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One of the leaders in national energy transition, the company highlights investments in decarbonization and digitization aligned with ESG targets

Neoenergia released on Friday (17) its most current Annual Sustainability Report, document that presents the company's consolidated information for the year 2022, in the dimensions ESG+F (environmental, social, governance and financial, in the translation of English). The company expanded Capex by 6% and invested R$ 9.9 billion in the year in distribution, transmission and clean and affordable energy networks, in addition to the development of intelligent energy solutions.

In 2022, Neoenergia strengthened its commitment to the ESG+F aspects by setting 16 goals for 2025 and 2030 that reinforce the company's long-term ambition.  "Sustainability is the basis of our business model. We are anticipating the future and profound transformations of the electricity sector, expanding investments in renewable energy generation, in the development of intelligent energy solutions, in the quality of service and in access to energy", says Eduardo Capelastegui, CEO of Neoenergia.

Environmental Aspect

The group signed new green operations in 2022 and certified financing lines signed with BNDES for transmission projects. Thus, loans classified as sustainable finance accumulated a total of R$ 10.2 billion at the end of 2022, compared to R$ 6.7 billion at the end of the previous year, in 19 operations since 2019, when it was the first company in the Brazilian electricity sector to issue green debentures.

The differential characteristic of these financings is the commitment to allocate the resources obtained to invest in environmentally sustainable and socially responsible projects, especially in renewable energies; in the expansion and digitization of electricity transmission and distribution networks; research on new, more efficient technologies; or in smart mobility projects.

The company has committed to reducing the intensity of emissions from power generation (scope 1). In line with this goal, Neoenergia maintained the growth of the clean energy portfolio. In 2022, it started the operation of its first solar park for centralized generation, Neoenergia Luzia (149 MWp), in Paraíba, which stands out for pioneering the process of association with the Neoenergia Chafariz wind complex (471 MW), located in the same region, optimizing transmission costs. The Neoenergia Oitis wind complex (567 MW), located between the states of Piauí and Bahia, ended the year with 70% of the capacity in operation (commercial + tests).

In addition to the development of clean energy projects, Neoenergia continues to work in strategic partnerships to enable new technologies with the signing of Memoranda of Understanding for offshore wind and green hydrogen projects.  And has actively participated in the construction of the regulation of these energy solutions in the country.

In distribution, the company continues to invest in the expansion, reliability and intelligence of networks, focusing on the experience and increased satisfaction of the 16 million customers. In 2022, the company closed the year with 75% of the scanned high and medium voltage networks, which provides better efficiency and reliability of the services provided in addition to creating opportunities for new business models with efficiency gains.

In parallel, it continues to contribute to the decarbonization of the economy with the expansion of the fleet of electrified light vehicles, which goes from 5% of the fleet to 8% with the commitment to reach 50% in 2030. In the Fernando de Noronha Archipelago, it is building two more solar plants and 12 ecostations, in addition to applying 18 new electric vehicles to be used in field activities.

Social Aspect

" We remain committed to the socioeconomic development of the places where we operate, contributing to the quality of life of society, respecting human rights and the environment," says Solange Ribeiro, Vice President of Regulation, Institutional and Sustainability at Neoenergia.

Gender equity is a priority for the company. The company is committed to expanding the participation of women in various positions. The first results after the publication of the ESG targets last year point to advances such as the achievement of 29% of women in leadership positions, especially the appointment of the first woman to chair one of the company's distributors, Fabiana Lopes, who took over Neoenergia Cosern (RN). Neoenergia was also the first exclusive sponsor of the women's soccer team and has expanded the incentive to the development of women's sport in Brazil, with the support of the Brazilian under-23 champion of road cycling and time trial, Ana Vitória Magalhães, Tota.

There was a 30.2% increase in the number of women electricians in the staff, the result of the School of Electricians, which offers free training in the areas of operation of concessionaires — Neoenergia Coelba (BA), Neoenergia Pernambuco (PE), Neoenergia Elektro (SP and MS), Neoenergia Brasília (DF) and Neoenergia Cosern (RN). The expansion of the presence of women electricians represents a great challenge for the sector and was only possible thanks to the work of our School of Electricians.

The safety of the population and employees remains a priority in the company's activities. In addition to several actions of safe behavior culture, the Safe Community Program was launched in 2022, an educational campaign that has reached more than 200,000 people in the concession areas. Actions such as the Safe Community Program and the massive engagement of leaders in the accident prevention service, associated with other complementary and integrated initiatives, have significantly accelerated the evolution of Neoenergia's good results in the goals outlined and the company will continue to be committed to its efforts for the continuous improvement and consolidation of such results.

In the face of the value chain, the development of suppliers in the esg itis is also part of the commitments signed. The company aims to reach at least 80% of suppliers classified as sustainable by 2025 and more than 85% by 2030. In 2022, the company reached 75%.

Governance Aspect

The company operates in accordance with the standards and principles of the Governance and Sustainability System, and maintains the commitment to establish the business strategy and perform its activities based on decisions in accordance with Brazilian laws, with the best market practices, with its Code of Ethics and its internal standards. The holding company underwent a recertification audit by ISO 37001, which occurs every three years.

Neoenergia's commitment to The ESG aspects was recognized in indexes and ratings throughout the year. The company remains, for the third consecutive year, in the portfolio of the Corporate Sustainability Index - ISE B3 (18th portfolio that is in force in 2023). In addition, in the Notebooks of the CDP (Carbon Disclosure Project) obtained the score A- in the theme Climate and B in the theme Water Safety, placing itself in a leading position in front of its peers. The company also includes the FTSE4GOOD index, an instrument tied to the London Stock Exchange, and The Sustainability Yearbook, the yearbook prepared by S&P Global that draws up a global ranking of the companies with the best ESG performance. Both for the third year in a row. He also won awards such as the Transparency Trophy.

Financial Aspects

The company expanded its business profitably during the year, advancing the portfolio optimization plan from the exchange of assets with Eletrobras. Neoenergia Brasília, acquired in March 2021, achieved record EBITDA of R$ 350 million and improved operating rates.

In all, the group ended 2022 with EBITDA of R$ 11.6 billion, 18% higher than in 2021, and net income of R$ 4.7 billion, an increase of 20% over the previous year. The company maintained the discipline of costs and improved by about 100 bps the expense efficiency indicator (Opex / Gross Margin), reflecting the expansion of the business portfolio with profitability gain.

Neoenergia's Annual Sustainability Report was prepared based on the standards of the Global Reporting Initiative (GRI), in addition to following the Manual for the Preparation of socio-environmental and economic and financial reports of the National Electric Energy Agency (ANEEL). Since 2020, it also considers the guidelines of the International Integrated Reporting Council (IIRC), and the Standards of the Sustainability Accounting Standards Board (SASB) for the electricity sector. The document also meets commitments to the Global Compact and the Sustainable Development Goals (SDGs) of the United Nations (UN).