Sustainability
2018 Report Word from 03 56 Internal public the President
06 Identity Customer 72 experience
Scenario conception and Relationship 12 assertiveness 79 with other in demand stakeholders forecasting
Ethics, 24 transparency and integrity 90 Recognition in business
Sustainable 37 construction 95 About methods this report
Environmental 104 GRI content index 53 solutions for 120 Preparation enterprises
In 2018, we adopted the right strategy, based on organic growth with efficiency gains and Word from improved productivity, and we have achieved a higher profitability. The focus on the production of economic real estate, an important segment in the the President domestic context, with lower credit costs and higher demand than supply, contributed to our exceptional 102-14 | 102-15 performance and to maintain our position in the market. We obtained the best operating result in our history, with records of R$6.42 billion in launches and R$6.22 billion in sales, which increased our net revenue by 14.1% and net profit by 5.6% compared to the previous year.
MRV | 2018 SUSTAINABILITY REPORT 3 Contributing to our In 2018, we did a great job to expand this concept that moves us, the Purpose Project, exceptional performance which involved all areas of MRV in order to redesign our values. We understand that the and to maintain a company’s sustainability depends on the our market position is soundness of its principles and values, but they need to be improved and updated since our focus on the the significant growth we have experienced throughout our path imposes a high degree production of economic of complexity in conducting business. It is real estate, an necessary that all employees assimilate and work in accordance with our values, especially important segment in according to ethics and respect for others and the environment. Thus, together, we the domestic context updated the purpose that symbolizes our corporate culture, a task that has resulted in In this context, what distinguished 2018 from the definition directing our actions: “Building previous years regarding the performance of Dreams that Transform the World.” the “green blood” team – an internal name used to identify employees engaged and In this sense, the past year has been one of committed to our corporate culture - was great achievements. Our commitment to the fact that we made significant progress sustainability was highlighted, for example, on several fronts. We achieved greater by our permanence in the portfolio of the convergence among the various areas of Corporate Sustainability Index (ISE) of the company, which resulted in a significant B3 S.A. – Brazil, Bolsa, Balcão (B3). In addition, improvement in our teams’ performance. we are signatories of Brazil Network in the United Nations Global Covenant (UN) since We can sum up the year of our 39th anniversary 2016 - aligned with its principles, as well in one word: Purpose. It is our inspiration as with the initiatives of the Sustainable for all that we accomplish and will come to Development Goals (SDGs). accomplish. We strengthen our commitment to ethics through a high level of governance, In September, the Global Covenant Brazil with the best sustainable practices and Network held the SDGs in Brazil – The Role the pursuit of excellence in the experience of the Private Sector in New York during the of our customers through technological 73rd United Nations General Assembly, in innovation in our products, our processes and which MRV presented the case “How SDGs our operations. The company’s results also generate value for MRV” and was one of 19 support the high satisfaction of employees, companies to show its initiatives aligned partners and suppliers, as well as the respect with the SDGs. MRV was chosen among 80 and interaction with our neighbors in the projects by an independent jury committee communities where we operate, providing of PricewaterhouseCoopers (PwC) based on improvements and achievements for all those specific criteria for the event. All of this is the involved with MRV. result of a journey of many years, developed with the collaboration of all those involved, with ambitious goals and objectives focused on all dimensions of sustainability.
MRV | 2018 SUSTAINABILITY REPORT 4 Another area in which we have evolved We carried out and encouraged several projects considerably is that of consumer relations. We in Brazil and in the communities that received our expanded and consolidated the adoption of projects, impacting with their creation more than the Net Promoter Score (NPS) methodology, 325 thousand people directly and indirectly with which evaluates the client’s perception of each projects focused on improving education, and we stage of the relationship with the supplier. were able to change the realities of these people. We have strengthened the engagement of all internal areas and, along with our employees, Our challenge for the coming years is to be the we have enhanced the residents’ experience best real estate developer in the country. We before, during and after the acquisition of believe that Brazil is moving towards resuming our properties. Today, this is one of the most growth, especially if we are able to approve important projects, because we consider the reforms and changes our country needs; that purchasing a real estate goes beyond together with our continuous challenge to improve receiving its keys. It represents a lifetime dream management and indicators, we have a great for most people, involves expectations and responsibility in transforming our society. We emotions, which increases our responsibility and have taken a first step to consolidate a strategy distinguishes our performance. The Net Promoter that can be a major differentiator in the future in Score (NPS) methodology contributes to improve order to respond with innovative solutions to the our work and strengthen the partnership during changes involving society, providing a dignified the customer’s journey with us. life and better opportunities for all. This is our Purpose for the coming years: To build Dreams that During this period, we have attained Change the World. very positive results in compliance, which strengthened our controls and improved our risk management. In the area of technological innovation, we achieved excellent results through years of investment that made us the first sector’s construtech. With the advances made in 2018, we entered the industry 4.0 era, and we received awards that recognized our results, for example, our project in artificial intelligence to serve our customers.
We permanently monitor the trends in real estate consumption of future generations to offer products and services in tune with their time, besides developing skills that will support new market demands. We are a consolidated and successful company, evolving and renewing Eduardo Fischer itself without losing its values and principles. MRV CEO
Through the actions of the MRV Institute, we express the corporate vision that offering jobs is not enough; it is necessary to effectively contribute to the transformation of society.
MRV | 2018 SUSTAINABILITY REPORT 5 Identity Profile 102-15
Those who visit MRV Engenharia e Participações S.A.’s headquarters in Belo Horizonte (MG) for the first time will find an attraction that calls their attention even before they enter the building: a photovoltaic energy tree for mobile phone charging and use of Wi-Fi that stands out in the landscape and says a lot about the company. The largest residential construction company in Latin America is also
MRV | 2018 SUSTAINABILITY REPORT 6 the first to use solar energy on a large scale In 2018, the company invested R$50 million in the segment in which it operates, economic in innovation and maintained the allocation properties, in order to promote the use of clean of 1% of its budget to the MRV Institute, and inexhaustible energy in their enterprises through which it develops social projects – and should reach 100% of them by 2022. focused on the education of children and The tree also symbolizes the ramifications teenagers. Since 2017, we have replaced the that, in 39 years of history, have extended the Parque, Spazio and Village product lines – company’s presence to 159 Brazilian cities – in whose projects could no longer contain the 2018 it entered Manaus (AM) – in 22 states and innovations developed by the company – with the Federal District. the offer of the Eco, Bio, Award and Garden 102-1 | 102-2 | 102-3 | 102-4 | 102-6 | 102-7 | 102-10 models, created by experts attuned to the most advanced global trends. The concrete The stylized palm tree is also a representation wall construction method corresponded to of MRV’s commitment to the continuous the end of 2018, to 87% of all its enterprises. pursuit of excellence in sustainability management in all its dimensions – MRV ended 2018 with 22,494 direct employees governance, social and environmental. and 5,442 outsourced workers in its offices Member for three consecutive years of the and construction sites, achieving the portfolio of the Corporate Sustainability largest annual operational growth since its Index (ISE), signatory of the Brazil Network foundation. A total of 41,900 units were sold of the United Nations Global Compact (UN) and 143 projects launched, one of which led since 2016 and aligned with the Sustainable MRV to enter a new state, Amazonas. Development Goals (SDG) initiatives, the 102-4 | 102-7 | 102-8 company has adopted programs, measures and procedures for sustainable practices that span from decision-making at the highest level to the final end of its operations. 102-12
A publicly-held company, it participates, under the code MRVE3, in the Novo Mercado segment of B3 S.A. – Brasil, Bolsa, Balcão (B3), "To be green blood is to look to the future with optimism, which validates its commitment to the highest to believe that in fact we realize people’s dreams and to corporate governance practices. In addition, it know that we have a very big responsibility in relation to trades American Depositary Receipts (ADR) on our clients as well as to those who are inside MRV and the OTC PINK of the Over-the-Counter Market those who relate with it.” (code MRVNY). It also adopts corporate policies that establish high compliance criteria, Eduardo Fischer Integrity Due Diligence (DDI) and Related Party President of MRV Transactions, among others. 102- 5
MRV | 2018 SUSTAINABILITY REPORT 7 Business, mission, vision and values
102-16
BUSINESS
Incorporation, construction and sale of housing units.
MISSION To make the dream of owning a house come true by offering properties with the best cost/ benefit ratio for the client.
VISION To be the best company for the incorporation, construction and sale of economic enterprises in Brazil.
VALUES Ethics and transparency Think like the customer Shareholder value generation Committed team Sharing success Sustainability
MRV | 2018 SUSTAINABILITY REPORT 8 MRV in numbers 2018 2017 2016 102-7 | 102-8
Number of employees 22,494 14,314 14,673
Net revenue (R$ million) 5,419 4,760 4,249
Ebitda (R$ million) 988 892 637
Ebitda margin (%) 18.2 19 15
Net income (R$ million) 690 653 557
Taxes paid (R$ million) 480.9 408 384
Debt ratio (%) 8.9 6.5 5.4
Added value (R$ million) 2,404 2,140 1,902
Contracted sales (R$ million) 6,217 6,055 5,259
Contracted sales (units) 41,879 40,512 34,082
Launches (R$ million) 6,424 5,627 3,987
Launches (units) 41,195 37,155 26,366
Completed units 35,642 34,204 34,864
Works in progress (units) 242 206 214
MRV’s investments in 2018 (R$ million)
Taxes and Year Employees* Dividends Suppliers contributions “To be green blood is to 2018 769.5 480.9 455.7 1,716.8 work with identification, 2017 621.5 408.0 282.3 1,458.0 delivery and guarantee so that our customers and 2016 613.5 383.6 156.1 1,500.0 employees have the best
* Includes direct compensation, benefits and Service Assurance Fund (FGTS). vision of the company.”
Marcos Alberto Nunes Junior Administrative Analyst
MRV | 2018 SUSTAINABILITY REPORT 9 Performance NORTH Customers 331 102-6 | 102-8 Amazonas Tocantins 352 Employees Customers 193 683 NORTHEAST
3,655 43,874
Customers
Alagoas 2,585 Bahia 13,258 Ceará 8,773 MIDWEST Maranhão 516 Piauí 475
Rio Grande 5,400 do Norte 1,950 27,765 Sergipe 2,831 Pernambuco 7,011 Paraíba 3,025 Customers
Distrito Federal 5,076 Goiás 9,693 SOUTHEAST Mato Grosso do Sul 5,022 Mato Grosso 7,974 SOUTH
12,570 242,089
Units produced 4,126 61,690 in 2018: 36,977 Customers Total number of clients: Espírito Santo 9,183 Customers 376,101 Minas Gerais 51,345 Paraná 25,872 Total number of Rio de Janeiro 29,225 11,267 employees: 22,494 Rio Grande do Sul São Paulo 152,336 Santa Catarina 6,265
MRV | 2018 SUSTAINABILITY REPORT 10 Highlights from 2018 102-7
R$50 billion in 36,977 thousand Best operating Records in General Sales Value units produced, result in the net revenue, (GVS), corresponding 12.7% more than in company’s history launches and sales to 322 thousand the previous year units (land bank)
R$230 million 40 awards in areas Presentation of invested in 25 thousand such as innovation, sustainability case infrastructure units launched sustainability, studies at the UN in the neighborhoods with photovoltaic customer relations, and municipalities of solar energy execution of works, the projects among others
MRV | 2018 SUSTAINABILITY REPORT 11 Scenario Economic and industry contexts The performance of the Brazilian economy in 2018 was greatly influenced by uncertainties arising from conception and the electoral context – with the market awaiting a definition of the country’s direction until the new government was elected -, due to the truckers’ strike assertiveness and the worsening of the international scene. The result was the maintenance of the growth of the Gross Domestic Product (GDP) at the same level of the in demand previous year, 1.1%, according to the Brazilian Institute of Geography and Statistics (IBGE). The increase in forecasting the last two years, although modest, has occurred after a two-year period (2015–2016) where the annual recession exceeded 3%. The company’s Strategy and business plan management model combines strategies The strategy adopted by MRV has proven to be efficient and effective in promoting ensuring support to historical growth in the unfavorable political, economic and sectoral contexts of 2018. Four drive the expansion years ago, the company laid the foundations for this business plan, which is centered on the concept of micro-regions for land purchases IBGE data show that the civil construction and launches, which improves the balance of sector presented the fifth consecutive annual the land bank in each of the locations where drop, this time of 2.5%. It was the only sector it operates; the increase in the volume of to compose the GDP calculation to have launches in capital and metropolitan regions; retreated, a reflection of the containment of and the adjustment of sales, administrative government spending, which has a strong and other expenses (Selling, General and impact on the infrastructure area. Administrative Expenses – SG&A).
Among all segments of civil construction, This combination has resulted in secure support however, the best performance was that for the challenge of driving the expansion of of economic properties, especially those the MRV’s capital opening in 2007. Since then, contemplated by the Minha Casa Minha Vida the number of buildings signed by the brand program, according to data from Secovi-SP. with the financial agents has multiplied tenfold, In the absence of national statistics, the Real closing 2018 at 40,882 units. Estate Market Survey (PMI) of the largest union in the sector in Latin America gives a sample The strategy unfolds into a series of resources of business behavior: in 2018, sales totaled that reinforce a bold, diversified and innovative 29,929 units in the city of São Paulo (SP), a business vision. It allows the company, for growth of 26.7% compared to 2017 and higher example, to operate inspired by the retail than the annual volumes calculated since 2014. model, taking advantage of the characteristics of the markets in which it operates to intensify The supply of financing and the high its presence. By knowing the situation of demand repressed in the low-income housing land prices, the peculiarities of the place segment also drive the segment, even in and the points where the demand for real adverse industry environments. Statistics of estate is greater, in a micro-region that has its the Brazilian Chamber of the Construction enterprises, MRV is able to establish a specific Industry (CBIC) reveal that the total volume of plan to meet the needs of the micro-regions. housing financing by the Service Assurance Fund (FGTS) went from R$58.5 billion to R$59.9 Innovation, in turn, is expressed in the billion between 2017 and 2018; while in the optimization of costs and processes and in Brazilian Savings and Loan System (SBPE) solutions that improve services and provide savings, there was an increase from R$43.1 greater interaction with customers. Since billion to R$57.3 billions. These are the main when it decided to follow the experience of its types of credit for economic real estate. consumers in 2017, the company started to work to match their expectations during the whole day they are linked to it.
MRV | 2018 SUSTAINABILITY REPORT 13 Search for technology and Seeking to remain business diversification at the forefront of Still focused on customer satisfaction and digital solutions, MRV loyalty, MRV delivers differentiated, sustainable products and services of the highest quality is today the only and with innovative solutions, which causes the brand to have become an object of desire national construtech of the public seeking affordable housing. At company in the civil the same time, it keeps an eye out for changes in consumer habits to develop products and construction market services in tune with the new generations.
In line with this work, MRV considers it strategic to remain at the forefront of digital solutions. With investments of R$50 million in innovation This business plan is developed based on the in 2018, iIt is currently the only construtech in multifunctional Squad management model, Brazil in the civil construction market, because with teams organized by projects and focused it works with the most advanced technologies on problem solving and the implementation both in the way it produces its enterprises of digital products. It is a modern, agile and (hardware) with properties increasingly assertive resource, still little used in the sector. industrialized and computerized, as in the way it relates to the customer.
Market place
The construction company has a market place, an exclusive online shopping mall for its customers, bringing together the best brands in the country, with up to 35% discount on products such as home appliances, decoration, school supplies, pet products, among others. Therefore, it builds a perennial and positive relationship even after the delivery of the keys. The actions contribute to maintaining the company’s leadership in the market and to diversify its operations, offering differentiated products, with excellent location, advantages program, hiring of services, among others, with focus on experience and in customer satisfaction.
MRV | 2018 SUSTAINABILITY REPORT 14 Orbi Connects
In partnership with Inter Bank and Localiza, MRV is the maintainer of the collaborative space to foster innovation and entrepreneurship. The hub, located in Belo Horizonte (MG), brings together 16 startups in different levels of maturity and segments, promoting the integration between them in a creative environment, consisting of workstations, meeting rooms and rest areas. There are also places prepared for meetings, workshops, mentoring, among others.
In the same sense, to stimulate the innovative ecosystem existing in Minas Gerais, MRV supports initiatives such as TREE Lab, which meets the company’s purpose of promoting a business environment with more disruptive solutions that benefit everyone.
Risk management In the technological sphere, the company began to collect results from the implementation of a system supplied with the 103-2 | 103-3: Market presence | historical basis of the processes, whose information, combined, 103-2 | 103-3: Socioeconomic compliance make it possible to point out the cases where there is a risk of loss and possibility of victories in judicial cases, as well MRV operates in a sector subject to risks that require as statistics on amounts to be allocated, depending on the effective management instruments to mitigate them as process. Thus, when a process in which the probability of loss is much as possible. One of the tools adopted for this is the greater enters into, it can propose an agreement to reduce the SWOT matrix, which evaluates the business risks, validated risk and obtain savings. The resource therefore allows for more by the company’s management. In 2019, the updating strategic management of the Legal department. of the system began, as a result of the change from OHSAS-18001 to ISO-45001. The effect of this work was the reduction of 25%in the entry 102-11 of lawsuits filed by consumers in relation to 2017. In the labor segment, the decrease was of 50% in the same comparison. In In 2018, in addition to the restructuring of the this case, there was also an impact of the change in legislation Compliance area (see information in the Corporate in 2017, which brought clearer regulation on several issues that governance chapter), MRV achieved positive results were not previously well defined by labor justice. in the Legal area, in view of the work it has been developed in recent years with a preventive and In 2018, MRV won 5,000 lawsuits and settled around 7,000 consultative focus, in order to substantially reduce the lawsuits. For 2019, the goal is to win 8,000 lawsuits and settle incidence of processes that involve it. 6,000 lawsuits – in this case, the reduction in relation to the previous year is provided for by the estimated increase in the Preventive actions seek the adequacy of several internal number of cases decided in its favor. procedures to stop the emergence of future actions. To this end, MRV has conducted an analysis of the history In addition, the company has improved management by of negative results and positive, in different processes, in expanding its legal team, and no longer delegates the order to involve in training the related areas to adjust the work to third parties, since it fully complies with labor procedures based on the problems detected in order to legislation, preventing a third party employee from getting mitigate the risks and compensation expenses. the company involved in any demand.
MRV | 2018 SUSTAINABILITY REPORT 15 As of December 31, 2018, the company and of the provision. The other labor lawsuits did not give rise to an its subsidiaries were parties to 981 judicial accounting provision due to the favorable prognosis of the company’s and administrative tax proceedings. The legal advisors. The main objects involved in these processes are: total amount of these demands involved the payment of severance benefits from third parties, employment amount of R$5.9 million; of this amount, the relationship and salary funds. majority (72%) was related to administrative fines (56%) and Service Tax of Any Nature – Of the 3,878 labor demands, 744 refer to Infraction Notices issued ISSQN (16%). by the Ministry of Labor and Employment (MTE). The company 419-1 clarifies that it presents defense for each assessment and appeals, administratively, whenever the notice is deemed subsistent and On December 31, 2018, the amount of R$549,676 there are grounds for its divestiture. Even so, once the origin of the was recorded as a provision, referring to proceedings prevails, an action aiming its annulment is proposed. tax lawsuits for which the estimated loss 419-1 was classified as probable according to the prognosis of the company’s legal advisors. For 2019, MRV plans to launch a model for communicating and No claim was seen among the lawsuits that formalizing contracts with customers. The document will no longer individually represented a significant portion of be exclusively descriptive and on paper, and will become a self- the provision. The other tax and administrative explanatory contract, since many of the lawsuits filed against the proceedings did not give rise to an accounting company arise from doubts regarding the clauses. With the use of provision due to the favorable prognosis gamification and videos, the customer will get clarification about the presented by the company’s legal advisors. contract in an intuitive, clear and objective manner.
There is no relevant tax process. With the use of a mobile phone or totem, he will be led to a an interactive journey through videos and games, learning about the In the same period, the Company and contract to, at the end, decide whether to sign a short text of what its subsidiaries were part of 3,878 labor MRV has proposed in the contract itself. With this, the expectation proceedings (judicial and administrative), of is to reduce most of the lawsuits that are currently focused on which 49% of the labor claims referred to questioning the rules established in the conventional format. proceedings in which the claim against the 103-2 | 103-3: Product and service labeling Company was a conviction for subsidiary liability. The total amount involved in labor lawsuits was approximately R$129.9 million; of this amount, almost all (99%) was related to labor claims. Even so, in a conservative position, on December 31, 2018, the amount of R$39.1 million was accrued, referring to the “To be green blood is to have the feeling of ownership, 1,020 labor lawsuits in which the estimated loss the pride of being part of the company, of having was probable, according to the prognosis of followed the growth in these 22 years I have been at the company’s legal advisors, in the labor area. MRV. It’s a real sense of belonging.” Among those lawsuits, there was not one that individually represented a significant portion Igara Pessoa Executive Manager of Contracts and Receivables
MRV | 2018 SUSTAINABILITY REPORT 16 Risk Management Policy
102-11 | 102-15 | 103-2 | 103-3: Economic performance | 103-2 | 103-3: Socioeconomic compliance
MRV is exposed to a number of uncertainties evidence for the Corporate Sustainability inherent to the sector in which it operates. Index (ISE), which demonstrates to the Market volatility affects the financial and market that MRV adopts good practices in non-financial aspects of business results. To this area. The Business Risk Matrix is also a increase confidence in meeting objectives, the formalization requirement for ISO 9,001 and company identified the need to manage risks, 16,001 certifications. especially those inherent to the business that impact the strategy. The Risk and Internal Also every six months, leaders are involved in Audit area, together with the business areas, reflecting on the need to update the status prepared the Business Risk Matrix in 2016. of contingency plans for the main risks, classified into: conjuncture, credit, image, In accordance with the MRV Group’s Risk legal, liquidity, market, operation, regulatory Management Policy, the update of the and compliance. diagnosis of the 36 risks monitored in the Risk Matrix is presented every six months. Scenario analyses are also carried out with The objective of this half-yearly update is to those involved in the areas that have an provide an opinion on the internal controls interface or responsibility for the risks, in applied to strategic risks, indicators and order to understand the company’s position. degree of exposure to the impact of risks. In these analyses, assessments are made In addition, the document has been used as of the impacts that the risks may bring to the business and the probability of them materializing. After this process, actions are defined to improve the monitoring of risks and control indicators to monitor the evolution of their behavior. This work results in a contingency plan for the main risks. Every time the Business Risk Matrix is updated, a follow-up is sent to senior management.
