Climate change: financial implications, risks and opportunities

Climate change risk management at Norte Energia particularly considers the potential effects on the hydrological regime of the Xingu River—a key resource for power generation in the hydroelectric power complex. We recognize the importance of evaluating future scenarios and their possible operational implications. These risks, although currently classified as having a moderate impact—on a scale ranging from mild to catastrophic—are tracked through continuous monitoring and assessment systems, ensuring a timely and well-founded response to extreme events or changing trends in the region’s hydrological cycle. 

 In order to mitigate the risk related to climate change, specialized tools and specific methodology are adopted to support the decision-making of Norte Energia’s management. 

Norte Energia’s Risk Matrix identifies critical factors related to climate change, such as impacts on the Xingu River flow that diverge from the original hydrological studies, operational limitations due to environmental restrictions, atmospheric discharges that affect operations, extreme events that impact dams, such as extreme floods or droughts, and the need to report aspects of climate risks that may affect the Company’s image and reputation. We also consider the multiple uses of water and the diverse interests associated with this natural resource. 

These factors are aligned with Norte Energia’s business strategy and reflect the Company’s concern about the effects of climate change.