The project is not expected to intervene in areas of biodiversity importance or indigenous lands or cultural heritage sites and therefore, PS6, PS7 and PS8 do not apply to this project. The project due diligence has not found any indication of PS5 related impacts as most of the buildings Anima occupies are leased and because land acquisition would be typically located in urban areas land under a “willing buyer-willing seller” transactions without physical or economical displacement.

This is a category B project according to IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to the implementation of Good International Industry Practice (GIIP) and design criteria as is described in the following sections. Key environmental and social issues identified during the due diligence include: (i) environmental and social management system implementation; (ii) compliance with local permits and licenses; (iii) energy and water use and conservation; (iv) community health and safety including life and fire safety (L&FS) management associated with public access to buildings and evacuation plans; (v) labor and working conditions, including occupational health and safety; (vi) management of staff retrenchment, when applicable; and (vii) waste management.

 Environmental and Social Assessment and Management System

Under IFC’s previous investments, the company created and implemented a corporate policy and an Environmental and Social Management System (ESMS) applicable to all campuses, including identification of key environmental aspects and occupational risks and development of related management plans, procedures, and a monitoring and reporting system.

The company has also implemented a fully-fledged cross-functional, cross-unit Sustainability Committee (Comité de Sustentabilidade) that meets on a monthly basis to sketch out and track implementation of E&S initiatives, including waste management, hazardous materials storage and handling, working conditions, facilities L&FS maintenance, risk monitoring and reporting, and emergency response plans.

The Sustainability Committee is also used as a platform to share experiences and good practices, and to guarantee that E&S procedures established at the corporate level are implemented uniformly at the campus level.

As of the appraisal for this third investment, it was noted that the company is also strengthening its senior-level attention to E&S issues. The board of directors has recently implemented a risk, audit and governance committee, where aspects related to L&FS, E&S compliance and campuses’ infrastructure are discussed on a monthly basis.

Given the recent increase in number of campuses and the company’s intention to reach other regions in Brazil, under the ESAP (action #1) for this investment, the company will expand its ESMS to all new campuses and extensively incorporate E&S performance indicators into its monthly performance monitoring system, including, but not limited to: (i) structural safety; (ii) solid waste management; (iii) wastewater management; (iv) hazardous materials management; (v) life and fire safety; (vi) Occupational Health and Safety (OHS) safeguards for direct-staff and third-party workers; and (vii) any other aspects identified in the company’s risk identification matrix. The ESMS will also include general plans and procedures applicable to all campuses.

Identification of Risks and Impacts

The company has specialized teams to address L&FS and OHS issues that seek to identify risks and impacts and to mitigate them accordingly. The OHS team uses a recognized methodology required by Brazilian law to identify, categorize, and mitigate risks and impacts related to workplace safety issues, and the lab technicians responsible for managing Anima’s principal source of hazardous activities in its classrooms (namely its labs) clearly understand and effectively manage such issues on a day-to-day basis to protect staff and students. During the appraisal visit it was observed ongoing work to fully extend this approach to risks and impacts associated with third-party construction workers, who constitute the other significant group engaged in hazardous activities on Anima’s behalf. While Anima does require proof of construction contractors’ compliance with various labor and OHS standards, Anima’s OHS monitoring system does not currently extend to them. See below under PS2 for more details on this.

Organizational Capacity and Competency

Responsibilities for E&S performance are shared across a number of functional areas, namely People and Digital Transformation (also responsible for Human Resources, including a dedicated team for occupational health and safety), Engineering & Facilities (PEP), and Shared Services Centre (known as CSC in Portuguese). These are all staffed by senior, experienced managers. Anima has also a group-wide manager for OHS and staffed up with 43 OHS personnel distributed across its major brands/operations. The OHS team comprises medical and technical specialists in workplace health and safety. The company has recently hired a corporate environmental officer, who is now responsible for the development and implementation of corporate environmental standards and procedures, which are being replicated to Anima’s campuses.

In addition, Anima created in 2015 an internal sustainability committee to bring greater focus to establishing a robust ESMS in line with the IFC Performance Standards under IFC’s first and second investment. This committee answers to the Director of HR but also includes personnel from CSC, PEP, OHS, Investor Relations, and individual campuses.