The establishment of the Risk Management Policy aims to ensure that the responsibilities and guidelines are defined covering goals, methodologies and applicable monitoring. In addition, in monitoring risks, the MRV Group should, whenever possible, see opportunities that minimize negative aspects of activities, compensating these impacts with positive actions.
MRV | 2018 SUSTAINABILITY REPORT 17 Strategic risks
Compliance – Risk of legal, regulatory, unfavorable decision in lawsuits, reputational and/or financial penalties or administrative. resulting from non-conformities in the compliance and application of Liquidity – Risk of lack of funds to laws, and regulations and/or Code of honor commitments assumed due Conduct, Policies and Standards of to the mismatch between assets the MRV Group. and liabilities. Possibility of loss arising from the inability to make Conjuncture – Risk arising from a transaction within a reasonable losses and changes in political, time (cash). cultural, social, economic or financial conditions in Brazil. Market – Risk arising from the possibility of there being Every six months, Credit – Risk of loss resulting from pressure to change the prices uncertainty as to the receipt from of products and costs of inputs MRV updates the customers, financial institutions and for the operation. diagnosis of the collateral for financial investments. Operation – Risk of loss resulting 36 risks that are Image – Risk of loss arising from the from failure, deficiency or MRV brand being “worn out” in the inadequacy of internal monitored within market and before authorities due processes, people and systems the scope of to negative publicity, true or not. or from external events (e.g. meteorological factors). the internal Legal – Risk of loss arising from fines, penalties or indemnities Regulatory – Risk arising from Risk Matrix resulting from actions of the changes in the regulations in force, supervisory and control agencies, which may adversely affect MRV as well as losses caused by an Group’s business.
“To be green blood is to treat the company’s affairs as if they were your own. It’s really feeling like an owner, doing your job in the best possible way.”
Alex Medeiros Executive Manager of Internal Audit and Compliance
MRV | 2018 SUSTAINABILITY REPORT 18 Sustainability Policy
102-15 | 103-2 | 103-3: Environmental compliance | 103-2 | 103-3: Socioeconomic compliance
The MRV Group is a reference in sustainability and is committed to the broad spectrum among national companies – a condition that fills the dimensions of sustainability. achieved thanks to the adoption of practices that cut across all areas, and an assertive and This work has been a source of pride and its consistent Sustainability Policy. The company results reflect great achievements in 2018, is fully committed to sustainable development including the historical recognition of the and management in its main pillars – UN in relation to the company’s standard social, governance and environmental – so of excellence in its commitment to the that activities are guided by balance and Sustainable Development Goals (SDGs). The responsibility in an integrated, direct and company also achieved all sustainability transversal manner among the employees, targets in its operations throughout 2018. extending its effects to all stakeholders and (Learn more in the Sustainable construction locations where it operates. methods chapter.)
In addition, MRV meets the requirements required to integrate the ISE portfolio of B3 MRV’s full Sustainability Policy can S.A. – Brasil, Bolsa, Balcão (B3); it is a signatory be checked at the link: of the Brazil Network of the United Nations https://ri.mrv.com.br/list.aspx?idCanal=tE2ofrR9 Global Compact (UN) and the Ethos Institute; ZuNl73xRhP9YPQ==&pagina=2#ancora
MRV | 2018 SUSTAINABILITY REPORT 19 The MRV case at the UN
MRV presented a case study at the SDGs in Brazil – The Role of the Private Sector event regarding the SDGs, held in parallel to the 73rd United Nations General Assembly, by means of several panels that gathered successful experiences. The selection of Brazilian companies, which underwent several screening procedures, was carried out by an independent jury committee of PricewaterhouseCoopers (PwC) which evaluated specific criteria for approving the case.
On September 23, two company executives presented, in New York, the case “How the SDGs generate value for MRV”. The company was the only representative of the civil construction sector among the 19 businesses selected Brazilians. Each company presented the results for one of the 17 existing SDGs. MRV, however, has shown how much the SDGs generate value for itself in general terms. (Take a look in About the report to see which SDGs MRV is already in line with.)
Another striking aspect at the time was the fact that the company demonstrated that the SDGs are directly linked not only to its sustainability values, but also to its performance strategy – which does not occur in other companies. At MRV, the Sustainability Policy, the Sustainability Strategy and the Risk Matrix, and the Opportunities include the SDGs and there is a specific committee to address them.
In 2018, the construction company held training sessions with 33 internal areas to identify all the indicators that impact the initiatives linked to the SDGs, also identifying the leaders of each area in order to strengthen the engagement of its teams, which provided a mapping of the specific objective to which the work is linked and, finally, a general diagnosis of their impact on MRV as a whole.
This work allowed the SDGs, called Affinity Map, to be mapped for each area, posted in all sectors. The idea is to gather the indicators that, next year, will be adopted in new mapping by sector and for the whole company.
The MRV case was presented in two publications: Integration of the SDGs in the Business Strategy – an achievement of the Global Compact Brazil Network, of the United Nations Development Program (UNDP) and PRIME – and SDG in Brazil – The Role of the Private Sector, led by the Global Compact Brazil Network and UNDP.
The Sustainability Policy and the adoption of best practices make the company a reference in its sector
MRV | 2018 SUSTAINABILITY REPORT 20 Review of materiality
In 2018, MRV developed, in partnership with also verified MRV’s performance pillars, set TheMediaGroup, the process of reviewing its forth in internal documents, in releases to materiality matrix, whose objective was to revisit the market and in the disclosures of the the themes considered material for the company. Association of Analysts and Capital Market Investment Professionals (Apimec). All were A list of potential topics relevant to the sector analyzed and had fundamental weight for the has been drawn up based on internal and research of important themes for the sector. external documents of high importance to MRV, including MRV’s sustainability reports More than 1,000 people who are part of from previous years, sustainability reports stakeholder groups with which MRV engages from competitors in the sector (Brazil and the were consulted through an online survey, made world) and studies such as the Global Risks available between January and February 2019. Report 2019 – World Economic Forum (WEF), It was possible to perceive the engagement of Sustainability Yearbook 2018 – RobecoSAM the team of employees, responsible for more and SASB – Home Builders. The consultancy than 90% of the responses to the survey.
Material 1st Theme 6: 2nd Subject 12: Sustainable Enterprise environmental themes construction methods solutions defined on the basis 3rd Theme 2: 4th Subject 5: of the Search for technology and Ethics, transparency prioritization business diversification and integrity in business and validation 5th Topic 1: 6th Subject 8: process and Scenario conception Employee health, safety and assertiveness in and well-being addressed demand forecasting throughout the report 7th Theme 3: 8th Topic 10: Attraction, retention Customer experience and development of human capital
The process of revision of the material themes allowed MRV to reflect on the themes already worked on internally and those that should be better explored from this cycle on. (See more information about the materiality review process in About this report.)
MRV | 2018 SUSTAINABILITY REPORT 21 Economic and DVA financial performance 201-1
103-2 | 103-3: Economic performance | 103-2 | Consolidated 2016 2018 2017 103-3: Indirect economic impacts (R$ thousands) (resubmitted)
Recipes 5,624,677 4,916,558 4,389,427 In the best operating performance in its Inputs purchased from history, MRV recorded net revenue of R$5.42 (3,339,176) (2,986,604) (2,668,043) third parties* billion in 2018, an increase of 13.8% in relation to the previous year, and net income Gross added value 2,249,660 1,929,954 1,721,384 of R$690 million, 5.6% higher in the same Depreciation and (63,675) (49,186) (41,577) comparison. Gross margin remained stable amortization and expenses grew in better volume, which Net added value contributed to higher profitability. 2,185,985 1,880,768 1,679,807 and produced
The company recorded 26 quarters of * In the consolidated financial statements: (i) reclassification of capitalized interest balances referring to the company’s associates and jointly-controlled subsidiaries, recurring cash generation, totaling R$3.3 from the caption “Properties for sale” to “Investments”, in accordance with billion, having distributed R$2.3 billion in OCPC 01 – Real Estate Development Agencies, item 6, in the amount of R$13,212 dividends in the period. In 2018 alone, it at December 31, 2016 (R$11,438 at January 1, 2016); and (ii) reclassification of distributed R$456 million to shareholders capitalized interest between short and long term, in the amount of R$228,139 at and repurchased R$31 million in shares. The December 31, 2016 (R$153,282 at January 1, 2016). generation of value to shareholders was benefited by the conclusion of the spin-off of DVA (continued) 2018 2017 2016 the subsidiary Log Commercial Properties, 201-1 which started to have its securities traded on Personnel 769,465 621,531 613,486 the Novo Mercado of B3, the highest level of governance of the São Paulo Stock Exchange, Taxes, fees and 480,959 408,037 383,626 under the code LOGG3. contributions Remuneration of third 395,544 410,180 330,329 party capital
Remuneration of 758,137 700,024 574,404 13.8% increases in net equity capital Added value distributed 2,404,105 2,139,772 1,901,845 revenue and 5.6% in Added value received in transfer net income positioned 201-1 2018 as the best year regarding the company’s 2018 2017 2016 operating performance Equity in earnings (a) (27,855) (33,049) (63,407) Financial revenue 245,975 292,053 285,445
Added value to distribute 2,404,105 2,139,772 1,901,845
MRV | 2018 SUSTAINABILITY REPORT 22 At the end of 2018, MRV recorded 26 quarters of recurrent “To be green blood is to have an cash generation addiction, in the positive sense, like that of a sport. When you become part of the MRV team, you By reducing the size of MRV’s balance sheet, discover a culture that absorbs you this operation also had an effect on the return in an impressive way, making you on shareholders’ equity (ROE), which reached feel committed body and soul to 16.5%, an extremely positive indicator when your work. There is a very human compared to the industry benchmark. character in the relationship with colleagues and there is the beauty As for the Statement of Added value of the business we are doing: to (DVA), the company prepares it under the build for those who never dreamed terms of technical pronouncement CPC that it would be possible to have 09 – Statement of Added value, which is their own apartment.” presented as part of the financial statements, in accordance with accounting practices Matheus Torga adopted in Brazil, applicable to listed Investor Relations companies, while the International Financial Executive Manager Reporting Standards (IFRS) represent additional financial information.
MRV | 2018 SUSTAINABILITY REPORT 23 MRV’s presence in the portfolio of the Corporate Sustainability Index (ISE) of B3 Ethics, S.A. – Brasil, Bolsa, Balcão (B3), São Paulo stock exchange, for the third consecutive year, attests to its excellence in corporate transparency governance. This condition is the result of a series of policies and practices that support and integrity the quality of management. in business 103-2 | 103-3: Economic performance | 103-2 | 103-3: Shopping practices | 103-2 | 103-3: Anti-corruption
MRV | 2018 SUSTAINABILITY REPORT 24 In 2018, the company made further progress has allowed for a complete review and the in this area, restructuring its management improvement of instruments that prevent risks committees, which were reduced from six of non-conformities related to legislation, to three – Governance and Compliance, regulations and internal guidelines. People and Operations –, and promoting the convergence of related areas in order to improve Since its creation, the Compliance area has advice and attribution in the proposition built several pillars necessary for the even of solutions, with a view to increasing the more effective application of the Integrity effectiveness of the decisions of the Board of Program, such as Integrity Risk Management, Directors. The former committees, which are Communication and Training Plans, Due no longer structured in the new format, are Diligence, Policies and Processes, Internal represented by committees – Communication, Controls and Monitoring. Legal, Innovation, Clients, Sustainability and Sustainable Development Goals (SDGs) and In the Integrity Due Diligence (DDI) pillar, Credit Concession and Gross Margin. suppliers, service providers, sponsorships, donations, land sellers and intermediate The year was also marked by the agents were evaluated, following the process development of the Compliance area, of preventive assessment of risks of corruption, formalized in the previous period and the reputation and integrity in relationships with launch of the Integrity Program, which suppliers, service providers, partners, sponsored brings together all the policies that govern and beneficiaries of MRV, based on profile commitments to transparency, ethics and assessment, history of corruption practices and the fight against corruption, also establishing presence on restriction lists. measures for the prevention, detection and remediation of acts harmful to the Public There was also a significant evolution in the Administration, private and foreign agencies. training and awareness work of employees – an initiative called Integrity Week, which had face- MRV has had a consistent governance structure to-face agendas in 14 cities where MRV operates and compliance actions in place for many and involved more than 1,500 participants. years, and the creation of a segregated area
“To be green blood is to fly the company’s flag’ in a totally genuine way. It is to think like an owner, to be very austere in relation to the ethical precepts and cost reduction, without having to explain the MRV way of working very much, because people naturally have these commitments.”
Guilherme Freitas Legal Director
MRV | 2018 SUSTAINABILITY REPORT 25 Another highlight was the launch of the Culture MRV is one of the supporting companies of Integrity, a distance education channel of Afin, implemented by the German through which all employees with Internet access International Cooperation Agency GIZ took a course on MRV’s ethical values. More than (Deutsche Gesellschaft für Internationale 7 thousand people participated, later answering Zusammenarbeit – GIZ, GmbH), in German). It ten questions about the content taught, with is the only global multi-stakeholder initiative the goal of achieving 70% assertiveness for the that has been initiated by the government, training to be completed, without the need to which has provided support to companies to return to the program. At the end of the work, fight corruption collectively. An event on the the participants evaluated the quality of the theme was held in Belo Horizonte, open to the course on a scale of 0 to 5, 5 being the best public, which attracted more than 150 people. score, and the result was an average of 4.7. Another action was the company to company Participation is mandatory for all “green bloods”, meeting, gathering medium and small who can access the course at any time. suppliers in order to show that, even if they do not have the structure and number of MRV’s Also in 2018, representatives of MRV’s Board clients, they may adopt minimum compliance of Directors and Executive Board participated pillars, such as preparing a Code of Conduct in the “Compliance” debate: Challenges and or creating a confidential channel to receive Opportunities”, held at the headquarters of complaints of internal non-conformities that the Belo Horizonte City Hall (MG), with an require treatment. audience of over 160 people. In addition, the company brought together 25 suppliers and third parties in the training course “Training for the Prevention of Corruption from Companies to Companies”, conducted in partnership with the Alliance for Integrity (Afin).
Corporate governance policies and practices
103-2 | 103-3: Economic performance | 103-2 | 103-3: Anti-corruption
The Compliance area reviewed the main corporate policies throughout 2018, approved by the Board of Directors. All the company’s policies go through the area’s seal, and the approval must be submitted to the Board and recorded in its minutes to be considered corporate and valid in the organizational structure.
Get to know the policies adopted by the company in the following link: www.mrv.com.br/institucional/pt/a-mrv/ programa-de-integridade
MRV | 2018 SUSTAINABILITY REPORT 26 The Compliance area also participated in Its content includes guidance to employees, external institutional agendas, dialoguing partners and third parties on MRV’s rules of with representatives of society and trade ethical conduct and the behaviors expected associations and participating in initiatives that and prohibited by the company. All the norms promote ethics, like Afin’s. The objectives were that should be adopted by the professionals achieved: MRV was represented at events such are described, regardless of the hierarchical as the Ethos 20 Years/São Paulo Conference, level, and by relationship groups, such as in which it presented one of the panels; the partners and suppliers. The text also points seminar Ethics & Compliance for Effective out situations that it considers unacceptable Management, promoted by the Brazilian in relation to the work environment; Chamber of the Construction Industry (CBIC); occupational health and safety; the use and the Integrity Congress, held by Via Ética. of social networks; the company’s assets and resources, conflicts of interest, gifts Code of Conduct and gifts; and relationships with partners, customers, real estate agents and accredited
103-2 | 103-3: Anti-corruption 103-2 103-3: Environmental professionals, the press, community, assessment of suppliers | 103-2 | 103-3: Occupational contractors, suppliers, the environment, public health and safety | 103-2 | 103-3: Non-discrimination | agencies, competition and unions. 103-2 | 103-2: Forced or compulsory labor | 103-2 | 103-3: Social evaluation of suppliers | 103-2 | 103-3: Public policies In addition to the Code of Conduct, MRV MRV has a Code of Conduct aligned with developed an Integrity Pocket Guide in early the best market practices. Its first version 2018. The main themes addressed in the was formalized in 2007 and, since then, it has publication are: Information on the Integrity undergone two revisions – one in 2012 and Program; MRV values; Relationship with the the last one in July 2015 – to accompany the Public Power; Conflict of Interest, Gifts and changes and development of the corporate Gifts; Relationship with Suppliers; Donations environment and employees. All versions of the and Sponsorships; Talk to Compliance Channel; Code of Conduct were approved by the Board and Confidential Channel. In addition, there is of Directors, according to meeting minutes. a section that deals with ethical dilemmas and of how each employee should position himself. The document is available online The Pocket Guide was launched in March on the intranet, on the company’s website and on the suppliers’ portal: 2018, with a circulation of 6,000 copies, and its www.mrv.com.br/institucional/pt/ dissemination will be gradual during face-to- relacionamentos/codigo-de-conduta face events and Integrity Week.
MRV also adopts a Code of Conduct for the Work, which is a summarized version of the complete document, prepared in language Participation in and visually accessible to the public for which it is intended. institutional agendas and dialogues with representatives of society disseminate ethics
MRV | 2018 SUSTAINABILITY REPORT 27 Confidential Channel
102-17 Misconduct complaints in relation to the guidelines established by the company are forwarded, anonymously, through the Confidential Channel. The tool is important to ensure the possibility of employees, third parties and suppliers, among others, denounce acts contrary to the Code of Conduct, corporate policies and current laws. Access is available on the company’s website (www. canalconfidencial.com.br/mrv), by e-mail [email protected] and by telephone 0800 888 2833. Among the policies maintained by MRV to encourage transparency in the business is that of not retaliating against whistleblowers, which aims to protect conflict situations, including in the context of risk management.
which aimed to promote dialogue with multiple Combating corruption stakeholders on the development of integrity, the fight against corruption and the fight against 103-2 | 103-3: Anti-corruption | 103-2 | corruption and the influence of compliance 103-3: Public policies practices on the business environment. By approving the Anti-corruption Policy, MRV reinforced its commitment to maintaining The Compliance area has a structure dedicated the highest standards of integrity, ethics and to the subject with a physical structure, its own governance in the conduct of its business by budget and operating systems that support establishing Anti-corruption guidelines for both the compliance processes and activities. The public institutions and private companies. The Compliance Policy, in turn, explains the functions policy aims to ensure that all employees, MRV and responsibilities of the area and the objectives Group’s partners and suppliers understand the of the Integrity Program. In addition to this guidelines of the Brazilian Anti-corruption Law so and the Anti-corruption Policy, the Company that they comply with the guidelines to prevent maintains Corporate Relationship Policies with the and combat situations prone to acts of corruption, Government; Relationships with Suppliers, Service bribery and fraud. Providers and Intermediary Agents; Conflicts of Interest; Gifts, presents and Hospitality; Donations During the year, MRV supported the panel and Sponsorships; Consequences; Integrity “How can companies, public institutions and Due Diligence; Related Party Transactions; civil society be protagonists in the development Sustainability; Risk Management; Non-Retaliation of integrity and the fight against corruption?”, of Whistleblowers; Relationships with Interested presented at the Ethos São Paulo Conference, Parties; and Human Resources.
MRV | 2018 SUSTAINABILITY REPORT 28 In the Contact with Compliance service, in Themes addressed in 2018, the following were computed: the Code of Conduct
Anti-corruption – To reinforce MRV Group’s DDI performed 503 commitment to maintaining the highest standards of integrity, ethics and governance in 191 statements of gifts and the conduct of its business by establishing Anti-corruption guidelines for both public presents analyzed institutions and private companies.
138 consultative Gifts and hospitality – Guide and assist the compliance analyses conduct of employees in receiving or offering gifts, presents, hospitality and other benefits, in 74 Commitment view of the need to avoid actual, potential or terms analyzed perceived conflicts of interest and situations that could characterize bribery or corruption.
