Material topics

The materiality assessment is conceived as a practice to define the Environmental, Social and Governance (ESG) priorities that companies must manage in line with their sustainability principles and their Corporate Strategy, while incorporating the visions and perspectives of their stakeholders.

 

The material issues steer the organization's management towards objectives and goals that contribute to fulfilling our higher purpose.

 

In 2023, GEB updated its material issues with the double materiality approach, which identifies and prioritizes the Company's impacts, risks and opportunities from a perspective of impact materiality (of GEB on the environment) and financial materiality (of the environment on GEB).

This exercise was developed using as reference some guidelines from the European Sustainability Reporting Guidelines 1 ESRG1 of the European Financial Reporting Advisory Group (EFRAG) as well as the Universal Standard 3: Material Issues 2021 of the Global Reporting Initiative GRI, as well as other documents, methodologies and guidelines related to the evaluation of impacts, risks and opportunities.

 

 

 

 

 No.

Issue

Description

Topics included

1

Climate Change

Identifying, assessing and managing risks and opportunities associated to climate change (adaptation and mitigation), development of initiatives focused on energy transition.

Adaptation to climate change

Mitigation and compensation of climate change

2

Biodiversity

Development of actions focused on the protection and conservation of biodiversity and ecosystem services in the areas of operation of GEB and its subsidiaries, including strategies based on the mitigation hierarchy (avoid, minimize, rehabilitate/restore and offset).

Ecosystem services

Protection and conservation of biodiversity

Mitigation and compensation of environmental impacts

Ecosystem restoration

3

Environmental performance

Define and implement strategies to protect biodiversity and prevent, mitigate and restore and/or offset environmental impacts caused by the activities of GEB and its subsidiaries along its value chain. In addition, it includes the efficient use of natural resources, air quality, and the management of energy, water and waste.

del aire, y la gestión de la energía, el agua y los residuos.

Use of natural resources

Atmospheric emissions

Energy efficiency

Water management

Waste management

4

Just energy transition

Prioritization of investments in projects for generation using renewable and non-conventional renewable energy sources, and the development of strategies and initiatives that contribute to accelerating energy transition and low carbon development.

Low carbon technologies

Competitive energy.

5

Shared prosperity

Building conditions of well-being, progress and economic development in the communities of GEB and its subsidiaries’ areas of operations through the operations, infrastructure and services provided and the social investment programs implemented

Territorial development

Access to products and services

Relationship with communities

6

Talent management and well-being

Implementation of practices focused on the development, attraction, retention, well-being and capacity-building of GEB employees and its subsidiaries in a way that ensures compliance with strategic objectives.

Working conditions

Employment practices

Adequate salary

Strengthening skills

Talent attraction and retention

Corporate culture

7

Health and safety at work

 

Managing employee and contractor safety and health, including prevention of injuries and illnesses caused by work conditions, as well as promoting the well-being of the employees.

Health and safety at work for employees and contractors

8

Human rights

Fulfillment of commitments and implementation of mechanisms to care for, prevent, mitigate and protect the Human Rights of GEB's stakeholders and value chain. Includes the management of diversity and inclusion.

Diversity, equity and inclusion

Due diligence

Training and awareness

Human rights risk management

9

Responsible supply chain management

Responsible supply chain management, including ethical, environmental and social standards, promoting the hiring of local employees and suppliers, training and development of suppliers and contractors.

Local supply

10

Ethics and transparency

Promote integrity, transparency and ethical behavior in the GEB and its subsidiaries to strengthen the trust and long-term relations with all stakeholders.

Responsible business conduct

Conflict of interests

Corruption and bribery

Taxation

Information management

11

Corporate governance

Implementing mechanisms for decision-making that generate profitability, competitiveness, transparency, trust and sustainability for all the Group’s companies, through a robust Corporate governance.

Management of subsidiaries

Ownership structure

Transition of boards of directors

12

Risk management

Comprehensive risk management, including the identification, assessment, definition and implementation of controls, monitoring and review, in order to prevent and mitigate the materialization of them.

Critical incident risk management

Emergency preparedness

Process security

Third party actions

13

Cybersecurity and information security

Proper management and handling of information security, prevention of cyber-attacks, privacy protection and confidentiality of stakeholder data.

Information security

Cybersecurity risks

14

Innovation

Development and implementation of technological and innovative products and services that allow the incorporation of new sources of sustainable value according to the superior purpose and dynamics of the markets in which GEB and its subsidiaries operate.

Digital transformation

Innovation ecosystem

Culture and knowledge management

New businesses

New technologies

15

Economic performance

Economic performance, financial stability and sustainable growth.

