over RO

% over RL

% over VAT

R$ thousands

% over RO

% over RL

% over VAT

4.1 – Investments related to company production/operations Expropriation of land

0.00

Environmental liabilities and contingencies

0.00

245,778

69.16

6.74

11.83

185,618

55.09

5.98

10.45

0.00

10,100

2.84

0.28

0.49

85,000

25.23

2.74

4.78

Technological and industrial development program Energy conservation Environmental education Sectoral indicator

0.00

Others

0.00

255,878

72.00

7.02

12.32

270,618

80.32

8.71

15.23

Total investments related to company production/operations

4.2 – Investments in external programs and/or projects Environmental education projects in communities

0.00

Preservation and/or recovery of

0.00

degraded environments Others

0.00

Total investments in external programs

0.00

255,878

72.00

7.02

12.32

270,618

80.32

8.71

15.23

and/or projects Total investments in the environment (4.1 + 4.2) Breakdown of investments in the environment

R$ thousands

% of total

R$ thousands

% of total

219,903

85.94

185,618

68.59

Total investments in environmental maintenance actions

25,875

10.11

0.00

Total investments in environmental offsetting actions

10,100

3.95

85,000

31.41

Total investments in environmental prevention actions

Number of environmental, administration and court proceedings filed against the entity: Sum of fines and indemnities with regard to environmental matters imposed by administration and/or courts With regard to annual goals to minimize residues, consumption in general in production/operations, to increase efficiency in the use of natural resources, the company:

5- Staff Member Indicators

Nbr of employees at end of period

0.00

( ) has no goals (X) complies with 51 to 75% ( ) has no goals (X) complies with 51 to 75% ( ) complies with ( ) complies with 76 to 100% ( ) complies with ( ) complies with 76 to 100% 0 to 50% 0 to 50%

2012

2011

IN UNITS

14,881

14,035

Nbr of admissions during period

8,142

7,330

Nbr of terminations during period

7,240

6,346

Nbr of interns Nbr of employees over 45 years of age

867

794

Nbr of employees per age bracket: Below 18 years of age

322

119

From 18 to 35 years of age

11,956

11,423

From 36 to 45 years of age

1,864

1,783

From 46 to 60 years of age

735

666

Over 60 years of age

2012 ANNUAL SUSTAINABILITY REPORT

103

Nbr of employees per education: Illiterate

556

522

12,922

12,210

1,258

1,193

Basic schooling Middle/technical schooling Higher education Post-graduates Nbr of women working in the company

179

110

10,767

10,112

% of leadership functions held by women Nbr of men working in the company

53.8

52.20

4,148

3,923

% of leadership functions held by men

46.20

47.80

Nbr of blacks working in the company

4,331

3,918

% of leadership functions held by blacks

0.71

0.53

Nbr of handicapped people

217

219

271,789.00

226,682.00

6,930.00

5,730.00

Difference between lowest salary paid by the company and Minimum Salary

4.82

4.49

6 â&#x20AC;&#x201C; Relevant information with regard to the exercise of corporate citizenship

2012

2011

Gross compensation broken down by: Employees Managers

Total number of occupational accidents Social and environmental projects developed by the company were defined by:

( ) senior management (X) senior management and managers ( ) every employee

Safety and health standards in the work environment were defined by:

(X) senior management ( ) every employee ( ) everybody + CIPA

(X) senior management and managers ( ) every employee ( ) everybody + CIPA

Regarding free trade union association, the right to collective bargaining and in-house representation of employee, the company:

( ) does not get involved (X) complies with WTO standards ( ) encourages and abides by the WTO

Private pension plans include:

( ) senior management ( ) senior management and managers ( ) every employee

Profit sharing includes:

( ) senior management ( ) senior management and managers (X) every employee

( ) are not considered When selecting employees, the same ethical and social and ( ) are suggested environmental responsibility standards adopted by the company: (X) are required

( ) are not considered ( ) are suggested (X) are required

With regard to employee participation in volunteer work programs, the company:

( ) does not get involved ( ) supports (X) organizes and encourages

Total number of consumer complaints and criticism:

in the company 84,779 in Procon and Law courts

in the company 92,429 in Procon and Law courts

Sum of fines and indemnities to customers ordered by consumer in Procon 138,084 in Law courts 11,086,984 protection and defense bodies or by Law courts

in Procon 47,332 in Law courts 9,378,547

Number of labor claims: Filed against the entity

104

MANAGING SUSTAINABILITY

850

752

Deemed with grounds

259

185

Deemed groundless

109

116

17,700.381

12,590.234

2,076,738.00

1,776,728.00

Total sum of indemnities and fine paid by order of the Law courts: Total value added payable (in R$ thousands) Breakdown by Value Added

R$ thousands

% of total

R$ thousands

% of total

Government

995,266.00

47.92

857,022.00

48.24

Employees

456,657.00

21.99

379,156.00

21.34

Shareholders

266,551.00

12.84

252,680.00

14.22

Third parties

269,414.00

12.97

203,643.00

11.46

88,850.00

4.28

84,227.00

4.74

Retained

7 – Other Information 2- Internal Social Indicators – Education: Sums invested in in-company MBAs from March 2011 to October 2012. 3- External Social Indicators – Others: Expenditures with the creation of employment and income for omen, local development, support to children and teenagers (Solidarity law), support to the elderly (Elderly fund), clothing donations to the state governments of RS, SC and SP. 6 – Relevant information with regard to the exercise of corporate citizenship: total number of consumer complaints and criticism to the company: complaints directly at the Enchantmeters in the stores. Through this system, claims are settled punctually by managers in each store. - Number of labor proceedings: to inform of labor lawsuits filed against the entity, deemed to be with grounds and groundless, those proceedings were considered that had been shelved during 2011 and 2012. Information on Camicado will be disclosed in 2013 only.

2012 ANNUAL SUSTAINABILITY REPORT

105

Index

GRI 3.12

Based on GRI guidelines, version G3.1, Lojas Renner meets the applicable Level B requisites for disclosure of information on the performance of economic, social and environmental – without external verification – and submits the assessment in connection with the company’s representation pursuant to the criteria depicted in the figure that follows:

G3 Performance Indicators for the Industry Supplement

Respond to at least 10 Performance Indicators, including at least one of each of the following areas: Social, Economic and Environmental.

B+

Information on the Management Approach for each Indicator Category.

Respond to at least 20 Performance Indicators, including at least one of each of the following areas: Economic, Environmental, Human Rights, Labor Practices, Society and Product Responsibility.

A+

The same required for Level B.

Management Approach reported for each Indicator Category.

Respond to each essential G3 Indicator and the Industry Supplement(*) with due consideration of the Principle of Materiality in one of the following forms: (a) responding to the Indicator, or (b) explaining the reason for omission

Report Assure d WithExternally External Verification

Result

Information on the G3 Management Approach

B Respond to all of the criteria listed for Level C plus: 1.2 3.9, 3.13 4.5 to 4.13, 4.16 to 4.17.

With External Verification

Result

Respond to items: 1.1 2.1 to 2.10 3.1 to 3.8, 3.10 to 3.12 4.1 to 4.4; 4.14 to 4.15.

Not required.

Result

Report Content

G3 Profile

C+

With External Verification

Level of Appliance of the Report

* Sectorial supplement in its final version.

Profile Indicators 1. Profile Indicators

Report

AR’s Pages

1.1

Statement from the most senior decision-maker of the organization (e.g., CEO, chair, or equivalent senior position) about the relevance of sustainability to the organization and its strategy.

Total

1.2

Description of key impacts, risks, and opportunities.

Total

4; 39; 40

2. Organization Profile

Report

AR’s Pages

2.1

Name of the organization.

Total

2.2

Primary brands, products, and/or services.

Total

15; 17; 19; 20; 23

2.3

Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.

Total

11; 15

2.4

Location of organization’s headquarters.

Total

2.5

Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

Total

2.6

Nature of ownership and legal form.

Total

2.7

Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).

Total

6; 11; 15; 16

2.8

Scale of the reporting organization.

Total

11; 15; 17; 48; 50; 51

2.9

Significant changes during the reporting period regarding size, structure, or ownership.

Total

2.10

Awards received in the reporting period.

