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Risk management icon
RISK MANAGEMENT SYSTEM
Company goals icon
COMPANY GOALS
(strategici and recurring)
Risk assessment icon
GROUP RISK ASSESSMENT
Guided by the Enterprise Risk Management
Enterprise Risks (TOP DOWN)
Process Risks (BOTTOM UP)
Cybersecurity
Health & Safety
Fraud Management
Environment
Compliance
Privacy
Management systems
Monitoring Law 262/05
Other functions
Control functions
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Risk events connected with the competitive and regulatory environment, economic cycles, the economic and financial conditions and performance of the markets in which the Group operates, which could influence the Company’s ability to achieve its strategic objectives.

Go to market and financial risks

Risk events connected with malfunctioning processes, procedures, information systems or human resources, resulting in losses / damage to the Company.

Risk events connected with inadequate legal documents / contracts or other situations that may expose the Company to litigation, financial loss and/or reputational damage.

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Risk events generated by counterparties (financial, commercial, industrial, government) with which the Group operates or engages, including the inability to meet the obligations assumed or the possibility that the conduct of such parties may damage Terna’s reputation and/or result in losses or other damages.

Risk events connected with breaches of the law, statutory requirements, regulations and other requirements (internal and external), with a potential impact in terms of fines, financial loss and/or reputational damage

Risk events resulting from natural phenomena (e.g. earthquakes, floods, bad weather, fires, epidemics / pandemics) and human induced events (e.g., theft, sabotage, terrorist attacks and other geopolitical risks).

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OBJECTIVE MATERIAL TOPICS CAPITAL IMPACTED STAKEHOLDER IMPACTED PRIORITY RISKS LINKED TO THE OBJECTIVE MINOR RISKS LINKED TO THE OBJECTIVE
RISK DESCRIPTION RISK CATEGORY MANAGEMENT ACTIONS OPPORTUNITIES
#1 CYBERATTACKS Outside in - inside out icon
CONTINUITY AND QUALITY
OF THE ELECTRICITY SERVICE 		Quality, security and continuity of the electricity service Grid resilience Cybersecurity and protecting privacy Innovation and digitalisation Economic impacts on the community Reducing the Group's CO2 emissions Infrastructure capital icon Financial capital icon Intellectual capital icon Natural capital icon Credit providers Shareholders Community Local communities Electricity service operators Employees The risk connected with a cyberattack, using for example ransomware, that could cause:
  • Loss of visibility of infrastructure;
  • Temporary shutdown of systems;
  • Data loss and/or additional costs for recovery.
Natural / Human- induced events ESG
  • Internet and perimeter security systems and the segregation of IT and OT networks;
  • Consolidated IT monitoring processes (CERT - Computer Emergency Response Team;
  • Awareness campaigns;
  • Crash Programmes for system and grid equipment vulnerabilities;
  • Progressive adoption of secure communication standards.
 More rapid increase in the level of grid security, partly through the progressive consolidation of awareness of the importance of cyber threats, resulting in the switch from response strategies to a proactive approach.
  • Delays in achieving energy transition targets Outside in - inside out icon
  • Inadequacy of the electricity system with respect to the 2025 target to phase out coal Outside in - inside out icon
  • Deterioration in service quality due to inadequate production mix Outside in - inside out icon
  • Difficulties in managing new consumption patterns inside out icon
  • Uncertainty of new flexible resources inside out
  • Loss of visibility and control of the network resulting in service deterioration
#2 INSUFFICIENT AVAILABILITY OF PRIMARY ENERGY Outside in - inside out icon
The risk connected with potential insufficient availability of primary energy (e.g., gas), primarily due to the current geopolitical scenario and the effects of climate change (water crises, drought, etc.).
External / Market risk ESG
  • Participation in the "Technical Committee for the gas system emergency and monitoring" at the Ministry of the Environment and Energy Security;
  • Process of assessing the adequacy of the national and European system;
  • "We are Energy" awareness campaign.
