Management’s Discussion and Analysis
Risk Management and Disclosure
• Given society’s continued focus on climate change and the regulatory environment, further government regulation is the most significant risk facing SaskEnergy. Federal and provincial regulators are intensifying regulations regarding pipeline operations and environmental standards. Also, municipalities are increasingly setting targets and investigating options for action on emissions reductions. Further regulations are likely and may create additional compliance requirements or result in other impacts on the Corporation. • SaskEnergy responds to new regulations as efficiently as possible; however, efforts to impact the scope or aspects of regulations are presently limited to industry advocacy and lobbying through participation with industry associations. • The Corporation is committed to engaging and collaborating with local municipalities on the future role of natural gas in Saskatchewan. Cyber Security The possibility of a cyberattack against the Corporation’s operating or information technology systems, which results in a loss or misuse of critical data and information. • SaskEnergy relies heavily on information technology to operate its physical gas system safely and effectively. Many organizations face a common and growing threat against their cyber security, and this carries added significance for SaskEnergy as a critical infrastructure operator. Threat of an attack disrupting or gaining access to the Corporation’s systems is constantly evolving, commanding increasing attention as highly publicized attacks occur around the world. • The Corporation perpetually intensifies efforts to address risk of a cyberattack, keeping pace with the growing threat environment. Programs and processes preventing unauthorized access and monitoring for attacks will continue, as will efforts to increase the ability to successfully mitigate external threats.
SaskEnergy is subject to risks in the transmission, storage, distribution and sale of natural gas, and the effectiveness in managing these risks is a key determinant of SaskEnergy’s overall corporate performance. The Corporation manages risk by thoroughly examining its operating activities, identifying existing and emerging risks, effectively communicating those risks throughout the Corporation, and actively managing them through its Enterprise Risk Management (ERM) process. The ERM process establishes roles and responsibilities, as well as a general strategy for the Corporation to manage risks. Risk management is the responsibility of all levels of management. However, the Board of Directors and Executive Committee set the tone and provide direction for the ERM process. The Executive Committee is responsible for formally identifying strategic risks impacting SaskEnergy’s goals, participating in risk assessment processes, and developing strategic risk management plans. The Board of Directors is responsible for the risk management policy and framework. The Board oversees annual reports on risk management processes and controls, while ensuring key corporate initiatives appropriately address identified risks. SaskEnergy conducts an annual risk assessment, which provides input into its strategic and business planning processes. Many risks SaskEnergy faces are evolving, requiring adaptive and flexible corporate risk management plans. Government Climate Policy The risk that government(s) impose new environmental or operational regulations that impair or restrict operations or prevent further development of the Corporation’s gas system.
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