Introduction Message from Management Organizational Profile The Company Awards and Recognition Governance...

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2 Index Introduction... 3 Message from Management... 5 Organizational Profile... 8 The Company... 9 Awards and Recognition Governance High Standards Consolidated Practices Talent Development Training for every challenge Access to corporate education Investing in the best Socio-Environmental Management Green Company Control of greenhouse gas emissions Other Initiatives Economic Performance Profitable expansion Financial Results GRI Content About the Report GRI Index Acknowledgements

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4 We are pleased to present the first sustainability report for Lojas Americanas, S.A., which was developed in accordance with internationally-recognized disclosure guidelines developed by the Global Reporting Initiative (GRI), a nongovernmental organization headquartered in Amsterdam, The Netherlands. The GRI s mission is to develop and globally disseminate guidelines for the preparation of sustainability reports, which are voluntarily adopted by large companies around the world. This publication presents the economic, social and environmental dimensions of our results, expanding our channels of dialogue with all stakeholders and focusing on the strengthening of sustainability practices in Lojas Americanas business units. 4

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6 Sustainability: Engaging all areas of the company is our goal For the past 84 years, Lojas Americanas has been a part of Brazilians lives. Bringing more convenience to our customers has always been our main goal. Much has changed over the decades and the company continues to innovate to meet customers needs, anytime and anywhere, beating their expectations and offering them the best shopping experience. The results achieved in 2012 demonstrate that Lojas Americanas has managed growth with profitability. We have achieved major advances in our multi-channel strategy. Developments in recent years are in line with the performance of our key operating indicators. In 2007, we created the Green Company with the aim of preparing our organization for sustainable development, as well as engaging all areas of the Company in pursuit of sustainability. As part of these efforts, the Company maintains a Sustainability Committee, a multi-disciplinary body that is active in the social, environmental and economic spheres, thereby improving the dialogue with our stakeholders shareholders, customers, suppliers, employees and society. Therefore, sustainability is part of our group s operational strategy, perfectly aligned with our vision of being a socially and environmentally responsible company. In 2010, the Sustainability Committee was formalized by the Board of Directors, raising its prominence within the Company. The following year, environmental responsibilities were included in the formal job descriptions of all positions in the organization. In recent years we have established important partnerships with the Brazilian GHG Protocol Program and the Getulio Vargas Foundation, and we have received training in the emissions accounting methodology developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). This has given us the means to measure greenhouse gas emissions from all our business units and report, annually, on that inventory of greenhouse gases through the Investor Relations section of our Company s website. In preparing our emissions inventory and calculations, we used the methodology of the Brazilian GHG Protocol Program, of which we have been a member company since This methodology is the most widely used and internationally recognized by businesses and governments. Using information gathered for the preparation of our GHG emissions inventory, we also participated in the Carbon Disclosure Project (CDP), a nonprofit organization with international scope, whose goal is to create a relationship between shareholders and companies. In 2010, BOVESPA established the Carbon Efficient Index (ICO 2 ), a select group of which we have been a part since its creation. The ICO 2 consists of the shares of IBrX- 50 companies, which have adopted transparent practices with respect to greenhouse gas (GHG) emissions. The index takes into account the degree to which a Company s revenue is related to GHG emissions. 6

7 For 2013, to further strengthen our position in relation to sustainability, we are publishing the Company s first Sustainability Report. This report is based on the GRI s methodology, which is the most widely used and recognized worldwide. Throughout 2012, we continued to enhance our multi-channel structure. Our e- commerce operation, through our B2W Digital subsidiary, is complementary to our physical, retail operations, as there is low overlap between these channels. Accordingly, we view this complementarity as being our main competitive advantage within the Brazilian retail sector. We are in the final stretch of implementing our Lojas Americanas - 80 Years in 4 - Always More Brazil Expansion Plan. In 2012, we achieved growth in consolidated gross and net revenue, corresponding to 13.9% and 13.6%, respectively, compared to the previous year. For 2013, we are enthusiastically expecting the opening of our 900th store. With our entrance in Roraima, we will be present in all Brazilian states. The achievement of our goals is the result of the dedication of our associates, who are steeped in an organizational culture characterized by a results-oriented meritocracy. We believe in the potential of our team and, therefore, continue to intensify training programs. In 2012, training hours for our associates almost doubled. It is important to note that within our vision to be the best retailer in Brazil, we are engaged in efforts such that society will see ours as a socially and environmentally responsible company. THE MANAGEMENT 7

