MC 3 Planning and Strategy

Categories

3.1
/3.3

Business strategy, objectives and planning

3.1.1 Business strategy
Galp, based on its mission, vision, values, code of ethics and conduct, commitments and strategic objectives shall define its strategy(ies).

The definition of the strategy(ies) is underpinned by the context of the organisation taking into consideration the analysis of the impact on the business, risk assessment and its importance in the operation of Galp's activities.

The strategy(ies) shall be communicated to the entire organisation, ensuring that it/they is/are fully understood.

3.1.2 Objectives and targets
To demonstrate compliance with the strategies defined in 3.1.1, Galp shall establish objectives and targets for functions and processes of relevance to the management system, required to ensure the satisfaction of the needs and expectations of the interested parties.

The objectives and targets shall:

  1. be consistent with the management policy(ies);
  2. consider the requirements of the interested parties;
  3. be specific, measurable, achievable, realistic and defined in time;
  4. take into consideration applicable requirements and associated compliance obligations;
  5. be updated as deemed appropriate;
  6. be communicated.

Galp shall maintain documented information on its objectives and targets.

3.1.3 Planning to achieve the objectives
By planning to achieve its objectives, Galp shall determine:

  1. what will be implemented;
  2. what resources are necessary;
  3. who is responsible;
  4. when it will be concluded;
  5. What potential obstacles may arise and how to overcome them;
  6. how the results will be monitored and assessed.

Galp shall document the planning process and review it periodically.

Actions to address risks and opportunities

3.2.1 Identification of the risks and opportunities
To identify the risks and opportunities in its businesses, Galp shall consider their context (see 1.1), the needs and expectations of the interested parties (see 1.2) and the exposure to uncertainties in the operation of Galp's activities.

In the assessment of risks and opportunities, Galp shall take into consideration, from a life cycle perspective, its technological options and its financial, operational and business requirements, among others.

In particular, Galp shall:

  • determine the environmental aspects and impacts of its activities, products and services that it can control and those that it can influence, considering a life cycle perspective.
  • systematically identify the hazards and assess the risks of accidents, taking into consideration: the degree of risk of the establishment and its specificity; the possibility of systematic application in all phases of the project and normal and abnormal periods of operation; the classification of risk and its acceptability.

Galp shall establish, implement and maintain documented information about:

  • its risks and opportunities;
  • hazards, associated aspects and impacts, criteria to determine the significant and respective identification.

3.2.2 Actions to address risks and opportunities
According to the type of response to risks - avoid, transfer, mitigate and accept - and opportunities - capture or accept - Galp, when applicable, shall plan:

  1. actions to address these risks and opportunities;
  2. how to integrate and implement the actions into its management system processes (see 1.3);
  3. how to evaluate the effectiveness of these actions.

Actions taken to manage risks and opportunities shall be proportionate to the potential impact on meeting the needs and expectations of the interested parties.

Change management

Galp shall systematically plan changes to the management system (see 1.3), including, among others, changes in operations, products, assets or persons, in order to ensure its safety, as well as the fulfilment of the needs and expectations of the interested parties.

In this planning, Galp shall consider:

  1. the purpose of the changes and their potential consequences;
  2. the integrity of the management system;
  3. the availability of resources;
  4. the allocation or reallocation of responsibilities and authorities;
  5. how to identify hazards and manage risks.

The level of detail of the planning of the change must take into consideration the respective associated risks.

Change management shall be applied during all phases of the life cycle of products, projects, facilities, processes and activities.

Galp shall establish, implement, maintain and retain documented information on change management.

Framing

In the business context the importance of applying a consistent and sustainable strategy model is well known. The strategy is defined as the set of company actions and decisions, which rationally aim to continuously provide added value to all interested parties.

The strategy is the set of action plans that guide the Organisation from its current situation to the objective situation (Vision, Mission and strategic objectives). The strategy has to be defined by top management and implemented throughout the organisation.

Risk-based decision making, whether formally or informally, is part of Galp's normal activity. In the RSIG, the concept of risk is related to uncertainty in achieving objectives and may have not only a negative connotation concerning the potential adverse effects, but also a positive connotation translated in the identification of opportunities.