 Strengthened overseas interconnections and an incentive and an incentive to boost the use of renewable energy, accelerating the country's energy transition and independence.
#3 SEPARATION OF THE EUROPEAN TRANSMISSION GRID Outside in icon
The risk connected with extreme weather events / incorrect setup of the structure of the grid in accordance with the n-1 security criterion , with the potential for cascading failures triggering overloads / line failures, critical events and major incidents on the interconnected European transmission grid with separation of portions of the grid and widespread blackouts.
Operational risk ESG
  • Defence plans, rules and criteria (European regulations) common to all member TSOs of ENTSO-E;
  • Technical support for the Ministry of the Environment and Energy Security for the "Italian electricity system risk management plan".
 Further consolidation of Terna's international standing by sharing best practices (the above innovative technologies). Active participation in the search for shared solutions and their subsequent adoption, boosting the resilience of the NTG.
#4 INCREASED SEVERITY OF WEATHER EVENTS Outside in icon
The risk connected with the intensification of extreme weather events (tornados, heavy snowfall, ice, flooding) with a resulting impact on the continuity and quality of the service provided by Terna and/or damage to equipment, machinery, infrastructure and the grid.
Natural / Humaninduced events ESG 		New investment to increase the resilience of the electricity grid and identify mitigation initiatives.
  • Development of innovative technologies - including through structured partnerships with start-ups (“Open Innovation”) - with the aim of monitoring climate events and boosting the resilience of the NTG.
  • Patentability of the above solutions with related non-regulated business opportunities.
#5 SUPPLY CHAIN CRISES AND/OR CHANGES TO THE STRATEGIES OF KEY SUPPLIERS Outside in icon
CUSTOMERS, SUPPLIERS
AND BUSINESS PARTNERS 		Sustainable supply chain Workplace health and safety and workers' rights Promoting the circular economy Human capital icon Natural capital icon Intellectual capital icon Infrastructure capital icon Suppliers Employees Community The risk connected with changes in the strategy of core suppliers as they shift their focus to other, more attractive sectors (e.g., renewable energy, industrial automation), geographical markets (e.g., India) and/or changes to priorities resulting in delays / additional costs in the construction of infrastructure included in the Plan, heightened by the crisis in the global supply chain following the pandemic, the conflict between Russia and Ukraine and the energy transition launched in many countries.
Counterparty risk ESG
  • Initiatives designed to pre-empt any such changes (the inclusion of “notices to proceed”);
  • Increased scouting activity based on a proactive approach and expansion of the supplier base.
 Increase in the Group's reputational capital by helping to create new jobs (Full-Time Equivalents or “FTEs”), made possible by the inclusion of new suppliers in the relevant register.
  • Lock-in of core supplies Outside in icon
  • Bankruptcy of critical suppliers Outside in icon
#6 SUPPLIERS' OPERATIONAL CAPACITY REACHES SATURATION POINT Outside in icon
The risk connected with the ability of suppliers to follow a demanding programme and/or their inability to rapidly adjust their supply chain to meet Terna's increased demands, resulting in delays to the construction of infrastructure included in the Plan.
Counterparty risk ESG
  • Steps to boost capacity in key supply chains;
  • Assessment of the risks associated with each supplier;
  • Bringing strategic supplies in-house (e.g., underground cables).
 Increase in the Group's reputational capital through dialogue and support for suppliers most exposed to the risk of reaching capacity saturation point.
#7 INCREASE IN OBLIGATIONS RELATING TO SANCTIONS IMPOSED BY THE AUTHORITIES
(E.G., UN, EU, USA, UK) Outside in - inside out icon
ENERGY SOLUTIONS /
CONNECTIVITY 		Delivering the energy transition Economic impacts on the community Financial capital icon Infrastructure capital icon Intellectual capital icon Social and relationship capital icon Community Local communities Public decisionmakers and authorities Electricity system operators The difficult external environment, geopolitical tensions and international sanctions imposed by various authorities (UN, EU, USA, UK) on a number of countries could make relations with Italian and overseas counterparties more complicated. The further tightening of sanctions could lead to a reduction in counterparties with whom it is permitted to work and/or greater exposure to international sanctions.
