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Sustainability Report
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Strategy

4 minute read
Risk Management and Sustainability Governance

Sustainability governance

Our governance structure is composed of: General Shareholder Meeting, Fiscal Council, Board of Directors and its committees (Board of Directors Committees), Audits, Ombudsman’ Office, Executive Board and its committees (Statutory Technical Committees and Executive Advisory or Deliberative Committees).

The Board of Directors has six Statutory Advisory Committees, with specific attributions of analysis and recommendation on certain matters, linked directly to the Board, and the Safety, Environment and Health Committee (CSMS) advises on the establishment of policies and guidelines related to the management HSE strategy, climate change, transition to a low carbon economy, social responsibility, among other subjects.

The composition and rules of operation of the committees are governed by regulations approved by the Board.

We have an Institutional Relationship and Sustainability Department, responsible for driving our trajectory towards important goals: producing affordable, low-carbon energy and strengthening our trust and reputation with our stakeholders.

In addition to the statutory advisory committees of the Board of Directors and the Institutional Relations and Sustainability Department, we have operational, tactical, and strategic forums that make up our HSE Governance, Climate Change and Social Responsibility, so that these matters can be dealt with at all levels of the company.

Compensation associated with sustainability objectives

In the 2022-2026 Strategic Plan (PE 2022-26), we present three top metrics that are used for the variable compensation of all our employees (IAGEE, VAZO and Delta EVA®). These metrics are elements that translate and quantify the attributes of our vision and provide more explicit guidance regarding the main objectives of the company, in order to ensure that activities are aligned with the main commitments established in the plan. Of these three metrics, two are correlated to ESG, the indicator showing compliance with the goals regarding greenhouse gases (IAGEE) and oil and oil product leaks (VAZO), committing the entire company to these goals.

Performance analysis takes place through the Performance Management (GD) process, which assesses competencies and goals. In the Performance Management process, goals are based on objective metrics, broken down from top management scorecards into unit scorecards, seeking to ensure that individual and shared goals are shared by leadership to teams and employees, contributing to the achievement of our main metrics.

Risk management

Our risk management process is coordinated by a corporate area, allowing for the standardization and uniformity of our risk analysis and the management of risk responsibilities.

Identification, assessment, and treatment of risks

The preparation of our Business Risk Matrix is coordinated by the corporate risk management area and involves all areas of our structure to identify and report any types of potential risk, including social, environmental, and economic. This process identifies risks, how likely they are to occur, and their potential impacts, suggesting action plans to deal with them. The impact assessment considers four dimensions: Financial, Image/Reputation, Legal/Compliance, and Environmental/Life.

Using the risk matrix, we identify the main events and sustainability risk factors that could affect our long-term performance.

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