Sustainability risks and opportunities

Managing sustainability risks and opportunities is integrated into a multi-disciplinary, company-wide risk management processes at Metso. We have a systematic method for annually assessing the probability and impact of sustainability-related risks.

Identifying our potential sustainability threats and opportunities

Risk management is an integral part of Metso’s operational management. Through risk management, we can identify our potential sustainability threats and opportunities and plan our actions more carefully. Effective risk management ensures the continuity of our operations despite changing circumstances.

Managing sustainability risks and opportunities is integrated into a multi-disciplinary, company-wide risk management processes at Metso. We have a systematic method for annually assessing the probability and impact of sustainability-related risks.

The potential risks and opportunities related to sustainability arise from the availability of sufficient competence resources, the health and safety of our personnel, our ability to develop our product and technology portfolio according to the changing needs of customers, and the adequacy and pricing of financing both for us and our customers.

Sustainability-related risks are assessed once a year at the Group-level by Metso’s Risk Management Team. Each Metso reporting segment uses Metso’s risk map to annually assess the probability and impacts of sustainability-related risks and to define the need for and priority of actions. The risk assessment process includes the actions needed, accountabilities, time frame and decisions to handle the residual risk.

Sustainability risk and opportunity assessment

Metso brand

Metso’s strong brand and good reputation are imperative to us. Any action or event negatively influencing our brand and reputation, including also the potential lack of social acceptance, is a risk to our industry benchmark position and hence to our capacity for growth. The continuous, positive development of the Metso brand and reputation is a major opportunity for Metso’s sustainable growth and for a positive perception among our stakeholders.

Health and safety

We continuously focus on identifying and preventing health and safety risks. We thoroughly investigate all accidents and near-miss incidents, and initiate necessary actions to prevent them in the future. Travel safety and security guidelines, our common travel insurance program and travel information system improve the safety of our employees who travel around the world.

Financial markets

Metso’s economic responsibility is to benefit all our stakeholders through profitable business operations. Securing the continuity of our operations requires that we have sufficient funding available under all circumstances. Various economic uncertainties globally could potentially have a negative impact on funding from capital markets.

Metso employees and competencies

Ensuring the capabilities of Metso employees is crucial for securing the development of our business and competitiveness. Resource and competence planning, as well as successor planning for key positions in the businesses, is important. Our ability to attract and retain talent is essential in achieving our growth and global presence targets.

Emerging markets

The ability to maintain and develop a global presence in emerging markets is seen as an opportunity for Metso. Our business development is strongly linked to our ability to expand our operations in new, rapidly emerging markets. There are also threats related to operating in these markets. Such threats may be associated with factors including business limitations due to our reputation as a responsible, ethical corporate citizen.

Environment

The biggest threats and opportunities related to the environment and climate change are transferred to Metso from our customers and are thus linked to our products, technology, and research and technology development. We assist our customers in reducing their CO2 emissions through energy savings in their existing operations or through innovative energy-efficient technologies for new plants.

The supply of clean water is also a global challenge. We have a strong focus on developing solutions to significantly reduce water consumption in our customer industries. By systematically monitoring the development of environmental issues, we strive to find new business opportunities, which, if overlooked, would pose a strategic threat.

Stricter environmental legislation and increased environmental awareness is a trend both in developed and emerging markets. This creates opportunities for us to offer new intelligent solutions that improve our customers’ energy efficiency, reduce emissions, promote recycling and meet more stringent environmental standards. Based on our risk assessment results, we are managing regulatory development challenges to maintain a global competitive position.

The price and availability of energy are critical to our customers. Any regulatory changes affecting energy prices or availability could therefore affect us as well. A sudden and substantial change in COemissions regulations can potentially turn into a technology threat for us if we are not able to provide new types of solutions. Yet, an energy shortage could also open new business opportunities for Metso.

All climate change related risks with possible probability and possible impact will be noted. Climate change and environmental risks are assessed once a year on a group-level by Metso's Risk Management Team. The results are annually reported to the Metso Board, Audit Committee and Executive Team.

 

Due to climate change the annual amount of precipitation and extreme weather conditions are becoming common. Many of Metso's productions sites are situated close to water systems because of the need for process cooling water in its production phases. Extreme weather condition e.g. sudden floods of water ways might affect Metso's operations and create therefore a risk for production by posing a risk of water damaging the machines or cause even a production site shutdown. To prevent operational shutdowns caused by extreme weather conditions Metso's production sites have been altered to now handle better sudden changes.

 

Environmental risks and natural events could trigger a change in environmental legislation, which in turn, could become a catalyst for further business. We see Metso’s role as a significant technology developer for our customers’ processes, satisfying an increased demand for sustainable technology solutions.