SUSTAINABILITYREPORT
2012

SUSTAINABILITYREPORT
2012
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Messagefrom thePresident
Innovationand energy
efficiency

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ProfilePeopleCredits

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Sustainability

Messagefrom thePresident

Introduction
Through the pages of this report, the reader is invited to know us better, understandwhat we do and, above all, how we do it.
This publication is a very important communication tool, which shows our visionof the world and describes how we act
to become a leading player on relevant
issues, such as reducing the use of natural
resources and social issues.
Therefore, the report was written foreveryone, be they laymen or technicians.
For all our managers, all our employees,
all our partners, all our shareholders, allcommunities where we operate and foranyone interested in sustainability issues.
Here, you’ll understand how innovation
is able to build and create products withrespect for the environment. Our compressors are designed ​​to consume lessenergy and use the minimum amount of
raw materials.

ProfileManagement

Sustainability

The Embraco Sustainability Report 2011
also shows our internal policies for valuing
people. We present several initiatives toprovide greater safety for employees andto recognize the good work they perform,in addition to actions outside the company, such as support for environmental
education. Our management and governance structure is part of the report, as
well as the commitments made globallyby the signing of protocols.
We have prepared the report based on the
Global Reporting Initiative (GRI), a nongovernmental organization that develops
global reporting guidelines. On adopting
GRI, we are committed to international
concepts, along with other prominentcompanies, who share the same concerns
as we do. GRI indicators are highlighted
in this report and can be easily consulted
by the reader.
With this report, we are disclosing ouractions and improving our transparent
relationship with our public.

Embraco seeksinnovation tocreate productsthat respect theenvironment

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efficiency

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2Messagefrom thePresident
President

ProfileManagement

Sustainability

BrilliantfutureWe offer training, workshops, exchange
opportunities and vacancies for people towork outside their countries of origin. It isan environment that values ​​differencesamong people, among cultures and amongprofessional backgounds. Here, the differences are complementary. Only committed teams, aware of their importance canprepare the company to face the market’s
challenges, balanced with social and environmental demands. I would also like to

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In 2011, Embracocelebrated 40 years of a
trajectory recognized by
its intense dedication toresearch and development.

Message from the President

We are walking with strong steps along
a very promising path. Embraco has abrilliant future ahead. Our plans are veryclear, and we know where we are headed
to. We want to be a company increasingly
global, more innovative and more relevant
to a sustainable planet. We will continue
focusing our attention on developing people and teams that provide technologicaldevelopment as intense as it has always
been in our company.

Innovationand energy
efficiency

emphasize the importance of having people who develop employees and challenge
our partners. They are leaders who make all
the difference in the day to day and in our
strategic plans. Rounding off the scenario
of our commitment to social-environmental
issues is our adhesion to the Global Compact, since 2005.
In 2011, Embraco celebrated its 40th year
anniversary. A trajectory that will continue
to be recognized by the intense dedication
to innovation. I am particularly passionate
for technology, for research and development. Innovation is the reason for Embraco’s existence. It is our strength. Innovation
moves us, and it is its fruit that sets us apartfrom competitors around the world: forexample, we applied for 69​​ patents in 2011,62 of those on inventions. We will continue
researching hard to get to products that are
more efficient, with lower energy consumption and that use fewer raw materials.

We have a work and expansion plan in all
regions, with emphasis on Asia, due to theincreasing number of opportunities thatwill emerge in coming years in that region.
But we must also point out that we haveinvestment in all factories. In 2011, we
began operation of our new factory in
Mexico and expanded production capacity in Slovakia, where Embraco included
a new production line for the high energy
efficient EM compressors. Thus, EM is now
the only compressor manufactured in all
our factories.
I am pleased to have participated in thishistory. I say this not only because I havebeen the company’s president since April
2012, but with the experience of someone
who entered Embraco as an intern 25
years ago. Since then, I have held various
positions, participated in several projects
and worked in different areas. I have met
many people and I can confirm that ourculture of seeking excellence in what wedo, the established values and​​pillars thatguide us are ingrained in every corner.
Our company has very strong governance,
concerned with creating value for theentire chain involved. Our work has aclear objective: to impact all our publics
positively.
Embraco is a unique company, solid andvisionary. We are market leaders but above
this, we want to be leaders of people. We
want to inspire them and motivate themto build a brilliant future, an innovative
future, a sustainable future.
Roberto H. Campos
President of Embraco

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Messagefrom thePresident

PROFILEManagement

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efficiency

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ProfileWho
we areTechnology
is Embraco’s
differential toensure leadershipin its sector

We, from Embraco, lead the world market
in manufacturing hermetic refrigeration
compressors. The products are used inhousehold appliances such as refrigerators, freezers and air-conditioners alongwith industrial machines such as refrigerated counters. Our biggest differential istechnology. Technological development
is what enables us to launch competitive,
modern and high energy efficiency models - a trend of a market in which we are a
global benchmark.
In 2011, we highlight the launch of
the world’s first Bivolt compressor, animmense challenge for the sector. produce
Bivolt refrigeration equipment, it wasnecessary to couple voltage transformers. But these transformers are very large,
which reduces the free space inside thefinal product and also increases manufacturing costs. Our solution to circumventthe problem was to develop a special electronic board. It recognizes the network’s

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voltage and automatically adjusts thevoltage feeding the equipment. In a pioneering manner, the company developed
a compact, complete and commercially
viable solution.
The new model pleased manufacturers, retailers and consumers. Consumers no longer need to worry about buying household
appliances that only work with one voltage
type. And manufacturers and retailers
can measure better inventories and moreaccurately plan distribution logistics (readmore on page20).
Embraco was founded in 1971, in Joinville, Santa Catarina (Brazil), where it
maintains its headquarters. The company
underwent a corporate reorganization in2006 and joined the household appliancemanufacturer Multibrás, forming, in Brazil, Whirlpool SA, controlled by the North
American Whirlpool Corporation, which
until this time had been a shareholder ofboth organizations. Embraco focuses on
the production of compressors, while Multibrás manufactures household appliances.
Since Embraco provides refrigeration solutions to the entire market, it maintains its
management independently, with a strong
shielding policy which ensures the confidentiality of information, protecting its
business and its customers.

Messagefrom thePresident

PROFILEManagement

Sustainability

Embraco stronger
in Mexico
One of the most noteworthy events for
Embraco in 2011 was the start of operations of our new plant, in August, in thecity of Apodaca, in Greater Monterrey(Mexico). The factory employs about 700
people and has production capacity of 2.5
million compressors per year. But thesenumbers should increase even more withnew investments. The expectation is that,
as of 2013, capacity will reach 5 million
units per year, with a total of 1,000 employees, in addition to 500 indirect jobs
generated in the local supply chain.
The factory in Mexico was establishedwithin the concept of sustainability and“green building”. The elevators, ramps andaccesses were built larger than usual, tofacilitate access for people with disabilities. Embraco Mexico also has temperature control systems for water and energy
consumption. Moreover, it uses energyefficient equipment and has natural gas asits main energy source.

The entire construction was designed tovalue natural light and ventilation and adopted the use of thermal-insulated walls.
This set helps the factory reduce energy
consumption for lighting and cooling internal facilities.
With the new unit, Embraco will increase
EM compressor production, a compressor
that caters to the high energy efficiency
niche. Production will attend consumer
demand from Mexico and the UnitedStates.

Factory in Mexico wasdesigned as a “green
building” to meet various
sustainability criteria.

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5Messagefrom thePresident

PROFILEManagement

Globalreach
Embraco has interconnected and complementary units in six countries across threecontinents. In addition to Brazil, where webegan our work, we have staked flags in
China, Slovakia, Italy, United States and
Mexico. The Mexican factory, together
with the expansion of Slovakia’s facilities,
will increase our production capacity of
32 million compressors / year to nearly
35 million compressors / year. In total,
we have five compressor factories, threecomponent factories for compressors andone foundry. Our products are sold in over
80 countries.

Employees by country(data from December 2011)
Brazil

6,901

Italy

624

Slovakia

2,351

China

2,176

United States

59

Total

12,108Sustainability

Innovationand energy
efficiency

People142

6

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MissionOffer innovative solutions for a better
quality of life

5
6

Value
chain

ValuesDiversity with inclusion
Spirit of Winning
Integrity
Respect
Teamwork
Pillars

3
Technology
leadership andinnovation

Operational
excellence

01 Embraco United States
Suwanne, Georgia
Warehouse and commercial office
02 Embraco Mexico
Apodaca, Monterrey, Nuevo Léon
Compressor factory and office
03 Embraco Brazil
Joinville, Santa Catarina
Headquarters, office, compressor factory, electronic
component factory and foundry
Itaiópolis, Santa Catarina
Component and cooling system factory

04 Embraco China
Beijing
Office and compressor factory
QingdaoElectronic component factory
05 Embraco Slovakia
Spisská Nová Ves
Office and compressor factory
06 Embraco Italy
Riva Presso Chieri
Office and compressor factory

Revenue growthand value
creation
PeopleSustainability

Messagefrom thePresident

PROFILEManagement

Sustainability

Innovationand energy
efficiency

People

New Embraco
brand
In 2011, we renewed our brandpositioning, accompanying our business’
evolution. The cornerstone of this new
positioning was the change in the logo,
which brings the concepts of movement
and renewal through its design while atthe same time being simple and modern.
The new positioning reflects our understanding of how Embraco’s leadershipshould be in the market and in relationships with all our publics. It is expressedin four values, which are the base of ourattitude.
In each of them, there is a double
meaning, which converses between
potential and challenge, between present
and future. In this report, the four values ​​permeate all topics, and the reader isinvited to better understand how the new
brand is intrinsic to each step taken by
Embraco, from the daily routine in thefactories to the strategic decisions.

Delivering Intelligent
Performance

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New brand’s
design emphasizes
movement andrenewalShaping the Global Scenario

Delivering Intelligent Performance
involves understanding what users of
our products consider as intelligence andmeeting this expectation. Every day wemust be more and more connected tothe market, offering unique and usefulsolutions.

We are in constant contact with different
regions, countries and cultures, which
gives us a good competitive advantage.
At the same time, it reminds us of our
responsibility as leaders, brings us thepossibility of helping other people, othercompanies and our customers, showing
them what is happening around the world.

Cultivating Passion

Transcending the Future

To form talented teams is to unite people
passionate about what they do and withthe desire to seek more challenges. It’sto develop innovative professionals who
know how to work through the diversity ofpeople and cultures. Cultivating Passion
is to encourage employees to recognize
their leadership role within the company
and society.

After 40 years, we continue being a very
modern company, thanks to actions
and efforts in pursuit of innovation andtechnology. Transcending the future is tolook to the future, act in the future andbe the future, investing in research anddevelopment, anticipating trends andexpanding knowledge.

Messagefrom thePresident

PROFILENew
leadership
Throughout 2011, we prepared for important changes in our management. Changes that started being implemented in thefirst semester of 2012 and that value theexchange of best practices, enhance thecompany’s global nature and accelerate
the progress of cultural diversity.
The main highlight of Embraco’s newphase is the change of Presidency.
João Carlos Brega, who took over aspresident about three years ago, received
another mission. Brega is now presidentof Whirlpool Latin America. In his place
is Roberto Campos, Vice President of
Business and Marketing as well as EECON.
Campos joined Embraco in 1987, having
had management positions in various
areas and also served as vice president of
R&D and Procurement. It’s a move thatstrengthens our technology leadership
expansion strategy allied with market
demands, leveraging our expertisein innovation and further valuing therelationship with customers.

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8Corporate Legal
Director
Bernardo Gallina

Corporate Materials
Director
Andre Vincent

Presidente
Roberto Campos
Vice Presidentof R&D
Marcio Todescat

Vice Presidentof Finance, IT and
Planning
Arthur Azevedo

Assuming the Vice Presidency of Businessand Marketing is Reinaldo Maykot. Since
2009, he had been responsible for the
Directorship of the Domestic Refrigeration
Business, through which he participated in
conducting global business for this sector.
For this position, Embraco promoted the
Italian Pierluigi Zampese.
Henrique Haddad (who served as Embraco’s CFO and Human Resources VP) went
to Whirlpool Latin America. In Haddad’splace, Embraco appointed Arthur Azevedo,
in the role of Vice President of Finance, IT
and Strategic Planning.
The structure also counts on something
new that strengthens Embraco’s cultural
diversity. Ursula Angeli is the first womanVice President of
Operations,Management andSustainability
Lainor Driessen

Vice President of
Business,
Marketing andEECON
Reinaldo Maykot

to assume a vice president position. She
took over the Human Resources area,
which was also previously run by Henrique
Haddad (now the board is composed offive vice-presidencies). Ursula has worked
in the area for over 16 years and sevenof these years with Whirlpool. In the company, she occupied the position of Organizational Development Director.
In relation to cultural diversity, it is worth
mentioning that, once again, Embraco’s
unit in Italy will be led by an Italian, Giuseppe Daresta. He takes over from
Brazilian Emerson Zappone, appointed
to be the new director of Embraco Brazil.
Luis Felipe Dau, previously director of theBrazilian factory, now serves as director of
Embraco China as of May 2012.

Vice Presidentof HR
Ursula Angeli

Another change in management was thedismemberment of Procurement from the
R&D Vice Presidency. The Procurement area
now reports directly to Embraco’s president,
under the leadership of André Vincent.

The year 2011 marked the
beginning of managementchanges that were consolidated in2012, intensifying the company’s
global nature and strengthening
its cultural diversity.

Messagefrom thePresident

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9Intense relationship

Internal
assessments
The Executive Committee, known in Embraco as the
President’s Staff, takes care of Embraco’s economic,
environmental and social planning and oversees that thecompany properly follows adopted international standards,
in addition to internal conduct codes and principles.
Another committee function is to assess the performanceof the organization and the executives through quarterly
reviews. Annually, the company maps and monitors the
key business risks using the Enterprise Risk Management
process, as well as perform mitigation actions.
Working for ethics
Hotline4

Others

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Total

13

Concluded

11

Pending

2 (Brazil)

One of the tools that help us maintain agood relationship with employees is thecommunication channel network that
Embraco makes available in its units. Eachcountry has a specific policy. In Brazil, thecompany has the tool Open Channel, a
network of computers that allow people tosend questions and suggestions directly tothe board of directors. In Italy, the employee
can make suggestions and inquiries directly,with the factory’s communication team. In
Slovakia, the strategy was to put suggestion
boxes and a hotline to receive reports onany environmental issue that may haveoccurred due to the company’s operations.
The Chinese have opted, along with thesuggestion box, for an e-mail that goes
directly to the general manager. In North
America, the intranet also allows employees to express their opinions.
Another relationship channel is the Ethics
Committee. Employees can contact thecommittee, with anonymity guaranteed,through a hotline or e-mail, if they perceivethat concepts of ethics and conduct are
not being followed in some way in the company. In 2011, Embraco concluded 11 contacts, with seven in Brazil, three in Slovakia
and one in Italy.