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9 The Company In the market for over 80 years, Lojas Americanas is one of Brazil s most innovative retail industry chains Founded in 1929 in Niterói, Rio de Janeiro, Lojas Americanas operates a network of department stores. Our main feature in this retail model is our guarantee of providing customers the most convenient way to shop. We closed 2012 with 729 stores, present in all regions of the country. Of these, 271 opened in the last three years, as part of the 80 Years in 4 - Always More Brazil Expansion Plan, which was rolled out in late Headquartered in Rio de Janeiro, the Company has stores in 254 cities spread across 25 states, plus the Federal District. In 2012, we opened 111 stores. In total, we have 462 traditional stores and 267 in our Express line. Each of the traditional stores has an average sales area of 1,400 square meters, daily inventory replenishment, and approximately 60,000 items. The Express model adopts a smaller-store concept with an average size of 400 square meters, just-in-time logistics, and a select assortment of approximately 15,000 items, tailored to the location and customer profile of each of these stores. Multichannel Retailer In addition to our brick and mortar stores, Lojas Americanas is the parent company of B2W Digital, an e-commerce leader in Brazil. B2W owns the following brands: Americanas.com, Submarino, Shoptime, MesaExpress.com.br, SouBarato.com.br and BLOCKBUSTER Online, B2W Viagens, Ingresso.com and Submarino Finance. Thus, we operate a multi-channel service structure, reaching our customers with a wide range of products and services through physical stores and via the Internet, telephone, catalogues, TV and kiosks. 9

10 Mission Fulfill people s dreams and satisfy their consumption needs, saving them time and money, and exceeding their expectations. Vision To be the best retailer in Brazil. For customers, who believe their best shopping option is with us For shareholders/investors, who regard us as offering them the best returns in this segment For the associates, who consider us as best option for professional development For suppliers, who consider us as their best distribution channel For society, which considers our company to be socially and ecologically responsible Values Having the best people Being a good business owner Striving for excellence in operations Focusing on customers Doing more and better every day Being obsessed with delivering results 10

11 Awards and Recognition We received the RA 1000 Seal from the Reclame Aqui (Complain Here) website and won the Contribuintes (Contributors) and Central-West Alshop Shopkeeper awards In 2012, Lojas Americanas received the RA 1000 Seal from the consumer complaints website forum, Complain Here (Reclame Aqui), for our excellent marks for response times, solutions, and customer evaluations. Of those company-related records on the site, 100% of the cases were attended to immediately and 96% were solved in a convenient manner. In addition, our Company is among Complain Here 20 Best Companies, with an 11th place ranking in their solutions index, an 18th place ranking among those businesses with which customers are most likely to do business again, and a 16th place ranking in the best overall index. Lojas Americanas was also elected the preferred chain in a survey of consumers in the state of Paraná, which was conducted by the Independent Television Group in partnership with the Brazilian Institute of Public Opinion and Statistics (IBOPE); securing, in Department Store category, the 2012 Unparalleled Prize - Preferred Chains and Regional Affinity Index. We won the Taxpayers Award, which recognizes companies that have contributed the most in taxes to the state of Ceará. Also in 2012, for the fifth consecutive year, we won the Central-West Alshop Shopkeeper Award, which saw our firm competing against more than 700 other companies, winning in the Department Stores category. The award recognizes 14 years the performance of large retailers in Brazil s shopping malls. The B2W subsidiary was champion in three, Complain Here categories for Quality Service. Submarino won in the Virtual Stores, Large Operations and Retail, and Consumer Electronics categories, while Submarino Viagens (Travel) was the winner in the Tourism and Leisure category. In turn, in the shopping websites category, Americanas.com, was voted the favorite brand in Rio de Janeiro, according to the Marca Cariocas study conducted by the newspaper O Globo. 11

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13 High standards Board of Directors defines the Company s business strategy Listed on the BM&FBovespa since 1940, Lojas Americanas S.A. has a shareholder base comprised of preferred (LAME4) shares, and common (LAME3) shares. Our Company is led by its Board of Directors and Board of Executive Officers, and supported by internal committees. The Board of Directors consists of eight members, five appointed by the controllers, one by the minority shareholders and two by the Board itself. Besides electing and removing directors, and determining the distribution of fixed compensation at the General Shareholders Meeting for its members and the officers, it is up to the Board of Directors to orient the general business of the Company, approving guidelines, policies and business objectives for all basic areas in which it is active. Currently, the Board of Executive Officers consists of ten members. According to the provisions of the Bylaws, this body can range from two (2) to twelve (12) directors, one who is designated as the Chief Executive Officer, with all being elected for a period of one year, with the right to reelection. The Board of Executive Officers is responsible for the execution of the business strategy defined by the Board of Directors, the preparation of plans and projects and the operational and financial performance of the Company. Lojas Americanas also has a Fiscal Council, consisting of three members two appointed by the controlling shareholder and one appointed by the minority shareholders. The Fiscal Council has powers and responsibilities that the law confers upon it to observe legal precepts concerning requirements, impediments, compensation, composition, installation, operation, duties and responsibilities. Specialized committees With an aim of supporting the Board of Directors and the Board of Executive Officers in decision-making, committees or working groups may be created with defined functions. At least three and not more than four members of any given committee may be members of the Board of Directors or others. Currently, Lojas Americanas has three committees. 13

