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SOCIAL AND ENVIRONMENTAL PERFORMANCE
Summary Summary .....................................................................................................................................................1 Index of Tables ............................................................................................................................................2 Index of Figures ...........................................................................................................................................3 Socio and Environmental Performance .......................................................................................................4
Business with Social and Environmental Emphasis ................................................................................5 Eco-Efficiency ..........................................................................................................................................7 Relationships with Staff............................................................................................................................9 Recognition of the Investor Market ....................................................................................................... 12
Index of Tables Table 1. Sustainable Regional Development (DRS) ...................................................................................5 Table 2. Microcredit Operations ..................................................................................................................5 Table 3. Credit with Socio-environmental Responsibility (RSA) - Other Programs ...................................6 Table 4. Investment Funds with Socio-environmental Responsibility (RSA) Criteria .................................6 Table 5. Use of Water .................................................................................................................................7 Table 6. Use of Paper .................................................................................................................................7 Table 7. Growth in the Number of Scholarships Granted ........................................................................ 10 Table 8. Employee Training - 12-month Flow .......................................................................................... 11 Table 9. Quarterly Average Expense per Employee (Income Statement with Reallocations) ................ 11 Table 10. Expenses with Profit Sharing ................................................................................................... 11 Table 11. Employees Turnover ................................................................................................................ 11 Table 12. Market Share in Stock Indexes in the Brazilian Market - % ..................................................... 12
Index of Figures Figure 1. Pronaf/Proger Rural Portfolio (R$ million) ...................................................................................6 Figure 2. Automated Transactions without the Use of Paper .....................................................................8 Figure 3. Use of Toner ................................................................................................................................8 Figure 4. Staff Members According to Age Groups ....................................................................................9 Figure 5. Length of Service at the Bank .....................................................................................................9 Figure 6. Breakdown of the Staff of Employees by Educational Level .................................................... 10
4 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
Socio and Environmental Performance
Banco do Brasil has maintained the pioneer initiative among Brazilian banks of disclosing information about its socio-environmental performance. In this chapter, are presented the historical series and analyses that allow the reader to understand the advances and efforts undertaken in the quest to make sustainability increasingly present in the company's strategies and policies.
The decision about the quarterly disclosure of this information is based on the commitment to the creation of social and environmental values, materialized in Agenda 21.
RSA practices selected to form a part of this report were picked out based on their relevance to the Company's business, on the tangible return to shareholders, and on market research with pension funds and specialists on the subject.
5 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
Business with Social and Environmental Emphasis
Banco do Brasil offers environmentally and socially responsible products and services and designs business approaches intended to foster the sustainable development of the Brazilian regions in which operates.
Sustainable Regional Development - DRS
Sustainable Regional Development (DRS) is a business strategy through which the Banco do Brasil seeks to drive sustainable development, by mobilizing the agents of economic, social, and political activities in order to support productive activities that are economically feasible, socially fair, and environmentally correct.
The table below shows the result of the Sustainable Regional Development strategy for 4Q11:
Table 1. Sustainable Regional Development (DRS)
4Q10 3Q11 4Q11
DRS - Transactions Concluded (R$ millions) 13,299 20,333 24,052
Business Plans in implementation 3,820 3,979 4,029
DRS Beneficiaries 1,167,997 1,408,510 1,555,345
Bank Accounts opened in DRS assisted communities¹ 260,478 287,432 287,432
¹ Accrued Position. Monitoring begun as of 2008.
Microcredit
Microcredit consists in low volume loan transactions, normally aimed at low-income groups that do not have access to conventional credit facilities. Law 10735/03 regulates the concession of loans to the low income population and refers to the allocation of funds corresponding to 2% of the demand deposits obtained by the financial institutions for microcredit operations, at a rate of up to 2% per month.
The table below evidences microcredit transactions in the quarter:
Table 2. Microcredit Operations
4Q10 3Q11 4Q11
Microcredit - Portfolio (R$ thousand) 1,123,351 895,623 847,855
Loans in Period - (R$ thousand) 180,541 23,134 89,647
Number of Agreements in Portfolio 1,197,724 902,277 835,268
Family Agriculture - Pronaf
Banco do Brasil is the country's largest lender to family farming. The Pronaf enables BB to prospect new clients, generate new income and seek new business based on the increase in the loyalty of these clients
The graph below shows the Pronaf portfolio in the quarter:
6 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
18,88019,998
20,763
22,08422,864
23,90424,995
27,200
Mar/10 Jun/10 Sep/10 Dec/10 Mar/11 Jun/11 Sep/11 Dec/11
Figure 1. Pronaf/Proger Rural Portfolio (R$ million)
Credit with Socio-environmental Responsibility (RSA) - Other Programs
In addition to the programs already described, Banco do Brasil supports the organic foodstuffs activity (BB Produção Orgânica) and forest production (BB Florestal).