Dialogue with
employees helps
maintain the good
relationshipMessagefrom thePresident

PROFILEManagement

Sustainability

Innovationand energy
efficiency

Time
Line
1970

Technology
and innovation
have marked
our operation
since 1971

Empresa Brasileira de Compressores S.A.
(Embraco) is founded in 1971 in Joinville,
Santa Catarina, Brazil. Operations begin in
1974, with the production of the first compressors. Exports begin shortly thereafter.
The compressors begin to be sold to Peru
in 1977 and then to the United States
and Canada. It is the first step in the company’s journey to becoming global.

1980

The decade is marked by the development of a technology and innovation culture within Embraco. The company signs,
in 1982, the first technical cooperationagreement with the Federal University of
Santa Catarina. The following year, establishes the Research & Development area.
The practical result was evident in 1987
with the arrival of the first compressor tothe market with 100% Embraco technology. In the same year, the company demon-

People

Value
chain

strates its concern for the environment by
participating in the UN’s Montreal Protocol
and commits itself to creating alternatives
to eliminate the use of CFC gas.

1990

At the end of the decade, Embraco begins
producing 21.7 million compressors per
year, a figure achieved thanks to international expansion. In 1994, we acquire afactory in Italy. We then create an industrial joint venture in China (the first Brazilian company in the country). In 1998, it
is time for Slovakia to receive Embraco’s
operations. The decade is also rich in sustainability issues. We receive ISO 9.001
certification, begin producing compressors for alternative gases to CFC, launch
the Embraco VCC, today a high energy
efficiency model, and also create the Embraco Ecology Award in Brazil.

2000

In 2006, we begin operating in Brazil under the corporate name Whirlpool SA anddeveloped ourselves within the conceptof sustainability and continuous improvement. We sign the UN’s Global Compact
in 2005 and in the following year, theplants from Brazil, Italy and Slovakia receive QC 80.000 certification which aims

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to eliminate harmful substances from theenvironment. In 2007, Embraco Snowflakeis certified by ISO 14.001. Another notable
event was the inauguration, in 2003, of ourelectronics unit, Embraco Electronic Controls (EECON), focused on manufacturing
the compressor’s electronic components.
Today, EECON also has a factory in China.

2010

In 2010, we launch another revolutionary
product, the microcompressor, which willallow the development of portable cold. In
2011, we begin the operation of our plantin Mexico within the most demanding
standards of sustainability and eco-efficiency, as well as the expansion of Slovakia’s plant. We also define Embraco’s new
brand with four values. The new identity
makes our desire and challenge to be anincreasingly more global company evenmore evident.

Messagefrom thePresident

PROFILEManagement

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11Awards2011→→China Home Appliances Exposition↳↳- EMT (R290) Series: Low Carbon
Emission Pioneer Award↳↳Embraco VCC:
Technology Innovation Award↳↳EMD Series: Golden Heart Award→→Embraco was among the 10 mostinnovative companies of Brazil↳↳Época Negócios magazine, inpartnership with ATKearney consulting→→International Exhibition and Conference
for Power Electronics, Intelligent Motion
and Power Quality (PCIM) – Invitation toparticipate in the board→→Guia Exame de Sustentabilidade(Sustainability Guide):one of 20
sustainability model-companies of Brazil→→Via Bona National Award, from
Pontis Foundation, in Slovakia:↳↳Main prize for long term partnershipwith local hospital.
↳↳Honorable recognition forresponsability towards employees.

We were voted
one of 20
model-companies
by Exame
Sustainability Guide

Messagefrom thePresident

ProfileMANAGEMENT

Sustainability

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efficiency

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12Management

Our way ofworking

EWM increases
the synergy
necessary to offer
intelligent solutions

How can we remain leaders in such acompetitive market? How can we become
increasingly connected with the demandsof our customers, consumers and society
as a whole? These questions need to be
asked daily by all our employees. The
importance of this reflection is such that
it was inserted into the new brand, under
the phrase Delivering Intelligent Performance. It is a value that expresses ourdesire to discover and offer intelligent andinnovative solutions for all our publics. But
how to do this?
The path we have adopted to put thisthought into practice is applying the
Embraco Way of Management (EWM),
the Embraco Management Model. EWM
demonstrates our way to manage thecompany. It is a concept that directs thecompany to become each day more integrated with different areas that interact
with each other. The goal is to act in a
united and cohesive manner throughprocess improvement and use of methods and management tools. In practice,
EWM increases the internal synergy anddefines how the areas should act together,seeking to enhance efficiency and improvecustomer service.
In 2011, we went through an important
experience to consolidate management
by process. An example is the Demand
Management process, implemented in2011, which is part of the Supply Chain
Management macroprocess (see list of
macroprocesses below). Demand Management allows long-term demand (which
varies from four to 18 months) to beplanned with more precision, thanks tointegrated collaboration between different areas. Sales, market and statisticalanalysis sectors provide information
which, analyzed interconnectedly and in
a contextualized manner, create a more
appropriate and efficient planning.

Messagefrom thePresident

ProfileMANAGEMENT

Sustainability

Throughout the year, we also conduct training as part of the integration portfolio in all
our units. They are trainings to further consolidate the EWM concept among our employees and managers. Another highlight isthe development of Routine Managementin Manufacturing (read more on page 34).
To maintain EWM always alive and dynamic, it is necessary to assess, fromtime to time, how we are evolving in relation to our management practices. This
reflection occurs annually and is a great
learning opportunity. In 2011, the assessment was conducted in two stages andwas based on the criteria of the National
Quality Award (NQA) and on internal requirements, established by Embraco itself.
The first step assessed our “Processes”, tounderstand the evolution of management
practices. Together with an external consultant, we conducted several workshops
and interviews with various employees
from different areas of the company.

EWM is assessedfrequently tokeep itself aliveand dynamic

In conversations, we asked their opinion
on the practical application of seven criteria (leadership, strategies and plans,customers, society, information andknowledge, people, processes). The answers, jointly with the analysis of otherexternal sources, such as awards and recognitions received by the company, help

Innovationand energy
efficiency

PeopleIdentifying improvement
opportunities through theunits’ assessments helps
Embraco make decisions
to develop the team of
directors and work focusedon its process management.

us to understand how management canhelp improve our day to day, what are thestrengths and where are the opportunities
for improvement.
One of the highlights pointed out by theunits’ assessment in 2011 is Social Development, which evolved 25% over the previous year. On the other hand, cooperation
between the areas appeared as one item
to improve. Identification of this improvement opportunity helped Embraco makethe decision to develop the team of directors and work more focused on management by process. Thereby, we disseminate
the culture that the professionals work for
the whole company, not just one department, and encourage areas to act andspeak more intensely.

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In the 2011 assessment, the corporate sector
stood out for the following items:→→awareness of risk management;→→succession plan;→→management by processes and standardization;→→refinement and standardization of indicator management;→→Embraco brand repositioning and application of values​​;→→ cause and effect relationship between actions andresults obtained.

The assessment’s second stage is called“Results”. At this time, we analyze thebehavior of indicators that encompass theentire company. One example is the financial information, such as revenue, costs
and cash flow. With the survey in hand,
we compare the results achieved with thestipulated targets and the results obtainedby other companies in the world market.
In 2011, the assessment’s results in thetwo steps (Processes and Results) placed
Embraco at maturity level 6. This is thescore range of companies considered
leaders in their field of operation. For
2012, our goal is to climb one more stepand reach level 7, being at the same levelof companies honored by national awards
such as NQA

Messagefrom thePresident

ProfileMANAGEMENT

Sustainability

Integrated company
To further enhance our management andprepare ourselves for global challenges,
we are developing management by process through the Evolution Project. The
idea is to identify and redesign internal
processes, to bring us more agility andspeed. We now see the company as something more integrated, removing the barriers which divide its areas.

Until 2011, 249 process models were designed and validated. Another 498 are in
the design or assessment stage. The mappings are developed according to Embraco’s strategic priorities. In 2012, we haveapproximately 18 projects in progress forprocess review and creation.

In this way, information and knowledge
circulate more quickly, greatly increasing
our efficiency. A marketing process, forexample, counts on the participation andwork of employees from various sectors,
units and countries, such as Innovation,
Human Resources and Supply Chain.
Everyone contributes in some way to help
the process.

Lean
Thinking

Until 2011, the following
processes have been worked:→→Supply Chain Management;→→Innovation Management;→→Marketing & Customer
Management;→→People Management;→→Finance Management.

Lean Thinking is the philosophy that guides
our efforts to be an increasingly more efficient company. Lean means light, streamlined. Our idea is to make Embraco exactly
like this: no fat, no waste. In practice, thismeans an obsession for details, which
together result in great achievements. We
seek to avoid unnecessary transport, always maintain production adjusted to consumption and take care of equipment so it
operates in the best way possible.

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In EECON Qingdao,
the team gathers
in kaizen to address
work safety

But how can we detect these small details
that make the difference? Our answer tothis question lies in the Value Stream Map,a semi-annual planning that describes
improvement opportunities in units, prioritizing the execution of each one of them.
With map in hand, managers convene
meetings to take care of each opportunity.
They are improvements in several areas:
safety, standardized work and supply system. These meetings or groups that fightagainst waste are called gemba kaizen(continuous improvement, in Japanese).
The kaizens also need to be light and lean.
They receive a single mission and take, on
average, one week to find a solution to theopportunity raised.

Kaizenin numbers
China: 69 kaizens (34% related to standardized
work to increase productivity)
Slovakia: 79 kaizens
Italy: 63 kaizens (39% related to TPM to increase
equipment efficiency)
Brazil: 227 kaizens

14

Messagefrom thePresident

ProfileMANAGEMENT

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Productivity increase(compressors produced per hour)Standardizationof operations
Kaizens had an important year in
our strategy of consolidating our position
as a global company. In 2011, an extensive project was carried out, aiming tostandardize the operating procedures inall production lines. An example isthe inspection checklist of basic conditions (operator’s procedure to ensure
correct work).

Kaizens are afundamental
part of our global
strategy

By following a list of pre-established actions, employees confirm if the correctmaterial is available and if the equipment
is functioning properly. The result is greater safety and accuracy. In addition, standardization perfected other mechanisms,
such as workstation documents, supervi-

sors’ management tools and formalizationof critical analysis process forums.
Thanks to the standardization strategy,
we can optimize the preventive inspection control, detect problems early andact quickly to correct the deviations in theprocess. Simplification of standards also
increases synergy and alignment among
the factories, making our manufacturing
even more efficient. The project is in thephase of certifying the pilot areas - which
serve as models for expansion into otherareas - but we’ve already noticed great
benefits in the day to day, such as waste
reduction, increased reliability and betterrisk control.

Factory(comparison of %evolution - 2010 and 2011)

Brazil3.8%

China*

7.1%

Italy

10.7%

Slovakia**

7.2%* We did not consider the EM 3.4 line module.
** We did not consider the EM line, implemented in 2011.

The results of the various measures wehave taken throughout the year can also
be expressed in improved efficiency. We
recorded an increase of more than 3.5%of our productivity rate, when compared
to 2010.

Messagefrom thePresident

ProfileMANAGEMENT

Sustainability

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Improvement
circles
EfficientroutineThroughout 2011, we began the manufacturing routine management process.
It is a process that seeks to standardize
the manufacturing management activities in all plants to reduce the number of
failures during production. Consequently,
we have improved our efficiency andhave gained more predictability in the
results. Through routine management,
we have reduced the number of failures
by 30% in the production processes.
The project was put into practice withthe creation of committees in each of
the plants. The committees are interdisciplinary, composed of professionals
from various areas, who map, identify
improvement opportunities, guide andassist the operation team in the implementation and correct use of standards.
In 2011, we were able to integrate theroutine management standardization toother existing initiatives in Embraco, suchas autonomous maintenance, help chain,labor certification and BBS (read moreon page34). Another important example
is the integration of routine management to our quality control program. We
developed an inspection checklist of 5S,
safety, quality, production and maintenance aspects which indicate correct
conditions for operation. Ensuring these
conditions bring greater efficiency andbetter results.

Continuous improvement within Embraco also has the support of volunteers
who make up the Quality Control Circles(QCC). The groups concentrate on finding opportunities to improve the routineof factories and cut waste. These can be
simple details, such as reducing water
consumption when washing hands, oreven develop equipment that make thework more efficient.
To encourage employee participation,
Embraco offers gifts, awards, recognitions
and even trips to events to exchange
information and experiences with QCCs
from other cities, states and companies.
Until publication of this report 427 QCC
teams have been created in Brazil, involving 2,612 people. With great dedication,
the volunteers were able to develop 3,862
projects throughout the year.
One of the highlights among the projects
developed by the QCC in Brazil, in 2011,
was the reduction of water consumption

in the process used in the Midis compressors’ paint booths. In this process, every
15 minutes the used water is changed,
which leads to a very high consumptionof the liquid.

3,862

improvement projects were createdthrough Quality Control Circles, involving
2,612 volunteers.

16Messagefrom thePresident

ProfileMANAGEMENT

Quality Control Circles (QCC)
encourage professionals
to find solutions, fromthe simplest to the mostcomplex, with the goal to
improve factory routines,
increase efficiency andcut wastes.

Innovationand energy
efficiency

People

Value
chain

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Solution isin the detail
In our factory in China, we faced
a problem of refrigerant leakage
in one of our machines. Each leakrepresented more than 14 liters of
the fluid, causing environmental
and financial cost. The QCC teamdiscovered that the problem wasin the fragility of one of the parts:a small pin that broke easily. So,
the circle redesigned the pin sothat its replacement is faster andmore agile. The idea is simple, butwith excellent results. Now, themaintenance time was reduced,
and the leaks have been eliminated,
increasing production efficiency.

