Corporate Risk Management

A key process for making strategic decisions

Risk management allows us to identify alerts and opportunities in time to achieve our strategic objectives, projects and TGI processes. In addition, it ensures the identification and analysis of key elements for decision-making, as well as the application of effective controls.el análisis de elementos claves para la toma de decisiones, así como la aplicación de controles efectivos.

Why is this important?

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Thanks to this management, we identify creative and innovative solutions, in order to generate operational efficiencies that enable the materialization of the strategic pillars of our company in the short and medium term.

During 2020, this management was essential, because it allowed us to guarantee the continuity of the provision of the gas transportation service to all our clients despite the Covid-19 pandemic, complying with all biosafety protocols for entry into the territories.

Furthermore, it facilitated the development of the Project and Process Reactivation Plan, thereby generating synergies and guaranteeing the activation of critical tasks for the operation of the infrastructure, the identification of early warnings and their timely management. Thus, we were able to guarantee a good relationship with the local authorities and ensure access into the territory for the execution of the contingency plans of the projects.

How do we manage it?

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At TGI, we focused on 2020 on strengthening current capacities and, at the same time, developing innovative businesses to make operations more efficient by reducing costs and improving competitiveness, and on maximizing opportunities in gas transportation by acting on supply and demand.

Our Risk Management Model was aligned with these initiatives as a way of anticipating events that generate uncertainty (negative impact) on the achievement of objectives, or which generate opportunities (positive impact) to enhance compliance with the organization's strategy .

We analyze the impacts of the implementation of these initiatives and opportunities from the following criteria: reputational, operational, financial, commercial and human. Hence, we ensured that the risk management identified mitigation plans given the adverse situations that would impede the execution of our strategy and the fulfillment of corporate objectives.

In this scenario, the risk materialization index in our company during 2020 was 4/15, due to the identification of four risks:

Risk No. 15 "Pandemic due to Covid-19, which affected critical business functions." The risk controls to mitigate the situation were fully implemented and reviewed periodically with Senior Management.
Risk No 7 "Breach of the Business Plan". It was generated in a secondary way or in a cascade due to risk 15, which caused significant impacts on the achievement of the strategic objectives and financial indicators of our company, mainly due to the 7% decrease in budgeted income.
Risk No. 5 “Social incidents in the execution of TGI operations and projects”. There were no significant impacts on the fulfillment of the value promise milestone of the Cusiana Phase IV expansion project. The impact was reflected in nine days of cessation of activities within the project schedule.
Risk No. 11 “Non-use of the Ballena-Barrancabermeja infrastructure”. It generated impacts such as the decrease in the contracted capacity of the Ballena-Barrancabermeja section by 19%, which caused the loss of 23% of revenues, mainly due to the non-entry of new sources of gas in the system.
(Own) (102-15) ) Each of these materialization events had an analysis of causes that made it possible to identify the sufficiency of the controls and the continuous improvement of the process against risk (See annexes) .

At TGI, we evaluate risk management performance according to the level of implementation of mitigation controls and their strength.

(102-11) (102-15) Our Control Architecture, in its Three Lines of Defense, ensures the participation of all TGI employees in risk management. The Audit Management is in charge of reviewing it every year, identifying improvements to the process and evaluating compliance with the Risk Management Policy and Associated Procedures.

What we achieved in 2020

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Our risk management index in 2020 was 88.93%, considered as stable.

Compliance with 102% of the Corporate Plan for the 2020 term.
End of the year with 100% continuity of the operation, reactivation of 100% of the projects without massive contagion, with control in the work fronts and without vulnerabilities that would threaten the security of the corporate network, or a cyber risk, without sentences unfavorable or penalties.
Out of 138 strategic risk controls defined for 2020, we achieved a compliance level of 95.86%, thereby ensuring their full implementation during said year. The remaining 4.14% correspond to controls that:

End their execution in 2021 due to their link with regulatory aspects and formalization of procedures in Senior Management instances;
They were approved in August 2020 and their scope of implementation covers the year 2021, ensuring more than 50% of their execution until December 31;
Within the framework of fraud and corruption risks, the guidelines for some controls are developed at the Corporate level and adopted at each subsidiary.

Risk management in 2020 facilitated the development of the Project and Process Reactivation Plan, guaranteeing the activation of critical tasks for the operation of the infrastructure, the identification of early warnings and their management on time.
Risk management in 2020 facilitated the development of the Project and Process Reactivation Plan, guaranteeing the activation of critical tasks for the operation of the infrastructure, the identification of early warnings and their management on time.
Risk management in 2020 facilitated the development of the Project and Process Reactivation Plan, guaranteeing the activation of critical tasks for the operation of the infrastructure, the identification of early warnings and their management on time.
Risk management in 2020 facilitated the development of the Project and Process Reactivation Plan, guaranteeing the activation of critical tasks for the operation of the infrastructure, the identification of early warnings and their management on time.

Challenges for 2021

In the long term, we face the challenge of having a mature risk management system and a methodology applicable to all processes and areas.

Ensure that our risk management process allows us to mitigate these to consolidate the strategy, technology transformation and business development, responding to the new strategic direction.
Support the development of the different business lines through risk management, allowing better decision-making, making a risk inventory for each of them.
Support the development of the different business lines through risk management, allowing better decision-making, making a risk inventory for each of them.
Strengthen the risk management culture at all levels of the organization, in its processes, projects and daily activities, in order to continuously improve risk-based decision making.