PEOPLE AND INNOVATION

TRUST IN THE FUTURE AND IN THE
SUSTAINABLE GROWTH

About the Report and Materiality

GRI 102-3, 102-50, 102-51, 102-52, 102-53, 102-54, 102-56

Our Sustainability Report is in its 15th consecutive year of publication and provides information on Algar Telecom and its subsidiaries. Through this document, for the period from January 1 to December 31, 2020, we seek to annually demonstrate our best practices in financial and ESG (Environmental, Social and Governance) terms. That way, we want to introduce to our stakeholders our strategy for long-term value creation and our commitment to transparency and accountability to society.

We use the Global Reporting Initiative (GRI) standards, “Essential” reporting option, which imparts relevance, transparency and comparability to the information. We also use certain Integrated Reporting (IR) proposed by the International Integrated Reporting Council (IIRC), with a focus on the essence of and connection between performance and short, medium and long-term value creation, considering our financial, intellectual, human, manufactured, natural, social and relationship capitals. Our assessment also took into consideration the materiality map of the Sustainability Accounting Standards Board (SASB) for financial matters, which is considered more assertive regarding stakeholder requirements in the capital market.

Throughout the report, we show correlations between actions taken by Algar Telecom and the Sustainable Development Goals (SDGs) indicated in the chapter on the topic. Detailed explanations are provided in the chapter on our commitment to external initiatives, where we also show the evidence.

The financial information follows the International Financial Reporting Standards (IFRS) and was audited by Deloitte. Social and environment performance indicators were measured and validated internally and have not been subject to external checks.

The report is available on Algar Telecom’s website. We encourage you to send us suggestions, criticisms and comments on the contents and format of the report.

For more information on this publication, please contact the Company’s Investor Relations department:

ri@algartelecom.com.br
(34) 3256-2978
Rua José Alves Garcia, 415 – Bairro Brasil – Uberlândia-MG (Algar Telecom headquarters)

Definition of Materiality

GRI 103-1, 102-40, 102-42, 102-43, 102-44, 102-46, 102-47, 102-48, 102-49

The topics covered by this report were chosen by a process of reviewing our materiality matrix. With support of external outside advisory firm, we conducted a study underpinned by a market analysis that considered reports from the Company’s peers on the national territory, assessing the following issues in the telecommunications industry:

IssueDescription
Access to communicationAssessing the Company’s efforts to seize growth opportunities for communication products and services in developing countries and in underserved markets (rural areas and the elderly).
Privacy and information securityAssessing potential regulatory risks, increases in spending or reputational risks due to breach of data or controversial use of personal data.
Corporate governanceAssessing the extent of the Company’s corporate governance practices that can pose risks to investors.
Work managementAssessing the complexity of the workforce (size, intensity and operation regions), the relationship between management and employees, work protections, and engagement efforts.
Corruption and instabilityAssessing potential regulatory risks or loss of market access due to corruption scandals or political and social instability.
Carbon emissionsAssessing whether the Company can take on price increases due to carbon pricing or regulations.

From the identification of relevant issues in the industry, both globally and in the Company’s own view, we selected potential priority issues and conducted an online survey with internal and external stakeholders in order to determine the final priority issues. Internal stakeholders (executive board) surveyed totaled 28, and external 17, comprising customers, suppliers, franchisees, partners and sustainability experts.

The survey results led us to suggest expanding the list of material issues, and occupational health and safety was chief among themes that gained relevance in 2020. For ESG issues, the environment dimension continues to be perceived as less relevant, especially among Algar Telecom executives. For a balanced agenda, we added climate governance (emissions, energy and waste) to the topics. We also incorporated the energy management topic into Climate Governance, as Algar Telecom has a relevant management of the issue, which is strengthened by the benchmarks.


Material Issues

2019 X 2020 Comparison
2019 Issues2020 Issues
Customer satisfactionCustomer satisfaction and experience
Customer privacyCustomer privacy and cybersecurity
Economic performanceEconomic performance
Compliance with laws and regulationsCompliance with laws and regulations
Corporate governanceCorporate governance and compliance
-Employee health and safety
Network reliabilityNetwork reliability and system availability
InnovationInnovation
Energy consumptionClimate governance (emissions, energy and waste)