Corporate Risk Management

Neoenergia’s Board of Directors, aware of the importance of risk management to achieve strategic objectives, commits to develop all its capabilities so that the relevant risks of all group’s activities and businesses are properly identified, measured, managed and controlled , in addition to establishing the mechanisms and basic principles for an adequate risk-opportunity management.

The Corporate Risk Management division of Neoenergia is coordinated by the Risk Management Superintendence, connected to the Financial Management, and is oriented by the guidelines that follow:

  • Achieve the group’s strategic objectives with controlled volatility, with risk management as a strategic tool to support decision-making;
  • Provide the maximum level of security and guarantees to shareholders;
  • Protect the interests of shareholders, clients and other stakeholders;
  • Contribute to the fulfillment of the Sustainable Development Goals (SDGs) approved by the United Nations, with emphasis on the seventh (Clean and Accessible Energy) and the thirteenth (Action against Global Climate Change);
  • Protect the results and reputation of the Neoenergia group;
  • Ensure corporate stability and financial strength in a sustainable manner over time;
  • Disseminate the risk culture among employees of the Neoenergia group, through communication and training.

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

Integrated Risk Control and Management Model

The Corporate Risk Management General Policy and its basic principles are implemented through an integrated risk control and management model, supported by the Risk Committee and by an adequate definition and establishment of functions and responsibilities at different levels (operational and control), 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 policies, guidelines, limits and risk 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 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 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;
f) Maintenance of an internal control system for compliance with policies, 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;
h) Audit of the integrated model of risk control and management by the Internal Audit Supervisory team.

In addition to Neoenergia’s Corporate Risk Management General, we present the following corporate and business-specific risk policies:

  • Financial Risk Policy
  • Credit Risk Policy
  • Operational Risk Policy for Market Transactions
  • Energy Market Risk Policy
  • Insurance Policy
  • Purchasing Policy
  • Investiment Policy
  • Information Technology Policy
  • Cybersecurity policy
  • Reputational Risk Policy
  • Treasury Stock Policy
  • Occupational Health and Safety Policy
  • Liberalized Business Risk Policy
  • Renewables Business Risk Policy
  • Network Business Risk Policy