1.4.1Risk Appetite
The Risk Appetite Statement 2022 sets the guidance and boundaries for the activities conducted by SBM Offshore in pursuit of its strategic objectives. The Management Board reviews the Risk Appetite Statement annually to ensure that SBM Offshore maintains the balance between risk and opportunity. The measurement of the underlying metrics is done every quarter and presented to the Audit Committee.
The significant parts of SBM Offshore’s Risk Appetite Statement, and their mapping against Material Topics, are displayed below.
Material Topic | Guidance | Activities guided by Risk Appetite, i.e. activities … |
Zero tolerance | non-compliant with the Code of Conduct and related laws and regulations | |
Zero tolerance | sanctioned, and/or with companies whose decision makers do not share the same compliance principles | |
No appetite | causing harm to people, damage to assets or the environment | |
No appetite | non-compliant with SBM Offshore’s human rights standards | |
No appetite | extending the life of a unit beyond its design life if it does not meet SBM Offshore’s health, occupational and/or process safety management standards | |
Limited appetite | with suppliers which do not align with SBM Offshore’s strategic goals | |
Limited appetite | impacting the retention, development and health of SBM Offshore’s employees | |
Limited appetite | resulting in balance sheet risk as a result of commercial opportunities for which the bankability cannot be reasonably confirmed | |
Limited appetite | severely impacting profitability of SBM Offshore | |
Limited appetite | deviating from the path to achieve SBM Offshore’s net-zero target by 2050 | |
No appetite | exposing SBM Offshore to cybersecurity risks | |
Limited appetite | exposing SBM Offshore to damage due to application of unproven technologies | |
Limited appetite | exposing SBM Offshore to unproven commercial models | |
No appetite | resulting in M&A activities with high process safety risks and/or higher emissions |
Explanation of Guidance | ||
Activities for which there is zero tolerance | Activities with risks for which SBM Offshore has no appetite | Activities with risks with a limited appetite |
Refusal to accept any activity breaching this risk appetite | Risks within activities to be avoided with appropriate actions | Risks within activities to be mitigated and monitored |