The team realized that one reason for using so much water was the rinse pressure
nozzles, the last step before the productgoes to the drying oven. Therefore, the goal
was to reduce the number of nozzles. Aftermany tests, they realized that the painting
process continues to work well if only two
nozzles were used, and not six, as originally.
Furthermore, the team installed a float
in one of the painting process’ tanks andchanged the drain system. The initiative
reduced water consumption from 326.69
cubic meters to 141.3 cubic meters permonth, a 57% savings. The amount of water saved in one year is sufficient to supply
185 houses in Joinville for one month.

Sustainability

Employees’
contribution
ensures quality in
our processes

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Innovationand energy
efficiency

People

Value
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Sustainability

OurvisionEfficiency
contributed toreducing energy
consumption

When we talk about sustainability in
Embraco, we immediately think about
our high energy-efficiency compressors.
With technology and innovation, wedevelop products that help reduce energy
consumption. Besides the reduction in
the electric bill’s value, which can be seen
every month, our products have significant
impact in environmental terms.
Today, one of the planet’s biggest
challenges is to find new energy sources
to meet the demand of a populationof 7 billion people. In June 2012,
for example, the UN launched theSustainable Energy for All pact, signedby Embraco, which through the efforts
of various organizations, businesses andgovernments seek to ensure access to
reduced impact energy for all. The world
will only succeed in this endeavor if we
can use energy rationally and intelligently.
This is where Embraco’s work is evenmore valued. The refrigeration sector

is responsible for 15% of total energy
consumption in the world. More efficientcompressors, refrigerators, freezers
and refrigerated counters collaborate
to the planet’s health and avoid
unnecessary energy use. This efficiency
can be expressed in numbers: if all the
refrigerators in Brazil were equippedwith Fullmotion technology, the energy
savings would be enough to supply every
household in the city of São Paulo foralmost six months.

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Reducing energy
consumption is one of
the greatest challenges
facing humanity. Embraco
operates in this area, offering
compressors with highenergy efficiency, resulting
in less CO2 emissions andsavings on the electricity bill.

sUSTAINABILITY

Innovationand energy
efficiency

Green factories
Sustainability is one of the five pillars
that shape the way we work, since it isinherent to our internal manufacturing processes. Day by day, we seek toreshape the procedures in our units tosave water, energy and other raw materials. To combat any wasted droplet, wequalify and train people to identify thesesmall opportunities for improvement andquickly forward a solution.
In 2011, however, we were not able toachieve our goal of reducing water andenergy, which was set at 10%. In contrast,
the rate increased by 3%. There are somereasons that explain this performance.
The first cause is connected to themeasurement criterion. In Embraco,water and energy consumption aremeasured by manufactured compressor.
With the 2011 crisis, there was a
slowdown in production. The problem isthat, to keep the plant operating, there
is a minimum energy consumption.
In practice, this means that the more
we produce, the lower our energy
consumption per compressor. However,when production falls, consumption per
manufactured unit rises.

People

Value
chain

Another reason for not having reached
the goal is that in the first years of
implementing processes to reduce waterand energy consumption we achieved
great success with simple actions such as
solving small leaks in hoses or orientating
employees to use some equipment
appropriately. After this initial phaseof minor adjustments, great results
are only achieved with large structuralmodifications, like changing equipment infactories. These major investments will bemade only in the next years.
On the other hand, we can mention aninteresting initiative. Our unit in Italy
implemented a system for heating waterusing solar energy. The installation allows
the use of hot water in the new dining halland administration area’s bathrooms. Thisway, we reinforce our goal of developing
renewable energy sources.
Energy consumption per compressor
Brazil9.4 kwh/compressor

China

7.4 kwh/compressor

Italy

12.4 kwh/compressor

Slovakia

18.4 kwh/compressor

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Value chain
and communities
We also advanced greatly in the mission
to bring sustainability practices to ourentire value chain. We conducted workshops, lectures and actions with pedagogical features for our employees, customers
and suppliers. In 2011, 2,028 people
participated in educational activities, with
1,103 in China alone.
Another of Embraco’s area of activity issocial investments - initiatives together
with communities to promote education,
health and environment. An example is
the Embraco Global Volunteer Day (readmore on page 33). In 2011, our social
investment reached more than 28,000
people around the world.

Messagefrom thePresident

ProfilesUSTAINABILITYManagement

In Italy, the inventory went beyond these twoitems and also addressed scope 3. This fieldrefers to gas emissions that occur during
the work on logistics, such as raw materialtransport, travel and product distribution.

People

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Improvements
in processes

Gas emission
transparency
The fight against global warming has been
gaining significance in Embraco’s work. In
2011, we conducted an inventory of ourgas emissions relative to 2010. The units
in Brazil and Italy participated in the pilot
survey. In Brazil, the studies covered theso-called scope 1 (direct emissions suchas fuel and gas consumption used in thefactories’ air-conditioning, for example)
and scope 2 (indirect emissions, which are
the energy and heat purchased from autility or another company).

Innovationand energy
efficiency

At the end of 2011, we studied the inclusion of sustainability criteria in the Lean
Manufacturing actions, a program basedon the kaizen concept (actions that searchfor continuous improvement in the company’s internal processes). In this way, weawaken the concern of teams to important elements in the environmental andsocial spheres. The teams get together toimprove the productivity of any process,In 2012, the inventory will be performed
again. The big news is that Embraco has
already committed to disseminate the results in a public database, the Brazil GHG
Protocol. As a result, anyone interested
can easily access them.
Inventory total amount (t CO2 eq)
BrazilItaly

Scope 1

13,305

3,784

Scope 2

9,444

6,217

Total

22,74910,001

Kaizens are actions
developed with the goalof continually improving
Embraco’s internal
processes. Aspects suchas the reduction of waterand energy consumption,
rational use of raw materials
and CO2 emissions began
to be observed by theseteams in 2011.

more carefully consider and report issues
such as water reuse, reduction of energy
consumption, rational use of raw materials or even CO2 emission.
The benefit to people also integrates Lean
thinking. There are kaizens, for example,
that seek to develop improvements inworkplace safety procedures and analyze
the possibilities of disabled people to occupy work posts in the factories. Planning
to include sustainability items on the Lean
worksheet occurred in 2011. The implementation began shortly thereafter, inFebruary 2012.

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sUSTAINABILITY

Innovationand energy
efficiency

Less waste,
less discard

People

Value
chain

In 2011, we perfected a very important initiative, whichhelps us reduce dependence on rare metals or those withfew natural resources. We are producing more compressors
using aluminum wires, instead of copper. In China, forexample, aluminum reserves are estimated at 3.75 billion
tons, while copper reserves are only 0.08 billion.
Aluminum is also ideal for recycling. About 75% of thismaterial used in the world is reused in various stages ofthe production cycle. Recycling of aluminum, moreover, requires only 5% of the energy consumed in the first stage ofmetal production. In the case of copper, the index is 15%.
Check out the percentages of compressors with aluminum
wire that will be sold in our factories in 2012:35%

Consolidated

In 2011, we began to train our operators,
transforming them into leak identifiers, sothey can report them quickly. After identification, the operators themselves are able
to make simpler repairs. If the problem
persists or is technically complicated, theemployee is instructed to communicate
the improvement opportunity to the specialized maintenance team, through the
tag system (see more on page 19).

21

New raw material

Operators
are trained to
identify leaks

Within the sustainability actions, we canalso cite the identification of oil leaks
in our factories. It is common that themachines, over time, have little problems
that result in oil leakage. Until 2010, thisliquid was collected and discarded in aproper and environmentally responsible
manner. Now we are taking a step further.
Our objective is to avoid, to the maximum,
these leaks and, consequently, the discard.

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100%

Mexico45%

Brazil

30%

China

40%

Italy
Slovakia

20%

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sUSTAINABILITY

Innovationand energy
efficiency

Packagingreuses
A very important initiative and integrated
into our work in 2011 is the reuse of
packaging (wooden pallet) that protects
the compressors manufactured in
Brazil. We developed a project so thatthe material is not wasted or discarded
improperly. For this, we work together withthree Brazilian customers. They return
the packaging to us, and we become
responsible for reusing them in the best
possible manner. For the idea to be put
into practice, we created different ways sothat each customer can participate, as in
the following methods.
1 Customer purchases Embraco
compressors - removes product frompackaging - forwards wooden pallets
back to Embraco - Embraco selects thematerial for reuse.

2C ustomer purchases Embraco
compressors - removes product frompackaging - contacts Embraco, whogoes to the customer and picks up thepallets - Embraco selects the material
for reuse.
3C ustomer purchases Embraco
compressors - removes product frompackaging - forwards wooden pallets
to one of our suppliers - the supplierselects material and forwards for reuse.
With this initiative, we have achieved
excellent environmental gains. In threemonths, we have reduced by 19% theneed for new pallets.

People

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Priority
themesin EECON
In 2011, we formulated the RelevanceMatrix in the electronics unit, EECON. It isa study that identifies what are the mostimportant themes for the business unit
and what are the essential themes forsociety. By crossing this information, wemanaged to list the major priorities for
EECON, in other words, the issues relevant
to both our business as well as to society.
The themes chosen are eco-efficiency inmanufacturing, sustainability education(internal), new business with sustainability
and communication for sustainability.

objectives in mind. The expectation isthat, among other benefits, RelevanceMatrix development will provide reduction
in electrical energy consumption
and increase scrap reuse (plastic, screw
and cable).

The Relevance Matrix was developed
during a training in EECON, which wasattended by all managers. As a resultof the training, we were able to appoint
some people to take special care ofeach issue. In another step, the priority
themes were broken down into several
specific actions, having more specific

Relevant issues study
identified items related tothe operations’ sustainability
as priorities for EECON’s
operation.

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Sonho de Criança (Child’s Dream)
Early Childhood Education Center

Childrencommitted toecology
We promote every year the Embraco
Ecology Award. In 2011, the event
celebrated its 19th edition in Brazil, andhas already held three editions in Slovakia.
In Europe, last year alone, over 2000
school children who received the award
were benefited.

The most outstanding award winner was
the ZŠ Povýšenia sv. kríža school, forthe project “Our natural garden.” Withlots of creativity, the children created agarden with paths, trees and nursery ofplants. Not to mention the stable and theecosystem, enriched by the lake, little
river, field, and shrubbery.

Embraco Ecology
Award reachedits 19th edition in
Brazil in 2011

In Brazil, the award celebrates 20 years in
2012, and in these decades, has sowed
and reaped excellent results. Check out
the following testimonials from someparticipants.

“Since 2009 we have implemented the organic vegetablegarden project. The idea led to the development of several
other environmental projects, such as the worm farm,composting, capturing rain water, garden and orchard,which involved the entire school community. We can noticethe change in the children’s eating habits, participation
and appreciation of the school community in relation toprojects. In addition, we highlight the many opportunities
to participate in events involving children, teachers anddirectors, who feel welcomed by the program.”
Plácido Olímpio de Oliveira Basic Education School“We believe that all motivation in relation to ecology, suchas the preservation of the environment is of paramountimportance in the lives of our students and our planet.
With the award, teachers and students effectively engage
themselves. We notice that there have already beensome changes in posture and, especially, a greater search
for information leading to scientific knowledge andecological awareness.”

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Innovationand energy
efficiency

People

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chain

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How Embraco seeks to contribute to slowing
global warming

Naturalrefrigerants
Embraco sees the use of natural refrigerants as an important way to reduce greenhouse gas emissions that impact global
warming. To disseminate the use of theserefrigerants, the company discloses thebenefits in major events such as businesstrade shows and scientific conferences,and in customer visits, answering questions and responding to inquiries on thesubject. The great advantage of naturalrefrigerants is low Greenhouse Warming
Potential (GWP), measurement to express the contribution to global warmingof gases such as R600a (isobutane), inhousehold equipment, and R290 (propane), in commercial systems.
These gases are already greatly adopted
in Europe and China, and since the endof last year, had their use regulated in

the United States also. However, the new
North American legislation poses somechallenges. Isobutane refrigerators, forexample, can only have up to 57 gramsof the gas, slightly more than one thirdof the maximum amount approved inEurope. With regard to propane, theUnited States also limited the amountin vending machines - one of the mostimportant applications in the country’scommercial refrigeration market.

A practical example was propane adoption
in the 26-cubic-foot so-called Glass Door
Merchandiser, equivalent to about 736
liters. The devices are those refrigeratorswith a transparent glass door, widelyused in markets and convenience stores.
We used propane in place of R134a andobtained good results. We reduced energy
use by almost a quarter, decreasing CO2
emissions. Over 10 years, each device will
avoind emitting 1,709 tons of gas into
the atmosphere. The same concept wasapplied to other equipment, such as the
10-cubic-foot Glass Door Merchandiser,
about 283 liters, and Ice Cream Chest
Freezers. In both cases, we emitted less
CO2 and improved energy efficiency.

Despite the limitations, Embraco alreadyoffers solutions to meet the North American market’s specificities. Even before thelaw was passed, the company had signed
partnerships with two major players in
the market and developed products withpropane according to the new rules.

Embraco, for being one of the pioneers in
the use of natural refrigerants, and also
one of the forerunners in the eliminationof CFC use, is a world reference in the
sector and aligns this strategy with thedevelopment policy for high energy
efficiency products.

→→Using less gas in the compressors’ operation alsocollaborates with the environment. Embraco can reduce
the amount of refrigerant by innovating and developing
models without lubricant oil. Besides avoiding the useof gases, the oil-free model generates less waste in
the environment.
→→We develop the highest energy efficiency products.
The more efficient our products, the less indirect CO2
emissions generated by the production of energy tooperate the refrigeration systems. According to the
Total Equivalent Warming Impact (TEWI) index, 80%of the sector’s impact on global warming comes fromthe generation of energy used in the operation ofrefrigeration equipment.

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People

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Innovation and energy efficiency

25

GRI content

that will soon be converted into even more
efficient and sustainable products thanthose offered today.

