SUSTAINABLE RELATIONS

Committed to the SDGs

PEACE, JUSTICEAND STRONGINSTITUTIONS

CLIMATEACTION

CLEAN WATERAND SANITATION

AFFORDABLE AND CLEAN ENERGY

DECENT WORK AND ECONOMIC GROWTH

LIFE ON LAND

Margarita Rosa Giraldo GallónDirector Corporate Relations

"ISAGEN is a company formed by human beings for the service of other human beings, seeking to establish sustainable relations with its stakeholders, based on dialogue and collaboration, privileginkg common good over private interests and contributing to the creation of shared value. This conception encourages us to know them, understand their needs, agree on commitments and identify possibilities to move relations beyond a transactional and informative level in order to coordinate competences, work together, become more competitive,

and create shared value. Our stakeholders are strategic partners”.

STRUCTURE

Practices for sustainable relations

Commitments with our stakeholders

Comprehensive assessment of relations

Communication and dialogue themes

Challenges

Weagreedoncommitmentswithourstakeholdersthatdeterminethescopeoftherelationshipandthetwo-wayparticipation,whichisthebasetocreatesharedvalueaccordingtotherealityandneedsofbothparties.

Weimplementedamanagementsystemtoincorporatestructured,systematicpracticesthatstrengthensustainablerelations.Webeganitsimplementationwithstakeholdersamongemployeesandsuppliers.

Weprogressedintheincorporationoftheprojectformanagementofpetitions,claims,grievancesandrequests(PQRSfortheSpanish)inordertoaddresstheminacoherent,clear,timelyandcomprehensivemanner.

Withintheframeworkofintegralassessmentofrelationswithstakeholders,wewererated82.8intherelationsmarker,whichpositionsusatexcellencelevel,showingthetrustthatstakeholdershavewithrespecttotheCompanyandtheirwillingnesstoworkinacollaborativemanner.

2016MILESTONES

In performance of our business activities we have the chance of engaging with different society groups, affecting their lives and learning from them. We seek to build relations based on ethics, trust and opening, address concerns timely, offer dialogue possibilities and be accountable for fulfilling commitments with stakeholders and business management. Our aim is to have relations that gradually become more structured, systematic and productive, being aware that good-quality relations are the base to prevent the materialization of business risks. Therefore, we have established guidelines and practices that contribute to their strengthening, the fulfillment of business objectives, and the well-being of society.

Following are the main results and challenges of 2016:

Policy for Engagement with Stakeholders

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and expectationsWe identify our stakeholders´ needs

Stand in their shoes

ethics, trust,respect and openness

We base relations on We establish various levels of relations

governance in ethical,

We promote responsible corporate

employment, environmental andeconomic

We establish timely and accurate communication and we promote

opportunities for dialogue

a comprehensive and systemic approach that seeks to

go beyond 'transactions'

We undertake relations based on

collaborative networks We establish

lessons learned regarding relationsWe systematize the results and

complaints and claimsWe address requests,

process to disclose timely and integrated information to stakeholders regarding

the fulfillment of the commitments

We implement an accountability

PRACTICES FOR SUSTAINABLE RELATIONS

Economic growth

Social development

Environmental protection

Respect forhuman rights

InvestorsCreate economic value,

promote trust-based relations, uphold good governance

practices and secure Company's sustainability.

Mobilize group interest initiatives, participate in preparation of regulatory proposals and public policies that contribute to sustainability.

Unions and associations

Contribute to a comprehensive development of workers involved, so a portfolio of opportunities and participation scenarios, which contribute to business growth and generate a positive impact on their families and the society at large.

Workers

Insert projects and operate power plants with a future vision, and as

an opportunity for sustainable development for the communities,

promoting dialogue and institutional strengthening.

Communities and institutionsin the influence areas

Create partnerships, share knowledge, and contribute to institutional

strengthening, regional development and society well-being.

Civil society organizations

Contribute to client sustainability accompanying their energy management to achieve preference and loyalty.

Clients

Strengthen trust-based relations, cooperation and mutual benefit to thus contribute to the sustainability of the Company and its suppliers.

Suppliers

Promote knowledge transfer, good practices and encourage

research for development of capacities and undertake mutual

benefit initiatives.

Knowledge community

We updated commitments with stakeholders in accordance with the methodology of international standard AA1000 on Accountability for strengthening of relations with our surroundings. We started the segmentation or identification of each group's profile and defined the nature of the relationship, which may range from transactional, informative and aimed at meeting requirements to one of joint work and collaboration. This last level requires the definition of a commitment to determine the scope of the relationship and the two-way participation, which is the base to create shared value according to the reality and needs of both parties. The commitments were ratified by the stakeholders during the dialogues held in 2016.

Relations are framed by environmental protection, social development and economic growth. We included other cutting edge aspects of the relationship: respect for human rights.