40 declarations of attachment Conflict of interest – Establish guidelines and guide the identification, declaration and 44 institutional letters for the resolution of situations that may present insertion of anti-corruption actual, potential or perceived conflicts of clauses and compliance interest apparent. recommendations Risk management – To express the guidelines adopted by MRV Group and its subsidiaries in In addition, 58 critical cases identified in the identification, assessment, communication 2018 that involved significant risks related to and treatment of risks, and of the opportunities corruption were addressed and mitigated. There generated as a result of its operation. were no cases of corruption in the company. 205-1 | 205-3 Climate change – Demonstrate the company’s commitment to sustainable All MRV contracts contain anti-corruption development, climate change and the clauses and provide for the construction of need to perform activities in a balanced evidence that proves its commitments to and sustainable manner responsible in the compliance in its relationship with stakeholders. various cities in which it operates. Establish principles and guidelines to be applied in the activities all over the country, with the objective of promoting the adequate management and emissions.
MRV | 2018 SUSTAINABILITY REPORT 29 No retaliation against complaint makers – Establish rules of protection for those Through its Anti- involved in internal investigations and for whistleblowers who, in good faith, report Corruption Policy, MRV conduct or facts that violate the guidelines of the Code of Conduct or applicable laws. reinforces its commitment to integrity, ethics Relationship with suppliers, service providers and intermediate agents – Guide the relations and good governance between the Supplies area and suppliers, service providers and present the general, sustainability practices in conducting and integrity criteria used in an integrated manner in the process of contracting materials, its business services and equipment.
Relationship with the Public Power – Reaffirm the integrity and transparency in the relationship responsible manner in the various cities with the Public Power and ensure the adherence in which it operates. Establish principles of the conduct of its employees to the current and guidelines to be applied in activities legislation, corporate policies and the Code throughout the country to promote sustainable of Conduct. Aims to prevent the occurrence of management in its three main pillars: social, situations, conducts and illicit acts against the governance and environment. Public Administration that may be characterized as a practice of corruption, in particular, Donations and sponsorships – Establish pursuant to the Brazilian Anti-corruption Law. guidelines for making donations and sponsorships in order to ensure that they occur Sustainability – Reveal the commitment with the highest standards of transparency, to sustainable development and the need integrity and legality. to perform activities in a balanced and
MRV | 2018 SUSTAINABILITY REPORT 30 Commitments to Investor relations external initiatives 102-43 MRV voluntarily joins a number of external initiatives, including the United Nations (UN) Global Compact 2018 was economically troubled due to the Brazil Network, which has been present in the Anti- Brazilian general elections. In this context, corruption WGs since 2016, GT ODS, Engineering the company’s IR sought to get even closer to and Climate GT, Human Rights GT, Water GT and investors, which hold 66% of the company’s Communication GT; the Ethos Institute, present since shares, in order to make clear MRV’s solidity 2016, in the GT de Integridade e GT Fórum Clima; and its commitments to governance, ethics, the Brazilian GHG Protocol Program since 2015; the compliance, people and sustainability. Carbon Disclosure Project (CDP) since 2016; the CDP IR maintains a number of channels of Supply Chain since 2018; the Blue House Seal, from communication with these audiences, on its Caixa Econômica Federal, since 2017; the ISE since 2016; corporate website, where annual and quarterly and the offset of the company’s emissions since 2015. reports and information on the progress of 102-12 business are available. The company also promotes face-to-face meetings, conferences, It is also associated with several agencies, both visits and frequent meetings with investors from linked to its sectors of activity and to issues related to different parts of the world where it discloses sustainability, among them, the Construction Industry clear information and in accordance with the Union (Sinduscon). The company is supported by rules that govern the financial market. CBIC and Afin – the Brazilian Association of Real Estate Developers (Abrainc), the Social Service for For the third consecutive year, in 2018, the Construction (Seconci), the CBIC and Afin – which it company joined the ISE, of B3, being the supported and participated in the conception of the only company in the sector to make up the Full Day of the event. portfolio, which seeks to enable a comparative 102-13 analysis of the companies listed on the São Paulo Stock Exchange under the aspect of sustainability, based on economic efficiency, environmental balance, social justice and corporate governance.
A member of B3’s Novo Mercado segment, the company strives to maintain differentiated corporate governance, being recognized for its maturity in sustainability by market analysts. 102-44
MRV | 2018 SUSTAINABILITY REPORT 31 Relationship with Governance structure the Public Power 102-18 102-43 | 103-2 | 103-3: Public policies MRV has a robust corporate governance MRV participates in the main discussions structure, continuously improved. The related to its operations, especially on labor management of the company is the legislation and financing with resources from responsibility of the Board of Directors and of the Service Assurance Fund (FGTS) through the the Executive Board. Additionally, the company Brazilian Association of Real Estate Developers has a Fiscal Council and advisory committees (Abrainc). It also maintains a cordial and healthy to the Board of Directors. In 2018, 100% of the relationship with state and local authorities senior management members (nine) were hired the interaction is conducted through agencies from the local community. such as Sinduscon and CBIC. At the municipal 202-2 level, issues are dealt with directly with the municipalities, guided by the ethical principles Stock ownership breakdown established in the Code of Conduct. 102-13 102-5
One of the guidelines of the company’s Council and Board Treasury Public Power Relationship Policy is the of Directors stock prohibition of acts of corruption and bribery in the relationship with public 0.7% 0.7% officials or other officials thirdly related to it. All employees, third parties and partners acting on your behalf are prohibited from receiving, promising, offering and/or giving, directly or indirectly, through third parties, any undue advantage for a public official or any individuals or legal agencies linked to him; finance, fund, sponsor or in any way contribute to the practice of acts harmful to the public administration; and use a representative to conceal or disguise his real Rubens Menin Other interests, or the identity of the beneficiaries of Teixeira de Souza shareholders the acts committed. 32.0% 102-13 66.6%
MRV | 2018 SUSTAINABILITY REPORT 32 Board of Directors
It is up to the board to define the strategic values. It consists of seven members, including guidelines, responsible for the general four independent members, one woman and orientation of the business plans, the six members over 51 years of age. Its President control and supervision of the company’s does not accumulate the position of Chief performance, among other things. The Executive Officer of the company. company’s Purpose, “to build dreams that 102-22 | 102-23 | 405-1 transform the world”, was approved in 2017 by MRV, which conducts work to redefine MRV’s
MRV | 2018 SUSTAINABILITY REPORT 33 The directors are elected at the Annual The Relationship Policy General Meeting for unified terms of two years, and may be reelected (the terms began with the Public Power on April 28, 2017 and will run until April 28, 2019). Ordinary meetings are held every three establishes, among months, and extraordinary meetings are held other guidelines, the whenever called by any of the members for the purpose of analyzing economic matters, prohibition of bribery social and environmental issues related to the company’s operations. These meetings may and corruption practices also include agendas submitted by leaders in relationships with and managers on sensitive topics that require analysis and deliberation of the directors. public officials The mandate of the current Council runs until April 28, 2019. 102-19 | 102-31 | 102-33 sensitive issues to the highest Board of Directors Topics considered critical or of great relevance of the company. In 2018, there was no incident are presented to the Board of Directors by or critical concern that required the referral and leaders and managers. They are responsible the analysis of the Board of Directors. for receiving/identifying, evaluating and take 102-33 | 102-34
Break down
Members of the Board of Directors Position
Rubens Menin Teixeira de Souza President
Marcos Alberto Cabaleiro Fernandez Counselor
Sinai Waisberg Independent Director
Betânia Tanure de Barros Independent Director
Marco Aurélio de Vasconcelos Cançado Independent Director
Rafael Nazareth Menin Teixeira de Souza Counselor
Antônio Kandir Independent Director
MRV | 2018 SUSTAINABILITY REPORT 34 Finance Committee Executive Board
As resolved in MRV’s Bylaws, the Finance Composed of up to ten Executive Officers, Committee is not permanent. The election of whether shareholders or not, the Executive its members – three effective members and Board is responsible for the daily management three alternates – takes place at the General of the company, with the resolution, by its Meeting at the request of the shareholders, representatives, on all the necessary or who also have the prerogative to dismiss appropriate acts in their areas, provided that the committee at any time. The most recent they are not under the exclusive competence election took place on April 19, 2018, under of the Board of Directors or the General the terms of article 161, paragraph 2, of Law Meeting, in accordance with the law or the No. 6,404/76. The Finance Committee acts Bylaws. The Directors are elected by the Board independently, with the duties of supervising of Directors for a unified term of two years, the activities of management, examining and and may be re-elected. The mandates began issuing opinions on the financial statements, on April 28, 2017 and run until April 28, 2019. among other functions provided for in Brazilian law.
Break down
Directors Position
Rafael Nazareth Menin Teixeira de Souza Chief Executive Officer Region I
Eduardo Fischer Teixeira de Souza Chief Executive Officer Region II
Leonardo Guimarães Corrêa Chief Financial and Investor Relations Officer
Eduardo Paes Barretto Commercial Executive Director
Homero Aguiar Paiva Executive Director of Production
Júnia Maria de Sousa Lima Galvão Executive Director of Administration and Shared Services Center
José Adib Tomé Simão Chief Real Estate Credit Officer
Hudson Gonçalves de Andrade Executive Director of Real Estate Development
Maria Fernanda Nazareth Chief Legal Officer Menin Teixeira de Souza Maia
MRV | 2018 SUSTAINABILITY REPORT 35 Statutory committees
The restructuring of the statutory committees was approved at the Annual General The company’s governance Meeting held on April 19, 2018. The Risk and Compliance and Governance, Ethics and structure includes advisory Compliance and Sustainability became part of the Governance and Compliance Committee; committees to the Board the Human Resources Committee came to of Directors in line with the operate under the name of People Committee; and the Commercial and Credit, Real Estate new needs of the markets Development and Production Committees were met in the Operations Committee. In in which it operates addition, the creation of the Statutory Audit Committee was approved, which will be installed until the Ordinary General Meeting to resolve on the financial statements referring to In addition to the statutory committees, the fiscal year 2020, pursuant to article 68, II, the company has an Ethics Committee, not paragraph c, b3’s New Market Regulation. a statutory one, created by the Board of Directors in 2012. All the executive committees With the restructuring, the statutory committees have their own internal regulations and were organized as follows: operate in accordance with the needs of the company, and their functions and objectives are defined by the Chairman of the Board of Directors, who also has the right of veto. a) Management and Compliance Committee The Board of Directors may establish other committees according to the company’s b) Committee of People interests and business needs. In 2019, for example, the constitution of the Statutory Innovation Committee is planned. The Operations Committee c) members of the executive committees are elected by the Board of Directors, and the d) Statutory Audit Committee participation of at least one Chief Executive Officer in all of them is mandatory.
MRV | 2018 SUSTAINABILITY REPORT 36 Operational performance
Sustainable 102-15
MRV ended 2018 with the best operating result construction in its history, with records in launches and sales. The volume launched went from R$5.6 billion in 2017 to R$7.02 billion; and the values methods sold grew from R$6.1 billion to R$6.4 billion in the same comparison. Among the factors that contributed to this for which MRV already had 26,000 licensed satisfactory performance are the growing units, distributed among the cities where it demand in the homeowners’ market and the maintains its enterprises strategies adopted by the company, among them the quality construction with affordable The market share in the municipalities where cost to the client; the management of it has been operating for the longest period enterprises with criteria of artificial intelligence of time is 70%, which attests to the MRV and robotics; and investments in technology brand as the favorite of local consumers and for greater interaction with customers. provides a greater competitive advantage for absorbing launches, and increase in sales. At national level, the company’s market share is 12%, which shows the size of the potential to be exploited.
“To be green blood is to do your best to deliver the best you can Evolution of launches to your clients.” (thousand units) 50 Kalel Costa Alache 45 41 Regional Works Manager
32
To deal with materials on site, the company 26 maintains an Inspection and Storage Table 16 (TIA), which controls the way the material is stored, which prevents waste and the loss 2016 2017 2018 2019 from breakage and damage. There is also the Service Verification Form (FVS), which Permits* Launches checks the quality of the work delivered. In addition, MRV encourages its suppliers to * License: mandatory document that authorizes the company to propose new sustainable solutions. In 2018, it perform works and services and launch the project. also hired the Midas Solution system, capable of ensuring greater control and quality of processes, which will come into effect in 2019 National Market share and will help in the management of suppliers. market share mature cities 103-2 | 103-3: Materials
As part of its business plan, the investment made in recent years in land bank has led the company to close 2018 with a General Sales Value (GVS) of R$50 billion, a figure 12% 70% corresponding to 322,000 units, which indicates continued growth in 2019, the year
MRV | 2018 SUSTAINABILITY REPORT 38 The performance in the last quarter of the production volume, considering the residential year indicates that the company recorded units and allotments, reached 40.2 thousand, record launches of around R$2.23 billion, an an increase of 13.5% in relation to 2017. increase of 34% in relation to the same period in 2017, expanding its presence in large cities In addition, MRV has been reducing the and the middle-income public. Net sales were volume of districts through the guaranteed 6% higher than in the fourth quarter of 2017 sales process: and 31% higher than the previous quarter. The
Sales x District (units) 9,855 9,977
8,604 8,426 8,748 7,863 7,587 6,704 6,948 6,898 6,099 6,343 6,590 5,657 5,480 5,562
3,384 3,222 3,034 2,526 2,168 2,106 2,058 1,947 1,864 1,941 1,830 1,960 1,853 1,677 1,941 1,394.1
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Net sales Cancelled units
At the same time, the company further aluminum formwork. PI demonstrates how reduced its Productivity Index (IP) based many people are needed to produce a unit. on the implementation of innovations, The lower the indicator, the better the result. mechanization and automation of the Check out a history of the number of workers production process in conjunction with the needed to build one unit per month:
Evolution of the Productivity Index
11.0 10.0 9.8 9.0 8.7 8.8 8.5 8.1 7.8 7.3 5.9 5.3 4.8
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
MRV | 2018 SUSTAINABILITY REPORT 39 During the year, the company recorded a Materials of renewable origin consumed (m2) growth of 23.7% in the number of units passed 301-1 on. Another highlight in 2018 was the launch of the Brazilian Savings and Loan System (SBPE) 2018 2017 with onlending in the plant with a private bank, in partnership with Banco Santander. Laminate flooring* 302,050.18 188,316.09 Another novelty was the launch of Luggo, MRV’s apartment rental platform. Total materials consumed 302,050.18 188,316.09 from renewable sources
Reduction and optimization of material * The data for laminate flooring for 2017 in this table differs from consumption and waste management that reported in MRV 2017’s sustainability report, as it was reviewed by the responsible area and set for this report.
103-2 | 103-3: Materials | 103-2 | 103-3: Effluents and waste Materials of renewable origin consumed (unit) 301-1 MRV adopts a set of actions to reduce the use of materials, to mitigate the generation and 2018 2017 reduce the volume of waste in its works. Ready door 217,631.04 176,381.62 In 2018, MRV consumed several types of materials from renewable and non-renewable Total materials consumed 217,631.04 176,381.62 sources. The consumption of renewable from renewable sources materials increased by 60%, in the case of * The data for the ready door for 2017 in this table differs from that laminate floors, and 23%, of finished doors. reported in MRV 2017’s sustainability report, as it was reviewed by That’s because there was a change in the the responsible area and set for this report. specification of the product delivered, with the replacement of ceramic tiles by laminate floors MRV’s projects increased between 2017 and 2018 and, in the bedrooms, and in the rooms. The ready consequently, the amount of materials used. Despite this, door has also been standardized on all units. the consumption of non-renewable materials fell by 33% in cement consumption, 32% in the consumption of concrete blocks and 1% in the use of fiber cement roof tiles in the
MRV | 2018 SUSTAINABILITY REPORT 40 period. This reduction in the consumption of materials is the Through the TIA table, result of the construction methods used by MRV. there is a material On the other hand, the consumption of sand*; concrete storage control, pipes, staves and precast rings; PVC pipe/connection; and aluminum windows had an increase in the order of 12%, avoiding wastes 10%, 29% and 33%, respectively. The company does not use recycled materials in its production process. 301-2
* In some regions, MRV has concrete plants in the construction sites, using inputs and not ready-made concrete. Materials of non-renewable origin consumed (m2) 301-1
Materials of non-renewable origin consumed (m3) 301-1 2018 2017
Ceramic tile 1,103,663.25 933,852.34 2018 2017 Ceramic flooring 1,030,394.96 992,798.36 Sand 318,048.83 283,160.22 Fiber-cement tile* 307,615.76 310,294.79 Machined concrete 1,006,682.49 758,674.70 Total materials Total materials consumed from 2,441,673.97 2,236,945.49 consumed from 1,324,731.32 1,041,834.92 non-renewable sources non-renewable sources * The data for fiber cement roofing tiles for 2017 in this table differs from the data reported in MRV’s 2017 sustainability report, as it was Materials of non-renewable origin consumed (t)* reviewed by the responsible area and set for this report. 301-1 Materials of non-renewable origin consumed (m) 301-1 2018 2017
Mortar 24,782.00 26,703.86 2018 2017
Cement 20,746.58 30,785.06 Pre-cast concrete 76,954.51 69,939.45 tube, stave and ring* Crushed stone 456,073.85 436,563.45 Electric cable 18,689,989.62 16,933,776.97 Texture 8,461.64 8,256.11 Total materials Rebar/steel screen 40,659.64 26,508.42 consumed from non- 18,766,944.13 17,003,716.42 renewable sources (m) Total materials consumed from 546,723.71 528,816.90 * The data for concrete pipe, dowel and precast ring for 2017 in this non-renewable sources table differ from those reported in the MRV 2017 sustainability report, as they were reviewed by the responsible area and adjusted * The data for crushed rock and rebar/steel screen for 2017 in this table for this report. differ from those reported in MRV’s 2017 sustainability report, as they were reviewed by the responsible area and adjusted for this report.
MRV | 2018 SUSTAINABILITY REPORT 41 Materials of non-renewable origin consumed Total weight of waste broken down by type* (unit) 306-2 301-1
2018 2017 2018 2017
Pipe/connector PVC By type 4,266,550.49 3,316,595.73 normal drain1 Hazardous 2,476.98 2,859.12 Aluminum window 229,004.26 175,775.25 Non-hazardous 355,509.60 173,965.10 Concrete block 20,282,616.67 29,949,906.182 Total waste Sanitary ware 146,428.90 162,555.72 (hazardous + 357,986.58 176,824.22 non-hazardous) Meter boards 30,827.15 24,502.57 * In 2017, the Climas system was not in place, and the information Total materials was entered retroactively in 2018. Thus, some waste data may not consumed from non- 24,955,427.47 33,629,335.45 be covered since the Climas uses the items posted in the Source renewable sources List (LOF) and some LOF were not standardized until 2018.
1. The data for normal sewage PVC tube/connector for 2017 in this table differs from that reported in the MRV 2017 sustainability report, as it has been reviewed by the responsible area, and set for this report. 2. The increase is due to the increase in the number of concrete wall works.
In 2018, MRV generated 1,998.78 m³ of hazardous waste and 110,374 m3 of tons of non-hazardous waste in its operation throughout Brazil. Among the actions to reduce this volume are recycling, reuse and reverse logistics. In order to avoid the impact of the generation and disposal of waste generated at the construction sites, the company relies on the partnership of cooperatives, through donations, to recycle materials such as Styrofoam, plastics, cement bags, metal, glass, among others.
MRV | 2018 SUSTAINABILITY REPORT 42 Total weight of waste by type and disposal method (m3) 306-2
2018 2017 2018 2017
Total weight of non-hazardous Total weight of hazardous waste by disposal method waste by disposal method
Reuse (clean debris – Reuse* 0 0 concrete and cement, 3,882.93 243.53 wood, metal, paper and plastic floors) Recycling* 0 0
Recycling 69,113.71 31,124.58 Composting* 0 0 Composting* 0 0 Recovery, including 0 0 Recovery, including energy recovery* 0 0 energy recovery*
Incineration (burning)* 0 0 Incineration (burning)* 0 0
Deep well injection* 0 0 Deep well injection* 0 0 Landfill of civil 240,468.90 95,049.31 construction Industrial landfill 2,476.98 2,859.12
Industrial landfill 42,044.05 40,596.94 On-site storage* 0 0 On-site storage* 0 0 Other (specify) 0 0 Other (specify): 3,417.59 6,950.74 reverse logistics Total 2,476.98 2,859.12 Total 357,986.58 176,824.22
* MRV does not dispose of non-hazardous waste by these methods. * MRV does not dispose of hazardous waste by these methods.
Waste that is not directed to recycling is sent to companies specialized in responsible and adequate disposal, while wood and other waste are sent to specialized companies, and transformed into chips or sent to companies in various segments, which use the input as biomass for energy generation.
MRV | 2018 SUSTAINABILITY REPORT 43 Initiatives such as the donation and sale of In addition, the construction method R$1.8 million recyclable waste provided a reduction in the of concrete wall molded in situ was generation of recyclable waste (Class B) for MRV, expanded in 2018 to 87% of the works saved with from January 2017 to December 2018, as the and had a fundamental impact on the following table shows. positive result of waste generation – an the reduction aspect monitored for more than four in the use of Sale and donation of recyclable waste (m3) years by MRV. The volume of buckets per unit produced was reduced by buckets per Type of 38%, which represents a decrease of Donation Sale Total waste 12% in the total volume in relation to unit produced 2017 – savings of R$1.8 million. Class B 21,735.49 21,793.58 43,529.07
Partnership for waste reduction
One of the projects developed on the year counted with the partnership of Basf, which, through its brand Suvinil, proposed the substitution of the metallic packaging of its paints for the plastic packaging. Thus, since April, all the units produced by the Suvinil Acrylic Matte Eco-Design Paint, 18 liters, white, are packed in the new containers (rectangular plastic buckets)This will enable the reduction of metal waste generation and the risks of accidents inherent to its use, in addition to the reuse of the new packaging.
