Sustainability

Localiza’s vision is to be an admired company. Such admiration involves all stakeholders: customers, shareholders, employees, suppliers, societies and communities where the Company operates, etc. Therefore, Localiza actively operates in pursuit of economic and financial sustainability to perpetuate its business and add value to its investors, taking into account ESG principles (environment, social responsibility and corporate governance). To seal its commitment to sustainability, Localiza became a signatory to the UN Global Compact in 2017 and is working on its COP (“Communication on Progress”), in addition, reinforcing the commitment with our employees, Localiza received the certification Great Places to Work.

 

Below is a description of the main actions of the company for each of these areas:

 

sustentabilidade

Corporate Governance

Localiza adopts the highest corporate governance standards, which add value and ensure fairness, compliance, accountability and transparency to all shareholders and the market in general. It has a professional and active Board of Directors composed of the 4 founders and 4 independent members, all qualified and with diversified capabilities. Learn more about the Corporate Governance of the Company by clicking here.

Localiza also has a book of values and code of ethics (which can be accessed by clicking here), and (i) ethics, (ii) auditing, risk management and compliance and (iii) disclosure committees.

In line with the best corporate governance and risk management practices, Localiza offers its employees, franchisees, clients, suppliers, investors and other stakeholders, a whistleblower hotline (Confidential Channel) to register information about unethical or illegal situations occurred in the Company. In order to have a better confidentiality and impartiality, Localiza´s Confidential Channel is operated by an independent company and is available 24 hours a day, 365 days a year and can be accessed by any of the following means: (i) website; (ii) toll free phone number; and (iii) e-mail. Internal Auditing and Human Resources departments are responsible for managing the whistleblower hotline and investigating the reports received.

The whistleblower may follow the status of its complaint through the website and the tenor to complete the process may vary according to the level of complexity of the complaint.

The complaints received and considered pertinent will generate actions that can go from a simple conduct reorientation until employee dismissal or suppliers disqualification, depending on the relevance of the case.

Learn more about the Whistleblower Hotline of the Company by clicking here.

The Company, aware of its social responsibility in fighting corruption, has a Integrity Program that applies to all its staff and suppliers network – particularly those representing the Company or acting on its behalf before government agencies.

Localiza’s Integrity Program is a set of procedures and guidelines essential in maintaining an ethical and transparent conduct in all the Company’s business relationships, in order to prevent and fight acts of corruption and acts against public administration. Under its Integrity Program Localiza joined in April 2016, the Business Pact for Integrity and Against Corruption, an initiative of the Ethos Institute, which aims at promoting a more principled and ethical market.

Learn more about the Integrity Program of the Company by clicking here.

Environment

Localiza Fleet Management has the Ecovadis silver seal for environmental responsibility, which analyzes the Company in the following areas: social, environmental, ethics and supply chain.

Fleet efficiency
The fleet of Localiza Car and Fleet Rental Divisions is quite efficient and new. In the Car Rental Division, the average age of the operating fleet is close to seven months, while the cars of Localiza fleet rental are approximately 19 months old on average. The maintenance of cars is regularly made, according to manufacturer indication.

The fleet of Localiza group has efficient fuel consumption, and approximately ¾ of the cars have their consumption classified as A or B (most efficient and least polluting) according to Inmetro (To access the source click here – Portuguese only) .

Localiza also has hybrid cars to be rented. Customers, who wish to, can rent a Hybrid Fusion Titanium 2.0 in major cities. This car’s engine works with both gasoline and electricity and enables a significant reduction in emissions of a gasoline-powered car, while overcoming the deficiencies of an electric car.

Use of Ethanol
Cars purchased for Localiza Car and Fleet Rental are biofuels whenever available in this model, allowing the use of ethanol for fueling. Besides being less polluting than gasoline, ethanol is derived from a source of renewable resources. Vehicles in Car Rental Division are fueled by the Company (first tank and in situations where the car is returned with incomplete tank) with ethanol. The car rental customer usually has the habit of fuelling the car with ethanol before returning it, since filling an ethanol tank is cheaper than a gasoline one.