Through its monthly meetings, this committee is intended to provide overall guidance to and ensure smooth implementation of processes and procedures related to E&S issues throughout the corporate structure, from the group level to operating companies. The goal is to promote a fluid exchange of information, decisions, and good practices among relevant actors within the corporate structure and guarantee alignment and compliance with group principles and policies. The committee uses a project-management approach to ensure that responsibilities are assigned, follow-up is maintained, and progress is documented with regard to operationalizing a full ESMS. In a proactive fashion, the company is seeking to push further upstream the consideration of E&S issues during the due diligence for new acquisitions/immediate post-acquisition integration thereof.

Emergency Preparedness and Response

In part as a result of the IFC’s previous investments, Anima has brought greater focus to L&FS in its operations. The company hires specialized consultants in L&FS issues to assist it in compliance with local requirements, which vary somewhat by state, but require a fire safety certificate from the state’s fire department for each building being occupied. This certificate is usually known as an Auto de Vistoria do Corpo de Bombeiros, or AVCB, with some minor differences between states. At IFC’s request, the company presented information on the state of implementation of other L&FS measures required by local regulations, such as having an Emergency Response Plan (generally known as a Plano de Ação de Emergência, PAE, or similar in Portuguese) in place at each location, training fire brigade members (brigadistas), and conducting regular fire drills. In recent years, the company has made significant progress on developing and implementing PAEs, ensuring a full complement of trained brigadistas, and conducting fire drills at all locations.

As noted during the site visit to AGES’s campuses in the Bahia State, some of the buildings need to improve their fire safety procedures. It was also noted that Anima is developing the necessary studies and plans to guarantee that the recently acquired brand is in material compliance with local regulations. The company’s OHS team has also been engaged to mitigate L&FS risks while the fire systems and emergency response plans are being implemented.

Moving forward, under the ESAP action #2, the company will ensure that by early-2020 AGES’s campuses have an emergency response plan in place and a full complement of appropriately trained brigadistas. In addition, AGES will conduct at least one fire drill for the calendar year in every campus. It will be Anima’s responsibility to ensure that its L&FS system continues to function properly thereafter, with at least one fire drill per semester at each campus.

Monitoring and Review

As noted above, Anima does monitor and report on selected E&S indicators as part of its monthly performance reporting processes at the company-wide level, including: water and energy use; status of L&FS certificates, incidents and accidents, fire drills, among others.

In addition, the sustainability committee meets on a monthly basis to review progress on resolving outstanding E&S issues. As part of the consolidation of its overall ESMS, under ESAP action #1, the company will ensure that appropriate E&S indicators and performance measures are monitored, reviewed, and reported on regularly. In addition, as noted below under Occupational Health and Safety (including for construction workers) and with regard to on-campus concessions for food services, Anima will ensure that its internal ESMS monitoring and reporting system encompasses all potential risks and impacts to those it engages and its students.

  Working Conditions and Terms of Employment

Brazil’s labor code is detailed and prescriptive, and the country’s labor inspection and court system provide multiple channels for workers to raise complaints and/or allegations of abusive practices.

As of mid-2019 Anima had approximately 9,000 direct employees and 338 third-party workers. Of the full-time staff, more than 50 percent are women. Terms of employment (e.g. on working hours, benefits, leave policies, etc) are communicated to employees and written into employment contracts. The company offers its workers competitive salaries, all basic benefits guaranteed by Brazilian law, and additional benefits in order to attract and retain high-performing staff, such as educational grants for employees and their children. Professors’ contracts can be full or part-time according to the number of teaching hours allocated to them. The contracts are open-ended, but the number of hours assigned are reviewed annually or biannually. Brazilian legislation requires the hiring of a number of people with disabilities depending of the total headcount which Anima has fulfilled.

Based on information provided during the appraisal, the company has resolved outstanding labor claims that it inherited from the acquisition of other educational companies or addressed weaknesses in its labor management and payroll systems. There are currently no civil action suits by the Public Prosecutor for Labor Issues against Anima or its subsidiaries regarding allegations of systematic labor abuses.

