Take Actions to De-risk

De-risking energy investments imply two complementary facets: Avoiding losses from adverse events or profiting from better-than-expected outcomes. This managerial mindset reframes risk management. Under volatile markets, managerial flexibility is valued when prior commitments can be reversed affordably to avoid losses or to appropriate surplus. By employing value chain risk assessment, managers could have a granular and comprehensive view of specified risks and their underlying causes. As a result, risk-taking confers on managers the ability to structure specific commitments as creating options by adaptively managing their strategic and operational moves. Policy’s role is likewise reframed as one that facilitates capital flows as opposed to one that guarantees private payoffs.