According to a study of Unicamp, the complete cycle of production, distribution and consumption of ethanol, the ethanol CO2 emission is 89% lower than gasoline (To access the source click here – Portuguese only) .

Car wash
Localiza uses a dry cleaning system for its cars. While a traditional wash consumes about 83 liters of water per vehicle, Localiza’s cleaning system uses about 100ml of water per car and the product used is biodegradable. In addition to reducing water consumption, the cleaning system also generates a reduction in energy consumption and less waste into the sewer, reducing the impact on the environment.

If the cars are very dirty, washing with water is unavoidable, otherwise the cars are washed in the dry cleaning system.

Sustainability initiatives

Corporate
Conscious printing campaign

In order to reduce paper waste and contribute to the preservation of the environment, Localiza periodically promotes campaigns of printing awareness with paper-saving tips and awareness on the use of alternatives such as USB stick, printing on both sides of the paper and reuse sheets.

Localiza Fleet

Environmental Management Plan

Localiza Fleet has an environmental management plan (EMP) that aims to adapt and systematize the environmental aspects of its operation, besides meeting the sustainability standards of multinational clients. The PGA is part of the Company’s commitment to act with corporate social and environmental responsibility, considering aspects of the legal and institutional compliance and its continuous improvement.

In addition to the legal demands, Localiza Fleet has an active and audited environmental policy for energy conservation, water and waste management and recycling, as well as instructive internal campaigns related to sustainability. In this sense, the Company has set targets and indicators and is audited by an independent firm. The results are disseminated through its website and the auditing firm provides high success rates for the initiatives.

Recycling

Moreover, Localiza Fleet has an already implemented process for recycling paper, cardboard, toners and ink cartridges. All IT equipment are scrapped and recycled. The link with the detail work is https://frotas.localiza.com/brasil-site/pt-br/a-empresa/Documents/PGA-2014.pdf (Portuguese only)

Sustainable driving course

Localiza Fleet created an online training on sustainable driving, or eco-driving. Such training is made available to customers and teaches drivers how to use your car to reduce the environmental impacts of vehicle use. Such measures are: the reduction of accidents, reduction of polluting gases emission, renovation and maintenance of the fleet, among others.
Clients’ carbon footprint

Localiza Fleet Management performs an analysis of the carbon footprint of its current and potential clients’ fleet. With this information, we can offer the clients: (i) more environmentally efficient fleet alternatives and (ii) estimated costs to neutralize carbon emissions through the use of ethanol and tree planting.

Localiza Car Rental – Locations

The car rental locations are measured with respect to the consumption of water and energy. To encourage the reduction, some actions are taken throughout the year such as:

• “Conscious Consumption” competition, in which locations are encouraged to take action to use water and energy intelligently. Agencies that reduces the most their consumption / costs are recognized and rewarded.
• Regular Newsletters with tips to reduce water and energy consumption that are sent to the locations.
• Reduced water and energy consumption through monthly monitoring of fixed costs results, focusing on the economy and reducing costs.
• Successful cases of Disclosure for affiliates.

The largest Localiza locations, which make in-house cars preventive maintenance, are adapted to collect wastes, in partnership with certified companies, as well as staff training in the handling of materials. Such wastes include used oil, oil filter and fuel filter.

The Company has also structured a program to increase the participation of tire suppliers that ensure proper decommissioning.

Localiza Seminovos – Stores

Localiza Seminovos performs campaigns for reducing energy consumption in car sales stores. Following the release of the campaign, along with tips on how to reduce consumption, the stores are divided by size and a ranking monitors the progress of each of the stores. Yet an analysis is made of lamps and ballasts that are used in stores and those least efficient are replaced. In its first edition, this campaign generated an average reduction of 20% of energy consumption in the Dealers stores in the first quarter in which it was deployed.

