Risk Taxonomy
The EDP Group's risk taxonomy aggregates, from an integrated perspective and in a common language, the various risk mappings existing at the level of the Group's various Business Units and is structured around four large families: strategic and ESG, business, financial and operational.
1.
Strategic & ESG
Strategic
ESG
2.
Business
Energy markets
Regulation
3.
Financial
Financial markets
Credit
Liquidity / Solvability
Social liabilites
4.
Operational
Physical assets
Execution of Processes
Systems
Legal & Compliance
Strategic and ESG Risks
The EDP Group closely monitors and reports risks of a strategic and ESG nature, since it believes that, if they materialise, they could have a significant impact, mainly in the medium and long term. Strategic and ESG risks can be broken down into two distinct natures:
- Strategic
- ESG
Business Risks
Business risks include all the risk factors intrinsically linked to the remuneration of the EDP Group's core business of generating, trading, distributing and supplying energy in the various geographies and markets where it operates. Business risks can be broken down into two distinct types:
- Energy markets
- Regulation
Financial Risks
Financial risks include market risk factors complementary to those of the EDP Group's energy business (non-operational) in the various geographies and markets where it operates. Financial risks can be broken down into four different types:
- Financial markets
- Credit and counterparty
- Liquidity/solvability
- Social liabilities
Operational Risks
Operational risks aggregate the risk factors complementary to those of the EDP Group's energy and financial business in the various geographies and markets where it operates, associated with the planning, construction and operation of physical assets, execution of processes, legal systems and litigation and compliance. Operational risks can be broken down into four different types:
- Physical assets
- Systems
- Execution of processes
- Legal & Compliance