Reuse is the main resource of the company’s Management of water water saving plan. In the works, the volume used resources in construction in sinks is reused in the urinals. In the concrete mixers, after decanting, the water supplies 103-2 | 103-3: Water | 303-1 the cleaning of the equipment itself, as well In civil construction, water consumption is mostly as the rain collected is intended for cleaning incorporated into the final product, causing the and irrigation of gardens and gardens. In the production activity to generate a low volume year, the company reused/recycled about of effluents. MRV maintains actions, both on 3,157.21 m3³of water in its works, a volume that construction sites and in its enterprises, aimed at represented about 0.15% of the total volume of saving water and the conscious use of resources. water consumed. The intensity of water use in As a result of these actions, water consumption in buildings, in m3/unit produced, was 53.91. 2018 was more than 2 million m3, about 22% less 303-3 | CRE2 than in 2017. 303-1 The housing units are built with equipment and systems that prioritize the reduction of consumption and reuse of water. The sanitary basins, for example, have a double drive system of 3 and 6 liters, which allows the control of the
MRV | 2018 SUSTAINABILITY REPORT 44 amount of water to be used; the taps contain flow of water consumed internally. The objective reducers that provide savings of 41.6% per minute, was achieved with the insertion of water each, if compared to those not equipped with the management in the Climas, the company’s device; and the rainwater harvesting system directs sustainability management software that rainwater to common areas of the development, includes the other indicators, which resulted in like bathrooms at the gates and gardens. optimization and greater accuracy in the data calculated for calculation, previously accounted For 2018, one of the actions planned by MRV for in spreadsheets. was to systematize the calculation of the volume
Total volume of water withdrawn, by source (m3) 301-1
2018 20171
Surface water, including water from ponds, rivers, lakes 0 0 and oceans
Groundwater tables 0 0
Rainwater collected directly and stored by 2,254.92 735.92 the organization2
Waste water from another organization 0 0
Municipal water supply or other public or private water 2,573,775.42 3,331,013.70 supply services
Total 2,576,030.34 3,331,749.62
1. The data referring to 2017 were reviewed and corrected in 2018, according to data available in the software used by MRV (Climas). 2. In 2017, MRV began accounting for the volume of rainwater collected.
Energy consumption
103-2 | 103-3: Energy MRV’s Strategic Direction determines the optimization of natural resources, including For 2019, MRV aims energy savings throughout the company. The Health, Safety and Environment Indicators (HSE) to reduce its water Planning/Map defines the strategic energy consumption by 2% consumption, being established the target of 2% reduction in consumption per unit produced – volume accompanied by the Climas software.
MRV | 2018 SUSTAINABILITY REPORT 45 The company began accounting for in the construction sites that consume diesel, energy consumed in GJ or MWh from 2018. preference for the use of ethanol and also Previously, accounting was by cost only, that increased travel by the company’s aircraft. is, in units of currency. MRV consumed approximately 79,000 GJ of 302-5 non-renewable fuels and more than 3,000 GJ of renewable fuels (ethanol). The electrical In the year, the total energy consumed from energy consumption corresponded to 83,079.33 renewable and non-renewable sources totaled GJ, 18% less than in 2017. Of the total energy 165,380.87 GJ, an increase of 0.96% in relation consumed in the period, 13.33% came from to the previous year, which can be explained by renewable sources (use of ethanol). the increase in production compared to 2017 – 302-1 consequently there was more use of machinery
Energy consumption (GJ) 302-1
2018 2017
A.1. Energy consumed from non-renewable fuels
Diesel 50,325.06 33,923.64
Gasoline 7,256.42 9,370.13
LPG 1,197.64 1,542.27
Aviation kerosene 20,319.12 14,208.07
Total energy consumed (non-renewable sources) 79,098.24 59,044.11
A.2. Energy consumed from renewable fuels
Ethanol 3,203.30 2,826.54
Total energy consumed (renewable sources) 3,203.30 2,826.54
Total energy consumed (A.1. + A.2.) 82,301.54 61,870.64
B. Acquired energy
Electricity 83,079.33 101,914.39
Total energy consumed (A.1. + A.2. + B) 165,380.87 163,785.03
In the same period, MRV had an energy intensity index of 0.082 GJ per m2 produced, that is, for each m2 produced, 0.082 GJ of energy were spent. 302-3
MRV | 2018 SUSTAINABILITY REPORT 46 GHG emissions
103-2 | 103-3: Emissions “To be green blood is every day waking up, lying down, sleeping and dreaming about the company I work for. The management of climate issues involving And to believe that anything is possible because that MRV’s activities is carried out by means of the way we can achieve unbelievable things, like the UN Climas software and, to avoid data reporting presentation, for example. It’s embracing the company errors, the information is integrated with the in everything you do in your job.” SAP system on a monthly basis. The company maintains a Climate Change Policy, approved Thais Morais by the Board of Directors, which was updated in Sustainability Analyst 2017, in addition to participating in the Climate Forum Working Groups of the Ethos Institute; Energy and Climate, of the Global Compact; and
Sustainable Development Goals (SDGs), also of Total GHG emissions – Scopes 1, 2 and 3 (tCO2e)* the Global Compact. 2018 2017 2016 Its emissions reduction targets (1% in Scope 1 and 2% in Scope 2) were achieved in Total 280,352.82 226,264.81 194,938.41 2018 thanks to the strategy of continuously * The GHG emission data for the years 2016 and 2017, for all scopes, were seeking mitigation through, among other reviewed due to a change in the algorithm used by the GHG management actions, awareness of its stakeholders (100% software. Despite the mistake, the offsetting of emissions followed the of employees and outsourced workers were accounting data, i.e., it was also higher. trained in the year in relation to the theme), the awareness of their vulnerabilities and adaptation Direct GHG emissions – Scope 1 (tCO2e) to them, and maintenance of the MRV Carbon 305-1 Management Plan. In the same vein, the company maintains leadership in CDP Climate 2018 2017 2016 Change and CDP Supplier Engagement and adheres to the CDP Education initiative, whose CO2 8,380.42 17,118.39 8,126.88 focus is on educating employees on the online CH 13.41 12.85 32.28 platform about climate change, water resources 4 and forests. N2O 417.82 295.75 344.76
HFC 0.0 0.0 1,882.28 MRV issued around 280 thousand tCO2e in 2018, an increase of 24% over 2017, largely influenced PFC 0.0 0.0 0.0 by the increase in Scope 3 emissions.
SF6 0.0 0.0 0.0
Scope 1 emissions totaled 8,811.66 tCO2e, which were reduced by 97% in relation to 2017 due Total 8,812.26 17,426.99 10,386.21 to the reduction in the volume of vegetation suppression at the start of the works, which MRV reduced its Scope 2 emissions by approximately 36% in relation to represent the majority of the company’s 2017 due to improvements in internal energy management. In addition Greenhouse Gas (GHG) emissions. to achieving the reduction target of 2%, the same percentage was 305-5 maintained as the target for 2019. 305-5
MRV | 2018 SUSTAINABILITY REPORT 47 Indirect GHG emissions – Scope 2 (tCO2e) Environmental compliance 305-2 103-2 | 103-3: Materials | 103-2 | 103-3: Energy | 103-2 | 103-3: Water | 103-2 | 2018 2017 2016 103-3: Emissions |103-2 | 103-3: Effluents and waste | 103-2 | 103-3: Environmental compliance | 103-2 | 103-3: Occupational health and safety Total 1,643.06 2,554.31 3,254.85
The Environmental Management System MRV recorded an increase of about 24% in Scope 3 emissions due to its remained integrated with the Occupational construction method, more concentrated in concrete walls, which consume Health and Safety Management System (SST), a large amount of inputs such as cement, concrete and steel, materials that complying with ISO 14001:2015 and OHSAS emit a higher amount of GHG in their production processes. The company 18001:2007 standards. However, with the has not yet established targets for the reduction of Scope 3 emissions. transition from 14001:2004 to the 2015 version, the policy was revised and renamed the Sustainability Policy, with its content approved Other indirect GHG emissions – Scope 3 by the Board of Directors in 2018. Its objective is 305-3 to guide and establish the commitment to sustainable development, defining principles and guidelines to be applied in activities aimed at 2018 2017 2016 sustainable management. 103-2 | 103-3: Marketing and labeling | CRE8 CO2 269,336.56 206,272.20 180,963.19
CH4 579.05 0.27 332.96 One of the primary requirements is to demonstrate continuous improvement in N O 12.22 11.04 1.20 2 safety, occupational health and environmental Total 280,382.54 226,264.81 181,297.35 performance. To this end, the coordination of the HSE system is responsible for planning For the first year, MRV discloses emission intensity data, by scope, as a performance indicators, which implies defining way of initiating a historical series that allows it to identify the efficiency them, establishing the respective acceptable with which it builds its projects, comparing them to emissions from its levels, the calculation formula, the frequency of production process. measurement and the form of control.
Emission intensity index In terms of compliance with the SiAC-PBQP-H 2 (tCO2e per m produced in 2018) Quality System – version 2017, MRV is Level 305-4 “A” and certified in ISO 9001, version 2018. In 2018, an update was made to the criteria and requirements for evaluation of the internal Scope 1 Scope 2 Scope 3 Total audit of Quality to meet the changes in the ISO 0.004 0.001 0.135 0.140 9001/18 standard, in which the percentage of 92% was calculated.
MRV | 2018 SUSTAINABILITY REPORT 48 A further 20 projects conceived through BIM are planned in 2019, when all the launches will be “To be green blood is to have integrated to this concept. The system allows a passion for what you do.” you to couple with all the features of the new digital age – such as big data, data analytics, José Luiz da Fonseca virtual and augmented realities, Internet Executive Manager of Health, of Things (IoT) and cloud data – which will Safety and Environment (HSE) gradually be integrated.
In line with the accelerated expansion of digitalization, the company also began, during According to MRV’s estimate, the cost incurred the year, the computerization and inspection to comply with environmental regulations of the construction sites, starting to use tablets when required in some projects corresponds to and other work planning and control tools approximately 1.7% of the general sales value of – which is done through MRV Obras Mobile. the project. The project enables you to move towards integrated planning and online portfolio of all In relation to environmental sanctions and fines, works, with its trainees, engineers, technical when the company receives an environmental assistants and coordinators accessing the fine, the area responsible for the issue raised information necessary for their activities in the is called to assess whether it proceeds or not palm of their hands. no. If it does, the payment is made. If it does not proceed, the administrative and/or judicial This means that they can order materials and discussion will begin. In 2018, there was no labor measurements from anywhere on the relevant environmental process that could tablet, for example, which eliminates a series impact the company’s activities. of necessary steps when the information and 307-1 requests had to be made by the computer. MRV gains agility and increases productivity in Innovative solutions construction management.
With the use of Building Information Modeling (BIM), or Construction Information Modeling, four years ago MRV inserted in its construction As of 2019, all projects process a system that is the backbone of the will be launched using technological revolution in civil construction, by inserting MRV into the industry route 4.0. BIM the BIM concept, which is a methodology applied to a set of software that not only allows you to design an enterprise is the backbone of the in 3D, verifying in real time the adequacy of the technological revolution materials and the structure to be used, as well as coupling information about planning the work, in civil construction, budget, technical assistance, among others, covering all stages of the project – from land positioning MRV on the analysis to construction quality. route to industry 4.0
MRV | 2018 SUSTAINABILITY REPORT 49 In relation to control, the company has a self-compacting concrete and aluminum team of employees who alert the Engineers formwork for assembling centralized walls for the maintenance of the costs of the and metal slabs in a single step. This process works, compliance with the deadlines, and results in less waste generation, agility in the the adoption of appropriate procedures. construction and less need for labor. In 2018, by improving and optimizing digitization on construction sites, it created From 2017 to 2018, MRV increased from the conditions to open other fronts in future 69% to 87% the total of works with the control activities with MRV Obras Mobile concrete wall method – the projects with structural masonry corresponded at the end MRV also started testing with drones of 2018, the remaining 13%. The number of connected to BIM. The equipment is able professionals required for the construction to capture images for topographic survey, of an apartment per month fell from 11 in earth moving, construction progress, 2007 to 3.4 in the concrete wall method. location of structural parts, walls and foundation piles, among others, detecting The MRV + Green Seal Lighthouse, which eventual problems that need to be solved in certifies the adoption of sustainability the construction stage. practices and criteria in the construction works and enterprises, also measuring their The decision to become a construcutech will efficiency, was 97% in 2017 and closed the provide MRV with gains on several fronts: financial year 2018 at 99.9%. budgets are prepared with greater agility and precision; information reaches the The increase in productivity allows the construction sites more quickly; interaction company to invest in greater specialization between employees takes place online; and qualification of its employees, in and the possibility of committing errors addition to reducing the risks of maintaining is reduced, since many problems can be a large number of people on construction detected already in the visualization of the sites. The cost of the concrete wall method, plant in three dimensions. For such, there once the initial stage has been completed – is an especially dedicated innovation team formwork, logistical organization and labor that acts so that MRV is recognized as training – is also more competitive than the an innovative company in a broad sense, masonry system. involving all areas. The use of gypsum in buildings was reduced, In addition to digital innovations, the which contributed to the reduction of concrete wall construction method has been waste generation and its exploitation in the increasingly used by MRV because it offers gypsum quarries. This is another process greater efficiency in different aspects of that results from the adoption of the projects. The resource includes the use of concrete wall method.
Amount of gypsum consumption (kg)
2018 2017 2016 2015
Plaster 11,774,502.96 20,379,859.80 31,924,917.56 70,094,498.87
MRV | 2018 SUSTAINABILITY REPORT 50 Amount of gypsum consumption (kg)
70,094,498.87
31,924,917.56
20,379,859.80 11,774,502.96
2015 2016 2017 2018
Another milestone of the company was the The robot Mr. V goes into action when a client pioneering spirit, in its sector, in developing starts chatting on the construction company’s artificial intelligence through the My MRV website to find out the real estate options application. Launched in 2017, the app already available in their preferred region. He’s able has more than 100 thousand downloads. In to talk exactly like a conventional attendant, view of the success, the construction company collecting data and responding with decided to expand the use of technology to information on financing, values and options. other customer service channels. At the end of the service, all the data collected is forwarded to the real estate brokers in the Those who access Facebook Messenger, client’s region, to continue the process and the My MRV application and the company’s complete the sale of the property. Relationship Portal have the help of Maria Rosa Vaz, a character created to interact with With tests and adjustments to the tool in customers, which interprets the context of the February 2019, it was already possible to situations and formulates the answers. As the perceive a positive variation of almost 30% in interaction evolves, the system improves with the the services sent directly to brokers. During a content that MRV’s customers require most. fire simulation training at MRV headquarters that emptied the entire building, the robot Chat bot was triggered and replaced the attendants completely. For approximately 20 minutes, about The chat bot is MRV’s automated customer 150 consultations were carried out by Mr. V. service. It is in an advanced testing phase, with Another positive experience took place during a robot that provides efficient and humanized the campaign of a real estate sales fair, where service for visitors to the portal. The performance the robot served 1,800 people for a whole day. of the service, quantitative and qualitative of The idea is that the chat bot act in partnership the chat bot, is very well evaluated by the team responsible for the project.
MRV | 2018 SUSTAINABILITY REPORT 51 with professionals, seeking optimization of time The AT in the Palm of the Hand contemplates and qualification in attendance. all stages of the service process: request of repairs by the customer, sending photos and MRV provides an average of about 150 videos with the requested repair item, analysis thousand services per month. With the of the rules of guarantee, inspection of the chat bot it will be possible to reduce the property, planning and control of services and time today by about 12 minutes. Automated closure with digital signature of the call on service has already registered a 50% the platform. reduction, with an average of 6 minutes, besides being focused on the customer The new process organized the service flow, experience and having already received which evidenced the elimination of manual positive feedback, which demonstrates the steps that bureaucratized and demanded humanized character of the tool. more time, in addition to having substantially reduced the use of sheets of paper, which MRV Come in Handy met the company’s sustainability strategy.
Encouraging the hiring and exchange of Apartments decorated in products and services among residents of virtual reality projects is the objective of the Come in Handy project, an online platform unanimously MRV is revolutionizing the customer’s recognized in the Latam Award, organized by traditional visit to the decorated apartment the Latin American Alliance of Organizations for on their sales shifts by investing in My Customer Interaction (Aloic). Home Experience, a project that replaces the classics decorated with ultra-modern The tool, practical and fast, allows customers to computers and virtual reality glasses. offer their services among neighbors or look for what they need in their own homes. The tool brings as a novelty to the real estate market the possibility for the client They can sign up for the Come in Handy project to completely customize the property in and find many services by accessing the address: www.maonarodamrv.com.br minutes. The interactions are multiple and the experience promotes the feeling of being in a real apartment. There are options AT in the Palm of the Hand of different types of furniture; classic or
103-2 | 103-3: Customer health and safety modern environment; types of finishes, such as floors and colors; decorations for The application aims to increase the efficiency couples with or without children; and even of the customer service process by the post- the inclusion of pets. It is also possible to delivery Technical Assistance (TA) sector, which walk through the entire virtual apartment improves satisfaction by means of automation having a real dimension of the spaces of and the optimization of the maintenance the property. process steps, the increase of the teams’ productivity and the improvement in the management and reliability of the information. Check out the demonstration of the customer’s perspective by using virtual reality glasses for MRV’s decorated apartments.
MRV | 2018 SUSTAINABILITY REPORT 52
A pioneer in the use of large-scale Enterprise photovoltaic energy in the construction sector in Latin America, MRV is making great strides towards achieving the goal of environmental having 100% of its housing units benefit from this technology by 2022. In 2017, 30% of all the company’s projects were solutions launched with photovoltaic panels. In 2018, the index rose to 60%; the goal is to reach 2022 with 100%. To get an idea of the impact that has been for approximately 4,000 homes built by the provided with the use of the resource, the company. The data appear on the MRV Solar panels installed in the enterprises produce website launched by the company in 2018. more than 700 kWh of clean energy, estimated volume based on a study that considers a In addition, by replacing its product lines in 2017 series of factors, such as the total number of with the Eco, Bio, Premium and Garden models, plates installed, the hours of higher and lower MRV now offers unprecedented solutions in its energy used, the geographical position of the segment, with the offer of apartments guided enterprises, among others. by the concepts of sustainability, innovation and intelligence. From design to finishing, including This figure is equivalent to the savings the installation of devices that reduce the of about 400,000 kilometers driven by a consumption of natural resources and the provision popular car and approximately R$400,000 in of connectivity in common spaces, the apartments the costs of MRV’s condominiums, in addition have become the most modern and sustainable in to providing the supply of clean energy the market for economic real estate.
MRV Solar shows energy saving data in real time
In October, MRV launched the on the MRV Solar website, launched by the company in 2018. real-time measurement of the entire economy and the benefits provided by photovoltaic solar energy in its enterprises. Visitors have access to data, graphics and infographics with estimates on the use and production of solar energy and can follow how much energy is being generated by photovoltaic panels at the time of navigation on the portal.
The address of the portal is www.mrv.com.br/sustentabilidade/pt
MRV | 2018 SUSTAINABILITY REPORT 54 Plant The condominium now has a photovoltaic In 2018, MRV prepared a project to build a solar power plant to supply all 440 apartments photovoltaic plant that will generate energy and common areas, reducing the impact to supply its offices, sales and works in Minas on the environment and energy costs for all Gerais. At the end of the year, the proposal was residents. The estimate is that the savings sent for the appreciation and approval of the reach R$520 thousand. State energy concession holder, Cemig. It is expected that, once the project is approved, the In the next four years, all MRV’s projects will plant will start operating in 2019. have a photovoltaic energy system – an estimated investment of R$800 million. With this initiative, the objective is to ensure that 80% of the energy consumed by MRV’s Electric power mining units and facilities is supplied by the plant, since the headquarters is not included MRV conducted the first test in another because it is subject to negotiation in the free renewable energy field. It leased a small electricity market, where you benefit from hydroelectric power plant (CGH) for six months low costs. The company intends to extend the to use the electricity supplied in its offices, sales project to other states. and construction shifts, in Minas Gerais. The result was positive and accumulated an energy credit Multiple in the order of 2.3 GWh, and even accumulated Consumption Units 1,1 GWh. The pilot project is a distributed generation modality, which allows the company Also in the first half of the year, the first large to generate the electricity that it would consume residential development in Brazil with multiple from the CEMIG grid. With CGH, the savings consumer units (Emuc) was inaugurated in reached 20%in relation to all expenditure on the Belo Horizonte (MG) of solar photovoltaic input for the installations covered. energy, the Spazio Parthenon. In Fortaleza (CE), the company contracted renewable energy supply from the Companhia de Gás do Ceará (Cegás) for a large residential enterprises. The supplier has 15% of its production from the treatment of urban waste, the so-called green gas. The contracting was done in the lending modality, which involves the supplier, MRV and the client, in order to make it win-win for all parties. For the gas generator, MRV guarantees contracting at the best price and makes investments less than those required for electricity; the supplier is responsible for the installation of the network and the assignment of materials to the condominium, and the end customers benefit from the lowest cost in the market. According to Cegás, natural gas is up to 40% more economical than the competition.