New headquarters

Localiza’s new headquarters is under construction and the project includes several sustainable initiatives that will optimize the use of water and energy resources. Among the green initiatives the main ones are:

During the Construction

– Use of durable material

– Selective collection of construction rubles

– Use of Local labor

In the built building

– Use of smart elevators

– Building automation system

– Efficient lighting (both in lights to be used and in the building design that optimizes the use of natural light) and intelligent air conditioning

– Reduction of paved surface and existence of a garden on the parking roof

– Interlocked block flooring, which allows the return of water to the water table

– Central air conditioning system which is acoustically isolated

– Acoustic treatment to areas with higher noise (e.g. call center.)

– Rainwater reuse

– Reuse of greywater (used in sinks)

– Greywater treatment plant

– Water consumption reduction devices (flushing valves with dual system)

– Automatically triggered faucets – touch or sensors

– Permeable areas 10% higher than legal requirement

– Planting of native trees

– Preservation of environmentally relevant specie

– Intelligent, automated irrigation of plants

– Internal street to alleviate traffic on public avenue

The new building aims at meeting Localiza’s needs, in a way that promotes environmental comfort as well as the optimization of water and energy consumption.

Rationalization of water and energy in the current Headquarters

In the current headquarters of the Company, in Belo Horizonte / MG, all taps have timer and lamps have been replaced by economic models. Recurring campaigns on the rational use of these two resources are also made.

Solar Energy

Social Responsibility

Quality of the business model

In order to maintain the quality of leased vehicles for customers, Localiza operates with the most sold car brands in Brazil, thus ensuring a wide network of suppliers for maintenance of vehicles wherever the customer is.

The Company’s service providers undergo a rigorous selection and monitoring, which evaluate technical issues, quality, physical structure, customer satisfaction, among others. The services and products provided are regularly evaluated by Localiza, as well as by its customers. Suppliers are ranked according to the quality of services provided and may start receiving more services, if properly evaluated, or may be disqualified in case they are not meeting the company’s quality standards.

Localiza, operates in a premium segment of the market and, therefore, values the quality not only of vehicles that customers are renting, but in the quality of service provided. Both Car and Fleet Rental Divisions, have 24-hour toll-free customers service to mitigate any incidents the client may have before, during or after renting a car with us. If the car has any problem or failure, customers can immediately call the Company, which will seek the best way to solve the situation, mitigating any risk that the customer may have due to the use of the car. By doing this, the Company has high client satisfaction levels measured by the Net Promoting Score methodology, reaching 80.7% in the Car Rental Division.

Safety is also an important item for the Company: Localiza Fleet has an online training that is available to clients on defensive driving, trying to increase customer safety while driving. Since its launching in 2013, over 600 people have been treined.

Upon customer request, Localiza Fleet also offers adapted cars to customers with some kind of physical disability.

Human Resources Practices

Localiza has always been dedicated to sustainable Human Resources practices, seeking respect and the welfare of its employees. The Company has significant levels of diversity in its leaders, invests in training for its entire staff and was one of the first in Brazil to have a structured program of profit sharing since 1990, even before the legal regulation of this practice.

The Company also has policies on:

– Health and safety of employees including training,
– Work conditions,
– Individual Protective Equipment supply,
– Structured relationship with employees representatives,
– Investment in training, development and career of employees,
– SESMT (Security and Occupational Health Specialized Services)
– CIPA (Internal Commission for Accident Prevention)
– PPRA (Environmental Risk Prevention Program)
– PCMSO (Occupational Health Control Program)
– Commitment to non-use of child or slave labor in its operations or its suppliers’ and
– Human rights for all who are involved in the Company’s business,

In addition to having guaranteed all legal labor rights.

Social Balance Sheet

To ensure that the Company is able to attract and retain talent, it periodically conducts salary studies. The goal is to evaluate the competitiveness of compensation in comparison with the market and periodically update policies on this subject.

