HOUSTON, May 26, 2021 /PRNewswire/ -- The energy industry member community of the Committee of Chief Risk Officers (CCRO) have recognized that adopting proper ESG goals and subsequent performance against those ESG goals is becoming an increasingly important factor influencing corporate decision making. These ESG choices may bring significant consequences regarding risks, and ultimately challenge the effectiveness of risk management efforts. The role that an energy company's risk function should have in managing these ESG challenges, and related best practices, needs to be better understood.
As a result, the CCRO is announcing that it has formed a new initiative to address performance on ESG issues and management of ESG associated risks. This initiative will seek to bring together international member companies from across the energy industry on the CCRO platform. This non-profit platform has for sixteen years provided the energy industry a comfortable format for working together productively creating original materials addressing various risk-related and compliance-related topics. The CCRO is designed to bring a unique focus on our energy industry specifically, being expert regarding the nuances of our assets, markets, and business environments. This initiative builds on recent CCRO work and a conference co-hosted with S&P and The Alliance Risk Group on 2021 outlook for Climate Momentum and ESG standards.
We see there is both a "thought component" and a "technical component" to our objectives. We plan to delve into high-level risk process type challenges, as well as the details of "how to" in adapting to changing risk factors. Together, we will have constructive impact by defining and prioritizing standards, developing methodologies, and deploying new resources where needed. We have a leading technology provider prepared to create relevant market software and data solutions, and we invite other expert sponsors and vendors to advise and support our efforts.
In any case, the topics and objectives for the group are developed by the participants in an ongoing process. We hope that you will join us and be a part of that process.
Potential goals for the group:
- Develop a clear taxonomy of ESG risk sources
- Explore areas where we see gaps in current industry practices, such as:
- Are ESG rating methodologies adequate? Can they be harmonized?
- Can you validate energy transactions via "certifications"; with whom and how?
- How can your organization understand and manage ESG transition risks?
- Explore ways that the CCRO platform might host constructive industry action to adopt common practices in risk management in the ESG space, such as:
- Better documentation of current practices
- Recommend best practices for future ESG goal attainment
- Provide aggregation of internal data into anonymous benchmarks
- Publish/validate certification and measurement best practices, from local jurisdictions to harmonization of those practices across jurisdictions
Any interested parties should contact the CCRO for more information on how to get involved by indicating your interest at the working group's landing page.
SOURCE Committee of Chief Risk Officers