Sandvik risk universe

Our risk universe has been developed through analysis and stakeholder dialogue of material risks for our industry, our different businesses, critical laws and regulations and critical operational, commercial, sustainability and financial requirements. It is a comprehensive library of risks which management teams apply to better understand, evaluate and aggregate risk within the business. The risks highlighted below are the Sandvik Group’s key risks assessed during 2018.

Strategic risks

S1.

Industry shifts and market developments

S2.

Macroeconomic developments

S3.

Technological change/shifts

S4.

Regulatory change

S5.

Emerging and complex market developments

S6.

Sustainability expectations or requirements

S7.

Geopolitical developments

S8.

Portfolio management/M&A strategy

Financial risks

F1.

Liquidity and refinancing risk

F2.

Currency risk

F3.

Taxation risk

F4.

Credit and counterparty risk

F5.

Pension commitments

F6.

Financial regulatory reporting risk

F7.

Commodity price risk

F8.

Interest rate risk

F9.

Fraud activities

F10.

Forecasting and planning

F11.

Management estimates/assumption risk

F12.

Accounting information risk

Business risks

B1.

Noncompliance with laws and regulations

B2.

Health and safety

B3.

Increased competition

B4.

Product development and product support

B5.

Intellectual property management

B6.

Talent attraction and employee retention

B7.

IT failures

B8.

Insufficient IT security

B9.

IT capacity or capabilities

B10.

Information and data protection

B11.

Data accuracy

B12.

Cost flexibility and control

B13.

Change management/demand/readiness

B14.

Sales and distribution channels

B15.

Business interruptions

B16.

Product liability requirements

B17.

Environmental demands/climate change effects

B18.

Aftermarket developments and management

B19.

Customer retention

B20.

Pricing models and management

B21.

Bottleneck processes/inefficient ways of working

B22.

Governance and internal controls

B23.

Sandvik values and ethics compliance developments

B24.

Employee competence development and leadership development

B25.

Contract management

B26.

Technology development and innovation demand – internal operations

B27.

Third-party liabilities, litigation and dispute resolution

B28.

Contractor/short-term staff management

B29.

Partners/agents /third-party management

B30.

Measurement and operational reporting

B31.

Insurable risk

B32.

Security situation

B33.

Project-related risk

B34.

Communications (internal and external)

B35.

Joint ventures and other partnership risks

B36.

M&A transaction or integration

B37.

Supplier and sourcing management