Promotions, internal use of employees and professional development are all Localiza values.

2016
Calculation basis of social indicators (consolidated) – R$ thousand
Net revenue (NR) 4,439,273
Net income before taxes (EBT) 527,628
Gross payroll (GP) 448,638
Internal social indicators Amount R$/
thousand
% on
GP
% on
NR
Meals 30,083 7% 1%
Mandatory social charges 95,254 21% 2%
Health care 29,627 7% 1%
Training and professional development 993 0% 0%
Day-care or day-care allowance 285 0% 0%
Profit sharing 66,517 15% 1%
Other 6,707 1% 0%
Total – internal social indicators 229,466 51% 5%
Education 306 0% 0%
Culture 1,199 0% 0%
Other 305 0% 0%
Total contributions to the community 1,810 0% 0%
Taxes (excluding social charges)(*) 321,167 54% 6%
Total – external social indicators 323,796 54% 6%
Employee indicators
Number of employees at the end of the year 6,324
Number of admissions during the period 1,454
Number of outsourced employees 132
Number of interns 20
Number of employees over 45 712
Number of women working at the company 2,774
% of management positions held by women 49.34%
Number of physically-impaired people or people with special needs 281

Oasis Bananal
Localiza’s New Headquarters is next to Bananal Community, and to build a good and lasting relationship with the neighborhood, with the focus on the development of this community, Localiza held the Oasis Bananal Project. The project was done in partnership with Bridge Consultoria, Associação Nossa Cidade and Oasis Belo Horizonte. Before making things happen, the project volunteers built affection relationships with the people who live in the community to identify their dreams of transformation. Residents defined the paths to be followed by putting their talents to make it happen. The highlight of the Oasis Bananal was the stage of the “miracle”, where community dreams became treu. During two days of joint effort the volunteers and the community built: a recreation area for children; painted alleys; gardens; lighting and an urban balcony, called “Parklet” for community meetings.

Programs designed for employees

Welcome to Localiza

This program is carried out by every new employee of the Company and aims to present them our culture, values, mission and business platform. Integration has a total workload of 14 hours, divided into two days and with the presence of speakers from the Human Resources Department and representatives from the business areas.

Headquarters employees participate in this course in person, while employees allocated to car rental locations and car sales stores have an online training with all content.

New Leader Localiza

This program was created in late 2014, especially for employees promoted to a leadership position or professionals hired to act as a leader at the Company. The program has the premise that the leader should know the Company’s business well and become able to apply our people management practices through training, technical visits and monitoring of HR.

Qualificar Program

The Qualificar (qualify) Program covers the entire Localiza team and is comprised of a series of trainings aimed at developing technical and behavioral skills. The courses were defined based on the analysis of the points of potential improvement detected in the annual performance evaluation, as well as the Company’s values and skills. Employees, together with their leaders, choose which areas need to be developed and improved and then enroll in the program. Localiza’s employees themselves are the program’s tutors, so that the tutor becomes a reference on the subject for the other employees, thus creating recognition of tutors and

Total participants in 2015: 1,453
Total participants since the program was launched: 6,167

Liderar

Liderar (to lead) aims to train and develop Localiza’s leaders in People Management practices. The program was divided into three modules, with total workload of 36 hours and taught by internal multipliers of different areas of the Human Resources Department.
Total de leaderes treined: 150

Inclusion program

Localiza has an inclusion program of people with disabilities that promotes inclusion and encourages diversity. There are now over 100 employees including administrative and apprentices working in the car rental locations and in the headquarters. It is expected that this number continues to grow.

Our goal is to contribute to the training of disabled people, providing knowledge and developing administrative routines, professional attitude, aiming at making them able to exercise other positions within the Company.

The staff of Localiza has individuals with different disabilities (physical, hearing, visual, mental, rehabilitated, multiple disabilities, among others).

