1.4.1Risk Appetite
The Risk Appetite Statement 2021 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 reward, relative to potential opportunities. The measurement of the underlying metrics is done every quarter and presented to the Audit and Finance Committee.
The significant parts of SBM Offshore’s Risk Appetite Statement are displayed below.
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Material Topic |
Activities guided by Risk Appetite, i.e. activities … |
Guidance |
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which are non-compliant with the Code of Conduct and related laws and regulations |
Zero tolerance |
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for which a country or business partner is sanctioned, and/or whose decision makers do not share the same compliance principles |
Zero tolerance |
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causing harm to people, damage to assets or the environment |
No appetite |
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which are violations of SBM Offshore’s human rights standards |
No appetite |
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resulting in ’non-quality’ before, during and after a project |
Limited appetite |
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impacting the retention, development and health of SBM Offshore’s employees |
Limited appetite |
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resulting in balance sheet risk as a result of commercial opportunities for which the bankability cannot be reasonably confirmed |
Limited appetite |
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severely impacting profitability of SBM Offshore |
Limited appetite |
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resulting in an increase of emissions intensity of SBM Offshore’s products and deviations from net-zero ambitions |
Limited appetite |
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exposing SBM Offshore considerably to cybersecurity risks |
No appetite |
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exposing SBM Offshore to severe damage due to application of unproven technologies |
Limited appetite |
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exposing SBM Offshore to significant, unproven commercial models |
Limited appetite |
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resulting in M&A activities with high process safety risks and/or higher emissions |
No appetite |
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Explanation of Guidance |
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Activities for which there is zero tolerance |
Activities with risks for which SBM Offshore has no appetite |
Activities with risks with a limited appetite |
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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 |