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ENECO ENERGY Enterprise Risk Management (ERM) Vision
 To create and protect value through the identification and management of key business risks as ENECO ENERGY Group pursues its growth strategies.

Objectives of ERM within ENECO ENERGY Group
 ENECO ENERGY is committed to establishing an organization that ensures ‘managing risks’ is an integral part of the Group’s activities and a core capability where ERM is used to support strategic and investment decision-making. In ENECO ENERGY, ERM implementation aims to achieve more specifically the following objectives:

  • Promote good corporate governance and a sound system of internal controls;
  • Embed a structured and disciplined approach to identify and assess key risks and their potential impact on the achievement of the Group’s and Business Groups’ business objectives;
  • Develop and embed a corporate risk culture within ENECO ENERGY;
  • Enhance compliance with relevant legal and regulatory requirements;

Principles of ERM within ENECO ENERGY Group
In line with leading industry practices, ENECO ENERGY adopts the following ERM principles:

  • ERM is an integral part of all organizational processes, which shall be embedded in all activities, processes and systems;
  • ERM is effected by people – not simply policies, questionnaires, forms and checklists etc, but requires active participation from staff at every level of the Group;
  • ERM advocates managing risks holistically rather than in silos or isolation within areas or functions;
  • ERM is based on the best risk information available;
  • ERM is dynamic, iterative, responsive to change, and tailored;
  • ERM is aligned to and supports strategic and business objectives;
  • ERM is evolving and subject to continuous improvement;

Singapore Code of Corporate Governance
ENECO ENERGY endorses principle 11 of Singapore Code of Corporate Governance 2012 issued by the Monetary Authority of Singapore. The Group’s commitment to meet high standards of corporate governance and transparency is actualized and reflected in its ERM Policy.

ENECO ENERGY ERM Framework
ENECO ENERGY ERM Framework provides an overview of the architecture for managing risks in ENECO ENERGY and is built around four (4) core components:

  1. ERM Strategy & Objectives
 Provides the overall direction for ENECO ENERGY's ERM programme.
  1. ERM Governance
 ERM Governance is the backbone to a robust risk management framework, where it establishes and communicates clear roles & responsibilities to support the effective functioning of the ERM structure.  It also defines responsibilities and protocols to report risk issues to ensure ENECO ENERGY's risk profile and Risk Management initiatives remain relevant to the organization's business environment.
  1. ERM Process and Tools
 This process involves establishing the risk tolerance / parameters, followed by assigning resources and implementing controls and processes to manage identified risks within the set risk tolerance / parameters, at Corporate and Business Group levels.
  1. Risk Monitoring and Review
 Risk monitoring and review are performed on a regular basis and to monitor the effectiveness of the performance of the existing controls in relation to ENECO ENERGY's key risks and to ensure that ENECO ENERGY's risk profile remains relevant and comprehensive.

ENECO ENERGY ERM Governance Principles
Risk Governance within ENECO ENERGY is to embed and build on the four (4) lines of defence (as illustrated below), a prerequisite to ensure the overall ERM process and system of internal controls are robust across the Group.

  This refers to:
  1. Business Governance / Policy Management
 Internal controls at operational level (E.g. Standard Operating Procedures, approvals etc.)
  1. Management and Assurance Frameworks
 Group-wide policies or internal controls which are cascaded down to each Business Unit / Department (E.g. Code of Conduct and HR policies etc.)
  1. Assurance
 Independent sources of assurance on controls such as Internal Audit, ISO audit etc.
  1. Board oversight
 Board and / or Sub-Committee oversight over key risks and controls (E.g. Financial Authority Limits requires Board approval beyond certain monetary thresholds).

ENECO ENERGY ERM Process
The ERM process adopted by ENECO ENERGY {in line with ISO 31000 (2009)}, aims to achieve the following:

  • Structured, disciplined and systematic approach to manage risks;
  • Robustness of risk information;
  • Accountability for outcomes and action plans;
  • Sustainability;

Step 1
Communication and consultation

 Communication of risks and consultation of all relevant stakeholders to support risk management decisions.

Step 2
Establish Context

 Understanding of ENECO ENERGY's objectives and definition of the external and internal / organizational environment within which it operates.

Step 3
Risk Assessment
  1. Define Risk Parameters – Definition of a common ‘ruler' to assess likelihood and impact of risks.
  2. Risk Identification – identification and prioritization of key risks based on the strategic objectives which ENECO ENERGY desires to achieve.
  3. Risk analysis and evaluation – analysis of risk drivers, consequences and existing controls; evaluation of whether the risks identified are within ENECO ENERGY risk tolerance.

Step 4
Risk Treatment Action Plan

 Development of action plans to further manage risk to an acceptable level.

Step 5
Monitoring and Review
  1. Development and monitoring of Key Risk Indicators (or ‘early warning signs') for risk monitoring and reporting.
  2. Risk reporting to Risk Management Committee and Audit Committee.
  3. Review of risk parameters and profile (including risk inventory, risk registers etc.) on an annual basis.