Our vocation is
to innovate

Embraco invests,
annually, 3% of
its revenues in
research

When we stamp on our new brand thevalue Shaping the Global Scenario, weare expressing that we understand what
our mission is as leaders in the hermetic
compressor segment for refrigeration
and we know that we influence themarket’s development worldwide. The
great differential for having achieved thisposition is the dedication to technology
and innovation, which together form oneof Embraco’s pillars. Each year, we launch
models with high efficiency and with lower
energy consumption.
The importance of innovation for
Embraco has direct impact on economic
results. In 2011, close to 50% of thecompany’s revenues came from thecommercialization of products launchedsince 2007. The innovation cycle has
already shown that it has vigor for the
next years. Last year alone, we registered
69 patent applications, including 62
invention applications. These are ideas

To achieve our goals in innovation, we
have invested, every year, about 3% of
the company’s net revenue in funding
research and development. In addition,
we have a team of 500 professionals
in different countries, integrating
the Research & Development area.
Another way to stimulate innovation in
the company is called the Y career. In
this career model, the company offers
differentiated salary opportunities forresearchers - remuneration compared to
management positions. The goal in thesecases is to encourage the good researcher
to continue working within his expertise,rather than opt for an administrative
career in search of better compensation.

Our R&D teamis distributed in five countries
Brazil290

Slovakia

95

China

77

Mexico

10

Italy

28

Total

500

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chain

Revolution in
the compressor
marketIn 2011, we launched a revolutionary
product, capable of solving a problem
that seemed unsolvable until then. It’s
the Bivolt compressor, the world’s firsthermetic compressor for household
refrigeration with single-phase induction
motor for use in 127V or 220V without
need of applying a voltage transformer.
Although the market is full of productsthat work in more than one voltage, like
televisions and stereo equipment, there
was nothing like it in the refrigerationindustry. The difficulty occurred because
it was necessary to couple largetransformers in refrigerators, freezers
or refrigerated counters. Except that
attempts were thwarted by the increase in
manufacturing costs and space that thetransformer occupied in the final product,
making the concept unfeasible. But

Embraco researched, innovated and founda very practical solution.
We developed a compressor containing
an electronic board that recognizes thevoltage which feeds the product andautomatically adjusts the voltage, without
risks for the system. The first Bivolt
compressors reached the Brazilian market
in December 2011. In Brazil, the power
grid has two voltages: 127v and 220v.
The innovation brings great benefits tousers, manufacturers and salespeople.
Users can choose the equipment withoutbothering to check the voltage. And,the new model allows manufacturers
and retailers to more easily manage
inventories and distribution logistics forregions with different voltages.

Innovation brings
benefits to users,
salespeople andmanufacturers

Bivolt compressor launchedby Embraco is the firstin the world to operatewith two different voltages,
eliminating the need forthe transformer.

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Messagefrom thePresident

BeyondourmarketLeadership in the hermetic compressor market for refrigeration brings us anenormous challenge: how can we further
expand our business, if we already havea significant market share in the world?
The question stimulated us to strengthen
the team and processes of the New Profit
Pools (NPP) area in 2011. This area’s mission is to discover which paths Embraco
could use their expertise (making cold)and further expand the market segment,with differentiated business opportunities.
In general, it means breaking new niches
that go beyond the traditional. For this,NPP works with the dimensions called extend the core, beyond the core and expand
beyond the core.
They are concepts that lead us to expand
knowledge and develop business segments still nonexistent - an initiative vigorously expressed in our new brand: it is theProfileManagement

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INNOVATIONAND ENERGYEFFICIENCY

People

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27

Oil Freevalue Transcending the Future. Although
represented by the NPP area, this initiative
includes the participation and involvementof all Embraco employees, in the conception and/or implementation of new value
creation sources for the business.
The most practical and emblematic caseto explain the idea was the microcompressor. A small portable model, which has thepotential to be used in various applications, such as cooling race car drivers’ or
firefighters’ clothes. The product takes our
expertise beyond the market for refrigerators, freezers and refrigerated counters.
NPP’s objective is to identify other opportunities for products and services, withapplications different from the ones wealready know.
The new area is under the umbrella of theVice Presidency of Business and Marketing. Thus, it is in contact with the market
demands while at the same time acting
in strong partnership with the R&D staff.
After all, technology and innovation are
great allies for the success of this process.

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Linear Oil Free is
one of Embraco’s
most innovative
projects

One of Embraco’s most innovative projects enters its final stages and is about
to reach the consumer market. In 2011,
we began in Brazil pilot-manufacturing
the Linear Oil Free, the first compressor
in the world that eliminates the use of
lubricant oil. This new feature brings direct
benefits to customers. The absence ofoil, combined with the model’s compact
size, means the compressor takes up lessspace in refrigerators and freezers andcan also be placed in any position, either
horizontally or vertically. Today, to prevent
oil leakage, the compressor must always
be placed vertically. The novelty will enable our customers to make better use of
equipment space and create new functionalities, besides, of course, lower energy
consumption.
Developed in partnership with Fisher &Paykel, from New Zealand, and North
American Whirlpool Corporation, theproject totals five years of research, with82 registered patents and investments of
R$ 20 million.

Messagefrom thePresident

Fullmotion
To bring Embraco closer to our final consumers, we launched our new brand for thevariable speed technology. From now on,
the Embraco VCC will now be called Embraco Fullmotion, with its own name andidentity, further highlighting our technology. The Embraco Fullmotion technology
was launched in 1998 and remains thecompany’s main energy efficiency product.
On average, the cooling system’s energy
consumption can drop by up to 40%,
compared to equipment which adopts
traditional compressors. The differential of
Fullmotion technology is that the compressor stays on all the time. But how can it
use less energy, if it’s never turned off? The
dilemma is easy to explain. The momentthat the compressor consumes the mostenergy is when it is turned on. The conceptbehind the Embraco Fullmotion technology
is to create an intelligent system, in which
the compressor automatically increases
and decreases the work intensity, according to the refrigeration need. Thus, it neverturns off and avoids the energy use on restarting, which occurs several times a dayin conventional models. The Embraco Fullmotion technology also allows better foodpreservation due to minimum temperature
variation in the cabinet. Additionally, its use
reduces the compressor’s overall noise andvibration by approximately 30%.

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EM Platform
Models developed in the Embraco Mini (EM) platform arequiet, compact and efficient. It is the company’s best-selling line worldwide and the only one present in all production units (Brazil, Italy, Slovakia, China and Mexico). Its
newest version, the EM3 family, launched in 2011, allows
the development of models up to 5% more efficient thantheir predecessors. The EM platform arrived in the market
in 1987, being a milestone in our history. It was the firstcompressor with 100% Embraco technology, representing
the company’s achievement of technology autonomy.

40%

is the reduction in energy
consumption by using the Embraco
Fullmotion Compressor compared to
traditional products.

Microcompressor
After six years of research, Embraco began, in 2011, pilot
production of the microcompressor. There are two models,
2.7 cm and 5.0 cm in diameter. The compact size and absence of oil created a new market, still to be exploited anddeveloped. The microcompressor can be used, for example
in cooling portable equipment, such as special firefighter
uniforms, when subjected to high temperatures, small
refrigerators, refrigerated compartments for the medical
area (such as organ transport) and in automobiles.

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PeopleGlobalvalues

Embracoconsolidates itself,each time more, asa global company

We are consolidating ourselves as a global
company. Not only for being present in six
countries or for our products being marketed in over 80 countries. We also want
to be a company with global culture. A
place where people from various nationalities work side by side, where cultural differences are respected and valued. In ourbrand, we designed the value Cultivating
Passion to make it clear how much people
are important to us and to illustrate ouremphasis on building talented teams thatare passionate about what they do.
We are building a broad concept about diversity. We have set strategies and actions
so that this idea takes root in our offices,
corridors and laboratories. In practice, thismeans being a company that is inclusive,that welcomes people with some type of
disability, whether physical or intellectual,
to participate in our routine. It means
encouraging Brazilians to work in China,
bringing Italians to Brazil or taking Slova-

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kians to Mexico. It means seeing people
from different backgrounds enrich our
day to day with particular behaviors andknowledge.
One of the tools to deepen our global DNA
is the Trainee Program. In 2011, we hadin Brazil almost 13,000 applications forthe 2012 program, double the forecasted
target. Eight trainees were selected. Those
chosen receive the mission to lead strategic projects and are closely monitored
by managers. An interview with one of ourtrainees can be found on page 35.
Improvements insocial initiatives
In 2011, we completed the Assessmentof Embraco’s Social Initiatives in the Community. The study was conducted in fivecountries and six cities where we promotesocial action. The goal was to discover
the opinions of communities and employees about our initiatives. The comments
were very positive and helped us further
improve our social investment policy. In
China, for example, the donation of more
efficient refrigerators to hospitals was not
so valued by the community. The priority
is to welcome and qualify people that arrive from the field to work in the industry,
and therefore we prioritized the Dandelion

Messagefrom thePresident

migrant school in joining Global Volunteer
Day (see more on page 33).
In the survey, the growing demand forenvironmental issues also became clear,which motivated us to make someadjustments in our programs. The idea
is to launch new projects and strengthen
existing ones. This is the case of the
Ecology Network, an initiative, in Brazil,
through which adolescents are encouraged to create blogs to debate andexchange information about the environment. After the survey, we are intensifying the implementation of workshops
and courses to teach participants touse blog publishing tools and also how
to write and approach topics relating to
the environment, as well as expand thenumber of participating youths.

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Talentsof diversity

Each participant is hired by the company
for a period of 12 months, in an eighthour workday. However, they only work
four hours. During the remaining hours,
they attend a career improvement course.
Since the program was implemented, 108
people have been selected. About 68% ofthem have been hired permanently.

30

Women valued

Talents ofDiversity program
values people
with disabilities

The inclusion of people with disabilities
is an important work (and very gratifying) in Embraco. We created, in Brazil, theTalents of Diversity Program. It is an excellent employment opportunity for people
with disabilities who do not have suitableprofessional qualifications. Every year we
make 30 vacancies available. In 2011, 25
people were benefited from the program.

GRI content

In 2011, we conducted, in Embraco Brazil,
two Roundtables about Genders. These
events are encounters with male andfemale leadership which aims to debate
the role of men and women in society,reflecting on how the differences between
them could be better addressed in theworkplace. Roundtable participants had
the opportunity to better understand thegenders’ peculiarities and leave old prejudices aside. We were able to understandthe specificities of men and women andalso perceive that there is much in common between the two.

Our City Project
In Slovakia, we participated in a volunteer project called
Our City Project. There were 60 people from Embraco
dedicated to working in communities for two days, alongwith other local businesses and organizations. During thosedays, we cleaned the local zoo, planted trees, promoted
activities for children, offered workshops for people withdisabilities and hosted a blood donation booth at Embraco.

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Extra carewith mothers
To take better care of our employees, in
2011, we entered into a partnership with
the Itaiópolis Municipal Health Secretariat,
in Santa Catarina. The objective was toconduct a campaign to disseminate goodpractices to contribute to women’s health.
During some days, the company promoted lectures with professionals in the area
to clarify doubts among participants.
Another way to collaborate with women’s
health is by offering a number of maternity benefits. Before the baby’s birth, expectant mothers have access to our groupof pregnant women, with whom they
can talk and express their feelings aboutmotherhood.
When the child is born, the mother continues to have special attention. She canstay home without working for up to six
months. This is because Embraco adhered to the Brazilian federal government
program Citizen Company. The program
offers tax incentives to companies that
extend the maternity leave from 120 to

180 days. After this period, there are additional advantages available. In Joinville,
there is a nursery at their disposal within
the factory, and in Itaiópolis, they are
given day-care assistance. In addition, themothers receive special attention fromthe company’s bus driver. The line follows
a special route, passing in front of thenursery. This provides greater comfort tothe families’ routine.

Embraco offers special
care for mothers, throughpartnerships with local
government agencies,
adherence to the federal
program Citizen Company
and the provision of benefits
like daycare assistance.

In Joinville,
professionals havea nursery available
in the factory

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Turning
dreamsinto reality

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For the first time in 2011, we held Embraco Global Volunteer Day. It’s a date on
which employees from the units in Brazil,
USA, Slovakia and China work, with theirfamilies, community leaders, NGOs andschool teachers, to improve some aspectof the community in which they live. In
total, we recorded more than 4,200 hoursof volunteer work.
In the United States there were donationsof more than 500 food and hygiene items.
In Slovakia, the employees participated in
the cleanup of Podlesok Slovak Paradise (anational park), collecting the region’s trash.
Embraco’s Global
Volunteer Day washeld for the 1st timein 2011

In Joinville, 120 volunteers rolled up theirsleeves for almost 2,000 hours of intense
community work. The location chosen
was Jardim Paraíso. They delivered toresidents of the subdivision Los Angeles
two new leisure options: a sand court forsoccer and another for volleyball. The
Early Childhood Center Paraíso da Criança
also underwent improvements: it received
a beautiful painting on the walls andchanges in the bicycle rack area. The volunteers furthermore revitalized the walls
and the flower beds of the square and thepolice station and gave a new face to thecemetery’s walls, located at the neighborhood’s entrance.

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In the Itaiópolis unit, 70 people worked together with five schools. There, they built
a solar heating system and a doll house,
prepared a garden to plant strawberries
and set up a drainage system to reduce
humidity in the garden. The volunteers
also created covers for sandboxes andpainted walls, sidewalks and squares.

4,200

hours were invested in volunteer work
performed by company employees.

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Migrants in China

Methodology involunteering
Embraco Global Volunteer Day adopted
the Oasis methodology to develop the
project. In 2010, Oasis entered with apilot proposal in Joinville, and in 2011 theidea was brought to the other units. The
methodology is consolidated in several
countries and stipulates all conditions forthe community to make the intervention
according to their needs. According to
the Oasis methodology, participants passthrough seven steps, which encompass
all the work’s phases, from creation to thebeginning of a new cycle. See below theseven steps.

In China, 130 million people, close to 10% of the country’s
population, are migrants or children of migrants. It is ahuge social problem, especially considering that, among
them 20% are school age. These children have difficulties in adapting and often receive poor quality education.
Many of our employees in Embraco migrated from otherregions. Therefore, 50 volunteers were mobilized to workon improvements in the Dandelion high school, which islocated in the community around our factory. Thus, we
make a small contribution related to this social problem.
The hands of our employees painted stairs, gates and evenping-pong tables in the school.

3D ream: build the image of what you
want to have or do. Go beyond simply
identifying problems, but connect thepeople’s individual dreams.
4 Care: organize, plan and seek resources
to transform the dream into reality. It isthe beginning of the mobilization and of
the changes in practice.

People benefited byour social investments
Country

people benefited

Brazil18,3455M iracle: is time to work, join forces, toact collectively and explore what is bestin the community towards a common
dream.