Total

Global Compact

2012 ANNUAL SUSTAINABILITY REPORT

107

3. Report Parameters

Report

AR’s Pages

3.1

Reporting period (e.g., fiscal/calendar year) for information provided.

Total

3.2

Date of most recent previous report (if any).

Total

3.3

Reporting cycle (annual, biennial, etc.)

Total

3.4

Contact point for questions regarding the report or its contents.

Total

3.5

Process for defining report content, including: a) determining materiality, b) prioritizing topics within the report, and c) identifying stakeholders the organization expects to use the report.

Total

6; 7

3.6

Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, and suppliers).

Total

3.7

State any specific limitations on the scope or boundary of the report. See completeness Principle for explanation of scope.

Total

3.8

Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.

Total

3.9

Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the indicators and other information in the report.

Total

3.10

Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g., mergers/acquisitions, change of base years/periods, nature of business, and measurement methods).

Total

3.11

Significant changes from previous reporti ng periods in the scope, boundary, or measurement methods applied in the report.

Total

6; 11

3.12

Table identifying the location of the Standard Disclosures in the report.

Total

107

Report

AR’s Pages

Total

There was no external check of data regarding GRI indicators. Economic and financial data are in accordance with the Financial Statements audited by PricewaterhouseCoopers Auditores Independentes.

3. Report Parameters

3.13

Policy and current practice with regard to seeking external assurance for the report.

4. Governance, Commitments, and Engagement Governance

108

Report

AR’s Pages

4.1

Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.

Total

4.2

Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organization’s management and the reasons for this arrangement).

Total

4.3

For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.

Total

4.4

Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.

Total

29; 35

4.5

Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization’s performance (including social and environmental performance).

Total

4.6

Processes in place for the highest governance body to ensure conflicts of interest are avoided.

Total

4.7

Process for determining the composition, qualifications and expertise of the members of the highest governance body and its committees,including any consideration of gender and other indicators of diversity.

Total

34; 35; 39

4.8

Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation.

Total

11; 14

4.9

Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles.

Total

26; 28; 35

4.10

Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.

Total

34; 35; 39

INDEX

Global Compact

4.11

Explanation of whether and how the precautionary approach or principle is addressed by the organization.

Total

26; 29; 40

4.12

Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.

Total

4.13

Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization: a) has positions in governance bodies, b) participates in projects or committees, c) provides substantive funding beyond routine membership dues or d) views membership as strategic.

Total

4.14

List of stakeholder groups engaged by the organization.

Total

6; 8

4.15

Basis for identification and selection of stakeholders with whom to engage.

Total

6-9

4.16

Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

Total

7; 8

4.17

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.

Total

7; 30

Economic Performance Indicators Management DMA EC

Disclosure on Economic Management Approach

Report

AR’s Pages

Aspect

Economic Performance

Total

Financial statements | Ibase

Aspect

Market Presence

Total

67; 70; 89; 92

Aspect

Indirect Economic Impacts

Total

93 -101

Report

AR’s Pages

Aspect: Economic Performance

Global Compact

Core

EC1

Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations, and other community investments, retained earnings, and payments to capital providers and governments.

Total

51 - 55 102 - 105 Financial statements

Core

EC2

Financial implications and other risks and opportunities for the organization’s activities due to climate change.

Total

Core

EC3

Coverage of the organization’s defined benefit plan obligations.

Total

The Company does not provide a private pension plan to its employees.

Core

EC4

Significant financial assistance received from government.

Total

The Company does not receive financial assistance from the government.

Report

AR’s Pages

Global Compact 6

Aspect: Market Presence

7; 8

Aditional

EC5

Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.

Total

70 - 71

Core

EC6

Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.

Total

89; 92

Core

EC7

Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation.

Total

Report

AR’s Pages

Global Compact

Aspect: Indirect Economic Impacts

Core

EC8

Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.

Total

95 - 101

Aditional

EC9

Understanding and describing significant indirect economic impacts, including the extent of impacts.