MRV | 2018 SUSTAINABILITY REPORT 55 The year 2018 also enters MRV’s history as a milestone in the beginning of one of the most Internal important projects ever developed internally in order to improve the quality of our products and services to consolidate the MRV culture. public The idea is to show that the company wants to 103-2 | 103-3: Jobs contribute to the transformation of the country and believes that this is possible through dreams, because dreams motivate people and, when they come true, they change reality. By investing in this intrinsically, MRV is reaffirming its commitment to people, to its employees, the clients and the society that lives close to an enterprise. This is the Purpose Project, created to revisit, construction of a meaning, the purpose that analyze, expand and update the definition moves the company: “Building Dreams That of the purpose that governs the company’s Transform the World”. performance from end to end. MRV opted for the construction of a concept based on experience The definition brings together MRV’s area of and in the vision of all employees who know their operation, the dream of home ownership and operations deeply. the company’s desire to make a difference in the world, promoting transformations in a To achieve this goal, Fundação Dom Cabral sustainable manner, involving communities and was hired to re-signify the company’s respecting internal and external stakeholders. purpose, based on consultation and debate among all employees. The process involved After six months of development, the project workshops with the Board of Directors, was launched in November 2018 at the largest Presidents, Directors and Managers and the event promoted by MRV since its foundation, formation of 28 groups that covered the entire which gathered around 1,500 leaders in the statement composed of the employees. The city of Atibaia. teams were designed in a way that balanced geography, the area and representativeness It was the starting point of a work that now of the company throughout the country. has the mission of consolidating among all the Simultaneously, an electronic survey was employees, of all the instances, the awareness conducted with more than 2,000 respondents. of this purpose that, renewed, is now guiding all internal initiatives. It includes principles Therefore, it was possible to capture the views that have made the construction company of all employees on what was most relevant a reference in terms of ethics, sustainability, to MRV. Aspects such as the realization of governance and quality, among other decisive the dream of owning one’s own home were aspects for the success of its strategy and the observed, customer satisfaction, the working exponential growth of recent years. environment, green blood culture, the quality of products and services, initiatives with an impact on the transformation of society, social inclusion, among others. At this stage, the objective was to detect the essential attributes of the company to elaborate the definition of the purpose.
Following this, new workshops were held with executives and the large groups were brought together to consolidate what had been ascertained. Only then was Interbrand, a global brand consultancy, hired to, with the project Coordinators at MRV, transform collective perceptions into a phrase capable of communicating them with accuracy and clarity, and each word should contain the
MRV | 2018 SUSTAINABILITY REPORT 57 Employee profile In 2018, MRV registered an
As of December 31, 2018, MRV had more increase in the number of than 22 thousand direct employees and 5.442 outsourced. Of the total, 82% were women working in the men, and 18% women – participation that construction sites, a result of the has increased 117% in the construction sites during the last year. Company’s search for greater 102-8 | 405-1 diversity in its operations
Number of employees by gender and region 102-8
2018 2017* Region Percentage Women Men Percentage Women Men
South 18.34 610 3,516 14.31 379 1,691
Southeast 55.88 2,634 9,936 61.27 2,454 6,407
Midwest 8.67 334 1,616 7.73 252 866
Northeast 16.25 464 3,191 16.64 423 1,984
North 0.86 36 157 0.05 0 7
Total by 100 4,078 18,416 100 3,508 10,955 gender
Total 22,494 14,463
* The data on employees presented in the 2017 MRV sustainability report have been revised and represented in this document. 102-48
Number of employees by gender and employment contract 102-8
2018 2017 Employment contract/ Job type Women Men Women Men
Permanent/Integral 3,490 17,825 3,005 10,498
Temporary/Part-time 588 591 503 457
Total by gender 4,078 18,416 3,508 10,955
Total 22,494 14,463
MRV | 2018 SUSTAINABILITY REPORT 58 Number of employees per employment contract and region 102-8
2018 2017 Region Temporary Permanent Temporary Permanent
South 180 3,946 124 1,946
Southeast 783 11,787 691 8,167
Midwest 90 1,860 52 1,066
Northeast 113 3,542 93 2,314
North 13 180 0 10
Total per employment contract 1,179 21,315 960 13,503
Total 22,494 14,463
The variety of benefits includes health and dental insurance plan, agreements with drug stores and laboratories, life insurance, meal/food vouchers, amongst others
MRV | 2018 SUSTAINABILITY REPORT 59 In 2018, there was a significant increase in the number of women in leadership positions at MRV, specifically in management positions. The number of women in operational positions has also increased, acting directly on the works, as a reflection of the training of this public to act in the civil construction sector observed in recent years.
Number and percentage of employees by employee category and gender* 405-1
2018 Functional category Total Women Percentage Men Percentage
Directors 58 5 8.62 53 91.38
Managers 195 45 23.08 150 76.92
Leaderships (Coordinators, 1,086 359 33.06 727 66.94 Engineers, Store Managers)
Professionals (Analysts, Lawyers) 1,069 666 62.30 403 37.70
Operational (administrative) 1,539 895 58.15 644 41.85
Operational (works) 17,368 1,520 8.75 15,848 91.25
Trainees and apprentices 1,179 588 49.87 591 50.13
Total employees by gender 22,494 4,078 18.13 18,416 81.87
Total number of employees 22,494
* The total number of employees presented in MRV’s sustainability report in 2017 was reviewed and restated in this document. 102-48
MRV | 2018 SUSTAINABILITY REPORT 60 Number and percentage of employees per employee category and ethnicity 405-1
2018
Functional category Total number Total by employees of category employee Yellow Percentage White Percentage Indigenous Percentage Black Percentage Brown Percentage informed Not Percentage
Directors 58 0 0 53 91.38 0 0 0 0 5 8.62 0 0
Managers 195 0 0 149 76.41 0 0 1 0.51 44 22.56 1 0.51
Leaderships (Coordinators, 1,086 16 1.47 606 55.80 0 0 6 0.55 438 40.33 20 1.84 Engineers, Store Managers)
Professionals (Analysts, 1,069 0 0 464 43.41 0 0 19 1.78 564 52.76 22 2.06 Lawyers)
Operational 1,539 7 0.45 516 33.53 0 0 48 3.12 922 59.91 46 2.99 (administrative)
Operational 17,368 101 0.58 4,998 28.78 11 0.06 1,639 9.44 9,973 57.42 646 3.72 (works)
Trainees and 1,179 6 0.51 448 38.00 0 0 38 3.22 606 51.40 81 6.87 apprentices
Total by ethnicity 22,494 130 0.58 7,234 32.16 11 0.05 1,751 7.78 12,552 55.80 816 3.63
Total 22,494
MRV | 2018 SUSTAINABILITY REPORT 61 To ensure that the right to freedom of The DAE also controls the access and permanence association and collective bargaining of of workers from outsourced companies on the outsourced workers is being respected, MRV, company’s premises. through the Employee Support Department (DAE). In the case of a company that is not To the service providers, this control is given part of the company’s business, the company by means of a contract they sign before the asks the third party to submit the following beginning of the activities, in which they documents before the beginning of the activities: undertake not to employ/permit the practice of Collective Bargaining Agreement (CCT), labor analogous to slavery, and or any other form Employment Contract, Work and Social Security of illegal work, as well as to comply with labor Portfolio (CTPS), Registration Form and Hours and social security obligations. To ensure that Compensation Agreement. This control is also only employees in good standing in relation to done on a monthly basis via the presentation the Consolidation of Labor Laws (CLT) enter the of the pay checks, time card, food/feed voucher construction sites, the initial control made by the receipts and employees’ food basket. AED includes the request and checking of the 103-2 | 103-3: Freedom of association documents present in the flow of documentation and collective bargaining | 407-1
MRV | 2018 SUSTAINABILITY REPORT 62 of employees, and conducting interviews with dependents, who may vary from city to city all outsourced employees before the start of according to the local collective convention. activities. This control is also done on a monthly The company offers medical and dental basis by means of the request and of checking coverage, agreements with pharmacies and the documents present in the employee-specific laboratories, collective life insurance, meal/ monthly checklist. feeding vouchers, transportation vouchers, 103-2 | 103-3: Forced or compulsory labor basic basket, birth basket, birth bonus and discounts at fitness centers. For employees Also for service providers (contracted via who work in the administrative sector of Supplies), the initial control of outsourced offices and construction sites, the benefits also employees is done by the AED team of each include annual payment of Profit Sharing, and work via request and checking the documents Results (PLR) and private pension. present in the Worker’s Document Flow Contract 401-2 via Supplies, and the control of permanence is by request and by checking the documents Mathematical ratio of basic salary and remuneration present in the monthly checklist of service between women and men providers in the supply area. 405-2
Attraction, retention and development 2018 Functional 103-2 | 103-3: Employment | 103-2 | Proportion category (men/ 103-3: Training and education | 103-2 | Women Men 103-3: Occupational health and safety | 103-2 | women’s 103-3: Diversity and equal opportunities salaries)
MRV’s priorities include offering employees a Directors 36,617.75 33,549.13 1.09 pleasant work environment and opportunities for personal and professional development, Managers (administrative) 13,468.61 14,712.13 0.92 so that its teams work in tune, and talent, Managers (works) 12,374.24 16,964.38 0.73 dedication and professionalism are permanently recognized. Leaderships (Coordinators, 6,217.39 5,961.17 1.04 Everyone benefits from a remuneration policy Engineers, Store based on the Hay Group methodology, which Managers) aligns positions and their respective functions Leaderships (works) 8,586.62 9,829.31 0.87 with income, with a comprehensive benefits package, some of them also extend to their Professionals 3,529.17 3,598.14 0.98 (Analysts, Lawyers)
Operational 1,648.50 1,706.32 0.97 (administrative)
Operational (works) 1,344.56 1,655.30 0.81
Trainees and apprentices 656.06 617.70 1.06
MRV | 2018 SUSTAINABILITY REPORT 63 The health plan is not offered to interns and general knowledge and video interviews. apprentices; the food voucher is not offered By the end of 2018, 69 young people had to interns; the other benefits are offered for reached the final stage, competing for the 24 all positions, except work site operational places in the program. personnel. 102-35 | 102-36 | 401-2 In the company’s trainee programs, currently For more than ten years, programs have 60% of those enrolled are women. been maintained aimed at interns and trainees to attract and retain talent. In 2018, In line with the work already developed and the company launched its one-year career- with the Purpose program, the company accelerating Young Talents program. Twenty- created and implemented 19 projects under four professionals were selected to start the umbrella of the Ser MRV program, their careers in engineering for a program launched in 2018 with the purpose of that includes initiatives, as job rotation, in promoting a change in vision and attitude all areas of engineering and other interface among its employees – without which, boards, development of behavioral skills and according to the construction company’s technical knowledge. understanding, it is not possible to achieve the objective of contributing to the The initiative counted on the participation transformation of society. This work resulted of 525 interns and Engineering Auxiliaries, in the definition of four pillars: who underwent tests of logic, technical test,
Move – Actions dedicated to well-being and quality of life, Evolve – Incentive to constant learning through training such as: and relevant content, such as: My Doctor – Channel in partnership with the company Develop – Platform for distance training and capacity Teg Saúde, which has Doctors, Nurses, Physiotherapists building in various areas of knowledge. and other professionals in the area so that the employees Leader Development – Launched in 2018, the program receive guidelines and a second medical opinion about encompasses 600 leaders from various areas so that what they need. Enquiries can be made by e-mail: they can assimilate and disseminate the company’s [email protected]. purpose to their teams. It is the most comprehensive Active Living – Encouraging the practice of physical program ever adopted by MRV for this public, and counts activities and promotion of events, such as Health Week. on the partnership of the consultancy Korn Ferry, one of In 2018, a partnership was established with a platform the world’s leading specialists in this type of work. The that encourages healthy competition among MRV trainings are face-to-face, with distance complement, employees throughout Brazil. and the first of the three modules – Self-Leadership, Your Mind – Employees with psychological problems fill Team-Leadership and Organization-Leadership – was out, under secrecy, a worldwide standard form so that completed before the end of the year. the disorder can be diagnosed and obtained, free of charge, sessions with experts to deal with the case. The program was launched in 2018.
MRV | 2018 SUSTAINABILITY REPORT 64 Valorize – Promotion of employee appreciation Una – Stimulus to the integration and the good relationship and recognition. of all. Examples range from end-of-year parties to local Green Blood Length of Service Valuation events, such as Coffee with the President, Board of Directors Program – The program was created in and with the other employees. 2017 to recognize employees with more than 20 years of work at MRV. In 2018, it was expanded to value employees who complete years of work in the company. In 2018, 8,602 employees were honored by means of communications, receiving gifts and the protagonists of an event of recognition.
In addition, the Communication Plan maintained by the company includes details of all the communication actions to be carried out during the year to disclose the Integrity Program, including, in addition to information on vehicles/forms of communication, data on the intended audience, purpose, dates on which the communication took place and main themes that will be disseminated. Management cycle professionalizes Among the main themes addressed in the leadership development Communication Plan are the content of corporate policies related to the anti-corruption The first People Management Cycle, adopted in 2017, theme. The same occurs with the training provided the initial decision making regarding the sessions, which have as their scope, among positioning of leaders in the organization. others, the Anti-corruption Law and Policy, Conflict of Interest Policy, Integrity Chat The program encompasses the self-assessment and evaluation of and Minute Pilot of Ethics (in stores and the immediate superior and the career committee, in which the construction sites). participants are classified according to their potential and 6Box matrix performance. The goal is to identify career development From September 2017 until August 2018, 21 opportunities, identify potential successors to leadership positions face-to-face training sessions were held, in and to support management decision making. addition to the following e-learning Culture of Integrity MRV, applicable to all employees. In 2018, the People Management Cycle involved 600 leaders in The trainings are published on the site: coordination, management and direction positions. As a result www.mrv.com.br/institucional/pt/a-mrv/ of this process, about 30% of the participants received salary programa-de-integridade progression or promotion and 5% of managers were dismissed. The 205-2 output of the Cycle is also Individual Development Plans (IDPs).
MRV | 2018 SUSTAINABILITY REPORT 65 More than these programs, MRV maintains a On the innovation front, MRV promotes the series of initiatives aimed at the qualification Ideas Marathon, a competition among its of its employees. An example is the Academy employees for the presentation of proposals of Leaders, which in 2018 promoted the to increase efficiency, reduce costs and other development of professionals from various levels solutions that contribute to the business of management, with a focus on innovation, strategy. The suggestions are submitted to leadership skills, organizational and financial several stages of evaluation and the five best aspects. During the year, 31,900 hours of training ones are adopted by the company, with their were given, with: respective authors benefited from awards 404-1 ranging from R$10 to R$50 thousand.
37,416 people trained (virtual and in person) On the other hand, Rumo ao Topo values 77 in-person courses and training the efficiency of the works, rewarding 30.8 thousand hours of distance learning those that are delivered with lower costs (DE) courses and deadlines. The regional managers and coordinators of the three best-performing The management of the number of projects receive one car each, while their employees who take the virtual courses takes respective control teams are rewarded with place through the Develop Platform. financial resources.
One of the company’s most important All administrative employees who occupy actions is the Note 10 School program at the role of assistant and levels above also the construction sites, which since 2011 has participate annually in the performance received investments of over R$3 million, evaluation process, which is part of the Profit with more than 45,000 people benefited Sharing Program and is considered in the and a 25% reduction in labor turnover. The break down of income. initiative aims to reduce illiteracy, promote 404-3 computer science courses and investing in the qualification of the professionals who Also, the number of employee hirings was work on the construction sites and also greater than the number of firings, resulting in the neighbors of the works that have in a positive balance, or in other words, more schools. In 2018, there were 25 schools, people were incorporated, mainly males in the bringing together 80 classes and benefiting Southeastern region. employees and neighbors. 401-1
The Academia de Líderes (Leader Academy) is one of the resources used to increase the qualification of professionals and was responsible for the training of 37,416 people in 2018, either presentially or online distance
MRV | 2018 SUSTAINABILITY REPORT 66 Number of hires and dismissals Hiring and turnover rates 401-1 401-1
2018 2018
Hiring Dismissals Hiring rate (%) Turnover rate (%)
By gender By gender
Women 2,062 1,577 Women 10.39 3.22
Men 17,792 12,007 Men 89.61 5.43
By age group By age group
Up to 30 years 7,612 4,890 Up to 30 years 38.34 4.98
Between 31 and Between 31 and 10,155 7,222 51.15 5.19 50 years old 50 years old
From the age of 51 2,087 1,472 From the age of 51 10.51 4.50
By region By region
South 4,164 2,319 South 20.97 4.68
Southeast 10,149 7,345 Southeast 51.12 4.91
Midwest 2,147 1,532 Midwest 10.81 6.58
Northeast 3,149 2,315 Northeast 15.86 5.28
North 245 73 North 1.23 3.18
Total 19,854 13,584
MRV | 2018 SUSTAINABILITY REPORT 67 Health, safety and well-being legislation is in force health demands. The method of assessing effectiveness may be 103-2 | 103-3: Occupational health and safety written examination, practical assessment or MRV is a highlight in its sector in its other assessment by the instructor, provided accomplishments to ensure safety and that it complies with the legal requirement. promote the health and well-being of its Once the certificate of participation/approval employees. With a priority focus on prevention, has been issued, the training is considered to the company has a nationwide Health have been effective. and Safety Management system, certified according to the requirements of the OHSAS On the other hand, the evaluation of the 18001:2007 standard, whose scope includes effectiveness of the Environmental Program 100% of the company’s own labor force and of all training related to awareness is and third parties. The health and safety governed by a specific procedure and by professionals involved in the implementation internal audits; and of the Health, Safety of the management system (Engineers and and Environment (HSE) system. The Site Technicians in Occupational Safety, Doctors, Engineer should analyze the results of the Healthcare Professionals, etc.) Coordinators HSE Behavioral Assessment and guide the and of the Work and Technicians of Nursing) necessary improvement actions. Through follow the definitions of the Regulatory behavioral evaluation, the Safe Practice Index Norms related to the Ministry of Labor and (IPS) is generated, which indicates adequate Employment (MTE) and to the Specialized performance in HSE at the construction site. Service in Security Engineering, and in adequado em SSMA no canteiro de obras. Occupational Health (SESMT). 403-1 | CRE6 The company maintains
The following are carried out exams and a certified Health and clinical evaluations by their own doctors or by qualified and contracted institutions, and all Safety Management occupational care performed have the data system and promotes stored via Integrated Software of Occupational Management; only doctors have access to clinical examinations and clinical information and to the employees’ medical records, according to the resolution evaluations, the results of of the Federal Council of Medicine (CFM which are accessed only by 1605/2000). All costs related to the exams performed are borne by the company, and the physicians responsible the employee receives in advance a guide with guidelines on date, time, address and for their performance recommendations for conducting the exams. 403-3 In 2018, the Health, Safety and Environment Policy was revised, also addressing the issues On the other hand, the face-to-face courses of quality and social responsibility. As part of have a cost center for their realization. the Sustainability Policy, it was validated by Efficacy assessment is recommended for all the Compliance area and approved by the training and mandatory for those whose safety Board of Directors.
MRV | 2018 SUSTAINABILITY REPORT 68 The policy provides the framework for the training matrix that defines, for each establishment of Occupational Health and function, training needs. Its purpose is to Safety (OSH) objectives, defined according identify the legal training required for the to the strategic direction of sustainability. relevant functions. The OHS indicators, targets, and programs associated with these objectives were In 2018, this performance was once again established in accordance with internal recognized by the market, receiving five regulations, which determine the system awards in different categories: for defining, monitoring, and review of objectives and targets related to safety, People Management – Sinduscon-ES health and environmental performance, as Control of hazards and risks on site – Seconci-SP well as relevant management programs. The Environmental management of the work ultimate responsibility for OSH lies with senior environment – Seconci-SP management, composed of executives with Health control in the construction site – responsibility and authority over the subject Seconci-SP for exercising some type of control over Preventive Company and Outstanding system requirements. Company in the Living Area – Sinduscon-MG and Seconci-MG Investments in safety training totaled Occupational Safety – Vitae/Seconci-Rio R$2,198,054.67 in 2018. In addition, MRV maintains an annual planning of Projects such as Active Life and My Doctor health, safety and security campaigns are examples of initiatives aimed at the environment, which can also be part of well-being and health of employees. Others the action schedule of the Program of in the same sense are the Health, Safety Working Conditions and Environment and Security Dialogues and the Environment in the Construction Industry (PCMAT), (DSSMA) and the Internal Workplace Accident Environmental Risk Prevention Program Prevention Weeks (Sipat), carried out (PPRA) and Occupational Health Medical regionally by the Internal Commissions for Control Program (PCMSO). There is a Accident Prevention (Cipa).
