Checklist: 7 Steps to Build a Framework to Manage Risk in the Energy Sector
Aberdeen conducted a study of over 175 respondents surrounding how the energy sector approaches risk management. Specifically, it looks at how leaders in the industry ensure safety and compliance, maintain asset reliability, and outperform their peers in an increasingly complex environment by controlling risk holistically, across the enterprise.
This checklist covers the seven steps to build a framework to manage risk in the energy sector. Explore it and get to know this must-read report even better.
Infographic Summary: 7 Steps to Build a Framework to Manage Risk in the Energy Sector
Company growth and increasing regulations have put a focus on risk management among stakeholders in the energy industry. Also, external events bring to light the importance of having a plan in place. Risk is no longer just a part of doing business; operational risk management must now be integral in a company. Successful companies are moving away from measuring and managing risks one at a time and evaluating their risk landscape holistically. Organizations looking to improve their management of risk should:
View risk as an enterprise-wide challenge. Managing risk across the enterprise develops a unified picture for decision makers and improves the organization’s ability to manage risk effectively. For energy companies, in particular, asset management, EH&S, and production management must be integral parts of the strategy.
- Standardize the risk assessment, quantification, and prioritization processes across the enterprise. This allows energy managers to make meaningful and better decisions regarding operational risk, which Leaders in the industry stress.
- Ingrain risk awareness into the culture. A risk management program relies on the workers to execute; if the workforce doesn’t buy in, the program will fail. Energy Leaders are almost three times more likely to have risk management culturally driven.
- Implement a centralized repository of relevant rules and regulations. The regulatory landscape within the energy sector is evolving. A central repository will address the details of these regulations and their demands in terms of overall governance and oversight.
- Provide real-time alerts of non-conformances to limit the impact of events. One of the most important factors in reducing the impact of an incident is the time required to act. Real-time alerts provide managers with the necessary visibility to make effective decisions.
- Conduct regular reviews of your risk program. As a business evolves, so do the needs and requirements of its operational risk management program. Energy Leaders are 29% more likely than their peers to conduct these regular reviews.
- Utilize software to maximize your operational risk management program. Technology helps sift through the reams of data and highlight the important and relevant information from the useless and unnecessary. Energy Leaders have come to rely on risk dashboards, analytics, and reporting tools to provide the necessary visibility into risk.