Total

96 - 101

2012 ANNUAL SUSTAINABILITY REPORT

109

Environmental Performance Indicators Management DMA EN

Disclosure on Environment Management Approach

Report

Aspect

Materials

Partial

8; 9

Aspect

Energy

Total

59; 66

7; 8; 9

Aspect

Water

Total

7; 8; 9

Aspect

Biodiversity

Total

7; 8

Aspect

Emissions, Effluents, and Waste

Total

59; 60; 62; 65; 66

7; 8; 9

Aspect

Products and Services

Total

58 - 60; 62; 64; 66

7; 8; 9

Aspect

Compliance

Total

Aspect

Transport

Total

60; 65

Aspect

Overall

Total

7; 8; 9

Report

AR’s Pages

Global Compact

Partial

Total

8; 9

Report

AR’s Pages

Global Compact 8

Aspect: Materials Core

EN1

Materials used by weight or volume.

Core

EN2

Percentage of materials used that are recycled input materials.

Aspect: Energy

Global Compact

Core

EN3

Direct energy consumption by primary energy source.

Total

Core

EN4

Indirect energy consumption by primary source.

Total

Aditional

EN5

Energy saved due to conservation and efficiency improvements.

Partial

7; 8; 9

Aditional

EN6

Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.

Total

23; 66

7; 8; 9

Aditional

EN7

Initiatives to reduce indirect energy consumption and reductions achieved.

Partial

7; 8; 9

Report

AR’s Pages

Global Compact 8

Aspect: Water Core

EN8

Total water withdrawal by source.

Total

Aditional

EN9

Water sources significantly affected by withdrawal of water.

Total

Aditional

EN10

Percentage and total volume of water recycled and reused.

Total

7; 8; 9

Report

AR’s Pages

Global Compact

Aspect: Biodiversity

110

AR’s Pages

Core

EN11

Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.

Total

7; 8

Core

EN12

Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.

Total

7; 8

Aditional

EN13

Habitats protected or restored.

Total

7; 8

Aditional

EN14

Strategies, current actions, and future plans for managing impacts on biodiversity.

Total

7; 8

Aditional

EN15

Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.

Total

Aspect: Emissions, Effluents, and Waste

Report

AR’s Pages

Global Compact

Core

EN16

Total direct and indirect greenhouse gas emissions by weight.

Total

Core

EN17

Other relevant indirect greenhouse gas emissions by weight.

Total

Aditional

EN18

Initiatives to reduce greenhouse gas emissions and reductions achieved.

Total

60; 66

7; 8; 9

Core

EN19

Emissions of ozone-depleting substances by weight.

Not applicable, as there is no productive process likely to emit these pollutants.

INDEX

Not applicable

Not applicable, as there is no productive process likely to emit these pollutants.

Total

62; 63

Total number and volume of significant spills.

Total

EN24

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.

Total

EN25

Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff.

Total

7; 8

Report

AR’s Pages

Global Compact

Total

58 - 60; 62; 64; 66

7; 8; 9

Partial

58; 64

7; 8; 9

Report

AR’s Pages

Global Compact

Total

There were no cases.

Report

AR’s Pages

Global Compact

Total

60; 65

Report

AR’s Pages

Global Compact

Total

7; 8; 9

Global Compact

Core

EN20

NO, SO, and other significant air emissions by type and weight.

Core

EN21

Total water discharge by quality and destination.

Core

EN22

Total weight of waste by type and disposal method.

Core

EN23

Aditional

Aspect: Products and Services Core

EN26

Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.

Core

EN27

Percentage of products sold and their packaging materials that are reclaimed by category.

Aspect: Compliance Core

EN28

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.

Aspect: Transport

Aditional

EN29

Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce.

Aspect: Overall Aditional

EN30

Total environmental protection expenditures and investments by type.

Not applicable

Labor Practices and Decent Work Performance Indicators Management DMA LA

Disclosure on Labor Practices Management Aprroach

Report

AR’s Pages

Aspect

Employment

Total

67 - 70; 75

Aspect

Labor/Management Relations

Total

1; 3

Aspect

Occupational Health and Safety

Total

72 - 74

Aspect

Training and Education

Total

79 - 82

Aspect

Diversity and Equal Opportunity

Total

75 - 77

1; 6

Aspect

Ratio of basic salary between men and women

Total

70; 72

Report

AR’s Pages

Global Compact

Aspect: Employment LA1

Total workforce by employment type, employment contract, and region, broken down by gender.