China

1,360

Italy

2,300

Slovakia

6,568

North America

300

1 Gaze: observe the community, people
and site’s characteristics. Know the situation well and what can be improved.

6C elebration: time when participants
gather to observe the results and celebrate the good work.

Total

28,8732 Affection: live with people, listen, discuss and establish a relationship of trust
and affection with the community.

7 Re-evolution: is the time to think about
the future, to reap the learnings and encourage the community to participate in
new projects.

Safety umbrella
How to get to Joinville? Follow the road and take the firstrain on the right. The humorous and entertaining directions
reflect Joinville’s reputation in Brazil. The city is known
for wet weather and rain that doesn’t let up. The weather,
however, can bring some safety risks when certain precautions are neglected. To escape the rain, many people
usually run for cover. A practice that breaks our Safety
Golden Rule number 4. This rule raises the danger of a“sprint” inside Embraco’s premises. Haste increases the riskof concussions and fractures, besides exposing the person
to accidents with forklifts and other cargo vehicles thattransit in the units.

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PEopleand recognition of good results. In 2011,
1,600 people were trained as observers,
who gave 140,000 positive feedbacks onsafety, totaling 19,180 hours of conversations, and another 5,870 hours invested intraining observer teams.

Safetyfirst
To ensure employees’ safety and health in
the workplace, in 2011, Embraco focusedon the continued implementation of the
Safety Golden Rules and behavior change.

and cleaning). In 2011, the Brazil, Mexicoand Slovakia factories implemented thisrule in 100% of the activities. The otherunits will complete the project in 2012.

Our factories have OHSAS 18.001 certification - international standard of occupational health and safety management- and implementation of the Golden
Rules is part of the continuous improvement process of our internal procedures.
These rules are a set of basic procedures
and standards designed to guide behavior in the day to day and in all activities
performed by employees, contractors
and visitors.

Let’s take care of each other

Within the eight rules, number 7 deals
with Lockout/Tagout of Hazardous Energy
and focuses on prevention in all intervention activities (preparation, maintenance

Innovationand energy
efficiency

In 2011, we implemented the global project Behavior-Based Safety, which aims tohelp people choose a safe behavior, rather
than a risk, while performing their daily
activities. The idea here is not reprimand.
It is only guidance. BBS foresees stimulating conversations, highlighting positive
aspects of work, praise what is being done
correctly and explanations about the benefits of safety measures for everyone.
The program has three basic elements:
making observations and feedback about
safety, action plans to remove barriers

The program begins by identifying behaviors which are the most present inpeople’s routines in each area. Throughcontinuous observations of his fellow employees, the next step is to recognize andcongratulate people for behaviors that are
being carried out safely and talk to them
about those that can be improved in order
to avoid an accident. The idea is that employees take care of colleagues, a relationship that combines friendship, respect andprofessionalism.
From May to December 2011, there were
76,728 observations in all Embraco units.

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BBS seen by
our employees
Before BBS, we thought about safety the wrong way. With
BBS, we understand that to encourage people to act
the right way is better than just reprimand them. This ischanging our relationship with employees and with thepeople who work in Embraco.”
Wilson Vicente, observer and safety specialist“We allow people to speak freely, speak of their fears andall the things they have in mind. We listen and change any
obstruction to safety or problems that occur during work. I
believe we will have many more positive stories on BBS in
the coming years.”
Juliano Tonon, quality specialist

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In which units have you worked during theTrainee Program?

Rich experience
Anne Gomes Jacobson, 24 years old, was
one of eight participants in Embraco’s
Trainee Program 2010 and was chosen
as leader of a global project, which led
her to know our units, as well as Whirlpool
Corporation. Anne traveled, knew several
factories and lived with people of diverse
cultures as part of a training and alignment project of HR tools. In the followinginterview, Anne details her experience.
Why did you choose Embraco to get a job
as a trainee?

Anne: “I intend
to improve myself,
becoming areference”

From the moment I knew about Embraco’s program structure and the projects tobe undertaken by the trainees, which were
presented by the organization’s managers
themselves, I decided that Embraco was acompany in which I would definitely
like to work.

During the program, I went to China,
Slovakia, Italy, ENA (Embraco unit in the
United States) and also to Whirlpool in
Benton Harbor, United States. I conductedtraining courses related to the deployment of goals and implementation ofdevelopment plans, I worked on the corporate tools’ alignment process. I also
worked with Aiesec’s Trainee Program andExchange Program, making a diagnosis
and seeking improvement opportunities.
How have you experienced the global
business concept?
It was a unique experience. We realized
that, indeed, a certain group of individuals
tend to exhibit characteristics and behaviors very similar to each other, dependingon the culture and the environment inwhich they live. I found it interesting andchallenging to adapt verbal and nonverbal
language to all publics. Another curious
point is to observe the different forms of
relationship.

Embraco’s Trainee program
values the professional andstimulates them to improve
themselves in their positionand seek leadership within
the company.

What are your goals in the company?
Were you surprised to receive Embraco’s
recognition?
I intend to improve myself each time
more in my position, becoming a reference in human resources. In this way, I’m
preparing myself to occupy a leadership
position in Embraco. I saw the recognition
that I received as an opportunity to know
realities very different from ours, putting
into practice much of the knowledge acquired during the Trainee Program.

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Cultural diversity
Johari Gregorio’s story expresses well
Embraco’s way to improve global culture.
At 28, he is one of the participants in theexchange program promoted through apartnership between the company andthe Aiesec organization, but his international bloodline is even older. Johari is
an Italian who was born in Malaysia. He
graduated in mechanical engineering andhas already worked professionally in Ethiopia and Italy. Now, he’s in Brazil, doing aninternship in sales at Embraco’s headquarters in Joinville. He arrived in the countryin June 2011 and stayed here for twelve
months. In this interview, he tells a little
about his routine and how the international experience helps in his professional
qualification.

Exchange programs
among employees
is one way to
improvethe company’s
global culture

How was your routine during the
program?
I am part of the Asia Pacific, Africa andMiddle East (Apame) sales team for thedomestic market. In the first six months ofthe program, in the morning, I helped thesales team and learned about the tools
used in the company and how to relatewith customers and colleagues. In theafternoon, I went to trainings in different
areas with which the sales sector relates,
such as logistics and research laboratories.
In the following months, I took care oftests in the laboratories - tests to measure the compressors’ performance - and,in parallel, focused on negotiations withcustomers.
Do you think that cultural diversity in Embraco is a positive aspect of the company?
Diversity means understanding otherrealities, it means improving communica-

tion, finding varied solutions for similar
problems. This proximity is very usefuland helps improve our performance atwork. For example: I work with a Chinesecolleague in the office. With her, I learned
interesting things about the Chinese corporate culture, such as answering e-mails
in less than three minutes and to communicate in a simple, clear and effective
manner, focusing on results.
What are your main professional goals
from now on?
My idea is to continue developing competences in sales and negotiation and also
in research and development for the next
three years. I intend to also know more
about the market and reality of China,
which will always be relevant to the company’s future. Then, I will dedicate myself
to deepen my knowledge in finance. I
want to do an MBA and prepare myself toassume new responsibilities.

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Value chain

Committed
suppliers

In the process of consolidating ourselves
as a company that looks to include sustainability in its business and alignment
to environmental concerns, we must use
our market leadership so that our entire
supplier chain also develops these global
values. Embraco has worked several years
to spread awareness about sustainability
to its partners through various actions.
These are initiatives that improve labor
relations, recycling policies, reuse of materials and environmental management.
All this, executed in a coordinated manner,
will build a better future for our planet.
We are evolving a great deal in our strategy, and most of our partners are alreadycommitted to deepen sustainability
guidelines. Over 90% of direct suppliers,
distributed in the Americas, Europe andAsia, have signed the Code of Conduct, adocument with guidelines on the correct
posture of companies regarding socialenvironmental issues.

One of the mechanisms to encourage sustainable vocation in the chain is
self-assessment. Periodically we senda questionnaire to partners. Questions
cover a very broad range of topics.
When answered, we have an X-ray of thecompany’s situation. Thus, our suppliers
can clearly measure if they are acting inaccordance with our Code of Conduct. At
the same time, Embraco can also analyze case by case. With the data in hand,
we guide each supplier in a distinct andindividualized manner, so that each one
enhances the sustainability concept in accordance with their own reality.

More than 90%of suppliers havesigned ourCode of Conduct

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Messagefrom thePresident

Self-assessment is also an important
recognition tool. In China, we developed
an annual award for suppliers who haveexcelled in the year. It is an important
way for us to get closer to the partners,
interact and stimulate best practices.
Among the awards, is the sustainability
item. In 2011, to decide who were thosehighlighted in this item, we used the selfassessment results, analyzing companies
that are more advanced in this process.
And the following suppliers were awarded:
Roshow Technology, Zhejiang Sunho Science & Technology and Hangzhou Qianjiang Spring.

Assessment
allows Embraco
to orientate its
foundry partners

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38Foundry
partners’
assessment
In 2011, we further improved our supplier assessment policy. For the firsttime, we applied the questionnaire to theFoundry’s partners. The questions weresent to direct materials suppliers, such as
oil and iron, and to intermediate materials suppliers, those who do not make up
the final product, only participate in the
manufacturing process, such as sand. The
result was very good. Over 95% of thepartners responded to the questionnaire(representing close to 70% of the Foundry’s purchases in the direct, intermediatematerials and direct services categories).
The index shows our chain’s great concern
with the sustainability theme. Based on
information gathered from the questionnaire, we drew up an orientation plan together with those who most need support,
which are considered most critical.

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PeopleGreen
On sight products
In China, we conducted a pilot project totake an important step in the process ofsocial-environmental risk management.
The quality team went beyond the selfassessment analysis and visited five of our
suppliers on sight. The audit’s perception
is that there is good supplier adhesion in
relation to social-environmental issues
and there is no resistance to access information. Based on this pilot, Embraco is
studying to extend the work, which could
reach more suppliers and more countries.
It is worth mentioning that the initiative
is a pioneer in Embraco and originatedfrom China’s own quality team, whichsought to qualify itself to develop andcarry out the project.

Our concern for sustainability accompanies the products’ entire useful life, evenwhen they are no longer being used byour customers - about 95% of compressor waste is recycled. The big challenge
is to collect used products in order to recycle the raw materials and discard themproperly. For this reason, we created Top
Green. The program counts on a very large
participation of different Embraco publics.
Customers, suppliers and employees collaborate. In 2011 alone, 601,600 discarded compressors returned to the company
through the program, about 45% morethan in the previous year.
When a used compressor reaches thehands of the Top Green team, besides
avoiding the inappropriate disposal, we
help the environment by recycling the
non-renewable raw materials, such as
steel, copper and aluminum. Steel and

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Evolution
casted iron are used directly by the Embraco Foundry. Copper and aluminum aresold for reprocessing. Not even oil escapes
our eyes.

Close to 95% of thecompressors’ residuals
are recycled. Embraco’s
great challenge is to collectused products, reason forwhich the Top Green program
was created, that counts
on the participation ofvarious publics.

2010
housings collected (received):
415,5742011
housings collected (received):
601,60045%

increase in the volume of housings
removed from the market.

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Business
Leader ForumIn Slovakia, we have a good example ofaction together with suppliers. Embraco
participates in the Business Leader Forum (an initiative that brings together
25 companies, in order to disseminate
best management practices). The forum
has different work groups, and Embraco
participates in several of them, including
the one that works with suppliers in termsof sustainability. We indicated one of ourpartners to participate in the program.
The Business Leader Forum, then, conducted an audit to check the status of our
supplier following the EFQM methodology,
which evaluates the criteria: employees,

market, customers, community and environment. After the audit, the Business
Leader Forum delivered a report to the
supplier, with some recommendations anda strategy to conduct business in a sustainable manner.
Another objective of the forum is to encourage companies and their suppliers
to jointly develop a project to meet a
community need. We decided to create ahotline to give support on psychologicalissues, such as depression, for example. Avery relevant service, since unemployment
is growing in the region.

Embraco seeks,
together with
suppliers,
management
solutionsInnovationand energy
efficiency

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GRI Content

Report Profile

Reporting period
We seek to focus the report on the period
January 1 to December 31, 2011, in the
Global Reporting Initiative (GRI) performance indicators as well as other actions
relevant to the company. However, thereport also addressed some information
or events of 2012, to provide the reader amore contextualized approach.
Date of the most recent previous report
2010
Reporting cycle
AnnualContact data for questions regarding thereport’s content
If you have doubts, suggestions or comments, send them to:
accs@embraco.com.br
Corporate Communication and Sustainability Office
Rua Rui Barbosa, 1020
Caixa Postal 91
CEP 89219-901 – Joinville-SC – Brazil
Report’s scope and boundary
This report’s content cover the activities of
Embraco’s units in the six countries where
it has operations. Changes in the data’spresentation were presented together withthe text, when necessary and appropriate.

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Application Level
This report is based on GRI guidelines,
methodology in which the publication isinserted in the application level B, selfdeclared. This application level determines
the reporting of all profile items, information on the form of management andno less than 20 performance indicators,
including, at least, one indicator of thefollowing areas: economic, environmental,
human rights, labor practices, society andproduct responsibility. The company reports, here, 26 indicators.
Materiality
Embraco uses a materiality matrix to give
focus to its sustainability strategy. The
matrix also defined this report’s content.
In 2012, we carried out a consultation
process with some of our stakeholders in order to verify if the issues raisedin the previous materiality matrix werestill current for these publics. As a result,
there were no major changes in the main
themes, but, with the new query, a few
items stood out (see below).
For this process, we analyzed documents
and internal surveys, we performed an
online consultation with our internal public (participation of 70 employees) and acustomer survey (answered by 26 compa-

GRI content

41nies), plus conducted interviews with ourformer president João Carlos Brega, withspecialists and with community representatives.

Material theme
Eco-efficiency
Sustainable energy solutions
People development andtraining
Ethics in business
Minimizing environmental
impactRespect and valuing diversity
Product quality and customer
satisfaction indexes

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B+

A

A+

GRI Application Levels

G3 management
approach

Not required.

G3 Performance
Indicators &Sector Supplement
Performance
Indicators

Respond to a minimumof 10 Performance
Indicators, including atleast one of each of thefollowing performanceareas: social, economicand environmental.