COMMITMENTS WITH OUR STAKEHOLDERS

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Management of relations with stakeholders

We progressed in the implementation of a management system that enables us to work in a systematic, coordinated manner the relation with our stakeholders, promoting a business culture aimed at providing a comprehensive response to their needs and expectations. This system is based on international standards AA1000 and it also includes assessment of results, accountability relative to commitments, and systematizing learning in a virtual circle to thus contribute to the attainment of a common goal: sustainability and creation of shared value. In 2016 we focused its implementation on the practice of engagement with employees and suppliers, a process that included analyzing system components and identifying opportunities to strengthen relations with these two stakeholders.

Management of Petitions, Complaints, Grievances and Requests (PCGR)

We progressed in developing the corporate project for management of PCGR, using various references, which included the following:

Protocol titled "Grievance and Complaint Mechanism - Focused on Human Rights and IHL" of the project Colombian Guide on Security and Human Rights.

ISO 10002 - Guidelines for Complaints Handling in Organizations.

The purpose is to respond in a clear, coherent, timely and comprehensive manner to communications sent by our stakeholders through the various assistance channels available. In 2016 we implemented a more standardized and simple assistance scheme, added to the definition of policies, procedures, practices, tools, assessment mechanisms, etc.

PRACTICES FOR SUSTAINABLE RELATIONS

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Journalist Network for Sustainable Development

We support different activities performed by the Journalist Network for Sustainable Development that are promoted by CECODES. The network intends to raise awareness and increase knowledge on the exercise of responsible journalism that contributes to sustainability. During the year, journalists from local, regional and national levels participated.

We should highlight the continued holding of 12 virtual conversations on basics of Corporate Social Responsibility, launching of the Network in Cali, granting of three scholarships to journalists, keeping of the web portal as a space for interaction and knowledge, development of publications and workshops with students in the final semesters of Social Communication and Journalism, and others.

Comprehensive assessment of relations

Every two years we assess the perception of our stakeholders related to the way in which we have jointly build opportunities for improvement and continued work on relevant two-way issues. In this regard, in 2016 we combined in a single evaluation qualitative and quantitative aspects, including the following:

Relations: intent of stakeholders of maintaining longer-term relations with the Company.

Brand: made up of levels of knowledge, positioning and emotional connection with the Company.

This project will enable us to have a more structured accountability mechanism with our stakeholders regarding PCGR associated with different sustainability aspects such as environment, labor practices, human rights, transparency and others.

Culture to the service of stakeholders

Employees are the managers of relations with the stakeholders. Therefore, we established a management of change plan intended to strengthen a service culture that makes work more significant. The fundamental drivers of this culture are collaboration, interaction, recognition of human beings, and service leadership. Based on these definitions, we performed 12 training activities for executives, employees and teams responsible for engagement with stakeholders.

Contents that make sense and transcend

We pursued our goal of going beyond information in our corporate contents and concentrated on promoting learning and reflection on global and domestic issues. We promoted among our stakeholders ethics and peace building practices, care for water and protection of biodiversity, Sustainable Development Goals (SDG), and others. In 2016 we sent to our stakeholders 103 massive communications via email related to different business management issues.

Good Energy bulletins sent to our stakeholders to promote good sustainability practices

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Dialogue with community members from the areas of influence of generation projects, in Medellín.

In this evaluation 1,333 participated in surveys and 153 attended dialogue meetings, through mechanisms such as in-depth interviews and group sessions. That results obtained are positioned as excellent and very good, fulfilling targets set with respect to each indicator, which reflects the good relations that we have built with our stakeholders, based on trust and dialogue. We had the possibility of strengthening our close relationship with stakeholders.

The corporate communication channels were considered adequate and efficient by stakeholders as, in their opinion, they inform in a clear, timely manner, allowing for a faster direct contact and immediate solution of requirements.

Theresultsoftheevaluationofengagementwithstakeholders

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Reputation: level of appreciation of the stakeholders concerning the Company’s management in areas of leadership, social performance, financial performance, environmental performance, corporate governance and business ethics.

Communication channels: perceived quality of communication channels of the Organization.

Indicators to assess relations (2014 – 2016)

Year Relations index Brand Reputation Perceived quality of corporate media

2016 82.8 58.9 86.5 88.92014 80.9 59.4 87.5 87.1Scale Excellent Verygood Excellent Excellent

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Employees Development opportunities for employees Participative ethics New Anti-bribery, Anti-Corruption and

Anti-Fraud Policy (PAAA) SOX finance transparency practices Coordination with majority shareholder Year balance and challenges for next year Safety prevention Sustainability practices Sustainable Development Goals (SDG) Quality of relations

Dialogue with members of ISAGEN’s virtual community, at the Sogamoso power plant, Santander.

