Value Creation

Materiality

GRI 102-46 | 102-47

Algar Telecom’s sustainability strategy and the contents of this report are guided by our materiality matrix. It helps us identify and prioritize material issues and impacts involving our business.

Concerning the report, by identifying priority issues, we ensure that the GRI reporting principles are upheld and used in the entire process of determining its contents.

Our materiality matrix is sporadically updated. In 2021, the process of reviewing it comprised benchmarking studies of industry analyses and internal documents, which, along with interviews with Company executives, gave rise to a list of issues that was used in the online consultation with internal and external stakeholders. These stakeholders were selected based on the impacts that we have on each stakeholder or that they have on us in our business, with the “stakeholder-inclusive” principle thus applied.

In addition to the Company’s associates, 100% of whom were contacted for this purpose, shareholders, investors, franchises, business partners, suppliers and regulatory agencies designated by the Company’s areas took part in the online consultation. Specifically with respect to customers, we selected representatives of each business segment. Besides these stakeholders, we also consulted with industry experts and member of the industry media, as well as the Company’s executive board and board of directors, so that the issues chosen to be covered by the document took into consideration the assessments of all relevant stakeholders.

The “Materiality” principle was also included in the process, by prioritizing topics that reflect the most significant economic, environmental and social impacts of the business, taking into consideration the assessments and decisions of all stakeholders consulted.

The cross-referencing of material issues with related indicators contextualizes our sustainability performance and upholds the “Context of Sustainability” principle. To ensure the “Completeness” principle is upheld as well, a GRI management approach indicator was applied to all material issues, ensuring the boundaries and Management’s explanation of the issues are addressed according to the GRI.

2021 Material Issues and Boundaries

Descriptions of impacts related to material issues and our engagement in addressing them are provided in the study of boundaries.

Dimension	Material issue	GRI and SASB disclosures	Impact boundaries for Algar Telecom	Organization’s engagement in addressing the impact	Material stakeholders (Algar Telecom Operations)	Impacts on stakeholders
Environmental	Climate management	Management Approach GRI 103 Emissions GRI 305-1; 305-2; 305-3; 305-5 Economic Performance GRI 201-2 Energy GRI 302-1 Footprint of operations SASB TC-TL-130a.1	Inside and out	Direct and indirect	Shareholders/investors, Community/society, Algar Telecom Operations, and Environment	Algar emits Greenhouse Gases (CO2e), mainly from scope 1 and scope 2. Therefore, the company impacts the environment and the community/society directly. Algar Telecom itself can be impacted indirectly in its corporate and society reputation due to the environmental responsibility the company holds.



Environmental	Waste management	Management approach GRI 103 Waste GRI 306-1; 306-2; 306-3; 306-4; 306-5 End-of-life product management SASB TC- TL-440a.1.	Inside and out	Direct and indirect	Shareholders/investors, Community/society, suppliers and partners, Government/ environmental regulatory agency, Algar Telecom Operations	The inappropriate disposal of hazardous waste has negative impacts on the environment, including pollution of the soil, rivers/springs and the air. For this reason, Algar Telecom ensures its waste disposal is environmentally compliant. The most significant impacts result from the activities of our operation, which can have effects on operating processes and on the signing of agreements with suppliers that are committed to acting in an environmentally compliant manner. Any deviation from the proper management of solid waste will have a negative impact on negotiations with shareholders/investors, as it raises concerns about investments in companies with sustainable practices in place. It also constitutes an environmental offense and adversely impacts the government and environmental agencies, which are involved through administrative proceedings.

Dimension	Material issue	GRI and SASB disclosures	Impact boundaries for Algar Telecom	Organization’s engagement in addressing the impact	Material stakeholders (Algar Telecom Operations)	Impacts on stakeholders
Social	Workers's health and safety	Management approach GRI 103 Customer privacy GRI 403-3;403-4;403-5;403-9	Inside and out	Direct and indirect	Employees, suppliers and partners, Algar Telecom Operations	All the areas of the company are impacted, primarily the operational units, which have more exposure to the occupational risks. This includes our outsources that work in operational activities. The other associates are impacted by welcoming and supporting in emergency situations (illness, workplace accident, among others).
Social	Customer satisfaction and experience	Management approach GRI 103 Customer privacy GRI 418-1	Inside and out	Direct	Shareholders/investors, employees, Community/society, customers, Algar Telecom operations	Providing quality services ensures good customer satisfaction and experience and draws new customers. This improves financial and operational results, generates higher returns for shareholders/investors and ensures demand for suppliers and partners.
Social	Innovation	Management approach GRI 103	Inside and out	Direct and indirect	Shareholders/investors, employees, community/society, customers, suppliers and partners, Algar Telecom operations	The solutions developed by Brain for Algar Telcom impact the Company’s entire value chain: the Station, concerning the internalization of projects, employees, through operating processes, customers, through the solutions, society, through partnerships developed for innovation, and shareholders/investors, through the value created by innovation projects.
Social	Network reliability and system availability	Management approach GRI 103 Managing systemic risks SASB TC-TL-550a.1	Inside and out	Ditect	Shareholders/investors, Community/society, Custommers, Government/ environmental regulatory agency, Algar Telecom Operations	Algar provides public utility and its unavailability can impact the Company and its stakeholders in general. The unavailability of this service and not achieving goals can bring budget pressure to the operations as the number of complaints would be higher than expected. Customers would have their business and activities committed by it. The regulatory agency can fine the Company in case it does not follow any of the quality’s commitment
Social	Digital inclusion	Management approach GRI 103 Indirect economic impacts GRI 203-1	Inside and out	Direct and indirect	Shareholders/investors, employees, community/society, customers, suppliers and government/regulatory agency, Algar Telecom operations	The expansion of broadband services favors digital inclusion, giving the population access to knowledge and information. That supports not only the creation of new job and education opportunities, but also the economic development of communities served, influencing even local partners and the local social and economic development. A sustainable, growing business ensured by efficient governance drives investments and supports continuity of both the business and its entire value chain.
Social	Attraction and Retention	Management approach GRI 103 Employment GRI 401-1; 401-2	Inside and out	Direct	Shareholders/investors, Employees, Customers, Algar Telecom Operations	Attraction and retention of associates brings quality to the relationship within the areas, promoting a positive workplace and leading to a good performance. Having great talents in the company and retaining them impact directly in results and the continuity of our business, which can reduce the turnover and guarantee the Company’s culture being exercised.

