Ethics, Transparency and Good Governance

Neoenergia has as one of its values the adoption of Ethical Principles, guiding its conduct and that of its employees based on the integrity and compliance with the Brazilian legislation and the best business practices.

We believe that a sustainable society is built only when there is trust, integrity and respect to the laws. Ethics is part of the decisions of the Neoenergia Group companies, guiding the development of our business and our relationships with clients, shareholders, executives, employees, suppliers, service providers, the market and public entities.

To achieve this purpose, an Integrity Program was implemented in compliance with Brazilian anti-corruption legislation, coordinated by the company’s Compliance Superintendence. The area, in addition to being responsible for planning, designing, executing, maintaining, and evaluating the program, drafts and revises codes of conduct, integrity policies, and their related procedures, and works to identify, assess, and mitigate risks of non-compliance. Thus, it seeks to guarantee the adherence of Neoenergia companies to the principles of legality and the fight against corruption.

The main actions of the group to promote ethics and integrity are: Presidency commitment, code of conduct, reporting channel, anti-corruption regulations, transparency report of the compliance system, tax transparency report, employee training and awareness and the participation in the corporate movement for integrity and transparency.

Neoenergia‘s Governance and Sustainability System brings together the rules and principles that govern the group‘s organization, operation and relations. This systemensures compliance with the bylaws that bind its shareholders and, in particular, the corporate purpose and social interest of Neoenergia, meeting the highest standards of Corporate Governance of Brazilian companies.

Neoenergia’s Purpose is founded on continuing to build, every day and through collaboration, a healthier and more accessible electricity model. It is grounded in the Bylaws, which, once approved by the Shareholders’ General Meeting, bring together and endorse all the key elements of the Governance and Sustainability System. The development of this system is the responsibility of the Board of Directors, without prejudice to its other duties and powers.

The Governance and Sustainability System is subject to a continuous review process aimed at incorporating best practices on an ongoing basis.

Neoenergia’s corporate and governance structure, as well as its Business Model, are based on a decentralized framework. As a holding company that owns interests in other companies operating in the energy sector, Neoenergia is responsible for the strategy, oversight, and control of the group as a whole, while the management of each group company remains under the responsibility of its respective governing bodies.

Accordingly, one of Neoenergia’s main functions is to undertake organizational and strategic coordination activities with respect to the companies within the group, as well as to centralize the provision of common services to the operating companies, always in accordance with the Shareholders’ Agreement and applicable legislation.

The governance structure consists on the Board of Directors, Fiscal Council and Executive Board, with the advice of Committees, which contribute to decision-making. The Shareholders’ Meeting is the sovereign body with powers to decide on all business relating to the group’s business purpose, and to pass the resolutions that it thinks fit for the protection and development of the group.

The Company is permanently committed to leadership in the implementation of the most demanding ethical and regulatory compliance practices.

In particular, Neoenergia is committed to the continuous monitoring and sanctioning of fraudulent acts and conduct, the implementation and development of effective communication and awareness mechanisms for all employees, and the promotion of a corporate culture based on ethics and integrity. To this end, the Company maintains effective and up-to-date policies and programs for crime prevention and anti-fraud, which apply across all levels of the organization.

As an integral part of its Governance practices, the Neoenergia Group has an Internal Controls model that ensures the reliability of the generation and disclosure of both financial and non-financial information. This model is supported by a dedicated tool and is based on two main pillars: (i) risk identification and the design and execution of controls, and (ii) information certification. Financial certification is carried out semiannually so that Executives can attest that the financial information under their responsibility is reliable and that the internal controls supporting such information have been properly executed. Regarding non-financial certification, executives annually attest to the existing control environment designed to ensure the quality and integrity of the indicators reported in the Sustainability Report.