Risk Management Framework
We utilize an integrated management system approach to identify, assess, characterize and manage biodiversity risks. We mitigate potential impacts through the use of the mitigation hierarchy.
Our governance structure provides board and management oversight of our risk processes and mitigation plans. We provide information about priority biodiversity risks and mitigation measures to the executive leadership champion for biodiversity. We also identify risks by applying the SD Risk Management Standard and mapping them to key categories in the enterprise risk management (ERM) process. Results are shared with category risk owners to inform their assessments of risk ranking and mitigation actions. Cumulative impacts to biodiversity, habitats or ecosystems has been identified as an emerging risk. The ERM process is a direct input into our strategic business planning process.
Read more about our governance structure.
Biodiversity and ecosystems services provide ecological, cultural, economic, recreational and scientific value. Our strategic priorities are to:
- Continue to integrate biodiversity into asset lifetime risk assessments, asset planning and project design.
- Identify, rank and mitigate biodiversity risks through established management processes.
- Identify and implement opportunities for improving biodiversity management performance through metrics tracking and through leveraging technology and innovation.
- Promote continuous improvement through development of corporate guidance and engagement with company staff and external stakeholders.
Biodiversity risks are evolving globally in response to cumulative effects related to human land- and sea-use, direct exploitation of organisms, climate change, pollution, invasive species, and changing priorities and expectations of governments, investors and communities. Biodiversity risks could impact our business through project delays, business interruption, policy or regulatory changes. Potential biodiversity risks for our asset portfolio are related to:
- Restricted land use or restricted access to lease areas.
- Policy changes to address basin level or marine area cumulative effects, limiting land use or restricting lease access.
- Changes related to the impact of physical effects of climate change on local habitats, such as changes in precipitation patterns and temperature.
- Actions by investors and the financial sector including ESG performance and reporting expectations, shareholder resolutions, access to capital and credit ratings.
For our operations, local biodiversity risks are determined by the combination of social, regulatory, economic and environmental conditions which are unique to every basin or offshore marine area. Risks are influenced by the increasing number of species considered to be at-risk or threatened globally and the establishment of protected areas of habitat.
As part of our annual sustainable development (SD) risk management process, mandated by our SD Risk Management Standard, operated assets and major project activities are assessed for potential biodiversity risks including:
- Species characterized as at-risk, endangered, rare, significant, threatened or of cultural value.
- Internationally, nationally, regionally or locally designated protected areas.
- Habitats including rare or threatened ecological communities and regionally unique ecosystems.
- Cumulative effects on habitats, ecosystems or species.
The process is designed to identify potential biodiversity impacts such as changes in species distribution or abundance, habitat disturbance, or changes to habitat intactness. This may be associated with the direct or indirect physical footprint of project development or operations, or through releases, spills or discharges to the environment. Each risk is then assessed using a matrix that evaluates both its likelihood and consequence. Priority risks are included in the corporate SD Risk Register.
Risk Register & Action Plan
For risks rated significant or high, mitigation actions are developed and included in the corporate SD Risk Register. The SD Standard describes the process and requirements for priority risks and mitigation actions that are included in the corporate SD Risk Register.
The 2019 Risk Register includes two categories for biodiversity: Cumulative impacts to habitats or ecosystems and threatened or valued species.
|Risks||2019 Mitigation Actions and Milestones|
|Cumulative Impacts to Habitats or Ecosystems|
|Cumulative anthropogenic impacts to habitats or ecosystems could lead to regulatory restrictions or limitations on access for new developments.||
|Threatened or Valued Species|
|Cumulative anthropogenic impacts in basins or marine areas increase threats to biodiversity and lead to an increasing number of species at risk in regions with company assets or exploration interests.||
* Mitigation applies to both cumulative impacts to habitats/ecosystems and threatened/valued species.
Our corporate Biodiversity Action Plan addresses these priority risks and provides information about the accountable action owner, milestones and target completion dates. Line-of-sight goals for business units and key functions are shown as specific action items within the plan, and progress is reported through our governance structure to the ELT and board.
Read more about our approach to managing sustainable development risks.