2. Approach to Sustainability
3. Rationale for Issuance
4. Alignment with the Sustainability-Linked Bond Principles, 2020
At Movida, we work to ensure that our businesses is contributing to overcome the country's challenges.
Since 2006, we have been consolidating our position as one of the main companies in the car rental business in Brazil being recognized by our outstanding performance and ability to create strategic relationships with our stakeholders - reinforcing our profile as a digital company connected with the future.
We operate in the rent a car (RAC) and outsourced fleet management (OFM) segments. The company regularly renews its fleet to guarantee service quality and expand its range of activities through the commercialization of used cars. Our cars are on average one year old, in contrast with the Brazilian fleet's average age of 14 years. As a direct result of that, we have lower maintenance costs, we generate less greenhouse gas emissions and ensure more safety for our customers.
Incorporated as Movida Participações S.A., today we are a publicly traded corporation, headquartered in São Paulo. Since 2013 we have been part of the JSL Group, which has the largest logistics portfolio in Brazil. In 2017, we concluded the process of going public. Currently our shares are traded on the Novo Mercado, the segment of Brazil's B3 (Brasil, Bolsa, Balcão) exchange for companies committed to best corporate governance practices.
We are present in all the Brazilian states with a fleet of more than 109,000 vehicles - 71,000 in the rental segment and 38,000 in OFM -, in addition to 191 car rental stores and 67 point of sales for used cars (Movida Seminovos). In December 2019, our work force was comprised of approximately 3,665 employees.
More recently, we have updated our strategic goals to reinforce profitability in our business and consolidate our market share. Our business approach aims to incorporate the best technology into mobility. We pioneered national WiFi coverage for cars and, in 2018 became the only multimodal mobility platform in the country offering electric bicycles and tricycles. Our points of sale are fully integrated, and for years we have employed digital resources and artificial intelligence to make reservations via Facebook Messenger. We were also the first company to operate via WhatsApp in the country, both in the RAC and used vehicles segments.
Our sustainability long term vision is translated in our Corporate Sustainability Policy thatfocus on the responsible use of resources, mitigation of unavoidable impacts and generation of positive impact. As a result, we are one of the few companies in our sector to be certified as a B Corp.
Our commitment to sustainability requires efforts to drive continuous improvement in our processes by integrating (i) the intelligent management of resources, (ii) innovation and (iii) discipline in execution.
Over recent years we have experienced a significant expansion in our operations and this imposed us the challenge of maintaining efficiency while growing our business, ensuring that we wereimplementing the best business practices along the way, and were aligned with our purpose and strategy.
We have implanted several initiatives and projects aimed at making intelligent use of natural resources, including controlling water and energy consumption, solid waste generation and greenhouse gas emissions.
We control our greenhouse gas emissions (GHG) inventory based on the GHG Protocol methodology, covering both direct emissions (Scope 1), substantially from the direct consumption of fuels; and indirect ones (Scope 2), related to the acquisition of energy, mainly to the company's stores and administrative centers. In 2019/2020, we started to monitor Scope 3 emissions, accounting the emissions generated by our customers when they use our services, recognizing the importance of measuring the environmental impact related to the use of our services. In fact, Scope 3 emissions represents 98% of the company's total emissions, according to our latest GHG Inventory published and audited by an independent third party in 2020 (base year 2019).
The relevance of Scope 3 emissions in our GHG report is a direct consequence of the car rental business model where customers use our cars and contribute to GHG. We understand that Climate Change is a challenge for all companies in Brazil and around the world, and see GHG reduction as an opportunity to improve our internal processes, integrate ESG challenges into our strategy and influence our entire value chain, including our clients.
Following the compliance with the GHG Protocol principles in our GHG Inventory (Relevance, Comprehensiveness and Transparency), we became the first company in the vehicle rental industry to include Scope 3 emissions in our controls, as we understand it is the most relevant and material category for the sector.
Our GHG Inventory was published for the first time at the Brazilian Program of GHG Protocol and can be accessed through this link: https://registropublicodeemissoes.com.br/
Although we have made a significant effort in recent years to track and reduce our emissions, we understand that there is still room for improvement.
We know that the most efficient way to achieve significant GHG reductions in the short term should be based on transforming our energy matrix into a renewable matrix, ensuring that all of our physical facilities will be supplied with renewable energy. In addition to that, we also recognize that the consumption of renewable fuel (Brazilian ethanol) can be improved in our entire fleet, and we plan to do that by fostering awareness campaigns within our network and incentivizing our customers to select this type of fuel when using our cars.
Approach to Sustainability
As a company we are always trying to balance purpose and profit. As a result, we are dedicated to address the contemporary challenges of mobility, given that mobility is essential for the creation of a fairer, more integrated and sustainable society.
We operate in a sector in which the growth rate is exponential. From 2017 to 2018, the number of users in the rental business almost doubled, from 27.2 million to 43 million. Over half of this was related to
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