Risk Management

The identification of HSE risk is a key component in the development of an appropriately deigned HSE program. By understanding HSE risk, Elm assists our clients with a proven assessment methodology to focus resources and minimize overall HSE risk exposure. Elm’s approach is to work with side-by-side with our clients to understand risk profile and risk tolerance – thereby developing tailored risk management solutions.

Risk Assessment:

Elm helps clients in identifying and evaluating business exposures that stem from the environmental issues they face. Elm’s projects of this type are conducted within the risk management – rather than engineering or compliance – context. We review the efficacy and integration of existing business, risk, operations and environmental management systems that relate to the client’s environmental risk profile. For instance, contractual indemnifications and insurance specifications are reviewed for potential gaps relative to actual operating conditions.
Potential risk scenarios are identified and reviewed without incorporating impact or mitigation judgments. Our experience shows that risks are best identified assuming there are no controls in place, or that controls will fail in some manner. Doing so provides a more robust risk assessment and allows clients to better evaluate whether existing controls/procedures are current, effective, and/or applicable.
Generally, the results are presented by using a two-dimensional matrix (frequency and severity) with definitions that are established using client-defined risk management benchmarks. Reflecting the risks in a frequency/severity context allows clients to better identify appropriate risk reduction/mitigation solutions.

Valuation Of Risk Reduction:

 Because Elm’s Principals have served as in-house corporate staff and facility HSE professionals, we are well aware of the pressures on client organizations to spend money wisely. Frequently, this requires an analysis demonstrating the economic return to be generated by the expenditure. Elm brings a unique perspective to economic valuation of HSE management activities because we have first-hand experience utilizing existing methods, such as

•  McKinsey & Co.’s Activity Value Analysis™
•  Stern Stewart’s Economic Value Added (EVA)™
•  Traditional Return on Investment (ROI) methodologies.

In addition, we have developed our own innovative valuations that leverage risk management concepts with economic analyses. For instance, Elm developed our Return on Investment of Cost Avoidance (ROIa)sm that demonstrates financial return of HSE risk reduction investments in terms of both a reasonable anticipated loss and the cost of generating new profits needed to recover associated profits.

Risk Focused Audits:

The Elm Consulting Group International counsels clients in developing and implementing risk focused processes designed to integrate and measure HSE performance. Risk focused audits blend key elements of compliance and management system audit programs into a cohesive structure ensuring that each facility across an organization is reviewed to consistent standards based on risks specific to the operation, including the following elements:
• Regulatory Requirements
• HSE Risk Assessment
• HSE Impact Mitigation and Control
• Global Issues and Emerging HSE Trends
• Management Effectiveness (e.g., site, business unit, organization)
• Risk Control and Management
• Common Reporting Platform
A risk-based program can readily transition existing HSE audit processes into a tool more in line with other key audit functions.

Due Diligence:

The Elm Consulting Group International assists clients in assessing HSE risks associated with company acquisition and divestiture strategies.  The Elm team provides a unique blend of HSE due diligence services.  In addition to the typical surface and subsurface environmental reviews associated with property transfer, the Elm team routinely assists clients in understanding broader environmental and health and safety risks. These reviews often include an assessment of the potential long term liabilities associated with chemical and physical hazards in the workplace, operational compliance status, and overall HSE infrastructure.  In addition, we help clients understand the self-disclosure options promulgated by many regulatory authorities. Finally, Elm frequently supports post-acquisition integration of HSE programs.

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