MRV | 2018 SUSTAINABILITY REPORT 69 In 2018, MRV achieved the goal of reducing Among the main pathologies identified, which serious occurrences and not registering fatal generated more attestations and hours of accidents, but saw an increase in the total number work lost, are diseases of the musculoskeletal, of light accidents due to the changes it has been digestive, and respiratory, eye and appendage promoting in its construction process, replacing diseases, skin and subcutaneous tissue diseases. masonry with concrete wall. With more works 403-2 inserted in the new method, which includes heavy equipment in an accelerated construction process, According to the indicators of the Occupational the number of light accidents dropped from 248 Health area, the areas and processes of MRV to 340, being that the functions most involved in do not have high rates of occupational disease. accidents are: construction workers, concrete form Medical absenteeism is associated with a assemblers, bricklayers, carpenters and painters. common disease. Causing the construction company to intensify 403-3 training and qualification of employees. 403-2 The absenteeism rate for the period was 0.69. In the works, the index was 0.81 and is higher Ergometric analyses were also performed to in the South (1.06) and Southeast (0.81) regions, identify the causes of the problems and studies varying according to the number of employees were carried out to verify the need to change working in each region. the Personal Protective Equipment (PPE). These are initiatives that require an observation period to identify appropriate solutions. Absenteeism by region in 2018 (%)* 403-2
Because they were small accidents, the events resulted in fewer days off than in 2017. Work 0.81 South 1.06 Days lost due Southeast 0.81 Year to accidents Northeast 0.75 403-2 Midwest 0.47 2018 4,313 North 0.11 2017* 8,940 Administrative 0.40
* The values for 2017 were recalculated, and are South 0.39 different from the number presented in the previous Southeast 0.42 year’s report. Midwest 0.34 102-48 Northeast 0.30
In total, the No Accidents Production Index North 0.16 closed out 2018 at 99.1%, while that of 2017 was Grand total 0.69 99.3%. These numbers are calculated according * Illness absenteeism rate = workdays lost in the period to the Brazilian Standard (NBR). / number of employees x scheduled work hours in the period) x 100. Absenteeism due to illness: includes all absences due to illness or medical procedure.
MRV | 2018 SUSTAINABILITY REPORT 70 The company also recorded a significant reduction in the average number of professionals housed on construction sites: 26%, while in 2017 the drop had been 36%. The smaller contingent of people housed contributes to reducing operational risks and drives the development of the locations where MRV operates, through the generation of jobs and income. In 2018, the organization advanced in the goal of ending housing in houses, increasing the number of workers staying in hotels, hostels and central lodgings, in compliance with the legislation.
Type 2018 2017
Home/central 316 838
Hotel/ 991 807 guesthouse
Grand total 1,306 1,645
For the coming years, in addition to maintaining and improving the work already developed, one of MRV’s main objectives is to obtain the SA 8000 certification, which establishes the requirements to be met by organizations, including the establishment or improvement of workers’ rights, workplace conditions and an effective management system.
MRV | 2018 SUSTAINABILITY REPORT 71 In line with changes in society’s behavior and Customer market trends, MRV has been directing its customer relationship strategy to follow up on the experience it has had with its products experience and services. It is known that consumers today are not satisfied with buying a good, but they also expect satisfaction with what it 103-2 | 103-3: Customer health and safety can offer them in everyday life. In this aspect, the company took a leap to consolidate an innovative work in its sector.
MRV | 2018 SUSTAINABILITY REPORT 72 Since 2015, the Net Promoter Score (NPS) The scope of the NPS methodology has been adopted – quantitative and qualitative metrics that detect the degree methodology was of satisfaction and loyalty of customers at each stage of the link with the brand -, but expanded in 2018 to the resource was restricted to the customer reflect more faithfully relationship and technical assistance divisions. In 2018, the NPS also began to involve the the customers’ engineering team, making the necessary connection so that customer perceptions have degree of satisfaction an impact on the company’s decision making, and loyalty leading to the improvement of the quality of its products and to meet the demands after the purchase of the property. Squads, multifunctional teams organized by projects, In addition, the case of A People-Centric Journey also use NPS research to search for solutions won the Innovation category of the Customer already adjusted to consumer expectations. Experience Award, granted by Tracksale, a specialist in customer satisfaction management To get an idea of how much the treatment for “transforming the paradigm of customer intended for clients changes with this vision relationship, offering more than a competitive of relationship, an example is someone product, thinking about each action, each project entering a perfect apartment that has one from the client’s point of view, in a daily and of the hollow floor quadrants. As he walks on continuous process to provide him or her with a that floor, he makes a noise. Technically, the relevant and enchanting experience with MRV.” floor is quality and safe, but for the person who hears the noise has an unpleasant The other highlight action was the holding feeling, suggesting problems. Experiences of meetings with internal teams to seek like this, when detected by the NPS and engagement, in addition to visits to customers’ connected to the areas of engineering and homes and consultations by e-mail and text technical assistance, for example, began messages by telephone, all previously authorized to be corrected to provide greater by the residents who expressed dissatisfaction, satisfaction to customers. to investigate suggestions and detect the possibility of improvements relating to the Throughout the year, two major actions were properties and services. taken to expand and improve this work. The first was the mapping of the entire customer One of the issues raised was the extension of journey – from the moment of purchase, technical assistance opening hours, until then including monitoring of the work, call center concentrated in the commercial working hours. and financing until the consultation on the Due to this need, MRV started a test in a regional level of satisfaction nine months and 18 of Belo Horizonte (MG), extending the hours from months after the delivery of the keys. The 8am to 8pm and from 8am to 2pm on weekends, initiative provided MRV with a complete view in order to verify what would be necessary in of the customer experience, detecting the terms of the adequacy of the escalation of care steps that need more attention. teams, and the degree of customer satisfaction with the change.
MRV | 2018 SUSTAINABILITY REPORT 73 In 2018, in addition to all this work, the post MRV’s letters, reverberating a range of at assessment of the NPS indicator became a least 10,000 people. profit sharing goal (PLR) of the Presidency and the Production Department, for example, In 2019, the construction company will expand establishing the monitoring of customer the project, developing Lovers 2.0. The idea experience as the company’s strategic pillar. is to thank customers who praise through the NPS research and also forward the positive MRV also saw the opportunity to develop assessment of consumers to the employees actions with customers who spontaneously responsible for the work, also recognizing the express appreciation for the brand on their value of the teams. social networks, the so-called “lovers”. On the basis of the information presented about The “lifetime” relationship concept, on the their lives, and the Client Relations area has other hand, is intensified with the Forever MRV produced personalized letters celebrating their project, which promotes, through the Technical personal achievements, to thank MRV for the Assistance (TA) area, immersions with clients to public praise they give MRV and send gifts learn about their demands in different stages, according to their personal tastes – buoys for such as the implementation of condominiums, swimming pools, aprons, speakers, etc. The the election of building managers and impact was so great that customers started to inspections for key delivery, for example, following the post-purchase years, while the buyer is linked to MRV.
In 2018, the company launched 41 videos on the YouTube channel MRV School of Building Managers, in which, in a relaxed manner, young presenters provide guidance on topics such as prevention and firefighting, building insurance, maintenance and water reservoir, solar photovoltaic energy, among others.
MRV maintains strict control of the materials, processes and procedures adopted in its construction sites, in addition to being constantly in search of innovations that benefit its customers, contributing to their well-being and environmental preservation. 103-2 | 103-3: Customer health and safety | 416-1
MRV | 2018 SUSTAINABILITY REPORT 74 Channels and attendance In 2018, the Talk to your Customer project, aimed at the call center team, sought to MRV has been working in recent years to make combine training to solve problems with its call center professionals serve clients in a a more modern service style, in which the personalized manner, without the distance attendant has more autonomy to interact imposed by the fulfillment of a roadmap that with the client in the way he considers has become the standard in Customer Service most pleasant, always with the objective of Services (SAC). solving the problems as quickly as possible. The project was awarded in the Visionaries The company is increasingly focused on category by ClienteSA magazine. working on both its human and digital side. For understanding that the real world has no more The company also developed a work boundaries for the virtual world, we invest in through which the Attendants were called artificial intelligence to make customers’ lives to answer a questionnaire that simulates simpler and easier. But you know that only situations presented by customers to verify involvement can build lasting relationships. the most assertive and complete answers. The idea was to observe the percentage of In order for the client to always have the engagement and define a training model best of both worlds, MRV wants to transform for employees who presented potential for its experience with the human service of improvement at work. This stage will take the call center into something positive, place in 2019, within the framework of the and memorable. The School of Customer project called School of Experience. Experience offers specialization to the Attendants, with in-person and online training In 2018, the call center received 543,356 calls, and innovative actions to develop and to of which 95.2% were answered. Requests stimulate empathy. for information corresponded to 85.2% of calls and 76.5% of complaints received were resolved resolved in up to five work days. Three years ago, on average, two customers per month called the call center to praise MRV. In 2018 the number rose to ten.
"To be green blood is to make dreams Another change prepared for 2019 is the come true and represent one of the reading and response of emails from the biggest companies in this country.” Contact Us service using artificial intelligence. The novelty will allow the service to no longer Edson Batista de Melo be limited to reading and answering sentences, Virtual Store Manager but longer texts, solving the simplest demands and forwarding only the most complex cases to the service team.
The virtual assistant Maria Rosa Vaz, one of the channels of communication with customers, was increased in 2017 with the use
MRV | 2018 SUSTAINABILITY REPORT 75 of artificial intelligence and in 2018, joined Conveniences the social network Facebook and was made available on the Relationship Portal – part 103-2 | 103-3: Indirect economic impacts | 203-2 I of the expansion strategy. This allowed a 103-2 | 103-3: Product and service labeling number of problems that chatbot forwarded to other links, such as obtaining a duplicate, for The search for excellence in service is reinforced example, would be resolved directly with the by the offer of benefits. In this respect, the responses on Facebook. Of the total number of company offers solutions such as MRV Mais, clients who use Maria Rosa Vaz via Facebook, a program exhibited on the Relationship 82% are served by it, with no need to direct Portal that includes services such as MRV their attention to human care. In 2018, around Decora, which provides tips for decorating the 15% of the contacts made by customers were apartments; My Decorated, with examples through the digital service of Maria Rosa Vaz. of projects that can be inspiring; and the Hands on the Wheel, a platform that allows In addition to continuing and improving the residents to offer their services and products to work with NPS, in 2019 MRV plans to offer neighbors, a way to supplement the income. the care of Maria Rosa Vaz – her artificial intelligence – also through WhatsApp and When inaugurating an enterprise, MRV to develop the Omnichannel solution, which promotes the Delivery of Dreams, a social event allows to concentrate in the same information among residents. At the time, they receive the base all the interactions made with the Owner’s Basic Manual and the Sustainable customer, making the Attendants and all Resident booklet, with information on recycling, the other employees who have access to the energy and water management, in addition client’s background summary, have a complete to other sustainable actions. They also know history of these contacts, eliminating stages the Online Manual, which is available on the and making it quicker to solve problems. Relationship Portal. Residents are also invited to participate in a satisfaction survey that provides MRV with indications of process improvements, service and relationship. 417-1 The Delivery of In compliance with ISO 14001:2015, MRV Dreams promotes identified both the internal and external the fraternization contexts that may affect its business, processes and services. In its Sustainability of newly inaugurated Risks and Strategic Direction form, the organization identifies and defines its context, enterprises’ residents the risks and opportunities related to its environmental performance. Through the Swot Tools and the Sustainability Risk Matrix, the community/neighborhood represents a strength from the Swot perspective and an
MRV | 2018 SUSTAINABILITY REPORT 76 opportunity for improvement according to the risk matrix, associated with the Private Social Investment Program. 103-2 | 103-3: Local communities | 413-2 | 103-2 | 103-3: Customer health and safety | 416-1
Following these guidelines, the company conducts the Good Neighborhood program, a private social investment action that involves the relationship with communities neighboring the projects. During MRV’s stay in the territory, social impact actions are implemented in favor of local development. Operationalized by a partner, the Good Neighborhood seeks engagement with the communities through dialogue and actions to improve the quality of life through the renovation of public facilities, support for local social organizations and the creation of an agenda to serve the communities. 413-1
MRV maintains a structured channel for the neighborhood, the Dialog with You, through which complaints, suggestions, doubts or compliments can be sent. The channel is available by e-mail ([email protected]) and telephone (31 3615-7177). Complaints can also be made through the Confidential Channel. 103-2 | 103-3: Local communities
The program was created in partnership with where the company seeks to leave a legacy Seconci-Rio, the first state to implement the for the community in relation to citizenship, initiatives, in 2016. Today he is in ten territories environment, recovery of public facilities, in the city of Rio de Janeiro (RJ) and metropolitan implementation and execution of demands. region and in other states of the country, 203-2
MRV | 2018 SUSTAINABILITY REPORT 77 In order to generate significant economic positive impacts in the regions where MRV operates, in 2018, it allocated approximately R$222 million to the following fronts: 203-1 | 203-2
In R$ million Sustainable urban mobility: R$57.8 Sanitation: R$71.5 Urbanization: R$36.4 Squares, parks and landscaping: R$24.6 Education: R$20.0 Electrical networks: R$10.4 Health: R$10.2
Customer satisfaction
A series of initiatives is adopted to verify the degree of customer satisfaction. In addition to the application of “To be green blood is to make a difference in the the NPS methodology, there are surveys with residents lives of clients and the communities in which MRV at the time they receive the keys to the property. In operates. This generates pride for all of us and 2018, this survey determined that the index of clients brings positive results for the brand, as an increase that would indicate MRV to other people was 91.5%. in sales and attraction of talent.”
The company also began, in July 2018, the work Bianca Vargas of NPS in the call center, having obtained a note Executive Customer Relationship Manager of the satisfaction survey of 8.2 in the period from January to June.
MRV | 2018 SUSTAINABILITY REPORT 78 MRV strives for a healthy, honest and productive Relationship relationship with all its stakeholders: investment analysts/sectoral market, associations and community leaders, industry associations, with other customers, employees, contractors, suppliers, investors and shareholders, Non-Governmental Organizations (NGOs), capital providers, stakeholders neighborhoods, educational institutions and consumer protection agencies. 102-40
MRV | 2018 SUSTAINABILITY REPORT 79 They are engaged by the various areas of information through internal communication the business. The procurement department and are involved by the Human Development holds meetings with suppliers in the 22 states department in programs for their professional in which MRV is present to show local and and Personal advancement. NGOs international opportunities and to present the and industry associations receive MRV business governance sustainability guidelines. representatives to learn about the company’s Investor relations include meetings in Brazil strategies and identify solutions for the sector and abroad, generally monthly, and the and the country. clients receive the most diverse contacts to be informed about the progress of their work To prepare the revision of the Materiality and improvements that the company has been Matrix, the basis for the 2018 Sustainability making in the neighborhood. They can also Report, MRV disclosed on Facebook get in touch with the construction company and LinkedIn, for 30 days, a stakeholder to ask questions about the work, payments perception collection questionnaire. The and documentation, as well as forwarding engagement of the various stakeholders claims. The Commercial and Real Estate went far beyond what was expected: it had Credit Directorates and the Presidency have more than a thousand respondents, giving constant meetings with financing agents to consistency to the review of the matrix and, present the business plans and MRV’s solutions consequently, to the report itself. for the enterprises. Employees receive daily 102-43
MRV | 2018 SUSTAINABILITY REPORT 80 Identification and selection of stakeholders 102-42 | 102-44
Stakeholder group How it was identified and selected Main topics raised
Investment analysts/ Leading market analysts Company reports industry market
Associations of which the company is a Community Sustainable development, member and community associations in associations/ mitigation of possible problems the cities and/or neighborhoods where Leaderships and progress of the work the company does business
Capacity building, joint project Associations of the civil construction Industry associations development or discussion of sector in which the company participates standards and legislation
Technical assistance, parcels, The company has a base of more than doubts, visit to the site, Clients 360 thousand customers advantages club, My MRV App and sustainable development
The company has administrative and Employees construction employees, all of whom Training and well-being are engaged in
Development, training and monthly management of each The company has third parties that contractor. When it comes Contractors perform some services in its works to hosting, the inspection is daily through software and management report
The company has more than 9 Suppliers thousand suppliers throughout Brazil
The company is publicly traded and Investors and is in the new market, with 66% of its shareholders shares in free float
The company maintains partnerships N.A.* NGOs with several NGOs to define its social and educational activities
Capital providers Large private and public banks
The company has more than 200 Neighborhood construction sites in 157 Brazilian cities, all of them with neighborhoods
* N.A.: not available. In addition to the work developed with employees and customers, the company also adopts programs to strengthen the harmony and dissemination of its ethical values and sustainability between its suppliers and the communities with which it interacts.
MRV | 2018 SUSTAINABILITY REPORT 81 Suppliers Companies should also commit to adopting anti-corruption practices, during the partnership 102-9 | 103-2 | 103-3: Shopping practices | 103-2 | period, are subject to the possibility of being 103-3: Environmental assessment of suppliers | evaluated and audited, presenting requested 103-2 | 103-3: Diversity and equal opportunity | 103-2 | 103-3: Social evaluation in suppliers | information when requested. 103-2 | 103-3: Product and service labeling In the qualification process, MRV promotes training The suppliers are selected based on technical, on the values that govern its business and the strategic, commercial and quality criteria, with procedures for operating on construction sites. All priority to companies that, more than suppliers suppliers are informed about the guidelines of MRV’s of materials, equipment and services, act as Code of Conduct, which contains, among other partners in the construction of sustainable aspects related to human rights, specific clauses on development and are in line with MRV’s values the Anti-corruption Law and the prohibition of child of integrity. or slave labor.
Based on its Supplier Relationship Policy – The Code is described in all contracts and which complements other devices, such as is available on MRV’s website. In addition, the Supply Policy, Supplier Qualification and suppliers receive monthly bulletins with Evaluation and of Presentation and Purchasing guidance on good practices related to Guidelines –, the company requires, in the sustainability. They also have an exclusive process of contract approval, the presentation communication channel with the Supplies of documents that attest to the fulfillment area (e-mail: [email protected]), of labor and labor requirements as well as through which they can send suggestions, compliance with qualification standards criticisms and comments that contribute to specific to its activities. the improvement of business and integrity and sustainability practices.
In December 2018, the company had 8,026 suppliers – of which 68% are considered local, i.e., from the same state of construction -, earmarking R$1.85 billion to the contracting of materials and services for its works and administrative areas. It is estimated that, in 2019, the amount will reach R$2.24 billion to support the increase in sales and desired launches. 102-9 | 103-2 | 103-3: Procurement practices | 204-1
The total number of suppliers is lower than in the previous year (8.5 thousand), reflecting not only the adoption of the concrete wall construction method, which requires fewer materials and equipment, as well as the redirection that the company has been promoting in its purchasing strategy.
MRV | 2018 SUSTAINABILITY REPORT 82 MRV intends to increasingly expand the dates or orders already met, among other acquisition of packages of solutions, instead items, giving greater agility to the process and of acquiring materials that require assembly relieving the work of the purchasing team. by its employees or by third parties and Thus, the Procurement area gained more time specialized professionals. An example of the to exercise its main function of negotiating difference between one model and another with suppliers. The expectation is that the can be given by the way of buying the wiring system will be used in 100% of the works and of an apartment: instead of buying the wires begin to be extended to suppliers in 2019 so to insert in the hoses that will be implanted in they can check payments and invoices, among the walls, you get a kit with all the wiring ready other information. to be installed in the units. It is the purchase by system, which, by reducing the number of suppliers, also contributes to provide better The forecast is that the quality negotiations, besides making MRV more like an industry. chatbox system will be used in 100% of the works In addition, through the Turnkey Contract – the name given to this purchasing model – the and will be extended to contractor makes a complete module (the roof, for example), preventing different technical suppliers in 2019 assistance from being activated or transferring responsibility to each other in the event of possible problems with materials or in the Another important advance was the infrastructure. The purchase by system can adoption of machine learning to improve be used in works such as the entrance of the price predictability work. The technology enterprises, swimming pools and sports courts. uses historical databases and correlates them, projecting trends of increase or Throughout 2018, MRV developed actions decrease in the cost of inputs in the market to optimize its purchasing processes and in general, which subsidizes decision-making. monitoring of deadlines, and resolve any risks Price monitoring also takes into account arising from business with suppliers, gain seasonality, logistics costs, dollar behavior agility in negotiations and get the best prices and all other factors that influence the prices for its developments. of materials, equipment and products.
On the technological front, the use of artificial Another novelty was the implementation intelligence has increased access to data of software for the registration and previously only available to the Procurement management of direct suppliers of materials team, which provided it via e-mail or and services. Suppliers will now enter all the telephone contact. With the use of chatbot, information regarding their companies into it became instantaneous the consultation of the system, including documents, permits and Engineers and their assistants, directly from certificates, so that MRV can have greater construction sites, on purchase orders, delivery and better control over the regularity of each
MRV | 2018 SUSTAINABILITY REPORT 83 partner. The change will allow the detection the need for updating or document renewal in a more agile manner.
In addition, the contract approval processes will be carried out by a company contracted to develop the system. In this step, it is necessary to check the compliance of each item purchased, observing all its specificities and the legal situation of the supplier.
The work will also have an impact on the management of suppliers considered strategic, with the adoption of a greater degree of demand and control than with other partners due to the importance for the development of business. The differentiated treatment will provide greater effectiveness in the management of all purchases.
