Essity is exposed to a number of strategic, operational and financial risks, which could exert a negative impact on the Group’s operations. Accordingly, it is of major importance to have a systematic and effective process to identify, manage and mitigate the effects of these risks in a controlled manner.

Processes for risk management

The responsibility for the management of risks follows the company’s delegation scheme, from the Board of Directors to the President, and from the President to the Business Unit Presidents. The delegation scheme entails that risks are primarily managed by Essity’s business units at local level, but with central coordination and follow-up. The latter is mainly achieved through the business units’ continuous reporting and in the annual strategy process. Risk identification and risk management are a key part of the latter. Identified risks are classified in this process according to the likelihood of the risk becoming a reality and the potential impact it could have on the group. The model also includes how risks shall be mitigate and followed up.

Essity’s financial risk management is centralized. The Group’s internal bank handles the Group’s financial transactions and energy risks. The financial risks are managed in accordance with the Group’s finance policy, which is decided by Essity’s Board of Directors. Together with Essity’s energy risk policy, the finance policy comprises a framework for financial risk management. The risks are compiled and followed up continuously.

Essity has a corporate internal audit unit, which follow up that Essity’s organization complies with the set policies.

Learn more about the Risks that impact Essity's ability to achieve established targets