The company conducts regular staff satisfaction surveys, which are anonymous and allow employees to provide candid feedback on the work environment. Based on the results of these surveys, Anima seeks to address specific complaints or take up suggestions for how to improve the workplace and the employee experience. For several years in in a row, Anima subsidiaries have been included in the list of the great places to work (GPTW/Época Magazine) in Brazil, compiled by one of the country’s leading business magazine on the basis of online surveys completed anonymously by a minimum number of company staff. The company has also been considered for the third year in a row, as one of the best companies for women to work.

Human Resources Policies and Procedures

The company has a comprehensive set of human resources policies and procedures. At the group level, Anima has well-defined statements regarding non-discrimination, workplace climate, gender and sexual orientation, equal opportunity, and the company strives to maintain transparency and equal treatment in hiring, promoting, and terminating staff. Anima The company as a whole and its subsidiaries have rigorous selection, performance review, and advancement processes. During appraisal, IFC met numerous staff who had started out as teaching staff or more junior professionals and were then promoted into positions of increasing responsibility, including mid-to-senior administrative roles, based on noteworthy professional performance.

Workers’ Organizations

Worker rights in Brazil, including those to associate and to form of unions, are safeguarded by the 1988 Constitution and an extensive, detailed labor code known as the Consolidação das Leis do Trabalho, or CLT. Almost all workers are registered with a union, and in the case of Anima and its subsidiaries, its employees are represented by local affiliates of the professors’ union SINPRO (Sindicato dos Professores) and those of administrative workers in the education sector (Sindicato dos Auxiliares de Administração Escolar). Anima and its subsidiaries abide by the collective agreements on salaries and benefits negotiated for the educational sector.

Retrenchment

Brazil’s recent economic downturn and the change in the federal government’s student financing policies have prompted slower growth in the education sector. Nonetheless, Anima’s policy is to avoid any large-scale layoffs by seeking greater efficiency in its operations and allowing for staff attrition through natural turnover. The company also seeks to minimize layoffs that might arise in the course of acquiring another education company. In its recent acquisition of AGES, which has approximately 300 staff, the company reported that they not expect to lay off employees, as some of them will be relocated to the recently-opened campuses in Bahia. In order to provide a fair and transparent treatment to workers should they have to implement a retrenchment process in the future, Anima will issue a retrenchment procedure aligned with the current recommended practices of IFC (ESAP action #3).

Grievance Mechanism

Anima has established an internal complaint mechanism to provide employees, including third-party workers, service providers, and other suppliers with a confidential channel to raise grievances about any misconduct in the workplace and improve governance and the working environment. This channel is being managed by a specialized company named Contato Seguro (Safe Contact), which directs confidential complaints to a committee composed of the directors of HR, legal, and academics at the corporate level and the administrator and head of HR at the institution at which misconduct is alleged. The mechanism has been implemented out to Anima’s main units and, in the coming months, it will be expanded to the recently-acquired AGES University Centre. This mechanism is available to all staff, consultants, and suppliers who work for Anima or its subsidiaries. As observed during the appraisal, there are clear measures to ensure that all such parties are well-informed of this grievance channel.

Occupational Health and Safety

Brazilian regulations and labor inspection practices require employers to abide by a detailed, rigorous, and prescriptive set of standards, known as the “normas regulamentadoras” or NRs. Anima implements these requirements by developing occupational risk evaluations (known as PPRA, or Programa de Prevenção de Riscos Ambientais) and administering a comprehensive system of medical exams upon intake and departure of any staff and periodic testing, depending on the nature and risk profile of the occupation concerned (via an occupational health control program known as a PCMSO, or Programa de Controle Médico e Saúde Ocupacional).

The company has developed appropriate risk maps, standard operating procedures, and clear signage for OHS issues. As required by the NRs, Anima has also established a workplace accident prevention committee known as a CIPA (or Comissão Interna de Prevenção de Acidentes) representing all of its locations, and it promotes various training and awareness efforts on workplace safety. For those functions involving hazardous activities (e.g. laboratory work), it requires the use of appropriate personal protection equipment. Anima has an approximately 40-person team working exclusively on OHS issues. This team reports to the Vice-President for People and Digital Transformation.