Respond to all criteria listed
for Level C plus:
1.2,
3.9, 3.13,
4.5 to 4.13,
4.16 and 4.17.

Information on theManagement Approach foreach indicator category.
Respond to a minimum of
20 performance Indicators,
including at least one ofeach of the following areas:
economic, environmental,
human rights, labor practices,
society and productresponsibility.

Same as requirement for Level B

Management Approach
disclosed for each indicator
category.
Respond to each core G3 andSectorial Supplement Indicator(whenever there is a final
approved version) with due
regard to the materiality
principle of one of the following
forms: (a) responding to theindicator or (b) explaining thereason for the omission.

With External Verification

Respond to items:
1.1,
2.1 to 2.10,
3.1 to 3.8,
3.10 to 3.12;
4.1 to 4.4,
4.14 to 4.15.

B

With External Verification

G3 Profile

C+

With External Verification

Report Content

C

GRI content

42

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GRI content

GRI Content
GRI Items
Completely

Strategy and analysis

Partially

1.1

Message from the President→ Consult page 3

1.2

Description of key impacts, risks and opportunities→ Consult pages 18 and 19.

Organizational Profile
2.1

Name of the organization→ Consult pages 18 and 19.

2.2

Primary brands, products, and/or services→ Consult page 4.

2.3

Operational structure of the organization→ Consult page 6.

2.4

Location of the organization’s headquarters
Joinville, in Santa Catarina (Brazil).

2.5

Countries where the organization operates and where its main operations are located→ Consult page 6.

2.6

Nature of ownership and legal form
→ Consult page 4.

2.7

Markets served→ Consult page 4.

2.8

Company’s size
→ Data on the total number of employees are on page xx. In Brazil, as we are a business unit of Whirlpool SA, our financial information is not disclosed separately. To know theconsolidated data of Whirlpool SA, see the electronic address http://www.whirlpool.com.br/investidor.aspx.

2.9

Main changes during the period covered by the report→ Consult page 5.

2.10

Awards received during the period covered by the report→ Consult page 11.

43

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Completely

Report Parameters

Partially

3.1

Period covered by report for information provided→ Page 41.

3.2

Date of most recent previous report→ Page 41.

3.3

Reporting cycle→ Page 41.

3.4

Contact data for questions regarding the report or its contents→ Page 41.

3.5

Process for defining report content→ Page 41.

3.6

Boundary of the report→ Page 41.

3.7

Statement of any specific limitations on the scope or boundary of the report→ Page 41.

3.8

Base for report elaboration→ Page 41.

3.9

Data measurement techniques and the bases of calculations→ Described in the footnotes of tables and graphs.

3.10

Reformulations of information provided in earlier reports→ None.

3.11

Significant changes in scope, boundary or measurement methods applied in the report→ None.

3.12

Table identifying the location of information in the report→ Page 43 onwards.

3.13

Current policy and practice with regards to seeking external verification for the report→ The disclosed information was not audited.

Governance, Commitments, and Engagement
4.1

Governance structure of the organization, including committees of the highest governance body
→ Consult page 8.

4.2

Presidency of the highest governance body
→ Consult page 88.

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4.3

Independent or non-executive members of the highest governance body
→ There are no independent or non-executive members.

4.4

Mechanisms for shareholders and employees to provide recommendations→ Whirlpool S.A., which includes the business of Embraco compressors, holds an annual meeting with shareholders and provides a telephone channel and an e-mail address toreceive recommendations. For more information, visit the site http://www.whirlpool.com.br/investidor.aspx.
Employees can also send suggestions via the ombudsman, the Open Channel.
We also hold a large annual meeting (Leadership Meeting), which brings together all corporate leadership and managers of operating units worldwide. In addition, each area of ​​the company conducts alignment meetings, with varied frequencies.

4.5

Link between compensation and organizational performance (including social and environmental)→ We have the Profit Sharing Program (PPR), which rewards performance against the targets. The idea is to value who acts according to the company’s values​​, culture and pillars.
To further clarify the individual responsibilities in the company’s results, leadership regularly converses with teams and discusses the application of goals in the day to day work.

4.6

Processes to ensure that conflicts of interest are avoided→ The Letter of Organizational Values​​, the Code of Conduct and Code of Ethics are known and have the commitment of all Embraco professionals. To ensure the company’s
entire alignment, we receive under the scope of the Ethics Committees, complaints, doubts and denouncements from any employee regarding irregularities in Embraco. Directors
of factories, legal sector, Human Resources area and vice-presidencies may also be triggered directly in these cases.
Denouncements may be made ​​by electronic mail or even through calls to a specific line, ensuring the employee’s anonymity.

4.7

Qualifications of members of the highest governance body
→ The assessed competences of the members that compose the highest governance body are associated to the knowledge that the executive has of
Embraco’s business and their particular area of operation.

4.8

Statements of mission and values, codes of conduct and internal relevant principles→ Consult page 6.

4.9

Responsibilities for implementation of economic, environmental and social policies→ Monitoring: the execution of Embraco’s economic, environmental and social planning, as well as the executives’ performance, is supervised by the president’s staff. Formal
assessments are conducted quarterly, guided by our five strategic pillars: revenue growth, technology leadership, operational excellence, sustainability and people.
Risks and opportunities: to manage and minimize potential risks to Embraco’s interests, we review the risk spreadsheet semiannually, according to Enterprise Risk Management
methodology. This spreadsheet contains not only the possible impacts resulting from occurrence of that risk, but also ways to combat it.

4.10

Processes for performance self-assessment of the highest governance body
→ We do not fully adopt the precautionary principle, but we seek to act with environmental responsibility by eliminating from products and processes substances proven harmful
to the environment.

4.11

Explanation of if and how the organization applies the precautionary principle→ We do not fully adopt the precautionary principle, but we seek to act with environmental responsibility, eliminating from products and processes substances
proven harmful to the environment.

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4.12

Charters, principles or other initiatives developed externally→ Since 2005, Embraco Brazil has been a signatory to the Global Compact of the United Nations Organization. In 2008, Embraco Slovakia also adhered to the initiative.

4.13

Participation in associations and / or national / international organisms→ Among the main entities in which we participate or with which we interact, are:American Chamber of Commerce in Slovakia;
Brazilian Electrical and Electronic Industry Association (Abinee);
Brazilian Association of Advertisers (ABA);
Brazilian Business Communication Association (Aberje)
Brazilian Foundry Association (Abifa);
Brazilian Human Resources Association (ABRH);
Brazilian Refrigeration, Air Conditioning, Ventilation and Heating Association(Abrava);
Itaiópolis Commercial and Industrial Association (ACII);
Slovakia Electrical Equipment Industry Association;
Brazilian Foreign Trade Association (AEB);
Occupational Health and Safety Professionals Association of Joinville and Region(APSSOJ);
Joinville Business Association (ACIJ);
Latin American Electrical and Electronic Industrial Association (Alainee);
National Association of Manufacturers of Electro-electronic Products (Eletros);National Research, Development and Engineering Association of Innovative
Companies (Anpei)
Human Resource Development Association - Slovakia;
Business Leaders Forum – Slovakia;
American Chamber of Commerce - Slovakia;
Electricity Utility Company of Santa Catarina (Celesc);
Center of Industries of the State of Santa Catarina (Ciesc);

Joinville Architect and Engineer Center (Ceaj);Joinville – Spisská Nová Vês Sister City Committee;
National Confederation of Industry / Brazilian Business Coalition (CNI/CEB)São Francisco do Sul Port Authority (CAP);
State Council for Foreign Trade Advancement (Ceacex);
Honorary Consulate of the Slovak Republic in Southern Brazil;
Itaiópolis Volunteer Fire Brigade;
Federation of Industries of the State of Santa Catarina (Fiesc);
Forum of Business Leaders;
Forum of Social Leaders;Certi Foundation - Reference Centers in Innovative Technologies;
Global Compact – Slovakia Chapter;
Ethos Institute;Santa Catarina Movement for Excellence (MCE);
Global Compact;
Inter-municipal Union of Workers in Metallurgical, Mechanical, and Electrical
Material Industries of Santa Catarina (Sintimesc);
Sinditherme Employers’ Federation;
Slovak Business and Industrial Chamber (SOPK);
Joinville Volunteer Fire Brigade;
Information Technology and Telecommunications Users Society (Sucesu/SC);
Santa Catarina Educational Society (Sociesc);

4.14

List of stakeholder groups engaged by the organization→ Our main stakeholders are customers, suppliers, employees and communities surrounding our operations.

4.15

Basis for identification and selection of stakeholders to be engaged→ The strategic importance to our business is the main selection criterion of stakeholders.

4.16

Approaches for stakeholder engagement→ Consult page 41.

4.17

Main themes and concerns raised through stakeholder engagement→ Consult page 41.

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Performance indicators
Management Approach: consult pages 3, 37 and 28.

Economic performance
EC3

Coverage of pension plan obligations→ Taking into account the different locations where Embraco has operations, there are different structures of retirement plans offered. In China, as well as in Slovakia, there is no
private pension plan.
from 1% to 5.5% of the employee`s salary according to the
In Brazil there is a plan with voluntary participation and open to all positions. Embraco contributes with values ranging​​
salary range. Contributions also follow a table linked to the employee’s age. In the case of the smaller proportion, Embraco contributes with half, increasing its participation until it
is doubled. Participation rises progressively with age.
The plan foresees normal type retirement (age 60), early (age 55) and by disability, as well as death benefits, paid to the spouse and children.
In Italy, there is a retirement plan provided for in the collective bargaining agreement, but participation is voluntary. For employees, the minimum participation is 1.2%, the same
percentage by which the employer participates. As for executives, the minimum contribution is 4%.
In the United States, a structured plan is offered by the government, in which participation is voluntary and the employee participates with the amount he desires, and optional
participation by Embraco. The company’s share is 50% of the amount invested by the employee, up to a maximum of US$ 17,000.

Market Presence
EC7

Procedures for local hiring and proportion of senior management hired from the local community in important operational units→ There are no specific policies aimed at hiring locally. However, whenever possible, this practice is adopted.

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Indirect Economic Impacts

Completely

EC8Partially

Development and impact of infrastructure investments and services offered for public benefit→ Embraco develops and invests in activities for the public benefit in all countries, especially through volunteerism of its employees. In all locations surveys are performed to
identify the main demands of the communities. The total amount invested in the community reached US $ 170,500, with volunteer programs and others targeted to health,environment, sport and education, in addition to socialization in communities.

Unit

Value
Invested (US$)

United States

8,495

Brazil120,192

Slovakia

36,200

China

5,642

Total

170,529

Social Investment Carried Out by Embraco in 2011

↓ continues

EECON Volunteer Program - Brazil

829 people benefited. Investment of US$ 266

Embraco Ecology Award - Brazil

2,130 teachers and students benefited. Investment of US$ 52,658

Volunteer Program - Brazil

9,492 people benefited, 7,400 hours of community service, 302 volunteers in 2011. Investment of US$ 7,763

Digital Knowledge Space - Brazil

Digital inclusion program aimed at employees, their families and communities. 671 beneficiaries. Investment of US$ 6,183

Sports School - Brazil

Inclusion of children and adolescents through sports. 486 beneficiaries. Investment of US$ 13,974

Support to Rescue Project - Brazil

240 beneficiaries. Investment of US$ 25,636

Embraco Theatre Group - Brazil

1,030 beneficiaries. 160 hours of community service. 8 volunteers. Investment of US$ 5,306

Itaiópolis Environmental Games - Brazil

3290 beneficiaries. Investment of US$ 5,995

Embraco Choir- Brazil

750 beneficiaries. 76 hours of community service. 16 volunteers. Investments of US$ 2,410

Volunteer Program - Slovakia

Investments of US$ 3,206

Embraco Ecology Award - Slovakia

Investments of US$ 9,100

People with disabilities - Slovakia

Investments of US$ 7,020

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Social Investment Carried Out by Embraco in 2011
Support for nurseries - Slovakia

Investments of US$ 8,333

Supplier development - Slovakia

Investments of US$ 3,900

Investment in health - Slovakia

Investments of US$ 4,641

Volunteer Program - EECON China

Investments of US$ 1,194

International Volunteer Day - China

Investments of US$ 746

Donations to NGOs - China

Investments of US$ 1,493

Volunteer actions and projects - China

Investments of US$ 2,209

March of Dimes – United States

Allocates resources to programs aimed at health of pregnant women and babies. Investments of US$ 6,424

International Volunteer Day – United States

Investments of US$ 1,420

Donations and sponsorship for the community United States

Investments of US$ 650→ In total, actions in the USA benefited 300 people, with 239 hours of volunteering. In Slovakia, there were 6,568 people benefited and 1,262 hours and, in China, 1,360
people and 726 hours. In Brazil, there were 18,345 people benefited with 5,833 hours. EECON Brazil and China do not have this information.

Environmental performance
Management Approach: consult pages 19, 23 and 24.

EnergyEN3

Direct energy consumption→ Consult the response from EN4 indicator

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Indirect energy consumption→ In 2011, there was an average energy consumption reduction of about 5% in each plant. In global consumption, the reduction was 3% (even considering EECON, as of 2011).
Despite the reduction in the absolute values, ​​in relation to compressor production there was an increase of approximately 7% in consumption - with the exception of the Italy
unit, which recorded a reduction of 8%. In global consumption, there was an increase of 4% in the amount of energy consumed per compressor produced (also considering EECON
only in 2011).
BrazilDirect Energy (MJ)
Natural gas
Methanol
Propane
Kerosene
LPG
Diesel oil
Gasoline
Indirect energy (MJ)
Electric energy
Total energy

China

Direct energy (MJ)
Natural gas
Methanol
Propane
Kerosene
LPG
Diesel oil
Gasoline
Indirect energy (MJ)
Electric energy
Total energy
1

Slovakia

2009

2010

2011

2009

2010

2011

2009

2010

2011

189,878,442
175,133,910
372,8423,716,471
0
9,099,830
1,477,594
77,795568,752,462
568,752,462
758,630,904

242,392,744
224,060,655
411,840
3,032,424
012,978,919
1,786,200
122,706
666,968,951
666,968,951
909,361,695

245,107,876
227,436,650
386,4962,554,042
0
12,927,071
1,702,397
101,220644,202,396
644,202,396
889,310,272

65,072,470
64,949,635
7,603
0
115,232
00091,260,000
91,260,000
156,332,470

71,215,002
69,893,635
0000
205,442
1,115,925
107,927,640
107,927,640
179,142,642

66,609,331
65,047,745
0000237,666
1,323,920
107,682,840
107,682,840
174,292,171

86,505,392
83,917,486
00001,210,519
1,377,387
98,256,294
98,256,294
184,761,686

111,551,302
108,406,072
00001,974,861
1,170,369
119,348,590
119,348,590
230,899,892

105,029,836
101,694,683
00002,005,964
1,329,189
110,256,444
110,256,444
215,286,280

Italy↓ continues

PeopleTotal Embraco

2009

2010

2011

2009

2010

2011

64,595,895
64,595,895
0
0
0
0
0
0
51,674,386
51,674,386
116,270,281

67,008,830
67,008,830
0
0
0
0
0
0
51,679,717
51,679,717
118,688,547

60,161,220
60,161,220
0
0
0
0
0
0
50,902,729
50,902,729
111,063,949

406,052,169
388,596,896
380,445
3,716,471
115,232
9,099,830
2,688,113
1,455,182
809,943,142
809,943,142
1,215,995,311

492,167,878
469,369,192
411,840
3,032,424

476,908,263
454,340,298
386,4962,554,042
0
12,927,071
3,946,027
2,754,329
913,044,409
913,044,409
1,389,952,672

2011 data include the manufacture of electronic components (EECON).