Change management intends to ensure that whenever Galp identifies the need for change, it is conducted in a planned manner to ensure compliance with the applicable requirements is maintained and the potential consequences are monitored.

This RSIG macro category contributes to answer the following requirements:

Standard Requirements
ISO 9001 6
ISO 14001 6
ISO 22301 6; 8.2; 8.3
ISO 50001 4.4.1; 4.4.5; 4.4.6
Standard Requirements
NP 4397 4.3.1; 4.3.3
NP 4469-1 3.5.4
SGSPAG 4.3; 4.4; 4.7
G+ Element 05; 13; 15; 18; 20; 21

Practical Application

In order to comply with this RSIG macro category, Galp must:

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Establish the set of actions of all the business units that "transport" Galp from the point where it is to the point where it wants to be. This set of actions must be in line with the values and drive everyone’s commitment to help the company become what it wants to be in the future: "An integrated energy company that develops profitable and sustainable business."

Strategies should foster opportunities and minimise identified threats and risks (to acceptable levels), and may, if appropriate, anticipate mitigation or contingency actions (in a preventive perspective) according to the different levels of risk appetite. Among others could be included in this analysis:

  • significant risks and opportunities, including environmental and social responsibility aspects;
  • compliance obligations;
  • identification of hazards and safety risks;
  • the impact of a potential disruptive event, taking into account the business continuity, ensuring the protection of priority activities and their resumption and recovery;
  • technological options, use of energy and improvement of energy performance.

Deploy the strategy(ies) through individual action plans and objectives using the BSC (Balanced Scorecard) methodology or others such as OKR (Objectives and Key Results).
The strategy(ies) should also be deployed in a cascade system to the various OUs/roles using a variety of means for communication and understanding: meetings of management boards and senior staff, department meetings, council meetings and thematic committees, among others.

Identify and document risks, hazards, aspects and related impacts of their activities.

For this purpose, Galp must ensure the existence of company, sectorial, or specific standards, in which:

  • a methodology(ies) is(are) established to identify risks, opportunities, hazards, aspects and related impacts.
  • it is guaranteed that in determining the aspects of its activities, products and services, it takes into account the respective changes, anomalous conditions and emergency situations.
  • criteria is established for determining significant hazards, aspects and impacts.
  • legal obligations that the company must comply with must be considered.

Plan, in the light of identified risks, actions to address these risks and opportunities (risk response plan) in order to prevent or reduce undesirable effects, be it from routine or other activities, and increase the desired effects. This plan can be integrated into other company, business or process-related action plans or be autonomous depending on the scope and framework of identified risks.

The following points can be considered as examples of how to treat risks while taking into account the type of response:

  • Avoid - Adoption of new practices; use of different technologies;
  • Transfer - Risk sharing;
  • Mitigate - Change in the likelihood or consequences of the risk;
  • Capture opportunities - Search for new markets.

Plan the changes in the management system in terms of operations, assets or people in order to ensure business continuity/sustainability, safety and fulfilment of needs and expectations.

In particular, it must be ensured that:

  • Any change of employees in the same role must be evaluated in a timely manner to ensure that added risk processes are always performed by properly trained professionals.
  • Technology changes must be previously analysed in order to identify the degree of consistency, coherence and compatibility between the party affected by the change and the whole, aiming at the elimination, control and/or minimisation of risks arising from its application.

For this purpose, there must be a modification management procedure(s) that include, among others, the following themes:

  • the definition, identification and registration of the proposed modification;
  • the attribution of responsibilities;
  • the analysis of any implications resulting from the proposed modification, including post-modification evaluation and implementation of measures deemed appropriate.

Documented information/Evidence

  • Tailored Scenarios (E.g.: Business cases)
  • Objectives and targets
  • Action plans (For example: marketing plan, risk response plan)
  • Specific plans for changes/alterations and their follow-up (monitoring, follow-up meetings, decisions, reactions)
  • Company, sectorial or specific standards in force at Galp (for example, on risk management, change management, environmental aspects and impacts)
  • Environmental aspects and related impacts
  • Hazard identification and risk assessment
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