14 Finance Committee Advises and assists the Board of Directors regarding all decisions involving the financial policies of the Company, ensuring that it is meeting its obligations. Human Resources and Remuneration Committee Supports decisions involving human resource policies and remuneration by the Company to ensure that members of the Board of Directors and Board of Executive Officers, and all associates, have incentives to achieve exceptional results. Another function of the Committee is to enable the correct and efficient implementation of our culture, which values constant improvement and meritocracy, as well as the attraction, securing, retention and development of the best professionals and leaders. Sustainability Committee The main responsibilities of this Committee are the establishment of sustainable practices based on the triple bottom line of sustainability (economic, environmental and social) and ensuring the involvement of the entire Company in socio-environmental issues. Members of the Board of Directors: Amaury Guilherme Bier Carlos Alberto da Veiga Sicupira Cecilia Sicupira Giusti Love Goel Miguel Gomes Pereira Sarmiento Gutierrez Paulo Alberto Lemann Roberto Moses Thompson Motta Steven Chad Lojas Americanas Board of Executive Officers Miguel Gomes Pereira Sarmiento Gutierrez, CEO Anna Christina Ramos Saicali, Officer Carlos Eduardo Rosalba Padilha, Officer Celso Alves Ferreira Louro, Officer Flávio de Almeida Serapião, Officer José Timotheo de Barros, Officer Márcio Cruz Meirelles, Officer Maria Christina Ferreira Nascimento, Officer Murilo dos Santos Corrêa, Chief Financial and Investor Relations Officer 14

15 Consolidated practices All shareholders are entitled to equal treatment in the event of a change of control of the Company, among other guarantees. 100% tag along Since 2006, we have maintained a commitment in our Bylaws to grant full (100%) tag along rights to the Company s common and preferred shares. With this, all shareholders will receive equal treatment in the event of a change of control of Lojas Americanas, which guarantees them the right to sell their shares on the same terms negotiated by the controllers. Dividends policy The Company s Bylaws, in line with prevailing laws, sets the minimum value of dividends at 25% of net income after the establishment of a 5% legal reserve. In 2012, the distribution to shareholders was R$ 79.9 million, of which R$ 50.9 million were dividends and R$ 29.0 million was interest on equity (before tax withholding), based on net income for fiscal year. Share buyback program Since 2003, the Company has had a shares repurchase program with the objective of holding them in treasury and subsequently cancelled. The current program provides for the buyback of up to 10,788,942 book-entry shares of common stock and 36,505,323 book-entry shares of preferred stock shares. Shares In addition to our preferred (LAME4) shares, which are part of the Ibovespa index, there are the Company s common shares, which are listed on the Special Tag Along Stock Index (ITAG), which comprises the stock of companies that offer the same conditions to minority shareholders in the case of a change of control. We are also included in other important indices, such as the Brazil Index 50 (IBrX-50), Carbon Efficient Index (ICO 2 ), Consumption Index (ICON), BM&FBovespa Value Index (IVBX-2), the Mid-Large Cap Index (MLCX) and MSCI-Barra. 15

16 IBRX50 - IBrX-50 is an index which measures the total return on a theoretical portfolio composed by 50 stocks selected among BM&FBOVESPA s most actively traded securities in terms of liquidity, weighted according to the outstanding shares market value. This index was designed to serve as a benchmark for investors and portfolio managers, and also to allow the launching and derivatives (futures, options on futures and options on index). IBrX-50 has the same characteristics of Brazil Index IBrX, which is composed by 100 stocks, but has the operational advantage of being more easily reproduced by the market. ICO2 - Attentive to the concerns of the world with global warming, the great challenge facing humanity in this century, BM&FBOVESPA and the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social/BNDES) have decided, in a joint initiative, to create a new market index the Carbon Efficient Index (ICO2).This index comprises the shares of companies participating in the IBrX-50 index that have agreed to join this initiative, by adopting transparent practices with respect to their greenhouse gas emissions (GHGs). The index takes into consideration in its composition, not only the free float of stocks of participating companies, but also the efficiency levels of GHG emissions of these same companies. ICON - The BM&FBOVESPA Consumption Index (ICON) was developed to provide a segmented view of the stock market by measuring the performance of the stocks issued by the companies representative of the cyclical and non-cyclical consumption sectors. Its theoretical portfolio is composed by stocks selected among BM&FBOVESPA s most actively traded securities in terms of liquidity and are weighted according to the outstanding shares market value (free float). IVBX-2 - The Valor BM&FBOVESPA Index - 2 nd Tier (IVBX-2) was jointly developed by BM&FBOVESPA and the newspaper Valor Econômico, in the aim of measuring the return on a hypothetical portfolio consisting exclusively of securities issued by companies of excellent image among investors, classified from the 11th position down, both in terms of market value and liquidity of their shares. MLCX - Created by BM&FBOVESPA, the BM&FBOVESPA Mid Large Cap Index (MLCX) and the BM&FBOVESPA Small Cap Index (SMLL) were developed to measure the performance of the companies listed in the Exchange segmenting them by market capitalization: the BM&FBOVESPA Mid Large Cap Index measures the return of a portfolio composed by the large and mid market capitalization companies, whereas the BM&FBOVESPA Small Cap Index measures the return of small capitalization companies. The component stocks are selected among the Exchange's most actively traded securities in terms of liquidity, and are weighted according to the outstanding shares' market value (free float). 16

