Strategic risk landscape
Achieving the Sandvik strategy is dependent on continuously managing risks associated with it. These risks can be driven by external factors where our ability to influence them is limited and risk mitigation is hence focused on agility and adaptability. They can also be more directly within our own control.
Sandvik continues to run its well-established Enterprise Risk Management (ERM) process which is used in all parts of the Group for analyzing risks in the local entity, business unit, division or business area. These local risk analyses are heavily influenced by the strategy and key objectives for each part of the business, in accordance with our decentralized way of working, but the total outcome is aggregated into a bottom-up summary of the most significant risks at Group level. You can read more about this process in Risk management.
In 2022, we decided to complement the bottom-up process with a strategic analysis at the Group Executive Management level and more specifically, identify key risk areas that are tied to our ability to execute on our strategy. The purpose was to get a more focused and concrete risk landscape for the Group to enable good follow-up of the different risk mitigating activities in relation to the strategic goals. This exercise resulted in a Sandvik Key Risks map, detailing the individual risks we are actively addressing to achieve long-term success and strategy fulfillment. If we deliver on our strategic targets, many of the risks will also be fully mitigated.
The Sandvik Key Risks map is also coupled with a follow-up model for tracking the initiatives that will lead to improved risk mitigation. The tracking model will be reviewed and discussed in the Group Executive Management team every quarter, thus creating a more dynamic and strategically relevant risk management discussion at the highest level of the company.