To receive them, a preparation with the teams from the headquarters and locations was developed, in order to make adaptation to all involved easier. In addition to the HR, the leaders were involved and fully supported the project, as well as the teams that received those employees. Localiza’s social assistance service also performs, on a regular basis, an individualized follow up with those employees in order to promote inclusion and retention at the Company. Motivational and technical seminars on inclusion were presented and special lectures and training sessions were given for those teams who received people with Down Syndrome and hearing disability.

The result of this work was to include, break paradigms regarding the ability of disabled people, motivate the teams, excellent results for the Company and an even more diverse and humane working environment.

Immigrant Hiring

Localiza created a program to hire immigrants. Currently, the company has employees from different countries such as Haiti, Benin, Angola, Nigeria and Senegal. The initiative came from the Company’s vision to offer job opportunities to professionals from different countries who have chosen Brazil to build their future and improve quality of life.

To perform these contracts, partnerships were made with institutions that support immigrants and institutions for dissemination of opportunities and uptake of interested candidates. Before starting the recruitment, Localiza’s admission department needed to gather information, understand the paperwork, identify and validate the necessary documents with the competent institutions to ensure compliance with labor legislation and the correct registration of immigrant employees in the Company. The selection of immigrants analyzed the profile of the professionals, aiming to bring people presenting the requirements and the necessary skills and also those who had similar characteristics with the Company, with difference in attitude, joy and talent.

Social Service

The Social Service acts in social relationships and supports employees, spouses and children in cases of social problems by identifying resources for the improvement of living conditions with

Social work at Localiza reflects the care demonstration by the Company to its employees and their families in times of difficulties, conflicts and crises.

The Social Service actions are guided by the values and principles of the Company, based on respect, ethical behavior and attention to people.

It operates in three main fronts:

Preventive: develops and implements programs and social activities, contributing to the improvement of the organizational climate and inclusion of PWD (People with disabilities) employees.

Corrective: attends and follows social cases involving health care, alcohol abuse, drugs, sick leave, vocational rehabilitation, family and marital relationships, financial problems, among others, to improve the quality of life.

Emergency: supports situations of social risk in cases of accidents, deaths, disasters and fire, contributing to the rescue of emotional balance.

Live Better Program

Created in 2005, this program is internal and approaches different issues that relate to health, awareness and well-being of the employees. Below are some of those actions:

– Traffic safety campaign

Every year, throughout the month May, Localiza engages employees and customers with an awareness campaign for safer traffic in support of the international movement of Yellow May. With the proposal to draw society’s attention to the high rate of deaths and injuries in traffic around the world, the goal of the movement is to be a coordinated action between the government and civil society. The intention is to put in question the road safety issue and mobilize the whole society, involving several segments, aiming at effectively discussing the issue, engaging in actions and propagate the knowledge.

– Blue November

This initiative was spread to several countries as a way to draw men’s attention to the importance of preventing prostate cancer. Localiza joined the movement and conducts annually an awareness campaign on the issue for employees of its Headquarters and affiliates. During the month of November, they receive various contents related to the prevention and diagnosis of prostate cancer.

– Pink October

The name refers to the pink lace color that symbolizes the fight against breast cancer. Through a partnership with the Instituto Mario Penna, the Company’s employees receive, throughout this month, content related to preventing and early diagnosis of breast cancer.

– Program to support pregnant women

Localiza created a program to provide adequate prenatal care to employees and their dependents, with the support of a multidisciplinary team (doctors, psychologists, nutritionists, nurses, etc.) who focus on health and well-being of mother and baby . With this program, the company expects to minimize possible complications in the prenatal and postpartum.

There will be a biannual meeting to guide pregnant women about issues related to pregnancy, as well as monitoring by business partner for each stage of pregnancy. In addition, expectant mothers can count on monitoring for issues related to: (i) medical appointments and tests that must be performed each month; (Ii) guidance on the vaccine schedule; (Iii) proper nutrition for pregnant women; (Iv) preparation for childbirth; (V) breastfeeding; and (vi) initial baby care (during the first 3 months), among others.

