We identify, analyse, quantify and monitor risks and develop strategies to manage them.
We identify, monitor and manage business risks including market risks, country risks and risks associated with the cyclical nature of the oil and gas industry.
Eni has developed and adopted a model for Integrated Risk Management (IRM) that aims to ensure the company takes risk-informed decisions. Both current and potential future risks1 need to be taken into detailed, systematic account – over the medium and long term – to provide a comprehensive overview. In addition, the IRM model seeks to increase awareness at all levels of the organisation that appropriate risk assessment and management can affect the company's value and ability to deliver on targets.
The IRM Model is characterized by a structured approach, based on international best practices and considering the guidelines of the Internal Control and Risk Management System that is organized in three control levels.
Risk Governance attributes a central role to the Board of Directors (BoD) which defines the nature and level of risk in line with strategic targets, including in the evaluation process all those risks that could be consistent for the sustainability of the business in the medium-long term. The BoD, with the support of the Control and Risk Committee, outlines the guidelines for risk management, so as to ensure that the main corporate risks are properly identified and adequately assessed, managed and monitored. For this purpose, Eni’s CEO, through the IRM process, presents every three months a review of the Eni’s main risks to the Board of Directors. The analysis is based on the scope of the work and risks specific of each business area and processes aiming at defining an integrated risk management policy.
The CEO also ensures the evolution of the IRM process consistently with business dynamics and the regulatory environment. Furthermore, the Risk Committee, chaired by the CEO, holds the role of consulting body for the latter with regards to major risks. For this purpose, the Risk Committee evaluates and expresses opinions, at the instance of CEO, related to the main results of the IRM process.
The IRM Model is implemented through a process of integrated management which is both continuous and dynamic and leverages on the risk management systems already adopted by each business unit and corporate processes, promoting harmonization with methodologies and specific tools of the IRM Model.
It takes a top-down and risk-based approach, starting from the definition of Eni’s Strategic Plan (Risk Strategy), by identifying specific de-risking targets, the analysis of the underlying risk profile of the Plan, also through stress test for economic-financial resiliency vs. strategic targets, as well as the identification of strategic treatment actions. These activities performed coherently and integrated with the strategic planning process, support the Board's assessments regarding the acceptability of the risk profile of the strategic plan subject to his attention. The process continues with i) periodic cycles of Risk Assessment & Treatment, including the risk profile analysis specific for relevant operations, as well as the integrated analysis on risks in common to different businesses and/or functions, ii) periodic cycles of Risk Monitoring and iii) Risk Reporting activities.
In 2017, two Risk Assessment & Treatment session were performed: the Annual Risk Profile Assessment performed in the first half of the year, involving 81 subsidiaries in 28 countries and the Interim Top Risk Assessment performed in the second half of the year, relating to the update of the evaluation and treatment of Eni’s top risks and main business risks. The second assessment also revaluated certain main risks at business level. The two-assessment results were submitted to Eni's management and control bodies in July and December 2017. In addition, three monitoring processes were performed on top risks. The monitoring of such risks and the relevant treatment plans allow to analyze the risks evolution (through update of appropriate indicators) and the progress in the implementation of specific treatment measures decided by management. The monitoring results were submitted to the management and control bodies in March, July and October 2017. In the second half of 2017, IRM function provides the identification of specific de-risking objectives of the main corporate and business risks, issued as part of the 2018-2021 Guidelines by CEO, and identifies the chapters of the Strategic Plan 2018-2021 related to risk factors (business and consolidated risks), including mitigation actions.
Finally, during 2017, a detailed analysis was carried out on risks and opportunities related to climate change, adopting an integrated and cross-cutting approach that had involved specialized functions and business lines. Results have been published in the dedicated report Eni For 2017 – Path to Decarbonization.
(1) Potential events that could affect Eni's business and hamper its ability to achieve its main corporate objectives.
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