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The Relationship between Good Governance, Social Responsibility

and Sustainability

José Sergio Gabrielli de Azevedo CEO

December, 8th 2011

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Some overarching themes ...

0,81 0,91 1,01 1,08 1,14 1,19 1,24 1,34 1,43 1,49 1,72 2,13 2,69

3,37 4,16

4,93 5,66

6,46

8,27 9,42

0

2

4

6

8

10

12

1950 1960 1970 1980 1990 2000 2010 2020 2050 2100

World population (billion)

More developed regions Less developed regions

Sources: United Nations, BP Statistical Review and Bloomberg

Short and medium-term issues:

Price volatility effects: recession fears, crowding out of resources to other segments

Govt budgets: effects on producing and consuming countries

Security of supply and demand

Long-term issues:

How energy-intensive will population growth and non-OECD demand be?

How will it affect climate change? -3000

-2000

-1000

0

1000

2000

3000

4000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Oil demand year-over-year growth (kbpd)

OECD Non-OECD

9,00

145,66

34,04

0

20

40

60

80

100

120

140

160

mar-94 mar-97 mar-00 mar-03 mar-06 mar-09

Dated brent (US$/bbl)

(Dec, 10, 1998)

(July, 3, 2008)

(Dec, 24, 2008)

Critical uncertainties:

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... and the role of big companies

Organizational Governance

Human Rights

Labour Practices

The Environment

Fair Operating Practices

Consumer Issues

Community Involvement

and Development

Source: ISO

What are the implications of corporate size in countries with limited infrastructure?

Energy is essential to all segments of society. How can energy companies reconcile this with shareholder profits?

In countries where big companies play a key role in the energy segment, how to cope with society’s demands (especially where finite resources are concerned)?

Big companies’ decisions affect the whole socioeconomic environment

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The triple bottom line approach, ...

Source: UN

Consumers:

cheap and environmentally-friendly

fuels

Shareholders:

profits

Government:

taxes, energy security and jobs creation

Society:

sustainable development

Employees, Suppliers and Partners:

long-term relationships and safety in production

processes

Scientific Community: pure and applied science

funding

Multiple stakeholders bring conflicts and convergences. The corporation must find a balance between conflicting objectives

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... other key environmental and social issues to the oil industry ...

Transparency:

• to be open to society’s scrutiny

Stakeholders’ involvement:

• To expand the channels through which the various stakeholders can have access to the companies’ decision processes

Focus:

• To shift from the short to the long term

Energy supply:

• To provide safe, efficient and sustainable energy

Energy sources:

• To increase access to energy sources (new sources, new technologies, new production processes)

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... and some of Petrobras’ initiatives, ...

Sustainable development in

communities with low social

inclusion, located in areas directly

influenced by Petrobras.

Conservation and preservation of environmental resources and

social and environmental

awareness.

2008-2012: R$ 500 million

Work opportunities and

income generation.

2010-2012: R$ 901,3 million

An instrument to add value to the cultural identity and diversity of

Brazil.

R$ 311 million since its first round

in 2003.

High-performance sports, sports

education, participation

sports and sports memory.

R$ 265 million until 2014

591 585,8 554,5 464,5

707,9

2006 2007 2008 2009 2010

Investments in social, cultural, environmental and sports projects (R$ million)

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... best practices and commitments

Petrobras’ Code of Ethics

Ombudsman’s Office

Internal Auditing

Frequent and open dialogue with the

Unions

Initiatives against discrimination

Policies for suppliers

Investor Relations’ Best Practices

The Global Compact

Dow Jones Sustainability Index

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