Business profitability

Generation of value for investors and shareholders

 

 

 

Material issues for creating business value

Of the identified material issues, Climate Change; Shared Prosperity; and Occupational Safety and Health can have a high impact on GEB's business and the generation of long-term value. These three topics are integral to GEB’s corporate strategy and act as catalysts in achieving its higher purpose and vision for 2030.

 

Climate Change

Shared Prosperity

Occupational Safety and Health

  • GEB’s operations contribute to a fair energy transition by expanding clean energies and mitigating climate change through the transportation and distribution of natural gas and electricity to end consumers.
  • The climate strategy is a crucial pillar of GEB's corporate strategy. This strategy directs our operations, affirming our role as a leader in the energy transition in Latin America. The strategy includes mitigation and adaptation actions.
  • Effective climate change management allows us to take timely action, identify and mitigate risks (physical and transitional), and seize opportunities. A robust climate strategy facilitates access to capital and long-term value creation.
  • Inadequate management of climate topics can lead to the materialization of operational, physical, financial, legal, market, and reputational risks.
  • Sharing prosperity with the local communities ensures building of relationships based on trust and a positive legacy in the territories of our operations. This in turn allows the projects and activities to be carried out according to the planned timetables and budgets, and contributes to the timely management of risks that may affect the continuity of the business and the services provided.
  • For the Group, the success of its business strongly depends on its capacity to generate prosperity and well-being for the communities in the areas of influence of its projects and operations.
  • The progress of the communities, a transparent relationship with them, and the creation of prosperity are necessary conditions to build transparent relations, create favorable conditions for sustainable development in the territories, mitigate social risks, and guarantee the viability of the company's projects and their long-term operation.
  • For Grupo Energía Bogotá and its subsidiaries, protecting the lives and safety of its employees is a top priority. “Life Comes First” is the main corporate value. Our commitment to Occupational Safety and Health is based on the premise that "decent work is safe work."
  • Superior performance in well-being and occupational health and safety are critical determinants of our business success and talent retention and attraction. These factors significantly influence our capacity for long-term value creation.
  • Accidents at GEB workplaces and a lack of healthy conditions are strategic risks. They could potentially lead to severe or fatal injuries, involve substantial economic costs, such as fines, penalties, and lawsuits, and disrupt the projects’ schedules and progress.

Risk

Risk

Cost

Climate Change

Shared Prosperity

Occupational Safety and Health

  • GEB's climate strategy is based on the identification and evaluation of risks and opportunities linked to climate change, robust governance, and the constant enhancement of emissions accounting and reporting processes.
  • This strategy is guided by the Climate Change Policy, which includes commitments to climate change mitigation and adaptation, and to the energy transition.
  • GEB and its subsidiaries have designed emission reduction pathways, technically and economically prioritized through Marginal Abatement Cost Curves (MACC).
  • The identification of adaptation measures for infrastructure in response to extreme weather events and permanent climate changes is currently in progress.
  • In addition, GEB prioritizes participation in projects associated with renewable energy sources.
  • GEB's shared prosperity strategy enables the implementation of its Sustainability Strategy and ensures the achievement of its higher purpose: “Improving Lives through Sustainable and Competitive Energy.”
  • Its implementation contributes to the creation of prosperous territories through 3 axes of action:
  • High-impact social and environmental investment for the improvement of the environment, local development, and the well-being of communities.
  • Recruiting local labor under conditions of equality and diversity.
  • Aligning its operations with local businesses and enterprises, favoring their formalization and inclusion.
  • All GEB companies develop high-impact local initiatives. An example of this is the "Legacy for the Territories" program that has an investment of over USD 8 million and aims to strengthen the capacities of more than 20,000 people in topics relevant to the energy transition through employment, entrepreneurship, and education projects.
  • GEB has established a strategy for cultural transformation in Occupational Health and Safety. This strategy promotes prevention and care for the integrity and lives of direct employees and contractor personnel. The strategy identifies, communicates, and prevents risks with a "zero accidents" vision for Occupational Safety and Health and Risk-Based Process Safety for Process Safety.
  • The OSH strategy is supported by an Occupational Safety and Health Management System (OSHMS). The system was designed in accordance with the international standard ISO 45001 and best international practices. It includes annual goals and indicators for all GEB subsidiaries to measure their performance, act preventively, and establish controls to minimize risks.
  • GEB and its subsidiaries implement programs that promote accident prevention and encourage healthy habits and lifestyles, and the overall well-being of its employees.

