Sustainability risks and opportunities

Enterprise Risk Management (ERM) is one of the key aspects of the Corporate Governance system and involves all organizational levels with different roles and responsibilities. The aim of ERM is to:

  • increase the awareness of business risks by identifying, measuring and monitoring risks;
  • improve the sustainability of business performance through risk prioritization and mitigation strategies;
  • ensure transparency and strengthen the company’s reputation by spreading the culture of risk, monitoring and compliance. 

Risk Assessment is an essential element of the ERM Framework and contributes to defining business strategies by identifying and managing potential risk events that are likely to affect the actual achievement of business goals and results.

Risk Assessment also includes the preparation of action plans whose implementation is subject to ongoing monitoring and quarterly reporting. Once the risks are identified, they are assessed on the basis of the potential impact should the event occur and of the likelihood that the event will occur. Risk assessment involves taking into account the consequences of risk events both in terms of inherent risk (prior to control) and residual risk (after control). Risk assessment is graded as Low, Medium and High and is applied both to inherent and residual risk.

In accordance with the European standard ISO 9001:2005, the Ansaldo STS Enterprise Risk Management model will be updated in order to face the opportunities “that can derive from a favorable situation to the achievement of an expected result, for example circumstances which allow the company to attract customers, to develop new products and services, to reduce waste or improve productivity”. The opportunities will be determined by considering as a reference the company’s strategic plan and the sustainability report.

The 12 Key Risks identified by the ERM are provided in the table below, as well as their current connection with the aspects identified as relevant for the company’s sustainability and included in the materiality matrix.

KEY RISKMATERIAL ASPECTS FOR SUSTAINABILITY
MACROECONOMIC AND GEOPOLITICAL SCENARIO:
- Economic and Geopolitical instability resulting from external factors.
Economic value creation
OBSOLESCENCE
- Control of available products and components, both produced and acquired, to promptly detect obsolescence.
Economic value creation
Customer Satisfaction
Supply chain sustainability
Innovation
SAFETY
- Preventive management of the safety systems.
Economic value creation
QSE management systems
Customer Satisfaction
SUBCONTRACTORS
- Local or new subcontractors selection;
- Procurement process;
- Suppliers technical and financial qualification;
- EHS performance requirements.
Economic value creation
Customer Satisfaction
QSE Management
Sustainable Supply Chain Management
STRATEGY
- Competition at a global level;
- Standardization;
- Definition and implementation of the strategy;
- Resource optimization.
Economic value creation
Innovation
Quality of Governance
Environmental impact of products
LEGAL AND GOVERNANCE
- Conformity and compliance able to satisfy different local levels of regulatory requirements;
- Governance;
- Communication.
Economic value creation
Anticorruption
Quality of Governance
Human rights protection
RESOURCES
- Availability of necessary competences to manage the business with flexibility;
- Background, knowledge and skills;
- Resources empowerment.
Economic value creation
Training and development
Corporate welfare
Stakeholder engagement
BUSINESS CONTINUITY
- Safety of workers;
- Safety and EHS standards;
- Physical safety of the IT systems;
- Protection of corporate assets.
Economic value creation
Safety of workers
QSE management systems
Social risk management
REQUIREMENT AND CONFIGURATION MANAGEMENT
- Requirements, interface and scope of work requirements;
- Compliance of requirements;
- Configuration management of consolidated products;
- Technical standards evolution;
- System integration.
Economic value creation
Customer Satisfaction
Innovation
PROJECT BUDGET
- Planning, management and control of time, costs and quality;
- Scope of work;
- Priority management;
- Estimation of external costs and requests for changes.
Economic value creation
Customer Satisfaction
Training and development
CONTRACT NEGOTIATION AND MANAGEMENT:
- Contractual and financial terms;- Contract complexity (Turnkey, Project Financing);
- Negotiation of passive and active contractual terms;
- Specific Occupational Health, Safety and Environmental regulation in new countries.
Economic value creation
Stakeholder Engagement
PRODUCT DEVELOPMENT AND TECHNICAL SOLUTIONS:
- Implementation of the product roadmap;
- Introduction of a new product or technical solution;
- Competitiveness and performance of the technical solutions.
Economic value creation
Innovation
Customer Satisfaction