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Risk management
GRI 102-11 | 102-15 | 102-29 | 102-30 | 102-31
Our risk management structure includes a
set of regulations approved by the Board of
Directors which is responsible for defining
the internal level of risk taking, establishing
the guidelines and responsibilities that must
be respected by the entire working staff and
ensuring the dissemination of the culture of
risk management to which we are exposed, so
that it is independent, objective and effective.
All business-critical topics are included on
the Board of Directors' agenda, including risk
assessment where applicable, such as decision-
making regarding potential M&A transactions,
annual budgeting, marketing strategies, hedging
proposals and debt and liquidity management,
among others. Our Board of Directors thus
analyzes economic, environmental and social
topics with a minimum annual frequency and
always facing decisions relevant to the business.
In this sense, it is the attribution of the Risk
Management to expose to the Statutory Audit
Committee, the Finance Committee and the
Board of Directors the consolidated view of
the main business risks of the operations. This
evaluation should also contain a diagnosis of
the effectiveness of the key controls (prevention
and mitigation) established and the execution of
action plans that minimize risk.
To reduce our exposure to risks, we seek
to maintain operations under the periodic
maintenance program of equipment, in addition
to financial protection mechanisms such as
insurance contracting and financial hedge.
The Risk Management Policy is the base for
management. The policy expresses principles,
guidelines and responsibilities to ensure
identification, assessment, treatment, monitoring
and communication of risks to the BD. The idea,
therefore, is to allow a reduction in the degree
of uncertainty in achieving the objectives and in
preserving the value and perpetuity of the business.
In risk assessment, we consider potential impacts
on the financial, health and safety dimensions,
communities, environment and reputational
dimensions. The methodology adopted in
risk management is based on internationally
accepted standards, such as the Enterprise Risk
M
Management (COSO-ERM) and ISO 31000 model,
which include the concept of three Lines of
Defense, being:
First line - Represented by the managers in the
business and support areas, who must ensure
effective risk management within the scope of
their direct organizational responsibilities.
Second line - Represented by areas such
as Health, Safety and Environment (HSE),
Information Technology (IT), Risk Management
and Governance and Compliance, which support
the first line, acting in a consultative way for
executive areas, but with independent evaluation
and reporting on risk management and our
control environment.
Third line - Represented by the Internal Audit,
which, through the Audit Committee, subsidizes
the Board of Directors with independent opinions
on the processes and effectiveness of internal
controls.
GROUPS OF MAIN RISKS
Financial risks - Associated with finances,
including market impacts, credit and liquidity in
financial transactions. Considers the potential risk
of financial loss and uncertainty about business
(acquisition, disinvestment, loans, etc.).
Strategic risks - Arising from the possibility of
unsuccessful execution of the strategy, which
compromises the achievement of intended
returns.
Operational risks - Include possibility of
losses resulting from external events or failure,
deficiency or inadequacy of internal processes,
people and technological environment; legal
risk, associated with inadequacy or deficiency
in contracts entered into, as well as penalties
for non-compliance with legal provisions and
indemnification for damages to third parties
arising from our activities.
Regulatory risks - Result from the possibility
of changes in the regulations and actions of
regulatory bodies, at international or local
levels, which can impose increasing competitive
pressure and affect our ability to manage
business efficiently.
We also have means for managing catastrophic
and tail risks, according to the Crisis Management
Manual, and carry out periodic simulations,
involving our Crisis Commission and other key
professionals of the company.
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