17 MSCI - The MSCI Global Equity Indices are widely tracked global equity benchmarks and serve as the basis for over 500 exchanged traded funds* throughout the world. The indices provide exhaustive equity market coverage for over 70 countries in the Developed, Emerging and Frontier Markets, applying a consistent index construction and maintenance methodology. This methodology allows for meaningful global views and cross regional comparisons across all market capitalization size, sector and style segments and combinations. Independent auditors Pursuant to CVM Instruction No. 381, we state that, during the fiscal year ended December 31, 2012, the independent auditors have not been paid for services other than those related to the external audit. The Company s policy on contracting services unrelated to external auditing from its independent auditors ensures that there are no conflicts of interest, nor any loss of objectivity of the part of the independent auditors. IR: Precise dialogue Lojas Americanas has an Investor Relations (IR) division that is responsible for establishing an accurate and transparent dialogue with the market (analysts and investors or shareholders). In this same regard, the Company maintains a bilingual website (Portuguese and English) as a communications channel that contains updated information, as well as providing customer service via and telephone. Each quarter, the division holds conference calls to disseminate results with analysts, investors and those who are interested in the affairs of the Company. Among other assignments in the IR division, included are the coordination of the production and publication of annual and quarterly reports, as well as those that are required by law. It is also responsible for the dissemination of market communications and relevant facts. Code of ethics and conduct Our relations with associates and society are based on respect for individual differences and a constant concern for social responsibility, especially as it regards environmental issues, and health and safety in business management. Thus, our Code of Ethics and Conduct contains values and commitments to be shared by all members of the Company in relations with other stakeholders (shareholders, customers, suppliers, service providers, government and society). 17

18 On the first day an associate enters at the company, they participate in an orientation program in the form of a company-presented training session, in which our culture, vision, mission, principles, values and Code of Ethics and Conduct are presented. Thereafter, associates sign the Code Agreement, pledging to ensure the implementation of the rules and principles contained therein. In the document, the Company reiterates the following commitments: Respect for laws Access to education and development activities Health and safety Eradication of all forms of forced labor Eradication of child labor Harassment prevention Combating sexual exploitation of children and teens Combating the practice of discrimination in all its forms Valuing diversity Respect for freedom of association and the right to collective bargaining Best practices Customer satisfaction We want to be the first choice of our customers when they make purchases and we make every effort and investments so that their expectations are always exceeded. We provide customer service channels, which can be accessed by , telephone or via social media. All complaints are resolved with a maximum period of 72 hours. With regard to in-store customer service, 60% of the comments from our customers are in the form of questions or suggestions. To reduce the number of complaints, corrective measures are taken to adjust our customer service and we also carry out internal training programs. In 2013, we will expand our channels of communication and develop new research tools to measure the satisfaction of our customers. (PR5) Our customers also expressed their satisfaction in their relationships with the Company through the use of the Reclame Aqui (Complain Here) website ( which also allows customers to receive feedback about their complaints. The site takes into account the following indicators: response index, solution index, index of customers who continue to do business with the company (in 18

19 2012, our rating was over 80%), an average score provided by customers and the average response time. The score created, based on complaints received, shows that the average response resolution time is five hours. In 2012, all complaints were answered. In 2012, Lojas Americanas was awarded the RA 1000 Seal for its excellent response, complaint resolution and customer evaluation ratings. Records from the site show that 100% of the complaints received an immediate response and 96% were resolved to the satisfaction of the customer. Supplier relationships Our relationships with our suppliers are based on partnership and trust. We want to provide them with excellent distribution channels, allowing them to grow with us. Our suppliers must comply with the Company s internal policies, conducting their businesses ethically and in accordance with the contracts signed with our organization. These contracts contain clauses that, among other things, refer to compliance with laws and regulations, respect for employees and respect for the environment. Besides complying with the internal policies of the Company and the contracts that have been signed, suppliers must also satisfy the requirements of current laws and regulations regarding the supply and use of products and services, and they are fully responsible for the labeling on the packaging of the products that the Company sells. In this regard, we have had no reports of mislabeling, nor any subsequent inquiries related to this particular matter. Society Lojas Americanas contributes to economic growth and community development in all regions where it operates. Year after year, the Company has grown to generate direct and indirect jobs and tax. 19