Table 3. Credit with Socio-environmental Responsibility (RSA) - Other Programs
R$ million 4Q10 3Q11 4Q11
BB Florestal 806.8 1,914.0 2,083.5
BB Produção Orgânica 8.4 23.1 18.1
TOTAL 815.2 1,937.0 2,101.6
Other Business with Social and Environmental Attributes
Banco do Brasil offers its customers alternatives of investment funds that adopt RSA criteria. Emphasis for the portfolio of BB Ações ISE which is comprised of companies form the theoretical portfolio of Business Sustainability Index - ISE of BM&FBovespa. BB Referenciado DI Social 50 allocates 50% of its management fees, through Fundação Banco do Brasil, to social programs. The new BB Multi Balanceado transfers 20% of the management fee to the Água Brasil program, geared towards the preservation of Brazilian watersheds.
Table 4. Investment Funds with Socio-environmental Responsibility (RSA) Criteria
R$ million 4Q10 3Q11 4Q11
BB Ações ISE 23.2 20.2 19.2
BB DI Social 50 38.4 52.3 51.8
BB Multi Balanceado¹ - 2.5 2.8
Total 61.6 75.1 73.8
¹ Activities started in March 2011
7 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
Eco-Efficiency
The objective of eco-efficiency is to produce more using fewer natural resources and less energy in the productive process, reducing waste and production and operation costs.
Annual Use of Water in the Main Buildings
The ratio below refers to the use of water in Banco do Brasil's main buildings. Main buildings I, II, and III located in Brasilia concentrate a major part of Banco do Brasil's executive officers, in addition to support operating bodies and one branch.
Table 5. Use of Water
4Q10 3Q11 4Q11
Use of Water in the Main Building (m³) 120,009 138,270 148,810
Employees in Main Buildings I, II, and III (average) 8,336 10,151 10,004
Use of Water (m³) / Employees¹ 14.4 13.6 14.9
¹ Data accrued over 12 months
White Paper - Annual Use
Banco do Brasil has also put in place a number of steps to reduce the use of paper. Corporate systems are adapted to print preferably on both sides, employee awareness campaigns are created, and customers are encouraged more and more to employ automated channels not involving the use of paper.
Paper consumption was down in the quarterly comparison and in 12 months, even with the increase in the client base.
Table 6. Use of Paper
4Q10 3Q11 4Q11
Paper Consumption (tons) 3,548 3,477 3,412
Checking Account Base (average) 35,442,533 35,657,927 35,704,794
Consumption per Customer (gr)¹ 100.1 97.5 95.6
¹ Data accrued over 12 months
8 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
Automated Transactions without the use of paper
42.4% 41.8% 40.0% 42.0% 42.7% 42.8% 43.1%42.4%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
Automated Transactions without use of paper
Figure 2. Automated Transactions without the Use of Paper
Use of Toner
The use of toner is another potential creator of residues related to printing documents. Banco do Brasil uses 100% of reconditioned cartridges. During the quarter, the use of toner had a decrease.
23,44924,856
30,471
26,62424,490
27,376 26,82725,108
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
Toner Consumption
Figure 3. Use of Toner
9 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
Relationships with Staff
This section contains the main actions regarding business sustainability, in connection with investments in staff by Banco do Brasil.
Characteristics of Staff
Banco do Brasil invests in the creation and strengthening of a bond with its collaborators, so that its professionals feel encouraged to build a career at the institution.
The graphs below show the staff stratification by age:
7.5%
36.5%
26.9%
29.1%
4Q10
7.3%
37.6%
26.0%
29.2%
3Q11
6.8%
37.7%
26.0%
29.5%
4Q11
Up to 25 years old from 26 to 35 years old from 36 to 45 years old Over 45 years old
Figure 4. Staff Members According to Age Groups
46.5%
23.2%
2.4%
3.7%
10.7%
13.4%
4Q10
44.9%
21.1%
8.4%
3.6%
9.4%
12.7%
3Q11
45.0%
20.7%
9.0%
3.5%
9.2%
12.5%
4Q11
Up to 5 years From 6 to 10 years From 11 to 15 years
From 16 to 20 years From 21 to 25 years Over 25 years
Figure 5. Length of Service at the Bank
10 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
Education and Professional Development
Banco do Brasil develops countless education and professional development actions. These actions include presence-based and self-instructional courses as well as the establishment of partnerships to provide distance education solutions and the concession of scholarships (both academic and for languages).
Table below displays the growth in the number of scholarships granted:
Table 7. Growth in the Number of Scholarships Granted
4Q10 3Q11 4Q11
Undergraduate Scholarships 3,967 3,037 3,855
MBAs, Masters' and Doctors' Scholarships 5,356 5,317 5,978
Language Scholarships 238 368 306
Total Scholarships Granted 9,561 8,722 10,139
Number of Employees in Period 109,026 113,594 113,810
Undergraduate Scholarships per Employee 3.6% 2.7% 3.4%
MBAs, Masters' and Doctors' Scholarships per Employee 4.9% 4.7% 5.3%
Language Scholarships per Employee 0.2% 0.3% 0.3%
Total Scholarships per Employee 8.8% 7.7% 8.9%
The charts below display the composition of the staff by level of education. Special emphasis on the employees' evolution with specialization, masters and doctoral degrees.
