Our Approach to Risk Management
Our Chief Executive Officer and Chief Financial Officer (“CEO,” “CFO” or collectively, “Executive Officers”) have primary responsibility for managing risk at Milestone. Through regular interaction with other management team members and subject matter experts, our Executive Officers proactively identify the existing and potential emerging risks to our company, including financial, market, political, compliance, operational, reputational, cybersecurity, climate, and other risks that are inherent in or may affect our business.
We prioritize identified risks and opportunities according to financial impact, likelihood of occurrence, and magnitude of consequences. This process of identifying and prioritizing enables us to drive informed business decisions about resource allocation, align our organizational priorities with identified risks, and monitor emerging issues that may shape our future risk exposure.
Our Executive Officers report to our Board and take a leadership role on risk matters, while the management team members address specific risk items and risk mitigation in their core areas of responsibility. Our Board provides oversight for the most material risks and opportunities and oversees risk management activities to ensure that the risk management processes designed, implemented, and maintained by our executives are functioning as intended.
As part of our risk management process, we consider and continue to develop our understanding of climate-related risks and opportunities that can affect our business in both the near and long term.
Our customers, operating within the carbon-intensive oil and gas industry, are increasingly subject to policies, laws, and regulations to limit and reduce the environmental impact of their operations. Furthermore, as part of the energy transition, energy companies are committing to reduce the emissions intensity of their lifecycle and are setting net-zero targets. Through innovative waste sequestration technologies, we have capitalized on the opportunity to provide our customers a means to mitigate their Transitional and Regulatory risk.
Waste management companies must consider regulatory risks originating from policy or regulations to curtail GHG emissions. While Milestone benefits from a business that results in net negative emissions, we still monitor and manage regulatory risks.
Climate-Related Risks and Opportunities
There are three categories of climate risk:
- Transitional: The transition to a low-carbon, sustainable economy where risks and opportunities relate to changing market forces and consumer preferences. Transitional risks reside in how the industry must adapt or exploit business activities and investments to mitigate carbon emissions.
- Physical: Risks that impact the physical environment include acute, event-related, and chronic, or progressive risks caused by the effects of carbon emissions into the atmosphere. Examples of physical risks include extreme weather events such as droughts, floods, and destructive storms as well as changes in weather patterns.
- Regulatory: Risks resulting from legal, regulatory, policy, and liability action associated with climate change.