Powering the Energy Transition with Risk Management Excellence
“We started our partnership with Enablon in 2007, so it’s a long time ago. We started only with one module…after several years we now have five modules. It shows that we have a great relation with Enablon.”
Alexandre Simart, Corporate Internal Control Advisor at Engie, during the Enablon Excellence Awards ceremony at SPF EMEA 2017.
Are you familiar with the term “energy transition”? It describes long-term structural changes in energy systems. There have been many energy transitions throughout history. Currently we are in the early stages of one that will hopefully lead to a world that consumes less energy and uses more renewables. As electricity consumers, we are the ones who will experience this energy transition. But some organizations will not just experience the energy transition, they will also power it. Engie Group is one such organization.
Engie is a global energy player and an expert operator in electricity, natural gas and energy services. The Group employs more than 153,000 people worldwide, with operations in more than 70 countries, and revenues of €66.6 billion in 2016. Engie’s ambition is to be the world leader in energy transition by investing €16 billion over the 2016-2018 period. The company understands that a bold, ambitious vision requires effective risk management practices that help achieve strategic objectives supporting the vision.
Mitigating Risks That Impact the Bottom Line
In terms of risk management needs, Engie requires reasonable assurance regarding the management of operations with respect to the following goals:
- Compliance with laws, regulations and internal policies.
- Reliability of financial information.
- Execution and optimization of operations.
In addition to obtaining assurance, Engie also needs to supervise and mitigate operational risks that can arise from different sources: IT systems, external events, process issues, human factors, etc.
Perhaps the best example that illustrates how risk management is so central at Engie is the need to mitigate risk exposures to commodity prices. Engie buys a lot of gas, coal, fuels, and other raw materials that are used to generate the electricity that it sells. Increases in commodity prices have a direct impact on the bottom line. Engie has set a target of having only a maximum of 15% of its EBITDA exposed to commodity price risks.
For Engie, the use of a risk management software system is essential to mitigate risks that threaten corporate objectives and its vision of being the world leader in energy transition. The company has been using Enablon for many years, and on June 15, 2017, Engie’s risk management practices were honored with the Enablon Excellence Award in Integrated Risk Management at SPF EMEA 2017. Alexandre Simart, Corporate Internal Control Advisor at Engie, accepted the award on behalf of the company. Let’s take a closer look at the ways in which Engie uses Enablon, which led to this recognition.
Alexandre Simart, Corporate Internal Control Advisor, Engie
Enabling Both Qualitative and Quantitative Approaches
More than 1,000 users in 70 countries and in all 24 business units of Engie use Enablon to perform self-assessments once a year. These self-assessments allow users to evaluate how risks are managed in their entities. Annual self-assessment campaigns include process owners, and are regularly reviewed by internal auditors. The Enablon platform standardizes and formalizes all self-assessments to bring greater consistency. This also allows the information to be aggregated at the corporate level. Data is extracted from the Enablon system and is used by Engie to demonstrate to the board members and external stakeholders that the Group effectively manages risks through self-assessments performed by process owners.
In addition to the qualitative approach of self-assessments, the Enablon platform also enables a quantitative approach used to manage Key Risk Indicators (KRIs) and operational risks. For example, the quantitative approach helps to mitigate risk exposures to commodity prices. The Enablon platform replaced many databases and Excel reports. Today the system facilitates the monitoring, control and reporting of KRIs and operational risks at the plant level, while also harmonizing reports globally. Around 250 KRIs across Engie are monitored, and results are aggregated for corporate reporting. In summary, Enablon is making the management and analysis of operational risks more effective.
Making it Easy to Use the System and Share Information
With more than 1,000 users logging in the system once a year to perform self-assessments, there is a risk that many would have forgotten how to use the system over a one-year period. This could create a burden for Engie’s helpdesk and Internal Control team. Engie and Enablon had the foresight to anticipate such a scenario, and took steps to avoid it by making the system as easy to use as possible. Users see an intuitive and simple interface that makes them focus only on tasks that need to be completed.
In addition, screens are tailored for the different types of tasks (self-assessments, validation of controls through workflows, internal audits) and the platform is suited for use through mobile devices. Furthermore, best practices and other types of information are exchanged throughout the organization through action plans. All of this prevents a flood of questions and requests to Engie’s helpdesk and Internal Control team.
Because the Enablon platform is used to support the Group’s risk management efforts across 24 business units and 70 countries, and to help the company meet its corporate objectives, we’re glad to have bestowed Engie the Enablon Excellence Award in Integrated Risk Management at SPF EMEA 2017.
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