0.5%
28.3%48.7%
22.5%
4Q10
0.4%
27.2% 48.8%
23.6%
3Q11
0.4%
26.7% 48.2%
24.7%
4Q11
Elementary School High School Bachelor's Degree Specialization, Master's or Doctorate
Figure 6. Breakdown of the Staff of Employees by Educational Level
In addition to the formal education of employees, Banco do Brasil invests in other types of training. A significant number of these courses is developed by the Corporate University of Banco do Brasil.
The table below evidences the quantity of hours of training of the employees in presence-based and self-instructional courses and the quantity of employees with Anbima certification.
11 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
Table 8. Employee Training - 12-month Flow
4Q10 3Q11 4Q11
Hours of Training (thousand)¹ 12,296 13,187 12,665
Average number of employees 106,912 111,689 112,885
Hours of training by employees¹ 115 118 112
Employees with Anbid Certification – CPA 10 47,857 48,805 48,097
Employees with Anbid Certification – CPA 20 13,583 15,660 16,039
¹ Indicator calculated based on data accrued over 12 months
Generation of Value to the Employees
Personnel Expenses in their diverse aspects comprise an important index of value added by the Bank to staff members. The table below shows the progress of these expenses in absolute terms and in average sums per employee.
Table 9. Quarterly Average Expense per Employee (Income Statement with Reallocations)
4Q10 3Q11 4Q11
Personnel expenses (reallocated) – R$ million 3,270 3,481 3,954
Average number of employees¹ 106,912 111,689 112,885
Quarterly Average Expense per Employee – R$ 30,586.99 31,163.84 35,026.27
¹ Headcount does not include trainees.
As a manner of providing improved financial returns to collaborators and at the same time confirming the commitment by everybody in the organization with the generation of consistent profits, Banco do Brasil has made efforts to constantly enhance its Employee Profit Sharing (PLR).
Table 10. Expenses with Profit Sharing
4Q10 3Q11 4Q11
Profit Distribution provisioned in the quarter – R$ million¹ 510 369 395
Average number of employees² 106,912 111,689 112,885
Average PLR per Employee – R$ 4,766.32 3,304.16 3,499.30
¹ Accrued profit sharing considered only for BB Multiple Bank ² The number of employees does not include interns
Employees Turnover
The turnover rate, which measures the proportion of dismissals in relation to the mean headcount in the period, presented a slight increase in relation to the previous quarter.
Table 11. Employees Turnover
4Q10 3Q11 4Q11
Employee Turnover Rate¹ 1.00 0.90 2.03
No. Employees in Prior Quarter 108,459 112,913 113,594
No. Employees in Quarter 109,026 113,594 113,810
Terminations in Period² 1,082 1,014 2,313
¹ Proportion of releases as compared to the average number of employees in the period ² The concept of dismissals includes discharges, retirements, early retirements, deaths and leaves at the request of the employee
12 - Banco do Brasil – Socio and Environmental Performance 4th Quarter/2011
Recognition of the Investor Market
Besides having a representative share in the Ibovespa, BB participates, among other, in the following indices in the São Paulo Stock Exchange: Differentiated Tag Along Share Index - ITAG; Differentiated Corporate Governance Share Index - IGC; The Corporate Governance Trade Index - IGCT, the Corporate Sustainability Index - ISE and the Efficient Carbon Index - ICO2
The objective of ITAG is to measure the performance of instruments of companies that offer better terms to minority shareholders, in the event of sale of control. The portfolio is composed of shares that grant tag along rights in excess of 80% to minority common shareholders. Banco do Brasil grants 100% of tag along to minority shareholders.
IGC's purpose is to measure the behavior of companies shares with good levels of corporate governance and those listed in the Novo Mercado or in corporate governance levels 1 and 2 in BM&FBOVESPA. The Bank is also a member of the IGCT composed of shares of companies with good levels of corporate governance and a high level of liquidity in the financial market.
The ISE groups the companies with best corporate governance and socio-environmental responsibility practices of BM&FBOVESPA, and is renewed annually by means of the application of questionnaires and document evaluation. Banco do Brasil has been part of the Index since its creation, in the year 2005.
Banco do Brasil is also a member of the ICO2 index, composed of shares of companies that adopt transparent practices in relation to their greenhouse gas emissions.
Table 12. Market Share in Stock Indexes in the Brazilian Market - %
%
Jan/11 -
Apr/11
May/11 -
Aug/11
Sep/11 -
Dec/11
Jan/12 -
Apr/12
Carbon Efficient Index - ICO2 4.869 4.754 5.236 4.604
Corporate Governance Trade Index - IGCT 3.355 3.126 3.327 2.835
Special Corporate Governance Stock Index - IGC 4.461 4.236 4.396 3.769
Corporate Sustainability Index - ISE 1.676 1.636 1.850 1.438
Special Tag Along Stock Index - ITAG 4.265 4.032 4.271 3.577
Source: BM&FBovespa