Risk management and internal controls

Gränges works actively to monitor, manage and minimize sustainability-related risks in a structured and proactive manner. Sustainability risks are identified and evaluated as part of the group-wide Enterprise Risk Management process, and assessed using the same criteria as operational and financial risks. In 2024, Gränges also integrated findings from its Double Materiality Assessment and climate scenario analysis, ensuring consistency in definitions and thresholds across all risk evaluations.

Environmental and climate risks

Risk description:
Environmental risks are mainly related to emissions to water, soil and air, or releases of hazardous substances due to incidents in production, such as fire or oil spills. Other risks include natural resource scarcity and regulatory restrictions, for example on air pollution, which could result in production constraints. Climate transition risks involve stricter carbon regulations, carbon pricing mechanisms, and shifting customer preferences toward low-carbon products. If not addressed, this could impact demand and cost levels. Physical risks relate to extreme weather events—like hurricanes or typhoons—that could disrupt operations and infrastructure, including energy and transport, potentially leading to higher costs and reduced revenues.

Mitigating activities:

• Environmental Policy and ISO 14001 and ISO 50001 certifications
• Daily monitoring of emissions and compliance with local regulations
• Precautionary risk reporting and site-level incident systems
• Regular updates on environmental legislation
• Crisis preparedness with local emergency planning
• Investments in fire protection systems and maintenance plans for critical equipment

Supply chain risks

Risk description:
Gränges depends on high-quality material inputs and reliable deliveries. Risks include supply shortages, material quality issues, and sustainability risks throughout the value chain. These include biodiversity loss, emissions, water use, and social risks such as labor rights violations, including forced or child labor. Corruption risks are particularly present in mining approvals. These can affect operations, increase costs, delay deliveries, and lead to reputational damage.

Mitigating activities:

• Responsible Sourcing Program with a 2030 goal for 100% sustainable suppliers
• Supplier Code of Conduct and onboarding with sustainability training
• Country and sector-level risk screening and third-party sustainability assessments
• Corrective action plans, supplier engagement, audits, and ASI certification of facilities

Workplace safety risks

Risk description:
Accidents in production—particularly in casting and rolling mills—pose safety risks including physical injuries, fire hazards, and chemical exposure. Poor safety management could result in higher turnover, production loss, and reputational damage.

Mitigating activities:

• Occupational Health & Safety Policy and ISO 45001 certifications
• Global OHS standards for high-risk areas, including 6S implementation
• Daily monitoring, incident reporting, and cross-audits
• Annual and targeted safety training, onboarding, and employee safety committees
• Behavior-based safety programs like WOC (Walk Observe Communicate)

Employee risks

Risk description:
Attracting and retaining talent is a challenge due to remote locations and industry competition. A lack of diversity and limited development opportunities may hinder innovation and productivity, with potential impact on cost, delivery, and performance.

Mitigating activities:

• Competitive compensation, well-being benefits, and flexible work options
• Structured recruitment and training with focus on diversity and inclusion
• Annual engagement surveys and development talks
• Local people plans and culture-building activities

Ethical and compliance risks

Risk description:
Gränges operates globally, where local regulation varies. Risks include non-compliance, corruption, and misconduct, which can damage brand reputation and financial stability. Specific risks arise in procurement, contracts, and business approvals.

Mitigating activities:

• Annual training in Code of Conduct and Anti-Corruption Policy
• External, anonymous Whistleblower Function with structured investigation process
• Continuous legal monitoring and employee training on compliance topics
• Zero-tolerance culture on corruption, bribery, and discrimination