GRI 1.2 | 4.9 | 4.11
Since 2002, Embraer has applied structured risk management processes to a number of corporate levels, thereby meeting current demands, standards and regulations of the aerospace industry, according to national and international standards and laws.
The Company reinforced its processes in 2009, through the Board of Directors' approval of a Financial Management Policy and, in 2010, by creating the Risks Committee, at the Board of Directors level, which strengthened even more its commitment to transparency and the perpetuity of the operations and of the material and financial resources used.
The entire portfolio of corporate risks is managed and monitored through an Action Plan as the management tool. This entire process and its results are periodically discussed with the top management and presented to the Risks Committee, Fiscal Board and Board of Directors
Operational risks are covered by regularly evaluating our processes. Last year, the treasury and marketing processes were evaluated, for the purpose of assessing our practices in light of those of the market. All of the studies done of the processes, from the standpoint of operational risks, are presented and discussed with Embraer's Audit Committee, under the responsibility and coordination of the Internal Risks and Controls area
The expansion of the operating areas into the defense and security and energy segments will allow Embraer to not be so dependent on the behavior of the aerospace market, which is still recovering from the effects of the international economic crisis that began in 2008. With this operational diversification, the Company will be prepared for eventual market risks
Several risk reduction projects were developed and implemented for corporate processes and in the main information systems. The overall control environment was revised, while improving the corporate structure for internal controls, in line with the Sarbanes-Oxley Act, Section 404: Internal control structure of relevant processes for financial statements, according to the Public Companies Audit Oversight Board (PCAOB).
In order to offer better financial support to sales and operations, Embraer closed a credit operation in September 2010 for US$1 billion, with a group of 25 international financial institutions, for the purpose of ensuring access to short-term financial resources, in the case of need, at previously negotiated rates. This amount will be available for up to two years, through two lines of credit: US$400 million for pre-financing exports, and US$600 million for financing working capital. This resource may be used for withdrawals, and the payment deadline, if used, is September, 2013.
The cash allocation management system adopted by the Company continues to be one of the main tools for mitigating exchange risks. Thus, by adjusting the cash allocations in reals (R$) or in dollars (US$), Embraer seeks to neutralize its exchange exposure. It also extended its indebtedness, in 2010, in order to ensure greater security for its operations
Embraer zealously protects its image, based on a constant and transparent relationship with strategic groups in which the Company actively communicates to the market and other stakeholders even before certain issues become polemical or become risks to operations and to the brand.
Embraer is one of the largest aerospace companies and takes part in all of the manufacturing stages of its aircraft, from developing the project to providing after-sale assistance.
Therefore, its concern with legally protecting the intellectual property of innovations, generated by its research and development initiatives, is shown in the significant increase in the number of patents requested by Embraer. From 2003 to 2010, there were 64 requests made, of which 26 were granted (12 in 2010 alone).
The subject of climate change has transformed the discussion agenda of organizations, due to numerous alerts regarding the environmental problems arising from global warming and, especially, its effects.
While accompanying the evolution of these issues, Embraer assesses existing opportunities associated with its activities, such as controlling consumption, changing the energy matrix, utilizing new technologies, developing new products, and others. Thus, issues related to this subject are worked out in the organization's different action plans, as described in this report.
During the present year, the process for identifying environmental and climate change risks will be revised, as part of building the organization's sustainability policy
Code of Ethics and Conduct
GRI 4.6 | 4.8 | SO2 | SO3
Five years after its approval, our Code of Ethics and Conduct fits perfectly into the Company's commitment to intensify its actions for ensuring sustainable growth.
As it works with our corporate values and the basic principles of the UN Global Compact, which the Company formally accepted in 2008, our Code of Ethics and Conduct is similar to a nation's constitution, integrating fundamental principles, rules and values that should guide all corporate policies, guidelines and procedures.
The code also applies to Embraer's subsidiaries, in Brazil and abroad, and is absolutely coherent with the laws and best corporate governance practices of the countries where we are located.
As an essential management instrument, Embraer's Code of Ethics and Conduct will be updated whenever necessary, contributing decisively to guiding the vision, actions and behavior that will ensure the perpetuity of the Company. This updating and revision of content is up to the committees assisting the Board of Directors (Human Resources Committee and Audit Committee) and committees assisting the Company's Executive Board (Ethics Committee and Sustainability Committee).
All employees receive, upon hire or at each updating phase, a copy of the document. Furthermore, presentations are made on the subject to employees, so that everyone can understand its contents and clarify any doubts. For suppliers, partners and other stakeholders, Embraer seeks to present its internal rules of conduct through communiqués.
GRI 4.4 | SO2
Embraer has several communications channels between employees and employer. The Whistleblowing Channel – managed by an independent company – works with anonymity and confidentiality, and makes it possible for any person to report an eventual violation of the Code of Ethics and Conduct, or of practices that are inappropriate for the best sustainable practices. The Whistleblowing Channel is available in three distinct forms:
Mail, via mailbox No. 11.331 – ZIP 05422-970 – São Paulo/SP – Brazil
Embraer's website (www.embraer.com.br), on the home page, "Report of Misconduct" icon, or filling out a form, under "Contact Us"
Number of Reports Received
The Whistleblowing Channel, in operation since 2005, received an average of 218 reports from 2005 to 2008, but in 2009 and 2010, this number went up to 419 reports posted. This increase was due to an internal campaign regarding the channel, which was held during the second half of 2009.
During the first half of 2010, the number of reports stayed above the average of the year before. As of July, we improved the Whistleblowing Channel, in order to make its purpose more clear, and we included questions that helped improve the quality of the contents of the reports. After those changes, we had a 45% reduction in the number of reports posted during the second half of the year, in comparison with the first half of 2010, but, with an improved quality of the reports, reflecting a better understanding of the Code of Ethics and Conduct, and of the true purpose of this communication channel.
The Intranet continues to be the most used channel, from the three that have been made available, and it was responsible for 84% of all reports posted on the Whistleblowing Channel in 2010. This shows the credibility of the mechanism in the aspects already mentioned, such as confidentiality and anonymity in receiving and dealing with the reports that are posted.
Total reports received
Means Used 2010