Corporate Risk Management
Neoenergia’s Board of Directors has the authority to develop, evaluate, and continuously review the Company’s Governance and Sustainability System, 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.
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The Corporate Risk Management division of Neoenergia is coordinated by the Internal Audit and Risk Board and is oriented by the guidelines that follow:
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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 corporate functions and business of the group, which includes risk limits/references, which are updated and approved annually by the Board of Directors.
Integrated Risk Control and Management Model
The Foundations and Principles are implemented through an integrated risk control and management system, understood as the global operating model for the identification, assessment, control, and management of the relevant risks to which Neoenergia and the other Group companies are exposed. This system is supported by an appropriate definition and allocation of functions and responsibilities across different levels (operational and control), as well as by procedures, methodologies, and support tools suited to the various stages and activities of the System, which include:
a) The establishment of a framework of risk guidelines, limits, and indicators, together with the corresponding mechanisms for their approval and development, reviewing and defining the risk appetite for certain specific risks of the Group companies. These are approved by Neoenergia’s Board of Directors and, where appropriate, are reviewed at least annually, both qualitatively and quantitatively, in accordance with the objectives established in the multiannual plan and annual budgets;
b) The ongoing identification of risks, including the monitoring of emerging risks and relevant threats (including contingent liabilities and other off-balance-sheet risks), with due consideration of their potential impact on the strategy, management objectives, financial statements, and reputation of the Group companies;
c) The analysis of these risks, both within each business unit or corporate function and on a consolidated basis across the Neoenergia Group, for which the use of common criteria for risk measurement, control, and quantification will be promoted;
d) Measurement and control 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 and waste disposal;
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