For example, climate change, access to important natural resources, violations of human rights, and conflicts can lead to greater risk exposure for us as a company. The impact can be either direct, for example in the form of workplace accidents, or indirect, for example via subcontractors or other stakeholders.
Both at global management and at each site, risk analysis is performed annually, which include risks linked to sustainability. To manage our sustainability risks and determine the most critical topics for us to address and work with, we regularly perform a double materiality analysis as an integral part of our risk management process that is carried out at different levels of the business. This analysis considers both the impact our company has, or can have, on the environment and/or people and the financial impact that various sustainability topics have or may have on our company. In addition to this, we address sustainability topics that are important to our business or prioritized by our stakeholders. This ensures that we are aligned with both industry standards and stakeholder expectations.
In production, risk analyses are carried out for each project or at each production stage. The risk analyses are updated when necessary or when there has been a change that can affects the assessment.
Environment
The main risks linked to environment that have been identified during the double materiality analysis are at this moment linked to climate change, energy and resource use. Climate change can affect the sites through extreme weather situations such as heat waves, torrential rain, or strong winds. Extreme rainfall could cause uncontrolled flooding which, among other things, can result in water pollution. The risk of these events varies between the different sites and the risks are assessed and managed locally so that measures can be adapted to local conditions.
Such events as described above could lead to risks for employees and the public as well as large costs for repairs and/or clean-up or restoration after environmental accidents or in the case of impacts linked to climate change. It could also lead to longer periods of power failures or other disruptions that contribute to loss of production or that entire operations cannot be used for some time. In the future, there may be tougher legislation or other external demands on businesses regarding, for example, emissions, energy consumption, or the like that may affect the business by steering investments or the direction of the company. Tougher demands can be seen as risks, or opportunities depending on how well-functioning the environmental work is.
The steel industry accounts for a significant part of greenhouse gas emissions globally. In order to reduce our impact and risks connected to it, we strive to phase out fossil fuels in our operations, use energy and materials in an efficient way or in other ways reduce the emissions connected to our business and our products.
As for resource use and circular economy we focus, among other things, to enhance the material exchange for the wire rod we buy. As much as possible of what we buy should be included in our products and as small a percentage as possible should become scrap in the process. Steel scrap that arises in our operations is recycled by sending it back to suppliers upstream in the value chain who use it as raw material in steel production.
Social
The main risks linked to social topics that have been identified during the double materiality analysis are at this moment linked to our own workforce, their working conditions, equal treatment and opportunities for all. In our business plan, one of three focus areas is that we want our company to be a great place to work and we strive for employees to be proud of belonging to it. To achieve this, it is important to have good working conditions, equal treatment and opportunities for all and that we have a sound corporate culture.
Our production involves a lot of manual work and work with different types of machines. This entails risks that our employees need to be aware of. We have work instructions and routines, showing how the work is carried out in a safe manner, which must be followed. We work with systematic follow-up to detect deviations and improve the working environment at our sites. There are also several local and global forums internally focusing on health and safety discussions and improvements in our work environment. Our new hardening technique which means replacing hazardous substances with safer water-based substances is a measure that is good both for our own workforce and the environment.
Governance
The main risks linked to economic or governance topics that have been identified during the double materiality analysis are at this moment linked to our corporate culture, corruption and bribery and also the geopolitical situation in the world. To prevent the risk of bad business ethics, corruption, discrimination, or violations of human rights, we have governing documents that all employees have access to. These specify how employees should act in situations where they represent Suzuki Garphyttan and which guidelines we have.
Climate change can also lead to economic impacts on our company. For example, it can lead to a reduced supply of, or higher prices for critical raw materials or energy for us or actors upstream in the value chain. It can also lead to stops or delays in the value chain. Extreme weather and the like can also affect specific sites or suppliers and cause their production to be stopped, delayed, or reduced in capacity.
Other changes in the world situation can affect global free trade. For example, the upcoming climate tariffs in the EU (CBAM) can affect companies that operate in several markets or have international connections. The impact this sort of things will have depends on what is happening in the world around us and what decisions are made at the national or intergovernmental level. There are also sustainability risks linked to our suppliers or other actors in the value chain that are outside our control. These risks need to be carefully monitored so that disruptions in the value chain do not affect our operations more than necessary.
One way of handling these types of risks is that we have a broad supplier base, which reduces the vulnerability that arises from only having single suppliers. We want to have several suppliers, among other things to be able to offer customers local or global suppliers or suppliers who can provide wire rod with less environmental impact.
We are implementing a gradual transfer so that the products can be used in other industries and/or applications. It may result in the emergence of new competitors or customers, both potentially requiring changes in our operations. There may also be more, or other types of requirements linked to new products or production methods, for example, requirements for hygiene, which substances can be used in production, or requirements for other classifications, markings, or similar quality assurance depending on how the products will be used.
For example, the ISO/TS 16949 standard regarding quality management systems applies to suppliers, to the automotive industry. It is not used in other industries, where there may be requirements for an ISO 9001 certification instead. To be agile in handling changes in demand, we have a Research & Development (R&D) department and drive the development of products in industries other than automotive.