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21 Training for every challenge Training programs, as well as our principles are based on three pillars: people methods and results Based on a system of meritocracy and a commitment to a long-term vision, through training programs and personal development, we invest in the professional advancement of our associates. Our training is strategically focused, in which various initiatives are adopted to promote skills, such as leadership, results orientation and strategic vision. Similar to the Company s principles, the personnel development programs at Lojas Americanas are structured on three pillars: people, methods and results. For every challenge an associate tackles, there is a training program available to continuously increase his/her level of knowledge and development to achieve ever improved results. People Pillar People s pillar, due to its complexity, importance and coverage is subdivided in the fronts of culture, leadership practice and relation with society. In Culture, our goal is to disseminate the Company s Culture, Values and Principles, therefore strengthening attitudes and behaviors that are the background of our Management System and help us achieve our DREAM. In Leadership Practice, we seek to form the Company s leaders in way they can achieve results through their teams, always confidents that Lead is to consistently exceed goals, with the team and doing what s right. In the front of Society Relation, we share and engage our associates in the practices of sustainable development of the Company, so we can be increasingly recognized by society as a social and ecologically responsible enterprise. Methods Pillar The Methods pillar has as it s main goal to disseminate and incorporate, on the every level associates day-to-day, Management practices and tools, therefore systematizing our way to solve problems and achieve goals and also improving our analysis capability and decision-making based on facts and data. 21

22 Results Pillar The purpose of the Results pillar is to achieve performance improvement of all areas (Commercial/Marketing, Operations and Support Areas), throughout the qualification of the associates in the patterns of process and activities executions and the development of the competence required for each function. Our principles People A large and challenging dream causes everyone to row in the same direction. Good people, working as a team, growing as their talent permits and being compensated for this, represent the company s greatest asset. Choosing people who are better than themselves, training them, challenging them and retaining them is management s main job. Leadership by personal example is vital, both in the heroic attitudes, as well as the small gestures of day-to-day life. Methods Staying focused is essential. It is not possible to be excellent and everything; it is necessary to concentrate on what is essential. Everything must have an owner who is responsible and authoritative. Debate is good but at the end of the day somebody must make a decision. Common sense is as good as great knowledge. What is simple is better than what is complicated. Results To be obsessive about costs and expenses (which are the only variables under our control) helps maintain long-term survival. Understand that speed, urgency and zero complacency are long-lasting competitive advantages. Ethics, hard work and consistency are the basis for our Company s growth. 22

23 Profile of our associates Our associates are our greatest asset, and we invest in education and training to provide growth opportunities for everyone. We rely on the commitment, dedication and efforts of our associates to support our plans for expansion. We value people who consistently exceed their goals, who act like owners, who are always seeking out the greatest challenges, and who strive to exceed our customers expectations. At the close of 2012, Lojas Americanas had a total of 17,180 associates. They all work full-time and have open-ended work contracts. B2W Digital does not have associates in the Center-West or North regions of Brazil. [LA1] Number of associates by function: Function Men Women Men Women Executive officers Managers Coordinators Technical/Supervisory Administrative Operational Apprentices Trainees By gender Total * The above figures were calculated as of 31/12/12. Since we hire temporary employees only during the Easter and Christmas periods, these are not counted as of year-end Concerned about the welfare of its stakeholders, when hiring new associates, Lojas Americanas gives priority to local residents who live in the surrounding regions of its facilities. In 2012, most of top management (officers and managers) were from their respective regions. [EC7] 23