Other actions that stood out in 2018 in negotiation and contracting of materials and services, relation to suppliers also involve Compliance while at the same time avoiding any familiarity with work and the use of renewable energy. suppliers. Partners are encouraged to report to the Confidential Channel any indication of favoritism on the The Supplies area also acts in synergy with part of any construction company employee. the instances responsible for risk management in order to ensure integrity in all stages of the MRV adopts the Integrity Due Diligence process (DDI) relationship with suppliers. When deviations for its supply chain, following the criteria of the Integrity of conduct are identified, joint investigations Due Diligence Policy in order to ascertain relevant are carried out to clarify the cases and information on their procedures in relation to compliance subsequently take measures considered with the legislation pertinent to their areas, in addition appropriate for each type of situation. The to the relationship with public and political agencies, for analysis of requests for materials and services example. It is a process of preventive assessment of risks is not restricted to the team of Supplies, but of corruption, reputation and integrity in relationships also involves a system of access segregated with suppliers, service providers, partners, sponsors and by areas and functions, processing in different beneficiaries of MRV, based on profile assessment, history instances of approval. of corruption practices and presence on restriction lists.
103-2 | 103-3: Anti-corruption | MRV adopts rotation among its Supplies 103-2 | 103-3: Social evaluation of suppliers | employees in its purchasing portfolios, 103-2 | 103-3: Freedom of association and collective bargaining allowing them to accumulate experience in the
MRV | 2018 SUSTAINABILITY REPORT 84 All potential suppliers, partners, service sustainability at the center of decisions, which providers, sponsors and beneficiaries includes actions for a low-carbon economy. submitted to the IDD must pass through MRV seeks to be a great showcase for engaging Level 1 of the analysis; and, if red flags small, medium and large companies that do are identified, Level 2 must be applied. If not have internal practices to address these no red flag is identified, the action will be issues. For its employees, it provides external considered approved and it is possible to consulting services to those who are interested move on to the negotiation stage. In the case in participating in the process. of identified relevant factors in Level 2 of the analysis, the approval shall be defined by the Also in the year, MRV held at its headquarters Compliance area and, if necessary, by the the second annual event, Sustainability in Ethics Committee. the Supply Chain, bringing together the 103-2 | 103-3: Freedom of association main suppliers to encourage the adoption of and collective bargaining | 407-1 good compliance practices, health, safety, sustainability and the environment, in addition The stages of qualification of services and to the presentation of the company’s areas, materials include the requirement to meet such as Investor Relations. The construction environmental legal requirements throughout company sends an annual questionnaire the selection process, by means of the Health, to verify how the partners manage water Safety and Environment (HSE) qualification consumption, energy, human rights, among tables. Inputs that have significant other information, identifying and rewarding environmental aspects for the company pass the best practices and suppliers that stood out through this filter. in the dimensions of the tripod of sustainability 103-2 | 103-3: Environmental assessment of suppliers (economic, social and environmental).
In 2018, 2,593 new suppliers were selected by For the coming years, the goal is to criteria that included socio-environmental significantly increase the contracting of aspects. For materials requiring environmental complete solutions for the works, always in requirements, 100% have been attended to. accordance with criteria of quality, efficiency 103-2 | 103-3: Environmental assessment of suppliers | and sustainability adopted by the company. 308-1 | 103-2 | 103-3: Social evaluation of suppliers | 414-1 Thus, MRV hopes to further strengthen the partnership with its suppliers, entering the MRV adhered to the CDP Supply Chain chain and working closely with partners in Program, seeking to help build strategies with order to reduce as much as possible any its suppliers, identifying risks and opportunities problems with technical assistance after that contribute to managing the supply the purchase, since companies are now chain and mitigating climate change and responsible for the entire system. the emission of Greenhouse Gases (GHG), in 103-2 | 103-3: Customer health and safety addition to collaborating with the improvement in water management, among other impacts on ecosystems. An important objective is to put
MRV | 2018 SUSTAINABILITY REPORT 85 Also in 2019, the company intends to better study MRV Institute the logistics aspect of its purchases to verify the possibility of converging the transaction The MRV Institute is the social arm of the of several suppliers in order to reduce freight company, performing in the area of education. costs. One of the ideas is to contract the joint Since its creation in 2015, it has received 1% of transport of different inputs between a region the construction company’s net profit annually to and other, instead of having to bear freight develop, in partnership with companies, agencies costs fixed by each of the suppliers installed in and government agencies, initiatives dedicated nearby locations. Another possibility is to have especially to the areas of education of children a supplier of various inputs concentrate them in and adolescents in various regions of Brazil. In four a container provided by MRV for that purpose, years of work, the Institute has already invested when the cargo is complete, be transported at R$15.5 million in projects, which has benefited more once by the manufacturer himself. than 325 thousand people directly and indirectly in the communities where it operates. The possibility of outsourcing purchases considered to be less representative and less Investments in 2018 risky is still under analysis, making the Supplies area concentrate on the most important R$6.028 million, inputs for the works. In order to do so, it will be including administrative necessary to evaluate whether the contractor and personnel costs will be able to obtain similar or even better prices than those currently obtained by the R$4.32 million construction company. in projects, programs, actions and donations* If the changes prove feasible, MRV is expected to work at costs 5% below the market average. * Only those that were measurable based on the total number of people impacted.
MRV | 2018 SUSTAINABILITY REPORT 86 The contributions are destined to initiatives guided by the themes Education to Solve with associations, contributing for the Local Problems and Transforming Education agencies to fulfill their mission; and with a Focus on Sustainable Development. donations, which are transfers of values or The selection process involves MRV’s volunteer equipment to institutions, projects and events employees and a popular vote. aimed at social improvement. Partnerships are also established for the development of projects conceived jointly with other agencies. There is also the sponsorship of events and One of the editions was projects in the education, art and third sector segments, in addition to the programs directed to four projects developed by MRV itself. (each of which received In 2018, the initiatives had a direct impact R$80,000), and the other on the lives of 34,944 people and, indirectly, reached 104,832 Brazilians from various states to eight, which received of the country. The volume of people benefited considers all the projects carried out and R$30,000, impacting supported. In order to calculate the indirect 3,000 people. beneficiaries, the MRV Institute considers three times the direct beneficiaries, according to the calculation of the number of members of the Brazilian family of the Brazilian Institute of Geography and Statistics (IBGE).
Among the most prominent programs is “To be green blood is to be passionate about what Educate to Transform, which associates you do. In my case, I am a Social Worker and I found education with the three dimensions of in MRV the space to accomplish everything I believe sustainability – social, economic and in. As soon as I got here, the company was definitely environmental aspects -, carrying out public in my blood. I’m in love with what I do and I’m in love calls for transformative projects developed by with the company.” non-profit social institutions and individual candidates over the age of 18. In this program, Blenda Alves around a thousand proposals are received Social Responsibility Coordinator/MRV Institute each edition.
Until 2017, the Institute held an annual edition, selecting four projects to be funded, receive To know the winners of 2018 and previous years, just access the link: guidance on management and be executed. In www.institutomrv.com.br/pt and click on Educate to Transform. 2018, for the first time, there were two editions, The site also presents all the projects developed by the Institute.
MRV | 2018 SUSTAINABILITY REPORT 87 Another program is MRV Voluntários, which Moving Forward Project – The objective brings together employees willing to integrate is to awaken the entrepreneurial spirit in social actions. They can spend four hours a young people, still in school, stimulating their month of their working hours participating in personal development by providing a clear the projects of the Institute, and are trained for vision of the business world and assist in it. At the end of 2018, 2,300 MRV professionals accessing the labor market from an ethical were registered as volunteers. and responsible perspective. The action was carried out in Belo Horizonte with the Throughout the year, MRV Voluntários participation of 34 volunteers, impacting 335 developed a series of actions, among them: public school students with the themes: Our Planet, Our Home, Our Community, Our Nation, Living Library Project – The Institute carried Introduction to the Business World, Our World, out the Living Library action in partner The Advantages of Staying in School and institutions in Belo Horizonte (MG): BH Futuro, Connected to Tomorrow. Querubins, Creche Leonardo Fernandes Franco, Cidade dos Meninos and Pavonians. The Children’s Day – During Children’s Week, the volunteers promoted playful workshops volunteers brought a lot of joy and fun to the with the children and adolescents of the children from various social institutions in Belo institutions in order to present the enchanting Horizonte, Campinas (SP), Curitiba (PR), Londrina universe provided by the books, stimulating (PR), Porto Alegre (RS), Fortaleza (CE), Teresina reading and the children’s desire to take (PI), Salvador (BA), Recife (PE), Aracaju (SE), more and more of the space, keeping the Maceió (AL), Uberlândia (MG), São Paulo (SP), library alive. Four editions were held with Ribeirão Preto (SP), São José do Rio Preto (SP), the participation of 111 volunteers, impacting Juiz de Fora (MG), Macaé (RJ), Serra (ES) and 1,082 children and adolescents. Manaus (AM). The initiative had 200 employees and benefited 1,657 children.
MRV | 2018 SUSTAINABILITY REPORT 88 Another program conducted by the MRV A study carried out by the company has Institute, Your Child, Our Future, which until revealed that, currently, each R$1 invested 2017 offered school material kits to employees in the Institute is reverted in R$1.5 real for with children aged 6 to 14, was expanded, MRV due to the visibility obtained by the including children aged 0 to 5. For the new brand and the consequent attraction of public, the Institute distributes children’s books more customers. in order to stimulate moments of partnership between parents and children during the reading of the stories. In the year, 3,815 children and adolescents benefited from the school kits, while the books reached about 3,430 children.
All school material kits are composed of a backpack, case, ruler, black pencil, pointer and rubber. For the 6 to 10 year old age group, six brochure booklets are delivered, scissors, glue, pens and colored pencils; while teenagers from 11 to 14 receive six spiral notebooks and blue, black and red pens. Now, the leiturinha kit contains book and gifts according to the age of each child.
The intention of the MRV Institute is to continually expand the Educate to Change program in order to increase the volume of projects contemplated or the amount to be transferred. In the case of Your Child, Our Future, the goal is to develop a professional and mentoring project aimed at the children of employees who are between 15 and 18 years old. MRV Voluntários will expand its experience to new cities through a project to be launched named Voluntary Leadership.
The Institute works with its own goals and develops indicators that reveal the impact of its actions not only qualitatively, but also quantitatively.
MRV | 2018 SUSTAINABILITY REPORT 89 In 2018, MRV received no less than 40 Recognition awards related to innovation, sustainability, customer relations and management. Check out some highlights:
Global Entrepreneur EY – The founder of MRV Engenharia received EY’s Global Entrepreneur of the Year award in Monaco during the World Entrepreneur of the Year 2018. The first South American to earn the honor, he was chosen among candidates from 46 countries for his trajectory and the transforming power of his business
SUSTAINABILITY REPORT 2018 | MRV 90 Environmental Merit – Fiesp – MRV’s Carbon stakeholders, differentiation of competition, Management Plan led the company to receive market gain, innovation pipeline and scalability. an honorable mention at the 24th edition of the Environmental Merit Award from the Artificial Intelligence – ClienteSA – Pioneer in its Federation of Industries of the State of São sector in the development of artificial intelligence Paulo (Fiesp) which honors companies that with the My MRV application, the company was have stood out and brought significant results the winner of the Best Technological Contribution in the implementation of environmental and Project category and the best in the world Case of social projects in the State of São Paulo. the Year at the ClienteSA awards.
Best and Biggest – Exame – MRV was elected, Execution of works – MasterInstal Award – With for the second consecutive year, the best the case Industrialization of electrical kits for company in the civil construction sector in building systems, MRV conquered the first Brazil in the Best and Biggest ranking of place in the Technology category applied in the Exame magazine, one of the most prestigious execution of the installations of the MaterInstal business awards in the country. Award, promoted by the Electrical, Gas, Hydraulic and Sanitary Installations Industry Syndicate of RI – Institutional Investor – A reference in the the State of São Paulo (Sindinstalação) and the area of Investor Relations, the Institutional Brazilian Association for Conformity and Facility Investor magazine presented MRV at the top Efficiency (Abrinstal). of five categories of its annual ranking of the best companies, as follows Latin American IR Abrinq Seal – The construction company received professionals. The company was champion in from Abrinq Foundation the Child Friend Company the overall ranking in the following categories: certification in recognition of the actions developed Best IR Team, Best IR Program, Best Meeting by MRV Institute, which aim to promote the social with Analysts and Best Sustainability Practices, transformation of the country through education. in addition to Best IR Professional, in the Investors segment. It is the second consecutive year that the company is among the best.
Value Innovation Brazil – MRV was elected the most innovative construction company in Brazil in an award given by the newspaper Valor Econômico, promoted in partnership with the consulting firm Strategy& and with the support of the National Association for Research and Development of Innovative Companies (Anpei).
Whow! Innovation Award – In its first edition, the Whow! Innovation Award ranked MRV first among Brazil’s most innovative companies in the construction industry. Six criteria were taken into account in the study, conducted with 1.9 thousand companies: relevance of innovation, impact of innovation for
MRV | 2018 SUSTAINABILITY REPORT 91 Check out all the awards received by MRV:
Award Category Director
Medium and Large Honorable mention in Enterprises – for their 1 the 24th edition of the Fiesp contribution to the Environmental Merit Award environment
World Entrepreneur of the 2 Entrepreneurship Year Award Ernst & Young (EY)
Standard Intelligence Center (CIP) in 3 Whow! Innovation Award Construction partnership with DOM Strategy Partners
Valor Econômico newspaper in partnership with 4 Value Innovation Brazil Innovation Strategy& consulting and with the support of Anpei
Best and Biggest 5 Construction Magazine Ranking 2018 Exame
6 Sinduscon-ES 2018 Award Large Companies Sinduscon
Companies that Centro de Estudos
7 Communicate Best with Construction da Comunicação and Journalists Award Negócios da Comunicação Magazine
Technology applied in the Sindinstalação 8 12th MasterInstal Award execution of the installations and Abrinstal
Ranking Best Companies · Best CEO and Investor Relations · Best IR professional 9 Institutional Investor Professionals (IR) in · Best IR team Magazine Latin America · Best IR program
· Control of hazards and risks at the construction site 5th Seconci-SP · Environmental 10 Occupational Health and Seconci-SP management of the Safety Award work environment · Health control on the job site
11 Personality of the Year Leadership Época Magazine
MRV | 2018 SUSTAINABILITY REPORT 92 Award Category Director
· Best Company in the Civil Construction Sector 12 Época 360° Award Magazine · Company with Better Época Corporate Governance
· Best Technology Contribution Project 13 Customer Award SA 2018 Magazine · Case of the Year ClienteSA · Visionary Project
24th Association of Real 14 Estate Market Companies Economic Housing Ademi-BA of Bahia Award
Mining Economics 15 Good Example Award Globo Minas Network and Development
14th Edition of the Quality 16 and Business Excellence Honor for merit CMI/Secovi-MG Program (PQEX)
2018 Customer 17 Innovation TrackSale Experience Award
8th Brazilian LIDE – Group of 18 Leadership Leaders Award Business Leaders
Latin American Alliance of Organizations 19 Latam Award Customer Relationship for Customer Interaction (Aloic)
IT Media and The 100+ Innovative Engineering and 20 PricewaterhouseCoopers in IT Use Construction Industry (PwC)
XX Minas Award – 21 Construction Mercado Comum Business Performance Magazine
Top Of Mind Award 22 Builder WE Projects Uberlândia S.A.
19th Sinduscon-MG and · Preventive Company Sinduscon-MG and 23 Seconci-MG Workplace · Outstanding Company in Seconci-MG Safety Award the Living Area
Ecology and Municipal Council of 24 Environmentalism Award Campo Grande (MS)
MRV | 2018 SUSTAINABILITY REPORT 93 Award Category Director
25 Ranking Value 1000 Real Estate Developments Valor Econômico Newspaper
MESC Award – 100 26 Best Companies in MESC Institute Customer Satisfaction
McKinsey & Company Infrastructure 27 Digital Maturity Index in partnership with the and Transport newspaper Valor Econômico
Brazilian Institute of 33rd edition of the Excellence in 28 Finance Executives of O Equilibrista Award Corporate Finance Minas Gerais (IBEF-MG)
Top Of Mind Common 29 Leadership Magazine Market Award Mercado Comum
Seconci-Rio and 30 Vitae-Rio Award Occupational Safety Sinduscon-Rio
Top Of Mind 31 Ribeirão Leadership Tribuna de Ribeiro Preto Award Newspaper
· Incorporators 25th State Real Estate 32 · Builders O Estado de S. Paulo TOP Award Newspaper · More Brands
33 Value Large Groups Valor Econômico Newspaper
Brazil's Most Sdmired Legal Executive Officer 2018 Legal and Financial 34 Legal – Maria Fernanda Menin – Executive Yearbook Legal Executive Officer
Most Admired Brands Real Estate 35 O Globo Newspaper by Cariocas Sector Leadership
Icon Brands Award Real Estate 36 Vitória and Ibope Network 2018 – ES Sector Leadership
Environmentally Friendly 37 Environment City Hall of Fortaleza Seal – Fortaleza
23rd PINI Best of 38 Sectoral Initiative PINI Publishing House Construction Award
24th Fiesp 39 Carbon Management Plan Fiesp Environmental Award
40 Top Of Mind Award Leadership Gazeta de Piracicaba
MRV | 2018 SUSTAINABILITY REPORT 94 MRV’s sustainability report enters its eighth About consecutive year, presenting to all stakeholders an overview of the challenges, achievements and the results obtained in the governance, social and this report environmental dimensions.
MRV | 2018 SUSTAINABILITY REPORT 95 Prepared in accordance with the guidelines them: Conception of scenarios and assertiveness of the Global Reporting Initiative (GRI) in its in demand forecasting; Search for technology most recent model, Standards, in the Essential and business diversification; Attraction, option, the document covers the company’s retention and development of human capital; operations in Brazil from January 1 to December Ethics, transparency and integrity in business; 31, 2018 and, when indicated, consolidated Sustainable construction methods; Health, safety data from Prime, MRL Engenharia and and well-being of employees; Client’s experience; Urbamais are also reported. Log Commercial and Environmental solutions of the enterprises. Properties, a company of MRV Group, discloses 102-45 | 102-48 | 102-49 | 102-50 | the information referring to 2018 in its own 102-51 | 102-52 | 102-54 | 102-56 document and, as of 2019, will no longer be part of the group. MRV offers the following channels for comments and questions related to the report: Any restatements of information, scope and 102-53 limits in relation to the report published in 2017 are shown throughout the document, which Site: www.mrv.com.br was not submitted for external verification. The E-mail: [email protected] elaboration was based on a process of revision Telephone: (31) 3615-7100 of the Materiality Matrix, which found eight relevant themes, structured in three pillars – planning, construction and after-sales -, being
MRV | 2018 SUSTAINABILITY REPORT 96 Materiality Matrix
102-46 | 103-1
The initial list of themes used in the These three pillars underpinned the allocation materiality review process was based on of each theme considered important for the three pillars: sector and subsequently for the analysis of MRV Executive Managers. 102-47 Planning Work Sale/after-sales
List of themes used for the prioritization process of material and non-material themes:
Planning Work Sales and after-sales
Topic 1: Scenario conception Theme 6: Sustainable Topic 10: Customer and assertiveness in construction methods experience demand forecasting
Subject 11: Influence on Theme 2: Search for Theme 7: Management consumption behavior technology and and development of the and contribution to business diversification supply chain popularization of the concept of sharing and sustainability
Theme 3: Attraction, Subject 8: Employee health, Subject 12: Enterprise retention and development safety and well-being environmental solutions of human capital
Theme 4: Relationship with Theme 9: Impacts and Subject 13: Contributions public agencies, sector relationship with the to local development and agencies and influence on neighborhood during social regeneration public policies the works
Subject 5: Ethics, Subject 14: Low-income transparency and integrity housing and contribution to in business social inclusion
Legend:
Material themes Non-material themes
MRV | 2018 SUSTAINABILITY REPORT 97 Correlation with the Global Compact and the Sustainable Development Goals (SDGs)
Pillars Priority themes SDGs and goals Global Compact
Theme 1: Scenarios design and assertiveness in demand forecasting 11.1, 11.a 17.17 Theme 2: Search for technology and business diversification 8.2, 8.3 9.1, 9.4 Theme 3:
Planning Attraction, retention and development of human capital 8.3 5.5, 5.b Theme 5: Ethics, transparency and integrity in business 8.7, 8.8 16.5
6.3, 6.4 8.2, 8.4
Theme 6: Sustainable construction methods 9.1, 9.4 11.1, 11.2, 11.a, 11.3, 11.6, 11.b, Works 11.c 12.2, 12.5, 12.c
Theme 8: Health, safety and well-being of employees 11.1, 11.a 17.17
Theme 10: Customer experience
Theme 12: 11.1, 11.a 17.17 Undertaking environmental solutions
Sales and after-sales 17.17
Global Covenants (Captions):
To make sure that they shall not The effective abolition To develop initiatives to promote participate in violations of such rights. of child labor. greater environmental responsibility.
Businesses should support freedom of To encourage the development association and the effective recognition To eliminate discrimination and diffusion of environmentally of the right to collective bargaining. in employment. friendly technologies.
