For the ninth consecutive year, ISA CTEEP publishes its Annual Report and Sustainability Report, which follows the guidelines of the Global Reporting Initiative (GRI), version G4, and in the “essential” adhesion option, and meets the parameters established by Brazil’s National Electric Energy Agency (ANEEL) for preparing the Annual Report on Social and Environmental Responsibility of electricity companies.

The information reported herein refers to the Company’s economic, social and environmental performance from January 1 to December 31, 2016.G4-28, G4-29, G4-30, G4-32

The financial statements present the results of ISA CTEEP as the parent company and also of its subsidiaries and jointly-controlled subsidiaries (associated companies or joint ventures), which are companies established to provide the public service of electricity transmission, in which the organization holds equity interest. Please visit http://www.isacteep.com.br/pt/negocios/subsidiarias to know more about the companies of the report.

Regarding social and environmental performance, however, only the performance indicators of ISA CTEEP (parent company) are included. Data on its wholly-controlled subsidiaries is published in its respective sustainability reports. G4-17

Changes in scope and limits of aspects covered by the report, compared to the previous report, when necessary, are informed along with the corresponding indicator. G4-22, G4-23

Profile indicators

Id	Indicator	Page (or notes)	Global Compact Principles
G4-1	Statement about the relevance of sustainability to the company and its sustainability strategy.	link
G4-3	Organization name.	link
G4-4	Key brands, products and/or services.	link
G4-5	Location of headquarters.	link
G4-6	Countries where the main or most relevant operating units are located, considering the sustainability aspects of the report.	link
G4-7	Type and legal nature of the property.	link
G4-8	Markets where the company operates.	link
G4-9	Company size.	link (ver também G4-10)
G4-10	Employee profile.	link
G4-11	Percentage of the total collaborators covered by collective negotiation agreements.	One-hundred percent of eligible employees are covered by collective negotiations, which represent 1,392 employees. The collective bargaining agreement applies to managers, coordinators, administrative, technical and operational staff, and apprentices, except for board members, president, directors and interns.	3
G4-12	Description of the supply chain.	link
G4-13	Significant changes occurred during the period covered by the report.	link 1, link 2, link 3
G4-14	How the company adopts the approach or principle of precaution.	link
G4-15	Letters, principles, or other initiatives externally developed.	link
G4-16	Participation in national or international associations and organization.	link
G4-17	Entities included in consolidated financial statements and entities not covered by the report.	link
G4-18	Content definition process of the report.	link
G4-19	Material aspects identified in the process of defining the content of the report.	link
G4-20	Limit, inside the company, of each material aspect.	link
G4-21	Limit, outside the company, of each material aspect.	link
G4-22	Reformulating information provided in previous reports.	link
G4-23	Significant changes in scope and limits of material aspects vs. previous reports.	link
G4-24	List of stakeholder groups engaged by the company.	link
G4-25	Basis used for identifying and selection of stakeholders for engaging.	link
G4-26	Approach for engaging stakeholders.	link
G4-27	Key topics and concerns during the engagement, by the group of stakeholders.	link
G4-28	Period covered by the report.	link
G4-29	Date of the most recent previous report.	link
G4-30	Report issuing cycle.	link
G4-31	Contact person for questions about the report or its content.	link
G4-32	Option of applying guidelines and GRI table location.	link
G4-33	Policy and current practice adopted by the company to submit the report to external checking.	The content of the report was not submitted to external checking.
G4-34	Company’s governance structure.	link
G4-56	Values, principles, standards, and behaviors of the company.	link 1, link 2, link 3

Economic performance indicators

Id	Indicator	Page (or notes)	Global Compact Principles
G4-EC1	Direct economic amount generated and distributed.	link

