Page 95 - Vaculug Sustainable Report 2022

The Company leads towards an initiation of Enterprise Risk Management under the current macroeconomic outlook, the complexity of business, the financial markets instability and the continuous evolution of legislation on law and
regulations between the countries where the Vaculug operates, aiming to have an overview of risk position across the functions and countries.
The risk mapping regarding all internal and external aspects related to the business (commercial, procurement & supply chain) and values (ethics, social-environmental) of the Company is continuously monitored.
The risks identified are subjected to the qualitative- quantitative assessments which led to the governance definition and management structures and the preparation of mitigation and/or related remediation plans and investment. The risk analysis activity leads to the definition of risk reduction/ elimination actions pursued at each country/function and implemented/kept under control by process owner identified.
All risks identified by each function is coordinated, monitored, and updated has been formally assigned to the Chief Internal Audit and Sustainability Officer in order to respect the segregation of duties and roles and responsibilities.
The aim is to monitor, assess and monitor properly the risks which could affect the Company’s value and goals achievement within the Company aiming to prevent and neutralize them in a systematic and structured way before the events take place by setting ahead a specific strategy for this end; or rather to take advantages of potential additional opportunities by aligning business strategy with event identified. Vaculug Risk Model systematically assesses three categories of risks:
1 External Risks: Risks associated with the external environment in which the Company operates, the occurrence of which is outside the Company’s control. This category includes risks linked
to macroeconomic trends, demand & supply evolution, competitors’ strategies, technological innovation, the introduction of new regulations and country specific risks (financial, security related, political and environmental risks), as well as the impacts linked to climate change.
2 Strategic Risks: Risks characteristics of the reference business, the correct management
of which is a source of competitive edge, or otherwise, the cause of failing to achieve planned targets. This category includes risks regarding markets, materials procurement, product innovation and development, Production processes, human resource, financial risks and mergers
& acquisitions.
3 Operational Risks: Risks generated by the organizational structure, by the processes and by the Company’s systems, where assuming these risks does not produce any competitive edge. These types of risks are related to, Information Technology, Business Continuity, Loss prevention, Health, Safety & environment, Legal & Compliance, and Security.
Transversal to the aforementioned risks are Corporate Social Responsibility, Environmental and Business Ethics Risks.
These are risks related to the non-compliance
with local and international law/regulations, best practices and corporate policies regarding the respect for human and labour rights, environmental and business ethics and can be generated by the organisation either as part of the relative value chain or supply chain. Those risks are mainly associated with the countries in which the Company is present with industrial footprint.
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