The elimination of all forms of forced Businesses should support Companies should fight corruption or compulsory labor. a preventive approach to in all its forms, including extortion environmental challenges. and bribery.
MRV | 2018 SUSTAINABILITY REPORT 98 2018 material themes and correlation with GRI Standards 102-47 | 103-1
Impact Material topics GRI topics GRI Standards Internal External
102-7: Scale of the organization GRI 102: General Scenarios 102-9: Supply chain design and disclosures assertiveness 102-15: Key impacts, risks, and opportunities X X in demand forecasting GRI 201: Economic 201-1: Direct economic value generated and distributed performance
102-9: Supply chain
102-16: Values, principles, standards, and norms of behavior
102-17: Mechanisms for advice and concerns about ethics
GRI 102: General 102-18: Governance structure disclosures 102-22: Composition of the highest governance body and its committees
Ethics, 102-23: Chair of the highest governance body transparency X X and integrity 102-33: Communicating critical concerns in business 102-34: Nature and total number of critical concerns
GRI 201: Economic 201-4: Financial assistance received from government performance
205-1: Operations assessed for risks related to corruption
GRI 205: 205-2: Communication and training about anti- Anti-corruption corruption policies and procedures
205-3: Confirmed incidents of corruption and actions taken
MRV | 2018 SUSTAINABILITY REPORT 99 Impact Material topics GRI topics GRI Standards Internal External
GRI 307: 307-1: Non-compliance with environmental laws Environmental and regulations compliance
GRI 405: Diversity and equal 405-1: Diversity of governance bodies and employees opportunity
GRI 406: Non- 406-1: Incidents of discrimination and corrective Discrimination actions taken
GRI 407: Freedom 407-1: Operations and suppliers in which the right to of association freedom of association and collective bargaining may and collective Ethics, be at risk transparency bargaining X X and integrity GRI 409: Forced or 409-1: Operations and suppliers at significant risk for in business compulsory labor incidents of forced or compulsory labor
GRI 414: Supplier 414-1: New suppliers that were screened using social assessment social criteria
GRI 415: Public 415-1: Political contributions policy
GRI 418: Customer 418-1: Substantiated complaints concerning breaches of privacy customer privacy and losses of customer data
GRI 419: 419-1: Non-compliance with laws and regulations Socioeconomic in the social and economic area compliance
102-2: Activities, brands, products, and services Search for technology GRI 102: General 102-15: Key impacts, risks, and opportunities X X and business disclosures diversification 102-13: Membership of associations
102-15: Principais impactos, riscos e oportunidades
102-34: Key impacts, risks, and opportunities Customer’s GRI 102: General X X experience disclosures 102-43: Approach to stakeholder engagement
102-44: Key topics and concerns raised
MRV | 2018 SUSTAINABILITY REPORT 100 Impact Material topics GRI topics GRI Standards Internal External
416-1: Assessment of the health and safety impacts GRI 416: Customer of product and service categories health and safety 416-2: Incidents of non-compliance concerning the health and safety impacts of products and services
Customer’s 417-1: Requirements for product and service X X experience GRI 417: Marketing information and labeling and labeling 417-3: Incidents of non-compliance concerning marketing communications
GRI 418: Customer 418-1: Substantiated complaints concerning breaches of privacy customer privacy and losses of customer data
301-1: Materials used by weight or volume GRI 301: Materials 301-2: Recycled input materials used
302-1: Energy consumption within the organization GRI 302: Energy 302-3: Energy intensity
303-1: Water withdrawal by source
303-2: Water sources significantly affected by GRI 303: Water withdrawal of water
303-3: Water recycled and reused
Sustainable 305-1: Direct (Scope 1) GHG emissions construction X X methods 305-2: Energy indirect (Scope 2) GHG emissions
GRI 305: Emissions 305-3: Other indirect (Scope 3) GHG emissions
305-4: GHG emissions intensity
305-5: Reduction of GHG emissions
306-1: Water discharge by quality and destination
306-2: Waste by type and disposal method GRI 306: Effluents and waste 306-3: Significant spills
306-4: Transport of hazardous waste
MRV | 2018 SUSTAINABILITY REPORT 101 Impact Material topics GRI topics GRI Standards Internal External
GRI 307: 307-1: Non-compliance with environmental laws Environmental and regulations compliance
GRI 308: Supplier 308-1: New suppliers that were screened using environmental Sustainable environmental criteria construction assessment X X methods CRE2: Intensity of water usage in construction
GRI Construction CRE8: Type and number of sustainability sector supplement certificates, classification systems and labelling for new constructions, management, occupation and redevelopment
GRI 102: General 102-11: Precautionary principle or approach disclosures
GRI 303: Water 303-3: Water recycled and reused Undertaking environmental 305-1: Direct (Scope 1) GHG emissions X X solutions GRI 305: Emissions 305-2: Energy indirect (Scope 2) GHG emissions
305-3: Other indirect (Scope 3) GHG emissions
102-8: Information on employees and other workers
102-16: Values, principles, standards, and norms of behavior
GRI 102: General 102-34: Nature and total number of critical concerns disclosures 102-41: Collective bargaining agreements
Attraction, 102-43: Approach to stakeholder engagement retention and X development of 102-44: Key topics and concerns raised human capital 401-1: New employee hires and employee turnover GRI 401: Employment 401-2: Benefits provided to full-time employees that are not provided to temporary or part-time employees
GRI 405: 405-1: Diversity of governance bodies and employees Diversity and 405-2: Ratio of basic salary and remuneration of equal opportunity women to men
MRV | 2018 SUSTAINABILITY REPORT 102 Impact Material topics GRI topics GRI Standards Internal External
GRI 406: Non- 406-1: Incidents of discrimination and corrective actions taken Attraction, Discrimination retention and 404-1: Average hours of training per year per employee X development of GRI 404: Training human capital and education 404-3: Percentage of employees receiving regular performance and career development reviews
GRI 401: 401-2: Benefits provided to full-time employees that are Employment not provided to temporary or part-time employees
403-1: Workers representation in formal joint management–worker health and safety committees
403-2: Types of injury and rates of injury, occupational GRI 403: diseases, lost days, and absenteeism, and number of Health, safety Occupational work-related fatalities well-being X of employees health and safety 403-3: Workers with high incidence or high risk of diseases related to their occupation
403-4: Health and safety topics covered in formal agreements with trade unions
CRE6: Percentage of the organization operating in GRI Construction verified compliance with an internationally recognized sector supplement health and safety management system
MRV | 2018 SUSTAINABILITY REPORT 103 GRI content index 102-55 Standards option Core/Comprehensive
GRI 101: Foundation 2016
GRI 102: General Standard Page Omission UNGC SDG disclosures 2016
Organizational profile
102-1: Name of the organization 7
102-2: Activities, brands, products, 7 and services
102-3: Location of headquarters 7
102-4: Location of operations 7
102-5: Ownership and legal form 7 and 32
102-6: Markets served 7 and 10
102-7: Scale of the organization 7, 9 and 11
102-8: Information on employees and 7, 9, 10, 58 and 59 3, 4, 5, 6 8 other workers
102-9: Supply chain 82
102-10: Significant changes to the 7 organization and its supply chain
102-11: Precautionary principle 15 and 17 or approach
102-12: External initiatives 7 and 31
102-13: Membership of associations 31 and 32
MRV | 2018 SUSTAINABILITY REPORT 104 GRI 102: General Standard Page Omission UNGC SDG disclosures 2016
Strategy
102-14: Statement from senior 3 decision-maker
102-15: Key impacts, risks, 3, 6, 17, 19 and 37 and opportunities
Ethics and integrity
102-16: Values, principles, standards, 8 10 16 and norms of behavior
102-17: Mechanisms for advice and 28 10 16 concerns about ethics
Governance structure
102-18: Governance structure 32
102-22: Composition of the highest 33 5, 16 governance body and its committees
102-23: Chair of the highest 33 governance body
102-33: Communicating 34 critical concerns
102-34: Nature and total number of 34 critical concerns
Stakeholder engagement
102-40: List of stakeholder groups 79
100% of employees 102-41: Collective are covered by a 3 8 bargaining agreements collective instrument.
102-42: Identifying and 81 selecting stakeholders
102-43: Approach to 31, 32 and 80 stakeholder engagement
102-44: Key topics and 31 and 81 concerns raised
MRV | 2018 SUSTAINABILITY REPORT 105 GRI 102: General Standard Page Omission UNGC SDG disclosures 2016
Reporting practice
102-45: Entities included in the 96 consolidated financial statements
102-46: Defining report content and 97 topic boundaries
102-47: List of material topics 97 and 99
102-48: Restatements of information 58, 60, 70 and 96
102-49: Changes in reporting 96
102-50: Reporting period 96
102-51: Date of most recent report 96
102-52: Reporting cycle 96
102-53: Contact point for questions 96 regarding the report
102-54: Claims of reporting in 96 accordance with the GRI Standards
102-55: GRI content index 104
102-56: External assurance 96
Material Standard Page Omission UNGC SDG topics
GRI 201: Economic performance 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 17, 22, 24 and 26 10 11, 17 and its components approach 103-3: Evaluation of the 17, 22, 24 and 26 management approach
201-1: Direct economic value 22 10, 11, 17 generated and distributed
During the year, MRV 201-4: Financial assistance received no financial received from government assistance from the government.
MRV | 2018 SUSTAINABILITY REPORT 106 Material Standard Page Omission UNGC SDG topics
GRI 202: Market presence 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 15 and its components approach 103-3: Evaluation of the 15 management approach
202-2: Proportion of senior management hired from the 32 6 8, 10 local community
GRI 203: Indirect economic impacts 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 22 and 76 11, 17 and its components approach 103-3: Evaluation of the 22 and 76 management approach
203-1: Infrastructure investments and 78 services supported 11, 17 203-2: Significant indirect 76 to 78 economic impacts
GRI 204: Procurement practices 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 24 and 82 7, 8 11, 12 and its components approach 103-3: Evaluation of the 24 and 82 management approach
204-1: Proportion of spending 82 8 on local suppliers
MRV | 2018 SUSTAINABILITY REPORT 107 Material Standard Page Omission UNGC SDG topics
GRI 205: Anti-corruption
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 24, 26, 27, 28 and 84 16 and its components approach 103-3: Evaluation of the 24, 26, 27, 28 and 84 management approach
205-1: Operations assessed for risks 10 29 related to corruption
205-2: Communication and training about anti-corruption 65 8, 16 policies and procedures
205-3: Confirmed incidents of 29 corruption and actions taken
GRI 301: Materials 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 38, 40 and 48 and its components approach 103-3: Evaluation of the 38, 40 and 48 7, 8, 9 6, 9, 11, 12 management approach
301-1: Materials used by weight 40 to 42 and 45 or volume
301-2: Recycled input materials used 41
MRV | 2018 SUSTAINABILITY REPORT 108 Material Standard Page Omission UNGC SDG topics
GRI 302: Energy 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 45 to 48 6, 9, 11, 12 and its components approach 103-3: Evaluation of the 45 to 48 management approach
302-1: Energy consumption within 46 the organization 7, 8, 9 302-3: Energy intensity 46
There was no reduction in energy consumption 6, 7, 9, 302-4: Reduction of due to improvements in 11, 12 energy consumption conservation and efficiency in MRV’s processes between 2017 and 2018.
302-5: Reductions in energy 46 requirements of products and services
GRI 303: Water 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 44, 45 and 48 and its components approach 103-3: Evaluation of the 44, 45 and 48 management approach 7, 8, 9 6, 11, 12 303-1: Water withdrawal by source 44 and 45
MRV does not capture 303-2: Water sources significantly water directly from affected by withdrawal of water water bodies.
303-3: Water recycled and reused 44
MRV | 2018 SUSTAINABILITY REPORT 109 Material Standard Page Omission UNGC SDG topics
GRI 305: Emissions 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 46 to 48 and its components approach 103-3: Evaluation of the 46 to 48 management approach
305-1: Direct (Scope 1) GHG emissions 47 7, 8, 9 11, 12 305-2: Energy indirect (Scope 2) 48 GHG emissions
305-3: Other indirect (Scope 3) 48 GHG emissions
305-4: GHG emissions intensity 48
305-5: Reduction of GHG emissions 47
GRI 306: Effluents and waste 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 40 to 44 and its components approach 103-3: Evaluation of the 40 to 44 management approach 7, 8, 9 6,11,12 306-2: Waste by type and 42 and 43 disposal method
During the year, there were 306-3: Significant spills no significant spills related to MRV’s operations.
MRV | 2018 SUSTAINABILITY REPORT 110 Material Standard Page Omission UNGC SDG topics
GRI 307: Environmental compliance 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 19, 48 to 49 and its components approach 7, 8, 9 11, 12 103-3: Evaluation of the 19, 48 to 49 management approach
307-1: Non-compliance with 49 environmental laws and regulations
GRI 308: Supplier environmental assessment 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 27, 82 to 85 and its components approach 7, 8 11, 12 103-3: Evaluation of the 27, 82 to 85 management approach
308-1: New suppliers that were 85 screened using environmental criteria
GRI 401: Employment 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 56 to 71 and its components approach 3, 4, 5, 6 5, 8 103-3: Evaluation of the 56 to 71 management approach
401-1: New employee hires and 66 and 67 employee turnover
401-2: Benefits provided to full-time 2, 3, 4, employees that are not provided to 63 and 64 3, 5, 8 5, 6 temporary or part-time employees
MRV | 2018 SUSTAINABILITY REPORT 111 Material Standard Page Omission UNGC SDG topics
GRI 403: Occupational health and safety 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 27, 48, 49, 63, 64, 68 to 71 and its components approach 103-3: Evaluation of the 27, 48, 49, 63, 64, 68 to 71 management approach
403-1: Workers representation in formal joint management–worker 68 health and safety committees
403-2: Types of injury and rates of injury, occupational diseases, lost 70 days, and absenteeism, and number of work-related fatalities 2, 3, 4, 3, 8 5, 6 403-3: Workers with high incidence or high risk of diseases related to 70 their occupation
It is included in the collective agreement signed between the unions and the company. Of the 99 conventions, only three 403-4: Health and safety topics states do not have specific covered in formal agreements with clauses: trade unions Goiás, Mato Grosso do Sul and Santa Catarina. In general, the clauses address the control of Personal Protective Equipment (PPE) and training.
GRI 404: Training and education 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 63 to 66 and its components approach 103-3: Evaluation of the 63 to 66 management approach 5, 8 404-1: Average hours of training per 66 year per employee
404-3: Percentage of employees receiving regular performance and 66 career development reviews
MRV | 2018 SUSTAINABILITY REPORT 112 Material Standard Page Omission UNGC SDG topics
GRI 405: Diversity and equal opportunity 2016
103-1: Explanation of the material 99 to 103 topic and its boundary
103-2: The management approach MRV does not maintain and its components diversity policy, but carries out several actions on the subject, which is responsible for the Human GRI 103: Development area. In Management relation to the quotas 5, 8 approach established by the Ministry 103-3: Evaluation of the of Labor and Employment 6 management approach (MTE), the company is committed to meet 25% of the requirement by March 2019, 25% by September 2019 and 50% by September 2020.
405-1: Diversity of governance bodies 33, 58, 60 and 61 and employees 5, 8, 16 405-2: Ratio of basic salary and 63 remuneration of women to men
GRI 406: Non-Discrimination 2016
103-1: Explanation of the material 99 to 103 topic and its boundary
103-2: The management approach There is no external and its components audit or feedback from GRI 103: stakeholders on the topic, Management nor on related goals. approach However, awareness actions are developed, 103-3: Evaluation of the 1, 2, 6 5, 8 management approach such as texts on the intranet and in the works. The complaint mechanism is the confidential channel.
During the year, MRV 406-1: Incidents of discrimination and recorded no cases of corrective actions taken discrimination in its operations.
MRV | 2018 SUSTAINABILITY REPORT 113 Material Standard Page Omission UNGC SDG topics
GRI 407: Freedom of association and collective bargaining 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 62, 84 and 85 1, 3 and its components approach 103-3: Evaluation of the 62, 84 and 85 8 management approach
407-1: Operations and suppliers in which the right to freedom of 62, 84 and 85 1, 2, 3 association and collective bargaining may be at risk
GRI 409: Forced or compulsory labor 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 62 and 63 and its components approach 103-3: Evaluation of the 62 and 63 management approach
The selection of suppliers follows strict legal criteria, such as prohibition of discriminatory practices, slave or child labor. Another determination foresees that own employees 4, 5 8 and outsourced workers have the same working conditions, including food, 409-1: Operations and suppliers at accommodation and significant risk for incidents of forced or careful health and safety compulsory labor management. In case of noncompliance with the law, the contracts provide for penalties that include the termination of the bond. In 2018, no human rights violations or negative occurrences in relation to labor practices were recorded.
MRV | 2018 SUSTAINABILITY REPORT 114 Material Standard Page Omission UNGC SDG topics
GRI 413: Local communities 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 76 and 77 1, 2 11 and its components approach 103-3: Evaluation of the 76 and 77 management approach
413-1: Operations with local community engagement, impact assessments, and 77 development programs 1, 2 11 413-2: Operations with significant actual and potential negative impacts 76 and 77 on local communities
GRI 414: Supplier social assessment 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 82 to 86 and its components approach 1, 2 8 103-3: Evaluation of the 82 to 86 management approach
414-1: New suppliers that were 85 screened using social criteria
MRV | 2018 SUSTAINABILITY REPORT 115 Material Standard Page Omission UNGC SDG topics
GRI 415: Public policy 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 27 to 30 and 32 and its components approach 103-3: Evaluation of the 27 to 30 and 32 management approach
Under the terms of the Donation and Sponsorship Policy, the MRV Group does not make donations to political parties, candidates for elective office, 10 16 campaign committees or coalitions with individuals or companies the Code of 415-1: Political contributions Conduct and the electoral legislation in force. The company respects the participation of employees in political activities as long as they are always personal, outside working hours and in compliance with the guidelines of the Code of Conduct.
GRI 416: Customer health and safety 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 52, 72 to 77 and 85 and its components approach 103-3: Evaluation of the 52, 72 to 77 and 85 management approach
416-1: Assessment of the health 16 and safety impacts of product and 74, 76 and 77 service categories
In 2018, MRV did not record any case of non- 416-2: Incidents of non-compliance compliance with regard concerning the health and safety to health, safety and the impacts of products and services impacts of products and services on customers.
MRV | 2018 SUSTAINABILITY REPORT 116 Material Standard Page Omission UNGC SDG topics
GRI 417: Marketing and labeling 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 16, 76 and 82 and its components approach 103-3: Evaluation of the 16, 76 and 82 management approach
Until December 2018, MRV and its subsidiaries were part of civil lawsuits related to non-compliance cases 10 16 417-2: Incidents of non-compliance related to information and concerning product and service labeling of products and information and labeling services. Most of these actions were related to construction delays and contract termination.
During the year, MRV 417-3: Incidents of non- recorded no cases of compliance concerning marketing non-compliance related to communications marketing communications.
GRI 418: Customer privacy 2016
103-1: Explanation of the material 99 to 103 topic and its boundary
103-2: The management approach MRV does not have a widely and its components disclosed policy on customer data privacy, but it does have two specific policies, respectively exposed in GRI 103: its institutional site in the Management Customer Relationship approach Portal. They present how 103-3: Evaluation of the customer data is collected management approach and manipulated and how it 16 is handled do not establish processes in which the customer may request the interruption of such use for any purpose.
During the year, there were 418-1: Substantiated complaints no proven complaints concerning breaches of customer regarding breaches privacy and losses of customer data of privacy and loss of customer data.
MRV | 2018 SUSTAINABILITY REPORT 117 Material Standard Page Omission UNGC SDG topics
GRI 419: Socioeconomic compliance 2016
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 15, 16 and 19 and its components approach 103-3: Evaluation of the 16 15, 16 and 19 management approach
419-1: Non-compliance with laws and regulations in the social and 16 economic area
Sector disclosure
Sector suplement – Construction
Water
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 44, 45 and 48 and its components approach 7, 8, 9 6, 9, 11, 12 103-3: Evaluation of the 44, 45 and 48 management approach
CRE2: Building water intensity 44
Occupational health and safety
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 68 and its components approach 103-3: Evaluation of the 2, 3, 4, 68 3, 8 management approach 5, 6
CRE6: Percentage of the organization operating in verified compliance with 68 an internationally recognized health and safety management system
MRV | 2018 SUSTAINABILITY REPORT 118 Material Standard Page Omission UNGC SDG topics
Marketing and labeling
103-1: Explanation of the material 99 to 103 topic and its boundary GRI 103: 103-2: The management approach Management 48 and its components approach 103-3: Evaluation of the 48 management approach 11, 12
CRE8: Type and number of sustainability certification, rating and labeling schemes for new 48 construction management, occupation and redevelopment
MRV | 2018 SUSTAINABILITY REPORT 119 Preparation
Coordination:
Simone Maia Caetano – MRV Communication Department
Support:
Thais Morais – Sustainability Department
GRI consulting, materiality review, graphic design, layout, content and text review:
TheMediaGroup
Pictures:
Acervo MRV/Shutterstock
MRV | 2018 SUSTAINABILITY REPORT 120