As a global player in specialty chemicals, Sika is exposed to a variety of risks. To ensure the Group’s freedom of action, safeguard its reputation, and protect the capital invested in Sika, the Group management must regularly analyze potential risks and integrate them into the strategic decision-making process. Sika recognizes that climate change is impacting the world, and it must be addressed in the risk management process and strategic planning.
Risk Governance
The Board of Directors (BoD) is Sika’s highest governing body and is responsible for the assessment of risk management. Its duties include the annual reassessment of the risk situation at Group level, and it is also the highest governance level of climate-related risks and opportunities. It is responsible for reviewing and endorsing the implementation of sustainability policies, while the Chair of the Board oversees climate-related topics by receiving regular updates from the Group Management. The Chair of the Board is permanently invited to add climate-related topics to the agenda of the Chief Executive Officer (CEO) and the BoD. The Board of Directors is committed to the Science Based Target initiative (SBTi) to achieve net zero greenhouse gas emissions by 2050.
Group Management regularly reviews the processes underlying risk management, and it is responsible for the development and implementation of actions to address risks (including climatechange-related risks) in line with the defined sustainability strategy and targets. Group Management is responsible for risk management at the highest executive level and gives regular updates to the Board. Risk management (including climate-change-related risks) falls under the domain of the Corporate Finance department, headed by the CFO. The CFO oversees financial and non-financial information and data, while Mergers & Acquisitions (M&A) reviews and consultations take place aspart of the due diligence process.
Risk Management Framework
Sika has a comprehensive risk management system structured at Group level which is effective for all its subsidiaries. Risks are identified at an early stage and integrated into strategic decision-making processes. Risk management helps identify new opportunities and adds value to the business. Sika’s risk management framework is in line with the Enterprise Risk Management (ERM) framework. It ensures that business objectives can be achieved and obligations to customers, shareholders, employees, and society can be met. Climate-related risks are integrated into the ERM framework since any unexpected climaterelated disasters, and corresponding economic fluctuations, might have an impact on global and local markets. Locally, climate-related risks are evaluated by EHS and Operations Managers in collaboration with Regional Operations Managers and General Managers (GMs). GMs consolidate all risks falling under their domain and via the Area Managers report to their Regional Managers. All Regional Managers are part of the Sika Group Management. The information is consolidated at corporate level and aligned with the overall strategy.
TCFD Recommendations
As recommended by the TCFD, Sika monitors the impact of climate-related risks and opportunities on its business through the company risk management framework and strategic planning. Sika understands that climate change is still an evolving topic that requires regular climate impact analysis with further implications on business, strategy, and reporting robustness. Assessing climate-related risks under different scenarios helps Sika to better understand the implications on its current business model and to drive the respective mitigation activities.
Sika's detailed 2022 TCFD Report can be downloaded below.