24 Access to corporate education Through our internally-developed educational structure, we guide the training of our associates For continued, sustainable growth, we that know we need to make the best use of the talents of our associates. Accordingly, we invest in the education, training and development of our associates. This is why created the Americanas Development Center (CDA) in 2005, which is an exclusive space for course work and training that can be accessed through video conferencing or e-learning. Our internal educational system is designed to align our strategies with the culture, values and skills of each professional, always striving to keep our knowledge in various fields of business management current. Besides internally-developed materials, we seek the best universities in Brazil and the world, such as Harvard, Stanford, and others, for training courses for our executives to allow them the opportunity to continually raise their level of knowledge and contribute to value generation at the Company. Our corporate university is located in Rio de Janeiro, with facilities in São Paulo and in eight other Brazilian states. To support the Company s expansion plan and to train our associates, in 2012, new complexes began to be developed with structures designed exclusively for training. The professional development programs conducted in 2012 were focused on improving skills in the areas of commercial operations and leadership. The Company offered a total of 116,677,000 work hours of training. For 2013, we are committed to increasing the number of associates who are trained and the quantity of training sessions offered. [LA10] Annually, all associates in management positions who have been with the Company for more than six months undergo a performance evaluation review. This assessment assures our associates effective management of their performance through individual feedback. The evaluation process has been fully computerized since 2010 and is executed through the PeopleSoft system. [LA12] Focus on sales The Focus on Sales course is designed to provide associates in our stores with information about new product releases, items considered to be best bets for sales and leveraging the Company s results. The courses are given both in person and via videoconferencing. The audience consists of purchasing managers, store managers, buyers and store supervisors. Conducted seasonally, these courses feature speakers from the Company and, often, well-known guest speakers. Examples of the latter include television host, Xuxa Meneghel, and actress, Giovanna Antonelli, who participated in 2012 courses. These 24

25 artists were sponsored by suppliers as a means of motivating associates and preparing our team for even greater sales. On-the-job accreditation To give an associate a professional path to improvement, we developed a career training plan, which offers a training opportunity toward on-the-job accreditation. The courses are given in-person and via e-learning. The initiative is designed to increase the levels of training for operators, supervisors, sales and other managers, allowing them to improve their job performance, especially in the area of customer service. In 2013, we will expand this training to associates in working in sales areas of Lojas Americanas, which will give them the opportunity to become better trained and prepared employees. Investing in the best We recruit university students and recent graduates from the best universities in Brazil with the potential to grow within the Company Our strategy of recruitment, selection and retention has been continuously improved throughout our history. The investments we make in building our team only makes sense, as we seek out people who are aligned with our values and principles, and have a strong desire to grow and build a successful career with us from the start of the selection process onward. Our policy is to train our in-house talent, which has made a difference in our business over the years. We have recruited university students and recent graduates from the best universities in Brazil and abroad through internship, trainee and new talent programs. They all undergo training focused on the retail sector and the organizational culture of the Company. Internship program Our national internship program is focused on training college students with the potential to become future leaders of our Company. The program lasts six months to two years, with a workload of 30 hours per week. During this period, trainees learn about the day-to-day operations of stores, headquarters, distribution centers and other business units. Throughout the program, training modules are also developed 25

26 through which young people are able to become better acquainted with our vision, mission and corporate values, as well as acquire the technical resources necessary to carry out work within their areas of expertise. At the end of the program, opportunities for advancement is great for those who do well. New retail talent program Created in 2011, the program is designed to educate and train future leaders of the Company, at an accelerated rate, so that everyone can participate in the growth of the companies in our group. At the time they are hired as professionals, they are assigned to business divisions, gaining immediate contact with the activities of each sector. In the first six months, a new associate attends lectures by the Company s managers and visits stores, distribution centers, Customer Service Centers and other business units. Trainee program Every year, we hold an open registration for the Lojas Americanas Trainee Program. As fast and dynamic as is the retail sector itself, the program provides 12 months of intensive training for young people with the profile to fill future management positions in the Company. The steps in the selection process include: registration, online training, skills laboratory, HR interview, final assessment and contracting. During the first six months, trainees are familiarized with the entire operations of the Company and they go through several corporate training programs. In the second stage of the trainee program, participants are sent to a business division, where they acquire on-the-job training and are given the opportunity to develop a challenging final project. Persons with disabilities program Lojas Americanas seeks to promote the effective inclusion and training of persons with disabilities in the workplace. The company offers positions, through which associates have the opportunity to learn the routines of the retail environment and develop new skills. Attracting candidates is accomplished through partnerships with municipal agencies and specialized consultants, which recommend candidates to fill vacancies in stores and distribution centers throughout the Brazil. Furthermore, in Rio de Janeiro and São Paulo, the Company participates in the Special Opportunities project, where large companies offer positions to persons with disabilities, through the use of specialized and accessible stands. 26

