Investor Presentaiton

Risk management GRI 2-12, 2-13 | SASB IF-EU-550a.1 65 > Providing and indicating the guidelines, responsibilities, mechanisms and internal proceedings for managing risk factors inherent in our business is the goal of our Risk Management Policy, which allows us to monitor and mitigate such risks more effectively. Our risk management is based on the Enterprise Risk Management Framework system and follows the recommendations from the Committee of Sponsoring Organizations (COSO), which lays down models for the different types of risk, with information cards about matters such as climate and corruption. The Heatmap is a document that presents all these cards and is an important risk monitoring tool at AES Brasil. Based on the Heatmap, we manage the action plan and track Key Risk Indicators (KRIs), in addition to assessing impact and probability for each risk. This document is updated on a quarterly basis. Water risks We have adopted mechanisms for mitigating water risks through three different types of future scenario studies, which are associated with adverse hydrological scenarios. Short-term studies analyze the flow rate and rainfall patterns in the past few years and climate forecasts for the coming months, in order to evaluate the need for establishing hedge plans for the hydropower portfolio. The preparation of the budget planning for the next five year is based on climate forecasts and trends indicated by the Weather Risk Committee, which also indicates actions for mitigating possible impacts on hydroelectric power generation. Multiple Views of Future (MVF) is a study with an up to 20-year horizon that allows us to assess possible impacts from changes in climate patterns. Risk Assessment We monitor our business risks by constantly testing sensitivity to macroeconomic, physical, regulatory and industry scenarios that may adversely impact our operations and results. Management and commitments The Board of Directors is ultimately responsible for evaluating, monitoring and setting out strategies for managing risks and impacts to which we are exposed. The decision-making process of the Board is informed by advice from the Statutory Audit Committee, which is presented with the Heatmap every time it is updated. Control and mitigation proceedings are performed under the coordination of our Risk Office, which continuously evaluates the effectiveness of proposed and in effect action plans, as well as suggests improvements to leaders for enhancing risk management withing the scope of their powers and knowledge. For the operating, financial and information technology segments, we rely on the Internal Audit Department, which reports to the Statutory Audit Committee. It ensures compliance with US Sarbanes-Oxley (SOX) Act, Brazilian law requirements, electric power industry regulatory standards and internal rules and proceedings. By the means of SOX biennial control audits, with controls tested in alternated years, in 2022, we check if our new employees have participated in the compliance onboarding and received AES Values Guide, based on a sample. Click here to learn more about Risk Management Policy 2022 Integrated Sustainability Report > Responsibility aes Brasil

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