12,978,919
3,966,503
2,409,000
945,924,898
945,924,898
1,438,092,776

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Energy consumption per unit
2011 (MJ)

Itaiópolis– BR

Joinville– BR

Foundry– BR

EECON –
BR

Beijing –CH

EECON –
CH

Direct energy
Natural gas
Environmental recycling1
Methanol
Propane
Kerosene
LPG
Diesel oil
Gasoline
Indirect energy
Electric energy
Total energy

6,818,076
80,236
386,4962,554,042
3,877,539
12,931,837
12,931,837
19,749,914

224,751,073
217,655,620
128,891
5,291,836
1,702,397
101,220392,608,944
392,608,944
617,360,017

13,538,726
9,781,030
03,757,696
232,456,392
232,456,392
245,995,118

0
0
6,205,223
6,205,223
6,205,223

66,609,331
65,047,745
1,381,570
237,666
1,323,920
103,326,120
103,326,120
169,935,451

0
1,840,796
4,356,720
4,356,720
4,356,720

Spisska Nova
Ves – SK

Riva diChieri – IT

Total

2010

105,029,836
60,161,220
476,908,262
600,013
101,694,683
60,161,220
454,340,298
1,612,128
55,986
381,022
1,517,792
2,350,709
386,496
235,5492,554,042
00
4,798,399
12,927,071
35,3302,005,964
3,946,027
19,094,598
1,329,189
2,754,329
35,330110,256,444
50,902,729
913,044,409 101,658,877
110,256,444
50,902,729
913,044,409
140,110215,286,280 111,063,949 1,389,952,672 125,727,314

Energia economizada por meio de melhorias em conservação e eficiência
→ Embraco implemented a series of initiatives aimed at energy conservation and increased efficiency, such as redesign of processes, lighting control, installation of compensation
capacitors, reducing cycle times and elimination of process steps. There were also initiatives related to employees’ behavioral habits, such as adjusting the air conditioning andambience lighting. From 2011, electronic components manufacturing unit (EECON) became part of this indicator.
In total, these initiatives led to a reduction of 14,763,910 MJ.

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GRI content

Total water withdrawal by source (m3)Partially
BrazilChina

Slovakia

Italy

Total Embraco

2009

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

2011

Wells

205,210

264,925

255,140

0

0

0

0

0

0

125,786

78,06237,443

330,996

342,987

292,583

Water supply
networks

98,82089,58670,854

127,855

136,482

133,571

75,20990,79688,027

15,51918,675

16,784317,403335,539309,236

Total

304,030 354,511 325,993 127,855 136,482 133,571

75,20990,79688,027 141,305

96,73754,227 648,399 678,526 601,818

12011 data include the manufacturing of electronic components (EECON).

Water consumption per unit
2011 (m³)

Itaiópolis – BR

Joinville – BR

Wells

12,015

147,692

93,003

Water supply
networks

2,662

67,061

1,131

Total

14,677214,753

94,133

1Foundry – BR EECON – BR

Beijing – CH EECON – CH Spisska Nova Ves – SK

2,430

2,430

Riva di Chieri – IT

Total

37,443

292,583

131,4652,106

88,027

16,784309,236

131,4652,106

88,02754,227

601,818

2011 data include the manufacturing of electronic components (EECON).

→ Despite the change in scope and consideration of the electronic components manufacturing units, the water consumption’s absolute value decreased by 11%. However, if we
consider the year’s compressor production, the reduction was 5% in liters per compressor produced.

↓ continues

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Water consumption by source – 2011 (m3)continuation

EECON – CH

2,106
88,027

Spisska Nova Ves – SK
Riva di Chieri – IT

37,443

16,784131,465

Beijing – CH
EECON – BR
Itaiopolis – BR

2,430
12,015

Foundry – BR

2,662
93,003

Joinville – BR

1,131
147,692

Wells

Water Supply Networks

67,061

People

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Percentage and total volume of water recycled

Partially
Recycled water (m³)

2009

2010

2011

China

35,69830,02622,546Compressors (Brazil)

137,323

128,443

118,007

Foundry (Brazil)

60,312

34,10335,771

TOTAL

233,333

192,572

176,323→ Similar to results presented in 2010, only compressor plants from China and Brazil, in addition to the Foundry have water recycling systems. Results for the year 2011 indicate that there
was a reduction in the absolute consumption of recycled water in Compressor plants (approximately 17%) and an increase in the order of 5% at the Foundry. For efficiency results, i.e. litersof recycled water per compressor produced, the same results were observed (a reduction of approximately 10% for compressor plants and 14% increase for the Foundry). Consumption
target for the year 2012 is to maintain the best results achieved in 2011, respecting the seasonal variations, considering the relative water consumption (liters/compressor) - each plant willdevelop specific actions so that the quantity of recycled water be maintained.
Use of recycled water (%)
(%)
70%
55%

55%

61%
38%
28%

32%
17%
22%

Foundry (Brazil)
Compressors (Brazil)
China

2009
1

2010

2010

Percentage of water recycled compared to the total water consumed in the unit.

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GRI content

Total water discharge by quality and destination.
→ In 2011, there was an average reduction of 14% in the absolute amount of water discharged by plants in relation to 2010. This decrease was due to efficiency improvement
or internal reuse projects, such as greater utilization of reused water in the toilets and in the cooling towers and optimization of production processes. Embraco’s production canalso be seen by comparing the years 2010 to 2011, which was, on average, 6% lower. Another important point is that the electronics unit (EECON) now incorporate this indicator
as of 2011.

Discard of water (m³)
Return to collection point

Brazil
2011

2009

2010

2011

2009

2010

2011

115,550

136,114125,734

89,243

103,726

69,8540

69,32582,964

0

0

0

0

0

2,430

75,2090066,72545,086

40,218

1,279

0

0

0

0

0

0

0

0

1,662

3,139

0

0

0

0

182,275

181,200

165,952

92,184

106,865

72,28475,20969,32582,964Irrigation
TOTAL
1
2

Slovakia

2010

Public Sewage System
Evaporation

China

2009

2011 data include the manufacturing of electronic components (EECON).
”Recycling” data were excluded, as the water returns to the process and is then discarded, being counted twice.

Waste disposal by unit (m³)
2011

Itaiópolis – BR

Joinville – BR

Foundry – BR

EECON – BR

Beijing – CH

7,164

66,57349,891

2,106

69,854

-

-

-

-

-

-

2,430

Evaporation

1,680

30,065

8,472

-

-

-

Total

8,844

96,63958,3632,106

69,8542,430

Return to collection point
Public Sewage System

EECON – CH

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Total weight of waste by type and disposal method→ Between the last two years, there was a 7% decrease in waste generation in Embraco, a drop linked to the reduction in the year’s compressor production.
→ Embraco’s main goal for 2012 is the development of projects focused on improving waste management, considering technical and legal aspects of each country. Thisinitiative seeks to improve the segregation, packaging, disposal and transportation, with focus on increasing the destination of materials for recycling, thus reducing the waste
sent to landfills.

Total waste
generation (t)Brazil

China

Italy

Slovakia

2009

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

2011

1,005,539

2,261,853

1,536,454

98,37074,17871,736

1,522,590

2,081,346

1,959,293

55,98669,32582,964

Landfill

200,464

400,863433,64400

0

141,020

199,150

147,400

0

0

0Incineration

464,500

1,537,950

829,460

98,21074,17850,856

0

0

0

0

0

0

Internal recycling

80,236

128,891

70,9040001,381,570

1,840,796

1,780,233

55,98600External recycling

260,339

194,149

202,4460020,880041,40031,660069,32582,964

0

0

0

160

0

0

0

0

0

0

0

0

Non-hazardous waste

57,218,189 81,508,718 79,649,370 11,324,598 13,264,077 10,900,778 13,197,440 19,891,550 17,240,670 5,608,828

00Landfill

12,838,368 17,146,051 15,211,973

0

69,32582,964

0 5,608,828

0

0

0

0

0

0

0

0

Hazardous wastes

OthersInternal recycling
External recycling
Remediation ofbuilding waste
Total
1↓ continues

Management

26,55024,910795,070

771,157

928,350

681,700

821,980

1,080

0

0

0

0

16,14044,236,671 64,197,647 64,254,647 10,528,448 12,492,920
116,600

140,110

166,61000671,780

9,972,428 12,515,740 19,069,570 16,568,890
0

0

0

0

58,223,728 83,770,571 81,185,823 11,422,968 13,338,255 10,972,514 14,720,030 21,972,896 19,199,963 5,664,814 69,325 82,964

2011 data include the manufacture of electronic components (EECON).

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GRI content

EN22continuation

Waste generation (t)Itaiópolis – BR Joinville – BR

Foundry – BR EECON – BR Beijing – CH EECON – CH

Spisska Nova
Riva di Chieri – IT
Ves – SK

Total

Hazardous wastes

16,293

1,464,771

53,3482,042

71,016720

1,959,293

133,465

3,700,947

Landfill

5,064

400,983

27,597---

147,400-

581,044

Incineration-

808,390

21,070-50,136720--

880,316

Internal recycling

5,902

62,095

865

2,042

-

-

1,780,233

133,465

1,984,601

External recycling

5,327

193,303

3,816-

20,880-31,660Non-hazardous waste

569,380

64,719,488

14,282,594

77,908

10,871,478

29,30017,240,670

6,057,828

113,848,646

Landfill

254,986

35,3301,092,480

14,084,163-

926,310

2,040

671,780

140,360

16,952,463

Internal recycling--

15,854

286

-

-

-

60,66076,800External recycling

534,050

63,460,398

182,577

77,622

9,945,168

27,26016,568,890

5,856,808

96,652,773-

166,610

-

-

-

-

-

-

166,610585,673

66,184,259

14,335,942

79,94910,942,494

30,02019,199,963

6,191,293

117,549,592

Remediation ofbuilding waste
Total

0%
15%

1%
2%
Landfill
Incineration
Internal Recycling

82%

External Recycling
Remediation of building waste

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Social performance – Labor practices
Management approach: consult pages 29, 30, 31 and 34.

Employment
LA1

Total number of employees by employment type, employment contract and region
BrazilEmployed for an indefinite
periodTemporaries
Total
Outsourced
Total employees

China

Slovakia

USA

Italy

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

2011

4,820

5,735

5,427

1,303

1,588

1,915

1,685

1,617

1,933

59

59

58

621

617

599

8,494

9,622

9,932

1

1,606

789

1,216

854

582

831

589

23

94

152

176

289

10

4

1

-

4

5,674

6,317

6,258

1,892

1,611

2,009

1,837

1,793

2,222

69

63

59

621

621

600 10,100 10,411 11,148

300

570

643

-

621

167

-

309

129

-

-

-

-

28

24

5,974

6,887

6,901

1,892

2,232

2,176

1,837

2,102

2,351

69

63

59

621

649

624 10,400 11,939 12,108

Employees by work relation

Employees by Location
1%
5%

8%

19%
Brazil
China

57%
92%

Total Embraco

2009

18%

Slovakia

Direct Employees

Italy

Indirect Employees

USA

300

1,528

960

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Total number and rate of employee turnover by age group, gender, and region

Partially
Dismissed

Brazil
2009

2010

China
2011

Men

818 1,883 1,078

Women

206

2009

Slovakia

USA

Italy

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

Total Embraco
2011

2009

2010

2011

696 1,281

399

123

161

58

9

4

6

50

15

21 1,696 3,344 1,562

551

253

81

140

91

72

83

26

6

7

2

24

7

3

< 30

544 1,576

697

688 1,317

425

83

127

28

n/d

2

1

0

2

0 1,315 3,024 1,151

From 30 to 50

425

776

560

61

104

65

87

96

40

n/d

8

6

52

15

24

625

999

695

> 50

55

82

74

28

0

0

25

21

16

n/d

1

1

22

5

0

130

109

91

777 1,421

490

195

244

84

-

11

8

74

22

24 2,070 4,132 1,937

389

788

375

Age groupTotal

1,024 2,434 1,331

Hired in 2011

BrazilChina

Slovakia

USA

Men

939

334

150

2

Women

334

113

71

-

< 30

863

354

85

-

From 30 to 50

394

93

136

2

> 50

16

-

-

-

TOTAL

1,273

447

221

2

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Relationship between workers and governance→ Slovakia: there was a change in existing law, which will be changed again in 2013, with the new government.
China: in the past 14 years there have been no collective bargaining agreements with employees. Currently, most employees are union members.
U.S.: doesn’t have this type of agreement.
Collective bargaining agreements

Brazil

China

Italy

Percentage of employees affiliated with unions

100%

89%

33%

8%

100%

Percentage of employees covered by collective bargaining agreement

98%

NA

100%

100%

NA

Slovakia EECON China

Rates of injuries, occupational diseases, lost days, absenteeism, and work-related fatalities by region→ Embraco has shown improvements in its rates, although in 2011, didn’t reach the internal goal set for the frequency rate of time away accidents. Global project initiatives
related to safe behavior, Loto (blocking dangerous energies) and routine management in manufacturing contributed to this improvement.
Maintaining the global audit program of health, safety and environment, in Brazil, Component units, Foundry and Electronic Component units (EECON) have been audited inaddition to the Compressor plant in Italy. Identified non-compliances are addressed through an action plan and monitored every quarter. In order to share information, any
accident with time away from work that occurs in the organization is shared across all units, as a way to call attention and to take preventive actions to prevent new recurrences.
To prevent such accidents remains a challenge for the organization.
Establishment of the Health, Safety and Environment Forum in 2010, with the monthly participation of Health, Safety and Environment leaders from all plants, coordinated by the
Corporate EHS Management, provided, in 2011, improved communication, increased exchange of best practices and information, alignment of approaches and critical analysis of
the results and projects.
Forecasted for 2012, is the global implementation of a comprehensive project on the evaluation and adaptation of machinery and equipment, as well as the stabilization phase of
the Safe Behavior and Routine Management project, in order to maintain and further improve the results. The OHSAS 18001 and ISO 14.001 certification project, in EECON China,
and Global EHS Audit, in the Slovakia plant, are also part of the plan for 2012.

