Climate change, technological breakthrough and demographic and social change continue to be profound forces that are significantly changing our operating environment. We have studied these trends to understand how they will impact us, what potential business-specific or emerging risks they pose; and how we can seize the opportunities they present as guided by our values and commitments.
Since the markets in which we operate are diverse, our risk management system aggregates the local-specific risks and opportunities monitored across all business units and overlays that with regular emerging risk maps to help us: anticipate our Group level risk exposure; put controls in place to counter threats; and to effectively pursue the set objectives.
However, the way emerging global trends impact on business is often gradual, taking a longer period to unfold, and often in uncertain ways. Conventional risk management tends to include shorter time horizons and may not be able to capture the potential strategic risks or opportunities arising from these global trends effectively. In 2017, we commenced a pilot project to explore how to further integrate our knowledge of the global trends with the process of emerging strategic risks and opportunities identification. The Draft Guidance for applying Enterprise Risk Management (ERM) to Environmental, Social and Governance (ESG)-related risks developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the World Business Council for Sustainable Development (WBCSD), referred to our pilot as an example supporting one of the steps on understanding business context and strategy. We will continue to work on integrating ESG-related emerging risks into our risk management system and will report on our progress in 2018.
Navigate the panels below to find out more on the global trends affecting us and the potential business risks and opportunities they bring. They are also discussed in different sections throughout this Report.