1.4.1Risk Appetite
The Risk Appetite Statement 2025 sets the guidance and boundaries for the activities conducted by SBM Offshore in pursuit of its strategic objectives, aligned with both business topics and material topics. It provides guidelines in terms of the amount of risk that SBM Offshore is willing to accept in protection or pursuit of value.
Risk appetite is defined, established and maintained through a structured process that involves business units, assurance bodies and the Management Board. This process ensures alignment between SBM Offshore’s strategy, the assessment of operational risks and opportunities, and the evolving business environment. Each risk appetite statement is defined with explicit executive accountability, supported by underlying metrics, and is measured and monitored on a quarterly basis with results presented to the Audit Committee.
In line with the Dutch Corporate Governance Code, the Management Board reviews the Risk Appetite Statement annually to ensure that SBM Offshore maintains the right balance between risk and opportunity while creating value for its stakeholders. Continuous monitoring ensures that changes in risk appetite are communicated and managed by the Management Board with oversight by Audit Committee and Supervisory Board.
The significant parts of SBM Offshore’s Risk Appetite Statement and their mapping are displayed below.
| Guidance | Activities guided by Risk Appetite, i.e. activities … |
Limited appetite | exposing SBM Offshore to unproven commercial models. | |
Limited appetite | extending the life of a unit beyond its design life if it does not align with SBM Offshore’s Life Cycle gates, sustainability and strategic ambitions with regard to customers and JV partners. | |
No appetite | compromising barriers to Major Accident Events. | |
Limited appetite | with suppliers that do not align with SBM Offshore’s strategic commercial and execution performance and standards. | |
No appetite | to deviating from SBM Offshore execution resource capabilities standards. | |
No appetite | resulting in balance sheet or liquidity risk as a result of commercial opportunities for which the bankability cannot be reasonably confirmed. | |
Limited appetite | severely impacting profitability of SBM Offshore. | |
No appetite | exposing SBM Offshore to cybersecurity risks. | |
Limited appetite | exposing SBM Offshore to damage due to application of unproven technologies. | |
Zero tolerance | activities that are non-compliant with the Code of Conduct and related laws and regulations. | |
No appetite | in sanctioned jurisdictions and/or with sanctioned persons/entities or companies whose decision-makers do not share the same compliance principles. | |
No appetite | causing harm to people, damage to assets or the environment. | |
No appetite | activities that are non-compliant with SBM Offshore’s human rights standards. | |
No appetite | activities contrary to ID&E policy and/or impacting the health of SBM Offshore’s employees. | |
No appetite | deviating from SBM Offshore’s ambition to reduce emissions. | |
No appetite | deviating from SBM Offshore’s Responsible Recycling Policy. |
Explanation of Guidance | ||
Activities whereby SBM Offshore has zero tolerance | Activities with risks for which SBM Offshore has no appetite | Activities with risks for which SBM Offshore has limited appetite |
Refusal to purposely conduct any activity breaching this risk appetite | Risks within activities to be avoided with appropriate actions | Risks within activities to be mitigated and monitored |