Key risk and description |
Risk mitigation |
Opportunities |
Cyber security and information |
Epiroc could experience business interruptions caused by cybercrime, disruptions to critical IT services or other breaches of its information systems that could lead to loss of intellectual property. The increase in remote working in recent years has brought additional risk through exposure to more potential attack vectors. If breaches are not detected early and responded to effectively, they can harm Epiroc’s reputation and have an adverse effect on the financial results. |
Quarterly updates from Group Information Security to Group Management and to the Board on a semi-annual basis. The cyber security program improves the handling of cyber security risks through, e.g., targeted and general security awareness training for all employees, improved protection of Epiroc data to meet regulatory and legislative requirements and increased resilience, i.e., the capability to withstand or recover quickly from adverse events. |
Improvement of cyber security and resilience goes hand-in-hand with increased customer demand for security and consolidates Epiroc’s competitive position, notably within automation and digitalization. |
Climate transition |
Risks associated with the transition to a low-carbon economy include lack of compliance with new product requirements and environmental and climate-related legislation, and failure to develop, launch and market new products or respond to technological development and customer demand for sustainable products. |
Continuous monitoring of environmental and climate-related legislation and establishment of relevant mechanisms. Improved environmental performance is always an important component of innovation. The Board performs an annual oversight of risks, including environmental and climaterelated risks. |
Increasing demand for sustainable equipment is met by developing products and services and/or expanding the offering with a better environmental performance. Battery technologies and connected equipment and other solutions can add value and help drive the transition to lowcarbon solutions. Implementation of 2030 sustainability goals places the organization on the pathway to halving CO2e emissions in Scopes 1, 2 and 3. |
Loss of freedom to operate |
Intellectual property risks include legal costs related to the protection of IP rights, loss of value of an IP asset or associated product revenues as a result of legal findings of invalidity, unenforceability, or non-infringement, or challenges to title or ownership, which could cause loss of freedom to operate. |
An Epiroc Intellectual Property Rights process covering risk assessment and relevant tools, such as a freedom-to-operate search and training of employees. Alignment of Intellectual Property (IP) Protection with R&D projects and M&A processes. |
Protection of intellectual property contributes to business stability and improves Epiroc’s competitive position. |
Recruitment and retention of key personnel |
Failure to attract and retain key teams and employees poses a risk of Epiroc losing its leading position on the market. If Epiroc fails to monitor its need for employees or is unable to continue to attract and retain highly qualified management and other skilled employees on acceptable terms, the company may experience difficulties in sustaining or further developing parts of its business. |
Recruitment can take place both externally and internally. Internal recruitment and job rotation are facilitated by the internal job market. Epiroc strives to maintain good relationships with unions and universities. An employee survey is carried out every year and followed up actively. Proactive performance management and development of employees with their managers. |
Employer branding activities and solid onboarding programs. Ambitious targets for employees and managers, aligned with business targets, with accountability for results and in an environment of trust and individual responsibility. The 2030 sustainability goals leads and encourages the organization towards improved safety and increased diversity. Allowing remote working (depending on position) and encouraging virtual cooperation. Fostering internal mobility within the company through an internal job market. Training and development programs. Parental leave policy granting a minimum of 12 weeks of paid parental leave across the global organization. |
Supply chain |
Incorrect deliveries, failure to fulfill delivery obligations or inadequate capacity at suppliers could cause delays or failures in deliveries, which in turn may cause reduced sales and a decline in customer confidence. Supply disruptions could arise from shortages of raw materials, labor disputes, weather conditions, transportation disruptions or other factors beyond Epiroc’s control. Risk of Epiroc’s business partners not sharing the values expressed in the Epiroc Business Partner Code of Conduct. |
Selection and evaluation of business partners based on objective factors, including quality, delivery, price, and reliability, as well as commitment to environmental and social performance. Screening of selected business partners. Inventory control and establishment of a global network of sub-suppliers, to avoid supplier dependency. Provision of timely and sufficient information to suppliers enabling them to manage changes in volumes. Requirement for business partners to sign the Business Partner Code of Conduct. |
