1.4.1Risk Appetite
The Risk Appetite Statement 2024 sets the guidance and boundaries for the activities conducted by SBM Offshore in pursuit of its strategic objectives, aligned with both Business Topics and ESG Material Topics. It provides guidelines in terms of the amount of risk that SBM Offshore is willing to accept in protection or pursuit of value. In line with the Dutch Corporate Governance Code, the Management Board reviews the Risk Appetite Statement annually to ensure that SBM Offshore maintains the balance between risk and opportunity while creating value for its stakeholders. Each Risk Appetite Statement has underlying metrics which are measured on a quarterly basis and results are presented to the Audit Committee.
The significant parts of SBM Offshore’s Risk Appetite Statement, and their mapping are displayed below.
Business and ESG Topics | Guidance | Activities guided by Risk Appetite, i.e. activities … |
Limited appetite | exposing SBM Offshore to unproven commercial models | |
No appetite | extending the life of a unit beyond its design life if it does not align with SBM Offshore’s Life Cycle gates, sustainability and strategic ambitions with regard to customers and JV partners | |
Limited appetite | with suppliers that do not align with SBM Offshore’s strategic commercial and execution performance and standards | |
No appetite | compromising barriers to Major Accident Events | |
No appetite | resulting in balance sheet or liquidity risk as a result of commercial opportunities for which the bankability cannot be reasonably confirmed | |
Limited appetite | severely impacting profitability of SBM Offshore | |
No appetite | exposing SBM Offshore to cybersecurity risks | |
Limited appetite | exposing SBM Offshore to damage due to application of unproven technologies | |
Zero tolerance | activities that are non-compliant with the Code of Conduct and related laws and regulations | |
No appetite | in sanctioned jurisdictions and/or with sanctioned persons/entities or companies whose decision-makers do not share the same compliance principles | |
No appetite | causing harm to people, damage to assets or the environment | |
No appetite | activities that are non-compliant with SBM Offshore’s human rights standards | |
No appetite | activities contrary to HR policy and/or impacting the health of SBM Offshore’s employees | |
No appetite | deviating from SBM Offshore’s 2030 intensity targets on its path to achieve net zero by 2050 | |
No appetite | deviating from SBM Offshore’s Responsible Recycling Policy |
Explanation of Guidance | ||
Activities for which there is zero tolerance | Activities with risks for which SBM Offshore has no appetite | Activities with risks with a limited appetite |
Refusal to purposely conduct any activity breaching this risk appetite | Risks within activities to be avoided with appropriate actions | Risks within activities to be mitigated and monitored |