27 Designed to inform and encourage our managers regarding the importance of the inclusion of professionals with disabilities at Lojas Americanas, in 2012, the Personnel and Management Department, in partnership with Rio de Janeiro s Municipal Department for Persons with Disabilities and a specialized consulting firm, organized training on important subjects, such as the fundamental aspects of hiring professionals with disabilities. The goal of this activity was to strengthen inclusion activities that B2W has been conducting to bolster diversity by making the Company increasingly more accessible and inclusive. As a result, we were proud that, in 2012, there were no judgments against us in the courts that were based on the practice of discrimination. [HR4] Young apprenticeship project Always with an eye toward preparing students for the labor market, in partnership with the National Commercial Apprenticeship Service (SENAC) or equivalent entities in the cities where our business units are located, the Young Apprentice Project prepares students to enter our job market. Work contracts are for a fixed term and, in exchange, these young persons make a commitment to enroll in and attend primary or junior high school. Benefits Beyond benefits required by law, to provide our associates with more and better benefits, all receive a health plan, life insurance and a restaurant or meal voucher, as well as discounts at Americanas.com, Submarino and Shoptime. For purchases at Lojas Americanas stores, associates can also take advantage of discounts at all locations. Our concern about the quality of life, welfare and training of our associates has always been a priority in the management of our people. As a result, we also negotiate special agreements with health spas, restaurants, and language courses at universities all in an effort to improve the performance of our team. Regardless of contract type, all associates are entitled to the same benefits. [LA3] For associates that have growth potential and above average results, the Company has a program called School of Retail which aims to help those associates to complete college and therefore grow further in their career. Members can apply for the program after completing two years at the Company. 27

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29 Green Company The Sustainability Committee is active in the areas of social, environmental and economic development, seeking dialogue with our stakeholders In 2007, we decided to take the critical step of engaging all areas of Lojas Americanas in our efforts toward sustainability, developing the Green Company. The initiative was implemented in our management through the formation of a multidisciplinary committee, which operates in the areas of social, environmental and economic development, seeking dialogue with the Company s stakeholders (shareholders, customers, suppliers, associates and society). The committee meets weekly to discuss and plan Green Company activities, which are designed to promote the sustainable development of Lojas Americanas. For this, we encourage consumer awareness, improvements in waste reduction and the development of environmental projects applicable to the day-to-day realities of our business, among other initiatives in line with our mission. As a result of the inclusion of sustainability as part of the Company s operating strategy, the committee was formalized in 2010 by our Board of Directors and, a year later, we began including environmental responsibilities in all of the organization s formal job descriptions. Communicate to educate In 2010, the Sustainability Committee launched the Green Company hotsite within the Investor Relations website, which was designed to offer a direct means of communication with all of our stakeholders (shareholders, customers, suppliers, associates and society). Through this space, we also present the objectives of the committee, the Company s environmental policy and its carbon inventory. On this hotsite, we publicize an exclusive address, which functions as a direct communications channel for individuals to direct their questions and suggestions regarding the Company s environmental practices. To publish information, the Committee uses a variety of communication channels, such as Isto é LASA (This is LASA), the quarterly corporate newspaper that is distributed to of all our associates, in which Green Company is a regular column; a closed-circuit television system in the company s elevators; pop-up computer messaging; and booklets distributed in our stores. Our main purpose is to encourage associates to be concerned about the environment in their day-to-day activities. 29

30 After the creation of the Sustainability Committee, the Associates Handbook (distributed at the time that new hires are incorporated into the stores) underwent a makeover, acquiring a Green Company section. Through this educational activity, new employees come into immediate contact with the group s sustainability culture. In addition, the Committee created the Green Primer for distribution to associates. The publication contains ten initiatives that can be taken daily to contribute to the preservation of natural resources. Flyers promoting store products are also used by the Sustainability Committee to promote the Green Company s activities to all customers. Distribution in our stores throughout Brazil allows us the opportunity to directly reach our various stakeholders. Control of greenhouse gas emissions Accounting for emissions from all our business units through the GHG Protocol methodology Lojas Americanas has been a member of the Brazilian GHG Protocol Program since Its methodology is used internationally by businesses and governments to conduct inventories of greenhouse gases (GHG). The information obtained can be applied to annual reports and as responses to questionnaires from other initiatives, such as the Carbon Disclosure Project (CDP) and the Carbon Efficient Index (ICO 2 ). We have also established a partnership with the Brazilian GHG Protocol Program and the Getulio Vargas Foundation, and have been trained in the emission accounting methodology developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). We use this methodology to measure the emissions of greenhouse gases from all of our business units. In 2010, the ICO 2 was introduced by Bovespa and, since that time, we have been a member of this select group. To participate in this index (whose methodology assesses how much of a company s revenue is dependent on GHG emissions), it is necessary to be among the 50 most liquid companies on the stock exchange (IbrX-50). Though this participation, we have adopted more transparent practices with respect to GHG emissions. 30

