Significance
Nowadays, various environments and situations are rapidly changing, especially in the areas of environment, social and governance (ESG), which inevitably affect business operations. Therefore, risk management is a core element in corporate governance. It is also a key factor that BPP has used for governing its business operations in order to prevent losses and stably grow in both strategies and investments. In addition, risk management makes the project construction and production operations meet the target set, creating sustainable values for stakeholders.
Management Approach
BPP’s risk management structure is divided into 2 levels – the corporate level and the business unit level, as follows:
- Risk management at business unit level: To create flexibility and be able to closely monitor various situations, a risk manager of each asset will analyze and evaluate risks in such an asset, then report risk management progress and performance to the Sustainable Development and Risk Management Department responsible for compiling and summarizing risks of each asset before submitting the report to the “Risk Management Committee”.
- Risk management at corporate level: Under the supervision of the Board of Directors through the Audit Committee, the ESG Committee and the Risk Management Committee. The role of “Risk Management Committee” covers stakeholder management and improving the roles and responsibilities regarding risk management and ESG risks at operational level. The Risk Management Committee consists of Chief Executive Officer (CEO) and senior executives with the following important duties.
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- Assessing and managing risks to mitigate any risks possibly affecting BPP’s operational performance.
- Providing policy related supports in order to help mitigate risks efficiently and to create awareness on any risks arisen from the activities implemented by BPP.
- Supporting internal and external resources necessary for efficient risks management.
BPP has announced its risk management policy with continuous updates, including establishing a department with direct responsibility to coordinate with all departments. The aim is to drive effective risk management throughout the organization and to have a mechanism for finding and identifying key business risk issues, placing the ESG-related dimension in the annual plan development process. This is in line with BPP’s strategic direction, connecting to corporate sustainability management. Besides, the likelihood and impacts on stakeholders have been assessed and prioritized prior to defining them as a list of enterprise risks. Then, the responsible officers will be assigned to mitigate risks at the acceptable level by the organization. Moreover, the progress of risk management has been regularly monitored, while risk issues have been continuously reviewed.
In addition, BPP has integrated risk management principles into various processes within the organization in order to create awareness on uncertainty in business operations and to promote risk management as part of operations in preparation for any events arising in the future. In terms of managing risks related to business operations interruptions, the Risk Management Committee has held a meeting to monitor risks and risk management results according to the risk mitigation plan. This includes reporting the results of reviewing risk management systems to the Internal Audit Committee and the Board of Directors on a quarterly basis.
To maximize efficiency in risk management, BPP has integrated risk management into its business plan, putting great emphasis on value creation contributed to the company and its stakeholders and covering ESG aspect. Hence, the risk correlation principle has been utilized to analyze correlations of each risk in both positive and negative aspects.
BPP’s risk management process begins with defining objectives according to the business plan and allocating them into business units, departments and sections. For identifying risks, the operational level employees who have knowledge and expertise in that activity will determine operational risks under his/her areas in detail. The likelihood and impacts of such risks will be assessed along with preparing practice guidelines to mitigate risks possibly arising. Then, the risk management results will be reported to commander-in-chief and supervisors as well as monitoring the progress continuously.
Over the past several years, the integration of risk management into BPP’s business plan has resulted in promoting operational strategies and meeting the targets set. According to new business investments, BPP has thoroughly assessed risks regarding investment returns and ESG issues of each new project. The risk assessment result and risk mitigation plan will be presented to the Investment Committee to ensure that risks related to BPP’s investments are assessed and managed properly.
Performance
- Deploying a risk management system covering all business units equivalent to 100%.
- Coverage ratio of risk management system associated with ESG issues was 98%.
Key Activities and Projects
Document Download
Information and Cyber Security Policy
Appointment of Banpu Group’s Global Information Security Officer (GISO)
Risk Management Committee Charter
Risk Appetite Policy