ENVIRONMENTAL PERFORMANCE INDICATORS

Id	Indicator	Page (or notes)	Global Compact Principles
G4-EN3	Energy consumption inside the organization.	link	7, 8
G4-EN4	Energy consumption outside the organization	link	7, 8
G4-EN8	Total water removed by source.	link	7, 8
G4-EN11	Operating units owned, leased, or managed in or in the vicinities of protected areas and areas of high biodiversity rates located outside protected areas.	link	7, 8
G4-EN12	Significant impacts of activities, products and services on biodiversity in protected areas and areas of high biodiversity value in areas outside of protected areas.	link	7, 8
G4-EN13	Protected or restored habitats.	link	7, 8
G4-EN14	Total species included in the IUCN Red List and national conservation lists with habitats located in areas affected by the organization's operations, by extinction risk level.	link Additional information: In 2016, none of CTEEP enterprises was under implementation or operation that affected species included in IUCN's red list or in national preservation lists.	7, 8
G4-EN15	Direct greenhouse gas emissions (Scope 1).	link	8
G4-EN16	Indirect greenhouse gas emissions from energy acquisition (Scope 2).	link	8
G4-EN17	Other indirect greenhouse gas emissions	The Company does not carry out any periodical monitoring of Scope 3 emissions.
G4-EN23	Total residue weight, listed by disposal type and method.	link	7, 8
G4-EN27	Extensão da mitigação de impactos ambientais de produtos e serviços.	link	7, 8, 9
G4-EN29	Extension of mitigation of environmental impacts of products and services.	In 2016, ISA CTEEP received 27 cases, among notifications and summons, totaling the amount of five hundred and sixteen thousand, five hundred and thirteen Reals and ninety-three centavos (R$ 516,513.93). It also received 29 cases among civil inquiries and official notices with no monetary amounts involved. The matters involve terrain cleaning and safety buffer zone conservation issues, as well as intervention in the local vegetation. ISA CTEEP further received a criminal inquiry to investigate an eventual offense of destruction in permanent preservation areas at Mogi das Cruzes, which is still in progress, in its investigation phase. Preliminary investigations on behalf of the Company indicate that the damages may have been caused by irregular occupants in the area. For 2017, in loco training in the regional units are scheduled, on the importance of complying with the environmental legislation, reinforcing the role of each employee in this process.	8
G4-EN31	Total investments and expenses with environmental protection, listed by type.	link	7, 8, 9
G4-EN32	The percentage of new suppliers selected based on environmental criteria	link	7, 8
G4-EN34	Number of complaints and claims related to environmental impacts recorded, processed, and solved by formal mechanisms.	link	7, 8

SOCIAL PERFORMANCE INDICATORS – LABOR PRACTICES

Id	Indicator	Page (or notes)	Global Compact Principles
G4-LA1	Total number and rates of new employees hired and employee turnover by age bracket, gender, and region.	link
G4-LA5	The percentage of the workforce represented in formal health and safety committees made up of employees from different hierarchical levels, which help monitor and guide health and safety programs at work.	link	3, 4, 5
G4-LA6	Types and rates of lesions, occupational diseases, days lost, absenteeism, and number of work-related deaths, listed by region and gender.	link
G4-LA7	Employees with high incidence or high risk of illnesses related to their occupation.	link
G4-LA8	Topics related to health and safety covered by formal agreements with unions.	link	3, 4, 5
G4-LA9	Average number of training hours per employee, listed by gender and functional category.	link
G4-LA10	Competence management and continued learning programs contributing to the continuity of nearly-retiring employees’ employability.	link
G4-LA11	Percent of collaborators who regularly receive performance and career development analyses, listed by gender and functional category.	link
G4-LA12	Composition of the groups responsible for governance and listing of collaborators by functional category, according to gender, age bracket, minorities, and other diversity indicators.	link
G4-LA14	The percentage of new suppliers selected based on criteria relating to labor practices.	link	4, 5
G4-LA15	Significant negative impacts and potential for labor practices in the supply chain and measures taken in this regard.	link	4, 5
G4-LA16	Complaints and claims related to labor practices on human rights recorded, processed, and solved by formal mechanisms.	In 2016, 160 labor complaints were filed (new lawsuits), 73 of which related to former employees and 87 to outsourced employees. From that total, 54 ended in the same year, and 19 of these were filed by former employees, and 35 involving outsourced employees. Although the total number has dropped as of 2015, from 220 to 160 new lawsuits, the number of complaints originating from of third parties increased, from 82 to 87 cases.

SOCIAL PERFORMANCE INDICATORS – HUMAN RIGHTS

Id	Indicator	Page (or notes)	Global Compact Principles
G4-HR1	The total and percentage of significant investment agreements and contracts that include human rights clauses or that have undergone assessment related to human rights.	link	1, 2, 4, 5
G4-HR2	Total hours of employee training in human rights policies or procedures related to aspects of human rights relevant to the organization's operations, including the percentage of employees trained.	link	1, 2
G4-HR3	Total incidents of discrimination and the corrective measures taken	link	6
G4-HR5	Operations and suppliers identified as at risk of child labor and measures taken to contribute to the effective elimination of child labor.	link	5
G4-HR6	Operations and suppliers identified as having a significant risk of forced or compulsory labor and measures taken to contribute to the elimination of all forms of forced or compulsory labor.	link	4
G4-HR8	Total cases of violation of rights of indigenous and traditional peoples and measures taken in this regard.	link
G4-HR9	Total number and percent of operations submitted for analysis or human right evaluations of impacts related to human rights.	link	1, 2
G4-HR10	Percentage of new suppliers selected based on criteria related to human rights.	link	1, 2
G4-HR11	Actual and potential significant negative impacts on human rights in the supply chain and measures taken in this regard.	link
G4-HR12	Number of complaints and claims related to impacts on human rights recorded, processed, and solved by formal mechanisms.	link	1, 2

