Risk management
For Enel Chile, risk management is one of the key tools for defining its business strategy and integrating sustainability throughout the entire value chain.
In carrying out its industrial and commercial activities, the Enel Chile Group is exposed to risks that could affect its performance and financial position if they are not effectively monitored, managed, and mitigated. Therefore, understanding the context is crucial to identifying external and internal factors that may become potential risks across the Company's businesses and functional areas.
Enel Chile has an Internal Control and Risk Management System that brings together the rules and procedures required to identify, measure, manage, and monitor its main corporate risks. In addition, it contributes to safeguarding asset value, improving the efficiency and effectiveness of business processes, ensuring the reliability of financial and sustainability information, including information related to climate change, and ensuring compliance with laws and regulations, corporate bylaws, and internal procedures.
Enel Chile's main ESG risks
The management of Environmental, Social, and Governance (ESG) risks is an integral part of Enel Chile's business model and risk management system. The Company continuously identifies, assesses, and monitors risks and opportunities that could affect the achievement of its strategic objectives, incorporating sustainability, resilience, and long-term value creation criteria. The main risks and the actions implemented to mitigate their impacts and promote their effective management are described below.
Risks associated with Climate Change and Energy Transition
Climate change and the energy transition may affect the activities of the Enel Chile Group. To identify the main risks and opportunities and understand their potential business impacts, the Company incorporates the analysis of physical phenomena associated with extreme weather events and gradual changes in environmental conditions, as well as transition-related phenomena linked to regulatory, technological, competitive, and market changes associated with the decarbonization and electrification of the economy.
To identify and assess these risks and opportunities, the Company considers approaches and methodologies consistent with international sustainability and climate-related disclosure standards, including the recommendations originally developed by the Task Force on Climate-related Financial Disclosures (TCFD) and subsequently incorporated into the standards of the International Sustainability Standards Board (ISSB), as well as elements aligned with the guidelines of the Taskforce on Nature-related Financial Disclosures (TNFD).
Transition risks are associated with regulatory, technological, competitive, and market changes linked to the decarbonization and electrification of the economy. Physical risks are classified as acute, related to extreme weather events, and chronic, associated with gradual and persistent changes in climate conditions.
Extreme weather events may affect the availability and operation of assets and infrastructure, as well as result in higher operating and recovery costs. Likewise, long-term changes in climate variables such as temperature, precipitation, or the availability of natural resources may impact both electricity demand and generation capacity.
The geographic and technological diversity of generation and distribution assets, together with continuous monitoring of climate variables, weather forecasting, and scenario analysis, enable Enel Chile to strengthen the resilience of its operations and better manage climate-related risks.
To further strengthen business resilience, Enel Chile integrates climate and energy transition scenario analysis into its strategic planning, investment, and risk management processes. The Company also conducts climate monitoring activities, weather forecast analysis, water stress management, and adaptation measures aimed at strengthening the resilience of its operations to climate change impacts.
Social risks
Among the main social risks are those related to the health and safety of employees and contractors, talent attraction, development and retention, and diversity and inclusion.
To address these challenges, the Company promotes a preventive safety culture, continuously implements training and capacity-building programs, and fosters inclusive work environments. Enel Chile has a Diversity and Inclusion Policy, a people management model called Talent Strategy, and a Training Policy.
Governance risks
Risks associated with unlawful conduct, corruption, regulatory non-compliance, conflicts of interest, anti-competitive practices, or potential human rights violations are managed through the Internal Control and Risk Management System, complemented by policies, procedures, due diligence processes, and oversight mechanisms aimed at strengthening integrity, respect for Human Rights, and compliance.
In addition, Enel Chile conducts Human Rights due diligence processes throughout its value chain to identify, assess, prevent, and mitigate potential impacts on people, and to establish action plans designed to prevent, mitigate, or remedy identified risks and impacts.
In addition, the risk matrix includes compliance risks and digital technology risks, including:
- Personal data protection and privacy: The increasing digitalization of processes and services entails greater exposure to risks related to personal data protection, information security, and operational continuity. To manage these risks, Enel Chile has implemented a global personal data protection governance model and a personal data protection compliance plan, which includes specific roles and responsibilities, risk and impact assessments, digital tools for mapping applications, processes and risks associated with personal data processing, technical and organizational security measures, and the role of the Data Protection Officer (DPO), thereby strengthening regulatory compliance and protecting data subjects' rights.
- Cybersecurity: The growing interconnection of systems, networks, devices, and digital platforms exposes the Company to risks related to cyberattacks, unauthorized access, service disruptions, and potential impacts on confidentiality, integrity, and availability of information. To manage these risks, Enel Chile has a cybersecurity framework applicable to Information Technology (IT), Operational Technology (OT), and Internet of Things (IoT) environments. This framework includes continuous monitoring, incident detection and response mechanisms, periodic vulnerability assessments, and mitigation plans aimed at strengthening the organization's digital resilience.
- Digitalization and operational continuity: The digital transformation of the business requires ongoing management of risks associated with technological systems, information availability, and operational resilience. In this context, the Company maintains control and monitoring mechanisms designed to strengthen service continuity and the reliability of critical processes, contributing to a more efficient, resilient, and sustainable operation.