Corporate Risk Management

Neoenergia’s Board of Directors, aware of the importance of risk management to achieve strategic objectives, compliance with regulations and for sustainable development, undertakes to develop all its capacities so that the relevant risks of all the group’s activities and businesses are properly identified, measured, monitored and mitigated, in addition to establishing mechanisms and basic principles for adequate risk management.

The Corporate Risk Management division of Neoenergia is coordinated by the Internal Audit and Risk Board and is oriented by the guidelines that follow: Incorporate risk metrics into corporate objectives; Preserve and create results; Endure strategic planning results with controlled risk; Guarantee the interests of shareholders, customers and other stakeholders; Protect the Group’s reputation and image; Monitoring of Risks Associated with ESG+F Targets disclosed to the market; and Ensure stability, financial solidity and sustainable development, in addition to promoting operational efficiency.

Neoenergia’s General Principles of Corporate Risk Management defines the principles, guidelines and structure for risk management, being complemented by specific Guidelines and Limits related to certain risks, corporate functions and business of the group, which includes risk limits/references, updated and approved annually by the Board of Directors.

Integrated Risk Control and Management Model

The General Principles of Corporate Risk Management are implemented through an integrated risk control and management model, supported by the Neoenergia Risk Committee and supported by a community of risks, with formalization of the roles and responsibilities of the members in the Integrated Control and Risk Management System, and in procedures, methodologies and support tools appropriate to the different stages and activities of the model, which include:

a) The establishment of a structure of Risk Guidelines and Limits with established and monitored indicators, as well as the respective mechanisms for their approval and development, reviewing and establishing the risk appetite assumed annually in a qualitative and quantitative manner, in accordance with the objectives established in the multiannual plan and in the annual budgets;

b) Continuous identification of the relevant risks and emerging risks and threats, considering their possible impact on corporate objectives and results;

c) Analysis of these risks, in each one of the businesses and corporate functions, and in a consolidated form in the Group;

d) Measurement and evaluations of risks following consistent procedures and standards common to the group;

e) Analysis of the risks associated with new investments, as an essential element in decision making, assessing their risk-return, including the risks of assets integrity and associated with climate change;

f) Maintenance of an internal control system for compliance with guidelines and limits, through appropriate procedures and systems, including contingency plans necessary to mitigate the impact of risk materialization;

g) Continuous assessment of the suitability and efficiency of the application of a system of best practices and recommendations regarding risks for its possible incorporation in the management model; and

h) Audit of the integrated model of risk control and management by the Internal Audit and Risk Board.

In addition to Neoenergia’s General Principles of Corporate Risk Management, we have the following corporate and business-specific risk Guidelines and limits:

To access Neoenergia’s policies, Click here