Enterprise Risk Management

As an integral part of its Internal Control and Risk Management System, the Acea Group has set up an Enterprise Risk Management (ERM) framework, with a view to integrating the risk management process on an ongoing basis.
The aim of ERM is to guarantee an effective control over the entire universe of principal risks to which the Acea Group, owing to the nature of its business and the strategies adopted, is potentially exposed, ensuring that the Group’s overall exposure is duly managed in keeping with the Business Plan and Sustainability Plan objectives.
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The risk model

The Risk Model, which reflects the array of risk categories to which the Acea Group is potentially exposed, is derived from a careful analysis of both the socio-economic and business context in which the Group operates and the Business and Sustainability Plan objectives.
The Risk Model’s logic of representation provides for various risk type aggregation levels, with increasing granularity, based on the following elements:

  • Risk drivers: provides an indication regarding the risk source characteristics (exogenous, endogenous or associated with the Group’s guideline activities)
  • Risk category: this groups together the risks ascribable to a specific operating procedure/corporate activity or having as common characteristic the same external risk source
  • Risk type: this concerns the aggregation of risk scenarios, of a similar nature, based on a logic of prevalence that allows the risk event to be catalogued

The Acea Group risk model

Risk management process within the Acea Group

Enterprise Risk Management is the tool used by the Board of Directors and Management, through a structured process of analysis and management as regards the risk-opportunity factors to which the company is exposed, to enhance their ability to implement strategies and achieve business objectives via the conscious undertaking of risk.

ERM comprises the following main Risk Management phases 

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Infographic about the risk management steps in Acea Group

Identify the main risk/opportunity factors

Measure risks in terms of probability and impact on business performance and objectives

Identify the risk management strategies and the counter-measures to be put in place

Monitor the trend in risk profile and the effectiveness of established responses

  1. IDENTIFY - Identify the main risk/opportunity factors.
  2. ANALYZE - Measure risks in terms of probability and impact on business performance and objectives.
  3. PRIORITIZE & RESPOND - Identify the risk management strategies and the counter-measures to be put in place.
  4. MONITOR - Monitor the trend in risk profile and the effectiveness of established responses.

Risk categories

Owing to the nature of its business, the Acea Group is potentially exposed to various categories of risk, above all competitive and regulatory risks, risks concerning natural events and climate changes, financial market risks (external risks) and operational and environmental risks specific to each business sector, Information Technology risks and Human Resources risks (internal risks).

Risks associated with the Covid-19 health emergency

The Covid-19 emergency situation has also impacted the analysis of risks and identification of related management procedures. Right from the beginning of the pandemic, we put in place a series of actions to safeguard all stakeholders, from time to time adapting to developments in the situation. In the area of employees’ health and safety, from February 2020 we adopted various prevention and protection measures, among which we mention smart working (which involved over 85% of the company population), remote support initiatives, medical control activities and screening campaigns. Insofar as concerns our customers, we undertook to respond immediately to the new requirements that emerged, for example by continuing to guarantee the services offered to customers and enhancing the capacity of digital channels. With regard to investors, bearing in mind that the Group’s EBITDA is 85% generated by regulated activities and that the regulatory frameworks governing the Group’s businesses have not undergone any significant changes, no major uncertainties emerged concerning repercussions of a financial nature.

Lastly, even during this emergency phase, the pursuit of sustainable objectives remains a priority: we intend to take advantage of the opportunities that will derive from an acceleration of investments in infrastructures and renewable energy sources, particularly in connection with the European Green Deal and Recovery Fund programmes.

For further information on all the risks and uncertainties to which the companies in the Acea Group are exposed, please read our  2020 Consolidated Financial Statement.

For further information on our central monitoring stations for particular risk categories, please read our  2020 Report on corporate governance and ownership structures.