ERM is involved in more than 20,000 projects a year around the world; these vary considerably in scope, geography and complexity.
We continue to develop and refine our global risk management processes to ensure our projects run smoothly, from proposal and planning to execution and completion.
We exercise judgment with respect to the clients and third parties we engage with and the types of work we do. We will not work with clients or contractors who do not share our commitment to high ethical standards; we have turned down project opportunities because of concerns including human rights violations and other ethical issues. We scrutinize opportunities and projects carefully before proceeding and reserve the right to withdraw from a project if business conduct and ethics concerns arise.
We apply similar rigor to the activities of the ERM Foundation and are careful to avoid any potential ethical or compliance concerns associated with those organizations that we support through the Foundation, including providing funding through the Foundation's Low Carbon Enterprise Fund (LCEF).
We also have improved our due diligence process for business relationships, including embedding a global compliance tool to search for trade sanctions, bank watch lists, international criminal watch lists and adverse media evaluations into our opportunities tracking system. As a result, ERM employees can confirm quickly that third parties are not on government watch lists for corruption, bribery or human rights violations. We have committed to following the trade sanctions established by the European Union and the U.S., as well as the United Nations.
Project Planning with PLAN
The Project Liability Analysis (PLAN) process is designed to provide a globally consistent approach to managing our project risks, enabling us to identify and mitigate risks prior to project commencement or following scope changes. The PLAN team deploys experienced ERM Partners and other senior leaders in each of the ERM regions, working with Partners in the businesses, mostly at the opportunity stage. Due to the extraordinary diversity of our project portfolio, the PLAN team updates the approach to the PLAN reviews regularly to ensure that this important risk management tool remains current and relevant to help ERM Partners and staff understand and mitigate risks at the proposal stage.
Project Management with PRO
In recent years, ERM has taken on an increasing number of large projects that, due to their size and complexity, present unique risks and challenges. However, the sustainability benefits we provide to our clients on such projects are also magnified. To improve the management of risks and maximize opportunities, we rolled out our new large project management approach, known as ERM PRO. This approach includes fit-for-purpose procedures for best practice project management.
Emphasizing the critical nature of front-end-loaded planning, ERM PRO was developed, based on input from ERM Partners and project managers, as well as external subject matter experts. To facilitate the implementation and operation of ERM PRO, we established a Project Management Office (PMO) to support our Partners and project managers. The PMO is the custodian of ERM PRO and the focal point to share lessons learned.
In recent years, the investment in strengthening our processes through both PLAN and ERM PRO has enabled us to deliver consistently higher quality service to clients, and manage our business risk. Both of these tools are key for the sustainability of our business.
As part of our annual audit program, on-the-ground risk audits were conducted at several Business Units (BUs) around the world during FY14. These audits evaluate ERM's performance in key areas, such as financial controls, business conduct and ethics, along with child and forced labor. The audits are conducted by teams comprising Finance, Legal and Compliance experts. Results of the audits are used for improving policies, systems, processes, and staffing arrangements both at the specific BU level as well as at the regional and global levels.
FY14 saw the continued implementation of ERM's Contractor Management Program (CMP), which provides a robust platform for contractor risk management. As part of the first phase of the rollout, we used the CMP to evaluate and pre-qualify U.S. and Canadian contractors to ensure that they adhere to the key elements of our Code of Conduct, including those pertaining to human rights, labor practices and anti-bribery and corruption, as well as a wide range of other important issues such as ERM's H&S and insurance requirements.
The rollout of the program continued in FY14 in Australia and New Zealand, Ireland, the U.K. and South Africa and will continue to be implemented in other parts of ERM during FY15 and FY16, using experience and knowledge gained in the initial phases.
If any key contractors do not meet our criteria, we work with them to improve their programs and performance. For example, during FY14 we led a training session for contractors in South Africa who worked with us for Shell, one of our key clients. This training helped ensure that those who work on our projects with Shell understand and comply with high standards of safety and business ethics.
ERM CVS Undertakes First Bettercoal Assessment
Bettercoal is a non-profit organization established by a group of major coal buyers with the aim of promoting corporate responsibility in the coal supply chain. ERM CVS was selected by Bettercoal, through a rigorous qualification process, to undertake the first successful assessment against the Bettercoal Code, at a coal mine in Latin America. The organization's vision is a coal supply chain that protects the environment, respects the rights of people and contributes positively to the livelihoods of workers and communities. The aim is continuous improvement in the ethical, social and environmental performance of coal mines through engagement with stakeholders using an approach based on a shared set of principles.
Bettercoal developed a comprehensive code that sets out the principles and provisions that form the basis for self-assessment by the mine operator, as well as independent third-party assessments such as the one conducted by ERM CVS. The Bettercoal process requires the coal mines to develop a corrective action plan for the gaps identified and follow-up actions to drive and sustain the performance improvement. The process will be significant in reducing the environmental burden and improve the safety performance of coal mines, as well as the social well-being of the communities surrounding them. We believe that by working with organizations such as Bettercoal, we can support industry-led voluntary standards and best practices to make supply chains more sustainable.
Catherine Lyons, Houston, Texas, U.S.
Working Closely with Our Strategic Clients
In my role as Managing Partner for ERM's ExxonMobil account, I work face-to-face and hand-in-hand with our talented ERM Account Leaders and local teams. We also work in concert with the ExxonMobil technical and business leaders to support ExxonMobil globally and provide services to address their specific needs.
The oil and gas industry is facing a number of challenges today, such as continuing to replace reserves and maintaining operational excellence and license to operate, while managing continued pressures relative to increased costs, tighter regulations and connected, more sophisticated stakeholders. At ERM, we strive to listen for, understand, and innovate around ExxonMobil's challenges across its global footprint and businesses to help manage its technical and non-technical risks in a holistic way.
By integrating innovative approaches to help support or solve challenges, such as the integration of its Emission Database Management System, ERM helps ExxonMobil manage risks and support its business goals across the entire investment life cycle.