March 22, 2018
Thomson Reuters Finds Labor Disruption Is the Top Global Risk to Prioritize Among Senior Energy Industry Leaders
Global survey examines energy sector risk management and identifies the industry’s top business priorities
New York/London – Global energy leaders view labor disruption as the most significant risk impacting the effective management of their operations and commercial initiatives, according to a Thomson Reuters survey. The report also found that price risks represent the greatest segment of opportunities for improving business.
Thomson Reuters surveyed 250 global senior energy professionals to better understand their greatest areas of supply chain risk. The findings supplement a previous Thomson Reuters report finding that, on average, a company in the energy sector has 13,867 global third-party relationships in a typical year. The report, “Risk Management in the Energy Sector” examines the labyrinth of risks the companies face.
“Companies in the energy sector often don’t have a clear picture of the size and scale of potential labor and pricing risks, mostly because it has become more opaque and effective risk management solutions were seen purely as a cost,” said Leigh Henson, global head of Commodities, Thomson Reuters. “More companies are identifying the importance of a well-defined raw materials hedging strategy to improve margins, mitigate risks and gain competitive advantage over peers.”
The survey identified funding as the most significant obstacle to effective risk management, with human capital and resources named as the second most significant, particularly in the current low-cost environment across the global energy industry. Lack of data and/or an insight on risk, executive sponsorship, and outdated technology/digital infrastructure were also cited as impediments to risk management.
“Energy companies face myriad risks, ranging from complexities in supply chains to labor-force disruption and beyond,” said Emily Lyons, managing director, Energy Practice Group, Thomson Reuters. “It’s essential that these business leaders identify new ways to navigate the risk landscape in a profitable and compliant way, utilizing emerging technologies available. Thomson Reuters is a leader in providing answers to mitigate the threats to which they are exposed.”
The report surveyed respondents from the renewable, oil, and natural gas sub-sectors, both upstream and downstream. Respondents were split equally between five continental divisions: North America, South America, Europe, Africa and Middle East, and Asia. Respondents included chief compliance officers, chief risk officers, chief legal officers, heads of treasury, heads of supply chain, heads of procurement, and CEOs.
Thomson Reuters provides a comprehensive range of solutions for companies across commodities-related industries, including news, data, fundamentals, forecasting tools, and related products, both on its flagship desktop product Eikon and commodities data distribution tool PointConnect. These tools are also used by professionals to identify and navigate risks relating to global supply chains.
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