Increased business agility and cost reductions as a result of improved supplier inventory management in response to changes in demand. Continued position as a preferred business partner, promoting efficiency, sustainability, and safety. Reduction of the risk of corruption and conflicts by promotion of human rights and work on improved labor conditions. Opportunity to strengthen customer relationships by readiness to support customers affected by the Dodd Frank legislation on conflict minerals. |
Product development and quality |
Several markets are characterized by technological advances and changes in customer preferences. Risks arise from failure to develop, launch and market new products in response to customer demand for productivity, circularity and sustainability. Product development is affected by legislation on matters such as emissions, noise, vibrations, pollution and recycling. This may increase the risk of competition in emerging markets where such legislation is sometimes less strict. There is also a risk of substitution of existing Epiroc products and services with lower-emission options from competitors. Any defective products will impose a risk of product liability and damage to third party property or causing bodily injury |
Continuous investments in research and development to develop products in line with customer demand and expectations. Design of products with a lifecycle and circular perspective. Design of products with reduced emissions, vibrations or noise and increased recycling potential to meet legislative requirements. Ongoing standardization of process for quality control (test, verification and validation). Ensuring that supplier management has the same level of quality assurance on vendors and suppliers. |
Substantial opportunities to strengthen competitive edge by innovating high quality, sustainable products and creating an integrated value proposition for customers as well as meeting external environmental risks. Implementation of the 2030 sustainability goals leads the organization towards halving CO2e emissions in operations, transport and use of products. Promotion of the integration of the Sustainable Development Goals into operations. Targeted activities contribute to limiting Epiroc’s exposures. In addition, qualityassured products can increase customer retention, improve reputation and increase people safety. |
Safety and health |
Inadequate adherence to safety and health principles and regulations can lead to accidents causing harm to people, productivity and the Epiroc brand. Health and safety laws and regulations are becoming more complex and potentially costly. |
Assessment and management of safety and health risks in operations is standard procedure. All necessary safety wear is provided for employees who need to be in production or in the field. All major units are certified in accordance with the ISO45001 standard. Development of a culture with safety first in mind is key, and activities to highlight this, such as the “SafeStart-program”, “Live Work Elimination” and Epiroc Safety Day, are organized throughout the Group alongside a strong Safety Management System. Business partners are offered training in Epiroc’s policies including health and safety. |
Improved safety and health increases productivity and employee and business partner satisfaction. Implementation of the 2030 sustainability goals lead the organization towards improved health and safety. |
Diversity and inclusion |
Improper inclusion can lead to lack of innovation, poor efficiency, and loss of business opportunity. Potential claims, depending on the region, can lead to increased costs and a bad reputation. |
Ensuring a diverse talent pool in Epiroc by having professional recruitment processes with talent acquisition specialists. Promoting a culture towards safety leadership. Epiroc’s whistleblowing function Speak Up and compliance processes support transparency in matters where advice is sought, or concerns are raised about a potential ethical or legal violation by employees or business partners. |
Varied perspectives foster creativity and innovation. Better problem-solving and decision-making due to varied experiences and viewpoints. Higher employee satisfaction and engagement, leading to better performance Easier to attracting talent from a wider range of backgrounds, enhancing competitive edge |
Production |
Epiroc’s entities may face disruptions caused by events such as weather extremes, machinery breakdowns or a major fire leading to business interruption and loss of business income as well as reputational risks. |
Global implementation of Epiroc Loss Prevention Standard focusing on people safety and business continuity. Entities, including newly acquired companies, are measured against our standard. The outcome provides an overview of improvement areas and recommended actions in order of priority |
Business continuity planning prepares managers and the Epiroc business on how to act in response to disruptions. Recovery is an essential factor in the case of disruption in order to keep commitments to suppliers, customers and employees and limit our exposure to financial loss. |