Risk management as a continuous process

Risk management has been integrated into our operating workflow as a continuous process. In the RWE Group, risks and opportunities are identified and classified early on. We evaluate risks according to their probability of occurrence and damage potential and aggregate them at the Group company and Group levels. Risks that share the same cause are aggregated to one position. If a risk can be reduced by taking countermeasures, the residual risk is reported together with the risk-reduction measures. A risk’s damage potential is defined in relation to the operating result and equity of the business unit concerned and the Group as a whole. Risks with a high probability of occurrence or damage potential are mitigated by taking operational measures. Where necessary, we take them into account by taking precautionary steps on the balance sheet, e.g., impairments or provisions. We evaluate and manage opportunities as part of our regular planning process.

We prepare standardized reports on our risks and opportunities for our management and supervisory committees on a quarterly basis. The Executive Board of RWE AG is immediately informed of unforeseen material changes to the risk situation. Our Group Audit Department regularly appraises the quality and effectiveness of our risk management system.