SOCIAL PERFORMANCE INDICATORS – SOCIETY

Id	Indicator	Page (or notes)	Global Compact Principles
G4-SO1	Percent of operations with implemented programs of local community engagement, impact evaluation, and local development.	link	1
G4-SO3	Total and percentage operations submitted for risk assessments related to corruption and the significant risks identified.	link	10
G4-SO4	Communication and training policies and anti-corruption procedures.	link	10
G4-SO5	Confirmed cases of corruption and measures taken.	link	10
G4-SO8	Monetary value of significant fines and total number of non-monetary sanctions applied for non-compliance with laws and regulations.	The Company did not receive any significant fine or penalty for non-compliance with the legislation that negatively impacted society. Eventual administrative processes are excluded from this indicator, of labor, social security, and agrarian nature, as well as preparatory procedures or civil public inquiries.
G4-SO9	The percentage of new suppliers selected based on criteria relating to impacts in the society.	link
G4-SO11	Complaints and claims related to impacts on society recorded, processed, and solved by formal mechanisms.	link

SOCIAL PERFORMANCE INDICATORS – PRODUCT LIABILITY

Id	Indicator	Page (or notes)	Global Compact Principles
G4-PR1	Percent of significant product and service categories for which health and safety impacts are evaluated, in search of improvements.	link
G4-PR5	Customer satisfaction survey findings.	link
G4-PR9	Monetary value of significant fines applied for non-compliance with laws and regulations about the supply and use of products and services.	Throughout 2016, ISA CTEEP was notified by ANEEL about the nonconformity of the operation and maintenance of facilities under its concession, amounting to R$ 586,468.43. All assessments, however, have been contested by the Company in administrative proceedings or in courts and remain pending. The amount accrued in 2016 is 26.80% lower, as compared to 2015, when the total fines accrued R$ 801,194.52. Also in 2016, after an analysis by the Electrical Services Surveillance Bureau (Superintendência de Fiscalização dos Serviços de Eletricidade - SFE), the amount of the penalties in Tax Assessment Notice (AI 11/2016 - SFE) was reduced to R$ 188,344.82, per Order 710/2016.

SECTORAL PERFORMANCE INDICATORS

Id	Indicator	Page (or notes)	Global Compact Principles
G4-EU3	Number of residential, industrial, institutional, and commercial consuming units.	link
G4-EU4	Length of transmission lines and aerial and underground distributions, listed by regulatory system.	link
G4-EU6	Form of management to ensure availability and reliability of electricity supply, in the short and long term.	link
G4-EU8	Activities and expenses related to research and development aiming at the reliability of electricity supply and driving sustainable development.	link	9
G4-EU12	Percent of lost transmission and distributions in relation to the total energy provided.	link
G4-EU13	Biodiversity of replacement habitats in relation to the biodiversity of affected areas.	link	7, 8
G4-EU14	Programs and processes ensuring the availability of qualified labor.	link
G4-EU15	Percent of collaborators with the right of retiring over the next 5 or 10 years, listed by functional category and region.	link
G4-EU16	Policies and demands related to the health and safety of collaborators and third-party and outsourced workers.	link
G4-EU17	Days worked by third-party and outsourced workers involved in construction, operating, and maintenance activities.	link
G4-EU18	Percent of third-party and outsourced workers submitted to relevant health and safety training.	link	4, 5
G4-EU19	Stakeholders’ participation in decision-making processes related to energetic planning of infrastructure development.	link
G4-EU20	Displacement impact management approach.	link	1
G4-EU21	Measures for contingency planning, management plan, and disaster/emergency training programs, as well as recovery/restoration plans.	link
G4-EU22	Number of people physically and economically displaced and indemnification, listed by project type.	link	1
G4-EU23	Programs, including those in partnership with government, to improve or maintain access to electricity and consumer service.	link 1, link 2
G4-EU25	Number of accidents and deaths of service users involving company assets, among which court rulings and plea deals, as well as pending court cases related to diseases.	ISA CTEEP recorded four aircraft accidents colliding with its overhead lines in 2016. Unfortunately, three casualties of crew members occurred. There were no non-conformities on behalf of the company that could have influenced the incidents. ISA CTEEP maintains restraining technical and safety standards in place, which include transmission line signaling. Additionally, the company shall work near the aviation clubs, companies of the agricultural industry and other stakeholders, in order to provide guidance to prevent this type of accident.
G4-EU28	Frequency of energy supply interruptions.	link
G4-EU29	Average duration of energy supply interruptions.	link