Health and safety rates

BrazilChina

EECON China

Italy

Slovakia

USA

GlobalTL: injury rate

1.07

0.79

0.50

2.99

0.40

0.00

0.94

0.03

0.00

0.00

0.00

0.00

0.00

0.03

5.77

4.68

0.00

35.09

13.77

0.00

7.53

DO: Occupational disease
TDP: total days lostrate

The rates are calculated for every 100 employees. Contractors’ employees are not included in the calculated rates. First aid nor minor injuries that
do not generate temporary restriction to work are not included. For lost days, running calendar days beginning on the day following the accident areconsidered. They meet ILO standards, as well as local legal requirements in each country.

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Absenteeism rate
China

Brazil
2011

2.13

2010

1.31

Slovakia

2011

0.66

2010

0.63

Italy

2011

2.24

2010

2011

2.92

2010

1.88

3.61

Training and education
LA10

Average hours of training per year, per employee, broken down by employee category

Average training (h)Brazil1

18

Italy

Slovakia

USA

China2

38

21

8
38

40

89

78
65

32
10

3

11

2

2
2009
1
2

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

Brazil data include the manufacturer of components, compressors, foundry and EECON.
In the China data EECON’s training hours are not included, which had in 2011 an average of 24 hours per employee.

2011

2009

2010

2011

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Total workforce, by employment type, employment contract and region
BrazilParticipation of women in theworkforce (%)

EECON
China

China*

Italy

Slovakia

USA

2009

2010

2011

2009

2010

2011

2011

2009

2010

2011

2009

2010

2011

2009

2010

2011

9.2

6

7

30

41

29

0

0

0

0

12

12

13

ND

1

0

Vice-presidency,
board and management
Supervision and leadership

9.2

9

9

41

26

32

33

15

14

17

12

12

28

ND

9

0

Teams

19.7

23

24

14

10

19

87

30

32

32

24

35

34

ND

36

43

*

EECON data are not included.

BrazilParticipation of people withdisabilities in the workforce (%)

Italy

China

Slovakia

USA

2009

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

2011

2009

2010

Vice-presidency, board and management

0

2

2.3

10

10

0

0

0

0

0

0

0

0

0

0

Supervision and leadership

0

2

1.1

0

0

0

0

0

0

0

0

0

0

0

0

Teams

5

5

5.2

1

1

0.3*

0

2

2

1

1

1

0

0

0

*

2011

This percentage refers only to people who have an exam proving disability. There are more people with disabilities working in Embraco China.

WORKFORCE AGE DISTRIBUTION (%)
Brazil1

China

More than 50 years
Italy

Slovakia

30 to 50 years

USA

EECON China

(%)

(%)

(%)

(%)

(%)

(%)

100

100

100

100

100

100

80

80

80

80

80

80

60

60

60

60

60

60

40

40

40

40

40

40

20

20

20

20

20

20

0

0

2009 2010 201102009 2010 201102009 2010 201102009 2010 2011

Up to 30 years

02009 2010 20112009 2010 2011

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Proportion of base-salary between men and women by employee category→ In Embraco Brazil, the total difference between men and women’s salaries is 51%. In Slovakia, the difference is 1%, but the unit does not have data broken down by categories.
In Embraco China, salary information is confidential.
Salary men / women (%)

BrazilItaly

USA

Vice-presidency, board and management

8%

25%

NA*

Supervision and leadership

6%

17%

14%

Teams

25%

8%

5%

Teams
*

In Embraco U.S. there are no women among executives.

Social performance - SocietyManagement approach: consult pages 9, 64 and 65.

Corruption
SO2

Percentage and total number of business units submitted to risks assessments related to corruption→ Embraco, as a subsidiary of Whirlpool Corporation, meets the requirements of the Sarbanes-Oxley (SOX) law, maintaining documentation of all significant internal controls
regarding financial reporting. The company has established an Internal Audit, responsible for testing the SOX internal controls on performance and effectiveness, which arevalidated by an External Audit. A total of 189 controls were tested in 36% (4 units of 11) of Embraco plants. In addition, 100% of Embraco units are subject to periodic review ofprocesses, through the work of Operational Auditing.
BrazilUnits

Slovakia

United States

Italy

2010

2011

2010

2011

2010

2011

2010

2011

Process evaluated (absolute number)

10

12

8

9

5

6

8

9

Processes evaluated (% of total current processes in the unit)

32

33

26

25

16

25

26

17

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Percentage of employees trained on anti-corruption policies and procedures of the organization

Partially
Percentage of employees trained in procedures against corruption in 2011*

Brazil*China**

Italy

Slovakia

USA

Total

20.96%

9.43%

26.05%

13.03%

80%

17%

Considering all Embraco Brazil units, including EECON.
Considering Beijing Embraco Snowflake Compressor Company Ltd. and EECON Qingdao.

**→ Embraco’s positioning about corruption, money laundering and antitrust actions can be found in the company’s Code of Ethics, distributed to all employees and covered in the
new employee integration training, and specific global internal policies on the theme.
Administrative and managerial positions undergo training in relation to these issues. In 2011, training involved 2,092 employees from all units, including 1,305 from Brazil,
reaching almost 100% of employees in this group.
SO4

Measures taken in response to incidents of corruption→ There were no recorded cases of corruption in 2010 and 2011 in the organization. To avoid this type of conduct, we have made available to the internal public the company’s
Code of Ethics, as well as the guideline that all can report any violation of the principles contained in the document.
For this to happen, employees can make a complaint directly to their supervisor or through the Hotline, a completely free phone line, with attendants in Portuguese, English andSpanish. The complainant is kept confidential, and verification of the complaint occurs confidentially.

Public policies
SO5↓ continues

Positions relative to public policy and participation in public policy development and lobbying.
→ For considering public policies a vector driver instrumental in the company’s strategy, Embraco actively participates in the movements that affect the company directly or indirectly.
Typically represented by senior management, expression of the company’s strategic objectives is achieved through trade associations and formal representation, primarily of entities
that are mainly focused on innovation, such as the National Association of Research and Development of Innovative Companies (Anpei) and the Brazilian Association of Electrical andElectronic Industry (Abinee), among others.
In order to express themselves publicly and participate in building a national public policy that aims for sustainability and energy efficiency through innovation, Embraco is also present
in associations such as ABNT, IEC, Fiesc, Fiesp and CNPQ, among others.
Standing out internationally, in 2011, was Embraco’s Innovation Award, in China, which had as one of its aims, interest in sensitizing public figures and opinion makers on the relevanceand impact of the refrigeration segment.
The organization has positioned itself formally regarding a number of public policies with emphasis on the following topics: innovation, taxation of goods and raw materials, among others.

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Main company requests
ThemesInnovation environment
Revision of the Good Law
Patent system

Actions
Through Anpei, Embraco has led a large group of innovative companies to discuss and request a favorable environment for innovation, addressing
issues such as an incentive law to encourage innovation and interaction between universities and companies, among others.
Through Anpei, Embraco expressed its interest in reducing the legal uncertainty caused by inconsistencies in the law. This goal was partiallyachieved with the launch of the revision of the Good Law, which regulates several obscure questions.
Embraco’s participation in discussions on the topic of innovation. The rounds of discussions concerning the patent system, which was attended byWhirlpool SA’s vice president of Institutional Relations and Sustainability, Armando Ennes Valle, resulted in an article that addresses some difficulties encountered by the company regarding filing and maintaining patents in Brazil and in the world and will be published in a book.

→ Beyond these fronts, the company has established contacts with electric utility companies, in order to develop research and development projects focused on energy efficiency.
Besides these projects, initiatives that strive for end-user energy efficiency are being developed in partnership with these companies so as to insert high efficiency products in themarket. Both actions are supported by the Law No. 9991 of Aneel, and its changes are accompanied by the institutional relations team.
In 2012, Embraco intends to continue participating in discussions about matters of interest through the actions of the entities that it is already a part of. Also, it intends to start orincrease its participation in matters related to research and development, solid waste policy formulation, compressor technical requirements, environmental education, etc.

Social performance - product responsibility
Management approach: consult pages 66 and 67.

Customer’s health and safetye
PR1

Products and services life cycle phases whereby health and safety impacts are assessed for improvement, and the percentage of products and services subject tothese procedures→ In developing new products we take into account the health and safety of employees and customers. In the phases ranging from idealization to customer delivery, for example,
we seek to identify and reduce the risk of toxicity based on a list of 546 hazardous substances that must be avoided in our processes and products. Some have already beenbanned and others are being progressively eliminated. The process is certified by the QC 80.000 standard and involves testing carried out internally and by external partners,
providing greater transparency and quality.
Throughout product design and manufacture, we apply simulation tools to test performance under extreme conditions, with safety factors that reproduce the time of use for morethan 10 years. The goal is to eliminate safety fault risks even after the end of the life cycle planned for the product.
These procedures are complemented by a fault detection process, which follows the customers’ perspective and evaluates field products (those that were on the market andwere returned to the company for evaluation). The goal is to identify faults and to act preventively; reducing impacts on customers. This assessment is performed in 100% of thecompressor families produced by Embraco, following statistical sampling representative of each compressor model and family, and contributes with information that enhance theproduct development cycle.
We have also created a series of manuals and catalogs that guide customers on how to properly and safely use the compressors and refrigerant gases. With a focus on
responsible disposal, the manuals and packaging contain information on the optimal disposal procedure and the chemical compatibility of waste.

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66Type of information about products and services required by labeling procedures, and the percentage of products and services subject to such requirements→ All products sold by Embraco follow international laws governing the presence of substances harmful to health and the environment in electro-electronic products. In order toensure compliance with legislations and the fulfillment of customer requirements for products free of substances that can cause social or environmental impact, production units
are annually audited and evaluated according to criteria of the QC 80.000 standard.
Thinking about the impact that its products may cause at the end of the life cycle, Embraco provides its customers with information on proper disposal and the materials usedin its products. Furthermore, since 2000, the company has developed the Top Green Program, which consists of collecting compressors, which are disassembled in special
equipment and their components are sent for recycling.
The program has already withdrawn from the market more than 1.35 million used compressors.
In order to ensure continuous improvement, Embraco has a work group focused on increasing the reliability of electrical components. There are also several ongoing projects inthe company to improve the identification of components regarding recyclability and disposal. The care with harmful substances, especially the work carried out to identify themthroughout the supply chain, is also present in the actions.
Embraco also includes in its manuals, references to safety in the use of its products and also on the products’ disposal.

Social performance - Human rights
Management Approach: refer to pages 37 and 38.

Investment and Procurement Practices
HR1

Percentage and total number of significant investment agreements that include human rights clauses or that were subjected to human rights screening→ The best way to evaluate the investment contracts that consider assessments of human rights is by departments. For the Corporate Procurement Department, in 2011, there
were 19 existing significant investment agreements - considering the agreements above R$ 10 million -, with 68% of these containing human rights clauses.
In the Research and Development Department, none of the 19 significant investment agreements - made between the organization and universities - contain human rights
clauses. EECON Brazil has 17 strategic suppliers (80% of total purchases), with two having human rights clause.
The Environment, Health and Safety Department has a significant investment contract – of relevant value and global coverage - which includes human rights clauses.

HR2

Percentage and total number of significant suppliers and contractors that have undergone screening on human rights and the measures taken→ Between October and November 2011, 51 suppliers of Embraco Foundry were assessed on issues regarding the Code of Conduct, which contains aspects of human rights,
among others. These suppliers are representatives of more than 70% of the volume of purchases. Actions for the most critical group will be implemented in 2012.
Embraco’s other units had already undergone such an assessment in 2010, as previously reported.
There was no case of refusal in contracting by Embraco.

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Operations identified as having significant risk for incidents of child labor and measures taken to contribute to the abolition of child labor→ No operation has been identified with significant risk for incidents of child labor. However, Embraco understands that there may be risk of occurrence in the suppliers of their
suppliers.
In order to avoid the occurrence of child labor, Embraco is attentive in complying with local legislations, corporate requirements, and all internal procedures and, furthermore,takes several measures, such as: signing contracts with human rights clauses, using a checklist that includes social and environmental issues to certify new suppliers, inaddition to requesting that they all sign its Code of Conduct which contains provisions relating to child labor. To ensure compliance with the code, Embraco performs periodic
self-assessments and regular visits to their suppliers.

Forced and Compulsory Labor
HR7

Operations identified as having significant risk for incidents of forced or compulsory labor, and measures taken to contribute to the elimination of forced or compulsory labor→ No operation has been identified with significant risk for incidents of forced or compulsory labor in Embraco’s operations. However, Embraco understands that there may be riskof occurrence in the operations of the suppliers of their suppliers.
To avoid this risk, in addition to following all legal requirements, Embraco performs a careful selection of its suppliers. All of them must sign its Code of Conduct, which hasprovisions relating to forced or compulsory labor, and to ensure compliance, Embraco performs periodic self-assessments and regular visits to their suppliers.

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General coordination
Embraco - Corporate Communication andSustainability Office
GRI consultancy, materiality, writing and editing
Report Sustentabilidade
Revision
Assertiva Produções Editoriais
English version
Spin Traduções
Graphic Design and Layout
Report Sustentabilidade
Typeface family
Embraco Beau Sans, Panos Vassiliou, 2006
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