Redeia has a Comprehensive risk management system in place in order to facilitate fulfilment of the Group's strategies and objectives, ensuring that the risks that could have an impact on them are identified, analysed, assessed, managed and controlled systematically, with uniform criteria and within the level of acceptable risk approved by the Board of Directors.
The management System conforms to the ISO 31000 standard regarding risk management principles and guidelines and is ongoing and comprehensive in nature. Said management is established per business unit, subsidiary and support areas at a corporate level.
The Group has a Comprehensive Risk Management Policy and general Procedure for comprehensive risk management and control, based on the COSO ERM 2017 Enterprise Risk Management-Integrated Framework that was revised and updated during 2021.
Comprehensive Risk Management Policy
The Board of Directors is responsible for the approval of the comprehensive risk management policy as well as for having full knowledge of the internal control, prevention and information systems and for the regular monitoring of these systems. Twice a year, the Board proceeds to review material risks and the risk control system, independent of the information that it regularly receives from the Audit Committee as part of the monitoring framework the Committee continually performs.
Emerging risks associated with climate
The risks associated with climate change are especially important due to the function of Red Eléctrica as a transmission agent and operator of the Spanish electricity system, since the regulatory and technological changes necessary for the energy transition (required to achieve climate targets) pose a series of challenges and uncertainties. Therefore, due to their potential impact on the Company’s business and their probability of occurring in the long term, they have been identified as some of the most relevant emerging risks for the organisation, which has led to a specific methodology being developed and put in place for their identification, prioritisation and financial quantification.
Among the emerging risks associated with climate change, the physical risks associated with the modification of climate parameters that may affect the facilities or services provided by the Group have been assessed, as well as the risks associated with the energy transition. Said risks are linked to the changes that the fight against climate change entail: regulatory, technological, market and reputational. In addition, as set out in the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), various scenarios have been considered and which are different for physical and transition risks. The most important physical risks are those related to the effect of extreme events (wind) on outdoor facilities (overhead electricity lines) and fires underneath the lines and in the surrounding area of electricity substations. The most relevant transition risks are related to the difficulties in commissioning the infrastructure required to fulfil the objectives of the energy transition. Information on its potential impact on the business and the mitigation measures implemented can be consulted in detail in the Sustainability Report.