Risk management Eneco Group

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Risk management is essential for the realisation of our strategic ambitions. We identify and mitigate the risks that may impede the achievement of our goals, which enhances our chances for success.


Risk management is an important element of our operations. Our risk policy includes the careful weighing of the risks that Eneco runs and the guarantees that we give to counter these risks. We specify how risks are monitored, the control measures that we implement and the manner in which we monitor the effectiveness of and compliance with our internal rules. The Board of Management is responsible for the risk management of the company as a whole. It has delegated this responsibility to each of the business management teams of the underlying segments. The managers concerned are supported in this responsibility by functions such as safety and compliance ("second line"). The overall coordination lies with the Internal Control department. Internal audit carries out additional audits ("third line") to obtain a reasonable degree of certainty with respect to the control of risks. Internal Audit reports the results to the Board of Management and the Audit Committee of the Supervisory Board.

Risk and performance management framework

  1. The Strategic Framework (SFW) for Eneco Group gives direction to all the business activities aimed at realising our company’s mission.
  2. Financial strategic forecasts help the Board of Management to weigh strategic and financial goals and risks.
  3. The possible impact of significant risks on the financial strategic forecasts is assessed, as well as their impact on our financial control framework, which specifies the main financial restrictions on the strategy. These restrictions include minimum requirements for the ratios for solvency and cash flow in relation to net debt, using a credit rating of around A (Standard and Poor's) as the guideline. Sensitivity analyses, including single event stress tests and scenario analyses are used for this purpose.
  4. Risk control systems specified for each level encompass specific mitigating measures. The ‘heat chart’ is used for internal communication with respect to risks.

ECRS

The COSO-ERM is the worldwide standard for Enterprise Risk Management. Therefore, this model has been selected as the basis for Eneco’s internal risk management and control system, which goes by the name Eneco Control & Risk System (ECRS). The first version of the ECRS was introduced in 2005. Each year, the ECRS is adapted to keep up with the latest developments with respect to risks, business developments and external influences. The ECRS consists of a risk assessment methodology, a set of control measures and a methodology that management can use to determine the effectiveness of the control measures (see In Control statement).

Audit Risk Committee

Each management level has its own Audit Risk Committee: at Board of Management level and at segment level (senior management teams). The risk assessments and the status of control measures and mitigating activities are discussed periodically by these ARCs. The Audit Committee of the Supervisory Board monitors the adequate functioning of the risk management activities as a whole.

Enterprise-level risk limits have been translated into various specific policy principles and guidelines that apply within Eneco in areas such as safety, trade mandates, authorisations and the code of conduct.