Anima’s workforce faces relatively low OHS risks, with the exception of personnel working in its laboratories and third-party workers engaged in construction and remodelling of Anima campuses. In 2018, Anima staff experienced only 2 accidents that resulted in lost workdays. There was a total of 28 lost workdays for 2018 (in which 9,934,925.36 hours were worked). Recent accidents which resulted in prolonged sick leave (above 15 days Brazilian social security pays worker compensation) occurred only on route to the workplace, which is considered a workplace accident under Brazilian regulations. The company’s OHS monitoring system is robust, and it includes monthly reporting from all units to the corporate-level OHS team with all relevant data on cases. Incident reports are completed and communicated to relevant authorities (e.g. Brazil’s social security system in the event of an accident involving 15 days or more of sick leave).

However, as discussed above, Anima is still in the process of expanding its OHS monitoring system to cover third-party construction workers engaged in building or remodelling its campuses, including expansion projects (see below). Moving forward, under the ESAP (action #4), Anima will extend its OHS monitoring system to cover such workers.

Workers Engaged by Third Parties

As noted above, the vast majority of Anima’s workforce consists of direct-hire employees, including teaching and administrative staff, cleaning and guard services, and the like. Some of Anima’s subsidiary institutions, does contract reception and unarmed guard staff via third-party companies. Anima’s contracts with these companies include legal requirements on proper labor and OHS practices, and Anima pays them only on the basis of evidence that they are in compliance with them.

In addition, Anima acts as its own general contractor for its expansion projects, hiring local building contractors and tradespeople as necessary. In its contracts with such construction companies and skilled laborers, Anima requires the full payment of all social security and other benefits and requests evidence that such payments are made and that all necessary work authorizations are in place. In addition, as discussed above, Anima will extend its OHS monitoring system to such third-party construction workers to ensure that they are abiding by Anima safety standards and national legislation as applicable.

 Resource Efficiency

Anima seeks to monitor energy use, in part to control costs. The vast majority of its facilities rely on electricity provided by local utilities, but some locations also have back-up power from a diesel generator. There are no boilers or other types of combustion equipment units installed at project campuses except for backup generators are use only during events of blackouts and hence in-site air emissions are negligible.

The company currently measures energy use on a “per user” basis, and it is considering a move to a mixed system of evaluating energy use both by area (m2) and numbers of users to better reflect the reality of its consumption. Data on energy use is employed to identify cost-effective equipment swaps or upgrades, whenever possible. According to information provided at appraisal, Anima and its subsidiaries consume approximately 26.2 million kWh of electricity per year. Based on Anima’s overall energy consumption of kWh per year, it is estimated that the company’s operations emit less than 1,800 tons of CO2 equivalent per year, given the matrix of energy sources powering Brazil’s grid.

The company has developed a management plan with clear targets to reduce energy use at those campuses that consume the most energy either in absolute or in per capita terms. In addition, Anima has sought to increase the energy efficiency of its facilities, especially when commissioning a new facility or remodelling an existing building or space for its use. As part of these initiatives, the company has sought to employ various measures including the following: use of natural lighting and ventilation, increased use of lighter-colored walls and doors to reduce the need for artificial lighting, installation energy-efficient lighting and sector-based lighting control systems, and use of more energy-efficient air conditioning or ventilation in lieu of conventional systems. More recently, Anima signed an agreement with a solar power plant, which will provide approximately 8% of Anima’s energy demand, beginning in 2020. The company is also seeking further agreements with other green power suppliers to reduce its carbon footprint and energy costs.

A small number of Anima campuses have artisanal wells, which are duly licensed and tested regularly for water quality, and the company is studying the possibility of rainwater harvesting at some of its campuses for use in gardening and cleaning. The vast majority of Anima’s water use otherwise comes from public utilities, and as part of its monthly performance monitoring system tracked by senior management, water use is also measured. Total annual usage is approximately 200 million litres. The company has installed automatic taps in almost all units and has also created a procedure for the use of water saving equipment in all new buildings. Anima is also developing awareness campaigns to sensitize students and workers about the importance of saving water and energy.

