2017 Sustainability Report

Risk management

Securing long-term business viability

Effective risk management is key to ensuring the continued long-term viability of the Group. It is embedded throughout all of our operating companies. Everyone in the Swire Pacific group has a role to play in risk management. It is essential that we all work together to address the variety of risks our Group is exposed to.

Sustainability issues, including climate change, political and regulatory risks and emerging risks such as climate resilience and biodiversity, are particularly relevant in this respect. The Board of Directors and the management of each division are responsible for identifying and analysing the risks (including those relating to climate change and sustainability) underlying the achievement of business objectives and for determining how such risks should be managed and mitigated.

There are two key management committees which seek to monitor the risks to which the Group is subject – the Group Risk Management Committee (“GRMC”) and the Finance Committee. These comprise members of senior management and both are chaired by the Finance Director, who reports significant matters to the Board as they arise.

About the GRMC

The GRMC is made up of divisional chief executives and managing directors, who also report directly to the Board. The GRMC:

  • Reviews divisional risk registers, which set out current and emerging risks, including physical and reputational issues that arise from the social and environmental impact of our business decisions
  • Sets group risk management policies and strategies
  • Oversees the committees and working groups which have functional responsibility for risk management

Risk governance structure

Risk governance structure
We provided guidance and supporting tools to those responsible for sustainability in our businesses, thus enabling them to apply SwireTHRIVE to their businesses and to do so with those responsible for finance, risk management and human resources.

Dr. Mark Watson, Head of Sustainable Development, Swire Pacific Limited

Photo courtesy of Swire Blue Ocean

Enterprise Risk Management

We use a comprehensive Enterprise Risk Management (ERM) process to identify, assess, monitor and manage risks. The implementation and execution of the ERM process follows our enterprise risk management policy. The objective of the policy is to ensure that robust and effective risk management systems are in place to enable management to identify, prioritise and mitigate the risks to which our operating companies are and will be exposed. Each division and major operating company is required to implement the ERM process.

As part of this policy, operating companies must regularly submit corporate risk registers and changes in risk profiles to Swire Pacific. In order to ensure consistency of approach, these registers are prepared using standard methodology, format and risk ranking criteria.

Significant sustainability risks

For our business to continue to grow, we must anticipate the risks threatening our development and that of our customers and must capitalise on new opportunities.

Every year, Swire Pacific engages with people inside and outside the organisation in order to assess the material risk issues that might have an impact on its business. In 2017, four potential risks were highlighted.

Policy review process

With input from the relevant governance bodies and our Board, we conduct regular reviews of our existing policies, and where we identify policy gaps we seek to create new policies to guide the Group’s approach. In 2018, we are introducing new or updated policies on waste, water, and diversity and inclusion. The management of risks and the implementation of sustainability policies are subject to scrutiny by our internal audit department, with support from specialist external consultants where necessary.

Please refer also to the Risk Management section of the Corporate Governance Report in the Swire Pacific Annual Report 2017.