Related to ESG

The authority supervising risk management at the Capital Group is the Risk and Compliance Committee appointed on 15 September 2022 by way of Resolution No. 11/2022 of the President of the Management Board/CEO of Grupa KĘTY S.A. Previously, the committee’s name was the Risk Management Committee. The change of its name and the scope of competence resulted from the appointment of the Compliance Director and centralisation of supervision of the compliance and risk management areas.

Standing members of the Committee are: the Management Board Member/Financial Director, the Treasury and Risk Management Director (since 1 January 2023 – the Treasury Director), the Compliance Director (since 1 January 2023 – the Compliance and Risk Management Director), the Internal Audit Director, and the Risk/Compliance Coordinators identified by the Heads of the operating segments.

The activities of all bodies and units with regard to risk management are regulated by the following internal documents:

Resolution on the appointment of the Risk and Compliance Committee;
By-law of the Risk and Compliance Committee;
Risk Management Policy; and
Risk Management System Procedure.

In 2022, there were held four meetings of the Risk and Compliance Committee, in which the following matters were discussed and recommended:

issue of the aforementioned internal regulations setting out the Capital Group risk management principles;
approval of risk charts updated during the annual risk review;
deletion of insignificant risks from the risk register, consolidation of similar risks, and introduction of new significant risks related to military actions in Ukraine;
adoption of the current register of material risks of Grupa KĘTY S.A.

In 2022, the Risk and Compliance Committee recommended the adoption of the risk register containing 26 corporate risks important for the Capital Group. Risks referring to the whole Capital Group have their Central Risk Owners, whereas risks in other areas have Segment Risk Owners. A complete description of risk owners may be found in on this site.

Two risks have been defined for which the CSR Director is responsible, namely:

The risk of non-performance or lack of update of the ESG Strategy, resulting in the organisation’s non-compliance with new legal and business requirements.

As a result of risk consolidation, this risk comprises minor ESG risks, including:

the risk of loss of competitiveness, including exclusion from the market due to high carbon footprint of products,
the risk of water deficit for production purposes (applies to the EPS – Segment-related risk),
the risk of failure to obtain cheaper financing due to non-fulfilment of ESG requirements,
the risk of human rights violations;

The risk of non-compliance with the principles of ethics, resulting in non-ethical culture of the organisation and claims on account of breaching the Code of Ethics.

Additionally, within the 26 material risks there are some that are not owned by the CSR Director, although linked to the ESG area, i.e.:

Risk of ineffective OHS policy, which may result in fatal accidents or permanent health impairment, as well as staff shortages difficult to back up – segment-related risk;
Risk of credibility loss by the Company due to rejection from stock listing by the Management Board of the Warsaw Stock Exchange – central risk owned by the IR Director;
Risk of malfeasance, understood as actions or omissions in breach of the generally binding laws – central risk owned by the Compliance and Risk Management Director;
Risk of environment pollution as a result of operations, resulting in the plant closure and high administrative penalties – central risk owned by the Director for Quality and Environmental Protection;
Risk of missing effective supply chain, which results in delays or stoppages in production/sales order performance – segment-related risk;
Risk of fire, flood or other disaster, resulting in losing operating facilities (plant, warehouse), resulting in limiting or stopping production processes and incurring financial losses on that account – segment-related risk.

Corporate risks

Compliance