Growing market complexities drive clients' need to understand, measure, and mitigate potential risk to corporate profitability. Pace has responded with Enterprise Risk Management (ERM), a best-in-class enterprise risk management system.

ERM's initial step is to determine the parametric risk for variables that can be quantified through rigorous use of statistical analysis, such as energy commodity prices, emissions values and weather-related impacts on supply and demand. From this initial measurement, the potential impact on corporate goals is assessed. If required, Hedging Decision Protocols (HDPs) are established to safeguard against intolerable outcomes.

ERM then enhances this analysis to include contingent-event risk driven by non-predictable issues specific to the firm or related to industry externalities. Capturing the impacts of multiple contingent variables allows for scenario analysis of highest level contingencies and highest probability events, such as emerging carbon market exposure related to pending activities addressing climate change. Actionable perspectives are established and new management response protocols are provided through an executive management plan based on the new, more comprehensive risk metrics.

From planning to implementation, Pace is there. The process is formalized though our clients' business systems and becomes an integral element governed by an Executive Risk Management Committee.