Risk management

A robust risk management process

Solvay’s systematic risk management approach is integrated within its strategy, business decisions, and operations. Risk assessment always takes sustainability into consideration. The anticipation, identification, management, mitigation, measuring, monitoring and prevention of risks are as integral to Solvay as the inherently related identification, management and optimizing of opportunities. This is demonstrated by substantial risk-related processes and provisions that Solvay maintains from the Board of Directors to front-line workers, supply chain partners and customers.

Although risks frequently involve more than one category, we divide our risk management into four broad categories: those involving the environment, people, economic and reputational topics. We also broadly place risks in three main categories: “main risks” (most critical), “emerging risks,” and “other risks”.

Managing risk is the responsibility of teams at all levels of the Group. Through our dynamic and highly decentralized process, key players are tasked with assessing the risks that fall within their areas of authority and expertise.

Solvay’s risk management process

* The Group Risk Committee is the Executive Committee extended to the Heads of Industrial, Sustainable Development, Legal and Communications functions

Managing main risks

At Group level, the Executive Committee identifies Solvay’s main risks and ensures they are adequately managed. They are also part of our annual strategic review.

While the Group’s key risks are reviewed periodically by our Audit Committee, in 2020, the Board was further involved in the risk identification process as well as in the annual Group risk management assessment and validation.

Main changes in 2020

Focus on the cyber security risk: This year, in light of the Covid-19 context, home office working has expanded the so-called attack surface of Solvay, with many end-point devices connected directly to the internet, instead of from our sites. In addition, cyber threats are increasing on a yearly basis in general, thus increasing the risk for the Group. To mitigate these risks, Solvay launched an internal communication campaign which included an internal phishing simulation email to our employees to test their reaction. This improved our ability to apply the latest security patches to our employees’ workstations remotely. Also, the threat to intellectual property has increased over the past 5 years (leading for instance to a EU program to protect EU intellectual property).

Focus on the environmental impact & controversies: We have seen some environmental controversies that have raised concerns among the public. We share those concerns and take the health and safety of our people as well as the environmental impact of any chemical product we use seriously. Science helps us identify legacy methods that can be updated and we take every opportunity to improve and showcase our innovation, by going above and beyond regulations. Instead of approaching Environmental, Social, and Governance (ESG) issues as negatives to be managed, we are turning them into strong tailwinds that drive us in a positive way. The Group has a strategy to manage substances of concern and develop alternatives that reduce human and/or environmental impact. Our response to the PFAS issue is a great example of how we are using science to find new and better solutions. We have set internal goals and quadrupled R&I resources to reach these goals and are taking measures to phase out the use of fluorosurfactants as soon as practicable. More information in the litigation section HSE related proceedings & Note F39 Financial Statement of the Annual Report.