Partial

67 - 69; 75; 77

Core

LA2

Total number and rate of new employee hires and employee turnover by age group, gender, and region.

Partial

67 - 69

Aditional

LA3

Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.

Total

70 - 72

Core

2012 ANNUAL SUSTAINABILITY REPORT

111

Aspect: Labor/Management Relations

Report

AR’s Pages

Global Compact

Core

LA4

Percentage of employees covered by collective bargaining agreements.

Total

1; 3

Core

LA5

Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements.

Total

Report

AR’s Pages

Global Compact

Total

Aspect: Occupational Health and Safety

Aditional

LA6

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.

Core

LA7

Rates of injury, occupational diseases, lost days, and absenteeism, and number of workrelated fatalities by region and by gender.

Aspect: Occupational Health and Safety Core

LA8

Aditional

LA9

Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases. Health and safety topics covered in formal agreements with trade unions.

Aspect: Training and Education

Partial

73 - 74

Report

AR’s Pages

Total

Report

AR’s Pages

Global Compact

Core

LA10

Average hours of training per year per employee by gender, and by employee category.

Total

79; 80

Aditional

LA11

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

Total

79; 81; 82

Aditional

LA12

Percentage of employees receiving regular performance and career development reviews, by gender.

Total

70; 79; 82

Report

AR’s Pages

Global Compact

Total

75 - 77

1; 6

Report

AR’s Pages

Global Compact

Total

70; 71

Aspect: Diversity and Equal Opportunity

Core

LA13

Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.

Aspect: Diversity and Equal Opportunity Core

LA14

Ratio of basic salary and remuneration of women to men by employee category, by signifi cant locations of operation.

Human Rights Performance Indicators Management DMA HR

Disclosure on Human Rights Management Approach

Report

AR’s Pages

Global Compact

Aspect

Investment and Procurement Practices

Total

41; 89; 90; 93

1; 2; 4; 5; 6

Aspect

Non-Discrimination

Total

1; 6

Aspect

Freedom of Association and Collective Bargaining

Total

90 - 93

1; 3

Aspect

Child Labor

Total

41; 89; 90; 92

1; 4; 5

Aspect

Forced and Compulsory Labor

Total

41; 89; 90; 93

1; 4; 5

Aspect

Security Practices

Total

1; 2

Aspect

Indigenous Rights

Total

None.

Report

AR’s Pages

Global Compact

Aspect: Investment and Procurement Practices

112

Core

HR1

Percentage and total number of signifi cant investment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone human rights screening.

Total

89 - 90

1; 2; 4; 5; 6

Core

HR2

Percentage of signifi cant suppliers, contractors and other business partners that have undergone human rights screening, and actions taken.

Total

89 - 91

1; 2; 4; 5; 6

Aditional

HR3

Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

Total

1; 2; 4; 5;

INDEX

Aspect: Non-Discrimination

Report

AR’s Pages

Global Compact

Core

Total

1; 6

Report

AR’s Pages

Global Compact

Total

1; 3

Report

AR’s Pages

Global Compact

Total

41; 89; 90; 92

1; 4; 5

Report

AR’s Pages

Global Compact

Total

41; 89; 90; 93

1; 4; 5

Report

AR’s Pages

Global Compact

Total

Lojas Renner has no surveillance personnel in its stores, but rather inspectors that assist in inhibiting the theft of goods. In the event of such cases, the inspectors are instructed to call on the shopping mall’s surveillance team.

1; 2

Report

AR’s Pages

Global Compact

Total

None.

Global Compact

HR4

Total number of incidents of discrimination and corrective actions taken.

Aspect: Freedom of Association and Collective Bargaining

Core

HR5

Operations and significant suppliers identifi ed in which the right to exercise freedom of association and collective bargaining may be voilated or at significant risk, and actions taken to support these rights.

Aspect: Child Labor

Core

HR6

Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor.

Aspect: Forced and Compulsory Labor

Core

HR7

Operations and significant suppliers identifi ed as having signifi cant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor.

Aspect: Security Practices

Aditional

HR8

Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations.

Aspect: Indigenous Rights Aditional

HR9

Total number of incidents of violations involving rights of indigenous people and actions taken.