The patient will also have a 24-hour service to answer questions or receive specialized team guidelines.

– Blood and bone marrow donation campaign

In partnership with the Hemominas, Localiza performs blood draws at the Company’s headquarters, in addition to the donor registry in REDOME – National Register of Bone Marrow Donors. For affiliates awareness campaigns are conducted indicating the criteria for donation and indication of the closest blood centers.

– Walk Groups

With the support of sports advisors, Localiza organizes periodically walks with groups of employees. The goal is to encourage physical activity and combat inactivity.

– Eat Well Program

With the support of Allele, Localiza weekly publishes tips and guidelines on diet and physical activity.

– Educational lectures

Annually, Localiza prepares a schedule on various issues in order to educate its staff. The following topics were already discussed: personal financial guidelines, oral health, breathing diseases, heart disease, and eye care, among others.

Suppliers

Our contracts with suppliers require that they comply with rules relating to environmental responsibility and labor laws.

Encourage culture and sports

Localiza sponsors and supports cultural, sports and social programs to stimulate citizenship and entrepreneurship in Brazil, issues that have adherence to business thinking. They are:

– Inhotim: Localiza sponsors the Inhotim Institute through Rouanet Cultural Incentive Law. Inhotim Institute is home to one of the most important contemporary art collections in Brazil and is considered the largest center of outdoor art in Latin America. The Company also encourages tourists to visit the institute.

– Green Light for Culture: Project which provides support for culture in Brazil and that, for more than twenty years, uses its own resources or those from income tax, as defined by the Rouanet Law. This program seeks to encourage projects that present the beauties of Brazil in any cultural expression, arts, dance, music, photography, cinema, etc. The program also supports hundreds of theatrical performances and concerts touring the country.

– Act to encourage the sport: a portion of the income tax is allocated to the Law for the benefit of sports projects, encouraging leisure, sport and youth. In August 2014, Localiza was recognized as a supporter to the national sport, being one of the honored Companies by Entrepreneur Award Friend of Sports prize, held by the Ministry of Sport. Amateur tennis, walking and jogging, equestrian enduros and training base athletes were some of the projects supported by Localiza.

Encouraging entrepreneurship

– Junior Achievement: educational project which main goal is to take entrepreneurship to public schools. The Company is one of the sponsors of Junior Achievement and the chairman of the Advisory Council of Minas Gerais is Eugenio Mattar, CEO of Localiza.

Encouraging democratic ideals and citizenship

– LIDE: debates strengthening free economic and social development as well as ethical principles of corporate governance in the public and private sector. LIDE consists of business leaders from national and international corporations, who promote integration between companies, organizations and private entities, through debate programs, forums and initiatives to support sustainability, education and social responsibility. LIDE brings together leaders who believe in strengthening the free enterprise in Brazil and worldwide.

Incentivizing social projects

– Instituto Minas pela Paz: project that aims to promote social justice, peace, culture, citizenship and human rights, by performing actions to prevent violence and crime, as well as the implementation and encouragement the cultural and social projects that have this same objectives.

– Institutions supported by the Social Fund for Children and Adolescents, the Elderly Act, Pronon and Pronas: income tax funds are directed by the Company for previously selected institutions that are empowered and have good track record and high reputation. Supported institutions: Associação Mineira de Reabilitação, Hospital Pequeno Príncipe, Hospital do Câncer de Barretos, APAE – Associação de Pais e Amigos dos Excepcionais, Hospital Paulo de Tarso, ADAV – Associação para o Desenvolvimento e a Assistência de Talentos e Vocações, Instituto Mário Pena e Missão Ramacrisna.

– Green Seed: social project which provides support to organizations through volunteering. In this program food, toiletries and educational materials are collected and will help two previously selected institutions.