Energy Risk Management Policy
Energy companies have both great power and great responsibility. Without the basic infrastructure fueled by energy companies, whole industries – and general day-to-day life – would shut down. For this reason, the energy sector is highly regulated and companies are bound by stringent rules they must follow in order to manage and mitigate risk.
Who Regulates the Energy Sector?
Every country has its own regulatory bodies that are responsible for overseeing energy companies. In the United States, for example, there is the Federal Energy Regulation Commission (FERC), the North American Electric Reliability Commission (NERC), as well as various state and regional commissions that may set their own requirements. Energy companies are also bound by the Sarbanes-Oxley Act’s audit and financial regulations. As part of these regulations, companies are required to capture and archive certain business-related communications.
What are the Risks that Energy Companies Must Manage?
As a critical infrastructure, energy companies face numerous risks, especially in the face of increasing cyber crimes and hackers who are relentless in their quest to target energy suppliers. Some of the specific risks that energy companies have to address include:
- Physical facilities – electricity plants must be secured and protected from unauthorized entry in order to prevent tampering with equipment.
- Supply chain – there are a number of players in the energy industry, and companies must be aware of who their suppliers are and what types of protections they have in place.
- Technology – cybersecurity is a huge concern for energy companies who must put systems in place to protect all of their systems.
- Data – energy companies collect and use massive amounts of data, including financial data, usage information, and internal and external communication. This data must be protected against leaks and improper use that can lead to market disruptions.
Best Practices for Energy Risk Management Policies
While energy companies are required to meet certain regulations, there is more leeway when it comes to creating the policies and procedures that will ensure compliance. Companies are given the freedom to establish the systems and processes that will work best given their own operations and culture.
Best practices in creating an energy risk management policy include:
- Standardization – companies – especially large enterprises – tend to have employees working in silos with little cross-communication and collaboration between departments. When it comes to risk management, it is crucial to have one company-wide policy and set of standards that everyone knows and follows, regardless of their department.
- Culture of risk awareness – the message should come from the top with the members of the C-suite making it clear that compliance and risk management is a priority. A company culture that focuses on risk awareness means things won’t slip through the cracks and employees will always be attuned to potential situations that require further investigation.
- Technological tools – with so many rules – many of which are changed and updated on a regular basis – trying to manage risk management manually is an impossible task. Companies should take advantage of the technological tools that have been designed to automate compliance.
- Internal audits – the best way to be prepared for an external audit or investigation is to regularly conduct internal audits to make sure that policies are being adhered to and all data and evidence is in order should it be requested by regulators.
How LeapXpert Can Help
As part of most energy risk management policies, there will be a need to capture and archive communications. LeapXpert’s business communication platform maintains a comprehensive record of electronic conversations in accordance with regulations. The platform easily integrates with other business monitoring systems, ensuring that energy companies are in full compliance with all relevant regulations.