Risk Management

At BW LPG, we recognise the importance of good governance as it ensures business integrity across our operations.

Transparent reporting by executive management, meticulous reviews by an international board of directors and a clear risk management framework are key elements of our corporate governance framework and these help us in creating long-term value for all stakeholders.

BW LPG strives to provide competitive risk-adjusted returns to shareholders. Risk management is an integral part of value delivery and is fundamental to our business decision-making process. We have designed our dynamic yet strategic risk management framework to ensure minimal impact of any unfavourable events and market conditions. Our Enterprise Risk Management (ERM) is based on the principles from ISO 31000 and COSO ERM Framework.

The risk management process is implemented using a risk register whereby all possible risks are considered, with applicability assessed in terms of impact and probability. This register supports risk identification and follow-up of critical risks and related improvement opportunities. The Group regularly monitors its risk framework, policy and reviews processes in place to ensure appropriate and efficient mitigation of risk.

BW LPG's aims for risk management include:

  • Aligning strategy and performance with vision, mission and core values

  • Increase the likelihood of achieving business objectives

  • Improve the identification of opportunities and threats

  • Comply with relevant legal and regulatory requirements and international norms

  • Improve governance

  • Improve stakeholder confidence and trust

Strategic and External Risks

Strategic and external risks are risks that relate to the markets, countries, services and products, or from customers. They are addressed by the business strategies managed through the Company’s annual strategy review process. In this process, the Board of Directors review provides input on the Executive Management’s assessment of strategic and external risks. The Executive Management is responsible for ensuring that the intended and actual business direction, changes in markets, customers’ expectations and requirements are reflected in corporate strategic planning.

Regulatory and Compliance Risks

Regulatory and compliance risks are risks associated with ethical behavior, both directly involving employees and through third parties or partners on behalf of the Company; with security of sensitive information; or related to compliance with laws and regulations, including environmental regulations, sanctions and anti-bribery laws. These risks are managed through regular monitoring and mandatory awareness training, compliance reviews, legal due diligence, and internal audit checks.

Commercial and Operational Risks

Commercial and operational risks are risks related to events occurring during planning and execution of business operations, involving for example, cargo loss or damage, counterparties default, asset loss or damage, crew injury, or environmental damage. Appropriate control measures are incorporated in operations and insurance planning to mitigate these risks, with ongoing monitoring during execution to identify and address newly emerging risks. Incidents and near misses experienced are reviewed to ensure that their root causes are comprehensively analysed, with suitable corrective actions determined and implemented.

Financial Risks

The Group’s activities expose it to a variety of financial risks. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise the potential adverse effects on financial performance of the Group. Where applicable, the Group uses financial instruments such as interest rate swaps, forex forward contracts and bunker swaps to hedge certain financial risk exposures. The Group avoids speculation and risk management tools which may create new exposures as a result of their incompatibility with the risk targeted for mitigation. The financial risk management of the Group is handled by the Executive Management with guidance and input by the Board of Directors.

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