Dimension	Material issue	GRI and SASB disclosures	Impact boundaries for Algar Telecom	Organization’s engagement in addressing the impact	Material stakeholders (Algar Telecom Operations)	Impacts on stakeholders
Governance	Economic and financial performance	Management approach GRI 103 Economic performance GRI 201-1	Inside and out	Direct	Shareholders/investors, employees, community/society, customers, suppliers and partners, government/regulatory agency, the environment, Algar Telecom operations	The Company’s economic and financial performance impacts the creation of value by the investments run by the Company and distributed to stakeholders. It influences our ability to sign agreements with suppliers to support our business, which has effects on the quantity and quality of products and technologies we offer our customers. Our number of customers impacts our ability to retain, compensate, promote and develop associates. The growth of the business reflects in the installation, maintenance and extension of underseas cable networks, in the amount of electronic waste generated and in the use of natural resources, which has impacts on the environment. For the community, any expansion or contraction of funding interferes with the social support provided by the Company, both in the form of volunteering initiatives and through NGOs, while having an indirect economic impact. Concerning the government, any failure deviation from or failure to comply with any obligations formally assumed can lead to imposition of pecuniary sanctions arising under and in connection with the Laws.
Governance	Attraction and Retention	Management approach GRI 103 Organizational Profile GRI 102-1 Ethics and Integrity GRI 102-16;102-17 Governance GRI 102-18; 102-20; 102-22; 102-23; 102-24; 102-25; 102-26; 102-32 Anti-corruption GRI 205-1; 205-3	Inside and out	Direct	Shareholders/investors, Employees, Community/society, Custommers, Suppliers and partners, Government/ environmental regulatory agency, Algar Telecom Operations	This topic can add or subtract value, because it shapes the business’s model and it can be related to sanctions being imposed against the Company due to any infringements of anticorruption’s laws and best practices. The management of this topic can reflect on financial and reputational damages to our brand. It also reverberates on the value chain to our stakeholders, suppliers, customers, employees and to our executives because it can reduce or increase the chance on corruption’s conflicts and frauds, among others.
Governance	Compliance with laws and regulations	Management approach GRI 103 Anti-competitive behavior GRI 206-1 Socioeconomic compliance GRI 419-1 Competitive behavior and open Internet SASB TC-TL-520a.1	Inside and out	Direct	Shareholders/investors, government/regulatory agency, Algar Telecom operations	This topic is addressed and used by the Sales area towards developing actions to mitigate the actions of competitors, gathering the information available for selling products and developing competition mitigation actions. Any issues concerning compliance—or the lack thereof—can impact the Company itself and its creation of shareholder/investor value and require the regulatory agency to respond.

During the year we updated our materiality, which resulted in the inclusion of certain topics and the exclusion of others. The table below compares the 2020 and 2021 materiality. The topics included were: Attracting and Retaining Associates, Digital Inclusion and Waste Management (formerly addressed under Climate Governances. The Anti-corruption topic (2020 materiality) was included under Corporate Governance and Integrity.

Material Issues

2020 Materiality	2021 Materiality
Climate governance (emissions, energy and waste)	Climate governance (emissions, energy and waste)
Workers health and safety	Workers health and safety
Customer satisfaction and experience	Customer satisfaction and experience
Customer privacy and cybersecurity	Customer privacy and cybersecurity
Innovation	Innovation
Network reliability and systems availability	Network reliability and systems availability
Compliance with laws and regulations	Compliance with laws and regulations
Economic and financial performance	Economic and financial performance
Fighting corruption	Corporate governance and compliance
	Waste management
	Attracting and retaining associates
	Digital inclusion

External Assurance

We have no policy in place requiring us to put the report through external verification. However, we do have assurance provided by an external independent entity qualified to engage in this activity that can issue an opinion or objective and disinterested conclusions on the report. Click here to check it out.