Vermilion’s Enterprise Risk Management Process
Risk associated with climate change has been quantified for each business unit utilizing the Enterprise Risk Management process. This process is utilized to assess implications and identify mitigating measures that are required to limit or reduce risk and potential liabilities to an acceptable and manageable level. Risk is assessed based on the anticipated impact severity and probability of an event occurring in consideration of human, environment, financial and social license to operate. Stakeholders in risk assessment include internal (Board of Directors, Executive, Staff) and external parties (Landowners, NGOs, investors, the general public, industry groups). Vermilion proactively conducts operational and engineering reviews aimed at increasing efficiency, including reducing emissions and monetary expenditure requirements at major facilities.
One of the key roles of the Board is to provide risk oversight for Vermilion, including sustainability related risks.
As a responsible company, effective risk and crisis management is vital for Vermilion. Our focus on awareness and the effective management of our business related risks, including sustainability risks, begins with our Board of Directors. Through its four committees, the Board independently reviews the effectiveness of Vermilion’s identification and management of risk quarterly. G4-44, G4-45a G4-46 G4-47 This gets translated into action by our executive team, through implementation of associated policies and procedures. Our staff also play a key role in identifying potential risk areas through their participation in tabletop staff interactive sessions which often form part of our semi-annual staff update meetings. G4-45b Feedback is communicated to the management team, which in turn reports back to staff with responses to concerns, ideas and suggestions raised. The feedback is also communicated to the Board when considered material.
Our internal control processes are proactive and comply with existing regulations. They are also designed to help us achieve our business strategy of delivering modest annual growth in production and cash flow while also providing reliable and growing dividends to our shareholders. Our management approach reflects this, with a long-range plan that covers business strategy and related goals and objectives, to 2020. G4-45
To achieve this long-term success, Vermilion has identified and continually monitors risks – including economic, environmental and social risks – in the following categories:
We use a corporate risk matrix as a framework to guide us in identifying and prioritizing material issues for sustainability reporting on our materiality matrix.
Board governance of economic, environmental and social topics and risks is self-assessed annually against our corporate performance scorecard indicators. These include both standard industry metrics and internal measures of performance that are compared to plans established by management and approved by the Board of Directors each year. G4-44a