Three Lines of Asset and Risk Management for the Energy & Resources Industry

The Energy & Resources industry is asset-intensive, and the organizations who manage them are frequently confronted with compliance issues in the form of environmental, safety and safety concerns, ageing assets, maintenance issues and budgetary restrictions. All of these factors can have a huge impact on an organization’s performance, external and strategic success.

A comprehensive risk management strategy is vital to safeguard against these threats and ensure that a die vorteile der nutzung eines datenraums fur due diligence company can continue to meet the demands of its customers. This article provides a list of the most important areas of asset and risks management:

Counterparty risk management is focused on ensuring that key relationships (such as prime brokers derivative counterparties, clearing banks and custodians) are financially sound, and includes the implementation of security measures that guard against financial loss or reputational harm caused by the failure of these partners. This is done by vetting vendors and ensuring that the approval process doesn’t just apply to the vendor but as well to the service they provide.

Market risk is the possibility of a decrease in the value of your portfolio. Both asset managers and risk management are concerned about it, however from slightly differing perspectives. Portfolio managers manage their exposures to the market to limit unintentional betting on markets and other elements while risk management concentrates on managing crowded markets, leverage, liquidity, expected volatility, and cash flow.

A strong asset and risk management plan is vital to avoid unexpected issues and maximizing the value of the assets of an organization. The three lines of defense governance framework is an effective approach to identifying and mitigating the risks that can impact an organization’s success.