CALCULATION BASES

	2016	2015
Net Revenue (RL)	7,585,688	1,089,287
Operating Results (OR)	7,256,455	589,700
Gross Payroll (FPB)	234,164	221,533

INTERNAL SOCIAL INDICATORS

	2016	2015
Food	18,293	17,556
Compulsory Social Security Charges	56,256	53,453
Private Pension Plan	1,169	3,075
Health	16,526	19,759
Occupational and safety health	3,422	1,576
Education	829	876
Culture	0	0
Qualification and professional development	2,161	2,300
Day care or day care assistance	363	279
Profit sharing	16,078	14,531
Other	20	5
Total - Internal social indicators	115,117	113,410

EXTERNAL SOCIAL INDICATORS

	2016	2015
Education	599	439
Culture	2,940	1
Health and sanitation	500	440
Sports	0	300
Fighting hunger and promoting food safety	0	0
Other	2	15
Total contributions to society	4,041	1,195
Taxes (excluding social security charges)	3,280,412	184,582
Total	3,284,453	185,777

ENVIRONMENTAL INDICATORS

	2016	2015
Investments related to production/operation of the company	609	3
Investments in external programs and/or projects	0	0
Total environmental investments	609	3
Regarding the establishment of "annual targets" to minimize waste, general consumption in production/operation and increase effectiveness in the use of natural resources, the company:	( X ) no goals (   ) meets from 0 to 50% (   ) meets from 51 to 75% (   ) meets from 76 to 100%	( X ) no goals (   ) meets from 0 to 50% (   ) meets from 51 to 75% (   ) meets from 76 to 100%

WORKFORCE INDICATORS

	2016	2015
No. of employees at the end of the year	1,392	1,404
No. of hirings during the period	107	104
No. of outsourced employees	(data not monitored)	(data not monitored)
No. of interns	64	40
No. of employees above 45 years of age	535	541
No. of women working at the company	156	147
% of management positions held by women	16.49%	0.95%
N° of blacks working at the company	(data not monitored)	(data not monitored)
% of management positions held by black employees	(data not monitored)	(data not monitored)
No. of people with disabilities or special needs	62	64

RELEVANT INFORMATION REGARDING THE PRACTICE OF CORPORATE CITIZENSHIP

	2016	2015
Relation between the highest and lowest remuneration	26	17
Total occupational accidents	6	7
Social and environmental projects developed by the company were defined by:	(   ) Executive Board ( X ) Executive Board and Managements (   ) all employees	(   ) Executive Board ( X ) Executive Board and Managements (   ) all employees
The safety and healthfulness standards in the working environment were defined by:	(   ) Executive Board and Managements (   ) all employees ( X ) all employees + Cipa	( X ) Executive Board and Managements (   ) all employees (   ) all employees + Cipa
Regarding union freedom, the right of collective bargaining and internal representation of employees, the company:	(   ) not involved ( X ) follows ILO standards (   ) encourages and follows ILO	(   ) not involved ( X ) follows ILO standards (   ) encourages and follows ILO
The private pension plan encompasses:	(   ) Executive Board (   ) Executive Board and Managements ( X ) all employees	(   ) Executive Board (   ) Executive Board and Managements ( X ) all employees
Profit sharing contemplates:	(   ) Executive Board (   ) Executive Board and Managements ( X ) all employees	(   ) Executive Board (   ) Executive Board and Managements ( X ) all employees
Regarding supllier selection, the same ethical and social responsibility/environmental standards adopted by the company:	(   ) are not considered ( X ) are suggested (   ) are demanded	(   ) are not considered ( X ) are suggested (   ) are demanded
Regarding the participation of employees in volunteer work programs, the company:	(   ) not involved ( X ) supports (   ) organizes and encourages	(   ) not involved ( X ) supports (   ) organizes and encourages
Total number of consumer complaints and criticism:	In the company: N/A In Procon: N/A In Court: N/A	In the company: N/A In Procon: N/A In Court: N/A
% of complaints and critics solved:	In the company: N/A In Procon: N/A In Court: N/A	In the company: N/A In Procon: N/A In Court: N/A
Total value added to be distributed (In thousand of reais):	8,703,413	1,262,692
Distribution of added amount (DVA):	Government: 39% Employees: 3% Shareholders: 3% Third parties: 2% Held: 54%”	Government: 24% Employees: 24% Shareholders: 27% Third parties: 11% Held: 14%

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Amounts informed, in thousands of Reais.