Wastewater Treatment

As noted above, most part of Anima’s campuses are connected to public water and sewage systems, and the vast majority of wastewater generated by the company’s operations derives from food services and normal personal use. In addition, under Brazilian requirements, Anima has developed a waste management plan for hazardous substances that could enter the wastewater stream such as chemical reagents or biologically contaminated wastes from laboratories. The company has an appropriate control system in place to ensure that these wastes do not enter the water system, and its functioning will be the subject of enhanced E&S monitoring efforts. Under ESAP action #1, Anima will extend its corporate waste management plan to AGES’s operations in Bahia and Sergipe and to every other campus acquired by Anima.

Solid Waste Management

Brazilian law requires companies to develop and implement a solid waste management plan (Plano de Gestão de Resíduos Sólidos or PGRS), and those facilities related to health services or otherwise generating specialized wastes must produce and abide by a specific management plan including potentially hazardous medical wastes. Most of Anima’s facilities only generate common solid wastes associated with domestic or office use, such as paper, aluminium and plastic containers, printer and toner cartridges, used light bulbs, and wastes related to on-campus restaurants and catering services. Anima has a waste management plan for each of its locations, and it employs licensed waste management companies for the removal and disposal of such at authorized sites.

A small number of Anima campuses have medical, dental, or veterinary training programs, such as UNA-Guajajaras, UNIBH, and USJT, and each of these has a solid waste management plan under which such wastes are incinerated or otherwise properly disposed of by licensed companies under relevant Brazilian regulations (namely CONAMA Resolution 316/2002). Finally, some Anima campuses that have courses or programs in beauty and aesthetics, which produce specialized wastes such as hair dyes or other chemical products that are managed under a separate plan.

During the site visit, it was note that the recently acquired AGES brand has not developed a proper waste management plan. Moving forward, under ESAP action #5, Anima will develop and implement a proper solid waste management plan to AGES’ campuses and to eventual new acquisitions, following PS3 requirements.

Hazardous Materials

As observed in previous appraisal, drugs and chemical storage and supply areas have restricted access and must be inspected and authorized by the local police. Products are carefully organized according to their hazardous properties and a copy of their hazmat record is available in the store. Records of product entries and exits are systematically logged. Storage areas are bundled and have ventilation system either natural or forced by a fan.

However, as noted during the site visit, AGES does not have a hazmat record in place and, in some campuses, it is not clear if reactive chemicals are being segregated from other chemicals of incompatible class. Moving forward, under ESAP action #6, Anima will replicate and implement its hazardous material management plan in AGES’ campuses and ensure that hazardous materials are managed in accordance with good international practices and with the World Bank Group General Environmental Health and Safety Guidelines (Section 2.0 – OHS).

Anima’s facilities ensure accessibility for persons with disabilities (ramps, braille signing, audible and visual alarms), and protecting the safety of occupants and users. As noted, AGES’ campuses does not have yet the safety equipment that are present in most of Anima’s campuses in other regions, including first aid kits and defibrillators, extinguishers, stretchers, escape stairs with reproof doors and escape routes leading to evacuation meeting points. The company informed that such equipment is being ordered and that it will be installed in the recently acquired campuses over the next couple of months.

Anima grants concessions to food service providers who operate cafeterias, small restaurants, and the like. Aside from testing the quality of potable water at its campuses, the client is implementing a system to monitor the basic sanitary practices of such third-party food services and relies on local sanitary authorities for that purpose which seems acceptable. 

Infrastructure and Equipment Design and Safety

Anima locates its campuses in the urbanized centers of cities where it operates, and it seeks sites with greatest proximity to public transport in order maximize accessibility for its student body, who are generally from low-middle to middle-income backgrounds. This greatly minimizes traffic disruptions to surrounding communities. Campuses otherwise have parking facilities for staff and/or sufficient public parking nearby. As reported, the company does not manage any dormitories for student or staff.