Compliance risk Counterparty risk ESG
  • Due diligence on entities with which the Group has relationships and on the materials and/or services exchanged, with regard to contracts involving exports;
  • Monitoring of the geopolitical scenario;
  • Continuous monitoring of new legislation and focusing on sanctions.
 Development of relations with highly reliable third parties in terms of financial performance, trade compliance and sanctions and, more generally, with a reputation for reliability.
  • Constraints on the development of Non-regulated Activities, due to application of regulated sector approaches/policies Outside in icon
  • Cancellation of or delays to contracts for Non-regulated Activities
#8 TIMING OF COMPLETION OF PROJECTS, ABOVE ALL MAJOR WORKS Outside in - inside out icon
DEVELOPMENT OF THE
NATIONAL TRANSMISSION GRID 		Delivering the energy transition Quality, security and continuity of the electricity service Grid resilience Management of stakeholder relations Environmental impacts of electricity infrastructure on local areas Protecting biodiversity Economic impacts on the community Financial capital icon Infrastructure capital icon Intellectual capital icon Social and relationship capital icon Natural capital icon Community Electricity system operators Public decisionmakers and authorities Local communities The risk connected with delays or missed deadlines during construction, above all of major works. This could have an impact from various viewpoints (e.g., financial, regulatory, reputational and relating to the system).
Operational risk ESG
  • Centralised management of construction processes for major works;
  • Monitoring of the state of completion of works;
  • Careful liquidity management;
  • Organisational model project management, with periodic reviews and progress reports;
  • Definition of the phases of the Project Control process and the related outputs;
  • Strengthening coordination between the Company departments involved in the process.
 Completion of the investment projects in the Industrial Plan is in line with the aim of delivering the ecological transition for the benefit of the system.
  • Unfavourable changes to the regulatory and political framework (e.g. EIA extension) Outside in icon
  • Opposition to Terna's projects from local communities Outside in icon
  • Counterparty risk relating to interconnection works (e.g. Elmed) Outside in icon
  • Delays in implementing post-consent environmental requirements, expert advice and environmental audits of construction sites Outside in - inside out icon
  • Difficulties in handling RES connection requests Outside in - inside out icon
  • Setbacks/inefficiency in project implementation, due to delays in digitalising the design process and in using innovative tools
  • Delays in obtaining consents for projects, and the resulting impact on the investment plan Outside in - inside out icon
  • Scaled-down operations and delays due to possible pandemics/ infections Outside in icon
#9 RECRUITMENT OF PEOPLE WITH TECHNICAL/HIGHLY SPECIALIST EXPERTISE Outside in icon
PEOPLE DE-VELOPMENT
& CHANGE MAN-AGE-MENT 		HR development and wellbeing Advancement of inclusion and diversity Human capital icon Employees Shareholders To achieve the challenging goals set by the Plan, the Group needs highly specialist expertise, primarily in STEM subjects. Labour market trends are, moreover, worsening skill and talent shortages in the kind of candidate with the neces-sary specialist skills and expertise.
Operational risk ESG
  • Expansion of employer branding and recruitment channels;
  • Entry into partnerships with the academic world (e.g. the Tyrrhenian Lab) to accelerate the development of technical and management expertise;
  • Talent management process;
  • Strengthened training plan.
 Increase in Terna's reputational capital helping to retain talent, above all the young, creating a more attractive and engaging work environment for employees. Development of partnerships with universities to identify specific technical and management training programmes in response to the need for new skills and expertise.
