Risk management in chal­lenging times

Robust risk management is key to supporting business performance. In today’s world, Solvay must address economic and political uncertainty, evolving power balances, new growth dynamics, shorter market cycles, a sharper focus on climate change and energy transition, and fast-paced technological change. The Group’s annual risk review allows it to meet its strategic objectives and comply in full with laws, regulations, and the Solvay Code of Conduct.

Solvay’s risk assessment process is thorough and comprehensive, involving all Global Business Units (GBUs). Key risks are reviewed periodically by the Audit Committee and the effectiveness of the risk management process is assessed annually by the Audit Committee with other Board members present. Key risks also form part of the annual strategic review. Sustainability considerations and the views of our stakeholders are central to our risk management approach, ensuring we anticipate and adapt to risks and opportunities in a volatile global marketplace.

Tracking trends in our main risks

At Solvay, risk is the responsibility of teams at all levels of the Group. Our dynamic and highly decentralized process tasks key players with assessing the risks that fall within their areas of authority and expertise. Progress made on mitigation actions, as well as changes in the risk and opportunities environment, are charted on a dedicated dashboard, updated twice a year.

The table below lists the main risks affecting Solvay, their criticality and status. More information on our risk management process and main risks can be found in the dedicated section in the Management Report.

Criticality

Risk

Trend

Sustainable development high materiality aspects

Stakeholders

*

emerging risk – newly developing or changing risk that may have, on the long term, a significant impact which will need to be assessed in the future.

High

Security

Data security and customer privacy
Critical incident risk management

Employees
Local communities
Customers

Ethics and Compliance

Management of the legal, ethics & regulatory framework

Suppliers
Employees
Planet
Investors

Industrial safety

Critical incident risk management
Employee health and safety

Employees
Local communities

Transport accident

Critical incident risk management
Waste and hazardous material

Suppliers
Employees
Local communities

Climate transition risk*

Greenhouse gas emissions
Energy management
Sustainable business solutions
Water and wastewater

Customers
Local communities
Employees
Planet
Investors

Cyber-risk

Data security and customer privacy

Customers
Employees

Moderate

Chemical product usage

Waste and hazardous materials
Sustainable business solutions

Employees
Customers

Increasing sustainability, decreasing risks

At Solvay, we have developed a unique tool to guide our portfolio towards more sustainable solutions. Our Sustainable Portfolio Management (SPM) tool measures the alignment of our businesses with sustainability megatrends. It is a reference framework that is a helpful complementary tool to guide strategic resource allocation and portfolio choices. The tool rigorously assesses each of Solvay’s products in all its applications and our R&I, CAPEX and M&A projects, evaluating their environmental impact and their benefit or challenge to society. As a result, it also enables strategic de-risking, reducing negative impact on performance and freeing up resources for new sustainable opportunities.

Committed to climate-friendly growth

Vincent De Cuyper (photo)
Transition to a more sustainable economy opens up exciting business opportunities and, by cutting our emissions even further, we are also committing to accelerating the move towards a better society.
Vincent De CuyperMember of the Executive Committee and Climate Supervisor

As concerns over climate change reach unprecedented levels, companies must adapt to increasing regulatory, environmental, and consumer pressure. Solvay is no exception and has long been committed to taking action on the climate transition risk.

We are determined to be part of the transition to a climate-friendly economy. In 2018 we took an important step in that direction, pledging a 1MT cut in absolute GHG emissions from operations by 2025 – in CO2 equivalent on a like-for-like basis compared to 2017. Switching our target from a GHG intensity reduction to an absolute GHG reduction clearly demonstrates our commitment to refuse growing our business at the cost of environmental impact.

To meet our ambitious 2025 target, we will leverage energy transition levers to reduce our energy-related emissions, increasing the share of renewables in energy production and supply along with promoting energy efficiency through our Solwatt® program, to reduce consumption altogether. We will also focus on continuously optimizing our industrial processes and developing clean technologies.

24 %

reduction of Greenhouse Gas emission over three years

50 %

Net sales generated by sustainable solutions

26 %

Solutions linked to climate change mitigation (reduction of GHG intensity)

Sustainable business solutions