Society Performance Indicators Management DMA SO

Disclosure on Social Management Approach

Report

AR’s Pages

Aspect

Local Community

Total

30; 93 - 101

Aspect

Corruption

Total

Aspect

Public Policy

Total

93; 94

Aspect

Anti-Competitive Behavior

Total

None.

Total

In 2012 Lojas Renner was fined R$348,101 owing to administrative proceedings by the Ministry of Employment and Labor due to non-compliance with the full allowance for hiring handicapped persons – article 93 in Law No. 8213/91.

Aspect

Compliance

2012 ANNUAL SUSTAINABILITY REPORT

113

Aspect: Local Community Core

SO1

Percentage of operations with implemented local community engagement, impact assessments, and development programs.

Aspect: Corruption

Report

AR’s Pages

Global Compact

Total

30; 93 -101

Report

AR’s Pages

Global Compact

Core

SO2

Percentage and total number of business units analyzed for risks related to corruption.

Total

Core

SO3

Percentage of employees trained in organization’s anti-corruption policies and procedures.

Total

Core

SO4

Actions taken in response to incidents of corruption.

Total

Report

AR’s Pages

Global Compact

Aspect: Public Policy Core

SO5

Public policy positions and participation in public policy development and lobbying.

Total

Aditional

SO6

Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.

Total

Report

AR’s Pages

Global Compact

Total

None.

Report

AR’s Pages

Total

AR’s Pages

Aspect: Anti-Competitive Behavior Aditional

SO7

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes.

Aspect: Compliance

Core

SO8

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

Global Compact

Product Responsibility Performance Indicators Management DMA PR

Disclosure on Products and Services Management Approach

Report

Aspect

Customer Health and Safety

Total

Aspect

Product and Service Labeling

Total

84 - 88

Aspect

Marketing Communications

Total

Aspect

Customer Privacy

Total

None.

Total

In 2012 the Administrative Appeal filed by the Company against the Deficiency Notice by PROCON São Paulo was judged, regarding non-compliance with State Law No. 13,747/2009, which requires suppliers to specify a shift to deliver goods and/or provide services.

Aspect

114

INDEX

Compliance

Global Compact

Aspect: Customer Health and Safety

Report

AR’s Pages

Global Compact

Core

PR1

Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

Total

Aditional

PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.

Total

None.

Report

AR’s Pages

Global Compact

Aspect: Product and Service Labeling Core

PR3

Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.

Total

Aditional

PR4

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.

Total

None.

Aditional

PR5

Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.

Total

84 - 88

Report

AR’s Pages

Aspect: Marketing Communications Core

PR6

Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship.

Total

There is not any.

Aditional

PR7

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes.

Total

None.

Report

AR’s Pages

Total

None.

Report

AR’s Pages

Total

Aspect: Customer Privacy Aditional

PR8

Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.

Aspect: Compliance

Core

PR9

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

Global Compact

2012 ANNUAL SUSTAINABILITY REPORT

115

Corporate Information GRI 3.4

Headquarters Lojas Renner S.A. Avenida Joaquim Porto Villanova, 401 Porto Alegre (RS) â&#x20AC;&#x201C; ZIP 91410-400 Phone: + 55 51 2121-7044 Fax: + 55 51 2121-7121 E-mail: ri_lojasrenner@lojasrenner.com.br Site: www.lojasrenner.com.br

Suggestions, inquiries and comments on this report: Lojas Renner S.A. Sustainability Management Avenida Joaquim Porto Villanova, 401 Porto Alegre (RS) â&#x20AC;&#x201C; ZIP 91410-400 Phone: + 55 51 3272-2577 Fax: + 55 51 2121-7266 E-mail: relatorio@lojasrenner.com.br

116

Credits Coordination Human Resources Officer – Sustainability Management

Contents Consultancy and Graphic Design TheMediaGroup

Illustrations Design – Development and Style by Lojas Renner Initiation of chapters, tags, GHG inventories and EcoEstilo – Canhotórium Arte Aplicada Other illustrations – TheMediaGroup

Printing Braspor

Photos Social project photos – Ita Kirsch Store front photo – Celso Chittolina Other photos – Felipe Gombossy The models in this report’s photos are Lojas Renner staff members. The fees intended as payment to these models will be donated to Instituto Lojas Renner.