With regard to new locations or remodelling of existing campuses, the company abides by Brazilian regulations on ensuring accessibility for persons with handicaps and protecting the safety of occupants and users. Moreover, under the ESAPs for IFC’s investments, the company is required to apply an international life safety code in addition to Brazilian fire safety norms when designing and equipping a new building or finishing/remodelling an existing structure.

Anima has made progress on complying with local fire and life safety requirements. Under IFC’s second investment, Anima has developed and implemented a “Code Design” document, based on National Fire Protection Association’s (NFPA) 101 principles, which includes L&FS requirements for every new construction or significant remodelling.

Based on information received during this appraisal, more than 10 campuses were built or remodelled and entered into operations since IFC’s second investment (2015). All buildings are rented structures owned by third-parties, for which Anima assumed the responsibility of completing and/or remodelling the interiors of unfinished or partially finished shells. While these locations have received or are in the process of receiving their AVCBs, in some cases the work was completed without being certified by an external L&FS expert well-versed in international norms such as NFPA 101. As reported during the appraisal, Anima conducts internal certifications until an external L&FS consultant is hired.

The company will therefore comply with the terms of the second investment by hiring such an expert as referenced above, and under the ESAP (action #7) for this investment, it will commission such an expert to review the buildings finished or significantly remodelled since IFC’s second investment, such as the Paulista and the Pouso Alegre campuses, to perform post construction inspections to verify that the system was installed as required by Anima’s “Code Design”, which follows National Fire Protection Association’s (NFPA) 101 requirements. An action plan to address such gaps – to the extent practicable and justified by L&FS exigencies – will then be developed and implemented as a result of this review.

Security Personnel

Anima employs only unarmed guards at its campuses and offices. The company is also improving its security systems inside and outside the campuses, with the installation of poles for lighting and security cameras to prevent criminality and violence against women. In some units, buses and vans are allowed to park inside the campus to provide greater safety to students. Both students and staff can use Anima’s grievance mechanism to report eventual conflicts and misconduct.

Key stakeholder groups for the project are its students, parents of students, professors and administrative and technicians staff members, contractors, suppliers and residents in the vicinity of each campus. Administrative support offices as well as security entry points at each campus are the key public interfaces to receive external communications including grievances from the public if any; and members of the public can also dial into any campus for general inquiry or to communicate any concerns they may have.

Since 2009 Anima has had a general customer service and grievance mechanism in place, called “Fale com a Gente” (“Talk to Us”). Over the years, the company has seen steady growth in the use of this channel, which suggests that users have confidence in it. In May 2015, the company substituted its in-house grievance management tool for an externally-managed tool that has allowed Anima to track different categories of user contacts, including “complaints,” “requests/questions,” “suggestions,” and “compliments.” This system also automatically prompts Anima staff for follow-up and requires initial responses to users be made within two days. According to the company, the vast majority of users contact Fale com a Gente with questions, requests, suggestions, etc. that do not constitute complaints. These involved customer service issues for students such as document requests, concerns about changes in the government-sponsored student financing program FIES, and questions about payments, student financing plans, return of overpayments, and difficulties with logins and passwords for students using the universities’ online registration and payment systems.

Anima has an extensive array of free or very low-cost services for the communities in which it operates. Free consulting and treatments include Odontology, nursing, psychology, and physiotherapy. Free legal advice is provided in all campus where there is Law School. Veterinary consulting, treatment and surgery is also available.

Stakeholders’ highest concerns take place during new acquisitions or selling of educational institutions. In those transitions the timely engagement with the affected parties (staff, students, parents, contractors, service providers and suppliers) becomes essential to preserve the continuity of the involved institution activities and the overall social license to operate. Open discussions and feedback from affected parties should inform company decisions. Anima has a solid communication strategy to the address expectations of its stakeholders, which involves regular meetings with parents, students, staff and the general public.

The company also reports publicly on its E&S performance through a biennial sustainability report, which can be assessed through the following link: https://animaeducacao.com.br/sobre/

 ANIMA EDUCAÇÃO

Rua Natingui, 862 – 1º Andar, Vila Madalena - CEP 05443-001 - São Paulo, SP – Brazil

Phone Number: +55 11 4302 2611

Contact Person: André Tavares - CFO

Email: andre.tavares@animaeducacao.com.br