#10 WORKPLACE INJURIES/INCIDENTS inside ou icont
HUMAN
RIGHTS 		Cybersecurity and protecting privacy Sustainable supply chain Workpalce health and safety and workers' rights HR development and wellbeing Advancement of inclusion and diversity Management of stakeholder relations Environmental impacts of electricity infrastructure on local areas Social and relationship capital icon Human capital icon Intellectual capital icon Natural capital icon Suppliers Employees Community Local communities Electricity system operators Shareholders The risk connected with serious/fatal injuries and/or incidents that may have consequences for the health of employees and/or contractors and sub-contractors, as well as impeding the Company's efforts to achieve goals relating to safeguarding people's health and having a serious impact on the Group's reputation and credibility.
Operational risk ESG
  • National cultural transformation programme for H&S: "Safety Excellence";
  • Process for qualifying and monitoring contractors and sub-contractors;
  • Worksite safety monitoring plan;
  • Monitoring of regulations;
  • Technical working groups (e.g. Terna and ANIE - National Association of Electricity Companies) on HSE and occupational safety issues across the entire supply chain.
 External promotion of the processes and solutions adopted (e.g., Smart DPI) by Terna and the outcomes achieved with a resulting increase in Terna's reputational capital as a company that cares about workers' human rights. Terna's increased attractiveness to socially responsible investors (SRIs). Positive impact on financial capital of containing cost of premiums paid to INAIL to insure against workplace injuries and occupational diseases among workers.
  • Failure of overseas suppliers to respect human rights outside in - inside out icon
#11 COORDINATION AND GOVERNANCE OF CROSS-CUTTING PROJECTS
INNOVATION
AND DIGITALISATION 		Delivering the energy transition Quality, security and continuity of the electricity service Grid resilience Innovation and digitalisation Reducing the Group's CO2 emissions Economic impacts on the community Financial capital icon Infrastructure capital icon Intellectual capital icon Social and relationship capital icon Natural capital icon Community Electricity system operators Public decisionmakers and authorities Community Local communities Suppliers Shareholders Risk of ineffective coordination between various Company departments involved, and governance of cross-cutting projects and initiatives. Failure to coordinate could lead to reworking, which would negatively affect motivation and collaboration between Company departments.
Operational risk ESG
  • Prompt project monitoring (timeframe, cost, quality) using project management methodologies;
  • Integrated project portfolio monitoring;
  • Prompt management of critical issues at interdepartmental level when needed.
 Promotion of a corporate culture geared towards collaboration and sharing best practices, thereby increasing motivation and cohesion among employees.
  • Critical issues in the process of technological innovation to support management of the electricity system
  • Inadequate use of data analytics and artificial intelligence tools inside out icon
  • Loss of know-how and inefficient management of intellectual property outside in icon
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OBJECTIVE MATERIAL TOPICS CAPITAL IMPACTED STAKEHOLDERS IMPACTED PRIORITY RISKS LINKED TO THE OBJECTIVE MINOR RISKS LINKED TO THE OBJECTIVE
RISK DESCRIPTION RISK CATEGORY MANAGEMENT ACTIONS OPPORTUNITIES
EXTERNAL COMMUNICATION
& BRAND IMAGE 		Business integrity Management of stakeholder relations Social and relationship capital icon Community Local communities Shareholders NO PRIORITY RISKS ASSOCIATED
WITH THIS OBJECTIVE
  • Media coverage that is adverse for Terna outside in icon
  • Deterioration of the Group's image due to employees' inappropriate use of social media channels outside in icon
  • Corporate giving risk
DATA, INFORMATION
& IT SYSTEMS 		Cybersecurity and protecting privacy Infrastructure capital icon Intellectual capital icon Financial capital icon Community Electricity service operators Suppliers Employees NO PRIORITY RISKS ASSOCIATED
WITH THIS OBJECTIVE
  • Compliance with applicable national and European data protection legislation outside in - inside out icon
  • Compliance with NIS Directive 2 (Network and Information Security) outside in icon
