Strategic risk landscape
Sandvik Group risk profile and key risks
The Sandvik Group risk profile is based on the bottom-up ERM process where the divisions, business areas and functions first make their assessment and the Group Risk Management Network then makes recommendations for a new Group risk profile based on the outcome of these assessments.
The ERM process is complemented with a strategic analysis by the Group Executive Management to more specifically identify key risk areas that are tied to our ability to execute on our Group strategy. The purpose is to get a 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.
The Sandvik Key Risks map details the individual risks we are actively addressing to achieve long-term success and strategy fulfillment and is presented below. When we deliver on our strategic targets, many of the risks will be fully mitigated. The map is coupled with a follow-up model for tracking the different initiatives that lead to better risk mitigation, which the Group Executive Management team reviews and discusses regularly. This creates a more dynamic and strategically relevant risk management discussion at the highest levels of the company. The outcome of the strategic analysis is presented in the table under Key risks 2025.
An ERM report, summarizing key risks and mitigating activities across our business, was provided to the Sandvik Audit Committee and Board of Directors in December 2025. The Board of Directors’ and the Audit Committee’s involvement in the risk management process is further described under Corporate governance model.
Insurance as a risk management tool
Sandvik has tailored insurance programs that transfer the risks associated with, amongst others, the Group’s property, cargo, and liability exposures. Insurable risks are continuously evaluated, and actions are taken to reduce these risks as part of the Sandvik loss-prevention strategy. Supported by our loss-prevention procedure and guidelines, risk evaluations highlight opportunities to reduce the potential for business interruption and to ensure the Group’s ability to deliver to its customers. To ensure cost efficient and tailored insurance solutions, selected risks are reinsured through the Group’s captive insurance company.
Business continuity and crisis management
The Global Risk Management Policy and related procedures for business continuity and crisis management outline what local management teams must do to ensure they can respond to disruptive events and continue their business operations on an acceptable level when faced with challenges. Once a risk materializes, our crisis and business continuity management priorities are to minimize harm to people and the environment, and to minimize damage to the Sandvik business, as well as ensuring a swift return to normal activities and safeguarding the company brands.
Internal audit and internal control as part of Sandvik risk management
The internal audit function regularly follows up on the implementation of different risk management programs such as ERM, business continuity, crisis management and the insurance programs. Sandvik applies group-wide internal controls to monitor risk mitigations. Read more about the internal controls program at Sandvik.
Sustainability and climate change
Assessment and management of sustainability risks are integrated parts of the ERM- and property loss prevention programs and are set out in the Sandvik Key Risks map and Risk Profiles in different parts of the organization. Sandvik has assessed current and future natural and climate change-related hazards for our locations covering 130 individual sites and more than 90 percent of the overall Total Insured Value (TIV). The assessment reflects the current situation, and models the evolution of natural hazards under different climate change scenarios and at different future time horizons.
The goals of the assessment are to provide an overview of the physical climate risks facing the portfolio of sites at different time horizons and under different climate change scenarios, and to establish a ranking of locations from high to low climate risk based on climate data and insured values. The assessment is used to support in the identification and prioritization of management actions within the loss prevention program, which may include in-depth assessments of sites and investments in resilience measures, as upcoming steps in the Sandvik climate resilience journey.
The illustration shows which strategic area each key risk relates to, although several risks are relevant for more than one strategic area. The proximity to the center shows how actively we operationally work with the risk. The further out from the center, the more long-term/strategic the risk is. Many risks are both short and long term and require both short and long-term mitigation.
01. Geopolitical developments
Regionalization/nationalization
Increasing trade tariffs
Armed/hybrid conflicts
Extreme weather events/climate change
02. Business transformation
Electrification of the mine
Closed-loop manufacturing
Execution of digital shift and data-driven productivity
03. Digital disruption
Cybersecurity
Information security
Disruption by digital players
Embracing AI
04. Key talent attraction/retention
New talent (digital, electrification, sustainability)
Reskill existing workforce
05. Manage the EBITA corridor and Net Working Capital
Controlled ramp-up
Inefficient use of capital
Contingency fatigue
06. Geographical agility
Lower growth projections in some key markets
Heavy European footprint
07. Acquisition value creation
Business case delivery
08. Compliance
Third-party risks
Stricter financing requirements
Trade compliance and sanctions
09. Changing customer needs/requirements
Customer centricity
Adapting to market transformation
Customer requirements on cyber- and information security
10. Change management
Operating structure
Transformative leadership capabilities
11. Competition from emerging markets
Technology and innovation race
Market share threat
Cost competitiveness
New business models