Risk Management and Sustainable Development

The Corporate Risk Management Department (comprising risk management, legal, insurance and compliance teams) manages corporate risk and provides advice for the entire Cathay Pacific Group. The Group Risk Register is reviewed annually, with a commitment to ensuring that our risk management system is consistently in line with the AS/NZS 4360: 2004 risk management standards.

Following the roll-out of the current risk management framework to Cathay Pacific departments in Hong Kong, this framework was progressively introduced to Cathay Pacific Group subsidiaries and regional outports in 2011 in accordance with our plan. Risk briefings were held for departments, subsidiaries, outports or with particular functions/operations to understand, assess and respond to the risks, which are documented in corresponding risk registers.

Specific risks identified are assigned to a Director and undergo a process of endorsement by the Audit Committee. Action plans to respond to the risks are then developed via discussion with the relevant departments, subsidiaries or outports, and with endorsement from the Directors. Each action plan is documented together with target completion dates and the responsible parties, with progress monitored regularly to reduce the risk exposure of the Cathay Pacific Group.

Our strategy towards specific types of risks such as audit, sustainable development and safety are reviewed by specific committees. The Audit Committee reviews the adequacy of the resources, qualifications and experience of the staff of the company's accounting and financial reporting function as well as their training programmes and budget. Sustainable development risks relating to commercial and operational delivery are assessed by the Audit and the Sustainable Development Steering Committees. Airline operational safety risk is reviewed monthly by the Airline Safety Review Committee, which is chaired by the General Manager Corporate Safety and comprises Directors, senior management of all operational departments as well as our operational partners.

In the past few years, we have been identifying our environmental and social risks. We recognise that more needs to be done in this area, and after the completion of an initial climate change risk study at Cathay Pacific in 2011, we will be incorporating climate change issues much more consistently into business plans with engagement from all departments involved. This process will then expand to other sustainable development issues next year – such as environment and community issues.

Part of this process of incorporating sustainable development risks will enable us to better identify significant issues, risks or 'material' issues and summarised as a materiality matrix. We started to define a materiality matrix solely for the Sustainable Development Report in 2008, and are now expanding its use to our Sustainable Development Strategy. The graphic below is a summary of ongoing work in developing a well-defined materiality matrix for the Sustainable Development Strategy.

Safety
Safety
Operating Our Flights
Fuel efficiency and GHG reductions
New technology investment (biofuels)
Interacting with Customers
Customer expectation
Offering sustainable products and services
Increasing customer awareness
on sustainability issues
Managing Our Infrastructure
Operate buildings to a high environmental standard
Manage and reduce noise
Biodiversity and conservation issues
Air quality issues
Effective resource management
Implementing sustainable sourcing practices
Working with Our Supply Chain
Engaging suppliers and staff on sustainable procurement
Investing in People and Communities
Staff occupational health
Staff engagement
Creating value for local communities
Engagement with local communities

Note:
This matrix indicates the relative importance and impact of issues based on our internal analysis.

Font Size
A A A
Share
  • Sustainable Development Report 2010
    [website | pdf]
  • Sustainable Development Report 2009
    [website | pdf]
  • Sustainable Development Report 2008 [pdf]
  • Sustainable Development Report 2007 [pdf]
  • Sustainable Development Report 2006 [pdf]
  • Sustainable Development Report 2005 [pdf]
  • Sustainable Development Report 2004 [pdf]
  • Sustainable Development Report 2003 [pdf]