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Net Revenue, Operating Income, Added Taxes and Values 2017: considers effects of the Electrical System Basic Network Indemnity.

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Internal Social Indicators - Social Security: Due to the Social Security surplus, there was a reduction in the percentage of Definitive Benefits' share. In 2015, the definitive benefits were of 3.5%, and in 2016, 0.5%.

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Internal Social Indicators - Health: reduction of the amount arises from less usage of the benefit by employees and dependents.

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Internal Social Indicators - Occupational Health and Safety: increase justified by the purchase of Personal Protection Equipment, whose inventories was near the date of expiry.

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Internal Social Indicators - Other: internal communications to mobilize donations to the Energia Solidária Program.

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External social indicators - Education: Amigos da Energia - Risk prevention and community relationship program.

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External social indicators - Culture: Sponsorship to the 'Bienal' show, by means of the tax incentive law; social sub-credit funded by the BNDES for the Guri Santa Marcelina program.

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External social indicators - Health: Sponsorship to the Graacc and to the Barretos Cancer Hospital, by means of the tax incentive law.

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External social indicators- Sports: Sponsorship of street races, by means of the tax incentive law was dismissed in 2016.

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External social indicators - Other: Specific donations for social purposes.

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Environmental indicators - Investments related to the Company's production/operation: Aligned with GRI's G4-EN31 indicator - except for the Amigos da Energia program, classified as an external social indicator activity.

GENERAL COORDINATION

Corporate Communication Management – Elizabeth Oliveira Pereira Campos

COORDINATION OF INDICATORS

Strategy and Innovation Management Group - Doralice Fernandes Ferro

EDITORIAL SUPERVISION AND STAFF

Gatopardo Comunicação – Silvia Martinelli

CONSULTANCY OF INDICATORS

Key Associados – Alexandre Hernandez, Felipe Sudré e Luiz Serrano

WORKGROUP - SUSTAINABILITY INDICATORS

Coordination in charge of calculation of indicators, analysis and consolidation - Thais Vido
Americo Romeu Harsanyi
Andrea Freitas Oliveira
Caetano Cezario Neto
Carisa Santos Portela Cristal
Carlos Jose Da Silva Lopes
Carlos Phillipe Kelency
Carlos Ribeiro
Cassio Corazza Da Silva
Celso Sebastiao Cerchiari
Cristina Santos de Souza
Daniel Morais Silva
Daniela Aparecida Vieira
Danilo Belpiede
Denis Carneiro Olmedija
Dirceu Bueno De Camargo
Doralice Fernandes Ferro
Eder Cansi
Elaine Aparecida Guinante Ferreira
Elisangela Trevizan
Elizabeth Oliveira Pereira Campos
Enzo Brigante
Erasmo Fontana
Ester Andrade Do Bomfim Martinez
Everton Paulino dos Santos
Gabriel Geraldo Junqueira
Gianfranco Corradin Jose Jorge Marques
Jose Mario Dionizio
Jose Renato Duda De Assis
Karoline Nieri
Leonardo Gonçalves Rangel
Luana Gonçalves
Ludmila Junqueira Ferreira
Luiz Fernando Prado
Marcus Vinicius Abreu Bernardo
Marta Lawson Cirne Lima
Matheus Schevano Sorvillo
Maureen Teresa Rose Fitzgibbon Pereira
Noemi Oga Tarricone
Norberto Zerbetto Hausmann
Odair Ribeiro Monteiro
Osni Ricardo De Jesus Campos
Patricia Tavares Torres
Pedro Gondim Eorendjian
Pedro Hamilton De Sousa
Rafael Falcao Noda
Rinaldo Pecchio Junior
Silvio Luiz De Souza
Talita Gomes Viana
Talita Rios Nantes Silvino
Thais Araujo Rato Tarelho
Weberson Eduardo Guioto Abreu

GRAPHIC AND ONLINE PROJECT

S+G Comunicação

PICTURES

ISA CTEEP, Depositphotos, Freepik and iStock Collection