Our corporate governance and enterprise risk management systems underpin the sustainability management process.
The Group deploys the Enterprise Risk Management Framework (“Framework”) to identify the most important risks that will act as barriers to achieving its business goals in the short, medium and long term. It sets out a consistent definition of risk and risk tolerance limits to ensure that business units have a common understanding when identifying and assessing risks. The Framework also analyses the financial and non-financial impact arising from sustainability issues. Besides business risks, risks arising from changes in the environment, social issues as well as governance are also identified.
The Group believes in managing these risks well for its long-term sustainability. Accordingly, risk and sustainability come under the oversight of the Board’s Risk and Sustainability Committee (previously Risk Review Committee), supported by Head, Risk & Sustainability. The committee oversees Management in the identification of risks and implementation of risk policies and sustainability strategies. Risks identified are reviewed and discussed with the Risk and Sustainability Committee and endorsed by the Board. Measures have been put in place to manage these risks.
We assess materiality of the relevant aspects in the GRI Standards by mapping them to these risks of the Group so as to have a clear understanding of areas of risks each material aspect posed. Responsibilities for management and reporting were assigned for each material aspect.
We measure a range of operational, financial and non-financial Key Performance Indicators (KPIs) to help manage our long-term performance and achieve our business strategies and plans. To encourage our executives to adopt strategies that are aligned with the long-term interests of the Group, we tie the variable components of compensation and performance appraisals to these KPIs. These KPIs are also linked to the material issues of the Group to help foster risk-related decisions when our business managers pursue economic returns.
Further details on the Group’s risk governance, including responsibilities of the Board, Audit Committee and Risk and Sustainability Committee, can be found in the Annual Report.