Risk Management Framework
Risk is inherent in CLP’s business and the markets in which we operate. We aim to identify risks early on so that they can be understood, managed, mitigated, transferred or avoided. This demands a proactive approach to risk management and an effective Group-wide risk management framework.
CLP’s risk management framework comprises four key elements:
1. Risk management philosophy;
2. Risk appetite;
3. Risk governance structure; and
4. Risk management process.
CLP’s overall risk management process is overseen by the Board through the Audit & Risk Committee. CLP recognises that risk management is the responsibility of everyone within the Group and hence throughout the company, risk management is integrated into business and decision-making processes, including strategy formulation, business development, business planning, capital allocation, investment decisions, internal control and day-to-day operations.
In light of this, CLP's Risk Management Objectives is two-tier:
At a strategic level, CLP focuses on the identification and management of material financial and non-financial risks inherently associated with the pursuit of the Group’s strategic and business objectives. In pursuing growth opportunities, CLP aims to optimise risk/return decisions as defined and quantified through diligent and independent review and challenge processes.
At an operational level, CLP aims to identfy, assess, evaluate and mitigate operational hazards and risks in order to create a safe, healthy, efficient and environmentally-friendly workplace for its employees and contractors while ensuring public safety and health, minimising environmental impact, and securing asset integrity and adequate insurance.
Read more from CLP’s Risk Management Report
As we consider the potential impacts or implications of the global trends on our business, we can identify important risks that are applicable to the Group, although the pace and significance of them will vary depending on the jurisdiction.
See Trends and Drivers about the global trends, risks and opportunities, and our actions taken.