Risk Management

We manage risks to support our Group strategy

Risk management

Our Principal Risks remain linked to our Group Priorities and the Group’s risk appetite is expressed in relation to our four categories of risk: Strategic, Operational, Financial and Compliance.

Risk management and internal control

Centrica’s Group Enterprise Risk and Internal Controls Framework remains a core element of the Group’s Governance Model. The annual risk management process is summarised in the diagram.

Our Group Priorities

We are focused on six key priorities to deliver our strategy and we align performance and risk management processes around these, including our Key Performance Indicators.

Decentralisation of energy systems, shifting power to the consumer and increasing digitalisation presents both opportunities and risks. Identifying and appropriately managing these risks is critical to the successful delivery of our strategy.

Within our System of Risk Management and Internal Control we assess risk in relation to the delivery of Group Priorities and determine the level of risk we are prepared to take:

• Customer Obsession: We have a moderate risk appetite to allow us to pursue innovative opportunities to deliver better service throughout the customer journey.
• Operational Excellence: Paying attention to excellence in the basics in our operations and the way we execute our business processes as we serve our customers is fundamental to our competitive success. We have a moderate risk appetite for pursuing innovative opportunities to deliver better service throughout the customer journey.
• Most Competitive Provider: We have a most to high risk appetite for identifying and implementing innovative improvements to save cost but a lower risk appetite for managing our business-as-usual processes in a rigorous and systematic way.
• Cash flow Growth: We have a moderate risk appetite for seeking opportunities to deliver cash flow growth. However, there are some aspects of this priority impacted by external risks where we have to accept a higher risk appetite.
• Empowered Colleagues: We accept a moderate level of risk in finding effective ways to empower ourselves to innovate and to attract, develop and reward people with the diverse capabilities needed to deliver our ambitions.
• Safety, Compliance and Conduct: Our appetite for taking risk in this area is as low as reasonably practicable as we strive for an incident-free workplace and to conduct our business operations in compliance with laws and regulations and we have a low appetite for rewarding and retaining people who fail to demonstrate Our Values and act within Our Code.