NIBE GROUP
Sustainability and climate
Business opportunities and risks
As a global organisation, we have many business opportunities yet face various types of risk, which may have a greater or lower impact on the Group. The risks are mainly defined as factors that can affect our ability to achieve the targets set for the Group. This applies both to financial targets and sustainability goals and goals in other areas. Our ability to manage different risks also determines our success, that is, our ability to achieve and even surpass the set goals.
Structure and value chain NIBE’s organisational structure, with dispersed global operations, helps to reduce risk. NIBE operates in three business areas that deliver wholly or partly to different customer segments and end users. The operations are, therefore, affected differently in the business cycle and the competitive landscape varies. Sales through many different channels and distribution routes increase flexibility. Our operations have a substantial geographical spread, with companies and a market presence throughout the world. Having production units in different currency zones provides great flexibility and increases our competitiveness.
Risk management The Board decides the Group’s strategic direction based on Group management’s recommendations. Responsibility for long-term and overall risk management follows NIBE’s organisational structure. To counteract the effects of the various business risks facing the company, NIBE takes a systematic, proactive approach. The common framework and the NIBE internal control standard (NICS) tool were created to secure the process and facilitate ongoing efforts.
In accordance with NICS, the process starts locally and then rolls up to Group level. Risks and opportunities are divided into four sections: business, finance, IT and sustainability. Identified risks are classified according to the probability that the risk materialises and how the criteria are met, after which action plans are drawn up. The outcome is evaluated annually at Board level, after which decisions are taken concerning prioritised issues in the different areas. NIBE’s business risks are managed locally at the company level but are coordinated if deemed necessary. The tools consist mainly of the companies’ current reporting, risk assessment, risk management and action plans. Financial risks are managed in accordance with the Group’s financial policy and manuals governing annual accounts, system access, authorisation routines and system changes. Sustainability and IT risks are largely coordinated at Group level, but risk assessment and action plans are designed and implemented locally by each company’s Board. These risks are managed in accordance with our values and guidelines. We are also continuing our work on development of risk scenarios at group level. For more information on NIBE’s external risks and financial risk management, see page 98-99.
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NIBE INDUSTRIER AB ANNUAL REPORT 2021