31 GHG Emissions In 2012, our direct emissions of greenhouse gases, which are derived from stationary and mobile sources, such as distribution center forklifts and other vehicles, among others, were approximately 1,000 tons of CO 2 equivalent (tco 2 eq). This means that, compared to 2011, we increased the amount of our emissions in proportion to our growth, as our 2011 emissions came to 841 tons of CO 2 equivalent. In 2012, Brazil experienced difficulties in relation to power generation, as the country s hydroelectric reservoirs were running very low due to a prolonged drought during the year. To make up the shortfall in supply to the Brazilian grid, known as the National Interconnected System (SIN), the use of thermoelectric power plants was required. Accordingly, the conversion factor of kwh to tco 2 eq saw a very significant increase in the generation of emissions from all sectors of the market. However, compared to the previous year, based on electric power consumption, we managed to reduce consumption by 13%. [EN5] All our business facilities have smart systems for turning off air-conditioning units to reduce waste. This system is programmed to automatically shut down after working hours. Other indirect emissions that we have calculated since 2010 show the amount of emissions generated by associates business travel and the use of plastic bags, as these are very relevant emission sources for our business. In 2011, we also calculated the amount of indirect emissions generated in the transportation and distribution of goods. We understand that logistics is critical to our business and, therefore, is a source of emissions that must be monitored so we can act in an effective manner. Thus, in 2012 the total emissions computed for the transportation of products was 17,716 tco 2 eq. [EN17] 31

32 Emissions inventory Emissions (tco2eq) Scope 1 * Scope 2 ** Scope 3 ***(¹) Total direct and indirect emissions Notes: Scope 1*: Direct emissions of greenhouse gases: According to the GHG Protocol methodology, these are from stationary and mobile sources, which are owned or controlled by the Company, such as forklifts in distribution centers, vehicles, among others. Scope 2**: Indirect emissions of greenhouse gases: Those from power consumption. Scope 3***: All other indirect emissions resulting from the Company s activities, but which occur from sources that do not belong to or are not controlled by the Company, such as business travel, outsourced fleets, among others. (¹)The variation in the scope 2 emissions is due to the conversion factor from kwh to tco2, which was changed from in 2011 to in Our consumption in kwh was kWh in 2011 and kWh in

33 Other initiatives Distribution Centers are being upgraded to improved energy efficiency standards, while new stores already feature more efficient lighting Energy efficiency To adapt to new energy efficiency standards, our Distribution Centers have undergone several changes since 2009, including improvements in air circulation and the supply of water, and 100% installation of timed flow taps. We opened 200 new stores between 2011 and 2012, all under the energy efficient model, to reduce water and energy consumption. With regard to older stores, modifications are being planned and will include the upgrading of air conditioners and lighting systems. Currently, in-store air conditioning units are programmed to turn off automatically at closing time. For 2013, one of our goals is to upgrade our administrative headquarters in Rio de Janeiro to conform to Leadership in Energy and Environmental Design (LEED) certification guidelines, the principal certification for sustainable construction in the world. We believe that with this attitude we will provide a better and more pleasant environment for our associates, while reducing our environmental impacts. To control what is spent weekly for water and energy, as measured in m³ and kwh, respectively, our engineering department has prepared an internal application for store systems. The manager responsible for point-of-sales collects information on a monthly basis and sends this to the Sustainability Committee, which consolidates all data received. In some stores, this data is already being collected automatically, by means of electronic metering.[en26] The only type of energy that Lojas Americanas consumes is electric. From 2011 to 2012, the Company reduced its electricity consumption by raising the awareness of associates and implementing some general measures, such as switching to energyefficient light bulbs. [EN4] 33

34 Selective waste collection (trash recycling) and the use of plastic bags With the goal of eliminating waste and sending to the most appropriate destinations for disposal, we are currently practicing selective collection at our Headquarters, in our Laranjeiras and Passeio offices in Rio de Janeiro, at our Administrative Center, as well as in all of our Distribution Centers. We have adopted the practice of reducing the use of plastic bags in our stores, with a script for cashiers to use to ask customers if they will need a bag prior to packing up their products. This decision was made because many purchases are small and/or immediate consumption items, which generally do not need a bag. In addition, we keep reusable bags on the sales floor, on permanent display and at the checkout lines. To comply with Municipal Law 7008, in Joinville, Santa Catarina, and State Law 5502, in Rio de Janeiro, Lojas Americanas has adopted a variety of measures, including: A point-of-sales (POS) customer discount of R$ 0.03 for every five (5) items purchased for which a plastic bag is not used (an alternative option is to exchange 50 bags per 1 kg of food); Displaying, in visible areas and in wide circulation throughout our stores, customer awareness posters regarding the improper disposal of plastic bags; Providing plastic bag collectors at our stores for customers who wish to return them; Sending collected plastic bags for recycling; In cities, such as Belo Horizonte, where the law requires the use of biodegradable bags, Lojas Americanas offers these to customers free-of-charge. Since 2010, we have sold over 3 million reusable bags and, each year, these sales are increasing. To make further progress on our environmental performance, we understand it is vital to keep track on the Company s consumption of materials. In 2012 B2W Digital s consumption of materials reached tons of which 1 is wood, 608 are paper, are plastic and 146 are steel. [EN1] 34