Under the Enterprise Risk Management Policy, based on the risk management standard of the Institute of Risk Managers, a tool is used to prepare risk assessments every year by Business Units, Service Units and Regions by assessing threats and opportunities that will impact the objectives set for Clariant overall. These objectives are a result of the overall strategy of the company as set by the Board of Directors and implemented by the .

The Executive Committee is responsible for monitoring the risk management assessments for relevance and consistency.

Objective setting is finalized during the last quarter of the year. These objectives, considering the threats and opportunities, are subject to scrutiny by the Executive Committee during meetings with each Business Unit. Also reviewed and discussed are the measures proposed to maximize opportunities and reduce or contain threats. In that context, mitigation measures are defined and responsibilities are assigned.

The Group, the Business Units and the Regions are also required to make risk assessments on the same criteria. All are required to report significant changes to existing identified risks and new threats and opportunities as they arise.

Risk Registers are maintained using an assessment of the financial, operational and reputational impact and the likelihood to score and rank all identified risks. The assessment also addresses the measures in place to manage the risk identified with dates for completion of the measures. Effectiveness of the measures is also assessed.

Once threats and opportunities have been identified and assessed, a qualified individual takes over responsibility for effective risk management. The nature of the risk classification requires different skills to be applied to risk management. The assessments are shared between the stakeholders on a regular basis.

A consolidated risk assessment is presented to the , the Audit Committee, and the Board of Directors. In case of new or changed risks reporting is accelerated.

Summaries of risk assessments from the Business Units, Regions, and Service Units are shared with senior managers of Clariant.

To support functional responsibility, certain functions have access to risk assessments to support them in their roles. Examples are Environmental Safety & Health Affairs (ESHA) to identify key sites for their property risk survey program, Internal Audit, and Group Procurement.

Examples of identified risks included in the risk register:

Regulation and Compliance: Clariant is subject to many rules and regulations as well as standards. These include chemical industry, country, government and customer requirements as well as the European Union’s (EU) Regulations on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). Corporate Product Stewardship is responsible to manage this task. Specific matters are delegated to Legal, ESHA and Logistics functions.

Sites and Locations: This includes manufacturing plants and equipment that are important for the production of Clariant products for sale to customers. Also addressed are country and culture issues that could create threats and opportunities to business objectives. The objective is to maintain high quality production facilities. Risk management is delegated to ESHA and Regional Services.

Economic Development: The achievement of corporate targets depends on the economic development. Economic development is therefore continuously monitored in all markets. Should a market not develop in line with expectations, the organization will be adjusted accordingly.

Executive committee

Management body of joint stock companies; at Clariant the Executive Committee currently comprises four members. VIEW ENTIRE GLOSSARY


Stakeholders are people or groups whose interests are linked in various ways with those of a company. They include shareholders, business partners, employees, neighbors, and the community. VIEW ENTIRE GLOSSARY

Executive committee

Management body of joint stock companies; at Clariant the Executive Committee currently comprises four members. VIEW ENTIRE GLOSSARY


Compliance is a key element of Corporate Governance. It refers to compliance with the law and directives as well as with voluntary codes within the company. VIEW ENTIRE GLOSSARY