Risk management and internal control for increased value creation

Statkraft’s ability to manage risk is of critical importance for value creation and represents an integrated part of the overall management model. Statkraft is exposed to risk in a number of areas and across its entire value chain. The key risk factors are connected to market operations, financial management, operating activities, and regulatory framework and political decisions. The international growth has highlighted the risk related to projects, both in the concept selection and in the implementation phase. Internal control is a key area in risk management that helps secure quality and control.

A management system has been established for the Group including common guidelines which contribute to both good risk management and better internal control. The management system formalises requirements related to how risk management and internal control are to be exercised in the processes.

Statkraft is exposed to risk in a number of areas and across its entire value chain. Statkraft’s overall risk is handled both locally and monitored at Group level, and is incorporated in reporting to Group management and the board. Ambitious growth plans and increased internationalisation place greater demands on risk management in the investment portfolio, and a central investment committee has been established for improved handling of risk related to individual investments and across project portfolios.  The key risk factors are connected to market operations, financial management, operating activities and framework conditions. Risk management is an integral part of all business activities at Statkraft, and is followed up within the respective units using procedures designed to monitor and mitigate risk.

While internal control alone cannot ensure good risk management, it is a necessary part of the process. Statkraft employs a series of targeted initiatives intended to strengthen internal controls within the Group. Over several years, efforts have been underway to realise the improvement potential related to internal control over financial reporting.