Risk management
Through our risk management process, we aim to reduce, mitigate, or prevent negative impacts on people, the environment, our operations and our business.
Against the backdrop of the megatrends and key points in the external environment, we seek to consciously take the appropriate amount of risk, to manage risk competently at the right level of the organisation, and to seize related business opportunities.
Risk management process
We operate a structured system of identifying, assessing and defining responses to mitigate key risks. Enterprise Risk Management (ERM) is our process of assessing, treating and monitoring the effects of uncertainty that may affect the achievement of Givaudan’s objectives.
ERM applies across the business, reviewing different types of risks in terms of their nature, their root causes and their consequences. As part of this process, ERM reviews climate change and other sustainability-related risks and opportunities.
Risk management organisation and responsibilities
The Board of Directors (Board) is responsible for defining and approving the ERM approach. They establish the fundamental prerequisites and procedures, along with the structure of the risk management system.
Givaudan’s Executive Committee (EC) is responsible for the overall risk management process and is accountable for ensuring risks are appropriately and adequately identified, analysed and managed. They have instituted an ERM procedure to lay down the governance for risk management throughout the Givaudan Group, defining the roles and responsibilities of the various participants in the risk management process and the risk ownership and resulting responsibilities for mitigation and monitoring within the divisions and central functions.
Risk assessment cycle
As Givaudan prepares for the upcoming five year strategy cycle (2026–2030), the next ‘zero-based’ risk assessment will be performed in 2025.
In alignment with our purpose and in response to the changing external regulations, we are proactively enhancing our risk management framework and have undertaken double materiality assessment in 2023. This initiative enables us to better integrate ESG considerations into our business strategy.
In addition to the strategic risk assessment, Givaudan carries out a number of other risk assessment processes at different frequencies.
Main risk clusters
Givaudan divides the criticality of its risks into ‘top risks’ and other risks. The risks are assessed for their long-term (over 10 years) impact, for their short-term (0–5 years) and their medium-term (5–10 years) impacts.
Below and on the following pages is a description of the main clusters with our top risks:
- Strategic risks
- Financial risks
- Human rights and child labour risks
- Sustainability risks, including climate and biodiversity risks
- Talent risks
- Operational risks
- Legal, compliance and regulatory risks.
Read more on our main risk clusters in 2024 Integrated Report on economic and ESG performance.