  • Malfunctioning of substation digital systems outside in icon
  • Breakdown of ICT infrastructure/services
  • Unavailability of applications / systems / control rooms outside in icon
  • Technological obsolescence of legacy carriers
  • Compliance with Italian and European cyber security regulations outside in icon
  • Computer fraud (e.g. social engineering) outside in - inside out icon
  • Loss of confidentiality and/or availability of data and services migrated to the cloud outside in - inside out icon
REGULATORY BODIES
& OTHER GOVERNMENT STAKEHOLDERS 		Management of stakeholder relations Economic impacts on the community Intellectual capital icon Financial capital icon Community Local communities Suppliers Employees NO PRIORITY RISKS ASSOCIATED
WITH THIS OBJECTIVEO
  • Uncertainty of "Totex/Output-based" regulation outside in icon
  • Non-renewal of the concession (expiry date 2030) outside in icon
  • Changes in the WACC (period 2025-27 and 2028) outside in icon
  • Uncertainties connected with output-based incentive mechanisms outside in icon
  • Infringement of unbundling obligations and regulations (antitrust, AGCOM) regarding Non-regulated Activities outside in icon
  • Critical issues relating to selection of investments/assessment of their usefulness for the National Electricity System outside in - inside out icon
  • Implementation of auction mechanisms for the construction of storage systems - reputational repercussions in the event of critical issues relating to the definition and management of the new rules inside out icon
  • Failure to achieve Dispatching Services Market incentive targets outside in - inside out icon
PHYSICAL ASSET
MANAGEMENT 		Grid resilience Environmental impacts of electricity infrastructure on local areas Protecting biodiversity Infrastructure capital icon Intellectual capital icon Natural capital icon Financial capital icon Community Local communities Employees NO PRIORITY RISKS ASSOCIATED
WITH THIS OBJECTIVE
  • Malfunctioning / failure of grid infrastructure components (e.g. transformers, conductors) outside in - inside out icon
  • Delayed application of new secondary legislation (regulatory / technical oversight) outside in icon
  • Terrorist attacks outside in icon
  • Damage / vandalism / theft relating to plant and equipment perpetrated by third parties
INTERNATIONAL
EXPANSION 		N/A Financial capital icon Shareholders Credit providers Suppliers Employees Community NO PRIORITY RISKS ASSOCIATED
WITH THIS OBJECTIVE
  • Problems related to international expnsion initiatives, resulting in a loss of value outside in icon
  • Ongoing legal disputes in Brazil outside in icon
  • Delays/extra costs related to project decommissioning outside in icon
  • Outage penalties outside in icon
FINANCIAL
MANAGEMENT 		N/A Financial capital icon Shareholders Credit providers Suppliers Business partners Employees Community NO PRIORITY RISKS ASSOCIATED
WITH THIS OBJECTIVE
  • Commodity price volatility outside in icon
  • Adverse medium to long-term interest rate trend (>12 months) outside in icon
  • Downgrade of the Group's rating outside in icon
  • Default / insolvency of financial counterparty outside in icon
  • Fluctuation of short-term interest rates (<12 months) outside in icon
  • Increasing Group financial commitments outside in icon
ENVIRONMENT Sustainable supply chain Innovation and digitalisation Environmental impacts of electricity infrastructure on local areas Protecting biodiversity Reducing the Group's CO2 emissions Promoting the circular economy Social and relationship capital icon Infrastructure capital icon Intellectual capital icon Natural capital icon Suppliers Community Local communities NO PRIORITY RISKS ASSOCIATED
WITH THIS OBJECTIVE
  • Failure to meet emission reduction targets (SBT targets) due to grid development delays outside in - inside out icon
  • Greenhouse gas leakage (environmental accidents) outside in - inside out icon
GOVERNANCE
& ORGANIZATIONAL FRAMEWORK 		Business integrity Governance model effectiveness Management of stakeholder relations Social and relationship capital icon Intellectual capital icon Shareholders Credit providers Employees Suppliers Community Local communities NO PRIORITY RISKS ASSOCIATED
WITH THIS OBJECTIVE
  • Delays in adapting centralised management models to the changing regulatory and business environment outside in icon