Climate Change

Shared Prosperity

Occupational Safety and Health

Achieve emissions reductions at least equal to those established in the Nationally Determined Contributions (NDCs) of the countries in which GEB and its subsidiaries operate.

• Colombia: 51% by 2030.

• Peru: 30% by 2030.

• Brazil: 43% by 2030.

• Guatemala: 11.2% by 2030.

 

Achieve carbon neutrality in all GEB operations by 2050.

The following targets have been set to improve the conditions for progress and social development in the communities within the operational areas of GEB and its subsidiaries:

  • Strengthen 20 local entrepreneurial ventures by 2025
  • Train 20,086 people from the areas of influence in the energy transition by 2030
  • Reach 1,500 beneficiaries of the Social Impact Bond in Bogotá by 2026
  • Benefit 88 students with awards in research and innovation in areas relevant to GEB by 2030

Materialize the "Zero Accidents Vision," beginning with fatal accidents and achieving significant reductions in lost-time work accidents:

  • "Zero fatal accidents" in the operations of GEB and its subsidiaries (of Group employees and contractors).
  • In 2025, have a Lost Time Injury Frequency Rate (LTIFR) of one (1).

In 2024, the company objectives approved by the Board of Directors included a sustainability objective (Positive environmental and social impact).

 

The variable compensation of all employees, including the CEO and GEB executives, depended on the attainment of seven company objectives. Among these, "Positive environmental and social impact". This objetive has 6 milestones, one of them is associated to the reduction of GHG emissions.
 

In 2024, the company objectives approved by the Board of Directors included a sustainability objective (Positive environmental and social impact).

 

The variable compensation of all employees, including the CEO and GEB executives, depended on the attainment of seven company objectives. Among these, "Positive environmental and social impact". This objetive has 6 milestones, four of them associated to shared prosperity ( 1) implementation of methodologies to measure social impact, 2) development of technological tool to improve social and environmental management, 3) implementation of the program "Legacy for the Territories", and 4) integration of sustainability criteria in supply management processes).

In 2024, the Board of Directors of GEB approved the improvement of the company's occupational safety and health performance, as measured by the Lost Time Injury Frequency Indicator (LTIF) and the Performance and Proactive Performance Indicator (PPI).

 

The variable compensation of all employees, including the CEO and GEB executives, depended on the fulfilment of seven company objectives.  Among these, "Talent and Culture". This objetive has OSH indicators which contributed 10% to the total.

 

 

Material Issues for external stakeholders

 

During 2023, Grupo Energía Bogotá updated its material topics using the double materiality approach, which identifies and prioritizes the Company’s impacts, risks and opportunities from a perspective of impact materiality (the impact of GEB and its subsidiaries on the environment) and financial materiality (impact of the environment on GEB and its subsidiaries).


The 10 identified internal and external stakeholder groups participated in the assessment process of potentially material topics from the impact materiality approach. Additionally, a preliminary assessment was carried out of ESG topics related to impacts, through stakeholder consultations (surveys, interviews, and field visits), obtaining 92 responses. Each group evaluated GEB's potential material topics based on:

 

  • Significant (both positive and negative) social, environmental, economic, and governance impacts of GEB and its subsidiaries.
  • Critical social, environmental, economic, and governance risks/challenges facing GEB and its subsidiaries currently and in the long term.
  • The main opportunities (social, environmental, economic and governance) identified in the context that would help increase the positive impacts of GEB and its subsidiaries.

    As a result, and aligned with previous materiality exercises, the most relevant material topics for external stakeholders continue to be "Shared Prosperity" and "Just Energy Transition"

 

 

Shared prosperity seeks to improve both prosperity and social welfare conditions at the local level, as well as growing the Group.


Impact: positive
Stakeholders: Environment, society, consumers/end users and external stakeholders (e.g. supply chain, contractors).

 

Relevance on external stakeholders

 

  • GEB's communities and external stakeholders expect its operations to leave a positive legacy in its spheres of influence, contributing to local development and narrowing social disparities. Therefore, shared prosperity is a prerequisite for the successful development of projects and the expansion of GEB. 
     
  • Local communities expect the Group's businesses to contribute to social equity, to transition to a fairer energy system, to boost the local economy, be part of the supply chain, strengthen local institutions, hire local workforce, promote entrepreneurship, implement social projects, and enhance the environment.  
     
  • The actions of GEB that promote shared prosperity create opportunities for progress and strengthen trust-based relationships with people and communities, founded on respect for life, human rights, environmental protection, and diversity.
     
Impact measurement methodology

Grupo Energía Bogotá uses the SROI (social return on investment) methodology to measure the impact of its social prosperity initiatives.

