How We Manage Risk
Our Board of Directors oversees all of our risks—both those that relate to CSR and sustainability and those that don’t—with the ultimate goal of ensuring that we can achieve our long-term strategic priorities. Board Committees are responsible for overseeing specific risks categories.
The Board’s Safety and Reliability (SRC) Committee oversees safety and reliability, which include our risk and safety culture and risk management guidelines, our policies directed at preventing injury and adverse environmental impacts, and our guidelines, policies, procedures and practices regarding significant safety incidents. The Board’s Corporate Social Responsibility (CSR) Committee oversees our guidelines, policies, procedures and performance related to CSR, and reviews our reporting in this area. The CSR Committee is also responsible for oversight on CSR matters such as human rights, environmental stewardship, stakeholder engagement government relations and Aboriginal and Native American relations, communications and community investment. For more information, please see our Management Information Circular, which is available on Enbridge.com.
Our Executive Leadership Team (ELT) and our Operations and Integrity (OIC) Committee are responsible for managing risks throughout the enterprise. In particular, the OIC manages our Operational Risk Management (ORM) program, which includes pipeline integrity management, leak detection and control systems, damage avoidance and detection, occupational safety, public safety and environmental protection, and incident response. Risk owners and specialists throughout the company are responsible for managing risks within their respective areas.
At the enterprise level, risk management is guided by our Enterprise Risk Management (ERM) Framework and our Safety Management System Framework, which are supported by Joint Business Unit Councils for Enterprise Risk, Safety, Process Safety, Integrity, and Crisis and Emergency Response.
Through our annual Corporate Risk Assessment (CRA) process we identify and assess all of our corporate-wide risks such that we can prioritize and align our risk management and treatment efforts. Our CRA process is systematic, comprehensive and integrated, and has evolved over the years as Enbridge and our external environment have evolved. The CRA is reviewed by the Audit, Finance and Risk Committee of the Board with respect to our overall enterprise risk management framework and to the specific categories under their oversight, which include financial, commercial, strategic and legal risks. Further, the operational, environmental and safety risk categories are specifically reviewed by the SRC Committee, reputational risk is reviewed by the CSR Committee and human resources risk is reviewed by the Board’s Human Resources & Compensation Committee. The Committees then report their conclusions to the Board.
we use quantitative methods to assess our risks and to monitor the effects of our risk treatments. For example, we use leading and lagging metrics to assess the effectiveness of treatments pertaining to safety, the maintenance of the fitness of our systems and leak detection. To assess our financial risk treatment, we use metrics such as earnings-at-risk to give us insights into our market risk exposures and into the effectiveness of our derivative hedging activities. We also conduct correlation analyses on our market price risks, including interest rates, foreign exchange and commodities prices, to ensure that we fully understand the interrelationships between these risks.