Just group PLC | Annual Report and accounts 2022
RISK MANAGEMENT
The Group’s enterprise-wide risk management strategy is to enable all colleagues to take more effective business decisions through a better understanding of risk.
RISK EVALUATION AND REPORTING We evaluate our principal and emerging risks to decide how best to manage them within our risk appetite. Management regularly reviews its risks and produces management information to provide assurance that material risks in the business are being appropriately mitigated. The Risk function, led by the Group Chief Risk Officer (“GCRO”), challenges the management team on the effectiveness of its risk evaluation and mitigation. The GCRO provides the Group Risk and Compliance Committee (“GRCC”) with his independent assessment of the principal and emerging risks to the business. Company policies govern the exposure of risks to which the Group is exposed and define the risk management activities to ensure these risks remain within appetite. Our policies have been updated to draw out any climate specific considerations for risk management. Financial risk modelling is used to assess the amount of each risk type against our capital risk appetite. This modelling is principally aligned to our regulatory capital metrics. The results of the modelling allow the Board to understand the risks included in the Solvency Capital Requirement (“SCR”) and how they translate into regulatory capital needs. By applying stress and scenario testing, we gain insights into how risks might impact the Group in different circumstances.
PURPOSE The Group risk management framework supports management in making decisions that balance the competing risks and rewards. This allows them to generate value for shareholders, deliver appropriate outcomes for customers and help our business partners and other stakeholders have confidence in us. Our approach to risk management is designed to ensure that our understanding of risk underpins how we run the business. RISK FRAMEWORK Our risk framework, owned by the Group Board, covers all aspects involved in the successful management of risk, including governance, reporting and policies. Our appetite for different types of risk is embedded across the business to create a culture of confident risk-taking. The framework is continually developed to reflect our risk environment and emerging best practice. The framework has now been enhanced to facilitate the identification, assessment and reporting of risks arising from climate change (“climate risk”), with risk category definitions updated to integrate climate risk aspects. A qualitative climate risk appetite has been added to the Group’s existing high-level appetites, which include reputation and capital, recognising the potential impacts of climate risk.
1 st LINE
EMBEDDING GOVERNANCE VIA THREE LINES OF DEFENCE
BUSINESS OPERATIONS The first level of the control environment is the business operations which perform day-to-day risk management activity.
RISK & CONTROL • An established risk and control environment
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