Methodology:
In 2024, the SROI estimation methodology was updated to incorporate improvements aimed at strengthening the traceability, consistency and accuracy of the indicator.

The SROI calculation only applies to projects with clear objectives, a defined scope, and direct beneficiaries within communities. This makes it possible to anticipate significant, measurable impacts that contribute to development and well-being. It does not apply to initiatives where beneficiaries cannot be identified or quantified, or to initiatives oriented towards diagnostic, evaluation or formulation processes. This is because, by their nature, these initiatives do not generate direct impacts that can be measured as social return.

Due to the nature of the indicator, the SROI is not comparable between subsidiaries. However, a consolidated SROI estimate for the Business Group is calculated based on the indicator obtained from each subsidiary.
The resulting value for 2024 was 3.4, which means that for every dollar invested, 3.4 dollars of social return were generated.

Scope: social impact initiatives of GEB and its subsidiaries. 

Process:
 
1.    Define the methodology, objectives, period of analysis and geographical context, as well as the projects, companies and programs to be analyzed.
2.    Identify all the stakeholders that may be impacted, both directly and indirectly.
3.    Mapping of the impacts generated. This is to identify the investments made in each sector and stakeholder (inputs, outputs and outcomes).
4.    A literature review to support and qualify the outcomes found.
5.    Economic valuation of the identified impacts through specific methodologies (e.g. transfer of benefits, time series, propensity score matching, calculation and factorial differences).
6.    Qualitative and quantitative analysis, and calculation of the cost-benefit ratio.

Impacts evaluated:
Positive impacts, such as changes in household welfare, reductions in academic failure and dropout rates, improvements in academic performance, differential salaries, perceptions of security, beneficiaries' utility, increases in marginal land productivity, reductions in mortality and morbidity, reductions in costs and increases in human capital benefits, among others, are evaluated.

 OutputResults
Impact measurement results
  • More than 370,000 beneficiaries
  • More than COP 55 billions In social investment.
  • More than COP 38 billion executed in work for taxes.

 

The SROI enables us to evaluate the value generated for society from each dollar invested in initiatives that promote social prosperity.  In 2024, Business Group SROI was 3.4. This means that for every dollar invested in shared prosperity projects, 3.4 dollars' worth of value is generated for society.


 

 

GEB´s corporate strategy is based on its ability to lead the energy transition in the territories where it operates and create value for its various stakeholders.


Impact: positive
Stakeholders: Environment, society, consumers / end users, external (e.g. supply chain, contractors).

Relevance on external stakeholders

 

  • External groups have expectations regarding GEB's contribution to a fair and inclusive energy transition, through the diversification of its energy mix, responsible environmental management, and management of the risks and opportunities associated with climate change.
     
  • They expect an increase in the reliability of electrical systems, an improvement in air quality, and a reduction of the carbon footprint.
     
  • Considering the social realities and challenges present in the territories where the GEB operates, it is expected that its business activities will contribute both to the national energy transition and to local development.
     
  • The Group's operations are focused on promoting well-being and development through the generation, transportation, and distribution of renewable energies and natural gas as a transitional fuel. It also seeks to promote social equity, drive sustainable mobility, improve energy efficiency, and promote the progressive integration of hydrogen, and other initiatives.

 

Impact measurement methodology

The impact of natural gas on well-being, health, the environment and air quality is evaluated through our own measurements and the social progress index calculated by Centrum University and Cálidda.

 The social progress index takes three dimensions into account: basic human needs, foundations of well-being, and opportunities. The following twelve components are evaluated: nutrition and health; water and basic sanitation; housing; personal security; access to knowledge; access to information and communications; health and well-being; environmental sustainability; personal rights; personal freedom and choice; tolerance and inclusion; and access to higher education. The results are presented on a scale ranging from 0 to 100.

 

 OutputResults
Impact measurement results

1,970,641 households connected to natural gas.

 

  • More than 2 million households are connected to natural gas.
  • More than 320,000 vehicles are converted to natural gas.
  • 920 industries establishments and more than 33,000 commercial establishments connected to natural gas.
  • COP 997,712 millions invested

El uso de gas natural entre 2005 y 2030 evitará:

 

  • 3,303 premature deaths
  • 1,578 hospitalizations
  • 1,280,495 cases of asthma avoided.
  • 1,595 million soles saved in hospital expenses and lost productivity.
  • Avoid 102 million tons of CO2eq, equivalent to the carbon contained in 187,097 hectares of lowland rainforest.
  • Achieve higher social progress index in households with natural gas (54.7 vs. 40 in others).

 

 

 

 

 

 

Stakeholders & materiality

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