Community Risk Management
Local risks and impacts related to our operations and projects are assessed and managed at the business unit (BU) level.
Governance and Strategy
We have a comprehensive governance framework that extends from the board of directors, through executive and senior management to the working levels in each BU. Priority risks and mitigation measures are provided to the executive leadership champions for stakeholder engagement and human rights. They are also mapped to key categories in the enterprise risk management (ERM) process and shared with ERM risk owners to inform their assessments of risk ranking, corporate actions and mitigations. The ERM system and mitigation actions are reviewed regularly by executive leadership and the board of directors. Read more about our sustainable development governance structure.
While engaging with people who may impact or be impacted by our business is a cornerstone of our operations across the globe, stakeholder engagement priorities, risks and their mitigation solutions are typically distinct at the local level. For each project, we engage with our stakeholders to understand their values and interests, learn their expectations and then incorporate what we learn into our business plans and actions. We seek early and frequent engagement with our stakeholders to build trust, garner respect and develop mutually beneficial relationships. Two-way conversations allow us to best understand the needs and concerns of communities and collaborate for mutual benefit. In dispersed communities, we identify key stakeholders and engage with them face-to-face to ensure that our activities are understood and that we consider their feedback. Where there are opportunities to bring stakeholders together, we work with multi-stakeholder groups. By integrating community input into business decision-making processes, we are able to manage social risks.
Social risks at the community-level could result from potential project, operational and cumulative impacts to community safety, human rights, infrastructure, services, land use, environmental quality (air and water quality), cultural heritage, business opportunity and employment. Risks could impact our business through project delays, business interruption, policy or regulatory costs, reputational damage, increased cost of capital or reduced demand for our products. Social risks for our asset portfolio are related to:
- Community opposition based on negative social and/or environmental impacts, including cumulative impacts.
- Community expectations of economic benefits, such as local hiring and local content.
- Public policy that restricts access to, or development of, natural gas and oil resources.
- Investor and financial sector expectations about environmental, social and governance (ESG) performance and reporting.
- Negative consumer sentiment.
Assessing Social Risks and Impacts
Our stakeholder identification process is a key component of social risk assessment. Each business unit is responsible for identifying stakeholders to understand their perspectives and concerns. The relationships of stakeholders and their priorities are considered to identify any potential points of collaboration or conflict. We then prioritize key stakeholders and develop an engagement plan to address concerns and maintain our focus on developing mutually beneficial relationships. By having open dialogue, we identify and address the potential impacts associated with our operations.
This is done through our integrated sustainable development (SD) risk management process where existing and planned exploration and production and major projects are examined against the physical, social and political settings of our operations. Social assessments consider:
- Impacts to community, including human rights, Indigenous peoples’ rights, labor rights, security, public health, political and economic issues.
- Stakeholder priorities.
- Stakeholder opposition to company activities.
- Risks and impacts related to supplier and contractor activities.
- Cumulative effects of company and/or industry activities.
Social risks are identified and described by subject matter experts in each business unit, operated asset and project. Each risk is then plotted on a matrix that evaluates both its likelihood and consequence. In evaluating the consequence severity, we consider potential impacts on employee and public safety, socio-cultural and economic impacts to stakeholders, environmental impacts, and reputational and financial implications. Each business unit manages its own social risks, priorities and regulatory requirements, enabling tailored, region-specific business goals to address unique challenges and opportunities.
To support our business units in operationalizing our Stakeholder Engagement Principles, we provide Social Performance Guidance with recommended internal processes and external engagement to understand and address stakeholder priorities.
|Stakeholder Engagement Principles||Social Performance Guidance|
Corporate Risk Register and Action Plan
Social risks rated significant or high are included in the corporate SD Risk Register, and action plans are developed to track mitigation activities for each risk. The 2019 Risk Register includes two social categories: infrastructure targeting and local intervention. Mitigation actions and milestones address the potential impacts and risks to stakeholders.
|Risks||2019 Mitigation Actions and Milestones|
|Delayed or restricted access to pipeline infrastructure results in constrained market access and/or production limits.||
|Project delays, business interruptions and damage to reputation due to local actions regarding economic benefits or environmental effects.||
Action plans are developed for each of the priority risks and provide information about the accountable action owner, milestones and target completion date. Line-of-sight goals for business units and key functions are shown as specific action items within the action plans, and progress against the plans is reported through our governance structure to the ELT and board. Stakeholder engagement plans may also include mitigation actions. Mitigation actions can range from single or multiyear specific projects to routine and long-term programs. In addition to actions undertaken by the business unit, there may also be actions managed at the corporate level.
Read more about our approach to managing sustainable development risks.