Risk Management

To ensure an effective risk management system across all business segments, CDP and the Group companies subject to its management and coordination activities have established specialised teams and dedicated organisational structures.

CDP also promotes a strong risk culture throughout the Group. The Board of Directors, Senior Management and business units are actively involved in ensuring that commitments undertaken are economically and financially sustainable and aligned with a balanced risk-return profile.

Risk management takes into account the specific characteristics of the activities carried out by each Group entity and is implemented in accordance with the regulatory requirements applicable to each company.

Within this framework, the Board of Directors approves the Risk Appetite Framework and risk policies, while the Risk and Sustainability Committee -  established within the Board - oversees risk management matters, formulates strategic recommendations and assesses the adoption of new products.

Within the Parent Company’s organisational structure, the Chief Risk Officer (CRO), reporting directly to the Chief Executive Officer, is responsible for the oversight of all risk categories and coordinates the activities of the Risk Management, Risk Governance & Support, Compliance & Anti-Money Laundering, Risk Data & Solutions, Credit Assessment & Monitoring, and Equity Assessment & Monitoring functions. A similar structure is adopted by Group companies subject to management and coordination activities, in accordance with the principle of proportionality relative to the scale and complexity of their business.

Risk Categories

The main risks to which CDP is exposed include:

1. Market risks (including equity, interest rate, inflation and foreign exchange risks);
2. Liquidity risks;
3. Credit risks (including concentration and counterparty risks);
4. Operational risks;
5. Reputational risks.

For each of these risk factors, both individually and on an integrated basis, CDP has developed models, policies and procedures to ensure their identification, measurement, management and monitoring, while continuously updating methodologies, policies and systems in line with best practices.

This framework also encompasses ESG risks, which are overseen by the Risk Directorate as part of second-level control activities. Assessment is carried out by a dedicated unit using an internal scoring methodology which, since 2023, has incorporated social and governance dimensions alongside environmental and climate-related factors, supporting more informed investment decisions.

Particular attention is devoted to climate and environmental risks, which the Group monitors and reports in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). This approach aims to strengthen the Group’s ability to assess impacts and integrate these factors into decision-making processes.