Suppliers

Social innovation, ethics and collaboration Supplier development Identification of sustainability risks Sustainability minimals Peace and post–conflict Occupational health and safety Supplier Management Model Hydroelectricity Sustainable Development Goals (SDG) Quality of relations New Anti-bribery, Anti-Corruption and

Anti-Fraud Policy (PAAA)

Financial service suppliers

Clients

Financial results on forecasts Current and projected cash flow Credit markers Financial inclusion Good governance practices and business

ethics Sustainability practices Sustainable Development Goals (SDG) Quality of relations

Service quality and reliability Energy Market Technical services and projects Integrated Energy Management (IEM). Business Ethics Alternative Energy Climate change Innovation. Co-generation and self-generation Sustainability practices Sustainable Development Goals (SDG) Quality of relations

We have mechanisms for communication and feedback defined for each stakeholder whereby we discussed, and interest themes that, at the same time, are part of material or relevant aspects that guide our business management. It is worth noting thatwe complied with all legal requirements related to information protection. The foregoing is intended to promote transparency as an explicit commitment of our management model, always following the guidelines on protection of personal data and internal policies on corporate governance.

Listed below are the main dialogue themes with our stakeholders:

COMMUNICATION AND DIALOGUE THEMES

427

Investors

Unions and associations

Financial soundness Change in the shareholding Business Ethics System Sustainable Development Objectives Business results Social and environmental management Sustainability minimals Energy market situation Business management Sustainability practices Sustainable Development Goals (SDG) Quality of relations

Energy Market Industry regulations Energy accessibility, availability and

acceptability Renewable energy and energy efficiency Ethics and Transparency Construction of infrastructure projects Sustainability practices Sustainable Development Goals (SDG) Quality of relations

Opinion generators

Communities and institutions in the influenceareas

Sustainability practices Sustainable Development Goals (SDG) Quality of relations Human rights and peace Business Ethics Natural resources and biodiversity Water Management

Impacts from power plant and hydroelectric projects

Planned and sustainable territories Use of Law Transfers Education Self- management formation Local and regional employment

generation Peace and human rights initiatives Management of watersheds and natural

resources Fauna and Flora protection Partnerships and collaboration Institutional strengthening and

coordination Women empowerment Agro-ecology Sustainability practices Sustainable Development Goals (SDG) Quality of relations

Civil society organizations

Knowledge communities

Human rights and peace Environment Ethics and Transparency Biodiversity Water Management Impacts from power plant and

hydroelectric projects Sustainability practices Sustainable Development Goals (SDG) Quality of relations

Construction of infrastructure projects Renewable energy Human Development Sustainability practices Sustainable Development Goals (SDG) Quality of relations

Communication and dialogue Find out more:

COMMUNICATION AND DIALOGUE THEMES

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"Companies such as ISAGEN have helped us to create a virtual circle of dialogue, entrepreneurship, proposals and consensus so that we can all strengthen a better world; a sustainable world where balance among economic development, environmental protection and social inclusion is real (...) what is most important is to break away from private interests and rather generate a broader sectoral proposal. Together with affiliated companies, we have achieved the path to prevent a disruptive

or disagreement position”.

IDEAS WITH ENERGY

UNIONS AND

ASSOCIATIONS

Mauricio López Executive Director

Global Compact Colombian Network

Technical Vice President ANDESCO

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"This relationship has been headed not only at becoming involved in social problems in the area, but also at building and strengthening institutionality. In my opinion, the Company's responsibilities and commitments go beyond its organizational purpose and have allowed for building scenarios that help communities and territories to solve their problems and achieve viability to act as a business (...) The key and principle of ISAGEN's management has always been a permanent dialogue with all stakeholders

and I think that is part of the value added of companies like this”.

IDEAS WITH ENERGY

Sergio Andrés Tobón Director

Social Development PROANTIOQUIA

UNIONS AND

ASSOCIATIONS

430

"As part of the virtual community, I have been fortunate to have direct communication and feedback with the Company as to its management (...) it's great that people who follow social networks have the chance to state: this company has been coherent (...) This relationship strengthens to the extent that there are options for interaction to analyze the needs of both parties (...) social networks have become a citizen participation mechanism, which has improved in as much as people can move within

a given context or situation”.

IDEAS WITH ENERGY

OPINION GENERATORS

Juan Felipe Montoya User of social networks

Continue the implementation of the Management System for Relations with Stakeholders in the communities and institutions in our influence areas and the civil society organizations.

Conclude the implementation of management practices for addressing Petitions, Complaints, Grievances and Requests (PCGR) that includes the incorporation of a technological tool, the adjustment of in-house practices and the socialization of PCGR guidelines among the various stakeholders.

Define a work plan for strengthening corporate accountability, promoting feedback opportunities inside and outside the company for closing gaps and further sharing of contents with stakeholders.

Compliance

Implementing the Management Systems for Relations with Stakeholders.

Carry out a comprehensive study to measure in an effective, consolidated manner corporate relations with stakeholders, combining qualitative and quantitative evaluations.

Continue promoting opportunities with stakeholders relative to good sustainability practices such as water governance, climate change, peace and human rights, etc.

2016 CHALLENGES

2017 CHALLENGES