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PTInterview: Elera improves climate risk management
The energy sector is both sensitive to climate change and strategic for the transition towards a Net-Zero economy. Within this context, Elera Renováveis, one of the main companies in the sector in Brazil, has had WayCarbon as a partner since 2020 to support it in the ESG and climate agenda. The company uses Climas, WayCarbon’s climate management and ESG software, to optimize the management of its greenhouse gas (GHG) emissions and is one of the success stories of how technology can help on this journey.
In 2021, a study was carried out to identify the climate risks to which its assets were exposed and adaptation measures were recommended. “Assessing the opportunities and risks of climate change is fundamental to our success in creating long-term value and to improving our commercial and financial planning”, explains Marcela Denir Rissardi, ESG Manager at Elera, for the WayCarbon blog.
This year, the organization detected the need to update the analysis and once again relied on WayCarbon. “Due to the characteristics of the business, our portfolio is constantly updated, so one of our challenges today is to ensure that risk studies and adaptation plans are consistent with reality”, says Rissardi. Check out the full interview:
- In general, what were Elera’s main challenges when seeking WayCarbon at the beginning of the partnership and what are the current challenges that led to hiring the new scope?
In 2021, due to the nature of our operation, we were already continuously monitoring the weather conditions of our portfolio, but we felt the need to understand in greater depth the physical and transition climate risks to which Elera’s assets were exposed, as well as what adaptation measures would be necessary. The work carried out during this period marked the complete diagnosis of the portfolio and allowed us to take some measures to adequately manage these risks, which were the main challenges at that time.
Due to the nature of the business, our portfolio is constantly updated. Therefore, one of our challenges today is to ensure that risk studies and adaptation plans are consistent with reality. In relation to 2021, we gained maturity in managing our risks, which allowed the scope of the project in 2024 to gain complexity, criticality and a greater pragmatism perspective. The next step is to develop an adaptation plan with effective and assertive recommendations in light of opportunities and risks. We always seek to incorporate advances in climate science, standards and best practices in the way we manage and report our indicators.
- Entering the scope of climate risks and adaptation, why is the subject considered strategic by Elera?
Assessing the opportunities and risks of climate change is fundamental to successfully creating long-term value and improving our commercial and financial planning. The identification of climate risks is integrated into our global risk management process, where each regional Brookfield Renewable company is responsible for identifying risks across all activities under its jurisdiction, using a complete and integrated assessment process for both existing assets, as well as potential investments.
Seasonal climate variations, changes in wind patterns, solar radiation and precipitation pose operational challenges, and with an adaptation plan considering the specificities of each technology and location, we will gain precision to implement measures, such as reinforcing infrastructure, diversifying sources and review of contingency plans.
Mitigating potential operational impacts and future repair and maintenance costs protects our investments and contributes to long-term sustainability in the renewable energy sector.
- What are the main results obtained in the partnership between WayCarbon and Elera on the risk and ESG agendas?
Addressing this challenge requires a proactive and collaborative approach from different parties to drive the transition towards a more resilient energy system. The partnership with Waycarbon, which has professionals with extensive experience in the sector and the topic, gives us support to accelerate this agenda and gain assertiveness in decisions.
Looking at practical results, we hope to gain maturity in reporting these risks to Elera’s management, ensuring that all elements of the Risk Management Program are being effectively executed, including the preparation of a risk matrix, an estimate of impacts and recommendations for governance processes, metrics and goals, considering adherence to IFRS S2 (International Financial Reporting Standards, with a focus on climate) to compose Elera’s strategic and executive plan. In addition, we will be able to create internal subsidies with key stakeholders, such as banks and insurance companies, in order to demonstrate risk reduction and possible reductions in subscription costs.
- How do you see the role of the energy sector in combating climate change?
The transition to a low-carbon economy is the main business challenge of this decade. Aligning businesses with the 1.5°c trajectory demands clear positioning and an objective view on risks and opportunities, and the transition of the Brazilian energy matrix considering a diversity of renewable sources is certainly the path to reducing greenhouse gas emissions and can position ourselves as leaders in the transition worldwide.
The free market has been paving the way for the decarbonization of carbon-intensive sectors, as institutions can choose the origin of the energy they consume. Greater electrification across all sectors to meet emission reduction targets and a focus on energy security increase opportunities for hiring clean energy development projects.
The future is promising, but it is important to remember that energy production involves a complex value chain, and at this point, it is important that renewable energy companies are focused on promoting emission mitigation initiatives in the so-called “Scope 3”, in addition to preserving the ecosystems in which the assets are located.
